MIRAMAR, Fla.,
Oct. 26, 2023
/PRNewswire/ -- Spirit Airlines, Inc. ("Spirit" or the "Company")
(NYSE: SAVE) today reported third quarter 2023 financial
results.
|
Third
Quarter 2023
(unaudited)
|
|
As Reported
|
Adjusted1
|
Total operating
revenues
|
$1,258.5 million
|
$1,258.5 million
|
Operating income
(loss)
|
$(188.8)
million
|
$(178.6)
million
|
Operating margin
|
(15.0) %
|
(14.2) %
|
Net income
(loss)
|
$(157.6)
million
|
$(149.8)
million
|
Diluted earnings (loss) per share
|
$(1.44)
|
$(1.37)
|
"Softer demand for our product and discounted fares in our
markets led to a disappointing outcome for the third quarter 2023.
We continue to see discounted fares for travel booked through the
pre-Thanksgiving period. And, unfortunately, we have not seen
the anticipated return to a normal demand and pricing
environment for the peak holiday periods.
Given these continued trends, we are evaluating our growth profile
and our competitive position. We have already taken the first steps
by modifying the cadence of our aircraft deliveries through the end
of the decade and slowing our capacity growth in the near term. We
continue to believe merging with JetBlue and creating a viable
competitor to the Big Four US airlines is in the best interest of
consumers, Team Members, and shareholders. We are prepared to
make the necessary strategic shifts to enable Spirit to compete
effectively in this new demand backdrop," said Ted Christie, Spirit's President and Chief
Executive Officer. "Our Team Members are among the best and most
innovative in the industry. I am confident that whether the Spirit
of tomorrow is different from today or whether the aircraft tail
says JetBlue or Spirit, their dedication to take care of our Guests
and each other will not change."
Third Quarter 2023 Financial Results
For the third quarter 2023, Spirit reported
a net loss of $157.6
million, or a net loss of $1.44
per diluted share. Excluding special items, adjusted net
loss for the third quarter 2023 was $149.8
million1, or an adjusted net loss of $1.37 per diluted share1.
For the third quarter 2023, Spirit reported a pre-tax loss of
$203.6 million and a pre-tax margin
of negative 16.2 percent. Adjusted
pre-tax loss for the third
quarter was $193.5 million1 and adjusted pre-tax
margin was negative 15.4 percent1.
For the third quarter 2023, the Company's load factor was 81.4
percent. Adverse weather and air traffic control related
delays during the quarter, particularly along the eastern seaboard
and in Florida, negatively
impacted the Company's operational performance for the quarter. For the third quarter 2023, Spirit reported
a DOT on-time performance2 of 67.0 percent and a DOT
Completion Factor2 of 98.4 percent. Excluding these
weather-related and other uncontrollable events, the Company's
controllable completion factor for the third quarter 2023 was 99.8
percent5.
Revenue
Total operating revenues
for the third quarter 2023 were $1.3 billion, a decrease of 6.3 percent
compared to the third quarter 2022. Total revenue per ASM
("TRASM") was 9.14 cents, a decrease
of 17.4 percent compared to third quarter 2022 on 13.5 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
third quarter 2023 decreased 13.5 percent to $116.43. Compared to the third quarter 2022, fare
revenue per segment decreased 27.8 percent to $48.73 and non-ticket revenue per segment
increased about 1 percent to $67.703.
Cost Performance
Total GAAP operating expenses
for the third quarter 2023 increased 4.9 percent compared to the
third quarter 2022 to $1,447.3
million. Adjusted operating expenses for the third
quarter 2023 increased 7.9 percent compared to third quarter 2022
to $1,437.2
million4. Increases in operating expenses
and adjusted
operating expenses were driven by increased flight volume, additional aircraft and inflationary pressures and
were partially offset by lower fuel expense year over year.
Aircraft utilization in the third
quarter 2023 was 10.8 hours,
up 1.9 percent compared to the 10.6 hours in the
same period of 2022.
