Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (February 2012)
35 slides from Allegiant Travel's investor presentation, Feb 1, 2012
Slide 1: Management Presentation
Management Presentation February 2012 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 Built to be different — Profitable last 36 quarters () — $127mm EBITDA®) in 2011 — 2011 Return on Capital 15.3% () Leisure customer Small cities Little competition @ Strong balance sheet — Rated BB- and Ba3 ©) — $320mm unrestricted
Slide 4: Leisure customer in small cities
Leisure customer in small cities Taking people where they want to vacation Stimulation of demand - non-stop flights, low prices Prior to ALGT, small cities had few good options Leisure - more resilient than business, proven repeatedly Packages — air + hotels, cars, etc. Variable capacity to match se
Slide 5: Nationwide footprint
Nationwide footprint Yellow dots — leisure destinations Blue dots — small cities Projected through April 30, 2012 Large dots - bases 178 routes, 59 operating aircraft S 7 65 small cities, 11 leisure destinations allegiant
Slide 6: Little competition
Little competition Uniquely built to profitably serve small city markets - 166 12 — allegiant”
Slide 7: Low cost aircraft
Low cost aircraft @ Owned fleet — 63) owned aircraft @ MD-80 — 53 in operating fleet, expect to operate 59 EOY — $3mm total for purchase + induction — $2.4mm EBITDA‘ aircraft 2011) — Increasing capacity to 166 seats, 11% increase in seats + 10 166 seat AC Feb 1, still on track for completion EOY mw
Slide 8: Capacity management
Capacity management Leisure = seasonality Small cities = low frequency a Avg. block hours/AC/day Weekly market frequency 80.0% 18 70.0% =Peak mOff peak 27. 0 $ F 60.0% z es = 50.0% 3 60 3 40.0% & = 30.0% B5s = e 20.0% 5.0 10.0% as 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ox 2x 4% Beorgre
Slide 9: Ancillary revenue — third party products
Ancillary revenue — third party products Ancillary revenue - third party @ Bundled vacation packages products $120.0 $106.4 @ Very high margins g sino _— $89.3 $80.0 — 38% 2011 pre-tax income EB 4 $60.0 m@ Wholesale price for hotel & car, “°° $197 $244 $299 we manage margin, no inventory *°° risk m8
Slide 10: Our website is our only store
Our website is our only store allegiant 7 i = Nothing but 22m unique visitors — 2011 blue skies... — $0.89 advertising/pax H 35% new visits @ 6.6 avg page views @ Avg ~5.5 min on site Hm 89% of 2011 sales were through the site myallegiant allegiant_
Slide 11: Excellent cost structure
Excellent cost structure Total cost ex fuel per ASM (cents) a a a @ a o 5.5 Operating cost ex fuel/ASM (CASM ex) vs stage length o 76 76 * Luv * ALK 68 * JBLU oT ALGT 56 ° give 600 700 800 900 1,000 1,100 1,200 Average stage length (miles) (1) ALK is mainline statistics Total cost per ASM (cents) Op
Slide 12: Best pre-tax margins
Best pre-tax margins 25.0% ALGT 20.0% 15.0% ALGT SAVE 10.0% ALK SAVES 5.0% 0.0% + BLU 5.0% 2008 2009 2010 2011 Runaway Recession Recovery Runaway Oil Oil Avg AC in period 36 43 49 52 Avg scheduled $3.22 $1.90 $2.43 $3.30 service fuel price (1) LUV = Southwest Airlines: JBLU = JetBlue Airways: SAVE =
Slide 13: Better equipped to handle higher fuel
