MIRAMAR, Fla.,
Feb. 8,
2024 /PRNewswire/ -- Spirit Airlines, Inc. ("Spirit"
or the "Company") (NYSE: SAVE) today reported fourth quarter and
full year 2023 financial results.
|
Fourth Quarter 2023
(unaudited)
|
|
|
As Reported
|
Adjusted1
|
Total
operating revenues
|
$1,321.8 million
|
$1,321.8 million
|
Operating income
(loss)
|
$(214.8) million
|
$(163.3) million
|
Operating margin
|
(16.3) %
|
(12.4) %
|
Net income
(loss)
|
$(183.7) million
|
$(148.7) million
|
Diluted earnings (loss) per share
|
$(1.68)
|
$(1.36)
|
"As we enter 2024, we are beginning to see benefits from the
tactical and strategic changes we implemented
in 2023. In addition, current booking trends
further our confidence that the domestic
environment is beginning to rebound. Together with the
changes we have made, we estimate this will result in an
unprecedented sequential improvement in total revenue per available
seat mile (TRASM) from fourth quarter 2023 to first quarter 2024,
which supports our view of a domestic recovery in 2024," said
Ted Christie, Spirit's President and
Chief Executive Officer.
"The Spirit team is 100% clear and focused on the adjustments we are currently deploying and will continue
to make throughout 2024 to drive us back to cash flow generation
and profitability."
Operations
For the fourth quarter
2023, the Company's load factor was 80.1 percent.
For the fourth quarter 2023, Spirit reported a
DOT on-time performance2 of 76.8 percent and a DOT
Completion Factor2 of 99.2 percent.
"In addition
to operational reliability being a core element of caring for our Guests,
it also benefits the top and bottom line.
During the fourth quarter 2023 peak holiday period, the Spirit team
ran a great operation. We estimate this strong operational
performance contributed $10 million
of incremental revenue, allowing us to
exceed our mid-December revenue
guidance for the fourth quarter
and deliver cost performance in excess of
our expectations. We have continued this operational excellence and
finished January 2024 as the No. 2
airline in reliability2," commented Christie.
Fourth Quarter 2023 Financial
Results
For the fourth
quarter 2023, Spirit reported a net loss of $183.7
million, or a net loss of $1.68
per diluted share. Excluding special items, adjusted net loss
for the fourth quarter 2023 was $148.7
million1, or an adjusted net loss of $1.36 per diluted share1.
For the fourth quarter 2023, Spirit reported a pre-tax loss of
$228.3 million and a pre-tax margin
of negative 17.3 percent.
Adjusted pre-tax loss for the fourth quarter
was $192.2 million1 and adjusted pre-tax
margin was negative 14.5 percent1
Revenue
Total operating revenues
for the fourth quarter 2023 were $1.3 billion, a decrease of 5.0 percent
compared to the fourth quarter 2022. Total revenue
per ASM ("TRASM") was 8.94
cents, a decrease of 17.3 percent compared to fourth quarter
2022 on 14.8 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
fourth quarter 2023 decreased 15.3 percent to $114.84. Compared to the
fourth quarter 2022,
fare revenue per segment decreased
25.0 percent to $48.24 and non-ticket revenue
per segment decreased 6.6 percent to $66.603.
Cost Performance
Total GAAP operating expenses for the
fourth quarter 2023 decreased 9.5 percent compared to the fourth
quarter 2022 to $1,536.6 million.
Adjusted operating expenses for the fourth quarter 2023 increased
11.3 percent compared to fourth quarter 2022 to $1,485.1 million4. The decrease in
operating expenses was primarily driven by a decrease in special
charges year over year, partially offset by increases primarily
related to increased flight volume, additional leased aircraft and
inflationary pressures. The increase in adjusted operating expenses
year over year was primarily driven by expenses related to
increased flight volume, additional leased aircraft and
inflationary pressures.
Aircraft utilization in the fourth quarter 2023 was 11.2 hours, up 3.7 percent
compared to the 10.8 hours in the
same period of 2022. The Company's aircraft utilization in the
fourth quarter 2023 was constrained due to engine availability
issues primarily driven by unscheduled engine maintenance events
resulting in aircraft not being available for service.
