ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 38-1747023 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2800 Executive Way Miramar, Florida | 33025 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
(Do not check if a smaller reporting company) | Emerging growth company | o |
Class | Number of Shares | |
Common Stock, $0.0001 par value |
Page No. | |||||
ITEM 1. | UNAUDITED CONDENSED FINANCIAL STATEMENTS |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating revenues: | |||||||||||||||
Passenger | $ | $ | $ | $ | |||||||||||
Non-ticket | |||||||||||||||
Total operating revenues | |||||||||||||||
Operating expenses: | |||||||||||||||
Salaries, wages and benefits | |||||||||||||||
Aircraft fuel | |||||||||||||||
Aircraft rent | |||||||||||||||
Landing fees and other rents | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Maintenance, materials and repairs | |||||||||||||||
Distribution | |||||||||||||||
Special charges | |||||||||||||||
Loss on disposal of assets | |||||||||||||||
Other operating | |||||||||||||||
Total operating expenses | |||||||||||||||
Operating income | |||||||||||||||
Other (income) expense: | |||||||||||||||
Interest expense | |||||||||||||||
Capitalized interest | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other expense | |||||||||||||||
Total other (income) expense | |||||||||||||||
Income before income taxes | |||||||||||||||
Provision for income taxes | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Unrealized gain (loss) on short-term investment securities, net of deferred taxes of $7, $3, ($6) and $3 | ( | ) | |||||||||||||
Interest rate derivative losses reclassified into earnings, net of taxes of $31, $32, $92 and $97 | |||||||||||||||
Other comprehensive income (loss) | $ | $ | $ | $ | |||||||||||
Comprehensive income | $ | $ | $ | $ |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investment securities | |||||||
Accounts receivable, net | |||||||
Aircraft maintenance deposits, net | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment: | |||||||
Flight equipment | |||||||
Ground property and equipment | |||||||
Less accumulated depreciation | ( | ) | ( | ) | |||
Deposits on flight equipment purchase contracts | |||||||
Long-term aircraft maintenance deposits | |||||||
Deferred heavy maintenance, net | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Air traffic liability | |||||||
Current maturities of long-term debt | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, less current maturities | |||||||
Deferred income taxes | |||||||
Deferred gains and other long-term liabilities | |||||||
Shareholders’ equity: | |||||||
Common stock | |||||||
Additional paid-in-capital | |||||||
Treasury stock, at cost | ( | ) | ( | ) | |||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total shareholders’ equity | |||||||
Total liabilities and shareholders’ equity | $ | $ |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||
Losses reclassified from other comprehensive income | |||||||
Equity-based compensation | |||||||
Allowance for doubtful accounts (recoveries) | ( | ) | |||||
Amortization of deferred gains and losses and debt issuance costs | |||||||
Depreciation and amortization | |||||||
Deferred income tax expense | |||||||
Loss on disposal of assets | |||||||
Lease termination costs | |||||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Aircraft maintenance deposits, net | ( | ) | ( | ) | |||
Prepaid income taxes | ( | ) | |||||
Long-term deposits and other assets | ( | ) | ( | ) | |||
Accounts payable | ( | ) | |||||
Air traffic liability | |||||||
Other liabilities | |||||||
Other | |||||||
Net cash provided by operating activities | |||||||
Investing activities: | |||||||
Purchase of available-for-sale investment securities | ( | ) | ( | ) | |||
Proceeds from the maturity of available-for-sale investment securities | |||||||
Proceeds from sale of property and equipment | |||||||
Pre-delivery deposits for flight equipment, net of refunds | ( | ) | ( | ) | |||
Capitalized interest | ( | ) | ( | ) | |||
Purchase of property and equipment | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
Financing activities: | |||||||
Proceeds from issuance of long-term debt | |||||||
Proceeds from stock options exercised | |||||||
Payments on debt and capital lease obligations | ( | ) | ( | ) | |||
Excess tax (deficiency) benefit from equity-based compensation | ( | ) | |||||
Repurchase of common stock | ( | ) | ( | ) | |||
Debt issuance costs | ( | ) | ( | ) | |||
Net cash provided by financing activities | |||||||
Net (decrease) increase in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental disclosures | |||||||
Cash payments for: | |||||||
Interest, net of capitalized interest | $ | $ | |||||
Income taxes paid, net of refunds | $ | $ | ( | ) | |||
Non-cash transactions: | |||||||
Capital expenditures funded by capital lease borrowings | $ | ( | ) | $ | ( | ) |
1. |
2. |
3. |
4. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Numerator | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Denominator | |||||||||||||||
Weighted-average shares outstanding, basic | |||||||||||||||
Effect of dilutive stock awards | |||||||||||||||
Adjusted weighted-average shares outstanding, diluted | |||||||||||||||
Net income per share | |||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||||
Anti-dilutive weighted-average shares |
5. |
6. |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Salaries and wages | $ | $ | |||||
Airport obligations | |||||||
Federal excise and other passenger taxes and fees payable | |||||||
Aircraft maintenance | |||||||
Interest payable | |||||||
Fuel | |||||||
Aircraft and facility lease obligations | |||||||
Other | |||||||
Other current liabilities | $ | $ |
7. |
8. |
Airbus | ||||||||
A320ceo | A320neo | A321ceo | Total | |||||
remainder of 2017 | ||||||||
2018 | ||||||||
2019 | ||||||||
2020 | ||||||||
2021 | ||||||||
Capital Leases | Aircraft and Spare Engine Leases | Property Facility Leases | Total Operating and Capital Lease Obligations | |||||||||||||
(in thousands) | ||||||||||||||||
remainder of 2017 | $ | $ | $ | $ | ||||||||||||
2018 | ||||||||||||||||
2019 | ||||||||||||||||
2020 | ||||||||||||||||
2021 | ||||||||||||||||
2022 and thereafter | ||||||||||||||||
Total minimum lease payments | $ | $ | $ | $ | ||||||||||||
Less amount representing interest | ||||||||||||||||
Present value of minimum lease payments | $ | |||||||||||||||
Less current portion | ||||||||||||||||
Long-term portion | $ |
Employee Groups | Representative | Amendable Date | Percentage of Workforce | |||
Pilots | Air Line Pilots Association, International (ALPA) | August 2015 | ||||
Flight Attendants | Association of Flight Attendants (AFA-CWA) | May 2021 | ||||
Dispatchers | Transport Workers Union (TWU) | August 2018 | ||||
Ramp Service Agents | International Association of Machinists and Aerospace Workers (IAMAW) | June 2020 |
9. |
September 30, 2017 | December 31, 2016 | Fair Value Level Hierarchy | |||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||
(in millions) | |||||||||||||||||
Senior term loans | $ | $ | $ | $ | Level 3 | ||||||||||||
Junior term loans | Level 3 | ||||||||||||||||
Fixed-rate loans | Level 3 | ||||||||||||||||
Class A enhanced equipment trust certificates | Level 2 | ||||||||||||||||
Class B enhanced equipment trust certificates | Level 2 | ||||||||||||||||
Total long-term debt | $ | $ | $ | $ |
Fair Value Measurements as of September 30, 2017 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
(in millions) | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||
Short-term investment securities | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Total liabilities | $ | $ | $ | $ |
Fair Value Measurements as of December 31, 2016 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
(in millions) | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||
Short-term investment securities | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Total liabilities | $ | $ | $ | $ |
10. |
As of | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
September 30, 2017 | December 31, 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
(in millions) | (weighted-average interest rates) | |||||||||||||||||||
Fixed-rate senior term loans due through 2027 | $ | $ | % | % | % | % | ||||||||||||||
Fixed-rate junior term loans due through 2022 | % | % | % | % | ||||||||||||||||
Fixed-rate loans due through 2029 | % | N/A | % | N/A | ||||||||||||||||
Fixed-rate class A enhanced equipment trust certificates due through 2028 | % | % | % | % | ||||||||||||||||
Fixed-rate class B enhanced equipment trust certificates due through 2024 | % | % | % | % | ||||||||||||||||
Long-term debt | $ | $ | ||||||||||||||||||
Less current maturities | ||||||||||||||||||||
Less unamortized discounts | ||||||||||||||||||||
Total | $ | $ |
September 30, 2017 | ||||
(in millions) | ||||
Remainder of 2017 | $ | |||
2018 | ||||
2019 | ||||
2020 | ||||
2021 | ||||
2022 and beyond | ||||
Total debt principal payments | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Senior term loans | $ | $ | $ | $ | |||||||||||
Junior term loans | |||||||||||||||
Fixed-rate loans | |||||||||||||||
Class A enhanced equipment trust certificates | |||||||||||||||
Class B enhanced equipment trust certificates | |||||||||||||||
Commitment fees | |||||||||||||||
Amortization of debt discounts | |||||||||||||||
Total | $ | $ | $ | $ |
11. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended September 30, | Percent Change | |||||||
2017 | 2016 | |||||||
Operating Statistics (unaudited) (A): | ||||||||
Average aircraft | 105.5 | 87.4 | 20.7 | % | ||||
Aircraft at end of period | 107 | 89 | 20.2 | % | ||||
Average daily aircraft utilization (hours) | 11.6 | 12.3 | (5.7 | )% | ||||
Average stage length (miles) | 1,006 | 968 | 3.9 | % | ||||
Block hours | 112,701 | 98,586 | 14.3 | % | ||||
Departures | 42,599 | 38,310 | 11.2 | % | ||||
Passenger flight segments (PFSs) (thousands) | 6,307 | 5,674 | 11.2 | % | ||||
Revenue passenger miles (RPMs) (thousands) | 6,452,529 | 5,599,370 | 15.2 | % | ||||
Available seat miles (ASMs) (thousands) | 7,681,312 | 6,507,204 | 18.0 | % | ||||
Load factor (%) | 84.0 | % | 86.0 | % | (2.0) pts | |||
Average ticket revenue per passenger flight segment ($) | 56.48 | 58.34 | (3.2 | )% | ||||
Average non-ticket revenue per passenger flight segment ($) | 52.48 | 51.17 | 2.6 | % | ||||
Total revenue per passenger flight segment ($) | 108.96 | 109.51 | (0.5 | )% | ||||
Average yield (cents) | 10.65 | 11.10 | (4.1 | )% | ||||
TRASM (cents) | 8.95 | 9.55 | (6.3 | )% | ||||
CASM (cents) | 7.59 | 7.47 | 1.6 | % | ||||
Adjusted CASM (cents) | 7.48 | 7.35 | 1.8 | % | ||||
Adjusted CASM ex-fuel (cents) | 5.42 | 5.48 | (1.1 | )% | ||||
Fuel gallons consumed (thousands) | 90,274 | 78,288 | 15.3 | % | ||||
Average economic fuel cost per gallon ($) | 1.75 | 1.56 | 12.2 | % |
Nine Months Ended September 30, | Percent Change | |||||||
2017 | 2016 | |||||||
Operating Statistics (unaudited) (A): | ||||||||
Average aircraft | 101.9 | 84.1 | 21.2 | % | ||||
Aircraft at end of period | 107 | 89 | 20.2 | % | ||||
Average daily aircraft utilization (hours) | 11.7 | 12.6 | (7.1 | )% | ||||
Average stage length (miles) | 991 | 978 | 1.3 | % | ||||
Block hours | 326,033 | 290,529 | 12.2 | % | ||||
Departures | 123,492 | 111,495 | 10.8 | % | ||||
Passenger flight segments (PFSs) (thousands) | 18,083 | 16,268 | 11.2 | % | ||||
Revenue passenger miles (RPMs) (thousands) | 18,285,588 | 16,219,093 | 12.7 | % | ||||
Available seat miles (ASMs) (thousands) | 21,851,789 | 18,909,627 | 15.6 | % | ||||
Load factor (%) | 83.7 | % | 85.8 | % | (2.1) pts | |||
Average ticket revenue per passenger flight segment ($) | 56.84 | 55.32 | 2.7 | % | ||||
Average non-ticket revenue per passenger flight segment ($) | 52.69 | 51.85 | 1.6 | % | ||||
Total revenue per passenger flight segment ($) | 109.53 | 107.17 | 2.2 | % | ||||
Average yield (cents) | 10.83 | 10.75 | 0.7 | % | ||||
TRASM (cents) | 9.06 | 9.22 | (1.7 | )% | ||||
CASM (cents) | 7.71 | 7.33 | 5.2 | % | ||||
Adjusted CASM (cents) | 7.64 | 7.15 | 6.9 | % | ||||
Adjusted CASM ex-fuel (cents) | 5.62 | 5.45 | 3.1 | % | ||||
Fuel gallons consumed (thousands) | 254,871 | 225,851 | 12.8 | % | ||||
Average economic fuel cost per gallon ($) | 1.73 | 1.42 | 21.8 | % |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | |||||||||
(in thousands, except per gallon amounts) | Percent Change | |||||||||
Fuel gallons consumed | 90,274 | 78,288 | 15.3 | % | ||||||
Into-plane fuel cost per gallon | 1.75 | 1.56 | 12.2 | % | ||||||
Into-plane fuel expense | $ | 158,300 | $ | 121,844 | 29.9 | % | ||||
Realized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Unrealized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Aircraft fuel expense (per statement of operations) | $ | 158,300 | $ | 121,844 | 29.9 | % |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | |||||||||
(in thousands, except per gallon amounts) | Percent Change | |||||||||
Into-plane fuel expense | $ | 158,300 | $ | 121,844 | 29.9 | % | ||||
Realized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Economic fuel expense | $ | 158,300 | $ | 121,844 | 29.9 | % | ||||
Fuel gallons consumed | 90,274 | 78,288 | 15.3 | % | ||||||
Economic fuel cost per gallon | $ | 1.75 | $ | 1.56 | 12.2 | % |
Three Months Ended September 30, | Dollar Change | Percent Change | Cost per ASM | Per-ASM Change | Percent Change | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||
(in thousands) | (in cents) | |||||||||||||||||||||||||
Salaries, wages, and benefits | $ | 134,114 | $ | 120,190 | $ | 13,924 | 11.6 | % | 1.75 | 1.85 | (0.10 | ) | (5.4 | )% | ||||||||||||
Aircraft fuel | 158,300 | 121,844 | 36,456 | 29.9 | % | 2.06 | 1.87 | 0.19 | 10.2 | % | ||||||||||||||||
Aircraft rent | 53,396 | 49,367 | 4,029 | 8.2 | % | 0.70 | 0.76 | (0.06 | ) | (7.9 | )% | |||||||||||||||
Landing fees and other rents | 48,498 | 39,345 | 9,153 | 23.3 | % | 0.63 | 0.60 | 0.03 | 5.0 | % | ||||||||||||||||
Depreciation and amortization | 36,840 | 25,304 | 11,536 | 45.6 | % | 0.48 | 0.39 | 0.09 | 23.1 | % | ||||||||||||||||
Maintenance, materials and repairs | 26,176 | 30,443 | (4,267 | ) | (14.0 | )% | 0.34 | 0.47 | (0.13 | ) | (27.7 | )% | ||||||||||||||
Distribution | 29,469 | 25,565 | 3,904 | 15.3 | % | 0.38 | 0.39 | (0.01 | ) | (2.6 | )% | |||||||||||||||
Special charges | 7,853 | 7,355 | 498 | NM | 0.10 | 0.11 | (0.01 | ) | NM | |||||||||||||||||
Loss on disposal of assets | 516 | 423 | 93 | NM | 0.01 | 0.01 | — | NM | ||||||||||||||||||
Other operating | 87,965 | 66,277 | 21,688 | 32.7 | % | 1.15 | 1.02 | 0.13 | 12.7 | % | ||||||||||||||||
Total operating expenses | $ | 583,127 | $ | 486,113 | $ | 97,014 | 20.0 | % | 7.59 | 7.47 | 0.12 | 1.6 | % | |||||||||||||
Adjusted CASM (1) | 7.48 | 7.35 | 0.13 | 1.8 | % | |||||||||||||||||||||
Adjusted CASM ex-fuel (2) | 5.42 | 5.48 | (0.06 | ) | (1.1 | )% |
(1) | Reconciliation of CASM to Adjusted CASM: |
Three Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
(in millions) | Per ASM | (in millions) | Per ASM | ||||||||||
CASM (cents) | 7.59 | 7.47 | |||||||||||
Unrealized losses (gains) related to fuel derivative contracts, net | $ | — | — | $ | — | — | |||||||
Loss on disposal of assets | 0.5 | 0.01 | 0.4 | 0.01 | |||||||||
Special charges | 7.9 | 0.10 | 7.4 | 0.11 | |||||||||
Adjusted CASM (cents) | 7.48 | 7.35 |
(2) | Excludes aircraft fuel expense, loss on disposal of assets and special charges. |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | |||||||||
(in thousands, except per gallon amounts) | Percent Change | |||||||||
Fuel gallons consumed | 254,871 | 225,851 | 12.8 | % | ||||||
Into-plane fuel cost per gallon | $ | 1.73 | $ | 1.42 | 21.8 | % | ||||
Into-plane fuel expense | $ | 440,376 | $ | 321,018 | 37.2 | % | ||||
Realized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Unrealized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Aircraft fuel expense (per Statement of Operations) | $ | 440,376 | $ | 321,018 | 37.2 | % |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | |||||||||
(in thousands, except per gallon amounts) | Percent Change | |||||||||
Into-plane fuel expense | $ | 440,376 | $ | 321,018 | 37.2 | % | ||||
Realized losses (gains) related to fuel derivative contracts, net | — | — | NM | |||||||
Economic fuel expense | $ | 440,376 | $ | 321,018 | 37.2 | % | ||||
Fuel gallons consumed | 254,871 | 225,851 | 12.8 | % | ||||||
Economic fuel cost per gallon | $ | 1.73 | $ | 1.42 | 21.8 | % |
Nine Months Ended September 30, | Dollar Change | Percent Change | Cost per ASM | Per-ASM Change | Percent Change | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||
(in thousands) | (in cents) | |||||||||||||||||||||||||
Salaries, wages, and benefits | $ | 391,144 | $ | 349,530 | $ | 41,614 | 11.9 | % | 1.79 | 1.85 | (0.06 | ) | (3.2 | )% | ||||||||||||
Aircraft fuel | 440,376 | 321,018 | 119,358 | 37.2 | % | 2.02 | 1.70 | 0.32 | 18.8 | % | ||||||||||||||||
Aircraft rent | 163,032 | 151,433 | 11,599 | 7.7 | % | 0.75 | 0.80 | (0.05 | ) | (6.3 | )% | |||||||||||||||
Landing fees and other rents | 134,538 | 114,096 | 20,442 | 17.9 | % | 0.62 | 0.60 | 0.02 | 3.3 | % | ||||||||||||||||
Depreciation and amortization | 103,680 | 73,370 | 30,310 | 41.3 | % | 0.47 | 0.39 | 0.08 | 20.5 | % | ||||||||||||||||
Maintenance, materials and repairs | 81,473 | 72,010 | 9,463 | 13.1 | % | 0.37 | 0.38 | (0.01 | ) | (2.6 | )% | |||||||||||||||
Distribution | 85,875 | 73,190 | 12,685 | 17.3 | % | 0.39 | 0.39 | — | — | % | ||||||||||||||||
Special charges (credits) | 12,629 | 31,609 | (18,980 | ) | NM | 0.06 | 0.17 | (0.11 | ) | NM | ||||||||||||||||
Loss on disposal of assets | 3,114 | 1,166 | 1,948 | NM | 0.01 | 0.01 | — | NM | ||||||||||||||||||
Other operating | 268,553 | 197,833 | 70,720 | 35.7 | % | 1.23 | 1.05 | 0.18 | 17.1 | % | ||||||||||||||||
Total operating expenses | $ | 1,684,414 | $ | 1,385,255 | $ | 299,159 | 21.6 | % | 7.71 | 7.33 | 0.38 | 5.2 | % | |||||||||||||
Adjusted CASM (1) | 7.64 | 7.15 | 0.49 | 6.9 | % | |||||||||||||||||||||
Adjusted CASM ex-fuel (2) | 5.62 | 5.45 | 0.17 | 3.1 | % |
(1) | Reconciliation of CASM to Adjusted CASM: |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
(in millions) | Per ASM | (in millions) | Per ASM | ||||||||||
CASM (cents) | 7.71 | 7.33 | |||||||||||
Unrealized losses (gains) related to fuel derivative contracts, net | $ | — | — | $ | — | — | |||||||
Loss on disposal of assets | 3.1 | 0.01 | 1.2 | 0.01 | |||||||||
Special charges | 12.6 | 0.06 | 31.6 | 0.17 | |||||||||
Adjusted CASM (cents) | 7.64 | 7.15 |
(2) | Excludes aircraft fuel expense, loss on disposal of assets and special charges and credits. |
remainder of 2017 | 2018 - 2019 | 2020 - 2021 | 2022 and beyond | Total | ||||||||||||||||
Long-term debt (1) | $ | 39 | $ | 216 | $ | 214 | $ | 886 | $ | 1,355 | ||||||||||
Interest commitments (2) | 20 | 101 | 83 | 142 | 346 | |||||||||||||||
Capital and operating lease obligations | 66 | 475 | 390 | 643 | 1,574 | |||||||||||||||
Flight equipment purchase obligations | 228 | 1,302 | 1,605 | 25 | 3,160 | |||||||||||||||
Other (3) | 2 | 7 | 2 | — | 11 | |||||||||||||||
Total future payments on contractual obligations | $ | 355 | $ | 2,101 | $ | 2,294 | $ | 1,696 | $ | 6,446 |
Airbus | |||||||||
A320ceo | A320neo | A321ceo | Total | ||||||
remainder of 2017 | 2 | 4 | 6 | ||||||
2018 | 5 | 5 | 10 | ||||||
2019 | 1 | 14 | 15 | ||||||
2020 | 16 | 16 | |||||||
2021 | 18 | 18 | |||||||
8 | 48 | 9 | 65 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ISSUER PURCHASES OF EQUITY SECURITIES | ||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs | ||||||||||
July 1-31, 2017 | — | $ | — | — | $ | — | ||||||||
August 1-31, 2017 | 552 | $ | 37.74 | — | $ | — | ||||||||
September 1-30, 2017 | — | $ | — | — | $ | — | ||||||||
Total | 552 | $ | 37.74 | — |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit Number | Description of Exhibits | |
10.1+ | ||
12.1 | ||
31.1 | ||
31.2 | ||
32.1* | ||
32.2* | ||
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
+ | Indicates a management contract or compensatory plan or arrangement. |
* | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise specifically stated in such filing. |
SPIRIT AIRLINES, INC. | ||
Date: October 26, 2017 | By: | /s/ Edward M. Christie |
Edward M. Christie | ||
Executive Vice President and Chief Financial Officer |
Nine Months Ended September 30, | Year Ended December 31, | ||||||||||||||||||||||||||
2017 | 2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||
Fixed Charges (1) | |||||||||||||||||||||||||||
Interest expense | $ | 37.4 | $ | 27.3 | $ | 38.2 | $ | 19.2 | $ | 2.7 | $ | 0.2 | $ | 1.4 | |||||||||||||
Amortization of debt issuance costs | 3.9 | 2.3 | 3.4 | 1.2 | — | — | — | ||||||||||||||||||||
Portion of rental expense representative of interest | 34.0 | 39.4 | 52.6 | 55.7 | 64.8 | 64.3 | 60.0 | ||||||||||||||||||||
Total fixed charges | $ | 75.3 | $ | 69.0 | $ | 94.2 | $ | 76.1 | $ | 67.5 | $ | 64.5 | $ | 61.4 | |||||||||||||
Earnings (2) | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 270.7 | $ | 341.8 | $ | 419.5 | $ | 502.4 | $ | 353.0 | $ | 282.4 | $ | 174.6 | |||||||||||||
Fixed charges per above | 75.3 | 69.0 | 94.2 | 76.1 | 67.5 | 64.5 | 61.4 | ||||||||||||||||||||
Capitalized interest | (10.1 | ) | (9.2 | ) | (12.7 | ) | (11.6 | ) | (2.7 | ) | (0.2 | ) | (1.4 | ) | |||||||||||||
Total earnings as adjusted | $ | 335.9 | $ | 401.6 | $ | 501.0 | $ | 566.9 | $ | 417.8 | $ | 346.7 | $ | 234.6 | |||||||||||||
Deficiency of earnings to fixed charges | |||||||||||||||||||||||||||
Ratio of earnings to fixed charges | 4.5x | 5.8x | 5.3x | 7.4x | 6.2x | 5.4x | 3.8x |
Date: October 26, 2017 | /s/ Robert L. Fornaro |
Robert L. Fornaro | |
President and Chief Executive Officer |
Date: October 26, 2017 | /s/ Edward M. Christie |
Edward M. Christie | |
Executive Vice President and | |
Chief Financial Officer |
(i.) | the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2017 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii.) | the information contained in the Report fairly present, in all material respects, the financial condition and results of operations of the Company. |
Date: October 26, 2017 | /s/ Robert L. Fornaro |
Robert L. Fornaro | |
President and Chief Executive Officer |
(i.) | the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2017 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii.) | the information contained in the Report fairly present, in all material respects, the financial condition and results of operations of the Company. |
Date: October 26, 2017 | /s/ Edward M. Christie |
Edward M. Christie | |
Executive Vice President and | |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 19, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | SPIRIT AIRLINES, INC. | |
Entity Central Index Key | 0001498710 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 69,373,154 |
Condensed Statements Of Operations (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Operating revenues: | ||||
Passenger | $ 356,207 | $ 331,004 | $ 1,027,891 | $ 900,031 |
Non-ticket | 331,024 | 290,325 | 952,768 | 843,574 |
Total operating revenues | 687,231 | 621,329 | 1,980,659 | 1,743,605 |
Operating expenses: | ||||
Salaries, wages and benefits | 134,114 | 120,190 | 391,144 | 349,530 |
Aircraft fuel | 158,300 | 121,844 | 440,376 | 321,018 |
Aircraft rent | 53,396 | 49,367 | 163,032 | 151,433 |
Landing fees and other rents | 48,498 | 39,345 | 134,538 | 114,096 |
Depreciation and amortization | 36,840 | 25,304 | 103,680 | 73,370 |
Maintenance, materials and repairs | 26,176 | 30,443 | 81,473 | 72,010 |
Distribution | 29,469 | 25,565 | 85,875 | 73,190 |
Special charges | 7,853 | 7,355 | 12,629 | 31,609 |
Loss on disposal of assets | 516 | 423 | 3,114 | 1,166 |
Other operating | 87,965 | 66,277 | 268,553 | 197,833 |
Total operating expenses | 583,127 | 486,113 | 1,684,414 | 1,385,255 |
Operating income | 104,104 | 135,216 | 296,245 | 358,350 |
Other (income) expense: | ||||
Interest expense | 15,018 | 11,362 | 41,237 | 29,588 |
Capitalized interest | (3,203) | (3,067) | (10,125) | (9,163) |
Interest income | (2,605) | (1,222) | (5,746) | (4,235) |
Other expense | 114 | 180 | 221 | 407 |
Total other (income) expense | 9,324 | 7,253 | 25,587 | 16,597 |
Income before income taxes | 94,780 | 127,963 | 270,658 | 341,753 |
Provision for income taxes | 34,590 | 46,581 | 100,390 | 125,367 |
Net income | $ 60,190 | $ 81,382 | $ 170,268 | $ 216,386 |
Basic earnings per share (in dollars per share) | $ 0.87 | $ 1.17 | $ 2.45 | $ 3.06 |
Diluted earnings per share (in dollars per share) | $ 0.87 | $ 1.17 | $ 2.45 | $ 3.05 |
Condensed Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 60,190 | $ 81,382 | $ 170,268 | $ 216,386 |
Unrealized gain (loss) on short-term investment securities, net of deferred taxes of $7, $3, ($6) and $3 | 13 | 4 | (11) | 4 |
Interest rate derivative losses reclassified into earnings, net of taxes of $31, $32, $92 and $97 | 53 | 56 | 160 | 170 |
Other comprehensive income (loss) | 66 | 60 | 149 | 174 |
Comprehensive income | $ 60,256 | $ 81,442 | $ 170,417 | $ 216,560 |
Condensed Statements of Comprehensive Income (Parenthetical) (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax effect of the unrealized gain (loss) on short-term investment securities | $ 7 | $ 3 | $ (6) | $ 3 |
Loss reclassified from AOCI into earnings, tax | $ 31 | $ 32 | $ 92 | $ 97 |
Basis of Presentation |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements include the accounts of Spirit Airlines, Inc. (the Company). These unaudited condensed financial statements reflect all normal recurring adjustments which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements of the Company and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on February 13, 2017. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect both the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The interim results reflected in the unaudited condensed financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year. Certain prior period amounts have been reclassified to conform to the current year's presentation.
|
Recent Accounting Developments |
9 Months Ended |
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Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Developments | Recent Accounting Developments Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2014-09, (ASU 2014-09) "Revenue from Contracts with Customers." The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new guidance is effective for the Company in the first quarter of 2018. Entities have the option to use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company currently anticipates utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented, and plans to adopt the standard as of January 1, 2018. While the Company is still evaluating the impact, it currently believes the most significant impact of this ASU will be the elimination of the incremental cost method for frequent flier program accounting, which will require the Company to re-value and record a liability associated with customer flight miles earned as part of the Company’s frequent flier program with a relative fair value approach. While our evaluation is ongoing, the Company currently estimates that applying a relative fair value would increase its air traffic liability by approximately $10 million at the date of adoption. The Company also expects the classification and timing of recognition of certain ancillary fees to be impacted by the adoption of ASU 2014-09. While the Company believes the adoption will not have a significant impact on earnings, the classification of certain revenues, such as bags, seats and other travel-related fees may be deemed part of the single performance obligation of providing passenger transportation. The Company expects that these revenues currently classified as non-ticket revenue, approximately $1 billion annually, will be reclassified to passenger revenue after adoption. Financial Instruments In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10).” ASU 2016-01 makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for the Company for interim and annual periods beginning January 1, 2018 and is not expected to have a material impact on the Company’s financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the condensed balance sheet and is effective for the Company in the first quarter of 2019, with early adoption permitted. The Company is currently evaluating the new guidance and believes adoption of this standard will have a significant impact on its condensed balance sheets although adoption is not expected to significantly change the recognition, measurement or presentation of lease expenses within the statements of operations and cash flows. See Note 8, Commitments and Contingencies for information regarding the Company's undiscounted future lease payments and the timing of those payments. Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. The Company adopted this guidance on January 1, 2017. As a result, excess income tax benefits and deficiencies related to share-based compensation are now included within income tax expense rather than additional paid in capital. For the nine months ended September 30, 2017, $0.6 million of income tax deficiency related to share-based compensation was included within income tax expense on the Company's statements of operations. Additionally, excess income tax benefits and deficiencies for share-based payments are now included in net operating cash flows rather than net financing cash flows. The changes have been applied prospectively in accordance with the guidance and prior periods have not been adjusted. Accounting for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." The standard requires the use of an "expected loss" model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This standard is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2020, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows." The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This standard is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2018, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements.
