Jetblue Airways Annual Report 2012

FY2012 Annual Report · Jetblue Airways
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LA / LONG BEACH

Dear Fellow Shareholders,

2012 was one of the best years in our airline’s 13-year history. We delivered strong ﬁ nancial results, including a 50% increase of net income to $128  million 
on record revenues of nearly $5 billion. We executed on our plans for sustainable, proﬁ table growth as we opened ﬁ ve new cities and expanded into 
19  new markets. We improved our return on invested capital, or ROIC, by approximately one percentage point while simultaneously growing our 
operations. We reported our fourth consecutive year of proﬁ tability and improved operating margin by 40 basis points to 7.5%. Even with Hurricane 
Sandy, which signiﬁ cantly impacted operations in our hometown of New York and reduced operating income by $30 million, we reported our highest 
diluted earnings per share since 2003 of $0.40. 

We generated a record $698 million in cash from operations while strengthening our balance sheet with a $285 million reduction in our overall debt 
balance. We repurchased approximately $23 million of common stock through our share buyback program, largely offsetting the number of shares 
issued during the year in connection with equity-based crewmember compensation. We ended the year with approximately $731 million in unrestricted 
cash and short term investments –  or 15% of trailing twelve months revenue – while increasing our available lines of credit to $325 million. Our strong 
operating trends and improved credit metrics resulted in an improved ratings and outlook from Standard & Poor’s and Fitch Ratings. 

Differentiated Product

We continue to generate a price premium versus our competitors in many of our key markets; we attribute much of this success to our strong brand and 
the unique JetBlue Experience our Crewmembers deliver to our 29 million customers. We believe we offer customers the best main cabin experience 
in North America with a strong core product, including free inﬂ ight entertainment and the most legroom in coach of any U.S. airline (based on average 
ﬂ eet-wide seat pitch) and reasonably priced optional upgrades designed to enhance this core experience. As a testament to the exceptional customer 
service provided by our Crewmembers, we earned our eighth consecutive J.D. Power award for service excellence in 2012.

We have continued to focus on ways to further differentiate the JetBlue Experience, including enhancements to our Even More™ offering. To that end, we 
reconﬁ gured our EMBRAER 190 aircraft to include an additional eight Even More™ Space seats and began to offer Even More Speed™, our expedited 
security option, for sale on a standalone basis in most of our U.S. domestic locations. We also introduced a new tier within our TrueBlue frequent ﬂ yer 
program – called TrueBlue Mosaic – to better recognize and reward JetBlue’s most loyal and highest-value customers. 

We believe our focus on providing customers with the best value for their investment reinforces our position as the carrier of choice for leisure and 
business customers who have been underserved by low cost airlines and traditional network airlines.

Our strong brand helps drive word-of-mouth marketing, and we successfully use social media as a powerful way to gain positive exposure and connect with 
our customers. At year end, we had over two millions followers on Twitter, maintaining our social media leadership as the most-followed airline on Twitter. 

High-Value Geography

2013 marks only the 14th year since our ﬁ rst ﬂ ight; and we believe signiﬁ cant, proﬁ table, growth opportunities abound. While our total network currently 
represents only approximately ﬁ ve percent of the U.S. domestic market, we continue to grow proﬁ tably in very lucrative markets. The cities we serve 
include some of the largest high-value travel markets and most densely populated areas in the country, including New York, Boston and Florida. 

In Boston, we have continued to create and capitalize on opportunities in the changing competitive landscape by adding routes and frequencies and 
increasing our relevance to business travelers. At year end, our domestic operations accounted for more than 20% of all domestic ﬂ ights at Boston’s 
Logan Airport.

We also continue to see signiﬁ cant potential for proﬁ table growth in the Caribbean and Latin America. We now have approximately 30% of our capacity 
in this important region. Our signiﬁ cant presence and continued investment in this region continues to beneﬁ t the customer experience. In San Juan, 
Puerto Rico, for example, we moved into new facilities in 2012 to support future growth. 

While our network growth over the past several years has primarily been focused in Boston, the Caribbean and Latin America, the pace of growth in 
the rest of our network has slowed, resulting in improved returns. At year end, approximately ﬁ ve percent of our capacity was in markets less than one 
year old compared to 17% in new markets at the end of 2007.

We also continued to expand the scope of our network through airline partnerships with eight new airline partners in 2012. Hawaiian Airlines became 
the ﬁ rst of our airline partners to arrive and depart from our home at JFK International Airport’s Terminal 5, and Aer Lingus plans to move their operations 
to our terminal in 2013. With 23 partners as of March 2013, we now offer our customers the opportunity to book travel to hundreds of destinations in 
six continents. Given our valuable slot portfolio and state-of-the art terminal at JFK, we believe we are well positioned to serve global carriers and ﬂ ow 
incremental passengers and revenue through our network. 

 
Competitive Costs

Successful execution of our network strategy demands lower costs relative to our legacy peers. Our success, unlike low-cost airlines, does not require 
the lowest costs in the industry. Rather, we strive to maintain a relative cost advantage to support proﬁ table growth with our differentiated product at 
competitive fares. 

We make investments designed to deliver future beneﬁ ts, preserve our relative cost advantage and drive efﬁ ciency. For example, we recently became 
the ﬁ rst carrier in North America to ﬂ y commercial service with sharklet wing tip devices that improve the aerodynamic performance of our Airbus A320 
aircraft. We believe the improvement in fuel efﬁ ciency will provide signiﬁ cant savings against our largest and most unpredictable cost. 

Our Values

JetBlue’s success depends on our 15,000 Crewmembers, delivering the best customer service experience while staying true to our ﬁ ve key values: safety, 
caring, integrity, passion and fun.  We created over 200 new jobs this past year and beneﬁ t from a highly engaged workforce. We believe maintaining a 
direct relationship with our Crewmembers is an important driver of our culture, brand and ultimately our ability to improve shareholder returns.

Our support of causes that are important to our communities has helped create a loyal customer base. After Hurricane Sandy, for example, we quickly 
launched jetbluegives.org to engage customers and TrueBlue members in fund raising efforts for the American Red Cross. We are very proud our 
customers donated $720,000 through this program to support the relief and recovery efforts of impacted communities. 

A Look Ahead

When we ﬁ rst took to the skies in February 2000, we did not anticipate becoming the sixth largest U.S. airline serving 75 cities. Nor did we envision we 
would become the only major U.S. airline to begin operations after deregulation in 1978 to survive into a second decade of operation on a stand-alone 
basis without having gone through bankruptcy or a change in control. Our plans to continue to grow organically are dependent upon our ability to adapt 
to an ever-changing environment and enhance shareholder value. We believe we are well-positioned to do so. 

Our 2013 outlook calls for a signiﬁ cant increase in margin growth based on our ability to continue to successfully execute our network strategy and 
contain costs. We plan to continue to pursue targeted, proﬁ table growth opportunities in Boston, the Caribbean and Latin America while maintaining a 
cost advantage versus our competitors. We will also take delivery of our ﬁ rst four Airbus A321 aircraft in the latter part of 2013. We believe the Airbus 
A321 will allow us to operate our valuable slot portfolio in New York more efﬁ ciently, reduce unit costs and enhance the customer experience.

We are committed to growing proﬁ tably at a sustainable rate. We believe our differentiated product and service offering combined with our competitive 
costs enables us to ﬁ ercely compete in high-value geography and continue to win over customers underserved by our competitors. We are more 
optimistic than ever about our future. 

On behalf of our 15,000 dedicated Crewmembers, we thank you for your continued support.

Most Sincerely,

Dave Barger
President & Chief Executive Ofﬁ cer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the ﬁ scal year ended December 31, 2012 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

for the transition period from ______________ to ______________

Commission ﬁ le number. 000-49728

JETBLUE AIRWAYS CORPORATION

(Exact name of Registrant as speciﬁ ed in its charter)

DELAWARE  
(State or other jurisdiction of incorporation or organization)
27-01 Queens Plaza North, Long Island City, New York  
(Address, including zip code, of registrant’ s principal executive ofﬁ ces) 

87-0617894  
(I.R.S. Employer Identiﬁ cation No.) 
11101 
(Zip Code)

(718) 286-7900 
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class
Common Stock, $0.01 par value 
Participating Preferred Stock Purchase Rights

Name of each exchange on which registered 
The NASDAQ Global Select Market 

Indicate by check mark 

YES

NO

 • if the registrant is a well-known seasoned issuer, as deﬁ ned in Rule 405 of the Securities Act.

 • if the registrant is not required to ﬁ le reports pursuant to Section 13 or Section 15(d) of the Act.
 • whether the Registrant (1) has ﬁ led all reports required to be ﬁ led by Section 13 or 15(d) of the Securities 
and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant 
was required to ﬁ le such reports), and (2) has been subject to such ﬁ ling requirements for the past 90 days.
 • whether the registrant has submitted electronically and posted on its corporate Web site, if any, every 
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required 
to submit and post such ﬁ les).

 • if disclosure of delinquent ﬁ lers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not 
contained herein, and will not be contained, to the best of Registrant’s knowledge, in deﬁ nitive proxy 
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.

 • whether the registrant is a large accelerated ﬁ ler, an accelerated ﬁ ler, a non-accelerated ﬁ ler or a smaller reporting company. See deﬁ nition 

of “large accelerated ﬁ ler”, “accelerated ﬁ ler” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated ﬁ ler 

Accelerated ﬁ ler 

Non-accelerated ﬁ ler 

Smaller reporting company 

 • whether the registrant is a shell company (as deﬁ ned in Rule 12b-2 of the Act).

The aggregate market value of the registrant’ s common stock held by non-afﬁ liates of the registrant as of June 30, 2012 was approximately 
$1,248,512,000 (based on the last reported sale price on the NASDAQ Global Select Market on that date). The number of shares outstanding 
of the registrant’ s common stock as of January 31, 2013 was 280,750,081 shares. 

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for its 2013 Annual Meeting of Stockholders, which is to be ﬁ led subsequent to the date 
hereof, are incorporated by reference into Part III of this Form 10-K.

Table of Contents

PART I 

06

ITEM 1. 

Business ..............................................................................................................................................................................................................................................................................................06
Overview .......................................................................................................................................................................................................................................................................................06
Our History ................................................................................................................................................................................................................................................................................06
Our Industry and Competition .....................................................................................................................................................................................................................07
The JetBlue Experience and Strategy .............................................................................................................................................................................................07
Our Cost Structure and Operations ....................................................................................................................................................................................................09
Culture .............................................................................................................................................................................................................................................................................................11
Aircraft Fuel ..............................................................................................................................................................................................................................................................................11
Maintenance ...........................................................................................................................................................................................................................................................................11
LiveTV, LLC ...............................................................................................................................................................................................................................................................................12
Government Regulation ........................................................................................................................................................................................................................................12
ITEM 1A.  Risk Factors ..................................................................................................................................................................................................................................................................................14
Risks Related to JetBlue ......................................................................................................................................................................................................................................14
Risks Associated with the Airline Industry ................................................................................................................................................................................18
ITEM 1B.  Unresolved Staff Comments ..........................................................................................................................................................................................................................19
ITEM 2. 
Properties ..........................................................................................................................................................................................................................................................................................19
ITEM 3. 
Legal Proceedings ............................................................................................................................................................................................................................................................20
ITEM 4.  Mine Safety Disclosures .........................................................................................................................................................................................................................................20
Executive Offi cers of the Registrant .................................................................................................................................................................................................21

PART II 

22

ITEM 5.  Market for Registrant’s Common Equity; Related Stockholder Matters 

and Issuer Purchases of Equity Securities ...........................................................................................................................................................................22
ITEM 6. 
Selected Financial Data ..........................................................................................................................................................................................................................................24
ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations ...........26
Overview .......................................................................................................................................................................................................................................................................................26
Outlook for 2013 ...............................................................................................................................................................................................................................................................27
Results of Operations ...............................................................................................................................................................................................................................................27
Liquidity and Capital Resources...............................................................................................................................................................................................................33
Contractual Obligations .........................................................................................................................................................................................................................................36
Off-Balance Sheet Arrangements ..........................................................................................................................................................................................................37
Critical Accounting Policies and Estimates .............................................................................................................................................................................37
ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk .............................................................................................................39
ITEM 8. 
Financial Statements and Supplementary Data  ................................................................................................................................................................40
JetBlue Airways Corporation Consolidated Balance Sheets ........................................................................................................................40
JetBlue Airways Corporation Consolidated Statements of Operations........................................................................................42
JetBlue Airways Corporation Consolidated Statements of Comprehensive Income ...............................................43
JetBlue Airways Corporation Consolidated Statements of Cash Flows  ...................................................................................44
JetBlue Airways Corporation Consolidated Statements of Stockholders’ Equity ........................................................45

02

JETBLUE AIRWAYS CORPORATION - 2012  10K

    
 
Notes to Consolidated Financial Statements .......................................................................................................................................................................46
Report of Independent Registered Public Accounting Firm...........................................................................................................................65
Report of Independent Registered Public Accounting Firm...........................................................................................................................66

ITEM 9. 

Changes in and Disagreements with Accountants on Accounting 
and Financial Disclosure ........................................................................................................................................................................................................................................67
ITEM 9A.  Controls and Procedures ......................................................................................................................................................................................................................................67
ITEM 9B.  Other Information ................................................................................................................................................................................................................................................................67

PART III 

68

ITEM 10.  Directors, Executive Offi cers and Corporate Governance .......................................................................................................................68
ITEM 11. 
Executive Compensation......................................................................................................................................................................................................................................68
ITEM 12.  Security Ownership of Certain Benefi cial Owners and Management 

and Related Stockholder Matters .........................................................................................................................................................................................................69
ITEM 13.  Certain Relationships and Related Transactions, and Director Independence ..................................................69
ITEM 14.  Principal Accounting Fees and Services ..................................................................................................................................................................................69

PART IV 

ITEM 15. 

Exhibits and Financial Statement Schedules ...................................................................................................................................................................70
Schedule II Valuation and Qualifying Accounts .................................................................................................................................................................82

70

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04

JETBLUE AIRWAYS CORPORATION - 2012  10K

Forward-Looking Information

Statements in this Form 10-K (or otherwise made by JetBlue or on 
JetBlue’s behalf) contain various forward-looking statements within the 
meaning of Section 27A of the Securities Act of 1933, as amended, or the 
Securities Act, and Section 21E of the Securities Exchange Act of 1934, 
as amended, or the Exchange Act, which represent our management’s 
beliefs and assumptions concerning future events. When used in this 
document and in documents incorporated herein by reference, the 
words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” 
“guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar 
expressions are intended to identify forward-looking statements. Forward-
looking statements involve risks, uncertainties and assumptions, and are 
based on information currently available to us. Actual results may differ 
materially from those expressed in the forward-looking statements due 
to many factors, including, without limitation, our extremely competitive 
industry; increases and volatility in fuel prices, increases in maintenance 
costs and interest rates; our ability to implement our growth strategy; 
our signiﬁ cant ﬁ xed obligations and substantial indebtedness; our ability 
to attract and retain qualiﬁ ed personnel and maintain our culture as we 
grow; our reliance on high daily aircraft utilization; our dependence on 
the New York metropolitan market and the effect of increased congestion 
in this market; our reliance on automated systems and technology; our 
being subject to potential unionization, work stoppages, slowdowns or 
increased labor costs; our reliance on a limited number of suppliers; our 
presence in some international emerging markets that may experience 

political or economic instability or may subject us to legal risk; reputational 
and business risk from information security breaches; a negative impact 
on the JetBlue brand; the long term nature of our ﬂ eet order book; 
changes in or additional government rules, regulations or laws; changes 
in our industry due to other airlines’ ﬁ nancial condition; the impact on our 
growth because of economic difﬁ culties in Europe through a continuance 
of the economic recessionary conditions in the U.S. or a further economic 
downturn leading to a continuing or accelerated decrease in demand for 
domestic and business air travel; and external geopolitical events and 
conditions. It is routine for our internal projections and expectations to 
change as the year or each quarter in the year progresses, and therefore 
it should be clearly understood that the internal projections, beliefs and 
assumptions upon which we base our expectations may change prior to 
the end of each quarter or year. Although these expectations may change, 
we may not inform you if they do.

You should understand that many important factors, in addition to those 
discussed or incorporated by reference in this report, could cause our 
results to differ materially from those expressed in the forward-looking 
statements. Potential factors that could affect our results include, in addition 
to others not described in this report, those described in Item 1A of this 
report under “Risks Related to JetBlue” and “Risks Associated with the 
Airline Industry.” In light of these risks and uncertainties, the forward-looking 
events discussed in this report might not occur.

JETBLUE AIRWAYS CORPORATION - 2012  10K 05

    
   
PART I

ITEM 1.  Business

Overview

JetBlue Airways Corporation is a passenger airline known as much for its 
award-winning customer service and free TV as for its competitive fares. 
JetBlue believes it offers its customers the best main cabin experience 
in markets it serves with a strong core product and reasonably priced 
optional upgrades. JetBlue operates primarily on point-to-point routes with 
its ﬂ eet of 127 Airbus A320 aircraft and 53 EMBRAER 190 aircraft — one 
of the youngest and most fuel-efﬁ cient ﬂ eet of any major U.S. airline. As 
of December 31, 2012, we served 75 destinations in 23 states, Puerto 
Rico, the U.S. Virgin Islands, Mexico and 12 countries in the Caribbean 
and Latin America. JetBlue is New York’s Hometown Airline. Most of our 
ﬂ ights have as an origin or destination one of our six focus cities: New 
York, Boston, Fort Lauderdale, Los Angeles (Long Beach), Orlando and 

San Juan, Puerto Rico. By the end of 2012, we operated an average of 
750 daily ﬂ ights. For the year ended December 31, 2012, JetBlue was 
the sixth largest passenger carrier in the United States based on revenue 
passenger miles as reported by these passenger airlines. As used in this 
Form 10-K, the terms “JetBlue”, “we”, “us”, “our” and similar terms refer 
to JetBlue Airways Corporation and its subsidiaries, unless the context 
indicates otherwise.

JetBlue was incorporated in Delaware in August 1998 and commenced 
service February 11, 2000. Our principal executive ofﬁ ces are located at 
27-01 Queens Plaza North, Long Island City, New York 11101 and our 
telephone number is (718) 286-7900. 

Where You Can Find Other Information

Our website is www.jetblue.com. Information contained on our website is 
not part of this report. Information we furnish or ﬁ le with the SEC, including 
our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current 
Reports on Form 8-K and any amendments to or exhibits included in these 
reports are available for download, free of charge, on our website soon 
after such reports are ﬁ led with or furnished to the SEC. Our SEC ﬁ lings, 
including exhibits ﬁ led therewith, are also available at the SEC’s website 

at www.sec.gov. You may obtain and copy any document we furnish or 
ﬁ le with the SEC at the SEC’s public reference room at 100 F Street, NE, 
Room 1580, Washington, D.C. 20549. You may obtain information on 
the operation of the SEC’s public reference facilities by calling the SEC 
at 1-800-SEC-0330. You may request copies of these documents, upon 
payment of a duplicating fee, by writing to the SEC at its principal ofﬁ ce 
at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

Our History

JetBlue began operations in 2000 as a well-funded start-up, which afforded 
us the ability to make signiﬁ cant investments in our product offerings, 
including all new aircraft equipped with leather seats and LiveTV. This 
product investment combined with superior customer service at low fares 
led to widespread brand recognition and early success, predominantly 
with leisure travelers in New York. By the end of 2006, JetBlue employed 
over 10,000 employees (to whom we refer as Crewmembers), operated 
500 daily ﬂ ights with a ﬂ eet of 119 aircraft and generated annual revenues 
exceeding $2 billion. A heavy debt load taken on to ﬁ nance this rapid early 
growth, a wide-spread economic recession and record high energy prices 
led to annual losses in 2005 and 2006. It became clear to us this rate of 
growth, as then reﬂ ected in our aircraft order book, if not moderated, was 
unsustainable. Over time, we modiﬁ ed our growth rate through the sale 

and deferral of aircraft. Additionally, we began to structure our network and 
invest in offerings targeted to attract a higher mix of business travelers, 
particularly in Boston. At the same time, we allocated growth to Caribbean 
routes which typically mature to proﬁ tability faster than domestic routes. 
As we complete our 13th year of operations, we believe our differentiated 
product and service offering combined with our competitive costs enables 
us to ﬁ ercely compete in high-value geography. 

We are the only major U.S. airline which began operations post-deregulation 
to survive into a second decade of operation on our own. Our continued 
plans to grow organically and our future success are dependent upon our 
ability to adapt to an ever-changing environment and enhance shareholder 
value. We believe we are well-positioned to do so.

06

JETBLUE AIRWAYS CORPORATION - 2012  10K

PART I   

ITEM 1 Business

Our Industry and Competition

The U.S. passenger airline industry is extremely challenging, competitive 
and volatile. It is highly sensitive to GDP and economic developments. 
We operate in one of the most heavily taxed industries, which is extremely 
capital and energy intensive. U.S. passenger airlines are uniquely susceptible 
to economic downturns, inclement weather, international events, natural 
disasters and acts of terrorism. Airline returns are sensitive to even slight 
changes in fuel costs, average fare levels and passenger demand. The 
principal competitive factors in the airline industry include fares, capacity, 
customer service, route networks, ﬂ ight schedules, aircraft types, safety 
records, reputations, code-sharing and interline relationships, in-ﬂ ight 
entertainment systems and frequent ﬂ yer programs. 

Since 2001, the majority of traditional network airlines have undergone 
signiﬁ cant ﬁ nancial restructuring, including bankruptcies, mergers and 
consolidations. These processes typically result in a lower cost structure 
through reduction of labor costs, restructuring of commitments (including 
debt terms, leases and ﬂ eet), modiﬁ cation or termination of pension plans, 

increased workforce ﬂ exibility and innovative offerings. They also provide 
signiﬁ cant opportunities to realign route networks, alliances and frequent 
ﬂ ier programs.

Historically, capacity and pricing actions taken by airlines have had a 
signiﬁ cant inﬂ uence on industry proﬁ tability. Beginning in 2008, most 
traditional network airlines began to reduce capacity growth in response 
to weak economic conditions and high fuel costs. This industry wide 
capacity discipline has continued throughout 2012. We believe it will 
continue through 2013. 

Price competition occurs through price discounting, fare matching, 
targeted sale promotions, ancillary fee additions and frequent ﬂ yer travel 
initiatives. All of these measures are usually matched by other airlines in 
order to maintain their competitive position. Our ability to meet this price 
competition depends on, among other things, our ability to operate at 
costs equal to or lower than our competitors.

The JetBlue Experience and Strategy

We strive to offer our customers a distinctive ﬂ ying experience, referred to 
as the “JetBlue Experience”, by offering what we believe to be the best 
domestic coach product and providing our customers high value. We 
believe our success is evidenced by our strong brand preference and the 
price premium we are able to achieve through product differentiation. We 
also strive to maintain ﬁ nancial strength and a cost structure that enables 
proﬁ table growth in the markets we serve. We are focused on delivering 
solid results for our Crewmembers, our customers and our shareholders. 

We believe signiﬁ cant opportunities remain for us to grow proﬁ tably and 
responsibly. Unlike most of our competitors, who have been in business 
for several decades and who are managing mature networks, we have 
been ﬂ ying only since 2000, growing our operations each year. We believe 
further proﬁ table growth is possible as a result of our high-value network 
locations, relative low cost structure and differentiated product. Further, 
the cities we serve include some of the largest high-value travel markets 
and most densely populated areas in the country, including New York, 
Boston and Florida.

We believe our business model is unique in the domestic airline industry. 
We are neither a low-cost airline nor a traditional network airline. Our 
proﬁ table growth strategy enables us to compete effectively with both 
types of carriers. 

Low-Cost Airlines. Low-cost carriers view their service as a commodity 
with the belief that their customers will select the airline offering the lowest 
fare in a given market. We are able to compete well against low-cost airlines 
because we do not view ourselves as purely a commodity, and neither 
do our customers. We believe, and our historical experience reﬂ ects, our 
customers prefer a superior level of service and in-ﬂ ight amenities. Further, 
they are willing to pay a premium over a low-cost airline’s product. Unlike 
low-cost airlines, we do not try to maintain the lowest costs in the industry. 
Rather, we strive to achieve sustainable costs to support proﬁ table growth 
with competitive fares. This approach results in a markedly better product 
than the low-cost airlines. 

Network Airlines. Network carriers rely upon vast global route networks. 
They generally operate a signiﬁ cant portion of their ﬂ ights using at least 
one hub where connections are made for ﬂ ights over a spoke system. 
Although we do not have a comparable sized or a hub-and-spoke network, 
we are able to compete effectively against the network airlines. Our route 
structure is based on point-to-point ﬂ ying providing greater customer 
convenience. We expand our destination offerings via our commercial 
partnerships. More importantly, our relative costs are lower than those of 
the large network airlines. This factor allows us to price fares competitively, 
while offering a differentiated coach product.

High Quality Service and Product

Superior customer service in delivering the JetBlue Experience to our 
customers through our strong network and award-winning product is 
core to our mission. We look to attract new customers to our brand and 
give our current customers reasons to come back to us. A core element 
of our success in attracting new and retaining current customers is that 
competitive fares and quality air travel need not be mutually exclusive. 

Onboard JetBlue customers enjoy new aircraft with roomy seats and 
more legroom than other domestic airlines provide in their coach (and on 
some, premium) service. Our in-ﬂ ight entertainment systems include 36 
channels of free DirecTV®, 100 channels of free SiriusXM satellite radio and 
premium movie channel offerings from JetBlue Features®, our source of 
ﬁ rst run ﬁ lms. Our onboard offerings also include an assortment of free and 
unlimited brand name snacks and beverages. Additionally, customers can 
purchase premium beverages and food selections and specially-tailored 
products for overnight ﬂ ights.

Our aircraft are all equipped with leather seats in a comfortable single class 
layout. Our Airbus A320 aircraft, with 150 seats, has a wider cabin than 
both the Boeing 737 and 757 aircraft operated by many of our competitors 
on their domestic routes. Our EMBRAER 190 aircraft each have 100 seats 
arranged in a space friendly two-by-two seating conﬁ guration and are wider 
than industry average for this type of aircraft. We offer the most legroom in 
the main cabin of all U.S. airlines (based on average ﬂ eet-wide seat pitch). 
We plan to introduce the Airbus A321 to our ﬂ eet, with 190 seats. We 
expect to take delivery of our ﬁ rst Airbus A321 during the fourth quarter 
of 2013. The entry into service date of the A321 will depend on the timing 
and successful completion of the FAA certiﬁ cation process. We believe 
the Airbus A321 will allow us to operate our slot portfolio in New York 
more efﬁ ciently, reduce unit costs and enhance the customer experience.

We believe our strong brand and the JetBlue Experience are key elements 
of our continued success. To that end, we continually seek to enhance 
and reﬁ ne our product and service to create value for which people are 
willing to pay. During 2012, we reconﬁ gured our EMBRAER 190 aircraft to 
include an additional eight Even More™ Space seats. We also began to 
offer separately Even More™ Speed which allows customers the option 
to enjoy an expedited security experience in most domestic JetBlue 
locations. During 2011, we executed an agreement with ViaSat Inc. to 
develop and introduce state of the art in-ﬂ ight broadband connectivity 
technology called Ka-band. Ka-band offers more speed and ﬂ exibility than 
the existing Ku-band and air-to-ground technologies offered by some of 
our competitors. During 2012, we began development and testing of this 
technology; we plan to introduce wi-ﬁ  on our aircraft beginning in 2013. 

JETBLUE AIRWAYS CORPORATION - 2012  10K 07

PART I   
ITEM 1 Business

We strive to provide a superior air travel experience, including communicating 
openly and honestly with customers about delays and service disruptions. 
We introduced the JetBlue Airways Customer Bill of Rights in 2007. This 
provides for compensation to customers who experience avoidable 
inconveniences (as well as some unavoidable circumstances), commits 
us to perform at high service standards and holds us accountable if we 
do not. We are the ﬁ rst and currently the only U.S. major airline to provide 
such a fundamental beneﬁ t to customers. In 2012, we completed 99% 
of our scheduled ﬂ ights. Unlike most other airlines, we have a policy of 
not overbooking our ﬂ ights.

Brand Strength. JetBlue is a widely recognized and respected global 
brand. We believe our brand differentiates us from our competitors and 
identiﬁ es us as a safe, reliable, high value airline. Our brand has evolved 
into an important and valuable asset. Similarly, we believe customer 
awareness of our brand has contributed to the success of our marketing 
efforts. It enables us to promote ourselves as a preferred marketing partner 
with companies across many different industries. In 2012, we once again 
received several prestigious awards, including being voted “Highest in 
Airline Customer Satisfaction among Low-Cost Carriers” by J.D. Power 
and Associates for the eighth consecutive year. 

Our customers have repeatedly indicated the JetBlue Experience is an 
important reason why they choose us over other airlines. We believe our 
high satisfaction rating serves as evidence our customers value what we 
have to offer. We measure and monitor our customer feedback regularly 
to achieve a primary goal of continuously improving customer satisfaction. 
One way we do so is by measuring our net promoter score, or NPS. This 
metric is used by many industries to gauge customer experience. Our 
internal measurement shows improvements in our NPS score from 2011 
to 2012, and we are focused on being an industry leader in this metric. 
Many of the leading brands consumers are most familiar with receive high 
NPS scores and are recognized for great customer service. We believe 
a higher NPS score leads to higher customer loyalty which results in 
increased revenue.

Marketing and Distribution

We market our services through advertising and promotions in various media 
forms including using increasingly popular social media outlets. We engage 
in large multi-market programs, many local events and sponsorships as 
well as mobile marketing programs. Our targeted public and community 
relations efforts reﬂ ect our commitment to the communities we serve, as well 
as promoting brand awareness and complementing our strong reputation.

Our primary and preferred distribution channel is through our website, 
www.jetblue.com, our lowest cost channel. We re-designed our website in 
2012 to ensure our customers continue to have as pleasant an experience 
booking their travel as they do in the air. Our participation in global distribution 
systems, or GDSs, supports our proﬁ table growth in the corporate market. 
We ﬁ nd that business customers are more likely to book through a travel 
agency or a booking product which rely on a GDS platform. Although 
the cost of sales through this channel is higher than through our website, 
the average fare purchased through the GDSs is generally higher and 
often covers the increased distribution costs. We currently participate 
in several major GDSs and online travel agents, or OTAs. In 2012, we 
launched mobile applications for both Apple and Android devices designed 
to enhance our customers’ travel experience. These applications have 
robust features, including real-time ﬂ ight information updates. Because 
the majority of our customers book travel on our website, we maintain 
relatively low distribution costs despite increases in recent years in our 
participation in GDS and OTA.

We sell vacation packages through JetBlue Getaways™, a one-stop, 
value-priced vacation website and service designed to meet customers’ 
demand for self-directed packaged travel planning. JetBlue Getaways™ 
packages offer competitive fares for air travel on JetBlue, along with a 
selection of JetBlue-recommended hotels and resorts, car rentals and 
attractions. We also offer a la carte hotel and car rental reservations through 
our website which generates ancillary service revenues.

Route Network. We believe knowing our customers and understanding 
the purpose of their travel helps optimize destinations, strengthen our route 
schedules and increase unit revenues. Historically, we have been a strong 
leisure focused airline resulting in high seasonality in our business. In recent 
years, in order to offset this seasonality, we have increased our relevance to 
the business customer, particularly in Boston. Additionally, we have continued 
proﬁ table growth in the Latin America and Caribbean region, with a mix of 
leisure and visiting friends and relatives, or VFR, travelers. VFR travelers tend 
to be slightly less seasonal and less susceptible to economic downturns than 
traditional leisure destination travelers. We have also expanded our portfolio 
of strategic commercial partnerships, which generate incremental customers 
throughout our network and help to increase load factor during our off-peak 
travel periods. We are focused on continuing to grow our network and further 
reducing our seasonality by targeting new customers in the leisure, business 
and VFR areas. Our operations primarily consist of transporting passengers 
on our aircraft. Domestic U.S. operations, including Puerto Rico, accounted 
for 84% of our capacity in 2012. The historic distribution of our available seat 
miles, or capacity, by region is:

Capacity Distribution
East Coast – Western U.S.
Northeast – Florida
Medium-haul
Short-haul
Caribbean, including Puerto Rico
TOTAL

Year Ended December 31,

2012
32.1%
30.6  
2.9  
7.2  
27.2  
100.0%

2011
32.4%
32.2  
3.2  
7.5  
24.7  
100.0%

2010
34.5%
31.4  
3.3  
7.6  
23.2  
100.0%

As of December 31, 2012, we provided service to 75 destinations in 23 states, Puerto Rico, the U.S. Virgin Islands, Mexico, and 12 countries in the Caribbean 
and Latin America. In 2012, we commenced service to ﬁ ve diverse new destinations, including Dallas/Fort Worth, Texas and Grand Cayman, Cayman Islands. 
We also reduced service tactically across our system, where the markets were not performing adequately. In 2013, we intend to begin service to the following 
destinations:

Destination
Charleston, South Carolina
Albuquerque, New Mexico
Philadelphia, Pennsylvania
Medellin, Colombia

08

JETBLUE AIRWAYS CORPORATION - 2012  10K

Service Scheduled to Commence
February 2013
April 2013
May 2013
June 2013

In considering new markets, we generally focus on either underserved 
markets or those with high average fares. As a part of this process, we 
analyze publicly available data from the Department of Transportation, 
or DOT, showing the historical number of passengers, capacity and 
average fares over time. Using this data, combined with our knowledge 
and experience about how comparable markets have reacted in the past 
to capacity changes, we forecast the expected level of demand that may 
result from our introduction of service and lower prices. We also consider 
the anticipated response of existing airlines in the particular market. When 
deciding upon and entering new markets, we analyze the uniqueness of 
each market and design our operations to target the customer base which 
will allow us to compete effectively and grow proﬁ tably. For example, in 
the Caribbean our operations are primarily targeted on the leisure traveler, 
whereas in Boston, we are focused on both the business traveler and 
the leisure traveler. 

These forecast techniques are designed to portray what we expect the 
market to produce upon maturity. We measure maturity of a market based 
upon cash break-even and proﬁ tability. We consider, among other things, 
the level of investment we believe may be required to reach a steady 
state of performance in a given market. Each route analysis is unique for 
many reasons including, but not limited to, geography, demographics, 
competitive dynamics and our existing size in the market. Generally, a 
business market takes two to three years to fully mature. High leisure 
Caribbean markets, however, have in some cases, matured in as little 
as six months. Our key objective is to achieve a sustainable growth rate 
by offsetting the investment in new markets with the cash and proﬁ ts 
generated from mature markets.

Commercial Partnerships. Airlines frequently participate in marketing 
alliances which, among other things, generally provide for code-sharing, 
frequent ﬂ yer program reciprocity, coordinated ﬂ ight schedules and other 
joint marketing activities. Our commercial agreements typically begin as 
an interline agreement, which allows a customer to book one ticket with 
itineraries on multiple airlines. As we expand our portfolio of commercial 
partnerships, we have also deepened the relationship with some of our 
existing partners from a basic interline agreement to include a code-share 
element in which one airline places its name and ﬂ ight number on ﬂ ights 
operated by another airline. The beneﬁ ts of broad networks potentially 
attract more customers and expand our growing network. We currently 
participate in several commercial partnerships, primarily interline agreements, 
and will continue to seek additional strategic opportunities as they arise. 
We believe our commercial partnerships allow us to leverage our strong 
network and drive incremental trafﬁ c and revenue while improving our 
off-peak periods.

Our Cost Structure and Operations

PART I   

ITEM 1 Business

Our commercial partnerships, of which there are currently 22, are structured 
with gateways primarily at New York’s JFK and Boston’s Logan International 
Airport. These arrangements allow international travelers, whom we do not 
otherwise serve, to easily access many of our key domestic and Caribbean 
routes. Our partners include many notable international carriers. We plan 
on continuing to add commercial partners throughout 2013.

Customer Loyalty Program. TrueBlue is an online program designed 
to reward and recognize our most loyal customers. The program offers 
incentives to increase members’ travel on JetBlue. TrueBlue members earn 
points based upon the amount paid for JetBlue ﬂ ights. Member accounts 
accumulate points which do not expire as long as new ﬂ ight points are 
earned at least once in a 12-month period. Redemption of points for a 
one-way ﬂ ight can begin once a member attains as few as 5,000 points. 
The program has no black-out dates or seat restrictions and any JetBlue 
destination can be booked if the member has enough points to exchange 
for the value of an open seat.

There were approximately 753,000 travel segments ﬂ own during 2012. 
TrueBlue award miles ﬂ own represent approximately 3% of our total 
revenue passenger miles. 

In 2012, we introduced a new badge of TrueBlue for our most loyal 
customers called Mosaic. In order to qualify for Mosaic status, TrueBlue 
members must either (1) ﬂ y a minimum of 30 times with JetBlue and acquire 
at least 12,000 base ﬂ ight points within a calendar year; or (2) accumulate 
15,000 base ﬂ ight points within a calendar year. Mosaic customers enjoy 
beneﬁ ts including free EvenMoreTM Speed, early boarding, access to a 
dedicated Customer service line available 24 hours a day/7days a week, 
a free second bag checked and free EvenMoreTM Space seat upgrades. 

We have an agreement with American Express under which it issues JetBlue 
co-branded American Express credit cards, allowing cardmembers to earn 
TrueBlue points. We have a separate agreement with American Express 
allowing any American Express cardholder to convert their Membership 
Rewards points into TrueBlue points. Additionally, we have agreements 
with other loyalty partners, including hotels and car rental companies, 
allowing their customers to earn TrueBlue points through participation in 
the partners’ programs. We intend to develop and pursue other loyalty 
partnerships in the future.

In 2012, we launched an international co-branded loyalty credit card jointly 
with Banco Santander Puerto Rico and Mastercard. This new Santander 
JetBlue Mastercard allows our customers in Puerto Rico - where we 
are the largest carrier - the ability to take full advantage of our TrueBlue 
loyalty program.

Our cost structure has allowed us to price fares lower than many of our 
larger competitors while offering an award-winning product and service. 
Our network initiatives and growth plans require a low cost platform. 
Maintaining a low cost structure relative to our competitors is fundamental 
to our sustainable growth and proﬁ tability. For the year ended December 31, 
2012, our cost per available seat mile, excluding fuel, of 6.99 cents is 
among the lowest reported by all other major U.S. airlines. However, as our 
ﬂ eet and workforce age, it is increasingly difﬁ cult to maintain this marginal 
advantage relative to our competitors. There are several contributing 
factors to our cost advantage, including high aircraft utilization, new and 
efﬁ cient aircraft, limited ﬂ eet types, relatively low distribution costs, and 
a productive workforce. 

We are continually focused on maintaining a cost advantage relative to 
our competitors while offering a high-quality product and service our 
customers value. We believe in making investments that will deliver future 
beneﬁ ts, preserve our low cost advantage and drive efﬁ ciency. Examples 
of such investments include sharklets for our A320 aircraft to increase fuel 
efﬁ ciency and our construction of an international arrival facility at Terminal 
5 in New York to streamline our international operations.

 Infrastructure

Unlike many network carriers operating under a hub-and-spoke system, 
our point-to-point system is the foundation of our operation. The majority of 
our routes are served by at least one of our six focus cities. This structure 
allows us to optimize costs and generate a revenue premium in certain 
markets as we are able to accommodate customers’ preference for 
non-stop itineraries. During 2012 and 2011, approximately 90% of our 
customers ﬂ ew on non-stop itineraries. 

A vast majority of our operations are centered in and around the northeast 
corridor of the United States encompassing some of the most populated 
airspace in the world. Operating in this congested airspace, however, 
makes us susceptible to certain operational constraints, including the 
increased susceptibility of prolonged recovery times stemming from 
weather events. We are continually working on ways to increase our 
overall operational efﬁ ciencies, including investing in technology and more 
robust operational systems. During 2012, we made several important 
technological advancements. In particular, we were among the industry 
leaders in the efforts towards implementing the Next Generation Air 

JETBLUE AIRWAYS CORPORATION - 2012  10K 09

PART I   
ITEM 1 Business

Transportation System, or NextGen. By December 31, 2012, through a 
government funded program, we had equipped 35 of our Airbus A320 
aircraft with ADS-B Out. ADS-B Out is a satellite based technology aimed 
to facilitate the communication between pilots and air trafﬁ c controllers 
thereby improving safety and operational efﬁ ciency in this busy airspace. 
We expect to begin initial testing in 2013. We anticipate that when the 
technology is in place, average ﬂ ight times will be reduced. Additionally, in 
2012, we became the ﬁ rst FAA certiﬁ ed Airbus A320 carrier in the United 
States to use satellite-based Special Required Navigation Performance 
Authorization Required, or RNP AR, approaches at two of JFK’s prime 
and most used runways, 13L and 13R. Given our signiﬁ cant presence in 
JFK, we believe the unique procedures associated with this technology 
will provide for shorter ﬂ ight times and reduced greenhouse emissions. 

The highest concentration of our network and infrastructure is in the New 
York metropolitan area, Boston and the Caribbean & Latin America region.

 • New York Metropolitan Area. We are New York’s Hometown Airline.TM 
Since 2000, the majority of our operations have originated in New York 
City, the nation’s largest travel market and the largest U.S. point of entry 
from international locations. We are the largest domestic airline at New 
York’s John F. Kennedy International Airport, or JFK, as measured by 
passengers and, by the end of 2012, our domestic operations at JFK 
accounted for nearly 40% of all domestic passengers at this airport. In 
addition to JFK, we serve Newark, NJ’s Liberty International Airport, New 
York’s LaGuardia Airport, Newburgh, NY’s Stewart International Airport and 
White Plains, NY’s Westchester County Airport. We are the leading carrier 
in number of ﬂ ights ﬂ own per day between the New York metropolitan 
area and Florida. JFK is New York’s largest airport, with an infrastructure 
including four runways, large facilities and a direct light-rail connection 
to the New York City subway system and the Long Island Rail Road. 
In 2012, we began construction of T5i, an international arrivals facility, 
which will expand our current Terminal 5, or T5, footprint. We believe 
the new space will enable us to increase efﬁ ciencies, provide savings 
and streamline our operations and the overall customer experience.
 • Boston. We are the largest carrier in terms of ﬂ ights and seats offered 
at Boston’s Logan International Airport, or Boston. Additionally, we serve 
twice as many non-stop destinations from Boston than any other airline. 
By the end of 2012, our domestic operations accounted for more than 
20% of all domestic ﬂ ights at this airport. We continue to capitalize on 
opportunities in the changing competitive landscape by adding routes 
and frequencies and increasing our relevance to local travelers, including 
corporate travelers. These actions have resulted in signiﬁ cant growth for 
us over the past three years. During 2012, we continued to invest in our 
Boston infrastructure including opening a new hangar to accommodate 
our growing operations. We intend to continue to grow to 150 ﬂ ights 
per day from approximately 110 ﬂ ights per day currently.

 • Caribbean and Latin America. A main driver of the growth of our route 
network since 2008 has been through the addition of new destinations 
in the Caribbean and Latin America. These markets have historically 
matured more quickly in terms of cash break-even and proﬁ tability than 
mainland ﬂ ights of comparable distances. As of December 31, 2012, 
approximately 27% of our capacity was in the Caribbean and Latin 
America. We expect this number to continue to grow as we continue to 
seize opportunities. VFR trafﬁ c strongly complements leisure travel in the 
Caribbean region allowing for our proﬁ table growth and success in this 
area of our network. Additionally, competitive landscape changes in San 
Juan, Puerto Rico have allowed us to increase our presence there. We 
continue to invest in our Caribbean operations, including introducing new 
intra-Caribbean service out of Puerto Rico. We are the largest airline in 
terms of capacity serving all of Puerto Rico. During 2012, we relocated to 
an all new terminal in San Juan to accommodate our continued growth. 
We currently serve approximately 35 ﬂ ights per day in San Juan and 

plan to continue to grow our operations to 50 ﬂ ights per day. During 
2012, we began offering service to and from our sixth destination in the 
Dominican Republic, where we are also the largest airline in terms of 
capacity. While the Caribbean and Latin American region is a growing 
part of our network, operating in some of these developing countries can 
present operational challenges, including working with less developed 
airport authorities, political instability and increased civil disturbances.

Fleet

High aircraft utilization. By scheduling and operating our aircraft efﬁ ciently 
we are able to spread our ﬁ xed costs over a greater number of ﬂ ights and 
available seat miles. For the year ended December 31, 2012, our aircraft 
operated an average of 11.8 hours per day which we believe is among 
the highest of all major U.S. airlines. Our airport operations allow us to 
schedule our aircraft with minimum ground time. We offer a signiﬁ cant 
percentage of overnight “red-eye” ﬂ ights, which due to the limited ground 
time presents us with maintenance challenges.

Aircraft reliability and efﬁ ciency. We currently operate only two aircraft 
types, the Airbus A320 and the EMBRAER 190. Reliability and durability 
of our ﬂ eet is essential to our operations running smoothly, and is critical 
to delivering a superior experience for our customers. The average age 
of our ﬂ eet is 6.7 years, which we believe is one of the youngest of any 
major U.S. airline. Operating a younger ﬂ eet and incorporating the latest 
technologies results in our aircraft being more efﬁ cient and dependable 
than older aircraft. We have the world’s largest ﬂ eet of Airbus A320 
aircraft. Of the large Airbus A320 operators in North America, we have 
among the best dispatch reliability. We are continually working internally 
and with our aircraft and engine manufacturers to enhance our reliability 
and efﬁ ciency metrics. Beginning in 2018, we expect to take delivery of 
40 A320 new engine option, or A320neo, aircraft, which incorporate a 
revolutionary engine design expected to increase fuel efﬁ ciency by up to 
16% compared to the current A320 design. Beginning in 2013, we plan 
to equip our Airbus aircraft with curved extensions to the wings designed 
to provide greater and cleaner aerodynamic lift, or sharklets. We expect 
the sharklets will produce better fuel efﬁ ciency for the aircraft, with up to 
three percent less fuel burn on long-haul ﬂ ights, providing for fuel savings 
and range ﬂ exibility. We expect to have 12 A320 aircraft equipped with 
sharklets by the end of 2013. 

Labor

Productive workforce. Our Crewmember efﬁ ciency results from ﬂ exible and 
productive work rules resulting from the direct relationship between JetBlue 
and its highly engaged Crewmembers. We ﬁ rmly believe maintaining the 
direct relationship with our Crewmembers is core to the JetBlue Culture we 
have built since we began operations in 2000. We believe our non-union 
workforce allows us increased ﬂ exibility, which in turn allows us to adapt 
more quickly in a changing environment. Our continued proﬁ table growth 
is dependent upon this ability to quickly adapt. Our pilots are among the 
most productive in the U.S. passenger airline industry, ranking second in 
average annual block hours per pilot. We also effectively use part-time 
Crewmembers and automate tasks through the use of technology to gain 
efﬁ ciencies. We are cognizant of the competition for productive labor in 
key industry positions. Additionally, new government rules requiring higher 
qualiﬁ cations are predicted to result in potential labor shortages in the 
upcoming years. Through ongoing collaboration with peer-elected frontline 
Crewmembers from our internal major work groups (which we refer to as 
Values Committees), we ensure we have the input necessary to help us 
manage and run the business in the most productive and efﬁ cient way. We 
continue to work closely with our Crewmembers and Values Committees 
to ensure our Crewmembers remain engaged and productive.

10

JETBLUE AIRWAYS CORPORATION - 2012  10K

PART I   

ITEM 1 Business

Culture

We believe one of our competitive strengths is our service-oriented culture. 
Our culture places value upon and stresses the importance of providing 
high quality customer service. We believe our highly productive, engaged 
workforce allows us to keep our costs low and, ultimately, achieve our 
ﬁ nancial goals. Our success depends on our people and their capabilities, 
individually and collectively, delivering the best customer service experience 
while living our ﬁ ve key values of safety, caring, integrity, passion and fun. We 
strive to select, train and maintain a ﬂ exible and diverse workforce of caring, 
passionate, fun and friendly people who want to provide our customers 
with the best experience possible. Further, our historical experience, as 
conﬁ rmed by numerous surveys, reveals customer satisfaction and the 
likelihood of returning customers is highly correlated with and can be 
directly linked to experiences with engaged Crewmembers.

Our ability to continue to hire, retain, and develop people who ﬁ t within 
our Culture and are committed to delivering the JetBlue Experience to 
our customers is a key component to maintaining our valuable brand. Our 
culture is ﬁ rst introduced to all new Crewmembers through a screening 
process and an extensive orientation program which emphasizes the 
importance of customer service, productivity and cost control. We reinforce 
the importance of this culture by providing continuous training for our 
Crewmembers, including technical training, a specialized Captain training 
program unique in the industry, a leadership program, training focused on 
the safety value and front line training for our customer service teams. Our 
emphasis on talent development enables us and our Crewmembers to 
be strategically aligned and has resulted in a high rate of internal growth 
opportunities for our Crewmembers.

None of our Crewmembers are currently unionized. We believe a direct 
relationship between JetBlue Crewmembers and its leaders – not third-party 
representation – is in the best interests of our Crewmembers, customers 
and shareholders. We enter into individual employment agreements with 
each of our Federal Aviation Administration, or FAA, licensed Crewmembers, 
which consist of pilots, dispatchers, technicians and inspectors as well as 

air trafﬁ c controllers. These agreements are intended to drive higher levels of 
engagement and alignment with the Company’s strategy, culture of customer 
service and overall ﬁ nancial success. Each employment agreement is for 
a term of ﬁ ve years and renews for an additional ﬁ ve-year term unless the 
Crewmember is terminated for cause or the Crewmember elects not to 
renew. Pursuant to these agreements, these Crewmembers can only be 
terminated for cause. In the event of a downturn in our business calling 
for a reduction in ﬂ ying and related work hours, we are obligated to pay 
these Crewmembers a guaranteed level of income and to continue their 
beneﬁ ts. In addition, we provide what we believe to be industry-leading 
job protection language in these agreements in the event of a merger or 
acquisition as well as the establishment of a legal defense fund to use in 
connection with seniority integration negotiations.

Our leadership team strives to communicate on a regular basis with all 
JetBlue Crewmembers in order to maintain a direct relationship with and 
keep all Crewmembers informed about news, results and challenges 
affecting the airline. Effective and frequent communication throughout 
the organization is fostered through various means, including email 
messages from our CEO and other senior leaders at least weekly, employee 
engagement surveys, a quarterly digital magazine, active leadership 
participation in new hire orientations and periodic open forum meetings 
across our network, called “pocket sessions,” which are often videotaped 
and posted on our intranet. By soliciting feedback for ways to improve our 
service, teamwork and work environment, our leadership team strives to 
keep Crewmembers engaged, make our business decisions transparent 
and ﬁ nd cost and revenue improvements that are best recognized by 
Crewmembers closest to the activity.

Our full-time equivalent employees at December 31, 2012 consisted of 
2,204 pilots, 2,472 ﬂ ight attendants, 3,550 airport operations personnel, 
541 technicians (whom others refer to as mechanics), 945 reservation 
agents, and 2,741 management and other personnel. At December 31, 
2012, we employed 10,573 full-time and 3,774 part-time employees.

Aircraft Fuel

Aircraft fuel is our largest expense representing nearly 40% of our total operating costs in 2012. The price and availability of aircraft fuel are extremely volatile 
due to global economic and geopolitical factors we can neither control nor accurately predict. We use a third party fuel management service to procure most 
of our fuel. Our historical fuel consumption and costs for the years ended December 31 were:

Gallons consumed (millions)
Total cost (millions)
Average price per gallon
Percent of operating expenses

$
$

2012
563  
1,806   $
3.21   $
39.2%  

2011
525  
1,664   $
3.17   $
39.8%  

2010
486  
1,115  
2.29  
32.4%

Total cost and average price per gallon each include related fuel taxes as 
well as effective fuel hedging gains and losses.

Our approach to fuel price management seeks to provide a form of 
insurance to protect against signiﬁ cant and sharp increases in fuel prices. 
We attempt to do so by entering into a variety of hedging instruments, 
including swaps and collar contracts with underlyings of jet fuel as well 

as crude and heating oil. We also use ﬁ xed forward price agreements, or 
FFPs, which allow us to lock in the price of fuel for speciﬁ ed quantities 
and at speciﬁ ed locations in future periods. At December 31, 2012, of our 
projected 2013 fuel requirements, we had hedged approximately 5% and 
managed approximately 6% with FFPs. In January and February 2013, 
we entered into jet fuel swap and cap agreements covering an additional 
6% of our 2013 projected fuel requirements.

Maintenance

Our FAA-approved maintenance program is administered by our technical 
operations department. Consistent with our core value of safety, we 
use qualiﬁ ed maintenance personnel, ensure they have comprehensive 
training and maintain our aircraft and associated maintenance records in 
accordance with, if not exceeding, FAA regulations.

The maintenance work performed on our ﬂ eet is divided into ﬁ ve general 
categories: modiﬁ cation line, aircraft line maintenance, aircraft heavy 
maintenance, component repairs and power plant maintenance. The 
bulk of line maintenance requirements are handled directly by JetBlue 
technicians and inspectors and consist of daily checks, overnight and 

JETBLUE AIRWAYS CORPORATION - 2012  10K 11

 
 
 
 
PART I   
ITEM 1 Business

weekly checks, “A” checks, diagnostics and routine repairs. All other 
maintenance activity is sub-contracted to qualiﬁ ed maintenance, repair 
and overhaul organizations.

Aircraft heavy maintenance checks consist of a series of more complex 
tasks that take from one to four weeks to accomplish. The typical frequency 
for these events is once every 15 months. We send our aircraft to FAA-
approved Aeroman facilities in El Salvador, Pemco in Tampa, Florida, Timco 
in Lake City, Florida and Embraer Aircraft Maintenance Services in Nashville, 
Tennessee. This work is all performed with oversight by JetBlue personnel.

Component and power plant maintenance, repairs and overhauls on 
equipment such as engines, auxiliary power units, landing gears, pumps and 
avionic computers are performed by a number of different FAA-approved 
repair stations. For example, maintenance of our V2500 series engines 
which power our Airbus A320 aircraft is performed under a 15-year service 
agreement with MTU Maintenance Hannover GmbH of Germany, or MTU. 
MTU is also a manufacturer of many of these engines components. Many 
of our maintenance service agreements are based on a ﬁ xed cost per 
ﬂ ying hour, which can vary based upon the age and other operating factors 
impacting the related component. Required maintenance not covered 
by one of our agreements is performed on a time and materials basis.

LiveTV, LLC

LiveTV, LLC, a wholly-owned subsidiary of JetBlue, provides in-ﬂ ight 
entertainment, voice communication and data connectivity services 
for commercial and general aviation aircraft. LiveTV’s assets include 
certain tangible equipment and interests in systems installed on its 
customers’ aircraft, system components and spare parts in inventory, an 
air-to-ground spectrum license granted by the Federal Communications 
Commission, a network of approximately 80 ground stations across the 
continental U.S., and rights to certain patents and intellectual property. 
LiveTV’s major competitors in the in-ﬂ ight entertainment systems market 
include Rockwell Collins, Thales Avionics and Panasonic Avionics. Only 
Panasonic is currently providing in-seat live television. In the voice and 
data communication services market, LiveTV’s primary competitors are 
GoGo, Row 44, Panasonic, OnAir and Aeromobile.

Government Regulation

General. We are subject to regulation by the agencies of the federal 
government, including, but not limited to, the DOT, the FAA, the 
Transportation Security Administration, or TSA, and other governmental 
agencies. The DOT primarily regulates economic issues affecting air 
service such as certiﬁ cation and ﬁ tness, insurance, consumer protection 
and competitive practices. The DOT has the authority to investigate and 
institute proceedings to enforce its economic regulations and may assess 
civil penalties, revoke operating authority and seek criminal sanctions. In 
February 2000, the DOT granted us a certiﬁ cate of public convenience 
and necessity authorizing us to engage in air transportation within the 
United States, its territories and possessions.

The FAA primarily regulates ﬂ ight operations and, in particular, matters 
affecting air safety such as airworthiness requirements for aircraft, the 
licensing of pilots, mechanics and dispatchers, and the certiﬁ cation of 
ﬂ ight attendants. The FAA requires each airline to obtain an operating 
certiﬁ cate authorizing the airline to operate at speciﬁ c airports using speciﬁ ed 
equipment. We have and maintain FAA certiﬁ cates of airworthiness for 
all of our aircraft and have the necessary FAA authority to ﬂ y to all of the 
cities we currently serve.

Like all U.S. certiﬁ ed carriers, we cannot ﬂ y to new destinations without 
the prior authorization of the FAA. The FAA has the authority to modify, 
suspend temporarily or revoke permanently our authority to provide air 
transportation or that of our licensed personnel, after providing notice 
and a hearing, for failure to comply with FAA regulations. The FAA can 
assess civil penalties for such failures or institute proceedings for the 
imposition and collection of monetary ﬁ nes for the violation of certain FAA 
regulations. The FAA can revoke our authority to provide air transportation 
on an emergency basis, without providing notice and a hearing, where 
signiﬁ cant safety issues are involved. The FAA monitors our compliance 
with maintenance, ﬂ ight operations and safety regulations, maintains onsite 
representatives and performs frequent spot inspections of our aircraft, 
employees and records.

12

JETBLUE AIRWAYS CORPORATION - 2012  10K

LiveTV has agreements with six other domestic and international commercial 
airlines for the sale and installation of certain hardware, programming and 
maintenance of its live in-seat satellite television and certain other products 
and services. LiveTV also has general aviation customers to which it 
supplies voice and data communication services. LiveTV continues to 
pursue additional customers and related product enhancements. In 2011, 
JetBlue entered into an agreement with ViaSat Inc. for in-ﬂ ight broadband 
connectivity. LiveTV is partnering with ViaSat Inc. to develop this in-ﬂ ight 
broadband connectivity for JetBlue and will help us to introduce it on 
our aircraft beginning in 2013. LiveTV is also working with ViaSat Inc. to 
support in-ﬂ ight connectivity for other airlines in the future.

The FAA also has the authority to issue airworthiness directives and other 
mandatory orders relating to, among other things, inspection of aircraft 
and engines, ﬁ re retardant and smoke detection devices, collision and 
windshear avoidance systems, noise abatement and the mandatory removal 
and replacement of aircraft parts that have failed or may fail in the future.

The TSA operates under the Department of Homeland Security and is 
responsible for all civil aviation security, including passenger and baggage 
screening, cargo security measures, airport security, assessment and 
distribution of intelligence, and security research and development. 
The TSA also has law enforcement powers and the authority to issue 
regulations, including in cases of national emergency, without a notice 
or comment period.

In December 2009, the DOT issued a rule, which among other things, 
requires carriers not to permit domestic ﬂ ights to remain on the tarmac 
for more than three hours (the “Tarmac Delay regulations”). The rule 
became effective in April 2010. Violators can be ﬁ ned up to a maximum 
of $27,500 per passenger. The new rule also introduced requirements to 
disclose on-time performance and delay statistics for certain ﬂ ights. This 
new rule may have adverse consequences on our business and our results 
of operations. In October 2011, several airport and navigational system 
outages combined with a severe winter storm impacted the northeast 
which resulted in numerous ﬂ ight diversions, by us and other domestic and 
international carriers, to Hartford, CT’s Bradley International Airport. Due to 
weather, ﬁ eld and airport terminal conditions, ﬁ ve of our six diverted ﬂ ights 
were held on the tarmac for times which exceeded the DOT’s established 
tarmac delay limits. As a result, the DOT is formally investigating these 
incidents and we may be subject to a civil penalty.

As part of an additional set of consumer protection rules issued by the DOT, 
as of January 2012, the DOT requires any advertised price for airfare or 
a tour package including airfare (e.g., a hotel/air vacation package) to be 
the total price to be paid by the customer, including all government taxes 
and fees. The new policy applies to all U.S. and foreign air carriers and 
ticket agents that advertise in the U.S. (including via the internet). Under the 

PART I   

ITEM 1 Business

new rule, carriers and ticket agents are permitted to include a statement 
informing customers of the base fare versus government taxes and fees, 
but such a break-down cannot be more prominent than the advertised total 
price. Failure to comply could result in ﬁ nes and penalties by the DOT as 
well as reputational damage, particularly in light of the substantial media 
coverage on the new rule and the perception that total price advertising is 
in the best interest of the customer. The DOT is reviewing whether certain 
practices and advertising programs by JetBlue since January 2012 are in 
compliance with the new rule and applicable guidance. 

We believe we are operating in material compliance with DOT, FAA, TSA 
and applicable international and foreign regulations and hold all necessary 
operating and airworthiness authorizations and certiﬁ cates. Should any of 
these authorizations or certiﬁ cates be modiﬁ ed, suspended or revoked, 
our business could be materially adversely affected.

We are also subject to state and local laws and regulations in a number 
of states in which we operate.

The airline industry is one of the most heavily taxed in the U.S., with taxes 
and fees accounting for approximately 16% of the total fare charged to a 
customer. Airlines are obligated to fund all of these taxes and fees regardless 
of their ability to pass these charges on to the customer. Additionally, if 
the TSA were to change the way the Aviation Security Infrastructure Fee 
is assessed, our security costs could be higher.

Airport Access. Historically, JFK, LaGuardia Airport, or LaGuardia, and 
Ronald Reagan Washington National Airport in Washington D.C., or 
Reagan National, were slot-controlled airports subject to the FAA’s “High 
Density Rule,” which rule limited the air trafﬁ c in and out of the airport 
during speciﬁ c times. For JFK and LaGuardia, those rules expired in 2007. 
Following a signiﬁ cant increase in air trafﬁ c in and out of these airports, 
in 2008, the FAA reinstated temporary rules limiting operations for JFK, 
LaGuardia and Newark, N.J.’s Liberty International Airport, or Newark. 
These temporary rules continue in effect today. Due to airspace congestion 
in the northeast, especially in the New York metropolitan region, and during 
inclement weather, delays at JFK, LaGuardia and Newark remain among 
the highest in the nation.

At Reagan National where we increased our presence in 2012 and now 
operate 18 daily departures to ﬁ ve destinations, the High Density Rule 
remains in place. We operate with slots permanently assigned to us as 
well as with leased slots.

Westchester County Airport in White Plains, NY is also a slot-controlled 
airport, although unlike JFK, LaGuardia, Newark and Reagan National, it 
is governed by local, not federal regulations. We have 26 slots available 
for use and currently operate 13 weekday round trip ﬂ ights from White 
Plains, NY to six destinations. 

any violations which we pay quarterly to the Long Beach Public Library 
Foundation. The payment is based on the number of infractions in the 
preceding quarter. This local ordinance has not had, and we believe it will 
not have, a negative effect on our operations.

We use our “Jetting to Green” program on www.jetblue.com to educate 
our customers and Crewmembers about environmental issues and to 
inform the public about our environmental protection initiatives. Our most 
recent corporate sustainability report for the years 2010-2011 is available 
on our website and addresses our environmental programs, including 
those aimed at curbing greenhouse emissions, our conservation efforts 
and our social responsibility efforts.

Foreign Operations. International air transportation is subject to extensive 
government regulation. The availability of international routes to U.S. carriers 
is regulated by treaties and related agreements between the United States 
and foreign governments. We currently operate international service to 
the Bahamas, the Dominican Republic, Bermuda, Aruba, the Netherlands 
Antilles, Mexico, Colombia, Costa Rica, Jamaica, Barbados, Saint Lucia, 
the Turks and Caicos Islands and the Cayman Islands. To the extent we 
seek to provide air transportation to additional international markets in the 
future, we would be required to obtain necessary authority from the DOT 
and the applicable foreign government. 

Foreign Ownership. Under federal law and the DOT regulations, we must 
be controlled by United States citizens. In this regard, our president and at 
least two-thirds of our board of directors must be United States citizens 
and not more than 24.99% of our outstanding common stock may be 
voted by non-U.S. citizens. We believe we are currently in compliance 
with these ownership provisions.

Other Regulations. All air carriers are also subject to certain provisions 
of the Communications Act of 1934 because of their extensive use of 
radio and other communication facilities, and are required to obtain an 
aeronautical radio license from the FCC. To the extent we are subject to 
FCC requirements, we will take all necessary steps to comply with those 
requirements. Our labor relations are covered under Title II of the Railway 
Labor Act of 1926 and are subject to the jurisdiction of the National Mediation 
Board. In addition, during periods of fuel scarcity, access to aircraft fuel 
may be subject to federal allocation regulations. We are also subject to 
state and local laws and regulations at locations where we operate and 
the regulations of various local authorities operating the airports we serve.

Civil Reserve Air Fleet. We are a participant in the Civil Reserve Air 
Fleet Program, which permits the United States Department of Defense 
to utilize our aircraft during national emergencies when the need for 
military airlift exceeds the capability of military aircraft. By participating in 
this program, we are eligible to bid on and be awarded peacetime airlift 
contracts with the military.

Long Beach (California) Municipal Airport is a slot-controlled airport as a 
result of a 1995 court settlement. We have 32 slots available for use and 
currently operate them to 12 domestic cities from coast to coast.

Insurance

Environmental. We are subject to various federal, state and local laws 
relating to the protection of the environment, including the discharge or 
disposal of materials and chemicals and the regulation of aircraft noise 
administered by numerous state and federal agencies.

The Airport Noise and Capacity Act of 1990 recognizes the right of airport 
operators with special noise problems to implement local noise abatement 
procedures as long as those procedures do not interfere unreasonably 
with the interstate and foreign commerce of the national air transportation 
system. Certain airports, including San Diego and Long Beach, California, 
have established restrictions to limit noise which can include limits on the 
number of hourly or daily operations and the time of such operations. 
These limitations serve to protect the local noise-sensitive communities 
surrounding the airport. Our scheduled ﬂ ights at Long Beach and San Diego 
are in compliance with the noise curfew limits but when we experience 
irregular operations, on occasion, we may violate these curfews. We have 
agreed to a payment structure with the Long Beach City Prosecutor for 

We carry insurance of types customary in the airline industry and at amounts 
deemed adequate to protect us and our property and to comply both 
with federal regulations and certain of our credit and lease agreements. 
As a result of the terrorist attacks of September 11, 2001 (the Terrorist 
Attacks), aviation insurers signiﬁ cantly reduced the amount of insurance 
coverage available to commercial air carriers for liability to persons other 
than employees or passengers for claims resulting from acts of terrorism, 
war or similar events (war-risk coverage). At the same time, these insurers 
signiﬁ cantly increased the premiums for aviation insurance in general. The 
U.S. government has agreed to provide commercial war-risk insurance 
for U.S. based airlines, currently through September 30, 2013, covering 
losses to employees, passengers, third parties and aircraft. We currently 
have such coverage in addition to our overall hull and liability insurance 
coverage. If the U.S. government were to cease providing such insurance 
in whole or in part, it is likely we would be able to obtain comparable 
coverage in the commercial market, but we would likely incur higher 
premiums and more restrictive terms.

JETBLUE AIRWAYS CORPORATION - 2012  10K 13

PART I   
ITEM 1A Risk Factors

Iran Sanctions Disclosure

Pursuant to Section 13(r) of the Securities Exchange Act of 1934, or the 
Exchange Act, if during 2012, JetBlue or any of its afﬁ liates have engaged 
in certain transactions with Iran or with persons or entities designated under 
certain executive orders, JetBlue would be required to disclose information 
regarding such transactions in our Annual Report as required under Section 
219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, or 
ITRA. During 2012, JetBlue did not engage in any transactions with Iran 
or with persons or entities related to Iran. 

Deutsche Lufthansa AG, or Lufthansa, is a stockholder of approximately 
17% of JetBlue’s outstanding shares of common stock and has two 
representatives on our Board of Directors. Accordingly, it may be deemed 
an “afﬁ liate” of JetBlue, as that term is deﬁ ned in Exchange Act Rule 12b-2. 

In response to our inquiries, Lufthansa informed us that it does not engage 
in transactions that would be disclosable under ITRA Section 219. However, 
Lufthansa informed us that it does provide air transportation services from 
Frankfurt, Germany to Tehran, Iran pursuant to Air Transport Agreements 
between the respective governments. Accordingly, Lufthansa may have 
agreements in place to support such air transportation services with the 
appropriate agencies or entities, such as landing or overﬂ ight fees, handling 
fees or technical/refueling fees. In addition, there may be additional civil 
aviation related dealings with Iran Air as part of typical airline to airline 
interactions. In response to our inquiry, Lufthansa did not specify the 
total revenue it receives in connection with the foregoing transactions, but 
conﬁ rmed the transactions are not prohibited under any applicable laws. 

ITEM 1A. Risk Factors

Risks Related to JetBlue

We operate in an extremely competitive industry.

The domestic airline industry is characterized by low proﬁ t margins, high 
ﬁ xed costs and signiﬁ cant price competition in an increasingly concentrated 
competitive ﬁ eld. We currently compete with other airlines on all of our routes. 
Most of our competitors are larger and have greater ﬁ nancial resources 
and name recognition than we do. Following our entry into new markets 
or expansion of existing markets, some of our competitors have chosen 
to add service or engage in extensive price competition. Unanticipated 
shortfalls in expected revenues as a result of price competition or in the 
number of passengers carried would negatively impact our ﬁ nancial results 
and harm our business. The extremely competitive nature of the airline 
industry could prevent us from attaining the level of passenger trafﬁ c or 
maintaining the level of fares required to maintain proﬁ table operations 
in new and existing markets and could impede our proﬁ table growth 
strategy, which would harm our business. Additionally, if a traditional 
network airline were to fully develop a low cost structure, or if we were to 
experience increased competition from low cost carriers, our business 
could be materially adversely affected.

Our business is highly dependent on the availability of fuel and subject 
to price volatility.

Our results of operations are heavily impacted by the price and availability 
of fuel. Fuel costs comprise a substantial portion of our total operating 
expenses and are our single largest operating expense. Historically, fuel 
costs have been subject to wide price ﬂ uctuations based on geopolitical 
factors and supply and demand. The availability of fuel is not only dependent 
on crude oil but also on reﬁ ning capacity. When even a small amount of 
the domestic or global oil reﬁ ning capacity becomes unavailable, supply 
shortages can result for extended periods of time. The availability of 
fuel is also affected by demand for home heating oil, gasoline and other 
petroleum products, as well as crude oil reserves, dependence on foreign 
imports of crude oil and potential hostilities in oil producing areas of the 
world. Because of the effects of these factors on the price and availability 
of fuel, the cost and future availability of fuel cannot be predicted with 
any degree of certainty.

Our aircraft fuel purchase agreements do not protect us against price 
increases or guarantee the availability of fuel. Additionally, some of our 
competitors may have more leverage than we do in obtaining fuel. We 
have and may continue to enter into a variety of option contracts and swap 
agreements for crude oil, heating oil, and jet fuel to partially protect against 

14

JETBLUE AIRWAYS CORPORATION - 2012  10K

signiﬁ cant increases in fuel prices; however, such contracts and agreements 
do not completely protect us against price volatility, are limited in volume 
and duration, and can be less effective during volatile market conditions 
and may carry counterparty risk. Under the fuel hedge contracts we may 
enter from time to time, counterparties to those contracts may require 
us to fund the margin associated with any loss position on the contracts 
if the price of crude oils falls below speciﬁ ed benchmarks. Meeting our 
obligations to fund these margin calls could adversely affect our liquidity.

Due to the competitive nature of the domestic airline industry, at times we 
have not been able to adequately increase our fares to offset the increases 
in fuel prices nor may we be able to do so in the future. Future fuel price 
increases, continued high fuel price volatility or fuel supply shortages may 
result in a curtailment of scheduled services and could have a material 
adverse effect on our ﬁ nancial condition and results of operations.

We have a signiﬁ cant amount of ﬁ xed obligations and we will incur 
signiﬁ cantly more ﬁ xed obligations, which could harm our ability to 
service our current or satisfy future ﬁ xed obligations.

As of December 31, 2012, our debt of $2.85 billion accounted for 60% of 
our total capitalization. In addition to long-term debt, we have a signiﬁ cant 
amount of other ﬁ xed obligations under leases related to our aircraft, airport 
terminal space, other airport facilities and ofﬁ ce space. As of December 31, 
2012, future minimum payments under noncancelable leases and other 
ﬁ nancing obligations were approximately $1.02 billion for 2013 through 
2017 and an aggregate of $1.33 billion for the years thereafter. We have 
also constructed, and in October 2008 began operating, a new terminal 
at JFK under a 30-year lease with the Port Authority of New York and 
New Jersey, or PANYNJ. The minimum payments under this lease are 
being accounted for as a ﬁ nancing obligation and have been included in 
the future minimum payment totals above.

As of December 31, 2012, we had commitments of approximately 
$5.00  billion to purchase 115 additional aircraft and other ﬂ ight equipment 
through 2021, including estimated amounts for contractual price escalations. 
We may incur additional debt and other ﬁ xed obligations as we take 
delivery of new aircraft and other equipment and continue to expand into 
new markets. In an effort to limit the incurrence of signiﬁ cant additional 
debt, we may seek to defer some of our scheduled deliveries, sell or lease 
aircraft to others, or pay cash for new aircraft, to the extent necessary or 
possible. The amount of our existing debt, and other ﬁ xed obligations, and 
potential increases in the amount of our debt and other ﬁ xed obligations 

PART I   

ITEM 1A Risk Factors

could have important consequences to investors and could require a 
substantial portion of cash ﬂ ows from operations for debt service payments, 
thereby reducing the availability of our cash ﬂ ow to fund working capital, 
capital expenditures and other general corporate purposes.

Our high level of debt and other ﬁ xed obligations could:

 • impact our ability to obtain additional ﬁ nancing to support capital expansion 
plans and for working capital and other purposes on acceptable terms 
or at all;

 • divert substantial cash ﬂ ow from our operations and expansion plans in 

order to service our ﬁ xed obligations;

 • require us to incur signiﬁ cantly more interest expense than we currently 
do if rates were to increase, since approximately 40% of our debt has 
ﬂ oating interest rates; and

 • place us at a possible competitive disadvantage compared to less 
leveraged competitors and competitors with better access to capital 
resources or more favorable terms.

Our ability to make scheduled payments on our debt and other ﬁ xed 
obligations will depend on our future operating performance and cash ﬂ ows, 
which in turn will depend on prevailing economic and political conditions 
and ﬁ nancial, competitive, regulatory, business and other factors, many 
of which are beyond our control. We are principally dependent upon 
our operating cash ﬂ ows and access to the capital markets to fund our 
operations and to make scheduled payments on debt and other ﬁ xed 
obligations. We cannot assure you we will be able to generate sufﬁ cient 
cash ﬂ ows from our operations or from capital market activities to pay 
our debt and other ﬁ xed obligations as they become due; if we fail to do 
so our business could be harmed. If we are unable to make payments on 
our debt and other ﬁ xed obligations, we could be forced to renegotiate 
those obligations or seek to obtain additional equity or other forms of 
additional ﬁ nancing.

Our substantial indebtedness may limit our ability to incur additional 
debt to obtain future ﬁ nancing needs.

We typically ﬁ nance our aircraft through either secured debt or lease 
ﬁ nancing. The impact on ﬁ nancial institutions from the global credit and 
liquidity crisis and continuing economic malaise may adversely affect 
the availability and cost of credit to JetBlue as well as to prospective 
purchasers of our aircraft we undertake to sell in the future, including 
ﬁ nancing commitments we have already obtained for purchases of new 
aircraft. To the extent we ﬁ nance our activities with additional debt, we 
may become subject to ﬁ nancial and other covenants that may restrict 
our ability to pursue our strategy or otherwise constrain our operations.

Our maintenance costs will increase as our ﬂ eet ages.

Our maintenance costs will increase as our ﬂ eet ages. In the past, we 
have incurred lower maintenance expenses because most of the parts 
on our aircraft were under multi-year warranties; these warranties have 
for the most part expired. If any existing maintenance provider with whom 
we have a long-term “power by the hour” agreement fails to perform or 
honor such agreements, we will incur higher interim maintenance costs 
until we negotiate new agreements.

Furthermore, as our ﬂ eet ages, we expect our ﬂ eet will require various 
modiﬁ cations over the next several years to ensure its continued efﬁ ciency, 
modernization, brand consistency and safety. Our plans to equip our 
A320 aircraft with sharklets, for example, will, in some cases, require 
signiﬁ cant modiﬁ cation time. These ﬂ eet modiﬁ cations will require signiﬁ cant 
investment over the several years, including taking aircraft out of service 
for several weeks at a time. 

Our salaries, wages and beneﬁ ts costs will increase as our workforce ages. 

As our employees’ tenure with JetBlue matures, our salaries, wages 
and beneﬁ ts costs will increase. Our pilot pay structure, for example, is 
based on an industry derived average and to the extent our competitors 

continue consolidating and/or begin raising their pilot salaries in the face 
of a possible pilot shortage, we may have to address increased salary 
cost pressure to retain our pilots in an environment where our capacity 
is also forecast to continue to grow. As our work force ages, we expect 
our medical and related beneﬁ ts to increase as well, despite an increased 
corporate focus on crewmember wellness. 

If we fail to successfully implement our strategy, our business could 
be harmed.

We have grown, and expect to continue to grow our business whenever 
practicable, by modifying the frequency of ﬂ ights to markets we currently 
serve, expanding the number of markets we serve and increasing ﬂ ight 
connection opportunities. We have modiﬁ ed our rate of growth several 
times over the past few years due to higher fuel prices, the competitive 
pricing environment and other cost increases, by deferring some of our 
scheduled deliveries of new aircraft, selling some used aircraft, terminating 
our leases for some of our aircraft, and leasing aircraft to other operators. 
A continuation of the economic downturn may cause us to further reduce 
our future growth plans from previously announced levels.

To the extent we continue to grow our business, opening new markets 
requires us to commit a substantial amount of resources even before the 
new services commence. Expansion is also dependent upon our ability to 
maintain a safe and secure operation and requires additional personnel, 
equipment and facilities. An inability to hire and retain personnel, timely 
secure the required equipment and facilities in a cost-effective manner, 
efﬁ ciently operate our expanded facilities, or obtain the necessary regulatory 
approvals may adversely affect our ability to achieve our growth strategy, 
which could harm our business. In addition, our competitors often add 
service, reduce their fares and/or offer special promotions following 
our entry into a new market. We cannot assure you we will be able to 
proﬁ tably expand our existing markets or establish new markets or be 
able to adequately temper our growth in a cost effective manner through 
additional deferrals or selling or leasing aircraft; if we fail to do so, our 
business could be harmed.

There are risks associated with our presence in some of our international 
emerging markets, including political or economic instability and failure 
to adequately comply with existing legal requirements.

Expansion to new international emerging markets may have risks due to 
factors speciﬁ c to those markets. Emerging markets are countries which 
have less developed economies and are vulnerable to economic and political 
problems, such as signiﬁ cant ﬂ uctuations in gross domestic product, interest 
and currency exchange rates, civil disturbances, government instability, 
nationalization and expropriation of private assets, trafﬁ cking and the 
imposition of taxes or other charges by governments. The occurrence of 
any of these events in markets served by us and the resulting instability 
may adversely affect our business.

We have expanded and, if market and other conditions warrant it, may 
continue to expand our service to countries in the Caribbean and Latin 
America, some of which have less developed legal systems, ﬁ nancial 
markets, and business and political environments than the United States, 
and therefore present greater political, legal, economic and operational 
risks. We emphasize legal compliance and have implemented and continue 
to implement and refresh policies, procedures and certain ongoing training 
of employees with regard to business ethics, anti-corruption policies and 
many key legal requirements; however, there can be no assurance our 
employees will adhere to our code of business ethics, anti-corruption 
policies, other Company policies, or other legal requirements. If we fail 
to enforce our policies and procedures properly or maintain adequate 
record-keeping and internal accounting practices to accurately record our 
transactions, we may be subject to sanctions. In the event we believe or 
have reason to believe our employees have or may have violated applicable 
laws or regulations, we may be subject to investigation costs, potential 
penalties and other related costs which in turn could negatively affect our 
reputation, and our results of operations and cash ﬂ ow.

JETBLUE AIRWAYS CORPORATION - 2012  10K 15

PART I   
ITEM 1A Risk Factors

We may be subject to risks through the commitments and business of 
LiveTV, our wholly-owned subsidiary.

We rely heavily on automated systems to operate our business; any 
failure of these systems could harm our business.

LiveTV has agreements to provide in-ﬂ ight entertainment products and 
services with six other airlines. At December 31, 2012, LiveTV services were 
available on 439 aircraft under these agreements, with ﬁ rm commitments 
for 219 additional aircraft through 2015 and with options for 52 additional 
installations through 2014. Performance under these agreements requires 
LiveTV to hire, train and retain qualiﬁ ed employees, obtain component 
parts unique to its systems and services from their suppliers and secure 
facilities necessary to perform installations and maintenance on those 
systems. Should LiveTV be unable to satisfy its commitments under these 
third party contracts, our business could be harmed.

We may be subject to unionization, work stoppages, slowdowns or 
increased labor costs; recent changes to the labor laws may make 
unionization easier to achieve.

Our business is labor intensive and, unlike most other airlines, we have 
a non-union workforce. The unionization of any of our employees could 
result in demands that may increase our operating expenses and adversely 
affect our ﬁ nancial condition and results of operations. Any of the different 
crafts or classes of our employees could unionize at any time, which would 
require us to negotiate in good faith with the employee group’s certiﬁ ed 
representative concerning a collective bargaining agreement. In 2010, 
the National Mediation Board, or NMB, changed its election procedures 
to permit a majority of those voting to elect to unionize (from a majority 
of those in the craft or class). These rule changes fundamentally alter the 
manner in which labor groups have been able to organize in our industry 
since the inception of the Railway Labor Act. Ultimately, if we and a newly 
elected representative were unable to reach agreement on the terms of a 
collective bargaining agreement and all of the dispute resolution processes 
of the Railway Labor Act were exhausted, we could be subject to work 
stoppages. In addition, we may be subject to other disruptions by organized 
labor groups protesting our non-union status. Any of these events would 
be disruptive to our operations and could harm our business.

Our high aircraft utilization rate helps us keep our costs low, but also 
makes us vulnerable to delays and cancellations in our operating regions; 
such delays and cancellations could reduce our proﬁ tability.

We maintain a high daily aircraft utilization rate (the amount of time our 
aircraft spend in the air carrying passengers). High daily aircraft utilization 
allows us to generate more revenue from our aircraft and is achieved in 
part by reducing turnaround times at airports so we can ﬂ y more hours on 
average in a day. Aircraft utilization is reduced by delays and cancellations 
from various factors, many of which are beyond our control, including 
adverse weather conditions, security requirements, air trafﬁ c congestion and 
unscheduled maintenance. The majority of our operations are concentrated 
in the Northeast and Florida, which are particularly vulnerable to weather 
and congestion delays. Reduced aircraft utilization may limit our ability to 
achieve and maintain proﬁ tability as well as lead to customer dissatisfaction.

Our business is highly dependent on the New York metropolitan market 
and increases in competition or congestion or a reduction in demand 
for air travel in this market, or governmental reduction of our operating 
capacity at JFK, would harm our business.

We are highly dependent on the New York metropolitan market where we 
maintain a large presence with approximately one-half of our daily ﬂ ights 
having JFK, LaGuardia, Newark, Westchester County Airport or Newburgh’s 
Stewart International Airport as either their origin or destination. We have 
experienced an increase in ﬂ ight delays and cancellations at JFK due to airport 
congestion which has adversely affected our operating performance and 
results of operations. Our business could be further harmed by an increase 
in the amount of direct competition we face in the New York metropolitan 
market or by continued or increased congestion, delays or cancellations. Our 
business would also be harmed by any circumstances causing a reduction 
in demand for air transportation in the New York metropolitan area, such as 
adverse changes in local economic conditions, negative public perception 
of New York City, terrorist attacks or signiﬁ cant price increases linked to 
increases in airport access costs and fees imposed on passengers.

16

JETBLUE AIRWAYS CORPORATION - 2012  10K

We are dependent on automated systems and technology to operate our 
business, enhance customer service and achieve low operating costs. 
The performance and reliability of our automated systems and data center 
is critical to our ability to operate our business and compete effectively. 
These systems include our computerized airline reservation system, ﬂ ight 
operations system, telecommunications systems, website, maintenance 
systems, check-in kiosks, in-ﬂ ight entertainment systems and our primary 
and redundant data centers. Our website and reservation system must be 
able to accommodate a high volume of trafﬁ c and deliver important ﬂ ight 
information. These systems require upgrades or replacement periodically, 
which involve implementation and other operational risks. Our business 
may be harmed if we fail to operate, replace or upgrade our systems or 
data center infrastructure successfully.

We rely on the third party providers of our current automated systems 
and data center infrastructure for technical support. If the current provider 
were to fail to adequately provide technical support for any one of our key 
existing systems or if new or updated components were not integrated 
smoothly, we could experience service disruptions, which, if they were to 
occur, could result in the loss of important data, increase our expenses, 
decrease our revenues and generally harm our business and reputation. 
Furthermore, our automated systems cannot be completely protected 
against events beyond our control, including natural disasters, computer 
viruses, other security breaches, or telecommunications failures. Substantial 
or sustained system failures could impact customer service and result in 
our customers purchasing tickets from other airlines. We have implemented 
security measures and change control procedures and have disaster 
recovery plans as well as requiring our third party providers to have 
disaster recovery plans; however, we cannot assure you these measures 
are adequate to prevent disruptions, which, if they were to occur, could 
result in the loss of important data, increase our expenses, decrease our 
revenues and generally harm our business and reputation.

Our reputation and business may be harmed and we may be subject to 
legal claims if there is loss, unlawful disclosure or misappropriation of, or 
unsanctioned access to, our customers’, employees’, business partners’ 
or our own information or other breaches of our information security.

We make extensive use of online services and centralized data processing, 
including through third party service providers. The secure maintenance 
and transmission of customer and employee information is a critical 
element of our operations. Our information technology and other systems 
maintain and transmit customer information, or those of service providers 
or business partners, may be compromised by a malicious third party 
penetration of our network security, or of a third party service provider 
or business partner, or impacted by deliberate or inadvertent actions or 
inactions by our employees, or those of a third party service provider or 
business partner. As a result, personal information may be lost, disclosed, 
accessed or taken without consent.

We transmit conﬁ dential credit card information by way of secure private 
retail networks and rely on encryption and authentication technology licensed 
from third parties to provide the security and authentication necessary to 
effect secure transmission and storage of conﬁ dential information, such 
as customer credit card information. The Company has made signiﬁ cant 
efforts to secure its computer network. If any compromise of our security 
or computer network were to occur, it could have a material adverse effect 
on the reputation, business, operating results and ﬁ nancial condition of 
the Company, and could result in a loss of customers. Additionally, any 
material failure by the Company to achieve or maintain compliance with 
the Payment Card Industry, or PCI, security requirements or rectify a 
security issue may result in ﬁ nes and the imposition of restrictions on the 
Company’s ability to accept credit cards as a form of payment.

Any such loss, disclosure or misappropriation of, or access to, customers’, 
employees’ or business partners’ information or other breach of our 
information security can result in legal claims or legal proceedings, including 
regulatory investigations and actions, may have a negative impact on our 
reputation and may materially adversely affect our business, operating 
results and ﬁ nancial condition. Furthermore, the loss, disclosure or 
misappropriation of our business information may materially adversely 
affect our business, operating results and ﬁ nancial condition.

Our liquidity could be adversely impacted in the event one or more of our 
credit card processors were to impose material reserve requirements 
for payments due to us from credit card transactions.

We currently have agreements with organizations that process credit card 
transactions arising from purchases of air travel tickets by our customers. 
Credit card processors have ﬁ nancial risk associated with tickets purchased 
for travel which can occur several weeks after the purchase. Our credit 
card processing agreements provide for reserves to be deposited with the 
processor in certain circumstances. We do not currently have reserves 
posted for our credit card processors. If circumstances were to occur 
requiring us to deposit reserves, the negative impact on our liquidity 
could be signiﬁ cant which could materially adversely affect our business.

If we are unable to attract and retain qualiﬁ ed personnel or fail to maintain 
our company culture, our business could be harmed.

We compete against the other major U.S. airlines for pilots, mechanics and 
other skilled labor; some of them offer wage and beneﬁ t packages exceeding 
ours. As more pilots in the industry approach mandatory retirement age, the 
U.S. airline industry may be affected by a pilot shortage, to some extent. 
We may be required to increase wages and/or beneﬁ ts in order to attract 
and retain qualiﬁ ed personnel or risk considerable employee turnover. If 
we are unable to hire, train and retain qualiﬁ ed employees, our business 
could be harmed and we may be unable to implement our growth plans.

In addition, as we hire more people and grow, we believe it may be increasingly 
challenging to continue to hire people who will maintain our company culture. 
One of our competitive strengths is our service-oriented company culture 
that emphasizes friendly, helpful, team-oriented and customer-focused 
employees. Our company culture is important to providing high quality 
customer service and having a productive workforce in order to help keep 
our costs low. As we continue to grow, we may be unable to identify, hire 
or retain enough people who meet the above criteria, including those in 
management or other key positions. Our company culture could otherwise 
be adversely affected by our growing operations and geographic diversity. 
If we fail to maintain the strength of our company culture, our competitive 
ability and our business may be harmed.

Our results of operations ﬂ uctuate due to seasonality and other factors.

We expect our quarterly operating results to ﬂ uctuate due to seasonality 
including high vacation and leisure demand occurring on the Florida 
routes between October and April and on our western routes during the 
summer. Actions of our competitors may also contribute to ﬂ uctuations 
in our results. We are more susceptible to adverse weather conditions, 
including snow storms and hurricanes, as a result of our operations being 
concentrated on the East Coast, than some of our competitors. As we 
enter new markets we could be subject to additional seasonal variations 
along with any competitive responses to our entry by other airlines. Price 
changes in aircraft fuel as well as the timing and amount of maintenance 
and advertising expenditures also impact our operations. As a result of 
these factors, quarter-to-quarter comparisons of our operating results 
may not be a good indicator of our future performance. In addition, it is 
possible in any future period our operating results could be below the 
expectations of investors and any published reports or analyses regarding 
JetBlue. In such an event, the price of our common stock could decline, 
perhaps substantially.

