UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~March 31,~~September 30, 2022

☐ 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

(Exact name of registrant as specified in its charter)


Delaware			87-0617894
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

27-01 Queens Plaza North	Long Island City	New York	11101
(Address of principal executive offices)			(Zip Code)

(718) 286-7900

(Registrant’s telephone number, including area code)

~~N/A~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	JBLU	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~March 31,~~September 30, 2022, there were ~~320,789,028~~323,877,614 shares outstanding of the registrant’s common stock, par value $0.01.

Table of Contents

JETBLUE AIRWAYS CORPORATION

FORM 10-Q

INDEX


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			3
Consolidated Balance Sheets - ~~March 31,~~September 30, 2022 and December 31, 2021			3
Consolidated Statements of Operations - Three and Nine Months Ended ~~March 31,~~September 30 , 2022 and 2021			5
Consolidated Statements of Comprehensive ~~Loss~~Income - Three and Nine Months Ended ~~March 31,~~September 30 , 2022 and 2021			6
Condensed Consolidated Statements of Cash Flows - ~~Three~~Nine Months Ended ~~March 31,~~September 30 , 2022 and 2021			7
Consolidated Statements of Stockholders' Equity - Three and Nine Months Ended ~~March 31,~~September 30 , 2022 and 2021			98
Notes to Condensed Consolidated Financial Statements			109
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2227
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4046
Item 4. Controls and Procedures			4046

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4147
Item 1A. Risk Factors			4147
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4147
Item 5. Other Information			4147
Item 6. Exhibits			4247

SIGNATURE			4449

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, 2022		December 31, 2021			September 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,834	$	2,018	Cash and cash equivalents	$	1,401	$	2,018
Investment securities	Investment securities	950		824		Investment securities	692		824
Receivables, less allowance (2022-$3; 2021-$3)	Receivables, less allowance (2022-$3; 2021-$3)	248		207		Receivables, less allowance (2022-$3; 2021-$3)	298		207
Inventories, less allowance (2022-$25; 2021-$24)		68		74
Inventories, less allowance (2022-$27; 2021-$24)						Inventories, less allowance (2022-$27; 2021-$24)	79		74
Prepaid expenses and other	Prepaid expenses and other	172		124		Prepaid expenses and other	141		124
Total current assets	Total current assets	3,272		3,247		Total current assets	2,611		3,247
PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT					PROPERTY AND EQUIPMENT
Flight equipment	Flight equipment	11,265		11,161		Flight equipment	11,579		11,161
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	369		337		Predelivery deposits for flight equipment	398		337
Total flight equipment and predelivery deposits, gross	Total flight equipment and predelivery deposits, gross	11,634		11,498		Total flight equipment and predelivery deposits, gross	11,977		11,498
Less accumulated depreciation	Less accumulated depreciation	3,324		3,227		Less accumulated depreciation	3,532		3,227
Total flight equipment and predelivery deposits, net	Total flight equipment and predelivery deposits, net	8,310		8,271		Total flight equipment and predelivery deposits, net	8,445		8,271
Other property and equipment	Other property and equipment	1,228		1,205		Other property and equipment	1,303		1,205
Less accumulated depreciation	Less accumulated depreciation	681		662		Less accumulated depreciation	711		662
Total other property and equipment, net	Total other property and equipment, net	547		543		Total other property and equipment, net	592		543
Total property and equipment, net	Total property and equipment, net	8,857		8,814		Total property and equipment, net	9,037		8,814
OPERATING LEASE ASSETS	OPERATING LEASE ASSETS	767		729		OPERATING LEASE ASSETS	713		729
OTHER ASSETS	OTHER ASSETS					OTHER ASSETS
Investment securities	Investment securities	110		39		Investment securities	175		39
Restricted cash	Restricted cash	67		59		Restricted cash	83		59
Intangible assets, less accumulated amortization (2022-$417; 2021-$405)		274		284
Intangible assets, less accumulated amortization (2022-$443; 2021-$405)						Intangible assets, less accumulated amortization (2022-$443; 2021-$405)	258		284
Other	Other	456		470		Other	453		470
Total other assets	Total other assets	907		852		Total other assets	969		852
TOTAL ASSETS	TOTAL ASSETS	$	13,803	$	13,642	TOTAL ASSETS	$	13,330	$	13,642

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, 2022 December 31, 2021
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 624 $ 499
Air traffic liability 1,939 1,618
Accrued salaries, wages and benefits 478 480
Other accrued liabilities 496 359
Current operating lease liabilities 108 106
Current maturities of long-term debt and finance lease obligations 381 355
Total current liabilities 4,026 3,417
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS 3,545 3,651
LONG-TERM OPERATING LEASE LIABILITIES 726 690
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes 702 843
Air traffic liability - non-current 655 640
Other 551 552
Total deferred taxes and other liabilities 1,908 2,035
COMMITMENTS AND CONTINGENCIES (Note 6) 0 0
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued — —
Common stock, $0.01 par value; 900 shares authorized, 479 and 478 shares issued and 321 and 320 shares outstanding at March 31, 2022 and December 31, 2021, respectively 5 5
Treasury stock, at cost; 158 and 158 shares at March 31, 2022 and December 31, 2021, respectively (1,995) (1,989)
Additional paid-in capital 3,058 3,047
Retained earnings 2,531 2,786
Accumulated other comprehensive (loss) (1) —
Total stockholders’ equity 3,598 3,849
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 13,803 $ 13,642


	September 30, 2022		December 31, 2021
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	600	$	499
Air traffic liability	1,745		1,618
Accrued salaries, wages and benefits	510		480
Other accrued liabilities	421		359
Current operating lease liabilities	103		106
Current maturities of long-term debt and finance lease obligations	524		355
Total current liabilities	3,903		3,417
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,235		3,651
LONG-TERM OPERATING LEASE LIABILITIES	686		690
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes	790		843
Air traffic liability - non-current	702		640
Other	507		552
Total deferred taxes and other liabilities	1,999		2,035
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued	—		—
Common stock, $0.01 par value; 900 shares authorized, 483 and 478 shares issued and 324 and 320 shares outstanding at September 30, 2022 and December 31, 2021, respectively	5		5
Treasury stock, at cost; 159 and 158 shares at September 30, 2022 and December 31, 2021, respectively	(1,995)		(1,989)
Additional paid-in capital	3,102		3,047
Retained earnings	2,400		2,786
Accumulated other comprehensive (loss)	(5)		—
Total stockholders’ equity	3,507		3,849
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,330	$	13,642

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021			2022		2021		2022		2021
OPERATING REVENUES	OPERATING REVENUES					OPERATING REVENUES
Passenger	Passenger	$	1,603	$	670	Passenger	$	2,415	$	1,856	$	6,319	$	3,913
Other	Other	133		63		Other	147		116		424		290
Total operating revenues	Total operating revenues	1,736		733		Total operating revenues	2,562		1,972		6,743		4,203
OPERATING EXPENSES	OPERATING EXPENSES					OPERATING EXPENSES
Aircraft fuel and related taxes	Aircraft fuel and related taxes	571		193		Aircraft fuel and related taxes	825		443		2,305		973
Salaries, wages and benefits	Salaries, wages and benefits	688		521		Salaries, wages and benefits	675		620		2,058		1,718
Landing fees and other rents	Landing fees and other rents	132		115		Landing fees and other rents	131		182		412		470
Depreciation and amortization	Depreciation and amortization	143		125		Depreciation and amortization	147		140		435		398
Aircraft rent	Aircraft rent	26		25		Aircraft rent	30		25		83		76
Sales and marketing	Sales and marketing	57		23		Sales and marketing	81		60		216		130
Maintenance, materials and repairs	Maintenance, materials and repairs	152		104		Maintenance, materials and repairs	178		205		492		472
Other operating expenses	Other operating expenses	334		210		Other operating expenses	343		297		1,026		768
Special items	Special items	—		(289)		Special items	13		(186)		57		(841)
Total operating expenses	Total operating expenses	2,103		1,027		Total operating expenses	2,423		1,786		7,084		4,164
OPERATING LOSS		(367)		(294)
OTHER INCOME (EXPENSE)
OPERATING INCOME (LOSS)						OPERATING INCOME (LOSS)	139		186		(341)		39
OTHER (EXPENSE) INCOME						OTHER (EXPENSE) INCOME
Interest expense	Interest expense	(37)		(58)		Interest expense	(44)		(42)		(121)		(153)
Interest income	Interest income	4		4		Interest income	11		4		24		12
Gain on investments, net		2		4
Gain (loss) on investments, net						Gain (loss) on investments, net	—		54		(4)		57
Other	Other	—		(3)		Other	(1)		(12)		(1)		(55)
Total other income (expense)		(31)		(53)
LOSS BEFORE INCOME TAXES		(398)		(347)
Income tax benefit		(143)		(100)
NET LOSS		$	(255)	$	(247)
Total other (expense) income						Total other (expense) income	(34)		4		(102)		(139)
INCOME (LOSS) BEFORE INCOME TAXES						INCOME (LOSS) BEFORE INCOME TAXES	105		190		(443)		(100)
Income tax expense (benefit)						Income tax expense (benefit)	48		60		(57)		(47)
NET INCOME (LOSS)						NET INCOME (LOSS)	$	57	$	130	$	(386)	$	(53)

LOSS PER COMMON SHARE:
EARNINGS (LOSS) PER COMMON SHARE:						EARNINGS (LOSS) PER COMMON SHARE:
Basic	Basic	$	(0.79)	$	(0.78)	Basic	$	0.18	$	0.41	$	(1.20)	$	(0.17)
Diluted	Diluted	$	(0.79)	$	(0.78)	Diluted	$	0.18	$	0.40	$	(1.20)	$	(0.17)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(unaudited, in millions)

Three Months Ended March 31,
2022 2021
NET LOSS $ (255) $ (247)
Changes in fair value of available-for-sale securities, net of reclassifications into earnings, net of deferred taxes of $0 and $0 in 2022 and 2021, respectively (1) —
Total other comprehensive loss (1) —
COMPREHENSIVE LOSS $ (256) $ (247)


	Three Months Ended September 30,
	2022		2021
NET INCOME	$	57	$	130
Changes in fair value of available-for-sale securities and derivative instruments, net of reclassifications into earnings, net of deferred taxes of $2 and $0 in 2022 and 2021, respectively.	(3)		—
Total other comprehensive (loss)	(3)		—
COMPREHENSIVE INCOME	$	54	$	130


	Nine Months Ended September 30,
	2022		2021
NET (LOSS)	$	(386)	$	(53)
Changes in fair value of available-for-sale securities and derivative instruments, net of reclassifications into earnings, net of deferred taxes of $2 and $0 in 2022 and 2021, respectively.	(5)		—
Total other comprehensive (loss)	(5)		—
COMPREHENSIVE (LOSS)	$	(391)	$	(53)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(255)	$	(247)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net (loss)						Net (loss)	$	(386)	$	(53)
Adjustments to reconcile net (loss) to net cash provided by operating activities:						Adjustments to reconcile net (loss) to net cash provided by operating activities:
Deferred income taxes	Deferred income taxes	(141)		(97)		Deferred income taxes	(51)		(40)

Depreciation	Depreciation	130		117		Depreciation	396		365
Amortization	Amortization	13		8		Amortization	39		33
Impairment of long-lived asset						Impairment of long-lived asset	5		—
Stock-based compensation	Stock-based compensation	11		8		Stock-based compensation	25		23
Changes in certain operating assets and liabilities	Changes in certain operating assets and liabilities	499		304		Changes in certain operating assets and liabilities	300		1,438
Deferred federal payroll support program grants		—		87
Other, net	Other, net	(10)		(3)		Other, net	(7)		(11)
Net cash provided by operating activities	Net cash provided by operating activities	247		177		Net cash provided by operating activities	321		1,755
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(85)		(211)		Capital expenditures	(483)		(770)
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	(49)		(6)		Predelivery deposits for flight equipment	(116)		(33)
Purchase of held-to-maturity investments		(63)		—

Purchase of held to maturity investments						Purchase of held to maturity investments	(142)		—
Purchase of available-for-sale securities	Purchase of available-for-sale securities	(290)		—		Purchase of available-for-sale securities	(470)		(520)
Proceeds from the sale/maturity of held to maturity investments						Proceeds from the sale/maturity of held to maturity investments	2		—
Proceeds from the sale of available-for-sale securities	Proceeds from the sale of available-for-sale securities	153		270		Proceeds from the sale of available-for-sale securities	589		590
Payment for acquisition						Payment for acquisition	(25)		—

Other, net	Other, net	—		(1)		Other, net	(2)		(2)
Net cash provided by (used in) investing activities		(334)		52
Net cash used in investing activities						Net cash used in investing activities	(647)		(735)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	—		855		Proceeds from issuance of long-term debt	—		1,010

Proceeds from issuance of common stock						Proceeds from issuance of common stock	29		22
Proceeds from issuance of stock warrants	Proceeds from issuance of stock warrants	—		8		Proceeds from issuance of stock warrants	—		14
Repayment of long-term debt and finance lease obligations	Repayment of long-term debt and finance lease obligations	(83)		(644)		Repayment of long-term debt and finance lease obligations	(255)		(1,775)

Acquisition of treasury stock	Acquisition of treasury stock	(6)		(6)		Acquisition of treasury stock	(6)		(7)
Other, net	Other, net	—		(1)		Other, net	(35)		(1)
Net cash provided by (used in) financing activities		(89)		212
Net cash used in financing activities						Net cash used in financing activities	(267)		(737)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(176)		441		INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(593)		283
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	2,077		1,969		Cash, cash equivalents and restricted cash at beginning of period	2,077		1,969
Cash, cash equivalents and restricted cash at end of period(1)	Cash, cash equivalents and restricted cash at end of period(1)	$	1,901	$	2,410	Cash, cash equivalents and restricted cash at end of period(1)	$	1,484	$	2,252

SUPPLEMENTAL CASH FLOW INFORMATION	SUPPLEMENTAL CASH FLOW INFORMATION					SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest	Cash payments for interest	$	20	$	40	Cash payments for interest	$	86	$	121
Cash receipts of income tax refunds (net of payments)						Cash receipts of income tax refunds (net of payments)	(95)		—

NON-CASH TRANSACTIONS						NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for operating lease liabilities						Operating lease assets obtained in exchange for operating lease liabilities	$	61	$	—
Lease Modifications and lease conversions						Lease Modifications and lease conversions	$	—	40
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:						(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

							September 30, 2022		September 30, 2021
Cash and cash equivalents						Cash and cash equivalents	$	1,401	$	2,193
Restricted cash						Restricted cash	83		59
Total cash, cash equivalents and restricted cash						Total cash, cash equivalents and restricted cash	$	1,484	$	2,252

See accompanying notes to condensed consolidated financial statements.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(unaudited, in millions)~~

Three Months Ended March 31,
2022 2021
Cash payments for income taxes (net of refunds) 1 —
NON-CASH TRANSACTIONS
Operating lease assets obtained under operating leases $ 59 $ —
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
March 31, 2022 March 31, 2021
Cash and cash equivalents $ 1,834 $ 2,358
Restricted cash(2)
67 52
Total cash, cash equivalents and restricted cash $ 1,901 $ 2,410
(2) Restricted cash primarily consists of security deposits, funds held in escrow for estimated workers’ compensation obligations, and performance bonds for aircraft and facility leases.

~~See accompanying notes to condensed consolidated financial statements.~~

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited, in millions)

Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Balance at December 31, 2021 478 $ 5 158 $ (1,989) $ 3,047 $ 2,786 $ — $ 3,849
Net loss — — — — — (255) — (255)
Other comprehensive (loss) — — — — — — (1) (1)
Vesting of restricted stock units 1 — — (6) — — — (6)
Stock compensation expense — — — — 11 — — 11
Balance at March 31, 2022 479 $ 5 158 $ (1,995) $ 3,058 $ 2,531 $ (1) $ 3,598
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 $ — $ 3,951
Net loss — — — — — (247) — (247)
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 $ — $ 3,714


	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at June 30, 2022	482	$	5	158	$	(1,995)	$	3,095	$	2,343	$	(2)	$	3,446
Net income	—	—		—	—		—		57		—		57
Other comprehensive income	—	—		—	—		—		—		—		—
Vesting of restricted stock units	1	—		1	—		—		—		—		—
Stock compensation expense	—	—		—	—		7		—		—		7
Stock issued under crewmember stock purchase plan	—	—		—	—		—		—		—		—
Hedging Activity	—	—		—	—		—		—		(3)		(3)
Balance at September 30, 2022	483	$	5	159	$	(1,995)	$	3,102	$	2,400	$	(5)	$	3,507

	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Balance at June 30, 2021	476	$	5	158	$	(1,989)	$	3,012	$	2,785	$	—	$	3,813
Net income	—	—		—	—		—		130		—		130

Vesting of restricted stock units	—	—		—	—		—		—		—		—
Stock compensation expense	—	—		—	—		6		—		—		6
Stock issued under crewmember stock purchase plan	—	—		—	—		—		—		—		—
Warrants issued under federal support programs	—	—		—	—		—		—		—		—
Balance at September 30, 2021	476	$	5	158	$	(1,989)	$	3,018	$	2,915	$	—	$	3,949

	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2021	478	$	5	158	$	(1,989)	$	3,047	$	2,786	$	—	$	3,849
Net (loss)	—	—		—	—		—		(386)		—		(386)
Other comprehensive loss	—	—		—	—		—		—		(2)		(2)
Vesting of restricted stock units	2	—		1	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		25		—		—		25
Stock issued under crewmember stock purchase plan	3	—		—	—		30		—		—		30
Hedging Activity	—	—		—	—		—		—		(3)		(3)
Balance at September 30, 2022	483	$	5	159	$	(1,995)	$	3,102	$	2,400	$	(5)	$	3,507

	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	$	—	$	3,951
Net (loss)	—	—		—	—		—		(53)		—		(53)

Vesting of restricted stock units	1	—		—	(8)		—		—		—		(8)
Stock compensation expense	—	—		—	—		23		—		—		23
Stock issued under crewmember stock purchase plan	1	—		—	—		22		—		—		22
Warrants issued under federal support programs	—	—		—	—		14						14
Balance at September 30, 2021	476	$	5	158	$	(1,989)	$	3,018	$	2,915	$	—	$	3,949

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,~~("JetBlue"), provides air transportation services across the United States, the Caribbean, Latin America, Canada, and ~~Latin America, and between New York and London. Ou~~rthe United Kingdom. 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 2021 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 ~~or our~~ ("2021 Form ~~10-K.~~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.~~(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,~~("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 ongoing 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, held-to-maturity investment securities, and equity 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, ~~U.S. Treasury bills with maturities between three and twelve months,~~ commercial paper, and convertible debt securities.

