(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
☑ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company |
Page | |
PART I. FINANCIAL INFORMATION | |
PART II. OTHER INFORMATION | |
March 31, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | $ | |||||
Investment securities | |||||||
Receivables, less allowance (2020-$2; 2019-$1) | |||||||
Inventories, less allowance (2020-$23; 2019-$22) | |||||||
Prepaid expenses and other | |||||||
Total current assets | |||||||
PROPERTY AND EQUIPMENT | |||||||
Flight equipment | |||||||
Predelivery deposits for flight equipment | |||||||
Total flight equipment and predelivery deposits, gross | |||||||
Less accumulated depreciation | |||||||
Total flight equipment and predelivery deposits, net | |||||||
Other property and equipment | |||||||
Less accumulated depreciation | |||||||
Total other property and equipment, net | |||||||
Total property and equipment, net | |||||||
OPERATING LEASE ASSETS | |||||||
OTHER ASSETS | |||||||
Investment securities | |||||||
Restricted cash | |||||||
Other | |||||||
Total other assets | |||||||
TOTAL ASSETS | $ | $ | |||||
March 31, 2020 | December 31, 2019 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | $ | |||||
Air traffic liability | |||||||
Accrued salaries, wages and benefits | |||||||
Other accrued liabilities | |||||||
Current operating lease liabilities | |||||||
Short-term borrowings | |||||||
Current maturities of long-term debt and finance lease obligations | |||||||
Total current liabilities | |||||||
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | |||||||
LONG-TERM OPERATING LEASE LIABILITIES | |||||||
DEFERRED TAXES AND OTHER LIABILITIES | |||||||
Deferred income taxes | |||||||
Air traffic liability - loyalty non-current | |||||||
Other | |||||||
Total deferred taxes and other liabilities | |||||||
COMMITMENTS AND CONTINGENCIES (Note 7) | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Preferred stock, $0.01 par value; 25 shares authorized, none issued | |||||||
Common stock, $0.01 par value; 900 shares authorized, 428 and 427 shares issued and 270 and 282 shares outstanding at March 31, 2020 and December 31, 2019, respectively | |||||||
Treasury stock, at cost; 158 and 145 shares at March 31, 2020 and December 31, 2019, respectively | ( | ) | ( | ) | |||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive (loss) income | ( | ) | |||||
Total stockholders’ equity | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
OPERATING REVENUES | |||||||
Passenger | $ | $ | |||||
Other | |||||||
Total operating revenues | |||||||
OPERATING EXPENSES | |||||||
Aircraft fuel and related taxes | |||||||
Salaries, wages and benefits | |||||||
Landing fees and other rents | |||||||
Depreciation and amortization | |||||||
Aircraft rent | |||||||
Sales and marketing | |||||||
Maintenance, materials and repairs | |||||||
Other operating expenses | |||||||
Special items | |||||||
Total operating expenses | |||||||
OPERATING (LOSS) INCOME | ( | ) | |||||
OTHER INCOME (EXPENSE) | |||||||
Interest expense | ( | ) | ( | ) | |||
Capitalized interest | |||||||
Interest income and other | ( | ) | |||||
Total other income (expense) | ( | ) | ( | ) | |||
(LOSS) INCOME BEFORE INCOME TAXES | ( | ) | |||||
Income tax (benefit) expense | ( | ) | |||||
NET (LOSS) INCOME | $ | ( | ) | $ | |||
(LOSS) EARNINGS PER COMMON SHARE: | |||||||
Basic | $ | ( | ) | $ | |||
Diluted | $ | ( | ) | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
NET (LOSS) INCOME | $ | ( | ) | $ | |||
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of tax benefit/(expense) of $3 and $0 in 2020 and 2019, respectively) | ( | ) | |||||
Total other comprehensive (loss) income | ( | ) | |||||
COMPREHENSIVE (LOSS) INCOME | $ | ( | ) | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net (loss) income | $ | ( | ) | $ | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Deferred income taxes | ( | ) | |||||
Impairment of long-lived assets | |||||||
Depreciation | |||||||
Amortization | |||||||
Stock-based compensation | |||||||
Changes in certain operating assets and liabilities | |||||||
Other, net | ( | ) | |||||
Net cash provided by operating activities | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Predelivery deposits for flight equipment | ( | ) | ( | ) | |||
Purchase of held-to-maturity investments | ( | ) | |||||
Proceeds from the maturities of held-to-maturity investments | |||||||
Purchase of available-for-sale securities | ( | ) | ( | ) | |||
Proceeds from the sale of available-for-sale securities | |||||||
Other, net | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from short-term borrowings | |||||||
Repayment of long-term debt and finance lease obligations | ( | ) | ( | ) | |||
Acquisition of treasury stock | ( | ) | ( | ) | |||
Other, net | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||
Cash, cash equivalents and restricted cash at end of period(1) | $ | $ | |||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
Cash payments for interest (net of amount capitalized) | $ | 18 | $ | 21 | |||
Cash payments for income taxes (net of refunds) | |||||||
NON-CASH TRANSACTONS | |||||||
Operating lease assets obtained in exchange for operating lease liabilities | $ | $ | |||||
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets: | |||||||
March 31, 2020 | March 31, 2019 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Common Shares | Common Stock | Treasury Shares | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||||||||
Net (loss) | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||
Vesting of restricted stock units | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||||
Stock compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||
Shares repurchased | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
Common Shares | Common Stock | Treasury Shares | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||
Vesting of restricted stock units | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||||
Stock compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||
Shares repurchased | — | — | ( | ) | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
March 31, 2020 | December 31, 2019 | ||||||
Available-for-sale securities | |||||||
Time deposits | $ | $ | |||||
Commercial paper | |||||||
Debt securities | |||||||
Total available-for-sale securities | |||||||
Held-to-maturity securities | |||||||
Corporate bonds | |||||||
Total held-to-maturity securities | |||||||
Total investment securities | $ | $ |
• | Updated our sick leave policy to provide up to 14 days of paid sick leave for crewmembers who have been diagnosed with COVID-19 or are required to quarantine; |
• | Implemented a framework for internal contact tracing and a crewmember notification process; |
• | Enhanced daily and overnight cleaning and disinfection of our aircraft and all of our facilities; |
• | Eliminated layovers for crewmembers in New York City and worked with crew transportation companies to ensure social distancing; |
• | Limited the number of seats available to be sold on most flights to promote social distancing; |
• | Retained an infectious disease specialist to conduct calls with crewmembers; |
• | Implemented jump seat buffers on our flights to further promote social distancing measures; |
• | Mandated that crewmembers use facial coverings and other personal protective equipment while also reducing the number of service touchpoints; |
• | Provided enhanced flexibility to our customers by waiving change fees while also extending the expiration date of travel credits to 24 months; and |
• | Recently required customers to wear face coverings while traveling on our aircraft. |
• | A reduction in flying capacity to align with the expected demand, which has resulted in temporarily parking approximately |
• | Implemented salary reductions of |
• | Renegotiated service rates with our business partners and extended payment terms. |
• | Executed a new $ |
• | Borrowed on our existing $ |
• | Executed a $ |
• | Suspended non-critical capital expenditure projects. |
• | Amended our purchase agreement with Airbus resulting in a $ |
• | Suspended share repurchases. |
• | Obtained $ |
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
Passenger revenue | ||||||
Passenger travel | $ | $ | ||||
Loyalty revenue - air transportation | ||||||
Other revenue | ||||||
Loyalty revenue | ||||||
Other revenue | ||||||
Total revenue | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
Air traffic liability - passenger travel | $ | $ | |||||
Air traffic liability - loyalty program (air transportation) | |||||||
Deferred revenue | |||||||
Total | $ | $ |
Balance at December 31, 2019 | $ | ||
TrueBlue® points redeemed | ( | ) | |
TrueBlue® points earned and sold | |||
Balance at March 31, 2020 | $ | ||
Balance at December 31, 2018 | $ | ||
TrueBlue® points redeemed | ( | ) | |
TrueBlue® points earned and sold | |||
Balance at March 31, 2019 | $ |
March 31, 2020 | December 31, 2019 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Public Debt | |||||||||||||||
Fixed rate special facility bonds, due through 2036 | $ | $ | $ | $ | |||||||||||
Fixed rate enhanced equipment notes: | |||||||||||||||
Series AA, due through 2032 | |||||||||||||||
Series A, due through 2028 | |||||||||||||||
Non-Public Debt | |||||||||||||||
Fixed rate enhanced equipment notes, due through 2023 | |||||||||||||||
Floating rate equipment notes, due through 2028 | |||||||||||||||
Fixed rate equipment notes, due through 2028 | |||||||||||||||
Total(1) | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net (loss) income | $ | ( | ) | $ | |||
Weighted average basic shares | |||||||
Effect of dilutive securities | |||||||
Weighted average diluted shares | |||||||
(Loss) earnings per common share | |||||||
Basic | $ | ( | ) | $ | |||
Diluted | $ | ( | ) | $ |
Jet fuel call spread option agreements | ||
Second Quarter 2020 | % | |
Third Quarter 2020 | % | |
Fourth Quarter 2020 | % |
March 31, 2020 | December 31, 2019 | ||||||
Fuel derivatives | |||||||
Asset fair value recorded in prepaid expense and other(1) | $ | $ | |||||
Longest remaining term (months) | |||||||
Hedged volume (barrels, in thousands) | |||||||
Estimated amount of existing losses (gains) expected to be reclassified into earnings in the next 12 months | $ | $ | ( | ) |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Fuel derivatives | |||||||
Hedge effectiveness losses recognized in aircraft fuel expense | $ | $ | |||||
Losses on derivatives resulting from the discontinuance of hedge accounting recognized in interest income and other | |||||||
Hedge losses on derivatives recognized in comprehensive income | |||||||
Percentage of actual consumption economically hedged | % | % |
March 31, 2020 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||
Available-for-sale investment securities | |||||||||||||||
Aircraft fuel derivatives |
December 31, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||
Available-for-sale investment securities | |||||||||||||||
Aircraft fuel derivatives |
Aircraft Fuel Derivatives(1)(2) | Total | ||||||
Balance of accumulated income, at December 31, 2019 | $ | $ | |||||
Reclassifications into earnings, net of tax benefit $1 | |||||||
Change in fair value, net of tax benefit $4 | ( | ) | ( | ) | |||
Balance of accumulated (loss), at March 31, 2020 | $ | ( | ) | $ | ( | ) | |
Balance of accumulated (loss), at December 31, 2018 | $ | ( | ) | $ | ( | ) | |
Reclassifications into earnings, net of tax benefit of $0 | |||||||
Change in fair value, net of tax benefit of $0 | |||||||
Balance of accumulated (loss), at March 31, 2019 | $ | ( | ) | $ | ( | ) |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Special Items | |||||||
Fleet impairment(1) | $ | $ | |||||
Embraer E190 fleet transition costs(2) | |||||||
Union contract costs(3) | |||||||
Total | $ | $ |
• | Updated our sick leave policy to provide up to 14 days of paid sick leave for crewmembers who have been diagnosed with COVID-19 or are required to quarantine; |
• | Implemented a framework for internal contact tracing and a crewmember notification process; |
• | Enhanced daily and overnight cleaning and disinfection of our aircraft and all of our facilities; |
• | Eliminated layovers for crewmembers in New York City and worked with crew transportation companies to ensure social distancing; |
• | Limited the number of seats available to be sold on most flights to promote social distancing; |
• | Retained an infectious disease specialist to conduct calls with crewmembers; |
• | Implemented jump seat buffers on our flights to further promote social distancing measures; |
• | Mandated that crewmembers use facial coverings and other personal protective equipment while also reducing the number of service touchpoints; |
• | Provided enhanced flexibility to our customers by waiving change fees while also extending the expiration date of travel credits to 24 months; and |
• | Recently required customers to wear face coverings while traveling on our aircraft. |
• | A reduction in flying capacity to align with the expected demand, which has resulted in temporarily parking of approximately 170 aircraft. |
• | Implemented salary reductions of 20% to 50% for our officers. |
• | Renegotiated service rates with our business partners and extended payment terms. |
• | Executed a new $1.0 billion 364-day delayed draw term loan agreement and immediately drew down on the facility for the full amount available. |
• | Borrowed on our existing $550 million revolving credit facility. |
• | Executed a $150 million pre-purchase arrangement with our co-brand credit card partner. |
• | Suspended non-critical capital expenditure projects. |
• | Amended our purchase agreement with Airbus resulting in a $1.1 billion reduction in aircraft capital expenditures through 2022. |
• | Suspended share repurchases. |
• | Obtained $936 million of government funding under The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is discussed further below. |
• | Operating revenue per available seat mile (RASM) for the three months ended March 31, 2020 decreased by 12.0% to 10.67 cents. |
• | Operating expense and operating expense per available seat mile (CASM) for the three months ended March 31, 2020 increased by 7.1% to $1.9 billion and 11.0% to 12.91 cents, respectively. Our operating expense for the first quarter of 2020 and 2019 included the effects of special items. For the first quarter of 2020, we recorded an impairment charge of $202 million on our Embraer E190 fleet which contributed 1.36 cents to our unit cost. Our operating expense for the first quarter of 2019 included $12 million of special items related to our Embraer E190 fleet transition and the implementation of our pilots' collective bargaining agreement, which contributed 0.08 cents to our unit cost in the prior year. Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile (CASM ex-fuel)(1) increased by 4.0% to 9.01 cents. |
• | Our reported loss per share for the first quarter of 2020 was $(0.97) compared to reported earnings per diluted share of $0.14 for the first quarter of 2019. Our results for first quarter of 2020 and 2019 included the effects of special items. Excluding special items, our adjusted (loss) earnings per diluted share(1) for the first quarter of 2020 and 2019 were $(0.42) and $0.16, respectively. |
• | We generated $124 million in cash from operations and $(243) million in free cash flow(1) for the three months ended March 31, 2020. |
(Revenues in millions; percent changes based on unrounded numbers) | Three Months Ended March 31, | Year-over-Year Change | |||||||||||||
2020 | 2019 | $ | % | ||||||||||||
Passenger revenue | $ | 1,511 | $ | 1,802 | $ | (291 | ) | (16.1 | ) | ||||||
Other revenue | 77 | 69 | 8 | 10.7 | |||||||||||
Total operating revenues | $ | 1,588 | $ | 1,871 | $ | (283 | ) | (15.1 | ) | ||||||
Average Fare | $ | 185.44 | $ | 177.24 | $ | 8.20 | 4.6 | ||||||||
Yield per passenger mile (cents) | 14.54 | 14.15 | 0.39 | 2.8 | |||||||||||
Passenger revenue per ASM (cents) | 10.15 | 11.67 | (1.52 | ) | (13.0 | ) | |||||||||
Operating revenue per ASM (cents) | 10.67 | 12.12 | (1.45 | ) | (12.0 | ) | |||||||||
Average stage length (miles) | 1,160 | 1,153 | 7 | 0.6 | |||||||||||
Revenue passengers (thousands) | 8,150 | 10,165 | (2,015 | ) | (19.8 | ) | |||||||||
Revenue passenger miles (millions) | 10,392 | 12,734 | (2,342 | ) | (18.4 | ) | |||||||||
Available Seat Miles (ASMs) (millions) | 14,891 | 15,437 | (546 | ) | (3.5 | ) | |||||||||
Load Factor | 69.8 | % | 82.5 | % | (12.7 | ) | pts. |
(in millions; per ASM data in cents; percent changes based on unrounded numbers) | Three Months Ended March 31, | Year-over-Year Change | Cents per ASM | ||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | % Change | |||||||||||||||||
Aircraft fuel and related taxes | $ | 365 | $ | 437 | $ | (72 | ) | (16.4 | )% | 2.45 | 2.83 | (13.4 | )% | ||||||||||
Salaries, wages and benefits | 601 | 575 | 26 | 4.5 | 4.04 | 3.73 | 8.3 | ||||||||||||||||
Landing fees and other rents | 112 | 115 | (3 | ) | (3.3 | ) | 0.75 | 0.75 | 0.2 | ||||||||||||||
Depreciation and amortization | 139 | 124 | 15 | 12.0 | 0.93 | 0.80 | 16.1 | ||||||||||||||||
Aircraft rent | 21 | 25 | (4 | ) | (14.4 | ) | 0.14 | 0.16 | (11.3 | ) | |||||||||||||
Sales and marketing | 53 | 66 | (13 | ) | (20.2 | ) | 0.35 | 0.43 | (17.3 | ) | |||||||||||||
Maintenance, materials and repairs | 160 | 155 | 5 | 3.1 | 1.07 | 1.00 | 6.9 | ||||||||||||||||
Other operating expenses | 269 | 286 | (17 | ) | (5.8 | ) | 1.82 | 1.85 | (2.3 | ) | |||||||||||||
Special items | 202 | 12 | 190 | 1,642.9 | 1.36 | 0.08 | 1,706.8 | ||||||||||||||||
