Frontier Group Holdings, Inc. (Nasdaq: ULCC), parent company of
Frontier Airlines, Inc., today reported financial results for the
third quarter of 2023 and issued guidance for the fourth quarter.
Third Quarter
2023 Summary:
- Total operating revenues were $883 million, 3 percent lower
than the 2022 quarter, on capacity growth of 21 percent
- Cost per available seat mile ("CASM") was 9.66 cents, a decline
of 9 percent over the 2022 quarter
- Achieved adjusted CASM (excluding fuel), a non-GAAP measure, of
6.66 cents, 3 percent lower than the 2022 quarter
- Pre-tax margin was (5.1) percent
- Took delivery of eight A321neo aircraft during the third
quarter, increasing the proportion of the fleet comprised of the
more fuel-efficient A320neo family aircraft to 77 percent as of
September 30, 2023, the highest of all major U.S.
carriers
- Generated 103 available seat miles (“ASM”) per gallon,
reaffirming Frontier's position as the most fuel-efficient of all
major U.S. carriers and its ongoing commitment to being “America's
Greenest Airline” as measured by ASMs per fuel gallon consumed
“Elevated fuel prices, uneven demand recovery, and operational
disruptions all impacted third quarter results," commented Barry
Biffle, President and CEO. "To strengthen our competitive position,
we are focused on simplifying our operations, concentrating growth
in underserved markets, delivering the lowest costs and enhancing
our loyalty program offering. I'm extremely proud of Team Frontier
for their unwavering resolve to deliver Low Fares Done Right.”
Third Quarter
2023 Select Financial
Highlights
The following is a summary of third quarter select financial
results, including both GAAP and adjusted (non-GAAP) metrics. Refer
to “Reconciliations of Non-GAAP Financial Information” in the
appendix of this release.
(unaudited, in
millions, except for percentages) |
|
Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
Total operating revenues |
$ |
883 |
|
|
$ |
883 |
|
|
$ |
906 |
|
|
$ |
906 |
|
|
|
Total operating expenses |
$ |
937 |
|
|
$ |
937 |
|
|
$ |
850 |
|
|
$ |
861 |
|
|
|
Pre-tax income (loss) |
$ |
(45 |
) |
|
$ |
(45 |
) |
|
$ |
58 |
|
|
$ |
47 |
|
|
|
Pre-tax income (loss)
margin |
(5.1 |
) |
|
% |
(5.1) |
|
|
% |
6.4 |
|
|
% |
5.2 |
|
|
% |
Net income (loss) |
$ |
(32 |
) |
|
$ |
(32 |
) |
|
$ |
31 |
|
|
$ |
33 |
|
|
|
Diluted earnings (loss) per
share |
$ |
(0.14 |
) |
|
$ |
(0.14 |
) |
|
$ |
0.13 |
|
|
$ |
0.15 |
|
|
|
Revenue Performance
Total operating revenue for the third quarter of 2023 was $883
million, reflecting a revenue per available seat mile (“RASM”) of
9.10 cents, on capacity growth of 21 percent as compared to the
2022 quarter. The RASM decrease from 11.27 cents in the 2022
quarter was driven by a 15 percent decrease in revenue per
passenger to $115, a 2.5 percentage-point decrease in load factor
to 80 percent, and stage length which was 2 percent longer compared
to the 2022 quarter.
Ancillary revenue for the third quarter was $76 per passenger, 3
percent lower than the 2022 quarter.
Cost Performance
Total operating expenses for the third quarter of 2023 were $937
million, including $291 million of fuel expenses at an average cost
of $3.08 per gallon. Total operating expenses (excluding fuel), a
non-GAAP measure, were $646 million.
CASM was 9.66 cents in the third quarter of 2023, 9 percent
lower than the 2022 quarter. CASM (excluding fuel), a non-GAAP
measure, was 6.66 cents, 1 percent lower than the 2022 quarter, and
3 percent lower than the 2022 quarter on an adjusted, non-GAAP
basis.
Earnings
Pre-tax loss for the third quarter of 2023 was $(45) million,
reflecting a margin of (5.1) percent.
Net loss for the third quarter of 2023 was $(32) million.
Cash and Liquidity
Unrestricted cash and cash equivalents as of September 30,
2023 was $640 million. The Company has access to substantial
liquidity, if desired, through its co-branded credit card program
and related brand assets, based on similar debt financing by other
airlines.
Fleet
As of September 30, 2023, Frontier had a fleet of 134
Airbus single-aisle aircraft, as scheduled below, all financed
through operating leases that expire between 2023 and 2035.
Equipment |
Quantity |
Seats |
A320neo |
82 |
186 |
A320ceo |
10 |
180 - 186 |
A321ceo |
21 |
230 |
A321neo |
21 |
240 |
Total
fleet |
134 |
|
Frontier is “America's Greenest Airline” measured by ASMs per
fuel gallon consumed. During the third quarter of 2023, Frontier
generated 103 ASMs per gallon.
Frontier took delivery of eight A321neo aircraft during the
third quarter of 2023, of which five were direct leases, increasing
the proportion of the fleet comprised of the more fuel-efficient
A320neo family aircraft to 77 percent as of September 30,
2023, the highest of all major U.S. carriers. The A321neo is
expected to unlock meaningful scale efficiencies by way of fuel
savings and higher average seats per departure. As of
September 30, 2023, the Company had commitments for an
additional 214 aircraft to be delivered through 2029, including
purchase commitments for 67 A320neo aircraft and 147 A321neo
aircraft, representing 69 percent of future committed
deliveries.
Forward Guidance
The guidance provided below is based on the Company's current
estimates and is not a guarantee of future performance. This
guidance is subject to 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 (the "SEC"). Frontier undertakes
no duty to update any forward-looking statements or estimates,
except as required by applicable law. Further, this guidance
excludes special items and the reconciliation of non-GAAP measures
to the comparable GAAP measures because such amounts cannot be
determined at this time.
