PART II  ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations development of our products and services, the commercialization of our  products and services or for other general corporate purposes. None of our lenders or lessors are affiliated with us. and six spare engines is included in investing activities. Investing activities  also include the net purchase of $104 million in investment securities. During 2011, capital expenditures related to our purchase of flight equipment  included $318 million for four Airbus A320 aircraft, five EMBRAER 190 aircraft  and nine spare engines, $44 million for flight equipment deposits and  $27 million for spare part purchases. Capital expenditures for other  property and equipment, including ground equipment purchases, facilities  improvements and LiveTV inventory, were $135 million, which includes  $40 million for the 16 slots we purchased at LaGuardia and Reagan  National. Investing activities in 2011 also included the net proceeds from  the sale and maturities of $24 million in investment securities. We have been able to generate sufficient funds from operations to meet our  working capital requirements and we have historically financed our aircraft  through either secured debt or lease financing. As of December 31, 2013  we operated a fleet of 194 aircraft including 21 Airbus A320 and two  EMBRAER 190 unencumbered aircraft. Of the remaining aircraft, 60 were  financed under operating leases, four were financed under capital leases  and 107 were financed by private and public secured debt. We additionally  have 30 unencumbered spare engines and a five spare engines that are  secured by financings. Approximately 63%% of our property and equipment  is pledged as security under various loan arrangements. We currently anticipate 2014 capital expenditures to be approximately  $935 million, including approximately $595 million for aircraft and predelivery  deposits. The remaining capital expenditures of approximately $340 million  relate to non-aircraft projects such as the completion of our investment at  T5i, our purchase of the Slots at DCA, LiveTV’s continued investment in  Fly-Fi™ and the new facility near Orlando airport for Crewmember lodging. Capital Resources Financing Activities We have committed financing for four out of the nine Airbus A321 aircraft  scheduled for delivery in 2014. We plan to purchase the remaining 2014  scheduled deliveries with cash. To the extent we cannot pay in cash we  may be required to secure financing or further modify our aircraft acquisition  plans. Although we believe debt and/or lease financing should be available to  us if needed, we cannot give assurance we will be able to secure financing  on terms attractive to us, if at all. Financing activities during 2013 consisted of (1) scheduled maturities  of $392 million of debt and capital lease obligations, (2) our issuance of  $350 million in fixed rate equipment notes secured by 12 aircraft, (3) the  prepayment of $94 million in high-interest debt secured by four Airbus  A320 aircraft and $119 million relating to our Spare Parts EETC, (4) the  refunding of our Series 2005 GOAA bonds with proceeds of $43 million from the issuance of new 2013 GOAA bonds (5) the repayment of $13 million  in principal related to our construction obligation for T5 and (6) the acquisition  of $8 million in treasury shares primarily related to our share repurchase  program and the withholding of taxes upon the vesting of restricted  stock units. We had working capital deficit of $818 million at December 31, 2013  compared to a deficit of $508 million at December 31, 2012 and a working  capital of $216 million at December 31, 2011. Working capital deficits can  be customary in the airline industry since air traffic liability is classified as a  current liability. Our working capital deficit increased in 2013 mainly due to  a $132 million increase in air traffic liability and an increase of $75 million  relating to the current maturity of long-term debt. Also contributing to  our working capital deficit as of December 31, 2013 is $114 million in  marketable investment securities classified as long-term assets, including  $52 million related to a deposit made to lower the interest rate on the debt  secured by two aircraft. These funds on deposit are readily available to  us; however, if we were to draw upon this deposit, the interest rates on  the debt would revert to the higher rates in effect prior to the re-financing. Financing activities during 2012 consisted of (1) scheduled maturities of  $198 million of debt and capital lease obligations, (2) the pre-payment  of $185 million in high-cost debt secured by seven Airbus A320 aircraft,  (3) the repayment of $35 million of debt related to two EMBRAER  190 aircraft which were sold in 2012, (4) proceeds of $215 million in  non-public floating rate aircraft-related financing secured by four Airbus  A320 aircraft and four EMBRAER 190 aircraft, (5) the net repayment  of $88 million under our available lines of credit, (6) the repayment of  $12 million in principal related to our construction obligation for Terminal  5 and (7) the acquisition of 4.8 million treasury shares for $26 million  primarily related to our share repurchase program and the withholding of  taxes upon the vesting of restricted stock units. Working Capital  In 2012, we entered into a revolving line of credit with Morgan Stanley for  up to $100 million, and increased the line of credit for up to $200 million  in December 2012. This line of credit is secured by a portion of our  investment securities held by Morgan Stanley and the borrowing amount  may vary accordingly. This line of credit bears interest at a floating rate of  interest based upon LIBOR, plus a margin. During the year we borrowed  $190 million on this line of credit, which was fully repaid, leaving the line  undrawn as of December 31, 2013. Financing activities during 2011 consisted primarily of (1) the early  extinguishment of $39 million principal of our 6.75% Series A convertible  debentures due 2039 for $45 million, (2) scheduled maturities of  $188 million of debt and capital lease obligations, (3) the early payment  of $3 million on our spare parts pass-through certificates, (4) proceeds  of $121 million in fixed rate and $124 million in non-public floating  rate aircraft-related financing secured by four Airbus A320 aircraft and  five EMBRAER 190 aircraft, (5) the net borrowings of $88 million under our  available line of credit, (6) the repayment of $10 million in principal related  to our construction obligation for Terminal 5 and (7) the acquisition of  $4 million in treasury shares related to the withholding of taxes, upon the  vesting of restricted stock units. In April 2013 we entered into a Credit and Guaranty Agreement which  consists of a revolving credit up to $350 million and letter of credit facility  with Citibank, N.A. as the administrative agent. Borrowing under the Credit  Facility bear interest at a variable rate equal to LIBOR, plus a margin and  the facility terminates in 2016. The Credit Facility is secured by take-off  and landing slots at JFK, Newark, LaGuardia, Reagan National and certain  other assets. The Credit Facility includes covenants that require us to  maintain certain minimum balances in unrestricted cash, cash equivalents,  and unused commitments available under all revolving credit facilities. In  addition the covenants restrict our ability to incur additional indebtedness,  issue preferred stock or pay dividends. During 2013, we did not borrow  on this facility and the line was undrawn as of December 31, 2013. Concurrent with entering into the above agreement with Citibank, N.A. for  the revolving credit and letter of credit facility, we terminated our unsecured  revolving credit facility with American Express which had allowed us to  borrow up to a maximum of $125 million. In November 2012, we filed an automatic shelf registration statement with  the SEC. Under this universal shelf registration statement, we have the  capacity to offer and sell from time to time debt securities, pass-through  certificates, common stock, preferred stock and/or other securities. The  net proceeds of any securities we sell under this registration statement  may be used to fund working capital and capital expenditures, including  the purchase of aircraft and construction of facilities on or near airports.  Through December 31, 2013 we had not issued any securities under this  registration statement and at this time we have no plans to sell any such  securities under this registration statement. We may utilize this universal  shelf registration statement in the future to raise capital to fund the continued  We expect to meet our obligations as they become due through available  cash, investment securities and internally generated funds, supplemented  JETBLUE AIRWAYS CORPORATION  -  2013 Annual Report 34