Frontier Airlines Reports Improved Profitability for the Third Quarter of 2022

Frontier Airlines, Inc.

DENVER, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Frontier Group Holdings, Inc. (Nasdaq: ULCC), parent company of Frontier Airlines, Inc., today reported a quarterly profit for the third quarter of 2022, its second consecutive quarterly profit, underpinned by record ancillary revenue per passenger and an improvement in unit costs.

Total operating revenue for the third quarter of 2022 was $906 million, 35 percent higher than the corresponding quarter in 2019. Ancillary revenue per passenger during the quarter was a record $78, 38 percent higher than the corresponding quarter in 2019, contributing to a 26 percent increase in revenue per available seat mile ("RASM") over the same period. Operating expenses totaled $850 million or 10.57 cents of costs per available seat mile ("CASM") during the third quarter, which was 11 percent lower than the prior quarter. Comments about relative operating statistics exclude pandemic-affected quarters during 2020.

Earnings before taxes for the quarter were $58 million, while adjusted (non-GAAP) earnings before taxes were $47 million, reflecting a pre-tax margin of 6.4 percent and an adjusted pre-tax margin of 5.2 percent (on a non-GAAP basis excluding special items). Net income for the third quarter of 2022 was $31 million, or $33 million on an adjusted (non-GAAP) basis.

"We are proud of our 26 percent increase in RASM versus 2019 and the improvement in unit costs versus the second quarter, which delivered an adjusted pre-tax margin of 5.2 percent, nearly double the prior quarter margin," said Barry Biffle, president and CEO. "Further, we achieved another record quarter of $78 of ancillary revenue per passenger."

"Leisure demand has structurally changed with customers having more flexibility and a desire to travel more often," Biffle added. "With our Low Fares Done Right model and significant order book of A320neo family aircraft, Frontier is positioned to capture a disproportionate share of the growing leisure segment as America's ultra-low-cost carrier. The dedicated members of Team Frontier are the foundation of our success, and I'm immensely proud of them."

The following is a summary of select financial results for the third quarter of 2022, including both GAAP and adjusted (non-GAAP) metrics. Refer to “Reconciliations of Non-GAAP Financial Information” in the appendix of this release.

(unaudited, in millions, except for percentages)
		Three Months Ended September 30,
			2022								2021								2019
		As Reported (GAAP)				Adjusted (Non-GAAP)				As Reported (GAAP)				Adjusted (Non-GAAP)				As Reported (GAAP)				Adjusted (Non-GAAP)
Total operating revenues		$	906			$	906			$	630			$	630			$	669			$	669
Total operating expenses		$	850			$	861			$	587			$	658			$	560			$	581
Pre-tax income (loss)		$	58			$	47			$	41			$	(30	)		$	113			$	92
Pre-tax income (loss) margin			6.4	%			5.2	%			6.5	%			(4.8	)%			16.9	%			13.8	%
Net income (loss)		$	31			$	33			$	23			$	(24	)		$	87			$	72

Third Quarter 2022 Highlights:

• Achieved total operating revenues of $906 million, 35 percent higher than the corresponding quarter in 2019 and 44 percent higher than the corresponding quarter in 2021

• Generated a record $78 of ancillary revenue per passenger during the third quarter of 2022, 38 percent higher than the corresponding quarter in 2019, 23 percent higher than the corresponding quarter in 2021 and four percent higher than the prior quarter

• Realized a 6.4 percent pre-tax margin, or a 5.2 percent adjusted pre-tax margin (on a non-GAAP basis excluding special items), nearly double the adjusted pre-tax margin in the prior quarter

• Ended the quarter in a strong liquidity position with $674 million of unrestricted cash and cash equivalents, or $251 million net of total debt

• Took delivery of the first 240-seat A321neo aircraft in late September and two A320neo aircraft during the quarter, bringing the total fleet size to 115 aircraft and increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 70 percent as of September 30, 2022

• Operated the most fuel-efficient fleet of all major U.S. carriers when measured by available seat miles ("ASMs") per fuel gallon consumed, generating 101 ASMs per gallon during the third quarter of 2022, four percent higher than the corresponding quarter in 2019

• Announced expanded service in 18 domestic markets and seven international markets
  

Looking forward to the fourth quarter, the Company expects strong travel demand and continued RASM strength, with capacity anticipated to grow 15 to 17 percent versus the corresponding quarter in 2019. Adjusted pre-tax margin is anticipated to be between 3 and 7 percent (on a non-GAAP basis excluding special items). See "Forward Guidance" below for further information, including with respect to non-GAAP guidance.

