AirTran Holdings Reports Fifth Consecutive Quarterly Profit; Revenues Hit Record $234 Million; Operating Margin Increases to 13.1 Percent.Business Editors ORLANDO Orlando, city, United States Orlando (ôrlăn`dō), city (1990 pop. 164,693), seat of Orange co., central Fla., in a lake region; inc. 1875. In a citrus fruit and farm area, it is one of the world's most visited vacation spots. , Fla.--(BUSINESS WIRE)--July 29, 2003 AirTran Holdings AirTran Holdings (NYSE: AAI) is a Nevada corporation that operates as an airline holding company. Its primary asset is AirTran Airways. History After the large amount of negative publicity surrounding the Flight 592 incident, ValuJet Airlines suffered serious Inc., (NYSE NYSE See: New York Stock Exchange :AAI AAI American Association of Immunologists. ), the parent company of AirTran Airways AirTran Airways is a low-cost airline that is a Delaware corporation with headquarters in Orlando, Florida, USA and is a subsidiary of AirTran Holdings. AirTran operates over 750 daily flights throughout the eastern USA and the Midwest, including over 270 daily departures from , Inc., today announced its fifth consecutive quarter of profitability and net income of $57.2 million or $0.74 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Included in the second quarter 2003 results were special items described below. Excluding special items, AirTran Holdings earned $21.9 million or $0.28 per diluted share compared to $5.1 million or $0.07 per diluted share in the second quarter of 2002. During the second quarter of 2003, the airline reported record operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $233.9 million representing a 22.7 percent increase over second quarter 2002 operating revenues of $190.6 million. Improvements in passenger-load factor and average yield resulted in a 4.5 percent improvement in unit revenue which when combined with a 17.0 percent increase in year over year available seat miles Available seat miles (ASM) is a measure of an airline flight's passenger carrying capacity. It is equal to the number of seats available multiplied by the number of miles flown. This measures an airlines capacity for transporting passengers. (ASMs) produced the record revenues. Pursuant to the Emergency Wartime Supplemental Appropriations Act of 2003, the Company received a $38.1 million cash reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. from the U.S. Government. In addition, the Company recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1.8 million related to the conversion of the remaining portion of a convertible note by Boeing Capital Boeing Capital is a subsidiary of The Boeing Company, providing asset-based leasing and lending services. Boeing Capital is made up of two divisions, Aircraft Financial Services and The Space & Defense Financial Services History Loan Corporation. These adjustments are reported in the "Other (Income) Expense" section of the attached unaudited Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations. AirTran AirTran may mean:
CASM Communities and Small-scale Mining CASM Canadian Academy of Sports Medicine CASM Certificate of Advanced Study in Mathematics (Univeristy of Cambridge, UK) CASM Coherent Adaptive Subcarrier Modulation ) declined 2.7 percent to 8.3 cents per mile including fuel and 0.6 percent to 6.6 cents without fuel. CASM and non-fuel CASM during the second quarter of 2002 were 8.5 cents and 6.7 cents, respectively. "AirTran Airways is once again proud to report strong performance in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a challenging industry environment," said Joe Leonard For the baseball player, see . Joe Leonard (born August 4, 1932, San Diego, California), is a retired American motorcycle racer and racecar driver. Leonard won the first AMA Grand National Championship Series in 1954 and won it again in 1956 and 1957. , chairman and chief executive officer. "As we build our network and move toward taking delivery of up to 110 new Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. aircraft to further expand our reach in the market, AirTran Airways is poised to continue its success." Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Fornaro, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. remarked, "These results demonstrate that our strengths--low costs, great service, friendly people and new aircraft--provide the foundation for continued success and profitability. This is an exciting time for AirTran Airways as we grow our team and welcome an increasing number of business and leisure travelers to our airline." Stan STAN Stanchion STAN Stärke- und Ausrüstungsnachweis (German) Stan Standard Man (human patient simulator) STAN SEMCIP Technical Assistance Network STAN System Trace Audit Number STAN Star Trek Area Network Gadek, senior vice president of finance and chief financial officer said, "During the second quarter of 2003 AirTran continued to reduce its unit costs in numerous areas. In addition, the new Boeing aircraft will continue to reduce our unit costs as deliveries begin in 2004." Other highlights for the quarter include: -- Committed to acquire up to 100 Boeing 737 and 10 Boeing 717 aircraft. -- Issued convertible notes of $125 million at 7 percent. -- Launched Westward service to Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , and Las Vegas. -- Ended the quarter with $343 million in cash, of which $284 million was unrestricted. -- Celebrated the first time AirTran Airways served 1,000,000 passengers in one month (June June: see month. 