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美國
證券交易委員會
華盛頓特區20549
表格 10-Q
(標記一)
根據1934年證券交易法第13或15(d)條款的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
根據1934年證券交易法第13或15(d)條款的過渡報告
過渡期從__至__
委員會文件號: 001-40304
F9_corporate_FC-01.jpg
Frontier Group Holdings,Inc.
(根據其章程規定的註冊人準確名稱)
特拉華州46-3681866
(國家或其他管轄區的
公司成立或組織)
(IRS僱主
唯一識別號碼)
4545 Airport Way
丹佛, CO 80239
(720) 374-4550
(主要行政辦公室,包括郵政編碼,以及註冊人的電話號碼,包括區號的地址)
    
在法案第12(b)條的規定下注冊的證券:
每一類的名稱交易代碼在其上註冊的交易所的名稱
普通股,每股面值0.001美元低成本航空公司納斯達克證券交易所 LLC
請在以下勾選,並註明是否爲以下兩項:(1)在過去12個月內(或註冊者需要提交此類報告的較短期間內)提交所有必須提交的根據1934年證券交易法第13或第15(d)條規定提交的報告,並且(2)在過去90天內受到此類提交要求的要求。(小型報告公司)否   ☒
請在以下勾選方框表示註冊人是否已在Regulation S-T Rule 405規定的前12個月(或在註冊人需要提交此類文件的較短期間內)提交了每個互動數據文件。☒否 ☐
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。



大型加速報告人加速文件提交人
非加速文件提交人較小的報告公司
新興成長公司
如果是新興成長型公司,在選中複選標記的同時,如果公司已選擇不使用根據證券交易法第13(a)條提供的任何新的或修訂後的財務會計準則的延長過渡期來符合新的或修訂後的財務會計準則,則表明該公司已選擇不使用根據證券交易法第13(a)條提供的任何新的或修訂後的財務會計準則的延長過渡期來符合新的或修訂後的財務會計準則。☐
請在檢查標記處打勾,表明註冊人是外殼公司(根據證券交易所法規120億.2條定義)。是☐     否
截至2024年5月17日,申報人共有 225,372,311 普通股股份數量,每股面值$0.001,截至2024年10月25日。



目錄
頁面
1


關於前瞻性聲明的警示聲明
本季度10-Q表格中的某些陳述應被視爲前瞻性陳述,根據1933年證券法修正案(「證券法」)第27A條,1934年證券交易所法修正案(「交易所法」)第21E條以及1995年私人證券訴訟改革法。這些前瞻性陳述基於我們目前對某些當前和未來事件以及預期的財務和運營表現的期望和信念。這些前瞻性陳述包括不僅限於僅涉及歷史事實的聲明,例如確定不確定性或趨勢,討論當前已知趨勢或不確定性的可能未來影響,或指出已知趨勢或不確定性的未來影響無法預測,保證或確保的聲明。您應該閱讀本季度報告中包含在本季度報告的其他位置中的未經審計的簡明合併財務報表及其相關注釋和我們於2024年2月20日向證券交易委員會(「SEC」)提交的年度報告中的已審計合併財務報表及其相關注釋組成的我們財務狀況和經營業績的討論和分析,是前瞻性陳述。此討論包含基於涉及風險和不確定性的當前計劃,期望和信念的前瞻性陳述。由於各種因素,包括第一部分第2項「管理討論和分析財務狀況和經營業績」,第二部分第1A項「風險因素」以及本季度報告中其他部分中規定的以下危險因素,我們實際的結果可能會與這些前瞻性陳述不同。從時間到時間,在我們提交給SEC的報告和其他文件的「風險因素」部分以及我們的2023年年度報告中,包括我們的2023年年度報告,還有其他風險和不確定性您應該通報。此外,這些前瞻性陳述僅於本報告的日期作出。除法律規定外,我們無義務更新任何前瞻性陳述以反映此類陳述之後的事件或情況。
2


第一部分 - 財務信息

項目1.基本報表(未經審計)

前線集團控股有限公司。
彙編的綜合資產負債表
(未經審計,單位:百萬美元,除普通股數據外)
2024年9月30日2023 年 12 月 31 日
資產
現金和現金等價物$576 $609 
應收賬款,淨額147 93 
用品,淨額76 79 
其他流動資產111 90 
流動資產總額910 871 
財產和設備,淨額367 309 
經營租賃使用權資產3,723 2,964 
飛行設備的預交付按金390 407 
飛機維修按金 84 
無形資產,淨額27 28 
其他資產409 330 
總資產$5,826 $4,993 
負債和股東權益
應付賬款$128 $134 
空中交通責任292 253 
飛行常客責任12 10 
長期債務的當前到期日,淨額190 251 
經營租賃的當前到期日632 549 
其他流動負債470 461 
流動負債總額1,724 1,658 
長期債務,淨額279 219 
長期運營租約3,126 2,440 
長期飛行常客責任34 35 
其他長期負債114 134 
負債總額5,277 4,486 
承付款和或有開支(注9)
股東權益:
普通股,$0.001 每股面值, 224,518,145222,998,790 分別截至2024年9月30日和2023年12月31日的已發行和流通股份
  
額外的實收資本414 403 
留存收益142 111 
累計其他綜合收益(虧損)(7)(7)
股東權益總額549 507 
負債和股東權益總額$5,826 $4,993 
請參見簡明合併財務報表的附註
3


FRONTIER GROUP HOLDINGS, INC.
簡明的彙總操作表
(未經審計,以百萬計,除每股數據外)
截至9月30日的三個月截至9月30日的九個月
2024202320242023
營業收入:
客票$910 $862 $2,705 $2,637 
其他25 21 68 61 
總營收935 883 2,773 2,698 
營業費用:
航空燃料261 291 812 827 
工資、工資和福利236 221 713 635 
飛機租賃177 150 483 429 
車站運營164 133 464 381 
維修、材料和修理 53 48 144 145 
銷售及營銷費用46 41 133 125 
折舊和攤銷19 13 53 36 
其他營業額(40)40 (42)120 
營業費用總計916 937 2,760 2,698 
業務利潤(虧損)19 (54)13  
其他收入(支出):
利息支出(10)(8)(27)(21)
資本化利息8 7 24 19 
利息收入和其他 10 10 25 28 
其他收入(支出)總額8 9 22 26 
稅前收益(虧損)27 (45)35 26 
所得稅費用(收益)1 (13)4  
$26 $(32)$31 $26 
每股收益(虧損):
基本$0.11 $(0.14)$0.14 $0.12 
稀釋的$0.11 $(0.14)$0.14 $0.12 
請參見簡明合併財務報表的附註
4


前線集團控股有限公司。
綜合收益(損失)的簡明合併報表
(未經審計,以百萬計)
截至9月30日的三個月截至9月30日的九個月
2024202320242023
$26 $(32)$31 $26 
未實現收益(損失)和來自現金流量套期交易的攤銷,減去少於$ 的遞延稅收收益/(費用)1 和少於$(1),分別爲截至2024年9月30日的三個月和九個月,爲$(1)和少於$(1),分別爲截至2023年9月30日的三個月和九個月(附註4)
 4   
其他綜合收益(損失) 4   
綜合收益(損失)$26 $(28)$31 $26 
請參見簡明合併財務報表的附註
5


前線集團控股有限公司。
簡明的綜合現金流量表
(未經審計,以百萬計)
截至9月30日的九個月
20242023
來自經營活動的現金流:
淨收入$31 $26 
遞延所得稅3  
折舊和攤銷53 36 
售後回租交易確認的收益(218)(97)
基於股票的薪酬12 10 
債務消滅造成的損失1  
扣除稅款的現金流套期保值攤銷 1 
運營資產和負債的變化:
應收賬款,淨額(53)12 
物資和其他流動資產4 (18)
飛機維修按金82 (13)
其他長期資產(142)(132)
應付賬款2 24 
空中交通責任39 (6)
其他負債17 (50)
用於經營活動的現金(169)(207)
來自投資活動的現金流:
資本支出(62)(37)
扣除退款後的飛行設備交付前按金17 (52)
其他(1)(2)
用於投資活動的現金(46)(91)
來自融資活動的現金流:
發行債務的收益,扣除發行成本418 141 
債務本金償還額(420)(84)
售後回租交易的收益185 124 
行使股票期權的收益1 1 
股份獎勵的預扣稅(2)(5)
融資活動提供的現金182 177 
現金、現金等價物和限制性現金淨減少(33)(121)
現金、現金等價物和限制性現金,期初609 761 
現金、現金等價物和限制性現金,期末$576 $640 
請參見簡明合併財務報表的附註
6



FRONTIER GROUP HOLDINGS, INC.
股東權益的簡化合並報表
(未經審計,單位:百萬美元,除普通股數據外)
普通股額外
付費
首都
已保留
收入
累計其他綜合收益(虧損)總計
股票金額
截至2022年12月31日的餘額217,875,890 $ $393 $122 $(6)$509 
淨收益(虧損)— — — (13)— (13)
與限制性股票單位歸屬有關的已發行的股份976,916 — — — — — 
爲支付既得限制性股票單位的員工稅而扣留的股份(402,814)— (5)— — (5)
現金流套期保值產生的未實現虧損,扣除稅款— — — — (7)(7)
股票期權練習53,862 — — — — — 
基於股票的薪酬— — 4 — — 4 
截至2023年3月31日的餘額218,503,854 $ $392 $109 $(13)$488 
淨收益(虧損)— — — 71 — 71 
與限制性股票單位歸屬有關的已發行的股份185,358 — — — — — 
爲支付既得限制性股票單位的員工稅而扣留的股份(15,080)— — — — — 
扣除稅款的現金流套期保值攤銷— — — — 1 1 
來自現金流套期保值的未實現收益,扣除稅款— — — — 2 2 
股票期權練習2,003,261 — 1 — — 1 
基於股票的薪酬— — 3 — — 3 
截至 2023 年 6 月 30 日的餘額220,677,393 $ $396 $180 $(10)$566 
淨收益(虧損)— — — (32)— (32)
與限制性股票單位歸屬有關的已發行的股份28,204 — — — — — 
爲支付既得限制性股票單位的員工稅而扣留的股份(9,724)— — — — — 
來自現金流套期保值的未實現收益,扣除稅款— — — — 4 4 
股票期權練習358,414 — — — — — 
基於股票的薪酬— — 3 — — 3 
截至 2023 年 9 月 30 日的餘額221,054,287 $ $399 $148 $(6)$541 





請參見簡明合併財務報表的附註
7


FRONTIER GROUP HOLDINGS, INC.
簡明股東權益彙總表(續)
(未經審計,單位:百萬美元,除普通股數據外)
普通股額外
付費
首都
已保留
收入
累計其他綜合收益(虧損)總計
股票金額
截至2023年12月31日的餘額222,998,790 $ $403 $111 $(7)$507 
淨收益(虧損)—   (26) (26)
與限制性股票單位歸屬有關的已發行的股份741,546     — 
爲支付既得限制性股票單位的員工稅而扣留的股份(252,094) (2)  (2)
股票期權練習398,062  1   1 
基於股票的薪酬—  4   4 
截至 2024 年 3 月 31 日的餘額223,886,304 $ $406 $85 $(7)$484 
淨收益(虧損) — — 31 — 31 
與限制性股票單位歸屬有關的已發行的股份248,979 — — — — — 
爲支付既得限制性股票單位的員工稅而扣留的股份(23,772)— — — — — 
股票期權練習360,155 — — — — — 
基於股票的薪酬— — 5 — — 5 
截至 2024 年 6 月 30 日的餘額224,471,666 $ $411 $116 $(7)$520 
淨收益(虧損) — — 26 — 26 
與限制性股票單位歸屬有關的已發行的股份67,373 — — — — — 
爲支付既得限制性股票單位的員工稅而扣留的股份(20,894)— — — — — 
基於股票的薪酬— — 3 — — 3 
截至 2024 年 9 月 30 日的餘額224,518,145 $ $414 $142 $(7)$549 
請參見簡明合併財務報表的附註
8



FRONTIER GROUP HOLDINGS, INC.
簡明合併財務報表註釋
(未經審計)

1. 重要會計政策之摘要
報告範圍
這份簡明合併財務報表是根據美國通用會計準則(「GAAP」)制定的,包括Frontier Group Holdings, Inc(「FGHI」或「公司」)及其直接和間接全資子公司的帳戶,包括Frontier Airlines Holdings, Inc.(「FAH」)和Frontier Airlines, Inc.(「Frontier」)。所有全資子公司均已合併,並消除了所有相關交易和餘額。 該公司是總部位於科羅拉多州丹佛的超低成本,低票價的航空公司,提供遍佈美國和美洲地區的選擇性國際航班,服務於大約所有機場。
所有板塊 100 個機場。
本公司作爲單一業務部門進行運營,爲乘客提供空運服務。管理層已得出結論,只存在一個 之一基本報表。
附帶的簡化合並財務報表包括了公司的賬目,並反映了所有經營活動的正常和重複調整,管理層認爲這些調整必要,以公正地呈現公司在相應時期的財務狀況、經營業績和現金流。根據《10-Q表格》證券交易委員會(SEC)的規定和法規,某些信息和腳註披露經常被納入依照GAAP制定的年度財務報表中,已經被壓縮或省略。這些未經審計的中期簡化合並財務報表應與公司的已審計合併財務報表和附註一起閱讀,以便更全面地理解。2023年12月31日止財政年度,公司已於2024年2月20日向SEC提交了《2023年年度報告》。
未經審計的簡化合並財務報表反映的中期結果不一定能反映其他中期時期或整年可能出現的結果。空運業務受季節波動和經濟週期和趨勢的影響很大,波動性很大。
重新分類
爲了符合GAAP的財務報表的準備工作,管理層必須進行估計和假設,這些會影響財務報表和相關注釋中報告的金額。實際結果可能與這些估計有所不同。
使用估計
FRONTIER GROUP HOLDINGS, INC.。
9



前線集團控股有限公司。
簡明合併財務報表註解(續)
(未經審計)

2. 收入確認
截至2024年9月30日和2023年12月31日,公司的航空交通責任餘額爲$294萬美元和259 百萬,其中包括公司簡明合併資產負債表中其他長期負債的金額。在截至2024年9月30日的九個月中, 92%的2023年12月31日的航空交通責任已被確認爲公司簡明合併利潤表中的客運收入。至2024年9月30日和2023年12月31日的航空交通責任餘額爲$401百萬美元和60萬美元,分別與未賺取的會員費相關。
在截至2024年和2023年9月30日的三個月和九個月內,公司確認了營業收入$7(未明確提到美元)25(未明確提到美元)16萬美元和36 百萬美元的與預期和實際到期的客戶權利有關的收入。
營業收入由客運收入組成,其中包括票價和非票價客運收入,以及其他收入。 分解的營業收入如下(以百萬美元爲單位):
截至9月30日的三個月截至9月30日的九個月
2024202320242023
客運收入:
費用$342 $302 $1,021 $966 
非票價客運收入:
服務費266 244 748 706 
行李213 211 650 664 
座位選擇64 65 195 211 
其他25 40 91 90 
非票價客運的總收入568 560 1,684 1,671 
旅客總收入910 862 2,705 2,637 
其他營業收入25 21 68 61 
總營收$935 $883 $2,773 $2,698 
該公司作爲一個單一的業務單元進行管理,爲乘客提供空運運輸。 按主要地理區域劃分的營業收入如下(以百萬美元爲單位),由美國交通部制定(「DOT」):
截至9月30日的三個月截至9月30日的九個月
2024202320242023
國內$890 $818 $2,596 $2,476 
拉丁美洲45 65 177 222 
總營收$935 $883 $2,773 $2,698 
公司根據每個乘客航段的起點和終點將運營收入歸因於地域板塊。公司的有形資產主要包括飛行器設備,可在地理市場之間移動。因此,資產不分配到特定的地域板塊。
高常旅客計劃
公司的FRONTIER 里程 該計劃根據累積里程向計劃會員提供頻繁飛行獎勵。里程通常是通過旅行、使用聯名信用卡購買以及從其他參與合作伙伴處購買而累積的。公司將乘客賺取的里程的營業收入遞延
10



前線集團控股有限公司。
簡明合併財務報表註解(續)
(未經審計)

它的 FRONTIER 里程計劃 根據乘客通過兌換里程換取機票而非現金支付所獲得的等值機票價值來確定。
該公司與其信用卡合作伙伴巴克萊銀行特拉華州分行(「巴克萊」)通過2029年簽訂了一項信用卡親和性協議,協議不時進行修訂,該協議旨在聯合營銷,爲合作髮卡人(「持卡人」)提供某些福利,並允許巴克萊利用該公司的客戶數據庫進行營銷。持卡人通過「FRONTIER Miles」計劃累積里程,而公司以協商好的價格向巴克萊出售里程,並從巴克萊那裏獲得關於消費者使用合作髮卡的獲取、保留和使用的費用。 FRONTIER Miles 計劃,公司按約定的價格向巴克萊銷售里程,並從巴克萊那裏獲得關於消費者使用合作髮卡的獲取、保留和使用的費用。
3. 其他流動資產
其他流動資產包括以下資產(以百萬爲單位):
2024年9月30日2023年12月31日
供應商激勵$67 $50 
預付費用19 21 
可赦免貸款17 13 
應收所得稅和其他稅收3 3 
其他5 3 
其他流動資產合計$111 $90 
4. Financial Derivative Instruments and Risk Management
The Company may be exposed to interest rate risk through aircraft and spare engine lease contracts for the time period between agreement of terms and commencement of the lease, when portions of rental payments can be adjusted and become fixed based on the swap rate. As part of its risk management program, from time to time the Company enters into contracts in order to limit the exposure to fluctuations in interest rates. During each of the three and nine months ended September 30, 2024 and 2023, the Company did not enter into any swaps and, therefore, paid no upfront premiums for options. As of September 30, 2024, the Company had no interest rate hedges outstanding.
Assets associated with the Company’s derivative instruments are presented on a gross basis and include upfront premiums paid. These assets are recorded as a component of other current assets on the Company’s condensed consolidated balance sheets. There were no assets outstanding as of September 30, 2024 and December 31, 2023, respectively.
The following table summarizes the effect of interest rate derivative instruments reflected in rent expense within the Company’s condensed consolidated statements of operations (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Derivatives designated as cash flow hedges
Amortization of cash flow hedge gains (losses), net of tax$ $ $ $(1)
11



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

The following table presents the net of tax impact of the overall effectiveness of derivative instruments designated as cash flow hedging instruments within the Company’s condensed consolidated statements of comprehensive income (loss) (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Derivatives designated as cash flow hedges
Amortization of cash flow hedges, net of tax$ $ $ $1 
Interest rate derivative contract gains (losses), net of tax 4  (1)
Total$ $4 $ $ 
As of September 30, 2024, $7 million was included in accumulated other comprehensive income (loss) related to interest rate hedging instruments that is expected to be reclassified into aircraft rent within the Company’s condensed consolidated statements of operations over the aircraft or engine lease term.
5. Other Current Liabilities
Other current liabilities consist of the following (in millions):
September 30, 2024December 31, 2023
Passenger and other taxes and fees payable$143 $125 
Salaries, wages and benefits107 107 
Station obligations71 69 
Aircraft maintenance63 76 
Leased aircraft return costs24 1 
Fuel liabilities19 35 
Other current liabilities43 48 
Total other current liabilities$470 $461 
6. Debt
The Company’s debt obligations are as follows (in millions):
September 30, 2024December 31, 2023
Secured debt:
Pre-delivery credit facilities(a)
$296 $312 
Building notes(b)
12 16 
Revolving loan facility(c)
  
Unsecured debt:
Affinity card advance purchase of miles(d)
100 80 
PSP promissory notes(e)
66 66 
Total debt474 474 
Less: current maturities of long-term debt, net(190)(251)
Less: total debt acquisition costs and other discounts, net(5)(4)
Long-term debt, net$279 $219 
__________________
(a)The Company has multiple pre-delivery credit facilities which consists of the PDP Financing Facility, the Second PDP Financing Facility and the Third PDP Financing Facility (all as defined below) for the financing of pre-delivery deposit payments (“PDPs”) for its A320neo
12



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

family aircraft purchase agreement (together, the “Pre-delivery Credit Facilities”). Each of the Pre-delivery Credit Facilities is collateralized by the Company’s purchase agreement for the associated A320neo family aircraft deliveries through the term of the respective facilities. Total commitments (drawn or undrawn) under the Pre-delivery Credit Facilities are $478 million. See Note 9 for the Company’s commitment schedule regarding its A320neo family orderbook.
The Company, through an affiliate, entered into a PDP facility in December 2014 (as amended from time to time, the “PDP Financing Facility”) for the financing of certain aircraft PDPs. In September 2024, the PDP Financing Facility was amended and the total available capacity of the PDP Financing Facility was reduced from $365 million to $135 million. The facility consists of separate loans for each PDP aircraft. Interest is paid every 90 days based on the Secured Overnight Financing Rate (“SOFR”) plus a margin for each separate loan. Each separate loan matures upon the earlier of (i) delivery of that aircraft to the Company by Airbus, (ii) the date one month following the last day of the scheduled delivery month of such aircraft and (iii) if there is a delay in delivery of aircraft, depending on the cause of the delivery delay, up to six months following the last day of the scheduled delivery month of such aircraft. The PDP Financing Facility will be repaid periodically according to the preceding sentence, with the facility maturing in December 2026.
In September 2024, the Company, through an affiliate, entered into a PDP facility (the “Second PDP Financing Facility”) with a lender not otherwise party to the PDP Financing Facility or Third PDP Financing Facility in connection with the financing of PDPs for certain aircraft deliveries not associated with either the PDP Financing Facility or the Third PDP Financing Facility. Interest is paid quarterly based on SOFR plus an applicable margin. Additionally, the Second PDP Financing Facility requires a commitment fee based on the level of the outstanding loan amounts compared to the committed amount. The Second PDP Financing Facility will be repaid when the facility matures in September 2027.
In September 2024, the Company entered into a PDP facility (the “Third PDP Financing Facility”) with a lender not otherwise party to the PDP Financing Facility or Second PDP Financing Facility in connection with the financing of PDPs for certain aircraft deliveries not associated with either the PDP Financing Facility or the Second PDP Financing Facility. The Third PDP Financing Facility requires commitment fees to be paid, on a quarterly basis, on each individual aircraft delivery once PDP funding begins, based on the reference amount for that aircraft at a fixed annual rate of the two-year U.S. Treasury Rate plus an applicable margin. The facility consists of separate loans for each PDP aircraft. Each separate loan matures upon the delivery of that aircraft to the Company. The Third PDP Financing Facility will be repaid periodically as covered aircraft are delivered, with the facility maturing in August 2026.
(b)Represents notes with a commercial bank related to the Company’s headquarters. In June 2024, the Company’s previous note related to its headquarters reached maturity and a final payment of $16 million was made to cover all unpaid principal, accrued unpaid interest and other amounts due. Subsequent to this final payment, the Company entered into a $6 million note with a different commercial bank maturing in June 2031 and then entered into a second agreement in September 2024 with the same lender to fund an additional $6 million bringing the total indebtedness to $12 million, with the second $6 million note maturing in September 2031. The Company is required to make regular monthly payments on principal and unpaid interest. Interest on the new notes will accrue on the unpaid principal balance at a fixed annual rate of the seven-year U.S. Treasury Rate plus an applicable margin. On the maturity date, one final balloon payment will be made to cover all unpaid principal, accrued unpaid interest and any other amounts due.
(c)In September 2024, the Company entered into a revolving line of credit available for general corporate purposes (the “Revolving Loan Facility”). The Revolving Loan Facility was undrawn at closing and provided $205 million of commitments secured by the Company’s loyalty programs and brand-related assets. The Revolving Loan Facility will bear interest at a rate of SOFR plus an applicable margin, payable in quarterly installments, on any outstanding balance as well as a quarterly commitment fee at an applicable margin on the undrawn amounts. The Revolving Loan Facility matures in September 2027.
(d)The Company entered into an agreement with Barclays in 2003 which, as amended, provides for joint marketing, grants certain benefits to Cardholders and allows Barclays to market using the Company’s customer database, through 2029. Cardholders earn miles under the FRONTIER Miles program and the Company sells miles at agreed-upon rates to Barclays and earns fees from Barclays for the acquisition, retention and use of the co-branded credit card by Cardholders. In addition, Barclays will pre-purchase miles if the Company so requests and meets certain conditions precedent. The pre-purchased miles facility amount available to the Company is to be reset on January 15 of each calendar year through, and including, January 15, 2028, based on the aggregate amount of fees payable by Barclays to the Company on a calendar year basis and subject to certain other conditions, up to an aggregate maximum facility amount of $200 million. The Company pays interest on a monthly basis, which is based on a one-month Effective Federal Funds Rate (“EFFR”) plus a margin. Beginning December 2028, the facility is scheduled to be repaid in 12 equal monthly installments.
(e)As a result of the Company’s participation in the payroll support programs offered by the U.S. Department of the Treasury (the “Treasury”), the Company obtained a series of 10-year, low-interest loans from the Treasury (collectively, the “PSP Promissory Notes”) that are due between 2030 and 2031. The PSP Promissory Notes include an annual interest rate of 1.00% for the first five years and the SOFR plus 2.00% in the final five years, with bi-annual interest payments. The loans can be prepaid at par at any time without incurring a penalty.
In connection with the term loan facility entered into with the Treasury on September 28, 2020, which was repaid in full on February 2, 2022, and the PSP Promissory Notes, the Company issued warrants to purchase 3,117,940 shares of FGHI common stock at a weighted-average price of $6.95 per share. These warrants will expire between May 2025 and June 2026. No warrants have been exercised as of September 30, 2024.
13



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

As of September 30, 2024, the Company had no outstanding borrowing under the Revolving Loan Facility as the entirety of the $205 million was undrawn.
Cash payments for interest related to debt were $25 million and $20 million for the nine months ended September 30, 2024 and 2023, respectively.
The Company has caused standby letters of credit and surety bonds to be issued to various airport authorities and vendors that are collateralized by a portion of the Company’s property and equipment and, as of September 30, 2024 and December 31, 2023, the Company did not have any outstanding letters of credit that were drawn upon.
As of September 30, 2024, future maturities of debt are payable as follows (in millions):
Total
Remainder of 2024$64 
2025208 
202624 
2027 
20289 
Thereafter169 
Total debt principal payments$474 
The Company continues to monitor covenant compliance with various parties, including, but not limited to, its lenders and credit card processors, and as of September 30, 2024, the Company was in compliance with all of its covenants.
7. Operating Leases
Aircraft
As of September 30, 2024, the Company leased 153 aircraft with remaining terms ranging from 5 months to 12 years, all of which are under operating leases and are included within operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets. In addition, as of September 30, 2024, the Company leased 30 spare engines which are all under operating leases, with the remaining term ranging from one month to 12 years. As of September 30, 2024, the lease rates for six of the engines depended on variable usage-based metrics and, as such, these leases were not recorded on the Company’s condensed consolidated balance sheets as operating lease right-of-use assets or as operating lease liabilities.
14



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

During the three and nine months ended September 30, 2024 and 2023, the Company completed sale-leaseback transactions with third-party lessors for 5, 17, 3 and 7 new Airbus A320neo family aircraft, respectively. The Company did not enter into any direct leases during the three and nine months ended September 30, 2024 and entered into five and ten direct leases for new Airbus A320neo family aircraft during the three and nine months ended September 30, 2023, respectively. Additionally, the Company completed sale-leaseback transactions for one and three engines during both the three and nine months ended September 30, 2024 and 2023, respectively. All of the leases from the sale-leaseback transactions are accounted for as operating leases. The Company recognized sale-leaseback gain transactions of $70 million, $218 million, $40 million and $97 million during the three and nine months ended September 30, 2024 and 2023, respectively, which are included as a component of other operating expenses within the Company’s condensed consolidated statements of operations.
Aircraft Rent Expense and Maintenance Obligations
During the three and nine months ended September 30, 2024 and 2023, aircraft rent expense was $177 million, $483 million, $150 million and $429 million, respectively. Aircraft rent expense includes supplemental rent, which is made up of maintenance-related reserves and probable lease return condition obligations. Supplemental rent expense (benefit) for maintenance-related reserves was less than $1 million, $(7) million, less than $1 million and $(2) million for the three and nine months ended September 30, 2024 and 2023. The portion of supplemental rent expense related to probable lease return condition obligations was $14 million, $28 million, $13 million and $37 million for the three and nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company’s total leased aircraft return cost liability was $39 million and $26 million, respectively, which are reflected in other current liabilities and other long-term liabilities on the Company’s condensed consolidated balance sheets.
During the nine months ended September 30, 2024, the Company reached an agreement with one of its aircraft lessors which eliminated requirements to pay maintenance reserves held as collateral in advance of the Company’s required performance of major maintenance activities on its aircraft leases. As a result of the agreement, the lessor disbursed back to the Company previously paid aircraft maintenance deposits of approximately $104 million, resulting in the Company no longer having any aircraft maintenance deposits with any of its lessors as of September 30, 2024.
During the nine months ended September 30, 2024, the Company extended the term for certain aircraft operating leases that were slated to expire between 2025 and 2027. For the nine months ended September 30, 2024, the Company recorded a benefit of $14 million to aircraft rent in the Company’s condensed consolidated statements of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes and engines at the original return date. Given the extension of these aircraft operating leases, such variable return costs are no longer probable of occurring.
During the nine months ended September 30, 2023, the Company extended the term for certain aircraft operating leases that were slated to expire in the fourth quarter of 2023. For the nine months ended September 30, 2023, the Company recorded an $18 million benefit to aircraft rent in the Company’s condensed consolidated statement of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes and engines at the original return date. Given the extension of these aircraft operating leases, such variable return costs are no longer probable of occurring.
Airport Facilities
The Company’s facility leases are primarily for space at approximately 100 airports, primarily in the United States. These leases are classified as operating leases and reflect the use of airport terminals, ticket counters, office space and maintenance facilities. Generally, this space is leased from government agencies that control the use of the airport. The majority of these leases are short-term in nature and renew on an evergreen basis. For these leases, the contractual term is used as the lease term. As of September 30, 2024, the remaining lease terms vary from one
15



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

month to 10 years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually, and because of the variable nature of the rates, these leases are not recorded on the Company’s condensed consolidated balance sheets as right-of-use assets and lease liabilities.
Other Ground Property and Equipment
The Company leases certain other assets such as flight training equipment, building space, and various other equipment. Certain of the Company’s leases for other assets are deemed to contain fixed rental payments and, as such, are classified as operating leases and are recorded on the Company’s condensed consolidated balance sheets as a right-of-use asset and liability. The remaining lease terms ranged from one month to seven years as of September 30, 2024.
Lease Costs
The table below presents certain information related to lease costs for operating leases during the three and nine months ended September 30, 2024 and 2023 (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Operating lease cost(a)
$167 $138 $469 $396 
Variable lease cost(a)
100 85 273 229 
Total lease costs$267 $223 $742 $625 
_________________
(a)    Expenses are included within aircraft rent, station operations, maintenance, materials and repairs and other operating within the Company’s condensed consolidated statements of operations.
During the three and nine months ended September 30, 2024 and 2023, the Company acquired, through new or modified operating leases, operating lease assets totaling $232 million, $1,058 million, $283 million and $621 million, respectively, which are included in operating lease right-of-use assets on the Company’s condensed consolidated balance sheets. During the three and nine months ended September 30, 2024 and 2023, the Company paid cash of $156 million, $458 million, $137 million and $394 million, respectively, for amounts included in the measurement of lease liabilities.
8. Stock-Based Compensation
During the three and nine months ended September 30, 2024 and 2023, the Company recognized $3 million, $12 million, $3 million and $10 million, respectively, in stock-based compensation expense, which is included as a component of salaries, wages and benefits within the Company’s condensed consolidated statements of operations.
Stock Options and Restricted Stock Units
There were no stock options granted during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, 758,217 vested stock options were exercised with a weighted-average exercise price of $1.25 per share. As of September 30, 2024, the weighted-average exercise price of outstanding stock options was $5.26 per share.
During the nine months ended September 30, 2024, 1,700,690 restricted stock units were issued with a weighted-average grant date fair value of $5.23 per share. During the nine months ended September 30, 2024, 1,057,898 restricted stock units vested, of which 296,760 restricted stock units were withheld to cover employees’ tax withholding obligations, with a weighted-average grant date fair value of $11.42 and $12.21 per share, respectively.
16



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

Stockholders’ Equity
As of September 30, 2024 and December 31, 2023, the Company had authorized common stock (voting), common stock (non-voting) and preferred stock of 750,000,000, 150,000,000 and 10,000,000 shares, respectively, of which only common stock (voting) were issued and outstanding. All classes of equity have a par value of $0.001 per share.
9. Commitments and Contingencies
Flight Equipment Commitments
As of September 30, 2024, the Company’s firm aircraft and engine purchase orders consisted of the following:
A320neoA321neo
Total
Aircraft(a)
Engines
Year Ending
Remainder of 2024 6 6  
20258 13 21 4 
20267 15 22 4 
20278 26 34 3 
20284 30 34 2 
Thereafter 76 76  
Total27 166 193 13 
__________________
(a)    While the schedule presented reflects the contractual delivery dates as of September 30, 2024, the Company has recently experienced delays in the deliveries of Airbus aircraft which may persist in future periods.
The Company is party to certain aircraft purchase agreements with Airbus (as amended from time to time, the “Airbus Purchase Agreements”) pursuant to which, as of September 30, 2024, the Company had commitments to purchase an aggregate of 27 A320neo and 166 A321neo aircraft, with deliveries expected through 2031 per the latest delivery schedule.
The Airbus Purchase Agreements also provide for, among other things, varying purchase incentives for each aircraft type (e.g., A320neo versus A321neo), which are allocated proportionally by aircraft type over the remaining aircraft to be delivered so that each aircraft’s capitalized cost upon induction would be equal. Therefore, as cash paid for deliveries is greater than the capitalized cost due to the allocation of these purchase incentives, a deferred purchase incentive is recognized, which will ultimately be offset by future deliveries of aircraft with lower cash payments than their associated capitalized cost. As of September 30, 2024 and December 31, 2023, the Company had $91 million and $78 million, respectively, of deferred purchase incentives recognized within other assets on the Company’s condensed consolidated balance sheets.
17



