Aboutus Downloads Presentation 2011 05152011

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1Q2011 Results of Operations

Strictly Private and Confidential

May 2011


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Disclaimer

This information provided in this presentation is provided only for your reference. Such information has not been independently verified and, as such, is notguaranteed to be accurate nor complete. Neither Cebu Air, Inc. (CEB or the Company) nor any of its affiliates, shareholders, directors, employees, agents oradvisers makes expressed or implied representations or warranties as to the accuracy or completeness of the information contained herein and neither of themshall accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compilingsuch information or as a result of any partys reliance or use of such information. The information and opinions in this presentation are subject to change withoutnotice.

EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income are not measures of performance under the Philippine Financial Reporting Standards (PFRS),

and should not be considered in isolation or as alternatives to net income as an indicator of CEBs operating performance or to cash flow from operating, investingand financing activities as a measure of liquidity, or any other measures of performance under PFRS. Because there are various EBITDAR, EBITDA, EBITDARMargin, EBIT and core net income calculation methods, CEBs presentation of these measures may not be comparable to similarly titled measures used by othercompanies.

This presentation also contains certain forward-looking statements. These forward-looking statements include words or phrases such as CEB or its managementbelieves, expects, anticipates, intends, plans, foresees, or other words or phrases of similar import. Similarly, statements that describe CEBs objectives,

plans or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual resultsto differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on managements currentexpectations or beliefs as well as assumptions made by, and information currently available to, management. There is no assurance that expected events will

occur, that projections will be achieved, or that the Company and its managements assumptions are correct.


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Quarter Highlights

11.9% traffic growth87.0% load factor

1

43.1% domesticmarket share1

2

31.5% internationalpassenger growth

3Php13.7 billion cash3

1.0x adjusted-

8

47

14.0 block hours/day2

7.8 turns/day81% OTP

. margin

8.9% pre-tax core netincome margin

37.1% increase inancillary revenue per

passenger

4.5% reduction incost ex-fuel per ASK

3

Note: All figures are for 1Q2011; growth figures are 1Q2011 year-on-year comparison

1 Based on CEB internal data (i.e., CEB-operated routes) as CAB data for 3Q10 is not yet available2 Average utilization for Airbus fleet only3 Includes financial assets at FVPL and available-for-sale investments


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Whats In Store?

Business Updates Financial Results Outlook


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1. Business Updates


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oad Factors Up Amidst Increased Competition

Seat load factors reached 87.0% in 1Q2011, 4.4 percentage points higher than in 1Q2010.

Total passenger traffic was up 11.9% YoY in 1Q2011; international passenger volume still the main growthdriver, growing 31.5% YoY.

85.4% 87.0%

1Q11 Y-o-Y Growth

Load

Factor

80.9% 78.0% 77.4% 82.6%

1.6

2.2

7.5

9.0

. .Domestic 6.9%

International 31.5%

Seats 6.3%

Domestic 0.4%

International 27.9%

CAGR: 24.4%

7.18.2

1.0

1.4

3.0

4.5

6.0 FY2010 Y-o-Y Growth

YoY Growth: 11.9%Passengers 19.5%

Domestic 15.3%

International 37.9%

Seats 8.4%

4.4.

2.0 2.1

0.5 0.7

-

1.5

Domestic 7.2%

International 12.7%

Domestic International

6


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ominance in the Philippines Continues

CEB is still the leading domestic airline in the Philippines

Domestic

Passengers

(000)

4,189 4,499 3,499 3,881 3,655 4,289 3,870 4,537

CEB remains the no.1domestic carrier with amarket share of 43.1%

7.6% 8.1% 6.5% 7.4% 5.8% 7.6% 6.1% 10.8%

1.0% 1.4% 1.3% 0.7% 1.5% 0.8% 1.4% 0.8%

80%

90%

100%

for 1Q2011 on routes itoperates.

Competitors havegained share after

3.1% 10.3% 1.9%

11.7%

2.4%

17.0% 4.9%19.3%

40.4%33.0% 40.9%

.38.6%

.36.6% .

50%

60%

70%

adding capacity at afaster rate.

47.9% 47.2% 49.5% 48.9% 51.7% 46.3% 51.0% 43.1%

10%

20%

30%

0%

2Q09 2Q10 3Q09 3Q10 4Q09 4Q10 1Q10 1Q11

CEB AirPhil Express PAL Zest Air Seair

(2) (2)

Source: Civil Aeronautics Board, Company filings.(1) Passenger numbers include CEBs non-revenue passengers but excludes no-shows.

