Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (November 2011)
36 slides from Allegiant Travel's investor presentation, Nov 15, 2011
Slide 1: Management Presentation
Management Presentation 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 uncertain
Slide 3: Unique business model and results
Unique business model and results @ Highly resilient and profitable — Profitable last 35 quarters (") 5 Leisure customer — $126mm LTM EBITDA 2) — LTMReturm on Capital 15.7% (2) Small cities Low frequency/variable capacity ™@ Strong balance sheet — Rated BB- and Ba3 9) Low cost aircraft — $303mm unre
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 m@ Packages — air + hotels, cars, etc. ™ Variable capacit
Slide 5: Nationwide footprint
Nationwide footprint ‘Yelow dots — leisure destinations Bue dete ~ sal cles Projected through December 31, 2011 —— 170 routes, 53 operating aircraft — 64 small cities, 11 leisure destinations allegia :
Slide 6: Capacity management
Capacity management Leisure = seasonality Small cities = low frequency eo Avg. block hours/AC/day Weekly market frequency 200% 75 7am Peak MOff peak gre coo $ 8 2 8 ae Fam 360 3 00% 5 . i 5 300% Ss * 200% 50 100% : L van Feb Mar Apr May dun Jul Aug Sep Oc Nov Dee 00% a0 | one real gig tmp we allegia
Slide 7: Low cost aircraft
Low cost aircraft @ Owned fleet — 63‘ owned aircraft, only 2 on operating leases m= MD-80 — 52 in operating fleet, 8 more in the pipeline — $3mm total for purchase + induction - $2.5mm EBITDA/ aircraft LTM 3Q11(2) — Increasing capacity to 166 seats, 11% increase in seats m 757 — One in operating fle
Slide 8: Little competition
Little competition Uniquely built to profitably serve these markets
Slide 9: Ancillary revenue — third party products
Ancillary revenue — third party products Ancillary revenue - third party @ Bundled vacation packages i000 products @ Very high margins se00 — $83.4 — 35% LTM pre-tax income $00. ooo sma — $102mm gross revenue LTM E $700 3 $60.0 @ Wholesale price for hotel & car, we manage margin, no inventory ‘°° ri
Slide 10: Our website is our only store
Our website is our only store allegiant Travel is our deal” @ 21mm unique visitors (last 12 months) ‘Book Your Travel Deal m™ 34% new visits ™ 6.5 average page views m ~5.5 min onsite We pledge the ™ 89% of YTD 2011 sales best travel deals. were through the site allegiant. "Travel ls our deal,
Slide 11: Excellent cost structure
Excellent cost structure Operating cost ex fuel/ASM (CASM ex) vs stage length Operating cost/ASM (CASM) vs stage length 8 12.5 76 76 2 0 [20 ° 78 uuv oa tov 2 8 gis 14 H z oad, 27 = g 68 3 1 #10 : * salu : |, 108 welu Bes g105 ALGT i 3 3 ® 10 8 9s 56 95 ALGT save * save 85 9 600 700 800 900 1,000 1,
Slide 12: Best pre-tax margins
Best pre-tax margins 250% Auer 200% act 150% aver a ALCr, Ak 100% ALK ww Ave aK sew 50% : saw » rau Ww a 00% ivy 50% 2008 2009 2010 L™ 2011 Runaway Recession Recovery Runaway Oil oil Avg AC in period 36 2 49 52 | $1.90 $2.43 $3.13 (1) LUV = Southwest tines; JBLU = JetBe Aways; SAVE = Spit Aitines, A
Slide 13: Better equipped to handle higher fuel
Better equipped to handle higher fuel YTD 2008 YTD 2011 % change ‘System ASMSs (billions) 3.40 4.79 41% Average aircraft 36.1 514 43% ‘Avg fare ~ scheduled service $85.59 $88.36 3% ‘Avg ancillary - total $28.34 $36.34 28% ‘Avg fare - total $113.93 $124.70 10% Pre-tax margin 7.0% 10.4% Smmm20 $4.00 5
Slide 14: Revenue momentum
Revenue momentum ‘Average fare - total Average fare - ancillary third party, $190 products 125 3550 ss s ss27 s120 3500 ons sm 450 soe $438 s110 pid s4ot 3400 stos $103 | | so 350 2092010 YTD2010 YTD 2011 2000 2010 YTO 2010 YTD 2011 ‘Average fare - scheduled service Average fare - ancillary alr-reta
Slide 15: Revenue 3Q11
Revenue 3Q11 3Q10 311 YoY $ change PRASM (cents) 6.89 8.58 25% TRASM (cents) 10.20 12.19 20% Avg fare — scheduled service $69.99 $84.94 21% $14.95 Avg ancillary - total $33.66 $35.69 6% $2.03 Avg total fare $103.65 $120.63 16% $16.98 Fuel expense per passenger $40.07 $53.28 33% $13.21 YoY change in
Slide 16: Capacity changes
Capacity changes Year over year change in scheduled ASMs 20% 25% aa 17% 7 4% 7 15% 13% $e Qte2010 And Ot 2010 Sed te 2OIO 4th Qte2OIO Tek Ote2OIT Ind Qtr 2011 Sed Qte2011 sth atr2011 state 2012 "Total scheduled ASM growth = Same store ASM growth |ASMs - avaliable seat miles ‘Scheduled ASM growth in
Slide 17: Network growth
Network growth Route growth vs Aircraft growth H 140 458 g ‘ 2120 ws i i : 2 100 os 8 H 80 30 PSEEEEESESEBESSEESLSS POPP PS PSS Routes. —Average aircraft — allegiant
Slide 18: Network update
Network update ™@ 18 new routes starting in 2H 2011 — 12 routes — “connect the dots” — 6 routes new cities — 757 routes — Southwest/AirTran network changes @ 4Q11 growth driven by new routes — 2% growth same store sales — 70% of new ASMs come from new cities or connecting the dots @ Utilization - 4Q
Slide 19: Fleet update
Fleet update @ MD-80 fleet —- Status of 166 seat project + Approximately 10 by YE 2011 — Remaining four aircraft coming out of storage * Inservice by YE 2012, 59 MD-80s @ 757 fleet — Hawaii + ETOPS application submitted + Anticipate Hawaii service mid-2012 - 1 operating on existing and new routes —
Slide 20: Guidance
Guidance @ 4Q 11 PRASM +11 to 13% @ 52 MD-80s and 1 757 operating in 4Q 11 ™@ Schedule currently selling through mid May 2012 ™@ 2012 CASM ex fuel (5)% to (10)% 4 Quarter 2011 1st Quarter 2012 System departures 5 to 9% 8 to 12% System ASMs 6 to 10% 13 to 17% Scheduled departures 2 to 6% 10 to 14% Sc
Slide 21: Projected growth - scheduled ASMs
Projected growth - scheduled ASMs @ FY 2011 ~0to+4% m@ FY 2012 ~ +20 to 25% — 166 seat upgrade to be completed 4Q12 - 8 additional MD-80s phased in during year - 4757 operating m@ FY 2013 ~ +15 to 20% — Full year of 166 seat aircraft + 6 757 operating m@ FY 2014 ~0 to 5% —- Annualized effect from gr
Slide 22: Appendix
Appendix "Travel ls our deal,
Slide 23: GAAP reconciliation
GAAP reconciliation mm YTD 2011 YTD 2008 LTM att 2010 © 200920082007 Net Income 36 172 510 657 763 34 318 ++Provision for Income Taxes 25 93 306 378 442 198 192 +Other Expenses 43 6 46 13 18 7 36 ++Depreciation and Amortization 307 172 309 350 286 235 160 EBITDA 91 4431261 1386) 1818 = 7843. Total d
Slide 24: GAAP reconciliation
GAAP reconciliation Return on equity $mm Net Income (mm) Sept 2011 Total shareholders equity (Smm) 3004 Return on equity 18% Lrmsait 20102008 510 657 763 Sept 2010 Dec 2010 Dec 2008 2844 ©2977 © 292.0 22% = 29% 2008 35.4 Dec 2008 Dec 2007 233.9 16% allegia 2103 lant" "Travel ls our deal,
Slide 25: GAAP reconciliation
GAAP reconciliation Free cash flow calculations ‘$smm um sat 2010 2009 2008 Net income 51.0 657 763 35.4 + Provision for income tax 30.6 378 442 198 + Other expenses 46 13 16 7 +Depreciation & Amortization 30.9 35.0 206 238 EBITDA 126.4 139.6 151.8 794 Capital Expenditures 86.6 98.5 317 53.0 =FOF 39
Slide 26: GAAP reconciliation
GAAP reconciliation smm Lm sat1 2010 2008 2008 + Net income 51.0 657 763 35.4 + Income tax 306 376 442 198 + Interest expense 58 25 47 84 + Interest income. (1.2) (4.2) 25) 47 EsiT 86.2 104.6 1227 559 + Interest income 12 12 25 ar Tax rate 37.5% 36.4% 36.2% 35.9% Numerator 546 673 796 38.9 Total ass
Slide 27: Revenue model
Revenue model ™ Scheduled service - Air fare from small cities to leisure destinations ® Ancillary — Air related charges - Unbundled air product ® Ancillary 3rd party products - Hotels, rental cars - $28m net revenue LTM ™ Fixed fee & Other — Charter flying — Lease revenue Revenue growth ($mm) $750
Slide 28: Low cost drivers
Low cost drivers LTM 3Q11 cost per passenger JetBlue = $155 Total__Allegiant = $110 Spirit = $107 Southwest = $140 $27 Other Sa 7 $23 : $68 $39 $44 Ry $12°5) $10 pirat sis si " i ” ALGT SAVE LUV Fuel — fl Ownership Maintenance ll Labor Source: Company flings Ownership inckides depreciation & amortiz
Slide 29: 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 wasaddd dd 2002 2005 2008 2007 2010 wie E mAireraR additions
Slide 30: Unit revenue gains with growth
Unit revenue gains with growth 15% 23.9% 24.7% 24.1% ows 18.5% 17.2% 17.0% . ia 5% 57 7.0% ° od od BT 9.4% Dec-10 Jan-t1 Feb-11 Mar-11 Aprt1 May-11 Jun-t1 Jult1 Aug-11 Sep-11 Oct-11 42011 10 2012 ™ Scheduled ASM growth = PRASM growth 40-2011 & 10-2012 scheduled ASM growth s midpoint of guided range
Slide 31: Growth and pre-tax margin vs fuel
Growth and pre-tax margin vs fuel 60% 102008 20-2008 30-2008 40.2008 10.2000 20-2008 30-2008 40.2009 10-2010 20-2010 30.2010 4022010 10-2011 20-2011 30-2011 Scheduled ASM growth ~=——PRASM growth = — System fuel price growth — allegiant
Slide 32: seat project economics
166 seat project economics Revenue (actuals LTM 3Q11) Average scheduled fare $86.82 Average ancillary fare $36.09 Total scheduled fare $122.91 Assumptions 75% load factor (16 x .75) 12 pax $ per pax fuel ($3.28 gal x 40 gal/dept) $10.93 $ per pax non fuel (inflight, D&A, marketing, etc.) $30.00 Tota
Slide 33: Credit metrics
Credit metrics Return on capital employed 25.0% 18.5% Edad 15.7% 10% 2.8% o% = 2009 2010 LTM3Q11 LUVLTM gant 30% Interest coverage 95.4x 37.2% 27x 78x tl 2009 2010 LTM3Q11 LUVLTM 3ait LUV = Southwest Anes, based on published information 60 50 40 20 20 10 ° 40% 30% 20% 10% 0% Return on equity 29.0% 2
Slide 34: Geographic diversity
Geographic diversity % of total departures wos coe 25% me i . oi 0% =i Las Vegas Florida Phoenix Southern California Other 2008 =2009 "2010 YTD 2011 Florida includes Orlando, St. Petersburg/Tampa, Fort Lauderdale, and Punta Gorda ‘Southern California includes Los Angeles, Long Beach, San Diego and P
Slide 35: Market management over time
Market management over time 3* | ie L. _ 12-2009 20-2009 30-2009 40-2009 10-2010 20-2010 30-2010 40-2010 10-2011 20-2011 30-2011 Markets added = Markets deleted Does not include shifting of 10 markets from Sanford to Orlando Intemational in 1Q 10 and shifted back to Sanford in 1 11 allegiant "Travel
Slide 36: AC utilization over time
AC utilization over time 650 Block hours per quarter / AC 600 55 500 450 at a2 a3 aa Block hours 400 2009 2010 2011 allegiant di
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