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60 WestJet 2009 Annual Report
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
For the years ended December 31, 2009 and 2008
(Stated in thousands of Canadian dollars, except share and per share data)
3. Capital management (continued)
As at December 31, 2009 and 2008, the Corporation’s internal targets were an adjusted debt-to-equity measure of no more than 3.00 and an
adjusted net debt to EBITDAR of no more than 3.00. As at December 31, 2009, the Corporation’s adjusted debt-to-equity ratio improved by 20.1%
when compared to 2008, attributable to the signifi cant increase in shareholders’ equity from the issuance of 15,398,500 voting shares for total net
proceeds of $164,995 under the Corporation’s equity offering, which closed on September 30, 2009. As at December 31, 2009, the Corporation’s
adjusted net debt to EBITDAR improved by 3.9% when compared to 2008, mainly attributable to the increase in cash and cash equivalents from
the net proceeds of the equity offering.
As part of the long-term debt agreements for the Calgary Hangar facility and the fl ight simulator, the Corporation monitors certain fi nancial
covenants to ensure compliance with these debt agreements. As at December 31, 2009, the Corporation was in compliance with these fi nancial
covenants. There are no fi nancial covenant compliance requirements for the facilities guaranteed by the Export-Import Bank of the United States
(Ex-Im Bank).
There were no changes in the Corporation’s approach to capital management during the year ended December 31, 2009.
4. Cash and cash equivalents
As at December 31, 2009, cash and cash equivalents includes bank balances of $191,966 (2008 – $98,998) and short-term investments of $813,215
(2008 – $721,216). Included in these balances, as at December 31, 2009, the Corporation has US-dollar cash and cash equivalents totalling US
$32,858 (2008 – US $56,920).
As at December 31, 2009, cash and cash equivalents includes total restricted cash of $10,192 (2008 – $10,748). Included in this amount is $4,564
(2008 – $6,062), representing cash held in trust by WestJet Vacations Inc., a wholly owned subsidiary of the Corporation, in accordance with
regulatory requirements governing advance ticket sales for certain travel-related activities; $4,491 (2008 – $4,222) for security on the Corporation’s
facilities for letters of guarantee; and, in accordance with U.S. regulatory requirements, US $1,082 (2008 – US $381) in restricted cash, representing
cash not yet remitted for passenger facility charges.
5. Property and equipment
2009 Cost
Accumulated
depreciation Net book value
Aircraft $ 2,456,988 $ 513,521 $ 1,943,467
Ground property and equipment 120,031 52,804 67,227
Spare engines and parts 100,567 24,360 76,207
Buildings 136,228 9,843 126,385
Leasehold improvements 9,910 2,877 7,033
Assets under capital leases 5,882 2,210 3,672
2,829,606 605,615 2,223,991
Deposits on aircraft 83,489 — 83,489
Assets under development 86 — 86
$ 2,913,181 $ 605,615 $ 2,307,566