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Spirit Airlines Reports Fourth Quarter and Full Year 2015 Results
Source: GlobeNewswire Inc.
Spirit Airlines, Inc. (NASDAQ:SAVE) today reported fourth quarter and full year 2015 financial results.
Adjusted net income for the fourth quarter 2015 increased 24.9 percent to $73.3 million ($1.02 per diluted share) compared to the fourth quarter 20141. GAAP net income for the fourth quarter 2015 increased 33.1 percent year over year to $74.4 million ($1.04 per diluted share) compared to the fourth quarter 2014.
Adjusted net income for the full year 2015 increased 33.6 percent to $316.2 million ($4.37 per diluted share) compared to the full year 20141. GAAP net income for the full year 2015 increased 40.7 percent year over year to $317.2 million ($4.38 per diluted share).
Adjusted pre-tax margin for the fourth quarter 2015 increased 270 basis points to 22.4 percent1. For the full year 2015, adjusted pre-tax margin increased 420 basis points to 23.4 percent1. On a GAAP basis, pre-tax margin for the fourth quarter 2015 increased 390 basis points to 22.7 percent and for the full year 2015 increased 520 basis points to 23.5 percent.
Spirit ended 2015 with unrestricted cash and cash equivalents of $803.6 million.
Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended December 31, 2015 was 28.2 percent2.
“I want to thank and congratulate our Spirit team members for successfully delivering solid financial results in 2015. Although increased industry capacity and aggressive competitive pricing pressured our unit revenues, our excellent cost execution and ability to adapt to a changing environment drove improved year-over-year results,” said Bob Fornaro, Spirit’s Chief Executive Officer. “I am excited to lead this innovative team. As CEO, I plan to improve upon the already very strong base of fundamentals that Spirit possesses with a focus on continuing to improve operational reliability and customer service, and maintaining our financial discipline to drive value for all of Spirit’s stakeholders.”
Revenue Performance
For the fourth quarter 2015, Spirit's total operating revenue was $519.8 million, an increase of 9.6 percent compared to the fourth quarter 2014, driven by an increase in flight volume, partially offset by a decrease in operating yields.
Total revenue per passenger flight segment ("PFS") for the fourth quarter 2015 decreased 12.6 percent year over year to $111.78, primarily driven by a 21.4 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pricing pressures as well as a higher percentage of Spirit's markets being under development compared to the same period last year. Non-ticket revenue remained stable, declining only 0.8 percent year over year on a per flight segment basis to $54.26.
Cost Performance
Adjusted operating expenses for the fourth quarter 2015 increased 5.6 percent to $401.2 million3. GAAP total operating expenses increased 3.9 percent year over year to $399.5 million. Operating expenses benefited from fuel expense decreasing 23.8 percent, or $32.8 million, on a fuel volume increase of 27.9 percent.
Spirit reported fourth quarter 2015 cost per available seat mile ("ASM") excluding special items and fuel (“Adjusted CASM ex-fuel”)3 of 5.15 cents, a decrease of 8.2 percent compared to the same period last year, driven primarily by lower aircraft rent per ASM and lower labor expense per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft. Labor expense per ASM in the fourth quarter 2015 was lower compared to the same period last year primarily due to scale benefits from overall growth and from larger gauge aircraft. These decreases were partially offset by higher depreciation and amortization expense related to the depreciation of aircraft.
"Spirit’s cost performance in the fourth quarter and throughout 2015 should be a source of pride for all our team members,” said Ted Christie, Spirit's Chief Financial Officer. “Our ultra-low cost structure is the foundation of our competitive advantage, providing us the platform to define our future.”
Fleet
Spirit took delivery of three new A321ceo aircraft during the fourth quarter 2015.
Full Year 2015 Highlights
Maintained its commitment to offer low fares to its valued customers; ticket revenue per PFS for 2015 averaged $65.25 with total revenue per PFS averaging $119.49.
Launched service on 40 new nonstop routes during 2015.
Added Cleveland, Ohio to its list of destinations and announced the addition of service from its newest destination, Seattle-Tacoma, Washington beginning in the Spring of 2016.
Added 14 (8 A320ceos and 6 A321ceos) new Airbus aircraft to its fleet, ending the year with 79 aircraft. As of year-end 2015, Spirit's Fit Fleet™ averaged 5.2 years, the youngest fleet of any major US airline.
Issued $576.6 million of enhanced equipment trust certificates, its first aircraft-backed bond publicly offered.
Repurchased approximately 1.5 million shares for approximately $99 million during 2015 under an initial share repurchase program and authorized another $100 million share repurchase program.
Created over 600 new jobs, bringing our total number of team members to nearly 5,000.
Conference Call/Webcast Detail
Spirit will conduct a conference call to discuss these results today, February 9, 2016, at 8:00 a.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.spirit.com. An archive of the webcast will be available under Webcasts & Presentations for 60 days.
About Spirit Airlines:
Spirit Airlines (NASDAQ:SAVE) is committed to offering the lowest total price to the places we fly, on average much lower than other airlines. Our customers start with an unbundled, stripped-down Bare Fare™ and get Frill Control™ which allows them to pay only for the options they choose - like bags, seat assignments and refreshments - the things other airlines bake right into their ticket prices. We help people save money and travel more often, create new jobs and stimulate business growth in the communities we serve. With our Fit Fleet™, the youngest fleet of any major US airline, we operate more than 385 daily flights to 56 destinations in the U.S., Latin America and the Caribbean. Come save with us at www.spirit.com.
Investors are encouraged to read the Company's periodic and current reports filed with or furnished to the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional information regarding the Company.
End Notes
(1) See "Reconciliation of Adjusted Net Income to GAAP Net Income" table below for more details.
(2) See "Calculation for Return on Invested Capital" table below for more details.
(3) See "Reconciliation of Adjusted Operating Expense to GAAP Operating Expense" table below for more details.
Forward-Looking Statements
Statements in this release and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act) which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Additional risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. You should carefully consider the risks described below and the other information in this report. If any of the following risks materialize, our business could be materially harmed, and our financial condition and results of operations could be materially and adversely affected. References in this report to “Spirit,” “we,” “us,” “our,” or the “Company” shall mean Spirit Airlines, Inc., unless the context indicates otherwise. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
SPIRIT AIRLINES, INC.
Statement of Operations
(unaudited, in thousands, except per share data)
Three Months Ended Year Ended
December 31, Percent December 31, Percent
2015 2014 Change 2015 2014 Change
Operating revenues:
Passenger $ 267,487 $ 271,569 (1.5 ) $ 1,169,338 $ 1,144,972 2.1
Non-ticket 252,359 202,918 24.4 972,125 786,608 23.6
Total operating revenues 519,846 474,487 9.6 2,141,463 1,931,580 10.9
Operating expenses:
Aircraft fuel 105,215 138,002 (23.8 ) 461,447 612,909 (24.7 )
Salaries, wages and benefits 97,035 81,212 19.5 378,210 313,988 20.5
Aircraft rent 52,091 51,209 1.7 211,531 195,827 8.0
Landing fees and other rents 32,590 27,533 18.4 131,077 105,115 24.7
Distribution 20,656 15,893 30.0 86,576 74,823 15.7
Maintenance, materials and repairs 18,544 17,515 5.9 80,448 73,956 8.8
Depreciation and amortization 22,278 13,168 69.2 73,908 46,971 57.3
Other operating 50,796 38,630 31.5 206,867 149,675 38.2
Loss on disposal of assets 304 1,350 nm 1,604 3,008 nm
Special charges — — nm 673 45 nm
Total operating expenses 399,509 384,512 3.9 1,632,341 1,576,317 3.6
Operating income 120,337 89,975 33.7 509,122 355,263 43.3
Other (income) expense:
Interest expense 7,200 1,659 nm 20,382 2,747 nm
Capitalized interest (3,161 ) (1,659 ) nm (11,553 ) (2,747 ) nm
Interest income (1,581 ) (101 ) nm (2,125 ) (336 ) nm
Other expense (267 ) 1,048 nm 15 2,605 nm
Total other (income) expense 2,191 947 nm 6,719 2,269 nm
Income before income taxes 118,146 89,028 32.7 502,403 352,994 42.3
Provision for income taxes 43,746 33,119 32.1 185,183 127,530 45.2
Net income $ 74,400 $ 55,909 33.1 $ 317,220 $ 225,464 40.7
Basic earnings per share $ 1.04 $ 0.77 35.1 $ 4.39 $ 3.10 41.6
Diluted earnings per share $ 1.04 $ 0.76 36.8 $ 4.38 $ 3.08 42.2
Weighted average shares, basic 71,543 72,776 (1.7 ) 72,208 72,739 (0.7 )
Weighted average shares, diluted 71,672 73,324 (2.3 ) 72,426 73,294 (1.2 )
SPIRIT AIRLINES, INC.
Statements of Comprehensive Income
(unaudited, in thousands)
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
Net income $ 74,400 $ 55,909 $ 317,220 $ 225,464
Unrealized gain (loss) on interest rate derivative instruments, net of deferred tax expense (benefit) of $34, ($423), ($500), and $(423), respectively in each period. 58 (718 ) (828 ) (718 )
Other comprehensive income (loss) $ 58 $ (718 ) $ (828 ) $ (718 )
Comprehensive income $ 74,458 $ 55,191 $ 316,392 $ 224,746
SPIRIT AIRLINES, INC.
Balance Sheets
(unaudited, in thousands)
December 31, December 31,
2015 2014
Assets
Current assets:
Cash and cash equivalents $ 803,632 $ 632,784
Accounts receivable, net 28,266 22,685
Aircraft maintenance deposits 73,415 29,172
Prepaid income taxes 72,278 —
Prepaid expenses and other current assets 48,749 36,857
Total current assets 1,026,340 721,498
Property and equipment:
Flight equipment 827,282 204,462
Ground and other equipment 82,459 57,012
Less accumulated depreciation (65,524 ) (36,099 )
844,217 225,375
Deposits on flight equipment purchase contracts 286,837 242,881
Long-term aircraft maintenance deposits 206,485 213,147
Deferred heavy maintenance, net 89,127 123,108
Other long-term assets 77,539 66,744
Total assets $ 2,530,545 $ 1,592,753
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable $ 17,043 $ 13,402
Air traffic liability 216,831 188,870
Current maturities of long-term debt 49,637 10,431
Other current liabilities 182,729 152,921
Total current liabilities 466,240 365,624
Long-term debt less current maturities 596,693 135,232
Long-term deferred income taxes 221,481 66,367
Deferred gains and other long-term liabilities 20,821 22,455
Shareholders’ equity:
Common stock 7 7
Additional paid-in-capital 544,277 526,173
Treasury stock, at cost (116,182 ) (3,921 )
Retained earnings 798,754 481,534
Accumulated other comprehensive loss (1,546 ) (718 )
Total shareholders’ equity 1,225,310 1,003,075
Total liabilities and shareholders’ equity $ 2,530,545 $ 1,592,753
Note: The Company adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes, utilizing retrospective application as permitted. As such, certain prior period amounts have been reclassified to conform to the current presentation. In the Balance Sheet as of December 31, 2014, the Company has reclassified $9.6 million from Deferred income taxes in current assets to Deferred income taxes within non-current liabilities.
SPIRIT AIRLINES, INC.
Statement of Cash Flows
(unaudited, in thousands)
Year Ended December 31,
2015 2014
Operating activities:
Net income $ 317,220 $ 225,464
Adjustments to reconcile net income to net cash provided by operations:
Unrealized (gains) losses on open derivative contracts, net 2,334 —
Equity-based compensation, net 9,222 8,797
Allowance for doubtful accounts (recoveries) 12 (45 )
Amortization of deferred gains and losses 1,165 (185 )
Depreciation and amortization 73,908 46,971
Deferred income tax expense 155,614 34,118
Loss on disposal of assets 1,604 3,008
Changes in operating assets and liabilities:
Accounts receivable (5,592 ) 606
Prepaid maintenance reserves (32,101 ) (31,925 )
Long-term deposits and other assets (103,613 ) (48,382 )
Accounts payable 2,706 (10,034 )
Air traffic liability 36,387 21,135
Other liabilities 14,119 13,731
Other — (2,747 )
Net cash provided by operating activities 472,985 260,512
Investing activities:
Pre-delivery deposits for flight equipment, net of refunds (142,323 ) (115,802 )
Capitalized interest (10,159 ) —
Purchase of property and equipment (548,800 ) (186,569 )
Net cash used in investing activities (701,282 ) (302,371 )
Financing activities:
Proceeds from issuance of long-term debt 536,780 148,000
Proceeds from stock options exercised 32 174
Payments on debt and capital lease obligations (26,364 ) (1,233 )
Proceeds from sale and leaseback transactions 7,300 7,200
Payments to pre-IPO shareholders pursuant to tax receivable agreement — (5,643 )
Excess tax benefits from equity-based compensation 8,850 1,871
Repurchase of common stock (112,261 ) (1,630 )
Debt issuance costs (15,192 ) (4,727 )
Net cash provided by financing activities 399,145 144,012
Net increase in cash and cash equivalents 170,848 102,153
Cash and cash equivalents at beginning of period 632,784 530,631
Cash and cash equivalents at end of period $ 803,632 $ 632,784
Supplemental disclosures
Cash payments for:
Interest (net of capitalized interest) $ 7,061 $ —
Income taxes paid, net of refunds $ 95,933 $ 89,104
Non-cash transactions:
Capital expenditures funded by capital lease borrowings $ — $ (173 )
SPIRIT AIRLINES, INC.
