Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q2 2021 Earnings Presentation
29 slides from Jetblue Airways's earnings presentation, Jul 27, 2021
Slide 1: 2Q21 Earnings Presentation
2Q21 EARNINGS PRESENTATION JULY 27, 2021
Slide 2: Safe Harbor
2 SAFE HARBOR Forward-Looking Information Statements in this Presentation (or otherwise made by JetBlue or on JetBlue’s behalf) contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securi
Slide 3: 2Q 2021 Earnings Update
3 2Q 2021 EARNINGS UPDATE ROBIN HAYES CHIEF EXECUTIVE OFFICER
Slide 4: Robust Progress Towards Earnings Recovery
4 ROBUST PROGRESS TOWARDS EARNINGS RECOVERY *As of July 27, 2021; does not constitute guidance KEY LIQUIDITY UPDATE (1) Refer to reconciliations of non-GAAP financial measures in Appendices A & B (2) EBITDA includes SW&B paid with PSP funds (3) As of June 30, 2021 • GAAP earnings per share of $0.20;
Slide 5: Executing Initiatives to Rebuild Margins and Repair Balance Sheet
5 EXECUTING INITIATIVES TO REBUILD MARGINS AND REPAIR BALANCE SHEET Execute margin accretive revenue and network initiatives Remaining disciplined on cost control to drive superior margins Implementing Northeast Alliance Maintaining fixed cost savings Evolving Loyalty program and JetBlue Travel Prod
Slide 6: Ensuring Long Term Future Success Through Our ESG Strategy
6 • Rolling out new Crewmember education programs • Broadening co-branded customer base through unique path to credit • Growing spend with underrepresented and disadvantaged Business Partners • Achieving domestic carbon neutrality today by using carbon offsets • Expanding use of sustainable aviation
Slide 7: Commercial Update & Outlook
7 COMMERCIAL UPDATE & OUTLOOK JOANNA GERAGHTY PRESIDENT & CHIEF OPERATING OFFICER
Slide 8: Deploying Initiatives to Expand Revenue and Margins
8 DEPLOYING INITIATIVES TO EXPAND REVENUE AND MARGINS Northeast Alliance Fare Options Evolution Co-branded Credit Card JetBlue Travel Products Creating long-term value for our stakeholders • NEA unlocking growth for both JetBlue and American in the Northeast • Codeshare performance exceeding expecta
Slide 9: Renewed Co-Branded Agreement and Expanding Loyalty Program
9 RENEWED CO-BRANDED AGREEMENT AND EXPANDING LOYALTY PROGRAM Industry-Leading Terms Evolving TrueBlue Program Add ~1 point of annualized revenue and margin Enhancing product set Portfolio total spend is up materially over 2019 levels JetBlue Plus Card acquisition strength Accelerating portfolio grow
Slide 10: Generating Continued Sequential Revenue Improvement
1 0 -45% -30% -9% -61% -29% Apr '21 May '21Jun '21 1Q21 2Q21 3Q21 GENERATING CONTINUED SEQUENTIAL REVENUE IMPROVEMENT REVENUE YO2Y GROWTH • Strong revenue rebound during 2Q21 − Revenue declined 29% Yo2Y, following robust acceleration in leisure bookings beginning early February and a 1.5 pts benefit
Slide 11: Capacity Deployment Levered to Demand Recovery
1 1 -28% -13% -3% -41% -15% Apr '21 May '21Jun '21 1Q21 2Q21 3Q21 CAPACITY DEPLOYMENT LEVERED TO DEMAND RECOVERY ASM YO2Y GROWTH PlannedFlown Note: Versus 2019. Current planning assumption as of July 27, 2021; does not constitute guidance • Restoring capacity to pre-pandemic levels to rebuild margin
Slide 12: Financial Update & Outlook
1 2 FINANCIAL UPDATE & OUTLOOK URSULA HURLEY ACTING CHIEF FINANCIAL OFFICER
Slide 13: Summary Financials 2Q 2021
1 3 SUMMARY FINANCIALS 2Q 2021 METRIC 2Q 2021 2Q 2019 Change Yo2 Revenue (US$ million) 1,499 2,105 (29%) Operating Expenses (GAAP) (US$ million) 1,352 1,855 (27%) Operating Expenses (Adjusted) (US$ million) (1) 1,718 1,853 (7%) EBITDA (Adjusted) (US$ million) (1) (86) 379 NM Earnings/(Loss) per Shar
Slide 14: CASM & CASM ex-Fuel Cost Initiatives
1 4 -14% 19% YO2Y CASM & CASM EX-FUEL COST INITIATIVES Planned CASM ex-FuelActual GAAP CASM CASM ex-Fuel (1) Note: Versus 2019. Current planning assumption as of July 27, 2021; does not constitute guidance (1) Operating expenses excluding special items; refer to reconciliations of non-GAAP financial
Slide 15: Mitigating Cost Pressures and Strengthening Margins
1 5 5 – 6% Short-Term headwinds 11% - 13% 2021 Q3 2022 Low single digits Q3 2021 CASM ex-fuel mainly driven by short-term recovery headwinds and maintenance deferrals Structural cost actions to offset maintenance and inflationary headwinds 2022 CASM-ex impacted by margin- accretive Northeast Allianc
