Alaska Airlines and Horizon Air 2013 Annual Report Download

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Annual Report

Table of contents

  • Page 1
    Annual Report

  • Page 2

  • Page 3
    ...off at Kitty Hawk is still a net loss!). A few airlines, led by Alaska Air Group, are returning capital to shareholders in meaningful ways - a... leads us to 2013. Here is a short list of the things our people accomplished: • First, we continue to be safe. Both Alaska and Horizon have strong safety ...

  • Page 4
    ...more equal footing with low-cost airlines. And last, but certainly not least, we are leading the industry in creating value for our shareholders. For 2013, we reported $383 million of adjusted net...of and your investment in Alaska Air Group. Sincerely, Brad Tilden Chairman and Chief Executive Officer

  • Page 5
    2014 PROXY STATEMENT

  • Page 6
    ALASKA AIR GROUP, INC. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT TABLE OF CONTENTS GENERAL INFORMATION Annual Meeting Information ...Questions and Answers about the Annual... ...2013 Nonqualified Deferred Compensation ...Potential Payments Upon Change in Control and Termination ......

  • Page 7
    ... Directors set March 18, 2014 as the record date for the Annual Meeting. This means that owners of Alaska Air Group common stock as of the close of business on that date... Stockholders may access, view and download the 2014 Proxy Statement and 2013 Annual Report at www.edocumentview.com/alk. Å Proxy

  • Page 8
    ...Alaska Air Group, Inc. (Air Group or the Company) is soliciting proxies for the 2014 Annual...2013 Annual Report (the Annual Meeting Materials). The Company's Form 10-K for the year ended December 31, 2013 is included in the 2013 Annual Report...access, view and download the Annual Meeting Materials at ...

  • Page 9
    GENERAL INFORMATION but not the stockholder of record of those shares. Employees of the Company's subsidiaries who hold shares of stock in one or more of the Company's 401(k) retirement plans are beneficial owners. What am I voting on? You are being asked to vote on the election of the ten director ...

  • Page 10
    ... and mail - you can use to vote your shares without attending the Annual Meeting. You can vote by mail. If you received this Proxy Statement by... tabulated. By using the Internet or phone to vote, you help Alaska Air Group conserve natural resources and reduce postage and proxy tabulation costs. How...

  • Page 11
    ...nonvotes" on each of the other items at the Annual Meeting. 4 For a description of the effect ... the Company on or before December 5, 2013 and complied with the other requirements included ...notification from the Company? It means that you hold Alaska Air Group stock in more than one account. Please ...

  • Page 12
    ...are shares voted that are held in the Company's 401(k) plan? On the record date, 2,160,457 shares were held in trust for Alaska Air Group 401(k) plan participants. The trustees, Vanguard Fiduciary Trust Company (Vanguard) and Fidelity Management Trust Company (Fidelity), provided Notice of Proxy and...

  • Page 13
    .... Can I attend the Annual Meeting, and what do I need for admission? Admission to the Annual Meeting is limited to Air Group stockholders as of March...of the record date; • a brokerage statement evidencing ownership of shares of Alaska Air Group stock as of the record date; or • a valid proxy form...

  • Page 14
    ...voting. How many votes must the nominees have to be elected? The Company's Bylaws (as amended April 30, 2010) require that each director be elected annually by a majority of votes cast with respect to that director. This means that the number of votes "for" a director must exceed the number of votes...

  • Page 15
    ... as its nominees in this Proxy Statement. Because the Company has not received notice from any stockholder of an intent to nominate directors at the Annual Meeting, each of the directors must be elected by a majority of votes cast. "Abstain" votes and broker non-votes are not treated as votes cast...

  • Page 16
    .... Where can I find the voting results of the Annual Meeting? We will publish the voting results on Form 8K on or about May 14, 2014. You can read or print a copy of that report by going to Investor Information-SEC Filings at www.alaskaair.com or by going directly to the SEC...

  • Page 17
    ... INFORMATION How can I submit a proposal for next year's annual meeting? The Company expects to hold its next annual meeting on or about May 7, 2015. If you wish to... the procedures contained in our Bylaws, please contact: Corporate Secretary Alaska Air Group, Inc. P.O. Box 68947 Seattle, WA 98168 10

  • Page 18
    ... to stand for election, and his term will expire with the upcoming Annual Meeting of Stockholders. The Board of Directors wishes to thank Mr. Langland...the firm. She serves on the boards of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), the Overlake Hospital Medical Center Board, ...

  • Page 19
    ... has served on Toyota's Diversity Advisory Board. She also serves on the boards of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) and Nordstrom, where she chaired the audit committee until November 2013. Until February 2009, she served on the boards of Puget Energy and its...

  • Page 20
    .... Mr. Knight serves on the boards of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), the Timken Museum of Art in San... the American Indian for two three-year terms ending in 2013. He has served the state of Alaska in various advisory and executive capacities, including as mayor of...

  • Page 21
    ...Enterprises (personal investments) and is a director of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), a director and member of the audit...Alaska Air Group Board. Helvi K. Sandvik Director since 2013 Age - 56 Ms. Sandvik was appointed to the Alaska Air Group Board in November 2013...

  • Page 22
    ... Alaska Air Group and of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) effective January 1, 2014. He has served as president of Alaska Airlines since December 2008. In May 2012, Mr. Tilden was named president and CEO of Alaska Air Group and CEO of Alaska Airlines and Horizon Air...

  • Page 23
    ... of this Proxy Statement describes in more detail the Company's executive compensation programs and the decisions made by the Compensation and Leadership Development Committee during 2013.

  • Page 24
    ... with the opportunity to earn market-level or above compensation through short- and long-term incentive plans that pay when performance objectives are met. • Annual Incentive Pay added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, our Board of...

  • Page 25
    ... and has directed that adoption and approval of the Share Amendment be submitted to the Company's stockholders for their consideration at this Annual Meeting. The Company's Board of Directors recommends that stockholders adopt and approve the proposed Share Amendment to the Company's Certificate of...

  • Page 26
    PROPOSALS TO BE VOTED ON Purpose and Background of the Proposed Share Amendment As of March 18, 2014, there were approximately 68,825,259 shares of Company common stock issued and outstanding. This number does not include approximately 1,124,766 shares of Company common stock that are subject to ...

