JetBlue Airlines 2011 Annual Report Download

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2011

Table of contents

  • Page 1
    201 1

  • Page 2

  • Page 3
    ... from Boston and our domestic operations accounted for more than 20% of all domestic flights at Logan Airport. As we increase relevance in Boston, our percentage of higher yielding business customers has increased to about 30% of all traffic carried. This in turn helps smooth the seasonality of...

  • Page 4
    ... most fuel efficient fleet in the U.S. with an average fleet age of only 6.1 years, and we use efficient operating procedures to save fuel such as single engine taxi. In addition, we continue to manage a fuel hedge portfolio as insurance to help mitigate price volatility and protect JetBlue against...

  • Page 5
    At the end of 2011, JetBlue operated a total of 169 aircraft, including 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft. In June 2011, we announced several significant changes to our fleet plan, which we believe will better position JetBlue to compete successfully over the long term. These ...

  • Page 6
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  • Page 7
    ...the registrant as of June 30, 2011 was approximately $2,078,666,000 (based on the last reported sale price on the NASDAQ Global Select Market on that date). The number of shares outstanding of the registrant's common stock as of January 31, 2012 was 282,068,233 shares. Act. DOCUMENTS INCORPORATED BY...

  • Page 8
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  • Page 9
    ......Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 10
    ... to legal risk; reputational and business risk from information security breaches; a negative impact on the JetBlue brand; the long term nature of our fleet order book; changes in or additional government rules, regulations or laws; changes in our industry due to other airlines' financial condition...

  • Page 11
    ... in the Caribbean and Latin America. JetBlue is New York's Hometown Airline â„¢ with most of our flights having as an origin or destination New York or one of our other focus cities: Boston, Fort Lauderdale, Los Angeles, Orlando or San Juan, Puerto Rico. By the end of 2011, we operated an average of...

  • Page 12
    ... combined with superior customer service at low fares led to early success, predominantly with leisure travelers in New York. By the end of 2006, JetBlue employed over 10,000 Crewmembers, operated 500 daily flights with a fleet of 119 aircraft and generated annual revenues exceeding $2 billion...

  • Page 13
    .... High Quality Service and Product. Onboard JetBlue, customers enjoy new aircraft with roomy leather seats and more legroom than other domestic airlines provide in their coach (and on some, premium) service. Our aircraft's inflight entertainment systems include 36 channels of free DirecTV®, 100...

  • Page 14
    ... average for this type of aircraft and are arranged in a two-by-two seating configuration. We offer the most legroom in the main cabin of all U.S. airlines in our Even More Space rows. We believe our strong brand and the JetBlue Experience are key elements of our continued success. To that end...

  • Page 15
    ... of transporting passengers on our aircraft with domestic U.S. operations, including Puerto Rico, accounting for 85% of our capacity in 2011. The historic distribution of our available seat miles, or capacity, by region is: Capacity Distribution Year Ended December 31, 2011 2010 2009 East Coast...

  • Page 16
    ...York City, the nation's largest travel market and the largest U.S. point of entry from international locations. We are the largest domestic airline at New York's John F. Kennedy International Airport, or JFK, as measured by passengers and, by the end of 2011, our domestic operations at JFK accounted...

  • Page 17
    ... using our New York's JFK gateway with additional focus on Boston's Logan International Airport, Newark, NJ's Newark International Airport, Orlando, FL's Orlando International Airport, Fort Myers, FL's Southwest Florida International Airport, San Juan, Puerto Rico's San Juan International Airport...

  • Page 18
    ... greater number of flights and available seat miles. For the year ended December 31, 2011, our aircraft operated an average of 11.7 hours per day, which we believe is the highest among all major U.S. airlines. Our airport operations allow us to schedule our aircraft with minimum ground time. New and...

  • Page 19
    ... even slight changes in fuel costs, average fare levels and passenger demand. The principal competitive factors in the airline industry are fares, customer service, routes served, flight schedules, types of aircraft, safety record and reputation, code-sharing and interline relationships, capacity, 9

  • Page 20
    .... We use a third party fuel management service to procure most of our fuel. Our historical fuel consumption and costs were as follows for the years ended December 31: 2011 2010 2009 Gallons consumed (millions) ...Total cost (millions) ...Average price per gallon ...Percent of operating expenses...

