þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
87-0617894
(I.R.S. Employer Identification No.) |
|
118-29 Queens Boulevard, Forest Hills, New York
(Address of principal executive offices) |
11375
(Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 30,
December 31,
2011
2010
(unaudited)
$
632
$
465
578
495
99
84
3
303
313
1,612
1,360
4,615
4,320
168
178
4,783
4,498
788
679
3,995
3,819
510
491
200
178
310
313
559
558
65
49
494
509
4,799
4,641
29
133
64
65
407
394
500
592
$
6,911
$
6,593
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 30,
December 31,
2011
2010
(unaudited)
$
116
$
104
677
514
142
147
168
137
193
183
1,296
1,085
2,864
2,850
527
533
368
327
149
144
517
471
3
3
(8
)
(4
)
1,464
1,446
282
219
(34
)
(10
)
1,707
1,654
$
6,911
$
6,593
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CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2011
2010
2011
2010
$
1,087
$
932
$
3,039
$
2,569
108
98
319
272
1,195
1,030
3,358
2,841
454
292
1,246
825
236
227
706
664
65
61
185
173
57
54
171
165
32
31
102
93
49
47
145
130
59
44
165
124
135
134
399
389
1,087
890
3,119
2,563
108
140
239
278
(45
)
(45
)
(133
)
(135
)
1
1
3
3
(8
)
1
(4
)
2
(52
)
(43
)
(134
)
(130
)
56
97
105
148
21
38
42
59
$
35
$
59
$
63
$
89
$
0.12
$
0.21
$
0.23
$
0.32
$
0.11
$
0.18
$
0.21
$
0.28
Table of Contents
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Nine months ended
September 30,
2011
2010
$
63
$
89
42
59
156
145
25
28
10
13
(1
)
(11
)
157
140
48
27
500
490
(312
)
(198
)
(43
)
(35
)
(3
)
(11
)
85
(384
)
(927
)
263
966
(300
)
(779
)
432
238
2
2
(345
)
(659
)
5
5
190
93
20
3
12
(173
)
(279
)
(76
)
(13
)
(4
)
12
(229
)
167
(398
)
465
896
$
632
$
498
Table of Contents
September 30,
December 31,
2011
2010
$
10
$
10
55
19
210
125
275
154
297
418
16
35
40
332
474
$
607
$
628
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September 30, 2011
December 31, 2010
Carrying Value
Estimated Fair Value
Carrying Value
Estimated Fair Value
$
215
$
195
$
234
$
210
373
339
373
312
49
47
49
46
83
74
84
75
169
196
201
293
123
139
123
194
735
702
696
654
1,187
1,282
1,144
1,132
$
2,934
$
2,974
$
2,904
$
2,916
Table of Contents
Three Months Ended
September 30,
2011
2010
$
35
$
59
(21
)
4
(21
)
4
$
14
$
63
Nine Months Ended
September 30,
2011
2010
$
63
$
89
(24
)
(20
)
(24
)
(20
)
$
39
$
69
Aircraft Fuel
Derivatives
Interest Rate Swaps
Total
$
1
$
(14
)
(13
)
4
2
6
(25
)
(2
)
(27
)
$
(20
)
$
(14
)
$
(34
)
Aircraft Fuel
Derivatives
Interest Rate Swaps
Total
$
4
$
(14
)
$
(10
)
5
5
(24
)
(5
)
(29
)
$
(20
)
$
(14
)
$
(34
)
Table of Contents
Three Months Ended
Nine Months Ended
September 30,
September 30,
2011
2010
2011
2010
$
35
$
59
$
63
$
89
3
2
9
8
$
38
$
61
$
72
$
97
279,099
275,731
278,280
275,011
1,368
2,598
1,745
2,536
65,786
68,605
67,655
68,605
346,253
346,934
347,680
346,152
21.4
22.4
22.5
24.6
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Table of Contents
Crude oil cap
Jet fuel swap
agreements
Crude oil collars
Heating oil collars
Jet Fuel collars
agreements
Total
7
%
9
%
10
%
2
%
12
%
40
%
2
%
5
%
7
%
2
%
7
%
23
%
2
%
4
%
7
%
2
%
7
%
22
%
4
%
6
%
2
%
6
%
18
%
4
%
7
%
7
%
18
%
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As of
September 30,
December 31,
2011
2010
$
1
$
19
4
26
6
15
24
4,155
4,290
(26
)
3
23
23
(10
)
(10
)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2011
2010
2011
2010
$
(4
)
$
(6
)
$
3
$
(6
)
(3
)
(3
)
(2
)
(1
)
(1
)
(1
)
(41
)
13
(38
)
(15
)
48
%
49
%
43
%
53
%
(3
)
(6
)
(8
)
(18
)
(3
)
(2
)
(8
)
(6
)
(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
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, such as discounted cash flow models or valuations.
