Spirit Airlines, Inc. (NYSE: SAVE) today reported second quarter
2020 financial results.
Ended the second quarter 2020 with $1.2 billion of
unrestricted cash and short-term investments
|
Second Quarter 2020 |
Second Quarter 2019 |
|
As Reported |
Adjusted |
As Reported |
Adjusted |
|
(GAAP) |
(non-GAAP)1 |
(GAAP) |
(non-GAAP)1 |
Revenue |
$138.5 million |
$138.5 million |
$1,013.0 million |
$1,013.0 million |
Pre-tax Income (Loss) |
$(212.5) million |
$(364.4) million |
$148.6 million |
$150.1 million |
Pre-tax Margin |
(153.4)% |
(263.1)% |
14.7% |
14.8% |
Net Income (Loss) |
$(144.4) million |
$(285.8) million |
$114.5 million |
$115.7 million |
Diluted Earnings (Loss) Per
Share |
$(1.81) |
$(3.59) |
$1.67 |
$1.69 |
“The COVID-19 pandemic negatively impacted our second quarter
results. However, we were encouraged by our June results and
believe they illustrate that when leisure travel demand rebounds
and stabilizes, our leading low-cost structure positions us well to
be among the first to return to profitability. We increased our
schedule in June as a result of encouraging, albeit tenuous, signs
of demand improving. This worked out well for us. The favorable
dynamics of our low-cost structure, a slight rebound in demand for
June, and an uptick in forward bookings for July resulted in
favorable cash dynamics for the month of June. In fact, if you
exclude an early principal payment of nearly $50 million related to
our aircraft deferral agreement and extension of our pre-delivery
deposit facility, on an average daily cash basis2, we were
break-even for the month of June,” said Ted Christie, Spirit’s
President and Chief Executive Officer.
COVID-19“For our Guests who are ready to travel again, we are
pleased to welcome them back. We are taking purposeful steps to
provide a safe and healthy experience for our Guests and our Team
Members. I am proud of how our entire team has stepped up in
response to COVID-19, adapting to enhanced cleaning processes and
changes in operational procedures, maintaining productivity amidst
a changing work environment, connecting with our Guests in
innovative ways, and proactively cutting costs and taking actions
to preserve liquidity,” said Ted Christie, Spirit’s President and
Chief Executive Officer.
As the COVID-19 pandemic continues to evolve, the Company's
financial and operational outlook remains subject to change. The
Company continues to monitor the impacts of the pandemic on its
operations and financial condition, and to implement mitigation
strategies while working to preserve cash and protect the long-term
sustainability of the Company. The Company has implemented measures
for the safety of its Guests and Team Members as well as to
mitigate the impact of COVID-19 on its financial position and
operations. Please see the Company’s Quarterly Report on Form 10Q
for the period ending June 30, 2020 for additional disclosures
regarding these measures.
Capacity and OperationsAs the global COVID-19 pandemic spread
throughout the U.S., demand for air travel declined rapidly. In
response to this decline in demand, the Company reacted quickly to
cut flying. Second quarter capacity was down 83.2 percent compared
to the second quarter 2019. In part due to the Company quickly
adjusting its network, load factors increased from 17.9 percent in
April to 79.1 percent in June.
The Company estimates its capacity for July, August, and
September will be down approximately 18, 35, and 45 percent,
respectively, compared to the same periods last year. For the third
quarter 2020, capacity is estimated to be down 32 percent year over
year. The situation remains very fluid and actual capacity
adjustments may be different than what the Company currently
expects.
Operational performance in April 2020 was negatively impacted by
the dramatic schedule changes following the onset of the COVID-19
pandemic. As measured by the DOT, Spirit's April Completion Factor
was 80.2 percent, second among reporting carriers, and on-time
performance was 74.6 percent, or third among reporting carriers.
For the months of May and June 2020, Spirit achieved a DOT
Completion Factor3 of 100 percent and on-time performance3 for May
and June was 96.8 percent and 94.2 percent, respectively. These
outstanding results, based on preliminary data, earned Spirit a
first place ranking in both categories as measured by the DOT for
both May and June 2020.
Revenue PerformanceTotal operating revenue for the second
quarter 2020 was $138.5 million, a decrease of 86.3 percent year
over year, due to the significant decline in air travel demand as a
result of the COVID-19 pandemic.
