Westjet 2010 Annual Report Download - page 85

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WestJet 2010 Annual Report 83
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)
11. Related-party transactions (continued)
The Corporation engaged a relocation fi rm to purchase a single family residence from the President and Chief Executive Offi cer (CEO) for a
guaranteed price of US $1,525 in accordance with the Corporation’s relocation policy. The relocation fi rm will actively market the residence to
locate an outside buyer. If the proceeds on the sale of the home to a third party are less than or greater than the guaranteed price, the difference
between the guaranteed price and the proceeds will accrue to WestJet. The Corporation paid the relocation fi rm’s fees and expenses in
connection with this transaction, and also agreed to reimburse the offi cer for certain related tax and relocation expenses. The residence is
located in the United States and the transaction was a result of the offi cer’s move to Canada in conjunction with his appointment to President and
CEO, effective April 1, 2010. In connection with the relocation, the Corporation granted 38,256 RSUs pursuant to the ESU plan with a total value
of US $500, which are scheduled to wholly vest on April 1, 2011, the anniversary of the offi cer’s appointment to President and CEO. Upon exercise
of the RSUs, the Corporation will remit, on his behalf, an amount suffi cient to satisfy any withholding or other tax requirements of such RSUs,
limited to the withholding tax on the original award amount of US $500. Transactions have been measured at the exchange amount.
12. Commitments and contingencies
(a) Purchased aircraft and live satellite television systems
As at December 31, 2010, the Corporation is committed to purchase 38 737-700 aircraft for delivery between 2011 and 2017. The remaining
estimated amounts to be paid in deposits and purchase prices for the 38 aircraft, as well as amounts to be paid for live satellite television systems
on purchased and leased aircraft in US dollars and the Canadian-dollar equivalents, are as follows:
USD CAD
2011 $ 72,607 $ 72,217
2012 183,949 182,961
2013 271,896 270,436
2014 289,150 287,597
2015 403,574 401,406
2016 and thereafter 434,764 432,429
$ 1,655,940 $ 1,647,046
USD CAD
2011 $ 186,454 $ 206,983
2012 188,807 202,085
2013 185,535 195,222
2014 184,359 190,423
2015 161,149 166,189
2016 and thereafter 361,979 405,113
$ 1,268,283 $ 1,366,015
Subsequent to year end, the Corporation took delivery of one 737-700 aircraft. The Corporation did not incur any debt or equity fi nancing for this
aircraft and funded the entire purchase with cash.
In addition, subsequent to year end, the Corporation has deferred the deliveries of six 737-700 aircraft from the years 2012 to 2015 into 2017 and
2018. The total number of the Corporation’s aircraft purchase commitments remains unchanged at 38 737-700 aircraft. These deferrals have not
been refl ected in the table above.
(b) Operating leases and commitments
The Corporation has entered into operating leases and commitments for aircraft, land, buildings, equipment, computer hardware, software
licences and satellite programming. As at December 31, 2010, the future payments in Canadian dollars, and when applicable the US-dollar
equivalents, under operating leases and commitments are as follows: