Investment Fund Update 4/21/2014

1. Investment Fund Update 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, 397.46 • Available cash: $954.06 Sources:

2. Alaska Air Group (NYSE: ALK) • 21 April 2014 • SaadHirani | Jeremy Mack | Henry Zhang

3. Agenda • Industry Analysis • Company Analysis • Company Fundamentals • Chart Analysis • Competitors • Competitive Analysis • Entry Strategy

4. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary Industry Analysis – Airline Industry Industry Outlook Overview Of Airline Industry in USA • 100 certified passenger airlines operating over 11 million flight departures per year • Accounts for about 1/3rd of global air traffic • 815.3 million scheduled passengers traveled on USA airlines in 2012. • 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 • http://www.nasdaq.com/article/airline-industry-stock-outlook-dec-2013-industry-outlook-cm310424#ixzz2vEkdMZEL With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years.

5. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary Company Analysis – Alaska Air Group Inc. Value Proposition Company Overview • Airline company serving 95 cities through expansive network in Alaska, Canada, Mexico, Lower 48. • 7th largest US airline in passenger traffic • Fleet Size: 134 • 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) With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years. http://centreforaviation.com/images/stories/2014/Mar/28/revenue.pnghttp://en.wikipedia.org/wiki/Alaska_Airlines

6. Industry Analysis | Company Analysis | Company Fundamentals | Stock Performance | Competitors | Summary Company Fundamentals Essential Statistics • EPS: 7.18 • P/E: 12.95 • Beta: 0.98 • Market Cap: 6.40B • ROIC: 13% (2012) With a Zack’s industry rank of #16 and expected profit growths, and airline industry appears to be profitable for the next few years.

7. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary ALK Stock Performance • Steady rising price for the last year, as well as since early 2008. • 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.

8. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary Competitors Main Competitors 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 Alaska Air remains one of the most efficient, profitable,and innovative airlines.. Source: Google FInance

9. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary Why Alaska is Successful? Corporate Image Promotion Personal Anecdotes What drives Alaska’s success What drives Alaska’s success Distribution Positioning & Product Pricing & Marketing Information System Pricing & Marketing Information System • 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.

10. Industry Analysis | Company Analysis | Company Fundamentals| Stock Performance | Competitors | Summary Competitive Analysis Competitive Analysis 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 (737-900ER) • 9 purchased in 2013 • After this Friday, April 25th, 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 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. 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. Source: Bloomberg, Wikipedia

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