Spirit Airlines Reports Fourth Quarter and Full Year 2015 Results

• Adjusted net income for the fourth quarter 2015 increased 24.9 percent to $73.3 million ($1.02 per diluted share) compared to the fourth quarter 20141. GAAP net income for the fourth quarter 2015 increased 33.1 percent year over year to $74.4 million ($1.04 per diluted share) compared to the fourth quarter 2014.
• Adjusted net income for the full year 2015 increased 33.6 percent to $316.2 million ($4.37 per diluted share) compared to the full year 20141. GAAP net income for the full year 2015 increased 40.7 percent year over year to $317.2 million ($4.38 per diluted share).
• Adjusted pre-tax margin for the fourth quarter 2015 increased 270 basis points to 22.4 percent1. For the full year 2015, adjusted pre-tax margin increased 420 basis points to 23.4 percent1. On a GAAP basis, pre-tax margin for the fourth quarter 2015 increased 390 basis points to 22.7 percent and for the full year 2015 increased 520 basis points to 23.5 percent.
• Spirit ended 2015 with unrestricted cash and cash equivalents of $803.6 million.
• Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended December 31, 2015 was 28.2 percent2.

"I want to thank and congratulate our Spirit team members for successfully delivering solid financial results in 2015. Although increased industry capacity and aggressive competitive pricing pressured our unit revenues, our excellent cost execution and ability to adapt to a changing environment drove improved year-over-year results," said Bob Fornaro, Spirit's Chief Executive Officer. "I am excited to lead this innovative team. As CEO, I plan to improve upon the already very strong base of fundamentals that Spirit possesses with a focus on continuing to improve operational reliability and customer service, and maintaining our financial discipline to drive value for all of Spirit's stakeholders."

Revenue Performance

For the fourth quarter 2015, Spirit's total operating revenue was $519.8 million, an increase of 9.6 percent compared to the fourth quarter 2014, driven by an increase in flight volume, partially offset by a decrease in operating yields.

Total revenue per passenger flight segment ("PFS") for the fourth quarter 2015 decreased 12.6 percent year over year to $111.78, primarily driven by a 21.4 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pricing pressures as well as a higher percentage of Spirit's markets being under development compared to the same period last year. Non-ticket revenue remained stable, declining only 0.8 percent year over year on a per flight segment basis to $54.26.

Cost Performance

Adjusted operating expenses for the fourth quarter 2015 increased 5.6 percent to $401.2 million3. GAAP total operating expenses increased 3.9 percent year over year to $399.5 million. Operating expenses benefited from fuel expense decreasing 23.8 percent, or $32.8 million, on a fuel volume increase of 27.9 percent.

Spirit reported fourth quarter 2015 cost per available seat mile ("ASM") excluding special items and fuel ("Adjusted CASM ex-fuel")3 of 5.15 cents, a decrease of 8.2 percent compared to the same period last year, driven primarily by lower aircraft rent per ASM and lower labor expense per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft. Labor expense per ASM in the fourth quarter 2015 was lower compared to the same period last year primarily due to scale benefits from overall growth and from larger gauge aircraft. These decreases were partially offset by higher depreciation and amortization expense related to the depreciation of aircraft.

"Spirit's cost performance in the fourth quarter and throughout 2015 should be a source of pride for all our team members," said Ted Christie, Spirit's Chief Financial Officer. "Our ultra-low cost structure is the foundation of our competitive advantage, providing us the platform to define our future."

Fleet

Spirit took delivery of three new A321ceo aircraft during the fourth quarter 2015.

Full Year 2015 Highlights

• Maintained its commitment to offer low fares to its valued customers; ticket revenue per PFS for 2015 averaged $65.25 with total revenue per PFS averaging $119.49.
• Launched service on 40 new nonstop routes during 2015.
• Added Cleveland, Ohio to its list of destinations and announced the addition of service from its newest destination, Seattle-Tacoma, Washington beginning in the Spring of 2016.
• Added 14 (8 A320ceos and 6 A321ceos) new Airbus aircraft to its fleet, ending the year with 79 aircraft. As of year-end 2015, Spirit's Fit Fleet™ averaged 5.2 years, the youngest fleet of any major US airline.
• Issued $576.6 million of enhanced equipment trust certificates, its first aircraft-backed bond publicly offered.
• Repurchased approximately 1.5 million shares for approximately $99 million during 2015 under an initial share repurchase program and authorized another $100 million share repurchase program.
• Created over 600 new jobs, bringing our total number of team members to nearly 5,000.

Refer to full documentation in attachments box, located at the top left, below the headline.