Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 26, 2019 | |
Cover page. | ||
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-31443 | |
Entity Registrant Name | HAWAIIAN HOLDINGS INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 71-0879698 | |
Entity Address, Address Line One | 3375 Koapaka Street, | |
Entity Address, Address Line Two | Suite G-350 | |
Entity Address, City or Town | Honolulu, | |
Entity Address, State or Province | HI | |
Entity Address, Postal Zip Code | 96819 | |
City Area Code | (808) | |
Local Phone Number | 835-3700 | |
Title of 12(b) Security | Common Stock ($0.01 par value) | |
Trading Symbol | HA | |
Security Exchange Name | NASDAQ | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 47,289,714 | |
Amendment Flag | false | |
Entity Central Index Key | 0001172222 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Revenue: | ||||
Operating Revenue | $ 712,189 | $ 715,447 | $ 1,368,940 | $ 1,380,859 |
Operating Expenses: | ||||
Wages and benefits | 180,070 | 171,555 | 355,135 | 340,264 |
Aircraft fuel, including taxes and delivery | 140,600 | 153,026 | 266,704 | 286,472 |
Maintenance, materials and repairs | 58,131 | 60,970 | 121,176 | 119,111 |
Aircraft and passenger servicing | 39,641 | 38,626 | 78,541 | 75,144 |
Depreciation and amortization | 39,527 | 32,919 | 77,678 | 65,164 |
Aircraft rent | 30,843 | 29,865 | 61,239 | 61,765 |
Commissions and other selling | 32,471 | 31,853 | 63,307 | 63,778 |
Other rentals and landing fees | 31,386 | 31,184 | 62,432 | 61,999 |
Purchased services | 32,733 | 31,474 | 65,186 | 62,595 |
Contract terminations expense | 0 | 0 | 0 | 35,322 |
Other | 37,906 | 41,047 | 75,985 | 80,052 |
Total | 623,308 | 622,519 | 1,227,383 | 1,251,666 |
Operating Income (Loss) | 88,881 | 92,928 | 141,557 | 129,193 |
Nonoperating Income (Expense): | ||||
Interest expense and amortization of debt discounts and issuance costs | (7,300) | (7,627) | (14,830) | (16,182) |
Gains (losses) on fuel derivatives | (3,220) | 18,952 | (2,650) | 23,569 |
Interest income | 3,074 | 1,931 | 6,057 | 3,405 |
Capitalized interest | 1,257 | 2,355 | 2,542 | 4,593 |
Other, net | (3,083) | (2,752) | (4,108) | (1,696) |
Total | (9,272) | 12,859 | (12,989) | 13,689 |
Income Before Income Taxes | 79,609 | 105,787 | 128,568 | 142,882 |
Income tax expense | 21,776 | 26,307 | 34,377 | 34,860 |
Net Income | $ 57,833 | $ 79,480 | $ 94,191 | $ 108,022 |
Net Income Per Common Stock Share: | ||||
Basic (in dollars per share) | $ 1.21 | $ 1.57 | $ 1.96 | $ 2.12 |
Diluted (in dollars per share) | $ 1.21 | $ 1.56 | $ 1.96 | $ 2.12 |
Weighted Average Number of Common Stock Shares Outstanding: | ||||
Basic (in shares) | 47,854 | 50,776 | 48,122 | 50,915 |
Diluted (in shares) | 47,889 | 50,878 | 48,158 | 51,038 |
Passenger | ||||
Operating Revenue: | ||||
Operating Revenue | $ 653,423 | $ 655,162 | $ 1,254,727 | $ 1,266,762 |
Other | ||||
Operating Revenue: | ||||
Operating Revenue | $ 58,766 | $ 60,285 | $ 114,213 | $ 114,097 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 57,833 | $ 79,480 | $ 94,191 | $ 108,022 |
Other comprehensive income (loss), net: | ||||
Net change related to employee benefit plans, net of tax expense | 669 | 514 | 1,245 | 1,027 |
Net change in derivative instruments, net of tax expense (benefit) | (3,646) | (2,501) | ||
Net change in derivative instruments, net of tax expense (benefit) | 9,263 | 2,019 | ||
Net change in available-for-sale investments, net of tax expense (benefit) | 769 | 167 | 1,309 | (293) |
Net current-period other comprehensive income (loss) | (2,208) | 9,944 | 53 | 2,753 |
Total Comprehensive Income | $ 55,625 | $ 89,424 | $ 94,244 | $ 110,775 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net change related to employee benefit plans, tax expense | $ 218 | $ 166 | $ 352 | $ 332 |
Net change in derivative instruments, tax benefit | 1,186 | 811 | ||
Net change in derivative instruments, tax expense | 2,999 | 654 | ||
Net change in available-for-sale investments, tax expense (benefit) | $ 250 | $ 54 | $ 425 | $ (95) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 341,304 | $ 268,577 |
Short-term investments | 198,146 | 232,241 |
Accounts receivable, net | 109,726 | 111,834 |
Spare parts and supplies, net | 35,897 | 33,942 |
Prepaid expenses and other | 53,279 | 58,573 |
Total | 738,352 | 705,167 |
Property and equipment, less accumulated depreciation and amortization of $697,166 and $663,461 as of June 30, 2019 and December 31, 2018, respectively | 2,156,582 | 2,185,111 |
Other Assets: | ||
Operating lease right-of-use assets | 601,966 | 0 |
Long-term prepayments and other | 150,952 | 185,556 |
Intangible assets, less accumulated amortization of $18,032 and $18,939 as of June 30, 2019 and December 31, 2018, respectively | 13,668 | 14,149 |
Goodwill | 106,663 | 106,663 |
Total Assets | 3,768,183 | 3,196,646 |
Current Liabilities: | ||
Accounts payable | 150,131 | 143,146 |
Air traffic liability and current frequent flyer deferred revenue | 698,169 | 603,736 |
Other accrued liabilities | 164,034 | 158,154 |
Current maturities of long-term debt and finance lease obligations | 50,029 | 101,097 |
Current maturities of operating leases | 89,434 | 0 |
Total | 1,151,797 | 1,006,133 |
Long-Term Debt and Finance Lease Obligations | 515,254 | 608,684 |
Other Liabilities and Deferred Credits: | ||
Noncurrent operating leases | 469,543 | 0 |
Accumulated pension and other post-retirement benefit obligations | 181,599 | 182,620 |
Other liabilities and deferred credits | 100,847 | 119,826 |
Noncurrent frequent flyer deferred revenue | 172,343 | 163,619 |
Deferred tax liability, net | 170,110 | 167,770 |
Total | 1,094,442 | 633,835 |
Commitments and Contingencies | ||
Shareholders’ Equity: | ||
Special preferred stock, $0.01 par value per share, three shares issued and outstanding as of June 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.01 par value per share, 47,506,021 and 48,540,280 shares outstanding as of June 30, 2019 and December 31, 2018, respectively | 475 | 485 |
Capital in excess of par value | 130,243 | 128,448 |
Accumulated income | 969,059 | 912,201 |
Accumulated other comprehensive loss, net | (93,087) | (93,140) |
Total | 1,006,690 | 947,994 |
Total Liabilities and Shareholders’ Equity | $ 3,768,183 | $ 3,196,646 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation and amortization | $ 697,166 | $ 663,461 |
Intangible assets, accumulated amortization | $ 18,032 | $ 18,939 |
Special preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Special preferred stock, shares issued (in shares) | 3 | 3 |
Special preferred stock, shares outstanding (in shares) | 3 | 3 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares outstanding (in shares) | 47,506,021 | 48,540,280 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Special Preferred Stock | Capital In Excess of Par Value | Accumulated Income | Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance at Dec. 31, 2017 | $ 845,125 | $ 512 | [1] | $ 0 | [2] | $ 126,743 | $ 793,134 | $ (75,264) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 28,542 | 28,542 | ||||||
Dividends declared on common stock ($0.12 per share) | (6,145) | (6,145) | ||||||
Other comprehensive income (loss) | (7,191) | (7,191) | ||||||
Issuance of shares of common stock, net of shares withheld for taxes | (3,229) | 1 | [1] | (3,230) | ||||
Repurchase and retirement of shares of common stock | (20,243) | (5) | [1] | (20,238) | ||||
Share-based compensation expense | 1,355 | 1,355 | ||||||
Ending balance at Mar. 31, 2018 | 838,214 | 508 | [1] | 0 | [2] | 124,868 | 795,293 | (82,455) |
Beginning balance at Dec. 31, 2017 | 845,125 | 512 | [1] | 0 | [2] | 126,743 | 793,134 | (75,264) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 108,022 | |||||||
Other comprehensive income (loss) | 2,753 | |||||||
Ending balance at Jun. 30, 2018 | 920,047 | 507 | [1] | 0 | [2] | 125,871 | 866,180 | (72,511) |
Beginning balance at Mar. 31, 2018 | 838,214 | 508 | [1] | 0 | [2] | 124,868 | 795,293 | (82,455) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 79,480 | 79,480 | ||||||
Dividends declared on common stock ($0.12 per share) | (6,093) | (6,093) | ||||||
Other comprehensive income (loss) | 9,944 | 9,944 | ||||||
Issuance of shares of common stock, net of shares withheld for taxes | (296) | (296) | ||||||
Repurchase and retirement of shares of common stock | (2,501) | (1) | [1] | (2,500) | ||||
Share-based compensation expense | 1,299 | 1,299 | ||||||
Ending balance at Jun. 30, 2018 | 920,047 | 507 | [1] | 0 | [2] | 125,871 | 866,180 | (72,511) |
Beginning balance at Dec. 31, 2018 | 947,994 | 485 | [3] | 0 | [4] | 128,448 | 912,201 | (93,140) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 36,358 | 36,358 | ||||||
Dividends declared on common stock ($0.12 per share) | (5,811) | (5,811) | ||||||
Other comprehensive income (loss) | 2,261 | 2,261 | ||||||
Issuance of shares of common stock, net of shares withheld for taxes | (982) | 1 | [3] | (983) | ||||
Repurchase and retirement of shares of common stock | (11,086) | (4) | [3] | (11,082) | ||||
Share-based compensation expense | 1,426 | 1,426 | ||||||
Ending balance at Mar. 31, 2019 | 975,060 | 482 | [3] | 0 | [4] | 128,891 | 936,566 | (90,879) |
Beginning balance at Dec. 31, 2018 | 947,994 | 485 | [3] | 0 | [4] | 128,448 | 912,201 | (93,140) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 94,191 | |||||||
Dividends declared on common stock ($0.12 per share) | (11,600) | |||||||
Other comprehensive income (loss) | 53 | |||||||
Ending balance at Jun. 30, 2019 | 1,006,690 | 475 | [3] | 0 | [4] | 130,243 | 969,059 | (93,087) |
Beginning balance at Mar. 31, 2019 | 975,060 | 482 | [3] | 0 | [4] | 128,891 | 936,566 | (90,879) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net Income | 57,833 | 57,833 | ||||||
Dividends declared on common stock ($0.12 per share) | (5,743) | (5,743) | ||||||
Other comprehensive income (loss) | (2,208) | (2,208) | ||||||
Issuance of shares of common stock, net of shares withheld for taxes | (32) | 0 | [3] | (32) | ||||
Repurchase and retirement of shares of common stock | (19,604) | (7) | [3] | (19,597) | ||||
Share-based compensation expense | 1,384 | 1,384 | ||||||
Ending balance at Jun. 30, 2019 | $ 1,006,690 | $ 475 | [3] | $ 0 | [4] | $ 130,243 | $ 969,059 | $ (93,087) |
[1] | Common Stock— $0.01 par value; 118,000,000 authorized as of June 30, 2018 and December 31, 2017 . | |||||||
[2] | Special Preferred Stock— $0.01 par value; 2,000,000 shares authorized as of June 30, 2018 and December 31, 2017 . | |||||||
[3] | Common Stock— $0.01 par value; 118,000,000 authorized as of June 30, 2019 and December 31, 2018 . | |||||||
[4] | Special Preferred Stock— $0.01 par value; 2,000,000 shares authorized as of June 30, 2019 and December 31, 2018 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||||||||
Dividends declared on common stock (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | |||
Issuance of common stock related to stock awards (in shares) | 28,927 | 65,517 | 29,006 | 146,923 | ||||
Number of shares repurchased and retired (in shares) | 725,105 | 403,598 | 65,389 | 548,861 | 1,100,000 | 614,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 118,000,000 | 118,000,000 | 118,000,000 | 118,000,000 | 118,000,000 | 118,000,000 | ||
Special preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Special preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by Operating Activities | $ 311,212 | $ 373,761 |
Cash flows from Investing Activities: | ||
Additions to property and equipment, including pre-delivery payments | (151,577) | (258,112) |
Proceeds from the disposition of aircraft related equipment | 4,350 | 987 |
Purchases of investments | (189,929) | (110,092) |
Sales of investments | 225,706 | 119,236 |
Other | (6,275) | 0 |
Net cash used in investing activities | (117,725) | (247,981) |
Cash flows from Financing Activities: | ||
Long-term borrowings | 0 | 86,500 |
Repayments of long-term debt and finance lease obligations | (77,471) | (30,047) |
Dividend payments | (11,554) | (12,238) |
Debt issuance costs | (33) | (889) |
Repurchases of common stock | (30,690) | (22,745) |
Other | (1,012) | (3,523) |
Net cash provided by (used in) financing activities | (120,760) | 17,058 |
Net increase in cash and cash equivalents | 72,727 | 142,838 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 268,577 | 191,953 |
Cash, cash equivalents, and restricted cash - End of Period | $ 341,304 | $ 334,791 |
Business and Basis of Presentat
Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation Hawaiian Holdings, Inc. (the Company, Holdings, we, us and our) and its direct wholly-owned subsidiary, Hawaiian Airlines, Inc. (Hawaiian), are 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. 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, 2018 . |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016-02), which was subsequently codified within Accounting Standards Codification (ASC) 842, Leases (ASC 842). ASC 842 requires a lessee to recognize a right-of-use asset and a lease liability in the statement of financial position for all leases (with the exception of short-term leases) at the lease commencement date and recognize expenses similar to the current ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods beginning after December 15, 2018. The Company adopted ASC 842 as of January 1, 2019 using the transition method that provides for a cumulative-effect adjustment to retained earnings upon adoption. The Company elected the package of transition provisions available for expired or existing contracts, which allows the Company to carry-forward our historical assessments of (a) whether contracts are, or contain leases, (b) lease classification, and (c) initial direct costs. The adoption of the ASC 842 had a significant impact on the Company's consolidated balance sheet due to the recognition of approximately $603.9 million of operating lease liabilities and right-of-use (ROU) assets for operating leases of $649.3 million . Additionally, the Company recognized a $4.9 million (net of tax of $1.6 million ) cumulative effect adjustment credit to retained earnings. The adjustment to retained earnings was driven principally by ASC 842's elimination of the previous build-to-suit lease accounting guidance under ASC 840, Leases , and resulted in the derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period. ASC 842 then required the application of lease accounting to the agreement, which resulted in an operating lease. This resulted in the recognition of a ROU asset, inclusive of building costs incurred by the Company to place the asset into service, of $124.7 million , and a lease liability of $90.8 million . The unaudited Consolidated Financial Statements as of and for the three and six months ended June 30, 2019 are presented under the new standard, while comparative periods presented are not adjusted and continue to be reported in accordance with our historical accounting policy. See Note 9 , Leases, for additional information. In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), 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 was effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted this standard during the first quarter of 2019. The adoption of this standard did not have an impact on the Company's Consolidated Financial Statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASU 2016-13), which requires the use of an "expected loss" model on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 replaces the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company will adopt ASU 2016-13 effective January 1, 2020, and is evaluating the impact the adoption the standard will have on its consolidated financial statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, Affected line items in the statement where net income is presented 2019 2018 2019 2018 (in thousands) Derivatives designated as hedging instruments under ASC 815 Foreign currency derivative losses (gains) $ (1,749 ) $ 884 $ (3,336 ) $ 2,105 Passenger revenue Total before tax (1,749 ) 884 (3,336 ) 2,105 Tax expense (benefit) 426 (216 ) 817 (515 ) Total, net of tax $ (1,323 ) $ 668 $ (2,519 ) $ 1,590 Amortization of defined benefit plan items Actuarial loss $ 831 $ 624 $ 1,662 $ 1,248 Nonoperating Income (Expense), Other, net Prior service cost 56 56 112 112 Nonoperating Income (Expense), Other, net Total before tax 887 680 1,774 1,360 Tax benefit (218 ) (166 ) (386 ) (333 ) Total, net of tax $ 669 $ 514 $ 1,388 $ 1,027 Short-term investments Realized losses (gain) on sales of investments, net $ 69 $ 26 $ (28 ) $ 31 Nonoperating Income (Expense), Other, net Total before tax 69 26 (28 ) 31 Tax expense (benefit) (17 ) (6 ) 7 (7 ) Total, net of tax $ 52 $ 20 $ (21 ) $ 24 Total reclassifications for the period $ (602 ) $ 1,202 $ (1,152 ) $ 2,641 A roll-forward of the amounts included in accumulated other comprehensive income (loss), net of taxes, for the three and six months ended June 30, 2019 and 2018 is as follows: Three months ended June 30, 2019 Foreign Currency Derivatives Defined Benefit Short-Term Investments Total (in thousands) Beginning balance $ 4,462 $ (95,279 ) $ (62 ) $ (90,879 ) Other comprehensive income (loss) before reclassifications, net of tax (2,323 ) — 717 (1,606 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (1,323 ) 669 52 (602 ) Net current-period other comprehensive income (loss) (3,646 ) 669 769 (2,208 ) Ending balance $ 816 $ (94,610 ) $ 707 $ (93,087 ) Three months ended June 30, 2018 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance $ (5,995 ) $ (75,440 ) $ (1,020 ) $ (82,455 ) Other comprehensive income before reclassifications, net of tax 8,595 — 147 8,742 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 668 514 20 1,202 Net current-period other comprehensive income 9,263 514 167 9,944 Ending balance $ 3,268 $ (74,926 ) $ (853 ) $ (72,511 ) Six months ended June 30, 2019 Foreign Currency Derivatives Defined Benefit Pension Items Short-Term Investments Total (in thousands) Beginning balance 3,317 (95,855 ) (602 ) (93,140 ) Other comprehensive income (loss) before reclassifications, net of tax 18 (143 ) 1,330 1,205 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (2,519 ) 1,388 (21 ) (1,152 ) Net current-period other comprehensive income (2,501 ) 1,245 1,309 53 Ending balance 816 (94,610 ) 707 (93,087 ) Six months ended June 30, 2018 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance 1,249 (75,953 ) (560 ) (75,264 ) Other comprehensive loss before reclassifications, net of tax 429 — (317 ) 112 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 1,590 1,027 24 2,641 Net current-period other comprehensive income (loss) 2,019 1,027 (293 ) 2,753 Ending balance 3,268 (74,926 ) (853 ) (72,511 ) |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
