Lisa Studness-Reifer David Barger - Co-Founder, Chief Executive Officer, Director and Member of Airline Safety Committee Mark D. Powers - Chief Financial Officer and Executive Vice President Robin Hayes - President

Jamie N. Baker - JP Morgan Chase & Co, Research Division Michael Linenberg - Deutsche Bank AG, Research Division Duane Pfennigwerth - Evercore Partners Inc., Research Division Daniel McKenzie - The Buckingham Research Group Incorporated Glenn D. Engel - BofA Merrill Lynch, Research Division David E. Fintzen - Barclays Capital, Research Division John D. Godyn - Morgan Stanley, Research Division Helane R. Becker - Cowen and Company, LLC, Research Division Savanthi Syth - Raymond James & Associates, Inc., Research Division Hunter K. Keay - Wolfe Research, LLC Kevin Crissey - Skyline Research LLC Joseph W. DeNardi - Stifel, Nicolaus & Company, Incorporated, Research Division

Good morning. My name is Lindsey, and I would like to welcome everyone to the JetBlue Airways First Quarter 2014 Earnings Conference Call. As a reminder, today's call is being recorded. [Operator Instructions] I would now like to turn the call over to JetBlue's director of Investor Relations, Lisa Reifer. Please go ahead. Lisa Studness-Reifer: Thanks, Lindsey. Good morning, everyone, and thanks for joining us for our first quarter 2014 earnings call. Joining us here in New York to discuss our results are Dave Barger, our CEO; Robin Hayes, our president; and Mark Powers, our CFO. This morning's 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 our press release, 10-K and other reports filed with the SEC. Also, during the course of our call, we may discuss several non-GAAP financial measures. For reconciliation of these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website. And now I'd like to turn the call over to Dave Barger, JetBlue's CEO.

