Good day, ladies and gentlemen. And welcome to the Allegiant Travel Company Fourth Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, today's program may be recorded. I would now like to do introduce your host for today's program, Chris Allen, Investor Relations. Please go ahead.

Thank you. Welcome to Allegiant Travel Company's fourth quarter and full year 2016 earnings call. With me today are Maury Gallagher, company's Chairman and Chief Executive Officer; John Redmond, the company's President; Scott Sheldon, our Chief Financial Officer; Jude Bricker, our company's Chief Operating Officer; Lukas Johnson, our SVP of Planning and a host of others. As it's been our pattern of randomness, Maury will have some brief comments followed by Jude and Lukas. After that, we'll proceed into questions. Before we begin, I must remind listeners that the company's comments today will contain certain forward-looking statements and they are only predictions and involve risks and uncertainties. Forward-looking statements made today may include, among others, references to future performance and any other comments about our strategic plan. There are many risk factors that could prevent us from achieving our goals and causing the underlying assumptions of these forward-looking statements and our actual results to differ materially from those expressed or implied by our forward-looking statements. These risk factors and others are more disclosed – are more fully disclosed in our filings with the Securities and Exchange Commission. Any forward-looking statements are based upon information available to us today. And we are undertaking no obligation to update publicly any forward-looking statements whether as a result of future events, new information or otherwise. The company cautions users of this presentation not to place undue reliance on forward-looking statements, which may be based on assumptions and events that do not materialize. This earnings release, as well as the rebroadcast of the call, are available on the company's Investor Relations' site at ir.allegiantair.com. With that, I'd like to turn it over to Maury.

Thanks, Chris. And good afternoon, everyone. Thank you again for joining for our Q4 2016 call. I'm just going to quick comment, I'm very happy to announce – pleased to announce that we have created some new positions and promoted some very distinguished people who have earned these promotions. We now have an Executive Vice President position that was the board put together last week. Three of those Jude Bricker, Scott Allard, and Scott Sheldon are occupying those positions, and we promoted four very good people that have been hallmarks in our operations. Most to you I think probably know them, Greg Anderson as SVP and Principal Accounting Office; Lukas Johnson who you'll hear from in just a minute, SVP of Planning; Trent Porter, our SVP of Financial Planning today; and finally, Rob Wilson, SVP of Systems, but couldn't be happier. These moves are we think necessary to position our company for our growth in the future and more upward mobility for our very talented management team. With that, let me turn it over to Jude for some comments, and then Lukas for some revenue comments. Jude?

Thanks, Maury, I'll let Lukas give some additional color here in just a second, but I want to make a couple points on the revenue that was reported during this quarter; continue to be pleased that we're executing on our previous guide of continued sequential improvement and we expect that to continue on into the second quarter. Next, our credit card program, continues to mature nicely; during November's Investor Day, we guided to a 2017 contribution of $10 million from the program. We continue to trend ahead of that forecast and now expect that program to contribute at least $15 million during this year. Partially in response to demand of our credit card, we have through testing determined that the removal of our credit card surcharge will be profit accretive. We've removed that charge indefinitely; keep in mind that the fees generated from this card had this charge had been treated as a contra-expense under marketing. On to the balance sheet, as was mentioned in the release we raised a $150 million in the fourth quarter through an upsizing of our 2019 unsecured bonds. Additionally, we continue to raise debt secured by our used A320 series fleet. These activities have boosted our cash balance to $500 million, we also have $56 million of undrawn revolver. This added liquidity will support our increased CapEx in 2017, particularly our new aircraft order, the first of which we will receive in May. We continue to expect our own air – we continue to expect to own our aircraft, and this added liquidity will give us the flexibility in raising secured debt against these new deliveries. Lastly, I want to congratulate all the men and women working hard every day in our operation. During the fourth quarter, we showed continued improvement across all operating metrics including controllable completion factor A14, A60, D0, * D0, controllable incident rate and turn time performance. We had to deal with disruptions like Hurricane Matthew and the tragic shooting in Fort Lauderdale. And in spite of that, we persevered. We have much to do, but we are all moving in the right direction. And with that, I'll turn it over to Lukas.

Thanks, Jude. Like to give just a little bit of color on our year-over-year unit revenue for the fourth quarter results and our first quarter guide. Our fourth quarter results, as you noticed, finished on the high side of our guide, which was a ride upwards during the quarter due to improvement in both close-in yields and bookings. As several other airlines have noted, we saw an uptick in bookings post-election and that strength has continued into 2017. For 1Q, as Jude mentioned, again, we're pleased with how our credit card program is ramping up and you should see the benefits of this impacting our third-party revenue line. We should see a step-up in the third party unit revenue for the quarter due to the timing of the program launch but that step-up will be a little bit more gradual in future quarters. Two notes on TRASM noise for the first quarter. First, the removal of our surcharge for using a credit card be a 50 basis point positive in first quarter for TRASM. Secondly, for the Easter shift, we expect it to adversely affect the first quarter TRASM by about 50 basis points negative. Our expectation is that Easter shift will be a bigger boost to the second quarter TRASM numbers and is overall positive when you look at both March and April combined year-over-year. As for the monthly TRASM cadence, January TRASM was in line with our expectations. However, we do expect January to be the weakest month of the quarter on a year-over-year basis. We expect February and March to perform similarly year-over-year to each other. Lastly, I would like to highlight that of the 19 new market announcements we made since our last earnings call, 17 of those were completely unserved by any other airlines and we continue to focus more on connecting-the-dot opportunities than new city growth in 2017 as we work through our transition year. And with that, I'll open it up to questions.

Our first question comes from the line of Joseph DeNardi from Stifel. Your question, please. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Thanks very much. Lukas, just when we think about kind of RASM going forward for you guys, I mean, there are number of different factors I guess you could look at, competitive capacity, your own growth, the peak flying, number of markets under development, and industry capacity. I mean, are there one or two that you look at specifically as being more relevant than others?

Yeah. Sure. I think you highlighted a number of the major factors and we, kind of historically, have had very choppy monthly and quarterly TRASM. A lot of that is – probably the major factors are new market growth in terms of ramp up. Right now, we're about similar levels to last year, but as we get further on into the year, some of that should subside, especially the new city growth within the last 12 months should subside. Also, the percentage of off-peak flying, which has been continually growing last two years under a little bit lower fuel and a little bit more fleet and pilot constraints, that off-peak percentage as a total percentage of ASM been affecting our yields and load factors. I would say that. And then lastly, holiday shifts. Ourselves and one or two other leisure-focused carriers tend to have some pretty dramatic swings with the holiday shifts based on calendar timing. So, Easter, we expect to be a pretty big shift for us into the second quarter. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Okay. Yeah. I mean, to that point, I thought the Easter headwind in 1Q was maybe a little bit less than I was expecting it would be. So, can you just talk about if that's a little conservative and then is the benefit to 2Q more than the headwind to 1Q?

Yeah. Sure. If you actually looked at – there's a little bit of calendar shift as well. We get an extra peak Friday in to March year-over-year. So, there's a little bit higher peak ASM peak day flying into March, which I know gets very granular if you're building a model specifically to us. But that helps offset some of the Easter shift. If you had taken that calendar shift away, in terms of day of week, we're probably around, say, 100-basis-point shift against the first quarter.

Joe, I think, it's important to add that March and April together will perform better with Easter in April because there's only so much we can peak up in response to a particularly strong March were it to include an Easter. So, this is a better calendar for us overall. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Perfect. I'll stick to two questions. Thank you.

Thanks, Joe.

Thank you. Our next question comes from the line of Hunter Keay from Wolfe Research. Your question, please.

Hey. Hi, thanks. Hi. So, okay, you guys have 33 A320 family planes now, 12 on order. That means you're going to have to get 55 more used A320 family planes between now and the end of the decade to get to 100. So, what kind of planes are you looking for? Are you looking for planes that are lightly used, coming off lease, whatever, any kind of characteristics? And what kind of contingency plans are you laying out just in case the used aircraft market doesn't cooperate for whatever reason?

Hey, Hunter. It's Jude. Today, we have 78 total commitments. So, keep in mind we have the 12 airplanes that we own that are out on lease to easyJet, we have the 12 new ones that you highlighted, and we also have some other commitments for purchase in the future. And if we just execute on committed deals, those are deals that are documented and with a purchase agreement will take the fleet to 78. So, we have quite a bit of wiggle room in the fleet plan to go out and acquire the aircraft that we need in order to maintain fleet size through this transition. And considering the total fleet today is 85, we really don't need that many more. The contingency primarily is changes in utilization, so we can maintain capacity in order to manage out any uncertainty that we experience in the fleet plan. We're committed to buying used airplanes and that means that we're going to have to deal with the tedious nature of doing that and the uncertainty with the delivery timing as well. And we feel comfortable with that because we have this fleet of MD-80s that can vary particularly in how much we rely on them based on utilization.

Okay. Yeah. I guess I didn't realize the commitments. Thanks, Jude. And then, it's not we're nitpicky, but I think the original plan was to have 84 planes at year end, and that is what happened. But you attributed some of the higher CapEx due to timing on 2016 deliveries as one of the drivers of the change. So, maybe if you want to answer, what I'm not understanding with that and then also maybe more broadly in terms of the timing in future shifts in the delivery schedule as it relates to the change in the CapEx guide? Thanks.

Yeah. We had an aircraft that was going to be purchased by schedule at the end of 2016 and we're continuing to argue about delivery and that airplane has led into 2017, that's all that's happening there.

All right. Thanks, Jude. Appreciate it.

Thanks, Hunter.

Thank you. Our next question comes from the line of Michael Linenberg from Deutsche Bank. Your question, please?

Hi. Hey. Good afternoon, guys. Hey. Just a couple here. I just – your load factor for the quarter was just under 80% and I kind of look back at the history and I guess it's probably been some time since we've seen a load factor in the quarter with a seven on it. I mean, you probably have to go back to like 2007. And I'm just curious, I mean, I've watched it come down over time. You generate a lot of ancillary per passenger just under $50. I mean, obviously stage length may be a contributor. I mean is there a shift in philosophy here? I mean is it the philosophy or is it just more of a network, maybe flying some of the shorter haul markets is bringing down the loads, like what's going on there?

Hey, Mike. A lot of that has to do with certainly the increase in off-peak flying which the Tuesdays, Wednesdays, Saturdays have a more optimal or just natural target load factor under what we've historically seen. And then also as you had mentioned, short hauls tend to have an optimal load factor target, at a bit lower than 80% for us. So I think those are two of the major shifts as well as not being in the strongest demand environment relative to, say, 2013 or 2014. So, I think, those are a couple changes really on our side, specifically choosing a target yield, and I think, as you go in through the first quarter, second quarter of next year, we're going to continue to try to hold yields or raise yields year-over-year versus just any load factor target.

And Mike, you're referencing system load factors. So it's important to differentiate between that and sched service. I mean, notice the differential between those two metrics has widened in the last quarter and that there's a lot of increased charter activity which tends to run lower load factor, and also a lot of company repos associated with some of the disruptions we've had.

Good point. Now that's very helpful. Just my second question, I think maybe Jude, you mentioned – or actually, I think, it was you who maybe mentioned close-in yields improving, maybe helping to drive revenue. When I think about your type of passenger, I mean, when I – whenever I sort of hear close-in, I immediately think business. But I guess you just have some portion of your passenger base who buys close-in. I mean is that – has that evolved? Is that a greater share? Maybe it's a function also of market selection because you have moved into business-type markets like, I don't know, Newark-Cincinnati, for example.

It's a little bit of market shift but it's actually more related to haul and the fact that most of our mid-sized markets, you can say, are underserved or unserved on these – the routes that we're serving. There are still other options, travel options, connections – better connection and different pricing structures for those passengers. So – but you've naturally seen as we've shifted some of our ASMs last couple of years to that a shortening of the booking curve. So, if you look at our distribution of RPM both in the last seven days, we're up significantly in the fourth quarter within the last seven days, so it is something that our systems and pricing team are hard at work, kind of changing our models to better price within closer in booking period. But nothing that we're doing specifically, targeting business customers.

Okay, Lukas. And just one quick last one. The DOT consumer report, do you start providing that data for January or is that a 2018 event?

This is Trent Porter. That will be a 2018 event based off of our forecast right now.

Okay. Great. Thank you.

Thanks, Michael.

Yeah.

Thanks, Mike.

Thank you. Our next question comes from the line of Brandon Oglenski from Barclays. Your question, please.

Hey. Good afternoon, everyone, and thanks for taking my question. Can we talk a little bit about the CASM guidance this year plus 5% to 9%? And where – what could come in on the better end of that range and maybe where you could see coming in on the higher end of the range for the year to give investors a little bit more perspective on such a wide range?

Yeah. This is Scott. I think, if you look at the 5% to 9% considering we're eliminating the surcharge, you're going to see kind of the midpoint to the high end of that range. Obviously, there are some things that can slip, but it – I think it would be tough to be on the lower end of that range on a full-year basis.

