Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q2 2018 Earnings Presentation
22 slides from Jetblue Airways's earnings presentation, Jul 24, 2018
Slide 1: 2Q 2018 Earnings Presentation
2Q 2018 EARNINGS PRESENTATION JULY 24, 2018 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: 2Q 2018 Earnings Update – Robin Hayes, CEO
2Q 2018 EARNINGS UPDATE ROBIN HAYES CEO
Slide 4: Working Towards Superior Margins in Changing Landscape
WORKING TOWARDS SUPERIOR MARGINS IN CHANGING LANDSCAPE PRE-TAX MARGINS JBLU VS PEERS* KEY INITIATIVES 2Q 2018 FY 2017** TTM** • Reducing 4Q capacity growth by 2 points 13.0% • Factoring higher fuel prices in preliminary capacity planning for 2019 12.4% 12.8% GROWTH • Focus on strengthening relevance
Slide 5: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 6: Managing Capacity to Support Margin Commitments
MANAGING CAPACITY TO SUPPORT MARGIN COMMITMENTS SCHEDULED ASM* YOY GROWTH − Completion factor better than planned from operational improvements, lack of northeast runway construction and OTP initiatives NYC Flown guidance 7.5 - 9.5% − Growing through up-gauging in constrained airports (JFK) 6.5 - 7.
Slide 7: Unit Revenue: Strong First Half; Taking Action in 2H
UNIT REVENUE: STRONG FIRST HALF; TAKING ACTION IN 2H RASM YOY GROWTH • 2Q RASM as expected, solid close-in demand continues − Broad close-in strength in Florida and Latin markets − 3.75 point headwind from calendar placement and comps 1Q/2Q 2018 RASM 6.1% impacted by Holiday − Customer compensation
Slide 8: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 9: 2Q 2018 Results Impacted by Higher Fuel Prices and Calendar
2Q 2018 RESULTS IMPACTED BY HIGHER FUEL PRICES AND CALENDAR RASM CASM EX-FUEL* PRE TAX MARGIN* EARNINGS PER SHARE* (US$ cents) (US$ cents) (US$ cents) 12.89 12.74 17.7% 62 8.26 38 8.2% 8.11 (Non (Non GAAP) GAAP) 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2017 2Q 2018 2Q 2018 2Q 2017 2Q 2018 2Q 2018 (GAAP) (
Slide 10: Unit Costs: Managing Headwinds to Achieve Cost Goals
UNIT COSTS: MANAGING HEADWINDS TO ACHIEVE COST GOALS CASM EX-FUEL YOY GROWTH* • 2Q CASM ex-fuel better than 2 to 4% guidance 2 – 4% − Strong focus on cost management; timing of expenses shifted to later in the year, equal to ~0.5 pts 3.1% 1 – 3% − Better than planned completion factor and improved o
Slide 11: Expect CASM ex-Fuel Inflection During 2H 2018
EXPECT CASM EX-FUEL INFLECTION DURING 2H 2018 CASMCASM EXEX--FUELFUEL YOY YOY GROWTH* GROWTH • CASM ex-fuel growth negative by 2H 2018 (Year over 2 Year growth) (Year over Year growth) − 1H growth of 2.5%, on lower end of 2-4% guidance despite low 1Q completion factor − 2H expected to decline (3.5%)
Slide 12: Structural Cost Progress Continues
STRUCTURAL COST PROGRESS CONTINUES SAVINGS CATEGORY PROGRESS KEY MILESTONES OPPORTUNITY Signed contract for heavy maintenance of A320s; advancing RFP for v2500 engine maintenance Tech Ops Signed enhanced LLP engine coverage to drive savings outside of A220 fleet transaction Continued renegotiations
Slide 13: Accretive Fleet Growth and Reinvestment Continues
ACCRETIVE FLEET GROWTH AND REINVESTMENT CONTINUES FLEET* CAPITAL EXPENDITURES Aircraft Non-Aircraft 243 245 247 249 253 $150m - $200m ~$1.2b 35 32 34 34 34 21 21 23 25 28 $850m - $1bn 130 130 130 130 130 $35m - $50m $275m - $310m 60 60 60 60 60 2017 1Q 2018 2Q 2018 3Q 2018E 2018E 3Q 2018E 2018E 2017
Slide 14: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION SOURCES / USES OF CASH CAPITAL ALLOCATION FRAMEWORK (US$ millions) General Guidelines SOURCES USES • Maintain investment grade financial metrics Debt Net share 279 343 raise Repurchases • Balanced approach to growth, reinvestment and capital 234 Debt return to
Slide 15: 2018 Guide Summary
2018 GUIDE SUMMARY CAPACITY RASM CASM EX-FUEL* ALL-IN FUEL PRICE 3Q 2018 FY 2018 3Q 2018 FY 2018 3Q 2018 FY 2018 3Q 2018 FY 2018 7.5 – 9.5% 6.5 – 7.5% 0 – 3% N/A 1 – 3% (1) – 1% $2.33 / gal N/A CAPEX AIRCRAFT CAPEX NON-AIRCRAFT OTHER INCOME / (EXPENSE) JBTP / JTV (EXPENSES) 3Q 2018 FY 2018 3Q 2018 F
Slide 16: Slide 16
Slide 17: Appendix A: 2Q 2018 Financial Results
APPENDIX A: 2Q 2018 FINANCIAL RESULTS US$ millions 2Q 2018 2Q 2017 Var % Total Operating Revenues 1,928 1,836 5.0 Aircraft fuel and related taxes 491 325 51.1 Salaries, wages and benefits 486 464 4.6 Landing fees and other rents 110 101 8.0 Depreciation and amortization 120 109 9.6 Aircraft rent 23
Slide 18: Appendix B: Anticipated Delivery Schedule
APPENDIX B: ANTICIPATED DELIVERY SCHEDULE PRIOR CURRENT AIRBUS ORDERS E190 A320 NEO A321 CEO/NEO Total A220 A321 CEO/NEO Total 2018 - - 6* 6* - 6* 6* 2019 - - 13 13 - 13 13 2020 10 6 7 23 5 15 20 2021 7 16 4 27 4 16 20 2022 7 3 17 27 8 15 23 2023 - - 14 14 19 14 33 2024 - - 5 5 22 12 34 2025 - - - -
Slide 19: Appendix C: Hurricane Impact from 2017
APPENDIX C: HURRICANE IMPACT FROM 2017 3Q 2017 4Q 2017 2017 ASM (2.7%) (2.9%) (1.4%) RASM +0.2 pts (0.7) pts (0.2) pts CASM ex-Fuel +2.6 pts +2.4 pts +1.3 pts Pre-Tax Margin (1.5%) (2.2%) (0.9%) EPS Impact (6c) (9c) (15c) 19
Slide 20: Appendix D: E190 Impairment and Transition Costs
APPENDIX D: E190 IMPAIRMENT AND TRANSITION COSTS TRANSITION COSTS (US$ million) 2018 2019 2020 2021-2025** Cash costs One-time costs $90-110* Ongoing (transition costs)1 $5-15 $15-25 $35-45 $80-115 Total $95-125 $15-25 $35-45 $80-115 Non-cash costs 2018 2019 2020 2021-2024** E190 value adjustment $3
Slide 21: 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
Slide 22: Appendix F: Note on Non-GAAP Financial Measures
APPENDIX F: 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 July 24, 2018) provides a reconciliation of non-GAAP financial measures used in this presentation and provid