What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-03-03 · 302 added, 239 removed, 786 unchanged (41% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Income for the years ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Statements of Comprehensive Income for the years ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Statements of Income (Loss) for the years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Shareholders' Equity for the years ended December 31, 2025, 2024, and 2023

14 unchanged sentences

Note 13 - Commitments and Contingencies

Note 14 - Segments

Note 15 - Impairment

N ote 16 - Subseque nt Events

Note 14 - Operating Segments

Note 15 - Impairment and Sale of Sunseeker Resort

Note 16 - Proposed Acquisition of Sun Country Airlines Holdings, Inc.

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Allegiant Travel Company and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of Allegiant Travel Company and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 3, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

13 unchanged sentences

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Sunseeker Resort

As discussed in Notes 2, 3, 5, 14, and 15 to the consolidated financial statements, the Company recorded an impairment charge of $321.8 million, primarily related to Sunseeker Resort.

The Company records impairment losses on long-lived assets used in operations when events or changes in circumstances indicate, in management’s judgment, that the assets might be impaired and the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets.

The Company performed an undiscounted cash flow test and concluded that the carrying value of the long-lived assets was not recoverable.

The estimated fair value of the assets was determined using a discounted cash flow model.

The determination of fair value involved significant assumptions and estimates, including the discount rate, projected hotel revenue growth rates and the terminal capitalization rate.

We identified the evaluation of impairment of Sunseeker Resort as a critical audit matter.

We performed sensitivity analysis as a risk assessment procedure over assumptions used to estimate the fair value of Sunseeker Resort and determined the discount rate, projected hotel revenue growth rates and terminal capitalization rate represented the significant assumptions.

The discount rate, projected hotel revenue growth rates and terminal capitalization rate assumptions used to estimate the fair value of Sunseeker Resort were challenging to test as they represented subjective determinations of future market and economic conditions that were also sensitive to variation.

Minor changes to those assumptions could have had a significant effect on the Company’s assessment of the carrying value of

Sunseeker Resort.

Additionally, the audit effort associated with this estimate required the use of professionals with specialized skills and knowledge.

The following are the primary audit procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s impairment assessment process for Sunseeker Resort.

This included controls over the development of the projected hotel revenue growth rates and terminal capitalization rate assumptions and selection of the discount rate assumption used to develop the fair value estimate.

We involved valuation professionals with specialized skills and knowledge, who assisted in assessing the appropriateness of the discount rate, projected hotel revenue growth rates and terminal capitalization rate used by the Company by comparing them to market data and considering the risk profile of Sunseeker Resort.

Fair Value of Debt

As discussed in Note 9 to the consolidated financial statements, the Company’s debt had a carrying value and fair value of $1,413 million and $1,424 million, respectively, as of December 31, 2025.

The Company estimates the fair value of debt using a discounted cash flow method, which involves significant judgment in determining the discount rate.

Management engaged a third-party specialist to assist in developing the discount rate.

We identified the evaluation of the fair value of debt as a critical audit matter.

Complex auditor judgment was required to evaluate the discount rate used in determining the fair value of debt because of the need to involve professionals with specialized skills and knowledge.

Changes in the discount rate could have had a significant impact on the fair value of debt.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the estimation of fair value of debt, including controls over the determination of the discount rate.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate by comparing it to an independently developed discount rate range.

We have served as the Company’s auditor since 2016.

Dallas, Texas

March 3, 2025

February 26, 2026

ALLEGIANT TRAVEL COMPANY

23 unchanged sentences

Accrued liabilities 186,019 181,275

Accrued pilot retention bonus 235,887 146,129

Current operating lease liabilities 10,936 20,714

17 unchanged sentences

25,559,128 and 25,580,445 shares issued;

18,407,799 and 18,269,090 shares outstanding in 2024 and 2023

Treasury shares, at cost, 7,172,646 and 7,232,733 shares in 2024 and 2023

18,377,737 and 18,407,799 shares outstanding at December 31 2025 and 2024, respectively

Treasury shares, at cost, 7,181,391 and 7,172,646 shares at December 31, 2025 and 2024, respectively

( 682,511 ) ( 678,431 )

8 unchanged sentences

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands, except per share amounts)

38 unchanged sentences

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

2 unchanged sentences

NET INCOME (LOSS)

Other comprehensive income (loss):

$ ( 44,697 ) $ ( 240,238 ) $ 117,596

Other comprehensive income:

Change in available-for-sale securities, net of tax 695 ( 42 ) 2,734

TOTAL COMPREHENSIVE INCOME (LOSS)

$ ( 44,002 ) $ ( 240,280 ) $ 120,330

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share amounts)

(in thousands, except per share amounts)

Common Additional other Total

stock Par paid-in comprehensive Retained Treasury shareholders'

outstanding value capital income (loss) earnings shares equity

Balance at December 31, 2021 18,111 $ 25 $ 692,053 $ 2,056 $ 1,167,475 $ ( 638,057 ) $ 1,223,552

Share-based compensation 323 — 17,418 — — — 17,418

Shares repurchased by the Company and held as treasury shares ( 379 ) — — — — ( 29,905 ) ( 29,905 )

Stock issued under employee stock purchase plan 73 — — — — 7,939 7,939

Other comprehensive loss — — — ( 799 ) — — ( 799 )

Net income — — — — 2,493 — 2,493

outstanding value capital income earnings shares equity

Balance at December 31, 2022 18,128 $ 25 $ 709,471 $ 1,257 $ 1,169,968 $ ( 660,023 ) $ 1,220,698

5 unchanged sentences

Other comprehensive income

— — — 2,734 — — 2,734

Net income — — — — 117,596 — 117,596

Balance at December 31, 2023

18,269 $ 26 $ 741,055 $ 3,991 $ 1,265,420 $ ( 681,932 ) $ 1,328,560

Share-based compensation 79 — 19,545 — — — 19,545

4 unchanged sentences

Other comprehensive loss

— — — ( 42 ) — — ( 42 )

— — — — ( 240,238 ) — ( 240,238 )

Balance at December 31, 2024 18,408 $ 26 $ 760,600 $ 3,949 $ 1,003,248 $ ( 678,431 ) $ 1,089,392

Share-based compensation ( 21 ) — 11,367 — — — 11,367

Shares repurchased by the Company and held as treasury shares ( 189 ) — — — — ( 13,588 ) ( 13,588 )

Stock issued under employee stock purchase plan 180 — — — — 9,508 9,508

Other comprehensive income — — — 695 — — 695

Net loss — — — — ( 44,697 ) — ( 44,697 )

8 unchanged sentences

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ ( 44,697 ) $ ( 240,238 ) $ 117,596

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 249,185 258,251 223,130

(Gain) loss on aircraft and other equipment disposals ( 37,664 ) ( 34,936 ) 920

Special charges, net of recoveries 348,985 27,189 34,268

Special charges 127,636 348,985 27,189

Share-based compensation expense 10,867 22,568 29,749

4 unchanged sentences

Tax receivable 13,053 ( 5,616 ) 3,932

Prepaid expenses ( 10,518 ) ( 1,825 ) ( 10,625 )

Accounts payable 8,742 ( 5,031 ) 14,770

Accrued liabilities 95,503 65,568 42,605

Accrued pilot retention bonus 89,758 91,498 54,631

Loyalty program liability ( 3,079 ) 9,899 14,313

6 unchanged sentences

Proceeds from maturities of investment securities 844,050 763,841 976,804

Proceeds from sale of Sunseeker Resort 189,936 — —

Proceeds from sale of property and equipment 76,804 86,156 26,526

11 unchanged sentences

Debt issuance costs ( 11,450 ) ( 2,260 ) ( 7,116 )

Sunseeker construction financing disbursements 18,320 102,330 ( 92,650 )

Proceeds from Sunseeker construction financing account 2,000 18,320 102,330

Other financing activities 9,506 9,141 8,168

3 unchanged sentences

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 190,760 $ 302,319 $ 159,584

CASH PAYMENTS FOR:

CASH PAYMENTS/(RECEIPTS) FOR:

Interest paid, net of amount capitalized $ 121,663 $ 107,381 $ 111,912

Income tax paid 8,738 1,012 308

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS

1 unchanged sentence

Purchases of property and equipment in accrued liabilities and other $ 42,403 $ ( 671 ) $ 71,672

Flight equipment acquired under finance leases — — 192,457

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Note 1 — Organization and Business of Company

Allegiant Travel Company (the “Company”) is a leisure travel company focused on providing travel services and products to residents of under-served cities in the United States.

Allegiant Travel Company (the “Company”) is a leisure travel company focused on providing travel services and products to residents of underserved cities in the United States.

The Company operates a low-cost, low utilization passenger airline which sells air transportation both on a stand-alone basis and bundled with the sale of ancillary air-related and third party services and products.

The Company also provides air transportation under fixed fee flying arrangements, generates other ancillary revenues, and owns and operates Sunseeker Resort and Aileron, the related golf course.

The Company also provides air transportation under fixed fee flying arrangements and generates other ancillary revenues.

Until September 4, 2025, the Company also owned and operated Sunseeker Resort and Aileron, the related golf course.

Note 2 — Summary of Significant Accounting Policies

13 unchanged sentences

Accounts Receivable

Accounts receivable are recorded at invoiced amount which approximates fair value.

In addition to income tax receivable, the accounts receivable consist primarily of amounts due from credit card companies associated with the sale of tickets for future travel.

Accounts receivable are recorded at the invoiced amount, which approximates fair value.

In addition to income taxes receivable, the accounts receivable consist primarily of amounts due from credit card companies associated with the sale of tickets for future travel.

These receivables are short-term and generally settle within a few days of sale.

4 unchanged sentences

For investments in an unrealized loss position, the Company determines whether a credit loss exists by considering information about the collectability of the instrument and current market conditions.

There have been no material credit losses in the years presented.

There have been no credit losses in the years presented.

Investment securities with original maturities of three months or less are classified as cash equivalents.

1 unchanged sentence

Short-term investments have a maturity date less than or equal to one year from the balance sheet date, and long-term investments have a maturity date greater than one year from the balance sheet date.

The amortized cost of investment securities sold is determined by the specific identification method with any realized gains or losses reflected in other (income) expense.

The amortized cost of investment securities sold is determined by the specific identification method with any realized gains or losses reflected in interest income.

The Company had no material realized losses during the years ended December 31, 2025, 2024, and 2023.

9 unchanged sentences

Deposits and other assets consist primarily of airport deposits, aircraft lease deposits, investments in unconsolidated affiliates, credits receivable under aircraft purchase agreements and scrap assets.

At December 31, 2023, deposits and other assets included a $ 50.0 million note receivable from the counterparty in the Company's joint-venture alliance, which amount was repaid in full during 2024.

The Company also had outstanding receivables from third parties as of December 31, 2024 and 2023, of which $ 15.1 million and $ 17.0 million respectively, were due more than one year after the balance sheet date.

The Company also had outstanding receivables from

third parties as of December 31, 2025 and 2024, of which $ 10.5 million and $ 15.1 million respectively, were due more than one year after the balance sheet date.

Operating Lease Right-of-Use Asset and Liability

The Company determines if an arrangement is a lease at inception and has lease agreements for aircraft, office facilities, office equipment, certain airport and terminal facilities, and other space and assets with non-cancelable lease terms.

The Company determines if an arrangement is a lease at inception and has lease agreements for aircraft, training facilities, ground equipment, certain airport and terminal facilities, and other space and assets with non-cancelable lease terms.

Certain real estate and property leases, aircraft leases, and various other operating leases are measured on the balance sheet with a lease liability and right-of-use ("ROU") asset.

1 unchanged sentence

ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make scheduled lease payments.

ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term.

ROU assets and lease liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term.

At lease commencement, the present value of lease payments is calculated using the rate implicit in the lease, if known, or an estimated incremental borrowing rate which takes into consideration recent debt issuances as well as other applicable market data available.

Lease payments include fixed payments, variable payments based on an index or rate, reasonably certain purchase options, termination penalties, and others as required by the Accounting Standards (ASU) 2016-02, Leases (Topic 842).

Lease payments include fixed payments, variable payments based on an index or rate, reasonably certain purchase options, termination penalties, and others as required by Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842).

Lease payments do not include variable lease payments other than those based on an index or rate, any guarantee by the lessee of the lessor’s debt, or any amount allocated to non-lease components.

2 unchanged sentences

Additionally, lease and non-lease components are accounted for as a single lease component for real estate agreements.

Leased Aircraft Return Costs

The Company's aircraft lease agreements generally require the Company to return airframes and engines to the lessor in a specified condition as required by the lease agreement or to pay an amount to the lessor based on the airframe and engines' actual condition on redelivery.

Lease return conditions are evaluated at inception of a lease and throughout the lease term.

Return conditions that are based on usage of the aircraft during the lease are considered a variable rent expense.

Due to the inherent uncertainty in estimating (i) the condition of the airframe and engines at redelivery, and (ii) whether the Company intends to satisfy those conditions by performing repairs, making a required payment to the lessor, or, for aircraft engines, replacing the leased engine with an owned engine that meets the required conditions, lease return costs generally become probable and estimable near the end of the lease term and after the last major maintenance event occurring during the lease.

Once the return costs have become probable and estimable, the Company recognizes the estimated expense over the remaining lease term as a component of aircraft lease rentals in the Company's consolidated statements of income (loss).

Property and Equipment

22 unchanged sentences

Maintenance and repair costs include all parts, materials, and line maintenance activities required to maintain the Company's fleet.

The Company accounts for major maintenance costs of its airframes and engines using the deferral method.

The Company accounts for major maintenance costs for airframes and engines using the deferral method.

Under this method, the Company capitalizes the cost of major maintenance events, which are amortized as a component of depreciation and amortization expense, over the estimated period until the next scheduled major maintenance event.

6 unchanged sentences

and (ii) estimated future cash flows expected to be generated by those assets which are based on additional assumptions such as (but not limited to) asset utilization, average fare, block hours, fuel costs, fixed fee contracts, estimated salvage values, discount rate, projected growth rates and terminal value assumptions.

For the year ended December 31, 2024, the Company recorded a $ 321.8 million impairment loss related to the Sunseeker Resort Segment.

The impairment is more fully discussed in Note 15 .

During the year ended December 31, 2024, the Company recorded an impairment loss of $ 321.8 million related to Sunseeker Resort.

The impairment charges are more fully discussed in Note 15 .

Assets Held for Sale

The Company classifies assets as held for sale when the asset or asset group meets all of the accounting requirements to be classified as held for sale.

Assets held for sale and any related liabilities are presented as single asset and liability amounts on the balance sheet with a valuation allowance, if necessary, to reduce the carrying amount of the net assets to the lower of carrying amount or estimated fair value less cost to sell.

Estimates are required to determine the fair value and the related disposal costs.

The estimated fair value is generally based on solicited offers or a discounted cash flow model.

In subsequent periods, the valuation allowance may be adjusted based on changes in management’s estimate of fair value less cost to sell.

Depreciation and amortization of long-lived assets are not recorded during the period in which such assets are classified as held for sale.

In second quarter 2025, the Company determined that Sunseeker Resort met all of the held for sale accounting criteria and recorded a write-down loss of $ 100.4 million to reduce the Resort's carrying value to its estimated fair value.

The sale of Sunseeker Resort is more fully discussed in Note 15 .

Manufacturer's Credits

1 unchanged sentence

These credits are generally applied as a reduction of the cost of each item acquired under the purchase agreement at the time of delivery, which results in either deferral of the credit or recognition of an asset depending on the timing of receipt.

As of December 31, 2025, and 2024 respectively, the Company had $ 40.2 million and $ 16.8 million of deferred credit liabilities, recorded in other noncurrent liabilities in the Company's balance sheet, and $ 7.1 million and $ 17.0 million of credits receivable, recorded in deposits and other assets in the Company's balance sheet.

Accrued Pilot Retention Bonus

In May 2023, to address pilot pay issues while a new collective bargaining agreement is negotiated, the Company began to accrue a retention bonus for pilots who continue employment with the Company until a new labor agreement is approved.

The amount being accrued is 35 percent of current pay for a minimum 85 pay credit hours per month, except for first year first officers, for whom the percentage is 82 percent.

At December 31, 2025 and 2024, the accrued pilot retention bonus, inclusive of payroll tax, was $ 235.9 million and $ 146.1 million, respectively.

Revenue Recognition

7 unchanged sentences

Revenues from air-related charges are nonrefundable and recognized when the transportation is provided.

If a customer cancels a flight, a voucher may be issued for a future flight under certain circumstances, at which time

the associated revenue is recognized in scheduled service revenue upon completion of the future flight.

If a customer cancels a flight, a voucher may be issued for a future flight under certain circumstances, at which time the associated revenue is recognized in scheduled service revenue upon completion of the future flight.

Additionally, the Company estimates the value of vouchers that will expire unused and recognizes such estimate into revenue at the time of issuance.

1 unchanged sentence

Various taxes and fees, assessed on the sale of tickets to customers, are collected by the Company serving as an agent, and remitted to taxing authorities.

These taxes and fees are not included as revenue in the Company’s consolidated statements of income and are recorded as a liability until remitted to the appropriate taxing authority.

These taxes and fees are not included as revenue in the Company’s consolidated statements of income and are recorded within accrued liabilities until remitted to the appropriate taxing authority.

Third party products revenue

Ancillary third party products revenue is generated from the sale of hotel rooms, rental cars, travel insurance and ticket attractions, as well as marketing revenue associated with the co-brand credit card.

Ancillary third party products revenue is generated from the sale of hotel rooms, rental cars, travel insurance and ticketed attractions, as well as marketing revenue associated with the co-brand credit card.

Revenue from the sale of third party products is recognized at the time the product is utilized, such as the time a purchased hotel room is occupied.

Revenue from the sale of third party products is recorded net of amounts paid to wholesale providers, travel agent commissions, and transaction costs.

Revenue from travel point redemptions from the co-brand credit card and the loyalty program are described in the Allways Rewards ® Credit Card Program and Allways Rewards ® Loyalty Program sections below.

Revenue from the marketing component associated with the co-brand credit card and the loyalty program are described in the Allways Rewards ® Credit Card Program and Allways Rewards ® Loyalty Program sections below.

Fixed fee contract revenue

2 unchanged sentences

Sunseeker Resort

Sunseeker Resort's revenue from contracts with customers primarily consists of sales of rooms, food and beverage, golf, retail and other goods and services.

As compensation for such goods and services, the Company is typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased.

Room charges are generally payable at the time the hotel guest checks out of the hotel.

The Company generally satisfies the performance obligation related to room sales over time, and the Company recognizes the revenue on a daily basis, as the rooms are occupied and the Company has rendered the services.

Charges for food and beverage, golf, retail and other goods and services are settled at a point in time, as the sale is made.

Until the sale of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") on September 4, 2025, the Company recorded revenue primarily consisting of sales of rooms, food and beverage, golf, retail and other goods and services.

As compensation for such goods and services, the Company was typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased.

Room charges were generally payable at the time the hotel guest checked out of the hotel.

The Company generally satisfied the performance obligation related to room sales over time, and the Company recognized the revenue on a daily basis, as the rooms were occupied and the Company had rendered the services.

Charges for food and beverage, golf, retail and other goods and services were settled at a point in time, as the sales were made.

Sunseeker Resort revenues are included in resort and other revenue in the consolidated statements of income.

2 unchanged sentences

Under this arrangement, the Company identified the following deliverables:

travel points to be awarded (the travel component), use of the Company’s brand and access to its member lists, and certain other advertising and marketing elements (collectively the marketing component).

travel points to be

awarded (the travel component), use of the Company’s brand and access to its member lists, and certain other advertising and marketing elements (collectively the marketing component).

Each of these deliverables is accounted for separately and allocation of the consideration from the agreement is determined based on the relative selling price of each deliverable.

2 unchanged sentences

Revenue from the marketing component is considered earned in the period in which points are sold and is therefore recognized into third party products revenue in the same period.

The loyalty program deferred revenue classified as a current liability represents our estimate of revenue expected to be recognized in the next twelve months based on projected redemptions, while the balance classified as a noncurrent liability represents our estimate of revenue expected to be recognized beyond twelve months.

Payments are typically due to us monthly based on the volume of points sold during the period.

Allways Rewards® Loyalty Program

Allegiant’s Allways Rewards® Loyalty Program, which launched in 2021, enables program members to earn points for every dollar they spend on the Company’s website.

In addition to opportunities to redeem points for flights, lodging, rental cars, and at Sunseeker Resort, the program leverages Allegiant's partnerships to offer additional rewards to members, including sports tickets and exclusive experiences.

In addition to opportunities to redeem points for flights, lodging, and rental cars, the program leverages Allegiant's partnerships to offer additional rewards to members, including sports tickets and exclusive experiences.

Members can also earn points by using their Allegiant co-brand credit card.

Under Allways Rewards®, members receive one point for every $1 spent at Allegiant.com, and two points per $1 for spending over $500 (excluding taxes and fees).

Members also earn one point for every $1 spent at sunseekerresorts.com and one point per $1 spent during their stay at Sunseeker Resort, provided the purchases are charged to their room.

The Company utilizes the deferred revenue method of accounting for points earned through the program based on the stand-alone selling price and revenue is recognized when points are redeemed and the underlying service has been provided.

Under Allways Rewards®, members receive one point for every $1 spent at allegiantair.com, and two points per $1 for spending over $500 (excluding taxes and fees).

Points earned through the program are deferred based on the stand-alone selling price, and revenue is recognized when points are redeemed and the underlying service has been provided.

The stand-alone selling price of points is adjusted for an estimate of points that will not be redeemed (“breakage”) using a statistical model based on historical redemption patterns to develop an estimate of the likelihood of future redemption.

Advertising Costs

Advertising costs are charged to expense in the period incurred.

Advertising costs, included in sales and marketing expense in the consolidated statements of income, are charged to expense in the period incurred.

Advertising expense was $ 29.1 million, $ 32.0 million and $ 41.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

31 unchanged sentences

Share-Based Compensation

The Company accounts for share-based compensation in accordance with accounting standards which require the compensation cost related to share-based payment transactions be recognized in the Company’s consolidated statements of

The share-based compensation cost is measured based on grant date fair value.

10 unchanged sentences

Measurement (Step II) is only addressed if the position is deemed to be more likely than not to be sustained.

Under Step II, the tax benefit is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement.

Under Step II, the tax benefit is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement.

The tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period they meet the “more likely than not” standard.

2 unchanged sentences

Recent Accounting Pronouncements

Beginning with annual reporting for the year ended December 31, 2024, the Company adopted Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures that was issued by the Financial Accounting Standards Board ("FASB").

This new standard requires an enhanced disclosure of significant segment expenses on an annual and interim basis.

Upon adoption, the guidance was applied retrospectively to all prior periods presented in the financial statements.

See Note 1 4 - Operating Segments for additional information.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740):

Beginning with annual reporting for the year ended December 31, 2025, the Company adopted Accounting Standards Update ("ASU") 2023-09 "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." This new standard requires expanded income tax disclosure of specific categories in the rate reconciliation and income taxes paid, disaggregated by jurisdiction.

ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption and retrospective application permitted.

The Company will adopt this standard effective for 2025 and does not expect that the adoption of this standard will have a material effect on its financial statements.

Upon adoption, the guidance was applied retrospectively to all prior periods presented in the financial statements.

See Note 10 - Income Taxes for additional information.

In November 2024, the FASB issued ASU 2024-03 "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

1 unchanged sentence

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03 and does not expect the adoption of this standard will have a material effect on its financial statements.

The Company is currently evaluating the impact of adopting ASU 2024-03.

In September 2025, the FASB issued ASU 2025-06 "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal Use Software." This new standard clarifies and modernizes the accounting for costs related to internal-use software in Accounting Standards Codification (ASC) 350-40, including removing references to project stages and clarifying the threshold entities may apply to begin capitalizing costs.

ASU 2025-06 is effective for all fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

The Company is currently evaluating the impact of adopting ASU 2025-06.

In December 2025, the FASB issued ASU 2025-11 "Interim Reporting (Topic 270)." This new standard clarifies interim reporting guidance, develops a list of disclosures required by other Topics and intends to enhance consistency in interim reporting across entities.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

Note 3 — Special Charges

Sunseeker Resort

Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") was impacted by Hurricanes Ian, Idalia, Debby, Helene, and Milton between 2022 and 2024.

