Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (February 2013)
30 slides from Allegiant Travel's investor presentation, Feb 12, 2013
Slide 1: Management Presentation
Management Presentation February 2013 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 40 quarters () — $190mm 2012 EBITDA?) — LTM Return on Capital 15.6% @) Leisure customer Small cities Little competition @ Strong balance sheet — Rated BB- and Ba3 ©) — $353mm unrestricted cash
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 Dux Fal rand ings 5 ‘ort Lauderdale Yellow dots leisure destinations Blue dots — small cities Large dots - bases Based on current published schedule through August 13, 2013 198 routes, 62 operating aircraft 74 small cities, 13 leisure destinations allegiant
Slide 6: Little competition
Little competition Uniquely built to profitably serve small city markets a Plattsbur 180 Hovis eA 165 a 5: \ riba Oakiandl —s > \ 126 < 5 Vega ; Los Angele 85 hoe 2D Honowll qh & a ort Lauderdale 18 Competitors — overlapping routes, ral Frontier - 3 Spirit 4 Routesw Routes wo competion competition S
Slide 7: Excellent cost structure
Excellent cost structure Total cost ex fuel per ASM (cents) Operating cost ex fuel/ASM (CASM ex) vs stage length Operating cost/ASM (CASM) vs stage length 5) + 187 76 + tiv 75 | * ALK 125 4 x 124 12.0 7.0 zg a) 7 * BLU 5 ii 5115 | 145 65 5 : JBLU Be 60 = 6 » = SAVE z F 10.5 10.4 ALGT® 102 4 SAVE 5.5
Slide 8: Low cost aircraft
Low cost aircraft MD-80 757 A319 A320 Depreciation/amortization or rent () $65 $100 $75 - $150 Seats 166 223 156 177 # Owned 58 6 gt) # Leased 903) In sve EOY 2013 5114) 6 2 7 @ 2012 EBITDA per aircraft $3.2mm®) — $267k per aircraft per month Acquisition costs = purchase + induction costs (1) - Eith
Slide 9: Low cost drivers
Low cost drivers Avg length of haul (miles) 918 2012 cost per passenger 898 939 1,086 Ex fuel cost = $57 Fuel cost = $54 Total Allegiant = $111 Ex fuel cost = $65 Fuel cost = $45, Total Spirit = $110 Ex fuel cost = $92 Ex fuel cost = $97 Other Aircraft Sie "| (" ALGT @ Fuel Source: Company filings O
Slide 10: Capacity management
Capacity management Leisure = seasonality Small cities = low frequency") a Avg. block hours/AC/day Weekly market frequency 90.0% 18 80.0% =Peak mOff peak B71 70.0% 3 g 565 2 60.0% 3 z 260 550.0% 2 340.0% a é © 30.0% $50 = 20.0% 45 10.0% a 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2x a re
Slide 11: Our website is our only store
Our website is our only store 29mm unique visitors in 2012 ‘Say GOODBYE to winter and HELLO to hot travel deals! Low acquisition costs Low transaction costs - High debit card usage — Debit discount 92% of 4Q12 sales were through the site allegiant ‘Travel is our deal.
Slide 12: Ancillary air related fees
Ancillary air related fees @ April 2012 — introduced carry on bag fee Avg fare — ancillary air related $55 $50.34 $50 $45 Eon $39.89 g $35.72 5 938 g 2 $31.17 31.54 is s2007 830.24 gos | $2452 l] ] « | 2008 2009 2010 2011 2012 4ait 4012 SAVE LTM 3012 allegiant Travel is our deal. SAVE = Spirit, non-
Slide 13: Ancillary revenue — third party products
Ancillary revenue — third party products Ancillary revenue — 3" party @ Bundled vacation packages $140.0 51200 sia $119.0 @ Very high margins eater} 900 — 29% of 2012 pre-tax income E ss00 8 . > $60.0 m@ Wholesale price for hotel & car, — sso gia $299 S204 we manage margin, no inventory s200 i $0.0
Slide 14: Best pre-tax margins
Best pre-tax margins 25.0% ALGT 20.0% 15.0% SAVES) 10.0% 5.0% Luy JBLU wuveyBLU 0.0% 4 2009 2010 2011 2012 Recession Recovery Runaway Slow growth Oil High energy Avg AC in period 43 49 52 60 ‘Avg scheduled senice uel cost $1.90 #8 $3.30 $3.37 (1) LUV = Southwest Airlines; JBLU = JetBlue Airways: SAV
Slide 15: Appendix
Appendix — allegiant”
Slide 16: GAAP reconciliation
GAAP reconciliation EBITDA calculations $mm 2012 2011 2010 ©2009 2008 Net Income 78.6 49.4 657 763 36.4 +Provision for Income Taxes 46.2 30.4 376 442 198 +Other Expenses 78 59 13 16 T +Depreciation and Amortization 575 42.0 35.0 29.6 23.5 =EBITDA 190.1 127.4 1396 © 151.8 79.4 Total debt 150.9 146.0
Slide 17: GAAP reconciliation
GAAP reconciliation $mm 2012 2011 2010 2009 Net Income ($mm) 786 494 65.7 76.3 Dec 2012 Dec2011 Dec 2010 Dec 2009 Total shareholders equity ($mm) 400.6 351.5 2977 292.0 Return on equity 21% 15% 22% ROE = Net income / Avg shareholders equity we
Slide 18: GAAP reconciliation
GAAP reconciliation ti capital employed calculatio $mm 2012 2011 2010 2009 + Net income 786 494 657 76.3 + Income tax 46.2 30.1 376 442 + Interest expense 87 ed 25 47 = Interest income 10 12 12 25 EBIT 132.5 85.5 104.6 1227 + Interest income 1.0 12 12 25 Tax rate 37.1% 37.9% 36.4% 36.2% Numerator 84
Slide 19: GAAP reconciliation
GAAP reconciliation Free cash flow calculations $mm 2012 2011 2010 Cash from operations 176.8 129.9 98.0 ~ CAPEX 105.1 88.0 98.5 = Free cash flow 17 419 (0.5)
Slide 20: GAAP reconciliation
GAAP reconciliation Net debt $mm Dec 2012 Dec 2011 Dec 2010 Current maturities of long term debt N7 Fé) 16.5 Long term debt, net of current maturities 139.1 138.2 11.6 Total debt 150.8 146.1 28.1 Cash and cash equivalents 896 150.7 113.3 Short term investments: 239.1 154.8 357 Long term investments
Slide 21: Catchment area expansion
Catchment area expansion H Continue to see market growth in mature markets ® Customers show willingness to travel for access to low fares Stockton Catchment 2009 Stockton Catchment 2012 a mG = Heat map by credit card zip code: darkest green is more than 400 segments we allegiant ‘Travel is our deal.
