Alaska Air Group, Inc. announced unaudited consolidated earnings and operating results for the fourth quarter and full year ended December 31, 2017. The company reported fourth quarter 2017 GAAP net income of $367 million, or $2.97 per diluted share, compared to $114 million, or $0.92 per diluted share in 2016. Excluding the impact of merger-related costs, the special income tax benefit, and mark-to-market fuel hedge adjustments, the company reported fourth quarter adjusted net income of $103 million, or $0.83 per diluted share, compared to adjusted net income of $193 million, or $1.56 per diluted share in the fourth quarter of 2016. Total operating revenues were $1,962 million against $1,524 million a year ago. Operating income was $162 million against $241 million a year ago. Income before income tax was $149 million against $231 million a year ago. Adjusted income before tax was $165 million against $345 million a year ago.

The company reported full-year 2017 GAAP net income of $1,028 million, compared to $814 million in the prior year. Excluding the impact of merger-related costs, the special income tax benefit, and mark-to-market fuel hedge adjustments, the company reported adjusted net income of $823 million, or $6.64 per diluted share for 2017, compared to adjusted net income of $911 million, or $7.32 per diluted share in 2016. Total operating revenues were $7,933 million against $5,931 million a year ago. Operating income was $1,260 million against $1,349 million a year ago. Income before income tax was $1,207 million against $1,345 million a year ago. Adjusted income before tax was $1,318 million against $1,671 million a year ago. Generated approximately $1.6 billion of operating cash flow and used approximately $1.0 billion for capital expenditures, resulting in approximately $550 million of free cash flow in 2017.

For the quarter, the company reported revenue passengers of 10,971,000 against 8,752,000 a year ago. RPMs were 13,265,000,000 against 9,640,000,000 a year ago. ASMs were 15,901,000,000 against 11,407,000,000 a year ago. Load factor was 83.4% against 84.5% a year ago.

For the full year, the company reported revenue passengers of 44,034,000 against 34,289,000 a year ago. RPMs were 52,338,000,000 against 37,209,000,000 a year ago. ASMs were 62,072,000,000 against 44,135,000,000 a year ago. Load factor was 84.3% against 84.3% a year ago.

The company provided financial guidance for 2018. The company reports targeted capital expenditures of $1,000 million. 2017 Capacity growth rate is on a Combined Comparative basis. The company expects the 2018 effective tax rate to be approximately 24.5%. The company expects full year 2018 capacity to increase by approximately 7.5%. As a result of the standard, the company expects to restate 2017 and 2016 financial information in future filings beginning in the first quarter 2018. The company expects 2017 reported revenues will be reduced by approximately $43 million and reported non-fuel operating costs will increase by approximately $11 million, resulting in a net reduction of $54 million to reported adjusted pretax profit. The company expects a similar impact in 2018.

The company expects that its consolidated non-operating expense will be approximately $14 million in the first quarter of 2018. The company expects first quarter 2018 capacity to increase by approximately 8% and Revenue per Available Seat Mile (RASM) to decline approximately 3.5% to 4.5%.