Spirit Airlines 2015 Annual Report Download - page 74

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Notes to Financial Statements—(Continued)
74
as an asset. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. ASU
2015-03 is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years. Early
application is permitted. The Company elected to early adopt the standard effective January 1, 2015.
In November 2015, the FASB issued ASU No. 2015-17 (ASU 2015-17), "Income Taxes." The standard requires deferred
tax liabilities and assets to be classified as noncurrent on the balance sheet. The new guidance is effective for annual reporting
periods (including interim periods within those periods) beginning after December 15, 2016 for public companies with early
adoption permitted. Entities have the option of applying the guidance either prospectively to all deferred tax liabilities and
assets or retrospectively to all periods presented. The Company has elected to retrospectively adopt the standard effective
January 1, 2015. As such, certain prior period amounts have been reclassified to conform to the current presentation. In the
Balance Sheets as of December 31, 2014, the Company has reclassified $9.6 million from deferred income taxes in current
assets to long-term deferred income taxes within non-current liabilities.
3. Letters of Credit
As of December 31, 2015, the Company had a $25.1 million unsecured standby letter of credit facility, of which $13.0
million had been drawn upon for issued letters of credit.
4. 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 it is standard in the airline industry, the Company's
contractual arrangements with credit card processors permit them, under certain circumstances, to retain a holdback or other
collateral, which the Company records as restricted cash, when future air travel and other future services are purchased via
credit card transactions. The required holdback is the percentage of the Company's overall credit card sales that its credit card
processors hold to cover refunds to customers if the Company fails to fulfill its flight obligations.
The Company's credit card processors do not require the Company to maintain cash collateral provided that the Company
continues to satisfy certain liquidity and other financial covenants. Failure to meet these covenants would provide the
processors the right to place a holdback, resulting in a commensurate reduction of unrestricted cash. As of December 31, 2015
and 2014, the Company continued to be in compliance with its credit card processing agreements, and the processors were
holding back no remittances.
The maximum potential exposure to cash holdbacks by the Company's credit card processors, based upon advance ticket
sales and $9 Fare Club memberships as of December 31, 2015 and 2014, was $250.2 million and $217.1 million, respectively.
5. Accrued Liabilities
Accrued liabilities included in other current liabilities as of December 31, 2015 and 2014 consist of the following:
As of December 31,
2015 2014
(in thousands)
Federal excise and other passenger taxes and fees payable $ 38,254 $ 42,628
Salaries and wages 34,123 34,209
Airport obligations 30,849 21,726
Aircraft and facility lease obligations 24,014 10,089
Aircraft maintenance 21,688 16,127
Interest payable 12,355 1,708
Fuel 7,084 9,508
Other 14,362 16,926
Other current liabilities $ 182,729 $ 152,921
6. Common Stock and Preferred Stock