Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | HAWAIIAN HOLDINGS INC | |
Entity Central Index Key | 1,172,222 | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 50,771,610 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Operating Revenue: | |||
Passenger | $ 611,600 | $ 563,752 | |
Other | 53,812 | 42,457 | |
Total | 665,412 | 606,209 | [2] |
Operating Expenses: | |||
Wages and benefits | 168,709 | 151,053 | [2] |
Aircraft fuel, including taxes and delivery | 133,446 | 103,538 | [2] |
Maintenance, materials and repairs | 58,141 | 59,404 | [2] |
Aircraft and passenger servicing | 36,518 | 34,290 | [2] |
Aircraft rent | 31,900 | 33,135 | [2] |
Commissions and other selling | 31,925 | 29,642 | [2] |
Other rentals and landing fees | 30,815 | 28,336 | [2] |
Depreciation and amortization | 32,245 | 27,468 | [2] |
Purchased services | 31,121 | 26,637 | [2] |
Contract terminations expense | 35,322 | 0 | |
Special items | 0 | 18,679 | [2] |
Other | 39,005 | 31,997 | [2] |
Total | 629,147 | 544,179 | [2] |
Operating Income | 36,265 | 62,030 | [2] |
Nonoperating Income (Expense): | |||
Interest expense and amortization of debt discounts and issuance costs | (8,555) | (8,003) | [2] |
Gains (losses) on fuel derivatives | 4,617 | (8,798) | [2] |
Interest income | 1,474 | 1,152 | [2] |
Capitalized interest | 2,238 | 1,760 | [2] |
Other, net | 1,056 | (1,924) | [2] |
Total | 830 | (15,813) | [2] |
Income Before Income Taxes | 37,095 | 46,217 | [2] |
Income tax expense | 8,553 | 12,572 | [2] |
Net Income (Loss) | $ 28,542 | $ 33,645 | [2] |
Net Income Per Common Stock Share: | |||
Basic (in dollars per share) | $ 0.56 | $ 0.63 | |
Diluted (in dollars per share) | $ 0.56 | $ 0.62 | |
Weighted Average Number of Common Stock Shares Outstanding: | |||
Basic (in shares) | 51,055 | 53,562 | |
Diluted (in shares) | 51,199 | 53,980 | |
Cash Dividends Declared Per Common Stock Share (in usd per share) | $ 0.12 | $ 0 | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 28,542 | $ 33,645 | [2] |
Other comprehensive loss, net: | |||
Net change related to employee benefit plans, net of tax expense | 513 | 1,468 | |
Net change in derivative instruments, net of tax benefit | (7,244) | (7,097) | |
Net change in available-for-sale investments, net of tax expense | (460) | 86 | |
Net current-period other comprehensive income (loss) | (7,191) | (5,543) | |
Total Comprehensive Income | $ 21,351 | $ 28,102 | [2] |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net change related to employee benefit plans, tax expense | $ 166 | $ 896 |
Net change in derivative instruments, tax expense (benefit) | (2,345) | (4,325) |
Net change in available-for-sale investments, tax expense (benefit) | $ 149 | $ (52) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | [1] |
Current Assets: | |||
Cash and cash equivalents | $ 279,185 | $ 190,953 | [2] |
Restricted cash | 1,000 | 1,000 | [2] |
Short-term investments | 244,948 | 269,297 | [2] |
Accounts receivable, net | 106,724 | 140,279 | [2] |
Spare parts and supplies, net | 30,815 | 35,361 | [2] |
Prepaid expenses and other | 83,404 | 79,186 | [2] |
Total | 746,076 | 716,076 | [2] |
Property and equipment, less accumulated depreciation and amortization of $585,766 and $558,548 as of March 31, 2018 and December 31, 2017, respectively | 1,918,035 | 1,842,263 | [2] |
Other Assets: | |||
Long-term prepayments and other | 188,742 | 193,632 | [2] |
Intangible assets, less accumulated amortization of $21,820 and $21,561 as of March 31, 2018 and December 31, 2017, respectively | 14,928 | 15,187 | |
Goodwill | 106,663 | 106,663 | |
Total Assets | 2,974,444 | 2,873,821 | [2] |
Current Liabilities: | |||
Accounts payable | 137,716 | 140,805 | [2] |
Air traffic liability | 698,949 | 589,093 | [2] |
Other accrued liabilities | 126,700 | 147,593 | [2] |
Current maturities of long-term debt and capital lease obligations | 59,002 | 59,470 | [2] |
Total | 1,022,367 | 936,961 | [2] |
Long-Term Debt and Capital Lease Obligations | 498,748 | 511,201 | [2] |
Other Liabilities and Deferred Credits: | |||
Accumulated pension and other post-retirement benefit obligations | 217,812 | 220,788 | [2] |
Other liabilities and deferred credits | 265,422 | 225,605 | [2] |
Deferred tax liability, net | 131,881 | 134,141 | |
Total | 615,115 | 580,534 | [2] |
Commitments and Contingencies | |||
Shareholders’ Equity: | |||
Special preferred stock, $0.01 par value per share, three shares issued and outstanding as of March 31, 2018 and December 31, 2017 | 0 | 0 | |
Common stock, $0.01 par value per share, 50,771,515 and 51,173,453 shares outstanding as of March 31, 2018 and December 31, 2017, respectively | 508 | 512 | |
Capital in excess of par value | 124,868 | 126,743 | |
Accumulated income | 795,293 | 793,134 | |
Accumulated other comprehensive loss, net | (82,455) | (75,264) | |
Total | 838,214 | 845,125 | [2] |
Total Liabilities and Shareholders’ Equity | $ 2,974,444 | $ 2,873,821 | [2] |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Position [Abstract] | |||
Property and equipment, accumulated depreciation and amortization | $ 585,766 | $ 558,548 | [1] |
Intangible assets, accumulated amortization | $ 21,820 | $ 21,561 | |
Special preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Special preferred stock, shares issued | 3 | 3 | |
Special preferred stock, shares outstanding | 3 | 3 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares outstanding | 50,771,515 | 51,173,453 | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by Operating Activities | $ 225,545 | $ 208,949 |
Cash flows from Investing Activities: | ||
Additions to property and equipment, including pre-delivery payments | (110,897) | (53,130) |
Purchases of investments | (30,386) | (68,155) |
Sales of investments | 53,984 | 78,301 |
Net cash used in investing activities | (87,299) | (42,984) |
Cash flows from Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | (20,395) | (21,872) |
Dividend payments | (6,145) | 0 |
Repurchases of common stock | (20,245) | 0 |
Other | (3,229) | (7,295) |
Net cash used in financing activities | (50,014) | (29,167) |
Net increase in cash and cash equivalents | 88,232 | 136,798 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 191,953 | 330,991 |
Cash, cash equivalents, and restricted cash - End of Period | $ 280,185 | $ 467,789 |
Business and Basis of Presentat
Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation Hawaiian Holdings, Inc. (the Company or Holdings) is a holding company incorporated in the State of Delaware. The Company’s primary asset is its sole ownership of all issued and outstanding shares of common stock of Hawaiian Airlines, Inc. (Hawaiian). The accompanying unaudited financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (SEC). Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company’s results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the airline industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year. The accompanying unaudited Consolidated Financial Statements should be read in conjunction with the financial statements and the notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, and created Topic 606 (ASC 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaced most existing revenue recognition guidance in GAAP and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company elected to adopt the full retrospective transition method as of January 1, 2018, resulting in the restatement of the prior periods as of the date of adoption. The overall decrease in equity as of January 1, 2016 was $76.0 million net of tax, with an offsetting change primarily in Other liabilities and deferred credits. Refer to Note 5 for additional revenue recognition discussion. The most significant impact of the standard relates to the accounting for the Company's frequent flyer travel award program. This change, as well as other less significant changes, are described below: • Frequent flyer - The standard requires the Company to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles, effectively eliminating the incremental cost accounting previously applied. ASC 606 resulted in a significant increase to the deferred revenue liability on the Company's balance sheet, as the estimated selling price of the miles significantly exceeds the value previously recorded for incremental cost. The allocated value of miles earned through flights and sold to partners is recognized at the time the free travel or other award is redeemed by the passenger. Previously, the transportation element associated with sold miles was deferred and recognized as passenger revenue over the period when the transportation was expected to be provided ( 23 months). • Passenger revenue - The standard requires the Company to make certain adjustments to its passenger revenue, most notably related to unused tickets, which represents unexercised passenger rights. The Company uses historical information to estimate the proportion of ticket revenue that will expire unused to be recognized at the scheduled flight date. Prior to the adoption of ASC 606, the Company recorded this revenue as the tickets expired unused. As of the adoption date the adjustment due to passenger ticket expiration had the effect of reducing the air traffic liability but did not have a significant effect on revenue recognized. Ticket change fees were previously recognized at the time the fees were assessed; however, under ASC 606, the Company now defers the recognition of ticket change fees as a component of air traffic liability until the related transportation is provided. Further, the Company reclassified revenue items such as checked baggage, charter, ticket change and cancellation fees, in flight revenue, and other incidental sales to passenger revenue (from other operating revenue), as these items do not represent distinct performance obligations separate from the transportation provided to the passenger. • Selling Costs - Under ASC 606, the Company will capitalize selling costs associated with credit card fees, booking fees, and commissions, and recognize the associated expense at the ticketed flight date. Prior to ASC 606, the Company recognized the costs associated with credit card and booking fees as they were incurred. Restated financial statement information, which reflects the adoption of the ASC 606 is below: Three Months Ended March 31, 2017 As Reported Adjustments As Restated (in thousands) Operating Revenue: Passenger $ 537,590 $ 26,162 $ 563,752 Other 76,595 (34,138 ) 42,457 Total $ 614,185 $ (7,976 ) $ 606,209 Operating Expenses 546,891 (2,712 ) 544,179 Operating Income 67,294 (5,264 ) 62,030 Nonoperating Income (Expense) (15,813 ) — (15,813 ) Income tax expense 14,570 (1,998 ) 12,572 Net Income $ 36,911 $ (3,266 ) $ 33,645 Net Income Per Common Stock Share: Basic $ 0.69 $ (0.06 ) $ 0.63 Diluted $ 0.68 $ (0.06 ) $ 0.62 Select consolidated balance sheet line items, which reflect the adoption of the new standard are as follows: December 31, 2017 Balance Sheet As Reported Adjustments As Restated (in thousands) ASSETS Prepaid expenses and other $ 65,196 $ 13,990 $ 79,186 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Air traffic liability 545,362 43,731 589,093 Other accrued liabilities 146,283 1,310 147,593 Noncurrent Liabilities: Other liabilities and deferred credits 95,636 129,969 225,605 Deferred tax liability 174,344 (40,203 ) 134,141 Shareholders' Equity: Accumulated income 913,951 (120,817 ) 793,134 There was no impact to the Company's net cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Recently Issued Accounting Pronouncements In February 2018, the FASB issued 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). The guidance allows reclassification from accumulated other comprehensive income to retained earnings of stranded taxes resulting from the Tax Cuts and Jobs Act. In addition, under ASU 2018-02, certain disclosures regarding stranded tax effects are required. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company continues to evaluate the impact of ASU 2018-02 and the potential effects on the Company's consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (ASU 2017-02), which better aligns a company's risk management activities and financial reporting for hedging relationships and is intended to simplify hedge accounting requirements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company continues to evaluate the components and options within ASU 2017-12. In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02), requiring a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements and believes this ASU will have a significant impact on its consolidated balance sheet but does not expect that the ASU will have a material impact on the Company's results of operations or cash flows. The effect of adopting the new standard will be to record right-of-use assets and operating lease obligations for current operating leases on the Company's balance sheet. See Note 10 below which discusses our lease obligations as of March 31, 2018 . In November 2017, the FASB directed the staff to draft a proposed ASU that would provide transition relief allowing entities to continue to apply the guidance in ASC 840, Leases including its disclosure requirements, in the comparative periods presented in the year that a company adopts ASU 2016-02 (ASC 842). Entities that elect this option will record the cumulative effect of adoption on the effective date rather than at the beginning of the earliest comparative period presented. The Company is awaiting the finalized pronouncement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Reclassifications out of accumulated other comprehensive income (loss) by component are as follows: Details about accumulated other comprehensive (income) loss components Three months ended March 31, Affected line items in the statement where net income is presented 2018 2017 (in thousands) Derivatives designated as hedging instruments under ASC 815 Foreign currency derivative losses (gains) $ 1,221 $ (1,212 ) Passenger revenue Total before tax 1,221 (1,212 ) Tax expense (benefit) (299 ) 459 Total, net of tax $ 922 $ (753 ) Amortization of defined benefit plan items Actuarial loss $ 624 $ 2,228 Nonoperating Income (Expense), Other, net Prior service cost 56 60 Nonoperating Income (Expense), Other, net Total before tax 680 2,288 Tax benefit (167 ) (867 ) Total, net of tax $ 513 $ 1,421 Short-term investments Realized losses (gain) on sales of investments, net $ 5 $ (8 ) Nonoperating Income (Expense), Other, net Total before tax 5 (8 ) Tax expense (benefit) (1 ) 3 Total, net of tax $ 4 $ (5 ) Total reclassifications for the period $ 1,439 $ 663 A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes, for the three months ended March 31, 2018 and 2017 is as follows: Three months ended March 31, 2018 Foreign Currency Derivatives Defined Benefit Short-Term Investments Total (in thousands) Beginning balance $ 1,249 $ (75,953 ) $ (560 ) $ (75,264 ) Other comprehensive loss before reclassifications, net of tax (8,166 ) — (464 ) (8,630 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 922 513 4 1,439 Net current-period other comprehensive income (loss) (7,244 ) 513 (460 ) (7,191 ) Ending balance $ (5,995 ) $ (75,440 ) $ (1,020 ) $ (82,455 ) Three months ended March 31, 2017 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance $ 7,071 $ (110,202 ) $ (362 ) $ (103,493 ) Other comprehensive income (loss) before reclassifications, net of tax (6,344 ) 47 91 (6,206 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (753 ) 1,421 (5 ) 663 Net current-period other comprehensive income (loss) (7,097 ) 1,468 86 (5,543 ) Ending balance $ (26 ) $ (108,734 ) $ (276 ) $ (109,036 ) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share, which excludes dilution, is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2018 and 2017 , anti-dilutive shares excluded from the calculation of diluted earnings per share were immaterial. Three Months Ended March 31, 2018 2017 (in thousands, except for per share data) Numerator: Net Income $ 28,542 $ 33,645 Denominator: Weighted average common stock shares outstanding - Basic 51,055 53,562 Assumed exercise of stock options and awards 144 418 Weighted average common stock shares outstanding - Diluted 51,199 53,980 Net Income Per Share Basic $ 0.56 $ 0.63 Diluted $ 0.56 $ 0.62 Stock Repurchase Program In November 2017, the Company's Board of Directors approved a stock repurchase program pursuant to which the Company may repurchase up to $100 million of its outstanding common stock over a two -year period through December 2019. The stock repurchase program is subject to further modification or termination at any time. The Company spent $20.3 million to repurchase and retire approximately 549 thousand shares of the Company's common stock in open market transactions during the three months ended March 31, 2018 . As of March 31, 2018 , the Company had $79.7 million remaining to spend under its stock repurchase program. Dividends During the three months ended March 31, 2018 , the Company declared and paid cash dividends of $0.12 per share, or $6.1 million which was paid on February 28, 2018, to stockholders of record as of February 14, 2018. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The majority of our revenue is derived from transporting passengers on our aircraft. The Company accounts for revenue in accordance with ASC 606, which was adopted on January 1, 2018, using the full retrospective method. See Note 2 for further discussion of the adoption, including the impact on our previously issued financial statements. The Company's primary operations are that of its wholly-owned subsidiary, Hawaiian. Principally all operations of Hawaiian either originate and/or end in the State of Hawai'i. The management of such operations is based on a system-wide approach due to the interdependence of Hawaiian's route structure in its various markets. As Hawaiian is engaged in only one significant line of business (i.e., air transportation), management has concluded that it has only one segment. The Company's operating revenues by geographic region (as defined by the Department of Transportation) are summarized below: Three months ended, March 31, 2018 2017 Geographic Information (in thousands) Domestic $ 492,202 $ 450,797 Pacific 173,210 155,412 Total operating revenue $ 665,412 $ 606,209 Passenger & Other revenue - Generally, the Company’s contracts with customers have two principal performance obligations, which are the promise to provide transportation to the passenger and the frequent flyer miles earned on the flight. In addition, the Company often charges additional fees for items such as baggage and in-flight entertainment. Such items are not capable of being distinct from the transportation provided because the customer can only benefit from the services during the flight. The transportation performance obligation, including the redemption of HawaiianMiles awards for flights, is satisfied, and revenue is recognized, as transportation is provided. In some instances, tickets sold by the Company can include a flight segment on another carrier which is referred to as an interline segment. In this situation, the Company acts as an agent for the other carrier and revenue is recognized net of cost. Tickets sold by other airlines where the Company provides the transportation are recognized as passenger revenue at the estimated value to be billed to the other airline when travel is provided. Differences between amounts billed and the actual amounts may be rejected and rebilled or written off if the amount recorded was different from the original estimate. Other operating revenue consists of cargo revenue, ground handling fees, commissions, and fees earned under certain joint marketing agreements with other companies. These amounts are recognized when the service is provided. Three months ended, March 31, 2018 2017 Passenger Revenue by Type (in thousands) Passenger revenue, excluding frequent flyer $ 577,955 $ 534,054 Frequent flyer revenue, transportation component 33,645 29,698 Passenger Revenue $ 611,600 $ 563,752 Other revenue (e.g. cargo and other miscellaneous) $ 38,690 $ 32,141 Frequent flyer revenue, marketing and brand component 15,122 10,316 Other Revenue $ 53,812 $ 42,457 For the three months ended March 31, 2018 and 2017, the Company's total revenue was $665.4 million and $606.2 million , respectively. As of March 31, 2018 and December 31, 2017, the Company's Air traffic liability balance as it relates to passenger tickets (excluding frequent flyer) was $526.4 million and $422.6 million , respectively, which represents future revenue that is expected to be realized over the next 12 months. During the three months ended March 31, 2018 and 2017, the amount of revenue recognized that was included in Air traffic liability as of the beginning of the respective period was $260.3 million and $229.6 million , respectively. Passenger revenue associated with unused tickets, which represent unexercised passenger rights, is recognized in proportion to the pattern of rights exercised by related passengers (e.g. scheduled departure dates). To calculate the portion to be recognized as revenue in the period, the Company utilizes historical information and applies the trend rate to the current air traffic liability balances for that specific period. Management has elected (via a practical expedient election) to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer, e.g., sales, use, value added, and certain excise taxes. Frequent Flyer Revenue - Hawaiian's frequent flyer travel award program, provides a variety of awards to program members based on accumulated mileage. ASC 606 requires the Company to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles. Ticket consideration received is allocated between the performance obligations, primarily travel and miles earned by passengers. The allocated value of the miles is deferred until the free travel or other award is used by the passenger, at which time it is included in passenger revenue. The value of the ticket used in the determination of the estimated selling price is based on the historical value of equivalent flights to those provided for loyalty awards and the related miles redeemed to obtain that award adjusted for breakage or fulfillment. On a quarterly basis, the Company calculates the equivalent ticket value (ETV) by analyzing the fares of similar tickets for the prior 12 months', considering cabin class and geographic region. The Company also sells mileage credits to companies participating in our frequent flyer program. These contracts generally include multiple performance obligations, including the transportation that will ultimately be provided when the mileage credits are redeemed and marketing and brand related activities. The marketing and brand performance obligations are effectively provided each time a HawaiianMiles member uses the co-branded credit card and monthly access to customer lists and marketing is provided, which corresponds to the timing of when the Company issues or is obligated to issue the mileage credits to the HawaiianMiles member. Therefore, the Company recognizes revenue for the marketing and brand performance obligations when HawaiianMiles members use their co-brand credit card and the resulting mileage credits are issued to them, which best correlates with the Company’s performance toward satisfying the obligation. Accounting for frequent flyer revenue involves the use of various techniques to estimate revenue. The Company sells mileage credits to companies participating in the frequent flyer program, who in turn issues those miles to customers based on the volume of spend, making the majority of the transaction price variable. To determine the total estimated transaction price, the Company forecasts future credit card activity using historical information. The relative selling price is determined using management’s standalone estimated selling price of each performance obligation. The objective of using the estimated selling price based methodology is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. Accordingly, the Company determines the best estimate of selling price by considering multiple inputs and methods including, but not limited to, discounted cash flows, brand value, published selling prices, number of miles awarded and number of miles redeemed. The Company estimates the selling price of miles using an ETV adjusted for a fulfillment discount as described above. Miles expire after 18 months of member account inactivity. The ETV includes a fulfillment discount (breakage) to reflect the value of the award ticket over the number of miles that, based on historical experience, will be needed to obtain the award. The Company reviews its breakage estimates annually based upon the latest available information regarding redemption and expiration patterns (e.g., credit card and non-credit card holders). The Company’s estimate of the expected expiration of miles requires significant management judgment. Current and future changes to expiration assumptions or to the expiration policy, or to program rules and program could affect the estimated value of a mile. The Company's frequent flyer liability is recorded within two balance sheet accounts, Air traffic liability (short-term) and Other liabilities and deferred credits (long-term) based on estimated and expected redemption patterns using historical data and analysis. As of March 31, 2018 and December 31, 2017 , the Company's contract liability balance was $366.0 million and $321.9 million , respectively. Accounts Receivable - Accounts receivable primarily consist of amounts due from credit card companies, non-airline partners, and cargo transportation customers. The Company provides an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented. Costs to obtain or fulfill a contract - In order for the Company to provide transportation to our customers we incur fulfillment costs which are generally: booking fees, credit card fees, and commission/selling costs. As of March 31, 2018 and December 31, 2017 the Company's asset balance associated with these costs were $20.3 million and $16.7 million , respectively. During the three months ended March 31, 2018 and 2017, expenses related to these costs totaled to $23.9 million and $22.5 million , respectively. To determine the amount to capitalize and expense at the end of each period, the Company uses historical sales data and estimates the amount associated with unflown tickets. |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | Short-Term Investments Debt securities that are not classified as cash equivalents are classified as available-for-sale investments and are stated as current assets at fair value as these securities are available for use in current operations. Realized gains and losses on sales of investments are reflected in nonoperating income (expense) in the Company's unaudited Consolidated Statements of Operations. Unrealized gains and losses on available-for-sale debt securities are reflected as a component of accumulated other comprehensive income. The following is a summary of short-term investments held as of March 31, 2018 and December 31, 2017 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2018 (in thousands) Corporate debt $ 141,097 $ 4 $ (1,080 ) $ 140,021 U.S. government and agency debt 53,462 1 (237 ) 53,226 Municipal bonds 19,628 — (84 ) 19,544 Other fixed income securities 32,227 — (70 ) 32,157 Total short-term investments $ 246,414 $ 5 $ (1,471 ) $ 244,948 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2017 (in thousands) Corporate debt $ 165,610 $ 8 $ (535 ) $ 165,083 U.S. government and agency debt 59,054 1 (215 ) 58,840 Municipal bonds 21,517 — (104 ) 21,413 Other fixed income securities 23,973 1 (13 ) 23,961 Total short-term investments $ 270,154 $ 10 $ (867 ) $ 269,297 Contractual maturities of short-term investments as of March 31, 2018 are shown below. Under 1 Year 1 to 5 Years Total (in thousands) Corporate debt $ 68,515 $ 71,506 $ 140,021 U.S. government and agency debt 43,156 10,070 53,226 Municipal bonds 10,486 9,058 19,544 Other fixed income securities 25,200 6,957 32,157 Total short-term investments $ 147,357 $ 97,591 $ 244,948 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement (ASC 820), defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the assets or liabilities; and Level 3 — Unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets or liabilities. The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis: Fair Value Measurements as of March 31, 2018 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 176,125 $ 135,323 $ 40,802 $ — Restricted cash 1,000 1,000 — — Short-term investments 244,948 — 244,948 — Fuel derivative contracts: Crude oil call options 19,551 — 19,551 — Jet fuel swaps 113 — 113 — Foreign currency derivatives 1,218 — 1,218 — Total assets measured at fair value $ 442,955 $ 136,323 $ 306,632 $ — Fuel derivative contracts: Jet fuel swaps $ 10 $ — $ 10 $ — Foreign currency derivatives 7,830 — 7,830 — Total liabilities measured at fair value $ 7,840 $ — $ 7,840 $ — Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 62,310 $ 27,807 $ 34,503 $ — Restricted cash 1,000 1,000 — — Short-term investments 269,297 — 269,297 — Fuel derivative contracts: Crude oil call options 20,272 — 20,272 — Jet fuel swaps 336 — 336 — Foreign currency derivatives 4,300 — 4,300 — Total assets measured at fair value $ 357,515 $ 28,807 $ 328,708 $ — Foreign currency derivatives 1,713 — 1,713 — Total liabilities measured at fair value $ 1,713 $ — $ 1,713 $ — Cash equivalents. The Company's level 1 cash equivalents consist of money market securities and the level 2 cash equivalents consist of U.S. agency bonds, mutual funds, and commercial paper. The instruments classified as level 2 are valued using quoted prices for similar assets in active markets. Restricted cash . The Company’s restricted cash consists of money market securities. Short-term investments. Short-term investments include U.S. and foreign government notes and bonds, U.S. agency bonds, variable-rate corporate bonds, asset backed securities, foreign and domestic corporate bonds, municipal bonds, and commercial paper. These instruments are valued using quoted prices for similar assets in active markets or other observable inputs. Fuel derivative contracts. The Company’s fuel derivative contracts consist of crude oil call options and jet fuel swaps, which are not traded on a public exchange. The fair value of these instruments are determined based on inputs available or derived from public markets including contractual terms, market prices, yield curves, and measures of volatility among others. Foreign currency derivatives. The Company’s foreign currency derivatives consist of Japanese Yen and Australian Dollar forward contracts and are valued primarily based upon data available or derived from public markets. The table below presents the Company’s debt (excluding obligations under capital leases and financing obligations) measured at fair value: Fair Value of Debt March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Amount Total Level 1 Level 2 Level 3 (in thousands) $ 415,059 $ 418,825 $ — $ — $ 418,825 $ 433,072 $ 444,099 $ — $ — $ 444,099 The fair value estimates of the Company’s debt were based on the discounted amount of future cash flows using the Company’s current incremental rate of borrowing for similar instruments. The carrying amounts of cash, other receivables, and accounts payable approximate fair value due to the short-term nature of these financial instruments. |
Financial Derivative Instrument
