001-35186 (Commission File Number) | 38-1747023 (IRS Employer Identification Number) |
[] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release regarding first quarter 2017 financial results. |
Date: April 28, 2017 | SPIRIT AIRLINES, INC. |
Exhibit No. | Description | |
99.1 | Press Release regarding first quarter 2017 financial results. |
• | GAAP net income for the first quarter 2017 was $31.9 million ($0.46 per diluted share), or $35.6 million ($0.51 per diluted share)1 excluding special items. |
• | GAAP operating margin for the first quarter 2017 was 10.0 percent, or 11.0 percent excluding special items1. |
• | Spirit ended the first quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $918.4 million. |
• | Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended March 31, 2017 was 21.0 percent2. |
(1) | See "Reconciliation of Adjusted Net Income, Adjusted Pre-tax Income, and Adjusted Operating Income to GAAP Net Income" table below for more details. |
(2) | See "Calculation for Return on Invested Capital" table below for more details. |
(4) | See "Special Items" table for more details. |
(5) | See "Reconciliation of Adjusted Operating Expense to GAAP Operating Expense" table below for more details. |
Three Months Ended | |||||||||||
March 31, | Percent | ||||||||||
2017 | 2016 | Change | |||||||||
Operating revenues: | |||||||||||
Passenger | $ | 299,762 | $ | 272,626 | 10.0 | ||||||
Non-ticket | 291,984 | 265,517 | 10.0 | ||||||||
Total operating revenues | 591,746 | 538,143 | 10.0 | ||||||||
Operating expenses: | |||||||||||
Salaries, wages and benefits | 127,138 | 116,410 | 9.2 | ||||||||
Aircraft fuel | 139,782 | 85,982 | 62.6 | ||||||||
Aircraft rent | 57,070 | 52,202 | 9.3 | ||||||||
Landing fees and other rents | 40,448 | 34,807 | 16.2 | ||||||||
Depreciation and amortization | 31,509 | 23,109 | 36.3 | ||||||||
Maintenance, materials and repairs | 26,312 | 20,940 | 25.7 | ||||||||
Distribution | 26,498 | 22,933 | 15.5 | ||||||||
Special charges | 4,776 | 16,202 | nm | ||||||||
Loss on disposal of assets | 1,105 | 214 | nm | ||||||||
Other operating | 77,703 | 64,045 | 21.3 | ||||||||
Total operating expenses | 532,341 | 436,844 | 21.9 | ||||||||
Operating income | 59,405 | 101,299 | (41.4 | ) | |||||||
Other (income) expense: | |||||||||||
Interest expense | 12,473 | 8,060 | 54.8 | ||||||||
Capitalized interest | (3,580 | ) | (3,325 | ) | 7.7 | ||||||
Interest income | (1,313 | ) | (1,566 | ) | (16.2 | ) | |||||
Other expense | 3 | 70 | nm | ||||||||
Total other (income) expense | 7,583 | 3,239 | nm | ||||||||
Income before income taxes | 51,822 | 98,060 | (47.2 | ) | |||||||
Provision for income taxes | 19,887 | 36,140 | (45.0 | ) | |||||||
Net income | $ | 31,935 | $ | 61,920 | (48.4 | ) | |||||
Basic earnings per share | $ | 0.46 | $ | 0.87 | (47.1 | ) | |||||
Diluted earnings per share | $ | 0.46 | $ | 0.86 | (46.5 | ) | |||||
Weighted average shares, basic | 69,348 | 71,572 | (3.1 | ) | |||||||
Weighted average shares, diluted | 69,592 | 71,777 | (3.0 | ) |
Three Months Ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 31,935 | $ | 61,920 | |||
Unrealized gain (loss) on short-term investment securities, net of deferred taxes of ($8) and $0 | (13 | ) | — | ||||
Interest rate derivative losses reclassified into earnings, net of taxes of $31 and $33 | 53 | 57 | |||||
Other comprehensive income (loss) | $ | 40 | $ | 57 | |||
Comprehensive income | $ | 31,975 | $ | 61,977 |
