DeAnne Gabel - Investor Relations Ben Baldanza - Chief Executive Officer Ted Christie - Chief Financial Officer Thomas Canfield - General Counsel John Bendoraitis - Chief Operating Officer Ted Botimer - Senior Vice President, Network and Revenue Management

Hunter Keay - Wolfe Research, LLC Michael Linenberg - Deutsche Bank AG Duane Pfennigwerth - Evercore Partners Inc. Joe DeNardi - Stifel, Nicolaus & Company David Fintzen - Barclays Capital Savi Syth - Raymond James Stephen Trent - Citigroup Dan McKenzie - The Buckingham Research Group Incorporated Steve O'Hara - Sidoti & Company, Inc. David Van Der Keyl - Band of America Merrill Lynch

Welcome to the Fourth Quarter 2014 Earnings Release Conference Call. My name is Richard, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to Ms. DeAnne Gabel. Ms. Gabel, you may begin.

Thank you, Richard. Welcome to Spirit Airlines fourth quarter 2014 earnings conference call. Presenting today will be Ben Baldanza, Spirit's Chief Executive Officer; and Ted Christie, our Chief Financial Officer. Also joining us for the Q&A session today are Thomas Canfield, our General Counsel; John Bendoraitis, our Chief Operating Officer; and Ted Botimer, our Senior Vice President of Network and Revenue Management; and other members of our senior leadership team. Today's discussion contains forward-looking statements that represent the company's current expectations or beliefs concerning future events and financial performance. Forward-looking statements are not a guarantee of future performance or results and are based on information currently available and/or management's belief as of today, February 10, 2015, and are subject to significant risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements, including the information under the caption Risk Factors included in our annual report on Form 10-K and quarterly reports on Form 10-Q. We undertake no duty to update any forward-looking statements. In comparing results today, we will be adjusting all periods to exclude special items and non-operating special charges. Please refer to our fourth quarter 2014 earnings press release for further details regarding our assumptions for the reconciliation to the most directly comparable GAAP measure. And with that, I’ll turn the call over to Ben.

Thanks, DeAnne, and thanks to everyone for joining us. Today, we reported strong fourth quarter results and our eight straight full year of profitability. During 2014, we achieved our goal of maintaining low fares, while improving our cost structure and delivering high margins. We grew capacity 17.9%, grew revenue 16.8% to $1.9 billion, increased net income 33.3% and had a pretax return on invested capital of 30.1%. Our team also did a great job delivering operational reliability by maintaining a high completion factor, improving our on-time performance and increasing customer satisfaction as our customers understanding of our Bare Fare plus Frill Control product design grew throughout the year. I want to thank our team members who contributed to our strong operational and financial performance in 2014. Turning to our fourth quarter 2014 results compared to the fourth quarter last year, net income increased 43.2%, operating income grew 46.1% and our operating margin expanded 4.5 percentage point to a record fourth quarter operating margin of 19.9%. Topline revenue grew 13% year-over-year, with total revenue per ASM decreasing 5.1% on a capacity increase of 18.9%. Non-ticket revenue per passenger flight segment was about flat year-over-year. However, during the fourth quarter the company transitioned its onboard catering to a third-party provider under a revenue share agreement, resulting in non-ticket revenue being lower than it would otherwise have been. Catering costs were correspondingly lower such that our margin benefit was and is expected to continue to be a slight positive. In the fourth quarter, in addition to launching service on seven new routes, we announced we will soon add 10 new non-stop destinations from Houston George Bush Intercontinental airport, including seven detonations in Latin America. With these additions, Houston will be our second largest base of international flights. In January we had our inaugural flight from Cleveland. We're excited about adding Cleveland to our network and we will soon offer service to nine destinations from Cleveland. Throughout 2015, we expect to offer our Bare Fare plus Frill Control product at approximately 35 new routes. Our accomplishments in 2014 set us up well 2015. I will share more about our outlook for 2015 after Ted updates you on our cost performance for the quarter. With that, here is Ted.

Thanks, Ben, and again, thanks to all of you for joining us today. I want to start by congratulating and thanking our team for their contributions in making 2014 a very successful year and for once again delivering industry-leading margins. Our CASM x fuel for the fourth quarter 2014 came in at $5.61, a decrease of 2.9% year-over-year. This was quite a bit better than our initial guidance for the quarter, largely driven by litigation settlement gain and refinement of our utilization plans for several engines, which resulted in lower than expected supplemental rent. In addition, we had an end of year airport true-up that came in higher and sooner than we expected. Compared to the fourth quarter last year, the decrease in CASM x fuel was primarily driven by lower distribution expense, aircraft rent and maintenance expense per ASM. Distribution expense per ASM in the fourth quarter 2014 was lower compared to the same period last year, primarily due to the one-time litigation settlement gain of approximately $2.9 million and a larger percentage of our tickets being booked directly through spirit.com, our lowest cost distribution channel. The decrease in maintenance cost per ASM year-over-year was driven by an expense reversal in the fourth quarter 2014 associated with an insurance claim, along with lapping a one-time $750,000 insurance deductible payment in the fourth quarter of 2013. The decrease in aircraft rent per ASM was driven by a change in the mix of leased and purchased aircraft. In addition, our teams continued focus on improving our reliability and our overall cost structure continues to drive benefits. Throughout all of 2014, our team did a great job driving cost improvements. Full year 2014 adjusted CASM x fuel decreased 0.5%, despite 200 basis points of pressure from depreciation and amortization related to increased amortization of heavy maintenance events and additional pilot costs as a result of FAR 117. In the fourth quarter, we transitioned our onboard catering to a third-party provider under a revenue share agreement. This initiative will lower cost and complexity, and contribute margin improvement in 2015. Q4 also saw the introduction of on balance sheet financing for four aircraft, which will help our aircraft ownership economics going forward by leveraging our strong balance sheet. In addition, there were other cost initiatives we implemented in mid-to-late 2014 that aren’t yet reflected in the full run rate of our costs, including a modified and extended credit card processor agreement, a revamped rotable spare parts supply and repair agreement, a few renegotiated and extended leases on aircraft and engines that lower our overall rate and a new heavy aircraft maintenance agreement with Lufthansa Technik in Puerto Rico to name a few. As we hit our stride in our growth profile, we believe we can continue to leverage our increased scale to provide incremental cost benefits. Our team's dedication and commitment to improve our ultra-low cost structure positions us well to deliver a step function change in our cost structure for 2015, which will further increase our competitive cost advantage. During the quarter we announced our Board of Directors authorized up to $100 million for share repurchases. We still believe that investing in our business is the best use of our cash. However, given the volatility we've seen recently in the stock, we do think it would be beneficial to have the ability to opportunistically step in and repurchase shares when appropriate. We ended the year with $633 million in unrestricted cash. During the fourth quarter we took delivery of seven new A320 aircraft, bringing our total fleet at year end to 65. We plan to take delivery of 15 aircraft in 2015, two of which entered the fleet in January and have debt commitments in place for the first 11 deliveries and a direct lease arrangement for our first A320neos scheduled for delivery in the fourth quarter of 2015. Turning now to our 2015 cost guidance, based on the forward curve as of February 5th, we estimate our fuel price per gallon for the first quarter will be $1.90. We have protected approximately 81% of our first quarter 2015 fuel volume, 60% of our second quarter and 15% of the second half of 2015, using out of the money jet fuel call options, which allow us to participate 100% in the movement down in fuel price. More details will be provided in our investor update file later today, but we have structured our call options to provide the most upside protection for minimal premium expense. Capacity is expected to be up approximately 25.8% year-over-year in the first quarter, up 31.5% in the second quarter, up 33.5% in the third and up 30.5% in the fourth for a full year increase of about 3.5%. For the first quarter 2015 we estimate our CASM x fuel will be down 4% to 6% year-over-year. For the full year 2015, we will see the full benefits of all the initiatives launched in 2014 that I've previously mentioned and the result will be a reduction in our CASM x fuel of 6% to 8% year-over-year. On a unit cost basis, we expect salaries, wages and benefits and aircraft rent to be the largest drivers of decreased CASM x fuel in the first quarter and full year 2015. Aircraft rent per ASM will benefit as we take on additional debt financed versus leased aircraft, and as we grow with larger gauge aircraft, we get a per unit cost benefit in salaries, wages and benefits. Overall, 2015 will prove to be a very exciting year for Spirit and I am proud we can deliver on our promise of growth, along with continued declines in our unit cost. With that, I will turn it back to Ben.

