Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q2 2019 Earnings Presentation
24 slides from Jetblue Airways's earnings presentation, Jul 23, 2019
Slide 1: 2Q 2019 Earnings Presentation
2Q 2019 EARNINGS PRESENTATION JULY 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: 2Q 2019 Earnings Update: Robin Hayes, CEO
2Q 2019 EARNINGS UPDATE ROBIN HAYES CHIEF EXECUTIVE OFFICER
Slide 4: On Track to Reach $2.50 - $3.00 EPS by 2020
ON TRACK TO REACH $2.50 - $3.00 EPS BY 2020 PRE-TAX MARGINS JBLU VS PEERS* HIGHLIGHTS / KEY DEVELOPMENTS 2Q 2019** • 2019 capacity growth between 5.5 and 6.5%; first A321neo delivered four months late; expect entry into service during the fall. Further A321neo delays reduce 2020 planned capacity gro
Slide 5: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK JOANNA GERAGHTY PRESIDENT & CHIEF OPERATING OFFICER
Slide 6: Modest 3Q Capacity Growth to Support EPS Goals
MODEST 3Q CAPACITY GROWTH TO SUPPORT EPS GOALS ASM YOY GROWTH − Adding new VFR/leisure markets (Pointe-à-Pitre, Guadeloupe; San José, Costa Rica) 3Q capacity unusually low, driven by NEO NYC delays and adjustments to support RASM and − Managing impact of runway construction in JFK during summer peak
Slide 7: Unit Revenue: Close-in Strength Continues into 3Q
UNIT REVENUE: CLOSE-IN STRENGTH CONTINUES INTO 3Q RASM YOY GROWTH • 2Q RASM above original mid-point of guidance 1H 2019 RASM slightly positive; holiday placement drives a 2.25 pt swing range, driven by strong close-in trends 0.5 – 3.5% 3.1% − Peak strength and strong bookings during the quarter mit
Slide 8: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 9: Executing Towards 2020 EPS Goals
EXECUTING TOWARDS 2020 EPS GOALS RASM CASM & CASM EX-FUEL* PRE-TAX MARGIN* EARNINGS PER SHARE* (US$ cents) (US$ cents) (US$ cents) 13.74 13.14 12.74 11.58 11.2% 11.3% 0.60 8.32 8.46 0.59 8.1% 0.37 CASM CASM (GAAP) (Non- (Non- CASM CASM Ex-Fuel (GAAP) Ex-Fuel GAAP) GAAP) (GAAP) (Non- (Non- GAAP) GAAP
Slide 10: Unit Costs: Expect 2019 CASM Ex-Fuel Growth Between 0.5-1.5%
UNIT COSTS: EXPECT 2019 CASM EX-FUEL GROWTH BETWEEN 0.5-1.5% CASM EX-FUEL YOY GROWTH* • 2Q CASM ex-fuel at lower end of guidance range ‒ 2Q beat mainly driven by benefits of Structural Cost 1.5 – 3.5% Program ramping, and timing of marketing and other expenses 0.5 – 2.5% ‒ Modestly higher than expec
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* • 1H 2019 CASM ex-fuel below the low end of guidance range; continue to target original full year 2019 guidance 1.5 – 3.5% range ‒ One point of timing (e.g., engine maintenance and (0.5) - 1.5% 0.5 – 1.5% marketing expe
Slide 12: Structural Cost Progress Continues
STRUCTURAL COST PROGRESS CONTINUES SAVINGS CATEGORY PROGRESS KEY MILESTONES OPPORTUNITY Signed long-term V2500 engine agreement, covering just over 50% of existing A320 fleet Tech Ops Completed additional service agreements for aircraft parts and key engine components Negotiated long-term deal relat
Slide 13: Accretive Fleet Growth and Reinvestment Continues
ACCRETIVE FLEET GROWTH AND REINVESTMENT CONTINUES FLEET* CAPITAL EXPENDITURES Aircraft Non-Aircraft Guidance as of 7/23/19 253 254 259 1 6 $1.25 - $1.45b 35 35 35 $1.20 - $1.35b 28 28 28 $1.2 - $1.4b 130 130 130 $35m - $50m 60 60 60 $250m - $300m 1Q 2019 2Q 2019 2019E 3Q 2019E 2019E 2020E E190 A320
Slide 14: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION SOURCES / USES OF CASH LEVERAGE RATIOS* (US$ millions) 12/31/2018 6/30/2019 Trailing 12 months as of 6/30/2019 1.57x SOURCES USES Net share Debt 408 330 repurchases 1.33x raise 280 Debt repayments Cash from operations 1,455 CAPEX and 1,259 and other other Begi
Slide 15: 2019 Guide Summary
2019 GUIDE SUMMARY CAPACITY RASM CASM EX-FUEL* ALL-IN FUEL PRICE 3Q 2019 FY 2019 3Q 2019 FY 2019 3Q 2019 FY 2019 3Q 2019 FY 2019 3.0 – 5.0% 5.5 – 6.5% 0.5 – 3.5% N/A 0.5 – 2.5% 0.5 – 1.5% $2.18/gal N/A CAPEX AIRCRAFT CAPEX NON-AIRCRAFT OTHER INCOME / (EXPENSE) JTP / JTV (EXPENSES) 3Q 2019 FY 2019 3Q
Slide 16: Questions?
QUESTIONS?
Slide 17: Appendix A: Non-GAAP Financial Measures
APPENDIX A Non-GAAP Financial Measures JetBlue sometimes uses non-GAAP measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the U.S., or GAAP. We believe these non-GAAP measures provide a meani
Slide 18: 2Q 2019 Financial Results
2Q 2019 FINANCIAL RESULTS US$ Millions 2Q 2019 2Q 2018 Var % Total Operating Revenues 2,105 1,928 9.2 Aircraft fuel and related taxes 484 491 (1.4) Salaries, wages and benefits 576 486 18.5 Landing fees and other rents 121 122 (0.6) Depreciation and amortization 127 114 11.3 Aircraft rent 25 24 4.8
Slide 19: Consolidated 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 20: 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 21: Appendix B: Calculation of Leverage Ratios
APPENDIX B: CALCULATION OF LEVERAGE RATIOS JETBLUE AIRWAYS CORPORATION – NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO CAPITALIZATION RATIO (in millions) (unaudited) LOCATION June 30, 2019 December 31, 2018 Long-term debt and finance lease obligations $ 1,217 $ 1,361 Current maturities of long-term de
Slide 22: 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 June 30, 2019 December 31, 2018 Long-term debt and finance lease obligations $ 1,217 $ 1,361 Current maturities of long-te
Slide 23: Appendix C: Anticipated Aircraft Delivery Schedule
APPENDIX C: 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 July 23, 2019 * 13 aircraft were contractually scheduled for
Slide 24: 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