Frontier Group Holdings, Inc.

Previous wording

These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among others. We continue to monitor the situation.

Current wording

Macroeconomic Conditions. The Trump Administration is in the process of expanding the scope of tariffs, which has significantly increased the rates on goods imported into the United States. In response, foreign governments have imposed, and are expected to impose, retaliatory measures against the United States. These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among other impacts.

Previous wording

Labor. We are currently in negotiations with the unions which represent our pilots, flight attendants, material specialist and maintenance controllers regarding their next labor contracts. Additionally, a new five-year contract with our aircraft appearance agents became effective as of July 11, 2025. Please refer to “Notes to Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” for additional information.

Current wording

Labor. We are currently in negotiations with the unions which represent our pilots, flight attendants, material specialists, aircraft technicians and maintenance controllers regarding their next labor contracts. Please refer to “Notes to Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” for additional information.

Previous wording

The following table provides select financial and operational information for the three and six months ended June 30, 2025 and 2024, respectively (in millions, except for per share data):

Current wording

The following table provides select financial and operational information for the three and nine months ended September 30, 2025 and 2024 (in millions, except for per share data):

Previous wording

Total operating revenues for the three months ended June 30, 2025 totaled $929 million, a decrease of 5% compared to the three months ended June 30, 2024. This was primarily due to a 2% moderation in capacity, as measured by ASMs, as part of strategic initiatives to stabilize pricing, and a 2% decrease in revenue per available seat mile (“RASM”) for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The RASM decrease was driven by a 5% higher average stage length supported by 9% fewer departures, which also contributed to the 4% decrease in passenger enplanements, partly offset by the 1.2-point increase in load factor on a higher capacity fleet mix as compared to the corresponding prior year period.

Current wording

Total operating revenues for the three months ended September 30, 2025 totaled $886 million, a decrease of 5% compared to the three months ended September 30, 2024. This was primarily due to a 4% moderation in capacity, as measured by ASMs, as part of our disciplined capacity deployment, and a 2% decrease in revenue per available seat mile (“RASM”) for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The RASM decrease was driven by a 7% higher average stage length supported by 12% fewer departures, which also contributed to the 6% decrease in passenger enplanements, partly offset by the 2.7-point increase in load factor and 1% increase in total revenue per passenger, as compared to the corresponding prior year period.

Previous wording

Total operating expenses during the three months ended June 30, 2025 increased to $1,004 million, resulting in a cost per available seat mile (“CASM”) of 9.73¢, an increase of 8%, as compared to the three months ended June 30, 2024. Fuel expense for the three months ended June 30, 2025 was $58 million lower than the corresponding prior year period. The 20% decrease in fuel expense for the three months ended June 30, 2025 was primarily driven by the 17% decrease in fuel cost per gallon, as well as the 4% decrease in fuel gallons consumed, as a result of our 2% capacity reduction.

Current wording

Total operating expenses during the three months ended September 30, 2025 increased to $963 million, resulting in a cost per available seat mile (“CASM”) of 9.95¢, an increase of 9%, as compared to the three months ended September 30, 2024. Fuel expense for the three months ended September 30, 2025 was $27 million lower than the corresponding prior year period. The 10% decrease in fuel expense for the three months ended September 30, 2025 was primarily driven by the 6% decrease in fuel gallons consumed as a result of our 4% capacity reduction, as well as the 5% decrease in fuel cost per gallon.

Previous wording

Our non-fuel expenses increased by 17% during the three months ended June 30, 2025, as compared to the corresponding prior year period, driven primarily by increased aircraft rent due to a larger fleet size and higher lease return costs, decreased sale-leaseback transactions, and increased station costs due to station mix and rate inflation, partly offset by decreased operations from fewer passengers and departures. CASM (excluding fuel), a non-GAAP measure, increased 20% to 7.50¢, on a 2% decrease in capacity for the three months ended June 30, 2025, as compared to the corresponding prior year period based on the aforementioned factors.