Looking to the fourth quarter, stage-adjusted, non-fuel unit
costs are expected to sequentially improve and booking volume has
stabilized, driven by low fare stimulation albeit at higher fuel
prices. Fourth quarter capacity is expected to grow by 12 percent
to 14 percent over the comparable 2022 quarter. Adjusted (non-GAAP)
total operating expenses (excluding fuel) are expected to be $655
to $665 million. Fourth quarter adjusted (non-GAAP) pre-tax margin
(excluding special items) is expected to be (6) percent to (9)
percent, including the impact of the higher fuel cost
environment.
The current forward guidance estimates for the fourth quarter
2023 are presented in the following table:
|
Fourth Quarter |
|
2023(a) |
Capacity growth (versus 4Q
2022)(b) |
12% to 14% |
Adjusted (non-GAAP) total
operating expenses (excluding fuel) ($ millions)(c) |
$655 to $665 |
Average fuel cost per
gallon(d) |
$3.20 to $3.30 |
Effective tax rate(e) |
20% |
Adjusted (non-GAAP) pre-tax
margin |
(6%) to (9%) |
Pre-delivery deposits, net of
refunds ($ millions) |
$90 to $105 |
Other capital expenditures ($
millions)(f) |
$30 |
(a) Includes guidance on certain non-GAAP
measures, including adjusted total operating expenses (excluding
fuel) and adjusted pre-tax margin, and which excludes, among other
things, special items. The Company is unable to reconcile these
forward-looking projections to GAAP as the nature or amount of such
special items cannot be determined at this time.
(b) Given the dynamic nature of the current
demand environment, actual capacity adjustments made by the Company
may be materially different than what is currently expected.
(c) Amount estimated excludes fuel expense and
special items, the latter of which are not estimable at this time.
The amount takes into consideration the additional expected
capacity and the Company's continued investment in the
post-pandemic recovery.
(d) Estimated fuel cost per gallon is based
upon the blended jet fuel curve on October 24, 2023 and is
inclusive of estimated fuel taxes and into-plane fuel costs.
(e) The Company’s fourth quarter actual tax
rate may differ from the forecasted rate due to varying factors
which may include, but are not limited to, the composition of items
of income and expense recognized in the fourth quarter, including
the amount of non-deductible or other similar items, and the
ultimate tax rate applicable to annual results.
(f) Other capital expenditures estimate
includes capitalized heavy maintenance.
Conference Call
The Company will host a conference call to discuss third quarter
2023 results today, October 26, 2023, at 11:00 a.m. Eastern
Time (USA). Investors may listen to a live, listen-only webcast
available on the investor relations section of the Company's
website at https://ir.flyfrontier.com/news-and-events/events. The
call will also be archived and available for 90 days on the
investor relations section of the Company's website.
About Frontier Airlines
Frontier Airlines, Inc., a subsidiary of Frontier Group
Holdings, Inc. (Nasdaq: ULCC), is committed to “Low Fares Done
Right.” Headquartered in Denver, Colorado, the Company operates 134
A320 family aircraft and has the largest A320neo family fleet in
the U.S. The use of these aircraft, along with Frontier’s
high-density seating configuration and weight-saving initiatives,
have contributed to Frontier’s continued ability to be the most
fuel-efficient of all major U.S. carriers when measured by ASMs per
fuel gallon consumed. With more than 210 new Airbus planes on
order, Frontier will continue to grow to deliver on the mission of
providing affordable travel across America.
Cautionary Statement Regarding Forward-Looking
Statements and Information
Certain statements in this release should be considered
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on the Company’s current expectations and beliefs with
respect to certain current and future events and anticipated
financial and operating performance. Words such as “expects,”
“will,” “plans,” “intends,” “anticipates,” “indicates,” “remains,”
“believes,” “estimates,” “forecast,” “guidance,” “outlook,”
“goals,” “targets” and similar expressions are intended to identify
forward-looking statements. Additionally, forward-looking
statements include statements that do not relate solely to
historical facts, such as statements which identify uncertainties
or trends, discuss the possible future effects of current known
trends or uncertainties, or which indicate that the future effects
of known trends or uncertainties cannot be predicted, guaranteed or
assured. All forward-looking statements in this release are based
upon information available to the Company on the date of this
release. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, changed circumstances or otherwise,
except as required by applicable law.
Actual results could differ materially from these
forward-looking statements due to numerous risks and uncertainties
relating to the Company's operations and business environment
including, without limitation, the following: unfavorable economic
and political conditions in the states where the Company operates
and globally, including an inflationary environment and potential
recession, and the resulting impact on cost inputs and/or consumer
demand for air travel; the highly competitive nature of the global
airline industry and susceptibility of the industry to price
discounting and changes in capacity; disruptions to the Company's
flight operations, including due to factors beyond the Company's
control, such as adverse weather events or air traffic controller
staffing shortages; the Company's ability to attract and retain
qualified personnel at reasonable costs; high and/or volatile fuel
prices or significant disruptions in the supply of aircraft fuel,
including as a result of the war between Russia and Ukraine; the
Company's reliance on technology and automated systems to operate
its business and the impact of any significant failure or
disruption of, or failure to effectively integrate and implement,
the technology or systems; the Company’s reliance on third-party
service providers and the impact of any failure of these parties to
perform as expected, or interruptions in the Company's
relationships with these providers or their provision of services;
adverse publicity and/or harm to the Company's brand or reputation;
reduced travel demand and potential tort liability as a result of
an accident, catastrophe or incident involving the Company, its
codeshare partners or another airline; terrorist attacks,
international hostilities or other security events, or the fear of
terrorist attacks or hostilities, even if not made directly on the
airline industry; increasing privacy and data security obligations
or a significant data breach; further changes to the airline
industry with respect to alliances and joint business arrangements
or due to consolidations; changes in the Company's network strategy
or other factors outside its control resulting in less economic
aircraft orders, costs related to modification or termination of
aircraft orders or entry into less favorable aircraft orders; the
Company's reliance on a single supplier for its aircraft and two
suppliers for its engines, and the impact of any failure to obtain
timely deliveries, additional equipment or support from any of
these suppliers; the impacts of union disputes, employee strikes or
slowdowns, and other labor-related disruptions on the Company's
operations; extended interruptions or disruptions in service at
major airports where the Company operates; the impacts of
seasonality and other factors associated with the airline industry;
the Company's failure to realize the full value of its intangible
assets or its long-lived assets, causing the Company to record
impairments; the costs of compliance with extensive government
regulation of the airline industry; costs, liabilities and risks
associated with environmental regulation and climate change; the
Company's inability to accept or integrate new aircraft into the
Company's fleet as planned; the impacts of the Company's
significant amount of financial leverage from fixed obligations,
the possibility the Company may seek material amounts of additional
financial liquidity in the short-term and the impacts of
insufficient liquidity on the Company's financial condition and
business; failure to comply with the covenants in the Company's
financing agreements or failure to comply with financial and other
covenants governing the Company's other debt; changes in, or
failure to retain, the Company's senior management team or other
key employees; current or future litigation and regulatory actions,
or failure to comply with the terms of any settlement, order or
arrangement relating to these actions; increases in insurance costs
or inadequate insurance coverage; and other risks and uncertainties
set forth from time to time under sections captioned “Risk Factors”
in the Company's reports and other documents filed with the SEC,
including the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, which was filed with the SEC on
February 22, 2023.
