JetBlue Airlines 2009 Annual Report Download - page 69

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leaseback transaction for one EMBRAER 190 aircraft acquired during the year, which is being accounted for
as an operating lease. There were no material deferred gains recorded related to this transaction.
Future minimum lease payments under noncancelable operating leases with initial or remaining terms in
excess of one year at December 31, 2009, are as follows (in millions):
Aircraft Other Total
2010............................................ $ 160 $ 48 $ 208
2011............................................ 148 43 191
2012............................................ 129 39 168
2013............................................ 107 33 140
2014............................................ 116 26 142
Thereafter ........................................ 589 358 947
Total minimum operating lease payments................. $1,249 $547 $1,796
We have entered into sale-leaseback arrangements with a third party lender for 45 of our operating
aircraft. The sale-leasebacks occurred simultaneously with the delivery of the related aircraft to us from their
manufacturers. Each sale-leaseback transaction was structured with a separate trust set up by the third party
lender, the assets of which consist of the one aircraft initially transferred to it following the sale by us and the
subsequent lease arrangement with us. Because of their limited capitalization and the potential need for
additional financial support, these trusts are variable interest entities as defined in ASC 810, Consolidations.
JetBlue does not retain any equity interests in any of these trusts and our obligations to them are limited to the
fixed rental payments we are required to make to them, which were approximately $1.15 billion as of
December 31, 2009 and are reflected in the future minimum lease payments in the table above. Our only
interest in these entities is a fixed price option to acquire the aircraft at the end of the lease term that was not
deemed to be bargain purchase options at lease inception. Since there are no other arrangements (either
implicit or explicit) between us and the individual trusts that would result in our absorbing additional
variability from the trusts, we concluded that we are not the primary beneficiary of these trusts. We account
for these leases as operating leases, following the appropriate lease guidance as required by the Leases topic in
the Codification.
Operating Leases as Lessor: In 2008, we leased two of our owned EMBRAER 190 aircraft, each with a
lease term of 12 years. The net book value of these two aircraft was approximately $50 million as of
December 31, 2009 and is included in other assets on our consolidated balance sheet. Under the terms of these
leases, we recorded approximately $6 million and $2 million in rental income during 2009 and 2008,
respectively. Future lease payments due to us under these leases are approximately $6 million per year over
the remaining terms.
Note 4—JFK Terminal 5
In October 2008, we began operating out of our new Terminal 5 at JFK, or Terminal 5. The construction
and operation of this facility is governed by a lease agreement that we executed with the Port Authority of
New York and New Jersey, or PANYNJ, in 2005. Under the terms of this lease agreement, we were
responsible for the construction of a 635,000 square foot 26-gate terminal, a parking garage, roadways and an
AirTrain Connector, all of which are owned by the PANYNJ and which are collectively referred to as the
Project. The lease term ends in 2038 and we have a one-time early termination option in 2033.
We are responsible for various payments under the lease, including ground rents for the new terminal site
which began on lease execution in 2005, and facility rents that commenced in 2008 when we took beneficial
occupancy of Terminal 5. The facility rents are based on the number of passengers enplaned out of the new
terminal, subject to annual minimums. The PANYNJ has reimbursed us for the costs of constructing the
Project in accordance with the lease, except for approximately $77 million in leasehold improvements that
have been provided by us and which are classified as leasehold improvements and included in ground property
and equipment on our consolidated balance sheets.
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