JetBlue Airlines 2007 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2007 JetBlue Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
JetBlue Airways Corporation is an innovative, low cost passenger airline that provides high
quality customer service at low fares primarily on point-to-point routes. We offer our customers a high
quality product with new aircraft, leather seats, free in-flight entertainment 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, which
serves as the origination or destination for 59%of our flights. We currently serve 53 destinations in 21
states, Puerto Rico, Mexico and the Caribbean. LiveTV, LLC, or LiveTV, a wholly owned subsidiary,
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 our subsidiaries, collectively ‘‘we’’ or the ‘‘Company’’, with all
intercompany transactions and balances having been eliminated. Air transportation services accounted
for substantially all the Company’s operations in 2007, 2006 and 2005. Accordingly, segment
information is not provided for LiveTV.
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.
Accounts and Other Receivables: Accounts and other receivables are carried at cost. They
primarily consist of amounts due from credit card companies associated with sales of tickets for future
travel and amounts due from counterparties associated with fuel derivative instruments that have
settled.
Investment Securities: Investment securities consist of the following: (a) auction rate securities
with auction reset periods less than 12 months, classified as available-for-sale securities and stated at
fair value; (b) investment-grade interest bearing instruments maturing in 12 months or less, classified
as held-to-maturity investments and stated at amortized cost; and (c) derivative instruments settling
within 12 months, stated at fair value. The cost of securities sold is based on specific identification.
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.
49