UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~10-Q~~

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021

☐ 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

JETBLUE AIRWAYS ~~CORPORATION~~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~~) (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 March 31, ~~2020,~~2021, there were ~~269,707,459~~316,636,886 shares outstanding of the registrant’s common stock, par value $0.01.

Table of Contents

JETBLUE AIRWAYS CORPORATION

FORM 10-Q

INDEX


			Page
			~~Page~~
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			3
Consolidated Balance Sheets - March 31, ~~2020~~2021 and December 31, ~~2019~~2020			3
Consolidated Statements of Operations - Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020			5
Consolidated Statements of Comprehensive ~~Income~~Loss - Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020			6
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020			7
Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2423
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3938
Item 4. Controls and Procedures			3938

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4039
Item 1A. Risk Factors			4039
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4339
Item 5. Other Information			39
Item 6. Exhibits			4440

SIGNATURE			42

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


	March 31, 2021		December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,358	$	1,918
Investment securities	867		1,135
Receivables, less allowance (2021-$2; 2020-$2)	153		98
Inventories, less allowance (2021-$28; 2020-$27)	68		71
Prepaid expenses and other	162		123
Total current assets	3,608		3,345
PROPERTY AND EQUIPMENT
Flight equipment	10,466		10,256
Predelivery deposits for flight equipment	393		420
Total flight equipment and predelivery deposits, gross	10,859		10,676
Less accumulated depreciation	2,968		2,888
Total flight equipment and predelivery deposits, net	7,891		7,788
Other property and equipment	1,225		1,202
Less accumulated depreciation	610		591
Total other property and equipment, net	615		611
Total property and equipment, net	8,506		8,399
OPERATING LEASE ASSETS	772		804
OTHER ASSETS
Investment securities	0		2
Restricted cash	52		51
Intangible assets, net of accumulated amortization of $368 and $360, at 2021 and 2020, respectively.	243		261
Other	479		544
Total other assets	774		858
TOTAL ASSETS	$	13,660	$	13,406

March 31, 2020 December 31, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,618
$ 959
Investment securities 181
369
Receivables, less allowance (2020-$2; 2019-$1) 101
231
Inventories, less allowance (2020-$23; 2019-$22) 81
81
Prepaid expenses and other 213
146
Total current assets 2,194
1,786
PROPERTY AND EQUIPMENT
Flight equipment 10,526
10,332
Predelivery deposits for flight equipment 454
433
Total flight equipment and predelivery deposits, gross 10,980
10,765
Less accumulated depreciation 2,853
2,768
Total flight equipment and predelivery deposits, net 8,127
7,997
Other property and equipment 1,171
1,145
Less accumulated depreciation 547
528
Total other property and equipment, net 624
617
Total property and equipment, net 8,751
8,614
OPERATING LEASE ASSETS 761
912
OTHER ASSETS
Investment securities 3
3
Restricted cash 59
59
Other 572
544
Total other assets 634
606
TOTAL ASSETS $ 12,340
$ 11,918

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


	March 31, 2021		December 31, 2020
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	375	$	365
Air traffic liability	1,405		1,122
Accrued salaries, wages and benefits	413		409
Other accrued liabilities	363		215
Current operating lease liabilities	112		113
Current maturities of long-term debt and finance lease obligations	463		450
Total current liabilities	3,131		2,674
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	4,619		4,413
LONG-TERM OPERATING LEASE LIABILITIES	725		752
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes	826		922
Air traffic liability - non-current	573		616
Other	72		78
Total deferred taxes and other liabilities	1,471		1,616
COMMITMENTS AND CONTINGENCIES (Note 6)	0		0
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued	0		0
Common stock, $0.01 par value; 900 shares authorized, 475 and 474 shares issued and 317 and 316 shares outstanding at March 31, 2021 and December 31, 2020, respectively	5		5
Treasury stock, at cost; 158 and 158 shares at March 31, 2021 and December 31, 2020, respectively	(1,987)		(1,981)
Additional paid-in capital	2,975		2,959
Retained earnings	2,721		2,968
Accumulated other comprehensive income	0		0
Total stockholders’ equity	3,714		3,951
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,660	$	13,406

March 31, 2020 December 31, 2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 422
$ 401
Air traffic liability 1,231
1,119
Accrued salaries, wages and benefits 379
376
Other accrued liabilities 190
295
Current operating lease liabilities 91
128
Short-term borrowings 983
—
Current maturities of long-term debt and finance lease obligations 326
344
Total current liabilities 3,622
2,663
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS 1,908
1,990
LONG-TERM OPERATING LEASE LIABILITIES 709
690
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes 1,213
1,251
Air traffic liability - loyalty non-current 478
481
Other 44
44
Total deferred taxes and other liabilities 1,735
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, 428 and 427 shares issued and 270 and 282 shares outstanding at March 31, 2020 and December 31, 2019, respectively 4
4
Treasury stock, at cost; 158 and 145 shares at March 31, 2020 and December 31, 2019, respectively (1,980 ) (1,782 )
Additional paid-in capital 2,294
2,253
Retained earnings 4,054
4,322
Accumulated other comprehensive (loss) income (6 ) 2
Total stockholders’ equity 4,366
4,799
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 12,340
$ 11,918

See accompanying notes to condensed consolidated financial statements.

Table of Contents

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~~2020 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, or our ~~2019~~2020 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.

Available-for-sale investment securities. Our available-for-sale investment securities include investments such as time deposits and convertible debt securities. The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the fair value hierarchy. We did 0t record any material gains or losses on these securities during the three months ended March 31, 2021 or 2020. Refer to Note 8 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities. ~~The contractual maturities of our~~We did not have any held-to-maturity investments as of March 31, ~~2020 were not greater than 24 months.~~2021 and December 31, 2020. We did ~~not~~0t record any significant gains or losses on these securities during the three months ended March 31, ~~2020~~2021 or ~~2019. The estimated fair value of these investments approximated their carrying value as of March 31, 2020 and December 31, 2019, respectively.~~2020.

The aggregate carrying values of our short-term and long-term investment securities consisted of the following at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in millions):

March 31, 2020 December 31, 2019
Available-for-sale securities
Time deposits $ 115
$ 325
Commercial paper 40
20
Debt securities 8
6
Total available-for-sale securities 163
351
Held-to-maturity securities
Corporate bonds 21
21
Total held-to-maturity securities 21
21
Total investment securities $ 184
$ 372


	March 31, 2021		December 31, 2020
Available-for-sale securities
Time deposits	$	860	$	1,130
Debt securities	7		7
Total available-for-sale securities	867		1,137
Total investment securities	$	867	$	1,137

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 ~~ASU~~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~~$45 million and ~~$41~~$40 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Table of Contents

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 March 31, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

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 ~~Codification.~~Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification"). The carrying amount of our equity method investments was ~~$36~~$33 million and ~~$38~~$34 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and is included within other assets on our consolidated balance ~~sheets,~~sheets.

Recently ~~Issued~~Adopted 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~~2019-12 as of January 1, ~~2020 using a modified retrospective transition approach.~~2021. The adoption of ASU ~~2016-13~~2019-12 did not have a material impact on our condensed consolidated financial statements.

In August ~~2018,~~2020, the FASB issued ASU ~~2018-13,~~2020-06, ~~Fair Value Measurement (Topic 820)~~Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): ~~Disclosure Framework - Changes to the Disclosure Requirements~~Accounting for ~~Fair Value Measurement~~Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The ~~update eliminates, adds,~~treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and ~~modifies certain disclosure requirements~~it is effective for ~~fair value measurements.~~interim and annual reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020. We adopted the requirements of ASU ~~2018-13~~2020-06 as of January 1, ~~2020.~~2021. The adoption ~~of ASU 2018-13~~ did not have ~~a significant~~an impact on our condensed consolidated financial ~~statement disclosures.~~

~~Table~~statements as we did not have any convertible instruments outstanding as of ~~Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

December 31, 2020. As discussed in Note ~~2—The COVID-19 Pandemic~~

~~Since December 2019,~~2 to our condensed consolidated financial statements, in March 2021, we completed a ~~novel strain~~private offering for $750 million of 0.50% convertible notes due 2026. We evaluated the ~~coronavirus ("COVID-19") has spread to most countries across the globe including the United States. The unprecedented~~conversion feature of this note offering for embedded derivatives in accordance with ASC 815, Derivatives and ~~rapid spread of COVID-19~~Hedging, and the ~~related travel restrictions and social distancing measures implemented throughout the world have significantly reduced demand for air travel. Beginning~~substantial premium model in March, 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 and the pace of decline accelerated throughout March and into April 2020. This decline in demand has had a material adverse impact~~accordance with ASC 470, Debt. Based on our ~~operating revenues and financial position. The length and severity of the reduction in demand due to the pandemic is uncertain; accordingly,~~assessment, we expect the adverse impact to grow in the second quarter of 2020. 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. 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, 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 social distancing and to implement new proceduresconcluded that ~~reflect the recommendations of health experts, including some of the following:~~

~~Updated our sick leave policy to provide up to 14 days of paid sick leave for crewmembers who have been diagnosed with COVID-19 or are required to quarantine;~~

~~Implemented a framework for internal contact tracing and a crewmember notification process;~~

~~Enhanced daily and overnight cleaning and disinfection of our aircraft and all of our facilities;~~

~~Eliminated layovers for crewmembers in New York City and worked with crew transportation companies to ensure social distancing;~~

~~Limited the number of seats available to be sold on most flights to promote social distancing;~~

~~Retained an infectious disease specialist to conduct calls with crewmembers;~~

~~Implemented jump seat buffers on our flights to further promote social distancing measures;~~

~~Mandated that crewmembers use facial coverings and other personal protective equipment while also reducing the number of service touchpoints;~~

~~Provided enhanced flexibility to our customers by waiving change fees while also extending the expiration date of travel credits to 24 months; and~~

~~Recently required customers to wear face coverings while traveling on our aircraft.~~

~~Our Business~~

The COVID-19 pandemic drove a significant decline in demand during March 2020 and this is expected to continue through at least the second quarter of 2020. To align capacity with expected demand for air travel, we have significantly reduced our system capacity to a level that maintains essential service. For the second quarter of 2020, our capacity is expected to decline by approximately 80 percent when compared to the second quarter of 2019. As a result of the significant reduction in demand expectations and lower capacity, we are temporarily parking approximately 65 percent of our fleet.

The reduction in demand and our capacity will also result 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:

~~A reduction in flying capacity to align with the expected demand, which has resulted in temporarily parking approximately 170 aircraft.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

•~~Temporary consolidations of our operations in certain cities that contain multiple airport locations.~~

•~~Instituted a company-wide hiring freeze.~~

•~~Offered voluntary time off programs to most of our crewmembers.~~

~~Implemented salary reductions of 20% to 50% for our officers.~~

~~Renegotiated service rates with our business partners and extended payment terms.~~

At March 31, 2020, we had cash, cash equivalents and short-term investments of approximately $1.8 billion. 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 prior to and after March 31, 2020 include:

~~Executed a new $1.0 billion 364-day delayed draw term loan agreement and immediately drew down on the facility~~separate accounting for the ~~full amount available.~~

~~Borrowed on our existing $550 million revolving credit facility.~~

~~Executed a $150 million pre-purchase arrangement with our co-brand credit card partner.~~

~~Suspended non-critical capital expenditure projects.~~

~~Amended our purchase agreement with Airbus resulting in a $1.1 billion reduction in aircraft capital expenditures through 2022.~~

~~Suspended share repurchases.~~

~~Obtained $936 million~~conversion feature of ~~government funding under~~this note offering is not required. The ~~Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is discussed further below.~~

As a result of these activities, we had $3.1 billion in restricted and unrestricted cash as of April 30, 2020. The $936 million of CARES Act funding is considered to be restricted cash since the funds must be utilized to pay the salaries and benefits costs of our crewmembers through September 30, 2020. We will 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~~

~~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 bookcarrying value of ~~the assets. Our long-lived assets include both owned~~this convertible note was included within long-term debt and ~~leased properties which are classified as property and equipment, and operating~~finance lease ~~assets~~obligations 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 that the future cash flows from the operation of our Embraer E190 fleet were lower than the carrying value. For those aircraft, including the ones that are under operating lease, and related spare parts in our Embraer E190 fleet, we recorded an impairment loss of $202 million representing the difference between the book value of these assets and their fair value. We estimated the fair value of our Embraer E190 fleet using third party valuations and considered specific circumstance such as aircraft age, maintenance requirements and condition, and therefore classified as Level 3 in the fair value hierarchy. We evaluated the remaining fleet and determined the future cash flows of our Airbus A320 and Airbus A321 fleet exceeded their carrying valuessheet as of March 31, ~~2020. As the extent of the ongoing impact from the COVID-19 pandemic remains uncertain, we will update our assessment as new information becomes available.~~2021.

~~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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

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 March 31, 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 requirement against 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.

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 3.00%. Any loans issued under the Loan Program are expected to be senior secured obligations of the Company, with 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.

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. This is expected to provide us with approximately $67 million of additional liquidity during the current year.

~~Income Taxes~~

The Company's effective tax rate was 24.3% and 28.3% for first quarter 2020 and 2019, respectively. The change in tax rate, as compared to the prior year period, is due to several factors including a $12.1 million discrete federal tax benefit recorded in the first quarter of 2020 related to the carryback of net operating losses.

~~Our effective tax rate through 2020 may be subject to change related to discrete items recorded as additional CARES Act implementation guidance is released.~~

Note 3—2— 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 months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Three Months Ended March 31,
2020 2019
Passenger revenue
Passenger travel $ 1,408
$ 1,712
Loyalty revenue - air transportation 103
90
Other revenue
Loyalty revenue 51
43
Other revenue 26
26
Total revenue $ 1,588
$ 1,871


	Three Months Ended March 31,
	2021		2020
Passenger revenue
Passenger travel	$	625	$	1,408
Loyalty revenue - air transportation	45		103
Other revenue
Loyalty revenue	45		51
Other revenue	18		26
Total revenue	$	733	$	1,588

~~For the three months ended March 31, 2020,~~ TrueBlue^® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

revenue - air transportation represent the revenue recognized when TrueBlue^® points have been redeemed and the travel has occurred. The corresponding amounts within the three months ended March 31, 2019 have been reclassified to be comparable with the current period presentation. These reclassifications do not impact total passenger revenue.

Contract Liabilities

Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):

March 31, 2020 December 31, 2019
Air traffic liability - passenger travel $ 1,020
$ 929
Air traffic liability - loyalty program (air transportation) 656
661
Deferred revenue 33
10
Total $ 1,709
$ 1,600


	March 31, 2021		December 31, 2020
Air traffic liability - passenger travel	$	1,184	$	964
Air traffic liability - loyalty program (air transportation)	758		733
Deferred revenue	36		41
Total	$	1,978	$	1,738

During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, we recognized passenger revenue of ~~$636~~$237 million and ~~$668~~$636 million respectively, that was included in passenger travel liability at the beginning of the respective periods.

The Company elected the practical expedient that allows entities to not disclose the amount of the remaining transaction price and its expected timing of recognition for passenger tickets if the contract has an original expected duration of one year or less or if certain other conditions are met. We elected to apply this practical expedient to our contract liabilities relating to passenger travel and ancillary services as our tickets or any related passenger credits generally expire one year from the date of issuance.

In ~~April in~~ response to the impact of COVID-19 on air travel, we ~~announced~~extended the expiration dates for ~~certain travel credits that are recorded in our air traffic liability, principally those~~ travel credits issued from February 27 through June 30, 2020 ~~through May 31, 2020, will be given an extended expiration life of~~to a 24 ~~months.~~month period. Accordingly, any revenue associated with these travel credits, which are deferred in air traffic liability, will be recognized within 24 months. Based on our customers' behaviors and estimates of breakage, we expect $18 million of the outstanding travel credits at March 31, 2021 will be recognized into revenue beyond 12 months. We have, accordingly, reclassified this amount to air traffic liability - non-current on our consolidated balance sheets. Given the change in contract duration, our estimates of revenue from unused tickets may be subject to variability and differ from historical experience.

TrueBlue^® points are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of the points that were part of the air traffic liability balance at the beginning of the period as well as points that were issued during the period.

In April 2020, we executed a pre-purchase arrangement of TrueBlue® points with our co-brand credit card partner for $150 million. The funds have been fully applied to point purchases as of March 31, 2021.

The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Balance at December 31, 2019 $ 661
TrueBlue^® points redeemed
(103 )
TrueBlue^® points earned and sold
98
Balance at March 31, 2020 $ 656

Balance at December 31, 2018 $ 580
TrueBlue^® points redeemed
(90 )
TrueBlue^® points earned and sold
104
Balance at March 31, 2019 $ 594


Balance at December 31, 2020	$	733
TrueBlue® points redeemed	(45)
TrueBlue® points earned and sold	70
Balance at March 31, 2021	$	758

Balance at December 31, 2019	$	661
TrueBlue® points redeemed	(103)
TrueBlue® points earned and sold	98
Balance at March 31, 2020	$	656

The timing of our TrueBlue^® point redemptions can vary; however, the majority of our points are redeemed within approximately three years of the date of issuance.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 4—3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations

During the three months ended March 31, ~~2020,~~2021, we made ~~scheduled~~ principal payments of ~~$102~~$644 million on our outstanding ~~long-term~~ debt and finance lease obligations.

We had pledged aircraft, engines, other equipment, and facilities with a net book value of ~~$5.6~~$6.8 billion at March 31, ~~2020~~2021 as security under various financing arrangements.

At March 31, ~~2020,~~2021, scheduled maturities of our ~~short-term borrowings,~~ long-term debt and finance lease obligations were ~~$235~~$351 million for the remainder of ~~2020, $1.3 billion in~~ 2021, ~~$319~~$419 million in 2022, ~~$298~~$629 million in 2023, ~~$169~~$955 million in 2024, $305 million in 2025, and ~~$867 million~~$2.4 billion thereafter.

The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows (in millions):

March 31, 2020 December 31, 2019
Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value
Public Debt
Fixed rate special facility bonds, due through 2036 $ 42
$ 39
$ 42
$ 46
Fixed rate enhanced equipment notes:
Series AA, due through 2032 581
409
581
586
Series A, due through 2028 181
144
181
186
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023 125
124
133
141
Floating rate equipment notes, due through 2028 187
169
201
207
Fixed rate equipment notes, due through 2028 1,035
1,001
1,107
1,201
Total⁽¹⁾
$ 2,151
$ 1,886
$ 2,245
$ 2,367


	March 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)
Public Debt
Fixed rate special facility bonds, due through 2036	$	42	$	46	$	42	$	45
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032	560		456		560		440
2019-1 Series A, due through 2028	175		155		174		152
2019-1 Series B, due through 2027	107		140		107		139
2020-1 Series A, due through 2032	627		676		627		658
2020-1 Series B, due through 2028	170		226		170		223
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023	100		101		114		116
Fixed rate equipment notes, due through 2028	841		829		891		1,017
Floating rate equipment notes, due through 2028	140		133		152		144
Floating rate term loan credit facility, due through 2024	695		754		702		759
Unsecured CARES Act Payroll Support Program loan, due through 2030	259		214		259		207
Secured CARES Act Loan, due through 2025	104		106		104		104
Citibank line of credit, due through 2023	0		0		546		533
2020 sale-leaseback transactions, due through 2024	351		388		352		393
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	121		100		0		0
0.50% convertible senior notes due 2026	734		659		0		0
Total(1)	$	5,026	$	4,983	$	4,800	$	4,930

(1) Total excludes finance lease obligations of ~~$83~~$56 million and ~~$89~~$63 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

(2) The estimated fair ~~values~~values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair values of our enhanced equipment notes and our special facility bonds were based on quoted market prices in markets with low trading volumes. The fair value of our non-public debt was estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. The fair values of our other financial instruments approximate their carrying values. Refer to Note 98 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

1512

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

We have financed certain aircraft with Enhanced Equipment Trust Certificates, or EETCs. One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity, or VIE, as defined in the Consolidations topic of the Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.

~~Short-term~~Unsecured Consolidated Appropriations Act Payroll Support Program Extension Loan

On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with the United States Department of the Treasury ("Treasury") governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2"). In the first quarter of 2021, Treasury provided us with total payments of $504 million (the "Payroll Support 2 Payments") under the program, consisting of $383 million in grants and $121 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until January 15, 2026, and the applicable Secured Overnight Financing Rate ("SOFR") plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 0.8 million shares of our common stock to the Treasury at an exercise price of $14.43 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time. In accordance with the PSP Extension Agreement, we are required to comply with the relevant provisions of the Payroll Support Program 2 which, among other things, includes the following: the requirement to use the Payroll Support 2 Payments 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 March 31, 2021; 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 October 1, 2022.

The carrying value relating to the payroll support extension grants are recorded within other accrued liabilities and are 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 $8 million, are recorded within additional paid-in capital and reduced the total carrying value of the grants to $375 million. Proceeds from the payroll support extension grants and from the issuance of warrants are classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. As of March 31, 2021, the carrying value of our payroll support extension grants received under Payroll Support Program 2 was approximately $87 million.

The carrying value relating to the unsecured term loans is recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our condensed consolidated statement of cash flows.

On April 29, 2021, Treasury provided us an additional payment of $76 million (the "Additional Payroll Support 2 Payment"), consisting of $53 million in grants and $23 million in an unsecured term loan under the PSP Extension Agreement. In consideration for the Additional Payroll Support 2 Payment, we issued warrants to Treasury to purchase approximately 0.2 million additional shares of our common stock at an exercise price of $14.43 per share (the "Additional Payroll Support 2 Warrants"). The terms of the unsecured term loan and additional warrants are identical to those issued in the first quarter of 2021 under the Payroll Support Program 2 as described above.

0.50% Convertible Senior Notes due 2026

In March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. The notes are general unsecured senior obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were approximately $734 million.

Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends and certain issuer tender or exchange offers.

Upon conversion, the notes will be settled in cash up to the aggregate principal amount of the notes to be converted and, at our election, in shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.

We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.

As discussed in Note 1 to our condensed consolidated financial statements, we early adopted the provisions of ASU 2020-06. Accordingly, we evaluated the conversion feature of this note offering for embedded derivative in accordance with ASC 815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.

Floating Rate Term Loan Credit Facility

On June 17, 2020, we entered into a $750 million term loan credit facility with Barclays Bank PLC, as administrative agent. The loans under this term loan credit facility bear interest at a variable rate equal to LIBOR (subject to a 1.00% floor), or at our election another rate, in each case, plus a specified margin. Our obligations are secured on a senior basis by airport takeoff and landing slots at LaGuardia Airport, John F. Kennedy International Airport, and Reagan National Airport and the right to use certain intellectual property assets comprising the JetBlue brand. Slots are rights to take-off or land at a specific airport during a specific time period during the day and a means by which airport capacity and congestion can be managed. The term loan facility is subject to amortization payments of 5% per year, payable quarterly, commencing on September 30, 2020 with the remaining balance due and payable in a single payment on the maturity date of June 17, 2024.

The interest rate on our outstanding balance was 6.25% as of March 31, 2021.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Under the CARES Act, assistance was made available to the aviation industry in the form of direct payroll support (the "Payroll Support Program") and secured loans (the "Loan Program").

Unsecured CARES Act Payroll Support Program Loan

On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act with the Treasury governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with payments which totaled $963 million (the "Payroll Support Payments") consisting of $704 million in grants and $259 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable SOFR plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to the Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share. The warrants expire five years after issuance.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The carrying value relating to the payroll support grants was recorded within other accrued liabilities and was recognized as a contra-expense within special items on our consolidated statements of operations as the funds were utilized. The relative fair value of the warrants, estimated to be $19 million, was recorded within additional paid-in capital and reduced the total carrying value of the grants to $685 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. Our funding from the payroll support grants under the CARES Act were fully utilized as of December 31, 2020.

Secured CARES Act Loan Program

Under the CARES Act Loan Program, JetBlue has the ability to borrow up to a total of approximately $1.9 billion from the Treasury. If we accept the full amount of the loan, we will issue warrants to purchase approximately 20.5 million shares of our common stock to the Treasury. Any amount received under the CARES Act Loan Program will be subject to the relevant provisions of the CARES Act, including many of those described above under the Payroll Support Program.

Unless otherwise terminated early, all borrowings under the CARES Act Loan Program are due and payable on the fifth anniversary of the initial borrowing date. Borrowings bear interest at a variable rate equal to LIBOR (or another rate based on certain market interest rates, plus a margin of 1% per annum, in each case with a floor of 0%), plus a margin of 2.75% per annum. Our obligations under the CARES Act Loan Program are secured by liens on (i) certain eligible aircraft and engine collateral, (ii) certain loyalty program assets, including JetBlue's rights in certain loyalty program agreements, loyalty program data and intellectual property, and (iii) certain cash accounts (collectively, the "Collateral"). Under the terms of the CARES Act Loan Program, we may also pledge eligible spare parts, slots, gates and routes, and additional aircraft, real property, ground support equipment, flight simulators and equity interests. The CARES Act Loan Program includes affirmative and negative covenants that restrict our ability to, among other things, dispose of Collateral, merge, consolidate or sell assets, incur certain additional indebtedness or pay certain dividends. In addition, we are required to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities aggregating not less than $550 million and to maintain a minimum ratio of the borrowing base of the Collateral (determined as the sum of a specified percentage of the appraised value of each type of Collateral) to outstanding obligations under the CARES Act Loan Program of not less than 1.6 to 1.0. If we do not meet the minimum collateral coverage ratio, we must either provide additional Collateral to secure our obligations under the CARES Act Loan Program or repay the loans by an amount necessary to maintain compliance with the collateral coverage ratio. The CARES Act Loan Program contains events of default customary for similar financings. Upon the occurrence of an event of default, the outstanding obligations under the CARES Act Loan Program may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to JetBlue, we will be required to prepay the loans in full under the CARES Act Loan Program.

We entered into a loan and guarantee agreement (the "Loan Agreement") with the Treasury with a borrowing capacity of $1.1 billion and made an initial drawing of $115 million under the CARES Act Loan Program on September 29, 2020. In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share.

On November 3, 2020, we amended and restated the Loan Agreement and increased JetBlue's borrowing capacity from approximately $1.1 billion to approximately $1.9 billion.

On January 15, 2021, we entered into a letter agreement with Treasury which provided an extension of the Loan Agreement allowing us the option to access the remaining borrowing capacity through May 28, 2021.

As of March 31, 2021, $115 million remained outstanding under the Loan Agreement.

Fixed Rate Enhanced Equipment Notes

2020-1A and B Equipment Notes

In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $808 million secured by 24 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series A, bearing interest at the rate of 4.00% per annum in the aggregate principal amount equal to $636 million, and (ii) Series B, bearing interest at the rate of 7.75% per annum in the aggregate principal amount equal to $172 million. Principal and interest are payable semi-annually.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

2019-1B Equipment Notes

In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $115 million bearing interest at a rate of 8.00% per annum. These equipment notes are secured by 25 Airbus A321 aircraft, which were included in the collateral pool of our 2019-1 Series AA and Series A offerings completed in November 2019. Principal and interest are payable semi-annually.

2020 Sale-Leaseback Transactions

In 2020, we executed $563 million of sale-leaseback transactions. Of these transactions, $354 million 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 consolidated statements of cash flows. The remaining $209 million of sale-leaseback transactions qualified as sales and generated a loss of $106 million. The assets associated with these transactions which qualified as sales are recorded within operating lease assets. The liabilities are recorded within current operating lease liabilities and long-term operating lease liabilities on our consolidated balance sheets. These transactions are treated as cash from investing activities on our consolidated statements of cash flows.

We did not execute any sale-leaseback transactions in the first quarter of 2021.

Citibank Line of Credit

~~In August 2019, we amended our~~We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative ~~agent. The amendment increased our borrowing capacity by $125 million~~agent, for up to $550 ~~million and extended the~~million. The term of the facility runs through August 2023. Borrowings under the Credit and Guaranty Agreement bear interest at a variable rate equal to LIBOR, plus a margin. The Credit and Guaranty Agreement iswas previously secured by Slots at John F. Kennedy International Airport, LaGuardia Airport, and Reagan National Airport, as well as certain other assets. Slots are rights to take-off or land at a specific airport during a specific time period during the day and a means by which airport capacity and congestion can be managed. On May 29, 2020, we exercised our pre-existing right and removed the Slots from the collateral pool to the facility. In exchange for the Slots, we added unencumbered aircraft, simulators, and certain other assets as permitted thereunder. The Credit and Guaranty Agreement includes covenants that require us to maintain certain minimum balances in unrestricted cash, cash equivalents, and unused commitments available under revolving credit facilities. In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets. As

We borrowed the full amount of ~~and for the three months ended March 31, 2020 and December 31, 2019, we did not have a balance outstanding or any borrowings under this revolving credit facility.~~

~~On April 22, 2020, we borrowed~~ $550 million under this revolving credit ~~facility. Following~~facility on April 22, 2020.

We repaid the full balance of this ~~borrowing, we have no additional borrowing capacity available under this revolving credit facility.~~facility in the first quarter of 2021.

Short-term

Morgan Stanley Line of Credit

We have a revolving line of credit with Morgan Stanley for up to approximately $200 million. This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the amount available to us under this line of credit may vary accordingly. This line of credit bears interest at a floating rate based upon LIBOR, plus a margin. As of and for the ~~three months~~periods ended March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we did not have a balance outstanding or any borrowings under this line of credit.

~~Morgan Stanley Delayed Draw Term Loan Agreement~~

In March 2020, we entered into a Delayed Draw Term Loan Credit Agreement with Morgan Stanley Senior Funding Inc., as the administrative agent. The credit agreement provides for a term loan facility of up to $1 billion. Borrowings under the credit agreement bear interest at a variable rate equal to LIBOR (but not less than 1% per annum), plus a margin of 1.75% per annum, or at our election, another rate based on certain market interest rates.

Our obligations under the credit agreement are secured by liens on certain aircraft and spare engines. The credit agreement includes provisions that require us to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities (including the term loan facility) aggregating not less than $550 million.

We borrowed the full amount of the term loan facility in March 2020. Amortization payments equal to 0.25% of the outstanding principal of the term loan will be due on the last day of each quarter during the term. The remaining outstanding principal amount of the term loan must be repaid in a single installment on the maturity date on March 15, 2021. We may prepay all or a portion of the term loan from time to time, at par plus accrued and unpaid interest. As of March 31, 2020, we had a balance of $1 billion outstanding under this term loan facility.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Note ~~5—Earnings~~4—Loss Per Share

Basic earnings per share is calculated by dividing net (loss) income by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the Crewmember Stock Purchase Plan, convertible notes, and any other potentially dilutive instruments using the treasury stock ~~method.~~and if-converted methods. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 3.5 million and 2.0 million for the three months ended March 31, ~~2020. There were no anti-dilutive common stock equivalents during the three months ended March 31, 2019 .~~2021 and 2020, respectively.

The following table shows how we computed basic and diluted earnings per common share for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (dollars and share data in millions):

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


							Three Months Ended March 31,
	Three Months Ended March 31,						2021		2020
	2020			2019
Net (loss) income	$	(268	)	$	42
Net loss						Net loss	$	(247)	$	(268)

Weighted average basic shares	277.2			305.3		Weighted average basic shares	316.3		277.2
Effect of dilutive securities	—			1.6		Effect of dilutive securities	0		0
Weighted average diluted shares	277.2			306.9		Weighted average diluted shares	316.3		277.2

(Loss) earnings per common share
Loss per common share						Loss per common share
Basic	$	(0.97	)	$	0.14	Basic	$	(0.78)	$	(0.97)
Diluted	$	(0.97	)	$	0.14	Diluted	$	(0.78)	$	(0.97)

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The ~~Coronavirus (COVID-19) Pandemic~~

~~Since December 2019, a novel strain of the coronavirus ("COVID-19") has spread~~COVID-19 pandemic continues to most countries across the globe including the United States. The unprecedented and rapid spread of COVID-19 and the related travel restrictions and social distancing measures implemented throughout the world have significantly reduced demand for air travel. Beginning in March, 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 and the pace of decline accelerated throughout March and into April 2020. This decline in demand has had~~ a material adverse impact on our operating revenues and financial position. ~~The length~~Although we began seeing signs of recovery in the first quarter of 2021, demand for air travel remains significantly lower than pre-pandemic levels.

First Quarter 2021 Results

•First quarter system capacity decreased by 39.0% year over year.

•Revenue for the first quarter of 2021 decreased by $855 million to $733 million.

•Operating revenue per available seat mile (RASM) for the three months ended March 31, 2021 decreased by 24.5% to 8.06 cents.

•Operating expense for the three months ended March 31, 2021 decreased by 46.6% to $1.0 billion.

•Operating expense per available seat mile (CASM) for the three months ended March 31, 2021 decreased by 12.5% to 11.30 cents.

•Our operating expense for the first quarter of 2021 and ~~severity~~2020 included the effects of special items. In the ~~reduction in demand due~~first quarter of 2021, we recognized $288 million of contra-expense representing the amount of federal payroll support extension grants provided by the Consolidated Appropriations Act, 2021, that were utilized during the period, and $1 million of contra-expense related to the ~~pandemic is uncertain; accordingly, we expect~~recognition of Employee Retention Credits provided by the ~~adverse impact to grow in~~CARES Act. Our operating expense for the ~~second quarter of 2020. While we are planning for a modest recovery in demand during the third~~first quarter of 2020 included the ~~exact timing~~impairment charge of $202 million on our Embraer E190 fleet. Excluding fuel and ~~pace~~related taxes, special items, as well as operating expenses related to our non-airline businesses, our operating expense decreased by 17.0% to $1.1 billion.

•Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile (CASM ex-fuel)(1) increased by 36.0% to 12.25 cents for the first quarter of 2021.

•Our reported loss per share for the ~~recovery is uncertain given~~first quarter of 2021 and 2020 were $(0.78) and $(0.97), respectively. Excluding special items, our adjusted loss per share(1) for the ~~significant impact~~first quarter of 2021 and 2020 were $(1.48) and $(0.42), respectively.

Since February 2021, we have seen a meaningful rebound in the ~~pandemic on~~demand for leisure travel. We are encouraged by the ~~overall U.S.~~improving booking trends, and ~~global economy. Our~~believe the ongoing acceleration in demand will continue into the summer. We expect to increase capacity in response to the ~~pandemic and the measures we take to secure additional liquidity may be modified as we have more clarity in the timing~~level of ~~demand recovery.~~

~~In response to these developments, 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~~demand. We have taken a number of steps to ~~promote social distancing~~position ourselves for recovery as demand for air travel eventually returns to pre-pandemic levels.

Network

In February 2021, we added services to Miami and Key West which further expanded our relevance in South Florida.

In April 2021, we operated our inaugural flight between New York's John F. Kennedy International Airport ("JFK") to ~~implement new procedures~~Guatemala City's La Aurora International Airport, making us the only airline that ~~reflect the recommendations of health experts, including some of the following:~~

~~Updated our sick leave policy to provide up to 14 days of paid sick leave for crewmembers who have been diagnosed with COVID-19 or are required to quarantine;~~

~~Implemented a framework for internal contact tracing and a crewmember notification process;~~

~~Enhanced~~offers daily ~~and overnight cleaning and disinfection of our aircraft and all of our facilities;~~

~~Eliminated layovers for crewmembers in~~service between New York City and ~~worked~~Guatemala's capital city.

In June 2021, we expect to launch daily service to Los Cabos, Mexico from JFK and Los Angeles International Airport.

We also anticipate launching service from Boston's Logan International Airport and JFK to London in the second half of 2021. London will be our first destination in Europe.

Commercial Partnerships

We continue to develop our strategic relationship with ~~crew transportation companies~~American Airlines Group Inc. ("American"). In February 2021, we began codeshare operations under our alliance agreement on select flights.

Enabled by our alliance with American, in April 2021, we announced our plans to ~~ensure social distancing;~~add seven new destinations between late 2021 and 2022 to our route map. We also announced significant growth plans at New York's LaGuardia Airport where we plan to increase our operations from 15 daily departures prior to the pandemic, to more than 50 daily departures by summer 2022.

~~Limited~~

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We believe our partnership with American will create more capacity, seamless connectivity for travelers in the northeast, and offer more choices for customers across the networks of both airlines. In addition, we expect this relationship will also accelerate our recovery as the travel industry adapts to new trends as a result of the COVID-19 pandemic.

Fleet

We took delivery of three Airbus A321neo aircraft in the first quarter of 2021and paid for each delivery with cash on hand.

In connection with our plans to begin services to London, we took delivery of our first Airbus A321LR aircraft, the long range model of the Airbus A321, in April 2021.

Also in April 2021, we placed out first Airbus A220 aircraft into service. We believe the economics of the Airbus A220 aircraft, which have approximately 30% lower direct cost per seat as compared to our Embraer E190 fleet, will be pivotal in helping us reshape our cost structure and rebuild our margin as we begin to recover from the pandemic.

Customer Experience

In February 2021, we unveiled a reimagined version of our Mint® experience, our premium product offering. The new service includes a completely refreshed cabin design featuring private suites with a sliding door for every Mint® customer. Each Mint® aircraft will also include two Mint® Studio suites which offers the most space in a premium experience from any U.S. airline based on personal square footage per passenger seat. We expect to debut this new premium service with a 16-seat individual suite layout on a limited number of ~~seats available to be sold on most~~flights between New York and Los Angeles in 2021. For our anticipated transatlantic flights to ~~promote social distancing;~~London, the new Mint® experience will include 24 individual suites.

~~Retained an infectious disease specialist to conduct calls with crewmembers;~~

~~Implemented jump seat buffers~~We also updated our Fare Options platform giving our customers more choices and flexibility by eliminating change and cancel fees on our Blue, Blue Extra, Blue Plus, and Mint® fares. Beginning in July 2021, customers who purchased these fares on our domestic flights will also be guaranteed overhead bin space for one carry-on bag.

In March 2021, we introduced Paisley by JetBlue ("Paisley"), a new travel website that leverages smart technology to ~~further promote social distancing measures;~~

~~Mandated that crewmembers use facial coverings and other personal protective equipment while also reducing the number of service touchpoints;~~

~~Provided enhanced flexibility~~provide individually tailored offers our customers based on their itinerary. We believe Paisley will add breadth to our ~~customers by waiving change fees while also extending~~product offerings, learn more about our customers' preferences, and contribute to future earnings growth.

Outlook for 2021

As we continue to navigate through the ~~expiration date of travel credits to 24 months; and~~

~~Recently required customers to wear face coverings while traveling~~pandemic, we are optimistic about the future. Based on our ~~aircraft.~~

~~Our Business~~

~~The COVID-19 pandemic drove a significant decline in demand during March 2020 and this is expected to continue through at least~~current planning assumptions, we expect capacity for the second quarter of ~~2020. To align capacity with~~2021 to decline by approximately 15% as compared to the same period in 2019.

Revenue is expected ~~demand for air travel, we have significantly reduced our system capacity~~ to ~~a level that maintains essential service. For~~decline between 30% and 35% in the second quarter of ~~2020, our capacity is expected~~2021 as compared to the same period in 2019. We expect the demand acceleration which began in February 2021 to continue as larger portions of the U.S. population become vaccinated against COVID-19 and travel advisories and restrictions begin to ease.

We presently expect second quarter 2021 operating expenses to decline by approximately ~~80 percent when~~8% as compared to the ~~second quarter of~~same period in 2019. ~~As a result of the significant reduction in demand expectations~~We plan to continue managing our cost structure, while mitigating near term cost pressures from higher fuel prices, airport rents and ~~lower~~landing fees, and labor costs as we ramp up our operations and begin to return capacity ~~we are temporarily parking approximately 65 percent of our fleet.~~back to pre-pandemic levels.

⁽¹⁾Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~A reduction in flying capacity to align with the expected demand, which has resulted in temporarily parking of approximately 170 aircraft.~~

•~~Temporary consolidations of our operations in certain cities that contain multiple airport locations.~~

•~~Instituted a company-wide hiring freeze.~~

•~~Offered voluntary time off programs to most of our crewmembers.~~

~~Implemented salary reductions of 20% to 50% for our officers.~~

~~Renegotiated service rates with our business partners and extended payment terms.~~

~~Executed a new $1.0 billion 364-day delayed draw term loan agreement and immediately drew down on the facility for the full amount available.~~

~~Borrowed on our existing $550 million revolving credit facility.~~

~~Executed a $150 million pre-purchase arrangement with our co-brand credit card partner.~~

~~Suspended non-critical capital expenditure projects.~~

~~Amended our purchase agreement with Airbus resulting in a $1.1 billion reduction in aircraft capital expenditures through 2022.~~

~~Suspended share repurchases.~~

~~Obtained $936 million of government funding under The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is discussed further below.~~

~~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 to support 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").

⁽¹⁾~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Our effective tax rate through 2020 may be subject to change related to discrete items recorded as additional CARES Act implementation guidance is released.~~

We lowered our cash burn from an average of $18 million per day during the second half of March to approximately $10 million per day by May. We expect to continue our efforts to reduce our daily cash burn throughout the second quarter of 2020.

~~First Quarter 2020 Results~~

The unprecedented and rapid spread of COVID-19 and the related travel restrictions and social distancing measures implemented throughout the world have significantly reduced demand for air travel. Demand for air travel began to weaken at the end of February 2020 and the pace of decline accelerated throughout March and into April 2020. This decline in demand has had a material adverse impact on our operating revenues and financial position. Revenue decreased by $283 million compared to the first quarter of 2019.

~~Operating revenue per available seat mile (RASM) for the three months ended March 31, 2020 decreased by 12.0% to 10.67 cents.~~

•

Operating expense and operating expense per available seat mile (CASM) for the three months ended March 31, 2020 increased by 7.1% to $1.9 billion and 11.0% to 12.91 cents, respectively. Our operating expense for the first quarter of 2020 and 2019 included the effects of special items. For the first quarter of 2020, we recorded an impairment charge of $202 million on our Embraer E190 fleet which contributed 1.36 cents to our unit cost. Our operating expense for the first quarter of 2019 included $12 million of special items related to our Embraer E190 fleet transition and the implementation of our pilots' collective bargaining agreement, which contributed 0.08 cents to our unit cost in the prior year. Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile (CASM ex-fuel)⁽¹⁾ ~~increased by 4.0% to 9.01 cents.~~

•

Our reported loss per share for the first quarter of 2020 was $(0.97) compared to reported earnings per diluted share of $0.14 for the first quarter of 2019. Our results for first quarter of 2020 and 2019 included the effects of special items. Excluding special items, our adjusted (loss) earnings per diluted share⁽¹⁾ ~~for the first quarter of 2020 and 2019 were $(0.42) and $0.16, respectively.~~


•	~~We generated $124 million in cash from operations and $(243) million in free cash flow~~⁽¹⁾ ~~for the three months ended March 31, 2020.~~

~~Outlook for 2020~~

The length and severity of the reduction in demand due to the COVID-19 pandemic is uncertain; accordingly, we expect the adverse impact to grow in the second quarter of 2020. 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. 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.

⁽¹⁾~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

RESULTS OF OPERATIONS

Three Months Ended March 31, ~~2020~~2021 vs. ~~2019~~2020

Overview

We reported a net loss of $247 million, an operating loss of $294 million and an operating margin of (40.2)% for the three months ended March 31, 2021. This compares to a net loss of $268 million, an operating loss of $334 million and an operating margin of (21.0)% for the three months ended March 31, 2020. ~~This compares to a net income of $42 million, an operating income of $76 million and an operating margin of 4.1%~~Loss per share was $(0.78) for the three months ended March 31, ~~2019. Loss per share was $(0.97) for the first quarter of 2020~~2021 compared to ~~$0.14 of earnings per diluted share~~$(0.97) for the same period in ~~2019.~~2020.

Our reported results for the ~~first quarter of~~three months ended March 31, 2021 and 2020 ~~and 2019~~ included the effects of special items. Adjusting for these special items⁽¹⁾, our adjusted net loss was ~~$116~~$467 million, adjusted operating loss was ~~$132~~$583 million, adjusted operating margin was ~~(8.3)~~(79.6)%, and adjusted loss per share was ~~$(0.42)~~$(1.48) for the ~~first quarter of 2020.~~three months ended March 31, 2021. This compares to adjusted net ~~income~~loss of ~~$51~~$116 million, adjusted operating ~~income~~loss of ~~$88~~$132 million, adjusted operating margin ~~was 4.7%~~ of (8.3)%, and adjusted ~~diluted earnings~~loss per share of ~~$0.16~~$(0.42) for the ~~first quarter of 2019.~~three months ended March 31, 2020.

On-time performance, as defined by the Department of Transportation, or DOT, is arrival within 14 minutes of scheduled arrival time. In the first quarter of ~~2020,~~2021, our systemwide on-time performance was ~~84.8%~~78.9% compared to ~~73.7%~~84.8% for the same period in ~~2019. Our on-time performance remains challenged by our concentration of operations in the northeast of the U.S., one of the world's most congested airspaces.~~2020. Our completion factor ~~decreased~~increased by ~~4.1~~4.2 points to ~~93.7%~~97.9% in the first quarter of ~~2020~~2021 from ~~97.8% in~~93.7% for the same period in ~~2019.~~2020.

Operating Revenues


(Revenues in millions; percent changes based on unrounded numbers)	Three Months Ended March 31,						Year-over-Year Change						(Revenues in millions; percent changes based on unrounded numbers)	Three Months Ended March 31,						Year-over-Year Change
	2020			2019			$			%				2021			2020			$		%
Passenger revenue	$	1,511		$	1,802		$	(291	)	(16.1	)		Passenger revenue	$	670		$	1,511		$	(841)	(55.7)	%
Other revenue	77			69			8			10.7			Other revenue	63			77			(14)		(18.0)
Total operating revenues	$	1,588		$	1,871		$	(283	)	(15.1	)		Total operating revenues	$	733		$	1,588		$	(855)	(53.9)	%

Average Fare	$	185.44		$	177.24		$	8.20		4.6			Average Fare	$	149.97		$	185.44		$	(35.47)	(19.1)	%
Yield per passenger mile (cents)	14.54			14.15			0.39			2.8			Yield per passenger mile (cents)	11.52			14.54			(3.02)		(20.8)
Passenger revenue per ASM (cents)	10.15			11.67			(1.52		)	(13.0	)		Passenger revenue per ASM (cents)	7.36			10.15			(2.79)		(27.5)
Operating revenue per ASM (cents)	10.67			12.12			(1.45		)	(12.0	)		Operating revenue per ASM (cents)	8.06			10.67			(2.61)		(24.5)
Average stage length (miles)	1,160			1,153			7			0.6			Average stage length (miles)	1,277			1,160			117		10.1
Revenue passengers (thousands)	8,150			10,165			(2,015		)	(19.8	)		Revenue passengers (thousands)	4,463			8,150			(3,687)		(45.2)
Revenue passenger miles (millions)	10,392			12,734			(2,342		)	(18.4	)		Revenue passenger miles (millions)	5,808			10,392			(4,584)		(44.1)
Available Seat Miles (ASMs) (millions)	14,891			15,437			(546		)	(3.5	)		Available Seat Miles (ASMs) (millions)	9,090			14,891			(5,801)		(39.0)
Load Factor	69.8		%	82.5		%				(12.7	)	pts.	Load Factor	63.9		%	69.8		%			(5.9)		pts.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures in this report. Non-GAAP financial measures are financial measures that are derived from the condensed consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the United States, or GAAP. We believe these non-GAAP financial measures provide a meaningful comparison of our results to others in the airline industry and our prior year ~~results and therefore is useful for investors.~~results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. The information below provides an explanation of each non-GAAP financial measure and shows a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.

Operating Expenses per Available Seat Mile, excluding fuel and related taxes, other non-airline operating expenses, and special items ("CASM Ex-Fuel")

Operating expenses per available seat mile, or CASM, is a common metric used in the airline industry. Our CASM for the relevant periods are summarized in the table below. We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as JetBlue Technology Ventures and JetBlue Travel Products, and special items from operating expenses to determine CASM ex-fuel, which is a non-GAAP financial measure.

For the ~~first quarter~~three months ended March 31, 2021, special items include contra-expenses recognized on the utilization of payroll support extension grants received under the Consolidated Appropriations Act, 2021, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

Special items for the three months ended March 31, 2020 ~~special items~~ include the impairment charge of our Embraer E190 ~~fleet. Special items for~~fleet resulting from the ~~first quarter of 2019 include one-time costs related to~~decline in demand caused by the ~~Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement.~~ COVID-19 pandemic.

We believe that CASM ex-fuel is useful for investors because it provides investors the ability to measure financial performance excluding items beyond our control, such as fuel costs, which are subject to many economic and political factors, or not related to the generation of an available seat mile, such as operating expense related to certain non-airline businesses. We believe this non-GAAP measure is more indicative of our ability to manage airline costs and is more comparable to measures reported by other major airlines.

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
Three Months Ended March 31,
2020 2019
(in millions; per ASM data in cents) $ per ASM $ per ASM
Total operating expenses $ 1,922
$ 12.91
$ 1,795
$ 11.63
Less:
Aircraft fuel and related taxes 365
2.45
437
2.83
Other non-airline expenses 14
0.09
9
0.06
Special items 202
1.36
12
0.08
Operating expenses, excluding fuel $ 1,341
$ 9.01
$ 1,337
$ 8.66


NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
	Three Months Ended March 31,
	2021				2020
($ in millions; per ASM data in cents)	$		per ASM		$		per ASM
Total operating expenses	$	1,027	$	11.30	$	1,922	$	12.91
Less:
Aircraft fuel and related taxes	193		2.13		365		2.45
Other non-airline expenses	10		0.10		14		0.09
Special items	(289)		(3.18)		202		1.36
Operating expenses, excluding fuel	$	1,113	$	12.25	$	1,341	$	9.01

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Expense, ~~Income~~Loss before Taxes, Net ~~Income~~Loss and ~~Earnings~~Loss per Share, excluding special items

Our GAAP results in the applicable periods were impacted by credits and charges that ~~are~~were deemed special items. We believe the impacts of these items make our results difficult to compare to prior periods as well as future periods and guidance, and, as a result, we exclude these items from the calculation of certain adjusted results, which are non-GAAP financial measures.

We believe the ~~impacts~~impact of these items distort our overall trends and that our metrics ~~and results~~ are ~~enhanced~~more comparable with the presentation of our results excluding the impact of these items. The table below provides a reconciliation of our GAAP reported amounts to the non-GAAP amounts excluding the ~~impacts~~impact of these items.

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, INCOME BEFORE TAXES, NET INCOME AND EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS
Three Months Ended March 31,
(in millions except per share amounts) 2020
2019
Total operating revenues $ 1,588
$ 1,871

Total operating expenses $ 1,922
$ 1,795
Less: Special items 202
12
Total operating expenses excluding special items $ 1,720
$ 1,783

Operating (loss) income $ (334 ) $ 76
Add back: Special items 202

12
Operating (loss) income excluding special items $ (132 ) $ 88

Operating margin excluding special items (8.3 )% 4.7 %

(Loss) income before income taxes $ (354 ) $ 58
Add back: Special items 202
12
(Loss) income before income taxes excluding special items $ (152 ) $ 70

Pre-tax margin excluding special items (9.5 )% 3.7 %

Net (loss) income $ (268 ) $ 42
Add back: Special items 202
12
Less: Income tax benefit related to special items 50
3
Net (loss) income excluding special items $ (116 ) $ 51

(Loss) Earnings Per Common Share:
Basic $ (0.97 ) $ 0.14
Add back: Special items, net of tax 0.55
0.02
Basic excluding special items $ (0.42 ) $ 0.16

Diluted $ (0.97 ) $ 0.14
Add back: Special items, net of tax 0.55
0.02
Diluted excluding special items $ (0.42 ) $ 0.16


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, LOSS BEFORE TAXES, NET LOSS AND LOSS PER SHARE EXCLUDING SPECIAL ITEMS
	Three Months Ended March 31,
(in millions, except per share amounts)	2021			2020
Total operating revenues	$	733		$	1,588

Total operating expenses	$	1,027		$	1,922
Less: Special items	(289)			202
Total operating expenses excluding special items	$	1,316		$	1,720

Operating loss	$	(294)		$	(334)
Add back: Special items	(289)			202
Operating loss excluding special items	$	(583)		$	(132)

Operating margin excluding special items	(79.6)		%	(8.3)		%

Loss before income taxes	$	(347)		$	(354)
Add back: Special items	(289)			202
Loss before income taxes excluding special items	$	(636)		$	(152)

Pre-tax margin excluding special items	(86.7)		%	(9.5)		%

Net loss	$	(247)		$	(268)
Add back: Special items	(289)			202
Less: Income tax (expense) benefit related to special items	(69)			50
Net loss income excluding special items and gain on equity method investments	$	(467)		$	(116)

Loss Per Common Share:
Basic	$	(0.78)		$	(0.97)
Add back: Special items, net of tax	(0.70)			0.55
Basic excluding special items	$	(1.48)		$	(0.42)

Diluted	$	(0.78)		$	(0.97)
Add back: Special items, net of tax	(0.70)			0.55
Diluted excluding special items and gain on equity method investments	$	(1.48)		$	(0.42)

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Free Cash Flow

The table below reconciles cash provided by operations determined in accordance with GAAP to Free Cash Flow, a non-GAAP financial measure. Management believes that Free Cash Flow is a relevant metric in measuring our financial strength and is useful to investors in assessing our ability to fund future capital commitments and other obligations. Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP.


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW
	Three Months Ended March 31,
(in millions)	2021		2020
Net cash provided by operating activities	$	177	$	124
Less: Capital expenditures	(211)		(314)
Less: Predelivery deposits for flight equipment	(6)		(53)
Free Cash Flow	$	(40)	$	(243)

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW
Three Months Ended March 31,
(in millions) 2020 2019
Net cash provided by operating activities $ 124
$ 420
Less: Capital expenditures (314 ) (101 )
Less: Predelivery deposits for flight equipment (53 ) (63 )
Free Cash Flow $ (243 ) $ 256

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except as described below, there have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our ~~2019~~2020 Form 10-K.

Aircraft Fuel

Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the March 31, ~~2020~~2021 cost per gallon of fuel. Based on projected fuel consumption for the next 12 months, including the impact of our hedging position, such an increase would result in an increase to aircraft fuel expense of approximately ~~$128 million.~~$159 million. As of March 31, ~~2020,~~2021, we had not hedged ~~approximately 26%~~any of our projected fuel requirement for the remainder of 2021.~~2020. All hedge contracts existing at~~ ~~March 31, 2020~~ ~~settle by December 31, 2020.~~

The financial derivative instrument agreements we have with our counterparties may require us to fund all, or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities. The amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts. Refer to Note 8 to our condensed consolidated financial statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information.

Interest

Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. The interest rate is fixed for $2$3.8 billion of our debt and finance lease obligations, with the remaining ~~$1.2~~$1.0 billion having floating interest rates. As of March 31, ~~2020,~~2021, if interest rates were on average 100 basis points higher in ~~2020,~~2021, our annual interest expense would increase by approximately ~~$12~~$10 million. This amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt.

If interest rates were to average 100 basis points lower in ~~2020~~2021 than they were during ~~2019,~~2020, our interest income from cash and investment balances would decrease by approximately $4$1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our ~~cash and cash equivalents~~money market funds and short-term, interest-bearing investment ~~securities balances~~ for the trailing twelve month period.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, or CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, ~~2020~~.2021. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, ~~2020~~.2021.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our controls performed during the quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our ~~business.~~business. Refer to Note 76 to our condensed ~~consolidated~~consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

ITEM 1A. RISK FACTORS

Part I, Item 1A "Risk Factors" of our ~~2019~~2020 Form 10-K, includes a discussion of our risk factors which are incorporated herein. ~~The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K. Except as presented below, there~~There have been no material changes from the risk factors associated with our business previously disclosed in our Form 10-K.

The global pandemic resulting from a novel strain of coronavirus has had an adverse impact that has been material to the Company's business, operating results, financial condition and liquidity, and the duration and spread of the pandemic could result in additional adverse impacts. The outbreak of another disease or similar public health threat in the future could also have an adverse effect on the Company's business, operating results, financial condition and liquidity.

In December 2019, a novel strain of coronavirus ("COVID-19") was reported in Wuhan, China, and the World Health Organization (the "WHO") subsequently declared COVID-19 a "Public Health Emergency of International Concern." On March 13, 2020, the U.S. government declared a national emergency and the U.S. Department of State subsequently issued a global Level 4 "do not travel" advisory advising U.S. citizens to avoid all international travel due to the global impact of COVID-19. The U.S. government has also implemented enhanced screenings, mandatory 14-day quarantine requirements and other travel restrictions in connection with the COVID-19 pandemic, including restrictions on travel from international locations, and many foreign and U.S. state governments instituted similar measures and declared states of emergency.

As of April 15, 2020, approximately 316 million people in at least 42 states, the District of Columbia and Puerto Rico were under instructions to stay home or "shelter in place," and to avoid any non-essential travel. In the United States and other locations around the world, public events, such as conferences, sporting events and concerts, have been canceled, attractions, including theme parks and museums, have been closed, cruise lines have suspended operations and schools and businesses are operating with remote attendance, among other actions.

Other governmental restrictions and regulations in the future in response to COVID-19 could include additional travel restrictions (including restrictions on domestic air travel within the United States), quarantines of additional populations (including our personnel), restrictions on our ability to access our facilities or aircraft or requirements to collect additional passenger data. In addition, governments, non-governmental organizations and entities in the private sector have issued and may continue to issue non-binding advisories or recommendations regarding air travel or other social distancing measures, including limitations on the number of persons that should be present at public gatherings.

The Company began experiencing a significant decline in international and domestic demand related to COVID-19 during the first quarter of 2020, and this reduction in demand has continued through the date of this report. The decline in demand caused a material deterioration in our revenues in the first quarter of 2020, resulting in a first quarter net loss of $268 million. The Company currently expects our results of operations for full-year 2020 to be materially impacted. For planning purposes, the Company has assumed that it is likely demand will remain depressed for the remainder of 2020. In response to decreased demand, the Company cut, relative to 2019 scheduled capacity, approximately 80% of its scheduled capacity for April and May 2020, with similar cuts expected for June 2020. The Company plans to proactively manage capacity until it sees signs of a recovery in demand.

The Company has taken a number of actions in response to decreased demand. In addition to the schedule reductions discussed above, the Company has reduced its planned capital expenditures and reduced operating expenditures for the remainder of 2020 (including by postponing projects deemed non-critical to the Company's operations), suspended share repurchases under its share repurchase program, 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 its existing $550 million revolving credit facility and temporarily grounded certain of its fleet.

The Company continues to focus on reducing expenses and managing its liquidity. The Company currently expects to lower its cash burn from an average of $18 million per day during the second half of March to approximately $10 million per day by May. For this purpose, "cash burn" is defined as net cash from operations, less investing and financing activities. Proceeds from the issuance of new debt (excluding expected aircraft financing), government grants associated with the Payroll

~~Table of Contents~~

Support Program of the CARES Act (defined below) are not included in this figure. We expect to continue to modify our cost management structure, liquidity-raising efforts and capacity as the timing of demand recovery becomes more certain.

On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act 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 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 requirement against 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. The Company also expects to have the ability if approved, through September 30, 2020, to borrow up to approximately $1.1 billion from the U.S. Treasury Department for a term of up to five years pursuant to the Loan Program under the CARES Act. The grants and/or loans under the CARES Act will subject the Company and its business to certain restrictions, including, but not limited to, restrictions on the payment of dividends and the ability to repurchase JetBlue's equity securities, requirements to maintain certain levels of scheduled service, requirements to maintain employment levels through September 30, 2020, requirements to issue warrants for JetBlue common stock to Treasury and certain limitations on executive compensation. The substance and duration of these restrictions will materially affect the Company's operations, and the Company may not be successful in managing these impacts. In particular, limitations on executive compensation, which, depending on the form of aid, could extend up to six years, may impact the Company's ability to attract and retain senior management or attract other key employees during this critical time.

The Company may also take additional actions to improve its financial position, including measures to improve liquidity, such as the issuance of additional unsecured and secured debt securities, equity securities and equity-linked securities, the sale of assets and/or the entry into additional bilateral and syndicated secured and/or unsecured credit facilities. There can be no assurance as to the timing of any such issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all. Any such actions could be conducted in the near term, may be material in nature and could result in significant additional borrowing. The Company's reduction in expenditures, measures to improve liquidity or other strategic actions that the Company may take in the future in response to COVID-19 may not be effective in offsetting decreased demand, and the Company will not be permitted to take certain strategic actions as a result of the CARES Act, which could result in a material adverse effect on the Company's business, operating results and financial condition.

The full extent of the ongoing impact of COVID-19 on the Company's longer-term operational and financial performance will depend on future developments, many of which are outside of our control, including the effectiveness of the mitigation strategies discussed above, the duration and spread of COVID-19 and related travel advisories and restrictions, the impact of COVID-19 on overall long-term demand for air travel, the impact of COVID-19 on the financial health and operations of the Company's business partners and future governmental actions, all of which are highly uncertain and cannot be predicted. The COVID-19 pandemic has had a material impact on the Company, and the continuation of reduced demand could have a material adverse effect on the Company's business, operating results, financial condition and liquidity.

In addition, an outbreak of another disease or similar public health threat, or fear of such an event, that affects travel demand, travel behavior or travel restrictions could have a material adverse impact on the Company's business, financial condition and operating results. Outbreaks of other diseases could also result in increased government restrictions and regulation, such as those actions described above or otherwise, which could adversely affect our operations.

Even after the COVID-19 pandemic has moderated and the enhanced screenings, quarantine requirements and travel restrictions have eased, we may continue to experience similar adverse effects to our businesses, consolidated results of operations, financial position and cash flows resulting from a recessionary economic environment that may persist. The impact that the COVID-19 pandemic will have on our businesses, consolidated results of operations, financial position and cash flows could exacerbate the risks identified in “Item 1A. Risk Factors” in our Annual Report on Form 10-K.

~~Table of Contents~~

The Company has a significant amount of financial leverage from fixed obligations and intends to seek material amounts of additional financial liquidity in the short-term, and insufficient liquidity may have a material adverse effect on the Company's financial condition and business.

The Company has a significant amount of financial leverage from fixed obligations, including aircraft lease and debt financings, leases of airport property, secured loan facilities and other facilities, and other material cash obligations. In addition, the Company has substantial noncancelable commitments for capital expenditures, including for the acquisition of new aircraft and related spare engines.

In addition, in response to the travel restrictions, decreased demand and other effects the COVID-19 pandemic has had and is expected to have on the Company's business, the Company currently intends to continue to seek material amounts of additional financial liquidity in the short-term, which may include the issuance of additional unsecured or secured debt securities, equity securities and equity-linked securities, the sale of assets as well as additional bilateral and syndicated secured and/or unsecured credit facilities, among other items. There can be no assurance as to the timing of any such issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all. In addition, the Company has received financial assistance that is available to the airline industry under the CARES Act, which financial assistance subjects the Company and its business to certain restrictions, including, but not limited to, restrictions on the payment of dividends and the ability to repurchase JetBlue’s equity securities, requirements to maintain certain levels of scheduled service, requirements to maintain employment levels through September 30, 2020, requirements to issue warrants for JetBlue common stock to the U.S. Treasury and certain limitations on executive compensation.

Although the Company's cash flows from operations and its available capital, including the proceeds from financing transactions, have been sufficient to meet its obligations and commitments to date, the Company's liquidity has been, and may in the future be, negatively affected by the risk factors discussed in the Company's 2019 Form 10-K, as updated by this report, including risks related to future results arising from the COVID-19 pandemic. If the Company's liquidity is materially diminished, the Company might not be able to timely pay its leases and debts or comply with certain operating and financial covenants under its financing and credit card processing agreements or with other material provisions of its contractual obligations. Moreover, as a result of the Company's recent financing activities in response to the COVID-19 pandemic, the number of financings with respect to which such covenants and provisions apply has increased, thereby subjecting the Company to more substantial risk of cross-default and cross-acceleration in the event of breach, and additional covenants and provisions could become binding on the Company as it continues to seek additional liquidity. In addition, the Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of the Company's credit card processing agreements, the financial institutions in certain circumstances have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which the Company has not yet provided the air transportation. Such financial institutions may require cash or other collateral reserves to be established or withholding of payments related to receivables to be collected, including if the Company does not maintain certain minimum levels of unrestricted cash, cash equivalents and short-term investments. In light of the affect COVID-19 is having on demand and, in turn, capacity, the Company has seen an increase in demand from consumers for refunds on their tickets, and we anticipate this will continue to be the case for the near future. Refunds lower our liquidity and put us at risk of triggering liquidity covenants in these processing agreements and, in doing so, could force us to post cash collateral with the credit card companies for advance ticket sales. The Company also maintains certain insurance- and surety-related agreements under which counterparties may require collateral.

The Company's substantial level of indebtedness, particularly following the additional liquidity transactions completed and contemplated in response to the impacts of COVID-19, and non-investment grade credit rating, as well as market conditions and the availability of assets as collateral for loans or other indebtedness, which has been reduced as a result of the $1.6 billion in secured term loan facilities entered into since the beginning of fiscal year 2020 and may be further reduced as the Company continues to seek material amounts of additional financial liquidity, together with the effect the COVID-19 pandemic has had on the global economy generally and the air transportation industry specifically, may make it difficult for the Company to raise additional capital if needed to meet its liquidity needs on acceptable terms, or at all.

See Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report for additional information regarding the Company's liquidity as of March 31, 2020.

COVID-19 has materially disrupted our strategic operating plans in the near-term, and there are risks to our business, operating results and financial condition associated with executing our strategic operating plans in the long-term. In recent years, we have announced several strategic operating plans, including several revenue-generating initiatives and plans to optimize our revenue, such as our plans to add capacity, including international expansion and new or increased service to mid-

~~Table of Contents~~

size airports, initiatives and plans to optimize and control our costs and opportunities to enhance our segmentation and improve the customer experience at all points in air travel. In developing our strategic operating plans, we make certain assumptions, including, but not limited to, those related to customer demand, competition, market consolidation, the availability of aircraft and the global economy. Actual economic, market and other conditions have been and may continue to be different from our assumptions. In 2020, demand has been, and is expected to continue to be, significantly impacted by COVID-19, which has materially disrupted the timely execution of our strategic operating plans, including plans to add capacity in 2020. If we do not successfully execute or adjust our strategic operating plans in the long-term, or if actual results continue to vary significantly from our prior assumptions or vary significantly from our future assumptions, our business, operating results and financial condition could be materially and adversely impacted.

The Company may never realize the full value of its intangible assets or its long-lived assets causing it to record impairments that may negatively affect its financial condition and operating results.

In accordance with applicable accounting standards, the Company is required to test its indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment. In addition, the Company is required to test certain of its other assets for impairment where there is any indication that an asset may be impaired.

The Company may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, route authorities, airport slots and frequent flyer database, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties. For example, in the first quarter of 2020, the Company recorded impairment charges of $202 million associated with its E190 fleet due to COVID-19. The Company can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period, and the risk of future material impairments has been significantly heightened as result of the effects of the COVID-19 pandemic on our flight schedules and business. The value of the Company's aircraft could also be impacted in future periods by changes in supply and demand for these aircraft. Such changes in supply and demand for certain aircraft types could result from the grounding of aircraft. A further impairment loss could have a material adverse effect on the Company's financial condition and operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 19, 2019, the Board of Directors approved a share repurchase program, or the 2019 Authorization, of up to $800 million worth of common stock beginning on October 1, 2019 and ending no later than December 31, 2021. Our share repurchase programs include authorization for repurchases in open market transactions pursuant to Rules 10b-18 and/or 10b5-1 of the Exchange Act, and/or one or more privately-negotiated accelerated stock repurchase transactions. The timing, price, and volume of any repurchases will be based on market conditions and other relevant factors. In accordance with the ~~PSP~~Payroll Support Program Agreement, the Payroll Support Program Extension Agreement, and the Loan Agreement with the Treasury, we are prohibited from making any share ~~repurchases.~~repurchases through March 31, 2022. We have ~~accordingly~~ suspended our share repurchase ~~program.~~program as of March 31, 2020. No shares were repurchased during the three months ended March 31, 2021. The acquisition of treasury stock reflected on our condensed consolidated statement of cash flows for the three months ended March 31, 2021 represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period.

In consideration for the Payroll Support ~~Payment, on April 23, 2020,~~2 Payments, during the three months ended March 31, 2021 we issued warrants to purchase approximately ~~2.6~~0.8 million shares of common stock to the Treasury at an exercise price of ~~$9.50~~$14.43 per share. See Note 23 to our condensed consolidated financial statements.

~~During~~

ITEM 5. OTHER INFORMATION

On April 29, 2021, the ~~three months ended March 31,~~Board approved Performance-Contingent Executive Retention Awards to certain members of the Company’s senior leadership team, including the named executive officers (the “Awards”). In approving the Awards, the Compensation Committee of the Board, in consultation with its advisors, determined that the Awards were appropriate and necessary to help ensure key leaders of the Company with deep airline industry expertise continue to steward the Company during the unprecedented economic disruption caused by the COVID-19 pandemic. The Awards were designed to retain and motivate our key leaders and to further align their interests with those of our shareholders. When setting the terms of the Awards, the Compensation Committee and the Board considered that each recipient’s pay package was substantially reduced in 2020 through a combination of base salary reductions, the ~~following shares were repurchased~~suspension of performance stock unit awards for the 2020-2022 performance cycle (with no substitution awards or other adjustments made to replace their value), and the 0% Corporate Performance Factor payout under the annual cash incentive award program ~~(in millions):~~

Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 2020 —
—
$ 640
February 2020 8.1

^{(1) (2)}
8.1
$ 480
March 2020 4.9

⁽²⁾
4.9
$ 480
Total 13.0
13.0

~~(1) On November 21, 2019, JetBlue entered into an ASR paying $160 million for an initial delivery of 6.9 million shares. The term~~(resulting in awards being paid out significantly below target), notwithstanding their extraordinary leadership during these unprecedented times. In addition, the Compensation Committee and the Board considered the compensation and retention challenges expected over the next several years due to continued uncertainty as to the long-term effects of the ~~ASR concluded~~COVID-19 pandemic on ~~February 21, 2020~~the industry coupled with ~~delivery~~certain Government Support (as defined below) limitations affecting the Company’s ability to provide market-competitive compensation opportunities. These concerns are particularly acute for the Company given these crewmembers’ expertise and demonstrated leadership, which are, to varying degrees, valued and transferrable to other companies both within – and outside – the airline industry.

The receipt of ~~1.5 million additional shares~~each Award is subject to ~~JetBlue on February 25, 2020. A total~~certain terms and performance conditions, including (i) the Company’s full repayment of ~~8.4 million shares, at an average price~~all governmental loans received pursuant to the CARES Act and the expiration of ~~$19.03 per share, were repurchased~~all restrictions related to the Payroll Support Program pursuant to the CARES Act, the Payroll Support Program Extension under the ~~agreement.~~Consolidated Appropriations Act and any other subsequent government support (collectively, the “Government Support”); and (ii) the Company’s achievement of two successive quarters of positive EBITDA. In addition, the recipient must remain employed with or performing services for the Company on the payment date, provided, if a recipient experiences a termination without cause or for good reason prior to the payment date, the recipient will receive the Award on the payment date. For all other terminations of service prior to the payment date, the Board (or Compensation Committee if delegated by the Board), will determine continued eligibility for the Award.

~~(2) On February 24, 2020, JetBlue entered into an ASR paying $160 million for an initial delivery of 6.6 million shares. The term~~Upon satisfaction of the ~~ASR concluded on March 16, 2020 with delivery~~terms and conditions of ~~4.9 million additional shares~~the Awards each of the recipients will receive an Award equivalent to ~~JetBlue on March 18, 2020. A total~~a pre-established multiple of ~~11.5 million shares, at an average price~~their respective base salaries as of ~~$13.91 per share, were repurchased under~~April 15, 2021 as follows: Robin Hayes (3.36x), Joanna Geraghty (2.23x), Steve Priest (2.13x), and Brandon Nelson (2.09x). Payments pursuant to the ~~agreement.~~

Awards, if any, will be made in cash or

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PART II. OTHER INFORMATION

fully vested shares of the Company’s common stock as determined by the Board (or Compensation Committee if delegated by the Board)in its sole discretion. No portion of the Award may be paid earlier than 30 days following the lapse of both the Government Support restrictions and achievement of the performance condition.

The foregoing summary is not complete and is qualified in its entirety by reference to the Form of Performance-Contingent Executive Retention Award Agreement, filed herewith as Exhibit 10.4 and incorporated by reference herein.

ITEM 6. EXHIBITS

See accompanying Exhibit Index included after the signature page of this Report for a list of the exhibits filed or furnished with this Report.

Table of Contents

EXHIBIT INDEX


Exhibit Number						Exhibit
4.1*						Indenture, dated March 25, 2021, between JetBlue Airways Corporation, as issuer, and Wilmington Trust, National Association, as trustee
4.2*						Form of 0.50% Convertible Senior Note due 2026, dated March 25, 2021 (included as Exhibit A to Exhibit 4.1)
4.3						Warrant Agreement, dated as of January 15, 2021, between JetBlue Airways Corporation and the United States Department of the Treasury—incorporated by reference to Exhibit 4.16 to our Annual Report on Form 10-K for the year ended December 31, 2020
4.4						Form of Warrant (included as Annex B to Exhibit 4.3)
10.1						Payroll Support Program Extension Agreement, dated as of January 15, 2021, between JetBlue Airways Corporation and the United States Department of the Treasury—incorporated by reference to Exhibit 10.57 to our Annual Report on Form 10-K for the year ended December 31, 2020
10.2						Promissory Note, dated as of January 15, 2021 issued by JetBlue Airways Corporation in the name of the United States Department of the Treasury—incorporated by reference to Exhibit 10.58 to our Annual Report on Form 10-K for the year ended December 31, 2020
10.3*						Letter of Amendments to Loan and Guarantee Agreement, dated as of January 15, 2021, between JetBlue Airways Corporation and the United States Department of the Treasury
10.4†						Form of Performance-Contingent Executive Retention Award Agreement
31.1*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32**						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Labels Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)
†						Compensatory plans in which the directors and executive officers of JetBlue participate.

*						Filed herewith.
**						Furnished herewith.

