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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-40217
https://cdn.kscope.io/486e3dc0da04cce3d9d4c134da9c74e3-sncy-20220630_g1.jpg
Sun Country Airlines Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware82-4092570
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2005 Cargo Road
Minneapolis, Minnesota
55450
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (651) 681-3900
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareSNCY
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated Filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
Number of shares outstanding by each class of common stock, as of June 30, 2022:
Common Stock, $0.01 par value – 58,143,901 shares outstanding


Table of Contents
Sun Country Airlines Holdings, Inc.
Form 10-Q
Table of Contents
Page
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Table of Contents
PART I. Financial Information
ITEM 1. FINANCIAL STATEMENTS
SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, 2022December 31, 2021
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents$212,858 $309,338 
Restricted Cash4,132 8,447 
Investments76,724 6,283 
  Accounts Receivable, net of an allowance for credit losses of $197 and $250, respectively
38,479 30,156 
Short-term Lessor Maintenance Deposits7,394 5,505 
  Inventory, net of a reserve for obsolescence of $1,434 and $1,275, respectively
6,320 5,405 
Prepaid Expenses16,245 8,511 
Other Current Assets1,186 1,798 
 Total Current Assets363,338 375,443 
Property & Equipment, net:
Aircraft and Flight Equipment589,690 447,319 
Ground Equipment and Leasehold Improvements 27,092 20,876 
Computer Hardware and Software10,161 8,785 
Finance Lease Assets251,887 209,457 
Rotable Parts10,958 9,150 
Total Property & Equipment889,788 695,587 
Accumulated Depreciation & Amortization(144,165)(117,069)
Total Property & Equipment, net745,623 578,518 
Other Assets:
Goodwill222,223 222,223 
Other Intangible Assets, net87,110 89,110 
Operating Lease Right-of-use Assets27,019 61,658 
Aircraft Deposits11,520 10,021 
Long-term Lessor Maintenance Deposits25,813 20,346 
Deferred Tax Asset15,813 17,608 
Other Assets8,279 5,495 
Total Other Assets397,777 426,461 
Total Assets$1,506,738 $1,380,422 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, 2022December 31, 2021
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable$58,051 $39,805 
Accrued Salaries, Wages, and Benefits25,342 28,527 
Accrued Transportation Taxes14,549 12,736 
Air Traffic Liabilities123,958 118,562 
Over-market Liabilities3,063 4,309 
Finance Lease Obligations29,392 11,705 
Loyalty Program Liabilities11,548 11,451 
Operating Lease Obligations10,172 17,231 
Current Maturities of Long-term Debt43,810 29,412 
Income Tax Receivable Agreement Liability1,100  
Other Current Liabilities10,376 7,913 
Total Current Liabilities331,361 281,651 
Long-term Liabilities:
Over-market Liabilities3,964 10,428 
Finance Lease Obligations220,229 180,450 
Loyalty Program Liabilities5,056 8,267 
Operating Lease Obligations21,410 58,810 
Long-term Debt319,733 248,014 
Income Tax Receivable Agreement Liability106,200 98,800 
Other Long-term Liabilities2,897 3,413 
Total Long-term Liabilities679,489 608,182 
Total Liabilities1,010,850 889,833 
Commitments and Contingencies (see Note 13)
Stockholders' Equity:
Common stock, with $0.01 par value, 995,000,000 shares authorized, 58,145,724 and 57,872,452 issued at June 30, 2022 and December 31, 2021, respectively
581 579 
Preferred stock, with $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2022 and December 31, 2021
  
Treasury stock, at cost, 1,823 shares held at June 30, 2022 and no shares held at December 31, 2021
(52) 
Additional Paid-In Capital491,492 485,638 
Retained Earnings 4,087 4,372 
Accumulated Other Comprehensive Loss(220) 
Total Stockholders' Equity495,888 490,589 
Total Liabilities and Stockholders' Equity$1,506,738 $1,380,422 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Operating Revenues:
Passenger$195,362 $125,130 $397,394 $229,325 
Cargo21,190 22,098 42,243 43,684 
Other2,515 1,961 5,954 3,793 
Total Operating Revenue219,067 149,189 445,591 276,802 
Operating Expenses:
Aircraft Fuel76,947 29,709 141,492 53,984 
Salaries, Wages, and Benefits60,298 42,316 119,915 86,392 
Aircraft Rent2,211 3,815 5,397 9,414 
Maintenance12,782 11,300 24,777 20,510 
Sales and Marketing7,881 5,822 16,509 10,932 
Depreciation and Amortization16,854 14,208 32,182 26,823 
Ground Handling8,212 6,551 16,170 11,781 
Landing Fees and Airport Rent9,496 8,752 19,782 17,537 
Special Items, net (39,819) (72,355)
Other Operating, net21,017 16,746 44,166 31,397 
Total Operating Expenses215,698 99,400 420,390 196,415 
  Operating Income3,369 49,789 25,201 80,387 
Non-operating Income (Expense):
Interest Income532 9 556 24 
Interest Expense(7,042)(6,080)(15,604)(13,201)
Other, net(1,702)18,054 (8,577)18,049 
Total Non-operating Income (Expense), net(8,212)11,983 (23,625)4,872 
  Income (Loss) Before Income Tax(4,843)61,772 1,576 85,259 
  Income Tax Expense (Benefit) (921)9,595 1,861 16,304 
  Net Income (Loss)$(3,922)$52,177 $(285)$68,955 
Net Income (Loss) per share to common stockholders:
Basic$(0.07)$0.91 $0.00 $1.30 
Diluted$(0.07)$0.84 $0.00 $1.20 
Shares used for computation:
Basic58,060,716 57,156,159 57,984,608 52,850,041 
Diluted58,060,716 61,982,441 57,984,608 57,403,593 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net Income (Loss)$(3,922)$52,177 $(285)$68,955 
Other Comprehensive Loss:
Net unrealized loss on Available-for-Sale securities, net of deferred tax benefit of $66, $, $66 and $, respectively
(220) (220) 
Other Comprehensive Loss(220) (220) 
Comprehensive Income (Loss)$(4,142)$52,177 $(505)$68,955 

See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30, 2021
Common Stock Loans to
Stockholders
Additional
Paid-in Capital
Retained
Earnings (Deficit)
Total
SharesAmount
December 31, 202046,839,659$468$(3,500)$248,525$38,324$283,817
Shares Surrendered by Stockholders(140,737)(1)3,500(3,499)
Initial Public Offering, net10,454,545105224,552224,657
Net Income16,77816,778
Income Tax Receivable Agreement(115,200)(115,200)
Amazon Warrants1,4001,400
Stock-based Compensation2,8702,870
March 31, 202157,153,467$572$ $473,848$(60,098)$414,322
Initial Public Offering Expense Adjustment— — — 349 — 349 
Exercise of Stock Options5,000 — — 27 — 27 
Net Income — — — — 52,177 52,177 
Amazon Warrants— — — 1,400 — 1,400 
Stock-based Compensation— — — 744 — 744 
June 30, 202157,158,467 $572 $ $476,368 $(7,921)$469,019 
Six Months Ended June 30, 2022
Common Stock Treasury StockAdditional Paid-in CapitalRetained
Earnings
Accumulated Other Comprehensive LossTotal
SharesAmountSharesAmount
December 31, 202157,872,452 $579  $ $485,638 $4,372 $ $490,589 
Stock Option Exercises91,868 1 — — 522 — — 523 
Net Income— — — — — 3,637 — 3,637 
Amazon Warrants— — — — 1,400 — — 1,400 
Stock-based Compensation— — — — 920 — — 920 
March 31, 202257,964,320 $580  $ $488,480 $8,009 $ $497,069 
Stock Issued for Stock-Based Awards181,404 1 — — 1,037 — — 1,038 
Net Stock Settlement of Stock-Based Awards— — 1,823 (52)— — — (52)
Net Loss— — — — — (3,922)— (3,922)
Amazon Warrants— — — — 1,400 — — 1,400 
Stock-based Compensation— — — — 575 — — 575 
Other Comprehensive Loss— — — — — — (220)(220)
