Spirit Airlines 2014 Annual Report Download

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2014
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission File No. 001-35186
Spirit Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 38-1747023
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
2800 Executive Way
Miramar, Florida 33025
(Address of principal executive offices) (Zip Code)
(954) 447-7920
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Voting Common Stock, $0.0001 par value
Non-Voting Common Stock, $0.0001 par value
NASDAQ Global Select Market
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes No

Table of contents

  • Page 1
    ... to Spirit Airlines, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 38-1747023 (I.R.S. Employer Identification No.) 2800 Executive Way Miramar, Florida (Address of principal executive offices) 33025 (Zip Code...

  • Page 2
    ... billion computed by reference to the last sale price of the common stock on the NASDAQ Global Select Market on June 30, 2014, the last trading day of the registrant's most recently completed second fiscal quarter. Shares held by each executive officer, director and by certain persons that own 10...

  • Page 3
    ...and Financial Disclosure ...Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III Item 10. Directors, Executive Officers and Corporate Governance ...Item 11. Executive Compensation ...Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder...

  • Page 4
    ...I ITEM 1. Overview Spirit Airlines is an ultra low-cost, low-fare airline based in Miramar, Florida that offers affordable travel to priceconscious customers. Our all-Airbus fleet currently operates more than 300 daily flights to 56 destinations in the United States, Caribbean and Latin America. Our...

  • Page 5
    ... seat selection; enforcing ticketing policies, including service charges for changes and cancellations; generating subscription revenue from our $9 Fare Club ultra low-fare subscription service; deriving brand-based revenues from proprietary services, such as our FREE SPIRIT affinity credit card...

  • Page 6
    ... in key cost inputs, such as fuel, and in passenger demand that may occur as a result of changing general economic conditions. Route Network As of December 31, 2014, our route network included 151 markets served by 56 airports throughout North America, Central America, South America and the...

  • Page 7
    Competition The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price, flight schedules, aircraft type, passenger amenities, number of routes served from a city, customer service, safety record and reputation, code-sharing ...

  • Page 8
    ...As our aircraft age, scheduled scope of work and frequency of unscheduled maintenance events is likely to increase like any maturing fleet. Our aircraft utilization rate could decrease with the increase in aircraft maintenance. Employees Our business is labor intensive, with labor costs representing...

  • Page 9
    ... forth our employee groups and status of the collective bargaining agreements. Employee Groups Representative Amendable Date Pilots Flight Attendants Dispatchers Ramp Service Agents Air Line Pilots Association, International (ALPA) Association of Flight Attendants (AFA-CWA) Transport Workers Union...

  • Page 10
    ... regulatory requirements of the foreign government involved. We currently operate international service to Aruba, the Bahamas, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Peru and St. Maarten, as well as Puerto Rico and the...

  • Page 11
    ... foreign commerce and the national air transportation system. These restrictions can include limiting nighttime operations, directing specific aircraft operational procedures during takeoff and initial climb, and limiting the overall number of flights at an airport. Other Regulations We are subject...

  • Page 12
    ... network airlines, other low-cost airlines and regional airlines on many of our routes. Competition in most of the destinations we presently serve is intense, due to the large number of carriers in those markets. Furthermore, other airlines may begin service or increase existing service on routes...

  • Page 13
    ... position, our hedged positions could counteract the cost benefit of lower fuel prices and may require us to post cash margin collateral. Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Trends and Uncertainties Affecting Our Business-Aircraft Fuel...

  • Page 14
    Restrictions on or increased taxes applicable to charges for ancillary products and services paid by airline passengers and burdensome consumer protection regulations or laws could harm our business, results of operations and financial condition. During 2014, 2013 and 2012, we generated non-ticket ...

  • Page 15
    ...congestion at airports, air traffic control inefficiencies, adverse weather conditions, increased security measures, new travel related taxes and the outbreak of disease. Factors that cause flight delays frustrate passengers and increase costs, which in turn could adversely affect profitability. The...