Better equipped to handle higher fuel 2008 2011 % change System ASMs (billions) 44 6.4 46% Average aircraft 36 52 43% Avg fare — scheduled service $84.97 $89.15 5% Avg ancillary - total $29.42 $36.35 24% Avg fare - total $114.40 $125.51 10% Pre-tax margin 11.0% 10.2% $mm140 $4.00 430 $127 120 $3.50
Slide 14: Revenue 4Q11
Revenue 4Q11 4Q10 4Q11 YoY $ change PRASM (cents) 7.98 8.91 12% TRASM (cents) 11.42 12.45 9% Avg fare — scheduled service $81.62 $91.66 12% $10.04 Avg ancillary - total $35.24 $36.39 3% $1.15 Avg total fare $116.86 $128.05 10% $11.19 Fuel expense per passenger $45.16 $54.04 20% $8.88 YoY change in %
Slide 15: Revenue momentum
Revenue momentum Average fare - total $130 $126 $125 $120 $118 $111 $110 $105 $103 $100 2009 2010 2011 Average fare - scheduled service $95 $90 $89 $85 $80 $76 $75 $70 $70 $65 2009 2010 2011 Allrevenue is revenue per scheduled passenger Average fare - ancillary third party products $5.50 $5.18 $5.00
Slide 16: Hawaii update
757 update B® Hawaii — ETOPS application submitted — Anticipate Hawaii service mid-2012 H 1 operating on existing and new routes @ 4 by 2H 2012, 6 by 1H 2013 — allegiant”
Slide 17: DOT compliance
DOT compliance & Web site was modified Jan 25 to meet consumer rule #2 — All fare displays include all taxes and fees — All optional fees are “Opt-in”, requiring customer selection @ Initial version was deployed for 24 hr test Jan 12 — Learnings resulted in web improvements to Jan 25 release — Impac
Slide 18: Guidance
Guidance @ 1012 PRASM +1 to 3% @ 58 MD-80s and 1 757 operating in 1Q 12 @ Schedule currently selling through mid August 2012 @ 1Q 12 CASMex fuel 0% to 2% 1st Quarter 2012 2nd Quarter 2012 System departures 10 to 14% 13 to 17% System ASMs 17 to 21% 22 to 26% Scheduled departures 13 to 17% 16 to 20% S
Slide 19: Appendix
Appendix — allegiant”
Slide 20: GAAP reconciliation
GAAP reconciliation EBITDA calculations $mm 2011 2010 2009 2008 2007 Net Income 49.4 657 76.3 35.4 31.5 +Provision for Income Taxes 30.1 376 44.2 19.8 19.2 +Other Expenses i) 13 16 7 -3.6 +Depreciation and Amortization 420 35.0 296 2a 16.0 =EBITDA 127.4 139.6 151.8 79.4 63.1 Total debt 146.0 28.1 45
Slide 21: GAAP reconciliation
GAAP reconciliation $mm 2011 2010 2009 2008 Net Income ($mm) 49.4 65.7 76.3 35.4 Dec 2011 Dec 2010 Dec 2009 Dec 2008 Dec 2007 Total shareholders equity ($mm) 351.5 2977 292.0 233.9 210.3 Return on equity 15% 22% 29% 16% ROE = Net income / Avg shareholders equity we
Slide 22: GAAP reconciliation
GAAP reconciliation ti capital employed calculatio $mm 2011 2010 2009 2008 + Net income 494 657 76.3 35.4 + Income tax 30.1 376 44.2 19.8 + Interest expense 72 25 47 54 = Interest income 42 12 25 47 EBIT 85.5 104.6 1227 55.9 + Interest income 12 12 25 AT Tax rate 37.9% 36.4% 36.2% 35.9% Numerator 53
Slide 23: History
History @ Current management took control June 2001 m@ MD-80s @ Hotel packages since 2002 @ Pioneered US unbundled airline product starting in 2003 @ Profitable 2 quarters of 2002, every quarter since 2003 # Disciplined, consistent growth 40 ane aru : - iiiiild 0 a— 2 ll 2002 2003 2004 2005 = = 2008
Slide 24: Network growth
Network growth Joyenb sod yesoue jo # oBesony re ° © S fr 6B 6 + < oo 2 8 te a Route growth vs Aircraft growth 180 160 140 21 100 soynoi jo ¥ —Routes —Average aircraft
Slide 25: Capacity changes
Capacity changes Year over year change in scheduled ASMs 30% —_ 25% 24% 21% 20% | 170% 6% 14% 14% 14% 12% 10% 9% 8% 6% 5% A% 3% 3% 3% 0% 5% -3% 3% 10% 8% oe 15% -13% Ast Qtr 2010 2nd Qtr 2010 3rd Qtr 2010 4th Qtr 2010 1st Qtr 2011 2nd Qtr 2011 3rd Qtr 2011 4th Qtr 2011 1st Qtr 2012 2nd Qtr 2012 mTot
