Westjet 2002 Annual Report Download - page 32

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32 2002 WestJet Annual Report
Financial Condition
Dollars &
Sense
WestJet started 2002 with $58.9
million in cash, and finished
with an ample $100.4 million.
At each of the three quarter ends dur-
ing the year, we had in excess of $150
million in cash. The first quarter cash
reserves were boosted by an $82.5 mil-
lion equity financing and a huge surge
in advance bookings by our guests to
beat the April first security tax imple-
mentation date. This resulted in a $32.1
million increase in cash in three months
from the typically low level of advance
bookings at December 31 when
Canadians are not yet thinking about
summer domestic travel plans.
The second quarter saw cash grow
again, as can be expected during this
period. Advance bookings grew by
$18.3 million from April to June due
to our growth and as people planned
their summer travel. Canadians tend
to book their December holiday sea-
son travel plans well in advance, and
understand that booking early will
provide improved choice and better
airfares. At September 30, the end of
our third quarter, cash on hand from
advance bookings remained high at
$59.3 million.
In the fourth quarter, as can be
expected, cash on hand from advance
bookings reduced to its lowest point at
the end of the year to $44.2 million at
December 31, 2002. This was normal
and caused by a seasonal 26% quarter-
ly decline, or $15.1 million, reduction in
advance bookings. Capital cash expen-
ditures in excess of debt activity of $39
million and our $11 million profit share
pay-out to employees in November
further led to this expected reduction
in cash from the year’s high of $165.5
million at September 30, 2002.
WestJet’s working capital ratio was
down slightly in 2002 to 0.8 at Dec-
ember 31 compared with 0.9 at the end
of 2001. This was primarily due to
Karen Daley, Purchaser, Corporate
Supplies and Services, has found exactly
what she’s looking for with WestJet.
Financial Condition