Frontier Group Holdings,
Inc.Condensed Consolidated Statements of
Operations(unaudited, in millions, except share
and per share amounts)
|
Three Months Ended September 30, |
|
Percent Change |
|
Nine Months Ended September 30, |
|
Percent Change |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
Passenger |
$ |
862 |
|
|
$ |
883 |
|
|
(2)% |
|
$ |
2,637 |
|
|
$ |
2,361 |
|
|
12 |
% |
Other |
|
21 |
|
|
|
23 |
|
|
(9)% |
|
|
61 |
|
|
|
59 |
|
|
3 |
% |
Total operating
revenues |
|
883 |
|
|
|
906 |
|
|
(3)% |
|
|
2,698 |
|
|
|
2,420 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Aircraft fuel |
|
291 |
|
|
|
306 |
|
|
(5)% |
|
|
827 |
|
|
|
856 |
|
|
(3) |
% |
Salaries, wages and
benefits |
|
221 |
|
|
|
182 |
|
|
21% |
|
|
635 |
|
|
|
528 |
|
|
20 |
% |
Aircraft rent |
|
150 |
|
|
|
140 |
|
|
7% |
|
|
429 |
|
|
|
401 |
|
|
7 |
% |
Station operations |
|
133 |
|
|
|
101 |
|
|
32% |
|
|
381 |
|
|
|
326 |
|
|
17 |
% |
Sales and marketing |
|
41 |
|
|
|
42 |
|
|
(2)% |
|
|
125 |
|
|
|
120 |
|
|
4 |
% |
Maintenance, materials and
repairs |
|
48 |
|
|
|
42 |
|
|
14% |
|
|
145 |
|
|
|
107 |
|
|
36 |
% |
Depreciation and
amortization |
|
13 |
|
|
|
8 |
|
|
63% |
|
|
36 |
|
|
|
36 |
|
|
— |
% |
Transaction and merger-related
costs, net |
|
— |
|
|
|
(12 |
) |
|
N/M |
|
|
1 |
|
|
|
8 |
|
|
(88)% |
Other operating |
|
40 |
|
|
|
41 |
|
|
(2)% |
|
|
119 |
|
|
|
128 |
|
|
(7)% |
Total operating
expenses |
|
937 |
|
|
|
850 |
|
|
10% |
|
|
2,698 |
|
|
|
2,510 |
|
|
7 |
% |
Operating income
(loss) |
|
(54 |
) |
|
|
56 |
|
|
N/M |
|
|
— |
|
|
|
(90 |
) |
|
N/M |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(8 |
) |
|
|
(4 |
) |
|
100% |
|
|
(21 |
) |
|
|
(16 |
) |
|
31 |
% |
Capitalized interest |
|
7 |
|
|
|
3 |
|
|
133% |
|
|
19 |
|
|
|
6 |
|
|
217 |
% |
Interest income and other |
|
10 |
|
|
|
3 |
|
|
233% |
|
|
28 |
|
|
|
5 |
|
|
460 |
% |
Total other income
(expense) |
|
9 |
|
|
|
2 |
|
|
350% |
|
|
26 |
|
|
|
(5 |
) |
|
N/M |
|
Income (loss) before income
taxes |
|
(45 |
) |
|
|
58 |
|
|
N/M |
|
|
26 |
|
|
|
(95 |
) |
|
N/M |
|
Income tax expense
(benefit) |
|
(13 |
) |
|
|
27 |
|
|
N/M |
|
|
— |
|
|
|
(18 |
) |
|
N/M |
|
Net income
(loss) |
$ |
(32 |
) |
|
$ |
31 |
|
|
N/M |
|
$ |
26 |
|
|
$ |
(77 |
) |
|
N/M |
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic(a) |
$ |
(0.14 |
) |
|
$ |
0.13 |
|
|
N/M |
|
$ |
0.12 |
|
|
$ |
(0.36 |
) |
|
N/M |
|
Diluted(a) |
$ |
(0.14 |
) |
|
$ |
0.13 |
|
|
N/M |
|
$ |
0.12 |
|
|
$ |
(0.36 |
) |
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic(a) |
|
220,837,983 |
|
|
|
217,720,426 |
|
|
1% |
|
|
219,483,736 |
|
|
|
217,532,815 |
|
|
1 |
% |
Diluted(a) |
|
220,837,983 |
|
|
|
219,878,940 |
|
|
—% |
|
|
220,638,883 |
|
|
|
217,532,815 |
|
|
1 |
% |
__________________N/M = Not meaningful
(a) In periods of net income, the dilutive
impact of the 3.1 million warrants outstanding relating to funding
provided pursuant to the CARES Act and related legislation, any
non-participating options and unvested restricted stock units are
included in the diluted earnings per share calculations. In
addition, most of the Company's 4.9 million outstanding options are
participating securities and are therefore not expected to be part
of the Company's diluted share count under the two-class method
until they are exercised, but, in periods of net income, are
included as an adjustment to the numerator of the Company's
earnings per share calculation as they are eligible to participate
in the Company's earnings. The participating securities impact has
been subtracted from periods presented with positive net income in
the computation of basic and diluted earnings per share.
