Delaware | 1-31443 | 71-0879698 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
Dated: January 29, 2019 | |||
HAWAIIAN HOLDINGS, INC. | |||
By: | /s/ Shannon L. Okinaka | ||
Name: | Shannon L. Okinaka | ||
Title: | Executive Vice President, Chief Financial Officer and Treasurer |
FOR IMMEDIATE RELEASE Tuesday, January 29, 2019 | INVESTOR RELATIONS CONTACT: Daniel Wong, Sr. Director - (808) 835-3700 Investor.Relations@HawaiianAir.com MEDIA RELATIONS CONTACT: Alex Da Silva (808) 835-3712 News@HawaiianAir.com |
Fourth Quarter 2018 - Key Financial Metrics | ||||||||
GAAP | YoY Change | Adjusted | YoY Change | |||||
Net Income | $31.6M | $(116.8)M | $49.2M | $(5.7)M | ||||
Diluted EPS | $0.64 | (2.20) | $1.00 | $(0.05) | ||||
Pre-tax Margin | 6.0% | (9.5) pts. | 9.3% | (3.8) pts. |
Full Year 2018 - Key Financial Metrics | ||||||||
GAAP | YoY Change | Adjusted | YoY Change | |||||
Net Income | $233.2M | $(97.4)M | $274.8M | $(14.1)M | ||||
Diluted EPS | $4.62 | $(1.57) | $5.44 | +$0.03 | ||||
Pre-tax Margin | 10.6% | (4.0) pts. | 12.6% | (4.4) pts. |
• | Unrestricted cash, cash equivalents and short-term investments of $501 million. |
• | Outstanding debt and capital lease obligations of $710 million. |
• | Carried a record 11.8 million passengers in 2018, a 2.9 percent increase over the previous year. |
• | Announced it will open a technology center in Phoenix, Arizona, in the first quarter of 2019 to strengthen its IT capabilities. |
• | North America |
◦ | Expanded its routes to the Pacific Northwest with the launch of new daily non-stop service between Portland International Airport (PDX) and Maui's Kahului Airport (OGG). |
◦ | Expanded its routes to Southern California with the launch of new daily non-stop flights between Long Beach Airport (LGB) and Honolulu's Daniel K. Inouye International Airport (HNL), and new daily non-stop flights between San Diego International Airport (SAN) and Maui (OGG). |
◦ | Extended seasonal non-stop service to year-round non-stop service between Los Angeles International Airport (LAX) and Ellison Onizuka Kona International Airport (KOA). |
◦ | Announced expanded service to Northern California with new daily non-stop flights between Sacramento International Airport (SMF) and Maui (OGG) beginning April 2019. |
◦ | Announced its second East Coast route with new five-times-a-week non-stop service between Boston's Logan International Airport (BOS) and Honolulu (HNL) beginning April 2019. |
• | International |
◦ | Expanded seasonal winter service to international destinations, including: |
• | increasing non-stop service between Seoul's Incheon International Airport (ICN) and Honolulu (HNL) to daily flights between mid-January and early-February 2019; and |
• | increasing non-stop service between Sapporo's New Chitose Airport (CTS) and Honolulu (HNL) with five weekly flights during the first half of February 2019. |
• | Expanded its cargo services with the launch of All-Cargo Neighbor Island service between Honolulu (HNL), Lihu'e Airport (LIH) and Hilo International Airport (ITO). The All-Cargo Neighbor Island service, which currently consists of two ATR-72 aircraft, is expected to expand in 2019 with the addition of flights between Honolulu (HNL) and both Maui (OGG) and Kona (KOA). |
• | Announced the expansion of its Business Class auction upgrade service, Bid Up by Hawaiian Airlines, to include flights operating between Hawai'i and Japan and South Korea, in addition to flights operating between Hawai'i and North America. |
• | Extended its partnership with Barclaycard US, Hawaiian's co-branded credit card partner, under a new agreement through 2024 that includes improved economics for Hawaiian and a refreshed rewards structure for the Hawaiian Airlines World Elite Mastercard and the Hawaiian Airlines Business Mastercard to enable cardmembers to earn more miles faster. |
• | Together with Japan Airlines, filed an application with the U.S. Department of Transportation (DOT) and Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) seeking antitrust immunity to create a joint venture that promises significant consumer benefits and the opportunity for service expansion. |
• | Enhanced its comprehensive partnership with Japan Airlines with the implementation of reciprocal frequent flyer benefits for HawaiianMiles and JAL Mileage Bank members effective October 2018. The enhanced program is the second phase of the comprehensive partnership launched in March 2018 with codeshare flights. |
• | Announced an expansion of the codeshare agreement with JetBlue that allows travelers from dozens of cities, most of them in the eastern U.S., to easily connect to the Hawaiian Islands via Boston's Logan International Airport (BOS) starting in April 2019. |
• | Secured its flagship widebody aircraft of the next decade with the signing of a definitive purchase agreement with Boeing for the purchase of 10 Boeing 787-9 aircraft, including purchase rights for an additional 10 aircraft, to be delivered starting in 2021. |
• | Signed a definitive agreement with General Electric for the purchase of GEnx engines to power its Boeing 787-9 fleet. |
• | Took delivery of nine Airbus A321neo aircraft, increasing the size of its Airbus A321neo fleet to eleven aircraft. |
• | Entered into two Japanese Yen-denominated debt financings, each collateralized by an Airbus A321neo aircraft. |
• | Took delivery of an ATR-42 turboprop aircraft in June, increasing the size of its 'Ohana by Hawaiian passenger turboprop fleet to four aircraft. |
• | Increased the size of its secured revolving credit facility from $225 million to $235 million and extended the term through December 2022. |
• | Contributed $50 million during the year to its pilots' pension plan. The plan's funded status improved from 69.6 percent funded at the end of 2017 to 77.4 percent at the end of 2018. |
• | Celebrated the beginning of its 90th year of service in the Hawaiian Islands with a company-matched employee giving campaign that generated $187,000 in donations to non-profit agencies across the State of Hawai'i. The 90th year fundraiser is in addition to sponsorships and grants the Company provides annually through its Team Kokua program and Hawaiian Airlines Foundation. |
Item | First Quarter 2019 Guidance | GAAP Equivalent | GAAP First Quarter 2019 Guidance | |||
ASMs | Up 1.5 - 3.0% | |||||
Operating revenue per ASM | Down 3.0 - 6.0% | |||||
Cost per ASM excluding fuel (a) | Up 1.0 - 4.0% | Cost per ASM (a) | Down 3.8 - 7.1% | |||
Gallons of jet fuel consumed | Down 0.5 - 2.5% | |||||
Economic fuel cost per gallon (b)(c) | $1.95 - $2.05 | Fuel cost per gallon (b) | $1.91 - $2.01 |
Item | Full Year 2019 Guidance | GAAP Equivalent | GAAP Full Year 2019 Guidance | |||
ASMs | Up 1.5 - 4.5% | |||||
Cost per ASM excluding fuel (a) | Flat - Up 3.0% | Cost per ASM (a) | Down 1.7 - 5.0% | |||
Gallons of jet fuel consumed | Down 2.0% - Up 1.0% | |||||
Economic fuel cost per gallon (b)(c) | $1.95 - $2.05 | Fuel cost per gallon (b) | $1.92 - $2.03 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||
2018 | 2017 (a) | % Change | 2018 | 2017 (a) | % Change | |||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||
Operating Revenue: | ||||||||||||||||||||||
Passenger | $ | 638,799 | $ | 630,426 | 1.3 | % | $ | 2,602,793 | $ | 2,486,827 | 4.7 | % | ||||||||||
Other | 58,666 | 52,178 | 12.4 | % | 234,618 | 188,318 | 24.6 | % | ||||||||||||||
Total | 697,465 | 682,604 | 2.2 | % | 2,837,411 | 2,675,145 | 6.1 | % | ||||||||||||||
Operating Expenses: | ||||||||||||||||||||||
Wages and benefits | 167,813 | 166,225 | 1.0 | % | 684,719 | 632,997 | 8.2 | % | ||||||||||||||
Aircraft fuel, including taxes and delivery | 150,140 | 123,960 | 21.1 | % | 599,544 | 440,383 | 36.1 | % | ||||||||||||||
Aircraft rent | 32,428 | 34,881 | (7.0 | )% | 125,961 | 137,764 | (8.6 | )% | ||||||||||||||
Maintenance materials and repairs | 63,530 | 58,187 | 9.2 | % | 239,759 | 219,553 | 9.2 | % | ||||||||||||||
Aircraft and passenger servicing | 40,589 | 37,394 | 8.5 | % | 157,796 | 144,853 | 8.9 | % | ||||||||||||||
Commissions and other selling | 32,833 | 31,783 | 3.3 | % | 129,315 | 126,750 | 2.0 | % | ||||||||||||||
Depreciation and amortization | 38,329 | 29,490 | 30.0 | % | 139,866 | 113,277 | 23.5 | % | ||||||||||||||
Other rentals and landing fees | 31,677 | 30,000 | 5.6 | % | 126,903 | 116,763 | 8.7 | % | ||||||||||||||
Purchased services | 36,547 | 31,359 | 16.5 | % | 131,651 | 110,787 | 18.8 | % | ||||||||||||||
Contract terminations expense | — | — | — | % | 35,322 | — | NM | |||||||||||||||
Special items | — | — | — | % | — | 23,450 | NM | |||||||||||||||
Other | 34,230 | 43,159 | (20.7 | )% | 152,207 | 144,530 | 5.3 | % | ||||||||||||||
Total | 628,116 | 586,438 | 7.1 | % | 2,523,043 | 2,211,107 | 14.1 | % | ||||||||||||||
Operating Income | 69,349 | 96,166 | (27.9 | )% | 314,368 | 464,038 | (32.3 | )% | ||||||||||||||
Nonoperating Income (Expense): | ||||||||||||||||||||||
Interest expense and amortization of debt discounts and issuance costs | (8,373 | ) | (7,609 | ) | (33,001 | ) | (30,901 | ) | ||||||||||||||
Interest income | 2,713 | 1,652 | 9,242 | 6,132 | ||||||||||||||||||
Capitalized interest | 1,473 | 2,179 | 7,887 | 8,437 | ||||||||||||||||||
Gains (losses) on fuel derivatives | (21,474 | ) | 13,540 | 5,590 | 3,312 | |||||||||||||||||
Other components of net periodic benefit cost | (282 | ) | (3,420 | ) | (825 | ) | (16,713 | ) | ||||||||||||||
Other nonoperating special items | — | 4,617 | — | (45,585 | ) | |||||||||||||||||
Other, net | (1,887 | ) | (1,060 | ) | (2,103 | ) | 2,101 | |||||||||||||||
Total | (27,830 | ) | 9,899 | (13,210 | ) | (73,217 | ) | |||||||||||||||
Income Before Income Taxes | 41,519 | 106,065 | 301,158 | 390,821 | ||||||||||||||||||
Income tax expense (benefit) | 9,883 | (42,383 | ) | 67,958 | 60,211 | |||||||||||||||||
Net Income | $ | 31,636 | $ | 148,448 | $ | 233,200 | $ | 330,610 | ||||||||||||||
Net Income Per Common Stock Share: | ||||||||||||||||||||||
Basic | $ | 0.65 | $ | 2.86 | $ | 4.63 | $ | 6.23 | ||||||||||||||
Diluted | $ | 0.64 | $ | 2.84 | $ | 4.62 | $ | 6.19 | ||||||||||||||
Weighted Average Number of Common Stock Shares Outstanding: | ||||||||||||||||||||||
Basic | 48,946 | 51,939 | 50,338 | 53,074 | ||||||||||||||||||
Diluted | 49,163 | 52,263 | 50,488 | 53,413 | ||||||||||||||||||
Cash Dividends Declared Per Common Share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.12 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||
2018 | 2017 (a) | % Change | 2018 | 2017 (a) | % Change | |||||||||||||||||
(in thousands, except as otherwise indicated) | ||||||||||||||||||||||
Scheduled Operations (b) : | ||||||||||||||||||||||
Revenue passengers flown | 2,887 | 2,910 | (0.8 | )% | 11,830 | 11,498 | 2.9 | % | ||||||||||||||
Revenue passenger miles (RPM) | 4,280,809 | 4,120,002 | 3.9 | % | 17,198,985 | 16,307,344 | 5.5 | % | ||||||||||||||
Available seat miles (ASM) | 5,059,708 | 4,788,457 | 5.7 | % | 20,158,139 | 18,991,566 | 6.1 | % | ||||||||||||||
Passenger revenue per RPM (Yield) | 14.92 | ¢ | 15.30 | ¢ | (2.5 | )% | 15.13 | ¢ | 15.25 | ¢ | (0.8 | )% | ||||||||||
Passenger load factor (RPM/ASM) | 84.6 | % | 86.0 | % | (1.4 | ) pt. | 85.3 | % | 85.9 | % | (0.6 | ) pt. | ||||||||||
Passenger revenue per ASM (PRASM) | 12.63 | ¢ | 13.17 | ¢ | (4.1 | )% | 12.91 | ¢ | 13.09 | ¢ | (1.4 | )% | ||||||||||
Total Operations (b) : | ||||||||||||||||||||||
Revenue passengers flown | 2,891 | 2,914 | (0.8 | )% | 11,840 | 11,505 | 2.9 | % | ||||||||||||||
RPM | 4,285,036 | 4,125,894 | 3.9 | % | 17,206,703 | 16,316,739 | 5.5 | % | ||||||||||||||
ASM | 5,067,412 | 4,798,039 | 5.6 | % | 20,171,911 | 19,006,682 | 6.1 | % | ||||||||||||||
Passenger load factor (RPM/ASM) | 84.6 | % | 86.0 | % | (1.4 | ) pt. | 85.3 | % | 85.8 | % | (0.5 | ) pt. | ||||||||||
Operating revenue per ASM (RASM) | 13.76 | ¢ | 14.23 | ¢ | (3.3 | )% | 14.07 | ¢ | 14.07 | ¢ | — | % | ||||||||||
Operating cost per ASM (CASM) | 12.40 | ¢ | 12.22 | ¢ | 1.5 | pt. | 12.51 | ¢ | 11.63 | ¢ | 7.6 | % | ||||||||||
CASM excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items (c) | 9.46 | ¢ | 9.64 | ¢ | (1.9 | )% | 9.36 | ¢ | 9.19 | ¢ | 1.8 | % | ||||||||||
Aircraft fuel expense per ASM (d) | 2.97 | ¢ | 2.58 | ¢ | 15.1 | % | 2.97 | ¢ | 2.32 | ¢ | 28.0 | % | ||||||||||
Revenue block hours operated | 53,440 | 47,926 | 11.5 | % | 208,809 | 189,881 | 10.0 | % | ||||||||||||||
Gallons of jet fuel consumed | 67,751 | 66,511 | 1.9 | % | 273,783 | 259,915 | 5.3 | % | ||||||||||||||
Average cost per gallon of jet fuel (actual) (d) | $ | 2.22 | $ | 1.86 | 19.4 | % | $ | 2.19 | $ | 1.69 | 29.6 | % | ||||||||||
Economic fuel cost per gallon (d)(e) | $ | 2.20 | $ | 1.84 | 19.6 | % | $ | 2.10 | $ | 1.70 | 23.5 | % |
(a) | Amounts adjusted for the adoption of Accounting Standards Codification (ASC) No. 606, Revenue from Contracts with Customers. |
(b) | Includes the operations of the Company's contract carrier under a capacity purchase agreement. |
(c) | See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items. |
(d) | Includes applicable taxes and fees. |
(e) | See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs. |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||
(in thousands, except per-gallon amounts) | ||||||||||||||||||||||
Aircraft fuel expense, including taxes and delivery | $ | 150,140 | $ | 123,960 | 21.1 | % | $ | 599,544 | $ | 440,383 | 36.1 | % | ||||||||||
Realized (gains)/losses on settlement of fuel derivative contracts | (990 | ) | (1,565 | ) | (36.7 | )% | (25,563 | ) | 534 | NM | ||||||||||||
Economic fuel expense | $ | 149,150 | $ | 122,395 | 21.9 | % | $ | 573,981 | $ | 440,917 | 30.2 | % | ||||||||||
Fuel gallons consumed | 67,751 | 66,511 | 1.9 | % | 273,783 | 259,915 | 5.3 | % | ||||||||||||||
Economic fuel costs per gallon | $ | 2.20 | $ | 1.84 | 19.6 | % | $ | 2.10 | $ | 1.70 | 23.5 | % |
Estimated three months ending March 31, 2019 | Estimated full year ending December 31, 2019 | |||||||||||||||
(in thousands, except per-gallon amounts) | ||||||||||||||||
Aircraft fuel expense, including taxes and delivery | $ | 121,412 | - | $ | 130,453 | $ | 516,399 | - | $ | 560,068 | ||||||
Realized (gains)/losses on settlement of fuel derivative contracts | 2,700 | - | 2,700 | 6,800 | - | 6,800 | ||||||||||
Economic fuel expense | $ | 124,112 | - | $ | 133,153 | $ | 523,199 | - | $ | 566,868 | ||||||
Fuel gallons consumed | 63,647 | - | 64,953 | 268,307 | - | 276,521 | ||||||||||
Economic fuel costs per gallon | $ | 1.95 | - | $ | 2.05 | $ | 1.95 | - | $ | 2.05 |
• | Changes in fair value of derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period. This line item includes the unrealized amounts of fuel derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts. |
• | Unrealized loss (gain) on foreign debt is based on fluctuations in foreign exchange rates related to foreign-denominated debt agreements the Company executed in May and June 2018. |
• | Loss (gain) on sale of aircraft is the result of adjustments to the final purchase price of the Company's Boeing 767-300 aircraft included in a forward sale agreement the Company entered into in January 2018. During the three months ended September 30, 2018 the Company recorded a loss of $1.8 million on the sale of two Boeing 767-300 aircraft covered under the forward sale agreement. During the three months ended December 31, 2018 the Company recorded a gain of $1.5 million on the sale of one Boeing 767-300 aircraft covered under the forward sale agreement. |
• | On December 22, 2017 the Tax Cuts and Jobs Act of 2017 (Tax Reform Act) was enacted into law, which significantly changed existing U.S. tax law and reduces the U.S. federal corporate tax rate from 35 percent to 21 percent. During the three months ended December 31, 2017 the Company recognized a one-time benefit of $83.0 million from the estimated impact of the revaluation of deferred tax assets and liabilities. During the twelve months ended December 31, 2018 the Company completed its accounting for the effects of the Tax Reform Act and recorded a tax benefit of $9.3 million. |
• | During the three months ended September 30, 2017 the Company terminated the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan) and settled a portion of its pilots' other post-retirement medical plan liability (OPEB). In connection with the reduction of these liabilities the Company recorded one-time other non-operating special items of $35.2 million related to the Merged Plan termination and $10.4 million related to the OPEB settlement. |
• | During the three months ended June 30, 2017 the Company executed a sale leaseback transaction with an independent third party for three Boeing 767-300 aircraft as part of the Company's planned exit from its 767 fleet. During the three months ended June 30, 2017 the Company recorded a loss on sale of such aircraft of $4.8 million. |
• | During the three months ended March 31, 2017 the Company accrued $18.7 million related to (1) a one-time payment to reduce the Company's future 401K employer contribution for certain pilot groups, and (2) a one-time true up of the pilot vacation accrual at the new negotiated contract rates. |
• | During the three months ended March 31, 2018 the Company terminated two contracts which resulted in a $35.3 million contract terminations expense. In February 2018 the Company exercised its right to terminate its purchase agreement with Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. The Company recorded a contract terminations expense to reflect a portion of the termination penalty. In January 2018 the Company entered into a transaction with its lessor to early terminate and purchase three Boeing 767-300 aircraft leases and concurrently entered into a forward sale agreement for the same three Boeing 767-300 aircraft, including two Pratt & Whitney 4060 engines for each aircraft. These aircraft were previously accounted for as operating leases. In order to exit the leases and purchase the aircraft, the Company agreed to pay a total of $67.1 million (net of all deposits) of which a portion was expensed immediately and recognized as a lease termination fee. The expensed amount represents the total purchase price over fair value of the aircraft purchased as of the date of the transaction. |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | |||||||||||||||||||||||||||||
Total | Diluted Per Share | Total | Diluted Per Share | Total | Diluted Per Share | Total | Diluted Per Share | |||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||||
GAAP net income, as reported | $ | 31,636 | $ | 0.64 | $ | 148,448 | $ | 2.84 | $ | 233,200 | $ | 4.62 | $ | 330,610 | $ | 6.19 | ||||||||||||||||
Add: impact of tax reform | — | — | (82,978 | ) | (1.59 | ) | — | — | (82,978 | ) | (1.55 | ) | ||||||||||||||||||||
Add (deduct): changes in fair value of derivative contracts | 22,464 | 0.46 | (11,974 | ) | (0.23 | ) | 19,973 | 0.39 | (3,845 | ) | (0.07 | ) | ||||||||||||||||||||
Add: unrealized loss (gain) on foreign debt | 2,711 | 0.05 | — | — | 380 | 0.01 | — | — | ||||||||||||||||||||||||
Add: loss (gain) on sale of aircraft | (1,535 | ) | (0.03 | ) | — | — | 309 | 0.01 | — | — | ||||||||||||||||||||||
Operating | ||||||||||||||||||||||||||||||||
Add: contract terminations expense | — | — | — | — | 35,322 | 0.70 | — | — | ||||||||||||||||||||||||
Add: special items | — | — | — | — | — | — | 23,450 | 0.44 | ||||||||||||||||||||||||
Nonoperating | ||||||||||||||||||||||||||||||||
Add: partial settlement and curtailment loss | — | — | (4,617 | ) | (0.09 | ) | — | — | 10,384 | 0.19 | ||||||||||||||||||||||
Add: loss on plan termination | — | — | — | — | — | — | 35,201 | 0.66 | ||||||||||||||||||||||||
Deduct: tax effect of adjustments | (6,066 | ) | (0.12 | ) | 6,079 | 0.12 | (14,365 | ) | (0.29 | ) | (23,886 | ) | (0.45 | ) | ||||||||||||||||||
Adjusted Net Income | $ | 49,210 | $ | 1.00 | $ | 54,958 | $ | 1.05 | $ | 274,819 | $ | 5.44 | $ | 288,936 | $ | 5.41 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | |||||||||||||
(in thousands) | ||||||||||||||||
Income Before Income Taxes | $ | 41,519 | $ | 106,065 | $ | 301,158 | $ | 390,821 | ||||||||
Add (deduct): changes in fair value of derivative contracts | 22,464 | (11,974 | ) | 19,973 | (3,845 | ) | ||||||||||
Add: unrealized loss (gain) on foreign debt | 2,711 | — | 380 | — | ||||||||||||
Add: loss (gain) on sale of aircraft | (1,535 | ) | — | 309 | — | |||||||||||
Operating | ||||||||||||||||
Add: contract terminations expense | — | — | 35,322 | — | ||||||||||||
Add: special items | — | — | — | 23,450 | ||||||||||||
Nonoperating | ||||||||||||||||
Add: partial settlement and curtailment loss | — | (4,617 | ) | — | 10,384 | |||||||||||
Add: loss on plan termination | — | — | — | 35,201 | ||||||||||||
Adjusted Income Before Income Taxes | $ | 65,159 | $ | 89,474 | $ | 357,142 | $ | 456,011 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | |||||||||||||
(in thousands, except CASM data) | ||||||||||||||||
GAAP operating expenses | $ | 628,116 | $ | 586,438 | $ | 2,523,043 | $ | 2,211,107 | ||||||||
Less: aircraft fuel, including taxes and delivery | (150,140 | ) | (123,960 | ) | (599,544 | ) | (440,383 | ) | ||||||||