7

(2) 1Q11 CAB data not available; based on Company data, for CEB-operated routes only


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obust Demand in International Routes

2,234

,500

CEBs growing international air traffic and market shareInternational

Passenger Volume

for FY2010 (000)

14,013

Cathay Pacific

1,375

1,621

,500

,0003-YR CAGR:

29.5%

,

1,028

511

673

500

,000

31.5% PhilippineAirlines, 28

Others, 43%

-

2007 2008 2009 2010 1Q10 1Q11 Source: Philippine Civil Aeronautics Board (CAB)

SingaporeAirlines, 5%

Cebu Pacific, 15%

CEB grew its international segment by 31.5% YoY in 1Q11 as ASEAN and North Asia destinations continue toshow robust demand.

CAB has not released 1Q11 international passenger data. But in FY2010, CEB captured 15% international

8

, . . .


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Conservative Headline Growth butGaining Mileage on Ancillary Revenues

8.00

CEBs total revenue growth and breakdown

Total revenues increased 7.4% YoY in7.002

7.520

3.00

4.00

5.00

6.00

7.00.

Despite improved load factors,increased competition has putdownward pressure on yields resulting7.4%

1Q2010 1Q2011

Pax Revenue 6.03 6.30

-

1.00

2.00

. .1Q2011.

Cargo revenues down 3.2% YoY in

1Q2011 as 1Q2010 was exceptional(Php billion)

Anci llary Revenue 0.49 0.76

Cargo Revenue 0.48 0.46

Cargo Revenue Anci llary Revenue Pax Revenue

.

CEB has successfully improved takeup of ancillary revenue per passengerwhich increased significantly by 37.1%Average Fare

Ph 2,405 2,246 Php269 in 1Q2011.Ancillary

Revenue per

Pax (Php)196 269

9


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Effective Marketing and Distribution Network

Success in increasing online presence and proportion of web bookings

Breakdown of sales by distribution channel

34.01%

41.71%47.92%

25.38%22.21% 22.74%

40.61%36.07%

29.34%

20.00%

40.00%

.

Sales made throu h the CEB website has

0.00%

2009 2010 1Q2011

Internet Booking Cebu Pacific Ticket Offices and Call Centers Third Party Sales Agents

significantly increased. In 1Q11, the share ofweb bookings to total sales reached 47.92%.

www.cebupacificair.com is the top travel site in

the Phili ines Source: comScore MediaMetrix)

CEB is increasing on-line presence throughFacebook, Twitter, and YouTube

10


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Focused on Improving Operational Efficiency

1Q10 1Q11 %ChangeNo. of Sectors Flown 21,486 22,494 4.7%

Domestic 17,634 17,629 0.0%

International 3,852 4,865 26.3%

ASK (millions) 2,540 2,940 15.8%

Domestic 1,322 1,351 2.1%International 1,217 1,589 30.6%

, , .

Domestic 1,119 1,202 7.4%

International 977 1,290 32.1%

Ave. Aircraft Utilization (Block Hours/day) 12.24 12.58 2.8%

. . .

ATR 8.17 8.40 2.8%

No. of Turns per Day 8.23 7.81 -5.1%

Airbus 8.24 7.70 -6.6%

-. . .

On-Time Performance (OTP) 92% 81% (10.6)

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2. Financial Results


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Delivering Profit Amidst Tough Business Conditions

2010 2011 YoY Change

Passengers ('000) 2,508 2,806 11.9%

For the Three Months Ended March 31

, , .

Average Fare 2,405 2,246 -6.6%

EBITDAR (Php m) 2,384 1,777 -25.4%

, - .

Pre-tax Core Net Income (Php m) 1,274 670 -47.4%

EBITDAR Margin 34.0% 23.6% (10.4)

arg n . . .

Pre-tax Core Net Income Margin 18.2% 8.9% (9.3)

CEB osted rofits des ite 41.6% ear-on- ear increase in avera e et fuel rice toUS$120.66/bbl (published MOPS) in 1Q2011 and 6.6% year-on-year decline in averagefares.

EBITDAR margin and pre-tax core net income margin were lower at 23.7% and 9.0%,

13

.