Table of Contents
As of September 30, 2011
Level 1
Level 2
Level 3
Total
$
544
$
$
$
544
5
5
220
55
275
1
1
$
769
$
56
$
$
825
$
$
32
$
$
32
23
23
$
$
32
$
23
$
55
As of December 31, 2010
Level 1
Level 2
Level 3
Total
$
399
$
$
$
399
59
59
135
19
154
23
23
$
593
$
42
$
$
635
$
$
$
23
$
23
$
$
$
23
$
23
Table of Contents
Interest Rate
Swaps
$
(23
)
(3
)
3
$
(23
)
$
(23
)
(8
)
8
$
(23
)
Auction Rate
Put Option
related
Interest Rate
Securities
to ARS
Swaps
Total
$
42
$
7
$
(22
)
$
27
7
(7
)
(8
)
(8
)
(49
)
2
(47
)
$
$
$
(28
)
$
(28
)
$
74
$
11
$
(10
)
$
75
11
(11
)
(24
)
(24
)
(85
)
6
(79
)
$
$
$
(28
)
$
(28
)
Table of Contents
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Three Months Ended
September 30,
Percent
2011
2010
Change
(in cents)
4.60
3.21
43.4
%
2.39
2.49
(4.2)
%
.66
.67
(1.4)
%
.57
.60
(4.2)
%
.33
.35
(3.3)
%
.50
.51
(2.5)
%
.60
.48
24.5
%
1.38
1.47
(6.6)
%
11.03
9.78
12.8
%
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Table of Contents
Nine Months Ended
September 30,
Percent
2011
2010
Change
(in cents)
4.48
3.15
42.3
%
2.54
2.53
0.2
%
.67
.66
1.0
%
.61
.63
(2.7)
%
.37
.36
3.6
%
.52
.50
5.6
%
.59
.47
25.4
%
1.44
1.48
(3.2)
%
11.22
9.78
14.7
%
Table of Contents
Table of Contents
Three Months Ended
Nine Months Ended
September 30,
Percent
September 30,
Percent
2011
2010
Change
2011
2010
Change
7,016
6,573
6.7
19,677
18,215
8.0
8,332
7,699
8.2
22,948
21,295
7.8
9,855
9,102
8.3
27,807
26,214
6.1
84.5
%
84.6
%
(0.1)
pts.
82.5
%
81.2
%
1.3 pts.
12.0
12.0
0.2
11.7
11.9
(1.1
)
$
154.88
$
141.79
9.2
$
154.44
$
141.03
9.5
13.04
12.10
7.7
13.24
12.06
9.8
11.03
10.24
7.7
10.93
9.80
11.5
12.12
11.32
7.1
12.08
10.84
11.4
11.03
9.78
12.8
11.22
9.78
14.7
6.43
6.57
(2.2
)
6.74
6.63
1.6
10.88
9.53
14.2
11.04
9.56
15.5
63,099
58,935
7.1
181,437
169,504
7.0
1,108
1,103
0.5
1,092
1,102
(0.9
)
165.8
153.4
8.1
163.9
151.8
8.0
$
3.25
$
2.26
43.5
$
3.18
$
2.25
41.0
139
130
8.3
392
367
7.1
11,443
10,669
7.3
(1)
Excludes operating expenses and employees of LiveTV, LLC, which are unrelated to our airline operations.
