Westjet 2015 Annual Report Download - page 41

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WestJet Annual Report 2015 | 39
Liquidity risk
Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities. We maintain
a strong liquidity position and sufficient financial resources to meet our obligations as they fall due.
The table below presents a maturity analysis of our undiscounted contractual cash flow for our non-derivative and derivative
financial liabilities as at December 31, 2015. The analysis is based on foreign exchange and interest rates in effect at the
consolidated statement of financial position date, and includes both principal and interest cash flows for long-term debt.
($ in thousands)
Total
Within 1
year
1 - 3 years
3 - 5 years
Over 5 years
Accounts payable and accrued liabilities(i)
545,438
545,438
−
−
−
Derivative financial liabilities
(ii)
13,015 4,526 8,489 − −
Long-term debt
1,342,203
182,182
275,159
564,331
320,531
Total 1,900,656 732,146 283,648 564,331 320,531
(i) Excludes foreign exchange derivative liabilities of $51 and interest rate derivative liabilities of $4,475.
(ii) Derivative financial liabilities consist of foreign exchange forward contracts of $51 and interest rate derivative contracts of $12,964. The Corporation reports
long-term interest rate derivatives at their net position. At December 31, 2015, net long-term interest rate derivative liabilities were $8,490.
Fair value of financial instruments
Fair value represents a point-in-time estimate. The carrying amount of cash and cash equivalents, accounts receivable, and
accounts payable and accrued liabilities included in the statement of financial position approximate their fair values because of
the short-term nature of the instruments. At December 31, 2015, the fair value of our long-term debt was approximately
$1,124.8 million (2014 – $1,110.0 million). The fair value of our fixed-rate long-term debt is determined by discounting the
future contractual cash flows under the current financing arrangements at discount rates presently available for loans with
similar terms and remaining maturities. At December 31, 2015, the weighted average rate used in determining the fair value
was 3.95 per cent (2014 – 4.61 per cent). The increase in the fair value of our long-term debt is due to the decrease to the
rate used to discount our debt. The fair value of our variable-rate long-term debt approximates its carrying value, as it is at a
floating market rate of interest. Please refer to
2015 Results of Operations – Foreign exchange
and
Liquidity and Capital
Resources –Financing
on page 19 and page 31, respectively, of this MD&A for a discussion of the significant assumptions
made in determining fair value of derivatives designated in an effective hedging relationship at December 31, 2015.