Frontier Airlines Reports Solid Fourth Quarter 2024 Financial Results on Record Revenue

(unaudited, in millions, except for percentages)

Three Months Ended December 31,

2024

2023

As Reported
(GAAP)

Adjusted

(Non-GAAP)

As Reported
(GAAP)

Adjusted

(Non-GAAP)

Total operating revenues

$           1,002

$           1,002

$              891

$              891

Total operating expenses

$              957

$              957

$              894

$              893

Pre-tax income

$                51

$                51

$                  6

$                  7

Pre-tax income margin

5.1 %

5.1 %

0.7 %

0.8 %

Net income (loss)

$                54

$                54

$              (37)

$                  1

Earnings per share, diluted

$             0.23

$             0.23

$           (0.17)

$                 —

(unaudited, in millions, except for percentages)

Year Ended December 31,

2024

2023

As Reported
(GAAP)

Adjusted

(Non-GAAP)

As Reported
(GAAP)

Adjusted

(Non-GAAP)

Total operating revenues

$           3,775

$           3,775

$           3,589

$           3,589

Total operating expenses

$           3,717

$           3,755

$           3,592

$           3,590

Pre-tax income

$                86

$                49

$                32

$                34

Pre-tax income margin

2.3 %

1.3 %

0.9 %

0.9 %

Net income (loss)

$                85

$                53

$              (11)

$                28

Earnings per share, diluted

$             0.37

$             0.22

$           (0.05)

$             0.12

Equipment

Quantity

Seats

A320ceo

8

180 or 186

A320neo

82

186

A321ceo

21

230

A321neo

48

240

Total fleet

159

First Quarter

Full Year

2025^(a)

2025^(a)

Adjusted (non-GAAP) diluted earnings per share^(b)(c)

breakeven to $0.07

at least $1.00

Pre-delivery deposits, net of refunds ($ millions)

$10 - 45

Other capital expenditures ($ millions)^(d)

$175 - 235

(a)

Includes guidance on certain non-GAAP measures which excludes, among other things, special items. The Company is unable to reconcile these forward-looking projections to GAAP as the nature or amount of such special items cannot be determined at this time.

(b)

Based on the blended jet fuel curve on February 4, 2025, resulting in an average fuel cost (including fuel taxes and into-plane costs) of $2.60 and $2.55 per gallon for the first quarter of 2025 and the full-year 2025, respectively.

(c)

Based on estimated weighted average diluted shares outstanding of 230 million shares in the first quarter 2025 and full-year 2025; the Company's first quarter and full-year 2025 actual tax rate may be impacted by varying factors which may include, but are not limited to, the composition of items of income and expense recognized in the respective periods, including the amount of non-deductible or other similar items, the treatment of deferred tax assets and related valuation allowances.

(d)

Other capital expenditures estimate includes capitalized heavy maintenance.

Consolidated Statements of Operations

(unaudited, in millions, except percentages and share and per share amounts)

Three Months Ended
December 31,

Percent
Change

Year Ended December 31,

Percent
Change

2024

2023

2024

2023

Operating revenues:

Passenger

$             978

$             872

12 %

$          3,683

$          3,509

5 %

Other

24

19

26 %

92

80

15 %

Total operating revenues

1,002

891

12 %

3,775

3,589

5 %

Operating expenses:

Aircraft fuel

229

303

(24) %

1,041

1,130

(8) %

Salaries, wages and benefits

241

223

8 %

954

858

11 %

Aircraft rent

192

125

54 %

675

554

22 %

Station operations

173

135

28 %

637

516

23 %

Maintenance, materials and repairs

65

34

91 %

209

179

17 %

Sales and marketing

45

39

15 %

178

164

9 %

Depreciation and amortization

19

14

36 %

72

50

44 %

Transaction and merger-related costs

—

—

N/M

—

1

N/M

Other operating

(7)

21

N/M

(49)

140

N/M

Total operating expenses

957

894

7 %

3,717

3,592

3 %

Operating income (loss)

45

(3)

N/M

58

(3)

N/M

Other income (expense):

Interest expense

(9)

(8)

13 %

(36)

(29)

