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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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38-1747023
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2800 Executive Way
Miramar, Florida
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33025
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Emerging growth company
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o
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Class
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Number of Shares
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Common Stock, $0.0001 par value
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68,264,513
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Page No.
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||||
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ITEM 1.
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UNAUDITED CONDENSED FINANCIAL STATEMENTS
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
Operating revenues:
|
|
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||||||||
Passenger
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$
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887,956
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$
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669,072
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$
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2,413,447
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$
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1,922,239
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Other
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16,374
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18,155
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46,792
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55,130
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Total operating revenues
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904,330
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687,227
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2,460,239
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1,977,369
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||||||||
Operating expenses:
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||||||||
Aircraft fuel
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258,818
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158,300
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709,644
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440,376
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||||
Salaries, wages and benefits
|
185,043
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134,114
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527,895
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391,144
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||||
Aircraft rent
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42,682
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53,396
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134,618
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163,032
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||||
Landing fees and other rents
|
54,542
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48,498
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162,774
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|
134,538
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||||
Depreciation and amortization
|
43,773
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36,840
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128,764
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|
103,680
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Maintenance, materials and repairs
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37,778
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26,176
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99,141
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81,473
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||||
Distribution
|
37,868
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29,695
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103,496
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|
85,302
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||||
Special charges (credits)
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(686
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)
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7,853
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88,656
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|
12,629
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Loss on disposal of assets
|
1,069
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|
516
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6,561
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3,114
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Other operating
|
98,318
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87,965
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283,841
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268,553
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Total operating expenses
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759,205
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583,353
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2,245,390
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1,683,841
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||||||||
Operating income
|
145,125
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103,874
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|
214,849
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293,528
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||||||||
Other (income) expense:
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||||||||
Interest expense
|
21,925
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|
15,018
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|
60,272
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|
41,237
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Capitalized interest
|
(2,657
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)
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(3,203
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)
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(7,205
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)
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(10,125
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)
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||||
Interest income
|
(4,776
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)
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(2,605
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)
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(13,272
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)
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(5,746
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)
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||||
Other expense
|
302
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|
|
114
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|
623
|
|
|
221
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|
||||
Special charges, non-operating
|
1,744
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—
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90,357
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—
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||||
Total other (income) expense
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16,538
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9,324
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130,775
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25,587
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Income before income taxes
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128,587
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94,550
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84,074
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267,941
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||||
Provision for income taxes
|
31,107
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34,506
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20,262
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99,395
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Net income
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$
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97,480
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$
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60,044
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$
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63,812
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$
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168,546
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Basic earnings per share
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$
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1.43
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$
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0.87
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$
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0.94
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$
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2.43
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Diluted earnings per share
|
$
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1.42
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$
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0.86
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$
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0.93
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$
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2.42
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2018
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2017
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2018
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2017
|
||||||||
Net income
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$
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97,480
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$
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60,044
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$
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63,812
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$
|
168,546
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Unrealized gain (loss) on short-term investment securities, net of deferred taxes of $(5), $7, $21 and ($6)
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(7
|
)
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13
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70
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|
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(11
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)
|
||||
Interest rate derivative loss reclassified into earnings, net of taxes of $27, $31, $66 and $92
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52
|
|
|
53
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|
|
172
|
|
|
160
|
|
||||
Other comprehensive income
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$
|
45
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$
|
66
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$
|
242
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|
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$
|
149
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|
Comprehensive income
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$
|
97,525
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$
|
60,110
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|
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$
|
64,054
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$
|
168,695
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September 30, 2018
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|
December 31, 2017
|
||||
Assets
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|
||||
Current assets:
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|
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Cash and cash equivalents
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$
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773,710
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$
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800,849
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Short-term investment securities
|
102,201
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|
100,937
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|
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Accounts receivable, net
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63,526
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|
49,323
|
|
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Aircraft maintenance deposits, net
|
104,472
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|
|
175,615
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|
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Income tax receivable
|
78,506
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|
|
69,844
|
|
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Prepaid expenses and other current assets
|
83,692
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|
|
85,542
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|
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Total current assets
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1,206,107
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|
1,282,110
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|
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Property and equipment:
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|
|
|
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Flight equipment
|
3,023,898
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|
2,291,110
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Ground property and equipment
|
178,339
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|
|
155,166
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|
||
Less accumulated depreciation
|
(296,157
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)
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|
(207,808
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)
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||
|
2,906,080
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|
|
2,238,468
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|
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Deposits on flight equipment purchase contracts
|
253,825
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|
|
253,687
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|
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Long-term aircraft maintenance deposits
|
144,642
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|
|
150,617
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|
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Deferred heavy maintenance, net
|
191,632
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|
|
99,915
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|
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Other long-term assets
|
79,445
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|
|
121,003
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|
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Total assets
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$
|
4,781,731
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|
|
$
|
4,145,800
|
|
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|
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|
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Liabilities and shareholders’ equity
|
|
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|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
63,190
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|
|
$
|
22,822
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|
Air traffic liability
|
323,627
|
|
|
263,711
|
|
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Current maturities of long-term debt and capital leases
|
150,862
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|
|
115,430
|
|
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Other current liabilities
|
287,142
|
|
|
262,370
|
|
||
Total current liabilities
|
824,821
|
|
|
664,333
|
|
||
|
|
|
|
||||
Long-term debt and capital leases, less current maturities
|
1,770,904
|
|
|
1,387,498
|
|
||
Deferred income taxes
|
332,119
|
|
|
308,814
|
|
||
Deferred gains and other long-term liabilities
|
20,105
|
|
|
22,581
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common stock
|
7
|
|
|
7
|
|
||
Additional paid-in-capital
|
368,451
|
|
|
360,153
|
|
||
Treasury stock, at cost
|
(66,999
|
)
|
|
(65,854
|
)
|
||
Retained earnings
|
1,533,545
|
|
|
1,469,732
|
|
||
Accumulated other comprehensive income (loss)
|
(1,222
|
)
|
|
(1,464
|
)
|
||
Total shareholders’ equity
|
1,833,782
|
|
|
1,762,574
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,781,731
|
|
|
$
|
4,145,800
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
63,812
|
|
|
$
|
168,546
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
||||
Losses reclassified from other comprehensive income
|
238
|
|
|
252
|
|
||
Stock-based compensation
|
8,293
|
|
|
6,723
|
|
||
Allowance for doubtful accounts (recoveries)
|
(12
|
)
|
|
(53
|
)
|
||
Amortization of deferred gains and losses and debt issuance costs
|
6,508
|
|
|
6,415
|
|
||
Depreciation and amortization
|
128,764
|
|
|
103,680
|
|
||
Deferred income tax expense
|
21,243
|
|
|
97,833
|
|
||
Loss on disposal of assets
|
6,561
|
|
|
3,114
|
|
||
Lease termination costs
|
—
|
|
|
12,629
|
|
||
Special charges, non-operating
|
90,357
|
|
|
—
|
|
||
|
|
|
|
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable
|
(14,191
|
)
|
|
(5,046
|
)
|
||
Aircraft maintenance deposits, net
|
10,543
|
|
|
(28,422
|
)
|
||
Prepaid income taxes
|
—
|
|
|
(160
|
)
|
||
Long-term deposits and other assets
|
(5,760
|
)
|
|
(69,307
|
)
|
||
Deferred heavy maintenance
|
(121,643
|
)
|
|
(12,032
|
)
|
||
Income tax receivable
|
(8,662
|
)
|
|
—
|
|
||
Accounts payable
|
38,771
|
|
|
13,829
|
|
||
Air traffic liability
|
59,916
|
|
|
73,639
|
|
||
Other liabilities
|
23,896
|
|
|
15,345
|
|
||
Other
|
(136
|
)
|
|
339
|
|
||
Net cash provided by operating activities
|
308,498
|
|
|
387,324
|
|
||
Investing activities:
|
|
|
|
||||
Purchase of available-for-sale investment securities
|
(100,228
|
)
|
|
(96,851
|
)
|
||
Proceeds from the maturity of available-for-sale investment securities
|
99,134
|
|
|
95,881
|
|
||
Proceeds from sale of property and equipment
|
9,500
|
|
|
—
|
|
||
Pre-delivery deposits for flight equipment, net of refunds
|
(132,297
|
)
|
|
(121,702
|
)
|
||
Capitalized interest
|
(6,116
|
)
|
|
(8,054
|
)
|
||
Purchase of property and equipment
|
(420,586
|
)
|
|
(428,913
|
)
|
||
Net cash used in investing activities
|
(550,593
|
)
|
|
(559,639
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
518,171
|
|
|
405,827
|
|
||
Proceeds from stock options exercised
|
5
|
|
|
45
|
|
||
Payments on debt obligations
|
(93,225
|
)
|
|
(63,352
|
)
|
||
Payments on capital lease obligations
|
(205,566
|
)
|
|
(291
|
)
|
||
Repurchase of common stock
|
(1,145
|
)
|
|
(1,238
|
)
|
||
Debt issuance costs
|
(3,284
|
)
|
|
(5,896
|
)
|
||
Net cash provided by financing activities
|
214,956
|
|
|
335,095
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(27,139
|
)
|
|
162,780
|
|
||
Cash and cash equivalents at beginning of period
|
800,849
|
|
|
700,900
|
|
||
Cash and cash equivalents at end of period
|
$
|
773,710
|
|
|
$
|
863,680
|
|
Supplemental disclosures
|
|
|
|
||||
Cash payments for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
35,977
|
|
|
$
|
22,541
|
|
Income taxes paid, net of refunds
|
$
|
3,366
|
|
|
$
|
4,352
|
|
Non-cash transactions:
|
|
|
|
||||
Capital expenditures funded by capital lease borrowings
|
$
|
(315
|
)
|
|
$
|
(1,370
|
)
|
1.
