Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — IPO Roadshow (October 2019)
37 slides from Jetblue Airways's IPO roadshow presentation, Oct 29, 2019
Slide 1: 2019-1 EETC Investor Presentation
Issuer Free Writing Prospectus Filed pursuant to Rule 433(d) Registration No. 333-230007 October 29, 2019 2019-1 EETC Investor Presentation October 2019
Slide 2: Safe Harbor
SAFE HARBOR 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 Securities Exchange Act of 1934, as
Slide 3: Transaction Overview
TRANSACTION OVERVIEW ï,§ JetBlue Airways Corporation (“JetBlue ” or “JBLU”) intends to raise up to approximately $772,255,000 through the offering of the following Pass Through Certificates, Series 2019-1 (the “Certificates”) – Class AA face amount of $588,685,000 – Class A face amount of $183,570,0
Slide 4: JetBlue Airways Series 2019-1 EETC Structural Summary
JETBLUE AIRWAYS SERIES 2019-1 EETC STRUCTURAL SUMMARY Class AA Certificates Class A Certificates Issuance Amount $588,685,000 $183,570,000 Expected Ratings Aa3 / AA- A2 / A (Moody’s / Fitch) Initial / Max LTV1 46.5% / 46.7% 61.0% / 61.2% Weighted Average Life (Years) 9.0 6.9 Regular Distribution Dat
Slide 5: Key Structural Elements
KEY STRUCTURAL ELEMENTS Two Classes of ï,§ Each class of Certificates will benefit from a separate liquidity facility covering three consecutive semi-annual interest Certificates payments Offered ï,§ Same waterfall both before and after an event of default Waterfall ï,§ Interest on Eligible Pool Bal
Slide 6: Overview of the Collateral Pool
Overview of the Collateral Pool
Slide 7: Aircraft Collateral Summary
AIRCRAFT COLLATERAL SUMMARY ï,§ JetBlue obtained appraised values for the aircraft from ASG, BK, and MBA. Aggregate LMM appraised value is approximately $1.27 billion1 ï,§ LMM1 of the appraisals indicate a minimum collateral cushion of 53.3% and 38.8% on the Class AA and Class A Certificates, respec
Slide 8: Young, Narrowbody Assets Secure JBLU 2019-1 EETC
YOUNG, NARROWBODY ASSETS SECURE JBLU 2019-1 EETC JBU 2019-1 ï,§ The JBLU 2019-1 collateral pool consists entirely of narrowbody aircraft that were delivered new to JetBlue between February 2017 and December 2018 ï,§ Of the 27 aircraft delivered to JetBlue since 2017, 25 will be included in the JBLU
Slide 9: The Collateral: Airbus A321-200
THE COLLATERAL: AIRBUS A321-200 The Airbus A321-200 has continued the heritage of the A320 family’s “most marketable aircraft” reputation ï,§ Recent vintages of the A321-200 have been able to command higher market valuations due to the implementation of certain enhancements – Sharklets improve fuel
Slide 10: 2019-1 Position of Collateral in JetBlue's Fleet
2019-1 POSITION OF COLLATERAL IN JETBLUE’S FLEET Strategic Importance to JetBlue A321-231HD (200 Core Seats) • The seven A321-231HD aircraft included in the JBLU 2019-1 portfolio offer 38 additional seats in comparison to the restyled A320 providing the flexibility for growth in slot constrained air
Slide 11: Company Update
Company Update
Slide 12: A Different Approach to the Traditional Low Cost Model
A DIFFERENT APPROACH TO THE TRADITIONAL LOW COST MODEL COMPETITIVE ADVANTAGE Differentiated High-Value Low Product & Costs Geography Services OUTCOME Produce Inspiring Create Returns for Culture for Value for Owners Crewmembers Customers SAFETY CARING INTEGRITY PASSION FUN 12
Slide 13: Building Blocks of Our EPS Initiative
BUILDING BLOCKS OF OUR EPS INITIATIVE PRODUCT CAPITAL NETWORK FLEET COST OFFERING ALLOCATION Focused Customer A320 Structural Cost Capital Deployment Growth Segmentation Restyling Program Network Loyalty A321 On-Time Performance Balance Maturation Mint Sheet JetBlue Travel Products A321 Network Real
Slide 14: Q3 2019 Pre-Tax Margins JBLU vs Peers
Q3 2019 EARNINGS UPDATE PRE-TAX MARGINS JBLU VS PEERS* 3Q 2018 3Q 2019 GAAP Non-GAAP** Non-GAAP 12.9% 12.2% 11.9% 11.4% 9.0% 3.4% Peers *Average of Non-GAAP pre-tax margins for peer set (AAL, ALK, DAL, LUV, SAVE, UAL), based on reported results, as discussed in peers’ 3Q 2019 1934 Act reports **JetB
Slide 15: Capacity Growth: Benefited from an Improving Operation
CAPACITY GROWTH: BENEFITED FROM AN IMPROVING OPERATION Q3 2019 ASM YOY GROWTH 4.8% 3Q capacity at high end of 3 – 5% guidance range, driven by solid operation, despite impact from Hurricane Dorian - Deepening relevance with added transcon frequency NYC - Adding new VFR/leisure markets from JFK: San
Slide 16: Pre-Tax Margin Gaining Traction from Cost Execution
PRE-TAX MARGIN GAINING TRACTION FROM COST EXECUTION RASM (US$ cents) 3Q 12.91 12.80 2018 2019 • RASM YoY change impacted by pressure from Latin/Caribbean region *Refer to reconciliations of GAAP vs non-GAAP in Appendix A CASM & CASM EX-FUEL* (US$ cents) 3Q 12.41 11.29 8.31 8.33 CASM CASM CASM CASM E
Slide 17: 0 60 60 60 60 1Q 2019 2Q 2019 3Q 2019 2019E E190 A320
253 254 254 259 6 1 1 35 35 35 35 28 28 28 28 130 130 130 130 60 60 60 60 1Q 2019 2Q 2019 3Q 2019 2019E E190 A320 A321 HD A321 Mint A321neo HD • Expect a maximum of 6 A321neos total in 2019 *Refer to anticipated aircraft delivery book in Appendix B 17
Slide 18: We Are Reshaping Our Fleet to Improve Returns
WE ARE RESHAPING OUR FLEET TO IMPROVE RETURNS 2000* 2005* 2013* 2019* 2020* & BEYOND A321 A321 A320 E190 A220s LR XLR CEOs NEOs • Largest fleet • Helped build • Largest aircraft • Adds fuel efficiency • Flexible platform • Adds fuel efficiency • Adds fuel efficiency • Restyling program to relevance
Slide 19: Our Capex Is Focused on Fleet Reinvestment Order Book
OUR CAPEX IS FOCUSED ON FLEET REINVESTMENT ORDER BOOK Capacity guidance and capital expenditure assumptions 34 assume delivery of a maximum 33 of six NEO aircraft in 2019 23 23 19 22 6 8 15 1 12 12 17 14 15 14 12 12 12 2 2 2019* 2020 2021 2022 2023 2024 2025 2026 A321neo A220 Note: Anticipated deliv
Slide 20: One of the Strongest Balance Sheets in the Airline Industry
OUR EFFORTS HAVE RESULTED IN ONE OF THE STRONGEST BALANCE SHEETS IN THE AIRLINE INDUSTRY ï,§ We have one of the strongest balance sheets in the industry both in terms of leverage and liquidity levels – Our balance sheet strength stacks up favorably even when compared to investment grade peers, such
Slide 21: Significantly Lowered Leverage While Returning Cash to Shareholders
WE HAVE SIGNIFICANTLY LOWERED OUR LEVERAGE OVER TIME WHILE RETURNING CASH TO SHAREHOLDERS ADJ. DEBT/CAP*; DEBT REPAYMENT 60% 800 55% 700 50% 46% 600 40% 35% 500 29%¹ 30% 28% 28%¹ 400 million $ US 300 20% 200 10% 100 0% 0 2014 2015 2016 2017 2018 2019 Adj. Debt / Cap Debt Repayment² 1 Results have be
Slide 22: JetBlue Compared to Peers (TTM)
JETBLUE COMPARED TO PEERS (TTM) 1 2 2 Ratings (S/M/F) BB / Ba1 / BB BBB- / Baa3 / BBB- BB / Ba2 / BB BB- / Ba3 / BB- BB- / Ba1 / BB Operating Scale Revenue ($ mm) 8,032 46,310 42,862 45,393 3,724 Passengers (Millions) 42.5 ND 162.0 207.0 ND Fleet Size 254 1,353 1,329 1,551 135 Operating Statistics L
Slide 23: Significant JetBlue Credit Rating Improvement Over Time
SIGNIFICANT JETBLUE CREDIT RATING IMPROVEMENT OVER TIME • Strong balance sheet metrics vs. peers • Low leverage in comparison to industry average • Consistent profitability Strengths • Target liquidity between 10% - 12% • Undrawn credit facilities • High quality & quantity of unencumbered aircraft •
Slide 24: JetBlue 2020 & Beyond
JETBLUE 2020 & BEYOND 1. JetBlue’s differentiated business model and culture creates opportunities for accretive growth. 2. Since 2014 we’ve continued our journey to improve absolute and relative margins. 3. We believe our ‘Building Blocks’ will improve our margins and returns, and power meaningful