2003). -- Continued to develop innovative, customer-driven technological initiatives, such as automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. A+ Rewards and ByePass online flight check-in process. -- Rolled out over 85 self-service kiosks The self-service kiosk rose with the development of the ATM and adoption by consumers coupled with advanced technologies such as touch-screens. Self-service kiosks are hardware devices that work in combination with self service software, allowing users to perform any number of at airport locations. AirTran Airways is one of America's largest low-fare airlines - employing more than 5,400 professional Crew Members and serving 492 flights a day to 43 destinations. The airline's hub is at Hartsfield Hartsfield is a surname, which may be used in reference to:
n. A trip from one place to another and back, usually over the same route. purchase or Saturday Saturday: see week; Sabbath. night stay, and offers an affordable Business Class, assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. seating, easy online booking and check-in, the A-Plus A-PLUS Automated Property Loss Underwriting System Rewards frequent flier frequent flier n. One who travels often by air, especially on one airline. fre  quent-fli program, and the A2B A2B Anti-Two-BlockA2B Administration-to-Broker A2B Administration to Business corporate travel program. AirTran Airways, a subsidiary of AirTran Holdings, Inc., (NYSE:AAI), is the world's largest operator of the Boeing 717, the most modern, environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1] aircraft in its class. In 2004, the company will begin taking delivery of 100 Boeing 737-700s, one of the most popular and reliable jet aircraft in its class. For more information and reservations, visit airtran.com (America Online See AOL. Keyword (1) A word used in a text search. (2) A word in a text document that is used in an index to best describe the contents of the document. (3) A reserved word in a programming or command language. 1. : AirTran), call AirTran Airways at 800-AIRTRAN (800-247-8726) or 770-994-8258 (in Atlanta) or your travel agent. Editor's note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : Statements regarding the Company's operational and financial success, business model, expectations about future success, improved operational performance and our ability to maintain or improve our low costs are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company's ability to maintain current cost levels, fare levels and actions by competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters and general economic conditions. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2002. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements. Attached: Consolidated Statements of Operations
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Three Months Ended
June 30, Percent
2003 2002 Change
---------- ---------- -------
Operating Revenues:
Passenger $226,872 $185,683 22.2
Cargo 332 413 (19.6)
Other 6,697 4,549 47.2
---------- ----------
Total operating
revenues 233,901 190,645 22.7
Operating Expenses:
Salaries, wages and
benefits 57,584 50,928 13.1
Aircraft fuel 41,034 39,044 5.1
Aircraft rent 29,857 16,362 82.5
Distribution 11,996 12,495 (4.0)
Maintenance, materials
and repairs 15,556 15,087 3.1
Landing fees and other
rents 13,274 10,708 24.0
Aircraft insurance and
security services 3,692 6,738 (45.2)
Marketing and
advertising 5,911 5,437 8.7
Depreciation 3,301 4,204 (21.5)
Other operating 20,993 17,488 20.0
---------- ----------
Total operating
expenses 203,198 178,491 13.8
---------- ----------
Operating Income 30,703 12,154 -
Other (Income) Expense:
Interest income (748) (520) 43.8
Interest expense 8,922 7,374 21.0
Payment under the
Emergency Wartime
Supplemental
Appropriations Act,
2003 (38,061) - -
Convertible debt
discount amortization 1,812 - -
---------- ----------
Other (income) expense,
net (28,075) 6,854 -
---------- ----------
Income Before Income
Taxes 58,778 5,300 -
Income Tax Expense 1,587 201 -
---------- ----------
Net Income $57,191 $5,099 -
========== ==========
Earnings per Common
Share
Basic $0.79 $0.07 -
Diluted $0.74 $0.07 -
Weighted-average Shares
Outstanding
Basic 72,202 70,224 2.8
Diluted 77,682 73,955 5.0
EBITDA $34,004 $16,358 -
Operating margin 13.1 percent 6.4 percent 6.7 pts.
Net margin(a) 9.4 percent 2.7 percent 6.7 pts.
Second Quarter
Statistical Summary:
Revenue passengers 2,962,307 2,577,066 14.9
Revenue passenger
miles (000s) 1,791,622 1,491,533 20.1
Available seat miles
(000s) 2,447,794 2,093,000 17.0
Block hours 66,775 60,380 10.6
Passenger load factor 73.2 percent 71.3 percent 1.9 pts.
Break-even load
factor(a) 65.9 percent 69.2 percent (3.3)pts.
Average fare $76.59 $72.05 6.3
Average yield per RPM 12.66 cents 12.45 cents 1.7
Passenger revenue per
ASM 9.27 cents 8.87 cents 4.5
Operating cost per
ASM 8.30 cents 8.53 cents (2.7)
Non-fuel operating
cost per ASM 6.62 cents 6.66 cents (0.6)
Average cost of
aircraft fuel per
gallon 91.16 cents 88.74 cents 2.7
Weighted-average
number of aircraft 69 62 11.3
(a)Statistical calculations for 2003 exclude payment under the
Emergency Wartime Supplemental Appropriations Act, 2003 and
convertible debt discount amortization of $38.1 million and
$1.8 million, respectively.
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Six Months Ended
June 30, Percent
2003 2002 Change
---------- ---------- -------
Operating Revenues:
Passenger $428,772 $341,372 25.6
Cargo 715 656 9.0
Other 12,416 7,921 56.7
---------- ----------
Total operating
revenues 441,903 349,949 26.3
Operating Expenses:
Salaries, wages and
benefits 112,175 96,180 16.6
Aircraft fuel 88,178 72,849 21.0
Aircraft rent 56,276 30,120 86.8
Distribution 22,768 23,200 (1.9)
Maintenance, materials
and repairs 30,635 25,650 19.4
Landing fees and other
rents 24,758 20,718 19.5
Aircraft insurance and
security services 9,242 14,546 (36.5)
Marketing and
advertising 12,988 11,112 16.9
Depreciation 6,623 8,615 (23.1)
Other operating 39,179 37,737 3.8
---------- ----------
Total operating
expenses 402,822 340,727 18.2
---------- ----------
Operating Income 39,081 9,222 -
Other (Income) Expense:
Interest income (1,275) (1,053) 21.1
Interest expense 15,791 14,853 6.3
Payment under the
Emergency Wartime
Supplemental
Appropriations Act,
2003 (38,061) - -
Convertible debt
discount amortization 1,812 - -
SFAS 133 adjustment - (5,857) -
---------- ----------
Other (income) expense,
net (21,733) 7,943 -
---------- ----------
Income Before Income
Taxes 60,814 1,279 -
Income Tax Expense
(Benefit) 1,587 (786) -
---------- ----------
Net Income $59,227 $2,065 -
========== ==========
Earnings per Common
Share
Basic $0.82 $0.03 -
Diluted $0.78 $0.03 -
Weighted-average Shares
Outstanding
Basic 71,864 70,156 2.4
Diluted 76,589 74,369 3.0
EBITDA $45,704 $17,837 -
Operating margin 8.8 percent 2.6 percent 6.2 pts.
Net margin(a) 5.4 percent 0.6 percent 4.8 pts.
Six Month Statistical
Summary:
Revenue passengers 5,522,467 4,703,471 17.4
Revenue passenger
miles (000s) 3,359,034 2,684,871 25.1
Available seat miles
(000s) 4,759,756 3,892,189 22.3
Block hours 131,704 113,240 16.3
Passenger load factor 70.6 percent 69.0 percent 1.6 pts.
Break-even load
factor(a) 66.6 percent 68.7 percent (2.1)pts.
Average fare $77.64 $72.58 7.0
Average yield per RPM 12.76 cents 12.71 cents 0.4
Passenger revenue per
ASM 9.01 cents 8.77 cents 2.7
Operating cost per
ASM 8.46 cents 8.75 cents (3.3)
Non-fuel operating
cost per ASM 6.61 cents 6.88 cents (3.9)
Average cost of
aircraft fuel per
gallon 99.25 cents 88.10 cents 12.7
Weighted-average
number of aircraft 67 61 9.8
(a)Statistical calculations for 2003 exclude payment under the
Emergency Wartime Supplemental Appropriations Act, 2003 and
convertible debt discount amortization of $38.1 million and
$1.8 million, respectively.
Pursuant to the new SEC Regulation G, we are providing further disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures reported on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. We believe that disclosing net income, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , net margin and break-even load factor excluding special items is helpful to our investors in evaluating our operational performance because we believe that the payment received under the Emergency Wartime Appropriations Act, 2003 and the convertible debt discount amortization charged to expense due to a debt to equity conversion are events that do not occur on a regular quarterly basis. We believe that our disclosure of the non-GAAP measure, earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
AirTran Holdings, Inc.
