JetBlue Airlines 2012 Annual Report Download - page 57

JETBLUE AIRWAYS CORPORATION-2012 10K 53
PART II
ITEM 8Financial Statements and Supplementary Data
Through December31, 2012, total costs incurred for the elements
of the Project which are subject to the underlying ground lease were
$637 million, $561 million of which is refl ected as Assets Constructed for
Others and $76 million of which are leasehold improvements included
in ground property and equipment in our consolidated balance sheets.
These amounts refl ect a non-cash $133 million reduction in 2008 for
costs incurred for the elements that were not subject to the underlying
ground lease. Assets Constructed for Others are being amortized over the
shorter of the 25 year non-cancelable lease term or their economic life.
We recorded $23 million in amortization expense in 2012, and $22 million
in each of 2011 and 2010.
The PANYNJ has reimbursed us for the amounts currently included in Assets
Constructed for Others, exclusive of capitalized interest of $68 million. These
reimbursements and the capitalized interest are refl ected as Construction
Obligation in our consolidated balance sheets. As facility rents are paid,
they are treated as debt service on the Construction Obligation, with the
portion not relating to interest reducing the principal balance. Minimum
estimated facility payments, including escalations, associated with the
facility lease are estimated to be $40 million in each of 2013 through 2017
and $656 million thereafter. The portion of these scheduled payments
serving to reduce the principal balance of the Construction Obligation is
$13 million in 2013, $14 million in 2014, $15 million in each of 2015 and
2016 and $16 million in 2017. Payments could exceed these amounts
depending on future enplanement levels at JFK. Scheduled facility payments
representative of interest totaled $27 million, $28 million and $27 million
in 2012, 2011 and 2010, respectively.
We have subleased a portion of Terminal 5, primarily space for
concessionaires as well as to Hawaiian Airlines, who beginning in 2012
began operating out of Terminal 5. Minimum lease payments due to us
are subject to various escalation amounts through 2019 and also include
a percentage of gross receipts, which may vary from month to month.
Future minimum lease payments due to us during each of the next fi ve
years are estimated to be $11 million per year in each of 2013 through
2016, and $8 million in 2017.
NOTE 5 Stockholders’ Equity
In September 2012, our Board of Directors authorized a share repurchase
program for up to 25 million shares of common stock over a fi ve year period.
The repurchases may be commenced or suspended from time to time
without prior notice. During the fourth quarter of 2012, we repurchased
approximately 4.1 million shares of our common stock for approximately
$23 million. The shares repurchased under our share repurchase program
were purchased in open market transactions.
Pursuant to our amended Stockholder Rights Agreement, which became
effective in February 2002, each share of common stock has attached
to it a right and, until the rights expire or are redeemed, each new share
of common stock issued by the Company will include one right. Upon
the occurrence of certain events described below, each right entitles the
holder to purchase one one thousandth of a share of Series A participating
preferred stock at an exercise price of $35.55, subject to further adjustment.
The rights become exercisable only after any person or group acquires
benefi cial ownership of 15% or more (25% or more in the case of certain
specifi ed stockholders) of the Company’s outstanding common stock or
commences a tender or exchange offer that would result in such person
or group acquiring benefi cial ownership of 15% or more (25% or more
in the case of certain stockholders) of the Company’s common stock. If
after the rights become exercisable, the Company is involved in a merger
or other business combination or sells more than 50% of its assets or
earning power, each right will entitle its holder (other than the acquiring
person or group) to receive common stock of the acquiring company
having a market value of twice the exercise price of the rights. The rights
expired on April17, 2012.
As of December31, 2012, we had a total of 187.6 million shares of our
common stock reserved for issuance related to our 2011 Plan, our 2002
Plan, our 2011 CSPP, our original CSPP, our convertible debt, and our share
lending facility. As of December31, 2012, we had a total of 49.6 million
shares of treasury stock, the majority of which resulted from the return of
borrowed shares under our share lending agreement and also includes
shares repurchased under our share repurchase program described above.
Refer to Note 2 for further details on the share lending agreement and
Note 7 for further details on our share-based compensation.
NOTE 6 Earnings Per Share
The following table shows how we computed basic and diluted earnings per common share for the years ended December 31 (dollars in millions; share
data in thousands):
2012 2011 2010
Numerator:
Net income $ 128 $ 86 $ 97
Effect of dilutive securities:
Interest on convertible debt, net of income taxes and discretionary profi t sharing 9 12 11
Net income applicable to common stockholders after assumed conversion for diluted
earnings per share $ 137 $ 98 $ 108
Denominator:
Weighted-average shares outstanding for basic earnings per share 282,317 278,689 275,364
Effect of dilutive securities:
Employee stock options 1,237 1,660 2,611
Convertible debt 60,575 66,118 68,605
Adjusted weighted-average shares outstanding and assumed conversions for diluted
earnings per share 344,129 346,467 346,580
Shares excluded from EPS calculation (in millions):
Shares issuable upon conversion of our convertible debt since assumed conversion would
be antidilutive — — —
Shares issuable upon exercise of outstanding stock options since assumed exercise
would be antidilutive 19.5 22.3 24.0