Frontier Group Holdings, Inc. (ULCC)

Staff comment: We note your disclosure indicating that you consider all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash and cash equivalents, although also indicating that “items with maturities greater than three months” that are readily convertible to known amounts of cash (including money market funds and time deposits) are also reported as cash and cash equivalents. As the definition of cash equivalents in FASB ASC 230-10-20 stipulates that “only investments with original maturities of three months or less” qualify under the definition, i.e. short-term, highly liquid investments that are readily convertible to known amounts of cash, and… letter →

Staff comment: We note that you report aircraft lease extensions in each period which impact your accruals for the right-of-use asset and corresponding liability, although which also yield reductions to aircraft rent due to changes in estimates for lease termination costs. Your accounting policy disclosure explains that some leases with initial terms greater than 12 months include rental escalation clauses, renewal options, termination options and/or other items that cause variability and are factored into the determination of lease payments when appropriate, although does not indicate how these assessments are based on or utilize the criteria of exercise being reasonably certain to occur. Please expand… letter →