Total other (income) expense on a GAAP basis was lower year over
year primarily due to gains recognized from favorable interest rate
swap provisions contained in certain debt agreements extinguished
during the
fourth quarter related to 20 of the sale leaseback
transactions completed during the quarter,
partially offset by the write-off of unamortized debt
issuance costs. Adjusted total other (income) expense was
lower year over year largely due to a decrease in interest expense,
primarily driven by a decrease in the unfavorable mark to market
adjustment related to the change in fair value of the derivative
liability associated with the Company's Convertible Notes Due 2026
and an increase in capitalized interest.
"In the fourth quarter, we saw cost benefits from our high level
of on-time performance and completion factor for the quarter,
particularly in the peak Thanksgiving and Christmas holiday
periods. We also saw fuel efficiency benefits with the increase in
the number of neo aircraft in our fleet, particularly the eight
A321neos added in 2023. We expect these benefits, along with
improved utilization of the aircraft available for operation and
the right sizing of our labor costs to be the platform for our
ongoing unit cost repair," said Scott
Haralson, Spirit's Chief Financial Officer.
"Regarding liquidity, we believe our $1.3
billion in total liquidity at year end 2023 should be more
than adequate to get us to our primary goal of getting the business
to generate cash. This is a milestone we think we will cross as we
enter March. We believe we will be operating cash flow positive in
the second quarter 2024 and beyond. And, while we have confidence
in our ability to return to positive cash generation, we will
continue to look at other opportunities to further shore up our
liquidity resources as we progress through the year. Also, while
Spirit remains focused on consummating the merger with JetBlue
and is looking forward to prosecuting the expedited appeal of the
U.S. District Court's order, the Company is aware of its 2025 and
2026 debt maturities and is assessing options to address those
maturities when the time is appropriate."
Fleet
During the fourth
quarter 2023, Spirit
took delivery of four new aircraft (two A320neos and two A321neos)
and retired one A319ceo aircraft, ending the year with 205
aircraft in its fleet.
Neo Engine Update
During the third quarter 2023, Pratt & Whitney notified the
Company that all the geared turbofan (GTF) neo engines in its
fleet, are in the potential pool of engines subject to the
inspection and possible replacement, of the powdered metal
high-pressure turbine and compressor discs. In January 2024, the Company had an average of 13
grounded neo aircraft and estimates that number will climb steadily
to an average of about 40 in December
2024, averaging about 25 grounded neo aircraft for the full
year 2024. Spirit currently estimates its capacity for the full
year 2024 will be flat to up mid-single digits compared to the full
year 2023.
The Company and Pratt & Whitney have been in negotiations
regarding fair compensation for the financial damages related to
the geared turbo fan (GTF) neo engine availability issues.
Discussions with Pratt & Whitney have progressed considerably
since October, and, while no agreement has been reached to date,
the Company believes
the amount of compensation it will receive
will be a significant source
of liquidity over the next couple of years.
Liquidity and Capital
Deployment
Spirit ended fourth quarter 2023 with unrestricted cash and cash equivalents, short-term investment
securities and liquidity available under the Company's revolving
credit facility of $1.3 billion.
In November 2023,
Spirit modified its Revolving Credit
Facility to, among other things, extend
the final maturity to September 30,
2025.
In December 2023, the Company
completed sale-leaseback transactions for 20 aircraft, resulting in
repayment of approximately $325
million of indebtedness on those aircraft and net cash
proceeds of approximately $320
million. In January 2024, the
Company completed sale-leaseback transactions for an additional
five aircraft, resulting in repayment of approximately $140 million of indebtedness on those aircraft
and net cash proceeds of approximately $99
million. In total, these transactions resulted in net cash
proceeds to the Company of approximately $419 million.
Total capital expenditures for the year ended December 31, 2023, were $232.4 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, partially offset
by net inflows of aircraft pre-delivery
deposits.