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Consistent Focus on Cost Management

2010 2011 YoY Change

Flying Operations 1.067 1.234 15.6%

For the Three Months Ended March 31

Php

. . .

Others 0.162 0.134 -17.8%

Maintenance 0.221 0.200 -9.4%Depreciation and Amortization 0.195 0.214 9.5%

Aircraft and Traffic Servicing 0.261 0.254 -2.9%

Aircraft and Engine Lease 0.153 0.139 -9.3%

Reservation and Sales 0.126 0.128 1.5%

Passenger Service 0.062 0.062 0.5%

General and Administrative 0.075 0.065 -14.2%. . .

Total Cost per ASK 2.167 2.306 6.4%

Total Cost per ASK ex- Fuel 1.262 1.205 -4.5%

Total Cost per ASK (in US$ cents) 4.709 5.266 11.8%

Total Cost per ASK ex- Fuel (in US$ cents) 2.743 2.753 0.4%

Note: Converted based on average exchange rate for the period: 1Q2011 at Php43.79/US$, 1Q2010 at Php46.01/US$

Unit cost increased 6.3% YoY in 1Q2011 due to higher fuel prices but cost ex-fuel per ASK

14

dropped 4.6% in the same period.


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Summary of Income Statement

2010 2011 2010 2011 YoY Change

Passenger Revenue 6,031 6,302 86.1% 83.8% 4.5%

Cargo Revenue 479 463 6.8% 6.2% -3.2%

Ancillary revenue 492 755 7.0% 10.0% 53.4%

Php Millions % Revenue

o a evenue , , .

Flying Operations 2,711 3,628 49.3% 53.5% 33.8%

Fuel 2,298 3,235 41.8% 47.7% 40.8%

Others 413 393 7.5% 5.8% -4.9%

Maintenance 561 588 10.2% 8.7% 4.9%

% Operating Cost

eprec at on an mort zat on . . .

Aircraft and Traffic Servicing 663 745 12.0% 11.0% 12.4%

Aircraft and Engine Lease 388 407 7.1% 6.0% 5.0%

Reservation and Sales 321 377 5.8% 5.6% 17.5%

Passenger Service 158 183 2.9% 2.7% 16.3%General and Administrative 192 190 3.5% 2.8% -0.7%

er xpenses . . .

Total Operating Expenses 5,503 6,779 23.2%

EBIT 1,499 741 21.4% 9.9% -50.6%

Fuel hedging gains / (losses) 14 624 0.2% 8.3% 4210.5%

% Revenue

Fair value gains / (losses) 0 -24 0.0% -0.3%

Foreign exchange gains / (losses) 361 99 5.2% 1.3% -72.6%

Interest expense - net -229 -79 -3.3% -1.1% -65.4%

Equity in net income (loss) of a joint venture 4 9 0.1% 0.1% 116.5%

Provision for Tax 93 169 1.3% 2.2% 81.3%

15

Net Income / (Loss) after Tax 1,557 1,201 22.2 16.0 -22.9

Pre-Tax Core Net Income 1,274 670 18.2% 8.9% -47.4%


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Sound Financial Position

Cash balance (including financial

As of Dec-31 As of Mar-31

2010 2011

Cash and cash equivalents(1) 13,267 13,737

Php Millions

.billion as at end 1Q2011.

Gearing ratio at 1.00x and debtservice ability at 1.98x adjusted net

Current assets 15,139 16,057

Plant and equipment 33,986 36,347

Other noncurrent assets 812 842Total assets 49,937 53,246

2 tap aircraft financing

, ,

Other liabilities 11,527 13,040

Total liabilities 32,030 34,298

Total equity 17,907 18,948

ap ta ze ease , ,

Net debt 7,236 7,522

Adjusted net debt 18,470 18,891

Net debt-to-equity (x) 0.40 0.40

(1) Cash balance includes financial assets held-for-trading (at fair value) as well as available for sale assets.(2) Includes LT debt, current portion of LT debt, and ARO liability

us e ne e - o-equ y x . .