Interest expense for the third quarter 2023 was lower than
expected due to a favorable mark to market
adjustment of $5.9 million related
to the change in fair value of the derivative liability associated with the
Company's Convertible Notes Due 2026.
"In addition to a softer-than-expected demand environment, we
continue to be challenged by higher fuel prices and NEO engine
availability issues and are expecting our margins in the fourth
quarter will be lower
than we reported for the third quarter
2023. We recognize this financial performance is not acceptable, and
we are taking action. In addition
to evaluating different strategies to drive
higher revenue per departure, we have
identified $100 million of structural
cost reductions and are evaluating how best to capture those
savings in 2024," said Scott Haralson,
Spirit's Chief Financial
Officer. "Our team is resilient
and nimble, and we are committed to returning Spirit to
sustained profitability."
Fleet
During the third
quarter 2023, Spirit
took delivery of three new A320neo aircraft
and five new A321neo aircraft, retired
four A319ceo aircraft and ended the quarter with 202
aircraft in its fleet.
Neo Engine Update
Pratt & Whitney
recently notified the Company that all the geared turbofan
(GTF) neo engines in Spirit's fleet, including
the engines slotted for future aircraft deliveries, for a yet
undetermined period, are in the potential pool of engines subject
to the inspection and possible replacement, of the powdered metal
high-pressure turbine and compressor discs. Pratt & Whitney has
provided an initial analysis on an inspection and removal schedule
for these engines. Based on this analysis, for the fourth quarter
2023, Spirit anticipates an average of 10 neo aircraft will be
grounded. For 2024, Spirit assumes the average number of grounded
neo aircraft will climb steadily from 13 in January to 41 in
December, averaging 26 grounded for the full year 2024. This
expectation drives a dramatic decrease in the Company's near-term
growth projections. For the full year 2024, Spirit estimates
capacity will range between about flat to up mid-single digits
compared to the full year 2023.
The Company has begun discussions with Pratt & Whitney
regarding fair compensation for financial damages related
to the GTF neo engine availability issues;
however, the amount, timing and structure
of the compensation that will be agreed upon is not yet
known.
Liquidity and Capital Deployment
Spirit ended third
quarter 2023 with unrestricted cash and cash equivalents, short-term investment securities
and liquidity available under the Company's revolving credit
facility of $1.2 billion.
Total capital expenditures for the nine months ended
September 30, 2023, were $209.1 million, primarily
related to expenditures related
to the building of Spirit's
new headquarters campus in Dania Beach,
Florida and purchases of spare
parts, including four spare engines.
Third Quarter 2023 Highlights
- Spirit was named a Four-Star Low-Cost Carrier by the Airline
Passenger Experience Association and the International Flights
Services Association for consistently providing passengers with
exceptional experiences
- Introduced its award-winning self-bag drop system with
biometric-photo matching at Detroit Metropolitan Wayne County
Airport (DTW). Spirit leads the way as the first airline to roll
out this innovative technology at DTW and remains the only airline
to leverage 1:1 biometrics at ATL, DFW, LAX, ORD, LAS, MCO and now
DTW
- Launched a round-up feature on spirit.com where Guests can
choose to increase their total to the next whole dollar during
booking, which will be donated to the Spirit Charitable Foundation
to help make a difference in the lives of children and families,
service members, and the environment. So far in 2023, the
Foundation has committed $1.5 million
to 65+ nonprofits across the U.S., Latin
America and the Caribbean,
with plans to announce more investments later this year
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 for the lawsuit is scheduled to begin on October 31, 2023.
