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Oh wow! You playing?
I'm on the road what did he say?
Pretty damn good report on some of the things they were able to accomplish, example:
"Repurchased $1.1 billion, or 25.6 million shares, of common stock during the fourth quarter. In 2015, the Company repurchased 85.1 million shares for $3.6 billion".
My only concern is how the market will take the decreasing prasm/yield and what guidance will be presented on the call. That's what killed JBLU.
Again, damn good report.
Good luck to all today.
American Airlines Group Reports Record Fourth Quarter and Full Year Profit
Source: GlobeNewswire Inc.
American Airlines Group Inc. (NASDAQ:AAL) today reported its fourth quarter and full year 2015 results.
Record fourth quarter 2015 net profit excluding net special credits was $1.3 billion, up 17 percent versus the previous record set in the fourth quarter 2014
Record full year 2015 net profit excluding net special credits was $6.3 billion, up 50 percent versus the previous record set in 2014
Repurchased $1.1 billion, or 25.6 million shares, of common stock during the fourth quarter. In 2015, the Company repurchased 85.1 million shares for $3.6 billion
American Airlines Group reported a record fourth quarter GAAP net profit of $3.3 billion, or $5.09 per diluted share, which includes a $3.0 billion net special credit resulting from the reversal of the Company’s tax valuation allowance. This compares to a GAAP net profit of $597 million in the fourth quarter of 2014, or $0.82 per diluted share.
For full year 2015, the Company reported a record GAAP net profit of $7.6 billion, or $11.07 per diluted share, compared to a GAAP net profit of $2.9 billion, or $3.93 per diluted share in 2014.
American Airlines Group’s fourth quarter 2015 net profit, excluding net special credits, was a record $1.3 billion, or $2.00 per diluted share versus a fourth quarter 2014 net profit excluding net special charges of $1.1 billion, or $1.52 per diluted share. The Company’s fourth quarter 2015 pretax margin excluding net special credits was a record 13.4 percent, up 2.8 percentage points from the same period last year.
Excluding net special credits, the Company’s 2015 net profit was a record $6.3 billion, or $9.12 per diluted share. This represents a 50 percent improvement over the Company’s 2014 net profit excluding special charges of $4.2 billion, or $5.70 per diluted share. The Company’s 2015 pretax margin excluding net special credits was a record 15.3 percent, up 5.5 percentage points versus 2014.
See the accompanying notes in the Financial Tables section of this press release for further explanation, including a reconciliation of GAAP to non-GAAP financial information.
“We are extremely pleased to report record quarterly and full year earnings,” said Chairman and CEO Doug Parker. “The credit for these results goes to our outstanding team members, who have provided excellent customer service.
“American Airlines enters 2016 well-positioned for the future. With the youngest aircraft fleet among our major competitors, more than $2 billion of product investments underway, and the best aviation professionals in the business, we are well on our way to restoring American as the greatest airline in the world.”
Revenue and Cost Comparisons
Total revenue in the fourth quarter was $9.6 billion, a decrease of 5.2 percent versus the fourth quarter 2014 on a 0.6 percent increase in total available seat miles (ASMs). Consolidated passenger revenue per ASM (PRASM) was 12.69 cents, down 6.0 percent versus the fourth quarter 2014. Fourth quarter consolidated passenger yield was 15.34 cents, down 8.9 percent versus the prior year.
For the full year 2015, total revenue was $41.0 billion, down 3.9 percent versus 2014 on a 1.2 percent increase in total ASMs. Driven by a 6.5 percent decrease in consolidated passenger yield, 2015 consolidated PRASM was down 5.4 percent to 13.21 cents versus the prior year.
Total operating expenses in the fourth quarter were $8.6 billion, a decrease of 7.9 percent compared to the fourth quarter 2014, due primarily to a 40.8 percent decrease in consolidated fuel expense. Fourth quarter mainline cost per available seat mile (CASM) was 12.24 cents, down 8.1 percent on a 0.5 percent increase in mainline ASMs versus the fourth quarter 2014. Excluding net special charges and fuel, mainline CASM was 9.22 cents, up 6.3 percent compared to the fourth quarter 2014. Regional CASM excluding net special charges and fuel was 16.10 cents, up 1.5 percent on a 1.4 percent increase in regional ASMs versus the fourth quarter 2014.
Full year 2015 total operating expenses were $34.8 billion, down 9.4 percent versus 2014. Excluding net special charges and fuel, mainline CASM was 8.99 cents, up 4.2 percent versus 2014. Regional CASM excluding net special charges and fuel increased 0.9 percent to 16.09 cents versus 2014.
Cash and Investments
As of Dec. 31, 2015, the Company had $6.9 billion in total cash and short term investments, of which $695 million was restricted (the foregoing amounts are after giving effect to the write-off of Venezuelan bolivars described in the special items section below). The Company also had an undrawn revolving credit facility of $2.4 billion.
As part of an extensive and unprecedented fleet renewal program, the Company invested more than $5.3 billion in new aircraft in 2015, providing it with the youngest and most modern fleet of the U.S. network airlines. In 2015, the Company took delivery of 75 new mainline aircraft, added 52 regional aircraft, and removed 112 mainline and 31 regional aircraft. In 2016, the Company expects to take delivery of 55 new mainline aircraft, add 49 regional aircraft and remove 92 mainline and 29 regional aircraft.
In the fourth quarter, the Company returned $1.2 billion to its shareholders through the payment of $72 million in quarterly dividends and the repurchase of $1.1 billion of common stock, or 25.6 million shares. When combined with the dividends and shares repurchased during the first three quarters of 2015, the Company returned $3.9 billion to its shareholders in 2015 and reduced its shares outstanding by repurchasing 85.1 million shares for $3.6 billion. In addition, in 2015 the Company elected to pay approximately $306 million to cover employee tax withholding obligations on equity awards, further reducing the share count by 7.0 million.
The Company also declared a dividend of $0.10 per share to be paid on Feb. 24, 2016, to shareholders of record as of Feb. 10, 2016.
2015 Notable Accomplishments
Integration Accomplishments
Adopted a single reservations system with zero customer disruption
Reached ratified contracts with industry-leading pay rates for pilots, flight attendants, and customer service and reservation agents
Received a single operating certificate from the Federal Aviation Administration, meaning American is regulated as one airline
Merged American Airlines Vacations and US Airways Vacations
Merged frequent flyer programs by moving US Airways Dividend Miles members into AAdvantage®
Opened the new state-of-the-art Robert W. Baker Integrated Operations Center in Fort Worth
Announced plans to expand the airline’s Fort Worth campus so that support staff and leadership team members work alongside the airline’s training and integrated operations support teams
Optimized the airline’s flight schedules at Chicago O’Hare International Airport and Dallas Fort Worth International Airport
Expanded bag tracking technology to the whole airline, enabling customers to track checked baggage in real time
Brought the number of airports with co-located operations to 140, and consolidated all mainline operations at Dallas Fort Worth International Airport into three terminals, gaining efficiencies in gate use and line maintenance
Finance, Network and Marketing Accomplishments
Announced changes to the AAdvantage® program that become effective throughout 2016. Award miles will be based on dollars spent instead of distance flown
The Company’s stock was added to the S&P 500 index
Expanded the airline’s global footprint by adding 35 new routes, including 6 domestic and 19 international. Notable new routes include Dallas-Fort Worth to Beijing, Los Angeles to Sydney and Los Angeles to Mexico City
For the fourth consecutive year, the American Airlines AAdvantage® program was named Program of the Year at the 2015 Freddie Awards, one of the most prestigious honors for loyalty programs in the travel industry. American also took home honors for Best Elite Program
Recognized by Air Cargo News as the Cargo Airline of the Year for 2015. This is the first time an airline in the Americas has won the award in its 32-year history. The Company was also named the Best Cargo Airline of the Americas for the eighth consecutive year
Opened a new 25,000-square foot dedicated pharmaceutical cargo cold storage facility in Philadelphia
Introduced the Boeing 787 Dreamliner to the Company’s fleet. At year end, the Company had received 13 of these aircraft out of its order of 42
Provided charter service for Pope Francis’ first official visit to the U.S.