Total operating expenses | $ | 1,922 | $ | 1,795 | $ | 127 | 7.1 | % | 12.91 | 11.63 | 11.0 | % | |||||||||||
Total operating expenses excluding special items(1) | $ | 1,720 | $ | 1,783 | $ | (63 | ) | (3.6 | )% | 11.55 | 11.55 | — | % |
Three Months Ended March 31, | Year-over-Year Change | ||||||||||
(percent changes based on unrounded numbers) | 2020 | 2019 | % | ||||||||
Operational Statistics | |||||||||||
Revenue passengers (thousands) | 8,150 | 10,165 | (19.8 | ) | |||||||
Revenue passenger miles (RPMs) (millions) | 10,392 | 12,734 | (18.4 | ) | |||||||
Available seat miles (ASMs) (millions) | 14,891 | 15,437 | (3.5 | ) | |||||||
Load factor | 69.8 | % | 82.5 | % | (12.7 | ) | pts | ||||
Aircraft utilization (hours per day) | 10.6 | 11.8 | (10.2 | ) | |||||||
Average fare | $ | 185.44 | $ | 177.24 | 4.6 | ||||||
Yield per passenger mile (cents) | 14.54 | 14.15 | 2.8 | ||||||||
Passenger revenue per ASM (cents) | 10.15 | 11.67 | (13.0 | ) | |||||||
Operating revenue per ASM (cents) | 10.67 | 12.12 | (12.0 | ) | |||||||
Operating expense per ASM (cents) | 12.91 | 11.63 | 11.0 | ||||||||
Operating expense per ASM, excluding fuel(1) | 9.01 | 8.66 | 4.0 | ||||||||
Departures | 83,295 | 89,236 | (6.7 | ) | |||||||
Average stage length (miles) | 1,160 | 1,153 | 0.6 | ||||||||
Average number of operating aircraft during period | 259.1 | 252.9 | 2.5 | ||||||||
Average fuel cost per gallon, including fuel taxes | $ | 1.86 | $ | 2.05 | (9.3 | ) | |||||
Fuel gallons consumed (millions) | 197 | 213 | (7.8 | ) | |||||||
Average number of full-time equivalent crewmembers | 18,698 | 18,292 |
• | A reduction in flying capacity to align with the expected demand, which has resulted in temporarily parking approximately 170 aircraft. |
• | Implemented salary reductions of 20% to 50% for our officers. |
• | Renegotiated service rates with our business partners and extended payment terms. |
• | Executed a new $1.0 billion 364-day delayed draw term loan agreement and immediately drew down on the facility for the full amount available. |
• | Borrowed on our existing $550 million revolving credit facility. |
• | Executed a $150 million pre-purchase arrangement with our co-brand credit card partner. |
• | Suspended non-critical capital expenditure projects. |
• | Amended our purchase agreement with Airbus resulting in a $1.1 billion reduction in aircraft capital expenditures through 2022. |
• | Suspended share repurchases. |
• | Obtained $936 million of government funding under CARES Act. See Note 2 to our condensed consolidated financial statements. |
Payments due in | |||||||||||||||||||||||||||
Total | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | |||||||||||||||||||||
Debt and finance lease obligations(1) | $ | 3.6 | $ | 0.3 | $ | 1.4 | $ | 0.4 | $ | 0.3 | $ | 0.2 | $ | 1.0 | |||||||||||||
Operating lease obligations | 1.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.6 | ||||||||||||||||||||
Flight equipment purchase obligations(2) | 7.4 | 0.9 | 1.4 | 1.3 | 1.7 | 1.6 | 0.5 | ||||||||||||||||||||
Other obligations(3) | 2.5 | 0.2 | 0.2 | 0.3 | 0.4 | 0.4 | 1.0 | ||||||||||||||||||||
Total | $ | 14.6 | $ | 1.5 | $ | 3.1 | $ | 2.1 | $ | 2.5 | $ | 2.3 | $ | 3.1 |
Year | Airbus A321neo | Airbus A220 | Total | ||
2019 | 7 | — | 7 | ||
2020 | 11 | 1 | 12 | ||
2021 | 17 | 6 | 23 | ||
2022 | 15 | 8 | 23 | ||
2023 | 14 | 19 | 33 | ||
2024 | 12 | 22 | 34 | ||
2025 | — | 12 | 12 | ||
2026 | — | 2 | 2 | ||
Total | 76 | 70 | 146 |
Year | Airbus A321neo | Airbus A220 | Total | ||
2020 | 4 | 1 | 5 | ||
2021 | 10 | 7 | 17 | ||
2022 | 7 | 8 | 15 | ||
2023 | 15 | 19 | 34 | ||
2024 | 15 | 22 | 37 | ||
2025 | 13 | 12 | 25 | ||
2026 | 12 | 1 | 13 | ||
Total | 76 | 70 | 146 |
NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2020 | 2019 | ||||||||||||||
(in millions; per ASM data in cents) | $ | per ASM | $ | per ASM | |||||||||||
Total operating expenses | $ | 1,922 | $ | 12.91 | $ | 1,795 | $ | 11.63 | |||||||
Less: | |||||||||||||||
Aircraft fuel and related taxes | 365 | 2.45 | 437 | 2.83 | |||||||||||
Other non-airline expenses | 14 | 0.09 | 9 | 0.06 | |||||||||||
Special items | 202 | 1.36 | 12 | 0.08 | |||||||||||
Operating expenses, excluding fuel | $ | 1,341 | $ | 9.01 | $ | 1,337 | $ | 8.66 |
NON-GAAP FINANCIAL MEASURE | |||||||
RECONCILIATION OF OPERATING EXPENSE, INCOME BEFORE TAXES, NET INCOME AND EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS | |||||||
Three Months Ended March 31, | |||||||
(in millions except per share amounts) | 2020 | 2019 | |||||
Total operating revenues | $ | 1,588 | $ | 1,871 | |||
Total operating expenses | $ | 1,922 | $ | 1,795 | |||
Less: Special items | 202 | 12 | |||||
Total operating expenses excluding special items | $ | 1,720 | $ | 1,783 | |||
Operating (loss) income | $ | (334 | ) | $ | 76 | ||
Add back: Special items | 202 | 12 | |||||
Operating (loss) income excluding special items | $ | (132 | ) | $ | 88 | ||
Operating margin excluding special items | (8.3 | )% | 4.7 | % | |||
(Loss) income before income taxes | $ | (354 | ) | $ | 58 | ||
Add back: Special items | 202 | 12 | |||||
(Loss) income before income taxes excluding special items | $ | (152 | ) | $ | 70 | ||
Pre-tax margin excluding special items | (9.5 | )% | 3.7 | % | |||
Net (loss) income | $ | (268 | ) | $ | 42 | ||
Add back: Special items | 202 | 12 | |||||
Less: Income tax benefit related to special items | 50 | 3 | |||||
Net (loss) income excluding special items | $ | (116 | ) | $ | 51 | ||
(Loss) Earnings Per Common Share: | |||||||
Basic | $ | (0.97 | ) | $ | 0.14 | ||
Add back: Special items, net of tax | 0.55 | 0.02 | |||||
Basic excluding special items | $ | (0.42 | ) | $ | 0.16 | ||
Diluted | $ | (0.97 | ) | $ | 0.14 | ||
Add back: Special items, net of tax | 0.55 | 0.02 | |||||
Diluted excluding special items | $ | (0.42 | ) | $ | 0.16 |
NON-GAAP FINANCIAL MEASURE | ||||||||
RECONCILIATION OF FREE CASH FLOW | ||||||||
Three Months Ended March 31, | ||||||||
(in millions) | 2020 | 2019 | ||||||
Net cash provided by operating activities | $ | 124 | $ | 420 | ||||
Less: Capital expenditures | (314 | ) | (101 | ) | ||||
Less: Predelivery deposits for flight equipment | (53 | ) | (63 | ) | ||||
Free Cash Flow | $ | (243 | ) | $ | 256 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||
January 2020 | — | — | $ | 640 | ||||||||
February 2020 | 8.1 | (1) (2) | 8.1 | $ | 480 | |||||||
March 2020 | 4.9 | (2) | 4.9 | $ | 480 | |||||||
Total | 13.0 | 13.0 |
JETBLUE AIRWAYS CORPORATION | ||||||||
(Registrant) | ||||||||
Date: | May 8, 2020 | By: | /s/ Alexander Chatkewitz | |||||
Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer) |
Exhibit Number | Exhibit | |
4.1 | ||
4.2 | ||
10.1*** | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.41(b) | ||
31.1* | ||
31.2* | ||
32** | ||
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
* | Filed herewith. | |
** | Furnished herewith. | |
*** | Certain confidential information contained in this exhibit, marked by [***], has been omitted because it (i) is not material and (ii) would likely cause competitive harm to the Company if it were to be publicly disclosed. |
WARRANT AGREEMENT |
Page | |||||
Article I | |||||
Closing | |||||
1.1 | Issuance | 1 | |||
1.2 | Initial Closing; Warrant Closing Date. | 1 | |||
1.3 | Interpretation | 2 | |||
Article II | |||||
Representations and Warranties | |||||
2.1 | Representations and Warranties of the Company | 3 | |||
Article III | |||||
Covenants | |||||
3.1 | Commercially Reasonable Efforts | 6 | |||
3.2 | Expenses | 7 | |||
3.3 | Sufficiency of Authorized Common Stock; Exchange Listing | 8 | |||
Article IV | |||||
Additional Agreements | |||||
4.1 | Investment | 8 | |||
4.2 | Legends | 8 | |||
4.3 | Certain Transactions | 9 | |||
4.4 | Transfer of Warrants and Warrant Shares | 9 | |||
4.5 | Registration Rights | 9 | |||
4.6 | Voting of Warrant Shares | 21 | |||
Article V | |||||
Miscellaneous | |||||
5.1 | Survival of Representations and Warranties | 21 | |||
5.2 | Amendment | 21 | |||
5.3 | Waiver of Conditions | 21 | |||
5.4 | Governing Law: Submission to Jurisdiction, Etc. | 21 | |||
5.5 | Notices | 21 | |||
5.6 | Definitions | 21 | |||
5.7 | Assignment | 22 | |||
5.8 | Severability | 23 | |||
5.9 | No Third Party Beneficiaries | 23 |
Term | Location of Definition |
Affiliate | Annex B |
Agreement | Recitals |
Appraisal Procedure | Annex B |
Board of Directors | 2.1(i) |
Business Combination | Annex B |
Business Day | Annex B |
Capitalization Date | 2.1(b) |
Closing | 1.2(a) |
Common Stock | Annex B |
Company | Recitals |
Company Reports | 2.1(j)(i) |
Exchange Act | Annex B |
Governmental Authority | 5.6(a) |
Holder | 4.5(k)(i) |
Indemnitee | 4.5(g)(i) |
Initial Closing | 1.2(a) |
Lien | 5.6(c) |
Material Adverse Effect | 5.6(d) |
Organizational Documents | 5.6(e) |
