JetBlue Airlines 2013 Annual Report Download - page 57

JETBLUE AIRWAYS CORPORATION-2013Annual Report 51
PART II
ITEM 8Financial Statements and Supplementary Data
Maturities of long-term debt and capital leases, including the assumption our convertible debt will be redeemed upon the first put date, for the next five years
are as follows (in millions):
Year Maturities
2014 $ 469
2015 276
2016 474
2017 201
2018 245
Thereafter 920
Aircraft, engines, and other equipment and facilities having a net book value of $3.58 billion at December 31, 2013 were pledged as security under
various loan agreements. Cash payments for interest related to debt and capital lease obligations, net of capitalized interest, aggregated $117 million,
$136 million and $136 million in 2013, 2012 and 2011, respectively.
The carrying amounts and estimated fair values of our long-term debt at December31, 2013 and 2012 were as follows (in millions):
December 31, 2013 December 31, 2012
Carrying
Value
Estimated
FairValue
Carrying
Value
Estimated
FairValue
Public Debt
Floating rate enhanced equipment notes
Class G-1, due through 2013, 2014 and 2016 $ 55 $ 54 $ 173 $ 164
Class G-2, due 2014 and 2016 373 365 373 351
Class B-1, due 2014 — — 49 48
Fixed rate special facility bonds, due through 2036 78 68 82 82
6.75% convertible debentures due in 2039 162 297 162 225
5.5% convertible debentures due in 2038 68 134 123 173
Non-Public Debt
Floating rate equipment notes, due through 2025 634 645 816 776
Fixed rate equipment notes, due through 2026 1,110 1,161 960 1,050
TOTAL $ 2,480 $ 2,724 $ 2,738 $ 2,869
The estimated fair values of our publicly held long-term debt are classified
as Level 2 in the fair value hierarchy. The fair values of our enhanced
equipment notes and our special facility bonds were based on quoted
market prices in markets with low trading volumes. The fair value of our
convertible debentures was based upon other observable market inputs
since they are not actively traded. The fair value of our non-public debt
was estimated using a discounted cash flow analysis based on our
borrowing rates for instruments with similar terms and therefore classified
as Level 3 in the fair value hierarchy. The fair values of our other financial
instruments approximate their carrying values. Refer to Note 14 for
additional information on fair value.
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 the Consolidations
topic of the Codification and must be considered for consolidation in
our financial statements. Our assessment of the EETCs considers both
quantitative and qualitative factors, including whether we have the power
to direct the activities and to what extent we participate in the sharing of
benefits and losses. 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 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.
Short-term Borrowings
We have several lines of credit which bear interest at a floating rate based upon LIBOR plus a margin range of between 1.0% and 2.75%
Morgan Stanley Line of Credit
In July 2012, we entered into a revolving line of credit with Morgan Stanley
for up to approximately $100 million, and in December 2012, the available
line was increased to allow for borrowings up to $200 million. This line
of credit is secured by a portion of our investment securities held by
them and the amount available to us under this line of credit may vary
accordingly. This line of credit bears interest at a floating rate based upon
LIBOR, plus a margin. During the year we borrowed $190 million on this
line of credit, which was fully repaid. As of December 31, 2013, we did
not have a balance outstanding under this line of credit.
CitiBank Line of Credit
On April 23, 2013, we entered into a Credit and Guaranty Agreement consists
of a $350 million revolving credit and letter of credit facility with Citibank,
N.A. as the administrative agent which terminates in 2016. Borrowing
under the Credit Facility bear interest at a variable rate equal to LIBOR,
plus a margin. The Credit Facility is secured by Slots at JFK, Newark,
LaGuardia and Reagan National airports as well as certain other assets.