Sky Harbour Group Corporation · NYSE:SKYH
Sky Harbour — SPAC Merger (January 2022)
48 slides from Sky Harbour's SPAC merger presentation, January 2022
Slide 1: Business Combination with Yellowstone Acquisition Company
AVIATION IN F R AS TR U C TU R E R E A L E S TAT E Business Combination with Yellowstone Acquisition Company (NYSE: YSAC, YSACU and YSACW) ©2021 Sky Harbour Confidential and Proprietary
Slide 2: Mission: Build the First Nationwide Network of Business Aviation Home-Bases
MISSION: BUILD THE FIRST NATIONWIDE NETWORK OF B U S IN E S S AVIATIO N H O ME - B AS E S ©2021 Sky Harbour Confidential and Proprietary Renderings are conceptual and Subject to Change 1
Slide 3: Disclaimer: Forward-looking Statements
DISCLAIMER Forwa rd -looking Sta te me nts This p re s e nta tion ma d e b y Sky Ha rb our LLC (the “Comp a ny,” “we ,” “us ,” or “our”) a nd Ye llows tone Ac q uis ition Comp a ny (“Ye llows tone ”) re la te d to the p rop os e d b us ine s s c omb ina tion b e twe e n the Comp a ny a nd Ye llows t
Slide 4: Disclaimer: Non-GAAP Financial Measures and Projections
DISCLAIMER Non-GAAP Fina nc ia l Me a s ure s a nd Proje c tions This p re s e nta tion, inc lud ing the Illus tra tive Mod e l, inc lud e s c e rta in fina nc ia l me a s ure s not p re s e nte d in a c c ord a nc e with Unite d Sta te s g e ne ra lly a c c e p te d a c c ounting p rinc ip le s (“G
Slide 5: Disclaimer: Participants in the Solicitation
DISCLAIMER Pa rtic ip a nts in the Solic ita tion The Comp a ny, Ye llows tone a nd the ir re s p e c tive d ire c tors a nd e xe c utive offic e rs , othe r me mb e rs of ma na g e me nt a nd e mp loye e s ma y b e c ons id e re d p a rtic ip a nts in the s olic ita tion of p roxie s with re s p e
Slide 6: Sky Harbour – Snapshot
SKY HARBOUR – S N AP S H O T Capitalizing on the long-standing supply and demand imbalance in business aviation infrastructure • Se c ure la nd a t ke y US a irfie ld s Business • De ve lop c a mp us e s of p riva te ha ng a rs • Le a s e ha ng a rs a nd ma na g e c a mp us e s • >30% Re turn on Pro
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Prove n ma rke t op p ortunity with re c e s s ion-re s is ta nt d e ma nd d rive rs 2 Simp le ye t d is rup tive b us ine s s mod e l s up p orte d b y c le a r a d va nta g e s to c us tome rs a nd a irp ort s p ons ors 3 Bus ine s s s truc ture d to s c a le q uic kly in l
Slide 8: Executive Team Matched to Mission
EXECUTIVE TEAM MATCHED TO MISSION Tal Keinan Founder, CEO Francisco Gonzalez Tim Johnson CFO SVP Corp-Dev Alex Saltzman COO Millie Becker Tim Herr Director of Sales VP Development Peter Rusnak Neil Szymczak VP Operations Eric Stolpman VP Development VP Development 7 ©2021 Sky Harbour Confidential an
Slide 9: Finance: Cost of Capital Advantage
FINANCE: COST OF CAPITAL ADVANTAGE Recent successful BOND issue creates meaningful new equity value • Pric e d Aug us t 24, 2021 Investors include: • Tota l Ra is e : $166,340,000 • Nuveen • Tota l Ord e rs : $982,105,000 (5.9X Ove rs ub s c ription) • Blackrock • Fina l Ble nd e d Inte re s t Ra te