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
Report on Form 10-Q for the fiscal quarter ended 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
September 30,
|
|
Percent
|
|
Nine Months
Ended
September 30,
|
Percent
|
|
2023
|
2022
|
|
Change
|
|
2023
|
2022
|
Change
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
Passenger
|
$ 1,233,912
|
$ 1,322,079
|
|
(6.7)
|
|
$3,971,446
|
$3,619,694
|
9.7
|
Other
|
24,631
|
21,100
|
|
16.7
|
|
69,343
|
57,443
|
20.7
|
Total operating revenues
|
1,258,543
|
1,343,179
|
|
(6.3)
|
|
4,040,789
|
3,677,137
|
9.9
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Aircraft
fuel
|
455,241
|
508,496
|
|
(10.5)
|
|
1,333,984
|
1,435,714
|
(7.1)
|
Salaries, wages and
benefits
|
404,177
|
311,957
|
|
29.6
|
|
1,201,067
|
926,481
|
29.6
|
Landing fees and other
rents
|
107,525
|
95,174
|
|
13.0
|
|
311,357
|
270,131
|
15.3
|
Depreciation and
amortization
|
82,802
|
78,184
|
|
5.9
|
|
241,335
|
230,844
|
4.5
|
Aircraft
rent
|
97,393
|
75,332
|
|
29.3
|
|
274,761
|
210,008
|
30.8
|
Maintenance, materials
and repairs
|
56,465
|
45,126
|
|
25.1
|
|
167,704
|
136,048
|
23.3
|
Distribution
|
46,323
|
47,385
|
|
(2.2)
|
|
145,041
|
131,460
|
10.3
|
Special
charges
|
12,378
|
38,359
|
|
(67.7)
|
|
46,333
|
71,926
|
(35.6)
|
Loss (gain) on
disposal of assets
|
(2,250)
|
9,374
|
|
(124.0)
|
|
5,652
|
31,562
|
(82.1)
|
Other operating
(1)
|
187,249
|
170,182
|
|
10.0
|
|
594,499
|
526,151
|
13.0
|
Total operating expenses
|
1,447,303
|
1,379,569
|
|
4.9
|
|
4,321,733
|
3,970,325
|
8.9
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
(188,760)
|
(36,390)
|
|
NM
|
|
(280,944)
|
(293,188)
|
(4.2)
|
|
|
|
|
|
|
|
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
41,260
|
23,708
|
|
74.0
|
|
121,933
|
91,712
|
33.0
|
Capitalized
interest
|
(8,582)
|
(5,964)
|
|
43.9
|
|
(24,675)
|
(16,903)
|
46.0
|
Interest
income
|
(18,442)
|
(5,642)
|
|
NM
|
|
(49,838)
|
(8,670)
|
NM
|
Other (income)
expense
|
649
|
402
|
|
61.4
|
|
1,957
|
1,115
|
75.5
|
Total other (income) expense
|
14,885
|
12,504
|
|
19.0
|
|
49,377
|
67,254
|
(26.6)
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(203,645)
|
(48,894)
|
|
NM
|
|
(330,321)
|
(360,442)
|
(8.4)
|
Provision (benefit) for
income taxes
|
(46,093)
|
(12,517)
|
|
268.2
|
|
(66,509)
|
(76,956)
|
(13.6)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(157,552)
|
$
(36,377)
|
|
NM
|
|
$
(263,812)
|
$
(283,486)
|
(6.9)
|
Basic earnings (loss) per share
|
$
(1.44)
|
$
(0.33)
|
|
NM
|
|
$
(2.42)
|
$
(2.61)
|
(7.3)
|
Diluted earnings (loss) per
share
|
$
(1.44)
|
$
(0.33)
|
|
NM
|
|
$
(2.42)
|
$
(2.61)
|
(7.3)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares, basic
|
109,164
|
108,853
|
|
0.3
|
|
109,145
|
108,711
|
0.4
|
Weighted-average
shares, diluted
|
109,164
|
108,853
|
|
0.3
|
|
109,145
|
108,711
|
0.4
|
|
(1)
2023 includes an estimated litigation settlement of $6.0 million recorded
in the second quarter 2023.
See "Special Items" table below for more
information.
|
NM: "Not
Meaningful"
|
SPIRIT AIRLINES,
INC.
