Spirit Airlines, Inc. (NASDAQ:SAVE) today reported fourth quarter
and full year 2015 financial results.
- Adjusted net income for the fourth quarter 2015 increased 24.9
percent to $73.3 million ($1.02 per diluted share) compared to the
fourth quarter 20141. GAAP net income for the fourth quarter
2015 increased 33.1 percent year over year to $74.4 million ($1.04
per diluted share) compared to the fourth quarter 2014.
- Adjusted net income for the full year 2015 increased 33.6
percent to $316.2 million ($4.37 per diluted share) compared to the
full year 20141. GAAP net income for the full year 2015
increased 40.7 percent year over year to $317.2 million ($4.38 per
diluted share).
- Adjusted pre-tax margin for the fourth quarter 2015 increased
270 basis points to 22.4 percent1. For the full year 2015,
adjusted pre-tax margin increased 420 basis points to 23.4
percent1. On a GAAP basis, pre-tax margin for the fourth
quarter 2015 increased 390 basis points to 22.7 percent and for the
full year 2015 increased 520 basis points to 23.5
percent.
- Spirit ended 2015 with unrestricted cash and cash equivalents
of $803.6 million.
- Spirit's return on invested capital (before taxes and excluding
special items) for the twelve months ended December 31, 2015
was 28.2 percent2.
“I want to thank and congratulate our Spirit team members for
successfully delivering solid financial results in 2015.
Although increased industry capacity and aggressive competitive
pricing pressured our unit revenues, our excellent cost execution
and ability to adapt to a changing environment drove improved
year-over-year results,” said Bob Fornaro, Spirit’s Chief Executive
Officer. “I am excited to lead this innovative team. As
CEO, I plan to improve upon the already very strong base of
fundamentals that Spirit possesses with a focus on continuing to
improve operational reliability and customer service, and
maintaining our financial discipline to drive value for all of
Spirit’s stakeholders.”
Revenue Performance For the fourth quarter 2015, Spirit's total
operating revenue was $519.8 million, an increase of 9.6 percent
compared to the fourth quarter 2014, driven by an increase in
flight volume, partially offset by a decrease in operating
yields.
Total revenue per passenger flight segment ("PFS") for the
fourth quarter 2015 decreased 12.6 percent year over year to
$111.78, primarily driven by a 21.4 percent decrease in ticket
revenue per PFS. The decline in ticket revenue per PFS was
driven by lower fare levels as a result of increased competitive
pricing pressures as well as a higher percentage of Spirit's
markets being under development compared to the same period last
year. Non-ticket revenue remained stable, declining only 0.8
percent year over year on a per flight segment basis to $54.26.
Cost PerformanceAdjusted operating expenses for the fourth
quarter 2015 increased 5.6 percent to $401.2 million3. GAAP
total operating expenses increased 3.9 percent year over year to
$399.5 million. Operating expenses benefited from fuel
expense decreasing 23.8 percent, or $32.8 million, on a fuel volume
increase of 27.9 percent.
Spirit reported fourth quarter 2015 cost per available seat mile
("ASM") excluding special items and fuel (“Adjusted CASM ex-fuel”)3
of 5.15 cents, a decrease of 8.2 percent compared to the same
period last year, driven primarily by lower aircraft rent per ASM
and lower labor expense per ASM. The decrease in aircraft
rent per ASM was driven by a change in the mix of leased (rent
recorded under aircraft rent) and purchased (depreciation recorded
under depreciation and amortization) aircraft. Labor expense per
ASM in the fourth quarter 2015 was lower compared to the same
period last year primarily due to scale benefits from overall
growth and from larger gauge aircraft. These decreases were
partially offset by higher depreciation and amortization expense
related to the depreciation of aircraft.
"Spirit’s cost performance in the fourth quarter and throughout
2015 should be a source of pride for all our team members,” said
Ted Christie, Spirit's Chief Financial Officer. “Our ultra-low cost
structure is the foundation of our competitive advantage, providing
us the platform to define our future.”
FleetSpirit took delivery of three new A321ceo aircraft during
the fourth quarter 2015.
Full Year 2015 Highlights
- Maintained its commitment to offer low fares to its valued
customers; ticket revenue per PFS for 2015 averaged $65.25 with
total revenue per PFS averaging $119.49.
- Launched service on 40 new nonstop routes during 2015.
- Added Cleveland, Ohio to its list of destinations and announced
the addition of service from its newest destination,
Seattle-Tacoma, Washington beginning in the Spring of 2016.
- Added 14 (8 A320ceos and 6 A321ceos) new Airbus aircraft to its
fleet, ending the year with 79 aircraft. As of year-end 2015,
Spirit's Fit Fleet™ averaged 5.2 years, the youngest fleet of any
major US airline.
- Issued $576.6 million of enhanced equipment trust certificates,
its first aircraft-backed bond publicly offered.
- Repurchased approximately 1.5 million shares for approximately
$99 million during 2015 under an initial share repurchase program
and authorized another $100 million share repurchase program.
- Created over 600 new jobs, bringing our total number of team
members to nearly 5,000.
Conference Call/Webcast DetailSpirit will conduct a conference
call to discuss these results today, February 9, 2016, at 8:00
a.m. ET. A live audio webcast of the conference call will be
available to the public on a listen-only basis at
http://ir.spirit.com. An archive of the webcast will be
available under Webcasts & Presentations for 60 days.
About Spirit Airlines:Spirit Airlines (NASDAQ:SAVE) is committed
to offering the lowest total price to the places we fly, on average
much lower than other airlines. Our customers start with an
unbundled, stripped-down Bare Fare™ and get Frill Control™ which
allows them to pay only for the options they choose - like bags,
seat assignments and refreshments - the things other airlines bake
right into their ticket prices. We help people save money and
travel more often, create new jobs and stimulate business growth in
the communities we serve. With our Fit Fleet™, the youngest fleet
of any major US airline, we operate more than 385 daily flights to
56 destinations in the U.S., Latin America and the Caribbean. Come
save with us at www.spirit.com.
Investors are encouraged to read the Company's periodic and
current reports filed with or furnished to the Securities and
Exchange Commission, including its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K,
for additional information regarding the Company.
End Notes(1) See "Reconciliation of Adjusted Net Income to
GAAP Net Income" table below for more details.(2) See
"Calculation for Return on Invested Capital" table below for more
details.(3) See "Reconciliation of Adjusted Operating Expense
to GAAP Operating Expense" table below for more details.
Forward-Looking StatementsStatements in this release and certain
oral statements made from time to time by representatives of the
Company contain various forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the Securities Act), and Section 21E of the Securities Exchange
Act of 1934, as amended (the Exchange Act) which are subject to the
“safe harbor” created by those sections. Forward-looking statements
are based on our management’s beliefs and assumptions and on
information currently available to our management. All statements
other than statements of historical facts are “forward-looking
statements” for purposes of these provisions. In some cases, you
can identify forward-looking statements by terms such as “may,”
“will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “project,” “predict,” “potential,” and
similar expressions intended to identify forward-looking
statements. Such forward-looking statements are subject to risks,
uncertainties and other important factors that could cause actual
results and the timing of certain events to differ materially from
future results expressed or implied by such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified
below. Furthermore, such forward-looking statements speak only as
of the date of this report. Except as required by law, we undertake
no obligation to update any forward-looking statements to reflect
events or circumstances after the date of such statements.
Additional risks or uncertainties (i) that are not currently known
to us, (ii) that we currently deem to be immaterial, or (iii) that
could apply to any company, could also materially adversely affect
our business, financial condition, or future results. You should
carefully consider the risks described below and the other
information in this report. If any of the following risks
materialize, our business could be materially harmed, and our
financial condition and results of operations could be materially
and adversely affected. References in this report to “Spirit,”
“we,” “us,” “our,” or the “Company” shall mean Spirit Airlines,
Inc., unless the context indicates otherwise. Additional
information concerning these and other factors is contained in the
Company's Securities and Exchange Commission filings, including but
not limited to the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K.
|
|
| SPIRIT AIRLINES, INC. |
| Statement of Operations |
| (unaudited, in thousands, except per share data) |
|
|
| |
Three Months Ended |
|
|
|
Year Ended |
|
|
| |
December 31, |
|
Percent |
|
December 31, |
|
Percent |
| |
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
| Passenger |
$ |
267,487 |
|
|
$ |
271,569 |
|
|
(1.5 |
) |
|
$ |
1,169,338 |
|
|
$ |
1,144,972 |
|
|
2.1 |
|
| Non-ticket |
252,359 |
|
|
202,918 |
|
|
24.4 |
|
|
972,125 |
|
|
786,608 |
|
|
23.6 |
|
| Total operating revenues |
519,846 |
|
|
474,487 |
|
|
9.6 |
|
|
2,141,463 |
|
|
1,931,580 |
|
|
10.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| Aircraft fuel |
105,215 |
|
|
138,002 |
|
|
(23.8 |
) |
|
461,447 |
|
|
612,909 |
|
|
(24.7 |
) |
| Salaries, wages and benefits |
97,035 |
|
|
81,212 |
|
|
19.5 |
|
|
378,210 |
|
|
313,988 |
|
|
20.5 |
|
| Aircraft rent |
52,091 |
|
|
51,209 |
|
|
1.7 |
|
|
211,531 |
|
|
195,827 |
|
|
8.0 |
|
| Landing fees and other rents |
32,590 |
|
|
27,533 |
|
|
18.4 |
|
|
131,077 |
|
|
105,115 |
|
|
24.7 |
|
| Distribution |
20,656 |
|
|
15,893 |
|
|
30.0 |
|
|
86,576 |
|
|
74,823 |
|
|
15.7 |
|
| Maintenance, materials and
repairs |
18,544 |
|
|
17,515 |
|
|
5.9 |
|
|
80,448 |
|
|
73,956 |
|
|
8.8 |
|
| Depreciation and amortization |
22,278 |
|
|
13,168 |
|
|
69.2 |
|
|
73,908 |
|
|
46,971 |
|
|
57.3 |
|
| Other operating |
50,796 |
|
|
38,630 |
|
|
31.5 |
|
|
206,867 |
|
|
149,675 |
|
|
38.2 |
|
| Loss on disposal of assets |
304 |
|
|
1,350 |
|
|
nm |
|
|
1,604 |
|
|
3,008 |
|
|
nm |
|
| Special charges |
— |
|
|
— |
|
|
nm |
|
|
673 |
|
|
45 |
|
|
nm |
|
| Total operating expenses |
399,509 |
|
|
384,512 |
|
|
3.9 |
|
|
1,632,341 |
|
|
1,576,317 |
|
|
3.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
120,337 |
|
|
89,975 |
|
|
33.7 |
|
|
509,122 |
|
|
355,263 |
|
|
43.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
7,200 |
|
|
1,659 |
|
|
nm |
|
|
20,382 |
|
|
2,747 |
|
|
nm |
|
| Capitalized interest |
(3,161 |
) |
|
(1,659 |
) |
|
nm |
|
|
(11,553 |
) |
|
(2,747 |
) |
|
nm |
|
| Interest income |
(1,581 |
) |
|
(101 |
) |
|
nm |
|
|
(2,125 |
) |
|
(336 |
) |
|
nm |
|
| Other expense |
(267 |
) |
|
1,048 |
|
|
nm |
|
|
15 |
|
|
2,605 |
|
|
nm |
|
| Total other (income)
expense |
2,191 |
|
|
947 |
|
|
nm |
|
|
6,719 |
|
|
2,269 |
|
|
nm |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Income before income taxes |
118,146 |
|
|
89,028 |
|
|
32.7 |
|
|
502,403 |
|
|
352,994 |
|
|
42.3 |
|
| Provision for income taxes |
43,746 |
|
|
33,119 |
|
|
32.1 |
|
|
185,183 |
|
|
127,530 |
|
|
45.2 |
|
| Net income |
$ |
74,400 |
|
|
$ |
55,909 |
|
|
33.1 |
|
|
$ |
317,220 |
|
|
$ |
225,464 |
|
|
40.7 |
|
| Basic earnings per share |
$ |
1.04 |
|
|
$ |
0.77 |
|
|
35.1 |
|
|
$ |
4.39 |
|
|
$ |
3.10 |
|
|
41.6 |
|
| Diluted earnings per share |
$ |
1.04 |
|
|
$ |
0.76 |
|
|
36.8 |
|
|
$ |
4.38 |
|
|
$ |
3.08 |
|
|
42.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares, basic |
71,543 |
|
|
72,776 |
|
|
(1.7 |
) |
|
72,208 |
|
|
72,739 |
|
|
(0.7 |
) |
| Weighted average shares, diluted |
71,672 |
|
|
73,324 |
|
|
(2.3 |
) |
|
72,426 |
|
|
73,294 |
|
|
(1.2 |
) |
| |
| SPIRIT AIRLINES, INC. |
| Statements of Comprehensive Income |
| (unaudited, in thousands) |
| |
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
| |
2015 |
|
2014 |
|
2015 |
|
2014 |
| Net income |
$ |
74,400 |
|
|
$ |
55,909 |
|
|
$ |
317,220 |
|
|
$ |
225,464 |
|
| Unrealized gain (loss)
on interest rate derivative instruments, net of deferred tax
expense (benefit) of $34, ($423), ($500), and $(423), respectively
in each period. |
58 |
|
|
(718 |
) |
|
(828 |
) |
|
(718 |
) |
| Other comprehensive
income (loss) |
$ |
58 |
|
|
$ |
(718 |
) |
|
$ |
(828 |
) |
|
$ |
(718 |
) |
| Comprehensive
income |
$ |
74,458 |
|
|
$ |
55,191 |
|
|
$ |
316,392 |
|
|
$ |
224,746 |
|
| |
| SPIRIT AIRLINES, INC. |
| Balance Sheets |
| (unaudited, in thousands) |
| |
|
|
December 31, |
|
December 31, |
|
|
2015 |
|
2014 |
| Assets |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
$ |
803,632 |
|
|
$ |
632,784 |
|
| Accounts receivable, net |
28,266 |
|
|
22,685 |
|
| Aircraft maintenance deposits |
73,415 |
|
|
29,172 |
|
| Prepaid income taxes |
72,278 |
|
|
— |
|
| Prepaid expenses and other current
assets |
48,749 |
|
|
36,857 |
|
| Total current assets |
1,026,340 |
|
|
721,498 |
|
| |
|
|
|
| Property and equipment: |
|
|
|
| Flight equipment |
827,282 |
|
|
204,462 |
|
| Ground and other equipment |
82,459 |
|
|
57,012 |
|
| Less accumulated depreciation |
(65,524 |
) |
|
(36,099 |
) |
| |
844,217 |
|
|
225,375 |
|
| Deposits on flight equipment purchase
contracts |
286,837 |
|
|
242,881 |
|
| Long-term aircraft maintenance deposits |
206,485 |
|
|
213,147 |
|
| Deferred heavy maintenance, net |
89,127 |
|
|
123,108 |
|
| Other long-term assets |
77,539 |
|
|
66,744 |
|
| Total assets |
$ |
2,530,545 |
|
|
$ |
1,592,753 |
|
| |
|
|
|
| Liabilities and shareholders’
equity |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable |
$ |
17,043 |
|
|
$ |
13,402 |
|
| Air traffic liability |
216,831 |
|
|
188,870 |
|
| Current maturities of long-term
debt |
49,637 |
|
|
10,431 |
|
| Other current liabilities |
182,729 |
|
|
152,921 |
|
| Total current liabilities |
466,240 |
|
|
365,624 |
|
| |
|
|
|
| Long-term debt less current
maturities |
596,693 |
|
|
135,232 |
|
| Long-term deferred income
taxes |
221,481 |
|
|
66,367 |
|
| Deferred gains and other long-term
liabilities |
20,821 |
|
|
22,455 |
|
| Shareholders’ equity: |
|
|
|
| Common stock |
7 |
|
|
7 |
|
| Additional paid-in-capital |
544,277 |
|
|
526,173 |
|
| Treasury stock, at cost |
(116,182 |
) |
|
(3,921 |
) |
| Retained earnings |
798,754 |
|
|
481,534 |
|
| Accumulated other comprehensive
loss |
(1,546 |
) |
|
(718 |
) |
| Total shareholders’ equity |
1,225,310 |
|
|
1,003,075 |
|
| Total liabilities and shareholders’
equity |
$ |
2,530,545 |
|
|
$ |
1,592,753 |
|
| |
Note: The Company adopted ASU 2015-17, Balance Sheet
Classification of Deferred Taxes, utilizing retrospective
application as permitted. As such, certain prior period
amounts have been reclassified to conform to the current
presentation. In the Balance Sheet as of December 31, 2014, the
Company has reclassified $9.6 million from Deferred income taxes in
current assets to Deferred income taxes within non-current
liabilities.
