News Release Details

(unaudited, in millions, except for percentages and per share data)

Three Months Ended March 31,

2024

2023

As Reported
(GAAP)

Adjusted

(Non-GAAP)

As Reported
(GAAP)

Adjusted

(Non-GAAP)

Total operating revenues

$                  865

$                  865

$                  848

$                  848

Total operating expenses

$                  896

$                  896

$                  873

$                  872

Pre-tax income (loss)

$                   (24)

$                   (24)

$                   (17)

$                   (16)

Pre-tax margin

(2.8) %

(2.8) %

(2.0) %

(1.9) %

Net income (loss)

$                  (26)

$                  (21)

$                  (13)

$                  (12)

Diluted earnings (loss) per share

$               (0.12)

$               (0.09)

$               (0.06)

$               (0.06)

Equipment

Quantity

Seats

A320neo

82

186

A320ceo

8

180 - 186

A321ceo

21

230

A321neo

31

240

Total fleet

142

Second Quarter

2024^(a)

Capacity growth (versus 2Q 2023)^(b)

12 to 14 percent

Adjusted (non-GAAP) total operating expenses (excluding fuel) ($ millions)^(c)

$705 to $720

Average fuel cost per gallon^(d)

$2.80 to $2.90

Effective tax rate^(e)

~23 percent

Adjusted (non-GAAP) pre-tax margin

3 to 6 percent

Full Year

2024^(a)

Capacity growth (versus 2023)^(b)

12 to 15 percent

Average fuel cost per gallon^(d)

$2.80 to $2.90

Adjusted (non-GAAP) CASM (excluding fuel), stage-length adjusted to 1,000 miles^(c)

Down 1 to 3 percent

Adjusted (non-GAAP) pre-tax margin

3 to 6 percent

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

$20 to $50

Other capital expenditures ($ millions)^(f)

$160 to $180

(a)

Includes guidance on certain non-GAAP measures, including adjusted total operating expenses (excluding fuel) and adjusted pre-tax margin, and 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)

Given the dynamic nature of the current demand environment, actual capacity adjustments made by the Company may be materially different than what is currently expected.

(c)

Amount estimated excludes fuel expense and special items, the latter of which are not estimable at this time. The amount takes into consideration the additional expected capacity. Stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000).

(d)

Estimated fuel cost per gallon is based upon the blended jet fuel curve on May 1, 2024 and is inclusive of estimated fuel taxes and into-plane fuel costs.

(e)

The Company's second quarter actual tax rate may differ from the forecasted rate due to varying factors which may include, but are not limited to, the composition of items of income and expense recognized, including the amount of non-deductible or other similar items.

(f)

Other capital expenditures estimate includes capitalized heavy maintenance.

Frontier Group Holdings, Inc.

Condensed Consolidated Statements of Operations

(unaudited, in millions, except share and per share data)

Three Months Ended March 31,

Percent Change

2024

2023

Operating revenues:

Passenger

$                                845

$                                830

2 %

Other

20

18

11 %

Total operating revenues

865

848

2 %

Operating expenses:

Aircraft fuel

263

292

(10) %

Salaries, wages and benefits

233

203

15 %

Aircraft rent

159

131

21 %

Station operations

137

124

10 %

Maintenance, materials and repairs

49

45

9 %

Sales and marketing

40

40

— %

Depreciation and amortization

16

11

45 %

Other operating

(1)

27

N/M

Total operating expenses

896

873

3 %

Operating income (loss)

(31)

(25)

24 %

Other income (expense):

Interest expense

(9)

(6)

50 %

Capitalized interest

9

6

50 %

Interest income and other

7

8

(13) %

Total other income (expense)

7

8

(13) %

Income (loss) before income taxes

(24)

(17)

41 %

Income tax expense (benefit)

2

(4)

N/M

Net income (loss)

$                               (26)

$                               (13)

100 %

Earnings (loss) per share:

Basic ^(a)

$                            (0.12)

$                            (0.06)

100 %

Diluted ^(a)

$                            (0.12)

$                            (0.06)

100 %

Weighted-average common shares outstanding:

Basic ^(a)

223,428,610

218,181,386

2 %

Diluted ^(a)

223,428,610

218,181,386

2 %

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 2.6 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 March 31,

Percent Change

2024

2023

Operating statistics ^(a)

Available seat miles ("ASMs") (millions)

9,446

8,775

8 %

Departures

48,666

42,712

14 %

Average stage length (miles)

956

1,053

(9) %

Block hours

132,057

122,970

7 %

Average aircraft in service

137

121

13 %

Aircraft – end of period

142

125

14 %

Average daily aircraft utilization (hours)

10.6

11.3

(6) %

Passengers (thousands)

7,005

6,826

3 %

Average seats per departure

202

195

4 %

Revenue passenger miles ("RPMs") (millions)

