MIRAMAR,
Fla., Aug. 3, 2023 /PRNewswire/ -- Spirit
Airlines, Inc. ("Spirit" or the "Company") (NYSE: SAVE) today
reported second quarter 2023 financial results.
|
Second Quarter 2023
|
|
(unaudited)
|
|
As Reported
|
|
Adjusted1
|
Total operating
revenues
|
$1,432.5
million
|
|
$1,432.5
million
|
Operating income
(loss)
|
$20.2
Million
|
|
$47.0
Million
|
Operating
margin
|
1.4 %
|
|
3.3 %
|
Net income
(loss)
|
$(2.3)
million
|
|
$32.3
million
|
Diluted earnings (loss)
per share
|
$(0.02)
|
|
$0.29
|
"Unit revenue for the second quarter 2023 was strong and well
above pre-Covid historical averages," said Ted Christie, Spirit's President and Chief
Executive Officer. "However, demand for the peak summer travel
period has been softer than expected, resulting in lower fare
levels on the routes we serve. This summer we are comparing to a
period of exceptionally strong domestic and near-field
international demand in 2022, while at the same time seeing demand
shift away from these regions towards long-haul international.
Difficult weather and challenging Air Traffic Control initiatives
are also creating a significant headwind to unit
revenue."
"These trends continued throughout July and we are assuming they
will continue into the fall. However, once the international summer
travel season ends and kids go back to school, we anticipate that
demand will shift back towards domestic. This should mean a more
normal pricing and demand environment for the peak holiday travel
periods in the fourth quarter."
Second Quarter 2023 Financial Results
For the second
quarter 2023, Spirit reported a net loss of $2.3 million, or a net loss of $0.02 per diluted share. Excluding special items,
adjusted net income for the second quarter 2023 was $32.3 million1, or an adjusted net
income of $0.29 per diluted
share1.
For the second quarter 2023, Spirit reported a pre-tax income of
$15.0 million and a pre-tax margin of
1.0 percent. Adjusted pre-tax income for the second quarter was
$41.7 million1 and
adjusted pre-tax margin was 2.9 percent1.
Operations
For the second quarter 2023, the Company's
load factor was 82.9 percent. The Company experienced numerous
adverse weather events across its network during the second quarter
leading to a DOT on-time performance2 of 64.4 percent
and a DOT Completion Factor2 of 97.5 percent. Excluding
these weather-related and other uncontrollable events, the
Company's controllable completion factor for the second quarter
2023 was 99.7 percent5.
Revenue
Total operating revenues for the second
quarter 2023 were $1.4 billion, an
increase of 4.8 percent compared to the second quarter 2022. Total
revenue per ASM ("TRASM") was 10.30
cents, a decrease of 10.7 percent compared to second quarter
2022 on 17.4 percent more capacity.
On a per passenger flight segment basis, compared to the same
period in 2022, total revenue per passenger flight segment
("segment") for the second quarter 2023 decreased 8.9 percent to
$128.03. Compared to the second
quarter 2022, fare revenue per segment decreased 20.1 percent to
$57.86 and non-ticket revenue per
segment increased 2.9 percent to $70.173.
Cost Performance
Total GAAP operating expenses for the
second quarter 2023 were about flat compared to the second quarter
2022, increasing 0.02 percent to $1,412.3
million. Adjusted operating expenses for the second quarter
2023 were also about flat compared to the second quarter 2022,
increasing 0.2 percent to $1,385.5
million4. Lower fuel expense year over year,
primarily driven by lower average fuel prices, offset increases
driven by increased flight volume, additional aircraft,
inflationary wage pressures and other items.
Aircraft utilization in the second quarter 2023 was 11.3 hours,
up 5.6 percent compared to the 10.7 hours in the same period of
2022.