Current wording

Our non-fuel expenses increased by 11% during the three months ended September 30, 2025, as compared to the corresponding prior year period, driven primarily by the benefit from a legal settlement in the prior period, higher employee benefit and incentive costs, and increased station costs due to station mix and rate inflation, partly offset by decreased operations from fewer departures and passengers. CASM (excluding fuel), a non-GAAP measure, increased 16% to 7.53¢, on a 4% decrease in capacity for the three months ended September 30, 2025, as compared to the corresponding prior year period based on the aforementioned factors.

Previous wording

Total operating expenses during the six months ended June 30, 2025 increased to $1,962 million, resulting in a CASM of 9.68¢, an increase of 5% compared to the six months ended June 30, 2024. Fuel expense for the six months ended June 30, 2025 was $83 million lower than the corresponding prior year period. The 15% decrease in fuel expense for the six months ended June 30, 2025 was primarily driven by the 15% decrease in fuel cost per gallon while consumption held flat.

Current wording

Total operating expenses during the nine months ended September 30, 2025 increased to $2,925 million, resulting in a CASM of 9.77¢, an increase of 6% compared to the nine months ended September 30, 2024. Fuel expense for the nine months ended September 30, 2025 was $110 million lower than the corresponding prior year period. The 14% decrease in fuel expense for the nine months ended September 30, 2025 was driven by the 12% decrease in fuel cost per gallon and a 2% decrease in fuel gallons consumed.

Previous wording

Our non-fuel expenses increased 16% during the six months ended June 30, 2025, as compared to the corresponding prior year period, driven primarily by a decrease in sale-leaseback transactions, increased station operations due to station mix and rate inflation and increased aircraft rent due to a larger fleet, partly offset by lower lease return costs during the same period. CASM (excluding fuel), a non-GAAP measure, increased 14% to 7.37¢, on a 1% increase in capacity for the six months ended June 30, 2025, as compared to the corresponding prior year based on the aforementioned factors.

Current wording

Our non-fuel expenses increased 14% during the nine months ended September 30, 2025, as compared to the corresponding prior year period, driven primarily by increased aircraft rent due to a larger fleet, increased station costs due to station mix and rate inflation, a decrease in sale-leaseback transactions, increased employee costs, as well as the benefit from a legal settlement in the prior period, partly offset by lower lease return costs during the same period. CASM (excluding fuel), a non-GAAP measure, increased 15% to 7.42¢, while capacity remained consistent for the nine months ended September 30, 2025, as compared to the corresponding prior year based on the aforementioned factors.

Previous wording

We generated a net loss of $70 million during the three months ended June 30, 2025, compared to net income of $31 million for the three months ended June 30, 2024. There were no non-GAAP adjustments for each of the three months ended June 30, 2025 and 2024.

Current wording

We generated a net loss of $77 million during the three months ended September 30, 2025, compared to net income of $26 million for the three months ended September 30, 2024. There were no non-GAAP adjustments for the three months ended September 30, 2025. Considering the aforementioned non-GAAP adjustments, as well as the write-off of $1 million in unamortized deferred financing costs, our adjusted net loss, a non-GAAP measure, was $11 million for the three months ended September 30, 2024.

Previous wording

We generated a net loss of $113 million during the six months ended June 30, 2025, compared to net income of $5 million for the six months ended June 30, 2024. There were no non-GAAP adjustments during the six months ended June 30, 2025. For the six months ended June 30, 2024, our adjusted net income, a non-GAAP measure, was $10 million, due to the $5 million valuation allowance.

Current wording

We generated a net loss of $190 million during the nine months ended September 30, 2025, compared to net income of $31 million for the nine months ended September 30, 2024. There were no non-GAAP adjustments for the nine months ended September 30, 2025. Considering the aforementioned non-GAAP adjustments, as well as the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs, our adjusted net loss, a non-GAAP measure, was $1 million for the nine months ended September 30, 2024.

Previous wording

For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Results of Operations — Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” and “Results of Operations — Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR”.

Current wording

For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Results of Operations — Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” and “Results of Operations — Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR.”

Previous wording

As of June 30, 2025, our total available liquidity was $766 million, made up of unrestricted cash and cash equivalents, including $205 million of funds available to be drawn under our revolving line of credit available for general corporate purposes (the “Revolving Loan Facility”).