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JETBLUE AIRWAYS CORPORATION

~~(Registrant)~~

~~Date:~~

~~May 8, 2020~~

~~By:~~

~~/s/ Alexander Chatkewitz~~

~~Vice President, Controller, and~~

~~Chief Accounting Officer~~

~~(Principal Accounting Officer)~~

~~Table of Contents~~

~~EXHIBIT INDEX~~

~~Exhibit Number~~

~~Exhibit~~

(Registrant)

~~4.1~~

~~Warrant Agreement, dated as of April 23, 2020, between JetBlue Airways Corporation and the United States Department of the Treasury~~

~~4.2~~Date:

~~Form of Warrant (incorporated by reference to Annex B to Exhibit 4.2)~~April 30, 2021

By:

/s/ Alexander Chatkewitz

10.1***

Second Amendment, dated February 20, 2020, to the Amended and Restated Credit and Guaranty Agreement, dated as of April 6, 2017, among JetBlue Airways Corporation, as Borrower, the Subsidiaries of the Borrower party thereto as Guarantors, the Lenders party thereto and Citibank, N.A., as Administrative Agent

~~10.2~~

Delayed Draw Term Loan Credit Agreement dated as of March 13, 2020 among JetBlue Airways Corporation, as Borrower, the subsidiaries of the Borrower party hereto, as Guarantors, the Lenders party hereto, and Morgan Stanley Senior Funding, Inc., as Administrative Agent—incorporated by reference to Exhibit 10.1 to our Current Report on From 8-K dated March 13, 2020

~~10.3~~

~~Payroll Support Program Agreement, dated as of April 23, 2020, between JetBlue Airways Corporation and the United States Department of the Treasury~~

~~10.4~~

~~Promissory Note, dated as of April 23, 2020, issued by JetBlue Airways Corporation in the name of the United States of the Treasury~~

~~10.41(b)~~

~~Amendment No. 2 to the Employment Agreement between JetBlue Airways Corporation~~Vice President, Controller, and ~~Robin Hayes, dated February 13, 2020—incorporated by reference to Exhibit 10.41(B) to our Current Report on From 8-K dated February 13, 2020~~

31.1*

~~Rule 13a-14(a)/15d-14(a) Certification of the~~
Chief ~~Executive~~Accounting Officer
(Principal Accounting Officer)

31.2*

~~Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer~~

32**

~~Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~101.INS~~

~~XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~

~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~

~~XBRL Taxonomy Extension Labels Linkbase Document~~

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~104~~

~~Cover Page Interactive Data File (embedded within the Inline XBRL document)~~

~~Filed herewith.~~

~~Furnished herewith.~~

~~***~~

Certain confidential information contained in this exhibit, marked by [***], has been omitted because it (i) is not material and (ii) would likely cause competitive harm to the Company if it were to be publicly disclosed.

4642


	Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(247)	$	(268)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	(97)		(83)
Impairment of long-lived assets	0		202
Depreciation	117		127
Amortization	8		12
Stock-based compensation	8		9
Changes in certain operating assets and liabilities	304		129
Deferred federal payroll support program grants	87		0
Other, net	(3)		(4)
Net cash provided by operating activities	177		124
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(211)		(314)
Predelivery deposits for flight equipment	(6)		(53)


Purchase of available-for-sale securities	0		(207)
Proceeds from the sale of available-for-sale securities	270		395

Other, net	(1)		0
Net cash provided by (used in) investing activities	52		(179)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	855		0
Proceeds from short-term borrowings	0		983


Proceeds from issuance of stock warrants	8		0
Repayment of long-term debt and finance lease obligations	(644)		(102)

Acquisition of treasury stock	(6)		(166)
Other, net	(1)		(1)
Net cash provided by financing activities	212		714
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	441		659
Cash, cash equivalents and restricted cash at beginning of period	1,969		1,018
Cash, cash equivalents and restricted cash at end of period(1)	$	2,410	$	1,677

SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest (net of amount capitalized)	$	37	$	18
Cash payments for income taxes (net of refunds)	0		1

NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for operating lease liabilities	$	0	$	2

(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

	March 31, 2021		March 31, 2020
Cash and cash equivalents	$	2,358	$	1,618

Restricted cash	52		59
Total cash, cash equivalents and restricted cash	$	2,410	$	1,677



	~~Jet fuel call spread option agreements~~
~~Second Quarter 2020~~	29	%
~~Third Quarter 2020~~	25	%
~~Fourth Quarter 2020~~	25	%



	March 31, 2020		December 31, 2019
Fuel derivatives
Asset fair value recorded in prepaid expense and other⁽¹⁾	$	1	$	8
Longest remaining term (months)	9		6
Hedged volume (barrels, in thousands)	3,698		2,112
Estimated amount of existing losses (gains) expected to be reclassified into earnings in the next 12 months	$	6	$	(2	)


	Aircraft Fuel Derivatives(1)(2)		Total
Balance of accumulated income, at December 31, 2020	$	0	$	0
Reclassifications into earnings, net of deferred taxes of $0	0		0
Change in fair value, net of deferred taxes of $0	0		0
Balance of accumulated income, at March 31, 2021	$	0	$	0

Balance of accumulated income, at December 31, 2019	$	2	$	2
Reclassifications into earnings, net of deferred taxes $(1)	3		3
Change in fair value, net of deferred taxes of $4	(11)		(11)
Balance of accumulated (loss), at March 31, 2020	$	(6)	$	(6)


(in millions; per ASM data in cents; percent changes based on unrounded numbers)	Three Months Ended March 31,				Year-over-Year Change				Cents per ASM
	2021		2020		$		%		2021	2020	% Change
Aircraft fuel and related taxes	$	193	$	365	$	(172)	(47.0)	%	2.13	2.45	(13.2)	%
Salaries, wages and benefits	521		601		(80)		(13.2)		5.74	4.04	42.2
Landing fees and other rents	115		112		3		3.0		1.26	0.75	68.8
Depreciation and amortization	125		139		(14)		(10.4)		1.37	0.93	46.8
Aircraft rent	25		21		4		14.9		0.27	0.14	88.2
Sales and marketing	23		53		(30)		(57.2)		0.25	0.35	(29.8)
Maintenance, materials and repairs	104		160		(56)		(34.9)		1.15	1.07	6.7
Other operating expenses	210		269		(59)		(22.1)		2.31	1.82	27.7
Special items	(289)		202		(491)		(242.6)		(3.18)	1.36	(333.6)
Total operating expenses	$	1,027	$	1,922	$	(895)	(46.6)	%	11.30	12.91	(12.5)	%

Total operating expenses excluding special items(1)	$	1,316	$	1,720	$	(404)	(23.5)	%	14.48	11.55	25.3	%


	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Balance at December 31, 2020	474	$	5	158	$	(1,981)	$	2,959	$	2,968	$	0	$	3,951
Net loss	—	—		—	—		—		(247)		—		(247)
Other comprehensive income	—	—		—	—		—		—		0		0
Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		8		—		—		8
Warrants issued under federal support programs	—	—		—	—		8		—		—		8
Balance at March 31, 2021	475	$	5	158	$	(1,987)	$	2,975	$	2,721	$	0	$	3,714

	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	—	—		—	—		—		(268)		—		(268)
Other comprehensive loss	—	—		—	—		—		—		(8)		(8)
Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		9		—		—		9
Shares repurchased	—	—		13	(192)		32		—		—		(160)
Balance at March 31, 2020	428	$	4	158	$	(1,980)	$	2,294	$	4,054	$	(6)	$	4,366



Balance at December 31, 2019	$	661
TrueBlue^® points redeemed	(103		)
TrueBlue^® points earned and sold	98
Balance at March 31, 2020	$	656

Balance at December 31, 2018	$	580
TrueBlue^® points redeemed	(90		)
TrueBlue^® points earned and sold	104
Balance at March 31, 2019	$	594


	March 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	1,240	$	270	$	0	$	1,510
Available-for-sale investment securities	0		867		0		867



	Aircraft Fuel Derivatives⁽¹⁾⁽²⁾			Total
Balance of accumulated income, at December 31, 2019	$	2		$	2
Reclassifications into earnings, net of tax benefit $1	3			3
Change in fair value, net of tax benefit $4	(11		)	(11		)
Balance of accumulated (loss), at March 31, 2020	$	(6	)	$	(6	)

Balance of accumulated (loss), at December 31, 2018	$	(3	)	$	(3	)
Reclassifications into earnings, net of tax benefit of $0	2			2
Change in fair value, net of tax benefit of $0	—			—
Balance of accumulated (loss), at March 31, 2019	$	(1	)	$	(1	)


(in millions)
Selected Balance Sheet Data:	March 31, 2021	December 31, 2020	$ Change	% Change
ASSETS
Cash and cash equivalents	2,358	1,918	440	22.9	%
Investment securities	867	1,135	(268)	(23.6)	%
Receivables, less allowance (2021-$2; 2020-$2)	153	98	55	56.2	%
Flight equipment	10,466	10,256	210	2.0	%
LIABILITIES
Air traffic liability	1,405	1,122	283	25.3	%
Other accrued liabilities	363	215	148	68.9	%


	Payments due in															Payments due in
	Total		2020		2021		2022		2023		2024		Thereafter			Total		2021		2022		2023		2024		2025		Thereafter
Debt and finance lease obligations⁽¹⁾	$	3.6	$	0.3	$	1.4	$	0.4	$	0.3	$	0.2	$	1.0	Debt and finance lease obligations(1)	$	6.1	$	0.5	$	0.6	$	0.8	$	1.1	$	0.4	$	2.7
Operating lease obligations	1.1		0.1		0.1		0.1		0.1		0.1		0.6		Operating lease obligations	1.1		0.1		0.2		0.1		0.1		0.1		0.5
Flight equipment purchase obligations⁽²⁾	7.4		0.9		1.4		1.3		1.7		1.6		0.5		Flight equipment purchase obligations(2)	7.7		0.7		0.8		1.6		1.8		1.2		1.6
Other obligations⁽³⁾	2.5		0.2		0.2		0.3		0.4		0.4		1.0		Other obligations(3)	2.6		0.3		0.4		0.4		0.4		0.4		0.7
Total	$	14.6	$	1.5	$	3.1	$	2.1	$	2.5	$	2.3	$	3.1	Total	$	17.5	$	1.6	$	2.0	$	2.9	$	3.4	$	2.1	$	5.5



Year	Airbus A321neo	Airbus A220	Total
2019	7	—	7
2020	11	1	12
2021	17	6	23
2022	15	8	23
2023	14	19	33
2024	12	22	34
2025	—	12	12
2026	—	2	2
Total	76	70	146



NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, INCOME BEFORE TAXES, NET INCOME AND EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS
	Three Months Ended March 31,
(in millions except per share amounts)	2020			2019
Total operating revenues	$	1,588		$	1,871

Total operating expenses	$	1,922		$	1,795
Less: Special items	202			12
Total operating expenses excluding special items	$	1,720		$	1,783

Operating (loss) income	$	(334	)	$	76
Add back: Special items	202			12
Operating (loss) income excluding special items	$	(132	)	$	88

Operating margin excluding special items	(8.3		)%	4.7		%

(Loss) income before income taxes	$	(354	)	$	58
Add back: Special items	202			12
(Loss) income before income taxes excluding special items	$	(152	)	$	70

Pre-tax margin excluding special items	(9.5		)%	3.7		%

Net (loss) income	$	(268	)	$	42
Add back: Special items	202			12
Less: Income tax benefit related to special items	50			3
Net (loss) income excluding special items	$	(116	)	$	51

(Loss) Earnings Per Common Share:
Basic	$	(0.97	)	$	0.14
Add back: Special items, net of tax	0.55			0.02
Basic excluding special items	$	(0.42	)	$	0.16

Diluted	$	(0.97	)	$	0.14
Add back: Special items, net of tax	0.55			0.02
Diluted excluding special items	$	(0.42	)	$	0.16



Period	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 2020	—		—	$	640
February 2020	8.1	^{(1) (2)}	8.1	$	480
March 2020	4.9	⁽²⁾	4.9	$	480
Total	13.0		13.0