David Barger - Chief Executive officer, President, Director and Member of Airline Safety Committee Mark D. Powers - Chief Financial Officer and Executive Vice President Robin Hayes - Chief Commercial Officer and Executive Vice President

Jamie N. Baker - JP Morgan Chase & Co, Research Division Michael Linenberg - Deutsche Bank AG, Research Division David E. Fintzen - Barclays Capital, Research Division John D. Godyn - Morgan Stanley, Research Division Duane Pfennigwerth - Evercore Partners Inc., Research Division Savanthi Syth - Raymond James & Associates, Inc., Research Division Daniel McKenzie - The Buckingham Research Group Incorporated Hunter K. Keay - Wolfe Trahan & Co. Bob McAdoo - Imperial Capital, LLC, Research Division Glenn D. Engel - BofA Merrill Lynch, Research Division Helane R. Becker - Cowen Securities LLC, Research Division Justine Fisher - Goldman Sachs Group Inc., Research Division

Good morning, ladies and gentlemen, and welcome to the JetBlue Airways First Quarter 2013 Conference Call. Today's call is being recorded. We have on the call today, Dave Barger, JetBlue's CEO; and Mark Powers, JetBlue's CFO. Also on call for Q&A is Robin Hayes, JetBlue's Chief Commercial Officer. As a reminder, this call includes forward-looking statements about future events. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For additional information concerning factors that could cause results to differ from the forward-looking statements, please refer to the company's annual and periodic reports filed with the Securities and Exchange Commission. This call also references non-GAAP results. You can find the reconciliation of these non-GAAP results in JetBlue's earnings press release on Investor Relations section of the company's website at jetblue.com. At this time, I'd like to turn the call over to Jeff Barger. Please go ahead.

