REPUBLIC AIRWAYS HOLDINGS INC.RJET
REPUBLIC AIRWAYS HOLDINGS INC. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The Company holds certain financial instruments, which require measurement to fair value in accordance with ASC 820, Fair Value Measurement. The Company measures the following financial instruments on a recurring basis:
Cash, cash equivalents, and restricted cash—The carrying amounts of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets are classified as a Level 1 fair value measurement in the ASC 820, Fair Value Measurement, fair value hierarchy. Amounts presented in the consolidated balance sheets approximate the respective fair values using a market valuation technique.
Marketable securities—Investments in marketable securities primarily include U.S. Treasury securities and are recorded at fair value. Valuation of securities is based on reference to the quoted market price on national exchanges, representing Level 1 fair value measurements as defined in ASC 820, Fair Value Measurement. Unrealized and realized gains and losses are recorded to investment income and other, net, in the consolidated statements of operations. Amounts recorded for unrealized and realized gains for the years ended December 31, 2025, 2024, and 2023 were $7.7 million, $10.6 million, and $5.5 million, respectively.
EVE Investment—During the year ended December 31, 2022, the Company acquired 1,000,000 shares of Class A Common Stock in EVE for which Embraer S.A., a related party, through its wholly-owned subsidiary Embraer Aircraft Holdings, Inc., possesses beneficial ownership of EVE. Shares were acquired for a purchase price of $10.00 per share (“EVE Equities”) in furtherance of a commercial partnership among certain initial investors for the development of eVTOL aircraft. Additionally, as an inducement to enter into the partnership, the Company obtained (i) warrants for the acquisition of an additional 1,500,000 shares of Class A Common Stock in EVE at an exercise price of $0.01 per share, subject to a three year lock-up period, exercisable through May 2027 (the “EVE Warrants”) and (ii) a put option for reacquisition of EVE Class A Common Stock by EVE or a subsidiary of EVE for the aggregate put price of $10.0 million, exercisable on demand through May 2032 (the “Put Option”) (collectively with the EVE Equities, EVE Warrants, and the Put Option, the “EVE Investment”). The Put Option is redeemable in future aircraft parts and maintenance services.
The EVE Equities are subject to provisions of FASB ASC 321, Investments. The investment was initially measured at fair value and was recorded to other non-current assets in the consolidated balance sheets. EVE Equities represent a Level 1 investment within the FASB ASC 820, Fair Value Measurement, fair value hierarchy, as the inputs for shares of EVE common stock are observable and actively exchange-traded. As of December 31, 2025 and 2024, the Company recorded $4.0 million and $5.4 million, respectively, attributable to the fair value of EVE Equities to other non-current assets in the consolidated balance sheets. The Company recorded unrealized gains (losses) of ($1.5) million, ($1.9) million, and $0.1 million related to the EVE Equities to investment income and other, net, in the consolidated statements of operations during the years ended December 31, 2025, 2024, and 2023, respectively.
EVE Warrants and the Put Option issued in conjunction with the EVE Investment are characterized as financial instruments and manufacturer incentives, respectively, for redemption toward future eVTOL aircraft acquisitions, aircraft parts, and/or maintenance services for the regional jet aircraft. Financial instruments related to the EVE Warrants and Put Option are recorded to other non-current assets at the estimated fair value at issuance and subsequently adjusted to fair value at each reporting date. Manufacturer incentives are recorded to other non-current liabilities in the consolidated balance sheets. Incentives utilized for future aircraft and equipment purchases will be applied as a reduction to the aircraft basis upon delivery.
The Company recorded $17.5 million in manufacturer incentives to other non-current liabilities related to the EVE Warrants and Put Option, which was fixed at the consummation of the Eve Investment during the year ended December 31, 2022. During the years ended December 31, 2025, 2024, and 2023, the Company recorded unrealized gains (losses) of ($2.2) million, ($2.8) million, and $0.2 million related to fluctuations in fair value of the EVE Warrants, respectively. Fluctuations in fair value related to the Put Option were not material. As the EVE Warrants and Put Option are adjusted to fair value at each reporting period in accordance with FASB ASC 815, Derivatives and Hedging, and the related manufacturing incentive is fixed at issuance date in accordance with FASB ASC 705-20, Cost of Sales and Services – Accounting for Consideration, the Company will continue to record unrealized gains or losses associated with the change in fair value of the EVE Warrants and Put Option in earnings despite no economic loss to the Company based on the terms of the EVE agreements and economic substance of the aggregate EVE Investment.
The Company estimates the fair value of EVE Warrants and the Put Option using a Black-Scholes option pricing model. This market-based approach relies on the use of significant unobservable inputs, and therefore, such amounts are classified as Level 3 fair value measurements within the ASC 820, Fair Value Measurement, fair value hierarchy. The significant unobservable input used in the Black-Scholes option pricing model in the valuation of the EVE Investments is the implied volatility using the comparison of stock prices of comparative eVTOL companies of similar size.
