Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 06, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SPIRIT AIRLINES, INC. | ||
Entity Central Index Key | 1,498,710 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3.3 | ||
Entity Common Stock, Shares Outstanding | 69,336,418 |
Statements Of Operations
Statements Of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating revenues: | |||
Passenger | $ 1,200,621 | $ 1,169,338 | $ 1,144,972 |
Non-ticket | 1,121,335 | 972,125 | 786,608 |
Total operating revenues | 2,321,956 | 2,141,463 | 1,931,580 |
Operating expenses: | |||
Salaries, wages and benefits | 472,471 | 377,508 | 313,409 |
Aircraft fuel | 447,553 | 461,447 | 612,909 |
Aircraft rent | 201,675 | 211,531 | 195,827 |
Landing fees and other rents | 151,679 | 131,077 | 105,115 |
Depreciation and amortization | 101,136 | 73,908 | 46,971 |
Maintenance, materials and repairs | 98,587 | 80,448 | 73,956 |
Distribution | 96,627 | 86,576 | 74,823 |
Special charges | 37,189 | 673 | 45 |
Loss on disposal of assets | 4,187 | 1,604 | 3,008 |
Other operating | 267,191 | 207,569 | 150,254 |
Total operating expenses | 1,878,295 | 1,632,341 | 1,576,317 |
Operating income | 443,661 | 509,122 | 355,263 |
Other (income) expense: | |||
Interest expense | 41,654 | 20,382 | 2,747 |
Capitalized interest | (12,705) | (11,553) | (2,747) |
Interest income | (5,276) | (2,125) | (336) |
Other expense | 528 | 15 | 2,605 |
Total other (income) expense | 24,201 | 6,719 | 2,269 |
Income before income taxes | 419,460 | 502,403 | 352,994 |
Provision for income taxes | 154,581 | 185,183 | 127,530 |
Net income | $ 264,879 | $ 317,220 | $ 225,464 |
Basic earnings per share (in dollars per share) | $ 3.77 | $ 4.39 | $ 3.10 |
Diluted earnings per share (in dollars per share) | $ 3.76 | $ 4.38 | $ 3.08 |
Statements of Comprehensive Inc
Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 264,879 | $ 317,220 | $ 225,464 |
Unrealized gain (loss) on interest rate derivative instruments, net of deferred taxes of $0, ($550) and ($423) | 0 | (910) | (718) |
Unrealized gain (loss) on short-term investment securities, net of deferred taxes of ($13), $0 and $0 | (23) | 0 | 0 |
Interest rate derivative losses reclassified into earnings, net of taxes of $130, $50, and $0 | 224 | 82 | 0 |
Other comprehensive income (loss) | 201 | (828) | (718) |
Comprehensive income | $ 265,080 | $ 316,392 | $ 224,746 |
Statements of Comprehensive In4
Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized gain (loss) on interest rate derivative instruments, net of deferred taxes of $0, ($550) and ($423) | $ 0 | $ (550) | $ (423) |
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | (13) | 0 | 0 |
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion, Tax | $ 130 | $ 50 | $ 0 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 700,900 | $ 803,632 |
Short-term investment securities | 100,155 | 0 |
Accounts receivable, net | 41,136 | 28,266 |
Aircraft maintenance deposits | 87,035 | 73,415 |
Prepaid income taxes | 0 | 72,278 |
Prepaid expenses and other current assets | 46,619 | 48,749 |
Total current assets | 975,845 | 1,026,340 |
Property and equipment: | ||
Flight equipment | 1,461,525 | 834,927 |
Ground property and equipment | 126,206 | 74,814 |
Less accumulated depreciation | (122,509) | (65,524) |
Total property and equipment | 1,465,222 | 844,217 |
Deposits on flight equipment purchase contracts | 325,688 | 286,837 |
Long-term aircraft maintenance deposits | 199,415 | 206,485 |
Deferred heavy maintenance, net | 75,534 | 89,127 |
Other long-term assets | 110,223 | 77,539 |
Total assets | 3,151,927 | 2,530,545 |
Current liabilities: | ||
Accounts payable | 15,193 | 17,043 |
Air traffic liability | 206,392 | 216,831 |
Current maturities of long-term debt | 84,354 | 49,637 |
Other current liabilities | 226,011 | 182,729 |
Total current liabilities | 531,950 | 466,240 |
Long-term debt, less current maturities | 897,359 | 596,693 |
Long-term deferred income taxes | 308,143 | 221,481 |
Deferred gains and other long-term liabilities | 19,868 | 20,821 |
Shareholders’ equity: | ||
Common stock: Common stock, $0.0001 par value, 240,000,000 shares authorized at December 31, 2016 and 2015, respectively; 73,549,872 and 73,402,877 issued and 69,326,202 and 71,541,788 outstanding as of December 31, 2016 and 2015, respectively | 7 | 7 |
Additional paid-in-capital | 551,004 | 544,277 |
Treasury stock, at cost: 4,223,670 and 1,861,089 shares as of December 31, 2016 and 2015, respectively | (218,692) | (116,182) |
Retained earnings | 1,063,633 | 798,754 |
Accumulated other comprehensive loss | (1,345) | (1,546) |
Total shareholders’ equity | 1,394,607 | 1,225,310 |
Total liabilities and shareholders’ equity | $ 3,151,927 | $ 2,530,545 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Treasury stock, shares | 4,223,670 | 1,861,089 |
Voting Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 240,000,000 | 240,000,000 |
Common stock, shares issued | 73,549,872 | 73,402,877 |
Common stock, shares outstanding | 69,326,202 | 71,541,788 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 264,879 | $ 317,220 | $ 225,464 |
Adjustments to reconcile net income to net cash provided by operations: | |||
Unrealized losses on open derivative contracts, net | 0 | 2,202 | 0 |
Losses reclassified from other comprehensive income | 354 | 132 | 0 |
Equity-based compensation | 7,105 | 9,222 | 8,797 |
Allowance for doubtful accounts (recoveries) | 80 | 12 | (45) |
Amortization of deferred gains and losses and debt issuance costs | 5,732 | 1,165 | (185) |
Depreciation and amortization | 101,136 | 73,908 | 46,971 |
Deferred income tax expense | 86,146 | 155,614 | 34,118 |
Loss on disposal of assets | 4,187 | 1,604 | 3,008 |
Lease termination costs | 37,189 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (12,951) | (5,592) | 606 |
Aircraft maintenance deposits | (45,869) | (32,101) | (31,925) |
Long-term deposits and other assets | (75,780) | (103,613) | (48,382) |
Prepaid income taxes | 72,278 | 0 | 0 |
Accounts payable | (6,823) | 2,706 | (10,034) |
Air traffic liability | (11,582) | 36,387 | 21,135 |
Other liabilities | 47,391 | 14,119 | 12,302 |
Other | 206 | 0 | 0 |
Net cash provided by operating activities | 473,678 | 472,985 | 261,830 |
Investing activities: | |||
Purchase of short-term investment securities | (103,258) | 0 | 0 |
Proceeds from the maturity of short-term investment securities | 2,842 | 0 | 0 |
Proceeds from sale of property and equipment | 50 | 0 | 0 |
Pre-delivery deposits for flight equipment, net of refunds | (173,947) | (142,323) | (115,802) |
Capitalized interest | (10,834) | (10,159) | (1,318) |
Purchase of property and equipment | (541,122) | (548,800) | (186,569) |
Net cash used in investing activities | (826,269) | (701,282) | (303,689) |
Financing activities: | |||
Proceeds from issuance of long-term debt | 417,275 | 536,780 | 148,000 |
Proceeds from stock options exercised | 92 | 32 | 174 |
Payments on debt and capital lease obligations | (64,421) | (26,364) | (1,233) |
Proceeds from sale leaseback transactions | 0 | 7,300 | 7,200 |
Payments to pre-IPO shareholders pursuant to tax receivable agreement | 0 | 0 | (5,643) |
Excess tax (deficiency) benefit from equity-based compensation | (470) | 8,850 | 1,871 |
Repurchase of common stock | (102,510) | (112,261) | (1,630) |
Debt issuance costs | (107) | (15,192) | (4,727) |
Net cash provided by financing activities | 249,859 | 399,145 | 144,012 |
Net (decrease) increase in cash and cash equivalents | (102,732) | 170,848 | 102,153 |
Cash and cash equivalents at beginning of period | 803,632 | 632,784 | 530,631 |
Cash and cash equivalents at end of period | 700,900 | 803,632 | 632,784 |
Cash payments for: | |||
Interest, net of capitalized interest | 39,963 | 7,061 | 0 |
Income taxes paid, net of refunds | (5,579) | 95,933 | 89,104 |
Non-cash transactions: | |||
Capital expenditures funded by capital lease borrowings | $ (31) | $ 0 | $ (173) |
Statements of Shareholders_ Equ
Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2013 | $ 769,117 | $ 7 | $ 515,331 | $ (2,291) | $ 256,070 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 8,797 | 8,797 | ||||
Repurchase of common stock | (1,630) | (1,630) | ||||
Proceeds from options exercised | 174 | 174 | ||||
Excess tax benefits from share-based compensation | 1,871 | 1,871 | ||||
Changes in comprehensive income | (718) | (718) | ||||
Net income | 225,464 | 225,464 | ||||
Balance at Dec. 31, 2014 | 1,003,075 | 7 | 526,173 | (3,921) | 481,534 | (718) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 9,222 | 9,222 | ||||
Repurchase of common stock | (112,261) | (112,261) | ||||
Proceeds from options exercised | 32 | 32 | ||||
Excess tax benefits from share-based compensation | 8,850 | 8,850 | ||||
Changes in comprehensive income | (828) | (828) | ||||
Net income | 317,220 | 317,220 | ||||
Balance at Dec. 31, 2015 | 1,225,310 | 7 | 544,277 | (116,182) | 798,754 | (1,546) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 7,105 | 7,105 | ||||
Repurchase of common stock | (102,510) | (102,510) | ||||
Proceeds from options exercised | 92 | 92 | ||||
Excess tax deficiency from share-based compensation | (470) | (470) | ||||
Changes in comprehensive income | 201 | 201 | ||||
Net income | 264,879 | 264,879 | ||||
Balance at Dec. 31, 2016 | $ 1,394,607 | $ 7 | $ 551,004 | $ (218,692) | $ 1,063,633 | $ (1,345) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Spirit Airlines, Inc. (Spirit or the Company) headquartered in Miramar, Florida, is an ultra low-cost, low-fare airline that provides affordable travel opportunities principally throughout the domestic United States, the Caribbean and Latin America. The Company manages operations on a system-wide basis due to the interdependence of its route structure in the various markets served. As only one service is offered (i.e., air transportation), management has concluded there is only one reportable segment. Certain prior period amounts have been reclassified to conform to the current year's presentation. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's estimates and assumptions are based on historical experience and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially. Critical accounting policies and estimates are defined as those that both (i) are most important to the portrayal of the Company's financial condition and results and (ii) require management's most subjective judgments. The Company's most critical accounting policies and estimates are described below. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of less than three months at the date of acquisition to be cash equivalents. Investments included in this category primarily consist of money market funds. Cash and cash equivalents are stated at cost, which approximates fair value. Short-term Investment Securities The Company's short-term investment securities consist of available-for-sale asset-backed securities with contractual maturities of twelve months or less. These securities are stated at fair value within current assets on the Company's balance sheet. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as proceeds from the maturity of short-term investment securities for the security relinquished, and purchase of short-term investment securities for the security purchased, in the Company's statement of cash flows. Realized gains and losses on sales of investments, if any, are reflected in non-operating income (expense) in the statements of operations. Unrealized gains and losses on investment securities are reflected as a component of accumulated other comprehensive income. Accounts Receivable Accounts receivable primarily consist of amounts due from credit card processors associated with the sales of tickets and amounts due from the Internal Revenue Service related to federal excise fuel tax. The Company records an allowance for doubtful accounts for amounts not expected to be collected. The Company estimates the allowance based on historical write-offs as well as aging trends. The allowance for doubtful accounts was immaterial as of December 31, 2016 and 2015 . In addition, the provision for doubtful accounts and write-offs for 2016 , 2015 and 2014 were each immaterial. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation of operating property and equipment is computed using the straight-line method applied to each unit of property. Residual values for aircraft, major spare rotable parts, avionics and assemblies are generally estimated to be 10% . Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed using the Company's incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in depreciation and amortization expense. The depreciable lives used for the principal depreciable asset classifications are: Estimated Useful Life Aircraft 25 years Spare rotables and flight assemblies 7 to 15 years Other equipment and vehicles 5 to 7 years Internal use software 3 to 10 years Capital lease Lease term Leasehold improvements Lesser of lease term or estimated useful life of the improvement As of December 31, 2016 , the Company had 36 aircraft and 1 spare engine capitalized within flight equipment with depreciable lives of 25 years. As of December 31, 2016 , the Company had 59 aircraft financed through operating leases with lease terms from 12 to 18 years and 11 spare engines financed through operating leases with lease terms from 10 to 13 years . The following table illustrates the components of depreciation and amortization expense: Year Ended December 31, 2016 2015 2014 (in thousands) Depreciation $ 57,325 $ 30,797 $ 11,169 Amortization of heavy maintenance 43,811 43,111 35,802 Total depreciation and amortization $ 101,136 $ 73,908 $ 46,971 The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor cost for employees who are directly associated with, and devote time, to internal-use software projects. Capitalized computer software, included as a component of ground and other equipment in the accompanying balance sheets, net of accumulated depreciation, was $9.4 million and $8.8 million at December 31, 2016 and 2015 , respectively. Amortization of capitalized software costs is charged to depreciation on a straight-line method basis. Amortization of capitalized software costs was $3.2 million , $3.1 million and $3.5 million for the years ended 2016 , 2015 and 2014 , respectively. The Company placed in service internal-use software of $4.1 million , $4.3 million and $2.7 million , during the years ended 2016 , 2015 and 2014 , respectively. Measurement of Asset Impairments The Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired, the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, and the net book value of the assets exceeds their estimated fair value. In making these determinations, the Company uses certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, and estimated salvage values. Passenger Revenue Recognition Tickets sold are initially deferred as “air traffic liability.” Passenger revenue is recognized at time of departure when transportation is provided. All tickets sold by the Company are nonrefundable. An unused ticket expires at the date of scheduled travel and is recognized as revenue at the date of scheduled travel. Customers may elect to change their itinerary prior to the date of departure. A service charge is assessed and recognized on the date the change is initiated and is deducted from the face value of the original purchase price of the ticket, and the original ticket becomes invalid. The amount remaining after deducting the service charge is called a credit shell which expires 60 days from the date the credit shell is created and can be used towards the purchase of a new ticket and the Company’s other service offerings. The amount of credits expected to expire is recognized as revenue upon issuance of the credit and is estimated based on historical experience. Estimating the amount of credits that will go unused involves some level of subjectivity and judgment. However, given the relatively short period of time to expiration, this does not have a significant impact on the Company's financial statements. The Company is also required to collect certain taxes and fees from customers on behalf of government agencies and airports and remit to the applicable governmental entity or airport on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, airport passenger facility charges and international arrival and departure taxes. These items are collected from customers at the time they purchase their tickets, but are not included in passenger revenue. The Company records a liability upon collection from the customer and relieves the liability when payments are remitted to the applicable governmental agency or airport. Frequent Flier Program Flown Miles. The Company records unrecognized revenue for mileage credits earned by passengers under its FREE SPIRIT program, including mileage credits for members with an insufficient number of mileage credits to earn an award, based on the estimated incremental cost of providing free travel for credits that are expected to be redeemed. Incremental costs include fuel, insurance, security, ticketing and facility charges reduced by an estimate of fees required to be paid by the passenger when redeeming the award. Affinity Card Program. During 2015, the Company extended its agreement with the administrator of the FREE SPIRIT affinity credit card program, which was scheduled to expire in April 2016. The renegotiated program was extended through 2022. As part of the new agreement, the Company received a $10.7 million signing bonus that is being deferred over the contract term and has been reflected in the table below as consideration received from credit card mileage programs in 2015. This extension is considered a material change and thus at the inception of this new arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting using the criteria as set forth in ASU No. 2009-13. Under the Company's affinity card program, funds received for the marketing of a co-branded Spirit credit card and delivery of award miles are accounted for as a multiple-deliverable arrangement. At the inception of the arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting. The Company determined the arrangement had three separate units of accounting: (i) travel miles to be awarded, (ii) licensing of brand and access to member lists and (iii) advertising and marketing efforts. Arrangement consideration was allocated based on relative selling price. At inception of the arrangement, the Company established the estimated selling price for all deliverables that qualified for separation. The manner in which the selling price was established was based on a hierarchy of evidence the Company considered. Total arrangement consideration was then allocated to each deliverable on the basis of the deliverable’s relative selling price. In considering the hierarchy of evidence, the Company first determined whether vendor specific objective evidence of selling price or third-party evidence of selling price existed. It was determined by the Company that neither vendor specific objective evidence of selling price nor third-party evidence existed due to the uniqueness of the Company’s program. As such, the Company developed its best estimate of the selling price for all deliverables. For the award miles, the Company considered a number of entity-specific factors when developing the best estimate of the selling price, including the number of miles needed to redeem an award, average fare of comparable segments, breakage, restrictions and other charges. For licensing of brand and access to member lists, the Company considered both market-specific factors and entity-specific factors, including general profit margins realized in the marketplace/industry, brand power, market royalty rates and size of customer base. For the advertising element, the Company considered market-specific factors and entity-specific factors, including the Company’s internal costs (and fluctuations of costs) of providing services, volume of marketing efforts and overall advertising plan. Consideration allocated based on the relative selling price to both brand licensing and advertising elements is recognized as revenue when earned and recorded in non-ticket revenue. Consideration allocated to award miles is deferred and recognized ratably as passenger revenue over the estimated period the transportation is expected to be provided which is estimated at 17 months . The Company used entity-specific assumptions coupled with the various judgments necessary to determine the selling price of a deliverable in accordance with the required selling price hierarchy. Changes in these assumptions could result in changes in the estimated selling prices. Determining the frequency to reassess selling price for individual deliverables requires significant judgment. As of December 31, 2016 , there have been no changes in either the selling price or the method or assumptions used to determine selling price for any of the identified units of accounting that would have a significant effect on the allocation of consideration. The following table illustrates total cash proceeds received from the sale of mileage credits and the portion of such proceeds recognized in revenue immediately as marketing component: Consideration received from credit card mile programs Portion of proceeds recognized immediately as marketing component Year Ended (in thousands) December 31, 2016 $ 48,882 $ 36,640 December 31, 2015 58,005 35,938 December 31, 2014 33,819 28,140 Total unrecognized revenue from future FREE SPIRIT award redemptions and the sale of mileage credits was $15.3 million and $14.9 million at December 31, 2016 and 2015 , respectively. These balances are recorded as a component of air traffic liability in the accompanying balance sheets. Non-ticket Revenue Recognition Non-ticket revenues are generated from air travel-related services for baggage, bookings through the Company’s call center or third-party vendors, advance seat selection, itinerary changes and loyalty programs. Non-ticket revenues also consist of services not directly related to providing transportation such as the FREE SPIRIT affinity credit card program, $9 Fare Club and the sale of advertising to third parties on Spirit’s website and on board aircraft. The following table summarizes the primary components of non-ticket revenue and the revenue recognition method utilized for each service or product: Year Ended December 31, Non-ticket revenue Recognition method 2016 2015 2014 (in thousands) Baggage Time of departure $ 