Thank you, Adrienne, good morning, everyone and thank you for joining us. This morning, we reported first quarter net income of $14 million or $0.05 per diluted share, our 12th consecutive quarter of profitability. Operating margin was 4.5%, a decrease of 2.9 points compared to last year, driven primarily by Hurricane Sandy-related demand weakness in the Northeast during the peak President's Day travel period, and approximately $20 million of higher than expected maintenance cost during the quarter. Although the first quarter was challenging on several fronts, we remained focus on running a safe, reliable airline and delivering excellent service to our customers. I'd like to take this opportunity to thank our 15,000 crew members for all their hard work during the quarter. I would also like to thank all of our crew members who helped support customers and fellow crew members impacted by the tragedy in Boston last week. Our thoughts and prayers are with the victims and their families. Of course, JetBlue will continue to do whatever it can to help in the months ahead. We have an outstanding team of more than 2,000 crew members based in Boston, and a customer base of 20,000 plus flyers that count on us every day. As we discussed at our Analyst Day last month, we focused on serving the underserved with a differentiated product and competitive cost in high-value geography. We believe our differentiated product and service is a sustainable, competitive advantage and continues to drive a price premium versus our competitors in many of our key markets. While we've been pleased with the trajectory of our revenue performance overall, Hurricane Sandy negatively impacted demand for air travel in the Northeast over the President's Day travel period, as many school vacations were shortened or canceled. With over 50% of our capacity in the New York metropolitan area, we estimate Hurricane Sandy reduced revenue in February by approximately $25 million. Even with this headwind, quarterly revenue performance was solid. We generated record revenues and achieved year-over-year improvements in yield, fare and load factor while growing capacity at 6%, demonstrating the core strength of our business. Also contributing to year-over-year revenue growth was record quarterly ancillary revenue per customer of $22. This is up 3% year-over-year and we see continued opportunity moving forward to generate higher margin ancillary revenues. Boston short-haul markets continue to be an important driver of profitable growth, driven in large part by our increased relevance to higher-yielding corporate travelers. To continue driving this relevance, we plan to commence service from Boston to Philadelphia in May, and the Houston Hobby Airport in July. As Boston Logan's largest carrier, we now serve nearly 50 nonstop destinations. We plan to continue to add important business-oriented markets and improve schedules as we further enhance our relevance position and improve margin performance in Boston. In addition, we continue to see profitable growth opportunities in Latin America and the Caribbean. To that end, we're pleased to announce today our plans to serve Lima, Peru from Port Lauderdale Hollywood International Airport later this year, subject to government approval. As we continue to expand our network, we believe we are well-positioned to be able to leverage our high-value geography to drive incremental partnership traffic as well. During the first quarter, we launched an interline agreement with Asiana airlines, our 23rd partner. While partnership traffic is becoming a more significant source of revenue for JetBlue, we believe this business is still in the early stages of maturation. In addition to adding new partners, we believe many opportunities exists to deepen relationships with existing partners through coach share agreements and providing better links between TrueBlue and partner loyalty programs. We're also very pleased to have welcomed Aer Lingus to our home at JFK's Terminal 5 earlier this month, bringing our first international partners operations to T5. As a result, connections from Aer Lingus to JetBlue flights are even more seamless for our customers. In addition, increased use of the terminal helps offset our airport operating cost. Cost discipline, of course, is a critical element of our success. Maintenance costs have driven most of our nonfuel cost increase since 2011. As Mark will discuss in more detail, this trend continued in the first quarter as we accelerated engine performance restorations on our E190 aircraft, resulting in an approximately $20 million of additional expense. While we are disappointed with this aspect of our cost performance, we are working proactively with GE, the engine manufacturer, to manage these expenses going forward. Before closing, I'd like to briefly mention the recent FAA furloughs for air traffic controllers. While it is still too early to assess potential financial impact, delays at our New York area airports in particular but at others as well have increased. JetBlue is working directly with the administration, Congress, as well as with our Trade Association in Washington DC and the Airlines for America to help forge a political solution to this most regrettable but wholly political situation. We're hopeful that a solution would be reached in the coming weeks. Although it was a challenging quarter, we remain very optimistic about the future. We expect margins to improve throughout the year as we execute our network strategy and contain costs. We also plan to continue to improve the balance sheet and make prudent investments in the business. To that end, I'm pleased to report that LiveTV, our wholly owned subsidiary, has submitted a request to the FAA for a supplemental high certificate related to KA band aircraft equipment and expects to receive FAA approval next month, assuming a typical FAA review timeline. We are on track to begin the installation process for Wi-Fi on our first aircraft immediately after approval. We truly believe our state-of-the-art inflight connectivity product will be a game changer. In closing, our competitive advantages, a differentiated product with a competitive cost structure serving high-value geography, we believe, will continue to provide a successful platform for sustainable, profitable growth. At the same time, we remain committed to generating free cash flow and improving ROIC by at least one percentage point per year for the foreseeable future. And with that, I'd like to turn the call over to Mark for a more detailed review of our financial results. Mark D. Powers: Thank you, Dave, and good morning, everyone. Again, thanks for joining us today. This morning, we reported first quarter operating income of $59 million, that's a decrease of $30 million compared to the first quarter of 2012. First quarter year-over-year passenger unit revenues increased 1.8% on capacity increase of 6.3%. While we experienced yield pressure during the shoulder periods, very strong Easter and Passover holiday traffic helped drive the quarter's solid revenue performance. First quarter average one-way fares were $163. Our overall fair mix improved as we continue to gain market share with corporate travelers in Boston, and as revenue contributions from our partnership's strategy increased. Year-over-year passenger unit revenue was flat in January, declined by 3% in February, and increased by 7% in March. As discussed on the January call, shortened and canceled February school vacations in the Northeast negatively impacted demand peak -- the demand during the peak Presidents' Day travel period. Close-in Presidents' Day bookings were even weaker than expected. Given our strong leisure franchise in the Northeast, Florida and the Caribbean, we have historically outperformed peers during the Easter and Passover travel period. Demand during this holiday period was particularly strong this year, we believe, in part, due to the pent-up demand from February. We estimate the holiday shift benefited year-over-year March PRASM by roughly 7 points. With a March PRASM tailwind, we anticipate an April PRASM headwind. Throughout the quarter, we continued to see strength in our Boston business-oriented markets, driving both load factor and yield improvements. We saw the strongest year-over-year PRASM improvements for the quarter in our transcon markets, driven by healthy increases in both yield and load factor. That's the ancillary revenue. Total ancillary revenue in the first quarter increased by roughly 10% year-over-year to $160 million. During the first quarter, ancillary revenue per passenger was about $22. Recall, ancillary revenues measured as the combination of ancillary revenue reported in the passenger revenue line such as our Even More offering and the other revenue line. We