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LAS VEGAS, Jan 29, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following fourth quarter and full year 2007 results, and comparisons to prior year equivalents:
Unaudited 4Q07 4Q06 Change
Total operating revenue (millions) $101.0 $63.1 59.9%
Operating income (millions) $6.1 $7.4 -17.8%
Operating margin 6.0% 11.7% -5.7pp
Net income (loss) (millions) $4.8 ($1.5) N/M
Diluted earnings per share $0.23 ($0.17) N/M
Diluted non-GAAP earnings per
share adjusted by excluding
non-cash mark-to-market loss/gain
on fuel derivatives and (in 2006)
one-time tax accrual (reconciled
to GAAP on pgs. 9 and 14) $0.24 $0.24 0.0%
Scheduled Service:
Ancillary revenue per passenger $24.30 $18.84 29.0%
Total revenue per ASM (cents) 9.36 8.68 7.8%
Average stage length (miles) 922 945 (2.4)%
Total System*:
Operating expense per ASM or CASM
(cents) 8.69 7.59 14.5%
CASM, excluding fuel (cents) 4.21 4.34 (3.0)%
Average stage length (miles) 899 912 (1.4)%
Unaudited 2007 2006 Change
Total operating revenue (millions) $360.6 $243.4 48.2%
Operating income (millions) $44.1 $22.6 95.4%
Operating margin 12.2% 9.3% 2.9pp
Net income (loss) (millions) $31.5 $8.7 260.5%
Diluted earnings per share $1.53 $0.52 194.2%
Diluted non-GAAP earnings per
share adjusted by excluding
non-cash mark-to-market loss/gain
on fuel derivatives and (in 2006)
one-time tax accrual (reconciled
to GAAP on pgs. 9 and 14) $1.48 $0.96 54.2%
Scheduled Service:
Ancillary revenue per passenger $21.53 $16.11 33.6%
Total revenue per ASM (cents) 9.46 8.47 11.7%
Average stage length (miles) 923 1,006 (8.3)%
Total System*:
Operating expense per ASM or CASM
(cents) 8.19 7.69 6.5%
CASM, excluding fuel (cents) 4.25 4.15 2.4 %
Average stage length (miles) 906 966 (6.2)%
*Total system includes scheduled service, fixed fee contract and non-revenue flying.
"2007 was an outstanding year for our company," said Maurice J. Gallagher, Jr., Chairman, CEO and President of Allegiant Travel Company. "We grew revenues by 48.2% to $360.6 million, nearly doubled operating profits to $44.0 million, increased pre-tax income 220.6% to $50.7 million and net income by 260.5% to $31.5 million. However, the sharp increase in fuel prices at the end of the year did affect our fourth quarter results, dropping our fourth quarter operating margin by almost half relative to the prior year. We take some small comfort in realizing that had fuel prices remained constant compared with the fourth quarter of 2006, our operating margin would have been almost 19%. We have previously demonstrated the ability, over time, to improve margins in the face of substantial fuel price increases and we fully expect to do so this time as well. We remain confident in our business model, its profitability potential and our ability to execute."
Gallagher continued, "The tremendous efforts of our team members enabled us to achieve a great deal in the fourth quarter. We established three new bases, including two new major leisure destinations of Phoenix, AZ and Ft. Lauderdale, FL, and our new charter base at Tunica, MS to support previously announced new flying for Harrah's Entertainment, each of which supports two MD-80 aircraft. On the revenue front, we succeeded in further increasing system revenue per available seat mile by 7.6% due mostly to a 29.0% year over year increase in ancillary revenue per passenger."
Gallagher concluded, "Lastly our Board of Directors has authorized a share repurchase program to acquire up to $25 million of the Company's common stock. Our strong balance sheet enables us to continually evaluate ways to enhance shareholder value."
Andrew C. Levy, CFO & Managing Director -- Planning, stated, "We have made many changes to our route network, our pricing and our future planning in keeping with our goal to deliver double digit operating margins in spite of current high fuel prices. The changes made to date have been effective, but we have more hard work to do to ensure we can reach our margin targets. We remain steadfast in our determination to deliver the highest margins in the industry."
"Our balance sheet and liquidity remain very strong. We ended the quarter with $171.4 million in cash and short-term investments, down from $172.7 million at the end of the September quarter due to the purchase of $17.0 million in aircraft and parts to support our fourth quarter and 2008 growth. Cash was used to purchase $9.8 million of these assets with the balance being financed, resulting in an increase in debt of $3.1 million compared with the prior quarter and largely flat compared with year end 2006. Cash flow from operations for the quarter was $11.1 million and our total for the year was $74.0 million."
Levy continued, "We again are pleased with our cost management. Cost per ASM, excluding fuel, decreased by 3.0% compared with the prior year despite a 1.4% decline in average stage length."
During the fourth quarter, Allegiant Air initiated service to two new major leisure destinations (Phoenix and Ft. Lauderdale), two new small cities (Bangor, ME and Plattsburgh, NY) and on 28 new routes. We also resumed our seasonal service from Bellingham, WA to Palm Springs, CA.
Network Summary* January 29, Year End Year End
2008 2007 2006
"World-class leisure destinations" 5 5 3
Small cities served 53 53 47
Total cities served 58 58 50
Routes to Las Vegas 36 37 34
Routes to Orlando 27 27 21
Routes to Tampa Bay/St. Petersburg 14 14 12
Routes to Phoenix-Mesa 13 13 0
Routes to Ft. Lauderdale 11 12 0
Other routes 2 2 0
Total routes 103 105 67
* includes cities served seasonally
During the fourth quarter, we placed three MD-80s in service, bringing our operating fleet to 32 MD-80 aircraft at year end 2007. We also purchased three additional MD-80 aircraft in the fourth quarter 2007. We placed these three aircraft in service subsequent to year-end 2007 and now have an operating fleet of 35 aircraft. We have a commitment to purchase two additional MD-80 aircraft for delivery to us by the early part of the second quarter of 2008. We expect to have these aircraft in our operating fleet by the end of the second quarter 2008, for a total operating fleet of 37 MD-80s.
The following table summarizes year-over-year and recent changes in
Allegiant Air's fleet:
MD-80 Aircraft in Service January 29, Year End Year End
2008 2007 2006
Owned (including capital leases) 31 28 22
Leased 4 4 2
Total 35 32 24
At this time, Allegiant Travel Company provides the following guidance to investors, which are subject to revision:
-- We expect first quarter 2008 year-over-year departure growth of at
least 42% and ASM growth of at least 35%.
-- We expect second quarter 2008 year-over-year departure growth of at
least 35% and ASM growth of at least 25%.
-- We expect full year 2008 year-over-year departure growth of at least
35% and ASM growth of at least 30%.
-- By the end of 2008, Allegiant Air expects to operate at least 40 MD-80
aircraft. There currently appear to be sufficient high-quality MD-80
aircraft available on the market to support Allegiant Air growth.
-- We expect 2008 capital expenditures of $45 million, comprising
$36 million for six aircraft and $9 million for engines and other.
The Company is hedged to a negligible amount of its anticipated scheduled service jet fuel consumption for the first quarter of 2008 and does not have any fuel hedges for later periods.
Allegiant Travel Company will host a conference call with analysts at 1 pm EST tomorrow, January 30, 2008, to discuss its fourth quarter and year end 2007 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiantair.com. The webcast will also be archived in the "Events & Presentations" section of the website.
About the Company
Las Vegas-based Allegiant Travel Company (NASDAQ: ALGT), is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas, Nev., Phoenix, Ariz., Fort Lauderdale, Fla., Orlando, Fla. and Tampa/St. Petersburg, Fla. Through its subsidiary, Allegiant Air, LLC the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. ALGT/G
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding ASM growth, departure growth, fleet growth and expected capital expenditures, as well as information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate", "project" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at http://www.sec.gov. These risk factors include, without limitation, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to Las Vegas, Orlando, Tampa/St. Petersburg, Phoenix and Ft. Lauderdale from the markets served by us, our ability to implement our growth strategy, our fixed obligations, our dependence on our leisure destination markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, our reliance on our automated systems, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results.