"Despite achieving record quarterly revenue in the second
quarter 2023, productivity headwinds, primarily related to pilot
constraints and NEO engine availability issues, resulted in a
disappointing operating margin. With these issues as well as
an acute reduction in the domestic and Latin America demand outlook, we estimate our
third quarter operating margin will range between negative 5.5
percent and negative 7.5 percent," said Scott Haralson, Spirit's Chief Financial
Officer.
"On a positive note, pilot attrition levels have been improving
such that, assuming they stay where they are, or improve further,
our growth is no longer constrained by pilots. If we weren't
burdened with the NEO engine availability issues, we could achieve
full fleet utilization and more normalized margin and CASM ex-fuel
production by year-end."
"Additionally, last week we reached an amendment with Airbus on
our fleet order that reduces 2024 deliveries and spreads the
remaining deliveries over 2025 to 2029, giving us a consistent
level of deliveries for the remainder of the decade. We also
upgauged all of our A319neo orders to A321neos. I'll share more
details on our earnings call today but we are very pleased with the
changes and appreciate Airbus partnering with us to provide a
stable and predictable order book through the end of the decade
with an aircraft mix we view as beneficial to driving efficiencies
throughout our business."
Fleet
Spirit took delivery of five new A320neo
aircraft and one A321neo aircraft during the second quarter 2023
and retired three A319ceo aircraft. The Company ended the quarter
with 198 aircraft in its fleet, an increase of 10.0 percent since
the end of second quarter 2022.
Liquidity and Capital Deployment
Spirit ended second
quarter 2023 with unrestricted cash and cash equivalents,
short-term investment securities and liquidity available under the
Company's revolving credit facility of $1.5
billion.
Total capital expenditures for the six months ended
June 30, 2023, were $146.1
million, primarily related to net outflows of aircraft
pre-delivery deposits, expenditures related to the building of
Spirit's new headquarters campus in Dania Beach, Florida and spare parts, including spare
engines.
Interest expense in the second quarter 2023 included a favorable
mark to market adjustment of $14.2
million related to the change in fair value of the
derivative liability associated the Company's Convertible Notes Due
2026.
Second Quarter 2023 Highlights
- Recognized for safety with the FAA's "Aviation Maintenance
Technician Diamond Award of Excellence" for the fifth consecutive
year
- Named Most Affordable Airline and No. 2 of 11 overall by
WalletHub in its 2023 Best Airline Awards
- Ratified an amended collective bargaining agreement with its
flight attendants represented by the Association of Flight
Attendants
- Inaugurated the first Airbus A321neo into Spirit's young,
fuel-efficient fleet with plans to accept seven more in
2023
- Announced that four new partners joined the Spirit Wings Pilot
Pathway program: Lewis University in
Romeoville, Illinois;
International Aero Academy in Lakeland,
Florida; US Aviation Academy in Denton, Texas; and Thrust Flight in
Addison, Texas. The Spirit Wings
Pilot Pathway program provides graduates with a fast track to a
rewarding career as a Spirit First Officer
- Initiated service to Charleston,
South Carolina and San Jose,
California, in addition to nearly 20 new routes connecting
our existing stations
Merger Agreement with JetBlue
On October 19, 2022, Spirit stockholders voted to
approve the Agreement and Plan of Merger (the "Merger Agreement"),
among Spirit, JetBlue Airways Corporation ("JetBlue") and Sundown
Acquisition Corp., a direct, wholly owned subsidiary of JetBlue,
which was entered into on July 28,
2022. The completion of the transaction is subject to
customary closing conditions, including receipt of required
regulatory approvals. Spirit and JetBlue expect to conclude the
regulatory process and close the transaction no later than the
first half of 2024. On March 7, 2023,
the U.S. Justice Department filed suit to block the merger. The
trial date for the lawsuit has been set for October 16, 2023.
Conference Call/Webcast Detail
Spirit will conduct a
conference call to discuss these results tomorrow, August 3,
2023, 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 https://ir.spirit.com.
An archive of the webcast will be available under "Events &
Presentations" for 60 days.
