Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (May 2016)
26 slides from Allegiant Travel's investor presentation, May 16, 2016
Slide 1: Management Presentation May 2016
Management Presentation May 2016
Slide 2: Forward looking statements
Forward looking statements 2 This presentation as well as oral statements made by officers or directors of Allegiant Travel Company, its advisors and affiliates (collectively or separately, the "Company“) will contain forward- looking statements that are only predictions and involve risks and uncert
Slide 3: Unique business model and results
Unique business model and results Highly resilient and profitable – Profitable last 53 quarters (1) – LTM 1Q16 EBITDA $483.3mm (2) – LTM 1Q16 Return on Capital 25.3%(2) Strong balance sheet – Rated BB and Ba3(3) – Adjusted debt/ EBITDAR 1.4x(2) – $88mm returned to shareholders in 1Q16 • $100 mm
Slide 4: Advantages over the typical carrier
Advantages over the typical carrier 4 Leisure customer – Will travel in all economic conditions – Vacations are valued – price dependent Small/medium cities – Filling a large void – Increasing opportunity - industry restructuring – Diversity of network - minimizes competition Flexibility – Adj
Slide 5: Measured, profitable growth
Measured, profitable growth 5 226 233 296 298 175 200 225 250 275 300 2013 2014 2015 1Q16 Routes 7.89 8.69 10.24 10.68 6.00 7.00 8.00 9.00 10.00 11.00 2013 2014 2015 LTM 1Q16 A S M s - b ill io n s Scheduled ASMs $996 $1,137 $1,262 $1,281 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 2013 2014 2015 L
Slide 6: A very large niche
A very large niche Based on current published schedule through November 15, 2016 344 routes, 85 operating aircraft 95 small/medium cities, 19 leisure destinations 6 Yellow dots – leisure destinations Blue dots – origination cities Large dots - bases
Slide 7: Little competition
Little competition 56 288 Routes w competition Routes wo competition Current competitive landscape Uniquely built to profitably operate in underserved markets 7 Competitors – overlapping routes Legacy carriers 44 Brand / lower cost carriers 6 ULCC carriers 19 Based on current published schedule thro
Slide 8: Low frequency model
Low frequency model 8 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec S y ste m b lock h o u rs/ A C/ d a y 2013 2014 2015 2016E Avg. block hours/AC/day 1 - Peak = peak is defined as 11/23 – 12/1, 12/21 – 1/3, 2/18 – 4/14, 6/3 – 8/18. Remaining is off peak 2 –
Slide 9: Low costs even with low utilization
Low costs even with low utilization 7.8 JBLU 5.5 SAVE 7.4 ALK 5.8 ALGT 5.0 5.5 6.0 6.5 7.0 7.5 8.0 5 6 7 8 9 10 11 12 13 14 CA S M e x f u e l (ce n ts ) Average daily aircraft utilization – LTM (block hours per day) CASM ex fuel vs daily aircraft utilization 9 As of LTM 1Q16, ALGT – Allegiant, JBLU
Slide 10: Airbus fleet count
Airbus 10 Actual and projected fleet count of in service aircraft (based on signed contracts only) – end of period Total fleet includes A320, A319, MD-80 and Boeing 757 Total fleet count reflects assumptions of current market expectations, demand for Allegiant service, aircraft retirements, and is s
Slide 11: Cumulative return to shareholders
Cumulative return to shareholders $17.4 $42.7 $96.5 $98.4 $103.4 $ 1 8 7 .0 $ 3 2 6 .1 $ 4 5 4 .1 $ 5 0 9 .8 $14.9 $53.5 $53.5 $95.3 $157.8 $ 1 9 0 .6 $0 $100 $200 $300 $400 $500 $600 $700 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ m m Share repurchases Dividends 11 $700m returned to shareholder
Slide 12: Existing guidance
2Q16 TRASM (10) to (8)% vs 2Q15 2Q16 CASM ex fuel 4 to 6% vs 2Q15 FY16 CASM ex fuel 0 to 4% vs 2015 2Q16 fixed fee + other revenue $12mm to $14mm FY16 CAPEX $210mm FY16 maintenance per aircraft per month $115 to $125 thousand FY16 ownership per aircraft per month $100 to $110 thousand
Slide 13: Appendix
Appendix — allegrant,
Slide 14: GAAP reconciliation: EBITDA calculations
GAAP reconciliation EBITDA calculations 14 $mm LTM 1Q16 2015 2014 2013 Net Income attributable to Allegiant Travel Co. 227.5 220.4 86.7 92.3 +Total comprehensive income (loss) 0 (.4) 1.2 .1 +Provision for Income Taxes 132.7 126.4 50.8 54.9 +Other Expenses 1 24.7 25.1 20.4 8.5 +Depreciation and Amort