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. Antidilutive shares excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands, except for per share data) Numerator: Net Income $ 57,833 $ 79,480 $ 94,191 $ 108,022 Denominator: Weighted average common stock shares outstanding - Basic 47,854 50,776 48,122 50,915 Assumed exercise of stock options and awards 35 102 36 123 Weighted average common stock shares outstanding - Diluted 47,889 50,878 48,158 51,038 Net Income Per Share Basic $ 1.21 $ 1.57 $ 1.96 $ 2.12 Diluted $ 1.21 $ 1.56 $ 1.96 $ 2.12 Stock Repurchase Program In November 2017, the Company's Board of Directors approved the repurchase of up to $100 million of its outstanding common stock over a two-year period through December 2019 via the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules and regulations, which was completed in December 2018. In November 2018, the Company's Board of Directors approved a new stock repurchase program pursuant to which the Company may repurchase up to an additional $100 million of its outstanding common stock over a two-year period through December 2020. The stock repurchase program is subject to modification or termination at any time. The Company will repurchase shares of its common stock subject to prevailing market conditions and may discontinue such repurchases at any time. The Company spent $19.6 million and $30.7 million to repurchase and retire approximately 725 thousand shares and 1.1 million shares of the Company's common stock in open market transactions during the three and six months ended June 30, 2019 , respectively. The Company spent $2.5 million and $22.8 million to repurchase and retire approximately 65 thousand shares and 614 thousand shares of the Company's common stock in open market transactions during the three and six months ended June 30, 2018 , respectively. As of June 30, 2019 , the Company had $66.8 million remaining to spend under its existing stock repurchase program. Dividends During the three months ended June 30, 2019 , the Company declared a cash dividend of $0.12 per share for stockholders of record as of May 17, 2019, which was paid on May 31, 2019, totaling $5.7 million . During the six months ended June 30, 2019 , the Company declared and paid cash dividends of $0.12 per share, totaling $11.6 million |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The majority of the Company's 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. 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 U.S. Department of Transportation) are summarized below: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Geographic Information (in thousands) Domestic $ 531,725 $ 528,476 $ 1,009,245 $ 1,020,678 Pacific 180,464 186,971 359,695 360,181 Total operating revenue $ 712,189 $ 715,447 $ 1,368,940 $ 1,380,859 Hawaiian attributes operating revenue by geographic region based on the destination of each flight segment. Hawaiian's tangible assets consist primarily of flight equipment, which are mobile across geographic markets, and therefore, have not been allocated to specific geographic regions. 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 typically 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 in other revenue. 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Passenger Revenue by Type (in thousands) Passenger revenue, excluding frequent flyer $ 613,574 $ 618,406 $ 1,181,429 $ 1,196,361 Frequent flyer revenue, transportation component 39,849 36,756 73,298 70,401 Passenger Revenue $ 653,423 $ 655,162 $ 1,254,727 $ 1,266,762 Other revenue (e.g., cargo and other miscellaneous) $ 36,571 $ 41,539 $ 72,802 $ 80,229 Frequent flyer revenue, marketing and brand component 22,195 18,746 41,411 33,868 Other Revenue $ 58,766 $ 60,285 $ 114,213 $ 114,097 For the three months ended June 30, 2019 and 2018 , the Company's total revenue was $712.2 million and $715.4 million , respectively. As of June 30, 2019 and December 31, 2018 , the Company's Air traffic liability balance as it relates to passenger tickets (excluding frequent flyer) was $521.0 million and $427.8 million , respectively, which represents future revenue that is expected to be realized over the next 12 months . During the three months ended June 30, 2019 and 2018 , the amount of passenger ticket revenue recognized that was included in Air traffic liability as of the beginning of the respective period was $333.9 million and $293.1 million . During the six months ended June 30, 2019 and 2018 , the amount of passenger ticket revenue recognized that was included in Air traffic liability as of the beginning of the respective period was $389.8 million and $332.5 million . 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. Certain governmental taxes are imposed on the Company's ticket sales through a fee included in ticket prices. The Company collects these fees and remits them to the appropriate government agency. 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). These fees have been presented on a net basis in the accompanying Consolidated Statements of Operations and recorded as a liability until remitted. 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. The equivalent ticket value (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. On a quarterly basis, the Company calculates the 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 in satisfying the obligation. During the first quarter of 2018, the Company amended its partnership with Barclaycard US, Hawaiian's co-branded credit card partner. Management determined that the amendment should be accounted for as a termination of the existing contract and the creation of a new contract under ASC 606 and the relative selling price was determined for each performance obligation of the new agreement. The new agreement continues through 2024 and includes improved economics and enhanced product offerings for the Company's Barclay's co-branded cardholders. The amended agreement includes the following performance obligations: (i) transportation that will ultimately be provided when mileage credits are redeemed (transportation); (ii) the Hawaiian Airlines brand and access to its members lists (collectively, brand performance); (iii) marketing; and (iv) airline benefits to cardholders, including discounts and anniversary travel benefits, baggage waivers and inflight purchase credits. The Company determined the relative fair value of each performance obligation by estimating the selling prices of the deliverables by considering discounted cash flows using multiple inputs and assumptions, including: (1) the expected number of miles to be awarded and redeemed; (2) the estimated weighted average equivalent ticket value, adjusted by a fulfillment discount; (3) the estimated total annual cardholder spend; (4) an estimated royalty rate for the Hawaiian portfolio; and (5) the expected use of each of the airline benefits. The overall consideration received is allocated to the performance obligations based on their relative selling prices. The transportation performance obligation is deferred and recognized as passenger revenue when the transportation is expected to be provided. Accounting for mileage sales to co-branded partners involves the use of various techniques to estimate revenue. 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 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 in Air traffic liability and current frequent flyer deferred revenue and Noncurrent frequent flyer deferred revenue in the Company's consolidated balance sheet based on estimated and expected redemption patterns using historical data and analysis. As of June 30, 2019 and December 31, 2018 , the Company's contract liability balance was $344.1 million and $332.2 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. |
Short-Term Investments
Short-Term Investments | 6 Months Ended |
Jun. 30, 2019 | |
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 securities are reflected as a component of Accumulated other comprehensive loss, net. The following is a summary of short-term investments held as of June 30, 2019 and December 31, 2018 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2019 (in thousands) Corporate debt $ 107,688 $ 740 $ (29 ) $ 108,399 U.S. government and agency debt 42,174 270 (2 ) 42,442 Certificates of Deposit 35,345 — — 35,345 Other fixed income securities 11,960 — — 11,960 Total short-term investments $ 197,167 $ 1,010 $ (31 ) $ 198,146 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 (in thousands) Corporate debt $ 142,748 $ 49 $ (695 ) $ 142,102 U.S. government and agency debt 37,163 3 (59 ) 37,107 Municipal bonds 9,903 — (32 ) 9,871 Other fixed income securities 43,183 2 (24 ) 43,161 Total short-term investments $ 232,997 $ 54 $ (810 ) $ 232,241 Contractual maturities of short-term investments as of June 30, 2019 are shown below. Under 1 Year 1 to 5 Years Total (in thousands) Corporate debt $ 23,368 $ 85,031 $ 108,399 U.S. government and agency debt 6,032 36,410 42,442 Certificates of Deposit 35,345 — 35,345 Other fixed income securities 11,960 — 11,960 Total short-term investments $ 76,705 $ 121,441 $ 198,146 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 130,657 $ 93,000 $ 37,657 $ — Short-term investments 198,146 — 198,146 — Fuel derivative contracts 4,957 — 4,957 — Foreign currency derivatives 2,104 — 2,104 — Total assets measured at fair value $ 335,864 $ 93,000 $ 242,864 $ — Foreign currency derivatives 2,171 — 2,171 — Total liabilities measured at fair value $ 2,171 $ — $ 2,171 $ — Fair Value Measurements as of December 31, 2018 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 121,154 $ 42,175 $ 78,979 $ — Short-term investments 232,241 — 232,241 — Fuel derivative contracts 1,572 — 1,572 — Foreign currency derivatives 4,579 — 4,579 — Total assets measured at fair value $ 359,546 $ 42,175 $ 317,371 $ — Foreign currency derivatives 1,347 — 1,347 — Total liabilities measured at fair value $ 1,347 $ — $ 1,347 $ — Cash equivalents. The Company's Level 1 cash equivalents consist of money market securities and certificates of deposit. The carrying amounts approximate fair value because of the short-term maturity of these assets. The Company's Level 2 cash equivalents consist of U.S. agency bonds, mutual funds, and commercial paper. These instruments are valued using quoted prices for similar assets in active markets. Short-term investments. Short-term investments shown in the table above are classified as available-for-sale. 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, which are not traded on a public exchange. The fair value of these instruments is 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 readily observable in public markets. The table below presents the Company’s debt (excluding obligations under finance leases) measured at fair value: Fair Value of Debt June 30, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Amount Total Level 1 Level 2 Level 3 (in thousands) $ 403,353 $ 411,271 $ — $ — $ 411,271 $ 467,760 $ 461,805 $ — $ — $ 461,805 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 and six months ended June 30, 2019 , the Company primarily used crude oil call options 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 June 30, Six months ended June 30, Fuel derivative contracts 2019 2018 2019 2018 (in thousands) Gains (losses) realized at settlement $ (3,051 ) $ 10,827 $ (5,895 ) $ 16,488 Reversal of prior period unrealized amounts 4,767 (10,748 ) 8,181 (11,792 ) Unrealized gains (losses) that will settle in future periods (4,936 ) 18,873 (4,936 ) 18,873 Gains (losses) on fuel derivatives recorded as nonoperating income (expense) $ (3,220 ) $ 18,952 $ (2,650 ) $ 23,569 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 to the Japanese Yen and the 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 therefore 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 gain of approximately $1.3 million into earnings over the next 12 months from AOCI based on the values of its foreign currency forward contracts at June 30, 2019 . 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 June 30, 2019 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 15,945,400 Japanese Yen June 2020 1,971 (1,621 ) 350 Other liabilities and deferred credits 4,586,250 Japanese Yen June 2021 124 (359 ) (235 ) Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 1,170,150 Japanese Yen September 2019 9 (191 ) (182 ) Fuel derivative contracts Prepaid expenses and other 97,230 gallons June 2020 4,957 — 4,957 Derivative position as of December 31, 2018 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 15,933,550 Japanese Yen December 2019 3,922 (915 ) 3,007 Long-term prepayments and other 4,491,350 Japanese Yen December 2020 633 (292 ) 341 Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 832,900 Japanese Yen March 2019 24 (140 ) (116 ) Fuel derivative contracts Prepaid expenses and other 95,256 gallons December 2019 1,572 — 1,572 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 June 30, Three months ended June 30, Three months ended June 30, 2019 2018 2019 2018 2019 2018 (in thousands) Foreign currency derivatives $ 3,083 $ (11,378 ) $ (1,749 ) $ 884 $ — $ — (Gain) loss recognized in AOCI on derivatives (effective portion) (Gain) loss reclassified from AOCI (Gain) loss recognized in Six months ended June 30, Six months ended June 30, Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in thousands) Foreign currency derivatives (23 ) (569 ) (3,336 ) 2,105 — — 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 assesses 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 June 30, 2019 and December 31, 2018 . 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases As discussed in Note 2 , the Company adopted ASC 842 as of January 1, 2019, using the modified retrospective approach. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. The Company leases aircraft, engines, airport terminal facilities, maintenance hangars, commercial real estate, and other property and equipment, among other items. The Company combines lease and nonlease components in calculating the ROU asset and lease liabilities for the aforementioned asset groups. Certain leases include escalation clauses, renewal options, and/or termination options. When lease renewals or termination options are considered to be reasonably certain, such periods are included in the lease term and fixed payments are included in the calculation of the lease liability and ROU asset. The Company's leases do not provide a readily determinable implicit rate, therefore, the Company utilizes an incremental borrowing rate to discount lease payments based on information available at lease commencement. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. Aircraft and Engines As of June 30, 2019 , the Company leased 19 aircraft, of which 5 are under finance leases and 14 are under operating leases. These leases have remaining lease terms with terms ranging from approximately 1 year to 11 years. The Company also had 5 engines under operating leases with remaining lease terms ranging from less than 1 year to 7 years. Aircraft and engine finance leases continue to be reported on our consolidated balance sheet, while operating leases were added to the balance sheet with the adoption of the new standard. Airport Terminal Facilities The Company's facility leases are primarily for space at airports that it serves, most notably, its operations in the State of Hawai'i. These leases are classified as operating leases and reflect the Company's use of airport terminals, office space, cargo and maintenance facilities. The Company leases space from government agencies that control the use of the airport. The remaining lease terms vary from 1 month to 33 years. At the majority of U.S. airports, the lease rates depend on airport operating costs or the use of the facilities and are reset at least annually. Because of the variable nature of the rates, these leases are not recorded on our balance sheet as a ROU asset and lease liability. Other Commercial Real Estate The Company leases non-airport facility office space supporting its operations, including its headquarters in Honolulu, Hawaii. These leases are classified as operating and have remaining lease terms ranging between 1 to 7 years. Maintenance Hangar In November 2016, the Company entered into a lease agreement with the Department of Transportation of the State of Hawai'i to lease a cargo and maintenance hangar at the Daniel K. Inouye International Airport with a remaining lease term of 33 years. As the hangar was not fully constructed, the Company took responsibility of the construction and was responsible for the remainder of the construction costs of $37.3 million . In accordance with the applicable accounting guidance, specifically as it relates to the Company's involvement in the construction of the hangar, the Company was considered the owner of the asset under construction and previously recognized an additional $73.0 million asset, with a corresponding finance liability, for the amount previously spent by the lessor. As discussed in Note 2 , ASC 842 eliminated the previous build-to-suit lease accounting guidance and resulted in the derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period. ASC 842 then required the application of lease accounting to the agreement. The agreement is accounted for as an operating lease under ASC 842. Other Property and Equipment The Company leases certain IT assets (including data center access, equipment, etc.) and various other non-aircraft equipment. The remaining lease terms range from 1 to 3 years. Certain lease IT assets are embedded within service agreements. The combined lease and nonlease components of those agreements are included in the ROU asset and lease liability. Lease Position as of June 30, 2019 The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet. Classification on the Balance Sheet June 30, 2019 (in thousands) Assets: Operating lease assets Operating lease right-of use assets $ 601,966 Finance lease assets Property and equipment, net 161,203 Total lease assets $ 763,169 Liabilities: Current Operating Current maturities of operating leases $ 89,434 Finance Current maturities of long-term debt and finance lease obligations 21,965 Noncurrent Operating Noncurrent operating leases 469,543 Finance Long-Term Debt and Finance Lease Obligations 149,338 Total lease liabilities $ 730,280 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 8.9 years Weighted-average discount rate Operating leases (1) 4.98 % Finance leases 4.74 % (1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. Lease Costs During the three and six months ended June 30, 2019 , the total lease costs for finance and operating leases were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 6,464 $ 12,562 Interest of lease liabilities 2,121 4,213 Operating lease cost (1) 30,284 60,567 Short-term lease cost (1) 1,328 3,316 Variable lease cost (1) 30,617 60,603 Total lease cost $ 70,814 $ 141,261 (1) Expenses are classified within aircraft rent and other rentals and landing fees in the consolidated statements of operations. During the three and six months ended June 30, 2019 , the cash paid for amounts included in the measurement of lease liabilities were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Operating cash flows from operating leases 29,925 58,883 Operating cash flows from finance leases 2,121 4,213 Financing cash flows from finance lease 5,899 11,521 Undiscounted Cash Flows As of June 30, 2019 , the scheduled future minimum rental payments under operating and finance leases with non-cancellable basic terms of more than one year were as follows: Finance Leases Operating Leases Aircraft Other Aircraft Other (in thousands) Remaining in 2019 $ 12,710 $ 2,271 $ 55,002 $ 4,104 2020 25,433 3,288 92,612 8,219 2021 25,447 1,873 76,766 8,424 2022 25,027 1,781 70,030 8,822 2023 21,997 5,019 61,750 9,029 Thereafter 76,237 7,083 158,493 194,211 Total minimum lease payments 186,851 21,315 514,653 232,809 Less: amounts representing interest (31,775 ) (5,088 ) (73,562 ) (114,924 ) Present value of future minimum lease payments $ 155,076 $ 16,227 $ 441,091 $ 117,885 Less: current maturities of lease obligations (18,497 ) (3,468 ) (86,850 ) (2,583 ) Long-term lease obligations $ 136,579 $ 12,759 $ 354,241 $ 115,302 |
Leases | Leases As discussed in Note 2 , the Company adopted ASC 842 as of January 1, 2019, using the modified retrospective approach. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. The Company leases aircraft, engines, airport terminal facilities, maintenance hangars, commercial real estate, and other property and equipment, among other items. The Company combines lease and nonlease components in calculating the ROU asset and lease liabilities for the aforementioned asset groups. Certain leases include escalation clauses, renewal options, and/or termination options. When lease renewals or termination options are considered to be reasonably certain, such periods are included in the lease term and fixed payments are included in the calculation of the lease liability and ROU asset. The Company's leases do not provide a readily determinable implicit rate, therefore, the Company utilizes an incremental borrowing rate to discount lease payments based on information available at lease commencement. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. Aircraft and Engines As of June 30, 2019 , the Company leased 19 aircraft, of which 5 are under finance leases and 14 are under operating leases. These leases have remaining lease terms with terms ranging from approximately 1 year to 11 years. The Company also had 5 engines under operating leases with remaining lease terms ranging from less than 1 year to 7 years. Aircraft and engine finance leases continue to be reported on our consolidated balance sheet, while operating leases were added to the balance sheet with the adoption of the new standard. Airport Terminal Facilities The Company's facility leases are primarily for space at airports that it serves, most notably, its operations in the State of Hawai'i. These leases are classified as operating leases and reflect the Company's use of airport terminals, office space, cargo and maintenance facilities. The Company leases space from government agencies that control the use of the airport. The remaining lease terms vary from 1 month to 33 years. At the majority of U.S. airports, the lease rates depend on airport operating costs or the use of the facilities and are reset at least annually. Because of the variable nature of the rates, these leases are not recorded on our balance sheet as a ROU asset and lease liability. Other Commercial Real Estate The Company leases non-airport facility office space supporting its operations, including its headquarters in Honolulu, Hawaii. These leases are classified as operating and have remaining lease terms ranging between 1 to 7 years. Maintenance Hangar In November 2016, the Company entered into a lease agreement with the Department of Transportation of the State of Hawai'i to lease a cargo and maintenance hangar at the Daniel K. Inouye International Airport with a remaining lease term of 33 years. As the hangar was not fully constructed, the Company took responsibility of the construction and was responsible for the remainder of the construction costs of $37.3 million . In accordance with the applicable accounting guidance, specifically as it relates to the Company's involvement in the construction of the hangar, the Company was considered the owner of the asset under construction and previously recognized an additional $73.0 million asset, with a corresponding finance liability, for the amount previously spent by the lessor. As discussed in Note 2 , ASC 842 eliminated the previous build-to-suit lease accounting guidance and resulted in the derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period. ASC 842 then required the application of lease accounting to the agreement. The agreement is accounted for as an operating lease under ASC 842. Other Property and Equipment The Company leases certain IT assets (including data center access, equipment, etc.) and various other non-aircraft equipment. The remaining lease terms range from 1 to 3 years. Certain lease IT assets are embedded within service agreements. The combined lease and nonlease components of those agreements are included in the ROU asset and lease liability. Lease Position as of June 30, 2019 The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet. Classification on the Balance Sheet June 30, 2019 (in thousands) Assets: Operating lease assets Operating lease right-of use assets $ 601,966 Finance lease assets Property and equipment, net 161,203 Total lease assets $ 763,169 Liabilities: Current Operating Current maturities of operating leases $ 89,434 Finance Current maturities of long-term debt and finance lease obligations 21,965 Noncurrent Operating Noncurrent operating leases 469,543 Finance Long-Term Debt and Finance Lease Obligations 149,338 Total lease liabilities $ 730,280 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 8.9 years Weighted-average discount rate Operating leases (1) 4.98 % Finance leases 4.74 % (1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. Lease Costs During the three and six months ended June 30, 2019 , the total lease costs for finance and operating leases were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 6,464 $ 12,562 Interest of lease liabilities 2,121 4,213 Operating lease cost (1) 30,284 60,567 Short-term lease cost (1) 1,328 3,316 Variable lease cost (1) 30,617 60,603 Total lease cost $ 70,814 $ 141,261 (1) Expenses are classified within aircraft rent and other rentals and landing fees in the consolidated statements of operations. During the three and six months ended June 30, 2019 , the cash paid for amounts included in the measurement of lease liabilities were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Operating cash flows from operating leases 29,925 58,883 Operating cash flows from finance leases 2,121 4,213 Financing cash flows from finance lease 5,899 11,521 Undiscounted Cash Flows As of June 30, 2019 , the scheduled future minimum rental payments under operating and finance leases with non-cancellable basic terms of more than one year were as follows: Finance Leases Operating Leases Aircraft Other Aircraft Other (in thousands) Remaining in 2019 $ 12,710 $ 2,271 $ 55,002 $ 4,104 2020 25,433 3,288 92,612 8,219 2021 25,447 1,873 76,766 8,424 2022 25,027 1,781 70,030 8,822 2023 21,997 5,019 61,750 9,029 Thereafter 76,237 7,083 158,493 194,211 Total minimum lease payments 186,851 21,315 514,653 232,809 Less: amounts representing interest (31,775 ) (5,088 ) (73,562 ) (114,924 ) Present value of future minimum lease payments $ 155,076 $ 16,227 $ 441,091 $ 117,885 Less: current maturities of lease obligations (18,497 ) (3,468 ) (86,850 ) (2,583 ) Long-term lease obligations $ 136,579 $ 12,759 $ 354,241 $ 115,302 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, Components of Net Period Benefit Cost 2019 2018 2019 2018 (in thousands) Service cost $ 2,096 $ 1,962 $ 4,192 $ 3,924 Other cost: Interest cost 5,608 5,009 11,216 10,018 Expected return on plan assets (5,483 ) (5,588 ) (10,966 ) (11,176 ) Recognized net actuarial loss 887 680 1,774 1,360 Total other components of the net periodic benefit cost 1,012 101 2,024 202 Net periodic benefit cost $ 3,108 $ 2,063 $ 6,216 $ 4,126 Total other components of the net periodic benefit cost are recorded within the nonoperating income (expense), other, net line item in the consolidated statements of operations. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Commitments As of June 30, 2019 , the Company had the following capital commitments consisting of firm aircraft and engine orders and purchase rights for additional aircraft and engines: Aircraft Type Firm Orders Purchase Rights Expected Delivery Dates A321neo aircraft 5 3 Between 2019 and 2020 B787-9 aircraft 10 10 Between 2021 and 2025 Pratt & Whitney spare engines: A321neo spare engines (1) — 2 N/A General Electric GEnx spare engines: B787-9 spare engines 2 2 Between 2021 and 2025 (1) During the second quarter of 2019, the Company took delivery of its remaining A321neo spare engine and maintain purchase rights for an additional two engines, which expire on December 31, 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 12 below for discussion on the contract termination charge. In July 2018, the Company entered into a purchase agreement for the purchase of 10 Boeing 787-9 "Dreamliner" aircraft with purchase rights for an additional 10 aircraft with scheduled delivery from 2021 to 2025. In October 2018, the Company entered into a definitive agreement for the selection of GEnx engines to power its Boeing 787-9 fleet. The agreement provides for the purchase of 20 GEnx engines, the right to purchase an additional 20 GEnx engines, and the purchase of up to four spare engines. The committed expenditures under these agreements are reflected in the table below. In December 2018, the Company entered into an amendment to the purchase agreement with Boeing, which includes an option for the Company to accelerate delivery of Boeing 787-9 aircraft from 2024 and 2025 to 2023; however, the Company does not currently expect to execute the option to accelerate its planned delivery schedule. The Company also intends to enter into additional related agreements in connection with the Boeing 787-9 purchases, including for the purchase of spare parts and materials and related services. Committed capital and operating expenditures include escalation amounts based on estimates. Capital expenditures represent aircraft and aircraft related equipment commitments, and operating expenditures represent all other non-aircraft commitments the Company has entered into. The gross committed expenditures and committed payments for those deliveries as of June 30, 2019 are detailed below: Aircraft and aircraft related Other Total Committed (in thousands) Remaining in 2019 $ 215,928 $ 39,900 $ 255,828 2020 178,828 75,149 253,977 2021 314,557 71,523 386,080 2022 439,856 63,883 503,739 2023 247,785 58,754 306,539 Thereafter 474,484 166,636 641,120 $ 1,871,438 $ 475,845 $ 2,347,283 During the second quarter of 2019, the Company made scheduled payments of $44.8 million to pay off its debt facility entered into for the financing of its Boeing 717-200 aircraft. As of June 30, 2019, all owned Boeing 717-200 aircraft were unencumbered. 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 are included in restricted cash in the Company’s unaudited Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018 , there were no holdbacks held with the Company's credit card processors. 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, excluding frequent flyer deferred revenue), 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
Contract Terminations Expense | 6 Months Ended |
Jun. 30, 2019 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Contract Terminations Expense | Contract Terminations Expense Contract terminations expense For the six months ended June 30, 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 terminations 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 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information 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 14 as Subsidiary Issuer / Guarantor) of pass-through certificates, the Company (which is also referred to in this Note 14 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 June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 711,670 $ 622 $ (103 ) $ 712,189 Operating Expenses: Wages and benefits — 180,070 — — 180,070 Aircraft fuel, including taxes and delivery — 140,600 — — 140,600 Maintenance, materials and repairs — 56,273 1,858 — 58,131 Aircraft and passenger servicing — 39,641 — — 39,641 Commissions and other selling 11 32,480 23 (43 ) 32,471 Aircraft rent — 30,832 11 — 30,843 Other rentals and landing fees — 31,386 — — 31,386 Depreciation and amortization — 37,909 1,618 — 39,527 Purchased services 70 32,467 211 (15 ) 32,733 Other 1,296 36,204 451 (45 ) 37,906 Total 1,377 617,862 4,172 (103 ) 623,308 Operating Income (Loss) (1,377 ) 93,808 (3,550 ) — 88,881 Nonoperating Income (Expense): Undistributed net income of subsidiaries 58,911 — — (58,911 ) — Interest expense and amortization of debt discounts and issuance costs — (7,300 ) — — (7,300 ) Interest income 13 3,061 — — 3,074 Capitalized interest — 1,257 — — 1,257 Losses on fuel derivatives — (3,220 ) — — (3,220 ) Other, net — (3,032 ) (51 ) — (3,083 ) Total 58,924 (9,234 ) (51 ) (58,911 ) (9,272 ) Income (Loss) Before Income Taxes 57,547 84,574 (3,601 ) (58,911 ) 79,609 Income tax expense (benefit) (286 ) 22,819 (757 ) — 21,776 Net Income (Loss) $ 57,833 $ 61,755 $ (2,844 ) $ (58,911 ) $ 57,833 Comprehensive Income (Loss) $ 55,625 $ 59,547 $ (2,844 ) $ (56,703 ) $ 55,625 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended June 30, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 713,127 $ 2,393 $ (73 ) $ 715,447 Operating Expenses: Wages and benefits — 171,555 — — 171,555 Aircraft fuel, including taxes and delivery — 153,026 — — 153,026 Maintenance, materials and repairs — 59,468 1,502 — 60,970 Aircraft and passenger servicing — 38,626 — — 38,626 Commissions and other selling — 31,863 25 (35 ) 31,853 Aircraft rent — 29,865 — — 29,865 Depreciation and amortization — 31,902 1,017 — 32,919 Other rentals and landing fees — 30,952 232 — 31,184 Purchased services (2 ) 31,249 242 (15 ) 31,474 Other 2,099 37,435 1,536 (23 ) 41,047 Total 2,097 615,941 4,554 (73 ) 622,519 Operating Income (Loss) (2,097 ) 97,186 (2,161 ) — 92,928 Nonoperating Income (Expense): Undistributed net income of subsidiaries 81,099 — — (81,099 ) — Interest expense and amortization of debt discounts and issuance costs (3 ) (7,579 ) (45 ) — (7,627 ) Interest income 51 1,880 — — 1,931 Capitalized interest — 2,355 — — 2,355 Gains on fuel derivatives — 18,952 — — 18,952 Other, net — (2,752 ) — — (2,752 ) Total 81,147 12,856 (45 ) (81,099 ) 12,859 Income (Loss) Before Income Taxes 79,050 110,042 (2,206 ) (81,099 ) 105,787 Income tax expense (benefit) (430 ) 27,201 (464 ) — 26,307 Net Income (Loss) $ 79,480 $ 82,841 $ (1,742 ) $ (81,099 ) $ 79,480 Comprehensive Income (Loss) $ 89,424 $ 92,785 $ (1,742 ) $ (91,043 ) $ 89,424 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Six months ended June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 1,367,760 $ 1,414 $ (234 ) $ 1,368,940 Operating