Spirit Airlines 2013 Annual Report Download - page 80

Notes to Financial Statements—(Continued)
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During 2013, the Company recorded a foreign tax credit of $0.4 million against its 2013 federal income tax liability
which was fully utilized during the year. Previously the Company deducted income taxes paid in foreign countries in arriving at
federal taxable income.
On September 13, 2013, the United States Treasury and Internal Revenue Service issued final tangible personal property
regulations that broadly apply to amounts paid to acquire, produce or improve tangible property, as well as dispositions of such
property. In review of these regulations, the Company has concluded that there is no material impact on its financial position,
results of operations or cash flows.
On January 25, 2012, the Company experienced a subsequent ownership change under the principles of IRC §382, as a
result of the secondary offering outlined in more detail in Note 3. Although the Company was subject to the limitations of IRC
§382 on the utilization of its NOL and the tax credit carryforwards in 2012, the limitation was sufficiently in excess of the tax
attribute carryforwards as not to prohibit complete utilization during the year.
The Company accrues interest related to unrecognized tax benefits in its provision for income taxes, and any associated
penalties are recorded in selling, general and administrative expenses.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company's
tax years from 2006 through 2012 are still subject to examination in the United States due to net operating loss carryovers
generated in such years. Various state and foreign jurisdiction tax years remain open to examination and the Company was
under examination in certain jurisdictions during 2012, and the outcome of these audits were immaterial to the financial
statements. The Company believes that the effect of any additional assessment(s) will be immaterial to its financial statements.
15. 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. On June 20, 2013, the Company entered into an amendment to the Airbus A320
Family Purchase Agreement, by and between the Company and Airbus S.A.A., dated May 5, 2004 (Airbus Amendment) for the
order of an additional 20 Airbus A321 aircraft. These aircraft are in addition to the 92 aircraft not yet delivered under Spirit's
existing order with Airbus. In addition, the Company is committed to take delivery of an additional five aircraft directly from a
third-party lessor. During the year, the Company converted ten Airbus A320 orders to Airbus A321 orders and converted five
Airbus A321 orders to Airbus A321neo orders. On October 1, 2013, the Company entered into agreements with International
Aero Engines AG (IAE) and Pratt & Whitney (collectively, the IAE & P&W Agreement) for the provision and servicing of
engines to power its fleet of Airbus A320 family aircraft.
As of December 31, 2013, the Company's aircraft orders consisted of the following:
Airbus Third-Party
Lessor
A320 A320NEO A321 A321NEO A320NEO Total
2014 11 11
2015 11 2 1 14
2016 5 8 4 17
2017 10 10 20
2018 6 5 11
2019 8 5 13
2020 13 13
2021 18 18
37 45 25 5 5 117
The Company also has six 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 2014 through 2024.
Purchase commitments for these aircraft and engines, including estimated amounts for contractual price escalations and pre-
delivery payments, will be approximately $559.3 million in 2014, $619.1 million in 2015, $633.1 million in 2016, $804.5
million in 2017, $543.1 million in 2018 and $2,197.1 million in 2019 and beyond. The Company has secured financing