|
Special Charges |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Special Charges and Credits [Abstract] | |
Special Charges | Special Charges During the three months ended September 30, 2017, the Company purchased one aircraft which was previously financed under an operating lease agreement. The purchase price of the aircraft was $20.0 million, comprised of a cash payment of $12.6 million and the non-cash application of maintenance and security deposits held by the previous lessor of $7.4 million. The Company estimated the fair value of the aircraft to be $11.9 million and has recorded the 1 purchased aircraft at fair value within flight equipment on the condensed balance sheets. The Company determined the valuation of the aircraft based on a third-party appraisal considering the condition of the aircraft (a Level 3 measurement). The Company recognized $7.9 million as a cost of terminating the lease within special charges on the condensed statement of operations, made up of the excess of the purchase price paid over the fair value of the aircraft, less other non-cash items of $0.2 million. During the three months ended September 30, 2016, the Company purchased three A319 aircraft which were formerly financed under operating lease agreements. The purchase price for the 3 aircraft was $58.8 million, comprised of a cash payment of $58.1 million and the application of security deposits held by the previous lessor of $0.7 million. The Company estimated the fair value of the aircraft to be $38.2 million and has recorded the 3 purchased aircraft within flight equipment on the condensed balance sheets. The Company determined the valuation of the aircraft based on a third-party appraisal considering the condition of each aircraft (a Level 3 measurement). The Company recognized $7.4 million as a cost of terminating the leases within special charges on the condensed statement of operations, made up of the excess of the purchase price paid over the fair value of the aircraft, less previously expensed supplemental rent and other non-cash items of $13.2 million. During the nine months ended September 30, 2017, the Company purchased one engine and one aircraft which were previously financed under operating lease agreements. The purchase price of the 1 engine and 1 aircraft was $8.1 million and $20.0 million, respectively, comprised of a cash payment of $3.8 million and $12.6 million, respectively, and the non-cash application of maintenance and security deposits held by the previous lessor of $4.3 million and $7.4 million, respectively. The Company estimated the fair value of the engine and aircraft to be $3.1 million and $11.9 million, respectively, and has recorded the 1 purchased engine and 1 aircraft at fair value within flight equipment on the condensed balance sheets. The Company determined the valuation of the engine and aircraft based on a third-party appraisal considering the condition of the engine and aircraft (a Level 3 measurement). The Company recognized $4.8 million and $7.9 million as a cost of terminating the lease within special charges on the condensed statement of operations, respectively, made up of the excess of the purchase price paid over the fair value of the engine and the aircraft, less other non-cash items of $0.2 million and $0.2 million, respectively. |
Earnings per Share |
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Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per common share:
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Short-term Investment Securities |
9 Months Ended |
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Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | Short-term Investment Securities The Company's short-term investment securities consist of available-for-sale asset-backed securities with contractual maturities of twelve months or less. These securities are stated at fair value within current assets on the Company's condensed balance sheets. Realized gains and losses on sales of investments, if any, are reflected in non-operating income (expense) in the condensed statements of operations. Unrealized gains and losses on investment securities are reflected as a component of accumulated other comprehensive income (AOCI). |
Accrued Liabilities |
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Accrued Liabilities | Accrued Liabilities Other current liabilities as of September 30, 2017 and December 31, 2016 consist of the following:
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Financial Instruments and Risk Management |
9 Months Ended |
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Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Risk Management | Financial Instruments and Risk Management As part of the Company’s risk management program, the Company, from time to time, may use a variety of financial instruments to reduce its exposure to fluctuations in the price of jet fuel and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes. The Company is exposed to credit losses in the event of nonperformance by counterparties to these financial instruments. The Company periodically reviews and seeks to mitigate exposure to the financial deterioration and nonperformance of any counterparty by monitoring the absolute exposure levels, each counterparty's credit ratings and the historical performance of counterparties relating to hedge transactions. The credit exposure related to these financial instruments is limited to the fair value of contracts in a net receivable position at the reporting date. The Company also maintains security agreements that require the Company to post collateral if the value of selected instruments falls below specified mark-to-market thresholds. As of September 30, 2017, the Company did not hold any derivatives with requirements to post collateral. The Company records financial derivative instruments at fair value, which includes an evaluation of each counterparty's credit risk. Fuel Derivative Instruments From time to time, the Company may enter into fuel derivative contracts in order to mitigate the risk of future volatility in fuel prices. Historically, the Company's fuel derivative contracts have generally consisted of United States Gulf Coast jet fuel swaps (jet fuel swaps) and United States Gulf Coast jet fuel options (jet fuel options). Both jet fuel swaps and jet fuel options have been used at times to protect the refining price risk between the price of crude oil and the price of refined jet fuel, and to manage the risk of increasing fuel prices. Fair value of such instruments is determined using standard option valuation models. The Company accounts for its fuel derivative contracts at fair value and recognizes them in the condensed balance sheet in prepaid expenses and other current assets or other current liabilities. The Company did not enter into any fuel derivative instruments during the nine months ended September 30, 2017 and 2016 and did not have any outstanding fuel derivatives as of September 30, 2017 and December 31, 2016. Historically, the Company has not elected hedge accounting on any fuel derivative instruments entered into and, as a result, changes in the fair value of fuel derivative contracts, if any, were recorded in aircraft fuel expense. Interest Rate Swaps During 2015, the Company settled six forward interest rate swaps that were designed to fix the benchmark interest rate component of interest payments on the debt related to three Airbus A321 aircraft, which the Company took delivery of during the third quarter of 2015. These instruments limited the Company's exposure to changes in the benchmark interest rate in the period from the trade date through the date of maturity. The interest rate swaps were designated as cash flow hedges. The Company accounts for interest rate swaps at fair value and recognizes them in the condensed balance sheet in prepaid expenses and other current assets or other current liabilities with changes in fair value recorded within accumulated other comprehensive income (AOCI). As of September 30, 2017 and December 31, 2016, the Company did not have any outstanding interest rate swaps. Realized gains and losses from cash flow hedges are recorded in the statement of cash flows as a component of cash flows from operating activities. Subsequent to the issuance of each debt instrument, amounts remaining in AOCI are amortized over the life of the fixed-rate debt instrument. During the three and nine months ended September 30, 2017 and 2016, there were no unrealized gains or losses recorded within AOCI related to these instruments as they settled in 2015. For the three and nine months ended September 30, 2017, the Company reclassified interest rate swap losses of $53 thousand and $160 thousand, net of tax of $31 thousand and $92 thousand, respectively, into earnings. For the three and nine months ended September 30, 2016, the Company reclassified interest rate swap losses of $56 thousand and $170 thousand, net of tax of $32 thousand and $97 thousand, respectively, into earnings. As of September 30, 2017 and December 31, 2016, $1.2 million and $1.3 million, net of tax, respectively, remained in AOCI, related to these instruments.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Aircraft-Related Commitments and Financing Arrangements The Company’s contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers. During the first quarter of 2017, the Company negotiated revisions to its A320 aircraft order. The Company originally had four A320neo aircraft scheduled for delivery in 2018 of which two were converted to A320ceo aircraft, to be delivered in 2017, and the remaining two are deferred until 2019. As of September 30, 2017, the Company's aircraft orders consisted of the following:
The Company also has four spare engine orders for V2500 SelectTwo engines with International Aero Engines (IAE) and nine spare engine orders for PurePower PW1100G-JM engines with Pratt & Whitney. Spare engines are scheduled for delivery from 2018 through 2023. Purchase commitments for these aircraft and spare engines, including estimated amounts for contractual price escalations and pre-delivery payments, are expected to be $227.8 million for the remainder of 2017, $528.4 million in 2018, $773.7 million in 2019, $820.5 million in 2020, $784.8 million in 2021, and $24.6 million in 2022 and beyond. As of September 30, 2017, the Company had secured debt financing commitments of $160.0 million for 4 aircraft, scheduled for delivery in the remainder of 2017, and did not have financing commitments in place for the remaining 61 Airbus aircraft currently on firm order, which are scheduled for delivery in 2017 through 2021. Interest commitments related to the secured debt financing of 40 delivered aircraft as of September 30, 2017 are $19.5 million for the remainder of 2017, $52.9 million in 2018, $48.2 million in 2019, $43.6 million in 2020, $39.0 million in 2021, and $141.5 million in 2022 and beyond. For principal commitments related to these financed aircraft, refer to Note 10, Debt and Other Obligations. As of September 30, 2017, principal and interest commitments related to the Company's future secured debt financing of 4 undelivered aircraft under bank debt are zero for the remainder of 2017, $16.5 million in 2018, $16.4 million in 2019, $17.3 million in 2020, $16.2 million in 2021, and $137.2 million in 2022 and beyond. As of September 30, 2017, the Company had a fleet consisting of 107 A320 family aircraft. During the nine months ended September 30, 2017, the Company took delivery of eleven aircraft financed under secured debt arrangements, two aircraft financed under operating leases, purchased one previously leased aircraft and returned one aircraft to its lessor. In addition, the Company took delivery of two purchased engines and one engine financed under an operating lease, and purchased one previously leased engine. For further discussion on the previously leased aircraft and engine, refer to Note 3, Special Charges. New purchased aircraft are capitalized within flight equipment with depreciable lives of 25 years and estimated residual values of 10%. As of September 30, 2017, the Company had 59 aircraft and 11 spare engines financed under operating leases with lease term expiration dates ranging from 2017 to 2029. The Company entered into sale and leaseback transactions with third-party aircraft lessors for the majority of these aircraft and engine leases. Deferred losses resulting from these sale and leaseback transactions are included in other long-term assets on the accompanying condensed balance sheets. Deferred losses are recognized as an increase to rent expense on a straight-line basis over the term of the respective operating leases. Deferred gains are included in deferred credits and other long-term liabilities on the accompanying condensed balance sheets. Deferred gains are recognized as a decrease to rent expense on a straight-line basis over the term of the respective operating leases. Under the terms of the lease agreements, the Company will continue to operate and maintain the aircraft. Payments under the majority of the lease agreements are fixed for the term of the lease. The lease agreements contain standard termination events, including termination upon a breach of the Company's obligations to make rental payments and upon any other material breach of the Company's obligations under the leases, and standard maintenance and return condition provisions. These return provisions are evaluated at inception of the lease and throughout the lease terms and are accounted for as supplemental rent expense when it is probable that such amounts will be incurred. Upon a termination of the lease due to a breach by the Company, the Company would be liable for standard contractual damages, possibly including damages suffered by the lessor in connection with remarketing the aircraft or while the aircraft is not leased to another party. In July 2015, the Company executed an upgrade service agreement with Airbus Americas Customer Services Inc. (Airbus) to reconfigure the seating and increase capacity in 40 of the Company’s A320ceos from 178 to 182 seats (reconfiguration). The reconfiguration of the aircraft commenced in the first quarter of 2016 and is expected to be completed in the fourth quarter of 2017 for a remaining committed cost of $0.6 million, as of September 30, 2017. These amounts will be capitalized within flight equipment on the condensed balance sheets. In September 2015, the Company executed a lease agreement with Wayne County Airport Authority (the Authority), which owns and operates Detroit Metropolitan Wayne County Airport (DTW). Under the lease agreement, the Company leases a 10-acre site, adjacent to the airfield at DTW, in order to construct, operate and maintain an approximately 126,000-square-foot hangar facility (the project). The project allows for the development of a maintenance hangar in order to fulfill the requirements of the Company's growing fleet and will reduce dependence on third-party facilities and contract maintenance. The lease agreement has a 30-year term with two 10-year extension options. Upon termination of the lease, title of the project, which will be fully depreciated, will automatically pass to the Authority. The Company completed the project during the first quarter of 2017 and has no remaining commitments related to this project as of September 30, 2017. Future minimum lease payments under capital leases and noncancellable operating leases with initial or remaining terms in excess of one year at September 30, 2017 were as follows:
The majority of the Company's capital lease obligations relate to the lease of computer equipment used by the Company's flight crew. Payments under this lease agreement are fixed for the 3-year term of the lease which began in the second quarter of 2017. Aircraft rent expense consists of monthly lease rents for aircraft and spare engines under the terms of the Company's aircraft and spare engine lease agreements recognized on a straight-line basis. Aircraft rent expense also includes supplemental rent. Supplemental rent is made up of maintenance reserves paid or expected to be paid to aircraft lessors in advance of the performance of major maintenance activities that are not probable of being reimbursed, and probable return condition obligations. The Company expects supplemental rent to increase as individual aircraft lease agreements approach their respective termination dates and the Company begins to accrue the estimated cost of return conditions for the corresponding aircraft. Some of the Company’s master lease agreements provide that the Company pay maintenance reserves to aircraft lessors to be held as collateral in advance of the Company’s required performance of major maintenance activities. Substantially all of these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles, while some maintenance reserve payments are fixed contractual amounts. Fixed maintenance reserve payments for these aircraft and related flight equipment, including estimated amounts for contractual price escalations, are expected to be $1.9 million for the remainder of 2017, $6.9 million in 2018, $5.7 million in 2019, $5.4 million in 2020, $5.5 million in 2021, and $17.7 million in 2022 and beyond. These lease agreements provide that maintenance reserves are reimbursable to the Company upon completion of the maintenance event in an amount equal to either (1) the amount of the maintenance reserves held by the lessor associated with the specific maintenance event or (2) the qualifying costs related to the specific maintenance event. Some of the master lease agreements do not require that the Company pay maintenance reserves as long as the Company's cash balance does not fall below a certain level. As of September 30, 2017, the Company was in full compliance with those requirements and does not anticipate having to pay reserves related to these master leases in the future. The Company is contractually obligated to pay the following minimum guaranteed payments for its reservation system, new airport kiosks and other miscellaneous subscriptions and services as of September 30, 2017: $1.8 million for the remainder of 2017, $5.7 million in 2018, $1.6 million in 2019, $1.0 million in 2020, $0.5 million in 2021, and $0.2 million thereafter. The Company's current agreement with its reservation system provider expires in 2018. Litigation The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. The Company believes the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on its financial position, liquidity or results of operations. Credit Card Processing Arrangements The Company has agreements with organizations that process credit card transactions arising from the purchase of air travel, baggage charges, and other ancillary services by customers. As is standard in the airline industry, the Company's contractual arrangements with credit card processors permit them, under certain circumstances, to retain a holdback or other collateral, which the Company records as restricted cash, when future air travel and other future services are purchased via credit card transactions. The required holdback is the percentage of the Company's overall credit card sales its credit card processors hold to cover refunds to customers if the Company fails to fulfill its flight obligations. The Company's credit card processors do not require the Company to maintain cash collateral if the Company satisfies certain liquidity and other financial covenants. Failure to meet these covenants would provide the processors the right to place a holdback resulting in a commensurate reduction of unrestricted cash. As of September 30, 2017 and December 31, 2016, the Company was in compliance with such liquidity and other financial covenants in its credit card processing agreements and the processors were holding back no remittances. The maximum potential exposure to cash holdbacks by the Company's credit card processors, based upon advance ticket sales and $9 Fare Club memberships as of September 30, 2017 and December 31, 2016, was $322.3 million and $234.6 million, respectively. Employees The Company has four union-represented employee groups that together represented approximately 75% of all employees at September 30, 2017. The table below sets forth the Company's employee groups and status of the collective bargaining agreements as of September 30, 2017.
In August 2015, the Company's collective bargaining agreement with its pilots, represented by ALPA, became amendable. In June 2016, ALPA requested the services of the National Mediation Board (NMB) to facilitate negotiations for an amended agreement and the Company joined ALPA in the request. The NMB has assigned mediators and the parties continue to work toward an amended agreement with the guidance of the mediator. Under the Railway Labor Act (RLA), the parties' current agreement remains in effect until an amended agreement is reached. In March 2016, under the supervision of the NMB, the Company and AFA-CWA reached a tentative agreement for a five-year contract with the Company's flight attendants. In May 2016, the flight attendants voted to approve the new five-year contract with the Company. In connection with this agreement, the Company paid a $9.6 million ratification incentive of which $8.4 million was recorded within salaries, wages and benefits in the condensed statement of operations for the nine months ended September 30, 2016. The Company is self-insured for health care claims, up to a stop loss amount for eligible participating employees and qualified dependent medical claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company has accrued $5.5 million and $5.7 million in health care claims as of September 30, 2017 and December 31, 2016, respectively.
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Under ASC 820, Fair Value Measurements and Disclosures, disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of the Company’s financial assets and liabilities. Fuel Derivative Instruments From time to time, the Company may enter into fuel derivative contracts in order to mitigate the risk of future volatility in fuel prices. The Company’s fuel derivative contracts generally consist of jet fuel swaps and jet fuel options. These instruments are valued using energy and commodity market data, which is derived by combining raw inputs with quantitative models and processes to generate forward curves and volatilities. The Company utilizes the market approach to measure fair value for its fuel derivative instruments, if any. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company does not elect hedge accounting on its fuel derivative instruments. As a result, the Company records the fair value adjustment of its fuel derivatives in the accompanying statement of operations within aircraft fuel and on the condensed balance sheets within prepaid expenses and other current assets or other current liabilities, depending on whether the net fair value of the derivatives is in an asset or liability position as of the respective date. Fair values of the fuel derivative instruments are determined using standard option valuation models. The Company also considers counterparty risk and its own credit risk in its determination of all estimated fair values. The Company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement. The Company determines fair value of jet fuel options utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. The fair value of the Company's jet fuel swaps is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company categorizes these instruments as Level 2. Due to the fact that certain inputs utilized to determine the fair value of jet fuel options are unobservable (principally implied volatility), the Company categorizes these derivatives as Level 3. Implied volatility of a jet fuel option is the volatility of the price of the underlying commodity that is implied by the market price of the option based on an option pricing model. Thus, it is the volatility that when used in a particular pricing model yields a theoretical value for the option equal to the current market price of that option. Implied volatility, a forward-looking measure, differs from historical volatility because the latter is calculated from known past returns. At each balance sheet date, the Company substantiates and adjusts unobservable inputs. The Company routinely assesses the valuation model's sensitivity to changes in implied volatility. Based on the Company's assessment of the valuation model's sensitivity to changes in implied volatility, it concluded that holding other inputs constant, a significant increase (decrease) in implied volatility would result in a significantly higher (lower) fair value measurement for the Company's aircraft fuel derivatives. As of September 30, 2017 and December 31, 2016, the Company had no outstanding jet fuel derivatives. Long-Term Debt The estimated fair value of the Company's non-publicly held debt agreements has been determined to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 long-term debt. The estimated fair value of the Company's publicly held debt agreements has been determined to be Level 2, as the Company utilizes quoted market prices to estimate the fair value of its public long-term debt. The carrying amounts and estimated fair values of the Company's long-term debt at September 30, 2017 and December 31, 2016 were as follows:
Cash and Cash Equivalents Cash and cash equivalents at September 30, 2017 and December 31, 2016 are comprised of liquid money market funds and cash, and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions. Short-term Investment Securities Short-term investment securities at September 30, 2017 and December 31, 2016 are comprised of available-for-sale asset-backed securities with contractual maturities of twelve months or less and are categorized as Level 1 instruments, as the Company uses quoted market prices in active markets when determining the fair value of these securities. Assets and liabilities measured at gross fair value on a recurring basis are summarized below:
The Company had no transfers of assets or liabilities between any of the above levels during the nine months ended September 30, 2017. |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Other Obligations | Debt and Other Obligations As of September 30, 2017, the Company held non-public and public debt instruments. Long-term debt is comprised of the following:
During the three and nine months ended September 30, 2017, the Company made scheduled principal payments of $13.4 million and $63.4 million on its outstanding debt obligations, respectively. During the three and nine months ended September 30, 2016, the Company made scheduled principal payments of $10.0 million and $29.6 million, on its outstanding debt obligations, respectively. At September 30, 2017, long-term debt principal payments for the next five years and thereafter are as follows:
Interest Expense Interest expense related to long-term debt consisted of the following:
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of accounting | The accompanying unaudited condensed financial statements include the accounts of Spirit Airlines, Inc. (the Company). These unaudited condensed financial statements reflect all normal recurring adjustments which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements of the Company and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on February 13, 2017. |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect both the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. |
Recent Accounting Developments | Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2014-09, (ASU 2014-09) "Revenue from Contracts with Customers." The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new guidance is effective for the Company in the first quarter of 2018. Entities have the option to use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company currently anticipates utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented, and plans to adopt the standard as of January 1, 2018. While the Company is still evaluating the impact, it currently believes the most significant impact of this ASU will be the elimination of the incremental cost method for frequent flier program accounting, which will require the Company to re-value and record a liability associated with customer flight miles earned as part of the Company’s frequent flier program with a relative fair value approach. While our evaluation is ongoing, the Company currently estimates that applying a relative fair value would increase its air traffic liability by approximately $10 million at the date of adoption. The Company also expects the classification and timing of recognition of certain ancillary fees to be impacted by the adoption of ASU 2014-09. While the Company believes the adoption will not have a significant impact on earnings, the classification of certain revenues, such as bags, seats and other travel-related fees may be deemed part of the single performance obligation of providing passenger transportation. The Company expects that these revenues currently classified as non-ticket revenue, approximately $1 billion annually, will be reclassified to passenger revenue after adoption. Financial Instruments In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10).” ASU 2016-01 makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for the Company for interim and annual periods beginning January 1, 2018 and is not expected to have a material impact on the Company’s financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the condensed balance sheet and is effective for the Company in the first quarter of 2019, with early adoption permitted. The Company is currently evaluating the new guidance and believes adoption of this standard will have a significant impact on its condensed balance sheets although adoption is not expected to significantly change the recognition, measurement or presentation of lease expenses within the statements of operations and cash flows. See Note 8, Commitments and Contingencies for information regarding the Company's undiscounted future lease payments and the timing of those payments. Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. The Company adopted this guidance on January 1, 2017. As a result, excess income tax benefits and deficiencies related to share-based compensation are now included within income tax expense rather than additional paid in capital. For the nine months ended September 30, 2017, $0.6 million of income tax deficiency related to share-based compensation was included within income tax expense on the Company's statements of operations. Additionally, excess income tax benefits and deficiencies for share-based payments are now included in net operating cash flows rather than net financing cash flows. The changes have been applied prospectively in accordance with the guidance and prior periods have not been adjusted. Accounting for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." The standard requires the use of an "expected loss" model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This standard is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2020, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows." The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This standard is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2018, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements.
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Earnings per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted earnings per common share:
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Accrued Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities included in other current liabilities | Other current liabilities as of September 30, 2017 and December 31, 2016 consist of the following:
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Operating Aircraft Leases | As of September 30, 2017, the Company's aircraft orders consisted of the following:
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Future minimum lease payments under noncancelable operating leases | Future minimum lease payments under capital leases and noncancellable operating leases with initial or remaining terms in excess of one year at September 30, 2017 were as follows:
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Future minimum lease payments under capital leases | Future minimum lease payments under capital leases and noncancellable operating leases with initial or remaining terms in excess of one year at September 30, 2017 were as follows:
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Employee groups and status of the collective bargaining agreements | The table below sets forth the Company's employee groups and status of the collective bargaining agreements as of September 30, 2017.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amount and estimated fair value, long-term debt | The carrying amounts and estimated fair values of the Company's long-term debt at September 30, 2017 and December 31, 2016 were as follows:
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Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at gross fair value on a recurring basis are summarized below:
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Debt and Other Obligations (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt is comprised of the following:
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Schedule of Maturities of Long-term Debt | At September 30, 2017, long-term debt principal payments for the next five years and thereafter are as follows:
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Schedule of Interest Expense, Long-term Debt | Interest expense related to long-term debt consisted of the following:
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Recent Accounting Developments Recent Accounting Developments (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Adjustments for New Accounting Pronouncements [Line Items] | |
Income tax deficiency | $ 0.6 |
Accounting Standards Update 2014-09 [Member] | |
Adjustments for New Accounting Pronouncements [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Expected (Increase) Decrease in Customer Flight Miles Liability | 10.0 |
Expected increase to passenger revenue after adoption | $ 1,000.0 |
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Numerator | ||||
Net income | $ 60,190 | $ 81,382 | $ 170,268 | $ 216,386 |
Denominator | ||||
Weighted-average shares outstanding, basic (in shares) | 69,370 | 69,727 | 69,363 | 70,689 |
Effect of dilutive stock awards (in shares) | 88 | 81 | 174 | 143 |
Adjusted weighted-average shares outstanding, diluted (in shares) | 69,458 | 69,808 | 69,537 | 70,832 |
Net income per share | ||||
Basic earnings per common share (in dollars per share) | $ 0.87 | $ 1.17 | $ 2.45 | $ 3.06 |
Diluted earnings per common share (in dollars per share) | $ 0.87 | $ 1.17 | $ 2.45 | $ 3.05 |
Anti-dilutive weighted-average shares (in shares) | 124 | 122 | 76 | 87 |
Short-term Investment Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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Schedule of Available-for-sale Securities [Line Items] | |||||
Short-term investment securities | $ 100,732 | $ 100,732 | $ 100,155 | ||
Unrealized gain (loss), net of deferred taxes | 13 | $ 4 | (11) | $ 4 | |
Tax effect of the unrealized gain (loss) on short-term investment securities | 7 | $ 3 | (6) | $ 3 | |
Accumulated other comprehensive loss | 1,214 | $ 1,214 | 1,345 | ||
Available-for-sale Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Weighted-average fixed rate | 1.50% | ||||
Accumulated other comprehensive loss | $ 34 | $ 34 | $ 23 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Salaries and wages | $ 50,635 | $ 54,578 |
Airport obligations | 47,289 | 43,989 |
Federal excise and other passenger taxes and fees payable | 43,860 | 42,064 |
Aircraft maintenance | 41,781 | 30,233 |
Interest payable | 15,168 | 8,499 |
Fuel | 14,940 | 14,828 |
Aircraft and facility lease obligations | 11,678 | 10,378 |
Other | 23,781 | 21,442 |
Other current liabilities | $ 249,132 | $ 226,011 |
Financial Instruments and Risk Management - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
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Sep. 30, 2016
USD ($)
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Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2015
aircraft
derivative_instrument
|
Dec. 31, 2016
USD ($)
|
|
Derivative [Line Items] | ||||||
Interest rate derivative losses reclassified into earnings | $ 53 | $ 56 | $ 160 | $ 170 | ||
Loss reclassified from AOCI into earnings, tax | 31 | 32 | 92 | 97 | ||
Accumulated other comprehensive loss | 1,214 | 1,214 | $ 1,345 | |||
Airbus A321 [Member] | ||||||
Derivative [Line Items] | ||||||
Number of aircraft protected by interest rate derivatives schedule for delivery | aircraft | 3 | |||||
Interest Rate Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Number of interest rate derivatives settled | derivative_instrument | 6 | |||||
Accumulated other comprehensive loss | 1,200 | 1,200 | $ 1,300 | |||
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||||
Derivative [Line Items] | ||||||
Interest rate derivative losses reclassified into earnings | $ 53 | $ 56 | $ 160 | $ 170 |
Commitments and Contingencies - Schedule of Future Aircraft Operating Leases (Details) |
Sep. 30, 2017
aircraft
|
---|---|
Long-term Purchase Commitment [Line Items] | |
remainder of 2017 | 6 |
2018 | 10 |
2019 | 15 |
2020 | 16 |
2021 | 18 |
Total future aircraft to be received | 65 |
Airbus [Member] | A320 [Member] | |
Long-term Purchase Commitment [Line Items] | |
remainder of 2017 | 2 |
2018 | 5 |
2019 | 1 |
Total future aircraft to be received | 8 |
Airbus [Member] | A320NEO [Member] | |
Long-term Purchase Commitment [Line Items] | |
2019 | 14 |
2020 | 16 |
2021 | 18 |
Total future aircraft to be received | 48 |
Airbus [Member] | A321 [Member] | |
Long-term Purchase Commitment [Line Items] | |
remainder of 2017 | 4 |
2018 | 5 |
Total future aircraft to be received | 9 |
Commitments and Contingencies - Credit Card Processing Arrangements (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Restricted cash holdbacks | $ 0 | $ 0 |
Maximum Potential Exposure to Cash Holdbacks from Credit Card Processors | $ 322,300,000 | $ 234,600,000 |
Debt and Other Obligations - Future Maturities (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Remainder of 2017 | $ 39.0 |
2018 | 108.0 |
2019 | 107.5 |
2020 | 107.1 |
2021 | 106.9 |
2022 and beyond | 886.2 |
Total debt principal payments | $ 1,354.7 |
Debt and Other Obligations - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Debt Instrument [Line Items] | ||||
Commitment fees | $ 29 | $ 32 | $ 87 | $ 97 |
Amortization of debt discounts | 1,362 | 979 | 3,883 | 2,289 |
Total | 14,996 | 11,360 | 41,107 | 29,579 |
Senior Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, term loans | 4,564 | 4,917 | 13,854 | 14,929 |
Junior Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, term loans | 746 | 879 | 2,323 | 2,721 |
Fixed Rate Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, term loans | 2,811 | 0 | 4,555 | 0 |
Equipment Notes, Series A [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, term loans | 4,366 | 3,538 | 12,995 | 7,419 |
Equipment Notes, Series B [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, term loans | $ 1,118 | $ 1,015 | $ 3,410 | $ 2,124 |
Subsequent Event (Details) - Repurchase Agreements [Member] - Subsequent Event [Member] |
Oct. 25, 2017
$ / shares
shares
|
---|---|
Subsequent Event [Line Items] | |
Number of shares authorized (in shares) | shares | 100,000,000 |
Par value (in dollars per share) | $ / shares | $ 0.0001 |