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Long-term Debt, Short-term Borrowings, and Finance Lease Obligations | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Long-term Debt, Short-term Borrowings and Finance Lease Obligations | Long-term Debt, Short-term Borrowings and Finance Lease Obligations Long-term debt and finance lease obligations and the related weighted average interest rate at December 31, 2020 and 2019 consisted of the following (in millions):
|  | December 31, 2020 |  | December 31, 2019
Secured Debt |  |  |  |  |  |  |  |
Fixed rate specialty bonds, due through 2036 |  | 43 |  |  | 4.9 | % |  | 43 |  |  | 4.9 | %
Fixed rate enhanced equipment notes: |  |  |  |  |  |  |  |
2019-1 Series AA, due through 2032 |  | 567 |  |  | 2.8 | % |  | 589 |  |  | 2.8 | %
2019-1 Series A, due through 2028 |  | 176 |  |  | 3.0 | % |  | 183 |  |  | 3.0 | %
2019-1 Series B, due through 2027 |  | 109 |  |  | 8.2 | % |  | — |  |  | — | %
2020-1 Series A, due through 2032 |  | 635 |  |  | 4.1 | % |  | — |  |  | — | %
2020-1 Series B, due through 2028 |  | 172 |  |  | 7.8 | % |  | — |  |  | — | %
Fixed rate enhanced equipment notes, due through 2023 |  | 115 |  |  | 4.5 | % |  | 134 |  |  | 4.5 | %
Fixed rate equipment notes, due through 2028 |  | 895 |  |  | 4.2 | % |  | 1,113 |  |  | 4.2 | %
Floating rate equipment notes, due through 2028 |  | 153 |  |  | 2.6 | % |  | 201 |  |  | 4.3 | %
Floating rate term loan credit facility, due through 2024 |  | 712 |  |  | 6.4 | % |  | — |  |  | — | %
Secured CARES Act Loan, due through 2025 |  | 106 |  |  | 3.2 | % |  | — |  |  | — | %
Citibank line of credit, due through 2023 |  | 550 |  |  | 2.2 | % |  | — |  |  | — | %
2020 sale-leaseback transactions, due through 2024 |  | 352 |  |  | 7.6 | % |  | — |  |  | — | %
Finance Leases |  | 63 |  |  | 4.6 | % |  | 89 |  |  | 4.8 | %
Unsecured Debt |  |  |  |  |  |  |  |
Unsecured CARES Act Payroll Support Program loan, due through 2030 |  | 259 |  |  | 2.0 | % |  | — |  |  | — | %
Total debt and finance lease obligations |  | 4,907 |  |  |  |  | 2,352 |  |  |
Less: Current maturities |  | (450) |  |  |  |  | (344) |  |  |
Less: Debt acquisition cost |  | (44) |  |  |  |  | (18) |  |  |
Long-term debt and finance lease obligations |  | $ | 4,413 |  |  |  |  | $ | 1,990 |  |  |
Fixed Rate Specialty Bonds In November 2005, the Greater Orlando Aviation Authority, or GOAA, issued special purpose airport facilities revenue bonds to JetBlue as reimbursement for certain airport facility construction and other costs. In April 2013, GOAA issued $42 million in special purpose airport facility revenue bonds to refund the bonds issued in 2005. The proceeds from the refunded bonds were loaned to us and we recorded the issuance of $43 million, net of $1 million premium, as long-term debt on our consolidated balance sheets. Fixed Rate Enhanced Equipment Notes 2019-1 Equipment Notes In November 2019, we completed a public placement of equipment notes in an aggregate principal amount of $772 million secured by 25 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series AA, bearing interest at the rate of 2.75% per annum in the aggregate principal amount equal to $589 million, and (ii) Series A, bearing interest at the rate of 2.95% per annum in the aggregate principal amount equal to $183 million. Principal and interest are payable semi-annually. 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. 2020-1 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. Fixed Rate Enhanced Equipment Notes, Due Through 2023 In March 2014, we completed a private placement of $226 million in pass-through certificates, Series 2013-1. The certificates were issued by a pass-through trust and are not obligations of JetBlue. The proceeds from the issuance of the pass-through certificates were used to purchase equipment notes issued by JetBlue and secured by 14 of our aircraft. Principal and interest are payable semi-annually. Fixed Rate Equipment Notes, Due Through 2028 In 2019, we issued $219 million in fixed rate equipment notes due through 2027, which are secured by 10 Airbus A320 aircraft and two Airbus A321 aircraft. In 2018, we issued $567 million in fixed rate equipment notes due through 2028, which are secured by 14 Airbus A320 aircraft and 10 Airbus A321 aircraft. Floating Rate Equipment Notes, Due Through 2028 Interest rates adjust quarterly or semi-annually based on LIBOR, plus a margin. In 2018, we issued $120 million in floating rate equipment notes due through 2028, which are secured by six Airbus A320 aircraft and one Airbus A321 aircraft. Floating Rate Term Loan Credit Facility, Due Through 2024 On June 17, 2020, we entered into a $750 million term loan credit facility with Barclays Bank PLC, as administrative agent. The loans under this term loan credit facility bear 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 are 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. The term loan facility is subject to amortization payments of 5% per year, payable quarterly, commencing on September 30, 2020 with the remaining balance due and payable in a single payment on the maturity date of June 17, 2024. The interest rate on our outstanding balance was 6.25% as of December 31, 2020. Secured CARES Act Loan Program As discussed in