Slide 10: Current Transaction Overview
CURRENT TRANSACTION OVERVIEW PIPE and SPAC combination (1) • Bus ine s s c omb ina tion to ra is e e q uity p roc e e d s towa rd the fund ing of a p p roxima te ly Pro Forma Enterprise Value ($MM) Pro Forma Equity Value $722 20 Sky Ha rb our a irp ort ha ng a r c a mp us s ite s Private Activity Bo
Slide 11: Business Aviation Infrastructure: Surging Demand Ripe for a New Business Model
BUSINESS AVIATION INFRASTRUCTURE S U R G IN G D E MAN D R IP E F O R A N E W B U S IN E S S MO D E L ©2021 Sky Harbour Confidential and Proprietary Renderings are conceptual and Subject to Change 10
Slide 12: Sky Harbour's Total Addressable Market Is Growing
SKY HARBOUR’S TOTAL ADDRESSABLE MARKET IS GROWING Cumulative US Business Jet Fleet US business jet fleet grows every year 28,000 34% Increase • Ne t g rowth: ne w a irc ra ft d e live rie s e xc e e d re tire me nts 26,000 • De ma nd for ha ng a r s p a c e (ve rs us tie -d own) is hig he s t a mong
Slide 13: Square Footage Growth Higher Than Aircraft Unit Growth
SQUARE FOOTAGE GROWTH HIGHER THAN AIRCRAFT UNIT GROWTH Cumulative US Business Aircraft Fleet Square Footage Square footage is the real driver of hangar demand 90,000,000 • Ave ra g e ne w a irc ra ft le ng th a nd wing s p a n g row e ve ry ye a r 42% Increase • 27,500,000 s q ua re fe e t of a irp
Slide 14: Hangar Supply Constrained
HANGAR SUPPLY CONSTRAINED Existing hangar infrastructure already insufficient • Ha ng a r oc c up a nc y s ig nific a ntly >100% a t ma jor Biza v hub s • De ma nd g rowing muc h fa s te r tha n s up p ly • Community ha ng a r forma t s ub op tima l for hig h-e nd te na nts CBRE forecasts 2.1MM squa
Slide 15: COVID-Pandemic Fueling Private Aviation Boom
COVID - 1 9 P AN D E MIC F U E LIN G P R IVATE AVIATIO N B O O M TR AN S ITIO N F R O M C O MME R C IAL TO B IZ AV LAR G E LY S E C U LAR BizJet Deliveries to Reach Near 700 in 2021 That number is about 11 percent over 2020… … next year’s total should climb another 12% to about 770… ©2021 Sky Harbou
Slide 16: Business Overview
BUSINESS OVERVIEW ©2021 Sky Harbour Confidential and Proprietary Renderings are conceptual and Subject to Change 15
Slide 17: Sky Harbour – Physical Offering
SKY HARBOUR – P H YS IC AL O F F E R IN G Total Privacy. Uncompromising Quality. Full Suite of Features. • Unparalleled Ownership Experience • Generous Technical Features • Tenant-Exclusive Hangar • No-Foam Fire Suppression • Unfettered Airside Access • High-Volume Air Circulation and Humidity Contr
Slide 18: The Home-Basing Model: A Win for All Stakeholders
THE HOME - BASING MODEL: A WIN FOR ALL STAKEHOLDERS Sky Harbour Tenants Get Airport Sponsors Get • Privacy and Security • Aircraft Value Preservation • High Sponsor Revenues • Efficiency of Operations • No Hangar Rash • Low Environmental Impact • Shortest Time to Wheels-Up • No Foam Dumps • Low Nois
Slide 19: Sky Harbour – Service Offering
S KY H AR B O U R – S E R VIC E O F F E R IN G 24/7 On-Demand Service, Dedicated Exclusively to Sky Harbour Tenants Dedicated Services • Aircraft Towing • Aircraft Fueling • Potable Water No Competition with Transient Traffic • Ice • Lavatory Service • Baggage Handling • DC Ground Power • Cleaning •
Slide 20: Home-Basing Model Fundamentals
HOME - B AS IN G MO D E L F U N D AME N TALS Not an FBO The Fixed Base Operator Model The Home-Basing Solution Model • Two main revenue components: • One main revenue component: • Fuel Sales: > 65% • Hangar Rent: >95% • Fuel drives the business model and provides for banner revenue years (2019) • No
Slide 21: Building the Sky Harbour Portfolio
BUILDING THE SKY HARBOUR PORTFOLIO Leveraging first-mover advantage in an under-invested aviation segment 5 Attractive Unit Target NOI Yield: 12% Economics1,2,3 4 High quality tenant mix includes corporations, charter operators, private owners and government entities Lease Staggered lease dura
Slide 22: Land Acquisition Approach
LAND ACQUISITION APPROACH Land on federally-funded fields may be leased long-term but not privately owned. Fee Simple + Through Unsolicited bid to Sub-lease or RFP Acquisition the Fence (Private Master Planning Airport Sponsor Assignment ownership permitted) EX: EX: EX: FBO chain or EX:
Slide 23: Construction Approach
CONSTRUCTION APPROACH Proprietary prototype design, requiring minimal adaptation to local conditions Minimize s d e ve lop me nt time a nd ris k Cod e c omp lia nc e p re c e d e nt GC RFPs is s ue d with full c ons truc tion d ra wing s Lowe rs c os ts Ce ntra lize d p urc ha s ing Soft
Slide 24: Initially Targeting 50+ Airfields
INITIALLY TARGETING 50+ AIRFIELDS Initial target airfields represent less than 2% of US NPIAS airfields • Firs t 20 s ite s to b e fina nc e d b y me rg e r p roc e e d s a nd b ond is s ua nc e • 6 s ite s c urre ntly in d e ve lop me nt KADS (Dallas) PHASE 1: 11/22 PHASE 2: 6/23 Announced 10/21 So
Slide 25: Finance, Unit Economics and Scalability
FINANCE, UNIT ECONOMICS AND SCALABILITY ©2021 Sky Harbour Confidential and Proprietary Renderings are conceptual and Subject to Change 24
Slide 26: Unit Economics
UNIT ECONOMICS Maximize NOI yield minus cost of debt FIELD DEVELOPMENT COST (PRSF) * SGR – actual $156 OPF – GMP $213 BNA – GMP $179 APA – budget $208 DVT - budget $185 * Hard costs include Owner’s Contingency of 10% before AVERAGE $193 GMP, and 5% after GMP. Total cost includes 5% annual inflation
Slide 27: Scale Economics
SCALE ECONOMICS Cost-of-capital advantage Private Activity Bonds Issued in September 2021 • 33 ye a r fixe d -ra te d e b t • 4.28% Ble nd e d a ll-in Ra te • Sc a la b le a nd inc re a s ing ly e ffic ie nt a s Ob lig a te d Group g rows Assumptions • Ave ra g e a irfie ld d e ve lop me nt c os t p
Slide 28: Long Term Targeting
LONG TERM TARGETING Declining development cost = Improved unit economics and dramatic expansion of target universe • De c lining Cons truc tion Cos t • De c lining Cos t of Ca p ita l KADS (Dallas) PHASE 1: 11/22 PHASE 2: 6/23 Announced 10/21 Source: FAA. National Plan of Integrated Airport Systems.
Slide 29: Framing Sky Harbour's Peer Set
FRAMING SKY HARBOUR’S PEER SET Industrial Real Estate Public Storage FBO(1) Specialty Real Estate (1) Currently all private companies. Signature Aviation transaction completed June 1, 2021. Atlantic Aviation, part of Macquarie Infrastructure Corp., transaction announced June 7, 2021. 28 ©2021 Sky Ha
Slide 30: Peer Set Benchmarking
PEER SET BENCHMARKING Industrial Specialty Public Storage 2026E Pro Formas $122.3 Market Cap $12.1 $29.9 $12.3 $8.0 $4.3 $5.9 $14.5 $4.2 $11.9 $7.7 $0.7 $63.5 PLD REXR STAG LXP TRNO COLD SAFE PSA EXR CUBE LSI NSA SH Enterprise $143.1 $13.8 $6.4 $17.0 $35.9 $14.9 Value $10.1 $5.8 $6.1 $14.0 $10.5 $1.
Slide 31: Valuation Framework: Multiple Analysis versus Benchmarks
VALUATION FRAMEWORK Multiple Analysis versus Benchmarks Industrial Real Estate Specialty Real Estate Public Storage Median Median Median 26.2x 24.7x 24.5x 23.6x 42.8x 51.0x 23.2x 37.9x 36.2x 45.5x 22.0x 35.3x 32.3x 30.8x 35.8x 30.6x 30.3x 26.0x P / FFO per P / AFFO per EV / EBITDA P / FFO per P / AF
Slide 32: Valuation Framework: Discount Methodology to Current Peer Multiples
VALUATION FRAMEWORK Discount Methodology to Current Peer Multiples Company Highlights Valuation Methodologies Against Peers • $722 million fully diluted, post money valuation (1,2) • 2026E AFFO = $64.9mm @ 30x = $1,948mm • Expected issuance of $707 million of PABs inclusive of already • PV at 12.5%
Slide 33: ESG Impact
ESG IMPACT 1 Sky Harbour Hangar Capacity at Target Airports Reduces Repositioning Flight Volume • Lowe r Ca rb on Emis s ions • Re d uc e d Nois e Footp rint 2 Sky Harbour Works with Local Small Businesses and Participates in Disadvantaged Business Programs • Loc a l Ge ne ra l Contra c tors a nd Su
Slide 34: Future Business Opportunities
FUTURE BUSINESS OPPORTUNITIES Sky Harbour is the logical partner for emerging Air Existing and Emerging Aviation Infrastructure Users Mobility and Logistics players – manned and unmanned • Eme rg ing UAM a nd lig ht log is tic s a irc ra ft will like ly re q uire a c c e s s to FAA-re g ula te d g r
Slide 35: Simple, Yet Disruptive; High Growth Sector; Downside Protected
Simple, Yet Disruptive High Growth Sector Downside Protected Inflation Resilient Significant Optionality Right Team ©2021 Sky Harbour Confidential and Proprietary 34
Slide 36: Appendix Slides Follow
AVIATION IN F R AS TR U C TU R E R E A L E S TAT E AP P E N D IX S LID E S F O LLO W ©2021 Sky Harbour Confidential and Proprietary 35
Slide 37: Financial Projections: Detailed Financials
FINANCIAL PROJECTIONS Detailed Financials GAAP Metrics ($ Millions) Projections 1 2021 2022 2023 2024 2025 2026 Total revenues 0.6 4.8 17.6 49.9 103.4 134.4 Airfield operating expense (3.1) (6.7) (11.1) (15.0) (19.0) (22.5) Gross profit (2.5) (2.0) 6.5 34.9 84.3 111.9 Corporate operating expense (6.
Slide 38: Financial Projections: Reconciliation of Non-GAAP Metrics
FINANCIAL PROJECTIONS Reconciliation of non-GAAP metrics ($ Millions) Projections 1 2021 2022 2023 2024 2025 2026 GAAP Operating Income (10.0) (17.1) (14.0) 6.0 45.2 66.1 Plus: Depreciation and amortization 0.4 0.8 2.8 8.7 16.8 22.8 Plus: Share-based compensation 0.5 3.4 5.8 8.3 10.3 10.0 EBITDA (9.