Reconciliation of GAAP Financial Information to
Non-GAAP Financial Information
(In thousands, except per share data and statistical data)
(Unaudited)
The following table summarizes AirTran Holdings, Inc.'s net income and
diluted earnings per share during 2003 and 2002 excluding special
items and as reported in accordance with GAAP:
Three Months Ended
June 30,
2003 2002
--------------------------------------------
Dollars EPS Dollars EPS
---------- ---------- ---------- ----------
Net income and diluted EPS
excluding special items $21,888 0.28 $5,099 0.07
Payment under the Emergency
Wartime Supplemental
Appropriations Act,
2003, net of tax 37,068 0.48 -- --
Convertible debt discount
amortization, net of tax (1,765 ) (0.02 ) -- --
--------------------- ---------------------
Reported GAAP net income
and diluted EPS $57,191 0.74 $5,099 0.07
===================== =====================
Diluted shares for computation 77,682 73,955
========== ==========
Six Months Ended
June 30,
2003 2002
--------------------------------------------
Dollars EPS Dollars EPS
---------- ---------- ---------- ----------
Net income and diluted EPS
excluding special items $23,924 0.32 $2,065 0.03
Payment under the Emergency
Wartime Supplemental
Appropriations Act,
2003, net of tax 37,068 0.48 -- --
Convertible debt discount
amortization, net of tax (1,765 ) (0.02 ) -- --
--------------------- ---------------------
Reported GAAP net income
and diluted EPS $59,227 0.78 $2,065 0.03
===================== =====================
Diluted shares for computation 76,589 74,369
========== ==========
The following table summarizes AirTran Holdings, Inc.'s net margin
and break-even load factor during 2003 and 2002 excluding special
items and as reported in accordance with GAAP:
Three Months Ended Six Months Ended
Net Margin June 30, June 30,
----------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Reported GAAP net income $57,191 $5,099 $59,227 $2,065
Payment under the Emergency
Wartime Supplemental
Appropriations Act,
2003, net of tax (37,068) -- (37,068) --
Convertible debt discount
amortization, net of tax 1,765 -- 1,765 --
--------------------- ---------------------
Net income excluding
special items $21,888 $5,099 $23,924 $2,065
===================== =====================
Reported GAAP operating
revenues $233,901 $190,645 $441,903 $349,949
Net margin excluding
special items 9.4% 2.7% 5.4% 0.6%
===================== =====================
Three Months Ended Six Months Ended
Break-even load factor June 30, June 30,
----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Reported GAAP net expenses $168,094 $180,383 $367,958 $340,093
Payment under the Emergency
Wartime Supplemental
Appropriations Act,
2003, pre-tax 38,061 -- 38,061 --
Convertible debt discount
amortization, pre-tax (1,812) -- (1,812) --
--------------------- ---------------------
Net expenses excluding
special items $204,343 $180,383 $404,207 $340,093
===================== =====================
Reported average yield per
RPM (cents) 12.66 12.45 12.76 12.71
Available seat miles(000) 2,447,794 2,093,000 4,759,756 3,892,189
Break-even load factor
excluding special items 65.9% 69.2% 66.6% 68.7%
===================== =====================
The following table reconciles GAAP operating income to EBITDA:
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Reported GAAP operating
income $30,703 $12,154 $39,081 $9,222
Add back: depreciation 3,301 4,204 6,623 8,615
--------------------- ---------------------
EBITDA $34,004 $16,358 $45,704 $17,837
===================== =====================
The following table shows the calculation of operating cost per ASM
and non-fuel operating cost per ASM:
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Operating cost $203,198 $178,491 $402,822 $340,727
ASMs (000) 2,447,794 2,093,000 4,759,756 3,892,189
Operating cost per ASM
(cents) 8.30 8.53 8.46 8.75
===================== =====================
Operating cost $203,198 $178,491 $402,822 $340,727
Less: aircraft fuel (41,034) (39,044) (88,178) (72,849)
--------------------------------------------
Non-fuel operating cost $162,164 $139,447 $314,644 $267,878
ASMs (000) 2,447,794 2,093,000 4,759,756 3,892,189
Non-fuel operating cost
per ASM (cents) 6.62 6.66 6.61 6.88
===================== =====================
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