JetBlue Airlines 2010 Annual Report Download - page 68

The carrying amounts and estimated fair values of our long-term debt at December 31, 2010 and 2009
were as follows (in millions):
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
December 31, 2010 December 31, 2009
Public Debt
Floating rate enhanced equipment notes
Class G-1, due through 2016 .................. $ 234 $ 210 $ 265 $ 205
Class G-2, due 2014 and 2016 ................. 373 312 373 261
Class B-1, due 2014 ......................... 49 46 49 35
Fixed rate special facility bonds, due through 2036 .... 84 75 85 70
6.75% convertible debentures due in 2039 .......... 201 293 201 250
3.75% convertible debentures due in 2035 .......... — — 154 156
5.5% convertible debentures due in 2038 ........... 123 194 123 166
3.5% convertible notes due in 2033 ............... — — 1 1
Non-Public Debt
Floating rate equipment notes, due through 2020 ..... 696 654 697 592
Fixed rate equipment notes, due through 2024 ....... 1,144 1,132 1,163 985
Total........................................ $2,904 $2,916 $3,111 $2,721
The estimated fair values of our publicly held long-term debt were based on quoted market prices or
other observable market inputs when instruments are not actively traded. The fair value of our non-public debt
was estimated using discounted cash flow analysis based on our borrowing rates for instruments with similar
terms. The fair values of our other financial instruments approximate their carrying values.
We utilize a policy provider to provide credit support on the Class G-1 and Class G-2 certificates. The
policy provider has unconditionally guaranteed the payment of interest on the certificates when due and the
payment of principal on the certificates no later than 18 months after the final expected regular distribution
date. The policy provider is MBIA Insurance Corporation (a subsidiary of MBIA, Inc.).
We have determined that each of the trusts related to our aircraft EETCs meet the definition of a variable
interest entity as defined in the Consolidations topic of the Codification and must be considered for
consolidation in our financial statements. Our assessment of the EETCs considers both quantitative and
qualitative factors, including whether we have the power to direct the activities and to what extent we
participate in the sharing of benefits and losses. We evaluated the purpose for which these trusts were
established and nature of risks in each. These trusts were not designed to pass along variability to us. We
concluded that we are not the primary beneficiary in these trusts due to our involvement in them being limited
to principal and interest payments on the related notes and the variability created by credit risk related to us
and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our
financial statements.
Note 3—Operating Leases
We lease aircraft, as well as airport terminal space, other airport facilities, office space and other
equipment, under leases which expire in various years through 2035. Total rental expense for all operating
leases in 2010, 2009 and 2008 was $245 million, $236 million and $243 million, respectively. We have
$31 million in assets that serve as collateral for letters of credit related to certain of our leases, which are
included in restricted cash.
During 2010, we leased six used Airbus A320 aircraft from a third party. As of December 31, 2010, five
of the six had been delivered and placed in service and the remaining aircraft was delivered in December 2010
and placed in service in January 2011. Operating leases were executed for each aircraft upon delivery for six
year terms.
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