Pending Underwritten Offering | 4.5(l) |
Piggyback Registration | 4.5(a)(iv) |
Promissory Note | Recitals |
register; registered; registration | 4.5(k)(ii) |
Registrable Securities | 4.5(k)(iii) |
Registration Commencement Date | 4.5(a)(i) |
Registration Expenses | 4.5(k)(iv) |
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 | 4.5(k)(v) |
SEC | 2.1(c) |
Securities Act | Annex B |
Selling Expenses | 4.5(k)(vi) |
Shelf Registration Statement | 4.5(a)(ii) |
Special Registration | 4.5(i) |
Stockholder Proposals | 3.1(b) |
Subsidiary | 5.6(f) |
Transfer | 4.4 |
Treasury | Recitals |
Warrant Closing Date | 1.2(a) |
Warrants | Recitals |
Warrant Shares | Annex B |
If in book-entry form through the Depositary: | ||||
Depositary Account Number: | ||||
Name of Agent Member: | ||||
If in certificated form: | ||||
Social Security Number or Other Identifying Number: | ||||
Name: | ||||
Street Address: | ||||
City, State and Zip Code: | ||||
Any unexercised Warrants evidenced by the exercising Warrantholder’s interest in the Warrant: | ||||
Social Security Number or Other Identifying Number: | ||||
Name: | ||||
Street Address: | ||||
City, State and Zip Code: |
By: | Name: Title: |
By: | Name: Title: |
(i) | On the Closing Date, the quotient of (x) the product of the principal amount of the Promissory Note multiplied by 0.1 divided by (y) the Exercise Price (as defined in Annex B); and |
(ii) | On each subsequent Warrant Closing Date, the quotient of (x) the product of the amount by which the principal amount of the Promissory Note is increased on such Warrant Closing Date multiplied by 0.1 divided by (y) the Exercise Price. |
• | total number of authorized shares of common stock, par value $0.01 per share (“common stock”): 900,000,000 |
• | total number of authorized shares of preferred stock, par value $0.01 per share: 25,000,000 |
• | total number of shares of common stock outstanding: 269,707,459 |
• | total number of shares of preferred stock outstanding: 0 |
• | total number of shares of common stock underlying unvested restricted stock units: 2,320,639 |
• | total number of shares of common stock underlying unvested performance stock units (assuming payout at maximum performance levels): 1,060,106 |
• | total number of shares of common stock underlying unvested deferred stock units: 484,908 |
• | total number of shares of common stock underlying unexercised stock options: 0 |
ESG Score | Change in Applicable Margin | Change in Commitment Fee Rate |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
Recipient: JetBlue Airways Corporation 27-01 Queens Plaza North Long Island City, NY 11101 | PSP Participant Number: PSA-2004030783 Employer Identification Number: 87-0617894 DUNS Number: _____________________________ |
Amount of Initial Payroll Support Payment: $935,754,826 | |
The Department of the Treasury (Treasury) hereby provides Payroll Support (as defined herein) under Division A, Title IV, Subtitle B of the Coronavirus Aid, Relief, and Economic Security Act. The Signatory Entity named above, on behalf of itself and its Affiliates (as defined herein), agrees to comply with this Agreement and applicable Federal law as a condition of receiving Payroll Support. The Signatory Entity and its undersigned authorized representatives acknowledge that a materially false, fictitious, or fraudulent statement (or concealment or omission of a material fact) in connection with this Agreement may result in administrative remedies as well as civil and/or criminal penalties. | |
The undersigned hereby agree to the attached Payroll Support Program Agreement. | |
/s/Steve T. Mnuchin Department of the Treasury Name: Steven Mnuchin Title: Secretary Date: April 23, 2020 | /s/ Robin Hayes JetBlue Airways Corporation First Authorized Representative: Title: Chief Executive Officer Date: April 23, 2020 /s/ Steve Priest JetBlue Airways Corporation Second Authorized Representative: Title: Chief Financial Officer Date: April 23, 2020 |
1. | Upon the execution of this Agreement by Treasury and the Recipient, the Secretary shall approve the Recipient’s application for Payroll Support. |
2. | The Recipient may receive Payroll Support in multiple payments up to the Maximum Awardable Amount, and the amounts (individually and in the aggregate) and timing of such payments will be determined by the Secretary in his sole discretion. The Secretary may, in his sole discretion, increase or reduce the Maximum Awardable Amount (a) consistent with section 4113(a) of the CARES Act and (b) on a pro rata basis in order to address any shortfall in available funds, pursuant to section 4113(c) of the CARES Act. |
3. | The Secretary may determine in his sole discretion that any Payroll Support shall be conditioned on, and subject to, such additional terms and conditions (including the receipt of, and any terms regarding, Taxpayer Protection Instruments) to which the parties may agree in writing. |
4. | The Recipient shall use the Payroll Support exclusively for the continuation of payment of Wages, Salaries, and Benefits to the Employees of the Recipient. |
a. | Furloughs and Layoffs. The Recipient shall not conduct an Involuntary Termination or Furlough of any Employee between the date of this Agreement and September 30, 2020. |
b. | Employee Salary, Wages, and Benefits |
i. | Salary and Wages. Except in the case of a Permitted Termination or Furlough, the Recipient shall not, between the date of this Agreement and September 30, 2020, reduce, without the Employee’s consent, (A) the pay rate of any Employee earning a Salary, or (B) the pay rate of any Employee earning Wages. |
ii. | Benefits. Except in the case of a Permitted Termination or Furlough, the Recipient shall not, between the date of this Agreement and September 30, 2020, reduce, without the Employee’s consent, the Benefits of any Employee; provided, however, that for purposes of this paragraph, personnel expenses associated with the performance of work duties, including those described in line 10 of Financial Reporting Schedule P-6, Form 41, as published by the Department of Transportation, may be reduced to the extent the associated work duties are not performed. |
5. | Through September 30, 2021, neither the Recipient nor any Affiliate shall, in any transaction, purchase an equity security of the Recipient or of any direct or indirect parent company of the Recipient that, in either case, is listed on a national securities exchange. |
6. | Through September 30, 2021, the Recipient shall not pay dividends, or make any other capital distributions, with respect to the common stock (or equivalent equity interest) of the Recipient. |
7. | Beginning March 24, 2020, and ending March 24, 2022, the Recipient and its Affiliates shall not pay any of the Recipient’s Corporate Officers or Employees whose Total Compensation exceeded $425,000 in calendar year 2019 (other than an Employee whose compensation is determined through an existing collective bargaining agreement entered into before March 27, 2020): |
a. | Total Compensation which exceeds, during any 12 consecutive months of such two-year period, the Total Compensation the Corporate Officer or Employee received in calendar year 2019; or |
b. | Severance Pay or Other Benefits in connection with a termination of employment with the Recipient which exceed twice the maximum Total Compensation received by such Corporate Officer or Employee in calendar year 2019. |
8. | Beginning March 24, 2020, and ending March 24, 2022, the Recipient and its Affiliates shall not pay any of the Recipient’s Corporate Officers or Employees whose Total Compensation exceeded $3,000,000 in calendar year 2019 Total Compensation in excess of the sum of: |
a. | $3,000,000; and |
b. | 50 percent of the excess over $3,000,000 of the Total Compensation received by such Corporate Officer or Employee in calendar year 2019. |
9. | For purposes of determining applicable amounts under paragraphs 7 and 8 with respect to any Corporate Officer or Employee who was employed by the Recipient or an Affiliate for less than all of calendar year 2019, the amount of Total Compensation in calendar year 2019 shall mean such Corporate Officer’s or Employee’s Total Compensation on an annualized basis. |
10. | If the Recipient is an air carrier, until March 1, 2022, the Recipient shall comply with any applicable requirement issued by the Secretary of Transportation under section 4114(b) of the CARES Act to maintain scheduled air transportation service to any point served by the Recipient before March 1, 2020. |
11. | This Agreement shall be effective as of the date of its execution by both parties. |