Slide 25: Appendix A: Non-GAAP Financial Measures and Aircraft Delivery Schedule
Appendix A Non-GAAP Financial Measures and Aircraft Delivery Schedule
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures JetBlue sometimes uses non-GAAP measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the U.S., or GAAP. We believe these non-GAAP measures provide a meaningful compa
Slide 27: Consolidated CASM Excluding Fuel and Special Items
Consolidated operating cost per available seat mile, excluding fuel and related taxes, and certain 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 rel
Slide 28: Operating Expense, Income before Taxes, Net Income and EPS Excluding Special Items
Operating Expense, Income before Taxes, Net Income and Earnings per Share, excluding special items, gain on equity method investments, and impact of tax reform Our GAAP results in the applicable periods were impacted by the following: (a) the 2017 tax reform, (b) a gain on equity method investments,
Slide 29: Adjusted Debt to Capitalization Ratio
NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO CAPITALIZATION RATIO (in millions) (unaudited) September 30, 2019 December 31, 2018 Long-term debt and finance lease obligations $ LOCATION 1,320 $ 1,361 Current maturities of long-term debt and finance leases 316 309 Operating lease liabilities - aircraft
Slide 30: Adjusted Debt to Capitalization Ratio (2014-2017)
NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO CAPITALIZATION RATIO (in millions) (unaudited)(1) December 31, 2017 LOCATION December 31, 2016 December 31, 2015 December 31, 2014 Long-term debt and capital leases $ 1,003 $ 1,195 $ 1,395 $ 1,968 Short-term borrowings and current maturities 196 189 448 26
Slide 31: Calculation of Leverage Ratios: Adjusted Debt to EBITDAR (Modified)
CALCULATION OF LEVERAGE RATIOS: MODIFIED CALCULATION NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO EBITDAR RATIO (in millions) (unaudited) As of September 30, 2019 DOCUMENT Long-term debt and finance lease obligations LOCATION $ 1,320 Current maturities of long-term debt and finance leases 316 Operati
Slide 32: Calculation of Leverage Ratios: Adjusted Net Debt to EBITDAR (Modified)
CALCULATION OF LEVERAGE RATIOS: MODIFIED CALCULATION NON-GAAP FINANCIAL MEASURE ADJUSTED NET DEBT TO EBITDAR RATIO (in millions) (unaudited) As of September 30, 2019 DOCUMENT Long-term debt and finance lease obligations LOCATION $ 1,320 Current maturities of long-term debt and finance leases 316 Ope
Slide 33: Calculation of Leverage Ratios: Adjusted Debt to EBITDAR (Historical)
CALCULATION OF LEVERAGE RATIOS: HISTORICAL PRESENTATION NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO EBITDAR RATIO (in millions) (unaudited) As of As of September 30, 2019 December 31, 2018 DOCUMENT Long-term debt and finance lease obligations LOCATION $ 1,320 $ 1,361 Current maturities of long-term
Slide 34: Calculation of Leverage Ratios: Adjusted Net Debt to EBITDAR (Historical)
CALCULATION OF LEVERAGE RATIOS: HISTORICAL PRESENTATION NON-GAAP FINANCIAL MEASURE ADJUSTED NET DEBT TO EBITDAR RATIO (in millions) (unaudited) As of As of September 30, 2019 December 31, 2018 Long-term debt and finance lease obligations $ 1,320 $ 1,361 DOCUMENT Current maturities of long-term debt
Slide 35: Appendix B: Aircraft Delivery Schedule
Appendix B Aircraft Delivery Schedule
Slide 36: Anticipated Aircraft Delivery Schedule
ANTICIPATED AIRCRAFT DELIVERY SCHEDULE CURRENT AIRBUS ORDERS A220 A321neo Total 2019* - 12* 12* 2020 1 14 15 2021 6 17 23 2022 8 15 23 2023 19 14 33 2024 22 12 34 2025 12 - 12 2026 2 - 2 Total 70 84 154 Delivery schedule as of September 30, 2019 * 13 aircraft were contractually scheduled for deliver
Slide 37: Blue®
Blue®