The amount of breakage, brand-related4 and other revenues
recognized in any given period are not directly driven by the
number of passenger flight segments flown. Due to reduced air
travel demand resulting from the COVID-19 pandemic, which drove a
significant decrease in passenger flight segments, breakage,
brand-related4 and other revenues in the second quarter 2020
accounted for 43.6 percent of total revenue compared to 8.5 percent
in the second quarter 2019. Given this and the significant decrease
in passenger flight segments year over year, breakage,
brand-related4 and other revenues were the primary drivers of the
increases in both ticket and non-ticket revenue per passenger
flight segment in the second quarter 2020. Fare revenue per
passenger flight segment increased 23.0 percent year over year and
non-ticket revenue per passenger flight segment increased 49.5
percent year over year.
Cost PerformanceFor the second quarter 2020, total GAAP
operating expenses decreased 61.3 percent year over year to $328.9
million, which includes $151.9 million of special items. Adjusted
operating expenses for the second quarter 2020 decreased 43.3
percent year over year to $480.8 million5. These changes were
primarily driven by a 92.5 percent decrease in fuel expense and
reductions in various other expenses related to volume of flight
operations, such as landing fees & other rents, distribution,
and ground handling. Salaries, wages and benefits expense was about
flat compared to the same period last year despite an 11.6 percent
year over year increase in our pilot and flight attendant workforce
prior to the onset of the COVID-19 pandemic. In March, Spirit
suspended hiring across the Company except to fill essential
roles.
FleetYear-to-date through June 30, 2020, Spirit took delivery of
nine new A320neo aircraft, three of which were delivered during the
second quarter 2020. Two of the aircraft delivered in the second
quarter were debt-financed and one was secured under a direct
operating lease. The Company ended the second quarter 2020 with 154
aircraft in its fleet.
During the second quarter 2020, Spirit entered into an agreement
with Airbus ("the Deferral Agreement") to defer certain aircraft
deliveries originally scheduled in 2020 and 2021. Under the terms
of the Deferral Agreement, the Company now anticipates a total of
12 aircraft deliveries in 2020 (compared to 16 as previously
planned) and a total of 16 in 2021 (compared to 25 as previously
planned).
The Company has secured debt financing for two of the remaining
2020 aircraft deliveries and the final delivery will be financed
with a sale/leaseback transaction. Of the 2021 aircraft deliveries,
ten are secured under direct lease arrangements and we have not
secured financing for the remaining six. The first aircraft to
deliver in 2021 not yet financed is scheduled for delivery in
mid-June 2021.
In June, Spirit amended its 2018 pre-delivery deposit financing
facility to extend the expiration date from December 30, 2020 to
March 31, 2021. As part of this amendment, the Company agreed to
make an unscheduled principal payment of nearly $50 million during
the second quarter 2020.
Liquidity and Capital DeploymentSpirit ended the second quarter
2020 with unrestricted cash, cash equivalents, and short-term
investments of $1.2 billion.
"We started the year with strong momentum, but the global
pandemic had a significant adverse impact on our second quarter
results. I thank our entire team for their efforts in helping us to
manage through this crisis. As we progressed through the quarter,
our cash burn2 declined primarily due to the improvement in net
sales. Our average daily cash burn2 trended from about $9.5 million
in April to about $1.5 million in June," said Scott Haralson,
Spirit’s Chief Financial Officer. “As the health and financial
impacts of the COVID-19 pandemic continue to unfold, we are making
tactical changes to preserve cash while maintaining our flexibility
to respond when leisure demand eventually recovers. Looking
forward, based on current demand trends which have flattened since
June, we estimate our average daily cash burn2 for the third
quarter 2020 will range between $3 and $4 million."
To enhance liquidity during the second quarter 2020, the
Company:
- Increased its senior secured revolving credit facility (“the
2022 RCF”) commitment amount from $110 million as of March 31, 2020
to $180.0 million as of June 30, 2020. As of June 30, 2020, the
Company had fully drawn the available amount of $180.0 million
under the 2022 RCF;
- Completed the public offering of $175.0 million aggregate
principal amount ($168.3 million in proceeds, net of issuance
costs) of 4.75% convertible senior notes due 2025; and
- Completed a primary public offering of 20,125,000 shares of its
voting common stock. The Company received proceeds of $192.4
million, net of issuance costs, from this stock offering.
In April 2020, Spirit entered into a Payroll Support Program
("PSP") agreement with the U.S. Department of the Treasury
("Treasury"), under which the Company was eligible for a total of
$334.7 million. Of this amount, a total of $264.3 million will be
in the form of a direct grant from Treasury and $70.4 million will
be in the form of a low-interest, 10-year note. Also, in connection
with its participation in the PSP, the Company will issue to
Treasury warrants to purchase up to 500,150 shares of the Company’s
common stock at a strike price of $14.08. As of June 30, 2020, the
Company had received total PSP proceeds of $301.3 million, and had
issued to Treasury $60.4 million in notes and warrants to purchase
428,829 shares valued at $2.5 million. The Company recorded the
remaining $238.4 million direct grant amount as a liability within
deferred salaries, wages and benefits on the Company’s condensed
balance sheets. The Company recognized $123.9 million of the
deferred salaries, wages and benefits in the second quarter 2020
within special credits on the Company’s condensed statement of
operations. The Company expects to receive the remaining $33.4
million of PSP proceeds at the end of July 2020 and in exchange
will issue to Treasury an additional $10.0 million in notes, plus
warrants to purchase additional 71,321 additional shares of the
Company's common stock.
The Company has applied for additional funds under the CARES Act
secured loan program (the "Loan Program"). The expected maximum
availability to the Company under the Loan Program is approximately
$741 million, in the form of a secured loan. The loan amount is
dependent on the amount and types of collateral accepted, which may
result in an actual loan of less than $741 million principal
amount. The Company has until September 30, 2020 to determine
whether or not to participate in the Loan Program. The PSP funds
and, if received, the loan funds, subject the Company to certain
ongoing restrictions under the CARES Act.
Total capital expenditures for 2020 are estimated to be
approximately $560 million (approximately $215 million net of
financings), of which $112 million ($28 million net of financings)
is expected to be incurred in the third and fourth quarters of
2020.
Tax RateThe Company recorded a $23.8 million discrete tax
benefit in the second quarter 2020 related to the finalization of
the Net Operating Loss carryback to tax year 2013. During the
quarter, the Company amended its 2018 income tax return to claim
bonus depreciation in order to utilize the five-year carryback
period pursuant to tax law changes from the CARES Act. On a GAAP
basis, the Company's tax rate for second quarter 2020 was 32.0
percent. Excluding this discrete tax benefit and special items, the
Company's effective tax rate for the second quarter 2020 was 21.6
percent.
Conference Call/Webcast DetailSpirit will conduct a conference
call to discuss these results tomorrow, July 23, 2020, at 10:00
a.m. Eastern US Time. A live audio webcast of the conference call
will be available to the public on a listen- only basis at
http://ir.spirit.com. An archive of the webcast will be available
under "Events & Presentations" for 60 days.
About Spirit AirlinesSpirit Airlines (NYSE: SAVE) is committed
to delivering the best value in the sky. We are the leader in
providing customizable travel options starting with an unbundled
fare. This allows our Guests to pay only for the options they
choose — like bags, seat assignments and refreshments — something
we call À La Smarte. We make it possible for our Guests to venture
further and discover more than ever before. Our Fit Fleet® is one
of the youngest and most fuel-efficient in the U.S. We serve
destinations throughout the U.S., Latin America and the Caribbean
and are dedicated to giving back and improving those communities.
Come save with us at spirit.com. At Spirit Airlines, we go. We go
for you.
Investors are encouraged to read the Company's periodic and
current reports filed with or furnished to the Securities and
Exchange Commission, including its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K,
for additional information regarding the Company.
End Notes |
(1) |
See "Reconciliation of Adjusted Net Income, Adjusted Pre-tax
Income, and Adjusted Operating Income to GAAP Net Income" table
below for more details. |
(2) |
Estimated average daily cash burn rate is calculated as the sum of
operating cash outflows, debt service, fleet capex net of financing
and pre-delivery deposit payments. It does not include the impact
of any financings, capital raises, or the funds from PSP. |
(3) |
Preliminary data using DOT methodology for on-time performance
(A:14) and completion factor. |
(4) |
Breakage revenue consist of unredeemed flight credits that expired
unused, no-show revenue, and cancellation fees. Brand-related
revenue consist of the sale of $9 Fare ClubTM membership and the
marketing component of the Company's Co-branded credit card
revenue. |
(5) |
See "Reconciliation of Adjusted Operating Expense to GAAP Operating
Expense" table below for more details. |
Forward-Looking StatementsForward-Looking Statements in this
report and certain oral statements made from time to time by
representatives of the Company contain various forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the Securities Act), and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act)
which are subject to the “safe harbor” created by those sections.
Forward-looking statements are based on our management’s beliefs
and assumptions and on information currently available to our
management. All statements other than statements of historical
facts are “forward-looking statements” for purposes of these
provisions. In some cases, you can identify forward-looking
statements by terms such as “may,” “will,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“project,” “predict,” “potential,” and similar expressions intended
to identify forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the Company's
intentions and expectations regarding revenues, cash burn, capacity
and passenger demand, additional financing, capital spending,
operating costs, hiring, and stakeholders, vendors and government
support, as well as statements regarding the Company’s restatement
and amendment to its previously filed 10-K and remediation of its
material weakness. Such forward-looking statements are subject to
risks, uncertainties and other important factors that could cause
actual results and the timing of certain events to differ
materially from future results expressed or implied by such
forward-looking statements. Factors include, among others, the
extent of the impact of the COVID-19 pandemic on the Company’s
business, results of operations and financial condition, and the
extent of the impact of the COVID-19 pandemic on overall demand for
air travel, restrictions on the Company’s business by accepting
financing under the CARES Act, the competitive environment in our
industry, our ability to keep costs low and the impact of worldwide
economic conditions, including the impact of economic cycles or
downturns on customer travel behavior, and other factors, as
described in the Company’s filings with the Securities and Exchange
Commission, including the detailed factors discussed under the
heading “Risk Factors” in the Company’s amended Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2019, as
supplemented in the Company’s Quarterly Report on Form 10-Q for the
fiscal quarters ended March 31, 2020 and June 30, 2020.
Furthermore, such forward- looking statements speak only as of the
date of this release. Except as required by law, we undertake no
obligation to update any forward-looking statements to reflect
events or circumstances after the date of such statements. Risks or
uncertainties (i) that are not currently known to us, (ii) that we
currently deem to be immaterial, or (iii) that could apply to any
company, could also materially adversely affect our business,
financial condition, or future results. Additional information
concerning certain factors is contained in the Company's Securities
and Exchange Commission filings, including but not limited to the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K.
|
SPIRIT AIRLINES, INC. |
Condensed Statements of Operations |
(unaudited, in thousands, except per-share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
June 30, |
|
Percent |
|
June 30, |
|
Percent |
|
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger |
$ |
130,817 |
|
$ |
994,430 |
|
(86.8 |
) |
$ |
884,367 |
|
$ |
1,832,495 |
|
(51.7 |
) |
Other |
|
7,712 |
|
|
18,526 |
|
(58.4 |
) |
|
25,243 |
|
|
36,257 |
|
(30.4 |
) |
Total operating
revenues |
|
138,529 |
|
|
1,012,956 |
|
(86.3 |
) |
|
909,610 |
|
|
1,868,752 |
|
(51.3 |
) |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Aircraft fuel |
|
19,910 |
|
|
265,006 |
|
(92.5 |
) |
|
233,118 |
|
|
494,642 |
|
(52.9 |
) |
Salaries, wages and benefits |
|
213,579 |
|
|
216,375 |
|
(1.3 |
) |
|
454,059 |
|
|
420,276 |
|
8.0 |
|
Landing fees and other rents |
|
40,348 |
|
|
64,711 |
|
(37.6 |
) |
|
107,469 |
|
|
124,360 |
|
(13.6 |
) |
Depreciation and amortization |
|
69,113 |
|
|
54,913 |
|
25.9 |
|
|
135,104 |
|
|
105,639 |
|
27.9 |
|
Aircraft rent |
|
49,256 |
|
|
46,522 |
|
5.9 |
|
|
94,402 |
|
|
92,304 |
|
2.3 |
|
Distribution |
|
11,352 |
|
|
40,602 |
|
(72.0 |
) |
|
45,095 |
|
|
76,321 |
|
(40.9 |
) |
Maintenance, materials and repairs |
|
19,227 |
|
|
34,688 |
|
(44.6 |
) |
|
53,303 |
|
|
66,292 |
|
(19.6 |
) |
Loss on disposal of assets |
|
— |
|
|
1,550 |
|
NM |
|
|
— |
|
|
3,463 |
|
NM |
|
Special credits |
|
(151,911 |
) |
|
— |
|
NM |
|
|
(151,911 |
) |
|
— |
|
NM |
|
Other operating |
|
58,039 |
|
|
124,651 |
|
(53.4 |
) |
|
187,347 |
|
|
233,713 |
|
(19.8 |
) |
Total operating
expenses |
|
328,913 |
|
|
849,018 |
|
(61.3 |
) |
|
1,157,986 |
|
|
1,617,010 |
|
(28.4 |
) |
|
|
|
|
|
|
|
Operating income
(loss) |
|
(190,384 |
) |
|
163,938 |
|
(216.1 |
) |
|
(248,376 |
) |
|
251,742 |
|
(198.7 |
) |
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
|
Interest expense |
|
27,792 |
|
|
25,266 |
|
10.0 |
|
|
51,670 |
|
|
50,237 |
|
2.9 |
|
Capitalized interest |
|
(3,757 |
) |
|
(2,975 |
) |
26.3 |
|
|
(7,421 |
) |
|
(5,532 |
) |
34.1 |
|
Interest income |
|
(1,949 |
) |
|
(7,066 |
) |
(72.4 |
) |
|
(5,542 |
) |
|
(13,990 |
) |
(60.4 |
) |
Other (income) expense |
|
66 |
|
|
144 |
|
NM |
|
|
47 |
|
|
377 |
|
NM |
|
Total other (income)
expense |
|
22,152 |
|
|
15,369 |
|
44.1 |
|
|
38,754 |
|
|
31,092 |
|
24.6 |
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
|
(212,536 |
) |
|
148,569 |
|
(243.1 |
) |
|
(287,130 |
) |
|
220,650 |
|
(230.1 |
) |
Provision (benefit) for income
taxes |
|
(68,108 |
) |
|
34,068 |
|
(299.9 |
) |
|
(114,874 |
) |
|
50,073 |
|
(329.4 |
) |
|
|
|
|
|
|
|
Net income
(loss) |
$ |
(144,428 |
) |
$ |
114,501 |
|
(226.1 |
) |
$ |
(172,256 |
) |
$ |
170,577 |
|
(201.0 |
) |
Basic earnings (loss)
per share |
$ |
(1.81 |
) |
$ |
1.67 |
|
(208.4 |
) |
$ |
(2.33 |
) |
$ |
2.49 |
|
(193.6 |
) |
Diluted earnings
(loss) per share |
$ |
(1.81 |
) |
$ |
1.67 |
|
(208.4 |
) |
$ |
(2.33 |
) |
$ |
2.49 |
|
(193.6 |
) |
|
|
|
|
|
|
|
Weighted average shares,
basic |
|
79,601 |
|
|
68,439 |
|
16.3 |
|
|
74,061 |
|
|
68,410 |
|
8.3 |
|
Weighted average shares,
diluted |
|
79,601 |
|
|
68,620 |
|
16.0 |
|
|
74,061 |
|
|
68,568 |
|
8.0 |
|
NM: "Not Meaningful".
|
SPIRIT AIRLINES, INC. |
Condensed Statements of Comprehensive Income (Loss) |
(unaudited, in thousands) |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
$ |
(144,428 |
) |
|
$ |
114,501 |
|
|
$ |
(172,256 |
) |
|
$ |
170,577 |
|
Unrealized gain on short-term
investment securities and cash and cash equivalents, net of
deferred taxes of $5, $29, $59 and $67 |
|
18 |
|
|
|
98 |
|
|
|
203 |
|
|
|
228 |
|
Interest rate derivative loss
reclassified into earnings, net of taxes of $15, $19, $39 and
$46 |
|
48 |
|
|
|
54 |
|
|
|
89 |
|
|
|
101 |
|
Other comprehensive
income |
$ |
66 |
|
|
$ |
152 |
|
|
$ |
292 |
|
|
$ |
329 |
|
Comprehensive income
(loss) |
$ |
(144,362 |
) |
|
$ |
114,653 |
|
|
$ |
(171,964 |
) |
|
$ |
170,906 |
|
|
SPIRIT AIRLINES, INC. |
Selected Operating Statistics |
(unaudited) |
|
|
Three Months Ended June 30, |
|
|
Operating
Statistics |
2020 |
2019 |
Change |
Available seat miles (ASMs) (thousands) |
1,809,874 |
10,775,878 |
(83.2 |
) |
% |
Revenue passenger miles (RPMs)
(thousands) |
894,900 |
9,157,488 |
(90.2 |
) |
% |
Load factor (%) |
49.4 |
85.0 |
(35.6 |
) |
pts |
Passenger flight segments
(thousands) |
900 |
8,953 |
(89.9 |
) |
% |
Block hours |
27,423 |
157,182 |
(82.6 |
) |
% |
Departures |
10,754 |
58,517 |
(81.6 |
) |
% |
Total operating revenue per
ASM (TRASM) (cents) |
7.65 |
9.40 |
(18.6 |
) |
% |
Average yield (cents) |
15.48 |
11.06 |
40.0 |
|
% |
Fare revenue per passenger
flight segment ($) |
70.82 |
57.60 |
23.0 |
|
% |
Non-ticket revenue per
passenger flight segment ($) |
83.03 |
55.54 |
49.5 |
|
% |
Total revenue per passenger
flight segment ($) |
153.85 |
113.14 |
36.0 |
|
% |
CASM (cents) |
18.17 |
7.88 |
130.6 |
|
% |
Adjusted CASM (cents) (1) |
26.57 |
7.86 |
238.0 |
|
% |
Adjusted CASM ex-fuel (cents)
(2) |
25.47 |
5.41 |
370.8 |
|
% |
Fuel gallons consumed
(thousands) |
18,997 |
122,447 |
(84.5 |
) |
% |
Average fuel cost per gallon
($) |
1.05 |
2.16 |
(51.4 |
) |
% |
Aircraft at end of period |
154 |
135 |
14.1 |
|
% |
Average daily aircraft
utilization (hours) |
2.0 |
12.8 |
(84.4 |
) |
% |
Average stage length
(miles) |
960 |
1,004 |
(4.4 |
) |
% |
|
Six Months Ended June 30, |
|
|
Operating
Statistics |
2020 |
|
2019 |
|
Change |
Available seat miles (ASMs) (thousands) |
12,723,808 |
|
20,604,922 |
|
(38.2 |
) |
% |
Revenue passenger miles (RPMs)
(thousands) |
8,843,863 |
|
17,290,518 |
|
(48.9 |
) |
% |
Load factor (%) |
69.5 |
|
83.9 |
|
(14.4 |
) |
pts |
Passenger flight segments
(thousands) |
8,554 |
|
16,773 |
|
(49.0 |
) |
% |
Block hours |
185,270 |
|
300,612 |
|
(38.4 |
) |
% |
Departures |
68,928 |
|
110,692 |
|
(37.7 |
) |
% |
Total operating revenue per
ASM (TRASM) (cents) |
7.15 |
|
9.07 |
|
(21.2 |
) |
% |
Average yield (cents) |
10.29 |
|
10.81 |
|
(4.8 |
) |
% |
Fare revenue per passenger
flight segment ($) |
45.04 |
|
55.57 |
|
(18.9 |
) |
% |
Non-ticket revenue per
passenger flight segment ($) |
61.31 |
|
55.85 |
|
9.8 |
|
% |
Total revenue per passenger
flight segment ($) |
106.35 |
|
111.42 |
|
(4.6 |
) |
% |
CASM (cents) |
9.10 |
|
7.85 |
|
15.9 |
|
% |
Adjusted CASM (cents) (1) |
10.29 |
|
7.83 |
|
31.4 |
|
% |
Adjusted CASM ex-fuel (cents)
(2) |
8.46 |
|
5.43 |
|
55.8 |
|
% |
Fuel gallons consumed
(thousands) |
136,942 |
|
232,275 |
|
(41.0 |
) |
% |
Average fuel cost per gallon
($) |
1.70 |
|
2.13 |
|
(20.2 |
) |
% |
Average daily aircraft
utilization (hours) |
6.8 |
|
12.5 |
|
(45.6 |
) |
% |
Average stage length
(miles) |
1,011 |
|
1,016 |
|
(0.5 |
) |
% |
(1) |
Excludes operating special items. |
(2) |
Excludes fuel expense and operating special items. |
|
|
The Company is providing a reconciliation of GAAP financial
information to non-GAAP financial information as it believes that
non-GAAP financial measures provide management and investors the
ability to measure the performance of the Company on a consistent
basis. These non-GAAP financial measures have limitations as
analytical tools. Because of these limitations, determinations of
the Company's operating performance excluding unrealized gains and
losses or special items should not be considered in isolation or as
a substitute for performance measures calculated in accordance with
GAAP. These non-GAAP financial measures may be presented on a
different basis than other companies using similarly titled
non-GAAP financial measures.
|
Calculation of Total Non-Ticket Revenue per Passenger
Flight Segment |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
(in thousands, except per
segment data) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Operating revenues |
|
|
|
|
|
|
|
|
|
|
Fare |
$ |
63,769 |
|
|
$ |
515,696 |
|
|
$ |
385,216 |
|
|
$ |
932,041 |
|
Non-fare |
|
67,048 |
|
|
|
478,734 |
|
|
|
499,151 |
|
|
|
900,454 |
|
Total passenger revenues |
|
130,817 |
|
|
|
994,430 |
|
|
|
884,367 |
|
|
|
1,832,495 |
|
Other revenues |
|
7,712 |
|
|
|
18,526 |
|
|
|
25,243 |
|
|
|
36,257 |
|
Total operating
revenues |
$ |
138,529 |
|
|
$ |
1,012,956 |
|
|
$ |
909,610 |
|
|
$ |
1,868,752 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-ticket revenues
(1) |
$ |
74,760 |
|
|
$ |
497,260 |
|
|
$ |
524,394 |
|
|
$ |
936,711 |
|
|
|
|
|
|
|
|
|
|
|
|
Passenger segments |
|
900 |
|
|
|
8,953 |
|
|
|
8,554 |
|
|
|
16,773 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-ticket revenue per
passenger flight segment ($) |
$ |
83.03 |
|
|
$ |
55.54 |
|
|
$ |
61.31 |
|
|
$ |
55.85 |
|
(1) |
Non-ticket revenues equals the sum of non-fare passenger revenues
and other revenues. |
Special
Items |
(unaudited) |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
(in thousands) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Operating special items include the
following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of assets (1) |
|
— |
|
|
|
1,550 |
|
|
|
— |
|
|
|
3,463 |
|
Operating special credits (2) |
|
(151,911 |
) |
|
|
— |
|
|
|
(151,911 |
) |
|
|
— |
|
Total operating special
items |
$ |
(151,911 |
) |
|
$ |
1,550 |
|
|
$ |
(151,911 |
) |
|
$ |
3,463 |
|
(1) |
Includes amounts primarily related to the disposal of excess and
obsolete inventory. |
(2) |
Special credits consisted of $123.9 million of deferred salaries,
wages and benefits recognized in connection with the grant
component of the PSP with the Treasury and $28.0 million related to
the CARES Act Employee Retention Credit. |
|
Reconciliation of Adjusted Operating Expense to GAAP
Operating Expense |
(unaudited) |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
(in thousands, except CASM
data in cents) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Total operating expenses, as reported |
$ |
328,913 |
|
|
$ |
849,018 |
|
|
$ |
1,157,986 |
|
|
$ |
1,617,010 |
|
Less operating special items
expense (credit) |
|
(151,911 |
) |
|
|
1,550 |
|
|
|
(151,911 |
) |
|
|
3,463 |
|
Adjusted operating expenses,
non-GAAP (1) |
|
480,824 |
|
|
|
847,468 |
|
|
|
1,309,897 |
|
|
|
1,613,547 |
|
Less: Fuel expense |
|
19,910 |
|
|
|
265,006 |
|
|
|
233,118 |
|
|
|
494,642 |
|
Adjusted operating expenses
excluding fuel, non-GAAP (2) |
$ |
460,914 |
|
|
$ |
582,462 |
|
|
$ |
1,076,779 |
|
|
$ |
1,118,905 |
|
|
|
|
|
|
|
|
Available seat miles |
|