Frontier Group Holdings, Inc.Selected
Operating Statistics(unaudited) |
|
Three Months Ended September 30, |
|
Percent Change |
|
Nine Months Ended September 30, |
|
Percent Change |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Operating
statistics(a) |
|
|
|
|
|
|
|
|
|
|
|
Available seat miles (ASMs)
(millions) |
9,697 |
|
|
8,040 |
|
|
21 |
% |
|
27,809 |
|
|
23,076 |
|
|
21 |
% |
Departures |
48,627 |
|
|
42,627 |
|
|
14 |
% |
|
136,747 |
|
|
122,040 |
|
|
12 |
% |
Average stage length
(miles) |
996 |
|
|
974 |
|
|
2 |
% |
|
1,028 |
|
|
976 |
|
|
5 |
% |
Block hours |
133,305 |
|
|
113,922 |
|
|
17 |
% |
|
385,129 |
|
|
329,533 |
|
|
17 |
% |
Average aircraft in
service |
128 |
|
|
112 |
|
|
14 |
% |
|
124 |
|
|
111 |
|
|
12 |
% |
Aircraft – end of period |
134 |
|
|
115 |
|
|
17 |
% |
|
134 |
|
|
115 |
|
|
17 |
% |
Average daily aircraft
utilization (hours) |
11.3 |
|
|
11.1 |
|
|
2 |
% |
|
11.4 |
|
|
10.9 |
|
|
5 |
% |
Passengers (thousands) |
7,697 |
|
|
6,704 |
|
|
15 |
% |
|
22,119 |
|
|
18,650 |
|
|
19 |
% |
Average seats per
departure |
200 |
|
|
193 |
|
|
4 |
% |
|
198 |
|
|
193 |
|
|
3 |
% |
Revenue passenger miles (RPMs)
(millions) |
7,755 |
|
|
6,635 |
|
|
17 |
% |
|
22,981 |
|
|
18,547 |
|
|
24 |
% |
Load Factor |
80.0 |
% |
|
82.5 |
% |
|
(2.5)pts |
|
|
82.6 |
% |
|
80.4 |
% |
|
2.2pts |
|
Fare revenue per
passenger ($) |
39.17 |
|
|
57.57 |
|
|
(32)% |
|
|
43.65 |
|
|
55.49 |
|
|
(21) |
% |
Non-fare passenger revenue per
passenger ($) |
72.77 |
|
|
74.18 |
|
|
(2)% |
|
|
75.57 |
|
|
71.09 |
|
|
6 |
% |
Other revenue per
passenger ($) |
2.77 |
|
|
3.45 |
|
|
(20)% |
|
|
2.74 |
|
|
3.18 |
|
|
(14) |
% |
Total ancillary revenue per
passenger ($) |
75.54 |
|
|
77.63 |
|
|
(3)% |
|
|
78.31 |
|
|
74.27 |
|
|
5 |
% |
Total revenue per
passenger ($) |
114.71 |
|
|
135.20 |
|
|
(15)% |
|
|
121.96 |
|
|
129.76 |
|
|
(6) |
% |
Total revenue per available
seat mile (RASM) (¢) |
9.10 |
|
|
11.27 |
|
|
(19)% |
|
|
9.70 |
|
|
10.49 |
|
|
(8) |
% |
Cost per available seat mile
(CASM) (¢) |
9.66 |
|
|
10.57 |
|
|
(9)% |
|
|
9.70 |
|
|
10.88 |
|
|
(11) |
% |
CASM (excluding fuel) (¢) |
6.66 |
|
|
6.76 |
|
|
(1)% |
|
|
6.73 |
|
|
7.17 |
|
|
(6)% |
% |
CASM + net interest (¢) |
9.56 |
|
|
10.55 |
|
|
(9)% |
|
|
9.61 |
|
|
10.90 |
|
|
(12) |
% |
Adjusted CASM (¢) |
9.66 |
|
|
10.71 |
|
|
(10)% |
|
|
9.70 |
|
|
10.80 |
|
|
(10) |
% |
Adjusted CASM (excluding fuel)
(¢) |
6.66 |
|
|
6.90 |
|
|
(3)% |
|
|
6.72 |
|
|
7.09 |
|
|
(5) |
% |
Adjusted CASM + net interest
(¢) |
9.56 |
|
|
10.68 |
|
|
(10)% |
|
|
9.60 |
|
|
10.79 |
|
|
(11) |
% |
Fuel cost per gallon ($) |
3.08 |
|
|
3.85 |
|
|
(20)% |
|
|
3.07 |
|
|
3.76 |
|
|
(18) |
% |
Fuel gallons consumed
(thousands) |
94,459 |
|
|
79,566 |
|
|
19 |
% |
|
269,425 |
|
|
227,559 |
|
|
18 |
% |
Full-time equivalent employees
(FTEs) |
6,959 |
|
|
6,126 |
|
|
14 |
% |
|
6,959 |
|
|
6,126 |
|
|
14 |
% |
__________________(a) Figures may not
recalculate due to rounding.
Reconciliations of Non-GAAP Financial
Information
The Company is providing below a reconciliation of GAAP
financial information to the non-GAAP financial information
provided. The non-GAAP financial information is included to provide
supplemental disclosures because the Company believes they are
useful additional indicators of, among other things, its operating
and cost performance. These non-GAAP financial measures have
limitations as analytical tools. Because of these limitations,
determinations of the Company’s operating performance or CASM
excluding unrealized gains and losses, special items or other items
should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP. These
non-GAAP financial measures may be presented on a different basis
than other companies using similarly titled non-GAAP financial
measures.
