Le Lézard
Classified in: Transportation, Business
Subjects: ERN, CCA, ERP

Hawaiian Holdings Reports 2017 Third Quarter Financial Results


HONOLULU, Oct. 19, 2017 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) ("Holdings" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the third quarter of 2017.

Third Quarter 2017 - Key Financial Metrics



GAAP


YoY Change


Adjusted


YoY Change

Net Income


$74.6M


($27.9M)


$102.6M


$(0.5)M

Diluted EPS


$1.39


($0.52)


$1.92


$?

Pre-tax Margin


16.6%


(7.8) pts.


22.8%


(1.8) pts.

"The third quarter's excellent results add to the great year we are having," said Mark Dunkerley, Hawaiian Airlines president and CEO.  "Apart from the helpful environment characterized by low fuel prices, manageable industry capacity and strong demand for the Hawaii vacation, our team is doing a terrific job improving the company and widening the gap between us and our competitors."

Statistical information, as well as a reconciliation of the non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

On October 12, 2017, the Company announced the initiation of a quarterly cash dividend of 12 cents per share to be paid on November 30, 2017 to all stockholders of record as of November 17, 2017.

In addition, the Company repurchased approximately 1.1 million shares of common stock for approximately $46.2 million in the third quarter, which leaves $49.5 million remaining under its share repurchase program.

As of September 30, 2017, the Company had:

Third Quarter 2017 Highlights

People

Operational

Partnerships

Increased frequencies

Product and loyalty

Fleet and financing

Fourth Quarter and Full Year 2017 Outlook

The table below summarizes the Company's expectations for the fourth quarter and full year ending December 31, 2017, expressed as an expected percentage change compared to the results for the quarter and full year ended December 31, 2016, as applicable.

The Company has revised its guidance range for economic fuel cost per gallon for the full year ending December 31, 2017 due to higher than expected year-to-date fuel costs and the forward fuel price curve as of October 9, 2017. The Company is also providing a guidance range for operating revenue per ASM and has adjusted its guidance ranges for cost per ASM excluding fuel and special Items, ASMs, and gallons of jet fuel consumed for the full year ending December 31, 2017.



Fourth Quarter




GAAP Fourth Quarter

Item


2017 Guidance


GAAP Equivalent


2017 Guidance

Cost per ASM excluding fuel and special items (a)


Up 3.5% to up 6.5%


Cost per ASM (a)


Down 10.3% to down 13.5%

Operating revenue per ASM


Down 1.0% to up 2.0%





ASMs


Up 4.0% to up 6.0%





Gallons of jet fuel consumed


Up 5.0% to up 8.0%





Economic fuel cost per gallon (b)(c)


$1.75 to $1.85


Fuel cost per gallon (b)


$1.72 to $1.82

 



Full Year




GAAP Full Year

Item


2017 Guidance


GAAP Equivalent


2017 Guidance

Cost per ASM excluding fuel and special items (a)


Up 6.0% to up 7.0%


Cost per ASM (a)


Up 3.6% to up 5.5%

Operating revenue per ASM


Up 5.0% to up 6.0%





ASMs


Up 3.0% to up 4.0%





Gallons of jet fuel consumed


Up 5.5% to up 6.5%





Economic fuel cost per gallon (b)(c)


$1.65 to $1.75


Fuel cost per gallon (b)


$1.64 to $1.74



(a)

See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and special items.

(b)

Fuel cost per gallon estimates are based on the October 9, 2017 fuel forward curve.

(c)

See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs.

Investor Conference Call

Hawaiian Holdings' quarterly earnings conference call is scheduled to begin today (October 19, 2017) at 4:30 p.m. Eastern Time (USA).  The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at www.HawaiianAirlines.com. For those who are not available for the live webcast, the call will be archived for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

Hawaiian®, the world's most punctual airline as reported by OAG, has led all U.S. carriers in on-time performance for each of the past 13 years (2004-2016) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler and Travel + Leisure have ranked Hawaiian among the highest of all domestic airlines serving Hawai'i.

Now in its 88th year of continuous service, Hawaiian is Hawai'i's biggest and longest-serving airline.

Hawaiian offers non-stop service to Hawai'i from more U.S. gateway cities (11) than any other airline, along with service from Japan, South Korea, China, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 170 jet flights daily between the Hawaiian Islands, with a total of more than 250 daily flights system-wide.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow updates on Twitter about Hawaiian (@HawaiianAir) and its special fare offers (@HawaiianFares), and become a fan on its Facebook page (Hawaiian Airlines). For career postings and updates, follow Hawaiian's LinkedIn page.