| |
| SPIRIT AIRLINES, INC. |
| Statement of Cash Flows |
| (unaudited, in thousands) |
| |
|
|
Year Ended December 31, |
|
|
2015 |
|
2014 |
| Operating activities: |
|
|
|
| Net income |
$ |
317,220 |
|
|
$ |
225,464 |
|
| Adjustments to reconcile net income to net cash
provided by operations: |
|
|
|
| Unrealized (gains) losses on open
derivative contracts, net |
2,334 |
|
|
— |
|
| Equity-based compensation, net |
9,222 |
|
|
8,797 |
|
| Allowance for doubtful accounts
(recoveries) |
12 |
|
|
(45 |
) |
| Amortization of deferred gains and
losses |
1,165 |
|
|
(185 |
) |
| Depreciation and amortization |
73,908 |
|
|
46,971 |
|
| Deferred income tax expense |
155,614 |
|
|
34,118 |
|
| Loss on disposal of assets |
1,604 |
|
|
3,008 |
|
| Changes in operating assets and
liabilities: |
|
|
|
| Accounts receivable |
(5,592 |
) |
|
606 |
|
| Prepaid maintenance reserves |
(32,101 |
) |
|
(31,925 |
) |
| Long-term deposits and other
assets |
(103,613 |
) |
|
(48,382 |
) |
| Accounts payable |
2,706 |
|
|
(10,034 |
) |
| Air traffic liability |
36,387 |
|
|
21,135 |
|
| Other liabilities |
14,119 |
|
|
13,731 |
|
| Other |
— |
|
|
(2,747 |
) |
| Net cash provided by operating
activities |
472,985 |
|
|
260,512 |
|
| |
|
|
|
| Investing activities: |
|
|
|
| Pre-delivery deposits for flight
equipment, net of refunds |
(142,323 |
) |
|
(115,802 |
) |
| Capitalized interest |
(10,159 |
) |
|
— |
|
| Purchase of property and
equipment |
(548,800 |
) |
|
(186,569 |
) |
| Net cash used in investing
activities |
(701,282 |
) |
|
(302,371 |
) |
| Financing activities: |
|
|
|
| Proceeds from issuance of long-term
debt |
536,780 |
|
|
148,000 |
|
| Proceeds from stock options
exercised |
32 |
|
|
174 |
|
| Payments on debt and capital lease
obligations |
(26,364 |
) |
|
(1,233 |
) |
| Proceeds from sale and leaseback
transactions |
7,300 |
|
|
7,200 |
|
| Payments to pre-IPO shareholders
pursuant to tax receivable agreement |
— |
|
|
(5,643 |
) |
| Excess tax benefits from
equity-based compensation |
8,850 |
|
|
1,871 |
|
| Repurchase of common stock |
(112,261 |
) |
|
(1,630 |
) |
| Debt issuance costs |
(15,192 |
) |
|
(4,727 |
) |
| Net cash provided by financing
activities |
399,145 |
|
|
144,012 |
|
| Net increase in cash and cash equivalents |
170,848 |
|
|
102,153 |
|
| Cash and cash equivalents at beginning of
period |
632,784 |
|
|
530,631 |
|
| Cash and cash equivalents at end of
period |
$ |
803,632 |
|
|
$ |
632,784 |
|
| Supplemental disclosures |
|
|
|
| Cash payments for: |
|
|
|
| Interest (net of capitalized
interest) |
$ |
7,061 |
|
|
$ |
— |
|
| Income taxes paid, net of
refunds |
$ |
95,933 |
|
|
$ |
89,104 |
|
| Non-cash transactions: |
|
|
|
| Capital expenditures funded by
capital lease borrowings |
$ |
— |
|
|
$ |
(173 |
) |
| |
| SPIRIT AIRLINES, INC. |
| Selected Operating Statistics (unaudited) |
| |
|
|
Three Months Ended December 31, |
|
|
| Operating
Statistics |
2015 |
|
2014 |
|
Change |
| Available seat miles
(ASMs) (thousands) |
5,705,398 |
|
|
4,372,511 |
|
|
30.5 |
% |
| Revenue passenger miles
(RPMs) (thousands) |
4,727,996 |
|
|
3,707,271 |
|
|
27.5 |
% |
| Load factor (%) |
82.9 |
|
|
84.8 |
|
|
(1.9 |
) pts |
| Passenger flight
segments (thousands) |
4,651 |
|
|
3,709 |
|
|
25.4 |
% |
| Block hours |
89,016 |
|
|
70,730 |
|
|
25.9 |
% |
| Departures |
