Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (August 2015)
29 slides from Allegiant Travel's investor presentation, Aug 13, 2015
Slide 1: Management Presentation August 2015
Management Presentation August 2015
Slide 2: Forward looking statements
Forward looking statements 2 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 uncert
Slide 3: Unique business model and results
Unique business model and results Highly resilient and profitable – Profitable last 50 quarters (1) – LTM 2Q15 Adjusted EBITDA $385mm (2) – LTM 2Q15 Return on Capital 17.4%(2) Strong balance sheet – Rated BB and Ba3(3) – Debt/adjusted EBITDAR 1.7x(2) – $148mm in share repurchases LTM 2Q15 • $100
Slide 4: Advantages over the typical carrier
Advantages over the typical carrier 4 Leisure customer – Will travel in all economic conditions – Vacations are valued – price dependent Small/medium cities – Filling a large void – Increasing opportunity - industry restructuring – Diversity of network - minimizes competition Flexibility – Adj
Slide 5: Measured, profitable growth
Measured, profitable growth 5 195 226 233 271 175 200 225 250 275 300 2012 2013 2014 2Q15 Routes 6.95 7.89 8.69 9.21 6.00 7.00 8.00 9.00 10.00 2012 2013 2014 LTM 2Q15 A S M s - b ill io n s Scheduled ASMs $909 $996 $1,137 $1,195 $800 $900 $1,000 $1,100 $1,200 $1,300 2012 2013 2014 LTM 2Q15 U S D - m
Slide 6: A very large niche
A very large niche Based on current published schedule through February 16, 2016 277 routes, 82 operating aircraft 89 small cities, 16 leisure destinations 6 Yellow dots – leisure destinations Blue dots – origination cities Large dots - bases
Slide 7: Little competition
Little competition 34 243 Routes w competition Routes wo competition Current competitive landscape Uniquely built to profitably operate in underserved markets 7 Competitors – overlapping routes Legacy carriers 37 Brand / lower cost carriers 4 ULCC carriers 6 Based on current published schedule throu
Slide 8: Consolidation a catalyst
Consolidation a catalyst US domestic seats 2007 vs 2015 by airport size 8 0 100 200 300 400 500 600 700 2007 2015 S e a ts - millio n s Large hubs 0 50 100 150 200 250 2007 2015 S e a ts - m ill io n s Medium hubs 0 20 40 60 80 100 2007 2015 S e a ts - millio n s Small hubs Hub classification by 201
Slide 9: Low frequency model
Low frequency model 9 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec S y ste m b lock h o u rs/ A C/ d a y 2012 2013 2014 2015E Avg. block hours/AC/day 1 - Peak = peak is defined as 2/13-4/9, 6/5-8/13, 11/20-12/3, 12/18-12/31. Remaining is off peak 2 – Schedu
Slide 10: Aircraft utilization
Aircraft utilization Airbus aircraft allows previously marginal flying to be profitable – Longer routes (Bismarck, ND to Orlando) – Off-peak day flying (Columbus, OH to St. Pete Wed/Sat 2x weekly) – Off-peak season flying (Syracuse, NY to St. Pete in September) – Previously canceled markets (Ft. W
Slide 11: Low costs even with low utilization