12. | Until the calendar quarter that begins after the later of March 24, 2022, and the date on which no Taxpayer Protection Instrument is outstanding, not later than 45 days after the end of each of the first three calendar quarters of each calendar year and 90 days after the end of each calendar year, the Signatory Entity, on behalf of itself and each other Recipient, shall certify to Treasury that it is in compliance with the terms and conditions of this Agreement and provide a report containing the following: |
a. | the amount of Payroll Support funds expended during such quarter; |
b. | the Recipient’s financial statements (audited by an independent certified public accountant, in the case of annual financial statements); and |
c. | a copy of the Recipient’s IRS Form 941 filed with respect to such quarter; and |
d. | a detailed summary describing, with respect to the Recipient, (a) any changes in Employee headcount during such quarter and the reasons therefor, including any Involuntary Termination or Furlough, (b) any changes in the amounts spent by the Recipient on Employee Wages, Salary, and Benefits during such quarter, and (c) any changes in Total Compensation for, and any Severance Pay or Other Benefits in connection with the termination of, Corporate Officers and Employees subject to limitation under this Agreement during such quarter; and the reasons for any such changes. |
13. | If the Recipient or any Affiliate, or any Corporate Officer of the Recipient or any Affiliate, becomes aware of facts, events, or circumstances that may materially affect the Recipient’s compliance with the terms and conditions of this Agreement, the Recipient or Affiliate shall promptly provide Treasury with a written description of the events or circumstances and any action taken, or contemplated, to address the issue. |
14. | In the event the Recipient contemplates any action to commence a bankruptcy or insolvency proceeding in any jurisdiction, the Recipient shall promptly notify Treasury. |
15. | The Recipient shall: |
a. | Promptly provide to Treasury and the Treasury Inspector General a copy of any Department of Transportation Inspector General report, audit report, or report of any other oversight body, that is received by the Recipient relating to this Agreement. |
b. | Immediately notify Treasury and the Treasury Inspector General of any indication of fraud, waste, abuse, or potentially criminal activity pertaining to the Payroll Support. |
c. | Promptly provide Treasury with any information Treasury may request relating to compliance by the Recipient and its Affiliates with this Agreement. |
16. | The Recipient and Affiliates will provide Treasury, the Treasury Inspector General, and such other entities as authorized by Treasury timely and unrestricted access to all documents, papers, or other records, including electronic records, of the Recipient related to the Payroll Support, to enable Treasury and the Treasury Inspector General to make audits, examinations, and otherwise evaluate the Recipient’s compliance with the terms of this Agreement. This right also includes timely and reasonable access to the Recipient’s and its Affiliates’ personnel for the purpose of interview and discussion related to such documents. This right of access shall continue as long as records are required to be retained. |
17. | If Treasury notifies the Recipient that the first disbursement of Payroll Support to the Recipient under this Agreement is the Maximum Awardable Amount (subject to any pro rata |
18. | The Recipient shall expend and account for Payroll Support funds in a manner sufficient to: |
a. | Permit the preparation of accurate, current, and complete quarterly reports as required under this Agreement. |
b. | Permit the tracing of funds to a level of expenditures adequate to establish that such funds have been used as required under this Agreement. |
19. | The Recipient shall establish and maintain effective internal controls over the Payroll Support; comply with all requirements related to the Payroll Support established under applicable Federal statutes and regulations; monitor compliance with Federal statutes, regulations, and the terms and conditions of this Agreement; and take prompt corrective actions in accordance with audit recommendations. The Recipient shall promptly remedy any identified instances of noncompliance with this Agreement. |
20. | The Recipient and Affiliates shall retain all records pertinent to the receipt of Payroll Support and compliance with the terms and conditions of this Agreement (including by suspending any automatic deletion functions for electronic records, including e-mails) for a period of three years following the period of performance. Such records shall include all information necessary to substantiate factual representations made in the Recipient’s application for Payroll Support, including ledgers and sub-ledgers, and the Recipient’s and Affiliates’ compliance with this Agreement. While electronic storage of records (backed up as appropriate) is preferable, the Recipient and Affiliates may store records in hardcopy (paper) format. The term “records” includes all relevant financial and accounting records and all supporting documentation for the information reported on the Recipient’s quarterly reports. |
21. | If any litigation, claim, investigation, or audit relating to the Payroll Support is started before the expiration of the three-year period, the Recipient and Affiliates shall retain all records described in paragraph 20 until all such litigation, claims, investigations, or audit findings have been completely resolved and final judgment entered or final action taken. |
22. | If Treasury believes that an instance of noncompliance by the Recipient or an Affiliate with (a) this Agreement, (b) sections 4114 or 4116 of the CARES Act, or (c) the Internal Revenue Code of 1986 as it applies to the receipt of Payroll Support has occurred, Treasury may notify |
23. | If Treasury makes a final determination under paragraph 22 that an instance of noncompliance has occurred, Treasury may, in its sole discretion, withhold any Additional Payroll Support Payments; require the repayment of the amount of any previously disbursed Payroll Support, with appropriate interest; require additional reporting or monitoring; initiate suspension or debarment proceedings as authorized under 2 CFR Part 180; terminate this Agreement; or take any such other action as Treasury, in its sole discretion, deems appropriate. |
24. | Treasury may make a final determination regarding noncompliance without regard to paragraph 22 if Treasury determines, in its sole discretion, that such determination is necessary to protect a material interest of the Federal Government. In such event, Treasury shall notify the Recipient of the remedy that Treasury, in its sole discretion, shall impose, after which the Recipient may contest Treasury’s final determination or propose an alternative remedy in writing to Treasury. Following the receipt of such a submission by the Recipient, Treasury may, in its sole discretion, maintain or alter its final determination. |
25. | Any final determination of noncompliance and any final determination to take any remedial action described herein shall not be subject to further review. To the extent permitted by law, the Recipient waives any right to judicial review of any such determinations and further agrees not to assert in any court any claim arising from or relating to any such determination or remedial action. |
26. | Instead of, or in addition to, the remedies listed above, Treasury may refer any noncompliance or any allegations of fraud, waste, or abuse to the Treasury Inspector General. |
27. | Treasury, in its sole discretion, may grant any request by the Recipient for termination of this Agreement, which such request shall be in writing and shall include the reasons for such termination, the proposed effective date of the termination, and the amount of any unused Payroll Support funds the Recipient requests to return to Treasury. Treasury may, in its sole discretion, determine the extent to which the requirements under this Agreement may cease to apply following any such termination. |
28. | If Treasury determines that any remaining portion of the Payroll Support will not accomplish the purpose of this Agreement, Treasury may terminate this Agreement in its entirety to the extent permitted by law. |
29. | Any Payroll Support in excess of the amount which Treasury determines, at any time, the Recipient is authorized to receive or retain under the terms of this Agreement constitutes a debt to the Federal Government. |
30. | Any debts determined to be owed by the Recipient to the Federal Government shall be paid promptly by the Recipient. A debt is delinquent if it has not been paid by the date specified in Treasury’s initial written demand for payment, unless other satisfactory arrangements have been made. Interest, penalties, and administrative charges shall be charged on delinquent debts in accordance with 31 U.S.C. § 3717, 31 CFR 901.9, and paragraphs 31 and 32. Treasury will refer any debt that is more than 180 days delinquent to Treasury’s Bureau of the Fiscal Service for debt collection services. |