Table of Contents
Table of Contents
Payments due in
Total
2011
2012
2013
2014
2015
Thereafter
$
3,820
$
92
$
323
$
512
$
683
$
344
$
1,866
1,629
54
203
176
171
172
853
7,045
65
410
450
580
770
4,770
3,083
74
291
269
217
238
1,994
$
15,577
$
285
$
1,227
$
1,407
$
1,651
$
1,524
$
9,483
(1)
Includes actual interest and estimated interest for floating-rate debt based on September 30, 2011 rates.
(2)
Amounts include noncancelable commitments for the purchase of goods and services.
Table of Contents
Firm
Option
Airbus
Airbus
Airbus
EMBRAER
EMBRAER
Year
A320
A321
A320 neo
190
Total
190
1
1
2
7
4
11
3
4
2
9
6
9
2
11
10
10
7
17
10
3
7
8
18
10
8
5
13
10
10
7
*
17
10
10
10
10
10
10
10
22
30
40
36
128
56
*
Subject to payment of a termination fee, JetBlue may cancel prior to July 31, 2012 seven
EMBRAER 190 aircraft scheduled for delivery in 2018.
Table of Contents
Table of Contents
Table of Contents
32
33
Table of Contents
Table of Contents
34
JETBLUE AIRWAYS CORPORATION
(Registrant)
Date: November 2, 2011
By:
/s/ DONALD DANIELS
Vice President, Controller and Chief
Accounting Officer
(Principal Accounting Officer)
Table of Contents
35
Exhibit
Number
Exhibit
Side letter No. 30 to V2500 General Terms of Sale between IAE International Aero
Engines and New Air Corporation, dated August 17, 2011.
Side letter No. 31 to V2500 General Terms of Sale between IAE International Aero
Engines and New Air Corporation, dated September 27, 2011.
Side letter agreement, dated September 30, 2011, to Memorandum of Understanding,
dated June 17, 2011, between Airbus S.A.S and JetBlue Airways Corporation.
Computation of Ratio of Earnings to Fixed Charges.
13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
Certification Pursuant to Section 1350, furnished herewith.
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
*
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.
**
Portions of this exhibit have been omitted pursuant to a Confidential Treatment Request under
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Subject: | Side Letter No. 30 to the V2500 General Terms of Sale Agreement between JetBlue Airways Corporation and IAE International Aero Engines AG dated May 4, 1999. |
1. | Revision to Exhibit B-2 |
1.1. | The Parties hereby agree that Exhibit B-2 to the Agreement, Purchased Items, Price, Escalation Formula and Delivery , is hereby deleted in its entirety and replaced by the revised delivery schedule attached as Appendix 1 hereto which captures the amendments as set forth in Clause 2 below. |
2. | Spare Engine Thrust Upgrades |
2.1. | The models for Spare Engines with rank numbers 24, 25, 26, 27 and 28 are hereby upgraded from V2527-A5 to V2533-A5 (the V2533-A5 Spare Engines ). | ||
2.2. | Future pre-delivery payment amounts, if any, for the Spare Engines detailed in Clauses 2.1, 2.2, 2.3 and 2.4 above shall be calculated based on the upgraded Engine models as listed in Exhibit B-2. |
3. | Multi-Rated Data Plates for V2533-A5 Spare Engines |
3.1. | To support JetBlues request to operate the V2533-A5 Spare Engines on Firm Aircraft powered by V2527-A5 Engines, IAE will provide to JetBlue a multi-rated Engine data |
Page 1 of 5
plate (IAE P/N: 5A1942), [***], for each and every V2533-A5 Spare Engine. Each such data plate will be provided by IAE to JetBlue within [***] of JetBlue taking delivery of the corresponding V2533-A5 Spare Engine from IAE. JetBlue further agrees to immediately surrender the single-rated Engine data plate removed from each V2533-A5 Spare Engine to IAE following installation of the corresponding multi-rated Engine data plate. |
4. | Miscellaneous |
3.1 | This Side Letter No. 30 is not, and shall not be construed as, a waiver of either Partys rights or remedies. | ||
3.2 | This Side Letter No. 30 contains matters of a confidential and proprietary nature and is delivered on the express condition that its terms shall not be disclosed to any third party or reproduced in whole or in part for anyone other than the parties hereto without the other partys prior written consent, unless otherwise stated herein. | ||
3.3 | This Side Letter No. 30 constitutes a valid, legal, binding obligation. This Side Letter No. 30 shall be construed and interpreted in accordance with the laws of the State of Connecticut, United States of America with the exception of its conflict of law provisions. | ||
3.4 | This Side Letter No. 30 may be executed in one or more counterparts, each of which when so executed and delivered shall be an original but shall constitute one and the same instrument. |
Agreed to and accepted on behalf of
|
Agreed to and accepted on behalf of | |||
IAE International Aero Engines AG
