Westjet 2002 Annual Report Download - page 45

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Figures in Review
Notes to Consolidated Financial Statements
Years ended December 31, 2002 and 2001
(Tabular Amounts are Stated in Thousands of Dollars, Except Per Share Data)
4. Long-term debt (continued):
The Corporation has a US $478 million facility with the ING Group which is supported by loan
guarantees from the Export-Import Bank of the United States (Ex-Im) for US $478 million for the
purchase of 15 Boeing Next-Generation 737-700 series aircraft. Of these aircraft, four were delivered in
2002, with the remaining 11 to be delivered over the course of 2003. HFLP is used as the financial
intermediary to facilitate the financing agreement to purchase the aircraft.
This facility will be drawn in Canadian dollars in separate instalments with 12-year terms for each new
aircraft. Each loan will be amortized on a straight-line basis over the 12-year term in quarterly principal
instalments, with interest calculated on the outstanding principal balance.
The Corporation is charged a commitment fee of 0.125% per annum on the unutilized and uncancelled
balance of the loan guarantee, payable at specified dates and upon delivery of an aircraft. As at December
31, 2002 the unutilized balance was US $364 million.
The Corporation has entered into Forward Starting Interest Rate Agreements at rates between 5.36%
and 5.85% on the remaining 11 aircraft to be delivered under this facility.
The Corporation has available a facility with a Canadian chartered bank of $6,000,000 for letters of guarantee.
At December 31, 2002, letters of guarantee totaling $4,410,000 have been issued under these facilities.
The credit facilities are secured by a fixed first charge on one aircraft, a general security agreement and
an assignment of insurance proceeds.
Cash interest paid during the year was $5,836,000 (2001 - $5,570,000).
5. Leases:
The Corporation has entered into operating leases for aircraft, buildings, computer hardware and software
licenses and capital leases relating to computer hardware and aircraft. The obligations, on a calendar-
year basis, are as follows (see note 8 for additional lease commitments):
Capital Operating
Leases Leases
2003 $ 8,880 $ 52,715
2004 8,753 51,071
2005 6,256 49,857
2006 2,913 47,341
2007 - 47,206
2008 and thereafter - 384,276
Total lease payments 26,802 $ 632,466
Less imputed interest at 7.79% (3,160)
Net minimum lease payments 23,642
Less current portion of obligations under capital lease (7,290)
Obligations under capital lease $ 16,352
2002 WestJet Annual Report 45