Slide 39: Business Aviation Long-Term Investor-Friendly
BUSINESS AVIATION LONG - TE R M IN VE S TO R - F R IE N D LY Sky Harbour benefits from the same macro drivers that have long attracted sophisticated investors Post-COVID Business Aircraft Training 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2021 Aviation Infrastructure Aviation Servi
Slide 40: Advantages to Sky Harbour Tenants
ADVANTAGES TO SKY HARBOUR TENANTS 1 Exclusive Space Me mb e rs ne ve r c omp romis e on p os itioning a nd ne ve r p a rk outs id e 2 Hangar Rash Virtually Eliminated Airc ra ft is only move d whe n ne e d e d a nd is only ha nd le d b y the d e d ic a te d a nd c e rtifie d Sky Ha rb our line s e r
Slide 41: Advantages to Our Airport Partners (Sponsors)
ADVANTAGES TO OUR AIRPORT PARTNERS (SPONSORS) 1 Direct Revenue • Ad Va lore m ta x re c e ip ts • All te na nts a re b a s e d a irc ra ft • Typ ic a l te na nt is a ne we r a nd la rg e r a irc ra ft 2 Low Impact • Minima l to ne g a tive c ontrib ution to a irp ort nois e footp rint • Minima l to
Slide 42: Business Aircraft Becoming Larger and More Expensive
BUSINESS AIRCRAFT BECOMING LARGER AND MORE EXPENSIVE Owners of high-value aircraft prioritize value-retention, Footprint (ft2) Estimated Value efficiency, security and privacy Falcon 10X ~12,000 • Ha ng a re d a irc ra ft e xp e rie nc e fe we r inc id e nts re la te d to ha ng a r ra s h, $75,000,0
Slide 43: Hangar Layouts: SH16 Single
HANGAR LAYOUTS SH16 Single 120’ Main Hangar 120’ x 100’ 20’ x 33’ 120’ Global 7500 Hangar Door 108’ x 28’ 42 ©2021 Sky Harbour Confidential and Proprietary
Slide 44: Hangar Layouts: SH16 Double
HANGAR LAYOUTS SH16 Double 120’ Hangar Door 110’ x 28’ Hawker 800XP 20’ x 33’ 120’ GIV-SP Main Hangar 120’ x 100’ 43 ©2021 Sky Harbour Confidential and Proprietary
Slide 45: Hangar Layouts: SH16 Double
HANGAR LAYOUTS SH16 Double 120’ Hangar Door 110’ x 28’ 20’ x 33’ 120’ Main Hangar AS350 B3 120’ x 100’ 44 ©2021 Sky Harbour Confidential and Proprietary
Slide 46: Disclaimer: Forward-looking Statements
DISCLAIMER Forwa rd -looking Sta te me nts This p re s e nta tion ma d e b y Sky Ha rb our LLC (the “Comp a ny,” “we ,” “us ,” or “our”) a nd Ye llows tone Ac q uis ition Comp a ny (“Ye llows tone ”) re la te d to the p rop os e d b us ine s s c omb ina tion b e twe e n the Comp a ny a nd Ye llows t
Slide 47: Disclaimer: Non-GAAP Financial Measures and Projections
DISCLAIMER Non-GAAP Fina nc ia l Me a s ure s a nd Proje c tions This p re s e nta tion, inc lud ing the Illus tra tive Mod e l, inc lud e s c e rta in fina nc ia l me a s ure s not p re s e nte d in a c c ord a nc e with Unite d Sta te s g e ne ra lly a c c e p te d a c c ounting p rinc ip le s (“G
Slide 48: Disclaimer: Participants in the Solicitation
DISCLAIMER Pa rtic ip a nts in the Solic ita tion The Comp a ny, Ye llows tone a nd the ir re s p e c tive d ire c tors a nd e xe c utive offic e rs , othe r me mb e rs of ma na g e me nt a nd e mp loye e s ma y b e c ons id e re d p a rtic ip a nts in the s olic ita tion of p roxie s with re s p e