While the Resort was built to withstand hurricanes and flooding, these weather events are unprecedented in their frequency and the amount of destruction caused in Southwest Florida.

The Company believes these weather events will be unusual and has included the cost of these events and the related insurance recoveries in special charges.

The estimated losses are recorded to special charges in the period of the event and are offset by insurance recoveries in the period they are approved for payment by the insurer.

To date, the Company has recorded $ 87.2 million in losses and $ 58.6 million in insurance recoveries.

At this time, the Company does not expect that additional amounts to be recovered are significant.

During the fourth quarter of 2024, Sunseeker Resort was directly impacted by Hurricane Milton, which made landfall on the west coast of Florida on October 9, 2024.

As the Resort was within the evacuation zone, operations were temporarily halted beginning October 7, 2024, and the Resort reopened with limited services on October 14, 2024.

Additionally, the Resort was affected by Hurricanes Debby and Helene during 2024.

The combined impact of Hurricanes Milton, Debby, and Helene resulted in a total of $ 7.7 million in losses recorded by the Company for 2024 without regard to lost revenues.

In fourth quarter 2024, the Company recorded an impairment charge of $ 321.8 million in special charges related to Sunseeker Resort and associated Aileron Golf Course.

For more detailed discussion regarding the impairment charge see Note 15 .

In September 2023, the Company reevaluated its fleet plan and identified 21 airframes for early retirement to coincide with 737 MAX aircraft deliveries as scheduled under an amendment to the Company's agreement with The Boeing Company signed in September 2023.

Two airframes were retired in 2023 and seven airframes were retired in 2024.

The remaining airframes are to be retired between January 2025 and December 2026.

The accelerated depreciation on these airframes resulting from a change in the estimated useful life is recorded as a special charge in the years ended December 31, 2024 and December 31, 2023.

The Company also recorded a special charge in the year ended December 31, 2022 related to accelerated depreciation on the last of the aircraft identified for early retirement during 2020.

The Company has identified airframes for early retirement to coincide with 737 MAX aircraft deliveries as scheduled under an amendment to the Company's agreement with The Boeing Company signed in September 2023.

To date, the Company has retired a total of 15 airframes under this plan.

The remaining airframes are to be retired between January 2026 and January 2027.

The accelerated depreciation on these airframes resulting from a change in the estimated useful life is recorded as a special charge in the years ended December 31, 2025, 2024, and 2023.

In second quarter 2025, the Company recorded $ 12.1 million of special charges related to corporate restructuring efforts taken in response to softness in air travel demand due to heightened macroeconomic uncertainty.

These efforts included voluntary separation packages offered to corporate and operational personnel and termination of certain marketing agreements.

In fourth quarter 2025, the Company committed to a plan to redevelop certain internal-use software to better suit operational needs.

The redevelopment is expected to be completed by fourth quarter 2026.

As a result, the estimated useful life of the existing internal-use software asset was shortened, and the accelerated amortization resulting from the change in estimated useful life is recorded as a special charge of $ 10.0 million in the year ended December 31, 2025.

In conjunction with the software redevelopment, the Company also identified certain software development costs that were yet to be placed in service and will be replaced by the redeveloped software.

As a result, the Company recorded an additional one-time special charge of $ 9.3 million to reflect the write-off of those costs.

In fourth quarter 2025, the Company recorded $ 4.1 million of special charges for professional services and other costs related to the proposed acquisition of Sun Country Airlines Holdings, Inc.

("Sun Country"), which is more fully discussed in Note 16 .

In April 2024, the Company's flight attendants, represented by the Transport Workers Union of America, ratified a new five-year collective bargaining agreement.

Under the agreement, a ratification bonus was paid in May 2024, which amount is included within special charges.

In third quarter 2024, the Company recorded $ 3.4 million of special charges related to organizational restructuring.

Special Charges

Sunseeker Resort

During the year ended December 31, 2025, the Company recorded $ 98.3 million of special charges related to sale of Sunseeker Resort and the associated Aileron Golf Course.

This included an asset write-down charge of $ 100.4 million, offset by $ 2.1 million of closing adjustments associated with the sale.

The sale of the Resort is more fully discussed in Note 15 .

In fourth quarter 2024, the Company recorded an impairment charge of $ 321.8 million in special charges related to Sunseeker Resort and associated Aileron Golf Course.

The impairment charge is more fully discussed in Note 15 .

Sunseeker Resort was damaged by weather events occurring between 2022 and 2024.

The Company considered these events unusual and accounted for their costs and related insurance recoveries as special charges.

Estimated losses were recorded as special charges at the time of the event and offset by insurance recoveries when approved for payment.

The Company recorded $ 4.2 million net insurance recoveries during 2025.

No further insurance recoveries are expected.

Special Charges Table

The table below summarizes special charges recorded during the years ended December 31, 2025, 2024, and 2023.

2 unchanged sentences

Accelerated depreciation on airframes identified for early retirement $ 8,029 $ 31,066 $ 35,091

Flight attendant ratification bonus 10,821 — —

Organizational restructuring 12,095 3,420 —

Accelerated amortization and disposal of software identified for redevelopment 19,292 — —

Costs related to Sun Country Airlines acquisition 4,123 — —

Flight attendant ratification bonus — 10,821 —

Airline special charges 43,539 45,307 35,091

Sunseeker weather events, net of insurance recoveries (1)

987 ( 6,446 ) 34,045

Sunseeker impairment 321,837 — —

Sunseeker special charges, net of insurance recoveries 94,166 322,824 ( 6,446 )

322,824 ( 6,446 ) 34,045

Total special charges $ 137,705 $ 368,131 $ 28,645

(1) Includes $ 2.7 million and $ 8.3 million of business interruption insurance proceeds for the years ended December 31, 2024 and December 31, 2023, respectively.

There were no business interruption recoveries for the year ended December 31, 2022.

Note 4 — Revenue Recognition

8 unchanged sentences

Sales of passenger tickets not yet flown are recorded in air traffic liability.

Passenger revenue is recognized when transportation is provided.

As of December 31, 2025, the air traffic liability balance was $ 363.3 million, of which approximately $ 319.8 million was related to forward bookings, with the remaining $ 43.5 million related to credit vouchers for future travel.

2 unchanged sentences

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete.

Loyalty redemptions

In relation to the travel component of the Allways Rewards® co-brand credit card contract and the Allways Rewards® loyalty program, the Company has a performance obligation to its members with future travel award redemptions at the airline.

The accounting and recognition for the loyalty program redemptions are discussed in Note 2 above.

The following table presents the activity of the co-brand credit card and the loyalty program as of the dates indicated:

Year Ended December 31,

(in thousands) 2025 2024

Balance at January 1 $ 80,711 $ 70,813

Points awarded (deferral of revenue) 75,546 67,050

Points redeemed (recognition of revenue) (1)

( 78,625 ) ( 57,152 )

Balance at December 31 (2)

$ 77,632 $ 80,711

(1) Points are combined in one homogeneous pool and are not separately identifiable.

Revenue from points redeemed includes both points that were part of the loyalty program liability at the beginning of the period, as well as points that were issued during the period.

(2) The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in noncurrent liabilities expected to be recognized into revenue in periods thereafter.

Third Party Products Revenue

Third party products revenue primarily includes revenue associated with our loyalty program, which is comprised of the marketing component of point sales to the co-brand credit card provider and other marketing related payments which totaled $ 82.8 million, $ 86.5 million and $ 65.4 million for the twelve months ended December 31, 2025, 2024 and 2023, respectively.

The accounting and recognition for the loyalty program marketing services are discussed in Note 2 above.

The remaining amounts included within third party products revenue relate to travel insurance, hotel rooms, rental cars and ticket attractions.

Resort Revenue

The Company's Resort revenues for the periods indicated are set forth in the table below:

The revenues of Sunseeker Resort prior to its sale on September 4, 2025 ( Note 15 ), are set forth in the table below:

Year Ended December 31,

4 unchanged sentences

Total resort revenue $ 60,680 $ 71,750 $ 2,881

Revenue from banquets, golf, retail and spa services are included in other resort revenue.

Resort revenue is recognized as the underlying services or goods have been provided.

There is typically little to no lag between when the services are performed and when payment is remitted.

