JetBlue Airlines 2011 Annual Report Download - page 74

Aircraft, engines, and other equipment and facilities having a net book value of $3.71 billion at
December 31, 2011 were pledged 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-term debt at December 31, 2011 and 2010 were
as follows (in millions):
December 31, 2011 December 31, 2010
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Public Debt
Floating rate enhanced equipment notes
Class G-1, due 2013, 2014, and 2016 ............ $ 202 $ 185 $ 234 $ 210
Class G-2, due 2014 and 2016 ................. 373 316 373 312
Class B-1, due 2014 ......................... 49 47 49 46
Fixed rate special facility bonds, due through 2036 . . . 83 76 84 75
6.75% convertible debentures due in 2039 .......... 162 214 201 293
5.5% convertible debentures due in 2038 ........... 123 162 123 194
Non-Public Debt
Floating rate equipment notes, due through 2025 .... 743 712 696 654
Fixed rate equipment notes, due through 2026 ....... 1,192 1,293 1,144 1,132
Total ....................................... $2,927 $3,005 $2,904 $2,916
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.
Short-term Borrowings
In September 2011, we entered into a corporate purchasing line with American Express, which allows us to
borrow up to a maximum of $125 million. Borrowings cannot exceed $30 million per week and may only be
used for the purchase of jet fuel. Borrowings on this corporate purchasing line are subject to our compliance with
the terms and conditions of the credit agreement, including certain financial covenants which include a
requirement to maintain certain cash and short term investment levels and a minimum earnings before income
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