About Spirit Airlines
Spirit 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, refreshments and
Wi-Fi — something we call À La Smarte®. Our Fit Fleet® is one of
the youngest and most fuel-efficient in the United States. We serve destinations
throughout the U.S., Latin America
and the Caribbean, making it
possible for our Guests to venture further and discover more than
ever before. We are committed to inspiring positive change in the
communities where we live and work through the Spirit Charitable
Foundation. Come save with us at spirit.com.
Forward Looking Guidance
The forward-looking guidance
items provided in this release are based on the Company's current
estimates and are not a guarantee of future performance. There
could be significant risks and uncertainties that could cause
actual results to differ materially, including the risk factors
discussed in the Company's reports on file with the Securities and
Exchange Commission. Spirit undertakes no duty to update any
forward-looking statements or estimates.
Investors are encouraged to read this press release in
conjunction with the company's Investor Update which provides
additional information about the company's forward-looking
estimates for certain financial metrics and is included along with
this press release in the Current Report on Form 8-K furnished to
the U.S. Securities and Exchange Commission. The Investor Update is
also available at https://ir.spirit.com. Management will
also discuss certain business outlook items during the quarterly
earnings conference call.
Investors are also 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 (Loss), Adjusted Pre-Tax Income (Loss) and
Adjusted Operating Income (Loss) to GAAP Net Income (Loss)" table
below for more details.
|
(2)
|
Results are based on
preliminary data compared to major and regional U.S.
airlines.
|
(3)
|
See "Calculation of
Total Non-Ticket Revenue per Passenger Flight Segment" table below
for more details.
|
(4)
|
See "Reconciliation of
Adjusted Operating Expenses to GAAP Operating Expenses" table below
for more details.
|
(5)
|
Controllable completion
factor excludes the following events, which are outside of the
Company's control, from the calculation of completion factor:
weather, air traffic and uncontrolled airport/runway closures,
which may include acts of nature, disabled aircraft incidents on
the runway, political/civil unrest and disturbances preventing
normal operations within airline control, among others, and any
city/state closures as declared by local authorities and asserted
by our Security department.
|
Cautionary Statement Regarding Forward Looking
Statements
Forward-Looking 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. Forward-looking statements
include, without limitation, guidance for 2023 and statements
regarding the Company's intentions and expectations regarding
revenues, cash burn, capacity and passenger demand, additional
financing, capital spending, operating costs and expenses, pre-tax
income, pre-tax margin, taxes, hiring, aircraft deliveries and
stakeholders, vendors and government support. 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, results of operations and financial condition, 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,