June 30, 202258,145,724 $581 1,823 $(52)$491,492 $4,087 $(220)$495,888 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30,
20222021
Net Income (Loss)$(285)$68,955 
Adjustments to reconcile Net Income (Loss) to Cash from Operating Activities:
Depreciation and Amortization32,182 26,823 
Tax Receivable Agreement Adjustment8,500 (18,700)
Operating Lease Right-of-use Assets5,255 9,419 
Non-Cash Gain on Asset Transactions, net(79) 
Unrealized Gain on Fuel Derivatives (3,599)
Amortization of Over-market Liabilities(1,687)(3,081)
Deferred Income Taxes1,861 16,304 
Amazon Warrants Vested2,800 2,800 
Stock-based Compensation Expense1,495 3,613 
Amortization of Debt Issuance Costs and Debt Securities515 687 
Loss on Extinguishment of Debt1,557 1,224 
Changes in Operating Assets and Liabilities:  
Accounts Receivable(8,023)4,265 
Inventory(1,184)(224)
Prepaid Expenses(7,733)(6,446)
Lessor Maintenance Deposits(7,356)(3,220)
Aircraft Deposits(1,720)1,496 
Other Assets18 1,294 
Accounts Payable15,692 3,546 
Accrued Transportation Taxes1,813 7,024 
Air Traffic Liabilities5,396 12,695 
Loyalty Program Liabilities(3,113)(1,192)
Operating Lease Obligations(5,698)(28,494)
Other Liabilities(3,146)1,615 
Net Cash Provided by Operating Activities37,060 96,804 
Cash Flows from Investing Activities:  
Purchases of Property & Equipment(137,647)(73,699)
Proceeds from the Sale of Property & Equipment515  
Proceeds from Insurance Settlements8,865  
Purchases of Investments(71,629)(1,436)
Proceeds from the Sale of Investments935 984 
Net Cash Used in Investing Activities(198,961)(74,151)
Cash Flows from Financing Activities:  
Cash Received from Stock Offering 235,894 
Costs of Stock Offering (8,669)
Proceeds from Stock Option and Warrant Exercises1,371 26 
Taxes Paid for Net Stock Settlement of Stock-Based Awards(31) 
Proceeds from Borrowings172,507 80,500 
Repayment of Finance Lease Obligations(24,293)(7,864)
Repayment of Borrowings(86,046)(74,709)
Debt Issuance Costs(2,402)(2,709)
Net Cash Provided by Financing Activities61,106 222,469 
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash(100,795)245,122 
Cash, Cash Equivalents and Restricted Cash--Beginning of the Period317,785 70,363 
Cash, Cash Equivalents and Restricted Cash--End of the Period$216,990 $315,485 

SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30,
20222021
Non-cash transactions:
Lease Deposits Applied Against the Purchase of Aircraft$ $3,296 
Aircraft and Flight Equipment Acquired through Finance Leases19,928 42,911 
Finance Lease Asset Modifications46,311  
Aircraft Acquired From Exercise of Finance Lease Purchase Option, net of Accumulated Depreciation19,083  
Derecognition of Operating Lease Right-of-Use Assets, net 41,135 
Derecognition of Operating Lease Obligations 44,726 
The following provides a reconciliation of Cash, Cash Equivalents and Restricted Cash to the amounts reported on the Condensed Consolidated Balance Sheets:
June 30, 2022June 30, 2021
Cash and Cash Equivalents$212,858 $310,723 
Restricted Cash4,132 4,762 
Total Cash, Cash Equivalents and Restricted Cash$216,990 $315,485 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
1.    COMPANY BACKGROUND
Sun Country Airlines Holdings, Inc. is the parent company of Sun Country, Inc., which is a certificated air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Services are provided to the general public, cargo customers, military branches, wholesale tour operators, individual entities, schools and companies for air transportation to various U.S. and international destinations. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines Holdings, Inc. are referred to as those of the Company (the “Company” or “Sun Country”).
Equity Transactions
On April 11, 2018 (the "Acquisition Date"), certain investment funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, Inc. (“Apollo”) acquired Sun Country, Inc. For more information on the Company’s equity transactions, see Note 1 of Notes to the Consolidated Financial Statements included in Part II, Item 8 “Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the U.S. Securities and Exchange Commission (“2021 10-K”).
Initial Public Offering of Common Stock
On March 16, 2021, the Company priced its initial public offering of 9,090,909 shares of common stock to the public at $24.00 per share. The stock began trading on the NASDAQ on March 17, 2021 under the symbol "SNCY". The underwriters had an option to purchase an additional 1,363,636 shares from the Company at the public offering price, which they exercised. In total, all 10,454,545 shares were issued on March 19, 2021 and the net proceeds to the Company were $225,329 after deducting underwriting discounts and commissions, and other offering expenses.
Concurrently with the closing of the initial public offering, SCA Horus Holdings, LLC, an affiliate of investment funds managed by affiliates of Apollo (the “Apollo Stockholder”), also completed a private placement in which the Apollo Stockholder sold 2,216,312 and 2,216,308 shares of common stock to PAR Investment Partners, L.P. and certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc., respectively. Each of the two sales was based on an aggregate purchase price of $50,000 and a price per share equal to 94% of the initial public offering price of $24.00 per share.
Secondary Offerings
During May 2021 and October 2021, the Apollo Stockholder and other selling stockholders sold 7,250,000 and 8,500,000 shares of the Company's common stock at the public offering prices of $34.50 and $32.50, respectively. Under both transactions, the underwriters were given options to purchase additional shares of the Company's common stock at the public offering price. During the May 2021 and October 2021 offerings, the underwriters elected to purchase 1,087,500 and 435,291 of the option shares, respectively. The Company incurred offering expenses of $1,763 in conjunction with the two secondary offerings and did not receive any of the proceeds from these offerings.
For more information on the 2021 secondary offerings, see Note 1 of Notes to the Consolidated Financial Statements included in Part II, Item 8 “Financial Statements” in the 2021 10-K.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
Amazon Agreement
On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide cargo services under an Air Transportation Services Agreement (the “ATSA”).
In connection with the ATSA, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share. There were 632,183 warrants that vested upon execution of the ATSA and 63,217 warrants will vest for each milestone of $8,000 in qualifying payments made by Amazon to the Company. During the six months ended June 30, 2022 and June 30, 2021, 379,304 warrants vested in each respective period. As of June 30, 2022 and June 30, 2021, the cumulative vested warrants held by Amazon were 2,022,963 and 1,264,356, respectively. The exercise period of these warrants is through the eighth anniversary of the issue date.
2.    BASIS OF PRESENTATION
The Company has prepared the Condensed Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (“GAAP”) and has included the accounts of Sun Country Airlines Holdings, Inc. and its subsidiaries. The accompanying unaudited Condensed Consolidated Financial Statements of Sun Country Airlines Holdings, Inc. should be read in conjunction with the Consolidated Financial Statements contained in the 2021 10-K. Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited Condensed Consolidated Financial Statements for the interim periods presented. The Company reclassified certain prior period amounts to conform to the current period presentation. All material intercompany balances and transactions have been eliminated in consolidation.
The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Significant areas of judgment relate to passenger revenue recognition, maintenance under the built-in overhaul method, equity-based compensation, tax receivable agreement, lease accounting, impairment of goodwill, impairment of long-lived and intangible assets, air traffic liabilities, the loyalty program, as well as the valuation of Amazon warrants. During the six months ended June 30, 2022, there were no significant changes to the Company’s critical accounting policies.
