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Form 8-K JETBLUE AIRWAYS CORP For: Oct 25

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October 25, 2016 7:36 AM EDT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 25, 2016
jetbluelogohiresaq2015a01a05.jpg
JETBLUE AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
87-0617894
(State of Other Jurisdiction of Incorporation)
 
(I.R.S. Employer Identification No.)
 
 
 
27-01 Queens Plaza North, Long Island City, New York
 
11101
(Address of principal executive offices) 
 
 (Zip Code)
(718) 286-7900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02 Results of Operations and Financial Condition
On October 25, 2016 we issued a press release announcing our financial results for the third quarter ended September 30, 2016. A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
The information included under Item 2.02 of this report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
 
 
 
 
Exhibit
Number

  
Description
99.1

  
Press Release dated October 25, 2016 of JetBlue Airways Corporation announcing financial results for the third quarter ended September 30, 2016.




 






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
 
 
 
 
 
 
 
 
 
JETBLUE AIRWAYS CORPORATION
 
 
 
 
 
(Registrant)
 
 
 
 
 
 
 
 
Date:
October 25, 2016
 
By:
/s/     Alexander Chatkewitz
 
 
 
 
Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer)


EXHIBIT INDEX
 
 
 
 
Exhibit
Number

  
Exhibit
99.1

  
Press Release dated October 25, 2016 of JetBlue Airways Corporation announcing financial results for the third quarter ended September 30, 2016.





JETBLUE ANNOUNCES THIRD QUARTER RESULTS

NEW YORK (October 25, 2016) -- JetBlue Airways Corporation (NASDAQ: JBLU) today reported its results for the third quarter 2016:

•
Operating income of $354 million in the third quarter, an increase of 1% over the third quarter of 2015.

•
Pre-tax income of $330 million in the third quarter, an increase of 2.6% over the third quarter of 2015.

•
Net income of $199 million, or $0.58 per diluted share. This compares to JetBlue’s third quarter 2015 net income of $198 million, or $0.58 per diluted share.

Financial Performance

JetBlue reported third quarter operating revenues of $1.7 billion. Revenue passenger miles for the third quarter increased 7.6% to 11.9 billion on a capacity increase of 6.3%, resulting in a third quarter load factor of 86.3%, a 1 point increase year over year.

Yield per passenger mile in the third quarter was 13.20 cents, down 5.9% compared to the third quarter of 2015. Passenger revenue per available seat mile (PRASM) for the third quarter 2016 decreased 4.7% year over year to 11.39 cents and operating revenue per available seat mile (RASM) decreased 3.5% year over year to 12.55 cents.

Compared with last year, operating expenses for the quarter increased 3%, or $42 million. Interest expense for the quarter declined 10.2%, or $4 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the third quarter decreased 3% year over year to 9.99 cents. Excluding fuel and profit sharing, third quarter CASM1 increased 3.1% to 7.53 cents.

“I would like to thank our nearly 20,000 crewmembers for going above and beyond expectations this quarter once again. They are truly JetBlue’s greatest asset and what makes our unique model so successful. I am particularly pleased with how they handled Hurricane Matthew and helped our Customers travel safely to their destination as fast as possible” said Robin Hayes, JetBlue’s President and CEO.


Fuel Expense and Hedging

In the third quarter JetBlue had hedges in place for approximately 24% of its fuel consumption. The realized fuel price in the quarter was $1.48 per gallon, a 20% decrease versus third quarter 2015 realized fuel price of $1.85.

JetBlue has hedged approximately 25% of its fourth quarter 2016 projected fuel consumption using jet fuel swaps. Based on the fuel curve as of October 14th, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.63 in the fourth quarter.


- 1 -



Liquidity and Cash Flow

JetBlue ended the quarter with $1.5 billion in unrestricted cash and short term investments, or about 22% of trailing twelve month revenue. In addition, JetBlue maintains approximately $600 million in undrawn lines of credit.

During the third quarter, JetBlue repaid $61 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $306 million in regularly scheduled debt and capital lease obligations and plans to buy out the leases on at least four A320 aircraft during the fourth quarter.

“I am honored to have been part of the JetBlue family for over 10 years and proud to have worked alongside our crewmembers who are among the best I’ve seen during my years in the airline industry. JetBlue is financially strong, its leadership bench deep and its future bright” said Mark Powers, JetBlue’s Chief Financial Officer.

Fourth Quarter and Full Year Outlook

For the fourth quarter of 2016, year over year CASM excluding fuel and profit sharing is expected to grow between 4.5% and 6.5%, including a negative impact from hurricane Matthew of approximately half a point. For the full year 2016, JetBlue expects year over year CASM excluding fuel and profit sharing to grow between 0.0% and 1.5%, consistent with prior guidance.

In the fourth quarter 2016, capacity is expected to increase between 3.0% and 5.0%, including a negative impact from hurricane Matthew of approximately half a point. For the full year 2016, JetBlue expects capacity to increase between 8.5% and 9.0%.