33,662 |
|
|
27,167 |
|
|
23.9 |
% |
| Total operating revenue
per ASM (TRASM) (cents) |
9.11 |
|
|
10.85 |
|
|
(16.0 |
)% |
| Average yield
(cents) |
11.00 |
|
|
12.80 |
|
|
(14.1 |
)% |
| Average ticket revenue
per passenger flight segment ($) |
57.52 |
|
|
73.21 |
|
|
(21.4 |
)% |
| Average non-ticket
revenue per passenger flight segment ($) |
54.26 |
|
|
54.70 |
|
|
(0.8 |
)% |
| Total revenue per
passenger flight segment ($) |
111.78 |
|
|
127.91 |
|
|
(12.6 |
)% |
| CASM (cents) |
7.00 |
|
|
8.79 |
|
|
(20.4 |
)% |
| Adjusted CASM (cents)
(1) |
7.03 |
|
|
8.69 |
|
|
(19.1 |
)% |
| Adjusted CASM ex-fuel
(cents) (2) |
5.15 |
|
|
5.61 |
|
|
(8.2 |
)% |
| Fuel gallons consumed
(thousands) |
67,467 |
|
|
52,732 |
|
|
27.9 |
% |
| Average economic fuel
cost per gallon ($) |
1.59 |
|
|
2.56 |
|
|
(37.9 |
)% |
| Aircraft at end of
period |
79 |
|
|
65 |
|
|
21.5 |
% |
| Average daily aircraft
utilization (hours) |
12.5 |
|
|
12.5 |
|
|
— |
|
| Average stage length
(miles) |
1,000 |
|
|
983 |
|
|
1.7 |
% |
| Airports served in the
period (3) |
53 |
|
|
53 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
Year Ended December 31, |
|
|
| Operating
Statistics |
2015 |
|
2014 |
|
Change |
| Available seat miles
(ASMs) (thousands) |
21,246,156 |
|
|
16,340,142 |
|
|
30.0 |
% |
| Revenue passenger miles
(RPMs) (thousands) |
17,995,311 |
|
|
14,159,860 |
|
|
27.1 |
% |
| Load factor (%) |
84.7 |
|
|
86.7 |
|
|
(2.0 |
) pts |
| Passenger flight
segments (thousands) |
17,921 |
|
|
14,294 |
|
|
25.4 |
% |
| Block hours |
337,956 |
|
|
267,305 |
|
|
26.4 |
% |
| Departures |
128,902 |
|
|
102,594 |
|
|
25.6 |
% |
| Total operating revenue
per ASM (TRASM) (cents) |
10.08 |
|
|
11.82 |
|
|
(14.7 |
)% |
| Average yield
(cents) |
11.90 |
|
|
13.64 |
|
|
(12.8 |
)% |
| Average ticket revenue
per passenger flight segment ($) |
65.25 |
|
|
80.11 |
|
|
(18.5 |
)% |
| Average non-ticket
revenue per passenger flight segment ($) |
54.24 |
|
|
55.03 |
|
|
(1.4 |
)% |
| Total revenue per
passenger flight segment ($) |
119.49 |
|
|
135.14 |
|
|
(11.6 |
)% |
| CASM (cents) |
7.68 |
|
|
9.65 |
|
|
(20.4 |
)% |
| Adjusted CASM (cents)
(1) |
7.69 |
|
|
9.55 |
|
|
(19.5 |
)% |
| Adjusted CASM ex-fuel
(cents) (2) |
5.50 |
|
|
5.88 |
|
|
(6.5 |
)% |
| Fuel gallons consumed
(thousands) |
255,008 |
|
|
200,498 |
|
|
27.2 |
% |
| Average economic fuel
cost per gallon ($) |
1.82 |
|
|
2.99 |
|
|
(39.1 |
)% |
| Average daily aircraft
utilization (hours) |
12.7 |
|
|
12.7 |
|
|
— |
|
| Average stage length
(miles) |
987 |
|
|
980 |
|
|
0.7 |
% |
| Airports served in the
period (3) |
57 |
|
|
56 |
|
|
1.8 |
% |
| |
|
|
|
|
|
|
|
|
(1) Excludes special items. (2) Excludes economic fuel expense
and special items. (3) Includes seasonal airports not served at the
end of the period.
The Company is providing a reconciliation of GAAP financial
information to non-GAAP financial information as it believes that
non-GAAP financial measures provide management and investors the
ability to measure the performance of the Company on a consistent
basis. These non-GAAP financial measures have limitations as
an analytical tool. Because of these limitations,
determinations of the Company's operating performance
excluding unrealized gains and losses or special items should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP.