Slide 22: International service
International service) B@ Late 2013 / early 2014 H Small cities to Las Vegas / Orlando @ Destination markets — Cancun @ Automation - payment, taxes H Bilingual capabilities - website, call center, inflight & stations @ Regulatory @ A319 1—In planning stages. Implementation of service subject to vari
Slide 23: Revenue momentum
Revenue momentum ‘Average fare - total ‘Average fare - ancillary third party 5135 products $130 $6.00 $130 $126 $5.48 $125 $5.50 $5.18 $120 ite $118 $111 $4.50 $4.34 $110 34.00 + ue 2010 2011 2012 200: 204 eniz Average fare - scheduled service Average fare - ancillary air-related charges $95 $38.00
Slide 24: Better equipped to handle higher fuel
Better equipped to handle higher fuel 2008 2012 % change System ASMs (billions) 44 7.5: 71% Average # of aircraft 36 60 67% Avg fare — scheduled service $84.97 $88.90 5% Avg ancillary - total $29.43 $41.20 40% Avg fare - total $114.40 $130.10 14% Pre-tax margin 11.0% 13.7% $mm 215 $4.50 $4.06 195 $1
Slide 25: Aircraft fuel
Aircraft fuel Improving fuel efficiency even before adding A319s — Over 9% improvement 4Q12 vs 4Q11 ASMs per gallon 70.00 656 65.00 633 620 60.1 .. 7 ia O 55.00 + LI 3a 4a 1012 2012 3012 4Q 12 150 seat MD-80 49 a7 39 30 20 1 166 seat MD-80 1 7 17 26 36 45 757 1 1 1 3 4 5 $ per gallon $3.12 $3.08 $3.
Slide 26: Credit metrics
Credit metrics Return on capital employed Return on equity 20% 0% 15.3% 15.6% 21.0% 20% 15.0% 10% 44% 10% [ 6.1% « | | ml 2011 2012 LUV 2012 2011 2012 LUV 2012 Interest coverage Debt / EBITDA 25 219% 4 34x 20 177x 3 15 114x 2 10 12x : || = ‘ ol ro 2011 2012 LUV 2012 2011 2012 LUV 2012 allegiant Trav
Slide 27: Strong cash generation
Strong cash generation Free cash flow E $75 Net debt 2010 2011 2012 $0 $150 | ($122) 2010 2011 2012 $25 ($173) $225 ($202) EBITDA EBITDA per AC $200 $190 $0 175 s $32 z E $29 £ $150) $140 = $3.0 = $127 mt $125 [I mi [] $2.4 stoo | $2.0 | im 2010 2011 2012 2010 2011 2012 See reconciliation tables all
Slide 28: Returning cash to shareholders
Returning cash to shareholders BH Over $156mm since 2008 $60 $537 $50 suo $38.6 4 2830 8 g S20) $149 $96 $10 a $5.0 i $0.0 $0.0 $0 + — 2010 2011 2012 2013 Dividends = Share repurchases 2010 2011 2012 2013 Shares repurchased 1,207.0 343 547 126.0 (000) 2013 share repurchases as of Feb 11, 2013 all al
Slide 29: Current events
Current events @ Expected to have 51 MD-80s with 166 seats by Feb 17 M@ Have taken delivery of 1 A319 aircraft — 2A319s expected to be in service 2Q13 @ Currently flying 9 routes to Hawaii H@ Currently operating 6 757 aircraft @ Starting 8 new routes in February — 3of the 8 are Hawaii routes — alleg
Slide 30: Guidance
Guidance ™ 1Q13PRASM (8) to (6)% @ 1Q 13 CASM ex fuel 1% to 3% @ 1Q 13 Fixed fee + other revenue $4mm to $6mm @ 2013 CAPEX $150mm to $160mm 1%* Quarter 2013 2"¢ Quarter 2013 System departures (8) to (4)% (7) to (3)% System ASMs 12 to 16% 14 to 18% Scheduled departures (2) to 2% 0 to 4% Scheduled ASM
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