Full Year 2023 Highlights
Our People
- Ratified amended collective bargaining agreements with its
Pilots represented by the Air Line Pilots Association and with its
Flight Attendants represented by the Association of Flight
Attendants
- Earned two acknowledgments from Newsweek in 2023, being
recognized as one of America's Greatest Workplaces for Diversity
and for Parents and Families, underscoring a continued commitment
to promoting diversity and equity for all Team Members
- Navigated a tightening labor market, growing its workforce to
13,624 while maintaining its focus on building engagement
Recognitions and Accomplishments
- Named Value Airline of the Year by Aviation Week Network's Air
Transport World (ATW)
- Recognized for safety with the FAA's "Aviation Maintenance
Technician Diamond Award of Excellence" for the sixth consecutive
year
- Named a Four-Star Low-Cost Carrier by the Airline Passenger
Experience Association (APEX) for consistently providing passengers
with exceptional experiences
- Awarded the San Diego
International Airport Fly Quiet Award in the small domestic
category
- Recognized by Los Angeles World Airports as a bronze winner of
the LAX Fly Quieter Award
- Named Most Affordable Airline and No. 2 of 11 overall by
WalletHub in its 2023 Best Airline Awards
Supporting our Communities
- Recognized as the 2023 Travel Weekly Magellan Awards Gold
Winner, the Spirit Charitable Foundation won in the Airline
"Overall-Giving Back Initiative" category
- Raised more than $1.5 million for
nonprofit organizations at its sixth annual Spirit Open in
conjunction with the Spirit Charitable Foundation; the Foundation
makes charitable investments in nonprofit organizations across the
U.S., Latin America and the
Caribbean that advance its three
pillars: Children & Families, Service Members and the
Environment. Furthermore, the Foundation continues to honor its
long-term commitments and supports immediate community needs, such
as last year's hurricane relief efforts in Florida
- 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
- Donated $1.7 million in 2023 to
over 84 nonprofits; the Spirit Charitable Foundation continued to
be a force for good across the U.S., Latin America and the Caribbean
Network & Aircraft Developments
- Expanded its network by initiating service to three new
destinations: Charleston, South
Carolina; Norfolk, Virginia
and San Jose, California,
contributing to the inauguration of 54 new routes, bringing its
total markets served to over 350 and average daily flights to
nearly 830
- Inaugurated its first Airbus A321neo aircraft into its young,
fuel-efficient fleet, ending 2023 with 8 A321neos in its fleet with
plans to take delivery of 20 more in 2024
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 began on October 31, 2023 in
the U.S. District Court for the District of Massachusetts (the "Court") and concluded on
December 5, 2023. On January 16, 2024, the Court granted a injunction
against the
Merger (the "Injunction"). On January 19, 2024, Spirit
and JetBlue filed
a notice of appeal and to reverse the
Injunction and allow Spirit and JetBlue to complete the Merger. On
February 2, 2024, the Court
of Appeals granted our motion, stating it would hear arguments
in June 2024.
Conference Call/Webcast Detail
Spirit will conduct a conference call to discuss these results
today at 10:00 a.m. Eastern U.S.
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.
|
