Slide 1: Proposed Acquisition of ExpressJet
August 4, 2010 Proposed Acquisition of
Slide 2: Forward Looking Statements
Forward Looking Statements In addition to historical information, this presentation contains forward-looking statements. SkyWest, Inc. (“SkyWest”) may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
Slide 3: Introduction
Introduction On August 3, 2010 we executed an agreement to acquire ExpressJet for $6.75 per share or approximately $133 million (after giving effect to shares of ExpressJet owned by Atlantic Southeast). This transaction is made possible by the quality of the ExpressJet operations and the front-line
Slide 4: Summary Terms
Summary Terms ExpressJet stockholders will receive $6.75 per share in cash consideration post-closing. No financing contingency – SkyWest intends to fund the acquisition purchase price out of existing cash. SkyWest will retain ExpressJet’s cash balance of approximately $96 million (including restric
Slide 5: We Have Continental's Support
We Have Continental’s Support Continental accounts for approximately 86% of ExpressJet’s current block hours Continental has consented to ownership change The proposed Continental contract features... 206 aircraft under typical “fixed-fee” contract terms 10 year contract term 5 years of rate protect
Slide 6: About ExpressJet
About ExpressJet Headquarters: Houston Aircraft: 244 Embraer regional jets Employees: approximately 5,700 NYSE symbol: XJT 52-week stock price range: $1.35 - $5.23 Estimated 2010 revenue: $786 million (1) 3/31/10 book value per share: $9.39 3/31/10 net cash value per share: $2.61 Note: 1.6/02/10 ind
Slide 7: About ExpressJet (cont.)
About ExpressJet (cont.) Current Fleet 206 aircraft flying under fixed fee contract 32 aircraft flying under fixed fee contract 6 aircraft operated for charter customers 244 Total aircraft All ExpressJet aircraft are either Embraer ERJ-145s or ERJ-145XRs. ExpressJet is the largest operator of this f
Slide 8: About ExpressJet (cont.)
About ExpressJet (cont.) ExpressJet provides the overwhelming majority of regional passenger feed at Continental’s hubs in Houston, Newark and Cleveland. Continental’s market share in these airports, including ExpressJet and other Continental-controlled capacity, identifies them as “fortress hubs” a
Slide 9: About ExpressJet (cont.) Labor Groups
About ExpressJet (cont.) Group Approx Employees Representative Contract Amendable Date Notes Pilots 2,100 ALPA Dec. 2010 ALPA already represents Atlantic Southeast pilots Mechanics 900 Teamsters Aug. 2009 Flight Attendants 1,000 IAM Aug. 2010 Dispatchers 100 Transport Workers July 2009 Production Wo
Slide 10: The Combined Entity – The Fleet
The Combined Entity – The Fleet Fleet Data Totals Embraer120s 48 48 CRJ-200s 140 112 252 CRJ-700s 83 38 121 CRJ-900s 21 10 31 ERJ-145s 244 244 Totals 292 160 244 696 SkyWest Group will be the world’s largest operator of both Bombardier and Embraer aircraft. 10
Slide 11: The Combined Entity – Diversified Flying Fleet
The Combined Entity – Diversified Flying Fleet Diversification SkyWest will be the largest provider of regional passenger feed to each of CO, DL and UA. Today With ExpressJet 11 Continental 30% United 34% Delta 35% Other 2% Other 2%
Slide 12: The Combined Entity – The Network
The Combined Entity – The Network 12
Slide 13: Acquisition Thesis
Acquisition Thesis Continental Positioning Financial Benefits Cost Competitiveness Gain the benefits of incumbency as Continental’s main regional partner gain inside track to fly the aircraft that will replace Continental’s existing 50-seat jets upside possible if Continental gains “scope relief” an
Slide 14: Creating Competitive Advantage at SKYW
Creating Competitive Advantage at SKYW The ExpressJet deal advances SkyWest’s broader strategic goal of differentiating itself from other regional capacity providers and changing the terms of trade in its market in a way that is responsive to the preferences of its network customers. SkyWest’s tangi
Slide 15: Timeline
Timeline The integration benefits take time to implement, but we believe they will be worth the wait. Integration Planning Pre-SOC integration benefits implemented Post-SOC synergies implemented Sign merger agreement File HSR notice Proxy mailed to XJT holders XJT shareholder approval Closing SOC ex
Slide 16: Integration Plan – Key Elements
Integration Plan – Key Elements We intend to integrate ExpressJet's operations in Atlantic Southeast’s operations and move to combine carriers under a single FAA operating certificate within 12-18 months after closing. We have formed a form Post Merger Integration (PMI) Office and a Single Operating
Slide 17: Financial Impact
Financial Impact If we meet our integration plan goals, we believe the acquisition will result in $0.45 to $0.50 per share of annual EPS benefit once pre-SOC and post-SOC synergies are fully realized. Cash flow contribution should be immediately positive and will increase meaningfully as cost saving
Slide 18: What Stays the Same at SkyWest
What Stays the Same at SkyWest Superior safety and customer service culture Best balance sheet in the industry, with approximately $800 million of cash post-deal Commitment to low costs Aggressive pursuit of organic growth opportunities Focus on shareholder wealth creation: no shares issued in this
Slide 19: Proposed Acquisition of ExpressJet
August 4, 2010 Proposed Acquisition of