CONTACT:
Investor Relations
Amy Carpi, (203) 656-7651
ir@jetblue.com
Corporate Communications
(718) 709-3089
corporatecommunications@jetblue.com
JETBLUE ANNOUNCES FOURTH QUARTER AND
FULL YEAR 2005 RESULTS
NEW YORK, NY (FEBRUARY 1, 2006) -- JetBlue Airways Corporation (NASDAQ: JBLU)
today reported its results for the fourth quarter and full year 2005:
o Net loss for the quarter was $42.4 million, representing a loss per share of
$0.25. These results include $13.0 million in unusual charges consisting of
$6.9 million in non-cash stock-based compensation expense related to the
accelerated vesting of certain employee stock options and a $6.1 million
charge for development costs related to a maintenance and inventory tracking
system that will not be implemented. Excluding these two unusual items, the
reported net loss would have been $32.0 million, or a loss per diluted share
of $0.19 in the fourth quarter. This compares with fourth quarter 2004 net
income of $1.5 million, or $0.01 per diluted share. For the full year 2005,
net loss totaled $20.3 million, or a $0.13 loss per share. Excluding these
two unusual items, the reported net loss would have been $9.8 million, or a
loss per diluted share of $0.06 for the full year ended December 31, 2005,
compared with net income of $46.2 million, or $0.28 per diluted share, for
the full year 2004.
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o Operating loss for the quarter was $31.5 million, resulting in a negative
7.1% operating margin. Excluding the impact of the unusual items, the
reported operating margin would have been negative 4.1%. This compares to
operating income of $10.8 million and a 3.2% operating margin in the fourth
quarter of 2004. For the full year 2005, operating income was $47.6 million,
resulting in an operating margin of 2.8%. Excluding the impact of the
unusual items, operating margin for the full year 2005 would have been 3.6%.
This compares with operating income of $110.9 million and an 8.8% operating
margin for the full year 2004.
o Operating revenues for the quarter totaled $446.0 million, representing
growth of 34.0% over operating revenues of $332.8 million in the fourth
quarter of 2004. For the full year, operating revenues totaled $1.70
billion, representing growth of 34.5% over operating revenues of $1.26
billion for the full year 2004.
"We are very disappointed in our performance this quarter as we continued to
feel the effects of record-high fuel prices and a tough revenue environment,
compounded by the impact of Hurricane Wilma and the residual effects of
Hurricanes Katrina and Rita," said David Neeleman, JetBlue's Chairman and CEO.
"Although we saw a 7.4% increase in revenue per available seat mile (RASM) in
the face of 25% capacity growth, it was not nearly enough to offset the impact
of high fuel costs."
During the fourth quarter of 2005, JetBlue achieved a completion factor of 98.9%
of scheduled flights, compared to 99.9% in 2004. On-time performance, defined by
the US Department of Transportation as arrivals within 14 minutes of schedule,
was 70.9% in the fourth quarter of 2005 compared to 80.1% for the same period in
2004. For the full year 2005, JetBlue achieved a completion factor of 99.4%,
identical to the full year 2004. On-time performance for the full year 2005 was
71.6%, compared to 81.6% for the full year 2004. The Company attained a load
factor in the fourth quarter of 2005 of
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81.1%, a decrease of 1.8 points on a capacity increase of 24.7% over the fourth
quarter of 2004. Load factor for the full year 2005 was 85.2%, an increase of
2.0 points on a capacity increase of 25.3%.
Dave Barger, President and COO, commented, "Our crewmembers performed admirably
throughout the difficult environment of 2005. Together, we successfully met the
challenges of opening four new cities, connecting many others destinations
across our system, adding sixteen new A320s, integrating the E190 aircraft into
our fleet as well as commencing construction of our new terminal at JFK and
completing construction of two new hangars in addition to our new training
facility in Orlando. Looking ahead, we remain focused on improving the company's
financial and operating performance."
