THE MONTHLY OPERATING REPORT FOR DECEMBER 2024 (Form 8-K)

THE MONTHLY OPERATING REPORT FOR DECEMBER 2024

Spirit Airlines, Inc. and its subsidiaries (collectively, the "Debtors"), each of which is a Debtor in the above-captioned jointly administered chapter 11 cases (the "Chapter 11 Cases") prepared the attached monthly operating report for December 2024 (together herewith and with all exhibits and schedules thereto, the "MOR").

On November 18, 2024, Debtor Spirit Airlines, Inc. filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On November 25, 2024, Spirit Airlines, Inc.'s subsidiaries (collectively, the "Cayman Debtors") filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors remain in possession of their property and continue to operate and manage their businesses as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Chapter 11 Cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) Federal Rules of Bankruptcy Procedure, as ordered by the Bankruptcy Court [ECF No. 121].

The following notes and statements and limitations pertain to, are incorporated by reference in, and comprise an integral part of, the MOR, and should be referred to and considered in connection with any review thereof.

1.

Basis of Presentation. The Debtors prepared the MOR with the assistance of their advisors and professionals, and are filing it solely for purposes of complying with the reporting requirements applicable in the Chapter 11 Cases. There can be no assurance that such information is complete, and the MOR may be subject to revision.

This MOR is unaudited, limited in scope, and has not been prepared in accordance with federal or state securities laws or other applicable non-bankruptcy law or in lieu of complying with any periodic reporting requirements thereunder, but has been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") (except that the MOR does not include all information and footnotes required by U.S. GAAP).

¹ The Debtors' names and last four digits of their respective employer identification numbers are as follows: Spirit Airlines, Inc. (7023); Spirit Finance Cayman 1 Ltd. (7020); Spirit Finance Cayman 2 Ltd. (7362); Spirit IP Cayman Ltd. (4732); and Spirit Loyalty Cayman Ltd. (4752). The Debtors' mailing address is 1731 Radiant Drive, Dania Beach, FL 33004.

The Debtors and their agents, advisors, attorneys, and other professionals undertake no responsibility to indicate variations from securities laws, other laws, or generally accepted accounting principles herein, or for any evaluations of the Debtors based on this financial information or any other information. This information has not been subjected to audit procedures that would typically be applied to financial information presented in accordance with U.S. GAAP or any other recognized financial reporting framework, and upon application of such procedures, the presented financial information could be subject to material changes. The MOR is not intended to reconcile to any financial statements otherwise prepared or distributed by or for the Debtors. Each signatory to the MOR has necessarily relied upon the efforts, statements, advice, and representations of personnel of the Debtors and their agents, advisors, attorneys, and other professionals. Each signatory has not (and could not have) personally verified the accuracy of each such statement, representation, and answer contained in the MOR.

The financial information contained herein is presented per Spirit's books and records without, among other things, all adjustments or reclassification that may be necessary or typical with respect to consolidating financial statements or SEC reporting purposes or in accordance with U.S. GAAP. The Debtors' accounting systems, policies, and practices were developed to produce consolidated financial statements at the Spirit Airlines, Inc. reporting entity rather than financial statements at each individual legal entity. The Cayman Debtors do not have day-to-day business operations or physical presence and thus do not traditionally maintain books and records. Upon agreement reached with the United States Trustee for the Southern District of New York (the "U.S. Trustee"), the Cayman Debtors are to provide information for Part 1 and Part 7, with limited information on cash balances for Part 2 of the MOR form and provide no financial statement attachments at the entity-level. As such, intercompany balances, historical retained earnings, and equity balances for the Cayman Debtors are not reflected in the separate MORs for each of the Cayman Debtors as these were not historically maintained in the Debtors' accounting system.

2.

Reporting Period. Unless otherwise noted, the MOR reflects the Debtors' books and records and financial activity occurring during the applicable reporting period. Except as otherwise noted, no adjustments have been made to activity occurring after the close of the reporting period. The first MOR reporting period encompasses the reporting period from November 18, 2024, until the end of the month, November 30, 2024, with the exception of the Debtors' Statement of Operations attachment and information provided in Part 4, both of which are provided on a full-month basis. The December MOR and all subsequent MOR reporting periods cover the full calendar month.

3.

Disbursement Systems. Cash is received and disbursed by the Debtors in a manner consistent with the Debtors' historical cash management practices, as described in the Motion of the Debtor for Entry of Interim and Final Orders (I) Authorizing (A) the Debtors to Maintain their Existing Cash Management System, Bank Accounts, and Business Forms, (B) the Debtors to Open and Close Bank Accounts, and (C) Financial Institutions to Administer the Bank Accounts and Honor and Process Related Checks and Transfers, (II) Waiving Deposit and Investment Requirements, and (III) Allowing Intercompany Transactions and Affording Administrative Expense Priority to Post-Petition Intercompany Claims [ECF No. 7].

4.

Use of Information. The financial information disclosed herein was not prepared in accordance with federal or state securities laws or other applicable non-bankruptcy law or in lieu of complying with any periodic reporting requirements thereunder. The MOR should not be used or relied upon for any other purpose, including for information relating to the Debtors' current or future financial condition or performance or for purchasing, selling, or transferring the claims against or equity interest in the Debtors.

5.

Payment of Prepetition Claims Pursuant to First Day Orders. Pursuant to certain "first day" orders entered by the Bankruptcy Court in the Chapter 11 Cases (collectively, the "First Day Orders"), the Debtors are authorized (but not directed) to pay or otherwise satisfy various prepetition claims, including those related to employees, lienholders, customer obligations, insurance, vendors, taxes and fees, trade, and intercompany transactions. To the extent any reportable payments were made on account of prepetition claims following commencement of these Chapter 11 Cases pursuant to a First Day Order, such payments have been included in the applicable reporting matrices or notices required per, and identified in, each respective final First Day Order.