  • Page 21
    ... supplies voice and data communication services. LiveTV continues to pursue additional customers and related product enhancements. In 2011, JetBlue partnered with ViaSat Inc. to develop in-flight broadband connectivity, which LiveTV will help us to introduce on our aircraft beginning in 2013. LiveTV...

  • Page 22
    ... not to permit domestic flights to remain on the tarmac for more than three hours (the "Tarmac Delay regulations"). The rule became effective in April 2010. Violators can be fined up to a maximum of $27,500 per passenger. The new rule also introduces requirements to disclose on-time performance and...

  • Page 23
    ... noise which can include limits on the number of hourly or daily operations and the time of such operations. These limitations serve to protect the local noise-sensitive communities surrounding the airport. Our scheduled flights at Long Beach and San Diego are in compliance with the noise curfew...

  • Page 24
    ... terms. ITEM 1A. RISK FACTORS Risks Related to JetBlue We operate in an extremely competitive industry. The domestic airline industry is characterized by low profit margins, high fixed costs and significant price competition. We currently compete with other airlines on all of our routes. Many of our...

  • Page 25
    ...debt of $3.14 billion accounted for 64% of our total capitalization. In addition to long-term debt, we have a significant amount of other fixed obligations under leases related to our aircraft, airport terminal space, other airport facilities and office space. As of December 31, 2011, future minimum...

  • Page 26
    ... times over the past few years due to higher fuel prices, the competitive pricing environment and other cost increases, by deferring some of our scheduled deliveries of new aircraft, selling some used aircraft, terminating our leases for some of our aircraft, and leasing aircraft to other operators...

  • Page 27
    ... operating capacity at JFK, would harm our business. We are highly dependent on the New York metropolitan market where we maintain a large presence with approximately one-half of our daily flights having JFK, LaGuardia, Newark, Westchester County Airport or Newburgh's Stewart International Airport...

  • Page 28
    ... organizations that process credit card transactions arising from purchases of air travel tickets by our customers. Credit card processors have financial risk associated with tickets purchased for travel which can occur several weeks after the purchase. Our credit card processing agreements provide...

  • Page 29
    ... new markets we could be subject to additional seasonal variations along with any competitive responses to our entry by other airlines. Price changes in aircraft fuel as well as the timing and amount of maintenance and advertising expenditures also impact our operations. As a result of these factors...

  • Page 30
    ... on our financial condition, liquidity and results of operations, as well as require additional resources to rebuild our reputation and restore the value of our brand. We may be subject to competitive risks due to the long term nature of our fleet order book. At present, we have existing aircraft...

  • Page 31
    ... these measures could have the effect of raising ticket prices, reducing air travel demand and/or revenue and increasing costs. The FAA has published new regulations relating to crew rest requirements, which we are currently analyzing. Should the final rules require us to make significant changes to...

  • Page 32
    ... resulted in several flight diversions by JetBlue and many other domestic and international carriers to Hartford, CT's Bradley International Airport, or Bradley. JetBlue diverted a total of six flights to Bradley, five of which were held on the tarmac in excess of three hours, thus exceeding the...

  • Page 33
    ... 120 Airbus A320 aircraft each powered by two IAE International Aero Engines V2527-A5 engines and 49 EMBRAER 190 aircraft each powered by two General Electric Engines CF-34-10 engines: Aircraft Seating Capacity Owned Capital Leased Operating Leased Total Average Age in Years Airbus A320 ...EMBRAER...

  • Page 34
    ... and the weight of the aircraft. Our primary focus cities include New York's JFK, Boston, Long Beach, Orlando, Fort Lauderdale and San Juan, Puerto Rico. In November 2005, we executed a lease agreement with the PANYNJ for the construction and operation of Terminal 5 which became our principal base...