JetBlue will conduct a conference call to discuss its quarterly earnings today, October 25, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.

About JetBlue
JetBlue is New York's Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale - Hollywood, Los Angeles (Long Beach), Orlando, and San Juan. JetBlue carries more than 35 million customers a year to 97 cities in the U.S., Caribbean, and Latin America with an average of 925 daily flights. For more information please visit JetBlue.com.


Notes
(1)
Consolidated operating cost per available seat mile, excluding fuel, profit sharing and related taxes (CASM Ex-Fuel and Profit Sharing) is a non-GAAP financial measure that we use to measure our core performance.  Note A provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which represent our management's beliefs and assumptions concerning future events. When used in this document and in documents incorporated herein by reference, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to

- 2 -



many factors, including, without limitation, our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy; our significant fixed obligations and substantial indebtedness; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our reliance on a limited number of suppliers; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional government regulation; changes in our industry due to other airlines' financial condition; acts of war or terrorist attacks; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for domestic and business air travel; the spread of infectious diseases; adverse weather conditions or natural disasters; and external geopolitical events and conditions. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change prior to the end of each quarter or year.
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this press release, could cause our results to differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, in addition to others not described in this press release, those described in Item 1A of our 2015 Form 10-K under "Risks Related to JetBlue" and "Risks Associated with the Airline Industry". In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur.





- 3 -



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
JETBLUE AIRWAYS CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
 
 
 
 
 
 
September 30,
 
Percent
 
September 30,
 
Percent
 
 
 
 
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
 
 
OPERATING REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Passenger
$
1,571

 
$
1,551

 
1.3

 
$
4,536

 
$
4,455

 
1.8

 
 
 
Other
161

 
136

 
17.9

 
455

 
367

 
24.0

 
 
 
 
Total operating revenues
1,732

 
1,687

 
2.6

 
4,991

 
4,822

 
3.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aircraft fuel and related taxes
293

 
342

 
(14.4
)
 
782

 
1,048

 
(25.4
)
 
 
 
Salaries, wages and benefits
421

 
389

 
8.0

 
1,270

 
1,139

 
11.5

 
 
 
Landing fees and other rents
98

 
91

 
8.2

 
276

 
264

 
4.5

 
 
 
Depreciation and amortization
102

 
84

 
21.0

 
289

 
252

 
14.4

 
 
 
Aircraft rent
28

 
30

 
(8.5
)
 
84

 
92

 
(9.3
)
 
 
 
Sales and marketing
60

 
69

 
(12.1
)
 
197

 
199

 
(0.9
)
 
 
 
Maintenance materials and repairs
153

 
132

 
15.9

 
427

 
371

 
15.1

 
 
 
Other operating expenses
223

 
199

 
11.7

 
650

 
571

 
14.0

 
 
 
 
Total operating expenses
1,378

 
1,336

 
3.0

 
3,975

 
3,936

 
1.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
354

 
351

 
1.0

 
1,016

 
886

 
14.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating margin
20.5

%
20.8

%
(0.3
)
pts.
20.4

%
18.4

%
2.0

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(28
)
 
(32
)
 
(10.2
)
 
(85
)
 
(98
)
 
(12.8
)
 
 
 
Capitalized interest
2

 
2

 
6.2

 
6

 
6

 
(6.4
)
 
 
 
Interest income and other
2

 
1

 
387.5

 
5

 
—

 
(1,370.3
)
 
 
 
 
Total other income (expense)
(24
)
 
(29
)
 
(16.6
)
 
(74
)
 
(92
)
 
(19.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
330

 
322

 
2.6

 
942

 
794

 
18.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax margin
19.1

%
19.1

%
—

pts.
18.9

%
16.5

%
2.4

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
131

 
124

 
6.1

 
363

 
307

 
18.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME
$
199

 
$
198

 
0.4

 
$
579

 
$
487

 
18.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.61

 
$
0.63

 
 
 
$
1.79

 
$
1.55

 
 
 
 
 
Diluted
$
0.58

 
$
0.58

 
 
 
$
1.70

 
$
1.42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
 
 
 
 
 
 
 
 
 
 
 
Basic
323.7

 
313.8

 
 
 
322.8

 
313.6

 
 
 
 
 
Diluted
343.1

 
343.5

 
 
 
342.4

 
345.8

 
 
 



- 4 -



 
 
 
 
 
 
 
 
 
 
 
 
 
 
JETBLUE AIRWAYS CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPARATIVE OPERATING STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
 
 
 
 
 
September 30,
 
Percent
 
September 30,
 
Percent
 
 
 
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue passengers (thousands)
 
9,953

 
9,237

 
7.7

 
28,731

 
26,190

 
9.7

 
Revenue passenger miles (millions)
 
11,905

 
11,063

 
7.6

 
34,434

 
31,157

 
10.5

 
Available seat miles (ASMs) (millions)
 