Less: gain (loss) on sale of aircraft | 1,535 | — | (309 | ) | — | |||||||||||
Less: contract terminations expense | — | — | (35,322 | ) | — | |||||||||||
Less: special items | — | — | — | (23,450 | ) | |||||||||||
Adjusted operating expenses—excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items | $ | 479,511 | $ | 462,478 | $ | 1,887,868 | $ | 1,747,274 | ||||||||
Available Seat Miles | 5,067,412 | 4,798,039 | 20,171,911 | 19,006,682 | ||||||||||||
CASM—GAAP | 12.40 | ¢ | 12.22 | ¢ | 12.51 | ¢ | 11.63 | ¢ | ||||||||
Less: aircraft fuel, including taxes and delivery | (2.97 | ) | (2.58 | ) | (2.97 | ) | (2.32 | ) | ||||||||
Less: gain (loss) on sale of aircraft | 0.03 | — | (0.00) | — | ||||||||||||
Less: contract terminations expense | — | — | (0.18 | ) | — | |||||||||||
Less: special items | — | — | — | (0.12 | ) | |||||||||||
CASM—excluding aircraft fuel, loss on sale of aircraft, contract terminations expense, and special items | 9.46 | ¢ | 9.64 | ¢ | 9.36 | ¢ | 9.19 | ¢ |
Estimated three months ending March 31, 2019 | Estimated full year ending December 31, 2019 | |||||||||||||||
(in thousands, except CASM data) | ||||||||||||||||
GAAP operating expenses | $ | 593,365 | - | $ | 623,606 | $ | 2,432,811 | - | $ | 2,592,314 | ||||||
Less: aircraft fuel, including taxes and delivery | (121,412 | ) | - | (130,453 | ) | (516,399 | ) | - | (560,068 | ) | ||||||
Adjusted operating expenses - excluding aircraft fuel | $ | 471,953 | - | $ | 493,153 | $ | 1,916,412 | - | $ | 2,032,246 | ||||||
Available Seat Miles | 4,802,471 | - | 4,873,444 | 20,474,490 | - | 21,079,647 | ||||||||||
CASM - GAAP | 12.36 | ¢ | - | 12.80 | ¢ | 11.88 | ¢ | - | 12.30 | ¢ | ||||||
Less: aircraft fuel | (2.53 | ) | - | (2.68 | ) | (2.52 | ) | - | (2.66 | ) | ||||||
CASM - excluding aircraft fuel | 9.83 | ¢ | - | 10.12 | ¢ | 9.36 | ¢ | - | 9.64 | ¢ |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | |||||||||
Pre-Tax Margin, as reported | 6.0 | % | 15.5 | % | 10.6 | % | 14.6 | % | ||||
Add: changes in fair value of derivative contracts | 3.2 | (1.8 | ) | 0.7 | (0.1 | ) | ||||||
Add: unrealized loss (gain) on foreign debt | 0.4 | — | — | — | ||||||||
Add: loss on sale of aircraft | (0.3 | ) | — | 0.0 | — | |||||||
Operating | ||||||||||||
Add: contract terminations expense | — | — | 1.3 | — | ||||||||
Add: special items | — | — | — | 0.9 | ||||||||
Nonoperating | ||||||||||||
Add: partial settlement and curtailment loss | — | (0.6 | ) | — | 0.4 | |||||||
Add: loss on plan termination | — | — | — | 1.2 | ||||||||
Adjusted Pre-Tax Margin | 9.3 | % | 13.1 | % | 12.6 | % | 17.0 | % |
Twelve months ended | ||||
December 31, 2018 | ||||
(in thousands, except Leverage Ratio) | ||||
Debt and capital lease obligations | $ | 709,781 | ||
Plus: Aircraft leases capitalized at 7x last twelve months' aircraft rent | 881,727 | |||
Adjusted debt and capital lease obligations | $ | 1,591,508 | ||
EBITDAR: | ||||
Income Before Income Taxes | $ | 301,158 | ||
Add back: | ||||
Interest and amortization of debt expense | 33,001 | |||
Depreciation and amortization | 139,866 | |||
Aircraft rent | 125,961 | |||
EBITDAR | $ | 599,986 | ||
Adjustments: | ||||
Add: changes in fair value of derivative contracts | 19,973 | |||
Add: unrealized loss on foreign debt | 380 | |||
Add: loss on sale of aircraft | 309 | |||
Add: contract terminations expense | 35,322 | |||
Adjusted EBITDAR | $ | 655,970 | ||
Leverage Ratio | 2.4 | x |
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