Slide 26: AC utilization over time
AC utilization over time 609 Block hours per quarter / AC 600 | 550 | Block hours 500 | 450 | 400 ai Q2 Q3 a4 2009 = 2010 =2011 4 allegiant a
Slide 27: Geographic diversity
Geographic diversity % of total departures 50% 45% 40% 35% 30% 25% 20% 15% 10% 0% —— oi Las Vegas Florida Phoenix Southern California Other = 2008 =2009 =2010 m2011 Florida includes Orlando, St. Petersburg/Tampa, Fort Lauderdale, and Punta Gorda Southern California includes Los Angeles, Long Beach,
Slide 28: Market management over time
Market management over time 25 20 a 3 # of markets iil. | 1Q-2009 2Q-2009 3Q-2009 4Q-2009 10-2010 2Q-2010 3Q-2010 4Q-2010 10-2011 2Q-2011 3Q-2011 4Q-2011 mu Markets added = Markets deleted Does not include shifting of 10 markets from Sanford to Orlando International in 1Q 10 and shifted back to Sanf
Slide 29: Reacting to a changing landscape
Reacting to a changing landscape @ Southwest/AirTran exiting markets — Jan 2012 —Asheville, Atlantic City, Moline, — Mar 2012 — Newport News — Jun 2012 - Knoxville, Bloomington IL, Charleston WV — Aug 2012 -Allentown, Lexington, Harrisburg, White Plains NY H Allegiant entering markets — Q4 11 -Newpo
Slide 30: Credit metrics
Credit metrics Return on capital employed Return on equity 30% 25.0% 40%: 29.0% 20% 18.5% 30% 15.3% 22.3% 20% 15.0% 10% 10% 2.3% 27% 0% Leal 0% —__ 2009 © 2010». 2011- Luv2011 2009 © 2010» .2011._—- Luv.2011 Interest coverage Debt / EBITDA 60 55.4x § 50 5 49x 40. 372x 5 30 3 77x 20 2 12x 10 pes 1) 0
Slide 31: Growth and pre-tax margin vs fuel
Growth and pre-tax margin vs fuel 60% 40% | 20% + 0% -20% + 40% 5 60% | 10-2008 20-2008 30-2008 40-2008 10-2009 20-2009 30-2009 40-2009 10-2010 20-2010 30-2010 40-2010 10-2011 20-2011 30-2011 40-2011 —Scheduled ASMs growth ——PRASM growth — — System fuel price growth allegiant”
Slide 32: Low cost drivers
Low cost drivers 2011 cost per passenger Total Allegiant = $112 Spirit = $107 Southwest= $142 JetBlue = $159 Other 7 $73 Maal $13)- Aircraft ; | & $74 #88 $54 r T 1 ALGT SAVE LUV JBLU @ Fuel ™@ Ownership Maintenance i™i Labor _ Other Source: Company filings Ownership includes depreciation & amortiza
Slide 33: Revenue model
Revenue model , Revenue growth ($mm) @ Scheduled service $800 $779 — Air fare from small cities to Total revenue leisure destinations $700 $664 @ Ancillary —Air related charges we — Unbundled air product $600 ran $180 @ Ancillary 3rd party products $504 — Hotels, rental cars $500 eid ™@ Fixed fee &
Slide 34: Unit revenue gains with growth
Unit revenue gains with growth 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 38% 33% 14% 14% 11% 11% ay 9%410% 9% oat Ss gf Scheduled ASM growth = PRASM growth 10-2012 & 20-2012 scheduled service ASM growth is midpoint of guided range Jan 2012 PRASM is midpoint of guided range alle t
Slide 35: Seat project economics
166 seat project economics Revenue (actual 2011) Average scheduled fare $89.15 Average ancillary fare $36.35 Total scheduled fare $125.51 Assumptions 75% load factor (16 x .75) 12 pax $ per pax fuel ($3.30 gal x 40 gal/dept) $11.00 $ per pax non fuel (inflight, D&A, marketing, etc.) $30.00 Total mar
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