Reconciliation of Net Income (Loss) to Adjusted Net
Income (Loss) and Adjusted Pre-tax Income (Loss)($
in millions) (unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net income (loss), as
reported |
$ |
(32 |
) |
|
$ |
31 |
|
|
$ |
26 |
|
$ |
(77 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
Salaries, wages and
benefits |
|
|
|
|
|
|
|
Collective bargaining contract ratification(a) |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
2 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
Asset impairment(b) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
7 |
|
Other operating
expenses |
|
|
|
|
|
|
|
Transaction and merger-related costs, net(c) |
|
— |
|
|
|
(12 |
) |
|
|
1 |
|
|
8 |
|
Interest
expense |
|
|
|
|
|
|
|
CARES Act – write-off of deferred financing costs due to paydown of
loan(d) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
7 |
|
Pre-tax
impact |
|
— |
|
|
|
(11 |
) |
|
|
1 |
|
|
24 |
|
Tax benefit (expense), related to non-GAAP adjustments(e) |
|
— |
|
|
|
13 |
|
|
|
— |
|
|
(3 |
) |
Net income (loss)
impact |
|
— |
|
|
|
2 |
|
|
|
1 |
|
|
21 |
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)(f) |
$ |
(32 |
) |
|
$ |
33 |
|
|
$ |
27 |
|
$ |
(56 |
) |
|
|
|
|
|
|
|
|
Income (loss) before
income taxes, as reported |
$ |
(45 |
) |
|
$ |
58 |
|
|
$ |
26 |
|
$ |
(95 |
) |
Pre-tax impact |
|
— |
|
|
|
(11 |
) |
|
|
1 |
|
|
24 |
|
Adjusted pre-tax
income (loss)(f) |
$ |
(45 |
) |
|
$ |
47 |
|
|
$ |
27 |
|
$ |
(71 |
) |
__________________(a) Represents costs related
to the collective bargaining contract ratification costs earned
through May 2023 and committed to by the Company as part of an
agreement with the union representing aircraft technicians that was
ratified and became effective in May 2022.
(b) Represents a write-off of capitalized
software development costs as a result of a termination of a vendor
arrangement.
(c) For the nine months ended
September 30, 2023, adjustments primarily represent
$1 million in employee retention costs incurred in connection
with the terminated merger with Spirit Airlines, Inc. For the three
and nine months ended September 30, 2022, adjustments
represent $4 million and $16 million, respectively, in
transaction costs, including banking, legal and accounting fees,
and $9 million and $17 million, respectively, in employee
retention costs incurred in connection with the terminated merger
with Spirit, offset by $25 million in reimbursements from
Spirit after the termination of the merger agreement in each of the
three and nine months ended September 30, 2022.
(d) On February 2, 2022, the Company repaid the
loan under its facility with the U.S. Department of the Treasury,
which resulted in a one-time write-off of the remaining
$7 million in unamortized deferred financing costs. This
amount is a component of interest expense.
(e) For purposes of determining the tax rate
applicable to Adjusted (i.e., non-GAAP) net income (loss) with
respect to the three and nine months ended September 30, 2022,
the Company established the adjusted effective tax rate by using
September 30, 2022 actual results. In contrast, for all other
interim periods, the Company determined the effective tax rate on a
non-GAAP basis by using full year actual and projected results to
determine the effective tax rate to calculate Adjusted net income
(loss). Management believed the use of September 30, 2022
actuals to calculate an adjusted tax rate for the three and nine
month interim periods then ended provided a more meaningful
relationship between income tax expense and Adjusted pre-tax income
(loss) than would be produced using the full year and projected
results method due to the shift from an adjusted pre-tax loss in
early 2022 to actual and forecasted profitability in the third and
fourth quarters of 2022 combined with an expectation of annual
adjusted pre-tax results being near break-even and the resulting
impact of non-deductible items. GAAP permits the use of the actual
results method under such circumstances. However, the foregoing
methodology was applied solely to the non-GAAP presentation in the
prior year periods. Income tax expense was calculated on a GAAP
basis for all periods presented and on a non-GAAP basis for the
current year using the estimated annual effective tax rate method
which uses an expectation of full year pre-tax income (loss) in the
determination of interim effective tax rates as this method does
not produce significant variations in the customary relationship
between income tax expense and pre-tax accounting income.
(f) Adjusted net income (loss) and adjusted
pre-tax income (loss) are included as a supplemental disclosure
because the Company believes they are useful indicators of its
operating performance. Derivations of net income and pre-tax income
are well-recognized performance measurements in the airline
industry that are frequently used by the Company's management, as
well as by investors, securities analysts and other interested
parties, in comparing the operating performance of companies in the
airline industry.
Adjusted net income (loss) and adjusted pre-tax income (loss)
have limitations as analytical tools. Adjusted net income (loss)
and adjusted pre-tax income (loss) do not reflect the impact of
certain cash charges resulting from matters the Company considers
not to be indicative of the Company's ongoing operations and do not
reflect the Company's cash expenditures, or future requirements,
for capital expenditures or contractual commitments, and other
companies in the industry may calculate adjusted net income (loss)
and adjusted pre-tax income (loss) differently than the Company
does, limiting their usefulness as comparative measures. Because of
these limitations, adjusted net income (loss) and adjusted pre-tax
income (loss) should not be considered in isolation from or as a
substitute for performance measures calculated in accordance with
GAAP. In addition, because derivations of adjusted net income
(loss) and adjusted pre-tax income (loss), including adjusted
pre-tax margin, are not determined in accordance with GAAP, such
measures are susceptible to varying calculations and not all
companies calculate the measures in the same manner. As a result,
derivations of net income, including adjusted net income (loss) and
adjusted pre-tax income (loss), as presented may not be directly
comparable to similarly titled measures presented by other
companies. For the foregoing reasons, adjusted net income (loss)
and adjusted pre-tax income (loss) have significant limitations
which affect their use as indicators of the Company's
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Reconciliation of Total Operating Expenses to Total
Operating Expenses (excluding fuel), Adjusted Total Operating
Expenses and Adjusted Total Operating Expenses (excluding
fuel)($ in millions) (unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total operating
expenses, as reported(a) |
$ |
937 |
|
|
$ |
850 |
|
|
$ |
2,698 |
|
|
$ |
2,510 |
|
Transaction and merger-related
costs, net |
|
— |
|
|
|
12 |
|
|
|
(1 |
) |
|
|
(8 |
) |
Asset impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
Collective bargaining contract
ratification |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
Adjusted total
operating expenses(b) |
|
937 |
|
|
|
861 |
|
|
|
2,697 |
|
|
|
2,493 |
|
Aircraft fuel |
|
(291 |
) |
|
|
(306 |
) |
|
|
(827 |
) |
|
|
(856 |
) |
Adjusted total
operating expenses (excluding
fuel)(b) |
$ |
646 |
|
|
$ |
555 |
|
|
$ |
1,870 |
|
|
$ |
1,637 |
|
|
|
|
|
|
|
|
|
Total operating
expenses, as reported |
$ |
937 |
|
|
$ |
850 |
|
|
$ |
2,698 |
|
|
$ |
2,510 |
|
Aircraft fuel |
|
(291 |
) |
|
|
(306 |
) |
|
|
(827 |
) |
|
|
(856 |
) |
Total operating
expenses (excluding fuel)(b) |
$ |
646 |
|
|
$ |
544 |
|
|
$ |
1,871 |
|
|
$ |
1,654 |
|
__________________
(a) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Adjusted Pre-tax Income (Loss)”
above for discussion on adjusting items.
