Hawaiian Holdings Reports 2021 Second Quarter Financial Results

HONOLULU , July 27, 2021 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) (the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the second quarter of 2021.

Second Quarter 2021 - Key Financial Metrics

   

GAAP

 

YoY Change

 

Adjusted

 

YoY Change

Net Loss

 

$(6.2)M

 

$100.7M

 

$(73.8)M

 

$100.9M

Diluted EPS

 

$(0.12)

 

$2.21

 

$(1.44)

 

$2.37

Pre-tax Margin

 

(2.0)%

 

+252.2 pts.

 

(22.9)%

 

+361.0 pts.

"We made meaningful strides toward recovery during the second quarter, propelled by continued strong demand on our U.S. mainland routes," said Peter Ingram , Hawaiian Airlines president and CEO. "It is encouraging to see how far we've come and I am optimistic about our continued recovery. My immense appreciation goes out to our team, who continues to embrace our purpose, in spite of the challenges facing them."

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

Second Quarter 2021

Financial Results

For the second quarter of 2021, the Company reported a net loss of $6.2 million , and an adjusted net loss of $73.8 million .

The Company reported total revenue of $410.8 million , down 42% compared to the second quarter of 2019, on 30% lower capacity.

The Company reported total operating expenses of $392.3 million , and operating expenses excluding non-recurring items of $478.4 million , down 23% compared to the second quarter of 2019.

Routes and Network

The State of Hawai'i made several positive changes to its Safe Travels program in the second quarter of 2021, including:

In the second quarter of 2021, the Company continued to rebuild and expand its network, primarily in North America . In June 2021 , Hawaiian's North America traffic exceeded June 2019 levels. During the second quarter of 2021, the Company operated at an average of 70% of its 2019 second quarter system capacity, comprised of 97%, 57% and 11% capacity on its North America , Neighbor Island and International routes, respectively.

In April 2021 , the Company launched twice weekly service between Honolulu's Daniel K. Inouye International Airport (HNL) and Austin-Bergstrom International Airport (AUS), and expanded this service to three-times-weekly for the summer of 2021.

In May 2021 , the Company launched four-times-weekly seasonal service through August 15, 2021 between Kahului , Maui (OGG) and Phoenix Sky Harbor International Airport (PHX).

In June 2021 , the Company announced the resumption of its Tahiti service following the launch of a pre-travel testing program between Hawaiʻi and French Polynesia that allows for quarantine-free travel between the two archipelagos.  As part of the program, travelers inbound to Hawai'i will need to provide proof of a negative test result from a State-approved testing partner, while travelers outbound to Tahiti will need to provide proof of vaccination and have fulfilled the government of Tahiti's COVID-19 entry requirements prior to travel.  Beginning August 7, 2021 , the Company will reinstate its nonstop once-weekly service between Honolulu's Daniel K. Inouye International Airport (HNL) and Tahiti's Fa'a'ā International Airport (PPT).

Liquidity and Capital Resources

As of June 30, 2021, the Company had:

The Company further enhanced its liquidity position during the second quarter of 2021 with $173.4 million in grants and $31.4 million in loans pursuant to the Payroll Support Program Extension Agreement (the "PSP Extension Agreement") and Payroll Support Program 3 Agreement with the U.S. Department of the Treasury.

As of June 30, 2021 , the Company had $2.4 billion in liquidity, including the undrawn portion of its $235 million revolving credit facility.

Guest Experience

In June 2021 , the Company announced a partnership with Boyd Gaming Corporation that will allow members to earn greater benefits and rewards with Boyd Gaming's award-winning B Connected player loyalty program and the HawaiianMiles program. Boyd Gaming and Hawaiian Airlines loyalty members will enjoy reciprocal earning and redemption benefits, providing the Company's guests with greater access to B Connected's selection of rewards tiers, exclusive player benefits and entertainment experiences, as well as more ways to earn and use HawaiianMiles.

As of July 15, 2021 , the Company restored its full cabin meal and beverage service, while maintaining safety standards for its guests and guest-facing team members.

The Company continues its enhanced cleaning procedures and guest-facing protocols to minimize the risk of transmission of COVID-19. Understanding that health and safety are still critical concerns for our guests, the Company will continue to focus on protective measures such as:

Environmental, Social and Corporate Governance

In July 2021 , the Company published its 2021 Corporate Kuleana Report reinforcing its commitment to sustainability and outlining its progress advancing various environmental, social and governance (ESG) initiatives. A link to the report can be found through the Investor Relations, Corporate Responsibility section of Hawaiian's website.

