Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q1 2019 Earnings Presentation
28 slides from Jetblue Airways's earnings presentation, Apr 23, 2019
Slide 1: 1Q 2019 Earnings Presentation
1Q 2019 EARNINGS PRESENTATION APRIL 23, 2019 1
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: 1Q 2019 Earnings Update – Robin Hayes, CEO
1Q 2019 EARNINGS UPDATE ROBIN HAYES CEO
Slide 4: Executing Our Plan to Reach $2.50-$3.00 EPS by 2020
EXECUTING OUR PLAN TO REACH $2.50-$3.00 EPS BY 2020 PRE-TAX MARGINS JBLU VS PEERS* KEY INITIATIVES 1Q 2019** FY 2018** • Continue to expect 2019 capacity between 4.5 and 6.5%; continue 10.1% to expect 2019 CASM Ex-Fuel growth between 0 and 2% GROWTH • Anticipate capacity growth slowing to lower end
Slide 5: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP CHIEF COMMERCIAL OFFICER
Slide 6: Focusing Capacity on JetBlue Points of Strength
FOCUSING CAPACITY ON JETBLUE POINTS OF STRENGTH ASM YOY GROWTH − A321NEOs entering fleet in 2019 allows for new, VFR/leisure markets, given longer range NYC − Plans to add service to Guayaquil, Ecuador and London, U.K. 10.1% − Adding relevance by shifting capacity from underperforming markets 7.7%*
Slide 7: Unit Revenue: Driven by Completion Factor and Calendar
UNIT REVENUE: DRIVEN BY COMPLETION FACTOR AND CALENDAR RASM YOY GROWTH • 1Q RASM at lower end of guidance range, driven by completion factor 1.0 – 4.0% − YoY swing from the lowest to one of the highest 1Q • 1Q18/19 completion factor impact equal to completion factors in past five years 1.5 points •
Slide 8: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 9: 1Q 2019 Results Driven by Softer Trough and Calendar RASM
1Q 2019 RESULTS DRIVEN BY SOFTER TROUGH AND CALENDAR RASM CASM & CASM EX-FUEL* PRE-TAX MARGIN* EARNINGS PER SHARE* (US$ cents) (US$ cents) (US$ cents) 12.50 12.12 11.63 11.62 6.4% 6.4% 0.28 0.26 8.66 8.58 3.7% 0.16 3.1% 0.14 CASM CASM (Non- (Non- CASM CASM Ex-Fuel Ex-Fuel (GAAP) (GAAP) (Non- (GAAP)
Slide 10: Unit Costs: Strong Quarter Close; Tracking to 2019 Guide
UNIT COSTS: STRONG QUARTER CLOSE; TRACKING TO 2019 GUIDE CASM EX-FUEL YOY GROWTH* • 1Q CASM ex-fuel better than guidance 1.5 – 3.5% 1.5 – 3.5% ‒ 1Q below 1.5 to 3.5% guidance range, includes benefit of high completion factor (0.75 points) ‒ Quarterly results driven by benefits of Structural Cost Pro
Slide 11: Unit Costs: Tracking to Our Three-Year Plan (2018-2020)
UNIT COSTS: TRACKING TO OUR THREE-YEAR PLAN (2018-2020) CASM EX-FUEL YOY GROWTH* • Anticipated 1H-2H 2019 improvement driven by cost 1.5 – 3.5% control initiatives and ASM tailwinds 0.0 – 2.0% ‒ Exact timing of engine maintenance expected to impact quarterly progression 0.9% • Expecting progress dur
Slide 12: Accretive Fleet Growth and Reinvestment Continues
ACCRETIVE FLEET GROWTH AND REINVESTMENT CONTINUES FLEET* CAPITAL EXPENDITURES Aircraft Non-Aircraft Guidance as of 4/23/19 253 253 254 259 35 35 35 35 $1.5 - $1.7b 34 28 28 29 $1.2 - $1.4b 130 130 130 130 $30m - $45m 60 60 60 60 $300m - $350m 2018 1Q 2019 2Q 2019E 2019E 2Q 2019E 2019E 2020E E190 A32
Slide 13: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION SOURCES / USES OF CASH LEVERAGE RATIOS* (US$ millions) 12/31/2018 3/31/2019 Trailing 12 months as of 3/31/2019 SOURCES USES 1.57x Net share 1.49x 333 Debt repurchases 687 raise 297 Debt repayments Cash from CAPEX and operations 1,103 other and other 1,143 inve
Slide 14: 2019 Guide Summary
2019 GUIDE SUMMARY CAPACITY RASM CASM EX-FUEL* ALL-IN FUEL PRICE 2Q 2019 FY 2019 2Q 2019 FY 2019 2Q 2019 FY 2019 2Q 2019 FY 2019 4.5 – 6.5% 4.5 – 6.5% 1.0 – 4.0% N/A 1.5 – 3.5% 0.0 – 2.0% $2.21 / gal N/A CAPEX AIRCRAFT CAPEX NON-AIRCRAFT OTHER INCOME / (EXPENSE) JTP / JTV (EXPENSES) 2Q 2019 FY 2019
Slide 15: Questions?
QUESTIONS?
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures JetBlue sometimes uses non-GAAP measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the U.S., or GAAP. We believe these non-GAAP measures provide a meaningful compa
Slide 17: Appendix A: 1Q 2019 Financial Results
APPENDIX A: 1Q 2019 FINANCIAL RESULTS US$ Millions 1Q 2019 1Q 2018 Var % Total Operating Revenues 1,871 1,754 6.7 Aircraft fuel and related taxes 437 417 4.9 Salaries, wages and benefits 575 499 15.2 Landing fees and other rents 115 109 6.2 Depreciation and amortization 124 110 11.5 Aircraft rent 25
Slide 18: CASM Ex-Fuel Reconciliation
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 19: 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 and Impact of Tax Reform Our GAAP results in the applicable periods include the impacts of the 2017 tax reform and charges that are deemed special items which we believe make our results difficult to c
Slide 20: Appendix B: Recast Financial Results Under New Lease Accounting Standard
APPENDIX B: RECAST FINANCIAL RESULTS UNDER NEW LEASE ACCOUNTING STANDARD 2017 2018 Metric As Reported Recast As Reported Recast Earnings per share (diluted) $3.41 $3.45 $0.60 $0.60 Earnings per share, ex special items (diluted)* $1.74 $1.74 $1.55 $1.55 Pre-Tax Margin 13.0% 13.1% 2.9% 2.9% Pre-Tax Ma
Slide 21: Consolidated Statements of Operations
JETBLUE AIRWAYS CORPORATION - CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (unaudited) Adjustments Adjustments As Reported for Recast As Reported for Recast Fiscal 2017 ASC 842 Fiscal 2017 Fiscal 2018 ASC 842 Fiscal 2018 OPERATING REVENUES Passenger $ 6,761 $ - $ 6,7
Slide 22: Selected Consolidated Balance Sheets
JETBLUE AIRWAYS CORPORATION – SELECTED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) As Reported Recast As Reported Recast December 31, Adjustments for December 31, December 31, Adjustments for December 31, 2017 ASC 842 2017 2018 ASC 842 2018 CURRENT ASSETS Prepaid expenses and other $ 213 $
Slide 23: CASM Ex-Fuel Reconciliation
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 24: 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 and Impact of Tax Reform Our GAAP results in the applicable periods include the impacts of the 2017 tax reform and charges that are deemed special items which we believe make our results difficult to c
Slide 25: Appendix C: Calculation of Leverage Ratios
APPENDIX C: CALCULATION OF LEVERAGE RATIOS JETBLUE AIRWAYS CORPORATION – NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO CAPITALIZATION RATIO (in millions) (unaudited) LOCATION March 31, 2019 December 31, 2018 Long-term debt and finance lease obligations $ 1,271 $ 1,361 Current maturities of long-term d
Slide 26: Adjusted Debt to EBITDAR Ratio
JETBLUE AIRWAYS CORPORATION – NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO EBITDAR RATIO (in millions) (unaudited) DOCUMENT LOCATION Trailing Twelve Months Trailing Twelve Months March 31, 2019 December 31, 2018 Long-term debt and finance lease obligations $ 1,271 $ 1,361 Current maturities of long-t
Slide 27: Appendix D: Anticipated Delivery Schedule
APPENDIX D: ANTICIPATED DELIVERY SCHEDULE CURRENT AIRBUS ORDERS A220 A321 NEO Total 2019 - 13* 13 2020 1 14 15 2021 6 17 23 2022 8 15 23 2023 19 14 33 2024 22 12 34 2025 4 - 4 Total 60 85 145 Delivery schedule as of April 23, 2019 * The above represents the current delivery schedule set forth in our
Slide 28: Appendix E: Relevant JetBlue Materials
APPENDIX E: RELEVANT JETBLUE MATERIALS www.investor.jetblue.com/investor-relations DOCUMENT LOCATION Investor Presentations http://blueir.investproductions.com/investor-relations/events-and-presentations/presentations Earnings Releases http://blueir.investproductions.com/investor-relations/financial