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Hawaiian Holdings reports 2012 financial results


Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., has reported its financial results for the full year 2012 and the fourth quarter of 2012.

2012 Full Year Financial Highlights

* Adjusted net income, reflecting economic fuel expense and excluding lease termination costs, of $55.6 million or $1.06 per diluted share, an increase of 28.7% year-over-year.

* GAAP net income of $53.2 million or $1.01 per diluted share.

* Operating cost per available seat mile (CASM), excluding fuel and lease termination costs, decrease of 6.0% year-over-year.

* Adjusted operating margin of 7.0%, reflecting economic fuel expense and excluding lease termination costs.

* Unrestricted cash and cash equivalents increase of 33.5% year-over-year.

* Return on invested capital, pre-tax, of 14.9%.

Fourth Quarter 2012 Financial Highlights

* Available seat mile (ASM) for scheduled operations increase of 29.2% year-over-year.

* Adjusted net income, reflecting economic fuel expense, of $0.1 million or $0.00 per diluted share.

* GAAP net loss of $3.4 million or $0.07 cents per diluted share.

* CASM, excluding fuel, decrease of 11.3% year-over-year.

* Unrestricted cash and cash equivalents of $405.9 million.

Mark Dunkerley, the Company’s President and Chief Executive Officer, commented that “A good year of growth and improving financial performance was finished off by a disappointing break-even result in the fourth quarter. The sharp weakening of the Yen, continued excess capacity in certain markets and an accounting charge all worked to depress our earnings for the period despite many other things going right for the business.

“The year as a whole was every bit as busy and exciting as we had forecast. We added four new long haul destinations, eight long haul and short haul aircraft, opened a hub on Maui and added approximately 600 employees to our rolls, all in 2012. Throughout it all, the employees of Hawaiian Airlines continued to deliver the very highest quality travel and shipping experience to our customers.

“Our employees’ tireless dedication to our customers and to our business is a distinguishing strength of Hawaiian Airlines. 2013 promises to be an equally exciting year for the company with new destinations, new aircraft and more employees being planned.”

The fourth quarter 2012 results reflect an out-of-period frequent flyer adjustment related to the timing of revenue recognized for mileage credits sold to participating companies in previous years.

This adjustment resulted in a net decrease to pre-tax income of $7.3 million in the quarter, or $0.08 per diluted share ($7.9 million decrease to passenger revenue and $0.6 million decrease to other operating expense).

Liquidity and Capital Resources

As of Dec. 31, 2012, the company had:

* Unrestricted cash and cash equivalents of $405.9 million.

* Available borrowing capacity of $68.9 million under Hawaiian’s Revolving Credit Facility.

* Outstanding debt and capital lease obligations of approximately $661 million consisting of the following:

– $246.4 million outstanding under secured loan agreements to finance a portion of the purchase price for four Airbus A330-200 aircraft.

– $170.7 million in secured loan agreements for a portion of the purchase price for 15 previously leased Boeing 717-200 aircraft.

– $106.3 million in capital lease obligations for an Airbus A330-200 and two Boeing 717-200 aircraft.

– $64.7 million outstanding under floating rate notes issued in conjunction with the acquisition of three Boeing 767-300 ER aircraft.

– $72.7 million outstanding of Convertible Senior Notes.

The company expects to take delivery of five Airbus A330-200 aircraft in 2013, and has entered into debt and lease financing commitments for the first four deliveries in the first half of the year.

The increase in Hawaiian’s fleet resulting from the delivery of these five Airbus A330-200 aircraft in 2013 will be partially offset by a decrease of four Boeing 767-300ER aircraft during the year, with three aircraft returned at the end of their lease terms and one planned retirement.

In January 2013, the company signed a Memorandum of Understanding for the purchase of 16 new Airbus A321neo aircraft for delivery between 2017 and 2020, with the rights to purchase an additional nine aircraft. The long-range, single-aisle aircraft will complement Hawaiian’s existing fleet of wide-body, twin-aisle aircraft used for long-haul flying between Hawaii and the U.S. West Coast.

Operational Highlights

* Ranked No. 1 nationally for on-time performance, for 10 out of the 11 months reported in 2012, by the U.S. Department of Transportation Air Travel Consumer Report.

* Ranked second overall in the 2012 Airline Quality Rating Report.

* Introduced a Maui hub offering improved connections between Maui and Neighbor Island destinations, as well as additional flights to and from the West Coast.

* Provided chartered air transportation for the Oakland Raiders for the 13th consecutive season.

* Signed a new three-year contract with the Association of Flight Attendants.

* Became the first airline to receive aviation carbon credits for reducing carbon dioxidec emissions.


* Added four new Airbus A330-200 aircraft in March, April, May and June in 2012 for North America and International service.

* Added two Boeing 717-200 aircraft in January and February 2012 for Neighbor Island service.

* Took delivery of two ATR42-500 twin-turboprop aircraft to inaugurate new service to Molokai and Lanai in 2013.

New routes and increased frequencies

* Honolulu to Fukuoka, Japan daily service launched April 2012

* Honolulu to New York City (JFK), New York, daily service launched June 2012

* Honolulu to Sapporo, Japan three-times-weekly service launched October 2012

* Honolulu to Brisbane, Australia three-times-weekly service launched November 2012

* Honolulu to Seoul, South Korea increased from four times weekly to daily July 2012

* Maui to San Jose and Oakland, California increased from three and four times weekly,
respectively, to daily October 2012

* Announced Honolulu to Auckland, New Zealand three-times-weekly service beginning March

* Announced Honolulu to Taipei, Taiwan with service daily beginning July 2013

* Honolulu to Sydney, Australia from daily to ten weekly flights April to May 2013

* Maui to Los Angeles, California increased from daily to twice daily service summer 2013
New Partnership, Code-Share and Frequent Flyer agreements

* Partnered with Air China and China International Travel Service to offer connections and market Hawaii vacation packages in China.

* Entered into new frequent flyer and code-share agreements with All Nippon Airways, JetBlue and Virgin America.

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