Alaska Airlines and Horizon Air 2013 Annual Report Download - page 4
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• Sixth, signicant company contributions over the last decade and favorable market conditions have
resulted in fully funded dened-benet pension plans. We’ve restructured many of our legacy airline
benets, including shifting to dened-contribution plans, which allows us to compete on a 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 income, a 12.4% pre-tax margin, a 13.6% return on
invested capital, and $415 million of free cash ow. These are all records. Strong prots over the last
several years and the balanced use of free cash ow have produced one of the best balance sheets
in the industry. Debt and operating leases are now just 35% of our capital structure and we have no
net debt.
And we are returning capital to shareholders. During 2013, we declared a dividend for the rst time in 21
years, and in early 2014 we increased it by 25%. We bought back 2.5 million shares of our stock in 2013,
and we have now repurchased 21 million shares over the last seven years. We are committed to providing
strong, sustainable returns for our owners.
We take pride in seeing our company grow and perform well. And we’re excited about raising the bar as
we move forward.
As we look ahead, there are some big challenges coming our way, not the least of which is the addition of
signicant new competition in our core West Coast markets. In response, we have undertaken a number
of initiatives designed to make the service we provide to our customers and our communities even better.
It’s because of our people that we can face the future with condence, and all 13,000 of us know that if
we want to continue as a strong and independent airline, it is imperative that we perform well for our
customers, our communities, our employees and most importantly, our owners. We’re looking forward
to doing just that.
I’m incredibly honored to lead the best group of people in the industry, and we appreciate your support
of and your investment in Alaska Air Group.
Sincerely,
Brad Tilden
Chairman and Chief Executive Ocer