JetBlue Airlines 2009 Annual Report Download - page 47

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During 2008, various regulatory agencies began investigating the sales and marketing activities of the
banks and broker-dealers that sold ARS, alleging violations of federal and state laws in connection with these
activities. One of the two broker-dealers from which we purchased ARS announced settlements under which
they will repurchase the ARS at par at a future date. As a result of our participation in this settlement
agreement, UBS is required to repurchase our ARS brokered by them beginning in June 2010. In October
2009, we entered into an agreement with Citigroup, whereby they repurchased all our outstanding ARS issued
by them for approximately $120 million.
We expect to meet our obligations as they become due through available cash, investment securities and
internally generated funds, supplemented as necessary by financing activities, as they may be available to us.
We expect to continue to generate positive working capital through our operations. However, we cannot
predict what the effect on our business might be from the extremely competitive environment we are operating
in or from events that are beyond our control, such as the volatile fuel prices, the current economic recession
and global credit and liquidity crisis, weather-related disruptions, the impact of airline bankruptcies or
consolidations, U.S. military actions or acts of terrorism. We believe the working capital available to us will
be sufficient to meet our cash requirements for at least the next 12 months.
Contractual Obligations
Our noncancelable contractual obligations at December 31, 2009 include (in millions):
Total 2010 2011 2012 2013 2014 Thereafter
Payments due in
Long-term debt and capital lease
obligations (1) .................... $ 4,150 $ 514 $ 295 $ 289 $ 480 $ 682 $1,890
Lease commitments .................. 1,796 208 191 168 140 142 947
Flight equipment obligations ........... 4,500 235 575 790 790 735 1,375
Short-term borrowings ................ — — — — — — —
Financing obligations and other (2) ...... 3,784 202 189 231 243 252 2,667
Total ............................. $14,230 $1,159 $1,250 $1,478 $1,653 $1,811 $6,879
(1) Includes actual interest and estimated interest for floating-rate debt based on December 31, 2009 rates.
(2) Amounts include noncancelable commitments for the purchase of goods and services.
The interest rates are fixed for $1.85 billion of our debt and capital lease obligations, with the remaining
$1.45 billion having floating interest rates. The floating interest rates adjust quarterly or semi-annually based
on the London Interbank Offered Rate, or LIBOR. The weighted average maturity of all of our debt was
8 years at December 31, 2009. We are not subject to any financial covenants in any of our debt obligations.
Our spare parts pass-through certificates issued in November 2006 require us to maintain certain non-financial
collateral coverage ratios, which could require us to provide additional spare parts collateral or redeem some
or all of the related equipment notes. At December 31, 2009, we were in compliance with all covenants of our
debt and lease agreements and 78% of our owned property and equipment was collateralized.
We have operating lease obligations for 55 aircraft with lease terms that expire between 2011 and 2026.
Five of these leases have variable-rate rent payments that adjust semi-annually based on LIBOR. We also lease
airport terminal space and other airport facilities in each of our markets, as well as office space and other
equipment. We have approximately $29 million of restricted assets pledged under standby letters of credit
related to certain of our leases which will expire at the end of the related lease terms.
Including the effects of the 2009 amendments to our Airbus and EMBRAER purchase agreements, our
firm aircraft orders at December 31, 2009 consisted of 55 Airbus A320 aircraft and 60 EMBRAER 190
aircraft scheduled for delivery as follows: 4 in 2010, 13 in 2011, 19 in 2012, 20 in 2013, 19 in 2014, 16 in
2015, 8 in 2016, 8 in 2017, and 8 in 2018. We have the right to cancel five firm EMBRAER 190 deliveries in
2012 or later, provided no more than two deliveries are canceled in any one year. In February 2010, we further
amended our Airbus A320 purchase agreement, deferring six aircraft previously scheduled for delivery in 2011
and 2012 to 2015, the effects of which are not reflected above. We meet our predelivery deposit requirements
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