Revenue Performance

Total GAAP operating revenue for the third quarter of 2022 was $906 million, 35 percent higher than the corresponding quarter in 2019, with total operating revenue per passenger of $135, 24 percent higher than the corresponding quarter in 2019. Ancillary revenue per passenger during the quarter was a record $78, 38 percent higher than the corresponding quarter in 2019, contributing to a 26 percent increase in RASM over the same period. The exceptional revenue performance was achieved alongside capacity growth of eight percent over the corresponding quarter in 2019 to eight billion ASMs.

Average daily aircraft utilization increased to 11.1 hours per day in the third quarter of 2022, with a further improvement to over 11.5 hours per day expected in the fourth quarter as operations continue to normalize through the travel recovery.

Cost Performance

Total operating expenses for the third quarter of 2022 were $850 million, including $12 million in net transaction and merger-related credits associated with the Company's terminated combination with Spirit Airlines, Inc. ("Spirit") and $1 million of costs related to a one-time contract ratification incentive for the Company's aircraft technicians. Excluding these items, adjusted (non-GAAP) total operating expenses were $861 million, including $306 million of fuel expenses at an average cost of $3.85 per gallon. Adjusted (non-GAAP) total operating expenses (excluding fuel) were $555 million. On a unit basis, CASM was 10.57 cents in the third quarter, while adjusted CASM was 10.71 cents and adjusted CASM (excluding fuel), was 6.90 cents.

Adjusted CASM including net interest in the third quarter totaled 10.68 cents and was eight percent lower than the prior quarter, primarily due to a 13 percent lower average fuel cost per gallon coupled with lower station costs, higher utilization and longer stage length, partly offset by higher maintenance costs.

Adjusted CASM (excluding fuel), declined 5 percent compared to the prior quarter, to 6.90 cents, and is expected to further improve in the fourth quarter as utilization continues to normalize towards pre-pandemic levels and cost management efforts materialize. Additionally, the Company accepted delivery of its first A321neo aircraft at the end of September 2022. This aircraft is expected to drive meaningful scale efficiencies by way of fuel savings and higher average seats per departure. Another five A321neo aircraft deliveries are expected during the fourth quarter of 2022, with a total of 36 expected by the end of 2023, including direct leases. Compared to the corresponding quarter in 2019, Adjusted CASM, excluding fuel, was higher due, in part, to lower average daily aircraft utilization and stage length, which are continuing to recover to more optimal levels, as well as labor cost inflation.

Cash and Liquidity

Frontier ended the third quarter of 2022 with $674 million of unrestricted cash and cash equivalents, or $251 million net of total debt. The Company is able to access substantial liquidity, if desired, through its co-brand credit card program and related brand assets based on similar debt financings by other airlines.

Fleet

As of September 30, 2022, Frontier had a fleet of 115 Airbus single-aisle aircraft, all financed with operating leases that expire between 2022 and 2034, as follows:

Equipment	Quantity	Seats
A320neo	80	186
A320ceo	13	180 - 186
A321ceo	21	230
A321neo	1	240
Total fleet	115

Frontier’s fleet is the most fuel-efficient of all major U.S. carriers when measured by ASMs per fuel gallon consumed, generating 101 ASMs per gallon during the third quarter of 2022, four percent higher than the corresponding quarter in 2019.

Frontier took delivery of two A320neo and its first A321neo aircraft during the third quarter.

