Company Quick10K Filing
Jetblue Airways
Price18.91 EPS2
Shares298 P/E10
MCap5,642 P/FCF4
Net Debt1,039 EBIT847
TEV6,681 TEV/EBIT8
TTM 2019-12-31, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-18
10-Q 2019-09-30 Filed 2019-10-28
10-Q 2019-06-30 Filed 2019-07-26
10-Q 2019-03-31 Filed 2019-04-26
10-K 2018-12-31 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-10-26
10-Q 2018-06-30 Filed 2018-07-26
10-Q 2018-03-31 Filed 2018-04-27
10-K 2017-12-31 Filed 2018-02-16
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-07-28
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-02-17
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-02-17
10-Q 2015-09-30 Filed 2015-10-30
10-Q 2015-06-30 Filed 2015-07-31
10-Q 2015-03-31 Filed 2015-04-30
10-K 2014-12-31 Filed 2015-02-12
10-Q 2014-09-30 Filed 2014-10-31
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-02-19
10-Q 2013-09-30 Filed 2013-10-31
10-Q 2013-06-30 Filed 2013-08-07
10-Q 2013-03-31 Filed 2013-05-09
10-K 2012-12-31 Filed 2013-02-21
10-Q 2012-09-30 Filed 2012-11-01
10-Q 2012-06-30 Filed 2012-08-01
10-Q 2012-03-31 Filed 2012-05-02
10-K 2011-12-31 Filed 2012-02-28
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-06-30 Filed 2011-08-03
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-10-26
10-Q 2010-06-30 Filed 2010-07-27
10-Q 2010-03-31 Filed 2010-05-03
10-K 2009-12-31 Filed 2010-02-05
8-K 2020-07-28 Earnings, Regulation FD, Exhibits
8-K 2020-07-16 Enter Agreement, Regulation FD, Exhibits
8-K 2020-06-17
8-K 2020-05-14
8-K 2020-05-07
8-K 2020-04-22
8-K 2020-03-13
8-K 2020-03-09
8-K 2020-03-05
8-K 2020-02-24
8-K 2020-02-13
8-K 2020-01-23
8-K 2020-01-13
8-K 2019-12-11
8-K 2019-11-21
8-K 2019-11-18
8-K 2019-11-12
8-K 2019-11-12
8-K 2019-10-29
8-K 2019-10-22
8-K 2019-10-10
8-K 2019-09-19
8-K 2019-09-12
8-K 2019-09-06
8-K 2019-09-04
8-K 2019-08-12
8-K 2019-08-01
8-K 2019-07-23
8-K 2019-07-16
8-K 2019-07-15
8-K 2019-07-11
8-K 2019-06-13
8-K 2019-06-12
8-K 2019-06-04
8-K 2019-05-16
8-K 2019-05-10
8-K 2019-04-23
8-K 2019-04-10
8-K 2019-03-12
8-K 2019-03-11
8-K 2019-03-05
8-K 2019-02-12
8-K 2019-01-24
8-K 2019-01-11
8-K 2018-12-12
8-K 2018-11-13
8-K 2018-10-23
8-K 2018-10-10
8-K 2018-10-02
8-K 2018-09-13
8-K 2018-09-05
8-K 2018-08-14
8-K 2018-08-10
8-K 2018-08-01
8-K 2018-07-31
8-K 2018-07-24
8-K 2018-07-12
8-K 2018-07-11
8-K 2018-07-07
8-K 2018-06-12
8-K 2018-05-24
8-K 2018-05-17
8-K 2018-05-10
8-K 2018-04-24
8-K 2018-04-13
8-K 2018-04-11
8-K 2018-03-30
8-K 2018-03-12
8-K 2018-03-01
8-K 2018-01-25
8-K 2018-01-11
8-K 2018-01-08
8-K 2015-09-11
8-K 2015-07-28
8-K 2015-07-28
8-K 2015-06-16
8-K 2015-06-10
8-K 2015-05-21
8-K 2015-05-14
8-K 2015-04-28
8-K 2015-04-28
8-K 2015-04-10
8-K 2015-03-24
8-K 2015-03-11
8-K 2015-02-18
8-K 2015-01-29
8-K 2015-01-29
8-K 2015-01-13