the consummation of the merger with JetBlue 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 Annual Report on Form 10-K
for the fiscal year ended December 31,
2022, as supplemented in the Company's Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 2023 and
June 30, 2023. 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 Consolidated
Statement of Operations
|
(unaudited, in
thousands, except per-share amounts)
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
June 30,
|
Percent
|
|
June 30,
|
Percent
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
Change
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
$ 1,410,061
|
|
$ 1,347,871
|
|
4.6
|
|
$ 2,737,534
|
|
$ 2,297,615
|
19.1
|
Other
|
22,411
|
|
18,772
|
|
19.4
|
|
44,712
|
|
36,343
|
23.0
|
Total operating revenues
|
1,432,472
|
|
1,366,643
|
|
4.8
|
|
2,782,246
|
|
2,333,958
|
19.2
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Aircraft
fuel
|
391,032
|
|
558,633
|
|
(30.0)
|
|
878,743
|
|
927,218
|
(5.2)
|
Salaries, wages and
benefits
|
407,705
|
|
308,634
|
|
32.1
|
|
796,890
|
|
614,524
|
29.7
|
Landing fees and other
rents
|
106,487
|
|
92,021
|
|
15.7
|
|
203,832
|
|
174,957
|
16.5
|
Depreciation and
amortization
|
80,542
|
|
76,469
|
|
5.3
|
|
158,533
|
|
152,660
|
3.8
|
Aircraft
rent
|
92,101
|
|
68,632
|
|
34.2
|
|
177,368
|
|
134,676
|
31.7
|
Maintenance, materials
and repairs
|
56,825
|
|
45,407
|
|
25.1
|
|
111,239
|
|
90,922
|
22.3
|
Distribution
|
50,701
|
|
48,724
|
|
4.1
|
|
98,718
|
|
84,075
|
17.4
|
Special
charges
|
19,972
|
|
18,004
|
|
10.9
|
|
33,955
|
|
33,567
|
1.2
|
Loss on disposal of
assets
|
802
|
|
10,636
|
|
(92.5)
|
|
7,902
|
|
22,188
|
(64.4)
|
Other operating
(1)
|
206,094
|
|
184,813
|
|
11.5
|
|
407,250
|
|
355,969
|
14.4
|
Total operating expenses
|
1,412,261
|
|
1,411,973
|
|
—
|
|
2,874,430
|
|
2,590,756
|
10.9
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
20,211
|
|
(45,330)
|
|
NM
|
|
(92,184)
|
|
(256,798)
|
(64.1)
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
28,880
|
|
30,124
|
|
(4.1)
|
|
80,673
|
|
68,004
|
18.6
|
Capitalized
interest
|
(8,445)
|
|
(5,677)
|
|
48.8
|
|
(16,093)
|
|
(10,939)
|
47.1
|
Interest
income
|
(15,962)
|
|
(2,561)
|
|
NM
|
|
(31,396)
|
|
(3,028)
|
NM
|
Other (income)
expense
|
766
|
|
296
|
|
158.8
|
|
1,308
|
|
713
|
83.5
|
Total other (income) expense
|
5,239
|
|
22,182
|
|
(76.4)
|
|
34,492
|
|
54,750
|
(37.0)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
14,972
|
|
(67,512)
|
|
NM
|
|
(126,676)
|
|
(311,548)
|
(59.3)
|
Provision (benefit) for
income taxes
|
17,321
|
|
(15,106)
|
|
(214.7)
|
|
(20,416)
|
|
(64,439)
|
(68.3)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(2,349)
|
|
$
(52,406)
|
|
NM
|
|
$
(106,260)
|
|
$
(247,109)
|
(57.0)
|
Basic earnings (loss) per share
|
$
(0.02)
|
|
$
(0.48)
|
|
NM
|
|
$
(0.97)
|
|
$
(2.27)
|
(57.2)
|
Diluted earnings (loss) per
share
|
$
(0.02)
|
|
$
(0.48)
|
|
NM
|
|
$
(0.97)
|
|
$
(2.27)
|
(57.2)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares, basic
|
109,161
|
|
108,697
|
|
0.4
|
|
109,136
|
|
108,639
|
0.5
|
Weighted-average
shares, diluted
|
109,161
|
|
108,697
|
|
0.4
|
|
109,136
|
|
108,639
|
0.5
|
|
|
(1)
|
Includes an estimated
litigation settlement of $6.0 million. See "Special Items" table
below for more information.
|
NM: "Not
Meaningful"
|
SPIRIT AIRLINES,
INC.