  • Page 16
    ... the flight attendants voted not to ratify the tentative agreement. We will continue to work together with the AFA-CWA and the NMB with a goal of reaching a mutually beneficial agreement. In July 2014, approximately 250 ramp service agents directly employed by the Company voted to be represented by...

  • Page 17
    ... on our business, results of operations and financial condition. We are highly dependent upon our cash balances and operating cash flows. As of December 31, 2014, we had access to lines of credit from four counterparties to our jet fuel derivatives and our purchase credit card issuer aggregating...

  • Page 18
    ... time the tickets are flown. Our ability to pass on any significant increases in aircraft fuel costs through fare increases could also be limited. We rely on maintaining a high daily aircraft utilization rate to implement our low cost structure, which makes us especially vulnerable to flight delays...

  • Page 19
    ... airlines. In July 2014, the TSA implemented an increased passenger security fee at a flat rate of $5.60. On December 19, 2014, a new law took effect which limits a round-trip fee to $11.20. We cannot forecast what additional security and safety requirements may be imposed in the future or the costs...

  • Page 20
    ... additional expenses to acquire new aircraft in place of those under the terminated leases as we expanded our network. We may in the future determine to reduce further our future growth plans from previously announced levels, which may impact our business strategy and future profitability. 20

  • Page 21
    ... low operating costs. These technologies and systems include our computerized airline reservation system, flight operations system, financial planning, management and accounting system, telecommunications systems, website, maintenance systems and check-in kiosks. In order for our operations to work...

  • Page 22
    ...order to stimulate demand for air travel. Please see "-Restrictions on or increased taxes applicable to charges for ancillary products and services paid by airline passengers and burdensome consumer protection regulations or laws could harm our business, results of operations and financial condition...

  • Page 23
    ...service, customers could decide not to fly with us, which would adversely affect our business and reputation. We depend on a limited number of suppliers for our aircraft and engines. One of the elements of our business strategy is to save costs by operating a single-family aircraft fleet - currently...

  • Page 24
    ... those types of aircraft or components. Carriers that operate a more diversified fleet are better positioned than we are to manage such events. Reduction in demand for air transportation, or governmental reduction or limitation of operating capacity, in the domestic U.S., Caribbean or Latin American...

  • Page 25
    ... to make some activities more time-consuming and costly. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur...

  • Page 26
    ... or restructurings; media reports and publications about the safety of our aircraft or the aircraft type we operate; new regulatory pronouncements and changes in regulatory guidelines; changes in the price of aircraft fuel; announcements concerning the availability of the type of aircraft we use...

  • Page 27
    ... our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or...

  • Page 28
    ... operations include Dallas-Fort Worth International Airport (DFW), McCarran International Airport (LAS) serving Las Vegas, Chicago O'Hare International Airport (ORD), Detroit Metropolitan Wayne County Airport (DTW), LaGuardia Airport (LGA) serving New York City and Orlando International Airport...

  • Page 29
    ... our principal executive offices and headquarters by leasing an additional facility located at 2844 Corporate Way, Miramar, Florida 33025, consisting of approximately 15,000 square feet. The lease for this facility expires in January 2025. We also have a training center located in a leased facility...

  • Page 30
    ... payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem...

  • Page 31
    ... 1-31, 2014 ...Total ... Total Number of Shares Purchased 1,107 771 - 1,878 Average Price Paid per Share $ $ $ 63.20 76.04 N/A 69.62 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs - - - - Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or...

  • Page 32
    ... of all dividends. The May 26, 2011 stock price used for our stock is the initial public offering price. Stock price performance, presented for the period from May 26, 2011 to December 31, 2014, is not necessarily indicative of future results. 5/26/2011 Spirit ...NYSE ARCA Airline Index ...NASDAQ...

  • Page 33
    ... this annual report. Our historical results are not necessarily indicative of the results to be expected in the future. Year Ended December 31, 2014 Operating revenues: Passenger Non-ticket Total operating revenue Operating expenses: Aircraft fuel (2) ...Salaries, wages and benefits ...Aircraft rent...

