JetBlue Airlines 2008 Annual Report Download - page 59

instruments entirely as debt. FSP APB 14-1 is effective for financial statements issued for fiscal years
beginning after December 15, 2008 and interim periods within those fiscal years. We have considered the
impact of our adoption of FSP APB 14-1 on our consolidated financial statements, and we estimate that our
$250 million aggregate principal amount of 33⁄4% convertible unsecured debentures due 2035 will have an
approximate initial measurement of a $200 million liability component and a $50 million equity component.
We estimate we would have had an additional $10 million in interest expense in each of the years ended
December 31, 2006, 2007, and 2008.
In March 2008, the FASB issued SFAS 161, Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement No. 133, which enhances the disclosure requirements related to
derivative instruments and hedging activity to improve the transparency of financial reporting, and is effective
for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the
impact of adoption of SFAS 161.
Note 2—Long-term Debt, Short-term Borrowings and Capital Lease Obligations
Long-term debt and the related weighted average interest rate at December 31, 2008 and 2007 consisted
of the following (in millions):
2008 2007
Secured Debt
Floating rate equipment notes, due through 2020 (1)...... $ 659 4.5% $ 724 6.7%
Floating rate enhanced equipment notes (2) (3)
Class G-1, due through 2016 ..................... 296 4.0% 321 5.6%
Class G-2, due 2014 and 2016 .................... 373 2.8% 373 5.7%
Class B-1, due 2014............................ 49 7.1% 49 8.3%
Class C, due through 2008 ....................... — 102 8.5%
Fixed rate equipment notes, due through 2023 .......... 1,075 5.9% 778 6.7%
Fixed rate special facility bonds, due through 2036 (4) .... 85 6.0% 85 6.0%
UBS line of credit (5) ............................ 53 —
Unsecured Debt
33⁄4% convertible debentures due in 2035 (6) ........... 177 250
51⁄2% convertible debentures due in 2038 (7) ........... 126 —
31⁄2% convertible notes due in 2033 (8) . . . ............ 1 175
Capital Leases (9) .............................. 141 5.4% 148 6.2%
Total debt and capital lease obligations . . . ............ 3,035 3,005
Less: current maturities ......................... (152) (417)
Long-term debt and capital lease obligations ........... $2,883 $2,588
(1) Interest rates adjust quarterly or semi-annually based on the London Interbank Offered Rate, or LIBOR,
plus a margin.
(2) In November 2006, we completed a public offering of $124 million of pass-through certificates to finance
certain of our owned aircraft spare parts. Separate trusts were established for each class of these
certificates. The entire principal amount of the Class G-1 and Class B-1 certificates is scheduled to be
paid in a lump sum on the applicable maturity date. The interest rate for all certificates is based on three
month LIBOR plus a margin. Interest is payable quarterly.
(3) In November 2004 and March 2004, we completed public offerings of $498 million and $431 million,
respectively, of pass-through certificates to finance the purchase of 28 new Airbus A320 aircraft delivered
through 2005. Separate trusts were established for each class of these certificates. Quarterly principal
payments are required on the Class G-1 certificates. The entire principal amount of the Class G-2
certificates is scheduled to be paid in a lump sum on the applicable maturity dates. In June and November
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