|
Basis of Presentation
|
2.
|
Recent Accounting Developments
|
3.
|
Revenue Recognition
|
|
Year Ended December 31, 2017
|
||||||||||
|
(in thousands, except share and per share data)
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
||||||
Operating revenues:
|
|
|
|
|
|
||||||
Passenger
|
$
|
1,366,034
|
|
|
$
|
1,206,853
|
|
|
$
|
2,572,887
|
|
Other
|
1,281,632
|
|
|
(1,210,967
|
)
|
|
70,665
|
|
|||
Total operating revenues
|
2,647,666
|
|
|
(4,114
|
)
|
|
2,643,552
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Aircraft fuel
|
615,581
|
|
|
—
|
|
|
615,581
|
|
|||
Salaries, wages and benefits
|
527,959
|
|
|
—
|
|
|
527,959
|
|
|||
Aircraft rent
|
205,852
|
|
|
—
|
|
|
205,852
|
|
|||
Landing fees and other rents
|
180,655
|
|
|
—
|
|
|
180,655
|
|
|||
Depreciation and amortization
|
140,152
|
|
|
—
|
|
|
140,152
|
|
|||
Maintenance, materials and repairs
|
110,439
|
|
|
—
|
|
|
110,439
|
|
|||
Distribution
|
113,620
|
|
|
(148
|
)
|
|
113,472
|
|
|||
Special charges
|
12,629
|
|
|
—
|
|
|
12,629
|
|
|||
Loss on disposal of assets
|
4,168
|
|
|
—
|
|
|
4,168
|
|
|||
Other operating
|
347,820
|
|
|
—
|
|
|
347,820
|
|
|||
Total operating expenses
|
2,258,875
|
|
|
(148
|
)
|
|
2,258,727
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
388,791
|
|
|
(3,966
|
)
|
|
384,825
|
|
|||
|
|
|
|
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
||||||
Interest expense
|
57,302
|
|
|
—
|
|
|
57,302
|
|
|||
Capitalized interest
|
(13,793
|
)
|
|
—
|
|
|
(13,793
|
)
|
|||
Interest income
|
(8,736
|
)
|
|
—
|
|
|
(8,736
|
)
|
|||
Other expense
|
366
|
|
|
—
|
|
|
366
|
|
|||
Total other (income) expense
|
35,139
|
|
|
—
|
|
|
35,139
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
353,652
|
|
|
(3,966
|
)
|
|
349,686
|
|
|||
Provision (benefit) for income taxes
|
(66,954
|
)
|
|
1,118
|
|
|
(65,836
|
)
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
420,606
|
|
|
$
|
(5,084
|
)
|
|
$
|
415,522
|
|
Basic earnings per share
|
$
|
6.08
|
|
|
$
|
(0.07
|
)
|
|
$
|
6.00
|
|
Diluted earnings per share
|
$
|
6.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
5.99
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
(in thousands, except share and per share data)
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
||||||
Operating revenues:
|
|
|
|
|
|
||||||
Passenger
|
$
|
1,200,621
|
|
|
$
|
1,057,180
|
|
|
$
|
2,257,801
|
|
Other
|
1,121,335
|
|
|
(1,059,115
|
)
|
|
62,220
|
|
|||
Total operating revenues
|
2,321,956
|
|
|
(1,935
|
)
|
|
2,320,021
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Salaries, wages and benefits
|
472,471
|
|
|
—
|
|
|
472,471
|
|
|||
Aircraft fuel
|
447,553
|
|
|
—
|
|
|
447,553
|
|
|||
Aircraft rent
|
201,675
|
|
|
—
|
|
|
201,675
|
|
|||
Landing fees and other rents
|
151,679
|
|
|
—
|
|
|
151,679
|
|
|||
Depreciation and amortization
|
101,136
|
|
|
—
|
|
|
101,136
|
|
|||
Maintenance, materials and repairs
|
98,587
|
|
|
—
|
|
|
98,587
|
|
|||
Distribution
|
96,627
|
|
|
268
|
|
|
96,895
|
|
|||
Special charges
|
37,189
|
|
|
—
|
|
|
37,189
|
|
|||
Loss on disposal of assets
|
4,187
|
|
|
—
|
|
|
4,187
|
|
|||
Other operating
|
267,191
|
|
|
—
|
|
|
267,191
|
|
|||
Total operating expenses
|
1,878,295
|
|
|
268
|
|
|
1,878,563
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
443,661
|
|
|
(2,203
|
)
|
|
441,458
|
|
|||
|
|
|
|
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
||||||
Interest expense
|
41,654
|
|
|
—
|
|
|
41,654
|
|
|||
Capitalized interest
|
(12,705
|
)
|
|
—
|
|
|
(12,705
|
)
|
|||
Interest income
|
(5,276
|
)
|
|
—
|
|
|
(5,276
|
)
|
|||
Other expense
|
528
|
|
|
—
|
|
|
528
|
|
|||
Total other (income) expense
|
24,201
|
|
|
—
|
|
|
24,201
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
419,460
|
|
|
(2,203
|
)
|
|
417,257
|
|
|||
Provision (benefit) for income taxes
|
154,581
|
|
|
(807
|
)
|
|
153,774
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
264,879
|
|
|
$
|
(1,396
|
)
|
|
$
|
263,483
|
|
Basic earnings per share
|
$
|
3.77
|
|
|
$
|
(0.02
|
)
|
|
$
|
3.75
|
|
Diluted earnings per share
|
$
|
3.76
|
|
|
$
|
(0.02
|
)
|
|
$
|
3.74
|
|
|
For the Quarter Ended
|
||||||||||||||
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
||||||||
Passenger
|
$
|
572,287
|
|
|
$
|
680,880
|
|
|
$
|
669,072
|
|
|
$
|
650,647
|
|
Other
|
17,670
|
|
|
19,305
|
|
|
18,155
|
|
|
15,535
|
|
||||
Total operating revenues
|
589,957
|
|
|
700,185
|
|
|
687,227
|
|
|
666,182
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel
|
139,782
|
|
|
142,294
|
|
|
158,300
|
|
|
175,205
|
|
||||
Salaries, wages and benefits
|
127,138
|
|
|
129,892
|
|
|
134,114
|
|
|
136,815
|
|
||||
Aircraft rent
|
57,070
|
|
|
52,566
|
|
|
53,396
|
|
|
42,820
|
|
||||
Landing fees and other rents
|
40,448
|
|
|
45,592
|
|
|
48,498
|
|
|
46,117
|
|
||||
Depreciation and amortization
|
31,509
|
|
|
35,331
|
|
|
36,840
|
|
|
36,472
|
|
||||
Maintenance, materials and repairs
|
26,312
|
|
|
28,985
|
|
|
26,176
|
|
|
28,966
|
|
||||
Distribution
|
25,772
|
|
|
29,835
|
|
|
29,695
|
|
|
28,170
|
|
||||
Special charges
|
4,776
|
|
|
—
|
|
|
7,853
|
|
|
—
|
|
||||
Loss on disposal of assets
|
1,105
|
|
|
1,493
|
|
|
516
|
|
|
1,054
|
|
||||
Other operating
|
77,703
|
|
|
102,885
|
|
|
87,965
|
|
|
79,267
|
|
||||
Total operating expenses
|
531,615
|
|
|
568,873
|
|
|
583,353
|
|
|
574,886
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
58,342
|
|
|
131,312
|
|
|
103,874
|
|
|
91,296
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other (income) expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
12,473
|
|
|
13,746
|
|
|
15,018
|
|
|
16,065
|
|
||||
Capitalized interest
|
(3,580
|
)
|
|
(3,342
|
)
|
|
(3,203
|
)
|
|
(3,668
|
)
|
||||
Interest income
|
(1,313
|
)
|
|
(1,828
|
)
|
|
(2,605
|
)
|
|
(2,990
|
)
|
||||
Other expense
|
3
|
|
|
104
|
|
|
114
|
|
|
145
|
|
||||
Total other (income) expense
|
7,583
|
|
|
8,680
|
|
|
9,324
|
|
|
9,552
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes
|
50,759
|
|
|
122,632
|
|
|
94,550
|
|
|
81,744
|
|
||||