JBLU 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1 - Summary of Significant Accounting Policies
Part I. Financial Information
Item 1. Financial Statements
Note 2 - The Covid - 19 Pandemic
Part I. Financial Information
Item 1. Financial Statements
Note 3 - Revenue Recognition
Part I. Financial Information
Item 1. Financial Statements
Note 4 - Long - Term Debt, Short - Term Borrowings and Finance Lease Obligations
Part I. Financial Information
Item 1. Financial Statements
Note 5 - (Loss) Earnings per Share
Part I. Financial Information
Item 1. Financial Statements
Note 6 - Crewmember Retirement Plan
Note 7 - Commitments and Contingencies
Part I. Financial Information
Item 1. Financial Statements
Note 8 - Financial Derivative Instruments and Risk Management
Part I. Financial Information
Item 1. Financial Statements
Note 9 - Fair Value
Part I. Financial Information
Item 1. Financial Statements
Note 10 - Accumulated Other Comprehensive Income (Loss)
Part I. Financial Information
Item 1. Financial Statements
Note 11 - Special Items
Part I. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Part II. Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-10.4 q22020exhibit104-amend.htm
EX-31.1 q22020exhibit311.htm
EX-31.2 q22020exhibit312.htm
EX-32 q22020exhibit32.htm

Jetblue Airways Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
151296302011201420172021
Assets, Equity
2.21.71.20.80.3-0.22011201420172021
Rev, G Profit, Net Income
0.60.40.1-0.1-0.4-0.62011201420172021
Ops, Inv, Fin

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to__________
Commission File Number: 000-49728
jetbluelogoa14.jpg
JETBLUE AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
87-0617894
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

 
 

27-01 Queens Plaza North
Long Island City
New York
11101
(Address of principal executive offices) 
 (Zip Code)
(718) 286-7900
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 par value
JBLU
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
Smaller reporting company
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No
As of June 30, 2020, there were 272,425,869 shares outstanding of the registrant’s common stock, par value $0.01.
 



JETBLUE AIRWAYS CORPORATION
FORM 10-Q
INDEX
 
Page
PART I. FINANCIAL INFORMATION
 
 
 
PART II. OTHER INFORMATION
 



2

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)



 
June 30, 2020
 
December 31, 2019
ASSETS
 
 
 
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
2,561

 
$
959

Investment securities
340

 
369

Receivables, less allowance (2020-$2; 2019-$1)
85

 
231

Inventories, less allowance (2020-$25; 2019-$22)
71

 
81

Prepaid expenses and other
720

 
146

Total current assets
3,777

 
1,786

PROPERTY AND EQUIPMENT
 
 
 
Flight equipment
10,573

 
10,332

Predelivery deposits for flight equipment
460

 
433

Total flight equipment and predelivery deposits, gross
11,033

 
10,765

Less accumulated depreciation
2,955

 
2,768

Total flight equipment and predelivery deposits, net
8,078

 
7,997

Other property and equipment
1,189

 
1,145

Less accumulated depreciation
565

 
528

Total other property and equipment, net
624

 
617

Total property and equipment, net
8,702

 
8,614

OPERATING LEASE ASSETS
737

 
912

OTHER ASSETS
 
 
 
Investment securities
3

 
3

Restricted cash
51

 
59

Other
757

 
544

Total other assets
811

 
606

TOTAL ASSETS
$
14,027

 
$
11,918

 

See accompanying notes to condensed consolidated financial statements.
3

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)

 
June 30, 2020
 
December 31, 2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES
 
 
 
Accounts payable
$
347

 
$
401

Air traffic liability
1,271

 
1,119

Accrued salaries, wages and benefits
356

 
376

Other accrued liabilities
582

 
295

Current operating lease liabilities
83

 
128

Short-term borrowings
984

 