Large group reservations, conventions, and other event bookings require advance deposits which are recorded as accrued liabilities in the Company's balance sheet until the related services and goods are provided.

Guest receivables are recorded in accounts receivable on the Company's balance sheet for room nights stayed prior to payment at checkout.

The amounts of advance deposit liabilities and guest ledger receivables were not material as of December 31, 2024 or December 31, 2023.

Loyalty redemptions

The following table presents the activity of the co-brand credit card and the loyalty program as of the dates indicated:

Year Ended December 31,

(in thousands) 2024 2023

Balance at January 1 $ 70,813 $ 56,500

Points awarded 67,050 68,483

Points redeemed ( 57,152 ) ( 54,170 )

Balance at December 31 $ 80,711 $ 70,813

The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in other noncurrent liabilities and expected to be recognized into revenue in periods thereafter.

Revenue from banquets, golf, retail, and spa services is included in other resort revenue.

Resort revenue was recognized as the underlying services or goods were provided, with minimal timing differences between service delivery and payment.

There were no advance deposit liabilities or guest ledger receivables at December 31, 2025, due to the sale of the Resort on September 4, 2025.

Note 5 — Property and Equipment

12 unchanged sentences

Property and equipment, net $ 2,947,536 $ 3,069,949

(1) On September 4, 2025, the Company completed the sale of Sunseeker Resort and related Aileron Golf Course.

See Note 15 .

As of December 31, 2025, the Company had firm commitments to purchase 34 aircraft which are expected to be delivered between 2026 and 2028.

During the year ended December 31, 2024, the Company sold flight equipment with a carrying amount of $ 51.3 million for proceeds of $ 86.2 million resulting in a gain of $ 34.9 million, which is included as an offset to other operating expense in the Company's consolidated income statement.

Accrued capital expenditures as of December 31, 2024 and 2023 were $ 8.9 million and $ 71.7 million, respectively.

For the year ended December 31, 2024, the Company recorded a $ 321.8 million impairment loss related to the Sunseeker Resort Segment.

The impairment is more fully discussed in Note 15 .

Note 6 — Long-Term Debt

16 unchanged sentences

Finance leases 2028 — 2032 4.44 % — 7.02 % 403,060 429,896

Construction loan agreement 2026 5.75 % 100,000 350,000

Unsecured debt 2025 6.15 % 130,500 —

Total debt $ 2,083,633 $ 2,282,169

Construction loan agreement N/A N/A — 100,000

Unsecured debt N/A N/A — 130,500

Total debt and finance lease obligations $ 1,816,264 $ 2,083,633

Related costs ( 16,648 ) ( 17,129 )

Total debt net of related costs $ 2,066,504 $ 2,259,654

Total debt and finance lease obligations, net of related costs $ 1,799,616 $ 2,066,504

Maturities of long-term debt as of December 31, 2025, for the next five years and thereafter, in the aggregate, are:

2 unchanged sentences

Total debt and finance lease obligations, net of related costs $ 1,799,616

(1) Includes pre-delivery deposit financing which is due upon delivery of each respective aircraft

Senior Secured Notes

In August 2022, the Company issued $ 550.0 million in aggregate principal amount of its 7.250 % Senior Secured Notes due 2027 (the “2027 Notes”) pursuant to an Indenture, dated as of August 17, 2022.

The 2027 Notes are secured by first priority security interests in, subject to permitted liens, substantially all of the property and assets of the Company and its subsidiaries (other than Sunseeker Resort and its subsidiaries), except that the collateral package excludes aircraft, aircraft engines, real property and certain other assets.

The 2027 Notes are secured by first priority security interests in, subject to permitted liens, substantially all of the property and assets of the Company and its subsidiaries, except that the collateral package excludes aircraft, aircraft engines, and certain other assets.

The collateral also secures the Company’s $ 150.0 million revolving credit facility (described below), on a pari passu basis.

The 2027 Notes bear interest at a fixed rate of 7.25 percent per annum, payable in cash on February 15 and August 15 of each year.

The 2027 Notes will mature on August 15, 2027.

The 2027 Notes mature on August 15, 2027.

The 2027 Notes contain certain covenants that limit the ability of the Company to, among other things:

6 unchanged sentences

If the Company fails to satisfy the minimum liquidity requirement, then the Company will be required to pay additional interest on all outstanding 2027 Notes in an amount equal to 2.0 % per annum of the principal amount of such 2027 Notes until the Company demonstrates compliance with the liquidity requirement.

During the year ended December 31, 2025, the Company redeemed and repurchased $ 147.0 million of the 2027 Notes through a combination of redemptions and open-market repurchases.

As of December 31, 2025, $ 403.0 million of the 2027 Notes remain outstanding.

Consolidated Variable Interest Entities

4 unchanged sentences

Revolving Credit Facilities

In August 2022, the Company entered into a credit agreement under which the Company is entitled to borrow up to $ 100.0 million.

In October 2023, the Company extended the term of this agreement to August 2025 with all other terms to remain the same.

The borrowing ability of the facility is based on the value of aircraft and engines placed into the collateral pool.

The notes under the facility will bear interest at a floating rate based on SOFR.

As of December 31, 2024, the facility remained undrawn.

In August 2022, the Company entered into a credit agreement that provides a senior secured revolving loan facility of $ 75.0 million.

The facility is secured by the same collateral that secures the 2027 Notes, has a term of 57 months and notes under the facility will bear interest at a floating rate based on SOFR.

In August 2022, the Company entered into a credit agreement that provided a senior secured revolving loan facility of $ 75.0 million, with an original term of 57 months.

The facility is secured by the same collateral that secures the 2027 Senior Secured Notes (discussed above), and notes under the facility will bear interest at a floating rate based on SOFR.

In December 2025, the Company amended the revolving loan facility to increase the total commitment to $ 150.0 million and extend the maturity date to December 5, 2030, subject to acceleration based on the balance and status of the 2027 Notes.

As of December 31, 2025, the facility remained undrawn.

In September 2022, the Company entered into a credit agreement under which the Company was entitled to borrow up to $ 200.0 million, which expired as of December 31, 2024.

At December 31, 2023, the Company had drawn the full $ 200 million available under the facility.

During the year ended December 31, 2024, the facility was fully repaid.

In March 2021, the Company entered into a revolving credit facility, under which it is entitled to borrow up to $ 50.0 million.

In March 2021, the Company entered into a revolving credit facility, under which it was entitled to borrow up to $ 50.0 million.

In February 2023, the Company extended the term of this agreement to March 2026 and the commitment was increased to $ 100.0 million.

In April 2025, the agreement was further amended to extend the maturity date to April 2028.

The borrowing ability is based on the value of the aircraft and engines placed into the collateral pool.

The notes for amounts borrowed under the facility will bear interest at a floating rate based on SOFR.

As of December 31, 2024, the facility remained undrawn.

Other Secured Debt

As of December 31, 2025, the facility was undrawn.

Debt Secured by Aircraft and Other Assets

The Company is party to financing agreements under which aircraft, other equipment or other assets serve as collateral.

Below are described those debt transactions entered into or that were drawn during 2024.

Below are described those debt transactions entered into or that were drawn or repaid during 2025.

In September 2023, the Company entered into a credit agreement under which it was entitled to borrow up to $ 412.1 million collateralized by aircraft, which was drawn in full during 2023 and 2024.

In December 2025, the Company made a voluntary prepayment of $ 50.8 million reducing the principal amount owed under this credit agreement.

In March 2024, the Company entered into credit agreements under which it was entitled to borrow up to $ 218.5 million, collateralized by new aircraft upon delivery.

During the year ended December 31, 2025, the Company borrowed the entirety of the $ 218.5 million available under these agreements, resulting in the facilities being fully drawn.

The loans bear interest at a variable rate based on three-month SOFR and are payable in quarterly installments over a term of 12 years.

In April 2025, the Company entered into a credit agreement with a borrowing capacity of up to $ 221.3 million to be secured by new aircraft upon delivery.

During the year ended December 31, 2025, the Company borrowed the entirety of the $ 221.3 million available under the agreement, resulting in the facility being fully drawn.

The borrowing carries a variable interest rate based on three-month SOFR and consists of two tranches maturing in seven and twelve years payable in quarterly installments with a balloon payment at maturity.