For the fourth quarter 2005, operating revenues increased by 34.0% over 2004 to
$446.0 million. Revenue passenger miles increased 22.0% from the fourth quarter
of 2004 to 5.2 billion. Yield per passenger mile was 8.16 cents, up 8.1%
compared to 2004. Operating revenue per available seat mile (RASM) increased
7.4% year-over-year to 7.02 cents. Available seat miles grew 24.7% to 6.4
billion. Operating expenses for the fourth quarter were $477.5 million, up 48.3%
from the fourth quarter of 2004. Operating expense per ASM (CASM) for the fourth
quarter 2005 increased 18.9% year-over-year to 7.51 cents. This figure includes
the impact of the two unusual items discussed above. During the quarter,
realized fuel price was $1.87 per gallon, a 50.3% increase over fourth quarter
2004 realized fuel price of $1.24. Excluding fuel, CASM increased 7.9% year over
year. As a result of its fuel hedging program, JetBlue realized an $11.8 million
benefit in the fuel expense line in the fourth quarter and a $43.1 million
benefit for the full year 2005. JetBlue ended the year with $483.8 million in
cash and investment securities.
Looking ahead, for the first quarter of 2006, JetBlue expects to report a
negative operating margin between 3% and 5% assuming an all in aircraft fuel
cost per gallon of $1.92. For the first quarter,
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CASM is expected to increase between 17% and 19% over the year-ago period, at
the assumed $1.92 aircraft fuel cost per gallon. Excluding fuel, CASM in the
first quarter is expected to increase between 6% and 8% year over year. Capacity
is expected to increase between 27% and 29% over the same period last year. For
the full year 2006, JetBlue expects to report an operating margin between 2% and
4% based on an assumed aircraft fuel cost per gallon of $1.98, net of hedges.
CASM for the full year is expected to increase between 10% and 12% over full
year 2005, at the assumed $1.98 aircraft fuel cost per gallon. Excluding fuel,
CASM in 2006 is expected to increase between 4% and 6% year over year. Capacity
for the full year 2006 is expected to increase between 28% and 30% over 2005.
Based on these assumptions, the company expects to report a net loss for both
the first quarter and the full year 2006.
JetBlue will conduct a conference call to discuss its quarterly earnings today,
February 1, at 10:00 a.m. Eastern Time. A live broadcast of the conference call
will be available via the World Wide Web at http://investor.jetblue.com.
ABOUT JETBLUE
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JetBlue Airways is a low-fare airline based in New York City that operates 370
flights daily to 34 destinations. JetBlue offers customers roomy leather seats
with 36 channels of free DIRECTV(R) (c) programming, the most live television
offered by any airline. On flights longer than two hours, the airline also
features a selection of first-run movies and bonus features from FOX
InFlight(TM). Customers enjoy brand name snacks and beverages, including freshly
brewed Dunkin' Donuts coffee and fine wines selected by JetBlue's "Low Fare
Sommelier," Joshua Wesson, founder of Best Cellars. With JetBlue, all seats are
assigned, all travel is ticketless, all fares are one-way and an overnight stay
is never required. For information or reservations call 1-800-JETBLUE
(1-800-538-2583) or visit www.jetblue.com.
(*) DIRECTV(R) service is not available on flights between JFK or Newark and
Puerto Rico or the Dominican Republic; however, FOX InFlight (tm) is offered
complimentary on these routes. FOX InFlight is a trademark of Twentieth Century
Fox Film Corporation. JetBlue's in-flight entertainment is powered by LiveTV, a
wholly owned subsidiary of JetBlue.
# # #
This press release contains statements of a forward-looking nature which
represent our management's beliefs and assumptions concerning future events.
