Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of Allegiant Travel Company and its majority-owned operating subsidiaries. The Company's investments in unconsolidated affiliates, which are 50 percent or less owned, are accounted for under the equity method. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications, including those related to the adoption of Accounting Standard Update ("ASU") 2015-03, have been made to the prior period financial statements to conform to 2015 classifications. These reclassifications had no effect on previously reported net income. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements based on events and transactions occurring during the periods reported, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents include investments and interest bearing instruments with maturities of three months or less at the balance sheet date. Such investments are carried at cost which approximates fair value. Restricted Cash Restricted cash represents escrowed funds under fixed fee contracts, and cash collateral against letters of credit required by hotel properties for guaranteed room availability, airports and certain other parties. Accounts Receivable Accounts receivable are carried at face amount which approximates fair value. They consist primarily of amounts due from credit card companies associated with the sale of tickets for future travel, and amounts due related to fixed fee charter agreements. If deemed necessary, the Company records an allowance for doubtful accounts for amounts not expected to be collected. The Company did not record an allowance for doubtful accounts as of December 31, 2015 or 2014 . Investment Securities The Company’s investments in marketable securities are classified as available-for-sale and are reported at fair market value with the net unrealized gain or (loss) reported as a component of accumulated other comprehensive income in shareholders’ equity. Investment securities are classified as cash equivalents, short-term investments and long-term investments based on maturity date as of the balance sheet date. Cash equivalents have maturities of three months or less, short-term investments have maturities of greater than three months but equal to or less than one year, and long-term investments are those with a maturity date greater than one year. As of December 31, 2015 , the Company’s long-term investments consisted of corporate debt securities, government debt securities and municipal debt securities with contractual maturities of less than 24 months. Investment securities consisted of the following (in thousands): As of December 31, 2015 As of December 31, 2014 Net Unrealized Net Unrealized Cost Gains (Losses) Market Value Cost Gains (Losses) Market Value Money market funds $ 781 $ — $ — $ 781 $ 8,377 $ — $ — $ 8,377 Certificates of deposit — — — — 10,049 2 — 10,051 Commercial paper 83,155 — (1 ) 83,154 47,941 3 (4 ) 47,940 Municipal debt securities 52,669 2 (1 ) 52,670 105,933 14 (2 ) 105,945 US Treasury bond 1,607 — (1 ) 1,606 24,028 — (31 ) 23,997 Corporate debt securities 108,485 50 (154 ) 108,381 134,770 1 (106 ) 134,665 Federal agency debt securities 73,783 — (80 ) 73,703 4,711 — (1 ) 4,710 Total $ 320,480 $ 52 $ (237 ) $ 320,295 $ 335,809 $ 20 $ (144 ) $ 335,685 The amortized cost of investment securities sold is determined by the specific identification method with any realized gains or losses reflected in other (income) expense. The Company had minimal realized losses during the years ended December 31, 2015 , 2014 , and 2013 . The Company believes unrealized losses related to debt securities are not other-than-temporary and does not intend to sell these securities prior to amortized cost recoverability. The Company attempts to minimize its concentration risk with regard to its cash, cash equivalents, and investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security, commercial paper, or money market fund. Expendable Parts, Supplies and Fuel Expendable parts, supplies and fuel inventories are valued at cost using the first-in, first-out method. Such inventories are charged to expense as they are used in operations. An obsolescence allowance for expendable parts is accrued based on the estimated lives of corresponding fleet type and salvage values. The allowance for expendable inventories was $4.6 million and $3.0 million at December 31, 2015 and 2014 respectively. Fuel inventory was $3.9 million and $5.5 million at December 31, 2015 and 2014 , respectively. Rotable aircraft parts inventories are included in flight equipment. Software Capitalization The Company capitalizes certain internal and external costs related to the acquisition and development of computer software during the application development stage of projects. Costs incurred during the preliminary and post-implementation stages are expensed as incurred. The Company amortizes these capitalized costs using the straight-line method over the estimated useful life of the software, which typically ranges from three to five years. The Company had unamortized computer software development costs of $38.2 million and $31.8 million as of December 31, 2015 and 2014 , respectively. Amortization expense related to computer software was $10.0 million , $6.7 million and $3.3 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value. Aircraft and engines have an estimated average residual value of 14.7 percent of original cost as of December 31, 2015 ; other property and equipment are assumed to have no residual value. The depreciable lives used for the principal depreciable asset classifications are: Aircraft and related flight equipment: MD83/88 3-9 years Boeing 757-200 2 years Airbus A320 Series 10-15 years Rotable parts 7 years Buildings 25 years Equipment and leasehold improvements 3-7 years Computer hardware and software 3-5 years In estimating the useful lives and residual values of its aircraft, the Company primarily has relied upon actual experience with the same or similar aircraft types, current and projected future market information, and recommendations from other industry sources. Subsequent revisions to these estimates could be caused by changing market prices of the Company’s aircraft, changes in utilization of the aircraft, and other fleet events. These estimates are evaluated each reporting period and adjusted if necessary. Changes in the estimate for useful lives or residual values of the Company’s property and equipment could result in an acceleration of depreciation expense. Interest attributable to funds used to finance the refurbishment of aircraft prior to revenue service is capitalized as an additional cost of the related asset, provided that the refurbishment is extensive or requires an extended