Selected Operating Statistics (unaudited)
Three Months Ended December 31,
Operating Statistics 2015 2014 Change
Available seat miles (ASMs) (thousands) 5,705,398 4,372,511 30.5 %
Revenue passenger miles (RPMs) (thousands) 4,727,996 3,707,271 27.5 %
Load factor (%) 82.9 84.8 (1.9 ) pts
Passenger flight segments (thousands) 4,651 3,709 25.4 %
Block hours 89,016 70,730 25.9 %
Departures 33,662 27,167 23.9 %
Total operating revenue per ASM (TRASM) (cents) 9.11 10.85 (16.0 )%
Average yield (cents) 11.00 12.80 (14.1 )%
Average ticket revenue per passenger flight segment ($) 57.52 73.21 (21.4 )%
Average non-ticket revenue per passenger flight segment ($) 54.26 54.70 (0.8 )%
Total revenue per passenger flight segment ($) 111.78 127.91 (12.6 )%
CASM (cents) 7.00 8.79 (20.4 )%
Adjusted CASM (cents) (1) 7.03 8.69 (19.1 )%
Adjusted CASM ex-fuel (cents) (2) 5.15 5.61 (8.2 )%
Fuel gallons consumed (thousands) 67,467 52,732 27.9 %
Average economic fuel cost per gallon ($) 1.59 2.56 (37.9 )%
Aircraft at end of period 79 65 21.5 %
Average daily aircraft utilization (hours) 12.5 12.5 —
Average stage length (miles) 1,000 983 1.7 %
Airports served in the period (3) 53 53 —
Year Ended December 31,
Operating Statistics 2015 2014 Change
Available seat miles (ASMs) (thousands) 21,246,156 16,340,142 30.0 %
Revenue passenger miles (RPMs) (thousands) 17,995,311 14,159,860 27.1 %
Load factor (%) 84.7 86.7 (2.0 ) pts
Passenger flight segments (thousands) 17,921 14,294 25.4 %
Block hours 337,956 267,305 26.4 %
Departures 128,902 102,594 25.6 %
Total operating revenue per ASM (TRASM) (cents) 10.08 11.82 (14.7 )%
Average yield (cents) 11.90 13.64 (12.8 )%
Average ticket revenue per passenger flight segment ($) 65.25 80.11 (18.5 )%
Average non-ticket revenue per passenger flight segment ($) 54.24 55.03 (1.4 )%
Total revenue per passenger flight segment ($) 119.49 135.14 (11.6 )%
CASM (cents) 7.68 9.65 (20.4 )%
Adjusted CASM (cents) (1) 7.69 9.55 (19.5 )%
Adjusted CASM ex-fuel (cents) (2) 5.50 5.88 (6.5 )%
Fuel gallons consumed (thousands) 255,008 200,498 27.2 %
Average economic fuel cost per gallon ($) 1.82 2.99 (39.1 )%
Average daily aircraft utilization (hours) 12.7 12.7 —
Average stage length (miles) 987 980 0.7 %
Airports served in the period (3) 57 56 1.8 %
(1) Excludes special items.
(2) Excludes economic fuel expense and special items.
(3) Includes seasonal airports not served at the end of the period.
The Company is providing a reconciliation of GAAP financial information to non-GAAP financial information as it believes that non-GAAP financial measures provide management and investors the ability to measure the performance of the Company on a consistent basis. These non-GAAP financial measures have limitations as an analytical tool. Because of these limitations, determinations of the Company's operating performance excluding unrealized gains and losses or special items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Special Items
Three Months Ended Year Ended
December 31, December 31,
(in thousands) 2015 2014 2015 2014
Operating special items include the following (1):
Prior years' additional federal excise tax $ — $ — $ — $ 9,278
Unrealized losses (gains) related to fuel derivative contracts (1,988 ) 3,118 (3,880 ) 3,881
Loss on disposal of assets 304 1,350 1,604 3,008
Special charges — — 673 45
Total operating special items $ (1,684 ) $ 4,468 $ (1,603 ) $ 16,212
Non-operating special items include the following (2):
Settlement paid to Pre-IPO Stockholders $ — $ — $ — $ 1,388
Total non-operating special items $ — $ — $ — $ 1,388
Total special items $ (1,684 ) $ 4,468 $ (1,603 ) $ 17,600
Reconciliation of Adjusted Operating Expense to GAAP Operating Expense
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in thousands, except CASM data in cents) 2015 2014 2015 2014
Total operating expenses, as reported $ 399,509 $ 384,512 $ 1,632,341 $ 1,576,317
Less operating special items (1) (1,684 ) 4,468 (1,603 ) 16,212
Adjusted operating expenses, non-GAAP (3) 401,193 380,044 1,633,944 1,560,105
Less: Economic fuel expense 107,203 134,884 465,327 599,750
Adjusted operating expenses excluding fuel, non-GAAP (4) $ 293,990 $ 245,160 $ 1,168,617 $ 960,355
Available seat miles 5,705,398 4,372,511 21,246,156 16,340,142
CASM (cents) 7.00 8.79 7.68 9.65
Adjusted CASM (cents) (3) 7.03 8.69 7.69 9.55
Adjusted CASM ex-fuel (cents) (4) 5.15 5.61 5.50 5.88
(1) Special items include additional federal excise tax on a minority of fuel volume for the period beginning July 1, 2009 through December 31, 2013, unrealized gains and losses related to outstanding fuel derivative contracts, loss on disposal of assets, and special charges.
(2) Non-operating special charges relate to the settlement paid to the Pre-IPO Stockholders in excess of the liability the Company had previously estimated related to the Company's Tax Receivable Agreement.
(3) Excludes operating special items.
(4) Excludes operating special items and economic fuel expense as described in the "Reconciliation of Economic Fuel Expense to GAAP Fuel Expense" table below.