  • Page 35
    offices in Long Island City, New York, which we plan to take occupancy of in March 2012. Our office in Salt Lake City, Utah, where we occupy space under a lease that expires in 2014, contains a core team of employees who are responsible for group sales, customer service, at-home reservation agent ...

  • Page 36
    ..., age 44, is our Vice President and Chief Accounting Officer, a position he has held since May 2009. He served as our Vice President and Corporate Controller since October 2007. He previously served as our Assistant Controller since July 2006 and Director of Financial Reporting since October 2002...

  • Page 37
    ... ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NASDAQ Global Select Market under the symbol JBLU. The table below shows the high and low sales prices for our common stock. High Low 2010 Quarter Ended March 31 ...June 30 ...September 30 ...December 31 ...2011 Quarter Ended...

  • Page 38
    ... 31, 2011, the NYSE Arca Airline Index consisted of Alaska Air Group Inc., AMR Corporation, Copa Holdings S.A., Delta Air Lines, Inc., Gol Linhas Aereas Inteligentes S.A., Hawaiian Holdings, JetBlue Airways Corporation, US Airways Group, Inc., Lan Airlines S.A., Southwest Airlines Company, Republic...

  • Page 39
    ... consolidated financial statements and related notes thereto included elsewhere in this report. 2011 Year Ended December 31, 2010 2009 2008 (in millions, except per share data) 2007 Statements of Operations Data: Operating revenues ...Operating expenses: Aircraft fuel and related taxes ...Salaries...

  • Page 40
    ... fuel (cents) ...Airline operating expense per ASM (cents) (6) ...Departures ...Average stage length (miles) ...Average number of operating aircraft during period ...Average fuel cost per gallon, including fuel taxes ...Fuel gallons consumed (millions) ...Full-time equivalent employees at period end...

  • Page 41
    ... fuel" represents operating expenses, less aircraft fuel, divided by available seat miles. "Average stage length" represents the average number of miles flown per flight. "Average fuel cost per gallon" represents total aircraft fuel costs, including fuel taxes and effective portion of fuel hedging...

  • Page 42
    ...point routes, operating a young, fuel efficient fleet of 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft. Our core product offers customers the unique JetBlue Experience, which includes more legroom than any other domestic airline's main cabin, free in-flight entertainment, pre-assigned seating...

  • Page 43
    ... allow access for international travelers on many of our key domestic and Caribbean routes, including in New York, Boston, Newark, Orlando, Fort Meyers, San Juan, or Washington DC. Since re-launching our customer loyalty program, TrueBlue, in November 2009, we have seen a 30% increase in membership...

  • Page 44
    ...; and terminating 11 aircraft previously scheduled for delivery in 2017 and 2018. During the second quarter of 2011, we extended the leases on four Airbus A320 aircraft, which were previously set to expire in 2012. We may further modify our fleet growth through additional aircraft sales, leasing of...

  • Page 45
    ..., passenger refreshments, supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes. During 2011 fuel prices remained volatile, increasing 38% over average 2010 prices. We actively manage our fuel hedge portfolio by entering into a variety of fuel hedge contracts in order...

  • Page 46
    ... seat mile increased 0.9% in 2011. In detail, operating costs per available seat mile were (percent changes are based on unrounded numbers): Year Ended December 31, 2011 2010 (in cents) Percent Change Operating expenses: Aircraft fuel and related taxes ...Salaries, wages and benefits ...Landing...

  • Page 47
    ... million. Cost per available seat mile increased 39% primarily due to the increase in fuel prices. Salaries, wages and benefits increased 6%, or $56 million, primarily due to a 5% increase in the average number of full-time equivalent employees needed to support our profitable growth plans as well...

  • Page 48
    ... and benefits related to pilot pay increases implemented in mid-2009, increased sales and marketing expenses due to higher fares and increased GDS participation, and increased maintenance and variable costs. We had on average five additional average aircraft in service in 2010 and operating capacity...

  • Page 49
    per available seat mile increased 6% in 2010. In detail, operating costs per available seat mile were (percent changes are based on unrounded numbers): Year Ended December 31, 2010 2009 (in cents) Percent Change Operating expenses: Aircraft fuel and related taxes ...Salaries, wages and benefits ......