Selected Operating
Statistics
(unaudited)
|
|
|
Three Months
Ended September 30,
|
|
|
Operating Statistics
|
2023
|
2022
|
Change
|
|
Available seat
miles (ASMs) (thousands)
|
13,769,941
|
12,131,033
|
13.5
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
11,205,742
|
10,104,170
|
10.9
|
%
|
Load factor
(%)
|
81.4
|
83.3
|
(1.9)
|
pts
|
Passenger flight
segments (thousands)
|
10,809
|
9,980
|
8.3
|
%
|
Departures
|
72,728
|
66,745
|
9.0
|
%
|
Total operating revenue per ASM
(TRASM) (cents)
|
9.14
|
11.07
|
(17.4)
|
%
|
Average yield
(cents)
|
11.23
|
13.29
|
(15.5)
|
%
|
Fare revenue
per passenger flight segment ($)
|
48.73
|
67.52
|
(27.8)
|
%
|
Non-ticket revenue per passenger flight
segment ($)
|
67.70
|
67.07
|
0.9
|
%
|
Total revenue per passenger flight
segment ($)
|
116.43
|
134.59
|
(13.5)
|
%
|
CASM (cents)
|
10.51
|
11.37
|
(7.6)
|
%
|
Adjusted CASM
(cents) (1)
|
10.44
|
10.98
|
(4.9)
|
%
|
Adjusted CASM
ex-fuel (cents) (1)(2)
|
7.13
|
6.79
|
5.0
|
%
|
Fuel gallons
consumed (thousands)
|
146,818
|
133,140
|
10.3
|
%
|
Average fuel
cost per gallon ($)
|
3.10
|
3.82
|
(18.8)
|
%
|
Aircraft at end of period
|
202
|
184
|
9.8
|
%
|
Average daily
aircraft utilization (hours)
|
10.8
|
10.6
|
1.9
|
%
|
Average stage length (miles)
|
1,020
|
989
|
3.1
|
%
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
Operating Statistics
|
2023
|
2022
|
Change
|
|
Available seat
miles (ASMs) (thousands)
|
40,887,191
|
35,696,476
|
14.5
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
33,413,072
|
29,346,890
|
13.9
|
%
|
Load factor
(%)
|
81.7
|
82.2
|
(0.5)
|
pts
|
Passenger flight
segments (thousands)
|
32,596
|
28,204
|
15.6
|
%
|
Departures
|
220,264
|
190,851
|
15.4
|
%
|
Total operating revenue per ASM
(TRASM) (cents)
|
9.88
|
10.30
|
(4.1)
|
%
|
Average yield
(cents)
|
12.09
|
12.53
|
(3.5)
|
%
|
Fare revenue
per passenger flight segment ($)
|
54.70
|
63.68
|
(14.1)
|
%
|
Non-ticket revenue per passenger flight
segment ($)
|
69.27
|
66.70
|
3.9
|
%
|
Total revenue per passenger flight
segment ($)
|
123.97
|
130.38
|
(4.9)
|
%
|
CASM (cents)
|
10.57
|
11.12
|
(4.9)
|
%
|
Adjusted CASM
(cents) (1)
|
10.43
|
10.83
|
(3.7)
|
%
|
Adjusted CASM
ex-fuel (cents) (1)(2)
|
7.17
|
6.81
|
5.3
|
%
|
Fuel gallons
consumed (thousands)
|
438,673
|
388,027
|
13.1
|
%
|
Average fuel
cost per gallon ($)
|
3.04
|
3.70
|
(17.8)
|
%
|
Average daily
aircraft utilization (hours)
|
11.1
|
10.7
|
3.7
|
%
|
Average stage
length (miles)
|
1,006
|
1,019
|
(1.3)
|
%
|
|
|
(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
(gain) 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
|
Nine Months Ended
|
|
September 30,
|
September 30,
|
(in thousands, except
per-segment data)
|
2023
|
2022
|
2023
|
2022
|
Operating
revenues
|
|
|
|
|
Fare
|
$
526,776
|
$
673,848
|
$
1,782,981
|
$
1,796,044
|
Non-fare
|
707,136
|
648,231
|
2,188,465
|
1,823,650
|
Total
passenger revenues
|
1,233,912
|
1,322,079
|
3,971,446
|
3,619,694
|
Other
revenues
|
24,631
|
21,100
|
69,343
|
57,443
|
Total operating revenues
|
$
1,258,543
|
$
1,343,179
|
$
4,040,789
|
$
3,677,137
|
|
|
|
|
|
Non-ticket revenues (1)
|
$
731,767
|
$
669,331
|
$
2,257,808
|
$
1,881,093
|
|
|
|
|
|
Passenger
segments
|
10,809
|
9,980
|
32,596
|
28,204
|
|
|
|
|
|
Non-ticket revenue per passenger flight segment
($)
|
$67.70
|
$67.07
|
$69.27
|
$66.70
|
|
|
(1)
|
Non-ticket revenues
equal the sum of non-fare passenger revenues and other
revenues.
