Westjet 2010 Annual Report Download - page 34

32 WestJet 2010 Annual Report
We have available a three-year revolving operating line of credit with
a syndicate of three Canadian banks. The line of credit is available
to a maximum of $80.8 million (December 31, 2009 – $85 million);
it is secured by our Campus facility and expires in May 2012.
The line of credit bears interest at prime plus 0.50 per cent
per annum, or a banker’s acceptance rate at 2.0 per cent annual
stamping fee, and is available for general corporate expenditures
and working capital purposes. We are required to pay an annual
standby fee of 15 basis points, based on the average unused portion
of the line of credit for the previous quarter, payable quarterly.
As at December 31, 2010, no amounts were drawn on this facility.
Contingencies
We are party to certain legal proceedings that arise during the
ordinary course of business. It is the opinion of management that
the ultimate outcome of these matters will not have a material
effect upon our financial position, results of operations or cash flow.
Quarterly dividend policy
On November 2, 2010, the Board of Directors authorized us to
initiate a quarterly dividend of $0.05 per common voting share and
variable voting share. In the fourth quarter of 2010, we declared
our initial quarterly dividend of $0.05 per common voting
share and variable voting share to shareholders of record on
December 15, 2010. This dividend was paid on January 21, 2011.
On February 8, 2011, our Board of Directors declared our second
quarterly dividend of $0.05 per common voting share and variable
voting share to shareholders of record on March 16, 2011, to be
paid on March 31, 2011.
We believe that this dividend policy is consistent with our
objective of creating and returning value to shareholders.
Normal course issuer bid
On November 2, 2010, we filed a notice with the TSX to make a
normal course issuer bid to purchase outstanding shares on the
open market. As approved by the TSX, we are authorized to purchase
up to 7,264,820 common voting shares and variable voting shares
(representing 5 per cent of our issued and outstanding shares at
the time of the bid) during the period of November 5, 2010 to
November 4, 2011, or until such time as the bid is completed or
terminated at our option. Any shares purchased under this bid
will be purchased on the open market through the facilities of the
TSX at the prevailing market price at the time of the transaction.
Shares acquired under this bid will be cancelled.
A shareholder may obtain a copy of the notice filed with the TSX in
relation to the bid, free of charge, by contacting the Vice-President,
Legal Services of WestJet, 22 Aerial Place N.E., Calgary,
Alberta, T2E 3J1, (telephone [phone] or by faxing a
written request to [phone]).
During 2010, we repurchased 2,338,730 shares under the bid for
total consideration of $31.4 million. The book value of the shares
repurchased of $10.6 million was charged to share capital, with
the $20.8 million excess of the market price over the average book
value, including transaction costs, charged to retained earnings.