Current wording

As of September 30, 2025, our total available liquidity was $691 million, consisting of $561 million of unrestricted cash and cash equivalents and availability under our revolving line of credit (the “Revolving Loan Facility”).

Previous wording

Total operating revenue decreased $44 million, or 5%, during the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Capacity, as measured by ASMs, and RASM each decreased 2%, with the decrease in RASM driven by a 5% higher average stage length supported by 9% fewer departures, which also contributed to the 4% decrease in passenger enplanements, partly offset by the 1.2-point increase in load factor with total revenue per passenger remaining flat, as compared to the corresponding period. Strategic initiatives to stabilize pricing resulted in a moderation of capacity, which was driven by a 13% decrease in average daily aircraft utilization during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, partly offset by the 12% increase in average aircraft in service.

Current wording

Total operating revenue decreased $49 million, or 5%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily driven by 4% lower capacity, as measured by ASMs, and a 2% decrease to RASM. Strategic initiatives to stabilize pricing resulted in a moderation of capacity, which was driven by a 15% decrease in average daily aircraft utilization during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, partially offset by the 9% increase in average aircraft in service. The decrease in RASM was driven by 7% higher average stage length, supported by 12% fewer departures, partially offset by the 2.7-point increase in load factor and a 1% increase in total revenue per passenger, as compared to the corresponding prior year period.

Previous wording

Aircraft Fuel. Aircraft fuel expense decreased by $58 million, or 20%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was primarily due to the 17% decrease in fuel cost per gallon, as well as the 4% decrease in fuel gallons consumed, driven by lower capacity.

Current wording

Aircraft Fuel. Aircraft fuel expense decreased by $27 million, or 10%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to the 6% decrease in fuel gallons consumed, driven by lower capacity, as well as a 5% decrease in fuel cost per gallon.

Previous wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $10 million, or 4%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to higher employee benefit costs as compared to the corresponding prior year period.

Current wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $15 million, or 6%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was primarily due to higher employee benefit and incentive costs, as compared to the corresponding prior year period.

Previous wording

Aircraft Rent. Aircraft rent expense increased by $49 million, or 16%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Current wording

Aircraft Rent. Aircraft rent expense increased by $4 million, or 2%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Previous wording

Station Operations. Station operations expense increased by $15 million, or 9%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to an increase in station mix and rate inflation, offset by a 4% decrease in passengers and 9% decrease in departures.

Current wording

Station Operations. Station operations expense increased by $9 million, or 5%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to an increase in station mix and rate inflation, partially offset by a 6% decrease in passengers and 12% decrease in departures.

Previous wording

Sales and Marketing. Sales and marketing expense decreased by $8 million, or 17%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to the decrease in third-party distribution channel fees, media advertising and credit card fees as a result of a 5% decrease in revenue. The following table presents our distribution channel mix:

Current wording

Sales and Marketing. Sales and marketing expense decreased by $8 million or 17%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a decrease in third-party distribution channel fees and a decrease in call center operation fees. The following table presents our distribution channel mix:

Previous wording

Depreciation and Amortization. Depreciation and amortization expense increased by $3 million, or 17%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased by $5 million, or 26%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to an increase in capital maintenance depreciation driven by our growing fleet.

Previous wording

Other Operating. Other operating resulted in an expense of $41 million during the three months ended June 30, 2025, compared to a net gain of $1 million during the three months ended June 30, 2024. This movement was primarily driven by a decrease in sale-leaseback gains, as a result of three aircraft inductions subject to sale-leaseback transactions in the current period, compared to six aircraft inductions and two engine inductions subject to sale-leaseback transactions in the corresponding prior year period.

Current wording

Other Operating. Other operating resulted in an expense of $10 million during the three months ended September 30, 2025, compared to a net gain of $40 million during the three months ended September 30, 2024. This movement was primarily driven by a legal settlement gain of $40 million in the corresponding prior year period.

Previous wording

Other Income (Expense). Other income decreased by $2 million, or 29%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was primarily due to increased interest expense and lower interest income from lower balances in interest-bearing cash accounts, driven by higher principal balances on our debt, partially offset by greater capitalized interest.