Thanks, Ted. In addition to many other accomplishments, in 2014 we were recognized as the most fuel efficient airline by the International Council on Clean Transportation and named the Value Airline of the Year by Air Transport World and we are able to grow and further strengthen our competitive position. We look forward to what’s ahead in 2015 and we will push our team to continuously get better with our focus on successfully managing our growth, including continuously improving our operation to better on-time performance and high reliability, along with high customer satisfaction metrics, as we help customers better understand our business model. And on the cost side, as Ted mentioned, we plan to leverage our growth and resources to make a big move in cost in 2015. We know that the environment can at times be volatile, but we can always rely on our ultra-low cost structure to give us room to grow. Last quarter we noted that our growth may create a near-term drag on RASM as markets spool to maturity. In 2015, we will have about a third of our network under development. If you include our markets in Dallas that are recalibrating following the Wright amendment expiration, we have about 40% of our capacity developing throughout the year. In addition, we continue to see compression in the pricing structure in many of our markets primarily for travel on off-peak days. When the industry’s highest cost input decreases 40% to 50%, it’s a not surprise to see a drop in the pricing of marginal capacity. We characterize this as a change rather than as good or bad. And as with any change, we will manage our business as effectively as possible to protect our margin expectations. As we pointed out in the past, we are uniquely different airline. We run our business differently than other U.S. airlines. We target different customers. We are growing at a faster rate than others. And we target higher returns. Some of the common metrics generally used to assess the industry are not as applicable in assessing our performance. By design, we aim to delivering consistent high returns even as the input components may fluctuate. Even with this, we heard a lot of chatter about the implied RASM change in our initial guide for the first quarter 2015. For a carrier growing 15%, 20%, or 30%, if you judge the quality of earnings by just the topline growth, you will miss the power of what’s happening with the cost structure. In fact, we make fleet investment decisions long before we know what the operating environment will be when they deliver. When we ordered our aircraft, we are very comfortable with our fleet growth for 2015 and oil was much higher than it is now. We think oil being lower increases our opportunity for growth, even if that means we achieve our high margins and grow earnings through lower RASM and much lower CASM. Despite having only a slight glimpse as to what March bookings look like, based on the current pricing environment and assuming fuel at $1.90, we estimate our first quarter 2015 operating margin will be between 21% and 24%. Together with the CASM guidance Ted gave, that implies a RASM decline of 9% to 11%, we estimate about a third of the RASM decline is attributable to the ramp of our new markets and an increase in our average aircraft gauge as we bring on more A320s, which was all expected as we layer in our growth for 2015. Another third is being driven by price structure compression in many of our markets, which is unusual over the past two to three years, but not at all impressive other than in our industry. We know how to react and deal with this type of pricing behavior and expect it to evolve throughout the year. The remainder of our RASM decline is driven specifically by what we are seeing in Dallas, as a result of the aggressive pricing trends we assume are related to the large increase in capacity in Wright amendment markets. As a relatively small player in the Dallas market, we will manage our business as the two large players eventually reach pricing stability. Even with these recent changes in the Dallas market, Dallas continues to make very good money for us. For the full year 2015, given the current demand environment, pricing trends, fuel cost, and when we expect regarding our own cost structure, we estimate our operating margin will be between 24% and 29%. We feel very good about how we are positioned for the year and look forward to this year of high growth, high margins and high returns. Now back to DeAnne.

Thank you, Ben and Ted. We are now ready to take questions from the analysts. We do ask that you limit yourself to one question with one follow-up. If you have additional questions, you are welcome to place yourself back in the question queue and we will allow for additional questions as time permits. Richard, with that, we are ready to begin.

[Operator Instructions] Our first question in line comes from [Mr. William Green] [ph]. Please go ahead.

Yeah. Hi, there. Good morning. Thanks for taking the question.

Hey, Bill.

Hi, there. Ben, can I ask you for your thoughts on how you think this ultimately ends up playing out? You sort of referenced in the past there in terms of how the industry reacts. What’s the working assumption, or how do you plan out the year from the perspective of the industry fare environment, like how much of this fuel do you expect eventually makes it through into the prevailing fares that we see out there in your markets?

Bill, its good question. And we are still trying to figure out what all these means obviously. I think the thing to recognize and we mentioned this in our script is that when the largest input costs drop, it makes it more economic to sell lower fares to fill marginal capacity, and that’s what we see happening, especially in offer lower peak periods in the timeframe. There is just more seats available to fill and economically they can be filled at lower prices, and that’s what’s happening. Price drives the marginal cost, that’s basic economics, right. That doesn’t suggest that in peak times we should necessarily see most of that benefit going back to the customer. Now we’ve not yet had a really peaky time of 2015 yet. So we are sort of prospectively guessing like you as to how the industry may react as we move into a more peak period if oil prices stay relatively low. Now we’ve all seen them tip up a bit in the last couple days. So it’s kind of unclear where that’s going to go. In general, we think that in off-peak time period, there is going to be pressure to fill empty seats, that’s going to put pressure on certainly our RASM, but we think that’s logical behavior by the industry. We are not blaming anybody for that. And then in peak periods, we as well as the rest of the industry should be able to take a little bit more the fuel benefit into margin.

Makes sense. Let me ask you a follow-up here on elasticity. So we often think of your customer base as being far more sensitive to the prevailing pride that they may pay, the fare that they actually see. How do you or can you even say how you’ve seen elasticity change given the drop in fuel, not so much because of fares but because of money in their pocket books?

It’s hard to sort of make a strong correlation there yet. It’s certainly our assumption that as consumers fill up their gas tank five or six times and start to actually materially realize the extra cash in their pockets that that should generate a little bit more discretionary spend which we hope some of that will be spent on travel and Spirit would be the natural attractive carrier I think for that type of person, that’s saying I’ve got a little extra money maybe I will take an extra trip. We haven’t been able to see that in price elasticity yet. I think it’s just premature to say what’s going to happen there. Although certainly I think if consumers benefit from lower fuel prices for a long period of time, that should be good for the most price discretionary carrier which is us.

Yeah. All right. I appreciate the time. Thanks.

Thanks.

[Operator Instructions] Our next question in line comes from Hunter Keay. Please go ahead.

Hey, thanks, everybody. Good morning.

Hey, Hunter.

Ben, is the Dallas market structurally different today than you thought it would be when you first sort of laid out the plan there, which I think was probably predicated around the assumption that AMR was going to file bankruptcy and maybe you assume they were going to shrink. I am wondering if it maybe is a time to sort of re-evaluate the amount of service that you guys have in that market, given some of the permanent changes that we’ve seen over the last few months. Even if this fare discounting that we’re seeing from Wright amendment is temporary, is Dallas what you thought it was going to be in 2011?