  • Page 34
    ...; and for 2013, costs related to the 2013 secondary offering; (v) for 2013 and 2014, $0.1 million in costs related to the DCA exit. For more information, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Our Operating Expenses-Special Charges (Credits...

  • Page 35
    ......Airports served in the period (B) ...Average daily Aircraft utilization (hours)...Average stage length (miles)...Block hours ...Passenger flight segments (thousands) ...Revenue passenger miles (RPMs) (thousands)...Available seat miles (ASMs) (thousands)...Load factor (%) ...Average ticket revenue...

  • Page 36
    ... from air travel-related charges for baggage, passenger usage fee (PUF) for bookings through certain of our distribution channels, advance seat selection, itinerary changes, hotel travel packages and loyalty programs such as our FREE SPIRIT affinity credit card program and $9 Fare Club. Non-ticket...

  • Page 37
    ... agency or airport. Operating Expenses Our operating expenses consist of the following line items. Aircraft Fuel. Aircraft fuel expense is our single largest operating expense. It includes the cost of jet fuel, related federal taxes, fueling into-plane fees and transportation fees. It also...

  • Page 38
    ... total operating expenses. Special Charges (Credits). Special charges (credits) include termination costs, secondary offering costs and the gain on the sale of take-off and landing slots. In 2012, we sold four permanent air carrier slots at Ronald Reagan National Airport (DCA) to another airline for...

  • Page 39
    .... Competition. The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price, flight schedules, aircraft type, passenger amenities, number of routes served from a city, customer service, safety record and reputation, code-sharing...

  • Page 40
    ...2014. Our pilots are represented by the Airline Pilots Association, International, or ALPA, our flight attendants are represented by the Association of Flight Attendants, or AFA-CWA, our flight dispatchers are represented by the Transport Workers Union of America, or TWU, and our ramp service agents...

  • Page 41
    ...of scheduled travel. Our most significant non-ticket revenues include revenues generated from air travel-related services paid for baggage, bookings through our call center or third-party vendors, advance seat selection, itinerary changes and loyalty programs, and are recognized at the time products...

  • Page 42
    security, ticketing and facility charges reduced by an estimate of amounts required to be paid by the passenger when redeeming the award. Under our 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 mulitple-...

  • Page 43
    .... These assumptions are based on various factors such as the estimated time between the maintenance events, 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. Maintenance reserves held by lessors that are...

  • Page 44
    .... The year-over-year increase in average non-ticket revenue per passenger flight segment was primarily driven by a higher volume of passengers electing to purchase seat assignments, largely due to a software update completed in 2014 that enables us to sell seat assignments through more channels as...

  • Page 45
    ...related to the sale of four permanent air carrier slots at Ronald Reagan National Airport (DCA), offset by $0.6 million in secondary offering costs. Please see "-Our Operating Expenses-Special Charges (Credits)." For 2014, adjusted CASM excludes unrealized losses related to fuel derivative contracts...

  • Page 46
    ...the airport, or the "into-plane" price, including taxes and fees. Into-plane fuel prices are affected by the global oil market, refining costs, transportation taxes and fees, which can vary by region in the United States and other countries where we operate. Into-plane fuel expense approximates cash...

  • Page 47
    ...31, 2013 was $0.3 million. Labor costs in 2014 increased by $51.8 million, or 19.8%, compared to 2013, due mainly to a 19.1% increase in our pilot and flight attendant workforce required to operate the eleven new aircraft deliveries in 2014 and the implementation of new crew duty and rest rules (FAR...

  • Page 48
    ..., as compared to 2013. The increase in maintenance costs was primarily due to the aging of our fleet, which requires more comprehensive work during routine scheduled maintenance, as well as the timing of the mix of maintenance checks performed during 2014 as compared to 2013. In addition, during the...

  • Page 49
    ... amounts represent the net cash paid (received) for the settlement of fuel derivatives. Labor costs in 2013 increased by $43.2 million, or 19.7%, compared to 2012, due mainly to a 30.9% increase in our pilot and flight attendant workforce required to operate the nine aircraft deliveries in 2013. On...

