JetBlue Airlines 2009 Annual Report Download - page 46

$160 million of debt and capital lease obligations, (6) the repurchase of $20 million principal amount of
3.75% convertible debentures due 2035 for $20 million, and (7) the reimbursement of construction costs
incurred for Terminal 5 of $49 million.
Financing activities during 2008 consisted primarily of (1) the issuance of approximately 42.6 million
shares of common stock to Deutsche Lufthansa AG for approximately $300 million, net of transaction costs,
(2) our public offering of $201 million aggregate principal amount of 5.5% convertible debentures due 2038,
raising net proceeds of approximately $165 million after depositing $32 million in separate interest escrow
accounts for these securities and issuance costs, (3) our issuance of $340 million in fixed rate equipment notes
to various financial institutions secured by 11 aircraft, (4) our issuance of $181 million in floating rate
equipment notes to various financial institutions secured by six aircraft, (5) proceeds of two lines of credit
totaling $163 million collateralized by our ARS, (6) reimbursement of construction costs incurred for our new
terminal at JFK of $138 million, (7) the financing of four spare engine purchases of $26 million, (8) the sale
and leaseback over 18 years of one aircraft for $26 million by a U.S leasing institution, (9) scheduled
maturities of $404 million of debt, including the repayment of $174 million principal amount of 3.5%
convertible debt issued in 2003, (10) the repayment of $209 million of debt in connection with the sale of nine
aircraft, and (11) the repurchase of $73 million principal amount of 3.75% convertible debentures due 2035
for $55 million.
In October 2009, we filed an automatic shelf registration statement with the SEC relating to our sale,
from time to time, in one or more public offerings of debt securities, pass-through certificates, common stock,
preferred stock and/or other securities. The net proceeds of any securities we sell under this registration
statement may be used to fund working capital and capital expenditures, including the purchase of aircraft and
construction of facilities on or near airports. Through December 31, 2009, we had not issued any securities
under this registration statement. At this time, we have no plans to sell securities under this registration
statement and our ability to do so at this time may be limited.
None of our lenders or lessors are affiliated with us.
Capital Resources. We have been able to generate sufficient funds from operations to meet our working
capital requirements. Other than one line of credit, which is secured by ARS held by us, and our short-term
aircraft predelivery deposit facility, substantially all of our property and equipment is encumbered. We
typically finance our aircraft through either secured debt or lease financing. At December 31, 2009, we
operated a fleet of 151 aircraft, of which 55 were financed under operating leases, four were financed under
capital leases and all but one of the remaining 92 were financed by secured debt. We have received committed
financing for the four aircraft scheduled for delivery in 2010. Although we believe that debt and/or lease
financing should be available for our remaining aircraft deliveries, we cannot assure you that we will be able
to secure financing on terms attractive to us, if at all. While these financings may or may not result in an
increase in liabilities on our balance sheet, our fixed costs will increase significantly regardless of the
financing method ultimately chosen. To the extent we cannot secure financing, we may be required to further
modify our aircraft acquisition plans or incur higher than anticipated financing costs.
Working Capital. We had working capital of $369 million at December 31, 2009, compared to a
working capital deficit of $119 million at December 31, 2008. Our working capital includes the fair value of
our short term fuel hedge derivatives, which was an asset of $25 million at December 31, 2009 and a liability
of $128 million at December 31, 2008. We had reduced our December 31, 2008 liability associated with these
instruments by posting $138 million in cash collateral with our counterparties. Also contributing to our
working capital is the classification of our $85 million of ARS as short-term assets at December 31, 2009. All
of our ARS held at December 31, 2008 were classified as long term.
At December 31, 2008, we had $244 million invested in ARS, which were included in long-term
investments. Beginning in February 2008, all of the ARS then held by us experienced failed auctions which
resulted in us continuing to hold these securities beyond the initial auction reset periods. All of our ARS are
collateralized by student loan portfolios (substantially all of which are guaranteed by the United States
Government). Despite the quality of the underlying collateral, the market for ARS and other securities has
been diminished due to the lack of liquidity experienced in the market since early 2008 and expected to be
experienced into the future.
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