Financial Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Derivative Instruments | Financial Derivative Instruments The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in global fuel prices and foreign currencies. Fuel Risk Management The Company’s operations are inherently dependent upon the price and availability of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into derivative financial instruments. During the three months ended March 31, 2018 , the Company primarily used crude oil call options and jet fuel swaps to hedge its aircraft fuel expense. These derivative instruments were not designated as hedges under ASC Topic 815, Derivatives and Hedging (ASC 815), for hedge accounting treatment. As a result, any changes in fair value of these derivative instruments are adjusted through other nonoperating income (expense) in the period of change. The following table reflects the amount of realized and unrealized gains and losses recorded as nonoperating income (expense) in the Company's unaudited Consolidated Statements of Operations. Three months ended March 31, Fuel derivative contracts 2018 2017 (in thousands) Gains (losses) realized at settlement $ 5,661 $ 2,589 Reversal of prior period unrealized amounts (11,792 ) (7,947 ) Unrealized gains (losses) that will settle in future periods 10,748 (3,440 ) Gains (losses) on fuel derivatives recorded as nonoperating income (expense) $ 4,617 $ (8,798 ) Foreign Currency Exchange Rate Risk Management The Company is subject to foreign currency exchange rate risk due to revenues and expenses that are denominated in foreign currencies, with the primary exposures being the Japanese Yen and Australian Dollar. To manage exchange rate risk, the Company executes its international revenue and expense transactions in the same foreign currency to the extent practicable. The Company enters into foreign currency forward contracts to further manage the effects of fluctuating exchange rates. The effective portion of the gain or loss of designated cash flow hedges is reported as a component of accumulated other comprehensive income (AOCI) and reclassified into earnings in the same period in which the related sales are recognized as passenger revenue. The effective portion of the foreign currency forward contracts represents the change in fair value of the hedge that offsets the change in the fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized as nonoperating income (expense). Foreign currency forward contracts that are not designated as cash flow hedges are recorded at fair value, and any changes in fair value are recognized as other nonoperating income (expense) in the period of change. The Company believes that its foreign currency forward contracts that are designated as cash flow hedges will continue to be effective in offsetting changes in cash flow attributable to the hedged risk. The Company expects to reclassify a net loss of approximately $5.5 million into earnings over the next 12 months from AOCI based on the values at March 31, 2018 . The following tables present the gross fair value of asset and liability derivatives that are designated as hedging instruments under ASC 815 and derivatives that are not designated as hedging instruments under ASC 815, as well as the net derivative positions and location of the asset and liability balances within the Company's unaudited Consolidated Balance Sheets. Derivative position as of March 31, 2018 Balance Sheet Notional Amount Final Gross fair Gross fair Net (in thousands) (in thousands) Derivatives designated as hedges Foreign currency derivatives Other accrued liabilities 17,051,625 Japanese Yen March 2019 1,109 (6,095 ) (4,986 ) Other liabilities and deferred credits 4,666,550 Japanese Yen March 2020 74 (1,573 ) (1,499 ) Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 884,200 Japanese Yen June 2018 35 (162 ) (127 ) Fuel derivative contracts Prepaid expenses and other 95,508 gallons March 2019 19,664 (10 ) 19,654 Derivative position as of December 31, 2017 Balance Sheet Notional Amount Final Gross fair Gross fair Net (in thousands) (in thousands) Derivatives designated as hedges Foreign currency derivatives Prepaid expenses and other 16,732,375 Japanese Yen December 2018 3,737 (1,441 ) 2,296 Long-term prepayments and other 4,666,700 Japanese Yen December 2019 546 (195 ) 351 Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 866,150 Japanese Yen March 2018 17 (77 ) (60 ) Fuel derivative contracts Prepaid expenses and other 94,332 gallons December 2018 20,608 — 20,608 The following table reflects the impact of cash flow hedges designated for hedge accounting treatment and their location within the Company's unaudited Consolidated Statements of Comprehensive Income. (Gain) loss recognized in AOCI on derivatives (effective portion) (Gain) loss reclassified from AOCI (Gain) loss recognized in Three months ended March 31, Three months ended March 31, Three months ended March 31, 2018 2017 2018 2017 2018 2017 (in thousands) Foreign currency derivatives $ 10,809 $ 10,210 $ 1,221 $ (1,212 ) $ — $ — Risk and Collateral Financial derivative instruments expose the Company to possible credit loss in the event the counterparties fail to meet their obligations. To manage such credit risks, the Company (1) selects its counterparties based on past experience and credit ratings, (2) limits its exposure to any single counterparty, and (3) regularly monitors the market position and credit rating of each counterparty. Credit risk is deemed to have a minimal impact on the fair value of the derivative instruments, as cash collateral would be provided by the counterparties based on the current market exposure of the derivative. ASC 815 requires a reporting entity to elect a policy of whether to offset rights to reclaim cash collateral or obligations to return cash collateral against derivative assets and liabilities executed with the same counterparty under a master netting agreement, or present such amounts on a gross basis. The Company’s accounting policy is to present its derivative assets and liabilities on a net basis, including any collateral posted with the counterparty. The Company had no collateral posted with counterparties as of March 31, 2018 and December 31, 2017 . The Company is also subject to market risk in the event these financial instruments become less valuable in the market. However, changes in the fair value of the derivative instruments will generally offset the change in the fair value of the hedged item, limiting the Company’s overall exposure. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of March 31, 2018 , the expected maturities of long-term debt for the remainder of 2018 and the next four years, and thereafter, were as follows (in thousands): Remaining months in 2018 $ 30,231 2019 72,927 2020 21,413 2021 49,060 2022 56,856 Thereafter 184,573 $ 415,060 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Leases | Leases The Company leases aircraft, engines, and other assets under long-term lease arrangements. Other leased assets include real property, airport and terminal facilities, maintenance facilities, and general offices. Certain leases include escalation clauses and renewal options. When lease renewals are considered to be reasonably assured, the rental payments that will be due during the renewal periods are included in the determination of rent expense over the life of the lease. As of March 31, 2018 , the scheduled future minimum rental payments under operating leases with non-cancellable basic terms of more than one year were as follows: Aircraft Other (in thousands) Remaining in 2018 $ 80,443 $ 5,155 2019 98,327 6,584 2020 82,362 6,399 2021 66,259 6,509 2022 60,153 6,778 Thereafter 164,993 91,181 $ 552,537 $ 122,606 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The components of net periodic benefit cost for the Company’s defined benefit and other post-retirement plans included the following: Three months ended March 31, Components of Net Period Benefit Cost 2018 2017 (in thousands) Service cost $ 1,962 $ 3,813 Other cost: Interest cost 5,009 7,259 Expected return on plan assets (5,588 ) (4,796 ) Recognized net actuarial loss 680 2,287 Total other components of the net periodic benefit cost 101 4,750 Net periodic benefit cost $ 2,063 $ 8,563 Total other components of the net periodic benefit cost are recorded within the nonoperating income (expense), other, net line item. During the three months ended March 31, 2018 and 2017 , the Company contributed nil and $6.4 million , respectively to its defined benefit and other postretirement plans. The Company is not required to make any further minimum contributions until 2019 due to the sufficiency of the plans' current position. In August 2017, the Company completed the termination of the Merged Pension plan by transferring the assets and liabilities to a third-party insurance company. At that time, the Company contributed a total of $18.5 million in cash to fully fund the plan and recognized a one-time financial loss in the third quarter of 2017 of $35.2 million as an other nonoperating special item on the Company's Consolidated Statement of Operations. The Company no longer has any expected contributions to the Merged Plan due to the final settlement. In March 2017, the Company announced the ratification of a 63 -month contract amendment with its pilots as represented by the Air Line Pilots Association (ALPA). In connection with the ratification of the agreement, the parties agreed to eliminate the post-65 post-retirement medical benefit for all active pilots, and replace the benefit with a heath retirement account (HRA) managed by ALPA, which represented a curtailment and partial settlement of the pilots' other post-retirement benefit plan. In August 2017, the Company made a one-time cash payment of approximately $101.9 million to fund the HRA and settle the post-65 post-retirement medical plan obligation. The cash contributed was distributed to the trust funding the individual health retirement notional accounts of the participants. The Company recognized a one-time settlement loss of $10.4 million in the third quarter of 2017. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Commitments As of March 31, 2018 , the Company had the following capital commitments consisting of firm aircraft and engine orders and purchase rights: Aircraft Type Firm Orders Purchase Rights Expected Delivery Dates A321neo aircraft 14 9 Between 2018 and 2020 Pratt & Whitney spare engines: A321neo spare engines 3 2 Between 2018 and 2019 In February 2018, the Company exercised its right to terminate its aircraft purchase agreement between the Company and Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. Refer to Note 13 below for discussion on the contract termination charge. The Company executed a non-binding letter of intent (LOI) for the purchase of 10 Boeing 787-9 "Dreamliner" aircraft with purchase rights for an additional 10 aircraft. The Company selected the General Electric GEnx engine to power the additions to its fleet. The expected expenditures for the Boeing 787-9 aircraft and engines are not reflected in the below table. Committed capital and operating expenditures include escalation amounts based on estimates. The gross committed expenditures and committed payments for those deliveries as of March 31, 2018 are detailed below: Capital Operating Total Committed (in thousands) Remaining in 2018 $ 354,102 $ 55,960 $ 410,062 2019 277,757 61,858 339,615 2020 51,911 56,484 108,395 2021 10,113 51,738 61,851 2022 10,113 51,930 62,043 Thereafter 75,431 216,077 291,508 $ 779,427 $ 494,047 $ 1,273,474 Litigation and Contingencies The Company is subject to legal proceedings arising in the normal course of its operations. Management does not anticipate that the disposition of any currently pending proceeding will have a material effect on the Company’s operations, business or financial condition. General Guarantees and Indemnifications In the normal course of business, the Company enters into numerous aircraft financing and real estate leasing arrangements that have various guarantees included in such contracts. It is common in such lease transactions for the lessee to agree to indemnify the lessor and other related third-parties for tort liabilities that arise out of, or relate to, the lessee’s use of the leased aircraft or occupancy of the leased premises. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by such parties' gross negligence or willful misconduct. Additionally, the lessee typically indemnifies such parties for any environmental liability that arises out of or relates to the lessee's use of the real estate leased premises. The Company believes that it is insured (subject to deductibles) for most of the tort liabilities and related indemnities described above with respect to the aircraft and real estate that it leases. The Company cannot reasonably estimate the potential amount of future payments, if any, under the foregoing indemnities and agreements. Credit Card Holdback Under the Company’s bank-issued credit card processing agreements, certain proceeds from advance ticket sales may be held back to serve as collateral to cover any possible chargebacks or other disputed charges that may occur. These holdbacks, which are included in restricted cash in the Company’s unaudited Consolidated Balance Sheets, totaled $1.0 million at each of March 31, 2018 and December 31, 2017 . In the event of a material adverse change in the Company's business, the holdback could increase to an amount up to 100% of the outstanding credit card amounts that is unflown (e.g. air traffic liability), which would also cause an increase in the level of restricted cash. If the Company is unable to obtain a waiver of, or otherwise mitigate the increase in the restriction of cash, it could have a material adverse impact on the Company's operations, business or financial condition. |
Contract Terminations Expense a
Contract Terminations Expense and Special Items | 3 Months Ended |
Mar. 31, 2018 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Contract Terminations Expense and Special Items | Contract Terminations Expense and Special Items Contract terminations expense For the three months ended March 31, 2018 , the Company terminated two contracts which incurred a total of $35.3 million in contract terminations expense. The transactions are described below: In February 2018, the Company exercised its right to terminate the aircraft purchase agreement between the Company and Airbus for six Airbus A330-800neo aircraft and the purchase rights for an additional six Airbus A330-800neo aircraft. To terminate the purchase agreement, the Company was obligated to repay Airbus for concessions received relating to a prior firm order, training credits, as well as forfeit the pre-delivery progress payments made towards the flight equipment. The Company recorded a contract termination expense to reflect a portion of the termination penalty within the Consolidated Statements of Operations. In January 2018, the Company entered into a transaction with its lessor to early terminate and purchase three Boeing 767-300 aircraft leases and concurrently entered into a forward sale agreement for the same three Boeing 767-300 aircraft, including two Pratt & Whitney 4060 engines for each aircraft. These aircraft were previously accounted for as operating leases. In order to exit the lease and purchase the aircraft, the Company agreed to pay a total of $67.1 million (net of all deposits) of which a portion was expensed immediately and recognized as a contract termination fee. The expensed amount represents the total purchase price amount over fair value of the aircraft purchased as of the date of the transaction. Special items In March 2017, the Company received notice from ALPA that the agreement was ratified by ALPA's members. The agreement became effective April 1, 2017. The agreement included, among other various benefits, a pay adjustment and ratification bonus computed based on previous service. During the three months ended March 31, 2017 , the Company expensed $18.7 million principally related to a one-time payment to reduce the Company's future 401K employer contribution for certain pilot groups, which was not recoverable once paid. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three months ended March 31, 2018 and 2017 was 23.1% and 27.2% , respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible items. The effective tax rate for the three months ended March 31, 2018 also reflects the reduced federal corporate income tax rate as a result of the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017. The ultimate impact may differ from these provisional amounts related to 2017, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Act. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed later in 2018. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information The following condensed consolidating financial information is presented in accordance with Regulation S-X paragraph 210.3-10 because, in connection with the issuance by two pass-through trusts formed by Hawaiian (which is also referred to in this Note 15 as Subsidiary Issuer / Guarantor) of pass-through certificates, the Company (which is also referred to in this Note 15 as Parent Issuer / Guarantor) is fully and unconditionally guaranteeing the payment obligations of Hawaiian, which is a 100% owned subsidiary of the Company, under equipment notes issued by Hawaiian to purchase new aircraft. The Company's condensed consolidating financial statements are presented in the following tables: Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended March 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 663,412 $ 2,127 $ (127 ) $ 665,412 Operating Expenses: Wages and benefits — 168,709 — — 168,709 Aircraft fuel, including taxes and delivery — 133,446 — — 133,446 Maintenance materials and repairs — 57,494 647 — 58,141 Aircraft and passenger servicing — 36,518 — — 36,518 Commissions and other selling (5 ) 31,958 20 (48 ) 31,925 Aircraft rent — 31,900 — — 31,900 Other rentals and landing fees — 30,815 — — 30,815 Depreciation and amortization — 31,275 970 — 32,245 Purchased services 90 30,868 178 (15 ) 31,121 Contract termination expenses — 35,322 — — 35,322 Other 1,581 37,123 365 (64 ) 39,005 Total 1,666 625,428 2,180 (127 ) 629,147 Operating Income (Loss) (1,666 ) 37,984 (53 ) — 36,265 Nonoperating Income (Expense): Undistributed net income of subsidiaries 29,810 — — (29,810 ) — Interest expense and amortization of debt discounts and issuance costs — (8,555 ) — — (8,555 ) Interest income 65 1,409 — — 1,474 Capitalized interest — 2,238 — — 2,238 Gains on fuel derivatives — 4,617 — — 4,617 Other, net (4 ) 1,055 5 — 1,056 Total 29,871 764 5 (29,810 ) 830 Income (Loss) Before Income Taxes 28,205 38,748 (48 ) (29,810 ) 37,095 Income tax expense (benefit) (337 ) 8,900 (10 ) — 8,553 Net Income (Loss) $ 28,542 $ 29,848 $ (38 ) $ (29,810 ) $ 28,542 Comprehensive Income (Loss) $ 21,351 $ 22,657 $ (38 ) $ (22,619 ) $ 21,351 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended March 31, 2017 (a) Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 604,567 $ 1,746 $ (104 ) $ 606,209 Operating Expenses: Aircraft fuel, including taxes and delivery — 103,538 — — 103,538 Wages and benefits — 151,053 — — 151,053 Aircraft rent — 33,135 — — 33,135 Maintenance materials and repairs — 57,293 2,111 — 59,404 Aircraft and passenger servicing — 34,290 — — 34,290 Commissions and other selling 6 29,663 19 (46 ) 29,642 Depreciation and amortization — 26,517 951 — 27,468 Other rentals and landing fees — 28,336 — — 28,336 Purchased services 106 26,354 192 (15 ) 26,637 Special items — 18,679 — — 18,679 Other 1,152 30,453 435 (43 ) 31,997 Total 1,264 539,311 3,708 (104 ) 544,179 Operating Income (Loss) (1,264 ) 65,256 (1,962 ) — 62,030 Nonoperating Income (Expense): Undistributed net income of subsidiaries 34,373 — — (34,373 ) — Interest expense and amortization of debt discounts and issuance costs — (8,003 ) — — (8,003 ) Other components of net periodic pension cost — — — — — Interest income 70 1,082 — — 1,152 Capitalized interest — 1,760 — — 1,760 Losses on fuel derivatives — (8,798 ) — — (8,798 ) Loss on extinguishment of debt — — — — — Other, net — (1,924 ) — — (1,924 ) Total 34,443 (15,883 ) — (34,373 ) (15,813 ) Income (Loss) Before Income Taxes 33,179 49,373 (1,962 ) (34,373 ) 46,217 Income tax expense (benefit) (466 ) 13,725 (687 ) — 12,572 Net Income (Loss) $ 33,645 $ 35,648 $ (1,275 ) $ (34,373 ) $ 33,645 Comprehensive Income (Loss) $ 28,102 $ 30,105 $ (1,275 ) $ (28,830 ) $ 28,102 (a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. Condensed Consolidating Balance Sheets March 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 29,662 $ 242,097 $ 7,426 $ — $ 279,185 Restricted cash — 1,000 — — 1,000 Short-term investments — 244,948 — — 244,948 Accounts receivable, net 27 106,540 447 (290 ) 106,724 Spare parts and supplies, net — 30,815 — — 30,815 Prepaid expenses and other 230 82,950 224 — 83,404 Total 29,919 708,350 8,097 (290 ) 746,076 Property and equipment at cost — 2,420,899 82,902 — 2,503,801 Less accumulated depreciation and amortization — (573,197 ) (12,569 ) — (585,766 ) Property and equipment, net — 1,847,702 70,333 — 1,918,035 Long-term prepayments and other — 188,561 181 — 188,742 Deferred tax assets, net 32,192 — — (32,192 ) — Goodwill and other intangible assets, net — 120,551 1,040 — 121,591 Intercompany receivable — 402,254 — (402,254 ) — Investment in consolidated subsidiaries 1,168,152 — — (1,168,152 ) — TOTAL ASSETS $ 1,230,263 $ 3,267,418 $ 79,651 $ (1,602,888 ) $ 2,974,444 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,103 $ 135,123 $ 1,780 $ (290 ) $ 137,716 Air traffic liability — 694,645 4,304 — 698,949 Other accrued liabilities — 126,473 227 — 126,700 Current maturities of long-term debt, less discount, and capital lease obligations — 59,002 — — 59,002 Total 1,103 1,015,243 6,311 (290 ) 1,022,367 Long-term debt and capital lease obligations — 498,748 — — 498,748 Intercompany payable 390,946 — 11,308 (402,254 ) — Other liabilities and deferred credits: =sum(C32:I32) Accumulated pension and other post-retirement benefit obligations — 217,812 — — 217,812 Other liabilities and deferred credits — 264,310 1,112 — 265,422 Deferred tax liabilities, net — 164,073 — (32,192 ) 131,881 Total — 646,195 1,112 (32,192 ) 615,115 Shareholders’ equity 838,214 1,107,232 60,920 (1,168,152 ) 838,214 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,230,263 $ 3,267,418 $ 79,651 $ (1,602,888 ) $ 2,974,444 Condensed Consolidating Balance Sheets December 31, 2017 (a) Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 57,405 $ 125,861 $ 7,687 $ — $ 190,953 Restricted cash — 1,000 — — 1,000 Short-term investments — 269,297 — — 269,297 Accounts receivable, net 25 139,008 1,455 (209 ) 140,279 Spare parts and supplies, net — 35,361 — — 35,361 Prepaid expenses and other 171 78,933 82 — 79,186 Total 57,601 649,460 9,224 (209 ) 716,076 Property and equipment at cost — 2,326,249 74,562 — 2,400,811 Less accumulated depreciation and amortization — (546,831 ) (11,717 ) — (558,548 ) Property and equipment, net — 1,779,418 62,845 — 1,842,263 Long-term prepayments and other — 193,449 183 — 193,632 Deferred tax assets, net 31,845 — — (31,845 ) — Goodwill and other intangible assets, net — 120,695 1,155 — 121,850 Intercompany receivable — 392,791 — (392,791 ) — Investment in consolidated subsidiaries 1,137,941 — — (1,137,941 ) — TOTAL ASSETS $ 1,227,387 $ 3,135,813 $ 73,407 $ (1,562,786 ) $ 2,873,821 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 622 $ 138,818 $ 1,574 $ (209 ) $ 140,805 Air traffic liability — 584,366 4,727 — 589,093 Other accrued liabilities 32 147,211 350 — 147,593 Current maturities of long-term debt, less discount, and capital lease obligations — 59,470 — — 59,470 Total 654 929,865 6,651 (209 ) 936,961 Long-term debt and capital lease obligations — 511,201 — — 511,201 Intercompany payable 381,608 — 11,183 (392,791 ) — Other liabilities and deferred credits: 0 Accumulated pension and other post-retirement benefit obligations — 220,788 — — 220,788 Other liabilities and deferred credits — 224,500 1,105 — 225,605 Deferred tax liabilities, net — 165,986 — (31,845 ) 134,141 Total — 611,274 1,105 (31,845 ) 580,534 Shareholders’ equity 845,125 1,083,473 54,468 (1,137,941 ) 845,125 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,227,387 $ 3,135,813 $ 73,407 $ (1,562,786 ) $ 2,873,821 (a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2018 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (931 ) $ 224,935 $ 1,541 $ — $ 225,545 Cash Flows From Investing Activities: Net payments to affiliates (6,500 ) (6,000 ) — 12,500 — Additions to property and equipment, including pre-delivery deposits — (102,595 ) (8,302 ) — (110,897 ) Purchases of investments — (30,386 ) — — (30,386 ) Sales of investments — 53,984 — — 53,984 Net cash used in investing activities (6,500 ) (84,997 ) (8,302 ) 12,500 (87,299 ) Cash Flows From Financing Activities: Repayments of long-term debt and capital lease obligations — (20,395 ) — — (20,395 ) Dividend payments (6,145 ) — — — (6,145 ) Net payments from affiliates 6,000 — 6,500 (12,500 ) — Repurchases of common stock (20,245 ) — — — (20,245 ) Other 78 (3,307 ) — — (3,229 ) Net cash provided by (used in) financing activities (20,312 ) (23,702 ) 6,500 (12,500 ) (50,014 ) Net increase (decrease) in cash and cash equivalents (27,743 ) 116,236 (261 ) — 88,232 Cash, cash equivalents, & restricted cash - Beginning of Period 57,405 126,861 7,687 — 191,953 Cash, cash equivalents, & restricted cash - End of Period $ 29,662 $ 243,097 $ 7,426 $ — $ 280,185 Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2017 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (1,102 ) $ 210,250 $ (199 ) $ — $ 208,949 Cash Flows From Investing Activities: Net payments to affiliates — (1,495 ) — 1,495 — Additions to property and equipment, including pre-delivery deposits — (52,266 ) (864 ) — (53,130 ) Purchases of investments — (68,155 ) — — (68,155 ) Sales of investments — 78,301 — — 78,301 Net cash used in investing activities — (43,615 ) (864 ) 1,495 (42,984 ) Cash Flows From Financing Activities: Repayments of long-term debt and capital lease obligations — (21,872 ) — — (21,872 ) Net payments from affiliates 1,495 — — (1,495 ) — Other 48 (7,343 ) — — (7,295 ) Net cash provided by (used in) financing activities 1,543 (29,215 ) — (1,495 ) (29,167 ) Net increase (decrease) in cash and cash equivalents 441 137,420 (1,063 ) — 136,798 Cash, cash equivalents, & restricted cash - Beginning of Period 67,629 254,985 8,377 — 330,991 Cash, cash equivalents, & restricted cash - End of Period $ 68,070 $ 392,405 $ 7,314 $ — $ 467,789 Income Taxes The income tax expense (benefit) is presented as if each entity that is part of the consolidated group files a separate return. |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements; Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, and created Topic 606 (ASC 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaced most existing revenue recognition guidance in GAAP and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company elected to adopt the full retrospective transition method as of January 1, 2018, resulting in the restatement of the prior periods as of the date of adoption. The overall decrease in equity as of January 1, 2016 was $76.0 million net of tax, with an offsetting change primarily in Other liabilities and deferred credits. Refer to Note 5 for additional revenue recognition discussion. The most significant impact of the standard relates to the accounting for the Company's frequent flyer travel award program. This change, as well as other less significant changes, are described below: • Frequent flyer - The standard requires the Company to account for miles earned by passengers in the HawaiianMiles program through flight activity as a component of the passenger revenue ticket transaction at the estimated selling price of the miles, effectively eliminating the incremental cost accounting previously applied. ASC 606 resulted in a significant increase to the deferred revenue liability on the Company's balance sheet, as the estimated selling price of the miles significantly exceeds the value previously recorded for incremental cost. The allocated value of miles earned through flights and sold to partners is recognized at the time the free travel or other award is redeemed by the passenger. Previously, the transportation element associated with sold miles was deferred and recognized as passenger revenue over the period when the transportation was expected to be provided ( 23 months). • Passenger revenue - The standard requires the Company to make certain adjustments to its passenger revenue, most notably related to unused tickets, which represents unexercised passenger rights. The Company uses historical information to estimate the proportion of ticket revenue that will expire unused to be recognized at the scheduled flight date. Prior to the adoption of ASC 606, the Company recorded this revenue as the tickets expired unused. As of the adoption date the adjustment due to passenger ticket expiration had the effect of reducing the air traffic liability but did not have a significant effect on revenue recognized. Ticket change fees were previously recognized at the time the fees were assessed; however, under ASC 606, the Company now defers the recognition of ticket change fees as a component of air traffic liability until the related transportation is provided. Further, the Company reclassified revenue items such as checked baggage, charter, ticket change and cancellation fees, in flight revenue, and other incidental sales to passenger revenue (from other operating revenue), as these items do not represent distinct performance obligations separate from the transportation provided to the passenger. • Selling Costs - Under ASC 606, the Company will capitalize selling costs associated with credit card fees, booking fees, and commissions, and recognize the associated expense at the ticketed flight date. Prior to ASC 606, the Company recognized the costs associated with credit card and booking fees as they were incurred. Restated financial statement information, which reflects the adoption of the ASC 606 is below: Three Months Ended March 31, 2017 As Reported Adjustments As Restated (in thousands) Operating Revenue: Passenger $ 537,590 $ 26,162 $ 563,752 Other 76,595 (34,138 ) 42,457 Total $ 614,185 $ (7,976 ) $ 606,209 Operating Expenses 546,891 (2,712 ) 544,179 Operating Income 67,294 (5,264 ) 62,030 Nonoperating Income (Expense) (15,813 ) — (15,813 ) Income tax expense 14,570 (1,998 ) 12,572 Net Income $ 36,911 $ (3,266 ) $ 33,645 Net Income Per Common Stock Share: Basic $ 0.69 $ (0.06 ) $ 0.63 Diluted $ 0.68 $ (0.06 ) $ 0.62 Select consolidated balance sheet line items, which reflect the adoption of the new standard are as follows: December 31, 2017 Balance Sheet As Reported Adjustments As Restated (in thousands) ASSETS Prepaid expenses and other $ 65,196 $ 13,990 $ 79,186 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Air traffic liability 545,362 43,731 589,093 Other accrued liabilities 146,283 1,310 147,593 Noncurrent Liabilities: Other liabilities and deferred credits 95,636 129,969 225,605 Deferred tax liability 174,344 (40,203 ) 134,141 Shareholders' Equity: Accumulated income 913,951 (120,817 ) 793,134 There was no impact to the Company's net cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Recently Issued Accounting Pronouncements In February 2018, the FASB issued 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). The guidance allows reclassification from accumulated other comprehensive income to retained earnings of stranded taxes resulting from the Tax Cuts and Jobs Act. In addition, under ASU 2018-02, certain disclosures regarding stranded tax effects are required. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company continues to evaluate the impact of ASU 2018-02 and the potential effects on the Company's consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (ASU 2017-02), which better aligns a company's risk management activities and financial reporting for hedging relationships and is intended to simplify hedge accounting requirements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company continues to evaluate the components and options within ASU 2017-12. In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02), requiring a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements and believes this ASU will have a significant impact on its consolidated balance sheet but does not expect that the ASU will have a material impact on the Company's results of operations or cash flows. The effect of adopting the new standard will be to record right-of-use assets and operating lease obligations for current operating leases on the Company's balance sheet. See Note 10 below which discusses our lease obligations as of March 31, 2018 . In November 2017, the FASB directed the staff to draft a proposed ASU that would provide transition relief allowing entities to continue to apply the guidance in ASC 840, Leases including its disclosure requirements, in the comparative periods presented in the year that a company adopts ASU 2016-02 (ASC 842). Entities that elect this option will record the cumulative effect of adoption on the effective date rather than at the beginning of the earliest comparative period presented. The Company is awaiting the finalized pronouncement. |
Significant Accounting Polici24
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of recast unaudited financial information reflecting ASC 606 | Restated financial statement information, which reflects the adoption of the ASC 606 is below: Three Months Ended March 31, 2017 As Reported Adjustments As Restated (in thousands) Operating Revenue: Passenger $ 537,590 $ 26,162 $ 563,752 Other 76,595 (34,138 ) 42,457 Total $ 614,185 $ (7,976 ) $ 606,209 Operating Expenses 546,891 (2,712 ) 544,179 Operating Income 67,294 (5,264 ) 62,030 Nonoperating Income (Expense) (15,813 ) — (15,813 ) Income tax expense 14,570 (1,998 ) 12,572 Net Income $ 36,911 $ (3,266 ) $ 33,645 Net Income Per Common Stock Share: Basic $ 0.69 $ (0.06 ) $ 0.63 Diluted $ 0.68 $ (0.06 ) $ 0.62 Select consolidated balance sheet line items, which reflect the adoption of the new standard are as follows: December 31, 2017 Balance Sheet As Reported Adjustments As Restated (in thousands) ASSETS Prepaid expenses and other $ 65,196 $ 13,990 $ 79,186 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Air traffic liability 545,362 43,731 589,093 Other accrued liabilities 146,283 1,310 147,593 Noncurrent Liabilities: Other liabilities and deferred credits 95,636 129,969 225,605 Deferred tax liability 174,344 (40,203 ) 134,141 Shareholders' Equity: Accumulated income 913,951 (120,817 ) 793,134 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Reclassifications by component | Reclassifications out of accumulated other comprehensive income (loss) by component are as follows: Details about accumulated other comprehensive (income) loss components Three months ended March 31, Affected line items in the statement where net income is presented 2018 2017 (in thousands) Derivatives designated as hedging instruments under ASC 815 Foreign currency derivative losses (gains) $ 1,221 $ (1,212 ) Passenger revenue Total before tax 1,221 (1,212 ) Tax expense (benefit) (299 ) 459 Total, net of tax $ 922 $ (753 ) Amortization of defined benefit plan items Actuarial loss $ 624 $ 2,228 Nonoperating Income (Expense), Other, net Prior service cost 56 60 Nonoperating Income (Expense), Other, net Total before tax 680 2,288 Tax benefit (167 ) (867 ) Total, net of tax $ 513 $ 1,421 Short-term investments Realized losses (gain) on sales of investments, net $ 5 $ (8 ) Nonoperating Income (Expense), Other, net Total before tax 5 (8 ) Tax expense (benefit) (1 ) 3 Total, net of tax $ 4 $ (5 ) Total reclassifications for the period $ 1,439 $ 663 |
Schedule of amounts included in accumulated other comprehensive income (loss), net of taxes | A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes, for the three months ended March 31, 2018 and 2017 is as follows: Three months ended March 31, 2018 Foreign Currency Derivatives Defined Benefit Short-Term Investments Total (in thousands) Beginning balance $ 1,249 $ (75,953 ) $ (560 ) $ (75,264 ) Other comprehensive loss before reclassifications, net of tax (8,166 ) — (464 ) (8,630 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 922 513 4 1,439 Net current-period other comprehensive income (loss) (7,244 ) 513 (460 ) (7,191 ) Ending balance $ (5,995 ) $ (75,440 ) $ (1,020 ) $ (82,455 ) Three months ended March 31, 2017 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance $ 7,071 $ (110,202 ) $ (362 ) $ (103,493 ) Other comprehensive income (loss) before reclassifications, net of tax (6,344 ) 47 91 (6,206 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (753 ) 1,421 (5 ) 663 Net current-period other comprehensive income (loss) (7,097 ) 1,468 86 (5,543 ) Ending balance $ (26 ) $ (108,734 ) $ (276 ) $ (109,036 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share basic and diluted | Three Months Ended March 31, 2018 2017 (in thousands, except for per share data) Numerator: Net Income $ 28,542 $ 33,645 Denominator: Weighted average common stock shares outstanding - Basic 51,055 53,562 Assumed exercise of stock options and awards 144 418 Weighted average common stock shares outstanding - Diluted 51,199 53,980 Net Income Per Share Basic $ 0.56 $ 0.63 Diluted $ 0.56 $ 0.62 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | These amounts are recognized when the service is provided. Three months ended, March 31, 2018 2017 Passenger Revenue by Type (in thousands) Passenger revenue, excluding frequent flyer $ 577,955 $ 534,054 Frequent flyer revenue, transportation component 33,645 29,698 Passenger Revenue $ 611,600 $ 563,752 Other revenue (e.g. cargo and other miscellaneous) $ 38,690 $ 32,141 Frequent flyer revenue, marketing and brand component 15,122 10,316 Other Revenue $ 53,812 $ 42,457 The Company's operating revenues by geographic region (as defined by the Department of Transportation) are summarized below: Three months ended, March 31, 2018 2017 Geographic Information (in thousands) Domestic $ 492,202 $ 450,797 Pacific 173,210 155,412 Total operating revenue $ 665,412 $ 606,209 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of short-term investments | The following is a summary of short-term investments held as of March 31, 2018 and December 31, 2017 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2018 (in thousands) Corporate debt $ 141,097 $ 4 $ (1,080 ) $ 140,021 U.S. government and agency debt 53,462 1 (237 ) 53,226 Municipal bonds 19,628 — (84 ) 19,544 Other fixed income securities 32,227 — (70 ) 32,157 Total short-term investments $ 246,414 $ 5 $ (1,471 ) $ 244,948 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2017 (in thousands) Corporate debt $ 165,610 $ 8 $ (535 ) $ 165,083 U.S. government and agency debt 59,054 1 (215 ) 58,840 Municipal bonds 21,517 — (104 ) 21,413 Other fixed income securities 23,973 1 (13 ) 23,961 Total short-term investments $ 270,154 $ 10 $ (867 ) $ 269,297 |
Schedule of contractual maturities of short-term investments | Contractual maturities of short-term investments as of March 31, 2018 are shown below. Under 1 Year 1 to 5 Years Total (in thousands) Corporate debt $ 68,515 $ 71,506 $ 140,021 U.S. government and agency debt 43,156 10,070 53,226 Municipal bonds 10,486 9,058 19,544 Other fixed income securities 25,200 6,957 32,157 Total short-term investments $ 147,357 $ 97,591 $ 244,948 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value on a recurring basis | The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis: Fair Value Measurements as of March 31, 2018 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 176,125 $ 135,323 $ 40,802 $ — Restricted cash 1,000 1,000 — — Short-term investments 244,948 — 244,948 — Fuel derivative contracts: Crude oil call options 19,551 — 19,551 — Jet fuel swaps 113 — 113 — Foreign currency derivatives 1,218 — 1,218 — Total assets measured at fair value $ 442,955 $ 136,323 $ 306,632 $ — Fuel derivative contracts: Jet fuel swaps $ 10 $ — $ 10 $ — Foreign currency derivatives 7,830 — 7,830 — Total liabilities measured at fair value $ 7,840 $ — $ 7,840 $ — Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 62,310 $ 27,807 $ 34,503 $ — Restricted cash 1,000 1,000 — — Short-term investments 269,297 — 269,297 — Fuel derivative contracts: Crude oil call options 20,272 — 20,272 — Jet fuel swaps 336 — 336 — Foreign currency derivatives 4,300 — 4,300 — Total assets measured at fair value $ 357,515 $ 28,807 $ 328,708 $ — Foreign currency derivatives 1,713 — 1,713 — Total liabilities measured at fair value $ 1,713 $ — $ 1,713 $ — |
Schedule of debt (excluding obligations under capital leases) measured at fair value | The table below presents the Company’s debt (excluding obligations under capital leases and financing obligations) measured at fair value: Fair Value of Debt March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Amount Total Level 1 Level 2 Level 3 (in thousands) $ 415,059 $ 418,825 $ — $ — $ 418,825 $ 433,072 $ 444,099 $ — $ — $ 444,099 |
Financial Derivative Instrume30
Financial Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of realized and unrealized gains and losses recorded as nonoperating income (expense) | The following table reflects the amount of realized and unrealized gains and losses recorded as nonoperating income (expense) in the Company's unaudited Consolidated Statements of Operations. Three months ended March 31, Fuel derivative contracts 2018 2017 (in thousands) Gains (losses) realized at settlement $ 5,661 $ 2,589 Reversal of prior period unrealized amounts (11,792 ) (7,947 ) Unrealized gains (losses) that will settle in future periods 10,748 (3,440 ) Gains (losses) on fuel derivatives recorded as nonoperating income (expense) $ 4,617 $ (8,798 ) |
Schedule of fair value of the asset and liability derivatives and net derivative position recorded | The following tables present the gross fair value of asset and liability derivatives that are designated as hedging instruments under ASC 815 and derivatives that are not designated as hedging instruments under ASC 815, as well as the net derivative positions and location of the asset and liability balances within the Company's unaudited Consolidated Balance Sheets. Derivative position as of March 31, 2018 Balance Sheet Notional Amount Final Gross fair Gross fair Net (in thousands) (in thousands) Derivatives designated as hedges Foreign currency derivatives Other accrued liabilities 17,051,625 Japanese Yen March 2019 1,109 (6,095 ) (4,986 ) Other liabilities and deferred credits 4,666,550 Japanese Yen March 2020 74 (1,573 ) (1,499 ) Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 884,200 Japanese Yen June 2018 35 (162 ) (127 ) Fuel derivative contracts Prepaid expenses and other 95,508 gallons March 2019 19,664 (10 ) 19,654 Derivative position as of December 31, 2017 Balance Sheet Notional Amount Final Gross fair Gross fair Net (in thousands) (in thousands) Derivatives designated as hedges Foreign currency derivatives Prepaid expenses and other 16,732,375 Japanese Yen December 2018 3,737 (1,441 ) 2,296 Long-term prepayments and other 4,666,700 Japanese Yen December 2019 546 (195 ) 351 Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 866,150 Japanese Yen March 2018 17 (77 ) (60 ) Fuel derivative contracts Prepaid expenses and other 94,332 gallons December 2018 20,608 — 20,608 |
Schedule of realized and unrealized gains and losses of derivatives designated as cash flow hedges | The following table reflects the impact of cash flow hedges designated for hedge accounting treatment and their location within the Company's unaudited Consolidated Statements of Comprehensive Income. (Gain) loss recognized in AOCI on derivatives (effective portion) (Gain) loss reclassified from AOCI (Gain) loss recognized in Three months ended March 31, Three months ended March 31, Three months ended March 31, 2018 2017 2018 2017 2018 2017 (in thousands) Foreign currency derivatives $ 10,809 $ 10,210 $ 1,221 $ (1,212 ) $ — $ — |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of expected maturities of long-term debt | As of March 31, 2018 , the expected maturities of long-term debt for the remainder of 2018 and the next four years, and thereafter, were as follows (in thousands): Remaining months in 2018 $ 30,231 2019 72,927 2020 21,413 2021 49,060 2022 56,856 Thereafter 184,573 $ 415,060 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Schedule of operating leases | As of March 31, 2018 , the scheduled future minimum rental payments under operating leases with non-cancellable basic terms of more than one year were as follows: Aircraft Other (in thousands) Remaining in 2018 $ 80,443 $ 5,155 2019 98,327 6,584 2020 82,362 6,399 2021 66,259 6,509 2022 60,153 6,778 Thereafter 164,993 91,181 $ 552,537 $ 122,606 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic benefit cost | The components of net periodic benefit cost for the Company’s defined benefit and other post-retirement plans included the following: Three months ended March 31, Components of Net Period Benefit Cost 2018 2017 (in thousands) Service cost $ 1,962 $ 3,813 Other cost: Interest cost 5,009 7,259 Expected return on plan assets (5,588 ) (4,796 ) Recognized net actuarial loss 680 2,287 Total other components of the net periodic benefit cost 101 4,750 Net periodic benefit cost $ 2,063 $ 8,563 |
Commitments and Contingent Li34
Commitments and Contingent Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of firm aircraft and engine orders | As of March 31, 2018 , the Company had the following capital commitments consisting of firm aircraft and engine orders and purchase rights: Aircraft Type Firm Orders Purchase Rights Expected Delivery Dates A321neo aircraft 14 9 Between 2018 and 2020 Pratt & Whitney spare engines: A321neo spare engines 3 2 Between 2018 and 2019 |
Schedule of committed capital and operating expenditures | The gross committed expenditures and committed payments for those deliveries as of March 31, 2018 are detailed below: Capital Operating Total Committed (in thousands) Remaining in 2018 $ 354,102 $ 55,960 $ 410,062 2019 277,757 61,858 339,615 2020 51,911 56,484 108,395 2021 10,113 51,738 61,851 2022 10,113 51,930 62,043 Thereafter 75,431 216,077 291,508 $ 779,427 $ 494,047 $ 1,273,474 |
Condensed Consolidating Finan35
Condensed Consolidating Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended March 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 663,412 $ 2,127 $ (127 ) $ 665,412 Operating Expenses: Wages and benefits — 168,709 — — 168,709 Aircraft fuel, including taxes and delivery — 133,446 — — 133,446 Maintenance materials and repairs — 57,494 647 — 58,141 Aircraft and passenger servicing — 36,518 — — 36,518 Commissions and other selling (5 ) 31,958 20 (48 ) 31,925 Aircraft rent — 31,900 — — 31,900 Other rentals and landing fees — 30,815 — — 30,815 Depreciation and amortization — 31,275 970 — 32,245 Purchased services 90 30,868 178 (15 ) 31,121 Contract termination expenses — 35,322 — — 35,322 Other 1,581 37,123 365 (64 ) 39,005 Total 1,666 625,428 2,180 (127 ) 629,147 Operating Income (Loss) (1,666 ) 37,984 (53 ) — 36,265 Nonoperating Income (Expense): Undistributed net income of subsidiaries 29,810 — — (29,810 ) — Interest expense and amortization of debt discounts and issuance costs — (8,555 ) — — (8,555 ) Interest income 65 1,409 — — 1,474 Capitalized interest — 2,238 — — 2,238 Gains on fuel derivatives — 4,617 — — 4,617 Other, net (4 ) 1,055 5 — 1,056 Total 29,871 764 5 (29,810 ) 830 Income (Loss) Before Income Taxes 28,205 38,748 (48 ) (29,810 ) 37,095 Income tax expense (benefit) (337 ) 8,900 (10 ) — 8,553 Net Income (Loss) $ 28,542 $ 29,848 $ (38 ) $ (29,810 ) $ 28,542 Comprehensive Income (Loss) $ 21,351 $ 22,657 $ (38 ) $ (22,619 ) $ 21,351 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended March 31, 2017 (a) Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 604,567 $ 1,746 $ (104 ) $ 606,209 Operating Expenses: Aircraft fuel, including taxes and delivery — 103,538 — — 103,538 Wages and benefits — 151,053 — — 151,053 Aircraft rent — 33,135 — — 33,135 Maintenance materials and repairs — 57,293 2,111 — 59,404 Aircraft and passenger servicing — 34,290 — — 34,290 Commissions and other selling 6 29,663 19 (46 ) 29,642 Depreciation and amortization — 26,517 951 — 27,468 Other rentals and landing fees — 28,336 — — 28,336 Purchased services 106 26,354 192 (15 ) 26,637 Special items — 18,679 — — 18,679 Other 1,152 30,453 435 (43 ) 31,997 Total 1,264 539,311 3,708 (104 ) 544,179 Operating Income (Loss) (1,264 ) 65,256 (1,962 ) — 62,030 Nonoperating Income (Expense): Undistributed net income of subsidiaries 34,373 — — (34,373 ) — Interest expense and amortization of debt discounts and issuance costs — (8,003 ) — — (8,003 ) Other components of net periodic pension cost — — — — — Interest income 70 1,082 — — 1,152 Capitalized interest — 1,760 — — 1,760 Losses on fuel derivatives — (8,798 ) — — (8,798 ) Loss on extinguishment of debt — — — — — Other, net — (1,924 ) — — (1,924 ) Total 34,443 (15,883 ) — (34,373 ) (15,813 ) Income (Loss) Before Income Taxes 33,179 49,373 (1,962 ) (34,373 ) 46,217 Income tax expense (benefit) (466 ) 13,725 (687 ) — 12,572 Net Income (Loss) $ 33,645 $ 35,648 $ (1,275 ) $ (34,373 ) $ 33,645 Comprehensive Income (Loss) $ 28,102 $ 30,105 $ (1,275 ) $ (28,830 ) $ 28,102 (a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Schedule of Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets March 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 29,662 $ 242,097 $ 7,426 $ — $ 279,185 Restricted cash — 1,000 — — 1,000 Short-term investments — 244,948 — — 244,948 Accounts receivable, net 27 106,540 447 (290 ) 106,724 Spare parts and supplies, net — 30,815 — — 30,815 Prepaid expenses and other 230 82,950 224 — 83,404 Total 29,919 708,350 8,097 (290 ) 746,076 Property and equipment at cost — 2,420,899 82,902 — 2,503,801 Less accumulated depreciation and amortization — (573,197 ) (12,569 ) — (585,766 ) Property and equipment, net — 1,847,702 70,333 — 1,918,035 Long-term prepayments and other — 188,561 181 — 188,742 Deferred tax assets, net 32,192 — — (32,192 ) — Goodwill and other intangible assets, net — 120,551 1,040 — 121,591 Intercompany receivable — 402,254 — (402,254 ) — Investment in consolidated subsidiaries 1,168,152 — — (1,168,152 ) — TOTAL ASSETS $ 1,230,263 $ 3,267,418 $ 79,651 $ (1,602,888 ) $ 2,974,444 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,103 $ 135,123 $ 1,780 $ (290 ) $ 137,716 Air traffic liability — 694,645 4,304 — 698,949 Other accrued liabilities — 126,473 227 — 126,700 Current maturities of long-term debt, less discount, and capital lease obligations — 59,002 — — 59,002 Total 1,103 1,015,243 6,311 (290 ) 1,022,367 Long-term debt and capital lease obligations — 498,748 — — 498,748 Intercompany payable 390,946 — 11,308 (402,254 ) — Other liabilities and deferred credits: =sum(C32:I32) Accumulated pension and other post-retirement benefit obligations — 217,812 — — 217,812 Other liabilities and deferred credits — 264,310 1,112 — 265,422 Deferred tax liabilities, net — 164,073 — (32,192 ) 131,881 Total — 646,195 1,112 (32,192 ) 615,115 Shareholders’ equity 838,214 1,107,232 60,920 (1,168,152 ) 838,214 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,230,263 $ 3,267,418 $ 79,651 $ (1,602,888 ) $ 2,974,444 Condensed Consolidating Balance Sheets December 31, 2017 (a) Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 57,405 $ 125,861 $ 7,687 $ — $ 190,953 Restricted cash — 1,000 — — 1,000 Short-term investments — 269,297 — — 269,297 Accounts receivable, net 25 139,008 1,455 (209 ) 140,279 Spare parts and supplies, net — 35,361 — — 35,361 Prepaid expenses and other 171 78,933 82 — 79,186 Total 57,601 649,460 9,224 (209 ) 716,076 Property and equipment at cost — 2,326,249 74,562 — 2,400,811 Less accumulated depreciation and amortization — (546,831 ) (11,717 ) — (558,548 ) Property and equipment, net — 1,779,418 62,845 — 1,842,263 Long-term prepayments and other — 193,449 183 — 193,632 Deferred tax assets, net 31,845 — — (31,845 ) — Goodwill and other intangible assets, net — 120,695 1,155 — 121,850 Intercompany receivable — 392,791 — (392,791 ) — Investment in consolidated subsidiaries 1,137,941 — — (1,137,941 ) — TOTAL ASSETS $ 1,227,387 $ 3,135,813 $ 73,407 $ (1,562,786 ) $ 2,873,821 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 622 $ 138,818 $ 1,574 $ (209 ) $ 140,805 Air traffic liability — 584,366 4,727 — 589,093 Other accrued liabilities 32 147,211 350 — 147,593 Current maturities of long-term debt, less discount, and capital lease obligations — 59,470 — — 59,470 Total 654 929,865 6,651 (209 ) 936,961 Long-term debt and capital lease obligations — 511,201 — — 511,201 Intercompany payable 381,608 — 11,183 (392,791 ) — Other liabilities and deferred credits: 0 Accumulated pension and other post-retirement benefit obligations — 220,788 — — 220,788 Other liabilities and deferred credits — 224,500 1,105 — 225,605 Deferred tax liabilities, net — 165,986 — (31,845 ) 134,141 Total — 611,274 1,105 (31,845 ) 580,534 Shareholders’ equity 845,125 1,083,473 54,468 (1,137,941 ) 845,125 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,227,387 $ 3,135,813 $ 73,407 $ (1,562,786 ) $ 2,873,821 (a) Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Schedule of Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2018 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (931 ) $ 224,935 $ 1,541 $ — $ 225,545 Cash Flows From Investing Activities: Net payments to affiliates (6,500 ) (6,000 ) — 12,500 — Additions to property and equipment, including pre-delivery deposits — (102,595 ) (8,302 ) — (110,897 ) Purchases of investments — (30,386 ) — — (30,386 ) Sales of investments — 53,984 — — 53,984 Net cash used in investing activities (6,500 ) (84,997 ) (8,302 ) 12,500 (87,299 ) Cash Flows From Financing Activities: Repayments of long-term debt and capital lease obligations — (20,395 ) — — (20,395 ) Dividend payments (6,145 ) — — — (6,145 ) Net payments from affiliates 6,000 — 6,500 (12,500 ) — Repurchases of common stock (20,245 ) — — — (20,245 ) Other 78 (3,307 ) — — (3,229 ) Net cash provided by (used in) financing activities (20,312 ) (23,702 ) 6,500 (12,500 ) (50,014 ) Net increase (decrease) in cash and cash equivalents (27,743 ) 116,236 (261 ) — 88,232 Cash, cash equivalents, & restricted cash - Beginning of Period 57,405 126,861 7,687 — 191,953 Cash, cash equivalents, & restricted cash - End of Period $ 29,662 $ 243,097 $ 7,426 $ — $ 280,185 Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2017 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (1,102 ) $ 210,250 $ (199 ) $ — $ 208,949 Cash Flows From Investing Activities: Net payments to affiliates — (1,495 ) — 1,495 — Additions to property and equipment, including pre-delivery deposits — (52,266 ) (864 ) — (53,130 ) Purchases of investments — (68,155 ) — — (68,155 ) Sales of investments — 78,301 — — 78,301 Net cash used in investing activities — (43,615 ) (864 ) 1,495 (42,984 ) Cash Flows From Financing Activities: Repayments of long-term debt and capital lease obligations — (21,872 ) — — (21,872 ) Net payments from affiliates 1,495 — — (1,495 ) — Other 48 (7,343 ) — — (7,295 ) Net cash provided by (used in) financing activities 1,543 (29,215 ) — (1,495 ) (29,167 ) Net increase (decrease) in cash and cash equivalents 441 137,420 (1,063 ) — 136,798 Cash, cash equivalents, & restricted cash - Beginning of Period 67,629 254,985 8,377 — 330,991 Cash, cash equivalents, & restricted cash - End of Period $ 68,070 $ 392,405 $ 7,314 $ — $ 467,789 |
Significant Accounting Polici36
Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | |||
Operating Revenue: | ||||||
Passenger | $ 611,600 | $ 563,752 | [1] | |||
Other | 53,812 | 42,457 | [1] | |||
Total | 665,412 | 606,209 | [1],[2] | |||
Operating Expenses | 629,147 | 544,179 | [1],[2] | |||
Operating Income | 36,265 | 62,030 | [1],[2] | |||
Nonoperating Income (Expense) | 830 | (15,813) | [1],[2] | |||
Income tax expense | 8,553 | 12,572 | [1],[2] | |||
Net Income (Loss) | $ 28,542 | $ 33,645 | [1],[2] | |||
Net Income Per Common Stock Share: | ||||||
Basic (in dollars per share) | $ 0.56 | $ 0.63 | [1] | |||
Diluted (in dollars per share) | $ 0.56 | $ 0.62 | [1] | |||
ASSETS | ||||||
Prepaid expenses and other | $ 83,404 | $ 79,186 | [1],[2] | |||
Current Liabilities: | ||||||
Air traffic liability | 698,949 | 589,093 | [1],[2] | |||
Other accrued liabilities | 126,700 | 147,593 | [1],[2] | |||
Noncurrent Liabilities: | ||||||
Other liabilities and deferred credits | 265,422 | 225,605 | [1],[2] | |||
Deferred tax liability | 131,881 | 134,141 | [1] | |||
Shareholders' Equity: | ||||||
Accumulated income | $ 795,293 | 793,134 | [1] | |||
Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Impact to equity | $ 76,000 | |||||
As Reported | Accounting Standards Update 2014-09 | ||||||
Operating Revenue: | ||||||
Passenger | $ 537,590 | |||||
Other | 76,595 | |||||
Total | 614,185 | |||||
Operating Expenses | 546,891 | |||||
Operating Income | 67,294 | |||||
Nonoperating Income (Expense) | (15,813) | |||||
Income tax expense | 14,570 | |||||
Net Income (Loss) | $ 36,911 | |||||
Net Income Per Common Stock Share: | ||||||
Basic (in dollars per share) | $ 0.69 | |||||
Diluted (in dollars per share) | $ 0.68 | |||||
ASSETS | ||||||
Prepaid expenses and other | 65,196 | |||||
Current Liabilities: | ||||||
Air traffic liability | 545,362 | |||||
Other accrued liabilities | 146,283 | |||||
Noncurrent Liabilities: | ||||||
Other liabilities and deferred credits | 95,636 | |||||
Deferred tax liability | 174,344 | |||||
Shareholders' Equity: | ||||||
Accumulated income | 913,951 | |||||
Adjustments | Accounting Standards Update 2014-09 | ||||||
Operating Revenue: | ||||||
Passenger | $ 26,162 | |||||
Other | (34,138) | |||||
Total | (7,976) | |||||
Operating Expenses | (2,712) | |||||
Operating Income | (5,264) | |||||
Nonoperating Income (Expense) | 0 | |||||
Income tax expense | (1,998) | |||||
Net Income (Loss) | $ (3,266) | |||||
Net Income Per Common Stock Share: | ||||||
Basic (in dollars per share) | $ (0.06) | |||||
Diluted (in dollars per share) | $ (0.06) | |||||
ASSETS | ||||||
Prepaid expenses and other | 13,990 | |||||
Current Liabilities: | ||||||
Air traffic liability | 43,731 | |||||
Other accrued liabilities | 1,310 | |||||
Noncurrent Liabilities: | ||||||
Other liabilities and deferred credits | 129,969 | |||||
Deferred tax liability | (40,203) | |||||
Shareholders' Equity: | ||||||
Accumulated income | $ (120,817) | |||||
Frequent flyer revenue, transportation component | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenue recognition period | 23 months | |||||
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | |||||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Amounts reclassified from AOCI | |||
Foreign currency derivative losses (gains) | $ (611,600) | $ (563,752) | [1] |
Total before tax | (37,095) | (46,217) | [1],[2] |
Tax expense (benefit) | 8,553 | 12,572 | [1],[2] |
Total, net of tax | (28,542) | (33,645) | [1],[2] |
Total reclassifications for the period | 1,439 | 663 | |
Derivatives designated as hedging instruments under ASC 815 | Amount reclassified from accumulated other comprehensive income (loss) | |||
Amounts reclassified from AOCI | |||
Total before tax | 1,221 | (1,212) | |
Tax expense (benefit) | (299) | 459 | |
Total, net of tax | 922 | (753) | |
Derivatives designated as hedging instruments under ASC 815 | Amount reclassified from accumulated other comprehensive income (loss) | Foreign currency derivative losses (gains) | |||
Amounts reclassified from AOCI | |||
Foreign currency derivative losses (gains) | 1,221 | (1,212) | |
Defined benefit plan | |||
Amounts reclassified from AOCI | |||
Amortization of defined benefit plan items | 680 | 2,288 | |
Tax benefit | (167) | (867) | |
Total reclassifications for the period | 513 | 1,421 | |
Actuarial loss | |||
Amounts reclassified from AOCI | |||
Amortization of defined benefit plan items | 624 | 2,228 | |
Prior service cost | |||
Amounts reclassified from AOCI | |||
Amortization of defined benefit plan items | 56 | 60 | |
Short-term investments | Amount reclassified from accumulated other comprehensive income (loss) | |||
Amounts reclassified from AOCI | |||
Realized losses (gain) on sales of investments, net | 5 | (8) | |
Total before tax | 5 | (8) | |
Tax expense (benefit) | (1) | 3 | |
Total, net of tax | $ 4 | $ (5) | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Income (Loss) - Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Rollforward of Accumulated other comprehensive income (loss) | ||||
Beginning balance | [1],[2] | $ 845,125 | ||
Other comprehensive loss before reclassifications, net of tax | (8,630) | $ (6,206) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (1,439) | (663) | ||
Net current-period other comprehensive income (loss) | (7,191) | (5,543) | [1] | |
Ending balance | 838,214 | |||
Accumulated net gain (loss) from cash flow hedges | Foreign Currency Derivatives | ||||
Rollforward of Accumulated other comprehensive income (loss) | ||||
Beginning balance | 1,249 | 7,071 | ||
Other comprehensive loss before reclassifications, net of tax | (8,166) | (6,344) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (922) | 753 | ||
Net current-period other comprehensive income (loss) | (7,244) | (7,097) | ||
Ending balance | (5,995) | (26) | ||
Defined Benefit Plan Items | ||||
Rollforward of Accumulated other comprehensive income (loss) | ||||
Beginning balance | (75,953) | (110,202) | ||
Other comprehensive loss before reclassifications, net of tax | 0 | 47 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (513) | (1,421) | ||
Net current-period other comprehensive income (loss) | 513 | 1,468 | ||
Ending balance | (75,440) | (108,734) | ||
Short-Term Investments | ||||
Rollforward of Accumulated other comprehensive income (loss) | ||||
Beginning balance | (560) | (362) | ||
Other comprehensive loss before reclassifications, net of tax | (464) | 91 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (4) | 5 | ||
Net current-period other comprehensive income (loss) | (460) | 86 | ||
Ending balance | (1,020) | (276) | ||
Total | ||||
Rollforward of Accumulated other comprehensive income (loss) | ||||
Beginning balance | (75,264) | (103,493) | ||
Ending balance | $ (82,455) | $ (109,036) | ||
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | |||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Potential Dilution (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Numerator: | |||
Net Income | $ 28,542 | $ 33,645 | [1],[2] |
Denominator: | |||
Weighted average common stock shares outstanding - Basic (in shares) | 51,055 | 53,562 | [1] |
Assumed exercise of stock options and awards (in shares) | 144 | 418 | |
Weighted average common stock shares outstanding - Diluted (in shares) | 51,199 | 53,980 | [1] |
Net Income Per Share | |||
Basic (in dollars per share) | $ 0.56 | $ 0.63 | [1] |
Diluted (in dollars per share) | $ 0.56 | $ 0.62 | [1] |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Earnings Per Share - Stock Repu
Earnings Per Share - Stock Repurchase Program and Dividends (Details) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Earnings Per Share [Abstract] | ||||
Approved stock repurchase amount | $ 100,000,000 | |||
Period of approved stock repurchase program | 2 years | |||
Amount spent to repurchase shares | $ 20,300,000 | |||
Number of shares repurchased and retired (in shares) | 549 | |||
Remaining authorized repurchase amount | $ 79,700,000 | |||
Cash dividend declared | $ 0.12 | $ 0 | ||
Declared and paid cash dividend | $ 6,100,000 | |||
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 665,412 | $ 606,209 |
Passenger revenue, excluding frequent flyer | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 577,955 | 534,054 |
Frequent flyer revenue, transportation component | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 33,645 | 29,698 |
Passenger Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 611,600 | 563,752 |
Other revenue (e.g. cargo and other miscellaneous) | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 38,690 | 32,141 |
Frequent flyer revenue, marketing and brand component | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,122 | 10,316 |
Other Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 53,812 | 42,457 |
Domestic | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 492,202 | 450,797 |
Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 173,210 | $ 155,412 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segmentline_of_business | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Number of lines of business | line_of_business | 1 | ||
Number of segments | segment | 1 | ||
Revenue | $ 665,412 | $ 606,209 | |
Contract asset | 20,300 | $ 16,700 | |
Contract assets expensed during the period | 23,900 | 22,500 | |
Passenger revenue, excluding frequent flyer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 577,955 | 534,054 | |
Air traffic liability | $ 526,400 | 422,600 | |
Revenue recognition period | 12 months | ||
Air traffic revenue recognized | $ 260,300 | 229,600 | |
Frequent flyer revenue, transportation component | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 33,645 | $ 29,698 | |
Air traffic liability | $ 366,000 | $ 321,900 | |
Revenue recognition period | 23 months | ||
Weighted average ETV period | 12 months | ||
Period for mile expiration | 18 months |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | $ 246,414 | $ 270,154 |
Gross Unrealized Gains | 5 | 10 |
Gross Unrealized Losses | (1,471) | (867) |
Contractual Maturities | ||
Under 1 Year | 147,357 | |
1 to 5 Years | 97,591 | |
Total | 244,948 | 269,297 |
Corporate debt | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 141,097 | 165,610 |
Gross Unrealized Gains | 4 | 8 |
Gross Unrealized Losses | (1,080) | (535) |
Contractual Maturities | ||
Under 1 Year | 68,515 | |
1 to 5 Years | 71,506 | |
Total | 140,021 | 165,083 |
U.S. government and agency debt | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 53,462 | 59,054 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (237) | (215) |
Contractual Maturities | ||
Under 1 Year | 43,156 | |
1 to 5 Years | 10,070 | |
Total | 53,226 | 58,840 |
Municipal bonds | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 19,628 | 21,517 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (84) | (104) |
Contractual Maturities | ||
Under 1 Year | 10,486 | |
1 to 5 Years | 9,058 | |
Total | 19,544 | 21,413 |
Other fixed income securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 32,227 | 23,973 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (70) | (13) |
Contractual Maturities | ||
Under 1 Year | 25,200 | |
1 to 5 Years | 6,957 | |
Total | $ 32,157 | $ 23,961 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities, Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements | |||
Short-term investments | $ 244,948 | $ 269,297 | [1],[2] |
Recurring basis | |||
Fair Value Measurements | |||
Cash equivalents | 176,125 | 62,310 | |
Restricted cash | 1,000 | 1,000 | |
Short-term investments | 244,948 | 269,297 | |
Total assets measured at fair value | 442,955 | 357,515 | |
Total liabilities measured at fair value | 7,840 | 1,713 | |
Recurring basis | Crude oil call options | |||
Fair Value Measurements | |||
Fuel derivative contracts | 19,551 | 20,272 | |
Recurring basis | Swaps | |||
Fair Value Measurements | |||
Fuel derivative contracts | 113 | 336 | |
Derivative contracts | 10 | ||
Recurring basis | Foreign currency derivatives | |||
Fair Value Measurements | |||
Fuel derivative contracts | 1,218 | 4,300 | |
Derivative contracts | 7,830 | 1,713 | |
Recurring basis | Level 1 | |||
Fair Value Measurements | |||
Cash equivalents | 135,323 | 27,807 | |
Restricted cash | 1,000 | 1,000 | |
Short-term investments | 0 | 0 | |
Total assets measured at fair value | 136,323 | 28,807 | |
Total liabilities measured at fair value | 0 | 0 | |
Recurring basis | Level 1 | Crude oil call options | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Recurring basis | Level 1 | Swaps | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Derivative contracts | 0 | ||
Recurring basis | Level 1 | Foreign currency derivatives | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Derivative contracts | 0 | 0 | |
Recurring basis | Level 2 | |||
Fair Value Measurements | |||
Cash equivalents | 40,802 | 34,503 | |
Restricted cash | 0 | 0 | |
Short-term investments | 244,948 | 269,297 | |
Total assets measured at fair value | 306,632 | 328,708 | |
Total liabilities measured at fair value | 7,840 | 1,713 | |
Recurring basis | Level 2 | Crude oil call options | |||
Fair Value Measurements | |||
Fuel derivative contracts | 19,551 | 20,272 | |
Recurring basis | Level 2 | Swaps | |||
Fair Value Measurements | |||
Fuel derivative contracts | 113 | 336 | |
Derivative contracts | 10 | ||
Recurring basis | Level 2 | Foreign currency derivatives | |||
Fair Value Measurements | |||
Fuel derivative contracts | 1,218 | 4,300 | |
Derivative contracts | 7,830 | 1,713 | |
Recurring basis | Level 3 | |||
Fair Value Measurements | |||
Cash equivalents | 0 | 0 | |
Restricted cash | 0 | 0 | |
Short-term investments | 0 | 0 | |
Total assets measured at fair value | 0 | 0 | |
Total liabilities measured at fair value | 0 | 0 | |
Recurring basis | Level 3 | Crude oil call options | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Recurring basis | Level 3 | Swaps | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Derivative contracts | 0 | ||
Recurring basis | Level 3 | Foreign currency derivatives | |||
Fair Value Measurements | |||
Fuel derivative contracts | 0 | 0 | |
Derivative contracts | $ 0 | $ 0 | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Fair Value Measurements - Sch45
Fair Value Measurements - Schedule of Certain Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements | ||
Carrying value of debt | $ 415,059 | $ 433,072 |
Recurring basis | ||
Fair Value Measurements | ||
Fair value of debt | 418,825 | 444,099 |
Recurring basis | Level 1 | ||
Fair Value Measurements | ||
Fair value of debt | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value Measurements | ||
Fair value of debt | 0 | 0 |
Recurring basis | Level 3 | ||
Fair Value Measurements | ||
Fair value of debt | $ 418,825 | $ 444,099 |
Financial Derivative Instrume46
Financial Derivative Instruments - Risk Management (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Derivative instrument | |||
Gains (losses) on fuel derivatives recorded as nonoperating income (expense) | $ 4,617 | $ (8,798) | [1],[2] |
Derivatives not designated as hedges | Fuel derivative contracts | |||
Derivative instrument | |||
Gains (losses) realized at settlement | 5,661 | 2,589 | |
Reversal of prior period unrealized amounts | (11,792) | (7,947) | |
Unrealized gains (losses) that will settle in future periods | 10,748 | (3,440) | |
Gains (losses) on fuel derivatives recorded as nonoperating income (expense) | 4,617 | $ (8,798) | |
Derivatives designated as hedges | Foreign currency derivatives | |||
Derivative instrument | |||
Expected reclassification of net loss | $ 5,500 | ||
Reclassification estimated time period | 12 months | ||
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Financial Derivative Instrume47
Financial Derivative Instruments - Derivative Position (Details) ¥ in Thousands, gal in Thousands, $ in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018JPY (¥)gal | Dec. 31, 2017JPY (¥)gal | Mar. 31, 2018AUD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017AUD ($) | Dec. 31, 2017USD ($) | |
Derivatives designated as hedges | Foreign currency derivatives | Other accrued liabilities | ||||||
Fair Value of Derivatives | ||||||
Gross fair value of assets, current | $ 1,109 | |||||
Gross fair value of liabilities, current | (6,095) | |||||
Net derivative position | (4,986) | |||||
Derivatives designated as hedges | Foreign currency derivatives | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Notional Amount | ¥ 17,051,625 | ¥ 16,732,375 | $ 47,345 | $ 47,805 | ||
Gross fair value of assets, current | $ 3,737 | |||||
Gross fair value of liabilities, current | (1,441) | |||||
Net derivative position | 2,296 | |||||
Derivatives designated as hedges | Foreign currency derivatives | Long-term prepayments and other | ||||||
Fair Value of Derivatives | ||||||
Gross fair value of assets, noncurrent | 546 | |||||
Gross fair value of liabilities, noncurrent | (195) | |||||
Net derivative position | 351 | |||||
Derivatives designated as hedges | Foreign currency derivatives | Other liabilities and deferred credits | ||||||
Fair Value of Derivatives | ||||||
Notional Amount | 4,666,550 | 4,666,700 | 7,858 | 9,180 | ||
Gross fair value of assets, noncurrent | 74 | |||||
Gross fair value of liabilities, noncurrent | (1,573) | |||||
Net derivative position | (1,499) | |||||
Derivatives not designated as hedges | Foreign currency derivatives | Other accrued liabilities | ||||||
Fair Value of Derivatives | ||||||
Gross fair value of assets, current | 35 | 17 | ||||
Gross fair value of liabilities, current | (162) | (77) | ||||
Net derivative position | (127) | (60) | ||||
Derivatives not designated as hedges | Foreign currency derivatives | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Notional Amount | ¥ 884,200 | ¥ 866,150 | $ 2,555 | $ 3,148 | ||
Derivatives not designated as hedges | Fuel derivative contracts | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Notional Amount (in gallons) | gal | 95,508 | 94,332 | ||||
Gross fair value of assets, current | 19,664 | 20,608 | ||||
Gross fair value of liabilities, current | (10) | 0 | ||||
Net derivative position | $ 19,654 | $ 20,608 |
Financial Derivative Instrume48
Financial Derivative Instruments - Impact of Cash Flow Hedges (Details) - Cash Flow Hedging - Foreign currency derivatives - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gains (losses) for designated hedge contracts | ||
(Gain) loss recognized in AOCI on derivatives (effective portion) | $ 10,809 | $ 10,210 |
(Gain) loss reclassified from AOCI into income (effective portion) | 1,221 | (1,212) |
(Gain) loss recognized in nonoperating (income) expense (ineffective portion) | $ 0 | $ 0 |
Financial Derivative Instrume49
Financial Derivative Instruments - Risk and Collateral (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral posted with counterparties | $ 0 | $ 0 |
Debt (Details)
Debt (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Remaining months in 2018 | $ 30,231 |
2,019 | 72,927 |
2,020 | 21,413 |
2,021 | 49,060 |
2,022 | 56,856 |
Thereafter | 184,573 |
Long-term Debt | $ 415,060 |
Leases (Details)
Leases (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Aircraft | |
Operating Leased Assets [Line Items] | |
Remaining in 2018 | $ 80,443 |
2,019 | 98,327 |
2,020 | 82,362 |
2,021 | 66,259 |
2,022 | 60,153 |
Thereafter | 164,993 |
Total future minimum rental payments | 552,537 |
Other | |
Operating Leased Assets [Line Items] | |
Remaining in 2018 | 5,155 |
2,019 | 6,584 |
2,020 | 6,399 |
2,021 | 6,509 |
2,022 | 6,778 |
Thereafter | 91,181 |
Total future minimum rental payments | $ 122,606 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Aug. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | |
Components of Net Period Benefit Cost | |||||
Service cost | $ 1,962,000 | $ 3,813,000 | |||
Other cost: | |||||
Interest cost | 5,009,000 | 7,259,000 | |||
Expected return on plan assets | (5,588,000) | (4,796,000) | |||
Recognized net actuarial loss | 680,000 | 2,287,000 | |||
Total other components of the net periodic benefit cost | 101,000 | 4,750,000 | |||
Net periodic benefit cost | 2,063,000 | 8,563,000 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Employer contribution | 0 | $ 6,400,000 | |||
Merged Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Cash payment to fund the plan | $ 18,500,000 | ||||
One-time financial loss | 35,200,000 | ||||
Expected contributions for the remainder of 2018 | $ 0 | ||||
HRA and Post-65 medical plan | Air Line Pilots Association | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Cash payment to fund the plan | $ 101,900,000 | ||||
Ratified agreement, term | 63 months | ||||
One-time settlement loss | $ 10,400,000 |
Commitments and Contingent Li53
Commitments and Contingent Liabilities - Capital Commitments and Operating Expenditures (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)orderpurchase_right | |
Total Committed Expenditures | |
Remaining in 2018 | $ 410,062 |
2,019 | 339,615 |
2,020 | 108,395 |
2,021 | 61,851 |
2,022 | 62,043 |
Thereafter | 291,508 |
Total | 1,273,474 |
Capital | |
Total Committed Expenditures | |
Remaining in 2018 | 354,102 |
2,019 | 277,757 |
2,020 | 51,911 |
2,021 | 10,113 |
2,022 | 10,113 |
Thereafter | 75,431 |
Total | $ 779,427 |
Capital | A321neo aircraft | |
Long-term Purchase Commitment [Line Items] | |
Number of Aircraft Firm Order | order | 14 |
Number of aircraft purchase rights | purchase_right | 9 |
Capital | A321neo aircraft | Pratt & Whitney spare engines: | |
Long-term Purchase Commitment [Line Items] | |
Spare Engine Firm Orders | order | 3 |
Spare Engine Purchase Rights | purchase_right | 2 |
Operating | |
Total Committed Expenditures | |
Remaining in 2018 | $ 55,960 |
2,019 | 61,858 |
2,020 | 56,484 |
2,021 | 51,738 |
2,022 | 51,930 |
Thereafter | 216,077 |
Total | $ 494,047 |
Commitments and Contingent Li54
Commitments and Contingent Liabilities - Narrative (Details) $ in Millions | 1 Months Ended | ||
Mar. 31, 2018USD ($)aircraft | Feb. 28, 2018aircraft | Dec. 31, 2017USD ($) | |
Credit Card Processing Agreements | |||
Long-term Purchase Commitment [Line Items] | |||
Restricted cash | $ | $ 1 | $ 1 | |
Maximum limit of holdback (up to) | 100.00% | ||
A-330-800-Neo | |||
Long-term Purchase Commitment [Line Items] | |||
Number of aircrafts terminated | 6 | ||
Number of aircraft purchase rights | 6 | ||
B787-9 aircraft | |||
Long-term Purchase Commitment [Line Items] | |||
Number of aircrafts under purchase agreement | 10 | ||
Number of aircrafts with purchase rights under purchase agreement | 10 |
Contract Terminations Expense55
Contract Terminations Expense and Special Items - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2018aircraft | Feb. 28, 2018aircraft | Jan. 31, 2018USD ($)aircraftengine | Mar. 31, 2018USD ($)contract | Mar. 31, 2017USD ($) | [1] | |
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Number of terminated contracts | contract | 2 | |||||
Contract terminations expense | $ | $ 35,322 | $ 0 | ||||
Air Line Pilots Association | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Collective bargaining charge | $ | $ 18,700 | |||||
A-330-800-Neo | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Number of aircrafts terminated | 6 | |||||
Number of aircraft purchase rights | 6 | |||||
B787-9 aircraft | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Number of aircrafts under purchase agreement | 10 | |||||
Number of aircrafts with purchase rights under purchase agreement | 10 | |||||
B767-300 aircraft | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Sale leaseback agreement, contract exit costs | $ | $ 67,100 | |||||
Aircraft | B767-300 aircraft | ||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||
Sale lease-back transaction, number of aircraft | 3 | |||||
Number of engines under sale-leaseback | engine | 2 | |||||
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (percent) | 23.10% | 27.20% |
Condensed Consolidating Finan57
Condensed Consolidating Financial Information - Narrative and Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($)pass_through_trust | Mar. 31, 2017USD ($) | |||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating Revenue | $ 665,412 | $ 606,209 | [1],[2] | |
Operating Expenses: | ||||
Wages and benefits | 168,709 | 151,053 | [1],[2] | |
Aircraft fuel, including taxes and delivery | 133,446 | 103,538 | [1],[2] | |
Maintenance materials and repairs | 58,141 | 59,404 | [1],[2] | |
Aircraft and passenger servicing | 36,518 | 34,290 | [1],[2] | |
Commissions and other selling | 31,925 | 29,642 | [1],[2] | |
Aircraft rent | 31,900 | 33,135 | [1],[2] | |
Other rentals and landing fees | 30,815 | 28,336 | [1],[2] | |
Depreciation and amortization | 32,245 | 27,468 | [1],[2] | |
Purchased services | 31,121 | 26,637 | [1],[2] | |
Contract terminations expense | 35,322 | 0 | [1] | |
Special items | 0 | 18,679 | [1],[2] | |
Other | 39,005 | 31,997 | [1],[2] | |
Total | 629,147 | 544,179 | [1],[2] | |
Operating Income | 36,265 | 62,030 | [1],[2] | |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | [2] | |
Interest expense and amortization of debt discounts and issuance costs | (8,555) | (8,003) | [1],[2] | |
Other components of net periodic pension cost | [2] | 0 | ||
Interest income | 1,474 | 1,152 | [1],[2] | |
Capitalized interest | 2,238 | 1,760 | [1],[2] | |
Gains (losses) on fuel derivatives | 4,617 | (8,798) | [1],[2] | |
Loss on extinguishment of debt | [2] | 0 | ||
Other, net | 1,056 | (1,924) | [1],[2] | |
Total | 830 | (15,813) | [1],[2] | |
Income Before Income Taxes | 37,095 | 46,217 | [1],[2] | |
Income tax expense (benefit) | 8,553 | 12,572 | [1],[2] | |
Net Income (Loss) | 28,542 | 33,645 | [1],[2] | |
Comprehensive Income (Loss) | 21,351 | 28,102 | [1],[2] | |
Eliminations | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating Revenue | (127) | (104) | [2] | |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | [2] | |
Aircraft fuel, including taxes and delivery | 0 | 0 | [2] | |
Maintenance materials and repairs | 0 | 0 | [2] | |
Aircraft and passenger servicing | 0 | 0 | [2] | |
Commissions and other selling | (48) | (46) | [2] | |
Aircraft rent | 0 | 0 | [2] | |
Other rentals and landing fees | 0 | 0 | [2] | |
Depreciation and amortization | 0 | 0 | [2] | |
Purchased services | (15) | (15) | [2] | |
Contract terminations expense | 0 | |||
Special items | [2] | 0 | ||
Other | (64) | (43) | [2] | |
Total | (127) | (104) | [2] | |
Operating Income | 0 | 0 | [2] | |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | (29,810) | (34,373) | [2] | |
Interest expense and amortization of debt discounts and issuance costs | 0 | 0 | [2] | |
Other components of net periodic pension cost | [2] | 0 | ||
Interest income | 0 | 0 | [2] | |
Capitalized interest | 0 | 0 | [2] | |
Gains (losses) on fuel derivatives | 0 | 0 | [2] | |
Loss on extinguishment of debt | [2] | 0 | ||
Other, net | 0 | 0 | [2] | |
Total | (29,810) | (34,373) | [2] | |
Income Before Income Taxes | (29,810) | (34,373) | [2] | |
Income tax expense (benefit) | 0 | 0 | [2] | |
Net Income (Loss) | (29,810) | (34,373) | [2] | |
Comprehensive Income (Loss) | (22,619) | (28,830) | [2] | |
Parent Issuer / Guarantor | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating Revenue | 0 | 0 | [2] | |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | [2] | |
Aircraft fuel, including taxes and delivery | 0 | 0 | [2] | |
Maintenance materials and repairs | 0 | 0 | [2] | |
Aircraft and passenger servicing | 0 | 0 | [2] | |
Commissions and other selling | (5) | 6 | [2] | |
Aircraft rent | 0 | 0 | [2] | |