continue to see growth in high-margin passenger-driven ancillary items, such as Even More and TrueBlue. Growth in passenger-driven ancillary revenue was offset to some extent by declining lower margin ancillary revenue in mail, spare part rentals and our training center revenue. Our Even More offering remains on track to generate approximately $165 million this year. We continue to expect total ancillary revenues in 2013 to increase between 10% and 15% year-over-year. Turning to costs. Quarterly operating expenses increased 11% year-over-year or $126 million. Fuel, of course, remains our largest expense and comprises nearly 40% of the total. In addition to our continued successful focus on operating procedures and techniques designed to conserve fuel, we are making prudent investments in our fleet to reduce fuel burn. Specifically, we are pleased to have retrofitted our first A320 with Sharklets in the first quarter and expect to retrofit 4 additional A320s this year. Further, all 7 of our A320 Airbus deliveries will have Sharklets installed. We expect Sharklets to reduce fuel consumption on these aircraft by up to 3%. We continue to maintain a fuel hedge portfolio as a form of insurance. In the first quarter, we hedged approximately 8% of our fuel consumption. Additionally, 6 forward price agreements or FFPs covered an additional 10% of our first quarter fuel consumption. Including the impact of fuel hedges and FFPs and taxes, our fuel price for the first quarter was $3.29 . For the second quarter, we've hedged approximately 18% of our anticipated jet fuel requirements. Additionally, FFPs covered an approximate 20% of projected fuel for the quarter at an average price of $3.10. The underlying details of our FFP and hedge programs, as of April 19, are more specifically detailed in an investor update, which will be filed later today with the SEC. Recall, we use the Brent forward curve to estimate fuel costs in the prompt quarter and the median of Bloomberg consensus for Brent crude to estimate an unhedged portion -- to estimate our unhedged portion for the full year. Based on the forward curve as of April 19, Brent is averaging $101 per barrel for the second quarter. Based on the forward curve, again, as of April 19, the second quarter crude to heating crack spread is averaging about $17 per barrel, and $19 per barrel for the remainder of the year. So including the impact of hedges and taxes, we're estimating a second quarter fuel price of $3.03 per gallon, and a full year fuel price of $3.20, as to ex fuel CASM. Excluding fuel and profit-sharing, year-over-year first quarter unit costs increased by 6.6%. This is significantly worse than our expectations and guidance. The variance results from 2 primary items. First, it's a timing issue with respect to the sale of LiveTV's ground spectrum license that we wrote down in the third quarter of 2010. We had expected a roughly 8% benefit in other operating expenses during the first quarter. This transaction actually closed early in the second quarter and we have now incorporated this gain in other operating expenses in the second quarter. The balance of the variance was driven by approximately $20 million of higher than expected E190 engine maintenance expense. This increase is mainly attributable to an acceleration of performance restoration of our higher flight hour E190 engines. These engine restorations are intended to help address several non-core peripheral engine issues to improve ultimately operational liability and extend time on wing. We had planned for 20 E190 engine performance restorations for the full year, yet in the first quarter alone, we chose to perform 12. We now expect to perform 30 E190 engine performance restorations for the full year. As previously disclosed, and as Dave mentioned, we've been working with GE, the manufacturer of these engines, to reach a long-term maintenance agreement to smooth future engine maintenance expense. With or without such agreement, it's likely we will continue to accelerate the engine performance restorations throughout the second quarter. With a decline in the number of E190 engine visits thereafter. The second quarter and full year CASM x guidance provided in today's press release reflects these patterns. Moving, if I may, to the balance sheet. We extended the first quarter with unrestricted cash and short-term investments of approximately $849 million or 17% of trailing 12 months revenue. Not included in this cash balance is a line of credit we have with Morgan Stanley for $200 million. We are pleased to announce this week that we closed a new $350 million revolving credit facility secured in part by JetBlue's lot portfolio at JFK, Newark, LaGuardia, DCA and other related gate facilities. We believe this action, which brings total credit lines now to $550 million, is in line with our efforts to rightsize our cash balance and reduce the drag on ROIC caused by excess cash and short-term liquidity. Additionally, we recently refinanced approximately $42 million in municipal bonds secured by our training center and hangar in Orlando, which we anticipate will result in roughly $1 million in annual interest savings. The expected reduction of interest expense is reflected in our other income guidance provided in our investor update, which as I said, will be filed later today. During the first quarter, we made debt and capital lease payments of approximately $50 million. Second quarter scheduled principal payments from debt and capital leases are expected to be a very manageable $120 million, and roughly $345 million for the remainder of the year. With strong cash from operations and manageable capital commitments and debt maturities for the remainder of the year, we believe JetBlue is well-positioned to maintain strong liquidity throughout 2013, and generate positive free cash flow. We expect to end the year with cash as a percentage of trailing 12 months revenue of approximately 15%, with respect to CapEx. JetBlue ended the quarter with 181 aircraft, including 127 A320s and 54 E190s. For the remainder of '13, we expect to take delivery of 3 A320s, 4 and our first A321s, and 6 E190s. We plan to finance all of our A3 -- all of our 2013 aircraft deliveries. We estimate second quarter capital expenditure is about $220 million, that's $170 million for aircraft and $50 million for non-aircraft-related expenditures. We estimate full year CapEx of approximately $675 million. This includes $225 million of non-aircraft CapEx, of which $40 million relates to LiveTV, and $75 million relates to construction of our international arrivals facility known as T5i at JFK. Moving to capacity. We expect to increase second quarter ASMs between 6.5% and then 8.5% year-over-year. Given higher than expected completion factors during the first quarter, we expect 2013 ASMs to increase between 6% and 8% year-over-year. This is slightly higher than previous guidance. Turning to the revenue outlook. While we are seeing some yield softness during shoulder travel periods, we're encouraged by the results of our efforts to stimulate traffic with lower fares. We currently expect April PRASM to be down between 9% and 10%. Recall, there's a roughly 7 point headwind in April due to the Easter and Passover holiday shift into March this year. When we combine March and April together to neutralize the impact of the holiday shift, we expect PRASM will be down about 1.5% year-over-year. While we have limited visibility, May bookings currently looks solid. We expect sequential improvement in May PRASM compared to April, after adjusting for the Easter holiday shift. We are optimistic of the success of our initiatives to generate higher-yielding business traffic, particularly in Boston, and investments in Latin America and the Caribbean. As to CASM outlook. We expect second quarter CASM x fuel and ex profit-sharing will be up between 3% and 5%, and full-year CASM, x fuel and profit-sharing, will be up between 2% and 4% year-over-year. For the reasons previously noted, maintenance expense accounts for roughly 3 quarters of these increases. While we expect second quarter maintenance costs to remain at similar levels to those in the first quarter, we expect, again, these cost pressures will diminish in the third and fourth quarters. We project second quarter CASM, all-in, will be between negative 1.5% and positive 0.5%, and full-year CASM will be -- all-in, will be up between 1.5% and 3.5%. In closing, we continue to work at improving results while executing our profitable and sustainable growth strategy. We also remain committed to improving ROIC by an average of 1 point per year. Again, I'd like to thank our crew members for their hard work and running a terrific and safe operation. And with that, Dave, Robin, we're all ready for your questions. Operator?

