JetBlue Airlines 2003 Annual Report Download - page 58

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JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
JetBlue Airways Corporation offers low-fare, low-cost passenger air transportation service that
provides high-quality customer service primarily on point-to-point routes. We offer our customers a
differentiated product, with new aircraft, low fares, leather seats, free LiveTV (a direct satellite TV
service) at every seat, pre-assigned seating and reliable performance. We commenced service in
February 2000 and established our primary base of operations at New York’s John F. Kennedy
International Airport, or JFK. In August 2001, we began service at our West Coast base of operations,
Long Beach Municipal Airport, which serves the Los Angeles area. Our wholly owned subsidiary,
LiveTV, LLC, or LiveTV, provides in-flight entertainment systems for commercial aircraft, including live
in-seat satellite television, digital satellite radio, wireless aircraft data link service and cabin surveillance
systems.
Note 1—Summary of Significant Accounting Policies
Basis of Presentation: Our consolidated financial statements include the accounts of JetBlue
Airways Corporation, or JetBlue, and LiveTV, collectively ‘‘we’’ or the ‘‘Company’’, with all
intercompany transactions and balances having been eliminated. Air transportation services accounted
for all the Company’s operations in 2001 and substantially all its operations in 2002 and 2003.
Accordingly, segment information is not provided for LiveTV. Certain prior year amounts have been
reclassified to conform to the current year presentation.
Use of Estimates: We are required to make estimates and assumptions when preparing our
consolidated financial statements in conformity with accounting principles generally accepted in the
United States that affect the amounts reported in our consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents: Cash equivalents consist of short-term, highly liquid investments which
are readily convertible into cash with maturities of three months or less when purchased.
Short-Term Investments: Short-term investments consist of investment-grade, interest bearing
instruments maturing in 12 months or less stated at amortized cost as well as fuel hedge derivative
contracts settling within 12 months stated at fair value. All short-term investments, except for our fuel
hedge derivative contracts, are classified as held-to-maturity securities.
Inventories: Inventories consist of expendable aircraft spare parts, supplies and aircraft fuel. These
items are stated at average cost and charged to expense when used. An allowance for obsolescence on
aircraft spare parts is provided over the remaining useful life of the related aircraft.
Property and Equipment: We record our property and equipment at cost and depreciate these
assets on a straight-line basis to their estimated residual values over their estimated useful lives.
Additions, modifications that enhance the operating performance of our assets, and interest related to
predelivery deposits to acquire new aircraft and for the construction of facilities are capitalized.
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