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
(Logo:
http://www.newscom.com/cgi-bin/prnh/20060516/LATU102LOGO)
Detailed financial information follows:
Allegiant Travel Company
Consolidated Statements of Operations
Quarters Ended December 31, 2007 and 2006
(in thousands, except per share amounts)
(Unaudited)
Three months ended December 31, Percent
2007 2006 change
OPERATING REVENUE:
Scheduled service revenue $72,816 $46,620 56.2
Fixed fee contract revenue 7,138 6,497 9.9
Ancillary revenue 20,443 10,019 104.0
Other revenue 559 - N/M
Total operating revenue 100,956 63,136 59.9
OPERATING EXPENSES:
Aircraft fuel 48,884 23,900 104.5
Salary and benefits 14,698 10,049 46.3
Station operations 8,705 6,192 40.6
Maintenance and repairs 7,612 5,248 45.0
Sales and marketing 3,428 2,338 46.6
Aircraft lease rentals 879 825 6.5
Depreciation and
amortization 4,379 2,985 46.7
Other 6,313 4,229 49.3
Total operating
expenses 94,898 55,766 70.2
OPERATING INCOME 6,058 7,370 (17.8)
As a percent of total
operating revenue 6.0% 11.7%
OTHER (INCOME) EXPENSE:
(Gain) loss on fuel
derivatives, net (361) 1,266 N/M
Earnings from joint
venture, net (160) - N/M
Interest income (2,326) (930) 150.1
Interest expense 1,386 1,547 (10.4)
Total other (income)
expense (1,461) 1,883 N/M
INCOME BEFORE INCOME
TAXES 7,519 5,487 37.0
As a percent of total
operating revenue 7.4% 8.7%
PROVISION FOR INCOME
TAXES 2,748 7,033 (60.9)
NET INCOME (LOSS) $4,771 ($1,546) N/M
As a percent of total
operating revenue 4.7% -2.4%
Earnings per share
Basic $0.23 ($0.17) N/M
Diluted $0.23 ($0.17) N/M
Weighted average shares
outstanding:
Basic 20,651 9,028 128.7
Diluted 20,939 9,028 131.9
Unaudited pro forma data
for 2006 (reflecting
change in tax status)(1):
Income before income taxes $7,519 $5,487 37.0
Pro-forma provision for
income taxes 2,748 1,975 39.1
Pro-forma net income $4,771 $3,512 35.8
Unaudited pro-forma net
income per share data
for 2006 (reflecting
change in tax status):
Basic pro-forma net
income per share $0.23 $0.39 (41.0)
Diluted pro-forma net
income per share $0.23 $0.20 15.0
(1) Prior to its December 2006 initial public offering, the Company was organized as a limited liability company (LLC) and as such was generally not subject to income taxes, except in certain state and local jurisdictions. The pro-forma tax provision for 2006 reflects income taxes as if the Company were organized as a corporation effective January 1, 2006.
Allegiant Travel Company
Operating Statistics
Quarters Ended December 31, 2007 and 2006
(Unaudited)
Three months ended December 31, Percent
2007 2006 change*
OPERATING STATISTICS
Total system statistics
Passengers 894,834 579,516 54.4
Revenue passenger
miles (RPMs)
(thousands) 848,933 560,738 51.4
Available seat miles
(ASMs) (thousands) 1,092,135 734,761 48.6
Load factor 77.7% 76.3% 1.4
Operating revenue per
ASM (cents) 9.24 8.59 7.6
Operating expense per
ASM or CASM (cents) 8.69 7.59 14.5
CASM, excl fuel (cents) 4.21 4.34 (3.0)
Departures 8,192 5,442 50.5
Block hours 19,603 13,131 49.3
Average stage length
(miles) 899 912 (1.4)
Avg number of operating
aircraft during period 30.3 21.9 38.4
Total aircraft in service
end of period 32 24 33.3
Full-time equivalent
employees at end of
period 1,180 846 39.5
Fuel gallons consumed
(thousands) 18,511 12,325 50.2
Average fuel cost per
gallon $2.64 $1.94 36.1
Scheduled service statistics
Passengers 841,117 531,718 58.2
Revenue passenger miles
(RPMs) (thousands) 790,821 512,657 54.3
Available seat miles
(ASMs) (thousands) 996,759 652,469 52.8
Load factor 79.3% 78.6% 0.7
Departures 7,293 4,667 56.3
Block hours 17,835 11,615 53.5
Yield (cents) 9.21 9.09 1.3
Scheduled service revenue
per ASM (cents) 7.31 7.15 2.2
Ancillary revenue per ASM
(cents) 2.05 1.54 33.1
Total revenue per ASM (cents) 9.36 8.68 7.8
Average fare -- scheduled
service $86.57 $87.68 (1.3)
Average fare -- ancillary 24.30 18.84 29.0
Average fare -- total $110.87 $106.52 4.1
Average stage length
(miles) 922 945 (2.4)
Percent of sales through
website during period 85.5% 86.3% (0.8)
* except load factor and percent of sales through website, which is percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Quarters Ended December 31, 2007 and 2006
(in thousands, except per share and per ASM amounts)
(Unaudited)
Unlike many airlines, we do not qualify for fuel hedge accounting treatment under FAS 133. To facilitate investor comparisons with airlines that do qualify for fuel hedge accounting, we provide adjusted non-GAAP measures of net income and operating expense as if we did qualify for fuel hedge accounting, by excluding the mark-to-market non-cash gains or losses on fuel derivatives from net income and by treating cash gains or losses realized on fuel derivatives as part of aircraft fuel expense. Adjusted net income for fourth quarter 2006 also eliminates the effect of a one-time tax adjustment recorded upon our conversion from a limited liability company to a corporation at the time of our initial public offering in December 2006. We believe use of these non-GAAP measures assists investors in understanding the underlying economic performance of the Company without regard to different accounting treatment for fuel hedging activities and the transitory effects of changing from an LLC to a C-corporation.