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 2024 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, stakeholders, negotiations with
Pratt & Whitney regarding neo engine availability issues
and reimbursements, 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, 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.
|
Consolidated Statement
of Operations
|
(unaudited, in
thousands, except per-share amounts)
|
|
|
Three Months
Ended
December
31,
|
Percent
|
Year
Ended December
31,
|
Percent
|
|
2023
|
2022
|
|
Change
|
|
2023
|
2022
|
Change
|
Operating revenues:
|
|
|
|
|
|
|
|
|
Passenger
|
$ 1,296,715
|
$ 1,369,671
|
|
(5.3)
|
|
$5,268,161
|
$4,989,365
|
5.6
|
Other
|
25,045
|
21,639
|
|
15.7
|
|
94,388
|
79,082
|
19.4
|
Total operating revenues
|
1,321,760
|
1,391,310
|
|
(5.0)
|
|
5,362,549
|
5,068,447
|
5.8
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Aircraft fuel
|
487,181
|
494,255
|
|
(1.4)
|
|
1,821,165
|
1,929,969
|
(5.6)
|
Salaries, wages
and benefits
|
415,736
|
324,744
|
|
28.0
|
|
1,616,803
|
1,251,225
|
29.2
|
Landing fees
and other rents
|
96,905
|
77,137
|
|
25.6
|
|
408,262
|
347,268
|
17.6
|
Aircraft rent
|
106,478
|
72,420
|
|
47.0
|
|
381,239
|
282,428
|
35.0
|
Depreciation and
amortization
|
79,537
|
82,246
|
|
(3.3)
|
|
320,872
|
313,090
|
2.5
|
Maintenance, materials and repairs
|
55,635
|
51,772
|
|
7.5
|
|
223,339
|
187,820
|
18.9
|
Distribution
|
45,850
|
46,097
|
|
(0.5)
|
|
190,891
|
177,557
|
7.5
|
Special charges
|
23,204
|
348,246
|
|
(93.3)
|
|
69,537
|
420,172
|
(83.5)
|
Loss on disposal of assets
|
28,314
|
15,062
|
|
88.0
|
|
33,966
|
46,624
|
(27.1)
|
Other operating (1)
|
197,733
|
185,060
|
|
6.8
|
|
792,232
|
711,211
|
11.4
|
Total operating expenses
|
1,536,573
|
1,697,039
|
|
(9.5)
|
|
5,858,306
|
5,667,364
|
3.4
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
(214,813)
|
(305,729)
|
|
(29.7)
|
|
(495,757)
|
(598,917)
|
(17.2)
|
|
|
|
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
Interest expense
|
47,258
|
48,193
|
|
(1.9)
|
|
169,191
|
139,905
|
20.9
|
Loss (gain)
on extinguishment of debt
|
(15,411)
|
—
|
|
NM
|
|
(15,411)
|
—
|
NM
|
Capitalized interest
|
(8,685)
|
(5,915)
|
|
46.8
|
|
(33,360)
|
(22,818)
|
46.2
|
Interest income
|
(11,809)
|
(11,413)
|
|
3.5
|
|
(61,647)
|
(20,083)
|
207.0
|
Other (income) expense
|
2,108
|
3,703
|
|
(43.1)
|
|
4,065
|
4,818
|
(15.6)
|
Total other
(income) expense
|
13,461
|
34,568
|
|
(61.1)
|
|
62,838
|
101,822
|
(38.3)
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
(228,274)
|
(340,297)
|
|
(32.9)
|
|
(558,595)
|
(700,739)
|
(20.3)
|
Provision (benefit) for income taxes
|
(44,622)
|
(69,633)
|
|
(35.9)
|
|
(111,131)
|
(146,589)
|
(24.2)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(183,652)
|
$
(270,664)
|
|
(32.1)
|
|
$
(447,464)
|
$
(554,150)
|
(19.3)
|
Basic earnings (loss)
per share
|
$
(1.68)
|
$
(2.49)
|
|
(32.5)
|
|
$
(4.10)
|
$
(5.10)
|
(19.6)
|
Diluted earnings (loss)
per share
|
$
(1.68)
|
$
(2.49)
|
|
(32.5)
|
|
$
(4.10)
|
$
(5.10)
|
(19.6)
|
|
|
|
|
|
|
|
|
|
Weighted-average shares, basic
|
109,173
|
108,867
|
|
0.3
|
|
109,152
|
108,751
|
0.4
|
Weighted-average shares, diluted
|
109,173
|
108,867
|
|
0.3
|
|
109,152
|
108,751
|
0.4
|
|
(1)
Year ended 2023 includes an estimated litigation settlement of $6.0 million recorded
in the second quarter 2023. See "Special
Items" table below for more information.
|
NM: "Not
Meaningful"
|
SPIRIT AIRLINES, INC.