|
|
| Special Items |
|
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| (in thousands) |
2015 |
|
2014 |
|
2015 |
|
2014 |
| Operating special items
include the following (1): |
|
|
|
|
|
|
|
| Prior years' additional federal
excise tax |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,278 |
|
| Unrealized losses (gains) related
to fuel derivative contracts |
(1,988 |
) |
|
3,118 |
|
|
(3,880 |
) |
|
3,881 |
|
| Loss on disposal of assets |
304 |
|
|
1,350 |
|
|
1,604 |
|
|
3,008 |
|
| Special charges |
— |
|
|
— |
|
|
673 |
|
|
45 |
|
| Total operating special items |
$ |
(1,684 |
) |
|
$ |
4,468 |
|
|
$ |
(1,603 |
) |
|
$ |
16,212 |
|
| |
|
|
|
|
|
|
|
| Non-operating special
items include the following (2): |
|
|
|
|
|
|
|
| Settlement paid to Pre-IPO
Stockholders |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,388 |
|
| Total non-operating
special items |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,388 |
|
| |
|
|
|
|
|
|
|
| Total special
items |
$ |
(1,684 |
) |
|
$ |
4,468 |
|
|
$ |
(1,603 |
) |
|
$ |
17,600 |
|
|
|
| Reconciliation of Adjusted Operating Expense to GAAP
Operating Expense |
| (unaudited) |
|
|
| |
|
Three Months Ended |
|
Year Ended |
| |
|
December 31, |
|
December 31, |
| (in thousands, except
CASM data in cents) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| Total operating
expenses, as reported |
|
$ |
399,509 |
|
|
$ |
384,512 |
|
|
$ |
1,632,341 |
|
|
$ |
1,576,317 |
|
| Less operating special
items (1) |
|
(1,684 |
) |
|
4,468 |
|
|
(1,603 |
) |
|
16,212 |
|
| Adjusted operating
expenses, non-GAAP (3) |
|
401,193 |
|
|
380,044 |
|
|
1,633,944 |
|
|
1,560,105 |
|
| Less: Economic fuel
expense |
|
107,203 |
|
|
134,884 |
|
|
465,327 |
|
|
599,750 |
|
| Adjusted operating
expenses excluding fuel, non-GAAP (4) |
|
$ |
293,990 |
|
|
$ |
245,160 |
|
|
$ |
1,168,617 |
|
|
$ |
960,355 |
|
| |
|
|
|
|
|
|
|
|
| Available seat
miles |
|
5,705,398 |
|
|
4,372,511 |
|
|
21,246,156 |
|
|
16,340,142 |
|
| |
|
|
|
|
|
|
|
|
| CASM (cents) |
|
7.00 |
|
|
8.79 |
|
|
7.68 |
|
|
9.65 |
|
| Adjusted CASM (cents)
(3) |
|
7.03 |
|
|
8.69 |
|
|
7.69 |
|
|
9.55 |
|
| Adjusted CASM ex-fuel
(cents) (4) |
|
5.15 |
|
|
5.61 |
|
|
5.50 |
|
|
5.88 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Special items include additional federal excise tax on a
minority of fuel volume for the period beginning July 1, 2009
through December 31, 2013, unrealized gains and losses related to
outstanding fuel derivative contracts, loss on disposal of assets,
and special charges. (2) Non-operating special charges relate to
the settlement paid to the Pre-IPO Stockholders in excess of the
liability the Company had previously estimated related to the
Company's Tax Receivable Agreement. (3) Excludes operating special
items. (4) Excludes operating special items and economic fuel
expense as described in the "Reconciliation of Economic Fuel
Expense to GAAP Fuel Expense" table below.
|
|
| Reconciliation of Adjusted Net Income to GAAP Net
Income |
| (unaudited) |
| |
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| (in thousands, except
per share data) |
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
| Net income, as
reported |
$ |
74,400 |
|
|
$ |
55,909 |
|
|
$ |
317,220 |
|
|
$ |
225,464 |
|
| Add: Provision for
income taxes |
43,746 |
|
|
33,119 |
|
|
185,183 |
|
|
127,530 |
|
| Income before income
taxes, as reported |
118,146 |
|
|
89,028 |
|
|
502,403 |
|
|
352,994 |
|
| Pre-tax margin,
GAAP |
22.7 |
% |
|
18.8 |
% |
|
23.5 |
% |
|
18.3 |
% |
| Add operating special
items (1) |
(1,684 |
) |
|
4,468 |
|
|
(1,603 |
) |
|
16,212 |
|
| Add non-operating
special charges (1) |
— |
|
|
— |
|
|
— |
|
|
1,388 |
|
| Income before income
taxes, non-GAAP (2) |
116,462 |
|
|
93,496 |
|
|
500,800 |
|
|
370,594 |
|
| Adjusted pre-tax
margin, non-GAAP (2) |
22.4 |
% |
|
19.7 |
% |
|
23.4 |
% |
|
19.2 |
% |
| Provision for income
taxes (3) |
43,122 |
|
|
34,781 |
|
|
184,592 |
|
|
133,889 |
|
| Adjusted net
income, non-GAAP (2)(3) |
$ |
73,340 |
|
|
$ |
58,715 |
|
|
$ |
316,208 |
|
|
$ |
236,705 |
|
| |
|
|
|
|
|
|
|
| Weighted average
shares, diluted |
71,672 |
|
|
73,324 |
|
|
72,426 |
|
|
73,294 |
|
| |
|
|
|
|
|
|
|
| Adjusted net
income per share, diluted (2)(3) |
$ |
1.02 |
|
|
$ |
0.80 |
|
|
$ |
4.37 |
|
|
$ |
3.23 |
|
|
|
| Reconciliation of Adjusted Operating Income to GAAP
Operating Income |
| (unaudited) |
|
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| (in thousands) |
2015 |
|
2014 |
|
2015 |
|
2014 |
| Operating
income, as reported |
$ |
120,337 |
|
|
$ |
89,975 |
|
|
$ |
509,122 |
|
|
$ |
355,263 |
|
| Operating margin,
GAAP |
23.1 |
% |
|
19.0 |
% |
|
23.8 |
% |
|
18.4 |
% |
| Add operating special
items (1) |
(1,684 |
) |
|
4,468 |
|
|
(1,603 |
) |
|
16,212 |
|
| Operating
income, non-GAAP (4) |
$ |
118,653 |
|
|
$ |
94,443 |
|
|
$ |
507,519 |
|
|
$ |
371,475 |
|
| Operating margin
(4) |
22.8 |
% |
|
19.9 |
% |
|
23.7 |
% |
|
19.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
(1) See "Special Items" for more details. (2) Excludes operating
and non-operating special items. (3) Assumes same marginal tax rate
as is applicable to GAAP net income. (4) Excludes special
items.