24 %

Capitalized interest

8

9

(11) %

32

28

14 %

Interest income and other

7

8

(13) %

32

36

(11) %

Total other income (expense)

6

9

(33) %

28

35

(20) %

Income (loss) before income taxes

51

6

750 %

86

32

169 %

Income tax expense (benefit)

(3)

43

N/M

1

43

(98) %

Net income (loss)

$               54

$            (37)

N/M

$               85

$            (11)

N/M

Earnings (loss) per share:

Basic ^(a)

$            0.24

$         (0.17)

N/M

$            0.37

$         (0.05)

N/M

Diluted ^(a)

$            0.23

$         (0.17)

N/M

$            0.37

$         (0.05)

N/M

Weighted-average common shares outstanding:

Basic ^(a)

225,191,788

221,930,738

1 %

224,333,034

220,097,989

2 %

Diluted ^(a)

227,335,081

221,930,738

2 %

226,492,134

220,097,989

3 %

N/M = Not meaningful

(a)

In periods of net income, the dilutive impact of the 3.1 million warrants outstanding relating to funding provided pursuant to the CARES Act and related legislation, any non-participating options and unvested restricted stock units are included in the diluted earnings per share calculations. In addition, most of the Company's 2.2 million outstanding options are participating securities and are therefore not expected to be part of the Company's diluted share count under the two-class method until they are exercised, but, in periods of net income, are included as an adjustment to the numerator of the Company's earnings per share calculation as they are eligible to participate in the Company's earnings. The participating securities impact has been subtracted from periods presented with positive net income in the computation of basic and diluted earnings per share.

Frontier Group Holdings, Inc.

Selected Operating Statistics

(unaudited)

Three Months Ended
December 31,

Percent
Change

Year Ended December 31,

Percent
Change

2024

2023

2024

2023

Operating statistics ^(a)

Available seat miles (ASMs) (millions)

9,798

10,013

(2) %

39,871

37,822

5 %

Departures

53,807

52,094

3 %

216,374

188,841

15 %

Average stage length (miles)

874

952

(8) %

894

1,007

(11) %

Block hours

134,488

138,311

(3) %

554,399

523,440

6 %

Average aircraft in service

153

134

14 %

146

126

16 %

Aircraft – end of period

159

136

17 %

159

136

17 %

Average daily aircraft utilization (hours)

9.6

11.3

(15) %

10.3

11.3

(9) %

Passengers (thousands)

8,558

8,099

6 %

33,296

30,218

10 %

Average seats per departure

207

201

3 %

205

199

3 %

Revenue passenger miles (RPMs) (millions)

7,668

7,817

(2) %

30,630

30,798

(1) %

Load Factor

78.3 %

78.1 %

    0.2 pts

76.8 %

81.4 %

(4.6) pts

Fare revenue per passenger ($)

48.40

38.44

26 %

43.09

42.26

2 %

Non-fare passenger revenue per passenger ($)

65.81

69.16

(5) %

67.50

73.85

(9) %

Other revenue per passenger ($)

2.96

2.45

21 %

2.79

2.66

5 %

Total ancillary revenue passenger ($)

68.77

71.61

(4) %

70.29

76.51

(8) %

Total revenue per passenger ($)

117.17

110.05

6 %

113.38

118.77

(5) %

Total revenue per available seat mile (RASM) (¢)

10.23

8.90

15 %

9.47

9.49

— %

Cost per available seat mile (CASM) (¢)

9.78

8.93

10 %

9.32

9.50

(2) %

CASM (excluding fuel) (¢)^(b)

7.44

5.91

26 %

6.71

6.51

3 %

CASM + net interest (¢)^(b)

9.71

8.85

10 %

9.25

9.40

(2) %

Adjusted CASM (¢)^(b)

9.78

8.92

10 %

9.42

9.49

(1) %

Adjusted CASM (excluding fuel) (¢)^(b)

7.44

5.90

26 %

6.81

6.50

5 %

Adjusted CASM (excluding fuel), SLA 1,000 (¢)^(b)(c)

6.95

5.76

21 %

6.44

6.52

(1) %

Adjusted CASM + net interest (¢)^(b)

9.71

8.84

10 %

9.35

9.40

(1) %

Adjusted CASM + net interest, SLA 1,000 (¢)^(b)(d)

9.08

8.63

5 %

8.84

9.43

(6) %

Fuel cost per gallon ($)

2.48

3.18

(22) %

2.73

3.10

(12) %

Fuel gallons consumed (thousands)

92,330

95,181

(3) %

381,444

364,606

5 %

Full-time equivalent employees

7,913

7,214

10 %

7,913

7,214

10 %

(a)

Figures may not recalculate due to rounding

(b)

These metrics are not calculated in accordance with GAAP. For the reconciliation to corresponding GAAP measures, see "Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest."

