Spirit Airlines 2011 Annual Report Download - page 69

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Net Cash Provided By Financing Activities. During 2011, we received $150.0 million in proceeds, net of underwriting fees, transaction
costs and our repayment of $20.6 million of shareholder debt of which $2.3 million was paid in kind interest and included in operating activities.
Remaining shareholder debt was exchanged for newly issued shares of our common stock. In addition, we received $4.5 million in proceeds
from the sale of one engine as part of a sale leaseback transaction.
Commitments and Contractual Obligations
The following table discloses aggregate information about our contractual obligations as of December 31, 2011 and the periods in which
payments are due (in millions):
(1) Does not include contractual payments to the Pre-IPO Stockholders under the Tax Receivable Agreement (estimated to
be approximately $36.5 million as of December 31, 2011). Please see “—Our Income Taxes.”
Off-Balance Sheet Arrangements
We have significant obligations for aircraft as all 37 of our aircraft in service at December 31, 2011 were acquired under operating leases
and therefore are not reflected on our balance sheet. These leases expire between 2017 and 2023. Aircraft rent payments were $116.6 million and
$103.4 million, for 2011 and 2010, respectively. Our aircraft lease payments for 32 of our aircraft are fixed rate obligations. Five of our leases
provide for variable rent payments, which fluctuate based on changes in LIBOR (London Interbank Offered Rate).
Our contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing
companies. As of December 31, 2011, firm aircraft orders consisted of 106 A320 family aircraft (61 of the existing aircraft model A320s and 45
A320 NEOs) with Airbus and five spare V2500 IAE International Aero Engines AG engines. Aircraft are scheduled for delivery in the period of
2012 through 2021, and spare engines are scheduled for delivery from 2012 through 2018. Committed expenditures for these aircraft and related
flight equipment, including estimated amounts for contractual price escalations and pre-delivery payments, will be approximately $304 million
in 2012 , $325 million in 2013 , $348 million in 2014 , $520 million in 2015 , $510 million in 2016 and $3 billion in 2017 and beyond .
The Company has a line of credit for $8.6 million and $3.6 million related to corporate credit cards, of which the Company had drawn
$2.4
million and $2.5 million as of December 31, 2011 and December 31, 2010 , respectively. The undrawn portion represents an off-balance sheet
arrangement.
In addition, the Company has undrawn lines of credit with two counterparties to its jet fuel derivatives in the amount of $8.0 million and
$1.0 million as of December 31, 2011 and 2010 respectively. The Company is required to post collateral for any excess above the line of credit if
the derivatives are in a net liability position. The undrawn portion represents an off-balance sheet arrangement.
As of December 31, 2011 the Company had a $10 million unsecured standby letter of credit facility of which $7.1 million had been drawn
upon for issued letters of credit. This facility represents an off-balance sheet arrangement.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk-Sensitive Instruments and Positions
We are subject to certain market risks, including commodity prices (specifically aircraft fuel). The adverse effects of changes in these
markets could pose a potential loss as discussed below. The sensitivity analysis provided below does not consider the effects that such adverse
changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes.
Actual results may differ.
Aircraft Fuel . Our results of operations can vary materially due to changes in the price and availability of aircraft fuel. Aircraft fuel
expense for the years ended December 31, 2011 , 2010 and 2009 represented approximately 41.9% , 34.8% and 30.8% of our operating
expenses. Increases in aircraft fuel prices or a shortage of supply could have a material adverse effect on our operations and operating results.
We source a significant portion of our fuel from refining resources located in the
61
2012
2013 - 2014
2015 - 2016
2017 and
beyond
Total
Operating lease obligations
$
147
$
302
$
295
$
450
$
1,194
Flight equipment purchase obligations
304
672
1,031
2,955
4,962
Total future payments on contractual obligations
(1)
$
451
$
974
$
1,326
$
3,405
$
6,156