Addressing climate change remains one of the Company's key ESG priorities. The Company has committed to achieving net-zero carbon emissions by 2050 through ongoing fleet investments, more efficient flying, carbon offsets, industry advocacy for air traffic control reform and development of sustainable aviation fuel supply. Starting this year, the Company has pledged to offset emissions from international flights above 2019 levels, in accordance with the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

In 2020, the Company decreased Available Seat Miles (ASMs) by 63.3 percent and Revenue Passenger Miles (RPMs) by 74.3 percent compared to 2019. The Company's CO2 greenhouse gas emissions (GHG) dropped commensurately by 60.7 percent.  After adjusting its fuel consumption figures to remove cargo-only flying, the Company reduced CO2 emissions intensity per ASM year-over-year by 2.1%.

The Company also defined steps it is taking to foster diversity and inclusion. Evidence-based processes to minimize bias in hiring and promotional practices across the Company have contributed to team diversity, with approximately 78% of Hawaiian's active workforce identifying as diverse based on ethnicity and 44% based on gender.

Third Quarter 2021 Outlook

The Company expects to continue to rebuild its network in the third quarter, driven primarily by North America and Neighbor Island flying, as the timing of International demand recovery remains uncertain. The Company expects improvement in total revenue, with continued strength in North America demand, and steady improvement in Neighbor Island routes. The Company expects an increase in operating expenses, excluding non-recurring items, primarily driven by the increase in capacity as compared to the second quarter, higher fuel price, higher airport rates, and costs related to preparing for the resumption of more significant international flying.

The table below summarizes the Company's expectations for the third quarter ending September 30, 2021 , expressed as an expected percentage change compared to the results for the quarter ended September 30, 2019 , as applicable.

Item

 

Third Quarter 2021
Guidance

 

GAAP Equivalent

 

GAAP Third Quarter
2021 Guidance

ASMs

 

Down 20 to 23%

       

Total Revenue

 

Down 28 to 33%

       

Operating Expenses, excluding non-recurring items (a)

 

Down 10 to 14%

 

Operating Expenses (a)

 

Down 22 to 26%

Interest Expense

 

$30 million

       

Adjusted EBITDA (b)

 

$(20) million to $20 million

       

Effective Tax Rate

 

~21%

       

Fuel Price per Gallon (c)

 

$2.04

       
   

(a)

See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding non-recurring items.

(b)

The Company is not providing a reconciliation of adjusted EBITDA to GAAP net income, the most directly comparable GAAP measure, as it is unable, without unreasonable efforts, to calculate certain special and non-recurring charges, which could have a significant impact on the GAAP measure.

(c)

Fuel Price per Gallon estimates are based on the July 23, 2021 fuel forward curve.

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

Investor Conference Call

Hawaiian Holdings' quarterly results conference call is scheduled to begin today (July 27, 2021) at 4:30 p.m. Eastern Time ( USA ).  The conference call will be broadcast live over the Internet. Investors may access and listen to the live audio webcast on the investor relations section of the Company's website at HawaiianAirlines.com . For those who are not available for the live webcast, a replay of the webcast will be archived for 90 days on the investor relations section of the Company's website.

 

About Hawaiian Airlines

Hawaiian® has led all U.S. carriers in on-time performance for each of the past 17 years (2004-2020) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler, Travel + Leisure and TripAdvisor have placed Hawaiian among the top of all domestic airlines serving Hawai'i.

Now in its 92nd year of continuous service, Hawaiian is Hawai'i's biggest and longest-serving airline. Hawaiian offers approximately 130 flights within the Hawaiian Islands, daily nonstop flights between Hawai'i and 16 U.S. gateway cities – more than any other airline – as well as once-weekly service connecting Honolulu and Tahiti. As a result of the COVID-19 pandemic, Hawaiian is operating an adjusted flight schedule between Hawai'i and Japan and Korea, and has temporarily suspended service in Australia , New Zealand and American Samoa .

The airline is committed to connecting people with aloha by offering complimentary meals for all guests on transpacific routes and the convenience of no change fees on Main Cabin and Premium Cabin seats. HawaiianMiles members also enjoy flexibility with miles that never expire.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com . Follow Hawaiian's Twitter updates ( @HawaiianAir ), become a fan on Facebook  ( Hawaiian Airlines ), and follow us on Instagram ( hawaiianairlines ). 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 recovery from the COVID-19 pandemic, including the timing to rebuild its business; route schedules; the outcome of the Company's partnership with Boyd Gaming Corporation, the Company's continued focus on effective cleaning, sanitization and safety efforts; the Company's ESG commitments, the Company's expectations related to rebuilding its network and improvement in revenue in the third quarter of 2021, including the expected strength of the North America market; expectations related to the recovery of our international routes; the Company's expectations regarding the increase in operating expenses, excluding non-recurring items, driven by the increase in capacity in the third quarter of 2021; the Company's outlook for the third quarter of 2021, including expectations regarding ASMs, total revenue, operating expense, interest expense, adjusted EBITDA, effective tax rate, capital expenditures 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 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 continuing and developing effects of the spread of COVID-19 on the Company's business operations and financial condition; the duration of government-mandated and other restrictions on travel; the full effect that the quarantine, restrictions on travel and other measures to limit the spread of COVID-19 will have on demand for air travel in the markets in which the Company operates; fluctuations and the extent of declining demand for air transportation in the markets in which the Company operates; the Company's dependence on the tourism industry; the Company's ability to manage its available cash; the Company's ability to accurately forecast economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; labor negotiations; regulatory determinations and related developments; competitive pressures, including the impact of industry capacity between North America and Hawai'i and interisland; changes in the Company's future capital needs; and foreign currency exchange rate fluctuations.

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 and the Company's 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 (unaudited)

         
   

Three Months Ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

   

(in thousands, except per share data)

Operating Revenue:

                       

Passenger

 

$

356,271

   

$

29,762

   

1,097.1

%

 

$

493,740

   

$

533,231

   

(7.4)

%

Other

 

54,510

   

30,242

   

80.2

%

 

99,258

   

85,917

   

15.5

%

Total

 

410,781

   

60,004

   

584.6

%

 

592,998

   

619,148

   

(4.2)

%

Operating Expenses:

                       

Wages and benefits

 

170,858

   

141,889

   

20.4

%

 

330,937

   

330,143

   

0.2

%

Aircraft fuel, including taxes and delivery

 

83,840

   

7,003

   

1,097.2

%

 

131,576

   

120,481

   

9.2

%

Maintenance, materials and repairs

 

37,083

   

13,994

   

165.0

%

 

71,335

   

74,403

   

(4.1)

%

Aircraft and passenger servicing

 

25,730

   

3,036

   

747.5

%

 

42,981

   

41,319

   

4.0

%

Depreciation and amortization

 

35,113

   

39,333

   

(10.7)

%

 

70,469

   

78,782

   

(10.6)

%

Commissions and other selling

 

17,270

   

2,927

   

490.0

%

 

28,679

   

29,643

   

(3.3)

%

Aircraft rent

 

27,679

   

23,886

   

15.9

%

 

57,520

   

50,890

   

13.0

%

Other rentals and landing fees

 

27,339

   

13,677

   

99.9

%

 

47,007

   

43,443

   

8.2

%

Purchased services

 

23,771

   

19,887

   

19.5

%

 

47,868

   

54,128

   

(11.6)

%

Special items

 

8,983

   

34,014

   

(73.6)

%

 

8,983

   

160,918

   

(94.4)

%

Government grant recognition

 

(95,119)

   

(111,560)

   

(14.7)

%

 

(242,389)

   

(111,560)

   

117.3

%

Other

 

29,759

   

20,882

   

42.5

%

 

52,721

   

63,618

   

(17.1)

%

Total

 

392,306

   

208,968

   

87.7

%

 

647,687

   

936,208

   

(30.8)

%

Operating Income (Loss)

 

18,475

   

(148,964)

   

(112.4)

%

 

(54,689)

   

(317,060)

   

(82.8)

%

Nonoperating Income (Expense):

                       

Interest expense and amortization of debt discounts and issuance costs

 

(30,315)

   

(8,221)

       

(54,008)

   

(15,016)

     

Interest income

 

1,345

   

2,766

       

2,594

   

5,786

     

Capitalized interest

 

776

   

921

       

1,460

   

1,752

     

Gains (losses) on fuel derivatives

 

   

(184)

       

217

   

(6,636)

     

Loss on extinguishment of debt

 

   

       

(3,994)

   

     

Other components of net periodic benefit cost

 

981

   