Provision (benefit) for income taxes
|
19,498
|
|
|
45,391
|
|
|
34,506
|
|
|
(165,231
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
31,261
|
|
|
$
|
77,241
|
|
|
$
|
60,044
|
|
|
$
|
246,975
|
|
Basic earnings per share
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
0.87
|
|
|
$
|
3.59
|
|
Diluted earnings per share
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
0.86
|
|
|
$
|
3.58
|
|
|
|
|
Adjustments for the Quarter Ended
|
|
|
||||||||||||||||||
|
Full Year 2017 As Reported
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
|
Full Year 2017 Adjusted
|
||||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
$
|
1,366,034
|
|
|
$
|
272,525
|
|
|
$
|
308,959
|
|
|
$
|
312,865
|
|
|
$
|
312,504
|
|
|
$
|
2,572,887
|
|
Other
|
1,281,632
|
|
|
(274,314
|
)
|
|
(310,455
|
)
|
|
(312,869
|
)
|
|
(313,329
|
)
|
|
70,665
|
|
||||||
Total operating revenues
|
2,647,666
|
|
|
(1,789
|
)
|
|
(1,496
|
)
|
|
(4
|
)
|
|
(825
|
)
|
|
2,643,552
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aircraft fuel
|
615,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615,581
|
|
||||||
Salaries, wages and benefits
|
527,959
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
527,959
|
|
||||||
Aircraft rent
|
205,852
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205,852
|
|
||||||
Landing fees and other rents
|
180,655
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,655
|
|
||||||
Depreciation and amortization
|
140,152
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140,152
|
|
||||||
Maintenance, materials and repairs
|
110,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,439
|
|
||||||
Distribution
|
113,620
|
|
|
(726
|
)
|
|
(73
|
)
|
|
226
|
|
|
425
|
|
|
113,472
|
|
||||||
Special charges
|
12,629
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,629
|
|
||||||
Loss on disposal of assets
|
4,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,168
|
|
||||||
Other operating
|
347,820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
347,820
|
|
||||||
Total operating expenses
|
2,258,875
|
|
|
(726
|
)
|
|
(73
|
)
|
|
226
|
|
|
425
|
|
|
2,258,727
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
388,791
|
|
|
(1,063
|
)
|
|
(1,423
|
)
|
|
(230
|
)
|
|
(1,250
|
)
|
|
384,825
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
57,302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,302
|
|
||||||
Capitalized interest
|
(13,793
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,793
|
)
|
||||||
Interest income
|
(8,736
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,736
|
)
|
||||||
Other expense
|
366
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366
|
|
||||||
Total other (income) expense
|
35,139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,139
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
353,652
|
|
|
(1,063
|
)
|
|
(1,423
|
)
|
|
(230
|
)
|
|
(1,250
|
)
|
|
349,686
|
|
||||||
Provision (benefit) for income taxes
|
(66,954
|
)
|
|
(389
|
)
|
|
(522
|
)
|
|
(84
|
)
|
|
2,113
|
|
|
(65,836
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
420,606
|
|
|
$
|
(674
|
)
|
|
$
|
(901
|
)
|
|
$
|
(146
|
)
|
|
$
|
(3,363
|
)
|
|
$
|
415,522
|
|
Basic earnings per share
|
$
|
6.08
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
(0.05
|
)
|
|
$
|
6.00
|
|
Diluted earnings per share
|
$
|
6.06
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
(0.05
|
)
|
|
$
|
5.99
|
|
|
December 31, 2017
|
||||||||||
|
(in thousands)
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
800,849
|
|
|
$
|
—
|
|
|
$
|
800,849
|
|
Short-term investment securities
|
100,937
|
|
|
—
|
|
|
100,937
|
|
|||
Accounts receivable, net
|
49,323
|
|
|
—
|
|
|
49,323
|
|
|||
Aircraft maintenance deposits, net
|
175,615
|
|
|
—
|
|
|
175,615
|
|
|||
Income tax receivable
|
69,844
|
|
|
—
|
|
|
69,844
|
|
|||
Prepaid expenses and other current assets
|
83,692
|
|
|
1,850
|
|
|
85,542
|
|
|||
Total current assets
|
1,280,260
|
|
|
1,850
|
|
|
1,282,110
|
|
|||
|
|
|
|
|
|
||||||
Property and equipment:
|
|
|
|
|
|
||||||
Flight equipment
|
2,291,110
|
|
|
—
|
|
|
2,291,110
|
|
|||
Ground property and equipment
|
155,166
|
|
|
—
|
|
|
155,166
|
|
|||
Less accumulated depreciation
|
(207,808
|
)
|
|
—
|
|
|
(207,808
|
)
|
|||
|
2,238,468
|
|
|
—
|
|
|
2,238,468
|
|
|||
Deposits on flight equipment purchase contracts
|
253,687
|
|
|
—
|
|
|
253,687
|
|
|||
Long-term aircraft maintenance deposits
|
150,617
|
|
|
—
|
|
|
150,617
|
|
|||
Deferred heavy maintenance, net
|
99,915
|
|
|
—
|
|
|
99,915
|
|
|||
Other long-term assets
|
121,003
|
|
|
—
|
|
|
121,003
|
|
|||
Total assets
|
$
|
4,143,950
|
|
|
$
|
1,850
|
|
|
$
|
4,145,800
|
|
|
|
|
|
|
|
||||||
Liabilities and shareholders’ equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
22,822
|
|
|
$
|
—
|
|
|
$
|
22,822
|
|
Air traffic liability
|
246,404
|
|
|
17,307
|
|
|
263,711
|
|
|||
Current maturities of long-term debt
|
115,430
|
|
|
—
|
|
|
115,430
|
|
|||
Other current liabilities
|
262,370
|
|
|
—
|
|
|
262,370
|
|
|||
Total current liabilities
|
647,026
|
|
|
17,307
|
|
|
664,333
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, less current maturities
|
1,387,498
|
|
|
—
|
|
|
1,387,498
|
|
|||
Deferred income taxes
|
313,140
|
|
|
(4,326
|
)
|
|
308,814
|
|
|||
Deferred gains and other long-term liabilities
|
19,205
|
|
|
3,376
|
|
|
22,581
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock: Common stock, $0.0001 par value, 240,000,000 shares authorized at December 31, 2017; 69,770,795 issued and 68,196,964 outstanding as of December 31, 2017
|
7
|
|
|
—
|
|
|
7
|
|
|||
Additional paid-in-capital
|
360,153
|
|
|
—
|
|
|
360,153
|
|
|||
Treasury stock, at cost: 1,573,831 shares as of December 31, 2017
|
(65,854
|
)
|
|
—
|
|
|
(65,854
|
)
|
|||
Retained earnings
|
1,484,239
|
|
|
(14,507
|
)
|
|
1,469,732
|
|
|||
Accumulated other comprehensive income (loss)
|
(1,464
|
)
|
|
—
|
|
|
(1,464
|
)
|
|||
Total shareholders’ equity
|
1,777,081
|
|
|
(14,507
|
)
|
|
1,762,574
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
