Frontier Group Holdings, Inc. · NASDAQ:ULCC
Frontier — Merger or Acquisition (January 2025)
18 slides from Frontier's merger presentation, Jan 29, 2025
Slide 1: Presentation to Spirit January 2025
Presentation to Spirit January 2025
Slide 2: Frontier's proposal ensures superior economics, certainty, and speed for Spirit's stakeholders
Frontier’s proposal ensures superior economics, certainty, and speed for Spirit’s stakeholders relative to the Spirit standalone plan Stronger, More Competitive Airline ïƒ~ Transaction with Frontier creates America’s first low-cost carrier with sufficient scale to compete with the Big Fourïƒ~ Comple
Slide 3: Strategic Rationale
• Compelling industrial logic • Creates the first formidable low-cost challenger to the Big Four Strategic • Combination benefits all stakeholders Rationale
Slide 4: Compelling Proposal to Acquire Spirit
Compelling Proposal to Acquire Spirit To Create America’s First At-Scale, Low-Cost Competitor to Big Four Creating a Stronger Providing More Airline with Long- Offering More Low Delivering Value for Stable Career Significant Synergy Term Viability to Fares and Premium Financial Prospects for Team Po
Slide 5: Stronger Airline with Long-Term Viability to Compete Against Big Four
Stronger Airline with Long-Term Viability to Compete Against Big Four 2023 Available Seat Miles Consumers Win: Low Fares with Premium Options 5th largest U.S. airline, growing to 100M annual passengers and 400+ aircraft within a few yearsïƒ~ Provides more low fares to more consumers, enabling billio
Slide 6: Benefits for Consumers, Communities and Team Members
• Offers more low fares to more consumers across a meaningfully increased presence in the U.S., offering significant network connections • Creates thousands of new markets and enables customers to save billions compared to prices Consumers & charged by the Big Four Communities • Improves loyalty and
Slide 7: Comparing the Plans
• Across any reasonable set of assumptions, Frontier’s alternative provides more value to Spirit’s stakeholders • Significant chance of impairment for Spirit stakeholders under standalone plan at more reasonable valuation assumptions Comparing the Plans • Frontier’s alternative provides value to the
Slide 8: Spirit Standalone Restructuring vs Frontier Proposal
($ in millions) Spirit Standalone Restructuring Frontier Proposal Creditor Consideration Exit Secured Notes $840 $400 11.0% Cash / 8.0% Cash + 4.0% PIK Coupon 11.0% Cash / 8.0% Cash + 4.0% PIK (specifics to be discussed) % Ownership 100% of Spirit 19.0% of PF Frontier + Spirit Pro Forma Entity Spiri
Slide 9: Spirit RSA plan recovery rates based on higher end of standalone valuation
Spirit RSA plan recovery rates are based on the higher end of standalone valuation analysis as disclosed in Chapter 11 Plan of Reorganization and indicates potential debt impairment below 5.9x EBITDAR multiple ($ in millions) Spirit RSA Valuation Ranges Based on Perella Weinberg’s Fairness Opinion D
Slide 10: Frontier Proposal creates significantly greater value than Spirit Standalone Restructuring Plan
At the same valuation multiples as Spirit RSA analysis; Frontier Proposal creates significantly greater value than Spirit Standalone Restructuring Plan ($ in millions); FY26 EBITDAR Multiples Spirit Standalone Restructuring Frontier Proposal (Excluding Synergies) As of 02/28/2025, $840mm Exit Secure
Slide 11: Frontier Proposal provides more total value to stakeholders under any valuation multiple
Frontier Proposal provides more total value to stakeholders under any valuation multiple ($ in millions) Total Value to Stakeholders (Senior Secured Notes + Convertible Notes + Common Equity) Spirit RSA Frontier Proposal (Excl. Synergies) Frontier Proposal (Incl. Synergies) $2,901 $400mm Exit Secure
Slide 12: Analysis Based on Analyst Estimates
• Even using conservative estimates, the Frontier proposal provides significantly more value than the standalone plan • Net leverage at emergence is 4.2x less for the combined company Analysis than standalone (8.9x Standalone vs. 4.7x Pro Forma) Based on Analyst • Noteholders have potential to Estim
Slide 13: Frontier Proposal creates greater value under more conservative analyst estimates
Even under more conservative analyst estimates, the Frontier Proposal creates significantly greater value than Spirit Standalone Restructuring Plan in almost every scenario ($ in millions); FY26 EBITDAR Multiples Spirit Standalone Restructuring Frontier Proposal (Incl. $600mm of Synergies) As of 02/
Slide 14: Frontier Proposal provides more total value except in unlikely no-synergy scenario
Frontier Proposal provides more total value to stakeholders except in the unlikely scenario where no synergies are realized and pro forma valuation multiple is greater than 6.1x ($ in millions) Total Value to Stakeholders (Senior Secured Notes + Convertible Notes + Common Equity) Spirit RSA Frontier
Slide 15: Significant Synergy Potential
• Assumed synergies of $600mm is a conservative metric compared to credible industry consultants’ estimates Significant • Net present value of synergies from combination forecast to be ~$5.7bn Synergy based on industry consultants’ Potential assumptions
Slide 16: Net Present Value of Expected Synergies
($ in millions) Net Present Value of Expected Synergies Reflects Industry Consultants’ Estimates, Frontier Proposal Analysis Based on Conservative Synergy Estimate of $600mm 2H 2025E 2026E 2027E 2028E Terminal Year (+) Revenue Synergies (EBIT Contribution) $90 $310 $535 $770 $770 (+) Cost Synergies
Slide 17: Next Steps
• Minimal confirmatory due diligence required • Transaction can proceed towards an expedited announcement Next Steps
Slide 18: Expedited due diligence process and key diligence items
• Given extensive diligence conducted to date, Frontier envisions an expedited due diligence process that may be completed in approximately 5-10 days • Key diligence items include: – Sales performance relative to plan – Confirmation of latest Pratt & Whitney agreement – Updated 2-year cash flow fore
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