6,869

7,262

(5) %

Load Factor

72.7 %

82.8 %

             (10.1) pts

Fare revenue per passenger ($)

46.21

44.33

4 %

Non-fare passenger revenue per passenger ($)

74.41

77.25

(4) %

Other revenue per passenger ($)

2.91

2.70

8 %

Total ancillary revenue per passenger ($)

77.32

79.95

(3) %

Total revenue per passenger ($)

123.53

124.28

(1) %

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

9.16

9.67

(5) %

Cost per available seat mile ("CASM") (¢)

9.49

9.95

(5) %

CASM (excluding fuel) (¢) ^(b)

6.71

6.62

1 %

CASM + net interest (¢) ^(b)

9.42

9.86

(4) %

Adjusted CASM (¢) ^(b)

9.49

9.94

(5) %

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

6.71

6.61

2 %

Adjusted CASM (excluding fuel), stage-length adjusted to 1,000 miles (¢) ^(b)(c)

6.56

6.78

(3) %

Adjusted CASM + net interest (¢) ^(b)

9.42

9.85

(4) %

Fuel cost per gallon ($)

2.93

3.45

(15) %

Fuel gallons consumed (thousands)

89,657

84,587

6 %

Full-time equivalent employees

7,675

6,587

17 %

(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 to 1,000 miles: Adjusted CASM (excluding fuel) * 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 March 31,

2024

2023

Net income (loss), as reported

$                                (26)

$                                (13)

Non-GAAP Adjustments:

Transaction and merger-related costs^(a)

—

1

Pre-tax impact

—

1

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

—

—

Valuation allowance^(b)

5

—

Net income (loss) impact

$                                    5

$                                    1

Adjusted net income (loss)^(c)

$                                (21)

$                                (12)

Income (loss) before income taxes, as reported

$                                (24)

$                                (17)

Pre-tax impact

—

1

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

$                                (24)

$                                (16)

(a)

Represents $1 million in employee retention costs incurred in connection with the terminated merger with Spirit Airlines, Inc., for the three months ended March 31, 2023.

(b)

During the three months ended March 31, 2024, a $5 million non-cash valuation allowance was recorded against 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 current quarter loss, 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.

(c)

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 March 31,

2024

2023

Total operating expenses, as reported^(a)

$                                896

$                                873

Transaction and merger-related costs

—

(1)

Adjusted total operating expenses^(b)

896

872

Aircraft fuel

(263)

(292)

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

$                                633

$                                580

Total operating expenses, as reported

$                                896

$                                873

Aircraft fuel

(263)

(292)

Total operating expenses (excluding fuel)^(b)

$                                633

$                                581

(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 March 31,

2024

2023

Net income (loss)

$                                (26)

$                                (13)

Plus (minus):

Interest expense

9

6

Capitalized interest

(9)

(6)

Interest income and other

(7)

(8)

Income tax expense (benefit)

2

(4)

Depreciation and amortization

16

11

EBITDA^(a)

(15)

(14)

Plus: Aircraft rent

159

131

EBITDAR^(b)

$                                144

$                                117

EBITDA^(a)

$                                (15)

$                                (14)

Plus (minus)^(c):

Transaction and merger-related costs

—

1

Adjusted EBITDA^(a)

(15)

(13)

Plus: Aircraft rent

159

131

Adjusted EBITDAR^(b)

$                                144

$                                118

(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 March 31,

2024

2023

($ in millions)

Per ASM (¢)

($ in millions)

Per ASM (¢)

CASM^(a)(b)

9.49

9.95

Aircraft fuel

(263)

(2.78)

(292)

(3.33)

CASM (excluding fuel)^(c)

6.71

6.62

Transaction and merger-related costs

—

—

(1)

(0.01)

Adjusted CASM (excluding fuel)^(c)

6.71

6.61

Aircraft fuel

263

2.78

292

3.33

Adjusted CASM^(d)

9.49

9.94

Net interest expense (income)

(7)

(0.07)

(8)

(0.09)

Adjusted CASM + net interest^(e)

9.42

9.85

CASM

9.49

9.95

Net interest expense (income)

(7)

(0.07)

(8)

(0.09)

CASM + net interest^(e)

9.42

9.86

(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 Net Income (Loss) per Share to Adjusted Net Income (Loss) per Share

(unaudited)

Three Months Ended March 31,

2024

2023

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

$                             (0.12)

$                             (0.06)

Transaction and merger-related costs

—

—

Valuation allowance

0.03

—

Adjusted net income (loss) per share, diluted^(c)

$                             (0.09)

$                             (0.06)

(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 net income (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 net income (loss) per share has limitations as an analytical tool. Adjusted net income (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 net income (loss) per share differently than the Company does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted net income (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 net income (loss) per share, as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, Adjusted net income (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.