Due to impacts from the global coronavirus (“COVID-19”) pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, uncertainties in pilot staffing and other factors, operating results for the six months ended June 30, 2022 are not necessarily indicative of operating results for future quarters or for the year ending December 31, 2022. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, extreme or severe weather and natural disasters, disease outbreaks, fears of terrorism or war, and other factors beyond the Company's control.
Revision of Previously Issued Consolidated Financial Statements
During the second quarter of 2022, the Company identified an immaterial misstatement in the Company's Condensed Consolidated Financial Statements for the quarter and year-to-date interim periods in the year ended December 31, 2021 (the "previously issued financial statements"). The error related to the improper application of Accounting Standards Codification (ASC) Topic 842, Leases regarding the treatment of the incremental difference between the net purchase price of the leased aircraft and the net operating lease recorded on the balance sheet immediately prior to the transaction. This difference should have been
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
capitalized as part of the acquisition costs incurred to purchase the aircraft off the operating lease. The Company incorrectly expensed this amount as incurred within Special Items, net on the Condensed Consolidated Statements of Operations. The error resulted in an understatement of the benefit within Special Items, net, partially offset by incremental Depreciation and Amortization Expense for the three and six months ended June 30, 2021, and an understatement of Aircraft and Flight Equipment.
The Company assessed the materiality of the errors on the prior period financial statements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, codified in ASC 250, Presentation of Financial Statements. Management concluded it was immaterial to the Company's previously issued annual or interim financial statements.
While management believes the effect of the error is immaterial, the Company has revised the previously issued financial statements as presented in these Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. In addition, the immaterial error will be corrected in the comparative amounts presented in the Company’s subsequent quarterly and annual filings.
The impact of the revision on the Company's previously issued Consolidated Balance Sheets as of December 31, 2021 are as follows:
December 31, 2021
As Previously IssuedCorrectionAs Revised
Assets
Aircraft and Flight Equipment$440,356 $6,963 $447,319 
Total Property & Equipment688,624 6,963 695,587 
Accumulated Depreciation & Amortization(115,013)(2,056)(117,069)
Total Property & Equipment, net573,611 4,907 578,518 
Deferred Tax Asset18,737 (1,129)17,608 
Total Other Assets427,590 (1,129)426,461 
Total Assets1,376,644 3,778 1,380,422 
Stockholder's Equity
Retained Earnings594 3,778 4,372 
Total Stockholders' Equity486,811 3,778 490,589 
Total Liabilities and Stockholders' Equity1,376,644 3,778 1,380,422 
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
The impact of the revision on the Company's previously issued Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2021 are as follows:
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
As Previously IssuedCorrectionAs RevisedAs Previously IssuedCorrectionAs Revised
Operating Expenses
Depreciation and Amortization$13,460 $748 $14,208 $26,075 $748 $26,823 
Special Items, net(38,520)(1,299)(39,819)(65,392)(6,963)(72,355)
Total Operating Expenses99,951 (551)99,400 202,630 (6,215)196,415 
Operating Income49,238 551 49,789 74,172 6,215 80,387 
Income Before Income Tax61,221 551 61,772 79,044 6,215 85,259 
Income Tax Expense9,468 127 9,595 14,875 1,429 16,304 
Net Income51,753 424 52,177 64,169 4,786 68,955 
Basic Income per share$0.91 $0.00 $0.91 $1.21 $0.09 $1.30 
Diluted Income per share$0.83 $0.01 $0.84 $1.12 $0.08 $1.20 
The revision also impacted the Company's previously issued Condensed Consolidated Statements of Changes in Stockholders Equity as follows:
For the Three Months Ended March 31, 2021
As Previously IssuedCorrectionAs Revised
Net Income$12,416 $4,362 $16,778 
As of March 31, 2022As of June 30, 2021As of March 31, 2021
As Previously IssuedCorrectionAs RevisedAs Previously IssuedCorrectionAs RevisedAs Previously IssuedCorrectionAs Revised