Expanded the Company’s agreement with Alaska Airlines that allows full access of American’s network to Alaska customers as well as reciprocal airport club access
Signed a codeshare agreement with Korean Air to place its code on American flights between Dallas Fort Worth International Airport and Seoul, South Korea
Became the official airline partner of the Los Angeles Clippers and was named the official airline of the Chicago Cubs and Wrigley Field
Community Relations Accomplishments
Hosted Sky Ball XIII at the airline’s DFW hangar. This annual fundraiser benefits the nation’s active, reserve and retired military. Approximately 1,000 American Airlines employee volunteers supported the 2015 event, which raised a record $2.2 million
American received, for the 14th consecutive year, the highest possible ranking by the Human Rights Campaign in the 2016 Corporate Equality Index, a nationally recognized benchmark of America's top workplaces for inclusion of LGBT employees
American’s Be Pink campaign raised $1.8 million in cash and frequent flyer mile donations for Susan G. Komen, which raises money to fight breast cancer, and the American Cancer Society
The Environmental Protection Agency announced American is now ranked 43rd on their Fortune 500 list of the largest green power users
Recognized four employees with the 2015 Earl G. Graves Award for Leadership in Diversity and Inclusion for their work in making a lasting impression in the workplace, in the community and as role models in diversity
Awarded $565,000 in college scholarships to 210 dependents of employees through the American Airlines Education Foundation, including 40 for first-generation college attendees
Launched Fuel Smart, a company-wide fuel saving program to reduce usage of aircraft auxiliary power units when jets are parked on the ground; a portion of the savings generated by this reduced usage will benefit Air Compassion for Veterans, a nonprofit organization providing air transportation to injured veterans and active duty military traveling for medical, rehabilitation, or other veteran-related purposes
In 2015, American Airlines employees participated in more than 11,600 volunteer events in their communities, contributing more than 77,000 hours of volunteer time in the communities where they live and where American provides service. In addition, as part of the Company’s Flights for 50 awards program, American employees donated more than 6.4 million frequent flier miles to nonprofit organizations in their communities
Special Items
In the fourth quarter, the Company recognized approximately $2.0 billion in net special credits, including:
$450 million of operating special charges primarily related to merger integration expenses
$592 million nonoperating special charge related to a write-off of the value of Venezuelan bolivars held by the Company
$3.0 billion special non-cash benefit related to the reversal of the Company’s tax valuation allowance
Conference Call / Webcast Details
The Company will conduct a live audio webcast of its earnings call today at 7:30 a.m. CT, which will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Feb. 29.
Investor Guidance
For financial forecasting detail, please refer to the Company’s investor relations update, to be filed with the Securities and Exchange Commission on Form 8-K immediately following its 7:30 a.m. CT conference call. This filing will be available at aa.com/investorrelations.
About American Airlines Group
American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld alliance, whose members and members-elect serve nearly 1,000 destinations with 14,250 daily flights to 150 countries. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index. Connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.
Cautionary Statement Regarding Forward-Looking Statements and Information
This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about future financial and operating results, the expected change in PRASM, the Company’s plans, objectives, estimates, expectations and intentions, and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: significant operating losses in the future; downturns in economic conditions that adversely affect the Company’s business; the impact of continued periods of high volatility in fuel costs, increased fuel prices and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of low cost carriers, airline alliances and industry consolidation; the challenges and costs of integrating operations and realizing anticipated synergies and other benefits of the merger transaction with US Airways Group, Inc.; the Company’s substantial indebtedness and other obligations and the effect they could have on the Company’s business and liquidity; an inability to obtain sufficient financing or other capital to operate successfully and in accordance with the Company’s current business plan; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the effect the Company’s high level of fixed obligations may have on its ability to fund general corporate requirements, obtain additional financing and respond to competitive developments and adverse economic and industry conditions; the Company’s significant pension and other post-employment benefit funding obligations; the impact of any failure to comply with the covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may materially reduce the Company’s liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; any inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company’s hub airports; costs of ongoing data security compliance requirements and the impact of any significant data security breach; any inability to obtain and maintain adequate facilities, infrastructure and slots to operate the Company’s flight schedule and expand or change its route network; the Company’s reliance on third-party regional operators or third-party service providers that have the ability to affect the Company’s revenue and the public’s perception about its services; any inability to effectively manage the costs, rights and functionality of third-party distribution channels on which the Company relies; extensive government regulation, which may result in increases in the Company’s costs, disruptions to the Company’s operations, limits on the Company’s operating flexibility, reductions in the demand for air travel, and competitive disadvantages; the impact of the heavy taxation on the airline industry; changes to the Company’s business model that may not successfully increase revenues and may cause operational difficulties or decreased demand; the loss of key personnel or inability to attract and retain additional qualified personnel; the impact of conflicts overseas, terrorist attacks and ongoing security concerns; the global scope of the Company’s business and any associated economic and political instability or adverse effects of events, circumstances or government actions beyond its control, including the impact of foreign currency exchange rate fluctuations and limitations on the repatriation of cash held in foreign countries; the impact of environmental regulation; the Company’s reliance on technology and automated systems and the impact of any failure of these technologies or systems; challenges in integrating the Company’s computer, communications and other technology systems; losses and adverse publicity stemming from any accident involving any of the Company’s aircraft or the aircraft of its regional or codeshare operators; delays in scheduled aircraft deliveries, or other loss of anticipated fleet capacity, and failure of new aircraft to perform as expected; the Company’s dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions beyond the Company’s control, including global events that affect travel behavior such as an outbreak of a contagious disease, and volatility and fluctuations in the Company’s results of operations due to seasonality; the effect of a higher than normal number of pilot retirements and a potential shortage of pilots; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the effect of a lawsuit that was filed in connection with the merger transaction with US Airways Group, Inc. and remains pending; an inability to use net operating losses carried forward from prior taxable years (NOL Carryforwards); any impairment in the amount of goodwill the Company recorded as a result of the application of the acquisition method of accounting and an inability to realize the full value of the Company’s and American Airlines’ respective intangible or long-lived assets and any material impairment charges that would be recorded as a result; actions that the Company may take in connection with its integration with US Airways that may not be to its advantage on a stand-alone basis; price volatility of the Company’s common stock; the effects of the Company’s capital deployment program and the limitation, suspension or discontinuation of the Company’s share repurchase program or dividend payments thereunder; delay or prevention of stockholders’ ability to change the composition of the Company’s board of directors and the effect this may have on takeover attempts that some of the Company’s stockholders might consider beneficial; the effect of provisions of the Company’s Restated Certificate of Incorporation and Amended and Restated Bylaws that limit ownership and voting of its equity interests, including its common stock; the effect of limitations in the Company’s Restated Certificate of Incorporation on acquisitions and dispositions of its common stock designed to protect its NOL Carryforwards and certain other tax attributes, which may limit the liquidity of its common stock; and other economic, business, competitive, and/or regulatory factors affecting the Company’s business, including those set forth in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (especially in Part II, Item 1A, Risk Factors and Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations) and other risks and uncertainties listed from time to time in the Company’s other filings with the SEC. There may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. The Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements except as required by law.
