Westjet 2013 Annual Report Download - page 20

WestJet Annual Report 2013 20
CONTENTS
Annual Overview ........................................................ 21
2013 Results of Operations ......................................... 25
2013 Fourth Quarter Results of Operations ................... 30
Summary of Quarterly Results ..................................... 33
Guest Experience ....................................................... 33
Liquidity and Capital Resources ................................... 34
Fleet ......................................................................... 37
Off Balance Sheet Arrangements ................................. 39
Related Party Transactions .......................................... 39
Share Capital ............................................................. 40
Outlook ..................................................................... 41
Financial Instruments and Risk Management ................ 42
Risks and Uncertainties ............................................... 44
Accounting ................................................................ 51
Controls and Procedures ............................................. 55
Forward-Looking Information ...................................... 56
Definition of Key Operating Indicators .......................... 59
Non-GAAP and Additional GAAP Measures .................... 59
ADVISORIES
The following Management’s Discussion and Analysis of Financial Results (MD&A), dated February 3, 2014, should be read in conjunction with
the cautionary statement regarding forward-looking information below, as well as the audited consolidated financial statements and notes
thereto, for the years ended December 31, 2013 and 2012. The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). For periods prior to January 1, 2010, we prepared our financial statements in accordance
with Canadian generally accepted accounting principles as defined in Part V of the Canadian Institute of Chartered Accountant’s Handbook
(Previous GAAP). For additional information concerning the impact upon our financial statements for periods prior to January 1, 2011 of
significant differences between IFRS as utilized in preparing our financial statements and Previous GAAP, please see note 22 to our financial
statements for the years ended December 31, 2011 and 2010, which is incorporated by reference herein. All amounts in the following MD&A
are in Canadian dollars unless otherwise stated. References to “WestJet,” “the Corporation,” “the Company,” “we,” “us” or “our” mean
WestJet Airlines Ltd., its subsidiaries and consolidated structured entities, unless the context otherwise requires. Additional 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
This MD&A contains “forward-looking information” as defined under applicable Canadian securities legislation. This forward-looking
information typically contains the words “anticipate,” “believe,” “estimate,” “intend,” “expect,” “may,” “will,” “should,” “potential,” “plan,”
“project” or other similar terms. Our actual results, performance or achievements could differ materially from those expressed in, or implied
by, this forward-looking information. We can give no assurance that any of the events anticipated will transpire or occur or, if any of them do,
what benefits or costs we will derive from them. By its nature, forward-looking information is subject to numerous risks and uncertainties
including, but not limited to, the impact of general economic conditions, changing domestic and international airline industry conditions,
volatility of fuel prices, terrorism, pandemics, currency fluctuations, interest rates, competition from other airline industry participants
(including new entrants, capacity fluctuations and the pricing environment), labour matters, government regulations, stock market volatility,
the ability to access sufficient capital from internal and external sources, and additional risk factors discussed in this MD&A under the heading
“Risks and Uncertainties” and in other documents we file from time to time with securities regulatory authorities, which are available on
SEDAR at sedar.com or, upon request, without charge from us.
The disclosure found under the heading “Outlook” in this MD&A, including the guidance summary for the three months ended March 31, 2014
and the year ended December 31, 2014 may contain forward-looking information that constitutes a financial outlook. The forward-looking
information, including any financial outlook, contained in this MD&A, is provided to assist investors in understanding our assessment of
WestJet’s future plans, operations and expected results. The forward-looking information, including without limitation, the disclosure found
under the heading “Outlook”, contained in this MD&A may not be appropriate for other purposes and is expressly qualified by this cautionary
statement. Please refer to page 56 of this MD&A for further information on our forward-looking information including assumptions and
estimates used in its development. Our assumptions and estimates relating to the forward-looking information referred to above are updated
in conjunction with filing our quarterly and annual MD&A and, except as required by law, we do not undertake to update any other forward-
looking information.
Non-GAAP and additional GAAP measures
Certain measures in this MD&A do not have any standardized meaning as prescribed by generally accepted accounting principles (GAAP) and,
therefore, are considered non-GAAP measures. These measures are provided to enhance the reader’s overall understanding of our financial
performance or financial condition. They are included to provide investors and management with an alternative method for assessing our
operating results in a manner that is focused on the performance of our ongoing operations and to provide a more consistent basis for
comparison between periods. These measures are not in accordance with, or an alternative to, GAAP and do not have standardized meanings.
Therefore, they may not be comparable to similar measures presented by other entities.
Please refer to page 59 of this MD&A for a reconciliation of non-GAAP measures, including cost per available seat mile (CASM), excluding fuel
and employee profit share; return on invested capital (ROIC); free cash flow; free cash flow per share; and diluted operating cash flow per
share and for a reconciliation of additional GAAP measures, including adjusted debt-to-equity; adjusted net debt to earnings before interest,
taxes, depreciation and aircraft rent (EBITDAR).
Definitions
Various terms used throughout this MD&A are defined at page 59 under the title “Definition of key operating indicators”.