JetBlue Airlines 2009 Annual Report Download - page 68

The carrying amounts and estimated fair values of our long-term debt at December 31, 2009 were as
follows (in millions):
Carrying
Value
Estimated
Fair Value
Public Debt
Floating rate enhanced equipment notes
Class G-1, due through 2016.................................. $ 265 $ 205
Class G-2, due 2014 and 2016 ................................ 373 261
Class B-1, due 2014 . . . ..................................... 49 35
Fixed rate special facility bonds, due through 2036 ................... 85 70
6.75% convertible debentures due in 2039.......................... 201 250
3.75% convertible debentures due in 2035.......................... 154 156
5.5% convertible debentures due in 2038 .......................... 123 166
3.5% convertible notes due in 2033 .............................. 1 1
Non-Public Debt
Floating rate equipment notes, due through 2020 ..................... 697 592
Fixed rate equipment notes, due through 2024....................... 1,163 985
Total ....................................................... $3,111 $2,721
The estimated fair values of our publicly held long-term debt were based on quoted market prices or
other observable market inputs when instruments are not actively traded. The fair value of our non-public debt
was estimated using discounted cash flow analysis based on our borrowing rates for instruments with similar
terms. The fair values of our other financial instruments approximate their carrying values.
We utilize a policy provider to provide credit support on the Class G-1 and Class G-2 certificates. The
policy provider has unconditionally guaranteed the payment of interest on the certificates when due and the
payment of principal on the certificates no later than 18 months after the final expected regular distribution
date. The policy provider is MBIA Insurance Corporation (a subsidiary of MBIA, Inc.).
We have determined that each of the trusts related to our aircraft EETCs meet the definition of a variable
interest entity as defined in ASC 810, Consolidations. We evaluated the purpose for which these trusts were
established and nature of risks in each. These trusts were not designed to pass along variability to us. We
concluded that we are not the primary beneficiary in these trusts due to our involvement in them being limited
to principal and interest payments on the related notes and the variability created by credit risk related to us
and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our
financial statements.
Note 3—Operating Leases
We lease aircraft, as well as airport terminal space, other airport facilities, office space and other
equipment, which expire in various years through 2035. In July 2009, we extended the lease on two of our
aircraft, one of which was previously scheduled to expire in December 2009 and the other in March 2010.
These extensions resulted in an additional $11 million of lease commitments through 2012. Total rental
expense for all operating leases in 2009, 2008 and 2007 was $236 million, $243 million and $225 million,
respectively. We have $29 million in assets that serve as collateral for letters of credit related to certain of our
leases, which are included in restricted cash.
At December 31, 2009, 55 of the 151 aircraft we operated were leased under operating leases, with
remaining lease term expiration dates ranging from 2011 to 2026. Five of the 55 aircraft operating leases have
variable rate rent payments based on LIBOR. Leases for 47 of our aircraft can generally be renewed at rates
based on fair market value at the end of the lease term for one or two years. We have purchase options in 45
of our aircraft leases at the end of the lease term at fair market value and a one-time option during the term at
amounts that are expected to approximate fair market value. During 2008, we entered into a sale and
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