PART I   

ITEM 1A Risk Factors

We are subject to the risks of having a limited number of suppliers for 
our aircraft, engines and a key component of our in-ﬂ ight entertainment 
system.

Our current dependence on two types of aircraft and engines for all of 
our ﬂ ights makes us vulnerable to signiﬁ cant problems associated with 
the Airbus A320 aircraft or the IAE International Aero Engines V2527-A5 
engine and the EMBRAER 190 aircraft or the General Electric Engines CF-
34-10 engine, including design defects, mechanical problems, contractual 
performance by the manufacturers, or adverse perception by the public 
would result in customer avoidance or in actions by the FAA resulting in 
an inability to operate our aircraft. Carriers operating a more diversiﬁ ed 
ﬂ eet are better positioned than we are to manage such events.

One of the unique features of our ﬂ eet is every seat in each of our aircraft 
is equipped with free in-ﬂ ight entertainment including DirecTV®. An 
integral component of the system is the antenna, which is supplied to 
us by KVH Industries Inc, or KVH. If KVH were to stop supplying us with 
its antennas for any reason, we would have to incur signiﬁ cant costs to 
procure an alternate supplier.

Our reputation and ﬁ nancial results could be harmed in the event of an 
accident or incident involving our aircraft.

An accident or incident involving one of our aircraft, or an aircraft containing 
LiveTV equipment, could involve signiﬁ cant potential claims of injured 
passengers or others in addition to repair or replacement of a damaged 
aircraft and its consequential temporary or permanent loss from service. 
We are required by the DOT to carry liability insurance. Although we 
believe we currently maintain liability insurance in amounts and of the type 
generally consistent with industry practice, the amount of such coverage 
may not be adequate and we may be forced to bear substantial losses 
from an accident. Substantial claims resulting from an accident in excess 
of our related insurance coverage would harm our business and ﬁ nancial 
results. Moreover, any aircraft accident or incident, even if fully insured, 
could cause a public perception we are less safe or reliable than other 
airlines which would harm our business.

An ownership change could limit our ability to use our net operation 
loss carryforwards.

As of December 31, 2012, we had approximately $371 million of federal 
net operating loss carryforwards for U.S. income tax purposes that begin 
to expire in 2025. Section 382 of the Internal Revenue Code imposes 
limitation on a corporation’s ability to use its net operating loss carryforwards 
if it experiences an “ownership change”. Similar rules and limitations may 
apply for state income tax purposes. In the event an “ownership change” 
were to occur in the future, our ability to utilize our net operating losses 
could be limited.

Our business depends on our strong reputation and the value of the 
JetBlue brand.

The JetBlue brand name symbolizes high-quality friendly customer 
service, innovation, fun, and a pleasant travel experience. JetBlue is a 
widely recognized and respected global brand; the JetBlue brand is one 
of our most important and valuable assets. The JetBlue brand name and 
our corporate reputation are powerful sales and marketing tools and we 
devote signiﬁ cant resources to promoting and protecting them. Adverse 
publicity (whether or not justiﬁ ed) relating to activities by our employees, 
contractors or agents could tarnish our reputation and reduce the value of 
our brand. Damage to our reputation and loss of brand equity could reduce 
demand for our services and thus have an adverse effect on our ﬁ nancial 
condition, liquidity and results of operations, as well as require additional 
resources to rebuild our reputation and restore the value of our brand.

We may be subject to competitive risks due to the long term nature of 
our ﬂ eet order book.

At present, we have existing aircraft commitments through 2021. As 
technological evolution occurs in our industry, through the use of composites 
and other innovations, we may be competitively disadvantaged because 
we have existing extensive ﬂ eet commitments that would prohibit us from 
adopting new technologies on an expedited basis.

JETBLUE AIRWAYS CORPORATION - 2012  10K 17

PART I   
ITEM 1A Risk Factors

Risks Associated with the Airline Industry

The airline industry is particularly sensitive to changes in economic 
condition.

Fundamental and permanent changes in the domestic airline industry have 
been ongoing over the past several years as a result of several years of 
repeated losses, among other reasons. These losses resulted in airlines 
renegotiating or attempting to renegotiate labor contracts, reconﬁ guring ﬂ ight 
schedules, furloughing or terminating employees, as well as considering 
other efﬁ ciency and cost-cutting measures. Despite these actions, several 
airlines have reorganized under Chapter 11 of the U.S. Bankruptcy Code 
to permit them to reduce labor rates, restructure debt, terminate pension 
plans and generally reduce their cost structure. Since 2005, the U.S. airline 
industry has experienced signiﬁ cant consolidation and liquidations. The 
global economic recession and related unfavorable general economic 
conditions, such as higher unemployment rates, a constrained credit 
market, housing-related pressures, and increased business operating costs 
can reduce spending for both leisure and business travel. Unfavorable 
economic conditions could also impact an airline’s ability to raise fares 
to counteract increased fuel, labor, and other costs. It is foreseeable that 
further airline reorganizations, consolidation, bankruptcies or liquidations 
may occur in the current global recessionary environment, the effects of 
which we are unable to predict. We cannot assure you the occurrence of 
these events, or potential changes resulting from these events, will not 
harm our business or the industry.

A future act of terrorism, the threat of such acts or escalation of U.S. 
military involvement overseas could adversely affect our industry.

Acts of terrorism, the threat of such acts or escalation of U.S. military 
involvement overseas could have an adverse effect on the airline industry. 
In the event of a terrorist attack, whether or not successful, the industry 
would likely experience increased security requirements and signiﬁ cantly 
reduced demand. We cannot assure you these actions, or consequences 
resulting from these actions, will not harm our business or the industry.

Changes in government regulations imposing additional requirements 
and restrictions on our operations or the U.S. Government ceasing to 
provide adequate war risk insurance could increase our operating costs 
and result in service delays and disruptions.

Airlines are subject to extensive regulatory and legal requirements, both 
domestically and internationally, involving signiﬁ cant compliance costs. In 
the last several years, Congress has passed laws, and the agencies of the 
federal government, including, but not limited to, the DOT, FAA, CBP and 
the TSA have issued regulations relating to the operation of airlines that have 
required signiﬁ cant expenditures. We expect to continue to incur expenses 
in connection with complying with government regulations. Additional laws, 
regulations, taxes and airport rates and charges have been proposed from 
time to time that could signiﬁ cantly increase the cost of airline operations or 
reduce the demand for air travel. If adopted or materially amended, these 
measures could have the effect of raising ticket prices, reducing air travel 
demand and/or revenue and increasing costs. The FAA has published 
new regulations relating to crew rest requirements, which we are currently 
analyzing. Should the ﬁ nal rules require us to make signiﬁ cant changes to 
our crew rest requirements, our cost structure could be adversely affected. 
We cannot assure you these and other laws or regulations enacted in the 
future will not harm our business.

The U.S. Government currently provides insurance coverage for certain 
claims resulting from acts of terrorism, war or similar events. Should this 
coverage no longer be offered, the coverage that would be available to us 
through commercial aviation insurers may have substantially less desirable 
terms, result in higher costs and not be adequate to protect our risk, any 
of which could harm our business.

18

JETBLUE AIRWAYS CORPORATION - 2012  10K

Compliance with future environmental regulations may harm our business.

Many aspects of airlines’ operations are subject to increasingly stringent 
environmental regulations, and growing concerns about climate change may 
result in the imposition of additional regulation. There is growing consensus 
some form of federal regulation may be forthcoming with respect to greenhouse 
gas emissions (including carbon dioxide (CO2)) and/or “cap and trade” 
legislation, compliance with which could result in the creation of substantial 
additional costs to us. The U.S. Congress is considering climate change 
legislation and the Environmental Protection Agency issued a rule which 
regulates larger emitters of greenhouse gases. Since the domestic airline 
industry is increasingly price sensitive, we may not be able to recover the 
cost of compliance with new or more stringent environmental laws and 
regulations from our passengers, which could adversely affect our business. 
Although it is not expected the costs of complying with current environmental 
regulations will have a material adverse effect on our ﬁ nancial position, results 
of operations or cash ﬂ ows, no assurance can be made the costs of complying 
with environmental regulations in the future will not have such an effect. The 
impact to us and our industry from such actions is likely to be adverse and 
could be signiﬁ cant, particularly if regulators were to conclude emissions from 
commercial aircraft cause signiﬁ cant harm to the upper atmosphere or have 
a greater impact on climate change than other industries.

Compliance with recently adopted DOT passenger protections rules may 
increase our costs and may ultimately negatively impact our operations.

The DOT’s passenger protection rules, which became effective in April 2010, 
provide, among other things, that airlines return aircraft to the gate for deplaning 
following tarmac delays in certain circumstances. On October 29, 2011, a 
severe winter storm and multiple failures of critical navigational equipment in 
the New York City area, severely impacted air travel in the northeast which 
resulted in several ﬂ ight diversions by JetBlue and many other domestic 
and international carriers to Hartford, CT’s Bradley International Airport, or 
Bradley. JetBlue diverted a total of six ﬂ ights to Bradley, ﬁ ve of which were 
held on the tarmac in excess of three hours, thus exceeding the DOT’s 
established tarmac delay limits. As a result, the DOT is investigating these 
incidents and we may be subject to a monetary penalty. Based on the 
allowable maximum DOT ﬁ ne proscribed by the Tarmac Delay regulations, 
we could be assessed a ﬁ ne of up to approximately $15 million. We have 
issued compensation to the impacted customers in accordance with our 
Customer Bill of Rights, and are complying with the requests of the DOT 
investigation and believe the ﬁ nal determination from the DOT should be 
made in the next few months.

We could be adversely affected by an outbreak of a disease or an 
environmental disaster that signiﬁ cantly affects travel behavior.

In 2009, there was an outbreak of the H1N1 virus which had an adverse 
impact throughout our network, including on our operations to and from 
Mexico. Any outbreak of a disease (including a worsening of the outbreak 
of the H1N1 virus) affecting travel behavior could have a material adverse 
impact on us. In addition, outbreaks of disease could result in quarantines 
of our personnel or an inability to access facilities or our aircraft, which could 
adversely affect our operations. Similarly, if an environmental disaster were 
to occur and adversely impact any of our destination cities, travel behavior 
could be affected and in turn, could materially adversely impact our business.

The unknown impact from the Dodd-Frank Act as well as the rules to 
be promulgated under it could require the implementation of additional 
policies and require us to incur administrative compliance costs.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 
or the Dodd-Frank Act, contains a variety of provisions designed to regulate 
ﬁ nancial markets. Many aspects of the Dodd-Frank Act remain subject to 
rulemaking that will take effect over several years, thus making it difﬁ cult to 
assess its impact on us at this time. We expect to successfully implement 
any new applicable legislative and regulatory requirements and may incur 
additional costs associated with our compliance with the new regulations 
and anticipated additional reporting and disclosure obligations; however, at 
this time we do not expect such costs to be material to us.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 1B Unresolved Staff Comments

PART I   

ITEM 2.  Properties

Aircraft

As of December 31, 2012, we operated a ﬂ eet consisting of 127 Airbus A320 aircraft each powered by two IAE International Aero Engines V2527-A5 engines 
and 53 EMBRAER 190 aircraft each powered by two General Electric Engines CF 34-10 engines:

Aircraft
Airbus A320
EMBRAER 190
TOTALS

Seating 
Capacity
150
100

Owned
93
23
116

Capital 
Leased
4
—
4

Operating 
Leased
30
30
60

Average Age 
in Years
7.4
4.8
6.7

Total
127
53
180

Our aircraft leases have an average remaining lease term of approximately 
8.8 years at December 31, 2012. The earliest of these terms ends in 2014 
and the latest ends in 2026. We have the option to extend most of these 
leases for additional periods or to purchase the aircraft at the end of the 
related lease term. All but 11 of our 116 owned aircraft and all but nine 
of our 38 owned spare engines are subject to secured debt ﬁ nancing. 

In July 2012, we amended our EMBRAER purchase agreement accelerating 
the delivery of one aircraft to 2013, which was previously scheduled for 
delivery in 2014. Additionally, we extended the date for which we may 
elect not to further amend our purchase agreement to order a new 
EMBRAER 190 variant, if developed, to July 31, 2013. If not elected, seven 
EMBRAER 190 aircraft we previously deferred may either be returned to 
their previously committed to delivery dates in 2013 and 2014 or canceled 
and subject to cancellation fees. In December 2012, we further amended 
our EMBRAER purchase agreement accelerating the delivery of four 
aircraft from 2018 to 2013.

As of December 31, 2012, we had on order 115 aircraft, which are scheduled for delivery through 2021. Our aircraft delivery schedule is:

Year
2013
2014
2015
2016
2017
2018
2019
2020
2021

Airbus
 A320
3
—
—
3
8
—
—
—
—
14

Airbus
 A321
4
9
10
7
—
—
—
—
—
30

Firm

Airbus 
A320neo
—
—
—
—
—
10
10
10
10
40

EMBRAER 
190
7
1
7
8
5
3
—
—
—
31

Total
14
10
17
18
13
13
10
10
10
115

JETBLUE AIRWAYS CORPORATION - 2012  10K 19

PART I   
ITEM 3 Legal Proceedings

Facilities

We occupy all of our facilities at each of the airports we serve under leases 
or other occupancy agreements. Our agreements for terminal passenger 
service facilities, which include ticket counter and gate space, operations 
support area and baggage service ofﬁ ces, generally have terms ranging 
from less than one year to ﬁ ve years, and contain provisions for periodic 
adjustments of rental rates, landing fees and other charges applicable under 
the type of lease. We also are responsible for maintenance, insurance, 
utilities and certain other facility-related expenses and services. We have 
entered into use arrangements at each of the airports we serve providing 
for the non-exclusive use of runways, taxiways and other airport facilities. 
Landing fees under these agreements are typically based on the number 
of aircraft landings and the weight of the aircraft.

Our focus cities include New York, Boston, Long Beach, Orlando, Fort 
Lauderdale and San Juan, Puerto Rico.

In November 2005, we executed a lease agreement with the PANYNJ for 
the construction and operation of Terminal 5 which became our principal 
base of operations at JFK; we began to operate from it in October 2008. 
The lease term ends on October 22, 2038, the thirtieth anniversary 
of  the  date of our beneﬁ cial occupancy of this terminal, and we have a 
one-time early termination option ﬁ ve years prior to the end of the scheduled 
lease term. In December 2010, we executed a supplement to this lease 
agreement for the Terminal 6 property (our original base of operations at 
JFK) adjacent to our operations at Terminal 5 for a term of ﬁ ve years, which 
provides certain use and development rights. In 2012, we commenced 
construction on an expansion to Terminal 5, or T5i, which will be used as 
an international arrival facility. 

Our operations at Boston’s Logan International Airport, or Logan, are 
based at Terminal C where we operate 17 gates and 42 ticket counter 
positions. In 2011, Massport completed work connecting two concourses 
within Terminal C, centralizing the security checkpoint and providing our 
customers the convenience of 14 contiguous gates.

Our West Coast operations are based at Long Beach Municipal Airport, 
or Long Beach, which serves the Los Angeles basin. We operate four 
gates at Long Beach. In 2010, the Long Beach Airport began work on 
redevelopment efforts, including a new parking structure and new terminal, 
which opened in December 2012.

In Florida, our primary operations are at Orlando International Airport, or 
Orlando, and Fort Lauderdale-Hollywood International Airport, or Fort 
Lauderdale. We operate from Terminal A in Orlando with eight domestic 
and one international gate. In Fort Lauderdale, we operate from Terminal 
3 with seven domestic gates.

Our operations in San Juan, Puerto Rico are based at Luis Muñoz Marin 
International Airport, or San Juan. In June 2012, we relocated our San 
Juan operations to a newly renovated Terminal A with preferential use of 
seven gates.

We lease a 70,000 square foot aircraft maintenance hangar and an adjacent 
32,000 square foot ofﬁ ce and warehouse facility at JFK to accommodate 
our technical support operations and passenger provisioning personnel. 
The ground lease for this site expires in 2030. In addition, we occupy a 
building at JFK where we store aircraft spare parts and perform ground 
equipment maintenance. During 2012, we moved to Hangar 8 in Boston, 
a total of approximately 80,000 square feet of space, which includes an 
aircraft maintenance hangar and ofﬁ ce space. The ground lease for this 
site expires in 2017.

We also occupy a training center at Orlando International Airport which 
is equipped with seven full ﬂ ight simulators, two cabin trainers, a training 
pool, classrooms and support areas. This facility is being used for the initial 
and recurrent training of our pilots and in-ﬂ ight crew, as well as support 
training for our technical operations and airport crew. In addition, we 
lease a 70,000 square foot hangar at Orlando International Airport which 
is used by Live TV for the installation and maintenance of in-ﬂ ight satellite 
television systems and aircraft maintenance. The ground leases for our 
Orlando support facilities expire in 2035.

As of December 31, 2012, our primary corporate ofﬁ ces were located in 
Long Island City, New York, where we occupy space under a lease that 
expires in 2023. Our ofﬁ ce in Salt Lake City, Utah, where we occupy space 
under a lease that expires in 2014, contains a core team of employees who 
are responsible for group sales, customer service, at-home reservation 
agent supervision, disbursements and certain other ﬁ nance functions.

At most other locations, our passenger and baggage handling space is 
leased directly from the airport authority on varying terms dependent on 
prevailing practice at each airport. We also maintain administrative ofﬁ ces, 
terminal, and other airport facilities, training facilities, maintenance facilities, 
and other facilities, in each case as necessary to support our operations 
in the cities we serve.

ITEM 3.  Legal Proceedings

In the ordinary course of our business, we are party to various legal 
proceedings and claims which we believe are incidental to the operation 
of our business. Other than as described under Note 12-Contingencies 
to our consolidated ﬁ nancial statements included in Part II, Item 8 of this 

Annual Report on Form 10-K, we believe the ultimate outcome of these 
proceedings to which we are currently a party will not have a material 
adverse effect on our business, ﬁ nancial position, results of operations 
or cash ﬂ ows. 

ITEM 4.  Mine Safety Disclosures

Not applicable.

20

JETBLUE AIRWAYS CORPORATION - 2012  10K

Executive Offi cers of the Registrant

PART I   

Executive Ofﬁ cers of the Registrant

Certain information concerning JetBlue’s executive ofﬁ cers as of the date 
of this report follows. There are no family relationships between any of 
our executive ofﬁ cers.

David Barger, age 55, is our President and Chief Executive Ofﬁ cer. He has 
served in this capacity since May 2007 and as President since June 2009. 
He is also a member of our Board of Directors. He previously served as 
our President from August 1998 to September 2007 and Chief Operating 
Ofﬁ cer from August 1998 to March 2007. From 1992 to 1998, Mr. Barger 
served in various management positions with Continental Airlines, including 
Vice President, Newark hub. He held various director level positions at 
Continental Airlines from 1988 to 1995. From 1982 to 1988, Mr. Barger 
served in various positions with New York Air, including Director of Stations.

Mark D. Powers, age 59, is our Chief Financial Ofﬁ cer, a position he has 
held since April 2012. Mr. Powers joined us in July 2006 as Treasurer 
and Vice President, Corporate Finance. He was promoted to Senior Vice 
President, Treasurer in 2007. Prior to joining JetBlue, Mr. Powers was 
an independent advisor to several aviation-related companies and has 
held a number of positions in both the ﬁ nance and legal departments of 
Continental Airlines, Northwest Airlines and General Electric’s jet engine unit. 

Rob Maruster, age 41, is our Executive Vice President and Chief Operating 
Ofﬁ cer and has served in this capacity since June 2009. Mr. Maruster 
joined JetBlue in 2005 as Vice President, Operations Planning, after a 
12-year career with Delta Air Lines in a variety of leadership positions 
with increasing responsibilities in the carrier’s Marketing and Customer 

Service departments, culminating in being responsible for all operations 
at Delta’s largest hub as Vice President, Airport Customer Service at 
Hartsﬁ eld-Jackson Atlanta International Airport. In 2006, Mr. Maruster was 
promoted to Senior Vice President, Airports and Operational Planning and 
in 2008, Mr. Maruster’s responsibilities expanded to include the Customer 
Services group which included Airports, Inﬂ ight Services, Reservations, 
and System Operations.

Robin Hayes, age 46, is our Executive Vice President and Chief Commercial 
Ofﬁ cer. He joined JetBlue in August 2008 after nineteen years at British 
Airways. In his last role at British Airways, Mr. Hayes served as Executive 
Vice President for The Americas and before that he served in a number of 
operational and commercial positions in the UK and Germany. 

James Hnat, age 42, is our Executive Vice President Corporate Affairs, 
General Counsel and Secretary and has served in this capacity since 
April 2007. He served as our Senior Vice President, General Counsel 
and Assistant Secretary since March 2006 and as our General Counsel 
and Assistant Secretary from February 2003 to March 2006. Mr. Hnat is 
a member of the bar of New York and Massachusetts.

Don Daniels, age 45, is our Vice President and Chief Accounting Ofﬁ cer, 
a position he has held since May 2009. He served as our Vice President 
and Corporate Controller since October 2007. He previously served as our 
Assistant Controller since July 2006 and Director of Financial Reporting 
since October 2002.

JETBLUE AIRWAYS CORPORATION - 2012  10K 21

PART II

ITEM 5.  Market for Registrant’s Common Equity; 
Related Stockholder Matters and Issuer 
Purchases of Equity Securities

Our common stock is traded on the NASDAQ Global Select Market under the symbol JBLU. The table below shows the high and low sales prices for 
our common stock.

2011 Quarter Ended
March 31
June 30
September 30
December 31
2012 Quarter Ended
March 31
June 30
September 30
December 31

$

$

High

7.13 $
6.38  
6.26  
5.65  

6.32 $
5.44  
5.94  
5.99  

Low

5.44
5.35
3.86
3.40

4.73
4.06
4.76
4.77

As of January 31, 2013, there were approximately 726 holders of record of our common stock.

We have not paid cash dividends on our common stock and have no current intention of doing so. Any future determination to pay cash dividends will 
be at the discretion of our Board of Directors, subject to applicable limitations under Delaware law, and will be dependent upon our results of operations, 
ﬁ nancial condition and other factors deemed relevant by our Board of Directors.

Purchases of Equity Securities by the Issuer and Afﬁ liated Purchases

Period
October 2012 (1)
November 2012 (1)
December 2012 (1)
TOTAL
(1) 

Total Number of 
Shares Purchased

Average price 
paid per share
—
5.11
5.59
5.53

Total number of shares purchased as 
part of publicly announced program
—
478,881
3,598,764
4,077,645

— $
$
$
$

478,881
3,598,764
4,077,645

20,922,355
In September 2012, our Board of Directors approved a share repurchase program for up to 25 million shares over a five year period. The repurchases may be commenced or suspended 
from time to time without prior notice. The shares repurchased under our share repurchase program were purchased in open market transactions and are held as treasury stock.

Maximum number of shares that may 
yet  be purchased under the program

22

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
ITEM 5 Market for Registrant’s Common Equity; Related Stockholder Matters and Issuer Purchases of Equity Securities

PART II   

Stock Performance Graph

This performance graph shall not be deemed “ﬁ led” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed incorporated by 
reference in any of our ﬁ lings under the Securities Act of 1933, as amended.

The following line graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the Standard & 
Poor’s 500 Stock Index and the NYSE Arca Airline Index from December 31, 2007 to December 31, 2012. The comparison assumes the investment of 
$100 in our common stock and in each of the foregoing indices and reinvestment of all dividends. The stock performance shown represents historical 
performance and is not representative of future stock performance.

In $

140

130

120

110

100

90

80

70

60

12/31/07

12/31/08

12/31/09

12/31/10

12/31/11

12/31/12

JetBlue Airways Corporation

S&P 500 Stock Index

NYSE Arca Airline Index(1)

12/31/2012 
JetBlue Airways Corporation 
97 
S&P 500 Stock Index 
109 
NYSE Arca Airline Index(1) 
129 
(1)  As of December 31, 2012, the NYSE Arca Airline Index consisted of Alaska Air Group Inc., AMR Corporation, Copa Holdings S.A., Delta Air Lines, Inc., Gol Linhas Aereas Inteligentes S.A., 
Hawaiian Holdings, JetBlue Airways Corporation, US Airways Group, Inc., LAN Airlines S.A., Southwest Airlines Company, Republic Airways Holding, Inc., Ryanair Holdings Ads., SkyWest, Inc, 
TAM S.A., and UAL Corporation. 

120  $ 
63  $
71  $

100  $
100  $
100  $

112  $
92  $
137  $

92  $
80  $
99  $

88  $
94  $
95  $

12/31/2010 

12/31/2008 

12/31/2011 

12/31/2009 

12/31/2007  

$
$
$

JETBLUE AIRWAYS CORPORATION - 2012  10K 23

 
 
PART II   
ITEM 6 Selected Financial Data

ITEM 6.  Selected Financial Data

The following ﬁ nancial information for the ﬁ ve years ended December 31, 2012 has been derived from our consolidated ﬁ nancial statements. This 
information should be read in conjunction with the consolidated ﬁ nancial statements and related notes thereto included elsewhere in this report.

Statements of Operations Data:
Operating revenues
Operating expenses:

Aircraft fuel and related taxes
Salaries, wages and beneﬁ ts (1)
Landing fees and other rents
Depreciation and amortization (2)
Aircraft rent
Sales and marketing
Maintenance materials and repairs

Other operating expenses (3)
Total operating expenses

Operating income
Other income (expense) (4)
Income (loss) before income taxes
Income tax expense (beneﬁ t)
NET INCOME (LOSS)
Earnings (loss) per common share:

Basic
Diluted

Other Financial Data:
Operating margin
Pre-tax margin
Ratio of earnings to ﬁ xed charges (5)
Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash provided by (used in) ﬁ nancing activities
(1) 
(2) 
(3) 

2012

2011

2010

2009

2008

$

4,982   $

4,504 

$

3,779   $

3,292   $

3,392 

1,806  
1,044  
277  
258  
130  
204  
338  

549  

4,606

376  
(167)
209  
81  

128   $

0.45 
0.40 

$
$

7.5%  
4.2%  

$

1.75x
698 
(867)
(322)

1,664 
947  
245 
233 
135 
199 
227 

532 
4,182
322 
(177 )
145 
59 
86 

0.31 
0.28 

$

$
$

1,115  
891  
228  
220  
126  
179  
172  

515  

3,446

333  
(172)
161  
64  
97   $

945  
776  
213  
228  
126  
151  
149  

419  

3,007

285  
(181)
104  
43  
61   $

1,397 
694 
199 
205 
129 
151 
127 

377 
3,279
113 
(202)
(89)
(5)
(84)

0.36 
0.31 

$
$

0.24 
0.21 

$
$

(0.37 )
(0.37 )

7.1%  
3.2%  

$

1.52x
614 
(502)
96 

8.8%  
4.3%  

$

1.59x
523 
(696)
(258)

8.6%  
3.2%  

$

1.33x
486 
(457)
306 

3.3%
(2.6)%
— 
(17)
(247)
635 

$

$
$

$

In 2010, we incurred approximately $9 million in one-time implementation expenses related to our new customer service system.
In 2008, we wrote-off $8 million related to our temporary terminal facility at JFK.
In 2012, we sold six spare engines and two aircraft resulting in gains of approximately $10 million. Additionally, in 2012, LiveTV terminated a customer contract resulting in a gain of 
approximately $8 million. In 2009, 2008 and 2007, we sold two, nine and three aircraft, respectively, which resulted in gains of $1 million, $23 million and $7 million, respectively. In 2010, 
we recorded an impairment loss of $6 million related to the spectrum license held by our LiveTV subsidiary. In 2010, we also incurred approximately $13 million in one-time implementation 
expenses related to our new customer service system.
In 2012, we recorded a net of $1 million in losses related to the early extinguishment of $220 million in principal of debt securing nine aircraft. In 2011, we recorded $6 million loss related 
to the repurchase of $39 million principal amount of our 6.75% convertible debentures due 2039. In 2008, we recorded $13 million in additional interest expense related to the early 
conversion of a portion of our 5.5% convertible debentures due 2038 and a $14 million gain on extinguishment of debt. In 2008, we recorded a holding loss of $53 million related to the 
valuation of our auction rate securities.

(4) 

(5)  Earnings were inadequate to cover fixed charges by $135 million for the year ended December 31, 2008.

24

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
  
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Balance Sheet Data:
Cash and cash equivalents
Investment securities
Total assets
Total debt
Common stockholders’ equity

ITEM 6 Selected Financial Data

PART II   

2012

2011

2010

2009

2008

As of December 31,

$

182   $
685  
7,070  
2,851  
1,888  

673   $
591  
7,071  
3,136  
1,757  

465   $
628  
6,593  
3,033  
1,654  

896   $
246  
6,549  
3,304  
1,546  

561  
244  
6,018  
3,144  
1,270  

2012

2011

2010

2009

2008

Year Ended December 31,

$

$

24,254 
28,279 
34,744 

28,956 
33,563 
40,075 

26,370 
30,698 
37,232 

22,450 
25,955 
32,558 

Operating Statistics (unaudited):
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available seat miles (ASMs) (millions)
Load factor
Aircraft utilization (hours per day)
Average fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Operating expense per ASM (cents)
Operating expense per ASM, excluding fuel (cents)
Operating expense per ASM, excluding fuel & proﬁ t 
sharing (cents)
Airline operating expense per ASM (cents) (6)
Departures
Average stage length (miles)
Average number of operating aircraft during period
Average fuel cost per gallon, including fuel taxes
Fuel gallons consumed (millions)
Full-time equivalent employees at period end (6)
(6)  Excludes results of operations and employees of LiveTV, LLC, which are unrelated to our airline operations and are immaterial to our consolidated operating results.

81.4%  
11.6 
140.69 
12.07 
9.82 
10.88 
9.92 
6.71 

83.8%  
11.8 
157.11 
13.55 
11.35 
12.43 
11.49 
6.99 

82.4%  
11.7 
154.74 
13.29 
10.96 
12.10 
11.23 
6.76 

6.98 
11.34 
264,600 
1,085 
173.9 
3.21 
563 
12,070  

6.33 
8.99 
215,526 
1,076 
148.0 
2.08 
455 
10,704 

6.71 
9.71 
225,501 
1,100 
153.5 
2.29 
486 
11,121 

6.76 
11.06 
243,446 
1,091 
164.9 
3.17 
525 
11,733 

79.7%  
11.5 
130.67 
11.30 
9.01 
10.11 
9.24 
6.33 

$

$

$

$

$

$

$

$

21,920 
26,071 
32,442 

80.4%
12.1 
139.56 
11.73 
9.43 
10.45 
10.11 
5.80 

5.80 
9.87 
205,389 
1,120 
139.5 
3.08 
453 
9,895 

The following terms used in this section and elsewhere in this report have the 
meanings indicated below:

“Yield per passenger mile” represents the average amount one passenger 
pays to ﬂ y one mile.

“Revenue passengers” represents the total number of paying passengers 
ﬂ own on all ﬂ ight segments.

“Passenger revenue per available seat mile” represents passenger revenue 
divided by available seat miles.

“Revenue passenger miles” represents the number of miles ﬂ own by 
revenue passengers.

“Operating revenue per available seat mile” represents operating revenues 
divided by available seat miles.

“Available seat miles” represents the number of seats available for passengers 
multiplied by the number of miles the seats are ﬂ own.

“Operating expense per available seat mile” represents operating expenses 
divided by available seat miles.

“Load factor” represents the percentage of aircraft seating capacity actually 
utilized (revenue passenger miles divided by available seat miles).

“Operating expense per available seat mile, excluding fuel” represents 
operating expenses, less aircraft fuel, divided by available seat miles.

“Aircraft utilization” represents the average number of block hours operated 
per day per aircraft for the total ﬂ eet of aircraft.

“Average stage length” represents the average number of miles ﬂ own 
per ﬂ ight.

“Average fare” represents the average one-way fare paid per ﬂ ight segment 
by a revenue passenger.

“Average fuel cost per gallon” represents total aircraft fuel costs, including 
fuel taxes and effective portion of fuel hedging, divided by the total number 
of fuel gallons consumed.

JETBLUE AIRWAYS CORPORATION - 2012  10K 25

 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
  
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 ITEM 7.  Management’s Discussion and Analysis of 

Financial Condition and Results of Operations

Overview

In 2012, we executed on our plans for sustainable, proﬁ table growth while continuing to strengthen our balance sheet and improve our operating 
margin. Every day, we commit to delivering a safe and reliable JetBlue Experience to our customers while maintaining a competitive cost advantage 
and improving returns for our shareholders. 

2012 Highlights and Accomplishments
 • We reported our fourth consecutive year of net income and our highest 
earnings per diluted share, $0.40, since 2003, and generated record 
revenues of nearly $5 billion.

 • We improved our return on invested capital, or ROIC, by approximately 
one percentage point even as we grew our operations, increasing 
capacity by 8%.

 • We generated $698 million in cash from operations while strengthening 
our balance sheet with increased lines of credit and reductions to our 
overall debt balance. 

 • We expanded our portfolio of commercial airline partnerships, adding 
eight new airline partnerships during the year, bringing our total to 22 
airline partnerships as of December 31, 2012.

 • We further solidiﬁ ed our position as New York’s hometown airline with 
the opening of our new headquarters in Long Island City and as we 
commenced construction of an international arrivals facility at John F. 
Kennedy International Airport, or JFK. 

 • We were recognized by J.D. Power and Associates for the eighth 
consecutive year as the “Highest in Airline Customer Satisfaction among 
Low-Cost Carriers.”

 • We preserved the direct relationship with our Crewmembers, an important 

driver of our culture and brand.

We continue to deliver a unique JetBlue Experience to our customers with 
the superior service they have come to expect from us. In addition, our 
commitment to deliver increased returns for our shareholders remains at 
the core of our overall business strategy. We believe our continued focus 
on ﬁ nancial discipline, product innovation and network enhancements, 
combined with our service excellence, will drive our future success. Some 
of our major initiatives are described below. 

Strengthening of our Balance Sheet

Throughout 2012, we were focused on strengthening our balance sheet. 
We believe we made signiﬁ cant progress in doing so, and we remain 
committed to further improving our balance sheet. We ended the year 
with unrestricted cash, cash equivalents and short-term investments at 
approximately 15% of trailing twelve months revenue. During 2012, we 
prudently used cash to invest in our business while maintaining a solid 
liquidity proﬁ le. Throughout the year, we reduced our overall debt balance 
by $285 million while increasing our total property and equipment by nearly 
10%. Our investments also included capital spending for slot acquisitions, 
our international arrival facility at JFK and aircraft prepayments. We believe 
spending wisely now will generate future returns, through balance sheet 
improvements and, ultimately, by helping us maintain the ﬂ exibility to be 
able to take advantage of future growth opportunities. Additionally, in 
September 2012, our Board of Directors approved a share repurchase 
program for up to 25 million shares over a ﬁ ve year period. During the 
fourth quarter of 2012, we repurchased approximately 4.1 million shares 
of our common stock for $23 million. 

Airport Infrastructure Investments

During 2012, we made signiﬁ cant airport infrastructure enhancements in 
several of our focus cities. In San Juan, we moved into a larger space in 
the all-new Terminal A at Luis Muñoz Marin International Airport. In Boston, 
we opened a newly renovated hangar to support our growing operations. 
In New York, we commenced construction of a new international arrival 
extension to our existing Terminal 5 at JFK. The creation of a new dedicated 
site to handle U.S. Customs and Border Protection checks at Terminal 5 
will eliminate the need for our international customers to arrive at an often 
slow Terminal 4. In Long Beach, we moved into our own concourse in the 
newly modernized terminal facility. 

Network Initiatives

We continue to make network adjustments in furtherance of our overall 
network growth plans. Our network focus over the past several years has 
primarily been on Boston and the Caribbean and Latin America. We feel 
there remains opportunity to grow our revenue in these regions due to our 
differentiated product offerings. In Boston, for example, with our product 
and network enhancements, we have been able to better accommodate 
business customers which has helped us to build revenue momentum 
from corporate share gains.

Throughout 2012, we continued to improve our relevance to business 
customers in Boston. We offer non-stop service to more destinations 
from Boston’s Logan International Airport than any other carrier at Boston. 
East Coast short-haul markets in Boston were the best performing region 
in our network during 2012, as measured by year over year unit revenue 
growth, even while we added signiﬁ cant capacity. 

Our growth in the Caribbean and Latin America also continued in 2012; we 
now have approximately 27% of our capacity in this important region. We 
remain focused on growing our network and further reducing seasonality 
by targeting new customers, including leisure travelers, business travelers, 
visiting friends and relatives, or VFR, trafﬁ c and international airline partners.

New Service

As part of our ongoing network initiatives and route optimization efforts, we 
continued to make schedule and frequency adjustments throughout 2012. In 
Boston, particularly, we did so to better accommodate business customers 
and increase our relevance. During 2012, we commenced service to ﬁ ve 
new destinations: Dallas/Fort Worth, Texas, Cartagena, Colombia, Samana, 
Dominican Republic, Grand Cayman, Cayman Islands and Providence, 
Rhode Island. Additionally, we have announced plans to begin service to 
the following destinations in 2013: Charleston, South Carolina, Albuquerque, 
New Mexico, Philadelphia, Pennsylvania and Medellin, Colombia. Our growth 
includes adding new routes between existing cities. Our commitment to 
proﬁ table growth also resulted in the discontinuation of certain routes and 
reduced service in our network throughout 2012.

26

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

Ancillary Revenue Initiatives

Our ancillary revenue initiatives are focused on increasing high margin 
revenue streams. Our EvenMore™ product continued to be successful 
throughout 2012. We reconﬁ gured our EMBRAER 190 ﬂ eet, converting 
eight seats per aircraft to EvenMore™ Space seats. Additionally, we began 
selling EvenMore™ Speed, our expedited security option, on a standalone 
basis in most of our U.S. domestic locations. 

During 2012, we introduced a new badge to our TrueBlue frequent ﬂ yer 
program called Mosaic, which is designed to recognize and reward our 
most loyal customers. The program’s enhancements include early boarding 
and a free second checked bag, among many others. We also launched 
a new co-branded credit card exclusively for residents of Puerto Rico, 
where we are the largest carrier, which will allow residents to enjoy the 
full beneﬁ ts of our TrueBlue loyalty program.

Outlook for 2013

As we enter 2013, we believe we are well positioned to build upon our 
2012 performance. We aim to deliver improved year over year margins 
and increased returns for our shareholders. Our 2013 plan aims to achieve 

these goals and assumes we are able to maintain our competitive cost 
advantage and build upon our high-value network. We plan to introduce new 
service as well as expand our portfolio of commercial airline partnerships 
during 2013. We continuously look to expand our other ancillary revenue 
opportunities, including our EvenMore™ product offering and improving 
our TrueBlue loyalty program. We also remain committed to strengthening 
our balance sheet and prudently investing in infrastructure and product 
enhancements to enable us to reap future beneﬁ ts.

For the full year, we estimate our operating capacity to increase approximately 
5.5% to 7.5% over 2012 with the net addition of three Airbus A320 aircraft 
and seven EMBRAER 190 aircraft to our operating ﬂ eet. We will also take 
delivery of our ﬁ rst four Airbus A321 aircraft in the latter part of 2013. The 
entry into service date of the Airbus A321 will depend on the timing and 
successful completion of the FAA certiﬁ cation process. Assuming fuel 
prices of $3.24 per gallon, net of our fuel hedging activity, our cost per 
available seat mile for 2013 is expected to increase by 1.5% to 3.5% over 
2012. This expected increase is primarily a result of continued maintenance 
cost pressures associated with the aging of our ﬂ eet. Additionally, salaries, 
wages and beneﬁ ts are expected to increase due to the increasing tenure 
of our Crewmembers combined with efforts to maintain competitiveness 
of our compensation packages.

Results of Operations

Year 2012 Compared to Year 2011

We reported net income of $128 million in 2012 compared to net income 
of $86 million in 2011. In 2012, we had operating income of $376 million, 
an increase of $54 million over 2011, and an operating margin of 7.5%, 
up 0.4 points from 2011. Diluted earnings per share were $0.40 for 2012 
compared to diluted earnings per share of $0.28 for 2011.

During 2012, despite uncertain economic conditions, a severe hurricane 
hitting the core of our operations and the persistent competitiveness of the 
airline industry, we managed to produce solid ﬁ nancial results. We generated 
consistent unit revenue growth throughout the year by continuing to manage 
the structure and mix of our network. We further complemented our historically 

2012 vs. 2011 Highlights
 • During the fourth quarter of 2012, Hurricane Sandy directly and signiﬁ cantly 
impacted our operations, closing many East Coast airports for several 
days. We canceled approximately 1,700 ﬂ ights over a six day period. 
 • Operating capacity increased approximately 8% to 40.08 billion available 

seat miles in 2012.

 • Average fares for the year increased 2% to $157, which also resulted in 

an increase of $4 million in associated credit card fees. 

 • Operating expenses per available seat mile increased 2% to 11.49 cents. 
Excluding fuel, our cost per available seat mile increased 3% in 2012.

leisure focused travel markets with higher yielding business markets. Our 
efforts to capitalize on key growth regions were primarily focused in Boston 
and the Caribbean region, which resulted in increased capacity during 2012. 

Our on-time performance, deﬁ ned by the DOT as arrivals within 14 
minutes of schedule, was 79.1% in 2012 compared to 73.3% in 2011. 
While improved in 2012, our on-time performance throughout the year 
and on a year-over-year basis remained challenged by our concentration 
of operations in the northeast United States, which contains some of the 
most congested and delay-prone airports in the U.S.

 • Invested in four new owned EMBRAER 190 aircraft and seven new 
owned Airbus A320 aircraft. Eight of these aircraft were debt ﬁ nanced. 
 • Commenced service to ﬁ ve new cities during 2012. Total departures 

increased 9%. 

 • Extended the leases on three aircraft during 2012 at lower rates.
 • The average age of our ﬂ eet increased to 6.7 years, and as of December 31, 

2012, our oldest operating aircraft had an age of 13.1 years.

 • Early extinguishment of approximately $220 million in principal of long-
term debt resulted in a net of $1 million in losses recorded in interest 
income and other.

JETBLUE AIRWAYS CORPORATION - 2012  10K 27

PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Operating Revenues

(Revenues in millions)
Passenger Revenue
Other Revenue

Operating Revenues

Average Fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Average stage length (miles)
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available Seat Miles (ASMs)
Load Factor

Year-over-Year Change

$

$
$

2012
4,550   $

432  

4,982   $
157.11   $

13.55  
11.35  
12.43  
1,085  
28,956  
33,563  
40,075  

2011
4,080   $

424  

4,504   $

154.74  
13.29  
10.96  
12.10  
1,091  
26,370  
30,698  
37,232  

83.8%  

82.4%  

$
470  
8  
478  
2.37  
0.26  
0.39  
0.33  
(6)
2,586  
2,865  
2,843  

%
11.5
2.0
10.6
1.5
2.0
3.6
2.8
(0.5)
9.8
9.3
7.6
1.4 pts

We derive our revenue primarily from transporting passengers on our 
aircraft. Passenger revenue accounted for 91% of our total operating 
revenues for the year ended December 31, 2012. Revenues generated 
from international routes, including Puerto Rico, accounted for 26% of 
our total passenger revenues in 2012. Revenue is recognized either when 
transportation is provided or after the ticket or customer credit expires. 
We measure capacity in terms of available seat miles, which represents 
the number of seats available for passengers multiplied by the number 
of miles the seats are ﬂ own. Yield, or the average amount one passenger 
pays to ﬂ y one mile, is calculated by dividing passenger revenue by revenue 
passenger miles. We attempt to increase passenger revenue primarily by 
increasing our yield per ﬂ ight which produces higher revenue per available 
seat mile, or RASM. Our objective is to optimize our fare mix to increase 
our overall average fare while continuing to provide our customers with 
competitive fares. Passenger revenue also includes revenue from our 
EvenMore™ Space ancillary product offering. 

In 2012, the increase in passenger revenues was mainly attributable to 
the increased capacity and increase in yield. Our EvenMore™ Space seats 
continued to be a signiﬁ cant ancillary product, generating approximately 
$150 million in revenue, an increase of approximately 19% over 2011 
primarily as a result of additional EvenMore™ Space seats on our EMBRAER 
190 ﬂ eet, increased capacity and revised pricing. 

Other revenue consists primarily of fees charged to customers in accordance 
with our published policies. These include reservation changes and baggage 
limitations, EvenMore™ Speed expedited security, the marketing component 
of TrueBlue point sales, concession revenues, revenues associated with 
transporting mail and cargo, revenues associated with the ground handling 
of other airlines and rental income. Revenues earned by our subsidiary, 
LiveTV, LLC, for the sale of, and on-going services provided for, in-ﬂ ight 
entertainment systems on other airlines are also included in Other Revenue.