[Operator Instructions] And we have Jamie Baker from JPMorgan. Jamie N. Baker - JP Morgan Chase & Co, Research Division: David, on sequestration, others have cited that their solution is to cut back service in the small communities, put down 50 seaters more quickly than planned and that's obviously not an option for JetBlue. You cited a willingness to work with A4A and lawmakers, but from a network perspective, is there a Plan B if current ATC staffing today becomes the new normal? I mean, it seems that something would need to be done, maybe on the airport side of things, to speed things up, so that net travel time doesn't worsen. Maybe that means getting pre-check up and running more quickly, maybe it means embracing clear. I don't know. Maybe it means dropping some of your shortest-haul segments. How do we think about the network developing over time if this is the new normal?

By the way, our Plan B. I would say, certainly, we always look at that as a contingency, it could be weather or some other event. But not yet when it comes to sequestration. Why do I say that? I mean, even late last night, we're encouraged that Senators Stone and Rockefeller were meeting with Secretary LaHood, FAA Administrator Huerta, regarding sequestration and the impact that it's having on the air traffic system. And so as we look at it, it's -- we're still running our airline but all that said, I mean, let's get inside of this, I mean, this is government not working -- I mean, capital letters, exclamation point. When we're sitting here, holding the traveling public hostage, in the midst of sequestration. And I think what's so frustrating is, what we've been hearing over a period of time is that the impact is going to be limited including the closure to those towers which were staffed with other groups outside the FAA, and then all of a sudden, we go, guard rail to guard rail, into a Sunday impass. We've had 40 canceled trips so far. It's anecdotal but when you wake up this morning in New York, and we have severe clear and LaGuardia is already in the ground delay program, New York is going into one. JFK will be in one later today. There's interrail [ph] separation, Oceanic down to the Caribbean, and there's staffing challenges in Florida. I just don't think that, that's going to be something that's sustainable. That's going to drive us into this Plan B. I mean, really, there's so many adjectives I could share, Jamie. We're saying [indiscernible] and I'm really encourage, I think, with this meeting that even took place last night, so we look forward to hopefully learning more today. Back to you.

And we have Mike Michael Linenberg from Deutsche Bank. Michael Linenberg - Deutsche Bank AG, Research Division: Actually, a couple of questions here, I want to go back to, Mark, what you mentioned about May sequentially being better than April after adjusting for the Easter shift. And I wasn't sure if you were referencing the year-over-year increase in PRASM, right? So March and April combined, down 1.5. Or were you actually referencing the absolute RASM number that you would get to on a combined basis for April and May?

So Mike, with your permission, let me ask Robin to address that.

Michael, obviously, we're not guiding for May today. I mean, what I would say about May is when we -- we look at March and April together, so we had a very strong PRASM performance in March. I mean, that's not something we celebrated because we knew that this headwind was coming in April. So we very much looked at March and April together, and as we said, that was down about 1.5 points. As we look at May, right now, again, without guiding, and I do want to put a caveat around what I'm about to say because this FAA sequestration issue, which Dave talked to a question from Jamie, it's something that is very concerning because it's something that's hard to plan for day-to-day, and I don't think any of us understand yet what impact that's going to have on short-term demand. So that is something that is concerning around May. But as we look at that May today, and we look at that caveat in mind, and we -- based on the visibility we have, we would expect May to be positive low single-digit RASM. Year-over-year. Michael Linenberg - Deutsche Bank AG, Research Division: Okay. Very good. And then just my second -- Okay. Perfect. And then my next question, just in reference to there's a headline out on Bloomberg where it's talking about Aer Lingus ordering 757s to link up with JetBlue at their hubs, and then as you read through it, you realize it's just -- potentially what they'll do with the 757s. The fact that you do have Aer Lingus moving into your terminal, you've talked about a two-way coach here later this year. I mean, does it seem reasonable that the carrier of choice would be Aer Lingus, and maybe this 757 strategy that they're going to pursue linking up, doubling transatlantic to cities, that maybe some of those cities will be JetBlue cities. Any comments on that?

Sure, let me take that again. First of all, as we mentioned, Aer Lingus is an extremely important partner to us. It was our first sort of international partner, and a relationship, I think, I would describe as special. They have briefly started operating into our T5 terminal. We are looking at better connectivity in another market like Boston. Delighted with them. Already, since we moved into the terminal, we're able to reduce connecting times, we've seen an increase in traffic that we get from Aer Lingus. In terms of comment on code, I mean, I think, we've made no secret that we are close to moving to a two-way code with our first international partner. Not going to comment on the core as to whether that's Aer Lingus or one of our other international partners but definitely something that you should expect soon.

And we have David Fintzen from Barclays. David E. Fintzen - Barclays Capital, Research Division: Just a quick question. I think it was Mark, in your comments, you said you thought there was a little bit of a pent-up demand from the February, some of the school changes. I'm just curious, I mean, maybe even more for Robin, how do you think about the timing of that? I mean, did that come in and sort of make the Easter shift look more extremer or come in, in sort of the April spring break or is that something you think comes in once we get past the school year?

You're right, it's for Robin.