4,143,950
|
|
|
$
|
1,850
|
|
|
$
|
4,145,800
|
|
|
December 31, 2016
|
||||||||||
|
(in thousands)
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
700,900
|
|
|
$
|
—
|
|
|
$
|
700,900
|
|
Short-term investment securities
|
100,155
|
|
|
—
|
|
|
100,155
|
|
|||
Accounts receivable, net
|
41,136
|
|
|
—
|
|
|
41,136
|
|
|||
Aircraft maintenance deposits, net
|
87,035
|
|
|
—
|
|
|
87,035
|
|
|||
Income tax receivable
|
—
|
|
|
—
|
|
|
—
|
|
|||
Prepaid expenses and other current assets
|
46,619
|
|
|
1,702
|
|
|
48,321
|
|
|||
Total current assets
|
975,845
|
|
|
1,702
|
|
|
977,547
|
|
|||
|
|
|
|
|
|
||||||
Property and equipment:
|
|
|
|
|
|
||||||
Flight equipment
|
1,461,525
|
|
|
—
|
|
|
1,461,525
|
|
|||
Ground property and equipment
|
126,206
|
|
|
—
|
|
|
126,206
|
|
|||
Less accumulated depreciation
|
(122,509
|
)
|
|
—
|
|
|
(122,509
|
)
|
|||
|
1,465,222
|
|
|
—
|
|
|
1,465,222
|
|
|||
Deposits on flight equipment purchase contracts
|
325,688
|
|
|
—
|
|
|
325,688
|
|
|||
Long-term aircraft maintenance deposits
|
199,415
|
|
|
—
|
|
|
199,415
|
|
|||
Deferred heavy maintenance, net
|
75,534
|
|
|
—
|
|
|
75,534
|
|
|||
Other long-term assets
|
110,223
|
|
|
—
|
|
|
110,223
|
|
|||
Total assets
|
$
|
3,151,927
|
|
|
$
|
1,702
|
|
|
$
|
3,153,629
|
|
|
|
|
|
|
|
||||||
Liabilities and shareholders’ equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
15,193
|
|
|
$
|
—
|
|
|
$
|
15,193
|
|
Air traffic liability
|
206,392
|
|
|
13,792
|
|
|
220,184
|
|
|||
Current maturities of long-term debt
|
84,354
|
|
|
—
|
|
|
84,354
|
|
|||
Other current liabilities
|
226,011
|
|
|
—
|
|
|
226,011
|
|
|||
Total current liabilities
|
531,950
|
|
|
13,792
|
|
|
545,742
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, less current maturities
|
897,359
|
|
|
—
|
|
|
897,359
|
|
|||
Deferred income taxes
|
308,143
|
|
|
(5,443
|
)
|
|
302,700
|
|
|||
Deferred gains and other long-term liabilities
|
19,868
|
|
|
2,776
|
|
|
22,644
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock: Common stock, $0.0001 par value, 240,000,000 shares authorized at December 31, 2016; 73,549,872 issued and 69,326,202 outstanding as of December 31, 2016
|
7
|
|
|
—
|
|
|
7
|
|
|||
Additional paid-in-capital
|
551,004
|
|
|
—
|
|
|
551,004
|
|
|||
Treasury stock, at cost: 4,223,670 shares as of December 31, 2016
|
(218,692
|
)
|
|
—
|
|
|
(218,692
|
)
|
|||
Retained earnings
|
1,063,633
|
|
|
(9,423
|
)
|
|
1,054,210
|
|
|||
Accumulated other comprehensive income (loss)
|
(1,345
|
)
|
|
—
|
|
|
(1,345
|
)
|
|||
Total shareholders’ equity
|
1,394,607
|
|
|
(9,423
|
)
|
|
1,385,184
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
3,151,927
|
|
|
$
|
1,702
|
|
|
$
|
3,153,629
|
|
4.
|
Revenue Disaggregation
|
|
For the Quarter Ended
|
||||||||||||||||||||||||||
|
September 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|
March 31, 2017
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fare
|
$
|
476,660
|
|
|
$
|
439,549
|
|
|
$
|
342,695
|
|
|
$
|
337,324
|
|
|
$
|
355,593
|
|
|
$
|
371,443
|
|
|
$
|
299,035
|
|
Non-fare
|
411,296
|
|
|
396,801
|
|
|
346,446
|
|
|
313,323
|
|
|
313,479
|
|
|
309,437
|
|
|
273,252
|
|
|||||||
Total passenger revenues
|
887,956
|
|
|
836,350
|
|
|
689,141
|
|
|
650,647
|
|
|
669,072
|
|
|
680,880
|
|
|
572,287
|
|
|||||||
Other revenues
|
16,374
|
|
|
15,421
|
|
|
14,997
|
|
|
15,535
|
|
|
18,155
|
|
|
19,305
|
|
|
17,670
|
|
|||||||
Total operating revenues
|
$
|
904,330
|
|
|
$
|
851,771
|
|
|
$
|
704,138
|
|
|
$
|
666,182
|
|
|
$
|
687,227
|
|
|
$
|
700,185
|
|
|
$
|
589,957
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
|
As Reported
|
|
Topic 606 Adjustment
|
|
As Adjusted
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fare
|
$
|
1,366,034
|
|
|
$
|
(2,639
|
)
|
|
$
|
1,363,395
|
|
|
$
|
1,200,621
|
|
|
$
|
(2,514
|
)
|
|
$
|
1,198,107
|
|
Non-fare
|
—
|
|
|
1,209,492
|
|
|
1,209,492
|
|
|
—
|
|
|
1,059,694
|
|
|
1,059,694
|
|
||||||
Total passenger revenues
|
1,366,034
|
|
|
1,206,853
|
|
|
2,572,887
|
|
|
1,200,621
|
|
|
1,057,180
|
|
|
2,257,801
|
|
||||||
Other revenues
|
1,281,632
|
|
|
(1,210,967
|
)
|
|
70,665
|
|
|
1,121,335
|
|
|
(1,059,115
|
)
|
|
62,220
|
|
||||||
Total operating revenues
|
$
|
2,647,666
|
|
|
$
|
(4,114
|
)
|
|
$
|
2,643,552
|
|
|
$
|
2,321,956
|
|
|
$
|
(1,935
|
)
|
|
$
|
2,320,021
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
DOT—Domestic
|
$
|
819.3
|
|
|
$
|
636.3
|
|
|
$
|
2,236.3
|
|
|
$
|
1,819.2
|
|
DOT—Latin America
|
85.0
|
|
|
50.9
|
|
|
223.9
|
|
|
158.2
|
|
||||
Total
|
$
|
904.3
|
|
|
$
|
687.2
|
|
|
$
|
2,460.2
|
|
|
$
|
1,977.4
|
|
5.
|
Special Charges
|
6.
|
Earnings per Share
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
97,480
|
|
|
$
|
60,044
|
|
|
$
|
63,812
|
|
|
$
|
168,546
|
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding, basic
|
68,254
|
|
|
69,370
|
|
|
68,243
|
|
|
69,363
|
|
||||
Effect of dilutive stock awards
|
249
|
|
|
88
|
|
|
103
|
|
|
174
|
|
||||
Adjusted weighted-average shares outstanding, diluted
|
68,503
|
|
|
69,458
|
|
|
68,346
|
|
|
69,537
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.43
|
|
|
$
|
0.87
|
|
|
$
|
0.94
|
|
|
$
|
2.43
|
|
Diluted earnings per common share
|
$
|
1.42
|
|
|
$
|
0.86
|
|
|
$
|
0.93
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive weighted-average shares
|
5
|
|
|
124
|
|
|
192
|
|
|
76
|
|
7.
|
Short-term Investment Securities
|
8.
|
Accrued Liabilities
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Salaries and wages
|
$
|
81,278
|
|
|
$
|
54,338
|
|
Federal excise and other passenger taxes and fees payable
|
55,743
|
|
|
42,036
|
|
||
Airport obligations
|
47,476
|
|
|
56,299
|
|
||
Aircraft maintenance
|
26,438
|
|
|
33,033
|
|
||
Fuel
|
21,637
|
|
|
25,171
|
|
||
Interest payable
|
18,965
|
|
|
11,384
|
|
||
Aircraft and facility lease obligations
|
12,236
|
|
|
16,992
|
|
||
Other
|
23,369
|
|
|
23,117
|
|
||
Other current liabilities
|
$
|
287,142
|
|
|
$
|
262,370
|
|
9.
|
Financial Instruments and Risk Management
|
10.