Expenses: Aircraft fuel, including taxes and delivery — 266,704 — — 266,704 Wages and benefits — 355,135 — — 355,135 Aircraft rent — 61,199 40 — 61,239 Maintenance materials and repairs — 118,075 3,101 — 121,176 Aircraft and passenger servicing — 78,541 — — 78,541 Commissions and other selling 11 63,345 41 (90 ) 63,307 Depreciation and amortization — 74,401 3,277 — 77,678 Other rentals and landing fees — 62,405 27 — 62,432 Purchased services 124 64,660 433 (31 ) 65,186 Other 3,138 72,060 900 (113 ) 75,985 Total 3,273 1,216,525 7,819 (234 ) 1,227,383 Operating Income (Loss) (3,273 ) 151,235 (6,405 ) — 141,557 Nonoperating Income (Expense): Undistributed net income of subsidiaries 96,760 — — (96,760 ) — Interest expense and amortization of debt discounts and issuance costs — (14,814 ) (16 ) — (14,830 ) Interest income 21 6,036 — — 6,057 Capitalized interest — 2,542 — — 2,542 Losses on fuel derivatives — (2,650 ) — — (2,650 ) Other, net — (4,101 ) (7 ) — (4,108 ) Total 96,781 (12,987 ) (23 ) (96,760 ) (12,989 ) Income (Loss) Before Income Taxes 93,508 138,248 (6,428 ) (96,760 ) 128,568 Income tax expense (benefit) (683 ) 36,410 (1,350 ) — 34,377 Net Income (Loss) $ 94,191 $ 101,838 $ (5,078 ) $ (96,760 ) $ 94,191 Comprehensive Income (Loss) $ 94,244 $ 101,891 $ (5,078 ) $ (96,813 ) $ 94,244 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Six months ended June 30, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 1,376,539 $ 4,520 $ (200 ) $ 1,380,859 Operating Expenses: Aircraft fuel, including taxes and delivery — 286,472 — — 286,472 Wages and benefits — 340,264 — — 340,264 Aircraft rent — 61,765 — — 61,765 Maintenance materials and repairs — 116,962 2,149 — 119,111 Aircraft and passenger servicing — 75,144 — — 75,144 Commissions and other selling (5 ) 63,821 45 (83 ) 63,778 Depreciation and amortization — 63,177 1,987 — 65,164 Other rentals and landing fees — 61,767 232 — 61,999 Purchased services 88 62,117 420 (30 ) 62,595 Contract termination expense — 35,322 — — 35,322 Other 3,680 74,558 1,901 (87 ) 80,052 Total 3,763 1,241,369 6,734 (200 ) 1,251,666 Operating Income (Loss) (3,763 ) 135,170 (2,214 ) — 129,193 Nonoperating Income (Expense): Undistributed net income of subsidiaries 110,909 — — (110,909 ) — Interest expense and amortization of debt discounts and issuance costs (3 ) (16,134 ) (45 ) — (16,182 ) Interest income 116 3,289 — — 3,405 Capitalized interest — 4,593 — — 4,593 Gains on fuel derivatives — 23,569 — — 23,569 Other, net (4 ) (1,697 ) 5 — (1,696 ) Total 111,018 13,620 (40 ) (110,909 ) 13,689 Income (Loss) Before Income Taxes 107,255 148,790 (2,254 ) (110,909 ) 142,882 Income tax expense (benefit) (767 ) 36,101 (474 ) — 34,860 Net Income (Loss) $ 108,022 $ 112,689 $ (1,780 ) $ (110,909 ) $ 108,022 Comprehensive Income (Loss) $ 110,775 $ 115,442 $ (1,780 ) $ (113,662 ) $ 110,775 Condensed Consolidating Balance Sheets June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 4,059 $ 328,541 $ 8,704 $ — $ 341,304 Short-term investments — 198,146 — — 198,146 Accounts receivable, net — 108,882 1,145 (301 ) 109,726 Spare parts and supplies, net — 35,897 — — 35,897 Prepaid expenses and other 225 52,926 128 — 53,279 Total 4,284 724,392 9,977 (301 ) 738,352 Property and equipment at cost — 2,761,918 91,830 — 2,853,748 Less accumulated depreciation and amortization — (678,843 ) (18,323 ) — (697,166 ) Property and equipment, net — 2,083,075 73,507 — 2,156,582 Operating lease right-of-use assets — 601,966 — — 601,966 Long-term prepayments and other — 150,652 300 — 150,952 Goodwill and other intangible assets, net — 119,831 500 — 120,331 Intercompany receivable — 507,181 — (507,181 ) — Investment in consolidated subsidiaries 1,498,620 — 504 (1,499,124 ) — TOTAL ASSETS $ 1,502,904 $ 4,187,097 $ 84,788 $ (2,006,606 ) $ 3,768,183 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 466 $ 147,077 $ 2,889 $ (301 ) $ 150,131 Air traffic liability — 693,399 4,770 — 698,169 Other accrued liabilities — 163,793 241 — 164,034 Current maturities of long-term debt, less discount, and finance lease obligations — 50,029 — — 50,029 Current maturities of operating leases — 89,434 — — 89,434 Total 466 1,143,732 7,900 (301 ) 1,151,797 Long-term debt and finance lease obligations — 515,254 — — 515,254 Intercompany payable 495,748 — 11,433 (507,181 ) — Other liabilities and deferred credits: Noncurrent operating leases — 469,543 — — 469,543 Accumulated pension and other post-retirement benefit obligations — 181,599 — — 181,599 Other liabilities and deferred credits — 99,736 1,111 — 100,847 Noncurrent frequent flyer deferred revenue — 172,343 — — 172,343 Deferred tax liabilities, net — 170,110 — — 170,110 Total — 1,093,331 1,111 — 1,094,442 Shareholders’ equity 1,006,690 1,434,780 64,344 (1,499,124 ) 1,006,690 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,502,904 $ 4,187,097 $ 84,788 $ (2,006,606 ) $ 3,768,183 Condensed Consolidating Balance Sheets December 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 5,154 $ 255,279 $ 8,144 $ — $ 268,577 Short-term investments — 232,241 — — 232,241 Accounts receivable, net — 109,499 2,569 (234 ) 111,834 Spare parts and supplies, net — 33,942 — — 33,942 Prepaid expenses and other 165 58,296 112 — 58,573 Total 5,319 689,257 10,825 (234 ) 705,167 Property and equipment at cost — 2,756,551 92,021 — 2,848,572 Less accumulated depreciation and amortization — (648,111 ) (15,350 ) — (663,461 ) Property and equipment, net — 2,108,440 76,671 — 2,185,111 Long-term prepayments and other 62,990 185,161 899 (63,494 ) 185,556 Goodwill and other intangible assets, net — 120,119 693 — 120,812 Intercompany receivable — 456,338 — (456,338 ) — Investment in consolidated subsidiaries 1,325,380 — — (1,325,380 ) — TOTAL ASSETS $ 1,393,689 $ 3,559,315 $ 89,088 $ (1,845,446 ) $ 3,196,646 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 665 $ 139,552 $ 3,163 $ (234 ) $ 143,146 Air traffic liability — 598,387 5,349 — 603,736 Other accrued liabilities — 157,842 312 — 158,154 Current maturities of long-term debt, less discount, and finance lease obligations — 101,052 45 — 101,097 Total 665 996,833 8,869 (234 ) 1,006,133 Long-term debt and finance lease obligations — 604,089 4,595 — 608,684 Intercompany payable 445,030 — 11,308 (456,338 ) — Other liabilities and deferred credits: 0 Accumulated pension and other post-retirement benefit obligations — 182,620 — — 182,620 Other liabilities and deferred credits — 118,682 1,144 — 119,826 Noncurrent frequent flyer deferred revenue — 163,619 — — 163,619 Deferred tax liabilities, net — 167,770 — — 167,770 Total — 632,691 1,144 — 633,835 Shareholders’ equity 947,994 1,325,702 63,172 (1,388,874 ) 947,994 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,393,689 $ 3,559,315 $ 89,088 $ (1,845,446 ) $ 3,196,646 Condensed Consolidating Statements of Cash Flows Six months ended June 30, 2019 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (956 ) $ 314,741 $ (2,573 ) $ — $ 311,212 Cash Flows From Investing Activities: Net payments to affiliates (7,600 ) (49,705 ) — 57,305 — Additions to property and equipment, including pre-delivery deposits — (147,116 ) (4,461 ) — (151,577 ) Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment — 4,350 — — 4,350 Purchases of investments — (189,929 ) — — (189,929 ) Sales of investments — 225,706 — — 225,706 Other — (6,275 ) — — (6,275 ) Net cash used in investing activities (7,600 ) (162,969 ) (4,461 ) 57,305 (117,725 ) Cash Flows From Financing Activities: Repayments of long-term debt and finance lease obligations — (77,465 ) (6 ) — (77,471 ) Debt issuance costs — (33 ) — — (33 ) Dividend payments (11,554 ) — — — (11,554 ) Net payments from affiliates 49,705 — 7,600 (57,305 ) — Repurchases of common stock (30,690 ) — — — (30,690 ) Other — (1,012 ) — — (1,012 ) Net cash provided by (used in) financing activities 7,461 (78,510 ) 7,594 (57,305 ) (120,760 ) Net increase (decrease) in cash and cash equivalents (1,095 ) 73,262 560 — 72,727 Cash, cash equivalents, & restricted cash - Beginning of Period 5,154 255,279 8,144 — 268,577 Cash, cash equivalents, & restricted cash - End of Period $ 4,059 $ 328,541 $ 8,704 $ — $ 341,304 Condensed Consolidating Statements of Cash Flows Six months ended June 30, 2018 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (2,603 ) $ 375,052 $ 1,312 $ — $ 373,761 Cash Flows From Investing Activities: Net payments to affiliates (8,700 ) (8,721 ) — 17,421 — Additions to property and equipment, including pre-delivery deposits — (247,607 ) (10,505 ) — (258,112 ) Proceeds from the sale of aircraft and aircraft related equipment — 987 — — 987 Purchases of investments — (110,092 ) — — (110,092 ) Sales of investments — 119,236 — — 119,236 Net cash used in investing activities (8,700 ) (246,197 ) (10,505 ) 17,421 (247,981 ) Cash Flows From Financing Activities: Long-term borrowings — 86,500 — — 86,500 Repayments of long-term debt and finance lease obligations — (30,047 ) — — (30,047 ) Debt issuance costs — (889 ) — — (889 ) Dividend payments (12,238 ) — — — (12,238 ) Net payments from affiliates 8,721 — 8,700 (17,421 ) — Repurchases of Common Stock (22,745 ) — — — (22,745 ) Other 78 (3,601 ) — — (3,523 ) Net cash provided by (used in) financing activities (26,184 ) 51,963 8,700 (17,421 ) 17,058 Net increase (decrease) in cash and cash equivalents (37,487 ) 180,818 (493 ) — 142,838 Cash, cash equivalents, & restricted cash - Beginning of Period 57,405 126,861 7,687 — 191,953 Cash, cash equivalents, & restricted cash - End of Period $ 19,918 $ 307,679 $ 7,194 $ — $ 334,791 Income Taxes The income tax expense (benefit) is presented as if each entity that is part of the consolidated group files a separate return. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Non-cash investing and financing activities for the six months ended June 30, 2019 and 2018 were as follows: Six months ended June 30, 2019 2018 Investing and Financing Activities Not Affecting Cash: (in thousands) Property and equipment acquired through a capital lease — 64,692 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016-02), which was subsequently codified within Accounting Standards Codification (ASC) 842, Leases (ASC 842). ASC 842 requires a lessee to recognize a right-of-use asset and a lease liability in the statement of financial position for all leases (with the exception of short-term leases) at the lease commencement date and recognize expenses similar to the current ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods beginning after December 15, 2018. The Company adopted ASC 842 as of January 1, 2019 using the transition method that provides for a cumulative-effect adjustment to retained earnings upon adoption. The Company elected the package of transition provisions available for expired or existing contracts, which allows the Company to carry-forward our historical assessments of (a) whether contracts are, or contain leases, (b) lease classification, and (c) initial direct costs. The adoption of the ASC 842 had a significant impact on the Company's consolidated balance sheet due to the recognition of approximately $603.9 million of operating lease liabilities and right-of-use (ROU) assets for operating leases of $649.3 million . Additionally, the Company recognized a $4.9 million (net of tax of $1.6 million ) cumulative effect adjustment credit to retained earnings. The adjustment to retained earnings was driven principally by ASC 842's elimination of the previous build-to-suit lease accounting guidance under ASC 840, Leases , and resulted in the derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period. ASC 842 then required the application of lease accounting to the agreement, which resulted in an operating lease. This resulted in the recognition of a ROU asset, inclusive of building costs incurred by the Company to place the asset into service, of $124.7 million , and a lease liability of $90.8 million . The unaudited Consolidated Financial Statements as of and for the three and six months ended June 30, 2019 are presented under the new standard, while comparative periods presented are not adjusted and continue to be reported in accordance with our historical accounting policy. See Note 9 , Leases, for additional information. In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), 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 was effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted this standard during the first quarter of 2019. The adoption of this standard did not have an impact on the Company's Consolidated Financial Statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASU 2016-13), which requires the use of an "expected loss" model on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 replaces the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company will adopt ASU 2016-13 effective January 1, 2020, and is evaluating the impact the adoption the standard will have on its consolidated financial statements. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, Affected line items in the statement where net income is presented 2019 2018 2019 2018 (in thousands) Derivatives designated as hedging instruments under ASC 815 Foreign currency derivative losses (gains) $ (1,749 ) $ 884 $ (3,336 ) $ 2,105 Passenger revenue Total before tax (1,749 ) 884 (3,336 ) 2,105 Tax expense (benefit) 426 (216 ) 817 (515 ) Total, net of tax $ (1,323 ) $ 668 $ (2,519 ) $ 1,590 Amortization of defined benefit plan items Actuarial loss $ 831 $ 624 $ 1,662 $ 1,248 Nonoperating Income (Expense), Other, net Prior service cost 56 56 112 112 Nonoperating Income (Expense), Other, net Total before tax 887 680 1,774 1,360 Tax benefit (218 ) (166 ) (386 ) (333 ) Total, net of tax $ 669 $ 514 $ 1,388 $ 1,027 Short-term investments Realized losses (gain) on sales of investments, net $ 69 $ 26 $ (28 ) $ 31 Nonoperating Income (Expense), Other, net Total before tax 69 26 (28 ) 31 Tax expense (benefit) (17 ) (6 ) 7 (7 ) Total, net of tax $ 52 $ 20 $ (21 ) $ 24 Total reclassifications for the period $ (602 ) $ 1,202 $ (1,152 ) $ 2,641 |
Schedule of amounts included in accumulated other comprehensive income (loss), net of taxes | A roll-forward of the amounts included in accumulated other comprehensive income (loss), net of taxes, for the three and six months ended June 30, 2019 and 2018 is as follows: Three months ended June 30, 2019 Foreign Currency Derivatives Defined Benefit Short-Term Investments Total (in thousands) Beginning balance $ 4,462 $ (95,279 ) $ (62 ) $ (90,879 ) Other comprehensive income (loss) before reclassifications, net of tax (2,323 ) — 717 (1,606 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (1,323 ) 669 52 (602 ) Net current-period other comprehensive income (loss) (3,646 ) 669 769 (2,208 ) Ending balance $ 816 $ (94,610 ) $ 707 $ (93,087 ) Three months ended June 30, 2018 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance $ (5,995 ) $ (75,440 ) $ (1,020 ) $ (82,455 ) Other comprehensive income before reclassifications, net of tax 8,595 — 147 8,742 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 668 514 20 1,202 Net current-period other comprehensive income 9,263 514 167 9,944 Ending balance $ 3,268 $ (74,926 ) $ (853 ) $ (72,511 ) Six months ended June 30, 2019 Foreign Currency Derivatives Defined Benefit Pension Items Short-Term Investments Total (in thousands) Beginning balance 3,317 (95,855 ) (602 ) (93,140 ) Other comprehensive income (loss) before reclassifications, net of tax 18 (143 ) 1,330 1,205 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (2,519 ) 1,388 (21 ) (1,152 ) Net current-period other comprehensive income (2,501 ) 1,245 1,309 53 Ending balance 816 (94,610 ) 707 (93,087 ) Six months ended June 30, 2018 Foreign Currency Derivatives Defined Benefit Plan Items Short-Term Investments Total (in thousands) Beginning balance 1,249 (75,953 ) (560 ) (75,264 ) Other comprehensive loss before reclassifications, net of tax 429 — (317 ) 112 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 1,590 1,027 24 2,641 Net current-period other comprehensive income (loss) 2,019 1,027 (293 ) 2,753 Ending balance 3,268 (74,926 ) (853 ) (72,511 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share basic and diluted | The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands, except for per share data) Numerator: Net Income $ 57,833 $ 79,480 $ 94,191 $ 108,022 Denominator: Weighted average common stock shares outstanding - Basic 47,854 50,776 48,122 50,915 Assumed exercise of stock options and awards 35 102 36 123 Weighted average common stock shares outstanding - Diluted 47,889 50,878 48,158 51,038 Net Income Per Share Basic $ 1.21 $ 1.57 $ 1.96 $ 2.12 Diluted $ 1.21 $ 1.56 $ 1.96 $ 2.12 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | These amounts are recognized when the service is provided. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Passenger Revenue by Type (in thousands) Passenger revenue, excluding frequent flyer $ 613,574 $ 618,406 $ 1,181,429 $ 1,196,361 Frequent flyer revenue, transportation component 39,849 36,756 73,298 70,401 Passenger Revenue $ 653,423 $ 655,162 $ 1,254,727 $ 1,266,762 Other revenue (e.g., cargo and other miscellaneous) $ 36,571 $ 41,539 $ 72,802 $ 80,229 Frequent flyer revenue, marketing and brand component 22,195 18,746 41,411 33,868 Other Revenue $ 58,766 $ 60,285 $ 114,213 $ 114,097 Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Geographic Information (in thousands) Domestic $ 531,725 $ 528,476 $ 1,009,245 $ 1,020,678 Pacific 180,464 186,971 359,695 360,181 Total operating revenue $ 712,189 $ 715,447 $ 1,368,940 $ 1,380,859 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of short-term investments | The following is a summary of short-term investments held as of June 30, 2019 and December 31, 2018 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2019 (in thousands) Corporate debt $ 107,688 $ 740 $ (29 ) $ 108,399 U.S. government and agency debt 42,174 270 (2 ) 42,442 Certificates of Deposit 35,345 — — 35,345 Other fixed income securities 11,960 — — 11,960 Total short-term investments $ 197,167 $ 1,010 $ (31 ) $ 198,146 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 (in thousands) Corporate debt $ 142,748 $ 49 $ (695 ) $ 142,102 U.S. government and agency debt 37,163 3 (59 ) 37,107 Municipal bonds 9,903 — (32 ) 9,871 Other fixed income securities 43,183 2 (24 ) 43,161 Total short-term investments $ 232,997 $ 54 $ (810 ) $ 232,241 |
Schedule of contractual maturities of short-term investments | Contractual maturities of short-term investments as of June 30, 2019 are shown below. Under 1 Year 1 to 5 Years Total (in thousands) Corporate debt $ 23,368 $ 85,031 $ 108,399 U.S. government and agency debt 6,032 36,410 42,442 Certificates of Deposit 35,345 — 35,345 Other fixed income securities 11,960 — 11,960 Total short-term investments $ 76,705 $ 121,441 $ 198,146 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 130,657 $ 93,000 $ 37,657 $ — Short-term investments 198,146 — 198,146 — Fuel derivative contracts 4,957 — 4,957 — Foreign currency derivatives 2,104 — 2,104 — Total assets measured at fair value $ 335,864 $ 93,000 $ 242,864 $ — Foreign currency derivatives 2,171 — 2,171 — Total liabilities measured at fair value $ 2,171 $ — $ 2,171 $ — Fair Value Measurements as of December 31, 2018 Total Level 1 Level 2 Level 3 (in thousands) Cash equivalents $ 121,154 $ 42,175 $ 78,979 $ — Short-term investments 232,241 — 232,241 — Fuel derivative contracts 1,572 — 1,572 — Foreign currency derivatives 4,579 — 4,579 — Total assets measured at fair value $ 359,546 $ 42,175 $ 317,371 $ — Foreign currency derivatives 1,347 — 1,347 — Total liabilities measured at fair value $ 1,347 $ — $ 1,347 $ — |
Schedule of debt (excluding obligations under capital leases) measured at fair value | The table below presents the Company’s debt (excluding obligations under finance leases) measured at fair value: Fair Value of Debt June 30, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Amount Total Level 1 Level 2 Level 3 (in thousands) $ 403,353 $ 411,271 $ — $ — $ 411,271 $ 467,760 $ 461,805 $ — $ — $ 461,805 |
Financial Derivative Instrume_2
Financial Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, Fuel derivative contracts 2019 2018 2019 2018 (in thousands) Gains (losses) realized at settlement $ (3,051 ) $ 10,827 $ (5,895 ) $ 16,488 Reversal of prior period unrealized amounts 4,767 (10,748 ) 8,181 (11,792 ) Unrealized gains (losses) that will settle in future periods (4,936 ) 18,873 (4,936 ) 18,873 Gains (losses) on fuel derivatives recorded as nonoperating income (expense) $ (3,220 ) $ 18,952 $ (2,650 ) $ 23,569 |
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 June 30, 2019 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 15,945,400 Japanese Yen June 2020 1,971 (1,621 ) 350 Other liabilities and deferred credits 4,586,250 Japanese Yen June 2021 124 (359 ) (235 ) Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 1,170,150 Japanese Yen September 2019 9 (191 ) (182 ) Fuel derivative contracts Prepaid expenses and other 97,230 gallons June 2020 4,957 — 4,957 Derivative position as of December 31, 2018 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 15,933,550 Japanese Yen December 2019 3,922 (915 ) 3,007 Long-term prepayments and other 4,491,350 Japanese Yen December 2020 633 (292 ) 341 Derivatives not designated as hedges Foreign currency derivatives Other accrued liabilities 832,900 Japanese Yen March 2019 24 (140 ) (116 ) Fuel derivative contracts Prepaid expenses and other 95,256 gallons December 2019 1,572 — 1,572 |
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 June 30, Three months ended June 30, Three months ended June 30, 2019 2018 2019 2018 2019 2018 (in thousands) Foreign currency derivatives $ 3,083 $ (11,378 ) $ (1,749 ) $ 884 $ — $ — (Gain) loss recognized in AOCI on derivatives (effective portion) (Gain) loss reclassified from AOCI (Gain) loss recognized in Six months ended June 30, Six months ended June 30, Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in thousands) Foreign currency derivatives (23 ) (569 ) (3,336 ) 2,105 — — |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease-related Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet. Classification on the Balance Sheet June 30, 2019 (in thousands) Assets: Operating lease assets Operating lease right-of use assets $ 601,966 Finance lease assets Property and equipment, net 161,203 Total lease assets $ 763,169 Liabilities: Current Operating Current maturities of operating leases $ 89,434 Finance Current maturities of long-term debt and finance lease obligations 21,965 Noncurrent Operating Noncurrent operating leases 469,543 Finance Long-Term Debt and Finance Lease Obligations 149,338 Total lease liabilities $ 730,280 Weighted-average remaining lease term Operating leases 11.0 years Finance leases 8.9 years Weighted-average discount rate Operating leases (1) 4.98 % Finance leases 4.74 % (1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. |
Lease costs | During the three and six months ended June 30, 2019 , the total lease costs for finance and operating leases were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 6,464 $ 12,562 Interest of lease liabilities 2,121 4,213 Operating lease cost (1) 30,284 60,567 Short-term lease cost (1) 1,328 3,316 Variable lease cost (1) 30,617 60,603 Total lease cost $ 70,814 $ 141,261 (1) Expenses are classified within aircraft rent and other rentals and landing fees in the consolidated statements of operations. During the three and six months ended June 30, 2019 , the cash paid for amounts included in the measurement of lease liabilities were as follows: Three Months Ended June 30, Six months ended June 30, 2019 (in thousands) Operating cash flows from operating leases 29,925 58,883 Operating cash flows from finance leases 2,121 4,213 Financing cash flows from finance lease 5,899 11,521 |
Finance lease maturity | As of June 30, 2019 , the scheduled future minimum rental payments under operating and finance leases with non-cancellable basic terms of more than one year were as follows: Finance Leases Operating Leases Aircraft Other Aircraft Other (in thousands) Remaining in 2019 $ 12,710 $ 2,271 $ 55,002 $ 4,104 2020 25,433 3,288 92,612 8,219 2021 25,447 1,873 76,766 8,424 2022 25,027 1,781 70,030 8,822 2023 21,997 5,019 61,750 9,029 Thereafter 76,237 7,083 158,493 194,211 Total minimum lease payments 186,851 21,315 514,653 232,809 Less: amounts representing interest (31,775 ) (5,088 ) (73,562 ) (114,924 ) Present value of future minimum lease payments $ 155,076 $ 16,227 $ 441,091 $ 117,885 Less: current maturities of lease obligations (18,497 ) (3,468 ) (86,850 ) (2,583 ) Long-term lease obligations $ 136,579 $ 12,759 $ 354,241 $ 115,302 |
Operating lease maturity | As of June 30, 2019 , the scheduled future minimum rental payments under operating and finance leases with non-cancellable basic terms of more than one year were as follows: Finance Leases Operating Leases Aircraft Other Aircraft Other (in thousands) Remaining in 2019 $ 12,710 $ 2,271 $ 55,002 $ 4,104 2020 25,433 3,288 92,612 8,219 2021 25,447 1,873 76,766 8,424 2022 25,027 1,781 70,030 8,822 2023 21,997 5,019 61,750 9,029 Thereafter 76,237 7,083 158,493 194,211 Total minimum lease payments 186,851 21,315 514,653 232,809 Less: amounts representing interest (31,775 ) (5,088 ) (73,562 ) (114,924 ) Present value of future minimum lease payments $ 155,076 $ 16,227 $ 441,091 $ 117,885 Less: current maturities of lease obligations (18,497 ) (3,468 ) (86,850 ) (2,583 ) Long-term lease obligations $ 136,579 $ 12,759 $ 354,241 $ 115,302 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, Components of Net Period Benefit Cost 2019 2018 2019 2018 (in thousands) Service cost $ 2,096 $ 1,962 $ 4,192 $ 3,924 Other cost: Interest cost 5,608 5,009 11,216 10,018 Expected return on plan assets (5,483 ) (5,588 ) (10,966 ) (11,176 ) Recognized net actuarial loss 887 680 1,774 1,360 Total other components of the net periodic benefit cost 1,012 101 2,024 202 Net periodic benefit cost $ 3,108 $ 2,063 $ 6,216 $ 4,126 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of firm aircraft and engine orders | As of June 30, 2019 , the Company had the following capital commitments consisting of firm aircraft and engine orders and purchase rights for additional aircraft and engines: Aircraft Type Firm Orders Purchase Rights Expected Delivery Dates A321neo aircraft 5 3 Between 2019 and 2020 B787-9 aircraft 10 10 Between 2021 and 2025 Pratt & Whitney spare engines: A321neo spare engines (1) — 2 N/A General Electric GEnx spare engines: B787-9 spare engines 2 2 Between 2021 and 2025 (1) During the second quarter of 2019, the Company took delivery of its remaining A321neo spare engine and maintain purchase rights for an additional two engines, which expire on December 31, 2019. |
Schedule of committed capital and operating expenditures | The gross committed expenditures and committed payments for those deliveries as of June 30, 2019 are detailed below: Aircraft and aircraft related Other Total Committed (in thousands) Remaining in 2019 $ 215,928 $ 39,900 $ 255,828 2020 178,828 75,149 253,977 2021 314,557 71,523 386,080 2022 439,856 63,883 503,739 2023 247,785 58,754 306,539 Thereafter 474,484 166,636 641,120 $ 1,871,438 $ 475,845 $ 2,347,283 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information 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 June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 711,670 $ 622 $ (103 ) $ 712,189 Operating Expenses: Wages and benefits — 180,070 — — 180,070 Aircraft fuel, including taxes and delivery — 140,600 — — 140,600 Maintenance, materials and repairs — 56,273 1,858 — 58,131 Aircraft and passenger servicing — 39,641 — — 39,641 Commissions and other selling 11 32,480 23 (43 ) 32,471 Aircraft rent — 30,832 11 — 30,843 Other rentals and landing fees — 31,386 — — 31,386 Depreciation and amortization — 37,909 1,618 — 39,527 Purchased services 70 32,467 211 (15 ) 32,733 Other 1,296 36,204 451 (45 ) 37,906 Total 1,377 617,862 4,172 (103 ) 623,308 Operating Income (Loss) (1,377 ) 93,808 (3,550 ) — 88,881 Nonoperating Income (Expense): Undistributed net income of subsidiaries 58,911 — — (58,911 ) — Interest expense and amortization of debt discounts and issuance costs — (7,300 ) — — (7,300 ) Interest income 13 3,061 — — 3,074 Capitalized interest — 1,257 — — 1,257 Losses on fuel derivatives — (3,220 ) — — (3,220 ) Other, net — (3,032 ) (51 ) — (3,083 ) Total 58,924 (9,234 ) (51 ) (58,911 ) (9,272 ) Income (Loss) Before Income Taxes 57,547 84,574 (3,601 ) (58,911 ) 79,609 Income tax expense (benefit) (286 ) 22,819 (757 ) — 21,776 Net Income (Loss) $ 57,833 $ 61,755 $ (2,844 ) $ (58,911 ) $ 57,833 Comprehensive Income (Loss) $ 55,625 $ 59,547 $ (2,844 ) $ (56,703 ) $ 55,625 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Three months ended June 30, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 713,127 $ 2,393 $ (73 ) $ 715,447 Operating Expenses: Wages and benefits — 171,555 — — 171,555 Aircraft fuel, including taxes and delivery — 153,026 — — 153,026 Maintenance, materials and repairs — 59,468 1,502 — 60,970 Aircraft and passenger servicing — 38,626 — — 38,626 Commissions and other selling — 31,863 25 (35 ) 31,853 Aircraft rent — 29,865 — — 29,865 Depreciation and amortization — 31,902 1,017 — 32,919 Other rentals and landing fees — 30,952 232 — 31,184 Purchased services (2 ) 31,249 242 (15 ) 31,474 Other 2,099 37,435 1,536 (23 ) 41,047 Total 2,097 615,941 4,554 (73 ) 622,519 Operating Income (Loss) (2,097 ) 97,186 (2,161 ) — 92,928 Nonoperating Income (Expense): Undistributed net income of subsidiaries 81,099 — — (81,099 ) — Interest expense and amortization of debt discounts and issuance costs (3 ) (7,579 ) (45 ) — (7,627 ) Interest income 51 1,880 — — 1,931 Capitalized interest — 2,355 — — 2,355 Gains on fuel derivatives — 18,952 — — 18,952 Other, net — (2,752 ) — — (2,752 ) Total 81,147 12,856 (45 ) (81,099 ) 12,859 Income (Loss) Before Income Taxes 79,050 110,042 (2,206 ) (81,099 ) 105,787 Income tax expense (benefit) (430 ) 27,201 (464 ) — 26,307 Net Income (Loss) $ 79,480 $ 82,841 $ (1,742 ) $ (81,099 ) $ 79,480 Comprehensive Income (Loss) $ 89,424 $ 92,785 $ (1,742 ) $ (91,043 ) $ 89,424 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Six months ended June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 1,367,760 $ 1,414 $ (234 ) $ 1,368,940 Operating Expenses: Aircraft fuel, including taxes and delivery — 266,704 — — 266,704 Wages and benefits — 355,135 — — 355,135 Aircraft rent — 61,199 40 — 61,239 Maintenance materials and repairs — 118,075 3,101 — 121,176 Aircraft and passenger servicing — 78,541 — — 78,541 Commissions and other selling 11 63,345 41 (90 ) 63,307 Depreciation and amortization — 74,401 3,277 — 77,678 Other rentals and landing fees — 62,405 27 — 62,432 Purchased services 124 64,660 433 (31 ) 65,186 Other 3,138 72,060 900 (113 ) 75,985 Total 3,273 1,216,525 7,819 (234 ) 1,227,383 Operating Income (Loss) (3,273 ) 151,235 (6,405 ) — 141,557 Nonoperating Income (Expense): Undistributed net income of subsidiaries 96,760 — — (96,760 ) — Interest expense and amortization of debt discounts and issuance costs — (14,814 ) (16 ) — (14,830 ) Interest income 21 6,036 — — 6,057 Capitalized interest — 2,542 — — 2,542 Losses on fuel derivatives — (2,650 ) — — (2,650 ) Other, net — (4,101 ) (7 ) — (4,108 ) Total 96,781 (12,987 ) (23 ) (96,760 ) (12,989 ) Income (Loss) Before Income Taxes 93,508 138,248 (6,428 ) (96,760 ) 128,568 Income tax expense (benefit) (683 ) 36,410 (1,350 ) — 34,377 Net Income (Loss) $ 94,191 $ 101,838 $ (5,078 ) $ (96,760 ) $ 94,191 Comprehensive Income (Loss) $ 94,244 $ 101,891 $ (5,078 ) $ (96,813 ) $ 94,244 Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Six months ended June 30, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) Operating Revenue $ — $ 1,376,539 $ 4,520 $ (200 ) $ 1,380,859 Operating Expenses: Aircraft fuel, including taxes and delivery — 286,472 — — 286,472 Wages and benefits — 340,264 — — 340,264 Aircraft rent — 61,765 — — 61,765 Maintenance materials and repairs — 116,962 2,149 — 119,111 Aircraft and passenger servicing — 75,144 — — 75,144 Commissions and other selling (5 ) 63,821 45 (83 ) 63,778 Depreciation and amortization — 63,177 1,987 — 65,164 Other rentals and landing fees — 61,767 232 — 61,999 Purchased services 88 62,117 420 (30 ) 62,595 Contract termination expense — 35,322 — — 35,322 Other 3,680 74,558 1,901 (87 ) 80,052 Total 3,763 1,241,369 6,734 (200 ) 1,251,666 Operating Income (Loss) (3,763 ) 135,170 (2,214 ) — 129,193 Nonoperating Income (Expense): Undistributed net income of subsidiaries 110,909 — — (110,909 ) — Interest expense and amortization of debt discounts and issuance costs (3 ) (16,134 ) (45 ) — (16,182 ) Interest income 116 3,289 — — 3,405 Capitalized interest — 4,593 — — 4,593 Gains on fuel derivatives — 23,569 — — 23,569 Other, net (4 ) (1,697 ) 5 — (1,696 ) Total 111,018 13,620 (40 ) (110,909 ) 13,689 Income (Loss) Before Income Taxes 107,255 148,790 (2,254 ) (110,909 ) 142,882 Income tax expense (benefit) (767 ) 36,101 (474 ) — 34,860 Net Income (Loss) $ 108,022 $ 112,689 $ (1,780 ) $ (110,909 ) $ 108,022 Comprehensive Income (Loss) $ 110,775 $ 115,442 $ (1,780 ) $ (113,662 ) $ 110,775 |
Schedule of Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets June 30, 2019 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 4,059 $ 328,541 $ 8,704 $ — $ 341,304 Short-term investments — 198,146 — — 198,146 Accounts receivable, net — 108,882 1,145 (301 ) 109,726 Spare parts and supplies, net — 35,897 — — 35,897 Prepaid expenses and other 225 52,926 128 — 53,279 Total 4,284 724,392 9,977 (301 ) 738,352 Property and equipment at cost — 2,761,918 91,830 — 2,853,748 Less accumulated depreciation and amortization — (678,843 ) (18,323 ) — (697,166 ) Property and equipment, net — 2,083,075 73,507 — 2,156,582 Operating lease right-of-use assets — 601,966 — — 601,966 Long-term prepayments and other — 150,652 300 — 150,952 Goodwill and other intangible assets, net — 119,831 500 — 120,331 Intercompany receivable — 507,181 — (507,181 ) — Investment in consolidated subsidiaries 1,498,620 — 504 (1,499,124 ) — TOTAL ASSETS $ 1,502,904 $ 4,187,097 $ 84,788 $ (2,006,606 ) $ 3,768,183 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 466 $ 147,077 $ 2,889 $ (301 ) $ 150,131 Air traffic liability — 693,399 4,770 — 698,169 Other accrued liabilities — 163,793 241 — 164,034 Current maturities of long-term debt, less discount, and finance lease obligations — 50,029 — — 50,029 Current maturities of operating leases — 89,434 — — 89,434 Total 466 1,143,732 7,900 (301 ) 1,151,797 Long-term debt and finance lease obligations — 515,254 — — 515,254 Intercompany payable 495,748 — 11,433 (507,181 ) — Other liabilities and deferred credits: Noncurrent operating leases — 469,543 — — 469,543 Accumulated pension and other post-retirement benefit obligations — 181,599 — — 181,599 Other liabilities and deferred credits — 99,736 1,111 — 100,847 Noncurrent frequent flyer deferred revenue — 172,343 — — 172,343 Deferred tax liabilities, net — 170,110 — — 170,110 Total — 1,093,331 1,111 — 1,094,442 Shareholders’ equity 1,006,690 1,434,780 64,344 (1,499,124 ) 1,006,690 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,502,904 $ 4,187,097 $ 84,788 $ (2,006,606 ) $ 3,768,183 Condensed Consolidating Balance Sheets December 31, 2018 Parent Issuer / Subsidiary Non-Guarantor Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 5,154 $ 255,279 $ 8,144 $ — $ 268,577 Short-term investments — 232,241 — — 232,241 Accounts receivable, net — 109,499 2,569 (234 ) 111,834 Spare parts and supplies, net — 33,942 — — 33,942 Prepaid expenses and other 165 58,296 112 — 58,573 Total 5,319 689,257 10,825 (234 ) 705,167 Property and equipment at cost — 2,756,551 92,021 — 2,848,572 Less accumulated depreciation and amortization — (648,111 ) (15,350 ) — (663,461 ) Property and equipment, net — 2,108,440 76,671 — 2,185,111 Long-term prepayments and other 62,990 185,161 899 (63,494 ) 185,556 Goodwill and other intangible assets, net — 120,119 693 — 120,812 Intercompany receivable — 456,338 — (456,338 ) — Investment in consolidated subsidiaries 1,325,380 — — (1,325,380 ) — TOTAL ASSETS $ 1,393,689 $ 3,559,315 $ 89,088 $ (1,845,446 ) $ 3,196,646 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 665 $ 139,552 $ 3,163 $ (234 ) $ 143,146 Air traffic liability — 598,387 5,349 — 603,736 Other accrued liabilities — 157,842 312 — 158,154 Current maturities of long-term debt, less discount, and finance lease obligations — 101,052 45 — 101,097 Total 665 996,833 8,869 (234 ) 1,006,133 Long-term debt and finance lease obligations — 604,089 4,595 — 608,684 Intercompany payable 445,030 — 11,308 (456,338 ) — Other liabilities and deferred credits: 0 Accumulated pension and other post-retirement benefit obligations — 182,620 — — 182,620 Other liabilities and deferred credits — 118,682 1,144 — 119,826 Noncurrent frequent flyer deferred revenue — 163,619 — — 163,619 Deferred tax liabilities, net — 167,770 — — 167,770 Total — 632,691 1,144 — 633,835 Shareholders’ equity 947,994 1,325,702 63,172 (1,388,874 ) 947,994 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,393,689 $ 3,559,315 $ 89,088 $ (1,845,446 ) $ 3,196,646 |
Schedule of Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows Six months ended June 30, 2019 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (956 ) $ 314,741 $ (2,573 ) $ — $ 311,212 Cash Flows From Investing Activities: Net payments to affiliates (7,600 ) (49,705 ) — 57,305 — Additions to property and equipment, including pre-delivery deposits — (147,116 ) (4,461 ) — (151,577 ) Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment — 4,350 — — 4,350 Purchases of investments — (189,929 ) — — (189,929 ) Sales of investments — 225,706 — — 225,706 Other — (6,275 ) — — (6,275 ) Net cash used in investing activities (7,600 ) (162,969 ) (4,461 ) 57,305 (117,725 ) Cash Flows From Financing Activities: Repayments of long-term debt and finance lease obligations — (77,465 ) (6 ) — (77,471 ) Debt issuance costs — (33 ) — — (33 ) Dividend payments (11,554 ) — — — (11,554 ) Net payments from affiliates 49,705 — 7,600 (57,305 ) — Repurchases of common stock (30,690 ) — — — (30,690 ) Other — (1,012 ) — — (1,012 ) Net cash provided by (used in) financing activities 7,461 (78,510 ) 7,594 (57,305 ) (120,760 ) Net increase (decrease) in cash and cash equivalents (1,095 ) 73,262 560 — 72,727 Cash, cash equivalents, & restricted cash - Beginning of Period 5,154 255,279 8,144 — 268,577 Cash, cash equivalents, & restricted cash - End of Period $ 4,059 $ 328,541 $ 8,704 $ — $ 341,304 Condensed Consolidating Statements of Cash Flows Six months ended June 30, 2018 Parent Issuer / Subsidiary Non- Eliminations Consolidated (in thousands) Net Cash Provided By (Used In) Operating Activities $ (2,603 ) $ 375,052 $ 1,312 $ — $ 373,761 Cash Flows From Investing Activities: Net payments to affiliates (8,700 ) (8,721 ) — 17,421 — Additions to property and equipment, including pre-delivery deposits — (247,607 ) (10,505 ) — (258,112 ) Proceeds from the sale of aircraft and aircraft related equipment — 987 — — 987 Purchases of investments — (110,092 ) — — (110,092 ) Sales of investments — 119,236 — — 119,236 Net cash used in investing activities (8,700 ) (246,197 ) (10,505 ) 17,421 (247,981 ) Cash Flows From Financing Activities: Long-term borrowings — 86,500 — — 86,500 Repayments of long-term debt and finance lease obligations — (30,047 ) — — (30,047 ) Debt issuance costs — (889 ) — — (889 ) Dividend payments (12,238 ) — — — (12,238 ) Net payments from affiliates 8,721 — 8,700 (17,421 ) — Repurchases of Common Stock (22,745 ) — — — (22,745 ) Other 78 (3,601 ) — — (3,523 ) Net cash provided by (used in) financing activities (26,184 ) 51,963 8,700 (17,421 ) 17,058 Net increase (decrease) in cash and cash equivalents (37,487 ) 180,818 (493 ) — 142,838 Cash, cash equivalents, & restricted cash - Beginning of Period 57,405 126,861 7,687 — 191,953 Cash, cash equivalents, & restricted cash - End of Period $ 19,918 $ 307,679 $ 7,194 $ — $ 334,791 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Non-Cash Investing and Financing Activities | Non-cash investing and financing activities for the six months ended June 30, 2019 and 2018 were as follows: Six months ended June 30, 2019 2018 Investing and Financing Activities Not Affecting Cash: (in thousands) Property and equipment acquired through a capital lease — 64,692 |
Significant Accounting Polici_3
Significant Accounting Policies Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 601,966 | $ 0 | |
Cumulative effect of accounting change (ASU 2016-02), net of tax | $ 4,900 | ||
ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Present value of future minimum lease payments | 603,900 | ||
Operating lease right-of-use assets | 649,300 | ||
Cumulative effect on retained earnings, tax | 1,600 | ||
ASU 2016-02 | Build-To-Suit Lease | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Present value of future minimum lease payments | 90,800 | ||
Operating lease right-of-use assets | 124,700 | ||
ASU 2016-02 | Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of accounting change (ASU 2016-02), net of tax | $ 4,900 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Amounts reclassified from AOCI | ||||||
Revenue | $ (712,189) | $ (715,447) | $ (1,368,940) | $ (1,380,859) | ||
Nonoperating Income (Expense), Other, net | 3,083 | 2,752 | 4,108 | 1,696 | ||
Total before tax | (79,609) | (105,787) | (128,568) | (142,882) | ||
Tax expense (benefit) | 21,776 | 26,307 | 34,377 | 34,860 | ||
Total, net of tax | (57,833) | (79,480) | (94,191) | (108,022) | ||
Net income | (57,833) | $ (36,358) | (79,480) | $ (28,542) | (94,191) | (108,022) |
Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Net income | (602) | 1,202 | (1,152) | 2,641 | ||
Derivatives designated as hedging instruments under ASC 815 | Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Total before tax | (1,749) | 884 | (3,336) | 2,105 | ||
Tax expense (benefit) | 426 | (216) | 817 | (515) | ||
Total, net of tax | (1,323) | 668 | (2,519) | 1,590 | ||
Defined benefit plan | Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Total before tax | 887 | 680 | 1,774 | 1,360 | ||
Tax expense (benefit) | (218) | (166) | (386) | (333) | ||
Total, net of tax | 669 | 514 | 1,388 | 1,027 | ||
Actuarial loss | Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Nonoperating Income (Expense), Other, net | 831 | 624 | 1,662 | 1,248 | ||
Prior service cost | Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Nonoperating Income (Expense), Other, net | 56 | 56 | 112 | 112 | ||
Short-term investments | Amount reclassified from accumulated other comprehensive income (loss) | ||||||
Amounts reclassified from AOCI | ||||||
Realized losses (gain) on sales of investments, net | 69 | 26 | (28) | 31 | ||
Total before tax | 69 | 26 | (28) | 31 | ||
Tax expense (benefit) | (17) | (6) | 7 | (7) | ||
Total, net of tax | 52 | 20 | (21) | 24 | ||
Passenger | ||||||
Amounts reclassified from AOCI | ||||||
Revenue | (653,423) | (655,162) | (1,254,727) | (1,266,762) | ||
Passenger | 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 | ||||||
Revenue | $ (1,749) | $ 884 | $ (3,336) | $ 2,105 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Rollforward of Accumulated other comprehensive income (loss) | ||||||
Beginning balance | $ 975,060 | $ 947,994 | $ 838,214 | $ 845,125 | $ 947,994 | $ 845,125 |
Other comprehensive income (loss) before reclassifications, net of tax | (1,606) | 8,742 | 1,205 | 112 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (602) | 1,202 | (1,152) | 2,641 | ||
Net current-period other comprehensive income (loss) | (2,208) | 2,261 | 9,944 | (7,191) | 53 | 2,753 |
Ending balance | 1,006,690 | 975,060 | 920,047 | 838,214 | 1,006,690 | 920,047 |
Foreign Currency Derivatives | Foreign Currency Derivatives | ||||||
Rollforward of Accumulated other comprehensive income (loss) | ||||||
Beginning balance | 4,462 | 3,317 | (5,995) | 1,249 | 3,317 | 1,249 |
Other comprehensive income (loss) before reclassifications, net of tax | (2,323) | 8,595 | 18 | 429 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (1,323) | 668 | (2,519) | 1,590 | ||
Net current-period other comprehensive income (loss) | (3,646) | 9,263 | (2,501) | 2,019 | ||
Ending balance | 816 | 4,462 | 3,268 | (5,995) | 816 | 3,268 |
Defined Benefit Plan Items | ||||||
Rollforward of Accumulated other comprehensive income (loss) | ||||||
Beginning balance | (95,279) | (95,855) | (75,440) | (75,953) | (95,855) | (75,953) |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | (143) | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 669 | 514 | 1,388 | 1,027 | ||
Net current-period other comprehensive income (loss) | 669 | 514 | 1,245 | 1,027 | ||
Ending balance | (94,610) | (95,279) | (74,926) | (75,440) | (94,610) | (74,926) |
Short-Term Investments | ||||||
Rollforward of Accumulated other comprehensive income (loss) | ||||||
Beginning balance | (62) | (602) | (1,020) | (560) | (602) | (560) |
Other comprehensive income (loss) before reclassifications, net of tax | 717 | 147 | 1,330 | (317) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 52 | 20 | (21) | 24 | ||
Net current-period other comprehensive income (loss) | 769 | 167 | 1,309 | (293) | ||
Ending balance | 707 | (62) | (853) | (1,020) | 707 | (853) |
Total | ||||||
Rollforward of Accumulated other comprehensive income (loss) | ||||||
Beginning balance | (90,879) | (93,140) | (82,455) | (75,264) | (93,140) | (75,264) |
Net current-period other comprehensive income (loss) | (2,208) | 2,261 | 9,944 | (7,191) | ||
Ending balance | $ (93,087) | $ (90,879) | $ (72,511) | $ (82,455) | $ (93,087) | $ (72,511) |
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 | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||||
Net Income | $ 57,833 | $ 36,358 | $ 79,480 | $ 28,542 | $ 94,191 | $ 108,022 |
Denominator: | ||||||
Weighted average common stock shares outstanding - Basic (in shares) | 47,854 | 50,776 | 48,122 | 50,915 | ||
Assumed exercise of stock options and awards (in shares) | 35 | 102 | 36 | 123 | ||
Weighted average common stock shares outstanding - Diluted (in shares) | 47,889 | 50,878 | 48,158 | 51,038 | ||
Net Income Per Share | ||||||
Basic (in dollars per share) | $ 1.21 | $ 1.57 | $ 1.96 | $ 2.12 | ||
Diluted (in dollars per share) | $ 1.21 | $ 1.56 | $ 1.96 | $ 2.12 |
Earnings Per Share - Stock Repu
Earnings Per Share - Stock Repurchase Program and Dividends (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Nov. 30, 2018 | Nov. 30, 2017 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Approved stock repurchase amount | $ 100,000,000 | $ 100,000,000 | ||||||
Period of approved stock repurchase program | 2 years | 2 years | ||||||
Amount spent to repurchase shares | $ 19,600,000 | $ 2,500,000 | $ 30,700,000 | $ 22,800,000 | ||||
Number of shares repurchased and retired (in shares) | 725,105 | 403,598 | 65,389 | 548,861 | 1,100,000 | 614,000 | ||
Remaining authorized repurchase amount | $ 66,800,000 | $ 66,800,000 | ||||||
Cash dividend declared (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | |||
Declared and paid cash dividend | $ 5,743,000 | $ 5,811,000 | $ 6,093,000 | $ 6,145,000 | $ 11,600,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)line_of_businesssegment | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Number of lines of business | line_of_business | 1 | ||||
Number of segments | segment | 1 | ||||
Operating revenue | $ 712,189 | $ 715,447 | $ 1,368,940 | $ 1,380,859 | |
Revenue, performance obligation, timing | represents future revenue that is expected to be realized over the next 12 months | ||||
Passenger revenue, excluding frequent flyer | |||||
Disaggregation of Revenue [Line Items] | |||||
Operating revenue | 613,574 | 618,406 | $ 1,181,429 | 1,196,361 | |
Air traffic liability | 521,000 | 521,000 | $ 427,800 | ||
Air traffic revenue recognized | 333,900 | 293,100 | 389,800 | 332,500 | |
Frequent flyer revenue, transportation component | |||||
Disaggregation of Revenue [Line Items] | |||||
Operating revenue | 39,849 | $ 36,756 | 73,298 | $ 70,401 | |
Air traffic liability | $ 344,100 | $ 344,100 | $ 332,200 | ||
Weighted average ETV period | 12 months | ||||
Period for mile expiration | 18 months |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 712,189 | $ 715,447 | $ 1,368,940 | $ 1,380,859 |
Passenger revenue, excluding frequent flyer | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 613,574 | 618,406 | 1,181,429 | 1,196,361 |
Frequent flyer revenue, transportation component | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 39,849 | 36,756 | 73,298 | 70,401 |
Passenger Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 653,423 | 655,162 | 1,254,727 | 1,266,762 |
Other revenue (e.g., cargo and other miscellaneous) | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 36,571 | 41,539 | 72,802 | 80,229 |
Frequent flyer revenue, marketing and brand component | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 22,195 | 18,746 | 41,411 | 33,868 |
Other Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 58,766 | 60,285 | 114,213 | 114,097 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 531,725 | 528,476 | 1,009,245 | 1,020,678 |
Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 180,464 | $ 186,971 | $ 359,695 | $ 360,181 |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 197,167 | $ 232,997 |
Gross Unrealized Gains | 1,010 | 54 |
Gross Unrealized Losses | (31) | (810) |
Contractual Maturities | ||
Under 1 Year | 76,705 | |
1 to 5 Years | 121,441 | |
Fair Value, Total | 198,146 | 232,241 |
Corporate debt | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 107,688 | 142,748 |
Gross Unrealized Gains | 740 | 49 |
Gross Unrealized Losses | (29) | (695) |
Contractual Maturities | ||
Under 1 Year | 23,368 | |
1 to 5 Years | 85,031 | |
Fair Value, Total | 108,399 | 142,102 |
U.S. government and agency debt | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 42,174 | 37,163 |
Gross Unrealized Gains | 270 | 3 |
Gross Unrealized Losses | (2) | (59) |
Contractual Maturities | ||
Under 1 Year | 6,032 | |
1 to 5 Years | 36,410 | |
Fair Value, Total | 42,442 | 37,107 |
Certificates of Deposit | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 35,345 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Contractual Maturities | ||
Under 1 Year | 35,345 | |
1 to 5 Years | 0 | |
Fair Value, Total | 35,345 | |
Municipal bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 9,903 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (32) | |
Contractual Maturities | ||
Fair Value, Total | 9,871 | |
Other fixed income securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 11,960 | 43,183 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | 0 | (24) |
Contractual Maturities | ||
Under 1 Year | 11,960 | |
1 to 5 Years | 0 | |
Fair Value, Total | $ 11,960 | $ 43,161 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities, Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Measurements | ||
Short-term investments | $ 198,146 | $ 232,241 |
Recurring basis | ||
Fair Value Measurements | ||
Cash equivalents | 130,657 | 121,154 |
Short-term investments | 198,146 | 232,241 |
Total assets measured at fair value | 335,864 | 359,546 |
Total liabilities measured at fair value | 2,171 | 1,347 |
Recurring basis | Fuel derivative contracts | ||
Fair Value Measurements | ||
Derivative assets | 4,957 | 1,572 |
Recurring basis | Foreign currency derivatives | ||
Fair Value Measurements | ||
Derivative assets | 2,104 | 4,579 |
Derivative contracts | 2,171 | 1,347 |
Recurring basis | Level 1 | ||
Fair Value Measurements | ||
Cash equivalents | 93,000 | 42,175 |
Short-term investments | 0 | 0 |
Total assets measured at fair value | 93,000 | 42,175 |
Total liabilities measured at fair value | 0 | 0 |
Recurring basis | Level 1 | Fuel derivative contracts | ||
Fair Value Measurements | ||
Derivative assets | 0 | 0 |
Recurring basis | Level 1 | Foreign currency derivatives | ||
Fair Value Measurements | ||
Derivative assets | 0 | 0 |
Derivative contracts | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value Measurements | ||
Cash equivalents | 37,657 | 78,979 |
Short-term investments | 198,146 | 232,241 |
Total assets measured at fair value | 242,864 | 317,371 |
Total liabilities measured at fair value | 2,171 | 1,347 |
Recurring basis | Level 2 | Fuel derivative contracts | ||
Fair Value Measurements | ||
Derivative assets | 4,957 | 1,572 |
Recurring basis | Level 2 | Foreign currency derivatives | ||
Fair Value Measurements | ||
Derivative assets | 2,104 | 4,579 |
Derivative contracts | 2,171 | 1,347 |
Recurring basis | Level 3 | ||
Fair Value Measurements | ||
Cash equivalents | 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 | Fuel derivative contracts | ||
Fair Value Measurements | ||
Derivative assets | 0 | 0 |
Recurring basis | Level 3 | Foreign currency derivatives | ||
Fair Value Measurements | ||
Derivative assets | 0 | 0 |
Derivative contracts | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Certain Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Measurements | ||
Carrying Amount | $ 403,353 | $ 467,760 |
Recurring basis | ||
Fair Value Measurements | ||
Fair Value | 411,271 | 461,805 |
Recurring basis | Level 1 | ||
Fair Value Measurements | ||
Fair Value | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value Measurements | ||
Fair Value | 0 | 0 |
Recurring basis | Level 3 | ||
Fair Value Measurements | ||
Fair Value | $ 411,271 | $ 461,805 |
Financial Derivative Instrume_3
Financial Derivative Instruments - Realized and Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative instrument | ||||
Gains (losses) on fuel derivatives recorded as nonoperating income (expense) | $ (3,220) | $ 18,952 | $ (2,650) | $ 23,569 |
Derivatives not designated as hedges | Fuel derivative contracts | ||||
Derivative instrument | ||||
Gains (losses) realized at settlement | (3,051) | 10,827 | (5,895) | 16,488 |
Reversal of prior period unrealized amounts | 4,767 | (10,748) | 8,181 | (11,792) |
Unrealized gains (losses) that will settle in future periods | (4,936) | 18,873 | (4,936) | 18,873 |
Gains (losses) on fuel derivatives recorded as nonoperating income (expense) | $ (3,220) | $ 18,952 | (2,650) | $ 23,569 |
Derivatives designated as hedges | Foreign currency derivatives | ||||
Derivative instrument | ||||
Expected reclassification of net gain | $ 1,300 | |||
Reclassification estimated time period | 12 months |
Financial Derivative Instrume_4
Financial Derivative Instruments - Derivative Position (Details) ¥ in Thousands, gal in Thousands, $ in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019USD ($)gal | Dec. 31, 2018USD ($)gal | Jun. 30, 2019JPY (¥) | Jun. 30, 2019AUD ($) | Dec. 31, 2018JPY (¥) | Dec. 31, 2018AUD ($) | |
Derivatives designated as hedges | Foreign currency derivatives | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Derivative, Notional Amount | ¥ 15,945,400 | $ 46,524 | ¥ 15,933,550 | $ 48,709 | ||
Gross fair value of assets, current | $ 1,971 | $ 3,922 | ||||
Gross fair value of liabilities, current | (1,621) | (915) | ||||
Net derivative position | 350 | 3,007 | ||||
Derivatives designated as hedges | Foreign currency derivatives | Long-term prepayments and other | ||||||
Fair Value of Derivatives | ||||||
Derivative, Notional Amount | 4,586,250 | 7,641 | 4,491,350 | 9,419 | ||
Gross fair value of assets, noncurrent | 124 | 633 | ||||
Gross fair value of liabilities, noncurrent | (359) | (292) | ||||
Net derivative position | (235) | 341 | ||||
Derivatives not designated as hedges | Foreign currency derivatives | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Derivative, Notional Amount | ¥ 1,170,150 | $ 2,263 | ||||
Gross fair value of assets, current | 9 | |||||
Gross fair value of liabilities, current | (191) | |||||
Net derivative position | $ (182) | |||||
Derivatives not designated as hedges | Foreign currency derivatives | Other accrued liabilities | ||||||
Fair Value of Derivatives | ||||||
Derivative, Notional Amount | ¥ 832,900 | $ 2,785 | ||||
Gross fair value of assets, current | 24 | |||||
Gross fair value of liabilities, current | (140) | |||||
Net derivative position | $ (116) | |||||
Derivatives not designated as hedges | Fuel derivative contracts | Prepaid expenses and other | ||||||
Fair Value of Derivatives | ||||||
Notional Amount (in gallons) | gal | 97,230 | 95,256 | ||||
Gross fair value of assets, current | $ 4,957 | $ 1,572 | ||||
Gross fair value of liabilities, current | 0 | 0 | ||||
Net derivative position | $ 4,957 | $ 1,572 |
Financial Derivative Instrume_5
Financial Derivative Instruments - Impact of Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Gains (losses) for designated hedge contracts | ||||
(Gain) loss recognized in nonoperating (income) expense (ineffective portion) | $ 3,220 | $ (18,952) | $ 2,650 | $ (23,569) |
Cash Flow Hedging | Foreign currency derivatives | ||||
Gains (losses) for designated hedge contracts | ||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | 3,083 | (23) | ||
(Gain) loss recognized in AOCI on derivatives (effective portion) | (11,378) | (569) | ||
(Gain) loss reclassified from AOCI into income (effective portion) | (1,749) | (3,336) | ||
(Gain) loss reclassified from AOCI into income (effective portion) | 884 | 2,105 | ||
(Gain) loss recognized in nonoperating (income) expense (ineffective portion) | $ 0 | $ 0 | ||
(Gain) loss recognized in nonoperating (income) expense (ineffective portion) | $ 0 | $ 0 |
Financial Derivative Instrume_6
Financial Derivative Instruments - Risk and Collateral (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral posted with counterparties | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 1 Months Ended | 6 Months Ended |
Nov. 30, 2016USD ($) | Jun. 30, 2019aircraftengine | |
Operating Leased Assets [Line Items] | ||
Number of aircraft under lease | aircraft | 19 | |
Number of aircraft under financing lease | aircraft | 5 | |
Number of aircraft under operating lease | aircraft | 14 | |
Number of engines under operating lease | engine | 5 | |
Estimated remaining construction costs | $ | $ 37.3 | |
Property, plant and equipment, additions | $ | 73 | |
Finance lease liability | $ | $ 73 | |
Aircraft | Minimum | ||
Operating Leased Assets [Line Items] | ||
Operating and finance lease, remaining terms | 1 year | |
Aircraft | Maximum | ||
Operating Leased Assets [Line Items] | ||
Operating and finance lease, remaining terms | 11 years | |
Engines | Minimum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 1 year | |
Engines | Maximum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 7 years | |
Airport space | Minimum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 1 month | |
Airport space | Maximum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 33 years | |
Office space | Minimum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 1 year | |
Office space | Maximum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 7 years | |
Cargo and maintenance hangar | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 33 years | |
IT assets | Minimum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 1 year | |
IT assets | Maximum | ||
Operating Leased Assets [Line Items] | ||
Operating lease, remaining lease terms | 3 years |
Leases - Leases Related Assets
Leases - Leases Related Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Operating lease assets | $ 601,966 | $ 0 |
Finance lease assets | 161,203 | |
Total lease assets | 763,169 | |
Current | ||
Operating | 89,434 | 0 |
Finance | 21,965 | |
Noncurrent | ||
Operating | 469,543 | $ 0 |
Finance | 149,338 | |
Total lease liabilities | $ 730,280 | |
Weighted-average remaining lease term | ||
Operating leases | 11 years | |
Finance leases | 8 years 10 months 24 days | |
Weighted-average discount rate | ||
Operating leases | 4.98% | |
Finance leases | 4.74% |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 6,464 | $ 12,562 |
Interest of lease liabilities | 2,121 | 4,213 |
Operating lease cost | 30,284 | 60,567 |
Short-term lease cost | 1,328 | 3,316 |
Variable lease cost | 30,617 | 60,603 |
Total lease cost | $ 70,814 | $ 141,261 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 29,925 | $ 58,883 |
Operating cash flows from finance leases | 2,121 | 4,213 |
Financing cash flows from finance lease | $ 5,899 | $ 11,521 |
Leases - Operating and Finance
Leases - Operating and Finance Lease Maturity Schedule (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Nov. 30, 2016 |
Finance Leases | |||
Present value of future minimum lease payments | $ 73,000 | ||
Less: current maturities of lease obligations | $ (21,965) | ||
Long-term lease obligations | 149,338 | ||
Operating Leases | |||
Less: current maturities of lease obligations | (89,434) | $ 0 | |
Long-term lease obligations | 469,543 | $ 0 | |
Aircraft | |||
Finance Leases | |||
Remaining in 2019 | 12,710 | ||
2020 | 25,433 | ||
2021 | 25,447 | ||
2022 | 25,027 | ||
2023 | 21,997 | ||
Thereafter | 76,237 | ||
Total minimum lease payments | 186,851 | ||
Less: amounts representing interest | (31,775) | ||
Present value of future minimum lease payments | 155,076 | ||
Less: current maturities of lease obligations | (18,497) | ||
Long-term lease obligations | 136,579 | ||
Operating Leases | |||
Remaining in 2019 | 55,002 | ||
2020 | 92,612 | ||
2021 | 76,766 | ||
2022 | 70,030 | ||
2023 | 61,750 | ||
Thereafter | 158,493 | ||
Total minimum lease payments | 514,653 | ||
Less: amounts representing interest | (73,562) | ||
Present value of future minimum lease payments | 441,091 | ||
Less: current maturities of lease obligations | (86,850) | ||
Long-term lease obligations | 354,241 | ||
Other | |||
Finance Leases | |||
Remaining in 2019 | 2,271 | ||
2020 | 3,288 | ||
2021 | 1,873 | ||
2022 | 1,781 | ||
2023 | 5,019 | ||
Thereafter | 7,083 | ||
Total minimum lease payments | 21,315 | ||
Less: amounts representing interest | (5,088) | ||
Present value of future minimum lease payments | 16,227 | ||
Less: current maturities of lease obligations | (3,468) | ||
Long-term lease obligations | 12,759 | ||
Operating Leases | |||
Remaining in 2019 | 4,104 | ||
2020 | 8,219 | ||
2021 | 8,424 | ||
2022 | 8,822 | ||
2023 | 9,029 | ||
Thereafter | 194,211 | ||
Total minimum lease payments | 232,809 | ||
Less: amounts representing interest | (114,924) | ||
Present value of future minimum lease payments | 117,885 | ||
Less: current maturities of lease obligations | (2,583) | ||
Long-term lease obligations | $ 115,302 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Components of Net Period Benefit Cost | ||||
Service cost | $ 2,096 | $ 1,962 | $ 4,192 | $ 3,924 |
Other cost: | ||||
Interest cost | 5,608 | 5,009 | 11,216 | 10,018 |
Expected return on plan assets | (5,483) | (5,588) | (10,966) | (11,176) |
Recognized net actuarial loss | 887 | 680 | 1,774 | 1,360 |
Total other components of the net periodic benefit cost | 1,012 | 101 | 2,024 | 202 |
Net periodic benefit cost | $ 3,108 | $ 2,063 | $ 6,216 | $ 4,126 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Capital Commitments and Operating Expenditures (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($)order | Jun. 30, 2019USD ($)aircraftorderpurchase_right | |
Total Committed Expenditures | ||
Remaining in 2019 | $ 255,828 | $ 255,828 |
2020 | 253,977 | 253,977 |
2021 | 386,080 | 386,080 |
2022 | 503,739 | 503,739 |
2023 | 306,539 | 306,539 |
Thereafter | 641,120 | 641,120 |
Total | 2,347,283 | 2,347,283 |
Aircraft and aircraft related | ||
Total Committed Expenditures | ||
Remaining in 2019 | 215,928 | 215,928 |
2020 | 178,828 | 178,828 |
2021 | 314,557 | 314,557 |
2022 | 439,856 | 439,856 |
2023 | 247,785 | 247,785 |
Thereafter | 474,484 | 474,484 |
Total | $ 1,871,438 | $ 1,871,438 |
Aircraft and aircraft related | A321neo spare engines | ||
Long-term Purchase Commitment [Line Items] | ||
Number of aircraft, firm orders | order | 0 | |
Number of aircraft purchase rights | purchase_right | 2 | |
Number of aircraft firm orders, delivered in period | order | 2 | |
Aircraft and aircraft related | B787-9 spare engines | ||
Long-term Purchase Commitment [Line Items] | ||
Number of aircraft, firm orders | order | 2 | |
Number of aircraft purchase rights | purchase_right | 2 | |
Aircraft and aircraft related | A321neo aircraft | ||
Long-term Purchase Commitment [Line Items] | ||
Number of aircraft, firm orders | aircraft | 5 | |
Number of aircraft purchase rights | aircraft | 3 | |
Aircraft and aircraft related | B787-9 aircraft | ||
Long-term Purchase Commitment [Line Items] | ||
Number of aircraft, firm orders | aircraft | 10 | |
Number of aircraft purchase rights | aircraft | 10 | |
Other | ||
Total Committed Expenditures | ||
Remaining in 2019 | $ 39,900 | $ 39,900 |
2020 | 75,149 | 75,149 |
2021 | 71,523 | 71,523 |
2022 | 63,883 | 63,883 |
2023 | 58,754 | 58,754 |
Thereafter | 166,636 | 166,636 |
Total | $ 475,845 | $ 475,845 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Oct. 31, 2018orderpurchase_right | Jul. 31, 2018aircraft | Feb. 28, 2018aircraft | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Long-term Purchase Commitment [Line Items] | |||||||
Payment to debt facility | $ | $ 77,471,000 | $ 30,047,000 | |||||
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 | ||||||
B-717-200 | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Payment to debt facility | $ | $ 44,800,000 | ||||||
GEnx engines | B787-9 aircraft | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Number of engine firm order | purchase_right | 20 | ||||||
Number of engine purchase rights | order | 20 | ||||||
GEnx spare engines | B787-9 aircraft | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Number of spare engine, with option to purchase | purchase_right | 4 | ||||||
Credit Card Processing Agreements | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Restricted cash | $ | $ 0 | $ 0 | $ 0 | ||||
Maximum limit of holdback (up to) | 100.00% | 100.00% |
Contract Terminations Expense (
Contract Terminations Expense (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2018aircraft | Jan. 31, 2018USD ($)aircraftengine | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($)contract | |
Property, Plant and Equipment [Line Items] | ||||||
Number of terminated contracts | contract | 2 | |||||
Contract terminations expense | $ | $ 0 | $ 0 | $ 0 | $ 35,322 | ||
A-330-800-Neo | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of aircrafts terminated | 6 | |||||
Number of aircraft purchase rights | 6 | |||||
B767-300 aircraft | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Sale leaseback agreement, contract exit costs | $ | $ 67,100 | |||||
Aircraft | B767-300 aircraft | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Sale lease-back transaction, number of aircraft | 3 | |||||
Number of engines under sale-leaseback | engine | 2 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Narrative and Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)pass_through_trust | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)pass_through_trust | Jun. 30, 2018USD ($) | |
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating revenue | $ 712,189 | $ 715,447 | $ 1,368,940 | $ 1,380,859 |
Operating Expenses: | ||||
Wages and benefits | 180,070 | 171,555 | 355,135 | 340,264 |
Aircraft fuel, including taxes and delivery | 140,600 | 153,026 | 266,704 | 286,472 |
Maintenance, materials and repairs | 58,131 | 60,970 | 121,176 | 119,111 |
Aircraft and passenger servicing | 39,641 | 38,626 | 78,541 | 75,144 |
Commissions and other selling | 32,471 | 31,853 | 63,307 | 63,778 |
Aircraft rent | 30,843 | 29,865 | 61,239 | 61,765 |
Other rentals and landing fees | 31,386 | 31,184 | 62,432 | 61,999 |
Depreciation and amortization | 39,527 | 32,919 | 77,678 | 65,164 |
Purchased services | 32,733 | 31,474 | 65,186 | 62,595 |
Contract termination expense | 35,322 | |||
Other | 37,906 | 41,047 | 75,985 | 80,052 |
Total | 623,308 | 622,519 | 1,227,383 | 1,251,666 |
Operating Income (Loss) | 88,881 | 92,928 | 141,557 | 129,193 |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | 0 | 0 |
Interest expense and amortization of debt discounts and issuance costs | (7,300) | (7,627) | (14,830) | (16,182) |
Interest income | 3,074 | 1,931 | 6,057 | 3,405 |
Capitalized interest | 1,257 | 2,355 | 2,542 | 4,593 |
Gains (losses) on fuel derivatives | (3,220) | 18,952 | (2,650) | 23,569 |
Other, net | (3,083) | (2,752) | (4,108) | (1,696) |
Total | (9,272) | 12,859 | (12,989) | 13,689 |
Income Before Income Taxes | 79,609 | 105,787 | 128,568 | 142,882 |
Income tax expense (benefit) | 21,776 | 26,307 | 34,377 | 34,860 |
Net Income (Loss) | 57,833 | 79,480 | 94,191 | 108,022 |
Comprehensive Income (Loss) | 55,625 | 89,424 | 94,244 | 110,775 |
Eliminations | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating revenue | (103) | (73) | (234) | (200) |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | 0 | 0 |
Aircraft fuel, including taxes and delivery | 0 | 0 | 0 | 0 |
Maintenance, materials and repairs | 0 | 0 | 0 | 0 |
Aircraft and passenger servicing | 0 | 0 | 0 | 0 |
Commissions and other selling | (43) | (35) | (90) | (83) |
Aircraft rent | 0 | 0 | 0 | 0 |
Other rentals and landing fees | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Purchased services | (15) | (15) | (31) | (30) |
Contract termination expense | 0 | |||
Other | (45) | (23) | (113) | (87) |
Total | (103) | (73) | (234) | (200) |
Operating Income (Loss) | 0 | 0 | 0 | 0 |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | (58,911) | (81,099) | (96,760) | (110,909) |
Interest expense and amortization of debt discounts and issuance costs | 0 | 0 | 0 | 0 |
Interest income | 0 | 0 | 0 | 0 |
Capitalized interest | 0 | 0 | 0 | 0 |
Gains (losses) on fuel derivatives | 0 | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 | 0 |
Total | (58,911) | (81,099) | (96,760) | (110,909) |
Income Before Income Taxes | (58,911) | (81,099) | (96,760) | (110,909) |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Net Income (Loss) | (58,911) | (81,099) | (96,760) | (110,909) |
Comprehensive Income (Loss) | (56,703) | (91,043) | (96,813) | (113,662) |
Parent Issuer / Guarantor | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating revenue | 0 | 0 | 0 | 0 |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | 0 | 0 |
Aircraft fuel, including taxes and delivery | 0 | 0 | 0 | 0 |
Maintenance, materials and repairs | 0 | 0 | 0 | 0 |
Aircraft and passenger servicing | 0 | 0 | 0 | 0 |
Commissions and other selling | 11 | 0 | 11 | (5) |
Aircraft rent | 0 | 0 | 0 | 0 |
Other rentals and landing fees | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Purchased services | 70 | (2) | 124 | 88 |
Contract termination expense | 0 | |||
Other | 1,296 | 2,099 | 3,138 | 3,680 |
Total | 1,377 | 2,097 | 3,273 | 3,763 |
Operating Income (Loss) | (1,377) | (2,097) | (3,273) | (3,763) |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 58,911 | 81,099 | 96,760 | 110,909 |
Interest expense and amortization of debt discounts and issuance costs | 0 | (3) | 0 | (3) |