No. I think -- I really think that's behind us now. I mean, certainly, as we went into February, the school, a lot of the school districts in the Northeast either canceled or shortened their school holiday. That's clearly a big driver of traffic for us across the February peak. So we -- certainly, we saw that. In terms of then we went into to March, we certainly saw an improvement. I do think that there were people who didn't take a trip in February that then absolutely took a trip on the Easter Passover peak. So I think we saw that into March. And I think now as we get through the rest of the year, the sort of the impact of this, the Sandy, the halt from Sandy that we saw in February, we're seeing that sort of dissipate away as school year has pretty much return to normal. David E. Fintzen - Barclays Capital, Research Division: Okay. That's very helpful. And then maybe one sort of bigger picture question for Dave. I mean, a lot of volatility here in revenue and fuel in the industry, we're probably on pace for a good sort of a point or more of margin improvement in the industry, probably something similar to better returns. I mean, when we look at JetBlue, and you think about your ROIC target in terms of what -- you're 1 point or more incremental, should we think about JetBlue as sort of if the industry is getting that, should we think of JetBelue as sort of separate from the industry or should we think about JetBlue sort of getting the industry benefit and why wouldn't we think there'd be more than a point? Has that become maybe a little bit overly easy return target in an industry that looks to be improving?

I appreciate the question, David. With Analyst Day and today, nothing has changed, it's still our plan as we're very transparent regarding a Sandy-impacted ROIC number from 2012, which, again, just under 5%. We knew that, that number was higher if we would not -- as we look at the trend pre-Sandy, that has driven our performance metrics. And so you bet, I mean, when we look at some of the impact of Sandy earlier this year and now sequestration, we're looking at the same plans, we're taking 14 airplanes, we are growing Boston, the maturity that's taking place up there, the relevance that's taking place up there. The connections of new markets such as into, subject to government approval, Lima. What we're planning to do in terms of, again, Latin America out of Fort Lauderdale, Hollywood, this is what's happening to us. And keep in mind, when we talk about improving our return on invested capital metric by at least a point, on a year-over-year basis, for the foreseeable future, Dave, we're doing it while we're growing. And so, I think, when you start to take a look at the rest of the industry, I think that benchmark is a little bit different.

And we have John Godyn on line with a question from Morgan Stanley. John D. Godyn - Morgan Stanley, Research Division: I just wanted a couple of very quick clarifications and then a question, if you don't mind. Just to clarify, Robin, you mentioned FAA furloughs as sort of a qualifier in your May PRASM. Was that sort of a conceptual comment, just the idea that it could have an impact or are you literally seeing something? I know it's very early but are you literally seeing anything already impacting close in bookings?

No, nothing as of yet. But it's very early and awareness is definitely building. I mean, it's been on the front page of the Journal now for the last 2 days. And so in our view then, we are certainly, particularly for some of the shorter-stage flights where, if you're looking at a flight, there's normally an hour, and even you think that's going to be a 2-hour delay on the back of that and you can drive in 3 to 4. Then we definitely think people are going to start thinking about other forms of transportation. So a conceptual comment at this point. But something that we're really concerned is the traveling public continue to get held hostage like this. John D. Godyn - Morgan Stanley, Research Division: Got it. And Dave, I think you had said that you are hopeful to get solved in a couple of weeks. That's kind of a precise timeline. So I just wanted to clarify sort of what gives you that sort of precision of the timeline?

Well, I think it's -- I wish I could have precision on it, John. So it's -- and it's not a matter of just being hopeful but I think, again, Robin mentioned headlines of senators Stone and Rockefeller meeting with the DOT, FAA yesterday. By the way, there's a recess that's coming out of that as well, with the members of Congress. And so I would think that constituents are going to be in touch. We have senators and the House of Representatives members just saying, hey, listen, I mean, enough, enough. This is -- I mean, it's ludicrous. So it -- could it go on? Yes, it could actually go on, there's no doubt about it. I mean, we're sitting here today with 87% load factor, right in the heart of what's happening in the New York metropolitan area and so as we're talking to people like Senator Schumer and Gillibrand, and Governor Cuomo, you bet. I mean, we're not taking a backseat on this issue. So hopeful, but it's -- John, I can't say it with certainty. John D. Godyn - Morgan Stanley, Research Division: Got it. But this recess at least creates sort of boundary that might sort of affect the timeline here.

And I think, on that recess, it'd be interesting to see if those flights go on-time. John D. Godyn - Morgan Stanley, Research Division: Mark, can I just ask one question on CASM ex fuel trend. You've got these A321s coming at the end of this year. Can you just talk a little bit about sort of the gauge of those aircraft and if there is sort of a CASM x fuel benefit towards the end of the year and as we look into 2014, coming from the up-gauging, I know there aren't a lot of these aircraft but I'm just curious how you're thinking about it? Mark D. Powers: Yes. Well, I feel so strongly about the positive impact of CASM ex fuel on the higher gauge that I wish we had more. Coming -- well, we only have 4 this year. But in fact, I think we spoke about this at Analyst Day. And for sure, while the trip costs may be slightly higher just because of the weight of the airplane or whatnot, the seat costs are phenomenal. And as we discussed, the gauge that we're looking at, particularly in the high-density routes, it's really going to be a huge mover of CASM. And again, I think you're going to really start to see the goodness of the A320 once we have a little bit more critical mass sometime next year, and not just with our fourth quarter deliveries. But yes, it's as they say in the sales brochure, it's a real CASM advantage, particularly if you are, as we are, on really high-density routes. While I do have the floor, I think I misspoke when I referred to our $8 million, by the way, of the LiveTV ground spectrum license. I'd somehow said that it was an 8%, I don't actually know how we would charge an 8%. In the first quarter, I meant to say million, so it's an $8 million charge. Just to clarify that. But John, can't wait to see and get critical mass on the A321 fleet.