387

       

1,962

   

725

     

Other, net

 

444

   

774

       

21,340

   

2,740

     

Total

 

(26,769)

   

(3,557)

       

(30,429)

   

(10,649)

     

Loss Before Income Taxes

 

(8,294)

   

(152,521)

       

(85,118)

   

(327,709)

     

Income tax benefit

 

(2,117)

   

(45,617)

       

(18,250)

   

(76,433)

     

Net Loss

 

$

(6,177)

   

$

(106,904)

       

$

(66,868)

   

$

(251,276)

     

Net Loss Per Share

                       

Basic

 

$

(0.12)

   

$

(2.33)

       

$

(1.33)

   

$

(5.47)

     

Diluted

 

$

(0.12)

   

$

(2.33)

       

$

(1.33)

   

$

(5.47)

     

Weighted Average Number of Common Stock Shares Outstanding:

                       

Basic

 

51,156

   

45,971

       

50,319

   

45,969

     

Diluted

 

51,156

   

45,971

       

50,319

   

45,969

     

 

 

Hawaiian Holdings, Inc.

Consolidated Balance Sheet (unaudited)

         
   

June 30, 2021

(unaudited)

 

December 31,
2020

   

(in thousands, except shares)

ASSETS

       

Current Assets:

       

Cash and cash equivalents

 

$

1,248,480

   

$

509,639

 

Restricted cash

 

31,820

   

 

Short-term investments

 

933,099

   

354,782

 

Accounts receivable, net

 

63,829

   

67,527

 

Income taxes receivable

 

94,508

   

95,002

 

Spare parts and supplies, net

 

35,439

   

35,442

 

Prepaid expenses and other

 

74,893

   

56,086

 

Total

 

2,482,068

   

1,118,478

 

Property and equipment, less accumulated depreciation and amortization of $963,989
and $894,519 as of June 30, 2021 and December 31, 2020, respectively

 

2,001,829

   

2,085,030

 

Other Assets:

       

Assets held for sale

 

29,542

   

 

Operating lease right-of-use assets

 

582,040

   

627,359

 

Long-term prepayments and other

 

107,157

   

133,663

 

Intangible assets, net

 

13,500

   

13,500

 

Total Assets

 

$

5,216,136

   

$

3,978,030

 

LIABILITIES AND SHAREHOLDERS' EQUITY

       

Current Liabilities:

       

Accounts payable

 

$

109,058

   

$

112,002

 

Air traffic liability and current frequent flyer deferred revenue

 

823,074

   

533,702

 

Other accrued liabilities

 

256,342

   

140,081

 

Current maturities of long-term debt, less discount

 

141,536

   

115,019

 

Current maturities of finance lease obligations

 

24,004

   

21,290

 

Current maturities of operating leases

 

82,574

   

82,454

 

Total

 

1,436,588

   

1,004,548

 

Long-Term Debt

 

1,887,541

   

1,034,805

 

Other Liabilities and Deferred Credits:

       

Noncurrent finance lease obligations

 

112,932

   

120,618

 

Noncurrent operating leases

 

461,822

   

503,376

 

Accumulated pension and other post-retirement benefit obligations

 

211,976

   

217,737

 

Other liabilities and deferred credits

 

83,022

   

78,908

 

Noncurrent frequent flyer deferred revenue

 

212,326

   

201,239

 

Deferred tax liability, net

 

199,455

   

216,642

 

Total

 

1,281,533

   

1,338,520

 

Commitments and Contingencies

       

Shareholders' Equity:

       

Special preferred stock, $0.01 par value per share, three shares issued and
outstanding as of June 30, 2021 and December 31, 2020

 

   

 

Common stock, $0.01 par value per share, 51,207,816 and 48,145,093 shares
outstanding as of June 30, 2021 and December 31, 2020, respectively

 

512

   

481

 

Capital in excess of par value

 

265,654

   

188,593

 

Accumulated income

 

458,742

   

525,610

 

Accumulated other comprehensive loss, net

 

(114,434)

   

(114,527)

 

Total

 

610,474

   

600,157

 

Total Liabilities and Shareholders' Equity

 

$

5,216,136

   

$

3,978,030

 

 

 

Hawaiian Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

     
   

Six months ended June 30,

   

2021

 

2020

   

(in thousands)

Net cash provided by Operating Activities

 

$

417,277

   

$

3,458

 

Cash flows from Investing Activities:

       