For media inquiries, please visit Hawaiian Airlines' online newsroom.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance.  Such forward-looking statements include, without limitation, the Company's expectations regarding cost per available seat mile, cost per available seat mile excluding fuel and special items, operating revenue per available seat mile, available seat miles, gallons of jet fuel consumed, fuel cost per gallon, and economic fuel cost per gallon for the quarter and full year ending December 31, 2017; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing.  Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements.  These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and assumptions relating to the Company's operations and business environment, all of which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements.  These risks and uncertainties include, without limitation, the Company's ability to accurately forecast quarterly and annual results; economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates; the Company's dependence on tourist travel; labor negotiations and related developments; competitive pressures, including the potential impact of rising industry capacity between North America and Hawai'i; the Company's ability to continue to generate sufficient cash flow to support the payment of a quarterly dividend; changes in the Company's future capital needs; foreign currency exchange rate fluctuations; and the Company's ability to implement its growth strategy.

The risks, uncertainties and assumptions referred to above that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company's other public filings and public announcements, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and the Company's subsequent Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this document are based on information available to the Company on the date hereof.  The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

 

Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except for per share data) (unaudited)




Three Months Ended September 30,


Nine Months Ended September 30,



2017


2016 (a)


% Change


2017


2016 (a)


% Change

Operating Revenue:













Passenger


$

634,475



$

591,496



7.3

%


$

1,765,275



$

1,592,095



10.9

%

Other


85,084



80,341



5.9

%


243,804



225,512



8.1

%

Total


719,559



671,837



7.1

%


2,009,079



1,817,607



10.5

%

Operating Expenses:













Aircraft fuel, including taxes and delivery


110,111



94,818



16.1

%


316,423



248,516



27.3

%

Wages and benefits


161,059



136,356



18.1

%


466,772



395,718



18.0

%

Aircraft rent


35,195



32,891



7.0

%


102,883



92,345



11.4

%

Maintenance, materials and repairs


49,396



51,812



(4.7)

%


161,366



166,901



(3.3)

%

Aircraft and passenger servicing


36,360



33,971



7.0

%


104,569



93,245



12.1

%

Commissions and other selling


32,930



29,480



11.7

%


98,668



93,936



5.0

%

Depreciation and amortization


28,447



27,495



3.5

%


83,787



81,629



2.6

%

Other rentals and landing fees


30,989



28,926



7.1

%


86,763



78,338



10.8

%

Purchased services


24,736



25,614



(3.4)

%


79,428



72,889



9.0

%

Special items


?



?



?

%


23,450



?



100.0

%

Other


36,585



31,565



15.9

%


101,376



94,279



7.5

%

Total


545,808



492,928



10.7

%


1,625,485



1,417,796



14.6

%

Operating Income


173,751



178,909



(2.9)

%


383,594



399,811



(4.1)

%

Nonoperating Income (Expense):













Other nonoperating special items


(50,202)



?





(50,202)



?




Interest expense and amortization of debt discounts and issuance costs


(7,578)



(8,539)





(23,292)



(28,453)




Interest income


1,861



1,113





4,480



3,044




Capitalized interest


2,416



719





6,258



1,407




Gains (losses) on fuel derivatives


3,282



(3,601)





(10,228)



15,421




Loss on extinguishment of debt


?



?





?



(9,993)




Other components of net periodic benefit cost


(3,792)



(5,054)





(13,293)



(15,218)




Other, net


(100)



612





3,161



9,884




Total


(54,113)



(14,750)





(83,116)



(23,908)




Income Before Income Taxes


119,638



164,159





300,478



375,903




Income tax expense


45,072



61,705





108,567



142,413




Net Income


$

74,566



$

102,454





$

191,911



$

233,490




Net Income Per Share













Basic


$

1.40



$

1.92





$

3.59



$

4.37




Diluted


$

1.39



$

1.91





$

3.57



$

4.35




Weighted Average Number of Common Stock Shares Outstanding:













Basic


53,185



53,427





53,456



53,488




Diluted


53,509



53,588





53,799



53,715






(a)

The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented.  Accounting Standard Update 2017-07 (ASU 2017-07) is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption only permitted for the Company in the first quarter of 2017, provided all provisions of the ASU are adopted. The Company early adopted this standard during the first quarter of 2017. The adoption of ASU 2017-07 resulted in a reclassification of $5.1 million and $15.2 million from wages and benefits to other components of net periodic benefit cost on the Company's consolidated statement of operations for the three months and nine months ended September 30, 2016, respectively.

