The accompanying consolidated financial statements include the accounts of Spirit Aviation Holdings, Inc. ("Spirit") and its consolidated subsidiaries (the "Company"). The term "Company" is used to refer to (a) Spirit and its consolidated subsidiaries for periods on or after the Emergence Date (as defined below) and (b) Spirit Airlines, Inc. ("Former Spirit") and its consolidated subsidiaries for periods prior to the Emergence Date. Spirit is headquartered in Dania Beach, Florida, and offers affordable travel to value-conscious customers and serves destinations throughout the United States, Latin America and the Caribbean. Spirit manages operations on a system-wide basis due to the interdependence of its route structure in the various markets served.

On November 18, 2024, Spirit Airlines commenced a voluntary case under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), and, on November 25, 2024, certain of Spirit Airlines' subsidiaries (together with Spirit Airlines, the “Company Parties”) also filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court and joined the 2024 Bankruptcy Case (the “Prior Bankruptcy", "2024 Bankruptcy” or "2024 Chapter 11 Bankruptcy"). On February 20, 2025, the Bankruptcy Court entered an order confirming the 2024 Bankruptcy's First Amended Joint Chapter 11 Plan of Reorganization of Spirit Airlines, Inc. and Its Debtor Affiliates (the “Plan of Reorganization” or the “Plan”). On March 12, 2025 (the “Emergence Date” or "Effective Date"), the Company Parties emerged from the 2024 Bankruptcy in accordance with the confirmed Plan of Reorganization. Refer to Note 4, Emergence from Voluntary Reorganization under the 2024 Chapter 11 Bankruptcy, for additional information.

Between the filing for the 2024 Bankruptcy and the Emergence Date, the Company Parties operated as debtors-in-possession under the supervision of the Bankruptcy Court. The effect of the Company’s emergence from bankruptcy has been applied to the financial statements as of close of business on March 12, 2025. As used herein, the following terms refer to the Company and its operations:

In accordance with ASC 852, with the application of fresh start accounting to the Successor Period, the Company allocated its reorganization value to its individual assets and liabilities based on their estimated fair value in conformity with FASB ASC Topic 820 - Fair Value Measurements and FASB ASC Topic 805 - Business Combinations. Accordingly, the Successor Period's consolidated financial statements after March 12, 2025 are not comparable with the Predecessor's consolidated financial statements as of or prior to that date. The Effective Date fair values of certain of the Successor’s assets and liabilities differ from their recorded values as reflected on the historical balance sheet of the Predecessor. Refer to Note 4, Emergence from Voluntary Reorganization under the 2024 Chapter 11 Bankruptcy and Note 5, Fresh Start Accounting- 2024 Bankruptcy, for additional information.

All estimates, assumptions, valuations and financial projections related to fresh start accounting, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond the Company's control. Accordingly, no assurances can be provided that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially. For information about the use of estimates relating to fresh start accounting, refer to Note 5, Fresh Start Accounting- 2024 Bankruptcy.

During the Current Predecessor Period, the Predecessor applied ASC 852 in preparing the unaudited financial statements, which requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business. Accordingly, pre-petition liabilities that could have been impacted by the 2024 Bankruptcy were classified as liabilities subject to compromise. These liabilities were reported at the amounts the Company anticipated would be allowed by the Bankruptcy Court. Additionally, certain expenses, realized gains and losses and provisions for losses that were realized or incurred during the Current Predecessor Period and directly related to the 2024 Bankruptcy, including fresh start valuation adjustments and gains on liabilities subject to compromise were recorded as reorganization items, net in the consolidated statements of operations in the Current Predecessor Period.

Due to the lack of comparability with historical financials, the Company’s unaudited financial statements and related footnotes are presented with a “black line” that separates the Predecessor and Successor periods to emphasize the lack of comparability between amounts presented as of and after March 12, 2025 (the “Fresh Start Reporting Date”) and amounts presented for all prior periods. The Successor’s financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material. Refer to Note 5, Fresh Start Accounting- 2024 Bankruptcy, for additional information.

