I NVESTMENT F UND U PDATE 4/21/2014 Trade Activity  3/28/2014: Bought GMCR (4 shares) and NKE (6 shares)  4/15/2014: Sold GMCR (4 shares) Current Fund Value  $1,  Available cash: $ Sources: 1

2 Alaska Air Group (NYSE: ALK) 21 April 2014 Saad Hirani | Jeremy Mack | Henry Zhang

A GENDA  Industry Analysis  Company Analysis  Company Fundamentals  Chart Analysis  Competitors  Competitive Analysis  Entry Strategy 3

I NDUSTRY A NALYSIS – A IRLINE I NDUSTRY 4 Overview Of Airline Industry in USA  100 certified passenger airlines operating over 11 million flight departures per year  Accounts for about 1/3 rd of global air traffic  million scheduled passengers traveled on USA airlines in  Commercial aviation contributes more than 8% of USA’s GDP.  The number of passengers will grow to 1.2 billion in 2032, according to the FAA's annual forecast.  Carriers expected to make a profit of $6.3 billion in 2014  US Airline Industry to remain profitable for two more decades  Oil price volatility remains a significant challenge outlook-dec-2013-industry-outlook- cm310424#ixzz2vEkdMZEL Industry Outlook Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years.

C OMPANY A NALYSIS – A LASKA A IR G ROUP I NC. 5 Company Overview  Airline company serving 95 cities through expansive network in Alaska, Canada, Mexico, Lower 48.  7 th largest US airline in passenger traffic  Fleet Size: 134 Value Proposition  Ranked highest for consumer satisfaction in North American airlines for 6 years in a row.  High number of partnerships with other airlines. (offers largest number of alternative airlines on mileage programs) Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years.

C OMPANY F UNDAMENTALS 6 Essential Statistics  EPS: 7.18  P/E:  Beta: 0.98  Market Cap: 6.40B  ROIC: 13% (2012) Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years.

ALK S TOCK P ERFORMANCE 7  Steady rising price for the last year, as well as since early  Accelerating price increases over the past year  Jump in stock price in July 2013 due to positive earnings surprise of 16% over Wall Street consensus  Has met or beat Wall Street expectations for last 8 quarters. Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary

C OMPETITORS Source: Google FInance 8 Main Competitors Alaska Air remains one of the most efficient, profitable, and innovative airlines.. EPS growth  Delta, Southwest, and American Airlines are the Alaska’s main competitors  Alaska Air has a higher profit margin than Southwest, JetBlue, and American Airlines  P/E and Beta lower than industry average  Lower income than Southwest and JetBlue due to Alaska’s determination to pay off debt and a large increase of new aircraft Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary

W HY A LASKA IS S UCCESSFUL ? 9 What drives Alaska’s success Promotion Distribution Personal Anecdotes Positioning & Product Corporate Image Pricing & Marketing Information System Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary Strong Marketing, developing a positive reputation with consumers and a safe distribution of flights across different companies such as Delta & AA has allowed Alaska to enjoy great success. What drives Alaska’s success Pricing & Marketing Information System

C OMPETITIVE A NALYSIS Source: Bloomberg, Wikipedia 10 Competitive Analysis Coming into its most profitable months, and having already invested a lot of cash back into the company, this is a perfect time to invest. Net-Zero Debt  Alaska Air has strong allies within the industry that supply around 10% of their profit, most notably with Delta  Efficient  As a response to Delta’s increasing presence in Seattle, Alaska has increased ties with American Airlines  Leverage  Capital expenditure on newer aircraft that are larger more fuel efficient ( ER)  9 purchased in 2013  After this Friday, April 25 th, Alaska Air will enter into its 2 most historically profitable quarters  The airline industry as a whole is at its peak during the summer months  Alaska’s fulfillment of a “Net-Zero Debt” reality.  As of the end of 2013, the company's previously unfunded pension plan is now fully funded.  Alaska has modified its retirement plans over the years while increasing contributions ($40 million less pension expense in 2014) Catalysts Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary With zero net debt & partnerships where Alaska gains from it’s competition’s business have established Alaska as a leader in the US airlines industry.

S UMMARY & R ECOMMENDATIONS 11 With Alaska expected to meet earnings, there will be great positive sentiment in the market and Alaska’s share price could realize significant gains. Entry Strategy Invest tonight Earnings on April 25 th 2014 Hold for summer 2014 Take advantage of stock growth during summer travel season. Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary