Westjet 2015 Annual Report Download - page 37

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WestJet Annual Report 2015 | 35
Off-Balance Sheet Arrangements and Related-Party Transactions
Aircraft operating leases
We currently have 44 Boeing 737 aircraft under operating leases. Future cash flow commitments in connection with these
aircraft totaled US $466.6 million at December 31, 2015 (December 31, 2014 – US $542.7 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 under the heading “
Liquidity
”.
Fuel and de-icing facility corporations
We are a contracted party to 15 fuel facility arrangements and two 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 15 fuel facility corporations and the two de-
icing facilities 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, 2015, the fuel facility corporations
have combined total assets of approximately $626.3 million and liabilities of approximately $595.9 million.
Effective January 1, 2016, WestJet Encore joined the arrangements for four Canadian fuel facilities: Edmonton, Calgary,
Toronto and Vancouver.
Related-party transactions
At December 31, 2015, 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.