As of September 30, 2022, the Company had commitments to take delivery of an additional 236 aircraft to be delivered through 2029, including purchase commitments for 69 A320neo aircraft, 157 A321neo aircraft and another 10 A321neo aircraft through direct leases.

During the fourth quarter of 2022, the Company expects seven A320neo family aircraft deliveries, of which five are A321neo aircraft. By the end of 2023, the Company expects to have a total of 36 A321neo aircraft in its fleet. The A320neo family of aircraft is anticipated to contribute meaningfully to a reduction in CASM, supported by the A321neo's materially higher seats per departure compared to the Company's current average and significantly higher fuel efficiency, leading to improved cost efficiency versus industry carriers.

Forward Guidance

The fourth quarter 2022 guidance provided below is based on the Company's current estimates and is not a guarantee of future performance. This guidance is subject to significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in the Company's reports on file with the SEC. Frontier undertakes no duty to update any forward-looking statements or estimates, except as required by applicable law. Further, this guidance excludes special items because such amounts cannot be determined at this time.

Looking forward to the fourth quarter, the Company expects strong travel demand and continued RASM strength, bolstered by continued improvement in ancillary revenue performance. Capacity is anticipated to grow 15 to 17 percent versus the corresponding quarter in 2019. Fuel costs are expected to be between $3.70 to $3.75 per gallon based on the blended fuel curve on October 21, 2022 and adjusted (non-GAAP) total operating expenses (excluding fuel) are anticipated to be between $565 and $585 million. Adjusted pre-tax margin is anticipated to be between 3 and 7 percent (on a non-GAAP basis excluding special items). The current forward guidance estimates are presented in the following table:

	Fourth Quarter
	2022(a)
Capacity growth (versus 4Q 2019)(b)	15% to 17%
Adjusted total operating expenses (excluding fuel) ($ millions)(c)	$565 to $585
Average fuel cost per gallon(d)	$3.70 to $3.75
Effective tax rate	24%
Adjusted pre-tax margin	3% to 7%
Pre-delivery deposits, net of refunds - year-over-year change ($ millions)	$25
Other capital expenditures ($ millions) (e)	$30-$35

_________________

(a)	Includes guidance on certain non-GAAP measures, including adjusted total operating expenses (excluding fuel) and adjusted pre-tax margin, and which excludes, among other things, special items. The Company is unable to reconcile these forward-looking projections to GAAP as the nature or amount of such special items cannot be determined at this time.
(b)	The Company's guidance is based on its expectation that demand will continue to recover to more normalized levels; the Company will monitor and adjust capacity levels as appropriate. Given the dynamic nature of the current demand environment, including any impact from COVID-19 variants, the actual capacity adjustments made by the Company may be different than what is currently expected, and those differences may be material.
(c)	Amount estimated excludes fuel expense and special items, the latter of which are not estimable at this time. The amount takes into consideration the additional expected capacity and the Company's continued investment in the post-pandemic recovery.
(d)	Estimated fuel cost per gallon is based upon the blended jet fuel curve on October 21, 2022 and is inclusive of estimated fuel taxes and into-plane fuel costs.
(e)	Other capital expenditures estimate includes capitalized heavy maintenance.

Investor Day

Frontier will host an Investor Day on November 15, 2022 from 9:00 a.m. Eastern Time (USA) until approximately 11:30 a.m. Eastern Time (USA) at Nasdaq's Times Square headquarters in New York City, NY. The event will feature a panel of speakers from the Frontier executive management team along with Justin Dennis, President of ATP Flight School ("ATP"), who will expand on the recently launched pilot cadet program, a unique partnership between Frontier and ATP.

The event will be live streamed and an archive will be available on the investor relations section of the Company's website. Registration is required for both in-person and virtual settings, though in-person participants must register at least 24 hours in advance of the event. For more information and to register, visit ir.flyfrontier.com or investorday2022.flyfrontier.com.

Conference Call

Frontier’s quarterly earnings conference call is scheduled to be held today, October 26, 2022, at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at https://ir.flyfrontier.com/news-and-events/events. For those unavailable for the live webcast, the call will be archived and available for at least 30 days on the investor relations section of the Company's website.