31. | Penalties on any debts shall accrue at a rate of not more than 6 percent per year or such other higher rate as authorized by law. |
32. | Administrative charges relating to the costs of processing and handling a delinquent debt shall be determined by Treasury. |
33. | The Recipient shall not use funds from other federally sponsored programs to pay a debt to the government arising under this Agreement. |
34. | In addition to other applicable whistleblower protections, in accordance with 41 U.S.C. § 4712, the Recipient shall not discharge, demote, or otherwise discriminate against an Employee as a reprisal for disclosing information to a Person listed below that the Employee reasonably believes is evidence of gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, an abuse of authority relating to a Federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract (including the competition for or negotiation of a contract) or grant: |
a. | A Member of Congress or a representative of a committee of Congress; |
b. | An Inspector General; |
c. | The Government Accountability Office; |
d. | A Treasury employee responsible for contract or grant oversight or management; |
e. | An authorized official of the Department of Justice or other law enforcement agency; |
f. | A court or grand jury; or |
g. | A management official or other Employee of the Recipient who has the responsibility to investigate, discover, or address misconduct. |
35. | The Recipient shall comply with the provisions of 31 U.S.C. § 1352, as amended, and with the regulations at 31 CFR Part 21. |
36. | The Recipient shall comply with, and hereby assures that it will comply with, all applicable Federal statutes and regulations relating to nondiscrimination including: |
a. | Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq.), including Treasury’s implementing regulations at 31 CFR Part 22; |
b. | Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794); |
c. | The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101–6107), including Treasury’s implementing regulations at 31 CFR Part 23 and the general age discrimination regulations at 45 CFR Part 90; and |
d. | The Air Carrier Access Act of 1986 (49 U.S.C. § 41705). |
37. | Within seven days after the date of this Agreement, the Recipient shall register in SAM.gov, and thereafter maintain the currency of the information in SAM.gov until at least March 24, 2022. The Recipient shall review and update such information at least annually after the initial registration, and more frequently if required by changes in the Recipient’s information. The Recipient agrees that this Agreement and information related thereto, including the Maximum Awardable Amount and any executive total compensation reported pursuant to paragraph 38, may be made available to the public through a U.S. Government website, including SAM.gov. |
38. | For purposes of paragraph 37, the Recipient shall report total compensation as defined in paragraph e.5 of the award term in 2 CFR part 170, App. A for each of the Recipient’s five most highly compensated executives for the preceding completed fiscal year, if: |
a. | the total Payroll Support is $25,000 or more; |
b. | in the preceding fiscal year, the Recipient received: |
i. | 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance, as defined at 2 CFR 170.320 (and subawards); and |
ii. | $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance, as defined at 2 CFR 170.320 (and subawards); and |
c. | the public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. To determine if the public has access to the compensation information, the Recipient shall refer to U.S. Securities and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm. |
39. | The Recipient shall report executive total compensation described in paragraph 38: |
a. | as part of its registration profile at https://www.sam.gov; and |
b. | within five business days after the end of each month following the month in which this Agreement becomes effective, and annually thereafter. |
40. | The Recipient agrees that, from time to time, it will, at its own expense, promptly upon reasonable request by Treasury, execute and deliver, or cause to be executed and delivered, or use its commercially reasonable efforts to procure, all instruments, documents and information, all in form and substance reasonably satisfactory to Treasury, to enable Treasury to ensure compliance with, or effect the purposes of, this Agreement, which may include, among other documents or information, (a) certain audited financial statements of the Recipient, (b) documentation regarding the Recipient’s revenues derived from its business as a passenger or cargo air carrier or regarding the passenger air carriers for which the Recipient provides services as a contractor (as the case may be), and (c) the Recipient’s most recent quarterly Federal tax returns. The Recipient agrees to provide Treasury with such documents or information promptly. |
41. | If the total value of the Recipient’s currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period before termination of this Agreement, then the Recipient shall make such reports as required by 2 CFR part 200, Appendix XII. |
42. | The Recipient acknowledges that neither Treasury, nor any other actor, department, or agency of the Federal Government, shall condition the provision of Payroll Support on the Recipient’s implementation of measures to enter into negotiations with the certified bargaining representative of a craft or class of employees of the Recipient under the Railway Labor Act (45 U.S.C. 151 et seq.) or the National Labor Relations Act (29 U.S.C. 151 et seq.), regarding pay or other terms and conditions of employment. |
43. | Notwithstanding any other provision of this Agreement, the Recipient has no right to, and shall not, transfer, pledge, mortgage, encumber, or otherwise assign this Agreement or any |
44. | The Signatory Entity will cause its Affiliates to comply with all of their obligations under or relating to this Agreement. |
45. | Unless otherwise provided in guidance issued by Treasury or the Internal Revenue Service, the form of any Taxpayer Protection Instrument held by Treasury and any subsequent holder will be treated as such form for purposes of the Internal Revenue Code of 1986 (for example, a Taxpayer Protection Instrument in the form of a note will be treated as indebtedness for purposes of the Internal Revenue Code of 1986). |
46. | This Agreement may not be amended or modified except pursuant to an agreement in writing entered into by the Recipient and Treasury, except that Treasury may unilaterally amend this Agreement if required in order to comply with applicable Federal law or regulation. |
47. | Subject to applicable law, Treasury may, in its sole discretion, waive any term or condition under this Agreement imposing a requirement on the Recipient or any Affiliate. |
48. | This Agreement shall bind and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns. |
49. | The Recipient represents and warrants to Treasury that this Agreement, and the issuance and delivery to Treasury of the Taxpayer Protection Instruments, if applicable, have been duly authorized by all requisite corporate and, if required, stockholder action, and will not result in the violation by the Recipient of any provision of law, statute, or regulation, or of the articles of incorporation or other constitutive documents or bylaws of the Recipient, or breach or constitute an event of default under any material contract to which the Recipient is a party. |
50. | The Recipient represents and warrants to Treasury that this Agreement has been duly executed and delivered by the Recipient and constitutes a legal, valid, and binding obligation of the Recipient enforceable against the Recipient in accordance with its terms. |
51. | This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute a single contract. |
52. | The words “execution,” “signed,” “signature,” and words of like import in any assignment shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Notwithstanding anything herein to the contrary, delivery of an executed |
53. | The captions and paragraph headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. |
54. | This Agreement is governed by and shall be construed in accordance with Federal law. Insofar as there may be no applicable Federal law, this Agreement shall be construed in accordance with the laws of the State of New York, without regard to any rule of conflicts of law (other than section 5-1401 of the New York General Obligations Law) that would result in the application of the substantive law of any jurisdiction other than the State of New York. |