Thanks very much, Lisa. Good morning, everyone, and thank you for joining us. This morning, we reported first quarter net income of $4 million or $0.01 per diluted share. Operating margin was 3.1%, a decrease of 1.4 points compared to last year. Severe winter weather in the Northeast reduced first quarter operating income by approximately $35 million. During the quarter, we canceled 4,100 fights. To put that in perspective, we canceled nearly twice as many flights in the first quarter as we canceled in all of 2013. With 80% of our fights concentrated in the Northeast, we are disproportionally impacted by weather in this region. While we recognize we can't beat Mother Nature, we know we need to operate more reliably and efficiently. Having the majority of our airlines based in highly congested airspace clearly comes with inherent cost and challenges, which is why our focus on-time departures and operational reliability is imperative. We know that improvements in reliability will lead to both better cost performance and improved revenue performance. Even with the winter weather challenges, first quarter revenue performance looked solid, as total revenues increased 3.8% year-over-year. We generated record first quarter revenues and achieved year-over-year improvements in yield and fare while growing capacity 2.7%, demonstrating the core strength of our business. Also contributing to year-over-year revenue growth was record quarterly ancillary revenue per customer of $24. This is up 9.9% year-over-year, and we see continued opportunity, moving forward, to generate high margin ancillary revenues. Total operating expenses increased 5.5% year-over-year, primarily due to salaries, wages and benefits. As discussed on prior calls, we expect additional cost pressures related to pilot compensation. We also saw increased pressure on other operating expenses during the quarter due to additional weather-related expenses. Although the first quarter presented operational challenges, we remain focused on running a safe airline and delivering excellent service to our customers. I'd like to take this opportunity to thank our 15,500 crew members for all their hard work running a safe operation during the quarter. As we look forward, we remain on track to meet our return on invested capital goal of 7% this year. We believe we have the right plan in place to do so. There are 3 key components of our plan to improve ROIC: Cost control, revenue enhancement and balance sheet improvements. Specifically, we intend to hold our invested capital base relatively flat in 2014, as we expand margins through profitable growth in Boston, Fort Lauderdale/Hollywood, and the Caribbean and Latin America. We believe a maturing network, new product offerings such as Fly-Fi, together with ancillary revenue initiatives, will further improve our margin performance. Maintaining the relative cost advantage to our network carrier competitors is critical to our ability to offer an industry-leading product and a reasonable fare. Although we face weather-related cost challenges in the first quarter, we believe we have opportunities to further improve our cost execution and discipline. Over the longer term, we expect A321 aircraft and the Sharklet retrofit of our A320 fleet will help reshape our cost dynamic. Initial results on our first A321s in service are validating the CASM benefits, with savings of 10% to 15% relative to our current A320 fleet. In addition, we currently have A320 aircraft with Sharklets installed and we are seeing, roughly, 3% to 4% improvement in fuel efficiency on transcontinental routes. Finally, with respect to balance sheet, we remain committed to prudent capital deployment and plan to continue to pay down debt, and purchase aircraft and other assets with cash, which will help improve ROIC. While our plans to generate ROIC of 7% in 2014 do not include the benefit of the sale of our wholly-owned subsidiary, LiveTV, we believe this sale, which is expected to be completed this summer, will lower unit cost and reduce capital expenditures. In addition, we plan to use a portion of the proceeds from the sale to prepay between $200 million and $300 million of debt in 2014. Importantly, our agreement with LiveTV preserves JetBlue's access to the most innovative in-flight entertainment and connectivity platform. We are on track to complete installations of Fly-Fi, JetBlue's in-flight connectivity product, on our Airbus A320 fleet by the end of 2014. With 36 aircraft equipped with Fly-Fi today, initial customer feedback has been very positive. On certain long-haul flights, over 80% of customers are connecting to Fly-Fi. We believe offering true broadband speeds in-flight will be a key differentiator for JetBlue, particularly in the long-haul markets. We expect to share more details of our plans to monetize Fly-Fi later this year. Earlier this week, we received the results of a pilot union election. By a margin of 74% to 26%, JetBlue pilots elected to be represented by the Air Line Pilots Association. While I'm personally disappointed in this result, JetBlue respects the right of pilots to unionize. We see no material change to our outlook as a result of this election. In closing, despite a challenging weather environment last quarter and a disappointing pilot election result, we are enthused about the future. We're confident in our plan to focus on cost control, maximizing revenue and strengthening the balance sheet. We expect margins to improve throughout the year as we execute our network strategy and contain cost while continuing to make ROIC accretive investments in the business. 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. Good morning, everyone, and thank you, again, for taking the time to join us today. This morning, we reported first quarter operating income of $41 million, a decrease of $18 million compared to the first quarter of 2013. Severe weather in the Northeast reduced first quarter revenues by approximately $50 million. In addition to the roughly 1,800 flights canceled during winter storm Hercules in January, subsequent winter storms caused a significant number of additional flight cancellations with respect to revenue. First quarter PRASM increased approximately 1% year-over-year. Year-over-year passenger unit revenue increased in January by 6%, increased in February by 7% and declined in March by 8%. As discussed on our January call, March year-over-year unit revenue comparisons were negatively impacted by the shift in the Easter and Passover holidays. This holiday shift impacted March year-over-year PRASM by approximately 7 to 8 points. In addition, we faced tough year-over-year comparisons in March this year due to an exceptionally strong March last year. Given our strong leader franchise in the North East to Florida and Caribbean, we have historically outperformed peers during the Easter Passover travel periods. For the same reason we saw a March PRASM headwind, we anticipate an April PRASM tailwind. With respect to networks and partnerships, we continue to be pleased with the revenue performance throughout our network. During first quarter, we acquired 12 slot pairs at Reagan Washington National Airport DCA. This is an airport we've worked tirelessly to gain access to for more than a decade. Reagan National is a high sale market with a demographic very well suited to our brand and business model. To help support our growth at Reagan National to up to 30 daily departures by year-end, we plan to eliminate transcon flying from Washington Dulles and to close several other routes. Airline partnerships continued to generate high margin revenue and expand the scope of our network. Partnership bookings generated approximately $120 million of revenues in 2013, of which, approximately $50 million was incremental. We expect incremental revenue from partnerships bookings to grow between 50% to 60% in 2014, driven by new partnerships, as well as a deepening of our existing partnerships. The impact of our partnership agreement on our new Boston-Detroit services is a great example of how effective our partnership portfolio has become. We currently carry, on average, 30 customers connecting with our airline partners today, between Boston and Detroit. We expect this figure to grow significantly by year-end. With respect to ancillary revenue, total ancillary revenues in the first quarter increased by roughly 9% year-over-year to $175 million. Although we voluntarily waived more customer change fees during the first quarter due to winter weather, resulting in lower change fee revenue, we continue to see growth in high-margin passenger-driven ancillary items. Our Even More offering remains on track to generate approximately $190 million this year. During the first quarter, we began adjusting Even More pricing by the time of departure and aircraft route to optimize revenue performance. We expect to continue tweaking Even More pricing as the year progresses. Our recently announced TrueBlue Mosaic status match from members of other carrier loyalty programs nicely illustrates our efforts to improve revenues by attracting those customers underserved by other carriers. In conjunction with this match, we also offer the Mosaic Challenge to allow any customer, not just those with status on another carrier, to fly their way to Mosaic at a 1/4 of the qualification criteria. As a result, we've signed up thousands of new Mosaic numbers, who on average generate 10x more revenue annually than a typical TrueBlue number without Mosaic status. We expect total ancillary revenues in 2014 to increase between 10% to 15% year-over-year, driven primarily by Even More and higher TrueBlue-related revenues. Turning to costs. Fuel, of course, remains our largest expense, comprising approximately 35% of the total. We continue to maintain a fuel hedge portfolio as a form of insurance. In the first quarter, we hedged approximately 16% of our fuel consumption. Additionally, fixed forward price agreements, or FFPs, covered approximately 8% of our first quarter fuel consumption. Including the impact of the fuel hedging, FFPs and taxes, our fuel price in the first quarter was $3.14, down 4.4% year-over-year. We have currently covered approximately 23% of our remaining full year 2014 fuel consumption using a combination of hedges and FFPs. More specific details regarding our hedge positions are set forth in the investor update which was filed with the SEC and is made available on the Investor Relations section of JetBlue's website prior to the start of today's call. Excluding fuel and profit-sharing, year-over-year first quarter unit cost increased by 6.3%. Winter weather reduced our first quarter planned year-over-year ASM growth by approximately 4 percentage points, pressuring unit costs. Excluding the impact of these flight cancellations, we estimate year-over-year, x fuel costs, would have increased to only 2.3%. In addition to first quarter cost pressures caused by capacity reductions, we also faced increased cost associated with the winter storms. To look more specifically at a few items on the income statement. One, salaries, wages and benefits were up approximately 50% on a unit cost basis, the largest driver of our year-over-year increase in non-fuel unit costs. Recall, we recently increased our pilot paydays rate and have hired additional pilots to help mitigate the impacts of FAR 117, which is the FAA's new regulation regarding pilot flight time and duty rules. In addition, we incurred higher-than-expected over time expense during the first quarter related, of course, to winter storms. We expect salary cost pressures to ease somewhat in the second half of the year as we adapt and optimize operations pursuant to FAR 117. For the full year, we expect salaries and wages and benefits, excluding profit sharing, to drive approximately 60% of our increase in non-fuel unit costs. Other operating expenses were up 11% year-over-year on a unit cost basis. This increase was higher than expected due to additional weather-related cost such as de-icing. Moving to the balance sheet. We ended the quarter with approximately $771 million in cash and short-term investments. In addition, JetBlue maintains $560 million of undrawn credit lines and 21 unencumbered aircraft. We expect to end the year with cash, as a percentage of trailing 12 months, of approximately 10%. As Dave mentioned, we plan to use a portion of the net proceeds from the pending sale of our wholly-owned subsidiary, LiveTV, to prepay debt. Please note that all guidance today assumes LiveTV remains a subsidiary of JetBlue throughout the year. We plan to update CapEx and cost guidance after the LiveTV transaction closes some time midyear. Both CapEx and cost guidance will have a positive financial impact on JetBlue. CapEx and fleet. JetBlue ended the quarter with 195 aircraft, including 100 A320s, 5 A321s and 60 E190s. For the full year 2014, we're forecasting aircraft CapEx of approximately $600 million. Effectively managing the invested capital base is a key driver core ROIC improvement. Our goal is to keep the level of invested capital relatively flat as we grow the airline. Turning to capacity. We plan to grow second quarter ASMs between 5.5% and 7.5% year-over-year. This increase is driven largely by our growth in the Caribbean and Latin America, which we expect to be up approximately 20% year-over-year. For the full year, capacity is expected to increase between 4% and 6% year-over-year, which is 1 point lower than prior guidance. Most of this decrease was driven by the reallocation of long-haul transcon flying from Washington Dulles to support new short-haul routes at Reagan National DCA. Turning to the revenue outlook. We currently expect April PRASM to be up between 9.5% and 10.5%. Recall, there is roughly a 7-point tailwind in April due to the Easter and Passover holiday shift into April this year. While we have limited visibility, May booking currently looks solid. We currently set May PRASM to be in the mid-single-digits year-over-year. Moving to the cost outlook. Excluding fuel and profit-sharing, CASM in the second quarter is expected to increase between 4.5% and 6.5% year-over-year. We expect salaries, wages and benefits; and other operating expenses, to be the 2 largest drivers in the second quarter year-over-year, x fuel CASM growth. Salary, wages and benefits, excluding profit sharing, are expected to compromise 40% of the second quarter increase. With respect to other operating expenses, we expect year-over-year comparisons to be negatively impacted by the $3 million gain we recorded during the second quarter of 2013, in connection with the sale of LiveTV's spectrum license. We also expect to incur additional expense related to Ka-band installs during the second quarter of this year. Finally, we expect sales and marketing expenses to be higher in the second quarter due to our new advertising and marketing campaign in this quarter. Excluding fuel and profit sharing, CASM in 2014 is expected to increase between 3.5% and 5.5% year-over-year. We expect approximately 1.5 points of this year-over-year unit cost increase to be largely denominator-driven. That is, our capacity reductions resulting from the reallocation of aircraft from longer-haul routes to support new service in Washington Reagan and first quarter weather-related cancellations. Finally, in conclusion, our key focus for the remainder of 2014 is cost control, revenue enhancements and balance sheet improvements. Several key longer terms strategic initiatives, including Sharklets in the A321, are well underway. While the first quarter was certainly challenging, we are committed to our ROIC goal of 7%. We believe generating an ROIC of 7% by the end of 2014 is attainable. And with that, Dave, Robin and I are happy to take your questions. Lindsey? Lisa Studness-Reifer: Lindsey, we're now ready for the Q&A session with the analysts. Could you please give the instructions?