  • Page 50
    ... year of operations at the eight cities opened throughout 2009, and a severe winter storm season in early 2010. We also incurred approximately $13 million in one-time implementation expenses related to our new customer service system, as well as overall higher technology infrastructure related costs...

  • Page 51
    ... fuel (cents) ...Airline operating expense per ASM (cents) (2) ...Departures ...Average stage length (miles) ...Average number of operating aircraft during period ...Average fuel cost per gallon, including fuel taxes ...Fuel gallons consumed (millions) ...Full-time equivalent employees at period end...

  • Page 52
    ...due to the execution of our network strategy, to provide working capital for current and future operations. Investing Activities. During 2011, capital expenditures related to our purchase of flight equipment included $318 million for four Airbus A320 aircraft five EMBRAER 190 aircraft and nine spare...

  • Page 53
    ...operating leases, four were financed under capital leases and all but one of the remaining 105 were financed by secured debt. We are working on securing committed financing for the four EMBRAER 190 aircraft scheduled for delivery in 2012. We may purchase some or all of the seven Airbus A320 aircraft...

  • Page 54
    ... 12 months. Our scheduled debt maturities are expected to increase over the next five years, with a scheduled peak in 2014 of nearly $600 million. We are actively managing our liquidity to overcome these debt hurdles by prepurchasing convertible debt and other outstanding debt when market conditions...

  • Page 55
    ... letters of credit related to certain of our leases which will expire at the end of the related lease terms. Our firm aircraft orders at December 31, 2011 consisted of 21 Airbus A320 aircraft, 30 Airbus A321 aircraft, 40 Airbus A320 neo aircraft and 35 EMBRAER 190 aircraft scheduled for delivery as...

  • Page 56
    ...Audit Committee of our Board of Directors. For a discussion of these and other accounting policies, see Note 1 to our consolidated financial statements. Passenger revenue. Passenger ticket sales are initially deferred in air traffic liability. The air traffic liability also includes customer credits...

  • Page 57
    ... credit usage. Frequent flyer accounting. We utilize a number of estimates in accounting for our TrueBlue customer loyalty program, or TrueBlue. We record a liability, which was $9 and $6 million as of December 31, 2011 and 2010, respectively, for the estimated incremental cost of outstanding points...

  • Page 58
    ...value or changes in technology. As our assets are all relatively new and we continue to have positive operating cash flows, we have not identified any significant impairment related to our long-lived assets at this time. Lease accounting. We operate airport facilities, offices buildings and aircraft...

  • Page 59
    ... financial statements for accounting policies and additional information. Aircraft fuel. Our results of operations are affected by changes in the price and availability of aircraft fuel. To manage the price risk, we use crude or heating oil option contracts or jet fuel swap agreements. Market risk...

  • Page 60
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA JETBLUE AIRWAYS CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except share data) December 31, 2011 2010 ASSETS CURRENT ASSETS Cash and cash equivalents ...Investment securities ...Receivables, less allowance (2011-$8; 2010-$6) ......

  • Page 61
    JETBLUE AIRWAYS CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except share data) December 31, 2011 2010 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable ...Air traffic liability ...Accrued salaries, wages and benefits ...Other accrued liabilities ...Short-term ...

  • Page 62
    JETBLUE AIRWAYS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) Year Ended December 31, 2011 2010 2009 OPERATING REVENUES Passenger ...Other ...Total operating revenues ...OPERATING EXPENSES Aircraft fuel and related taxes ($49, $39, and $34 in 2011, 2010, ...

  • Page 63
    ...millions) Year Ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES Net income ...Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes ...Depreciation ...Amortization ...Stock-based compensation ...Losses (Gains) on sale of flight...

  • Page 64
    ... income (Note 15) ...Total comprehensive income ...Vesting of restricted stock units ...Stock compensation expense ...Stock issued under crewmember stock purchase plan ...Proceeds from secondary offering, net of offering expenses ...Other ...Balance at December 31, 2009 ...Net income ...Changes in...

  • Page 65
    ...31, 2011 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...

  • Page 66
    ... two years are included in long-term investments on our consolidated balance sheets. We did not record any significant gains or losses on these securities during the twelve months ended December 31, 2011, 2010, or 2009. The estimated fair value of these investments approximated their carrying value...

  • Page 67
    ... follows: Estimated Useful Life Residual Value Aircraft ...In-flight entertainment systems ...Aircraft parts ...Flight equipment leasehold improvements ...Ground property and equipment ...Leasehold improvements-other ...Buildings on leased land ... 25 years 5 years Fleet life Lower of lease term or...

  • Page 68
    ... to participating companies, including credit card and car rental companies. These sales are accounted for as multiple-element arrangements, with one element representing the travel that will ultimately be provided when the points are redeemed and the other consisting of marketing related activities...

  • Page 69
    ... to be reported as a financing cash flow. We recorded an insignificant amount in excess tax benefits generated from option exercises in each of 2011, 2010 and 2009. Our policy is to issue new shares for purchases under all of our stock based plans, including our Crewmember Stock Purchase Plan, or...

  • Page 70
    .... Adoption of these new rules had no impact on our consolidated financial statements. Note 2-Long-term Debt, Short-term Borrowings and Capital Lease Obligations Long-term debt and capital lease obligations and the related weighted average interest rate at December 31, 2011 and 2010 consisted of the...

  • Page 71
    ... 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...

  • Page 72
    ... in the escrow account had been used. 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 5.5% Debentures is payable semi-annually on April 15...

  • Page 73
    ... upon our closing stock price, was approximately $7 million. At December 31, 2011, the remaining principal balance was $123 million, which is currently convertible into 27.4 million shares of our common stock. (7) At December 31, 2011 and 2010, four capital leased Airbus A320 aircraft were included...

  • Page 74
    ... as security under various loan agreements. Cash payments for interest related to debt and capital lease obligations, net of capitalized interest, aggregated $136 million, $138 million and $143 million in 2011, 2010 and 2009, respectively. The carrying amounts and estimated fair values of our long...

  • Page 75
    ...new corporate headquarters in Long Island City for a 12 year term. Future minimum lease payments under noncancelable operating leases, including those described above, with initial or remaining terms in excess of one year at December 31, 2011, are as follows (in millions): Aircraft Other Total 2012...

  • Page 76
    ..., in rental income during each of 2011, 2010 and 2009. Future lease payments due to us under these leases are approximately $6 million per year through 2020. Note 4-JFK Terminal 5 In 2008, we began operating out of our new Terminal 5 at JFK, or Terminal 5. The construction and operation of this...

  • Page 77
    ... on future enplanement levels at JFK. Scheduled facility payments representative of interest totaled $28 million, $27 million and $32 million in 2011, 2010 and 2009, respectively. We have subleased a portion of Terminal 5, primarily space for concessionaires. Minimum lease payments due to us are...

  • Page 78
    ... and reporting basic or diluted earnings per share. Note 7-Share-Based Compensation 2011 Incentive Compensation Plan: At our Annual Shareholders Meeting held on May 26, 2011, our shareholders approved the new 2011 Plan, which replaced the 2002 Plan, which was set to expire at the end of 2011. Upon...

  • Page 79
    ... average period of approximately two years. The total fair value of stock options vested during the year was approximately $5 million in 2011 and $9 million in each of the years ended December 31, 2010 and 2009. Amended and Restated 2002 Stock Incentive Plan: The 2002 Plan, which included stock...

  • Page 80
    ... six months and one day following the Director's departure from the Board. During the year ended December 31, 2011, we granted an insignificant amount of deferred stock units, all of which remain outstanding at December 31, 2011. Prior to January 1, 2006, stock options under the 2002 Plan became...

  • Page 81
    ... for the years ended December 31, 2011, 2010 and 2009, respectively. Under the 2002 Plan, the number of shares reserved for issuance automatically increased each January by an amount equal to 4% of the total number of shares of our common stock outstanding on the last trading day in December...

