Frontier Group Holdings, Inc., parent company of Frontier Airlines,
Inc. (NASDAQ: ULCC), today reported its financial results for the
first quarter of 2021.
During the quarter, Frontier experienced a strong rebound in
demand as leisure travel strengthened ahead of spring break and
Easter, leading the Company to be cash positive1 in March. The
Company ended the first quarter of 2021 with $853 million of
unrestricted cash and cash equivalents and liquidity available
under its Treasury Loan facility. On March 31, 2021, Frontier
priced an initial public offering, which closed shortly after the
end of the quarter. The IPO generated $271 million of net proceeds
to Frontier before an estimated $6 million in offering
expenses.
“This is our first quarter reporting as a public company and we
couldn’t be more pleased with what we are seeing relative to the
recovery in leisure travel,” said Barry Biffle, Frontier’s
president and CEO. “We believe our relative cost advantage driven
by financial discipline coupled with our focus on leisure travel
positions us well to be among the airline industry leaders as
demand for leisure travel continues to rebound. In addition, we
diligently limited the amount of debt added to our balance sheet
while maintaining a strong liquidity position.” Biffle added, “We
are well poised to take advantage of the recovery and expect to
return to profitability in the second half of 2021.”
The following is a summary of select financial results for the
first quarter of 2021, including both GAAP and adjusted (Non-GAAP)
metrics. Please see “Reconciliation of Non-GAAP Financial
Information” below.
(unaudited, in
millions, except for percentage and per share amounts) |
|
|
Three Months Ended March 31 |
|
|
|
2021 |
|
|
2020 |
|
|
|
As Reported(GAAP) |
|
Adjusted(Non-GAAP) |
|
As Reported(GAAP) |
|
Adjusted(Non-GAAP) |
|
Total operating revenues |
|
$ |
271 |
|
$ |
271 |
|
$ |
544 |
|
$ |
544 |
|
Total operating expenses |
|
$ |
363 |
|
$ |
495 |
|
$ |
650 |
|
$ |
587 |
|
Net income (loss) |
|
$ |
(91) |
|
$ |
(173) |
|
$ |
(64) |
|
$ |
(25) |
|
Net income (loss) margin |
|
|
(33.6)% |
|
|
(63.8)% |
|
|
(11.8)% |
|
|
(4.6)% |
|
Diluted earnings (loss) per
share2 |
|
$ |
(0.46) |
|
$ |
(0.86) |
|
$ |
(0.32) |
|
$ |
(0.12) |
|
Recent Company Highlights:
- Completed a successful initial
public offering and commenced trading on the Nasdaq Global Select
Market on April 1, 2021 under the ticker symbol “ULCC,” an acronym
for Ultra Low-Cost Carrier.
- Moved from a cash burn1 position to
being cash positive in the month of March as demand for leisure
travel began to rebound.
- Finalized a transaction to
accelerate the return of the four remaining A319 aircraft from the
Company’s fleet. Three aircraft will exit Frontier’s fleet during
the second quarter of 2021 and the fourth aircraft will exit in the
third quarter 2021. It has been a long-stated goal of the Company
to replace all of its A319 aircraft with larger and more fuel
efficient A320 and A321 aircraft.
- Added three A320neo aircraft
featuring fuel-efficient engines to the fleet during the first
quarter of 2021, which were the first aircraft to feature our new
30 percent lighter-weight Recaro seats as part of Frontier’s
commitment to being “America’s Greenest Airline.” In addition to
the fuel efficiency provided by the engines, this move to lighter
seats is part of a continuous pursuit to reduce the Company’s
environmental footprint.
- Frontier is also committed to
highlighting endangered species on the tail of its aircraft. As an
example, one of the three aircraft added during the quarter
features Francie, a Piping Plover, whose name pays homage to Dr.
Francie Cuthbert, a wildlife biologist dedicated to helping
preserve the endangered shorebird that nests and feeds along
coastal sand and gravel beaches in North America. The other two
aircraft added during the quarter feature two other endangered
species -- Crystal the Florida Manatee and Hudson the Bog
Turtle.
- Added more leisure destinations for
customers for summer 2021, including Nassau, The Bahamas; San Jose,
Costa Rica and St. Maarten. These additions come on the heels of
new flight service to Guatemala City, Guatemala and San Salvador,
El Salvador in Latin America. Frontier also added new nonstop
routes in key markets that include Atlanta, Dallas, Denver, Las
Vegas and Salt Lake City. New service was also announced to
Alaska.
Cash and Liquidity:
Frontier ended the first quarter of 2021 with $853 million of
unrestricted cash and cash equivalents and liquidity available
under its Treasury Loan facility. Subsequent to the quarter, the
Company received $271 million of net proceeds from its IPO before
an estimated $6 million in offering expenses and $96 million of
additional payroll support program funding provided by the U.S.
government (consisting of $21 million from “PSP2” and $75 million
from “PSP3”). Frontier also expects to receive an additional $75
million of PSP3 funding in the second quarter of 2021. Considering
the net proceeds from its IPO, amounts received under PSP2 and PSP3
and the remaining PSP3 amount expected to be received, Frontier
does not anticipate drawing any further funds under the Treasury
Loan facility (additional funds can be drawn on the facility
through May 28, 2021).
Frontier’s management expects that its current income tax
receivable of $161 million will provide the Company with an
opportunity, when received, to assess the repayment of the $150
million currently outstanding under its Treasury Loan facility
without utilizing other existing liquidity. Repaying the
outstanding amounts would consequently unencumber the Company’s
co-brand credit card program and related brand assets that are
currently collateralizing the facility. Management believes that
the Company’s loyalty program, encompassing its co-brand credit
card program and Discount Den subscription program, together with
the Frontier brand, could generate substantial liquidity should the
need arise.
“Frontier is in a very strong liquidity position following the
successful completion of our IPO, the additional payroll support
program funding (PSP2 and PSP3) provided by the U.S. government and
the strengthening recovery in demand for air travel across the
U.S.,” said James Dempsey, Frontier’s EVP and CFO. “This strong
liquidity position will enable Frontier to quickly return to its
pre-COVID-19 traffic growth trajectory.”
Revenue Performance
Total operating revenues for the first quarter of 2021 were $271
million, a decrease of 50 percent as compared to the first quarter
of 2020. This decrease was due to the significant reduction in
demand for air travel beginning in March 2020, caused by the
COVID-19 pandemic. Frontier’s capacity, as measured by ASMs, was
lower by 36 percent during the quarter and the Company’s RASM
declined 22 percent compared to the same period a year ago.
Although Frontier’s deployed capacity has not yet returned to
pre-COVID-19 historical levels, the Company’s departures in March
2021 were 7 percent higher than the departures in March 2019 as the
recovery process strengthened for leisure travel.
Cost Performance
Total operating expenses for the first quarter of 2021 were $363
million, a decrease of 44 percent from the $650 million incurred
during the first quarter of 2020. This decrease was driven by the
36 percent reduction in capacity and the benefit from the
recognition of payroll support program grants under the CARES Act.
The Company’s adjusted total operating expenses of $495 million
were 16 percent lower than the prior year. Adjusted total operating
expenses exclude, among other things, the impact of CARES Act
credits and early lease termination costs. These amounts were
partly offset by the fixed nature of aircraft rent on a larger
fleet and the effect of vendor deferrals received during 2020 but
recognized into expense when repaid in 2021.
Fleet:
As of March 31, 2021, Frontier had a fleet of 107 Airbus
single-aisle aircraft, consisting of 63 A320neos, 19 A320ceos, 21
A321ceos, and 4 A319ceos. All aircraft in the fleet are financed
with operating leases. These leases expire between 2021 and 2033.
Frontier’s fleet is the most fuel-efficient of all U.S. carriers of
significant size when measured by ASMs per fuel gallon consumed.
This fuel efficiency reflects Frontier’s operation of a large
number of aircraft with new generation, fuel-efficient engines,
lightweight seats, and an efficient seating layout.
Frontier took delivery of three A320neo aircraft during the
quarter and expects to take delivery of an additional 10 A320neo
aircraft during the remainder of 2021.
Forward Guidance:
The second quarter and full year 2021 guidance items provided
below are based on the Company's current estimates and are 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 Company’s second quarter and full year 2021
guidance excludes any adverse operational impacts or fuel price
spikes caused by the cyberattack on the Colonial pipeline. Frontier
undertakes no duty to update any forward-looking statements or
estimates.
The Company is encouraged by the strength in forward bookings.
Management’s expectation is that the Company will continue to see
an acceleration in the pace of monthly demand as it moves from
March 2021 through June 2021 and anticipates returning to
profitability in the second half of 2021.
|
|
Second Quarter |
|
|
2021 |
Capacity (versus 2Q
2019)a |
|
(1)% to +1% |
Adjusted total operating
expenses (excluding fuel) ($ millions)b |
|
$480 to $490 |
Average fuel cost per gallonc |
|
$2.00 |
Effective tax rate |
|
~ 22% |
Adjusted net income (loss)
margin range |
|
(10)% to (15)% |
|
|
|
|
|
Full Year |
|
|
2021 |
Pre-delivery deposits, net of
refunds – year over year change ($ millions) |
|
$20 |
Other capital expendituresd ($
millions) |
|
$60 to $80 |
|
|
|
a The Company expects that demand will continue to gradually
recover as 2021 progresses and will monitor and adjust capacity
levels as appropriate. Given the dynamic nature of the current
demand environment, the actual capacity adjustments made by the
Company may be different than what is currently expected. b Amount
estimated excludes fuel expense and special items, which may
include loss on disposal of assets, early lease termination costs,
special charges and credits, and other items which are not
estimable at this time. c Fuel cost per gallon is inclusive of
estimated fuel taxes and into-plane fuel costs.d Other capital
expenditures estimate includes capitalized heavy maintenance.
Investor Conference Call
Frontier’s quarterly earnings conference call is scheduled to be
held today (May 13, 2021) at 4:30 p.m. Eastern Time (USA). The
conference call will be broadcast live over the Internet. Investors
may listen to the live audio webcast on the investor relations
section of the Company's website at https://ir.flyfrontier.com/.
For those who are not available for the live webcast, the call will
be archived and available for at least 30 days on the investor
relations section of the Company's website.
About Frontier Airlines:
Frontier Airlines (NASDAQ: ULCC) is committed to “Low Fares Done
Right.” Headquartered in Denver, Colorado, the Company operates
more than 100 A320 family aircraft and has the largest A320neo
fleet in the U.S. The use of these aircraft, Frontier’s seating
configuration, weight-saving tactics and baggage process have all
contributed to the airline’s average of 43 percent fuel savings
compared to other U.S. airlines (fuel savings is based on Frontier
Airlines’ 2019 fuel consumption per seat-mile compared to the
weighted average of major U.S. airlines), which makes Frontier the
most fuel-efficient U.S. airline. With over 150 new Airbus planes
on order, Frontier will continue to grow to deliver on the mission
of providing affordable travel across America.
End Notes:
1 “Cash burn” means change in cash and cash equivalents during
the period adjusted to exclude cash from CARES Act related debt,
payroll support program grant and employee retention credit funding
and the cash impact of other special items divided by the days in
the period. The Company believes that cash burn is a useful measure
of liquidity consumed by its business. Cash burn refers to periods
where this amount is negative; references to “cash positive” refers
to the foregoing definition when the foregoing calculation is
positive. The Company’s definition of “cash burn” and “cash
positive” may not be calculated in the same manner as similarly
labeled statistics used by other airlines.
2 The diluted earnings (loss) per share amount for both the
Company’s GAAP and non-GAAP results is calculated based upon
199,482,701 and 199,187,260 weighted average diluted common shares
outstanding for the three months ended March 31, 2021 and March 31,
2020, respectively. As the Company’s initial public offering closed
on April 6, 2021, share amounts included in the diluted earnings
(loss) per share calculation for the first quarter of 2021 do not
include the 15 million shares issued and sold by the Company as
part of its initial public offering.
Cautionary Statement Regarding Forward-Looking
Statements and Information:
Certain statements in this release, including statements
regarding the Company’s outlook for the second quarter 2021 and our
earning before tax target range, should be considered
forward-looking statements within the meaning of the Securities
Act, the Exchange Act 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. Such forward-looking statements are and will be
subject to many risks and uncertainties relating to the Company’s
operations and business environment that may cause actual results
to differ materially from any future results expressed or implied
in such forward-looking statements. 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 us 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 factors including,
without limitation, the following: the adverse impacts of the
ongoing COVID-19 global pandemic, and possible outbreaks of
another disease or similar public health threat in the future, on
the Company’s business, operating results, financial condition,
liquidity and near-term and long-term strategic operating plan,
including possible additional adverse impacts resulting from the
duration and spread of the pandemic; unfavorable economic and
political conditions in the states where we operate and globally;
the highly competitive nature of the global airline industry and
susceptibility of the industry to price discounting and changes in
capacity; high and/or volatile fuel prices or significant
disruptions in the supply of aircraft fuel; our reliance on
technology and automated systems to operate our 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 our relationships with these providers or their
provision of services; adverse publicity, harm to our brand;
reduced travel demand and potential tort liability as a result of
an accident, catastrophe or incident involving us, our 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 our network strategy or other factors
outside our control resulting in less economic aircraft orders,
costs related to modification or termination of aircraft orders or
entry into less favorable aircraft orders; our reliance on single
suppliers to source a majority of our aircraft and certain parts,
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 our operations; extended interruptions
or disruptions in service at major airports where we operate; the
impacts of seasonality and other factors associated with the
airline industry; our failure to realize the full value of our
intangible assets or our long-lived assets, causing us to record
impairments; any damage to our reputation or brand image; the
limitation of our ability to use our net operating loss
carryforwards and certain other tax attributes to offset future
taxable income for U.S. federal income tax purposes; the costs of
compliance with extensive government regulation of the airline
industry; costs, liabilities and risks associated with
environmental regulation and climate change; our inability to
accept or integrate new aircraft into our fleet as planned; the
impacts of our significant amount of financial leverage from fixed
obligations, the possibility we may seek material amounts of
additional financial liquidity in the short-term and the impacts of
insufficient liquidity on our financial condition and business;
failure to comply with the covenants in our financing agreements,
failure to comply with financial and other covenants governing our
other debt; changes in, or failure to retain, our 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 under "Risk Factors" in our
reports and other documents filed with the Securities and Exchange
Commission (“SEC”), as well as other risks and uncertainties set
forth from time to time in the reports we file with the SEC from
time to time, including the Quarterly Report on Form 10-Q being
filed at or around the date hereof.
Frontier Group Holdings,
Inc.Condensed Consolidated Statements of
Operations(unaudited, in millions, except for per
share data)
|
Three Months Ended March 31 |
|
|
|
2021 |
|
|
2020 |
|
|
Operating revenues: |
|
|
|
Passenger |
$ |
262 |
|
$ |
528 |
|
|
Other |
|
9 |
|
|
16 |
|
|
Total operating revenues |
|
271 |
|
|
544 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
Aircraft fuel |
|
84 |
|
|
204 |
|
|
Salaries, wages and benefits |
|
139 |
|
|
148 |
|
|
Aircraft rent |
|
138 |
|
|
103 |
|
|
Station operations |
|
70 |
|
|
96 |
|
|
Sales and marketing |
|
17 |
|
|
30 |
|
|
Maintenance materials and repairs |
|
26 |
|
|
26 |
|
|
Depreciation and amortization |
|
8 |
|
|
8 |
|
|
CARES Act credits |
|
(136 |
) |
|
- |
|
|
Other operating |
|
17 |
|
|
35 |
|
|
Total operating expenses |
|
363 |
|
|
650 |
|
|
Operating income
(loss) |
|
(92 |
) |
|
(106 |
) |
|
Other income (expense): |
|
|
|
Interest expense |
|
(22 |
) |
|
(2 |
) |
|
Capitalized interest |
|
1 |
|
|
2 |
