Exhibit 99.01
[LOGO OF FRONTIER]
FRONTIER AIRLINES, INC.
CONTACT Frontier Center One
Joe Hodas 7001 Tower Road
Frontier Airlines Denver, CO 80249
NEWS 720-374-4504 P 720.374.4200 F 720.374.4375
FOR IMMEDIATE RELEASE jhodas@flyfrontier.com frontierairlines.com
FRONTIER AIRLINES REPORTS FISCAL THIRD QUARTER 2006 RESULTS
DENVER (January 26, 2006) - Frontier Airlines, Inc. (Nasdaq: FRNT) today
reported a net loss of $10.3 million, or $0.28 cents per diluted common share,
for the airline's third fiscal quarter ended December 31, 2005 compared to a net
loss of $11.1 million, or $0.31 cents per diluted common share, for the same
period last year. Included in the net loss for the three months ended December
31, 2005 were the following items before the effect of income taxes: unrealized
losses on fuel hedges of $1.5 million and gains of $0.3 million related
primarily to the sale of Boeing parts held for sale. These items, net of income
taxes, increased Frontier's net loss by $.03 cents per diluted common share.
Included in the net loss for the quarter ended December 31, 2004 were the
following items before the effect of income taxes: a gain on the sale of assets
of $0.1 million, a write down of $0.7 million of the carrying value of
expendable Boeing 737 inventory, and an unrealized loss on fuel derivative
hedges of $3.2 million. These items, net of income taxes, increased Frontier's
net loss by $.07 cents per diluted common share.
CHIEF EXECUTIVE OFFICER'S COMMENTS
Frontier President and CEO Jeff Potter said, "While this quarter's results are
in stark contrast with the previous quarter's profits, we once again saw several
promising indicators. Our mainline passenger revenue increased almost 20 percent
as we carried 14 percent more passengers on capacity growth of only nine
percent. In addition, our year-over-year mainline average fare improved for the
fourth straight quarter, increasing almost two percent on a year-over-year
basis. However, the resulting nine percent increase in mainline revenue per
available seat mile (RASM), was overshadowed by three significant aberrations to
our fiscal performance--a 35 percent year-over-year increase in fuel cost per
gallon; an estimated $4.8 million in lost revenue due to the disruption of our
Cancun and Cozumel service as a result of Hurricane Wilma; and an estimated $1.2
million in lost revenue due to the discontinuation of service to New Orleans as
a result of Hurricane Katrina."
"Outside of the significant fiscal impact of fuel and hurricanes, we did have
several operational bright spots during the quarter including a number of
record-breaking load factor days during the December holiday period. It has
taken our company and all of our employees several years of hard work and effort
to become the preferred carrier for an ever-increasing number of travelers in
Denver, and we don't intend to cede that position. We have built our product to
be the best in the industry and with our fares being on equal footing in the
Denver market, we have every confidence that customers will continue to choose
the superior product that offers them the greatest value, which is Frontier."
OPERATING HIGHLIGHTS
Mainline passenger revenue increased 19.4 percent as mainline revenue passenger
miles (RPMs) grew at a rate of 9.2 percent during the fiscal third quarter,
while mainline capacity growth as measured by mainline available seat miles
(ASMs) increased 8.6 percent from the same quarter last year. As a result, the
airline's mainline load factor was 72.1 percent for its fiscal third quarter of
2006, 0.4 load factor points more than the airline's mainline load factor of
71.7 percent during the same quarter last year. The airline's mainline breakeven
load factor, excluding special items, for the fiscal third quarter 2006
decreased 1.3 load factor points from 76.0 percent to 74.7 percent. Frontier's
mainline breakeven load factor, excluding special items, decreased from the
prior comparable period as a result of an increase in our total mainline RASM of
10.3 percent, which was significantly offset by an increase in our mainline cost
per available seat mile (CASM) to 9.32 cents during the quarter ended December
31, 2005, primarily due to increases in fuel costs, from 8.80 cents during the
quarter ended December 31, 2004, a 5.9 percent increase.
During the fiscal third quarter 2006, the airline's mainline passenger RASM
increased 9.2 percent to 8.68 cents from the same quarter last year. The
increase in mainline RASM was due to the combination of the 8.5 percent increase
in mainline yield per RPM and slightly improved year-over-year load factor.
