JetBlue Airways Corporation filed SEC Form 8-K: Regulation FD Disclosure, Financial Statements and Exhibits
$JBLU
Air Freight/Delivery Services
Consumer Discretionary
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): September 5, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(718 ) 286-7900
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
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Item 7.01 Regulation FD Disclosure.
JetBlue Airways Corporation ("JetBlue" or the "Company") announced today an operational and financial update of its expected third quarter 2024 results.
The Company's operational performance over the summer travel season improved year-over-year, as evidenced by an improvement to on-time performance by approximately ten points year-over-year. This was enabled by JetBlue's heightened focus on offering reliable and caring service as a core pillar of its JetForward strategy.
JetBlue's revenue performance quarter-to-date was benefited by several factors, including improving in-month bookings, particularly in the Latin region, and continued progress from its previously announced $300 million worth of revenue initiatives. The Company also recognized revenue uplift from the re-accommodation of customers affected by other airlines' cancellations due to technology outages in July.
JetBlue's quarter-to-date expenses declined due to moderating fuel prices since the start of the third quarter. Non-fuel unit costs improved by one point versus expectations as benefits from focused efforts on cost control and operational reliability were partially offset by weather-related disruption costs in August.
In August 2024, JetBlue issued $2,000 million aggregate principal amount of senior secured notes due 2031 and entered into a $765 million term loan credit and guaranty agreement, maturing in 2029. The Company also issued $460 million aggregate principal amount of its 2.50% Convertible Senior Notes due 2029, and used the net proceeds from the initial offering to repurchase a portion of its existing 0.50% senior convertible notes due 2026. These transactions were previously described in the Company's Current Reports on Form 8-K (collectively, the "Financing Transactions"). As a result of the Financing Transactions, the Company now expects interest expense to be in the range of $370 million to $380 million for the full year, as compared to a previous management assumption (1) of $320 to $330 million.
The table below provides JetBlue’s updated investor guidance for the third quarter ending September 30, 2024.
Third Quarter 2024 Outlook | Current Guidance | Previous Guidance (2) | ||||||
| Capacity and Revenue | ||||||||
| Available Seat Miles ("ASMs") Year-Over-Year | (5.0%) - (3.0%) | (6.0%) - (3.0%) | ||||||
| Revenue Year-Over-Year | (2.5%) - 1.0% | (5.5%) - (1.5%) | ||||||
| Expense | ||||||||
CASM Ex-Fuel (3) Year-Over-Year | 5.0% - 7.0% | 6.0% - 8.0% | ||||||
Fuel Price per Gallon (4), (5) | $2.70 - $2.80 | $2.82 - $2.97 | ||||||
| Interest Expense | $100 - $110 million | - | ||||||
| Capital Expenditures | Unchanged | ~$365 million | ||||||
The table below provides JetBlue’s updated interest expense guidance for the full year ending December 31, 2024.
Full Year 2024 Outlook | Current Guidance | Previous Guidance (1) | ||||||
| Interest Expense | $370 - $380 million | - | ||||||
(1) Management previously assumed full year interest expense of $320 to $330 million as of January 30, 2024. Full year 2024 interest expense was not previously guided.
(2) Previous guidance as of July 30, 2024. Third quarter 2024 interest expense was not previously guided.
(3) Non-GAAP financial measure; refer to Note A for further details on non-GAAP forward looking information.
(4) Includes fuel taxes, hedges and other fuel fees.
(5) JetBlue utilizes the forward Brent crude curve and the forward Brent crude to jet crack spread to calculate the unhedged portion of its current quarter. Fuel price is based on forward curve as of August 23, 2024.
In addition, today JetBlue provided investors with an update regarding the Company’s business and business strategy, including the Financing Transactions, which is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information included under Item 7.01 of this report (including Exhibit 99.1) is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward Looking Information
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Current Report on Form 8-K are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "may," "will," "should," "seeks," "goals," "targets" or the negative of these terms or other similar expressions. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. Forward-looking statements contained in this Current Report on Form 8-K include, without limitation, statements regarding our outlook and underlying expectations, including with respect to fuel prices and interest expense. 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, the risk associated with the execution of our strategic operating plans in the near-term and long-term; our extremely competitive industry; risks related to the long-term nature of our fleet order book; volatility in fuel prices and availability of fuel; increased maintenance costs associated with fleet age; costs associated with salaries, wages and benefits; risks associated with a potential material reduction in the rate of interchange reimbursement fees; risks associated with doing business internationally; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market; risks associated with extended interruptions or disruptions in service at our focus cities; risks associated with airport expenses; risks associated with seasonality and weather; our reliance on a limited number of suppliers for our aircraft, engines, and our Fly-Fi® product; risks related to new or increased tariffs imposed on commercial aircraft and related parts imported from outside the United States; the outcome of legal proceedings with respect to the NEA and our wind-down of the NEA; risks associated with cybersecurity and privacy, including information security breaches; heightened regulatory requirements concerning data security compliance; risks associated with reliance on, and potential failure of, automated systems to operate our business; our inability to attract and retain qualified crewmembers; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; reputational and business risk from an accident or incident involving our aircraft; risks associated with damage to our reputation and the JetBlue brand name; our significant amount of fixed obligations and the ability to service such obligations; our substantial indebtedness and impact on our ability to meet future financing needs; financial risks associated with credit card processors; risks associated with seeking short-term additional financing liquidity; failure to realize the full value of intangible or long-lived assets, causing us to record impairments; risks associated with disease outbreaks or environmental disasters affecting travel behavior; compliance with environmental laws and regulations, which may cause us to incur substantial costs; the impacts of federal budget constraints or federally imposed furloughs; impact of global climate change and legal, regulatory or market response to such change; increasing attention to, and evolving expectations regarding, environmental, social and governance matters; changes in government regulations in our industry; acts of war or terrorism; and changes in global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel. 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 Current Report on Form 8-K, could cause our results to differ materially from those expressed in the forward-looking statements. Further information concerning these and other factors is contained in JetBlue's filings with the U.S. Securities and Exchange Commission (the "SEC"), including but not limited to in our Annual Report on Form 10-K for the year ended December 31, 2023, as may be updated by our other SEC filings. In light of these risks and uncertainties, the forward-looking events discussed in this Current Report on Form 8-K might not occur. Our forward-looking statements speak only as of the date
of this Current Report on Form 8-K. 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.
Note A - Non-GAAP Financial Measures
We report our financial results in accordance with GAAP; however, we present certain non-GAAP financial measures in this Current Report on Form 8-K. Non-GAAP financial measures are financial measures that are derived from the condensed consolidated financial statements, but that are not presented in accordance with GAAP. We present these non-GAAP financial measures because we believe they provide useful supplemental information that enables 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.
With respect to JetBlue’s CASM Ex-Fuel guidance (1), we are not able to provide a reconciliation of forward-looking measures where the quantification of certain excluded items reflected in the measures cannot be calculated or predicted at this time without unreasonable efforts. In these cases, the reconciling information that is unavailable includes a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors beyond our control. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable and potentially significant impact on our future GAAP financial results.
(1) CASM Ex-Fuel is a non-GAAP measure that excludes fuel, other non-airline operating expenses, and special items.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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: | September 5, 2024 | By: | /s/ Dawn Southerton | ||||||||||||||
| Dawn Southerton | |||||||||||||||||
| Vice President, Controller | |||||||||||||||||
| (Principal Accounting Officer) | |||||||||||||||||