Alaska Airlines and Horizon Air 2013 Annual Report Download - page 152

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During the third quarter of 2013, as part of the
Company's ongoing evaluation of Mileage Plan
program assumptions, the Company performed a
statistical analysis of historical data, which
refined its estimate of the amount of breakage in
the mileage population. This new refinement
enables the Company to better identify historical
differences between certain of its mileage
breakage estimates and the amounts that have
actually been experienced. As a result, the
Company increased its estimate of the number
of frequent flyer miles expected to expire unused
from 12.0% to 17.4%. Included in the Special
mileage 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, 2013 Cost Basis
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash ........................................... $ 9 $— $— $ 9
Cash equivalents ................................. 71 — — 71
Cash and cash equivalents ......................... 80 — — 80
U.S. government and agency securities ................ 295 1 (2) 294
Foreign government bonds .......................... 11 — — 11
Asset-back securities .............................. 146 — — 146
Mortgage-back securities ........................... 144 1 (2) 143
Corporate notes and bonds ......................... 628 4 (2) 630
Municipal securities ............................... 26 — — 26
Marketable securities ............................. 1,250 6 (6) 1,250
Total ....................................... $1,330 $ 6 $ (6) $1,330
December 31, 2012 Cost Basis
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash ........................................... $ 28 $— $— $ 28
Cash equivalents ................................. 94 — — 94
Cash and cash equivalents ......................... 122 — — 122
U.S. government and agency securities ................ 271 1 — 272
Foreign government bonds .......................... 50 1 — 51
Asset-back securities .............................. 61 1 — 62
Mortgage-back securities ........................... 137 1 (1) 137
Corporate notes and bonds ......................... 577 8 — 585
Municipal securities ............................... 23 — — 23
Marketable securities ............................. 1,119 12 (1) 1,130
Total ....................................... $1,241 $ 12 $ (1) $1,252
Unrealized losses from fixed-income securities
are primarily attributable to changes in interest
rates. Management does not believe any
remaining unrealized losses represent other-
than-temporary impairments based on our
evaluation of available evidence as of
December 31, 2013.
66