Low costs even with low utilization 7.7 JBLU 5.8 SAVE 7.3 ALK 6.6 ALGT 5.8 ALGT 2015 guided 5.0 5.5 6.0 6.5 7.0 7.5 8.0 5 6 7 8 9 10 11 12 13 14 CA S M e x f u e l (ce n ts ) Average daily utilization - LTM CASM ex fuel vs daily utilization 11 As of LTM 2Q15, ALGT – Allegiant, JBLU – JetBlue, ALK –
Slide 12: Airbus growth will help improve fuel burn
Airbus growth will help improve fuel burn 12 25.0% 30.0% 35.0% 40.0% 45.0% 2011 2012 2013 2014 LTM 2Q15 Fuel expense/total revenue 1 - As of LTM 2Q15 Fuel has greatest leverage to earnings – Fuel ~ 34% of total operating expense(1) – Airbus aircraft flew 26% of LTM 2Q15 scheduled block hours 62.0
Slide 13: Airbus fleet count
Airbus 13 Actual and projected fleet count of in service aircraft (based on signed contracts only) – end of period Total fleet includes A320, A319, MD-80 and Boeing 757 Total fleet count reflects assumptions of current market expectations, aircraft retirements, and is subject to change Incremental
Slide 14: Financial growth without sacrificing margin
Financial growth without sacrificing margin 20.9% 22.5% 25.0% 32.2% 19.0% 21.0% 23.0% 25.0% 27.0% 29.0% 31.0% 33.0% 2012 2013 2014 LTM 2Q15 Adjusted EBITDA margin 14 $190 $224 $285 $385 $465 $476 $150 $200 $250 $300 $350 $400 $450 $500 2012 2013 2014 LTM 2Q15 2015 consensus 2016 consensus U S D - m
Slide 15: Cumulative return to shareholders
Cumulative return to shareholders $0.6 $17.4 $42.7 $96.5 $98.4 $ 1 0 3 .4 $ 1 8 7 .0 $ 3 2 6 .1 $ 4 0 8 .9 $14.9 $14.9 $53.5 $53.5 $95.3 $ 1 4 7 .6 -$50 $50 $150 $250 $350 $450 $550 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ m m Share repurchases Dividends 15 $557m returned to shareholders since
Slide 16: Existing guidance
3Q15 TRASM (9) to (7)% 3Q15 CASM ex fuel (10) to (8)% FY15 CASM ex fuel (13) to (11)% 3Q15 Fixed fee + other revenue $11mm to $13mm FY15 CAPEX ~$290mm 3rd Quarter 2015 4th Quarter 2015 Full year 2015 System departures 23 to 27% 21 to 26% System ASMs 21 to 25% 21 to 26% 15 to 18% Scheduled
Slide 17: Appendix
Appendix — allegrant,
Slide 18: GAAP reconciliation: Adjustment for special item
GAAP reconciliation Adjustment for special item 18 LTM 2Q15 2014 $mm – except per share amounts Net income as reported 138.2 86.7 + Add provision for income taxes, as reported 79.3 50.8 Income before income taxes as reported 217.5 137.1 + Other expense 27.2 20.2 Operating income 244.7 157.3 + Boeing
Slide 19: GAAP reconciliation: EBITDA calculations
GAAP reconciliation EBITDA calculations 19 $mm LTM 2Q15 2014 2013 2012 Net Income 138.2 86.7 92.3 78.6 +Total comprehensive income (loss) 2.6 2.3 .6 (.4) +Provision for Income Taxes 79.3 50.8 54.9 46.2 +Other Expenses 1 27.3 20.4 8.5 7.8 +Depreciation and Amortization 94.5 83.4 69.3 57.5 =EBITDA 341
Slide 20: GAAP reconciliation: Return on equity
GAAP reconciliation Return on equity 20 $mm LTM 2Q15 2014 2013 2012 2011 Adjusted net Income 165.6 113.6 92.3 78.6 49.4 Jun 2015 Jun 2014 Dec 2014 Dec 2013 Dec 2012 Dec 2011 Total shareholders equity 326.2 378.0 294.1 377.3 401.7 351.5 Return on equity 47% 34% 24% 21% 15% ROE = Net income / Avg shar
Slide 21: GAAP reconciliation: Return on capital employed calculation