Adjusted net debt/EBITDAR (x) (4) 1.82 1.98

Cash-to-sales ratio (5) 45.6% 46.4%

16

,

(4) EBITDAR for March 31, 2011 is based on LTM EBITDAR(5) Sales for March 31, 2011 is based on LTM Revenues


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Summary of Cash Flows

2010 2011

CASHFLOWS FROM OPERATING ACTIVITIES

Income (loss) before income tax 1,650 1,369

Net adjustments 339 -60

Php Millions

pera ng ncome e ore wor ng cap a c anges , ,Net changes in working capital 1,213 1,412

Net cash generated from operations 3,202 2,721

Interest paid -210 -186

Interest received 3 203

Net cash rovided b o eratin activities 2 995 2 738

CASHFLOWS FROM INVESTING ACTIVITIES

Decrease (increase) in:

Acquisition of property and equipment -90 -1,616

Other noncurrent assets -3 -22

Net cash used in investin activities -94 -1 639

CASHFLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in:

Repayments of long term debt -491 -557

Payment of treasury shares of stock 0 0

- -

NET FOREIGN EXCHANGE DIFFERENCE -11 -15

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS 2,411 543

, ,

CASH AND CASH EQUIVALENTS AT END OF PERIOD 6,241 10,292

17


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3. Outlook


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Managing the Fuel Price Hike

Jet fuel price averaged US$138/bbl for MTD April 2011

Measures taken by CEB to mitigate spike in fuel prices:

Passed on fuel surcharges

- Beginning March 14 for international- Beginning March 22 for domestic

Unbundled the first bag beginning April 1, 2011 through Prepaid Bag Fees (Lite Fares) - Lite Fares nowexclude the free 15 kilograms baggage allowance which used to be included in Go Fares. Now passengershave the option to pay Prepaid Bag Fees if they want to check in bags.

19


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Bracing for Competition in the Philippine Market

Aggressive expansion plans announced by local competitors

1

CEB (A320/A319) 24 29

PAL (A320/A319) 19 16 (?)

Zest Air (A320/A319) 6 8 to 10 (?)

Seair (A319) 2 2 to 4(?)

-

Notes:

TOTAL 57 65 to 70 (?)

Net additions from year ago +9 to +13 (?)

s ma es ase on n us ry sources an press re eases o oca carr ers

0


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Potential Risk of More Competition from Foreign Carriers

Executive Order 29

EO 29 (Pocket Open Skies) was issued by the Government on March 14, 2011 in the aim of boosting tourism.

promote and the CAB to grant unrestricted third, fourth and fifth freedom rights to the countrys airports otherthan the NAIA.

CEB believes it can compete with foreign carriers if given a level playing field of equal reciprocal rights

The CAB issued on May 6, 2011 the Implementing Rules and Regulations (IRR) for EO29

The IRR does not address CEBs concerns on reciprocity and fair competition

1


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Key Points

CEB will come out stronger from this challenging business environment

CEB will remain the dominant LCC in the Philippines

Measures taken to mitigate fuel price increase will take effect by 2Q2011

Ancillary revenue presents significant upside

Strong balance will allow CEB to accelerate growth.

22


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Q & A


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ppendix


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CEB Fleet Expansion Plan (2011-2014)

88

9 119

9 529 3237 39

46 47

Disciplined and flexible fleet expansion plan

12 15 1822 29

348 88

2009 2010 2011 2012 2013 2014

ATR under Finance Lease Airbus under Operating LeaseAirbus under Finance Lease

Ave. fleet age(1)

3.27 years

Notes: (1) As of 31 March 2011

25


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Summary of Balance Sheet

- -

2010 2011

Cash and cash equivalents 9,763 10,292

Financial assets at fair value through profit or los 3,879 4,224

Receivables 862 830

Expendable parts, materials and supplies 370 432

Php Millions

Prepaid expenses and other current assets 264 278

Current Assets 15,139 16,057

Property and equipment-net 33,986 36,347Available for sale 115 113

Investment in a joint venture 370 378

Total Noncurrent Assets 34,798 37,189

Total Assets 49,937 53,246

Accounts payable and accrued expenses 5,598 6,264

Due to related parties 36 36

- , ,

Unearned transportation revenue 4,606 5,298

Current Liabilities 12,296 13,755

Long term debt-net of current portion 16,377 16,984

Other noncurrent liabilties 3,357 3,559

Total Noncurrent Liabilties 19,734 20,543Total Liabilities 32,030 34,298

Paid-up capital 613 613

Additional paid-up capital 8,406 8,406

Treasury stocks -159

Net unrealized gain (loss) on AFS investment -3 -4

6

Retained earnings 8,891 10,092

Equity 17,907 18,948

Total Liabilities and Equity 49,937 53,246

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Aboutus Downloads Presentation 2011 05152011