Mainline average length of haul decreased 4.1 percent on a year-over-year basis,
primarily because the prior year included traffic from the Company's focus city,
Los Angeles, which the Company subsequently discontinued.
Mainline fuel cost per gallon, excluding unrealized hedging losses, averaged
$2.17 during the quarter ended December 31, 2005, compared to an average of
$1.55 during the quarter ended December 31, 2004, an increase of 40 percent.
Senior Vice President and Chief Financial Officer Paul Tate discussed unit costs
for the airline's quarter ended December 31, 2005, stating, "Even with our more
traditional hub and spoke model, we achieved a four percent decline in
year-over-year CASM excluding fuel, to 6.17 cents from 6.43 cents, further
strengthening our position as one of the industry's low cost producers. This
cost savings was achieved despite a nine percent year-over-year mainline
passenger unit revenue increase and a four percent length of haul decrease."
The airline's current unrestricted cash and short-term investments and working
capital as of December 31, 2005 was $222.7 million and $113.9 million,
respectively. This compares to the Company's unrestricted cash and short-term
investments and working capital for the same period last year of $149.0 million
and $55.9 million, respectively.
The airline's fleet in service on December 31, 2005 consisted of 16 owned Airbus
A319 and A318 aircraft and 33 leased Airbus A319 and A318 aircraft.
BUSINESS DEVELOPMENTS DURING THE QUARTER INCLUDED:
o Closed a $92 million convertible debt offering.
o Frontier's maintenance personnel ratified a three-year contract.
o Added Acapulco and Cozumel to Frontier's Mexico service, bringing the
total number of Mexico cities served to seven.
o Received approval to serve Cancun with non-stop service from
Indianapolis beginning in March 2006.
o Ranked number one in "On Time Arrival Performance" among all carriers at
the 33 largest airports in America for the month of September and in the
top five for on time arrival performance for four consecutive months.
o Hired Chris Collins as new Senior Vice President of Operations.
o Renewed contract with Intrawest Colorado to be the "Official and
Exclusive Airline of Winter Park and Copper Mountain."
o Expanded service to five of Frontier's top markets, including Salt Lake
City, Dallas, Phoenix, Las Vegas and Chicago-Midway.
o Received prestigious "Outstanding Corporation" award from Volunteers of
America, recognizing Frontier's significant community contributions.
Potter concluded, "As we enter the final quarter of our fiscal year, we have
several challenges, principally in the form of record high fuel prices. However,
we have an even greater number of opportunities in front of us. Specifically, we
have announced our intention to enter the Canadian market. We will receive the
first of six new aircraft deliveries for the calendar year that will provide the
capacity for significant expansion with new frequencies and destinations. While
we recognize that the increased competition in our hometown market of Denver
will generate new pressures, we face that competition with the confidence that
comes from knowing that we have a product that is second to none, a continued
company-wide focus on cost containment that is yielding results, and an employee
group that will accept nothing less than the very best from one another and from
this company.
"In light of our positive momentum, and assuming fuel remains at an average of
$2 per gallon, we anticipate that our coming quarter will produce better
earnings results than last year's March quarter, with results expected to be
approximately break-even."
Senior leadership will host a conference call to discuss Frontier's quarterly
earnings on January 27, 2006, at 9:00 a.m. Mountain Standard Time. The call is
available via the World Wide Web on the airline's Web site at
www.frontierairlines.com or using the following URL:
http://www.vcall.com/IC/CEPage.asp?ID=99836.
Currently in its 12th year of operations, Denver-based Frontier Airlines is the
second largest jet service carrier at Denver International Airport, employing
approximately 4,600 aviation professionals. With 49 aircraft and the youngest
Airbus fleet in North America, Frontier offers 24 channels of DIRECTV(R) service
in every seatback along with 33 inches of legroom in an all coach configuration.
In conjunction with Frontier JetExpress operated by Horizon Air, Frontier
operates routes linking its Denver hub to 47 destinations in 28 states spanning
the nation from coast to coast and to seven cities in Mexico. Frontier's
maintenance and engineering department has received the Federal Aviation
Administration's highest award, the Diamond Certificate of Excellence, in
recognition of 100 percent of its maintenance and engineering employees
completing advanced aircraft maintenance training programs, for seven
consecutive years. In July 2005, Frontier ranked as one of the "Top 10 Domestic
Airlines" as determined by readers of Travel & Leisure magazine. Frontier
provides capacity information and other operating statistics on its Web site,
which may be viewed at www.frontierairlines.com.
LEGAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this press release that are not historical facts may be
considered forward-looking statements as that item is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties that could cause actual results to
differ materially from these forward looking statements. Many of these risks and
uncertainties cannot be predicted with accuracy and some might not even be
anticipated. Some of the factors that could significantly impact the
forward-looking statements in this press release include, but are not limited
to: the timing of, and expense associated with, expansion and modification of
our operations in accordance with our business strategy or in response to
competitive pressures or other factors; failure of our new markets to perform as
anticipated; the inability to achieve a level of revenue through fares
sufficient to obtain profitability due to competition from other air carriers
and excess capacity in the markets we serve; the inability to obtain sufficient
gates at Denver International Airport to accommodate the expansion of our
operations; general economic factors and behavior of the fare-paying public and
its potential impact on our liquidity; terrorist attacks or other incidents that
could cause the public to question the safety and/or efficiency of air travel;
hurricanes and their impact on oil production; operational disruptions,
including weather; industry consolidation; the impact of labor disputes;
enhanced security requirements; changes in the government's policy regarding
relief or assistance to the airline industry; the economic environment of the
airline industry generally; increased federal scrutiny of low-fare carriers
generally that may increase our operating costs or otherwise adversely affect
us; actions of competing airlines, such as increasing capacity and pricing
actions of United Airlines, Southwest Airlines, and other competitors,
particularly in some of our Mexico destinations due to the increase in the
number of domestic airlines authorized to serve Mexico markets from the U.S.
under recent changes to the bilateral agreement in place between the two
countries; the availability of suitable aircraft, which may inhibit our ability
to achieve operating economies and implement our business strategy; the
unavailability of, or inability to secure upon acceptable terms, debt or
operating lease financing necessary to acquire aircraft which we have ordered;
uncertainties regarding aviation fuel prices, and various risk factors to our
business discussed in our reports filed with the Securities and Exchange
Commission. Any forward-looking statement is qualified by reference to these
risks and factors. These risks and factors are not exclusive, and the Company
undertakes no obligation to publicly update or revise any forward-looking
statements to reflect events or circumstances that may arise after the date of
this press release. Additional information regarding these and other factors may
be contained in the Company's SEC filings, including without limitation, the
Company's Form 10-K for its fiscal year ended March 31, 2005 and a Form 8-K
filed on November 29, 2005. The Company's filings are available from the
Securities and Exchange Commission or may be obtained through the Company's
website, www.frontierairlines.com.
-Financial Tables To Follow-
FRONTIER AIRLINES, INC.
SELECTED BALANCE SHEET DATA
(unaudited)
DECEMBER 31, DECEMBER 31,
2005 2004
------------- -------------
BALANCE SHEET DATA (IN THOUSANDS):
Cash, cash equivalents and
short-term investments $ 222,680 $ 148,989
Current assets 346,151 239,441
Total assets 916,986 750,021
Current liabilities 232,238 183,535
Long-term debt 410,866 287,153
Total liabilities 681,069 509,148
Stockholders' equity 235,917 240,873
Working capital 113,913 55,906
FRONTIER AIRLINES, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31, 2005 AND 2004
(unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ ------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Revenues:
Passenger - mainline $ 217,812,040 $ 182,360,545 655,276,441 $ 539,971,428
Passenger - regional partner 23,489,827 21,582,231 69,834,655 62,618,444
Cargo 1,461,832 1,188,514 4,053,577 3,862,018
