Sun Country Airlines Holdings, LLC

As of December 31, 2025, we operated 47 aircraft in our passenger fleet. Of these passenger aircraft, 12 were financed under finance leases. Of the 37 owned aircraft and Owned Aircraft Held for Operating Lease as of December 31, 2025, 31 aircraft were financed, five aircraft have been pledged to support the ability to efficiently utilize the Company's four-year $75,000 Revolving Credit Facility, and one aircraft was unencumbered. The average age of the passenger aircraft in our fleet was approximately 17 years as of December 31, 2025.

The Company also has three aircraft that are currently on lease to unaffiliated airlines, which is comprised of two Owned Aircraft Held for Operating Lease and one subleased aircraft. The Company owns five Boeing 737-900ERs, two of which are currently on lease. The Company is entitled to fixed payments over the remaining lease term for each aircraft, which expire at various dates through the fourth quarter of 2026. On each lease expiry date, the Owned Aircraft Held for Operating Lease will be redelivered to Sun Country and are expected to be inducted into the Company’s fleet. The average age of the Owned Aircraft Held for Operating lease in our fleet was approximately 11 years as of December 31, 2025.

The Company has subleased one Boeing 737-800 aircraft, which will be delivered to Sun Country on the sublease expiry date. The sublease is classified as an operating lease and does not relieve the Company of its primary lease obligations with the lessor. The Company operates the subleased aircraft under finance leases and will continue to be leased upon redelivery. The Company is entitled to fixed payments over the remaining lease term, with additional variable lease payments based on aircraft utilization. During the year ended December 31, 2025, an amendment was executed to extend the lease expiry term for the subleased aircraft through the second quarter of 2026. In February 2026, an additional amendment was executed to extend the sublease expiry term through the fourth quarter of 2026. Upon expiry of the sublease, the aircraft will be redelivered to the Company and is expected to be inducted into the Company's passenger fleet. The age of the one subleased aircraft was 13 years as of December 31, 2025.

We currently operate 20 aircraft dedicated to our Cargo business. These freighters had an average age of 23 years as of December 31, 2025. All freighters are subleased directly from Amazon and we operate them pursuant to the A&R ATSA. In June 2024, the Company entered into the A&R ATSA with Amazon that increased the number of Boeing 737-800 cargo aircraft that Sun Country operates on behalf of Amazon from 12 to 20. During the year ended December 31, 2025, the Company received and placed in-service all eight additional cargo aircraft under the A&R ATSA. In early 2026, the Company agreed to operate another two additional cargo aircraft, which will increase the total from 20 to 22 once the aircraft are received and placed in-service. Based upon review of the A&R ATSA, the sublease arrangement does not qualify as a lease under ASC 842, Leases, because the Company does not control the use of the aircraft. As such, no right-of-use asset and lease liability is recognized in these financial statements for the Amazon arrangement. This conclusion is unchanged from the original ATSA.

Facilities

In most of the airports we serve, we do not directly lease facilities, but rather operate under flexible common use agreements. This facilitates our strategy of entering and exiting markets to service periods of peak demand. Our terminal passenger service facilities, which include ticket counters, gate space, operational support space and baggage service offices, generally have month-to-month terms or are used on a per use basis. For any leased space we are typically responsible for maintenance, insurance and other facility-related expenses and services under these agreements. We also have entered into use agreements at many of the airports we serve that provide for the non-exclusive use of runways, taxiways and other facilities. Landing fees under these agreements are based on the number of landings and weight of the aircraft.

We primarily operate out of eight of the 16 gates at Terminal 2 at MSP, which we have access to on an "Enhanced Priority" basis through 2028, with common use access to the remaining gates. As of January 1, 2026, we have Enhanced Priority access to nine of the 16 gates, with common use access to the remaining gates. All other leases for our terminal passenger service facilities, which include operational support space and baggage service offices, are leased on a month-to-month basis.

Gate space and ticket counter space is used and billed on a per operation (each arrival and departure) basis until an annual operating cap is met. Our leases also include two hangars:

• We are subject to extensive regulation by the FAA, the DOT, the TSA, the CBP and other U.S. and foreign governmental agencies. We cannot assure you that compliance with and changes in laws, regulations, orders, rulings and guidance will not have a material adverse effect on our business, results of operations and financial condition.
• Risks Related to Our Business
• If we fail to implement our business strategy successfully, our business will be materially adversely affected.
• Unauthorized use, incursion or breach of our information technology infrastructure, or that of our third-party providers, could compromise the personally identifiable information of our passengers, prospective passengers or personnel and other sensitive information and expose us to liability, damage our reputation and have a material adverse effect on our business, results of operations and financial condition.
• As the cyber-threat landscape evolves, attacks are growing in frequency, sophistication, and intensity, and are becoming increasingly difficult to detect. We have in the past, and may in the future, experience such cybersecurity threats.
• We may utilize artificial intelligence, which could expose us to liability or adversely affect our business.
• Our Cargo business is concentrated with Amazon, and any decrease in volumes or increase in costs, or a termination of the A&R ATSA, could have a material adverse effect on our business, operations, financial condition and brand.
• Our business is significantly tied to and consolidated in our main hub in Minneapolis-St. Paul, and any decrease in traffic in this hub could have a material adverse effect on our business, operations, financial condition and brand.
• Our reputation, brand and business could be adversely affected if we were to experience significant publicity, including in the event of an accident or similar public incident involving our aircraft or personnel, or through social media, or if we were unable to adequately protect our intellectual property rights.
• We rely on third-party service providers and other commercial partners to perform functions integral to our operations, including distributing a portion of our airline tickets.
• We rely heavily on technology and automated systems to operate our business, and any disruptions or failure of these technologies or systems or any failure on our part to implement any new technologies or systems could materially adversely affect our business.
• We may not be able to grow or maintain our unit revenues or maintain our ancillary revenues.
• We operate a single aircraft type and may be dependent on a sole-source for the majority of our aircraft parts at certain locations within our network.
• Loss of the services of key personnel, increased labor costs, union disputes, employee strikes and other labor-related disruption may adversely affect our business, results of operations and financial condition.
• We rely on efficient daily aircraft utilization to address peak demand days of the week and months of the year, which makes us vulnerable to flight delays, flight cancellations or aircraft unavailability during peak demand periods.
• If we are unable to attract, retain and train qualified personnel at reasonable costs or fail to maintain our company culture, our business could be harmed.
• Our inability to expand or operate reliably or efficiently out of airports where we operate could have a material adverse effect on our business, results of operations and financial condition and brand.
• We are highly dependent upon our cash and investment balances, Operating Cash Flows and availability under our Revolving Credit Facility.
• Our liquidity would be adversely impacted, potentially materially, in the event one or more of our credit card processors were to impose holdback restrictions for payments due to us from credit card transactions.
• Our maintenance costs will fluctuate over time; additionally we will periodically incur substantial maintenance costs due to the maintenance schedules of our aircraft fleet and obligations to the lessors, and we could incur significant maintenance expenses outside of such maintenance schedules in the future. The cost of aircraft repairs and maintenance and unexpected delays in the time required to complete aircraft maintenance could negatively affect our operating results.
• We have a significant amount of aircraft and other fixed obligations that could impair our liquidity and thereby harm our business, results of operations and financial condition.
• Reduction in demand for air transportation, or governmental reduction or limitation of operating capacity, in the domestic United States, Canada, Mexico or Caribbean markets, or a reduction in demand for our Charter or Cargo operations, could harm our business, results of operations and financial condition.
• Our quarterly results of operations fluctuate due to a number of factors, including seasonality.
• We may become involved in litigation that may materially adversely affect us.
• Our business model includes lessee and sublease arrangements for aircrafts, engines and aircraft equipment. Any lessee defaults or reorganizations, failure by our lessees to meet their maintenance and recordkeeping obligations, failure by our lessees to adequately insure our aircraft or obtain required licenses, consents and approvals or changes in fuel costs could materially adversely affect our business, financial condition and results of operations and result in lost revenue and additional costs.
• Export restrictions and tariffs may impact where we can place and deliver our aircraft and negatively impact our earnings and cash flows.
• Political and economic instability in the international markets we operate as well as income and other taxes could negatively affect our business and operating results due to our multi-jurisdictional operations.
• ESG matters may impose additional costs and expose us to new risks.
• Major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect our business, financial condition and results of operations.
• Risks Related to Our Indebtedness
• Any future indebtedness of ours could contain restrictions that limit our flexibility.
• Risks Related to Ownership of Our Common Stock
• Our stock price may fluctuate significantly.
• Our certificate of incorporation and bylaws include provisions limiting ownership and voting by non-U.S. citizens.
• Our future earnings and earnings per share, as reported under GAAP, could be adversely impacted by the warrants granted to Amazon. If Amazon exercises its right to acquire shares of our common stock pursuant to the 2019 Warrants, this will dilute the ownership interests of our then-existing stockholders and could adversely affect the market price of our common stock.
• Future sales of our common stock in the public market, or the perception in the public market that such sales may occur, could reduce our stock price.
• We do not anticipate paying dividends on our common stock in the foreseeable future.
• We are required to pay our pre-IPO stockholders for certain tax benefits, and the amounts of such payments could be material.
• Risks Related to the Pending Transaction with Allegiant
• The Merger will involve substantial costs and the pendency of the Merger may cause disruption in our business.
• Shareholder litigation could prevent or delay the consummation of the Merger or otherwise negatively impact our business, operating results and financial condition.
• Failure to complete the Merger in a timely manner or at all could negatively impact the market price of our common stock, as well as our future business and our results of operations and financial condition.
• The Merger Consideration payable to holders of our common stock will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or results of operations, or in the event of any change in the price of our common stock.
• In order to complete the Merger, the Company and Allegiant must obtain certain regulatory approvals, and if such approvals are not granted or are granted with conditions, completion of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.
• The Merger Agreement contains provisions that restrict our ability to consider alternative transaction proposals.
• The Merger may impair our ability to attract and retain qualified employees or retain and maintain relationships with our suppliers and other business partners.