Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (May 2012)
33 slides from Allegiant Travel's investor presentation, May 2, 2012
Slide 1: Management Presentation
Management Presentation
Slide 2: Forward looking statements
Forward looking statements This presentation as well as oral staternents 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 uncerta
Slide 3: Unique business model and results
Unique business model and results @ Highly resilient and profitable = | 7 Profitable last 37 quarters “ fectreeuccmer — $138mm EBITDA? LTM 1Q12 . Small cities — LTM Return on Capital 12.1% @) Little competition @ Strong balance sheet — Rated BB- and Ba3 ©) — $369mm unrestricted cash Low cost aircraf
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 Grand Ferks erst og eS >) egies rate @ 5 or city § a, aff @ cng pa . ‘ort Lauderdale ‘Yellow dots — leisure destinations Blue dots — small cities Large dots - bases Based on current published schedule through November 30, 201 181 routes, 62 operating aircraft 68 small cities, 12
Slide 6: Little competition
Little competition Uniquely built to profitably serve small city markets 166 3 . Q y, 15 Competitors — overlapping routes Routes w Routes wo competition competition Frontier —§ Spirit -3 Southwest-3 AirTran f Southwest —3 Hawaiian—1 — Alaska-1 allegiant ~ Tt ur deal
Slide 7: Low cost aircraft
Low cost aircraft @ Owned fleet — 65 owned aircraft @ MD-80 — 59 owned, 54 operating, 58 operating EOY 2012 — $3mm total for purchase + induction — $2.6mm EBITDA/ aircraft LTM 1Q12() — Increasing capacity to 166 seats, 11% increase in seats + 19 166 seat AC Apr 25, still on track for completion EOY
Slide 8: Capacity management
Capacity management Leisure = seasonality Small cities = low frequency?) 8% Avg. block hours/AC/day Weekly market frequency 80.0% 8 sb Peak mOff peak is g 70 60.0% 8 4 2 = 500 B68 2 500% 4 é 3 60 is 40.0% 2 § 2 30.0% 5 % g B86 i“ e 20.0% 60 10.0% ‘a5 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 9: Ancillary revenue — third party products
Ancillary revenue — third party products Ancillary revenue - third party @ Bundled vacation packages products $120.0 $1064 $1427 ™@ Very high margins $100.0) $89.8 £ ss00 — 37% of LTM pre-tax income & g $60.0 @ Wholesale price for hotel & car, #9 $244 $299 $32.4 we manage margin, no inventory #00 ri
Slide 10: Our website is our only store
Our website is our only store . a allegiant ‘rave! ic our deat sian EE ae 24m unique visitors LTM 1Q12 - ~140k visitors per day High conversion -— >4%in1Q12 Low distribution costs — $0.86 advertising/pax Low transaction costs - High debit card usage 89% of 2011 sales were through the site allegiant
Slide 11: Total cost ex fuel per ASM (cents)
Total cost ex fuel per ASM (cents) Excellent cost structure 7.54 6.5 5.5 + Operating cost ex fue/ASM (CASM ex) vs stage length 1 ag iw © aiieen 68 * JeLu 6 87 ALGT SAVE eo 600 700 800 900 1,000 1,100 1,200 Average stage length (miles) (1) ALK is mainline statistics Total cost per ASM (cents) 125 1.5
Slide 12: Best pre-tax margins
Best pre-tax margins 25.0% ALGT 20.0% 15.0% 10.0% 50%. ALK ALK LUVBLU valu 0.0% + 2009 2010 2011 1012 Recession Recovery Runaway High Oil Oil Avg AC in period 43 49 52 57 dace tale $1.90 $2.43 $3.30 $3.46 wie Wy (1) LUV = Southwest Airlines; JELU = JetBlue Airways; SAVE = Spirit Airines (has not yet
Slide 13: Successfully offsetting high fuel prices
Successfully offsetting high fuel prices 1011 1Q12 YoY $ change Scheduled passengers (mm) 1.44 1.70 17.9% PRASM (cents) 8.77 9.04 3.1% TRASM (cents) 12.34 12.64 24% Avg fare — scheduled service $89.00 $94.95 6.7% Avg ancillary - total $36.22 $37.75 4.2% Avg total fare $125.22 $132.70 6.0% Fuel expen
Slide 14: Revenue momentum
Revenue momentum Average fare - total ‘Average fare - ancillary third party $135 $133 products $130 $6.50 $826 $126 $125 $5.18, $126 5600 $120 $16 git $4.50 $110 | si0s + $4.00 : ‘ , 2010-2011 ttt 112 2010-201 att 12 Average fare - scheduled service Average fare - ancillary air-related $96 charges $
Slide 15: Update
757 update @ Domestic US flying — Bellingham, WA to Las Vegas — McAllen, TX to Las Vegas @ Hawaii — Fresno, CAto Honolulu begins 6/30/12 — Las Vegas to Honolulu begins 6/29/12 @ Own 6 aircraft — 4in operation 3Q12 — 6in operation 1Q 2013 @ ETOPS update — Completed all flying requirements a allegiant
Slide 16: 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 — 24 hour hold on reservation at no cost to customer Avg fare — scheduled service Avg fare - ancillary air-related char
Slide 17: Carry on bag fee
Carry on bag fee @ Began charging for bags to be placed in overhead — Bags that fit under the seat are free @ Charge went into effect 4/4/12 — Customers who bought tickets prior to this date not affected @ Fee is less than checking a bag — $35 to purchase at airport — $10 - $30 if purchased in advan
Slide 18: Guidance
Guidance 2Q 12 PRASM (7) to (5)% Schedule currently selling through mid November 2012 Lt Lt ™ 2Q 12 CASM ex fuel (10)% to (8)% M@ 2Q 12 Fixed fee + other revenue $9m to $11m Lt 2012 CAPEX $105m to $115m 2°¢ Quarter 2012 34 Quarter 2012 System departures 8 to 12% 2 to 6% System ASMs 16 to 20% 14 to 1
Slide 19: Appendix
Appendix Ey i — allegiant.
Slide 20: GAAP reconciliation
GAAP reconciliation EBITDA calculations $mm LTM 1012 2011 2010 2009 2008 2007 Net Income $3.9 494 657 76.3 35.4 315 +Provision for Income Taxes: 328 30.1 376 442 19.8 19.2 +Other Expenses 72 59 13 16 7 -36 +Depreciation and Amortization 444 42.0 35.0 296 23.6 16.0 =EBITDA 138.0 127.4 139.6 151.8 79.
Slide 21: GAAP reconciliation
GAAP reconciliation turn on equity $mm LTM 1012 2011 2010 2009 Net Income ($mm) $3.9 494 657 763 Mar 2012 Mar 2011 Dec 2011 Dec 2010 Dec 2009 Total shareholders equity ($mm) 3747 315.6 3615, 2977 292.0 Return on equity 16% 15% 22% ROE = Net income / Avg shareholders equity allegiant ‘Travel is our d
Slide 22: GAAP reconciliation
GAAP reconciliation eturn on capital employed calculatio $mm LTM 1012 2011 2010 2009 + Netincome 83.9 49.4 657 76.3 + Income tax 32.8 30.1 376 44.2 + Interest expense 85 7.2 25 47 - Interest income Le 12 12 28 EBIT 94.0 85.5 104.6 122.7 + Interest income 4:2 1.2 12 28 Tax rate 37.8% 37.9% 364% 36.2%
Slide 23: Growth and pre-tax margin vs fuel
Growth and pre-tax margin vs fuel 60% 4 A0% 5 20% + 0% -20% + 40% + 60% | 002401 aoe aozoe enozor 600201 eo0z02 ooze enozor olozoe olozoe olozor Hioz04 tracts Hove hiozsor zLozOL Scheduled ASMs growth —==PRASM growth = = System fuel price growth allegiant ‘Travel is our deal.