Other revenue increased primarily as a result of an $18 million increase in 
revenues from certain passenger related fees such as change fees and 
excess baggage. These increased fees were slightly offset by a $10  million 
guarantee recorded in 2011 related to our co-branded credit card.

Operating Expenses

(dollars in millions)
Aircraft fuel and related taxes
Salaries, wages and beneﬁ ts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance materials and repairs
Other operating expenses
TOTAL OPERATING EXPENSES

Aircraft Fuel and Hedging 

2012
1,806 $
1,044  
277  
258  
130  
204  
338  
549  
4,606 $

$

$

2011
1,664 $
947  
245  
233  
135  
199  
227  
532  
4,182 $

Year-over-Year Change
%
8.6  
10.3  
12.8  
10.5  
(3.6)
3.0  
48.4  
3.2  

$
142  
97  
32  
25  
(5)
5  
111  
17  

424

10.1

2012
4.50
2.60
0.69
0.65
0.33
0.51
0.84
1.37
11.49

per ASM

2011 % Change
0.9  
4.47
2.4  
2.54
4.8  
0.66
2.7  
0.63
(10.4)
0.36
(4.3)
0.53
37.9  
0.61
(4.1)
1.43
11.23
2.3

The price and availability of aircraft fuel are extremely volatile due to global 
economic and geopolitical factors we can neither control nor accurately 
predict. During 2012 fuel prices remained volatile, increasing 1% over 
average 2011 prices. We maintain a diversiﬁ ed fuel hedge portfolio by 
entering into a variety of fuel hedge contracts in order to provide some 
protection against sharp and sudden volatility and further increases in fuel 
prices. In total, we hedged 30% of our total 2012 fuel consumption. We 
also use ﬁ xed forward price agreements, or FFPs, which allow us to lock 
in a price for ﬁ xed quantities of fuel to be delivered at a speciﬁ ed date 

in the future, to manage fuel price volatility. As of December 31, 2012, 
we had outstanding fuel hedge contracts covering approximately 8% of 
our forecasted consumption for the ﬁ rst quarter of 2013 and 5% for the 
full year 2013. As of December 31, 2012, we had 6% of our 2013 fuel 
consumption requirements covered under FFPs. In January and February 
2013, we entered into jet fuel swap and cap agreements covering an 
additional 6% of our 2013 forecasted consumption. We will continue to 
monitor fuel prices closely and intend to take advantage of reasonable 
fuel hedging opportunities as they become available.

28

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

Aircraft fuel expense represented approximately 40% of our total operating 
expenses. The increase in year-over-year average fuel cost per gallon 
resulted in $20 million of higher fuel expense. Additionally, we consumed 
38 million more gallons of aircraft fuel, resulting in $122 million of higher 
fuel expense. Based on our expected fuel volume for 2013, a 10% per 
gallon increase in the cost of aircraft fuel would increase our annual fuel 
expense by approximately $190 million. 

to replace the liquidated provider. These new maintenance providers 
will provide similar services at competitive rates. We are also working 
on a long-term maintenance agreement for our EMBRAER 190 aircraft 
components, which are currently not covered under a maintenance 
agreement. We believe expanding the scope of our maintenance services 
covered under long-term agreements will help us to better manage and 
predict maintenance costs over time.

During 2012, we recorded $10 million in effective fuel hedge gains which 
offset fuel expense; this compares to $3 million in 2011. Fuel derivatives 
not qualifying as cash ﬂ ow hedges in 2012 resulted in approximately 
$3 million in losses recorded in interest income and other, compared 
to an insigniﬁ cant amount in 2011. Accounting ineffectiveness on fuel 
derivatives classiﬁ ed as cash ﬂ ow hedges resulted in insigniﬁ cant losses 
in 2012 and $2 million in 2011, recorded in interest income and other. We 
are unable to predict what the amount of ineffectiveness will be related 
to these instruments, or the potential loss of hedge accounting which is 
determined on a derivative-by-derivative basis, due to the volatility in the 
forward markets for these commodities.

Salaries, Wages and Beneﬁ ts

The increasing tenure of our Crewmembers, rising healthcare costs and 
efforts to maintain competitiveness in our overall compensation packages 
are presenting cost pressures. In an attempt to proactively manage future 
increases in healthcare costs as a result of new healthcare reform legislation 
and impending tax increases, we comprehensively re-designed our 2013 
healthcare plans. 

During 2012, the average number of full-time equivalent employees 
increased by 4% resulting in an increase to salaries, wages and beneﬁ ts. 
The average tenure of our Crewmembers increased to 5.6 years as of 
December 31, 2012 resulting in an increase to average wages and beneﬁ ts 
per full-time equivalent employees. As a result of increased wages, our 
guaranteed 5% retirement contribution, which we refer to as Retirement 
Plus, to all of our eligible Crewmembers increased by $3 million. Our 
increased proﬁ tability resulted in $3 million of proﬁ t sharing expense to be 
paid to our Crewmembers in March 2013. During 2012, we also introduced 
a Retirement Advantage program, providing an additional 3% retirement 
contribution for certain of our FAA-licensed Crewmembers, which resulted 
in $4 million of increased expense.

Maintenance Materials and Repairs

Maintenance materials and repairs are generally expensed when incurred 
unless covered by a long-term ﬂ ight hour services contract. Because the 
average age of our aircraft of 6.7 years is relatively young, all of our aircraft 
currently require less maintenance than the ﬂ eet of many of our competitors. 
As our ﬂ eet ages, our maintenance costs will increase signiﬁ cantly, both on 
an absolute basis and as a percentage of our unit costs, as older aircraft 
require additional, more expensive repairs over time. 

In addition to the increase in operating aircraft and the aging of our ﬂ eet, 
several aircraft coming off of warranty contributed to higher maintenance 
costs in 2012. Additionally, one of our key engine and component repair 
maintenance providers liquidated during the ﬁ rst quarter of 2012. We 
believe the overall impact of the liquidation was approximately $10 million 
in more costly repairs while we found alternative providers. During the 
third and fourth quarter of 2012, we engaged new maintenance providers 

We are continuously exploring opportunities to mitigate and level the 
increase in maintenance expense, including by improving operational 
efﬁ ciencies. We also continue to work with our various maintenance repair 
partners and manufacturers; most recently we entered into an agreement 
to mitigate the risk of cost overruns associated with our EMBRAER 190 
heavy maintenance checks. We expect the rate of increase in maintenance 
expense to lessen in the next few years as the heavy maintenance hurdle 
from our mid-2000 aircraft deliveries subsides and we beneﬁ t from new 
maintenance agreements for both our A320 and E190 ﬂ eets.

Other Operating Expenses

Other operating expenses consist of purchased services (including 
expenses related to fueling, ground handling, skycap, security and janitorial 
services), insurance, personnel expenses, cost of goods sold to other 
airlines by LiveTV, professional fees, passenger refreshments, supplies, 
bad debts, communication costs and taxes other than payroll and fuel 
taxes. During 2012, we had several non-recurring items impacting other 
operating expenses. LiveTV terminated a customer contract resulting in a 
gain of approximately $8 million. We sold two EMBRAER 190 aircraft and 
six spare aircraft engines resulting in a gain of approximately $10 million. 

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 and the non-deductibility of certain items for tax 
purposes as well as the relative size of these items to our 2012 pre-tax 
income of $209 million and our 2011 pre-tax income of $145 million. The 
rate decrease was attributable to reductions in certain non-deductible items 
and the relative size of these items to our pre-tax income.

Year 2011 Compared to Year 2010

We reported net income of $86 million in 2011 compared to net income 
of $97 million in 2010. In 2011, we had operating income of $322 million, 
a decrease of $11 million over 2010, and an operating margin of 7.1%, 
down 1.7 points from 2010. Diluted earnings per share were $0.28 for 
2011 compared to diluted earnings per share of $0.31 for 2010.

We generated consistent unit revenue growth throughout the year by 
managing our network and balancing the seasonality created by our highly 
leisure focused business. We complemented our leisure travel markets with 
higher yielding business markets and capitalized on key growth regions, 
primarily Boston and the Caribbean, which resulted in increased capacity. 

Our on-time performance, deﬁ ned by the DOT as arrivals within 14 minutes 
of schedule, was 73.3% in 2011 compared to 75.7% in 2010. Our on-time 
performance throughout the year and on a year-over-year basis remained 
challenged by our signiﬁ cant operations in the northeast United States.

JETBLUE AIRWAYS CORPORATION - 2012  10K 29

PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

2011 vs 2010 Highlights
 • During the ﬁ rst quarter of 2011, the winter storm season was extremely 
severe. The operational impact of the severe storm season pressured our 
CASM, excluding fuel, and negatively impacted our completion factor. 
 • During the third quarter of 2011, Hurricane Irene severely impacted 
our operations as its path travelled directly through the core of our 
network. Flights were suspended in New York and Boston, resulting in 
approximately 1400 cancellations over a three day period.

 • Operating capacity increased approximately 7% to 37.23 billion available 

seat miles in 2011.

 • Average fares for the year increased 10% over 2010 to $155, which 
also resulted in an increase of $14 million in associated credit card fees. 
 • Operating expenses per available seat mile increased 13% to 11.23 cents. 
Excluding fuel, our cost per available seat mile increased 0.9% in 2011.
 • Invested in ﬁ ve new owned EMBRAER 190 aircraft and four new owned 

Airbus A320 aircraft, all of which were debt ﬁ nanced. 

 • Opened seven new cities in 2011. Total departures increased 8%. 

 • Extended the leases on four aircraft during 2011 at lower rates.
 • The average age of our ﬂ eet increased to 6.1 years, and as of December 31, 

2011, our oldest operating aircraft had an age of 12.1 years.

 • In 2010, we had several items impacting other operating expenses 

which did not recur in 2011.
 – We incurred approximately $13 million in one-time implementation 

expenses related to our new customer service system. 

 – We recorded a $6 million one-time impairment expense related to the 
intangible assets and other costs associated with developing an air 
to ground connectivity capability. 

 – We paid a $5 million rescheduling fee in connection with the deferral 

of aircraft.

 • Early extinguishment of $39 million par value of our 6.75% Series A 
convertible debt due 2039 resulted in $6 million in losses recorded in 
interest income and other. 

Operating Revenues

(Revenues in millions)
Passenger Revenue
Other Revenue

Operating Revenues

Average Fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Average stage length (miles)
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available Seat Miles (ASMs)
Load Factor

2011
4,080  
424  
4,504  
154.74  
13.29  
10.96  
12.10  
1,091  
26,370  
30,698  
37,232  
82.4%

2010
3,412  
367  
3,779  
140.69  
12.07  
9.82  
10.88  
1,100  
24,254  
28,279  
34,744  
81.4%

Year-over-Year Change

$
668  
57  
725  
14.05  
1.22  
1.14  
1.22  
(9)
2.116  
2,419  
2,488  

%
19.6 
15.3  
19.2 
10.0 
10.2 
11.6 
11.2 
(0.8)
8.7 
8.6 
7.2 
1.0 pts

Passenger revenues increased 20% mainly attributable to the capacity 
increase along with the increase in yield. Revenue from our Even More 
Space seats increased $36 million as a result of increased capacity and 
revised pricing. 

Other revenue increased 15% as a result of a $17 million increase in 
marketing related revenues as well as an $18 million increase in revenues 
from certain passenger related fees such as change fees and excess 
baggage. LiveTV third party revenues increased approximately $14 million.

Operating Expenses

(dollars in millions)
Aircraft fuel and related taxes
Salaries, wages and beneﬁ ts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance materials and repairs
Other operating expenses
TOTAL OPERATING EXPENSES

$

$

2011
1,664 $
947  
245  
233  
135  
199  
227  
532  
4,182 $

2010
1,115 $
891  
228  
220  
126  
179  
172  
515  
3,446 $

Year-over-Year Change

$
549
56
17
13
9
20
55
17
736

%
49.2
6.2
7.9
6.3
7.1
10.9
32.1
3.4
21.4

2011
4.47
2.54
0.66
0.63
0.36
0.53
0.61
1.43
11.23

per ASM
2010
3.21
2.57
0.65
0.63
0.36
0.52
0.50
1.48
9.92

% Change
39.2  
(0.9)
0.7  
(0.8)
—  
3.5  
23.3  
(3.5)
13.3

30

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

Aircraft Fuel and Hedging

Aircraft fuel expense increased 49%, and represented approximately 40% 
of our total operating expenses. Average fuel cost per gallon increased 
38% to $3.17 compared to $2.29 in 2010, resulting in $461 million of 
higher fuel expense. Additionally, we consumed 39 million more gallons 
of aircraft fuel, resulting in $88 million of higher fuel expense. 

We hedged approximately 43% of our total 2011 fuel consumption. 
We recorded $3 million in effective fuel hedge gains, which offset fuel 
expense, versus $3 million in effective fuel hedge losses during 2010, 

Salaries, Wages and Beneﬁ ts

which were an increase to fuel expense. Accounting ineffectiveness on 
fuel derivatives classiﬁ ed as cash ﬂ ow hedges resulted in losses of $2 
million in each of 2011 and 2010, recorded in interest income and other. 
We are unable to predict what the amount of ineffectiveness will be related 
to these instruments, or the potential loss of hedge accounting which is 
determined on a derivative-by-derivative basis, due to the volatility in the 
forward markets for these commodities.

The increase in salaries, wages and beneﬁ ts was primarily due to a 5% increase in the number of average number of full-time equivalent employees 
needed to support our proﬁ table growth plans. The increasing seniority levels of our Crewmembers combined with pay and beneﬁ t increases also 
contributed to higher expense.

Maintenance Materials and Repairs

Maintenance expense represented a signiﬁ cant cost challenge in 2011, increasing $55 million. In addition to the additional operating aircraft and the aging 
of our ﬂ eet, several aircraft coming off of warranty contributed to higher maintenance costs. Maintenance expense is expected to increase signiﬁ cantly 
as our ﬂ eet ages, as older aircraft need additional, more expensive repairs over time.

Income Taxes

Our effective tax rate was 41% in 2011 compared to 40% in 2010. 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 and the relative size of these items to our 
2011 pre-tax income of $145 million and our 2010 pre-tax income of $161 million. The rate increase was due to a reduction in the valuation allowance 
attributable to state net operating loss carryforwards in 2010.

Costs per Available Seat Mile (Non-GAAP)

Our costs per available seat mile, or CASM, a common metric used in 
the airline industry, are summarized in the table below. We have listed 
separately our fuel costs and proﬁ t 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 proﬁ t 
sharing, which is sensitive to volatility in earnings, from this metric 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 ﬁ nancial measure in addition to, 
and not as a substitute for, our ﬁ nancial performance measures prepared 
in accordance with GAAP.

Reconciliation of Operating E xpense per ASM, excluding F uel and P roﬁ t S haring

(in millions, except per ASM data in cents)
Total operating expenses
Less: Aircraft fuel and related taxes
Operating expenses, excluding fuel
Less: Proﬁ t sharing
OPERATING EXPENSE, EXCLUDING 
FUEL & PROFIT SHARING

$

2012
$
4,606
1,806
2,800
3

per ASM
11.49
4.50
6.99
0.01

$

2011
$
4,182
1,664
2,518
—

per ASM
11.23
4.47
6.76
—

Per ASM 
Year-over-Year 
Change  %
2.3%
0.9  
3.3  
—  

$

2,797

6.98

$

2,518

6.76

3.2

JETBLUE AIRWAYS CORPORATION - 2012  10K 31

 
 
 
 
 
 
PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quarterly Results of Operations

The following table sets forth selected ﬁ nancial data and operating statistics for the four quarters ended December 31, 2012. The information for each 
of these quarters is unaudited and has been prepared on the same basis as the audited consolidated ﬁ nancial statements appearing elsewhere in this 
Form 10-K.

Statements of Operations Data (dollars in millions)
Operating revenues
Operating expenses:

Aircraft fuel and related taxes
Salaries, wages and beneﬁ ts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance materials and repairs
Other operating expenses (1)
Total operating expenses
Operating income (2)

Other income (expense) (3)

Income before income taxes

Three Months Ended

March 31, 
2012

June 30, 
2012

September 30, 
2012

December 31, 
2012

$

1,203   $

1,277   $

1,308   $

1,194  

433  
255  
66  
61  
33  
47  
88  
131  

450  
265  
72  
63  
33  
54  
85  
125  

481  
262  
73  
66  
32  
51  
85  
145  

1,114

1,147

1,195

89  
(40)
49  
19  
30
7.4%
4.0%

130  
(44)
86  
34  
52
10.2%
6.7%

113  
(40)
73  
28  
45
8.6%
5.6%

442  
262  
66  
68  
32  
52  
80  
148  

1,150

44  
(43)

1  
—  
1
3.7%
0.1%

$

$

$

$

6,853  
7,908  
9,536  

7,338  
8,497  
9,961  

7,747  
9,075  
10,704  

Income tax expense
NET INCOME
Operating margin
Pre-tax margin
Operating Statistics:
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available seat miles ASM (millions)
Load factor
Aircraft utilization (hours per day)
Average fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Operating expense per ASM (cents)
Operating expense per ASM, excluding fuel (cents)
Operating expense per ASM, excluding fuel and proﬁ t 
7.26  
sharing (cents)
Airline operating expense per ASM (cents) (4)
11.47  
65,062  
Departures
Average stage length (miles)
1,089  
177.8  
Average number of operating aircraft during period
3.20  
Average fuel cost per gallon, including fuel taxes
Fuel gallons consumed (millions)
138  
Full-time equivalent employees at period end (4)
12,070  
(1)  During the first quarter of 2012, LiveTV recorded a gain of approximately $8 million related to the termination of a customer contract. During the second quarter of 2012, we recorded net 

7,018  
8,083  
9,874  
81.9%
11.3  
155.17  
13.47  
11.03  
12.09  
11.65  
7.17  

6.63  
10.99  
69,925  
1,094  
175.0  

6.92  
11.35  
66,067  
1,081  
172.4  

7.15  
11.59  
63,546  
1,077  
170.3  

13.15  
11.15  
12.21  
11.16  
6.67  

13.78  
11.76  
12.82  
11.51  
6.99  

13.86  
11.49  
12.62  
11.69  
7.15  

3.17   $
152  
11,797  

3.22   $
140  
12,308  

3.25   $
133  
11,965  

82.9%  
11.6  
159.93   $

85.3%  
11.8  
159.58   $

84.8%  
12.4  
154.04   $

$

$

gains of approximately $10 million related to the sale of two EMBRAER 190 aircraft and six spare aircraft engines.

(2)  During the fourth quarter of 2012, operating income was negatively impacted by approximately $30 million as a result of Hurricane Sandy.
(3)  During the second and fourth quarters of 2012, we recorded $2 million in gains and $3 million in losses, respectively, related to the early extinguishment of a portion of our long-term debt.
  (4)  Excludes results of operations and employees of LiveTV, LLC, which are unrelated to our airline operations and are immaterial to our consolidated operating results.  

32

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

 Although we experienced signiﬁ cant revenue growth in 2012, this trend 
may not continue. We expect our expenses to continue to increase 
signiﬁ cantly as we acquire additional aircraft, as our ﬂ eet ages and as we 
expand the frequency of ﬂ ights in existing markets and enter into new 
markets. Accordingly, the comparison of the ﬁ nancial data for the quarterly 
periods presented may not be meaningful. In addition, we expect our 

operating results to ﬂ uctuate signiﬁ cantly from quarter-to-quarter in the 
future as a result of various factors, many of which are outside our control. 
Consequently, we believe quarter-to-quarter comparisons of our operating 
results may not necessarily be meaningful and you should not rely on our 
results for any one quarter as an indication of our future performance.

Network Concentrations and Seasonality

We have historically been a highly leisure-focused airline subject to 
seasonality in our business. Our focus in recent years has been to increase 
our mix of business customers, particularly in Boston, to lessen the 
seasonality impact on our business. Additionally, we believe VFR markets 
complement our leisure-driven markets from both a seasonal and day of 
week perspective. The highest levels of trafﬁ c and revenue on our routes 
along the East Coast are generally realized from October through April 
and on our routes to and from the western United States in the summer. 
Many of our areas of operations in the Northeast experience poor weather 
conditions in the winter, causing increased costs associated with de-icing 

Liquidity and Capital Resources

aircraft, cancelled ﬂ ights and accommodating displaced customers. Many 
of our Florida and Caribbean routes experience bad weather conditions 
in the summer and fall due to thunderstorms and hurricanes. As we 
enter new markets we could be subject to additional seasonal variations 
along with competitive responses to our entry by other airlines. Given our 
high proportion of ﬁ xed costs, this seasonality may cause our results of 
operations to vary from quarter to quarter. As such, we remain focused 
on trying to reduce the seasonal impact of our operations and increase 
demand and travel during the trough periods.

The airline business is capital intensive. Our ability to successfully execute 
our proﬁ table growth plans is largely dependent on the continued availability 
of capital on attractive terms. In addition, our ability to successfully operate 
our business depends on maintaining sufﬁ cient liquidity. We believe we 
have adequate resources from a combination of cash and cash equivalents 
and investment securities on hand and two available lines of credit. 
Additionally, as of December 31, 2012, we had 11 unencumbered A320 
aircraft and nine unencumbered spare engines which we believe could 
be an additional source of liquidity, if necessary. 

We believe a healthy cash balance is crucial to our ability to weather any part 
of the economic cycle while continuing to execute on our plans for proﬁ table 
growth and increased returns. Our goal is to continue to be diligent with our 
liquidity, maintaining ﬁ nancial ﬂ exibility and allowing for prudent capital spending, 
which in turn we expect to lead to improved returns for our shareholders. 
As of December 31, 2012 our cash balance declined as compared to a year 
ago. The current environment of strong industry fundamentals and low interest 
rates enabled us to adopt a more reasonable cash balance as compared to 
prior years (as measured by a percentage of trailing twelve months revenue). 

We believe our current level of cash of approximately 15% of trailing twelve 
months revenue, combined with our available lines of credit and portfolio of 
unencumbered assets provides us with a strong liquidity position and the 
potential for higher returns on cash deployment. We believe we have taken 
several important actions during 2012 in solidifying our strong balance sheet 
and overall liquidity position, including:

 • Increased our available lines of credit up to $325 million as of December 

31, 2012.

 • Prepaid approximately $220 million in high cost debt, which will result 
in an annual interest expense savings of approximately $10 million.
 • Increased the number of unencumbered aircraft from one as of December 

31, 2011 to 11 as of December 31, 2012. 

 • Reduced our overall debt balance by $285 million while increasing our 

total property and equipment by $483 million during 2012.

 • Prepaid $200 million for certain 2013 deliveries and deposits on future 

aircraft deliveries in exchange for favorable pricing terms.

JETBLUE AIRWAYS CORPORATION - 2012  10K 33

PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Return on Invested Capital

Return on invested capital, or ROIC, is an important ﬁ nancial metric which 
we believe provides meaningful information as to how well we generate 
returns relative to the capital invested in our business. During 2012, we 
improved our ROIC by nearly one percentage point to 4.8%. We are 
committed to taking appropriate actions which will allow us to continue to 

improve ROIC while adding capacity and continuing to grow. We believe 
this non-GAAP measure provides a meaningful comparison of our results 
to the airline industry and our prior year results. Investors should consider 
this non-GAAP ﬁ nancial measure in addition to, and not as a substitute for, 
our ﬁ nancial performance measures prepared in accordance with GAAP.

Reconciliation of Return on Invested Capital (Non-GAAP)

(in millions, except as otherwise noted)
Numerator
Operating Income
Add: Interest income and other
Add: Interest component of capitalized aircraft rent (a)

Subtotal

Less: Income tax expense impact
Operating Income After Tax, Adjusted
Denominator
Average Stockholders’ equity
Average total debt
Capitalized aircraft rent (a)
Invested Capital
RETURN ON INVESTED CAPITAL
(a)  Capitalized Aircraft Rent
Aircraft rent, as reported
Capitalized aircraft rent (7 * Aircraft rent)
Interest component of capitalized aircraft rent (Imputed interest at 7.5%)

Analysis of Cash Flows

Operating Activities

Twelve Months Ended 
December 31,
2012

376   $
1  
68  
445  
172  
273

$

1,822   $
2,994  
913  

$

$

5,729

4.8%

130
913
68

2011

322  
(3)
71  
390  
153  
237

1,705  
3,085  
947  

5,737

4.1%

135
947
71

$

$

$

$

$

At December 31, 2012, we had cash and cash equivalents of $182 million 
and short-term investments of $549 million, as compared to cash and cash 
equivalents of $673 million and short-term investments of $553 million at 
December 31, 2011. We also had $136 million of long-term investments 
at December 31, 2012 compared to $38 million at December 31, 2011. 
Cash ﬂ ows provided by operating activities totaled $698 million in 2012 
compared to $614 million in 2011 and $523 million in 2010. The $84  million 
increase in cash ﬂ ows from operations in 2012 compared to 2011 was 
primarily as a result of the 8% increase in capacity and 2% increase in 
average fares, offset by a 1% higher price of fuel. The $91 million increase 
in cash ﬂ ows from operations in 2011 compared to 2010 was primarily 
as a result of the 10% increase in average fares and 7% increase in 
capacity, offset by 38% higher price of fuel. As of December 31, 2012, 
our unrestricted cash, cash equivalents and short-term investments as 
a percentage of trailing twelve months revenue was approximately 15%. 
We rely primarily on cash ﬂ ows from operations to provide working capital 
for current and future operations.

Investing Activities

During 2012, capital expenditures related to our purchase of ﬂ ight equipment 
included (1) $344 million for seven Airbus A320 aircraft, four EMBRAER 190 
aircraft and ﬁ ve spare engines, (2) $283 million for ﬂ ight equipment deposits, 
which includes a $200 million prepayment in exchange for favorable pricing 

terms and (3) $32 million for spare part purchases. Capital expenditures 
for other property and equipment, including ground equipment purchases, 
facilities improvements and LiveTV inﬂ ight-entertainment equipment 
inventory were $166 million, which includes the ﬁ nal $32 million for the 16 
slots we purchased at LaGuardia International Airport and Ronald Reagan 
International Airport in 2011 and $17 million for T5i, which was paid for 
using cash from operations. The receipt of $46 million in proceeds from 
the sale of two EMBRAER 190 aircraft and six spare engines is included 
in investing activities. Investing activities also include the net purchase of 
$104 million in investment securities. 

During 2011, capital expenditures related to our purchase of ﬂ ight equipment 
included $318 million for four Airbus A320 aircraft, ﬁ ve EMBRAER 190 
aircraft and nine spare engines, $44 million for ﬂ ight equipment deposits 
and $27 million for spare part purchases. Capital expenditures for other 
property and equipment, including ground equipment purchases, facilities 
improvements and LiveTV inventory, were $135 million, which includes 
$40  million for the 16 slots we purchased at LaGuardia International Airport 
and Ronald Reagan International Airport. Investing activities in 2011 also 
included the net proceeds from the sale and maturities of $24 million in 
investment securities.

We currently anticipate 2013 capital expenditures for facility improvements, 
spare parts and ground purchases to be approximately $245 million, 
including approximately $80 million for our investment at T5i.

34

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

Financing Activities

Working Capital

Financing activities during 2012 consisted of (1) scheduled maturities of 
$198 million of debt and capital lease obligations, (2) the pre-payment 
of $185 million in high-cost debt secured by seven Airbus A320 aircraft, 
(3) the repayment of $35 million of debt related to two EMBRAER 190 
aircraft which were sold in 2012, (4) proceeds of $215 million in non-
public ﬂ oating rate aircraft-related ﬁ nancing secured by four Airbus A320 
aircraft and four EMBRAER 190 aircraft, (5) the net repayment of $88 
million under our available lines of credit, (6) the repayment of $12 million 
in principal related to our construction obligation for Terminal 5 and (7) the 
acquisition of 4.8 million treasury shares for $26 million primarily related 
to our share repurchase program and the withholding of taxes upon the 
vesting of restricted stock units.

Financing activities during 2011 consisted primarily of (1) the early 
extinguishment of $39  million principal of our 6.75% Series A convertible 
debentures due 2039 for $45  million, (2) scheduled maturities of $188  million 
of debt and capital lease obligations, (3) the early payment of $3  million on 
our spare parts pass-through certiﬁ cates, (4) proceeds of $121  million in 
ﬁ xed rate and $124  million in non-public ﬂ oating rate aircraft-related ﬁ nancing 
secured by four Airbus A320 aircraft and ﬁ ve EMBRAER 190  aircraft, (5) the 
net borrowings of $88  million under our available line of credit, (6) the 
repayment of $10  million in principal related to our construction obligation 
for Terminal 5 and (7) the acquisition of $4  million in treasury shares related 
to the withholding of taxes, upon the vesting of restricted stock units.

In November 2012, we ﬁ led an automatic shelf registration statement with 
the SEC. Under this universal shelf registration statement, we have the 
capacity to offer and sell from time to time debt securities, pass-through 
certiﬁ cates, common stock, preferred stock and/or other securities. The 
net proceeds of any securities we sell under this registration statement 
may be used to fund working capital and capital expenditures, including 
the purchase of aircraft and construction of facilities on or near airports. 
Through December 31, 2012, we had not issued any securities under 
this registration statement. At this time, we have no plans to sell any such 
securities under this registration statement. We may utilize this universal 
shelf in the future to raise capital to fund the continued development of 
our products and services, the commercialization of our products and 
services or for other general corporate purposes.

None of our lenders or lessors are afﬁ liated with us.

Capital Resources

We have been able to generate sufﬁ cient funds from operations to meet 
our working capital requirements. Approximately 70% of our property and 
equipment is encumbered, excluding 11 Airbus A320 aircraft and nine spare 
engines which we own free and clear. We have historically ﬁ nanced our 
aircraft through either secured debt or lease ﬁ nancing. At December 31, 
2012, we operated a ﬂ eet of 180 aircraft, of which 60 were ﬁ nanced under 
operating leases, four were ﬁ nanced under capital leases and all but 11 
of the remaining 116 were ﬁ nanced by private and public secured debt. 
As noted above, we pre-paid some of 2013 aircraft deliveries. We have 
committed ﬁ nancing for two EMBRAER 190 aircraft scheduled for delivery 
in 2013. We plan to opportunistically ﬁ nance the remaining 2013 scheduled 
deliveries at favorable borrowing terms relative to our weighted average 
cost of debt. Although we believe debt and/or lease ﬁ nancing should be 
available for our remaining aircraft deliveries, we cannot give assurance we 
will be able to secure ﬁ nancing on terms attractive to us, if at all. While these 
ﬁ nancings may or may not result in an increase in liabilities on our balance 
sheet, our ﬁ xed costs will increase signiﬁ cantly regardless of the ﬁ nancing 
method ultimately chosen. To the extent we cannot secure ﬁ nancing, we 
may be required to pay in cash, further modify our aircraft acquisition plans 
or incur higher than anticipated ﬁ nancing costs.

We had working capital deﬁ cit of $508 million at December 31, 2012 
compared to working capital of $216 million at December 31, 2011. 
Working capital deﬁ cits can be customary in the airline industry since air 
trafﬁ c liability is classiﬁ ed as a current liability. The signiﬁ cant decrease in 
our working capital is primarily attributable to approximately $220 million 
in debt prepayments made during 2012 and the $200 million prepayment 
for future aircraft deliveries. Our working capital includes the fair value of 
our short-term fuel hedge derivatives, which was a net liability of $1 million 
and $4 million at December 31, 2012 and 2011, respectively.

Also contributing to our working capital deﬁ cit as of December 31, 2012 
is $136 million in marketable investment securities classiﬁ ed as long-
term assets, including $57 million related to a deposit made to lower the 
interest rate on the debt secured by two aircraft. These funds on deposit 
are readily available to us; however, if we were to draw upon this deposit, 
the interest rates on the debt would revert to the higher rates in effect 
prior to the re-ﬁ nancing. 

We have a corporate purchasing line with American Express allowing us 
to borrow up to a maximum of $125 million for the purchase of jet fuel. 
Borrowings, which are to be paid monthly, are subject to a 6.9% annual 
interest rate subject to certain limitations. This borrowing facility will 
terminate no later than January 5, 2015. During 2012, we had borrowed 
up to $125 million on this corporate purchasing line, all of which was 
fully repaid, leaving the line undrawn as of December 31, 2012. In July 
2012, we entered into a revolving line of credit with Morgan Stanley for 
up to $100 million, and increased the line of credit for up to $200 million 
in December 2012. This line of credit is secured by a portion of our 
investment securities held by Morgan Stanley and the borrowing amount 
may vary accordingly. This line of credit bears interest at a ﬂ oating rate of 
interest based upon LIBOR plus 100 basis points. During 2012, we had 
borrowed up to the maximum $200 million, all of which was fully repaid, 
leaving the line undrawn as of December 31, 2012.

We expect to meet our obligations as they become due through available 
cash, investment securities and internally generated funds, supplemented 
as necessary by ﬁ nancing activities, as they may be available to us. We 
expect to generate positive working capital through our operations. 
However, we cannot predict what the effect on our business might 
be from the extremely competitive environment we are operating in or 
from events beyond our control, such as volatile fuel prices, economic 
conditions, weather-related disruptions, the impact of airline bankruptcies, 
restructurings or consolidations, U.S. military actions or acts of terrorism. 
We believe the working capital available to us will be sufﬁ cient to meet our 
cash requirements for at least the next 12 months.

Debt and Capital Leases

Our scheduled debt maturities are expected to increase over the next ﬁ ve 
years, with a scheduled peak in 2014 of nearly $600 million. Our scheduled 
debt maturities in 2013 include ﬁ nal mortgage payments on six Airbus 
A320 aircraft, which will further increase our portfolio of unencumbered 
assets. As part of our efforts to effectively manage our balance sheet 
and improve ROIC, we expect to continue to actively manage our debt 
balances. Our approach to debt management includes managing the mix 
of ﬁ xed vs. ﬂ oating rate debt, managing the annual maturities of debt, 
and managing the weighted average cost of debt. Further, we intend to 
continue to opportunistically pre-purchase outstanding debt when market 
conditions and terms are favorable. Additionally, our unencumbered assets, 
including 11 A320 aircraft, allows us some ﬂ exibility in managing our cost 
of debt and capital requirements.

JETBLUE AIRWAYS CORPORATION - 2012  10K 35

PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contractual Obligations

Our noncancelable contractual obligations at December 31, 2012 include (in millions):

Total

2013

2014

2015

2016

2017

Thereafter

Payments due in

$

Long-term debt and capital lease 
obligations (1)
Lease commitments
Flight equipment obligations
Financing obligations and other (2)
TOTAL
(1) 
(2)  Amounts include noncancelable commitments for the purchase of goods and services.

3,450 $
1,492  
5,005  
2,915  
12,862 $

509 $
198  
360  
399  
1,466 $

$

Includes actual interest and estimated interest for floating-rate debt based on December 31, 2012 rates.

673 $
194  
525  
331  
1,723 $

342 $
191  
745  
306  
1,584 $

527 $
125  
765  
293  
1,710 $

236 $
111  
575  
306  
1,228 $

1,163
673
2,035
1,280
5,151

The interest rates are ﬁ xed for $1.72 billion of our debt and capital lease 
obligations, with the remaining $1.13 billion having ﬂ oating interest rates. 
The ﬂ oating interest rates adjust quarterly or semi-annually based on the 
London Interbank Offered Rate, or LIBOR. The weighted average maturity 
of all of our debt was 6 years at December 31, 2012. We are subject to 
certain ﬁ nancial ratios for our unsecured line of credit issued in September 
2011, including a requirement to maintain certain cash and short-term 
investment levels and a minimum earnings before income taxes, interest, 
depreciation and amortization, or EBITDA margin, as well as customary 
events of default. We are subject to certain collateral ratio requirements 
in our spare parts pass-through certiﬁ cates and spare engine ﬁ nancing 
issued in November 2006 and December 2007, respectively. If we fail 
to maintain these collateral ratios, we are required to provide additional 
collateral or redeem some or all of the equipment notes so the ratios return 
to compliance. As a result of lower spare parts inventory balances and the 
associated reduced third party valuation of these parts, we pledged as 
collateral a previously unencumbered spare engine with a carrying value 
of approximately $7 million during the second quarter of 2011. During the 
third quarter of 2011, we did not meet the minimum ratios on our spare 
parts pass-through certiﬁ cates due to the reduced third party valuation of 
these parts. In order to maintain the ratios, we elected to redeem $3 million 
of the equipment notes in November 2011. At December 31, 2012, we 
were in compliance with all covenants of our debt and lease agreements 
and 70% of our owned property and equipment were pledged as security 
under various loan agreements.

We have operating lease obligations for 60 aircraft with lease terms that 
expire between 2014 and 2026. Five of these leases have variable-rate rent 
payments that adjust semi-annually based on LIBOR. We also lease airport 
terminal space and other airport facilities in each of our markets, as well as 
ofﬁ ce space and other equipment. We have approximately $30 million of 
restricted assets pledged under standby letters of credit related to certain 
of our leases which will expire at the end of the related leases.

Our ﬁ rm aircraft orders at December 31, 2012 consisted of 14 Airbus 
A320 aircraft, 30 Airbus A321 aircraft, 40 Airbus A320 neo aircraft and 
31 EMBRAER 190 aircraft scheduled for delivery as follows 14 in 2013, 
10 in 2014, 17 in 2015, 18 in 2016, 13 in 2017, 13 in 2018, 10 in 2019, 
10 in 2020 and 10 in 2021. We expect to meet our predelivery deposit 
requirements for our aircraft by paying cash or by using short-term 
borrowing facilities for deposits required six to 24 months prior to delivery. 
Any predelivery deposits paid by the issuance of notes are fully repaid at 
the time of delivery of the related aircraft. 

Our aircraft orders reﬂ ect contract modiﬁ cations entered in 2012. In July 
2012, we amended our EMBRAER purchase agreement accelerating the 
delivery of one aircraft to 2013 which was previously scheduled for delivery 
in 2014. Additionally, we extended the date by which we may elect not to 
further amend our purchase agreement to order a new EMBRAER 190 
variant, if developed, to July 31, 2013. If the new variant is not elected, 
seven EMBRAER 190 aircraft we previously deferred may either be returned 
to their original delivery dates in 2013 and 2014 or canceled and subject to 
cancellation fees. In December 2012, we further amended this agreement 
effectively accelerating the delivery of four aircraft from 2018 to 2013. 

In October 2008, we began operating out of our new Terminal 5 at JFK, 
or Terminal 5, which we had been constructing since November 2005. 
The construction and operation of this facility is governed by a lease 
agreement we entered into with the PANYNJ in 2005. We are responsible 
for making various payments under the lease, including ground rents for 
the terminal site which began on lease execution in 2005 and facility rents 
commenced in October 2008 upon our occupancy of the terminal. The 
facility rents are based on the number of passengers enplaned out of the 
terminal, subject to annual minimums. The PANYNJ has reimbursed us 
for costs of this project in accordance with the terms of the lease, except 
for approximately $76 million in leasehold improvements provided by us. 
For ﬁ nancial reporting purposes, this project is being accounted for as a 
ﬁ nancing obligation, with the constructed asset and related liability being 
reﬂ ected on our balance sheets. Minimum ground and facility rents for 
this terminal totaling $1.12 billion are included in the commitments table 
above as lease commitments and ﬁ nancing obligations.

Our commitments also include those of LiveTV, which has several 
noncancelable long-term purchase agreements with various suppliers 
to provide equipment to be installed on its customers’ aircraft, including 
JetBlue’s aircraft.

We enter into individual employment agreements with each of our FAA-
licensed Crewmembers as well as inspectors and air trafﬁ c controllers. 
Each employment agreement is for a term of ﬁ ve years and automatically 
renews for an additional ﬁ ve-year term unless the Crewmember is terminated 
for cause or the Crewmember elects not to renew it. Pursuant to these 
agreements, these Crewmembers can only be terminated for cause. In 
the event of a downturn in our business requiring a reduction in ﬂ ying 
and related work hours, we are obligated to pay these Crewmembers 
a guaranteed level of income and to continue their beneﬁ ts. As we are 
not currently obligated to pay this guaranteed income and beneﬁ ts, no 
amounts related to these guarantees are included in the table above.

36

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

PART II   

Off-Balance Sheet Arrangements

None of our operating lease obligations are reﬂ ected on our balance sheet. 
Although some of our aircraft lease arrangements are with variable interest 
entities, as deﬁ ned by the Consolidations topic of the Financial Accounting 
Standards Board’s, or FASB, Accounting Standards Codiﬁ cation™, or 
Codiﬁ cation, none of them require consolidation in our ﬁ nancial statements. 
The decision to ﬁ nance these aircraft through operating leases rather 
than through debt was based on an analysis of the cash ﬂ ows and tax 
consequences of each ﬁ nancing alternative and a consideration of liquidity 
implications. We are responsible for all maintenance, insurance and other 
costs associated with operating these aircraft; however, we have not made 
any residual value or other guarantees to our lessors.

We have determined that we hold a variable interest in, but are not the 
primary beneﬁ ciary of, certain pass-through trusts which are the purchasers 
of equipment notes issued by us to ﬁ nance the acquisition of new aircraft 
and certain aircraft spare parts owned by JetBlue and held by such 
pass-through trusts. These pass-through trusts maintain liquidity facilities 
whereby a third party agrees to make payments sufﬁ cient to pay up to 
18 months of interest on the applicable certiﬁ cates if a payment default 
occurs. The liquidity providers for the Series 2004-1 aircraft certiﬁ cates and 
the spare parts certiﬁ cates are Landesbank Hessen-Thüringen Girozentrale 

and Morgan Stanley Capital Services Inc. The liquidity providers for the 
Series 2004-2 aircraft certiﬁ cates are Landesbank Baden-Württemberg 
and Citibank, N.A.

We use a policy provider to provide credit support on our Class G-1 and 
Class G-2 ﬂ oating rate enhanced equipment notes. The policy provider 
has unconditionally guaranteed the payment of interest on the certiﬁ cates 
when due and the payment of principal on the certiﬁ cates no later than 
18 months after the ﬁ nal expected regular distribution date. The policy 
provider is MBIA Insurance Corporation (a subsidiary of MBIA, Inc.). Financial 
information for the parent company of the policy provider is available at 
the SEC’s website at http://www.sec.gov or at the SEC’s public reference 
room in Washington, D.C.

We have also made certain guarantees and indemnities to other unrelated 
parties that are not reﬂ ected on our balance sheet which we believe will not 
have a signiﬁ cant impact on our results of operations, ﬁ nancial condition 
or cash ﬂ ows. We have no other off-balance sheet arrangements. See 
Notes 2, 3 and 12 to our consolidated ﬁ nancial statements for a more 
detailed discussion of our variable interests and other contingencies, 
including guarantees and indemnities.

Critical Accounting Policies and Estimates

The preparation of our ﬁ nancial statements in conformity with generally 
accepted accounting principles requires management to adopt accounting 
policies and make estimates and judgments to develop amounts reported 
in our ﬁ nancial statements and accompanying notes. We maintain a 
thorough process to review the application of our accounting policies and to 
evaluate the appropriateness of the estimates that are required to prepare 
our ﬁ nancial statements. We believe that our estimates and judgments 
are reasonable; however, actual results and the timing of recognition of 
such amounts could differ from those estimates. In addition, estimates 
routinely require adjustment based on changing circumstances and the 
receipt of new or better information.

Critical accounting policies and estimates are deﬁ ned as those that are 
reﬂ ective of signiﬁ cant judgments and uncertainties, and potentially result 
in materially different results under different assumptions and conditions. 
The policies and estimates discussed below have been reviewed with 
our independent registered public accounting ﬁ rm and with the Audit 
Committee of our Board of Directors. For a discussion of these and other 
accounting policies, see Note 1 to our consolidated ﬁ nancial statements.

Passenger revenue. Passenger ticket sales are initially deferred in air trafﬁ c 
liability. The air trafﬁ c liability also includes customer credits issued and 
unused tickets whose travel date has passed. Credit for unused tickets 
and customer credits can each be applied towards another ticket within 12 
months of the original scheduled service or 12 months from the issuance of 
the customer credit. Revenue is recognized when transportation is provided 
or when a ticket or customer credit expires. We also defer, in air trafﬁ c liability, 
an estimate for customer credits issued in conjunction with the JetBlue 
Airways Customer Bill of Rights we expect to be ultimately redeemed. These 
estimates are based on historical experience and are periodically evaluated, 
and adjusted if necessary, based on actual credit usage.