|
Selected Operating
Statistics
|
(unaudited)
|
|
|
Three Months
Ended December 31,
|
|
|
Operating Statistics
|
2023
|
2022
|
Change
|
|
Available seat
miles (ASMs) (thousands)
|
14,778,370
|
12,871,503
|
14.8
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
11,830,716
|
10,428,363
|
13.4
|
%
|
Load factor
(%)
|
80.1
|
81.0
|
(0.9)
|
pts
|
Passenger flight
segments (thousands)
|
11,509
|
10,259
|
12.2
|
%
|
Departures
|
77,636
|
70,228
|
10.5
|
%
|
Total operating revenue per ASM
(TRASM) (cents)
|
8.94
|
10.81
|
(17.3)
|
%
|
Average yield
(cents)
|
11.17
|
13.34
|
(16.3)
|
%
|
Fare revenue
per passenger flight segment ($)
|
48.24
|
64.31
|
(25.0)
|
%
|
Non-ticket revenue per passenger flight
segment ($)
|
66.60
|
71.31
|
(6.6)
|
%
|
Total revenue per passenger flight
segment ($)
|
114.84
|
135.62
|
(15.3)
|
%
|
CASM (cents)
|
10.40
|
13.18
|
(21.1)
|
%
|
Adjusted CASM
(cents) (1)
|
10.05
|
10.36
|
(3.0)
|
%
|
Adjusted CASM
ex-fuel (cents) (1)(2)
|
6.75
|
6.52
|
3.5
|
%
|
Fuel gallons
consumed (thousands)
|
153,123
|
139,263
|
10.0
|
%
|
Average fuel
cost per gallon ($)
|
3.18
|
3.55
|
(10.4)
|
%
|
Aircraft at end of period
|
205
|
194
|
5.7
|
%
|
Average daily
aircraft utilization (hours)
|
11.2
|
10.8
|
3.7
|
%
|
Average stage length (miles)
|
1,013
|
998
|
1.5
|
%
|
|
Year Ended December
31,
|
|
|
Operating Statistics
|
2023
|
2022
|
Change
|
|
Available seat
miles (ASMs) (thousands)
|
55,665,561
|
48,567,978
|
14.6
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
45,243,787
|
39,775,253
|
13.7
|
%
|
Load factor
(%)
|
81.3
|
81.9
|
(0.6)
|
pts
|
Passenger flight
segments (thousands)
|
44,105
|
38,463
|
14.7
|
%
|
Departures
|
297,900
|
261,079
|
14.1
|
%
|
Total operating revenue per ASM
(TRASM) (cents)
|
9.63
|
10.44
|
(7.8)
|
%
|
Average yield
(cents)
|
11.85
|
12.74
|
(7.0)
|
%
|
Fare revenue
per passenger flight segment ($)
|
53.01
|
63.85
|
(17.0)
|
%
|
Non-ticket revenue per passenger flight
segment ($)
|
68.57
|
67.93
|
0.9
|
%
|
Total revenue per passenger flight
segment ($)
|
121.58
|
131.78
|
(7.7)
|
%
|
CASM (cents)
|
10.52
|
11.67
|
(9.9)
|
%
|
Adjusted CASM
(cents) (1)
|
10.33
|
10.71
|
(3.5)
|
%
|
Adjusted CASM
ex-fuel (cents) (1)(2)
|
7.06
|
6.73
|
4.9
|
%
|
Fuel gallons
consumed (thousands)
|
591,796
|
527,290
|
12.2
|
%
|
Average fuel
cost per gallon ($)
|
3.08
|
3.66
|
(15.8)
|
%
|
Average daily
aircraft utilization (hours)
|
11.1
|
10.7
|
3.7
|
%
|
Average stage
length (miles)
|
1,007
|
1,013
|
(0.6)
|
%
|
|
(1)
Excludes operating special items.
|
(2)
Excludes fuel expense and operating special
items.
|
Spirit Airlines,
Inc.
|
Selected Consolidated Balance Sheet Data
|
(unaudited, in
thousands)
|
|
|
December 31,
2023
|
December 31,
2022
|
Cash and
cash equivalents
|
$
865,211
|
$
1,346,350
|
Short-term investment securities
|
112,501
|
107,115
|
Total
assets
|
9,417,237
|
9,184,774
|
Total
liabilities
|
8,282,895
|
7,613,123
|
Total
shareholders' equity
|
1,134,342
|
1,571,651
|
|
|
|
Current maturities of long-term debt,
net, and finance leases
|
315,580
|
346,888
|
Current maturities of operating leases
|
224,865
|
188,296
|
|
|
|
Long-term debt
and finance leases, less current maturities
|
3,055,221
|
3,200,376
|
Operating leases, less current maturities
|
3,298,871
|
2,455,619
|
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 Consolidated Statement of Operations), loss on disposal
of assets, special charges, and loss (gain) on extinguishment of
debt 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 December 31,
|
Year Ended
December 31,
|
(in thousands, except
per-segment data)
|
2023
|
2022
|
2023
|
2022
|
Operating
revenues
|
|
|
|
|
Fare
|
$
555,210
|
$
659,773
|
$
2,338,191
|
$
2,455,817
|
Non-fare
|
741,505
|
709,898
|
2,929,970
|
2,533,548
|
Total
passenger revenues
|
1,296,715
|
1,369,671
|
5,268,161
|
4,989,365
|
Other
revenues
|
25,045
|
21,639
|
94,388
|
79,082
|
Total operating revenues
|
$
1,321,760
|
$
1,391,310
|
$
5,362,549
|
$
5,068,447
|
|
|
|
|
|
Non-ticket revenues (1)
|
$
766,550
|
$
731,537
|
$
3,024,358
|
$
2,612,630
|
|
|
|
|
|
Passenger
segments
|
11,509
|
10,259
|
44,105
|
38,463
|
|
|
|
|
|
Non-ticket revenue per passenger flight segment
($)
|
$66.60
|
$71.31
|
$68.57
|
$67.93
|
|
(1) Non-ticket
revenues equal the sum of non-fare passenger revenues and other
revenues.