American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
3 Months Ended
December 31, Percent 12 Months Ended
December 31, Percent
2015 2014 Change 2015 2014 Change
Operating revenues:
Mainline passenger $ 6,739 $ 7,238 (6.9 ) $ 29,037 $ 30,802 (5.7 )
Regional passenger 1,566 1,544 1.4 6,475 6,322 2.4
Cargo 192 232 (17.3 ) 760 875 (13.1 )
Other 1,133 1,146 (1.2 ) 4,718 4,651 1.4
Total operating revenues 9,630 10,160 (5.2 ) 40,990 42,650 (3.9 )
Operating expenses:
Aircraft fuel and related taxes 1,314 2,222 (40.9 ) 6,226 10,592 (41.2 )
Salaries, wages and benefits 2,383 2,089 14.1 9,524 8,508 11.9
Regional expenses:
Fuel 260 437 (40.6 ) 1,230 2,009 (38.8 )
Other 1,186 1,161 2.2 4,753 4,507 5.4
Maintenance, materials and repairs 437 523 (16.3 ) 1,889 2,051 (7.9 )
Other rent and landing fees 441 430 2.5 1,731 1,727 0.2
Aircraft rent 309 312 (1.3 ) 1,250 1,250 -
Selling expenses 342 348 (1.7 ) 1,394 1,544 (9.8 )
Depreciation and amortization 352 334 5.1 1,364 1,295 5.4
Special items, net 441 466 (5.3 ) 1,051 800 31.3
Other 1,097 978 12.1 4,374 4,118 6.2
Total operating expenses 8,562 9,300 (7.9 ) 34,786 38,401 (9.4 )
Operating income 1,068 860 24.2 6,204 4,249 46.0
Nonoperating income (expense):
Interest income 10 9 15.3 39 31 26.0
Interest expense, net (229 ) (220 ) 3.7 (880 ) (887 ) (0.8 )
Other, net (605 ) (82 ) nm (747 ) (181 ) nm
Total nonoperating expense, net (824 ) (293 ) nm (1,588 ) (1,037 ) 53.1
Income before income taxes 244 567 (56.7 ) 4,616 3,212 43.7
Income tax provision (benefit) (3,037 ) (30 ) nm (2,994 ) 330 nm
Net income $ 3,281 $ 597 nm $ 7,610 $ 2,882 nm
Earnings per common share:
Basic $ 5.24 $ 0.84 $ 11.39 $ 4.02
Diluted $ 5.09 $ 0.82 $ 11.07 $ 3.93
Weighted average shares outstanding (in thousands):
Basic 626,559 706,185 668,393 717,456
Diluted 644,140 724,767 687,355 734,016
Note: Percent change may not recalculate due to rounding.
American Airlines Group Inc.
Consolidated Operating Statistics
(Unaudited)
3 Months Ended
December 31, 12 Months Ended
December 31,
2015 2014 Change 2015 2014 Change
Mainline
Revenue passenger miles (millions) 48,319 46,522 3.9 % 199,467 195,651 2.0 %
Available seat miles (ASM) (millions) 58,143 57,840 0.5 % 239,375 237,522 0.8 %
Passenger load factor (percent) 83.1 80.4 2.7 pts 83.3 82.4 0.9 pts
Yield (cents) 13.95 15.56 (10.4 ) % 14.56 15.74 (7.5 ) %
Passenger revenue per ASM (cents) 11.59 12.51 (7.4 ) % 12.13 12.97 (6.5 ) %
Passenger enplanements (thousands) 36,131 35,305 2.3 % 146,814 145,574 0.9 %
Departures (thousands) 274 282 (2.9 ) % 1,114 1,144 (2.6 ) %
Aircraft at end of period 946 983 (3.8 ) % 946 983 (3.8 ) %
Block hours (thousands) 850 858 (0.9 ) % 3,494 3,514 (0.6 ) %
Average stage length (miles) 1,209 1,187 1.9 % 1,226 1,205 1.7 %
Fuel consumption (gallons in millions) 875 881 (0.7 ) % 3,611 3,644 (0.9 ) %
Average aircraft fuel price including related taxes (dollars per gallon) 1.50 2.52 (40.5 ) % 1.72 2.91 (40.7 ) %
Full-time equivalent employees at end of period 98,900 94,400 4.8 % 98,900 94,400 4.8 %
Operating cost per ASM (cents) 12.24 13.32 (8.1 ) % 12.03 13.42 (10.4 ) %
Operating cost per ASM excluding special items (cents) 11.48 12.51 (8.3 ) % 11.59 13.09 (11.4 ) %
Operating cost per ASM excluding special items and fuel (cents) 9.22 8.67 6.3 % 8.99 8.63 4.2 %
Regional (A)
Revenue passenger miles (millions) 5,814 5,618 3.5 % 23,543 22,219 6.0 %
Available seat miles (millions) 7,310 7,213 1.4 % 29,361 28,135 4.4 %
Passenger load factor (percent) 79.5 77.9 1.6 pts 80.2 79.0 1.2 pts
Yield (cents) 26.93 27.48 (2.0 ) % 27.50 28.46 (3.3 ) %
Passenger revenue per ASM (cents) 21.42 21.40 0.1 % 22.05 22.47 (1.9 ) %
Passenger enplanements (thousands) 13,402 13,021 2.9 % 54,435 51,766 5.2 %
Aircraft at end of period 587 566 3.7 % 587 566 3.7 %
Fuel consumption (gallons in millions) 177 174 1.6 % 712 688 3.6 %
Average aircraft fuel price including related taxes (dollars per gallon) 1.47 2.51 (41.5 ) % 1.73 2.92 (40.9 ) %
Full-time equivalent employees at end of period (B) 19,600 18,900 3.7 % 19,600 18,900 3.7 %
Operating cost per ASM (cents) 19.78 22.15 (10.7 ) % 20.38 23.16 (12.0 ) %
Operating cost per ASM excluding special items (cents) 19.65 21.93 (10.4 ) % 20.28 23.08 (12.2 ) %
Operating cost per ASM excluding special items and fuel (cents) 16.10 15.87 1.5 % 16.09 15.94 0.9 %
Total Mainline & Regional
Revenue passenger miles (millions) 54,133 52,140 3.8 % 223,010 217,870 2.4 %
Available seat miles (millions) 65,453 65,053 0.6 % 268,736 265,657 1.2 %
Cargo ton miles (millions) 598 611 (2.1 ) % 2,314 2,333 (0.8 ) %
Passenger load factor (percent) 82.7 80.1 2.6 pts 83.0 82.0 1.0 pts
Yield (cents) 15.34 16.84 (8.9 ) % 15.92 17.04 (6.5 ) %
Passenger revenue per ASM (cents) 12.69 13.50 (6.0 ) % 13.21 13.97 (5.4 ) %
Total revenue per ASM (cents) 14.71 15.62 (5.8 ) % 15.25 16.05 (5.0 ) %
Cargo yield per ton mile (cents) 32.07 37.95 (15.5 ) % 32.84 37.50 (12.4 ) %
Passenger enplanements (thousands) 49,533 48,326 2.5 % 201,249 197,340 2.0 %
Aircraft at end of period 1,533 1,549 (1.0 ) % 1,533 1,549 (1.0 ) %
Fuel consumption (gallons in millions) 1,052 1,055 (0.3 ) % 4,323 4,332 (0.2 ) %
Average aircraft fuel price including related taxes (dollars per gallon) 1.50 2.52 (40.6 ) % 1.72 2.91 (40.7 ) %
Full-time equivalent employees at end of period (B) 118,500 113,300 4.6 % 118,500 113,300 4.6 %
Operating cost per ASM (cents) 13.08 14.30 (8.5 ) % 12.94 14.45 (10.5 ) %
Operating cost per ASM excluding special items (cents) 12.39 13.56 (8.6 ) % 12.54 14.14 (11.3 ) %
Operating cost per ASM excluding special items and fuel (cents) 9.99 9.47 5.5 % 9.77 9.40 3.9 %
(A) Regional includes wholly owned regional airline subsidiaries and operating results from capacity purchase carriers.
