Westjet 2015 Annual Report Download - page 56

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WestJet Annual Report 2015 | 54
expire at the end of 2018, referred to under the heading
Financing
on page 31; our expectation that our credit rating will
provide WestJet with a range of public and private debt financing options in the future, referred to under the heading
Financing
on page 31; that we do not expect adverse changes to our future ability to access similar or other generally
available sources of liquidity, referred to under the heading
Contractual obligations and commitments
on page 33; that the
future outcome of our current legal proceedings and claims will not have a material effect upon our financial position, results
of operations or cash flows, referred to under the heading
Contingencies
on page 33; our expectations with respect to future
aircraft acquisitions and dispositions including our contractual expectations and plans related thereto, described under the
heading
Fleet
on page 34; our expectation that we will fund future cash flow commitments connected to aircraft under
operating leases through funds from operations, referred to under the heading
Off-balance sheet arrangements and related
parties
on page 35; our confidence in delivering continued profitable results, as referred to under the heading
Quarterly
dividend policy
on page 36; our normal course issuer bid to purchase up to 6,000,000 Shares during the period of May 13,
2015 to May 12, 2016 or until such time as the bid is completed or terminated at our option, where any Shares purchased will
be purchased on the open market through the facilities of the TSX at the prevailing market price at the time of the transaction
and any Shares acquired will be cancelled, described under the heading
Normal course issuer bid
on page 36; that we will
continue to monitor and adjust to movements in fuel prices and may re-visit our hedging strategy as changing markets and
competitive conditions warrant, referred to under the heading
Fuel risk
on page 37; that we do not anticipate the early
adoption of the new accounting standards, referred to under the heading
Future accounting pronouncements
on page 51;
there were no changes in our ICFR during the year ended December 31, 2015 that are reasonably likely to materially affect
our ICFR, referred to under the heading
Internal control over financial reporting
on page 52.
Readers are cautioned that our expectations, estimates, projections and assumptions used in the preparation of such
information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue
reliance should not be placed on forward-looking statements. With respect to forward-looking information contained within
this MD&A, we have made the following key assumptions:
• Our expectation that we will complete the installation of
the new inflight entertainment system is based on the
current installation schedule;
• Our expectation that we will continue to strategically
grow our airline through new and increased frequency
of service across our scheduled network is based on our
current network and strategic plan;
• Our expectations of system-wide and domestic capacity
for the first quarter of 2016 and full-year 2016, are
based on our network plans and future aircraft
deliveries;
• Our expectation of first quarter 2016 RASM is based on
our current demand forecast;
• Our expectation of CASM, excluding fuel and employee
profit share for the first quarter of 2016 and the full-
year 2016 is based on our first quarter forecast and
2016 budget;
• Our expectation of fuel costs for the first quarter of
2016 is based on current forecasted jet fuel prices of US
and an average foreign exchange rate;
• Our expectation of net capital expenditures for the full-
year 2016 is based on our 2016 capital budget and
contractual commitments;
• Our expectation that we will continue to mitigate the
risk of movements in fuel prices is based on our risk
management policies and ongoing cost monitoring;
• Our estimated sensitivity to fuel costs and changes in
fuel prices is based on our fuel consumption for our
existing schedule and historical fuel burn, as well as a
Canadian-US dollar exchange rate assumption based on
the current exchange rate;
• Our estimated sensitivity to the change in value of the
Canadian dollar versus the US dollar is based on
forecasted of unhedged US dollar operating expenses;
• Our expected annual effective tax rate for 2016 is based
on current legislation, and expectations about the timing
of when temporary differences between accounting and
tax bases will occur;
• Our belief that we will receive financing from EDC is
based on the assumption that our agreement with EDC
will remain active and that EDC will be able to provide
that financing;
• Our expectation that we will meet our contractual
obligations and commitments through our current cash
and cash equivalents balance combined with cash flows
from operations and future sources of aircraft financing
is based on the assumptions that we will successfully
execute on our current strategic plan, our assessment
of our financial position, our credit rating remains in