|
Special Items
(unaudited) (1)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
|
|
September 30,
|
(in
thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Operating special items include the
following:
|
|
|
|
|
|
Litigation loss
contingency (2)
|
$
—
|
$
—
|
|
$
6,000
|
$
—
|
Loss (gain) on
disposal of assets (3)
|
(2,250)
|
9,374
|
|
5,652
|
31,562
|
Operating special
charges (4)
|
12,378
|
38,359
|
|
46,333
|
71,926
|
Total special items (1)
|
$
10,128
|
$
47,733
|
|
$
57,985
|
$
103,488
|
|
|
(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 losses on
eight aircraft sale leaseback transactions and the write-off of
obsolete assets and other adjustments, partially offset by net
gains related to the sale of eleven A319 airframes and sixteen A319
engines. 2022 includes amounts related to the loss on eleven
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 legal, advisory, and other fees
related to the former Agreement and Plan of Merger with Frontier
Group Holdings, Inc. and Top Gun Acquisition Corp. (the "Frontier
Merger Agreement"), the unsolicited proposal by JetBlue to acquire
all of the Company's outstanding shares in an all-cash transaction,
and the Agreement and Plan of Merger with JetBlue
and Sundown Acquisition Corp. (the "JetBlue
Merger Agreement"). In addition, 2022 includes costs
associated with retention programs under the former
Frontier Merger Agreement and the JetBlue Merger
Agreement.
|
Reconciliation of Adjusted Operating
Expenses to GAAP Operating Expenses
(unaudited)
|
|
|
Three Months Ended
|
Nine Months Ended
|
|
September 30,
|
September 30,
|
(in thousands, except
CASM data in cents)
|
2023
|
2022
|
2023
|
2022
|
Total operating expenses, as
reported
|
$
1,447,303
|
$
1,379,569
|
$
4,321,733
|
$
3,970,325
|
Less: Operating special
items expense (credit)
|
10,128
|
47,733
|
57,985
|
103,488
|
Adj. Operating
expenses, non-GAAP (1)
|
1,437,175
|
1,331,836
|
4,263,748
|
3,866,837
|
Less: Aircraft fuel
expense
|
455,241
|
508,496
|
1,333,984
|
1,435,714
|
Adj. Operating expenses
excluding fuel, non-GAAP (2)
|
$
981,934
|
$
823,340
|
$
2,929,764
|
$
2,431,123
|
|
|
|
|
|
Available seat
miles
|
13,769,941
|
12,131,033
|
40,887,191
|
35,696,476
|
|
|
|
|
|
CASM (cents)
|
10.51
|
11.37
|
10.57
|
11.12
|
Adj. CASM (cents)
(1)
|
10.44
|
10.98
|
10.43
|
10.83
|
Adj. CASM ex-fuel
(cents) (2)
|
7.13
|
6.79
|
7.17
|
6.81
|
|
|
(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
(Loss) (unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
|
|
September 30,
|
(in
thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Provision (benefit) for income taxes, as
reported
|
$
(46,093)
|
$
(12,517)
|
|
$
(66,509)
|
$
(76,956)
