JetBlue Airlines 2003 Annual Report Download - page 47

Financing activities during 2002 consisted primarily of (1) the completion on April 17, 2002, of our
initial public offering of 15,180,000 shares of our common stock at $12.00 per share, raising net
proceeds of $167.4 million, (2) the incurrence of $416 million of 10- to 12- year floating rate equipment
notes issued to various European banks secured by 12 aircraft and a 5-year floating rate equipment
note secured by a spare engine, (3) the sale and leaseback over 18 years of one aircraft for
$38.5 million financed by a Japanese institution, (4) the sale and leaseback over 20 years of three
aircraft for $111.5 million financed by a U.S. leasing institution, (5) the net repayment of short-term
borrowings of $7.1 million, and (6) the repayment of $71.4 million of debt.
None of our lenders or lessors are affiliated with us. Our short-term borrowings are part of a
floating rate facility with a group of commercial banks to finance aircraft predelivery deposits.
Capital Resources. We have been able to generate sufficient funds from operations to meet our
working capital requirements. We do not currently have any lines of credit and almost all of our
property and equipment is encumbered. We typically finance our aircraft through either secured debt
or lease financing. At December 31, 2003, we operated a fleet of 53 Airbus A320 aircraft, of which 24
are financed under operating leases with the remaining 29 financed by secured debt. At December 31,
2003, financing in the form of secured debt or operating leases had been arranged for three aircraft
deliveries scheduled for 2004. Lease financing has been arranged for the first 30 of our EMBRAER
190 aircraft deliveries. Although we believe that debt and/or lease financing should be available for our
remaining aircraft deliveries, we cannot assure you that we will be able to secure financing on terms
attractive to us, if at all. While these financings may or may not result in an increase in liabilities on
our balance sheet, our fixed costs will increase significantly regardless of the financing method
ultimately chosen. To the extent we cannot secure financing, we may be required to modify our aircraft
acquisition plans or incur higher than anticipated financing costs.
Working Capital. Our working capital was $276.1 million and $13.4 million at December 31, 2003
and December 31, 2002, respectively. We expect to meet our obligations as they become due through
available cash and internally generated funds, supplemented as necessary by debt and/or equity
financings and proceeds from aircraft sale and leaseback transactions. We expect to continue generating
positive working capital through our operations. However, we cannot predict whether current trends
and conditions will continue or what the effect on our business might be from the fiercely competitive
environment we are operating in or from events that are beyond our control, such as increased fuel
prices, airline bankruptcies or consolidations, U.S. military actions, or acts of terrorism. We need to
obtain financing for all of our 13 remaining aircraft deliveries scheduled for 2004 as our anticipated
cash flows from operations are not expected to be sufficient to cover their acquisition costs. Assuming
that we obtain this financing and utilize the predelivery short-term borrowing facility available to us, we
believe the working capital available to us will be sufficient to meet our cash requirements for at least
the next 12 months.
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