  • Page 27
    ...the State of Delaware. Although the Company's Board of Directors intends to file the Certificate of Amendment as soon as practicable after the Annual Meeting, if, in the judgment of the Company's Board of Directors, any circumstances exist that would make consummation of the proposed Share Amendment...

  • Page 28
    ... has directed that adoption and approval of the Par Value Amendment be submitted to the Company's stockholders for their consideration at this Annual Meeting. The Company's Board of Directors recommends that stockholders adopt and approve the proposed Par Value Amendment to the Company's Certificate...

  • Page 29
    ... of the holders of at least a majority of the outstanding shares of common stock, whether or not present or represented by proxy at the Annual Meeting, is required to approve the Par Value Amendment to the Company's Certificate of Incorporation. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR...

  • Page 30
    ...as reported in 2013: GMI Ratings, an independent investment research firm, rated Alaska Air D for executive pay - our CEO can get long-term incentive pay for below-medium performance. There was the potential for excessive golden parachutes and unvested equity pay would not lapse upon CEO termination...

  • Page 31
    ...2013, the Board separated the roles of chairman and CEO in connection with the transition to a new CEO. As of January 1, 2014, Alaska Air... about the Company's business and the airline industry and consulting with Board members in...independent directors' annual evaluation of the CEO's performance;...

  • Page 32
    ...chairman and CEO positions in 2012-2013 in connection with the transition to a new CEO. Alaska Air Group governance practices ranked among the ... past five years Alaska Air Group has not amended any of its annual reports on Form 10-K. During that period, we amended two quarterly reports on Form 10...

  • Page 33
    ...is common in the airline industry, the Company...poor governance practice. The directors annually evaluate the expertise needed on... over the past four years, and in 2013 adopted a 15-year maximum term limit for... change in control and the CEO has been terminated not "for cause." The arrangements are in...

  • Page 34
    CORPORATE GOVERNANCE STRUCTURE OF THE BOARD OF DIRECTORS In accordance with the Delaware General Corporation Law and the Company's Certificate of Incorporation and Bylaws, our business affairs are managed under the direction of our Board of Directors. Directors meet their responsibilities by, among ...

  • Page 35
    ...approve all auditing and nonauditing services they are to perform; review annual and quarterly financial statements and filings made with the SEC; ... to matters pertaining to controls: a. review major financial reporting risk exposure and adequacy and effectiveness of associated internal controls...

  • Page 36
    ... for tax-qualified retirement plans by monitoring the Alaska Air Group Pension/Benefits Administrative Committee, Defined Contribution Retirement... 29 5. 4. 5. Prepare the Audit Committee Report required for the annual proxy statement. Annually review and reassess the adequacy of the Committee's...

  • Page 37
    ...the report on executive compensation required for the annual proxy statement. Annually review... airline safety. Evaluate the Company's health, safety and environmental policies and practices. Annually...committees held the following number of meetings in 2013: • Audit Committee - 4 • Compensation and...

  • Page 38
    ... with the Company because the amounts of the contributions were immaterial with respect to the Company's and the charitable organization's annual revenues. Each member of the Company's Audit Committee meets the additional independence, financial literacy and experience requirements contained in the...

  • Page 39
    ...of such business is immaterial with respect to the Company's or the organization's annual revenues, does not create a material relationship. For the purposes of these standards, "Company" includes all Alaska Air Group subsidiaries and other affiliates. "Immediate family member" includes the director...

  • Page 40
    ...the 90th day, and no earlier than the close of business on the 120th day, prior to the first anniversary of the prior year's annual meeting. The written notice submitted by a stockholder must also satisfy the additional informational requirements set forth in Article II, Section 9 of the Bylaws. See...

  • Page 41
    ...intends to continue to own the required percentage of shares through the date of the annual meeting with respect to which the candidate is nominated is required. The name or... mail, postage prepaid, to the following address: Board of Directors Alaska Air Group, Inc. PO Box 68947 Seattle, WA 98168 34

  • Page 42
    ...criteria used for candidates recommended by Qualified Stockholders, provided that incumbents will also be considered on the basis of the Committee's annual evaluations of the effectiveness of the Board, its committees and their members. Policy on Minimum Qualifications for All Directors While there...

  • Page 43
    ... Nominating Committee. In addition, on an annual basis, as part of the Board's ..., independent lead director; however, in 2012-2013 the Board temporarily separated the roles of chairman... of understanding of the many complexities of the airline business, the regulatory environment, and the Company's...

  • Page 44
    ...Nominating Committee, presides over these executive sessions. RISK OVERSIGHT Alaska Air Group has adopted an enterprisewide risk analysis and oversight ...the Audit Committee receives quarterly updates regarding the program and an annual in-person review of the program's status by the chief risk...

  • Page 45
    ... of the Board, it ensures that strategic discussions are led by an individual with a deep understanding of the highly technical and complex nature of the airline business. CODE OF CONDUCT AND ETHICS The Company has adopted a Code of Conduct and Ethics that applies to all employees of the Company...

  • Page 46
    ...related persons will be reviewed at least annually. The policy does not require review.... With the exception of the transactions reported here, the amounts involved in these ...CFR § 229.404, the Company discloses that its subsidiary Alaska Airlines, Inc. is a party to aircraft and facilities services ...

  • Page 47
    ... (who presides over executive sessions of the nonemployee directors) or with the nonemployee directors as a group, may write to: Board of Directors Alaska Air Group, Inc. PO Box 68947 Seattle, WA 98168 Depending on the subject matter, management will: • forward the communication to the director or...

  • Page 48
    ... services in the following categories and amounts: 2013 Audit Fees for the Company's Annual Financial Statements and Quarterly Reviews(1) Audit-Related Fees...year. (2) Consists of fees paid in connection with the audit of Air Group's employee benefit plans in all years and $100,000 in fees related ...

  • Page 49
    ...to the completion of the audit. During fiscal years 2013, 2012 and 2011, there were no such services ... Audit Committee has established and annually reviews an Independent Accountant Engagement ... SEC rules or other federal AUDIT COMMITTEE REPORT The following report of the Audit Committee shall not be...

  • Page 50
    ... Committee recommended to the Board of Directors that the audited financial statements be included in Alaska Air Group's Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Audit Committee Charter Audit Committee Independence and Financial Expertise All members of the Audit...

  • Page 51
    ...on the board of Alaska Airlines and $1,000 for service on the board of Horizon Air; • reimbursement of expenses in connection with attending board and committee meetings as well as expenses in connection with director education. Following a market review in late 2013, the annual stock retainer was...

  • Page 52
    ...2013 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. The non-employee directors do not hold any outstanding stock options. Alaska Air...employee director's spouse were provided transportation on Alaska Airlines and Horizon Air. Included in the All Other Compensation ...

  • Page 53
    ... officer of Alaska Air Group; Glenn S. Johnson, president of operating subsidiary Horizon Air Industries and executive vice president of Alaska Air Group; Benito Minicucci, chief operating officer of Alaska Airlines; and Keith Loveless, general counsel of Alaska Air Group. 2013 Company Performance...

  • Page 54
    ...Alaska Air Group and, therefore, the Committee structured executive compensation for 2013 in a way that is generally consistent with that of 2012. Stockholders will have an opportunity annually... of airline companies. For performance-based equity awards granted at the beginning of 2012 and 2013, the...

  • Page 55
    ...annual and long-term incentives are reached, and to surpass the 50th percentile if those targets are exceeded. Objectives of our Executive Compensation Program The objectives of the executive compensation programs, as determined by the Alaska Air.... Beginning in February 2013, the Committee retained ...

  • Page 56
    ... below. • Meridian does not provide other services to Alaska Air Group or its subsidiaries. Meridian's services are limited to...-month period ended December 31, 2013 represents less than one percent of Meridian's total annual revenues for calendar year 2013. • Meridian maintains policies designed ...

  • Page 57
    ... Annually, the Committee reviews and analyzes total direct compensation for the Named Executive Officers. In analyzing the information for 2013, the Committee reviewed the total direct compensation for executives of a peer group of airlines excluding any companies that ceased reporting compensation...

  • Page 58
    ... the Company's annual revenue; and • the Company competes with these peer companies for talent to fill certain key, industry-related executive positions. In preparation for setting 2014 executive compensation, the Committee began in 2013 to review data not only for the airline industry, but...

  • Page 59
    ... awards. Annual incentives and...Airline Peer Group) 2013 Base Salary(1) Alaska Air Group, Inc. Base Salary (Air Group peers) Air Canada United Continental Holdings, Inc. Delta Air Lines Inc. 75th Percentile Southwest Airlines...base salary as reported in the respective company's 2013 proxy statement....

  • Page 60
    ...be made as to that metric. The Committee retains discretion to reduce bonus amounts below the level that would otherwise be paid. For 2013, the Performance-Based Pay Plan metrics were set as follows: Bradley D. Tilden Brandon S. Pedersen Glenn S. Johnson Benito Minicucci Keith Loveless 100% 75% 75...

  • Page 61
    ... Horizon Target Alaska Horizon Maximum Alaska Horizon Operational Performance Safety Risk Level 3+ Events* Employee Engagement/Customer Satisfaction The number of months we exceed our monthly customer satisfaction goal CASM Cost per available seat mile excluding fuel and special items Alaska Air...

  • Page 62
    ...Performance-Based Pay Plan payout for an Alaska Airlines executive: 2013 Performance-Based Pay Calculation* Metrics Actual % of Target Achieved Weight Payout % Safety Risk Level 3+ Events Employee Engagement/Customer Satisfaction CASM Alaska Air Group Profitability Total Payout % Participation Rate...

  • Page 63
    ...inception: History of Performance-Based Pay 250% Alaska average - 121% 200% Horizon average - 122% 188.2% 184.7% 182.7%... the maximum annual payout for each employee is $1,200. In 2013, each employee...their stock options only to the degree that Air Group stockholders would realize value if they had...

  • Page 64
    ...Air Canada, Allegiant, AMR Corporation, Delta Air Lines, Hawaiian Holdings, JetBlue Airways, Republic Airways Holdings, SkyWest, Southwest Airlines, United Airlines... performance stock units annually as part of ... periods beginning in January 2011, 2012 and 2013. In 2011, 100% of the performance ...

  • Page 65
    ... in total shareholder return (TSR) among its airline peer group during the performance period. For the January 1, 2013 through December 31, 2015 performance period, the ...equity grants, when combined with the base salary and annual target incentive opportunity described above, are designed to achieve ...

  • Page 66
    ... generally allocates the of grant-date value (based on the principles used in the Company's financial reporting) of each executive's total equity incentive award among these three types of awards. For 2013, the guidelines applied to the Named Executive Officers are noted in the table below: Equity...

  • Page 67
    ... Income Security Act of 1974 and the Internal Revenue Code on the annual amount of a pension which may be paid under a qualified defined-benefit... Please see the tables under Pension and Other Retirement Plans and 2013 Nonqualified Deferred Compensation and the information following the tables for a ...

  • Page 68
    .... two conditions are met: (1) actual or constructive termination of employment and (2) the consummation of a change-in...reimbursement for Section 280G excise taxes. In February 2013, the Committee further revised existing agreements to eliminate ... annual incentives, performance stock units 61 Å Proxy

  • Page 69
    ..., the Committee recommended to our Board of Directors that the Compensation Discussion and Analysis section be included in the Company's 2013 Annual Report on Form 10K on file with the SEC and the Company's 2014 Proxy Statement. Compensation and Leadership Development Committee of the Board of...

  • Page 70
    ...Alaska Glenn S. Johnson President, Horizon Air Exec VP, Air Group Benito Minicucci Exec VP/Operations and COO, Alaska Keith Loveless(5) Exec VP and General Counsel, Alaska Year (b) 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013... of the Company's 2013 Annual Report filed on Form 10...

  • Page 71
    ...payments and does not represent value received. For 2013, the change in the net present value of future...of the defined-benefit plan are reported in Column (i) and detailed in...airline industry. Also included in the total for Column (i) is the Company's incremental cost of providing flight benefits, annual...

  • Page 72
    ... $ 292 $ 210 $3,170 $ 236 $ 240 Other* $2,841 $8,401 $9,290 $6,056 $4,982 * Includes the Company's incremental cost of providing a flight benefit, annual physical, and the above-market amount paid for accidental death and dismemberment insurance premiums. (5) Mr. Loveless was not a Named Executive...

  • Page 73
    ... stock awards and option awards contained in Note 11 (Stock-Based Compensation Plans) to the Company's Consolidated Financial Statements, included as part of the Company's 2013 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. 66

  • Page 74
    ...held by each of the Named Executive Officers as of December 31, 2013, including the vesting dates for the portions of these awards that had ... reported in Column (g) and Column (i), respectively, by $73.37 (the closing price of Air Group stock on 12/31/13). (2) The performance stock units reported ...

  • Page 75
    ... and 2,490 on 2/11/17; and Mr. Loveless - 2,490 on 2/11/14, 2,490 on 2/11/15, 2,490 on 2/11/16 and 2,490 on 2/11/17. 2013 OPTION EXERCISES AND STOCK VESTED The following table presents information regarding the exercise of stock options by the Named Executive Officers during...

  • Page 76
    ...defined contribution plans as described below.) The Alaska Air Group, Inc. Retirement Plan for Salaried ...Statements, included as part of the Company's 2013 Annual Report filed on Form 10-K with the SEC...defined-benefit retirement plan for salaried Alaska Airlines employees hired prior to April 1,...

  • Page 77
    ...annual retirement benefits are based. For 2013, this limit was $255,000. The tax law also limits the annual benefits that may be paid from a tax-qualified retirement plan. For 2013, this limit on annual...change in control of the Company or upon termination of the participant's employment due to death ...

  • Page 78
    ...laws, amounts deferred under the plan are generally distributed on termination of the participant's employment, although participants may elect an earlier...deferred amounts for the Named Executive Officers as of December 31, 2013. Registrant Contributions in Last FY ($) (c) Aggregate Earnings in Last ...

  • Page 79
    ...-month period preceding the change in control; • receive an annual incentive payment equal to the higher of the executive's target Performance-Based...the executive's employment was terminated. The outstanding equity awards held by the executives as of December 31, 2013 are described in the ...

  • Page 80
    ... the benefits shown to each of our Named Executive Officers as if the executive's employment had terminated due to retirement, death or disability, or change in control on December 31, 2013. The value of accelerated vesting shown in the Equity Acceleration column below assumes the performance share...

  • Page 81
    ... flight benefits on Alaska Airlines and Horizon Air. Flight benefits for...annual usage is equal to actual average annual usage amounts in 2011 through 2013, and that the annual value of the benefit is equal to the annual...unit awards that would vest upon termination of employment in the circumstances ...

  • Page 82
    ... 498,928 (1) Consists of the aggregate total of shares of common stock held by the reporting person either directly or indirectly, including 401(k) Plan holdings. (2) Total beneficial ownership is determined..., and which are described in the 2013 Grants of Plan Based Awards table. 75 Å Proxy

  • Page 83
    ...reported...January 17, 2014 by BlackRock, Inc. reported sole voting power over 4,436,579 shares ... Holding Corporation (RTHC) reported sole voting power over...2014 by the Vanguard Group, Inc. reported sole voting power over 40,653 ...T. Rowe Price Associates, Inc. reported sole voting power over 1,208,370...

  • Page 84
    ... also require the Company to identify in this Proxy Statement any person subject to this requirement who failed to file a report on a timely basis. A Form 4 due March 12, 2013 for Mr. Joseph Sprague relating to the vesting of restricted stock units, forfeiture of shares to cover payroll taxes, and...

  • Page 85
    ...That thereafter, pursuant to resolutions of its Board of Directors, the annual meeting of the stockholders of said corporation was duly called and ...4.1 of Article 4 of the Amended and Restated Certificate of Incorporation of Alaska Air Group, Inc. is hereby amended and restated in full as follows: "...

  • Page 86
    Annual Report on Form 10-K Å Form 10-K

  • Page 87
    ...ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 OR ' TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-8957 ALASKA AIR...

  • Page 88
    ALASKA AIR GROUP, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS PART I ...ITEM 1. OUR BUSINESS ...ITEM 1A. RISK FACTORS ...ITEM 1B. UNRESOLVED STAFF COMMENTS ...ITEM 2. PROPERTIES ...ITEM 3. LEGAL PROCEEDINGS ...ITEM 4. MINE SAFETY DISCLOSURES ......

  • Page 89
    ... our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. We expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent...

  • Page 90
    PART I ITEM 1. OUR BUSINESS Alaska Air Group operates Alaska Airlines and Horizon Air, which together with its partner regional airlines, serve nearly 100 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. During 2013, we carried 27 million passengers while ...

  • Page 91
    ... downloads of our apps during the year. We also increased the number of self-bag tagging locations to eight in 2013 ...terminal into an upgraded, modernized facility that will become our airlines' primary terminal...years, Alaska will be the sole airline tenant of the North Satellite and Horizon will ...

  • Page 92
    ..., and we carry more passengers between Alaska and the U.S. mainland than any other airline. Based on the number of passengers carried in 2013, Alaska's leading airports are Seattle, Los Angeles, Anchorage, Portland, and San Diego. AIR GROUP Alaska Air Group is a Delaware corporation incorporated in...

  • Page 93
    ...total available airline seat capacity. In 2013, the airline industry is expected to report record ...2013, Horizon's operating fleet consisted of 51 Bombardier Q400 turboprop aircraft, compared to 48 Q400's at December 31, 2012. Horizon flights are listed under Alaska's designator code in airline...

  • Page 94
    ... $98 per barrel in 2013. For us, a $1 per barrel increase in the price of oil equates to approximately $11 million of additional fuel cost annually. Said another way, a... fuel prices. Alaska operates an all-Boeing 737 fleet and Horizon operates an all-Bombardier Q400 turboprop fleet. Air Group's fuel-...

  • Page 95
    ...as on-time performance, passenger amenities- including first class seating, quality of buyon-board products, aircraft type, and comfort. In 2013, Alaska Airlines ranked "Highest in Customer Satisfaction among Traditional Network Carriers" by J.D. Power and Associates for the sixth year in a row. All...