Reconciliation of Adjusted Net Income to GAAP Net Income
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in thousands, except per share data) 2015 2014 2015 2014
Net income, as reported $ 74,400 $ 55,909 $ 317,220 $ 225,464
Add: Provision for income taxes 43,746 33,119 185,183 127,530
Income before income taxes, as reported 118,146 89,028 502,403 352,994
Pre-tax margin, GAAP 22.7 % 18.8 % 23.5 % 18.3 %
Add operating special items (1) (1,684 ) 4,468 (1,603 ) 16,212
Add non-operating special charges (1) — — — 1,388
Income before income taxes, non-GAAP (2) 116,462 93,496 500,800 370,594
Adjusted pre-tax margin, non-GAAP (2) 22.4 % 19.7 % 23.4 % 19.2 %
Provision for income taxes (3) 43,122 34,781 184,592 133,889
Adjusted net income, non-GAAP (2)(3) $ 73,340 $ 58,715 $ 316,208 $ 236,705
Weighted average shares, diluted 71,672 73,324 72,426 73,294
Adjusted net income per share, diluted (2)(3) $ 1.02 $ 0.80 $ 4.37 $ 3.23
Reconciliation of Adjusted Operating Income to GAAP Operating Income
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in thousands) 2015 2014 2015 2014
Operating income, as reported $ 120,337 $ 89,975 $ 509,122 $ 355,263
Operating margin, GAAP 23.1 % 19.0 % 23.8 % 18.4 %
Add operating special items (1) (1,684 ) 4,468 (1,603 ) 16,212
Operating income, non-GAAP (4) $ 118,653 $ 94,443 $ 507,519 $ 371,475
Operating margin (4) 22.8 % 19.9 % 23.7 % 19.2 %
(1) See "Special Items" for more details.
(2) Excludes operating and non-operating special items.
(3) Assumes same marginal tax rate as is applicable to GAAP net income.
(4) Excludes special items.
The Company believes economic fuel expense is the best measure of the effect fuel prices are currently having on our business, because it most closely approximates the net cash outflow associated with purchasing fuel used for our operations during the period. Economic fuel expense is defined as into-plane fuel expense, realized gains or losses on derivative contracts, plus the economic premium expense related to fuel option contracts in the period the option is benefiting. The key difference between aircraft fuel expense as recorded in our statement of operations and economic fuel expense is unrealized mark-to-market changes in the value of aircraft fuel derivatives outstanding and the timing of premium gain or loss recognition on our outstanding fuel option contracts. Many industry analysts evaluate airline results using economic fuel expense, and it is used in our internal management reporting.
Reconciliation of Economic Fuel Expense to GAAP Fuel Expense
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
(in thousands, except per gallon data) 2015 2014 2015 2014
Fuel expense
Aircraft fuel, as reported $ 105,215 $ 138,002 $ 461,447 $ 612,909
Less:
Prior years' additional federal excise tax — — — 9,278
Unrealized losses (gains) related to fuel derivative contracts (1,988 ) 3,118 (3,880 ) 3,881
Economic fuel expense, non-GAAP $ 107,203 $ 134,884 $ 465,327 $ 599,750
Fuel gallons consumed 67,467 52,732 255,008 200,498
Economic fuel cost per gallon, non-GAAP $ 1.59 $ 2.56 $ 1.82 $ 2.99
Calculation of Return on Invested Capital
(unaudited)
Twelve Months Ended
(in thousands) December 31, 2015
Operating income $ 509,122
Add operating special items (1) (1,603 )
Adjustment for aircraft rent 211,531
Adjusted operating income (2) 719,050
Tax (36.9%) (3) 265,035
Adjusted operating income, after-tax 454,015
Invested capital
Total debt $ 646,330
Book equity 1,225,310
Less: Unrestricted cash 803,632
Add: Capitalized aircraft operating leases (7x Aircraft Rent) 1,480,717
Total invested capital 2,548,725
Return on invested capital (ROIC), pre-tax (2) 28.2 %
Return on invested capital (ROIC), after-tax (2)(3) 17.8 %
(1) See "Special Items" for more details.
(2) Excludes special items.
(3) Assumes same marginal tax rate as is applicable to GAAP net income for the twelve months ended December 31, 2015.
Investor Relations Contact:
DeAnne Gabel
InvestorRelations@Spirit.com
(954) 447-7920
Media Contact:
Paul Berry
Paul.Berry@Spirit.com
(954) 628-4827
Primary Logo
It's amazing how they are controlling the exchanges. The Dow was perfectly pushed right above 16,000 with 2 mins left. It was stuck at 15,997-15,999 before a push above. The 1% are running things. Has nothing to do with the economy at this point.
Bounced off $102
Market completely reversed and forced over 16000. Everything shot back up talk about some crazy ish. Wondering if it's another rug pull set up...
Well, it's come back by 200 that's a good start I suppose.
It's been dropping since the end of November.
Get in line, so is just about every stock trading today.
New 52 week low wow... Could be more downside after earnings.
Ralph, tell me this isn't reminiscent of October 2014. We got hosed from $43 or so down to $26. I remember buying the entire way down.
$34 breaks, then hello $32. I don't see that happening unless this market continues to fall a few more days.
Down 10%... Heading to below IPO...
Wondering how much of this is actually the fear of traveling? I for one cancelled a Vegas trip this week just because my wife is pregnant and die in 4 weeks. I have about 5 more flights booked through July and playing it by ear...
52 week low could be the bottom as everything is at their low. Now, if we have a few more days of this down market then we can expect lower.
It's not worth selling at this point. I'd be averaging down or buying day trade or short term trade shares right now. This is the area you want to buy in to sell over $40+.
Approaching IPO low...
Man what I'd give to see October 3014 lows again!
Everything*
Absolute perfect day to steal some cheap ones. Every bring hit 52 weeks lows!
Like the war on drugs and terror...
21 points from $56 high. 1 point from low. Sheesh.
GSCO, AMEX, BATS = 3 headed monster. Here's to a market wide bounce this afternoon..hopefully.
Hey to each his own.
Down 125 points from earnings high....
As I said, there will ALWAYS be opportunities to buy this to go long for a flip.
Huge gap down across the market wow.
$2.65 away
Yeah for a SHORT.
Wow yeah definitely looks like they're forcing the market down. Everything is on clearance sale (GOOG, APPL, NFLX, TSLA, airlines, everything). Everything sitting at 52 week lows.
You'll have that chance again. Question is, will you make the mistake at $44?
Wow $17.20 HOD down to mid $14's. Sheesh.
Oh wow! We've been waiting to hear about this.
Down 100 points in what 2-3 days!?
Airlines taking the biggest beating. What's the word on the street?
Eyeing $75 but may start buying here on down to add to my position...
Crap report this morning....
Current Report Filing (8-k)
Source: Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 2016
VIRGIN AMERICA INC.
(Exact name of registrant as specified in its charter)
Delaware 001-36718 20-1585173
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
555 Airport Boulevard
Burlingame, CA 94010
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (650) 762-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure
On February 5, 2016, Virgin America Inc., issued an investor update providing guidance for Virgin America Inc.’s current expectation related to certain items for the fourth quarter of 2015 and full year 2016. The investor update is attached as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Reference is made to the Exhibit Index attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VIRGIN AMERICA INC.
Date: February 5, 2016 By:
/s/ Peter D. Hunt
Peter D. Hunt
Chief Financial Officer
EXHIBIT INDEX
Exhibit
No.
Description
99.1 Investor Update issued by Virgin America Inc. dated February 5, 2016
Exhibit 99.1
LOGO
Investor Update: February 5, 2016
Virgin America Inc. (NASDAQ: VA) (the “Company”) is in the process of closing its books for the year ended December 31, 2015, and will release its fourth quarter and full year 2015 financial results on February 18, 2016. This investor update provides guidance for the Company’s current expectations related to certain items for such periods. All data is based on preliminary estimates.
Fourth Quarter 2015
Unit Revenue and Cost Performance
Capacity, as measured by available seat miles, increased by 10.3 percent for the fourth quarter of 2015 as compared to the fourth quarter of 2014.
The Company’s preliminary calculations for Passenger Revenue per Available Seat Mile (PRASM) indicate a decrease of approximately 5.1 percent versus the fourth quarter of 2014. PRASM in the fourth quarter of 2015 was negatively impacted by weaker than expected demand in the month of December and a continued low fare environment in the markets that the Company serves from Dallas Love Field. Total RASM (inclusive of other revenue) decreased approximately 4.7 percent versus the fourth quarter of 2014.
Based on preliminary calculations, Cost per Available Seat Mile (CASM) excluding special items, fuel and profit sharing1 increased approximately 4.6 percent versus the fourth quarter of 2014. The increase in CASM excluding special items, fuel and profit sharing versus the Company’s prior expectations was negatively impacted by the following:
1) Higher than expected marketing costs to support developing markets within Virgin America’s network;
2) Higher aircraft maintenance expense from some minor damage events that occurred during the quarter and from the timing of heavy maintenance activities originally planned to begin in January 2016; and
3) Higher than expected other operating costs for crew training to support the Company’s resumption of growth.
Management believes these additional unexpected costs that the Company incurred during the fourth quarter primarily reflect the resumption of growth during the quarter and, to some degree, the acceleration of costs that would have otherwise occurred in early 2016. The Company continues to expect CASM excluding special items, fuel and profit sharing to decrease between 1.0 percent and 2.0 percent for the full year 2016.
1 Please see “GAAP to Non-GAAP Reconciliations” for reconciliations of non-GAAP financial measures used in this release and the reasons management uses these measures.
Fuel Costs
The economic fuel cost per gallon, inclusive of related taxes and hedge costs, was $1.76 per gallon for the fourth quarter of 2015.
Special Items
The Company expects to record certain special items in its fourth quarter 2015 financial results which are detailed below.
Aircraft Maintenance Deposits - The Company expects to record a non-cash change in estimate of approximately $40.0 million to expense as aircraft rent certain aircraft maintenance deposits held by lessors related to the planned future replacement of engine life-limited parts (“LLP”). Under the current fleet plan, which has been modified to include 10 Airbus A321neo aircraft to be added to the fleet in 2017 and 2018, the Company expects to utilize the fleet in such a way that the LLP replacements are not likely to occur on a number of existing leased aircraft during their lease terms. This change in estimate adjusts LLP deposits for these aircraft. In addition, future LLP deposit payments on these aircraft will be expensed as incurred. Previously, the Company expected to complete replacement of LLPs on these aircraft in a future period, incurring the full expense of replacement, and then recover these deposits after such maintenance event occurred. Under the Company’s revised expectations, the Company will avoid the full replacement cost of the LLPs for these aircraft, ultimately resulting in an overall lower total maintenance cost during the remaining terms of the leases for these aircraft.
Income Tax Valuation Allowance Reversal - The Company expects to record a credit to income tax expense in the fourth quarter of 2015 from the reversal of the income tax valuation allowance on net deferred tax assets. This will be a one-time non-cash credit recorded during the fourth quarter, and will result in recording income tax expense beginning in 2016 associated with any future earnings. The Company expects a tax rate of approximately 38.5% for full year 2016 but does not anticipate any material cash taxes in 2016 as the Company’s federal net operating loss carry-forwards of approximately $690.0 million are expected to offset cash income taxes.
Forward-Looking Statements
Statements in this investor update include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “would,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company’s objectives, plans or goals, the Company’s estimates of financial results or performance or actions the Company may take in the future, are forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the financial condition of its business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at which or by which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good-faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: the price and availability of aircraft fuel; the Company’s ability to compete in an extremely competitive industry; the successful execution and implementation of the Company’s strategy; security concerns resulting from any threatened or actual terrorist attacks or other hostilities; the threat of unauthorized incursions of our information technology infrastructure; the Company’s reliance upon technology and automated systems to operate its business; the potential effects of emergencies, accidents or similar incidents on the Company’s reputation and business; changes in economic conditions; the Company’s limited profitable operating history; and changes in governmental regulations. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings. Caution should be taken not to place undue reliance on the Company’s forward-looking statements, which represent the Company’s views only as of February 5, 2016, and which the Company has no current intention to update. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions of these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events, except as required by law.
Non-GAAP to GAAP Reconciliations
The Company evaluates its financial performance using various financial measures, some of which are measures calculated under GAAP, and some of which use alternative methods of calculation (non-GAAP). These measures include net income/loss, net earnings/loss per share and CASM, among others. Pursuant to SEC Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. All data is based on preliminary estimates.
CASM is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. The Company believes that adjusting CASM for certain special items is useful to investors because the items are not expected to be incurred on a regular basis in future periods. The Company also believes that excluding fuel costs from CASM is useful to investors because it provides an additional measure of management’s performance excluding the effects of a significant cost item over which management has limited influence. The Company also believes that reporting economic fuel cost per gallon excluding gains or losses on hedges that related to future periods is useful to investors because such gain or loss is not indicative of the actual future value of the underlying hedge contract, and the Company believes that excluding such gain or loss helps investors to understand the core operating performance in the current period. In addition, the Company believes that excluding Profit Sharing costs from CASM better allows investors to understand the core operating cost performance for the period and provides for a more meaningful comparison of the costs of the Company’s operations to those of the rest of the industry.
Preliminary 4th Quarter 2015 CASM
YOY Change
Total CASM
(7.1%)
Less Special Items
(3.0%)
Less Fuel Expense
14.5%
Less Profit Sharing Expense
0.2%
CASM excluding Special Items, Fuel Expense, and Profit Sharing Expense
4.6%
Investor Contact:
Stephen Shulstein - stephen.shulstein@virginamerica.com or 650.645.5694
If they announce more buybacks say hello to $26 from 2014...
Yeah man it'll be under $100 in the coming weeks if not days. Lower than Apple and Netflix...
Agreed.
Southwest Airlines Reports January Traffic
Source: PR Newswire (US)
DALLAS, Feb. 5, 2016 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its January preliminary traffic statistics. The Company flew 8.9 billion revenue passenger miles (RPMs) in January 2016, an increase of 11.1 percent from the 8.0 billion RPMs flown in January 2015. Available seat miles (ASMs) increased 7.8 percent to 11.5 billion in January 2016, compared with January 2015 ASMs of 10.7 billion. The January 2016 load factor was a record for the month of January at 77.5 percent, compared with 75.2 percent in January 2015. Based on these results and current trends, the Company continues to expect its first quarter 2016 operating revenue per ASM (RASM) to be in line with first quarter 2015.
SkyWest, Inc. Announces Fourth Quarter 2015 and Full Year Profit
Source: PR Newswire (US)
ST. GEORGE, Utah, Feb. 4, 2016 /PRNewswire/ -- SkyWest, Inc. (NASDAQ: SKYW) today reported financial and operating results for the fourth quarter of 2015, including adjusted net income of $25 million or $0.49 per diluted share, up from adjusted net income of $15.7 million or $0.31 per diluted share in 2014. GAAP net income for the quarter was $40 million, or $0.78 per diluted share, compared to a loss of $28 million or $(0.54) per diluted share for the same quarter of 2014.
Adjusted net income for the full year 2015 was $103 million, or $1.98 per diluted share, up from adjusted net income of $7 million, or $0.14 per diluted share, in 2014. GAAP net income for the full year 2015 was $118 million, or $2.27 per diluted share, compared to a net loss of $24 million or $(0.47) per share for 2014.
The GAAP results for the fourth quarter 2015 include two special items totaling $25 million in pre-tax income: a net gain of $33 million from the early extinguishment of debt and $8 million revenue reduction from the resolution of a flying contract matter. Both of these special items are excluded from the calculation of SkyWest's adjusted net income for the quarter.
Commenting on the results, Chip Childs, SkyWest, Inc. Chief Executive Officer said, "Our fourth quarter results reflect continued progress in the optimization of our fleet and flying contract mix. By the end of 2017, we anticipate over 50% of our fleet will be dual class aircraft, compared to 38% today. We are scheduled to more than double the number of E175 aircraft operating in our fleet by mid-2017. We believe our operating performance continues to create additional opportunities to improve our business model."
Q4 2015 Financial Highlights
Operating margin increased to 7.9% in Q4 2015 compared to 6.2% in Q4 2014 on an adjusted basis. The improvement in operating income and operating margin was primarily due to additional flying contracts with improved profitability, improved operating performance and a reduction in the number of aircraft operating under unprofitable or less profitable flying contracts.
SkyWest generated $141 million in cash from operations in Q4 2015, compared to $99 million in Q4 2014. For the 2015 year, cash from operations was $455 million, compared to $285 million in 2014.
Although adjusted revenues decreased $53 million in Q4 2015 from Q4 2014, the net reduction to revenue reflected the removal of over 100 aircraft that were operated under unprofitable flying agreements, or 16% of the December 2014 fleet. The revenue impact of removing unprofitable aircraft from SkyWest's fleet was partially offset by additional Embraer dual-class jet aircraft ("E175") operations, improved contract rates from renewals of SkyWest's existing flying contracts and additional contract performance incentives earned compared to Q4 2014.
Excluding special items, operating expenses were down by $63 million, or 8.3%, compared to Q4 2014. This reduction primarily related to a reduction in direct operating costs from fewer aircraft in service and reduced fuel costs, and was partially offset by additional crew training costs in anticipation of upcoming E175 aircraft deliveries.
Q4 2015 Operational Update
Changes in flight completion rates at SkyWest Airlines, Inc. ("SkyWest Airlines") and ExpressJet Airlines, Inc. ("ExpressJet") from Q4 2014 to Q4 2015 are summarized as follows:
SkyWest Airlines
ExpressJet
Q4 2015
Q4 2014
Q4 2015
Q4 2014
Adjusted Completion *
99.8%
99.2%
99.9%
99.7%
Raw Completion
98.4%
97.1%
98.0%
98.5%
* Adjusted Completion excludes weather cancellations. Raw Completion includes weather cancellations.
SkyWest's total aircraft in service at December 31, 2015 was 660, a net decrease of 57 aircraft from December 31, 2014, summarized as follows:
Changes to Operating Fleet During 2015 Year
Aircraft available for scheduled service at December 2014:
717
New E175 aircraft with United Airlines ("United"):
20
New E175 aircraft with Alaska Airlines ("Alaska"):
5
New ERJ145 aircraft with American Airlines ("American"):
16
New CRJ200 aircraft with Delta Airlines ("Delta"):
5
Total Additions:
46
EMB120 aircraft from multiple partners:
(27)
ERJ145 aircraft from United:
(54)
CRJ200 aircraft from multiple partners:
(22)
Total Removals:
(103)
Aircraft available for scheduled service at December 2015:
660
SkyWest's total aircraft in service increased by 4 net aircraft from September 30, 2015 to December 31, 2015 as follows:
Changes to Operating Fleet During Q4 2015
Aircraft available for scheduled service at September 2015:
656
New E175 aircraft with Alaska:
2
CRJ200 aircraft redeployed with multiple partners:
5
Total Additions:
7
ERJ145 aircraft removed from United:
(3)
Aircraft available for scheduled service at December 2015:
660
Under its fleet transition plan, SkyWest generated approximately 25,000 additional block hours, or 14%, with its dual class aircraft (CRJ700s/900s and E175s) during Q4 2015, compared to Q4 2014. SkyWest had a reduction of approximately 84,000 block hours (22%) with its less profitable 50-seat and smaller aircraft (CRJ200s, ERJ145s/135s and EMB120s) during Q4 2015, compared to Q4 2014.
The following table outlines SkyWest's anticipated delivery schedule for new E175 aircraft through June 2017:
E175 Aircraft Scheduled Deliveries
December
2015
1H 2016
2H 2016
1H 2017
Anticipated June 2017
United
40
7
7
11
65
Alaska
5
4
6
-
15
Delta
-
-
13
6
19
Total E175 aircraft:
45
11
26
17
99
Q4 2015 Capital and Liquidity Update
SkyWest had $498 million in cash and marketable securities at December 31, 2015, a decrease of $70 million from September 30, 2015. SkyWest made capital investments of $8 million during Q4 2015 to acquire two E175 aircraft and used $94 million in cash to extinguish $128 million in debt. SkyWest issued $46 million in new long-term debt during Q4 2015 to finance the 2 new E175s delivered during the quarter. SkyWest anticipates using approximately $44 million in cash towards the purchase of additional E175 aircraft and related spare parts and spare engines scheduled for delivery in the first half of 2016.