The Company measures the following assets and liabilities at fair value on a recurring basis:
| As of December 31, 2025 | ||||||||||||||||||||||||||
(in millions) | Recorded Balance | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Cash, cash equivalents, and restricted cash | $ | 157.7 | $ | 157.7 | $ | — | $ | — | ||||||||||||||||||
Marketable securities | 162.2 | 162.2 | — | — | ||||||||||||||||||||||
EVE Investment | 15.4 | 4.0 | — | 11.4 | ||||||||||||||||||||||
Total | $ | 335.3 | $ | 323.9 | $ | — | $ | 11.4 | ||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||
| (in millions) | Recorded Balance | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Cash, cash equivalents, and restricted cash | $ | 131.9 | $ | 131.9 | $ | — | $ | — | ||||||||||||||||||
Marketable securities | 191.5 | 191.5 | — | — | ||||||||||||||||||||||
EVE Investment | 18.7 | 5.4 | — | 13.3 | ||||||||||||||||||||||
U.S. Treasury Warrants | (6.8) | — | — | (6.8) | ||||||||||||||||||||||
| Total | $ | 335.3 | $ | 328.8 | $ | — | $ | 6.5 | ||||||||||||||||||
As of December 31, 2024, U.S. Treasury Warrants were classified as liability awards and were recognized at fair value and adjusted at each reporting date thereafter using the Black-Scholes option pricing model using an implied volatility calculated by the comparison of stock prices of select airlines of similar size and/or an income approach to determine fair value of the equity of the Company, reporting a Level 3 fair value measurement as defined in the ASC 820, Fair Value Measurement fair value hierarchy.
In conjunction with the Merger closing, the U.S. Treasury Warrants were reclassified from liability awards to equity awards based on the underlying characteristics of the warrants and manner of future settlement of the awards. The Company reclassified $7.4 million for the U.S. Treasury Warrants from accrued expenses in the consolidated balance sheets to additional paid-in-capital in the consolidated balance sheets and discontinued measurement of the U.S. Treasury Warrants to fair value at each reporting date. The carrying value of the U.S. Treasury Warrants was $7.4 million as of December 31, 2025.
The Company recorded unrealized gains (losses) of $(1.7) million, $0.2 million, and $(1.2) million to investment income and other, net in the consolidated statements of operations related to fair value adjustments of the U.S. Treasury Warrants for the years ended December 31, 2025, 2024, and 2023, respectively.
During the year ended December 31, 2025, the U.S. Treasury exercised 315,534 of their existing Warrants for $1.1 million in cash. Remaining U.S. Treasury Warrants outstanding as of December 31, 2025 were 691,701, exercisable through July 15, 2026.
On January 30, 2026, the Company adopted the Omnibus Amendment with the U.S. Treasury to settle the outstanding U.S. Treasury Warrants as of December 31, 2025 in cash. The U.S. Treasury Warrants were settled on February 18, 2026 totaling $5.3 million. As of February 18, 2026, the Company has no remaining warrants outstanding.
The implied volatility, which is the unobservable input, used in the determination of fair value of Level 3 investments for the years ended December 31, 2025 and 2024 is as follows:
| 2025 | 2024 | ||||||||||
EVE Investment | 61.6% | 72.1% | |||||||||
The increase or decrease in the fair value measurement of the implied volatility may result in a higher or lower effect on the fair value measurement of the Company’s EVE Investment. The amount recorded to other non-current assets as of December 31, 2025 and 2024 for the aggregate EVE Warrants and the Put Option was $11.4 million and $13.3 million, respectively.
The reconciliation of Level 3 fair value measurements during the years ended December 31, 2025 and 2024 are as follows:
(in millions) | ||||||||
| Balance at December 31, 2023 | $ | 8.9 | ||||||
| Change in fair value of Eve Investment (unrealized) | (2.6) | |||||||
| Change in fair value of U.S. Treasury Warrants (unrealized) | 0.2 | |||||||
| Balance at December 31, 2024 | 6.5 | |||||||
| Change in fair value of Eve Investment (unrealized) | (1.9) | |||||||
| Change in fair value of U.S. Treasury Warrants (unrealized) | (1.7) | |||||||
| U.S. Treasury Warrants exercised | 1.1 | |||||||
U.S. Treasury Warrants converted to equity | 7.4 | |||||||
| Balance at December 31, 2025 | $ | 11.4 | ||||||
During the year ended December 31, 2023, the Company remeasured the value of its investment in Cape Air on a non-recurring basis for declines in value which may be other than temporary. The Company valued the investment in Cape Air under the discounted cash flow method. Therefore, it is considered a Level 3 fair value measurement under ASC 820, Fair Value Measurement. In response, the Company recorded a $3.6 million reduction in value to investment income and other, net in the consolidated statement of operations which will be subsequently amortized over the useful life of Cape Air aircraft of 15 years in accordance with ASC 323, Investments—Equity Method Investments & Joint Ventures.
Market risk associated with our fixed-rate debt primarily relates to the potential change in fair value and impact to future earnings, respectively, from a change in prevailing market interest rates. Within the fair value hierarchy, the fair value of debt is based predominantly on a market approach, looking to recently completed market transactions and estimates based on interest rates, maturities, credit risk, and underlying collateral. These inputs are classified as Level 3 fair value measurements within the fair value hierarchy. The fair value of debt, including current maturities and excluding finance leases, exceeded its carrying value by $10.8 million as of December 31, 2025. The carrying value of long-term debt exceeded its fair value by $11.5 million as of December 31, 2024.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | May 14, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Dec 29, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 14, 2020 | |
| 2019 | Dec 17, 2019 | |
| 2018 | Dec 20, 2018 | |
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.