  • Page 50
    ... 2013 as compared to 2012. Special charges (credits) for 2012 primarily include a $9.1 million gain related to the sale of four permanent air carrier slots at Ronald Reagan National Airport (DCA), offset by $0.6 million in secondary offering costs. Other (income) expense, net 2014 compared to 2013...

  • Page 51
    ...30, 2013 December 31, 2013 March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 (in thousands, except share and per share amounts) Total operating revenue Passenger ...Non-ticket ...Operating income ...Net income (loss) ...Earnings Per Share: Basic...Diluted ...Weighted average shares...

  • Page 52
    ... ...Airports served (1)...Average daily Aircraft utilization (hours) ...Average stage length (miles)...Passenger flight segments (thousands) ...Revenue passenger miles (RPMs) (thousands) ...Available seat miles (ASMs) (thousands) ...Load factor (%) ...Average ticket revenue per passenger flight...

  • Page 53
    ... cash at December 31, 2014 was $632.8 million, an increase of $102.2 million from December 31, 2013. Currently, our single largest capital need is to fund the acquisition costs of our aircraft. PDPs relating to future deliveries under our agreement with Airbus are required at various times prior...

  • Page 54
    ... changes in LIBOR (London Interbank Offered Rate). Our contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturer and aircraft leasing companies. As of December 31, 2014, our aircraft orders consisted of the following: Airbus A320 A320NEO A321 A321NEO...

  • Page 55
    ...are scheduled for delivery from 2015 through 2024. As of December 31, 2014, we had lines of credit related to corporate credit cards of $18.6 million from which we had drawn $4.5 million. As of December 31, 2014, we had lines of credit with counterparties for both physical fuel delivery and jet fuel...

  • Page 56
    ... the value of tickets sold in advance of travel. "ALPA" means the Airline Pilots Association, International. "ASIF" means an Aviation Security Infrastructure Fee assessed by the TSA on each airline. "Available seat miles" or "ASMs" means the number of seats available for passengers multiplied by the...

  • Page 57
    "Load factor" means the percentage of aircraft seats actually occupied on a flight (RPMs divided by ASMs). "NMB" means the National Mediation Board. "Operating revenue per ASM," "RASM" or "unit revenue" means operating revenue divided by ASMs. "OTA" means Online Travel Agent (e.g., Orbitz and ...

  • Page 58
    ...to manage the risk of increasing fuel prices. Gulf Coast Jet indexed fuel is the basis for a substantial majority of our fuel consumption. Based on our annual fuel consumption, a 10% increase in the average price per gallon of aircraft fuel would have increased into-plane aircraft fuel cost for 2014...

  • Page 59
    ... DATA Page 60 61 62 63 64 65 90 Financial Statements: Statements of Operations ...Statements of Comprehensive Income...Balance Sheets ...Statements of Cash Flows ...Statements of Shareholders' Equity ...Notes to Financial Statements...Report of Independent Registered Public Accounting Firm ... 59

  • Page 60
    Spirit Airlines, Inc. Statements of Operations (In thousands, except per share data) Year Ended December 31, 2014 2013 2012 Operating revenues: Passenger Non-ticket Total operating revenues Operating expenses: Aircraft fuel Salaries, wages and benefits Aircraft rent Landing fees and other rents ...

  • Page 61
    Spirit Airlines, Inc. Statements of Comprehensive Income (In thousands) Year Ended December 31, 2014 2013 $ 176,918 - - 176,918 $ $ $ 2012 108,460 - - 108,460 Net income Unrealized gain (loss) on interest rate derivative instruments, net of deferred taxes of $423, $0, and $0 Other Comprehensive ...

  • Page 62
    Spirit Airlines, Inc. Balance Sheets (In thousands, except share data) December 31, 2014 Assets Current assets: Cash and cash equivalents Accounts receivable, net Deferred income taxes Prepaid expenses and other current assets Total current assets Property and equipment: Flight equipment Ground and ...