Current maturities of long-term debt and finance lease obligations
362

 
344

Total current liabilities
3,985

 
2,663

LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
3,430

 
1,990

LONG-TERM OPERATING LEASE LIABILITIES
697

 
690

DEFERRED TAXES AND OTHER LIABILITIES
 
 
 
Deferred income taxes
1,265

 
1,251

Air traffic liability - loyalty non-current
492

 
481

Other
64

 
44

Total deferred taxes and other liabilities
1,821

 
1,776

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, 430 and 427 shares issued and 272 and 282 shares outstanding at June 30, 2020 and December 31, 2019, respectively
4

 
4

Treasury stock, at cost; 158 and 145 shares at June 30, 2020 and December 31, 2019, respectively
(1,981
)
 
(1,782
)
Additional paid-in capital
2,340

 
2,253

Retained earnings
3,734

 
4,322

Accumulated other comprehensive (loss) income
(3
)
 
2

Total stockholders’ equity
4,094

 
4,799

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
14,027

 
$
11,918




See accompanying notes to condensed consolidated financial statements.
4

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020

2019
 
2020
 
2019
OPERATING REVENUES
 
 
 
 
 
 
 
Passenger
$
170

 
$
2,031

 
$
1,682

 
$
3,833

Other
45

 
74

 
121

 
144

Total operating revenues
215

 
2,105

 
1,803

 
3,977

OPERATING EXPENSES
 
 
 
 
 
 
 
Aircraft fuel and related taxes
29

 
484

 
394

 
921

Salaries, wages and benefits
477

 
576

 
1,078

 
1,151

Landing fees and other rents
62

 
121

 
174

 
237

Depreciation and amortization
140

 
127

 
279

 
251

Aircraft rent
16

 
25

 
37

 
50

Sales and marketing
8

 
75

 
60

 
141

Maintenance, materials and repairs
73

 
168

 
233

 
324

Other operating expenses
124

 
277

 
394

 
563

Special items
(304
)
 
2

 
(102
)
 
14

Total operating expenses
625

 
1,855

 
2,547

 
3,652

OPERATING (LOSS) INCOME
(410
)
 
250

 
(744
)
 
325

OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
Interest expense
(40
)
 
(19
)
 
(65
)
 
(38
)
Capitalized interest
3

 
3

 
7

 
6

Interest income and other
(3
)
 
2

 
(2
)
 
1

Total other income (expense)
(40
)
 
(14
)
 
(60
)
 
(31
)
(LOSS) INCOME BEFORE INCOME TAXES
(450
)
 
236

 
(804
)
 
294

Income tax (benefit) expense
(130
)
 
57

 
(216
)
 
73

NET (LOSS) INCOME
$
(320
)
 
$
179

 
$
(588
)
 
$
221

 
 
 
 
 
 
 
 
(LOSS) EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic
$
(1.18
)
 
$
0.60

 
$
(2.14
)
 
$
0.73

Diluted
$
(1.18
)
 
$
0.59

 
$
(2.14
)
 
$
0.73




See accompanying notes to condensed consolidated financial statements.
5

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in millions)

 
Three Months Ended June 30,
 
2020

2019
NET (LOSS) INCOME
$
(320
)
 
$
179

Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $(1) and $(1) in 2020 and 2019, respectively
3

 
2

Total other comprehensive income
3

 
2

COMPREHENSIVE (LOSS) INCOME
$
(317
)
 
$
181

 
 
 
 
 
Six Months Ended June 30,
 
2020
 
2019
NET (LOSS) INCOME
$
(588
)
 
$
221

Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $3 and $(1) in 2020 and 2019, respectively
(5
)
 
4

Total other comprehensive (loss) income
(5
)
 
4

COMPREHENSIVE (LOSS) INCOME
$
(593
)
 
$
225




See accompanying notes to condensed consolidated financial statements.
6

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)

 
Six Months Ended June 30,
 
2020

2019
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net (loss) income
$
(588
)
 
$
221

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Deferred income taxes
(198
)
 
46

Impairment of long-lived assets
202

 