[Operator Instructions] Your first question comes from the line of Jamie Baker with JP Morgan. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Dave, if one listens to the manufacturers, and of course they're always talking their own book, but it sounds as if they are applying considerable pitches on the Wide-body side. And wide-bodies are something that you've been willing to discuss in the past. I was hoping that we could get you on record and just kind of get an update as to how those campaigns might be proceeding. And more importantly, do your ROIC targets, longer term and the progression of ROIC performance, leave room for a potential third aircraft type or is it academic? Would ROIC temporarily be disrupted in the event that you choose to go with a third model?

Yes. Thanks, Jamie, and good morning. I appreciate the question. I think, first of all, just transparency. We're absolutely focused on implementation of the 321 fleet. We're focused on the implementation of the Mint experience. That is a big stretch for our company. Five A321 here today, 83 on order. And so that's the near and the medium-term focus. Wide-bodies, I've certainly talked about it in the past, that at some point, I believe, that there may be a place for larger aircraft within JetBlue. But transparency, again, Jamie, we have -- when I think about, your word, campaigns with manufacturers, that has not transpired in any way at all, at our company at this point in time. Do we get pitched? Sure, we get pitched along those lines. And when I think about the ROIC trends, as we commented about, despite a really tough first quarter, the 7% by year-end and that progression, on average, 1 point per year, that's closer to the nearer-term. And I honestly don't know that I've even seen a study that talks about disruption or improvement of ROIC tied into wide bodies at this point, Jamie. So hopefully that helps you with where we're at in our maturity curve.

Your next question comes from the line of Michael Linenberg with Deutsche Bank. Michael Linenberg - Deutsche Bank AG, Research Division: Hey, just a couple here. Dave, when I think about your pilot cost, I think it's about 10% of total cost, and now that they've elected to unionize, it does seem like that, that cost item is now a bit of a question mark. And so how do you think about growth and CapEx? And it would seem, given the uncertainty around what it will cost to operate, maybe, aircraft down the road, once you -- if there were any sort of discussion for a 7A [ph] or an A350, would you those on the back burner until you get the pilot situation figured out? How do you think about that?