I think Dallas is better than we thought it would be in 2011. And our entry into Dallas really had absolutely nothing to do with Americans’ position at that time. What we identified in Dallas was a fairly large unserved market, which were travelers who just simply could not afford the prices in Dallas at that time, but would be willing to travel at lower prices. And just as we've done in other large cities in the U.S., adding service to attract the market that the industry was not attracting was appealing to us. Americans own -- so we never assumed that American was going to -- we always assumed American was going to get itself fixed. And they've done a great job of that so far and that was always our assumption. We also knew that the Wright Amendment was going to expire and we knew that that would change the dynamic certainly, of at least the relationship between DFW and Love Field. But I think -- Hunter, I think if you look at other places, I think you could see a good model. If you look in Chicago, for example which is a city, not too different in size from Dallas in terms of a travel in and out. We have a large airport at O'Hare where both American and United operate large hubs. We operate at O'Hare with a very relatively small presence and do very well. And closer into town, you have Midway where Southwest has a very large operation and there's never been a Wright Amendment there. Southwest, we assume those well in Midway. We assume United American do great in O'Hare and we know we do great in O'Hare. So there's no reason for us to think that over time, Dallas won’t look like a Chicago, which is a big city with lots of traffic, lots of affinity with demand at all points on the price scale and there will be large network carriers, a Southwest kind of carrier and a Spirit carrier that all serve our segments of the demand curve.

Okay. Thanks, Ben. And as we think about the good fuel guidance that you just gave, obviously you have protected some of your fuel consumption at a pretty low rate right now. Great CASM ex-fuel guide, too. But if fuel stays low, or if you find yourself having some sort of competitive advantage on fuel given what you have done in the hedge book, is this maybe the year to think about cheating a little bit on some non-fuel costs given the flexibility that you have now being down six to eight on a fuel cost side? As we move through the year and say, fuel cost stay low relative to others, are there some investments that maybe you guys might think about making in the year where your CASM all-in is going go be down like 50% to 20%, and have a clear payback period but you've been considering doing, or not doing, that maybe that decision gets accelerated a little bit for some logical non-capitalized investments in the business?

Hey, Hunter. It’s Ted. One of the reasons I was so excited to come to Spirit and one of the reasons I really enjoy working here is we are not cheaters, first of all, as it relates to our unit cost. We are extremely protective and disciplined in that regard. But we are also rational, financial-based managers and we make investments in the business all the time based on return. And I don't know that I would change our overall trajectory or view on that, regardless of what's happening to the fuel imports. We make smart decisions today investing in the business that are penalizing CASM, but nonetheless we think it is the right move for our growth airline and we will continue to do that over time using rationality.

Okay. Thanks everybody.

Yeah.

Our next question on the line comes from Mr. Michael Linenberg. Please go ahead.

Yeah. Hey. Good morning, everyone. Hey, Ben, I want to go back to just on the ancillary per flight segment. That was down and you mentioned the point about catering and if you didn't have the third-party caterer, that number actually would have been up. Can you tell us what the impact of it was, how much it would have been up in just -- how that number is trending into 2015? I mean, are there any initiatives on the horizon that should get that back to growth again, or should we assume that that’s going to be more flattish, maybe it reflects the maturity of that line item? How do we think about it?

Well, Mike, that line item -- thanks by the way. That line item is clearly more mature than a few years ago and we've said for a while that that’s a flatter part of the curve. Although we still -expect opportunities and marginal improvement on that number as we go through and implement a series of initiatives, some identified, some yet to be identified. In terms of specifically, the catering change, it’s just little less than a dollar for passenger that we were selling on board that showed up as revenue in the revenue line and the cost to sell that showed up in the CASM line. Now that revenue is not there and that CASM is not there. But over time, we expect to have a small bit of revenue share that will show up as a result of that deal, that’s where the margin accretion that Ted talked about will come from. So, we think we can recover that little less than a dollar through natural growth of that line. But as we’ve said for a couple of calls now, the changes in non-ticket are going to come in $0.05, $0.10 and $0.15 changes at a time, not any single $1, $2 or $3 changes.

Okay. Great. And then just a second question on the Houston strategy. It's a pretty sizable launch for you to offer all those international markets and to make it like you said, your second-largest international city and the fact is you're doing it right before Southwest. It opens up their international terminal over at Hobby. And so the question is do you run the same sort of risk that you had to deal with Southwest all of a sudden, opening up a lot of new flights out of Love Field. I mean, it wouldn’t have been easier maybe to pick another city where maybe there's just less competitors or international competitors? In fact, I would point you back to Dallas, where as you know, Southwest is precluded from flying internationally out of Love Field. You would just have one major competitor. So it does seem a little bit like you're flying into this maelstrom later this year, up against both United and Southwest. I mean, what's the effect -- what's the risk that we have a repeat of what happened in Dallas?