|
Commitments and Contingencies
|
|
|
Airbus
|
|
Third-Party Lessor
|
|
|
||
|
|
A320ceo
|
|
A320neo
|
|
A320neo
|
|
Total
|
remainder of 2018
|
|
5
|
|
|
|
3
|
|
8
|
2019
|
|
2
|
|
9
|
|
4
|
|
15
|
2020
|
|
|
|
16
|
|
|
|
16
|
2021
|
|
|
|
18
|
|
|
|
18
|
|
|
7
|
|
43
|
|
7
|
|
57
|
|
|
Capital Leases
|
|
Aircraft and Spare Engine Operating Leases
|
|
Property Facility Operating Leases
|
|
Total
Operating and Capital Lease Obligations
|
||||||||
|
(in thousands)
|
|||||||||||||||
remainder of 2018
|
|
$
|
165
|
|
|
$
|
42,762
|
|
|
$
|
15,122
|
|
|
$
|
58,049
|
|
2019
|
|
625
|
|
|
167,360
|
|
|
45,018
|
|
|
213,003
|
|
||||
2020
|
|
249
|
|
|
161,876
|
|
|
29,636
|
|
|
191,761
|
|
||||
2021
|
|
28
|
|
|
160,185
|
|
|
16,645
|
|
|
176,858
|
|
||||
2022
|
|
—
|
|
|
146,904
|
|
|
14,403
|
|
|
161,307
|
|
||||
2023 and thereafter
|
|
—
|
|
|
419,925
|
|
|
101,897
|
|
|
521,822
|
|
||||
Total minimum lease payments
|
|
$
|
1,067
|
|
|
$
|
1,099,012
|
|
|
$
|
222,721
|
|
|
$
|
1,322,800
|
|
Less amount representing interest
|
|
49
|
|
|
|
|
|
|
|
|||||||
Present value of minimum lease payments
|
|
$
|
1,018
|
|
|
|
|
|
|
|
||||||
Less current portion
|
|
596
|
|
|
|
|
|
|
|
|||||||
Long-term portion
|
|
$
|
422
|
|
|
|
|
|
|
|
Employee Groups
|
|
Representative
|
|
Amendable Date
|
|
Percentage of Workforce
|
Pilots
|
|
Air Line Pilots Association, International ("ALPA")
|
|
February 2023
|
|
27%
|
Flight Attendants
|
|
Association of Flight Attendants ("AFA-CWA")
|
|
May 2021
|
|
44%
|
Dispatchers
|
|
Professional Airline Flight Control Association ("PAFCA")
|
|
October 2023
|
|
1%
|
Ramp Service Agents
|
|
International Association of Machinists and Aerospace Workers ("IAMAW")
|
|
June 2020
|
|
4%
|
11.
|
Fair Value Measurements
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Fair Value Level Hierarchy
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
|||||||||
|
(in millions)
|
|
|
||||||||||||||
Senior term loans
|
$
|
391.4
|
|
|
$
|
395.5
|
|
|
$
|
417.9
|
|
|
$
|
435.3
|
|
|
Level 3
|
Junior term loans
|
33.2
|
|
|
33.6
|
|
|
39.3
|
|
|
40.4
|
|
|
Level 3
|
||||
Fixed-rate loans
|
493.9
|
|
|
487.2
|
|
|
518.0
|
|
|
528.6
|
|
|
Level 3
|
||||
2015-1 EETC Class A
|
393.6
|
|
|
389.8
|
|
|
408.6
|
|
|
420.9
|
|
|
Level 2
|
||||
2015-1 EETC Class B
|
84.0
|
|
|
83.5
|
|
|
92.0
|
|
|
94.2
|
|
|
Level 2
|
||||
2015-1 EETC Class C
|
115.2
|
|
|
114.4
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
2017-1 EETC Class AA
|
223.3
|
|
|
213.6
|
|
|
37.5
|
|
|
37.4
|
|
|
Level 2
|
||||
2017-1 EETC Class A
|
74.4
|
|
|
71.1
|
|
|
12.5
|
|
|
12.6
|
|
|
Level 2
|
||||
2017-1 EETC Class B
|
76.7
|
|
|
73.3
|
|
|
13.8
|
|
|
13.8
|
|
|
Level 2
|
||||
2017-1 EETC Class C
|
78.9
|
|
|
78.3
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
Total long-term debt
|
$
|
1,964.6
|
|
|
$
|
1,940.3
|
|
|
$
|
1,539.6
|
|
|
$
|
1,583.2
|
|
|
|
|
Fair Value Measurements as of September 30, 2018
|
||||||||||||||
|
Total
|
|
Level
1 |
|
Level
2 |
|
Level
3 |
||||||||
|
(in millions)
|
||||||||||||||
Cash and cash equivalents
|
$
|
773.7
|
|
|
$
|
773.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investment securities
|
102.2
|
|
|
102.2
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
875.9
|
|
|
$
|
875.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
Total
|
|
Level
1 |
|
Level
2 |
|
Level
3 |
||||||||
|
(in millions)
|
||||||||||||||
Cash and cash equivalents
|
$
|
800.8
|
|
|
$
|
800.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investment securities
|
100.9
|
|
|
100.9
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
901.7
|
|
|
$
|
901.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
12.
|
Debt and Other Obligations
|
|
|
As of
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
September 30, 2018
|
|
December 31, 2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
|
|
(in millions)
|
|
(weighted-average interest rates)
|
||||||||||||||||
Fixed-rate senior term loans due through 2027
|
|
$
|
391.4
|
|
|
$
|
417.9
|
|
|
4.10
|
%
|
|
4.10
|
%
|
|
4.10
|
%
|
|
4.10
|
%
|
Fixed-rate junior term loans due through 2022
|
|
33.2
|
|
|
39.3
|
|
|
6.90
|
%
|
|
6.90
|
%
|
|
6.90
|
%
|
|
6.90
|
%
|
||
Fixed-rate loans due through 2029
|
|
493.9
|
|
|
518.0
|
|
|
3.83
|
%
|
|
3.76
|
%
|
|
3.83
|
%
|
|
3.76
|
%
|
||
Fixed-rate class A 2015-1 EETC due through 2028
|
|
393.6
|
|
|
408.6
|
|
|
4.10
|
%
|
|
4.10
|
%
|
|
4.10
|
%
|
|
4.10
|
%
|
||
Fixed-rate class B 2015-1 EETC due through 2024
|
|
84.0
|
|
|
92.0
|
|
|
4.45
|
%
|
|
4.45
|
%
|
|
4.45
|
%
|
|
4.45
|
%
|
||
Fixed-rate class C 2015-1 EETC due through 2023
|
|
115.2
|
|
|
—
|
|
|
4.93
|
%
|
|
N/A
|
|
|
4.93
|
%
|
|
N/A
|
|
||
Fixed-rate class AA 2017-1 EETC due through 2030
|
|
223.3
|
|
|
37.5
|
|
|
3.38
|
%
|
|
N/A
|
|
|
3.38
|
%
|
|
N/A
|
|
||
Fixed-rate class A 2017-1 EETC due through 2030
|
|
74.4
|
|
|
12.5
|
|
|
3.65
|
%
|
|
N/A
|
|
|
3.65
|
%
|
|
N/A
|
|
||
Fixed-rate class B 2017-1 EETC due through 2026
|
|
76.7
|
|
|
13.8
|
|
|
3.80
|
%
|
|
N/A
|
|
|
3.80
|
%
|
|
N/A
|
|
||
Fixed-rate class C 2017-1 EETC due through 2023
|
|
78.9
|
|
|
—
|
|
|
5.11
|
%
|
|
N/A
|
|
|
5.11
|
%
|
|
N/A
|
|
||
Long-term debt
|
|
1,964.6
|
|
|
1,539.6
|
|
|
|
|
|
|
|
|
|
||||||
Less current maturities
|
|
150.2
|
|
|
115.4
|
|
|
|
|
|
|
|
|
|
||||||
Less unamortized discounts
|
|
43.9
|
|
|
36.7
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
1,770.5
|
|
|
$
|
1,387.5
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
||
|
|
(in millions)
|
||
remainder of 2018
|
|
$
|
44.0
|
|
2019
|
|
158.3
|
|
|
2020
|
|
155.3
|
|
|
2021
|
|
151.0
|
|
|
2022
|
|
147.9
|
|
|
2023 and beyond
|
|
1,308.1
|
|
|
Total debt principal payments
|
|
$
|
1,964.6
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
|
(in thousands)
|
||||||||||||||
Senior term loans
|
$
|
4,195
|
|
|
$
|
4,564
|
|
|
$
|
12,769
|
|
|
$
|
13,854
|
|
Junior term loans
|
605
|
|
|
746
|
|
|
1,908
|
|
|
2,323
|
|
||||
Fixed-rate loans
|
4,844
|
|
|
2,811
|
|
|
14,636
|
|
|
4,555
|
|
||||
Class A 2015-1 EETC
|
4,057
|
|
|
4,366
|
|
|
12,214
|
|
|
12,995
|
|
||||
Class B 2015-1 EETC
|
939
|
|
|
1,118
|
|
|
2,881
|
|
|
3,410
|
|
||||
Class C 2015-1 EETC
|
1,420
|
|
|
—
|
|
|
2,209
|
|
|
—
|
|
||||
Class AA 2017-1 EETC
|
1,751
|
|
|
—
|
|
|
4,008
|
|
|
—
|
|
||||
Class A 2017-1 EETC
|
631
|
|
|
—
|
|
|
1,445
|
|
|
—
|
|
||||
Class B 2017-1 EETC
|
700
|
|
|
—
|
|
|
1,636
|
|
|
—
|
|
||||
Class C 2017-1 EETC
|
934
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
||||
Commitment fees
|
50
|
|
|
29
|
|
|
153
|
|
|
87
|
|
||||
Amortization of debt discounts
|
1,784
|
|
|
1,362
|
|
|
4,930
|
|
|
3,883
|
|
||||
Total
|
$
|
21,910
|
|
|
$
|
14,996
|
|
|
$
|
60,189
|
|
|
$
|
41,107
|
|
13.
