Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (May 2013)
29 slides from Allegiant Travel's investor presentation, May 16, 2013
Slide 1: Management Presentation May 2013
Management Presentation May 2013 we — allegiant_,
Slide 2: Forward looking statements
Forward looking statements 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 uncertai
Slide 3: Unique business model and results
Unique business model and results ® Highly resilient and profitable — Profitable last 41 quarters () Teisureleustomer — $211mm EBITDA® LTM 1Q13 — LTM Return on Capital 16.9% () Small cities Little competition @ Strong balance sheet — Rated BB- and Ba3 ©) — $432mm unrestricted cash (4) Low cost aircr
Slide 4: Nationwide footprint
Nationwide footprint Honolut cD, Maui Ses ‘ort Lauderdale Yellow dots — leisure destinations Blue dots — small cities Large dots - bases Based on current published schedule through October 29, 2013 203 routes, 61 operating aircraft 75 small cities, 14 leisure destinations allegiant
Slide 5: Continuous growth
Continuous growth # of routes 200 190 180 170 160 160 140 130 120 110 100 195 rad 80 18 70 60 4H of aircraft 55 50 45 40 2009 2010 2011 2012 2013E, 2014E 2015E mmm Routes —@-Aircraft Above data represents values at end of period
Slide 6: International service
International service) B@ Late 2013 / early 2014 H Small cities to Las Vegas / Orlando @ Destination markets — Cancun @ Automation - payment, taxes H Bilingual capabilities - website, call center, inflight & stations @ Regulatory @ A319 1—In planning stages. Implementation of service subject to vari
Slide 7: Little competition
Little competition Uniquely built to profitably serve small city markets 186 17 rontier ~ 1 Spirit 1 Routes w fe: competition competition Hawaiian = Alaska~ 3 ni allegiant ja nt published schedule through Oct 29, 2013 g enh
Slide 8: Changing competitive landscape
Changing competitive landscape @ Mergers — rationalizing capacity — Southwest/AirTran — rationalize markets + Operate in 10 markets that they left, 4 of which began after their exit — Delta/Northwest — rationalize hubs + Memphis & Cincinnati —- 40% & 60% less seats than in 2007 — American/US Airways
Slide 9: Excellent cost structure
Excellent cost structure Total cost ex fuel per ASM (cents) Operating cost ex fuel/ASM (CASM ex) vs stage length Operating cost/ASM (CASM) vs stage length 85 + 80 13.5 LUV + tiv of 75 | ais, 25 TA 7 * sBLU g 2) oft, £ Se g15- aaah 655 3 Be 6.0 = & * SAVE 2 105 : 10.3 55 ALGT® , 10.1 5 A 10 SAVE *ALG
Slide 10: Aircraft fuel
Aircraft fuel Converted MD-80s to 166 seats — Improves ASMs per gallon & Growing with Airbus aircraft — Airbus is at least 15% more fuel efficient “) than MD-80 ASMs per gallon Operating margin 25% 1 91.9% 673 19.2% = 630 ay . 15.8% 440% 159% 60.00 | 583 589 591 : py 10% . [| | | i . | [| | | | 50.0
Slide 11: Staying profitable in small cities
Staying profitable in small cities System block hours/AC/day hoe 2H 7 oO NN @ Leisure = seasonality Avg. block hours/AC/day Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec —2011 2012. —2013E 2011 2012 2013E Avg Sched AC® 80 5B 68 1 -Peak = sample peak travel time from week of June 11 — Aug 5, 2012 —
Slide 12: Matching capacity to demand
Matching capacity to demand @ Peak day revenue premium @ Not scheduled for business travel - Less of a threat to competition - Little competitive response # Lowcostassets = flexibility - Maintain flexibility with Airbus 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Flights per day from Las Vegas — based o
Slide 13: Low cost aircraft
Low cost aircraft MD-80 757 | A319 A320 Depreciation/amortization or rent $65 $100 $75 - $150 Seats 166 223 156 177 Gallons per block hour - 2012 950 1,100 725 — 780%) Block hours per departure — 2012 2.4 3.6 % of 2012 scheduled departures 97% 3% % of total aircraft - EOY 2014 2) 73% 9% 5% 13% % of
Slide 14: Ancillary air related fees
Ancillary air related fees H@ Carry on bag fee — introduced April 2012 — 1Q13 total bag fees per passenger +93% YoY @ Manage existing fees — 1Q13 seat fee per passenger +24% YoY @ New products — loyalty program, co-branded credit card — Expected 2nd half of 2013 Avg fare — ancillary air related Bus
Slide 15: Ancillary revenue — third party products
Ancillary revenue — third party products Ancillary revenue - 34 party @ Bundled vacation packages iiss 1200 $106.4 $100.0 $80.0 . $60.0 @ Wholesale price for hotel & car, we soo manage margin, no inventory risk $20.0 $0.0 $119.0 $120.5 @ Very high margins — 21% of LTM 1Q13 pre-tax income USD mm 2010
Slide 16: Our website is our only store
Our website is our only store 29mm unique visitors in 2012 ‘Say GOODBYE to winter and HELLO to hot travel deals! Low acquisition costs Low transaction costs - High debit card usage — Debit discount 94% of 1Q13 sales were through the site allegiant ‘Travel is our deal.
Slide 17: Best pre-tax margins
Best pre-tax margins 25.0% =ALGT @SAVE LUV 22% 20.0% 16% 15% 15.0% | 14% 14% 4394 12% ” 11% 11% = 11% 10% 10.0% 6% 5.0% 4% Ls 4% 4% 3% fo 12% 2% 0% 0.0% 2007 2008 2009 2010 2011 2012 LTM 1013 Runaway Runaway Slow growth “Normal” Oil Recession Recovery Oil High energy LUV = Southwest Airlines; SAVE =
Slide 18: Appendix
Appendix — allegiant”
Slide 19: GAAP reconciliation
GAAP reconciliation EBI $mm LTM 1013 2012 2011 2010 2009 2008 Net Income 888 786 49.4 657 76.3 354 +Provision for Income Taxes 52.1 46.2 30.1 376 44.2 19.8 +Other Expenses 79 78 59 13 16 7 +Depreciation and Amortization 624 575 42.0 35.0 296 23.5 =EBITDA 211.2 190.1 127.4 139.6 151.8 79.4 Total debt
Slide 20: GAAP reconciliation
GAAP reconciliation Return on equity $mm LTM 1013 2012 2011 2010 2009 Net Income ($mm) 888 786 494 65.7 76.3 Mar 2013 Mar 2012 Dec 2012 Dec2011 Dec 2010 Dec 2009 Total shareholders equity ($mm) 410.9 3747 400.5 351.5 2977 292.0 Return on equity 23% 21% 15% 22% ROE = Net income / Avg shareholders equ
Slide 21: GAAP reconciliation
GAAP reconciliation ti capital employed calculatio $mm LTM 1013 2012 2011 2010 + Net income 888 786 49.4 657 + Income tax 52.1 46.2 30.1 376 + Interest expense 89 87 72 25 = Interest income 10 10 12 12 EBIT 148.8 132.5 85.5 104.6 + Interest income 1.0 1.0 12 12 Tax rate 37.0% 37.1% 37.9% 36.4% Numer
Slide 22: GAAP reconciliation
GAAP reconciliation Free cash flow calculations $mm LTM 1013 2012 2011 2010 Cash from operations 2017 176.8 129.9 98.0 ~ CAPEX 86.6 105.1 88.0 98.5 = Free cash flow 115.1 717 419 (0.5) allegiant”
Slide 23: GAAP reconciliation
GAAP reconciliation Net debt $mm Mar 2013 Dec2012. Dec 2011 += Dec. 2010 Current maturities of long term debt 11.9 16 79 165 Long term debt, net of current maturities 136.4 139.2 138.2 16 Total debt 148.0 1508 146.1 28.1 Cash and cash equivalents 116.6 89.6 150.7 113.3 Short term investments 2847 23
Slide 24: Low cost drivers
Low cost drivers LTM 1Q13 cost per passenger Ex fuel cost = $58 Ex fuel cost = $66 Ex fuel cost = $94 Ex fuel cost = $97 Fuel cost = $54 Fuel cost = $45, Fuel cost = $55 Total Allegiant = $112 Total Spirit= $111 Total Southwest = $149 Other a $16 Aircraft ALGT SAVE LUV JBLU @ Fuel ™@ Ownership Maint
Slide 25: Revenue momentum
Revenue momentum $150 $145 $140 $135 $130 $125 $120 $115 $110 $105 $100 $95 $90 $85 $80 $75 $70 Average fare - total $130 $126 $111 $133, $145 2010 2011-2012 Average fare - scheduled service $89 $89. $76 $95 $98 2010 2011-2012 1012 1013 Allrevenue is revenue per scheduled passenger Average fare - an
Slide 26: Better equipped to handle higher fuel
Better equipped to handle higher fuel 2008 2012 % change System ASMs (billions) 44 7.5: 71% Average # of aircraft 36 60 67% Avg fare — scheduled service $84.97 $88.90 5% Avg ancillary - total $29.43 $41.20 40% Avg fare - total $114.40 $130.10 14% Pre-tax margin 11.0% 13.7% $mm 215 $4.50 $4.06 195 $1
Slide 27: Strong cash generation
Strong cash generation Free cash flow $125 $115 $100 $75 E $50 $42 ” $25 $72 $0 2010 2011 2012 LTM S26 1013 $225 ERTS $211 $200 $190 - S175 = $1505 $140 $125 $100 + $127 2010 2011 2012 LTM 1013 See reconciliation tables Netdebt iy 2010 2011 2012 1013 $0 $75 $mm -$150 | ($122) (8173) 8225 ($202) -830
Slide 28: Credit metrics
Credit metrics Return on capital employed Return on equity 20% 16.9% 30% 15.3% 15.6% 21.0% 23.0% 20% 40% 15.0% a 3% 10% l] ae 4% 0% 0% + 2011 2012 LTM 1Q13 = LT 2011 2012) LTM1Q13 intl LT™ 1013 AIS: Interest coverage Debt / EBITDA 25 ariox: AST 4 35x 20 177% 3 15 11.5% 2 10 12x 5 1 p 08x 07x ‘i i |
Slide 29: Existing guidance
Existing guidance mM 2013 PRASM (9) to (7)% B 2Q13 TRASM (3.5) to (1.5)% @ 2Q13 CASM ex fuel 5 to 7% @ FY13 CASM ex fuel 1 to 5% M 2Q13 Fixed fee + other revenue $2mm to $4mm m FY13 CAPEX $160mm to $170mm 24 Quarter 2013 3° Quarter 2013 Full year 2013 System departures (7) to (3)% (12) to (8)% Syste