|
JetBlue Airways Corporation | |||
|
||||
/s/ Debarshi Mandal
|
/s/ Mark D. Powers | |||
|
||||
By
|
By | |||
|
||||
Debarshi Mandal
|
Mark D. Powers | |||
|
||||
Name
|
Name | |||
|
||||
Commercial Manager
|
SVP Treasurer | |||
|
||||
Title
|
Title |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 2 of 5
| Delivered Spare Engines are indicated by Italics typeface | ||
| Applicable escalation formulae are in accordance with Side Letters 13 and 27 to the Agreement |
Basic Contract Price | Applicable | |||||||||||
Rank No. | Purchased Item | U.S Dollars | Base Month | Qty | Escalation | Delivery Date | ||||||
No. 1 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -99 | ||||||
No. 2 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -00 | ||||||
No. 3 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -01 | ||||||
No. 4 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -02 | ||||||
No. 5 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -02 | ||||||
No. 6 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -03 | ||||||
No. 7 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -04 | ||||||
No. 8 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -05 | ||||||
No. 9 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -05 | ||||||
No. 10 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***] -06 | ||||||
No. 11 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -06 | ||||||
No. 12 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***] -07 | ||||||
No. 13 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -07 | ||||||
No. 14 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -07 | ||||||
No. 15 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***] -07 | ||||||
No. 16 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -07 | ||||||
No. 17 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -08 | ||||||
No. 18 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -08 | ||||||
No. 19 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -09 | ||||||
No. 20 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -10 | ||||||
No. 21 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***] -10 | ||||||
No. 22 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***] -10 | ||||||
No. 23 | V2527-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-I | [***]-11 | ||||||
No. 24 | V2533-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***]-11 | ||||||
No. 25 | V2533-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***]-11 | ||||||
No. 26 | V2533-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***]-11 | ||||||
No. 27 | V2533-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***]-12 | ||||||
No. 28 | V2533-A5 Spare Engine | [***] | Jan-03 | 1 | Formula-II | [***]-12 | ||||||
TOTAL | 28 |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 3 of 5
1. | Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula: |
Where: | ||
P = the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar | ||
Pb = unit base price or other sum. | ||
Lo = the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the Labor for the month preceding the base month by four months. | ||
L = the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the month preceding the month of delivery or other date of determination by four months. | ||
Mo = the Producer Price Index, Code 10, for Metals and Metal Products published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months. | ||
M = the Producer Price Index, Code 10, for Metals and Metal Products for the month preceding the base month by four months. | ||
Eo = the Producer Price Index, Code 5, for Fuel and Related Products and Power published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months. | ||
E = the Producer Price Index, Code 5, for Fuel and Related Products and Power for the month preceding the base month by four months. |
Respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number. | ||
If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics. | ||
The Basic Contract Prices contained in this Exhibit B are subject to escalation from a Base Month of January 2003 to the month of delivery using using Lo, Mo and Eo values for September 2002. | ||
If the application of the formula contained in this Exhibit B results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies. |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 4 of 5
1. | Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula: |
Pi
|
= | (Pb+F) x CPI where: | ||
|
||||
Pi
|
= | the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar. | ||
|
||||
Pb
|
= | unit base price or other sum. | ||
|
||||
F
|
= | [***] (N)(Pb) | ||
|
||||
N
|
