Acquisition of Hawaiian by Alaska
GENERATING ROBUST FINANCIAL RETURNS WHILE
MAINTAINING BALANCE SHEET STRENGTH
EXPECTED TO BE ACCRETIVE NEAR-TERM...
Adjusted Earnings Per Share (EPS) (1) Accretion (%)
+High Single Digit %
VALUE CREATION
...WITH A RETURN TO TARGET LEVERAGE LEVELS WITHIN
24 MONTHS
Pro Forma Net Leverage (4) (5)
+High-Teens %
< 60%
< 3.0x
< 50%
Within 2 Years
3+ Years
Adjusted EPS with Expected Synergy Phase-in (1)
Return on Invested Capital (ROIC) %
High-Teens %
Mid-Teens %
< 2.0x
Long-Term ROIC with Synergies
Source: Company filings, management estimates.
(1)
(3)
Transaction ROIC
@ Close
Adjusted Net Debt / LTM Adjusted EBITDAR (4)
Year 2
Adjusted Debt / Capitalization (5)
Excludes one-time integration and transaction costs of $400 - $500M, and tax benefits from Net Operating Losses. Assumes $235M of net synergies phased-in 25% in 2025E, 50% in 2026E, 75% in 2027E and 100% 2028E onwards.
(2) Represents long-term Pro Forma ROIC in 2028E and beyond, assuming 100% phase-in of $235M of net synergies. ROIC defined as ((Pro Forma EBIT + pro forma Lease Interest @ 7.5%)*(1 -Tax Rate of 21%))/(Average Book Equity +
Average Long-Term Debt + Average Non-Current Operating Lease Liabilities).
(3) Represents Year 4 Transaction ROIC, assuming 100% phase-in of $235M of net synergies. ROIC defined as ((Hawaiian EBIT + Hawaiian Lease Interest @ 7.5%)* (1-Tax Rate of 21%))/(Transaction Value).
(4) Adjusted Net Debt / Adjusted EBITDAR defined as (Total Debt + Operating Leases - Cash and Marketable Securities) / LTM Adjusted EBITDAR. Year 2 after close, represents 12 months ending December 31. See Appendix for
reconciliations of LTM Adjusted EBITDAR.
(5) Adjusted Debt / Capitalization defined as (Total Debt + Operating Leases) / (Total Debt + Operating Leases + Shareholder Equity). Year 2 after close, represents 12 months ending December 31.
16View entire presentation