Westjet 2006 Annual Report Download - page 17

152006 | WestJet Annual Report
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF
FINANCIAL RESULTS
2006 AT A GLANCE
We would now like to tell you about
some important features of this airline.
The most important one is our people
(or WestJetters as we like to call them).
You can easily locate them – they’re
the ones with the smiles. The caring
treatment that WestJetters provided to
our guests in 2006 goes a long way to
explain the encouraging results that we
will be outlining in the pages ahead.
FORWARD-LOOKING INFORMATION Certain information set forth in this document, including management’s assessment of WestJet’s future plans and operations, contains forward-
looking statements. These forward looking statements typically contain the words “anticipate, ” “believe, ” “estimate, ” “intend, ” “expect, ” “may, ” “will, ” “should” or other similar terms. By their
nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond WestJet’s control, including the impact of general economic conditions,
changing domestic and international industry conditions, volatility of fuel prices, terrorism, currency fl uctuations, interest rates, competition from other industry participants (including
new entrants, and generally as to capacity fl uctuations and pricing environment), labour matters, government regulation, stock-market volatility and the ability to access suffi cient capital
from internal and external sources. Readers are cautioned that management’s 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. WestJet’s actual results,
performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. Additional information relating to WestJet, including Annual
Information Forms and fi nancial statements, is located on SEDAR at www.sedar.com. To supplement its consolidated fi nancial statements presented in accordance with Canadian generally
accepted accounting principles (GAAP), the Company uses various non-GAAP performance measures, including available seat mile (ASM), cost per available seat mile (CASM) defi ned
as operating expenses divided by available seat miles, revenue per available seat mile (RASM) defi ned as total revenue divided by available seat miles, revenue per revenue passenger
mile (“yield”) defi ned as total revenue divided by revenue passenger miles, operating revenues defi ned as the total of guest revenues, charter and other revenues and interest income,
operating margin defi ned as earnings from operations divided by total revenues, and load factor defi ned as revenue passenger miles divided by available seat miles. These measures are
provided to enhance the user’s overall understanding of the Company’s current fi nancial performance and are included to provide investors and management with an alternative method
for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations and to provide a more consistent basis for comparison
between quarters. These measures are not in accordance with or an alternative for GAAP and may be different from measures used by other companies.
WestJet’s 2006 fi nancial overview tells a compelling story.
Favourable revenue growth, continued cost control and an
increasing demand for our product produced consistently strong
fi nancial results throughout the year. In 2006, we generated an
11.2% operating margin, 6.8 points higher than in 2005, and one
of the best operating margins in the North American airline
industry.
Our strong performance began in the fi rst quarter of 2006, with
profi ts that surpassed any other fi rst quarter in our history. The
momentum generated from the success of this period carried
through to the remaining quarters of the year where we also
realized record earnings. We completed the year with net
earnings of $114.7 million for the full year 2006.
LILLIANE HRNCIRIK
Payroll, Manager
CAROL ST. AMOUR
Payroll, Team Lead