Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q3 2017 Earnings Presentation
19 slides from Jetblue Airways's earnings presentation, Oct 24, 2017
Slide 1: 3Q 2017 Earnings Presentation
1 3Q 2017 EARNINGS PRESENTATION OCTOBER 24, 2017
Slide 2: Safe Harbor
2 SAFE HARBOR This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, 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 amended, or the Exc
Slide 3: 3Q 2017 Earnings Update
3Q 2017 EARNINGS UPDATE ROBIN HAYES PRESIDENT & CEO
Slide 4: Financial Impact: Summary of Hurricanes Irma and Maria
4 FINANCIAL IMPACT IMPACT SUMMARY OF HURRICANES IRMA AND MARIA OPERATIONAL IMPACT • 2,500+ flights cancelled, net of 550+ extra flights dispatched • Operational disruption for over 30 consecutive days • Revenue impact 3Q: $44 million; 4Q: $70 - $90 million • Operating income impact 3Q: $33 million;
Slide 5: Creating Shareholder Value Through Margin Initiatives Despite Short Term Challenges
5 CREATING SHAREHOLDER VALUE THROUGH MARGIN INITIATIVES DESPITE SHORT TERM CHALLENGES PRE-TAX MARGINS JBLU* VS PEERS Average of peer set (AAL, ALK, DAL, LUV, SAVE, UAL) , consensus and reported results • Working to sustain above average pre-tax margin and towards goal of superior margins − Targeted
Slide 6: 3Q 2017 Highlights
6 3Q 2017 HIGHLIGHTS Commercial initiatives Commercial initiatives • Continue to see benefits of market relevance in Ft. Lauderdale • New Mint routes exceeding expectations in 3Q Commercial initiatives Targeted growth • Boston continues to produce superior margins; growing business segment • Managin
Slide 7: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 8: Capacity: Targeted Growth Continues
8 ASM YOY GROWTH 8.9% 4.2% 4.8% 3.7% 2016 2017E* 2017E 1Q 2017 2Q 2017 3Q 2017 4Q 2017E ASM YO GROWTH CAPACITY: TARGETED GROWTH CONTINUES 6.5% - 8.5% 4.5% - 5.5% * Guidance as of 1/26/17 • 92% of growth remains in 3 Focus Cities in past five years − Boston growing to 200 flights/day and Ft. Lauderda
Slide 9: Network Update: Boston and Mint Continue to Outperform
9 NETWORK UPDATE: BOSTON AND MINT CONTINUE TO OUTPERFORM KEY DEVELOPMENTS IN 3Q 2017 BOSTON Margin-accretive leisure/business split; announced new service to Minneapolis further increasing relevance Expect to up-gauge in Boston leisure markets with A321 All-Core fleet FORT LAUDERDALE RASM grow
Slide 10: Unit Revenue: Monitoring Trends into 4Q 2017
10 RASM YOY GROWTH* UNIT REVENUE: MONITORING TRENDS INTO 4Q 2017 • Continued solid demand environment in 3Q − Strength in Boston business, Mint markets − Co-brand card continues to exceed expectations • 3Q RASM within initial guidance ex-storm impact − RASM growth ex-storms +0.6%, in line with origi
Slide 11: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 12: 3Q 2017 Results
12 3Q 2017 RESULTS INCOME STATEMENT ($ billion) PRE-TAX PROFIT MARGIN UNIT REVENUES AND COSTS ($ cents) Operating Margin 17.1% 20.5% Pre-Tax Margin 16.2% 19.1% Net Margin 9.9% 11.5% EPS (basic) 0.55 0.61 EPS (diluted) 0.55 0.58 *Excluding impact of hurricanes and cost shift, 3Q 2017 Pre-Tax Margin w
Slide 13: Unit Costs: Managing Near Term Headwinds
13 QUARTERLY CASM EX-FUEL YOY GROWTH* -1.4% -0.8% 2.5% 4.6% 3.3% 5.1% 2.7% 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017E 2017E UNIT COSTS: MANAGING NEAR TERM HEADWINDS • 3Q CASM ex-fuel growth below original guidance − +2.7 points from hurricanes − +0.5 points to mitigate operatio
Slide 14: Cost Control: The Path from Good to Great Margins
14 COST CONTROL: THE PATH FROM GOOD TO GREAT MARGINS CASM EX-FUEL TRENDS* **Refer to Appendix A on Non-GAAP Financial Measures Tech Ops Airports Corporate TOTAL Distribution STRUCTURAL COST SAVINGS PLAN (2018-2020) ACHIEVEMENTS $250-$300m 9/12 Airport lobbies completed Consolidating contracts $1
Slide 15: Fleet: Accretive Fleet Growth
15 FLEET: ACCRETIVE FLEET GROWTH AIRBUS ORDER BOOK*FLEET DETAIL* *As of 10/24/17 CEO: Current Engine Option; NEO: New Engine Option • Flexibility in order book allows for selecting most margin- accretive configuration - Expect a mix of Mint/All-Core-seat deliveries in 2018 *As of 10/24/17 Year A320n
Slide 16: Leverage and Capex: Balanced Capital Allocation
16 4Q 2017E 2017E 2017-2020E LEVERAGE AND CAPEX: BALANCED CAPITAL ALLOCATION ADJUSTED DEBT / CAP RATIO CAPITAL EXPENDITURES Aircraft Non-Aircraft Adj Debt / Cap = On Balance Sheet Debt + 7x Aircraft Rent / Debt + Equity Average of ~$1.1bn* *Includes Aircraft and Non-Aircraft Capital Expenditures 70%
Slide 17: 2017 Guidance Summary
17 2017 GUIDANCE SUMMARY 17 4Q 2017 2017 Capacity 4.5 – 5.5% 4.0 – 5.0% RASM (3.0) – 0.0% N/A CASM ex-Fuel 5.0 – 7.0% 4.0 – 5.0% All-In Fuel Price $1.83 N/A CAPEX (Aircraft) $330m – $380m $1.06bn - $1.11bn CAPEX (Non-Aircraft) $40m – $60m $100m - $120m Other Income / (Expense) ($15m - $20m) ($75m -
Slide 18: Questions
QUESTIONS
Slide 19: Appendix A: Note on Non-GAAP Financial Measures
19 APPENDIX A: NOTE ON NON-GAAP FINANCIAL MEASURES Consolidated operating cost per available seat mile, excludes fuel and related taxes, and operating expenses related to other non-airline expenses (CASM Ex-Fuel) is a non-GAAP financial measure that we use to measure our core performance. Note A wit