About Frontier Airlines

Frontier Airlines, Inc., a subsidiary of Frontier Group Holdings, Inc. (Nasdaq: ULCC), is committed to “Low Fares Done Right.” Headquartered in Denver, Colorado, the Company operates 115 A320 family aircraft and has among the largest A320neo family fleets in the U.S. The use of these aircraft and Frontier’s seating configuration, weight-saving tactics and baggage process have all contributed to Frontier’s continued ability to be the most fuel-efficient of all major U.S. carriers when measured by ASMs per fuel gallon consumed. With more than 230 new Airbus planes on order, including direct leases, Frontier will continue to grow to deliver on the mission of providing affordable travel across America.

Cautionary Statement Regarding Forward-Looking Statements and Information

Certain statements in this release should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company’s current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the Company’s operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.

Actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the potential future impacts of the COVID-19 pandemic, including any future variants or subvariants of the virus, and possible outbreaks of another disease or similar public health threat in the future, on the Company’s business, operating results, financial condition, liquidity and near-term and long-term strategic operating plan, including possible additional adverse impacts resulting from the duration and spread of the pandemic; unfavorable economic and political conditions in the states where the Company operates and globally; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel, including as a result of the recent conflict between Russia and Ukraine; the Company's reliance on technology and automated systems to operate its business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; the Company’s reliance on third-party service providers and the impact of any failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their provision of services; adverse publicity; and/or harm to the Company's brand or reputation; reduced travel demand and potential tort liability as a result of an accident, catastrophe or incident involving the Company, its codeshare partners, or another airline; terrorist attacks, international hostilities or other security events, or the fear of terrorist attacks or hostilities, even if not made directly on the airline industry; increasing privacy and data security obligations or a significant data breach; further changes to the airline industry with respect to alliances and joint business arrangements or due to consolidations; changes in the Company's network strategy or other factors outside its control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders; the Company's reliance on a single supplier for its aircraft and two suppliers for its engines, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions on the Company's operations; extended interruptions or disruptions in service at major airports where the Company operates; the impacts of seasonality and other factors associated with the airline industry; the Company's failure to realize the full value of its intangible assets or its long-lived assets, causing the Company to record impairments; the costs of compliance with extensive government regulation of the airline industry; costs, liabilities and risks associated with environmental regulation and climate change; the Company's inability to accept or integrate new aircraft into the Company's fleet as planned; the impacts of the Company's significant amount of financial leverage from fixed obligations, the possibility the Company may seek material amounts of additional financial liquidity in the short-term and the impacts of insufficient liquidity on the Company's financial condition and business; failure to comply with the covenants in the Company's financing agreements or failure to comply with financial and other covenants governing the Company's other debt; changes in, or failure to retain, the Company's senior management team or other key employees; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions; increases in insurance costs or inadequate insurance coverage; and other risks and uncertainties set forth from time to time under sections captioned "Risk Factors" in the Company's reports and other documents filed with the SEC, including the Company's Quarterly Report on Form 10-Q being filed at or around the date hereof.

Frontier Group Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in millions, except for per share data)

		Three Months Ended September 30,												Percent Change						Nine Months Ended September 30,												Percent Change
			2022				2021				2019			2022 vs. 2021			2022 vs. 2019				2022				2021				2019			2022 vs. 2021			2022 vs. 2019
Operating revenues:
Passenger		$	883			$	610			$	652			45	%		35	%		$	2,361			$	1,408			$	1,807			68	%		31	%
Other			23				20				17			15	%		35	%			59				43				46			37	%		28	%
Total operating revenues			906				630				669			44	%		35	%			2,420				1,451				1,853			67	%		31	%
Operating expenses:
Aircraft fuel			306				166				164			84	%		87	%			856				389				468			120	%		83	%
Salaries, wages and benefits			182				161				108			13	%		69	%			528				454				373			16	%		42	%
Aircraft rent			140				128				96			9	%		46	%			401				399				270			1	%		49	%
Station operations			101				108				91			(6	)%		11	%			326				285				252			14	%		29	%
Sales and marketing			42				33				36			27	%		17	%			120				80				96			50	%		25	%
Maintenance, materials and repairs			42				29				24			45	%		75	%			107				82				60			30	%		78	%
Depreciation and amortization			8				10				10			(20	)%		(20	)%			36				28				35			29	%		3	%
CARES Act credits			—				(72	)			—			N/M			N/M				—				(295	)			—			N/M			N/M
Transaction and merger-related costs, net			(12	)			—				—			N/M			N/M				8				—				—			N/M			N/M
Other operating			41				24				31			71	%		32	%			128				60				58			113	%		121	%
Total operating expenses			850				587				560			45	%		52	%			2,510				1,482				1,612			69	%		56	%
Operating income (loss)			56				43				109			30	%		(49	)%			(90	)			(31	)			241			190	%		N/M
Other income (expense):
Interest expense			(4	)			(4	)			(2	)		—	%		100	%			(16	)			(31	)			(8	)		(48	)%		100	%
Capitalized interest			3				1				2			200	%		50	%			6				3				8			100	%		(25	)%
Interest income and other			3				1				4			200	%		(25	)%			5				1				12			400	%		(58	)%
Total other income (expense)			2				(2	)			4			N/M			(50	)%			(5	)			(27	)			12			(81	)%		N/M
Income (loss) before income taxes			58				41				113			41	%		(49	)%			(95	)			(58	)			253			64	%		N/M
Income tax expense (benefit)			27				18				26			50	%		4	%			(18	)			(9	)			58			100	%		N/M
Net income (loss)		$	31			$	23			$	87			35	%		(64	)%		$	(77	)		$	(49	)		$	195			57	%		N/M
Earnings (loss) per share:
Basic (a)		$	0.13			$	0.10			$	0.40			30	%		(68	)%		$	(0.36	)		$	(0.23	)		$	0.93			57	%		N/M
Diluted (a)		$	0.13			$	0.10			$	0.40			30	%		(68	)%		$	(0.36	)		$	(0.23	)		$	0.93			57	%		N/M
Weighted average shares outstanding:
Basic (a)			218				215				199			1	%		10	%			218				210				199			4	%		10	%
Diluted (a)			220				218				200			1	%		10	%			218				210				200			4	%		9	%

__________________

(a)

Share amounts included in the basic and diluted earnings (loss) per share calculations for 2022 and 2021, as reflected in the condensed consolidated statements of operations, include the impact of the 15 million shares issued and sold by the Company as part of its initial public offering that closed on April 6, 2021. Additionally, in periods of net income, the dilutive impact of the 3.1 million warrants outstanding relating to CARES Act funding, any non-participating options and unvested restricted stock units are included in the diluted earnings per share calculations. In addition, most of the Company's 7.5 million outstanding options are participating securities and are therefore not expected to be part of the Company's diluted share count under the two-class method until they are exercised, but, in periods of net income, are included as an adjustment to the numerator of the Company's earnings per share calculation as they are eligible to participate in the Company's earnings. The participating securities impact has been subtracted from periods presented with positive net income in the computation of basic and diluted earnings per share.