The Company believes economic fuel expense is the best measure
of the effect fuel prices are currently having on our business,
because it most closely approximates the net cash outflow
associated with purchasing fuel used for our operations during the
period. Economic fuel expense is defined as into-plane fuel
expense, realized gains or losses on derivative contracts, plus the
economic premium expense related to fuel option contracts in the
period the option is benefiting. The key difference between
aircraft fuel expense as recorded in our statement of operations
and economic fuel expense is unrealized mark-to-market changes in
the value of aircraft fuel derivatives outstanding and the timing
of premium gain or loss recognition on our outstanding fuel option
contracts. Many industry analysts evaluate airline results
using economic fuel expense, and it is used in our internal
management reporting.
| |
| Reconciliation of Economic Fuel Expense to GAAP Fuel
Expense |
| (unaudited) |
|
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| (in thousands, except
per gallon data) |
2015 |
|
2014 |
|
2015 |
|
2014 |
| Fuel
expense |
|
|
|
|
|
|
|
| Aircraft fuel, as
reported |
$ |
105,215 |
|
|
$ |
138,002 |
|
|
$ |
461,447 |
|
|
$ |
612,909 |
|
| Less: |
|
|
|
|
|
|
|
| Prior years' additional federal
excise tax |
— |
|
|
— |
|
|
— |
|
|
9,278 |
|
| Unrealized losses (gains) related
to fuel derivative contracts |
(1,988 |
) |
|
3,118 |
|
|
(3,880 |
) |
|
3,881 |
|
| Economic fuel
expense, non-GAAP |
$ |
107,203 |
|
|
$ |
134,884 |
|
|
$ |
465,327 |
|
|
$ |
599,750 |
|
| |
|
|
|
|
|
|
|
| Fuel gallons
consumed |
67,467 |
|
|
52,732 |
|
|
255,008 |
|
|
200,498 |
|
| |
|
|
|
|
|
|
|
| Economic fuel
cost per gallon, non-GAAP |
$ |
1.59 |
|
|
$ |
2.56 |
|
|
$ |
1.82 |
|
|
$ |
2.99 |
|
| |
| Calculation of Return on Invested Capital |
| (unaudited) |
| |
| |
Twelve Months Ended |
| (in thousands) |
December 31, 2015 |
| Operating income |
$ |
509,122 |
|
| Add operating special
items (1) |
(1,603 |
) |
| Adjustment for aircraft
rent |
211,531 |
|
| Adjusted
operating income (2) |
719,050 |
|
| Tax (36.9%) (3) |
265,035 |
|
| Adjusted
operating income, after-tax |
454,015 |
|
| Invested capital |
|
| Total debt |
$ |
646,330 |
|
| Book equity |
1,225,310 |
|
| Less: Unrestricted
cash |
803,632 |
|
| Add: Capitalized
aircraft operating leases (7x Aircraft Rent) |
1,480,717 |
|
| Total invested
capital |
2,548,725 |
|
| |
|
| Return on invested
capital (ROIC), pre-tax (2) |
28.2 |
% |
| Return on invested
capital (ROIC), after-tax (2)(3) |
17.8 |
% |
| |
|
|
(1) See "Special Items" for more details. (2) Excludes special
items. (3) Assumes same marginal tax rate as is applicable to GAAP
net income for the twelve months ended December 31, 2015.
Investor Relations Contact:
DeAnne Gabel
InvestorRelations@Spirit.com
(954) 447-7920
Media Contact:
Paul Berry
Paul.Berry@Spirit.com
(954) 628-4827
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