= | the calendar year of scheduled delivery or other date of determination minus 2003 | ||
|
||||
CPI
|
= | [***] (L) + [***] (M) | ||
|
||||
L
|
= | Labor Ratio defined below | ||
|
||||
M
|
= | Material Ratio defined below |
IAEs Composite Price Index (CPI) is the sum of [***] percent of the Labor ratio and [***] percent of the Material Ratio, with the sum rounded to the nearest ten thousandth. | ||
The quarterly value published for the Employment Cost Index will be deemed to apply to each month of the quarter. | ||
The Labor Ratio is the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value of North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. To be clear the quarterly value of CIU2023211000000I will apply to each month of a given quarter. | ||
The Material Ratio is the Producer Price Index, Industrial Commodities, WPU03thru15, as published monthly by the Bureau of Labor Statistics, U.S. Department of Labor, for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value for Industrial Commodities for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. | ||
For a given month, the escalation shall be computed by using the applicable Index value, which the Bureau has published as the time of delivery or other date of determination. | ||
2. | If the U.S. Department of Labor changes the base year for determination of the Index values as defined above, such re-based values will be incorporated in the escalation calculation. | |
3. | If the U.S. Department of Labor revises the methodology used for the determination of the values to be used to determine the CPI or, for any reason, has not released values needed to determine the CPI, IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period. | |
4. | The invoiced purchase price, which in no event shall be less than the unit base price, shall be the final price. If the calculated sum of L + M is less than 1.0000, then the value of the sum is adjusted to 1.0000. |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 5 of 5
Subject: | Side Letter No. 31 to the V2500 General Terms of Sale Agreement between JetBlue Airways Corporation and IAE International Aero Engines AG dated May 4, 1999. |
1. | Revision to Exhibit B-2 |
1.1. | The Parties hereby agree that Exhibit B-2 to the Agreement, Purchased Items, Price, Escalation Formula and Delivery , is hereby deleted in its entirety and replaced by the revised delivery schedule attached as Appendix 1 hereto which captures the amendments as set forth in Clause 2 below. |
2. | Spare Engine Pull Forwards |
2.1. | The delivery of Spare Engine No. 25 (as listed in Exhibit B-2) is accelerated from [***] 2011 and rescheduled for delivery in [***] 2011. | ||
2.2. | The delivery of Spare Engine No. 26 (as listed in Exhibit B-2) is accelerated from [***] 2011 and rescheduled for delivery in [***] 2011. | ||
2.3. | In consideration for rescheduling the Spare Engines as detailed in Clauses 2.1 and 2.2 above (each an 2011 Accelerated Spare Engine and collectively the 2011 Accelerated |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 1 of 6
Spare Engines ) IAE agrees to [***]. | |||
2.4. | If JetBlue takes delivery of the 2011 Accelerated Spare Engines in [***] 2011, the Purchase Price balances for such 2011 Accelerated Spare Engines shall [***] in the case of Spare Engine No. 25 and (ii) [***] in the case of Spare Engine No. 26. | ||
2.5. | In the event that JetBlue takes delivery of either 2011 Accelerated Spare Engine after [***] 2011, and if the delay is not caused or requested by IAE, then: (i) the Purchase Price balance for each such 2011 Accelerated Spare Engine shall [***] in accordance with applicable escalation formula contained in Exhibit B-2 to the Agreement and (ii) the 2011 Accelerated Spare Engines [***]. | ||
2.6. | IAE agrees to [***]. | ||
2.7. | IAE also agrees to [***]. JetBlue agrees to [***]. | ||
2.8. | IAE shall be responsible for the transportation of the IAE Transportation Equipment from JetBlues facilities in Orlando, FL to IAEs facilities in Middletown, CT. |
3.1 | This Side Letter No. 31 is not, and shall not be construed as, a waiver of either Partys rights or remedies. | ||
3.2 | This Side Letter No. 31 contains matters of a confidential and proprietary nature and is delivered on the express condition that its terms shall not be disclosed to any third party or reproduced in whole or in part for anyone other than the parties hereto without the other partys prior written consent, unless otherwise stated herein. | ||
3.3 | This Side Letter No. 31 constitutes a valid, legal, binding obligation. This Side Letter No. 31 shall be construed and interpreted in accordance with the laws of the State of Connecticut, United States of America with the exception of its conflict of law provisions. | ||