Sure. Good morning, Michael. Likewise, appreciate the question. Again, just to reiterate, disappointed not only with the result, but certainly the statement by the pilots regarding third-party representation, continue to absolutely be of the opinion that the relationship that we have with our crew members and what we previously had with our pilots, that this direct relationship is the best path forward. So, back my statement, we see no material change to our outlook as a result of this election. And that's exactly where I'll take you back to, Jamie, this investment that we've made with our pilot, the $145 million that we've talked about previously, this year over the next 3 years. At our life cycle, the ability to attract and retain, which we have not had absolutely no issues with, at all, from the standpoint of the pilot pipeline. When you start to take a look at on-standard, with the Air Line Pilots Association, it's a 32-month timeframe to negotiate a collective bargaining agreement. And so I'm really, again, very disappointed with the pilots. I think predictability, now, in terms of wage cost, salary specifically, and benefits and quality of life with our pilots, I think now is very predictable. And tell you the truth, it's easier for us to now manage that cost. And, again, I really think it was a short-term decision by our pilot group. Michael Linenberg - Deutsche Bank AG, Research Division: Okay, okay. And then just on a second question. And maybe this is to Mark. LiveTV, Mark, you said sometime in the middle part of the year. Anything more definitive on when the deal closes? Why would it take so long? And then the $400 million of gross proceeds. How should we think about net proceeds? I mean, what's sort of that text piece? Is it big? How do we part numbers on the [indiscernible]? Mark D. Powers: So, I'm getting the -- people here are agreeing with you, hurry it up. And I couldn't be more eager to get this thing closed. Just some governmental things, SEC and antitrust issues. So I mean it's -- literally, the timeline is driven by approvals not by the business parties. Thales and JetBlue are ready, willing and eager to go. $400 million is the gross, net will be -- it pains me to say this -- banker's fees and other small costs. So order of magnitude, still, will be well north of $300 million. And as Dave mentioned, the use the proceeds will -- the treasury team is actually targeting $200 million to $300 million of debt, might even be floating rate debt. Welcome your thoughts on the Fed, in terms of the floating environment. But clearly, interest expense reduction and de-risking the balance sheet is probably good for equity holders. And the balance of that, that we are continuing to purchase shares related to -- and roughly about 8 million shares or so is, I think, the current program -- related to -- not further diluting our shareholder base, in connection with options and ROIC, and whatnot, granted to our crew numbers. That's depending on the share prices, say a $70-million-plus additional use of proceeds.

Your next question comes from the line of Duane Pfennigwerth with Evercore. Duane Pfennigwerth - Evercore Partners Inc., Research Division: Just want to follow up, when would you expect to reach a new collective bargaining agreement? I mean, that typically can be a year, a multiyear process? How are you thinking about that internally?

Duane, by the way, nice to see you on the train the other day. And, I tell you, it's probably the best question for the Air Line Pilots Association. We're focused on running the business and I think we have made significant investment in the pilot group. If you look, on average, it takes 32 months for the Air Line Pilots Association, historically, to close out an initial collective bargaining agreement. I wouldn't be surprised, at all, that you'll hear a different answer from the Air Line Pilots Association. Duane Pfennigwerth - Evercore Partners Inc., Research Division: On the competitive environment, wonder if you could just give us your view of OA competitive capacity in the June quarter and how that looked versus maybe the March quarter.

Thanks, Duane, and Robin's chomping at the bit here, to get his voice heard. Mr. Hayes?

Thanks, Duane, for the question. As we look out over -- if we look back onto quarter 1 and then into quarter 2 and quarter 3, we look at it in terms of sort of year-on-year seat increases. And we're seeing about a sort of around 2%, 2.5% increase in competitive capacity. The force of that varies a little bit. So, in quarter 1, we were siphoning quite a bit of transcon increases versus last year, which kind of cycles out into quarter 2, quarter 3. And then in quarter 2, quarter 3, we are seeing a little bit more competitive capacity coming into the Caribbean and Latin American markets. But overall, it sort of stayed at sort of a 2%, 2.5% level for the rest of the year as best as we can see now.

Thanks, Duane. I hope you talked to Secretary Foxx about investment in next gen as well, during your visit. Again, nice to see you.

Your next question comes from the line of Dan McKenzie with Buckingham Research. Daniel McKenzie - The Buckingham Research Group Incorporated: I'm wondering if you can help us peel back the onion on the PRASM gains that you're reporting here. Obviously, we get the Easter shift, so I'm not asking you to comment on that. But what percent of the PRASM improvement is being driven by gains in corporate share, gains in partnership bookings? And what's the goal from here?

Hi, Dan. It's Robin. Are you referring to sort of Q2 guidance that we offered? Daniel McKenzie - The Buckingham Research Group Incorporated: Yes, correct.

I think the story in April -- and this was mentioned in the script, but the story in April really, is something we see every year, where -- probably much more than anyone else. We see a big swing from the month where the Easter, Passover holiday is situated. So, in terms of leisure business, we see no sort of significant uptick in April. As we look into May, Mark talked about sort of mid-single-digit gains that -- sort of as we're looking now. Again, that's kind of fairly consistent with -- there's been a lot of noise in the first quarter. We had the storms which actually had a small positive impact on PRASM. February was very strong because last February was, we -- with the sort of Sandy hangover present, we -- the President's weekend which sort of [ph] school districts in 2013 took down and we saw the impact of that. And then March and April, the story was really just a shift of the holiday. May is probably the first clean comparison that we've had, as we kind of got into the year, where we haven't had some underlying noise. June is very early. Obviously, sort of a lot more margin for error around June. But right now, June also kind of looks in the sort of mid-single-digit type of range. Daniel McKenzie - The Buckingham Research Group Incorporated: All right. So, if I peel back the onion in that mid-single-digit, is that all just network maturation? That's, of course, one of the key points that you highlighted in your script to drive that revenue improvement. Or is there some revenue benefit from the Mosaic Challenge? I guess, if it's hard to speak about the second quarter, maybe even just what you saw in the first quarter here.