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

As of September 30, 2024, purchase commitments for these aircraft and engines, including estimated amounts for contractual price escalations and PDPs, consisted of the following (in millions):
Total
Year Ending
Remainder of 2024$360 
20251,280 
20261,329 
20272,055 
20282,111 
Thereafter4,808 
Total$11,943 
Litigation and Other Contingencies
The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. During 2023, the DOT sent the Company a request for information to assist in its investigation into whether the Company cared for its customers as required by law during Winter Storm Elliott, which caused significant operational disruptions and spanned from December 21, 2022 to January 2, 2023, including providing adequate customer service assistance, prompt flight status notifications, and proper and timely refunds. The Company is fully cooperating with the DOT request.
The Company regularly evaluates the status of such matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made.
The ultimate outcome of legal actions is unpredictable and can be subject to significant uncertainties, and it is difficult to determine whether any loss is probable or even possible. Additionally, it is also difficult to estimate the amount of loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Thus, actual losses may be in excess of any recorded liability or the range of reasonably possible loss. The Company believes the ultimate outcome of any potential lawsuits, proceedings and reviews will likely not, individually or in the aggregate, have a material adverse effect on its condensed consolidated financial position, liquidity or results of operations and that the Company’s current accruals cover matters where loss is deemed probable and can be reasonably estimated.
In situations where the Company may be a plaintiff and receives, or expects to receive, a favorable ruling related to litigation, the Company follows the accounting standards codification guidance for gain contingencies. The Company does not recognize a gain contingency within its condensed consolidated financial statements prior to the settlement of the underlying events or contingencies associated with the gain contingency. As a result, the consideration related to a gain contingency is recorded in the Company’s condensed consolidated financial statements during the period in which all underlying events or contingencies are resolved and the gain is realized. During the three months ended September 30, 2024, the Company agreed to settlement with a former aircraft lessor regarding a breach of contract for $40 million in damages. The settlement amount is final and may not be appealed further by either party. For the three months ended September 30, 2024, the $40 million was recognized within other operating expenses on the Company’s condensed consolidated statements of operations. As of September 30, 2024, $40 million was included as a component of accounts receivable on the Company’s condensed consolidated balance sheets and final cash proceeds were received in October 2024.
18



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

Employees
The Company has seven union-represented employee groups that together represented approximately 87% of all employees as of September 30, 2024. The table below sets forth the Company’s employee groups and status of the collective bargaining agreements as of September 30, 2024:
Percentage of Workforce
Employee GroupRepresentative
Amendable Date(a)
September 30, 2024
PilotsAir Line Pilots Association (ALPA)
January 2024(b)
26%
Flight AttendantsAssociation of Flight Attendants (AFA-CWA)
May 2024(c)
52%
Aircraft TechniciansInternational Brotherhood of Teamsters (IBT)May 20256%
Aircraft Appearance AgentsIBT
October 2023(d)
1%
DispatchersTransport Workers Union (TWU)
August 2028
1%
Material SpecialistsIBT
March 2022(d)
1%
Maintenance ControllersIBT
October 2023(d)
<1%
__________________
(a)    Subject to standard early opener provisions.
(b)    ALPA filed for mediation through the National Mediation Board in January 2024, and the parties are meeting regularly as part of the mediation process.
(c)    In November 2023, AFA-CWA exercised their contractual right to open negotiations early. Negotiations are currently ongoing.
(d)    The Company’s collective bargaining agreements with its aircraft appearance agents, material specialists, and maintenance controllers, each represented by IBT, were still amendable as of September 30, 2024, and pursuant to the Railway Labor Act the parties continue to be bound by the existing agreements as negotiations continue.
The Company is self-insured for health care claims, subject to a stop-loss policy, for eligible participating employees and qualified dependent medical and dental claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company had accrued $6 million and $5 million for health care claims estimated to be incurred but not yet paid, as of September 30, 2024 and December 31, 2023, respectively, which are included as a component of other current liabilities on the Company’s condensed consolidated balance sheets.
General Indemnifications
The Company has various leases with respect to real property as well as various agreements among airlines relating to fuel consortia or fuel farms at airports. Under some of these contracts, the Company is party to joint and several liability regarding environmental damages. Under others, where the Company is a member of an LLC or other entity that contracts directly with the airport operator, liabilities are borne through the fuel consortia structure.
The Company’s aircraft, services, equipment lease and sale and financing agreements typically contain provisions requiring the Company, as the lessee, obligor or recipient of services, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or such other equipment. The Company believes that its insurance would cover most of its exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft, services, equipment lease and sale and financing agreements described above.
Certain of the Company’s aircraft and other financing transactions include provisions that require payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions and other agreements, the Company also bears the risk of certain changes in tax laws that would subject payments to non-U.S. entities to withholding taxes.
19



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

Certain of these indemnities survive the length of the related financing or lease. The Company cannot reasonably estimate the potential future payments under the indemnities and related provisions described above because it cannot predict (i) when and under what circumstances these provisions may be triggered, and (ii) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.
10. Earnings (Loss) per Share
Basic and diluted earnings (loss) per share are computed pursuant to the two-class method. Under the two-class method, the Company attributes net income to common stock and other participating rights (including those with vested share-based awards). Basic earnings per share is calculated by taking net income, less earnings allocated to participating rights, divided by the basic weighted-average common stock outstanding. Loss per share is calculated by taking net loss divided by basic weighted-average common stock outstanding as participating rights do not share in losses. In accordance with the two-class method, diluted earnings per share is calculated using the more dilutive impact of the treasury-stock method or from reducing net income for the earnings allocated to participating rights.
The following table sets forth the computation of earnings (loss) per share on a basic and diluted basis pursuant to the two-class method for the periods indicated (in millions, except for share and per share data):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Basic:
Net income (loss)$26 $(32)$31 $26 
Less: net income attributable to participating rights    
Net income (loss) attributable to common stockholders$26 $(32)$31 $26 
Weighted-average common shares outstanding, basic224,484,159 220,837,983 224,044,697 219,483,736 
Earnings (loss) per share, basic$0.11 $(0.14)$0.14 $0.12 
Diluted:
Net income (loss)$26 $(32)$31 $26 
Less: net income attributable to participating rights    
Net income (loss) attributable to common stockholders$26 $(32)$31 $26 
Weighted-average common shares outstanding, basic224,484,159 220,837,983 224,044,697 219,483,736 
Effect of dilutive potential common shares1,232,093  2,071,009 1,155,147 
Weighted-average common shares outstanding, diluted225,716,252 220,837,983 226,115,706 220,638,883 
Earnings (loss) per share, diluted$0.11 $(0.14)$0.14 $0.12 
Approximately 7,729,362 and 5,229,528 shares were excluded from the computation of diluted weighted-average shares for the three and nine months ended September 30, 2024, respectively, due to anti-dilutive effects. Approximately 2,128,892 shares were excluded from the computation of diluted weighted-average shares for the nine months ended September 30, 2023. Due to the net loss incurred during the three months ended September 30, 2023, diluted weighted-average shares outstanding are equal to basic weighted-average shares outstanding because the effect of all equity awards is anti-dilutive.
20



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

11. Income Taxes
The Company’s provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to pretax income (loss) excluding unusual or infrequently occurring discrete items for the reporting period. When a reliable estimate cannot be made, the Company computes the interim provision based on the actual effective tax rate for the year-to-date period by applying the discrete method. The Company determined that given small changes in estimated ordinary income would result in significant variation in the estimated annual effective tax rate for the current year and the resulting uncertainty of the impact on the valuation allowance, the discrete method represents the best estimate of the actual effective tax rate and the Company has calculated its effective tax using the discrete method for the three and nine months ended September 30, 2024. The Company’s effective tax rate for the three and nine months ended September 30, 2024 was an expense of 3.7% and 11.4%, respectively, on pre-tax income. The Company’s effective tax rate for the three and nine months ended September 30, 2023 was a benefit of 28.9% and a rate of 0% on pre-tax loss and income, respectively. The effective tax rate for the three and nine months ended September 30, 2024 was lower than the statutory rate primarily due to a decrease in the Company’s valuation allowance relating to U.S. federal and state net operating losses, partially offset by the non-deductibility of certain executive compensation and other employee benefits. The Company’s effective tax rate for the three months ended September 30, 2023 was higher than the statutory rate primarily due to the loss before taxes for the quarter coupled with the tax benefits associated with the Company’s stock-based compensation arrangements. The effective tax rate for the nine months ended September 30, 2023 was lower than the statutory rate primarily due to tax benefits associated with the Company’s stock-based compensation arrangements.
The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences between the tax and financial statement reporting bases of assets and liabilities. Quarterly, the Company assesses whether it is more likely than not that sufficient taxable income will be generated to realize deferred income tax assets, and a valuation allowance is recorded when it is more likely than not that some portion, or all, of the Company’s deferred tax assets, will not be realized. The Company considers sources of taxable income from prior period carryback periods, future reversals of existing taxable temporary differences, tax planning strategies and future projected taxable income when assessing the future realization of deferred tax assets.
In assessing the sources of taxable income and the need for a valuation allowance, the Company considers all available positive and negative evidence, which includes a recent history of cumulative losses. As of September 30, 2024, the Company remains in a historical three-year cumulative loss position, which is significant objective negative evidence in considering whether deferred tax assets are realizable. Such objective negative evidence outweighs other subjective positive evidence, such as the projection of future taxable income. As a result, as of September 30, 2024, the Company has a valuation allowance of $29 million against its deferred tax assets for U.S. federal and state net operating loss carryforwards, which includes reductions in the Company’s valuation allowance of $6 million and $8 million, respectively, recorded during the three and nine months ended September 30, 2024.
12. Fair Value Measurements
Under ASC 820, Fair Value Measurements and Disclosures, disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
21



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of its financial assets and liabilities.
Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash are comprised of liquid money market funds, time deposits and cash, and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions and holds restricted cash to secure medical claims paid. Cash, cash equivalents and restricted cash are carried at cost, which management believes approximates fair value. As of September 30, 2024 and December 31, 2023, the Company had less than $1 million of restricted cash.
Debt
The estimated fair value of the Company’s debt agreements has been determined to be Level 3 measurement, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 debt.
The carrying amounts and estimated fair values of the Company’s debt are as follows (in millions):
September 30, 2024December 31, 2023
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Secured debt:
Pre-delivery credit facilities$296 $299 $312 $316 
Building notes12 12 16 16 
Unsecured debt:
Affinity card advance purchase of miles100 94 80 76 
PSP promissory notes66 59 66 57 
Total debt$474 $464 $474 $465 

The tables below present disclosures about the fair value of assets and liabilities measured at fair value on a recurring basis on the Company’s condensed consolidated balance sheets (in millions):
Fair Value Measurements as of September 30, 2024
DescriptionBalance Sheet ClassificationTotalLevel 1Level 2Level 3
Cash and cash equivalentsCash and cash equivalents$576 $576 $ $ 
Fair Value Measurements as of December 31, 2023
DescriptionBalance Sheet ClassificationTotalLevel 1Level 2Level 3
Cash and cash equivalentsCash and cash equivalents$609 $609 $ $ 
The Company had no transfers of assets or liabilities between fair value hierarchy levels between December 31, 2023 and September 30, 2024.
22



FRONTIER GROUP HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)

13. Related Parties
Management Services
Indigo Partners LLC (“Indigo Partners”) managed an investment fund, Indigo Frontier Holdings Company, LLC (“Indigo Frontier”), that was the controlling stockholder of the Company until April 2024, when Indigo Frontier distributed all of its shares held to its members on a pro rata basis, in-kind and without consideration. Certain affiliates of Indigo Partners continue to be substantial stockholders of the Company. Indigo Partners continues to provide management services to the Company, for which the Company is assessed a quarterly fee. The Company recorded less than $1 million for each of the three months ended September 30, 2024 and 2023 and $1 million for each of the nine months ended September 30, 2024 and 2023 for these fees, which are included as other operating expenses within the Company’s condensed consolidated statements of operations.
Codeshare Arrangement
The Company entered into a codeshare agreement with Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (an airline based in Mexico doing business as “Volaris”) during 2018. Two of the Company’s directors are members of the board of directors of Volaris and one is an honorary director.
In August 2018, the Company and Volaris began operating scheduled codeshare flights. Each party bears its own costs and expenses of performance under the codeshare agreement. The codeshare agreement is subject to automatic renewals and may be terminated by either party at any time upon the satisfaction of certain conditions.
23


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8. “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 20, 2024 (the “2023 Annual Report”).
Recent Developments
Financing - In September 2024, we entered into a series of transactions to provide a revolving line of credit, available for general purposes, as well as increased our overall capacity for financing facilities to fund aircraft PDPs. The Revolving Loan Facility provided $205 million of committed funding. We also amended the PDP Financing Facility and entered into the Second PDP Financing Facility and Third PDP Financing Facility, resulting in an overall increase to our Pre-delivery Credit Facilities from $365 million to $478 million. Lastly, we entered into an additional loan facility related to our headquarters building to fund an additional $6 million, bringing the financed total outstanding balance to $12 million.
Fleet - We continue to experience delays in the deliveries of Airbus aircraft, which may persist in future periods. During the three months ended September 30, 2024, we amended our Airbus Purchase Agreements which amended our aircraft delivery schedule. This amendment deferred previously scheduled firm aircraft delivery dates from 2025 through 2028 to later years, as well as converted certain A320neo aircraft into A321neo aircraft. Please refer to “Notes to Condensed Consolidated Financial Statement — 9. Commitments and Contingencies” for the amended delivery schedule.
Pratt & Whitney - Since 2022, we have begun to introduce aircraft into our fleet that use the Pratt & Whitney PW1100 Geared Turbo Fan (“GTF”) engine, and we have selected this engine for most of our planned future deliveries. During 2023, Pratt & Whitney announced the requirement, mandated by the FAA, for removal of certain engines for inspection due to a possible condition in the powdered metal used to manufacture certain engine parts. This will require accelerated inspection of the PW1100G engine, which we use for certain of our A320neo family aircraft. While this has not impacted our operations through September 30, 2024, these additional inspection and/or maintenance obligations could result in lengthy turnaround times to perform these inspections including any resulting repairs or other modifications that may be identified. This inspection program may have an adverse impact on our operations, particularly if we are required to temporarily take aircraft out of service. We continue to assess the impact on our future capacity plans and we are in communication with Pratt & Whitney regarding compensation related to this matter.
Legal - During the three months ended September 30, 2024, we agreed to settle a claim against a former aircraft lessor regarding a breach of contract, pursuant to which we received $40 million in damages. The settlement amount is final and may not be appealed by either party. For the three months ended September 30, 2024, the $40 million was recognized within other operating expenses on our condensed consolidated statements of operations. As of September 30, 2024, $40 million was included as a component of accounts receivable on our condensed consolidated balance sheets, and final cash proceeds were received in October 2024.
Labor - We are currently in negotiations with the unions which represent our pilots and flight attendants regarding their next labor contract.
Product - During the year, we launched BizFare, a new, cost-effective program for companies that includes benefits like a free carry-on, priority boarding, and Premium seating, with no fees for changes, cancellations, and same day standby. We also introduced UpFront Plus, offering extra legroom and a guaranteed empty middle seat in the first two rows for enhanced comfort and space. Further, The New Frontier introduced clear, upfront pricing and
24


new options that include certain benefits like no change fees, bags, seat assignments, and more, along with expanded customer benefits and support.
Overview
The following table provides select financial and operational information for the three and nine months ended September 30, 2024 and 2023, respectively (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Total operating revenues$935 $883 $2,773 $2,698 
Total operating expenses$916 $937 $2,760 $2,698 
Income (loss) before income taxes$27 $(45)$35 $26 
Available seat miles (“ASMs”)10,075 9,697 30,073 27,809 
Revenues
Total operating revenues for the three months ended September 30, 2024 totaled $935 million, an increase of 6% compared to the three months ended September 30, 2023. This was primarily due to the 4% increase in capacity, as measured by ASMs, as well as a 2% increase in revenue per available seat mile (“RASM”). The increase in RASM is driven by 15% higher enplanements partially offset by 8% lower total revenue per passenger on a 14% decrease in average stage length as compared to the corresponding prior year period.
Total operating revenues for the nine months ended September 30, 2024 totaled $2,773 million, an increase of 3% compared to the nine months ended September 30, 2023. This was primarily due to the 8% increase in capacity, as measured by ASMs, partially offset by a 5% decrease in RASM driven by an 8% decline in total revenue per passenger, as compared to the corresponding prior year period.
Operating Expenses
Total operating expenses during the three months ended September 30, 2024 decreased to $916 million, resulting in a cost per available seat mile (“CASM”) of 9.10¢, a decrease of 6% compared to the three months ended September 30, 2023. Fuel expense was 10% lower, as compared to the corresponding prior year period. The $30 million decrease in fuel expense for the three months ended September 30, 2024, as compared to the corresponding prior year period, was primarily driven by the 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, as a result of our 4% capacity increase.
Our non-fuel expenses increased by 1% during the three months ended September 30, 2024, as compared to the corresponding prior year period, driven primarily by higher capacity and larger fleet size and the resulting increase in operations during the same period. This movement was partially offset by an increase in sale-leaseback gains and a legal settlement, as compared to the three months ended September 30, 2023. CASM (excluding fuel), a non-GAAP measure, decreased by 2% to 6.51¢ on a 4% increase in capacity for the three months ended September 30, 2024, as compared to the corresponding prior year period. This decrease was primarily due to the increase in sale-leaseback gains and a legal settlement. This movement was partially offset by increases in stations costs due to a lower stage length on higher departures and higher aircraft rent expense due to increases to the fleet size.
Adjusted (non-GAAP) CASM (excluding fuel) increased from 6.66¢ for the three months ended September 30, 2023 to 6.89¢ for the three months ended September 30, 2024. For the three months ended September 30, 2024, this excludes the impact of $38 million relating to the legal settlement. There were no adjustments for the three months ended September 30, 2023.
Total operating expenses during the nine months ended September 30, 2024 totaled $2,760 million, resulting in a CASM of 9.18¢, a decrease of 5% compared to the nine months ended September 30, 2023. Fuel expense was
25


$15 million lower, as compared to the corresponding prior year period. This 2% decrease in fuel expense for the nine months ended September 30, 2024, as compared to the corresponding prior year period, was primarily driven by the 8% decrease in fuel cost per gallon, partially offset by the 7% increase in fuel gallons consumed, as a result of our 8% capacity increase.
Our non-fuel expenses increased by 4% during the nine months ended September 30, 2024, as compared to the corresponding prior year period, driven primarily by higher capacity and larger fleet size and the resulting increase in operations during the same period, partially offset by an increase in sale-leaseback gains and a legal settlement. CASM (excluding fuel) decreased by 4% to 6.48¢ on an 8% increase in capacity for the nine months ended September 30, 2024, as compared to 6.73¢ in the corresponding period year period. This decrease was primarily due to the increase in sale-leaseback gains and a legal settlement, partially offset by higher station and crew costs due to a lower stage length on higher departures, and aircraft rent expense due to increases to the fleet size.
Adjusted CASM (excluding fuel) decreased from $6.72 for the nine months ended September 30, 2023 to $6.60 for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, this excludes the impact of the $38 million relating to the legal settlement, and for the nine months ended September 30, 2023, this excludes the impact of $1 million in net transaction and merger-related costs.
Net Income (Loss)
We generated net income of $26 million during the three months ended September 30, 2024, compared to a net loss of $32 million for the three months ended September 30, 2023. Considering these aforementioned non-GAAP adjustments and related tax impacts, as well as the write-off of $1 million in unamortized deferred financing costs for the current year period, our adjusted (non-GAAP) net loss was $11 million for the three months ended September 30, 2024, as compared to an adjusted net loss of $32 million for the three months ended September 30, 2023.
We generated net income of $31 million during the nine months ended September 30, 2024, compared to net income of $26 million for the nine months ended September 30, 2023. Considering these aforementioned non-GAAP adjustments and related tax impacts, as well as the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs for the current year period, our adjusted net loss was $1 million for the nine months ended September 30, 2024, as compared to an adjusted net income of $27 million for nine months ended September 30, 2023.
For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Results of Operations—Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” and “Results of Operations — Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR”.
As of September 30, 2024, our total available liquidity was $576 million, made up of cash and cash equivalents, and we have $205 million of funds available to be drawn under our revolving loan facility.
26


Results of Operations
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Operating Revenues
Three Months Ended September 30,Change
20242023
Operating revenues ($ in millions):
Passenger$910 $862 $48 %
Other25 21 19 %
Total operating revenues$935 $883 $52 %
Operating statistics:
ASMs (millions)10,0759,697378%
Revenue passenger miles (“RPMs”) (millions)7,8557,755100%
Average stage length (miles)856996(140)(14)%
Load factor78.0 %80.0 %(2.0) ptsN/A
RASM (¢)9.289.100.18%
Total ancillary revenue per passenger ($)67.1375.54(8.41)(11)%
Total revenue per passenger ($)105.83114.71(8.88)(8)%
Passengers (thousands)8,8347,6971,13715 %
Total operating revenue increased $52 million, or 6%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily driven by 4% capacity growth, as measured by ASMs, and a 2% increase in RASM. The increase in RASM is driven by the 15% higher enplanements partially offset by an 8% decline in total revenue per passenger and a 2-point reduction in load factor on a 14% decrease in average stage length. The lower total revenue per passenger was the result of lower ancillary revenue per passenger. The increase in capacity was driven by the 17% increase in average aircraft in service during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, partially offset by a 10% decrease in aircraft utilization as compared to the corresponding prior year period.
27


Operating Expenses
Three Months Ended September 30,ChangeCost per ASM Change
2024202320242023
Operating expenses ($ in millions):(a)
Aircraft fuel$261 $291 $(30)(10)%2.59  ¢3.00  ¢(14)%
Salaries, wages and benefits 236 221 15 %2.34 2.28 %
Aircraft rent177 150 27 18 %1.76 1.55 14 %
Station operations164 133 31 23 %1.63 1.37 19 %
Maintenance, materials and repairs53 48 10 %0.53 0.49 %
Sales and marketing46 41 12 %0.46 0.42 10 %
Depreciation and amortization 19 13 46 %0.19 0.13 46 %
Other operating(40)40 (80)N/M(0.40)0.42 N/M
Total operating expenses $916 $937 $(21)(2)%9.10 ¢9.66 ¢(6)%
Operating statistics:
ASMs (millions) 10,075 9,697 378 %
Average stage length (miles) 856 996 (140)(14)%
Passengers (thousands)8,834 7,697 1,137 15 %
Departures 56,725 48,627 8,098 17 %
CASM (excluding fuel) (¢)(b)
6.51 6.66 (0.15)(2)%
Adjusted CASM (excluding fuel) (¢)(b)
6.89 6.66 0.23 %
Fuel cost per gallon ($)2.67 3.08 (0.41)(13)%
Fuel gallons consumed (thousands) 97,76794,4593,308 %
__________________
N/M = Not meaningful
(a)Cost per ASM figures may not recalculate due to rounding.
(b)This metric is not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest”.
Aircraft Fuel. Aircraft fuel expense decreased by $30 million, or 10%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily due to the 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, driven by higher capacity.
Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $15 million, or 7%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily due to higher crew costs, driven primarily by elevated credit hours on higher capacity and other benefit costs, as well as an increase in headcount of salaried support staff, as compared to the corresponding prior year period.
Aircraft Rent. Aircraft rent expense increased by $27 million, or 18%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to a 17% larger fleet.
Station Operations. Station operations expense increased by $31 million, or 23%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to increased airport operations as a result of the 17% increase in departures and 15% increase in passengers partially offset by increased benefits from airport revenue and cost sharing arrangements.
28


Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $5 million, or 10%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to the 17% increase in average aircraft in service, which resulted in higher aircraft maintenance costs, partially offset by lower contract labor costs.
Sales and Marketing. Sales and marketing expense increased by $5 million, or 12%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to the increase in credit card and third-party distribution channel fees as a result of a 6% increase in revenue. The following table presents our distribution channel mix:
Three Months Ended September 30,Change
Distribution Channel20242023
Our website, mobile app and other direct channels
71 %72 %(1) pts
Third-party channels
29 %28 % pts
Depreciation and Amortization. Depreciation and amortization expense increased by $6 million, or 46%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet.
Other Operating. Other operating resulted in a net gain of $40 million during the three months ended September 30, 2024, compared to an expense of $40 million during the three months ended September 30, 2023. This movement was primarily driven by a legal settlement gain of $40 million and the increase in sale-leaseback gains, as a result of five aircraft inductions subject to sale-leaseback transactions in the current period, compared to three aircraft induction subject to sale-leaseback transactions in the corresponding prior year period.
Other Income (Expense). Other income decreased by $1 million, or 11%, during the three months ended September 30, 2024, as compared the three months ended September 30, 2023. The decrease was primarily due to the $1 million loss on extinguishment of debt from the write-off of unamortized deferred financing cost related to the PDP Financing Facility.
Income Taxes. Our effective tax rate for the three months ended September 30, 2024 was an expense of 3.7% on pre-tax income, compared to a benefit of 28.9% on a pre-tax loss for the three months ended September 30, 2023. The primary difference between the effective tax rate and the federal statutory rate is related to a decrease in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements—11. Income Taxes” for additional information.
29


Results of Operations
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Operating Revenues
Nine Months Ended September 30,Change
20242023
Operating revenues ($ in millions):
Passenger$2,705 $2,637 $68%
Other68 61 711 %
Total operating revenues$2,773 $2,698 $75%
Operating statistics:
ASMs (millions) 30,07327,8092,264%
RPMs (millions)22,96222,981(19)— %
Average stage length (miles)9011,028(127)(12)%
Load factor76.4%82.6%(6.2) ptsN/A
RASM (¢)9.229.70(0.48)(5)%
Total ancillary revenue per passenger ($)70.8178.31(7.50)(10)%
Total revenue per passenger ($)112.07121.96(9.89)(8)%
Passengers (thousands)24,73822,1192,61912 %
Total operating revenue increased $75 million, or 3%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. While capacity grew by 8%, as measured by ASMs, revenue was unfavorably impacted by a 5% decline in RASM due to the 8% decline in total revenue per passenger as well as a 6-point reduction in load factor, partially offset by a reduction in stage length of 12% on a 12% increase in passengers. The increase in capacity was driven by the 16% increase in average aircraft in service during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, partially offset by a 7% decrease in average daily aircraft utilization to 10.6 hours per day compared to 11.4 hours per day for the corresponding prior year period.
30


Operating Expenses
Nine Months Ended September 30,ChangeCost per ASMChange
2024202320242023
Operating expenses ($ in millions):(a)
Aircraft fuel$812 $827 $(15)(2)%2.70  ¢2.97  ¢(9)%
Salaries, wages and benefits713 635 78 12 %2.37 2.28 %
Aircraft rent483 429 54 13 %1.61 1.54 %
Station operations464 381 83 22 %1.54 1.37 12 %
Maintenance, materials and repairs144 145 (1)(1)%0.48 0.52 (8)%
Sales and marketing133 125 %0.44 0.45 (2)%
Depreciation and amortization53 36 17 47 %0.18 0.13 38 %
Other operating(42)120 (162)N/M(0.14)0.44 N/M
Total operating expenses $2,760 $2,698 $62 %9.18 ¢9.70 ¢(5)%
Operating statistics:
ASMs (millions)30,073 27,809 2,264 %
Average stage length (miles)901 1,028 (127)(12)%
Passengers (thousands)24,738 22,119 2,619 12 %
Departures162,567 136,747 25,820 19 %
CASM (excluding fuel) (¢) (b)
6.48 6.73 (0.25)(4)%
Adjusted CASM (excluding fuel) (¢) (b)
6.60 6.72 (0.12)(2)%
Fuel cost per gallon ($)2.81 3.07 (0.26)(8)%
Fuel gallons consumed (thousands)289,114 269,425 19,689 %
__________________
N/M = Not meaningful
(a)Cost per ASM figures may not recalculate due to rounding.
(b)This metric is not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest”.
Aircraft Fuel. Aircraft fuel expense decreased by $15 million, or 2%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily due to the 8% decrease in fuel cost per gallon, partially offset by the 7% increase in fuel gallons consumed, driven by higher capacity.
Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $78 million, or 12%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was due to higher crew costs, driven primarily by elevated credit hours on higher capacity and other benefit costs, as well as an increased headcount of salaried support staff, as compared to the corresponding prior year period.
Aircraft Rent. Aircraft rent expense increased by $54 million, or 13%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to a larger fleet, partially offset by a decrease in aircraft lease return costs.
Station Operations. Station operations expense increased by $83 million, or 22%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to increased airport operations as a result of the 19% increase in departures and 12% increase in passengers partially offset by increased benefits from airport revenue and cost sharing arrangements.
31


Maintenance, Materials and Repairs. Maintenance, materials and repair expense decreased by $1 million, or 1%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This decrease was primarily due to lower contract labor, partially offset by a 16% increase in average aircraft in service, which resulted in higher aircraft repair and maintenance costs.
Sales and Marketing. Sales and marketing expense increased by $8 million, or 6%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to an increase in customer reservation system fees and increase in paid media advertising. The following table presents our distribution channel mix:
Nine Months Ended September 30,Change
Distribution Channel20242023
Our website, mobile app and other direct channels
71 %71 %—  pt
Third-party channels
29 %29 %—  pt
Depreciation and Amortization. Depreciation and amortization expense increased by $17 million, or 47%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet.
Other Operating. Other operating resulted in a net gain of $42 million during the nine months ended September 30, 2024, compared to an expense of $120 million during the nine months ended September 30, 2023. This movement was primarily driven by a legal settlement gain of $40 million and the increase in sale-leaseback gains, as a result of 17 aircraft inductions subject to sale-leaseback transactions in the current period, compared to seven aircraft inductions subject to sale-leaseback transactions in the corresponding prior year period.
Other Income (Expense). Other income decreased by $4 million, or 15%, during the nine months ended September 30, 2024, as compared the nine months ended September 30, 2023. The decrease was primarily due to lower interest income from lower balances in interest-bearing cash accounts and the $1 million loss on extinguishment of debt from the write-off of unamortized deferred financing cost related to the PDP Financing Facility.
Income Taxes. Our effective tax rate for the nine months ended September 30, 2024 was an expense of 11.4%, compared to an expense of 0% for the nine months ended September 30, 2023, on pre-tax income for both periods. The primary difference between the effective tax rate and the federal statutory rate for the nine months ended September 30, 2024 is related to a decrease in our valuation allowance relating to federal and state net operating losses, partially offset by the impact of non-deductibility of certain executive compensation and other employee benefits. Please refer to “Notes to Condensed Consolidated Financial Statements—11. Income Taxes” for additional information.
32


Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest
Three Months Ended September 30,
20242023
($ in millions)Per ASM (¢)($ in millions)Per ASM (¢)
Non-GAAP financial data:(a)
CASM9.10 9.66 
Aircraft fuel(261)(2.59)(291)(3.00)
CASM (excluding fuel)(b)
6.51 6.66 
Legal settlement(c)
38 0.38 — — 
Adjusted CASM (excluding fuel)(b)
6.89 6.66 
Aircraft fuel261 2.59 291 3.00 
Adjusted CASM(d)
9.48 9.66 
Net interest expense (income)(8)(0.08)(9)(0.10)
Write-off of deferred financing costs(e)
(1)(0.01)— — 
Adjusted CASM + net interest(f)
9.39 9.56 
CASM9.10 9.66 
Net interest expense (income)(8)(0.08)(9)(0.10)
CASM + net interest(f)
9.02 9.56 
__________________
(a)Cost per ASM figures may not recalculate due to rounding.
(b)CASM (excluding fuel) and Adjusted CASM (excluding fuel) are included as supplemental disclosures because we believe that excluding aircraft fuel is useful to investors as it provides an additional measure of management’s performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which we have limited control, impacts the comparability of period-to-period financial performance, and excluding the price of fuel allows management an additional tool to understand and analyze our non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and Adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
(c)We reached a legal settlement with a former lessor for breach of contract for a total of $40 million (please refer to “Notes to Condensed Consolidated Financial Statement — 9. Commitments and Contingencies” for additional information). $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.
(d)Adjusted CASM is included as supplemental disclosure because we believe it is a useful metric to properly compare our cost management and performance to other peers, as derivations of Adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, we believe this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
(e)In September 2024, we reduced the capacity of the PDP Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within the condensed consolidated statements of operations.
(f)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

