Allegiant Travel CO

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 —Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Allegiant Travel Company (the “Company”) and its majority-owned operating subsidiaries. The Company's investments in unconsolidated affiliates, which are 50 percent or less owned, are accounted for under the equity or cost method, and are insignificant to the consolidated financial statements. All intercompany balances and transactions have been eliminated.

These unaudited consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto included in the annual report of the Company on Form 10-K for the year ended December 31, 2024 and filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

The Company has reclassified certain prior period amounts to conform to the current period presentation.

Note 2 —Special Charges

Sunseeker Resort

In second quarter 2025, the Company recorded special charges of $102.2 million related to the pending sale of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") and the associated Aileron Golf Course, consisting of a write-down charge of $100.4 million and $1.8 million for accrual of retention pay for certain key employees. The sale of Sunseeker Resort was completed on September 4, 2025, and the Company recorded an additional $2.9 million of special charges related to costs and other adjustments associated with the sale.

Sunseeker Resort was damaged by weather events occurring between 2022 and 2024. The Company considers these events unusual and has 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 does not expect future recoveries, if any, will be significant.

Airline

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 February 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 three and nine months ended September 30, 2025 and 2024.

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, termination of certain marketing agreements and abandonment of certain IT assets no longer being used.

Special Charges Table

The table below summarizes special charges recorded during the three and nine months ended September 30, 2025, and 2024.

Note 3 —Revenue Recognition

Passenger Revenue

Passenger revenue is the most significant category in the Company's reported operating revenues, as outlined below:

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when transportation is provided. As of September 30, 2025, the air traffic liability balance was $388.3 million, of which approximately $347.1 million was related to forward bookings, with the remaining $41.2 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. Of the $370.9 million that was recorded in the air traffic liability balance as of December 31, 2024, substantially all was recognized into passenger revenue during the nine months ended September 30, 2025.

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 primarily 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, the Company has a performance obligation to cardholders with future travel award redemptions at the airline. Therefore, consideration received related to the travel component is deferred based on its relative selling price and is recognized into passenger revenue when the points are redeemed and the underlying service is provided. Similarly, in relation to the Allways Rewards loyalty program, points earned through the program are deferred based on the stand-alone selling price and recognized into passenger revenue when the points are redeemed and the underlying service is provided.

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

(1) Points are combined in one homogenous 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.

Resort Revenue

The Company's resort revenues for the three and nine months ended September 30, 2025 are set forth in the table below:

Revenue from banquets, golf, retail, and spa services is included in other resort revenue. Resort revenue is recognized as the underlying services or goods are provided, with minimal timing differences between service delivery and payment. Following the September 4, 2025 sale of Sunseeker Resort, there are no advanced deposit liabilities or guest receivables in the Company’s September 30, 2025 balance sheet.

Note 4 —Property and Equipment

The following table summarizes the Company's property and equipment as of the dates indicated:

(1)On September 4, 2025, the Company completed the sale of Sunseeker Resort and related Aileron Golf Course (Note 11).

As of September 30, 2025, the Company had firm commitments to purchase 34 aircraft.

Note 5 —Long-Term Debt

The following table summarizes the Company's long-term debt and finance lease obligations, net of related costs, as of the dates indicated:

Maturities of long term debt as of September 30, 2025, for the next five years and thereafter, in the aggregate, are:

Debt Secured by Aircraft and Other Assets

In March 2024, the Company entered into credit agreements under which it was entitled to borrow up to $218.5 million, and which was to be collateralized by new aircraft upon delivery. During the nine months ended September 30, 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 nine months ended September 30, 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 onthree-month SOFR and consists oftwo tranches maturing inseven andtwelve years.

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 three months ended September 30, 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 onthree-month SOFR and matures twelve years from the drawing date.

During the nine months ended September 30, 2025, the Company fully repaid several facilities secured by aircraft and other assets ahead of their originally scheduled maturity dates. The repayments totaled $102.2 million and were originally scheduled to mature between October 2025 and May 2028.

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 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 nine months ended September 30, 2025, the Company fully repaid the $132.6 million outstanding principal balance. As of September 30, 2025, the facility had undrawn borrowing capacity of $25.1 million.

Senior Secured Debt

During third quarter 2025, the Company completed open market repurchases of a total of $25.3 million of the principal amount of its 7.250% Senior Secured Notes due 2027 (the "Notes") at an aggregate purchase price of $25.7 million.

On September 15, 2025, the Company issued a notice of partial redemption for $120.0 million of the principal amount of the Notes. The redemption was completed on October 15, 2025, at a redemption price equal to 101.8125 percent of the principal amount, plus accrued interest.

The Company classifies debt as current maturities of long-term debt when it has a contractual obligation to repay the debt withinone year and intends to repay the debt using current assets (e.g. cash). As a result of the call notice and scheduled redemption, $120.0 million of the Notes were classified as current maturities of long-term debt in the Company's September 30, 2025 balance sheet.

Construction Loan Agreement

In October 2021, the Company, through a wholly-owned subsidiary, entered into a credit agreement and borrowed $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.

Revolving Credit Facility

In March 2021, the Company entered into a revolving credit facility, which, as amended to date, entitled it to borrow up to $100.0 million. In April 2025, the agreement was amended to extend the maturity date to April 2028. The borrowing ability under the facility is based on the value of the aircraft and engines placed into the collateral pool. Amounts drawn under the facility will bear interest at a floating rate based on SOFR. As of September 30, 2025, the facility remained undrawn.

Unsecured Debt

In December 2024, the Company entered into an unsecured credit facility and received proceeds of $130.5 million. The loan matured upon delivery of certain aircraft and was to be repaid using the proceeds from financing associated with those aircraft. During the nine months ended September 30, 2025, the Company repaid the entirety of the $130.5 million outstanding under the facility as the associated aircraft delivered.

Undrawn Revolving Credit and Other Facilities

In aggregate, at September 30, 2025, the Company had $175.0 million available under its revolving credit facilities and $25.1 million available in undrawn aircraft and pre-delivery deposit financing commitments. These amounts include undrawn amounts referenced above.

Note 6 —Income Taxes

The Company recorded an $8.6 million income tax benefit at a 16.5 percent effective tax rate and a $6.7 million income tax benefit at a 15.3 percent effective tax rate for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences.

The Company recorded a $22.1 million income tax benefit at an effective tax rate of 22.4 percent and a $2.7 million income tax benefit at a 10.3 percent effective tax rate for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate for the nine months ended September 30, 2025 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes, the impact of permanent tax differences and discrete items. The discrete items primarily relate to the Sunseeker write down.

Note 7 —Fair Value Measurements

The Company utilizes the market approach to measure the fair value of its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The assets classified as Level 2 primarily utilize quoted market prices or alternative pricing sources including transactions involving identical or comparable assets and models utilizing market observable inputs for valuation of these securities. No changes in valuation techniques or inputs occurred during the nine months ended September 30, 2025.

Financial instruments measured at fair value on a recurring basis:

None of the Company's long-term debt is publicly traded. The Company has determined the estimated fair value of all 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, are as follows:

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

Note 8 —Earnings per Share

Basic and diluted earnings per share are computed pursuant to the two-class method. Under this method, the Company attributes net income to two classes: common stock and unvested restricted stock. Unvested restricted stock awards granted to employees under the Company’s Long-Term Incentive Plan are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock.

Diluted net income per share is calculated using the more dilutive of the two methods. Under both methods, the exercise of employee stock options is assumed using the treasury stock method. The assumption of vesting of restricted stock, however, differs:

1. Assume vesting of restricted stock using the treasury stock method.

2. Assume unvested restricted stock awards are not vested, and allocate earnings to common shares and unvested restricted stock awards using the two-class method.

The following table sets forth the computation of net income per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in the table are in thousands):

Note 9 —Contingencies

The Company is subject to certain legal and administrative actions it considers routine to its business activities. The Company believes the ultimate outcome of any potential and pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity or results of operations.

Note 10 —Segments

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

Until the completion of the sale of Sunseeker Resort, Aileron Golf Course, and related assets in September 2025, the CODM reviewed separate financial information and made resource allocation decisions for the Company'stwo operating segments: Airline and Sunseeker Resort. Subsequent to the sale of Sunseeker Resort, the Company is managed as a single Airline operating segment.

Airline Segment

The Airline segment operates as a single business unit and includes all scheduled service air transportation, ancillary air-related products and services, third party products and services, fixed fee contract air transportation and other airline-related revenue. Scheduled service and fixed fee air transportation services have similar operating margins, economic characteristics and production processes (check-in, baggage handling and flight services) which target the same class of customers and are subject to the same regulatory environment. As a result, the Company believes its airline activities operate underone reportable segment and does not separately track expenses for scheduled service and fixed fee air transportation services.

Sunseeker Resort Segment

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:

(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 expenses.

Total assets were as follows as of the dates indicated: