JetBlue Airlines 2009 Annual Report Download - page 82
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(2) Includes the fair value of our reverse swap sales contracts that were entered into in order to effectively
exit our original swap contracts. The value of these contracts was $44 million as of December 31, 2008,
all of which settled by December 31, 2009.
Note 14—Fair Value of Financial Instruments
Under the Fair Value Measurements and Disclosures topic of the Codification, ASC 820, disclosures are
required about how fair value is determined for assets and liabilities and a hierarchy for which these assets
and liabilities must be grouped is established, based on significant levels of inputs as follows:
Level 1 quoted prices in active markets for identical assets or liabilities;
Level 2 quoted prices in active markets for similar assets and liabilities and inputs that are
observable for the asset or liability; or
Level 3 unobservable inputs for the asset or liability, such as discounted cash flow models
or valuations.
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level
of input that is significant to the fair value measurement. The following is a listing of our assets and liabilities
required to be measured at fair value on a recurring basis and where they are classified within the fair value
hierarchy (as described in Note 1) as of December 31, 2009 (in millions).
Level 1 Level 2 Level 3 Total
Assets
Cash and cash equivalents ......................... $ 902 $— $— $ 902
Restricted cash ................................. 71 — — 71
Investment securities
Auction rate securities (ARS) ..................... — — 74 74
Available-for-sale securities ...................... 150 — — 150
Held-to-maturity bonds ......................... 22 — — 22
Put option related to ARS ......................... — — 11 11
Aircraft fuel derivatives ........................... — 28 — 28
$1,145 $28 $85 $1,258
Liabilities
Interest rate swap ............................... $ — $— $10 $ 10
$ — $— $10 $ 10
Refer to Note 2 for fair value information related to our outstanding debt obligations as of December 31,
2009. The following table reflects the activity for the major classes of our assets and liabilities measured at
fair value using level 3 inputs (in millions) for the twelve months ended December 31, 2009:
Auction Rate
Securities
Put Option
related to ARS
Interest Rate
Swaps Total
Balance as of December 31, 2008 .......... $244 $14 $(10) $ 248
Total gains or (losses), realized or unrealized . .
Included in earnings................... 4 (3) (5) (4)
Included in comprehensive income ........ — — 5 5
Purchases, issuances and settlements, net ..... (174) — — (174)
Balance as of December 31, 2009 .......... $ 74 $11 $(10) $ 75
Cash and Cash Equivalents: Our cash and cash equivalents include money market securities and trade
deposits which are readily convertible into cash with maturities of three months or less when purchased, both
of which are considered to be highly liquid and easily tradable. These securities are valued using inputs
73