We're very pleased with our year-over-year progress, particularly in light of significantly higher fuel prices and the challenges we faced in the first half of the year as we transitioned to a new reservation system and we operated without the benefit of JFK airports most important runway at our home base of operations in New York.Our crewmembers are the reason behind our success in 2010. In addition to successfully transitioning to a new reservations system, we worked hard to enhance our liquidity, optimize our network, maximize revenue and maintain our costs advantage. These actions resulted in record revenues and one of our most profitable years in our company's history. Our 2010 results reflect the hard work of everyone at JetBlue and I'd like to take this opportunity to thank our 13,000 plus crewmembers for helping us achieve these strong, impressive results. Our 2010 results include a $29 million profit sharing path to be paid to our crewmembers in March. Throughout 2010, we maintained a strong liquidity position. We ended the year with approximately $1 billion in unrestricted cash and short-term investments, or 25% of trailing 12 months revenue, which reflects our continued solid financial health and stability. Given the volatility and the price of fuel and the uncertainty that presents, we believe a strong cash balance remains important. In addition to maintaining strong liquidity in 2010, we generated $225 million of positive free cash flow, which we define as operating cash flow less capital expenditures. We continue to work with our aircraft manufacturers to reduce our capital expenditures, a critical component of the past two positive free cash flow. In 2010, we announced a deferral of 16 Embraer 190 aircraft and 16 Airbus 320 aircraft. These actions substantially reduced our aircraft commitments in the near term, helped smooth our future debt and pre-delivery deposit requirements and better matched our network demands with our order book.
In 2010, we generated record revenues of $3.8 billion, up 15% year-over-year, reflecting the benefits of an improving demand environment and increasing mix of business customers and revenue improvements enabled by our transition to SABRE. Last years average runway fare of $141 is an 8% improvement over 2009.We believe that our 2010 unit revenue growth of 7.6% was particularly impressive given our capacity growth of 6.7% during the same period. Capacity growth typically puts downward pressure on unit revenues. Instead, we were able to increase capacity in Boston and the Caribbean, while simultaneously growing unit revenues. We were especially encouraged by the improvement in higher yielding business traffic throughout 2010, driven primarily by our transition to SABRE and changes we made to our Boston network and schedule. Ancillary revenues continued to be an ongoing focus for JetBlue as well. When we combine all of our ancillary revenue reported in the passenger revenue line with those in the other revenue line, total ancillary revenue in the fourth quarter was about $20 per passenger and grew roughly $35 million or 8% during the full year of 2010 as compared to 2009. This increase was driven in large part by our even more legroom offering which generated over $85 million of revenue in 2010. As we further enhance our even more legroom offering, we expect this to continue to be a very important source of revenue for JetBlue. In 2011, we expect our ancillary revenues to increase approximately 20% year-over-year. Keep in mind that last year we had voluntarily waived fees in connection with our transition to SABRE, which should favorably impact year-over-year comparisons. In 2010, we seized on opportunities in the competitive landscape and improved the strength of our network. We acquired coveted slots at Washington's Reagan National Airport and opened six new destinations from Boston. With this and other actions, we increased capacity in Boston by 30% versus 2009. By next summer, we expect to offer 100 daily Boston departures, further solidifying our position as an important leading carrier. Read the rest of this transcript for free on seekingalpha.com