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures, Adjusted net income and Adjusted aircraft fuel expense, to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measures, which are Net income or loss (which reflects the mark-to-market non-cash loss or gain on fuel derivatives and the tax accrual upon our conversion to a corporation), and Aircraft fuel expense (which is not impacted by the cash gain or loss on fuel derivatives), and a reconciliation of the non-GAAP measures to the most comparable GAAP measures. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for net income, aircraft fuel expense and other measures of financial performance prepared in accordance with GAAP. Adjusted net income and adjusted aircraft fuel expense are not GAAP measurements and our use of them may not be comparable to similarly titled measures employed by other companies in the airline industry. The reconciliations to GAAP measures follow:
Derivation of adjusted net income (net of one-time tax accrual) from GAAP
net income:
(in thousands, except per Three months ended December 31, Percent
share amounts) 2007 2006 change
Net income (loss) $4,771 ($1,546) N/M
Recognition of net deferred
tax liabilities upon
C-corporation conversion - 6,425 N/M
Net of recognition of net
deferred tax liabilities
upon C-corporation
conversion:
Adjusted net income $4,771 $4,879 (2.2)
Adjusted earnings per share:
Basic $0.23 $0.54 (57.4)
Diluted $0.23 $0.28 (17.9)
Derivation of adjusted net income (excluding non-cash mark-to-market loss or gain on fuel derivatives and one-time tax accrual) from adjusted net income (net of one-time tax accrual) as derived in the table above:
(in thousands, except Three months ended December 31, Percent
per share amounts) 2007 2006 change
Adjusted net income (net
of one time tax accrual) $4,771 $4,879 (2.2)
Mark-to-market non-cash
loss (gain) on fuel
derivatives 343 (959) N/M
Tax impact of mark-to-market
non-cash loss/gain on fuel
derivatives (125) 341 N/M
Net of mark-to-market
non-cash loss/gain on fuel
derivatives:
Adjusted net income $4,989 $4,261 17.1
Adjusted earnings per
share:
Basic $0.24 $0.47 (48.9)
Diluted $0.24 $0.24 -
Derivation of adjusted aircraft fuel expense:
Three months ended December 31, Percent
(in thousands) 2007 2006 change
Aircraft fuel expense $48,884 $23,900 104.5
Cash (gain) loss on fuel
derivatives (704) 2,225 N/M
Adjusted aircraft fuel
expense $48,180 $26,125 84.4
Derivation of operating cost per ASM treating cash (gain) loss on fuel derivatives as part of total operating expense per ASM:
Three months ended December 31, Percent
(in cents) 2007 2006 change
Total operating expense
per ASM 8.69 7.59 14.5
Cash (gain) loss on fuel
derivatives per ASM (0.06) 0.30 N/M
Operating cost per ASM
treating cash gain or loss
on fuel derivatives as part
of operating expenses 8.63 7.89 9.4
Split of (gain) loss on fuel derivatives into cash-settled portion and mark-to-market non-cash portion:
Three months ended December 31, Percent
(in thousands) 2007 2006 change
Mark-to-market non-cash
loss (gain) on fuel
derivatives $343 ($959) N/M
Cash (gain) loss on fuel
derivatives (704) 2,225 N/M
(Gain) loss on fuel
derivatives, net ($361) $1,266 N/M
Allegiant Travel Company
Consolidated Statements of Income
Years Ended December 31, 2007 and 2006
(in thousands, except per share amounts)
(Unaudited)
Years ended December 31, Percent
2007 2006 change
OPERATING REVENUE:
Scheduled service revenue $258,943 $178,349 45.2
Fixed fee contract revenue 35,378 33,743 4.8
Ancillary revenue 64,988 31,258 107.9
Other revenue 1,264 - N/M
Total operating revenue 360,573 243,350 48.2
OPERATING EXPENSES:
Aircraft fuel 152,149 101,561 49.8
Salary and benefits 50,761 34,950 45.2
Station operations 33,724 24,866 35.6
Maintenance and repairs 25,764 19,482 32.2
Sales and marketing 12,803 9,293 37.8
Aircraft lease rentals 3,004 5,102 (41.1)
Depreciation and amortization 15,992 10,584 51.1
Other 22,316 14,959 49.2
Total operating expenses 316,513 220,797 43.4
OPERATING INCOME 44,060 22,553 95.4
As a percent of total
operating revenue 12.2% 9.3%
OTHER (INCOME) EXPENSE:
(Gain) loss on fuel
derivatives, net (2,613) 4,193 N/M
Earnings from joint