The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the fair value hierarchy. We did ~~not~~not record any material gains or losses on these securities during the three and nine months ended ~~March 31,~~September 30, 2022 or 2021. Refer to Note 7 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities.Our held-to-maturity investment securities consist of investment-grade interest bearing instruments, such as corporate bonds and U.S. Treasury notes, which are stated at amortized cost. We do not intend to sell these investment securities and the contractual maturities are not greater than 24 months. Those with maturities of less than twelve months are included in short-term investments on our consolidated balance sheets. Those with remaining maturities in excess of twelve months are included in long-term investments on our consolidated balance ~~sheets.~~sheets. We did ~~not~~not record any material gains or losses on these securities during the three and nine months ended ~~March 31,~~September 30, 2022 or 2021.

Equity investment ~~securities.~~securities. Our equity investment securities include investments in common stocks of publicly traded companies which are stated at fair value. We recognized a net unrealized loss of $2$10 million on these securities during the ~~three~~nine months ended ~~March 31,~~September 30, 2022. ~~No gains or losses were~~An immaterial gain was recorded during the same period in 2021.

~~The aggregate carrying values of our short-term and long-term investment securities consisted of the following at March 31, 2022 and December 31, 2021 (in millions):~~

109

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

March 31, 2022 December 31, 2021
Available-for-sale investment securities
Time deposits $ 865 $ 790
Commercial paper 61 2
Debt securities 10 8
Total available-for-sale investment securities 936 800
Held-to-maturity investment securities
Corporate bonds 100 37
Total held-to-maturity investment securities 100 37
Equity investment securities 24 26
Total investment securities $ 1,060 $ 863
The aggregate carrying values of our short-term and long-term investment securities consisted of the following at September 30, 2022 and December 31, 2021 (in millions):


	September 30, 2022		December 31, 2021
Available-for-sale investment securities
Time deposits	$	630	$	790
Debt securities	11		8
Commercial paper	39		2
Total available-for-sale investment securities	680		800
Held-to-maturity investment securities
Corporate bonds	176		37
Total held-to-maturity investment securities	176		37
Equity investment securities
Common stock of publicly traded companies	11		26
Total equity investment securities	11		26
Total investment securities	$	867	$	863

Other Investments

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC ~~or JTV,~~("JetBlue Ventures") has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the Financial Accounting Standards Board ~~(the "FASB")~~ Accounting Standards Codification (the ~~"Codification"~~"FASB Codification"), 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 ~~which is included within other assets on our consolidated balance sheet,~~ was ~~$73~~$78 million and $72 million as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. We did not record any material gains or losses on these investments during the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.

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 as of ~~March 31,~~September 30, 2022 and December 31, 2021.

Equity Method Investments

Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the FASB Codification. The carrying amount of our equity method investments was ~~$37~~$39 million ~~and~~and $32 million as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively, and is included within other assets on our consolidated balance sheets. ~~In March 2022, we recognized a gain of $3 million on one of our equity method investments related to its issuance of additional shares upon the closing of a subsequent financing round.~~

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 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 and nine months ended ~~March 31,~~September 30, 2022 and 2021 (in millions):

Three Months Ended March 31,
2022 2021
Passenger revenue
Passenger travel $ 1,490 $ 625
Loyalty revenue - air transportation 113 45
Other revenue
Loyalty revenue 88 45
Other revenue 45 18
Total revenue $ 1,736 $ 733

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Passenger revenue
Passenger travel	$	2,308	$	1,773	$	5,959	$	3,717
Loyalty revenue - air transportation	107		83		360		196
Other revenue
Loyalty revenue	102		80		287		206
Other revenue	45		36		137		84
Total revenue	$	2,562	$	1,972	$	6,743	$	4,203

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~~Passenger revenue. Amounts presented in Loyalty revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred. Loyalty revenue within ~~other~~Other revenue is primarily comprised of the non-air transportation elements of the sales of our TrueBlue®points.

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, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Air traffic liability - passenger travel	Air traffic liability - passenger travel	$	1,643	$	1,323	Air traffic liability - passenger travel	$	1,443	$	1,323
Air traffic liability - loyalty program (air transportation)	Air traffic liability - loyalty program (air transportation)	912		891		Air traffic liability - loyalty program (air transportation)	976		891
Deferred revenue(1)	Deferred revenue(1)	595		613		Deferred revenue(1)	547		613
Total	Total	$	3,150	$	2,827	Total	2,966		2,827

(1) Deferred revenue is included within other accrued liabilities and other liabilities on our consolidated balance sheets.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, we recognized passenger ~~revenue of~~ rev~~$709 million~~enue of $1.2 billion and ~~$237~~$468 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.

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.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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~~nine months ended ~~March 31,~~September 30, 2022 and 2021 (in millions):


Balance at December 31, 2021	$	891
TrueBlue® points redeemed	~~(113)~~(360)
TrueBlue® points earned and sold	~~134~~445
Balance at ~~March 31,~~September 30, 2022	$	~~912~~976

Balance at December 31, 2020	$	733
TrueBlue® points redeemed	~~(45)~~(196)
TrueBlue® points earned and sold	70308
Balance at ~~March 31,~~September 30, 2021	$	~~758~~845

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.

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

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we made ~~principal~~ payments of ~~$83~~$255 million on our outstanding debt and finance lease obligations.

~~We had~~As of September 30, 2022, we pledged aircraft, engines, other equipment, and facilities with a net book value of ~~$5.6~~$6.3 billion ~~at March 31, 2022~~ as security under various financing arrangements.

At September 30, 2022, scheduled maturities of our long-term debt and finance lease obligations were $100 million for the remainder of 2022, $557 million in 2023, $332 million in 2024, $192 million in 2025, $929 million in 2026, and $1.6 billion thereafter.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~At March 31, 2022, scheduled maturities of our long-term debt and finance lease obligations were~~ ~~$267 million~~ ~~for the remainder of 2022,~~ ~~$557 million~~ ~~in 2023,~~ ~~$332 million~~ ~~in 2024,~~ ~~$192 million~~ ~~in 2025,~~ ~~$929 million~~ ~~in 2026, and~~ ~~$1.6 billion~~ ~~thereafter.~~

The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at ~~March 31,~~September 30, 2022 and December 31, 2021 were as follows (in millions):


		March 31, 2022				December 31, 2021					September 30, 2022				December 31, 2021
		Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)			Carrying Value		Estimated Fair Value(1)		Carrying Value		Estimated Fair Value(1)
Public Debt	Public Debt									Public Debt
Fixed rate special facility bonds, due through 2036	Fixed rate special facility bonds, due through 2036	$	42	$	44	$	42	$	45	Fixed rate special facility bonds, due through 2036	$	42	$	41	$	42	$	45
Fixed rate enhanced equipment notes:	Fixed rate enhanced equipment notes:									Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032	2019-1 Series AA, due through 2032	532		398		532		442		2019-1 Series AA, due through 2032	519		342		532		442
2019-1 Series A, due through 2028	2019-1 Series A, due through 2028	166		141		166		150		2019-1 Series A, due through 2028	162		125		166		150
2019-1 Series B, due through 2027	2019-1 Series B, due through 2027	95		113		94		121		2019-1 Series B, due through 2027	88		94		94		121
2020-1 Series A, due through 2032	2020-1 Series A, due through 2032	587		566		587		634		2020-1 Series A, due through 2032	567		467		587		634
2020-1 Series B, due through 2028	2020-1 Series B, due through 2028	153		183		153		199		2020-1 Series B, due through 2028	144		151		153		199
Non-Public Debt	Non-Public Debt									Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023	Fixed rate enhanced equipment notes, due through 2023	66		65		88		88		Fixed rate enhanced equipment notes, due through 2023	60		59		88		88
Fixed rate equipment notes, due through 2028	Fixed rate equipment notes, due through 2028	575		519		620		706		Fixed rate equipment notes, due through 2028	495		400		620		706
Floating rate equipment notes, due through 2028	Floating rate equipment notes, due through 2028	89		83		103		99		Floating rate equipment notes, due through 2028	64		56		103		99
2020 sale-leaseback transactions, due through 2024		346		358		347		374
Sale-leaseback transactions, due through 2024										Sale-leaseback transactions, due through 2024	343		332		347		374
Unsecured CARES Act Payroll Support Program loan, due through 2030	Unsecured CARES Act Payroll Support Program loan, due through 2030	259		188		259		219		Unsecured CARES Act Payroll Support Program loan, due through 2030	259		134		259		219
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		104		144		121		Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		73		144		121
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	132		95		132		111		Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	132		67		132		111
0.50% convertible senior notes due 2026	0.50% convertible senior notes due 2026	737		628		736		673		0.50% convertible senior notes due 2026	738		543		736		673
Total~~(1)~~(2)	Total~~(1)~~(2)	$	3,923	$	3,485	$	4,003	$	3,982	Total~~(1)~~(2)	$	3,757	$	2,884	$	4,003	$	3,982

(1) ~~Total excludes finance lease obligations of~~ ~~$3 million~~ ~~and $3 million at March 31, 2022 and December 31, 2021, respectively.~~

~~(2)~~ The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair value of our non-public debt ~~are~~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. Refer to Note 7 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

(2) Total excludes finance lease obligations of $2 million and $3 million at September 30, 2022 and December 31, 2021, respectively.

We have financed certain aircraft with Enhanced Equipment Trust Certificates ~~or EETCs.~~("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,~~("VIE") as defined in Topic 810, Consolidation of the FASB 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.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

2022 $3.5 Billion Senior Secured Bridge Facility

On May 16, 2022, we, along with our direct wholly-owned subsidiary, Sundown Acquisition Corp. ("Merger Sub"), commenced a tender offer to purchase all of the outstanding shares of common stock, par value $0.0001 per share, of Spirit Airlines, Inc. ("Spirit") at $30.00 per share, upon the terms and subject to the conditions set forth in the Offer to Purchase (the “Offer to Purchase”) and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”), which were included as exhibits to the Tender Offer ("TO") Statement on Schedule TO filed with the SEC on May 16, 2022.In connection with the Offer, on May 23, 2022, we executed a commitment letter with Goldman Sachs Bank USA, Bank of America, N.A. and BofA Securities, Inc. for a senior secured bridge facility in an aggregate principal amount of up to $3.5 billion, which was amended and restated on June 11, 2022 to include other lenders that have committed to the facility (BNP Paribas; Credit Suisse AG, New York Branch; Credit Suisse Loan Funding LLC; Credit Agricole Corporate and Investment Bank; Natixis, New York Branch; Sumitomo Mitsui Banking Corporation; and MUFG Bank, Ltd.). The Offer was terminated concurrently with the entry into the Merger Agreement (as defined below).

In connection with the entry into the Merger Agreement, JetBlue entered into a second amended and restated commitment letter (the "Commitment Letter"), dated July 28, 2022, with Goldman Sachs Bank USA; BofA Securities, Inc.; Bank of America, N.A.; BNP Paribas; Credit Suisse AG, New York Branch; Credit Suisse Loan Funding LLC; Credit Agricole Corporate and Investment Bank; Natixis, New York Branch; Sumitomo Mitsui Banking Corporation; and MUFG Bank, Ltd. (collectively, the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide a senior secured bridge facility in an aggregate principal amount of up to $3.5 billion to finance the acquisition of Spirit.

As part of the Commitment Letter, we have agreed to pledge, as part of any financing to be provided, certain specified collateral including aircraft and spare engines; rights to certain landing and takeoff slots at Gatwick Airport, John F. Kennedy International Airport, LaGuardia Airport, and Ronald Reagan Washington National Airport; as well as certain assets that comprise the JetBlue brand; and certain rights in the TrueBlue customer loyalty program. As of and for the period ended September 30, 2022 we did not have a balance outstanding or any borrowings thereunder.

Federal Payroll Support Programs

As a result of the adverse economic impact of COVID-19, we have received assistance under various payroll support programs provided by the federal government.

CARES Act –— Payroll Support Program

On March 27, 2020, U.S. 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").

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 total of approximately $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 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. As part of the agreement, JetBlue issued warrants to 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.

Consolidated Appropriations Act – Payroll Support Program 2

On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with Treasury governing our participation in the federal ~~Payroll Support Program~~payroll support program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2"). Treasury provided us with a total of approximately $580 million (the "Payroll Support 2 Payments") under the program, consisting of $436 million in grants and $144 million in unsecured term ~~loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021.~~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 SOFR plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.

American Rescue Plan Act – Payroll Support Program 3

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On May 6, 2021, we entered into a Payroll Support 3 Agreement (the "PSP3 Agreement") with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the "Payroll Support Program 3"). Treasury provided us with a total of approximately $541 million (the "Payroll Support 3 Payments") under the program, consisting of $409 million in grants and $132 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 May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million shares of our common stock to Treasury at an exercise price of $19.90 per share.

The warrants associated with each of the payroll support programs described above will expire 5five 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.

The carrying values relating to the payroll support grants were recorded within other accrued liabilities and were 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 were recorded within additional paid-in capital and reduced the total carrying value of the grants. Proceeds from the payroll support grants and from the issuance of payroll support warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. Our funding from all payroll support grants ~~has been~~was fully utilized ~~since~~as of September 30, 2021.

The carrying values relating to the unsecured payroll support loans were 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.

CARES Act – Secured Loan Program

Under the CARES Act Loan Program, JetBlue had the ability to borrow up to a total of approximately $1.9 billion from Treasury. We entered into a loan and guarantee agreement (the "Loan Agreement") with Treasury and made an initial drawing

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

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 warrants to Treasury ~~warrants~~ to purchase approximately 1.2 million shares of our common stock 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 our option, in whole or in part at any time.

On September 15, 2021, the Company repaid the full amount of outstanding borrowings under the Loan Agreement, which, together with accrued interest and fees, totaled approximately $118 million. ~~As of March 31, 2022, we did not have a balance outstanding and all~~All obligations under the Loan Agreement, including all pledges of collateral, were terminated in full.

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 indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were ap~~proximately~~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 periodically redeem or retire the ~~notes periodically.~~notes. 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

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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.

We evaluated the conversion feature of this note offering for embedded ~~derivative~~derivatives in accordance with Topic 815, Derivatives and Hedgingof the FASB Codification,, and the substantial premium model in accordance with ~~Topic~~ASC 470, Debtof the FASB Codification. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.

Interest expense recognized during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was $2$6 million ~~which~~and included $1$2 million in amortization of debt issuance costs. ~~Interest expense recognized during~~During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, interest expense recorded was ~~insignificant.~~$4 million and included $2 million in amortization of debt issuance costs.

Short-term Borrowings

Citibank Line of Credit

We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent (the "Agent"), for up to $550 ~~million.~~million (the “Existing Credit Facility”). The term of the facility runs through August 2023. Borrowings under the Existing Credit ~~and Guaranty Agreement~~Facility bear interest at a variable rate equal to LIBOR, plus a margin. The Existing Credit ~~and Guaranty Agreement are~~Facility is secured by ~~unencumbered~~ aircraft, simulators, and certain other assets. The Existing Credit ~~and Guaranty Agreement~~Facility 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 of and for the periods ended ~~March 31,~~September 30, 2022 and December 31, 2021, we did not have a balance outstanding or any borrowings under this line of credit.

~~Table~~On October 21, 2022, JetBlue entered into the Second Amended and Restated Credit and Guaranty Agreement (the “Second Amended and Restated Facility”), amending and restating the Existing Credit Facility. The Second Amended and Restated Facility is among JetBlue, the Agent and the lenders party thereto. The Second Amended and Restated Facility modifies the Existing Credit Facility to, among other things, (i) increase the lending commitments by $50 million, for total lending commitments of ~~Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

$600 million, and (ii) establish the maturity date for the $600 million in lending commitments as October 21, 2024. Borrowings under the Second Amended and Restated Facility bear interest at a variable rate based on the secured overnight financing rate, known as SOFR, plus a margin of 2.00% per annum, or another rate (at JetBlue's election) based on certain market interest rates, plus a margin of 1.00% per annum, in each case with a floor of 0%. JetBlue has not made any drawings under the Second Amended and Restated Facility as of the date of this report.

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 periods ended ~~March 31,~~September 30, 2022 and December 31, 2021, we did not have a balance outstanding or any borrowings under this line of credit.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 4—~~Loss~~Earnings (Loss) Per Share

Basic earnings per share is calculated by dividing net income (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, crewmember purchases made under the ~~Crewmember~~Company's crewmember Stock Purchase Plan, convertible notes, warrants issued under various federal payroll support programs, and any other potentially dilutive instruments using the treasury stock and if-converted methods. There were no anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts for the three months ended September 30, 2022 and 2021. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts ~~were~~ w~~2.9~~ere 1.9 million and 3.5 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and September 30, 2021, ~~respectively.~~respectively.

The following table shows how we computed ~~loss~~basic and diluted earnings per common share for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 (dollars and share data in millions):


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021			2022		2021		2022		2021
Net loss		$	(255)	$	(247)
Net income (loss)						Net income (loss)	$	57	$	130	$	(386)	$	(53)

Weighted average basic shares	Weighted average basic shares	320.5		316.3		Weighted average basic shares	323.9		318.0		322.5		317.3
Effect of dilutive securities	Effect of dilutive securities	—		—		Effect of dilutive securities	1.1		3.3		—		—
Weighted average diluted shares	Weighted average diluted shares	320.5		316.3		Weighted average diluted shares	325.0		321.3		322.5		317.3

Loss per common share
Earnings (loss) per common share						Earnings (loss) per common share
Basic	Basic	$	(0.79)	$	(0.78)	Basic	$	0.18	$	0.41	$	(1.20)	$	(0.17)
Diluted	Diluted	$	(0.79)	$	(0.78)	Diluted	$	0.18	$	0.40	$	(1.20)	$	(0.17)

Note 5—Crewmember Retirement Plan

We sponsor a retirement savings 401(k) defined contribution plan or ("the ~~Plan,~~Plan"), covering all of our crewmembers where we match 100% of our crewmember contributions up to 5% of their eligible wages. The contributions vest over three years and are measured from a crewmember's hire date. Crewmembers are immediately vested in their voluntary contributions.

