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Notes to Consolidated Financial Statements
For the years ended December 31, 2011 and 2010
(Stated in thousands of Canadian dollars, except share and per share amounts)
│
10. Long-term debt (continued)
Future scheduled repayments of long-term debt as at December 31, 2011 are as follows:
Within 1 year 158,832
1 – 3 years 319,100
3 – 5 years 222,194
Over 5 years 128,586
828,712
Held within the special-purpose entities, as identified in note 1, Summary of significant accounting policies, are liabilities of
$842,976 (December 31, 2010 – $1,005,719; January 1, 2010 – $1,168,907) related to the acquisition of the 52 purchased
aircraft and live satellite television equipment, which are included above in the long-term debt balances.
11. Obligations under finance leases
The Corporation has entered into finance leases relating to a fuel storage facility and ground handling equipment. Future
scheduled repayments of obligations under finance leases as at December 31, 2011 are as follows:
Within 1 year 245
1 – 3 years 490
3 – 5 years 490
Over 5 years 4,371
Total minimum lease payments 5,596
Less: Weighted average imputed interest at 5.28% )2,347(
Net minimum lease payments 3,249
Less: Current portion of obligations under finance leases (75)
Long term obligations under finance leases 3,174
12. Income taxes
(a) Reconciliation of total tax expense
The effective rate on the Corporation’s earnings before income tax differs from the expected amount that would arise using the
combined Canadian federal and provincial statutory income tax rates. A reconciliation of the difference is as follows:
2011 2010
Earnings before income tax 208,006 133,465
Combined Canadian federal and provincial income tax rate 27.26% 29.46%
Expected income tax provision 56,702 39,319
Add (deduct):
Non-deductible expenses 3,344 2,380
Non-deductible share-based payment expense 3,430 4,534
Effect of tax rate changes (4,539) (3,726)
Other 367 761
Actual income tax provision 59,304 43,268
Effective tax rate 28.51% 32.42%
The decrease in the effective tax rate for year ended December 31, 2011 was primarily due to higher comparative earnings. As
earnings increase, the impact of relatively fixed permanent differences on the overall effective tax rate is less pronounced,
resulting in a corresponding decrease in the effective tax rate.
The Corporation has included in its reconciliation a deduction of $4,539 for the year ended December 31, 2011 (2010 – $3,726)
for the effect of tax rate changes. This amount primarily reflects the impact of changes to the timing of when the Corporation
expects certain temporary differences to reverse and differences between current statutory rates used in the reconciliation and
future rates at which the deferred income tax liability is recorded.
WestJet Annual Report 2011 83