On August 29, 2025 (the “Petition Date”), Spirit, as well as Spirit Airlines, LLC (formerly known as Spirit Airlines, Inc.) (“Spirit Airlines”), Spirit IP Cayman Ltd. (“Brand IP Issuer”), Spirit Loyalty Cayman Ltd. (“Loyalty IP Issuer” and, together with Brand IP Issuer, the “Co-Issuers”), Spirit Finance Cayman 1 Ltd., Spirit Finance Cayman 2 Ltd. (collectively, the “Debtors”) each a direct or indirect subsidiary of Spirit, filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court (the “Chapter 11 Cases” or "2025 Bankruptcy" or "2025 Chapter 11 Bankruptcy Proceedings").

The Company has applied Accounting Standards Codification (“ASC”) 852 - Reorganizations in preparing the consolidated financial statements. ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. In addition, pre-petition Debtor obligations that may be impacted by the Chapter 11 Cases have been classified as liabilities subject to compromise on the Company's consolidated balance sheets as of December 31, 2025. These liabilities are reported at the amounts the Company anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

On March 12, 2025, the Company emerged from the 2024 Bankruptcy in accordance with the Plan. As part of the reorganization, the Company successfully restructured certain of its debt obligations, established new financing arrangements, and issued new equity securities consisting of new Common Stock and new warrants. However, the Company has continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel, resulting in a difficult pricing environment and diminished revenues. As a result, the Company continues to experience challenges and uncertainties in its business operations.

Since its emergence from the 2024 Chapter 11 Bankruptcy, the Company has taken certain measures to address these challenges, including the implementation of product enhancements, strategic reductions in certain markets and capacity, consummation of sale-leaseback transactions related to certain of its owned spare engines, and other discretionary cost reduction strategies, including the pilot furloughs announced in July and October 2025 and the flight attendant furloughs announced in September 2025. Also, on August 21, 2025, the Company borrowed the entire available amount of $275.0 million under the Exit Revolving Credit Facility (as defined below). Borrowings under the Exit Revolving Credit Facility will mature on March 12, 2028.

Effective August 15, 2025 and August 20, 2025, the Company entered into the Amendments (as defined below) with its primary credit card processor. On August 15, 2025, the Company agreed to make an additional transfer of $50.0 million in cash to a pledged account in favor of the credit card processor. This amount is recorded in restricted cash within the Company's consolidated balance sheets. On August 20, 2025, the Company agreed to allow the processor (i) to hold back up to $3.0 million per day until the processor’s exposure is fully collateralized and (ii) to remain fully collateralized as the processor’s exposure increases or decreases. In exchange, the processor agreed (i) to extend the term of the Card Processing Agreement from the then

On August 29, 2025, the Company and its Debtor affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. Since the Petition Date, Spirit has been operating its businesses as a debtor-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Spirit received approval from the Bankruptcy Court for a variety of “first day” motions to continue its ordinary course operations during the Chapter 11 Cases, and approval of various post-petition liquidity initiatives described in further detail below. However, for the duration of the Chapter 11 Cases, the Company’s operations and ability to develop and execute its business plan, its financial condition, liquidity and its continuation as a going concern are subject to a high degree of risk and uncertainty associated with the Chapter 11 Cases. The Company’s ability to continue as a going concern is dependent upon, among other things, its ability to become profitable and maintain profitability, its ability to access sufficient liquidity and its ability to obtain approval of and successfully implement a proposed plan of reorganization ("the Proposed Plan"). As discussed further below, Spirit has entered into a DIP Facility for purposes of accessing ongoing liquidity during the Chapter 11 Cases. Refer to Note 3, 2025 Chapter 11 Bankruptcy Proceedings for additional information. The outcome of the Chapter 11 Cases is dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court. The Company can give no assurances that it will be able to secure additional sources of funds to support its operations, or, if such funds are available to the Company, that such additional financing will be sufficient to meet its needs.

The Company has evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year from the filing of this Annual Report on Form 10-K. Based on such evaluation, management believes there is substantial doubt about the Company’s ability to continue as a going concern. During the Chapter 11 Cases, the Company’s ability to continue as a going concern is contingent upon the Company’s ability to obtain approval of and successfully implement the Proposed Plan, among other factors.

The Company’s consolidated financial statements have been prepared assuming that it will continue to operate as a going concern, which contemplates the Company’s ability to obtain approval of and successfully implement the Proposed Plan, its continuity of operations, realization of assets and liquidation of liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company's estimates and assumptions are based on historical experience and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially.

The Company's restricted cash is comprised of cash held in accounts subject to restrictions imposed by the Bankruptcy Court or otherwise pledged as collateral against the Company's letters of credit and other agreements. As of December 31, 2025, the Company's restricted cash is to be used to secure standby letters of credit, as collateral for the Exit Secured Notes (as defined below), restricted cash held in an account subject to a control agreement under its credit card processing agreement, restricted cash held in accounts subject to control agreements to be used for the payment of interest and fees on the Exit Secured Notes and pledged cash pursuant to its corporate credit cards, and to fund required escrow accounts due to the 2025 Bankruptcy filing.

markets when determining the fair value of these securities. For additional information, refer to Note 10, Short-term Investment Securities. These securities are stated at fair value within current assets on the Company's consolidated balance sheet. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as proceeds from the maturity of short-term investment securities for the security relinquished, and purchase of short-term investment securities for the security purchased, in the Company's consolidated statements of cash flows. Realized gains and losses on sales of investments, if any, are reflected in non-operating other (income) expense in the consolidated statements of operations. Unrealized gains and losses on investment securities are reflected as a component of accumulated other comprehensive income, ("AOCI").

Accounts receivable primarily consist of amounts due from credit card processors associated with the sales of tickets, amounts due from the Internal Revenue Service related to federal excise fuel tax refunds and amounts expected to be received related to the CARES Employee Retention credit. The Company records an allowance for amounts not expected to be collected. The Company estimates the allowance based on historical write-offs and aging trends as well as an estimate of the expected lifetime credit losses. The allowance for doubtful accounts was immaterial as of December 31, 2025 and 2024.

Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation of operating property and equipment is computed using the straight-line method applied to each unit of property. Residual values for new aircraft, new engines, major spare rotable parts, avionics and assemblies are generally estimated to be 10%. Property under finance leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed using the Company's incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under finance leases is recorded on a straight-line basis over the lease term and is included in depreciation and amortization expense.


			Estimated Useful Life
Aircraft, engines and flight simulators			25
Spare rotables and flight assemblies			7 to 25 years
Other equipment and vehicles			5 to 7 years
Internal use software			3 to 10 years
Finance leases			Lease term or estimated useful life of the asset
Leasehold improvements			Lesser of lease term or estimated useful life of the improvement
Buildings			Lesser of lease term or 40 years

The Company owns an 8.5-acre parcel of land purchased for $41.0 million and has a 99-year lease agreement for the lease of a 2.6-acre parcel of land, in Dania Beach, Florida, where the Company built its new headquarters campus and a 200-unit residential building. As of December 31, 2025, the 8.5-acre parcel of land and related construction costs were capitalized within other property and equipment on the Company's consolidated balance sheets. The 99-year lease was determined to be an operating lease and is recorded within operating lease right-of-use asset and operating lease liability on the Company's consolidated balance sheets.



	Successor		Predecessor
	Period from March 13, 2025 through December 31, 2025		Period from January 1, 2025 through March 12, 2025		Twelve Months Ended December 31, 2024		Twelve Months Ended December 31, 2023


Depreciation	$	105,158	$	27,457	$	177,872	$	218,106
Amortization of heavy maintenance	56,440		21,074		113,522		79,768
Amortization of capitalized software	28,646		6,322		33,879		22,998
Total depreciation and amortization	$	190,244	$	54,853	$	325,273	$	320,872

The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, which have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor costs for employees who are directly associated with, and devote time, to internal-use software projects. Capitalized computer software, included as a component of other property and equipment in the accompanying consolidated balance sheets, net of amortization, was $34.8 million and $48.8 million at December 31, 2025 and 2024, respectively.

The Company records amortization of capitalized software on a straight-line basis within depreciation and amortization expense in the accompanying consolidated statements of operations. The Company placed in service internal-use software of $13.4 million and $1.9 million in the Successor Period and the Current Predecessor Period, respectively and $29.2 million and $35.5 million, during the years 2024 and 2023, respectively.

The Company accounts for heavy maintenance and major overhaul under the deferral method whereby the cost of heavy maintenance is capitalized and amortized as a component of depreciation and amortization expense in the consolidated statements of operations until the earlier of the next heavy maintenance event or the end of the lease term. Deferred heavy maintenance, net was $90.7 million and $241.1 million at December 31, 2025 and 2024, respectively.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, the Company's leases generally do not provide a readily determinable implicit rate. Therefore, the Company estimates the incremental borrowing rate to discount lease payments based on information available at lease commencement. The Company uses publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The Company has options to extend certain of its operating leases for an additional period of time and options to early terminate several of its operating leases. The lease term consists of the noncancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The Company's lease agreements do not contain any residual value guarantees. The Company elected to not separate non-lease components from the associated lease component for all underlying classes of assets with lease and non-lease components.

As part of the 2025 Chapter 11 Cases, aircraft and spare engine leases have been determined to be liabilities subject to compromise. Accordingly, as of December 31, 2025, operating lease liabilities related to lease contracts entered into prior to the Petition Date have been reclassified to liabilities subject to compromise on the Company’s consolidated balance sheets, as appropriate under the 2025 Bankruptcy proceedings. Refer to Note 3, 2025 Chapter 11 Bankruptcy Proceedings, for more information.

As of December 31, 2025, the Company had rejected the lease agreements related to 83 aircraft and 3 engines. In accordance with ASC 842, the rejection of a lease is accounted for as a lease termination. The Company determined the lease termination date based on the applicable rejection date and the contractual terms of each lease. As a result, the Company derecognized the related right-of-use assets and operating lease liabilities and recorded the resulting loss in reorganization

expense within its consolidated statement of operations. In addition, upon rejection, the lessors on the rejected leases became unsecured creditors with claims for contractual amounts due under the lease agreements. Accordingly, the Company recorded a liability of $2,189.8 million within liabilities subject to compromise, with a corresponding loss recognized in reorganization expense within its consolidated statement of operations, representing management’s best estimate of the allowed claim amounts related to the rejected lease agreements. The ultimate number and amount of allowed claims may differ significantly and is not determinable at this time.

The Company elected not to apply the recognition requirements in Topic 842 to short-term leases (i.e., leases of 12 months or less) but instead recognize these lease payments in income on a straight-line basis over the lease term. The Company elected this accounting policy for all classes of underlying assets. In addition, in accordance with Topic 842, variable lease payments are not included in the recognition of a lease liability or right-of-use asset.

The Company is required to make pre-delivery deposit payments ("PDPs") towards the purchase price of each new aircraft and engine prior to the scheduled delivery date. These deposits are initially classified as pre-delivery deposits on flight equipment on the Company's consolidated balance sheets until the aircraft or engine is delivered, at which time the related PDPs are deducted from the final purchase price of the aircraft or engine and are reclassified to flight equipment on the Company's consolidated balance sheets. The Company may also be entitled to refunds of PDPs resulting from sale leaseback transactions for aircraft previously included in the Company’s order book, as well as any agreements that modify the timing of aircraft deliveries or involve the removal of aircraft from its order book. For additional information on transactions entered into by the Company during the Successor Period and Current Predecessor Period that provided PDP refunds, if any, refer to Note 18, Commitments, Contingencies and Other Contractual Arrangements.

In addition, the Company capitalizes the interest that is attributable to the outstanding PDP balances as a percentage of the related debt on which interest is incurred. Capitalized interest represents interest cost incurred during the acquisition period of a long-term asset and is the amount which theoretically could have been avoided had the Company not paid PDPs for the related aircraft or engines.

Related interest is capitalized and included within pre-delivery deposits on flight equipment through the acquisition period until delivery is taken of the aircraft or engine and the asset is ready for service. Once the aircraft or engine is delivered, the capitalized interest is also reclassified into flight equipment on the Company's consolidated balance sheets along with the related PDPs as they are included in the cost of the aircraft or engine. Capitalized interest for the Successor Period, the Current Predecessor Period, 2024 and 2023 was primarily related to the interest incurred on long-term debt. In addition, during 2024 and 2023, the Company capitalized interest related to the outstanding work in progress in connection with the building of its new headquarters.

During the third quarter of the Successor Period, the Company reassessed the classification of the remaining 20 A320ceo and A321ceo aircraft that were previously recorded as held for sale. The original sales agreement for these aircraft expired during the third quarter of the Successor Period, and as of December 31, 2025, the Company retained the assets for ongoing use in operations. As the criteria for held for sale classification under ASC 360 are no longer met, the Company reclassified the aircraft to property and equipment on its consolidated balance sheets as they will be held and used. In accordance with the accounting guidance, the assets were measured at the lower of (i) their carrying amount, adjusted for depreciation that would have been recognized had they remained classified as held and used, or (ii) their fair value as of the date the decision not to sell was made. In addition, net proceeds of any refinancing, sale or other disposition of these aircraft after satisfaction in full of any Aircraft Loans secured by such aircraft serves as collateral under the DIP loan agreement executed on October 14, 2025.

During the third quarter of the Successor Period, the Company recorded an adjustment to the carrying value of the related aircraft to their adjusted carrying amount of $429.5 million, and reclassified the assets to property and equipment on its consolidated balance sheets, which represents the amount at which the aircraft would have been recorded had they never been classified as held for sale. In addition, the Company recorded a $3.2 million gain, within loss (gain) on disposal of assets within its consolidated statement of operations for the Successor Period ended December 31, 2025, related to this reclassification, reflecting the difference between the adjusted carrying value and the prior held for sale balance.

The Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired, the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets, and the net book value of the assets exceeds their estimated fair value. Factors which could be indicators of impairment include but are not limited to (1) a decision to permanently remove flight equipment or other long-lived assets from operations, (2) significant changes in the estimated useful life, (3) significant changes in projected cash flows, (4) permanent and significant declines in related fair values and (5) changes to the regulatory environment. If an impairment indicator is identified, the Company conducts a recoverability analysis. In performing the analysis, the Company uses certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, and estimated salvage values. Depending on the results of the recoverability analysis, an impairment loss is measured as the difference between the asset's carrying value and its fair value.

As of December 31, 2025, the Company identified indicators of potential impairment, including continued negative cash flows and the commencement of the 2025 Chapter 11 Bankruptcy Proceedings during the third quarter of 2025. These indicators prompted the Company to perform a recoverability analysis on its assets to assess whether any impairment losses should be recognized. In estimating the undiscounted future cash flows, the Company uses certain assumptions, including, but not limited to, the estimated, undiscounted future cash flows expected to be generated by these assets, estimates of length of service the asset will be used in the Company’s operations, estimated salvage values, and estimates related to the Company's plan of reorganization. The Company assessed whether any impairment of its long-lived assets existed as of December 31, 2025 and has determined that the assets are recoverable. The Company’s assumptions about future conditions are important to its assessment of potential impairment of its long-lived assets were subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available and will update its analyses accordingly.

With the adoption of fresh start accounting, the Company recorded $83.5 million of indefinite-lived intangible assets within intangible assets on the Company's consolidated balance sheet as of the Fresh Start Reporting Date. The Company's indefinite-lived intangible assets are related to landing and take-off rights and authorizations ("Slots") at LaGuardia Airport, a slot-controlled airport (the “LGA Slots”).

These indefinite-lived intangible assets are assessed for impairment annually on September 1 (the "Annual Test Date"), or more frequently if events or circumstances indicate that the fair values of indefinite-lived intangible assets may be lower than their carrying values. As of December 31, 2025, the Company had not identified any such events or circumstances that would indicate the fair value of the LGA Slots is below their carrying value. Indefinite-lived intangible assets are assessed for impairment by initially performing a qualitative assessment. The Company performed a qualitative test to evaluate whether the assets were impaired on the Annual Test Date in 2025. As part of the qualitative test, the Company also considered fair value estimates provided by an independent third-party specialist. The specialist applies a market approach to determine fair value, which relies on recent slot transaction data, market lease rates, and input from industry participants and regulatory agencies. Slot values are further adjusted based on factors such as time-of-day, peak demand, and qualitative considerations. These valuations reflect market participant assumptions and, in combination with other qualitative factors considered, are used to determine whether it is more likely than not that the fair value of the Slots is less than their carrying amount.

Operating revenues are comprised of passenger revenues and other revenues. Passenger revenues are primarily comprised of fares and related ancillary items such as bags, seats and other travel-related fees. Other revenues primarily consist of the marketing component of the sale of loyalty points to the Company's credit card partner and commissions revenue from the sale of various items, such as hotels and rental cars.

Changes and cancellations. An unused ticket expires at the date of scheduled travel, at which time a service charge is assessed, and is recognized as revenue at the date of scheduled travel. However, customers may elect to change or cancel their itinerary prior to the date of departure. In 2024, the Company launched its no change or cancel fee policy for its bundled travel options. Guests are required to pay the difference in fare if the new trip is more expensive or receive a credit if the new trip is less expensive.

