Alaska Air Group, Inc. (NYSE: ALK) today reported fourth quarter 2009 net income of $24.1 million, or $0.67 per diluted share, compared to a net loss of $75.2 million, or $2.08 per diluted share, in the fourth quarter of 2008.
Excluding mark-to-market fuel hedge gains of $31.7 million ($19.7 million after tax or $0.55 per diluted share), the company reported net income of $4.4 million, or $0.12 per diluted share, in the fourth quarter of 2009, compared to net income of $16.4 million, or $0.45 per diluted share, excluding special items in the fourth quarter of 2008.
The company reported full-year 2009 net income of $121.6 million, compared to a net loss of $135.9 million in 2008. Excluding the impact of the items noted in the table below, the company reported 2009 net income of $88.7 million, or $2.45 per diluted share, an $84.3 million improvement from the $4.4 million, or $0.12 per diluted share, in 2008.
"Our traffic and unit revenue performance, driven by positive network changes, outpaced the industry throughout the year. This performance, combined with lower fuel costs, placed Alaska Air Group's profitability among the best in the industry for 2009," said Bill Ayer, Alaska Air Group's chairman and chief executive officer. "This marks our sixth consecutive year of profits on an adjusted basis."
Based on its 2009 profit and operational performance, the company will distribute a total of $76 million from its pay-for-performance incentive plans.
"Our employees' ongoing commitment to operating reliably and providing exceptional customer service is fundamental to building a great company for the long term, and broad participation in a common gain-sharing plan helps align Alaska and Horizon employees around important performance goals," said Ayer. "I want to thank our people for their hard work and dedication, which contributed significantly to our 2009 results."
The following tables reconcile the company's adjusted net income and earnings per diluted share (EPS) during the fourth quarters and full years of 2009 and 2008 to amounts as reported in accordance with GAAP (in millions except per-share amounts):
Three months ended Dec. 31,
---------------------------
2009 2008
---- ----
Dollars Diluted EPS Dollars Diluted EPS
------- ----------- ------- -----------
Net income and diluted EPS,
excluding items noted below $4.4 $0.12 $16.4 $0.45
Restructuring charges, net of tax --- --- (5.8) (0.16)
Fleet transition costs -
CRJ-700, net of tax --- --- (4.2) (0.12)
Adjustments to reflect the timing
of gain or loss recognition
resulting from mark-to-market
fuel-hedge accounting, net of tax 19.7 0.55 (50.3) (1.39)
Realized losses on hedge
portfolio restructuring,
net of tax --- --- (31.3) (0.86)
----- ----- ------ ------
Reported GAAP net income (loss) $24.1 $0.67 $(75.2) $(2.08)
Twelve months ended Dec. 31,
----------------------------
2009 2008
---- ----
Dollars Diluted EPS Dollars Diluted EPS
------- ----------- ------- -----------
Net income and diluted EPS,
excluding items noted below $88.7 $2.45 $4.4 $0.12
Change in Mileage Plan terms,
net of tax --- --- 26.5 0.73
New pilot contract transition
costs, net of tax (22.3) (0.62) --- ---
Restructuring charges, net of tax --- --- (8.1) (0.22)
Fleet transition costs
- MD-80, net of tax --- --- (29.8) (0.82)
Fleet transition costs
- CRJ-700, net of tax --- --- (8.4) (0.23)
Adjustments to reflect the timing
of gain or loss recognition
resulting from mark-to-market
fuel-hedge accounting, net of tax 55.2 1.53 (89.2) (2.46)
Realized losses on hedge
portfolio restructuring,
net of tax --- --- (31.3) (0.86)
------ ----- ------- ------
Reported GAAP net income (loss) $121.6 $3.36 $(135.9) $(3.74)