venture, net (457) - N/M
Other expense 63 - N/M
Interest income (9,161) (2,973) 208.1
Interest expense 5,523 5,517 0.1
Total other (income)
expense (6,645) 6,737 N/M
INCOME BEFORE INCOME
TAXES 50,705 15,816 220.6
As a percent of total
operating revenue 14.1% 6.5%
PROVISION FOR INCOME
TAXES: 19,196 7,076 171.3
NET INCOME $31,509 $8,740 260.5
As a percent of total
operating revenue 8.7% 3.6%
Earnings per share
Basic $1.56 $1.23 26.8
Diluted $1.53 $0.52 194.2
Weighted average shares
outstanding:
Basic 20,243 7,092 185.4
Diluted 20,529 16,961 21.0
Unaudited pro forma data
for 2006 (reflecting
change in tax status)(1):
Income before income taxes $50,705 $15,816 220.6
Pro-forma provision for
income taxes 19,196 5,694 237.1
Pro-forma net income $31,509 $10,122 211.3
Unaudited pro-forma net
income per share data for
2006 (reflecting change
in tax status):
Basic pro-forma net income
per share $1.56 $1.43 9.1
Diluted pro-forma net
income per share $1.53 $0.60 155.0
(1) Prior to its December 2006 initial public offering, the Company was organized as a limited liability company (LLC) and as such was generally not subject to income taxes, except in certain state and local jurisdictions. The pro-forma tax provision for 2006 reflects income taxes as if the Company were organized as a corporation effective January 1, 2006.
Allegiant Travel Company
Operating Statistics
Years Ended December 31, 2007 and 2006
(Unaudited)
Years ended December 31, Percent
2007 2006 change*
OPERATING STATISTICS
Total system statistics
Passengers 3,264,506 2,179,367 49.8
Revenue passenger
miles (RPMs)
(thousands) 3,140,927 2,251,341 39.5
Available seat miles
(ASMs) (thousands) 3,865,337 2,871,071 34.6
Load factor 81.3% 78.4% 2.9
Operating revenue
per ASM (cents) 9.33 8.48 10.0
Operating expense per
ASM or CASM (cents) 8.19 7.69 6.5
CASM, excl fuel (cents) 4.25 4.15 2.4
Departures 28,788 20,074 43.4
Block hours 68,488 50,584 35.4
Average stage length
(miles) 906 966 (6.2)
Avg # of operating
aircraft during
period 27.8 20.8 33.7
Total aircraft in
service end of period 32 24 33.3
Full-time equivalent
employees at period
end 1,180 846 39.5
Fuel gallons consumed
(thousands) 66,035 47,984 37.6
Average fuel cost per gallon $2.30 $2.12 8.5
Scheduled service statistics
Passengers 3,017,843 1,940,456 55.5
Revenue passenger miles
(RPMs) (thousands) 2,844,358 1,996,559 42.5
Available seat miles
(ASMs) (thousands) 3,423,783 2,474,285 38.4
Load factor 83.1% 80.7% 2.4
Departures 25,088 16,634 50.8
Block hours 60,607 43,391 39.7
Yield (cents) 9.10 8.93 1.9
Scheduled service revenue
per ASM (cents) 7.56 7.21 4.9
Ancillary revenue per ASM
(cents) 1.90 1.26 50.8
Total revenue per ASM (cents) 9.46 8.47 11.7
Average fare -- scheduled
service $85.80 $91.91 (6.6)
Average fare -- ancillary 21.53 16.11 33.6
Average fare -- total $107.34 $108.02 (0.6)
Average stage length (miles) 923 1,006 (8.3)
Percent of sales through
website during period 86.6% 85.9% 0.7
* except load factor and percent of sales through website, which is percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Years Ended December 31, 2007 and 2006
(in thousands, except per share and per ASM amounts)
(Unaudited)
Unlike many airlines, we do not qualify for fuel hedge accounting treatment under FAS 133. To facilitate investor comparisons with airlines that do qualify for fuel hedge accounting, we provide adjusted non-GAAP measures of net income and operating expense as if we did qualify for fuel hedge accounting, by excluding the mark-to-market non-cash gains or losses on fuel derivatives from net income and by treating cash gains or losses realized on fuel derivatives as part of aircraft fuel expense. Adjusted net income for 2006 also eliminates the effect of a one-time tax adjustment recorded upon our conversion from a limited liability company to a corporation at the time of our initial public offering in December 2006. We believe use of these non-GAAP measures assists investors in understanding the underlying economic performance of the Company without regard to different accounting treatment for fuel hedging activities and the transitory effects of changing from an LLC to a C-corporation.
