Frontier Airlines 2004 Annual Report Download - page 32

(1) During the fourth quarter of 1999, we decided to return our entire fleet of leased Jetstream 31 turboprop aircraft and dispose of related inventory and equipment. We continued to
use the aircraft to fly routes under the US Airways turboprop pro - rate code - share agreement through December 2000. Certain routes were replaced with Saab 340 aircraft and the remaining
routes were discontinued. Pursuant to the lease agreements, we were obligated to return the aircraft to the lessor in the same condition that the aircraft were delivered; therefore, we recorded a
liability of $2.6 million for the estimated aircraft return costs in 1999.
In addition, a non - cash impairment loss of $4.0 million was recorded in 1999 to reduce the carrying amount of assets to be disposed of to estimated fair value, less costs to sell, or net
realizable value.
(2) During the fourth quarter of 2001, we decided to exit the turboprop business, return our entire fleet of leased Saab 340 aircraft and dispose of related inventory and equipment. New
leases (between the lessor and Shuttle America) were obtained for 21 aircraft, of which leases for three aircraft expired in January 2004. We recorded impairment losses and accrued aircraft
return cost of $8.1, $3.8 and $10.2 million in 2001, 2002 and 2003, respectively. As of December 31, 2004, we maintained a reserve of $6.0 million with respect to such losses which we
believe is adequate to cover our exposure for additional losses. These calculations are further described in Management's Discussion and Analysis of Financial Condition and Results of
Operations.
(3) Preferred stock dividends represent dividends on 16.295828 shares of Series A redeemable preferred stock at a par value of $.01 per share issued by Chautauqua to an affiliate of
our majority stockholder. The preferred stockholder is entitled to receive cumulative dividends equal to 10% per annum of the stated value of the preferred stock. The preferred stock, including
accrued and unpaid dividends, was purchased and retired during 2003.
(4) On June 4, 2002, our board of directors declared a 200,000:1 stock split. All per share amounts, number of shares and options outstanding in the consolidated financial statements
have been adjusted for the stock split.
(5) Revenue passengers multiplied by miles flown.
(6) Passenger seats available multiplied by miles flown.
(7) Revenue passenger miles divided by available seat miles.
(8) Total airline operating revenues divided by available seat miles.
(9) Total operating and interest expenses divided by available seat miles. Total operating and interest expenses is not a calculation based on generally accepted accounting principles and
should not be considered as an alternative to total operating expenses. Cost per available seat mile utilizing this measurement is included as it is a measurement recognized by the investing public.
(10) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles
and should not be considered as an alternative to net income (loss) or operating income (loss) as indicators of our financial performance or to cash flow as a measure of liquidity. In addition, our
calculations may not be comparable to other similarly titled measures of other companies. EBITDA is included as a supplemental disclosure because it may provide useful information regarding
our ability to service debt and lease payments and to fund capital expenditures. Our ability to service debt and lease payments and to fund capital expenditures in the future, however, may be
affected by other operating or legal requirements or uncertainties. Currently, aircraft and engine ownership costs are our most significant cash expenditure. In addition, EBITDA is a well
recognized performance measurement in the regional airline industry and, consequently, we have provided this information.
The following represents a reconciliation of EBITDA to net cash from operating activities for the periods indicated (dollars in thousands):
As of December 31,
2004
2003
2002
2001
2000
(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents
$
46,220
$
21,535
$
3,399
$
3,272
$
389
Aircraft and other equipment, net
983,181
547,717
298,536
133,810
25,529
Total assets
1,168,108
661,921
390,201
204,802
72,601
Long - term debt, including current maturities
850,186
482,667
278,581
131,350
32,885
Redeemable preferred stock
of subsidiary
at redemption value
—
—
5,160
4,747
4,329
Total stockholders' equity
169,969
65,755
30,075
9,792
4,053
Years Ended December 31,
2004
2003
2002
2001
2000
EBITDA
$
135,509
$
101,817
$
52,470
$
24,837
$
13,124
Interest expense
(28,109
)
(22,052
)
(12,044
)
(6,227
)
(3,550
)
Debt issue and other amortization
757
Warrant amortization
800
359
9
(Gain) loss on aircraft and other equipment disposals
261
865
67
(460
)
(31
)
Impairment loss and accrued aircraft return costs
10,160
3,800
8,100
Allowance for note receivable from affiliate
2,113
4,900
Amortization of deferred credits
(1,285
)
(1,249
)
(1,132
)
(889
)
(278
)
Unrealized loss on fuel swaps
202
(841
)
Stock compensation expense
214
214
213
90
Current income tax expense (benefit)
(520
)
(237
)
4,485
(6,659
)
(776
)
Changes in certain assets and liabilities:
Receivables
4,212
(4,952
)
1,654
896
(884
)
Inventories
(3,115
)
(367
)
698
579
(1,597
)
Prepaid expenses and other current assets
(1,036
)
868
(985
)
(368
)
(373
)
Accounts payable
1,402
(1,903
)
933
1,490
2,512
Accrued liabilities
9,535
9,325
(1,479
)
10,826
7,164
Other assets
(2,419
)
(1,900
)
(2,732
)
(9,461
)
(7,760
)
Net cash from operating activities
$
116,206
$
93,061
$
50,857
$
22,956
$
6,710