Additions to property and equipment, including pre-delivery payments

 

(17,886)

   

(93,956)

 

Proceeds from the disposition of aircraft related equipment

 

117

   

 

Purchases of investments

 

(862,001)

   

(64,215)

 

Sales of investments

 

280,007

   

143,679

 

Net cash used in investing activities

 

(599,763)

   

(14,492)

 

Cash flows from Financing Activities:

       

Proceeds from the issuance of common stock

 

68,132

   

 

Long-term borrowings

 

1,251,705

   

283,964

 

Repayments of long-term debt and finance lease obligations

 

(342,151)

   

(39,129)

 

Dividend payments

 

   

(5,514)

 

Debt issuance costs

 

(24,664)

   

 

Repurchases of common stock

 

   

(7,510)

 

Payment for taxes withheld for stock compensation

 

(1,712)

   

(1,313)

 

Other

 

1,837

   

 

Net cash provided by financing activities

 

953,147

   

230,498

 

Net increase in cash and cash equivalents

 

770,661

   

219,464

 

Cash, cash equivalents, and restricted cash - Beginning of Period

 

509,639

   

373,056

 

Cash, cash equivalents, and restricted cash - End of Period

 

$

1,280,300

   

$

592,520

 

 

 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data (unaudited)

   

Three months ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

   

(in thousands, except as otherwise indicated)

Scheduled Operations (a) :

                       

Revenue passengers flown

 

1,723

   

182

   

846.7

%

 

2,456

   

2,542

   

(3.4)

%

Revenue passenger miles (RPM)

 

2,764,719

   

95,084

   

2,807.7

%

 

3,818,847

   

3,806,558

   

0.3

%

Available seat miles (ASM)

 

3,546,316

   

409,490

   

766.0

%

 

6,012,358

   

5,384,460

   

11.7

%

Passenger revenue per RPM (Yield)

 

12.89

¢

 

31.30

¢

 

(58.8)

%

 

12.93

¢

 

14.01

¢

 

(7.7)

%

Passenger load factor (RPM/ASM)

 

78.0

%

 

23.2

%

 

54.8

pts.

 

63.5

%

 

70.7

%

 

(7.2)

pts.

Passenger revenue per ASM (PRASM)

 

10.05

¢

 

7.27

¢

 

38.2

%

 

8.21

¢

 

9.90

¢

 

(17.1)

%

Total Operations (a) :

                       

Revenue passengers flown

 

1,730

   

182

   

850.5

%

 

2,466

   

2,544

   

(3.1)

%

Revenue passenger miles (RPM)

 

2,789,129

   

95,084

   

2,833.3

%

 

3,851,446

   

3,809,858

   

1.1

%

Available seat miles (ASM)

 

3,586,928

   

409,490

   

776.0

%

 

6,068,574

   

5,389,019

   

12.6

%

Operating revenue per ASM (RASM)

 

11.45

¢

 

14.65

¢

 

(21.8)

%

 

9.77

¢

 

11.49

¢

 

(15.0)

%

Operating cost per ASM (CASM)

 

10.94

¢

 

51.03

¢

 

(78.6)

%

 

10.67

¢

 

17.37

¢

 

(38.6)

%

CASM excluding aircraft fuel and non-recurring items (b)

 

11.00

¢

 

68.26

¢

 

(83.9)

%

 

12.35

¢

 

14.22

¢

 

(13.2)

%

Aircraft fuel expense per ASM (c)

 

2.34

¢

 

1.70

¢

 

37.6

%

 

2.17

¢

 

2.23

¢

 

(2.7)

%

Revenue block hours operated

 

39,250

   

6,496

   

504.2

%

 

66,245

   

59,355

   

11.6

%

Gallons of jet fuel consumed

 

44,442

   

7,759

   

472.8

%

 

74,388

   

71,580

   

3.9

%

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

 

$

1.89

   

$

0.90

   

110.0

%

 

$

1.77

   

$

1.68

   

5.4

%

Economic fuel cost per gallon (c)(d)

 

$

1.89

   

$

1.26

   

50.0

%

 

$

1.77

   

$

1.76

   

0.6

%

 

(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 non-recurring 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 (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 June 30,

 

Six months ended June 30,

   

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

   

(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery

 

$

83,840

   

$

7,003

   

1,097.2

%

 

$

131,576

   

$

120,481

   

9.2

%

Realized losses on settlement of fuel derivative contracts

 

   

2,751

   

(100.0)

%

 

165

   

5,837

   

(97.2)

%

Economic fuel expense

 

$

83,840

   

$

9,754

   

759.5

%

 

$

131,741

   

$

126,318

   

4.3

%

Fuel gallons consumed

 

44,442

   

7,759

   

472.8

%

 

74,388

   

71,580

   

3.9

%

Economic fuel costs per gallon

 

$

1.89

   

$

1.26

   

50.0

%

 

$

1.77

   

$

1.76

   

0.6

%

 

 

Table 4.
Hawaiian Holdings, Inc.
Non-GAAP Financial Reconciliation (unaudited)

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including net income (loss), operating expenses, diluted net income per share, CASM, PRASM, RASM, Passenger Revenue per RPM, EBITDA, and pre-tax margin.  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:

The Company believes that adjusting for the impact of an effective tax rate differential, the recognition of grant proceeds, changes in fair value of fuel and foreign currency derivative contracts, fluctuations in exchange rates on debt instruments denominated in foreign currency, special items and the loss recognized on the extinguishment of debt helps investors better analyze the Company's operational performance and compare its results to other airlines in the periods presented.

 

   

Three months ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

2021

 

2020

   

Total

 

Diluted Net
Loss Per
Share

 

Total

 

Diluted Net
Loss Per
Share

 

Total

 

Diluted Net
Loss Per
Share

 

Total

 

Diluted Net
Loss Per
Share

   

(in thousands, except per share data)

GAAP Net Loss, as reported

 

$

(6,177)

   

$

(0.12)

   

$

(106,904)

   

$

(2.33)

   

$

(66,868)

   

$

(1.33)

   

$

(251,276)

   

$

(5.47)

 

Adjusted for:

                               

CARES Act carryback of additional NOLs

 

   

   

(9,238)

   

(0.20)

   

   

   

(23,394)

   

(0.51)

 

Government  grant recognition

 

(95,119)

   

(1.86)

   

(111,560)

   

(2.43)

   

(242,389)

   

(4.82)

   

(111,560)

   

(2.43)

 

Loss on debt extinguishment

 

   

   

   

   

3,994

   

0.08

   

   

 

Changes in fair value of fuel derivative contracts

 

   

   

(2,567)

   

(0.06)

   

(382)

   

(0.01)

   

799

   

0.02

 

Unrealized (gains) losses on foreign debt

 

92

   

   

1,679

   

0.04

   

(18,951)

   

(0.38)

   

2,422

   

0.05

 

Unrealized (gains) losses on non-designated foreign exchange positions

 

397

   

0.01

   

612

   

0.01

   

(1,352)

   

(0.03)

   

(200)

   

 

Special items

 

8,983

   

0.18

   

34,014

   

0.74

   

8,983

   

0.18

   

160,918

   

3.50

 

Tax effect of adjustments

 

17,986

   

0.35

   

19,253

   

0.42

   

52,520

   

1.04

   

13,430

   

0.29

 

Adjusted net loss

 

$

(73,838)

   

$

(1.44)

   

$

(174,711)

   

$

(3.81)

   

$

(264,445)

   

$

(5.27)

   

$

(208,861)

   

$

(4.55)

 

 

 

   

Three months ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

2021

 

2020

   

Total

 

Margin

 

Total

 

Margin

 

Total

 

Margin

 

Total

 

Margin

   

(in thousands, except margin data)

Loss Before Income Taxes, as reported

 

$

(8,294)

   

(2.0)

%

 

$

(152,521)

   

(254.2)

%

 

$

(85,118)

   

(14.4)

%

 

$

(327,709)

   

(52.9)

%

Adjusted for:

                               

Government grant recognition

 

(95,119)

   

(23.2)

   

(111,560)

   

(185.9)

   

(242,389)

   

(40.8)

   

(111,560)

   

(18.0)

 

Loss on debt extinguishment

 

   

   

   

   

3,994

   

0.7

   

   

 

Changes in fair value of fuel derivative contracts

 

   

   

(2,567)

   

(4.3)

   

(382)

   

(0.1)

   

799

   

0.1

 

Unrealized (gains) losses on foreign debt

 

92

   

   

1,679

   

2.8

   

(18,951)

   

(3.2)

   

2,422

   

0.3

 

Unrealized (gains) losses on non-designated foreign exchange positions

 

397

   

0.1

   

612

   

1.0

   

(1,352)

   

(0.2)

   

(200)

   

 

Special items

 

8,983

   

2.2

   

34,014

   

56.7

   

8,983

   

1.5

   

160,918

   

26.0

 

Adjusted Loss Before Income Taxes

 

$

(93,941)

   

(22.9)

%

 

$

(230,343)

   

(383.9)

%

 

$

(335,215)

   

(56.5)

%

 

$

(275,330)

   

(44.5)

%

 

 

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 non-recurring items.  These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and non-recurring items (if applicable) to measure and monitor its costs.