Frequent ﬂ yer accounting. We utilize a number of estimates in accounting 
for our TrueBlue customer loyalty program, or TrueBlue. We record a 
liability, which was $10 million and $9 million as of December 31, 2012 

and 2011, respectively, for the estimated incremental cost of outstanding 
points earned from JetBlue purchases that we expect to be redeemed. The 
estimated cost includes incremental fuel, insurance, passenger food and 
supplies, and reservation costs. We adjust this liability, which is included 
in air trafﬁ c liability, based on points earned and redeemed, changes in the 
estimated incremental costs associated with providing travel and changes 
in the TrueBlue program. In November 2009, we launched an improved 
version of TrueBlue, which allows customers to earn points based on the 
value paid for a trip rather than the length of the trip. In addition, unlike our 
original program, the improved version does not result in the automatic 
generation of a travel award once minimum award levels are reached, but 
instead the points are maintained in the account until used by the member 
or until they expire 12 months after the last account activity. As a result of 
these changes, breakage, or the points that ultimately expire unused, has 
been substantially reduced. Periodically, we evaluate our assumptions for 
appropriateness, including comparison of the cost estimates to actual costs 
incurred as well as the expiration and redemption assumptions to actual 
experience. Changes in the minimum award levels or in the lives of the 
awards would also require us to reevaluate the liability, potentially resulting 
in a signiﬁ cant impact in the year of change as well as in future years.

Points in TrueBlue can also be sold to participating companies, including 
credit card and car rental companies. These sales are accounted for as 
multiple-element arrangements, with one element representing the fair value 
of the travel that will ultimately be provided when the points are redeemed 
and the other consisting of marketing related activities that we conduct with 
the participating company. The fair value of the transportation portion of 
these point sales is deferred and recognized as passenger revenue when 
transportation is provided. The marketing portion, which is the excess of 
the total sales proceeds over the estimated fair value of the transportation 
to be provided, is recognized in other revenue when the points are sold. 
Deferred revenue for points sold and not redeemed is recognized as revenue 
when the underlying points expire. Deferred revenue was $101  million and 
$84 million at December 31, 2012 and 2011, respectively.

JETBLUE AIRWAYS CORPORATION - 2012  10K 37

PART II   
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The terms of expiration of all points under our original loyalty program 
were modiﬁ ed with the launch of a new version of TrueBlue in 2009. We 
recorded $5 million and $3 million in revenue for point expirations in 2012 
and 2011, respectively.

Our co-branded credit card agreement, under which we sell TrueBlue points 
as described above, provided for a minimum cash payment guarantee, 
which was paid to us throughout the life of the agreement if speciﬁ ed 
point sales and other ancillary activity payments were not achieved and 
was subject to refund in the event that cash payments exceeded future 
minimums through April 2011. We recorded revenue related to this guarantee 
when the likelihood of us providing any future service was remote. We 
recognized approximately $5 million related to this guarantee in 2010 
and the balance of this guarantee of approximately $10 million in 2011.

Accounting for long-lived assets. In accounting for long-lived assets, we 
make estimates about the expected useful lives, projected residual values 
and the potential for impairment. In estimating useful lives and residual 
values of our aircraft, we have relied upon actual industry experience with 
the same or similar aircraft types and our anticipated utilization of the 
aircraft. Changing market prices of new and used aircraft, government 
regulations and changes in our maintenance program or operations could 
result in changes to these estimates.

Our long-lived assets are evaluated for impairment at least annually or 
when events and circumstances indicate that the assets may be impaired. 
Indicators include operating or cash ﬂ ow losses, signiﬁ cant decreases in 
market value or changes in technology. As our assets are all relatively new 
and we continue to have positive operating cash ﬂ ows, we have not identiﬁ ed 
any signiﬁ cant impairment related to our long-lived assets at this time.

Lease accounting. We operate airport facilities, ofﬁ ces buildings and aircraft 
under operating leases with minimum lease payments associated with 
these agreements recognized as rent expense on a straight-line basis over 
the expected lease term. Within the provisions of certain leases there are 
minimum escalations in payments over the base lease term and periodic 

adjustments of lease rates, landing fees, and other charges applicable 
under such agreements, as well as renewal periods. The effects of the 
escalations and other adjustments have been reﬂ ected in rent expense on 
a straight-line basis over the lease term, which includes renewal periods 
when it is deemed to be reasonably assured at the inception of the lease 
that we would incur an economic penalty for not renewing. The amortization 
period for leasehold improvements is the term used in calculating straight-
line rent expense or their estimated economic life, whichever is shorter.

Derivative instruments used for aircraft fuel. We utilize ﬁ nancial derivative 
instruments to manage the risk of changing aircraft fuel prices. We do 
not purchase or hold any derivative instrument for trading purposes. At 
December 31, 2012, we had a net $1 million liability related to the net fair 
value of these derivative instruments; the majority of which are not traded 
on a public exchange. Fair values are determined using commodity prices 
provided to us by independent third parties. When possible, we designate 
these instruments as cash ﬂ ow hedges for accounting purposes, as deﬁ ned 
by the Derivatives and Hedging topic of the Codiﬁ cation which permits the 
deferral of the effective portions of gains or losses until contract settlement.

The Derivatives and Hedging topic is a complex accounting standard and 
requires that we develop and maintain a signiﬁ cant amount of documentation 
related to (1) our fuel hedging program and fuel management approach, 
(2) statistical analysis supporting a highly correlated relationship between 
the underlying commodity in the derivative ﬁ nancial instrument and the risk 
being hedged (i.e. aircraft fuel) on both a historical and prospective basis 
and (3) cash ﬂ ow designation for each hedging transaction executed, to be 
developed concurrently with the hedging transaction. This documentation 
requires we estimate forward aircraft fuel prices since there is no reliable 
forward market for aircraft fuel. These prices are developed through the 
observation of similar commodity futures prices, such as crude oil and/or 
heating oil, and adjusted based on variations to those like commodities. 
Historically, our hedges have settled within 24 months; therefore, the 
deferred gains and losses have been recognized into earnings over a 
relatively short period of time.

38

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 7A Quantitative and Qualitative Disclosures About Market Risk

PART II   

ITEM 7A. Quantitative and Qualitative Disclosures 

A bout Market Risk

The risk inherent in our market risk sensitive instruments and positions is 
the potential loss arising from adverse changes to the price of fuel and 
interest rates as discussed below. The sensitivity analyses presented do 
not consider the effects that such adverse changes may have on the overall 
economic activity, nor do they consider additional actions we may take 
to mitigate our exposure to such changes. Variable-rate leases are not 
considered market sensitive ﬁ nancial instruments and, therefore, are not 
included in the interest rate sensitivity analysis below. Actual results may 
differ. See Notes 1, 2 and 13 to our consolidated ﬁ nancial statements for 
accounting policies and additional information.

Aircraft fuel. Our results of operations are affected by changes in the price 
and availability of aircraft fuel. To manage the price risk, we use crude or 
heating oil option contracts or jet fuel swap agreements. Market risk is 
estimated as a hypothetical 10% increase in the December 31, 2012 cost 
per gallon of fuel. Based on projected 2013 fuel consumption, such an 
increase would result in an increase to aircraft fuel expense of approximately 
$190 million in 2013, compared to an estimated $175 million for 2012 
measured as of December 31, 2011. As of December 31, 2012, we had 
hedged approximately 5% of our projected 2013 fuel requirements. All hedge 
contracts existing at December 31, 2012 settle by September 31, 2013. 

The financial derivative instrument agreements we have with our 
counterparties may require us to fund all, or a portion of, outstanding 
loss positions related to these contracts prior to their scheduled maturities. 
The amount of collateral posted, if any, is periodically adjusted based on 
the fair value of the hedge contracts. 

Interest. Our earnings are affected by changes in interest rates due to 
the impact those changes have on interest expense from variable-rate 
debt instruments and on interest income generated from our cash and 
investment balances. The interest rate is ﬁ xed for $1.72 billion of our debt 
and capital lease obligations, with the remaining $1.13 billion having ﬂ oating 
interest rates. If interest rates were, on average, 100 basis points higher in 
2013 than they were during 2012, our interest expense would increase by 
approximately $15 million. This is determined by considering the impact 
of the hypothetical change in interest rates on our variable rate debt.

If interest rates average 10% lower in 2013 than they did during 2012, our 
interest income from cash and investment balances would remain relatively 
constant, similar to the relative constant level of interest income for 2012 
measured as of December 31, 2011. These amounts are determined 
by considering the impact of the hypothetical interest rates on our cash 
equivalents and investment securities balances at December 31, 2012 
and 2011.

Fixed Rate Debt. On December 31, 2012, our $285 million aggregate 
principal amount of convertible debt had a total estimated fair value of 
$398 million, based on quoted market prices. If there were a 10% increase 
in stock prices, the fair value of this debt would have been $428 million 
as of December 31, 2012.

JETBLUE AIRWAYS CORPORATION - 2012  10K 39

PART II   
ITEM 8 Financial Statements and Supplementary Data

 ITEM 8.  Financial Statements and Supplementary Data 

JetBlue Airways Corporation

Consolidated  Balance Sheets

(in millions, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Investment securities
Receivables, less allowance (2012-$7; 2011-$8)
Inventories, less allowance (2012-$5; 2011-$4)
Prepaid expenses
Other
Deferred income taxes
Total current assets

PROPERTY AND EQUIPMENT
Flight equipment
Predelivery deposits for ﬂ ight equipment

Less accumulated depreciation

Other property and equipment
Less accumulated depreciation

Assets constructed for others
Less accumulated amortization

Total property and equipment
OTHER ASSETS
Investment securities
Restricted cash
Other
Total other assets
TOTAL ASSETS

December 31,

2012

2011

$

$

$

182
549
106
36
119
1
107
1,100

5,168
338
5,506
995
4,511
585
221
364
561

93  
468  
5,343  

136  
51  
440  
627  
7,070 $

673
553
101
50
147
5
99
1,628

4,719
154
4,873
827
4,046
531
207
324
561
71
490
4,860

38
67
478
583
7,071

40

JETBLUE AIRWAYS CORPORATION - 2012  10K

See accompanying notes to consolidated ﬁ nancial statements.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

JetBlue Airways Corporation

Consolidated  Balance Sheets

(in millions, except share data)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
Air trafﬁ c liability
Accrued salaries, wages and beneﬁ ts
Other accrued liabilities
Short-term borrowings
Current maturities of long-term debt and capital leases

Total current liabilities

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
CONSTRUCTION OBLIGATION
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes
Other

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25,000,000 shares authorized, none issued
Common stock, $0.01 par value; 900,000,000 shares authorized, 330,589,532 and 326,589,018 
shares issued and 281,007,806 and 281,777,919 shares outstanding at December 31, 2012 and 2011, 
respectively
Treasury stock, at cost; 49,581,726 and 44,811,710 shares at December 31, 2012 and 2011, 
respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

December 31,
2012

153   $
693    
172    
196    
—    
394    
1,608    
2,457    
514    

481    
122    
603    

—    

3    

(35)
1,495    
433    
(8)
1,888    
7,070   $

2011  

148  
627  
152  
199  
88  
198  
1,412  
2,850  
526  

392  
134  
526  

—  

3  

(8)
1,472  
305  
(15)
1,757  
7,071  

$

$

See accompanying notes to consolidated ﬁ nancial statements.

JETBLUE AIRWAYS CORPORATION - 2012  10K 41

 
 
   
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

 JetBlue Airways Corporation

Consolidated  Statements  of Operations

(in millions, except per share amounts)
OPERATING REVENUES
Passenger
Other

Total operating revenues
OPERATING EXPENSES
Aircraft fuel and related taxes
Salaries, wages and beneﬁ ts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance materials and repairs
Other operating expenses
Total operating expenses

OPERATING INCOME
OTHER INCOME (EXPENSE)
Interest expense
Capitalized interest
Interest income and other

Total other income (expense)

INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME
EARNINGS PER COMMON SHARE:
Basic
Diluted

Year Ended December 31,

$

2012

4,550 
432 
4,982 

1,806 
1,044 
277 
258 
130 
204 
338 
549 
4,606 
376

(176)
8 
1 
(167)
209

81  

128

$

0.45   $
0.40   $

2011

4,080 
424 
4,504 

1,664 
947 
245 
233 
135 
199 
227 
532 
4,182 
322

(179 )
5  
(3 )
(177 )
145
59  
86

0.31  
0.28  

$

$

$
$

2010

3,412 
367 
3,779 

1,115 
891 
228 
220 
126 
179 
172 
515 
3,446 
333

(180 )
4  
4  
(172 )
161
64  
97

0.36  
0.31  

$

$

$
$

See accompanying notes to consolidated ﬁ nancial statements.

42

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
   
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
  
ITEM 8 Financial Statements and Supplementary Data

PART II   

 JetBlue Airways Corporation

Consolidated  Statements  of Comprehensive Income

(in millions)
NET INCOME
Changes in fair value of derivative instruments, net of reclassiﬁ cations into earnings 
(net of $5, $4, and $7 of taxes in 2012, 2011 and 2010, respectively)

Total other comprehensive income (loss)

COMPREHENSIVE INCOME

Years Ended December 31,

2012
128

$

7  
7  

135

$

2011
86

(5)
(5)
81

$

$

2010
97

(11)
(11)
86

$

$

See accompanying notes to consolidated ﬁ nancial statements.

JETBLUE AIRWAYS CORPORATION - 2012  10K 43

 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated  Statements  of Cash Flows 

(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes
Depreciation
Amortization
Stock-based compensation
(Gains) losses on sale of assets, debt extinguishment, and customer contract 
termination
Collateral (paid) returned for derivative instruments
Restricted cash refunded by business partners
Changes in certain operating assets and liabilities:

Decrease (increase) in receivables
Decrease (increase) in inventories, prepaid and other
Increase in air trafﬁ c liability
Increase in accounts payable and other accrued liabilities

Other, net

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
Predelivery deposits for ﬂ ight equipment
Refund of predelivery deposits for ﬂ ight equipment
Proceeds from the sale of assets
Assets constructed for others
Purchase of held-to-maturity investments
Proceeds from maturities of held-to-maturity investments
Purchase of available-for-sale securities
Sale of available-for-sale securities
Sale of auction rate securities, or ARS
Net return of security deposits

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from:

Issuance of common stock
Issuance of long-term debt
Short-term borrowings
Borrowings collateralized by ARS
Construction obligation

Repayment of:

Long-term debt and capital lease obligations
Short-term borrowings
Borrowings collateralized by ARS
Construction obligation

Other, net

Year Ended December 31,

2012

2011

2010

$

128  

$

86  

$

76  
230  
39  
13 

58  
213  
34  
13 

97  

62  
194  
36  
17 

— 
(13)
5 

(4)
(4)
70 
27 
36 
523 

(249)
(50)
— 
— 
(14)
(866)
414 
(1,069)
1,052 
85 
1 
(696)

9 
116 
— 
20 
15 

(333)
— 
(76)
(5)
(4)
(258)
(431)
896 
465 

(17)
8 
— 

1 
38 
66 
92 
24 
698 

(542)
(284)
1 
46 
(2)
(444)
434 
(532)
438 
— 
18 
(867)

9 
215 
375 
— 
— 

(418)
(463)
— 
(12)
(28)
(322)
(491)
673 
182 

$

6 
10 
— 

(10)
4 
113 
26 
61 
614 

(480)
(45)
1 
— 
(3)
(450)
573 
(602)
503 
— 
1 
(502)

10 
245 
128 
— 
6 

(238)
(40)
— 
(10)
(5)
96 
208 
465 
673 

$

Net cash provided by (used in) ﬁ nancing activities

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

$

See accompanying notes to consolidated ﬁ nancial statements.

44

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

 JetBlue Airways Corporation

Consolidated  Statements  of Stockholders’ Equity

(in millions)
Balance at December 31, 2009
Net income
Changes in comprehensive 
income 
Total comprehensive income
Vesting of restricted stock units
Stock compensation expense
Stock issued under crewmember 
stock purchase plan
Other
Balance at December 31, 2010
Net income
Changes in comprehensive 
income
Total comprehensive income
Vesting of restricted stock units
Stock compensation expense
Stock issued under crewmember 
stock purchase plan
Shares returned pursuant to 2008 
share lending
Other
Balance at December 31, 2011
Net income
Changes in comprehensive 
income
Total comprehensive income
Vesting of restricted stock units
Stock compensation expense
Stock issued under Crewmember 
stock purchase plan
Shares repurchased under 2012 
share repurchase plan
Other
Balance at December 31, 2012

Common 
Shares

319 $
—  

Common 
Stock
3
—

Treasury 
Shares

27 $
—  

Treasury 
Stock
(2)
—  

$

—  

1  
—  

1  
1  
322  
—  

—  

2  
—  

2  

—  
1  
327  
—  

—  

2  
—  

2  

—  
—  
331 $

—

—
—

—
—
3
—

—

—
—

—

—
—
3
—

—

—
—

—

—
—
3

—  

1  
—  

—  
—  
28  
—  

—  

1  
—  

—  

16  
—  
45  
—  

—  

1  
—  

—  

—  

(2)
—  

—  
—  
(4)
—  

—  

(4)
—  

—  

—  
—  
(8)
—  

—  

(4)
—  

—  

4  
—  
50 $

(23)
—  
(35)

$

Additional 
Paid-In 
Capital

1,422 $

—  

—  

—  
15  

7  
2  
1,446  
—  

—  

—  
15  

8  

—  
3  
1,472  
—  

—  

—  
13  

7  

—  
3  

1,495 $

Accumulated 
Other 
Compre-
hensive 
Income 
(Loss)
1
—  

$

Retained 
Earnings

122 $
97  

—  

—  
—  

—  
—  
219  
86  

—  

—  
—  

—  

—  
—  
305  
128  

—  

—  
—  

—  

(11)

—  
—  

—  
—  
(10)
—  

(5)

—  
—  

—  

—  
—  
(15)
—  

7

—  
—  

—  

Total
1,546
97

(11)
86
(2)
15

7
2
1,654
86

(5)
81
(4)
15

8

—
3
1,757
128

7
135
(4)
13

7

—  
—  
433 $

—  
—  
(8)

$

(23)
3
1,888

See accompanying notes to consolidated ﬁ nancial statements.

JETBLUE AIRWAYS CORPORATION - 2012  10K 45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

Notes to Consolidated Financial Statements 
 December 31,  2012

JetBlue Airways Corporation is an innovative passenger airline that provides 
award-winning customer service at competitive fares primarily on point-to-
point routes. We offer our customers a high quality product with young, 
fuel-efﬁ cient aircraft, leather seats, free in-ﬂ ight entertainment at every 
seat, pre-assigned seating and reliable performance. We commenced 
service in February 2000 and established our primary base of operations 
at New York’s John F. Kennedy International Airport, or JFK, where we 

now have more enplanements than any other airline. As of December 31, 
2012, we served 75 destinations in 23 states, Puerto Rico, the U.S. Virgin 
Islands, Mexico, and 12 countries in the Caribbean and Latin America. 
Our wholly owned subsidiary, LiveTV, LLC, or LiveTV, provides in-ﬂ ight 
entertainment systems for commercial aircraft, including live in-seat 
satellite television, digital satellite radio, wireless aircraft data link service 
and cabin surveillance systems.

NOTE 1 

Summary of Signiﬁ cant Accounting Policies

Basis of Presentation:  Our consolidated ﬁ nancial statements include the 
accounts of JetBlue Airways Corporation, or JetBlue, and our subsidiaries, 
collectively “we” or the “Company”, with all intercompany transactions and 
balances having been eliminated. Air transportation services accounted 
for substantially all the Company’s operations in 2012, 2011 and 2010. 
Accordingly, segment information is not provided for LiveTV. Certain 
prior year amounts have been reclassiﬁ ed to conform to the current year 
presentation.

Use of Estimates: We are required to make estimates and assumptions 
when preparing our consolidated ﬁ nancial statements in conformity with 
accounting principles generally accepted in the United States affecting 
the amounts reported in our consolidated ﬁ nancial statements and 
accompanying notes. Actual results could differ from those estimates.

Fair Value: The Fair Value Measurements and Disclosures topic of the 
Financial Accounting Standards Board’s, or FASB, Accounting Standards 
Codiﬁ cation™, or Codiﬁ cation, establishes a framework for measuring fair 
value and requires enhanced disclosures about fair value measurements. 
Additionally, this topic clariﬁ es that fair value is an exit price, representing 
the amount that would be received to sell an asset or paid to transfer a 
liability in an orderly transaction between market participants. The Fair 
Value Measurements and Disclosures topic also requires disclosure about 
how fair value is determined for assets and liabilities and establishes a 
hierarchy for which these assets and liabilities must be grouped, based 
on signiﬁ cant levels of inputs. See Note 14 for more information.

Cash and Cash Equivalents: Our cash and cash equivalents include 
short-term, highly liquid investments which are readily convertible into cash. 
These investments include money market securities, treasury bills, and 
commercial paper with maturities of three months or less when purchased.

 Restricted Cash: Restricted cash primarily consists of security deposits 
and performance bonds for aircraft and facility leases and funds held in 
escrow for estimated workers’ compensation obligations.

Accounts and Other Receivables: Accounts and other receivables are 
carried at cost. They primarily consist of amounts due from credit card 
companies associated with sales of tickets for future travel. We estimate 
an allowance for doubtful accounts based on known troubled accounts, 
if any, and historical experience of losses incurred.

Investment Securities: Investment securities consist of available-for-sale 
investment securities and held-to-maturity investment securities. When 
sold, we use a speciﬁ c identiﬁ cation method to determine the cost of 
the securities.

Available-for-sale investment securities: Our available-for-sale investment 
securities include (a) highly liquid investments, such as certiﬁ cates of 
deposits and treasury bills, with maturities greater than three months when 
purchased, stated at fair value and (b) commercial paper with maturities 
between three and twelve months, stated at fair value.

Held-to-maturity investment securities: Our held-to-maturity investments 
consist of investment-grade interest bearing instruments, primarily corporate 
bonds, stated at amortized cost, which we do not intend to sell. Those 
with original maturities less than twelve months are included in short-term 
investments on our consolidated balance sheets, and those with original 
maturities in excess of twelve months but less than two years are included 
in long-term investments on our consolidated balance sheets. We did 
not record any signiﬁ cant gains or losses on these securities during the 
twelve months ended December 31, 2012, 2011 or 2010. The estimated 
fair value of these investments approximated their carrying value as of 
December 31, 2012 and 2011.

Also included in our held-to-maturity investment securities as of 
December 31, 2012 are deposits made to lower the interest rate on the 
debt secured by two aircraft as discussed in Note 2. These funds on 
deposit are readily available to us and are invested with the bank with a 
deposit maturity within the next 12 months; however, if we were to draw 
upon this deposit, the interest rates on the debt reverts to the higher rates 
in effect prior to the re-ﬁ nancing. As such, we have classiﬁ ed these time 
deposits as long-term held-to-maturity investments to reﬂ ect our intent to 
hold in connection with the maturity of the associated debt. 

46

JETBLUE AIRWAYS CORPORATION - 2012  10K

The carrying values of investment securities consisted of the following at December 31, 2012 and 2011 (in millions):

ITEM 8 Financial Statements and Supplementary Data

PART II   

Available-for-sale securities
Time deposits
Treasury Bills
Commercial paper

Held-to-maturity securities
Corporate bonds
Government bonds
Time deposits

TOTAL

2012

2011

65   $
68    
142    
275    

313    
40    
57    
410    
685

$

70  
—  
183  
253  

313  
25  
—  
338  
591

$

$

Derivative Instruments: Derivative instruments, including fuel hedge 
contracts and interest rate swap agreements, are stated at fair value, net 
of any collateral postings. Derivative instruments are included in other 
current assets and other current liabilities on our consolidated balance 
sheets. See Note 13 for more information.

Inventories: Inventories consist of expendable aircraft spare parts and 
supplies, which are stated at average cost, and aircraft fuel, which is 
accounted for on a ﬁ rst-in, ﬁ rst-out basis. These items are expensed 

when used or consumed. An allowance for obsolescence on aircraft spare 
parts is provided over the remaining useful life of the related aircraft ﬂ eet.

Property and Equipment: We record our property and equipment at cost 
and depreciate these assets on a straight-line basis to their estimated 
residual values over their estimated useful lives. Additions, modiﬁ cations 
enhancing the operating performance of our assets, and interest related 
to predelivery deposits to acquire new aircraft and for the construction 
of facilities are capitalized.

Estimated useful lives and residual values for our property and equipment are as follows:

Aircraft
In-ﬂ ight entertainment systems
Aircraft parts
Flight equipment leasehold improvements
Ground property and equipment
Leasehold improvements—other
Buildings on leased land

Estimated Useful Life
25 years
5 years
Fleet life
Lower of lease term or economic life
3-10 years
Lower of lease term or economic life
Lease term

Residual Value

20%
0%
10%
0%
0%
0%
0%

Property under capital leases is initially recorded at an amount equal to 
the present value of future minimum lease payments computed on the 
basis of our incremental borrowing rate or, when known, the interest 
rate implicit in the lease. Amortization of property under capital leases 
is on a straight-line basis over the expected useful life and is included in 
depreciation and amortization expense.

We record impairment losses on long-lived assets used in operations when 
events and circumstances indicate that the assets may be impaired and the 
undiscounted future cash ﬂ ows estimated to be generated by the assets 
are less than the assets’ net book value. If impairment occurs, the loss is 
measured by comparing the fair value of the asset to its carrying amount. 
Impairment losses are recorded in depreciation and amortization expense.

Asset Sales: During 2012, we sold two EMBRAER 190 aircraft, which 
we had been leasing to another airline, and six spare aircraft engines. We 
recorded net gains of approximately $10 million, which are included in other 
operating expenses in our consolidated statement of operations. A portion 
of the proceeds received for the engine sales were credits to be applied 
to future invoices from the maintenance provider we sold the engines to. 

Software: We capitalize certain costs related to the acquisition and 
development of computer software. We amortize these costs using the 
straight-line method over the estimated useful life of the software, which 
is generally between ﬁ ve and ten years. The net book value of computer 
software, which is included in other assets on our consolidated balance 
sheets, was $53 million and $50 million at December 31, 2012 and 2011, 
respectively. Amortization expense related to computer software was 
$13  million, $10 million and $13 million for the years ended December 31, 
2012, 2011 and 2010, respectively. Amortization expense related to 
computer software capitalized as of December 31, 2012 is expected to 
be approximately $13 million in 2013, $11 million in 2014, $8 million in 
2015, $6 million in 2016, and $5 million in 2017.

Intangible Assets: Intangible assets consist of acquired take-off and 
landing slots at certain domestic airports. We record these assets at 
cost and amortize them on a straight-line basis over their expected useful 
lives, up to 15 years. In 2011, we acquired eight take-off and landing 
slots at each of New York’s LaGuardia Airport and Washington D.C.’s 
Ronald Reagan National Airport for approximately $72 million, of which 
$32  million was paid in 2012. As of December 31, 2012 and 2011, the 
cost of intangible assets recorded was $76 million in each respective year, 
and the accumulated amortization recorded was $6 million and $2  million, 
respectively, both of which are included in other long term assets on 
our consolidated balance sheet. Amortization expense related to these 
intangible assets is expected to be approximately $5 million in each of 
2013 through 2017. We periodically evaluate these intangible assets for 
impairment; however we have not recorded any impairment losses to date 
through December 31, 2012.

Intangible assets also include an indeﬁ nite lived asset related to an 
air-to-ground spectrum license acquired by LiveTV in 2006 at a public 
auction from the Federal Communications Commission for approximately 
$7  million. In September 2010, we determined this spectrum license had 
been impaired as further discussed in Note 14, which resulted in a loss 
of approximately $5 million being recorded in other operating expenses 
during 2010. There was no further impairment in 2012 or 2011, leaving 
approximately $2 million remaining in other long term assets related to 
this license as of December 31, 2012.

Passenger Revenues: Passenger revenue is recognized net of the taxes 
that we are required to collect from our customers, including federal 
transportation taxes, security taxes and airport facility charges, when the 
transportation is provided or after the ticket or customer credit (issued upon 
payment of a change fee) expires. Tickets sold but not yet recognized as 
revenue and unexpired credits are included in air trafﬁ c liability.

JETBLUE AIRWAYS CORPORATION - 2012  10K 47

 
 
   
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

Loyalty Program: We account for our customer loyalty program, TrueBlue, 
by recording a liability for the estimated incremental cost of providing 
transportation for outstanding points earned from JetBlue purchases that 
we expect to be redeemed. We adjust this liability, which is included in 
air trafﬁ c liability, based on points earned and redeemed, changes in the 
estimated incremental costs associated with providing travel and changes 
in the TrueBlue program.

Points in TrueBlue are also sold to participating companies, including 
credit card and car rental companies. These sales are accounted for 
as multiple-element arrangements, with one element representing the 
travel that will ultimately be provided when the points are redeemed and 
the other consisting of marketing related activities that we conduct with 
the participating company. The fair value of the transportation portion of 
these point sales is deferred and recognized as passenger revenue when 
transportation is provided. The marketing portion, which is the excess of 
the total sales proceeds over the estimated fair value of the transportation 
to be provided, is recognized in other revenue when the points are sold.

TrueBlue points sold to participating companies which are not 
redeemed are recognized as revenue when they expire. We recorded 
$5  million,  $3  million,  and $13 million in revenue related to point expirations 
during 2012, 2011 and 2010, respectively.

Our original co-branded credit card agreement, under which we sell 
TrueBlue points as described above, provided for a minimum cash 
payment guarantee, which was paid to us throughout the life of the 
agreement if speciﬁ ed point sales and other ancillary activity payments 
were not achieved, and was subject to refund in the event that cash 
payments exceeded future minimums through April 2011. We recognized 
approximately $10  million and $5 million of other revenue during 2011 
and 2010, respectively, related to this guarantee.

Upon the re-launch of the TrueBlue program in November 2009, we 
extended our co-branded credit card and membership rewards participation 
agreements. In connection with these extensions, we received a one-time 
payment of $37 million, which we deferred and are recognizing as other 
revenue over the term of the agreement through 2015. We recognized 
approximately $7 million, $6 million, and $3 million of revenue related 
to this one-time payment during 2012, 2011 and 2010, respectively. In 
connection with exclusive beneﬁ ts to be introduced for our co-branded 
credit card, we received a one-time payment of $6 million during 2012, 
which we have deferred and will recognize as other revenue over the term 
of the agreement through 2015. As of December 31, 2012, we have not 
recorded any revenue related to this one-time payment.

LiveTV Revenues and Expenses: We account for LiveTV’s revenues 
and expenses related to the sale of hardware, maintenance of hardware, 
and programming services provided as a single unit in accordance with 
the Revenue Recognition-Multiple-Element Arrangements topic of the 
Codiﬁ cation because we lack objective and reliable evidence of fair 
value of the undelivered items. Revenues and expenses related to these 
components are recognized ratably over the service periods, which 
extend through 2021 as of December 31, 2012. Customer advances to 
be applied in the next 12 months are included in other current liabilities 
on our consolidated balance sheets and those beyond 12 months are 
included in other liabilities on our consolidated balance sheets.

Airframe and Engine Maintenance and Repair: Regular airframe 
maintenance for owned and leased ﬂ ight equipment is charged to expense 
as incurred unless covered by a third-party services contract. We have 
separate service agreements covering certain of our scheduled and 
unscheduled repair of airframe line replacement unit components and 
the engines on our Airbus A320 aircraft. These agreements, which range 
from ten to 15 years, require monthly payments at rates based either on 
the number of cycles each aircraft was operated during each month or 
the number of ﬂ ight hours each engine was operated during each month, 
subject to annual escalations. These power by the hour contracts transfer 
certain risks, including cost risks, to the third-party service providers and 
ﬁ x the amounts we pay per ﬂ ight hour or number of cycles in exchange 
for maintenance and repairs under a predeﬁ ned maintenance program, 
which are representative of the time and materials that would be consumed. 

48

JETBLUE AIRWAYS CORPORATION - 2012  10K

These payments are expensed as the related ﬂ ight hours or cycles are 
incurred. One of our maintenance providers is a subsidiary of a large 
shareholder of ours. During 2012, we recorded approximately $7 million 
in maintenance expense provided by this related party. 

Advertising Costs: Advertising costs, which are included in sales and 
marketing, are expensed as incurred. Advertising expense was $57 million 
in each of 2012 and 2011, and $55 million in 2010.

Share-Based Compensation: We record compensation expense for 
share-based awards based on the grant date fair value of those awards. 
Share-based compensation expense includes an estimate for pre-vesting 
forfeitures and is recognized over the requisite service periods of the 
awards on a straight-line basis, which is generally commensurate with 
the vesting term.

Under the Compensation-Stock Compensation topic of the Codiﬁ cation, 
the beneﬁ ts associated with tax deductions in excess of recognized 
compensation cost are required to be reported as a ﬁ nancing cash ﬂ ow. 
We recorded an insigniﬁ cant amount in excess tax beneﬁ ts generated 
from option exercises in each of 2012, 2011 and 2010.

Our policy is to issue new shares for purchases under all of our stock 
based plans, including our Crewmember Stock Purchase Plan, or CSPP, 
and 2011 Crewmember Stock Purchase Plan and issuances under our 
Amended and Restated 2002 Stock Incentive Plan, or 2002 Plan, and 
our 2011 Incentive Compensation Plan, or 2011 Plan.

Income Taxes: We account for income taxes utilizing the liability method. 
Deferred income taxes are recognized for the tax consequences of 
temporary differences between the tax and ﬁ nancial statement reporting 
bases of assets and liabilities. A valuation allowance for deferred tax assets 
is provided unless realizability is judged by us to be more likely than not. Our 
policy is to recognize interest and penalties accrued on any unrecognized 
tax beneﬁ ts as a component of income tax expense.

New Accounting Standards: Our ﬁ nancial statements are prepared in 
accordance with the Codiﬁ cation which was established in 2009 and 
superseded all then existing accounting standard documents and has 
become the single source of authoritative non-governmental U.S. GAAP. 
New accounting rules and disclosure requirements can impact our ﬁ nancial 
results and the comparability of our ﬁ nancial statements. Authoritative 
literature that has recently been issued which we believe will impact our 
consolidated ﬁ nancial statements is described below. There are also several 
new proposals under development, including proposals related to leases, 
revenue recognition and ﬁ nancial instruments, if and when enacted, may 
have a signiﬁ cant impact on our ﬁ nancial statements.

On January 1, 2012, Accounting Standards Update 2011-05, or ASU 2011-
05, amending the Comprehensive Income topic of the Codiﬁ cation, became 
effective. This update changes the requirements for the presentation of 
other comprehensive income, eliminating the option to present components 
of other comprehensive income as part of the statement of changes in 
stockholders’ equity, among other things. ASU 2011-05 requires that 
all non-owner changes in stockholders’ equity be presented either in a 
single continuous statement of comprehensive income or in two separate 
but consecutive statements. We have included a separate statement 
of comprehensive income in the accompanying consolidated ﬁ nancial 
statements for the years ended December 31, 2012, 2011 and 2010. In 
December 2011, the FASB issued ASU 2011-12, delaying the effective date 
of the portion of ASU 2011-05 related to the presentation of reclassiﬁ cation 
adjustments out of accumulated other comprehensive income.

On January 1, 2012, ASU 2011-04, which amended the Fair Value 
Measurements and Disclosures topic of the Codiﬁ cation, became effective. 
The amendments in this update were intended to result in common fair 
value measurement and disclosure requirements in U.S. GAAP and 
International Financial Reporting Standards, or IFRS. ASU 2011-04 
expands and enhances current disclosures about fair value measurements 
and clariﬁ es the FASB’s intent about the application of existing fair value 
measurement requirements in certain circumstances. We adopted these 
amendments prospectively on January 1, 2012.

ITEM 8 Financial Statements and Supplementary Data

PART II   

In December 2011, the FASB issued ASU 2011-11, amending the Balance 
Sheet topic of the Codiﬁ cation. This update enhances the disclosure 
requirements regarding offsetting assets and liabilities. ASU 2011-11 requires 
entities to disclose both gross information and net information about both 
instruments and transactions eligible for offset in the statement of ﬁ nancial 
position and instruments and transactions subject to an agreement similar to 
a master netting arrangement. These amendments are effective for annual 
and interim reporting periods beginning on or after January 1, 2013 and 
should be applied retrospectively. We will evaluate any instruments and 
transactions, including derivative instruments, which are eligible for offset 
but we do not expect that the adoption of this standard will have a material 
impact on our our consolidated ﬁ nancial statements or notes thereto.

On January 1, 2011, the September 2009 Emerging Issues Task Force 
updates to the Revenue Recognition topic of the Codiﬁ cation rules became 
effective, which changed the accounting for certain revenue arrangements. 
The new requirements change the allocation methods used in determining 
how to account for multiple element arrangements and may result in 
accounting for more deliverables and potentially change the amount of 
revenue deferrals. Additionally, this new accounting treatment requires 
enhanced disclosures in ﬁ nancial statements. This new accounting 
treatment will impact any new contracts entered into by LiveTV, as well as 
any TrueBlue loyalty program or commercial partnership arrangements we 
may enter into or materially modify. Since adoption of this new accounting 
treatment, we have not entered into any material new or modiﬁ ed contracts.

NOTE 2 

Long-term Debt, Short-term Borrowings and Capital Lease Obligations

Long-term debt and capital lease obligations and the related weighted average interest rate at December 31, 2012 and 2011 consisted of the following (in millions):

Secured Debt
Floating rate equipment notes, due through 2025 (1)
Floating rate enhanced equipment  notes (2) (3)

Class G-1, due 2013, 2014 and 2016
Class G-2, due 2014 and 2016
Class B-1, due 2014

Fixed rate equipment notes, due through 2026
Fixed rate special facility bonds, due through 2036 (4)
Unsecured Debt
6.75% convertible debentures due in 2039 (5)
5.5% convertible debentures due in 2038 (6)
Capital Leases (7)
Total debt and capital lease obligations
Less: Current maturities
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
(1) 
(2) 

$

$

816 

173 
373 
49 
960 
82 

162 
123 
113 
2,851 
(394)
2,457 

2012

2.7% $

743 

3.1%  
2.6%  
6.5%  
6.3%  
6.0%  

3.9%  

  $

202 
373 
49 
1,192 
83 

162 
123 
121 
3,048 
(198)
2,850 

2011 

2.8%

3.1%
2.5%
6.1%
6.3%
6.0%

3.9%

Interest rates adjust quarterly or semi-annually based on the London Interbank Offered Rate, or LIBOR, plus a margin.
In November 2006, we completed a public offering of $124 million of pass-through certificates to finance certain of our owned aircraft spare parts. Separate trusts were established for each 
class of these certificates. In November 2011, we redeemed $3 million of class G-1 certificates. The remaining principal amount of the Class G-1 and Class B-1 certificates is scheduled to 
be paid in a lump sum on the applicable maturity date. In April 2009, we entered into interest rate swap agreements that have effectively fixed the interest rate increases for the remaining 
term of half of the Class G-1 certificates and all of the Class B-1 certificates for the November 2006 offering. The swapped portion of the Class G-1 and Class B-1 certificates had a balance 
of $37 million and $49 million, respectively, at December 31, 2012, and the effective interest rates are included in the above table. The interest rate for the remaining $34 million of the 
Class G-1 certificates is based on three month LIBOR plus a margin. Interest is payable quarterly.
In November 2004 and March 2004, we completed public offerings of $498 million and $431 million, respectively, of pass-through certificates to finance the purchase of 28 new Airbus 
A320 aircraft delivered through 2005. Separate trusts were established for each class of these certificates. Quarterly principal payments are required on the Class G-1 certificates. The entire 
principal amount of the Class G-2 certificates is scheduled to be paid in a lump sum on the applicable maturity dates. In February 2008, we entered into interest rate swap agreements that 
have effectively fixed the interest rate for the remaining term of the Class G-1 certificates for the November 2004 offering. These certificates had a balance of $76 million at December 31, 
2012 and an effective interest rate of 4.5%. In February 2009, we entered into interest rate swap agreements that have effectively fixed the interest rate for the remaining term of the Class 
G-2 certificates for the November 2004 offering. These certificates had a balance of $185 million at December 31, 2012 and the effective interest rate is included in the above table. The 
interest rate for all other certificates is based on three month LIBOR plus a margin. Interest is payable quarterly.
In December 2006, the New York City Industrial Development Agency issued special facility revenue bonds for JFK and, in November 2005, the Greater Orlando Aviation Authority issued 
special purpose airport facilities revenue bonds, in each case for reimbursement to us for certain airport facility construction and other costs. We have recorded the principal amount of these 
bonds, net of discounts, as long-term debt on our consolidated balance sheets because we have issued a guarantee of the debt payments on the bonds. This fixed rate debt is secured by 
leasehold mortgages of our airport facilities.

(3) 

(4) 

 (5)  On June 9, 2009, we completed a public offering of $115 million aggregate principal amount of 6.75% Series A convertible debentures due 2039, or the Series A 6.75% Debentures, and 
$86 million aggregate principal amount of 6.75% Series B convertible debentures due 2039, or the Series B 6.75% Debentures, and collectively with the Series A 6.75% Debentures, the 
6.75% Debentures. The 6.75% Debentures are general obligations and rank equal in right of payment with all of our existing and future senior unsecured debt, effectively junior in right of 
payment to our existing and future secured debt, including our secured equipment debentures, to the extent of the value of the assets securing such debt, and senior in right of payment to 
any subordinated debt. In addition, the 6.75% Debentures are structurally subordinated to all existing and future liabilities of our subsidiaries. The net proceeds were approximately $197 
million after deducting underwriting fees and other transaction related expenses. Interest on the 6.75% Debentures is payable semi-annually on April 15 and October 15. The first interest 
payment on the 6.75% Debentures was paid October 15, 2009.
Holders of either the Series A or Series B 6.75% Debentures may convert them into shares of our common stock at any time at a conversion rate of 204.6036 shares per $1,000 principal 
amount of the 6.75% Debentures. The conversion rates are subject to adjustment should we declare common stock dividends or effect any common stock splits or similar transactions. 
If the holders convert the 6.75% Debentures in connection with a fundamental change that occurs prior to October 15, 2014 for the Series A 6.75% Debentures or October 15, 2016 for 
the Series B 6.75% Debentures, the applicable conversion rate may be increased depending on our then current common stock price. The maximum number of shares into which all of 
the 6.75% Debentures are convertible, including pursuant to this make-whole fundamental change provision, is 235.2941 shares per $1,000 principal amount of the 6.75% Debentures 
outstanding, as adjusted, or 38.1 million shares as of December 31, 2012.

We may redeem any of the 6.75% Debentures for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after October 15, 2014 
for the Series A 6.75% Debentures and October 15, 2016 for the Series B 6.75% Debentures. Holders may require us to repurchase the 6.75% Debentures for cash at a repurchase price 
equal to 100% of their principal amount plus accrued and unpaid interest, if any, on October 15, 2014, 2019, 2024, 2029 and 2034 for the Series A 6.75% Debentures and October 15, 
2016, 2021, 2026, 2031 and 2036 for the Series B 6.75% Debentures; or at any time prior to their maturity upon the occurrence of a certain designated event.

JETBLUE AIRWAYS CORPORATION - 2012  10K 49

 
 
 
   
   
 
   
   
 
   
   
 
   
   
 
 
 
 
 
 
   
   
 
   
   
 
   
 
   
 
   
 
   
 
 
   
 
   
 
   
 
   
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

During 2011, we repurchased a total of $39 million principal amount of our Series A 6.75% Debentures for approximately $45 million. We recognized a loss of approximately $6 million on 
these transactions, which is included in interest income and other on our consolidated statements of operation during 2011.
We evaluated the various embedded derivatives within the supplemental indenture for bifurcation from the 6.75% Debentures under the applicable provisions, including the basic conversion 
feature,  the  fundamental  change  make-whole  provision  and  the  put  and  call  options.  Based  upon  our  detailed  assessment,  we  concluded  these  embedded  derivatives  were  either 
(i) excluded from bifurcation as a result of being clearly and closely related to the 6.75% Debentures or are indexed to our common stock and would be classified in stockholders’ equity if 
freestanding or (ii) are immaterial embedded derivatives. 