And we have Duane Pfennigwerth from Evercore Partners. Duane Pfennigwerth - Evercore Partners Inc., Research Division: Just in terms of these sort of the revenue trends to date. Can you tell us how you're thinking about I guess beyond the seasonally stronger summer period, the fall at this point with respect to capacity?

No. Not at this point. I mean, what I'd say on found, revenue is, I think, we've covered those sort of unique features about March and April, which were exacerbated by the way the holiday shifted this year. And as we look at the -- and I'd give you some flavor of the May, but as we head towards the summer, May, June, where we have some visibility right now, we feel good about the revenue environment. We think the yield softness that we saw in some of the trough periods in April, we think that's behind us and we feel -- again, subject to my comments earlier about sequestration, I think we feel more positive about what we're seeing going forward. Duane Pfennigwerth - Evercore Partners Inc., Research Division: So there's no downward bias on capacity, given the revenue results to date?

No, look, we have flexibility to adjust if we need to. But at the moment, no, I mean, I think we feel very good about where things are situated. Duane Pfennigwerth - Evercore Partners Inc., Research Division: And then on the other expense line, appreciate that you expected a gain there this quarter, but it looks like x that gain, it was up pretty substantially year-to-year. Can you just talk about what's going on in that line?

Sure. I think, actually, from a -- there's 2 pieces. Again, as we've noted versus guidance, that we just had this $8 million related to the spectrum LiveTV thing, which is now in the second quarter from the first quarter. But from last year, you'll recall that last year as well, we had an $8 million coincidental same number, $8 million gain in the first quarter related to the termination of a contract with AirTran and LiveTV. And so that's probably a little bit of the cause of why it looks different.

And we have Savi Syth from Raymond James. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Just on the Sandy impact, just one clarification, the $25 million negative impact, that doesn't take into consideration any positive benefit in March, does it?

No. That would be impact as we measured it in -- but only February, around the Presidents' Day weekend on that week holiday. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Do you have any kind of thoughts on how much of that might have showed up in March?

No. It's a bit hard to speculate on that. I mean, I think instinctively, as I said, I do think some people deferred their trip. But hard to know how much of that precisely was recaptured. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Understood. And additionally, just you've seen Southwest added this kind of thinner seats and add some seats to their flights and now Alaska announced additional seats. Any opportunity to add there? I know, last year, you added even more space seats. So I was wondering if there's more that could be added in the economy cabin?

No. We get asked that a lot. We look at that. I mean, I think one of the unique aspects of our configuration if we take the A320 today where we have 150 seats, then -- and to go above that triggers 8 full flight attendants. And so there's a cost headwind, significant cost headwind that we have to overcome. So we actually have chosen to optimize, maintain that sort of there's a cost advantage of staying at 3 versus going to 4. And optimize around the very high margin even more revenue that we have been able to successfully grow. We've added -- you take the 190 where we've stayed at 100 seats but we created some additional even more seating last year. And we've seen the benefit from that as we then reduced the seat pitch slightly on the rest of the aircraft. So we look at it but we feel that we have optimized the revenue and cost point around the 150 and 100 platform we have today.

And we have Dan McKenzie from Buckingham Research. Daniel McKenzie - The Buckingham Research Group Incorporated: The economy has hit a soft patch here, and I guess, as the airline most levered to leisure travel, how are you thinking about the impact of the economy on the revenue picture here versus just simple demand, the structure from the sequester? Any color you can provide?

Dan, it's Robin. I think, we certainly saw some signs of yield softness during some of the nonpeak periods in the last couple of months and the demand can be stimulated. I mean, the load factors are full, the flights are full, but it was coming in at a price point lower than we had anticipated and seen in previous years. But as we look forward, we definitely think that sort of softness is behind us. We feel -- as we look into May and June, we feel more confident. And I think, if you look historically back in the last 5, 7, 8 years where we've hit these top patches, JetBlue as a brand, our value proposition, it's a brand that has done well during these periods. We tend to perhaps not have so much exposure to some of the high premium fares when the economy is going well but we've always been a brand that people have come to as the economy tightens. So we think that plays well to who we are and it's not something that's concerning us at this point. Daniel McKenzie - The Buckingham Research Group Incorporated: And then if I could go back to this idea of deepening existing relationships, I guess, I'm wondering if you can -- what kind of timing you could provide and how should investors think about the materiality? Is this something that's potentially around in air as you look at the business or is it more of material? I mean, Southwest is out there saying that its co-chair with AirTran is piping in $1 million a day.

No, certainly, I think, we shared some numbers in terms of Investor Day, in terms of what the partnership revenue was worth. We -- just to remind what those were, we said $80 million gross and so in terms of net, around $40 million, and that's something that's going to continue to grow. And as we now look at deepening some of our one-way co-chairs to two-way co-chairs, which we really see the natural evolution. Yes, of course, that's going to drive more revenue, but I really think that -- I look at that as part of the plan. We're going to continue to increase interline partners, we're going to move more interline partners to one-way co and we're going to start to move selective one-way co partners to two-way co. And I think all of that's going to continue to drive that $80 million number and look like we're seeing good growth. We've seen double-digit growth in that revenue last year and that's something I think we're going to see continue. Daniel McKenzie - The Buckingham Research Group Incorporated: Okay. Very good. Any perspective on timing? Is it second quarter or third quarter or is it phased in evenly?