Current wording

Other Income (Expense). Other income decreased by $7 million, or 88%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower balances in interest-bearing cash accounts, partially offset by greater capitalized interest.

Previous wording

Income Taxes. Our effective tax rate for the three months ended June 30, 2025 was 0% on a pre-tax loss, compared to an expense of 3.1% on pre-tax income for the three months ended June 30, 2024. The primary difference between the effective tax rate and the federal statutory rate was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Current wording

Income Taxes. Our effective tax rate for the three months ended September 30, 2025 was an expense of 1.3% on a pre-tax loss, compared to an expense of 3.7% on pre-tax income for the three months ended September 30, 2024. The primary difference between the effective tax rate and the federal statutory rate was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Previous wording

Total operating revenue increased $3 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. While capacity grew by 1%, as measured by ASMs, revenue was unfavorably impacted by the 1% decrease in RASM driven by a 2% decline in total revenue per passenger, partly offset by 1.7-point increase in load factor and a 1% increase in average stage length, as compared to the corresponding prior year period. The increase in capacity was driven by the 12% increase in average aircraft in service during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, offset by an 11% decrease in average daily aircraft utilization for the corresponding prior year period.

Current wording

Total operating revenue decreased $46 million or 2% during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Revenue was unfavorably impacted by the 1% decrease in RASM, driven by 3% higher average stage length, supported by 5% fewer departures, and a 1% decrease in total revenue per passenger, partially offset by the 1.9-point increase in load factor as compared to the corresponding prior year period. Capacity, as measured by ASMs, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, remained consistent due to the 10% increase in average aircraft in service, offset by an 11% decrease in average daily aircraft utilization.

Previous wording

Aircraft Fuel. Aircraft fuel expense decreased by $83 million, or 15%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was primarily due to the 15% decrease in fuel cost per gallon.

Current wording

Aircraft Fuel. Aircraft fuel expense decreased by $110 million, or 14%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to the 12% decrease in fuel cost per gallon, as well as a 2% decrease in fuel gallons consumed.

Previous wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $26 million, or 5%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was due to higher crew costs and higher employee benefit costs, as compared to the corresponding prior year period.

Current wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $41 million, or 6%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was primarily due to higher crew and employee benefit and incentive costs, as compared to the corresponding prior year period.

Previous wording

Aircraft Rent. Aircraft rent expense increased by $47 million, or 32%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to a larger fleet and higher lease return costs in the current period due to aircraft lease extension events and the corresponding benefit that occurred in the comparable three months ended June 30, 2024.

Current wording

Aircraft Rent. Aircraft rent expense increased by $53 million, or 11%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Previous wording

Station Operations. Station operations expense increased by $58 million, or 19%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to station mix and rate inflation as well as increased airport operations.

Current wording

Station Operations. Station operations expense increased by $67 million, or 14%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase in station mix and rate inflation.

Previous wording

Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $5 million, or 12%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. This increase was primarily due to the 12% increase in average aircraft in service, which resulted in higher aircraft repairs and materials costs, partially offset by lower engine repair costs.

Current wording

This increase was primarily due to the 10% increase in average aircraft in service, which resulted in higher aircraft repair and materials costs, partially offset by lower engine repair costs from recognition of vendor credits.

Previous wording

Sales and Marketing. Sales and marketing expense decreased by $7 million, or 8%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to the decrease in distribution channel fees, media advertising and credit card fees. The following table presents our distribution channel mix:

Current wording

Sales and Marketing. Sales and marketing expense decreased by $15 million, or 11%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to the decrease in third-party distribution channel fees, call center operation fees, credit card fees and media advertising. The following table presents our distribution channel mix:

Previous wording

Depreciation and Amortization. Depreciation and amortization expense increased by$7 million, or 21%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to our growing fleet and increased capital maintenance events.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased by$12 million, or 23%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase in capital maintenance depreciation driven by our growing fleet.

Previous wording

Other Operating. Other operating resulted in an expense of $59 million during the six months ended June 30, 2025, compared to a net gain of $2 million during the six months ended June 30, 2024. This movement was primarily driven by the decrease in sale-leaseback gains as a result of seven aircraft inductions and two engine inductions subject to sale-leaseback transactions in the current period, compared to twelve aircraft inductions and two engine inductions subject to sale-leaseback transactions in the corresponding prior year period.

