OPERATING SEGMENT INFORMATION

9 Months Ended

Sep. 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.

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 September 30, 2012
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	904.6		$	—	$	—		$	—		$	904.6		$	—		$	904.6
Regional	—			198.1		—			—			198.1			—			198.1
Total passenger revenues	904.6			198.1		—			—			1,102.7			—			1,102.7
CPA revenues	—			—		96.1			(96.1		)	—			—			—
Freight and mail	28.4			1.1		0.1			—			29.6			—			29.6
Other-net	121.5			16.7		1.7			—			139.9			—			139.9
Total operating revenues	1,054.5			215.9		97.9			(96.1		)	1,272.2			—			1,272.2
Operating expenses
Operating expenses, excluding fuel	531.7			144.9		86.2			(96.7		)	666.1			—			666.1
Economic fuel(c)	312.0			45.8		—			—			357.8			(21.2		)	336.6
Total operating expenses	843.7			190.7		86.2			(96.7		)	1,023.9			(21.2		)	1,002.7
Nonoperating income (expense)
Interest income	4.7			—		—			(0.2		)	4.5			—			4.5
Interest expense	(11.3		)	—		(4.0		)	0.2			(15.1		)	—			(15.1		)
Other	6.5			—		0.3			(0.1		)	6.7			—			6.7
	(0.1		)	—		(3.7		)	(0.1		)	(3.9		)	—			(3.9		)
Income before income tax	$	210.7		$	25.2	$	8.0		$	0.5		$	244.4		$	21.2		$	265.6

	Three Months Ended September 30, 2011
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	835.6		$	—	$	—		$	—		$	835.6		$	—		$	835.6
Regional	—			196.1		—			—			196.1			—			196.1
Total passenger revenues	835.6			196.1		—			—			1,031.7			—			1,031.7
CPA revenues	—			—		91.2			(91.2		)	—			—			—
Freight and mail	28.8			1.1		—			—			29.9			—			29.9
Other-net	117.0			17.5		2.0			—			136.5			—			136.5
Total operating revenues	981.4			214.7		93.2			(91.2		)	1,198.1			—			1,198.1
Operating expenses
Operating expenses, excluding fuel(b)	504.1			136.5		82.9			(90.7		)	632.8			2.0			634.8
Economic fuel(c)	292.4			43.4		—			—			335.8			84.3			420.1
Total operating expenses	796.5			179.9		82.9			(90.7		)	968.6			86.3			1,054.9
Nonoperating income (expense)
Interest income	4.6			—		—			(0.1		)	4.5			—			4.5
Interest expense	(21.8		)	—		(4.0		)	0.1			(25.7		)	—			(25.7		)
Other	3.4			—		0.1			(0.2		)	3.3			—			3.3
	(13.8		)	—		(3.9		)	(0.2		)	(17.9		)	—			(17.9		)
Income (loss) before income tax	$	171.1		$	34.8	$	6.4		$	(0.7	)	$	211.6		$	(86.3	)	$	125.3

	Nine Months Ended September 30, 2012
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	2,490.7		$	—	$	—		$	—		$	2,490.7		$	—		$	2,490.7
Regional	—			558.5		—			—			558.5			—			558.5
Total passenger revenues	2,490.7			558.5		—			—			3,049.2			—			3,049.2
CPA revenues	—			—		272.3			(272.3		)	—			—			—
Freight and mail	81.4			3.1		0.1			—			84.6			—			84.6
Other-net	339.7			45.8		5.4			—			390.9			—			390.9
Total operating revenues	2,911.8			607.4		277.8			(272.3		)	3,524.7			—			3,524.7
Operating expenses
Operating expenses, excluding fuel	1,583.5			420.7		247.6			(272.0		)	1,979.8			—			1,979.8
Economic fuel(c)	923.1			135.6		—			—			1,058.7			28.5			1,087.2
Total operating expenses	2,506.6			556.3		247.6			(272.0		)	3,038.5			28.5			3,067.0
Nonoperating income (expense)
Interest income	14.0			—		—			0.5			14.5			—			14.5
Interest expense	(36.6		)	—		(12.1		)	(0.2		)	(48.9		)	—			(48.9		)
Other	16.9			—		1.1			—			18.0			—			18.0
	(5.7		)	—		(11.0		)	0.3			(16.4		)	—			(16.4		)
Income (loss) before income tax	$	399.5		$	51.1	$	19.2		$	—		$	469.8		$	(28.5	)	$	441.3

	Nine Months Ended September 30, 2011
	Alaska
	Mainline			Regional		Horizon			Consolidating			Air Group Adjusted(a)			Special Items			Consolidated
Operating revenues
Passenger
Mainline	$	2,269.1		$	—	$	—		$	—		$	2,269.1		$	—		$	2,269.1
Regional	—			536.7		—			—			536.7			—			536.7
Total passenger revenues	2,269.1			536.7		—			—			2,805.8			—			2,805.8
CPA revenues	—			—		279.3			(279.3		)	—			—			—
Freight and mail	80.7			3.0		0.2			—			83.9			—			83.9
Other-net	329.7			48.0		6.1			—			383.8			—			383.8
Total operating revenues	2,679.5			587.7		285.6			(279.3		)	3,273.5			—			3,273.5
Operating expenses
Operating expenses, excluding fuel(b)	1,500.2			408.0		256.9			(277.4		)	1,887.7			38.9			1,926.6
Economic fuel(c)	816.0			122.9		—			—			938.9			73.2			1,012.1
Total operating expenses	2,316.2			530.9		256.9			(277.4		)	2,826.6			112.1			2,938.7
Nonoperating income (expense)
Interest income	20.4			—		—			(2.0		)	18.4			—			18.4
Interest expense	(57.8		)	—		(13.1		)	1.8			(69.1		)	—			(69.1		)
Other	8.0			—		1.0			(0.1		)	8.9			—			8.9
	(29.4		)	—		(12.1		)	(0.3		)	(41.8		)	—			(41.8		)
Income (loss) before income tax	$	333.9		$	56.8	$	16.6		$	(2.2	)	$	405.1		$	(112.1	)	$	293.0

^(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):

	September 30, 2012			December 31, 2011
Alaska(a)	$	5,082.0		$	4,803.3
Horizon	850.8			846.5
Parent company	1,770.2			1,583.5
Elimination of inter-company accounts	(2,266.9		)	(2,038.3		)
Consolidated	$	5,436.1		$	5,195.0

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