JetBlue Airlines 2008 Annual Report Download - page 60

2008, we fully repaid the principal balances of the Class C certificates. In February 2008, we entered into
interest rate swap agreements that have effectively fixed the interest rate for the remaining term of our
Class G-1 certificates for the November 2004 offering. These certificates had a balance of $141 million at
December 31, 2008 and an effective interest rate of 4.6%. The interest rate for all other certificates is
based on three month LIBOR plus a margin. Interest is payable quarterly.
(4) In December 2006, the New York City Industrial Development Agency issued special facility revenue
bonds for JFK and, in November 2005, the Greater Orlando Aviation Authority issued special purpose
airport facilities revenue bonds, in each case for reimbursement to us for certain airport facility
construction and other costs. We have recorded the issuance of $39 million (net of $1 million discount)
and $45 million (net of $2 million discount), respectively, principal amount of these bonds as long-term
debt on our consolidated balance sheet because we have issued a guarantee of the debt payments on the
bonds. This fixed rate debt is secured by leasehold mortgages of our airport facilities.
(5) On December 10, 2008, we entered into the UBS auction rate security loan program under a credit line
agreement with UBS Securities LLC and UBS Financial Services Inc, or UBS, which provides us with a
no net cost loan in the principal amount of $53 million. However, this credit line agreement calls for all
interest income earned on the ARS being held by UBS to be automatically transferred to UBS. This line
of credit is secured by approximately $85 million in par value of our ARS being held by UBS. The term
of the credit line is through at least June 30, 2010.
(6) In March 2005, we completed a public offering of $250 million aggregate principal amount of 33⁄4%
convertible unsecured debentures due 2035, which are currently convertible into 14.6 million shares of our
common stock at a price of approximately $17.10 per share, or 58.4795 shares per $1,000 principal
amount of debentures, subject to further adjustment. Upon conversion, we have the right to deliver, in lieu
of shares of our common stock, cash or a combination of cash and shares of our common stock.
At any time, we may irrevocably elect to satisfy our conversion obligation with respect to the principal
amount of the debentures to be converted with a combination of cash and shares of our common stock. At
any time on or after March 20, 2010, we may redeem any of the debentures for cash at a redemption price
of 100% of their principal amount, plus accrued and unpaid interest. Holders may require us to repurchase
the debentures for cash at a repurchase price equal to 100% of their principal amount plus accrued and
unpaid interest, if any, on March 15, 2010, 2015, 2020, 2025 and 2030, or at any time prior to their
maturity upon the occurrence of a specified designated event. Interest is payable semi-annually on March
15 and September 15.
In 2008, we repurchased a total of $73 million principal amount of the debentures for $54 million. The
$18 million net gain from these transactions is recorded in interest income and other in the accompanying
consolidated statements of operations.
(7) On June 4, 2008, we completed a public offering of $100.6 million aggregate principal amount of 5.5%
Series A convertible debentures due 2038, or the Series A Debentures, and $100.6 million aggregate
principal amount of 5.5% Series B convertible debentures due 2038, or the Series B Debentures, and
collectively with the Series A Debentures, the Debentures. The Debentures are general senior obligations
secured in part by an escrow account for each series. We deposited approximately $32 million of the net
proceeds from the offering, representing the first six scheduled semi-annual interest payments on the
Debentures, into escrow accounts for the exclusive benefit of the holders of each series of Debentures. The
total net proceeds of the offering were approximately $165 million, after deducting underwriting fees and
other transaction related expenses as well as the $32 million escrow deposit. Interest on the Debentures is
payable semi-annually on April 15 and October 15.
Holders of the Series A Debentures may convert them into shares of our common stock at any time at a
conversion rate of 220.6288 shares per $1,000 principal amount of Series A Debenture. Holders of the
Series B Debentures may convert them into shares of our common stock at any time at a conversion rate
of 225.2252 shares per $1,000 principal amount of Series B Debenture. The conversion rates are subject to
adjustment should we declare common stock dividends or effect any common stock splits or similar
transactions. If the holders convert the Debentures in connection with any fundamental corporate change
that occurs prior to October 15, 2013 for the Series A Debentures or October 15, 2015 for the Series B
Debentures, the applicable conversion rate may be increased depending upon our then current common
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