6.

Reservation of Rights. Although the Debtors and their advisors made reasonable efforts to ensure that the MOR is as accurate and complete as possible under the circumstances and based on information available at the time of preparation, inadvertent errors or omissions may have occurred. The Debtors hereby reserve all rights to dispute the nature, amount, validity, status, enforceability, or executory natures of any claim, agreement, representation, or other statement set forth in this MOR. Further, the Debtors reserve the right to amend or supplement the MOR in all respects, as they deem necessary or appropriate, but shall be under no obligation to do so. Nothing contained in this MOR shall constitute a waiver of the Debtors' rights or an admission of any kind with respect to these Chapter 11 Cases or any claim of or against any Debtor.

7.

Specific MOR Disclosures.

Notes to Part 1:

·

Cash balances, receipts, and disbursements reflect bank activity during the reporting period. Timing differences in recognition of certain transactions may create differences between bank balances presented in Part 1 and cash balances reported in the Balance Sheet attachment to the MOR.

·

Where applicable, the Debtors convert non-USD cash transactions to USD using applicable currency exchange rates. As a result, changes in currency exchange rates give rise to month-over-month fluctuations in cash balances which are reported in USD.

·

Intercompany receipts and disbursements are excluded from Parts 1(b) and 1(c), respectively. As such, the ending cash balances in Part 1 will not comport with the ending cash balances in the Debtors' bank statements or the Debtors' books and records. A reconciliation of end-of-month bank balances to the balances presented in Part 1 is provided in the attached Statement of Cash Receipts and Disbursements.

·

In December 2024, the Debtor received the $300.0 million debtor-in-possession (DIP) funding as ordered by the Bankruptcy Court in the final DIP order [ECF No. 257].

Notes to Part 2:

·

Part 2 balances for the Cayman Debtors only include the cash balances for total current assets and total assets. Historical intercompany asset and liabilities balances as well as historical equity balances are not provided. No other Part 2 balances are applicable to the Cayman Debtors.

·

Part 2(b) includes $15.9 million in VAT receivables and $21.4 million in fuel tax receivables expected to be collected or applied against future tax liabilities. Part 2(b) also includes $13.9 million other receivables such as benefit and insurance rebates, and airport tax receivable.

·

Balances reflected in Part 2(g) accrued due to changes to the Debtors' accounts payable processes implemented upon the commencement of the Chapter 11 Cases, among other nonrecurring related issues. The total overdue post-petition amount of $3.5 million reflected in Part 2(g) includes approximately $1.3 million of payables posted during the holiday time frame, and paid off in the subsequent month.

Notes to Part 3:

·

On December 27, 2024, in accordance with prior orders of the Court [ECF Nos. 117, 255], the Company engaged in a transaction with the Bank of Utah as owner trustee, and with FP MSN 6672, LLC and FP MSN 6331, LLC, both on behalf of GA Telesis LLC. The Company sold two aircraft at gross sales price of $19.1 million and $23.7 million, respectively. The Company made payments of $6.8 million and $10.4 million to BNP Paribas incidental to the occurrence of the sales to clear the debt owed on the aircrafts.

Notes to Part 4:

·

Part 4(e) does not incorporate certain general and administrative expenses related to payroll, technology, or other expenses that would otherwise be considered as general and administrative expenses for purposes of MOR reporting. This is due to the setup of the Debtors' accounting system-the Debtors do not separately classify expenses in their general ledger accounts between general and administrative expense financial statement line items.

Notes to Part 5:

·

Part 5(a) includes payments made to Epiq Corporate Restructuring LLC in its capacity as claims and noticing agent in these Chapter 11 Cases [ECF No. 50].

·

Part 5(c) includes payments made to professionals of various creditor constituencies in the Chapter 11 Cases (including in accordance with the Bankruptcy Court's final DIP order [ECF No. 257]).

Notes to Part 6:

·

None

Notes to Part 7:

·

For Part 7(a), pursuant to the relief granted via the First Day Orders, the Debtors made payments on account of certain prepetition debts as they come due in the ordinary course of business. Where required, details of these payments have been delivered to the required notice parties pursuant to the reporting requirements contained within the final First Day Orders.

·

For purposes of Part 7(c), the Debtors included information with respect to the individuals that the Debtors believes may be included in the definition of "insider" set forth in section 101(31) of the Bankruptcy Code during the reporting period. Such individuals may no longer serve in such capacities. Persons listed as "insiders" have been included for informational purposes only and their inclusion shall not constitute an admission that those entities or persons are insiders for purposes of section 101(31) of the Bankruptcy Code. The listing of a person as an insider for purposes of the MOR is not intended to be, nor should it be, construed as an admission of any fact, right, claim, or defense and all such rights, claims, and defenses are hereby expressly reserved. Information regarding the individuals listed as insiders in the MOR has been included for informational purposes only and such information may not be used for any purpose, including to determine (a) control of any Debtor, (b) the extent to which any individual exercised management responsibilities or functions, (c) corporate decision-making authority over any Debtor, or (d) whether such individual could successfully argue that he or she is not an insider under applicable law, including the Bankruptcy Code and federal securities laws, or with respect to any theories of liability. Where Part 7(c) is indicated as "Yes," such persons were confirmed to have received employee compensation payments in the ordinary course of business.

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