period of time to complete, generally longer than 90 days. Interest is capitalized at the Company’s average interest rate on long-term debt and ceases when the asset is ready for service. Leased Aircraft Return Costs The Company has been party to operating lease agreements which contain aircraft return provisions. These provisions require the Company to compensate the lessor based on specific time remaining on certain aircraft and engine components between scheduled maintenance events. A liability associated with returning leased aircraft is accrued when it is probable that a cash payment will be made and that amount is reasonably estimable. Any accrual is based on the time remaining on the lease, planned aircraft usage and other provisions included in the lease agreement, although the actual amount due to any lessor upon return is not known with certainty until lease termination. Two previously leased Airbus A320 series aircraft were purchased in 2014, at which time the lease return condition accrual of $1.4 million as of December 31, 2013 was reversed. As of December 31, 2015 , the Company has no remaining aircraft under lease agreements. Aircraft Maintenance and Repair Costs The Company accounts for non-major maintenance and repair costs incurred under the direct expense method. Under this method, maintenance and repair costs for owned and leased aircraft, excluding major maintenance activities, are charged to operating expenses as incurred. Maintenance and repair costs includes all parts, materials, line maintenance, and non-major maintenance activities required to maintain the Company's multiple fleet types. The Company accounts for major maintenance costs for MD-80 airframes and the related JT8 engines using the direct expense method. Under this method, major maintenance costs are charged to expense as incurred. This method can result in expense volatility between quarterly and annual periods, depending on the number and type of major maintenance activities performed. Scheduled maintenance activities are the most extensive in scope and are primarily based on time and usage intervals, including, but not limited to, airframe and engine overhauls. The Company has not experienced major maintenance events for its Airbus A320 series or 757-200 fleets and as such, has not yet applied a method to account for major maintenance for these aircraft types. Measurement of Impairment of Long-Lived Assets The Company records impairment losses on long-lived assets used in operations, consisting principally of property and equipment, when events or changes in circumstances indicate, in management’s judgment, that the assets might be impaired, and the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets. In making these determinations, the Company utilizes certain assumptions, including, but not limited to: (i) estimated fair market value of the assets; and (ii) estimated future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service for which the asset will be used in operations, and estimated salvage values. For the years ended December 31, 2015 , 2014 and 2013 , the Company incurred impairment losses on spare engine parts of $1.1 million , $3.4 million and $5.3 million , respectively. In the fourth quarter 2014, the Company recorded a non-cash impairment charge of $43.3 million on its fleet of Boeing 757 aircraft, engines, and related assets as a result of its review of fleet value. The review was based on factors such as the Company's ability or intent to operate fleet types through their estimated useful lives, potential changes to the fleet residual values based on changes in market conditions for used aircraft, spare engines and parts, and potential changes to the scheduled revenue network based on competition trends and operational performance. Refer to Note 8 – Fair Value Measurements for further discussion. Revenue Recognition Scheduled service revenue consists of passenger revenue generated from nonstop flights in the Company’s route network, recognized either when the travel-related service or transportation is provided or when the itinerary expires unused. Nonrefundable scheduled itineraries expire on the date of the intended flight, unless the date is extended by notification from the customer in advance. Itineraries sold for transportation not yet used, as well as unexpired credits, are included in air traffic liability. Various taxes and fees, assessed on the sale of tickets to customers, are collected by the Company serving as an agent, and remitted to taxing authorities. These taxes and fees are presented on a net basis in the Company’s consolidated statements of income and recorded as a liability until remitted to the appropriate taxing authority. Fixed fee contract revenue consists of agreements to provide charter service on a year-round and ad hoc basis. Fixed fee contract revenue is recognized when the transportation is provided. Ancillary air-related revenue is generated from fees paid by ticketed passengers and consists of baggage fees, the use of the Company’s website to purchase scheduled service transportation, advance seat assignments, and other services. Revenues from air-related charges are recognized when the transportation is provided if the product is not deemed independent of the original ticket sale. Change and cancellation fees for nonrefundable itineraries are air-related charges deemed independent of the original ticket sale, and are recognized as revenue when the sale occurs. Ancillary revenue is also generated from the sale of third party products such as hotel rooms, rental cars, ticket attractions, and other items. Revenue from the sale of third party products is recognized at the time the product is utilized, such as the time a purchased hotel room is occupied. The Company follows accounting standards for revenue arrangements with multiple deliverables to determine the amount of revenue to be recognized for each element of a bundled sale involving air-related charges and third party products in addition to airfare. Revenue from the sale of third party products is recorded net of amounts paid to wholesale providers, travel agent commissions, and transaction costs. Other revenue is generated from leased out aircraft and flight equipment, and other miscellaneous sources. Lease revenue is recognized pro-rata over the lease term. Advertising Costs Advertising costs are charged to expense in the period incurred. Advertising expense was $12.7 million , $6.0 million and $4.2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Earnings per Share Basic and diluted earnings per share are computed pursuant to the two-class method. Under this method, the Company attributes net income to two classes, common stock and unvested restricted stock awards. Unvested restricted stock awards granted to employees under the Company’s Long-Term Incentive Plan are considered participating securities because they receive non-forfeitable rights to cash dividends at the same rate as common stock. Diluted net income per share is calculated using the more dilutive of two methods. Under both methods, the exercise of employee stock options and stock-settled stock appreciation rights are assumed using the treasury stock method. The assumption of vesting of restricted stock, however, differs as described below: 1. Assume vesting of restricted stock using the treasury stock method. 