|
Selected Operating
Statistics
|
(unaudited)
|
|
|
Three Months Ended June 30,
|
|
Change
|
Operating Statistics
|
2023
|
|
2022
|
|
Available seat miles
(ASMs) (thousands)
|
13,908,113
|
|
11,846,547
|
|
17.4 %
|
Revenue passenger miles
(RPMs) (thousands)
|
11,532,450
|
|
10,192,686
|
|
13.1 %
|
Load factor
(%)
|
82.9
|
|
86.0
|
|
(3.1) pts
|
Passenger flight
segments (thousands)
|
11,189
|
|
9,719
|
|
15.1 %
|
Departures
|
74,787
|
|
63,148
|
|
18.4 %
|
Total operating revenue
per ASM (TRASM) (cents)
|
10.30
|
|
11.54
|
|
(10.7) %
|
Average yield
(cents)
|
12.42
|
|
13.41
|
|
(7.4) %
|
Fare revenue per
passenger flight segment ($)
|
57.86
|
|
72.41
|
|
(20.1) %
|
Non-ticket revenue per
passenger flight segment ($)
|
70.17
|
|
68.20
|
|
2.9 %
|
Total revenue per
passenger flight segment ($)
|
128.03
|
|
140.61
|
|
(8.9) %
|
CASM (cents)
|
10.15
|
|
11.92
|
|
(14.8) %
|
Adjusted CASM (cents)
(1)
|
9.96
|
|
11.68
|
|
(14.7) %
|
Adjusted CASM ex-fuel
(cents) (1)(2)
|
7.15
|
|
6.96
|
|
2.7 %
|
Fuel gallons consumed
(thousands)
|
149,513
|
|
129,972
|
|
15.0 %
|
Average fuel cost per
gallon ($)
|
2.62
|
|
4.30
|
|
(39.1) %
|
Aircraft at end of
period
|
198
|
|
180
|
|
10.0 %
|
Average daily aircraft
utilization (hours)
|
11.3
|
|
10.7
|
|
5.6 %
|
Average stage length
(miles)
|
1,010
|
|
1,022
|
|
(1.2) %
|
|
Six Months Ended June 30,
|
|
Change
|
Operating Statistics
|
2023
|
|
2022
|
|
Available seat miles
(ASMs) (thousands)
|
27,117,249
|
|
23,565,443
|
|
15.1 %
|
Revenue passenger miles
(RPMs) (thousands)
|
22,207,330
|
|
19,242,720
|
|
15.4 %
|
Load factor
(%)
|
81.9
|
|
81.7
|
|
0.2
pts
|
Passenger flight
segments (thousands)
|
21,787
|
|
18,224
|
|
19.6 %
|
Departures
|
147,536
|
|
124,106
|
|
18.9 %
|
Total operating revenue
per ASM (TRASM) (cents)
|
10.26
|
|
9.90
|
|
3.6 %
|
Average yield
(cents)
|
12.53
|
|
12.13
|
|
3.3 %
|
Fare revenue per
passenger flight segment ($)
|
57.66
|
|
61.58
|
|
(6.4) %
|
Non-ticket revenue per
passenger flight segment ($)
|
70.04
|
|
66.49
|
|
5.3 %
|
Total revenue per
passenger flight segment ($)
|
127.70
|
|
128.07
|
|
(0.3) %
|
CASM (cents)
|
10.60
|
|
10.99
|
|
(3.5) %
|
Adjusted CASM (cents)
(1)
|
10.42
|
|
10.76
|
|
(3.2) %
|
Adjusted CASM ex-fuel
(cents) (1)(2)
|
7.18
|
|
6.82
|
|
5.3 %
|
Fuel gallons consumed
(thousands)
|
291,855
|
|
254,888
|
|
14.5 %
|
Average fuel cost per
gallon ($)
|
3.01
|
|
3.64
|
|
(17.3) %
|
Average daily aircraft
utilization (hours)
|
11.3
|
|
10.7
|
|
5.6 %
|
Average stage length
(miles)
|
999
|
|
1,034
|
|
(3.4) %
|
|
|
(1)
|
Excludes operating
special items.
|
(2)
|
Excludes fuel expense
and operating special items.
|
Non-GAAP Financial Measures
The Company evaluates its financial performance utilizing
various accounting principles generally accepted in the United States of America ("GAAP") and
non-GAAP financial measures, including Adjusted operating expenses,
Adjusted operating income (loss), Adjusted operating margin,
Adjusted pre-tax income (loss), Adjusted pre-tax margin, Adjusted
net income (loss), Adjusted provision (benefit) for income taxes,
Adjusted diluted earnings (loss) per share, Adjusted CASM and
Adjusted CASM ex-fuel. These non-GAAP financial measures are
provided as supplemental information to the financial information
presented in this press release that is calculated and presented in
accordance with GAAP and these non-GAAP financial measures are
presented because management believes that they supplement or
enhance management's, analysts' and investors' overall
understanding of the Company's underlying financial performance and
trends and facilitate comparisons among current, past and future
periods.