Another component of the Plan is a Company discretionary contribution of 5% of eligible non-management crewmember compensation, which we refer to as Retirement Plus. Retirement Plus contributions vest over three years and are measured from a crewmember's hire date.

Certain Federal Aviation Administration ~~or FAA,~~("FAA") licensed crewmembers receive an additional contribution of 3% of eligible compensation, which we refer to as Retirement Advantage.

Our pilots receive a non-elective Company contribution of 16% of eligible pilot compensation per the terms of the ~~finalized~~ collective bargaining agreement between JetBlue and the Air Line Pilots Association ("ALPA"), in lieu of the above 401(k) Company matching contribution, Retirement Plus, and Retirement Advantage contributions. The Company's non-elective contribution of 16% of eligible pilot compensation vests after three years of service.

Our non-management crewmembers are eligible to receive profit sharing, calculated as 10% of adjusted pre-tax income before profit sharing and special items up to a pre-tax margin of 18% with the result reduced by Retirement Plus contributions and the equivalent of Retirement Plus contributions for pilots. If JetBlue's resulting pre-tax margin exceeds 18%, non-management crewmembers will receive 20% profit sharing on amounts above an 18% pre-tax margin.

Total 401(k) company match contributions, Retirement Plus, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the nine months ended September 30, 2022 and 2021 was $186 million and $157 million, respectively.

Note 6—Commitments and Contingencies

1617

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Total 401(k) company match,~~ ~~Retirement Plus, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the three months ended March 31, 2022 and 2021 was~~ ~~$62 million~~ ~~and $48 million, respectively.~~

~~Note 6—Commitments and Contingencies~~

Flight Equipment Commitments

In February 2022, we exercised our option to purchase 30 additional Airbus A220-300 aircraft under our existing agreement with Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2022 to 2026. Options for 20 additional A220-300 aircraft remain available to us.

As of ~~March 31,~~September 30, 2022, our firm aircraft orders consisted of 6463 Airbus A321neo aircraft and 9288 Airbus A220 aircraft, scheduled for delivery through 2027. Committed expenditures for these aircraft and related flight equipment, including estimated amounts for contractual price escalations and predelivery deposits as of ~~March 31,~~September 30, 2022 is approximately ~~$0.7 billion~~$245 million for the remainder of 2022, ~~$1.6~~$1.5 billion in 2023, ~~$2.0~~$2.1 billion in 2024, ~~$1.7~~$1.8 billion in 2025, $1.4 billion in 2026, and $1.0 billion thereafter.

The amount of committed expenditures stated above represents the current delivery schedule set forth in our Airbus order book as of ~~March 31,~~September 30, 2022. In February 2022, we received notice from Airbus of anticipated delivery delays for ~~the A220 aircraft. We expect a delivery of a maximum of 9~~certain A220 aircraft and in September 2022, ~~as a result of~~we signed an amendment to the ~~delays.~~Airbus A220 purchase agreement.

In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new commercial aircraft and related parts imported from certain European Union member states, which include aircraft and other parts we are already contractually obligated to purchase, including those noted above. The U.S. Trade Representative increased the tariff to 15% effective March 2020. In March 2021, the U.S. Trade Representative announced a four-month suspension of the tariff that was followed by an announcement in June 2021 that the suspension will be extended for five years. We continue to work with our business partners, including Airbus, to evaluate the potential financial and operational impact of these announcements on our future aircraft deliveries, including after the suspension is lifted. The imposition of this or any tariff could substantially increase the cost of new aircraft and parts.

Other Commitments

We utilize several credit card processors to process our ticket sales. Our agreements with these processors do not contain covenants, but do generally allow the processor to withhold cash reserves to protect the processor from potential liability for tickets purchased, but not yet used for travel. While we currently do not have any collateral requirements related to our credit card processors, we may be required to issue collateral to our credit card processors, or other key business partners, in the future.

As of ~~March 31,~~September 30, 2022, we had approximately ~~$32~~$40 million in assets serving as collateral for letters of credit relating to a certain number of our leases. These are included in restricted cash and expire at the end of the related lease terms. Additionally, we had approximately ~~$26~~$40 million in assets pledged related to our workers' compensation insurance policies and other business partner agreements, which will expire according to the terms of the related policies or agreements.

Except for our pilots and inflight crewmembers who are represented by the Air Line Pilots Association ("ALPA") and the Transport Workers Union of America ("TWU"), respectively, our other frontline crewmembers do not have third party ~~representation~~.representation.

In April 2021, ALPA, on behalf of the JetBlue pilot group, filed a grievance relating to the Northeast Alliance Agreement ("NEA"), an expanded codeshare and marketing alliance between JetBlue and American Airlines, Inc. ("American") at 4four Northeast airports. ALPA claims that in entering the NEA, JetBlue violated certain scope clauses as contained in the pilots’ ALPA collective bargaining agreement. ~~A final mediation session~~The matter proceeded to arbitration pursuant to the grievance procedure contained in the collective bargaining agreement, which concluded in September 2021, and in January 2022, the parties submitted final, written briefs to the System ~~Board.~~Board of Adjustment. Shortly after submission of the briefs, the parties agreed to enter into non-binding mediation with the assistance of the arbitrator with a temporary hold on a System Board decision. As a result of the mediation process, the parties agreed to certain changes to the collective bargaining agreement. The agreement, ratified by the JetBlue pilot group in April 2022, included a one-time payment and associated payroll taxes of ~~$30~~$32 million, ~~to be~~ paid and recorded as an expense within special items in the second quarter of 2022, and a 3% base pay increase effective May 1, 2022.

~~Table~~In September 2022, the International Association of ~~Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~We enter into individual employment agreements with each of our non-unionized FAA-licensed crewmembers, which include dispatchers, technicians,~~Machinists and ~~inspectors, as well as air traffic controllers. Each employment agreement is for a term of five years and automatically renews~~Aerospace Workers (“IAM”) filed for an ~~additional five years unless either the crewmember or we elect not~~election to ~~renew~~unionize our ground operations crewmembers. We continue to monitor this process as it ~~by giving at least 90 days' notice before the end of the relevant term. Pursuant to these agreements, these crewmembers can only be terminated for cause. In the event of a downturn in~~affects our business that would require a reduction in work hours, we are obligated to pay these crewmembers a guaranteed level of income and to continue their benefits if they do not obtain other aviation employment.crewmembers.

Legal Matters

Occasionally, we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters involving suppliers, crewmembers, customers, and governmental agencies, arising, for the most part, in the ordinary course of business. The outcome of litigation and other legal matters is always uncertain. The Company believes it has valid defenses to the legal matters currently pending against it, is defending itself vigorously, and has recorded accruals determined in accordance with GAAP, where appropriate. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and record a loss contingency

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to our consolidated results of operations, liquidity, or financial condition.

To date, none of these types of litigation matters, most of which are typically covered by insurance, has had a material impact on our operations or financial condition. We have insured and continue to insure against most of these types of claims. A judgment on any claim not covered by, or in excess of, our insurance coverage could materially adversely affect our consolidated results of operations, liquidity, or financial condition.

OnIn September ~~21,~~ 2021, the United States Department of Justice ~~(the "DOJ"~~("DOJ"), along with the Attorneys General of each of the States of Arizona, California, and Florida, the Commonwealths of Massachusetts, Pennsylvania, and Virginia, and the District of Columbia, filed a lawsuit in the United States District Court for the District of Massachusetts (the "Court") against JetBlue and American ~~and, together with JetBlue, the “Carriers” concerning the Carriers’ previously implemented NEA. The lawsuit asserts and seeks an adjudication~~Airlines alleging that the NEA violates Section 1 of the Sherman Act, and asking that the ~~Carriers~~carriers be permanently enjoined from ~~continuing and restrained from further~~ implementing the NEA.

~~Also on~~ A bench trial was held September ~~21, 2021, the Department of Transportation (the "DOT") published a Clarification Notice relating to the agreement that had~~27, 2022 through October 27, 2022. A decision has not yet been reached between the DOT, JetBlue, and American in January 2021, at the conclusion of the DOT’s review of the NEA ("DOT Agreement"). The DOT Clarification Notice stated, among other things, that the DOT Agreement remains in force during the pendency of the DOJ action against the NEA and, while the DOT retains independent statutory authority to prohibit unfair methods of competition in air transportation, the DOT intends to defer to DOJ to resolve the antitrust concerns that the DOJ has identified with respect to the NEA. The DOT simultaneously published a Notice Staying Proceeding in relation to a complaint by Spirit Airlines, Inc. regarding the NEA, pending resolution of the DOJ action described above.

~~JetBlue believes the lawsuit is without merit and, along with American, intends to defend itself vigorously.~~issued. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter. In November 2021, JetBlue and American filed a motion to dismiss the DOJ's lawsuit against the NEA. Motion practice has concluded and the parties await a decision, while the lawsuit proceeds concurrently.

Note 7—Fair Value

Under Topic 820, Fair Value Measurementof the FASB Codification,disclosures are required about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows:

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - quoted prices in active markets for similar assets and liabilities, and other inputs that are observable directly or indirectly for the asset or liability; or

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of ~~March 31,~~September 30, 2022 and December 31, 2021 (in millions):


		March 31, 2022									September 30, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,128	$	15	$	—	$	1,143	Cash equivalents	$	1,004	$	—	$	—	$	1,004
Available-for-sale investment securities	Available-for-sale investment securities	—		936		—		936		Available-for-sale investment securities	—		680		—		680
Equity investment securities	Equity investment securities	24		—		—		24		Equity investment securities	11		—		—		11

Aircraft fuel derivatives										Aircraft fuel derivatives	—		3		—		3


		December 31, 2021									December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,515	$	—	$	—	$	1,515	Cash equivalents	$	1,515	$	—	$	—	$	1,515
Available-for-sale investment securities	Available-for-sale investment securities	—		800		—		800		Available-for-sale investment securities	—		800		—		800
Equity investment securities	Equity investment securities	26		—		—		26		Equity investment securities	26		—		—		26
Aircraft fuel derivatives										Aircraft fuel derivatives	—		—		—		—

Refer to Note 3 to our condensed consolidated financial statements for fair value information related to our outstanding debt obligations as of ~~March 31,~~September 30, 2022 and December 31, 2021.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Cash equivalents

Our cash equivalents include money market securities and time deposits which are readily convertible into cash, have maturities of three months or less when purchased, and are considered to be highly liquid and easily tradable. The money market securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. The fair values of remaining instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy.

Available-for-sale investment securities

Our available-for-sale investment securities include investments such as time deposits and convertible debt securities. The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy. We did not record any material gains or losses on these ~~instruments~~securities during the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.

Equity investment securities

Our equity investment securities include investments in common stocks of publicly traded companies. The fair values of these instruments are classified as Level 1 in the hierarchy as they are based on unadjusted quoted prices in active markets for identical assets. We recognized a net unrealized loss of $2$1 million and $10 million on these securities during the three and nine months ended ~~March 31, 2022. No gains or losses were~~September 30, 2022, respectively. An immaterial gain was recorded during the same period in 2021.

~~Other Investments~~Aircraft fuel derivatives

Our aircraft fuel derivatives include call spread options which are not traded on public exchanges. Their fair values are determined using a market approach based on inputs that are readily available from public markets for commodities and energy trading activities; therefore, they are classified as Level 2 inputs. The data inputs are combined into quantitative models and processes to generate forward curves and volatility related to the specific terms of the underlying hedge contracts.

1920

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 8—Financial Derivative Instruments and Risk Management

As part of our risk management techniques, we periodically purchase over the counter energy derivative instruments to manage our exposure to the effect of changes in the price of aircraft fuel. Prices for the underlying commodities have historically been highly correlated to aircraft fuel, making derivatives of them effective at providing short-term protection against sharp increases in average fuel prices. We do not hold or issue any derivative financial instruments for trading purposes.

Aircraft Fuel Derivatives

We attempt to obtain cash flow hedge accounting treatment for each fuel derivative that we enter into. This treatment is provided for under the Derivatives and Hedging topic of the FASB Codification which allows for gains and losses on the effective portion of qualifying hedges to be deferred until the underlying planned aircraft fuel consumption occurs, rather than recognizing the gains and losses on these instruments into earnings during each period they are outstanding. The effective portion of realized fuel hedging derivative gains and losses is recognized in aircraft fuel expense in the period during which the underlying fuel is consumed.

Ineffectiveness occurs, in certain circumstances, when the change in the total fair value of the derivative instrument differs from the change in the value of our expected future cash outlays for the purchase of aircraft fuel. If a hedge does not qualify for hedge accounting, the periodic changes in its fair value are also recognized in interest income and other. When aircraft fuel is consumed and the related derivative contract settles, any gain or loss previously recorded in other comprehensive income is recognized in aircraft fuel expense. All cash flows related to our fuel hedging derivatives are classified as operating cash flows.

Our current approach to fuel hedging is to enter into hedges on a discretionary basis. We view our hedge portfolio as a form of insurance to help mitigate the impact of price volatility and protect us against severe spikes in oil prices, when possible.

The following table illustrates the approximate hedged percentages of our projected fuel usage by quarter as of September 30, 2022 related to our outstanding fuel hedging contracts that were designated as cash flow hedges for accounting purposes. As of September 30, 2022 there were no fuel hedge contracts beyond December 31, 2022.


	Aircraft fuel call option spread agreements		Total
Fourth Quarter 2022	27	%	27	%

The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements (dollar amounts in millions):


	September 30, 2022		December 31, 2021
Fuel Derivatives
Asset fair value recorded in prepaid expense and other current assets1	$	3	$	—
Longest remaining term (months)	3		0
Hedged volume (barrels, in thousands)	1,379		—
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months	$	—	—

1 Gross asset of each contract prior to consideration of offsetting positions with each counterparty and prior to the impact of collateral paid

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As discussed in Note 1 to our condensed consolidated financial statement, JTV has equity investments in emerging companies that do not have readily determinable fair values. In accordance with Topic 321,
~~Investments - Equity Securities~~ of the FASB Codification, 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. We did not record any material gains or losses on these investments during the three months ended March 31, 2022 and 2021.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fuel Derivatives
Hedge effectiveness gains (losses) recognized in aircraft fuel expense	$	—	$	—	$	—	$	—
Hedge gains (losses) on derivatives recognized in comprehensive income	$	(3)	$	—	$	(3)	$	—
Percentage of actual consumption economically hedged	—		—		—		—

Any outstanding derivative instrument exposes us to credit loss in connection with our fuel contracts in the event of nonperformance by the counterparties to our agreements, but we do not expect that any of our counterparties will fail to meet their obligations. The amount of such credit exposure is generally the fair value of our outstanding contracts for which we are in a receivable position. To manage credit risks we select counterparties based on credit assessments, limit our overall exposure to any single counterparty and monitor the market position with each counterparty. Some of our agreements require cash deposits from either JetBlue or our counterparty if market risk exposure exceeds a specified threshold amount.

We have master netting arrangements with our counterparties allowing us the right of offset to mitigate credit risk in derivative transactions. 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. Our policy is to offset the liabilities represented by these contracts with any cash collateral paid to the counterparties.

There were no offsetting derivative instruments as of September 30, 2022 and December 31, 2021.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 8—9—Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in fair value of our available-for-sale ~~securities.~~securities and our aircraft fuel derivatives which qualify for hedge accounting. A ~~rollforward~~roll forward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the three months ended ~~March 31,~~September 30, 2022 and 2021 is as follows (in millions):

Available-for-sale securities(1)
Total
Balance of accumulated income, at December 31, 2021 $ — $ —
Reclassifications into earnings, net of deferred taxes of $0 — —
Change in fair value, net of deferred taxes of $0 (1) (1)
Balance of accumulated (loss), at March 31, 2022 $ (1) $ (1)
Balance of accumulated income, at December 31, 2020 $ — $ —
Reclassifications into earnings, net of deferred taxes $0 — —
Change in fair value, net of deferred taxes of $0 — —
Balance of accumulated income, at March 31, 2021 $ — $ —


	Available-for-sale securities(1)		Aircraft Fuel Derivatives(2)		Total
Balance of accumulated income (loss), at June 30, 2022	$	(2)	$	—	$	(2)
Reclassifications into earnings, net of taxes of $0	—		—		—
Change in fair value, net of taxes of $2	—		(3)		(3)
Balance of accumulated income (loss), at September 30, 2022	$	(2)	$	(3)	$	(5)

Balance of accumulated income (loss), at June 30, 2021	$	—	$	—	$	—
Reclassifications into earnings, net of taxes $0	—		—		—
Change in fair value, net of taxes of $0	—		—		—
Balance of accumulated income (loss), at September 30, 2021	$	—	$	—	$	—

A roll forward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the nine months ended September 30, 2022 and 2021 is as follows (in millions):


	Available-for-sale securities(1)		Aircraft Fuel Derivatives(2)		Total
Balance of accumulated income (loss), at December 31, 2021	$	—	$	—	$	—
Reclassifications into earnings, net of taxes of $0	—		—		—
Change in fair value, net of taxes of $2	(2)		(3)		(5)
Balance of accumulated income (loss), at September 30, 2022	$	(2)	$	(3)	$	(5)

Balance of accumulated income (loss), at December 31, 2020	$	—	$	—	$	—
Reclassifications into earnings, net of taxes $0	—		—		—
Change in fair value, net of taxes of $0	—		—		—
Balance of accumulated income (loss), at September 30, 2021	$	—	$	—	$	—

(1) Reclassified to interest income.

(2) Reclassified to aircraft fuel expense.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 9—10—Special Items

The following is a listing of special items presented on our consolidated statements of operations for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 (in millions):


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021			2022		2021		2022		2021
Special Items	Special Items					Special Items
Federal payroll support grant recognition(1)	Federal payroll support grant recognition(1)	$	—	$	(288)	Federal payroll support grant recognition(1)	$	—	$	(186)	$	—	$	(830)
CARES Act employee retention credit(2)	CARES Act employee retention credit(2)	—		(1)		CARES Act employee retention credit(2)	—		—		—		(11)
Fleet Impairment (3)						Fleet Impairment (3)	—		—		5		—
Air Lines Pilot Association ratification bonus (4)						Air Lines Pilot Association ratification bonus (4)	—		—		32		—
Spirit Airlines, Inc. acquisition related expenses (5)						Spirit Airlines, Inc. acquisition related expenses (5)	11		—		18		—
Fleet Retirement (6)						Fleet Retirement (6)	2		—		2
Total	Total	$	—	$	(289)	Total	$	13	$	(186)	$	57	$	(841)

(1) As discussed in Note 3 to our condensed consolidated financial statements, we received assistance in the form of grants and unsecured loans under various federal payroll support ~~programs.~~programs in 2020 and 2021. Funds under these federal payroll support programs were to be used exclusively for the continuation of payment of crewmember wages, salaries and benefits. The carrying values of the payroll support grants (after consideration of the warrants we issued) were recorded within other liabilities and were recognized as contra-expenses within special items on our consolidated statements of operations as the funds were utilized. We utilized ~~$288~~$186 million and $830 million of payroll support grants for the three and nine months ended ~~March 31, 2021.~~September 30, 2021, respectively. Our payroll support grants were fully utilized as of ~~December 31,~~September 30, 2021.

(2) The Employee Retention Credit ("ERC") under the CARES Act is a refundable tax credit which encourages ~~business~~businesses to keep employees on the payroll during the COVID-19 pandemic. Eligible employers can qualify for up to $5,000 of credit for each employee based on qualified wages paid after March 12, 2020 and before January 1, 2021. The Internal Revenue Service ("IRS") subsequently issued Notice 2021-23 and Notice 2021-49 which collectively extended the ERC eligibility to cover qualified wages paid after December 31, 2020 and before January 1, 2022. Qualified wages are the wages paid to an employee

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

for the time that the employee is not providing services due to an economic hardship, specifically, either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross receipts. Our policy is to recognize the ERC when it is filed with the ~~IRS.~~Internal Revenue Service. We recognized $1$11 million of ERC as a contra-expense within special items on our consolidated statements of operations for the ~~three~~nine months ended ~~March 31, 2021.~~

September 30, 2021, respectively.

(3) Under Topic 320 - Property, Plant, and Equipment of the FASB Codification, we are required to assess long-lived assets for impairment when events and circumstances indicate that the assets may be impaired. An impairment of long-lived assets exists when the sum of the estimated undiscounted future cash flows expected to be generated directly by the assets are less than the book value of the assets. Our long-lived assets include both owned and leased properties which are classified as property and equipment, and operating lease assets on our consolidated balance sheets, respectively.

~~Note 10—Subsequent Event~~

~~Proposal to Acquire Spirit Airlines~~

~~On April 5 2022,~~To determine if impairment exists in our fleet, we ~~announced~~grouped our aircraft by fleet-type and estimated their future cash flows based on projections of capacity, aircraft age, and maintenance conditions. Based on the assessment, we determined the future cash flows from the operation 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 ~~have delivered~~recorded impairment losses of $5 million for the nine months ended September 30, 2022. These losses represent the difference between the book value of these assets and their fair value. In determining fair value, we obtained third party valuations for our Embraer E190 fleet, which considered the effects of the current market environment, age of the assets, and marketability. For our owned Embraer E190 aircraft and related spare parts, we made adjustments to the ~~board~~valuations to reflect the impact of ~~directors~~their current maintenance conditions to determine fair value. Our estimate of ~~Spirit Airlines, Inc. ("Spirit")~~fair value was not based on distressed sales or forced liquidations. The fair value of our Embraer E190 aircraft under operating lease and related parts was based on the present value of current market lease rates utilizing a ~~proposal to acquire all~~market discount rate for the remaining term of each lease. Since the ~~outstanding shares~~fair value of ~~Spirit common stock for a per share consideration of $33.00 in cash.~~

~~We intend to fund the transaction with cash on hand and debt financing.~~

Any transaction with Spirit would be subject to negotiation and execution of, among other agreements, a definitive merger agreement between JetBlue and Spirit which would be subject to approval by each company’s Board of Directors. Completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s shareholders.our Embraer E190 fleet was

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

determined using unobservable inputs, it is classified as Level 3 in the fair value hierarchy.

We did not record any impairment loss on our long-lived assets for the three and nine months ended September 30, 2021.

(4) As discussed in Note 6 to our condensed consolidated financial statements, we paid $32 million for an ALPA ratification bonus and the associated payroll taxes during the nine months ended September 30, 2022.

(5) As discussed in Note 11 to our condensed consolidated financial statements, we incurred and paid $18 million for acquisition-related cost related to our Spirit merger during the nine months ended September 30, 2022.

(6) As part of our Embraer E190 retirement plan, we exchanged the title to an unencumbered CF34 engine with an engine owned by an Embraer E190 lessor. We recorded the $2 million difference between the carrying value of the original engine and the appraised value of the received engine as a loss for the three and nine months ended September 31, 2022.

Note 11—Entry into Merger Agreement with Spirit Airlines

On July 28, 2022, JetBlue entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Spirit Airlines, Inc., a Delaware corporation (“Spirit”), and Sundown Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary of JetBlue (“Merger Sub”), pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving corporation (the “Merger”). On October 19, 2022, Spirit announced that its stockholders approved the Merger Agreement.

As a result of the Merger, each existing share (“Share”) of Spirit’s common stock, par value $0.0001 per share, will be converted at the effective time of the Merger into the right to receive an amount in cash per Share, without interest, equal to (a) $33.50 minus (b) (i) to the extent paid, an amount in cash equal to $2.50 per Share and (ii) the lesser of (A) $1.15 and (B) the product of (1) $0.10 multiplied by (2) the number of Additional Prepayments (as defined below) paid prior to the date of the closing of the Merger (the “Closing Date”) (such amount in subclause (B), the “Aggregate Additional Prepayment Amount”).

On October 26, 2022, in accordance with the Merger Agreement, JetBlue paid $2.50 per share to each holder of record as of September 12, 2022, the record date for the special meeting of Spirit stockholders. The total payment came to $272 million.

On or prior to the last business day of each calendar month commencing after December 31, 2022, until the earlier of (a) the Closing Date and (b) the termination of the Merger Agreement in accordance with its terms, JetBlue will pay or cause to be paid to the holders of record of outstanding Shares as of a date not more than five business days prior to the last business day of such month, an amount in cash equal to $0.10 per Share (such amount, the “Additional Prepayment Amount,” each such monthly payment, an “Additional Prepayment”).

The Closing is subject to the satisfaction or waiver of certain closing conditions, including, among other things: (a) receipt of Spirit stockholder approval, which was obtained on October 19, 2022; (b) receipt of applicable regulatory approvals, including approvals from the U.S. Federal Communications Commission, U.S. Federal Aviation Administration and the U.S. Department of Transportation; (c) the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and approval under certain foreign antitrust laws; (d) the absence of any law or order prohibiting the consummation of the transactions; and (e) the absence of any material adverse effect on Spirit (as defined in the Merger Agreement).

Spirit, JetBlue and Merger Sub each make certain customary representations, warranties and covenants, as applicable, in the Merger Agreement.

The Merger Agreement also contains certain provisions relating to efforts to obtain regulatory approval of the Merger, including to provide that JetBlue and Spirit, in connection with obtainingany necessary approval of a governmental entity (including under the HSR Act), will use their respective reasonable best efforts to take, or cause to be taken, all appropriate actions to obtain such approvals, including, to contest, defend and appeal any proceeding brought by a governmental entity challenging or seeking to prohibit the consummation of the Merger, provided that JetBlue shall not be required to take any divestiture actions) if such action would or would reasonably be expected to result in a material adverse effect on JetBlue and its subsidiaries (including Spirit and its subsidiaries) after giving effect to the transactions contemplated by the Merger Agreement, taken as a whole, and in no event shall JetBlue be required to agree to any such divestiture action that, in JetBlue’s discretion, would be reasonably likely to materially and adversely affect the anticipated benefits of the parties to the Northeast

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Alliance Agreement between JetBlue and American Airlines, Inc., dated as of July 15, 2020, and the agreements contemplated thereby. Any such divestiture action may be conditioned upon the closing of the Merger.

The Merger Agreement contains certain customary termination rights for JetBlue and Spirit, including, without limitation, a right for either party to terminate if the Merger is not consummated on or before July 28, 2023, which may be extended to January 28, 2024 and to July 24, 2024 in certain circumstances (such date, as extended, the “Outside Date”) if needed to obtain the required regulatory approvals. Upon the termination of the Merger Agreement under specified circumstances, Spirit will be required to pay JetBlue a breakup fee of $94 million. The Merger Agreement also provides the methodology by which certain expenses of JetBlue will be borne by Spirit. In addition, upon the termination of the Merger Agreement by JetBlue because of a material, uncured breach by Spirit of the Merger Agreement, Spirit will be required to pay JetBlue an amount equal to the sum of all amounts paid by JetBlue to the Spirit stockholders prior to the date of such termination.

In the event that the Merger Agreement is terminated due to either (a) a governmental entity issuing an order or taking any other action permanently enjoining or otherwise prohibiting the Merger under U.S. federal competition laws, or (b) the Merger having not occurred by the Outside Date solely to the extent that the closing condition requiring (i) the waiting period applicable to the consummation of the Merger under the HSR Act (and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Merger contemplated by the Merger Agreement entered into in connection therewith) to have expired or been terminated or (ii) that no governmental entity has issued an order or taken any other action (whether temporary, preliminary or permanent) enjoining or otherwise prohibiting the Merger under U.S. federal competition laws, and that no law shall be in effect making the Merger illegal or preventing the consummation of the Merger under U.S. federal competition laws, in either case, has not been satisfied at a time when all other closing conditions to JetBlue’s obligations to consummate the Merger have been satisfied (or are capable of being satisfied if the closing were to occur on such date of termination), then (i) solely to the extent that the Remaining Parent Regulatory Fee (as defined in the Merger Agreement) is greater than zero, (A) JetBlue will pay directly to the stockholders of Spirit as of a record date that is five business days following the date of such termination an amount per Share in cash equal to the Remaining Regulatory Fee Per Share Amount (as defined in the Merger Agreement) and (B) JetBlue will pay to Spirit an amount equal to the Remaining Regulatory Fee Award Amount, in each case, on the second business day following such record date, and (ii) JetBlue will pay Spirit a fee in the amount of $70 million (the “Additional Parent Regulatory Fee”) within two business days following the date of such termination; provided, however, that neither the Remaining Parent Regulatory Fee nor the Additional Parent Regulatory Fee will be payable by JetBlue pursuant to the terms of the Merger Agreement under specified circumstances.

Refer to Note 3 to our condensed consolidated financial statements for further detail of the $3.5 billion Senior Secured Bridge Facility issued to fund the purchase of Spirit.

Prior to the execution of the Merger Agreement, Spirit terminated the Agreement and Plan of Merger (the "Frontier Merger Agreement"), dated as of February 5, 2022, by and among Frontier Group Holdings, Inc. ("Frontier"), Top Gun Acquisition Corp., and Spirit, in accordance with its terms and pursuant to a Termination Agreement (the "Termination Agreement") among the parties. Consistent with the Frontier Merger Agreement and pursuant to the Termination Agreement, on July 29, 2022, Spirit paid $25 million to Frontier for the reimbursement of transaction expenses incurred by Frontier. In accordance with the Merger Agreement, on August 2, 2022, JetBlue reimbursed Spirit for the $25 million paid to Frontier. This amount is included as Other Assets in the Company's Consolidated Balance Sheet as of September 30, 2022 and reported as Payment for Acquisition in the company's condensed consolidated statements of cash flows for the nine months ended September 30, 2022.

Table of Contents

PART I. FINANCIAL INFORMATION

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

OVERVIEW

~~The~~Third Quarter 2022 Results

In the third quarter of 2022, we returned to profitability with our first adjusted quarterly profit since the beginning of the COVID-19 ~~pandemic continued to have an adverse impact on our business and~~pandemic. We also recorded the highest quarterly revenue in JetBlue's history. However, our operating results in the ~~first~~third quarter ~~of 2022. We have seen continued improvements in our business during the first quarter, which we expect to continue throughout 2022.~~

~~First Quarter 2022 Results~~

~~Our operating results in the first quarter~~ of 2021 and 2020 were adversely impacted by the COVID-19 pandemic. As a result, comparisons of our year-over-year performance are inflated and would not necessarily be indicative of our future operating results. In certain cases, we have also provided comparisons of our ~~first~~third quarter 2022 results to our ~~first~~third quarter 2019 results (or year-over-three), which are ~~more~~better reflective of pre-pandemic operations, allowing for a better understanding of the full impact of the COVID-19 pandemic and the progress of our recovery.

•~~First~~Third quarter system capacity increased by ~~69.2%~~0.3% year-over-year and decreased by ~~0.3% compared to~~(0.5)% versus the ~~first~~third quarter of 2019.

•Revenue for the ~~first~~third quarter of 2022 increased by ~~137.0%~~30.0%, or ~~$1.0 billion~~$590 million year-over-year, to ~~$1.7~~$2.6 billion. Compared to the ~~first~~third quarter of 2019, ~~revenue decreased~~revenue increased by ~~7.2%~~22.8%, or ~~$135~~$476 million.

•Operating revenue per available seat mile ("RASM") for the ~~first~~third quarter of 2022 increased by ~~40.0%~~29.6% year-over-year to ~~11.29~~15.80 cents. This compares to ~~a decrease~~an increase of ~~6.9% from the first quarter of 2019.~~23.4% year-over-three.

•Operating expense for the ~~first~~third quarter of 2022 increased by ~~104.8% year-over-year~~35.7% to ~~$2.1~~$2.4 billion. Compared to the ~~first~~third quarter of 2019, operating expense increased by ~~17.1%~~31.8%, or ~~$308~~$584 million.

•Operating expense per available seat mile ("CASM") for the ~~first~~third quarter of 2022 increased by ~~21.0% year-over-year~~35.3% to ~~13.67~~14.94 cents. This compares to an increase of ~~17.5% from~~32.4% from the ~~first~~third quarter of 2019.

•Our operating expense for the ~~first~~third quarter of 2022, 2021, and 2019 included the effects of special items. Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our operating expense(1) increased by ~~36.3%~~3.5% to ~~$1.5~~$1.6 billion year-over-year. This compares to an increase of ~~13.5% from~~16.3% compared to the ~~first~~third quarter of 2019.~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for details of the special items.~~

•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) ~~decreased~~increased by ~~19.4% year-over-year~~3.2% to ~~9.87~~9.69 cents ~~for~~in the ~~first~~third quarter of ~~2022. This compares~~2022 compared to ~~an increase of 13.9% from~~ the ~~first~~third quarter of ~~2019.~~2021.

•Our reported ~~(loss)~~diluted earnings per share for the ~~first~~third quarter of 2022, 2021, and 2019 were ~~$(0.79), $(0.78),~~$0.18, $0.41, and ~~$0.14,~~$0.63, respectively. Excluding special items, mark-to-market and certain gains and losses on our investments, our adjusted ~~loss per share(1)~~ ~~for the first quarter of 2022 was $(0.80). Excluding special items, our adjusted (loss)~~ earnings per share(1) for the ~~first~~third quarter of 2022 was $0.21. Excluding special items, our adjusted (loss) diluted earnings per share(1) for the third quarter of 2021 and 2019 were ~~$(1.48)~~$(0.12) and ~~$0.16,~~$0.59, respectively.

Network

~~Enabled by our NEA with American, we added three new destinations to our network in the first quarter of 2022.~~


~~Destination~~						~~Service Commenced~~

~~Puerto Vallarta, Mexico~~						~~February 19, 2022~~
~~Kansas City, Missouri~~						~~March 27, 2022~~
~~Milwaukee, Wisconsin~~						~~March 27, 2022~~

~~We expect to continue diversifying our network as we recover from the pandemic. We have previously announced services to the following new destinations:~~


~~Destination~~						~~Service Expected to Commence~~

~~Vancouver, Canada~~						~~June 9, 2022~~
~~Asheville, North Carolina~~						~~June 16, 2022~~

~~(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~~

Following the success of our inaugural transatlantic service between New York's John F. Kennedy International Airport and London, which began in August 2021, we ~~have announced plans to begin~~began service to London from Boston Logan International Airport ~~this summer.~~

~~Fleet~~("Boston") on August 4, 2022.

In ~~February~~June 2022, we ~~exercised~~received permanent slots at London Heathrow Airport for flights starting October 29, 2022, which will help secure our ~~option~~long-term future at the iconic global hub. Permanent slots allow us to ~~purchase 30 additional Airbus A220-300 aircraft under~~retain our existing agreement with Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2022 to 2026. Options for 20 additional A220-300 aircraft remain available to us.

~~Properties~~

~~Reaffirming our commitment to New York, in February 2022, we executed a new lease for our primary corporate offices that will extend our stay~~presence and visibility at the busiest airport in the ~~present Long Island City location until 2039. This new lease contributed $59 million~~United Kingdom as we continue to grow our ~~total operating lease assets and liabilities balances at March 31, 2022.~~base of transatlantic travelers.

~~Environmental, Social, and Governance ("ESG")~~Customer Experience

~~We remain focused on continuing to lead in ESG initiatives. Our efforts include:~~

•In March 2022, the JetBlue Foundation awarded 10 charitable organizations with grants to support and advance their education and mentorship programs. These grants are expected to further the Foundation's mission of increased advocacy for inclusion, gender and racial parity within science, technology, engineering and math education, and aviation.

•~~We expanded our Gateway program to provide a pathway for families of our crewmembers to become pilots through a defined education, training, and time-building program.~~

•~~We made an investment in Electric Power Systems, a leading provider of aerospace battery systems, through JetBlue Technology Ventures ("JTV"), our wholly owned subsidiary.~~

•In April 2022, JTV announced its investment as a limited partner in TPG Rise Climate, the climate investing strategy of TPG's global impact investing platform TPG Rise, further continuing its commitment to creating a more sustainable travel industry.