Forward-looking statements involve risks, uncertainties and
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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, our ability to implement our growth strategy including the
integration of the EMBRAER 190 aircraft into our operations, our significant
fixed obligations, our ability to maintain our culture, our reliance on high
daily aircraft utilization, increases in maintenance costs, fuel prices,
insurance costs and interest rates, our dependence on the New York market, our
reliance on automated systems and technology, our reliance on sole suppliers,
additional government regulation and future acts of terrorism or the threat of
such acts or escalation of U.S. military involvement overseas. 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 2004
Annual Report on Form 10-K/A and Quarterly Reports on Form 10-Q and 10Q/A. 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 THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------ PERCENT ------------------------- PERCENT
2005 2004 CHANGE 2005 2004 CHANGE
---------- ---------- -------- ------------ ----------- -------
OPERATING REVENUES
Passenger $ 420,958 $ 319,112 31.9 $ 1,620,611 $ 1,219,365 32.9
Other 25,034 13,671 83.1 80,671 45,214 78.4
---------- ---------- ----------- -----------
Total operating revenues 445,992 332,783 34.0 1,701,282 1,264,579 34.5
OPERATING EXPENSES
Salaries, wages and benefits (1) 115,781 89,377 29.5 427,520 337,118 26.8
Aircraft fuel 151,982 80,192 89.5 487,935 255,366 91.1
Landing fees and other rents 32,084 23,168 38.5 112,190 91,605 22.5
Depreciation and amortization 34,108 23,350 46.1 114,614 76,779 49.3
Aircraft rent 20,082 17,668 13.7 74,236 70,216 5.7
Sales and marketing 19,749 16,775 17.7 81,493 63,198 28.9
Maintenance materials and repairs 17,519 12,495 40.2 64,450 44,901 43.5
Other operating expenses (2) 86,202 58,993 46.1 291,232 214,509 35.8
---------- ---------- ------------ ------------
Total operating expenses 477,507 322,018 48.3 1,653,670 1,153,692 43.3
---------- ---------- ------------ ------------
OPERATING INCOME (LOSS) (31,515) 10,765 392.7) 47,612 110,887 (57.1)
Operating margin (7.1)% 3.2% (10.3)pts 2.8% 8.8% (6.0)pts.
OTHER INCOME (EXPENSE)
Interest expense (32,126) (16,966) 89.4 (106,512) (53,478) 99.2
Capitalized interest 4,386 3,011 45.7 15,910 8,874 79.3
Interest income and other 4,108 2,483 65.5 19,169 8,483 126.0
---------- ---------- ------------ ------------
Total other income (expense) (23,632) (11,472) (71,433) (36,121)
---------- ---------- ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (55,147) (707) (23,821) 74,766
Income tax expense (benefit) (12,719) (2,235) (3,559) 28,532
---------- ---------- ------------ ------------
NET INCOME (LOSS) $ (42,428) $ 1,528 $ (20,262) $ 46,234
========== ========== ============ ============
EARNINGS (LOSS) PER COMMON SHARE:
Basic $ (0.25) $ 0.01 $ (0.13) $ 0.30
========== ========== ============ ============
Diluted $ (0.25) $ 0.01 $ (0.13) $ 0.28
========== ========== ============ ============
Weighted average shares outstanding:
Basic 167,532 155,953 159,889 154,769
Diluted 167,532 166,106 159,889 166,214
(1) In the fourth quarter of 2005, we recorded $6.9 million in non-cash
stock-based compensation expense related to the accelerated vesting of
certain employee stock options.
(2) In the fourth quarter of 2005, we recorded a $6.1 million charge for
development costs related to a maintenance and inventory tracking system
that will not be implemented.
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- PERCENT ------------------------ PERCENT
2005 2004 CHANGE 2005 2004 CHANGE
---------- ---------- --------- ----------- ----------- -------
Revenue passengers 3,850,507 3,178,517 21.1 14,729,066 11,782,625 25.0
Revenue passenger miles (000) 5,157,019 4,226,616 22.0 20,200,057 15,730,302 28.4
Available seat miles (000) 6,356,379 5,095,656 24.7 23,703,094 18,911,051 25.3
Load factor 81.1% 82.9% (1.8)pts. 85.2% 83.2% 2.0 pts.
Breakeven load factor (3) 91.0% 82.7% 8.3 pts. 86.1% 77.9% 8.2 pts.
Aircraft utilization (hours per day) 13.1 13.2 (0.3) 13.4 13.4 -
Average fare $109.33 $100.40 8.9 $110.03 $103.49 6.3
Yield per passenger mile (cents) 8.16 7.55 8.1 8.02 7.75 3.5
Passenger revenue per available seat mile (cents) 6.62 6.26 5.8 6.84 6.45 6.0
Operating revenue per available seat mile (cents) 7.02 6.53 7.4 7.18 6.69 7.3
Operating expense per available seat mile (cents) 7.51 6.32 18.9 6.98 6.10 14.4
Operating expense per available seat mile,
excluding fuel (cents) 5.12 4.75 7.9 4.92 4.75 3.5
Airline expense per available seat mile (cents) (3) 7.43 6.24 19.0 6.91 6.04 14.4
Departures 30,886 24,649 25.3 112,009 90,532 23.7
Average stage length (miles) 1,324 1,325 (0.1) 1,358 1,339 1.4
Average number of operating aircraft during period 85.5 66.5 28.6 77.5 60.6 28.0
Average fuel cost per gallon $ 1.87 $ 1.24 50.3 $ 1.61 $ 1.06 52.0
Fuel gallons consumed (000) 81,355 64,526 26.1 303,035 241,087 25.7
Percent of sales through jetBlue.com during period 78.6% 74.7% 3.9 pts. 77.5% 75.4% 2.1 pts.