(b) Total operating expenses (excluding fuel),
adjusted total operating expenses and adjusted total operating
expenses (excluding fuel) are included as supplemental disclosures
because the Company believes they are useful indicators of its
operating performance. Derivations of total operating expenses are
well-recognized performance measurements in the airline industry
that are frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties, in
comparing the operating performance of companies in the airline
industry.
Total operating expenses (excluding fuel), adjusted total
operating expenses and adjusted total operating expenses (excluding
fuel) have limitations as analytical tools and other companies in
the industry may calculate total operating expenses (excluding
fuel), adjusted total operating expenses and adjusted total
operating expenses (excluding fuel) differently than the Company
does, limiting their usefulness as comparative measures. Because of
these limitations, total operating expenses (excluding fuel),
adjusted total operating expenses and adjusted total operating
expenses (excluding fuel) should not be considered in isolation
from or as a substitute for performance measures calculated in
accordance with GAAP. In addition, because derivations of total
operating expenses (excluding fuel), adjusted total operating
expenses and adjusted total operating expenses (excluding fuel) are
not determined in accordance with GAAP, such measures are
susceptible to varying calculations and not all companies calculate
the measures in the same manner. As a result, derivations of total
operating expenses, including total operating expenses (excluding
fuel), adjusted total operating expenses and adjusted total
operating expenses (excluding fuel) as presented may not be
directly comparable to similarly titled measures presented by other
companies. For the foregoing reasons, total operating expenses
(excluding fuel), adjusted total operating expenses and adjusted
total operating expenses (excluding fuel) have significant
limitations which affect their use as an indicator of the Company's
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Reconciliation of Net Income (Loss) to EBITDA and
EBITDAR and to Adjusted EBITDA and Adjusted
EBITDAR($ in millions) (unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
(32 |
) |
|
$ |
31 |
|
|
$ |
26 |
|
|
$ |
(77 |
) |
Plus (minus): |
|
|
|
|
|
|
|
Interest expense |
|
8 |
|
|
|
4 |
|
|
|
21 |
|
|
|
16 |
|
Capitalized interest |
|
(7 |
) |
|
|
(3 |
) |
|
|
(19 |
) |
|
|
(6 |
) |
Interest income and other |
|
(10 |
) |
|
|
(3 |
) |
|
|
(28 |
) |
|
|
(5 |
) |
Income tax expense (benefit) |
|
(13 |
) |
|
|
27 |
|
|
|
— |
|
|
|
(18 |
) |
Depreciation and amortization |
|
13 |
|
|
|
8 |
|
|
|
36 |
|
|
|
36 |
|
EBITDA(a) |
|
(41 |
) |
|
|
64 |
|
|
|
36 |
|
|
|
(54 |
) |
Plus: Aircraft rent |
|
150 |
|
|
|
140 |
|
|
|
429 |
|
|
|
401 |
|
EBITDAR(b) |
$ |
109 |
|
|
$ |
204 |
|
|
$ |
465 |
|
|
$ |
347 |
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
(41 |
) |
|
$ |
64 |
|
|
$ |
36 |
|
|
$ |
(54 |
) |
Plus (minus)(c): |
|
|
|
|
|
|
|
Transaction and merger-related costs, net |
|
— |
|
|
|
(12 |
) |
|
|
1 |
|
|
|
8 |
|
Collective bargaining contract ratification |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
Adjusted
EBITDA(a) |
|
(41 |
) |
|
|
53 |
|
|
|
37 |
|
|
|
(44 |
) |
Plus: Aircraft rent |
|
150 |
|
|
|
140 |
|
|
|
429 |
|
|
|
401 |
|
Adjusted
EBITDAR(b) |
$ |
109 |
|
|
$ |
193 |
|
|
$ |
466 |
|
|
$ |
357 |
|
__________________(a) EBITDA and adjusted
EBITDA are included as supplemental disclosures because the Company
believes they are useful indicators of its operating performance.
Derivations of EBITDA are well-recognized performance measurements
in the airline industry that are frequently used by the Company's
management, as well as by investors, securities analysts and other
interested parties, in comparing the operating performance of
companies in the industry.
EBITDA and adjusted EBITDA do not reflect the impact of certain
cash charges resulting from matters the Company considers not to be
indicative of its ongoing operations; the Company's cash
expenditures, or future requirements, for capital expenditures or
contractual commitments; changes in, or cash requirements for, the
Company's working capital needs; or the interest expense, or the
cash requirements necessary to service interest or principal
payments, on the Company's indebtedness or possible cash
requirements related to its warrants. Further, although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future, and EBITDA and adjusted EBITDA do not reflect any cash
requirements for such replacements. Other companies in the airline
industry may calculate EBITDA and adjusted EBITDA differently than
the Company does, limiting their usefulness as comparative
measures. Because of these limitations, EBITDA and adjusted EBITDA
should not be considered in isolation from or as a substitute for
performance measures calculated in accordance with GAAP. In
addition, because derivations of EBITDA and adjusted EBITDA are not
determined in accordance with GAAP, such measures are susceptible
to varying calculations and not all companies calculate the
measures in the same manner. As a result, derivations of EBITDA,
including adjusted EBITDA, as presented may not be directly
comparable to similarly titled measures presented by other
companies.
For the foregoing reasons, each of EBITDA and adjusted EBITDA
have significant limitations which affect its use as an indicator
of the Company's profitability. Accordingly, you are cautioned not
to place undue reliance on this information.
(b) EBITDAR and adjusted EBITDAR are included
as supplemental disclosures because the Company believes they are
useful solely as valuation metrics for airlines as their
calculations isolate the effects of financing in general, the
accounting effects of capital spending and acquisitions (primarily
aircraft, which may be acquired directly, directly subject to
acquisition debt, by capital lease or by operating lease, each of
which is presented differently for accounting purposes), and income
taxes, which may vary significantly between periods and for
different airlines for reasons unrelated to the underlying value of
a particular airline. However, EBITDAR and adjusted EBITDAR are not
determined in accordance with GAAP, are susceptible to varying
calculations and not all companies calculate the measures in the
same manner. As a result, EBITDAR and adjusted EBITDAR, as
presented, may not be directly comparable to similarly titled
measures presented by other companies. In addition, EBITDAR and
adjusted EBITDAR should not be viewed as a measure of overall
performance since they exclude aircraft rent, which is a normal,
recurring cash operating expense that is necessary to operate the
business. Accordingly, you are cautioned not to place undue
reliance on this information.
(c) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Adjusted Pre-tax Income (Loss)”
above for discussion on adjusting items.
Reconciliation of CASM to CASM (excluding fuel),
Adjusted CASM (excluding fuel), Adjusted CASM,
Adjusted CASM including net interest and CASM including net
interest (unaudited)
|
Three Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
($ in millions) |
|
Per ASM (¢) |
|
($ in millions) |
|
Per ASM (¢) |
CASM(a)(b) |
|
|
9.66 |
|
|
|
|
10.57 |
|
Aircraft fuel |
(291 |
) |
|
(3.00 |
) |
|
(306 |
) |
|
(3.81 |
) |
CASM (excluding
fuel)(c) |
|
|
6.66 |
|
|
|
|
6.76 |
|
Transaction and merger-related
costs, net |
— |
|
|
— |
|
|
12 |
|
|
0.15 |
|
Collective bargaining contract
ratification |
— |
|
|
— |
|
|
(1 |
) |
|
(0.01 |
) |
Adjusted CASM
(excluding fuel)(c) |
|
|
6.66 |
|
|
|
|
6.90 |
|
Aircraft fuel |
291 |
|
|
3.00 |
|
|
306 |
|
|
3.81 |
|
Adjusted
CASM(d) |
|
|
9.66 |
|
|
|
|
10.71 |
|
Net interest expense
(income) |
(9 |
) |
|
(0.10 |
) |
|
(2 |
) |
|
(0.03 |
) |
Adjusted CASM + net
interest(e) |
|
|
9.56 |
|
|
|
|
10.68 |
|
|
|
|
|
|
|
|
|
CASM |
|
|
9.66 |
|
|
|
|
10.57 |
|
Net interest expense
(income) |
(9 |
) |
|
(0.10 |
) |
|
(2 |
) |
|
(0.02 |
) |
CASM + net
interest(e) |
|
|
9.56 |
|
|
|
|
10.55 |
|
_______________________(a) Cost per ASM figures
may not recalculate due to rounding.
(b) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Adjusted Pre-tax Income (Loss)”
above for discussion on adjusting items.
(c) CASM (excluding fuel) and adjusted CASM
(excluding fuel) are included as supplemental disclosures because
the Company believes that excluding aircraft fuel is useful to
investors as it provides an additional measure of management’s
performance excluding the effects of a significant cost item over
which management has limited influence. The price of fuel, over
which the Company has limited control, impacts the comparability of
period-to-period financial performance, and excluding allows
management an additional tool to understand and analyze the
Company's non-fuel costs and core operating performance, and
increases comparability with other airlines that also provide a
similar metric. CASM (excluding fuel) and adjusted CASM (excluding
fuel) are not determined in accordance with GAAP and should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP.
(d) Adjusted CASM is included as supplemental
disclosure because the Company believes it is a useful metric to
properly compare the Company’s cost management and performance to
other peers, as derivations of adjusted CASM are well-recognized
performance measurements in the airline industry that are
frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties in
comparing the operating performance of companies in the airline
industry. Additionally, the Company believes this metric is useful
because it removes certain items that may not be indicative of base
operating performance or future results. Adjusted CASM is not
determined in accordance with GAAP, may not be comparable across
all carriers and should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
(e) Adjusted CASM including net interest and
CASM including net interest are included as supplemental
disclosures because the Company believes they are useful metrics to
properly compare its cost management and performance to other peers
that may have different capital structures and financing
strategies, particularly as it relates to financing primary
operating assets such as aircraft and engines. Additionally, the
Company believes these metrics are useful because they remove
certain items that may not be indicative of base operating
performance or future results. Adjusted CASM including net interest
and CASM including net interest are not determined in accordance
with GAAP, may not be comparable across all carriers and should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP.Reconciliation
of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel),
Adjusted CASM, Adjusted CASM including net
interest and CASM including net interest
(unaudited)
|
Nine Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
($ in millions) |
|
Per ASM (¢) |
|
($ in millions) |
|
Per ASM (¢) |
CASM(a)(b) |
|
|
9.70 |
|
|
|
|
10.88 |
|
Aircraft fuel |
(827 |
) |
|
(2.97 |
) |
|
(856 |
) |
|
(3.71 |
) |
CASM (excluding
fuel)(c) |
|
|
6.73 |
|
|
|
|
7.17 |
|
Transaction and merger-related
costs, net |
(1 |
) |
|
(0.01 |
) |
|
(8 |
) |
|
(0.04 |
) |
Asset impairment |
— |
|
|
— |
|
|
(7 |
) |
|
(0.03 |
) |
Collective bargaining contract
ratification |
— |
|
|
— |
|
|
(2 |
) |
|
(0.01 |
) |
Adjusted CASM
(excluding fuel)(c) |
|
|
6.72 |
|
|
|
|
7.09 |
|
Aircraft fuel |
827 |
|
|
2.98 |
|
|
856 |
|
|
3.71 |
|
Adjusted
CASM(d) |
|
|
9.70 |
|
|
|
|
10.80 |
|
Net interest expense
(income) |
(26 |
) |
|
(0.10 |
) |
|
5 |
|
|
0.02 |
|
CARES Act – write-off of
deferred financing costs due to paydown of loan |
— |
|
|
— |
|
|
(7 |
) |
|
(0.03 |
) |
Adjusted CASM + net
interest(e) |
|
|
9.60 |
|
|
|
|
10.79 |
|
|
|
|
|
|
|
|
|
CASM |
|
|
9.70 |
|
|
|
|
10.88 |
|
Net interest expense
(income) |
(26 |
) |
|
(0.09 |
) |
|
5 |
|
|
0.02 |
|
CASM + net
interest(e) |
|
|
9.61 |
|
|
|
|
10.90 |
|
_______________________(a) Cost per ASM figures
may not recalculate due to rounding.
