JetBlue Airlines 2005 Annual Report Download - page 47

Contractual Obligations
Our noncancelable contractual obligations at December 31, 2005 include the following (in
millions):
Payments due in
Total 2006 2007 2008 2009 2010 Thereafter
Long-term debt (1) ......... $ 3,400 $ 284 $ 282 $ 304 $ 207 $ 200 $ 2,123
Lease commitments ......... 1,707 157 155 145 129 119 1,002
Flight equipment obligations . 6,440 1,115 1,170 1,200 1,230 1,180 545
Short-term borrowings ...... 65 65———— —
Financing obligations and
other (2)................. 2,439 188 83 115 147 158 1,748
Total ...................... $ 14,051 $ 1,809 $ 1,690 $ 1,764 $ 1,713 $ 1,657 $ 5,418
(1) Includes actual interest and estimated interest for floating-rate debt based on December 31, 2005
rates.
(2) Amounts include noncancelable commitments for the purchase of goods and services.
All of our debt, other than our convertible debt and notes for one A320 aircraft, has floating
interest rates and had a weighted average maturity of 9.1 years at December 31, 2005. Interest rates
adjust quarterly or semi-annually based on the London Interbank Offered Rate, or LIBOR. 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, 2005, we were
in compliance with the covenants of all of our debt and lease agreements.
We have significant operating lease obligations for 31 aircraft with initial lease terms that range
from 10 to 20 years. Five of these aircraft have variable-rate rent payments and adjust semi-annually
based on LIBOR. 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 $111 million of restricted assets
pledged under standby letters of credit related to certain of our leases, $80 million of which will expire
in 2007 and the remainder at the end of the related lease terms.
Our firm aircraft orders at December 31, 2005 consisted of 98 Airbus A320 aircraft and 94
EMBRAER 190 aircraft scheduled for delivery as follows: 35 in each of 2006, 2007 and 2008, 36 in
each of 2009 and 2010, and 15 in 2011. We meet our predelivery deposit requirements for our aircraft
by paying cash or by using short-term borrowing facilities for deposits required six to 24 months prior
to delivery. Any predelivery deposits paid by the issuance of notes are fully repaid at the time of
delivery of the related aircraft.
We also have options to acquire 50 additional Airbus A320 aircraft for delivery from 2008
through 2013 and 100 additional EMBRAER190 aircraft for delivery from 2011 through 2016. We can
elect to substitute Airbus A321 aircraft or A319 aircraft for the A320 aircraft until 21 months prior to
the scheduled delivery date for those aircraft not on firm order.
Anticipated capital expenditures for facility improvements, spare parts and ground purchases for
2006 are projected to be approximately $175 million in the aggregate. In November 2005, we executed
a 30-year lease agreement with the PANYNJ for the construction and operation of a new terminal at
JFK with occupancy projected in early 2009, which for financial reporting purposes will be accounted
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