JetBlue Airways Corporation (NASDAQ: JBLU) today reported its
results for the fourth quarter 2020:
- Reported GAAP loss per share of ($1.34) in the fourth quarter
of 2020 compared to a diluted earnings per share of $0.56 in the
fourth quarter of 2019. Adjusted loss per share was ($1.53)(1) in
the fourth quarter of 2020 versus adjusted diluted earnings per
share of $0.56(1) in the fourth quarter of 2019. Note A to this
earnings release includes the GAAP to Non-GAAP reconciliation
between reported and adjusted diluted earnings per share.
- GAAP pre-tax loss of ($512) million in the fourth quarter of
2020, compared to a pre-tax income of $220 million in the fourth
quarter of 2019. Excluding one-time items, adjusted pre-tax loss of
($581) million(1) in the fourth quarter of 2020 versus adjusted
pre-tax income of $221 million(1) in the fourth quarter of
2019.
Operational Highlights from the Fourth
Quarter
- Fourth quarter 2020 revenue declined 67% year over year as a
result of the impact of COVID-19. The decline is better than our
prior expectations for the quarter of a 70% decline, and represents
a nine-point sequential improvement quarter over quarter, mainly
driven by solid booking trends in October and improving volumes in
the back half of December.
- Reduced fourth quarter 2020 capacity by 47% year over year, in
line with our planning assumption of a decrease between 45% and
50%, as a result of actions taken to manage cash burn and protect
liquidity.
- Operating expenses declined 38% year over year. Excluding
special items, adjusted operating expenses(1) declined 34% year
over year compared to our planning assumption of a decrease of at
least 30%. The results were driven by capacity actions taken to
reduce variable costs and fixed cost reductions achieved by
adjusting work schedules and managing external spend.
Balance Sheet and Liquidity
- JetBlue ended the fourth quarter of 2020 with approximately
$3.1 billion in unrestricted cash, cash equivalents, and short-term
investments, or 38% of 2019 revenue.
- JetBlue repaid $100 million in regularly scheduled debt and
finance lease obligations during the fourth quarter of 2020.
- JetBlue has taken the following measures in the fourth quarter
to manage liquidity:
- Raised over $700 million with an equity offering and
sale-leaseback transactions.
- Continued to execute significant variable and fixed cost
savings through aggressive capacity management and executing our
cost reduction plan.
- Redeployed assets to capture short-term, tactical cash
generation opportunities.
- Resulting from the actions taken, JetBlue’s average daily cash
burn in the fourth quarter of 2020 was $6.7 million, towards the
lower end of the $6 to $8 million range previously expected.
- Starting this quarter, we will transition from reporting
“all-in” cash burn to EBITDA. We believe that this metric brings
better visibility to JetBlue’s underlying performance as we move
towards recovery.
Fuel Expense and Hedging
The realized fuel price in the fourth quarter 2020 was $1.31 per
gallon, a 37% decline versus fourth quarter 2019 realized fuel
price of $2.07.
As of January 28th 2021, JetBlue has not entered into forward
fuel derivative contracts to hedge its fuel consumption for the
first quarter of 2021. Based on the forward curve as of January
15th, JetBlue expects an average all-in price per gallon of fuel of
$1.61 in the first quarter of 2021.
Our Recovery Plan and Actions Taken to
Position JetBlue for Future Success
“2020 was a year like no other, as the COVID-19 pandemic
challenged our industry in ways we have never seen before. The very
foundation of our business model - our culture, our passion for
customer service, and our focus on safety – continue to guide us as
we march towards recovery,” said Robin Hayes, JetBlue’s Chief
Executive Officer.
“Despite the financial results, I'm proud of what our
crewmembers have accomplished in this extraordinary year. I could
not be more confident in our future. Our team not only managed
through the ongoing demand challenges, but made important progress
on strategic initiatives – including revenue, capacity and cost
actions.
As we moved through 2020, we meaningfully reduced our cash burn,
and are starting to shift our focus to rebuilding our margins. We
remain cautiously optimistic that demand trends will improve later
this year. More importantly, this crisis has made us a more agile,
creative and resilient airline, and we believe our initiatives will
allow us to emerge with structurally better margins.”