  • Page 63
    ... Deferred income tax Loss on disposal of assets Gain on slot sale Capitalized interest Changes in operating assets and liabilities: Accounts receivable Prepaid maintenance reserves Long-term deposits and other assets Accounts payable Air traffic liability Other liabilities Net cash provided by...

  • Page 64
    ... Balance at December 31, 2013 Share-based compensation Repurchase of common stock Proceeds from options exercised Excess tax benefits from sharebased compensation Unrealized gain (loss) from cash flow hedges, net of tax Net income Balance at December 31, 2014 $ 6 $ 1 $ 496,136 $ (129) $ (29...

  • Page 65
    ...stated at cost, which approximates fair value. Restricted Cash Restricted cash, when reported, consists of funds held by credit card processors as collateral for future travel paid with a credit card. As of December 31, 2014 and 2013, the Company held no restricted cash. Accounts Receivable Accounts...

  • Page 66
    ... 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. A nonrefundable ticket expires at the date of scheduled travel...

  • Page 67
    ... 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. Under the Company...

  • Page 68
    ...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...

  • Page 69
    ... to three Airbus A321 aircraft with expected delivery dates ranging from July 2015 to September 2015 to limit the Company's exposure to changes in the benchmark interest rate in the period from the trade date through the aircraft delivery date. These interest rate swaps are designated as cash flow...

  • Page 70
    ...disrupt service, create air traffic control problems, decrease revenue and increase 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...

  • Page 71
    ...upon for issued letters of credit to airports and insurance underwriters. 5. 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...

  • Page 72
    ... As of December 31, 2014 2013 (in thousands) Federal excise and other passenger taxes and fees payable Salaries and wages Airport expenses Aircraft maintenance Aircraft and facility rent Fuel Federal and state income tax payable Tax Receivable Agreement Other Other current liabilities $ $ 42,628...

  • Page 73
    ... existing terms. As of December 31, 2014 and December 31, 2013, 2,682,457 and 2,789,276 shares of the Company's common stock, respectively, remained available for future issuance under the 2011 Plan. Stock-based compensation cost is included within salaries, wages and benefits in operating expenses...

  • Page 74
    ...of each stock option award is estimated on the date of grant using the Black Scholes model. There were no options granted during 2014, 2013, or 2012. For option grants during 2011, the Company's weighted average assumptions for expected volatility, dividends, term and risk-free interest rate were 46...

  • Page 75
    ...Performance Share Awards During 2014 and 2013, the Company granted 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...

  • Page 76
    ...2014, the Company has taken delivery of four Airbus A320 aircraft financed through the Framework Agreement and recorded debt of $148 million. The remaining three Airbus A320 aircraft and three Airbus A321 aircraft are scheduled for delivery under the Company's existing purchase agreement with Airbus...

  • Page 77
    ... of December 31, 2014, the Company has incurred $0.2 million in commitment fees related to four Airbus A320 aircraft delivered in 2014 and $0.5 million in commitment fees for three Airbus A320 aircraft and three Airbus A321 aircraft scheduled for delivery in 2015. Commitment fee expense is included...

  • Page 78
    ... 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, 2014 and 2013...

  • Page 79
    ... to the lessor, and the number of flight hours the aircraft is estimated to be utilized before it is returned to the lessor. The Company expensed $1.6 million, $1.9 million and $2.0 million of paid maintenance reserves as supplemental rent during 2014, 2013 and 2012, respectively. Maintenance...

  • Page 80
    ...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...

  • Page 81
    ... 35% of its 2015 anticipated jet fuel consumption, at a weighted-average ceiling price of $2.07. As of December 31, 2013, the Company had no outstanding fuel derivatives in place. Interest Rate Swaps On October 23, 2014, the Company entered into six forward interest rate swaps, with a total...