•~~In April~~September 2022, we announced the ~~execution of an offtake agreement with Aemetis for 125 million gallons of blended sustainable aviation fuel ("SAF") to be delivered over 10 years beginning in 2025.~~

~~Outlook for 2022~~

We are pleased with the momentum in demand and revenue trends which accelerated throughout the first quarter. We expect revenue for the second quarter of 2022 to increase between 11% to 16 % compared to the same period in 2019, sustained by the underlying momentum.

To alleviate the recent operational challenges, we are further moderating our capacity growth for the remainder of the year. For the second quarter of 2022, we expect capacity to increase between 0% to 3% compared to the same period in 2019. Full year 2022 capacity is expected to increase between 0% to 5% compared to 2019. Our original expectation for full year 2022 capacity was an increase of between 11% to 15% versus 2019. We believe our operational investments and capacity reductions will improve our operational performance in the coming months while we expect to fly a record number of customers. Given our reduced capacity outlook, we are also exploring the potential to accelerate the retirement of someexpansion of our ~~older aircraft.~~

~~Operating expenses per available seat mile, excluding fuel~~JetBlue Travel Products Insider Experience program for JetBlue Vacations packages to Nassau, Bahamas. The Insider Experience is currently included, free of charge, in all JetBlue Vacations flight + hotel packages to Aruba, Cancún, Montego Bay, and ~~related taxes, other non-airline operating expenses,~~Punta Cana, making Nassau the fifth destination to offer customers traveling to these destinations unique concierge services. The Insider Experience also features before, during and ~~special items ("CASM Ex-Fuel")(1)~~ for the second quarter of 2022 is expected to increase between 15% to 17%. This increase is primarily attributed to the following factors: certain inefficient, close-in capacity reductions; premium and incentive pay to our frontline crewmembers to support the operation; ramp-up costs to maintain our hiring pace for the summer; and recent changes

~~(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~~

~~to the collective bargaining agreement with our pilots group. We expect full year 2022 CASM Ex-Fuel to increase between 10% to 15% compared to 2019.~~

~~Despite the temporary cost challenges expected in the near term, we expect the Company will return to profitability in the second half of 2022.~~

~~(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, 2022 vs. 2021~~

~~Overview~~

We reported a net loss of $255 million, an operating loss of $367 million and an operating margin of (21.1)% for the three months ended March 31, 2022. This compares to 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. Loss per share was $(0.79) for the three months ended March 31, 2022 compared to $(0.78) for the same period in 2021.

~~Our reported results for the three months ended March 31, 2022 included mark-to-market and certain gains and losses on our investments. Adjusting for these items, our adjusted net loss(1)~~ ~~was $256 million, and adjusted loss per share(1)~~ ~~was $(0.80) for the three months ended March 31, 2022.~~

~~Our reported results for the three months ended March 31, 2021 included the effects of special items. Adjusting for these special items(1), our adjusted net loss(1)~~ ~~was $467 million, adjusted operating loss(1)~~ ~~was $583 million, adjusted operating margin(1)~~ ~~was (79.6)%, and adjusted loss per share(1)~~ ~~was $(1.48) for the three months ended March 31, 2021.~~

On-time performance, as defined by the Department of Transportation ("DOT"), is arrival within 14 minutes of scheduled arrival time. In the first quarter of 2022, our system wide on-time performance was 65.6% compared to 78.9% for the same period in 2021. Our completion factor decreased by 3.0 points to 94.9% in the first quarter of 2022 from 97.9% for the same period in 2021. We experienced operational challenges in the first quarter of 2022 which continued into April.

~~Operating Revenues~~

(Revenues in millions; percent changes based on unrounded numbers) Three Months Ended March 31, Year-over-Year Change
2022 2021 $ %
Passenger revenue $ 1,603 $ 670 $ 933 139.5 %
Other revenue 133 63 70 111.0
Total operating revenues $ 1,736 $ 733 $ 1,003 137.0 %
Average Fare $ 195.99 $ 149.97 $ 46.02 30.7 %
Yield per passenger mile (cents) 14.67 11.52 3.15 27.3
Passenger revenue per ASM (cents) 10.42 7.36 3.06 41.5
Operating revenue per ASM (cents) 11.29 8.06 3.23 40.0
Average stage length (miles) 1,231 1,277 (46) (3.6)
Revenue passengers (thousands) 8,177 4,463 3,714 83.2
Revenue passenger miles (millions) 10,927 5,808 5,119 88.1
Available Seat Miles (ASMs) (millions) 15,383 9,090 6,293 69.2
Load Factor 71.0 % 63.9 % 7.1 pts.

~~Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More~~® Space. The increase in passenger revenue of $933 million, or 139.5%, for the three months ended March 31, 2022 compared to the same period in 2021, was primarily driven by the return in demand for travel as we continue to recover from the COVID-19 pandemic. Revenue passengers increased by 83.2% to 8.2 million for the three months ended March 31, 2022 from 4.5 million for the same period in 2021.

~~Other revenue is primarily comprised of the marketing component of the sales of our TrueBlue~~® points. It also includes revenue from the sale of vacation packages, ground handling fees received from other airlines, and rental income. The increase in other revenue of $70 million, or 111.0%, was principally driven by an increase in marketing revenue associated with our TrueBlue® ~~program due to higher customer spend along with improved metrics from our new co-branded credit card agreements, which became effective in mid-2021.~~

~~(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 first quarter 2022 results were characterized by a very strong demand acceleration, with revenue coming in more than six points ahead of our original forecast of a decline between 11% and 16% compared to the same period in 2019. Load factors improved meaningfully from an average of 62% in January to 80% in March. We delivered positive year-over-three revenue growth in the month of March as we exited the quarter with tremendous revenue momentum driven by very strong underlying travel demand across our business.

~~Operating Expenses~~post-trip support.

In ~~detail, our operating costs per available seat mile, or ASM, were as follows:~~

(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
2022 2021 $ % 2022 2021 % Change
Aircraft fuel and related taxes $ 571 $ 193 $ 378 195.0 % 3.71 2.13 74.3 %
Salaries, wages and benefits 688 521 167 32.0 4.47 5.74 (22.0)
Landing fees and other rents 132 115 17 14.8 0.86 1.26 (32.2)
Depreciation and amortization 143 125 18 15.1 0.93 1.37 (32.0)
Aircraft rent 26 25 1 4.2 0.17 0.27 (38.4)
Sales and marketing 57 23 34 152.9 0.37 0.25 49.4
Maintenance, materials and repairs 152 104 48 45.8 0.99 1.15 (13.8)
Other operating expenses 334 210 124 59.2 2.17 2.31 (5.9)
Special items — (289) 289 (100.0) — (3.18) (100.0)
Total operating expenses $ 2,103 $ 1,027 $ 1,076 104.8 % 13.67 11.30 21.0 %
Total operating expenses excluding special items(1)
$ 2,103 $ 1,316 $ 787 59.8 % 13.67 14.48 (5.6) %

~~Aircraft Fuel~~September 2022, JetBlue Travel Products announced the formation of Troupe, a free and ~~Related Taxes~~

~~Aircraft fuel and related taxes increased by $378 million, or 195.0%,~~collaborative group trip planning app. Aligned with JetBlue's efforts to make travel seamless for ~~the three months ended March 31, 2022 compared~~its customers, Troupe is a convenient app dedicated to the same period in 2021. The average fuel price for the three months ended March 31, 2022 increased by 68.4% to $2.90 per gallon. Our fuel consumption increased by 75.2%, or 85 million gallons, due to the increase in capacity as demand for travel returned. Scheduled departures increased to 78,393 flights, or 78.0%, for the three months ended March 31, 2022. Given the significant rise in fuel costs, we moderated our capacity growth for the first quarter of 2022.

~~Salaries, Wages and Benefits~~

Salaries, wages and benefits increased by $167 million, or 32.0%, for the three months ended March 31, 2022 compared to the same period in 2021. The increase was driven primarily by higher total hours worked by our crewmembers as we align our workforce with the increased demand for travel. As of March 31, 2022, we have approximately 23,500 crewmembers compared to approximately 20,000 crewmembers at March 31, 2021. The average number of full-time equivalent crewmembers increased by 33.2% compared to the same period in 2021. We expect near-term pressures on salaries, wages and benefits driven by premium and incentive pay to our frontline crewmembers to support the operation, ramp-up costs to maintain our hiring pace for the summer, and recent changes to the collective bargaining agreement with our pilots group.

~~Landing Fees and Other Rents~~

~~Landing fees and other rents increased by $17 million, or 14.8%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in departures.~~

~~Depreciation and Amortization~~

Depreciation and amortization increased by $18 million, or 15.1%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily driven by the addition of 16 new aircraft that were placed into service since March 31, 2021. The average number of our operating aircraft increased by 6.0% during the three months ended March 31, 2022 as compared to the same period in 2021.

~~(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~~

~~Sales and Marketing~~

Sales and marketing increased $34 million, or 152.9%, for the three months ended March 31, 2022 compared to the same period in 2021 principally driven by higher credit card fees and computer reservation system charges, which are directly related to return in demand as we continue to recover from the pandemic. Revenue passengers increased by 4 million, or 83.2%, year-over-year.

~~Materials and Repairs~~

Maintenance materials and repairs increased $48 million, or 45.8%, for the three months ended March 31, 2022 compared to the same period in 2021, primarily driven by the increase in flying and timing of heavy maintenance visits and engine maintenance.

~~Other Operating Expenses~~

Other operating expenses consist of the following categories: outside services (including expenses related to fueling, ground handling, skycap, security, and janitorial services), insurance, personnel expenses, professional fees, onboard supplies, shop and office supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes.

Other operating expenses increased $124 million, or 59.2%, for the three months ended March 31, 2022 compared to the same period in 2021 as we ramped up the level of our operations in response to the return in demand for air travel.

~~Special Items~~

~~Special items for the three months ended March 31, 2021 included the following:~~

•~~Contra-expense of $288 million, which represents the amount of federal payroll support grants utilized during the period; and~~

•~~Contra-expenses of $1 million related to the recognition of Employee Retention Credits provided by the CARES Act.~~

~~There were no special items for the three months ended March 31, 2022.~~

~~Operational Statistics~~

~~The following table sets forth our operating statistics for the three months ended March 31, 2022 and 2021:~~

(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

Three Months Ended March 31, Year-over-Year Change
(percent changes based on unrounded numbers) 2022 2021 %
Operational Statistics
Revenue passengers (thousands) 8,177 4,463 83.2
Revenue passenger miles (RPMs) (millions) 10,927 5,808 88.1
Available seat miles (ASMs) (millions) 15,383 9,090 69.2
Load factor 71.0 % 63.9 % 7.1 pts
Aircraft utilization (hours per day) 9.9 5.9 67.8
Average fare $ 195.99 $ 149.97 30.7
Yield per passenger mile (cents) 14.67 11.52 27.3
Passenger revenue per ASM (cents) 10.42 7.36 41.5
Operating revenue per ASM (cents) 11.29 8.06 40.0
Operating expense per ASM (cents) 13.67 11.30 21.0
Operating expense per ASM, excluding fuel(1)
9.87 12.25 (19.4)
Departures 78,393 44,049 78.0
Average stage length (miles) 1,231 1,277 (3.6)
Average number of operating aircraft during period 282.0 266.0 6.0
Average fuel cost per gallon, including fuel taxes $ 2.90 $ 1.72 68.4
Fuel gallons consumed (millions) 197 112 75.2
Average number of full-time equivalent crewmembers 19,304 14,493 33.2
taking as much work off planners' plates as possible. Troupe brings groups together to decide on all the important details, so one person does not have to do it alone, presenting travelers with a stress-free experience from start to finish.

~~Historical~~In October 2022, we announced a Cash + Points redemption option for JetBlue Vacations, which will allow customers to use TrueBlue points to book their entire vacation package (minus insurance and certain taxes & fees), where previously they could only use their points towards the flight portion of a flight + hotel package. For JetBlue Vacations customers who are ready to book travel but do not have enough TrueBlue points to cover the full cost of their entire trip, TrueBlue members are now able to make up the difference by using a combination of cash and points towards their flight, hotel, and even a rental car.

Environmental, Social, and Governance ("ESG")

We remain focused on continuing to lead in ESG initiatives. In September 2022, we announced our plans to bolster our transition to sustainable aviation fuel ("SAF") with a new agreement with AIR COMPANY, an innovative carbon technology company creating carbon-negative alcohols and fuels from carbon dioxide ("CO2"). AIR COMPANY has developed and deployed a single-step process for CO2-derived fuel production using renewable electricity to create its novel AIRMADETM SAF product. JetBlue's memorandum of understanding with AIR COMPANY comes on the heels of a direct capital investment into AIR COMPANY's Series A funding round from JetBlue's venture capital subsidiary, JetBlue Ventures.

With this commitment, JetBlue announced its intent to purchase 25 million gallons of AIRMADETM SAF over five years, with a targeted start date in 2027. AIR COMPANY joins JetBlue's growing list of SAF partnerships as it advances its goal to convert 10% of its total fuel usage to SAF on a blended basis by 2030.

Outlook for 2022

We are pleased with the momentum we have seen in demand and revenue trends ~~may not continue. The ongoing COVID-19 pandemic continues to cause disruptions~~which accelerated throughout the third quarter resulting in our ~~operations.~~return to profitability. We expect ~~our operating results~~unit revenue for the fourth quarter of 2022 to ~~significantly fluctuate from quarter-to-quarter in the future due~~increase between 15% to 19% compared to the ~~uncertainties surrounding~~same period in 2019. For the ~~COVID-19 pandemic, its impact on~~fourth quarter of 2022, we expect capacity to increase in a range between 1% to 4% compared to the economy and consumer behavior, and various other factors which are outside of our control. Consequently, we believe quarter-to-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance.

As the aviation industry continues to recover from the impacts of the COVID-19 pandemic, airlines including us, have faced ongoing challenges ranging from the spread of the Omicron variant, staffing ramp up, workforce attrition, weather events, and air traffic delays. To address these challenges, we have announced a series of investments aimed at restoring crewmember and customer confidence for the upcoming summer travel season. These investments are centered around five initiatives:

~~Schedule reduction~~

~~A reduced schedule will offer more buffer and flexibility to recover from operational disruptions and put less stress on crew resources. We originally planned to grow our~~same period in 2019. Full year 2022 capacity ~~by 11%~~is expected to ~~15%~~increase between 0% to 2% compared to 2019. ~~With a reduced schedule, we now plan to grow our~~Our previous expectation for full year 2022 capacity bywas an increase of between 0% to 5%3% versus 2019.

Operating expenses per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items ("CASM Ex-Fuel")(1) for the fourth quarter of 2022 is expected to increase between 8.5% to 10.5% compared to the fourth quarter of 2019. ~~Most importantly, we are reducing our summer schedule by more than 10% from our original plan,~~ This increase is primarily attributed to the following factors:sequential step-down in capacity, timing of maintenance events, and ~~scheduled aircraft utilization will be down by 10% to 15% compared to 2019. Even with the reductions,~~continued operational investments. As previously announced, we expect to ~~grow significantly~~deliver $250 million of cost savings from our new structural cost program and our Embraer E190 retirement plan through 2024. The new structural cost program is expected to deliver run rate savings of approximately $150 million to $200 million through 2024 by leveraging the new Enterprise Planning team to help unlock structural efficiencies across the airline longer-term; and investing in ~~New York's three major airports~~automation across the business, particularly in support of end-of-life maintenance planning as ~~part~~we begin to retire aircraft.

We expect to show benefits from our new structural cost program and our E190 retirement plan in the fourth quarter of ~~the NEA, from 200 flights per day in 2019 to nearly 300 flights per day.~~

~~Hiring~~2022 and ~~training~~

~~Despite reductions in capacity growth, we will proceed with hiring efforts~~through 2024. We expect full year 2022 CASM Ex-Fuel to increase ~~staffing~~between 13% to 14% compared to 2019 and to be profitable again in the fourth quarter.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2022 vs. 2021

Overview

We reported net income of $57 million, operating income of $139 million and an operating margin of 5.4% for the ~~summer, including 5,000 new crewmembers in New York. We have also increased our pilot training team and simulator capacity to meet the increase in demand resulting from pilot attrition.~~

~~Addressing customer call volume and hold times~~

~~Recent operational disruptions have led~~three months ended September 30, 2022. This compares to a ~~record number~~net income of ~~calls into~~$130 million, an operating income of $186 million and an operating margin of 9.4% for the three months ended September 30, 2021. Earnings per diluted share was $0.18 for the third quarter of 2022 compared to $0.40 of earnings per diluted share for the same period in 2021.

Our reported results for the three months ended September 30, 2022 included the effects of special items and certain gains and losses on our ~~customer support center~~investments. Adjusting for these items(1), our adjusted net income(1) was $69 million, adjusted operating income(1) was $152 million, adjusted operating margin(1) was 5.9%, and extended wait times. These disruptions, coupled with a greater number of customers taking advantage of ticket flexibility and calls regarding other COVID-related questions, have taxed customer service teams acrossadjusted earnings per diluted share(1) was $0.21 for the ~~industry. Since last fall, we have onboarded more than 1,100 new hires into customer support and we continue to increase hiring and training while also bringing on outside~~three months ended September 30, 2022.

(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

~~support to help manage call volume. By this summer, we expect to have~~ Our reported results for the three months ended September 30, 2021 included the effects of special items. Adjusting for these special items(1),our ~~largest-ever customer support team ready to support customers~~adjusted net loss(1) was $39 million, adjusted operating loss(1) was $0 million, adjusted operating margin(1) was 0.0%, and adjusted loss per share was $(0.12) for the three months ended September 30, 2021.

On-time performance, as ~~many embark on their first vacation or travel experience since~~defined by the ~~pandemic.~~

~~We are continuing to strengthen staffing for our suite~~Department of digital tools to help customers avoid waiting on hold, including online chat capabilities and support via iMessage. In addition, we are also improving self-service capabilities on our website to offer customers additional options to make changes without calling.