13,796

 
12,976

 
6.3

 
40,421

 
36,632

 
10.3

 
Load factor
 
86.3

%
85.3

%
1.0

pts.
85.2

%
85.1

%
0.1

pts.
Aircraft utilization (hours per day)
 
12.2

 
12.2

 
—

 
12.2

 
12.0

 
1.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average fare
 
$
157.87

 
$
167.96

 
(6.0
)
 
$
157.88

 
$
170.12

 
(7.2
)
 
Yield per passenger mile (cents)
 
13.20

 
14.02

 
(5.9
)
 
13.17

 
14.30

 
(7.9
)
 
Passenger revenue per ASM (cents)
 
11.39

 
11.96

 
(4.7
)
 
11.22

 
12.16

 
(7.7
)
 
Revenue per ASM (cents)
 
12.55

 
13.01

 
(3.5
)
 
12.35

 
13.16

 
(6.2
)
 
Operating expense per ASM (cents)
 
9.99

 
10.30

 
(3.0
)
 
9.83

 
10.75

 
(8.5
)
 
Operating expense per ASM, excluding fuel and related taxes (cents)
 
7.86

 
7.67

 
2.5

 
7.89

 
7.88

 
0.2

 
Operating expense per ASM, excluding fuel and profit sharing and related taxes (cents) (1)
 
7.53

 
7.31

 
3.1

 
7.55

 
7.59

 
(0.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Departures
 
86,801

 
82,989

 
4.6

 
253,325

 
236,370

 
7.2

 
Average stage length (miles)
 
1,091

 
1,094

 
(0.3
)
 
1,099

 
1,092

 
0.6

 
Average number of operating aircraft during period
 
219.6

 
209.0

 
5.1

 
217.8

 
206.3

 
5.6

 
Average fuel cost per gallon, including fuel taxes
 
$
1.48

 
$
1.85

 
(20.0
)
 
$
1.37

 
$
2.01

 
(32.0
)
 
Fuel gallons consumed (millions)
 
198

 
185

 
7.0

 
573

 
522

 
9.8

 
Average number of full-time equivalent crewmembers
 
 
 
 
 
 
 
15,521

 
14,418

 
7.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Refer to Note A, Consolidated operating cost per available seat mile, excluding fuel, profit sharing and related taxes, at the end of our Earnings Release for more information on this non-GAAP measure.

JETBLUE AIRWAYS CORPORATION
 
 
 
 
SELECTED CONSOLIDATED BALANCE SHEET DATA
 
 
 
 
(in millions)
 
September 30,
 
December 31,
 
2016
 
2015
 
 
 
 
Cash and cash equivalents
$
873

 
$
318

Total investment securities
636

 
607

Total assets
9,579

 
8,644

Total debt
1,689

 
1,827

Stockholders' equity
3,846

 
3,210

 
 
 
 
SOURCE: JetBlue Airways Corporation
 
 
 

- 5 -



Note 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 (“GAAP”). JetBlue believes these metrics provide a meaningful comparison of our results to others in the airline industry and our prior year results.  Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The table below shows a reconciliation of non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies. 

Consolidated operating cost per available seat mile, excluding fuel, profit sharing and related taxes (“CASM Ex-Fuel and Profit Sharing”). CASM is a common metric used in the airline industry. We exclude aircraft fuel, profit sharing and related taxes from operating cost per available seat mile to determine CASM Ex-Fuel and Profit Sharing. We believe CASM Ex-Fuel and Profit Sharing provides investors the ability to measure financial performance excluding items beyond our control such as (i) fuel costs, which are subject to many economic and political factors beyond our control and (ii) profit sharing, which is sensitive to volatility in earnings. We believe this measure is more indicative of our ability to manage costs and is more comparable to measures reported by other major airlines.


NON-GAAP FINANCIAL MEASURE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL, PROFIT SHARING AND RELATED TAXES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions, per ASM data in cents)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
$
 
per ASM
 
$
 
per ASM
 
$
 
per ASM
 
$
 
per ASM
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total operating expenses
$
1,378

 
$
9.99

 
$
1,336

 
$
10.30

 
$
3,975

 
$
9.83

 
$
3,936

 
$
10.75

Less: Aircraft fuel and related taxes
293

 
2.13

 
342

 
2.63

 
782

 
1.94

 
1,048

 
2.87

Operating expenses, excluding fuel and related taxes
1,085

 
7.86

 
994

 
7.67

 
3,193

 
7.89

 
2,888

 
7.88

Less: Profit sharing and related taxes
46

 
0.33

 
47

 
0.36

 
137

 
0.34

 
107

 
0.29

Operating expense, excluding fuel, profit sharing and related taxes
$
1,039

 
$
7.53

 
$
947

 
$
7.31

 
$
3,056

 
$
7.55

 
$
2,781

 
$
7.59





CONTACTS
JetBlue Investor Relations
Tel: +1 718 709 2202
JetBlue Corporate Communications
Tel: +1 718 709 3089

- 6 -


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