Action Plan, Revenue and
Capacity
“Delivering consistently on our Safety from the Ground Up
Program remains one of the top reasons why customers are returning
to air travel and choosing JetBlue. Our focus remains on
cleanliness, reduced touchpoints and air quality, and we are also
prioritizing efforts to educate our customers about the changing
regulatory requirements associated with air travel, whether that is
testing, quarantine, or documentation requirements. We know many
customers want to travel, and we are trying to help them more
easily navigate the changing requirements,” said Joanna Geraghty,
JetBlue’s President and Chief Operating Officer.
“Despite this progress in the fourth quarter, our geographic
challenges persist, with increasing case counts and continued
quarantine measures, particularly in the northeast and California.
For the first quarter of 2021, our planning assumption for revenue
is a decline of between (65) and (70)% year over two. We saw
increased demand for Martin Luther King weekend, and are seeing a
similar pattern for Presidents’ Day weekend, but we don’t
anticipate traffic to reach the levels of late December.”
Financial Performance and
Outlook
“Our average daily cash burn for the fourth quarter was $6.7
million, towards the lower end of the $6 to $8 million range we
anticipated in early December. This was the result of variable cost
savings achieved through a balanced approach to capacity, and our
actions to minimize fixed costs across our business,” said Steve
Priest, JetBlue’s Chief Financial Officer.
“We estimate our EBITDA in the first quarter will range between
negative $525 and $625 million, reflecting similar revenue trends
to the fourth quarter, but also manifesting recent cost pressure
from rents and landing fees, as well as fuel prices.
We continue to take an aggressive approach to improve our cost
structure and help rebuild our margins. Our 2021 plan reduces our
total operating cost by over $1.2 billion, compared to 2019. We
believe that executing our plan will put us on a path to emerge
from the crisis, with better CASM ex-Fuel in 2022 than in
2019.”
Earnings Call Details
JetBlue will conduct a conference call to discuss its quarterly
earnings today, January 28, 2021 at 10:00 a.m. Eastern Time. A live
broadcast of the conference call will also be available via the
internet at http://investor.jetblue.com.
For further details see the Fourth Quarter 2020 Earnings
Presentation 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, Orlando, and San
Juan. JetBlue carries customers across the U.S., Caribbean, and
Latin America. For more information, visit jetblue.com.
Notes
(1)
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
Statements in this Earnings Release (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 amended, or the Exchange Act,
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 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; our significant fixed obligations and
substantial indebtedness; volatility in fuel prices, maintenance
costs and interest rates; our reliance on high daily aircraft
utilization; our ability to implement our growth strategy; our
ability to attract and retain qualified personnel and maintain our
culture as we grow; our reliance on a limited number of suppliers,
including for aircraft, aircraft engines and parts and
vulnerability to delays by those suppliers; 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 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
domestic or foreign government regulation, including new or
increased tariffs; changes in our industry due to other airlines'
financial condition; acts of war or terrorism; global economic
conditions or an economic downturn leading to a continuing or
accelerated decrease in demand for air travel; the impact of
infectious diseases that affects demand for air travel or travel
behavior, such as the ongoing impact of the coronavirus
(“COVID-19”); 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. 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 2019 Annual
Report on Form 10-K and its Quarterly Reports on Form 10-Q. In
light of these risks and uncertainties, the forward-looking events
discussed in this Earnings Release might not occur. Our
forward-looking statements speak only as of the date of this
Earnings Release. Other than as required by law, we undertake no
obligation to update or revise forward-looking statements, whether
as a result of new information, future events, or otherwise.
This Earnings Release also includes certain “non-GAAP financial
measures” as defined under the Exchange Act and in accordance with
Regulation G. We have included reconciliations of these non-GAAP
financial measures to the most directly comparable financial
measures calculated and provided in accordance with U.S. GAAP
within this release.
JETBLUE AIRWAYS
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
Percent
December 31,
Percent
2020
2019
Change
2020
2019
Change
OPERATING REVENUES Passenger
$
606
$
1,948
(68.9
)
$
2,733
$
7,786
(64.9
)
Other
55
83
(33.8
)
224
308
(27.3
)
Total operating revenues
661
2,031
(67.4
)
2,957
8,094
(63.5
)
OPERATING EXPENSES Aircraft fuel and related taxes
134
455
(70.5
)
631
1,847
(65.9
)
Salaries, wages and benefits
472
589
(20.0
)
2,032
2,320
(12.4
)
Landing fees and other rents
100
112
(10.5
)
358
474
(24.4
)
Depreciation and amortization
128
140
(8.3
)
535
525
1.8
Aircraft rent
25
23
7.7
85
99
(14.4
)
Sales and marketing
26
75
(64.8
)
110
290
(62.0
)
Maintenance, materials and repairs
97
137
(29.4
)
441
619
(28.8
)
Other operating expenses
202
272
(25.8
)
762
1,106
(31.0
)
Special items
(69
)
1
(9,257.9
)
(283
)
14
(2,073.5
)
Total operating expenses
1,115
1,804
(38.2
)
4,671
7,294
(36.0
)
OPERATING (LOSS) INCOME
(454
)
227
(300.1
)
(1,714
)
800
(314.4
)
Operating margin
-68.7
%
11.2
%
(79.9
)
pts.
-58.0
%
9.9
%
(67.9
)
pts.
OTHER INCOME (EXPENSE) Interest expense
(59
)
(22
)
166.2
(179
)
(79
)
127.2
Capitalized interest
3
4
(17.6
)
13
14
(6.5
)
Gain on equity method investments
-
-
-
-
15
(100.0
)
Interest income and other
(2
)
11
(122.1
)
(13
)
18
(170.3
)
Total other income (expense)
(58
)
(7
)
744.4
(179
)
(32
)
464.7
(LOSS) INCOME BEFORE INCOME TAXES
(512
)
220
(332.8
)
(1,893
)
768
(346.6
)
Pre-tax margin
-77.5
%
10.8
%
(88.3
)
pts.
-64.0
%
9.5
%
(73.5
)
pts. Income tax (benefit) expense
(131
)
59
(324.3
)
(531
)
199
(367.4
)
NET (LOSS) INCOME
$
(381
)
$
161
(335.9
)
$
(1,362
)
$
569
(339.3
)
(LOSS) EARNINGS PER COMMON SHARE: Basic
$
(1.34
)
$
0.56
$
(4.91
)
$
1.92
Diluted
$
(1.34
)
$
0.56
$
(4.91
)
$
1.91
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic
284.1
285.8
277.5
296.6
Diluted
284.1
287.9
277.5
298.4
JETBLUE AIRWAYS
CORPORATION
COMPARATIVE OPERATING
STATISTICS
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
Percent
December 31,
Percent
2020
2019
Change
2020
2019
Change
Revenue passengers (thousands)
3,356
10,476
(68.0
)
14,274
42,728
(66.6
)
Revenue passenger miles (millions)
4,446
13,171
(66.2
)
18,598
53,617
(65.3
)
Available seat miles (ASMs) (millions)
8,480
16,079
(47.3
)
32,689
63,841
(48.8
)
Load factor
52.4
%
81.9
%
(29.5
)
pts.
56.9
%
84.0
%
(27.1
)
Aircraft utilization (hours per day)
5.3
11.6
(54.3
)
5.4
11.9
(54.6
)
Average fare
$
180.54
$
185.96
(2.9
)
$
191.42
$
182.23
5.0
Yield per passenger mile (cents)
13.63
14.79
(7.8
)
14.69
14.52
1.2
Passenger revenue per ASM (cents)
7.15
12.12
(41.0
)
8.36
12.20
(31.5
)
Revenue per ASM (cents)
7.80
12.63
(38.3
)
9.04
12.68
(28.7
)
Operating expense per ASM (cents)
13.16
11.22
17.2
14.29
11.43
25.1
Operating expense per ASM, excluding fuel (cents)(1)
12.31
8.31
48.2
13.12
8.44
55.4
Departures
40,321
91,888
(56.1
)
168,636
368,355
(54.2
)
Average stage length (miles)
1,290
1,142
13.0
1,222
1,140
7.2
Average number of operating aircraft during period
264.9
255.2
3.8
262.2
253.6
3.4
Average fuel cost per gallon, including fuel taxes
$
1.31
$
2.07
(36.9
)
$
1.53
$
2.09
(26.8
)
Fuel gallons consumed (millions)
102
219
(53.2
)
412
885
(53.4
)
Average number of full-time equivalent crewmembers
15,450
18,535
(1) Refer to Note A at the end of our Earnings Release for more
information on this non-GAAP financial measure. Operating expense
per available seat mile, excluding fuel (“CASM Ex-Fuel”) excludes
fuel and related taxes, other non-airline operating expenses, and
special items.
JETBLUE AIRWAYS CORPORATION
SELECTED CONSOLIDATED BALANCE
SHEET DATA
(in millions)
December 31,
December 31,
2020
2019
(unaudited)
Cash and cash equivalents
$
1,918
$
959
Total investment securities
1,137
372
Total assets
13,353
11,918
Total debt
4,863
2,334
Stockholders' equity
3,943
4,799
Note A – Non-GAAP Financial Measures
JetBlue sometimes uses non-GAAP financial measures in this press
release. Non-GAAP financial measures are financial measures that
are derived from the consolidated financial statements, but that
are not presented in accordance with generally accepted accounting
principles in the United States, or GAAP. We believe these non-GAAP
financial measures provide a meaningful comparison of our results
to others in the airline industry and our prior year results.
Investors should consider these non-GAAP financial measures in
addition to, and not as a substitute for, our financial performance
measures prepared in accordance with GAAP. Further, our non-GAAP
information may be different from the non-GAAP information provided
by other companies. The information below provides an explanation
of each non-GAAP financial measure and shows a reconciliation of
non-GAAP financial measures used in this press release to the most
directly comparable GAAP financial measures.
Operating expense per available seat mile, excluding fuel and
related taxes, other 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
related taxes, operating expenses related to other non-airline
businesses, such as our subsidiaries, JetBlue Technology Ventures
and JetBlue Travel Products, and special items from operating
expenses to determine CASM ex-fuel, which is a non-GAAP financial
measure.
In 2020, special items include contra-expenses recognized on the
utilization of payroll support grants received under the CARES Act,
contra-expenses recognized on the Employee Retention Credits
provided by the CARES Act, impairment charges of our Embraer E190
fleet, losses generated from certain sale-leaseback transactions,
and one-time costs associated with our voluntary crewmember
separation programs.
Special items for 2019 include one-time costs related to the
Embraer E190 fleet transition and one-time costs related to the
implementation of our pilots' collective bargaining agreement.
We believe that CASM ex-fuel is useful for investors because it
provides investors the ability to measure financial performance
excluding items beyond our control, such as fuel costs, which are
subject to many economic and political factors, or not related to
the generation of an available seat mile, such as operating expense
related to certain non-airline businesses. We believe this non-GAAP
measure is more indicative of our ability to manage airline costs
and is more comparable to measures reported by other major
airlines.
NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING
EXPENSE PER ASM, EXCLUDING FUEL ($ in millions, per ASM data
in cents) (unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December, 31
2020
2019
2020
2019
$
per ASM
$
per ASM
$
per ASM
$
per ASM
Total operating expenses
$
1,115
$
13.16
$
1,804
$
11.22
$
4,671
$
14.29
$
7,294
$
11.43
Less: Aircraft fuel and related taxes
134
1.58
455
2.83
631
1.93
1,847
2.89
Other non-airline expenses
6
0.08
12
0.08
35
0.10
46
0.08
Special items
(69
)
(0.81
)
1
-
(283
)
(0.86
)
14
0.02
Operating expenses, excluding fuel
$
1,044
$
12.31
$
1,336
$
8.31
$
4,288
$
13.12
$
5,387
$
8.44
Operating expense, income before taxes, net income and
earnings per share, excluding special items and gain on equity
method investments
Our GAAP results in the applicable periods were impacted by
charges that are deemed special items and an one-time gain on
equity method investment.
In 2020, special items include contra-expenses recognized on the
utilization of payroll support grants received under the CARES Act,
contra-expenses recognized on the Employee Retention Credits
provided by the CARES Act, impairment charges of our Embraer E190
fleet, losses generated from certain sale-leaseback transactions,
and one-time costs associated with our voluntary crewmember
separation programs.
Special items for 2019 include one-time costs related to the
Embraer E190 fleet transition as well as one-time costs related to
the implementation of our pilots' collective bargaining
agreement.
We believe the impacts of these items distort our overall trends
and that our metrics and results are comparable with the
presentation of our results excluding the impact of these items.
The table below provides a reconciliation of our GAAP reported
amounts to the non-GAAP amounts excluding the impacts of these
items.