(b) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Adjusted Pre-tax Income (Loss)”
above for discussion on adjusting items.
(c) CASM (excluding fuel) and adjusted CASM
(excluding fuel) are included as supplemental disclosures because
the Company believes that excluding aircraft fuel is useful to
investors as it provides an additional measure of management’s
performance excluding the effects of a significant cost item over
which management has limited influence. The price of fuel, over
which the Company has limited control, impacts the comparability of
period-to-period financial performance, and excluding allows
management an additional tool to understand and analyze the
Company's non-fuel costs and core operating performance, and
increases comparability with other airlines that also provide a
similar metric. CASM (excluding fuel) and adjusted CASM (excluding
fuel) are not determined in accordance with GAAP and should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP.
(d) Adjusted CASM is included as supplemental
disclosure because the Company believes it is a useful metric to
properly compare the Company’s cost management and performance to
other peers, as derivations of adjusted CASM are well-recognized
performance measurements in the airline industry that are
frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties in
comparing the operating performance of companies in the airline
industry. Additionally, the Company believes this metric is useful
because it removes certain items that may not be indicative of base
operating performance or future results. Adjusted CASM is not
determined in accordance with GAAP, may not be comparable across
all carriers and should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
(e) Adjusted CASM including net interest and
CASM including net interest are included as supplemental
disclosures because the Company believes they are useful metrics to
properly compare its cost management and performance to other peers
that may have different capital structures and financing
strategies, particularly as it relates to financing primary
operating assets such as aircraft and engines. Additionally, the
Company believes these metrics are useful because they remove
certain items that may not be indicative of base operating
performance or future results. Adjusted CASM including net interest
and CASM including net interest are not determined in accordance
with GAAP, may not be comparable across all carriers and should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP.
Reconciliation of Net Income (Loss) per Share to
Adjusted Net Income (Loss) per
Share(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net income (loss) per
share, diluted, as reported(a)(b) |
$ |
(0.14 |
) |
|
$ |
0.13 |
|
|
$ |
0.12 |
|
$ |
(0.36 |
) |
Transaction and merger-related costs, net |
|
— |
|
|
|
(0.05 |
) |
|
|
— |
|
|
0.04 |
|
Asset Impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
0.03 |
|
Collective bargaining contract ratification |
|
— |
|
|
|
— |
|
|
|
— |
|
|
0.01 |
|
CARES Act — write-off of deferred financing costs due to paydown of
loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
0.03 |
|
Tax benefit (expense), related to non-GAAP adjustments |
|
— |
|
|
|
0.07 |
|
|
|
— |
|
|
(0.01 |
) |
Adjusted net income
(loss) per share, diluted(c) |
$ |
(0.14 |
) |
|
$ |
0.15 |
|
|
$ |
0.12 |
|
$ |
(0.26 |
) |
______________________(a) See “Reconciliation
of Net Income (Loss) to Adjusted Net Income (Loss) and Adjusted
Pre-tax Income (Loss)” above for discussion on adjusting items.
(b) Cost per share figures may not recalculate
due to rounding.
(c) Adjusted net income (loss) per share is
included as a supplemental disclosure because the Company believes
it is a useful indicator of operating performance. Derivations of
net income are well-recognized performance measurements in the
airline industry that are frequently used by management, as well as
by investors, securities analysts and other interested parties in
comparing the operating performance of companies in the
industry.
Adjusted net income (loss) per share has limitations as an
analytical tool. Adjusted net income (loss) per share does not
reflect the impact of certain cash charges resulting from matters
the Company considers not to be indicative of ongoing operations
and does not reflect the cash expenditures, or future requirements,
for capital expenditures or contractual commitments, and other
companies in the industry may calculate Adjusted net income (loss)
per share differently than the Company does, limiting its
usefulness as a comparative measure. Because of these limitations,
Adjusted net income (loss) per share should not be considered in
isolation from or as a substitute for performance measures
calculated in accordance with GAAP. In addition, because
derivations of adjusted net income are not determined in accordance
with GAAP, such measures are susceptible to varying calculations
and not all companies calculate the measures in the same manner. As
a result, derivations of net income, including Adjusted net income
(loss) per share, as presented may not be directly comparable to
similarly titled measures presented by other companies. For the
foregoing reasons, Adjusted net income (loss) per share has
significant limitations which affect its use as an indicator of
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Contacts:
Jennifer F. de la Cruz
Corporate Communications
Email: JenniferF.DeLaCruz@flyfrontier.com
Phone: 720.374.4207
David Erdman
Investor Relations
Email: David.Erdman@flyfrontier.com
Phone: 720.798.5886
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