JetBlue Airlines 2009 Annual Report Download - page 61

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Upon launch of the improved TrueBlue program, we extended our co-branded credit card agreement. In
connection with this extension, we received a one-time payment of $37 million, which we have deferred and
will recognize over the term of the agreement.
Income Taxes: We account for income taxes utilizing the liability method. Deferred income taxes are
recognized for the tax consequences of temporary differences between the tax and financial statement
reporting bases of assets and liabilities. A valuation allowance for net deferred tax assets is provided unless
realizability is judged by us to be more likely than not. Our policy is to recognize interest and penalties
accrued on any unrecognized tax benefits as a component of income tax expense.
Share-Based Compensation: We record compensation expense in the financial statements for share-
based awards based on the grant date fair value of those awards. Share-based compensation expense includes
an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a
straight-line basis, which is generally commensurate with the vesting term.
Under the Compensation-Stock Compensation topic of the Codification, ASC 718-740, the benefits
associated with tax deductions in excess of recognized compensation cost are required to be reported as a
financing cash flow. We recorded an insignificant amount in excess tax benefits generated from option
exercises in 2009. We recorded $1 million in 2008 and did not record any in 2007 in excess tax benefits
generated from option exercises.
Our policy is to issue new shares for purchases under our Crewmember Stock Purchase Plan, or CSPP,
and issuances under our Amended and Restated 2002 Stock Incentive Plan, or 2002 Plan.
New Accounting Standards: In April 2009, the FASB issued an update to ASC 820, Fair Value
Measurements and Disclosures, to provide additional guidance on estimating fair value when the volume and
level of transaction activity for an asset or liability have significantly decreased in relation to normal market
activity for the asset or liability. Additional disclosures are required regarding fair value in interim and annual
reports. These provisions are effective for interim and annual periods ending after June 15, 2009. We have
included these additional disclosures in Note 14.
In May 2009, the FASB issued ASC 855, Subsequent Events, which provides guidance on events that
occur after the balance sheet date but prior to the issuance of the financial statements. ASC 855 distinguishes
events requiring recognition in the financial statements and those that may require disclosure in the financial
statements. Furthermore, ASC 855 requires disclosure of the date through which subsequent events were
evaluated. These requirements are effective for interim and annual periods after June 15, 2009. We adopted
these requirements for the quarter ended June 30, 2009, and have evaluated subsequent events through
February 5, 2010.
In June 2009, the FASB issued an update of ASC 105, Generally Accepted Accounting Principles,
changing the accounting for securitizations and special-purpose entities. ASC 105 enhances disclosure
requirements related to the transfers of financial assets, including securitization transactions, and the
continuing risk exposures related to transferred financial assets. The concept of a “qualifying special-purpose
entity” is eliminated and the requirements for derecognizing financial assets have been modified. ASC 105
modifies the criteria which determine whether an entity should be consolidated. ASC 105 enhances the
disclosure requirements related to an entity’s involvement with variable interest entities and any changes to the
related risk exposure. ASC 105 will be effective for fiscal years beginning after November 15, 2009. We are
currently evaluating the impact the adoption of these standards will have on our financial statements and
related disclosures.
In June 2009, the FASB issued an update of ASC 105, Generally accepted accounting principles, which
establishes the FASB Accounting Standards Codification
TM
, or Codification, which supersedes all existing
accounting standard documents and has become the single source of authoritative non-governmental
U.S. GAAP. All other accounting literature not included in the Codification is considered non-authoritative.
We have conformed our financial statements and related Notes to the new Codification.
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