~~Furthermore, we are also working to proactively cancel flights on days when bad weather~~Transportation ("DOT") is ~~forecasted or if we anticipate air traffic control delays due to congestion or air traffic control center staffing shortages. Cancellations well in advance~~arrival within 14 minutes of scheduled ~~departures will allow customers more time~~arrival time. In the third quarter of 2022, our system wide on-time performance was 67.2% compared to ~~adjust their plans.~~63.5% for the same

~~Proactive aircraft maintenance efforts~~period in 2021. Our completion factor was 97.7% in each of the third quarter of 2022 and the same period in 2021.

~~The reduced schedule frees up aircraft time to give us additional opportunities to get ahead~~

Operating Revenues


(Revenues in millions; percent changes based on unrounded numbers)	Three Months Ended September 30,						Year-over-Year Change
	2022			2021			$		%
Passenger revenue	$	2,415		$	1,856		$	559	30.1	%
Other revenue	147			116			31		27.1
Total operating revenues	$	2,562		$	1,972		$	590	30.0	%

Average Fare	$	229.95		$	204.50		$	25.45	12.4	%
Yield per passenger mile (cents)	17.30			14.37			2.93		20.4
Passenger revenue per ASM (cents)	14.89			11.48			3.41		29.7
Operating revenue per ASM (cents)	15.80			12.20			3.60		29.6
Average stage length (miles)	1,191			1,320			(129)		(9.8)
Revenue passengers (thousands)	10,502			9,075			1,427		15.7
Revenue passenger miles (millions)	13,963			12,913			1,050		8.1
Available Seat Miles (ASMs) (millions)	16,217			16,168			49		0.3
Load Factor	86.1		%	79.9		%			6.2		pts.

Passenger revenue is our primary source of ~~planned maintenance programs. We are investing in additional preventative maintenance~~revenue, which includes seat revenue and baggage fees, as well as ~~reserving more aircraft~~revenue from our ancillary product offerings such as ~~spares this summer~~Even More® Space. The increase in passenger revenue of $559 million, or 30.1%, for the three months ended September 30, 2022 compared to ~~reduce~~ the ~~impact of maintenance-related cancellations and delays.~~

With COVID-19 supply chain challenges continuing, we have pre-purchased long lead parts, tools, and equipment as well as added additional inventory of frequently used parts, to mitigate potential delays.

~~Facilities / infrastructure readiness~~

~~This summer, we expect to operate approximately 190 daily flights from JFK~~same period in 2021, was primarily driven by the return in demand for travel as we continue to ~~expand our footprint enabled by~~recover from the ~~NEA. With our heavy concentration in the Northeast and major operation at JFK, ensuring that JFK runs smoothly is essential~~COVID-19 pandemic. Revenue passengers increased to 10.5 million for the ~~entire network. In addition to hiring across workgroups, we are making a number of investments at JFK’s Terminal 5, which include:~~

•~~Redeveloping a portion of the lobby to add more kiosks and open additional space for customer throughput.~~

•~~Re-timing flights~~three months ended September 30, 2022 from 9.1 million for the ~~busiest international markets to ensure sufficient lobby space is available for COVID documentation checks.~~

•~~Smoothing out some of the peaks~~same period in ~~the schedule to ease congestion in the lobby, TSA checkpoint, and gates.~~2021.

•~~Dedicating ground staffing crews at gates across Terminal 5 and adding ground equipment.~~

While summer reliability continues to be the focus, we expect to also see a significant improvement in our airport facilities across focus cities this fall, as new terminals and space become available to support our growth. We plan to consolidate or open new or renovated terminal spaces in LaGuardia, Newark, and Orlando.

~~CONSOLIDATED BALANCE SHEET ANALYSIS~~

~~The following is a discussion of the changes in certain balance sheet data between March 31, 2022, and December 31, 2021.~~

(in millions)
Selected Balance Sheet Data: March 31, 2022 December 31, 2021 $ Change % Change
ASSETS
Cash and cash equivalents 1,834 2,018 (184) (9.1) %
Investment securities 950 824 126 15.4 %
Receivables, less allowance (2022-$3; 2021-$3) 248 207 41 19.8 %
Investment securities (non-current) 110 39 71 183.7 %
LIABILITIES
Accounts payable 624 499 125 24.9 %
Air traffic liability 1,939 1,618 321 19.8 %
Other accrued liabilities 496 359 137 38.5 %
Total debt and finance lease obligations 3,926 4,006 (80) (2.0) %

(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

~~Cash~~Operating Expenses

In detail, our operating costs per available seat mile ("ASM") were as follows:


(in millions; per ASM data in cents; percent changes based on unrounded numbers)	Three Months Ended September 30,				Year-over-Year Change				Cents per ASM
	2022		2021		$		%		2022	2021	% Change
Aircraft fuel and related taxes	$	825	$	443	$	382	86.0	%	5.08	2.74	85.5	%
Salaries, wages and benefits	675		620		55		8.9		4.16	3.83	8.6
Landing fees and other rents	131		182		(51)		(27.9)		0.81	1.12	(28.1)
Depreciation and amortization	147		140		7		5.2		0.90	0.86	4.9
Aircraft rent	30		25		5		20.7		0.19	0.16	20.4
Sales and marketing	81		60		21		35.4		0.50	0.37	35.0
Maintenance, materials and repairs	178		205		(27)		(13.0)		1.10	1.27	(13.3)
Other operating expenses	343		297		46		15.4		2.12	1.84	15.0
Special items	13		(186)		199		(106.8)		0.08	(1.15)	(106.8)
Total operating expenses	$	2,423	$	1,786	$	637	35.7	%	14.94	11.04	35.3	%

Total operating expenses excluding special items(1)	$	2,410	$	1,972	$	438	22.2	%	14.86	12.19	21.9	%

Aircraft Fuel and ~~cash equivalents~~Related Taxes

~~Cash~~Aircraft fuel and ~~cash equivalents decreased~~related taxes increased by ~~$184~~$382 million, for the three months ended September 30, 2022 compared to the same period in 2021. The average fuel price for the three months ended September 30, 2022 increased by 84.0% to $3.84 per gallon. Our fuel consumption for this period increased by 1.1%, or 2 million gallons, due to the increase in capacity as demand for travel returned.

Salaries, Wages and Benefits

Salaries, wages and benefits increased $55 million, or ~~9.1%~~8.9%, for the three months ended September 30, 2022 compared to ~~$1.8 billion~~the same period in 2021. The increase was driven primarily by higher total hours worked by our crewmembers as we align our workforce with the increased demand for travel and the need to support our operation. As of ~~March 31, 2022. Notable outflows~~September 30, 2022, we have approximately 24,500 crewmembers compared to approximately 21,250 crewmembers at September 30, 2021. The average number of full-time equivalent crewmembers increased by 24.4% compared to the same period in 2021.

Landing Fees and Other Rents

Landing fees and other rents decreased $51 million, or (27.9)%, for the three months ended September 30, 2022 compared to the same period in 2021 primarily due to a decrease in rates offset by a 10.3% increase in departures.

Depreciation and Amortization

Depreciation and amortization increased $7 million, or 5.2%, for the three months ended September 30, 2022 compared to the same period in 2021 primarily driven by the addition of eight new aircraft that were placed into service since September 30, 2021. The average number of our operating aircraft increased by 3.7% during the three months ended ~~March 31,~~September 30, 2022 ~~include: $200 million of net purchases~~as compared to the same period in ~~investment securities, $134 million in capital expenditures inclusive of predelivery deposits for flight equipment,~~2021.

Sales and ~~$83 million in repayment of long-term debt~~Marketing

Sales and ~~finance lease obligations. These outflows were partially offset by net cash provided by operating activities of $247 million.~~

~~Investment securities~~

~~Investment securities~~ marketing increased ~~by $126~~$21 million, or ~~15.4%~~35.4%, ~~primarily driven by~~for the ~~net purchases of commercial paper and time deposit which had maturities of between~~ three ~~and twelve~~ months ~~at March 31, 2022.~~

~~Receivables, less allowance~~

~~Receivables increased by $41 million, or 19.8%, mainly as a result of~~ended September 30, 2022 compared to the ~~continuing improvements~~same period in ~~demand which led to an increase in receivables from our credit card processors.~~

~~Investment securities (non-current)~~

~~Long-term investment securities increased by $71 million, or 183.7%,~~2021 principally driven by ~~the purchases of corporate bonds in the first quarter of 2022.~~

~~Accounts payable~~

~~Accounts payable increased by $125 million, or 24.9%, primarily due to increases in operating expenses attributed~~higher credit card fees and computer reservation system charges, which are directly related to the ~~continuing ramp up of our operations coupled with timing of payments.~~

~~Air traffic liability~~

~~Air traffic liability increased by $321 million, or 19.8%, driven by the continuing improvements~~return in demand as consumer confidence in travel grows and customers resumed booking travel further in advance. Payments collected from customers for future travel is recorded on our balance sheet until the point in time when transportation is provided.

~~Other accrued liabilities~~

Other accrued liabilities increased by $137 million, or 38.5%, primarily due to the timing of passenger tax remittances to governmental authorities. Passenger taxes are collected from customers when tickets are sold and remitted to the authorities at a later date. The increase in passenger tax liability correlates to the increase in demand for travel as we continue to recover from the COVID-19 pandemic. Revenue passengers increased by 1.4 million, or 15.7%, during the three months ended September 30, 2022 as compared to the same period in 2021.

~~Total debt~~Maintenance Materials and ~~finance lease obligations~~

~~Total debt and finance lease obligations decreased by $80 million, or 2.0%, mainly due to principal payments made in the first quarter of 2022.~~Repairs

(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

Maintenance materials and repairs decreased $27 million, or (13.0)%, for the three months ended September 30, 2022 compared to the same period in 2021, primarily driven by the timing of engine maintenance, offset by an increase in heavy maintenance and power by the hour based maintenance driven by the increase in aircraft utilization.

Other Operating Expenses

Other operating expenses increased $46 million, or 15.4%, for the three months ended September 30, 2022 compared to the same period in 2021 as we ramped up the level of our operations in response to the return in demand for air travel.

Special Items

For the three months ended September 30, 2022, special items included:

•$11 million in acquisition costs relating to our merger with Spirit; and

•$2 million relating to engine exchanges related to the retirement of our Embraer E190 fleet.

Special items for the three months ended September 30, 2021 included the following:

•Contra-expense of $(186) million which represents the amount of federal payroll support grants utilized during the period.

Nine Months Ended September 30, 2022 vs. 2021

Overview

We reported a net loss of $386 million, an operating loss of $341 million and an operating margin of (5.1)% for the nine months ended September 30, 2022. This compares to a net loss of $53 million, an operating income of $39 million and an operating margin of 0.9% for the nine months ended September 30, 2021. Loss per share was $(1.20) for the nine months ended September 30, 2022 compared to $(0.17) for the same period in 2021.

Our reported results for the nine months ended September 30, 2022 included the effects of special items and certain gains and losses on investments. Adjusted for these items, our adjusted net loss(1) was $332 million, adjusted operating loss(1) was $284 million, adjusted operating margin(1) was (4.2)%, and adjusted loss per share(1) was $(1.03) for the nine months ended September 30, 2022.

Our reported results for the nine months ended September 30, 2021 included the effects of special items. Adjusting for these special items, our adjusted net loss(1) was $685 million, adjusted operating loss(1) was $802 million, adjusted operating margin(1) was (19.1)%, and adjusted loss per share(1) was $(2.16) for the nine months ended September 30, 2021.

(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

Operating Revenues


(Revenues in millions; percent changes based on unrounded numbers)	Nine Months Ended September 30,						Year-over-Year Change
	2022			2021			$		%
Passenger revenue	$	6,319		$	3,913		$	2,406	61.5	%
Other revenue	424			290			134		46.4
Total operating revenues	$	6,743		$	4,203		$	2,540	60.4	%

Average Fare	$	217.34		$	182.22		$	35.12	19.3	%
Yield per passenger mile (cents)	16.26			13.26			3.00		22.7
Passenger revenue per ASM (cents)	13.17			10.06			3.11		30.9
Operating revenue per ASM (cents)	14.05			10.80			3.25		30.0
Average stage length (miles)	1,218			1,293			(75)		(5.8)
Revenue passengers (thousands)	29,075			21,476			7,599		35.4
Revenue passenger miles (millions)	38,857			29,524			9,333		31.6
Available Seat Miles (ASMs) (millions)	48,005			38,902			9,103		23.4
Load Factor	80.9		%	75.9		%			5.0		pts.

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More® Space. The increase in passenger revenue of $2.4 billion, or 61.5%, for the nine months ended September 30, 2022 compared to the same period in 2021, was primarily driven by the return in demand for travel and a 19.3% increase in fares, as we continue to recover from the COVID-19 pandemic. Revenue passengers increased by 35.4% to 29.1 million for the nine months ended September 30, 2022 from 21.5 million for the same period in 2021.

Operating Expenses

In detail, our operating costs per ASM were as follows:


(in millions; per ASM data in cents; percent changes based on unrounded numbers)	Nine Months Ended September 30,				Year-over-Year Change				Cents per ASM
	2022		2021		$		%		2022	2021	% Change
Aircraft fuel and related taxes	$	2,305	$	973	$	1,332	137.0	%	4.80	2.50	92.0	%
Salaries, wages and benefits	2,058		1,718		340		19.8		4.29	4.42	(2.9)
Landing fees and other rents	412		470		(58)		(12.5)		0.86	1.21	(29.1)
Depreciation and amortization	435		398		37		9.4		0.91	1.02	(11.3)
Aircraft rent	83		76		7		10.0		0.17	0.19	(10.9)
Sales and marketing	216		130		86		66.6		0.45	0.33	35.0
Maintenance, materials and repairs	492		472		20		4.0		1.02	1.22	(15.7)
Other operating expenses	1,026		768		258		33.5		2.14	1.97	8.2
Special items	57		(841)		898		106.8		0.12	(2.16)	105.5
Total operating expenses	$	7,084	$	4,164	$	2,920	70.1	%	14.76	10.70	37.9	%

Total operating expenses excluding special items(1)	$	7,027	$	5,005	$	2,022	40.4	%	14.64	12.86	13.8	%

Aircraft Fuel and Related Taxes

Aircraft fuel and related taxes increased by $1.3 billion, or 137.0%, for the nine months ended September 30, 2022 compared to the same period in 2021. The average fuel price for the nine months ended September 30, 2022 increased by 89.4% to $3.68 per gallon. Our fuel consumption increased by 25.1%, or 125 million gallons, due to the increase in capacity as

(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

demand for travel returned. Scheduled departures increased to 246,653 flights, or 31.0%, for the nine months ended September 30, 2022.

Salaries, Wages and Benefits

Salaries, wages and benefits increased by $340 million, or 19.8%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was driven primarily by higher total hours worked by our crewmembers as we align our workforce with the increased demand for travel and the need for premium and incentive pay to support our operation. As of September 30, 2022, we have approximately 24,500 crewmembers compared to approximately 21,250 crewmembers at September 30, 2021.

Landing Fees and Other Rents

Landing fees and other rents decreased by $58 million, or (12.5%), for the nine months ended September 30, 2022 compared to the same period in 2021 primarily due to a decrease in rates offset by a 31% increase in departures.

Depreciation and Amortization

Depreciation and amortization increased by $37 million, or 9.4%, for the nine months ended September 30, 2022 compared to the same period in 2021. This increase was primarily attributed to the addition of eight new aircraft that were placed into service since September 30, 2021. The average number of aircraft increased by 5.0% during the nine months ended September 30, 2022 as compared to the same period in 2021.

Aircraft Rent

Aircraft rent increased $7 million, or 10.0%, for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was driven primarily by an increase of 24 leased engines in 2022.

Sales and Marketing

Sales and marketing increased $86 million, or 66.6%, for the nine months ended September 30, 2022 compared to the same period in 2021, driven by higher credit card fees and computer reservation system charges, which are directly related to demand increases as we continue to recover from the COVID-19 pandemic. Revenue passengers for the nine months ended September 30, 2022 increased by 7.6 million, or 35.4%, year-over-year.

Maintenance Materials and Repairs

Maintenance materials and repairs increased $20 million, or 4.0%, for the nine months ended September 30, 2022 compared to the same period in 2021, primarily driven by the timing of engine maintenance, offset by an increase in heavy maintenance and power by the hour based maintenance driven by the increase in aircraft utilization.

Other Operating Expenses

Other operating expenses increased $258 million, or 33.5%, for the nine months ended September 30, 2022 compared to the same period in 2021 as we ramped up the level of our operations in response to the return in demand for air travel.

Special Items

Special items for the nine months ended September 30, 2022 included the following:

•$32 million relating to an ALPA ratification bonus and associated payroll taxes;

•$18 million in acquisition costs relating to our merger with Spirit;

•$5 million relating to an impairment on our Embraer E190 fleet; and

•$2 million relating to engine exchanges as part of our Embraer E190 retirement plan.

For the nine months ended September 30, 2021, special items included:

(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.

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

•Contra-expense of $(830) million, which represents the amount of federal payroll support grants utilized during the period; and

•Contra-expense of $(11) million related to the recognition of Employee Retention Credits provided by the CARES Act.

