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74 WestJet 2010 Annual Report
5. Property and equipment (continued)
For the year ended December 31, 2010, the Corporation recognized $128,284 (2009 − $135,702) of depreciation expense in relation to property
and equipment. Included in aircraft costs are asset retirement costs for aircraft under operating leases totalling $5,411 (2009 – $4,710) and
associated accumulated depreciation of $1,912 (2009 – $1,314). These amounts are being depreciated on a straight-line basis over the term of
each lease. During the year ended December 31, 2010, the Corporation recognized depreciation expense of $598 (2009 – $468) in relation to the
asset retirement costs.
6. Intangible assets
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
For the years ended December 31, 2010 and 2009
(Stated in thousands of Canadian dollars,
except share and per share amounts)
Cost
Accumulated
amortization Net book value
2010
Software $ 43,549 $ 30,531 $ 13,018
2009
Software $ 40,392 $ 26,305 $ 14,087
2010 2009
Term loans – purchased aircraft (i) $ 1,005,678 $ 1,168,381
Term loan – purchased aircraft (ii) 25,997 33,631
Term loan – fl ight simulator (iii) 5,575 6,392
Term loan – live satellite television equipment (iv) 41 493
Term loan – Calgary hangar facility (v) 8,707 9,202
Term loan – Calgary hangar facility (vi) 1,179 1,678
1,047,177 1,219,777
Current portion 183,681 171,223
$ 863,496 $ 1,048,554
All of the Corporation’s intangible assets relate to purchased software. Included in the balance of software is $2,151 (2009 − $4,085) for
acquired software that is being developed and is not yet being amortized. For the year ended December 31, 2010, the Corporation recognized
$4,610 (2009 – $5,601) of amortization expense in relation to intangible assets.
7. Long-term debt
(i) 52 individual term loans, amortized over a 12-year term, each repayable in quarterly principal instalments ranging from $668 to $955, plus
fi xed interest at a weighted average rate of 5.30%, maturing between 2014 and 2020. These facilities are guaranteed by Ex-Im Bank and
secured by one 800-series aircraft, 38 700-series aircraft and 13 600-series aircraft.
(ii) Term loan of US $26,137 repayable in quarterly instalments of US $1,788, including fi xed interest at a rate of 4.315%, maturing in 2014. This
facility is secured by one 800-series aircraft.
(iii) Term loan repayable in monthly instalments of $93, including fl oating interest at the bank’s prime rate plus 0.88%, with an effective interest
rate of 3.88% as at December 31, 2010, maturing in July 2011 with a fi nal payment of $5,123, secured by one fl ight simulator.
(iv) Term loan amortized over a fi ve-year term, repayable in quarterly principal instalments of $41, plus fl oating interest at the Canadian LIBOR
rate plus 0.08%, with an effective interest rate of 1.30% as at December 31, 2010, maturing in January 2011. This facility is for the purchase
of live satellite television equipment, is guaranteed by the Ex-Im Bank and is secured by one 700-series aircraft.
(v) Term loan repayable in monthly instalments of $108, including fi xed interest at 9.03%, maturing in April 2011 with a fi nal payment of $8,575,
secured by the Calgary hangar facility.