In terms of the first two-way co-partner, I think you're going to end using that in the near term.

And we have Hunter Keay from Wolfe Trahan. Hunter K. Keay - Wolfe Trahan & Co.: Mark, you talked -- well, you have been, I think, buying your planes with cash recently and you talked earlier in the call about financing all of your deliveries. Is this a change? Is this -- should I interpret this as a concern about sort of free cash flow throughout the year or I mean is there some sort of LTV noise in there? I mean, can you give me some color on that? Did anything change? Mark D. Powers: To counter, you always give me too much credit. It's actually very simple. Obviously, the EMBRAERs, we will continue to finance using Brazilian export financing, really nice terms. With respect to the others, it's -- our presumption, as we went into this year, has always been we're going to use cash. And we have been very, very fortunate in obtaining some terrific commitments to cover those airplanes with really, really good terms that, candidly, are going to bring our average cost of debt down. So it was for the terms of those offers that Jim Leddy and his team have been able to obtain, I'd be buying them with cash. Hunter K. Keay - Wolfe Trahan & Co.: Okay. Maybe more on this cash thing. Correct me if I'm wrong, I think you guys earlier in the call, said you were going to do positive for cash flow this year, I'm -- to be honest, I'm having trouble getting there in my model. I think, at the Analyst Day, you said you're going to be well north of $700 million in operating cash flow, but can you help me out with regard to the components of that? I mean, should I expect like a $200 million working capital tailwind? Because if not, you're net income and your DNA has to be up like 40% to get there. It's hard to model it. Mark D. Powers: Yes. As we sort of look at your analysis, Hunter, you're a little bit at the outlier but we can walk through it, if you want, offline. But we are still forecasting positive free cash flow this year. I think we've got -- I've given you the CapEx numbers. So I think you can sort of infer how you get there.

And we have Bob McAdoo from Imperial Capital. Bob McAdoo - Imperial Capital, LLC, Research Division: Just I want to go back over the maintenance thing a minute. The term performance restoration event, is that a fancy term for an overhaul or is there something literally about thrust that is slipping on these airplanes that needs to be dealt with? Or what does that mean?

No. It's actually -- so it's probably -- we can talk -- I love engines, as you know, so we could for the rest of the period on this. But performance restoration is really twofold. Number one, yes, it is the overhaul of the airplane in part, but then also, there's a key element here which is there are some of the peripheral items as I mentioned that aren't related to core that candidly need to be addressed in advance of perhaps the regularly scheduled performance restoration. And as we aggressively monitor these engines in terms of oil consumption and other performance criteria, we make the decision to pull it off and address those other peripheral items. So it doesn't necessarily mean you pull a full overhaul but if you are in a high time situation and those events are occurring such that you want to go fix those peripheral items, depending again on remaining cycles and hours on the core engine itself, you may well just choose to run the full performance restoration. Candidly, not the most efficient use of your engine time but if you've got the engine off and you've got the engine cracked open, on balance, it typically makes sense to run a full restoration. Bob McAdoo - Imperial Capital, LLC, Research Division: What are some of the kind of issues that this engine has?

So the core itself is perfectly fine. Again, it's a lot of the peripheral things around the motor. And look, this is the 10E engine is we're the first one to use it and just like with every other engine, you're sort of coming in with some teasing pains and that's what we're doing.

And we have Glenn Engel from Bank of America. Glenn D. Engel - BofA Merrill Lynch, Research Division: If I -- to the math, roughly, it seem like only 1% to 2% of your traffic actually does connect with other carriers using that $80 million number and is that up much versus last year yet?

We haven't provided any sort of specific information for 2013. But yes, I mean, I'm expecting the growth of the partnership traffic to sort of maintain the same sort of trajectory that we showed you earlier -- sorry, back in March, in terms of the year, Analyst Day event. And we think about the $80 million on a revenue base of about $4.5 billion, core. We’ve been very public but at the sort of the fares that we get to attractive growth equivalent. Your math is pretty close to being right. Glenn D. Engel - BofA Merrill Lynch, Research Division: And did you say how much it was up year-over-year in the first quarter?

No, we haven't given anything on 2013 yet. That's something we will update annually at the Analyst event. We showed 2012 number and I would expect the same sort of growth trajectory into 2013, as we saw in 2011 and 2012. Glenn D. Engel - BofA Merrill Lynch, Research Division: Second, if I add up the guidance in the second quarter, it looks like, over the past 12 months, the margins will actually be lower and the ROIC will be actually slightly lower in the trailing 12 months through the middle of this year than the prior 12 months. How long can you tolerate ROIC not hitting your 1% target before you start adjusting supply? Mark D. Powers: I mean, candidly, that's non-negotiable. We will get our 1% target. And again, we have a lot of levers. I think, Dave also indicated, network maturity, partnerships, huge ancillary thrust around your efficient use of liquidity and a real tight control of things that go into the dominator. And I still remain confident even with sequestration and the revenue blip and this cost issue of $20 million that we're getting there, Glenn.