We just don’t see it. We just don’t see it this particularly risky growth. If you look at -- again, we are principally a local carrier as you know. We don't carry a lot of connections. So, Dallas and Houston in that sense are very different markets to places like Guatemala or Mexico City or El Salvador, things like that. And the level of service that we would provide out of either city would be a function of that local market and whether or not there's enough discretionary traffic that could fill our plane. So it's not like we would choose fly internationally in Dallas over Houston, we will fly internationally out of either city proportionate to where we see the best opportunities. Now, everything we’ve announced to add out of Houston are cities we already serve out of either, Fort Lauderdale or other places. And so in that sense, it’s a little lower growth. We know the population base there. We know the distribution there, customers know us, at least to some extent there. So by connecting a bit, it makes each one of those stations a little bit more efficient, makes our cost at those stations a little bit more efficient, makes our utilization a little more efficient. So it’s actually a pretty low risk growth. And I would say it's the timing of that growth and I know this maybe hard to believe but it’s completely unrelated to what Southwest is doing in Hubby. If you look at how we grew Dallas or how Dallas has grown and as you know, we fly three international destinations out of Dallas. Houston is growing very much the way Dallas but it just started a year and a half later. So everything you start in little a year and a half later and the local market international opportunities are just bigger. There is just more local market demand at Houston, which is 250 miles closer to Mexico and Central America than Dallas is. It’s just geographic reality. So, we think, Houston is going to do great for us. Hobby is 60, 65 miles away. When I was at Continental, we used to fly between Hobby and Intercontinental. So the reality is there is plenty of market for Southwest at Hobby. There's plenty of truly discretionary market that is not being served out of Intercontinental for us and we think United is going to do just fine serving their segment out of Intercontinental.

Great. Very good. Thanks, Ben.

Thank you. Our next question on line comes from Mr. Duane Pfennigwerth. Please go ahead.

Hey. Thanks for the time…

Hey, Duane.

…and the guidance. Just wondering in the past you talked about a longer-term target margin profile. I think that you managed to from a growth perspective. I remember back in the day, 15% to 17%, maybe you've updated it since that time. Can you talk about a longer-term target margin that you managed to?

Hey, Duane, it’s Ted. You’re right, we -- from the IPO, I’ve always talked about this long-term margin guide. Although more recently, we recognized the economics of the business and the macroeconomic conditions have divorced that margin guide from where we’re actually performing. So now we’re just more focused on how is the business performing, how we think it’s going to perform over the next foreseeable future and so we’re able to give a little bit of clarity on that. It’s clearly in the first quarter and for the year which I think is pretty positive, obviously well in excess of what that previous guide was.

Okay. And then I wonder, I guess, we’ll wait for the investor update to see kind of what the implied revenue trends. But can you just talk about the shape of the unit revenue recovery that that seems to imply. If you’re thinking it’s down 10% roughly in the first quarter, comps look like they get about six point tougher sequentially into the second quarter. It feels like it implies an improvement in the second half, which would make some sense obviously as we've think out to the fourth quarter because that’s where you begin to see some pressure but can you just help us think about the shape of that through 2015? Thanks.

Duane, this is Ben. I think the way to think about that is go back to sort of the messaging that we gave in the script whereas we’ve seen price compression is principally focused in the offbeat. And if you just look at the -- if you just take any 90-day quarter which is off-peak, there is more peak days in the second and third quarter than there are in the first quarter. That suggests to us that the kind of pressures that are -- that are driving RASM right now in the first quarter are less of an impact in the second and third quarter. And by the time, we get to the fourth quarter, we start to lap some of what we saw this year. So none of that suggest exactly sort of what we think it is going to happen in perfectly. But we certainly think that the issue gets a little better because of the relative strength and weaknesses of any -- of demand on any given day in the quarter. Quarters get stronger over the next two quarters and by the fourth quarter we’re lapping a little bit.

Thank you. Our next question in line comes from Mr. Joe DeNardi. Please go ahead.

Hey thanks. Good morning guys.

Hey Joe.

Hey Joe.

Hey Ted, on the share repurchase authorization, have you used any of that. I realized you guys are probably in a blackout period for most of it. But have you used any of it and did you see the current stock price as being sufficiently compelling to the “opportunistic” with that?

Well, I wouldn't comment on the latter as it relates to our activity. We would update our activity in our regular quarterly reports. So we file the K actually next week and then in the Qs, we would give any update as to the company's buyback activity.

Okay. And then on the margin guidance for the full year, the range is a little bit wider than it typically is. Is that just revenue related or are there certain costs that are introducing some variations later in the year?

I think it's reflective of our views on what we've seen recently a little more volatility that makes it harder in general to look in the future with any level of precision. So we've given a sense to that by broadening a range little bit. It has more to do with what we’re seeing on the revenue side than what we’re seeing on the cost side?

Okay. Thanks.

[Operator Instructions] Our next question in line comes from Mr. David Fintzen. Please go ahead.

Hey good morning everyone.

Hey Dave.