Because the non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered superior to and
are not intended to be considered in isolation or as a substitute
for the related GAAP financial measures presented in the press
release and may not be the same as or comparable to similarly
titled measures presented by other companies due to possible
differences in the method of calculation and in the items being
adjusted. We encourage investors to review our financial statements
and other filings with the Securities and Exchange Commission in
their entirety and not to rely on any single financial
measure.
The information below provides an explanation of certain
adjustments reflected in the non-GAAP financial measures and shows
a reconciliation of non-GAAP financial measures reported in this
press release (other than forward-looking non-GAAP financial
measures) to the most directly comparable GAAP financial measures.
Within the financial tables presented, certain columns and rows may
not add due to the use of rounded numbers. Per unit amounts
presented are calculated from the underlying amounts.
The Company believes that adjusting for a litigation loss
contingency (recorded within other operating expenses within the
Company's Condensed Consolidated Statement of Operations), loss on
disposal of assets and special charges is useful to investors
because these items are not indicative of the Company's ongoing
performance and the adjustments are similar to those made by our
peers and allow for enhanced comparability to other
airlines.
Operating expenses per available seat mile ("CASM") is a common
metric used in the airline industry to measure an airline's cost
structure and efficiency. We exclude aircraft fuel and related
taxes and special items from operating expenses to determine
Adjusted CASM ex-fuel. We also believe that excluding fuel costs
from certain measures 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 and increases comparability with other airlines
that also provide a similar metric.
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)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
revenues
|
|
|
|
|
|
|
|
Fare
|
$
647,344
|
|
$
703,778
|
|
$
1,256,205
|
|
$
1,122,196
|
Non-fare
|
762,717
|
|
644,093
|
|
1,481,329
|
|
1,175,419
|
Total passenger
revenues
|
1,410,061
|
|
1,347,871
|
|
2,737,534
|
|
2,297,615
|
Other
revenues
|
22,411
|
|
18,772
|
|
44,712
|
|
36,343
|
Total operating revenues
|
$
1,432,472
|
|
$
1,366,643
|
|
$
2,782,246
|
|
$
2,333,958
|
|
|
|
|
|
|
|
|
Non-ticket revenues (1)
|
$
785,128
|
|
$
662,865
|
|
$
1,526,041
|
|
$
1,211,762
|
|
|
|
|
|
|
|
|
Passenger
segments
|
11,189
|
|
9,719
|
|
21,787
|
|
18,224
|
|
|
|
|
|
|
|
|
Non-ticket revenue per passenger flight segment
($)
|
$70.17
|
|
$68.20
|
|
$70.04
|
|
$66.49
|
|
|
(1)
|
Non-ticket revenues
equal the sum of non-fare passenger revenues and other
revenues.
|
Special
Items
|
(unaudited)
(1)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating special items include the
following:
|
|
|
|
|
|
|
|
Litigation loss
contingency (2)
|
$
6,000
|
|
$
—
|
|
$
6,000
|
|
$
—
|
Loss on disposal of
assets (3)
|
802
|
|
10,636
|
|
7,902
|
|
22,188
|
Operating special
charges (4)
|
19,972
|
|
18,004
|
|
33,955
|
0
|
33,567
|
Total special items (1)
|
$
26,774
|
|
$
28,640
|
|
$
47,857
|
|
$
55,755
|
|
|
(1)
|
Refer to the section
"Non-GAAP Financial Measures" for additional
information.