 

   

Three months ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

2021

 

2020

   

(in thousands, except CASM data)

GAAP Operating Expenses

 

$

392,306

   

$

208,968

   

$

647,687

   

$

936,208

 

Adjusted for:

               

Government grant recognition

 

95,119

   

111,560

   

242,389

   

111,560

 

Special items

 

(8,983)

   

(34,014)

   

(8,983)

   

(160,918)

 

Operating Expenses excluding non-recurring items

 

$

478,442

   

$

286,514

   

$

881,093

   

$

886,850

 

Aircraft fuel, including taxes and delivery

 

(83,840)

   

(7,003)

   

(131,576)

   

(120,481)

 

Operating Expenses excluding fuel and non-recurring items

 

$

394,602

   

$

279,511

   

$

749,517

   

$

766,369

 

Available Seat Miles

 

3,586,928

   

409,490

   

6,068,574

   

5,389,019

 

CASM - GAAP

 

10.94

¢

 

51.03

¢

 

10.67

¢

 

17.37

¢

Aircraft fuel, including taxes and delivery

 

(2.34)

   

(1.70)

   

(2.17)

   

(2.23)

 

Government grant recognition

 

2.65

   

27.24

   

3.99

   

2.07

 

Special items

 

(0.25)

   

(8.31)

   

(0.14)

   

(2.99)

 

CASM excluding fuel and non-recurring items

 

11.00

¢

 

68.26

¢

 

12.35

¢

 

14.22

¢

 

 

Operating Expenses Excluding Non-recurring Items Outlook

The Company excludes non-recurring items from its operating expense outlook for the same reasons as described above.

 

   

Estimated three months ending
September 30, 2021

   

(in thousands)

GAAP operating expenses

 

$

471,123

 

-

$

496,663

 

Adjusted for:

       

Non-recurring items

 

(78,000)

 

-

(78,000)

 

Operating expenses, excluding non-recurring items

 

$

549,123

 

-

$

574,663

 

 

 

Adjusted EBITDA

The Company believes that adjusting earnings for interest, taxes, depreciation and amortization, non-recurring operating expenses (such as changes in unrealized gains and losses on financial instruments) and one-time charges helps investors better analyze the Company's financial performance by allowing for company-to-company and period-over-period comparisons that are unaffected by company-specific or one-time occurrences.

 

   

Three months ended June 30,

 

Six months ended June 30,

   

2021

 

2020

 

2021

 

2020

   

(in thousands)

Net Loss

 

$

(6,177)

   

(106,904)

   

$

(66,868)

   

(251,276)

 

Income tax benefit

 

(2,117)

   

(45,617)

   

(18,250)

   

(76,433)

 

Depreciation and amortization

 

35,113

   

39,333

   

70,469

   

78,782

 

Interest expense and amortization of debt discounts and issuance costs

 

30,315

   

8,221

   

54,008

   

15,016

 

EBITDA, as reported

 

57,134

   

(104,967)

   

39,359

   

(233,911)

 

Adjusted for:

               

Government grant recognition

 

(95,119)

   

(111,560)

   

(242,389)

   

(111,560)

 

Changes in fair value of fuel derivative instruments

 

   

(2,567)

   

(382)

   

799

 

Unrealized gain on non-designated foreign exchange positions

 

397

   

612

   

(1,352)

   

(200)

 

Unrealized (gains) losses on foreign debt

 

92

   

1,679

   

(18,951)

   

2,422

 

Special items

 

8,983

   

34,014

   

8,983

   

160,918

 

Loss on extinguishment of debt

 

   

   

3,994

   

 

Adjusted EBITDA

 

$

(28,513)

   

$

(182,789)

   

$

(210,738)

   

$

(181,532)

 
                                 

 

 

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/hawaiian-holdings-reports-2021-second-quarter-financial-results-301342518.html

SOURCE Hawaiian Holdings, Inc.