JetBlue Airlines 2006 Annual Report Download - page 47

Financing activities during 2005 consisted primarily of (1) our November 2005 public offering of
12.9 million shares of our common stock at $12.00 per share, as adjusted for our December 2005
three-for-two stock split, raising net proceeds of $153 million, (2) the sale and leaseback over 18 years
of six EMBRAER 190 aircraft for $152 million by a U.S. leasing institution, (3) the financing of
15 Airbus A320 aircraft with $498 million in floating rate equipment notes purchased with the
proceeds from our November 2004 public offering of Series 2004-2 pass-through certificates, (4) our
issuance of a $33 million 12-year fixed rate equipment note issued to a European bank secured by one
Airbus A320 aircraft, (5) our March 2005 issuance of $250 million of 3
3
⁄ 4 %convertible debentures due
2035, raising net proceeds of approximately $243 million, (6) the financing of flight training devices
with $50 million in secured loan proceeds from Export Development Canada, (7) the financing of a
hangar and training center in Orlando, FL with $47 million in special facilities bonds, of which
$41 million was received by year end, and (8) scheduled maturities of $117 million of debt.
None of our lenders or lessors are affiliated with us. Our short-term borrowings consist of two
floating rate facilities, each 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, other than our short-term
aircraft predelivery deposit facilities, and virtually all of our property and equipment is encumbered.
We typically finance our aircraft through either secured debt or lease financing. At December 31,
2006, we operated a fleet of 119 aircraft, of which 47 were financed under operating leases, two were
financed under capital leases and the remaining 70 were financed by secured debt. Financing in the
form of secured debt or operating leases had been arranged for seven of our 12 Airbus A320 aircraft
and for eight of our 10 EMBRAER 190 aircraft scheduled for delivery in 2007. 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. We had working capital of $73 million at December 31, 2006, compared to a
working capital deficit of $41 million at December 31, 2005. We expect to meet our obligations as they
become due through available cash, investment securities and internally generated funds,
supplemented as necessary by debt and/or equity financings and proceeds from aircraft sale and
leaseback transactions. We expect to generate positive working capital through our operations.
However, we cannot predict what the effect on our business might be from the extremely competitive
environment we are operating in or from events that are beyond our control, such as continued
unprecedented high fuel prices, the impact of airline bankruptcies or consolidations, U.S. military
actions or acts of terrorism. Assuming that we utilize the predelivery short-term borrowing facilities
available to us and obtain financing for the seven remaining aircraft scheduled for delivery in 2007, 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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