Slide 15: GAAP reconciliation: Return on equity
GAAP reconciliation Return on equity 15 $mm LTM 1Q16 2015 2014 2013 2012 Net Income attributable to Allegiant Travel Co. 227.5 220.4 113.2 92.3 78.6 Mar 2016 Dec 2015 Mar 2015 Dec 2014 Dec 2013 Dec 2012 Total shareholders equity 362.5 350.0 302.4 294.1 377.3 401.7 Return on equity 68% 68% 34% 24% 21
Slide 16: GAAP reconciliation: Return on capital employed
GAAP reconciliation Return on capital employed calculation $mm LTM 1Q16 2015 2014 2013 + Net income attributable to Allegiant Travel Co. 227.5 220.4 113.2 92.3 + Income tax 132.7 126.4 66.8 54.9 + Interest expense 26.9 26.5 21.2 9.5 - Interest income 2.3 1.4 0.8 1.0 384.8 371.9 200.4 155.7 + Interes
Slide 17: GAAP reconciliation: Free cash flow
GAAP reconciliation Free cash flow calculations 17 $mm LTM 1Q16 2015 2014 2013 Cash from operations 362.8 365.4 269.8 196.9 - Cash CAPEX 260.2 252.7 279.4 177.5 = Free cash flow 102.6 112.7 (9.6) 19.4 2014 CAPEX does not include $142m in assumed debt included in the $236.1m SPC Aircraft Acquisitions
Slide 18: GAAP reconciliation: Net debt
GAAP reconciliation Net debt 18 $mm Mar 2016 Dec 2015 Dec 2014 Dec 2013 Current maturities of long term debt (1) 79.8 74.1 53.8 20.2 Long term debt, net of current maturities (1) 571.3 567.6 539.3 214.1 Total debt 1 651.1 641.7 593.1 234.3 Cash and cash equivalents 102.1 87.1 89.6 97.7 Short term in
Slide 19: GAAP reconciliation: Adjustment for special item 2014
GAAP reconciliation Adjustment for special item 19 2014 $mm – except per share amounts Net income as reported 86.3 + Add provision for income taxes, as reported 50.8 Income before income taxes as reported 137.1 + Other expense 20.2 Operating income 157.3 + Boeing 757 fleet write down 43.3 Adjusted o
Slide 20: Revenue components
Revenue components 20 $91.69 $91.30 $78.63 $75.95 $50 $60 $70 $80 $90 2013 2014 2015 LTM 1Q16 Average fare - scheduled service $5.21 $4.56 $4.29 $4.19 $0.00 $2.00 $4.00 $6.00 2013 2014 2015 LTM 1Q16 Average fare - ancillary third party products $40.52 $41.37 $46.43 $46.42 $30.00 $40.00 $50.00 2013 2
Slide 21: LTM 1Q16 cost per passenger
LTM 1Q16 cost per passenger Low cost drivers $27 $23 $30 $34 $10 $15 $11 $13 $10 $4 $9 $14 $24 $21 $54 $44 $20 $24 $29 $38 ALGT SAVE LUV JBLU 21 Source: Company filings Ownership includes depreciation & amortization + aircraft rent Other excludes special items and one-time charges for other carriers
Slide 22: Credit metrics
Credit metrics 16.4% 19.2% 25.6% 25.3% 15.9% 10% 20% 30% 2013 2014 2015 LTM 1Q16 LUV LTM 1Q16 22 Return on capital employed 24.0% 34.0% 68.0% 68.0% 31.1% 10% 20% 30% 40% 50% 60% 70% 80% 2013 2014 2015 LTM 1Q16 LUV LTM 1Q16 Return on equity 23.7 x 13.5 x 17.7 x 18.0 x 39.9 x 10 15 20 25 30 35 40 45 2
Slide 23: Strong cash generation
Strong cash generation $225 $286 $470 $483 $150 $200 $250 $300 $350 $400 $450 $500 2013 2014 2015 LTM 1Q16 $ m m 23 EBITDA $3.6 $4.1 $6.3 $6.3 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 $6.5 2013 2014 2015 LTM 1Q16 $ m m EBITDA per AC Free cash flow $19 -$10 $113 $103 -$25 $0 $25 $50 $75 $100 $125 2013 2014
Slide 24: Sources/uses of cash
Sources/uses of cash $178 $279 $253 $210 $0 $50 $100 $150 $200 $250 $300 2013 2014 2015 2016E * $ m m 24 CAPEX $22.7 $168.8 $67.9 $73.3 $0.0 $50.0 $100.0 $150.0 $200.0 2013 2014 2015 LTM 1Q16 $ m m Debt payments Cash from operations $197 $270 $365 $363 $0 $150 $300 $450 2013 2014 2015 LTM 1Q16 $ m m
Slide 25: Airbus growth will help improve fuel burn
Airbus growth will help improve fuel burn 25 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 2012 2013 2014 2015 LTM 1Q16 Fuel expense/total revenue 1 - As of LTM 1Q16 Fuel has greatest leverage to earnings – Fuel ~ 29% of total operating expense(1) – Airbus aircraft flew 38% of LTM 1Q16 scheduled block hours
Slide 26: Capitalization structure
Capitalization structure Actual 3/31/16 (MM USD) Debt to LTM EBITDAR Rate Maturity LTM EBITDAR 485.1 Secured by AC 24.1 L+2.95% Apr 2018 Secured by AC 107.9 L+3.08% May 2018 Secured by AC 19.6 L+2.95% May 2018 Secured by AC 25.1 L+3.99% Oct 2018 Secured by AC 33.1 L+2.46% Nov 2019 Secured by AC 24.1