Depreciation
255

 
229

Amortization
24

 
22

Stock-based compensation
15

 
17

Changes in certain operating assets and liabilities
147

 
430

Deferred CARES Act grant
363

 

Other, net
3

 
3

Net cash provided by operating activities
223

 
968

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
Capital expenditures
(377
)
 
(328
)
Predelivery deposits for flight equipment
(57
)
 
(142
)
Purchase of held-to-maturity investments

 
(289
)
Proceeds from the maturities of held-to-maturity investments

 
250

Purchase of available-for-sale securities
(861
)
 
(609
)
Proceeds from the sale of available-for-sale securities
890

 
545

Other, net

 
5

Net cash (used in) investing activities
(405
)
 
(568
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of long-term debt
1,517

 

Proceeds from short-term borrowings
981

 

Proceeds from sale-leaseback transactions
118

 

Proceeds from issuance of common stock
22

 
27

Proceeds from issuance of stock warrants
18

 

Repayment of long-term debt and finance lease obligations
(177
)
 
(182
)
Repayment of short-term borrowings
(3
)
 

Acquisition of treasury stock
(167
)
 
(256
)
Net cash provided by (used in) financing activities
2,309

 
(411
)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
2,127

 
(11
)
Cash, cash equivalents and restricted cash at beginning of period
1,018

 
533

Cash, cash equivalents and restricted cash at end of period(1)
$
3,145

 
$
522

 
 
 
 
SUPPLEMENTAL CASH FLOW INFORMATION
 
 
 
Cash payments for interest (net of amount capitalized)
$
27

 
$
33

Cash payments for income taxes (net of refunds)

 
(88
)
NON-CASH TRANSACTONS
 
 
 
Operating lease assets obtained in exchange for operating lease liabilities
$
2

 
$

 
 
 
 
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
 
June 30, 2020
 
June 30, 2019
Cash and cash equivalents
$
2,561

 
$
461

Restricted cash
584

 
61

Total cash, cash equivalents and restricted cash
$
3,145

 
$
522


See accompanying notes to condensed consolidated financial statements.
7

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited, in millions)


 
 
Common
Shares
 
Common
Stock
 
Treasury
Shares
 
Treasury
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Balance at March 31, 2020
 
428

 
$
4

 
158

 
$
(1,980
)
 
$
2,294

 
$
4,054

 
$
(6
)
 
$
4,366

Net (loss)
 

 

 

 

 

 
(320
)
 

 
(320
)
Other comprehensive income
 

 

 

 

 

 

 
3

 
3

Vesting of restricted stock units
 

 

 

 
(1
)
 

 

 

 
(1
)
Stock compensation expense
 

 

 

 

 
6

 

 

 
6

Stock issued under Crewmember stock purchase plan
 
2

 

 

 

 
22

 

 

 
22

Shares repurchased
 

 

 

 

 

 

 

 

CARES Act warrant issuance
 

 

 

 

 
18

 

 

 
18

Balance at June 30, 2020
 
430

 
$
4

 
158

 
$
(1,981
)
 
$
2,340

 
$
3,734

 
$
(3
)
 
$
4,094

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common
Shares
 
Common
Stock
 
Treasury
Shares
 
Treasury
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Balance at March 31, 2019
 
423

 
$
4

 
122

 
$
(1,377
)
 
$
2,186

 
$
3,795

 
$
(1
)
 
$
4,607

Net income
 

 

 

 

 

 
179

 

 
179

Other comprehensive income
 

 

 

 

 

 

 
2

 
2

Vesting of restricted stock units
 

 

 

 
(1
)
 

 

 

 
(1
)
Stock compensation expense
 

 

 

 

 
8

 

 

 
8

Stock issued under Crewmember stock purchase plan
 
2

 

 

 

 
27

 

 

 
27

Shares repurchased
 

 

 
7

 
(125
)
 

 

 

 
(125
)
Balance at June 30, 2019
 
425

 
$
4

 
129

 
$
(1,503
)
 
$
2,221

 
$
3,974

 
$
1

 
$
4,697

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
427

 
$
4

 
145

 
$
(1,782
)
 