Ben, I think you mentioned in your -- in some of your prepared remarks about lower oil, sort of, creates a larger opportunity set for growth. Can you just kind of walk us through, kind of, what’s the maximum growth rate over -- and I’m not talking over short periods of time but over two, three, four years that you guys feel like you can comfortably sustain? 30 go to 40 or does it just you don’t go back to 20 after the next two years, in terms of growth. How should we think about oil in kind of long-term growth rates?

Hey, Dave. Obviously the thing that drives our growth over the next five years is our fleet plan more than any single thing. Certainly the amount that we fly that fleet can change our utilization, can change our growth rates and the sizing of the airplanes that come in can affect that to some extent. Part of our growth this year for example is taking delivery of six A321s which we expect will be very unit cost helpful and very margin accretive for the airline too. But overall, we have said for a while that we are sort of 15% to 20% growth carrier over the long -- over the next 5, 10 years kind of thing with stable margin. That’s kind of how we've talked about the investor sort of proposition at Spirit, if you will. And when we look at our fleet plan, we don't see something meaningfully different from that. In fact, earlier in 2014, you might remember that you and some others were sort of questioning whether 30% growth was too high for us and whether we were biting off too much. And we reminded you that two-year growth of 2014 to the end of 2015 was about 22% average annual which is kind of the way we've been growing. So I think, thinking of it is as 28-ish percent growth carrier over the next five years is the right way to think about it. Certainly, if fuel stays low and we can find ways to push utilization or do things, we would do that. What we won't likely do is significantly complicate the model by bringing in different airplane type, sort of, things like that, to try to take advantage of what might be just a short-term fuel effect.

Okay. But -- and opportunistically, you even try to grow the order book?

Yeah, I mean…

Okay…

We have lot of planes coming in the next couple of years and lot of big planes.

Okay.

We are going to absorb those first which we feel really good about.

Okay. And just the quick one on Q spend, talking about the fair compression in off-peak. Are you seeing any different demand dynamic in Houston or maybe there is a little more feedback into demand from lower oil maybe potentially over time but you know if it’s happened yet?

We haven’t seen anything that we can ascribe specifically to Houston customer demand being greater because of the oil market there? Houston has performed very well for us and it’s justified the growth we’re adding there and we continue to have high hopes for -- with a very strong part of the network.

Okay. Good. That’s helpful. Thank you.

Thank you. Our next question in line comes from Savi Syth. Please go ahead.

Hey good morning guys. Just on the couple of quick follow-up questions on the use of cash and our historically share buybacks wasn’t necessarily part of the top process. Wondering if you could share a little bit more about the thinking there and this is maybe returning cash to shareholders is a more of an important part of the, kind of, thinking on cash going forward?

Sure. Savi, its Ted. As we’ve said before, I would be consistent here to our viewing -- view on cash is. We’re a growth company and with that in mind, we plan to use the capital available to us either in the form of the capital markets or in the form of the capital we generate through operations to -- in a most cost effective way finance that growth. And so we would use the cash available to us as opportunistically to lower our cost profile or improve the return that our shareholders will get overtime by investing that cash either in the business or as we illustrated perhaps in our own shares as we see fit. But as I mentioned in my prepared comments, right now, we see a lot of opportunity to invest in the business going forward that we have a lot of growth coming and a lot of airplanes around that growth that we need to finance. And so we can use that cash as a lever to evaluate how much we want to finance of those airplanes or whether or not we want to finance those airplanes at all in the capital markets and that gives us some pretty good cost benefits going forward that we will take into account as well.

Got it. That makes sense. And then jut to follow up on Ben’s previous answer, from a utilization standpoint, I think you’re running around 12.5%, 12.7% right now. How much could you increase that utilization and capture any opportunity?

Yeah. It really comes down to sort of operationally what we can deliver. On the one hand, we could, on paper increase the utilization to maybe 13.5, 14 hours a day. That would put a lot of pressure on the operation to actually deliver that with some consistency reliability. So the right income answer would probably be somewhere around the 13-hour range realistically, not to save it in any given month in a year. You couldn’t do more than that to take advantage of. In July, for a year that’s ‘13, in July, you’ll be more than that of course.

Got it. All right. Very helpful. Thank you.

Thank you. Our next question on line comes from Mr. Stephen Trent. Please go ahead.

Hi. Good morning, everybody and thanks for taking my question. Just a quick one for me. You guys have done a very good job of chasing down demand and finding demand in some of these new routes. As you’re thinking about some of these new destinations, to what degree have you been influenced by capacity expansions at some of the airports particularly in LATAM?

That’s certainly being helpful in the Latin American markets, as a broad group, growing and expectations are growing in such. Again, I’ll repeat the markets that we've added for example that are growth out of Houston are all the cities we already serve from other locations. So we have a pretty good sense of where the demand is, what the price points are, what can be stimulated at different price points? And our decisions to deploy capacity are based on those expectations. And as we've done for the last number of years, we will continue to manage our capacity, as the reality comes through as to whether or not we guessed high or low.

Okay. Very helpful, Ben. And just one quick follow-up just generally speaking. You guys had mentioned some quarters back that generally you saw low-balling at several dozen domestic markets where you could expand and generate a similar level of profitably to what you have now and I see you are opening new routes this year. Do you still see that medium-term opportunity as robust as you’d mentioned two or three quarters ago?

