Debt (Tables)

12 Months Ended

Dec. 31, 2023

The Company’s debt obligations are as follows (in millions):


	December 31,
	2023		2022
Secured debt:
Pre-delivery credit facility(a)	$	312	$	277
Floating rate building note(b)	16		17
Unsecured debt:
Affinity card advance purchase of miles(c)	80		71
PSP Promissory Notes(d)	66		66
Total debt	474		431
Less current maturities of long-term debt	(251)		(157)
Less debt acquisition costs and other discounts, net	(4)		(2)
Long-term debt, net	$	219	$	272

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(a)The Company, through an affiliate, entered into the PDP facility with Citibank, N.A., as facility agent, in December 2014 (as amended from time to time, the “PDP Financing Facility”). The PDP Financing Facility is collateralized by the Company’s purchase agreement for Airbus A320neo family aircraft deliveries (see Note 12) through the term of the facility, which extends through December 2026. In August 2023, the PDP Financing Facility was amended and restated to expand the number of financial institution participants as lenders and increase the total available capacity to $365 million, among other things. The Company capitalized $2 million in deferred financing costs related to the amendment during the year ended December 31, 2023, which reduced the carrying value of the loan on the Company’s consolidated balance sheet. These costs will be amortized on a straight-line basis over the life of the facility.

Interest is paid every 90 days based on the SOFR plus a margin for each individual tranche. The PDP Financing Facility consists of separate loans for each PDP aircraft. Each separate loan matures upon the earlier of (i) delivery of that aircraft to the Company by Airbus, (ii) the date one month following the last day of the scheduled delivery month of such aircraft and (iii) if there is a delay in delivery of aircraft, depending on the cause of the delivery delay, up to six months following the last day of the scheduled delivery month of such aircraft. The PDP Financing Facility will be repaid periodically according to the preceding sentence, with the PDP Financing facility maturing in December 2026.

(b)Represents a note with a commercial bank related to the Company’s headquarters building. Under the terms of the note, the Company began repaying the outstanding principal balance with quarterly payments beginning in January 2022 and continuing until the maturity date in June 2024, per the latest amendment. On the maturity date, one final balloon payment will be made to cover all unpaid principal, accrued unpaid interest and other amounts due. The interest rate of the one-month SOFR plus a margin is payable monthly.

(c)The Company entered into an agreement with Barclays in 2003 which, as amended, provides for joint marketing, grants certain benefits to Cardholders and allows Barclays to market using the Company’s customer database, through 2029. Cardholders earn miles under the FRONTIER Miles program and the Company sells miles at agreed-upon rates to Barclays and earns fees from Barclays for the acquisition, retention and use of the co-branded credit card by Cardholders. In addition, Barclays will pre-purchase miles if the Company so requests and meets certain conditions precedent. The pre-purchased miles facility amount available to the Company is to be reset on January 15 of each calendar year through, and including, January 15, 2028 based on the aggregate amount of fees payable by Barclays to the Company on a calendar year basis and subject to certain other conditions, up to an aggregate maximum facility amount of $200 million. The Company pays interest on a monthly basis, which is based on a one-month Effective Federal Funds Rate (“EFFR”) plus a margin. Beginning March 31, 2028, the facility is scheduled to be repaid in 12 equal monthly installments.

(d)As a result of the Company’s participation in the payroll support programs offered by the Treasury, the Company obtained a series of 10-year, low-interest loans from the Treasury (collectively, the “PSP Promissory Notes”) that are due between 2030 to 2031. The PSP Promissory Notes include an annual interest rate of 1.00% for the first five years and the SOFR plus 2.00% in the final five years, with bi-annual interest payments. The loans can be prepaid at par at any time without incurring a penalty.

In connection with the term loan facility entered into with the Treasury on September 28, 2020 (the “Treasury Loan”), which was repaid in full on February 2, 2022, and the PSP Promissory Notes, the Company issued to the Treasury warrants to purchase 3,117,940 shares of FGHI common stock at a weighted-average price of $6.95 per share. The initial fair value of these warrants upon issuance was treated as a loan discount, which reduced the carrying value of the related Treasury Loan and PSP Promissory Notes, and is amortized utilizing the effective interest method as interest expense in the Company’s consolidated statements of operations over the term of each loan. These awards were originally classified as liability-based awards within other current liabilities on the Company’s consolidated balance sheets, with periodic mark to market remeasurements included in interest expense in the Company’s consolidated statements of operations given the Company only had the option of settling in cash prior to being publicly traded. As a result of the IPO, the Company has the intent and

ability to settle the warrants issued to the Treasury in shares and, as a result, as of April 6, 2021, the Company reclassified the warrant liability to additional paid-in capital on the Company’s consolidated balance sheets and is no longer required to mark to market the warrants. The Company recorded no mark to market adjustments during the years ended December 31, 2023 and 2022, and $22 million in mark to market adjustments during the year ended December 31, 2021, to interest expense within the Company’s consolidated statements of operations. The Treasury has not exercised any warrants as of December 31, 2023.

Schedule of Maturities of Long-term Debt

As of December 31, 2023, future maturities of debt are payable as follows (in millions):


	Total
Year Ending
2024	$	252
2025	76
2026	—
2027	—
2028	66
Thereafter	80
Total debt principal payments	$	474