Other 4,198,861 3,106,181 12,631,427 8,643,425
------------- ------------- ------------- -------------
Total revenues 246,962,560 208,237,471 741,796,100 615,095,315
------------- ------------- ------------- -------------
Operating expenses:
Flight operations 35,187,555 32,545,417 104,097,155 96,107,230
Aircraft fuel 77,649,123 53,806,536 208,391,165 138,524,787
Aircraft lease 23,370,956 23,034,636 70,273,868 64,232,862
Aircraft and traffic servicing 35,183,456 32,287,621 101,050,337 95,208,836
Maintenance 18,487,070 19,170,439 57,015,422 57,326,354
Promotion and sales 19,851,722 18,738,362 60,368,849 57,827,342
General and administrative 12,481,000 12,827,674 36,802,629 35,155,449
Operating expenses - regional
partner 29,143,742 24,012,344 79,569,264 68,874,118
Aircraft lease and facility exit costs -- -- 3,364,515 --
(Gains) losses on sales of assets, net (273,565) (119,565) (964,742) 484,666
Impairments -- 658,424 -- 5,259,624
Depreciation 7,545,117 6,559,021 21,079,516 19,783,602
------------- ------------- ------------- -------------
Total operating expenses 258,626,176 223,520,909 741,047,978 638,784,870
------------- ------------- ------------- -------------
Operating income (11,663,616) (15,283,438) 748,122 (23,689,555)
------------- ------------- ------------- -------------
Nonoperating income (expense):
Interest income 2,559,727 1,049,917 5,835,209 2,406,186
Interest expense (5,709,068) (3,384,302) (14,870,882) (9,405,161)
Other, net (53,016) 341,287 (203,441) 172,570
------------- ------------- ------------- -------------
Total nonoperating income (expense), net (3,202,357) (1,993,098) (9,239,114) (6,826,405)
------------- ------------- ------------- -------------
Loss before income tax expense (14,865,973) (17,276,536) (8,490,992) (30,515,960)
Income tax benefit (4,575,753) (6,218,492) (2,372,376) (10,802,228)
------------- ------------- ------------- -------------
Net loss $ (10,290,220) $ (11,058,044) $ (6,118,616) $ (19,713,732)
============= ============= ============= =============
Loss per share:
Basic and diluted $ (0.28) $ (0.31) $ (0.17) $ (0.55)
============= ============= ============= =============
Weighted average shares of common stock outstanding:
Basic and diluted 36,187,528 35,623,885 36,127,533 35,612,440
============= ============= ============= =============
FRONTIER AIRLINES, INC.
COMPARATIVE OPERATING STATISTICS
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
------------------------ ------------------------
2005 2004 CHANGE 2005 2004 CHANGE
---------- ---------- ---------- ---------- ---------- ----------
SELECTED OPERATING DATA - MAINLINE:
Passenger revenue (000s) $ 217,812 $ 182,361 19.4% $ 655,276 $ 539,971 21.4%
Revenue passengers carried (000s) 1,872 1,644 13.9% 5,784 4,978 16.2%
Revenue passenger miles (RPMs) (000s) 1,774,114 1,625,146 9.2% 5,555,093 4,928,415 12.7%
Available seat miles (ASMs)(000s) 2,461,668 2,267,686 8.6% 7,326,080 6,862,911 6.7%
Passenger load factor 72.1% 71.7% 0.4 pts. 75.8% 71.8% 4.0 pts.
Break-even load factor(1) 74.7% 76.0% (1.3)pts. 75.2% 74.4% 0.8 pts.
Block hours 50,968 45,725 11.5% 149,323 136,786 9.2%
Departures 20,835 18,136 14.9% 61,338 54,723 12.1%
Average seats per departure 129.4 129.9 (0.4)% 129.4 130.2 (0.6)%
Average stage length 913 963 (5.2)% 923 963 (4.2)%
Average length of haul 948 989 (4.1)% 960 990 (3.0)%
Average daily block hour utilization 11.3 10.7 5.6% 11.4 11.2 1.8%
Yield per RPM (cents) (2), (3) 12.04 11.10 8.5% 11.65 10.87 7.2%
Total yield per RPM (cents) (3) 12.60 11.49 9.7% 12.10 11.21 7.9%
Yield per ASM (cents) (3) 8.68 7.95 9.2% 8.84 7.81 13.2%
Total yield per ASM (cents) 9.08 8.23 10.3% 9.17 8.05 13.9%
Cost per ASM (cents) 9.32 8.80 5.9% 9.03 8.30 8.8%
Fuel expense per ASM (cents) 3.15 2.37 32.9% 2.84 2.02 40.6%
Cost per ASM excluding fuel (cents) (4) 6.17 6.43 (4.0)% 6.19 6.28 (1.4)%
Average fare $ 104.72 $ 102.92 1.7% $ 103.42 $ 101.14 2.3%
Average aircraft in service 49.0 46.4 5.6% 47.8 44.4 7.7%
Aircraft in service at end of period 49.0 46.0 6.5% 49.0 46.0 6.5%
Average age of aircraft at end of period 2.4 2.8 (14.3)% 2.4 2.8 (14.3)%
Average fuel cost per gallon $ 2.21 $ 1.64 34.8% $ 1.98 $ 1.39 42.4%
Fuel gallons consumed (000's) 35,076 32,725 7.2% 105,329 99,483 5.9%
FRONTIER AIRLINES, INC.
COMPARATIVE OPERATING STATISTICS,
CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
------------------------ ------------------------
2005 2004 CHANGE 2005 2004 CHANGE
------------------------ ---------- ---------- ---------- ----------
SELECTED OPERATING DATA - REGIONAL PARTNER:
Passenger revenue (000s) $ 23,490 $ 21,582 8.8% $ 69,835 $ 62,618 11.5%
Revenue passengers carried (000s) 228 221 3.2% 695 657 5.8%
Revenue passenger miles (RPMs) (000s) 156,565 129,301 21.1% 442,278 403,012 9.7%
Available seat miles (ASMs) (000s) 215,077 185,673 15.8% 608,194 554,022 9.8%
Passenger load factor 72.8% 69.6% 3.2 pts 72.7% 72.7% -
Yield per RPM (cents)(2) 15.00 16.69 (10.1)% 15.79 15.54 1.6%
Yield per ASM (cents) 10.92 11.62 (6.0)% 11.48 11.30 1.6%
Cost per ASM (cents) 13.55 12.93 4.8% 13.08 12.43 5.2%
Average fare $ 103.13 $ 97.51 5.8% $ 100.54 $ 95.24 5.6%
Aircraft in service at end of period 9 9 - 9 9 -
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
------------------------ ------------------------
2005 2004 CHANGE 2005 2004 CHANGE
------------------------ ---------- ---------- ---------- ----------
SELECTED OPERATING DATA - COMBINED:
Passenger revenue (000s) $ 241,302 $ 203,943 18.3% $ 725,111 $ 602,589 20.3%
Revenue passengers carried (000s) 2,100 1,865 12.6% 6,479 5,635 15.0%
Revenue passenger miles (RPMs) (000s) 1,930,679 1,754,447 10.0% 5,997,371 5,331,427 12.5%
Available seat miles (ASMs) (000s) 2,676,745 2,453,359 9.1% 7,934,274 7,416,933 7.0%
Passenger load factor 72.1% 71.5% 0.6 pts. 75.6% 71.9% 3.7 pts.
Yield per RPM (cents) (2) 12.28 11.51 6.7% 11.96 11.23 6.5%
Total yield per RPM (cents) (3) 12.79 11.87 7.8% 12.37 11.54 7.2%
Yield per ASM (cents) 8.86 8.23 7.7% 9.04 8.07 12.0%
Total yield per ASM (cents) 9.23 8.49 8.7% 9.35 8.29 12.8%
Cost per ASM (cents) 9.66 9.11 6.0% 9.34 8.61 8.5%
1. "Break-even load factor" is the passenger load factor that will result in
operating revenues being equal to operating expenses, net of certain
adjustments, assuming constant yield per RPM and no change in ASMs.
Break-even load factor as presented above may be deemed a non-GAAP financial
measure under regulations issued by the Securities and Exchange Commission.
We believe that presentation of break-even load factor calculated after
certain adjustments is useful to investors because the elimination of
special or unusual items allows a meaningful period-to-period comparison.
Furthermore, in preparing operating plans and forecasts we rely on an
analysis of break-even load factor exclusive of these special and unusual
items. Our presentation of non-GAAP results should not be viewed as a
substitute for our financial or statistical results based on GAAP, and other
airlines may not necessarily compute break-even load factor in a manner that
is consistent with our computation.
A reconciliation of the components of the calculation of the mainline break-even
load factor is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
---------------------- ----------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(In thousands) (In thousands)
Net loss $ 10,290 $ 11,058 $ 6,119 $ 19,714
Income tax benefit 4,576 6,218 2,372 10,802
Passenger revenue 217,812 182,361 655,276 539,971
Revenue - regional partner 23,490 21,582 69,835 62,618
Charter revenue (4,251) (2,006) (7,959) (4,045)
Operating expenses - regional partner (29,144) (24,012) (79,569) (68,874)
--------- --------- --------- ---------
Passenger revenue - mainline (excluding
charter and regional partner revenue)
required to break even (based on GAAP
amounts) $ 222,773 $ 195,201 $ 646,074 $ 560,186
Non-GAAP adjustments:
Aircraft and facility lease exit costs - - (3,365) -
Gain (losses) on sales of assets 274 120 965 (485)
Impairment and other related charges - (658) - (5,260)
Unrealized derivative gain (1,529) (3,202) (2,254) 432
--------- --------- --------- ---------
Passenger revenue- mainline (excluding charter
and regional partner revenue) required to break-even
(based on adjusted amounts) $ 221,518 $ 191,461 $ 641,420 $ 554,873
========= ========= ========= =========
THE CALCULATION OF THE BREAK-EVEN LOAD FACTOR FOLLOWS:
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
---------------------- ----------------------
2005 2004 2005 2004
--------- --------- --------- ---------
CALCULATION OF MAINLINE BREAK-EVEN LOAD FACTOR USING
GAAP AMOUNTS:
Passenger revenue - mainline (excluding
charter and regional partner revenue)
required to break even (based on GAAP
amounts) ($000s) $ 222,773 $ 195,201 $ 646,074 $ 560,186
Mainline yield per RPM (cents) 12.04 11.10 11.65 10.87
--------- --------- --------- ---------
Mainline revenue passenger miles (000s) to
break even assuming constant yield per RPM 1,850,274 1,758,568 5,545,700 5,153,505
--------- --------- --------- ---------
Mainline available seat miles (000's) 2,461,668 2,267,686 7,326,080 6,862,911
========= ========= ========= =========
Mainline break-even load factor using GAAP amounts 75.2% 77.6% 75.7% 75.1%
========= ========= ========= =========
CALCULATION OF MAINLINE BREAK-EVEN LOAD FACTOR USING
NON-GAAP AMOUNTS:
Passenger revenue (excluding charter and
regional partner revenue) required
to break even (based on adjusted
amounts) ($000s) $ 221,518 $ 191,461 $ 641,420 $ 554,873
Mainline yield per RPM (cents) 12.04 11.10 11.65 10.87
--------- --------- --------- ---------
Mainline revenue passenger miles (000s) to
break even assuming constant yield per RPM 1,839,851 1,724,139 5,505,751 5,102,653
--------- --------- --------- ---------
Mainline available seat miles (000's) 2,461,668 2,267,686 7,326,080 6,862,911
========= ========= ========= =========
Mainline break-even load factor using non-GAAP amounts 74.7% 76.0% 75.2% 74.4%
========= ========= ========= =========
Difference 0.5% 1.6% 0.5% 0.7%
2. "Yield per RPM" is determined by dividing passenger revenues (excluding
charter revenue) by revenue passenger miles.
3. For purposes of these yield calculations, charter revenue is excluded from
passenger revenue. These figures may be deemed non-GAAP financial measures
under regulations issued by the Securities and Exchange Commission. We
believe that presentation of yield excluding charter revenue is useful to
investors because charter flights are not included in RPMs or ASMs.
Furthermore, in preparing operating plans and forecasts, we rely on an
analysis of yield exclusive of charter revenue. Our presentation of non-GAAP
financial measures should not be viewed as a substitute for our financial or
statistical results based on GAAP. The calculation of passenger revenue
excluding charter revenue is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
---------------------- ----------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Passenger revenues - mainline, as reported $ 217,812 $ 182,361 $ 655,276 $ 539,971
Less: charter revenue 4,251 2,006 7,959 4,045
--------- --------- --------- ---------
Passenger revenues - mainline excluding charter 213,561 180,355 647,317 535,926
Add: Passenger revenues - regional partner 23,490 21,582 69,835 62,618
--------- --------- --------- ---------
Passenger revenues, system combined $ 237,051 $ 201,937 $ 717,152 $ 598,544
========= ========= ========= =========
4. This may be deemed a non-GAAP financial measure under regulations issued by
the Securities and Exchange Commission. We believe the presentation of
financial information excluding fuel expense is useful to investors because
we believe that fuel expense tends to fluctuate more than other operating
expenses, it facilitates comparison of results of operations between current
and past periods and enables investors to better forecast future trends in
our operations. Furthermore, in preparing operating plans and forecasts, we
rely, in part, on trends in our historical results of operations excluding
fuel expense. However, our presentation of non-GAAP financial measures
should not be viewed as a substitute for our financial results determined in
accordance with GAAP.