Well, we see the opportunity for growth every bit as robust as we’ve seen it. But most of that growth and we said this in other locations as well or other venues as well, most of our growth is going to come from connecting places we already serve with modest new city growth. Last year, we opened two new cities. This year, we've opened one city, Cleveland so far and if there’s going to be another one, we’ll announce that later and that’s not even clear. So, the reality is this we already fly to where most of the people in the United States live in terms of large city. There’s a couple of obvious areas where it’s true that we don’t fly yet. But if you think about our growth over the next five years, it's going to be more connecting dots rather than adding new dots to the map.

Okay. Very helpful. That’s it for me, Ben. Thanks a lot.

Thank you. Our next question on line comes from Mr. Dan McKenzie. Please go ahead.

Hey. Good morning, guys. I guess just following up on the last question here. As of December 31st later this year, the 500 market opportunities that you guys have identified, how many do you think you will have exhausted by that point?

Well, we said we’re adding 35 markets this year. So if you believe that that graph doesn't change then 550 goes to 550, but it’s not quite that clinical. The reality is over the last couple of years as we've grown, our opportunity is also has grown because that opportunity is a function of our own cost structure and with the awesome step function in cost improvement that Ted outlined this year, that creates, that lowers that black line and puts more green dots in play, right. Our own cost structure drives it, industry capacity drives it, oil drives it somewhat to extend as well, because that drives revenues to some extent. So the reality is it’s very feasible that we could end this year 35 markets bigger and our growth opportunity be as bigger even bigger than when the year started. So you can’t just say, it’s a fixed 550 that every market we had deducts from that. It’s an evolving thing and based on the economic activity, some of which we don't control, drives how big that opportunity is. The important thing for us is that that opportunity is large and more specifically that it is larger than our growth is planned, that we have certain number of airplanes on order and we have multiple opportunities we believe for every airplane that comes onboard that we can deploy that airplane profitably. And what we don't want to do at Spirit is get our growth ahead of the market opportunity and we don't have that in place today. We have great opportunities for our growth and we want to keep it there. So whether number 550 or 525 or 575 or 480, it’s all the same answer in terms of, is there enough opportunity for the airplanes coming on in the next five years.

Well, you just answered about two of my follow-up questions, Ben, thanks. So, I guess, I go another question here. I’m wondering if you can talk about the $9 Fare Club and where you're seeing that growth originate from. I think the last -- the latest price was $80 for the Club and I guess, I’m just wondering if you can provide some perspective of how big is that the revenue pie from these repeaters? And then, separately, to what extent does the lower unemployment rate drive or not perhaps an acceleration in this demand segment?

We don’t put out a lot of information about the $9 Fare Club. It’s a proprietary club for us and we don't put out membership statistics or renewal rates or things like that. I’ll say overall, we’re very happy with the Club and as we grow, the Club creates more value for more people. And so, because the fact that you can -- you could buy our lowest fares if you are a member the Club and get discounts on bag charges as a member of the Club. It makes it of very active value play for the discretionary traveler, who says, I might want to take a couple of trips in the year. And because I'm a member of this Club and because I can get these really cheap fares, it makes it possible for me to do that. So we're happy with our growth to $9 Fare Club. It’ a good loyalty program for us and that's pretty much all we say about it.

Okay. Very good. Thanks, Ben.

Our next question online comes from Mr. Steve O'Hara. Please go ahead. Steve O'Hara: Hi. Good morning.

Hey, Steve. Steve O'Hara: I was just curious, in terms of -- and maybe you said, maybe missed it. In terms of your greatest leverage on the cost side, where those -- what line items are those for 2015? And then what is the one-third of markets in development costing you in RASM do you think this year?

Steve, its Ted. I’ll take the cost piece first and then, Ben can -- Ben or I can tag theme on the revenue side. Yeah, we see heading into the year some pretty good lever points and tailwinds for cost. First, just from a lapping perspective, obviously, this year was challenged by the -- 2014 was challenged by the implementation of FAR 117, we lap that from the pilot salaries and wages perspective. But most notably, we’re going to be heading into 2015. We’re going to get pretty good cost leverage on the aircraft financing side in the form of moving to more ownership in a way from aircraft rent that'll be at an overall positive to unit cost in the ownership line. And then the growth, the 30% growth and that growth coming in the form of both aircraft but more importantly gauge and the aircraft itself getting longer is really efficient on salaries because if you look at obviously overhead, you get very dilutive when you layer in that type of growth. But even in direct expense, we have the same number of pilots flying at 319 and at 321. So the longer gauge airplanes also are very helpful on a unit basis on the cost side. So hopefully that helps a little bit about we’re going to see some of the tailwind and cost. And Ben, maybe you want to comment on the revenue side.