Slide 24: Better equipped to handle higher fuel
Better equipped to handle higher fuel 2008 2011 % change System ASMs (billions) 4A 64 AB% Average aircraft 36 52. A3% 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% Pretax margin 11.0% 10.2% $mm 140 $4.00 430 $127 120 $3.50
Slide 25: Fuel efficiency improvements
Fuel efficiency improvements 63.0 61.0 69.0 $7.0 System ASMs per gallon a4 604 a0 69.2 504 l 58.6 | 88.7 587 58.7 1010 2010 3Q10 4010 1011 2011 3a11 4011 1012 YoY chg — Sys ASMs/gal (0.5)% 0.2% (0.2)% 24% 46% # of 757 ac in svc (end of qtr) 1 1 1 # of 166 seatac in sve (end of qtr) 1 7 v7 allegiant
Slide 26: Capacity changes
Capacity changes Year over year change in scheduled ASMs 30% 25% 24% 22% 20% 17% 17% 159% 14% 14% 14% 20% y 11% 10% 9% 8% 6% 5% 4% 3% 3% 3% 0% 5% 3% -3Y 3% 10% 8% 9% 18% 13% 1Q2010 2Q2010 3Q2010 4Q2010 192011 2Q 2014 39 2014 4Q 2011 1Q2012 2Q2012e 3Q2012e @ Total scheduled ASM growth mSame store ASM
Slide 27: Market management over time
Market management over time 26 20 sla tdeclal ss FP PEEPS EP IEE POF SF Markets added Markets deleted # of markets a 3S e Does not include shifting of 10 markets from Sanford to Orlando International in 1 10 and shifted back to Sanfordin 1Q 11 allegiant ‘Travel is our deal.
Slide 28: 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 B Allegiant entering markets — Q411-Newport
Slide 29: Revenue model
Revenue model , Revenue growth (§mm) @ Scheduled service $900 — Air fare from small cities to SIE eVERUE: leisure destinations $800 $779 @ Ancillary —Air related charges — Unbundled air product $100 $190 @ Ancillary 3rd party products $600 - Hotels, rental cars $500 m@ Fixed fee & Other - Charter fl
Slide 30: Unit revenue gains with growth
Unit revenue gains with growth 40% 35%. 30% 25% 20% 18% 10% 5% 0% 6% 10% 18% 35% 33% 26% 24% 25% 24% 14% 11% 14% | 40 %e10%| | 8% S& SS KN YP wg LEP EE PIP OPES P PEO E g Scheduled ASM growth =PRASM growth 3QL42E scheduled service ASM growth is midpoint of guided range April 2012 and 2G-412E is midp
Slide 31: Seat project economics
166 seat project economics Revenue (actual LTM 112) Average scheduled fare $90.82 Average ancillary fare $36.78 Total scheduled fare $127.60 Assumptions 75% load factor (16 x .75) 12 pax $ per pax fuel ($3.46 gal x 40 gal/dept) $11.53 $ per pax non fuel (inflight, D&A, marketing, etc.) $30.00 Total
Slide 32: Low cost drivers
Low cost drivers LTM 1Q12 cost per passenger Ex fuel cost = $58 Ex fuel cost = $63 Ex fuel cost = $89 Ex fuel cost = ea Fuel cost = $55 Fuel cost= $45, Fuel cost = $56. Fuel cos' Total Allegiant = $113 Total Spirit= $108 Total Southwest = $145 Total JetBlue = fr Other > - = $10 $13 $9 $14 7 $4 $10 v
Slide 33: Credit metrics
Credit metrics Return on capital employed Return on equity 20% 4 18.5% 30% 22.3% 20% 15.0% 15.6% 10% 10% 0% 0% 2010 © 2011: LTM1Q12 LUVLTM 2010 © 2011 LTM 112 LUVLTM 1012 1012 Interest coverage Debt / EBITDA 60> 554x 44x 50 4 40 30 ‘ 20 MEX 185% a 12% 10x 10 * 14 03x Bg 0 >| i= 2010 = 2011 LTM1Q12 L