Q4 2015 Special Items
During Q4 2015 SkyWest used $94 million in cash to extinguish $128 million in higher-rate junior notes in our capital structure. This generated a net gain of $33 million for the quarter.
During Q4 2015 SkyWest resolved a contract matter for $8 million reflected as contra-revenue in the reported numbers.
The $25 million net gain represented by these two items, while included in GAAP income, is excluded from adjusted net income for the quarter as reported herein.
Reconciliation of Non-GAAP financial measures
Although SkyWest's financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), SkyWest management believes that certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of SkyWest's ongoing operations and may be useful for period-over-period comparisons of such operations. The following table sets forth supplemental financial data and corresponding reconciliations to GAAP financial statements for the three and twelve-month periods ended December 31, 2015 and 2014. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all, items that may affect SkyWest's net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies.
Reconciliation to Adjusted Net Income
(dollars in thousands except EPS)
Three months ended December 31, 2015
Net Income per Diluted Share
Pre-tax income
Income tax
Net Income
GAAP income
$ 65,760
$ (25,306)
$ 40,454
$ 0.78
Adjusted for:
Q4 2015 Adjustments (1)
(24,731)
9,517
(15,214)
$ (0.29)
Non-GAAP income
$ 41,029
$ (15,789)
$ 25,240
$ 0.49
Three months ended December 31, 2014
Net Income per Diluted Share
Pre-tax income
Income tax
Net Income
GAAP income (loss)
$ (36,511)
$ 8,644
$ (27,867)
$ (0.54)
Adjusted for:
Special items for fleet reduction (2)
$ 69,977
$ (26,381)
43,596
0.85
Non-GAAP income
$ 33,466
$ (17,737)
$ 15,729
$ 0.31
Year ended December 31, 2015
Net Income per Diluted Share
Pre-tax income
Income tax
Net Income
GAAP income
$ 194,322
$ (76,505)
$ 117,817
$ 2.27
Adjusted for:
Q4 2015 Adjustments (1)
$ (24,731)
$ 9,517
(15,214)
(0.29)
Non-GAAP income
$ 169,591
$ (66,988)
$ 102,603
$ 1.98
Year ended December 31, 2014
Net Income per Diluted Share
Pre-tax income
Income tax
Net Income
GAAP income (loss)
$ (16,343)
$ (7,811)
$ (24,154)
$ (0.47)
Adjusted for:
Gain on Sale of Equity Investment (3)
$ (24,922)
$ 9,470
$ (15,452)
Special items for fleet reduction (2)
74,777
(28,415)
46,362
Total Adjustments
$ 49,855
$ (18,945)
$ 30,910
$ 0.61
Non-GAAP income
$ 33,512
$ (26,756)
$ 6,756
$ 0.14
(1) Adjusts for a gain from early debt payoff of approximately $32.6 million, partially offset by a resolution of contract matter with a major partner of approximately $7.9 million reflected as a reduction to revenue. This adjustment allows investors to better understand and analyze our recurring core performance in the periods presented.
(2) Adjusts for costs resulting from the removal of a specific aircraft from our operations. This adjustment better allows investors to understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.
(3) Adjusts for the gain from the sale of our equity investment in TRIP Linhas Aereas. This adjustment allows investors to better understand and analyze our recurring core performance in the periods presented.
Reconciliation to Adjusted Operating Income
(dollars in thousands)
Three months ended December 31,
2015
2014
GAAP revenue
$ 752,743
$ 813,855
Q4 2015 Adjustments (1)
7,860
-
Adjusted revenue
$ 760,603
$ 813,855
GAAP operating expenses
$ 700,532
$ 833,555
Q4 2014 Special items (2)
-
(69,977)
Adjusted operating expenses
$ 700,532
$ 763,578
GAAP operating income (loss)
$ 52,211
$ (19,700)
Adjusted operating income
60,071
50,277
GAAP operating income (loss) margin (deficit)
6.9%
-2.4%
Adjusted operating income margin
7.9%
6.2%
(1) Adjusts for a resolution of a contract matter with a major partner. This adjustment allows investors to better understand and analyze our recurring core performance in the periods presented.
(2) Adjusts for costs resulting from the removal of a specific aircraft from our operations. This adjustment better allows investors to understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.
About SkyWest
SkyWest was named on Forbes 'America's Best Employers 2015' list and was Air Transport World's Regional Airline of the Year in 2014. SkyWest is the holding company for two scheduled passenger airline operations and an aircraft leasing company and is headquartered in St. George, Utah. SkyWest's airline companies provide commercial air service in cities across the United States, Canada, Mexico and the Caribbean with more than 3,300 scheduled daily flights. SkyWest Airlines operates through partnerships with United, Delta, US Airways, American and Alaska Airlines. ExpressJet operates through partnerships with United, Delta and American. SkyWest continues to set the standard for excellence in the regional airline industry with unmatched value for customers, shareholders and its nearly 20,000 employees. This press release and additional information regarding SkyWest can be accessed at http://inc.skywest.com.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this release contains forward-looking statements. SkyWest may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass SkyWest's beliefs, expectations, hopes or intentions regarding future events. Words such as "forecasts", "expects," "intends," "believes," "anticipates," "estimates", "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statement. Readers should note that many factors could affect the future operating and financial results of SkyWest, SkyWest Airlines or ExpressJet, and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to, the prospects of entering into agreements with other carriers to fly new aircraft, ongoing negotiations between SkyWest, SkyWest Airlines and ExpressJet and their major partners regarding their contractual obligations, uncertainties regarding operation of new aircraft, the ability to attract and retain qualified pilots, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to obtain aircraft financing.
Actual operational and financial results of SkyWest, SkyWest Airlines and ExpressJet will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the ability of ExpressJet to realize potential synergies and other anticipated financial impacts of the consolidation of its operations, the possibility that future financial and operating results of ExpressJet may not meet SkyWest's forecasts and the timing of ongoing consolidation of the operations of ExpressJet, if achieved; the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel; the financial stability of SkyWest's major partners and any potential impact of their financial condition on the operations of SkyWest, SkyWest Airlines, or ExpressJet; fluctuations in flight schedules, which are determined by the major partners for whom SkyWest's operating airlines conduct flight operations; variations in market and economic conditions; labor relationships; the impact of global instability; rapidly fluctuating fuel costs; the degree and nature of competition; potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; the ability to attract and retain qualified pilots and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWest's actual results to differ from management's current expectations are contained in SkyWest's filings with the Securities and Exchange Commission; including the section of SkyWest's Annual Report on Form 10-K for the year ended December 31, 2014, entitled "Risk Factors."
SkyWest, Inc.