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures, Adjusted net income and Adjusted aircraft fuel expense, to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measures, which are Net income (which reflects the mark-to-market non-cash loss or gain on fuel derivatives and the tax accrual upon our conversion to a corporation), and Aircraft fuel expense (which is not impacted by the cash gain or loss on fuel derivatives), and a reconciliation of the non-GAAP measures to the most comparable GAAP measures. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for net income, aircraft fuel expense and other measures of financial performance prepared in accordance with GAAP. Adjusted net income and adjusted aircraft fuel expense are not GAAP measurements and our use of them may not be comparable to similarly titled measures employed by other companies in the airline industry. The reconciliations to GAAP measures follow:
Derivation of adjusted net income (net of one-time tax accrual) from GAAP
net income:
(in thousands, except per Years ended December 31, Percent
share amounts) 2007 2006 change
Net income $31,509 $8,740 260.5
Recognition of net
deferred tax liabilities
upon C-corporation
conversion - 6,425 N/M
Net of recognition of net
deferred tax liabilities
upon C-corporation
conversion:
Adjusted net income $31,509 $15,165 107.8
Adjusted earnings per share:
Basic $1.56 $2.14 (27.1)
Diluted $1.53 $0.89 71.9
Derivation of adjusted net income (excluding non-cash mark-to-market loss or gain on fuel derivatives and one-time tax accrual) from adjusted net income (net of one-time tax accrual) as derived in the table above:
(in thousands, except per Years ended December 31, Percent
share amounts) 2007 2006 change
Adjusted net income (net
of one time tax accrual) $31,509 $15,165 107.8
Mark-to-market non-cash
(gain) loss on fuel
derivatives (1,702) 1,641 N/M
Tax impact of mark-to-market
non-cash loss/gain on fuel
derivatives 644 (584) N/M
Net of mark-to-market
non-cash loss/gain on fuel
derivatives:
Adjusted net income $30,451 $16,222 87.7
Adjusted earnings per share:
Basic $1.50 $2.29 (34.5)
Diluted $1.48 $0.96 54.2
Derivation of adjusted aircraft fuel expense:
Years ended December 31, Percent
2007 2006 change
Aircraft fuel expense $152,149 $101,561 49.8
Cash (gain) loss on
fuel derivatives (911) 2,552 N/M
Adjusted aircraft fuel
expense $151,238 $104,113 45.3
Derivation of operating cost per ASM treating cash (gain) loss on fuel derivatives as part of total operating expense per ASM:
Years ended December 31, Percent
(in cents) 2007 2006 change
Total operating expense
per ASM 8.19 7.69 6.5
Cash (gain) loss on fuel
derivatives per ASM (0.02) 0.09 N/M
Operating cost per ASM
treating cash gain or
loss on fuel derivatives
as part of operating
expenses 8.17 7.78 5.0
Split of (gain) loss on fuel derivatives into cash-settled portion and mark-to-market non-cash portion:
Years ended December 31, Percent
(in thousands) 2007 2006 change
Mark-to-market non-cash
(gain) loss on fuel
derivatives ($1,702) $1,641 N/M
Cash (gain) loss on fuel
derivatives (911) 2,552 N/M
(Gain) loss on fuel
derivatives, net ($2,613) $4,193 N/M
SOURCE Allegiant Travel Company
http://www.allegiantair.com
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