Full-time equivalent employees at period end (3) 8,326 6,413 29.8
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in thousands)
DECEMBER 31, DECEMBER 31,
2005 2004
------------ ------------
Cash, cash equivalents and investment securities $ 483,778 $ 449,162
Total assets 3,892,363 2,796,670
Total debt 2,325,704 1,544,812
Stockholders' equity 911,175 754,123
(3) Excludes operating expenses and employees of LiveTV, LLC, which are
unrelated to our airline operations
JETBLUE AIRWAYS CORPORATION
NON-GAAP FINANCIAL MEASURES (4)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, 2005 DECEMBER 31, 2005
------------------------------ -----------------------------
$ DILUTED EPS $ DILUTED EPS
------------ -------------- ------------- -------------
(thousands) (thousands)
NET LOSS EXCLUDING UNUSUAL ITEMS
Net loss as reported $ (42,428) $ (0.25) $ (20,262) $ (0.13)
Less: Unusual items, net of tax
Acceleration of stock option vesting 6,792 0.04 6,792 0.04
Write-off of software development costs 3,679 0.02 3,679 0.03
------------ -------------- ------------- ------------
Net loss excluding unusual items $ (31,957) $ (0.19) $(9,791) $ (0.06)
============ ============== ============= ============
$ CASM $ CASM
------------ -------------- ------------- ------------
(thousands) (cents) (thousands) (cents)
OPERATING EXPENSES EXCLUDING UNUSUAL ITEMS
Operating expenses as reported $ 477,507 7.51 $ 1,653,670 6.98
Less: Unusual items
Acceleration of stock option vesting (6,943) (0.11) (6,943) (0.03)
Write-off of software development costs (6,099) (0.09) (6,099) (0.03)
------------ -------------- ------------- ------------
(13,042) (0.20) (13,042) (0.06)
------------ -------------- ------------- ------------
Operating expenses excluding unusual items $ 464,465 7.31 $ 1,640,628 6.92
Operating margin excluding unusual items (4.1)% 3.6%
$ CASM $ CASM
------------ -------------- ------------- ------------
(thousands) (cents) (thousands) (cents)
FUEL NEUTRAL OPERATING EXPENSES EXCLUDING UNUSUAL ITEMS
Operating expenses as reported $ 477,507 7.51 $ 1,653,670 6.98
Less: Unusual items (13,042) (0.20) (13,042) (0.06)
Reported aircraft fuel (151,982) (2.39) (487,935) (2.06)
Add: Aircraft fuel at prior period cost per gallon 101,106 1.59 320,982 1.36
Profit sharing impact of lower fuel expense 4,058 0.06 21,470 0.09
------------ -------------- ------------- ------------
Fuel neutral operating expenses excluding unusual items $ 417,647 6.57 $ 1,495,145 6.31
Fuel neutral operating margin excluding unusual items 6.4% 12.1%
(4) In management's view, it is useful for investors to consider separately the
impact of certain unusual items on the fourth quarter and full year
operating results, specifically our acceleration of stock option vesting
and the write-off of software development costs, in order to facilitate
investors' understanding of some of the key reasons for period-to-period
fluctuations in our operating results and to distinguish between those
reasons that relate to our ongoing operations and those that are unusual in
nature.
Management also believes that comparative analysis of period-to-period
operating results can be enhanced by also excluding the significant
volatility in the price of aircraft fuel, which is subject to many economic
and political factors that are beyond our control. We believe that the
presentation of fuel neutral CASM and operating margin non-GAAP financial
measures is useful to management and investors because it is more indicative
of our ability to manage costs and also assists in understanding the
significant impact that fuel prices have had on our operations, along with
the two unusual items noted above.
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.
SOURCE: JetBlue Airways Corporation