Frontier Group Holdings, Inc. Selected Operating Statistics (unaudited)
	Three Months Ended September 30,									Percent Change						Nine Months Ended September 30,									Percent Change
	2022			2021			2019			2022 vs. 2021			2022 vs. 2019			2022			2021			2019			2022 vs. 2021			2022 vs. 2019
Available seat miles (ASMs) (millions)	8,040			7,505			7,463			7	%		8	%		23,076			19,031			20,560			21	%		12	%
Departures	42,627			40,418			37,432			5	%		14	%		122,040			101,953			100,802			20	%		21	%
Average stage length (statute miles)	974			960			1,033			1	%		(6	)%		976			965			1,055			1	%		(7	)%
Block hours	113,922			107,038			103,185			6	%		10	%		329,533			269,655			284,149			22	%		16	%
Average aircraft in service	112			109			90			3	%		24	%		111			105			86			6	%		29	%
Aircraft – end of period	115			112			93			3	%		24	%		115			112			93			3	%		24	%
Average daily aircraft utilization (hours)	11.1			10.6			12.5			5	%		(11	)%		10.9			9.4			12.2			16	%		(11	)%
Passengers (thousands)	6,704			5,958			6,137			13	%		9	%		18,650			14,813			16,713			26	%		12	%
Average seats per departure	193			193			192			—	%		1	%		193			193			192			—	%		1	%
Revenue passenger miles (RPMs) (millions)	6,635			5,807			6,405			14	%		4	%		18,547			14,562			17,797			27	%		4	%
Load Factor (%)	82.5	%		77.4	%		85.8	%		5.1 pts			(3.3) pts			80.4	%		76.5	%		86.6	%		3.9 pts			(6.2) pts
Fare revenue per passenger ($)	57.57			42.74			52.60			35	%		9	%		55.49			38.36			54.15			45	%		2	%
Non-fare passenger revenue per passenger ($)	74.18			59.77			53.64			24	%		38	%		71.09			56.72			53.97			25	%		32	%
Other revenue per passenger ($)	3.45			3.24			2.68			6	%		29	%		3.18			2.85			2.74			12	%		16	%
Total ancillary revenue per passenger ($)	77.63			63.01			56.32			23	%		38	%		74.27			59.57			56.71			25	%		31	%
Total revenue per passenger ($)	135.20			105.75			108.92			28	%		24	%		129.76			97.93			110.86			33	%		17	%
Total revenue per available seat mile (RASM) (¢)	11.27			8.40			8.96			34	%		26	%		10.49			7.62			9.01			38	%		16	%
Cost per available seat mile (CASM) (¢)	10.57			7.83			7.49			35	%		41	%		10.88			7.79			7.84			40	%		39	%
CASM (excluding fuel) (¢)	6.76			5.62			5.29			20	%		28	%		7.17			5.74			5.56			25	%		29	%
CASM + net interest (¢)	10.55			7.85			7.44			34	%		42	%		10.90			7.93			7.78			37	%		40	%
Adjusted CASM (¢)	10.71			8.77			7.77			22	%		38	%		10.80			9.28			7.79			16	%		39	%
Adjusted CASM (excluding fuel) (¢)	6.90			6.55			5.57			5	%		24	%		7.09			7.24			5.52			(2	)%		28	%
Adjusted CASM + net interest (¢)	10.68			8.79			7.72			22	%		38	%		10.79			9.31			7.73			16	%		40	%
Fuel cost per gallon ($)	3.85			2.19			2.13			76	%		81	%		3.76			2.06			2.21			83	%		70	%
Fuel gallons consumed (thousands)	79,566			75,938			76,898			5	%		3	%		227,559			189,003			211,774			20	%		7	%
Employees (FTE)	6,126			5,405			4,811			13	%		27	%		6,126			5,405			4,811			13	%		27	%

Reconciliations of Non-GAAP Financial Information

The Company is providing below a reconciliation of GAAP financial information to the non-GAAP financial information provided. The non-GAAP financial information is included to provide supplemental disclosures because the Company believes they are useful additional indicators of, among other things, its operating and cost performance. These non-GAAP financial measures have limitations as analytical tools. Because of these limitations, determinations of the Company’s operating performance or CASM excluding unrealized gains and losses, special items or other items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. These non-GAAP financial measures may be presented on a different basis than other companies using similarly titled non-GAAP financial measures.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Adjusted Pre-tax Income (Loss)

($ in millions) (unaudited)
		Three Months Ended September 30,												Nine Months Ended September 30,
			2022				2021				2019				2022				2021				2019
Net income (loss), as reported		$	31			$	23			$	87			$	(77	)		$	(49	)		$	195
Non-GAAP Adjustments:
Aircraft Rent
Early lease termination costs(a)			—				1				—				—