55. | Nothing in this Agreement shall require any unlawful action or inaction by either party. |
56. | The requirement pertaining to trafficking in persons at 2 CFR 175.15(b) is incorporated herein and made applicable to the Recipient. |
57. | This Agreement, together with the attachments hereto, including the Payroll Support Certification and any attached terms regarding Taxpayer Protection Instruments, constitute the entire agreement of the parties relating to the subject matter hereof and supersede any previous agreements and understandings, oral or written, relating to the subject matter hereof. There may exist other agreements between the parties as to other matters, which are not affected by this Agreement and are not included within this integration clause. |
58. | No failure by either party to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy hereunder, and no acceptance of full or partial Payroll Support (if applicable) or other performance by either party during the continuance of any such breach, shall constitute a waiver of any such breach of such provision. |
/s/ Robin Hayes _____________________________________ | /s/ Steve Priest _____________________________________ |
Corporate Officer of Signatory Entity Name: Robin Hayes | Second Authorized Representative Name: Steve Priest |
Title: Chief Executive Officer | Title: Chief Financial Officer |
Date: April 23, 2020 | Date: April 23, 2020 |
Date | Current Outstanding Principal Amount | Increase or Decrease in Outstanding Principal Amount | Resulting Outstanding Principal Amount | Notation Made By |
1. | I have reviewed this Quarterly Report on Form 10-Q of JetBlue Airways Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 8, 2020 | By: | /s/ ROBIN HAYES | |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of JetBlue Airways Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 8, 2020 | By: | /s/ STEVE PRIEST | ||
Chief Financial Officer |
Date: | May 8, 2020 | By: | /s/ ROBIN HAYES | ||
Chief Executive Officer | |||||
Date: | May 8, 2020 | By: | /s/ STEVE PRIEST | ||
Chief Financial Officer | |||||
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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 2 | $ 1 |
Inventory Valuation Reserves | $ 23 | $ 22 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25 | 25 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 900 | 900 |
Common stock, shares issued | 428 | 427 |
Common stock, shares, outstanding | 270 | 282 |
Treasury stock, shares | 158 | 145 |
Label | Element | Value |
---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 1,018,000,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 533,000,000 |
Earnings Per Share (Notes) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | Earnings Per Share Basic earnings per share is calculated by dividing net (loss) income by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the Crewmember Stock Purchase Plan, and any other potentially dilutive instruments using the treasury stock method. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 2.0 million for the three months ended March 31, 2020. There were no anti-dilutive common stock equivalents during the three months ended March 31, 2019 . The following table shows how we computed basic and diluted earnings per common share for the three months ended March 31, 2020 and 2019 (dollars and share data in millions):
On February 24, 2020, JetBlue entered into an accelerated share repurchase agreement, or ASR, paying $160 million for an initial delivery of 6.6 million shares. The term of the ASR concluded on March 16, 2020 with delivery of 4.9 million additional shares to JetBlue on March 18, 2020. A total of 11.5 million shares, at an average price of $13.91 per share, were repurchased under the agreement. On November 21, 2019, JetBlue entered into an ASR paying $160 million for an initial delivery of 6.9 million shares. The term of the ASR concluded on February 21, 2020 with delivery of 1.5 million additional shares to JetBlue on February 25, 2020. A total of 8.4 million shares, at an average price of $19.03 per share, were repurchased under the agreement. On March 11, 2019, JetBlue entered into an ASR, paying $125 million for an initial delivery of 6.1 million shares. The term of the ASR concluded on May 21, 2019 with the delivery of 1.3 million additional shares to JetBlue on May 22, 2019. A total of 7.4 million shares, at an average price of $16.93 per share, were repurchased under the agreement.
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Fair Value (Notes) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value Under the Fair Value Measurements and Disclosures topic of the Codification, disclosures are required about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows: Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - quoted prices in active markets for similar assets and liabilities, and other inputs that are observable directly or indirectly for the asset or liability; or Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of March 31, 2020 and December 31, 2019 (in millions):
Refer to Note 4 to our condensed consolidated financial statements for fair value information related to our outstanding debt obligations as of March 31, 2020 and December 31, 2019. Cash equivalents Our cash equivalents include money market securities, commercial paper, and time deposits which are readily convertible into cash, have maturities of 90 days or less when purchased, and are considered to be highly liquid and easily tradable. The money market securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. The fair values of remaining instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy. Available-for-sale investment securities Our available-for-sale investment securities include investments such as time deposits, commercial paper, and convertible debt securities. The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy. We did not record any material gains or losses on these securities during the three months ended March 31, 2020 and 2019. Aircraft Fuel Derivatives Our aircraft fuel derivatives include call spread options which are not traded on public exchanges. Their fair values are determined using a market approach based on inputs that are readily available from public markets for commodities and energy trading activities; therefore, they are classified as Level 2 inputs. The data inputs are combined into quantitative models and processes to generate forward curves and volatilities related to the specific terms of the underlying hedge contracts.
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Summary of Significant Accounting Policies Equity Method Investments (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Equity Method Investments and Joint Ventures [Abstract] | ||
Equity Method Investments | $ 36 | $ 38 |
Financial Derivative Instruments and Risk Management (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fuel [Member] | Call Option [Member] | ||
Derivative [Line Items] | ||
Percentage Fuel Hedged - Fourth Quarter Current Year | 29.00% | |
Percentage Fuel Hedged - First Quarter Second Year | 25.00% | |
Percentage Fuel Hedged - Second Quarter Second Year | 25.00% | |
Fair Value, Recurring [Member] | ||
Derivative [Line Items] | ||
Derivative Asset | $ 1 | $ 8 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Derivative [Line Items] | ||
Derivative Asset | $ 1 | $ 8 |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Available-for-sale securities | ||
Debt Securities, Available-for-sale | $ 8 | $ 6 |
Available-for-sale investment securities | 163 | 351 |
Debt Securities, Held-to-maturity | 21 | 21 |
Marketable securities | 184 | 372 |
Bank Time Deposits [Member] | ||
Available-for-sale securities | ||
Available-for-sale investment securities | 115 | 325 |
Corporate Bond Securities [Member] | ||
Available-for-sale securities | ||
Debt Securities, Held-to-maturity | 21 | 21 |
Commercial Paper [Member] | ||
Available-for-sale securities | ||
Available-for-sale investment securities | $ 40 | $ 20 |
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of marketable securities | The carrying values of investment securities consisted of the following at March 31, 2020 and December 31, 2019 (in millions):
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Financial Derivative Instruments and Risk Management (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage fuel covered under derivative contracts | The following table illustrates the approximate hedge percentages of our projected fuel usage by quarter as of March 31, 2020, related to our outstanding fuel hedging contracts that were designated as cash flow hedges for accounting purposes.
