JetBlue Airlines 2011 Annual Report Download - page 25

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We have a significant amount of fixed obligations and we will incur significantly more fixed obligations,
which could harm our ability to service our current or future fixed obligations.
As of December 31, 2011, our 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 payments under noncancelable leases and other financing obligations were approximately $1.03 billion
for 2012 through 2016 and an aggregate of $1.44 billion for the years thereafter. We have also constructed, and
in October 2008 began operating, a new terminal at JFK under a 30-year lease with the Port Authority of New
York and New Jersey, or PANYNJ. The minimum payments under this lease are being accounted for as a
financing obligation and have been included in the future minimum payment totals above.
As of December 31, 2011, we had commitments of approximately $5.96 billion to purchase 126 additional
aircraft and other flight equipment through 2021, including estimated amounts for contractual price escalations.
We will incur additional debt and other fixed obligations as we take delivery of new aircraft and other equipment
and continue to expand into new markets. In an effort to limit the incurrence of significant additional debt, we
may seek to defer some of our scheduled deliveries, sell or lease aircraft to others, or pay cash for new aircraft, to
the extent necessary or possible. The amount of our existing debt, and other fixed obligations, and potential
increases in the amount of our debt and other fixed obligations could have important consequences to investors
and could require a substantial portion of cash flows from operations for debt service payments, thereby reducing
the availability of our cash flow to fund working capital, capital expenditures and other general corporate
purposes.
Our high level of debt and other fixed obligations could:
• impact our ability to obtain additional financing to support capital expansion plans and for working
capital and other purposes on acceptable terms or at all;
• divert substantial cash flow from our operations and expansion plans in order to service our fixed
obligations;
• require us to incur significantly more interest expense than we currently do if rates were to increase, since
a large portion of our debt has floating interest rates; and
• place us at a possible competitive disadvantage compared to less leveraged competitors and competitors
that have better access to capital resources or more favorable terms.
Our ability to make scheduled payments on our debt and other fixed obligations will depend on our future
operating performance and cash flows, which in turn will depend on prevailing economic and political conditions
and financial, competitive, regulatory, business and other factors, many of which are beyond our control. We are
principally dependent upon our operating cash flows and access to the capital markets to fund our operations and
to make scheduled payments on debt and other fixed obligations. We cannot assure you that we will be able to
generate sufficient cash flows from our operations or from capital market activities to pay our debt and other
fixed obligations as they become due; if we fail to do so our business could be harmed. If we are unable to make
payments on our debt and other fixed obligations, we could be forced to renegotiate those obligations or seek to
obtain additional equity or other forms of additional financing.
Our substantial indebtedness may limit our ability to incur additional debt to obtain future financing needs.
We typically finance our aircraft through either secured debt or lease financing. The impact on financial
institutions from the global credit and liquidity crisis may adversely affect the availability and cost of credit to
JetBlue as well as to prospective purchasers of our aircraft that we undertake to sell in the future, including
financing commitments that we have already obtained for purchases of new aircraft. To the extent we finance our
activities with additional debt, we may become subject to financial and other covenants that may restrict our
ability to pursue our strategy or otherwise constrain our operations.
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