33


Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest
Nine Months Ended September 30,
20242023
($ in millions)Per ASM (¢)($ in millions)Per ASM (¢)
Non-GAAP financial data:(a)
CASM9.18 9.70 
Aircraft fuel(812)(2.70)(827)(2.97)
CASM (excluding fuel)(b)
6.48 6.73 
Legal settlement(c)
38 0.12 — — 
Transaction and merger-related costs(d)
— — (1)(0.01)
Adjusted CASM (excluding fuel)(b)
6.60 6.72 
Aircraft fuel8122.70 827 2.98 
Adjusted CASM(e)
9.30 9.70 
Net interest expense (income)(22)(0.08)(26)(0.10)
Write-off of deferred financing costs(f)
(1)0.01 — — 
Adjusted CASM + net interest(g)
9.23 9.60 
CASM9.18 9.70 
Net interest expense (income)(22)(0.08)(26)(0.09)
CASM + net interest(g)
9.10 9.61 
__________________
(a)Cost per ASM figures may not recalculate due to rounding.
(b)CASM (excluding fuel) and Adjusted CASM (excluding fuel) are included as supplemental disclosures because we believe that excluding aircraft fuel is useful to investors as it provides an additional measure of management’s performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which we have limited control, impacts the comparability of period-to-period financial performance, and excluding the price of fuel allows management an additional tool to understand and analyze our non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and Adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
(c)We reached a legal settlement with a former lessor for breach of contract for a total of $40 million (please refer to “Notes to Condensed Consolidated Financial Statement — 9. Commitments and Contingencies” for additional information). $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.
(d)Represents $1 million in employee retention costs incurred in connection with the terminated merger with Spirit Airlines, Inc., for the nine months ended September 30, 2023.
(e)Adjusted CASM is included as supplemental disclosure because we believe it is a useful metric to properly compare our cost management and performance to other peers, as derivations of Adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, we believe this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
(f)In September 2024, we reduced the capacity of the PDP Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within the condensed consolidated statements of operations.
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(g)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in millions)(in millions)
Non-GAAP financial data (unaudited):
Adjusted pre-tax income (loss)(a)
$(10)$(45)$(2)$27 
Adjusted net income (loss)(a)
$(11)$(32)$(1)$27 
EBITDA(a)
$38 $(41)$66 $36 
EBITDAR(b)
$215 $109 $549 $465 
Adjusted EBITDA(a)
$— $(41)$28 $37 
Adjusted EBITDAR(b)
$177 $109 $511 $466 
__________________
(a)Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of pre-tax income (loss), net income (loss) and EBITDA are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry.
Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA have limitations as analytical tools. Some of the limitations applicable to these measures include: adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA, and adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness or possible cash requirements related to our warrants; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements; and other companies in our industry may calculate adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of pre-tax income (loss), net income (loss) and EBITDA, including adjusted pre-tax income (loss), adjusted net income (loss) and adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.
For the foregoing reasons, each of adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.
(b)EBITDAR and adjusted EBITDAR are included as a supplemental disclosure because we believe them to be useful solely as valuation metrics for airlines as their calculations isolate the effects of financing in general, the accounting effects of capital spending and acquisitions (primarily aircraft, which may be acquired directly, directly subject to acquisition debt, by capital lease or by operating lease, each of which is presented differently for accounting purposes), and income taxes, which may vary significantly between periods and for different airlines for reasons unrelated to the underlying value of a particular airline. However, EBITDAR and adjusted EBITDAR are not determined in accordance with GAAP, are susceptible to varying calculations and not all companies calculate the measure in the same manner. As a result, EBITDAR and adjusted EBITDAR, as presented, may not be directly comparable to similarly titled measures presented by other companies. In addition, EBITDAR and adjusted EBITDAR should not be viewed as a measure of overall performance since they exclude aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate our business. Accordingly, you are cautioned not to place undue reliance on this information.
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Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in millions)(in millions)
Adjusted net income (loss) reconciliation (unaudited):
Net income (loss)$26 $(32)$31 $26 
Non-GAAP Adjustments(a):
Legal settlement(38)(38)
Transaction and merger-related costs1
Write-off of deferred financing costs due to paydown of loan11
Pre-tax impact(37) (37)1 
Tax benefit (expense), related to non-GAAP adjustments— — — — 
Valuation allowance(b)
—   
Net income (loss) impact$(37)$ $(32)$1 
Adjusted net income (loss)$(11)$(32)$(1)$27 
Adjusted pre-tax income (loss) reconciliation (unaudited):
Income (loss) before income taxes$27 $(45)$35 $26 
Pre-tax impact(37)— (37)
Adjusted pre-tax income (loss)$(10)$(45)$(2)$27 
EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR reconciliation (unaudited):
Net income (loss)$26 $(32)$31 $26 
Plus (minus):
Interest expense10 27 21 
Capitalized interest(8)(7)(24)(19)
Interest income and other(10)(10)(25)(28)
Income tax expense (benefit)(13)— 
Depreciation and amortization19 13 53 36 
EBITDA38 (41)66 36 
Plus: Aircraft rent177 150 483 429 
EBITDAR$215 $109 $549 $465 
EBITDA$38 $(41)$66 $36 
Plus (minus)(a)
Legal settlement(38)— (38)— 
Transaction and merger-related costs— — — 
Adjusted EBITDA (41)28 37 
Plus: Aircraft rent177 150 483 429 
Adjusted EBITDAR$177 $109 $511 $466 
___________________
(a)See “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” above for discussion on adjusting items.
(b)During the nine months ended September 30, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state net operating loss deferred tax assets, which largely do not expire, mainly as a result of being in a three-year historical cumulative pre-tax loss position and due to the loss generated during the three months ended March 31, 2024, which has no impact on cash taxes and is not reflective of our effective tax rate for deductible net operating losses generated or actual cash tax obligations created. Please refer to “Notes to Condensed Consolidated Financial Statements—11. Income Taxes” for additional information.
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Comparative Operating Statistics
The following table sets forth our operating statistics for the three and nine months ended September 30, 2024 and 2023. These operating statistics are provided because they are commonly used in the airline industry and, as such, allow readers to compare our performance against our results for the corresponding prior year period, as well as against the performance of our peers.
Three Months Ended September 30,
Change
Nine Months Ended September 30,Change
2024202320242023
Operating statistics (unaudited)(a)
Available seat miles (“ASMs”) (millions)10,075 9,697 %30,073 27,809 %
Departures56,725 48,627 17 %162,567 136,747 19 %
Average stage length (miles)856 996 (14)%901 1,028 (12)%
Block hours140,348 133,305 %419,911 385,129 %
Average aircraft in service150 128 17 %144 124 16 %
Aircraft – end of period153 134 14 %153 134 14 %
Average daily aircraft utilization (hours)10.2 11.3 (10)%10.6 11.4 (7)%
Passengers (thousands)8,834 7,697 15 %24,738 22,119 12 %
Average seats per departure206 200 %204 198 %
Revenue passenger miles (“RPMs”) (millions)7,855 7,755 %22,962 22,981 — %
Load Factor78.0 %80.0 %(2.0) pts76.4 %82.6 %(6.2) pts
Fare revenue per passenger ($)38.70 39.17 (1)%41.26 43.65 (5)%
Non-fare passenger revenue per passenger ($)64.38 72.77 (12)%68.09 75.57 (10)%
Other revenue per passenger ($)2.75 2.77 (1)%2.72 2.74 (1)%
Total ancillary revenue per passenger ($)67.13 75.54 (11)%70.81 78.31 (10)%
Total revenue per passenger ($)105.83 114.71 (8)%112.07 121.96 (8)%
Total revenue per available seat mile (“RASM”) (¢)9.28 9.10 %9.22 9.70 (5)%
Cost per available seat mile (“CASM”) (¢)9.10 9.66 (6)%9.18 9.70 (5)%
CASM (excluding fuel) (¢) (b)
6.51 6.66 (2)%6.48 6.73 (4)%
CASM + net interest (¢) (b)
9.02 9.56 (6)%9.10 9.61 (5)%
Adjusted CASM (¢) (b)
9.48 9.66 (2)%9.30 9.70 (4)%
Adjusted CASM (excluding fuel) (¢) (b)
6.89 6.66 %6.60 6.72 (2)%
Adjusted CASM (excluding fuel), stage-length adjusted to 1,000 miles (¢) (b)(c)
6.37 6.65 (4)%6.27 6.81 (8)%
Adjusted CASM + net interest (¢) (b)
9.39 9.56 (2)%9.23 9.60 (4)%
Fuel cost per gallon ($)2.67 3.08 (13)%2.81 3.07 (8)%
Fuel gallons consumed (thousands)97,767 94,459 %289,114 269,425 %
Full-time equivalent employees8,011 6,959 15 %8,011 6,959 15 %
_______________
(a)Figures may not recalculate due to rounding. See “Glossary of Airline Terms” for definitions of terms used in this table.
(b)These metrics are not calculated in accordance with GAAP. For the reconciliation to corresponding GAAP measures, see “Results of Operations—Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest.”
(c)Stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000).
37

Liquidity and Capital Resources
Overview
As of September 30, 2024, our total available liquidity was $576 million, made up of cash and cash equivalents, and we have $205 million of funds available to be drawn under our Revolving Loan Facility. We had $469 million of total debt, net, of which $190 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $296 million outstanding under our Pre-delivery Credit Facilities, $100 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), $66 million in 10-year, low-interest loans from the U.S. Department of the Treasury (the “Treasury,” and such loans, the “PSP Promissory Notes”) and $12 million in secured indebtedness for our headquarters building, partially offset by $5 million in deferred debt acquisition costs.
In September 2024, we entered into a series of transactions designed to provide us with a revolving line of credit available for general corporate purposes as well as increased capacity for financing facilities intended to fund aircraft PDPs. The new pre-delivery credit facilities, which consist of the Second PDP Financing Facility and the Third PDP Financing Facility, in addition to the pre-existing PDP Financing Facility, increased overall borrowing capacity from $365 million to $478 million. We also entered into the Revolving Loan Facility, which provided $205 million of commitments secured by our loyalty program and brand-related assets which was undrawn as of September 30, 2024.
During the nine months ended September 30, 2024, we increased our borrowings under the Barclays agreement by an additional $20 million. Additionally, during the nine months ended September 30, 2024, we repaid the remaining outstanding balance, inclusive of any unpaid principal, interest and other amounts related to our previous headquarters note and subsequent to the payoff of the headquarters note, we entered into multiple loan agreements in the total amount of $12 million with a different lender secured by our headquarters. Please refer to “Notes to Condensed Consolidated Financial Statements—6. Debt” for additional information.
In connection with the PSP Promissory Notes and the term loan facility entered into with the Treasury on September 28, 2020, which was repaid in full on February 2, 2022, we issued warrants to purchase 3,117,940 shares of our common stock at a weighted-average price of $6.95 per share. We have the intent and ability to settle the warrants issued in common shares and we have classified the warrant liability to additional paid-in-capital on our condensed consolidated balance sheet. These warrants will expire between May 2025 and June 2026. No warrants have been exercised as of September 30, 2024.
We continue to monitor our covenant compliance with various parties, including, but not limited to, our lenders and credit card processors. As of the date of this report, we are in compliance with all of our covenants.
The following table presents the major indicators of our financial condition and liquidity as of:
September 30, 2024December 31, 2023
($ in millions)
Cash and cash equivalents$576 $609 
Total current assets, excluding cash and cash equivalents$334 $262 
Total current liabilities, excluding current maturities of long-term debt, net and operating leases$902 $858 
Current maturities of long-term debt, net$190 $251 
Long-term debt, net$279 $219 
Stockholders’ equity$549 $507 
Debt to capital ratio46 %48 %
Debt to capital ratio, including operating lease obligations89 %87 %
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Use of Cash and Future Obligations
We expect to meet our cash requirements for the next twelve months through use of our available cash and cash equivalents, our Pre-delivery Credit Facilities, and cash flows from operating activities. We expect to meet our long-term cash requirements with cash flows from operating and financing activities, including, but not limited to, potential future borrowings under the Pre-delivery Credit Facilities, our undrawn Revolving Loan Facility and/or potential issuances of debt or equity. The Revolving Loan Facility also permits us to enter into additional indebtedness secured by our loyalty program and brand-related assets, to the extent such indebtedness is pari passu to that of the Revolving Loan Facility. Our primary uses of cash are for working capital, aircraft PDPs, debt repayments and capital expenditures.
Our single largest capital commitment relates to the acquisition of aircraft. As of September 30, 2024, we operated all of our 153 aircraft under operating leases. PDPs relating to future deliveries under our agreement with Airbus are required at various times prior to each aircraft’s delivery date. As of September 30, 2024, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $478 million, had $296 million outstanding. As of September 30, 2024, we had $390 million of PDPs held by Airbus which have been partially financed by our Pre-delivery Credit Facilities.
As of September 30, 2024, we had a firm obligation to purchase 193 A320neo family aircraft and 13 additional spare engines to be delivered by 2031. Of our aircraft commitments, 23 had committed operating leases for deliveries occurring between 2024 and 2026, and 12 were subject to non-binding letters of intent to provide operating lease financing for 2024 and 2025 deliveries. We intend to evaluate financing options for the remaining aircraft.
During the nine months ended September 30, 2024, we reached an agreement with one of our aircraft lessors which eliminated requirements to pay maintenance reserves held as collateral in advance of our required performance of major maintenance activities on its aircraft leases. As a result of the agreement, the lessor disbursed back to us previously paid aircraft maintenance deposits of approximately $104 million, resulting in us no longer having any aircraft maintenance deposits with any of our lessors as of September 30, 2024.
The following table summarizes current and long-term material cash requirements as of September 30, 2024, which we expect to fund primarily with operating and financing cash flows (in millions):
Material Cash Requirements
Remainder of 20242025202620272028ThereafterTotal
Debt obligations(a)
$64 $208 $24 $— $$169 $474 
Interest commitments(b)
21 13 12 72 
Operating lease obligations(c)
164 650 623 594 518 2,402 4,951 
Flight equipment purchase obligations(d)
360 1,280 1,329 2,055 2,111 4,808 11,943 
Total$596 $2,159 $1,989 $2,661 $2,647 $7,388 $17,440 
__________________
(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of September 30, 2024 pertaining to aircraft with deliveries through 2027 and certain deliveries in 2028, our affinity card unsecured debt due through 2029, our building notes through September 2031 and the PSP Promissory Notes due through 2031. See “Notes to Condensed Consolidated Financial Statements — 6. Debt”.
(b)Represents interest and commitment fees on debt obligations and our undrawn Revolving Loan Facility.
(c)Represents gross cash payments related to our operating lease obligations that are not subject to discount as compared to the obligations measured on our condensed consolidated balance sheets. See “Notes to Condensed Consolidated Financial Statements — 7. Operating Leases”.
(d)Represents purchase commitments for aircraft and engines. See “Notes to Condensed Consolidated Financial Statements — 9. Commitments and Contingencies”.
39

Cash Flows
The following table presents information regarding our cash flows in the nine months ended September 30, 2024 and 2023 (in millions):
Nine Months Ended September 30,
20242023
Net cash used in operating activities$(169)$(207)
Net cash used in investing activities(46)(91)
Net cash provided by financing activities182 177 
Net decrease in cash, cash equivalents and restricted cash(33)(121)
Cash, cash equivalents and restricted cash at beginning of period609 761 
Cash, cash equivalents and restricted cash at end of period$576 $640 
Operating Activities
During the nine months ended September 30, 2024, net cash used in operating activities totaled $169 million, which was driven by non-cash adjustments of $149 million and $51 million of outflows from changes in operating assets and liabilities, partially offset by $31 million of net income.
The $51 million of outflows from changes in operating assets and liabilities included:
$142 million in increases in other long-term assets primarily driven by increases in prepaid maintenance, capitalized maintenance and supplier incentives; and
$53 million in increases in accounts receivable primarily from a legal settlement; partially offset by
$82 million in decreases in our capitalized aircraft maintenance deposits;
$39 million in increases in our air traffic liability primarily driven by increased bookings, partially offset by lower fares on bookings;
$17 million in increases in other liabilities driven primarily by leased aircraft return accruals and passenger taxes payable;
$4 million in decreases in supplies and other current assets; and
$2 million in increases in accounts payable.