  • Page 82
    ... plan) and Spirit Airlines, Inc. Puerto Rico Retirement Savings Plan (third plan). The first plan was adopted on February 1, 1994. Essentially, all employees that are not covered by the pilots' collective bargaining agreement, who have at least 1 year of service, have worked at least 1,000 hours...

  • Page 83
    ...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 2014 will not be necessary. The Company has fully utilized its federal NOL carryforwards and AMT credit...

  • Page 84
    ... the remaining 95 Airbus firm aircraft orders scheduled for delivery between 2015 and 2021. However, the Company has signed letters of intent to finance five of these aircraft being delivered in 2015 under secured debt arrangements. The Company is contractually obligated to pay the following minimum...

  • Page 85
    ... sets forth the Company's employee groups and status of the collective bargaining agreements as of December 31, 2014. Employee Groups Representative Amendable Date Percentage of Workforce Pilots Flight Attendants Dispatchers Ramp Service Agents Air Line Pilots Association, International (ALPA...

  • Page 86
    ... from information available in publicly quoted markets; therefore, the Company categorizes these instruments as Level 2. As of December 31, 2014 and 2013, the Company had no outstanding jet fuel swaps. Due to the fact that certain inputs utilized to determine the fair value of jet fuel options...

  • Page 87
    ...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 carrying amounts and estimated fair values of our long-term debt at December 31, 2014 were as follows: Carrying value Estimated fair value...

  • Page 88
    ... 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: 2014 2013 (in millions) 2012 DOT-domestic ...$ DOT-Latin America ...Total...

  • Page 89
    ... October 14, 2013, the Company submitted the Tax Benefit Schedule to the Stockholder Representatives. On November 27, 2013, pursuant to the TRA, the Company received an objection notice to the Tax Benefit Schedule from the Stockholder Representatives. On April 7, 2014, the Company received a demand...

  • Page 90
    ... with the standards of the Public Company Accounting Oversight Board (United States), Spirit Airlines, Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations...

  • Page 91
    ...accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying balance sheet of Spirit Airlines, Inc. as of December 31, 2014 and 2013, and the related statement of operations, comprehensive income, shareholders' equity and cash flows for each of the...

  • Page 92
    ... because of changes in conditions, or that the degree of compliance with the policies may deteriorate. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework established in Internal Control-Integrated Framework issued by...

  • Page 93
    PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information under the captions, "Election of Directors," "Corporate Governance," "Committee and Meetings of the Board of Directors," "Executive Officers," "Code of Ethics" and "Section 16(a) Beneficial Ownership Reporting ...

  • Page 94
    ...as part of this annual report, since the required information is included in the Financial Statements, including the notes thereto, or the circumstances requiring inclusion of such schedules are not present. 3. Exhibits: The exhibits filed as part of this Annual Report on Form 10-K are listed on the...

  • Page 95
    ... 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SPIRIT AIRLINES, INC. By: /s/ Edward M. Christie Edward M. Christie Senior Vice President and Chief Financial Officer Date: February 18...

  • Page 96
    ...fact or their substitute or substitutes may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated Signature Title Date...

  • Page 97
    ...Letter No. 2 dated as of October 1, 2013, filed as Exhibit 10.3 to the Company's Form 10-Q/A dated February 20, 2014, is hereby incorporated by reference. Fleet Hour Agreement, dated of as October 1, 2013, by and between Spirit Airlines, Inc. and IAE International Aero Engines AG, as supplemented by...

  • Page 98
    ... 26th, 2013, between Sunbeam Development Corporation and Spirit Airlines, Inc. Airline-Airport Lease and Use Agreement, dated as of August 17, 1999, between Broward County and Spirit Airlines, Inc., as supplemented by Addendum dated August 17, 1999, filed as Exhibit 10.14 to the Company's Amendment...

  • Page 99
    10.24†Addendum and Amendment to the Agreement Governing Acceptance of the American Express Card by Airlines, dated as of June 24, 2011, by and between Spirit Airlines, Inc. and American Express Travel Related Services Company, Inc., filed as Exhibit 10.1 to the Company's Form 10-Q dated July 28,...