Operational Statistics

The following table sets forth our operating statistics for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,						Year-over-Year Change		Nine Months Ended September 30,						Year-over-Year Change
(percent changes based on unrounded numbers)	2022			2021			%		2022			2021			%
Operational Statistics
Revenue passengers (thousands)	10,502			9,075			15.7		29,075			21,476			35.4
Revenue passenger miles (RPMs) (millions)	13,963			12,913			8.1		38,857			29,524			31.6
Available seat miles (ASMs) (millions)	16,217			16,168			0.3		48,005			38,902			23.4
Load factor	86.1		%	79.9		%	6.2	pts	80.9		%	75.9		%	5.0	pts
Aircraft utilization (hours per day)	10.1			10.1			—		10.1			8.3			21.7

Average fare	$	229.95		$	204.50		12.4		$	217.34		$	182.22		19.3
Yield per passenger mile (cents)	17.30			14.37			20.4		16.26			13.26			22.7
Passenger revenue per ASM (cents)	14.89			11.48			29.7		13.17			10.06			30.9
Operating revenue per ASM (cents)	15.80			12.20			29.6		14.05			10.80			30.0
Operating expense per ASM (cents)	14.94			11.04			35.3		14.76			10.70			37.9
Operating expense per ASM, excluding fuel(1)	9.69			9.39			3.2		9.75			10.29			(5.3)

Departures	84,805			76,918			10.3		246,653			188,220			31.0
Average stage length (miles)	1,191			1,320			(9.8)		1,218			1,293			(5.8)
Average number of operating aircraft during period	286			276			3.7		284			270			5.0
Average fuel cost per gallon, including fuel taxes	$	3.84		$	2.08		84.0		$	3.68		$	1.94		89.4
Fuel gallons consumed (millions)	215			213			1.1		626			501			25.1
Average number of full-time equivalent crewmembers									20,013			16,088			24.4

We expect our operating results to significantly fluctuate from quarter-to-quarter in the future due to the uncertainties related to economic conditions, cost of aircraft fuel, recovery from the COVID-19 pandemic, and various other factors which are outside of our control. Consequently, we believe quarter-to-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance.

(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.

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

CONSOLIDATED BALANCE SHEET ANALYSIS

The following is a discussion of the significant changes between September 30, 2022, and December 31, 2021.


(in millions)
Selected Balance Sheet Data:	September 30, 2022	December 31, 2021	$ Change	% Change
ASSETS
Cash and cash equivalents	1,401	2,018	(617)	(30.6)	%
Investment securities	692	824	(132)	(16.0)	%
Receivables, less allowance (2022-$3; 2021-$3)	298	207	91	44.1	%
Flight equipment	11,579	11,161	418	3.7	%
LIABILITIES
Air traffic liability	1,745	1,618	127	7.9	%
Other accrued liabilities	421	359	62	17.5	%
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,235	3,651	(416)	(11.4)	%

Cash and cash equivalents

Cash and cash equivalents decreased by $617 million, or (30.6)%, to $1.4 billion as of September 30, 2022. Notable outflows during the nine months ended September 30, 2022 include: $599 million in capital expenditures inclusive of predelivery deposits for flight equipment, $21 million of net purchases in investment securities, and $255 million in repayment of long-term debt and finance lease obligations. These outflows were partially offset by net cash provided by operating activities of $321 million.

Investment securities

Investment securities decreased by $132 million, or (16.0)%, primarily driven by the net purchases of commercial paper and time deposits which had maturities between three and twelve months at September 30, 2022.

Receivables, less allowance

Receivables increased by $91 million, primarily driven by an increase in credit card receivables due to an increase in sales.

Flight equipment

Flight equipment increased by $418 million, or 3.7%, principally driven by aircraft capital expenditures made in the first nine months of 2022. Additional information related to our aircraft capital expenditures are provided within our discussion of investing activities under the "Liquidity and Capital Resources" section below.

Air traffic liability

Air traffic liability increased by $127 million, or 7.9%, driven by the improvements in demand as customers began to gain confidence to travel in the midst of the COVID-19 pandemic and resume booking travel further in advance. The cash collected from customers for future travel is recorded on our balance sheet until the point in time that the customer travels.

Other accrued liabilities

Other accrued liabilities increased by $62 million, or 17.5%, primarily as a result of an increase in passenger tax liabilities.

Long-term debt and finance lease obligations

Long-term debt and finance lease obligations decreased by $416 million, or (11.4)%, mainly due to regularly scheduled principal payments made in the first nine months of 2022.

(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.

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

LIQUIDITY AND CAPITAL RESOURCES

The airline business is capital intensive. Our ability to successfully execute our growth plans is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents, investment securities on hand, and available lines of credit. Additionally, our unencumbered assets could be an additional source of liquidity, if necessary.

We believe a healthy liquidity position is a crucial element of our ability to weather any part of the economic cycle while continuing to execute on our plans for profitable growth and increased returns. Our goal is to continue to be diligent with our liquidity, maintain financial flexibility, and be prudent with capital spending.

At ~~March 31,~~September 30, 2022, we had cash, cash equivalents, and short-term investments ~~and long-term marketable securities~~ of approximately ~~$2.9 billion.~~

The COVID-19 pandemic continued to have an adverse impact on our business and operating results in the first quarter of 2022. We have seen continued improvements in our business during the first quarter which we expect to continue throughout 2022. $2.1 billion.

Analysis of Cash Flows

Operating Activities

We rely primarily on operating cash flows to provide working capital for current and future operations. Cash flows from operating activities were ~~$247~~ $321 million and ~~$177 million~~$1.8 billion for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively. ~~Lower~~Higher losses, principally driven by higher operating ~~revenues~~expenses during the nine months ended September 30, 2022, coupled with significant cash flow benefits from the federal grants received under various payroll support programs and the initial cash payments associated with our new co-branded credit card agreements noted for the nine months ended September 30, 2021 all contributed to the ~~increase~~$1.5 billion decrease in operating cash flows.

Investing Activities

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, capital expenditures related to our purchase of flight equipment included ~~$17~~$172 million related to the purchase of four Airbus A220 aircraft, one Airbus A321neo aircraft, and several spare engines; $51 million for spare part ~~purchases, $49~~purchases; $165 million in work-in-progress relating to flight ~~equipment,~~equipment; and ~~$49~~$116 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$19~~$95 million. Investing activities ~~for the current year period~~ also included ~~$200 million in~~the net ~~purchases~~purchase of investment ~~securities.~~securities of $21 million and $25 million paid to Spirit pursuant to our Merger Agreement.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, capital expenditures related to our purchase of flight equipment included ~~$156~~$577 million ~~related to~~for the purchase of ~~three~~eight Airbus A321neo aircraft, five Airbus A220 aircraft, and several spare ~~engines, $20 million for spare part purchases, $12~~engines; $97 million in work-in-progress relating to flight ~~equipment,~~equipment; $34 million for spare part purchases; and $6$33 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$23~~$62 million.

Investing activities ~~during~~for the ~~prior year period~~nine months ended September 30, 2021 also included ~~$270~~$70 million inof net proceeds from maturities of investment securities.

Financing Activities

Financing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 primarily consisted of ~~principal~~the following:

•Principal payments of ~~$83~~$255 million on our outstanding debt and finance lease obligations.

•Entering into a commitment letter for a Senior Secured Bridge Facility of up to $3.5 billion to finance the acquisition of Spirit.

Financing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 primarily consisted of ~~the following:~~

•~~Net proceeds~~debt repayments of ~~$734 million from the issuance of our 0.50% Convertible Senior Notes due 2026; and~~

•Net proceeds of $121 million and $8 million from the issuances of unsecured term loans and warrants, respectively, in connection with the Payroll Support Program 2 under the Consolidated Appropriations Act.

These proceeds were partially offset by principal payments of $644 million on our outstanding debt and finance lease obligations, $550 million of which were associated with the payoff of our revolving Credit and Guaranty Agreement.

In February 2022, we filed an automatic shelf registration statement with the SEC. Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, depositary shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates. We may utilize this shelf registration statement, or a replacement filed with the SEC, in the future to raise capital to fund the continued development of our products and services, the commercialization of our products and services, to repay indebtedness, or for other general corporate purposes. The warrants issued in connection with the various federal government support programs were made, and any$1.8 billion

(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.

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on our outstanding debt and finance lease obligations which included the following payoffs:

•$722 million on our Term Loan;

•$550 million on our Revolving Facility; and

•$115 million on our secured loan balance under the CARES Act Loan Program.

These principal payments were partially offset by:

•Net proceeds of $734 million from the issuance of our 0.50% Convertible Senior Notes due 2026;

•Net proceeds of $276 million and $14 million from the issuances of ~~our underlying~~unsecured term loans and warrants, respectively, in connection with the Payroll Support Program 2 under the Consolidated Appropriations Act and Payroll Support Program 3 under the American Rescue Plan Act; and

•$22 million of proceeds from the issuance of common stock ~~are expected~~related to be made, in reliance on the exemption from the registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for transactions not involving a public offering.our Crewmember Stock Purchase Plan.

Working Capital

We had a working capital ~~deficits~~deficit of ~~$754 million and~~$1.3 billion at September 30, 2022 compared to $170 million at ~~March 31, 2022 and~~ December 31, ~~2021, respectively.~~2021. Our working capital ~~deficit increased~~decreased by ~~$584 million~~$1.1 billion due to several factors, including an overall increase in our air traffic liability which was attributed to the increase in customer bookings asprimarily driven by the return in demand for ~~air travel continues to recover from the COVID-19 pandemic.~~travel.

We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities ~~and government assistance,~~ which may be available to us. We expect to generate positive working capital through our operations. However, we cannot predict what the effect on our business might be from future developments related to the recovery of the COVID-19 pandemic and its impact on the economy and consumer behavior, the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. or international military actions, acts of terrorism, or other external geopolitical events and conditions. We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months.

Contractual Obligations

Our contractual obligations at ~~March 31,~~September 30, 2022 include the following (in billions):


		Payments due in															Payments due in
		Total		2022		2023		2024		2025		2026		Thereafter			Total		2022		2023		2024		2025		2026		Thereafter
Debt and finance lease obligations(1)	Debt and finance lease obligations(1)	$	4.7	$	0.4	$	0.7	$	0.4	$	0.3	$	1.0	$	1.9	Debt and finance lease obligations(1)	$	4.4	$	0.1	$	0.7	$	0.4	$	0.3	$	1.0	$	1.9
Operating lease obligations	Operating lease obligations	1.0		0.1		0.2		0.1		0.1		0.1		0.4		Operating lease obligations	1.0		—		0.1		0.1		0.1		0.1		0.6
Flight equipment purchase obligations(2)	Flight equipment purchase obligations(2)	8.4		0.7		1.6		2.0		1.7		1.4		1.0		Flight equipment purchase obligations(2)	8.0		0.2		1.5		2.1		1.8		1.4		1.0
Other obligations(3)	Other obligations(3)	2.2		0.3		0.4		0.3		0.4		0.4		0.4		Other obligations(3)	2.5		0.1		0.4		0.4		0.4		0.4		0.8
Total	Total	$	16.3	$	1.5	$	2.9	$	2.8	$	2.5	$	2.9	$	3.7	Total	$	15.9	$	0.4	$	2.7	$	3.0	$	2.6	$	2.9	$	4.3

The amounts stated above do not include additional obligations incurred as ofa result of financing activities executed after ~~March 31,~~September 30, 2022. In October 2022, we entered into the Second Amended and Restated Agreement. See Note 3 to condensed consolidated financial statements. Also in October 2022, we paid $2.50 per share to each holder of record in accordance with the Merger Agreement totaling $272 million. See Note 11 to condensed consolidated financial statements.

(1) Includes actual interest and estimated interest for floating-rate debt based on ~~March 31,~~September 30, 2022 rates.

(2) Amounts represent obligations based on the current delivery schedule set forth in our Airbus order book as of ~~March 31,~~September 30, 2022.

(3) Amounts include non-cancelable commitments for the purchase of goods and services.

As of ~~March 31,~~September 30, 2022, we believe we are in compliance with the covenants of our debt and lease agreements. We have approximately ~~$32~~$40 million of restricted cash pledged under standby letters of credit related to certain leases that will expire at the end of the related lease terms.

As of March 31, 2022, we operated a fleet of 130 Airbus A320 aircraft, 63 Airbus A321 aircraft, 21 Airbus A321neo aircraft, eight Airbus A220 aircraft, and 60 Embraer E190 aircraft. Of our fleet, 220 are owned by us, 62 are leased under operating leases, and none are leased under finance leases. Our owned aircraft include aircraft associated with sale-leaseback

(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.

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As of September 30, 2022, we operated a fleet of 130 Airbus A320 aircraft, 63 Airbus A321 aircraft, 18 Airbus A321neo aircraft, 4 Airbus A321neo long range aircraft, 12 Airbus A220 aircraft, and 60 Embraer E190 aircraft. Of our fleet, 219 are owned by us, 68 are leased under operating leases, and none are leased under finance leases. Our owned aircraft include aircraft associated with sale-leaseback transactions that did not qualify as sales for accounting purposes. As of ~~March 31,~~September 30, 2022, the average age of our operating fleet ~~was 11.9~~ was 12 years.

Our aircraft order book as of ~~March 31,~~September 30, 2022 is as follows:


Year	Year	Airbus A321neo	Airbus A220	Total	Year	Airbus A321neo	Airbus A220	Total
2022	2022	3	10	13	2022	2	2	4
2023	2023	11	21	32	2023	11	18	29
2024	2024	13	27	40	2024	13	30	43
2025	2025	11	20	31	2025	11	24	35
2026	2026	12	14	26	2026	12	14	26
2027	2027	14	—	14	2027	14	—	14

Total	Total	64	92	156	Total	63	88	151

In ~~February~~September 2022, we ~~received notice from~~signed an amendment to the Airbus ~~of anticipated~~A220 purchase agreement, delaying the delivery ~~delays~~dates for ~~the~~certain A220 aircraft. The table above represents the current delivery schedule set forth in our Airbus order book as of ~~March 31,~~September 30, 2022. However, we note that due to Airbus delivery delays, we ~~expect a~~anticipate delivery in 2023 of ~~a maximum of nine Airbus~~14 A220 aircraft ~~in 2022.~~and 8 A321neo aircraft.

Expenditures for our aircraft and spare engines include estimated amounts for contractual price escalations and predelivery deposits. We expect to meet our predelivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits required ~~six~~6 to 24 months prior to delivery. Any predelivery deposits paid by the issuance of notes are fully repaid at the time of delivery of the related aircraft.

Depending on market conditions, we anticipate ~~using a mix of~~paying in cash ~~and debt financing~~ for all scheduled aircraft ~~scheduled for delivery~~deliveries in 2022. For deliveries after 2022, although we believe debt and/or lease financing should be available to us, we cannot give any assurance that we will be able to secure financing on attractive terms, if at all. While these financings may or may not result in an increase in liabilities on our balance sheet, we expect our fixed costs to increase regardless of the financing method ultimately chosen. To the extent we cannot secure financing on terms we deem attractive, we may be required to pay in cash, further modify our aircraft acquisition plans, or incur higher than anticipated financing costs.

Off-Balance Sheet Arrangements

Although some of our aircraft lease arrangements are with variable interest entities, as defined by Topic 810, Consolidations of the FASB Codification, none of them require consolidation in our condensed consolidated financial statements. Our decision to finance these aircraft through operating leases rather than through debt was based on an analysis of the cash flows and tax consequences of each financing alternative and a consideration of liquidity implications. We are responsible for all maintenance, insurance and other costs associated with operating these aircraft; however, we have not made any residual value or other guarantees to our lessors.

We have determined that we hold a variable interest in, but are not the primary beneficiary of, certain pass-through trusts. The beneficiaries of these pass-through trusts are the purchasers of equipment notes issued by us to finance the acquisition of aircraft. They maintain liquidity facilities whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs.

(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.

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

We have also made certain guarantees and indemnities to other unrelated parties that are not reflected on our balance sheet, which we believe will not have a significant impact on our results of operations, financial condition or cash flows. We have no other off-balance sheet arrangements.

~~(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~~

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates included in our 2021 Form 10-K.

Forward-Looking Information

This Report (or otherwise made by JetBlue or on JetBlue’s behalf) ~~contain~~contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended or ("the Securities ~~Act,~~Act"), and Section 21E of the Securities Exchange Act of 1934, as amended or ("the Exchange ~~Act,~~Act"), which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. When used in this document and in documents incorporated herein by reference, the words “expects,” “plans,” “intends,” “anticipates,” “indicates,” “remains,” “believes,” “estimates,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “goals,” “targets” and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the ~~coronavirus (“COVID-19”)~~COVID-19 pandemic including new and existing variants, and the outbreak of any other disease or similar public health threat that affects travel demand or behavior; restrictions on our business related to the financing we accepted under various federal government support programs such as the Coronavirus Aid, Relief, and Economic Security Act, the Consolidated Appropriations Act, and the American Rescue Plan Act; our significant fixed obligations and substantial indebtedness; risk associated with execution of our strategic operating plans in the near-term and long-term; the recording of a material impairment loss of tangible or intangible assets; our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our reliance on high daily aircraft utilization; our ability to implement our growth strategy; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on a limited number of suppliers, including for aircraft, aircraft engines and parts and vulnerability to delays by those suppliers; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; the outcome of the lawsuit filed by the Department of Justice and certain state Attorneys General against us related to our Northeast Alliance entered into with American Airlines, our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional domestic or foreign government regulation, including new or increased tariffs; changes in our industry due to other airlines' financial condition; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; adverse weather conditions or natural disasters; external geopolitical events and conditions; the ~~outcome~~occurrence of any ~~discussions between~~event, change or other circumstances that could give rise to the right of JetBlue ~~and~~or Spirit Airlines Inc. ("Spirit") ~~with respect~~or both of them to terminate the Merger Agreement; failure to obtain applicable regulatory approval in a ~~possible transaction, including~~timely manner or otherwise and the ~~possibility that the parties will not agree~~potential financial consequences thereof; failure to ~~pursue a business combination transaction or that the terms of any such transaction will be materially different from those previously announced; the~~satisfy other closing conditions to the ~~completion~~transaction with Spirit; failure of the ~~possible transaction, including~~parties to consummate the ~~receipt of any required stockholder and regulatory approvals, and, in particular, our expectation as to the likelihood of receipt of antitrust approvals;~~transaction; JetBlue’s ability to finance the ~~possible~~ transaction with Spirit and the indebtedness JetBlue expects to incur in connection with the ~~possible~~ transaction; the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate Spirit’s operations with those of JetBlue; ~~and~~ the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the ~~possible transaction.~~transaction with Spirit; failure to realize anticipated benefits of the combined operations; demand for the combined company’s services; the growth, change and competitive landscape of the markets in which the combined company participates; expected seasonality trends; diversion of managements’ attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction with Spirit; risks related to investor and rating agency perceptions of each of the parties and their respective business, operations, financial condition and the industry in which they operate; risks related to the potential impact of general economic, political and market factors on the companies or the transaction with Spirit; and ongoing and increase in costs related to IT network security. It is routine for our internal projections

(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.