Retained Earnings (Deficit)$4,231 $3,778 $8,009 $(12,707)$4,786 $(7,921)$(64,460)$4,362 $(60,098)
Total Stockholders' Equity493,291 3,778 497,069 464,233 4,786 469,019 409,960 4,362 414,322 
The Company's Condensed Consolidated Statement of Changes Stockholders' Equity as of December 31, 2021 has been corrected to reflect the changes to the impacted Stockholders' Equity accounts as described above.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
The impact of the revision on the Company's previously issued Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2021 is as follows:
Six Months Ended June 30, 2021
As Previously IssuedCorrectionAs Revised
Operating Activities
Net Income$64,169 $4,786 $68,955 
Depreciation and Amortization26,075 748 26,823 
Non-Cash Gain on Asset Transaction, Net(12,668)12,668  
Deferred Income Taxes14,875 1,429 16,304 
Operating Lease Obligations(15,826)(12,668)(28,494)
Net Cash Provided by Operating Activities89,841 6,963 96,804 
Investing Activities
Purchases of Property & Equipment(66,736)(6,963)(73,699)
Net Cash Used in Investing Activities(67,188)(6,963)(74,151)
The revision had no impact on the Company's Net Cash Provided by Financing Activities for the six months ended June 30, 2021.
Investments
Investments consist of debt securities and Certificates of Deposit. The Certificates of Deposit are recorded at cost, plus accrued interest. These certificates serve as collateral for letters of credit required by various airports and other vendors. All of the certificates have original maturities greater than 90 days.
During the quarter ended June 30, 2022, the Company purchased $70,391 of debt securities with original maturities of three months or greater. The investments are classified as current assets on the Condensed Consolidated Balance Sheets because the securities are highly liquid and are available to be quickly converted into cash to fund current operations. Primarily all of the Company's Available-for-Sale securities will mature within one year. The Company limits its exposure to any one issuer or market sector, and largely limits its investments to investment grade quality securities.
The Company's investment securities are classified as Available-for-Sale and are reported at fair value on the Company's Condensed Consolidated Balance Sheets. Unrealized gains and losses on the Company's Available-for-Sale securities are excluded from net earnings and are reported as a component of Accumulated Other Comprehensive Income (Loss), net of income tax effects, within Stockholders' Equity on the Condensed Consolidated Balance Sheets until realized. Realized gains and losses are recorded using the specific identification method and reflected in Other, net within Non-operating Income (Expense) on the Company's Condensed Consolidated Statement of Operations. Premiums and discounts recorded on Available-for-Sale debt securities are accounted for in Other, net within Non-operating Income (Expense) on the Company's Condensed Consolidated Statement of Operations.
At each reporting period, the Company assesses its Available-for-Sale investments in an unrealized loss position to determine whether an impairment exists. The Company will record an impairment if management intends to sell an impaired security, will likely be required to sell a security before recovery of the entire amortized cost, or the same level of collectible cash flows from the security is no longer expected. The
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
entire impairment will be included in Other, net within Non-operating Income (Expense) on the Company's Condensed Consolidated Statement of Operations.
Recently Adopted Accounting Standards
On May 3, 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. On January 1, 2022, the Company adopted ASU 2021-04 on a prospective basis, as required by the Standard. There was no financial statement impact upon adoption.
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance. The new standard requires additional disclosures regarding government grants and money contributions. The standard requires disclosures on the nature of the transactions and related accounting policies, including significant terms and conditions, as well as the amounts and specific financial statement line items affected by the transactions. The Company adopted this standard as of January 1, 2022, see Note 3 for additional information on COVID-19 related government assistance the Company has received.
3.    IMPACT OF THE COVID-19 PANDEMIC