Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q4 2018 Earnings Presentation
22 slides from Jetblue Airways's earnings presentation, Jan 24, 2019
Slide 1: 4Q 2018 Earnings Presentation
4Q 2018 EARNINGS PRESENTATION JANUARY 24, 2019 1
Slide 2: Safe Harbor
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 Excha
Slide 3: 4Q 2018 Earnings Update - Robin Hayes, CEO
4Q 2018 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-$3.00 EPS BY 2020 PRE-TAX MARGINS JBLU VS PEERS* KEY INITIATIVES 4Q 2018** FY 2018** • 1Q 2019 capacity focused on higher RASM, higher margin opportunities following recent network reallocation efforts 10.4% 10.2% 10.1% 9.2% GROWTH • Cautious approach to 2019 capaci
Slide 5: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 6: Focusing Capacity on JetBlue Points of Strength
FOCUSING CAPACITY ON JETBLUE POINTS OF STRENGTH ASM YOY GROWTH − Recent network reallocations adding frequencies to leisure and VFR markets from New York City airports NYC − Continuing growth through up-gauging in constrained airports (JFK) 9.3% 7.5 – 9.5% − Adding breadth and depth to Boston networ
Slide 7: Unit Revenue: Strong Close-In Trends Continue
UNIT REVENUE: STRONG CLOSE-IN TRENDS CONTINUE RASM YOY GROWTH 0.75 – 3.75% • 4Q RASM as expected, strong close-in demand − 4Q RASM above mid-point of guidance of 1.5-3.5%, ex 2.4% +2 points impact of higher completion factor equal to 0.3 points − Strong close-in demand across network in peak holiday
Slide 8: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 9: 4Q 2018 Results Driven by Strong RASM and Cost Execution
4Q 2018 RESULTS DRIVEN BY STRONG RASM AND COST EXECUTION RASM CASM EX-FUEL* PRE TAX MARGIN* EARNINGS PER SHARE* (US$ cents) (US$ cents) (US$ cents) 12.67 12.98 10.4% 2.03 10.2% 8.58 8.27 9.7% 0.55 0.50 (Non- 0.32 (GAAP) GAAP) (GAAP) (Non- (GAAP) (Non- GAAP) GAAP) 4Q 2017 4Q 2018 4Q 2017 4Q 2018 4Q 2
Slide 10: Unit Costs: Executed on Costs in 2018
UNIT COSTS: EXECUTED ON COSTS IN 2018 2018 UNDERLYING CASM EX-FUEL YOY GROWTH* Guidance as of 1/25/18 Actuals as of 12/31/18 • Underlying 2018 CASM Ex-Fuel better than plan and at 1.5% – 3.5% mid-point of guidance range for 1H and 2H ‒ Achieved expected inflection during 2H 2018 despite 2.5% lower c
Slide 11: Unit Costs: Tracking to 2019 Guide
UNIT COSTS: TRACKING TO 2019 GUIDE CASM EX-FUEL YOY GROWTH* • 4Q and 2018 CASM Ex-Fuel better than guidance 1.5 – 3.5% ‒ 4Q below (3.5) to (1.5)% guidance range, including small benefit of improved completion factor to end 2018 and maintenance timing 0.0 – 2.0% ‒ Mitigated CASM ex-fuel headwinds fro
Slide 12: Unit Costs: Tracking to Our Three-Year Plan
UNIT COSTS: TRACKING TO OUR THREE-YEAR PLAN 2018-2020 CASM EX-FUEL YOY GROWTH • 1H-2H 2019 improvement driven by Tech Ops and labor 1.5 – 3.5% ‒ 1H headwind includes recently-signed pilot contract ‒ Timing of engine maintenance impacts quarterly 0.0 – 2.0% progression on CASM ex-fuel • 2019 and 2020
Slide 13: Structural Cost Progress Continues
STRUCTURAL COST PROGRESS CONTINUES SAVINGS CATEGORY PROGRESS KEY MILESTONES OPPORTUNITY Signed contract for heavy maintenance of E190 airframe to anticipated end of life Tech Ops Signed various agreements for supply and maintenance of aircraft parts and components On track to fully execute initiativ
Slide 14: Accretive Fleet Growth and Reinvestment Continues
ACCRETIVE FLEET GROWTH AND REINVESTMENT CONTINUES FLEET* CAPITAL EXPENDITURES Aircraft Non-Aircraft Guidance as of 1/24/19 253 253 259 35 35 35 $1.5 - $1.7b 28 28 34 $1.2 - $1.4b 130 130 130 1,600 $35m - $45m 60 60 60 $85m - $265m 2018 1Q 2019E 2019E 1Q 2019E 2019E 2020E E190 A320 A321 HD A321 Mint
Slide 15: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION SOURCES / USES OF CASH CAPITAL ALLOCATION FRAMEWORK (US$ millions) General Guidelines SOURCES USES Net share • Maintain investment grade financial metrics 334 repurchases Debt 687 • Balanced approach to growth, reinvestment and capital raise 222 Debt repayment
Slide 16: 2019 Guide Summary
2019 GUIDE SUMMARY CAPACITY RASM CASM EX-FUEL* ALL-IN FUEL PRICE 1Q 2019 FY 2019 1Q 2019 FY 2019 1Q 2019 FY 2019 1Q 2019 FY 2019 7.5 – 9.5% 5.0 – 7.0% (2.0) – 1.0% N/A 1.5 – 3.5% 0.0 – 2.0% $2.01 / gal N/A CAPEX AIRCRAFT CAPEX NON-AIRCRAFT OTHER INCOME / (EXPENSE) JTP / JTV (EXPENSES) 1Q 2019 FY 201
Slide 17: Slide 17
Slide 18: Appendix A: 4Q 2018 Financial Results
APPENDIX A: 4Q 2018 FINANCIAL RESULTS US$ Millions 4Q 2018 4Q 2017 Var % Total Operating Revenues 1,968 1,758 12.0 Aircraft fuel and related taxes 476 368 29.4 Salaries, wages and benefits 543 490 10.9 Landing fees and other rents 97 96 0.7 Depreciation and amortization 129 119 8.2 Aircraft rent 28
Slide 19: Appendix B: Other Non-Airline Operating Expenses
APPENDIX B: OTHER NON-AIRLINE OPERATING EXPENSES (JBTP/JTV EXPENSES, $m) $45 – $55 $44 $35 $11 – $15 $12 $12 $9 $11 $11 – $15 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019E 2017 2018 2019E 19
Slide 20: Appendix C: Anticipated Delivery Schedule
APPENDIX C: ANTICIPATED DELIVERY SCHEDULE CURRENT AIRBUS ORDERS A220 A321 NEO Total 2019 - 13* 13 2020 1 15 16 2021 6 16 22 2022 8 15 23 2023 19 14 33 2024 22 12 34 2025 4 - 4 Total 60 85 145 Delivery schedule as of January 24th, 2019 * The above represents the current delivery schedule set forth in
Slide 21: Appendix D: Relevant JetBlue Materials
APPENDIX D: 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
Slide 22: Appendix E: Note on Non-GAAP Financial Measures
APPENDIX E: NOTE ON NON-GAAP FINANCIAL MEASURES Note A within our quarterly earnings release (provided in our Current Report on Form 8-K furnished to the Securities and Exchange Commission on January 24, 2019) provides a reconciliation of non-GAAP financial measures used in this presentation and pro