Our net income of $31 million was also adjusted by the following non-cash items to arrive at cash used in operating activities:
$218 million in gains recognized on sale-leaseback transactions; partially offset by
$53 million in depreciation and amortization;
$12 million in stock-based compensation expense;
$3 million in deferred income tax expense; and
$1 million loss on extinguishment of debt.
During the nine months ended September 30, 2023, net cash used in operating activities totaled $207 million, which was driven by $183 million of outflows from changes in operating assets and liabilities and non-cash adjustments totaling $50 million, partially offset by $26 million of net income.
The $183 million of outflows from changes in operating assets and liabilities included:
$132 million in increases in other long-term assets driven by increases in capitalized maintenance, prepaid maintenance, prepaid bonuses and capitalized interest;
$50 million in decreases in other liabilities driven primarily by leased aircraft return payments;
$18 million in increases in supplies and other current assets;
$13 million in increases in aircraft maintenance deposits; and
40

$6 million in decreases in our air traffic liability; partially offset by
$24 million in increases in accounts payable; and
$12 million in decreases in accounts receivable due to the collection of station receivables.
Our net income of $26 million was also adjusted by the following non-cash items to arrive at cash used in operating activities:
$97 million in gains recognized on sale-leaseback transactions; partially offset by
$36 million in depreciation and amortization;
$10 million in stock-based compensation expense; and
$1 million in amortization of cash flow hedges, net of tax.
Investing Activities
During the nine months ended September 30, 2024, net cash used in investing activities totaled $46 million, driven by:
$62 million in cash outflows for capital expenditures; and
$1 million in cash outflows relating to other investing activity; partially offset by
$17 million in net proceeds for PDP activity.
During the nine months ended September 30, 2023, net cash used in investing activities totaled $91 million, driven by:
$52 million in net outflows for PDP activity;
$37 million in cash outflows for capital expenditures; and
$2 million in cash outflows relating to other investing activity.
Financing Activities
During the nine months ended September 30, 2024, net cash provided by financing activities was $182 million, driven by:
$418 million in cash proceeds from debt issuances, consisting of $386 million of net borrowings on our Pre-delivery Credit Facilities, $12 million in new borrowing on our building note and $20 million in draws on our Barclays facility;
$185 million in net proceeds received from sale-leaseback transactions; and
$1 million in proceeds from the exercise of stock options; partially offset by
$420 million in cash outflows from principal repayments on debt, which includes $404 million on our Pre-delivery Credit Facilities and $16 million on our prior building note that reached maturity; and
$2 million in cash outflows for payments related to tax withholdings of share-based awards.
During the nine months ended September 30, 2023, net cash provided by financing activities was $177 million, primarily driven by:
$124 million in net proceeds received from sale-leaseback transactions; and
$141 million in cash proceeds from debt issuances, consisting of $132 million drawn on our PDP Financing Facility, net of issuance costs, and $9 million in draws on our Barclays facility; partially offset by
$84 million in cash outflows from principal repayments on our PDP Financing Facility and our headquarters building; and
$5 million in cash outflows for payments related to tax withholdings of share-based awards.

41

As of September 30, 2024, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our results of operations, financial condition or cash flows.
Critical Accounting Policies and Estimates
There have been no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2024. For information regarding our critical accounting policies and estimates, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in Part II, Item 7 of our 2023 Annual Report.
Recently Adopted Accounting Pronouncements
See “Notes to Consolidated Financial Statements —1. Summary of Significant Accounting Policies” included in Part II, Item 8 of our 2023 Annual Report for a discussion of recent accounting pronouncements.
42


GLOSSARY OF AIRLINE TERMS
Set forth below is a glossary of industry terms:
“A320neo family” means, collectively, the Airbus series of single-aisle aircraft that feature the new engine option, including the A320neo and A321neo aircraft.
“Adjusted CASM” is a non-GAAP measure and means operating expenses, excluding special items, divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”
“Adjusted CASM including net interest” or “Adjusted CASM + net interest” is a non-GAAP measure and means the sum of Adjusted CASM and net interest expense (income) excluding special items divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”
“Adjusted CASM (excluding fuel)” is a non-GAAP measure and means operating expenses less aircraft fuel expense, excluding special items, divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”
“Air traffic liability” means the value of tickets, unearned membership fees and other related fees sold in advance of travel.
“Ancillary revenue” means the sum of non-fare passenger revenue and other revenue.
“Available seat miles” or “ASMs” means seats (empty or full) multiplied by miles the seats are flown.
“Average aircraft in service” means the average number of aircraft used in flight operations, as calculated on a daily basis.
“Average daily aircraft utilization” means block hours divided by number of days in the period divided by average aircraft in service.
“Average stage length” means the average number of miles flown per flight segment.
“Block hours” means the number of hours during which the aircraft is in revenue service, measured from the time of gate departure before take-off until the time of gate arrival at the destination.
“CASM” or “unit costs” means operating expenses divided by ASMs.
“CASM (excluding fuel)” is a non-GAAP measure and means operating expenses less aircraft fuel expense, divided by ASMs.
“CASM including net interest” or “CASM + net interest” is a non-GAAP measure and means the sum of CASM and net interest expense (income) divided by ASMs.
“DOT” means the United States Department of Transportation.
43


“Fare revenue” consists of base fares for air travel, including miles redeemed under our frequent flyer program, unused and expired passenger credits, other redeemed or expired travel credits and revenue derived from charter flights.
“Fare revenue per passenger” means fare revenue divided by passengers.
“Load factor” means the percentage of aircraft seat miles actually occupied on a flight (RPMs divided by ASMs).
“Net interest expenses (income)” means interest expense, capitalized interest, interest income and other.
“Non-fare passenger revenue” consists of fees related to certain ancillary items such as baggage, service fees, seat selection, and other passenger-related revenue that is not included as part of base fares for travel.
“Non-fare passenger revenue per passenger” means non-fare passenger revenue divided by passengers.
“Other revenue” consists primarily of services not directly related to providing transportation, such as the advertising, marketing and brand elements of the FRONTIER Miles affinity credit card program and commissions revenue from the sale of items such as rental cars and hotels.
“Other revenue per passenger” means other revenue divided by passengers.
“Passengers” means the total number of passengers flown on all flight segments.
“Passenger revenue” consists of fare revenue and non-fare passenger revenue.
“PDP” means pre-delivery deposit payments, which are payments required by aircraft manufacturers in advance of delivery of the aircraft.
“RASM” or “unit revenue” means total revenue divided by ASMs.
“Revenue passenger miles” or “RPMs” means the number of miles flown by passengers.
“Total ancillary revenue per passenger” means ancillary revenue divided by passengers.
“Total revenue per passenger” means the sum of fare revenue, non-fare passenger revenue, and other revenue (collectively, “Total Revenue”) divided by passengers.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are subject to market risks in the ordinary course of our business. These risks include commodity price risk, with respect to aircraft fuel, as well as interest rate risk, specifically with respect to our floating rate obligations and aircraft lease contracts. The adverse effects of changes in these markets could pose a potential loss as discussed below. The sensitivity analysis provided does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.
Aircraft Fuel. Our results of operations can vary materially due to changes in the price and availability of aircraft fuel and are also impacted by the number of aircraft in use and the number of flights we operate. Aircraft fuel represented approximately 28% and 29% of total operating expenses for the three and nine months ended September 30, 2024, respectively, and 31% of total operating expenses for each of the three and nine months ended September 30, 2023. Unexpected changes in the pricing of aircraft fuel or a shortage or disruption in the supply could have a material adverse effect on our business, results of operations and financial condition. Based on our fuel consumption for the 12 months ended September 30, 2024, a hypothetical 10% increase in the average price per gallon of aircraft fuel would have increased aircraft fuel expense by approximately $112 million.
Interest Rates. We are subject to market risk associated with changing interest rates, due to Secured Overnight Financing Rate (“SOFR”) based interest rates on our PDP Financing Facility, Second PDP Financing Facility and Revolving Loan Facility, which remains undrawn as of September 30, 2024, as well as Effective Federal Funds Rate (“EFFR”) based interest rates on our affinity card advance purchase of miles with Barclays. During the nine months ended September 30, 2024, as applied to our average debt balances, a hypothetical increase of 100 basis points in average annual interest rates on our variable-rate debt would have increased the annual interest expense by $3 million.
We are also exposed to interest rate risk through aircraft lease contracts for the time period between agreement of terms and commencement of the lease, where portions of the rental payments are adjusted and become fixed based on swap rates. As part of our risk management program, we have historically entered into contracts in order to limit the exposure to fluctuations in interest rates. During each of the three and nine months ended September 30, 2024 and 2023, we did not enter into any swaps and, therefore, paid no upfront premiums for interest rate hedges. As of September 30, 2024, we had no interest rate hedges outstanding.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control Over Financial Reporting
During the three months ended September 30, 2024, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we have been and will continue to be subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained. We believe the ultimate outcome of such lawsuits, proceedings and reviews is not reasonably likely, individually or in the aggregate, to have a material adverse effect on our business, results of operations and financial condition.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors disclosed in Item 1A “Risk Factors” contained in our 2023 Annual Report, other than the risk factors disclosed in Item 1A “Risk Factors” contained in our Quarterly Report for the quarter ended March 31, 2024. Investors are urged to review all such risk factors carefully.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
Use of Proceeds
None.
Issuer Purchases of Equity Securities
We do not have a share repurchase program and no shares were repurchased during the third quarter of 2024.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the fiscal quarter ended September 30, 2024, none of our directors or officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any other “non-Rule 10b5-1 trading arrangement” except as follows:
On August 14, 2024, Barry Biffle, our Chief Executive Officer and a member of our board of directors, adopted a Rule 10b5-1(c) trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 2,164,580 shares of our common stock until August 8, 2025.


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ITEM 6. EXHIBITS
Incorporated by Reference Filed Herewith
Exhibit Number
Exhibit DescriptionForm File NumberDateNumber
3.1
8-K001-403044/6/20213.1
3.2
8-K
001-403047/25/20243.1
4.1
S-1333-2540043/8/20214.2
4.2
10-Q001-403048/8/20244.2
10.1(a)†    X
10.1(b)†    X
10.2(a)†    X
10.2(b)†    X
10.3†    X
10.4(a)†    X
10.4(b)†    X
10.5(a)†    X
10.5(b)†    X
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31.1
X
31.2
X
32.1*
X
32.2*
X
101.INS
Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.X
101.SCH
Inline XBRL Taxonomy Extension Schema Document.X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.X
101.LAB
Inline XBRL Taxonomy Extension Labels Linkbase Document.X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.X
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
X


__________________
*    The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in such filing.
†     Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
FRONTIER GROUP HOLDINGS, INC.
Date: October 29, 2024By: /s/ Mark C. Mitchell
Mark C. Mitchell
Senior Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
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