In June 2025, the Company entered into a financing agreement providing for borrowings of up to $ 149.2 million secured by new aircraft upon delivery.

During the year ended December 31, 2025, the Company borrowed the entirety of the $ 149.2 million

available under the agreement, resulting in the facility being fully drawn.

The loan bears interest at a variable rate based on three-month SOFR and matures twelve years from the drawing date, payable in quarterly installments.

During the year ended December 31, 2025, the Company fully repaid several facilities secured by aircraft and other assets ahead of their originally scheduled maturity dates.

The repayments totaled $ 204.7 million, including the $ 50.8 million mentioned above.

The loans repaid were originally scheduled to mature between October 2025 and September 2036.

PDP Financing

In November 2023, the Company entered into a pre-delivery deposit financing facility to borrow up to $ 158.0 million secured by the Company's purchase rights for certain Boeing 737 MAX aircraft.

The facility bears a floating interest rate based on SOFR and is due upon delivery of each aircraft or no later than June 30, 2025.

The Company drew an additional $ 18.8 million on this facility during the year ended December 31, 2024 and as of the same date, the Company had drawn a total of $ 132.6 million under the facility.

In September 2023, the Company entered into a credit agreement under which the Company is entitled to borrow up to $ 412.1 million.

The initial draw of $ 196.4 million received in September 2023 was collateralized by aircraft and used in part to pay off existing debt.

This initial draw bears interest at a fixed rate, with quarterly installments of principal and interest, and matures in September 2031.

The Company received proceeds for the remaining commitment of $ 215.7 million in 2024.

These draws were collateralized by aircraft and bear a floating interest rate based on SOFR.

The 2024 draws have a term of twelve years , maturing between September 2036 and December 2036, and are payable in quarterly installments.

In March 2024, the Company entered into a credit agreement under which it is entitled to borrow up to $ 218.5 million, which will be collateralized by new aircraft upon delivery.

The loans will bear interest at a variable rate based on 3-month SOFR and are

payable in quarterly installments over a term of 12 years.

At December 31, 2024, the commitments remain undrawn pending new aircraft delivery.

In September 2024, the Company entered into a credit agreement under which the Company borrowed $ 22.0 million secured by certain aircraft assets.

The loan bears interest at a variable rate based on SOFR, is payable in quarterly installments, and will mature in September 2029.

The facility bears a floating interest rate based on SOFR and was originally due upon delivery of each aircraft or no later than June 30, 2025.

In April 2025, the Company entered into an amendment to extend the maturity date of the agreement to no later than March 2027.

The Company drew a total of $ 132.6 million on the facility between November 2023 and February 2024.

During the year ended December 31, 2025, the Company fully repaid the $ 132.6 million in outstanding principal, and the facility had undrawn borrowing capacity of $ 25.1 million as of that same date.

Finance Leases

2 unchanged sentences

Construction Loan Agreement

In October 2021, Sunseeker Florida, Inc.

(“SFI”), a wholly-owned subsidiary of the Company, entered into a Credit Agreement pursuant to which SFI borrowed $ 350.0 million to fund the remaining construction of the initial phases of Sunseeker Resort.

The loan is secured by the Resort.

The equity of SFI is also pledged to secure the loan.

The loan bears interest at 5.75 percent per annum payable semi-annually, provides for semi-annual principal payments of $ 26.0 million beginning in 2025 and matures in October 2028.

The credit agreement includes covenants similar to the covenants in the 2027 Notes.

To support the credit, the Company has guaranteed the full amount of the debt.

In December 2024, the Company made a voluntary partial prepayment of $ 250.0 million, and as of December 31, 2024, the remaining principal balance of the loan was $ 100 million.

In October 2021, the Company, through a wholly-owned subsidiary, entered into a credit agreement to borrow $ 350.0 million to fund the initial phases of Sunseeker Resort construction.

The Company prepaid $ 250.0 million of the loan's principal balance during 2024, and in February 2025, prepaid the remaining $ 100.0 million principal balance resulting in full repayment of the loan.

Unsecured Debt

In December 2024, the Company entered into an unsecured credit facility and received proceeds of $ 130.5 million.

The loan bears interest at a floating rate based on SOFR, and principal repayments are due at the delivery of certain 737 MAX aircraft or no later than December 2025.

The loan matured upon delivery of certain aircraft and was to be repaid using the proceeds from financing associated with those aircraft.

During the year ended December 31, 2025, the Company repaid the entirety of the $ 130.5 million outstanding under the facility as the associated aircraft delivered.

Note 7 — Leases

The Company had 23 aircraft under finance leases and 17 aircraft under operating leases as of December 31, 2024 with remaining terms through 2032.

The Company had 23 aircraft under finance leases and nine aircraft under operating leases as of December 31, 2025 (excluding six aircraft under operating lease which have been removed from service pending redelivery), with remaining terms through 2032.

As of December 31, 2024, there were 23 aircraft under finance lease and 17 aircraft under operating lease.

The components of lease costs recognized on the statements of income were as follows:

8 unchanged sentences

Other operating expense 25,250 26,178 25,246

Variable lease cost Station operations;

Variable lease cost (1)

Aircraft lease rentals;

Station operations;

Maintenance and repairs;

1 unchanged sentence

Total lease cost $ 87,277 $ 76,519 $ 81,481

(1) In 2025, includes estimated lease return costs which we began to accrue in second quarter 2025 for certain aircraft on operating leases related to redeliveries in 2025 and future years.

Lease position as of December 31, 2025 and December 31, 2024

40 unchanged sentences

The Company is authorized by its Board of Directors to acquire the Company’s stock through open market purchases under its share repurchase program.

As of December 31, 2025, the Company had remaining unused purchase authority of $ 64.7 million.

The Board of Directors has, to date, authorized additional expenditures for share repurchases when the authority is exhausted.

The Company suspended stock repurchases upon the onset of the pandemic through September 30, 2022, as part of accepting benefits from the U.S.

Treasury under the Payroll Support Programs.

Since fourth quarter 2022, the Company is no longer subject to this restriction and has resumed repurchasing shares when advantageous opportunities arise.

The Company will make open market repurchases when advantageous opportunities arise.

Share repurchases consisted of the following during the periods indicated:

11 unchanged sentences

Total cash dividends paid (in thousands) — 21,934 22,144

The Company suspended payment of cash dividends upon the onset of the pandemic, and as part of accepting benefits from the U.S.

Treasury under the Payroll Support Programs, the Company agreed not to pay cash dividends through September 30, 2022.

The Company recommenced payment of cash dividends in the second half of 2023, but on July 8, 2024, the Company suspended its quarterly dividend indefinitely.

The Company has suspended its quarterly dividend indefinitely since July 2024.

Note 9 — Fair Value Measurements

17 unchanged sentences

Cash equivalents

US Government and agency obligations $ 81,535 $ — $ 81,535 $ 10,201 $ — $ 10,201

Money market funds $ 42,833 $ 42,833 $ — $ 41,494 $ 41,494 $ —

US Government and agency obligations 16,901 — 16,901 81,535 — 81,535

Commercial paper 14,712 — 14,712 22,689 — 22,689

Municipal debt securities 10,299 — 10,299 7,848 — 7,848

Corporate debt securities 5,713 — 5,713 4,133 — 4,133

Municipal debt securities 4,520 — 4,520 10,299 — 10,299

Total cash equivalents 84,679 42,833 41,846 160,150 41,494 118,656

10 unchanged sentences

Total financial instruments $ 750,461 $ 42,833 $ 707,628 $ 707,109 $ 41,494 $ 665,615

There were no significant transfers between Level 1 and Level 2 assets for the years ended December 31, 2024 or 2023.

There were no significant transfers between Level 1 and Level 2 assets for the years ended December 31, 2025 and 2024.

Long-term Debt

1 unchanged sentence

The Company has determined the estimated fair value of all of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable and, therefore, could be sensitive to changes in inputs.The Company utilizes the discounted cash flow method to estimate the fair value of Level 3 debt.

Carrying value and estimated fair value of long-term debt, including current maturities and without reduction for related costs:

Carrying value and estimated fair value of long-term debt, including current maturities and without reduction for related costs, are as follows:

As of December 31, 2025 As of December 31, 2024

(in thousands) Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Fair Value Level

Non-publicly held debt $ 1,653,737 $ 1,667,275 $ 1,826,921 $ 1,815,351 3

Due to the short term nature, carrying amounts of cash, cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value.

