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WestJet Annual Report 2013
Expanding
our success.

Table of contents

  • Page 1
    WestJet Annual Report 2013 Expanding our success.

  • Page 2
    ... success WestJet Encore Fare bundles and Plus product Business transformation initiative Fleet modernization Airline partnerships and new destinations Technology updates Community investment Meet our team WestJetters and our culture Corporate information Board of Directors Executive team Management...

  • Page 3
    2013 Annual Report WestJet had a record year in 2013, marked by many successes. Key achievements included the launch and ongoing growth of our regional airline WestJet Encore, the introduction of fare bundles and the Plus product, reaching the $100-million cost-saving target as part of our business...

  • Page 4
    ... WestJet's world. I am proud to work with a highly committed team dedicated to providing the best possible experience for our guests. WestJetters' passion comes through in everything we do, and this teamwork is the basis for our ongoing success and growth. We undertook many new initiatives in 2013...

  • Page 5
    ... an annualized basis, as we've forecasted. The year 2013 also saw our airline expand as we took delivery of five Boeing 737 Next-Generation (NG) aircraft to end the year with a total of 105 Boeing 737 NGs in our fleet. As well, WestJet Encore took delivery of its first eight Bombardier Q400 NextGen...

  • Page 6
    ... Awards for Sales and Customer Service. In addition, WestJet Vacations was recognized by U.S. Travel and Brand USA at the Premier Chairman's Circle Honors. In September, we were delighted that the WestJet RBC® World Elite MasterCard± received Canada's best travel rewards card rating for 2013 by...

  • Page 7
    ...2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Revenue* (millions of dollars) Available seat miles (millions) Segment guests (thousands) * The results for 2010 to 2013 are presented in accordance with the International Financial Reporting Standards (IFRS...

  • Page 8
    ....8% 18.77 15.53 13.83 9.06 9.12 8.85 8.80 8.45 * The results for 2010 to 2013 are presented in accordance with the International Financial Reporting Standards (IFRS) and the 2009 results are reported under Canadian Generally Accepted Accounting Principles (GAAP). WestJet Annual Report 2013 8

  • Page 9
    ...we added WestJet Encore's service to new communities in Western Canada. We now reach 88 destinations in 20 countries with our fleet of 113 Boeing 737 and Bombardier Q400 aircraft. We successfully introduced WestJet Encore, as well as fare bundles and the Plus product, to the growing number of guests...

  • Page 10
    ... 2013 with a fleet of eight Bombardier Q400 NextGen aircraft serving 15 communities in Canada with 60 daily departures. The expansion of WestJet service with WestJet Encore enhanced the schedule to existing WestJet destinations along with the addition of four new destinations: Nanaimo, Fort St. John...

  • Page 11
    ...Plus product Becoming more relevant by offering more to more customer segments. Fare bundles enable us to keep fares low by only charging guests for the services they want, while at the same time offering high-value services (such as no change fees, priority security screening and advance boarding...

  • Page 12
    ... end of 2014, a full year ahead of plan. The $100 million in savings that we have identified are not an end point. In 2014, we expect to execute on the initiatives we have already identified, while continuing to look for new ways to reduce costs and provide low fares. WestJet Annual Report 2013 12

  • Page 13
    ... Boeing 737 NG 700 aircraft to Southwest Airlines in 2014 and 2015. At the same time, we entered an agreement with Boeing to purchase 10 new Boeing 737 NG 800 aircraft in 2014 and 2015, effectively reducing the average age of WestJet's fleet by approximately one year. WestJet Annual Report 2013...

  • Page 14
    ... now have 10 codeshare relationships with some of the world's premier airlines. Success in 2013 included welcoming WestJet Encore's new communities (Nanaimo, Fort St. John and Terrace, BC, and Brandon, MB) to our network. We introduced service to Dallas, Texas, and Myrtle Beach, South Carolina, and...

  • Page 15
    ... our seat reconfiguration, we are able to offer our guests the benefits of accessing bundled fares through westjet.com. More than one million notices are sent to our guests each month, which are personal notifications with helpful information about their flight booking, reminders to use mobile check...