NON-GAAP FINANCIAL
MEASURE
RECONCILIATION OF OPERATING
EXPENSE, INCOME BEFORE TAXES, NET INCOME AND EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY METHOD
INVESTMENTS
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Total operating revenues
$
661
$
2,031
$
2,957
$
8,094
Total operating expenses
$
1,115
$
1,804
$
4,671
$
7,294
Less: Special items
(69
)
1
(283
)
14
Total operating expenses excluding special items
$
1,184
$
1,803
$
4,954
$
7,280
Operating (loss) income
$
(454
)
$
227
$
(1,714
)
$
800
Add back: Special items
(69
)
1
(283
)
14
Operating (loss) income excluding special items
$
(523
)
$
228
$
(1,997
)
$
814
Operating margin excluding special items
-79.1
%
11.2
%
-67.5
%
10.1
%
(Loss) income before income taxes
$
(512
)
$
220
$
(1,893
)
$
768
Add back: Special items
(69
)
1
(283
)
14
Less: Gain on equity method investments
-
-
-
15
(Loss) income before income taxes excluding special items and
gain on equity method investments
$
(581
)
$
221
$
(2,176
)
$
767
Pre-tax margin excluding special items and gain on equity
method investments
-87.9
%
10.9
%
-73.6
%
9.5
%
Net (loss) income
$
(381
)
$
161
$
(1,362
)
$
569
Add back: Special items
(69
)
1
(283
)
14
Less: Income tax (expense) benefit related to special items
(16
)
-
(69
)
4
Less: Gain on equity method investments
-
-
-
15
Less: Income tax (expense) related to gain on equity method
investments
-
-
-
(4
)
Net (loss) income excluding special items and gain on equity
method investments
$
(434
)
$
162
$
(1,576
)
$
568
(Loss) Earnings Per Common Share: Basic
$
(1.34
)
$
0.56
$
(4.91
)
$
1.92
Add back: Special items, net of tax
(0.19
)
0.01
(0.77
)
0.04
Less: Gain on equity method investments, net of tax
-
-
-
0.04
Basic excluding special items and gain on equity method
investments
$
(1.53
)
$
0.57
$
(5.68
)
$
1.92
Diluted
$
(1.34
)
$
0.56
$
(4.91
)
$
1.91
Add back: Special items, net of tax
(0.19
)
-
(0.77
)
0.03
Less: Gain on equity method investments, net of tax
-
-
-
0.04
Diluted excluding special items and gain on equity method
investments
$
(1.53
)
$
0.56
$
(5.68
)
$
1.90
Daily cash burn
We present cash burn because we believe this metric is helpful
to investors to evaluate our ability to maintain liquidity and
evaluate cash flows from our core operating performance. Our cash
burn is calculated as net cash used in operating activities, net
cash used in investing activities, and net cash provided by
financing activities adjusted for: (1) cash payments associated
with our voluntary separation programs, (2) net purchases of
investment securities, and (3) net proceeds from our common stock
offering completed in December 2020.
NON-GAAP FINANCIAL MEASURE DAILY CASH BURN (in
millions, except for days in period) (unaudited)
Three Months Ended
December 31, 2020
Net cash (used in) operating activities
$
(459
)
Net cash (used in) investing activities
(765
)
Net cash provided by financing activities
614
(Decrease) in cash, cash equivalents, and restricted cash
(610
)
Adjustments Voluntary separation programs
5
Net purchases of investment securities
570
Proceeds from issuance of common stock
(583
)
Total adjustments
(8
)
Adjusted (decrease) in cash
$
(618
)
Days in period
92
Daily cash burn
$
(6.7
)
Earnings before interest, taxes, depreciation, amortization,
and special Items
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) is a non-GAAP financial measure. We believes this measure
allows investors to better understand the financial performance of
the company by presenting earnings from our business operations
without including the effects of capital structure, tax rates,
depreciation, and amortization. We further adjusted EBITDA to
account for the impact of special items which are unusual or
infrequent in nature.
NON-GAAP FINANCIAL
MEASURE
EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AMORTIZATION, AND SPECIAL ITEMS
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2020
December 31, 2020
Net (loss)
$
(381
)
$
(1,362
)
Less: Interest (expense)
(59
)
(179
)
Capitalized interest
3
13
Interest income and other
(2
)
(13
)
Add back: Income tax (benefits)
(131
)
(531
)
Depreciation and amortization
128
535
Earnings before interest, taxes, depreciation, and amortization
$
(326
)
$
(1,179
)
Add back: Special items
(69
)
(283
)
Earnings before interest, taxes, depreciation, amortization, and
special items
$
(395
)
$
(1,462
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210128005378/en/
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