 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data (unaudited)




Three months ended September 30,


Nine months ended September 30,



2017


2016


% Change


2017


2016


% Change



(in thousands, except as otherwise indicated)


(in thousands, except as otherwise indicated)

Scheduled Operations (a) :













Revenue passengers flown


3,000



2,916



2.9

%


8,588



8,317



3.3

%

Revenue passenger miles (RPM)


4,290,499



4,166,487



3.0

%


12,187,344



11,554,522



5.5

%

Available seat miles (ASM)


4,946,678



4,887,608



1.2

%


14,203,112



13,805,563



2.9

%

Passenger revenue per RPM (Yield)


14.79

¢


14.20

¢


4.2

%


14.48

¢


13.78

¢


5.1

%

Passenger load factor (RPM/ASM)


86.7

%


85.2

%


1.5

pt.


85.8

%


83.7

%


2.1

pt.

Passenger revenue per ASM (PRASM)


12.83

¢


12.10

¢


6.0

%


12.43

¢


11.53

¢


7.8

%

Total Operations (a) :













Revenue passengers flown


3,001



2,918



2.9

%


8,592



8,321



3.3

%

Revenue passenger miles (RPM)


4,293,095



4,170,671



2.9

%


12,190,846



11,559,795



5.5

%

Available seat miles (ASM)


4,950,800



4,894,768



1.1

%


14,208,642



13,813,955



2.9

%

Operating revenue per ASM (RASM)


14.53

¢


13.73

¢


5.8

%


14.14

¢


13.16

¢


7.4

%

Operating cost per ASM (CASM)


11.02

¢


10.07

¢


9.4

%


11.44

¢


10.26

¢


11.5

%

CASM excluding aircraft fuel and special items (b)


8.80

¢


8.13

¢


8.2

%


9.04

¢


8.46

¢


6.9

%

Aircraft fuel expense per ASM (c)


2.22

¢


1.94

¢


14.4

%


2.23

¢


1.80

¢


23.9

%

Revenue block hours operated


49,384



47,534



3.9

%


141,955



134,627



5.4

%

Gallons of jet fuel consumed


67,160



64,918



3.5

%


193,404



182,471



6.0

%

Average cost per gallon of jet fuel (actual) (c)


$

1.64



$

1.46



12.3

%


$

1.64



$

1.36



20.6

%

Economic fuel cost per gallon (c)(d)


$

1.68



$

1.50



12.0

%


$

1.65



$

1.53



7.8

%



(a) 

Includes the operations of the Company's contract carrier under a capacity purchase agreement.

(b) 

See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and special items.

(c) 

Includes applicable taxes and fees.

(d) 

See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs.

 

Table 3.

Hawaiian Holdings, Inc.

Economic Fuel Expense

(in thousands, except per-gallon amounts) (unaudited)


The Company believes that economic fuel expense is a good measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus losses/(gains) realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period.




Three months ended September 30,


Nine months ended September 30,



2017


2016


% Change


2017


2016


% Change



(in thousands, except per-gallon amounts)




(in thousands, except per-gallon amounts)



Aircraft fuel expense, including taxes and delivery


$

110,111



$

94,818



16.1

%


$

316,423



$

248,516



27.3

%

Realized losses on settlement of fuel derivative contracts


2,787



2,525



10.4

%


2,100



30,349



(93.1)

%

Economic fuel expense


$

112,898



$

97,343



16.0

%


$

318,523



$

278,865



14.2

%

Fuel gallons consumed


67,160



64,918



3.5

%


193,404



182,471



6.0

%

Economic fuel costs per gallon


$

1.68



$

1.50



12.0

%


$

1.65



$

1.53



7.8

%

 



Estimated three months ending

December 31, 2017


 Estimated full year ending

December 31, 2017



(in thousands, except per-gallon amounts)


(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery


$

111,576


to

$

121,471



$

421,148


to

$

451,175


Realized losses on settlement of fuel derivative contracts


1,700



1,700



3,800



3,800


Economic fuel expense


$

113,276


to

$

123,171



$

424,948


to

$

454,975


Fuel gallons consumed


64,729


to

66,579



257,544


to

259,986


Economic fuel costs per gallon


$

1.75


to

$

1.85



$

1.65


to

$

1.75


 

Table 4.

Hawaiian Holdings, Inc.