434,269 $ 381,386 $ 318,103 Passenger usage fee Time of departure 358,920 298,092 221,992 Advance seat selection Time of departure 110,966 97,786 76,270 Service charges for changes and cancellations When itinerary is changed 42,823 43,756 38,388 Other 174,357 151,105 131,855 Non-ticket revenue $ 1,121,335 $ 972,125 $ 786,608 Charges for services recognized at time of departure are initially recorded as a liability, within air traffic liability, until time of departure. The passenger usage fee is charged for tickets sold through the Company’s primary sales distribution channels. The primary sales distribution channels for which passenger usage fees are charged include sales through the Company’s website, sales through the third-party provided call center and sales through travel agents; the Company does not charge a passenger usage fee for sales made at its airport ticket counters. Other non-ticket revenues include revenues from other air related charges as well as non-air related charges. Other air related charges include optional services and products provided to passengers such as travel insurance, use of the Company’s call center or travel agents, and commissions on sale of on-board products, among others. Non-air related charges primarily consist of revenues from advertising on the Company’s aircraft and website, the Company’s $9 Fare Club subscription-based membership program and the Company’s FREE SPIRIT affinity credit card program. Airframe and Engine Maintenance The Company accounts for heavy maintenance and major overhaul under the deferral method whereby the cost of heavy maintenance and major overhaul is deferred and amortized until the earlier of the end of the useful life of the related asset, the end of the remaining lease term or the next scheduled heavy maintenance event. Amortization of heavy maintenance and major overhaul costs charged to depreciation and amortization expense was $43.8 million , $43.1 million and $35.8 million for the years ended 2016 , 2015 and 2014 , respectively. During the years ended 2016 , 2015 and 2014 , the Company deferred $35.4 million , $9.1 million and $33.6 million , respectively, of costs for heavy maintenance. At December 31, 2016 and 2015 , the Company had deferred heavy maintenance balance of $238.3 million and $208.1 million , and accumulated heavy maintenance amortization of $162.8 million and $118.9 million , respectively. The Company outsources certain routine, non-heavy maintenance functions under contracts that require payment on a utilization basis, such as flight hours. Costs incurred for maintenance and repair under flight hour maintenance contracts, where labor and materials price risks have been transferred to the service provider, are expensed based on contractual payment terms. All other costs for routine maintenance of the airframes and engines are charged to expense as performed. The table below summarizes the extent to which the Company’s maintenance costs are rate capped due to flight hour maintenance contracts: Year Ended December 31, 2016 2015 2014 (in thousands) Flight hour-based maintenance expense $ 48,471 $ 41,818 $ 35,675 Non-flight hour-based maintenance expense 50,116 38,630 38,281 Total maintenance, materials and repairs $ 98,587 $ 80,448 $ 73,956 Leased Aircraft Return Costs The Company's aircraft lease agreements often contain provisions that require the Company to return aircraft airframes and engines to the lessor in a certain condition or pay an amount to the lessor based on the airframe and engine's actual return condition. Lease return costs include all costs that would be incurred at the return of the aircraft, including costs incurred to repair the airframe and engines to the required condition as stipulated by the lease. Lease return costs could include, but are not limited to redelivery cost, fuel, final inspections, reconfiguration of the cabin, repairs to the airframe, painting, overhaul of engines, replacement of components, and checks. Lease return costs are recognized beginning when it is probable that such costs will be incurred and they can be estimated. Incurrence of lease return costs becomes probable and the amount of those costs can typically be estimated near the end of the lease term (that is, after the aircraft has completed its last maintenance cycle prior to being returned). When determining probability and estimated cost, there are various other factors which need to be considered such as current condition of the aircraft, the age of the aircraft at lease expiration, number of hours run on the engines, number of cycles run on the airframe, projected number of hours run on the engine at the time of return, number of projected cycles run on the airframe at the time of return, the extent of repairs needed if any at return, return locations, current configuration of the aircraft, current paint of the aircraft, estimated escalation of cost of repairs and materials at the time of return, current flight hour agreement rates and future flight hour agreement rates. In addition, typically near the lease return date, the lessors may allow reserves to be applied as return condition consideration or pass on certain return provisions if they do not align with their current plans to remarket the aircraft. When costs become both probable and estimable, they are accrued on a straight-line basis as contingent rent, a component of supplemental rent, through the remaining lease term. Management expects return costs to be estimable near the end of the lease term, as such, contingent rent for related aircraft will be higher near the end of the lease term. Aircraft Fuel Aircraft fuel expense includes jet fuel and associated “into-plane” costs, taxes, and oil, and realized and unrealized gains and losses associated with fuel derivative contracts, if any. Derivative Instruments The Company accounts for derivative financial instruments at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current liabilities. For derivatives designated as cash flow hedges, changes in fair value of the derivative are generally reported in other comprehensive income and are subsequently reclassified into earnings when the hedged item affects earnings. During the third quarter of 2015, the Company settled six forward interest rate swaps having a total notional amount of $120 million . These interest rate swaps fixed the benchmark interest rate component of interest payments on the debt related to three Airbus A321 aircraft, which the Company took delivery of during the third quarter of 2015. These instruments limited the Company's exposure to changes in the benchmark interest rate in the period from the trade date through the date of maturity. The interest rate swaps were designated as cash flow hedges. The Company accounts for interest rate swaps at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current liabilities with changes in fair value recorded within accumulated other comprehensive income (AOCI). Realized gains and losses from cash flow hedges are recorded in the statement of cash flows as a component of cash flows from operating activities. Subsequent to the issuance of each debt instrument, amounts remaining in AOCI are amortized over the life of the fixed-rate debt instrument. For the years ended 2016 , 2015 and 2014 , the Company did not hold fuel derivative instruments that were designated as cash flow hedges for accounting purposes. As a result, changes in the fair value of such fuel derivative contracts were recorded within aircraft fuel expense in the accompanying statements of operations. These amounts include both realized gains and losses and mark-to-market adjustments of the fair value of unsettled derivative instruments at the end of each period. For additional information, refer to Note 13, Financial Instruments and Risk Management. Advertising The Company expenses advertising and the production costs of advertising as incurred. Marketing and advertising expenses of $3.2 million , $3.5 million and $3.0 million for the years ended 2016 , 2015 and 2014 , respectively, were recorded within distribution expense in the statement of operations. Income Taxes The Company accounts for income taxes using the liability method. The Company records a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will be not realized. As of December 31, 2016 and 2015 , the Company had no valuation allowance recorded against any deferred tax assets. Stock-Based Compensation The Company recognizes cost of employee services received in exchange for awards of equity instruments based on the fair value of each instrument at the date of grant. Compensation expense is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for an award. The Company has issued and outstanding restricted stock awards, stock option awards and performance share awards. Restricted stock awards are valued at the fair value of the shares on the date of grant. The fair value of share option awards is estimated on the date of grant using the Black-Scholes valuation model. The fair value of performance share awards is estimated through the use of a Monte Carlo simulation model. For additional information, refer to Note 9, Stock-Based Compensation. Concentrations of Risk The Company’s business may be adversely affected by increases in the price of aircraft fuel, the volatility of the price of aircraft fuel, or both. Aircraft fuel, one of the Company’s largest expenditures, represented approximately 24% , 28% and 39% of total operating expenses in 2016 , 2015 and 2014 , respectively. The Company’s operations are largely concentrated in the southeast United States with Fort Lauderdale being the highest volume fueling point in the system. Gulf Coast Jet indexed fuel is the basis for a substantial majority of the Company’s fuel consumption. Any disruption to the oil production or refinery capacity in the Gulf Coast, as a result of weather or any other disaster, or disruptions in supply of jet fuel, dramatic escalations in the costs of jet fuel and/or the failure of fuel providers to perform under fuel arrangements for other reasons could have a material adverse effect on the Company’s financial condition and results of operations. The Company’s operations will continue to be vulnerable to weather conditions (including hurricane season or snow and severe winter weather), which could disrupt service or create air traffic control problems. These events may result in decreased revenue and/or increased costs. Due to the relatively small size of the fleet and high utilization rate, the unavailability of one or more aircraft and resulting reduced capacity could have a material adverse effect on the Company’s business, results of operations and financial condition. As of December 31, 2016 , the Company had four union-represented employee groups that together represented approximately 73% of all employees. As of December 31, 2015 , the Company had four union-represented employee groups that together represented approximately 73% of all employees. A strike or other significant labor dispute with the Company’s unionized employees is likely to adversely affect the Company’s ability to conduct business. Additional disclosures are included in Note 16, Commitments and Contingencies. |
Recent Accounting Developments
Recent Accounting Developments | 12 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Developments | Recent Accounting Developments Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2014-09, (ASU 2014-09), "Revenue from Contracts with Customers." The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The new guidance is effective for the Company in the first quarter of 2018. Early adoption is permitted, but not before the first quarter of 2017. Entities have the option to use either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance and has neither determined the full impact this standard may have on its financial statements nor decided upon the planned method of adoption. While the Company is still evaluating the impact, it expects the accounting for its frequent flier program to be impacted as ASU 2014-09 will no longer allow use of the incremental cost method when recording revenue related to the Company's loyalty programs. The Company also expects the adoption of ASU 2014-09 to impact the classification and timing of recognition of certain ancillary fees as well as the timing of recognition of certain costs to obtain a contract. Financial Instruments In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10).” ASU 2016-01 makes several modifications to Subtopic 825-10, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for interim and annual periods beginning after December 15, 2017 and is not expected to have a material impact on the Company’s financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for the Company in the first quarter of 2019, with early adoption permitted. The Company is currently evaluating the new guidance and believes adoption of this standard will have a significant impact on its balance sheets although adoption is not expected to significantly change the recognition, measurement or presentation of lease expenses within the statements of operations and cash flows. Refer to Note 16, Commitments and Contingencies for information regarding the Company's undiscounted future lease payments and the timing of those payments. Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. The new guidance is effective for the Company in the first quarter of 2017, with early adoption permitted. The Company expects that any excess tax benefits or deficiencies will be recorded within the Company's statement of operations instead of being recorded within additional paid in capital on its balance sheet. The new standard may cause volatility in the Company’s effective tax rates and diluted earnings per share due to the tax effects related to share-based payments being recorded within the income statement. The Company will continue to evaluate the impact of adoption of this guidance on its financial statements. Accounting for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses." The standard requires the use of an "expected loss" model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows." The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. |
Special Charges
Special Charges | 12 Months Ended |
Dec. 31, 2016 | |
Special Charges and Credits [Abstract] | |
Special Charges | Special Charges During the twelve months ended December 31, 2016 , the Company purchased seven A319 aircraft which were previously financed under operating lease agreements. The purchase price for the seven aircraft was $147.7 million , comprised of cash payments of $107.1 million and the application of maintenance and security deposits held by the previous lessors of $40.6 million . The Company estimated the fair value of the aircraft to be $95.7 million and has recorded the seven purchased aircraft within flight equipment on the balance sheets. The Company determined the valuation of the aircraft based on a third-party appraisal considering the condition of each aircraft (a Level 3 measurement). The Company recognized $37.2 million as a cost of terminating the leases within special charges on the statement of operations, made up of the excess of the purchase price paid over the fair value of the aircraft, less previously expensed supplemental rent and other non-cash items of $14.8 million . During the twelve months ended December 31, 2015 , the Company incurred $0.7 million in special charges related to restructuring charges for outsourcing of ramps and passenger services. |
Letters of Credit
Letters of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments Pledged as Collateral [Abstract] | |
Letters of Credit | Letters of Credit As of December 31, 2016 and 2015 , the Company had a $25.2 million and $25.1 million unsecured standby letter of credit facility, of which $19.7 million and $13.0 million had been drawn upon for issued letters of credit, respectively. |
Credit Card Processing Arrangem
Credit Card Processing Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Credit Card Processing Arrangements [Abstract] | |
Credit Card Processing Arrangements | Credit Card Processing Arrangements The Company has agreements with organizations that process credit card transactions arising from the purchase of air travel, baggage charges and other ancillary services by customers. As it is standard in the airline industry, the Company's contractual arrangements with credit card processors permit them, under certain circumstances, to retain a holdback or other collateral, which the Company records as restricted cash, when future air travel and other future services are purchased via credit card transactions. The required holdback is the percentage of the Company's overall credit card sales that its credit card processors hold to cover refunds to customers if the Company fails to fulfill its flight obligations. The Company's credit card processors do not require the Company to maintain cash collateral provided that the Company satisfies certain liquidity and other financial covenants. Failure to meet these covenants would provide the processors the right to place a holdback, resulting in a commensurate reduction of unrestricted cash. As of December 31, 2016 and 2015 , the Company was in compliance with such liquidity and other financial covenants in its credit card processing agreements, and the processors were holding back no remittances. The maximum potential exposure to cash holdbacks by the Company's credit card processors, based upon advance ticket sales and $9 Fare Club memberships as of December 31, 2016 and 2015 , was $234.6 million and $250.2 million , respectively. |
Short-term Investment Securitie
Short-term Investment Securities | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investment Securities | Short-term Investment Securities The Company's short-term investment securities consist of available-for-sale asset-backed securities with contractual maturities of twelve months or less. These securities are stated at fair value within current assets on the Company's balance sheet. Realized gains and losses on sales of investments, if any, are reflected in non-operating income (expense) in the statements of operations. Unrealized gains and losses on investment securities are reflected as a component of accumulated other comprehensive income, (AOCI). As of December 31, 2016 , the Company had $100.2 million in short-term available-for-sale investment securities, earning interest income at a weighted-average fixed rate of approximately 1.1% . For the twelve months ended December 31, 2016 , an unrealized loss of $23 thousand , net of deferred taxes of $13 thousand , was recorded within AOCI related to these investment securities. The Company has not recognized any realized gains or losses related to these securities as the Company has not transacted any sales of these securities. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities included in other current liabilities as of December 31, 2016 and 2015 consist of the following: As of December 31, 2016 2015 (in thousands) Salaries and wages $ 54,578 $ 34,123 Airport obligations 43,989 30,849 Federal excise and other passenger taxes and fees payable 42,064 38,254 Aircraft maintenance 30,233 21,688 Fuel 14,828 7,084 Aircraft and facility lease obligations 10,378 24,014 Interest payable 8,499 12,355 Other 21,442 14,362 Other current liabilities $ 226,011 $ 182,729 |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Stock and Preferred Stock | Common Stock and Preferred Stock The Company’s amended and restated certificate of incorporation dated June 1, 2011, authorizes the Company to issue up to 240,000,000 shares of common stock, $0.0001 par value per share, 50,000,000 shares of non-voting common stock, $0.0001 par value per share and 10,000,000 shares of preferred stock, $0.0001 par value per share. All of the Company’s issued and outstanding shares of common stock and preferred stock are duly authorized, validly issued, fully paid and non-assessable. The Company’s shares of common stock and non-voting common stock are not redeemable and do not have preemptive rights. Common Stock Dividend Rights . Holders of the Company’s common stock are entitled to receive dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds ratably with shares of the Company’s non-voting common stock, subject to preferences that may be applicable to any then outstanding preferred stock and limitations under Delaware law. Voting Rights . Each holder of the Company’s common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. The Company’s stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect all of the directors properly up for election at any given stockholders’ meeting. Liquidation . In the event of the Company’s liquidation, dissolution or winding up, holders of the Company's common stock will be entitled to share ratably with shares of the Company’s non-voting common stock in the net assets legally available for distribution to stockholders after the payment of all of the Company’s debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock. Rights and Preferences . Holders of the Company’s common stock have no preemptive, conversion, subscription or other rights and there are no redemption or sinking fund provisions applicable to the Company’s common stock. The rights, preferences and privileges of the holders of the Company’s common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of the Company’s preferred stock that the Company may designate in the future. Non-Voting Common Stock Dividend Rights. Holders of the Company’s non-voting common stock are entitled to receive dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds ratably with shares of the Company’s common stock, subject to preferences that may be applicable to any then outstanding preferred stock and limitations under Delaware law. Voting Rights. Shares of the Company’s non-voting common stock are not entitled to vote on any matters submitted to a vote of the stockholders, including the election of directors, except to the extent required under Delaware law. Conversion Rights . Shares of the Company’s non-voting common stock will be convertible on a share-for-share basis into common stock at the election of the holder subject to the Company remaining in compliance with applicable foreign ownership limitations. Liquidation. In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s non-voting common stock will be entitled to share ratably with shares of the Company’s common stock in the net assets legally available for distribution to stockholders after the payment of all of the Company’s debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock. Rights and Preferences. Holders of the Company’s non-voting common stock have no preemptive, subscription or other rights, and there are no redemption or sinking fund provisions applicable to the Company’s common stock. The rights, preferences and privileges of the holders of the Company’s common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of the Company’s preferred stock that the Company may designate in the future. As of December 31, 2016 and 2015 , there were no shares of non-voting common stock outstanding. Preferred Stock The Company’s board of directors has the authority, without further action by the Company’s stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The Company’s issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change of control of the Company or other corporate action. As of December 31, 2016 and 2015 , there were no shares of preferred stock outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has stock plans under which directors, officers, key employees and consultants of the Company may be granted restricted stock awards, stock options and other equity-based instruments as a means of promoting the Company’s long-term growth and profitability. The plans are intended to encourage participants to contribute to, and participate in, the success of the Company. On December 16, 2014, the Company's Board of Directors approved the 2015 Incentive Award Plan, or 2015 Plan, which was subsequently approved by the Company's stockholders on June 16, 2015. The number of shares reserved for issuance or transfer pursuant to awards under the 2015 Plan will be increased by the number of shares represented by awards outstanding under the Company's former equity plan, the 2011 Equity Incentive Award Plan (2011 Plan), that are forfeited or lapse unexercised and which, following the effective date of the 2015 Plan, are not issued under the Company's 2011 Plan. No further awards will be granted under the 2011 Stock Plan, and all outstanding awards will continue to be governed by their existing terms. As of December 31, 2016 and December 31, 2015 , 2,358,283 and 2,428,990 shares of the Company’s common stock, respectively, remained available for future issuance under the 2015 Plan. Stock-based compensation cost is included within salaries, wages and benefits in operating expenses in the accompanying statements of operations. Stock-based compensation cost amounted to $7.1 million , $9.2 million and $8.8 million for 2016 , 2015 and 2014 , respectively. During 2016 , 2015 and 2014 , there was $2.6 million , $3.4 million and $3.2 million tax benefit recognized in income related to stock-based compensation, respectively. Restricted Stock and Restricted Stock Units Restricted stock and restricted stock unit awards are valued at the fair value of the shares on the date of grant. Generally, granted shares and units vest 25% per year on each anniversary of issuance. Each restricted stock unit represents the right to receive one share of common stock upon vesting of such restricted stock unit. Vesting of restricted stock units is based on time-based service conditions. In order to vest, the participant must still be employed by the Company, with certain contractual exclusions, at each vesting event. Generally, within 30 days after vesting, the shares underlying the award will be issued to the participant. In the event a successor corporation in a change in control situation fails to assume or substitute for the restricted stock units, the restricted stock units will automatically vest in full as of immediately prior to the consummation of such change in control. In the event of death or permanent disability of a participant, the restricted stock units will automatically vest in full. Compensation expense, net of forfeitures, is recognized on a straight-line basis over the requisite service period. A summary of the status of the Company’s restricted stock shares (restricted stock awards and restricted stock unit awards) as of December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Number of Shares Weighted-Average Outstanding at December 31, 2015 294,680 49.19 Granted 237,001 42.91 Vested (138,949 ) 39.34 Forfeited (118,087 ) 47.26 Outstanding at December 31, 2016 274,645 49.55 There were 237,001 and 74,772 restricted stock shares granted during the years ended December 31, 2016 and December 31, 2015 , respectively. As of December 31, 2016 and December 31, 2015 , there was $9.2 million and $9.8 million , respectively, of total unrecognized compensation cost related to nonvested restricted stock to be recognized over 2.5 years and 2.4 years , respectively. The weighted-average fair value of restricted stock granted during the years ended December 31, 2016 , 2015 and 2014 was $42.91 , $75.40 and $55.14 , respectively. The total fair value of restricted stock shares vested during the years ended December 31, 2016 , 2015 and 2014 was $6.6 million , $9.2 million and $6.5 million respectively. Stock Options Stock option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant, vest over four years of continuous service and have ten -year contractual terms. The fair value of each stock option award is estimated on the date of grant using the Black Scholes model. There were no options granted during 2016 , 2015 , or 2014 . The Company has not granted options since 2011, at which time the Company’s weighted average assumptions for expected volatility, dividends, term and risk-free interest rate were 46.25% , 0% , 6.25 years and 2.03% , respectively. Expected volatilities are based on the historical volatility of a group of peer entities within the same industry. The expected term of options is based upon the simplified method, which represents the average of the vesting term and the contractual term. The risk-free interest rate is based on U.S. Treasury yields for securities with terms approximating the expected term of the option. Prior to the Company's IPO, to the extent a market price was not available, the fair value of the Company’s common stock was estimated using a discounted cash flow analysis and market multiples, based on management’s estimates of revenue, driven by assumed market growth rates, and estimated costs as well as appropriate discount rates. These estimates were consistent with the plans and estimates management used to manage the Company’s business. A summary of share option activity as of December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Number Weighted- Average Aggregate Outstanding at December 31, 2015 28,125 8.20 4.7 890 Exercised (11,500 ) 7.98 Forfeited or expired (375 ) 7.80 Outstanding at December 31, 2016 16,250 8.37 3.7 804 Exercisable at December 31, 2016 16,250 8.37 3.7 804 Vested at December 31, 2016 16,250 8.37 3.7 804 The total intrinsic value of share options exercised during the years ended December 31, 2016 , 2015 and 2014 was $0.4 million , $0.2 million and $1.3 million , respectively. There were no options that vested during the year ended December 31, 2016 . The total fair value of options vested during the years ended December 31, 2015 and 2014 was $4 thousand and $100 thousand , respectively. As of December 31, 2016 and 2015 , there was no unrecognized compensation cost related to options as all option awards were fully vested. As of December 31, 2014 , there was $3 thousand of total unrecognized compensation cost related to options expected to be recognized over 0.7 years . Performance Share Awards The Company grants certain senior-level executives performance stock units that vest based on market and time-based service conditions as part of a long-term incentive plan, which are referred to herein as performance share awards. The number of shares of common stock underlying each award is determined at the end of a three -year performance period. In order to vest, the senior level executive must still be employed by the Company, with certain contractual exclusions, at the end of the performance period. At the end of the performance period, the percentage of the stock units that will vest will be determined by ranking the Company’s total shareholder return compared to the total shareholder return of the peer companies identified in the plan. Based on the level of performance, between 0% and 200% of the award may vest. Within 60 days after vesting, the shares underlying the award will be issued to the participant. In the event of a change in control of the Company or the death or permanent disability of a participant, the payout of any award is limited to a pro-rated portion of such award based upon a performance assessment prior to the change-in-control date or date of death or permanent disability. The market condition requirements are reflected in the grant date fair value of the award, and the compensation expense, net of forfeitures, for the award is recognized assuming that the requisite service is rendered regardless of whether the market conditions are achieved. The grant date fair value of the performance share awards is determined through the use of a Monte Carlo simulation model, which utilizes multiple input variables that determine the probability of satisfying the market condition requirements applicable to each award as follows: Weighted-Average at Grant Date for Twelve Months Ended December 31, 2016 Weighted-Average at Grant Date for Twelve Months Ended December 31, 2015 Expected volatility factor 0.39 0.36 Risk free interest rate 1.12 % 0.91 % Expected term (in years) 2.94 2.55 Expected dividend yield — % — % For grants awarded in 2016, 2015 and 2014, the volatility was based upon a weighted average historical volatility for the Company. The Company chose to use historical volatility to value these awards because historical prices were used to develop the correlation coefficients between the Company and each of the peer companies within the peer group in order to model stock price movements. The volatilities used were calculated as the remaining term of the performance period at the date of grant. The risk-free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues with remaining terms equivalent to the remaining performance period. The Company does not intend to pay dividends on its common stock in the foreseeable future. Accordingly, the Company used a dividend yield of zero in its model. The following table summarizes the Company’s performance share awards for the year ended December 31, 2016 : Number of Awards Weighted-Average Fair Value at Grant Date ($) Outstanding at December 31, 2015 86,778 66.44 Granted 119,508 51.40 Vested (27,579 ) 77.57 Forfeited (44,800 ) 67.01 Outstanding at December 31, 2016 133,907 50.54 As of December 31, 2016 and 2015 , there was $4.3 million and $2.9 million , respectively, of total unrecognized compensation cost related to performance share awards expected to be recognized over 1.90 years and 1.51 years, respectively. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The following table sets forth the computation of basic and diluted earnings per common share: Year Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net income $ 264,879 $ 317,220 $ 225,464 Denominator: Weighted-average shares outstanding, basic 70,344 72,208 72,739 Effect of dilutive stock awards 164 218 555 Adjusted weighted-average shares outstanding, diluted 70,508 72,426 73,294 Net Income per Share: Basic earnings per common share $ 3.77 $ 4.39 $ 3.10 Diluted earnings per common share $ 3.76 $ 4.38 $ 3.08 Anti-dilutive weighted-average shares 66 52 29 |
Debt and Other Obligations
Debt and Other Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Long-term debt As of December 31, 2016 , the Company held non public and public debt instruments. The Company's indebtedness includes the 2014 Framework Agreement, the 2015 Facility Agreements, 2015-1 EETCs and 2016 Facility Agreement described below. 2014 Framework Agreement During 2014, the Company entered into a Framework Agreement, with a bank syndicate, which as of December 31, 2016 , provided $379.0 million of debt financing for seven Airbus A320 aircraft and three Airbus A321 aircraft. Each loan extended under the Framework Agreement was funded on or about the delivery date of each aircraft and is secured by a first-priority security interest in the individual aircraft. Each loan amortizes on a mortgage-style basis, which requires quarterly payments, with senior loans having a 12 -year term and junior loans having a 7 -year term. Loans bear interest payable quarterly on a fixed-rate basis. As of December 31, 2016 , the Company has taken delivery of all Airbus A320 and Airbus A321 aircraft financed through the Framework Agreement. 2015 Facility Agreements During 2015, the Company entered into two Facility Agreements, which as of December 31, 2016 , provided $185.0 million of debt financing for five Airbus A320 aircraft. Each loan extended under the Facility Agreements was funded on or near the delivery date of each aircraft and was secured by a first-priority security interest on the individual aircraft. Each loan amortizes on a mortgage-style basis, which requires quarterly payments, with senior loans having a 12 -year term and junior loans having a 7 -year term. Loans bear interest payable quarterly on a fixed-rate basis. As of December 31, 2016 , the Company has taken delivery of all Airbus A320 aircraft financed through the Facility Agreements. 2015-1 EETCs In August 2015, the Company created two separate pass-through trusts, which issued approximately $576.6 million aggregate face amount of Series 2015-1 Class A and Class B enhanced equipment trust certificates (EETCs) in connection with the financing of 12 new Airbus A321 aircraft and 3 new Airbus A320 aircraft. Each class of certificates represents a fractional undivided interest in the respective pass-through trusts and is not an obligation of the Company. The proceeds from the issuance of these certificates are initially held in escrow by a depositary and, upon satisfaction of certain terms and conditions, are released and used to purchase equipment notes which are issued by the Company and secured by the Company's aircraft. Interest on the issued and outstanding equipment notes are payable semiannually on April 1 and October 1 of each year, which commenced on April 1, 2016, and principal on such equipment notes is scheduled for payment on April 1 and October 1 of certain years, which commenced on October 1, 2016. Issued and outstanding Series A and Series B equipment notes mature in April 2028 and April 2024, respectively, and accrue interest at a rate of 4.100% per annum and 4.450% per annum, respectively. As of December 31, 2016 , $538.1 million of the proceeds from the sale of the 2015-1 EETCs had been used to purchase equipment notes in connection with the financing of 3 Airbus A320 aircraft and 11 Airbus A321 aircraft. The remaining $38.5 million of escrowed proceeds held by the pass-through trusts were used to purchase equipment notes when the remaining new Airbus A321 aircraft was delivered in January 2017. Equipment notes that are issued are reported as debt on the Company's balance sheets. The Company evaluated whether the pass-through trusts formed are variable interest entities (VIEs) required to be consolidated by the Company under applicable accounting guidance. The Company determined that the pass-through trusts are VIEs and that it does not have a variable interest in the pass-through trusts. Based on this analysis, the Company determined that it is not required to consolidate these pass-through trusts. 2016 Facility Agreement In December 2016, the Company entered into a Facility Agreement, which will provide up to $106.0 million of debt financing for two Airbus A320 aircraft and one Airbus A321 aircraft. Each loan extended under the Facility Agreement is funded on or near the delivery date of each aircraft and is secured by a first-priority security interest on the individual aircraft. Each loan amortizes on a mortgage-style basis and has a 10 -year term. Loans bear interest payable quarterly on a fixed-rate basis. The two Airbus A320 aircraft and one Airbus A321 aircraft under the Company's existing Facility Agreement are scheduled for delivery between March 2017 and April 2017. Long-term debt is comprised of the following: As of December 31, Year Ended December 31, 2016 2015 2016 2015 (in millions) (weighted-average interest rates) Fixed-rate senior term loans due through 2027 $ 451.9 $ 484.2 4.10 % 4.10 % Fixed-rate junior term loans due through 2022 47.1 54.3 6.90 % 6.90 % Fixed-rate class A enhanced equipment trust certificates due through 2028 409.8 95.8 4.10 % 4.03 % Fixed-rate class B enhanced equipment trust certificates due through 2024 103.6 25.0 4.45 % 4.37 % Long-term debt $ 1,012.4 $ 659.3 Less current maturities 84.4 49.6 Less unamortized discount, net 30.6 13.0 Total $ 897.4 $ 596.7 During the year ended December 31, 2016 and 2015 , the Company made scheduled principal payments of $64.4 million and $25.4 million on its outstanding debt obligations, respectively. At December 31, 2016 , long-term debt principal payments for the next five years and thereafter are as follows: December 31, 2016 (in millions) 2017 $ 88.9 2018 83.1 2019 81.5 2020 79.7 2021 78.2 2022 and thereafter 601.0 Total debt principal payments $ 1,012.4 Interest Expense Interest expense related to long-term debt consists of the following: Year Ended December 31, 2016 2015 (in thousands) Senior term loans $ 19,759 $ 15,429 Junior term loans 3,568 2,997 Class A enhanced equipment trust certificates 11,509 494 Class B enhanced equipment trust certificates 3,243 140 Commitment fees 127 54 Amortization of deferred financing costs 3,435 1,165 Total $ 41,641 $ 20,279 As of December 31, 2016 and 2015 , the Company had a line of credit for $23.6 million and $18.6 million related to corporate credit cards. Respectively, the Company had drawn $9.9 million and $7.3 million as of December 31, 2016 and 2015 , which is included in accounts payable. As of December 31, 2016 and 2015 , the Company had lines of credit with counterparties for derivatives and physical fuel delivery in the amount of $46.5 million and $38.0 million , respectively. As of December 31, 2016 and 2015 , the Company had drawn $8.0 million and $6.9 million on these lines of credit, which is included in other current liabilities. The Company is required to post collateral for any excess above the lines of credit if the fuel derivatives are in a net liability position and make periodic payments in order to maintain an adequate undrawn portion for physical fuel delivery. As of December 31, 2016 and 2015 , the Company did not have any outstanding fuel derivatives. |
Leases and Prepaid Maintenance
Leases and Prepaid Maintenance Deposits | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases and Prepaid Maintenance Deposits | Leases and Aircraft Maintenance Deposits The Company leases various types of equipment and property, primarily aircraft, spare engines and airport facilities under leases, which expire in various years through 2032 . Lease terms are generally 12 to 18 years for aircraft and up to 30 years for other leased equipment and property. Total rental expense for all leases charged to operations for the years ended 2016 , 2015 and 2014 was $283.9 million , $282.7 million and $254.3 million , respectively. Total rental expense charged to operations for aircraft and engine operating leases for the years ended December 31, 2016 , 2015 and 2014 was $201.7 million , $211.5 million and $195.8 million , respectively. Supplemental rent is made up of maintenance reserves paid or expected to be paid to aircraft lessors in advance of the performance of major maintenance activities that are not probable of being reimbursed and probable return condition obligations. The Company expensed $9.0 million , $7.7 million and $7.5 million of supplemental rent recorded within aircraft rent during 2016 , 2015 and 2014 , respectively. Some of the Company’s master lease agreements provide that the Company pays maintenance reserves to aircraft lessors to be held as collateral in advance of the Company’s required performance of major maintenance activities. Substantially all of these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles, while some maintenance reserve payments are fixed contractual amounts. Fixed maintenance reserve payments for these aircraft and related flight equipment, including estimated amounts for contractual price escalations, are expected to be $7.7 million in 2017 , $7.0 million in 2018 , $5.7 million in 2019 , $5.4 million in 2020 , $5.5 million in 2021 , and $17.7 million in 2022 and beyond . These lease agreements provide that maintenance reserves are reimbursable to the Company upon completion of the maintenance event in an amount equal to either (1) the amount of the maintenance reserve held by the lessor associated with the specific maintenance event or (2) the qualifying costs related to the specific maintenance event. Some of the master lease agreements do not require that the Company pay maintenance reserves so long as the Company's cash balance does not fall below a certain level. As of December 31, 2016 , the Company is in full compliance with those requirements and does not anticipate having to pay reserves related to these master leases in the future. At lease inception and at each balance sheet date, the Company assesses whether the maintenance reserve payments required by the master lease agreements are substantively and contractually related to the maintenance of the leased asset. Maintenance reserve payments that are substantively and contractually related to the maintenance of the leased asset are accounted for as maintenance deposits to the extent they are expected to be recoverable and are reflected as aircraft maintenance deposits in the accompanying balance sheets. The Company makes certain assumptions to determine the recoverability of maintenance deposits. These assumptions are based on various factors such as the estimated time between the maintenance events, the date the aircraft is due to be returned to the lessor, the cost of future maintenance events and the number of flight hours the aircraft is estimated to be utilized before it is returned to the lessor. When it is not probable the Company will recover amounts currently on deposit with a lessor, such amounts are expensed as supplemental rent. The Company expensed $2.2 million , $2.3 million and $1.6 million of paid maintenance reserves as supplemental rent during 2016 , 2015 and 2014 , respectively. As of December 31, 2016 and 2015 , the Company had short-term and long-term aircraft maintenance deposits of $286.4 million and $279.9 million , respectively, on its balance sheets. The Company has concluded that these aircraft maintenance deposits are probable of recovery primarily due to the rate differential between the maintenance reserve payments and the expected cost for the related next maintenance event that the reserves serve to collateralize. The Company’s master lease agreements also provide that some maintenance reserves held by the lessor at the expiration of the lease are nonrefundable to the Company and will be retained by the lessor. Consequently, any usage-based maintenance reserve payments after the last major maintenance event are not substantively related to the maintenance of the leased asset and therefore are accounted for as contingent rent. Supplemental rent is recorded at the time a non-refundable maintenance reserve payment is made that has been substantively determined to be contingent rent. As of December 31, 2016 , the Company had a fleet consisting of 95 A320 family aircraft. As of December 31, 2016 , the Company owned 36 of these aircraft and financed 59 aircraft under operating leases with expirations between 2017 and 2029 . In addition, as of December 31, 2016 , the Company had 11 spare engines financed under operating leases with lease term expiration dates ranging from 2018 to 2027 and owned 1 spare engine. Two of the Company's leased aircraft have variable rent payments, which fluctuate based on changes in LIBOR (London Interbank Offered Rate). The Company entered into sale leaseback transactions with third-party aircraft lessors for the majority of these aircraft and engine leases. Deferred losses resulting from these sale leaseback transactions are included in other long-term assets on the accompanying balance sheet. Deferred losses are recognized as an increase to rent expense on a straight-line basis over the term of the respective operating leases. Deferred gains are included in deferred gains and other long-term liabilities on the accompanying balance sheet. Deferred gains are recognized as a decrease to rent expense on a straight-line basis over the term of the respective operating leases. During the twelve months ended December 31, 2016 , the Company took delivery of 11 aircraft under secured debt arrangements, purchased 7 previously leased aircraft and entered into a direct lease agreement with a third-party lessor for 5 A320neos. In addition, the Company purchased one spare engine. All of the Company's aircraft and engine leases are accounted for as operating leases. Under the terms of the lease agreements, the Company will continue to operate and maintain the aircraft. Payments under the lease agreements are fixed for the term of the lease. The lease agreements contain standard termination events, including termination upon a breach of the Company's obligations to make rental payments and upon any other material breach of the Company's obligations under the leases, and standard maintenance and return condition provisions. Upon a termination of the lease due to a breach by the Company, the Company would be liable for standard contractual damages, possibly including damages suffered by the lessor in connection with remarketing the aircraft or while the aircraft is not leased to another party. Future minimum lease payments under noncancellable operating leases with initial or remaining terms in excess of one year at December 31, 2016 were as follows: Operating Leases Aircraft and Spare Engine Leases Property Facility Leases Total Operating Leases (in thousands) 2017 $ 218,484 $ 39,189 $ 257,673 2018 203,465 38,048 241,513 2019 184,566 30,451 215,017 2020 176,590 18,928 195,518 2021 166,967 8,969 175,936 2022 and thereafter 558,038 53,734 611,772 Total minimum lease payments $ 1,508,110 $ 189,319 $ 1,697,429 |
Financial Instruments and Risk
Financial Instruments and Risk Management | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Risk Management | Financial Instruments and Risk Management As part of the Company’s risk management program, the Company from time to time uses a variety of financial instruments to reduce its exposure to fluctuations in the price of jet fuel and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes. The Company is exposed to credit losses in the event of nonperformance by counterparties to these financial instruments. The Company periodically reviews and seeks to mitigate exposure to the financial deterioration and nonperformance of any counterparty by monitoring the absolute exposure levels, each counterparty's credit ratings and the historical performance of the counterparties relating to hedge transactions. The credit exposure related to these financial instruments is limited to the fair value of contracts in a net receivable position at the reporting date. The Company also maintains security agreements that require the Company to post collateral if the value of selected instruments falls below specified mark-to-market thresholds. The Company records financial derivative instruments at fair value, which includes an evaluation of each counterparty's credit risk. As of December 31, 2016 and 2015 , the Company did not hold any derivatives. Fuel Derivative Instruments From time to time, the Company may enter into fuel derivative contracts in order to mitigate the risk of future volatility in fuel prices. The Company's fuel derivative contracts generally consist of United States Gulf Coast jet fuel swaps (jet fuel swaps) and United States Gulf Coast jet fuel options (jet fuel options). Both jet fuel swaps and jet fuel options are used at times to protect the refining price risk between the price of crude oil and the price of refined jet fuel, and to manage the risk of increasing fuel prices. Fair value of the instruments is determined using standard option valuation models. The Company accounts for its fuel derivative contracts at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current liabilities. The Company did not enter into any fuel derivative instruments during 2016. The Company did not elect hedge accounting on any fuel derivative instruments entered into during 2015 and 2014 and, as a result, changes in the fair value of these fuel derivative contracts are recorded in aircraft fuel expense. In 2016 , the Company did not pay any premiums to acquire jet fuel options. The Company paid $2.5 million and $9.7 million in premiums to acquire jet fuel options during 2015 and 2014 , respectively. The following table summarizes the components of aircraft fuel expense for the years ended December 31, 2016 , 2015 and 2014 : Year Ended December 31, 2016 2015 2014 (in thousands) Into-plane fuel cost $ 447,553 $ 454,747 $ 608,033 Realized losses (gains) related to fuel derivative contracts, net — 10,580 995 Unrealized losses (gains) related to fuel derivative contracts, net — (3,880 ) 3,881 Aircraft fuel $ 447,553 $ 461,447 $ 612,909 Premiums and settlements received or paid on fuel derivative contracts are reflected in the accompanying statements of cash flows in net cash provided by operating activities. During the third quarter of 2014, the Company became aware of an underpayment of Federal Excise Tax (FET) for fuel purchases during the period between July 1, 2009 and August 31, 2014. The commencement of the period in which the Company underpaid FET coincided with a change in its fuel service provider that took place in July 2009. The out of period jet fuel FET amount of $9.3 million is recorded within aircraft fuel in the statement of operations for the year ended December 31, 2014. As of December 31, 2016 and 2015, the Company did not have any outstanding fuel derivatives and had no fuel hedging activity for the twelve months ended December 31, 2016 . Interest Rate Swaps During 2015, the Company settled six forward interest rate swaps that were designed to fix the benchmark interest rate component of the interest payments on the debt related to three Airbus A321 aircraft, which the company took delivery of during the third quarter of 2015. These instruments limited the Company's exposure to changes in the benchmark interest rate in the period from the trade date through the date of maturity. The interest rate swaps were designated as cash flow hedges. The Company accounts for these interest rate swaps at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current assets or other current liabilities with changes in fair value recorded within accumulated other comprehensive income (AOCI). As of December 31, 2016 and 2015 , the Company did not have any outstanding interest rate swaps. Realized gains and losses from cash flow hedges are recorded in the statement of cash flows as a component of cash flows from operating activities. Subsequent to the issuance of each debt instrument, amounts remaining in AOCI are amortized over the life of the fixed-rate debt instrument. During the twelve months ended December 31, 2016 , there were no unrealized gains or losses recorded within AOCI related to these instruments as they settled in 2015. During the twelve months ended December 31, 2015 , an unrealized loss of $0.9 million , net of deferred taxes of $0.6 million , was recorded within AOCI related to these instruments. During the twelve months ended December 31, 2016 , the Company reclassified interest rate swap losses of $224 thousand , net of tax of $130 thousand , into earnings. During the twelve months ended December 31, 2015 , the Company reclassified interest rate swap losses of $82 thousand , net of tax of $50 thousand , into earnings. As of December 31, 2016 and December 31, 2015 , $1.3 million and $1.5 million , net of tax, remained in AOCI related to these instruments. |
Defined Contribution 401(k) Pla
Defined Contribution 401(k) Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution 401(k) Plan | Defined Contribution 401(k) Plan The Company sponsors three defined contribution 401(k) plans, Spirit Airlines, Inc. Employee Retirement Savings Plan (first plan), Spirit Airlines, Inc. Pilots’ Retirement Savings Plan (second plan) and Spirit Airlines, Inc. Puerto Rico Retirement Savings Plan (third plan). The first plan is for all employees that are not covered by the pilots’ collective bargaining agreement, who have at least 60 days of service and have attained the age of 21 . The Company may make a Qualified Discretionary Contribution, as defined in the plan, or provide matching contributions to this plan. For flight attendants and dispatchers participating in the first plan, the Company currently matches 100% of the employee's contribution, up to a maximum of 6% of the employee's annual compensation. Prior to May 1, 2016, the Company matched 50% of the flight attendant and dispatcher's contribution, up to a maximum of 6% of the employee's annual compensation. For all other employees participating in the first plan, the Company matches 50% of the employee’s contribution, up to a maximum of 6% of the employee’s annual compensation. The second plan is for the Company’s pilots, and contains the same service requirements as the first plan. Throughout 2016 , the Company matched 100% of the pilot's contribution, up to 9% of the individual pilot's annual compensation. Both the first and the second plans are subject to the annual IRS elective deferral limit, which was $18,000 for 2016 . The third plan is for all Company employees residing in Puerto Rico and was adopted on April 16, 2012. It contains the same service requirements as the first and second plans. For pilots participating in the Puerto Rico plan, the Company matched 100% of their contribution, up to 9% of the individual pilot's annual compensation, but subject to the annual Puerto Rico pre-tax elective deferral limit, which was $18,000 for 2016 . For all other employees participating in the Puerto Rico plan, the Company matches 50% of the employee's contribution, up to 6% of the employee's annual compensation. Matching contributions made to all plans were $16.2 million , $12.5 million and $9.7 million in 2016 , 2015 and 2014 , respectively, and were included within salaries, wages and benefits in the accompanying statements of operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Significant components of the provision for income taxes from continuing operations are as follows: Year Ended December 31, 2016 2015 2014 (in thousands) Current: Federal $ 60,079 $ 21,632 $ 85,966 State and local 6,322 6,702 5,389 Foreign 2,034 1,235 2,057 Total current expense 68,435 29,569 93,412 Deferred: Federal 82,455 149,583 34,240 State and local 3,691 6,031 (122 ) Total deferred expense (benefit) 86,146 155,614 34,118 Total income tax expense (benefit) $ 154,581 $ 185,183 $ 127,530 The income tax provision differs from that computed at the federal statutory corporate tax rate as follows: Year Ended December 31, 2016 2015 2014 Expected provision at federal statutory tax rate 35.0 % 35.0 % 35.0 % State tax expense, net of federal benefit 1.6 % 1.7 % 1.0 % Income tax credits — % — % (0.4 )% Other 0.3 % 0.2 % 0.5 % Total income tax expense (benefit) 36.9 % 36.9 % 36.1 % The Company accounts for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. At December 31, 2016 and 2015 , the significant components of the Company's deferred taxes consisted of the following: December 31, 2016 2015 (in thousands) Deferred tax assets: Deferred revenue 3,057 3,381 Nondeductible accruals 20,547 11,056 Deferred manufacturing credits 910 822 Accrued maintenance 1,854 830 Equity compensation 3,882 4,485 Other 4,026 2,751 Deferred tax assets 34,276 23,325 Deferred tax liabilities: Capitalized interest — 286 Deferred gain (loss) on leases, net 2,435 2,393 Accrued rent 14,025 6,724 Prepaid expenses 1,217 2,151 Property, plant and equipment 278,872 168,813 Deferred financing costs 5,358 — Accrued aircraft and engine maintenance 40,512 64,439 Deferred tax liabilities 342,419 244,806 Net deferred tax assets (liabilities) $ (308,143 ) $ (221,481 ) In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. In evaluating the Company’s ability to utilize its deferred tax assets, it considered all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. Management does not believe that the realization of deferred tax assets is in jeopardy and thus a valuation allowance for 2016 has not been recorded. Management will continue to monitor the status of Spirit’s operations and reassess the need for a valuation allowance on a quarterly basis. In accordance with ASC 718, excess tax benefits are only recognized in the financial statements upon actual realization of the related tax benefit. The Company recognized a tax deficiency of $0.5 million and an excess tax benefit of $8.9 million for tax years ended December 31, 2016 and 2015 , respectively. The excess tax benefit/(deficiency) was recorded as a reduction/(increase) to income tax payable and a corresponding entry to additional paid in capital. In December 2015, bonus depreciation was extended with the passage of the Protecting Americans from Tax Hikes Act (the Act). The Company made estimated payments during 2015 excluding the impact of a potential extension of bonus depreciation. The passage of the Act allowed the Company to claim bonus depreciation deductions in 2015 on all bonus eligible acquisitions, including purchased aircraft. These deductions resulted in an overpayment of current year federal income taxes of $72.3 million as of December 31, 2015 which is recorded as a component of current assets on the balance sheet. The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of selling, general and administrative expenses. For tax years ended December 31, 2016 , 2015 and 2014 , the Company did not recognize any liabilities for uncertain tax positions nor any interest and penalties on unrecognized tax benefits. For tax years 2016 , 2015 and 2014 , the entire income before income taxes for the Company is subject to domestic income taxes. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company's federal income tax returns for 2013 through 2015 tax years are still subject to examination in the U.S. Various state and foreign jurisdiction tax years remain open to examination. The Company believes that any potential assessment would be immaterial to its financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Aircraft-Related Commitments and Financing Arrangements The Company’s contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies. As of December 31, 2016 , the Company's firm aircraft orders consisted of the following: Airbus A320ceo A320neo A321ceo Total 2017 4 11 15 2018 5 4 5 14 2019 1 12 13 2020 16 16 2021 18 18 10 50 16 76 On April 27, 2016 , the Company entered into an amendment to the Airbus A320 Family Purchase Agreement, by and between the Company and Airbus S.A.S., dated May 5, 2004 (Airbus Amendment), which included the conversion of ten Airbus A321neo orders to Airbus A320neo orders. The Company has three spare engine orders for V2500 SelectOne engines with IAE and nine spare engine orders for PurePower PW 1100G-JM engines with Pratt & Whitney. Spare engines are scheduled for delivery from 2017 through 2023 . Purchase commitments for these aircraft and engines, including estimated amounts for contractual price escalations and pre-delivery payments, are expected to be $660.3 million in 2017 , $649.8 million in 2018 , $678.3 million in 2019 , $824.4 million in 2020 , $777.9 million in 2021 , and $24.6 million in 2022 and beyond . As of December 31, 2016 , the Company had secured financing commitments of $144.5 million for four aircraft, scheduled for delivery in 2017, and did not have financing commitments in place for the remaining 72 Airbus aircraft currently on firm order, which are scheduled for delivery in 2017 through 2021 . In January 2017, the Company secured financing of $39.0 million for one additional aircraft, scheduled for delivery in 2017 . Interest commitments related to the secured debt financing of 29 delivered aircraft as of December 31, 2016 are $42.2 million in 2017 , in $38.2 million 2018 , $34.6 million in 2019 , $30.9 million in 2020 , $27.4 million in 2021 , and $96.8 million in 2022 and beyond . For principal commitments related to these financed aircraft, refer to Note 11, Debt and Other Obligations. As of December 31, 2016 , principal and interest commitments related to the Company's future secured debt financing of one undelivered aircraft under an EETC and three undelivered aircraft under bank debt are approximately $10.9 million in 2017 , $13.0 million in 2018 , $13.7 million in 2019 , $13.2 million in 2020 , $13.3 million in 2021 , and $119.1 million in 2022 and beyond . In July 2015, the Company executed an upgrade service agreement with Airbus Americas Customer Services Inc. (Airbus) to reconfigure the seating and increase capacity in 40 of the Company’s A320ceos from 178 to 182 seats (reconfiguration). The reconfiguration of the aircraft commenced in the first quarter of 2016 and is expected to be completed in the fourth quarter of 2017 for a remaining committed cost of $2.6 million , as of December 31, 2016 . These amounts will be capitalized within flight equipment on the balance sheet. In September 2015 , the Company executed a lease agreement with Wayne County Airport Authority (the Authority), which owns and operates Detroit Metropolitan Wayne County Airport (DTW). Under the lease agreement, the Company leases a 10 -acre site, adjacent to the airfield at DTW, in order to construct, operate and maintain an approximately 126,000 -square-foot hangar facility (the project). The project allows for the development of a maintenance hangar in order to fulfill the requirements of the Company's growing fleet and will reduce dependence on third-party facilities and contract line maintenance. The lease agreement has a 30 -year term with two 10 -year extension options. Upon termination of the lease, title of the project, which will be fully depreciated, will automatically pass to the Authority. The Company estimates it will complete the project during the first quarter of 2017 for a remaining committed cost of $7.3 million , as of December 31, 2016 . The Company is contractually obligated to pay the following minimum guaranteed payments for its reservation system, advertising media, data center, weather system and call center as of December 31, 2016 : $5.7 million in 2017 , $3.9 million in 2018 , $0.3 million in 2019 , $0.3 million in 2020 , $0.1 million in 2021 , and $0.0 million in 2022 and beyond . The Company's current agreement with its reservation system provider expires in 2018. Litigation The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. The Company believes the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on its financial position, liquidity or results of operations. Employees The Company has four union-represented employee groups that together represent approximately 73% of all employees at December 31, 2016 . The Company had four union-represented employee groups that together represented approximately 73% of all employees at December 31, 2015 . The table below sets forth the Company's employee groups and status of the collective bargaining agreements as of December 31, 2016 . Employee Groups Representative Amendable Date Percentage of Workforce Pilots Air Line Pilots Association, International (ALPA) August 2015 26% Flight Attendants Association of Flight Attendants (AFA-CWA) May 2021 42% Dispatchers Transport Workers Union (TWU) August 2018 1% Ramp Service Agents International Association of Machinists and Aerospace Workers (IAMAW) June 2020 4% In August 2015 , the Company's collective bargaining agreement with its pilots, represented by ALPA, became amendable. In June 2016 , ALPA requested the services of the National Mediation Board (NMB) to facilitate negotiations for an amended agreement and the Company joined ALPA in the request. The NMB has assigned a mediator and the parties continue to meet and work toward an amended agreement with the guidance of the mediator. Under the RLA, the parties' current agreement remains in effect until an amended agreement is reached. In March 2016 , under the supervision of the National Mediation Board (NMB), the Company and AFA-CWA reached a tentative agreement for a five -year contract with the Company's flight attendants. In May 2016 , the flight attendants voted to approve the new five -year contract with the Company. In connection with this agreement, the Company paid a $9.6 million ratification incentive payment to the flight attendants recorded within salaries, wages and benefits in the statement of operations. In July 2014 , certain ramp service agents directly employed by the Company voted to be represented by the IAMAW. In May 2015 , the Company entered into a five -year interim collective bargaining agreement with the IAMAW, covering material economic terms. In June 2016 , the Company and the IAMAW reached an agreement on the remaining terms of the collective bargaining agreement, which is amendable in June 2020 . As of December 31, 2016 , these ramp service agents served 1 of the 59 airports where the Company operates. The Company is self-insured for health care claims, subject to a stop-loss policy, for eligible participating employees and qualified dependent medical claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company has accrued $5.7 million and $3.7 million , for health care claims as of December 31, 2016 , and 2015 , respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Under ASC 820, Fair Value Measurements and Disclosures , disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows: Level 1 —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 of the assets or liabilities. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of the Company’s financial assets and liabilities. Fuel Derivative Instruments From time to time, the Company may enter into fuel derivative contracts in order to mitigate the risk of future volatility in fuel prices. The Company’s fuel derivative contracts generally consist of jet fuel swaps and jet fuel options. These instruments are valued using energy and commodity market data, which is derived by combining raw inputs with quantitative models and processes to generate forward curves and volatilities. The Company utilizes the market approach to measure fair value for its fuel derivative instruments, if any. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company does not elect hedge accounting on its fuel derivative instruments. As a result, the Company records the fair value adjustment of its fuel derivatives in the accompanying statement of operations within aircraft fuel and on the balance sheet within prepaid expenses and other current assets or other current liabilities, depending on whether the net fair value of the derivatives is in an asset or liability position as of the respective date. Fair values of the fuel derivative instruments are determined using standard option valuation models. The Company also considers counterparty risk and its own credit risk in its determination of all estimated fair values. The Company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement. The Company determines fair value of jet fuel options utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. The fair value of the Company's jet fuel swaps are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company categorizes these instruments as Level 2. Due to the fact that certain inputs utilized to determine the fair value of jet fuel options are unobservable (principally implied volatility), the Company categorizes these derivatives as Level 3. Implied volatility of a jet fuel option is the volatility of the price of the underlying commodity that is implied by the market price of the option based on an option pricing model. Thus, it is the volatility that when used in a particular pricing model, yields a theoretical value for the option equal to the current market price of that option. Implied volatility, a forward-looking measure, differs from historical volatility because the latter is calculated from known past returns. At each balance sheet date, the Company substantiates and adjusts unobservable inputs. The Company routinely assesses the valuation model's sensitivity to changes in implied volatility. Based on the Company's assessment of the valuation model's sensitivity to changes in implied volatility, it concluded that holding other inputs constant, a significant increase (decrease) in implied volatility would result in significantly higher (lower) determination of fair value measurement for the Company's aircraft fuel derivatives. As of December 31, 2016 and 2015 , the Company had no outstanding jet fuel derivatives. Long-Term Debt The estimated fair value of the Company's non publicly held debt agreements has been determined to be Level 3 as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 long-term debt. The estimated fair value of the Company's publicly held debt agreements has been determined to be Level 2 as the Company utilizes quoted market prices to estimate the fair value of it's public long-term debt. The carrying amounts and estimated fair values of the Company's long-term debt, including current maturities, at December 31, 2016 and December 31, 2015 , were as follows: As of December 31, 2016 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Fair value level hierarchy (in millions) Senior long-term debt $ 451.9 $ 463.9 $ 484.2 $ 477.8 Level 3 Junior long-term debt 47.1 48.1 54.3 54.6 Level 3 Class A enhanced equipment trust certificates 409.8 416.0 95.8 94.8 Level 2 Class B enhanced equipment trust certificates 103.6 105.7 25.0 25.2 Level 2 Total long-term debt $ 1,012.4 $ 1,033.7 $ 659.3 $ 652.4 Cash and Cash Equivalents Cash and cash equivalents at December 31, 2016 and December 31, 2015 are comprised of liquid money market funds and cash and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions. Short-term Investment Securities Investment securities at December 31, 2016 are comprised of short-term available-for-sale securities and are categorized as Level 1 instruments, as the Company uses quoted market prices in active markets when determining the fair value of these securities. As of December 31, 2015 , the Company had no outstanding investment securities. Assets and liabilities measured at gross fair value on a recurring basis are summarized below: Fair Value Measurements as of December 31, 2016 Total Level Level Level (in millions) Cash and cash equivalents $ 700.9 $ 700.9 $ — $ — Short-term investment securities 100.2 100.2 — — Total assets $ 801.1 $ 801.1 $ — $ — Total liabilities $ — $ — $ — $ — Fair Value Measurements as of December 31, 2015 Total Level Level Level (in millions) Cash and cash equivalents $ 803.6 $ 803.6 $ — $ — Total assets $ 803.6 $ 803.6 $ — $ — Total liabilities $ — $ — $ — $ — The Company had no transfers of assets or liabilities between any of the above levels during the years ended December 31, 2016 or 2015 . The Company's Valuation Group, which reports to the Chief Financial Officer, is made up of individuals from the Company's Treasury and Corporate Accounting departments. The Valuation Group is responsible for the execution of the Company's valuation policies and procedures. The Valuation Group compares the results of the Company's internally developed valuation methods with counterparty reports at each balance sheet date, assesses the Company's valuation methods for accurateness and identifies any needs for modification. For additional information, refer to Note 6, Short-term Investment Securities. |
Operating Segments and Related
Operating Segments and Related Disclosures | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segments and Related Disclosures | Operating Segments and Related Disclosures The Company is managed as a single business unit that provides air transportation for passengers. Operating revenues by geographic region as defined by the Department of Transportation (DOT) area are summarized below: 2016 2015 2014 (in millions) DOT—Domestic $ 2,136.2 $ 1,940.2 $ 1,728.8 DOT—Latin America 185.8 201.3 202.8 Total $ 2,322.0 $ 2,141.5 $ 1,931.6 During 2016 , 2015 and 2014 , no revenue from any one foreign country represented greater than 4% of the Company’s total passenger revenue. The Company attributes operating revenues by geographic region based upon the origin and destination of each passenger flight segment. The Company’s tangible assets consist primarily of flight equipment, which are mobile across geographic markets and, therefore, have not been allocated. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Quarterly results of operations for the years ended December 31, 2016 and 2015 are summarized below: Three Months Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) 2016 Operating revenue $ 538,143 $ 584,133 $ 621,329 $ 578,351 Operating income 101,299 121,835 135,216 85,311 Net income 61,920 73,084 81,382 48,493 Basic earnings per share 0.87 1.03 1.17 0.70 Diluted earnings per share 0.86 1.03 1.17 0.70 2015 Operating revenue $ 493,355 $ 553,421 $ 574,841 $ 519,846 Operating income 109,251 122,315 157,219 120,337 Net income 69,002 76,704 97,114 74,400 Basic earnings per share 0.94 1.06 1.35 1.04 Diluted earnings per share 0.94 1.05 1.35 1.04 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Spirit Airlines, Inc. (Spirit or the Company) headquartered in Miramar, Florida, is an ultra low-cost, low-fare airline that provides affordable travel opportunities principally throughout the domestic United States, the Caribbean and Latin America. The Company manages operations on a system-wide basis due to the interdependence of its route structure in the various markets served. As only one service is offered (i.e., air transportation), management has concluded there is only one reportable segment |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's estimates and assumptions are based on historical experience and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially. Critical accounting policies and estimates are defined as those that both (i) are most important to the portrayal of the Company's financial condition and results and (ii) require management's most subjective judgments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of less than three months at the date of acquisition to be cash equivalents. Investments included in this category primarily consist of money market funds. Cash and cash equivalents are stated at cost, which approximates fair value. |
Short-term Investment Securities | Short-term Investment Securities The Company's short-term investment securities consist of available-for-sale asset-backed securities with contractual maturities of twelve months or less. These securities are stated at fair value within current assets on the Company's balance sheet. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as proceeds from the maturity of short-term investment securities for the security relinquished, and purchase of short-term investment securities for the security purchased, in the Company's statement of cash flows. Realized gains and losses on sales of investments, if any, are reflected in non-operating income (expense) in the statements of operations. Unrealized gains and losses on investment securities are reflected as a component of accumulated other comprehensive income. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily consist of amounts due from credit card processors associated with the sales of tickets and amounts due from the Internal Revenue Service related to federal excise fuel tax. The Company records an allowance for doubtful accounts for amounts not expected to be collected. The Company estimates the allowance based on historical write-offs as well as aging trends. |
Property and Equipment | The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor cost for employees who are directly associated with, and devote time, to internal-use software projects. Amortization of capitalized software costs is charged to depreciation on a straight-line method basis. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation of operating property and equipment is computed using the straight-line method applied to each unit of property. Residual values for aircraft, major spare rotable parts, avionics and assemblies are generally estimated to be 10% . Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed using the Company's incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in depreciation and amortization expense. The depreciable lives used for the principal depreciable asset classifications are: Estimated Useful Life Aircraft 25 years Spare rotables and flight assemblies 7 to 15 years Other equipment and vehicles 5 to 7 years Internal use software 3 to 10 years Capital lease Lease term Leasehold improvements Lesser of lease term or estimated useful life of the improvement As of December 31, 2016 , the Company had 36 aircraft and 1 spare engine capitalized within flight equipment with depreciable lives of 25 years. As of December 31, 2016 , the Company had 59 aircraft financed through operating leases with lease terms from 12 to 18 years and 11 spare engines financed through operating leases with lease terms from 10 to 13 years . |
Measurement of Asset Impairments | Measurement of Asset Impairments The Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired, the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, and the net book value of the assets exceeds their estimated fair value. In making these determinations, the Company uses certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, and estimated salvage values. |
Passenger Revenue Recognition | Passenger Revenue Recognition Tickets sold are initially deferred as “air traffic liability.” Passenger revenue is recognized at time of departure when transportation is provided. All tickets sold by the Company are nonrefundable. An unused ticket expires at the date of scheduled travel and is recognized as revenue at the date of scheduled travel. Customers may elect to change their itinerary prior to the date of departure. A service charge is assessed and recognized on the date the change is initiated and is deducted from the face value of the original purchase price of the ticket, and the original ticket becomes invalid. The amount remaining after deducting the service charge is called a credit shell which expires 60 days from the date the credit shell is created and can be used towards the purchase of a new ticket and the Company’s other service offerings. The amount of credits expected to expire is recognized as revenue upon issuance of the credit and is estimated based on historical experience. Estimating the amount of credits that will go unused involves some level of subjectivity and judgment. However, given the relatively short period of time to expiration, this does not have a significant impact on the Company's financial statements. The Company is also required to collect certain taxes and fees from customers on behalf of government agencies and airports and remit to the applicable governmental entity or airport on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, airport passenger facility charges and international arrival and departure taxes. These items are collected from customers at the time they purchase their tickets, but are not included in passenger revenue. The Company records a liability upon collection from the customer and relieves the liability when payments are remitted to the applicable governmental agency or airport. |
Frequent Flier Program | Frequent Flier Program Flown Miles. The Company records unrecognized revenue for mileage credits earned by passengers under its FREE SPIRIT program, including mileage credits for members with an insufficient number of mileage credits to earn an award, based on the estimated incremental cost of providing free travel for credits that are expected to be redeemed. Incremental costs include fuel, insurance, security, ticketing and facility charges reduced by an estimate of fees required to be paid by the passenger when redeeming the award. Affinity Card Program. During 2015, the Company extended its agreement with the administrator of the FREE SPIRIT affinity credit card program, which was scheduled to expire in April 2016. The renegotiated program was extended through 2022. As part of the new agreement, the Company received a $10.7 million signing bonus that is being deferred over the contract term and has been reflected in the table below as consideration received from credit card mileage programs in 2015. This extension is considered a material change and thus at the inception of this new arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting using the criteria as set forth in ASU No. 2009-13. Under the Company's affinity card program, funds received for the marketing of a co-branded Spirit credit card and delivery of award miles are accounted for as a multiple-deliverable arrangement. At the inception of the arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting. The Company determined the arrangement had three separate units of accounting: (i) travel miles to be awarded, (ii) licensing of brand and access to member lists and (iii) advertising and marketing efforts. Arrangement consideration was allocated based on relative selling price. At inception of the arrangement, the Company established the estimated selling price for all deliverables that qualified for separation. The manner in which the selling price was established was based on a hierarchy of evidence the Company considered. Total arrangement consideration was then allocated to each deliverable on the basis of the deliverable’s relative selling price. In considering the hierarchy of evidence, the Company first determined whether vendor specific objective evidence of selling price or third-party evidence of selling price existed. It was determined by the Company that neither vendor specific objective evidence of selling price nor third-party evidence existed due to the uniqueness of the Company’s program. As such, the Company developed its best estimate of the selling price for all deliverables. For the award miles, the Company considered a number of entity-specific factors when developing the best estimate of the selling price, including the number of miles needed to redeem an award, average fare of comparable segments, breakage, restrictions and other charges. For licensing of brand and access to member lists, the Company considered both market-specific factors and entity-specific factors, including general profit margins realized in the marketplace/industry, brand power, market royalty rates and size of customer base. For the advertising element, the Company considered market-specific factors and entity-specific factors, including the Company’s internal costs (and fluctuations of costs) of providing services, volume of marketing efforts and overall advertising plan. Consideration allocated based on the relative selling price to both brand licensing and advertising elements is recognized as revenue when earned and recorded in non-ticket revenue. Consideration allocated to award miles is deferred and recognized ratably as passenger revenue over the estimated period the transportation is expected to be provided which is estimated at 17 months . The Company used entity-specific assumptions coupled with the various judgments necessary to determine the selling price of a deliverable in accordance with the required selling price hierarchy. Changes in these assumptions could result in changes in the estimated selling prices. Determining the frequency to reassess selling price for individual deliverables requires significant judgment. As of December 31, 2016 , there have been no changes in either the selling price or the method or assumptions used to determine selling price for any of the identified units of accounting that would have a significant effect on the allocation of consideration. |
Affinity Card Program, Multiple-deliverable arrangement | Affinity Card Program. During 2015, the Company extended its agreement with the administrator of the FREE SPIRIT affinity credit card program, which was scheduled to expire in April 2016. The renegotiated program was extended through 2022. As part of the new agreement, the Company received a $10.7 million signing bonus that is being deferred over the contract term and has been reflected in the table below as consideration received from credit card mileage programs in 2015. This extension is considered a material change and thus at the inception of this new arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting using the criteria as set forth in ASU No. 2009-13. Under the Company's affinity card program, funds received for the marketing of a co-branded Spirit credit card and delivery of award miles are accounted for as a multiple-deliverable arrangement. At the inception of the arrangement, the Company evaluated all deliverables in the arrangement to determine whether they represent separate units of accounting. The Company determined the arrangement had three separate units of accounting: (i) travel miles to be awarded, (ii) licensing of brand and access to member lists and (iii) advertising and marketing efforts. Arrangement consideration was allocated based on relative selling price. At inception of the arrangement, the Company established the estimated selling price for all deliverables that qualified for separation. The manner in which the selling price was established was based on a hierarchy of evidence the Company considered. Total arrangement consideration was then allocated to each deliverable on the basis of the deliverable’s relative selling price. In considering the hierarchy of evidence, the Company first determined whether vendor specific objective evidence of selling price or third-party evidence of selling price existed. It was determined by the Company that neither vendor specific objective evidence of selling price nor third-party evidence existed due to the uniqueness of the Company’s program. As such, the Company developed its best estimate of the selling price for all deliverables. For the award miles, the Company considered a number of entity-specific factors when developing the best estimate of the selling price, including the number of miles needed to redeem an award, average fare of comparable segments, breakage, restrictions and other charges. For licensing of brand and access to member lists, the Company considered both market-specific factors and entity-specific factors, including general profit margins realized in the marketplace/industry, brand power, market royalty rates and size of customer base. For the advertising element, the Company considered market-specific factors and entity-specific factors, including the Company’s internal costs (and fluctuations of costs) of providing services, volume of marketing efforts and overall advertising plan. Consideration allocated based on the relative selling price to both brand licensing and advertising elements is recognized as revenue when earned and recorded in non-ticket revenue. Consideration allocated to award miles is deferred and recognized ratably as passenger revenue over the estimated period the transportation is expected to be provided which is estimated at 17 months . The Company used entity-specific assumptions coupled with the various judgments necessary to determine the selling price of a deliverable in accordance with the required selling price hierarchy. Changes in these assumptions could result in changes in the estimated selling prices. Determining the frequency to reassess selling price for individual deliverables requires significant judgment. As of December 31, 2016 , there have been no changes in either the selling price or the method or assumptions used to determine selling price for any of the identified units of accounting that would have a significant effect on the allocation of consideration. |
Non-ticket Revenue Recognition | Non-ticket Revenue Recognition Non-ticket revenues are generated from air travel-related services for baggage, bookings through the Company’s call center or third-party vendors, advance seat selection, itinerary changes and loyalty programs. Non-ticket revenues also consist of services not directly related to providing transportation such as the FREE SPIRIT affinity credit card program, $9 Fare Club and the sale of advertising to third parties on Spirit’s website and on board aircraft. Charges for services recognized at time of departure are initially recorded as a liability, within air traffic liability, until time of departure. The passenger usage fee is charged for tickets sold through the Company’s primary sales distribution channels. The primary sales distribution channels for which passenger usage fees are charged include sales through the Company’s website, sales through the third-party provided call center and sales through travel agents; the Company does not charge a passenger usage fee for sales made at its airport ticket counters. Other non-ticket revenues include revenues from other air related charges as well as non-air related charges. Other air related charges include optional services and products provided to passengers such as travel insurance, use of the Company’s call center or travel agents, and commissions on sale of on-board products, among others. Non-air related charges primarily consist of revenues from advertising on the Company’s aircraft and website, the Company’s $9 Fare Club subscription-based membership program and the Company’s FREE SPIRIT affinity credit card program. |
Airframe and Engine Maintenance | Airframe and Engine Maintenance The Company accounts for heavy maintenance and major overhaul under the deferral method whereby the cost of heavy maintenance and major overhaul is deferred and amortized until the earlier of the end of the useful life of the related asset, the end of the remaining lease term or the next scheduled heavy maintenance event. The Company outsources certain routine, non-heavy maintenance functions under contracts that require payment on a utilization basis, such as flight hours. Costs incurred for maintenance and repair under flight hour maintenance contracts, where labor and materials price risks have been transferred to the service provider, are expensed based on contractual payment terms. All other costs for routine maintenance of the airframes and engines are charged to expense as performed. |
Leased Aircraft Return Costs | Leased Aircraft Return Costs The Company's aircraft lease agreements often contain provisions that require the Company to return aircraft airframes and engines to the lessor in a certain condition or pay an amount to the lessor based on the airframe and engine's actual return condition. Lease return costs include all costs that would be incurred at the return of the aircraft, including costs incurred to repair the airframe and engines to the required condition as stipulated by the lease. Lease return costs could include, but are not limited to redelivery cost, fuel, final inspections, reconfiguration of the cabin, repairs to the airframe, painting, overhaul of engines, replacement of components, and checks. Lease return costs are recognized beginning when it is probable that such costs will be incurred and they can be estimated. Incurrence of lease return costs becomes probable and the amount of those costs can typically be estimated near the end of the lease term (that is, after the aircraft has completed its last maintenance cycle prior to being returned). When determining probability and estimated cost, there are various other factors which need to be considered such as current condition of the aircraft, the age of the aircraft at lease expiration, number of hours run on the engines, number of cycles run on the airframe, projected number of hours run on the engine at the time of return, number of projected cycles run on the airframe at the time of return, the extent of repairs needed if any at return, return locations, current configuration of the aircraft, current paint of the aircraft, estimated escalation of cost of repairs and materials at the time of return, current flight hour agreement rates and future flight hour agreement rates. In addition, typically near the lease return date, the lessors may allow reserves to be applied as return condition consideration or pass on certain return provisions if they do not align with their current plans to remarket the aircraft. When costs become both probable and estimable, they are accrued on a straight-line basis as contingent rent, a component of supplemental rent, through the remaining lease term. Management expects return costs to be estimable near the end of the lease term, as such, contingent rent for related aircraft will be higher near the end of the lease term. |
Aircraft Fuel | Aircraft Fuel Aircraft fuel expense includes jet fuel and associated “into-plane” costs, taxes, and oil, and realized and unrealized gains and losses associated with fuel derivative contracts, if any. |
Derivative Instruments | Derivative Instruments The Company accounts for derivative financial instruments at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current liabilities. For derivatives designated as cash flow hedges, changes in fair value of the derivative are generally reported in other comprehensive income and are subsequently reclassified into earnings when the hedged item affects earnings. During the third quarter of 2015, the Company settled six forward interest rate swaps having a total notional amount of $120 million . These interest rate swaps fixed the benchmark interest rate component of interest payments on the debt related to three Airbus A321 aircraft, which the Company took delivery of during the third quarter of 2015. These instruments limited the Company's exposure to changes in the benchmark interest rate in the period from the trade date through the date of maturity. The interest rate swaps were designated as cash flow hedges. The Company accounts for interest rate swaps at fair value and recognizes them in the balance sheet in prepaid expenses and other current assets or other current liabilities with changes in fair value recorded within accumulated other comprehensive income (AOCI). Realized gains and losses from cash flow hedges are recorded in the statement of cash flows as a component of cash flows from operating activities. Subsequent to the issuance of each debt instrument, amounts remaining in AOCI are amortized over the life of the fixed-rate debt instrument. For the years ended 2016 , 2015 and 2014 , the Company did not hold fuel derivative instruments that were designated as cash flow hedges for accounting purposes. As a result, changes in the fair value of such fuel derivative contracts were recorded within aircraft fuel expense in the accompanying statements of operations. These amounts include both realized gains and losses and mark-to-market adjustments of the fair value of unsettled derivative instruments at the end of each period. |
Advertising | Advertising The Company expenses advertising and the production costs of advertising as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method. The Company records a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will be not realized. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes cost of employee services received in exchange for awards of equity instruments based on the fair value of each instrument at the date of grant. Compensation expense is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for an award. The Company has issued and outstanding restricted stock awards, stock option awards and performance share awards. Restricted stock awards are valued at the fair value of the shares on the date of grant. The fair value of share option awards is estimated on the date of grant using the Black-Scholes valuation model. The fair value of performance share awards is estimated through the use of a Monte Carlo simulation model. |
Concentrations of Risk | Concentrations of Risk The Company’s business may be adversely affected by increases in the price of aircraft fuel, the volatility of the price of aircraft fuel, or both. Aircraft fuel, one of the Company’s largest expenditures, represented approximately 24% , 28% and 39% of total operating expenses in 2016 , 2015 and 2014 , respectively. The Company’s operations are largely concentrated in the southeast United States with Fort Lauderdale being the highest volume fueling point in the system. Gulf Coast Jet indexed fuel is the basis for a substantial majority of the Company’s fuel consumption. Any disruption to the oil production or refinery capacity in the Gulf Coast, as a result of weather or any other disaster, or disruptions in supply of jet fuel, dramatic escalations in the costs of jet fuel and/or the failure of fuel providers to perform under fuel arrangements for other reasons could have a material adverse effect on the Company’s financial condition and results of operations. The Company’s operations will continue to be vulnerable to weather conditions (including hurricane season or snow and severe winter weather), which could disrupt service or create air traffic control problems. These events may result in decreased revenue and/or increased costs. Due to the relatively small size of the fleet and high utilization rate, the unavailability of one or more aircraft and resulting reduced capacity could have a material adverse effect on the Company’s business, results of operations and financial condition. |
Recent Accounting Developments | Recent Accounting Developments Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2014-09, (ASU 2014-09), "Revenue from Contracts with Customers." The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The new guidance is effective for the Company in the first quarter of 2018. Early adoption is permitted, but not before the first quarter of 2017. Entities have the option to use either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance and has neither determined the full impact this standard may have on its financial statements nor decided upon the planned method of adoption. While the Company is still evaluating the impact, it expects the accounting for its frequent flier program to be impacted as ASU 2014-09 will no longer allow use of the incremental cost method when recording revenue related to the Company's loyalty programs. The Company also expects the adoption of ASU 2014-09 to impact the classification and timing of recognition of certain ancillary fees as well as the timing of recognition of certain costs to obtain a contract. Financial Instruments In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10).” ASU 2016-01 makes several modifications to Subtopic 825-10, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for interim and annual periods beginning after December 15, 2017 and is not expected to have a material impact on the Company’s financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for the Company in the first quarter of 2019, with early adoption permitted. The Company is currently evaluating the new guidance and believes adoption of this standard will have a significant impact on its balance sheets although adoption is not expected to significantly change the recognition, measurement or presentation of lease expenses within the statements of operations and cash flows. Refer to Note 16, Commitments and Contingencies for information regarding the Company's undiscounted future lease payments and the timing of those payments. Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. The new guidance is effective for the Company in the first quarter of 2017, with early adoption permitted. The Company expects that any excess tax benefits or deficiencies will be recorded within the Company's statement of operations instead of being recorded within additional paid in capital on its balance sheet. The new standard may cause volatility in the Company’s effective tax rates and diluted earnings per share due to the tax effects related to share-based payments being recorded within the income statement. The Company will continue to evaluate the impact of adoption of this guidance on its financial statements. Accounting for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses." The standard requires the use of an "expected loss" model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows." The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a material impact on its financial statements. |
Rent Expense, Deferred Gains (Losses) | Deferred losses are recognized as an increase to rent expense on a straight-line basis over the term of the respective operating leases. Deferred gains are included in deferred gains and other long-term liabilities on the accompanying balance sheet. Deferred gains are recognized as a decrease to rent expense on a straight-line basis over the term of the respective operating leases. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Depreciable lives used for the principal depreciable asset classifications | The depreciable lives used for the principal depreciable asset classifications are: Estimated Useful Life Aircraft 25 years Spare rotables and flight assemblies 7 to 15 years Other equipment and vehicles 5 to 7 years Internal use software 3 to 10 years Capital lease Lease term Leasehold improvements Lesser of lease term or estimated useful life of the improvement The following table illustrates the components of depreciation and amortization expense: Year Ended December 31, 2016 2015 2014 (in thousands) Depreciation $ 57,325 $ 30,797 $ 11,169 Amortization of heavy maintenance 43,811 43,111 35,802 Total depreciation and amortization $ 101,136 $ 73,908 $ 46,971 |
Total cash proceeds received from the sale of mileage credit | The following table illustrates total cash proceeds received from the sale of mileage credits and the portion of such proceeds recognized in revenue immediately as marketing component: Consideration received from credit card mile programs Portion of proceeds recognized immediately as marketing component Year Ended (in thousands) December 31, 2016 $ 48,882 $ 36,640 December 31, 2015 58,005 35,938 December 31, 2014 33,819 28,140 |
Primary components of non-ticket revenue and the revenue recognition method utilized for each service or product | The following table summarizes the primary components of non-ticket revenue and the revenue recognition method utilized for each service or product: Year Ended December 31, Non-ticket revenue Recognition method 2016 2015 2014 (in thousands) Baggage Time of departure $ 434,269 $ 381,386 $ 318,103 Passenger usage fee Time of departure 358,920 298,092 221,992 Advance seat selection Time of departure 110,966 97,786 76,270 Service charges for changes and cancellations When itinerary is changed 42,823 43,756 38,388 Other 174,357 151,105 131,855 Non-ticket revenue $ 1,121,335 $ 972,125 $ 786,608 |
Aircraft maintenance expense | The table below summarizes the extent to which the Company’s maintenance costs are rate capped due to flight hour maintenance contracts: Year Ended December 31, 2016 2015 2014 (in thousands) Flight hour-based maintenance expense $ 48,471 $ 41,818 $ 35,675 Non-flight hour-based maintenance expense 50,116 38,630 38,281 Total maintenance, materials and repairs $ 98,587 $ 80,448 $ 73,956 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued liabilities included in other current liabilities | Accrued liabilities included in other current liabilities as of December 31, 2016 and 2015 consist of the following: As of December 31, 2016 2015 (in thousands) Salaries and wages $ 54,578 $ 34,123 Airport obligations 43,989 30,849 Federal excise and other passenger taxes and fees payable 42,064 38,254 Aircraft maintenance 30,233 21,688 Fuel 14,828 7,084 Aircraft and facility lease obligations 10,378 24,014 Interest payable 8,499 12,355 Other 21,442 14,362 Other current liabilities $ 226,011 $ 182,729 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the status of the Company's restricted stock shares | A summary of the status of the Company’s restricted stock shares (restricted stock awards and restricted stock unit awards) as of December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Number of Shares Weighted-Average Outstanding at December 31, 2015 294,680 49.19 Granted 237,001 42.91 Vested (138,949 ) 39.34 Forfeited (118,087 ) 47.26 Outstanding at December 31, 2016 274,645 49.55 |
Summary of share option activity | A summary of share option activity as of December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Number Weighted- Average Aggregate Outstanding at December 31, 2015 28,125 8.20 4.7 890 Exercised (11,500 ) 7.98 Forfeited or expired (375 ) 7.80 Outstanding at December 31, 2016 16,250 8.37 3.7 804 Exercisable at December 31, 2016 16,250 8.37 3.7 804 Vested at December 31, 2016 16,250 8.37 3.7 804 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance share award activity | The following table summarizes the Company’s performance share awards for the year ended December 31, 2016 : Number of Awards Weighted-Average Fair Value at Grant Date ($) Outstanding at December 31, 2015 86,778 66.44 Granted 119,508 51.40 Vested (27,579 ) 77.57 Forfeited (44,800 ) 67.01 Outstanding at December 31, 2016 133,907 50.54 |
Performance Shares Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Multiple input variables of performance share awards | The grant date fair value of the performance share awards is determined through the use of a Monte Carlo simulation model, which utilizes multiple input variables that determine the probability of satisfying the market condition requirements applicable to each award as follows: Weighted-Average at Grant Date for Twelve Months Ended December 31, 2016 Weighted-Average at Grant Date for Twelve Months Ended December 31, 2015 Expected volatility factor 0.39 0.36 Risk free interest rate 1.12 % 0.91 % Expected term (in years) 2.94 2.55 Expected dividend yield — % — % |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted earnings per common share: Year Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net income $ 264,879 $ 317,220 $ 225,464 Denominator: Weighted-average shares outstanding, basic 70,344 72,208 72,739 Effect of dilutive stock awards 164 218 555 Adjusted weighted-average shares outstanding, diluted 70,508 72,426 73,294 Net Income per Share: Basic earnings per common share $ 3.77 $ 4.39 $ 3.10 Diluted earnings per common share $ 3.76 $ 4.38 $ 3.08 Anti-dilutive weighted-average shares 66 52 29 |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Long-term debt is comprised of the following: As of December 31, Year Ended December 31, 2016 2015 2016 2015 (in millions) (weighted-average interest rates) Fixed-rate senior term loans due through 2027 $ 451.9 $ 484.2 4.10 % 4.10 % Fixed-rate junior term loans due through 2022 47.1 54.3 6.90 % 6.90 % Fixed-rate class A enhanced equipment trust certificates due through 2028 409.8 95.8 4.10 % 4.03 % Fixed-rate class B enhanced equipment trust certificates due through 2024 103.6 25.0 4.45 % 4.37 % Long-term debt $ 1,012.4 $ 659.3 Less current maturities 84.4 49.6 Less unamortized discount, net 30.6 13.0 Total $ 897.4 $ 596.7 |
Schedule of maturities of long-term debt | At December 31, 2016 , long-term debt principal payments for the next five years and thereafter are as follows: December 31, 2016 (in millions) 2017 $ 88.9 2018 83.1 2019 81.5 2020 79.7 2021 78.2 2022 and thereafter 601.0 Total debt principal payments $ 1,012.4 |
Schedule of interest expense on long-term debt | Interest expense related to long-term debt consists of the following: Year Ended December 31, 2016 2015 (in thousands) Senior term loans $ 19,759 $ 15,429 Junior term loans 3,568 2,997 Class A enhanced equipment trust certificates 11,509 494 Class B enhanced equipment trust certificates 3,243 140 Commitment fees 127 54 Amortization of deferred financing costs 3,435 1,165 Total $ 41,641 $ 20,279 |
Leases and Prepaid Maintenanc34
Leases and Prepaid Maintenance Deposits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of future minimum rental payments for noncancellable operating leases | Future minimum lease payments under noncancellable operating leases with initial or remaining terms in excess of one year at December 31, 2016 were as follows: Operating Leases Aircraft and Spare Engine Leases Property Facility Leases Total Operating Leases (in thousands) 2017 $ 218,484 $ 39,189 $ 257,673 2018 203,465 38,048 241,513 2019 184,566 30,451 215,017 2020 176,590 18,928 195,518 2021 166,967 8,969 175,936 2022 and thereafter 558,038 53,734 611,772 Total minimum lease payments $ 1,508,110 $ 189,319 $ 1,697,429 |
Financial Instruments and Ris35
Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Components of aircraft fuel expense | The following table summarizes the components of aircraft fuel expense for the years ended December 31, 2016 , 2015 and 2014 : Year Ended December 31, 2016 2015 2014 (in thousands) Into-plane fuel cost $ 447,553 $ 454,747 $ 608,033 Realized losses (gains) related to fuel derivative contracts, net — 10,580 995 Unrealized losses (gains) related to fuel derivative contracts, net — (3,880 ) 3,881 Aircraft fuel $ 447,553 $ 461,447 $ 612,909 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Significant components of the provision for income taxes from continuing operations | Significant components of the provision for income taxes from continuing operations are as follows: Year Ended December 31, 2016 2015 2014 (in thousands) Current: Federal $ 60,079 $ 21,632 $ 85,966 State and local 6,322 6,702 5,389 Foreign 2,034 1,235 2,057 Total current expense 68,435 29,569 93,412 Deferred: Federal 82,455 149,583 34,240 State and local 3,691 6,031 (122 ) Total deferred expense (benefit) 86,146 155,614 34,118 Total income tax expense (benefit) $ 154,581 $ 185,183 $ 127,530 |
Reconciliation of income tax expense | The income tax provision differs from that computed at the federal statutory corporate tax rate as follows: Year Ended December 31, 2016 2015 2014 Expected provision at federal statutory tax rate 35.0 % 35.0 % 35.0 % State tax expense, net of federal benefit 1.6 % 1.7 % 1.0 % Income tax credits — % — % (0.4 )% Other 0.3 % 0.2 % 0.5 % Total income tax expense (benefit) 36.9 % 36.9 % 36.1 % |
Deferred taxes | At December 31, 2016 and 2015 , the significant components of the Company's deferred taxes consisted of the following: December 31, 2016 2015 (in thousands) Deferred tax assets: Deferred revenue 3,057 3,381 Nondeductible accruals 20,547 11,056 Deferred manufacturing credits 910 822 Accrued maintenance 1,854 830 Equity compensation 3,882 4,485 Other 4,026 2,751 Deferred tax assets 34,276 23,325 Deferred tax liabilities: Capitalized interest — 286 Deferred gain (loss) on leases, net 2,435 2,393 Accrued rent 14,025 6,724 Prepaid expenses 1,217 2,151 Property, plant and equipment 278,872 168,813 Deferred financing costs 5,358 — Accrued aircraft and engine maintenance 40,512 64,439 Deferred tax liabilities 342,419 244,806 Net deferred tax assets (liabilities) $ (308,143 ) $ (221,481 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Operating Aircraft Leases | As of December 31, 2016 , the Company's firm aircraft orders consisted of the following: Airbus A320ceo A320neo A321ceo Total 2017 4 11 15 2018 5 4 5 14 2019 1 12 13 2020 16 16 2021 18 18 10 50 16 76 |
Schedules of Concentration of Risk, by Risk Factor | The table below sets forth the Company's employee groups and status of the collective bargaining agreements as of December 31, 2016 . Employee Groups Representative Amendable Date Percentage of Workforce Pilots Air Line Pilots Association, International (ALPA) August 2015 26% Flight Attendants Association of Flight Attendants (AFA-CWA) May 2021 42% Dispatchers Transport Workers Union (TWU) August 2018 1% Ramp Service Agents International Association of Machinists and Aerospace Workers (IAMAW) June 2020 4% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Long-term debt measured at fair value | The carrying amounts and estimated fair values of the Company's long-term debt, including current maturities, at December 31, 2016 and December 31, 2015 , were as follows: As of December 31, 2016 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Fair value level hierarchy (in millions) Senior long-term debt $ 451.9 $ 463.9 $ 484.2 $ 477.8 Level 3 Junior long-term debt 47.1 48.1 54.3 54.6 Level 3 Class A enhanced equipment trust certificates 409.8 416.0 95.8 94.8 Level 2 Class B enhanced equipment trust certificates 103.6 105.7 25.0 25.2 Level 2 Total long-term debt $ 1,012.4 $ 1,033.7 $ 659.3 $ 652.4 |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at gross fair value on a recurring basis are summarized below: Fair Value Measurements as of December 31, 2016 Total Level Level Level (in millions) Cash and cash equivalents $ 700.9 $ 700.9 $ — $ — Short-term investment securities 100.2 100.2 — — Total assets $ 801.1 $ 801.1 $ — $ — Total liabilities $ — $ — $ — $ — Fair Value Measurements as of December 31, 2015 Total Level Level Level (in millions) Cash and cash equivalents $ 803.6 $ 803.6 $ — $ — Total assets $ 803.6 $ 803.6 $ — $ — Total liabilities $ — $ — $ — $ — |
Operating Segments and Relate39
Operating Segments and Related Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating revenues by geographic region | Operating revenues by geographic region as defined by the Department of Transportation (DOT) area are summarized below: 2016 2015 2014 (in millions) DOT—Domestic $ 2,136.2 $ 1,940.2 $ 1,728.8 DOT—Latin America 185.8 201.3 202.8 Total $ 2,322.0 $ 2,141.5 $ 1,931.6 |
Quarterly Financial Data (Una40
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly results of operations | Quarterly results of operations for the years ended December 31, 2016 and 2015 are summarized below: Three Months Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) 2016 Operating revenue $ 538,143 $ 584,133 $ 621,329 $ 578,351 Operating income 101,299 121,835 135,216 85,311 Net income 61,920 73,084 81,382 48,493 Basic earnings per share 0.87 1.03 1.17 0.70 Diluted earnings per share 0.86 1.03 1.17 0.70 2015 Operating revenue $ 493,355 $ 553,421 $ 574,841 $ 519,846 Operating income 109,251 122,315 157,219 120,337 Net income 69,002 76,704 97,114 74,400 Basic earnings per share 0.94 1.06 1.35 1.04 Diluted earnings per share 0.94 1.05 1.35 1.04 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Reportable Segments (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Property and Equipment (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)aircraft | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Number of aircraft capitalized | aircraft | 36 | ||
Number of Spare Engines Capitalized | aircraft | 1 | ||
Depreciation, Depletion and Amortization, Nonproduction [Abstract] | |||
Depreciation | $ 57,325 | $ 30,797 | $ 11,169 |
Amortization of heavy maintenance | 43,811 | 43,111 | 35,802 |
Total depreciation and amortization | 101,136 | 73,908 | 46,971 |
Amortization of capitalized software costs | $ 3,200 | 3,100 | 3,500 |
Aircraft | |||
Property, Plant and Equipment [Line Items] | |||
Number of aircraft under operating lease | aircraft | 59 | ||
Aircrafts, Major Spare Rotable Parts, Avionics, and Assemblies [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Residual value, percentage | 10.00% | ||
Aircraft | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 25 years | ||
Aircraft | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Operating leases, term | 12 years | ||
Aircraft | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Operating leases, term | 18 years | ||
Spare rotables and flight assemblies | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 7 years | ||
Spare rotables and flight assemblies | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 15 years | ||
Other equipment and vehicles | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 5 years | ||
Other equipment and vehicles | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 7 years | ||
Internal use software | |||
Depreciation, Depletion and Amortization, Nonproduction [Abstract] | |||
Capitalized computer software, net | $ 9,400 | 8,800 | |
Capitalized software costs during the year | $ 4,100 | $ 4,300 | $ 2,700 |
Internal use software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 3 years | ||
Internal use software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable lives used for the principal depreciable asset classifications | 10 years | ||
Spare engines | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Operating leases, term | 10 years | ||
Spare engines | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Operating leases, term | 13 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Frequent Flier Program (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)unit_of_accounting | Dec. 31, 2015USD ($) | |
Accounting Policies [Abstract] | ||
Credit shell, term of expiration | 60 days | |
Signing bonus | $ 10.7 | |
Number of units of accounting | unit_of_accounting | 3 | |
Affinity Card Program, deferred fair value of the transportation component, recognition period | 17 months | |
Liability for future FREE SPIRIT award redemptions and unrecognized revenue from the sale of mileage credits | $ 15.3 | $ 14.9 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Cash Proceeds Received from the Sale of Mileage Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Consideration received from credit card mile programs | $ 48,882 | $ 58,005 | $ 33,819 |
Portion of proceeds recognized immediately as marketing component | $ 36,640 | $ 35,938 | $ 28,140 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Primary Components of Non-Ticket Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Information [Line Items] | |||
Non-ticket revenue | $ 1,121,335 | $ 972,125 | $ 786,608 |
Baggage | |||
Product Information [Line Items] | |||
Non-ticket revenue | 434,269 | 381,386 | 318,103 |
Passenger usage fee | |||
Product Information [Line Items] | |||
Non-ticket revenue | 358,920 | 298,092 | 221,992 |
Advance seat selection | |||
Product Information [Line Items] | |||
Non-ticket revenue | 110,966 | 97,786 | 76,270 |
Service charges for changes and cancellations | |||
Product Information [Line Items] | |||
Non-ticket revenue | 42,823 | 43,756 | 38,388 |
Other | |||
Product Information [Line Items] | |||
Non-ticket revenue | $ 174,357 | $ 151,105 | $ 131,855 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Maintenance Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Amortization of heavy maintenance | $ 43,811 | $ 43,111 | $ 35,802 |
Deferred costs for heavy maintenance | 35,400 | 9,100 | 33,600 |
Deferred heavy maintenance, gross | 238,300 | 208,100 | |
Accumulated heavy maintenance amortization | 122,509 | 65,524 | |
Airframe and Engine Maintenance Costs [Abstract] | |||
Flight hour-based maintenance expense | 48,471 | 41,818 | 35,675 |
Non-flight hour-based maintenance expense | 50,116 | 38,630 | 38,281 |
Total maintenance, materials and repairs | 98,587 | 80,448 | $ 73,956 |
Heavy Maintenance | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated heavy maintenance amortization | $ 162,800 | $ 118,900 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Derivative Instruments (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015USD ($)aircraftderivative_instrument | Dec. 31, 2015derivative_instrument | |
Airbus A321 | ||
Derivative [Line Items] | ||
Number of aircraft protected by interest rate derivatives scheduled for delivery | 3 | |
2015 | Airbus A321 | ||
Derivative [Line Items] | ||
Number of aircraft protected by interest rate derivatives scheduled for delivery | 3 | |
Interest rate swap | ||
Derivative [Line Items] | ||
Number of interest rate derivatives settled | derivative_instrument | 6 | 6 |
Notional amount | $ | $ 120 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)employee_group | Dec. 31, 2015USD ($)employee_group | Dec. 31, 2014USD ($) | |
Concentration Risk [Line Items] | |||
Marketing and advertising expenses | $ | $ 3.2 | $ 3.5 | $ 3 |
Aircraft fuel expenditure concentration risk | Total operating expenses | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 24.00% | 28.00% | 39.00% |
Unionized employees concentration risk | Number of employees, total | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 73.00% | 73.00% | |
Union-represented employee groups | employee_group | 4 | 4 |
Special Charges (Details)
Special Charges (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)aircraft | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Purchase of property and equipment | $ 541,122 | $ 548,800 | $ 186,569 |
Special charges | $ 37,189 | $ 673 | $ 45 |
Airbus A319 | Aircraft | |||
Property, Plant and Equipment [Line Items] | |||
Number of previously leased aircraft purchased | aircraft | 7 | ||
Purchase price | $ 147,700 | ||
Purchase of property and equipment | 107,100 | ||
Value of noncash consideration | 40,600 | ||
Fair value of assets acquired | 95,700 | ||
Special charges | 37,200 | ||
Airbus A319 | Aircraft | Supplemental Rent and Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Value of noncash consideration | $ 14,800 |
Letters of Credit (Details)
Letters of Credit (Details) - Unsecured, standby letter of credit facility - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||
Letters of credit, limit, amount | $ 25.2 | $ 25.1 |
Letter of credit facility, amount outstanding | $ 19.7 | $ 13 |
Credit Card Processing Arrang51
Credit Card Processing Arrangements (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Credit Card Processing Arrangements [Abstract] | ||
Cash holdbacks | $ 0 | $ 0 |
Maximum potential exposure to cash holdbacks by the credit card processors | $ 234,600,000 | $ 250,200,000 |
Short-term Investment Securit52
Short-term Investment Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |||
Short-term investment securities | $ 100,155 | $ 0 | |
Weighted-average fixed rate | 1.10% | ||
Unrealized loss on investment securities, net of deferred taxes | $ 23 | 0 | $ 0 |
Deferred taxes on unrealized loss on investment securities | $ (13) | $ 0 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Salaries and wages | $ 54,578 | $ 34,123 |
Airport obligations | 43,989 | 30,849 |
Federal excise and other passenger taxes and fees payable | 42,064 | 38,254 |
Aircraft maintenance | 30,233 | 21,688 |
Fuel | 14,828 | 7,084 |
Aircraft and facility lease obligations | 10,378 | 24,014 |
Interest payable | 8,499 | 12,355 |
Other | 21,442 | 14,362 |
Other current liabilities | $ 226,011 | $ 182,729 |
Common Stock and Preferred St54
Common Stock and Preferred Stock (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, shares outstanding | 0 | 0 |
Voting Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 240,000,000 | 240,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares outstanding | 69,326,202 | 71,541,788 |
Non-Voting Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 50,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares outstanding | 0 | 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation cost | $ 7.1 | $ 9.2 | $ 8.8 |
Share-based compensation cost, tax benefit recognized in income | $ 2.6 | $ 3.4 | $ 3.2 |
Equity Incentive Award Plan 2015 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance (in shares) | 2,358,283 | 2,428,990 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage per year | 25.00% | ||
Period for share issuance after vesting | 30 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding (in shares) | 294,680 | ||
Granted (in shares) | 237,001 | 74,772 | |
Vested (in shares) | (138,949) | ||
Forfeited (in shares) | (118,087) | ||
Outstanding (in shares) | 274,645 | 294,680 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding, weighted-average grant date fair value (in dollars per share) | $ 49.19 | ||
Granted, weighted-average grant date fair value (in dollars per share) | 42.91 | $ 75.40 | $ 55.14 |
Vested, weighted-average grant date fair value (in dollars per share) | 39.34 | ||
Forfeited, weighted-average grant date fair value (in dollars per share) | 47.26 | ||
Outstanding, weighted-average grant date fair value (in dollars per share) | $ 49.55 | $ 49.19 | |
Total compensation cost not yet recognized | $ 9.2 | $ 9.8 | |
Total compensation cost not yet recognized, period for recognition | 2 years 5 months 20 days | 2 years 5 months 2 days | |
Total fair value of shares vested | $ 6.6 | $ 9.2 | $ 6.5 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share Option Activity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding (in shares) | 28,125 | |||
Exercised (in shares) | (11,500) | |||
Forfeited or expired (in shares) | (375) | |||
Outstanding (in shares) | 16,250 | 28,125 | ||
Exercisable (in shares) | 16,250 | |||
Vested (in shares) | 16,250 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Outstanding, weighted-average exercise price (in dollars per share) | $ 8.20 | |||
Exercised, weighted-average exercise price (in dollars per share) | 7.98 | |||
Forfeited or expired, weighted-average exercise price (in dollars per share) | 7.80 | |||
Outstanding, weighted-average exercise price (in dollars per share) | 8.37 | $ 8.20 | ||
Exercisable, weighted-average exercise price (in dollars per share) | 8.37 | |||
Vested, weighted-average exercise price (in dollars per share) | $ 8.37 | |||
Outstanding, average remaining contractual term (in years) | 3 years 8 months 24 days | 4 years 8 months 24 days | ||
Exercisable, average remaining contractual term (in years) | 3 years 8 months 24 days | |||
Vested, average remaining contractual term | 3 years 8 months 24 days | |||
Outstanding, aggregate intrinsic value | $ 804,000 | $ 890,000 | ||
Exercisable, aggregate intrinsic value | 804,000 | |||
Vested, aggregate intrinsic value | 804,000 | |||
Total intrinsic value of share options exercised | 400,000 | 200,000 | $ 1,300,000 | |
Options, vested in period, fair value | $ 0 | $ 4,000 | $ 100,000 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Contractual term | 10 years | |||
Grants in period (in shares) | 0 | 0 | 0 | |
Expected volatility factor | 46.25% | |||
Expected dividend yield (percent) | 0.00% | |||
Expected term (in years) | 6 years 3 months | |||
Risk free interest rate (percent) | 2.03% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Total compensation cost not yet recognized | $ 0 | $ 0 | $ 3,000 | |
Total compensation cost not yet recognized, period for recognition | 8 months 12 days |
Stock-Based Compensation - Simu
Stock-Based Compensation - Simulation Model Input Variables (Details) - Performance Shares Awards | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility factor | 0.39% | 0.36% |
Risk free interest rate (percent) | 1.12% | 0.91% |
Expected term (in years) | 2 years 11 months 7 days | 2 years 6 months 20 days |
Expected dividend yield (percent) | 0.00% | 0.00% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Awards (Details) - Performance Shares Awards - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award requisite performance period | 3 years | |
Period for share issuance after vesting | 60 days | |
Expected dividend yield (percent) | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding (in shares) | 86,778 | |
Granted (in shares) | 119,508 | |
Vested (in shares) | (27,579) | |
Forfeited (in shares) | (44,800) | |
Outstanding (in shares) | 133,907 | 86,778 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Outstanding, weighted-average grant date fair value (in dollars per share) | $ 66.44 | |
Granted, weighted-average grant date fair value (in dollars per share) | 51.40 | |
Vested, weighted-average grant date fair value (in dollars per share) | 77.57 | |
Forfeited, weighted-average grant date fair value (in dollars per share) | 67.01 | |
Outstanding, weighted-average grant date fair value (in dollars per share) | $ 50.54 | $ 66.44 |
Total compensation cost not yet recognized | $ 4.3 | $ 2.9 |
Total compensation cost not yet recognized, period for recognition | 1 year 10 months 25 days | 1 year 6 months 4 days |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential vesting percentage | 0.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential vesting percentage | 200.00% |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net income | $ 48,493 | $ 81,382 | $ 73,084 | $ 61,920 | $ 74,400 | $ 97,114 | $ 76,704 | $ 69,002 | $ 264,879 | $ 317,220 | $ 225,464 |
Denominator: | |||||||||||
Weighted-average shares outstanding, basic (in shares) | 70,344 | 72,208 | 72,739 | ||||||||
Effect of dilutive stock awards (in shares) | 164 | 218 | 555 | ||||||||
Adjusted weighted-average shares outstanding, diluted (in shares) | 70,508 | 72,426 | 73,294 | ||||||||
Net Income per Share: | |||||||||||
Basic earnings per common share (in dollars per share) | $ 0.70 | $ 1.17 | $ 1.03 | $ 0.87 | $ 1.04 | $ 1.35 | $ 1.06 | $ 0.94 | $ 3.77 | $ 4.39 | $ 3.10 |
Diluted earnings per common share (in dollars per share) | $ 0.70 | $ 1.17 | $ 1.03 | $ 0.86 | $ 1.04 | $ 1.35 | $ 1.05 | $ 0.94 | $ 3.76 | $ 4.38 | $ 3.08 |
Antidilutive awards excluded from computation of earnings per common share (in shares) | 66 | 52 | 29 |
Debt and Other Obligations - Na
Debt and Other Obligations - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2015USD ($)aircrafttrust | Dec. 31, 2016USD ($)aircraft | Dec. 31, 2015USD ($)agreement | |
Line of Credit Facility [Line Items] | |||
Number of facility agreements | agreement | 2 | ||
Repayments of principal | $ 64.4 | $ 25.4 | |
Corporate credit cards | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 23.6 | 18.6 | |
Line of credit, outstanding | 9.9 | 7.3 | |
Aircraft fuel | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 46.5 | 38 | |
Line of credit, outstanding | $ 8 | $ 6.9 | |
Airbus | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 29 | ||
Airbus | A320 | Enhanced Equipment Trust Certificate | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 3 | ||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 3 | ||
Airbus | A321 | Enhanced Equipment Trust Certificate | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 11 | ||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 12 | ||
Aircraft and Related Flight Equipment | |||
Line of Credit Facility [Line Items] | |||
Face amount, commitment for future issuance | $ 144.5 | ||
Enhanced Equipment Trust Certificate | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | $ 538.1 | ||
Enhanced Equipment Trust Certificate | Equipment Notes, Series A | |||
Line of Credit Facility [Line Items] | |||
State interest rate percentage | 4.10% | ||
Enhanced Equipment Trust Certificate | Equipment Notes, Series B | |||
Line of Credit Facility [Line Items] | |||
State interest rate percentage | 4.45% | ||
Enhanced Equipment Trust Certificate | Aircraft and Related Flight Equipment | |||
Line of Credit Facility [Line Items] | |||
Number of trusts | trust | 2 | ||
Face amount, commitment for future issuance | $ 576.6 | $ 38.5 | |
Framework Agreement | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | $ 379 | ||
Framework Agreement | Senior loans | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 12 years | ||
Framework Agreement | Junior loans | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 7 years | ||
Framework Agreement | Airbus | A320 | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 7 | ||
Framework Agreement | Airbus | A321 | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 3 | ||
Facility Agreement | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | $ 185 | ||
Facility Agreement | Senior loans | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 12 years | ||
Facility Agreement | Junior loans | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 7 years | ||
Facility Agreement | Airbus | A320 | |||
Line of Credit Facility [Line Items] | |||
Number of delivered aircraft with secured debt financing commitments | aircraft | 5 | ||
2016 Facility Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Face amount, commitment for future issuance | $ 106 | ||
2016 Facility Agreement [Member] | Senior loans | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 10 years | ||
2016 Facility Agreement [Member] | Airbus | A320 | |||
Line of Credit Facility [Line Items] | |||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 2 | ||
2016 Facility Agreement [Member] | Airbus | A321 | |||
Line of Credit Facility [Line Items] | |||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 1 |
Debt and Other Obligations - Lo
Debt and Other Obligations - Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,012,400 | $ 659,300 |
Less current maturities | 84,354 | 49,637 |
Less unamortized discount, net | 30,600 | 13,000 |
Total | 897,359 | 596,693 |
Senior loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 451,900 | $ 484,200 |
Weighted-average interest rates | 4.10% | 4.10% |
Junior loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 47,100 | $ 54,300 |
Weighted-average interest rates | 6.90% | 6.90% |
Equipment Notes, Series A | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 409,800 | $ 95,800 |
Weighted-average interest rates | 4.10% | 4.03% |
Equipment Notes, Series B | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 103,600 | $ 25,000 |
Weighted-average interest rates | 4.45% | 4.37% |
Debt and Other Obligations - Fu
Debt and Other Obligations - Future Maturities (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 88.9 |
2,018 | 83.1 |
2,019 | 81.5 |
2,020 | 79.7 |
2,021 | 78.2 |
2022 and thereafter | 601 |
Long-term debt | $ 1,012.4 |
Debt and Other Obligations - In
Debt and Other Obligations - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Commitment fees | $ 127 | $ 54 |
Amortization of deferred financing costs | 3,435 | 1,165 |
Total | 41,641 | 20,279 |
Senior loans | ||
Debt Instrument [Line Items] | ||
Interest expense, debt | 19,759 | 15,429 |
Junior loans | ||
Debt Instrument [Line Items] | ||
Interest expense, debt | 3,568 | 2,997 |
Equipment Notes, Series A | ||
Debt Instrument [Line Items] | ||
Interest expense, debt | 11,509 | 494 |
Equipment Notes, Series B | ||
Debt Instrument [Line Items] | ||
Interest expense, debt | $ 3,243 | $ 140 |
Leases and Prepaid Maintenanc65
Leases and Prepaid Maintenance Deposits - Operating Leases (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)aircraftaircraft_engine | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Operating Leased Assets [Line Items] | |||
Total rental expense | $ 283,900 | $ 282,700 | $ 254,300 |
Rental expense charged to operations for aircraft and engine operating leases | 201,675 | 211,531 | 195,827 |
Maintenance reserves, supplemental rent | 2,200 | 2,300 | 1,600 |
Aircraft maintenance deposits | $ 286,400 | 279,900 | |
Number of aircraft capitalized | aircraft | 36 | ||
Number of Spare Engines Capitalized | aircraft | 1 | ||
Aircraft | |||
Operating Leased Assets [Line Items] | |||
Number of leased assets financed under operating leases | aircraft | 59 | ||
Spare engines | |||
Operating Leased Assets [Line Items] | |||
Number of leased assets financed under operating leases | aircraft_engine | 11 | ||
A320 Family | |||
Operating Leased Assets [Line Items] | |||
Number of Aircraft Held | aircraft | 95 | ||
Fixed Maintenance Reserve Payments | |||
Operating Leased Assets [Line Items] | |||
Committed expenditures, 2017 | $ 7,700 | ||
Committed expenditures, 2018 | 7,000 | ||
Committed expenditures, 2019 | 5,700 | ||
Committed expenditures, 2020 | 5,400 | ||
Committed expenditures, 2021 | 5,500 | ||
Committed expenditures, 2022 and beyond | 17,700 | ||
Aircraft Supplemental Rent | |||
Operating Leased Assets [Line Items] | |||
Supplemental rent expense | $ 9,000 | $ 7,700 | $ 7,500 |
Aircraft | |||
Operating Leased Assets [Line Items] | |||
Number of aircraft and spare engines financed under operating leases with a variable rate | aircraft | 2 | ||
Number of aircrafts delivered under secured debt arrangements | aircraft | 11 | ||
Aircraft | Airbus A319 | |||
Operating Leased Assets [Line Items] | |||
Number of previously leased aircraft purchased | aircraft | 7 | ||
Aircraft | Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 12 years | ||
Aircraft | Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 18 years | ||
Other leased equipment and property | Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 30 years | ||
Spare engines | |||
Operating Leased Assets [Line Items] | |||
Number of spare engines purchased | aircraft | 1 | ||
Spare engines | Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 10 years | ||
Spare engines | Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 13 years | ||
Third Party Lessor | |||
Operating Leased Assets [Line Items] | |||
Number of direct lease aircraft from a third-party lessor | aircraft | 5 |
Leases and Prepaid Maintenanc66
Leases and Prepaid Maintenance Deposits - Future Minimum Lease Payments Under Noncancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Future Minimum Lease Payments, Operating Leases | |
2,017 | $ 257,673 |
2,018 | 241,513 |
2,019 | 215,017 |
2,020 | 195,518 |
2,021 | 175,936 |
2022 and thereafter | 611,772 |
Total minimum lease payments | 1,697,429 |
Aircraft and Spare Engine Leases | |
Future Minimum Lease Payments, Operating Leases | |
2,017 | 218,484 |
2,018 | 203,465 |
2,019 | 184,566 |
2,020 | 176,590 |
2,021 | 166,967 |
2022 and thereafter | 558,038 |
Total minimum lease payments | 1,508,110 |
Property Facility Leases | |
Future Minimum Lease Payments, Operating Leases | |
2,017 | 39,189 |
2,018 | 38,048 |
2,019 | 30,451 |
2,020 | 18,928 |
2,021 | 8,969 |
2022 and thereafter | 53,734 |
Total minimum lease payments | $ 189,319 |
Financial Instruments and Ris67
Financial Instruments and Risk Management Financial Instruments and Risk Management (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Into-plane fuel cost | $ 447,553 | $ 454,747 | $ 608,033 |
Realized losses (gains) related to fuel derivative contracts, net | 0 | 10,580 | 995 |
Unrealized losses (gains) related to fuel derivative contracts, net | 0 | (3,880) | 3,881 |
Aircraft fuel | $ 447,553 | $ 461,447 | $ 612,909 |
Financial Instruments and Ris68
Financial Instruments and Risk Management - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015aircraftderivative_instrument | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)derivative_instrument | Dec. 31, 2014USD ($) | |
Derivative [Line Items] | ||||
Fuel federal excise tax | $ 9,300 | |||
Unrealized loss on interest rate derivative instruments | $ 0 | $ 910 | 718 | |
Unrealized gain (loss) on interest rate derivative instrument, tax | 0 | (550) | (423) | |
Loss reclassified from AOCI into income, tax | 130 | 50 | 0 | |
Accumulated other comprehensive loss | 1,345 | 1,546 | ||
Airbus A321 | ||||
Derivative [Line Items] | ||||
Number of aircraft protected by interest rate derivatives delivered | aircraft | 3 | |||
Jet fuel options | ||||
Derivative [Line Items] | ||||
Payments for premiums on fuel option derivatives | $ 2,500 | $ 9,700 | ||
Interest rate swap | ||||
Derivative [Line Items] | ||||
Number of interest rate derivatives settled | derivative_instrument | 6 | 6 | ||
Accumulated other comprehensive loss | 1,322 | $ (1,500) | ||
Interest rate swap | Cash flow hedge | ||||
Derivative [Line Items] | ||||
Unrealized loss on interest rate derivative instruments | 0 | 900 | ||
Unrealized gain (loss) on interest rate derivative instrument, tax | 0 | 600 | ||
Loss reclassified from AOCI into earnings | 224 | 82 | ||
Loss reclassified from AOCI into income, tax | $ 130 | $ 50 |
Defined Contribution 401(k) P69
Defined Contribution 401(k) Plan (Details) $ in Millions | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||
Apr. 30, 2016 | Dec. 31, 2016defined_contribution_plan | Dec. 31, 2016USD ($)defined_contribution_plan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, number of plans | defined_contribution_plan | 3 | 3 | |||
Defined contribution 401(k) plan, requisite service period | 60 days | ||||
Defined contribution 401(k) plan, requisite age | 21 years | ||||
Defined contribution 401(k) plan, matching contributions made in period | $ | $ 16.2 | $ 12.5 | $ 9.7 | ||
Employee Retirement Savings Plan | Flight Attendants and Dispatchers | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, employer matching contribution, percent of match | 50.00% | 100.00% | |||
Employee Retirement Savings Plan | Other Employees | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, employer matching contribution, percent of match | 50.00% | ||||
Employee Retirement Savings Plan | Maximum | Flight Attendants and Dispatchers | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, maximum employer contribution percent of the employee’s annual compensation | 6.00% | 6.00% | |||
Employee Retirement Savings Plan | Maximum | Other Employees | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, maximum employer contribution percent of the employee’s annual compensation | 6.00% | ||||
Pilots’ Retirement Savings Plan | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, employer matching contribution, percent of match | 100.00% | ||||
Pilots’ Retirement Savings Plan | Maximum | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, maximum employer contribution percent of the employee’s annual compensation | 9.00% | ||||
Puerto Rico Retirement Savings Plan | Pilots | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, employer matching contribution, percent of match | 100.00% | ||||
Puerto Rico Retirement Savings Plan | Other Employees | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution plan, employer matching contribution, percent of match | 50.00% | ||||
Puerto Rico Retirement Savings Plan | Maximum | Pilots | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, maximum employer contribution percent of the employee’s annual compensation | 9.00% | ||||
Puerto Rico Retirement Savings Plan | Maximum | Other Employees | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined contribution 401(k) plan, maximum employer contribution percent of the employee’s annual compensation | 6.00% |
Income Taxes - Components of th
Income Taxes - Components of the Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 60,079 | $ 21,632 | $ 85,966 |
State and local | 6,322 | 6,702 | 5,389 |
Foreign | 2,034 | 1,235 | 2,057 |
Total current expense | 68,435 | 29,569 | 93,412 |
Deferred: | |||
Federal | 82,455 | 149,583 | 34,240 |
State and local | 3,691 | 6,031 | (122) |
Total deferred expense (benefit) | 86,146 | 155,614 | 34,118 |
Total income tax expense (benefit) | $ 154,581 | $ 185,183 | $ 127,530 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Income Tax Expense | |||
Expected provision at federal statutory tax rate | 35.00% | 35.00% | 35.00% |
State tax expense, net of federal benefit | 1.60% | 1.70% | 1.00% |
Income tax credits | (0.00%) | (0.00%) | (0.40%) |
Other | 0.30% | 0.20% | 0.50% |
Total income tax expense (benefit) | 36.90% | 36.90% | 36.10% |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Deferred revenue | $ 3,057 | $ 3,381 |
Nondeductible accruals | 20,547 | 11,056 |
Deferred manufacturing credits | 910 | 822 |
Accrued maintenance | 1,854 | 830 |
Equity compensation | 3,882 | 4,485 |
Other | 4,026 | 2,751 |
Deferred tax assets | 34,276 | 23,325 |
Deferred tax liabilities: | ||
Capitalized interest | 0 | 286 |
Deferred gain (loss) on leases, net | 2,435 | 2,393 |
Accrued rent | 14,025 | 6,724 |
Prepaid expenses | 1,217 | 2,151 |
Property, plant and equipment | 278,872 | 168,813 |
Deferred financing costs | 5,358 | 0 |
Accrued aircraft and engine maintenance | 40,512 | 64,439 |
Deferred tax liabilities | 342,419 | 244,806 |
Net deferred tax assets (liabilities) | $ (308,143) | $ (221,481) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Excess tax (deficiency) benefit from equity-based compensation | $ (470) | $ 8,850 | $ 1,871 |
Prepaid income taxes | $ 0 | $ 72,278 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Aircraft Operating Leases (Details) | Dec. 31, 2016aircraft |
Long-term Purchase Commitment [Line Items] | |
2,017 | 15 |
2,018 | 14 |
2,019 | 13 |
2,020 | 16 |
2,021 | 18 |
Total future aircraft to be received | 76 |
Airbus | A320 | |
Long-term Purchase Commitment [Line Items] | |
2,017 | 4 |
2,018 | 5 |
2,019 | 1 |
Total future aircraft to be received | 10 |
Airbus | A320NEO | |
Long-term Purchase Commitment [Line Items] | |
2,018 | 4 |
2,019 | 12 |
2,020 | 16 |
2,021 | 18 |
Total future aircraft to be received | 50 |
Airbus | A321 | |
Long-term Purchase Commitment [Line Items] | |
2,017 | 11 |
2,018 | 5 |
Total future aircraft to be received | 16 |
Commitments and Contingencies75
Commitments and Contingencies - Aircraft-Related Commitments and Financing Arrangements (Details) ft² in Thousands, $ in Millions | 1 Months Ended | |||||||
Sep. 30, 2015aft²extension_option | Jul. 31, 2015aircraftseat | Jan. 30, 2017aircraft | Jan. 01, 2017USD ($) | Dec. 31, 2016USD ($)aircraftaircraft_engine | Apr. 27, 2016aircraft | Dec. 31, 2015aircraft | Aug. 31, 2015USD ($)aircraft | |
Hangar Facility | Operating Lease | ||||||||
Principal and Interest Commitments | ||||||||
Area of Land | a | 10 | |||||||
Real estate property (in square feet) | ft² | 126 | |||||||
Operating leases, term | 30 years | |||||||
Number of renewal options | extension_option | 2 | |||||||
Aircraft operating leases, renewal term | 10 years | |||||||
Estimated future project construction costs | $ 7.3 | |||||||
Airbus | ||||||||
Committed Expenditures | ||||||||
Number of delivered aircraft with secured debt financing commitments | aircraft | 29 | |||||||
Secured Debt | ||||||||
Interest Commitments | ||||||||
Interest commitments, 2017 | $ 42.2 | |||||||
Interest commitments, 2018 | 38.2 | |||||||
Interest commitments, 2019 | 34.6 | |||||||
Interest commitments, 2020 | 30.9 | |||||||
Interest commitments, 2021 | 27.4 | |||||||
Interest commitments, 2022 and beyond | 96.8 | |||||||
Aircraft and Related Flight Equipment | ||||||||
Principal and Interest Commitments | ||||||||
Estimated future project construction costs | $ 2.6 | |||||||
Bank Debt | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 3 | |||||||
Enhanced Equipment Trust Certificate and Bank Debt | Secured Debt | ||||||||
Principal and Interest Commitments | ||||||||
Principal and interest commitments, 2017 | $ 10.9 | |||||||
Principal and interest commitments, 2018 | 13 | |||||||
Principal and interest commitments, 2019 | 13.7 | |||||||
Principal and interest commitments, 2020 | 13.2 | |||||||
Principal and interest commitments, 2021 | 13.3 | |||||||
Principal and interest commitments, 2022 and beyond | $ 119.1 | |||||||
2016 | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 4 | |||||||
2016 | Subsequent Event | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 1 | |||||||
2017-2021 | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft without secured financing commitments scheduled for delivery | aircraft | 72 | |||||||
Aircraft and Related Flight Equipment | ||||||||
Committed Expenditures | ||||||||
Committed expenditures, 2017 | $ 660.3 | |||||||
Committed expenditures, 2018 | 649.8 | |||||||
Committed expenditures, 2019 | 678.3 | |||||||
Committed expenditures, 2020 | 824.4 | |||||||
Committed expenditures, 2021 | 777.9 | |||||||
Committed expenditures, 2022 and beyond | 24.6 | |||||||
Face amount, commitment for future issuance | 144.5 | |||||||
Aircraft and Related Flight Equipment | Enhanced Equipment Trust Certificate | ||||||||
Committed Expenditures | ||||||||
Face amount, commitment for future issuance | 38.5 | $ 576.6 | ||||||
Aircraft and Related Flight Equipment | Subsequent Event | ||||||||
Committed Expenditures | ||||||||
Face amount, commitment for future issuance | $ 39 | |||||||
Non-aircraft Related Commitments | ||||||||
Committed Expenditures | ||||||||
Committed expenditures, 2017 | 5.7 | |||||||
Committed expenditures, 2018 | 3.9 | |||||||
Committed expenditures, 2019 | 0.3 | |||||||
Committed expenditures, 2020 | 0.3 | |||||||
Committed expenditures, 2021 | 0.1 | |||||||
Committed expenditures, 2022 and beyond | $ 0 | |||||||
V2500 SelectOne Engine | ||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||
Number of spare aircraft engines ordered | aircraft_engine | 3 | |||||||
PurePower PW1100G-JM Engine | ||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||
Number of spare aircraft engines ordered | aircraft_engine | 9 | |||||||
A320 and A321 | Airbus | ||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||
Number of Aircraft Order Conversions | aircraft | 10 | |||||||
A320 and A321 | Enhanced Equipment Trust Certificate | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 1 | |||||||
A320 | Airbus | ||||||||
Principal and Interest Commitments | ||||||||
Number of aircrafts with increased seating capacity | aircraft | 40 | |||||||
A320 | Airbus | Minimum | ||||||||
Principal and Interest Commitments | ||||||||
Number of seats | seat | 178 | |||||||
A320 | Airbus | Maximum | ||||||||
Principal and Interest Commitments | ||||||||
Number of seats | seat | 182 | |||||||
A320 | Enhanced Equipment Trust Certificate | Airbus | ||||||||
Committed Expenditures | ||||||||
Number of aircraft with secured debt financing commitments scheduled for delivery | aircraft | 3 | |||||||
Number of delivered aircraft with secured debt financing commitments | aircraft | 3 |
Commitments and Contingencies76
Commitments and Contingencies - Employees (Details) $ in Millions | Mar. 31, 2016 | May 31, 2015 | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)employee_groupairport | Dec. 31, 2015USD ($)employee_group |
Concentration Risk [Line Items] | |||||
Number of airports in which company operates | airport | 59 | ||||
Health Insurance Product Line | |||||
Concentration Risk [Line Items] | |||||
Accrued health care claims | $ | $ 5.7 | $ 3.7 | |||
Association of Flight Attendants (AFA-CWA) | |||||
Concentration Risk [Line Items] | |||||
Tentative collective bargaining agreement, contract term | 5 years | ||||
Ratified Collective Bargaining Agreement, Incentive Payment | $ | $ 9.6 | ||||
International Association of Machinists and Aerospace Workers (IAMAW) | |||||
Concentration Risk [Line Items] | |||||
Tentative collective bargaining agreement, contract term | 5 years | ||||
Number of airports in which company operates | airport | 1 | ||||
Unionized employees concentration risk | Number of employees (percent) | |||||
Concentration Risk [Line Items] | |||||
Union-represented employee groups | employee_group | 4 | 4 | |||
Concentration of risk | 73.00% | 73.00% | |||
Unionized employees concentration risk | Number of employees (percent) | Air Line Pilots Association, International (ALPA) | |||||
Concentration Risk [Line Items] | |||||
Concentration of risk | 26.00% | ||||
Unionized employees concentration risk | Number of employees (percent) | Association of Flight Attendants (AFA-CWA) | |||||
Concentration Risk [Line Items] | |||||
Concentration of risk | 42.00% | ||||
Unionized employees concentration risk | Number of employees (percent) | Transport Workers Union (TWU) | |||||
Concentration Risk [Line Items] | |||||
Concentration of risk | 1.00% | ||||
Unionized employees concentration risk | Number of employees (percent) | International Association of Machinists and Aerospace Workers (IAMAW) | |||||
Concentration Risk [Line Items] | |||||
Concentration of risk | 4.00% |
Fair Value Measurements - Long-
Fair Value Measurements - Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | $ 1,012.4 | $ 659.3 |
Senior loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 451.9 | 484.2 |
Junior loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 47.1 | 54.3 |
Equipment Notes, Series A | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 409.8 | 95.8 |
Equipment Notes, Series B | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 103.6 | 25 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 1,033.7 | 652.4 |
Estimate of Fair Value Measurement [Member] | Level 3 | Senior loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 463.9 | 477.8 |
Estimate of Fair Value Measurement [Member] | Level 3 | Junior loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 48.1 | 54.6 |
Estimate of Fair Value Measurement [Member] | Level 2 | Equipment Notes, Series A | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 416 | 94.8 |
Estimate of Fair Value Measurement [Member] | Level 2 | Equipment Notes, Series B | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | $ 105.7 | $ 25.2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring basis - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 700.9 | $ 803.6 |
Short-term investment securities | 100.2 | |
Total assets | 801.1 | 803.6 |
Total liabilities | 0 | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 700.9 | 803.6 |
Short-term investment securities | 100.2 | |
Total assets | 801.1 | 803.6 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term investment securities | 0 | |
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term investment securities | 0 | |
Total assets | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Operating Segments and Relate79
Operating Segments and Related Disclosures - Geographic Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Operating revenue | $ 578,351 | $ 621,329 | $ 584,133 | $ 538,143 | $ 519,846 | $ 574,841 | $ 553,421 | $ 493,355 | $ 2,321,956 | $ 2,141,463 | $ 1,931,580 |
DOT—Domestic | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Operating revenue | 2,136,200 | 1,940,200 | 1,728,800 | ||||||||
DOT—Latin America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Operating revenue | $ 185,800 | $ 201,300 | $ 202,800 |
Operating Segments and Relate80
Operating Segments and Related Disclosures - Foreign Revenues (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total passenger revenue | Any individual foreign country | |||
Concentration Risk [Line Items] | |||
Concentration of risk (not greater than) | 4.00% | 4.00% | 4.00% |
Quarterly Financial Data (Una81
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Operating revenue | $ 578,351 | $ 621,329 | $ 584,133 | $ 538,143 | $ 519,846 | $ 574,841 | $ 553,421 | $ 493,355 | $ 2,321,956 | $ 2,141,463 | $ 1,931,580 |
Operating income | 85,311 | 135,216 | 121,835 | 101,299 | 120,337 | 157,219 | 122,315 | 109,251 | 443,661 | 509,122 | 355,263 |
Net income | $ 48,493 | $ 81,382 | $ 73,084 | $ 61,920 | $ 74,400 | $ 97,114 | $ 76,704 | $ 69,002 | $ 264,879 | $ 317,220 | $ 225,464 |
Basic earnings per share (in dollars per share) | $ 0.70 | $ 1.17 | $ 1.03 | $ 0.87 | $ 1.04 | $ 1.35 | $ 1.06 | $ 0.94 | $ 3.77 | $ 4.39 | $ 3.10 |
Diluted earnings per share (in dollars per share) | $ 0.70 | $ 1.17 | $ 1.03 | $ 0.86 | $ 1.04 | $ 1.35 | $ 1.05 | $ 0.94 | $ 3.76 | $ 4.38 | $ 3.08 |