Interest income | 13 | 51 | 21 | 116 |
Capitalized interest | 0 | 0 | 0 | 0 |
Gains (losses) on fuel derivatives | 0 | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 | (4) |
Total | 58,924 | 81,147 | 96,781 | 111,018 |
Income Before Income Taxes | 57,547 | 79,050 | 93,508 | 107,255 |
Income tax expense (benefit) | (286) | (430) | (683) | (767) |
Net Income (Loss) | 57,833 | 79,480 | 94,191 | 108,022 |
Comprehensive Income (Loss) | $ 55,625 | 89,424 | $ 94,244 | 110,775 |
Subsidiary Issuer / Guarantor | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Number of pass-through trusts | pass_through_trust | 2 | 2 | ||
Subsidiary Issuer / Guarantor | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating revenue | $ 711,670 | 713,127 | $ 1,367,760 | 1,376,539 |
Operating Expenses: | ||||
Wages and benefits | 180,070 | 171,555 | 355,135 | 340,264 |
Aircraft fuel, including taxes and delivery | 140,600 | 153,026 | 266,704 | 286,472 |
Maintenance, materials and repairs | 56,273 | 59,468 | 118,075 | 116,962 |
Aircraft and passenger servicing | 39,641 | 38,626 | 78,541 | 75,144 |
Commissions and other selling | 32,480 | 31,863 | 63,345 | 63,821 |
Aircraft rent | 30,832 | 29,865 | 61,199 | 61,765 |
Other rentals and landing fees | 31,386 | 30,952 | 62,405 | 61,767 |
Depreciation and amortization | 37,909 | 31,902 | 74,401 | 63,177 |
Purchased services | 32,467 | 31,249 | 64,660 | 62,117 |
Contract termination expense | 35,322 | |||
Other | 36,204 | 37,435 | 72,060 | 74,558 |
Total | 617,862 | 615,941 | 1,216,525 | 1,241,369 |
Operating Income (Loss) | 93,808 | 97,186 | 151,235 | 135,170 |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | 0 | 0 |
Interest expense and amortization of debt discounts and issuance costs | (7,300) | (7,579) | (14,814) | (16,134) |
Interest income | 3,061 | 1,880 | 6,036 | 3,289 |
Capitalized interest | 1,257 | 2,355 | 2,542 | 4,593 |
Gains (losses) on fuel derivatives | (3,220) | 18,952 | (2,650) | 23,569 |
Other, net | (3,032) | (2,752) | (4,101) | (1,697) |
Total | (9,234) | 12,856 | (12,987) | 13,620 |
Income Before Income Taxes | 84,574 | 110,042 | 138,248 | 148,790 |
Income tax expense (benefit) | 22,819 | 27,201 | 36,410 | 36,101 |
Net Income (Loss) | 61,755 | 82,841 | 101,838 | 112,689 |
Comprehensive Income (Loss) | 59,547 | 92,785 | 101,891 | 115,442 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) | ||||
Operating revenue | 622 | 2,393 | 1,414 | 4,520 |
Operating Expenses: | ||||
Wages and benefits | 0 | 0 | 0 | 0 |
Aircraft fuel, including taxes and delivery | 0 | 0 | 0 | 0 |
Maintenance, materials and repairs | 1,858 | 1,502 | 3,101 | 2,149 |
Aircraft and passenger servicing | 0 | 0 | 0 | 0 |
Commissions and other selling | 23 | 25 | 41 | 45 |
Aircraft rent | 11 | 0 | 40 | 0 |
Other rentals and landing fees | 0 | 232 | 27 | 232 |
Depreciation and amortization | 1,618 | 1,017 | 3,277 | 1,987 |
Purchased services | 211 | 242 | 433 | 420 |
Contract termination expense | 0 | |||
Other | 451 | 1,536 | 900 | 1,901 |
Total | 4,172 | 4,554 | 7,819 | 6,734 |
Operating Income (Loss) | (3,550) | (2,161) | (6,405) | (2,214) |
Nonoperating Income (Expense): | ||||
Undistributed net income of subsidiaries | 0 | 0 | 0 | 0 |
Interest expense and amortization of debt discounts and issuance costs | 0 | (45) | (16) | (45) |
Interest income | 0 | 0 | 0 | 0 |
Capitalized interest | 0 | 0 | 0 | 0 |
Gains (losses) on fuel derivatives | 0 | 0 | 0 | 0 |
Other, net | (51) | 0 | (7) | 5 |
Total | (51) | (45) | (23) | (40) |
Income Before Income Taxes | (3,601) | (2,206) | (6,428) | (2,254) |
Income tax expense (benefit) | (757) | (464) | (1,350) | (474) |
Net Income (Loss) | (2,844) | (1,742) | (5,078) | (1,780) |
Comprehensive Income (Loss) | $ (2,844) | $ (1,742) | $ (5,078) | $ (1,780) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Investing and Financing Activities Not Affecting Cash: | ||
Property and equipment acquired through finance leases | $ 0 | $ 64,692 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 341,304 | $ 268,577 | ||||
Short-term investments | 198,146 | 232,241 | ||||
Accounts receivable, net | 109,726 | 111,834 | ||||
Spare parts and supplies, net | 35,897 | 33,942 | ||||
Prepaid expenses and other | 53,279 | 58,573 | ||||
Total | 738,352 | 705,167 | ||||
Property and equipment at cost | 2,853,748 | 2,848,572 | ||||
Less accumulated depreciation and amortization | (697,166) | (663,461) | ||||
Property and equipment, net | 2,156,582 | 2,185,111 | ||||
Operating lease right-of-use assets | 601,966 | 0 | ||||
Long-term prepayments and other | 150,952 | 185,556 | ||||
Goodwill and other intangible assets, net | 120,331 | 120,812 | ||||
Intercompany receivable | 0 | 0 | ||||
Investment in consolidated subsidiaries | 0 | 0 | ||||
Total Assets | 3,768,183 | 3,196,646 | ||||
Current liabilities: | ||||||
Accounts payable | 150,131 | 143,146 | ||||
Air traffic liability | 698,169 | 603,736 | ||||
Other accrued liabilities | 164,034 | 158,154 | ||||
Current maturities of long-term debt, less discount, and finance lease obligations | 50,029 | 101,097 | ||||
Current maturities of operating leases | 89,434 | 0 | ||||
Total | 1,151,797 | 1,006,133 | ||||
Long-term debt and finance lease obligations | 515,254 | 608,684 | ||||
Intercompany payable | 0 | 0 | ||||
Other liabilities and deferred credits: | ||||||
Noncurrent operating leases | 469,543 | 0 | ||||
Accumulated pension and other post-retirement benefit obligations | 181,599 | 182,620 | ||||
Other liabilities and deferred credits | 100,847 | 119,826 | ||||
Noncurrent frequent flyer deferred revenue | 172,343 | 163,619 | ||||
Deferred tax liabilities, net | 170,110 | 167,770 | ||||
Total | 1,094,442 | 633,835 | ||||
Shareholders’ equity | 1,006,690 | $ 975,060 | 947,994 | $ 920,047 | $ 838,214 | $ 845,125 |
Total Liabilities and Shareholders’ Equity | 3,768,183 | 3,196,646 | ||||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term investments | 0 | 0 | ||||
Accounts receivable, net | (301) | (234) | ||||
Spare parts and supplies, net | 0 | 0 | ||||
Prepaid expenses and other | 0 | 0 | ||||
Total | (301) | (234) | ||||
Property and equipment at cost | 0 | 0 | ||||
Less accumulated depreciation and amortization | 0 | 0 | ||||
Property and equipment, net | 0 | 0 | ||||
Operating lease right-of-use assets | 0 | |||||
Long-term prepayments and other | 0 | (63,494) | ||||
Goodwill and other intangible assets, net | 0 | 0 | ||||
Intercompany receivable | (507,181) | (456,338) | ||||
Investment in consolidated subsidiaries | (1,499,124) | (1,325,380) | ||||
Total Assets | (2,006,606) | (1,845,446) | ||||
Current liabilities: | ||||||
Accounts payable | (301) | (234) | ||||
Air traffic liability | 0 | 0 | ||||
Other accrued liabilities | 0 | 0 | ||||
Current maturities of long-term debt, less discount, and finance lease obligations | 0 | 0 | ||||
Current maturities of operating leases | 0 | |||||
Total | (301) | (234) | ||||
Long-term debt and finance lease obligations | 0 | 0 | ||||
Intercompany payable | (507,181) | (456,338) | ||||
Other liabilities and deferred credits: | ||||||
Noncurrent operating leases | 0 | |||||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | ||||
Other liabilities and deferred credits | 0 | 0 | ||||
Noncurrent frequent flyer deferred revenue | 0 | 0 | ||||
Deferred tax liabilities, net | 0 | 0 | ||||
Total | 0 | 0 | ||||
Shareholders’ equity | (1,499,124) | (1,388,874) | ||||
Total Liabilities and Shareholders’ Equity | (2,006,606) | (1,845,446) | ||||
Parent Issuer / Guarantor | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 4,059 | 5,154 | ||||
Short-term investments | 0 | 0 | ||||
Accounts receivable, net | 0 | 0 | ||||
Spare parts and supplies, net | 0 | 0 | ||||
Prepaid expenses and other | 225 | 165 | ||||
Total | 4,284 | 5,319 | ||||
Property and equipment at cost | 0 | 0 | ||||
Less accumulated depreciation and amortization | 0 | 0 | ||||
Property and equipment, net | 0 | 0 | ||||
Operating lease right-of-use assets | 0 | |||||
Long-term prepayments and other | 0 | 62,990 | ||||
Goodwill and other intangible assets, net | 0 | 0 | ||||
Intercompany receivable | 0 | 0 | ||||
Investment in consolidated subsidiaries | 1,498,620 | 1,325,380 | ||||
Total Assets | 1,502,904 | 1,393,689 | ||||
Current liabilities: | ||||||
Accounts payable | 466 | 665 | ||||
Air traffic liability | 0 | 0 | ||||
Other accrued liabilities | 0 | 0 | ||||
Current maturities of long-term debt, less discount, and finance lease obligations | 0 | 0 | ||||
Current maturities of operating leases | 0 | |||||
Total | 466 | 665 | ||||
Long-term debt and finance lease obligations | 0 | 0 | ||||
Intercompany payable | 495,748 | 445,030 | ||||
Other liabilities and deferred credits: | ||||||
Noncurrent operating leases | 0 | |||||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | ||||
Other liabilities and deferred credits | 0 | 0 | ||||
Noncurrent frequent flyer deferred revenue | 0 | 0 | ||||
Deferred tax liabilities, net | 0 | 0 | ||||
Total | 0 | 0 | ||||
Shareholders’ equity | 1,006,690 | 947,994 | ||||
Total Liabilities and Shareholders’ Equity | 1,502,904 | 1,393,689 | ||||
Subsidiary Issuer / Guarantor | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 328,541 | 255,279 | ||||
Short-term investments | 198,146 | 232,241 | ||||
Accounts receivable, net | 108,882 | 109,499 | ||||
Spare parts and supplies, net | 35,897 | 33,942 | ||||
Prepaid expenses and other | 52,926 | 58,296 | ||||
Total | 724,392 | 689,257 | ||||
Property and equipment at cost | 2,761,918 | 2,756,551 | ||||
Less accumulated depreciation and amortization | (678,843) | (648,111) | ||||
Property and equipment, net | 2,083,075 | 2,108,440 | ||||
Operating lease right-of-use assets | 601,966 | |||||
Long-term prepayments and other | 150,652 | 185,161 | ||||
Goodwill and other intangible assets, net | 119,831 | 120,119 | ||||
Intercompany receivable | 507,181 | 456,338 | ||||
Investment in consolidated subsidiaries | 0 | 0 | ||||
Total Assets | 4,187,097 | 3,559,315 | ||||
Current liabilities: | ||||||
Accounts payable | 147,077 | 139,552 | ||||
Air traffic liability | 693,399 | 598,387 | ||||
Other accrued liabilities | 163,793 | 157,842 | ||||
Current maturities of long-term debt, less discount, and finance lease obligations | 50,029 | 101,052 | ||||
Current maturities of operating leases | 89,434 | |||||
Total | 1,143,732 | 996,833 | ||||
Long-term debt and finance lease obligations | 515,254 | 604,089 | ||||
Intercompany payable | 0 | 0 | ||||
Other liabilities and deferred credits: | ||||||
Noncurrent operating leases | 469,543 | |||||
Accumulated pension and other post-retirement benefit obligations | 181,599 | 182,620 | ||||
Other liabilities and deferred credits | 99,736 | 118,682 | ||||
Noncurrent frequent flyer deferred revenue | 172,343 | 163,619 | ||||
Deferred tax liabilities, net | 170,110 | 167,770 | ||||
Total | 1,093,331 | 632,691 | ||||
Shareholders’ equity | 1,434,780 | 1,325,702 | ||||
Total Liabilities and Shareholders’ Equity | 4,187,097 | 3,559,315 | ||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 8,704 | 8,144 | ||||
Short-term investments | 0 | 0 | ||||
Accounts receivable, net | 1,145 | 2,569 | ||||
Spare parts and supplies, net | 0 | 0 | ||||
Prepaid expenses and other | 128 | 112 | ||||
Total | 9,977 | 10,825 | ||||
Property and equipment at cost | 91,830 | 92,021 | ||||
Less accumulated depreciation and amortization | (18,323) | (15,350) | ||||
Property and equipment, net | 73,507 | 76,671 | ||||
Operating lease right-of-use assets | 0 | |||||
Long-term prepayments and other | 300 | 899 | ||||
Goodwill and other intangible assets, net | 500 | 693 | ||||
Intercompany receivable | 0 | 0 | ||||
Investment in consolidated subsidiaries | 504 | 0 | ||||
Total Assets | 84,788 | 89,088 | ||||
Current liabilities: | ||||||
Accounts payable | 2,889 | 3,163 | ||||
Air traffic liability | 4,770 | 5,349 | ||||
Other accrued liabilities | 241 | 312 | ||||
Current maturities of long-term debt, less discount, and finance lease obligations | 0 | 45 | ||||
Current maturities of operating leases | 0 | |||||
Total | 7,900 | 8,869 | ||||
Long-term debt and finance lease obligations | 0 | 4,595 | ||||
Intercompany payable | 11,433 | 11,308 | ||||
Other liabilities and deferred credits: | ||||||
Noncurrent operating leases | 0 | |||||
Accumulated pension and other post-retirement benefit obligations | 0 | 0 | ||||
Other liabilities and deferred credits | 1,111 | 1,144 | ||||
Noncurrent frequent flyer deferred revenue | 0 | 0 | ||||
Deferred tax liabilities, net | 0 | 0 | ||||
Total | 1,111 | 1,144 | ||||
Shareholders’ equity | 64,344 | 63,172 | ||||
Total Liabilities and Shareholders’ Equity | $ 84,788 | $ 89,088 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | $ 311,212 | $ 373,761 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | 0 | 0 |
Additions to property and equipment, including pre-delivery deposits | (151,577) | (258,112) |
Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment | 4,350 | 987 |
Purchases of investments | (189,929) | (110,092) |
Sales of investments | 225,706 | 119,236 |
Other | (6,275) | 0 |
Net cash used in investing activities | (117,725) | (247,981) |
Cash Flows From Financing Activities: | ||
Long-term borrowings | 0 | 86,500 |
Repayments of long-term debt and finance lease obligations | (77,471) | (30,047) |
Debt issuance costs | (33) | (889) |
Dividend payments | (11,554) | (12,238) |
Net payments from affiliates | 0 | 0 |
Repurchases of common stock | (30,690) | (22,745) |
Other | (1,012) | (3,523) |
Net cash provided by (used in) financing activities | (120,760) | 17,058 |
Net increase in cash and cash equivalents | 72,727 | 142,838 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 268,577 | 191,953 |
Cash, cash equivalents, and restricted cash - End of Period | 341,304 | 334,791 |
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 | 57,305 | 17,421 |
Additions to property and equipment, including pre-delivery deposits | 0 | 0 |
Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Other | 0 | |
Net cash used in investing activities | 57,305 | 17,421 |
Cash Flows From Financing Activities: | ||
Long-term borrowings | 0 | |
Repayments of long-term debt and finance lease obligations | 0 | 0 |
Debt issuance costs | 0 | 0 |
Dividend payments | 0 | 0 |
Net payments from affiliates | (57,305) | (17,421) |
Repurchases of common stock | 0 | 0 |
Other | 0 | 0 |
Net cash provided by (used in) financing activities | (57,305) | (17,421) |
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 | (956) | (2,603) |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | (7,600) | (8,700) |
Additions to property and equipment, including pre-delivery deposits | 0 | 0 |
Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Other | 0 | |
Net cash used in investing activities | (7,600) | (8,700) |
Cash Flows From Financing Activities: | ||
Long-term borrowings | 0 | |
Repayments of long-term debt and finance lease obligations | 0 | 0 |
Debt issuance costs | 0 | 0 |
Dividend payments | (11,554) | (12,238) |
Net payments from affiliates | 49,705 | 8,721 |
Repurchases of common stock | (30,690) | (22,745) |
Other | 0 | 78 |
Net cash provided by (used in) financing activities | 7,461 | (26,184) |
Net increase in cash and cash equivalents | (1,095) | (37,487) |
Cash, cash equivalents, and restricted cash - Beginning of Period | 5,154 | 57,405 |
Cash, cash equivalents, and restricted cash - End of Period | 4,059 | 19,918 |
Subsidiary Issuer / Guarantor | Reportable Legal Entities | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | 314,741 | 375,052 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | (49,705) | (8,721) |
Additions to property and equipment, including pre-delivery deposits | (147,116) | (247,607) |
Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment | 4,350 | 987 |
Purchases of investments | (189,929) | (110,092) |
Sales of investments | 225,706 | 119,236 |
Other | (6,275) | |
Net cash used in investing activities | (162,969) | (246,197) |
Cash Flows From Financing Activities: | ||
Long-term borrowings | 86,500 | |
Repayments of long-term debt and finance lease obligations | (77,465) | (30,047) |
Debt issuance costs | (33) | (889) |
Dividend payments | 0 | 0 |
Net payments from affiliates | 0 | 0 |
Repurchases of common stock | 0 | 0 |
Other | (1,012) | (3,601) |
Net cash provided by (used in) financing activities | (78,510) | 51,963 |
Net increase in cash and cash equivalents | 73,262 | 180,818 |
Cash, cash equivalents, and restricted cash - Beginning of Period | 255,279 | 126,861 |
Cash, cash equivalents, and restricted cash - End of Period | 328,541 | 307,679 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statements of Cash Flows | ||
Net Cash Provided By (Used In) Operating Activities | (2,573) | 1,312 |
Cash Flows From Investing Activities: | ||
Net payments to affiliates | 0 | 0 |
Additions to property and equipment, including pre-delivery deposits | (4,461) | (10,505) |
Proceeds from the sale and sale leaseback of aircraft and aircraft related equipment | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales of investments | 0 | 0 |
Other | 0 | |
Net cash used in investing activities | (4,461) | (10,505) |
Cash Flows From Financing Activities: | ||
Long-term borrowings | 0 | |
Repayments of long-term debt and finance lease obligations | (6) | 0 |
Debt issuance costs | 0 | 0 |
Dividend payments | 0 | 0 |
Net payments from affiliates | 7,600 | 8,700 |
Repurchases of common stock | 0 | 0 |
Other | 0 | 0 |
Net cash provided by (used in) financing activities | 7,594 | 8,700 |
Net increase in cash and cash equivalents | 560 | (493) |
Cash, cash equivalents, and restricted cash - Beginning of Period | 8,144 | 7,687 |
Cash, cash equivalents, and restricted cash - End of Period | $ 8,704 | $ 7,194 |