|
(2)
|
2023 includes a $6
million litigation loss contingency (recorded within other
operating expenses within the Company's Condensed Consolidated
Statement of Operations), which is the Company's best estimate of
the probable loss related to a tentative settlement reached in
mediation for a maximum amount of $8.3 million. The total amount
paid will depend on a number of factors, including participation of
class members and any conditions on the settlement approved by the
Court.
|
(3)
|
2023 includes amounts
related to the loss on five aircraft sale leaseback transactions
and the write-off of obsolete assets and other adjustments,
partially offset by net gains related to the sale of seven A319
airframes and eleven A319 engines. 2022 includes amounts related to
the loss on seven aircraft sale leaseback transactions and the
impairment of one spare engine.
|
(4)
|
2023 includes legal,
advisory, retention award program and other fees related to the
Merger Agreement. 2022 includes amounts related to legal, advisory,
retention award program and other fees related to the former merger
agreement with Frontier Group Holdings.
|
Reconciliation of
Adjusted Operating Expenses to GAAP Operating
Expenses
|
(unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
(in thousands, except
CASM data in cents)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total operating expenses, as
reported
|
$
1,412,261
|
|
$
1,411,973
|
|
$
2,874,430
|
|
$
2,590,756
|
Less: Operating special
items expense (credit)
|
26,774
|
|
28,640
|
|
47,857
|
|
55,755
|
Adj. Operating
expenses, non-GAAP (1)
|
1,385,487
|
|
1,383,333
|
|
2,826,573
|
|
2,535,001
|
Less: Aircraft fuel
expense
|
391,032
|
|
558,633
|
|
878,743
|
|
927,218
|
Adj. Operating expenses
excluding fuel, non-GAAP (2)
|
$
994,455
|
|
$
824,700
|
|
$
1,947,830
|
|
$
1,607,783
|
|
|
|
|
|
|
|
|
Available seat
miles
|
13,908,113
|
|
11,846,547
|
|
27,117,249
|
|
23,565,443
|
|
|
|
|
|
|
|
|
CASM (cents)
|
10.15
|
|
11.92
|
|
10.60
|
|
10.99
|
Adj. CASM (cents)
(1)
|
9.96
|
|
11.68
|
|
10.42
|
|
10.76
|
Adj. CASM ex-fuel
(cents) (2)
|
7.15
|
|
6.96
|
|
7.18
|
|
6.82
|
|
|
(1)
|
Excludes operating
special items. Refer to the section "Non-GAAP Financial Measures"
for additional information.
|
(2)
|
Excludes operating
special items and aircraft fuel expense. Refer to the section
"Non-GAAP Financial Measures" for additional
information.
|
Reconciliation of
Adjusted Provision (Benefit) for Income Taxes to GAAP Provision
(Benefit) for Net Income (unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Provision (benefit) for income taxes, as
reported
|
$
17,321
|
|
$
(15,106)
|
|
$
(20,416)
|
|
$
(64,439)
|
Less: Net Income (loss)
tax impact of special items
|
7,886
|
|
(8,422)
|
|
(2,603)
|
|
(14,291)
|
Adj. Provision (benefit) for income taxes, net,
non-GAAP (1)
|
$
9,435
|
|
$
(6,684)
|
|
$
(17,813)
|
|
$
(50,148)
|
|
|
(1)
|
For 2023, the Company
determined the Adjusted Provision (benefit) for Income Taxes using
its statutory tax rate. For 2022, the Company used its estimated
annual effective tax rate, adjusted for special
items.
