JetBlue Airways Corporation (NASDAQ:JBLU) today reported its
results for the fourth quarter and full year 2015:
- Operating income of $330 million in the
fourth quarter. This compares to operating income of $169 million
in the fourth quarter of 2014. For the full year 2015, JetBlue
reported operating income of $1.2 billion. This compares to
operating income of $515 million in 2014.
- Pre-tax income of $303 million in the
fourth quarter. This compares to pre-tax income of $140 million in
the fourth quarter of 2014. For the full year 2015, JetBlue
reported pre-tax income of $1.1 billion. This compares to pre-tax
income excluding special items1 of $382 million in 2014. On a GAAP
basis, pre-tax income was $623 million in 2014, which included the
gain on sale of JetBlue’s wholly-owned subsidiary LiveTV.
- Net income of $190 million, or $0.56
per diluted share, in the fourth quarter. This compares to
JetBlue’s fourth quarter 2014 net income excluding special items1
of $87 million, or $0.26 per diluted share. On a GAAP basis, net
income was $88 million in the fourth quarter 2014, or $0.26 per
diluted share, which included income tax relating to the gain on
sale of JetBlue’s wholly-owned subsidiary LiveTV. For the full year
2015, JetBlue reported net income of $677 million, or $1.98 per
diluted share. This compares to JetBlue’s 2014 net income excluding
special items1 of $232 million, or $0.70 per diluted share. On a
GAAP basis, net income was $401 million in 2014, or $1.19 per
diluted share, which included the gain on sale of JetBlue’s
wholly-owned subsidiary LiveTV.
Financial Performance
JetBlue reported record fourth quarter operating revenues of
$1.6 billion. Revenue passenger miles for the fourth quarter
increased 12.4% to 10.6 billion on a capacity increase of 10.4%,
resulting in a fourth quarter load factor of 83.6%, an increase of
1.5 points year over year.
Yield per passenger mile in the fourth quarter was 13.62 cents,
down 3.6% compared to the fourth quarter of 2014. Passenger revenue
per available seat mile (PRASM) for the fourth quarter 2015
decreased 1.9% year over year to 11.39 cents and operating revenue
per available seat mile (RASM) decreased 0.2% year over year to
12.62 cents.
Operating expenses for the quarter decreased 1.1%, or $13
million, from the prior year period. Interest expense for the
quarter declined 14.7%, or $5 million, as JetBlue continued to
reduce its debt. JetBlue’s operating expense per available seat
mile (CASM) for the fourth quarter decreased 10.4% year over year
to 10.01 cents. Excluding fuel and profit sharing, fourth quarter
CASM2 increased 0.7% to 7.29 cents.
Operational Performance
In 2015, system arrival performance, or A14, improved 0.4
points. Completion factor improved 0.8 points. In the fourth
quarter, completion factor improved 0.1 points.
“We posted another strong quarter, producing above industry
average revenue performance and running a safe and reliable
operation. I want to thank all our 18,000 crewmembers for their
terrific efforts throughout the year,” said Robin Hayes, JetBlue’s
President and CEO.
Fuel Expense and Hedging
In the fourth quarter JetBlue had hedges in place for
approximately 14% of its fuel consumption. This resulted in a
realized fuel price of $1.68 per gallon, a 37.8% decrease versus
fourth quarter 2014 realized fuel price of $2.70. JetBlue recorded
$33 million in losses on fuel hedges settling during the fourth
quarter.
JetBlue continues to have no hedges in place for the first and
second quarters of 2016. Based on the fuel curve as of January
15th, JetBlue expects an average price per gallon of fuel,
including the impact of fuel taxes, of $1.12 in the first quarter.
Beyond the second quarter, JetBlue has hedged about 10% of its
expected second half of the year 2016 fuel consumption.
Liquidity and Cash Flow
JetBlue ended the quarter with $876 million in unrestricted cash
and short term investments, or about 14% of trailing twelve month
revenue. In addition, JetBlue maintains approximately $600 million
in undrawn lines of credit.
During the fourth quarter, JetBlue repaid $90 million in
regularly scheduled debt and capital lease obligations, bringing
total annual debt payments to $390 million. In addition, JetBlue
bought out the leases on six A320 aircraft for a total of $110
million. JetBlue anticipates paying approximately $454 million in
regularly scheduled debt and capital lease obligations in 2016 and
plans to continue to opportunistically prepay other debt. JetBlue
expects to pay approximately $51 million in regularly scheduled
debt and capital obligations in the first quarter of 2016.
As part of its previously announced 2012 share buyback, JetBlue
purchased 3 million shares from October 30, 2015 through December
31, 2015 at a weighted average share price of $25.71. For the full
year 2015, JetBlue purchased 9.8 million shares for approximately
$227 million.
“We continue to generate healthy free cash flow and de-risk our
business,” said Mark Powers, JetBlue’s Chief Financial Officer.
“Looking forward, we will continue to focus on strengthening our
balance sheet and prioritizing ROIC accretive initiatives,
including structural cost programs.”
First Quarter and Full Year
Outlook
The following outlook does not include the impact of Winter
Storm Jonas, which caused over 900 flight cancellations within the
last week.
For the first quarter of 2016, change in CASM excluding fuel and
profit sharing is expected to be between 0.0% and negative 2.0%
versus the year-ago period. Excluding fuel and profit sharing, CASM
for the full year 2016 is forecasted to grow between zero and two
percent year over year.
Capacity is expected to increase between 14% and 16% in the
first quarter 2016 and between 8.5% and 10.5% for the full year.
Severe winter weather caused a significant number of flight
cancellations in the first quarter of 2015. This increases
JetBlue’s 2016 capacity growth rate compared to a scheduled versus
scheduled basis by about 2.5% in the first quarter and 0.5% for the
full year.
JetBlue will conduct a conference call to discuss its quarterly
earnings today, January 28, 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 95 cities in the U.S., Caribbean, and Latin
America with an average of 900 daily flights. For more information
please visit JetBlue.com.
Notes
(1) Pre-tax and net income excluding special
items are non-GAAP financial measures 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. (2)
Consolidated operating cost per available
seat mile, excluding fuel and 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 statements of a forward-looking
nature which represent our management's beliefs and assumptions
concerning future events. When used in this document, 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 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 metropolitan market and the effect of increased congestion
in this market; 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; changes in or additional government
regulation; changes in our industry due to other airlines'
financial condition; 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; and external geopolitical events and conditions. Further
information concerning these and other factors is contained in the
Company's Securities and Exchange Commission filings, including but
not limited to, the Company's 2014 Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. We undertake no obligation to
update any forward-looking statements to reflect events or
circumstances that may arise after the date of this release.
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions,
except share and per share amounts) (unaudited)
Three Months Ended Twelve Months Ended December
31, Percent December 31, Percent
2015 2014 Change 2015 2014
Change OPERATING REVENUES Passenger $ 1,438 $ 1,327
8.3 $ 5,893 $ 5,343 10.3 Other 156 119
31.0 523 474 10.4 Total operating
revenues 1,594 1,446 10.2 6,416 5,817 10.3
OPERATING
EXPENSES Aircraft fuel and related taxes 300 436 (31.3 ) 1,348
1,912 (29.5 ) Salaries, wages and benefits 401 331 21.2 1,540 1,294
19.1 Landing fees and other rents 78 73 8.2 342 321 6.7
Depreciation and amortization 93 86 6.3 345 320 7.7 Aircraft rent
30 31 (3.7 ) 122 124 (1.8 ) Sales and marketing 65 49 32.9 264 231
14.3 Maintenance materials and repairs 119 113 4.9 490 418 17.3
Other operating expenses 178 158 13.0
749 682 9.8 Total operating expenses
1,264 1,277 (1.1 ) 5,200
5,302 (1.9 )
OPERATING INCOME 330 169
1,216 515 Operating margin 20.7 % 11.7 % 9.0 pts. 19.0 % 8.9
% 10.1 pts.
OTHER INCOME (EXPENSE) Interest expense
(30 ) (35 ) (14.7 ) (128 ) (148 ) (13.9 ) Capitalized interest 2 3
(47.7 ) 8 14 (42.7 ) Interest income and other 1 3 (74.6 ) 1 1
(82.2 ) Gain on sale of subsidiary - -
- - 241 (100.0 ) Total other income
(expense) (27 ) (29 ) (6.2 ) (119 ) 108 (210.5 )
INCOME
BEFORE INCOME TAXES 303 140 1,097 623 Pre-tax margin
19.0 % 9.7 % 9.3 pts. 17.1 % 10.7 % 6.4 pts. Income tax
expense 113 52 420
222
NET INCOME $ 190 $ 88 $ 677
$ 401
EARNINGS PER COMMON SHARE: Basic
$ 0.60 $ 0.29 $ 2.15 $ 1.36 Diluted $
0.56 $ 0.26 $ 1.98 $ 1.19
Weighted average shares outstanding (thousands): Basic 318,941
300,035 315,101 294,732 Diluted 342,383 342,691 344,817 343,294
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS (unaudited)
Three Months Ended Twelve Months Ended
December 31, Percent December 31,
Percent 2015 2014 Change
2015 2014 Change Revenue
passengers (thousands) 8,911 7,987 11.6 35,101 32,078 9.4 Revenue
passenger miles (millions) 10,554 9,392 12.4 41,711 37,813 10.3
Available seat miles (ASMs) (millions) 12,626 11,436 10.4 49,258
44,994 9.5 Load factor 83.6 % 82.1 % 1.5 pts. 84.7 % 84.0 % 0.7
pts. Aircraft utilization (hours per day) 11.6 11.5 1.3 11.9 11.8
1.3 Average fare $ 161.35 $ 166.17 (2.9 ) 167.89 $ 166.57
0.8 Yield per passenger mile (cents) 13.62 14.13 (3.6 ) 14.13 14.13
(0.0 ) Passenger revenue per ASM (cents) 11.39 11.61 (1.9 ) 11.96
11.88 0.7 Operating revenue per ASM (cents) 12.62 12.64 (0.2 )
13.03 12.93 0.8 Operating expense per ASM (cents) 10.01 11.17 (10.4
) 10.56 11.78 (10.4 ) Operating expense per ASM, excluding fuel
(cents) 7.64 7.35 4.0 7.82 7.53 3.8 Operating expense per ASM,
excluding fuel and profit sharing and related taxes (cents) (a)
7.29 7.23 0.7 7.51 7.48 0.5 Airline operating expense per ASM
(cents) (b) 10.01 11.17 (10.4 ) 10.56 11.70 (9.8 )
Departures 80,135 74,526 7.5 316,505 294,800 7.4 Average stage
length (miles) 1,093 1,088 0.5 1,092 1,088 0.4 Average number of
operating aircraft during period 212.7 200.4 6.1 207.9 196.2 6.0
Average fuel cost per gallon, including fuel taxes $ 1.68 $ 2.70
(37.8 ) 1.93 $ 2.99 (35.7 ) Fuel gallons consumed (millions) 178
162 10.4 700 639 9.6 Full-time equivalent employees at period end
(b) 14,537 13,280 9.5 (a) Refer to Note A, Consolidated
operating cost per available seat mile, excluding fuel and profit
sharing and related taxes, at the end of our Earnings Release for
more information on this non-GAAP measure. (b) Excludes operating
expenses and employees of LiveTV, LLC, which are unrelated to our
airline operations and no longer part of JetBlue from June 10,
2014.
SELECTED CONSOLIDATED BALANCE SHEET
DATA (in millions)
December 31,
December 31, 2015 2014
(unaudited) Cash and cash equivalents $ 318 $
341 Total investment securities 607 427 Total assets 8,660 7,839
Total debt 1,843 2,233 Stockholders' equity 3,210 2,529
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
tables below show reconciliations 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.
Net Income and Pre-Tax Income, excluding special items.
JetBlue excludes special items from net income and pre-tax income
because management believes the exclusion of these items is helpful
to investors to evaluate the company's recurring core operational
performance in the periods shown. Therefore, we adjust for these
amounts. Special items excluded in the tables below showing
reconciliation of net income and pre-tax income include the gain on
the sale of JetBlue's wholly-owned subsidiary LiveTV, LLC due to
the non-recurring nature of this item.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF NET INCOME, INCOME BEFORE INCOME TAXES AND EPS
EXCLUDING SPECIAL ITEMS (in millions, except per share
amounts) (unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, 2015 2014
2015 2014 $ $ $ $
Income before income taxes $ 303 $ 140 $ 1,097 $ 623 Less: Gain on
sale of subsidiary - - - 241
Income before income taxes excluding special items 303 140 1,097
382 Less: Income tax expense 113 52 420 222 Add back: Income tax
relating to gain on sale of subsidiary (a) - (1 )
- 72 Net Income excluding special items $ 190 $ 87
$ 677 $ 232
Earnings per common share excluding
special items: Basic $ 0.60 $ 0.29 $ 2.15 $ 0.79 Diluted
$ 0.56 $ 0.26 $ 1.98 $ 0.70 (a) The capital gain
generated from the sale of LiveTV allowed JetBlue to utilize a
capital loss carryforward which resulted in the release of a
valuation allowance related to the capital loss deferred tax asset
of $19 million
Consolidated operating cost per available seat mile,
excluding fuel and 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 and related taxes and
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 AND PROFIT SHARING AND
RELATED TAXES (dollars in millions, per ASM data in
cents) (unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, 2015 2014
2015 2014
$
per ASM
$
per ASM
$
per ASM
$
per ASM Total operating expenses $ 1,264 10.01 $
1,277 11.17 $ 5,200 10.56 5,302 11.78 Less: Aircraft fuel and
related taxes 300 2.37 436 3.82 1,348 2.74
1,912 4.25 Operating expenses, excluding fuel and related taxes 964
7.64 841 7.35 3,852 7.82 3,390 7.53 Less: Profit sharing and
related taxes 44 0.35 14 0.12 151 0.31 25 0.05
Operating expense, excluding fuel and profit sharing and related
taxes $ 920 7.29 $ 827 7.23 $ 3,701 7.51 3,365 7.48
Return On Invested Capital (“ROIC”). ROIC is a non-GAAP
financial measure we believe provides useful supplemental
information for management and investors by measuring the
effectiveness of our operations' use of invested capital to
generate profits. We use ROIC to track how much value we are
creating for our shareholders as it represents an important
financial metric we believe provides meaningful information as to
how well we generate returns relative to the capital invested in
our business.
NON-GAAP FINANCIAL MEASURE Reconciliation of
Return on Invested Capital (Non-GAAP) (dollars in
millions) (unaudited) Twelve Months
Ended December 31, 2015 2014 Numerator
Operating Income $ 1,216 $ 515 Add: Interest income and other 1 1
Add: Interest component of capitalized aircraft rent (a) 64
65 Subtotal 1,281 581 Less: Income tax expense impact
491 226 Operating Income After Tax, Adjusted 790 355
Denominator Average Stockholders' equity $ 2,869 $ 2,331 Average
total debt 2,038 2,409 Capitalized aircraft rent (a) 853
869 Invested Capital 5,760 5,609
Return on
Invested Capital 13.7% 6.3% (a)
Capitalized Aircraft Rent Aircraft rent, as reported 122 124
Capitalized aircraft rent (7 * Aircraft rent) (b) 853 869 Interest
component of capitalized aircraft rent (Imputed interest at 7.5%)
64 65
(b) In determining the Invested Capital
component of ROIC we include a non-GAAP adjustment for
aircraftoperating leases, as operating lease obligations are not
reflected on our balance sheets but do represent asignificant
financing obligation. In making the adjustment we used a multiple
of seven times our aircraft rentas this is the multiple which is
routinely used with in the airline community to represent the
financingcomponent of aircraft operating lease obligations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160128005224/en/
JetBlue Investor Relations+1
718-709-2202ir@jetblue.comorJetBlue Corporate
Communications+1 718-709-3089corpcomm@jetblue.com
JetBlue Airways (NASDAQ:JBLU)
Historical Stock Chart
From Mar 2024 to Apr 2024
JetBlue Airways (NASDAQ:JBLU)
Historical Stock Chart
From Apr 2023 to Apr 2024