Spirit Airlines Reports Fourth Quarter and Full Year 2016 Results

• GAAP net income for the fourth quarter 2016 was $48.5 million ($0.70 per diluted share), or $53.9 million ($0.77 per diluted share)1, excluding special items.
• GAAP net income for the full year 2016 was $264.9 million ($3.76 per diluted share), or $291.0 million ($4.13 per diluted share)1, excluding special items.
• Spirit ended 2016 with unrestricted cash, cash equivalents, and short-term investments of $801.1 million.
• Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended December 31, 2016 was 23.0 percent2.

"Throughout 2016, we made solid progress towards our goal of consistent reliability. We improved our on-time performance3 by 5.2 percentage points and we made great progress in lowering the number of complaints reported to the Department of Transportation. We started the year with a complaint ratio of over 11 per 100,000 customers and by year-end we were under 4 per 100,000 customers. We also maintained our focus on controlling costs, which together with our own revenue initiatives, and an improved industry pricing environment, helped us to achieve a full year 2016 operating margin of 19.1 percent, or 20.9 percent4, excluding special items," said Bob Fornaro, Spirit's President and Chief Executive Officer. "I thank the entire Spirit team for their efforts and dedication to improve our operations and for delivering solid financial results."

Revenue Performance

For the fourth quarter 2016, Spirit's total operating revenue was $578.4 million, an increase of 11.3 percent compared to the fourth quarter 2015, driven by a 12.9 percent increase in flight volume.

Total revenue per available seat mile (TRASM) for the fourth quarter 2016 decreased 3.6 percent compared to the same period last year, driven by a 1.9 percent decrease in operating yields and a 1.5 point decrease in load factor.

On a per passenger flight segment ("PFS") basis, total revenue for the fourth quarter 2016 decreased 3.3 percent year over year to $108.11, driven by modest declines in both ticket and non-ticket revenue per PFS.

Cost Performance

For the fourth quarter 2016, total GAAP operating expense, including special items of $8.6 million5 primarily related to lease termination charges, increased 23.4 percent, or $93.5 million, year over year to $493.0 million. Adjusted operating expense for the fourth quarter 2016 increased 20.7 percent, or $83.2 million to $484.4 million6. The increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume.

Aircraft fuel expense increased in the fourth quarter 2016 by 20.3 percent, or $21.3 million, compared to the same period last year, primarily due to a 14.0 percent increase in fuel gallons consumed.

Spirit reported fourth quarter 2016 cost per available seat mile, excluding special items and fuel ("Adjusted CASM ex-fuel"), of 5.44 cents6, an increase of 5.6 percent compared to the same period last year, driven primarily by higher other operating expenses and salaries, wages, and benefits per ASM, partially offset by lower aircraft rent per ASM.

"For the full year 2016, our adjusted CASM ex-fuel decreased 0.9 percent6 year over year. I applaud our team members for their continued efforts to improve our cost structure," said Ted Christie, Spirit's Executive Vice President and Chief Financial Officer. "Our low cost structure is the backbone of our competitive advantage and we remain dedicated to maintaining our cost discipline."

Labor

Spirit and its pilots, represented by the Airline Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.

Fleet

Spirit took delivery of five new A320neo and one new A321ceo aircraft during the fourth quarter 2016.

Full Year 2016 Highlights

• Added Seattle, Washington; Akron-Canton, Ohio; Newark, New Jersey; and Havana, Cuba to its list of destinations.
• Added 16 (3 A320ceos, 5 A320neos, and 8 A321ceos) new Airbus aircraft to its fleet, ending the year with 95 aircraft. As of year-end 2016, Spirit's Fit Fleet™ averaged 5.2 years, the youngest fleet of any major U.S. airline.
• Returned approximately $100 million to shareholders by repurchasing approximately 2.3 million shares.
• Ratified agreements with its flight attendants, represented by the Association of Flight Attendants - CWA, and with its ramp service team members at Fort Lauderdale Hollywood International Airport, represented by the International Association of Machinists and Aerospace Workers.
• Created over 850 new jobs, bringing our total number of team members to over 5,800.

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