(6)  On June 4, 2008, we completed a public offering of $100.6 million aggregate principal amount of 5.5% Series A convertible debentures due 2038, or the Series A 5.5% Debentures, and 
$100.6 million aggregate principal amount of 5.5% Series B convertible debentures due 2038, or the Series B 5.5% Debentures, and collectively with the Series A 5.5% Debentures, the 
5.5% Debentures. The 5.5% Debentures are general senior obligations and were originally secured in part by an escrow account for each series. We deposited approximately $32 million 
of the net proceeds from the offering, representing the first six scheduled semi-annual interest payments on the 5.5% Debentures, into escrow accounts for the exclusive benefit of the 
holders of each series of the 5.5% Debentures. As of December 31, 2011, all funds originally deposited in the escrow account had been used. Interest on the 5.5% Debentures is payable 
semi-annually on April 15 and October 15.
Holders of the Series A 5.5% Debentures may convert them into shares of our common stock at any time at a conversion rate of 220.6288 shares per $1,000 principal amount of Series A 
5.5% Debenture. Holders of the Series B 5.5% Debentures may convert them into shares of our common stock at any time at a conversion rate of 225.2252 shares per $1,000 principal 
amount of Series B 5.5% Debenture. The conversion rates are subject to adjustment should we declare common stock dividends or effect any common stock splits or similar transactions. 
If the holders convert the 5.5% Debentures in connection with any fundamental corporate change that occurs prior to October 15, 2013 for the Series A 5.5% Debentures or October 15, 
2015 for the Series B 5.5% Debentures, the applicable conversion rate may be increased depending upon our then current common stock price. The maximum number of shares of 
common stock into which all of the remaining 5.5% Debentures are convertible, including pursuant to this make-whole fundamental change provision, is 33.2 million shares. Holders who 
converted their 5.5% Debentures prior to April 15, 2011 received, in addition to the number of shares of our common stock calculated at the applicable conversion rate, a cash payment 
from the escrow account for the 5.5% Debentures of the series converted equal to the sum of the remaining interest payments that would have been due on or before April 15, 2011 in 
respect of the converted 5.5% Debentures.
We may redeem any of the 5.5% Debentures for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after October 15, 2013 
for the Series A 5.5% Debentures and October 15, 2015 for the Series B 5.5% Debentures. Holders may require us to repurchase the 5.5% Debentures for cash at a repurchase price equal 
to 100% of their principal amount plus accrued and unpaid interest, if any, on October 15, 2013, 2018, 2023, 2028, and 2033 for the Series A 5.5% Debentures and October 15, 2015, 
2020, 2025, 2030, and 2035 for the Series B 5.5% Debentures; or at any time prior to their maturity upon the occurrence of a specified designated event.
On June 4, 2008, in conjunction with the public offering of the 5.5% Debentures described above, we also entered into a share lending agreement with Morgan Stanley & Co. Incorporated, 
an affiliate of the underwriter of the offering, or the share borrower, pursuant to which we loaned the share borrower approximately 44.9 million shares of our common stock. Under the 
share lending agreement, the share borrower is required to return the borrowed shares when the debentures are no longer outstanding. We did not receive any proceeds from the sale of 
the borrowed shares by the share borrower, but we did receive a nominal lending fee of $0.01 per share from the share borrower for the use of borrowed shares.
Our share lending agreement requires that the shares borrowed be returned upon the maturity of the related debt, October 2038, or earlier, if the debentures are no longer outstanding. We 
determined the fair value of the share lending arrangement was approximately $5 million at the date of the issuance based on the value of the estimated fees the shares loaned would have 
generated over the term of the share lending arrangement. The $5 million value was recognized as a debt issuance cost and is being amortized to interest expense through the earliest put 
date of the related debt, October 2013 and October 2015 for Series A and Series B, respectively. As of December 31, 2012, approximately $1 million of net debt issuance costs remain 
outstanding related to the share lending arrangement and will continue to be amortized through the earliest put date of the related debt.
During 2008 and 2009, approximately $79 million principal amount of the 5.5% Debentures were voluntarily converted by holders. As a result, we issued 17.5 million shares of our common 
stock. Cash payments from the escrow accounts related to the 2008 conversions were $11 million and borrowed shares equivalent to the number of shares of our common stock issued 
upon these conversions were returned to us pursuant to the share lending agreement described above. The borrower returned 10.0 million shares to us in September 2009, almost all of 
which were voluntarily returned shares in excess of converted shares, pursuant to the share lending agreement. In October 2011, approximately 16.6 million shares were voluntarily returned 
to us by the borrower, leaving 1.4 million shares outstanding under the share lending arrangement. The fair value of similar common shares not subject to our share lending arrangement, 
based upon our closing stock price, was approximately $8 million. At December 31, 2012, the remaining principal balance was $123 million, which is currently convertible into 27.4 million 
shares of our common stock.

(7)  At December 31, 2012 and 2011, four capital leased Airbus A320 aircraft were included in property and equipment at a cost of $152 million with accumulated amortization of $28 million 
and $23 million, respectively. The future minimum lease payments under these non-cancelable leases are $14 million in each of 2013 through 2017 and $82 million in the years thereafter. 
Included in the future minimum lease payments is $39 million representing interest, resulting in a present value of capital leases of $113 million with a current portion of $8 million and a 
long-term portion of $105 million.  

During 2012, we modiﬁ ed the debt secured by three of our Airbus A320 aircraft, effectively lowering the borrowing rates over the remaining term of the 
loans. In exchange for lower borrowing rates associated with two of these aircraft loans, we deposited funds equivalent to the outstanding principal 
balance, a total of approximately $57 million, as discussed in Note 1. The deposit, which is included in long-term investment securities on our consolidated 
balance sheet, will be reduced as quarterly principal payments are made. If we withdraw the funds deposited, the interest rate on the debt reverts back 
to the original borrowing rate. 

Maturities of long-term debt and capital leases, including the assumption that our convertible debt will be redeemed upon the ﬁ rst put date, for the next ﬁ ve 
years are as follows (in millions):

Year
2013
2014
2015
2016
2017
Thereafter

$

Maturities
394
572
258
456
182
989

We are subject to certain collateral ratio requirements in our spare parts pass-through certiﬁ cates and spare engine ﬁ nancing issued in November 2006 
and December 2007, respectively. If we fail to maintain these collateral ratios, we are required to provide additional collateral or redeem some or all of 
the equipment notes so that the ratios return to compliance. As a result of reduced third party valuation of these parts, we pledged as collateral a spare 
engine with a carrying market value of approximately $7 million during the second quarter of 2011. In order to maintain the ratios, we elected to redeem 
$3 million of the equipment notes in November 2011.

Aircraft, engines, and other equipment and facilities having a net book value of $3.61 billion at December 31, 2012 were pledged as security under 
various loan agreements. Cash payments for interest related to debt and capital lease obligations, net of capitalized interest, aggregated $136  million, 
$136 million and $138 million in 2012, 2011 and 2010, respectively.

50

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
The carrying amounts and estimated fair values of our long-term debt at December 31, 2012 and 2011 were as follows (in millions):

ITEM 8 Financial Statements and Supplementary Data

PART II   

December 31, 2012
Estimated 
Fair Value

Carrying
 Value

December 31, 2011
Estimated 
Fair Value

Carrying
 Value

$

$

173 $
373  
49  
82  
162  
123  

816  
960  
2,738 $

164 $
351  
48  
82  
225  
173  

776  
1,050  
2,869 $

202 $
373  
49  
83  
162  
123  

743  
1,192  
2,927 $

185
316
47
76
214
162

712
1,293
3,005

We have determined that each of the trusts related to our aircraft EETCs 
meet the deﬁ nition of a variable interest entity as deﬁ ned in the Consolidations 
topic of the Codiﬁ cation and must be considered for consolidation in 
our ﬁ nancial 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 
beneﬁ ts 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 that we are not the primary 
beneﬁ ciary 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 
ﬁ nancial statements.

Public Debt
Floating rate enhanced equipment notes
Class G-1, due 2013, 2014, and 2016
Class G-2, due 2014 and 2016
Class B-1, due 2014

Fixed rate special facility bonds, due through 2036
6.75% convertible debentures due in 2039
5.5% convertible debentures due in 2038
Non-Public Debt
Floating rate equipment notes, due through 2025
Fixed rate equipment notes, due through 2026
TOTAL

The estimated fair values of our publicly held long-term debt are classiﬁ ed 
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 ﬂ ow analysis based on our 
borrowing rates for instruments with similar terms and therefore classiﬁ ed 
as Level 3 in the fair value hierarchy. The fair values of our other ﬁ nancial 
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 certiﬁ cates. The policy provider has unconditionally guaranteed 
the payment of interest on the certiﬁ cates when due and the payment of 
principal on the certiﬁ cates no later than 18 months after the ﬁ nal expected 
regular distribution date. The policy provider is MBIA Insurance Corporation 
(a subsidiary of MBIA, Inc.).

Short-term Borrowings

Unsecured Revolving Credit Facility

Morgan Stanley Line of Credit 

In September 2011, we entered into a corporate purchasing line with 
American Express, which allows us to borrow up to a maximum of 
$125  million. Borrowings cannot exceed $30 million per week and may 
only be used for the purchase of jet fuel. Borrowings on this corporate 
purchasing line are subject to our compliance with the terms and conditions 
of the credit agreement, including certain ﬁ nancial covenants which include 
a requirement to maintain certain cash and short term investment levels 
and a minimum earnings before income taxes, interest, depreciation and 
amortization, or EBITDA margin, as well as customary events of default. 
Borrowings, which are to be paid monthly, are subject to a 6.9% annual 
interest rate but could be higher if borrowing activity does not reach certain 
levels. This borrowing facility will terminate no later than January 5, 2015. 
As of December 31, 2012, we did not have a balance outstanding under 
this 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 ﬂ oating rate based upon LIBOR plus 
100 basis points. As of December 31, 2012, we did not have a balance 
outstanding under this line of credit. 

JETBLUE AIRWAYS CORPORATION - 2012  10K 51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

NOTE 3 

Operating Leases

We lease aircraft, as well as airport terminal space, other airport facilities, 
ofﬁ ce space and other equipment, under leases which expire in various 
years through 2035. Total rental expense for all operating leases in 
2012, 2011 and 2010 was $284 million, $269 million and $245 million, 
respectively. We have approximately $30 million in assets that serve as 
collateral for letters of credit related to certain of our leases, which are 
included in restricted cash.

During 2012, we extended the leases on three Airbus A320 aircraft; leases 
which were previously set to expire in 2013. These extensions resulted 
in an additional $24 million of lease commitments through 2018. During 
2011, we extended the leases on four Airbus A320 aircraft; leases which 
we previously set to expire in 2012. These extensions resulted in an 
additional $19 million of lease commitments through 2015.

During 2010, we leased six used Airbus A320 aircraft from a third party, 
each with a separate six year operating lease term.

At December 31, 2012, 60 of the 180 aircraft we operated were leased 
under operating leases, with lease expiration dates ranging from 2014 to 
2026. As of December 31, 2012, two of our Airbus A320 aircraft leases 
were scheduled to expire within 18 months. Five of the 60 aircraft operating 
leases have variable rate rent payments based on LIBOR. Leases for 52 of 

our aircraft can generally be renewed at rates based on fair market value at 
the end of the lease term for one or two years. We have purchase options 
in 45 of our aircraft leases at the end of the lease term at fair market value 
and a one-time option during the term at ﬁ xed amounts that were expected 
to approximate fair market value at lease inception.

In 2010, we executed a supplement to our Terminal 5 lease with the Port 
Authority of New York and New Jersey, or PANYNJ. Under this supplement, 
we leased the 19.35 acre portion of JFK known as Terminal 6, which is 
adjacent to our current facility at Terminal 5. We were responsible for the 
demolishing, and related activities, of the Terminal 6 passenger terminal 
buildings, the costs of which will be reimbursed by the PANYNJ. The 
lease supplement also contains an option to extend our current Terminal 
5 structure onto this property.

In May 2012, the PANYNJ approved our expansion to Terminal 5 to 
accommodate a new international arrivals facility. In October 2012, we 
commenced construction on our new international arrivals facility, or T5i, 
which we expect to open in early 2015. T5i will include six international 
arrival gates comprised of three new and three converted from Terminal 5, 
as well as an international arrivals hall with full U.S. Customs and Border 
Protection services. During 2012, we incurred approximately $17 million 
in capital expenditures related to T5i.

Future minimum lease payments under noncancelable operating leases, including those described above, with initial or remaining terms in excess of one year 
at December 31, 2012, are as follows (in millions):

2013
2014
2015
2016
2017
Thereafter
TOTAL MINIMUM OPERATING LEASE PAYMENTS

Aircraft

Other

$

$

132 $
138  
143  
82  
70  
331  
896 $

66 $
56  
48  
43  
41  
342  
596 $

Total
198
194
191
125
111
673
1,492

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 ﬁ nancial support, these trusts are variable interest entities 
as deﬁ ned in the Consolidations topic of the Codiﬁ cation and must be 
considered for consolidation in our ﬁ nancial statements. Our assessment 
of each trust 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 beneﬁ ts and losses of the trusts. JetBlue does 
not retain any equity interests in any of these trusts and our obligations to 
them are limited to the ﬁ xed rental payments we are required to make to 
them, which were approximately $795 million as of December 31, 2012 
and are reﬂ ected in the future minimum lease payments in the table above. 
Our only interest in these entities are the purchase options to acquire the 
aircraft as speciﬁ ed above. 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 beneﬁ ciary of these trusts. We account for these 
leases as operating leases, following the appropriate lease guidance as 
required by the Leases topic in the Codiﬁ cation.

NOTE 4 

JFK Terminal 5

In 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 various 
lease agreements with the PANYNJ. Under the terms of the facility 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. 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 are reﬂ ected in the future minimum lease payments 
table in Note 3, and facility rents which commenced in 2008 when we took 
beneﬁ cial occupancy of Terminal 5, and are included below. The facility 
rents are based on the number of passengers enplaned out of the terminal, 
subject to annual minimums. The lease terms end in 2038 and we have a 
one-time early termination option in 2033.

52

JETBLUE AIRWAYS CORPORATION - 2012  10K

We were considered the owner of the Project for ﬁ nancial reporting purposes 
only and have been required to reﬂ ect an asset and liability for the Project 
on our consolidated balance sheets since construction commenced in 
2005. Since certain elements of the Project, including the parking garage 
and AirTrain Connector, are not subject to the underlying ground lease, 
following their delivery to and acceptance by the PANYNJ in October 2008, 
we removed them from our consolidated balance sheets. Our continuing 
involvement in the remainder of the Project precludes us from sale and 
leaseback accounting; therefore the cost of these elements of the Project 
and the related liability will remain on our consolidated balance sheets and 
be accounted for as a ﬁ nancing.

 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

Through December 31, 2012, total costs incurred for the elements 
of the Project which are subject to the underlying ground lease were 
$637  million, $561 million of which is reﬂ ected as Assets Constructed for 
Others and $76 million of which are leasehold improvements included 
in ground property and equipment in our consolidated balance sheets. 
These amounts reﬂ ect a non-cash $133 million reduction in 2008 for 
costs incurred for the elements that were not subject to the underlying 
ground lease. Assets Constructed for Others are being amortized over the 
shorter of the 25 year non-cancelable lease term or their economic life. 
We recorded $23 million in amortization expense in 2012, and $22  million 
in each of 2011 and 2010.

The PANYNJ has reimbursed us for the amounts currently included in Assets 
Constructed for Others, exclusive of capitalized interest of $68  million. These 
reimbursements and the capitalized interest are reﬂ ected as Construction 
Obligation in our consolidated balance sheets. As facility rents are paid, 
they are treated as 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 in each of 2013 through 2017 
and $656 million thereafter. The portion of these scheduled payments 
serving to reduce the principal balance of the Construction Obligation is 
$13 million in 2013, $14 million in 2014, $15 million in each of 2015 and 
2016 and $16 million in 2017. Payments could exceed these amounts 
depending on future enplanement levels at JFK. Scheduled facility payments 
representative of interest totaled $27 million, $28 million and $27 million 
in 2012, 2011 and 2010, respectively.

We have subleased a portion of Terminal 5, primarily space for 
concessionaires as well as to Hawaiian Airlines, who beginning in 2012 
began operating out of Terminal 5. Minimum lease payments due to us 
are subject to various escalation amounts through 2019 and also include 
a percentage of gross receipts, which may vary from month to month. 
Future minimum lease payments due to us during each of the next ﬁ ve 
years are estimated to be $11 million per year in each of 2013 through 
2016, and $8 million in 2017.

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 ﬁ ve 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. The shares repurchased under our share repurchase program 
were purchased in open market transactions.

Pursuant to our amended Stockholder Rights Agreement, which became 
effective in February 2002, each share of common stock has attached 
to it a right and, until the rights expire or are redeemed, each new share 
of common stock issued by the Company will include one right. Upon 
the occurrence of certain events described below, each right entitles the 
holder to purchase one one thousandth of a share of Series A participating 
preferred stock at an exercise price of $35.55, subject to further adjustment. 
The rights become exercisable only after any person or group acquires 
beneﬁ cial ownership of 15% or more (25% or more in the case of certain 
speciﬁ ed stockholders) of the Company’s outstanding common stock or 
commences a tender or exchange offer that would result in such person 

NOTE 6 

Earnings Per Share

or group acquiring beneﬁ cial ownership of 15% or more (25% or more 
in the case of certain stockholders) of the Company’s common stock. If 
after the rights become exercisable, the Company is involved in a merger 
or other business combination or sells more than 50% of its assets or 
earning power, each right will entitle its holder (other than the acquiring 
person or group) to receive common stock of the acquiring company 
having a market value of twice the exercise price of the rights. The rights 
expired on April 17, 2012.

As of December 31, 2012, we had a total of 187.6 million shares of our 
common stock reserved for issuance related to our 2011 Plan, our 2002 
Plan, our 2011 CSPP, our original CSPP, our convertible debt, and our share 
lending facility. As of December 31, 2012, we had a total of 49.6  million 
shares of treasury stock, the majority of which resulted from the return of 
borrowed shares under our share lending agreement and also includes 
shares repurchased under our share repurchase program described above. 
Refer to Note 2 for further details on the share lending agreement and 
Note 7 for further details on our share-based compensation.

The following table shows how we computed basic and diluted earnings per common share for the years ended December 31 (dollars in millions; share 
data in thousands):

Numerator:
Net income
Effect of dilutive securities:

Interest on convertible debt, net of income taxes and discretionary proﬁ t sharing

Net income applicable to common stockholders after assumed conversion for diluted 
earnings per share
Denominator:
Weighted-average shares outstanding for basic earnings per share
Effect of dilutive securities:
Employee stock options
Convertible debt

Adjusted weighted-average shares outstanding and assumed conversions for diluted 
earnings per share
Shares excluded from EPS calculation (in millions):
Shares issuable upon conversion of our convertible debt since assumed conversion would 
be antidilutive
Shares issuable upon exercise of outstanding stock options since assumed exercise 
would be antidilutive

2012

2011

$

$

128 $

9  

137 $

86 $

12  

98 $

2010

97

11

108

282,317  

278,689  

275,364

1,237  
60,575  

1,660  
66,118  

2,611
68,605

344,129  

346,467  

346,580

—  

19.5  

—  

22.3  

—

24.0

JETBLUE AIRWAYS CORPORATION - 2012  10K 53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

As of December 31, 2012, a total of approximately 1.4 million shares of our 
common stock, which were lent to our share borrower pursuant to the terms 
of our share lending agreement as described in Note 2, were issued and 
outstanding for corporate law purposes. Holders of the borrowed shares 
have all the rights of a holder of our common stock. However, because 

the share borrower must return all borrowed shares to us (or identical 
shares or, in certain circumstances of default by the counterparty, the cash 
value thereof), the borrowed shares are not considered outstanding for the 
purpose of computing and reporting basic or diluted earnings per share.

NOTE 7 

Share-Based Compensation

Fair Value Assumptions: We used a Black-Scholes-Merton option pricing 
model to estimate the fair value of share-based awards in accordance 
with the Compensation-Stock Compensation topic of the Codiﬁ cation, 
for stock options under our 2002 Plan. The Black-Scholes-Merton option 
pricing model incorporates various and highly subjective assumptions, 
including expected term and expected volatility. We reviewed our historical 
pattern of option exercises under our 2002 Plan, and determined that 
meaningful differences in option exercise activity existed among employee 
job categories. Therefore, for all stock options granted after January 1, 
2006, we categorized these awards into three groups of employees for 
valuation purposes.

We estimated the expected term of options granted using an implied life 
derived from the results of a lattice model, which incorporates our historical 
exercise and post-vesting employment termination patterns, which we 
believe are representative of future behavior. The expected term for our 
restricted stock units is based on the associated service period.

We estimated the expected volatility of our common stock at the grant 
date using a blend of 75% historical volatility of our common stock and 
25% implied volatility of two-year publicly traded options on our common 
stock as of the option grant date. Our decision to use a blend of historical 
and implied volatility was based upon the volume of actively traded options 
on our common stock and our belief that historical volatility alone may not 
be completely representative of future stock price trends.

Our risk-free interest rate assumption was determined using the Federal 
Reserve nominal rates for U.S. Treasury zero-coupon bonds with maturities 

similar to those of the expected term of the award being valued. We have 
never paid any cash dividends on our common stock and we do not 
anticipate paying any cash dividends in the foreseeable future. Therefore, 
we assumed an expected dividend yield of zero.

Additionally, the Compensation-Stock Compensation topic of the Codiﬁ cation 
requires us to estimate pre-vesting forfeitures at the time of grant and 
periodically revise those estimates in subsequent periods if actual forfeitures 
differ from those estimates. We record stock-based compensation expense 
only for those awards expected to vest using an estimated forfeiture rate 
based on our historical pre-vesting forfeiture data.

We have not granted any stock options since 2008 and those previously 
granted became fully expensed in 2012. Unrecognized stock-based 
compensation expense was approximately $15 million as of December 31, 
2012, relating to a total of 4.5 million unvested restricted stock units under 
our 2002 Plan and 2011 Plan. We expect to recognize this stock-based 
compensation expense over a weighted average period of approximately 
two years. The total fair value of stock options vested was approximately 
$2  million, $5 million and $9 million during 2012, 2011 and 2010, respectively.

2011 Incentive Compensation Plan: At our Annual Shareholders Meeting 
held on May 26, 2011, our shareholders approved the new 2011 Incentive 
Compensation Plan, which replaced the 2002 Plan, which was set to 
expire at the end of 2011. Upon inception, the 2011 Plan had 15.0 million 
shares of our common stock reserved for issuance. The 2011 Plan, by its 
terms, will terminate no later than May 2021.

The following is a summary of restricted stock unit activity under the 2011 Plan for the year ended December 31, 2012. Activity in 2011 for the 2011 
Plan was insigniﬁ cant.

Nonvested at beginning of year
Granted
Vested
Forfeited
NONVESTED AT END OF YEAR

2012
Weighted Average Grant 
Date Fair Value
5.08
5.79
5.09
5.83
5.77

Shares
65,914   $

2,570,891    
(20,249)
(132,892)
2,483,664   $

Amended and Restated 2002 Stock Incentive Plan: The 2002 Plan, 
which included stock options issued during 1999 through 2001 under a 
previous plan as well as all options issued from 2002 through adoption of 
the 2011 Plan provided for incentive and non-qualiﬁ ed stock options and 
restricted stock units to be granted to certain employees and members 
of our Board of Directors, as well as deferred stock units to be granted 
to members of our Board of Directors. The 2002 Plan became effective 
following our initial public offering in April 2002.

Beginning in 2007, we began issuing restricted stock units under the 2002 
Plan. These awards vest in annual installments over three years or could 
be accelerated upon the occurrence of a change in control as deﬁ ned 
in the 2002 Plan. Our policy is to grant restricted stock units based on 
the market price of the underlying common stock on the date of grant.

54

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

The following is a summary of restricted stock unit activity under the 2002 Plan for the year ended December 31:

Nonvested at beginning of year
Granted
Vested
Forfeited
NONVESTED AT END OF YEAR

2012

2011

2010

Weighted 
Average 
Grant Date 
Fair Value
5.64
—
5.41
5.76
5.85

Weighted 
Average 
Grant Date 
Fair Value
5.18
6.01
5.26
5.53
5.64

Weighted 
Average 
Grant Date 
Fair Value
5.13
5.36
5.32
5.21
5.18

Shares
3,310,374
2,086,973
(1,262,459)
(453,875)
3,681,013

$

$

Shares
3,681,013
2,677,809
(1,731,145)
(534,193)
4,093,484

$

$

Shares
4,093,484

$

—  

(1,921,940)
(142,463)
2,029,081

$

The total intrinsic value, determined as of the date of vesting, of all restricted 
stock units under both Plans vested and converted to shares of common 
stock during the year ended December 31, 2012, 2011 and 2010 was 
$11 million, $10 million and $7 million respectively.

We began issuing deferred stock units in 2008 under the 2002 Plan to 
members of our Board of Directors. Prior to 2011, these awards vested 
immediately upon being granted. Beginning in 2011, the vesting period 
was changed to either one or three years of service. Once vested, shares 
are issued six months and one day following the Director’s departure 
from the Board. During the years ended December 31, 2012 and 2011, 
we granted an insigniﬁ cant amount of deferred stock units, almost all of 
which remain outstanding at December 31, 2012.

Prior to January 1, 2006, stock options under the 2002 Plan became 
exercisable when vested, which occurred in annual installments of three 
to seven years. For issuances under the 2002 Plan beginning in 2006, 
we revised the vesting terms so that all options granted vest in equal 
installments over a period of three or ﬁ ve years, or upon the occurrence 
of a change in control. All options issued under the 2002 Plan expire 
ten years from the date of grant. Our policy is to grant options with an 
exercise price equal to the market price of the underlying common stock 
on the date of grant.

The following is a summary of stock option activity for the years ended December 31 :

Outstanding at beginning of year
Granted
Exercised
Forfeited
Expired
Outstanding at end of year
Vested at end of year
Available for future grants

2012

2011

2010

Weighted 
Average 
Exercise Price
13.91
—
4.00
—
12.03
14.87
14.87

Shares
21,807,170  $

— 
(493,731)
— 
(5,468,315)
15,845,124  $
15,845,124  $
56,105,162 

Weighted 
Average 
Exercise Price
13.42
—
2.09
8.92
13.33
13.91
13.94

Shares
23,600,494  $

— 
(934,993)
(23,700)
(834,631)
21,807,170  $
21,550,526  $
50,494,384 

Weighted 
Average 
Exercise Price
12.88
—
1.61
11.32
13.40
13.42
13.47

Shares
25,592,883  $

— 
(1,158,187)
(27,605)
(806,597)
23,600,494  $
22,504,450  $
39,997,981 

The following is a summary of outstanding stock options at December 31, 2012:

Range of exercise prices
$7.79 to $29.71

The total intrinsic value, determined as of the date of exercise, of options 
exercised during the twelve months ended December 31, 2012, 2011 
and 2010 was $1 million, $3 million and $5 million, respectively. Amounts 
received in cash for options exercised were $2 million in each of the years 
ended December 31, 2012, 2011 and 2010.

Under the 2002 Plan, the number of shares reserved for issuance 
automatically increased each January by an amount equal to 4% of the 
total number of shares of our common stock outstanding on the last trading 
day in December of the prior calendar year. This automatic reload feature 
was eliminated with the adoption of the new 2011 Plan.

Options Outstanding, Vested and Exercisable

Weighted 
Average 
Remaining 
Contractual 
Life (years)

Weighted 
Average 
Exercise Price

2.2 $  

14.87 $
  $

Aggregate 
Intrinsic Value 
(millions)
—
—

Shares
15,845,124
15,845,124

Crewmember Stock Purchase Plan: In May 2011, our shareholders 
also approved the new 2011 Crewmember Stock Purchase Plan, or the 
2011 CSPP, to replace the original Crewmember Stock Purchase Plan, 
which was set to expire in April 2012. Upon inception, the 2011 CSPP 
had 8.0 million shares of our common stock reserved for issuance. The 
2011 CSPP, by its terms, will terminate no later than the last business day 
of April 2021. The other terms of the 2011 CSPP are substantially similar 
to those of the original CSPP. 

JETBLUE AIRWAYS CORPORATION - 2012  10K 55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

The following is a summary of CSPP share reserve activity under the 2011 Crewmember Stock Purchase Plan for the year ended December 31:

Available for future purchases, beginning of year
Shares reserved for issuance
Common stock purchased
AVAILABLE FOR FUTURE PURCHASES, END OF YEAR

2012

Weighted 
Average Price

$

4.75

Shares
8,000,000  
—  
(1,563,776)
6,436,224  

Our original CSPP, which was available to all employees, had 5.1 million 
shares of our common stock initially reserved for issuance at its inception 
in April 2002. Through 2008, the reserve automatically increased each 
January by an amount equal to 3% of the total number of shares of our 
common stock outstanding on the last trading day in December of the 
prior calendar year. The CSPP was amended in 2008 to eliminate this 
automatic reload.

The 2011 CSPP, as did the original CSPP, has a series of successive 
overlapping six months offering periods, with a new offering period beginning 
on the ﬁ rst business day of May and November each year. Employees can 
only join an offering period on the start date. Employees may contribute 
up to 10% of their pay, through payroll deductions, toward the purchase 
of common stock. Purchase dates occur on the last business day of April 
and October each year.

CSPP participation is considered non-compensatory as the purchase price discount is only 5% based upon the stock price on the date of purchase.

Should we be acquired by merger or sale of substantially all of our assets or sale of more than 50% of our outstanding voting securities, then all 
outstanding purchase rights will automatically be exercised immediately prior to the effective date of the acquisition at a price equal to 95% of the fair 
market value per share immediately prior to the acquisition.

The following is a summary of CSPP share reserve activity under the original CSPP for the years ended December 31, 2011 and 2010. There was no 
activity in 2012 under the original CSPP and the shares remain reserved at December 31, 2012.

Available for future purchases, beginning of year
Shares reserved for issuance
Common stock purchased
AVAILABLE FOR FUTURE PURCHASES, END OF YEAR

2011

2010

Weighted 
Average Price

4.76  

Shares

20,923,959    
—    

(1,617,602) $
19,306,357    

Weighted 
Average Price

5.96

Shares

22,169,558    
—    

(1,245,599) $
20,923,959    

The Compensation-Stock Compensation topic of the Codiﬁ cation requires 
that deferred taxes be recognized on temporary differences that arise with 
respect to stock-based compensation attributable to nonqualiﬁ ed stock 
options and awards. However, no tax beneﬁ t is recognized for stock-based 
compensation attributable to incentive stock options (ISO) or CSPP shares 
until there is a disqualifying disposition, if any, for income tax purposes. 
A portion of our stock-based compensation is attributable to ISO and 
CSPP shares; therefore, our effective tax rate is subject to ﬂ uctuation.

LiveTV Equity Incentive Plan. In April 2009, our Board of Directors 
approved the LiveTV Equity Incentive Plan, or EIP, an equity based incentive 
plan for certain members of leadership at our wholly-owned subsidiary, 
LiveTV. Notional equity units were available under the EIP, representing up 
to 12% of the notional equity interest of LiveTV. Compensation cost was 
recorded ratably over the service period. In May 2011, we terminated the 
EIP. In exchange for the release of their rights under the EIP, participants 
were granted restricted stock units under the 2002 Plan in May 2011.

NOTE 8 

LiveTV

Through December 31, 2012, LiveTV had installed in-ﬂ ight entertainment 
systems for other airlines on 439 aircraft and had ﬁ rm commitments for 
installations of in-ﬂ ight entertainment and Ka broadband connectivity on 219 
additional aircraft scheduled to be installed through 2015, with options for 
52 additional in-ﬂ ight entertainment installations through 2014. Revenues 
in 2012, 2011 and 2010 were $81 million, $82 million and $72 million, 
respectively. Deferred proﬁ t on hardware sales and advance deposits 
for future hardware sales are included in other accrued liabilities and 
other long term liabilities on our consolidated balance sheets depending 
on whether we expect to recognize it in the next 12 months or beyond 
and was a total of $34 million and $54 million at December 31, 2012 
and 2011, respectively. Deferred proﬁ t to be recognized on installations 
completed through December 31, 2012 will be approximately $4 million 
in 2013, $3 million per year from 2014 through 2017 and $7 million 

thereafter. The net book value of equipment installed for other airlines was 
approximately $109 million and $111 million as of December 31, 2012 and 
2011, respectively, and is included in other assets on our consolidated 
balance sheets.

In December 2011, LiveTV terminated its contract with one of its other 
airline customers, which had in-ﬂ ight entertainment systems installed 
on 140 aircraft at the time of termination, which are excluded from the 
totals above. In connection with the termination, the customer paid 
approximately $16 million, which was included in other accrued liabilities 
on the consolidated balance sheet as of December 31, 2011. Upon fulﬁ lling 
our obligation to deactivate service on the installed aircraft, we recorded 
a gain of $8 million in other operating expenses during the ﬁ rst quarter of 
2012 related to the termination of this contract.

56

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

NOTE 9 

Income Taxes

The provision for income taxes consisted of the following for the years ended December 31 (in millions):

Deferred:
Federal
State

Deferred income tax expense
Current income tax expense
TOTAL INCOME TAX EXPENSE

2012

2011

2010

$

$

68 $
8  
76  
5  
81 $

51 $
7  
58  
1  
59 $

55
7
62
2
64

The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the years ended December 31 for the 
following reasons (in millions):

Income tax expense at statutory rate
Increase (decrease) resulting from:

State income tax, net of federal beneﬁ t
Valuation allowance
Other, net

TOTAL INCOME TAX EXPENSE

$

$

2012

73 $

2011

51 $

6  
—  
2  
81 $

5  
—  
3  
59 $

2010
57  

6  
(2)
3  
64  

Cash payments for income taxes were $4 million in 2012, zero in 2011 and $1 million in 2010.

The net deferred taxes below include a current net deferred tax asset of $107 million and a long-term net deferred tax liability of $481 million at 
December 31, 2012, and a current net deferred tax asset of $99 million and a long-term net deferred tax liability of $392 million at December 31, 2011.

The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):

Deferred tax assets:

Net operating loss carryforwards
Employee beneﬁ ts
Deferred revenue/gains
Rent expense 
Terminal 5 lease 
Capital loss carryforwards
Other
Valuation allowance

Deferred tax assets
Deferred tax liabilities:

Accelerated depreciation

Deferred tax liabilities
NET DEFERRED TAX LIABILITY

2012

127   $
36    
82    
22    
26    
20    
37    
(20)
330    

(704)
(704)
(374 ) $

2011

175  
37  
76  
20  
22  
20  
38  
(21)
367  

(660)
(660)
(293 )

$

$

Rent expense had previously been included in deferred revenue/gains. 
Terminal 5 lease was previously included with accelerated depreciation 
and deferred revenue/gains.

2012, our valuation allowance did not include any amounts attributable 
to this limitation; however, if an “ownership change” were to occur in the 
future, the ability to use our NOLs could be limited.

At December 31, 2012, we had U.S. Federal regular and alternative 
minimum tax net operating loss (“NOL”) carryforwards of $371 million 
and $343 million, respectively, which begin to expire in 2025. In addition, 
at December 31, 2012, we had deferred tax assets associated with state 
NOLs of $9 million, which begin to expire in 2014. Our NOL carryforwards 
at December 31, 2012 include an unrecorded beneﬁ t of approximately 
$9 million related to stock-based compensation that will be recorded 
in equity when, and to the extent, realized. Section 382 of the Internal 
Revenue Code imposes limitations on a corporation’s ability to use its NOL 
carryforwards if it experiences an “ownership change.” As of December 31, 

In evaluating the realizability of the deferred tax assets, we assess whether 
it is more likely than not that some portion, or all, of the deferred tax assets, 
will be realized. We consider, among other things, the generation of future 
taxable income (including reversals of deferred tax liabilities) during the 
periods in which the related temporary differences will become deductible. 
At December 31, 2012, we provided a $20 million valuation allowance to 
reduce the deferred tax assets to an amount that we consider is more likely 
than not to be realized. Our valuation allowance at December 31, 2012 
is related to capital loss carryforwards which expire in 2015 and 2016.

JETBLUE AIRWAYS CORPORATION - 2012  10K 57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

A reconciliation of the beginning and ending amount of unrecognized tax beneﬁ ts is as follow (in millions):

Unrecognized tax beneﬁ ts December 31, 2009
Increases for tax positions taken during the period
Unrecognized tax beneﬁ ts December 31, 2010
Increases for tax positions taken during the period
Unrecognized tax beneﬁ ts December 31, 2011
Increases for tax positions taken during the period
Unrecognized tax beneﬁ ts December 31, 2012

$

$

9
2
11
1
12
1
13

Interest and penalties accrued on unrecognized tax beneﬁ ts were not signiﬁ cant. If recognized, $10 million of the unrecognized tax beneﬁ ts at 
December 31, 2012 would impact our effective tax rate. We do not expect any signiﬁ cant change in the amount of the unrecognized tax beneﬁ ts 
within the next twelve months. As a result of NOLs and statute of limitations in our major tax jurisdictions, years 2001 through 2011 remain subject to 
examination by the relevant tax authorities.

NOTE 10  Employee Retirement Plan

We sponsor a retirement savings 401(k) deﬁ ned contribution plan, or the 
Plan, covering all of our employees. In 2012, we matched 100% of our 
employee contributions up to 5% of their compensation in cash, which 
vests over ﬁ ve years of service measured from an employee’s hire date. 
Participants are immediately vested in their voluntary contributions.

Another component of the Plan is a Company discretionary contribution 
of 5% of eligible non-management employee compensation, which we 
refer to as Retirement Plus. Retirement Plus contributions vest 100% 

after three years of service measured from an employee’s hire date. Our 
non-management employees are also eligible to receive proﬁ t sharing, 
calculated as 15% of adjusted pre-tax income reduced by the guaranteed 
Retirement Plus contributions discussed above. Additionally certain of 
our FAA-licensed employees receive an additional contribution of 3% of 
eligible compensation, which we refer to as Retirement Advantage. Total 
Retirement Plus, Retirement Advantage, 401(k) company match and proﬁ t 
sharing expensed in 2012, 2011 and 2010 were $73 million, $61 million 
and $55 million, respectively. 

NOTE 11  Commitments

Flight Equipment Commitments

In December 2012, we prepaid $200 million for certain 2013 aircraft 
deliveries and deposits on future aircraft deliveries in exchange for favorable 
pricing terms.

In July 2012, we amended our EMBRAER purchase agreement accelerating 
the delivery of one aircraft to 2013, which was previously scheduled for 
delivery in 2014. Additionally, we extended the date for which we may 
elect not to further amend our purchase agreement to order a new 
EMBRAER 190 variant, if developed, to July 31, 2013. If the new variant 
is not elected, seven EMBRAER 190 aircraft we previously deferred may 
either be returned to their previously committed to delivery dates in 2013 
and 2014 or canceled and subject to cancellation fees. In December 
2012, we further amended our EMBRAER purchase agreement effectively 
accelerating the delivery of four aircraft from 2018 to 2013.

During 2011, we cancelled the orders for a total of 14 EMBRAER 190 
aircraft previously scheduled for delivery in 2013, 2014, 2017 and 2018. 
We also deferred seven EMBRAER 190 aircraft previously scheduled for 
delivery in 2013 and 2014 to 2018. 

In October 2011, we executed a new purchase agreement with Airbus 
S.A.S., which superseded our original purchase agreement and related 
amendments. In this new agreement, we substituted 30 of our then 
remaining A320 aircraft deliveries with A321 aircraft and placed a new 
order for 40 A320 new engine option, or A320neo, aircraft with delivery 
scheduled in 2018 through 2021.

As of December 31, 2012, our ﬁ rm aircraft orders consisted of 14 Airbus 
A320 aircraft, 30 Airbus A321 aircraft, 40 Airbus A320neo, 31 EMBRAER 
190 aircraft and 10 spare engines scheduled for delivery through 2021. 
Committed expenditures for these aircraft and related ﬂ ight equipment, 
including estimated amounts for contractual price escalations and predelivery 
deposits, will be approximately $360 million in 2013, $525 million in 2014, 

$745 million in 2015, $765 million in 2016, $575 million in 2017 and 
$2.04 billion thereafter.

We are scheduled to receive three new Airbus A320, four new Airbus A321 
and seven new EMBRAER 190 aircraft in 2013. As described above, we 
pre-paid some of our 2013 aircraft deliveries. We have committed ﬁ nancing 
for two EMBRAER 190 aircraft scheduled for delivery in 2013. We will 
only opportunistically ﬁ nance the remaining 2013 scheduled deliveries at 
favorable borrowing terms relative to our weighted average cost of debt. 

Other Commitments

We utilize several credit card processors to process our ticket sales. Our 
agreements with these processors do not contain covenants, but do 
generally allow the processor to withhold cash reserves to protect the 
processor for potential liability for tickets purchased, but not yet used for 
travel. While we currently do not have any collateral requirements related 
to our credit card processors, we may be required to issue collateral to 
our credit card processors, or other key vendors, in the future. As of 
December 31, 2012, we had approximately $16 million pledged related 
to our workers compensation insurance policies and other business 
partner agreements, which will expire according to the terms of the related 
policies or agreements. 

Our commitments also include those of LiveTV, which has several 
noncancelable long-term purchase agreements with its suppliers to provide 
equipment to be installed on its customers’ aircraft, including JetBlue’s 
aircraft. At December 31, 2012, committed expenditures to these suppliers 
were approximately $21 million in 2013, $16 million in 2014, $7 million in 
2015 and $2 million in each of 2016 and 2017.

In March 2011, we executed a seven year agreement, subject to an optional 
three year extension, with ViaSat Inc. to develop and introduce in-ﬂ ight 
broadband connectivity technology on our aircraft. Committed expenditures 

58

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

under this agreement include a minimum of $9 million through 2018 and 
an additional $23 million for minimum hardware and software purchases. 
Through LiveTV, we plan to partner with ViaSat to make this technology 
available to other airline customers in the future as well.

We enter into individual employment agreements with each of our FAA-
licensed employees, which include pilots, dispatchers, technicians and 
inspectors as well as air trafﬁ c controllers. Each employment agreement 
is for a term of ﬁ ve years and automatically renews for an additional ﬁ ve-

year term unless either the employee or we elect not to renew it by giving 
at least 90 days notice before the end of the relevant term. Pursuant to 
these agreements, these employees can only be terminated for cause. 
In the event of a downturn in our business that would require a reduction 
in work hours, we are obligated to pay these employees a guaranteed 
level of income and to continue their beneﬁ ts if they do not obtain other 
aviation employment. None of our employees are covered by collective 
bargaining agreements.

NOTE 12  Contingencies

We self-insure a portion of our losses from claims related to workers’ 
compensation, environmental issues, property damage, medical insurance 
for employees and general liability. Losses are accrued based on an 
estimate of the ultimate aggregate liability for claims incurred, using 
standard industry practices and our actual experience.

We are a party to many routine contracts under which we indemnify third 
parties for various risks. These indemnities consist of the following:

All of our bank loans, including our aircraft and engine mortgages, contain 
standard provisions present in loans of this type which obligate us to 
reimburse the bank for any increased costs associated with continuing 
to hold the loan on our books which arise as a result of broadly deﬁ ned 
regulatory changes, including changes in reserve requirements and bank 
capital requirements. These indemnities would have the practical effect 
of increasing the interest rate on our debt if they were to be triggered. 
In all cases, we have the right to repay the loan and avoid the increased 
costs. The term of these indemnities matches the length of the related 
loan up to 12 years.

Under both aircraft leases with foreign lessors and aircraft and engine 
mortgages with foreign lenders, we have agreed to customary indemnities 
concerning withholding tax law changes under which we are responsible, 
should withholding taxes be imposed, for paying such amount of additional 
rent or interest as is necessary to ensure that the lessor or lender still 
receives, after taxes, the rent stipulated in the lease or the interest stipulated 
under the loan. The term of these indemnities matches the length of the 
related lease up to 18 years.

We have various leases with respect to real property, and various agreements 
among airlines relating to fuel consortia or fuel farms at airports, under 
which we have agreed to standard language indemnifying the lessor 
against environmental liabilities associated with the real property or 
operations described under the agreement, even if we are not the party 
responsible for the initial event that caused the environmental damage. 
In the case of fuel consortia at airports, these indemnities are generally 
joint and several among the participating airlines. We have purchased a 
stand alone environmental liability insurance policy to help mitigate this 
exposure. Our existing aviation hull and liability policy includes some limited 
environmental coverage when a clean up is part of an associated single 
identiﬁ able covered loss.

Under certain contracts, we indemnify speciﬁ ed parties against legal liability 
arising out of actions by other parties. The terms of these contracts range 
up to 30 years. Generally, we have liability insurance protecting ourselves 
for the obligations we have undertaken relative to these indemnities.

LiveTV provides product warranties to third party airlines to which it 
sells its products and services. We do not accrue a liability for product 
warranties upon sale of the hardware since revenue is recognized over 
the term of the related service agreements of up to 12 years. Expenses 
for warranty repairs are recognized as they occur. In addition, LiveTV has 
provided indemnities against any claims which may be brought against its 
customers related to allegations of patent, trademark, copyright or license 
infringement as a result of the use of the LiveTV system. LiveTV customers 
include other airlines, which may be susceptible to the inherent risks of 

operating in the airline industry and/or economic downturns, which may 
in turn have a negative impact on our business.

Under certain of our LiveTV third party agreements, as well as certain 
of our operating lease agreements, we are required to restore certain 
property or equipment to its original form upon expiration of the related 
agreement. We have recorded the estimated fair value of these retirement 
obligations of approximately $9 million as of December 31, 2012. This 
liability may increase over time.

We are unable to estimate the potential amount of future payments under 
the foregoing indemnities and agreements.

Environmental Liability

Many aspects of airlines’ operations are subject to increasingly stringent 
federal, state, local, and foreign laws protecting the environment. There 
is growing consensus that some form of regulation will be forthcoming 
at the federal level with respect to greenhouse gas emissions (including 
carbon dioxide (CO2)) and such regulation could result in the creation of 
substantial additional costs in the form of taxes or emission allowances. 
Since the domestic airline industry is increasingly price sensitive, we may 
not be able to recover the cost of compliance with new or more stringent 
environmental laws and regulations from our passengers, which could 
adversely affect our business. Although it is not expected that the costs 
of complying with current environmental regulations will have a material 
adverse effect on our ﬁ nancial position, results of operations or cash ﬂ ows, 
no assurance can be made that the costs of complying with environmental 
regulations in the future will not have such an effect. The impact to us 
and our industry from such actions is likely to be adverse and could be 
signiﬁ cant, particularly if regulators were to conclude that emissions from 
commercial aircraft cause signiﬁ cant harm to the upper atmosphere or 
have a greater impact on climate change than other industries.

