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JETBLUE AIRWAYS CORPORATION-2013Annual Report30
PART II
ITEM7Management’s Discussion and Analysis of Financial Condition and Results of Operations
Income Taxes
Our effective tax rate was 39% in 2012 compared to 41% in 2011. Our effective tax rate differs from the statutory income tax rate primarily due to
state income taxes, the change in valuation allowance and the non-deductibility of certain items for tax purposes. The rate decrease was attributable
to reductions in certain non-deductible items and the relative size of these items to our pre-tax income.
Costs per Available Seat Mile (Non-GAAP)
Costs per available seat mile, or CASM, is a commonly used metric
in the airline industry. Our CASM for 2013 and 2012 are summarized
in the table below. We have listed separately our fuel costs and profit
sharing expense. While these amounts are included in CASM, we believe
excluding fuel costs, which are subject to many economic and political
factors beyond our control, as well as profit sharing, which is sensitive to
volatility in earnings, is useful to management and investors. We believe
this non-GAAP measure is more indicative of our ability to manage our
costs and provides a meaningful comparison of our results to the airline
industry and our prior year results. Investors should consider this non-GAAP
financial measure in addition to, and not as a substitute for, our financial
performance measures prepared in accordance with GAAP.
Reconciliation of Operating Expense per ASM, excluding Fuel and Profit Sharing
(in millions, per ASM data in cents)
2013 2012
Per ASM
Year-over-Year Change
$ per ASM $ per ASM %
Total operating expenses $ 5,013 11.71 $ 4,606 11.49 1.9%
Less: Aircraft fuel and related taxes 1,899 4.43 1,806 4.50 (1.6)
Operating expenses, excluding fuel 3,114 7.28 2,800 6.99 4.2
Less: Profit sharing 12 0.03 3 0.01 200.0
OPERATING EXPENSE, EXCLUDING FUEL
& PROFIT SHARING $ 3,102 7.25 $ 2,797 6.98 3.8