Note 2 to our consolidated financial statements, under the CARES Act Loan Program, we have the ability to borrow up to a total of approximately $1.9 billion from the Treasury. Any loans issued under the Loan Program are expected to be senior secured obligations of the Company. If we accept the full amount of the loan, we will issue warrants to purchase approximately 20.5 million shares of our common stock to the Treasury. Any amount received under the Loan Program will be subject to the relevant provisions of the CARES Act, including many of those described above under the Payroll Support Program. Unless otherwise terminated early, all borrowings under the Loan Agreement are due and payable on the fifth anniversary of the initial borrowing date. We made a drawing of $115 million under the Loan Agreement on September 29, 2020. Borrowings under the Loan Agreement bear interest at a variable rate equal to LIBOR (or another rate based on certain market interest rates, plus a margin of 1% per annum, in each case with a floor of 0%), plus a margin of 2.75% per annum. Our obligations under the Loan Agreement are secured by liens on (i) certain eligible aircraft and engine collateral, (ii) certain loyalty program assets, including JetBlue's rights in certain loyalty program agreements, loyalty program data and intellectual property, and (iii) certain cash accounts (collectively, the "Collateral"). Under the terms of the Loan Agreement, we may also pledge eligible spare parts, slots, gates and routes, and additional aircraft, real property, ground support equipment, flight simulators and equity interests. The Loan Agreement includes affirmative and negative covenants that restrict our ability to, among other things, dispose of Collateral, merge, consolidate or sell assets, incur certain additional indebtedness or pay certain dividends. In addition, we are required to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities aggregating not less than $550 million and to maintain a minimum ratio of the borrowing base of the Collateral (determined as the sum of a specified percentage of the appraised value of each type of Collateral) to outstanding obligations under the Loan Agreement of not less than 1.6 to 1.0. If we do not meet the minimum collateral coverage ratio, we must either provide additional Collateral to secure our obligations under the Loan Agreement or repay the loans by an amount necessary to maintain compliance with the collateral coverage ratio. The Loan Agreement contains events of default customary for similar financings. Upon the occurrence of an event of default, the outstanding obligations under the Loan Agreement may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to JetBlue, we will be required to prepay the loans in full under the Loan Agreement. In connection with the Loan Agreement and the initial borrowing amount of $115 million, on September 29, 2020, 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. As of December 31, 2020, approximately $1.8 billion of the borrowing capacity remained available to us. On January 15, 2021, we entered into a letter agreement with Treasury which provided an extension of the Loan Agreement allowing us the option to access the remaining borrowing capacity through May 28, 2021. Citibank Line of Credit In August 2019, we amended our revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent. The amendment increased our borrowing capacity by $125 million to $550 million and extended the term of the facility through August 2023. Borrowings under the Credit and Guaranty Agreement bear interest at a variable rate equal to LIBOR, plus a margin. The Credit and Guaranty Agreement is secured by spare parts, aircraft, and certain other assets. The Credit and Guaranty Agreement 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 and Guaranty Agreement on April 22, 2020. The interest rate on our outstanding balance wa s 2.20% as of December 31, 2020. 2020 Sale-Leaseback Transactions As discussed in Note 2 to our consolidated financial statements, in 2020, we executed $563 million of 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 Finance Leases As of December 31, 2020, two Airbus A320 aircraft, two Airbus A321 aircraft, and various computer equipment under finance leases were included in property and equipment at a cost of $188 million with accumulated amortization of $54 million. The future minimum lease payments under these non-cancelable leases are $40 million in 2021, $11 million in 2022, $11 million in 2023, $5 million in 2024, and no payments in the years thereafter. Included in the future minimum lease payments is $4 million representing interest, resulting in a present value of finance leases of $63 million with a current portion of $37 million and a long-term portion of $26 million. As of December 31, 2019, four finance leased Airbus A320 aircraft and two finance leased A321 aircraft were included in property and equipment at a cost of $250 million with accumulated amortization of $80 million. Unsecured CARES Act Payroll Support Program Loan As discussed in Note 2 to our consolidated financial statements, on April 23, 2020, we entered into the PSP Agreement under the CARES Act with the Treasury. Pursuant to the agreement, JetBlue received a Payroll