Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Basis of Presentation

JetBlue Airways Corporation ("JetBlue"), provides air transportation services across the United States, the Caribbean, Latin America, Canada, and the United Kingdom. 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 2021 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 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 (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, ("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 ongoing 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, held-to-maturity investment securities, and equity 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, commercial paper, and convertible debt securities.

The fair values of these instruments 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, 2022 or 2021. Refer to Note 7 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities. Our held-to-maturity investment securities consist of investment-grade interest bearing instruments, such as corporate bonds and U.S. Treasury notes, which are stated at amortized cost. We do not intend to sell these investment securities and the contractual maturities are not greater than 24 months. Those with maturities of less than twelve months are included in short-term investments on our consolidated balance sheets. Those with remaining maturities in excess of twelve months are included in long-term investments on our consolidated balance sheets. We did not record any material gains or losses on these securities during the three and nine months ended September 30, 2022 or 2021.

Equity investment securities. Our equity investment securities include investments in common stocks of publicly traded companies which are stated at fair value. We recognized a net unrealized loss of $10 million on these securities during the nine months ended September 30, 2022. An immaterial gain was recorded during the same period in 2021.

The aggregate carrying values of our short-term and long-term investment securities consisted of the following at September 30, 2022 and December 31, 2021 (in millions):


	September 30, 2022		December 31, 2021
Available-for-sale investment securities
Time deposits	$	630	$	790
Debt securities	11		8
Commercial paper	39		2
Total available-for-sale investment securities	680		800
Held-to-maturity investment securities
Corporate bonds	176		37
Total held-to-maturity investment securities	176		37
Equity investment securities
Common stock of publicly traded companies	11		26
Total equity investment securities	11		26
Total investment securities	$	867	$	863

Other Investments

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC ("JetBlue Ventures") has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the Financial Accounting Standards Board Accounting Standards Codification (the "FASB Codification"), 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 identifiable or similar investments of the same issuer. The carrying amount of these investments was $78 million and $72 million as of September 30, 2022 and December 31, 2021, respectively. We did not record any material gains or losses on these investments during the three and nine months ended September 30, 2022 and 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, 2022 and December 31, 2021.

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 FASB Codification. The carrying amount of our equity method investments was $39 million and $32 million as of September 30, 2022 and December 31, 2021, respectively, and is included within other assets on our consolidated balance sheets.