Long-term debt $ 1,413,205 $ 1,424,251 $ 1,653,737 $ 1,667,275 3

Due to the short term nature, carrying amounts of cash, restricted cash, accounts receivable and accounts payable approximate fair value.

Note 10 — Income Taxes

1 unchanged sentence

In accordance with income tax accounting standards, the Company recognizes tax benefits or expenses on the temporary differences between the financial reporting and tax bases of its assets and liabilities.

The entirety of the Company's income before taxes is from its domestic operations.

Substantially all of the Company's income before taxes is from its domestic operations.

Income Tax Provision/(Benefit)

9 unchanged sentences

Total deferred ( 10,509 ) ( 68,289 ) 37,945

Total income tax provision $ ( 68,212 ) $ 41,455 $ 2,460

Federal ( 9,916 ) ( 60,813 ) 36,910

State ( 261 ) ( 7,710 ) 4,341

Foreign — 311 204

Total income tax provision (benefit) $ ( 10,177 ) $ ( 68,212 ) $ 41,455

Income Taxes Paid (Refunded)

Year ended December 31,

(in thousands) 2025 2024 2023

Federal $ ( 15,000 ) $ 8,700 $ 3

State ( 264 ) ( 274 ) 596

Foreign — 312 413

Total $ ( 15,264 ) $ 8,738 $ 1,012

Reconciliation of Effective Tax Rate

1 unchanged sentence

Year ended December 31,

(in thousands) 2024 2023 2022

Income tax expense (benefit) at federal statutory rate $ ( 64,774 ) $ 33,401 $ 1,040

State income taxes, net of federal income tax benefit ( 7,168 ) 3,503 1,189

Foreign income tax expense 311 204 210

2025 2024 2023

(in thousands) Amount Percent Amount Percent Amount Percent

Pre-tax income $ ( 54,874 ) $ ( 308,450 ) $ 159,051

Federal statutory income tax rate ( 11,524 ) 21.0 % ( 64,774 ) 21.0 % 33,401 21.0 %

Domestic federal

Research credits — — % ( 459 ) 0.1 % ( 1,652 ) ( 1.0 ) %

Other ( 117 ) 0.2 % ( 501 ) 0.2 % ( 90 ) ( 0.1 ) %

Nontaxable and nondeductible items

Executive compensation 542 ( 1.0 ) % 2,707 ( 0.9 ) % 3,395 2.1 %

Federal tax credits ( 1,135 ) ( 2,034 ) ( 1,103 )

Stock compensation 2,212 1,936 1,016

Share based compensation 665 ( 1.2 ) % 2,500 ( 0.8 ) % 1,732 1.1 %

Other 633 ( 1.2 ) % 569 ( 0.2 ) % 666 0.4 %

Total income tax expense (benefit) $ ( 68,212 ) $ 41,455 $ 2,460

Other adjustments 265 ( 0.5 ) % ( 1,366 ) 0.4 % 38 — %

Domestic state and local income taxes, net of federal effect (1)

( 519 ) 0.9 % ( 7,168 ) 2.3 % 3,503 2.2 %

Other foreign jurisdictions — — % 311 ( 0.1 ) % 204 0.1 %

Worldwide changes in unrecognized tax benefits ( 122 ) 0.2 % ( 31 ) — % 258 0.2 %

Total $ ( 10,177 ) 18.5 % $ ( 68,212 ) 22.1 % $ 41,455 26.1 %

(1) In 2025, 2024, and 2023, state and local income taxes in Arizona, California, Indiana, Florida, Tennessee, and New York comprise the majority of the domestic state and local income taxes, net of federal effect category.

Deferred Taxes

16 unchanged sentences

Net deferred tax liabilities $ 305,416 $ 315,593

Net Operating Loss and Tax Credit Carryforwards

At December 31, 2024, the Company recognized $ 6.3 million of tax-effected state net operating loss carryforwards.

Under the current law, $ 1.8 million of the state net operating loss carryforward amounts do not expire and the remaining amounts expire between 2025 and 2043.

Net Operating Loss Carryforwards

At December 31, 2025, the Company recognized $ 103.1 million of tax-effected federal net operating loss carryforwards which may be carried forward indefinitely.

Additionally, the Company recognized $ 13.6 million of tax-effected state net operating loss carryforwards.

Under the current law, $ 1.6 million of the state net operating loss carryforward amounts do not expire and the remaining amounts expire in taxable years 2025 through 2044 if unused.

Note 11 — Related Party Transactions

7 unchanged sentences

The 2022 Plan is administered by the compensation committee of the Board of Directors.

In 2025, the Board and stockholders approved an amendment to the 2022 Plan to authorize an additional 1,000,000 shares for issuance under the Plan, which increased restricted-stock capacity by 500,000 shares pursuant to the Plan's fungible ratio.

Employee Stock Purchase Plan

9 unchanged sentences

December 31, 2025

180,437 $ 46.37 $ 7.90

(1) The weighted-average fair value of the discount under the ESPP granted is equal to a percentage discount from the market value of the common stock at the end of each semi-annual purchase period.

15 percent is the maximum allowable discount under the ESPP.

Compensation expense

For the years ended December 31, 2024, 2023 and 2022, the Company recorded compensation expense of $ 24.0 million, $ 31.5 million and $ 16.3 million, respectively, related to stock compensation.

15 percent is the maximum allowable discount under the ESPP and was the discount percentage in effect in each of 2025, 2024 and 2023.

Share-based compensation expense

For the years ended December 31, 2025, 2024 and 2023, the Company recorded expense of $ 14.5 million, $ 24.0 million and $ 31.5 million, respectively, related to share-based compensation, including restricted stock awards, phantom stock awards, and the ESPP.

Forfeiture rates are estimated at the time of grant based on historical actuals for similar grants and are reconciled to actuals over the vesting period.

As of December 31, 2024, no stock options remain outstanding as options previously held by certain of the Company's executive officers have been forfeited or cancelled.

Restricted stock awards

The closing price of the Company's stock on the date of grant is used as the fair value for the issuance of restricted stock.

Most of the Company's unvested restricted stock awards, subject generally to the individual's continued employment or service, vest over a three year period.

Most of the Company's non-vested restricted stock awards, subject generally to the individual's continued employment or service, are subject to a three-year graded vesting schedule.

A summary of the status of non-vested restricted stock grants during the y ears ended December 31, 2025, 2024 and 2023 is presented below:

1 unchanged sentence

Non-vested at December 31, 2022

429,868 $ 109.33

Granted 567,004 93.57

2 unchanged sentences

Non-vested at December 31, 2023

607,393 $ 94.64

Granted 223,825 51.12

2 unchanged sentences

Non-vested at December 31, 2024

364,734 $ 70.73

Granted 7,672 65.45

2 unchanged sentences

Non-vested at December 31, 2025

171,241 $ 67.61

The total grant date fair value of restricted stock that vested during the years ended December 31, 2025, 2024 and 2023 was $ 12.8 million, $ 29.6 million and $ 28.3 million, respectively.

1 unchanged sentence

Phantom stock awards

During 2024, the Company granted phantom stock awards ("PSAs") to certain employees.

In 2024, the Company granted phantom stock awards ("PSAs") to certain employees.

The value of one PSA share is equal to the value of one share of the Company's common stock, and each grant is subject to a three-year graded vesting schedule.

2 unchanged sentences

A summary of the status of non-vested PSA grants during the y ear ended December 31, 2025, is presented below.

No PSAs have been granted prior to 2024.

No PSAs were granted prior to 2024.

Phantom Stock Awards Weighted Average Fair Value Per Share (1)

4 unchanged sentences

124,309 $ 94.12

Granted — $ —

Vested ( 63,180 ) 46.15

Forfeited ( 12,878 ) 46.15

Non-vested at December 31, 2025

48,251 $ 85.27

(1) Reflects grant date fair value, except for awards outstanding at December 31, which reflects fair value at that date.

6 unchanged sentences

The Company's contractual purchase commitments consist primarily of aircraft and engine acquisitions.

