Sun Country Airlines Holdings, LLCSNCY

Sun Country Airlines Holdings, LLC Fair Value Disclosure

10-KFiled Feb 12, 20263 min read
13. FAIR VALUE MEASUREMENTS
Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices for identical assets or liabilities in active markets.
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis.
Financial Instruments – Financial instruments including Restricted Cash, Certificates of Deposit, Accounts Receivable, Accounts Payable and all other Current Liabilities have carrying values that approximate fair value.
Cash & Cash Equivalents – The carrying value of cash and cash equivalents approximates fair value. Fair values of cash equivalent instruments that do not trade on a regular basis in active markets are classified as Level 2.
Available-for-Sale Securities – Available-for-Sale investment securities include debt securities, such as municipal, corporate, and U.S. government agency notes. All of these investments are classified as Level 2 because they do not trade in active markets on a regular basis. The Company obtains its pricing per security from a third-party, which uses quoted market prices, when available, or other observable inputs for determination of fair value.
Non-Financial Assets – Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of Property & Equipment, Goodwill and Other Intangible Assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3.
Debt – See Note 8 for more information on the Company's debt financings and related fair values.
The following table summarizes the assets measured at fair value on a recurring basis:
December 31, 2025
Level 1Level 2Level 3Total
Cash & Cash Equivalents$144,684 $— $— $144,684 
Available-for-Sale Securities:
Municipal Debt Securities
— 3,863 — 3,863 
Corporate Debt Securities— 41,367 — 41,367 
U.S. Government Agency Securities— 37,901 — 37,901 
Total Available-for-Sale Securities— 83,131 — 83,131 
Certificates of Deposit6,498 — — 6,498 
Total Assets Measured at Fair Value on a Recurring Basis$151,182 $83,131 $— $234,313 
December 31, 2024
Level 1Level 2Level 3Total
Cash & Cash Equivalents$83,219 $— $— $83,219 
Available-for-Sale Securities:
Corporate Debt Securities— 53,434 — 53,434 
U.S. Government Agency Securities— 44,202 — 44,202 
Total Available-for-Sale Securities— 97,636 — 97,636 
Certificates of Deposit6,417 — — 6,417 
Total Assets Measured at Fair Value on a Recurring Basis$89,636 $97,636 $— $187,272 

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 12, 2025
2023Feb 14, 2024
2022Feb 15, 2023
2021Feb 18, 2022

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.

Other Available Disclosures

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