JetBlue Airlines 2014 Annual Report Download - page 59

JETBLUE AIRWAYS CORPORATION-2014Annual Report 53
PART II
ITEM 8Financial Statements and Supplementary Data
We were considered the owner of the T5 Project for financial reporting
purposes only and have been required to reflect an asset and liability for
the T5 Project on our consolidated balance sheets since construction
commenced in 2005. The cost of the T5 Project and the related liability are
being accounted for as a financing obligation. Our construction of T5i is
accounted for at cost with no financing obligation.
Total costs incurred for the elements of the T5 Project were $637 million,
of which $561 million is classified as Assets Constructed for Others and
the remaining $76 million is classified as leasehold improvements in our
consolidated balance sheets. Assets Constructed for Others are being
amortized over the shorter of the 25 years non-cancelable lease term or their
economic life. We recorded amortization expense of $23 million in 2014,
2013 and 2012 respectively. Our expenditure relating to T5i is approximately
$190 million, of which approximately $102 million was incurred in 2014 and
is classified as leasehold improvements in our consolidated balance sheets.
The PANYNJ has reimbursed us for the amounts currently included in Assets
Constructed for Others. These reimbursements and related interest are
reflected as Construction Obligation in our consolidated balance sheets.
When the facility rents are paid they are treated as a debt service on the
Construction Obligation, with the portion not relating to interest reducing
the principal balance. Minimum estimated facility payments including
escalations associated with the facility lease are estimated to be $40 million
per year in 2015 through 2019 and $576 million thereafter. The portion of
these scheduled payments serving to reduce the principal balance of the
Construction Obligation is $15 million in 2015, $15 million in 2016, $16million
in 2017, $17 million in 2018 and $18 million in 2019. Payments could exceed
these amounts depending on future enplanement levels at JFK. Scheduled
facility payments representative of interest totaled $26 million in 2014, and
$27 million in 2013 and 2012 respectively.
We sublease portions of T5 including space for concessionaires, the airspace
lounge and the TSA facilities. Two of our airline commercial partners,
Hawaiian Airlines and Aer Lingus, operate from this terminal and sublease
facilities from us. Minimum lease payments due to us are subject to various
escalation amounts through 2024. Future minimum lease payments due
to us during each of the next five years are estimated to be $13 million per
year in each of 2015 through 2018 and $6 million in 2019.
NOTE 5 Stockholders’ Equity
In September 2012, our Board of Directors authorized a share repurchase
program for up to 25 million shares of common stock over a five year period.
The repurchases may be commenced or suspended from time to time
without prior notice. During the fourth quarter of 2012, we repurchased
approximately 4.1 million shares of our common stock for approximately
$23 million. During 2013, we repurchased approximately 0.5 million shares
of our common stock for approximately $3 million. During April and May
2014, we repurchased approximately 1.6 million shares of our common
stock for approximately $13 million. On May 29, 2014, we announced that
we had entered into an accelerated share repurchase agreement, or ASR,
with JP Morgan, paying $60 million for approximately 5.1 million shares.
On September 9, 2014, the term of the ASR concluded with JPMorgan
delivering approximately 0.4 million more shares to JetBlue. This resulted
in a total of approximately 5.5 million shares being repurchased under
the ASR, based upon the volume weighted average prices of JetBlue’s
common stock during the term of the ASR. As of December 31, 2014,
13.3 million shares remain available for repurchase under the share
repurchase program.
As of December 31, 2014, we had a total of 60.8 million shares of our
common stock reserved for issuance related to our equity incentive plans,
our convertible debt, and our share lending facility. Refer to Note 7 for
further details on our share-based compensation.
As of December 31, 2014, we had a total of 59.0 million shares of treasury
stock, the majority of which relate to the return of borrowed shares under
our share lending agreement. Refer to Note 2 for further details on the
share lending agreement. The treasury stock also include shares that
were repurchased under our share repurchase program described above.
NOTE 6 Earnings Per Share
The following table shows how we computed basic and diluted earnings per common share for the years ended December 31 (dollars and share
data in millions):
2014 2013 2012
Numerator:
Net income $ 401 $ 168 $ 128
Effect of dilutive securities:
Interest on convertible debt, net of income taxes and profit sharing 7 9 9
Net income applicable to common stockholders after assumed conversions for diluted
earnings per share $ 408 $ 177 $ 137
Denominator:
Weighted average shares outstanding for basic earnings per share 294.7 282.8 282.3
Effect of dilutive securities:
Employee stock options and restricted stock units 2.4 2.1 1.2
Convertible debt 46.2 58.6 60.6
Adjusted weighted average shares outstanding and assumed conversions for diluted
earnings per share 343.3 343.5 344.1
Shares excluded from EPS calculation:
Shares issuable upon conversion of our convertible debt as assumed conversion would be
antidilutive — — —
Shares issuable upon exercise of outstanding stock options or vesting of restricted stock
units as assumed exercise would be antidilutive 6.9 13.8 19.5