(c)

Stage Length Adjusted (SLA) to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000)

(d)

Stage Length Adjusted (SLA) to 1,000 miles: Adjusted CASM + net interest * Square root (stage length / 1,000)

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

($ in millions) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Net income (loss), as reported

$                      54

$                    (37)

$                      85

$                    (11)

Non-GAAP Adjustments:

Legal settlement^(a)

—

—

(38)

—

Transaction and merger-related costs^(b)

—

—

—

1

Other operating costs - legal fees^(c)

—

1

—

1

Write-off of deferred financing costs^(d)

—

—

1

—

Pre-tax impact

—

1

(37)

2

Tax benefit (expense), related to non-GAAP adjustments

—

—

—

—

Valuation allowance^(e)

—

37

5

37

Net income (loss) impact

—

38

(32)

39

Adjusted net income (loss)^(f)

$                      54

$                        1

$                      53

$                      28

Income (loss) before income taxes, as reported

$                      51

$                        6

$                      86

$                      32

Pre-tax impact

—

1

(37)

2

Adjusted pre-tax income (loss)^(f)

$                      51

$                        7

$                      49

$                      34

(a)

During 2024, the Company reached a legal settlement with a former lessor for breach of contract for a total of $40 million. $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.

(b)

Represents $1 million in employee retention costs incurred in connection with the terminated merger with Spirit Airlines, Inc. ("Spirit") in 2023.

(c)

Represents $1 million of legal fees incurred due to the U.S. Department of Justice's requests for information and deposition testimony from the Company related to the contemplated merger of Spirit and JetBlue Airways in 2023.

(d)

During 2024, the Company reduced its existing capacity of the pre-delivery deposit financing facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within the consolidated statements of operations.

(e)

During 2024, a $5 million non-cash valuation allowance was recorded against the Company's 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 the Company's effective tax rate for deductible net operating losses generated or actual cash tax obligations created. During 2023, the Company recorded a $37 million non-cash valuation allowance against its U.S. federal and state net operating loss deferred tax assets, which largely don't expire, mainly as a result of being in a three-year cumulative pre-tax loss position, which has no impact on cash taxes and is not reflective of the Company's effective tax rate for deductible net operating losses generated or actual cash tax obligations created.

(f)

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

Adjusted net income (loss) and adjusted pre-tax income (loss) have limitations as analytical tools. Adjusted net income (loss) and adjusted pre-tax income (loss) do not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of the Company's ongoing operations and do not reflect the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments, and other companies in the industry may calculate adjusted net income (loss) and adjusted pre-tax income (loss) differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, adjusted net income (loss) and adjusted pre-tax income (loss) 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) and adjusted pre-tax income (loss), including adjusted pre-tax margin, 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, including adjusted net income (loss) and adjusted pre-tax income (loss), as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, adjusted net income (loss) and adjusted pre-tax income (loss) have significant limitations which affect their use as indicators of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information.

Reconciliation of Total Operating Expenses to Total Operating Expenses (excluding fuel), Adjusted Total Operating Expenses and Adjusted Total Operating Expenses (excluding fuel)

($ in millions) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Total operating expenses, as reported^(a)

$                    957

$                    894

$                 3,717

$                 3,592

Legal settlement

—

—

38

—

Transaction and merger-related costs

—

—

—

(1)

Other operating costs - legal fees

—

(1)

—

(1)

Adjusted total operating expenses^(b)

$                    957

$                    893

$                 3,755

$                 3,590

Aircraft fuel

(229)

(303)

(1,041)

(1,130)

Adjusted total operating expenses (excluding fuel)^(b)

$                    728

$                    590

$                 2,714

$                 2,460

Total operating expenses, as reported

$                    957

$                    894

$                 3,717

$                 3,592

Aircraft fuel

(229)

(303)

(1,041)

(1,130)

Total operating expenses (excluding fuel)^(b)

$                    728

$                    591

$                 2,676

$                 2,462

(a)

See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)" above for discussion on adjusting items.