Okay. So, mid to higher end of that CASM guidance.

Yeah.

And can you guys just walk us through what could still be some variance for the summer as you push the fleet transition a little bit more aggressively? We talked a lot about the additional cost of pilot training, but what are some things that could go right or wrong this summer that could drive the volatility to the higher side of that range?

I think, one of the big aspects that we really haven't captured or communicated was we had a fairly difficult summer operation last year. On a full year basis, that would mean combined between revenue and actual costs upwards of $45 million, $40 million in total P&L impact. So, assuming we don't repeat what we did last year, we're obviously going to carry some heavier spare counts, that can be a factor. So, there should be some tailwinds assuming that we – a lot of the things that we're working on from an operation perspective come to fruition. But the pilot training pipeline seems to be moving ahead. We're compressing the training time line at which it takes the pilot to get through the pipe. Other than that, I mean obviously deliveries, is another aspect. If these planes don't deliver as expected, it can be – it could have an impact as well.

I think that's the big one is that the delivery schedule may allow us to add some peak period ASMs which would drive down that CASM number. It's primarily capacity input or upside on CASM.

Okay. I appreciate it. Thank you.

Thank you.

Thank you. Our next question comes from the line of Savi Syth from Raymond James. Your question, please. Savanthi N. Syth - Raymond James & Associates, Inc.: Hey, good afternoon, guys. Actually, maybe going on with that last question, on the timing of aircraft deliveries beyond 1Q 2017, when do you expect those new aircraft deliveries to show up?

Well, we take our first – Hi, Savi. It's Jude. We take our first airplane in May and by the end of the year, we will have delivered 10 new aircrafts. There's two remaining in the order that we'll deliver in the summer of 2018. And the way the contract works is we'll get a little more granular on the delivery timing as those dates get closer. And that was kind of what I was alluding to on the upside in capacity when we get to the definitive dates from Airbus then we can be a little bit more precise about the opportunity to add additional flying if there's an opportunity there. Savanthi N. Syth - Raymond James & Associates, Inc.: Okay. That makes sense. Thank you. And then – and Lukas, I think, you had mentioned the off-peak flying and the new market growth mix both helping as you get towards the end of the year. Could you provide a little bit more clarity on the timing because I would have expected maybe some of the off-peak mixes are coming down starting the fourth quarter, but it seems like maybe it's still pretty high.

Yeah. For the first quarter, new route ASMs are about flat. So, first and second quarter in terms of new route percentage, that's fairly flat. But in terms of off-peak growth, actually as we go into March and June and July, our peak months, we're not going to be growing peak day departures nearly as much due to focusing more on operations in those months. We'll still be outpaced in off-day, off -peak ASM growth. So, for the first quarter, off-peak day week flying was up about 2 points or be about 28% of ASM. So, I think, we'll still see a little bit (21:15) growth all the way through the year in that. Savanthi N. Syth - Raymond James & Associates, Inc.: So, I should just assume like in the kind of more off-peaky times you'll see more mix – of that mix continuing, but maybe at the peak time you'll see some better mix. Is that fair?

Well, during peak month, we're already flying fully on the peak days, so we can't add anymore departures to that. So, actually the way we think about it is, you're really only adding on the off-peak day weeks during your peak months. So, we really can only add on a Tuesday, Wednesday or Saturday in June or July, because all of your peak days are already allocated. So, I would expect that to be slightly elevated even year-over-year through the summer. Savanthi N. Syth - Raymond James & Associates, Inc.: And as you get into the fall, is that when you start to see slowing even in the kind of like September? Those have been a truly off-peak month or does that (22:07)?

Yeah. Once we get to the fourth quarter, once we have really gone through a lot of the fleet transition through the summer which is the kind of bulge that we're working through, hopefully we'll be able to get back to a normal peaking schedule, really not extended growth in the off-peak periods. Savanthi N. Syth - Raymond James & Associates, Inc.: That's helpful. All right. Thank you.

Thanks, Savi.

Thank you. Our next question comes from the line of Duane Pfennigwerth from Evercore ISI. Your question, please?

Hey. Good afternoon. Maury, I was hoping you can update us a little bit on the org structure if in addition to these promotions, any other responsibilities have changed. And then, John, maybe you'd like to chime in. Do you see your role more as generating more third-party revenue over time or is the operation of the airline actually in your basket of responsibilities as well?

Thanks, Duane. Right now, John's going to have both the operation of the airline and we're also starting our third-party activities that we talked about in past meetings. The main thrust of this effort is to – like John's position is pretty well set, and what we're going to do, it's bringing up more people underneath to more senior roles as we kind of get to be bigger and need more, if you will, depth in the management team. We have some excellent people. I've got a lot to say in that in front of this crowd here at the table, but, no, they're – seriously they're very good. And it's just that the wider base and structure allows us to delegate and put more people into different positions. I'd let John comment on that, but from my position, John is going to be – he'll probably be able to talk to you about airlines pretty quickly here.

Hi, Duane. Of course, I guess, we'll be spending a little bit more time with you down the road. But on each of those points, third party, we will be and have been spending a little bit more time in. We have a lot of initiatives we're taking a look at very strongly. And we're not at a point yet to say anything at this point in time, but very encouraged by some of the progress we're making in that regard. From an operation standpoint, I mean obviously when you look at the promotions that have been made, there's other impacts in the org chart that we still need to communicate some of that internally before we have any conversation here. But the idea of course is to always look at how we deal with people, product and process. So, the org chart changes as well as all the promotions are intended to address the people and process of course, and we intend to refine and improve what we do going forward, which everyone has kind of alluded to in the conversation here. And, obviously, as a lot of you know – I am not an airline expert, but I am very comfortable with managing large organizations, much larger, of course, than this one in the past, and that's what we're starting to do, is put a little bit more structure to what we're doing going forward. In the course of my first several months here, I looked at it from my own standpoint. There was a lot of listening and observing, call it spring training, if you will, but now we're moving into the big league, and looking forward to everything we need to do to ensure that this transition goes properly and that we on a parallel track continue to make a lot of progress in the third-party area.

Thanks, very much.

Thanks, Duane.

Thank you. Our next question comes from the line of Helane Becker from Cowen. Your question, please.

Hi. Thank you very much, operator. Hi, team. So I have two questions. One is sort of like a nitpicky little thing with respect to unit revenue. I think you originally said it would be up in the second quarter, but now you're looking at sequential improvement into the second quarter. So did you just say the same thing or you're saying that you're pushing out your...

Hey, Helane.

Hi.

We're just kind of reiterating what we've said the last three or four earnings calls that quarter-over-quarter or year-over-year unit revenue trends would sequentially be improving. And that's what we're expecting that first quarter year-over-year will be better than this past fourth quarter 2016, and that our second quarter 2017 will be better than our first quarter 2017. And that also we're expecting that second quarter will turn positive, as you mentioned.

Okay, perfect. And then my other question is for Jude. I think about a year ago, you talked about margins being pretty high. You look at the first quarter of last year it was almost 35%; then second quarter 30%; and then 23% and 20%, which is exactly what you said you wanted, right. You had said that 30% margins might be too high for your business and 20% was a level you were more comfortable being at. So, now, as we look forward, the fact that you've gotten to your goal, how should we think about margins going forward?

Wow. Helane, I'm not sitting over here scheming of ways to bring down our margins. I think the important point was that we have a hurdle rate on capacity decisions that changes a little bit with fuel, but generally it's about 20%. So a round-trip flight, which is our smallest unit of the capacity decision, will be cut or added based on its prediction to generate that kind of margin. And so followed then over a long period of time, we should see margins around 20% for DCF valuation or whatever. And so what we've done is – fuel fell very rapidly. We grew rapidly as a response to that, as you would expect, because there's lots of marginal opportunities to put airplanes to work above that hurdle rate. Fuel's come down a bit and we're pulling in growth somewhat. And all that follows the strategy overall. We're perfectly satisfied with 30% margins. I think the issue would be that we run the business primarily for earnings and 30% margins means there's a lot of opportunity that we couldn't take advantage of because we couldn't grow rapidly enough to soak up all that opportunity created by a very rapidly falling fuel price. So we're still using the same hurdle rate for capacity decisions today and it is going to take us a really long time in order to get down to 20% margin, and we're not going to rush into that either.

Okay. And then my last question is in one of your newest markets, Newark, how are you finding that going? I know initially I think you were planning like more traffic from Asheville to Newark area versus the other way around. So has that changed at all? Have you seen a pickup in Newark originating? And then second, I know they have issues with the airport in bad weather days. How are you finding the operations there?

So in terms of where our passenger distribution is coming from, as you alluded to, we are treating New York or Newark as the destination. And certainly, we're having a higher percentage of our traffic originating from our smaller cities where we've got our name brand out there. We've got our closed distribution in Newark. Our passenger is comfortable with our model. And that specifically is going to be target of any markets that we add into Newark is serving those small cities. In terms of the operation, Jude?

I would put Newark as at the top of one of our list of positive surprises in the fourth quarter. It's matured very rapidly and it's doing quite well. So...

Great.

...we hope it to continue to be a destination for our customers in the future and expand it to other source markets.

Okay. Well, thank you. Thanks for all your help.

Thanks, Helane.

Thanks, Helane.

Thank you. Our next question comes the line of Rajeev Lalwani from Morgan Stanley. Your question, please. David W. Streger - Morgan Stanley & Co. LLC: Hi, everybody. This is David Streger actually on for Rajeev. I was just wondering if you could provide an update on your overlap with the other ULCCs and where you expect this to go moving forward.

Hey, David. So, as you mentioned, we saw a little bit of additional competition into the fourth quarter. And this was announced maybe six to nine months ago. There's been no change into the first and second quarter. Actually, a little bit of a decline in the second quarter in terms of total ULCC competitive ASMs in our market, which is a little bit harder to gauge because a lot of these were secondary to secondary airport. And it really is not true apples-to-apples. But any way that you do slice it, the trends are kind of flat to neutral for us. David W. Streger - Morgan Stanley & Co. LLC: Great. And then just maybe along similar lines on the network. I was wondering if you could give us some color on how markets are performing, more specifically in Ohio and maybe Florida, if you could?

We won't get too much into geographic regions, but obviously, we've grown quite a bit on the East Coast. The first quarter of this year will be the first quarter we've had where over 60% of our ASMs will be allocated to the East Coast. And we're certainly comfortable with the demand environment in both of those regions.

The Ohio River Valley has been a great story for us over I think an extended period of time to include our expansion into Cincinnati and now we're moving into Cleveland. Our most recent new source market that was announced is Louisville, Kentucky nearby. Lexington continues to go strong. So from a source perspective, I think that region of the country is doing really well for us and it should continue to do so. David W. Streger - Morgan Stanley & Co. LLC: Great. Thank you, gentlemen.

Thank you, sir.

Thank you. Our next question comes from the line of Dan McKenzie from Buckingham Research. Your question please.

Yeah. Hey. Good afternoon. Thanks, guys. Just a couple of housecleaning questions here, Jude I guess. For those I guess of us trying to fine-tune our cash flow statement, what's the updated stat for the principal debt coming due this year and the amount of CapEx that you plan to finance? I guess I'm just wondering if the $200 million that you raised in the fourth quarter covers you for the year or is there more financing yet to come later this year.

I'll start with the second part. Maybe we can pull up the principals due here. But, no, we will raise more debt, absolutely. And as we've talked about when we were talking about it to debt investors with the upsizing, I would expect our debt levels under the current fleet plan to peak around the end of the first quarter of 2018 in excess of $1 billion. And so we intend to pledge the new aircraft as they deliver into the secured debt market. And I would expect that to be in aggregate $300 million, in excess of that, that will be raised this year. If we have to do that deal today, we would use bank debt, as that's the most efficient for us right now. We're in negotiations currently with banks that we're working with to try to get commitments on that financing. And that market is incredibly robust, so we will definitely pledge these aircraft to the secured debt market.

I see. And then, Jude, I guess, given the leverage, is this cash that could potentially be part of the pool of capital you return to shareholders, or what is it that we need to understand about target liquidity this year? Maybe, with higher debt levels, you need to have a higher liquidity as we think about cash available to be returned this year.

Yeah. We do. In years past, we had targeted $400 million of cash. Now, we're carrying $500 million of cash in order to give us flexibility on the timing of that debt funding. We also have our undrawn revolver which would act as a buffer for these deliveries because we expect to have to pledge the aircraft to the secure debt market in bunches. I do want to point out that PDP balances are pretty significant now. So, that the amount of cash required at the time of the delivery of a new aircraft is really low, so I expect these aircraft to be cash accretive at the time of delivery in the sense that we're expecting 75% LTV, which is far in excess of the required cash to be paid to Airbus at the time of delivery. So, from a cash flow perspective, we're in pretty good shape right now having already raised the liquidity required to fund these transactions and give us the flexibility, as I said, and then the very low LTV requirement in order to make these deliveries cash accretive at time of delivery.