Sure, no. I mean, Dan, we think we're really seeing the revenue strength across the board. I mean, if we look at Boston, we slowed down the growth there a little bit this year versus last year. We're definitely seeing some of the maturation benefits there. We continue to grow the Caribbean and Latin America market the most aggressively, but that's also the markets that ramp up most quickly. And so we continue to enjoy, really, much better results than we expect as we enter some of these markets. And then I think things like the Mosaic, the growth of TrueBlue, well, that's really enabling us -- is powering a lot of the ancillary revenue growth that we're seeing, growth above and beyond that sort of natural increase in passengers.

Your next question is from the line of Glenn Engel with Bank of America. Glenn D. Engel - BofA Merrill Lynch, Research Division: A couple of questions, please. One, when you talked about the pilots earlier in the year, You talked about an agreement that raises pay not just this year but in subsequent years as well. Does that change with the union vote, or are they still scheduled to get those increases anyhow? Mark D. Powers: I would speculate, I think that the gains that we outlined, the 3-year gains, will remain in place. And you recall, they're front-end loaded -- they decline in the next 2 years. Glenn D. Engel - BofA Merrill Lynch, Research Division: And maintenance cost was a nice drop for the first time. I guess, for last 2 quarters, it's come down quite a bit. Is this a new lower level for maintenance, or we're just in a little lull period here and it should pick back up as the year progresses? Mark D. Powers: Well, obviously, as you have quickly identified, last year was a miserable comp, right, with a huge spike. So that spike is down. What was driving a lot of -- so -- and part of it was because we have to plan [ph] our agreements and know it more of that type of environment around maintenance. So you'll see the repeat that I promised, I hope, of the types of levels we had last year. But the other piece of the first quarter guidance was that we were flying less and, therefore, burning less hours in cycles. And so some of that maintenance will -- is not gone. It will just be shifted to the right.

Your next question comes from the line of David Fintzen with Barclays. David E. Fintzen - Barclays Capital, Research Division: Question for Mark and maybe building a little bit on Glenn's question. When we look out beyond '14, and obviously, you kind of mentioned a lot of components around fleet and pilot utilization once you get through some of the regulatory changes. Should we be thinking about CASM x fuel growing sub-inflation post '14 as sort of the new run rate? Or is there enough labor cost inflation beyond that even hitting that would be a little tough? Mark D. Powers: I don't like to speculate sort of -- and beyond '14. You're -- so my ironic response is you're asking the CFO, of course, I want to go close to inflation and, certainly, that's sort of beyond '14, how I'm going to try to, if you will, impress the cost on the budget. Having said that, it's clearly, Dave, in 2014, it will be the story of salaries, wages and benefits. And that will be the thing that we do need to ferret out. I would also say within '14, David, that we should hopefully, by the end of -- before -- by the third and fourth quarter, as we sort of better understand the vagaries of FAR 117, we should start to see a lot more softening on the salaries, wages and benefits. Beyond that, though, of course, some of the really good guys beyond the pilot thing is LiveTV. Again, I really cannot wait to be able to announce the completion of that transaction and then really highlight the net CASM benefit of that transaction to JetBlue. The other thing is we will continue to install Sharklets as quickly as possible. And so you will start to see, beyond '14, of the impact of Sharklets and the impact of higher-density A321s. So again, I don't want to promise inflation to you. But certainly, as I work with the team and try to manage cost thereafter, that is certainly the goal. David E. Fintzen - Barclays Capital, Research Division: Okay. No, that's very helpful. Then maybe just a quick one for Robin. On the national to Charleston and Hartford and I know it's -- you're talking 4 flights a day. It's small. I'm just a little surprised, I mean, when things -- in Dave's prepared comments sort of mentioned DCA fits sort of JetBlue's brand in what's becoming a very fragmented Washington. Is that the kind of strategy that you think the brand works, or are those kind of place holders until maybe some typical -- more typical leisure routes can be filled back in? I'm just curious how to think about national going forward.

Thanks. What -- when you're talking about fragmented, do you mean politics or the airline industry? David E. Fintzen - Barclays Capital, Research Division: The airline industry might be more fragmented than the politics in D.C. because there's actually a third party in the airlines in D.C.

Yes, that's true. I'm just checking. Now look, we have been absolutely delighted with what we've been seeing in DCA. I mean, we need to remember, and this is the whole point that Dave was making very publicly in the lead up to our request for divestiture as the condition of the USAA merger. These are markets that have been, with some very high fares, underserved. Customers in the Washington metro area had suffered for years. And for us to go in and with our better product, offer a lower fare, stimulate demand, stimulate new markets, I think that is the territory that we do the best in. And so we see that in Latin America. We've seen that in the Caribbean. We've seen that many years ago in Boston, and now we've seen that into the DCA market. So we looked in a market that had a really high fares, and we felt that, well, we could lower, stimulate. And we're pleased with what we've seen. We have heard from more markets that we will start flying later this year, and those will be announced in the next couple of months.