Slide 16: Continuing to Invest in High Return Aircraft Fleet
1 6 $331 ~$335 ~$1,000 2Q21 3Q21* 2021* • 2021 CAPEX expected to be ~$1B • Prioritizing highest ROI non-aircraft CAPEX projects CAPEX CONTINUING TO INVEST IN HIGH RETURN AIRCRAFT FLEET* PlannedActual (US$ million) • Taking next generation aircraft to improve margins, fuel efficiency and reduce carbo
Slide 17: Disciplined Approach to Balance Sheet Repair
1 7 DISCIPLINED APPROACH TO BALANCE SHEET REPAIR LEVERAGE DEBT REPAYMENTS* (US$ million) LIQUIDITY / ADJ. NE DEBT Net Adjusted DebtCash & Cash Equivalents (1) Refer to reconciliations of non-GAAP financial measures in Appendix B Adjusted Debt to Cap (1) • Actively lowering debt towers by paying off
Slide 18: Reducing Our Debt Service Obligations
1 8 PRINCIPAL PAYMENTS* DEBT REPAYMENTS* (US$ million) P&L INT REST EXPENSE* / SAVINGS • 1Q21 repaid revolving credit facility for $550M • 2Q21 repaid term loan for $722M $54 $42 $194 3 14 $31 2Q21 3Q21** FY21** Interest SavingsP&L Interest Expense *Cash outflows related to principal repayment sched
Slide 19: Summary of Current Planning Assumptions for 3Q 2021
1 9 SUMMARY OF CURRENT PLANNING ASSUMPTIONS FOR 3Q 2021* METRIC Planning Assumption EBITDA (Non-GAAP) $75 – $175 million Revenue (4%) – (9%) Yo2 Available Seat Miles (ASMs) 0% – (3%) Yo2 CASM ex-Fuel 11% – 13% Yo2 Operating Expenses Related to Other Non-Airline Businesses ~$11 million Estimated Fuel
Slide 20: Questions?
2 0 QUESTIONS?
Slide 21: 2Q 2021 Financial Results
2 1 2Q 2021 FINANCIAL RESULTS US$ Millions 2Q 2021 2Q 2019 Yo2Y % Total operating revenues 1,499 2,105 (28.8) Aircraft fuel and related taxes 336 484 (30.6) Salaries, wages and benefits 577 576 0.2 Landing fees and other rents 174 121 43.7 Depreciation and amortization 133 127 4.8 Aircraft rent 26 2
Slide 22: Non-GAAP Financial Measures
2 2 Non-GAAP Financial Measures JetBlue sometimes uses non-GAAP financial measures in this presentation. Non-GAAP financial measures are financial measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting princip
Slide 23: CASM Ex-Fuel Reconciliation
2 3 Operating expense per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items (“CASM Ex-Fuel”) Operating expenses per available seat mile, or CASM, is a common metric used in the airline industry. We exclude aircraft fuel and related taxes,
Slide 24: Adjusted EBITDA Reconciliation
2 4 LOCATION Adjusted Earnings before interest, taxes, depreciation, amortization, and special Items Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a non-GAAP financial measure. We believes this measure allows investors to better understand the financial performance of t
Slide 25: Operating Expense and EPS Excluding Special Items
2 5 Operating expense, income (loss) before taxes, net income (loss) and earnings (loss) per share, excluding special items Our GAAP results in the applicable periods were impacted by charges that are deemed special items. In the second quarter of 2021, special items include contra- expenses recogni
Slide 26: Appendix B: Calculation of Leverage Ratios
2 6 LOCATION Adjusted debt to capitalization ratio Adjusted debt to capitalization ratio is a non-GAAP financial metric which we believe is helpful to investors in assessing the company's overall debt profile. Adjusted debt includes aircraft operating lease liabilities, in addition to total debt and
Slide 27: Adjusted Net Debt
2 7 LOCATION Adjusted net debt Adjusted net debt is a non-GAAP financial measure which we believe is helpful to investors in assessing our overall debt profile. We reduce our adjusted debt by cash, cash equivalents, and short-term investments resulting in adjusted net debt, to present the amount of
Slide 28: Appendix C: Contractual Order Book
2 8 A220 A321NEO A321NEO LR Total 2021* 7 5 3 15 2022 9 - 3 12 Delivery schedule, as of July 27, 2021 *Includes 9 deliveries received in 1H21 APPENDIX C: CONTRACTUAL ORDER BOOK
Slide 29: Investor Relations Resources
2 9 Investor Presentations http://blueir.investproductions.com/investor-relations/events-and-presentations/presentations Earnings Releases http://blueir.investproductions.com/investor-relations/financial-information/quarterly-results Annual Reports http://blueir.investproductions.com/investor-relati