Any unused amount is placed in a credit shell which generally expires within 12 months or 5 years from the date the credit shell is created. Prior to May 2024, credit shells generally expired 90 days from the date the credit shell was created. Effective May 16, 2024, the FAA Reauthorization Act was signed into law. Under U.S. Department of Transportation regulations effective August 2024, credit shells issued in lieu of a refund for airline‑initiated cancellations, schedule changes, or irregular operations (IROP) must remain valid for a minimum of five (5) years from issuance. As of December 31, 2025, 5-year credit shells represented 9.3% of the outstanding Credit Shell liability. The remaining balance generally expires within 12 months of the date of issuance. Credit shells can be used towards the purchase of a new ticket and the Company’s other service offerings. Credit shell amounts are recorded as deferred revenue and amounts expected to expire unused are estimated based on historical experience.

Estimating the amount of credits that will go unused involves some level of subjectivity and judgment. Assumptions used to generate Breakage (as defined below) estimates can be impacted by several factors including, but not limited to, changes to the Company's ticketing policies, changes to the Company’s refund, exchange, and credit shell policies, and economic factors. The amount of credit shells issued varies, primarily due to the flight delays and cancellation events throughout the year. The Company generally experiences some variability in the amount of Breakage revenue recognized throughout the year and expects some variability in the amount of Breakage revenue recorded in future periods, as the estimates of the portion of those funds that will expire unused may differ from historical experience.

The Company operates the Spirit Saver$ Club®, which is a subscription-based loyalty program that allows members access to exclusive, extra-low fares, as well as discounted prices on bags and seats, shortcut boarding and security, and exclusive offers on hotels, rental cars and other travel necessities. The Company also operates the Free Spirit loyalty program (the "Free Spirit Program"), which attracts members and partners and builds customer loyalty for the Company by offering a variety of awards, benefits and services. Free Spirit loyalty program members earn and accrue points for dollars spent on Spirit for flights and other non-fare services, as well as services from non-air partners such as retail merchants, hotels or car rental companies. Customers can also earn points based on their spending with the Company's co-branded credit card company with which the Company has an agreement to sell points. The Company's co-branded credit card agreement provides for joint marketing pursuant to which cardholders earn points by making purchases using co-branded cards. Points earned and accrued by Free Spirit loyalty program members can be redeemed for travel awards such as free (other than taxes and government-imposed fees), discounted or upgraded travel. The Company's agreement with the administrator of the Free Spirit affinity credit card program expires on December 31, 2028.

Passenger ticket sales earning points. Passenger ticket sales earning points provide customers with (1) points earned and (2) air transportation. The Company values each performance obligation on a stand-alone basis and allocates the consideration to each performance obligation based on their relative stand-alone selling price. To value the point credits earned, the Company considers the quantitative value a passenger receives by redeeming points for a ticket rather than paying cash, which is referred to as equivalent ticket value ("ETV").

The Company's co-branded credit card agreement provides for joint marketing where cardholders earn points for making purchases using co-branded cards. During 2023, the Company extended its agreement with the administrator of the Free Spirit affinity credit card program through December 31, 2028. The Company accounts for this agreement consistently with the accounting method that allocates the consideration received to the individual products and services delivered. The value is allocated based on the relative stand-alone selling prices of those products and services, which generally consists of (i) points to be awarded, (ii) airline benefits, collectively referred to as the "Award Travel Components," (iii) licensing of brand and access to member lists and (iv) advertising and marketing efforts, collectively referred to as the "Marketing Components." Revenue allocated to the Award Travel Components are recorded in passenger revenues, while the revenue allocated to the Marketing Components are recorded in other revenues. The Company determined the estimate of the stand-alone selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of points awarded and number of points redeemed, (2) the estimated stand-alone selling price of the award travel obligation and airline benefits, (3) licensing of brand access to member lists and (4) the cost of advertising and marketing efforts undertaken by the Company.

The Company defers the amount for award travel obligation as part of loyalty deferred revenue. The amounts that are expected to be redeemed during the following twelve months are recorded within ATL on the Company's consolidated balance sheet and the portion that is expected to be redeemed beyond the following twelve months is recorded within long-term liabilities on the consolidated balance sheet. In addition, the Company recognizes loyalty travel awards in passenger revenue as the points are used for travel. Revenue allocated to the Marketing Components are recorded in other revenue as all services are provided. Total unrecognized revenue from future Free Spirit Program was $96.4 million and $101.5 million at December 31, 2025 and 2024, respectively. The current portion of this balance is recorded within air traffic liability, and the long-term portion of this balance is recorded within deferred gains and other long-term liabilities in the accompanying consolidated balance sheets.


	Consideration received from credit card loyalty programs		Portion of proceeds recognized immediately as marketing component
	(in thousands)
Period from March 13, 2025 through December 31, 2025	$	59,553	$	35,496


Period from January 1, 2025 through March 12, 2025	15,240		9,089
Twelve Months Ended December 31, 2024	85,812		51,220
Twelve Months Ended December 31, 2023	93,147		48,071

Points breakage. For points that the Company estimates are not likely to be redeemed ("Breakage"), the Company recognizes the associated value proportionally during the period in which the remaining points are redeemed. Management uses statistical models to estimate Breakage based on historical redemption patterns. A change in assumptions as to the period over which points are expected to be redeemed, the actual redemption activity for points or the estimated fair value of points expected to be redeemed could have an impact on revenues in the year in which the change occurs and in future years.

Amortization of heavy maintenance and major overhaul costs charged to depreciation and amortization expense was $56.4 million and $21.1 million in the Successor Period and the Current Predecessor Period, respectively and $113.5 million and $79.8 million for the years ended 2024 and 2023, respectively. During the Successor Period and the Current Predecessor Period, the Company deferred $30.1 million and $26.7 million, respectively, of costs for heavy maintenance. During the years ended 2024 and 2023, the Company deferred $86.4 million and $202.9 million, respectively, of costs for heavy maintenance. As of December 31, 2025 and 2024, the Company had a deferred heavy maintenance balance of $287.2 million and $577.3 million, and accumulated heavy maintenance amortization of $77.9 million and $273.8 million, respectively.

The Company outsources certain routine, non-heavy maintenance functions under contracts that require payment on a utilization basis, primarily based on flight hours. Costs incurred for maintenance and repair under flight hour maintenance contracts, where labor and materials price risks have been transferred to the service provider, are expensed based on contractual payment terms. All other costs for routine maintenance of the airframes and engines are charged to expense as performed.



	Successor		Predecessor
	Period from March 13, 2025 through December 31, 2025		Period from January 1, 2025 through March 12, 2025		Twelve Months Ended December 31, 2024		Twelve Months Ended December 31, 2023


Utilization-based maintenance expense	$	68,537	$	19,981	$	103,232	$	117,458
Non-utilization-based maintenance expense	91,062		27,517		114,506		105,881
Total maintenance, materials and repairs	$	159,599	$	47,498	$	217,738	$	223,339

The Company's aircraft lease agreements often contain provisions that require the Company to return aircraft airframes, engines and other aircraft components to the lessor in a certain condition or pay an amount to the lessor based on the airframe and engine's actual return condition. Lease return costs include all costs that would be incurred at the return of the aircraft, including costs incurred to repair the airframe and engines to the required condition as stipulated by the lease. Lease return costs are recognized beginning when it is probable that such costs will be incurred and they can be estimated.

When determining the probability to accrue lease return costs, there are various estimated costs and factors which need to be considered such as the contractual terms of the lease agreement, current condition of the aircraft, the age of the aircraft at lease expiration, projected number of hours run on the engine at the time of return, and the number of projected cycles run on the airframe at the time of return, among others. Management assesses the need to accrue lease return costs periodically throughout the year or whenever facts and circumstances warrant an assessment. Lease return costs will generally be estimable closer to the end of the lease term but may be estimable earlier in the lease term depending on the contractual terms of the lease agreement and the timing of maintenance events for a particular aircraft.

As part of the Company’s 2025 Chapter 11 Cases, certain aircraft and spare engine leases were rejected. For these rejected leases, the Company is no longer obligated to return the related aircraft, airframes, engines or components in accordance with the original lease terms. Accordingly, the Company’s estimated lease return cost obligations associated with these rejected aircraft and engines as of December 31, 2025 are recorded within liabilities subject to compromise on the Company’s consolidated balance sheets, as appropriate under the 2025 Bankruptcy proceedings. Refer to Note 3, 2025 Chapter 11 Bankruptcy Proceedings, for more information.

The Company expenses advertising and the production costs of advertising as incurred. Marketing and advertising expenses were $24.3 million for the Successor Period and $11.9 million for the Current Predecessor Period. Marketing and advertising expenses were $26.8 million and $9.0 million for the years ended 2024 and 2023, respectively. These costs were recorded within distribution expense in the consolidated statements of operations.