And we have Helane Becker from Cowen Securities. Helane R. Becker - Cowen Securities LLC, Research Division: Just a couple of questions. One, a point of clarification. I thought you guys have actually said that publicly that South African Airways is going to be your first two-way co-chair partner?

Helane, I did allude to that over in Dublin when we saw each other. And so I think that it's fair to say that South African is absolutely on a very short list of those airlines that we would move into a two-way co-chair with. Helane R. Becker - Cowen Securities LLC, Research Division: Okay. Got you. So it was a shortlist rather than a specific is how should we think about that?

That's correct. Helane R. Becker - Cowen Securities LLC, Research Division: And then the other thing, Dave, I saw some comments that you made, I guess, Sunday night at Harvard, about the EMBRAER and the fact that you weren't happy being the launch customer for a new plane type, which I get, but have you actually given any consideration to maybe spinning off the regional operation to its own subsidiary and kind of focusing your attention on just the mainline A320, 21 operation?

Thanks, Helane. By the way, it's -- absolutely not. I mean, the EMBRAER 190, the A320s and the A321, that is JetBlue, right? And so as we take a look at the 102 platform, the 150-seat platform, up to the 190-seat platform, we think that these are 3 tools that make great sense for us. In my comments regarding up in Boston this past Sunday, I was very transparent. As a young airline, there was a lot of burden for us to be the worldwide launch customer of this airframe. And Mark just gave further commentary, not just on the airframe, but of the motors as well. And when I think about airlines with much greater resources, if you will, in terms of digesting and being the leader, if you will, in terms of application of the airplane, time of the airplane, as its flying hours, time on wing for the motors, I would've loved to have been a follower. But that said, we're committed to the 190. The 190 has been very, very important to our success in Boston. And without it, we would not be Logan's leading airline, we would not have the relevance close to 50 markets. And now you're seeing what we're doing with things like Philadelphia being the most recent example. So it's very, very important to us. Is it taking a lot of leadership time? You bet. So that's really the comment back at Harvard. Helane R. Becker - Cowen Securities LLC, Research Division: Okay. And then just one last question. Given the forecast for free cash flow, for this year, would you think about being more aggressive in the share -- in the return of capital for shareholders program? I didn't ask that the way I want it to but...

No. I've heard the question before. So again, I think that we're delighted with that. We are on track to generate positive free cash flow. In terms of where we use our cash from our operations, it's my first and foremost is look at buying aircraft with cash and if we get offers to finance aircraft at favorable terms, fine. Continue to look for opportunities to prepay debt and whatnot. I would also say though that we are still looking at purchasing shares in the market equal to the amount of shares that we are providing our employees in terms of compensation programs.

And our last question comes from Justine Fisher from Goldman Sachs. Justine Fisher - Goldman Sachs Group Inc., Research Division: My question was related to previous questions on the cash balance. Again, free cash flow is expected to be pretty solid this year. I was just wondering about why the increase on the revolver? And it does seem -- and if it's true that you want to get rid of the negative effect of carrying a lot of cash on the balance sheet. What's the expected use of that cash if you're expecting to run that cash balance down and have liquidity instead as a form of the revolver? And then you're going to finance your aircraft too? Where was that cash going to go? Mark D. Powers: First of all, I would also say that while we've increased our lines of credit with this Citibank-led line of credit, we also had a line of credit for $125 million with American Express, which we have terminated. It was a great facility at the time. It just proved to be a little bit more cumbersome than we'd like versus a conventional bank facility. So that $125 million is gone, and we have then added this $350 million, coupled then with the pre-existing Morgan Stanley line of $200 million. And candidly, I view the line of credit as essentially the ultimate security from a risk perspective. I don't foresee that we're going to be going up and down on that facility on a regular basis. But it's, I think, just in terms of risk management and just prudent management as we move our cash balance down, that's really what it's intended to provide. Justine Fisher - Goldman Sachs Group Inc., Research Division: Is there a minimum cash balance that you guys would be comfortable with? Mark D. Powers: Actually, we are going to file -- 2 questions. The terms -- there's some covenants related to minimum cash in the covenants that are described in the filing today of describing the line of credit. But to your question, I think 15, in that kind of range, plus or minus, of trailing 12 revenue with these lines of credit. And by the way, with the current 11 owned aircraft, as well as maybe as many as 17 by the end of the year. I feel very, very comfortable. You know what you earn in the bank today and putting that kind of cash in the bank earning that low amount of interest expense is a massive drag on ROIC. Justine Fisher - Goldman Sachs Group Inc., Research Division: Yes. That makes sense. The last question I had is just on aircraft financing. It seems that while we haven't seen JetBlue come to the EETC market to finance new planes and some assuming that you're financing -- that if you do end up financing deliveries instead of paying with cash, you'll do it in the bilateral loan market or some non -- for the A320s, some non-EETC market. Are you guys evaluating the EETC market and are you just seeing better terms in that bilateral loan market? Mark D. Powers: Yes. The short answer is we're constantly looking at the EETC market. And we've been very fortunate though in terms of the private bank market, has been incredibly supportive and just in terms of being just -- it's just very, very superior to what we've been able to -- we think we would have obtained in a public EETC environment.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. And you may now disconnect.

Adrienne, thanks so much for your time today. And those of you on the call, I appreciate it very much. And again, thank you to our crew members, delivering our 12th straight quarter of profitability. We'll talk to you in 3 months. Thank you.