Current wording

Other Operating. Other operating resulted in an expense of $69 million during the nine months ended September 30, 2025, compared to a net gain of $42 million during the nine months ended September 30, 2024. This movement was primarily driven by the decrease in sale-leaseback gains, as a result of 9 aircraft inductions and 8 engine inductions subject to sale-leaseback transactions in the current period, compared to 17 aircraft inductions and 3 engine inductions subject to sale-leaseback transactions in the corresponding prior year period, as well as a legal settlement gain of $40 million during the nine months ended September 30, 2024.

Previous wording

Other Income (Expense). Other income decreased by $3 million, or 21%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, due to increased interest expense driven by higher principal debt balances and lower interest income from lower cash balances in interest-bearing cash accounts.

Current wording

Other Income (Expense). Other income decreased by $10 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower balances in interest-bearing cash accounts, partially offset by greater capitalized interest.

Previous wording

Income Taxes. Our effective tax rate for the six months ended June 30, 2025 was an expense of 2.7%, compared to an expense of 37.5% for the six months ended June 30, 2024, on pre-tax loss and pre-tax income for each of the respective periods. The primary difference between the effective tax rate and the federal statutory rate for the six months ended June 30, 2025 was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Current wording

Income Taxes. Our effective tax rate for the nine months ended September 30, 2025 was an expense of 2.2%, compared to an expense of 11.4% for the nine months ended September 30, 2024, on pre-tax loss and pre-tax income for each of the respective periods. The primary difference between the effective tax rate and the federal statutory rate for the nine months ended September 30, 2025 was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Previous wording

(e)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe these metrics are useful because they remove certain items that may not be indicative of our base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Current wording

(f)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe Adjusted CASM including net interest is useful because it removes certain items that may not be indicative of our base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Previous wording

(e)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe these metrics are useful because they remove certain items that may not be indicative of our base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Current wording

(f)Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, we believe Adjusted CASM including net interest is useful because it removes certain items that may not be indicative of our base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Previous wording

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR

Current wording

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR

Previous wording

(a)Adjusted net income (loss), EBITDA and adjusted EBITDA are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of net income (loss) and EBITDA are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry.

Current wording

(a)Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of pre-tax income (loss), net income (loss) and EBITDA are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry.

Previous wording

Adjusted net income (loss), EBITDA and adjusted EBITDA have limitations as analytical tools. Some of the limitations applicable to these measures include: adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA, and adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness or possible cash requirements related to our warrants; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements; and other companies in our industry may calculate adjusted net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, adjusted net income (loss), EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of adjusted net income (loss), EBITDA and adjusted EBITDA are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of net income (loss) and EBITDA, including adjusted net income (loss) and adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.

Current wording

Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA have limitations as analytical tools. Some of the limitations applicable to these measures include: adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA, and adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness or possible cash requirements related to our warrants; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements; and other companies in our industry may calculate adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of pre-tax income (loss), net income (loss) and EBITDA, including adjusted pre-tax income (loss), adjusted net income (loss) and adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.

Previous wording

For the foregoing reasons, each of adjusted net income (loss), EBITDA and adjusted EBITDA has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.

Current wording

For the foregoing reasons, each of adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.

Previous wording

(a)During the six months ended June 30, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state net operating loss deferred tax assets, which largely do not expire, mainly as a result of being in a three-year historical cumulative pre-tax loss position and due to the loss generated during the three months ended March 31, 2024, which had no impact on cash taxes and is not reflective of our effective tax rate for deductible net operating losses generated or actual cash tax obligations created. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Current wording

(b)During the nine months ended September 30, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state net operating loss deferred tax assets, which largely do not expire, mainly as a result of being in a three-year historical cumulative pre-tax loss position and due to the loss generated during the three months ended March 31, 2024, which has no impact on cash taxes and is not reflective of our effective tax rate for deductible net operating losses generated or actual cash tax obligations created. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.