  • Page 16
    ... on our inaugural flight on the Magic Plane for a Christmas trip to Orlando, FL. We were also overwhelmed by the more than 35 million views our December 2013 Christmas Miracle online video received. We were excited to showcase WestJet's caring spirit across the world. WestJet Annual Report 2013 16

  • Page 17
    ... caring. WestJet's remarkable employee engagement is driven by our culture of caring and fueled by ownership. WestJetters share in our profits, are rewarded through our Owners' Performance Award, and over 85 per cent participate in our employee share purchase program. This means we treat our guests...

  • Page 18
    ... Executive Officer Stock exchange listing Shares in WestJet stock are publicly traded on the Toronto Stock Exchange under the symbols WJA and WJA.A. Investor relations contact information Phone: 1-877-493-7853 Email: [email protected] WestJet headquarters 22 Aerial Place NE Calgary...

  • Page 19
    Management's Discussion and Analysis of Financial Results 2013 WestJet Annual Report 2013 19

  • Page 20
    ... information relating to WestJet, including periodic quarterly and annual reports and Annual Information Forms (AIF), filed with Canadian securities regulatory authorities, is available on SEDAR at sedar.com and our website at westjet.com. Cautionary statement regarding forward-looking information...

  • Page 21
    ... 7.3 per cent, year over year. In 2013, we successfully launched our short-haul regional airline, WestJet Encore; we completed the seat reconfiguration program and completed the commercial launch of fare bundles and the Plus product; we launched a company-wide business transformation initiative and...

  • Page 22
    ... appointment of Fred Cleveland to the position of EVP, Operations effective January 6, 2014. WestJet Encore On June 24, 2013, we successfully launched our short-haul regional airline, WestJet Encore and flew our inaugural flights to Nanaimo and Fort St. John, British Columbia. Since our launch, we...

  • Page 23
    ...'s best travel rewards card for 2013, according to MoneySense magazine. We completed the seat reconfiguration program and the commercial launch of fare bundles and the Plus product to the market. While the fare bundles - Econo, Flex and Plus - provide guests with the ability to pay for options they...

  • Page 24
    ... CASM, excluding fuel and employee profit share (cents)(iii) Fuel consumption (litres) Fuel costs per litre (dollars) Segment guests Average stage length (miles) Utilization (hours) Number of full-time equivalent employees at period end Fleet size at period end (i) (ii) (iii) 2013 3,662,197 372,085...

  • Page 25
    ... in the rate charged for pre-reserved seating year over year and an increase in the number of these related bookings, as well as continued growth in our WestJet RBC MasterCard program. WestJet Vacations continues to be successful in generating additional revenue and supporting WestJet's overall...

  • Page 26
    ... fuel Airport operations Flight operations and navigational charges Sales and distribution Marketing, general and administration Depreciation and amortization Inflight Aircraft leasing Maintenance Employee profit share Total operating expenses Total, excluding fuel and profit share During 2013...

  • Page 27
    ... and benefits Employee share purchase plan Employee profit share Share-based payment plans Presentation on the Consolidated Statement of Earnings: Airport operations Flight operations and navigational charges Sales and distribution Marketing, general and administration Inflight Maintenance Employee...

  • Page 28
    ... the end of 2012, our annual market and merit increases and the provision recorded in the second quarter of 2013 relating to voluntary resignation packages in connection with our migration to a 1:50 flight attendant ratio, as discussed under the section Overview - Business transformation initiative...

  • Page 29
    ... tax) Aircraft leasing 2013 4,187 (29) 4,158 4,752 2012 800 (898) (98) 1,245 The fair value of the foreign exchange forward contracts presented on the consolidated statement of financial position is measured based on the difference between the contracted rate and the current forward price obtained...

  • Page 30
    ... profit share (cents)(ii) Fuel consumption (litres) Fuel costs per litre (dollars) Segment guests Average stage length (miles) Utilization (hours) Number of full-time equivalent employees at period end (i) (ii) Please refer to page 59 of this MD&A for a definition of key operating indicators. Please...

  • Page 31
    ... Aircraft fuel Airport operations Flight operations and navigational charges Sales and distribution Marketing, general and administration Depreciation and amortization Inflight Aircraft leasing Maintenance Employee profit share Total operating expenses Total, excluding fuel and profit share Change...

  • Page 32
    ... based on the best information available to us and includes estimates on maintenance cycle timing, total cost and discount rates. The remaining increase in expense is a result of an increase in routine maintenance events as the fleet continues to grow and mature. WestJet Annual Report 2013...

  • Page 33
    ... Airport and Toronto Pearson International Airport in the fourth quarter of 2013. We continue to place our internal focus and efforts on safely performing on time and ensuring our guests are connected with their bags as soon as possible upon arrival at their destination. WestJet Annual Report 2013...

  • Page 34
    ...cash flow per share, was a favourable impact of a reduced number of shares outstanding from our share buy-back program. At December 31, 2013, restricted cash consisted of $48.5 million (2012 - $43.2 million) for cash held in trust by WestJet Vacations; $8.3 million (2012 - $7.6 million) for security...

  • Page 35
    ... flow for the year ended December 31, 2013, was a negative $107.0 million, as compared to a positive $453.3 million in the prior year. This decrease is due to the significant cash outflows made in the current year related to five Boeing 737 NG 800 aircraft deliveries, eight Q400 aircraft deliveries...

  • Page 36
    ... programming. (ii) Relates to obligations for our confirmed purchased aircraft deliveries for Boeing 737 NGs, Boeing 737 MAXs, Bombardier Q400s and spare engines. Our future US-dollar-denominated purchase commitments, including certain aircraft, are exposed to foreign exchange risk. We plan to meet...

  • Page 37
    ... our financial position, results of operations or cash flows. FLEET During 2013, we took delivery of eight Bombardier Q400 aircraft and five Boeing 737 NG 800 aircraft to end the year with a registered total fleet of 113 aircraft, with an average age of 6.8 years. In May 2013, we announced the sale...

  • Page 38
    ...aircraft between the years 2015 and 2018. Sale of 10 of our oldest Boeing 737 NG 700 aircraft to Southwest Airlines. Subsequent to year end in January 2014, we extended one of the three leases previously scheduled to be returned in 2014 and expect to extend the other two. WestJet Annual Report 2013...

  • Page 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...

  • Page 40
    ... Our dividend policy is reviewed on a quarterly basis in light of our financial position, financing policies, cash flow requirements and other factors deemed relevant. On February 3, 2014, the Board of Directors declared our 2014 first quarter dividend of $0.12 per common voting share and variable...

  • Page 41
    ... Q400 aircraft, allowing us to align our growth with market conditions. In 2013, we added five new Boeing 737 NG 800 series aircraft to our fleet, while WestJet Encore took delivery of eight new Bombardier Q400 aircraft, ending the year with a total of 113 aircraft. In 2014, we will take delivery...

  • Page 42
    ...value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. We are exposed to interest rate fluctuations on short-term investments included in our cash and cash equivalents balance. A change of 50 basis points in the market interest rate would...

  • Page 43
    ...table below presents a maturity analysis of our undiscounted contractual cash flow for our non-derivative and derivative financial liabilities as at December 31, 2013. The analysis is based on foreign exchange and interest rates in effect at the consolidated statement of financial position date, and...

  • Page 44
    ...maintenance costs, a portion of airport operation costs and the hotel cost associated with WestJet Vacation packages. Since our revenues are received primarily in Canadian dollars, we are exposed to fluctuations in the US-dollar exchange rate with respect to these payment obligations. As of the date...

  • Page 45
    ... and successfully establish new markets. The continued integration of WestJet Encore, our short-haul regional airline, could result in unforeseen disruptions, distractions and costs. The third quarter of 2013 marked the first complete quarter of operations for WestJet Encore after its official...

  • Page 46
    ... the travelling community. We are also dependent on General Electric as our sole supplier of aircraft engines on our Boeing 737 NG aircraft, and are dependent on Pratt & Whitney Canada as the sole supplier of aircraft engines for our Bombardier Q400 aircraft and would WestJet Annual Report 2013 46

  • Page 47
    ... harmful to our business. Our maintenance costs will increase as our fleet ages. The average age of our fleet at December 31, 2013, was 6.8 years. Our maintenance costs will increase as our fleet ages and warranties expire. Since we began acquiring our Boeing 737 NG aircraft, 86 aircraft have come...

  • Page 48
    ... adversely impact our access to and cost of financing which could harm our ability to meet our growth strategy. Loss of contracts, changes to our pricing agreements or access to travel suppliers' products and services could have an adverse impact on WestJet Vacations. We depend on third parties to...

  • Page 49
    ...for market share. The airline industry is highly competitive and particularly susceptible to price discounting, since airlines incur only nominal costs to provide services to guests occupying otherwise unsold seats. We primarily compete with a small number of Canadian airlines in our domestic market...

  • Page 50
    ... taxes, interest rates, demographic changes, price levels, special circumstances or events occurring in the locations served, and to external factors such as foreign exchange rates and international political events. A significant portion of an airline's costs, such as labour, aircraft ownership and...

  • Page 51
    ... aircraft utilization, which also negatively affect our business. Our business is dependent on its ability to operate without interruption at a number of key airports, including Toronto Pearson International Airport and Calgary International Airport. An interruption or stoppage in service at a key...

  • Page 52
    ... discount rate used to present value the future cash flows and the lifespan of life-limited parts. These estimates are based on data and information obtained from various sources including the lessor, current maintenance schedules and fleet plans, contracted costs with maintenance service providers...

  • Page 53
    ... information at each reporting date. Current and deferred tax benefit or expense is recognized in the same period as the related transaction or event is recognized in net earnings. (iv) Fair value of equity-settled share-based payments Grants under our equity-settled share-based compensation plans...

  • Page 54
    ...in preparing our audited consolidated financial statements and notes thereto, for the years ended December 31, 2013 and 2012 as its effective date falls within annual periods beginning subsequent to the current reporting period. Proposed standard IFRS 9 - Financial Instruments Effective date January...

  • Page 55
    ... gathered and reported to management, including the chief executive officer (CEO) and the chief financial officer (CFO), on a timely basis so that appropriate decisions can be made regarding public disclosure. An evaluation of our DC&P was conducted, as at December 31, 2013, by management under the...

  • Page 56
    ... the option to renew, referred to under the heading Fleet on page 37 and 38; that we will sell 10 of our oldest Boeing 737 NG aircraft between 2014 and 2015 to Southwest Airlines and that we anticipate a non-cash book loss in the range of $50 million to $60 million, calculated using an exchange rate...

  • Page 57
    ...our expectation of full year 2014 CASM, is based on our current strategic cost savings plan and our analysis of the results to date; Our belief that the 1:50 flight attendant ratio will provide future cost savings, will allow us to compete on an equal basis with other international carriers and will...

  • Page 58
    ... on our financial position, results of operations or cash flow is based on a review of current legal proceedings by management and legal counsel; That we will take delivery of 25 Boeing 737 MAX 7 aircraft and 40 Boeing 737 MAX 8 aircraft between 2017 and 2027 is based on our current fleet plan and...

  • Page 59
    ..., excluding special items, finance costs and implied interest on our off-balance-sheet aircraft leases. Invested capital includes average long-term debt, average finance lease obligations, average shareholders' equity and off-balance-sheet aircraft operating leases. WestJet Annual Report 2013 59

  • Page 60
    ...-term debt(i) Off-balance-sheet aircraft leases(ii) Adjusted debt Total shareholders' equity Add: Hedge reserves Adjusted equity Adjusted debt-to-equity 2013 878,395 1,317,345 2,195,740 1,589,840 (105) 1,589,735 1.38 2012 739,048 1,300,590 2,039,638 1,472,305 5,746 1,478,051 1.38 Change 139,347 16...

  • Page 61
    ... cash flow Weighted average number of shares outstanding - diluted Diluted free cash flow per share 2013 608,147 (639,592) (75,580) (107,025) 132,074,002 (0.81) 2012 722,624 (218,116) (51,191) 453,317 135,964,118 3.33 Change (114,477) (421,476) (24,389) (560,342) (3,890,116) (124.3%) WestJet Annual...

  • Page 62
    Consolidated Financial Statements and Notes For the years ended December 31, 2013 and 2012 WestJet Annual Report 2013 62

  • Page 63
    ... for financial reporting and internal control, and reviewing 2 8 ) statements. The Board carries out these responsibilities principally through its Audit Committee. 60 1 ) The Audit Committee of the Board of Directors, composed of independent Directors, meets regularly with management, the internal...

  • Page 64
    ...Airlines Ltd. at December 31, 2013 and December 31, 2012, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards. Chartered Accountants February 3, 2014 Calgary, Canada WestJet Annual Report...

  • Page 65
    ... Statement of Earnings For the years ended December 31 (Stated in thousands of Canadian dollars, except per share amounts) 85 Note 7 9 6 2013 Revenue: Guest Other Operating expenses: Aircraft fuel Airport operations Flight operations and navigational charges Sales and distribution Marketing...

  • Page 66
    ... Advance ticket sales Non-refundable guest credits Current portion of maintenance provisions Current portion of long-term debt Non-current liabilities: Maintenance provisions Long-term debt Other liabilities Deferred income tax Total liabilities Shareholders' equity: Share capital Equity reserves...

  • Page 67
    ...foreign exchange on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year The accompanying notes are an integral part of the consolidated financial statements. 5 1,256,005 WestJet Annual Report 2013 67

  • Page 68
    Consolidated Statement of Changes in Equity For the years ended December 31 (Stated in thousands of Canadian dollars) 85 7 Note 4 46 22  3 5 12 0 9 6 2013 0 1 0 2012 Share capital: Balance, beginning of year Issuance of shares pursuant to compensation plans Shares repurchased 3) 73 6 614,...

  • Page 69
    ...taxes of of of of $(2,347) (2012 - $904). $1,238 (2012 - $319). $(183) (2012 - $199). $(275) (2012 - $(108)). The accompanying notes are an integral part of the consolidated financial statements. 47 2 60 4 8 1 7) ) ) 47 2) 0) 5) 2 ) 4 6) 1) 7 8 3 7) 6) 9) ) ) ) WestJet Annual Report 2013 69

  • Page 70
    ... services and products are provided to the guest. Ancillary revenues include items such as fees associated with guest itinerary changes or cancellations, baggage fees, buy-on-board sales, pre-reserved seating fees and ancillary revenues from the WestJet Rewards Program. WestJet Annual Report 2013...

  • Page 71
    ... accounting policies (continued) (d) Revenue recognition (continued) (iii) WestJet Rewards Program 7 4 46 22 The Corporation has a rewards program that allows guests to accumulate credits based on their WestJet travel spend to be used  5 5) towards future flights and vacation packages. Revenue...

  • Page 72
    ... 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 6 1. Statement of significant accounting policies (continued) (e) Financial instruments (continued) 7 4 46  Other financial liabilities are measured at amortized cost...

  • Page 73
    ... applicable, are reviewed annually 60 1 ) against prevailing market rates at the consolidated statement of financial position date. Major overhaul expenditures are capitalized and depreciated over the expected life between overhauls. All other costs relating to the maintenance of fleet assets are...

  • Page 74
    ... to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 0 6 3) 73 6 2 1. Significant accounting policies (continued) (m) Maintenance (i) Provisions...

  • Page 75
    ...(q) Share-based payment plans Equity-settled share-based payments to employees are measured at the fair value of the equity instrument granted. An option 47 date of grant. The 4 market value of the 7) valuation model is used to fair value stock options issued to employees on the Corporation's voting...

  • Page 76
    Notes to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 6 1. Statement of significant accounting policies (continued) (s) Critical ...

  • Page 77
    ...the discount rate used s to (vii) Maintenance provisions present value the future cash flows and the lifespan of life-limited parts. These estimates are based on data and information obtained from various sources including the lessor, current maintenance schedules and fleet plans, contracted costs...

  • Page 78
    ... the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 6 3) 2. New accounting standards and interpretations 7 4 1 standards that have 73 The IASB and International Financial Reporting Interpretations...

  • Page 79
    ... shares, pay dividends and adjust current and projected debt levels. 1 In the management of capital, the Corporation includes shareholders' equity (excluding hedge reserves), 0 6 long-term debt, cash 84 and cash equivalents and the Corporation's off-balance-sheet obligations related to its aircraft...

  • Page 80
    ... Sales and distribution Marketing, general and administration Inflight Maintenance Employee profit share (i) 47 2 60 Classified in the consolidated statement of earnings based on the related nature of the service performed. 5. Cash and cash equivalents Bank balances(i) Short-term investments...

  • Page 81
    Notes to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 December 31 6 7. Property and equipment January 1 2013 1,477,388 57,115 101,709 ...

  • Page 82
    Notes to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 December 31 2013 6 25,833 2 16,372 5) 5,785 12 10,701 5 84 58,691 s 8. ...

  • Page 83
    ...-series aircraft. Eight individual term loans, amortized over a 12-year term, repayable in quarterly principal instalments totaling $2,231, at an effective weighted average fixed rate of 4.02%, maturing in 2025. Each term loan is secured by one Q400 aircraft. (ii) (iii) WestJet Annual Report 2013...

  • Page 84
    ... to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 0 5 1 0 6 6 3) 73 6 10. Long-term debt (continued) 7 46 4 Future scheduled repayments of...

  • Page 85
    Notes to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 6 11. Income taxes (continued) (b) Deferred tax Components of the net deferred ...

  • Page 86
    ... market price over the average book value, including transaction costs, was $90,297 and was charged to retained earnings. (c) Stock option plan The Corporation has a stock option plan, whereby at December 31, 2013, 9,749,555 (2012 - 10,797,269) voting shares were reserved for issuance to officers...

  • Page 87
    ... Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 6 12. Share capital (continued) (c) Stock option plan (continued) 7 4 46 Changes in the number...

  • Page 88
    ... Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 85 9 0 1 0 6 3) 73 6 12. Share capital (continued) (d) Key employee plan 7 4 46 The Corporation has a key employee plan...

  • Page 89
    ... payment expense for the Corporation's equity-based plans and where the amounts are presented on the consolidated statement of earnings: 22 0 2 2013 Stock option plan Key employee plan Executive share unit plan Total share-based payment expense Flight operations and navigational charges Marketing...

  • Page 90
    ...: Employee stock options Key employee - RSUs Executive - RSUs Executive - PSUs Weighted average number of shares outstanding - diluted 2013 0 130,974,532 5 1 454,574 0 380,470 6 129,077 135,349 132,074,002 2012 2 316,371,216 5) 12 216,297 5 120,007 84 321,219 s 05,110 316,051,331 For the year...

  • Page 91
    ...): Cash and cash equivalents Foreign exchange derivatives Interest rate derivatives Deposits During the years ended December 31, 2013 and 2012, there were no transfers between level 1, level 2 and level 3 financial assets and liabilities measured at fair value. WestJet Annual Report 2013 91

  • Page 92
    ...value or future cash flows of a financial instrument will fluctuate due to changes in m arket prices. The Corporation's significant market risks relate to fuel price risk, foreign exchange risk and interest rate risk. (i) Fuel price risk The airline industry is inherently dependent upon jet fuel to...

  • Page 93
    ... presentation Aircraft leasing 2013 4,752 2012 1,245 Realized gain A one-cent change in the US-dollar exchange rate for the year ended December 31, 2013, would impact OCI, net of taxes, by $1,192 (2012 - $1,157) as a result of the Corporation's foreign exchange derivatives. WestJet Annual Report...

  • Page 94
    ...: Statement presentation Finance cost 2013 (1,058) 2012 (418) Realized loss A change of 50 basis points in market interest rates at December 31, 2013, would impact OCI, net of taxes, by $4,926 (2012 - $826) as a result of the Corporation's interest rate derivatives. WestJet Annual Report 2013 94

  • Page 95
    ... presents a maturity analysis of the Corporation's undiscounted contractual cash flows for its non -derivative and derivative financial liabilities at December 31, 2013. The analysis is based on foreign exchange and interest rates in effect at the consolidated statement of financial position date...

  • Page 96
    ... December 31, 2013, the Corporation has a revolving letter of credit facility with a Canadian Chartered Bank totaling $30,000 2 8 ) (2012 - $30,000). The facility requires funds to be assigned and held in cash security for the full value of letters of guarantee ) 3 ) WestJet Annual Report 2013 96

  • Page 97
    ...profit share, cash compensation paid to the Board of Directors and payments under the Corporation's short-term incentive plan to Senior Executive Officers. Includes amounts expensed pursuant to the stock option plan, executive share unit plan and deferred share unit plan. WestJet Annual Report 2013...

  • Page 98
    ...to Consolidated Financial Statements As at and for the years ended December 31, 2013 and 2012 (Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts) 19. Additional financial information (a) Assets Accounts receivable: Trade and industry(i) Other Allowance(ii...