Westjet 2013 Annual Report Download - page 39

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WestJet Annual Report 2013 39
OFF BALANCE SHEET ARRANGEMENTS
Aircraft operating leases
We currently have 44 Boeing 737 aircraft under operating leases. Future cash flow commitments in connection with these
aircraft totaled US $590.6 million at December 31, 2013 (2012 – US $756.4 million) which we expect to fund through cash
from operations. Although the current obligations related to our aircraft operating lease agreements are not recognized on our
consolidated statement of financial position, we include an amount equal to 7.5 times our annual aircraft leasing expense in
assessing our overall leverage through our adjusted debt-to-equity and adjusted net debt to EBITDAR ratios discussed
previously.
Fuel facility corporations
We are a contracted party to 11 fuel facility arrangements and one de-icing facility arrangement whereby we participate under
contract in fuel facility corporations and a de-icing corporation, along with other airlines, to obtain fuel services and de-icing
services at major Canadian and U.S. airports. The fuel facility and de-icing facility corporations operate on a cost-recovery
basis. The purpose of these corporations is to own and finance the systems that distribute fuel and de-icing fluid, respectively,
to the contracting airlines, including the leasing of land rights, while providing the contracting airlines with preferential service
and pricing over non-participating entities. The operating costs, including the debt service requirements, of the fuel and de-
icing facility corporations are shared pro rata among the contracting airlines. The 11 fuel facility corporations and the one de-
icing facility are not consolidated within our accounts. In the remote event that all other contracting airlines withdraw from the
arrangements and we remained as sole member, we would be responsible for the costs of the fuel facility corporations and
de-icing facility corporation, including debt service requirements. At November 30, 2013, the fuel facility and de-icing
corporations have combined total assets of approximately $495.2 million and liabilities of approximately $456.9 million.
RELATED-PARTY TRANSACTIONS
At December 31, 2013, we had no transactions with related parties as defined in International Accounting Standard
(IAS) 24 –
Related Party Disclosures
, except those pertaining to transactions with key management personnel in the ordinary course of
their employment or directorship agreements.