|
Special
Items
|
(unaudited)
(1)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(in
thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Operating special items include the
following:
|
|
|
|
|
|
Litigation loss
contingency (2)
|
$
—
|
$
—
|
|
$
6,000
|
$
—
|
Loss on disposal of
assets (3)
|
28,314
|
15,062
|
|
33,966
|
46,624
|
Operating special
charges (4)
|
23,204
|
348,246
|
|
69,537
|
420,172
|
Total operating special
items
|
$
51,518
|
$
363,308
|
|
$
109,503
|
$
466,796
|
|
|
|
|
|
|
Non-operating special items include the
following:
|
|
|
|
|
|
Loss (gain) on
extinguishment of debt (5)
|
(15,411)
|
—
|
|
(15,411)
|
—
|
Total
non-operating special items
|
$
(15,411)
|
$
—
|
|
$
(15,411)
|
$
—
|
|
|
|
|
|
|
Total special items (1)
|
$
36,107
|
$
363,308
|
|
$
94,092
|
$
466,796
|
|
|
(1)
|
Refer to the section
"Non-GAAP Financial Measures" for additional
information.
|
(2)
|
2023 includes a $6.0
million litigation loss contingency (recorded within other
operating expenses within the Company's Consolidated Statement of
Operations).
|
(3)
|
2023 includes losses on
6 aircraft sale-leaseback transactions recorded as operating
leases, net losses related to the sale of 12 A319 airframes and 20
A319 engines as well as losses related to the write-off of obsolete
assets and other adjustments, partially offset by gains on aircraft
sale-leaseback transaction related to 10 new aircraft deliveries.
2022 includes amounts related to the loss on sixteen aircraft sale
leaseback transactions and the impairment of 1 spare engine. 2022
includes amounts related to the loss on sixteen 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 and impairment charges related to the
purchase agreement to sell 29 of our A319 aircraft.
|
(5)
|
Loss (gain) on
extinguishment of debt in 2023 is primarily related to a gain
recognized due to the early extinguishment of certain of our
outstanding fixed-rate term loans, partially offset by the
write-offs of related deferred financing costs.