Understood. If I could just squeeze in one final one here, the full-year non-fuel cost outlook of up 5% to 9% is pretty wide. What are the drivers that might cause you to hit either the higher or the lower end of that guide? Is it simply the pace of growth? And then the final question here actually is – this was e-mailed by an investor is, how should we think about the tax rate for this year?

Hey Duane (sic) [Dan], this is Scott. Yeah. Some of the remarks I made a little earlier, the 5% to 9% did take into consideration the fact that we're eliminating our surcharge which is a netting impact on P&L in previous years. And so, that's upwards of maybe $15 million, $20 million on an absolute basis full year. So, if you look at kind of the mid-range to the high end, it's likely where the full year is going to come in at. As far as the effective tax rate, to continue to use a 37% full-year target.

Okay. Thanks, guys.

Thank you, Dan.

Thank you. Our next question comes from the line of Kevin Crissey from Citigroup. Your question, please.

Hi. Thanks for the time. Can you talk about, as you change your fleet, how you're maybe isolating your aircraft or how you're changing the use of your aircraft?

Hey, Kevin. Well, the focus is to make base substitutions this year. And so, as we sit here today, we have MD-80s operating out of bases in Mesa, Arizona; Asheville and St. Petersburg, Florida all of which will be substituted out to entirely Airbus operations by the end of this year. So, as we take deliveries of the aircraft, the focus is to simplify the operation by making a base uniform fleet. And we'll get a lot of the efficiencies out of a single fleet type on a more micro scale as we make those base substitutions. That will leave only MD-80s operating in two bases of Sanford and Vegas by the end of this year and we will have also retired the 757 fleet by the end of this year. So, there will be split fleets only in those two bases and we'll be greatly simplified by the end of this year. So, the focus is simplicity in trying to reduce the disruption to our crews of having to move around the system to follow fleet around.

Terrific. Thanks. And Lukas, maybe you have – it's probably too early, or I'm not exactly sure. I think you had $7 million or so built in for revenue management initiatives for like incremental revenue. Can you talk about where that stands or if it was already built and now you're just reaping the benefit of that? I'm just a little confused as to...

Yeah. So the $7 million should be timing wise, we're on track in terms of the percentage of ASMs we're pricing on our new system, but the benefit of that, you won't see until the back half of this year, because again for the first quarter, we're going to be – just under 20% of our ASM are priced on it. In this kind of an adjustment period, we're going very slow with the new system. It's more about testing and integrating than it is about really pushing some of the old management that we think we can deal with it. So, I'd expect to talk about that more over this summer.

Okay. So, it's too early to say kind of how the AB testing is going, if that's the right way to...

No, it's going well. I just don't think you're going to see a material benefit for the first half of the year, but yeah, we're pleased with where it's going.

Perfect. Thank you all for your time.

Thanks, Kevin.

Thank you. Our next question comes from the line of Steve O'Hara from Sidoti. Your question, please? Stephen O'Hara - Sidoti & Company, LLC: Yeah. Good afternoon. I think you alluded to this, but maybe not, just you had reliability issues in the summer of last year and it sounds like you're taking a more cautious approach this year. I'm just wondering, what the impact you think that was on unit revenue if anything and how long does that take to kind of get back if there's any damage done over the last summer?

It's very difficult to measure because the main metric would be vouchers that were issued due to disrupted passengers, and we're not ready to give guidance on rate differentials of voucher redemptions today. As Scott alluded to, we had a lot of direct expenses associated with operational disruptions in the summer of 2016, that clearly we're managing to avoid this summer. I mean, I can't really give you a whole lot more color and we'll never be able to really measure a passenger that doesn't come back and book precisely, but we feel fairly comfortable with where we are operationally today and our plan going into the summer that we're going to have a much better summer going forward and we continue to see strength in markets. I've said many times over the years that there's not an immediate correlation between bookings and operational challenges and that still remains. Obviously, we've taken a view as a management team that over a long period of time, we're clearly a healthier business, running a better operation and we intend to execute on that basis. Stephen O'Hara - Sidoti & Company, LLC: Okay. And then just maybe on the $35 million to $40 million impact. I think you said that was kind of the full-year impact. I mean, do you think about getting that back over multiple years or is that, as you potentially get most of that back this year or is it more a multiyear process?