1,809,874 |
|
|
|
10,775,878 |
|
|
|
12,723,808 |
|
|
|
20,604,922 |
|
|
|
|
|
|
|
|
CASM (cents) |
|
18.17 |
|
|
|
7.88 |
|
|
|
9.10 |
|
|
|
7.85 |
|
Adjusted CASM (cents) (1) |
|
26.57 |
|
|
|
7.86 |
|
|
|
10.29 |
|
|
|
7.83 |
|
Adjusted CASM ex-fuel (cents)
(2) |
|
25.47 |
|
|
|
5.41 |
|
|
|
8.46 |
|
|
|
5.43 |
|
(1) |
Excludes operating special items. |
(2) |
Excludes operating special items and fuel expense. |
|
Reconciliation of Adjusted Net Income, Adjusted Pre-Tax
Income, and Adjusted Operating Income to GAAP Net
Income |
(unaudited) |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
(in thousands, except per
share data) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss), as reported |
$ |
(144,428 |
) |
|
$ |
114,501 |
|
|
$ |
(172,256 |
) |
|
$ |
170,577 |
|
Add: Provision (benefit) for
income taxes |
|
(68,108 |
) |
|
|
34,068 |
|
|
|
(114,874 |
) |
|
|
50,073 |
|
Income (loss) before income
taxes, as reported |
|
(212,536 |
) |
|
|
148,569 |
|
|
|
(287,130 |
) |
|
|
220,650 |
|
Pre-tax margin |
|
(153.4 |
)% |
|
|
14.7 |
% |
|
|
(31.6 |
)% |
|
|
11.8 |
% |
Add special items expense
(credit) (1) |
$ |
(151,911 |
) |
|
$ |
1,550 |
|
|
$ |
(151,911 |
) |
|
$ |
3,463 |
|
Adjusted income (loss) before
income taxes, non-GAAP (2) |
|
(364,447 |
) |
|
|
150,119 |
|
|
|
(439,041 |
) |
|
|
224,113 |
|
Adjusted pre-tax margin,
non-GAAP (2) |
|
(263.1 |
)% |
|
|
14.8 |
% |
|
|
(48.3 |
)% |
|
|
12.0 |
% |
Add: Total other (income)
expense |
|
22,152 |
|
|
|
15,369 |
|
|
|
38,754 |
|
|
|
31,092 |
|
Adjusted operating income
(loss), non-GAAP (2) |
|
(342,295 |
) |
|
|
165,488 |
|
|
|
(400,287 |
) |
|
|
255,205 |
|
Adjusted operating margin,
non-GAAP (2) |
|
(247.1 |
)% |
|
|
16.3 |
% |
|
|
(44.0 |
)% |
|
|
13.7 |
% |
|
|
|
|
|
|
Provision (benefit) for income
taxes (3) |
|
(78,634 |
) |
|
|
34,411 |
|
|
|
(94,304 |
) |
|
|
50,875 |
|
Adjusted net income (loss),
non-GAAP (2) |
$ |
(285,813 |
) |
|
$ |
115,708 |
|
|
$ |
(344,737 |
) |
|
$ |
173,238 |
|
|
|
|
|
|
|
Weighted average shares,
diluted |
|
79,601 |
|
|
|
68,620 |
|
|
|
74,061 |
|
|
|
68,568 |
|
|
|
|
|
|
|
Adjusted net income (loss) per
share, diluted (2) |
$ |
(3.59 |
) |
|
$ |
1.69 |
|
|
$ |
(4.65 |
) |
|
$ |
2.53 |
|
|
|
|
|
|
|
Total operating
revenues |
$ |
138,529 |
|
|
$ |
1,012,956 |
|
|
$ |
909,610 |
|
|
$ |
1,868,752 |
|
(1) |
See "Special Items" for more details. |
(2) |
Excludes operating special items. |
(3) |
Excludes amounts related to the discrete tax benefits of $31.1
million recorded in first quarter 2020 and $23.8 million recorded
in second quarter 2020. |
|
|
Investor Relations Contact: |
Media Contact: |
Investor Relations |
Spirit Media Relations |
Investorrelations@spirit.com |
media_relations@spirit.com |
(954) 447-7920 |
(954) 364-0231 |
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