  • Page 82
    ... equity interest of LiveTV. Compensation cost was recorded ratably over the service period. In May 2011, we terminated the EIP. In exchange for the release of their rights under the EIP, participants were granted restricted stock units under the 2002 Plan in May 2011. Note 8-LiveTV Through December...

  • Page 83
    ... at December 31, 2011 include an unrecorded benefit of approximately $9 million related to stock-based compensation that will be recorded in equity when, and to the extent, realized. Section 382 of the Internal Revenue Code imposes limitations on a corporation's ability to use its NOL carryforwards...

  • Page 84
    ... of the Plan is a profit sharing contribution. In 2007, we amended the Plan to provide for a Company discretionary contribution of at least 5% of eligible non-management employee compensation. These contributions vest 100% after three years of service measured from an employee's hire date. Our total...

  • Page 85
    ... borrowing terms relative to our weighted average cost of debt. We are working on securing committed debt financing for the four EMBRAER 190 aircraft scheduled for delivery in 2012. We utilize several credit card processors to process our ticket sales. Our agreements with these processors do...

  • Page 86
    ... customers include other airlines, which may be susceptible to the inherent risks of operating in the airline industry and/or economic downturns, which may in turn have a negative impact on our business. Under certain of our LiveTV third party agreements, as well as our aircraft operating lease...

  • Page 87
    ... for U.S. airline domestic flights. The rules became effective in April 2010, and require U.S. airlines to allow passengers to deplane within three hours on the tarmac, with certain safety and security exceptions. Violators can face fines up to a maximum of $27,500 per passenger. The new rules also...

  • Page 88
    ... target of hedge percentage needs in order to mitigate potential liquidity issues and cap fuel prices, when possible. The following table illustrates the approximate hedged percentages of our projected fuel usage by quarter as of December 31, 2011, related to our outstanding fuel hedging contracts...

  • Page 89
    ... Liability fair value recorded in other long term liabilities (2) ...Estimated amount of existing gains (losses) expected to be reclassified into earnings in the next 12 months ...2011 $ 6 - 10 12 3,540 (6) 20 (10) 2010 $ 19 4 - 24 4,290 3 23 (10) 2009 Fuel derivatives Hedge effectiveness gains...

  • Page 90
    ... value information related to our outstanding debt obligations as of December 31, 2011 and 2010. Level 1 As of December 31, 2011 Level 2 Level 3 Total Assets Cash and cash equivalents ...Restricted cash ...Available-for-sale investment securities ...Aircraft fuel derivatives ...Liabilities Aircraft...

  • Page 91
    ... liabilities measured at fair value on a recurring basis using level 3 inputs (in millions) for the twelve months ended December 31, 2011, 2010 and 2009: Auction Rate Securities Put Option related to ARS Interest Rate Swaps Total Balance as of December 31, 2008 ...Total gains or (losses), realized...

  • Page 92
    ... agreement. The proceeds were used to terminate the outstanding balance on the line of credit with UBS. As a result, we no longer hold any trading securities as of December 31, 2011. Put option related to ARS: We had elected to apply the fair value option under the Financial Instruments topic of the...

  • Page 93
    ... we have included our three destinations in Puerto Rico in our Caribbean allocation of revenues. Operating revenues by geographic regions for the years ended December 31 are summarized below (in millions): 2011 2010 2009 Domestic ...Caribbean ...Total ...83 $3,351 1,153 $4,504 $2,900 879 $3,779...

  • Page 94
    ... the first quarter of 2010, we recorded approximately $16 million in implementation expenses related to our new customer service system implemented in January 2010. During the first quarter of 2010, we recorded $4 million of revenue related to our co-branded credit card agreement guarantee. During...

  • Page 95
    ... Registered Public Accounting Firm The Board of Directors and Stockholders of JetBlue Airways Corporation We have audited the accompanying consolidated balance sheets of JetBlue Airways Corporation as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders...

  • Page 96
    .... We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of JetBlue Airways Corporation as of December 31, 2011 and 2010 and the related consolidated statements of operations, stockholders' equity, and...