(B) Regional full-time equivalent employees only include our wholly owned regional airline subsidiaries.
Note: Amounts may not recalculate due to rounding.
American Airlines Group Inc.
Consolidated Mainline Revenue Statistics by Region
(Unaudited)
3 Months Ended
December 31, 12 Months Ended
December 31,
2015 2014 Change 2015 2014 Change
Domestic
Revenue passenger miles (millions) 31,576 30,591 3.2 % 128,590 125,916 2.1 %
Available seat miles (ASM) (millions) 36,709 37,008 (0.8 ) % 149,584 148,083 1.0 %
Passenger load factor (percent) 86.0 82.7 3.3 pts 86.0 85.0 1.0 pts
Yield (cents) 14.58 15.88 (8.2 ) % 14.96 15.89 (5.8 ) %
Passenger revenue per ASM (cents) 12.54 13.12 (4.5 ) % 12.86 13.51 (4.8 ) %
Latin America
Revenue passenger miles (millions) 7,529 7,477 0.7 % 31,201 32,093 (2.8 ) %
Available seat miles (ASM) (millions) 9,695 9,742 (0.5 ) % 39,726 41,581 (4.5 ) %
Passenger load factor (percent) 77.7 76.8 0.9 pts 78.5 77.2 1.3 pts
Yield (cents) 13.53 16.47 (17.8 ) % 14.54 16.76 (13.2 ) %
Passenger revenue per ASM (cents) 10.51 12.64 (16.9 ) % 11.42 12.94 (11.7 ) %
Atlantic
Revenue passenger miles (millions) 6,564 6,245 5.1 % 29,218 29,306 (0.3 ) %
Available seat miles (ASM) (millions) 8,536 8,233 3.7 % 37,611 37,573 0.1 %
Passenger load factor (percent) 76.9 75.9 1.0 pts 77.7 78.0 (0.3 ) pts
Yield (cents) 12.92 14.14 (8.7 ) % 14.11 14.89 (5.3 ) %
Passenger revenue per ASM (cents) 9.93 10.73 (7.4 ) % 10.96 11.61 (5.6 ) %
Pacific
Revenue passenger miles (millions) 2,650 2,209 19.9 % 10,458 8,335 25.5 %
Available seat miles (ASM) (millions) 3,203 2,858 12.1 % 12,454 10,285 21.1 %
Passenger load factor (percent) 82.7 77.3 5.4 pts 84.0 81.0 3.0 pts
Yield (cents) 10.19 12.09 (15.7 ) % 10.89 12.66 (14.0 ) %
Passenger revenue per ASM (cents) 8.43 9.34 (9.7 ) % 9.14 10.26 (10.9 ) %
Total International
Revenue passenger miles (millions) 16,743 15,931 5.1 % 70,877 69,734 1.6 %
Available seat miles (ASM) (millions) 21,434 20,833 2.9 % 89,791 89,439 0.4 %
Passenger load factor (percent) 78.1 76.5 1.6 pts 78.9 78.0 0.9 pts
Yield (cents) 12.76 14.95 (14.6 ) % 13.82 15.48 (10.7 ) %
Passenger revenue per ASM (cents) 9.97 11.43 (12.8 ) % 10.91 12.07 (9.6 ) %
Note: Amounts may not recalculate due to rounding.
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
American Airlines Group Inc. (the "Company") is providing the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items, which is more indicative of the Company’s ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline and regional CASM excluding fuel is useful to investors because both the cost and availability of fuel are subject to many economic and political factors beyond the Company’s control. Management uses mainline and regional CASM excluding special items and fuel to evaluate the Company's operating performance.
Reconciliation of Income Before Income Taxes Excluding 3 Months Ended
December 31, Percent Change 12 Months Ended
December 31, Percent Change
Special Items 2015 2014 2015 2014
(In millions, except per share amounts) (In millions, except per share amounts)
Income before income taxes as reported $ 244 $ 567 $ 4,616 $ 3,212
Special items:
Special items, net (1) 441 466 1,051 800
Regional operating special items, net (2) 9 16 29 24
Nonoperating special items, net (3) 592 31 594 132
Income before income taxes as adjusted for special items $ 1,286 $ 1,080 19 % $ 6,290 $ 4,168 51 %
Calculation of Pre-Tax Margin Excluding Special Items
Income before income taxes as adjusted for special items $ 1,286 $ 1,080 $ 6,290 $ 4,168
Total operating revenues $ 9,630 $ 10,160 $ 40,990 $ 42,650
Pre-tax margin excluding special items 13.4 % 10.6 % 15.3 % 9.8 %
Reconciliation of Net Income Excluding Special Items
Net income as reported $ 3,281 $ 597 $ 7,610 $ 2,882
Special items:
Special items, net (1) 441 466 1,051 800
Regional operating special items, net (2) 9 16 29 24
Nonoperating special items, net (3) 592 31 594 132
Non-cash income tax provision (benefit) (4) (3,037 ) (6 ) (3,015 ) 346
Net income as adjusted for special items $ 1,286 $ 1,104 17 % $ 6,269 $ 4,184 50 %
Reconciliation of Basic and Diluted Earnings Per Share As
Adjusted for Special Items
Net income as adjusted for special items $ 1,286 $ 1,104 $ 6,269 $ 4,184
Shares used for computation (in thousands):
Basic 626,559 706,185 668,393 717,456
Diluted 644,140 724,767 687,355 734,016
Earnings per share as adjusted for special items:
Basic $ 2.05 $ 1.56 $ 9.38 $ 5.83
Diluted $ 2.00 $ 1.52 $ 9.12 $ 5.70
Reconciliation of Operating Income Excluding Special Items
Operating income as reported $ 1,068 $ 860 $ 6,204 $ 4,249
Special items:
Special items, net (1) 441 466 1,051 800
Regional operating special items, net (2) 9 16 29 24
Operating income as adjusted for special items $ 1,518 $ 1,342 13 % $ 7,284 $ 5,073 44 %
Reconciliation of Operating Cost per ASM Excluding Special 3 Months Ended
December 31, 12 Months Ended
December 31,
Items and Fuel - Mainline only 2015 2014 2015 2014
(in millions) (in millions)
Total operating expenses $ 8,562 $ 9,300 $ 34,786 $ 38,401
Less regional expenses:
Fuel (260 ) (437 ) (1,230 ) (2,009 )
Other (1,186 ) (1,161 ) (4,753 ) (4,507 )
Total mainline operating expenses 7,116 7,702 28,803 31,885
Special items, net (1) (441 ) (466 ) (1,051 ) (800 )
Mainline operating expenses, excluding special items 6,675 7,236 27,752 31,085
Aircraft fuel and related taxes (1,314 ) (2,222 ) (6,226 ) (10,592 )
Mainline operating expenses, excluding special items and fuel $ 5,361 $ 5,014 $ 21,526 $ 20,493
(in cents) (in cents)
Mainline operating expenses per ASM 12.24 13.32 12.03 13.42
Special items, net per ASM (1) (0.76 ) (0.81 ) (0.44 ) (0.34 )
Mainline operating expenses per ASM, excluding special items 11.48 12.51 11.59 13.09
Aircraft fuel and related taxes per ASM (2.26 ) (3.84 ) (2.60 ) (4.46 )
Mainline operating expenses per ASM, excluding special items
and fuel 9.22 8.67 8.99 8.63
Note: Amounts may not recalculate due to rounding.