Your next question comes from the line of John Godyn with Morgan Stanley. John D. Godyn - Morgan Stanley, Research Division: I wanted to ask a little bit about the seat count on the aircraft that JetBlue flies. We've seen a lot of airlines out there, almost one after another sort of dramatically improve profitability by adding seats, slimline seats. They talk about the incremental revenue and incremental cost benefits and how the payback periods are extremely quick. And we haven't really seen JetBlue revisit the aircraft configuration as a tool for maybe improving the profitability in as aggressive of a way. I'm just curious, Dave or Mark, if you could kind of speak to that topic?

John, we'll let Robin jump in on that from the standpoint of just configuration of the fleet. I know that this has been brought up over the last several years on these calls. But, Robin?

I know. This is something we look at all the time. And we made some adjustments to the 190 a couple of years ago, where we reallocated a couple of rows into Even More and reduced the seat pitch. We cut a 100 on the aircraft. I think they -- one of the challenges that we have that's different to others is -- that makes the switch hard, remember, JetBlue, we used to have 162 seats onto the -- on the 320. We went to 160 because we saw it as a better profit maximization tool. And we have a couple of things we have to think about. First of all, we are going to generate $190 million from Even More revenue this year, and that flows straight to the bottom line. So as you add seats and reduce seat pitch, you will lose some of -- some or all of your Even More product. And then secondly, we have the issue where if we add a single extra customer to seat then we significantly increased our in-flight cost because we have to add a flight attendant. So when we compare those hard costs and the pure margin we get from the Even More and we compare that to chasing the lowest fares with some incremental seats, it's hard to make the case to add seats. Having said that, we continue to look at that. And if we believe that becomes the right thing to do from a profit maximization perspective, then we're open to that. John D. Godyn - Morgan Stanley, Research Division: Got it. And I guess there's a broader question there, too. I mean, at what point is it time to sort of look at the playbooks of some of the other ultra-low-cost carriers? And I fully appreciate that JetBlue has more of a hybrid strategy. But at what point do we look at those playbooks and maybe borrow a page or 2 out of those playbooks more aggressively than we have in the past?

John, I think headline again, it's our path about -- we firmly believe there's 3 models in the airline industry. And so the network carriers, they live in the alliance world, the super discounters as you talked about. And I like to think that there's underserved customers, by the way, in both of those models with where we live. And admittedly, we looked at the playbooks from afar from both of those models and see what makes sense for us. And again, more than that, you start to get inside of the LOPA, the configuration of the aircraft, the ancillary revenue stream, it's -- which I'm very excited about in terms of what we've talked about in the past with Datalex and IBM. And our booking flow and -- but it's -- please don't think that we don't take, what is a very respectful look at both of these models and what makes sense for our brand. And I think you're seeing -- again, we continue to be quite forthright regarding the third model out there in the airline industry.

I mean, if I can just build on that premise, David, I mean, I do think that it is a good question and it's sort of the heart of our model. I do think that the -- it kind of went a little bit unnoticed, but -- I mean, we look at the investment that we made in our partnership with Datalex to be very significant in this area in what it's going to enable us to do in the future. We've also made insignificant investments in Mosaic and our TrueBlue base to really create a larger group of customers who are flying more frequently. And those bring a lot more value to us just because of sort of the amount they spend, the amount of trips they're taking. So again, going back to Datalex, our ability to create a retail merchandising capability that's greatly superior to what we have today, to create bundled offerings, which aren't necessarily going to look like the low-cost goods. But certainly, it will allow us to monetize not just some of the product offerings we have today, but maybe take advantage of things that we don't today. We asked a lot about the first bag fee. Our hesitance around that in the past has been we believe that in many of our markets we get a significant fare premium because we don't charge a bag fee and customers certainly take that into the fares. But in a wide way we can start to give customers bundled offerings and choices that allows us to -- if you like, protect the fare where we're seeing -- and in the fare but maybe go after our opportunities like first bag, where maybe today we don't do that. I think the investment in Datalex we're going to start seeing into the early part of next year allows us to do that. So I'm very excited about what's that going to drive. And I anticipate and believe that's going to allow us to significantly enhance some of our ancillary offerings, particularly around things like first bag into next year.

The next question comes from the line of Helane Becker with Cowen. Helane R. Becker - Cowen and Company, LLC, Research Division: I just have 2 questions. One is as I look at the guidance for the second quarter with respect to the -- and, actually, really more the full year, how does the capacity for the A321s come in so that we should think about third and fourth quarter in terms of the percent that the A321s will represent of the system?

Helane, the A321s will be -- we have one on property at the moment. In fact, we have 2 of our 321s that aren't flying, waiting for an STC. Good news is, we just got that this morning. So that's really encouraging. We have another A321 that will be here later this year. The rest of the -- the ones that we have not flying today and the remaining 8 are all our Mint aircraft. Those will be redeployed onto the transcon mid-markets. So by the end of this year, it's 14 of our 190 -- 14 of our 203, 204 aircraft will be Mint. You can see that it's still a relatively small proportion of our total capacity of 321s. So that will grow very quickly over the next few years. Helane R. Becker - Cowen and Company, LLC, Research Division: Okay. And then -- I'm sorry? Mark D. Powers: No, that's fine. I'm simply saying that after the Mint deliveries, then we're back on the high-density airplanes -- fleet. Helane R. Becker - Cowen and Company, LLC, Research Division: Yes, okay. I was going to ask that. Okay. And then the other question I had is with respect to your philosophy on fuel hedging, I think it's always been to reduce volatility or to manage the volatility of the fuel price. With fuel seeming to be a little less volatile, do you have a thought about changing your thoughts on how you're hedging actually? Mark D. Powers: No. And in fact, I should also note that -- if you all look at the -- again, the current positions that the treasury team have put on, it's set forth in the investor update that was filed this morning, you can see that the positions in the prices are not terribly aggressive. They're also generally in the money as we sit today. And I think the lesson is, the minute that you start to get complacent with the narrowband and then Mr. Putin does something in the Ukraine and then you're glad you did it. So God forbid something bad doesn't happen, we hope that these things work out well. But it is the level of securities that I think we're very, very comfortable with. But we haven't done the big 80%, 90% type of big bets. We're not betting the ranch on fuel. So again, we're keeping in that the FFPs are obviously just pre-purchases, and the current ranges are set forth in terms of 15% to 17% in the next 3 months. I think that's fairly conservative. Helane R. Becker - Cowen and Company, LLC, Research Division: Okay. And then could I just ask a Boston-related question? I think there was a time when you guys talked about -- every time you added a city out of Boston, it added relevance to the whole network. And I was just kind of wondering how that was developing this year, because maybe it looks like you're adding less Boston right now to focus more on DCA, which is fine. But I was just kind of wondering how that's just developing.