3.4 | This Side Letter No. 31 may be executed in one or more counterparts, each of which when so executed and delivered shall be an original but shall constitute one and the same instrument. |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 2 of 6
Very truly yours,
|
Agreed to and accepted on behalf of | |||||
IAE International Aero Engines AG
|
JetBlue Airways Corporation | |||||
|
||||||
/s/ Debarshi Mandal
|
/s/ Mark D. Powers
|
|||||
|
||||||
Debarshi Mandal
|
SVP Treasurer | |||||
|
||||||
Name
|
Title | |||||
|
||||||
Commercial Manager
|
9/28/11 | |||||
|
||||||
Title
|
Date |
Page 3 of 6
| Delivered Spare Engines are indicated by Italics typeface | |
| Applicable escalation formulae are in accordance with Side Letter 13 to the Agreement |
Basic Contract | ||||||||||||||
Rank | Price | Base | Applicable | Delivery | ||||||||||
No. | Purchased Item | U.S. Dollars | Month | Qty | Escalation | Date | ||||||||
No. 1 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -99 | ||||||||
No. 2 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -00 | ||||||||
No. 3 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -01 | ||||||||
No. 4 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -02 | ||||||||
No. 5 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -02 | ||||||||
No. 6 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -03 | ||||||||
No. 7 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -04 | ||||||||
No. 8 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -05 | ||||||||
No. 9 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -05 | ||||||||
No. 10 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***] -06 | ||||||||
No. 11 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -06 | ||||||||
No. 12 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***] -07 | ||||||||
No. 13 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -07 | ||||||||
No. 14 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -07 | ||||||||
No. 15 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***] -07 | ||||||||
No. 16 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -07 | ||||||||
No. 17 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -08 | ||||||||
No. 18 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -08 | ||||||||
No. 19 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -09 | ||||||||
No. 20 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -10 | ||||||||
No. 21 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula ll | [***] -10 | ||||||||
No. 22 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -10 | ||||||||
No. 23 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula I | [***] -11 | ||||||||
No. 24 |
V2527-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***] -11 | ||||||||
No. 25 |
V2533-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***]-11 | ||||||||
No. 26 |
V2533-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***]-11 | ||||||||
No. 27 |
V2533-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***]-12 | ||||||||
No. 28 |
V2533-A5 Spare Engine
|
[***] | Jan-03 | 1 | Formula II | [***]-12 | ||||||||
TOTAL |
|
28 |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 4 of 6
1. | Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula: | |
P = Pb ( [***]
L
+ [***]
M
+ [***]
E
)
Lo Mo Eo |
||
Where: | ||
P = the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar | ||
Pb = unit base price or other sum. | ||
Lo = the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the Labor for the month preceding the base month by four months. | ||
L = the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the month preceding the month of delivery or other date of determination by four months. | ||
Mo = the Producer Price Index, Code 10, for Metals and Metal Products published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months. | ||
M = the Producer Price Index, Code 10, for Metals and Metal Products for the month preceding the base month by four months. | ||
Eo = the Producer Price Index, Code 5, for Fuel and Related Products and Power published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months. | ||
E = the Producer Price Index, Code 5, for Fuel and Related Products and Power for the month preceding the base month by four months. | ||
The values of the factors [***]
L
+ [***]
M
+ [***]
E
Lo Mo Eo |
||
Respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number. | ||
If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics. | ||