Reconciliation of Operating Cost per ASM Excluding Special 3 Months Ended
December 31, 12 Months Ended
December 31,
Items and Fuel - Regional only 2015 2014 2015 2014
(in millions) (in millions)
Total regional operating expenses $ 1,446 $ 1,598 $ 5,983 $ 6,516
Regional operating special items, net (2) (9 ) (16 ) (29 ) (24 )
Regional operating expenses, excluding special items 1,437 1,582 5,954 6,492
Aircraft fuel and related taxes (260 ) (437 ) (1,230 ) (2,009 )
Regional operating expenses, excluding special items and fuel $ 1,177 $ 1,145 $ 4,724 $ 4,483
(in cents) (in cents)
Regional operating expenses per ASM 19.78 22.15 20.38 23.16
Regional operating special items, net per ASM (2) (0.13 ) (0.23 ) (0.10 ) (0.08 )
Regional operating expenses per ASM, excluding special items 19.65 21.93 20.28 23.08
Aircraft fuel and related taxes per ASM (3.55 ) (6.06 ) (4.19 ) (7.14 )
Regional operating expenses per ASM, excluding special items and fuel 16.10 15.87 16.09 15.94
Note: Amounts may not recalculate due to rounding.
Reconciliation of Operating Cost per ASM Excluding Special 3 Months Ended
December 31, 12 Months Ended
December 31,
Items and Fuel - Total Mainline and Regional 2015 2014 2015 2014
(in millions) (in millions)
Total operating expenses $ 8,562 $ 9,300 $ 34,786 $ 38,401
Special items:
Special items, net (1) (441 ) (466 ) (1,051 ) (800 )
Regional operating special items, net (2) (9 ) (16 ) (29 ) (24 )
Total operating expenses, excluding special items 8,112 8,818 33,706 37,577
Fuel:
Aircraft fuel and related taxes - mainline (1,314 ) (2,222 ) (6,226 ) (10,592 )
Aircraft fuel and related taxes - regional (260 ) (437 ) (1,230 ) (2,009 )
Total operating expenses, excluding special items and fuel $ 6,538 $ 6,159 $ 26,250 $ 24,976
(in cents) (in cents)
Total operating expenses per ASM 13.08 14.30 12.94 14.45
Special items per ASM:
Special items, net (1) (0.67 ) (0.72 ) (0.39 ) (0.30 )
Regional operating special items, net (2) (0.01 ) (0.03 ) (0.01 ) (0.01 )
Total operating expenses per ASM, excluding special items 12.39 13.56 12.54 14.14
Fuel per ASM:
Aircraft fuel and related taxes - mainline (2.01 ) (3.42 ) (2.32 ) (3.99 )
Aircraft fuel and related taxes - regional (0.40 ) (0.67 ) (0.46 ) (0.76 )
Total operating expenses per ASM, excluding special items
and fuel 9.99 9.47 9.77 9.40
Note: Amounts may not recalculate due to rounding.
FOOTNOTES:
(1 ) The 2015 fourth quarter mainline operating special items totaled a net charge of $441 million, which principally included $305 million of merger integration expenses related to information technology, alignment of labor union contracts, professional fees, severance, share-based compensation, fleet restructuring, re-branding of aircraft and airport facilities, relocation and training, as well as a $22 million charge for bankruptcy related items primarily consisting of fair value adjustments for bankruptcy settlement obligations. The 2015 twelve month period mainline operating special items totaled a net charge of $1.1 billion, which principally consisted of $1.0 billion of merger integration expenses as described above. In addition, the Company recorded a $38 million charge in connection with the dissolution of the Texas Aero Engine Services joint venture. These charges were offset in part by a $66 million credit related to proceeds received from a legal settlement and a $53 million credit for bankruptcy related items primarily consisting of fair value adjustments for bankruptcy settlement obligations.
The 2014 fourth quarter mainline operating special items totaled a net charge of $466 million, which principally included $280 million of merger integration expenses related to information technology, alignment of labor union contracts, professional fees, severance and retention, share-based compensation, fleet restructuring, re-branding of aircraft and airport facilities, relocation and training. In addition, the Company recorded a net $116 million charge for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations as well as a $70 million charge related primarily to certain spare parts asset impairments. The 2014 twelve month period mainline operating special items totaled a net charge of $800 million, which principally included $810 million of merger integration expenses as described above. In addition, the Company recorded a net $81 million charge for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations, $164 million in other special charges, including an $81 million charge to revise prior estimates of certain aircraft residual values and other spare parts asset impairments, as well as $54 million in charges primarily relating to the buyout of certain aircraft leases. These charges were offset in part by a $309 million gain on the sale of slots at Ronald Reagan Washington National Airport.
(2 ) The 2015 fourth quarter and twelve month period regional operating special items principally related to merger integration expenses.
The 2014 fourth quarter regional operating special items totaled a net charge of $16 million, which principally included a $24 million charge due to a new pilot labor contract at the Company’s Envoy regional subsidiary, offset in part by an $8 million gain on the sale of certain spare parts. The 2014 twelve month period regional operating special items totaled a net charge of $24 million, which consisted primarily of the above charge and gain as well as $7 million of merger integration expenses.
(3 ) The 2015 fourth quarter nonoperating special items totaled a net charge of $592 million related to a write off of all of the value of Venezuelan bolivars held by the Company due to continued lack of repatriations and deterioration of economic conditions in Venezuela. The 2015 twelve month period nonoperating special items totaled a net charge of $594 million, which principally included a $592 million charge to write off all of the value of Venezuelan bolivars as described above and $41 million in charges primarily related to non-cash write offs of unamortized debt discount and debt issuance costs associated with refinancing our secured term loan facilities, prepayments of certain aircraft financings and the purchase and subsequent remarketing of certain special facility revenue bonds. These charges were offset in part by a $22 million gain associated with the sale of an investment and a $17 million early debt extinguishment gain associated with the repayment of American’s AAdvantage loan with Citibank.
The 2014 fourth quarter nonoperating special items totaled a net charge of $31 million primarily related to Venezuelan foreign currency losses. The 2014 twelve month period nonoperating special items totaled a net charge of $132 million, which principally included $56 million of early debt extinguishment costs primarily related to the prepayment of 7.50% senior secured notes and other indebtedness, a $43 million charge for Venezuelan foreign currency losses and $33 million of non-cash interest accretion on bankruptcy settlement obligations.