|
|
Interest income and other |
|
- |
|
|
3 |
|
|
Total other income (expense) |
|
(21 |
) |
|
3 |
|
|
Income (loss) before income
taxes |
|
(113 |
) |
|
(103 |
) |
|
Income tax expense
(benefit) |
|
(22 |
) |
|
(39 |
) |
|
Net income
(loss) |
$ |
(91 |
) |
$ |
(64 |
) |
|
Earnings (loss) per
share: |
|
|
|
Basic |
$ |
(0.46 |
) |
$ |
(0.32 |
) |
|
Diluted |
$ |
(0.46 |
) |
$ |
(0.32 |
) |
|
Frontier Group Holdings,
Inc.Selected Operating
Statistics(unaudited)
|
|
|
|
|
|
|
|
Three Months EndedMarch 31 |
|
|
|
2021 |
|
2020 |
|
PercentChange |
Available seat miles (ASMs) (millions) |
|
4,592 |
|
7,140 |
|
(36)% |
|
Departures |
|
24,409 |
|
35,247 |
|
(31)% |
|
Average stage length (statute
miles) |
|
973 |
|
1,048 |
|
(7)% |
|
Block hours |
|
64,467 |
|
99,545 |
|
(35)% |
|
Average aircraft in
service |
|
98 |
|
97 |
|
1% |
|
Aircraft - end of period |
|
107 |
|
100 |
|
7% |
|
Average daily aircraft
utilization (hours) |
|
7.3 |
|
11.3 |
|
(35)% |
|
Passengers (thousands) |
|
3,252 |
|
4,982 |
|
(35)% |
|
Average seats per
departure |
|
193 |
|
192 |
|
1% |
|
Revenue passenger miles (RPMs)
(millions) |
|
3,211 |
|
5,315 |
|
(40)% |
|
Load factor (%) |
|
69.9% |
|
74.4% |
|
(4.5)pts |
|
Fare revenue per passenger
($) |
|
30.83 |
|
43.97 |
|
(30)% |
|
Non-fare passenger revenue per
passenger ($) |
|
49.75 |
|
62.07 |
|
(20)% |
|
Other revenue per passenger
($) |
|
2.80 |
|
3.14 |
|
(11)% |
|
Total revenue per passenger
($) |
|
83.38 |
|
109.18 |
|
(24)% |
|
Total revenue per ASM
(RASM) (¢) |
|
5.91 |
|
7.62 |
|
(22)% |
|
Cost per available seat mile
(CASM) (¢) |
|
7.89 |
|
9.10 |
|
(13)% |
|
CASM (excluding
fuel) (¢) |
|
6.07 |
|
6.24 |
|
(3)% |
|
CASM + net
interest (¢) |
|
8.36 |
|
9.05 |
|
(8)% |
|
Adjusted CASM (¢) |
|
10.78 |
|
8.23 |
|
31% |
|
Adjusted CASM (excluding
fuel) (¢) |
|
8.96 |
|
6.15 |
|
46% |
|
Adjusted CASM + net
interest (¢) |
|
10.82 |
|
8.18 |
|
32% |
|
Fuel cost per gallon ($) |
|
1.88 |
|
2.88 |
|
(35)% |
|
Fuel gallons consumed
(thousands) |
|
44,501 |
|
70,963 |
|
(37)% |
|
Employees (FTE) |
|
4,922 |
|
5,148 |
|
(4)% |
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Information
The Company is providing below a reconciliation of GAAP
financial information to the non-GAAP financial information
provided. The non-GAAP financial information is included to provide
supplemental disclosures because the Company believes they are
useful additional indicators of, among other things, its operating
and cost performance. Derivations of net income and CASM are
well-recognized performance measurements in the airline industry
that are frequently used by the Company’s management, as well as by
investors, securities analysts and other interested parties in
comparing the operating performance of companies in the airline
industry. These non-GAAP financial measures have limitations as
analytical tools. Because of these limitations, determinations of
the Company’s operating performance or CASM excluding unrealized
gains and losses, special items or other items should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP. These non-GAAP financial
measures may be presented on a different basis than other companies
using similarly titled non-GAAP financial measures.
Reconciliation of Net Income (Loss) to Adjusted Net
Income (Loss)($ in millions)
(unaudited)
|
Three Months Ended March 31 |
|
|
|
2021 |
|
|
2020 |
|
Net income (loss), as
reported |
$ |
(91) |
|
$ |
(64) |
|
|
|
|
Non-GAAP
Adjustments: |
|
|
Fuel
expense |
|
|
Derivative de-designation and mark to market adjustment (a) |
|
- |
|
|
56 |
|
Aircraft
Rent |
|
|
Early lease termination costs(b) |
|
4 |
|
|
- |
|
Other operating
expenses |
|
|
Cares Act - grant amortization and employee retention
credits(c) |
|
(136) |
|
|
- |
|
Write-off of deferred registration statement costs(d) |
|
- |
|
|
7 |
|
Interest
expense |
|
|
CARES Act - mark to market impact for warrants(e) |
|
20 |
|
|
- |
|
Pre-tax impact |
|
(112) |
|
|
63 |
|
|
|
|
Tax benefit (expense) related
to non-GAAP adjustments(f) |
|
30 |
|
|
(24) |
|
Net income (loss) impact |
|
(82) |
|
|
39 |
|
|
|
|
Adjusted net income
(loss), non-GAAP |
$ |
(173) |
|
$ |
(25) |
|
(a) Due to the significant reduction in demand
resulting from the COVID-19 pandemic, future anticipated
consumption of fuel dropped significantly and the Company therefore
de-designated hedge accounting in March 2020 on the derivative
positions where the future consumption was not deemed probable,
which primarily related to the written put options on costless
collars. The amounts represent the charge from de-designation and
resulting mark to market impact on the quantities where consumption
was not deemed probable.(b) As a result of an
early termination and buyout agreement executed in early May 2021
with one of the Company’s lessors, Frontier was able to accelerate
the removal of the remaining four A319 aircraft from its fleet.