$
2,253

 
$
4,322

 
$
2

 
$
4,799

Net (loss)
 

 

 

 

 

 
(588
)
 

 
(588
)
Other comprehensive (loss)
 

 

 

 

 

 

 
(5
)
 
(5
)
Vesting of restricted stock units
 
1

 

 

 
(7
)
 

 

 

 
(7
)
Stock compensation expense
 

 

 

 

 
15

 

 

 
15

Stock issued under Crewmember stock purchase plan
 
2

 

 

 

 
22

 

 

 
22

Shares repurchased
 

 

 
13

 
(192
)
 
32

 

 

 
(160
)
CARES Act warrant issuance
 

 

 

 

 
18

 

 

 
18

Balance at June 30, 2020
 
430

 
$
4

 
158

 
$
(1,981
)
 
$
2,340

 
$
3,734

 
$
(3
)
 
$
4,094

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
422

 
$
4

 
116

 
$
(1,272
)
 
$
2,203

 
$
3,753

 
$
(3
)
 
$
4,685

Net income
 

 

 

 

 

 
221

 

 
221

Other comprehensive income
 

 

 

 

 

 

 
4

 
4

Vesting of restricted stock units
 
1

 

 

 
(6
)
 

 

 

 
(6
)
Stock compensation expense
 

 

 

 

 
17

 

 

 
17

Stock issued under Crewmember stock purchase plan
 
2

 

 

 

 
26

 

 

 
26

Shares repurchased
 

 

 
13

 
(225
)
 
(25
)
 

 

 
(250
)
Balance at June 30, 2019
 
425

 
$
4

 
129

 
$
(1,503
)
 
$
2,221

 
$
3,974

 
$
1

 
$
4,697


See accompanying notes to condensed consolidated financial statements.
8

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



Note 1—Summary of Significant Accounting Policies
Basis of Presentation
JetBlue Airways Corporation, or JetBlue, provides air transportation services across the United States, the Caribbean and Latin America. Our condensed consolidated financial statements include the accounts of JetBlue and our subsidiaries which are collectively referred to as “we” or the “Company”. All majority-owned subsidiaries are consolidated on a line by line basis, with all intercompany transactions and balances being eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with our 2019 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, or our 2019 Form 10-K.
These condensed consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the U.S. Securities and Exchange Commission, or the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading.
Due to the impacts from the coronavirus ("COVID-19") pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, and other factors, our operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year.
Investment Securities
Investment securities consist of available-for-sale investment securities and held-to-maturity investment securities. When sold, we use a specific identification method to determine the cost of the securities.
Held-to-maturity investment securities. The contractual maturities of our held-to-maturity investments as of June 30, 2020 were not greater than 24 months. We did not record any significant gains or losses on these securities during the three and six months ended June 30, 2020 or 2019. The estimated fair value of these investments approximated their carrying value as of June 30, 2020 and December 31, 2019, respectively.
The aggregate carrying values of our short-term and long-term investment securities consisted of the following at June 30, 2020 and December 31, 2019 (in millions):
 
June 30, 2020
 
December 31, 2019
Available-for-sale securities
 
 
 
Time deposits
$
294

 
$
325

Commercial paper
20

 
20

Debt securities
8

 
6

Total available-for-sale securities
322

 
351

Held-to-maturity securities
 
 
 
Corporate bonds
21

 
21

Total held-to-maturity securities
21

 
21

Total investment securities
$
343

 
$
372


Other Investments
Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC, or JTV, has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Accounting Standards Update ("ASU") 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The carrying amount of these investments was $40 million and $41 million as of June 30, 2020 and December 31, 2019, respectively.



9

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


We have an approximate 10% ownership interest in the TWA Flight Center Hotel at John F. Kennedy International Airport and it is also accounted for under the measurement alternative. The carrying amount of this investment was $14 million and $13 million as of June 30, 2020 and December 31, 2019, respectively.
 
