JetBlue Airlines 2011 Annual Report Download - page 89

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The financial derivative instrument agreements we have with our counterparties may require us to fund all,
or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities. The
amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts. Our
policy is to offset the liabilities represented by these contracts with any cash collateral paid to the counterparties.
We did not have any collateral posted related to our outstanding fuel hedge contracts at December 31, 2011 or
December 31, 2010. We had $20 million and $30 million posted in collateral related to our interest rate
derivatives which offset the hedge liability in other current liabilities at December 31, 2011 and 2010,
respectively.
The table below reflects quantitative information related to our derivative instruments and where these
amounts are recorded in our financial statements. All of our outstanding contracts at December 31, 2011 were
designated as cash flow hedges (dollar amounts in millions).
As of December 31,
2011 2010
Fuel derivatives
Asset fair value recorded in prepaid expenses and other (1) ................ $ 6 $ 19
Asset fair value recorded in other long term assets (1) ..................... — 4
Liability fair value recorded in other accrued liabilities (1) ................. 10 —
Longest remaining term (months) ..................................... 12 24
Hedged volume (barrels, in thousands) ................................. 3,540 4,290
Estimated amount of existing gains (losses) expected to be reclassified into
earnings in the next 12 months ..................................... (6) 3
Interest rate derivatives
Liability fair value recorded in other long term liabilities (2) ............... 20 23
Estimated amount of existing gains (losses) expected to be reclassified into
earnings in the next 12 months ..................................... (10) (10)
2011 2010 2009
Fuel derivatives
Hedge effectiveness gains (losses) recognized in aircraft fuel
expense ................................................. $ 3 $ (3) $(120)
Hedge ineffectiveness gains (losses) recognized in other income
(expense) ............................................... (2) (2) 1
Gains (losses) of derivatives not qualifying for hedge accounting
recognized in other income (expense) ......................... — — (1)
Hedge gains (losses) of derivatives recognized in comprehensive
income, (see Note 15) ..................................... (11) (11) 17
Percentage of actual consumption economically hedged ............ 40% 51% 23%
Interest rate derivatives
Hedge gains (losses) of derivatives recognized in comprehensive
income, (see Note 15) ..................................... (7) (21) (5)
Hedge gains (losses) of derivatives recognized in interest expense .... (10) (8) (5)
(1) Gross asset or liability of each contract prior to consideration of offsetting positions with each counterparty
(2) Gross liability, prior to impact of collateral posted
79