Non-GAAP Financial Reconciliation

(in thousands, except per share and CASM data) (unaudited)


The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including net income, diluted net income per share, CASM, PRASM, RASM, Passenger Revenue per RPM and EBITDAR. Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. The adjustments are described below:


  • Changes in fair value of derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period. This line item includes the unrealized amounts of fuel and interest rate derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts.  The Company believes that excluding the impact of these derivative adjustments helps investors analyze the Company's operational performance and compare its results to other airlines in the periods presented below.
  • Loss on extinguishment of debt, net of tax, is excluded to help investors analyze the Company's operational performance and compare its results to other airlines in the periods presented below.
  • The collective bargaining charge related to (1) a one-time payment to reduce the future 401K employer contribution for certain pilot groups, and (2) a one-time true up of the pilot vacation accrual at the new negotiated contract rates. The loss on sale of aircraft was a result of a sale-leaseback transaction covering three Boeing 767 aircraft as part of the planned exit from its 767 fleet. In 2016, the Hawaiian Airlines, Inc. Pension Plan for Salaried Employees (the Salaried Plan) was consolidated into the Hawaiian Airlines, Inc. Pension Plan for Employees Represented by the International Association of Machinists (IAM), which established the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan (the Merged Plan). At that time, the net liabilities of the Salaried Plan were transferred to the Merged Plan. In August 2017, the Company terminated the Merged Plan and recorded a one-time nonoperating special charge of $35.2 million. The Company also settled a portion of its pilots' other post-retirement medical plan liability and recorded a one-time nonoperating special charge of $15.0 million. These one-time charges are considered special items by the Company and are not expected to represent ongoing expenses. The Company believes that excluding such special items helps investors analyze the Company's operational performance and compare its results to other airlines in the periods presented below.



Three months ended September 30,


Nine months ended September 30,



2017


2016


2017


2016



Total


Diluted Per Share


Total


Diluted Per Share


Total


Diluted Per Share


Total


Diluted Per Share

GAAP net income, as reported


$

74,566



$

1.39



$

102,454



$

1.91



$

191,911



$

3.57



$

233,490



$

4.35


Add (deduct): changes in fair value of derivative contracts


(6,069)



(0.11)



1,076



0.02



8,128



0.15



(45,770)



(0.85)


Add: loss on extinguishment of debt


?



?



?



?



?



?



9,993



0.19


Add: special items

















  Operating

















  Loss on sale of aircraft


?



?



?



?



4,771



0.09



?



?


  Collective bargaining charge


?



?



?



?



18,679



0.35



?



?


  Nonoperating

















  Partial settlement and curtailment loss


15,001



0.28



?



?



15,001



0.28



?



?


  Loss on plan termination


35,201



0.66



?



?



35,201



0.65



?



?


Total special items


50,202



0.94



?



?



73,652



1.37



?



?


Add (deduct): tax effect of adjustments


(16,091)



(0.30)



(409)



(0.01)



(29,817)



(0.55)



13,595



0.25


Adjusted net income


$

102,608



$

1.92



$

103,121



$

1.92



$

243,874



$

4.54



$

211,308



$

3.94


 



Three months ended September 30,


Nine months ended September 30,



2017


2016


2017


2016 (a)

Income Before Income Taxes, as reported


$

119,638



$

164,159



$

300,478



$

375,903


Add (deduct): changes in fair value of derivative contracts


(6,069)



1,076



8,128



(45,770)


Add: loss on extinguishment of debt


?



?



?



9,993


Add: special items









  Operating









  Loss on sale of aircraft


?



?



4,771



?


  Collective bargaining charge


?



?



18,679



?


  Nonoperating









  Partial settlement and curtailment loss


15,001



?



15,001



?


  Loss on plan termination


35,201



?



35,201



?


Total special items


50,202



?



73,652



?


Adjusted Income Before Income Taxes


163,771



165,235



382,258



340,126


Operating Costs per Available Seat Mile (CASM)

The Company has separately listed in the table below its fuel costs per ASM and non-GAAP unit costs, excluding fuel and special items.  These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and special items (if applicable) to measure and monitor its costs.



Three months ended September 30,


Nine months ended September 30,



2017


2016 (a)


2017


2016 (a)

GAAP operating expenses


$

545,808



$

492,928



$

1,625,485



$

1,417,796


Less: aircraft fuel, including taxes and delivery


(110,111)



(94,818)



(316,423)



(248,516)


Less: special items









  Operating









  Loss on sale of aircraft


$

?



$

?



$

(4,771)



$

?


  Collective bargaining charge


$

?



$

?



$

(18,679)



$

?


Total special items


$

?



$

?



$

(23,450)



$

?


Adjusted operating expenses - excluding aircraft fuel and special items


$

435,697



$

398,110



$

1,285,612



$

1,169,280


Available Seat Miles


4,950,800



4,894,768



14,208,642



13,813,955


CASM - GAAP


11.02

¢


10.07

¢


11.44

¢


10.26

¢

Less: aircraft fuel


(2.22)



(1.94)



(2.23)



(1.80)


Less: special items









  Operating









  Loss on sale of aircraft


?



?



(0.04)



?


  Collective bargaining charge


?



?



(0.13)



?


Total special items


?



?



(0.17)



?


CASM - excluding aircraft fuel and special items


8.80

¢


8.13

¢


9.04

¢


8.46

¢



(a)

The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Accounting Standard Update 2017-07 (ASU 2017-07) is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption only permitted for the Company in the first quarter of 2017, provided all provisions of the ASU are adopted. The Company early adopted this standard during the first quarter of 2017. The adoption of ASU 2017-07 resulted in a reclassification of $5.1 million and $15.2 million from wages and benefits to other components of net periodic benefit cost on the Company's consolidated statement of operations for the three months and nine months ended September 30, 2016, respectively.

 



Estimated three months ending

December 31, 2017


Estimated full year ending

December 31, 2017

GAAP operating expenses


$

555,349


to

$

586,888



$

2,170,820


to

$

2,234,049


Less: aircraft fuel, including taxes and delivery


(111,576)


to

(121,471)



(421,148)


to

(451,175)


Less: special items









  Operating









  Loss on sale of aircraft


?



?



(4,771)



(4,771)


  Collective bargaining charge


?



?



(18,679)



(18,679)


Total special items


$

?



$

?



$

(23,450)



$

(23,450)


Adjusted operating expenses - excluding aircraft fuel and special items


$

443,773


to

$

465,417



$

1,726,222


to

$

1,759,424


Available Seat Miles


4,753,506


to

4,844,920



18,936,175


to

19,120,021


CASM - GAAP


11.68

¢

to

12.11

¢


11.46

¢

to

11.68

¢

Less: aircraft fuel


(2.34)


to

(2.50)



(2.22)


to

(2.36)


Less: special items









  Operating









  Loss on sale of aircraft


?


to

?



(0.02)


to

(0.02)


  Collective bargaining charge


?


to

?



(0.10)


to

(0.10)


Total special items


?

¢


?

¢


(0.12)

¢


(0.12)

¢

CASM - excluding aircraft fuel and special items


9.34

¢

to

9.61

¢


9.12

¢

to

9.20

¢

Pre-tax margin

The Company excludes unrealized gains from fuel derivative contracts, losses on extinguishment of debt, and special items from pre-tax margin for the same reasons as described above.



Three months ended September 30,


Nine months ended September 30,



2017


2016


2017


2016

Pre-Tax Margin, as reported


16.6

%


24.4

%


15.0

%


20.7

%

Add (deduct): changes in fair value of derivative contracts


(0.8)

%


0.2

%


0.4

%


(2.5)

%

Add: loss on extinguishment of debt


?

%


?

%


?

%


0.5

%

Add: special items









  Operating









    Loss on sale of aircraft


?

%


?

%


0.2

%


?

%

    Collective bargaining charge


?

%


?

%


0.9

%


?

%

    Nonoperating









         Post retirement benefits related


7.0

%


?

%


2.5

%


?

%

Total special items


7.0

%


?

%


3.6

%


?

%

Adjusted Pre-Tax Margin


22.8

%


24.6

%


19.0

%


18.7

%

Leverage ratio

The Company uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to represent long-term financial obligations. The Company excludes unrealized (gains) losses from fuel derivative contracts, losses on extinguishment of debt, and special items from earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) for the reasons as described above.  Management believes this metric is helpful to investors in assessing the Company's overall debt.



Twelve months ended



September 30, 2017

Debt and capital lease obligations


$

506,118


Plus: Aircraft leases capitalized at 7x last twelve months' aircraft rent


945,721


Adjusted debt and capital lease obligations


$

1,451,839





EBITDAR:



Income Before Income Taxes


$

304,039


Add back:



Interest and amortization of debt discounts and issuance costs


31,451


Depreciation and amortization


110,286


Aircraft rent


135,103


EBITDAR


$

580,879





Adjustments:



Add: changes in fair value of derivative contracts


6,221


Add: loss on extinguishment of debt


480


Add: special items



  Operating



  Impairment charge (a)


49,361


  Termination charge (a)


21,000


  Bonuses and a proposed collective bargaining agreement payment (a)


38,781


  Loss on sale of aircraft


4,771


  Collective bargaining charge


18,679


  Nonoperating



  Partial settlement and curtailment loss


15,001


  Loss on plan termination


35,201


Total special items


182,794


Adjusted EBITDAR


$

770,374





Leverage Ratio


1.9

x



(a)

For additional details, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

 

SOURCE Hawaiian Holdings, Inc.


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