March 31, | December 31, | ||||||
2017 | 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 818,110 | $ | 700,900 | |||
Short-term investment securities | 100,294 | 100,155 | |||||
Accounts receivable, net | 48,692 | 41,136 | |||||
Aircraft maintenance deposits | 125,758 | 87,035 | |||||
Prepaid expenses and other current assets | 53,677 | 46,619 | |||||
Total current assets | 1,146,531 | 975,845 | |||||
Property and equipment: | |||||||
Flight equipment | 1,608,959 | 1,461,525 | |||||
Ground property and equipment | 136,126 | 126,206 | |||||
Less accumulated depreciation | (140,535 | ) | (122,509 | ) | |||
1,604,550 | 1,465,222 | ||||||
Deposits on flight equipment purchase contracts | 330,523 | 325,688 | |||||
Long-term aircraft maintenance deposits | 170,631 | 199,415 | |||||
Deferred heavy maintenance, net | 71,870 | 75,534 | |||||
Other long-term assets | 114,509 | 110,223 | |||||
Total assets | $ | 3,438,614 | $ | 3,151,927 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | 39,612 | 15,193 | |||||
Air traffic liability | 308,958 | 206,392 | |||||
Current maturities of long-term debt | 92,672 | 84,354 | |||||
Other current liabilities | 231,932 | 226,011 | |||||
Total current liabilities | 673,174 | 531,950 | |||||
Long-term debt, less current maturities | 991,722 | 897,359 | |||||
Deferred income taxes | 327,660 | 308,143 | |||||
Deferred gains and other long-term liabilities | 17,712 | 19,868 | |||||
Shareholders’ equity: | |||||||
Common stock | 7 | 7 | |||||
Additional paid-in-capital | 553,820 | 551,004 | |||||
Treasury stock, at cost | (219,726 | ) | (218,692 | ) | |||
Retained earnings | 1,095,568 | 1,063,633 | |||||
Accumulated other comprehensive loss | (1,323 | ) | (1,345 | ) | |||
Total shareholders’ equity | 1,428,346 | 1,394,607 | |||||
Total liabilities and shareholders’ equity | $ | 3,438,614 | $ | 3,151,927 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net income | $ | 31,935 | $ | 61,920 | |||
Adjustments to reconcile net income to net cash provided by operations: | |||||||
Losses reclassified from other comprehensive income | 84 | 90 | |||||
Equity-based compensation | 2,816 | 1,790 | |||||
Allowance for doubtful accounts (recoveries) | (30 | ) | 25 | ||||
Amortization of deferred gains and losses and debt issuance costs | 3,351 | 1,968 | |||||
Depreciation and amortization | 31,509 | 23,109 | |||||
Deferred income tax expense | 19,474 | 21,066 | |||||
Loss on disposal of assets | 1,105 | 214 | |||||
Lease termination costs | 4,776 | 16,202 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (7,526 | ) | (4,229 | ) | |||
Aircraft maintenance deposits | (12,774 | ) | (12,311 | ) | |||
Prepaid income taxes | (846 | ) | 72,278 | ||||
Long-term deposits and other assets | (21,267 | ) | (8,495 | ) | |||
Accounts payable | 18,937 | 4,703 | |||||
Air traffic liability | 102,207 | 46,473 | |||||
Other liabilities | 298 | 33,296 | |||||
Other | 113 | — | |||||
Net cash provided by operating activities | 174,162 | 258,099 | |||||
Investing activities: | |||||||
Purchase of available-for-sale investment securities | (24,490 | ) | — | ||||
Proceeds from the maturity of available-for-sale investment securities | 24,219 | — | |||||
Pre-delivery deposits for flight equipment, net of refunds | (44,752 | ) | (50,358 | ) | |||
Capitalized interest | (1,647 | ) | (2,575 | ) | |||
Purchase of property and equipment | (112,265 | ) | (159,829 | ) | |||
Net cash used in investing activities | (158,935 | ) | (212,762 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of long-term debt | 115,526 | 73,914 | |||||
Proceeds from stock options exercised | — | 88 | |||||
Payments on debt and capital lease obligations | (10,235 | ) | (9,749 | ) | |||
Excess tax (deficiency) benefit from equity-based compensation | — | (778 | ) | ||||
Repurchase of common stock | (1,034 | ) | (9,601 | ) | |||
Debt issuance costs | (2,274 | ) | (34 | ) | |||
Net cash provided by financing activities | 101,983 | 53,840 | |||||
Net (decrease) increase in cash and cash equivalents | 117,210 | 99,177 | |||||
Cash and cash equivalents at beginning of period | 700,900 | 803,632 | |||||
Cash and cash equivalents at end of period | $ | 818,110 | $ | 902,809 | |||
Supplemental disclosures | |||||||
Cash payments for: | |||||||
Interest, net of capitalized interest | $ | 3,943 | $ | 3,430 | |||
Income taxes paid, net of refunds | $ | 2,881 | $ | (64,158 | ) | ||
Non-cash transactions: | |||||||
Capital expenditures funded by capital lease borrowings | $ | (130 | ) | $ | (31 | ) |
Three Months Ended March 31, | ||||||||
Operating Statistics | 2017 | 2016 | Change | |||||
Available seat miles (ASMs) (thousands) | 6,875,899 | 5,983,005 | 14.9 | % | ||||
Revenue passenger miles (RPMs) (thousands) | 5,613,422 | 5,070,313 | 10.7 | % | ||||
Load factor (%) | 81.6 | 84.7 | (3.1) pts | |||||
Passenger flight segments (thousands) | 5,570 | 4,988 | 11.7 | % | ||||
Block hours | 104,035 | 93,545 | 11.2 | % | ||||
Departures | 39,330 | 35,160 | 11.9 | % | ||||
Total operating revenue per ASM (TRASM) (cents) | 8.61 | 8.99 | (4.2 | )% | ||||
Average yield (cents) | 10.54 | 10.61 | (0.7 | )% | ||||
Average ticket revenue per passenger flight segment ($) | 53.82 | 54.65 | (1.5 | )% | ||||
Average non-ticket revenue per passenger flight segment ($) | 52.42 | 53.23 | (1.5 | )% | ||||
Total revenue per passenger flight segment ($) | 106.24 | 107.88 | (1.5 | )% | ||||
CASM (cents) | 7.74 | 7.30 | 6.0 | % | ||||
Adjusted CASM (cents) (1) | 7.66 | 7.03 | 9.0 | % | ||||
Adjusted CASM ex-fuel (cents) (2) | 5.62 | 5.59 | 0.5% | |||||
Fuel gallons consumed (thousands) | 79,064 | 70,550 | 12.1 | % | ||||
Average economic fuel cost per gallon ($) | 1.77 | 1.22 | 45.1 | % | ||||
Aircraft at end of period | 100 | 83 | 20.5 | % | ||||
Average daily aircraft utilization (hours) | 11.9 | 12.8 | (7.0)% | |||||
Average stage length (miles) | 985 | 995 | (1.0 | )% |
(1) | Excludes special items. |
(2) | Excludes economic fuel expense and special items. |
Three Months Ended | |||||||
March 31, | |||||||
(in thousands) | 2017 | 2016 | |||||
Operating special items include the following (1): | |||||||
Loss on disposal of assets | 1,105 | 214 | |||||
Special charges | 4,776 | 16,202 | |||||
Total operating special items | $ | 5,881 | $ | 16,416 |
Three Months Ended | |||||||
March 31, | |||||||
(in thousands, except CASM data in cents) | 2017 | 2016 | |||||
Total operating expenses, as reported | $ | 532,341 | $ | 436,844 | |||
Less operating special items (1) | 5,881 | 16,416 | |||||
Adjusted operating expenses, non-GAAP (2) | 526,460 | 420,428 | |||||
Less: Economic fuel expense | 139,782 | 85,982 | |||||
Adjusted operating expenses excluding fuel, non-GAAP (3) | $ | 386,678 | $ | 334,446 | |||
Available seat miles | 6,875,899 | 5,983,005 | |||||
CASM (cents) | 7.74 | 7.30 | |||||
Adjusted CASM (cents) (2) | 7.66 | 7.03 | |||||
Adjusted CASM ex-fuel (cents) (3) | 5.62 | 5.59 |
(1) | Special items include loss on disposal of assets and special charges. Special charges are primarily related to lease termination costs. |
(2) | Excludes operating special items. |
(3) | Excludes operating special items and economic fuel expense as described in the "Reconciliation of Economic Fuel Expense to GAAP Fuel Expense" table below. |
Three Months Ended | |||||||
March 31, | |||||||
(in thousands, except per share data) | 2017 | 2016 | |||||
Net income, as reported | $ | 31,935 | $ | 61,920 | |||
Add: Provision for income taxes | 19,887 | 36,140 | |||||
Income before income taxes, as reported | 51,822 | 98,060 | |||||
Pre-tax margin, GAAP | 8.8 | % | 18.2 | % | |||
Add operating special items (1) | $ | 5,881 | $ | 16,416 | |||
Adjusted income before income taxes, non-GAAP (2) | 57,703 | 114,476 | |||||
Adjusted pre-tax margin, non-GAAP (2) | 9.8 | % | 21.3 | % | |||
Add: Total other (income) expense | 7,583 | 3,239 | |||||
Adjusted operating income, non-GAAP(2) | 65,286 | 117,715 | |||||
Adjusted operating margin, non-GAAP(2) | 11.0 | % | 21.9 | % | |||
Provision for adjusted income taxes (3) | 22,144 | 42,190 | |||||
Adjusted net income, non-GAAP (2)(3) | $ | 35,559 | $ | 72,286 | |||
Weighted average shares, diluted | 69,592 | 71,777 | |||||
Adjusted net income per share, diluted (2)(3) | $0.51 | $1.01 | |||||
Total operating revenues | $ | 591,746 | $ | 538,143 |
(1) | See "Special Items" for more details. |
(2) | Excludes operating special items. |
(3) | Assumes same marginal tax rate as is applicable to GAAP net income. |
Three Months Ended | |||||||
March 31, | |||||||
(in thousands, except per gallon data) | 2017 | 2016 | |||||
Fuel expense | |||||||
Aircraft fuel, as reported | $ | 139,782 | $ | 85,982 | |||
Fuel gallons consumed | 79,064 | 70,550 | |||||
Economic fuel cost per gallon, non-GAAP | $ | 1.77 | $ | 1.22 |
Twelve Months Ended | |||
(in thousands) | March 31, 2017 | ||
Operating income | $ | 401,767 | |
Add operating special items (1) | 30,841 | ||
Adjustment for aircraft rent | 206,543 | ||
Adjusted operating income (2) | 639,151 | ||
Tax (37.1%) (3) | 237,125 | ||
Adjusted operating income, after-tax | $ | 402,026 | |
Invested capital: | |||
Total debt | $ | 1,084,394 | |
Book equity | 1,428,346 | ||
Less: Unrestricted cash, cash equivalents & short-term investments | 918,404 | ||
Add: Capitalized aircraft operating leases (7x Aircraft Rent) | 1,445,801 | ||
Total invested capital | $ | 3,040,137 | |
Return on invested capital (ROIC), pre-tax (2) | 21.0 | % | |
Return on invested capital (ROIC), after-tax (2)(3) | 13.2 | % |
(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 March 31, 2017. |
WJW;ZUZY\*YK?44U?7S9Q6*.4MXXHUQ'%'&@S@]\DY)/I0!Z/
M7+ZW\1?#VA3&":[-Q G
M4UZ%I^BZ9I/F?V;IUG9^9C?]G@6/=CIG &>IJ:SL;73X/(L;:&VA!+>7#&$7
M)ZG XH GKQRQLO%,EWXSO/"^L"V>#4I2;,VL;^>1SP[ X..@QR?2O8Z@MK&U
MLWF>UMH86G?S)6CC"F1O[S8ZGW- 'B=]-;CX8:*FB7.+2_U'&J/>RL%\TCYD
ME9,$)GTQP :IW$$UGX"\06T>H:9 #P HZ8J?JD9I23M>UK7
M:UOWLTM//OL'-8]%BD:3?OADBVN5&\K\X_O#!/!]\'VJO?:BFG07%Q<12BVM
MX&G>8;2,+R5QG.<#/3'O7#W-O'=6\L$PS')XHVNN?O ]0?8]*?XITVR@N=5M
MH;.WCMX_#\KI$D2A%8.2"!C .>?K50P4.=1E+?R]/,.;0[V&59X(Y5!"R*&
M/7!&:DK/TNWCL]!MHK.&.)5@!2.-0JY(ST'J37,^&+;2QIFA:G-*\>K7+LLD
MR+F6YE(;S(Y."2H(/7&W:.1BN6-!24I)[.VWJ_EMYE7.VHKSFXBM7\)ZSK$^
M#KD%W,$N#_KHI%DQ%&IZ@8VC:."#[TS4]/@N-.\8WUQ"IO;>56AE(^:!Q#&=
MR'^$Y[CK@>E=,V3^%
M ')>&])U30_#VE^)-%M);N\N587]JSG-PK,=CC/0C@].ASZU+