The Company accounts for income taxes using the asset and liability method. The Company records a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will be not realized. As of December 31, 2025 and 2024, the Company had a valuation allowance of $813.7 million and $226.4 million, respectively, recorded within deferred income taxes on the Company's consolidated balance sheets. For additional information, refer to Note 17, Income Taxes.

On July 25, 2023, RTX Corporation, the parent company of Pratt & Whitney, announced that it had determined that a rare condition in the powdered metal used to manufacture certain engine parts will require accelerated inspection of the PW 1100G-JM geared turbo fan (“GTF”) fleet, which powers the Company's A320neo family of aircraft. As a result, the Company removed GTF engines from service and grounded some of its A320neo aircraft for inspection requirements.

On June 4, 2025, the Company entered into an agreement (the "Agreement") with International Aero Engines, LLC ("IAE"), an affiliate of Pratt & Whitney, pursuant to which IAE provided the Company with a monthly credit, subject to certain conditions, as compensation for each of its aircraft unavailable for operational service due to GTF engine issues from January 1, 2025 through December 31, 2025. The credits are accounted for as vendor consideration in accordance with ASC 705-20 and are recognized as a reduction of the purchase price of the goods or services acquired from IAE during the period, which may include the purchase of maintenance, spare engines and short-term rentals of spare engines, based on an allocation that corresponds to the Company's progress towards earning the credits. Pratt & Whitney agreed to issue the Company $135.3 million in credits related to the aircraft on ground ("AOG") days through December 31, 2025, of which the entire amount was recognized in 2025.

Of the total credits recognized as of December 31, 2025, $103.7 million and $6.0 million was recorded in the Successor Period and the Current Predecessor Period, respectively, as a reduction in the cost basis of assets purchased from IAE within flight equipment and deferred heavy maintenance, net on the Company's consolidated balance sheets. In addition, during the Successor Period and the Current Predecessor Period, the Company recorded $21.0 million and $4.6 million, respectively, in credits on the Company's consolidated statements of operations within maintenance, materials and repairs and aircraft rent expenses. In addition, during the Successor Period and the Current Predecessor Period, the Company recognized lower depreciation and amortization expense of $24.3 million and $6.1 million, respectively, related to credits recognized, as a reduction of the cost basis of assets purchased from IAE recorded within the Company's consolidated statements of operations.

In connection with the Company's ongoing 2025 Chapter 11 Bankruptcy Proceedings, the lease agreements related to certain aircraft subject to these inspections were rejected as part of the bankruptcy process, and the Company did not receive any additional credits under this agreement related to these aircraft. In addition, in connection with the Chapter 11 Cases, the Company entered into a restructuring term sheet with IAE, dated December 3, 2025, and subsequently entered into a definitive agreement on February 4, 2026. For additional information refer to Note 3, 2025 Chapter 11 Bankruptcy Proceedings.

Aircraft Fuel. The Company’s business may be adversely affected by increases in the price of aircraft fuel, the volatility of the price of aircraft fuel or both. Aircraft fuel, one of the Company’s largest expenditures, represented approximately 22%, 21%, 25% and 31% of total operating expenses in the Successor Period, the Current Predecessor Period, 2024 and 2023, respectively.

The Company’s operations are largely concentrated in the southeast United States with Fort Lauderdale being the highest volume fueling point in the system. Gulf Coast Jet indexed fuel is the basis for a substantial majority of the Company’s fuel consumption. Any disruption to the oil production or refinery capacity in the Gulf Coast, as a result of weather or any other disaster, or disruptions in supply of jet fuel, dramatic escalations in the costs of jet fuel and/or the failure of fuel providers to

Limited number of vendors. The Company relies on a limited number of vendors for the delivery of additional aircraft and engines - currently Airbus A320-family, single-aisle aircraft, powered by engines manufactured by IAE and Pratt & Whitney. Due to the relatively small size of the Company's fleet and high utilization rate, the unavailability of aircraft and engines, as well as the reduced capacity, resulting from delivery delays or performance issues from these vendors, could have a material adverse effect on the Company’s business, results of operations and financial condition.

Employees. As of December 31, 2025, the Company had six union-represented employee groups that together represented approximately 81% of all employees. A strike or other significant labor dispute with the Company’s unionized employees is likely to adversely affect the Company’s ability to conduct business. Additional disclosures are included in Note 18, Commitments, Contingencies and Other Contractual Arrangements.