The total future commitments are as follows:

The total future commitments are as follows, based on contractual terms in place at December 31, 2025:

(in thousands) As of December 31, 2025

9 unchanged sentences

Flight Dispatchers 1.2

As of December 31, 2024, the Company employed approximately 6,700 full-time equivalent employees, 20.5 percent of whom (the pilots) are covered by collective bargaining agreements that are currently amendable and are i n negotiation.

As of December 31, 2025, the Company employed approximately 5,620 full-time equivalent employees, 23.6 percent of whom (the pilots) are covered by collective bargaining agreements that are currently amendable and are in negotiation.

See Item I - Business , for further discussion on the status of each group which has elected union representation.

The Company's credit card processing agreements provide that no cash reserve ("Reserve") is required, and no withholding of payment related to receivables collected will occur, except in certain circumstances, including when a required level of liquidity is not maintained.

To date, the Company has always satisfied the required level of liquidity.

In circumstances in which the credit card processor can establish a Reserve or withhold payments, the amount of the Reserve or payments that may be withheld would be up to the potential liability of the credit card processor for tickets purchased with credit cards, as applicable, that had not yet been used for travel.

The Company did not have a Reserve or any amount withheld as of December 31, 2025 or 2024.

The Company is party to aircraft and other financial transactions that include provisions that require payments to preserve an economic return to the lenders if that economic return is diminished due to specified changes in law or regulations.

In some of these financing transactions, the Company would also bear the risk of changes in tax laws that would subject payments to non-U.S.

lenders to withholding taxes.

The Company cannot reasonably estimate potential future payments under these provisions as it cannot predict when and under what circumstances these provisions may be triggered.

The Company is subject to certain other legal and administrative actions it considers routine to its business activities.

2 unchanged sentences

Operating segments are components of a company for which separate financial and operating information is regularly evaluated and reported to the Chief Operating Decision Maker ("CODM"), and is used to allocate resources and analyze performance.

The Company's CODM is the President and CEO, who assesses segment performance and makes resource allocation decisions using information about each operating segment's operating income and pretax income.

The CODM reviews separate financial information and makes resource allocation decisions for the Company's two operating segments:

The Company's CODM is the CEO, who assesses segment performance and makes resource allocation decisions using information about each operating segment's operating income and pretax income.

During 2025, the CODM reviewed separate financial information and made resource allocation decisions for the Company's two operating segments:

Airline and Sunseeker Resort.

Subsequent to the sale of Sunseeker Resort in September 2025, the Company is managed as a single Airline operating segment.

Airline Segment

3 unchanged sentences

Sunseeker Resort Segment

The Sunseeker Resort segment operates as a single business unit and includes hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, the Aileron Golf Course and other Resort amenities.

The Company's consolidated financial statements include the operating results of Sunseeker Resort through the completion of the sale of the Resort's assets on September 4, 2025.

The Sunseeker Resort segment was operated as a single business unit and included hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, Aileron Golf Course and other Resort amenities.

Segment profit or loss, revenues, significant segment expenses, and other required financial information for each of the Company's operating segments are set forth below:

45 unchanged sentences

Other non-operating expense (2)

1,428 — 1,428

INCOME (LOSS) BEFORE INCOME TAXES $ 94,258 $ ( 402,708 ) $ ( 308,450 )

26 unchanged sentences

(1) Other operating expenses in the Airline segment consist of insurance, crew training and travel, legal expense, gains and losses on the sale of flight equipment, and other general and administrative expenses.

Other operating expenses in the Sunseeker segment consist of food and beverage cost of goods sold, contract labor, property tax, insurance, and other general and administrative expense.

(2) Other non-operating expenses in the Airline segment consist primarily of a loss on the sale in 2024 of a cost-method investment that arose from the contribution of intellectual property rights to a private company and realized income from equity method investments.

Note 15 — Impairment

During the year ended December 31, 2024, Sunseeker Resort, along with the associated Aileron Golf Course and related assets, which consist primarily of land, buildings, and other furniture, fixtures, and equipment, incurred both an operating loss and a cash flow deficit, prompting multiple downward revisions to forecasts projecting continuing losses.

Consequently, the Company engaged an advisor to conduct a strategic review of the Resort with the aim of enhancing financial performance and ultimately facilitating a sale.

In fourth quarter 2024, the Company began to solicit proposals for the sale of the Resort or a majority interest in it.

As a result, it is more likely than not that the Resort or a majority interest in it will be sold before the end of its previously estimated useful life.

These circumstances constituted a triggering event, necessitating an impairment test for the long-lived assets.

In accordance with ASC 360, "Property, Plant, and Equipment," the Company performed an undiscounted cash flow test and concluded that the carrying value of the long-lived assets was not recoverable.

The estimated fair value of the assets was determined using a discounted cash flow model.

The determination of fair value involved significant assumptions and estimates, including the discount rate, projected hotel revenue growth rates, and the terminal capitalization rate.

Consequently, an impairment loss of $ 321.8 million was recorded at the end of fourth quarter 2024 to reflect the difference between the carrying values of these assets and their fair values.

The impairment loss is included in special charges in the consolidated statement of income for the year ended December 31, 2024.

Note 16 — Subsequent Events

In January 2025, the Company drew down $ 50.0 million from one of its existing revolving credit facilities.

Amounts borrowed under this facility bear interest at a floating rate based on the Secured Overnight Financing Rate ("SOFR").

The facility matures in March 2026.

In January and February 2025, the Company drew down $ 131.0 million on existing aircraft financing commitments.

The facilities bear interest at a floating rate based on the SOFR and are payable in monthly installments through January and February 2037.

In February 2025, the Company repaid $ 61.0 million on an existing unsecured credit facility.

In February 2025, the Company repaid the full remaining balance of $ 100.0 million on the Sunseeker construction loan.

The original loan, secured by the Resort and bearing interest at 5.75 percent per annum, was scheduled to mature in October 2028, with semi-annual principal payments of $ 26.0 million beginning in 2025.

Other operating expenses in the Sunseeker segment consist of food and beverage cost of goods sold, contract labor, property tax, insurance, and other general and administrative expenses.

Note 15 — Impairment & Sale of Sunseeker Resort

In fourth quarter 2024, the Company engaged an advisor to conduct a strategic review of the Resort with the aim of enhancing financial performance and ultimately facilitating a sale of the Resort.

These circumstances constituted a triggering event, necessitating an impairment test which consequently resulted in an impairment loss of $ 321.8 million that was recorded and included in special charges at the end of fourth quarter 2024.

Through a competitive bidding process, the Company received multiple offers for the sale of the Resort.

In June 2025, the Company's board of directors approved a plan for the sale of the Resort and management determined that all of the held-for-sale accounting requirements were met.

On July 3, 2025, the Company and its Sunseeker subsidiaries entered into an Agreement of Purchase and Sale with a third-party buyer for the sale of substantially all of the Resort's assets, including the Aileron Golf Course and related property, for a sale price of $ 200.0 million, subject to various adjustments.

Upon meeting the held-for-sale criteria in second quarter 2025, the Resort disposal group was measured at its fair value less costs to sell, resulting in a $ 100.4 million write-down charge included in special charges during the three months ended June 30, 2025.

Upon classification as held for sale, the Company ceased recording depreciation and amortization expense for long-lived assets of the disposal group.

On September 4, 2025, the Company completed the sale of the Resort and received cash proceeds of $ 189.9 million after various closing adjustments.

There were $ 2.1 million of closing adjustments recorded as an offset to special charges, which partially offset the second quarter 2025 write down charge.

For the year ended December 31, 2025, total special charges related to the Resort sale were $ 98.3 million.

All assets and liabilities associated with Sunseeker Resort were derecognized from the Company's balance sheet as of September 4, 2025.

Note 16 — Proposed Acquisition of Sun Country Airlines Holdings, Inc.

On January 11, 2026, the Company announced the proposed acquisition of Sun Country Airlines Holdings, Inc.

(“Sun Country”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”).

Pursuant to the Merger Agreement, each existing share of Sun Country common stock will be converted into the right to receive (i) $ 4.10 in cash, without interest and (ii) 0.1557 shares of the Company's common stock.

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2026, subject to satisfaction of customary closing conditions, including each company’s receipt of certain shareholder approvals and regulatory reviews and approvals.

To date, the financial impacts of the pending acquisition have not been material, and future financial impacts are not yet estimable.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data