(b)

Total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) are included as supplemental disclosures because the Company believes they are useful indicators of its operating performance. Derivations of total operating expenses are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties, in comparing the operating performance of companies in the airline industry.

Total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) have limitations as analytical tools and other companies in the industry may calculate total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) 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 total operating expenses, including total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) have significant limitations which affect their use as an indicator of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information.

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

($ in millions) (unaudited)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Net income (loss)

$                      54

$                    (37)

$                      85

$                    (11)

Plus (minus):

Interest expense

9

8

36

29

Capitalized interest

(8)

(9)

(32)

(28)

Interest income and other

(7)

(8)

(32)

(36)

Income tax expense (benefit)

(3)

43

1

43

Depreciation and amortization

19

14

72

50

EBITDA^(a)

64

11

130

47

Plus: Aircraft rent

192

125

675

554

EBITDAR^(b)

$                    256

$                    136

$                    805

$                    601

EBITDA

$                      64

$                      11

$                    130

$                      47

Plus (minus)^(c):

Legal settlement

—

—

(38)

—

Transaction and merger-related costs

—

—

—

1

Other operating costs - legal fees

—

1

—

1

Adjusted EBITDA^(a)

64

12

92

49

Plus: Aircraft rent

192

125

675

554

Adjusted EBITDAR^(b)

$                    256

$                    137

$                    767

$                    603

(a)

EBITDA and adjusted EBITDA are included as supplemental disclosures because the Company believes they are useful indicators of its operating performance. Derivations of EBITDA are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties, in comparing the operating performance of companies in the industry.

EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of its ongoing operations; the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments; changes in, or cash requirements for, the Company's working capital needs; or the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's indebtedness or possible cash requirements related to its warrants. Further, 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. Other companies in the airline industry may calculate EBITDA and adjusted EBITDA differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, 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 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 EBITDA, including adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.

For the foregoing reasons, each of EBITDA and adjusted EBITDA have significant limitations which affect its use as an indicator of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information.

(b)

EBITDAR and adjusted EBITDAR are included as supplemental disclosures because the Company believes they are useful solely as valuation metrics for airlines as their calculations isolate the effects of financing in general, the accounting effects of capital spending and acquisitions (primarily aircraft, which may be acquired directly, directly subject to acquisition debt, by capital lease or by operating lease, each of which is presented differently for accounting purposes), and income taxes, which may vary significantly between periods and for different airlines for reasons unrelated to the underlying value of a particular airline. However, EBITDAR and adjusted EBITDAR are not determined in accordance with GAAP, are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, EBITDAR and adjusted EBITDAR, as presented, may not be directly comparable to similarly titled measures presented by other companies. In addition, EBITDAR and adjusted EBITDAR should not be viewed as a measure of overall performance since they exclude aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate the business. Accordingly, you are cautioned not to place undue reliance on this information.

(c)

See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)" above for discussion on adjusting items.

Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM,
Adjusted CASM including net interest and CASM including net interest

(unaudited)

Three Months Ended December 31,

2024

2023

($ in millions)

Per ASM (¢)

($ in millions)

Per ASM (¢)

CASM^(a)(b)

9.78

8.93

Aircraft fuel

(229)

(2.34)

(303)

(3.02)

CASM (excluding fuel)^(c)

7.44

5.91

Other operating costs - legal fees

—

—

(1)

(0.01)

Adjusted CASM (excluding fuel)^(c)

7.44

5.90

Aircraft fuel

229

2.34

303

3.02

Adjusted CASM^(d)

9.78

8.92

Net interest expense (income)

(6)

(0.07)

(9)

(0.08)

Adjusted CASM + net interest^(e)

9.71

8.84

CASM

9.78

8.93

Net interest expense (income)

(6)

(0.07)

(9)

(0.08)

CASM + net interest^(e)

9.71

8.85

(a)

Cost per ASM figures may not recalculate due to rounding.

(b)

See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)" above for discussion on adjusting items.

(c)

CASM (excluding fuel) and adjusted CASM (excluding fuel) are included as supplemental disclosures because the Company believes that excluding aircraft fuel is useful to investors as it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which the Company has limited control, impacts the comparability of period-to-period financial performance, and excluding allows management an additional tool to understand and analyze the Company's non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

(d)

Adjusted CASM is included as supplemental disclosure because the Company believes it is a useful metric to properly compare the Company's cost management and performance to other peers, as derivations of adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, the Company believes this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

(e)

Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because the Company believes they are useful metrics to properly compare its 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, the Company believes these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM,
Adjusted CASM including net interest and CASM including net interest

(unaudited)

Year Ended December 31,

2024

2023

($ in millions)

Per ASM (¢)

($ in millions)

Per ASM (¢)

CASM^(a)(b)

9.32

9.50

Aircraft fuel

(1,041)

(2.61)

(1,130)

(2.99)

CASM (excluding fuel)^(c)

6.71

6.51

Legal settlement

38

0.10

—

—

Transaction and merger-related costs

—

—

(1)

(0.01)

Other operating costs - legal fees

—

—

(1)

—

Adjusted CASM (excluding fuel)^(c)

6.81

6.50

Aircraft fuel

1,041

2.61

1,130

2.99

Adjusted CASM^(d)

9.42

9.49

Net interest expense (income)

(28)

(0.07)

(35)

(0.09)

Write-off of deferred financing costs

(1)

—

—

—

Adjusted CASM + net interest^(e)

9.35

9.40

CASM

9.32

9.50

Net interest expense (income)

(28)

(0.07)

(35)

(0.10)

CASM + net interest^(e)

9.25

9.40

(a)

Cost per ASM figures may not recalculate due to rounding.

(b)

See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)" above for discussion on adjusting items.

(c)

CASM (excluding fuel) and adjusted CASM (excluding fuel) are included as supplemental disclosures because the Company believes that excluding aircraft fuel is useful to investors as it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which the Company has limited control, impacts the comparability of period-to-period financial performance, and excluding allows management an additional tool to understand and analyze the Company's non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

(d)

Adjusted CASM is included as supplemental disclosure because the Company believes it is a useful metric to properly compare the Company's cost management and performance to other peers, as derivations of adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, the Company believes this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

(e)

Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because the Company believes they are useful metrics to properly compare its 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, the Company believes these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Reconciliation of Earnings (Loss) per Share, Diluted to Adjusted Earnings (Loss) per Share, Diluted

(unaudited)

Three Months Ended
December 31,

Year Ended December 31,

2024

2023

2024

2023

Earnings (loss) per share, diluted, as reported^(a)(b)

$              0.23

$            (0.17)

$              0.37

$            (0.05)

Legal settlement

—

—

(0.17)

—

Transaction and merger-related costs

—

—

—

—

Other operating costs - legal fees

—

—

—

—

Write-off of deferred financing costs

—

—

—

—

Tax benefit (expense), related to non-GAAP adjustments

—

—

—

—

Valuation allowance

—

0.17

0.02

0.17

Adjusted earnings (loss) per share, diluted^(c)

$              0.23

$                 —

$              0.22

$              0.12

(a)

See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)" above for discussion on adjusting items.

(b)

Cost per share figures may not recalculate due to rounding.

(c)

Adjusted earnings (loss) per share is included as a supplemental disclosure because the Company believes it is a useful indicator of operating performance. Derivations of net income are well-recognized performance measurements in the airline industry that are frequently used by management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the industry.

Adjusted earnings (loss) per share has limitations as an analytical tool. Adjusted earnings (loss) per share does not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of ongoing operations and does not reflect the cash expenditures, or future requirements, for capital expenditures or contractual commitments, and other companies in the industry may calculate Adjusted earnings (loss) per share differently than the Company does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted earnings (loss) per share 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 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, including Adjusted earnings (loss) per share, as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, Adjusted earnings (loss) per share has significant limitations which affect its use as an indicator of profitability. Accordingly, you are cautioned not to place undue reliance on this information.