Equity Method Investments
Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the FASB Accounting Standards Codification ("Codification"). The carrying amount of our equity method investments was $35 million and $38 million as of June 30, 2020 and December 31, 2019, respectively, and is included within other assets on our consolidated balance sheets.

Recently Issued Accounting Standards  
New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update eliminates, clarifies, and modifies certain guidance related to the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are still evaluating the full impact of adopting the update on our consolidated financial statements.
Recently Adopted Accounting Standards
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The update requires the use of an "expected loss" model on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables, loans, and held-to-maturity debt securities, entities are required to estimate lifetime expected credit losses. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. We adopted the requirements of ASU 2016-13 as of January 1, 2020 using a modified retrospective transition approach. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The update eliminates, adds, and modifies certain disclosure requirements for fair value measurements. We adopted the requirements of ASU 2018-13 as of January 1, 2020. The adoption of ASU 2018-13 did not have a significant impact on our consolidated financial statement disclosures.


10

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



Note 2—The COVID-19 Pandemic
The unprecedented and rapid spread of the coronavirus ("COVID-19") pandemic and the related travel restrictions and physical distancing measures implemented throughout the world have significantly reduced demand for air travel. Beginning in March 2020, large public events were canceled, governmental authorities began imposing restrictions on non-essential activities, businesses suspended travel, and popular leisure destinations temporarily closed to visitors. Certain countries have imposed bans on international travelers for specified periods or indefinitely.
Demand for air travel began to weaken at the end of February 2020. The pace of decline accelerated throughout March into April 2020 and has remained depressed. This decline in demand has had a material adverse impact on our operating revenues and financial position. During the second quarter of 2020, our operating revenues were 90% lower than the same quarter of 2019. Although demand began to improve during the second quarter, it remains significantly lower than in prior years. The length and severity of the reduction in demand due to the pandemic remains uncertain; accordingly, we expect the adverse impact to continue in the third quarter of 2020 and beyond. While we are planning for a modest recovery in demand during the third quarter of 2020, the exact timing and pace of the recovery is uncertain given the significant impact of the pandemic on the overall U.S. and global economy. Some states have experienced a resurgence of COVID-19 cases after reopening and as a result, certain other states, such as New York, have implemented travel restrictions or advisories for travelers from such states. Our response to the pandemic and the measures we take to secure additional liquidity may be modified as we have more clarity in the timing of demand recovery.
In response to these developments, since March 2020 we have implemented the following measures to focus on the safety of our customers, our crewmembers, and our business.
Customers and Crewmembers
The safety of our customers and crewmembers continues to be our highest priority. As the COVID-19 pandemic has developed, we have taken a number of steps to promote physical distancing and to implement new procedures that reflect the recommendations of health experts, including some of the following:
Introduced "Safety from the Ground Up", an initiative with a multi-layer approach that encompasses our safety measures on our flights, at our airports, and in our offices;
Instituted temperature checks for our customer-facing and support-center crewmembers;
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, crewmember notification, and return to work clearance process for all crewmembers, wherever they may be located;
Required face covering for all crewmembers while boarding, in flight, and when physical distancing cannot be maintained;
Administered more frequent disinfecting of common surfaces and areas with high touchpoints;
Enhanced daily and overnight cleaning of our aircraft and all facilities, using electrostatic spraying of disinfectant in the cabins of aircraft parked overnight at selected focus cities;
Required customers to wear face coverings during check-in, boarding, and inflight;
Limited the number of seats available to be sold on most flights; we plan to continue blocking middle seats on large aircraft and aisle seats on smaller aircraft for those not traveling together through September 8, 2020;
Suspended group boarding and implemented a back-to-front boarding process to minimize passing in the aisle;
Eliminated layovers for crewmembers in New York City and worked with crew transportation companies to ensure physical distancing;
Implemented jump seat buffers on our flights to further promote physical distancing measures;
Provided enhanced flexibility to our customers by waiving change and cancel fees while also extending the expiration date of travel credits to 24 months; and


