JetBlue Airlines 2008 Annual Report Download - page 56

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JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
JetBlue Airways Corporation is an innovative passenger airline that provides award winning customer
service at competitive fares primarily on point-to-point routes. We offer our customers a high quality product
with young, fuel-efficient 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, where we now have more
enplanements than any other airline. As of December 31, 2008, we served 52 destinations in 19 states, Puerto
Rico, Mexico, and five countries in the Caribbean and Latin America. 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 2008, 2007 and 2006. 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.
Fair Value: Effective January 1, 2008, we adopted Statement of Financial Accounting Standard
No. 157, Fair Value Measurements, or SFAS 157, which establishes a framework for measuring fair value and
requires enhanced disclosures about fair value measurements. SFAS 157 clarifies that fair value is an exit
price, representing the amount that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. SFAS 157 also requires disclosure about how fair value is
determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be
grouped, based on significant levels of inputs. See Note 13 for more information, including a listing of our
assets and liabilities required to be measured at fair value on a recurring basis and where they are classified
within the hierarchy as of December 31, 2008
Cash and Cash Equivalents: Our cash and cash equivalents include short-term, highly liquid
investments which are readily convertible into cash. These investments include money market securities with
maturities of three months or less when purchased that are considered to be easily tradable.
Restricted Cash: Restricted cash primarily consists of security deposits and performance bonds for
aircraft and facility leases, funds held in escrow for estimated workers’ compensation obligations, and funds
held as collateral for our primary credit card processor.
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. We estimate an
allowance for doubtful accounts based on known troubled accounts, if any, and historical experience of losses
incurred.
Investment Securities: Investment securities consist of the following: (a) auction rate securities stated at
fair value; (b) investment-grade interest bearing instruments classified as held-to-maturity investments and
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