|
Less: Net Income (loss)
tax impact of special items
|
(2,358)
|
(7,720)
|
|
(4,961)
|
(26,808)
|
Adj. Provision (benefit) for income taxes, net,
non-GAAP (1)
|
$
(43,735)
|
$
(4,797)
|
|
$
(61,548)
|
$
(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
|
|
Nine Months
Ended
|
|
September 30,
|
|
September 30,
|
(in thousands, except
per-share data)
|
2023
|
|
2022
|
|
2023
|
2022
|
Net income (loss), as reported
|
$
(157,552)
|
|
$
(36,377)
|
|
$
(263,812)
|
$
(283,486)
|
Add: Provision
(benefit) for income taxes
|
(46,093)
|
|
(12,517)
|
|
(66,509)
|
(76,956)
|
Income (loss) before
income taxes, as reported
|
(203,645)
|
|
(48,894)
|
|
(330,321)
|
(360,442)
|
Pre-tax
margin
|
(16.2) %
|
|
(3.6) %
|
|
(8.2) %
|
(9.8) %
|
Add: Special items
expense (credit) (2)
|
10,128
|
|
47,733
|
|
57,985
|
103,488
|
Adj. Income (loss)
before income taxes, non-GAAP (3)
|
(193,517)
|
|
(1,161)
|
|
(272,336)
|
(256,954)
|
Adj. Pre-tax margin,
non-GAAP (3)
|
(15.4) %
|
|
(0.1) %
|
|
(6.7) %
|
(7.0) %
|
Add: Total other
(income) expense
|
14,885
|
|
12,504
|
|
49,377
|
67,254
|
Adj. Operating income
(loss), non-GAAP (3)
|
(178,632)
|
|
11,343
|
|
(222,959)
|
(189,700)
|
Adj. Operating margin,
non-GAAP (3)
|
(14.2) %
|
|
0.8 %
|
|
(5.5) %
|
(5.2) %
|
|
|
|
|
|
|
|
Adj. Provision
(benefit) for income taxes (4)
|
(43,735)
|
|
(4,797)
|
|
(61,548)
|
(50,148)
|
Adj. Net income
(loss), non-GAAP (3)
|
$
(149,782)
|
|
$
3,636
|
|
$
(210,788)
|
$
(206,806)
|
|
|
|
|
|
|
|
Weighted-average
shares, diluted
|
109,164
|
|
109,319
|
|
109,145
|
108,711
|
|
|
|
|
|
|
|
Adj. Net income (loss)
per share, diluted (3)
|
$
(1.37)
|
|
$
0.03
|
|
$
(1.93)
|
$
(1.90)
|
|
|
|
|
|
|
|
Total operating revenues
|
$
1,258,543
|
|
$
1,343,179
|
|
$
4,040,789
|
$
3,677,137
|
|
|
(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 (loss)" table above for more
details.
|
Reconciliation of Adjusted Net Income (Loss)
per Share to GAAP Net Income (Loss)
per Share (unaudited) (1)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
|
|
September 30,
|
(per share)
|
2023
|
2022
|
|
2023
|
2022
|
Net income (loss) per share, diluted, as
reported
|
$
|
(1.44)
|
$
|
(0.33)
|
|
$
|
(2.42)
|
$
|
(2.61)
|
Add: Impact of special
items
|
|
0.09
|
|
0.44
|
|
|
0.53
|
|
0.95
|
Add: Tax impact of
special items (2)
|
|
(0.02)
|
|
(0.07)
|
|
|
(0.05)
|
|
(0.25)
|
Add: GAAP to non-GAAP
diluted wtd. avg. shares difference
|
|
—
|
|
(0.01)
|
|
|
—
|
|
—
|
Adj. Net income (loss) per share, diluted, non-GAAP
(1) (3)
|
$
|
(1.37)
|
$
|
0.03
|
|
$
|
(1.93)
|
$
|
(1.90)
|
|
|
(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 (loss) to GAAP Net Income
(loss), 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.