JetBlue Airlines 2012 Annual Report Download - page 60

JETBLUE AIRWAYS CORPORATION-2012 10K56
PART II
ITEM 8Financial Statements and Supplementary Data
The following is a summary of CSPP share reserve activity under the 2011 Crewmember Stock Purchase Plan for the year ended December31:
2012
Shares Weighted Average Price
Available for future purchases, beginning of year 8,000,000
Shares reserved for issuance —
Common stock purchased (1,563,776) $ 4.75
AVAILABLE FOR FUTURE PURCHASES, END OF YEAR 6,436,224
Our original CSPP, which was available to all employees, had 5.1 million
shares of our common stock initially reserved for issuance at its inception
in April 2002. Through 2008, the reserve automatically increased each
January by an amount equal to 3% of the total number of shares of our
common stock outstanding on the last trading day in December of the
prior calendar year. The CSPP was amended in 2008 to eliminate this
automatic reload.
The 2011 CSPP, as did the original CSPP, has a series of successive
overlapping six months offering periods, with a new offering period beginning
on the fi rst business day of May and November each year. Employees can
only join an offering period on the start date. Employees may contribute
up to 10% of their pay, through payroll deductions, toward the purchase
of common stock. Purchase dates occur on the last business day of April
and October each year.
CSPP participation is considered non-compensatory as the purchase price discount is only 5% based upon the stock price on the date of purchase.
Should we be acquired by merger or sale of substantially all of our assets or sale of more than 50% of our outstanding voting securities, then all
outstanding purchase rights will automatically be exercised immediately prior to the effective date of the acquisition at a price equal to 95% of the fair
market value per share immediately prior to the acquisition.
The following is a summary of CSPP share reserve activity under the original CSPP for the years ended December31, 2011 and 2010. There was no
activity in 2012 under the original CSPP and the shares remain reserved at December 31, 2012.
2011 2010
Shares Weighted Average Price Shares Weighted Average Price
Available for future purchases, beginning of year 20,923,959 22,169,558
Shares reserved for issuance — —
Common stock purchased (1,617,602) $ 4.76 (1,245,599) $ 5.96
AVAILABLE FOR FUTURE PURCHASES, END OF YEAR 19,306,357 20,923,959
The Compensation-Stock Compensation topic of the Codifi cation requires
that deferred taxes be recognized on temporary differences that arise with
respect to stock-based compensation attributable to nonqualifi ed stock
options and awards. However, no tax benefi t is recognized for stock-based
compensation attributable to incentive stock options (ISO) or CSPP shares
until there is a disqualifying disposition, if any, for income tax purposes.
A portion of our stock-based compensation is attributable to ISO and
CSPP shares; therefore, our effective tax rate is subject to fl uctuation.
LiveTV Equity Incentive Plan. In April 2009, our Board of Directors
approved the LiveTV Equity Incentive Plan, or EIP, an equity based incentive
plan for certain members of leadership at our wholly-owned subsidiary,
LiveTV. Notional equity units were available under the EIP, representing up
to 12% of the notional 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31, 2012, LiveTV had installed in-fl ight entertainment
systems for other airlines on 439 aircraft and had fi rm commitments for
installations of in-fl ight entertainment and Ka broadband connectivity on 219
additional aircraft scheduled to be installed through 2015, with options for
52 additional in-fl ight entertainment installations through 2014. Revenues
in 2012, 2011 and 2010 were $81 million, $82 million and $72 million,
respectively. Deferred profi t on hardware sales and advance deposits
for future hardware sales are included in other accrued liabilities and
other long term liabilities on our consolidated balance sheets depending
on whether we expect to recognize it in the next 12 months or beyond
and was a total of $34 million and $54 million at December31, 2012
and 2011, respectively. Deferred profi t to be recognized on installations
completed through December31, 2012 will be approximately $4 million
in 2013, $3 million per year from 2014 through 2017 and $7 million
thereafter. The net book value of equipment installed for other airlines was
approximately $109million and $111 million as of December31, 2012 and
2011, respectively, and is included in other assets on our consolidated
balance sheets.
In December 2011, LiveTV terminated its contract with one of its other
airline customers, which had in-fl ight entertainment systems installed
on 140aircraft at the time of termination, which are excluded from the
totals above. In connection with the termination, the customer paid
approximately $16 million, which was included in other accrued liabilities
on the consolidated balance sheet as of December31, 2011. Upon fulfi lling
our obligation to deactivate service on the installed aircraft, we recorded
a gain of $8 million in other operating expenses during the fi rst quarter of
2012 related to the termination of this contract.