  • Page 96
    ...to travel on Alaska and its regional affiliates while earning mileage credit in our partners' programs. AGREEMENTS WITH OTHER AIRLINES Our agreements fall...takes no inventory risk. Our marketing agreements have various termination dates, and at any time, one or more may be in the process of...

  • Page 97
    ... # on Flights Operated by Alaska / Horizon / SkyWest TICKET DISTRIBUTION Airline tickets are distributed through three primary channels: • Frequent Flyer Agreement Major U.S. or International Airlines Aeromexico (a) ...American Airlines/ American Eagle ...Air France ...British Airways ...Cathay...

  • Page 98
    ... 13,177 (10,201 at Alaska and 2,976 at Horizon) active full-time and part-time employees. Wages and benefits, including variable incentive pay, represented approximately 42% of our total nonfuel operating expenses in both 2013 and 2012. Most major airlines, including ours, have employee groups...

  • Page 99
    Alaska's union contracts at December 31, 2013 were as follows: Union Employee Group Number of Employees Contract Status Air Line Pilots ...10/17/2016 Amendable 9/29/2014 Amendable 3/24/2015 Horizon's union contracts at December 31, 2013 were as follows: Union Employee Group Number of Employees ...

  • Page 100
    ... elected Chief Executive Officer of Alaska Air Group, Inc., Alaska Airlines and Horizon Air Industries in May 2012, and was elected Chairman of the Board in November 2013. Mr. Johnson joined Alaska Airlines in 1982, became Vice President/Controller and Treasurer of Horizon Air Industries in 1991 and...

  • Page 101
    ...-K DOT: In order to provide passenger and cargo air transportation in the U.S., a domestic airline is required to hold a certificate of public convenience ...costs. These security infrastructure fees amounted to $13 million each year in 2013, 2012 and 2011. Starting July 1, 2014, the TSA security fee...

  • Page 102
    ...emissions. Alaska and Horizon have ...air transportation system. Authorities in several cities have established aircraft noise reduction programs, INSURANCE We carry Airline...annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports...

  • Page 103
    ... cost. Many airports have increased their rates and charges to air carriers related to higher security costs, increased costs related to updated... reputation and financial results could be harmed in the event of an airline accident or incident. An accident or incident involving one of our aircraft...

  • Page 104
    of airline operations or reduce the demand for air travel. Although lawmakers may impose these additional fees and view ...of our technology-related initiatives. In addition, in recent years, Alaska and Horizon have subcontracted their heavy aircraft maintenance, fleet service, facilities maintenance,...

  • Page 105
    ...Alaska, we believe a large portion of our operation is more susceptible to adverse weather conditions. A general reduction in airline... and from our Seattle hub. In 2013, passengers to and from Seattle accounted...circumstances causing a reduction in demand for air transportation in our key markets. An ...

  • Page 106
    ... have the option to replace air travel with surface travel. Businesses are able to forego air travel by using communication alternatives ... passengers as We rely on partner airlines for codeshare and frequent flyer marketing arrangements. Alaska and Horizon are parties to marketing agreements with ...

  • Page 107
    ... customers to do business with another airline. In addition, we rely on other... operating expenses, accounting for 34%, As of December 31, 2013, the average age of our NextGen aircraft (B737-800, ...one of our power-by-the-hour agreements and terminated another agreement, meaning that we could be more ...

  • Page 108
    ... us. As of December 31, 2013, labor unions represented approximately 83% of Alaska's and 49% of Horizon's employees. Although we have been ... attention from other projects and issues. We compete against the major U.S. airlines and other businesses for labor in many highly skilled positions. If we are...

  • Page 109
    ...Alaska and Horizon lease ticket counters, gates, cargo and baggage space, ground equipment, office space, and other support areas at the majority of the airports they serve. Alaska also owns terminal.... Alaska's major facilities outside of Seattle include a regional headquarters building, an air cargo...

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    results of operations. This forward-looking statement is based on management's current understanding of the relevant law and facts, and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of judges and juries. ITEM 4. MINE ...

  • Page 111
    ... common stock is listed on the New York Stock Exchange (symbol: ALK). The following table shows the trading range of Alaska Air Group, Inc. common stock on the New York Stock Exchange: 2013 High Low 2012 High Low $33.69 31.29 32.69 34.57 SALES OF NON-REGISTERED SECURITIES None PURCHASES...

  • Page 112
    ...total stockholder return since December 31, 2008 with the S&P 500 Index and the Dow Jones U.S. Airlines Index. The graph assumes that the value of the investment in our common stock and each index ... 12/09 12/10 Period Ending 12/11 12/12 12/13 Alaska Air Group S&P 500 Dow Jones US Airlines 26

  • Page 113
    ... financial statements for further details. (b) Includes capitalized interest of $21 million, $18 million, $12 million, $6 million, and $8 million for 2013, 2012, 2011, 2010, and 2009, respectively. (c) Includes flights operated by SkyWest beginning in May 2011 and flights operated by PenAir under...

  • Page 114
    ... regarding our view of 2014. • Accomplishments and Highlights Financial highlights from 2013 include: • Reported record adjusted earnings for 2013, marking our tenth consecutive year in which we reported an adjusted profit. Air Group employees earned $105 million in incentive pay, or more than...

  • Page 115
    .... Alaska Airlines received the FAA's "Diamond Certificate of Excellence" award for the 12th consecutive year; and Horizon Air received the certificate for the 12th time in the last 14 years. 6/7/2013 6/9/2013 8/26/2013 9/16/2013 11/1/2013 11/1/2013 11/1/2013 11/1/2013 11/7/2013 11/8/2013 12/18/2013...

  • Page 116
    ... traditional and low-cost competitors. Specifically, Delta Air Lines is significantly increasing its international and domestic ...2013, Alaska Airlines' pilots and Horizon's flight attendants approved new, fiveyear contracts. In December 2013, we reached a tentative fiveyear agreement with Alaska...