2. Assume unvested restricted stock awards are not vested, and allocate earnings to common shares and unvested restricted stock awards using the two-class method. For the years ended December 31, 2015 , 2014 and 2013 , the second method above was used in the computation because it was more dilutive than the first method. The following table sets forth the computation of net income per share on a basic and diluted basis for the periods indicated (in thousands, except per share amounts): Year ended December 31, 2015 2014 2013 Basic: Net income attributable to Allegiant Travel Company $ 220,374 $ 86,689 $ 92,273 Less net income allocated to participating securities (961 ) (293 ) (381 ) Net income attributable to common stock $ 219,413 $ 86,396 $ 91,892 Net income per share, basic $ 12.97 $ 4.87 $ 4.85 Weighted-average shares outstanding 16,923 17,729 18,936 Diluted: Net income attributable to Allegiant Travel Company $ 220,374 $ 86,689 $ 92,273 Less net income allocated to participating securities (958 ) (292 ) (378 ) Net income attributable to common stock $ 219,416 $ 86,397 $ 91,895 Net income per share, diluted $ 12.94 $ 4.86 $ 4.82 Weighted-average shares outstanding 16,923 17,729 18,936 Dilutive effect of stock options, restricted stock and stock-settled stock appreciation rights 69 88 154 Adjusted weighted-average shares outstanding under treasury stock method 16,992 17,817 19,090 Participating securities excluded under two-class method (30 ) (35 ) (40 ) Adjusted weighted-average shares outstanding under two-class method 16,962 17,782 19,050 Stock awards outstanding of 28,789 , 75,233 , and 91,028 shares for 2015 , 2014 , and 2013 , respectively, were excluded from the computation of diluted earnings per share as they were antidilutive. Share-Based Compensation The Company accounts for share-based compensation in accordance with accounting standards which require the compensation cost related to share-based payment transactions be recognized in the Company’s consolidated statements of income. The cost is measured at the grant date, based on the calculated fair value of the award using the Black-Scholes option pricing model for stock options and cash-settled SARs, and is remeasured monthly for cash-settled SARs. Cost is based on the closing share price of the Company’s stock on the grant date for restricted stock awards. The cost is recognized as an expense over the employee’s requisite service period, the vesting period of the award, which is generally three years. The Company’s share-based employee compensation plan is more fully discussed in Note 12—Employee Benefit Plans. Income Taxes The Company recognizes deferred income taxes based on the asset and liability method required by accounting standards. Deferred tax assets and liabilities are determined based on the timing differences between book basis for financial reporting purposes and tax basis of the asset and liability and measured using the enacted tax rates. A valuation allowance for deferred tax assets is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company determines the net non-current deferred tax assets or liabilities separately for federal, state, foreign and other local jurisdictions. The Company’s income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities in the jurisdictions where the Company operates. The Company assesses potentially unfavorable outcomes of such examinations based on the criteria set forth in uncertain tax position accounting standards. The accounting standards prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Accounting standards for income taxes utilize a two-step approach for evaluating tax positions. Recognition (Step I) occurs when the Company concludes that a tax position, based on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step II) is only addressed if the position is deemed to be more likely than not to be sustained. Under Step II, the tax benefit is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. The tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period they meet the “more likely than not” standard. If it is subsequently determined that a previously recognized tax position no longer meets the “more likely than not” standard, it is required that the tax position be derecognized. As applicable, the Company will recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, intended to create a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year, to December 15, 2017, for annual and interim periods beginning after that date. Early adoption is also permitted but not before the original effective date of annual periods beginning after December 15, 2016. The Company is evaluating the impact on its financial statements of adopting this new accounting standard and plans to provide additional information regarding its expected financial impact at a later date. In April 2015, the FASB issued ASU 2015-03, which amends existing guidance and requires the presentation of debt issuance costs on the balance sheet as a reduction of the carrying amount of the related debt liability rather than as a deferred charge, effective for fiscal years, and interim periods within those years beginning on or after December 15, 2015 and early adoption is permitted. The Company retrospectively adopted this standard as of December 31, 2015. Debt issuance costs previously reflected on the balance sheet in deposits and other assets, are now reflected as a reduction to long-term debt, in the amount of $4.5 million and $4.3 million as of December 31, 2015 and December 31, 2014, respectively. In November 2015, the FASB issued ASU 2015-17, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet, effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016 and early adoption is permitted. The purpose of the classification change is to simplify the presentation of deferred income taxes on the Consolidated Balance Sheet. The Company has elected to prospectively adopt this accounting principle as of December 31, 2015. Prior periods in the consolidated financial statements have not been retrospectively adjusted. |