|
Subsequent Events
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended September 30,
|
|
Percent Change
|
|||||
|
2018
|
|
2017
|
|
||||
Operating Statistics (unaudited) (A):
|
|
|
|
|
|
|||
Average aircraft
|
119.8
|
|
|
105.5
|
|
|
13.6
|
%
|
Aircraft at end of period
|
121
|
|
|
107
|
|
|
13.1
|
%
|
Average daily aircraft utilization (hours)
|
12.4
|
|
|
11.6
|
|
|
6.9
|
%
|
Average stage length (miles)
|
1,033
|
|
|
1,006
|
|
|
2.7
|
%
|
Block hours
|
136,723
|
|
|
112,701
|
|
|
21.3
|
%
|
Departures
|
50,386
|
|
|
42,599
|
|
|
18.3
|
%
|
Passenger flight segments (PFSs) (thousands)
|
7,856
|
|
|
6,307
|
|
|
24.6
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
8,241,771
|
|
|
6,452,529
|
|
|
27.7
|
%
|
Available seat miles (ASMs) (thousands)
|
9,579,448
|
|
|
7,681,312
|
|
|
24.7
|
%
|
Load factor (%)
|
86.0
|
%
|
|
84.0
|
%
|
|
2.0 pts
|
|
Fare revenue per passenger flight segment ($)
|
60.67
|
|
|
56.38
|
|
|
7.6
|
%
|
Non-ticket revenue per passenger flight segment ($)
|
54.44
|
|
|
52.58
|
|
|
3.5
|
%
|
Total revenue per passenger flight segment ($)
|
115.11
|
|
|
108.96
|
|
|
5.6
|
%
|
Average yield (cents)
|
10.97
|
|
|
10.65
|
|
|
3.0
|
%
|
TRASM (cents)
|
9.44
|
|
|
8.95
|
|
|
5.5
|
%
|
CASM (cents)
|
7.93
|
|
|
7.59
|
|
|
4.5
|
%
|
Adjusted CASM (cents)
|
7.92
|
|
|
7.49
|
|
|
5.7
|
%
|
Adjusted CASM ex-fuel (cents)
|
5.22
|
|
|
5.42
|
|
|
(3.7
|
)%
|
Fuel gallons consumed (thousands)
|
109,515
|
|
|
90,274
|
|
|
21.3
|
%
|
Average economic fuel cost per gallon ($)
|
2.36
|
|
|
1.75
|
|
|
34.9
|
%
|
|
Nine Months Ended September 30,
|
|
Percent Change
|
|||||
|
2018
|
|
2017
|
|
||||
Operating Statistics (unaudited) (A):
|
|
|
|
|
|
|||
Average aircraft
|
117.5
|
|
|
101.9
|
|
|
15.3
|
%
|
Aircraft at end of period
|
121
|
|
|
107
|
|
|
13.1
|
%
|
Average daily aircraft utilization (hours)
|
12.3
|
|
|
11.7
|
|
|
5.1
|
%
|
Average stage length (miles)
|
1,037
|
|
|
991
|
|
|
4.6
|
%
|
Block hours
|
396,034
|
|
|
326,033
|
|
|
21.5
|
%
|
Departures
|
144,772
|
|
|
123,492
|
|
|
17.2
|
%
|
Passenger flight segments (PFSs) (thousands)
|
21,947
|
|
|
18,083
|
|
|
21.4
|
%
|
Revenue passenger miles (RPMs) (thousands)
|
23,016,417
|
|
|
18,285,588
|
|
|
25.9
|
%
|
Available seat miles (ASMs) (thousands)
|
27,504,053
|
|
|
21,851,789
|
|
|
25.9
|
%
|
Load factor (%)
|
83.7
|
%
|
|
83.7
|
%
|
|
0 pts
|
|
Fare revenue per passenger flight segment ($)
|
57.36
|
|
|
56.74
|
|
|
1.1
|
%
|
Non-ticket revenue per passenger flight segment ($)
|
54.74
|
|
|
52.61
|
|
|
4.0
|
%
|
Total revenue per passenger flight segment ($)
|
112.10
|
|
|
109.35
|
|
|
2.5
|
%
|
Average yield (cents)
|
10.69
|
|
|
10.81
|
|
|
(1.1
|
)%
|
TRASM (cents)
|
8.95
|
|
|
9.05
|
|
|
(1.1
|
)%
|
CASM (cents)
|
8.16
|
|
|
7.71
|
|
|
5.8
|
%
|
Adjusted CASM (cents)
|
7.82
|
|
|
7.63
|
|
|
2.5
|
%
|
Adjusted CASM ex-fuel (cents)
|
5.24
|
|
|
5.62
|
|
|
(6.8
|
)%
|
Fuel gallons consumed (thousands)
|
310,661
|
|
|
254,871
|
|
|
21.9
|
%
|
Average economic fuel cost per gallon ($)
|
2.28
|
|
|
1.73
|
|
|
31.8
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
||||||
|
(in thousands, except per gallon amounts)
|
|
Percent Change
|
|||||||
Fuel gallons consumed
|
109,515
|
|
|
90,274
|
|
|
21.3
|
%
|
||
Into-plane fuel cost per gallon
|
$
|
2.36
|
|
|
$
|
1.75
|
|
|
34.9
|
%
|
Into-plane fuel expense
|
$
|
258,818
|
|
|
$
|
158,300
|
|
|
63.5
|
%
|
Realized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Unrealized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Aircraft fuel expense (per statement of operations)
|
$
|
258,818
|
|
|
$
|
158,300
|
|
|
63.5
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
||||||
|
(in thousands, except per gallon amounts)
|
|
Percent Change
|
|||||||
Into-plane fuel expense
|
$
|
258,818
|
|
|
$
|
158,300
|
|
|
63.5
|
%
|
Realized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Economic fuel expense
|
$
|
258,818
|
|
|
$
|
158,300
|
|
|
63.5
|
%
|
Fuel gallons consumed
|
109,515
|
|
|
90,274
|
|
|
21.3
|
%
|
||
Economic fuel cost per gallon
|
$
|
2.36
|
|
|
$
|
1.75
|
|
|
34.9
|
%
|
|
Three Months Ended September 30,
|
|
Dollar Change
|
|
Percent Change
|
|
Cost per ASM
|
|
Per-ASM Change
|
|
Percent Change
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|||||||||||||||||
|
(in thousands)
|
|
|
|
(in cents)
|
|
|
|||||||||||||||||||
Aircraft fuel
|
$
|
258,818
|
|
|
$
|
158,300
|
|
|
$
|
100,518
|
|
|
63.5
|
%
|
|
2.70
|
|
|
2.06
|
|
|
0.64
|
|
|
31.1
|
%
|
Salaries, wages, and benefits
|
185,043
|
|
|
134,114
|
|
|
50,929
|
|
|
38.0
|
%
|
|
1.93
|
|
|
1.75
|
|
|
0.18
|
|
|
10.3
|
%
|
|||
Aircraft rent
|
42,682
|
|
|
53,396
|
|
|
(10,714
|
)
|
|
(20.1
|
)%
|
|
0.45
|
|
|
0.70
|
|
|
(0.25
|
)
|
|
(35.7
|
)%
|
|||
Landing fees and other rents
|
54,542
|
|
|
48,498
|
|
|
6,044
|
|
|
12.5
|
%
|
|
0.57
|
|
|
0.63
|
|
|
(0.06
|
)
|
|
(9.5
|
)%
|
|||
Depreciation and amortization
|
43,773
|
|
|
36,840
|
|
|
6,933
|
|
|
18.8
|
%
|
|
0.46
|
|
|
0.48
|
|
|
(0.02
|
)
|
|
(4.2
|
)%
|
|||
Maintenance, materials and repairs
|
37,778
|
|
|
26,176
|
|
|
11,602
|
|
|
44.3