These aircraft were originally scheduled to return in December 2021
and will instead return during the second (three aircraft) and
third (one aircraft) quarters of 2021. The Company incurred $4
million of costs during the first quarter of 2021 relating to the
acceration and resulting changes to its lease return obligations
for the A319 aircraft returning during the second quarter of
2021.(c) Represents the recognition of $125
million of the grant received from the U.S. government for payroll
support from January 2021 through March 2021 pursuant to PSP2,
along with $11 million of employee retention credits the Company
qualified for under the CARES
Act.(d) Represents the write-off of deferred
initial public offering preparation costs during the first quarter
2020 due to the impact of the COVID-19 pandemic and the resulting
uncertainty on the Company’s ability to access the capital markets.
(e) Represents the mark to market adjustment
to the value of the warrants issued as part of the funding provided
under the CARES Act. This amount is a component of interest
expense.(f) Represents the tax impact of the
non-GAAP adjustments.
Reconciliation of Total Operating Expenses to Adjusted
Total Operating Expenses($ in millions)
(unaudited)
|
|
|
|
Three Months Ended March 31 |
|
|
2021 |
|
|
2020 |
|
Total operating
expenses, as reported |
$ |
363 |
|
$ |
650 |
|
Early lease termination
costs |
|
(4) |
|
|
- |
|
Cares Act - grant amortization
and employee retention credits |
|
136 |
|
|
- |
|
Write-off of deferred
registration statement costs |
|
- |
|
|
(7) |
|
Derivative de-designation and
mark to market adjustment |
|
- |
|
|
(56) |
|
Adjusted total
operating expenses, non-GAAP |
$ |
495 |
|
$ |
587 |
|
Reconciliation of CASM to Adjusted CASM (excluding fuel)
and Adjusted CASM including net interest
(unaudited)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
|
|
($ in millions) |
Per ASM (¢) |
($ in millions) |
Per ASM (¢) |
CASM |
|
7.89 |
|
|
9.10 |
|
Aircraft fuel |
(84) |
|
(1.82) |
|
(204) |
|
(2.86) |
|
CASM (excluding
fuel) |
|
6.07 |
|
|
6.24 |
|
Early lease termination
costs |
(4) |
|
(0.08) |
|
- |
|
- |
|
Cares Act - grant amortization
and employee retention credits |
136 |
|
2.97 |
|
- |
|
- |
|
Write-off of deferred
registration statement costs |
- |
|
- |
|
(7) |
|
(0.09) |
|
Adjusted CASM
(excluding fuel) |
|
8.96 |
|
|
6.15 |
|
Aircraft fuel |
84 |
|
1.82 |
|
204 |
|
2.86 |
|
Derivative de-designation and
mark to market adjustment |
- |
|
- |
|
(56) |
|
(0.78) |
|
Adjusted
CASM |
|
10.78 |
|
|
8.23 |
|
Net interest expense
(income) |
21 |
|
0.47 |
|
(3) |
|
(0.05) |
|
CARES Act – mark to market
impact for warrants |
(20) |
|
(0.43) |
|
- |
|
- |
|
Adjusted CASM + net
interest |
|
10.82 |
|
|
8.18 |
|
|
|
|
|
|
CASM |
|
7.89 |
|
|
9.10 |
|
Net interest expense
(income) |
21 |
|
0.47 |
|
(3) |
|
(0.05) |
|
CASM + net
interest |
|
8.36 |
|
|
9.05 |
|
The calculation of Adjusted CASM including net interest provided
in the table above reflects the sum of Adjusted CASM and net
interest expense (income) excluding special items per ASM. Adjusted
CASM including net interest is included as a supplemental
disclosure because the Company believes it is a useful metric 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
this metric is a useful comparator because it removes certain items
that may not be indicative of base operating performance or future
results. Adjusted CASM including net interest 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.
Contacts:
Jennifer F. de la Cruz Corporate Communications
Email: JenniferF.Delacruz@flyfrontier.com Phone: 720.374.4207
Susan M. Donofrio Investor Relations
Email: investorrelations@flyfrontier.com Phone: 917.518.1378
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