Definitely a multiyear process and it will never be zero. Stephen O'Hara - Sidoti & Company, LLC: Okay.

We always will have operational disruptions or we won't fly airplanes, one or the other. Stephen O'Hara - Sidoti & Company, LLC: Right. (42:29). Okay. Thanks.

Yeah.

Thank you. Our next question is a follow-up from the line of Joseph DeNardi from Stifel. Your question please. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Yeah. Thanks. Maybe one for Jude or Greg even, just on the credit card, that kind of tracking ahead of schedule. Can you just talk about the assumption that you gave at the Investor Day of adding $45 million by 2020? Is that just kind of a projection from BofA or do you have your own internal view on how big that could get at this point?

Yes. It was mentioned on the Investor Day. This is Jude. Hey, Joe. Yeah, that's a $2.50 per passenger segment number, which is what we had triangulated based on guidance from BofA, but also on reported results from, say, Spirit. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Okay.

As you can see, based on our $15 million guide, we're tracking pretty well towards that metric. So, that $45 million number in 2020 that we guided to during the Investor Day in November was $2.50 per passenger segment on the forecasted growth rate that we would expect up until that point. And we're certainly well ahead of that. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Okay. So, maybe one for Lukas. I mean is the strength of the card starting to influence market selection? I mean do you allocate some of the profitability from the card to the routes or do you view it as a stand-alone? Does it make larger markets look more attractive?

So, yes, we do take into account all revenue sources in each of the network decisions. But I would say it's, certainly not driving at this point, it's a bit early. But down the line if you see some specific outperformance in regions and cities that we've got a pretty significant performance or say penetration, market share, whatever you want to call it. I think it'll be really interesting for us to explore multiple ways to kind of use that.

Hey, Joe. One of the really interesting and very positive things that we've learned thus far with our credit card program is that subscription rates across the network are pretty uniform. I would have guessed this time last year that our credit card would have had a higher subscription rate in markets that we were the monopoly in and with relatively large number of destinations. That doesn't seem to be the case. And we also are doing quite well with sign-ups in our destination markets, which we assume is kind of VFR, second home travelers. So, I think that's very encouraging commentary because it indicates that we'll continue to find more and more markets where the demand for our credit card will remain strong in all our markets. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Okay. And then, just lastly, I mean I recognize that it's not as valuable to you guys as it is in some of those larger airlines. But I'm just interested to get your perspective on, if you can get the credit card to where it's contributing $40 million, $50 million on your EBIT. I mean, that becomes kind of a meaningful part of your earnings stream. Is that a good thing? Like do you expect that flow of earnings to be less volatile than the core airline or does it just kind of expose the business to different risks?

Absolutely, it's going to be more stable. Most of the revenue generated from the credit card program is spend on our cards that are issued to customers. It doesn't necessarily have anything to do with their travel behavior or their spend at Allegiant. And so, yeah, it's going to be a much more stable input into our P&L and that's why it's so valuable and one of the reasons we're stressing it so much with our sales efforts in channel and to our flight attendants. Absolutely. Joseph DeNardi - Stifel, Nicolaus & Co., Inc.: Great. Thank you.

Thank you. Our next question is a follow-up from the line of Dan McKenzie from Buckingham Research. Your question, please.

Thanks for the time again, you guys. A couple more housecleaning questions here. With respect to fourth quarter costs, I wonder if you could just elaborate a little bit about what allowed you to execute better than you anticipated? It looks like cost came in better and what happened in the quarter, I guess, specifically versus what you thought would happen? Just wonder if you could elaborate a little bit further on that, please?

Trent, you want to take it?

Yeah. Sure. This is Trent. So, we did see some of our stations cost come in better than what we had forecasted. We had forecasted some rate increases in the fourth quarter that didn't show up, Dan. And we also had lower depreciation and then, we had forecasted primarily on IT development work that didn't go into service that we had anticipated.

I see. And then, I guess just from my earlier question, I'm just wondering, did you guys define the principal debt coming due or should I circle back with Chris after the call here?

Yeah. The principal debt coming due was about $120 million.

And that excludes additional rates that we would assume to be amortizing during this period.

Perfect. Thanks, guys.

Thanks, Dan.

Thank you. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Maury Gallagher, CEO, for any further remarks.

Thank you all very much. Appreciate your interest and the questions. If you have follow-up, please talk to Chris, and we'll look forward to talking to you in the next quarterly call. Thanks very much. Have a good night.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.