The Basic Contract Prices contained in this Exhibit B are subject to escalation from a Base Month of January 2003 to the month of delivery using using Lo, Mo and Eo values for September 2002. | ||
If the application of the formula contained in this Exhibit B results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies. |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 5 of 6
1. | Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula: |
|
Pi | = | (Pb+F) x CPI where: | |||
|
||||||
|
Pi | = | the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar. | |||
|
||||||
|
Pb | = | unit base price or other sum. | |||
|
||||||
|
F | = | [***] (N)(Pb) | |||
|
||||||
|
N | = | the calendar year of scheduled delivery or other date of determination minus 2003 | |||
|
||||||
|
CPI | = | [***] (L) + [***] (M) | |||
|
||||||
|
L | = | Labor Ratio defined below | |||
|
||||||
|
M | = | Material Ratio defined below |
IAEs Composite Price Index (CPI) is the sum of [***] percent of the Labor ratio and [***] percent of the Material Ratio, with the sum rounded to the nearest ten thousandth. | ||
The quarterly value published for the Employment Cost Index will be deemed to apply to each month of the quarter. | ||
The Labor Ratio is the North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value of North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. To be clear the quarterly value of CIU2023211000000I will apply to each month of a given quarter. | ||
The Material Ratio is the Producer Price Index, Industrial Commodities, WPU03thru15, as published monthly by the Bureau of Labor Statistics, U.S. Department of Labor, for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value for Industrial Commodities for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. | ||
For a given month, the escalation shall be computed by using the applicable Index value, which the Bureau has published as the time of delivery or other date of determination. | ||
2. | If the U.S. Department of Labor changes the base year for determination of the Index values as defined above, such re-based values will be incorporated in the escalation calculation. | |
3. | If the U.S. Department of Labor revises the methodology used for the determination of the values to be used to determine the CPI or, for any reason, has not released values needed to determine the CPI, IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period. | |
4. | The invoiced purchase price, which in no event shall be less than the unit base price, shall be the final price. If the calculated sum of L + M is less than 1.0000, then the value of the sum is adjusted to 1.0000. |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Page 6 of 6
1- | MOU EXPIRATION DATE | |
Paragraph 9.2 (ii) of the MOU is deleted and replaced with the following Paragraph 9.2 (ii) between QUOTE and UNQUOTE: | ||
QUOTE |
[***] | Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Yours sincerely,
AIRBUS S.A.S. |
||||
By: | /s/ Patrick de Castelbajac | |||
Name: | Patrick de Castelbajac | |||
Title: | Vice President Contracts | |||
Agreed and Accepted:
JETBLUE AIRWAYS CORPORATION |
||||
By: | /s/ Mark D. Powers | |||
Name: | Mark D. Powers | |||
Title: | SVP Treasurer | |||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings:
|
||||||||||||||||
Income (loss) before income taxes
|
$ | 56 | $ | 97 | $ | 105 | $ | 148 | ||||||||
Less: capitalized interest
|
(1 | ) | $ | (1 | ) | (3 | ) | (3 | ) | |||||||
Add: fixed charges
|
71 | 71 | 210 | 212 | ||||||||||||
Amortization of capitalized interest
|
| | 1 | 1 | ||||||||||||
|
||||||||||||||||
Adjusted earnings
|
$ | 126 | $ | 167 | $ | 313 | $ | 358 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Fixed charges:
|
||||||||||||||||
Interest expense
|
$ | 43 | $ | 43 | $ | 127 | $ | 129 | ||||||||
Amortization of debt costs
|
2 | 2 | 6 | 6 | ||||||||||||
Rent expense representative of interest
|
26 | 26 | 77 | 77 | ||||||||||||
|
||||||||||||||||
Total fixed charges
|
$ | 71 | $ | 71 | $ | 210 | $ | 212 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Ratio of earnings to fixed charges
|
1.78 | 2.36 | 1.49 | 1.69 | ||||||||||||
|
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 financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 2, 2011 | By: | /s/ DAVID BARGER | ||
Chief Executive Officer | ||||
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 financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 2, 2011 | By: | /s/ MARK D. POWERS | ||
Chief Financial Officer | ||||
Date: November 2, 2011 | By: | /s/ DAVID BARGER | ||
Chief Executive Officer | ||||
Date: November 2, 2011 | By: | /s/ MARK D. POWERS | ||
Chief Financial Officer | ||||