|
%
|
|
0.39
|
|
|
0.34
|
|
|
0.05
|
|
|
14.7
|
%
|
|||
Distribution
|
37,868
|
|
|
29,695
|
|
|
8,173
|
|
|
27.5
|
%
|
|
0.40
|
|
|
0.39
|
|
|
0.01
|
|
|
2.6
|
%
|
|||
Special charges (credits)
|
(686
|
)
|
|
7,853
|
|
|
(8,539
|
)
|
|
NM
|
|
|
(0.01
|
)
|
|
0.10
|
|
|
(0.11
|
)
|
|
NM
|
|
|||
Loss on disposal of assets
|
1,069
|
|
|
516
|
|
|
553
|
|
|
NM
|
|
|
0.01
|
|
|
0.01
|
|
|
—
|
|
|
NM
|
|
|||
Other operating
|
98,318
|
|
|
87,965
|
|
|
10,353
|
|
|
11.8
|
%
|
|
1.03
|
|
|
1.15
|
|
|
(0.12
|
)
|
|
(10.4
|
)%
|
|||
Total operating expenses
|
$
|
759,205
|
|
|
$
|
583,353
|
|
|
$
|
175,852
|
|
|
30.1
|
%
|
|
7.93
|
|
|
7.59
|
|
|
0.34
|
|
|
4.5
|
%
|
Adjusted CASM (1)
|
|
|
|
|
|
|
|
|
7.92
|
|
|
7.49
|
|
|
0.43
|
|
|
5.7
|
%
|
|||||||
Adjusted CASM ex-fuel (2)
|
|
|
|
|
|
|
|
|
5.22
|
|
|
5.42
|
|
|
(0.20
|
)
|
|
(3.7
|
)%
|
(1)
|
Reconciliation of CASM to Adjusted CASM:
|
|
Three Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
(in millions)
|
|
Per ASM
|
|
(in millions)
|
|
Per ASM
|
||||||
CASM (cents)
|
|
|
7.93
|
|
|
|
|
7.59
|
|
||||
Unrealized losses (gains) related to fuel derivative contracts, net
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Loss on disposal of assets
|
1.1
|
|
|
0.01
|
|
|
0.5
|
|
|
0.01
|
|
||
Special charges (credits)
|
(0.7
|
)
|
|
(0.01
|
)
|
|
7.9
|
|
|
0.10
|
|
||
Adjusted CASM (cents)
|
|
|
7.92
|
|
|
|
|
7.49
|
|
(2)
|
Excludes aircraft fuel expense, loss on disposal of assets and special charges (credits).
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
||||||
|
(in thousands, except per gallon amounts)
|
|
Percent Change
|
|||||||
Fuel gallons consumed
|
310,661
|
|
|
254,871
|
|
|
21.9
|
%
|
||
Into-plane fuel cost per gallon
|
$
|
2.28
|
|
|
$
|
1.73
|
|
|
31.8
|
%
|
Into-plane fuel expense
|
$
|
709,644
|
|
|
$
|
440,376
|
|
|
61.1
|
%
|
Realized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Unrealized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Aircraft fuel expense (per Statement of Operations)
|
$
|
709,644
|
|
|
$
|
440,376
|
|
|
61.1
|
%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
||||||
|
(in thousands, except per gallon amounts)
|
|
Percent Change
|
|||||||
Into-plane fuel expense
|
$
|
709,644
|
|
|
$
|
440,376
|
|
|
61.1
|
%
|
Realized losses (gains) related to fuel derivative contracts, net
|
—
|
|
|
—
|
|
|
NM
|
|
||
Economic fuel expense
|
$
|
709,644
|
|
|
$
|
440,376
|
|
|
61.1
|
%
|
Fuel gallons consumed
|
310,661
|
|
|
254,871
|
|
|
21.9
|
%
|
||
Economic fuel cost per gallon
|
$
|
2.28
|
|
|
$
|
1.73
|
|
|
31.8
|
%
|
|
Nine Months Ended September 30,
|
|
Dollar Change
|
|
Percent Change
|
|
Cost per ASM
|
|
Per-ASM Change
|
|
Percent Change
|
|||||||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|||||||||||||||||
|
(in thousands)
|
|
|
|
(in cents)
|
|
|
|||||||||||||||||||
Aircraft fuel
|
$
|
709,644
|
|
|
$
|
440,376
|
|
|
$
|
269,268
|
|
|
61.1
|
%
|
|
2.58
|
|
|
2.02
|
|
|
0.56
|
|
|
27.7
|
%
|
Salaries, wages, and benefits
|
527,895
|
|
|
391,144
|
|
|
136,751
|
|
|
35.0
|
%
|
|
1.92
|
|
|
1.79
|
|
|
0.13
|
|
|
7.3
|
%
|
|||
Aircraft rent
|
134,618
|
|
|
163,032
|
|
|
(28,414
|
)
|
|
(17.4
|
)%
|
|
0.49
|
|
|
0.75
|
|
|
(0.26
|
)
|
|
(34.7
|
)%
|
|||
Landing fees and other rents
|
162,774
|
|
|
134,538
|
|
|
28,236
|
|
|
21.0
|
%
|
|
0.59
|
|
|
0.62
|
|
|
(0.03
|
)
|
|
(4.8
|
)%
|
|||
Depreciation and amortization
|
128,764
|
|
|
103,680
|
|
|
25,084
|
|
|
24.2
|
%
|
|
0.47
|
|
|
0.47
|
|
|
—
|
|
|
—
|
%
|
|||
Maintenance, materials and repairs
|
99,141
|
|
|
81,473
|
|
|
17,668
|
|
|
21.7
|
%
|
|
0.36
|
|
|
0.37
|
|
|
(0.01
|
)
|
|
(2.7
|
)%
|
|||
Distribution
|
103,496
|
|
|
85,302
|
|
|
18,194
|
|
|
21.3
|
%
|
|
0.38
|
|
|
0.39
|
|
|
(0.01
|
)
|
|
(2.6
|
)%
|
|||
Special charges (credits)
|
88,656
|
|
|
12,629
|
|
|
76,027
|
|
|
NM
|
|
|
0.32
|
|
|
0.06
|
|
|
0.26
|
|
|
NM
|
|
|||
Loss on disposal of assets
|
6,561
|
|
|
3,114
|
|
|
3,447
|
|
|
NM
|
|
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
NM
|
|
|||
Other operating
|
283,841
|
|
|
268,553
|
|
|
15,288
|
|
|
5.7
|
%
|
|
1.03
|
|
|
1.23
|
|
|
(0.20
|
)
|
|
(16.3
|
)%
|
|||
Total operating expenses
|
$
|
2,245,390
|
|
|
$
|
1,683,841
|
|
|
$
|
561,549
|
|
|
33.3
|
%
|
|
8.16
|
|
|
7.71
|
|
|
0.45
|
|
|
5.8
|
%
|
Adjusted CASM (1)
|
|
|
|
|
|
|
|
|
7.82
|
|
|
7.63
|
|
|
0.19
|
|
|
2.5
|
%
|
|||||||
Adjusted CASM ex-fuel (2)
|
|
|
|
|
|
|
|
|
5.24
|
|
|
5.62
|
|
|
(0.38
|
)
|
|
(6.8
|
)%
|
(1)
|
Reconciliation of CASM to Adjusted CASM:
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
(in millions)
|
|
Per ASM
|
|
(in millions)
|
|
Per ASM
|
||||||
CASM (cents)
|
|
|
8.16
|
|
|
|
|
7.71
|
|
||||
Unrealized losses (gains) related to fuel derivative contracts, net
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Loss on disposal of assets
|
6.6
|
|
|
0.02
|
|
|
3.1
|
|
|
0.01
|
|
||
Special charges (credits)
|
88.7
|
|
|
0.32
|
|
|
12.6
|
|
|
0.06
|
|
||
Adjusted CASM (cents)
|
|
|
7.82
|
|
|
|
|
7.63
|
|
(2)
|
Excludes aircraft fuel expense, loss on disposal of assets and special charges and credits.
