JetBlue Airlines 2003 Annual Report Download - page 48

Contractual Obligations
Our noncancelable contractual obligations at December 31, 2003, include the following (in
millions):
Payments due in
Total 2004 2005 2006 2007 2008 Thereafter
Long-term debt(1) .................. $ 1,434 $ 102 $ 103 $ 99 $ 98 $ 98 $ 934
Operating leases ................... 1,076 97 104 107 92 87 589
Flight equipment obligations ........... 6,580 640 790 1,030 1,045 990 2,085
Short-term borrowings ............... 30 30———— —
Facilities and other(2) ............... 236 98 40 23 27 23 25
Total ............................ $ 9,356 $ 967 $ 1,037 $ 1,259 $ 1,262 $ 1,198 $ 3,633
(1) Includes actual interest and estimated interest for floating-rate debt based on December 31, 2003
rates.
(2) Amounts represent noncancelable commitments for the purchase of goods and services.
All of our debt, other than our 31⁄2% convertible notes, has floating interest rates and had a
weighted average maturity of 8.9 years at December 31, 2003. Interest rates adjust quarterly or
semi-annually based on the London Interbank Offered Rate. Under the debt agreements related to two
of our aircraft, we are required to comply with two specific financial covenants. The first requires that
our tangible net worth be at least 12% of our total assets. The second requires that for each quarter,
our EBITDA for the prior four quarters must be at least twice our interest expense for those four
quarters. Our inability to comply with the required financial maintenance covenants or provisions could
result in default under these financing agreements and would result in a cross default under our other
financing agreements. In the event of any such default and our inability to obtain a waiver of the
default, all amounts outstanding under the agreements could be declared to be immediately due and
payable. If we did not have sufficient available cash to pay all amounts that become due and payable,
we would have to seek additional debt or equity financing, which may not be available on acceptable
terms, or at all. At December 31, 2003, we were in compliance with the covenants of all of our debt
and lease agreements.
We have significant operating lease obligations for 24 aircraft with lease terms that range from 10
to 20 years. Five of these aircraft have variable-rate rent payments and adjust semi-annually based on
the London Interbank Offered Rate. We also lease airport terminal space and other airport facilities in
each of our markets, as well as office space and other equipment. We have leased one additional
aircraft in 2004 under a 12-year long-term operating lease. In conjunction with certain of these lease
obligations, we also had $15.1 million of restricted cash pledged under standby letters of credit at
December 31, 2003 which expire at the end of the related lease terms.
During September 2003, we reached an agreement with the Port Authority of New York and New
Jersey on the terms of a lease for the use of Terminal 6 and the adjoining ramp area, through
November 2006. We are awaiting execution of this lease by the Port Authority. In addition, discussions
are ongoing with the Port Authority and the FAA regarding the construction of a new terminal at JFK.
If an agreement is reached, we plan to build a new terminal with occupancy projected in late 2007.
In October 2003, the Port Authority and the City of New York reached an agreement that extends
the Port Authority’s lease for JFK and LaGuardia Airports through 2050 and will require a nearly
$700 million payment by the Port Authority to the City of New York at closing and increased rents
thereafter. Independently, negotiations are ongoing to extend the use agreement that the airlines have
with the Port Authority for the non-exclusive use of runways, taxiways and other facilities at these two
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