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

and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base our expectations may change prior to the end of each quarter or year. Any outlook or forecasts in this document have been prepared without taking into account or consideration ~~a possible~~the transaction with Spirit.

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this Report, could cause our results to differ materially from those expressed in the forward-looking statements. Further information concerning these and other factors is contained in JetBlue's filings with the Securities and Exchange Commission, or SEC, including but not limited to, JetBlue's 2021 Annual Report on Form 10-K. In light of these

~~(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~~

risks and uncertainties, the forward-looking events discussed in this Report might not occur. Our forward-looking statements speak only as of the date of this Report. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Where You Can Find Other Information

Our website is www.jetblue.com. Information contained on our website is not part of this Report. Information we furnish or file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to or exhibits included in these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available at the SEC’s website at www.sec.gov.

(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.

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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.~~("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. 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~~fuel and ~~Related Taxes, Other Non-Airline Operating Expenses,~~related taxes, other non-airline operating expenses, and ~~Special Items~~special items ("CASM Ex-Fuel")

Operating expenses per available seat mile ~~or CASM,~~("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.

In 2022, special items include an ALPA ratification bonus and associated payroll taxes, an impairment on our E-190 fleet, fleet retirement costs, and expenses relating to the Spirit acquisition.

Special items for ~~the three months ended March 31,~~ 2021 include contra-expenses recognized on the utilization of ~~payroll support~~federal grants received under ~~the Consolidated Appropriations Act, 2021, and~~various payroll support programs, contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

~~For the three months ended March 31,~~Special items for 2019 ~~special items~~ include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement.

~~There were no special items for the three months ended March 31, 2022.~~

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,
2022 2021 2019
($ in millions; per ASM data in cents) $ per ASM $ per ASM $ per ASM
Total operating expenses $ 2,103 $ 13.67 $ 1,027 $ 11.30 $ 1,795 $ 11.63
Less:
Aircraft fuel and related taxes 571 3.71 193 2.13 437 2.83
Other non-airline expenses 14 0.09 10 0.10 9 0.06
Special items — — (289) (3.18) 12 0.08
Operating expenses, excluding fuel $ 1,518 $ 9.87 $ 1,113 $ 12.25 $ 1,337 $ 8.66

2022 vs. 2021


NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM		$		per ASM
Total operating expenses	$	2,423	$	14.94	$	1,786	$	11.04	$	7,084	$	14.76	$	4,164	$	10.70
Less:
Aircraft fuel and related taxes	825		5.08		443		2.74		2,305		4.80		973		2.50
Other non-airline expenses	14		0.09		11		0.06		43		0.09		30		0.07
Special items	13		0.08		(186)		(1.15)		57		0.12		(841)		(2.16)
Operating expenses, excluding fuel	$	1,571	$	9.69	$	1,518	$	9.39	$	4,679	$	9.75	$	4,002	$	10.29

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PART I. FINANCIAL INFORMATION

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

2022 vs. 2019


NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
	Three Months Ended Sept,								Nine Months Ended Sept 30,
	2022				2019				2022				2019
($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM		$		per ASM
Total operating expenses	$	2,423	$	14.94	$	1,839	$	11.29	$	7,084	$	14.76	$	5,490	$	11.50
Less:
Aircraft fuel and related taxes	825		5.08		471		2.89		2,305		4.80		1,392		2.92
Other non-airline expenses	14		0.09		10		0.07		43		0.09		32		0.07
Special items	13		0.08		—		—		57		0.12		14		0.03
Operating expenses, excluding fuel	$	1,571	$	9.69	$	1,358	$	8.33	$	4,679	$	9.75	$	4,052	$	8.48

With respect to JetBlue’s CASM ex-fuel guidance, we are unable to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors. Accordingly, a reconciliation to CASM is not available without unreasonable effort.

Operating Expense, (Loss) Income before Taxes, Net (Loss) Income and (Loss) Earnings per Share, excluding Special Items and Net Gain (Loss) on Investments

Our GAAP results in the applicable periods were impacted by credits and charges that were deemed special items.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

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

In 2022, special items include an ALPA ratification bonus and associated payroll taxes, an impairment on our E-190 fleet, fleet retirement costs, and expenses relating to the Spirit acquisition.

~~There were no special items for the three months ended March 31, 2022.~~

~~Mark-to-market and certain gains and losses on our investments were also excluded from our results for the three months ended March 31, 2022.~~

We believe the impact of these items distort our overall trends and that our metrics are 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 impact of these items.

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PART I. FINANCIAL INFORMATION

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

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS AND NET GAIN ON INVESTMENTS
Three Months Ended March 31,
(in millions, except per share amounts) 2022 2021 2019
Total operating revenues $ 1,736 $ 733 $ 1,871
Total operating expenses $ 2,103 $ 1,027 $ 1,795
Less: Special items — (289) 12
Total operating expenses excluding special items $ 2,103 $ 1,316 $ 1,783
Operating (loss) income $ (367) $ (294) $ 76
Add back: Special items — (289) 12
Operating (loss) income excluding special items $ (367) $ (583) $ 88
Operating margin excluding special items (21.1) % (79.6) % 4.7 %
(Loss) income before income taxes $ (398) $ (347) $ 58
Add back: Special items — (289) 12
Less: Net gain on investments 2 — —
(Loss) income before income taxes excluding special items and net gain on investments $ (400) $ (636) $ 70
Pre-tax margin excluding special items (23.0) % (86.7) % 3.7 %
Net (loss) income $ (255) $ (247) $ 42
Add back: Special items — (289) 12
Less: Income tax (expense) benefit related to special items — (69) 3
Less: Net gain on investments 2 — —
Less: Income tax (expense) related to gain on investments (1) — —
Net (loss) income excluding special items and net gain on investments $ (256) $ (467) $ 51
(Loss) Earnings Per Common Share:
Basic $ (0.79) $ (0.78) $ 0.14
Add back: Special items, net of tax — (0.70) 0.02
Less: Net gain on investments, net of tax 0.01 — —
Basic excluding special items and net gain on investments $ (0.80) $ (1.48) $ 0.16
Diluted $ (0.79) $ (0.78) $ 0.14
Add back: Special items, net of tax — (0.70) 0.02
Less: Net gain on investments, net of tax 0.01 — —
Diluted excluding special items and net gain on investments $ (0.80) $ (1.48) $ 0.16
2022 vs. 2021


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS AND NET GAIN (LOSS) ON INVESTMENTS
	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except per share amounts)	2022			2021			2022			2021
Total operating revenues	$	2,562		$	1,972		$	6,743		$	4,203

Total operating expenses	$	2,423		$	1,786		$	7,084		$	4,164
Less: Special items	13			(186)			57			(841)
Total operating expenses excluding special items	$	2,410		$	1,972		$	7,027		$	5,005

Operating income (loss)	$	139		$	186		$	(341)		$	39
Add back: Special items	13			(186)			57			(841)
Operating income (loss) excluding special items	$	152		$	—		$	(284)		$	(802)

Operating margin excluding special items	5.9		%	—		%	(4.2)		%	(19.1)		%

Income (loss) before income taxes	$	105		$	190		$	(443)		$	(100)
Add back: Special items	13			(186)			57			(841)
Less: Net gain (loss) on investments	—			54			(4)			57
Income (loss) before income taxes excluding special items and net gain (loss) on investments	$	118		$	(50)		$	(382)		$	(998)

Pre-tax margin excluding special items	4.6		%	(2.6)		%	(5.7)		%	(23.8)		%

Net income (loss)	$	57		$	130		$	(386)		$	(53)
Add back: Special items	13			(186)			57			(841)
Less: Income tax (expense) benefit related to special items	1			(55)			7			(250)
Less: Net gain (loss) on investments	—			54			(4)			57
Less: Income tax (expense) benefit related to net gain (loss) on investments	—			(16)			—			(16)
Net income (loss) excluding special items and net gain (loss) on investments	$	69		$	(39)		$	(332)		$	(685)

Earnings Per Common Share:
Basic	$	0.18		$	0.41		$	(1.20)		$	(0.17)
Add back: Special items, net of tax	0.03			(0.41)			0.16			(1.86)
Less: Net gain (loss) on investments, net of tax	—			0.12			(0.01)			0.13
Basic excluding special items and net gain (loss) on investments	$	0.21		$	(0.12)		$	(1.03)		$	(2.16)

Diluted	$	0.18		$	0.40		$	(1.20)		$	(0.17)
Add back: Special items, net of tax	0.03			(0.40)			0.16			(1.86)
Less: Net gain (loss) on investments, net of tax	—			0.12			(0.01)			0.13
Diluted excluding special items and net gain (loss) on investments	$	0.21		$	(0.12)		$	(1.03)		$	(2.16)

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2022 vs. 2019


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS AND NET GAIN (LOSS) ON INVESTMENTS
	Three months ended September 30,						Nine Months Ended September 30,
(in millions, except per share amounts)	2022			2019			2022			2019
Total operating revenues	$	2,562		$	2,086		$	6,743		$	6,063

Total operating expenses	$	2,423		$	1,839		$	7,084		$	5,490
Less: Special items	13			—			57			14
Total operating expenses excluding special items	$	2,410		$	1,839		$	7,027		$	5,476

Operating income (loss)	$	139		$	247		$	(341)		$	573
Add back: Special items	13			—			57			14
Operating income (loss) excluding special items	$	152		$	247		$	(284)		$	587

Operating margin excluding special items	5.9		%	11.8		%	(4.2)		%	9.7		%

Income (loss) before income taxes	$	105		$	254		$	(443)		$	548
Add back: Special items	13			—			57			14
Less: Net gain (loss) on investments	—			15			(4)			15
Income (loss) before income taxes excluding special items and net gain (loss) on investments	$	118		$	239		$	(382)		$	547

Pre-tax margin excluding special items	4.6		%	11.4		%	(5.7)		%	9.0		%

Net income (loss)	$	57		$	187		$	(386)		$	408
Add back: Special items	13			—			57			14
Less: Income tax (expense) benefit related to special items	1			—			7			3
Less: Net gain (loss) on investments	—			15			(4)			15
Less: Income tax (expense) benefit related to net gain (loss) on investments	—			(4)			—			(4)
Net income (loss) excluding special items and net gain (loss) on investments	$	69		$	176		$	(332)		$	408

Earnings Per Common Share:
Basic	$	0.18		$	0.63		$	(1.20)		$	1.36
Add back: Special items, net of tax	0.03			—			0.16			0.03
Less: Net gain (loss) on investments, net of tax	—			0.04			(0.01)			0.04
Basic excluding special items and net gain (loss) on investments	$	0.21		$	0.59		$	(1.03)		$	1.35

Diluted	$	0.18		$	0.63		$	(1.20)		$	1.35
Add back: Special items, net of tax	0.03			—			0.16			0.03
Less: Net gain (loss) on investments, net of tax	—			0.04			(0.01)			0.03
Diluted excluding special items and net gain (loss) on investments	$	0.21		$	0.59		$	(1.03)		$	1.35

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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) 2022 2021
Net cash provided by operating activities $ 247 $ 177
Less: Capital expenditures (85) (211)
Less: Predelivery deposits for flight equipment (49) (6)
Free Cash Flow $ 113 $ (40)


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW
	Nine Months Ended September 30,
(in millions)	2022		2021
Net cash provided by operating activities	$	321	$	1,755
Less: Capital expenditures	(483)		(770)
Less: Predelivery deposits for flight equipment	(116)		(33)
Free Cash Flow	$	(278)	$	952

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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 2021 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,~~September 30, 2022 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~~$300 million~~ $321 million. . As of ~~March 31,~~September 30, 2022, we ~~had not~~have hedged ~~any~~27% of our projected fuel requirement for the remainder of 2022.

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 ~~$3.8~~$3.7 billion of our debt and finance lease obligations, with the remaining ~~$0.1 billion~~$64 million having floating interest rates. As of ~~March 31,~~September 30, 2022, if interest rates were on average 100 basis points higher in 2022, our annual interest expense would increase by approximately $1 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 2022 than they were during 2021, our interest income from cash and investment balances would decrease by approximately $1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our money market funds and short-term, interest-bearing ~~investment~~investments 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,~~("CEO"), and our Chief Financial Officer ~~or CFO,~~("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,~~September 30, 2022. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2022.

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,~~September 30, 2022 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. Refer to Note 6 to our condensed 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 2021 Form 10-K as supplemented by Part II, Item 1A "Risk Factors" of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, includes a discussion of our risk factors which are incorporated herein. There have been no material changes from the risk factors associated with our business previously disclosed in our Form ~~10-K.~~10-K and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022.

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

In accordance with the Payroll Support Program Agreement, the Payroll Support Program Extension Agreement, the Payroll Support 3 Agreement, and the Loan Agreement with ~~the~~ Treasury, we ~~are~~have been prohibited from making any share repurchases through September 30, 2022. We ~~have~~ suspended our share repurchase program as of March 31, ~~2020.~~2020, and it remains suspended. The acquisition of treasury stock reflected on our condensed consolidated statement of cash flows for the ~~three~~nine months ended ~~March 31,~~ September 30, 2022 and 2021 represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the respective periods.

In consideration for the Payroll Support 2 Payments, during the ~~three~~nine months ended ~~March 31,~~ September 30, 2021, we issued warrants to purchase approximately ~~0.8~~$1.0 million shares of common stock to ~~the~~ Treasury at an exercise price of $14.43 per share. In consideration for the Payroll Support 3 Payments, during the nine months ended September 30, 2021, we issued warrants to purchase approximately $0.7 million shares of common stock to Treasury at an exercise price of $19.90 per share. See Note 3 to our condensed consolidated financial ~~statements for additional details.~~statements.

ITEM 5. OTHER INFORMATION

~~Executive Compensation Awards~~

On April 28, 2022, the Board approved a form of Performance Cash Award under the JetBlue Airways Corporation 2020 Omnibus Equity Incentive Plan, and two forms of Executive Retention Awards (collectively, the “Awards”), which the Company intends to utilize as forms of short- and long-term compensation to certain members of the Company’s senior leadership team, including the named executive officers. In reviewing and recommending the Awards for approval by the Board, the Compensation Committee, in consultation with its independent 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, and the uncertainty to air travel created thereby. The Awards were designed to retain and motivate our key leaders and to further align their interests with those of our stockholders. When setting the forms of the Awards, the Compensation Committee and the Board considered that such key leader's pay package was reduced substantially as a result of the effects of the pandemic on the Company, notwithstanding their extraordinary leadership during these unprecedented times. In addition, the Compensation Committee and the Board considered the challenges expected over the next several years due to continued uncertainty as to the long-term effects of the COVID-19 pandemic on the industry coupled with certain Government Support (as defined below) restrictions affecting the Company’s ability to provide market-competitive compensation opportunities. These concerns are particularly acute for the Company given these crewleaders’ expertise and demonstrated leadership, which are, to varying degrees, valued and transferrable to other companies both within – and outside – the airline industry.

Each Award is subject to the lapse of compensation restrictions under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, the Payroll Support Program 2 as established by the United States Consolidated Appropriations Act (the “Payroll Support Program 2”), and the Payroll Support Program 3 as established by the American Rescue Plan Act of 2021 (the “Payroll Support Program 3”) (the CARES Act, Payroll Support Program 2 and the Payroll Support Program 3 are collectively referred to as the “Government Support”). 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 from service without cause or for good reason prior to the payment date, the recipient will receive the Award, or a portion thereof, 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.

~~Table of Contents~~

~~PART II. OTHER INFORMATION~~

Upon satisfaction of the terms and conditions of the Executive Retention Awards (“ERAs”) each of the recipients will receive ERAs in the aggregate of the equivalent to a pre-established multiple of their respective base salaries as of April 28, 2022 as follows: Robin Hayes (1.28x), Joanna Geraghty (1.00x), Ursula Hurley (2.62x) and Brandon Nelson (0.99x). Payments pursuant to the Awards, if any, will be made in cash or fully vested shares of the Company’s common stock, as applicable, 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 following the lapse of both the Government Support restrictions and, with respect to Performance Cash Awards, achievement of the performance condition.

The foregoing summary is not complete and is qualified in its entirety by reference to the form of Performance Cash Award and forms of Executive Retention Award Agreement, filed herewith as Exhibits 10.1, 10.2 and 10.3, and each as incorporated by reference herein.None.

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.

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EXHIBIT INDEX


Exhibit Number						Exhibit
~~10.1†~~2.1						Agreement and Plan of Merger, dated July 28, 2022, by and among JetBlue Airways Corporation, Sundown Acquisition Corp., and Spirit Airlines, Inc.incorporated by reference to Exhibit 2.1 to our Current Report on Form ~~of Performance Cash Award Agreement~~8-K /A dated Ju ly 28, 2022 and filed on August 16 , 2022
~~10.2†~~10.1***						Second Amended and Restated Credit and Guaranty Agreement, dated as of October 21, 2022, 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—incorporated by reference to Exhibit 10.1 to our Current Report on Form ~~of Executive Award Agreement (award vesting~~8-K dated October 21, 2022 and filed on ~~May 1, 2023)~~October 24, 2022
~~10.3†~~						~~Form of Executive Award Agreement (award vesting on May 1, 2023, February 1, 2024, and February 1, 2025)~~
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.
***						Information in this exhibit identified by brackets is confidential and has been excluded because it (i) is not material and (ii) is the type of information that the registrant treats as private or confidential.

4348

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:

~~April 29,~~November 2, 2022

By:

/s/ ~~Ursula L. Hurley~~Al Spencer

Al Spencer

Ursula L. Hurley
Chief FinancialVice President, Controller and Principal Accounting Officer

4449


	Available-for-sale securities(1)		Total
Balance of accumulated income, at December 31, 2021	$	—	$	—
Reclassifications into earnings, net of deferred taxes of $0	—		—
Change in fair value, net of deferred taxes of $0	(1)		(1)
Balance of accumulated (loss), at March 31, 2022	$	(1)	$	(1)

Balance of accumulated income, at December 31, 2020	$	—	$	—
Reclassifications into earnings, net of deferred taxes $0	—		—
Change in fair value, net of deferred taxes of $0	—		—
Balance of accumulated income, at March 31, 2021	$	—	$	—