Condensed Consolidated Statements of Income (Loss)
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
Three Months Ended
December 31
Twelve Months Ended
December 31,
2015
2014
2015
2014
OPERATING REVENUES:
Passenger
$ 736,938
$ 795,946
$ 3,030,023
$ 3,168,000
Ground handling and other
15,805
17,909
65,539
69,447
Total operating revenues
752,743
813,855
3,095,562
3,237,447
OPERATING EXPENSES:
Salaries, wages and benefits
297,261
313,902
1,203,312
1,258,155
Aircraft maintenance, materials and repairs
142,891
172,868
604,863
682,773
Aircraft rentals
66,837
72,652
273,695
305,334
Depreciation and amortization
67,554
67,253
264,507
259,642
Aircraft fuel
27,870
38,828
118,124
193,247
Ground handling services
19,713
23,471
82,694
123,917
Special items
-
69,977
-
74,777
Other operating expenses
78,406
74,604
313,852
314,754
Total operating expenses
700,532
833,555
2,861,047
3,212,599
OPERATING INCOME (LOSS)
52,211
(19,700)
234,515
24,848
OTHER INCOME (EXPENSE):
Interest income
350
488
1,997
4,096
Interest expense
(19,391)
(17,299)
(75,850)
(65,995)
Other, net
32,590
___-
33,660
20,708
Total other expense, net
13,549
(16,811)
(40,193)
(41,191)
INCOME (LOSS) BEFORE INCOME TAXES
65,760
(36,511)
194,322
(16,343)
PROVISION (BENEFIT) FOR INCOME TAXES
25,306
(8,644)
76,505
7,811
NET INCOME (LOSS)
$ 40,454
$ (27,867)
$ 117,817
$ (24,154)
BASIC EARNINGS (LOSS) PER SHARE
$ 0.80
$ (0.54)
$ 2.31
$ (0.47)
DILUTED EARNINGS (LOSS) PER SHARE
$ 0.78
$ (0.54)
$ 2.27
$ (0.47)
Weighted average common shares:
Basic
50,880
51,174
51,077
51,237
Diluted
51,657
51,174
51,825
51,237
SkyWest, Inc.
Summary of Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
December 31, 2015
December 31, 2014
Cash, restricted cash, and marketable securities
$ 497,919
$ 559,130
Other current assets
519,651
530,371
Total current assets
$ 1,017,570
$ 1,089,501
Property and equipment, net
3,432,597
2,981,188
Deposit on aircraft
38,150
40,000
Other long term assets
314,569
299,239
Total assets
$ 4,802,886
$ 4,409,928
Current liabilities
$ 751,386
$ 684,355
Long-term liabilities
2,545,065
2,325,227
Stockholders' equity
1,506,435
1,400,346
Total liabilities and stockholder's equity
$4,802,886
$ 4,409,928
Unaudited Operating Highlights
Three Months Ended
December 31
Twelve Months Ended
December 31
2015
2014
Change
2015
2014
Change
Passengers carried
13,614,945
14,339,705
(5.1) %
56,228,593
58,962,010
(4.6) %
Revenue passenger miles (000)
7,231,965
7,715,787
(6.3) %
29,671,911
31,499,397
(5.8) %
Available seat miles (000)
8,768,088
9,452,653
(7.2) %
35,902,503
38,220,150
(6.1) %
Block hours
500,445
559,143
(10.5) %
2,074,809
2,275,562
(8.8) %
Departures
293,467
327,835
(10.5) %
1,226,897
1,357,454
(9.6) %
Passenger load factor
82.5%
81.6%
0.90 pts
82.6%
82.4%
0.20 pts
Yield per revenue passenger mile
$ 0.102
$ 0.103
(1.0) %
$ 0.102
$ 0.101
1.0 %
Revenue per available seat mile
$ 0.086
$ 0.086
NC
$ 0.086
$ 0.085
1.2 %
Cost per available seat mile
$ 0.082
$ 0.090
(8.9) %
$ 0.082
$ 0.086
(4.7) %
Fuel cost per available seat mile
$ 0.003
$ 0.004
(25.0) %
$ 0.003
$ 0.005
(40.0) %
Average passenger trip length
531
538
(1.3) %
528
534
(1.1)%
Aircraft in Scheduled Service for 2015
50 seats
65-76 seats
EMB120
Total
Aircraft in schedule: December 31, 2014
467
223
27
717
65-76 seat additions (United and Alaska)
-
25
-
25
50 seat additions (Delta and American)
21
-
-
21
50 seat reductions (multiple partners)
(76)
-
-
(76)
Turbo prop reductions (multiple partners)
-
-
(27)
(27)
Aircraft in schedule: December 31, 2015
412
248
-
660
Aircraft counts above exclude aircraft removed from scheduled service.
Completed Block Hours by Aircraft Type for 2015
Q4-2015
Q4-2014
% Change
FY 2015
FY 2014
% Change
CRJ200
154,819
172,403
(10.2) %
659,358
719,938
(8.4) %
CRJ700/900s
164,275
165,789
(0.9) %
654,364
665,133
(1.6) %
ERJ145/135
140,525
188,419
(25.4) %
622,650
774,171
(19.6) %
E175
40,821
14,316
185.1 %
126,108
23,076
446.5%
EMB120
-
18,216
(100.0) %
12,324
93,244
(86.8) %
500,440
559,143
(10.5) %
2,074,804
2,275,562
(8.8) %
Completed Block Hours by Airline for 2015
Q4-2015
Q4-2014
Variance
FY 2015
FY 2014
Variance
SkyWest Airlines
271,068
265,389
2.1 %
1,074,809
1,060,149
1.4 %
ExpressJet
229,372
293,754
(21.9) %
999,995
1,215,413
(17.7) %
500,440
559,143
(10.5) %
2,074,804
2,275,562
(8.8) %
Quarterly Fleet, Block Hour and ASM Production Forecast for 2016
As of
March 31, 2016
As of
June 30, 2016
As of
Sept. 30, 2016
As of
Dec. 31, 2016
Fleet Summary
(Estimate)
(Estimate)
(Estimate)
(Estimate)
Regional Jets:
50 seat RJs
395
385
381
372
65-76 seat CRJs
197
195
190
183
76 seat E175s
47
52
63
77
Totals
639
632
634
632
Q1 16
Q2 16
Q3 16
Q4 16
Totals
(Estimate)
(Estimate)
(Estimate)
(Estimate)
(Estimate)
Block hours
ASMs
480,000
8.3b
481,000
8.3b
487,000
8.3b
474,000
7.7b
1,922,000
32.6b
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/skywest-inc-announces-fourth-quarter-2015-and-full-year-profit-300215581.html
SOURCE SkyWest, Inc.
Copyright 2016 PR Newswire