Other rentals and landing fees | 0 | 0 | [2] | |
Depreciation and amortization | 0 | 0 | [2] | |
Purchased services | 90 | 106 | [2] | |
Contract terminations expense | 0 | |||
Special items | [2] | 0 | ||
Other | 1,581 | 1,152 | [2] | |
Total | 1,666 | 1,264 | [2] | |
Operating Income | (1,666) | (1,264) | [2] | |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 29,810 | 34,373 | [2] | |
Interest expense and amortization of debt discounts and issuance costs | 0 | 0 | [2] | |
Other components of net periodic pension cost | [2] | 0 | ||
Interest income | 65 | 70 | [2] | |
Capitalized interest | 0 | 0 | [2] | |
Gains (losses) on fuel derivatives | 0 | 0 | [2] | |
Loss on extinguishment of debt | [2] | 0 | ||
Other, net | (4) | 0 | [2] | |
Total | 29,871 | 34,443 | [2] | |
Income Before Income Taxes | 28,205 | 33,179 | [2] | |
Income tax expense (benefit) | (337) | (466) | [2] | |
Net Income (Loss) | 28,542 | 33,645 | [2] | |
Comprehensive Income (Loss) | $ 21,351 | 28,102 | [2] | |
Subsidiary Issuer / Guarantor | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Number of pass-through trusts | pass_through_trust | 2 | |||
Subsidiary Issuer / Guarantor | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating Revenue | $ 663,412 | 604,567 | [2] | |
Operating Expenses: | ||||
Wages and benefits | 168,709 | 151,053 | [2] | |
Aircraft fuel, including taxes and delivery | 133,446 | 103,538 | [2] | |
Maintenance materials and repairs | 57,494 | 57,293 | [2] | |
Aircraft and passenger servicing | 36,518 | 34,290 | [2] | |
Commissions and other selling | 31,958 | 29,663 | [2] | |
Aircraft rent | 31,900 | 33,135 | [2] | |
Other rentals and landing fees | 30,815 | 28,336 | [2] | |
Depreciation and amortization | 31,275 | 26,517 | [2] | |
Purchased services | 30,868 | 26,354 | [2] | |
Contract terminations expense | 35,322 | |||
Special items | [2] | 18,679 | ||
Other | 37,123 | 30,453 | [2] | |
Total | 625,428 | 539,311 | [2] | |
Operating Income | 37,984 | 65,256 | [2] | |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | [2] | |
Interest expense and amortization of debt discounts and issuance costs | (8,555) | (8,003) | [2] | |
Other components of net periodic pension cost | [2] | 0 | ||
Interest income | 1,409 | 1,082 | [2] | |
Capitalized interest | 2,238 | 1,760 | [2] | |
Gains (losses) on fuel derivatives | 4,617 | (8,798) | [2] | |
Loss on extinguishment of debt | [2] | 0 | ||
Other, net | 1,055 | (1,924) | [2] | |
Total | 764 | (15,883) | [2] | |
Income Before Income Taxes | 38,748 | 49,373 | [2] | |
Income tax expense (benefit) | 8,900 | 13,725 | [2] | |
Net Income (Loss) | 29,848 | 35,648 | [2] | |
Comprehensive Income (Loss) | 22,657 | 30,105 | [2] | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating Revenue | 2,127 | 1,746 | [2] | |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | [2] | |
Aircraft fuel, including taxes and delivery | 0 | 0 | [2] | |
Maintenance materials and repairs | 647 | 2,111 | [2] | |
Aircraft and passenger servicing | 0 | 0 | [2] | |
Commissions and other selling | 20 | 19 | [2] | |
Aircraft rent | 0 | 0 | [2] | |
Other rentals and landing fees | 0 | 0 | [2] | |
Depreciation and amortization | 970 | 951 | [2] | |
Purchased services | 178 | 192 | [2] | |
Contract terminations expense | 0 | |||
Special items | [2] | 0 | ||
Other | 365 | 435 | [2] | |
Total | 2,180 | 3,708 | [2] | |
Operating Income | (53) | (1,962) | [2] | |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | [2] | |
Interest expense and amortization of debt discounts and issuance costs | 0 | 0 | [2] | |
Other components of net periodic pension cost | [2] | 0 | ||
Interest income | 0 | 0 | [2] | |
Capitalized interest | 0 | 0 | [2] | |
Gains (losses) on fuel derivatives | 0 | 0 | [2] | |
Loss on extinguishment of debt | [2] | 0 | ||
Other, net | 5 | 0 | [2] | |
Total | 5 | 0 | [2] | |
Income Before Income Taxes | (48) | (1,962) | [2] | |
Income tax expense (benefit) | (10) | (687) | [2] | |
Net Income (Loss) | (38) | (1,275) | [2] | |
Comprehensive Income (Loss) | $ (38) | $ (1,275) | [2] | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | |||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Condensed Consolidating Finan58
Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | [2] |
Current assets: | |||
Cash and cash equivalents | $ 279,185 | $ 190,953 | [1] |
Restricted cash | 1,000 | 1,000 | [1] |
Short-term investments | 244,948 | 269,297 | [1] |
Accounts receivable, net | 106,724 | 140,279 | [1] |
Spare parts and supplies, net | 30,815 | 35,361 | [1] |
Prepaid expenses and other | 83,404 | 79,186 | [1] |
Total | 746,076 | 716,076 | [1] |
Property and equipment at cost | 2,503,801 | 2,400,811 | |
Less accumulated depreciation and amortization | (585,766) | (558,548) | |
Property and equipment, net | 1,918,035 | 1,842,263 | [1] |
Long-term prepayments and other | 188,742 | 193,632 | [1] |
Deferred tax assets, net | 0 | 0 | |
Goodwill and other intangible assets, net | 121,591 | 121,850 | |
Intercompany receivable | 0 | 0 | |
Investment in consolidated subsidiaries | 0 | 0 | |
Total Assets | 2,974,444 | 2,873,821 | [1] |
Current liabilities: | |||
Accounts payable | 137,716 | 140,805 | [1] |
Air traffic liability | 698,949 | 589,093 | [1] |
Other accrued liabilities | 126,700 | 147,593 | [1] |
Current maturities of long-term debt, less discount, and capital lease obligations | 59,002 | 59,470 | [1] |
Total | 1,022,367 | 936,961 | [1] |
Long-term debt and capital lease obligations | 498,748 | 511,201 | [1] |
Intercompany payable | 0 | 0 | |
Other liabilities and deferred credits: | |||
Accumulated pension and other post-retirement benefit obligations | 217,812 | 220,788 | [1] |
Other liabilities and deferred credits | 265,422 | 225,605 | [1] |
Deferred tax liabilities, net | 131,881 | 134,141 | |
Total | 615,115 | 580,534 | [1] |
Shareholders’ equity | 838,214 | 845,125 | [1] |
Total Liabilities and Shareholders’ Equity | 2,974,444 | 2,873,821 | [1] |
Eliminations | |||
Current assets: | |||
Cash and cash equivalents | 0 | 0 | |
Restricted cash | 0 | 0 | |
Short-term investments | 0 | 0 | |
Accounts receivable, net | (290) | (209) | |
Spare parts and supplies, net | 0 | 0 | |
Prepaid expenses and other | 0 | 0 | |
Total | (290) | (209) | |
Property and equipment at cost | 0 | 0 | |
Less accumulated depreciation and amortization | 0 | 0 | |
Property and equipment, net | 0 | 0 | |
Long-term prepayments and other | 0 | 0 | |
Deferred tax assets, net | (32,192) | (31,845) | |
Goodwill and other intangible assets, net | 0 | 0 | |
Intercompany receivable | (402,254) | (392,791) | |
Investment in consolidated subsidiaries | (1,168,152) | (1,137,941) | |
Total Assets | (1,602,888) | (1,562,786) | |
Current liabilities: | |||
Accounts payable | (290) | (209) | |
Air traffic liability | 0 | 0 | |
Other accrued liabilities | 0 | 0 | |
Current maturities of long-term debt, less discount, and capital lease obligations | 0 | 0 | |
Total | (290) | (209) | |
Long-term debt and capital lease obligations | 0 | 0 | |
Intercompany payable | (402,254) | (392,791) | |
Other liabilities and deferred credits: | |||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | |
Other liabilities and deferred credits | 0 | 0 | |
Deferred tax liabilities, net | (32,192) | (31,845) | |
Total | (32,192) | (31,845) | |
Shareholders’ equity | (1,168,152) | (1,137,941) | |
Total Liabilities and Shareholders’ Equity | (1,602,888) | (1,562,786) | |
Parent Issuer / Guarantor | Reportable Legal Entities | |||
Current assets: | |||
Cash and cash equivalents | 29,662 | 57,405 | |
Restricted cash | 0 | 0 | |
Short-term investments | 0 | 0 | |
Accounts receivable, net | 27 | 25 | |
Spare parts and supplies, net | 0 | 0 | |
Prepaid expenses and other | 230 | 171 | |
Total | 29,919 | 57,601 | |
Property and equipment at cost | 0 | 0 | |
Less accumulated depreciation and amortization | 0 | 0 | |
Property and equipment, net | 0 | 0 | |
Long-term prepayments and other | 0 | 0 | |
Deferred tax assets, net | 32,192 | 31,845 | |
Goodwill and other intangible assets, net | 0 | 0 | |
Intercompany receivable | 0 | 0 | |
Investment in consolidated subsidiaries | 1,168,152 | 1,137,941 | |
Total Assets | 1,230,263 | 1,227,387 | |
Current liabilities: | |||
Accounts payable | 1,103 | 622 | |
Air traffic liability | 0 | 0 | |
Other accrued liabilities | 0 | 32 | |
Current maturities of long-term debt, less discount, and capital lease obligations | 0 | 0 | |
Total | 1,103 | 654 | |
Long-term debt and capital lease obligations | 0 | 0 | |
Intercompany payable | 390,946 | 381,608 | |
Other liabilities and deferred credits: | |||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | |
Other liabilities and deferred credits | 0 | 0 | |
Deferred tax liabilities, net | 0 | 0 | |
Total | 0 | 0 | |
Shareholders’ equity | 838,214 | 845,125 | |
Total Liabilities and Shareholders’ Equity | 1,230,263 | 1,227,387 | |
Subsidiary Issuer / Guarantor | Reportable Legal Entities | |||
Current assets: | |||
Cash and cash equivalents | 242,097 | 125,861 | |
Restricted cash | 1,000 | 1,000 | |
Short-term investments | 244,948 | 269,297 | |
Accounts receivable, net | 106,540 | 139,008 | |
Spare parts and supplies, net | 30,815 | 35,361 | |
Prepaid expenses and other | 82,950 | 78,933 | |
Total | 708,350 | 649,460 | |
Property and equipment at cost | 2,420,899 | 2,326,249 | |
Less accumulated depreciation and amortization | (573,197) | (546,831) | |
Property and equipment, net | 1,847,702 | 1,779,418 | |
Long-term prepayments and other | 188,561 | 193,449 | |
Deferred tax assets, net | 0 | 0 | |
Goodwill and other intangible assets, net | 120,551 | 120,695 | |
Intercompany receivable | 402,254 | 392,791 | |
Investment in consolidated subsidiaries | 0 | 0 | |
Total Assets | 3,267,418 | 3,135,813 | |
Current liabilities: | |||
Accounts payable | 135,123 | 138,818 | |
Air traffic liability | 694,645 | 584,366 | |
Other accrued liabilities | 126,473 | 147,211 | |
Current maturities of long-term debt, less discount, and capital lease obligations | 59,002 | 59,470 | |
Total | 1,015,243 | 929,865 | |
Long-term debt and capital lease obligations | 498,748 | 511,201 | |
Intercompany payable | 0 | 0 | |
Other liabilities and deferred credits: | |||
Accumulated pension and other post-retirement benefit obligations | 217,812 | 220,788 | |
Other liabilities and deferred credits | 264,310 | 224,500 | |
Deferred tax liabilities, net | 164,073 | 165,986 | |
Total | 646,195 | 611,274 | |
Shareholders’ equity | 1,107,232 | 1,083,473 | |
Total Liabilities and Shareholders’ Equity | 3,267,418 | 3,135,813 | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Current assets: | |||
Cash and cash equivalents | 7,426 | 7,687 | |
Restricted cash | 0 | 0 | |
Short-term investments | 0 | 0 | |
Accounts receivable, net | 447 | 1,455 | |
Spare parts and supplies, net | 0 | 0 | |
Prepaid expenses and other | 224 | 82 | |
Total | 8,097 | 9,224 | |
Property and equipment at cost | 82,902 | 74,562 | |
Less accumulated depreciation and amortization | (12,569) | (11,717) | |
Property and equipment, net | 70,333 | 62,845 | |
Long-term prepayments and other | 181 | 183 | |
Deferred tax assets, net | 0 | 0 | |
Goodwill and other intangible assets, net | 1,040 | 1,155 | |
Intercompany receivable | 0 | 0 | |
Investment in consolidated subsidiaries | 0 | 0 | |
Total Assets | 79,651 | 73,407 | |
Current liabilities: | |||
Accounts payable | 1,780 | 1,574 | |
Air traffic liability | 4,304 | 4,727 | |
Other accrued liabilities | 227 | 350 | |
Current maturities of long-term debt, less discount, and capital lease obligations | 0 | 0 | |
Total | 6,311 | 6,651 | |
Long-term debt and capital lease obligations | 0 | 0 | |
Intercompany payable | 11,308 | 11,183 | |
Other liabilities and deferred credits: | |||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | |
Other liabilities and deferred credits | 1,112 | 1,105 | |
Deferred tax liabilities, net | 0 | 0 | |
Total | 1,112 | 1,105 | |
Shareholders’ equity | 60,920 | 54,468 | |
Total Liabilities and Shareholders’ Equity | $ 79,651 | $ 73,407 | |
[1] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. | ||
[2] | Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 2 to the financial statements contained in Part I, Item 1 of this report for additional information. |
Condensed Consolidating Finan59
Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | $ 225,545 | $ 208,949 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | 0 | 0 |
Additions to property and equipment, including pre-delivery deposits | (110,897) | (53,130) |
Purchases of investments | (30,386) | (68,155) |
Sales of investments | 53,984 | 78,301 |
Net cash used in investing activities | (87,299) | (42,984) |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | (20,395) | (21,872) |
Dividend payments | (6,145) | 0 |
Net payments from affiliates | 0 | 0 |
Repurchases of common stock | (20,245) | 0 |
Other | (3,229) | (7,295) |
Net cash used in financing activities | (50,014) | (29,167) |
Net increase in cash and cash equivalents | 88,232 | 136,798 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 191,953 | 330,991 |
Cash, cash equivalents, and restricted cash - End of Period | 280,185 | 467,789 |
Eliminations | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | 0 | 0 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | 12,500 | 1,495 |
Additions to property and equipment, including pre-delivery deposits | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Net cash used in investing activities | 12,500 | 1,495 |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Dividend payments | 0 | |
Net payments from affiliates | (12,500) | (1,495) |
Repurchases of common stock | 0 | |
Other | 0 | 0 |
Net cash used in financing activities | (12,500) | (1,495) |
Net increase in cash and cash equivalents | 0 | 0 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 0 | 0 |
Cash, cash equivalents, and restricted cash - End of Period | 0 | 0 |
Parent Issuer / Guarantor | Reportable Legal Entities | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | (931) | (1,102) |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | (6,500) | 0 |
Additions to property and equipment, including pre-delivery deposits | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Net cash used in investing activities | (6,500) | 0 |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Dividend payments | (6,145) | |
Net payments from affiliates | 6,000 | 1,495 |
Repurchases of common stock | (20,245) | |
Other | 78 | 48 |
Net cash used in financing activities | (20,312) | 1,543 |
Net increase in cash and cash equivalents | (27,743) | 441 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 57,405 | 67,629 |
Cash, cash equivalents, and restricted cash - End of Period | 29,662 | 68,070 |
Subsidiary Issuer / Guarantor | Reportable Legal Entities | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | 224,935 | 210,250 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | (6,000) | (1,495) |
Additions to property and equipment, including pre-delivery deposits | (102,595) | (52,266) |
Purchases of investments | (30,386) | (68,155) |
Sales of investments | 53,984 | 78,301 |
Net cash used in investing activities | (84,997) | (43,615) |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | (20,395) | (21,872) |
Dividend payments | 0 | |
Net payments from affiliates | 0 | 0 |
Repurchases of common stock | 0 | |
Other | (3,307) | (7,343) |
Net cash used in financing activities | (23,702) | (29,215) |
Net increase in cash and cash equivalents | 116,236 | 137,420 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 126,861 | 254,985 |
Cash, cash equivalents, and restricted cash - End of Period | 243,097 | 392,405 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | 1,541 | (199) |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | 0 | 0 |
Additions to property and equipment, including pre-delivery deposits | (8,302) | (864) |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Net cash used in investing activities | (8,302) | (864) |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Dividend payments | 0 | |
Net payments from affiliates | 6,500 | 0 |
Repurchases of common stock | 0 | |
Other | 0 | 0 |
Net cash used in financing activities | 6,500 | 0 |
Net increase in cash and cash equivalents | (261) | (1,063) |
Cash, cash equivalents, and restricted cash - Beginning of Period | 7,687 | 8,377 |
Cash, cash equivalents, and restricted cash - End of Period | $ 7,426 | $ 7,314 |