  • Page 117
    ... $38 million ($23 million after tax, or $0.33 per share) in 2012. In 2013, we recognized a one-time, noncash Special mileage plan revenue item of $192 million ($... used by management and by the Air Group Board of Directors in assessing quarterly and annual cost performance; • ADJUSTED (NON-...

  • Page 118
    ... of other airlines. Revenues adjusted for the one-time Special mileage plan item is as follows: Twelve Months Ended December 31, 2013 2012 % Change...(0.1) (in millions, except per-share amounts) Net income and diluted EPS as reported ...$ 508 $ 7.16 Mark-to-market fuel hedge adjustments, net of tax...

  • Page 119
    OPERATING STATISTICS SUMMARY (unaudited) Alaska Air Group, Inc. Below are operating statistics we use to measure performance. We often refer to unit revenues and adjusted unit costs, which is a non-GAAP measure. 2013 Twelve Months Ended December 31, 2012 Change 2011 Change PRASM ... 23.83¢ 22.98...

  • Page 120
    ... factor compared to the prior year. Increased competition in the state of Alaska and along the west coast put downward pressures on yield and load factor...consistent with the way expenses are reported internally and evaluated by management: Year Ended December 31, % 2013 2012 Change $1,459 2,666 $4,...

  • Page 121
    ... Cost/ Cost/ Dollars Gal Dollars Gal Wages increased 6%, primarily due to a newly ratified contract with Alaska's pilots that was effective April 1, 2013. Additionally, we hired 2% more FTEs to support increased flying and other strategic initiatives, such as IT and hassle-free projects. Pension...

  • Page 122
    ... most internal management reporting and incentive pay plans. Losses recognized for hedges that settled during the year were $52 million in 2013, compared to losses...the year we modified one of our power-bythe-hour agreements and terminated another related to our B737 fleet, resulting in a decrease in ...

  • Page 123
    ...264 0.80 Food and beverage service ...84 79 0.25 Other ...278 248 0.83 Horizon Pretax profit for Horizon was $20 million in 2013 compared to $24 million in 2012. CPA Revenues (100% of which are from Alaska and eliminated in consolidation) decreased due to lower operational incentives being met. The...

  • Page 124
    ...million, or $0.33 per diluted share) in expense as part of Horizon's fleet transition to an all-Q400 fleet. Our operating costs per ...8 (in millions, except per-share amounts) Net income and diluted EPS as reported ...Fleet transition costs, net of tax ...Mark-to-market fuel hedge adjustments, net...

  • Page 125
    ...operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management: Year Ended December 31, % 2012 2011..., which waives the checked bag fee for residents in the state of Alaska who have joined the program. Wages increased 3% on a 1% increase ...

  • Page 126
    ... of $5 million and increased landing fees of $4 million due to increased departures of 1.8%. These increases were partially offset by lower rents at LAX of $8 million. Raw or "into-plane" fuel cost ...$1,397 $3.31 $1,289 $ 3.24 Gains on settled hedges ...24 0.06 (21) (0.06) Consolidated economic...

  • Page 127
    ...annualization of B737 aircraft and Q400 aircraft delivered in 2011, as well as the deliveries of B737 aircraft in 2012. In addition, we incurred depreciation of $6 million related to Terminal 6 at LAX...our transition to an all-Q400 fleet at Horizon in 2011. CONSOLIDATED NONOPERATING INCOME (EXPENSE) ...

  • Page 128
    ...(100% of which are from Alaska and eliminated in consolidation) were flat with the prior year. The $2 million decrease in Horizon's non-fuel operating expenses was... from operations; Our 61 unencumbered aircraft as of December 31, 2013 in our operating fleet that could be financed, if necessary; Our...

  • Page 129
    ...Long-term debt-to-capital ratio (b) ...(a) Excludes Special mileage plan revenue item. (b) Calculated using the present value of remaining aircraft lease payments. December 31, 2013 $ 1,330 31% 754 2,029 35%:65% December 31, 2012 $ 1,252 31% 871 1,421 48%:52% Change $ 78 - pt (117) 608 (13) pts The...

  • Page 130
    ... in investing activities was $698 million during 2013, compared to $645 million in 2012. ...$425 $300 (a) Alaska has options to acquire 62 B737 aircraft with deliveries in 2015 through 2024. Horizon has options to acquire ...received $178 million in T6 LAX reimbursement. In 2011, we made debt payments ...

  • Page 131
    ... engines, spare parts and ground service equipment. We modified the first facility in 2012 by extending the term from March 2013 to August 2015 and the second facility in 2013 by extending the term from March 2016 to March 2017, and reduced the commitment fee for both facilities. The Company has...

  • Page 132
    .... The following table summarizes aircraft purchase commitments by year, as of February 13, 2014: Actual Fleet Count Dec 31, Dec 31, 2012 2013 2014 Changes Expected Fleet Activity Dec 31, 2015 Dec 31, 2014 Changes 2015 Aircraft B737 Freighters & Combis ...B737 Passenger Aircraft ...Total Mainline...

  • Page 133
    ... shown above using interest rates in effect as of December 31, 2013. (c) Includes minimum obligations under our long-term power-by-the...using an accelerated depreciation method or bonus depreciation if available. For financial reporting purposes, the majority of our assets are depreciated over 15 to ...

  • Page 134
    ... is recognized as passenger revenue when awards are issued and flown on one of our airlines or expire, and as other-net revenue for awards issued and flown on partner airlines. At December 31, 2013, we had approximately 137 billion miles outstanding, resulting in an aggregate liability and deferred...

  • Page 135
    ...patterns. 4. The number of awards redeemed for travel on our airlines versus other airlines: The cost for us to carry an award passenger is typically ...) consider historical activity in our members' accounts and other factors. In 2013, as part of the modification of our affinity card agreement, we re...

  • Page 136
    ...expense by approximately $8 million. Pension expense normally increases as the expected rate of return on pension plan assets decreases. As of December 31, 2013, we estimate that the pension plan assets will generate a long-term rate of return of 6.75%, which decreased 0.5% from the rate at December...

  • Page 137
    ... value of fuel hedge contracts was $16 million at December 31, 2013 compared to a portfolio value of $64 million at December 31, 2012... not have any collateral held by counterparties to these agreements as of December 31, 2013. We continue to believe that our fuel hedge program is an important part of...