  • Page 97
    ...within the time periods specified in the SEC's rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, or...

  • Page 98
    ... within the meaning of Item 406(b) of SEC Regulation S-K. This Code of Ethics applies to our principal executive officer, principal financial officer and principal accounting officer. This Code of Ethics is publicly available on our website at investor.jetblue.com. If we make substantive amendments...

  • Page 99
    ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item will be included in and is incorporated herein by reference from our Proxy statement. 89

  • Page 100
    ... - For the years ended December 31, 2011, 2010 and 2009 Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm Financial Statement Schedule: Report of Independent Registered Public Accounting Firm on Financial Statement Schedule ...Schedule II - Valuation...

  • Page 101
    ... the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JETBLUE AIRWAYS CORPORATION (Registrant) Date: February 28, 2012 By: /s/ DONALD DANIELS Vice President, Controller, and Chief Accounting Officer...

  • Page 102
    Signature Capacity Date /S/ JOEL PETERSON Joel Peterson ANN RHOADES Ann Rhoades FRANK SICA Frank Sica Director February 28, 2012 /S/ Director February 28, 2012 /S/ Director February 28, 2012 92

  • Page 103
    ... ended December 31, 2009. Amended Consolidated Fifth Amended and Restated Bylaws of JetBlue Airways Corporation)- incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated April 11, 2011. Certificate of Designation of Series A Participating Preferred Stock dated April 1, 2002...

  • Page 104
    ... by reference to Exhibit 4.3 to our Annual Report on Form 10-K for the year ended December 31, 2002. Amendment to the Stockholder Rights Agreement, dated as of January 17, 2008, by and between JetBlue Airways Corporation and Computershare Trust Company, N.A.-incorporated by reference to Exhibit...

  • Page 105
    ... Global Markets Inc. and Credit Lyonnais Securities (USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent-incorporated...

  • Page 106
    ..., JetBlue Airways Corporation and Wilmington Trust Company, as Subordination Agent-incorporated by reference to Exhibit 4.24 to our Current Report on Form 8-K dated March 24, 2004. MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated March 24, 2004, bearing Policy Number 43567...

  • Page 107
    ...as of March 24, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in its separate capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent-incorporated by reference to Exhibit 4.28 to our Current Report on Form 8-K dated March 24, 2004. Form of...

  • Page 108
    ...Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent...

  • Page 109
    ... Airways Corporation and Wilmington Trust Company, as Subordination Agent and Trustee-incorporated by reference to Exhibit 4.21 to our Current Report on Form 8-K dated November 9, 2004. MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 15, 2004, bearing Policy Number...

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    ...4.9 to this report, dated as of June 4, 2008, between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee, relating to the Company's 5.5% Convertible Debentures due 2038-incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated June 5, 2008. Pass Through Trust...

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    ... by reference to Exhibit 4.11 to our Current Report on Form 8-K dated December 13, 2007. Amendment No. 1, dated as of January 22, 2008, to the Stock Purchase Agreement, dated as of December 13, 2007, between JetBlue Airways Corporation and Deutsche Lufthansa AG- incorporated by reference to...

  • Page 112
    ... JetBlue Airways Corporation, dated November 22, 2002-incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K for the year ended December 31, 2002. Amendment No. 14 to Airbus A320 Purchase Agreement between AVSA, S.A.R.L. and JetBlue Airways Corporation, dated December 18, 2002...

  • Page 113
    ... JetBlue Airways Corporation, dated December 1, 2006-incorporated by reference to Exhibit 10.22(b) to our Annual Report on Form 10-K for the year ended December 31, 2006. Amendment No. 30 to Airbus A320 Purchase Agreement between AVSA, S.A.R.L., and JetBlue Airways Corporation, dated March 26, 2007...

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    ... and JetBlue Airways Corporation, dated May 23, 2008-incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008. Amendment No. 33 to Airbus A320 Purchase Agreement between AVSA, S.A.R.L. and JetBlue Airways Corporation, dated July 1, 2009...