No, we're very, very pleased with how Boston is developing, and we're still committed to taking that up to 150 flights a day. We are about to take home some more real estate gate space in Terminal C, which kind of allows the future growth there. Our partnership portfolio in Boston is moving very strongly. We know we touched on earlier just on the most recent addition, Detroit, how important partnership traffic is to Boston. And we have other allies like Turkish that are about to start -- that will provide some additional lift, but very pleased, very pleased with Boston. Yes, we have a lot of good traction in the corporate market out there, and we're going to continue to grow that. It's really -- the focus this year is DCA, obviously, was an opportunity that came about that we took advantage of. And as we look at our growth plans, the priorities remain Boston and also Caribbean and Latin America over the next few years.

Your next question comes from the line Savi Syth with Raymond James. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Maybe you're not ready to talk about this, but on LiveTV, I was curious what the investment have been in LiveTV up to this point and then also what the benefits to CASM Ex would be, either magnitude-wise or is that just kind of lower overhead? Mark D. Powers: Well, as to the latter question, we'll detail that more carefully as we close the transaction. And so stay tuned for that, Savi, in terms of more details and also more details on the capital expenditures that we'll be saving moving forward as well. And then in terms of the investment, of course, it was purchased, like, 9, 10 years ago, Dave? And...

'03 or '04. Mark D. Powers: '03 or '04. The investment was $40 million of cash, and I think assumption of about the like number of notes. And during the interim, we have largely been funding the R&D and other development work of LiveTV. So the base is in the property. It's obviously going to be much higher than the initial $80 million of investment that we have in -- while we were owning it, it's hard to say what would be a good payback because we were, of course, enjoying the benefits of a really nicely priced LiveTV feature and product that, I would argue, has been core to the brand. And by the way, that's not going anywhere. We've managed to structure long-term agreements that would preserve our access to both Ka and the TV and the satellite radio and developments to those items hereafter. So it's not going away, we do get to make sure that we preserve that good brand contribution. But I think that's kind of it. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Got it, Mark. And then just on Fort Lauderdale, I just have a question. You know Southwest is talking about growing international or at least the Houston gates come online. Fort Lauderdale is the area of focus. I'm wondering if you -- what you've seen there from Southwest and maybe potential impacts that you may see with their targeted growth in international.

No. I mean, I -- Fort Lauderdale growth is well underway for us. We have partnership, a great partnership with BCAD and the airport in Fort Lauderdale-Hollywood as we kind of connect Terminal 4 and Terminal 3 together. I think the Southwest plan is much longer term, just because the facility doesn't exist over there, it has to be built. And I think we'll be way underway. If you just look at the size of the market out of South Florida and you kind of bring Miami into that and you look at the amount of opportunities that exist there and the high fares that exist out of that airport into many of these markets, I think we're going to continue be extremely successful. And I'm not concerned about what Southwest plans may or may not be at all. Savanthi Syth - Raymond James & Associates, Inc., Research Division: That's helpful. If I may sink in one last thing, Robin, how is Mint booking up versus expectation?

Early days because, obviously, the market tends to book fairly late. But I think a lot of our early bookings are sort of people who are sort of enthused as to -- as to the product. But we're very happy with it. I mean, as a reminder, when we went into this product, we weren't aiming at the corporate market at all. It was much more in terms of the sort of small, medium-sized companies and the -- and leisure flyers. I think if there's anything that surprised us, it's how much interest there has been from the corporate market, which wasn't certainly something we expected going into this

Your next question comes from the line of Hunter Keay with Wolfe Research. Hunter K. Keay - Wolfe Research, LLC: Can you guys maybe share with us the -- what the payback period assumption is for the purchase of the DCA slots and then maybe high-level assumptions that went into that decision-making process, like maybe a conclusion of the NPV process or something like that? Mark, sorry. It was -- if you do guys look at NPV analysis on a DCA slot acquisition. And maybe if so, could you share maybe some of the inputs or the conclusions from that? Mark D. Powers: No. Actually, I'm not going to answer that question. But I will tell you Scott Laurence and his team put together a very rigorous analysis of that -- which is absolutely critical in terms of pricing the bid. So all I can do is share with you that the analysis was really robust, long term as well. Hunter K. Keay - Wolfe Research, LLC: And any comment on sort of the payback period? You want to share that or no?

We don't comment on that. Hunter K. Keay - Wolfe Research, LLC: Okay. No problem. And I'm kind of curious to think about Mint from a CASM perspective. How should I think about the impact of CASM x fuel on a fully annualized basis from the impact of Mint? Obviously, you guys believe the project is going to be margin accretive, and I appreciate that. But just in terms of the impact to CASM Ex-Fuel, how should we think about annually going forward?

I think you can't look at -- and I'll let Robin chime in here, but Mint is an interesting little beast, right? It's got a great revenue premium feature. It is, by definition, going to be more expensive, both in terms of geographies spent on the airplane in terms of the [indiscernible], as well as the product that we're providing the customer. Frankly, I will tell you the interesting thing about Mint is it really is optimized because of the A321 configuration. And so we think it will be optimized, particularly relative to using an A320 airplane. But it will clearly be slightly higher across, just in terms of the geography on the airplane and the -- but likewise, we're anticipating some of the types of success we've seen other airlines use in transcon markets in terms of revenue premium. Robin?

Yes. No, I don't really have much to add. I mean, just keeping things in perspective, so we will, by the end of the year, have 8 Mint aircraft delivered on a total fleet of just over 200. If we look at where most of the benefit sits, it's really -- and we just -- we talked about this on one of the previous investor day is the -- we did very well from a unit revenue perspective. Most of our network, transcon has been one of the spots where we've been significantly behind. And when you break that out, it's the lack of access to that premium market that we have been suffering from. So we see that as a very accretive opportunity in the 2 markets that we're flying to change that, make a significant change to our sort of transcon profitability in those 2 markets. And I think that's something that we're looking forward to getting starting here on June '15.

Your next question comes from the line of Kevin Crissey with Skyline Research. Kevin Crissey - Skyline Research LLC: On LiveTV, can you just talk to the way that the services -- how are you going to pay for the service in the future? Is it on an aircraft basis? Is it on a seat basis? Is it by share revenue? Can you kind of describe to us the structure of that arrangement?

Thanks, Kevin. I don't think we're actually going to talk about that. Clearly, that's a competitive feature. We still own LiveTV, by the way, and we are in the process of negotiating with -- or LiveTV is in the process of negotiating with other potential customers. So in terms of the details of the LiveTV jet remodel, I think we, to the extent we can, we will keep it confidential. Although in the context of talking about CASM moving forward, we will talk in very high dollars about what the CASM will be moving forward without breaking down how it's paid. Kevin Crissey - Skyline Research LLC: Okay. It's -- I guess it's just challenging for us to know whether you got -- and my initial sense was a good price based on profitability, but you certainly could quote, "overpay" for the service and get more upfront, right? So it's hard for us to assess without kind of understanding any of that so.

Yes. No, just to assure you, that was a well-negotiated transaction that -- the other complication you're going to have is that heretofore, those fees to LiveTV have, on a consolidated basis, been offset, right, so there's a little visibility moving in the past. We're very, very happy, on a standalone basis, with the fee arrangement that we've -- post close, have arranged with LiveTV.

Our last question comes from the line of Joe DeNardi with Stifel. Joseph W. DeNardi - Stifel, Nicolaus & Company, Incorporated, Research Division: A question on the ROIC goal for the year. I think, obviously, first quarter margins were under pressure here, and the cost guidance for second quarter implies that might continue a little bit. I'm just curious what sort of margin for the full year you think you need to hit the ROIC goal, assuming whatever plans you have for the capital side of the equation and maybe how much easier the LiveTV transaction makes that. Mark D. Powers: First of all, I would also, again, remind you, I think we said this, Dave, you may have mentioned this as well, that the -- that we were not -- we did not include or bake in the positive impact of the LiveTV transaction in the 7% goal. And so that idea is upside to that result. And I don't know what margin you expect to see to hit 7%. But I would say just as you think about modeling it, assume that the denominator invested capital will be flat. I think I just did give you the PV roadmap.

Can I as well -- I mean, can I just add one point of clarity around some of the cost guidance in Q2 as well, because it does actually relate back to Hercules. I mean, I think one of the things that we took a decision to do when we sort of got into the Hercules, I -- and the sort of impact on FAR 117, we did bring forward some pilot and in-flight crew recruitment that was scheduled a bit later in the year to bring that forward to derisk the summer a little bit. So you are seeing some of those costs into quarter 2. But in terms of, do we end the year with additional people? Yes, that is more -- it was more just a timing issue to do with the summer. Now we do believe with some of the thunderstorms and weather events we get here in the Northeast into the summer, we did need to -- and the impact of the new FAR 117 rules, we did need to derisk that a little bit. So I just wanted to provide some clarity on some of our Q2 cost guidance. Joseph W. DeNardi - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. Yes, that's very helpful. And then if you guys could just give us an update on kind of the initial feedback you're getting on Fly-Fi in terms of maybe take rates or just customer experience, that'd be helpful.

Sure, and I'm happy to do that. So we have 36 aircraft installed. I don't -- obviously, I am impatient to get the whole fleet installed so we can start sort of promoting and advertising it and customers can bank on it. What I would tell you, with the exception of one flight that Dave took where it didn't work, we are seeing really, really good customer feedback. In fact, on some of the transcon flying, we've had flights with excess of over 100 customers connected simultaneously. And I think there's no doubt that the product that LiveTV and ViaSat have developed is a game changer in terms of the in-cabin experience. And we're going to detail -- at the moment, we're focused on the roll out and just ironing out some of the teething bugs. We're still sort of going through a process of upgrading the software to make it a little bit more stable. But as we then move into the second half of the year, our focus moves to the sort of how do we then create sort of a stronger monetization event around Wi-Fi. But I couldn't be happier and just frustrated that we can't get the fleet installed more quickly. But we're rolling out 4 320s a week, which isn't a bad pace. Lisa Studness-Reifer: Thanks. That concludes our first quarter 2014 conference call. We'll talk to you again in 3 months with our second quarter call. Thanks for joining us, and have a great day.

Again, that will conclude today's conference. Thank you for your participation.