  • Page 138
    ...market risk associated with changes in interest rates. If short-term interest rates were to average 1% more than they did in 2013, interest income would increase by approximately $14 million. ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA SELECTED QUARTERLY CONSOLIDATED FINANCIAL...

  • Page 139
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), Alaska Air Group, Inc.'s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control Integrated Framework (1992) issued by the Committee...

  • Page 140
    ALASKA AIR GROUP, INC. CONSOLIDATED BALANCE SHEETS As of December 31 (in millions) 2013 2012 ASSETS Current Assets Cash and cash equivalents ...Marketable securities ...Total cash and marketable securities ...Receivables-less allowance for doubtful accounts of $1 and $0 ...Inventories and ...

  • Page 141
    ALASKA AIR GROUP, INC. CONSOLIDATED BALANCE SHEETS-(continued) As of December 31 (in millions except share amounts) 2013 2012 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable ...Accrued aircraft rent ...Accrued wages, vacation and payroll taxes ...Other accrued liabilities...

  • Page 142
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31 (in millions, except per-share amounts) 2013 2012 2011 Operating Revenues Passenger Mainline ...$ 3,490 Regional ...777 Total passenger revenue ...Freight and mail ...Other-net ...Special mileage plan revenue ......

  • Page 143
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS Year Ended December 31 (in millions) 2013 2012 2011 Net Income ...$ 508 $ 316 $ 245 Other comprehensive income (loss): Related to marketable securities: Unrealized holding gains (losses) arising during the period ...(9) 9 ...

  • Page 144
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Common Stock Common ...stock purchase plan ...Stock issued under stock plans ...Balances at December 31, 2012 ...2013 net income ...Other comprehensive income/(loss) ...Common stock repurchase ...Stock-based compensation ......

  • Page 145
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31 (in millions) 2013 2012 2011 Cash flows from operating ......Proceeds and tax benefit from issuance of common stock ...Terminal 6 at LAX reimbursement ...Other financing activities ...Net cash used in financing...

  • Page 146
    ... 31, 2013 NOTE 1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air...

  • Page 147
    ...and 2012, respectively. Inventory and supplies-net also includes fuel inventory of $23 million and $23 million at December 31, 2013 and 2012, respectively. Repairable and rotable aircraft parts inventories are included in flight equipment. Property, Equipment and Depreciation Property and equipment...

  • Page 148
    ... as of December 31, 2013 and December 31, 2012, respectively. Mileage Plan Alaska operates a frequent flyer program ("Mileage Plan") that provides travel awards to members based on accumulated mileage. For miles earned by flying on Alaska or Horizon and through airline partners, the estimated cost...

  • Page 149
    ... to air transportation and certificates for discounted companion travel until the transportation is delivered. The deferred proceeds are recognized as passenger revenue for awards redeemed and flown on Alaska or Horizon, and as Other-net revenue for awards redeemed and flown on other airlines (less...

  • Page 150
    ...stock units, using the treasury-stock method. In 2013, 2012, and 2011, antidilutive stock options excluded ... liability approach for accounting and reporting income taxes. Deferred tax assets...accumulate miles either by (i) flying on Alaska or on the Company's airline 64 partners, or (ii) earning miles...

  • Page 151
    ...companion travel; use of the Alaska Airlines brand and access to frequent .... The relative selling price of the undelivered element (air transportation) is lower than the rate at which it...plan revenue. The impact on earnings are as follows: 2013 2012 2011 Special mileage plan revenue (in millions) ...

  • Page 152
    ... plan revenue item above is $44 million of additional revenue related to the effect of the change on the deferred revenue balance as of July 1, 2013. NOTE 3. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Components for cash, cash equivalents and marketable securities (in millions): December 31...

  • Page 153
    ... February 2020 through March 2021 to coincide with the lease termination dates. Fair Values of Derivative Instruments Fair values of derivative instruments on the consolidated balance sheet as of December 31 (in millions): 2013 2012 Derivative Instruments Designated as Hedges Interest rate swaps...

  • Page 154
    ... other current assets" on the consolidated balance sheet. The Company posted collateral of $7 million, $15 million and $1 million as of December 31, 2013, 2012 and 2011, respectively. The collateral was provided to one counterparty associated with the net liability position of the interest rate swap...

  • Page 155
    ... total notional value. The Company has no other financial assets that are measured at fair value on a nonrecurring basis at December 31, 2013. Fair Value of Other Financial Instruments The Company used the following methods and assumptions to determine the fair value of financial instruments that...

  • Page 156
    ... fair value of long-term fixed-rate debt as of December 31 (in millions): 2013 Carrying Amount ...$703 Fair value ...762 2012 $844 915 NOTE 6. LONG-TERM DEBT...between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. Primarily due ...

  • Page 157
    ... reassess the need for a valuation allowance during each future reporting period. Federal ...Alaska ...California ...Oregon ... 2010 2010 2009 2002 to to...years that were utilized in 2010 and later years. At December 31, 2013, the total amount of unrecognized tax benefits is recorded as a liability,...

  • Page 158
    ... defined-contribution retirement plans cover various employee groups of Alaska and Horizon. The defined-benefit plans provide benefits based on an... of 4.85% and 3.95% were used as of December 31, 2013 and 2012, respectively. For 2013, the rate of compensation increase used varied from 2.90% to 3.93...

  • Page 159
    ...: ...42% - 52% Nonqualified Defined-Benefit Pension Plan Alaska also maintains an unfunded, noncontributory defined-benefit plan for certain...first four years of employment and 5.00% thereafter for the years ended December 31, 2013, and 2012, and 5.00% per year for the year ended December 31, 2011...

  • Page 160
    ... (unfunded) ...Percent funded ...The accumulated benefit obligation for the combined qualified defined-benefit pension was $1,603 million and $1,733 million at December 31, 2013, and 2012, respectively. $1,873 46 73 (226) (57) $1,709 $1,538 205 83 (57) $1,769 $ 60 104% $1,594 38 73 214 (46) $1,873...

  • Page 161
    ...be paid over the next ten years under the defined-benefit pension plans from the assets of those plans as of December 31, 2013 (in millions): Qualified Nonqualified 2014 ...2015 ...2016 ...2017 ...2018 ...2019-2023 ... $72 84 76 93 92 548 $ 2 2 4 2 2 18 Postretirement Medical Benefits The Company...

  • Page 162
    ... next ten years under the postretirement medical benefits plan as of December 31, 2013 (in millions): 2014 ...2015 ...2016 ...2017 ...2018 ...2019- 2023 ...$ 3 4 4 5 6 36 Pilot Long-term Disability Benefits Alaska maintains a long-term disability plan for its pilots. The long-term disability plan...

  • Page 163
    ...terminal facilities are also leased. Rent expense was $290 million, $275 million, and $275 million, in 2013...2013, Alaska had CPAs with three carriers, including the Company's whollyowned subsidiary, Horizon. Horizon sells 100% of its capacity under a CPA with Alaska. On May 14, 2011, SkyWest Airlines...

  • Page 164
    ...Alaska. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. Future payments (excluding Horizon...' EQUITY Dividends During 2013, the Board of ...

  • Page 165
    ... stock-based compensation for nonvested options and awards and the weightedaverage period the expense will be recognized for the year ended December 31, 2013 (in millions): WeightedAverage Amount Period Stock options to purchase common stock are granted at the fair market value of the stock on the...

  • Page 166
    ...grant using the Black-Scholes optionpricing model with the following weighted-average assumptions used for grants in the years ended December 31: 2013 2012 2011 Expected volatility ...67% 55% 56% Expected term ...6 years 6 years 6 years Risk-free interest rate ...1.10% 1.08% 2.26% Expected dividend...

  • Page 167
    .... Employees purchased 171,227, 157,373, and 125,564 shares in 2013, 2012, and 2011 under the ESPP. NOTE 12. OPERATING SEGMENT INFORMATION Air Group has two operating airlines-Alaska Airlines and Horizon Air. Each is a regulated airline with separate management teams. To manage the two operating...

  • Page 168
    Operating segment information is as follows (in millions): Alaska Year Ended December 31, 2013 Air Group Special Mainline Regional Horizon Consolidating Adjusted (a) Items (b) Consolidated Operating revenues Passenger Mainline ...$3,490 Regional ...- Total passenger revenues ...CPA revenues ......

  • Page 169
    Alaska Year Ended December 31, 2011 Air Group Special Mainline Regional Horizon Consolidating Adjusted (a) Items (b)... restructuring expenses. 2013 2012 2011 Depreciation: Alaska (a) ...$ Horizon ...Parent company ...Consolidated ...$ Capital expenditures: Alaska (a) ...$ Horizon ...Consolidated ...$...

  • Page 170
    ... Treadway Commission (the COSO Framework). Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2013. We intend to regularly review and evaluate the design and effectiveness of our disclosure controls and procedures and...

  • Page 171
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders Alaska Air Group, Inc.: We have audited Alaska Air Group, Inc.'s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992...

  • Page 172
    ITEM 9B. OTHER INFORMATION None. 86

  • Page 173
    ... item is incorporated herein by reference from the definitive Proxy Statement for Air Group's 2014 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission..."Beneficial Ownership of Securities" in our 2013 Proxy Statement and is incorporated by reference. 87 Å Form 10-K

  • Page 174
    ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated herein by reference from our 2014 Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated herein by...

  • Page 175
    PART IV ITEM 15. EXHIBITS The following documents are filed as part of this report: 1. Exhibits: See Exhibit Index. 89 Å Form 10-K

  • Page 176
    ... 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALASKA AIR GROUP, INC. By: /S/ BRADLEY D. TILDEN Date: February 13, 2014 Bradley D. Tilden President and Chief Executive Officer...

  • Page 177
    ... and Alaska Airlines, Inc. Purchase Agreement No. 3866 between The Boeing Company and Alaska Airlines, Inc. Alaska Air Group Performance... 10-Q/A August 2, 2011 10.1 10.7# 10-K February 14, 2013 10.1 10.8# 10-K February 14, 2013 February 1, 2010 10.2 10.10* 8-K 10.1 91 Å Form 10-K

  • Page 178
    ..., Form of Stock Unit Award Agreement, as amended 2008 Performance Incentive Plan, Form of Stock Unit Award Agreement Incentive Award, as amended Alaska Air Group, Inc. 2004 LongTerm Incentive Plan and original form of stock option and restricted stock unit agreements 8-K 8-K May 22, 2008 May 22...

  • Page 179
    ... Agreement Alaska Air Group, Inc. 1999 LongTerm Incentive Equity Plan Alaska Air Group, Inc. 1997 Non Officer Long-Term Incentive Equity Plan Alaska Air Group, Inc. 1996 LongTerm Incentive Equity Plan Alaska Air Group, Inc. Non Employee Director Stock Plan Alaska Airlines, Inc. and Alaska Air Group...

  • Page 180
    31.1†Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted ...

  • Page 181
    EXHIBIT 31.1 CERTIFICATIONS I, Bradley D. Tilden, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Alaska Air Group, Inc. for the period ended December 31, 2013; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a ...

  • Page 182
    EXHIBIT 31.2 CERTIFICATIONS I, Brandon S. Pedersen, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Alaska Air Group, Inc. for the period ended December 31, 2013; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a ...

  • Page 183
    ...18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Alaska Air Group, Inc. (the "Company") on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the...

  • Page 184
    ...18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Alaska Air Group, Inc. (the "Company") on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the...

  • Page 185
    ... Byron I. Mallott Safety Marion C. Blakey, Chairman Jessie J. Knight, Jr. Byron I. Mallott Helvi K. Sandvik J. Kenneth Thompson Alaska Airlines Horizon Air Alaska Air Group Officers Officers Officers Bradley D. Tilden Bradley D. Tilden Bradley D. Tilden Chairman, President & CEO Chairman, President...

  • Page 186
    ... regional carrier and performs all of its flying for Alaska Airlines under a capacity purchase arrangement. Horizon serves nearly 7.1 million passengers annually. Its hubs are Seattle and Portland. CORPORATE SUSTAINABILITY REPORT Alaska Air Group is committed to leading our industry in environmental...

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