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    ... by reference to Exhibit 10.3(n) to our Annual Report on Form 10-K, as amended, for the year ended December 31, 2007. Side Letter No. 24 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated April 2, 2008-incorporated by reference to Exhibit 10.2 to...

  • Page 116
    ...File No. 333-82576). JetBlue Airways Corporation 401(k) Retirement Plan, amended and restated as of January 1, 2009-incorporated by reference to Exhibit 10.14 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. Form of Director/Officer Indemnification Agreement-incorporated by...

  • Page 117
    ... to Exhibit 10.17(g) to our Annual Report on Form 10-K for the year ended December 31, 2009. Amendment No. 8 to Purchase Agreement DCT-025/2003, dated as of March 11, 2010, between Embraer-Empresa Brasileira de Aeronautica S.A. and JetBlue Airways Corporation- incorporated by reference to Exhibit 10...

  • Page 118
    ... 2002 Stock Incentive Plan, dated November 7, 2007, and form of award agreement-incorporated by reference to Exhibit 10.21 to the Annual Report for Form 10-K for the year ended December 31, 2008. JetBlue Airways Corporation Executive Change in Control Severance Plan, dated as of June 28, 2007...

  • Page 119
    ..., 2010. Amendment and General Release, dated November 10, 2009, between JetBlue Airways Corporation and Russell Chew-incorporated by reference to Exhibit 10.31 (on Edgar) to our Annual Report on Form 10-K for the year ended December 31, 2009. Share Lending Agreement, dated as of May 29, 2008 between...

  • Page 120
    ... * ** Compensatory plans in which the directors and executive officers of JetBlue participate. Pursuant to a Confidential Treatment Request under Rule 24b-2 filed with and approved by the SEC, portions of this exhibit have been omitted. *** XBRL (eXtensible Business Reporting Language) information...

  • Page 121
    ... material respects to the document filed as Exhibit 4.14 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to an above-cap liquidity facility provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O) have been entered into with respect to the...

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    Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of JetBlue Airways Corporation We have audited the consolidated financial statements of JetBlue Airways Corporation as of December 31, 2011 and 2010, and for each of the three years in the period ended ...

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    JetBlue Airways Corporation Schedule II-Valuation and Qualifying Accounts (in thousands) Balance at beginning of period Additions Charged to Charged to Costs and Other Expenses Accounts Balance at end of period Description Deductions Year Ended December 31, 2011 Allowances deducted from asset ...

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    Exhibit 12.1 JETBLUE AIRWAYS CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions, except ratios) 2011 Year Ended December 31, 2010 2009 2008 2007 Earnings: Income (loss) before income taxes ...Less: capitalized interest ...Add: Fixed charges ...Amortization of capitalized ...

  • Page 126
    ... 21.1 JETBLUE AIRWAYS CORPORATION LIST OF SUBSIDIARIES As of December 31, 2011 LiveTV, LLC (Delaware limited liability company) LiveTV International, Inc. (Delaware corporation) BlueBermuda Insurance, LTD (Bermuda corporation) LiveTV Airfone LLC. (Delaware limited liability company) JetBlue Airways...

  • Page 127
    ... control over financial reporting of JetBlue Airways Corporation and the financial statement schedule of JetBlue Airways Corporation listed in Item 15(2) included in this Annual Report (Form 10-K) for the year ended December 31, 2011. /s/ Ernst & Young LLP New York, New York February 28, 2012

  • Page 128
    ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b) Dated: February 28, 2012 /s/ DAVID BARGER David Barger Chief Executive Officer

  • Page 129
    ...-14(a)/15d-14(a) Certification of the Chief Financial Officer I, Mark D. Powers, certify that: 1. I have reviewed this Annual Report on Form 10-K of JetBlue Airways Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material...

  • Page 130
    Exhibit 32 JETBLUE AIRWAYS CORPORATION SECTION 1350 CERTIFICATIONS In connection with the Annual Report on Form 10-K of JetBlue Airways Corporation for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on February 28, 2012 (the "Report"), the undersigned, in the ...

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