|
Reconciliation of
Adjusted Net Income (Loss), Adjusted Pre-Tax Income (Loss) and
Adjusted Operating Income
|
(Loss) to GAAP Net
Income (Loss)(unaudited) (1)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
(in thousands, except
per-share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss), as reported
|
$
(2,349)
|
|
$
(52,406)
|
|
$
(106,260)
|
|
$
(247,109)
|
Add: Provision
(benefit) for income taxes
|
17,321
|
|
(15,106)
|
|
(20,416)
|
|
(64,439)
|
Income (loss) before
income taxes, as reported
|
14,972
|
|
(67,512)
|
|
(126,676)
|
|
(311,548)
|
Pre-tax
margin
|
1.0 %
|
|
(4.9) %
|
|
(4.6) %
|
|
(13.3) %
|
Add: Special items
expense (credit) (2)
|
26,774
|
|
28,640
|
|
47,857
|
|
55,755
|
Adj. Income (loss)
before income taxes, non-GAAP (3)
|
41,746
|
|
(38,872)
|
|
(78,819)
|
|
(255,793)
|
Adj. Pre-tax margin,
non-GAAP (3)
|
2.9 %
|
|
(2.8) %
|
|
(2.8) %
|
|
(11.0) %
|
Add: Total other
(income) expense
|
5,239
|
|
22,182
|
|
34,492
|
|
54,750
|
Adj. Operating income
(loss), non-GAAP (3)
|
46,985
|
|
(16,690)
|
|
(44,327)
|
|
(201,043)
|
Adj. Operating margin,
non-GAAP (3)
|
3.3 %
|
|
(1.2) %
|
|
(1.6) %
|
|
(8.6) %
|
|
|
|
|
|
|
|
|
Adj. Provision
(benefit) for income taxes (4)
|
9,435
|
|
(6,684)
|
|
(17,813)
|
|
(50,148)
|
Adj. Net income (loss),
non-GAAP (3)
|
$
32,311
|
|
$
(32,188)
|
|
$
(61,006)
|
|
$
(205,645)
|
|
|
|
|
|
|
|
|
Weighted-average
shares, diluted (5)
|
111,711
|
|
108,697
|
|
109,136
|
|
108,639
|
|
|
|
|
|
|
|
|
Adj. Net income (loss)
per share, diluted (3)
|
$
0.29
|
|
$
(0.30)
|
|
$
(0.56)
|
|
$
(1.89)
|
|
|
|
|
|
|
|
|
Total operating revenues
|
$
1,432,472
|
|
$
1,366,643
|
|
$ 2,782,246
|
|
$ 2,333,958
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to the section
"Non-GAAP Financial Measures" for additional
information.
|
(2)
|
See "Special Items"
table above for more details.
|
(3)
|
Excludes operating
special items. Refer to the section "Non-GAAP Financial Measures"
for additional information.
|
(4)
|
See "Reconciliation of
Adjusted Provision (benefit) for Income Taxes to GAAP Provision
(benefit) for Net Income" table above for more details.
|
(5)
|
Second quarter 2023
includes the estimated dilutive impact from the outstanding
Convertible Notes Due 2025 and the estimated dilutive impact, if
any, from outstanding equity awards and warrants.
|
Reconciliation of
Adjusted Net Income (Loss) per Share to GAAP Net Income (Loss) per
Share (unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
(per share)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss) per share, diluted, as
reported
|
$
(0.02)
|
|
$
(0.48)
|
|
$
(0.97)
|
|
$
(2.27)
|
Add: Impact of special
items
|
0.25
|
|
0.26
|
|
0.44
|
|
0.51
|
Add: Tax impact of
special items (2)
|
0.07
|
|
(0.08)
|
|
(0.02)
|
|
(0.13)
|
Adj. Net income (loss) per share, diluted, non-GAAP
(1) (3)
|
$
0.29
|
|
$
(0.30)
|
|
$
(0.56)
|
|
$
(1.89)
|
|
|
(1)
|
Refer to the section
"Non-GAAP Financial Measures" for additional
information.
|
(2)
|
Reflects the difference
between the Company's GAAP Provision (benefit) for Income Taxes and
Adjusted Provision (benefit) for Income Taxes as presented in the
Reconciliation of Adjusted Net income to GAAP Net Income, on a per
share basis.
|
(3)
|
Within the table
presented, certain columns may not add due to the use of rounded
numbers.
|
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SOURCE Spirit Airlines, Inc.