In 2012, during performance of environmental testing required in connection 
with the demolition of the passenger terminal buildings and closure of the 
defunct hydrant fuel systems on the Terminal 6 site at New York’s John F. 
Kennedy International Airport, or JFK, the presence of light non-aqueous 
phase petroleum liquid was discovered in certain subsurface monitoring 
wells on the property. Our lease with the Port Authority of New York and New 
Jersey, or PANYNJ, provides that, under certain circumstances, we may be 
responsible for investigating, delineating, and remediating such subsurface 
contamination, even if we are not necessarily the party that caused its 
release. We have engaged environmental consultants and legal counsel to 
assess the extent of the contamination and assist us in determining whether 
we are responsible for taking steps to remediate it. A preliminary estimate 
indicates costs of remediation could range from less than $1 million up 
to approximately $3 million. As of December 31, 2012, we have accrued 
$2 million for current estimates of remediation costs, which is included in 
current liabilities on our consolidated balance sheets. However, as with any 
environmental contamination, there is the possibility this contamination could 
be more extensive than estimated at this early stage. 

Based upon information currently known to us, we do not expect these 
environmental proceedings to have a material adverse effect on our 

JETBLUE AIRWAYS CORPORATION - 2012  10K 59

PART II   
ITEM 8 Financial Statements and Supplementary Data

consolidated ﬁ nancial position, results of operations, or cash ﬂ ows. 
However, it is not possible to predict with certainty the impact on us of 
future environmental compliance requirements or the costs of resolving 
the matter, in part because the scope of the remediation that may be 
required is not certain and environmental laws and regulations are subject 
to modiﬁ cation and changes in interpretation. 

Legal Matters

Occasionally, we are involved in various claims, lawsuits, regulatory 
examinations, investigations and other legal matters arising, for the most 
part, in the ordinary course of business. The outcome of litigation and other 
legal matters is always uncertain. The Company believes that it has valid 
defenses to the legal matters currently pending against it, is defending itself 
vigorously and has recorded accruals determined in accordance with GAAP, 
where appropriate. In making a determination regarding accruals, using 
available information, we evaluate the likelihood of an unfavorable outcome 
in legal or regulatory proceedings to which we are a party to and record a 
loss contingency when it is probable that a liability has been incurred and 
the amount of the loss can be reasonably estimated. These judgments are 
subjective, based on the status of such legal or regulatory proceedings, the 
merits of our defenses and consultation with legal counsel. Actual outcomes 
of these legal and regulatory proceedings may materially differ from our 
current estimates. It is possible that resolution of one or more of the legal 
matters currently pending or threatened could result in losses material to 
our consolidated results of operations, liquidity or ﬁ nancial condition. 

To date, none of these types of litigation matters, most of which are typically 
covered by insurance, has had a material impact on our operations or 
ﬁ nancial condition. We have insured and continue to insure against most 
of these types of claims. A judgment on any claim not covered by, or in 
excess of, our insurance coverage could materially adversely affect our 
ﬁ nancial condition or results of operations.

DOT tarmac delay. In December 2009, the Department of Transportation, 
or DOT, issued a series of passenger protection rules which, among other 
things, impose tarmac delay limits for U.S. airline domestic ﬂ ights. The 
rules became effective in April 2010, and require U.S. airlines to allow 
passengers to deplane within three hours on the tarmac, with certain 
safety and security exceptions. Violators can face ﬁ nes up to a maximum 
of $27,500 per passenger. The new rules also introduce requirements 
to disclose on-time performance and delay statistics for certain ﬂ ights. 
These new rules may have adverse consequences on our business and 
our results of operations.

In October 2011, a severe winter storm and multiple failures of critical 

navigational equipment in the New York City area severely impacted air 
travel in the northeast. As a result, we and other domestic and international 
carriers diverted ﬂ ights to Hartford, CT’s Bradley International Airport, or 
Bradley. We diverted a total of six ﬂ ights to Bradley, ﬁ ve of which were 
held on the tarmac in excess of three hours. The DOT is investigating 
these incidents and we may be subject to a monetary penalty under the 
DOT’s tarmac delay regulations. Based on the allowable maximum DOT 
ﬁ ne proscribed by the regulation, we could be assessed a ﬁ ne of up to 
approximately $15 million. Since the tarmac delay rule went into effect 
in April 2010, there have been multiple instances where carriers have 
experienced extended tarmac delays in excess of three hours; however, the 
DOT has only assessed one penalty against another carrier, for an amount 
well below the maximum allowable ﬁ ne of $27,500 per passenger. As a 
result of the circumstances surrounding the airport, weather and air trafﬁ c 
conditions on that day, as well as the discretion granted to the DOT by the 
regulation, we are unable to determine whether a ﬁ ne will be assessed, 
and if so, the amount of such ﬁ ne. We have issued compensation to the 
impacted customers in accordance with our Customer Bill of Rights, 
and are fully complying with all requests made by the DOT in the course 
of the investigation. We do not know when a ﬁ nal determination by the 
DOT will be made.

Employment Agreement Dispute. In or around March 2010, attorneys 
representing a group of current and former pilots, or the Claimants’, 
ﬁ led a Request for Mediation with the American Arbitration Association 
concerning a dispute over the interpretation of a provision of their individual 
JetBlue Airways Corporation Employment Agreements for Pilots, or 
Employment Agreements. In their Fourth Amended Arbitration Demand, 
dated June 8, 2012, Claimants (approximately 944 current pilots and 26 
former pilots) alleged that JetBlue breached the Base Salary provision of 
the Employment Agreements and sought back pay and related damages, 
for each of 2002, 2007 and 2009. In July 2012, in response to JetBlue’s 
partial Motion to Dismiss, the Claimants withdrew the 2002 claims. The 
Claimants have not speciﬁ ed an exact amount of damages sought. As 
such, we are unable to determine a range of potential loss at this time. 
However, pilot salaries currently represent approximately 40% of our total 
consolidated salaries; therefore, any judgment in the Claimants’ favor for 
any or all of the years in question could have a material adverse impact 
on our results of operations, liquidity and/or ﬁ nancial condition.

Discovery was completed and expert reports were ﬁ led during the fourth 
quarter of 2012. An arbitration hearing is scheduled in March 2013. In 
this arbitration, the Company intends to continue to vigorously defend 
its interpretation of the Employment Agreements at issue. While the 
outcome of any arbitration is uncertain, the Company believes the claims 
are without merit.

NOTE 13  Financial Derivative Instruments and Risk Management

As part of our risk management techniques, we periodically purchase 
crude or heating oil option contracts to manage our exposure to the 
effect of changes in the price and availability of aircraft fuel. Prices for 
these commodities are normally highly correlated to aircraft fuel, making 
derivatives of them effective at providing short-term protection against 
sharp increases in average fuel prices. We also periodically enter into jet 
fuel swaps, as well as basis swaps for the differential between heating oil 
and jet fuel, to further limit the variability in fuel prices at various locations. 

To manage the variability of the cash ﬂ ows associated with our variable 
rate debt, we have also entered into interest rate swaps. 

We do not hold or issue any derivative ﬁ nancial instruments for trading 
purposes.

Aircraft fuel derivatives: We attempt to obtain cash ﬂ ow hedge accounting 
treatment for each aircraft fuel derivative we enter into. This treatment is 
provided for under the Derivatives and Hedging topic of the Codiﬁ cation, 
which allows for gains and losses on the effective portion of qualifying 
hedges to be deferred until the underlying planned jet fuel consumption 

occurs, rather than recognizing the gains and losses on these instruments 
into earnings during each period they are outstanding. The effective portion 
of realized aircraft fuel hedging derivative gains and losses is recognized 
in fuel expense in the period the underlying fuel is consumed.

Ineffectiveness results, in certain circumstances, when the change in the 
total fair value of the derivative instrument differs from the change in the 
value of our expected future cash outlays for the purchase of aircraft fuel 
and is recognized immediately in interest income and other. Likewise, if a 
hedge does not qualify for hedge accounting, the periodic changes in its 
fair value are recognized in the period of the change in interest income and 
other. When aircraft fuel is consumed and the related derivative contract 
settles, any gain or loss previously recorded in other comprehensive income 
is recognized in aircraft fuel expense. All cash ﬂ ows related to our fuel 
hedging derivatives are classiﬁ ed as operating cash ﬂ ows.

Our current approach to fuel hedging is to enter into hedges on a discretionary 
basis without a speciﬁ c target of hedge percentage needs. We view our 
hedge portfolio as a form of insurance to help mitigate the impact of price 
volatility and protect us against severe spikes in oil prices, when possible.

60

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 8 Financial Statements and Supplementary Data

PART II   

The following table illustrates the approximate hedged percentages of our 
projected fuel usage by quarter as of December 31, 2012, related to our 
outstanding fuel hedging contracts that were designated as cash ﬂ ow 
hedges for accounting purposes.

First Quarter 2013
Second Quarter 2013
Third Quarter 2013

Brent crude oil collars
8%
8%
4%

In January 2013, we entered into jet fuel swap transactions representing 
an additional 4% of our forecasted consumption in each of the third and 
fourth quarter of 2013. In February 2013, we entered into jet fuel cap 
agreements representing an additional 8% of our forecasted consumption 
in each of the third and fourth quarter of 2013. 

During 2012, we also entered into basis swaps, which we did not designate 
as cash ﬂ ow hedges for accounting purposes and as a result we marked to 
market in earnings each period outstanding based on their current fair value.

As of December 31, 2011, we determined that the correlation between WTI 
crude oil and jet fuel had signiﬁ cantly deteriorated and the requirements 
for continuing hedge accounting treatment were no longer satisﬁ ed. As 
such, we prospectively discontinued hedge accounting treatment on all of 
our WTI crude oil cap agreements and WTI crude oil collars outstanding as 
of December 31, 2011, which then represented approximately 6% of our 
total 2012 forecasted fuel consumption. The forecasted fuel consumption, 
for which these transactions were designated as cash ﬂ ow hedges, occurred 
as originally expected; therefore, amounts deferred in other comprehensive 
income related to these contracts remained deferred until the forecasted 
fuel consumption occurred. At December 31, 2011, we had deferred 
$3  million,  or $2 million net of taxes, of these losses in other comprehensive 
income associated with these contracts. We recognized all of these losses 
into fuel expense in 2012. 

Interest rate swaps: The interest rate swap agreements we had outstanding 
as of December 31, 2012 effectively swap ﬂ oating rate debt for ﬁ xed rate 
debt, taking advantage of lower borrowing rates in existence at the time of 

the hedge transaction as compared to the date our original debt instruments 
were executed. As of December 31, 2012, we had $348 million in notional 
debt outstanding related to these swaps, which cover certain interest 
payments through August 2016. The notional amount decreases over time 
to match scheduled repayments of the related debt. Refer to Note 2 for 
information on the debt outstanding related to these swap agreements.

All of our outstanding interest rate swap contracts qualify as cash ﬂ ow hedges 
in accordance with the Derivatives and Hedging topic of the Codiﬁ cation. 
Since all of the critical terms of our swap agreements match the debt to 
which they pertain, there was no ineffectiveness relating to these interest 
rate swaps in 2012, 2011 or 2010, and all related unrealized losses were 
deferred in accumulated other comprehensive income. We recognized 
approximately $11 million, $10 million and $8 million in additional interest 
expense as the related interest payments were made during 2012, 2011 
and 2010, respectively.

Any outstanding derivative instruments expose us to credit loss in the event 
of nonperformance by the counterparties to the agreements, but we do not 
expect that any of our three counterparties will fail to meet their obligations. 
The amount of such credit exposure is generally the positive fair value of 
our outstanding contracts. To manage credit risks, we select counterparties 
based on credit assessments, limit our overall exposure to any single 
counterparty and monitor the market position of each counterparty. Some 
of our agreements require cash deposits if market risk exposure exceeds 
a speciﬁ ed threshold amount.

The ﬁ nancial derivative instrument agreements we have with our counterparties 
may require us to fund all, or a portion of, outstanding loss positions related 
to these contracts prior to their scheduled maturities. The amount of 
collateral posted, if any, is periodically adjusted based on the fair value of the 
hedge contracts. Our policy is to offset the liabilities represented by these 
contracts with any cash collateral paid to the counterparties. We did not 
have any collateral posted related to our outstanding fuel hedge contracts 
at December 31, 2012 or December 31, 2011. We had $12 million and 
$20 million posted in collateral related to our interest rate derivatives which 
offset the hedge liability in other current liabilities at December 31, 2012 
and 2011, respectively.

The table below reﬂ ects quantitative information related to our derivative instruments and where these amounts are recorded in our ﬁ nancial statements 
(dollar amounts in millions).

Fuel derivatives
Asset fair value recorded in prepaid expenses and other (1)
Liability fair value recorded in other accrued liabilities (1)
Longest remaining term (months)
Hedged volume (barrels, in thousands)
Estimated amount of existing losses expected to be reclassiﬁ ed into earnings in the next 12 months
Interest rate derivatives
Liability fair value recorded in other long term liabilities (2)
Estimated amount of existing losses expected to be reclassiﬁ ed into earnings in the next 12 months

Fuel derivatives
Hedge effectiveness gains (losses) recognized in aircraft fuel expense
Hedge ineffectiveness losses recognized in other income (expense)
Losses on derivatives not qualifying for hedge accounting recognized in other income (expense)
Hedge gains (losses) on derivatives recognized in comprehensive income
Percentage of actual consumption economically hedged
Interest rate derivatives
Hedge losses on derivatives recognized in comprehensive income
Hedge losses on derivatives recognized in interest expense
(1)  Gross asset or liability of each contract prior to consideration of offsetting positions with each counterparty.
(2)  Gross liability, prior to impact of collateral posted.

$

$

As of December 31,

2012

— $
1
9 
675
(1)

12
(9)

2011

6  
10  
12  
3,540  
(6)

20  
(10)

2012

2011

2010

$

10  
—  
(3)
14  
30%  

$

3 
(2)
— 
(11)
40%  

(3)
(11)

(7)
(10)

(3)
(2)
— 
(11)
51%

(21)
(8)

JETBLUE AIRWAYS CORPORATION - 2012  10K 61

 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
   
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

 NOTE 14  Fair Value

Under the Fair Value Measurements and Disclosures topic of the Codiﬁ cation, 
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 signiﬁ cant 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 ﬂ ow models or valuations.

Assets
Cash and cash equivalents
Restricted cash
Available-for-sale investment securities

Liabilities
Aircraft fuel derivatives
Interest rate swap

Assets
Cash and cash equivalents
Restricted cash
Available-for-sale investment securities
Aircraft fuel derivatives

Liabilities
Aircraft fuel derivatives
Interest rate swap

The determination of where assets and liabilities fall within this hierarchy 
is based upon the lowest level of input that is signiﬁ cant 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 
classiﬁ ed within the fair value hierarchy (as described in Note 1) (in millions). 
The carrying values of all other ﬁ nancial instruments approximated their 
fair values at December 31, 2012 and 2011. Refer to Note 2 for fair value 
information related to our outstanding debt obligations as of December 31, 
2012 and 2011.

As of December 31, 2012

Level 1

Level 2

Level 3

Total

84 $
4  
68  
156 $

— $
—  
— $

— $
—  
207  
207 $

1 $

12  
13 $

— $
—  
—  
— $

— $
—  
— $

84
4
275
363

1
12
13

As of December 31, 2011

Level 1

Level 2

Level 3

Total

555 $
4  
—  
—  
559 $

— $
—  
— $

— $
—  
253  
5  
258 $

9 $

20  
29 $

— $
—  
—  
—  
— $

— $
—  
— $

555
4
253
5
817

9
20
29

$

$

$

$

$

$

$

$

Cash and Cash Equivalents: Our cash and cash equivalents include 
money market securities, treasury bills, and commercial paper which 
are readily convertible into cash with maturities of three months or less 
when purchased, all of which are considered to be highly liquid and easily 
tradable. These securities are valued using inputs observable in active 
markets for identical securities and are therefore classiﬁ ed as Level 1 
within our fair value hierarchy.

Available-for-sale investment securities: Included in our available-for-
sale investment securities are certiﬁ cates of deposits and commercial 
paper with original maturities greater than 90 days but less than one 
year. The fair values of these instruments are based on observable 
inputs in non-active markets, which are therefore classiﬁ ed as Level 2 
in the hierarchy. At December 31, 2012, we also held treasury bills with 
maturities greater than three months when purchased. The fair value of 
the treasury bills are based on actively traded quoted market prices and 
are therefore classiﬁ ed as Level 1 in the hierarchy. We did not record any 
signiﬁ cant gains or losses on these securities during the twelve months 
ended December 31, 2012 or 2011. 

Auction rate securities: We had historically held auction rate securities, 
or ARS, long-term debt securities for which interest rates reset regularly 
at pre-determined intervals, typically 28 days, through an auction process. 
During 2010, UBS, a broker-dealer, re-purchased ARS from us at their 
par value of $85 million in satisfaction of a previously executed settlement 
agreement. Prior to entering into the settlement agreement, we had 
estimated the value of these ARS using discounted cash ﬂ ows, a level 

3 input, as a result of their par values not approximating their fair values. 
The re-purchase of ARS by UBS did not result in a net gain or loss in the 
year of settlement. 

Interest rate swaps: The fair values of our interest rate swaps are based 
on inputs received from the related counterparty, which are based on 
observable inputs for active swap indications in quoted markets for similar 
terms. We had previously classiﬁ ed our interest rate swaps as Level 3 inputs 
in the hierarchy with the belief some of these inputs were not observable. 
However, since these inputs are all observable, we believe the appropriate 
classiﬁ cation is as Level 2 inputs in the hierarchy. We have reﬂ ected this 
adjustment for all periods presented in the tables above.

Aircraft fuel derivatives: Our jet fuel swaps, jet fuel, heating oil and 
crude oil collars, and crude oil caps are not traded on public exchanges. 
Their fair values are determined using a market approach based on 
inputs that are readily available from public markets for commodities and 
energy trading activities; therefore, they are classiﬁ ed as Level 2 inputs. 
The data inputs are combined into quantitative models and processes 
to generate forward curves and volatilities related to the speciﬁ c terms of 
the underlying hedge contracts.

Spectrum license: In 2006, LiveTV acquired an air-to-ground spectrum 
license in a public auction from the Federal Communications Commission 
for approximately $7 million. Since its acquisition, the license has been 
treated as an indeﬁ nite lived intangible asset, reﬂ ected in other long term 
assets in our consolidated balance sheets. In late 2007, we unveiled 

62

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

BetaBlue, an Airbus A320 aircraft, which utilized the acquired spectrum 
in delivering email and internet capabilities to our customers. Since 2007, 
LiveTV continued to develop this technology, with the intent of making 
it available on all of our aircraft. However, with the introduction of similar 
service by competitors, we re-evaluated the long term viability of our 
planned offering and during 2010, ceased further development of the air-
to-ground platform. In September 2010, we announced plans to develop 
broadband capability, partnering with ViaSat and utilizing their advanced 
satellite technologies. As a result of the change in plans, we evaluated the 

spectrum license for impairment, which resulted in a loss of approximately 
$5 million being recorded in other operating expenses during 2010. We 
determined the $2 million fair value of the spectrum license at December 31, 
2010 using a probability weighted cash ﬂ ow model, which included an 
income approach for the cash ﬂ ows associated with the current general 
aviation business as well as a market approach based on an independent 
valuation. Since these inputs are not observable, they are classiﬁ ed as 
Level 3 inputs in the hierarchy. As of December 31, 2012, we determined 
there was no further impairment.

NOTE 15  Accumulated Other Comprehensive Income (Loss)

Comprehensive income includes changes in fair value of our aircraft fuel derivatives and interest rate swap agreements, which qualify for hedge 
accounting. A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the years ended December 31, 
2010, 2011 and 2012 is as follows (in millions):

Beginning accumulated gains (losses), at December 31, 2009
Reclassiﬁ cations into earnings
Change in fair value
Balance of accumulated gains (losses), at December 31, 2010
Reclassiﬁ cations into earnings
Change in fair value
Balance of accumulated gains (losses), at December 31, 2011
Reclassiﬁ cations into earnings
Change in fair value
ENDING ACCUMULATED GAINS (LOSSES), AT DECEMBER 31, 2012

$

$

NOTE 16  Geographic Information

Aircraft Fuel 
Derivatives

Interest 
Rate Swaps

7   $
3    
(6)
4    
(1)
(6)
(3)
(6)
8    
(1) $

(6) $
5    

(13)
(14)

6    
(4)
(12)

7    
(2)
(7) $

Total
1  
8  
(19)
(10)
5  
(10)
(15)
1  
6 
(8)

Under the Segment Reporting topic of the Codiﬁ cation, disclosures are required for operating segments, which are regularly reviewed by the chief operating 
decision makers. Air transportation services accounted for substantially all the Company’s operations in 2012, 2011 and 2010.

Operating revenues are allocated to geographic regions, as deﬁ ned by the DOT, based upon the origination and destination of each ﬂ ight segment. We currently 
serve 21 locations in the Caribbean and Latin American region, or Latin America as deﬁ ned by the DOT. However, our management also includes Puerto Rico 
when reviewing the Caribbean region, and as such we have included our three destinations in Puerto Rico and two destinations in the U.S. Virgin Islands in our 
Caribbean and Latin America allocation of revenues. Operating revenues by geographic regions for the years ended December 31 are summarized below (in millions):

Domestic
Caribbean & Latin America
TOTAL

$

$

2012
3,666   $
1,316  
4,982

$

2011
3,351   $
1,153  
4,504

$

2010
2,900  
879  

3,779

Our tangible assets primarily consist of our ﬂ eet of aircraft, which is deployed system wide, with no individual aircraft dedicated to any speciﬁ c route or 
region; therefore our assets do not require any allocation to a geographic area.

JETBLUE AIRWAYS CORPORATION - 2012  10K 63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II   
ITEM 8 Financial Statements and Supplementary Data

NOTE 17  Quarterly Financial Data (Unaudited)

Quarterly results of operations for the years ended December 31 are summarized below (in millions, except per share amounts):

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

$

1,203 $
89  
30  
0.11 $
0.09 $

2012 (1)
Operating revenues
Operating income
Net income
Basic earnings per share
Diluted earnings per share
2011 (2)
1,146
Operating revenues
83
Operating income
23
Net income
0.08
Basic earnings per share
Diluted earnings per share
0.08
(1)  During the first quarter of 2012, LiveTV terminated a customer contract resulting in a gain of approximately $8 million in other operating expenses. During the second quarter of 2012, we 
recorded net gains of approximately $10 million on the sale of two EMBRAER 190 aircraft and six spare aircraft engines in other operating expenses, as well as net gains of approximately 
$2 million in interest income and other on the early extinguishment of debt secured by six aircraft. During the fourth quarter of 2012, we recognized losses of approximately $3 million in 
interest income and other on the early extinguishment of debt secured by two aircraft. 

1,195 $
108  
35  
0.12 $
0.11 $

1,308 $
113  
45  
0.16 $
0.14 $

1,277 $
130  
52  
0.19 $
0.16 $

1,012 $
45  
3  
0.01 $
0.01 $

1,151 $
86  
25  
0.09 $
0.08 $

1,194
44
1
—
—

$
$

$
$

$

(2)  During the first quarter of 2011, we recorded $9 million of revenue related to our co-branded credit card agreement guarantee. During the third and fourth quarters of 2011, we recorded 

a $5 million loss and $1 million loss, respectively, on the early extinguishment of a portion of our 6.75% Series A convertible debentures.

The sum of the quarterly earnings per share amounts does not equal the annual amount reported since per share amounts are computed independently 
for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares.

64

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8 Financial Statements and Supplementary Data

PART II   

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of 
JetBlue Airways Corporation

We have audited the accompanying consolidated balance sheets of 
JetBlue Airways Corporation as of December 31, 2012 and 2011, and the 
related consolidated statements of operations, comprehensive income, 
stockholders’ equity, and cash ﬂ ows for each of the three years in the 
period ended December 31, 2012. These ﬁ nancial statements are the 
responsibility of the Company’s management. Our responsibility is to 
express an opinion on these ﬁ nancial statements based on our audits.

We conducted our audits in accordance with the standards of the 
Public Company Accounting Oversight Board (United States). Those 
standards require that we plan and perform the audit to obtain reasonable 
assurance about whether the ﬁ nancial statements are free of material 
misstatement. An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the ﬁ nancial statements. 
An audit also includes assessing the accounting principles used and 
signiﬁ cant estimates made by management, as well as evaluating the 
overall ﬁ nancial statement presentation. We believe that our audits provide 
a reasonable basis for our opinion.

In our opinion, the ﬁ nancial statements referred to above present fairly, in 
all material respects, the consolidated ﬁ nancial position of JetBlue Airways 
Corporation at December 31, 2012 and 2011, and the consolidated 
results of its operations and its cash ﬂ ows for each of the three years in 
the period ended December 31, 2012, in conformity with U.S. generally 
accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company 
Accounting Oversight Board (United States), JetBlue Airways Corporation’s 
internal control over ﬁ nancial reporting as of December 31, 2012, based on 
criteria established in Internal Control-Integrated Framework issued by the 
Committee of Sponsoring Organizations of the Treadway Commission and 
our report dated February 20, 2013 expressed an unqualiﬁ ed opinion thereon.

/s/ Ernst & Young LLP

New York, New York

February 20, 2013

JETBLUE AIRWAYS CORPORATION - 2012  10K 65

PART II   
ITEM 8 Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of 
JetBlue Airways Corporation

We have audited JetBlue Airways Corporation’s internal control over 
ﬁ nancial reporting as of December 31, 2012, based on criteria established 
in Internal Control — Integrated Framework issued by the Committee of 
Sponsoring Organizations of the Treadway Commission (the COSO criteria). 
JetBlue Airways Corporation’s management is responsible for maintaining 
effective internal control over ﬁ nancial reporting, and for its assessment of 
the effectiveness of internal control over ﬁ nancial reporting included in the 
accompanying Management’s Report on Internal Control Over Financial 
Reporting. Our responsibility is to express an opinion on the company’s 
internal control over ﬁ nancial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public 
Company Accounting Oversight Board (United States). Those standards require 
that we plan and perform the audit to obtain reasonable assurance about 
whether effective internal control over ﬁ nancial reporting was maintained in all 
material respects. Our audit included obtaining an understanding of internal 
control over ﬁ nancial reporting, assessing the risk that a material weakness 
exists, testing and evaluating the design and operating effectiveness of internal 
control based on the assessed risk, and performing such other procedures 
as we considered necessary in the circumstances. We believe that our audit 
provides a reasonable basis for our opinion.

A company’s internal control over ﬁ nancial reporting is a process designed 
to provide reasonable assurance regarding the reliability of ﬁ nancial 
reporting and the preparation of ﬁ nancial statements for external purposes 
in accordance with generally accepted accounting principles. A company’s 
internal control over ﬁ nancial reporting includes those policies and procedures 
that (1) pertain to the maintenance of records that, in reasonable detail, 
accurately and fairly reﬂ ect the transactions and dispositions of the assets 

of the company; (2) provide reasonable assurance that transactions are 
recorded as necessary to permit preparation of ﬁ nancial statements in 
accordance with generally accepted accounting principles, and that receipts 
and expenditures of the company are being made only in accordance 
with authorizations of management and directors of the company; and 
(3) provide reasonable assurance regarding prevention or timely detection 
of unauthorized acquisition, use, or disposition of the company’s assets 
that could have a material effect on the ﬁ nancial statements.

Because of its inherent limitations, internal control over ﬁ nancial reporting 
may not prevent or detect misstatements. Also, projections of any evaluation 
of effectiveness to future periods are subject to the risk that controls may 
become inadequate because of changes in conditions, or that the degree 
of compliance with the policies or procedures may deteriorate.

In our opinion, JetBlue Airways Corporation maintained, in all material 
respects, effective internal control over ﬁ nancial reporting as of December 31, 
2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public 
Company Accounting Oversight Board (United States), the consolidated 
balance sheets of JetBlue Airways Corporation as of December 31, 
2012 and 2011 and the related consolidated statements of operations, 
comprehensive income, stockholders’ equity, and cash ﬂ ows for each 
of the three years in the period ended December 31, 2012 of JetBlue 
Airways Corporation and our report dated February 20, 2013 expressed 
an unqualiﬁ ed opinion thereon.

/s/ Ernst & Young LLP

New York, New York

February 20, 2013 

66

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

PART II   

ITEM 9.  Changes in and Disagreements with 

Accountants on Accounting and Financial 
Disclosure

None.

ITEM 9A. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as deﬁ ned in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure 
that information required to be disclosed by us in reports that we ﬁ le under the Exchange Act is recorded, processed, summarized and reported 
within the time periods speciﬁ ed in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we ﬁ le under the 
Exchange Act is accumulated and communicated to our management, including our Chief Executive Ofﬁ cer, or CEO, and our Chief Financial Ofﬁ cer, 
or CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of 
the effectiveness of our disclosure controls and procedures as of December 31, 2012. Based on that evaluation, our CEO and CFO concluded that our 
disclosure controls and procedures were effective as of December 31, 2012.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over ﬁ nancial reporting (as deﬁ ned in Rule 13a-15(f) or Rule 
15d-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an 
evaluation of the effectiveness of our internal control over ﬁ nancial reporting based on the framework in Internal Control—Integrated Framework issued 
by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal 
control over ﬁ nancial reporting was effective as of December 31, 2012 to provide reasonable assurance regarding the reliabilityof ﬁ nancial reporting and 
the preparation of consolidated ﬁ nancial statements for external reporting purposes in accordance with U.S. GAAP.

Ernst & Young LLP, the independent registered public accounting ﬁ rm that audited our Consolidated Financial Statements included in this Annual Report 
on Form 10-K, audited the effectiveness of our internal control over ﬁ nancial reporting as of December 31, 2012. Ernst & Young LLP has issued their 
report which is included elsewhere herein.

Changes in Internal Control Over Financial Reporting

During the quarter ended December 31, 2012, there were no changes in our internal control over ﬁ nancial reporting (as deﬁ ned in Rule 13a-15(f) or 
Rule 15d-15(f) under the Exchange Act) identiﬁ ed in connection with the evaluation of our controls performed during that have materially affected, or 
are reasonably likely to materially affect, our internal control over ﬁ nancial reporting.

ITEM 9B. Other Information

None.

JETBLUE AIRWAYS CORPORATION - 2012  10K 67

PART III   

PART III

ITEM 10.  Directors, Executive Ofﬁ cers and Corporate 

Governance

Code of Ethics

We adopted a Code of Ethics within the meaning of Item 406(b) of SEC 
Regulation S-K. This Code of Ethics applies to our principal executive 
ofﬁ cer, principal ﬁ nancial ofﬁ cer and principal accounting ofﬁ cer. This Code 
of Ethics is publicly available on our website at http://investor.jetblue.com. 
If we make substantive amendments to this Code of Ethics or grant any 
waiver, including any implicit waiver, we will disclose the nature of such 
amendment or waiver on our website or in a report on Form 8-K within 
four days of such amendment or waiver.

Information relating to executive ofﬁ cers is set forth in Part I of this report 
following Item 4 under “Executive Ofﬁ cers of the Registrant”. The other 
information required by this Item will be included in and is incorporated 
herein by reference from our deﬁ nitive proxy statement for our 2013 Annual 
Meeting of Stockholders to be held on May 9, 2013 to be ﬁ led with the 
SEC pursuant to Regulation 14A within 120 days after the end of our 
2012 ﬁ scal year, or our Proxy Statement.

ITEM 11.  Executive Compensation

The information required by this Item will be included in and is incorporated herein by reference from our Proxy Statement.

68

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 12.  Security Ownership of Certain Benefi cial Owners and Management and Related Stockholder Matters

PART III   

ITEM 12.  Security Ownership of Certain Beneﬁ cial 

Owners and Management and Related 
Stockholder Matters

Equity Compensation Plan Information

The table below provides information relating to our equity compensation plans (including individual compensation arrangements) under which our common 
stock is authorized for issuance as of December 31, 2012, as adjusted for stock splits:

Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
TOTAL

Number of securities to 
be issued upon exercise 
of outstanding options, 
warrants and rights
20,619,805

—  

20,619,805

Weighted-
average 
exercise price 
of outstanding 
options, warrants 
and rights
$  12.77
—
$  12.53

Number of securities 
remaining available 
for future issuance 
under equity 
compensation plans 
(excluding securities 
reﬂ ected in ﬁ rst column)
94,216,876
—
94,216,876

See Note 7 to our consolidated ﬁ nancial statements for further information regarding the material features of the above plans.

The other information required by this Item will be included in and is incorporated herein by reference from our Proxy Statement.

ITEM 13.  Certain Relationships and Related 

Transactions, and Director Independence

The information required by this Item will be included in and is incorporated herein by reference from our Proxy Statement.

ITEM 14.  Principal Accounting Fees and Services

The information required by this Item will be included in and is incorporated herein by reference from our Proxy statement.

JETBLUE AIRWAYS CORPORATION - 2012  10K 69

PART IV   

PART IV

ITEM 15.  Exhibits and Financial Statement Schedules

1.

2.

3.

Financial statements:
Consolidated Balance Sheets — December 31, 2012 and December 31, 2011
Consolidated Statements of Operations — For the years ended December 31, 2012, 2011 and 2010
Consolidated Statements of Comprehensive Income - For the years ended December 31, 2012, 2011 and 2010
Consolidated Statements of Cash Flows — For the years ended December 31, 2012, 2011 and 2010
Consolidated Statements of Stockholders’ Equity — For the years ended December 31, 2012, 2011 and 2010
Notes to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm
Financial Statement Schedule:
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule
Schedule II — Valuation of Qualifying Accounts and Reserves
All other schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere in 
the consolidated ﬁ nancial statements or notes thereto.
Exhibits: See accompanying Exhibit Index included after the signature page of this report for a list of the exhibits ﬁ led or furnished 
with or incorporated by reference in this report.

S-1
S-2

70

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on 
its behalf by the undersigned, thereunto duly authorized.

Date: 
February 20, 2013

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose 
signature appears below constitutes and appoints James G. Hnat his or 
her attorney-in-fact with power of substitution for him or her in any and 
all capacities, to sign any amendments, supplements or other documents 
relating to this Annual Report on Form 10-K which he or she deems 
necessary or appropriate, and to ﬁ le the same, with exhibits thereto, and 
other documents in connection therewith, with the Securities and Exchange 
Commission, hereby ratifying and conﬁ rming all that such attorney-in-fact 
or their substitute may do or cause to be done by virtue hereof.

By:

JETBLUE AIRWAYS CORPORATION
(Registrant)
/s/ DONALD DANIELS
Vice President, Controller, and Chief Accounting Ofﬁ cer 
(Principal Accounting Ofﬁ cer)

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of 
the registrant and in the capacities and on the dates indicated (and, as 
indicated with an asterisk, representing at least a majority of the members 
of the Board of Directors).

Signature
/S/ DAVID BARGER 
David Barger
/S/ MARK D. POWERS 
Mark D. Powers
/S/ DONALD DANIELS 
Donald Daniels
/S/ JENS BISCHOF 
Jens Bischof *
/S/ PETER BONEPARTH 
Peter Boneparth *
/S/ DAVID CHECKETTS 
David Checketts *
/S/ VIRGINIA GAMBALE 
Virginia Gambale *
/S/ STEPHAN GEMKOW 
Stephan Gemkow *
/S/ ELLEN JEWETT 
Ellen Jewett *
/S/ STANLEY MCCHRYSTAL 
Stanley McChrystal *
/S/ JOEL PETERSON 
Joel Peterson *
/S/ ANN RHOADES 
Ann Rhoades *

Capacity
President, Chief Executive Ofﬁ cer and Director
(Principal Executive Ofﬁ cer)

Chief Financial Ofﬁ cer (Principal Financial Ofﬁ cer)

Vice President, Controller, and Chief Accounting Ofﬁ cer 
(Principal Accounting Ofﬁ cer)

Director

Director

Director

Director

Director

Director

Director

Director

Director

Date
February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

February 20, 2013

JETBLUE AIRWAYS CORPORATION - 2012  10K 71

 
PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

EXHIBIT INDEX

2.1

3.2(a)

3.2(b)

3.3(e)

3.3(f)

3.3(g)

3.3(h)

3.4

4.1

4.2

4.2(a)

4.2(b)

4.2(c)

4.2(d)

4.4

4.5

4.5(a)

4.7

4.7(a)

4.7(b)

4.7(c)

4.7(d)

4.7(e)

Membership Interest Purchase Agreement among Harris Corporation and Thales Avionics In-Flight Systems, LLC and In-Flight 
Liquidating, LLC and Glenn S. Latta and Jeffrey A. Frisco and Andreas de Greef and JetBlue Airways Corporation, dated as of 
September 9, 2002 relating to the interests in LiveTV, LLC—incorporated by reference to Exhibit 2.1 to our Current Report on 
Form 8-K dated September 27, 2002.
Amended and Restated Certiﬁ cate of Incorporation of JetBlue Airways Corporation—incorporated by reference to Exhibit 3.5 to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.
Certiﬁ cate of Amendment of Certiﬁ cate of Incorporation, dated May 20, 2010—incorporated by reference to Exhibit 3.2(b) to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.
Fifth Amended and Restated Bylaws of JetBlue Airways Corporation—incorporated by reference to Exhibit 3.6 of our Quarterly 
Report on Form 10-Q for the quarter ended June 30, 2008.
Fifth Amended and Restated Bylaws of JetBlue Airways Corporation (consolidated amendments as of November 12, 2009)—
incorporated by reference to Exhibit 3.3(f) to our Annual Report on Form 10-K for the year ended December 31, 2009.
Amended Consolidated Fifth Amended and Restated Bylaws of JetBlue Airways Corporation—incorporated by reference to Exhibit 
3.1 to our Current Report on Form 8-K dated April 11, 2011.
Amended Consolidated Fifth Amended and Restated Bylaws of JetBlue Airways Corporation—incorporated by reference to Exhibit 
3.1 to our Current Report on Form 8-K dated September 18, 2012.
Certiﬁ cate of Designation of Series A Participating Preferred Stock dated April 1, 2002—incorporated by reference to Exhibit 3.2 to 
our Current Report on Form 8-K dated July 10, 2003.
Specimen Stock Certiﬁ cate—incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1, as amended 
(File No. 333-82576).
Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by and among JetBlue Airways Corporation 
and the Stockholders named therein—incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1, as 
amended (File No. 333-82576).
Amendment No. 1, dated as of June 30, 2003, to Amended and Restated Registration Rights Agreement, dated as of August 10, 
2000, by and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to Exhibit 4.2 
to the Registration Statement on Form S-3, ﬁ led on July 3, 2003, as amended on July 10, 2003 (File No. 333-106781).
Amendment No. 2, dated as of October 6, 2003, to Amended and Restated Registration Rights Agreement, dated as of 
August 10, 2000, by and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to 
Exhibit 4.9 to the Registration Statement on Form S-3, ﬁ led on October 7, 2003 (File No. 333-109546).
Amendment No. 3, dated as of October 4, 2004, to Amended and Restated Registration Rights Agreement, dated as of 
August 10, 2000, by and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to 
Exhibit 4.1 to our Current Report on Form 8-K/A dated October 4, 2004.
Amendment No. 4, dated as of June 22, 2006, to Amended and Restated Registration Rights Agreement, dated as of 
August 10, 2000, by and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to 
Exhibit 4.19 to our Registration Statement on Form S-3 ARS, ﬁ led on June 30, 2006 (File No. 333-135545).
Summary of Rights to Purchase Series A Participating Preferred Stock—incorporated by reference to Exhibit 4.4 to the Registration 
Statement on Form S-1, as amended (File No. 333-82576).
Stockholder Rights Agreement—incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K for the year ended 
December 31, 2002.
Amendment to the Stockholder Rights Agreement, dated as of January 17, 2008, by and between JetBlue Airways Corporation 
and Computershare Trust Company, N.A.—incorporated by reference to Exhibit 4.5(a) to our Current Report on Form 8-K dated 
January 23, 2008.
Form of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Certiﬁ cate Series 2004-1G-1-O—incorporated by 
reference to Exhibit 4.1 to our Current Report on Form 8-K dated March 24, 2004.
Form of Three-Month LIBOR plus 0.420% JetBlue Airways Pass Through Certiﬁ cate Series 2004-1G-2-O—incorporated by 
reference to Exhibit 4.2 to our Current Report on Form 8-K dated March 24, 2004.
Form of Three-Month LIBOR plus 4.250% JetBlue Airways Pass Through Certiﬁ cate Series 2004-1C-O—incorporated by reference 
to Exhibit 4.3 to our Current Report on Form 8-K dated March 24, 2004.
Pass Through Trust Agreement, dated as of March 24, 2004, between JetBlue Airways Corporation and Wilmington Trust 
Company, as Pass Through Trustee, made with respect to the formation of JetBlue Airways Pass Through Trust, Series 
2004-1G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-1G-1-O, 
Pass Through Certiﬁ cates—incorporated by reference to Exhibit 4.4 to our Current Report on Form 8-K dated March 24, 2004 (1).
Revolving Credit Agreement (2004-1G-1), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination 
Agent, as agent and trustee for the JetBlue Airways 2004-1G-1 Pass Through Trust, as Borrower, and Landesbank Hessen-
Thüringen Girozentrale, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K 
dated March 24, 2004.
Revolving Credit Agreement (2004-1G-2), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination 
Agent, as agent and trustee for the JetBlue Airways 2004-1G-2 Pass Through Trust, as Borrower, and Landesbank Hessen-
Thüringen Girozentrale, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K 
dated March 24, 2004.

72

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

4.7(f)

4.7(g)

4.7(h)

4.7(i)

4.7(j)

4.7(k)

4.7(l)

4.7(m)

4.7(n)

4.7(o)

4.7(p)

4.7(q)

4.7(r)

4.7(s)

4.7(t)

4.7(u)

4.7(v)

4.7(w)

4.7(x)

4.7(y)

Revolving Credit Agreement (2004-1C), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination Agent, 
as agent and trustee for the JetBlue Airways 2004-1C Pass Through Trust, as Borrower, and Landesbank Hessen-Thüringen 
Girozentrale, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated 
March 24, 2004.
Deposit Agreement (Class G-1), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH 
Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.8 to our Current Report on Form 8-K 
dated March 24, 2004.
Deposit Agreement (Class G-2), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH 
Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K 
dated March 24, 2004.
Deposit Agreement (Class C), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH 
Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K 
dated March 24, 2004.
Escrow and Paying Agent Agreement (Class G-1), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow 
Agent, Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and 
Credit Lyonnais Securities (USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of 
JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O, as Pass Through Trustee, and Wilmington Trust Company, as 
Paying Agent—incorporated by reference to Exhibit 4.11 to our Current Report on Form 8-K dated March 24, 2004.
Escrow and Paying Agent Agreement (Class G-2), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow 
Agent, Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and 
Credit Lyonnais Securities (USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of 
JetBlue Airways Corporation Pass Through Trust 2004-1G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as 
Paying Agent—incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K dated March 24, 2004.
Escrow and Paying Agent Agreement (Class C), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow Agent, 
Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Credit 
Lyonnais Securities (USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue 
Airways Corporation Pass Through Trust 2004-1C-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—
incorporated by reference to Exhibit 4.13 to our Current Report on Form 8-K dated March 24, 2004.
ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 
2004-1G-1-O—incorporated by reference to Exhibit 4.14 to our Current Report on Form 8-K dated March 24, 2004 (2).
Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services Inc., as Above 
Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass 
Through Trust 2004-1G-1-O—incorporated by reference to Exhibit 4.15 to our Current Report on Form 8-K dated March 24, 2004.
Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services, Inc., as Above 
Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass 
Through Trust 2004-1G-2-O—incorporated by reference to Exhibit 4.16 to our Current Report on Form 8-K dated March 24, 2004.
Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services, Inc., as Above 
Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass 
Through Trust 2004-1C-O—incorporated by reference to Exhibit 4.17 to our Current Report on Form 8-K dated March 24, 2004.
Class G-1 Above Cap Liquidity Facility Conﬁ rmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as 
Above Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to 
Exhibit 4.18 to our Current Report on Form 8-K dated March 24, 2004.
Class G-2 Above Cap Liquidity Facility Conﬁ rmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as 
Above Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to 
Exhibit 4.19 to our Current Report on Form 8-K dated March 24, 2004.
Class C Above Cap Liquidity Facility Conﬁ rmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as Above 
Cap Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.20 
to our Current Report on Form 8-K dated March 24, 2004.
Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class G-1 Above Cap Liquidity 
Facility—incorporated by reference to Exhibit 4.21 to our Current Report on Form 8-K dated March 24, 2004.
Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class G-2 Above Cap Liquidity 
Facility—incorporated by reference to Exhibit 4.22 to our Current Report on Form 8-K dated March 24, 2004.
Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class C Above Cap Liquidity 
Facility—incorporated by reference to Exhibit 4.23 to our Current Report on Form 8-K dated March 24, 2004.
Insurance and Indemnity Agreement, dated as of March 24, 2004, among MBIA Insurance Corporation, as Policy Provider, JetBlue 
Airways Corporation and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.24 to our 
Current Report on Form 8-K dated March 24, 2004.
MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated March 24, 2004, bearing Policy Number 43567(1) issued to 
Wilmington Trust Company, as Subordination Agent for the Class G-1 Certiﬁ cates—incorporated by reference to Exhibit 4.25 to our 
Current Report on Form 8-K dated March 24, 2004.
MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated March 24, 2004, bearing Policy Number 43567(2) issued to 
Wilmington Trust Company, as Subordination Agent for the Class G-2 Certiﬁ cates—incorporated by reference to Exhibit 4.26 to our 
Current Report on Form 8-K dated March 24, 2004.

JETBLUE AIRWAYS CORPORATION - 2012  10K 73

PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

4.7(z)

4.7(aa)

4.7(ab)

4.7(ac)

4.8

4.8(a)

4.8(b)

4.8(c)

4.8(d)

4.8(e)

4.8(f)

4.8(g)

4.8(h)

4.8(i)

4.8(j)

4.8(k)

4.8(l)

4.8(m)

4.8(n)

Intercreditor Agreement, dated as of March 24, 2004, among Wilmington Trust Company, as Pass Through Trustee, Landesbank 
Hessen- Thüringen Girozentrale, as Primary Liquidity Provider, Morgan Stanley Capital Services, Inc., as Above-Cap Liquidity 
Provider, MBIA Insurance Corporation, as Policy Provider, and Wilmington Trust Company, as Subordination Agent—incorporated 
by reference to Exhibit 4.27 to our Current Report on Form 8-K dated March 24, 2004.
Note Purchase Agreement, dated as of March 24, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in its 
separate capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent—incorporated by 
reference to Exhibit 4.28 to our Current Report on Form 8-K dated March 24, 2004.
Form of Trust Indenture and Mortgage between JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, as 
Mortgagee—incorporated by reference to Exhibit 4.29 to our Current Report on Form 8-K dated March 24, 2004.
Form of Participation Agreement among JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, in its separate 
capacities as Mortgagee, as Pass Through Trustee and as Subordination Agent—incorporated by reference to Exhibit 4.30 to our 
Current Report on Form 8-K dated March 24, 2004.
Form of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Certiﬁ cate Series 2004-2G-1-O, with attached form of 
Escrow Receipt—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated November 9, 2004.
Form of Three-Month LIBOR plus 0.450% JetBlue Airways Pass Through Certiﬁ cate Series 2004-2G-2-O, with attached form of 
Escrow Receipt—incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated November 9, 2004.
Form of Three-Month LIBOR plus 3.100% JetBlue Airways Pass Through Certiﬁ cate Series 2004-2C-O, with attached form of 
Escrow Receipt—incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K dated November 9, 2004.
Pass Through Trust Agreement, dated as of November 15, 2004, between JetBlue Airways Corporation and Wilmington 
Trust Company, as Pass Through Trustee, made with respect to the formation of JetBlue Airways Pass Through Trust, Series 
2004-2G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-2G-1-O, 
Pass Through Certiﬁ cates—incorporated by reference to Exhibit 4.4 to our Current Report on Form 8-K dated November 9, 2004 (3).
Revolving Credit Agreement (2004-2G-1), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination 
Agent, as agent and trustee for the JetBlue Airways 2004-2G-1 Pass Through Trust, as Borrower, and Landesbank Baden-
Württemberg, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K dated 
November 9, 2004.
Revolving Credit Agreement (2004-2G-2), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination 
Agent, as agent and trustee for the JetBlue Airways 2004-2G-2 Pass Through Trust, as Borrower, and Landesbank Baden-
Württemberg, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K dated 
November 9, 2004.
Revolving Credit Agreement (2004-2C), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination 
Agent, as agent and trustee for the JetBlue Airways 2004-2C Pass Through Trust, as Borrower, and Landesbank Baden-
Württemberg, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated 
November 9, 2004.
Deposit Agreement (Class G-1), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and 
HSH Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.8 to our Current Report on Form 8-K 
dated November 9, 2004.
Deposit Agreement (Class G-2), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and 
HSH Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K 
dated November 9, 2004.
Deposit Agreement (Class C), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH 
Nordbank AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K 
dated November 9, 2004.
Escrow and Paying Agent Agreement (Class G-1), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow 
Agent, Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, 
Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation 
Pass Through Trust 2004-2G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by 
reference to Exhibit 4.11 to our Current Report on Form 8-K dated November 9, 2004.
Escrow and Paying Agent Agreement (Class G-2), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow 
Agent, Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, 
Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation 
Pass Through Trust 2004-2G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by 
reference to Exhibit 4.12 to our Current Report on Form 8-K dated November 9, 2004.
Escrow and Paying Agent Agreement (Class C), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow 
Agent, Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, 
Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass 
Through Trust 2004-2C-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference 
to Exhibit 4.13 to our Current Report on Form 8-K dated November 9, 2004.
ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, and 
Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O—
incorporated by reference to Exhibit 4.14 to our Current Report on Form 8-K dated November 9, 2004 (4).
Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 
2004-2G-1-O—incorporated by reference to Exhibit 4.15 to our Current Report on Form 8-K dated November 9, 2004.

74

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

4.8(o)

4.8(p)

4.8(q)

4.8(r)

4.8(s)

4.8(t)

4.8(u)

4.8(v)

4.8(w)

4.8(x)

4.8(y)

4.8(z)

4.9

4.9(b)

4.9(c)

4.10

4.10(a)

4.10(b)

4.10(c)

4.10(d)

Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 
2004-2G-2-O—incorporated by reference to Exhibit 4.16 to our Current Report on Form 8-K dated November 9, 2004.
Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility 
Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-
2C-O—incorporated by reference to Exhibit 4.17 to our Current Report on Form 8-K dated November 9, 2004.
Class G-1 Above Cap Liquidity Facility Conﬁ rmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.18 to our Current 
Report on Form 8-K dated November 9, 2004.
Class G-2 Above Cap Liquidity Facility Conﬁ rmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.19 to our Current 
Report on Form 8-K dated November 9, 2004.
Class C Above Cap Liquidity Facility Conﬁ rmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.20 to our Current 
Report on Form 8-K dated November 9, 2004.
Insurance and Indemnity Agreement, dated as of November 15, 2004, among MBIA Insurance Corporation, as Policy Provider, 
JetBlue Airways Corporation and Wilmington Trust Company, as Subordination Agent and Trustee—incorporated by reference to 
Exhibit 4.21 to our Current Report on Form 8-K dated November 9, 2004.
MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 15, 2004, bearing Policy Number 45243 issued 
to Wilmington Trust Company, as Subordination Agent for the Class G-1 Certiﬁ cates—incorporated by reference to Exhibit 4.22 to 
our Current Report on Form 8-K dated November 9, 2004.
MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 15, 2004, bearing Policy Number 45256 issued 
to Wilmington Trust Company, as Subordination Agent for the Class G-2 Certiﬁ cates—incorporated by reference to Exhibit 4.23 to 
our Current Report on Form 8-K dated November 9, 2004.
Intercreditor Agreement, dated as of November 15, 2004, among Wilmington Trust Company, as Pass Through Trustee, 
Landesbank Baden-Württemberg, as Primary Liquidity Provider, Citibank, N.A., as Above-Cap Liquidity Provider, MBIA Insurance 
Corporation, as Policy Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 
4.24 to our Current Report on Form 8-K dated November 9, 2004.
Note Purchase Agreement, dated as of November 15, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in 
its separate capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent—incorporated by 
reference to Exhibit 4.25 to our Current Report on Form 8-K dated November 9, 2004.
Form of Trust Indenture and Mortgage between JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, as 
Mortgagee—incorporated by reference to Exhibit 4.26 to our Current Report on Form 8-K dated November 9, 2004.
Form of Participation Agreement among JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, in its separate 
capacities as Mortgagee, as Pass Through Trustee and as Subordination Agent—incorporated by reference to Exhibit 4.27 to our 
Current Report on Form 8-K dated November 9, 2004.
Indenture, dated as of March 16, 2005, between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee, 
relating to the Company’s debt securities—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated 
March 10, 2005.
Second Supplemental Indenture to the Indenture ﬁ led as Exhibit 4.9 to this report, dated as of June 4, 2008, between JetBlue 
Airways Corporation and Wilmington Trust Company, as Trustee, relating to the Company’s 5.5% Convertible Debentures due 
2038—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated June 5, 2008.
Third Supplemental Indenture to the Indenture ﬁ led as Exhibit 4.9 to this report, dated as of June 4, 2008, between JetBlue Airways 
Corporation and Wilmington Trust Company, as Trustee, relating to the Company’s 5.5% Convertible Debentures due 2038—
incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated June 5, 2008.
Pass Through Trust Agreement, dated as of November 14, 2006, between JetBlue Airways Corporation and Wilmington Trust 
Company, as Pass Through Trustee, made with respect to the formation of JetBlue Airways (Spare Parts) G-1 Pass Through Trust, 
and the issuance of Three-Month LIBOR plus 0.230% JetBlue Airways (Spare Parts) G-1 Pass Through Certiﬁ cate—incorporated 
by reference to Exhibit 4.1 to our Current Report on Form 8-K dated November 14, 2006.
Pass Through Trust Agreement, dated as of November 14, 2006, between JetBlue Airways Corporation and Wilmington Trust 
Company, as Pass Through Trustee, made with respect to the formation of JetBlue Airways (Spare Parts) B-1 Pass Through Trust, 
and the issuance of Three-Month LIBOR plus 2.875% JetBlue Airways (Spare Parts) B-1 Pass Through Certiﬁ cate—incorporated 
by reference to Exhibit 4.2 to our Current Report on Form 8-K dated November 14, 2006.
Revolving Credit Agreement, dated as of November 14, 2006, between Wilmington Trust Company, as Subordination Agent, as 
agent and trustee for the JetBlue Airways (Spare Parts) G-1 Pass Through Trust, as Borrower, and Landesbank Hessen-Thüringen 
Girozentrale, as Primary Liquidity Provider—incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K dated 
November 14, 2006.
ISDA Master Agreement, dated as of November 14, 2006, between Morgan Stanley Capital Services Inc., as Above Cap Liquidity 
Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways (Spare Parts) G-1 Pass Through Trust—
incorporated by reference to Exhibit 4.4 to our Current Report on Form 8-K dated November 14, 2006.
Schedule to the ISDA Master Agreement, dated as of November 14, 2006, between Morgan Stanley Capital Services Inc., as 
Above Cap Liquidity Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways (Spare parts) G-1 
Pass Through Trust—incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K dated November 14, 2006.

JETBLUE AIRWAYS CORPORATION - 2012  10K 75

PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

4.10(e)

4.10(f)

4.10(g)

4.10(h)

4.10(i)

4.10(j)

4.10(k)

4.10(l)

4.10(m)

4.10(n)

4.10(o)

4.10(p)

4.10(q)

4.11

4.11(a)

4.12

4.13

4.14

4.15

4.16

4.17

4.18

4.19

4.20

4.21

4.22

Class G-1 Above Cap Liquidity Facility Conﬁ rmation, dated November 14, 2006, between Morgan Stanley Capital Services Inc., as 
Above Cap Liquidity Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.6 to 
our Current Report on Form 8-K dated November 14, 2006.
Insurance and Indemnity Agreement, dated as of November 14, 2006, among MBIA Insurance Corporation, as Policy Provider, 
JetBlue Airways Corporation and Wilmington Trust Company, as Subordination Agent and Trustee—incorporated by reference to 
Exhibit 4.7 to our Current Report on Form 8-K dated November 14, 2006.
Guarantee, dated as of November 14, 2006, by Morgan Stanley, relating to the Above-Cap Liquidity Facility—incorporated by 
reference to Exhibit 4.8 to our Current Report on Form 8-K dated November 14, 2006.
MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 14, 2006, bearing Policy Number 487110 
issued to Wilmington Trust Company, as Subordination Agent for the Class G-1 Certiﬁ cates—incorporated by reference to Exhibit 
4.9 to our Current Report on Form 8-K dated November 14, 2006.
Intercreditor Agreement, dated as of November 14, 2006, among Wilmington Trust Company, as Pass Through Trustee, 
Landesbank Hessen-Thüringen Girozentrale, as Primary Liquidity Provider, Morgan Stanley Capital Services, Inc., as Above-Cap 
Liquidity Provider, MBIA Insurance Corporation, as Policy Provider, and Wilmington Trust Company, as Subordination Agent—
incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K dated November 14, 2006.
Note Purchase Agreement, dated as of November 14, 2006, among JetBlue Airways Corporation, Wilmington Trust Company, in 
its separate capacities as Pass Through Trustee, as Subordination Agent and as Mortgagee—incorporated by reference to Exhibit 
4.11 to our Current Report on Form 8-K dated November 14, 2006.
Trust Indenture and Mortgage, dated November 14, 2006, between JetBlue Airways Corporation, as Owner, and Wilmington Trust 
Company, as Mortgagee—incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K dated November 14, 2006.
Collateral Maintenance Agreement, dated as of November 14, 2006, among, JetBlue Airways Corporation, MBIA Insurance 
Corporation, as Initial Policy Provider, Wilmington Trust Company, as Mortgagee, and Additional Policy Provider(s), if any, which 
may from time to time hereafter become parties—incorporated by reference to Exhibit 4.13 to our Current Report on Form 8-K 
dated November 14, 2006.
Reference Agency Agreement, dated November 14, 2006, among JetBlue Airways Corporation, Wilmington Trust Company as 
Subordination Agent and Mortgagee and Reference Agent—incorporated by reference to Exhibit 4.14 to our Current Report on 
Form 8-K dated November 14, 2006.
Form of JetBlue Airways (Spare Parts) G-1 Pass Through Certiﬁ cate (included in Exhibit 4.10)—incorporated by reference to Exhibit 
4.15 to our Current Report on Form 8-K dated November 14, 2006.
Form of JetBlue Airways (Spare Parts) B-1 Pass Through Certiﬁ cate (included in Exhibit 4.10(a))—incorporated by reference to 
Exhibit 4.16 to our Current Report on Form 8-K dated November 14, 2006.
Form of JetBlue Airways (Spare Parts) G-1 Equipment Note—incorporated by reference to Exhibit 4.17 to our Current Report on 
Form 8-K dated November 14, 2006.
Form of JetBlue Airways (Spare Parts) B-1 Equipment Note—incorporated by reference to Exhibit 4.18 to our Current Report on 
Form 8-K dated November 14, 2006.
Stock Purchase Agreement, dated as of December 13, 2007, between JetBlue Airways Corporation and Deutsche Lufthansa AG—
incorporated by reference to Exhibit 4.11 to our Current Report on Form 8-K dated December 13, 2007.
Amendment No. 1, dated as of January 22, 2008, to the Stock Purchase Agreement, dated as of December 13, 2007, between 
JetBlue Airways Corporation and Deutsche Lufthansa AG—incorporated by reference to Exhibit 4.11(a) to our Current Report on 
Form 8-K dated January 23, 2008.
Registration Rights Agreement, dated as of January 22, 2008, by and between JetBlue Airways Corporation and Deutsche 
Lufthansa AG—incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K dated January 23, 2008.
Supplement Agreement, dated as of May 27, 2008, between JetBlue Airways Corporation and Deutsche Lufthansa AG –
incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K dated May 28, 2008.
Second Supplemental Indenture dated as of June 4, 2008 between JetBlue Airways Corporation and Wilmington Trust Company, 
as Trustee—incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K ﬁ led on June 5, 2008.
Third Supplemental Indenture dated as of June 4, 2008 between JetBlue Airways Corporation and Wilmington Trust Company, as 
Trustee—incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K ﬁ led on June 5, 2008.
Form of Global Debenture—5.50% Convertible Debenture due 2038 (Series A) (included as part of Exhibit 4.1)—incorporated by 
reference to Exhibit 4.3 to Current Report on Form 8-K ﬁ led on June 5, 2008.
Form of Global Debenture—5.50% Convertible Debenture due 2038 (Series B) (included as part of Exhibit 4.2)—incorporated by 
reference to Exhibit 4.4 to Current Report on Form 8-K ﬁ led on June 5, 2008.
Fourth Supplemental Indenture dated as of June 9, 2009 between JetBlue Airways Corporation and Wilmington Trust Company, as 
Trustee—incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K ﬁ led on June 9, 2009.
Fifth Supplemental Indenture dated as of June 9, 2009 between JetBlue Airways Corporation and Wilmington Trust Company, as 
Trustee—incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K ﬁ led on June 9, 2009.
Form of Global Debenture—6.75% Convertible Debenture due 2039 (Series A)—incorporated by reference to Exhibit 4.3 to Current 
Report on Form 8-K ﬁ led on June 9, 2009.
Form of Global Debenture—6.75% Convertible Debenture due 2039 (Series B)—incorporated by reference to Exhibit 4.3 to Current 
Report on Form 8-K ﬁ led on June 9, 2009.
Registration Rights Agreement, dated as of April 5, 2012, among JetBlue Airways Corporation, Deutsche Lufthansa AG and 
Lufthansa Malta Blues LP - incorporated by reference to Exhibit 4.22 to our Current Report on Form 8-K ﬁ led on April 5, 2012.

76

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

10.3**

10.3(a)**

10.3(b)**

10.3(c)**

10.3(d)**

10.3(e)**

10.3(f)**

10.3(g)**

10.3(h)**

10.3(i)**

10.3(j)**

10.3(k)**

10.3(l)**

10.3(m)**

10.3(n)**

10.3(o)**

10.3(p)**

10.3(q)**

10.3(r)**

10.3(s)**

10.3(t)**

10.3(u)**

10.3(v)**

V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, including Side Letters No. 1 
through No. 3 and No. 5 through No. 9—incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1, as 
amended (File No. 333-82576).
Side Letter No. 10 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
April 25, 2002—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 
2002.
Side Letter No. 11 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, 
dated February 10, 2003—incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the year ended 
December 31, 2002.
Side Letter No. 12 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, 
dated March 24, 2003—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2003.
Side Letter No. 13 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
April 23, 2003—incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated June 30, 2003.
Side Letter No. 14 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, 
dated October 3, 2003—incorporated by reference to Exhibit 10.15 to our Annual Report on Form 10-K for the year ended 
December 31, 2003.
Side Letter No. 15 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, 
dated November 10, 2003—incorporated by reference to Exhibit 10.16 to our Annual Report on Form 10-K for the year ended 
December 31, 2003.
Side Letter No. 16 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
February 20, 2004—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2004.
Side Letter No. 17 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, 
dated June 11, 2004—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended 
June 30, 2004.
Side Letter No. 18 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
November 19, 2004—incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated November 19, 2004.
Side Letter No. 19 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, 
dated July 21, 2005—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2005.
Side Letter No. 20 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, 
dated July 6, 2006—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended 
June 30, 2006.
Side Letter No. 21 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated 
January 30, 2007—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2007.
Side Letter No. 22 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, 
dated March 27, 2007—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2007.
Side Letter No. 23 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated 
December 18, 2007—incorporated by reference to Exhibit 10.3(n) to our Annual Report on Form 10-K, as amended, for the year 
ended December 31, 2007.
Side Letter No. 24 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated April 2, 
2008—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.
Side Letter No. 25 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
May 27, 2008—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 
2008.
Side Letter No. 26 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
January 27, 2009—incorporated by reference to Exhibit 10.3(q) to our Quarterly Report on Form 10-Q for the quarter ended March 
31, 2009.
Side Letter No. 27 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated June 
5, 2009–incorporated by reference to Exhibit 10.3(r) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.
Side letter No. 28 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated August 
31, 2010—incorporated by reference to Exhibit 10.3(s) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 
2010.
Side letter No. 29 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated March 
14, 2011—incorporated by reference to Exhibit 10.3(t) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 
2011.
Side letter No. 30 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated August 
17, 2011—incorporated by reference to Exhibit 10.3(u) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 
2011.
Side letter No. 31 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
September 27, 2011—incorporated by reference to Exhibit 10.3(v) to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2011.

JETBLUE AIRWAYS CORPORATION - 2012  10K 77

PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

10.3(w)**

10.3(x)**

10.3(y)**

10.3(z)**

10.3(aa)**

10.3(ab)***

10.4**

10.5**

10.14*

10.15

10.17**

10.17(a)**

10.17(b)**

10.17(c)**

10.17(d)**

10.17(e)**

10.17(f)**

10.17(g)**

10.17(h)**

10.17(i)**

10.17(j)**

10.17(k)**

10.17(l)**

Side letter No. 32 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
November 8, 2011—incorporated by reference to Exhibit 10.3(w) to our Annual Report on Form 10-K for the year ended December 
31, 2011.
Side letter No. 33 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
December 1, 2011—incorporated by reference to Exhibit 10.3(x) to our Annual Report on Form 10-K for the year ended December 
31, 2011.
Side letter No. 34 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
February 21, 2012—incorporated by reference to Exhibit 10.3(y) to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2012.
Side letter No. 35 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated March 
15, 2012—incorporated by reference to Exhibit 10.3(z) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 
2012.
Side letter No. 36 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated May 1, 
2012—incorporated by reference to Exhibit 10.3(aa) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.
Side letter No. 37 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated 
November 9, 2012.
Amendment and Restated Agreement between JetBlue Airways Corporation and LiveTV, LLC, dated as of December 17, 2001, 
including Amendments No. 1, No. 2 and 3—incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1, 
as amended (File No. 333-82576).
GDL Patent License Agreement between Harris Corporation and LiveTV, LLC, dated as of September 2, 2002—incorporated by 
reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for quarter ended September 30, 2002.
JetBlue Airways Corporation 401(k) Retirement Plan, amended and restated as of January 1, 2009—incorporated by reference to 
Exhibit 10.14 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
Form of Director/Ofﬁ cer Indemniﬁ cation Agreement—incorporated by reference to Exhibit 10.20 to the Registration Statement 
on Form S-1, as amended (File No. 333-82576) and referenced as Exhibit 10.19 in our Current Report on Form 8-K dated 
February 12, 2008.
EMBRAER-190 Purchase Agreement DCT-025/2003, dated June 9, 2003, between Embraer-Empresa Brasileira de Aeronautica 
S.A. and JetBlue Airways Corporation— incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K dated 
June 30, 2003.
Amendment No. 1 to Purchase Agreement DCT-025/2003, dated as of July 8, 2005, between Embraer-Empresa Brasileria 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.3 to our Quarterly Report on 
Form 10-Q for the quarter ended September 30, 2005.
Amendment No. 2 to Purchase Agreement DCT-025/2003, dated as of January 5, 2006, between Embraer-Empresa Brasileria de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22(b) to our Annual Report on Form 
10-K for the year ended December 31, 2005.
Amendment No. 3 to Purchase Agreement DCT-025/2003, dated as of December 4, 2006, between Embraer-Empresa Brasileria 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.21( c) to our Annual Report on 
Form 10-K for the year ended December 31, 2006.
Amendment No. 4 to Purchase Agreement DCT-025/2003, dated as of October 17, 2007, between Embraer-Empresa Brasileria 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(d) to our Annual Report on Form 
10-K for the year ended December 31, 2007.
Amendment No. 5 to Purchase Agreement DCT-025/2003, dated as of July 18, 2008, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 
10-Q for the quarter ended September 30, 2008.
Amendment No. 6 to Purchase Agreement DCT-025/2003, dated as of February 17, 2009, between Embraer-Empresa Brasileira 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(f) to our Quarterly Report on 
Form 10-Q for the quarter ended March 31, 2009.
Amendment No. 7 to Purchase Agreement DCT-025/2003, dated as of December 14, 2009, between Embraer-Empresa Brasileira 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(g) to our Annual Report on Form 
10-K for the year ended December 31, 2009.
Amendment No. 8 to Purchase Agreement DCT-025/2003, dated as of March 11, 2010, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(h) to our Quarterly Report on Form 
10-Q for the quarter ended March 31, 2010.
Amendment No. 9 to Purchase Agreement DCT-025/2003, dated as of May 24, 2010, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(i) to our Quarterly Report on Form 
10-Q for the quarter ended June 30, 2010.
Amendment No. 10 to Purchase Agreement DCT-025/2003, dated as of September 10, 2010, between Embraer-Empresa 
Brasileira de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(j) to our Quarterly 
Report on Form 10-Q for the quarter ended September 30, 2010.
Amendment No. 11 to Purchase Agreement DCT-025/2003, dated as of October 20, 2011, between Embraer-Empresa Brasileira 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(k) to our Annual Report on Form 
10-K for the year ended December 31, 2011.
Amendment No. 12 to Purchase Agreement DCT-025/2003, dated as of October 25, 2011, between Embraer-Empresa Brasileira 
de Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(l) to our Annual Report on Form 
10-K for the year ended December 31, 2011.

78

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

10.17(m)**

10.17(n)***

10.17(o)***

10.18**

10.18(a)**

10.18(b)**

10.18(c)**

10.18(d)**

10.18(e)**

10.18(f)**

10.18(g)**

10.18(h)**

10.18(i)**

10.20

10.21*

10.22*

10.23*

10.23(a)*

10.23(b)*

10.25

10.26

10.27

10.29

10.30**

10.31(a)

Amendment No. 13 to Purchase Agreement DCT-025/2003, dated as of July 20, 2012, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(m) to our Quarterly Report on Form 
10-Q for the quarter ended September 30, 2012.
Amendment No. 14 to Purchase Agreement DCT-025/2003, dated as of December 3, 2012, between Embraer-Empresa Brasileira 
de Aeronautica S.A. and JetBlue Airways Corporation.
Amendment No. 15 to Purchase Agreement DCT-025/2003, dated as of December 19, 2012, between Embraer-Empresa 
Brasileira de Aeronautica S.A. and JetBlue Airways Corporation.
Letter Agreement DCT-026/2003, dated June 9, 2003, between Embraer-Empresa Brasileira de Aeronautica S.A. and JetBlue 
Airways Corporation—incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K dated June 30, 2003.
Amendment No. 1, dated as of July 8, 2005, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.4 to our Quarterly Report on 
Form 10-Q for the quarter ended September 30, 2005.
Amendment No. 2, dated as of January 5, 2006, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22(b) to our Annual Report on Form 
10-K for the year ended December 31, 2006.
Amendment No. 3, dated as of December 4, 2006, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22(c) to our Annual Report on Form 
10-K for the year ended December 31, 2006.
Amendment No. 4, dated as of October 17, 2007, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileria de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(d) to our Annual Report on Form 
10-K for the year ended December 31, 2007.
Amendment No. 5 to Letter Agreement DCT-026/2003, dated as of March 6, 2008, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 
10-Q for the quarter ended September 30, 2008.
Amendment No. 6 to Letter Agreement DCT-026/2003, dated as of July 18, 2008, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 
10-Q for the quarter ended September 30, 2008.
Amendment No. 7 to Letter Agreement DCT-026/2003, dated as of February 17, 2009, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(g) to the Quarterly Report on Form 
10-Q for the quarter ended March 31, 2009.
Amendment No. 8 to Letter Agreement DCT-026/2003, dated as of December 14, 2009, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(h) to the Annual Report on Form 
10-K for the year ended December 31, 2009.
Amendment No. 9 to Letter Agreement DCT-026/2003, dated as of March 11, 2010, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(i) to the Quarterly Report on Form 
10-Q for the quarter ended March 31, 2010.
Agreement of Lease (Port Authority Lease No. AYD-350), dated November 22, 2005, between The Port Authority of New York and 
New Jersey and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K for 
the year ended December 31, 2005.
Amended and Restated 2002 Stock Incentive Plan, dated November 7, 2007, and form of award agreement—incorporated by 
reference to Exhibit 10.21 to the Annual Report for Form 10-K for the year ended December 31, 2008.
JetBlue Airways Corporation Executive Change in Control Severance Plan, dated as of June 28, 2007—incorporated by reference 
to Exhibit 10.1 to our Current Report on Form 8-K, dated June 28, 2007.
Employment Agreement, dated February 11, 2008, between JetBlue Airways Corporation and David Barger—incorporated by 
reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.
Amendment to Employment Agreement, dated July 8, 2009, between JetBlue Airways Corporation and David Barger—
incorporated by reference to Exhibit 10.23(a) to our Annual Report on Form 10-K for the year ended December 31, 2009.
Amendment no. 2 to Employment Agreement, dated December 21, 2010, between JetBlue Airways Corporation and David 
Barger—incorporated by reference to Exhibit 10.23(b) to our Current Report on Form 8-K ﬁ led on December 22, 2010.
Share Lending Agreement, dated as of May 29, 2008 between JetBlue Airways Corporation and Morgan Stanley Capital Services, 
Inc.—incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K ﬁ led on May 30, 2008.
Pledge and Escrow Agreement (Series A Debentures) dated as of June 4, 2008 among JetBlue Airways Corporation, Wilmington 
Trust Company, as Trustee, and Wilmington Trust Company, as Escrow Agent—incorporated by reference to Exhibit 10.1 to our 
Current Report on Form 8-K ﬁ led on June 5, 2008.
Pledge and Escrow Agreement (Series B Debentures) dated as of June 4, 2008 among JetBlue Airways Corporation, Wilmington 
Trust Company, as Trustee, and Wilmington Trust Company, as Escrow Agent—incorporated by reference to Exhibit 10.2 to our 
Current Report on Form 8-K ﬁ led on June 5, 2008.
Option Letter Agreement, dated as of June 3, 2009, between JetBlue Airways Corporation and Deutsche Lufthansa AG—
incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K ﬁ led on June 4, 2009.
Sublease by and between JetBlue Airways Corporation and Metropolitan Life Insurance Company—incorporated by reference to 
Exhibit 10.30 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2010.
JetBlue Airways Corporation 2011 Incentive Compensation Plan—incorporated by reference to Exhibit 10.31(a) to our Quarterly 
Report on Form 10-Q for the quarter ended June 30, 2011.

JETBLUE AIRWAYS CORPORATION - 2012  10K 79

PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

10.31(b)

10.33**

10.33(a)***

10.35*

12.1
21.1
23
31.1
31.2
32
99.2

JetBlue Airways Corporation 2011 Incentive Compensation Plan forms of award agreement—incorporated by reference to Exhibit 
10.31(b) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.
Airbus A320 Family Purchase Agreement, dated October 19, 2011, between Airbus S.A.S. and JetBlue Airways Corporation, 
including letter agreements 1-8, each dated as of same date—incorporated by reference to Exhibit 10.33 to our Annual Report on 
Form 10-K for the year ended December 31, 2011.
Letter Agreement 9 to Airbus A320 Family Purchase Agreement, dated December 19, 2012, between Airbus S.A.S. and JetBlue 
Airways Corporation.
JetBlue Airways Corporation 2011 Crewmember Stock Purchase Plan—incorporated by reference to Exhibit 10.35 to our Annual 
Report on Form 10-K for the year ended December 31, 2011.
Computation of Ratio of Earnings to Fixed Charges.
List of Subsidiaries.
Consent of Ernst & Young LLP.
Rule 13a-14(a)/15d-14(a) Certiﬁ cation of the Chief Executive Ofﬁ cer.
Rule 13a-14(a)/15d-14(a) Certiﬁ cation of the Chief Financial Ofﬁ cer.
Section 1350 Certiﬁ cations.
Letter of Approval from the City of Long Beach Department of Public Works, dated May 22, 2001, approving City Council 
Resolution C-27843 regarding Flight Slot Allocation at Long Beach Municipal Airport—incorporated by reference to Exhibit 99.2 to 
the Registration Statement on Form S-1, as amended (File No. 333-82576).
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Labels Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document

101.INS****
101.SCH****
101.CAL****
101.LAB****
101.PRE****
* 
**  Pursuant to a Confidential Treatment Request under Rule 24b-2 filed with and approved by the SEC, portions of this exhibit have been omitted.
***  Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment 

Compensatory plans in which the directors and executive officers of JetBlue participate.

Request filed with the Commission.

****  XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities 

Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)  Documents substantially identical in all material respects to the document filed as Exhibit 4.4 to our Current Report on Form 8-K dated March 24, 2004 (which exhibit relates to formation 
of JetBlue Airways Pass Through Trust, Series 2004-1G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-1G-1-O, Pass Through 
Certificates) have been entered into with respect to formation of each of JetBlue Airways Pass Through Trusts, Series 2004-1G-2-O and Series 2004-1C-O and the issuance of each of 
Three-Month LIBOR plus 0.420% JetBlue Airways Pass Through Trust, Series 2004-1G-2-O and Three-Month LIBOR plus 4.250% JetBlue Airways Pass Through Trust, Series 2004-1C-O. 
Pursuant to Instruction 2 of Item 601 of Regulation S-K, Exhibit 99.1, incorporated by reference to our Current Report on Form 8-K dated March 24, 2004, sets forth the terms by which 
such substantially identical documents differ from Exhibit 4.7(c).

(2)  Documents substantially identical in all material respects to the document filed as Exhibit 4.14 our Current Report on Form 8-K dated March 24, 2004 (which exhibit relates to an above-cap 
liquidity facility provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O) have been entered into with respect to the above-cap liquidity facilities provided 
on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-1G-2-O and the JetBlue Airways Corporation Pass Through Trust 2004-1C-O. Pursuant to Instruction 2 of Item 601 
of Regulation S-K, Exhibit 99.2, incorporated by reference to our Current Report on Form 8-K dated March 24, 2004, sets forth the terms by which such substantially identical documents 
differ from Exhibit 4.7(m).

(3)  Documents substantially identical in all material respects to the document filed as Exhibit 4.4 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to formation 
of JetBlue Airways Pass Through Trust, Series 2004-2G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-2G-1-O, Pass Through 
Certificates) have been entered into with respect to formation of each of the JetBlue Airways Pass Through Trusts, Series 2004-2G-2-O and Series 2004-2C-O and the issuance of each of 
Three-Month LIBOR plus 0.450% JetBlue Airways Pass Through Trust, Series 2004-2G-2-O and Three-Month LIBOR plus 3.100% JetBlue Airways Pass Through Trust, Series 2004-2C-O. 
Pursuant to Instruction 2 of Item 601 of Regulation S-K, Exhibit 99.1, incorporated by reference to our Current Report on Form 8-K dated November 9, 2004, sets forth the terms by which 
such substantially identical documents differ from Exhibit 4.8(c).

(4)  Documents substantially identical in all material respects to the document filed as Exhibit 4.14 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to an 
above-cap liquidity facility provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O) have been entered into with respect to the above-cap liquidity facilities 
provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O and the JetBlue Airways Corporation Pass Through Trust 2004-2C-O. Pursuant to Instruction 2 of 
Item 601 of Regulation S-K, Exhibit 99.2, incorporated by reference to our Current Report on Form 8-K dated November 9, 2004, sets forth the terms by which such substantially identical 
documents differ from Exhibit 4.8(m).

80

JETBLUE AIRWAYS CORPORATION - 2012  10K

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of  
JetBlue Airways Corporation

We have audited the consolidated ﬁ nancial statements of JetBlue Airways Corporation as of December 31, 2012 and 2011, and for each of the three 
years in the period ended December 31, 2012, and have issued our report thereon dated February 20, 2013 (included elsewhere in this Annual Report 
on Form 10-K). Our audits also included the ﬁ nancial statement schedule listed in Item 15(2) of this Annual Report on Form 10-K. This schedule is the 
responsibility of the Company’s management. Our responsibility is to express an opinion on this schedule based on our audits.

In our opinion, the ﬁ nancial statement schedule referred to above, when considered in relation to the basic ﬁ nancial statements taken as a whole, 
presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

New York, New York

February 20, 2013 

JETBLUE AIRWAYS CORPORATION - 2012  10K 81

PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

JetBlue Airways Corporation

Schedule  II  Valuation  and  Qualifying  Accounts

(in thousands)

Description
Year Ended December 31, 2012
Allowances deducted from asset accounts:

Allowance for doubtful accounts
Allowance for obsolete inventory parts
Valuation allowance for deferred tax assets

Year Ended December 31, 2011
Allowances deducted from asset accounts:

Allowance for doubtful accounts
Allowance for obsolete inventory parts
Valuation allowance for deferred tax assets

Year Ended December 31, 2010
Allowances deducted from asset accounts:

Allowance for doubtful accounts
Allowance for obsolete inventory parts
Valuation allowance for deferred tax assets
(1)  Uncollectible accounts written off, net of recoveries.
(2)  Attributable to recognition and write-off of deferred tax assets.
(3) 

Inventory scrapped.

Additions

Balance at 
beginning of 
period

Charged to 
Costs and 
Expenses

Charged to 
Other 
Accounts

Deductions

Balance at 
end of period

$

$

$

7,586 $
3,886  
20,872  

6,172 $
3,636  
20,672  

5,660 $
3,373  
24,631  

5,472 $
1,250  
—  

7,017 $
1,026  
254  

7,471 $
1,018  
—  

— $
—  
—  

— $
—  
—  

— $
—  
—  

$

6,465(1) 
90(3) 
604(2) 

5,603(1)  $
776(3) 
54(2) 

6,959(1)  $
755(3) 
3,959(2) 

6,593
5,046
20,268

7,586
3,886
20,872

6,172
3,636
20,672

82

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
   
 
 
 
EXHIBIT 12.1  Computation of Ratio of Earnings to Fixed Charges

ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

(in millions, except ratios)
Earnings: 

Income before income taxes
Less: Capitalized interest
Add:
Fixed charges
Amortization of capitalized interest

Adjusted earnings
Fixed charges:

Interest expense
Amortization of debt costs
Rent expense representative of interest

$

$

$

2012

2011

2010

2009

2008

Year Ended December 31,  

$

$

$

209
(8)

270
2
473

167
9
94
270
1.75

145
(5)

273
2
415

171
8
94
273
1.52

$

$

$

$

$

$

$

$

161
(4)

272
2
431

172
8
92
272
1.59

$

$

$

$

104
(7)

298
2
397

189
9
100
298
1.33

(89)
(48)

357
2
222

228
17
112
357
—

TOTAL FIXED CHARGES
RATIO OF EARNINGS TO FIXED CHARGES (1)
(1)  Earnings were inadequate to cover fixed charges by $135 million for the year ended December 31, 2008.

$

$

EXHIBIT 21.1  List of Subsidiaries as of December 31, 2012

LiveTV, LLC (Delaware limited liability company)

LiveTV International, Inc. (Delaware corporation)

BlueBermuda Insurance, LTD (Bermuda corporation)

LiveTV Airfone LLC. (Delaware limited liability company)

JetBlue Airways Corporation Sucursal Colombia (Colombia corporation)

EXHIBIT 23 

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)  Registration Statement (Form S-8 No. 333-86444) pertaining to the JetBlue Airways Corporation 2002 Stock Incentive Plan;

(2)  Registration Statement (Form S-8 No. 333-129238) pertaining to the JetBlue Airways Corporation Crewmember Stock Purchase Plan;

(3)  Registration Statement (Form S-8 No. 333-161565) pertaining to the JetBlue Airways Corporation 2002 Stock Incentive Plan and the JetBlue 

Airways Corporation Crewmember Stock Purchase Plan;

(4)  Registration Statement (Form S-8 No. 333-174947) pertaining to the JetBlue Airways Corporation 2011 Incentive Compensation Plan and the 

JetBlue Airways Corporation 2011 Crewmember Stock Purchase Plan;

(5)  Registration Statement (Form S-3 No. 333-181058) of JetBlue Airways Corporation; and

(6)  Registration Statement (Form S-3 No. 333-184730) of JetBlue Airways Corporation

of our reports dated February 20, 2013, with respect to the consolidated ﬁ nancial statements of JetBlue Airways Corporation, the effectiveness of internal 
control over ﬁ nancial reporting of JetBlue Airways Corporation and the ﬁ nancial statement schedule of JetBlue Airways Corporation listed in Item 15(2) 
included in this Annual Report (Form 10-K) for the year ended December 31, 2012.

/s/ Ernst & Young LLP

New York, New York

February 20, 2013

JETBLUE AIRWAYS CORPORATION - 2012  10K 83

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

EXHIBIT 31.1  Rule 13a-14(a)/15d-14(a) Certiﬁ cation of the Chief Executive Ofﬁ cer 

I, David Barger, certify that: 

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of JetBlue Airways Corporation; 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 
by this report; 

Based on my knowledge, the ﬁ nancial statements, and other ﬁ nancial information included in this report, fairly present in all material respects the 
ﬁ nancial condition, results of operations and cash ﬂ ows of the registrant as of, and for, the periods presented in this report; 

The registrant’s other certifying ofﬁ cer and I are responsible for establishing and maintaining disclosure controls and procedures (as deﬁ ned in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over ﬁ nancial reporting (as deﬁ ned in Exchange Act Rules 13a-15(f) and 15d-15(f)) 
for the registrant and have:

a) 

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within 
those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over ﬁ nancial reporting, or caused such internal control over ﬁ nancial reporting to be designed under our 
supervision, to provide reasonable assurance regarding the reliability of ﬁ nancial reporting and the preparation of ﬁ nancial statements for 
external purposes in accordance with generally accepted accounting principles;

c) 

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over ﬁ nancial reporting that occurred during the registrant’s most recent 
ﬁ scal quarter (the registrant’s fourth ﬁ scal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially 
affect, the registrant’s internal control over ﬁ nancial reporting; and

5. 

The registrant’s other certifying ofﬁ cer and I have disclosed, based on our most recent evaluation of internal control over ﬁ nancial reporting, to the 
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a) 

b) 

all signiﬁ cant deﬁ ciencies and material weaknesses in the design or operation of internal control over ﬁ nancial reporting which are reasonably 
likely to adversely affect the registrant’s ability to record, process, summarize and report ﬁ nancial information; and

any fraud, whether or not material, that involves management or other employees who have a signiﬁ cant role in the registrant’s internal control 
over ﬁ nancial reporting.

Date: February 20, 2013

By:

/s/ DAVID BARGER
Chief Executive Ofﬁ cer

84

JETBLUE AIRWAYS CORPORATION - 2012  10K

 
ITEM 15 Exhibits and Financial Statement Schedules

PART IV   

EXHIBIT 31.2  Rule 13a-14(a)/15d-14(a) Certiﬁ cation of the Chief Financial Ofﬁ cer 

I, Mark D. Powers, certify that: 

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of JetBlue Airways Corporation; 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 
by this report; 

Based on my knowledge, the ﬁ nancial statements, and other ﬁ nancial information included in this report, fairly present in all material respects the 
ﬁ nancial condition, results of operations and cash ﬂ ows of the registrant as of, and for, the periods presented in this report; 

The registrant’s other certifying ofﬁ cer and I are responsible for establishing and maintaining disclosure controls and procedures (as deﬁ ned in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over ﬁ nancial reporting (as deﬁ ned in Exchange Act Rules 13a-15(f) and 15d-15(f)) 
for the registrant and have: 

a) 

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within 
those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over ﬁ nancial reporting, or caused such internal control over ﬁ nancial reporting to be designed under our 
supervision, to provide reasonable assurance regarding the reliability of ﬁ nancial reporting and the preparation of ﬁ nancial statements for 
external purposes in accordance with generally accepted accounting principles;

c) 

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over ﬁ nancial reporting that occurred during the registrant’s most recent 
ﬁ scal quarter (the registrant’s fourth ﬁ scal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially 
affect, the registrant’s internal control over ﬁ nancial reporting; and

5. 

The registrant’s other certifying ofﬁ cer and I have disclosed, based on our most recent evaluation of internal control over ﬁ nancial reporting, to the 
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a) 

b) 

all signiﬁ cant deﬁ ciencies and material weaknesses in the design or operation of internal control over ﬁ nancial reporting which are reasonably 
likely to adversely affect the registrant’s ability to record, process, summarize and report ﬁ nancial information; and

any fraud, whether or not material, that involves management or other employees who have a signiﬁ cant role in the registrant’s internal control 
over ﬁ nancial reporting.

Date: February 20, 2013

By:

/s/ MARK D. POWERS
Chief Financial Ofﬁ cer

JETBLUE AIRWAYS CORPORATION - 2012  10K 85

 
PART IV   
ITEM 15 Exhibits and Financial Statement Schedules

EXHIBIT 32 

Section 1350 Certiﬁ cations

In connection with the Annual Report of JetBlue Airways Corporation on Form 10-K for the year ended December 31, 2012, as ﬁ led with the Securities 
and Exchange Commission on February 20, 2013 (the “Report”), the undersigned, in the capacities and on the dates indicated below, each hereby 
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies 
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and the information contained in the 
Report fairly presents, in all material respects, the ﬁ nancial condition and results of operations of JetBlue Airways Corporation. 

Date: February 20, 2013

Date: February 20, 2013

By:

By:

/s/ DAVID BARGER
Chief Executive Ofﬁ cer

/s/ MARK D. POWERS
Chief Financial Ofﬁ cer

86

JETBLUE AIRWAYS CORPORATION - 2012  10K