11

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Retained an infectious disease specialist to conduct regular calls which are open to all crewmembers.
Our Business
The COVID-19 pandemic drove a significant decline in demand beginning in the second half of March 2020. We have significantly reduced our capacity to a level that maintains essential services to align with demand. Our capacity for the second quarter of 2020 declined by 85% year-over-year. For the third quarter of 2020, we expect capacity to be down by at least 45%, as compared to the same period in prior year. As a result of the significant reduction in demand expectations and lower capacity, we have temporarily parked approximately 30% of our fleet.
The reduction in demand and our capacity has resulted in a significant reduction to our revenue. As a result, we have, and will continue to implement cost saving initiatives to reduce our overall level of cash spend. Some of the initiatives we have undertaken include:
Adjustments in flying capacity to align with the expected demand.
Temporary consolidations of our operations in certain cities that contain multiple airport locations.
Renegotiated service rates with our business partners and extended payment terms.
Instituted a company-wide hiring freeze.
Implemented salary reductions of 20% to 50% for our officers.
Offered crewmembers voluntary time off and separation programs, with most departures for the separation programs scheduled for August 2, 2020.
At June 30, 2020, we had cash, cash equivalents, short-term investments, and short-term restricted cash of approximately $3.4 billion. We believe the unprecedented impact of COVID-19 on the demand for air travel and the corresponding decline in revenue will continue to have an adverse impact on our operating cash flow. Given this situation, we have taken immediate actions to increase liquidity, strengthen our financial position, and conserve cash. Some of the actions we have taken through June 30, 2020 include:
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 of TrueBlue® points with our co-brand credit card partner.
Suspended non-critical capital expenditure projects.
Amended our purchase agreement with Airbus to defer several aircraft deliveries, 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.
Executed a $750 million term loan credit facility and immediately drew down on the facility for the full amount available.
Entered into $118 million of sale-leaseback transactions in June; which is discussed further below.
As a result of these activities, we had $3.1 billion in unrestricted and short-term restricted cash as of June 30, 2020. The $936 million of CARES Act funding represents short-term restricted cash since the funds must be utilized to pay the salaries and benefits costs of our crewmembers through September 30, 2020. The funds are reclassified from short-term restricted cash within prepaid expenses and other on our consolidated balance sheets to cash and cash equivalents when the funds are utilized. As of June 30, 2020, $533 million of CARES Act funding remained available.
In June 2020, we executed $118 million of sale-leaseback transactions. These transactions did not qualify as sales for accounting purposes. The assets associated with these transactions remain on our consolidated balance sheets within property and equipment and the related liabilities under the lease are classified within debt and finance leases obligations. These transactions are treated as cash from financing activities on our condensed consolidated statements of cash flows.


12

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


In July 2020, we executed $267 million of sale-leaseback transactions.
We continue to evaluate future financing opportunities to leverage our unencumbered assets in an effort to build additional levels of liquidity.
Valuation of Long-Lived Assets
For the three months ended March 31, 2020, we recorded an impairment loss of $202 million related to aircraft, including the ones that are under operating leases, and related spare parts in our Embraer E190 fleet.
We did not record any additional impairment losses on our long-lived assets for the three months ended June 30, 2020.
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 above, 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 the future cash flows of our fleet exceeded their carrying values as of June 30, 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.
Valuation of Indefinite-Lived Intangibles
Our intangible assets consist primarily of acquired take-off and landing slots, or Slots, at certain domestic airports. Slots are the rights to take-off or land at a specific airport during a specific time period of the day and are a means by which airport capacity and congestion can be managed. We account for Slots at High Density Airports, including Reagan National Airport in Washington, D.C., LaGuardia Airport, and JFK Airport, both in New York City, as indefinite life intangible assets which result in no amortization expense. We evaluate our intangible assets for impairment at least annually or when events and circumstances indicate they may be impaired. Indicators include operating or cash flow losses as well as various market factors to determine if events and circumstances could reasonably have affected the fair value. We performed an impairment assessment as of June 30, 2020 and determined our indefinite-lived intangible assets are not impaired.
The Coronavirus Aid, Relief, and Economic Security Act
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") which is intended to provide relief and support to the U.S. economy. Under the CARES Act, assistance is available to the aviation industry in the form of direct payroll support (the "Payroll Support Program") and secured loans (the "Loan Program").
On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") with the United States Department of the Treasury ("Treasury") governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with a payment of $936 million (the "Payroll Support Payment"), consisting of $685 million in grants and $251 million in an unsecured term loan. The loan has a 10-year term and bears interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable Secured Overnight Financing Rate ("SOFR") plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. In consideration for the Payroll Support Payment, we issued warrants to purchase approximately 2.6 million shares of our common stock to the Treasury at an exercise price of $9.50 per share. The warrants will expire five years after issuance, and will be exercisable either through net cash settlement or net share settlement, at JetBlue's option, in whole or in part at any time. In accordance with the PSP Agreement, we are required to comply with the relevant provisions of the CARES Act which, among other things, includes the following: the requirement to use the Payroll Support Payment exclusively for the continuation of payment of crewmember wages, salaries and benefits; the prohibition on involuntary furloughs and reductions in crewmember pay rates and benefits through September 30, 2020; the requirement that certain levels of commercial air service be maintained until March 1, 2022; the prohibitions on share repurchases and the payment of common stock dividends; and restrictions on the payment of certain executive compensation until March 24, 2022.


13

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


As previously discussed, the $936 million of CARES Act funding represents short-term restricted cash since the funds must be utilized to pay the salaries and benefits costs of our crewmembers through September 30, 2020. The funds are reclassified from short-term restricted cash within prepaid expenses and other on our consolidated balance sheets to cash and cash equivalents when the funds are utilized. As of June 30, 2020, $533 million of CARES Act funding remained available.
The carrying value relating to the payroll support grants is recorded within other liabilities and will be recognized as a contra-expense within special items on our consolidated statements of operations as the funds are utilized. The relative fair value of the warrants, estimated to be $18 million, was recorded within stockholder's equity and reduced the carrying value of the grants to $667 million. Proceeds from the payroll support grants and from the issuance of warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows.
The carrying value relating to the unsecured term loan is recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from which were classified as financing activities on our consolidated statement of cash flows.
On April 29, 2020, we submitted our application for the Loan Program of the CARES Act. Under the Loan Program, we expect to have the ability, through September 30, 2020, to borrow up to approximately $1.1 billion from the Treasury for a term of up to five years with an interest rate of LIBOR plus a margin. Any loans issued under the Loan Program are expected to be senior secured obligations of the Company, with the form of the collateral to be determined. If we accept the full amount of the loan, we will issue warrants to purchase approximately 12.0 million shares of our common stock to the Treasury. Any amount received under the Loan Program will be subject to the relevant provisions of the CARES Act, including many of those described above under the Payroll Support Program. We have entered into a non-binding letter of intent with the Treasury for the Loan Program but have not yet decided if we will are going to take all or part of the loan amount.
The CARES Act also provides for deferred payments of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. We have deferred $20 million in payments through June 30, 2020. We expect to defer approximately $31 million of additional payments for the remainder of 2020.
Income Taxes
Among other things, the CARES Act allows a five-year carryback period for tax losses generated in 2018 through 2020.  As a result, our effective tax rate includes an income tax benefit of $35 million recognized during the six months ended June 30, 2020, related to tax losses generated during 2020 that are permitted to be carried back to certain tax years when the U.S. federal income tax rate was 35%. This benefit was partially offset by $10 million of valuation allowance related to foreign tax credits. Because realizability is dependent on future income, we will continuously update our assessment and it is possible additional tax attributes may require a valuation allowance in future periods.


Note 3— Revenue Recognition
The Company categorizes the revenues received from contracts with its customers by revenue source as we believe it best depicts the nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenues recognized by revenue source for the three and six months ended June 30, 2020 and 2019 (in millions):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
2019
 
2020
2019
Passenger revenue
 
 
 
 
 
Passenger travel
$
145

$
1,936

 
$
1,553

$
3,649

Loyalty revenue - air transportation
25

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