10-Q 1 jblu-20210930.htm 10-Q jblu-20210930
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(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
September 30, 2021September 30, 2020
Cash and cash equivalents$2,193 $2,453 
Short-term restricted cash recorded within prepaid expenses and other— 74 
Restricted cash59 52 
Total cash, cash equivalents and restricted cash$2,252 $2,579 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to__________
Commission File Number: 000-49728
jblu-20210930_g1.jpg
JETBLUE AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware87-0617894
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
27-01 Queens Plaza North
Long Island City
New York
11101
(Address of principal executive offices)  (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 classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueJBLUThe NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No
As of September 30, 2021, there were 318,030,520 shares outstanding of the registrant’s common stock, par value $0.01.


JETBLUE AIRWAYS CORPORATION
FORM 10-Q
INDEX
Page


2

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)


September 30, 2021December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents$2,193 $1,918 
Investment securities1,100 1,135 
Receivables, net of allowance of $3 and $2, at September 30, 2021 and December 31, 2020, respectively.210 98 
Inventories, net of allowance of $23 and $27, at September 30, 2021 and December 31, 2020, respectively.64 71 
Prepaid expenses and other123 123 
Total current assets3,690 3,345 
PROPERTY AND EQUIPMENT 
Flight equipment11,031 10,256 
Predelivery deposits for flight equipment339 420 
Total flight equipment and predelivery deposits, gross11,370 10,676 
Less accumulated depreciation3,131 2,888 
Total flight equipment and predelivery deposits, net8,239 7,788 
Other property and equipment1,199 1,202 
Less accumulated depreciation644 591 
Total other property and equipment, net555 611 
Total property and equipment, net8,794 8,399 
OPERATING LEASE ASSETS750 804 
OTHER ASSETS 
Investment securities1 2 
Restricted cash59 51 
Intangible assets, net of accumulated amortization of $392 and $360, at September 30, 2021 and December 31, 2020, respectively.283 261 
Other492 544 
Total other assets835 858 
TOTAL ASSETS$14,069 $13,406 
See accompanying notes to condensed consolidated financial statements.
3

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)
September 30, 2021December 31, 2020
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable$575 $365 
Air traffic liability1,679 1,122 
Accrued salaries, wages and benefits465 409 
Other accrued liabilities348 215 
Current operating lease liabilities108 113 
Current maturities of long-term debt and finance lease obligations391 450 
Total current liabilities3,566 2,674 
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS3,760 4,413 
LONG-TERM OPERATING LEASE LIABILITIES712 752 
DEFERRED TAXES AND OTHER LIABILITIES  
Deferred income taxes882 922 
Air traffic liability - non-current618 616 
Other582 78 
Total deferred taxes and other liabilities2,082 1,616 
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS’ EQUITY  
Preferred stock, $0.01 par value; 25 shares authorized, none issued  
Common stock, $0.01 par value; 900 shares authorized, 476 and 474 shares issued and 318 and 316 shares outstanding at September 30, 2021 and December 31, 2020, respectively5 5 
Treasury stock, at cost; 158 and 158 shares at September 30, 2021 and December 31, 2020, respectively(1,989)(1,981)
Additional paid-in capital3,018 2,959 
Retained earnings2,915 2,968 
Accumulated other comprehensive income  
Total stockholders’ equity3,949 3,951 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$14,069 $13,406 


See accompanying notes to condensed consolidated financial statements.
4

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
OPERATING REVENUES
Passenger$1,856 $445 $3,913 $2,126 
Other116 47 290 169 
Total operating revenues1,972 492 4,203 2,295 
OPERATING EXPENSES
Aircraft fuel and related taxes443 102 973 496 
Salaries, wages and benefits620 482 1,718 1,560 
Landing fees and other rents182 84 470 258 
Depreciation and amortization140 127 398 407 
Aircraft rent25 23 76 60 
Sales and marketing60 24 130 84 
Maintenance, materials and repairs205 111 472 344 
Other operating expenses297 167 768 560 
Special items(186)(112)(841)(214)
Total operating expenses1,786 1,008 4,164 3,555 
OPERATING INCOME (LOSS)186 (516)39 (1,260)
OTHER INCOME (EXPENSE)
Interest expense(42)(56)(153)(121)
Capitalized interest3 3 9 10 
Gain on equity investments54  54  
Interest income and other expenses(11)(9)(49)(10)
Total other income (expense)4 (62)(139)(121)
INCOME (LOSS) BEFORE INCOME TAXES190 (578)(100)(1,381)
Income tax expense (benefit)60 (185)(47)(400)
NET INCOME (LOSS)$130 $(393)$(53)$(981)
EARNINGS (LOSS) PER COMMON SHARE:
Basic$0.41 $(1.44)$(0.17)$(3.58)
Diluted$0.40 $(1.44)$(0.17)$(3.58)


See accompanying notes to condensed consolidated financial statements.
5

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in millions)
Three Months Ended September 30,
20212020
NET INCOME (LOSS)$130 $(393)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $(1) in 2021 and 2020, respectively 1 
Total other comprehensive income 1 
COMPREHENSIVE INCOME (LOSS)$130 $(392)

Nine Months Ended September 30,
20212020
NET LOSS$(53)$(981)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $1 in 2021 and 2020, respectively (4)
Total other comprehensive income (loss) (4)
COMPREHENSIVE LOSS$(53)$(985)
See accompanying notes to condensed consolidated financial statements.
6

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Nine Months Ended September 30,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(53)$(981)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes(40)(351)
Impairment of long-lived assets 258 
Depreciation365 374 
Amortization33 33 
Stock-based compensation23 20 
Changes in certain operating assets and liabilities1,438 242 
Deferred federal payroll support program grants 49 
Losses on sale-leaseback transactions 106 
Other, net(11)27 
Net cash provided by (used in) operating activities1,755 (223)
CASH FLOWS FROM INVESTING ACTIVITIES 
Capital expenditures(770)(529)
Predelivery deposits for flight equipment(33)(67)
Proceeds from the maturities of held-to-maturity investments 21 
Purchase of available-for-sale securities(520)(1,162)
Proceeds from the sale of available-for-sale securities590 944 
Proceeds from sale-leaseback transactions 209 
Other, net(2)(1)
Net cash used in investing activities(735)(585)
CASH FLOWS FROM FINANCING ACTIVITIES 
Proceeds from issuance of long-term debt1,010 2,541 
Proceeds from short-term borrowings 981 
Proceeds from sale-leaseback transactions 236 
Proceeds from issuance of common stock22 22 
Proceeds from issuance of stock warrants14 28 
Repayment of long-term debt and finance lease obligations(1,775)(272)
Repayment of short-term borrowings (1,000)
Acquisition of treasury stock(7)(167)
Other, net(1) 
Net cash (used in) provided by financing activities(737)2,369 
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH283 1,561 
Cash, cash equivalents and restricted cash at beginning of period1,969 1,018 
Cash, cash equivalents and restricted cash at end of period(1)
$2,252 $2,579 
See accompanying notes to condensed consolidated financial statements.
7

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Nine Months Ended September 30,
20212020
SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest (net of amount capitalized)
$121 $37 
Cash payments for income taxes (net of refunds)
  
NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for operating lease liabilities$ $144 
Lease modifications and lease conversions$40 $ 
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
September 30, 2021September 30, 2020
Cash and cash equivalents$2,193 $2,453 
Short-term restricted cash recorded within prepaid expenses and other 74 
Restricted cash59 52 
Total cash, cash equivalents and restricted cash$2,252 $2,579 
See accompanying notes to condensed consolidated financial statements.
8

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited, in millions)

Common
Shares
Common
Stock
Treasury
Shares
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive IncomeTotal
Balance at June 30, 2021476 $5 158 $(1,989)$3,012 $2,785 $ $3,813 
Net income— — — — — 130 — 130 
Stock compensation expense— — — — 6 — — 6 
Balance at September 30, 2021476 $5 158 $(1,989)$3,018 $2,915 $ $3,949 
Common
Shares
Common
Stock
Treasury
Shares
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTotal
Balance at June 30, 2020430 $4 158 $(1,981)$2,340 $3,734 $(3)$4,094 
Net (loss)— — — — — (393)— (393)
Other comprehensive income— — — — — — 1 1 
Vesting of restricted stock units1 — — — — — —  
Stock compensation expense— — — — 5 — — 5 
CARES Act warrant issuance— — — — 10 — — 10 
Balance at September 30, 2020431 $4 158 $(1,981)$2,355 $3,341 $(2)$3,717 
Common
Shares
Common
Stock
Treasury
Shares
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive IncomeTotal
Balance at December 31, 2020474 $5 158 $(1,981)$2,959 $2,968 $ $3,951 
Net (loss)— — — — — (53)— (53)
Vesting of restricted stock units1 — — (8)— — — (8)
Stock compensation expense— — — — 23 — — 23 
Stock issued under Crewmember Stock Purchase Plan1 — — — 22 — — 22 
Warrants issued under federal support programs— — — — 14 — — 14 
Balance at September 30, 2021476 $5 158 $(1,989)$3,018 $2,915 $ $3,949 
Common
Shares
Common
Stock
Treasury
Shares
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated Other Comprehensive Income (Loss)Total
Balance at December 31, 2019427 $4 145 $(1,782)$2,253 $4,322 $2 $4,799 
Net (loss)— — — — — (981)— (981)
Other comprehensive loss— — — — — — (4)(4)
Vesting of restricted stock units2 — — (7)— — — (7)
Stock compensation expense— — — — 20 — — 20 
Stock issued under Crewmember Stock Purchase Plan2 — — — 22 — — 22 
Shares repurchased— — 13 (192)32 — — (160)
CARES Act warrant issuance— — — — 28 — — 28 
Balance at September 30, 2020431 $4 158 $(1,981)$2,355 $3,341 $(2)$3,717 
See accompanying notes to condensed consolidated financial statements.
9

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Note 1—Summary of Significant Accounting Policies
Basis of Presentation
JetBlue Airways Corporation, or JetBlue, provides air transportation services across the United States, the Caribbean and Latin America, and between New York and London. Our condensed consolidated financial statements include the accounts of JetBlue and our subsidiaries which are collectively referred to as “we” or the “Company”. All majority-owned subsidiaries are consolidated on a line by line basis, with all intercompany transactions and balances being eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with our 2020 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, or our 2020 Form 10-K.
These condensed consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the U.S. Securities and Exchange Commission, or the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading.
Due to the impacts from the coronavirus ("COVID-19") pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, and other factors, our operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year.
Investment Securities
Investment securities consist of available-for-sale investment securities and held-to-maturity investment securities. When sold, we use a specific identification method to determine the cost of the securities.
Available-for-sale investment securities. Our available-for-sale investment securities include investments such as time deposits, equity securities of publicly traded companies, and convertible debt securities. Our investments in equity securities of publicly traded companies are classified as Level 1 in the fair value hierarchy as their fair values are based on unadjusted quoted prices in active markets for identical assets. The fair values of our time deposits and convertible debt securities are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the fair value hierarchy. We did not record any material gains or losses on these securities during the three and nine months ended September 30, 2021 or 2020. Refer to Note 8 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.
Held-to-maturity investment securities. We did not have any held-to-maturity investments as of September 30, 2021 and December 31, 2020. We did not record any gains or losses on these securities during the three and nine months ended September 30, 2021 or 2020.
The aggregate carrying values of our short-term and long-term investment securities consisted of the following at September 30, 2021 and December 31, 2020 (in millions):
September 30, 2021December 31, 2020
Available-for-sale securities
Time deposits$1,060 $1,130 
Equity securities36  
Debt securities5 7 
Total available-for-sale securities1,101 1,137 
Total investment securities$1,101 $1,137 
Other Investments
Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC, or JTV, has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Accounting Standards Update ("ASU") 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for

10

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

identifiable or similar investments of the same issuer. The carrying amount of these investments, which is included within other assets on our consolidated balance sheet, was $67 million and $40 million as of September 30, 2021 and December 31, 2020, respectively. We recognized a gain of $37 million on these investments during the three and nine months ended September 30, 2021. The gain was triggered by an observable transaction for a similar security issued by a company within the JTV investment portfolio which indicated a change in overall valuation. We estimated the fair value of our investment in the company using third party valuations and considered specific circumstances such as our expectation of a potential exit from the company, prices from previous issuances of equity securities, the rights and obligations of holders of similar securities within the company, and estimates of volatility. Due to the use of significant unobservable inputs, our investment is classified as Level 3 in the fair value hierarchy. In August 2021, we recognized a one-time gain of $17 million in connection with the initial public offering of a company within the JTV investment portfolio. The carrying value of this investment, which is included within short-term investment securities on our consolidated balance sheet, was $36 million as of September 30, 2021.
We have an approximate 10% ownership interest in the TWA Flight Center Hotel at John F. Kennedy International Airport and it is also accounted for under the measurement alternative. The carrying amount of this investment was $14 million as of September 30, 2021 and December 31, 2020.
Equity Method Investments
Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification"). The carrying amount of our equity method investments was $33 million and $34 million as of September 30, 2021 and December 31, 2020, respectively, and is included within other assets on our consolidated balance sheets.
Recently Adopted Accounting Standards
New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update eliminates, clarifies, and modifies certain guidance related to the accounting for income taxes. We adopted the requirements of ASU 2019-12 as of January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on our condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and it is effective for interim and annual reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020. We adopted the requirements of ASU 2020-06 as of January 1, 2021. The adoption did not have an impact on our condensed consolidated financial statements as we did not have any convertible instruments outstanding as of December 31, 2020. As discussed in Note 3 to our condensed consolidated financial statements, in March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. We evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, we concluded that separate accounting for the conversion feature of this note offering is not required. The carrying value of this convertible note was included within long-term debt and finance lease obligations on our consolidated balance sheet as of September 30, 2021.

11

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 2— Revenue Recognition
The Company categorizes the revenues received from contracts with its customers by revenue source as we believe it best depicts the nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenues recognized by revenue source for the three and nine months ended September 30, 2021 and 2020 (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Passenger revenue
Passenger travel$1,773 $420 $3,717 $1,973 
Loyalty revenue - air transportation83 25 196 153 
Other revenue
Loyalty revenue80 38 206 127 
Other revenue36 9 84 42 
Total revenue$1,972 $492 $4,203 $2,295 
TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred.
In June 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with Barclaycard® (the "Co-Brand Agreement"). The Co-Brand Agreement, which amends and restates the existing Barclaycard® Co-Brand Agreement, extends the term to 2031 and modifies certain other terms. The terms of the Co-Brand Agreement are effective as of January 1, 2021. The performance obligations such as air transportation; use of the JetBlue brand name, and access to our frequent flyer customer lists; advertising; and other airline benefits are consistent with the previous agreement. We continue to use the accounting method that allocates the consideration received based on the relative selling prices of those performance obligations. The increase in loyalty program revenues are primarily related to brand and non-air transportation elements. In addition, in July 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with MasterCard® to continue our partnership as network provider under the Co-Brand Agreement.
Contract Liabilities
Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):
September 30, 2021December 31, 2020
Air traffic liability - passenger travel$1,416 $964 
Air traffic liability - loyalty program and deferred revenue1,473 825 
Total$2,889 $1,789 
During the nine months ended September 30, 2021 and 2020, we recognized passenger revenue of $468 million and $697 million respectively, that was included in passenger travel liability at the beginning of the respective periods.
The Company elected the practical expedient that allows entities to not disclose the amount of the remaining transaction price and its expected timing of recognition for passenger tickets if the contract has an original expected duration of one year or less or if certain other conditions are met. We elected to apply this practical expedient to our contract liabilities relating to passenger travel and ancillary services as our tickets or any related passenger credits generally expire one year from the date of issuance.
TrueBlue® points are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of the points that were part of the air traffic liability balance at the beginning of the period as well as points that were issued during the period.

12

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the nine months ended September 30, 2021 and 2020 (in millions):
Balance at December 31, 2020$733 
TrueBlue® points redeemed
(196)
TrueBlue® points earned and sold
308 
Balance at September 30, 2021$845 
Balance at December 31, 2019$661 
TrueBlue® points redeemed
(153)
TrueBlue® points earned and sold
195 
Balance at September 30, 2020$703 
The timing of our TrueBlue® point redemptions can vary; however, the majority of our points are redeemed within approximately three years of the date of issuance.


13

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations
During the nine months ended September 30, 2021, we made payments of $1.8 billion on our outstanding debt and finance lease obligations and issued $1.0 billion of additional debt.
We had pledged aircraft, engines, other equipment, and facilities with a net book value of $5.9 billion at September 30, 2021 as security under various financing arrangements.
At September 30, 2021, scheduled maturities of our long-term debt and finance lease obligations were $130 million for the remainder of 2021, $355 million in 2022, $564 million in 2023, $332 million in 2024, $192 million in 2025, and $2.6 billion thereafter.
The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at September 30, 2021 and December 31, 2020 were as follows (in millions):
September 30, 2021December 31, 2020
Carrying Value
Estimated
Fair Value(2)
Carrying Value
Estimated
Fair Value(2)
Public Debt
Fixed rate special facility bonds, due through 2036$42 $46 $42 $45 
Fixed rate enhanced equipment notes:
  2019-1 Series AA, due through 2032547 464 560 440 
  2019-1 Series A, due through 2028170 157 174 152 
2019-1 Series B, due through 2027101 132 107 139 
2020-1 Series A, due through 2032607 675 627 658 
2020-1 Series B, due through 2028161 215 170 223 
Non-Public Debt
Fixed rate enhanced equipment notes, due through 202388 89 114 116 
Fixed rate equipment notes, due through 2028675 680 891 1,017 
Floating rate equipment notes, due through 2028115 111 152 144 
Floating rate term loan credit facility, due through 2024  702 759 
Unsecured CARES Act Payroll Support Program loan, due through 2030259 224 259 207 
Secured CARES Act Loan, due through 2025  104 104 
Citibank line of credit, due through 2023  546 533 
2020 sale-leaseback transactions, due through 2024348 382 352 393 
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031144 124   
0.50% convertible senior notes due 2026735 680   
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031
132 114   
Total(1)
$4,124 $4,093 $4,800 $4,930 
(1) Total excludes finance lease obligations of $27 million and $63 million at September 30, 2021 and December 31, 2020, respectively.
(2) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair values of our enhanced equipment notes and our special facility bonds were based on quoted market prices in markets with low trading volumes. The fair value of our non-public debt was estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. The fair values of our other financial instruments approximate their carrying values. Refer to Note 8 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

14

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

We have financed certain aircraft with Enhanced Equipment Trust Certificates, or EETCs. One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity, or VIE, as defined in the Consolidations topic of the Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.
0.50% Convertible Senior Notes due 2026
In March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. The notes are general senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were approximately $734 million.
Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends and certain issuer tender or exchange offers.
Upon conversion, the notes will be settled in cash up to the aggregate principal amount of the notes to be converted and, at our election, in shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.
We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.
As discussed in Note 1 to our condensed consolidated financial statements, we early adopted the provisions of ASU 2020-06. Accordingly, we evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.
Interest expense of $2 million and $4 million were recognized for the three and nine months ended September 30, 2021, respectively. Included within interest expense were $1 million and $2 million of debt issuance costs amortization for the three and nine months ended September 30, 2021, respectively.
Floating Rate Term Loan Credit Facility
On June 17, 2020, we entered into a $750 million term loan credit facility with Barclays Bank PLC, as administrative agent (the "Term Loan"). The loans thereunder bore interest at a variable rate equal to LIBOR (subject to a 1.00% floor), or at our election, another rate, in each case, plus a specified margin. Our obligations were secured on a senior basis by airport takeoff and landing slots at LaGuardia Airport, John F. Kennedy International Airport, and Reagan National Airport and the right to use certain intellectual property assets comprising the JetBlue brand.

15

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

On June 17, 2021, the Company voluntarily repaid a portion of its outstanding borrowings under the Term Loan. On June 30, 2021, the Company repaid the full remaining amount of outstanding borrowings under the Term Loan, which, together with its repayment of June 17, 2021, totaled approximately $722 million, plus accrued interest and associated fees. As of June 30, 2021, all obligations under the Term Loan, including all pledges of collateral were terminated in full. As of September 30, 2021, we did not have a balance outstanding under the Term Loan.
Federal Payroll Support Programs
As a result of the adverse economic impact of COVID-19, we have received assistance under various payroll support programs provided by the federal government.
CARES Act – Payroll Support Program
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Under the CARES Act, assistance was made available to the aviation industry in the form of direct payroll support (the "Payroll Support Program") and secured loans (the "Loan Program").
On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act with the United States Department of the Treasury ("Treasury") governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with a total of approximately $963 million (the "Payroll Support Payments") consisting of $704 million in grants and $259 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable Secured Overnight Financing Rate ("SOFR") plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share.
Consolidated Appropriations Act – Payroll Support Program 2
On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with Treasury governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2"). Treasury provided us with a total of approximately $580 million (the "Payroll Support 2 Payments") under the program, consisting of $436 million in grants and $144 million in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until January 15, 2026, and the applicable SOFR plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.
American Rescue Plan Act – Payroll Support Program 3
On May 6, 2021, we entered into a Payroll Support 3 Agreement (the "PSP3 Agreement") with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the "Payroll Support Program 3"). Treasury provided us with a total of approximately $541 million (the "Payroll Support 3 Payments") under the program, consisting of $409 million in grants and $132 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million shares of our common stock to Treasury at an exercise price of $19.90 per share.
The warrants associated with each of the payroll support programs described above will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.
The carrying values relating to the payroll support grants were recorded within other accrued liabilities and were recognized as a contra-expense within special items on our consolidated statements of operations as the funds were utilized. The relative fair value of the warrants were recorded within additional paid-in capital and reduced the total carrying value of the grants. Proceeds from the payroll support grants and from the issuance of payroll support warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. Our funding from all payroll support grants were fully utilized as of September 30, 2021.

16

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The carrying values relating to the unsecured payroll support loans were recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our condensed consolidated statement of cash flows.
CARES Act – Secured Loan Program
Under the CARES Act Loan Program, JetBlue had the ability to borrow up to a total of approximately $1.9 billion from Treasury. We entered into a loan and guarantee agreement (the "Loan Agreement") with Treasury and made an initial drawing of $115 million under the CARES Act Loan Program on September 29, 2020. In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.
On September 15, 2021, the Company repaid the full amount of outstanding borrowings under the Loan Agreement, which, together with accrued interest and fees, totaled approximately $118 million. As of September 30, 2021, we did not have a balance outstanding and all obligations under the Loan Agreement, including all pledges of collateral, were terminated in full.
Fixed Rate Enhanced Equipment Notes
2020-1A and B Equipment Notes
In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $808 million secured by 24 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series A, bearing interest at the rate of 4.00% per annum in the aggregate principal amount equal to $636 million, and (ii) Series B, bearing interest at the rate of 7.75% per annum in the aggregate principal amount equal to $172 million. Principal and interest are payable semi-annually in arrears.
2019-1B Equipment Notes
In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $115 million bearing interest at a rate of 8.00% per annum. These equipment notes are secured by 25 Airbus A321 aircraft, which were included in the collateral pool of our 2019-1 Series AA and Series A offerings completed in November 2019. Principal and interest are payable semi-annually in arrears.
2020 Sale-Leaseback Transactions
In 2020, we executed $563 million of aircraft sale-leaseback transactions. Of these transactions, $354 million did not qualify as sales for accounting purposes. The assets associated with these transactions remain on our consolidated balance sheets within property and equipment and the related liabilities under the lease are classified within debt and finance leases obligations. These transactions are treated as cash from financing activities on our consolidated statements of cash flows. The remaining $209 million of sale-leaseback transactions qualified as sales and generated a loss of $106 million. The assets associated with these transactions which qualified as sales are recorded within operating lease assets. The liabilities are recorded within current operating lease liabilities and long-term operating lease liabilities on our consolidated balance sheets. These transactions are treated as cash from investing activities on our consolidated statements of cash flows.
We did not execute any sale-leaseback transactions during the nine months ended September 30, 2021.
Citibank Revolving Credit Agreement
We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent, for up to $550 million (the "Revolving Facility"). The term of the Revolving Facility runs through August 2023. Borrowings under the Revolving Facility bear interest at a variable rate equal to LIBOR, plus a margin. The Revolving Facility is secured by aircraft, simulators, and certain other assets as permitted thereunder. The Revolving Facility includes covenants that require us to maintain certain minimum balances in unrestricted cash, cash equivalents, and unused commitments available under revolving credit facilities. In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets.
We borrowed the full amount of $550 million under this revolving credit facility on April 22, 2020.

17

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JETBLUE AIRWAYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

We repaid the full balance of this facility in the first quarter of 2021. As of and for the quarter ended September 30, 2021, we did not have a balance outstanding or any borrowings under the Revolving Facility.
Short-term Borrowings
Morgan Stanley Line of Credit
We have a revolving line of credit with Morgan Stanley for up to approximately $200 million. This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the amount available to us under this line of credit may vary accordingly. This line of credit bears interest at a floating rate based upon LIBOR, plus a margin. As of and for the periods ended September 30, 2021 and December 31, 2020, we did not have a balance outstanding or any borrowings under this line of credit.
Note 4—Earnings (Loss) Per Share
Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the Company's Crewmember Stock Purchase Plan, convertible notes, warrants issued under various federal payroll support programs, and any other potentially dilutive instruments using the treasury stock and if-converted methods. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 1.9 million for the three months ended September 30, 2020. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 3.5 million and 1.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.
The following table shows how we computed basic and diluted earnings per common share for the three and nine months ended September 30, 2021 and 2020 (dollars and share data in millions):
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net income (loss)$130 $(393)$(53)$(981)
Weighted average basic shares318.0 272.4 317.3 274.3 
Effect of dilutive securities3.3    
Weighted average diluted shares321.3 272.4 317.3 274.3 
Earnings (loss) per common share:
Basic$0.41 $(1.44)$(0.17)$(3.58)
Diluted$0.40 $(1.44)$(0.17)$(3.58)