Westjet 2008 Annual Report Download - page 40

36 WestJet 2008 Annual Report
aircraft deliveries, partially offset by $13.8 million received
on the sale of two engines.
Contractual obligations and commitments
Our contractual obligations for each of the next fi ve years,
which do not include commitments for goods and services
required in the ordinary course of business, are indicated
in the table below:
Investing cash fl ow
Cash used in investing activities for 2008 totalled $199.7
million compared to $200.3 million in 2007. During 2008,
our investing activities consisted of $114.5 million in aircraft
additions, largely related to expenditures for three new
purchased aircraft, as well as $68.9 million in spending
towards our new offi ce space adjacent to the Calgary
hangar, known as the Campus. In 2007, we added four new
aircraft and paid Boeing deposits towards 23 future owned
It’s defi nitely rewarding offering unique vacations
experiences to our guests. It’s also pretty amazing
to feel like I am contributing to our bottom line.
Kristi Sheldan, Sales Agent, WestJet Vacations
WestJetter since 2005
($ in thousands) Total 2009 2010 2011 2012 2013 Thereafter
Long-term debt repayments $ 1,351,903 $ 165,721 $ 165,034 $ 177,557 $ 163,279 $ 162,740 $ 517,572
Capital lease obligations(1) 1,179 444 698 37 — — —
Operating leases and commitments(2) 1,736,950 165,777 201,458 220,324 226,104 212,758 710,529
Purchase obligations(3) 1,266,452 62,019 131,144 151,542 561,555 360,192 —
Total contractual obligations $ 4,356,484 $ 393,961 $ 498,334 $ 549,460 $ 950,938 $ 735,690 $ 1,228,101
(1) Includes weighted average imputed interest at 5.29 per cent totaling $71.
(2) Included in operating leases are US-dollar operating leases primarily related to aircraft. The obligations of these operating leases in US dollars are: 2009 – $121,909;
2010 – $156,114; 2011 – $175,610; 2012 – $181,594; 2013 – $171,008; 2014 and thereafter $547,870.
(3) Relates to purchases of aircraft, live satellite television systems and winglets. These purchase obligations in US dollars are: 2009 – $50,919; 2010 – $107,672;
2011 – $124,419; 2012 – $461,047; 2013 – $295,724.
On December 19, 2008, we signed an agreement with Sabre
Airline Solutions Inc.
® (Sabre) to provide us with a license
to access and use its reservation system SabreSonic®
. The
term of the agreement will continue for a period of fi ve
years. The minimum contract amounts associated with the
reservation system have been included in the above totals.
We currently have 24 aircraft under operating leases.
We have entered into agreements with independent third
parties to lease 15 additional 737-700 aircraft and fi ve
737-800 aircraft over eight- and 10-year terms in US
dollars, to be delivered throughout 2009 to 2012. Although
the current obligations related to our aircraft operating
lease agreements are not recognized on our balance sheet,
we include these commitments in assessing our overall
leverage through our adjusted debt-to-equity and net debt
to EBITDAR ratios.
Capital resources
During 2008, we took delivery of two leased 737-700s, three
owned 737-700s and one leased 737-800, increasing our
total registered fl eet to 76 aircraft with an average age
of 4.0 years. Additionally, we signed an agreement with
Boeing in the second quarter of 2008 to purchase four new
aircraft, bringing our total committed fl eet to 120 by 2013.
On September 6, 2008, Boeing’s largest labour union, the
International Association of Machinists and Aerospace
Workers (IAM), went on strike. The IAM ratifi ed a new
four-year labour contract with Boeing on November 2, 2008.
Based on previous disclosure, we expected one aircraft to
be delivered in the fourth quarter of 2008 and 10 aircraft
to be delivered throughout 2009. Because of the Boeing
strike, delivery dates for several of our future aircraft were