(4 ) In connection with the preparation of the Company’s financial statements for the fourth quarter of 2015, management has determined that it is more likely than not that substantially all of its deferred tax assets, which include its NOLs, will be realized. Accordingly, the Company reversed $3.0 billion of the valuation allowance as of December 31, 2015. This resulted in a special $3.0 billion non-cash tax benefit for the 2015 fourth quarter and twelve month periods.
During the 2014 fourth quarter, the Company recorded a special $6 million non-cash deferred income tax benefit related to certain indefinite-lived intangible assets. During the 2014 twelve month period, the Company sold its portfolio of fuel hedging contracts that were scheduled to settle on or after June 30, 2014. In connection with this sale, the Company recorded a special non-cash tax provision of $330 million in the second quarter of 2014 that reversed the non-cash tax provision which was recorded in other comprehensive income (OCI), a subset of stockholders’ equity, principally in 2009. This provision represents the tax effect associated with gains recorded in OCI principally in 2009 due to a net increase in the fair value of the Company’s fuel hedging contracts. In accordance with U.S. Generally Accepted Accounting Principles, the Company retained the $330 million tax provision in OCI until the last contract was settled or terminated. In addition, the 2014 twelve month period included a special $16 million non-cash deferred income tax provision related to certain indefinite-lived intangible assets.
American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
December 31, 2015 December 31, 2014
(as adjusted)
Assets
Current assets
Cash $ 390 $ 994
Short-term investments 5,864 6,309
Restricted cash and short-term investments 695 774
Accounts receivable, net 1,425 1,771
Aircraft fuel, spare parts and supplies, net 863 1,004
Prepaid expenses and other 748 898
Total current assets 9,985 11,750
Operating property and equipment
Flight equipment 33,091 28,213
Ground property and equipment 6,402 5,900
Equipment purchase deposits 1,067 1,230
Total property and equipment, at cost 40,560 35,343
Less accumulated depreciation and amortization (13,144 ) (12,259 )
Total property and equipment, net 27,416 23,084
Other assets
Goodwill 4,091 4,091
Intangibles, net 2,249 2,240
Deferred tax asset 2,477 -
Other assets 2,103 2,060
Total other assets 10,920 8,391
Total assets $ 48,321 $ 43,225
Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt and capital leases $ 2,231 $ 1,677
Accounts payable 1,469 1,377
Accrued salaries and wages 1,205 1,194
Air traffic liability 3,747 4,252
Frequent flyer liability 2,525 2,807
Other accrued liabilities 2,334 2,097
Total current liabilities 13,511 13,404
Noncurrent liabilities
Long-term debt and capital leases, net of current maturities 18,330 16,043
Pension and postretirement benefits 7,450 7,562
Deferred gains and credits, net 667 829
Bankruptcy settlement obligations 193 325
Other liabilities 2,535 3,041
Total noncurrent liabilities 29,175 27,800
Stockholders' equity
Common stock 6 7
Additional paid-in capital 11,591 15,135
Accumulated other comprehensive loss (4,732 ) (4,559 )
Accumulated deficit (1,230 ) (8,562 )
Total stockholders' equity 5,635 2,021
Total liabilities and stockholders’ equity $ 48,321 $ 43,225
Note: The condensed consolidated balance sheet as of December 31, 2014 has been adjusted to reflect the reclassification of debt issuance costs and deferred income taxes in connection with the adoption of certain recently issued accounting standards. The adoption of these accounting standards had no impact on the Company's condensed consolidated statements of operations.
Corporate Communications
817-967-1577
mediarelations@aa.com
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Sounds exactly like the Ebola scare all over again....
If I recall correctly, only HA and DAL popped on earnings? Every one else sank (JBLU, ALK, UAL, LUV).
Hope not. That's about a 9% or so drop sheesh. BUT, that's what earnings history shows us so heck who knows.
Will hit $39+ and climb AH on into the report tomorrow. What it does after that is anybody's guess. I've learned to listen to what history tells me in just about every aspect of life though....
Yeah, over 22 million shares owned
Great buying opp for anyone wanting to gamble on Doug's jawbone....
I'll tell you what they're thinking. They're gonna ride this $38-$47 wave until profits starts to decrease so they can say I told you so. In order to prevent this conspiracy Doug WILL have to announce hedging down at these levels. Now I hope he did it in the $20's but I think we'd know that by now if that were the case...
Agreed.
This was all Russia/Saudi news. That virus is blah blah blah. I mean it's minuscule compared to Ebola and we see how that scam turned out.
Airlines might close green....
Yeah that sounds pretty bad...
Puts
Sadly, what not to say is probably exactly what he intends to say for buyback reasons as the board knows...
King what's up man what's the deal here? I've got to be missing something. Down from $117 after the initial bounce.
JBLU getting hammered for 6% sheesh. Management not doing any justice going over the report on the call.
$19.82 next point if this doesn't hold. Man...
I agree with that. Market conditions are rough still.
Pregnant women aren't even supposed to fly per doctors instructions. Creates a dangerously high risk for miscarriage etc...
This is where this should/could be bought for the potential CC bounce here. Call started at 10am.
So airlines fall with oil, and as soon as their may be a cut and oil pops, airlines fall further...
Hmmmm.....
Yeah there will always be a time to buy more here. Prime example this was $92 or so last week. Things happen.
Dude my average was $73. I'm down to around half my original holdings.
My boy here told me Saudi may be cutting production by 5%. I suppose that's why oil is jumping.
Nvm I was informed of the Saudi news.
Did I miss something today?
Just took some core off $106.38 print
Kicking ass!
JetBlue Announces Fourth Quarter and Full Year Results
Source: Business Wire
JetBlue Airways Corporation (NASDAQ:JBLU) today reported its results for the fourth quarter and full year 2015:
Operating income of $330 million in the fourth quarter. This compares to operating income of $169 million in the fourth quarter of 2014. For the full year 2015, JetBlue reported operating income of $1.2 billion. This compares to operating income of $515 million in 2014.
Pre-tax income of $303 million in the fourth quarter. This compares to pre-tax income of $140 million in the fourth quarter of 2014. For the full year 2015, JetBlue reported pre-tax income of $1.1 billion. This compares to pre-tax income excluding special items1 of $382 million in 2014. On a GAAP basis, pre-tax income was $623 million in 2014, which included the gain on sale of JetBlue’s wholly-owned subsidiary LiveTV.
Net income of $190 million, or $0.56 per diluted share, in the fourth quarter. This compares to JetBlue’s fourth quarter 2014 net income excluding special items1 of $87 million, or $0.26 per diluted share. On a GAAP basis, net income was $88 million in the fourth quarter 2014, or $0.26 per diluted share, which included income tax relating to the gain on sale of JetBlue’s wholly-owned subsidiary LiveTV. For the full year 2015, JetBlue reported net income of $677 million, or $1.98 per diluted share. This compares to JetBlue’s 2014 net income excluding special items1 of $232 million, or $0.70 per diluted share. On a GAAP basis, net income was $401 million in 2014, or $1.19 per diluted share, which included the gain on sale of JetBlue’s wholly-owned subsidiary LiveTV.
Financial Performance
JetBlue reported record fourth quarter operating revenues of $1.6 billion. Revenue passenger miles for the fourth quarter increased 12.4% to 10.6 billion on a capacity increase of 10.4%, resulting in a fourth quarter load factor of 83.6%, an increase of 1.5 points year over year.
Yield per passenger mile in the fourth quarter was 13.62 cents, down 3.6% compared to the fourth quarter of 2014. Passenger revenue per available seat mile (PRASM) for the fourth quarter 2015 decreased 1.9% year over year to 11.39 cents and operating revenue per available seat mile (RASM) decreased 0.2% year over year to 12.62 cents.
Operating expenses for the quarter decreased 1.1%, or $13 million, from the prior year period. Interest expense for the quarter declined 14.7%, or $5 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the fourth quarter decreased 10.4% year over year to 10.01 cents. Excluding fuel and profit sharing, fourth quarter CASM2 increased 0.7% to 7.29 cents.
Operational Performance
In 2015, system arrival performance, or A14, improved 0.4 points. Completion factor improved 0.8 points. In the fourth quarter, completion factor improved 0.1 points.
“We posted another strong quarter, producing above industry average revenue performance and running a safe and reliable operation. I want to thank all our 18,000 crewmembers for their terrific efforts throughout the year,” said Robin Hayes, JetBlue’s President and CEO.
Fuel Expense and Hedging
In the fourth quarter JetBlue had hedges in place for approximately 14% of its fuel consumption. This resulted in a realized fuel price of $1.68 per gallon, a 37.8% decrease versus fourth quarter 2014 realized fuel price of $2.70. JetBlue recorded $33 million in losses on fuel hedges settling during the fourth quarter.
JetBlue continues to have no hedges in place for the first and second quarters of 2016. Based on the fuel curve as of January 15th, JetBlue expects an average price per gallon of fuel, including the impact of fuel taxes, of $1.12 in the first quarter. Beyond the second quarter, JetBlue has hedged about 10% of its expected second half of the year 2016 fuel consumption.
Liquidity and Cash Flow
JetBlue ended the quarter with $876 million in unrestricted cash and short term investments, or about 14% of trailing twelve month revenue. In addition, JetBlue maintains approximately $600 million in undrawn lines of credit.
During the fourth quarter, JetBlue repaid $90 million in regularly scheduled debt and capital lease obligations, bringing total annual debt payments to $390 million. In addition, JetBlue bought out the leases on six A320 aircraft for a total of $110 million. JetBlue anticipates paying approximately $454 million in regularly scheduled debt and capital lease obligations in 2016 and plans to continue to opportunistically prepay other debt. JetBlue expects to pay approximately $51 million in regularly scheduled debt and capital obligations in the first quarter of 2016.
As part of its previously announced 2012 share buyback, JetBlue purchased 3 million shares from October 30, 2015 through December 31, 2015 at a weighted average share price of $25.71. For the full year 2015, JetBlue purchased 9.8 million shares for approximately $227 million.
“We continue to generate healthy free cash flow and de-risk our business,” said Mark Powers, JetBlue’s Chief Financial Officer. “Looking forward, we will continue to focus on strengthening our balance sheet and prioritizing ROIC accretive initiatives, including structural cost programs.”
First Quarter and Full Year Outlook
The following outlook does not include the impact of Winter Storm Jonas, which caused over 900 flight cancellations within the last week.
For the first quarter of 2016, change in CASM excluding fuel and profit sharing is expected to be between 0.0% and negative 2.0% versus the year-ago period. Excluding fuel and profit sharing, CASM for the full year 2016 is forecasted to grow between zero and two percent year over year.
Capacity is expected to increase between 14% and 16% in the first quarter 2016 and between 8.5% and 10.5% for the full year. Severe winter weather caused a significant number of flight cancellations in the first quarter of 2015. This increases JetBlue’s 2016 capacity growth rate compared to a scheduled versus scheduled basis by about 2.5% in the first quarter and 0.5% for the full year.
JetBlue will conduct a conference call to discuss its quarterly earnings today, January 28, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
About JetBlue
JetBlue is New York's Hometown Airline™, and a leading carrier in Boston, Fort Lauderdale - Hollywood, Los Angeles (Long Beach), Orlando, and San Juan. JetBlue carries more than 35 million customers a year to 95 cities in the U.S., Caribbean, and Latin America with an average of 900 daily flights. For more information please visit JetBlue.com.
Notes
(1) Pre-tax and net income excluding special items are non-GAAP financial measures that we use to measure our core performance. Note A provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
(2)
Consolidated operating cost per available seat mile, excluding fuel and profit sharing and related taxes (CASM Ex-Fuel and Profit Sharing) is a non-GAAP financial measure that we use to measure our core performance. Note A provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.
Forward Looking Statements
This press release contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. When used in this document, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy; our significant fixed obligations and substantial indebtedness; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market and the effect of increased congestion in this market; our reliance on automated systems and technology; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our reliance on a limited number of suppliers; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches; changes in or additional government regulation; changes in our industry due to other airlines' financial condition; global economic conditions, or an economic downturn leading to a continuing or accelerated decrease in demand for domestic and business air travel; the spread of infectious diseases; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to, the Company's 2014 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
2015 2014 Change 2015 2014 Change
OPERATING REVENUES
Passenger $ 1,438 $ 1,327 8.3 $ 5,893 $ 5,343 10.3
Other 156 119 31.0 523 474 10.4
Total operating revenues 1,594 1,446 10.2 6,416 5,817 10.3
OPERATING EXPENSES
Aircraft fuel and related taxes 300 436 (31.3 ) 1,348 1,912 (29.5 )
Salaries, wages and benefits 401 331 21.2 1,540 1,294 19.1
Landing fees and other rents 78 73 8.2 342 321 6.7
Depreciation and amortization 93 86 6.3 345 320 7.7
Aircraft rent 30 31 (3.7 ) 122 124 (1.8 )
Sales and marketing 65 49 32.9 264 231 14.3
Maintenance materials and repairs 119 113 4.9 490 418 17.3
Other operating expenses 178 158 13.0 749 682 9.8
Total operating expenses 1,264 1,277 (1.1 ) 5,200 5,302 (1.9 )
OPERATING INCOME 330 169 1,216 515
Operating margin 20.7 % 11.7 % 9.0 pts. 19.0 % 8.9 % 10.1 pts.
OTHER INCOME (EXPENSE)
Interest expense (30 ) (35 ) (14.7 ) (128 ) (148 ) (13.9 )
Capitalized interest 2 3 (47.7 ) 8 14 (42.7 )
Interest income and other 1 3 (74.6 ) 1 1 (82.2 )
Gain on sale of subsidiary - - - - 241 (100.0 )
Total other income (expense) (27 ) (29 ) (6.2 ) (119 ) 108 (210.5 )
INCOME BEFORE INCOME TAXES 303 140 1,097 623
Pre-tax margin 19.0 % 9.7 % 9.3 pts. 17.1 % 10.7 % 6.4 pts.
Income tax expense 113 52 420 222
NET INCOME $ 190 $ 88 $ 677 $ 401
EARNINGS PER COMMON SHARE:
Basic $ 0.60 $ 0.29 $ 2.15 $ 1.36
Diluted $ 0.56 $ 0.26 $ 1.98 $ 1.19
Weighted average shares outstanding (thousands):
Basic 318,941 300,035 315,101 294,732
Diluted 342,383 342,691 344,817 343,294
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
(unaudited)
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
2015 2014 Change 2015 2014 Change
Revenue passengers (thousands) 8,911 7,987 11.6 35,101 32,078 9.4
Revenue passenger miles (millions) 10,554 9,392 12.4 41,711 37,813 10.3
Available seat miles (ASMs) (millions) 12,626 11,436 10.4 49,258 44,994 9.5
Load factor 83.6 % 82.1 % 1.5 pts. 84.7 % 84.0 % 0.7 pts.
Aircraft utilization (hours per day) 11.6 11.5 1.3 11.9 11.8 1.3
Average fare $ 161.35 $ 166.17 (2.9 ) 167.89 $ 166.57 0.8
Yield per passenger mile (cents) 13.62 14.13 (3.6 ) 14.13 14.13 (0.0 )
Passenger revenue per ASM (cents) 11.39 11.61 (1.9 ) 11.96 11.88 0.7
Operating revenue per ASM (cents) 12.62 12.64 (0.2 ) 13.03 12.93 0.8
Operating expense per ASM (cents) 10.01 11.17 (10.4 ) 10.56 11.78 (10.4 )
Operating expense per ASM, excluding fuel (cents) 7.64 7.35 4.0 7.82 7.53 3.8
Operating expense per ASM, excluding fuel and profit sharing and related taxes (cents) (a) 7.29 7.23 0.7 7.51 7.48 0.5
Airline operating expense per ASM (cents) (b) 10.01 11.17 (10.4 ) 10.56 11.70 (9.8 )
Departures 80,135 74,526 7.5 316,505 294,800 7.4
Average stage length (miles) 1,093 1,088 0.5 1,092 1,088 0.4
Average number of operating aircraft during period 212.7 200.4 6.1 207.9 196.2 6.0
Average fuel cost per gallon, including fuel taxes $ 1.68 $ 2.70 (37.8 ) 1.93 $ 2.99 (35.7 )
Fuel gallons consumed (millions) 178 162 10.4 700 639 9.6
Full-time equivalent employees at period end (b) 14,537 13,280 9.5
(a) Refer to Note A, Consolidated operating cost per available seat mile, excluding fuel and profit sharing and related taxes, at the end of our Earnings Release for more information on this non-GAAP measure.
(b) Excludes operating expenses and employees of LiveTV, LLC, which are unrelated to our airline operations and no longer part of JetBlue from June 10, 2014.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
December 31, December 31,
2015 2014
(unaudited)
Cash and cash equivalents $ 318 $ 341
Total investment securities 607 427
Total assets 8,660 7,839
Total debt 1,843 2,233
Stockholders' equity 3,210 2,529
Note A – Non-GAAP Financial Measures
JetBlue sometimes uses non-GAAP measures that are derived from the Consolidated Financial Statements, but that are not presented in accordance with generally accepted accounting principles (“GAAP”). JetBlue believes these metrics provide a meaningful comparison of our results to others in the airline industry and our prior year results. Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
Net Income and Pre-Tax Income, excluding special items. JetBlue excludes special items from net income and pre-tax income because management believes the exclusion of these items is helpful to investors to evaluate the company's recurring core operational performance in the periods shown. Therefore, we adjust for these amounts. Special items excluded in the tables below showing reconciliation of net income and pre-tax income include the gain on the sale of JetBlue's wholly-owned subsidiary LiveTV, LLC due to the non-recurring nature of this item.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF NET INCOME, INCOME BEFORE INCOME TAXES AND EPS EXCLUDING SPECIAL ITEMS
(in millions, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2014 2015 2014
$ $ $ $
Income before income taxes $ 303 $ 140 $ 1,097 $ 623
Less: Gain on sale of subsidiary - - - 241
Income before income taxes excluding special items 303 140 1,097 382
Less: Income tax expense 113 52 420 222
Add back: Income tax relating to gain on sale of subsidiary (a) - (1 ) - 72
Net Income excluding special items $ 190 $ 87 $ 677 $ 232
Earnings per common share excluding special items:
Basic $ 0.60 $ 0.29 $ 2.15 $ 0.79
Diluted $ 0.56 $ 0.26 $ 1.98 $ 0.70
(a) The capital gain generated from the sale of LiveTV allowed JetBlue to utilize a capital loss carryforward which resulted in the release of a valuation allowance related to the capital loss deferred tax asset of $19 million
Consolidated operating cost per available seat mile, excluding fuel and profit sharing and related taxes (“CASM Ex-Fuel and Profit Sharing”). CASM is a common metric used in the airline industry. We exclude aircraft fuel and related taxes and profit sharing and related taxes from operating cost per available seat mile to determine CASM Ex-Fuel and Profit Sharing. We believe CASM Ex-Fuel and Profit Sharing provides investors the ability to measure financial performance excluding items beyond our control such as (i) fuel costs, which are subject to many economic and political factors beyond our control and (ii) profit sharing, which is sensitive to volatility in earnings. We believe this measure is more indicative of our ability to manage costs and is more comparable to measures reported by other major airlines.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL AND PROFIT SHARING AND RELATED TAXES
(dollars in millions, per ASM data in cents)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2014 2015 2014
$
per ASM
$
per ASM
$
per ASM
$
per ASM
Total operating expenses $ 1,264 10.01 $ 1,277 11.17 $ 5,200 10.56 5,302 11.78
Less: Aircraft fuel and related taxes 300 2.37 436 3.82 1,348 2.74 1,912 4.25
Operating expenses, excluding fuel and related taxes 964 7.64 841 7.35 3,852 7.82 3,390 7.53
Less: Profit sharing and related taxes 44 0.35 14 0.12 151 0.31 25 0.05
Operating expense, excluding fuel and profit sharing and related taxes $ 920 7.29 $ 827 7.23 $ 3,701 7.51 3,365 7.48
Return On Invested Capital (“ROIC”). ROIC is a non-GAAP financial measure we believe provides useful supplemental information for management and investors by measuring the effectiveness of our operations' use of invested capital to generate profits. We use ROIC to track how much value we are creating for our shareholders as it represents an important financial metric we believe provides meaningful information as to how well we generate returns relative to the capital invested in our business.
NON-GAAP FINANCIAL MEASURE
Reconciliation of Return on Invested Capital (Non-GAAP)
(dollars in millions)
(unaudited)
Twelve Months Ended
December 31,
2015 2014
Numerator
Operating Income $ 1,216 $ 515
Add: Interest income and other 1 1
Add: Interest component of capitalized aircraft rent (a) 64 65
Subtotal 1,281 581
Less: Income tax expense impact 491 226
Operating Income After Tax, Adjusted 790 355
Denominator
Average Stockholders' equity $ 2,869 $ 2,331
Average total debt 2,038 2,409
Capitalized aircraft rent (a) 853 869
Invested Capital 5,760 5,609
Return on Invested Capital 13.7% 6.3%
(a) Capitalized Aircraft Rent
Aircraft rent, as reported 122 124
Capitalized aircraft rent (7 * Aircraft rent) (b) 853 869
Interest component of capitalized aircraft rent (Imputed interest at 7.5%) 64 65
(b) In determining the Invested Capital component of ROIC we include a non-GAAP adjustment for aircraft
operating leases, as operating lease obligations are not reflected on our balance sheets but do represent a
significant financing obligation. In making the adjustment we used a multiple of seven times our aircraft rent
as this is the multiple which is routinely used with in the airline community to represent the financing
component of aircraft operating lease obligations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160128005224/en/
JetBlue Investor Relations
+1 718-709-2202
ir@jetblue.com
or
JetBlue Corporate Communications
+1 718-709-3089
corpcomm@jetblue.com
Climbing AH!
Oh my my my!
121M volume wow...
What's your stance on earnings play here? Think it'll pull a HA +14% or a UAL -6%?
Big Bulls/bears battle currently :-/
Wondering if this makes a good day trade short with the upcoming fed volatility...
Just heard an "educated call" for a test of the recent oil low next week. We'll see..