PART II  ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Return on Invested Capital Reconciliation of Return on Invested Capital (Non-GAAP) Analysis of Cash Flows Operating Activities Investing Activities JETBLUE AIRWAYS CORPORATION  -  2013 Annual Report 33 and continuing to grow. We believe this non-GAAP measure provides a  meaningful comparison of our results to the airline industry and our prior  year results. Investors should consider this non-GAAP financial measure in  addition to, and not as a substitute for, our financial performance measures  prepared in accordance with GAAP. Return on invested capital, or ROIC, is an important financial metric which  we believe provides meaningful information as to how well we generate  returns relative to the capital invested in our business. During 2013 our  ROIC improved to 5.3%. We are committed to taking appropriate actions  which will allow us to continue to improve ROIC while adding capacity  We had cash and cash equivalents of $225 million as of December 31, 2013. This compares to $182 million and $673 million as of December 31, 2012  and 2011 respectively. We held both short and long term investments in 2013, 2012 and 2011. Our short-term investments totaled $402 million as of  December 31, 2013 compared to $549 million and $553 million as of December 31, 2012 and 2011 respectively. Our long-term investments totaled  $114 million as of December 31, 2013 compared to $136 million and $38 million as of December 31, 2012 and 2011 respectively.  Cash flows provided by operating activities totaled $758 million in 2013  compared to $698 million in 2012 and $614 million in 2011. There was  a $60 million increase in cash flows from operating activities in 2013  compared to 2012. During 2013 we saw a 7% increase in capacity, a 4%  increase in average fares and a 2% decrease in the price of fuel which  all helped to improve operating cash flows. The $84 million increase in  cash flows from operations in 2012 compared to 2011 was primarily as a  result of the 2% increase in average fares and 8% increase in capacity but  was offset by an increase of 1% in fuel prices. As of December 31, 2013,  our unrestricted cash, cash equivalents and short-term investments as  a percentage of trailing twelve months revenue was approximately 12%.  We rely primarily on cash flows from operations to provide working capital  for current and future operations. was $365 million. We additionally paid $22 million for flight equipment  deposits and $54 million for spare parts. Capital expenditures for other  property and equipment, including ground equipment purchases, facilities  improvements and LiveTV inflight-entertainment equipment inventory  were $196 million. During 2013 LiveTV sold its investment in the Airfone  business for $8 million in proceeds. Investing activities also include the  net purchase of $161 million in investment securities. The capital expenditure for seven new EMBRAER 190 aircraft, three  new Airbus A320 aircraft and four new Airbus A321 aircraft during 2013  During 2012, capital expenditures related to our purchase of flight equipment  included $344 million for seven Airbus A320 aircraft, four EMBRAER  190 aircraft and five spare engines. It also included $283 million for flight  equipment deposits, including a $200 million prepayment in exchange for  favorable pricing terms, and $32 million for spare part purchases. Capital  expenditures for other property and equipment, including ground equipment  purchases, facilities improvements and LiveTV inflight-entertainment  equipment inventory were $166 million, which includes the final $32 million  for the 16 slots we purchased at LaGuardia and Reagan National in 2011  and $17 million for T5i, which was paid for using cash from operations. The  receipt of $46 million in proceeds from the sale of two EMBRAER 190 aircraft  (b) In determining the Invested Capital component of ROIC, we include a non-GAAP adjustment for aircraft operating leases, as operating lease  obligations are not reflected on our balance sheets, but do represent a significant financing obligation. In making the adjustment, we used a  multiple of 7 times our aircraft rent as this is the multiple which is routinely used with in the airline community to represent the financing component  of aircraft operating lease obligations. (in millions, except as otherwise noted) Twelve Months Ended December 31, 2013 2012 Numerator Operating Income $ 428 $ 376 Add: Interest income (expense) and other (1 ) 1 Add: Interest component of capitalized aircraft rent (a) 67 68 Subtotal 494 445 Less: Income tax expense impact 194 172 Operating Income After Tax, Adjusted $ 300 $ 273 Denominator Average Stockholders’ equity $ 2,011 $ 1,822 Average total debt 2,718 2,994 Capitalized aircraft rent (a) 899 913 Invested Capital $ 5,628 $ 5,729 RETURN ON INVESTED CAPITAL 5.3 % 4.8 % (a) Capitalized Aircraft Rent Aircraft rent, as reported $ 128 $ 130 Capitalized aircraft rent (7 * Aircraft rent) (b) 899 913 Interest component of capitalized aircraft rent (Imputed interest at 7.5%) 67 68