Spirit Airlines 2015 Annual Report Download - page 81

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Notes to Financial Statements—(Continued)
81
Year Ended December 31,
2015 2014
(in thousands)
Senior term loans $ 15,429 $ 738
Junior term loans 2,997 145
Class A enhanced equipment trust certificates 494 —
Class B enhanced equipment trust certificates 140 —
Commitment fees 54 685
Amortization of deferred financing costs 1,165 9
Total $ 20,279 $ 1,577
In 2014, commitment fees were expensed within interest expense on the statement of operations. Subsequent to the
Company's adoption of ASU No. 2015-03 (ASU 2015-03), "Interest-Imputation of Interest", effective January 1, 2015,
commitment fees are presented on the balance sheet as a direct deduction from the related debt liability and amortized over the
life of the debt instrument. The Company's senior and junior term loans had annual commitment fees, related to undisbursed loan
amounts, of 0.75% and 1.25%, respectively, which were paid on a quarterly basis. As of December 31, 2014, the Company
incurred $0.7 million in commitment fees related to seven Airbus A320 aircraft and three Airbus A321 aircraft delivered in 2014
and 2015.
As of December 31, 2015 and 2014, the Company had a line of credit for $18.6 million related to corporate credit cards.
Respectively, the Company had drawn $7.3 million and $4.5 million as of December 31, 2015 and 2014, which is included in
accounts payable.
As of December 31, 2015 and 2014, the Company had lines of credit with counterparties for fuel derivatives and physical
fuel delivery in the amount of $38.0 million. As of December 31, 2015 and 2014, the Company had drawn $6.9 million and $9.3
million on these lines of credit, which is included in other 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, 2015, there were no fuel derivatives and as
of December 31, 2014, the Company did not hold any fuel derivatives with requirements to post collateral.
10. Leases and Aircraft Maintenance Deposits
The Company leases various types of equipment and property, primarily aircraft, spare engines and airport facilities
under leases, which expire in various years through 2032. Lease terms are generally 3 to 15 years for aircraft and up to 25 years
for other leased equipment and property.
Total rental expense for all leases charged to operations for the years ended 2015, 2014 and 2013 was $282.7 million,
$254.3 million and $214.6 million, respectively. Total rental expense charged to operations for aircraft and engine operating
leases for the years ended December 31, 2015, 2014 and 2013 was $211.5 million, $195.8 million and $169.7 million,
respectively. Supplemental rent is made up of maintenance reserves paid or expected to be paid to aircraft lessors in advance of
the performance of major maintenance activities that are not probable of being reimbursed and probable return condition
obligations. The Company expensed $7.7 million, $7.5 million and $5.2 million of supplemental rent recorded within aircraft
rent during 2015, 2014 and 2013, respectively.
Some of the Company’s master lease agreements provide that the Company pays maintenance reserves to aircraft lessors
to be held as collateral in advance of the Company’s required performance of major maintenance activities. Substantially all of
these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles, while some
maintenance reserve payments are fixed contractual amounts. Fixed maintenance reserve payments for these aircraft and related
flight equipment, including estimated amounts for contractual price escalations, are expected to be $8.0 million in 2016, $7.4
million in 2017, $5.8 million in 2018, $4.2 million in 2019, $3.9 million in 2020 and $10.2 million in 2021 and beyond. These
lease agreements provide that maintenance reserves are reimbursable to the Company upon completion of the maintenance
event in an amount equal to either (1) the amount of the maintenance reserve held by the lessor associated with the specific
maintenance event or (2) the qualifying costs related to the specific maintenance event. Some of the master lease agreements do
not require that the Company pay maintenance reserves so long as the Company's cash balance does not fall below a certain