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Derivative instrument in statement of financial position and financial performance | The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements (dollar amounts in millions):
(1) Gross asset of each contract prior to consideration of offsetting positions with each counterparty and prior to the impact of collateral paid.
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Special Items (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Property, Plant and Equipment [Line Items] | ||
Special Items - Fleet Impairment | $ 202 | $ 0 |
Special Items - E190 Fleet Transition | 0 | 9 |
Special Items - Union Contract Costs | 0 | 3 |
Special Items | 202 | 12 |
Impairment of Long-Lived Assets Held-for-use | $ 202 | $ 0 |
Financial Derivative Instruments and Risk Management - Hedging Effectiveness (Details 3) - Fuel Derivatives [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
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Derivative Instruments, Gain (Loss) [Line Items] | ||
Percentage of actual consumption hedged | 22.00% | 7.00% |
Aircraft Fuel Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Hedge losses recognized | $ 2 | $ 2 |
Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring | 2 | 0 |
Comprehensive Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 11 | $ 0 |
Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table provides the revenues recognized by revenue source for the three months ended March 31, 2020 and 2019 (in millions):
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Contract with Customer, Asset and Liability [Table Text Block] | Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):
The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the three months ended March 31, 2020 and 2019 (in millions):
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Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value, by balance sheet grouping | The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of March 31, 2020 and December 31, 2019 (in millions):
Refer to Note 4 to our condensed consolidated financial statements for fair value information related to our outstanding debt obligations as of March 31, 2020 and December 31, 2019.
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Summary of Significant Accounting Policies Held-to-Maturity Securities (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Investments, Debt and Equity Securities [Abstract] | |||
Held-to-maturity securities | $ 21 | $ 21 | |
Debt Securities, Held-to-maturity, Sold, Realized Gain (Loss) | $ 0 | $ 0 |
Financial Derivative Instruments and Risk Management (Details 2) bbl in Thousands, $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2020
USD ($)
bbl
|
Dec. 31, 2019
USD ($)
bbl
|
|
Derivatives, Fair Value [Line Items] | ||
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months | $ 6 | $ (2) |
Fuel Derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Longest remaining term, cash flow hedge (months) | 9 months | 6 months |
Barrels Of Fuel Covered Under Derivative Contracts | bbl | 3,698 | 2,112 |
Prepaid Expenses and Other Current Assets [Member] | Fuel Derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | $ 1 | $ 8 |
Crewmember Retirement Plan (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Crewmember Retirement Plan We sponsor a retirement savings 401(k) defined contribution plan, or the Plan, covering all of our crewmembers where we match 100% of our crewmember contributions up to 5% of their eligible wages. The contributions vest over three years and are measured from a crewmember's hire date. Crewmembers are immediately vested in their voluntary contributions. Another component of the Plan is a Company discretionary contribution of 5% of eligible non-management crewmember compensation, which we refer to as Retirement Plus. Retirement Plus contributions vest over three years and are measured from a crewmember's hire date. Certain Federal Aviation Administration, or FAA, licensed crewmembers receive an additional contribution of 3% of eligible compensation, which we refer to as Retirement Advantage. Effective August 1, 2018, pilots receive a non-elective Company contribution of 15% of eligible pilot compensation per the terms of the finalized collective bargaining agreement between JetBlue and the Air Line Pilots Association, or ALPA, in lieu of the above 401(k) Company matching contribution, Retirement Plus, and Retirement Advantage contributions. Refer to Note 10 to our condensed consolidated financial statements for additional information. The Company's non-elective contribution of 15% of eligible pilot compensation vests after three years of service. Our non-management crewmembers are eligible to receive profit sharing, calculated as 10% of adjusted pre-tax income before profit sharing and special items up to a pre-tax margin of 18% with the result reduced by Retirement Plus contributions and the equivalent of Retirement Plus contributions for pilots. If JetBlue's resulting pre-tax margin exceeds 18%, non-management crewmembers will receive 20% profit sharing on amounts above an 18% pre-tax margin. Total 401(k) company match, Retirement Plus, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the three months ended March 31, 2020 and 2019 was $52 million and $49 million, respectively.
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Accumulated Other Comprehensive Income (Loss) (Notes) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) includes changes in fair value of our aircraft fuel derivatives which qualify for hedge accounting. A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the three months ended March 31, 2020 and 2019 is as follows (in millions):
(1) Reclassified to aircraft fuel expense. (2) In March 2020, we made several capacity reductions in response to the COVID-19 pandemic. These capacity reductions led to the discontinuance of hedge accounting on a number of our aircraft fuel derivatives as the forecasted consumption of aircraft fuel was no longer probable of occurring. Losses of $2 million that were previously deferred were reclassified to interest income and other during the three months ended March 31, 2020.
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Summary of Significant Accounting Policies Other Investments (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Investments, All Other Investments [Abstract] | ||
Cost Method Investments - JetBlue Tech Ventures | $ 40 | $ 41 |
Cost Method Investments - TWA Flight Center Hotel | $ 14 | $ 13 |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table shows how we computed basic and diluted earnings per common share for the three months ended March 31, 2020 and 2019 (dollars and share data in millions):
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Special Items (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unusual or Infrequent Items, or Both [Table Text Block] | The following is a listing of special items presented on our consolidated statements of operations for the three months ended March 31, 2020 and 2019 (in millions):
(1) Under the Property, Plant, and Equipment topic of the Codification, we are required to assess long-lived assets for impairment when events and circumstances indicate that the assets may be impaired. An impairment of long-lived assets exists when the sum of the estimated undiscounted future cash flows expected to be generated directly by the assets are less than the book value of the assets. Our long-lived assets include both owned and leased properties which are classified as property and equipment, and operating lease assets on our consolidated balance sheets, respectively. As discussed in Note 2 to our condensed consolidated financial statements, our operations were adversely impacted by the unprecedented decline in demand for travel caused by the COVID-19 pandemic. To determine if impairment exists in our fleet, we grouped our aircraft by fleet-type and estimated their future cash flows based on projections of capacity, aircraft age, maintenance requirements, and other relevant conditions. Based on the assessment, we determined that the future cash flows from the operation of our Embraer E190 fleet were lower than the carrying value. For those aircraft, including the ones that are under operating lease, and related spare parts in our Embraer E190 fleet, we recorded an impairment loss of $202 million representing the difference between the book value of these assets and their fair value. We estimated the fair value of our Embraer E190 fleet using third party valuations and considered specific circumstance such as aircraft age, maintenance requirements and condition, and therefore classified as Level 3 in the fair value hierarchy. We evaluated the remaining fleet and determined the future cash flows of our Airbus A320 and Airbus A321 fleet exceeded their carrying values as of March 31, 2020. As the extent of the ongoing impact from the COVID-19 pandemic remains uncertain, we will update our assessment as new information becomes available. (2) In July 2018, we announced our decision to exit the Embraer E190 fleet and order 60 Airbus A220-300 aircraft, formerly known as the Bombardier CS300, for expected deliveries beginning in 2020 with the option for 60 additional aircraft. For the three months ended March 31, 2019, fleet transition costs include certain contract termination costs associated with the transition. (3) In April 2014, ALPA was certified by NMB as the representative body for JetBlue pilots after winning a representation election. We reached a final agreement for our first collective bargaining agreement which was ratified by the pilots in July 2018. The agreement is a four-year renewable contract, which became effective August 1, 2018 and included compensation, benefits, work rules, and other policies. For the three months ended March 31, 2019, union contract costs primarily include various one-time costs incurred to implement the provisions of the collective bargaining agreement into our systems. |
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