Allegiant Travel COALGT
Allegiant Travel CO Fair Value Disclosure
Fair Value Measurements
Investments
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1 - Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities
Level 2 - Defined as inputs other than Level 1 inputs that are either directly or indirectly observable
Level 3 - Defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions
The Company uses the market approach valuation technique to determine fair value for investment securities. The assets classified as Level 1 consist of money market funds for which original cost approximates fair value. The assets classified as Level 2 consist of commercial paper, municipal debt securities, federal agency debt securities, U.S. treasury bonds, corporate debt securities and certificates of deposit, which are valued using quoted market prices or alternative pricing sources including transactions involving identical or comparable assets and models utilizing market observable inputs. The Company has no investment securities classified as Level 3.
For those assets classified as Level 2 that are not in active markets, the Company obtains fair value from pricing sources using quoted market prices for identical or comparable instruments, and uses pricing models which include all significant observable inputs: maturity dates, issue dates, settlement dates, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers and other market related data. These inputs are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset.
Financial instruments measured at fair value on a recurring basis:
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| (in thousands) | Total | Level 1 | Level 2 | Total | Level 1 | Level 2 | ||||||||||||||||||||||||||||||||
| Cash equivalents | ||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 42,833 | $ | 42,833 | $ | — | $ | 41,494 | $ | 41,494 | $ | — | ||||||||||||||||||||||||||
| US Government and agency obligations | 16,901 | — | 16,901 | 81,535 | — | 81,535 | ||||||||||||||||||||||||||||||||
| Commercial paper | 14,712 | — | 14,712 | 22,689 | — | 22,689 | ||||||||||||||||||||||||||||||||
| Corporate debt securities | 5,713 | — | 5,713 | 4,133 | — | 4,133 | ||||||||||||||||||||||||||||||||
| Municipal debt securities | 4,520 | — | 4,520 | 10,299 | — | 10,299 | ||||||||||||||||||||||||||||||||
| Total cash equivalents | 84,679 | 42,833 | 41,846 | 160,150 | 41,494 | 118,656 | ||||||||||||||||||||||||||||||||
| Short-term | ||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 337,988 | — | 337,988 | 242,313 | — | 242,313 | ||||||||||||||||||||||||||||||||
| Commercial paper | 179,697 | — | 179,697 | 149,807 | — | 149,807 | ||||||||||||||||||||||||||||||||
| US Government and agency obligations | 67,696 | — | 67,696 | 94,295 | — | 94,295 | ||||||||||||||||||||||||||||||||
| Certificates of deposit | 27,960 | — | 27,960 | 7,239 | — | 7,239 | ||||||||||||||||||||||||||||||||
| Municipal debt securities | 19,618 | — | 19,618 | 1,580 | — | 1,580 | ||||||||||||||||||||||||||||||||
| Total short-term | 632,959 | — | 632,959 | 495,234 | — | 495,234 | ||||||||||||||||||||||||||||||||
| Long-term | ||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 30,127 | — | 30,127 | 39,931 | — | 39,931 | ||||||||||||||||||||||||||||||||
| US Government and agency obligations | 2,696 | — | 2,696 | 10,452 | — | 10,452 | ||||||||||||||||||||||||||||||||
| Municipal debt securities | — | — | — | 1,342 | — | 1,342 | ||||||||||||||||||||||||||||||||
| Total long-term | 32,823 | — | 32,823 | 51,725 | — | 51,725 | ||||||||||||||||||||||||||||||||
| Total financial instruments | $ | 750,461 | $ | 42,833 | $ | 707,628 | $ | 707,109 | $ | 41,494 | $ | 665,615 | ||||||||||||||||||||||||||
There were no significant transfers between Level 1 and Level 2 assets for the years ended December 31, 2025 and 2024.
Long-term Debt
None of the Company's long-term debt is publicly traded. The Company has determined the estimated fair value of all of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable and, therefore, could be sensitive to changes in inputs.The Company utilizes the discounted cash flow method to estimate the fair value of Level 3 debt.
Carrying value and estimated fair value of long-term debt, including current maturities and without reduction for related costs, are as follows:
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||
| (in thousands) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | Fair Value Level | |||||||||||||||||||||||||||
| Long-term debt | $ | 1,413,205 | $ | 1,424,251 | $ | 1,653,737 | $ | 1,667,275 | 3 | |||||||||||||||||||||||
Other
Due to the short term nature, carrying amounts of cash, restricted cash, accounts receivable and accounts payable approximate fair value.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 27, 2020 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.