XML 21 R9.htm IDEA: XBRL DOCUMENT
v3.20.2

COVID-19 (Notes) | 6 Months Ended
--- | ---
Jun. 30, 2020
Unusual or Infrequent Items, or Both [Abstract] |
Unusual or Infrequent Items, or Both, Disclosure [Text Block] | Impact of the COVID-19 Pandemic The rapid spread of COVID-19 and the related government restrictions, social distancing measures, and consumer fears have impacted flight loads, resulted in unprecedented cancellations of bookings and substantially reduced demand for new bookings throughout the airline industry. Starting in March 2020, the Company experienced a severe reduction in air travel, which continued into the second quarter 2020. Although there were incremental demand increases during portions of the second quarter 2020, an increase in reported COVID-19 cases in various parts of the country towards the end of the quarter caused another decline in bookings. It is evident that demand in the foreseeable future will continue to fluctuate in response to fluctuations in COVID-19 cases, hospitalizations, deaths, treatment efficacy and the availability of a vaccine. The Company is continuously reevaluating flight schedules based on demand trends. The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted in March 2020, providing support for the airline industry and other businesses and individuals. On April 20, 2020, the Company through its airline operating subsidiary Allegiant Air, LLC entered into a Payroll Support Program Agreement (the “PSPA”) with the U.S. Department of the Treasury ("Treasury") for an award Allegiant Air would receive under the CARES Act. The total amount allocated to Allegiant Air under the Payroll Support Program established under the CARES Act is $171.9 million. The Company received three installments of the award during the second quarter 2020, totaling $154.7 million. The fourth and final installment of $17.2 million was received in July 2020. The proceeds of the award must be used exclusively for wages, salaries and benefits. The $154.7 million received under the PSPA during the second quarter 2020 includes direct grants, a $16.4 million loan, and warrants to purchase 19,700 shares of the Company's common stock, as further discussed below. In consideration for the grant, Allegiant Air issued to Treasury a low-interest rate, senior unsecured term promissory note (the “PSP Note”) which will mature 10 years after issuance. The principal amount of the PSP Note is $21.6 million, of which $16.4 million relates to the funds received during the second quarter 2020, and the remaining $5.2 million relates to the funds received in July 2020. The PSP Note is guaranteed by the Company and is prepayable at any time at par (see Note 5). Also in consideration for the grant, the Company issued warrants (the “PSP Warrants”) to Treasury to purchase 25,889 shares of common stock of the Company at a price of $83.33 per share (based on the closing price of the Company’s common stock on The Nasdaq Global Select Market on April 9, 2020). Warrants to purchase 19,700 shares (valued at $1.0 million) were issued in May and June 2020, and warrants for the remaining 6,189 shares (valued at $0.3 million) were issued in July 2020. The PSP Warrants expire five years after issuance, and will be exercisable either through net share settlement or cash, at the Company’s option. The PSP Warrants include customary anti-dilution provisions, do not have any voting rights and are freely transferable, with registration rights. In connection with the PSPA, the Company is required to comply with the relevant provisions of the CARES Act, including those prohibiting the repurchase of common stock and the payment of common stock dividends until September 30, 2021, as well as those restricting the payment of certain executive compensation for periods through March 24, 2022. Given the Company's efforts to conserve and raise liquidity and the Company's assumptions about the future impact of COVID-19 on travel demand, which could be materially different due to the inherent uncertainties of the current operating environment, the Company expects to meet its cash obligations as well as remain in compliance with the debt covenants in its existing financing agreements for the next 12 months based on its current level of unrestricted cash and short-term investments, its anticipated access to liquidity and tax refunds, and projected cash flows from operations. Special Charges The effects of COVID-19 triggered an impairment review, and a non-cash impairment charge was recognized during the six months ended June 30, 2020 (see Note 12 - Impairment for additional detail). The Company also identified expenses that were unique and specific to COVID-19. The impairment charges and other expenses that resulted from the effects of COVID-19 are recorded as special charges within both operating and non-operating expenses during the six months ended June 30, 2020. See the table below for a summary of operating and non-operating special charges recorded by segment during the three and six months ended June 30, 2020.
(in thousands) |  | Airline |  | Sunseeker Resort(1) |  | Other non-airline |  | Total
Three Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Operating |  | $ | 75,902 |  |  | $ | 5,452 |  |  | $ | (185 | ) |  | $ | 81,169 |
Non-operating |  | — |  |  | 19,830 |  |  | — |  |  | 19,830 |
Total special charges |  | $ | 75,902 |  |  | $ | 25,282 |  |  | $ | (185 | ) |  | $ | 100,999 |
Six Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Operating |  | $ | 85,442 |  |  | $ | 135,443 |  |  | $ | 26,382 |  |  | $ | 247,267 |
Non-operating |  | — |  |  | 26,632 |  |  | — |  |  | 26,632 |
Total special charges |  | $ | 85,442 |  |  | $ | 162,075 |  |  | $ | 26,382 |  |  | $ | 273,899 |
(1) $6.8 million in special charges for Sunseeker Resort, related to expense during the first quarter 2020, were reclassified from operating special expense to non-operating special expense for the six months ended June 30, 2020 See additional detail below for the $273.9 million total special charges (operating and non-operating) for the six months ended June 30, 2020:
• | $168.4 million in impairment charges
◦ | Includes Airline - $5.0 million; Sunseeker Resort - $136.8 million; Other non-airline - $26.6 million
• | $58.6 million adjustment resulting from the accelerated retirements of seven airframes and five engines, loss on sale leaseback transaction of four aircraft, and write-offs of other aircraft related assets
• | $19.7 million adjustment for additional salary and benefits expense in relation to the elimination of positions as well as other non-recurring compensation expense associated with the acceleration of certain existing stock awards
◦ | Includes Airline - $19.3 million; Sunseeker Resort - $0.4 million
• | $19.8 million accrual on the expectation to terminate the loan agreement with Sixth Street Partners (formerly TSSP) intended to finance the development of Sunseeker Resorts Charlotte Harbor, expected to be paid in the second half of 2020
• | $5.0 million related to suspension of construction at Sunseeker
• $2.4 million write-down on various non-aircraft assets and other various expenses

X
- References No definition available. + Details
Name: | us-gaap_ExtraordinaryAndUnusualItemsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for an event or transaction that is unusual in nature or infrequent in occurrence, or both. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 220 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=114868817 + Details
Name: | us-gaap_UnusualOrInfrequentItemsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration