Alaska Airlines and Horizon Air 2014 Annual Report Download - page 5
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enlarge the economic moat that we are building around our business. Last
year, we reduced our unit costs, excluding fuel, for the 12th year out of the last
13. Alaska’s costs — and our fares — are now much closer to low-cost
carriers’ than to legacy airlines’. And low fares mean that we can grow. In 2014
we added 16 new routes. We now serve the top 25 destinations from Seattle
for business travelers, and our network now encompasses 105 cities with 216
non-stop city pairs. Low costs are a result of our continued (some say
obsessive) focus on productivity and cost management.
Investment-grade credit rating: Alaska is one of only two U.S. airlines to have
an investment-grade credit rating. Our balance sheet is not only one of the
strongest in the business, but it also compares very favorably with high-quality
industrial firms. Our long-term debt on the balance sheet back in 2008 was
$1.6 billion and today it is $686 million. In fact, today we have more cash than
debt on our balance sheet, and this reflects our conscious effort to put capital
to work in a balanced manner and de-risk cash flows for you, our shareholders.
Shareholder returns: Strong fundamental performance in the areas I outlined
above allowed us to post a record $571 million in profit and increase our
earnings per share by 55%. And robust earnings enabled us to return cash to
you. Based on our strong 2014 results, we increased our dividend by 60% in
January. Together with our share repurchases, we distributed $417 million in
cash to shareholders during 2014.
These are compelling results on multiple fronts, and some people who observe our
performance ask us how we do it. The short answer is the same reason Seattle
Seahawks third-year quarterback Russell Wilson got to the Big Game — twice. At the
heart of this achievement is an incredible commitment to performance, to each other
and to the team. We have the best employees in the business — people who are
talented and dedicated and who enjoy working together to help Alaska and Horizon
compete and win. Their caring and dedication comes from their fundamental values of
integrity — doing the right thing — and from something we call Alaska Spirit and
Horizon Heart. As I’ve watched the Company over the last several years, I’ve seen that