|
Reconciliation of Adjusted Operating
Expenses to GAAP Operating Expenses
|
(unaudited)
|
|
|
Three Months
Ended
December 31,
|
Year Ended
December 31,
|
(in thousands, except
CASM data in cents)
|
2023
|
2022
|
2023
|
2022
|
Total operating expenses, as
reported
|
$
1,536,573
|
$
1,697,039
|
$
5,858,306
|
$
5,667,364
|
Less: Operating special
items expense (credit)
|
51,518
|
363,308
|
109,503
|
466,796
|
Adj. Operating
expenses, non-GAAP (1)
|
1,485,055
|
1,333,731
|
5,748,803
|
5,200,568
|
Less: Aircraft fuel
expense
|
487,181
|
494,255
|
1,821,165
|
1,929,969
|
Adj. Operating expenses
excluding fuel, non-GAAP (2)
|
$
997,874
|
$
839,476
|
$
3,927,638
|
$
3,270,599
|
|
|
|
|
|
Available seat
miles
|
14,778,370
|
12,871,503
|
55,665,561
|
48,567,978
|
|
|
|
|
|
CASM (cents)
|
10.40
|
13.18
|
10.52
|
11.67
|
Adj. CASM (cents)
(1)
|
10.05
|
10.36
|
10.33
|
10.71
|
Adj. CASM ex-fuel
(cents) (2)
|
6.75
|
6.52
|
7.06
|
6.73
|
|
|
(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
December 31,
|
|
Year Ended
December 31,
|
(in
thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Provision (benefit) for income taxes, as
reported
|
$
(44,622)
|
$
(69,633)
|
|
$
(111,131)
|
$
(146,589)
|
Less: Net Income (loss)
tax impact of special items
|
(1,192)
|
(80,012)
|
|
(6,153)
|
(102,023)
|
Adj. Provision (benefit) for income taxes, net,
non-GAAP (1)
|
$
(43,430)
|
$
10,379
|
|
$
(104,978)
|
$
(44,566)
|
|
|
(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
December 31,
|
|
Year Ended
December 31,
|
(in thousands, except
per-share data)
|
2023
|
|
2022
|
|
2023
|
2022
|
Net income (loss), as reported
|
$
(183,652)
|
|
$
(270,664)
|
|
$
(447,464)
|
$
(554,150)
|
Add: Provision
(benefit) for income taxes
|
(44,622)
|
|
(69,633)
|
|
(111,131)
|
(146,589)
|
Income (loss) before
income taxes, as reported
|
(228,274)
|
|
(340,297)
|
|
(558,595)
|
(700,739)
|
Pre-tax
margin
|
(17.3) %
|
|
(24.5) %
|
|
(10.4) %
|
(13.8) %
|
Add: Special items
expense (credit) (2)
|
36,107
|
|
363,308
|
|
94,092
|
466,796
|
Adj. Income (loss)
before income taxes, non-GAAP (3)
|
(192,167)
|
|
23,011
|
|
(464,503)
|
(233,943)
|
Adj. Pre-tax margin,
non-GAAP (3)
|
(14.5) %
|
|
1.7 %
|
|
(8.7) %
|
(4.6) %
|
Add: Adj. total other
(income) expense (4)
|
28,872
|
|
34,568
|
|
78,249
|
101,822
|
Adj. Operating income
(loss), non-GAAP (3)
|
(163,295)
|
|
57,579
|
|
(386,254)
|
(132,121)
|
Adj. Operating margin,
non-GAAP (3)
|
(12.4) %
|
|
4.1 %
|
|
(7.2) %
|
(2.6) %
|
|
|
|
|
|
|
|
Adj. Provision
(benefit) for income taxes (5)
|
(43,430)
|
|
10,379
|
|
(104,978)
|
(44,566)
|
Adj. Net income
(loss), non-GAAP (3)
|
$
(148,737)
|
|
$
12,632
|
|
$
(359,525)
|
$
(189,377)
|
|
|
|
|
|
|
|
Weighted-average
shares, diluted
|
109,173
|
|
109,327
|
|
109,152
|
108,751
|
|
|
|
|
|
|
|
Adj. Net income (loss)
per share, diluted (3)
|
$
(1.36)
|
|
$
0.12
|
|
$
(3.29)
|
$
(1.74)
|
|
|
|
|
|
|
|
Total operating revenues
|
$
1,321,760
|
|
$
1,391,310
|
|
$
5,362,549
|
$
5,068,447
|
|
|
(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)
|
2023 amount excludes
$15.4 million of gain on extinguishment of debt.
|
(5)
|
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
December 31,
|
|
Year Ended December
31,
|
(per share)
|
2023
|
2022
|
|
2023
|
2022
|
Net income (loss) per share, diluted, as
reported
|
$
|
(1.68)
|
$
|
(2.49)
|
|
$
|
(4.10)
|
$
|
(5.10)
|
Add: Impact of special
items
|
|
0.33
|
|
3.34
|
|
|
0.86
|
|
4.29
|
Add: Tax impact of
special items (2)
|
|
(0.01)
|
|
(0.73)
|
|
|
(0.06)
|
|
(0.94)
|
Adj. Net income (loss) per share, diluted, non-GAAP
(1) (3)
|
$
|
(1.36)
|
$
|
0.12
|
|
$
|
(3.29)
|
$
|
(1.74)
|
|
|
(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.