Yeah. I mean, there is a slide in our investor deck which is available on spiritair.com that you’ve -- that I’m sure you’ve seen. That shows sort of the margin contribution of new flying versus mature flying on our margin contribution basis over the last couple of years. With more of the flying in that developmental state today and some of which comes from the 30% growth year, which again we were excited about. And because of what’s going out in Dallas, that puts around 40% of our ASM in that sort of maturing or developing RASM state, that’s all we talked about in the guidance. So we understand that. We think that goes along with the large growth. It’s what helps to make the cost look as good as they look with the 6% to 8% ex-fuel CASM drop that Ted talked about for the year. So we think that the overall sort of margin picture is really strong because of that even though it drive some changes in some of the unit inputs. Steve O'Hara: Okay. And then just may be quickly on the -- I think you get it to the operating margin. I mean would you expect pretax margin to be about the same. I think there was a benefit from maybe aircraft [Technical Difficulty] interest or something in 2015, is that going to offset. Can you just talk about what the differential between pretax and the operating margin might be this year?

Yeah. We mention the cap benefit associated with interest. I think it works out to be around $12 million for the year which will allow us to capitalize some but not all of our interest expense. And so there will be a delta between pretax and op, but it’s not going to be a big number. So I think we are going to look at the full year 2015 interest expense of around kind of $10 million. So it's a little bit on the margin but not a lot. Steve O'Hara: Okay. Thank you very much.

Yes.

Our next question a line comes from Mr. David Van Der Keyl. Please go ahead.

Hey, good morning.

Hi.

Just one quick question from me, we’re seeing double-digit capacity growth in for Fort Lauderdale this winter continuing into the summer and capacity coming from few a different players. So can you just talk about how that market is performing at a high level?

Yeah. Fort Lauderdale is doing great for us. We like Fort Lauderdale. Our business model nicely matches the demographics of the market here. There is a larger discretionary travel base that flies to and from Fort Lauderdale, and that’s sort of fits what we do really well. We like Fort Lauderdale. Fort Lauderdale is in a growth path again last year. It will be bigger this year than we were last year. And we see more growth at Fort Lauderdale down the road. Good margin producer for us and a strong and growing market for us.

Thanks.

Thank you. We have a follow-up question from the Mr. Joe DeNardi. Please go ahead.

Hi. Thanks. Ted, could you provide us with the -- what the CASM x guide for the year would look like without the benefit of the third-party catering agreement?

Again, what Ben said in his comments was, it’s worth about -- on the revenue side, it was worth about a little less than $1 a passenger. And in round numbers, you can kind of assume that to be the case on the cost side too.

Okay. And then I guess longer-term, just given the leverage on the cost side you guys are getting in 2015, should we expect that to continue? I mean, if we think about kind of 20% average ASM growth next couple of years, that’s going to give you some good opportunities on the cost side. Is that the right way to think about it kind of low to mid single-digit CASM x decline the next couple of years?

Well, we’ve said over the last few years as we anticipate kind of stable to declining unit cost over time. And clearly, this year is a great year for us. And we knew that would be the case with this type of growth and with the movements that we’re making both on balance sheet, off balance sheet, and some of the initiatives I mentioned earlier. But we stand by and continue to believe that we can provide stable to declining unit cost throughout the course of this growth profile. So that would be even with this kind of step function or reduce base, we are still feeling very comfortable about as a long-term play.

Okay. Great. Thank you.

Next question comes from Mr. Michael Linenberg. Please go ahead.

Just a quick one for Ted. Now that you’re putting aircraft on the balance sheet benefit from the accelerated depreciation. Are we going to see your cash tax rate come down relative to the book tax rate? And if so, do you have sort of any estimate for what we should be using for 2015, again the cash tax rate?

I don’t have an estimate for you on the rate, right that cash payments because of the bonus appreciation and depreciation in general the deferral will help in the near term. But I don’t have a number that I can quote you, but it will be a cash tailwind clearly in this year.

All right. For the full year 2015, Ted, your effective rate, is that -- I know you’re a little bit below 37, I believe for 2014, should we use that for 2015 as well for the effective tax rate?

We’ll have a number in the investor update. It’s about 37 though Mike I would assume.

Perfect. Thank you.

Okay.

Our last question in line comes from Stephen Trent. Please go ahead.

Hi, everybody. And thanks for taking my follow-up. Just very quickly, I know it's very, very early stage, but Cuba with respect to the medium and long-term potential of that market. Are you seeing anything in the tea leaves at this point that might make that market look a little interesting for you guys?

Well, Stephen, this is Ben. Clearly the market is interesting to us. Obviously a lot of people, we expect there would be a lot of interest to travel there once it is free and open to be able to travel there, which is not right now of course. So we are optimistic about Cuba opening at some point. We don't see anything right now that suggests that the ability to fly there was $9 fares and the like will -- is available to us this year. We also think however that once Cuba is up and it becomes an available tourist operation for lots of people that it will also change the dynamics of travel probably through multiple points in the Caribbean and being a player in all of the Caribbean, we think that there will be some puts and takes with that.

Okay. That's super helpful. Thank you very much.

Thank you. At this time, I see we have no further questions in queue.

Thank you everyone for joining us today. And with that, I’ll end our call.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.