OPERATING SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Operating Segment Information

OPERATING SEGMENT INFORMATION

Management views the business in three operating segments.

Alaska Mainline - The Boeing 737 part of Alaska's business with average stage lengths greater than 1,000 miles.

Alaska Regional - Alaska's shorter distance network. In this segment, we record actual on-board passenger revenue, less costs such as fuel, distribution costs, and payments made to Horizon, SkyWest and PenAir under CPAs.

Horizon - Horizon operates regional aircraft. All of Horizon's capacity is sold to Alaska under a CPA.   Expenses include those typically borne by regional airlines such as crew costs, ownership costs, and maintenance costs.

The following table reports “Air Group adjusted,” which is not a measure determined in accordance with GAAP. The Company's chief operating decision-makers and others in management use this measure to evaluate operational performance and determine resource allocations. Adjustments are further explained below in reconciling to consolidated GAAP results. All inter-company revenues and expenses between Alaska and Horizon are eliminated in consolidation.

Operating segment information is as follows (in millions):

	Three Months Ended June 30, 2012
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	862.7		$	—	$	—		$	—		$	862.7		$	—		$	862.7
Regional	—			187.6		—			—			187.6			—			187.6
Total passenger revenues	862.7			187.6		—			—			1,050.3			—			1,050.3
CPA revenues	—			—		89.2			(89.2		)	—			—			—
Freight and mail	29.5			1.1		—			—			30.6			—			30.6
Other-net	115.4			15.1		1.8			—			132.3			—			132.3
Total operating revenues	1,007.6			203.8		91.0			(89.2		)	1,213.2			—			1,213.2
Operating expenses
Operating expenses, excluding fuel	532.2			139.0		83.1			(88.7		)	665.6			—			665.6
Economic fuel(c)	316.7			45.5		—			—			362.2			69.6			431.8
Total operating expenses	848.9			184.5		83.1			(88.7		)	1,027.8			69.6			1,097.4
Nonoperating income (expense)
Interest income	4.4			—		—			0.7			5.1			—			5.1
Interest expense	(12.7		)	—		(4.1		)	(0.4		)	(17.2		)	—			(17.2		)
Other	5.1			—		0.4			(0.1		)	5.4			—			5.4
	(3.2		)	—		(3.7		)	0.2			(6.7		)	—			(6.7		)
Income (loss) before income tax	$	155.5		$	19.3	$	4.2		$	(0.3	)	$	178.7		$	(69.6	)	$	109.1

	Three Months Ended June 30, 2011
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	774.2		$	—	$	—		$	—		$	774.2		$	—		$	774.2
Regional	—			179.0		—			—			179.0			—			179.0
Total passenger revenues	774.2			179.0		—			—			953.2			—			953.2
CPA revenues	—			—		93.5			(93.5		)	—			—			—
Freight and mail	28.0			1.0		0.1			—			29.1			—			29.1
Other-net	110.7			15.4		1.8			—			127.9			—			127.9
Total operating revenues	912.9			195.4		95.4			(93.5		)	1,110.2			—			1,110.2
Operating expenses
Operating expenses, excluding fuel(b)	498.4			138.1		83.8			(92.2		)	628.1			26.8			654.9
Economic fuel(c)	285.2			41.4		—			—			326.6			70.9			397.5
Total operating expenses	783.6			179.5		83.8			(92.2		)	954.7			97.7			1,052.4
Nonoperating income (expense)
Interest income	7.1			—		—			(0.8		)	6.3			—			6.3
Interest expense	(16.3		)	—		(4.4		)	0.7			(20.0		)	—			(20.0		)
Other	2.3			—		0.2			0.4			2.9			—			2.9
	(6.9		)	—		(4.2		)	0.3			(10.8		)	—			(10.8		)
Income (loss) before income tax	$	122.4		$	15.9	$	7.4		$	(1.0	)	$	144.7		$	(97.7	)	$	47.0

	Six Months Ended June 30, 2012
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	1,586.1		$	—	$	—		$	—		$	1,586.1		$	—		$	1,586.1
Regional	—			360.4		—			—			360.4			—			360.4
Total passenger revenues	1,586.1			360.4		—			—			1,946.5			—			1,946.5
CPA revenues	—			—		176.2			(176.2		)	—			—			—
Freight and mail	53.0			2.0		—			—			55.0			—			55.0
Other-net	218.2			29.1		3.7			—			251.0			—			251.0
Total operating revenues	1,857.3			391.5		179.9			(176.2		)	2,252.5			—			2,252.5
Operating expenses
Operating expenses, excluding fuel	1,051.8			275.8		161.4			(175.3		)	1,313.7			—			1,313.7
Economic fuel(c)	611.1			89.8		—			—			700.9			49.7			750.6
Total operating expenses	1,662.9			365.6		161.4			(175.3		)	2,014.6			49.7			2,064.3
Nonoperating income (expense)
Interest income	9.3			—		—			0.7			10.0			—			10.0
Interest expense	(25.3		)	—		(8.1		)	(0.4		)	(33.8		)	—			(33.8		)
Other	10.4			—		0.8			0.1			11.3			—			11.3
	(5.6		)	—		(7.3		)	0.4			(12.5		)	—			(12.5		)
Income (loss) before income tax	$	188.8		$	25.9	$	11.2		$	(0.5	)	$	225.4		$	(49.7	)	$	175.7

	Six Months Ended June 30, 2011
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	1,433.5		$	—	$	—		$	—		$	1,433.5		$	—		$	1,433.5
Regional	—			340.6		—			—			340.6			—			340.6
Total passenger revenues	1,433.5			340.6		—			—			1,774.1			—			1,774.1
CPA revenues	—			—		188.1			(188.1		)	—			—			—
Freight and mail	51.9			2.0		0.1			—			54.0			—			54.0
Other-net	212.7			30.4		4.2			—			247.3			—			247.3
Total operating revenues	1,698.1			373.0		192.4			(188.1		)	2,075.4			—			2,075.4
Operating expenses
Operating expenses, excluding fuel(b)	996.1			271.0		174.0			(186.2		)	1,254.9			36.9			1,291.8
Economic fuel(c)	523.6			79.5		—			—			603.1			(11.1		)	592.0
Total operating expenses	1,519.7			350.5		174.0			(186.2		)	1,858.0			25.8			1,883.8
Nonoperating income (expense)
Interest income	15.8			—		—			(1.9		)	13.9			—			13.9
Interest expense	(36.0		)	—		(9.1		)	1.7			(43.4		)	—			(43.4		)
Other	4.4			—		1.0			0.2			5.6			—			5.6
	(15.8		)	—		(8.1		)	—			(23.9		)	—			(23.9		)
Income (loss) before income tax	$	162.6		$	22.5	$	10.3		$	(1.9	)	$	193.5		$	(25.8	)	$	167.7

^(a)  The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain charges.

^(b)  Refer to Note 12 for a summary of special charges.

^(c)  Represents adjustments to reflect the timing of gain or loss recognition resulting from mark-to-market fuel-hedge accounting.

Total assets were as follows (in millions):

	June 30, 2012			December 31, 2011
Alaska(a)	$	4,994.9		$	4,803.3
Horizon	864.1			846.5
Parent company	1,589.4			1,583.5
Elimination of inter-company accounts	(2,024.8		)	(2,038.3		)
Consolidated	$	5,423.6		$	5,195.0

^(a)  There are no assets associated with purchased capacity flying at Alaska.