JetBlue Airways Corporation (NASDAQ:JBLU) Q4 2017 Earnings Conference Call - Final Transcript

Jan 25, 2018 • 10:00 am ET

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JetBlue Airways Corporation (NASDAQ:JBLU) Q4 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Stephanie, I would like to welcome everyone to the JetBlue Airways Fourth Quarter 2017 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode.

I would now like to turn the call over to JetBlue's Director of IR, David Fintzen. Please go ahead.

Executive
David Fintzen

Thanks, Stephanie. Good morning, everyone, and thanks for joining us for our fourth quarter 2017 earnings call. This morning, we issued our earnings release, our investor update and a presentation that we'll reference during this call. All of those documents are available on our website at investor.jetblue.com and have been filed with the SEC.

Joining me here in New York to discuss our results are Robin Hayes, our President and CEO; Marty St. George, EVP, Commercial and Planning and Steve Priest, EVP and CFO.

(Forward-Looking Cautionary Statements)

Also during the course of our call, we may discuss several non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website.

And now, I'd like to turn the call over to Robin Hayes, JetBlue's President and CEO.

Executive
Robin Hayes

Good morning, everyone. I know it's a busy day for you, so thank you for joining us. I'd like to start by thanking our crew members for their hard work over the past year. We're proud of how our 21,000 crew members rose to each and every challenge, particularly in a historic hurricane season and during the extreme conditions in the Northeast in early January.

We are very pleased with the 100% completion factor achieved during the recent holiday peak, another example of the hard work of our teams. Your commitment to JetBlue allowed us to deliver strong fourth quarter and full year results, and we look forward to continuing to live our values in 2018.

Turning now to slide 4 of our presentation. This morning, we reported fourth quarter operating income of $189 million, a pretax margin of 9.7%, and earnings of $2.08 per share. Our results include a $570 million onetime non-cash gain related to tax reform, which equates to $1.76 per share and also includes the onetime $1000 bonus paid to our crew members. In 2017, we made significant progress in our journey to superior relative margins. On the revenue side, we further developed our network, grew our co-branded credit card and once again exceeded our expectations and refined our fare options platform with great success.

As a result of our efforts, we saw significant top line growth during the last three quarters of 2017. We're now hard at work developing our next set of revenue initiatives. I've been extremely pleased with our progress in structural cost and our fleet review. Our cost reduction efforts are critical to achieving our margin commitments. The financial success of our model is most visible in the results from our largest and most mature Northeast-