GAAP reconciliation Return on capital employed calculation $mm LTM 2Q15 2014 2013 2012 2011 + Adjusted net income 165.6 113.6 92.3 78.6 49.4 + Income tax 95.1 66.8 54.9 46.2 30.1 + Interest expense 28.3 21.2 9.5 8.7 7.2 - Interest income 1.0 0.8 1.0 1.0 1.2 288.0 200.4 155.7 132.5 85.5 + Interest in
Slide 22: GAAP reconciliation: Free cash flow calculations
GAAP reconciliation Free cash flow calculations 22 $mm LTM 2Q15 2014 2013 2012 2011 Cash from operations 356.3 269.8 196.9 176.8 129.9 - Cash CAPEX 296.9 279.4 177.5 105.1 88.0 = Free cash flow 59.4 (9.6) 19.4 71.7 41.9 2014 CAPEX is cash CAPEX and does not include $142m in assumed debt included in
Slide 23: GAAP reconciliation: Net debt
GAAP reconciliation Net debt 23 $mm Jun 2015 Dec 2014 Dec 2013 Dec 2012 Dec 2011 Current maturities of long term debt 65.2 53.8 20.2 11.6 7.9 Long term debt, net of current maturities 562.4 539.3 214.1 139.2 138.2 Total debt 627.6 593.1 234.3 150.8 146.1 Cash and cash equivalents 93.5 89.6 97.7 89.6
Slide 24: Revenue components
Revenue components 24 $88.90 $91.69 $91.30 $85.30 $80 $85 $90 $95 2012 2013 2014 LTM 2Q15 Average fare - scheduled service $5.48 $5.21 $4.56 $4.47 $4.00 $4.50 $5.00 $5.50 $6.00 2012 2013 2014 LTM 2Q15 Average fare - ancillary third party products $35.72 $40.52 $41.37 $44.52 $30.00 $35.00 $40.00 $45.
Slide 25: LTM 2Q15 cost per passenger
LTM 2Q15 cost per passenger Low cost drivers $37 $34 $39 $49 $12 $17 $11 $14 $10 $5 $8 $14 $24 $22 $51 $42 $21 $24 $29 $38 ALGT SAVE LUV JBLU 25 Source: Company filings Ownership includes depreciation & amortization + aircraft rent Other excludes special items and one-time charges for other carriers
Slide 26: Credit metrics
Credit metrics 15.6% 16.4% 19.2% 17.4% 11.5% 5% 15% 2012 2013 2014 LTM 2Q15 LUV LTM 2Q15 26 Return on capital employed 21.0% 24.0% 34.0% 47.0% 21.5% 10% 20% 30% 40% 50% 2012 2013 2014 LTM 2Q15 LUV LTM 2Q15 Return on equity 21.9 x 23.7 x 14.3 x 13.8 x 29.1 x 10 15 20 25 30 35 2012 2013 2014 LTM 2Q15
Slide 27: Strong cash generation
Strong cash generation $190 $225 $287 $385 $150 $200 $250 $300 $350 $400 2012 2013 2014 LTM 2Q15 $ m m 27 Adjusted EBITDA $3.2 $3.6 $4.2 $5.4 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2012 2013 2014 LTM 2Q15 $ m m Adj EBITDA per AC Free cash flow $72 $19 -$10 $59 -$25 $0 $25 $50 $75 $100 2012 2013 2014 LTM
Slide 28: Sources/uses of cash
Sources/uses of cash $105 $178 $279 $297 $0 $50 $100 $150 $200 $250 $300 $350 2012 2013 2014 LTM 2Q15 $ m m 28 CAPEX $9.3 $22.7 $168.8 $55.8 $0.0 $50.0 $100.0 $150.0 $200.0 2012 2013 2014 LTM 2Q15 $ m m Debt payments Cash from operations $177 $197 $270 $356 $0 $150 $300 $450 2012 2013 2014 LTM 2Q15
Slide 29: Capitalization structure
Capitalization structure Actual 6/30/15 (MM USD) Debt to LTM Adj EBITDAR Rate Maturity Unrestricted cash 415.0 LTM Adjusted EBITDAR 391.2 Secured by AC 32.1 L + 2.95% Apr 2018 Secured by AC 122.2 L + 3.08% May 2018 Secured by AC 30.5 L + 2.95% May 2018 Secured by AC 32.2 3.99% Oct 2018 Secured by re
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