Support Payment of $936 million (the "Payroll Support Payment") which included a grant of $685 million and a promissory note for $251 million. The note matures 10 years after issuance and is payable in a lump sum at maturity. As part of the agreement, JetBlue issued to the Treasury warrants to acquire more than 2.6 million shares of our common stock under the program at an exercise price of $9.50 per share. The warrants expire five years after issuance. On September 30, 2020, Treasury provided us Additional Payroll Support Payment of $27 million consisting of $19 million in grants and $8 million in an unsecured term loan under the PSP Agreement. The terms of the unsecured term loan are identical to those under the initial loan issued on April 23, 2020. In consideration for the Additional Payroll Support Payment, we issued Additional PSP Warrants to purchase approximately 85,540 additional shares of our common stock to the Treasury. The Additional PSP Warrants have the same terms and exercise price as the initial warrants issued on April 23, 2020. As of December 31, 2020, we believe we were in material compliance with all of our covenants in relation to our debt and lease agreements. Maturities of our debt and finance leases, net of debt acquisition costs, for the next five years are as follows (in millions):
|  | Maturities
2021 |  | $ | 440 |
2022 |  | 421 |
2023 |  | 1,181 |
2024 |  | 962 |
2025 |  | 308 |
Thereafter |  | 1,551 |
Aircraft, engines, and other equipment and facilit ies having a net book value of $6.9 billion at December 31, 2020 were pledged as security under various financing arrangements. Cash payments for interest related to debt and finance lease obligations, net of capitalized interest, aggregated $128 million, $62 million and $59 million in 2020, 2019, and 2018, respectively. The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at December 31, 2020 and 2019 were as follows (in millions):
|  | December 31, 2020 |  | December 31, 2019
|  | Carrying Value |  | Estimated Fair Value |  | Carrying Value |  | Estimated Fair Value
Public Debt |  |  |  |  |  |  |  |
Fixed rate special facility bonds, due through 2036 |  | $ | 42 |  |  | $ | 45 |  |  | $ | 42 |  |  | $ | 46 |
Fixed rate enhanced equipment notes: |  |  |  |  |  |  |  |
2019-1 Series AA, due through 2032 |  | 560 |  |  | 440 |  |  | 581 |  |  | 586 |
2019-1 Series A, due through 2028 |  | 174 |  |  | 152 |  |  | 181 |  |  | 186 |
2019-1 Series B, due through 2027 |  | 107 |  |  | 139 |  |  | — |  |  | — |
2020-1 Series A, due through 2032 |  | 627 |  |  | 658 |  |  | — |  |  | — |
2020-1 Series B, due through 2028 |  | 170 |  |  | 223 |  |  | — |  |  | — |
Non-Public Debt |  |  |  |  |  |  |  |
Fixed rate enhanced equipment notes, due through 2023 |  | 114 |  |  | 116 |  |  | 133 |  |  | 141 |
Fixed rate equipment notes, due through 2028 |  | 891 |  |  | 1,017 |  |  | 1,107 |  |  | 1,201 |
Floating rate equipment notes, due through 2028 |  | 152 |  |  | 144 |  |  | 201 |  |  | 207 |
Floating rate term loan credit facility, due through 2024 |  | 702 |  |  | 759 |  |  | — |  |  | — |
Unsecured CARES Act Payroll Support Program loan, due through 2030 |  | 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 2024 |  | 352 |  |  | 393 |  |  | — |  |  | — |
Total(1) |  | $ | 4,800 |  |  | $ | 4,930 |  |  | $ | 2,245 |  |  | $ | 2,367 |
(1) Total excludes finance lease obligations of $63 million and $89 million at December 31, 2020 and 2019, respectively. 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 14 to our consolidated financial statements for an explanation of the fair value hierarchy structure. 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. Short-term Borrowings Morgan Stanley Delayed Draw Term Loan Agreement In March 2020, we entered into a 364-day delayed draw term loan credit agreement with Morgan Stanley Senior Funding Inc., as the administrative agent. The delayed draw term loan agreement provided for a term loan facility of up to $1 billion. Borrowings under the credit agreement bore interest at a variable rate equal to LIBOR (but not less than 1% per annum), plus a margin, or at our election, another rate based on certain market interest rates. Our obligations under the delayed draw term loan agreement were secured by liens on certain aircraft and spare engines. The delayed draw term loan agreement included provisions that required us to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities (including the term loan facility) aggregating not less than $550 million. We borrowed the full amount of the delayed draw term loan facility in March 2020. Amortization payments equal to 0.25% of the outstanding principal of the term loan were due on the last day of each quarter during the term. The remaining outstanding principal amount of the term loan was required to be repaid in a single installment on the maturity date on March 15, 2021. We repaid the full balance of this delayed draw term loan facility during the third quarter of 2020. 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 years ended December 31, 2020 and 2019, we did not have a balance outstanding or borrowings under this line of credit.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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