|
|
|
remainder of 2018
|
|
2019 - 2020
|
|
2021 - 2022
|
|
2023 and beyond
|
|
Total
|
||||||||||
Long-term debt (1)
|
|
$
|
44
|
|
|
$
|
314
|
|
|
$
|
299
|
|
|
$
|
1,308
|
|
|
$
|
1,965
|
|
Interest commitments (2)
|
|
22
|
|
|
146
|
|
|
120
|
|
|
179
|
|
|
467
|
|
|||||
Capital and operating lease obligations
|
|
58
|
|
|
405
|
|
|
338
|
|
|
522
|
|
|
1,323
|
|
|||||
Flight equipment purchase obligations
|
|
210
|
|
|
1,403
|
|
|
792
|
|
|
8
|
|
|
2,413
|
|
|||||
Other (3)
|
|
3
|
|
|
25
|
|
|
20
|
|
|
67
|
|
|
115
|
|
|||||
Total future payments on contractual obligations
|
|
$
|
337
|
|
|
$
|
2,293
|
|
|
$
|
1,569
|
|
|
$
|
2,084
|
|
|
$
|
6,283
|
|
|
|
Airbus
|
|
Third-Party Lessor
|
|
|
||
|
|
A320ceo
|
|
A320neo
|
|
A320neo
|
|
Total
|
remainder of 2018
|
|
5
|
|
|
|
3
|
|
8
|
2019
|
|
2
|
|
9
|
|
4
|
|
15
|
2020
|
|
|
|
16
|
|
|
|
16
|
2021
|
|
|
|
18
|
|
|
|
18
|
|
|
7
|
|
43
|
|
7
|
|
57
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs
|
||||||
July 1-31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
55,076,306
|
|
August 1-31, 2018
|
|
861
|
|
|
$
|
43.86
|
|
|
—
|
|
|
$
|
55,076,306
|
|
September 1-30, 2018
|
|
2,655
|
|
|
$
|
45.55
|
|
|
—
|
|
|
$
|
55,076,306
|
|
Total
|
|
3,516
|
|
|
$
|
45.13
|
|
|
—
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit Number
|
|
Description of Exhibits
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise specifically stated in such filing.
|
|
SPIRIT AIRLINES, INC.
|
|
|
|
|
Date: October 24, 2018
|
By:
|
/s/ Scott M. Haralson
|
|
|
Scott M. Haralson
|
|
|
Senior Vice President and
Chief Financial Officer
|
1.
|
Your title will be Senior Vice President & Chief Financial Officer, and you will report directly to Ted Christie, President.
|
2.
|
Your annualized base salary will be $325,000, which results in a semi-monthly payroll amount of $13,541.67 (gross – subject to withholdings for taxes and appropriate deductions). Your base salary will be subject to annual review in accordance with the Company’s executive compensation program and practices and your next annual review will be February 1, 2020.
|
3.
|
You will be eligible to participate in the Company’s Short-Term Incentive Plan (STI) for Officers at the Senior Vice President (SVP) level beginning October 16th, 2018.
|
a.
|
Your STI target will change to 70% of base salary earnings effective October 16th, 2018 paid during the 2018 STI plan year. From January 1st, 2018 thru October 15th, 2018 your STI target will remain at the Vice President level at 50% of base salary earnings over the period stated. Your actual STI payment can range from 0% to 200% of target depending on (i) the Company’s safety performance during the year, (ii) the Company’s performance under applicable financial and operational metrics and (iii) to the extent applicable, our Compensation Committee’s assessment of your individual performance. STI bonuses earned for any year are usually paid during the first calendar quarter of the following year. In no event will you be entitled to receive an STI payment for any year unless your employment with the Company continues through the date of payment except for termination due to death or permanent disability. Any STI plan payment is subject to the terms approved by the Compensation Committee of the Board.
|
4.
|
Subject to approval by our Compensation Committee, you will be granted an initial off-cycle equity-based incentive award (the “Off-Cycle LTI Award”) having a grant face value of $50,000 (based on the average closing price of Spirit common stock for the 5 trading days prior to the date of grant). The Off-Cycle LTI Award will be subject to the terms and conditions of the Company’s 2015 Incentive Award Plan, as amended from time to time (“Incentive Award Plan”). The Off-Cycle LTI Award will be in the form of Restricted Stock Units, vesting over a four-year period as follows; 50% on the second anniversary of the grant date, 25% on the third anniversary of the grant date and the remaining 25% on the fourth anniversary of the grant date. Should your employment with the Company terminate for any reason (other than death or permanent disability) prior to the fourth anniversary of the grant date, the unvested portion of the Off-Cycle LTI Award would automatically terminate and forfeit at that time. It is
|
5.
|
Commencing in 2019, during your employment with the Company, you will be eligible to be granted annual long-term incentive equity awards (“Annual LTI Awards”) under the Incentive Award Plan. Your eligibility to receive an Annual LTI Award in any year will be on the basis, terms and conditions determined by the Compensation Committee in its discretion. It is contemplated that the 2019 Annual LTI Awards at the SVP level will have a grant date target range value of $225,000 to $675,000 and will be split 40/60 between Restricted Stock Units, vesting 25% annually over four years, and Performance Share Units, to be settled in shares of Company common stock after a three-year measurement period. Your Annual LTI Awards will be granted at the same time Annual LTI Awards are granted to other senior executive officers. Should your employment with the Company terminate for any reason (other than death or permanent disability) prior to the vesting date of any Annual LTI Award granted to you, the unvested portion of such Annual LTI Award will automatically terminate and forfeit at that time. The 2019 LTI award plan design is contingent upon approval by the Compensation Committee of the Board.
|
6.
|
The Company may withhold from any compensation, reimbursements and benefits payable to you all taxes as required by law and well as other standard or customary withholdings and deductions. You also agree that target incentives do not constitute a promise of payment.
|
7.
|
Under the Company’s current vacation pay policy, on your promotion date, you will continue to accrue vacation at a semi-monthly rate of 5.00 hours per pay period. If you worked an entire year, you would be eligible to accrue a maximum of three weeks. Of course, the Company may change or discontinue the policy at any time. All other welfare and 401K benefits will also remain the same as with your current employment.
|
8.
|
As an officer of the Company, you will continue to be eligible for participation in the Spirit Airlines, Inc. 2017 Executive Severance Plan (as may be amended from time to time). In addition, as an officer of the Company, you will be covered by the Company's director and officer liability insurance policy, which may be changed or discontinued by the Company at any time.
|
9.
|
Please note and understand that, consistent with Company practice, your employment with the Company constitutes “at will” employment and is not intended to be for a specified period. As a result, your employment with the Company may be terminated by you or the Company at any time, with or without cause and with or without advance notice.
|
10.
|
As an employee of the Company, you will be expected and required to abide by the Company’s policies and procedures, including (but not limited to) the Company’s Code of Business Conduct and Ethics and Insider Trading Compliance Program. You also agree to comply with the covenants set forth in Annex A hereto, which is an integral part of this letter agreement.
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11.
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This offer is contingent upon you signing and returning this letter to us no later than Tuesday, October 16th, 2018.
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12.
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You agree and warrant that in performing services for the Company, you will not use or disclose any confidential information of any prior employer or other person or entity. You further warrant and represent that you are able to fully and effectively perform your job functions for the Company without resort to, or reliance on, any such confidential information of any prior employer or other person or entity. You further warrant and represent that your acceptance of this promotion and your employment with the Company will not breach or violate any agreement you have with any third party. You further warrant and represent that all information previously provided to the Company or its agents with regard to your background is true and correct.
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13.
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You recognize that you will be subject to Spirit’s stock ownership guidelines and “clawback” policies as in effect from time to time.
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Date: October 24, 2018
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/s/ Robert L. Fornaro
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Robert L. Fornaro
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Chief Executive Officer
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Date: October 24, 2018
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/s/ Scott M. Haralson
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Scott M. Haralson
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Senior Vice President and Chief Financial Officer
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(i.)
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the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2018 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(ii.)
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the information contained in the Report fairly present, in all material respects, the financial condition and results of operations of the Company.
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Date: October 24, 2018
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/s/ Robert L. Fornaro
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Robert L. Fornaro
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Chief Executive Officer
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(i.)
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the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2018 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(ii.)
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the information contained in the Report fairly present, in all material respects, the financial condition and results of operations of the Company.
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Date: October 24, 2018
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/s/ Scott M. Haralson
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Scott M. Haralson
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Senior Vice President and Chief Financial Officer
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