Westjet 2014 Annual Report Download - page 47

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WestJet Annual Report 2014│ 45
FORWARD-LOOKING INFORMATION
This MD&A offers our assessment of WestJet’s future plans, operations and outlook and contains “forward-looking
information” as defined under applicable Canadian securities legislation, including without limitation: our expectation that the
new pilot agreement will provide us with stability, referred to under the heading
WestJetters
on page 9; our plan to begin
operating four Boeing 767 300ERW series aircraft initially expected to be deployed on routes between Alberta and Hawaii in
order to replace the service currently operated by Thomas Cook, referred to under the heading
Network expansion
on page 9;
our plan to begin daily non-stop flights from Halifax, Nova Scotia to Glasgow, United Kingdom on May 29, 2015, referred to
under the heading
Network expansion
on page 9; our expectation that our transatlantic expansion will provide us with growth
opportunities, referred to under the heading
Network expansion
on page 9; our expectation that WestJet Encore will
commence service from its first Maritime destination beginning on April 15, 2015, referred to under the heading
Network
expansion
on page 9; that our guests will be able to use their own personal electronic device to receive live and stored
content streamed wirelessly from a server on board each Boeing 737 NG aircraft, that we will install USB/110 volt power
outlets in new, slimmer seats on our Boeing 737 NG aircraft to enable guests to charge their devices while using the
entertainment system and that we expect such installations to be complete in 2016, all referred to under the heading
Guest
experience
on page 10; our expectation that our charge for a first checked bag on Econo fares for travel within Canada and
between Canada and the US will provide us with the ability to offer reduced fares and reinforce WestJet's commitment to
being Canada's low-fare leader, referred to under the heading
Guest experience
on page 10; 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 headings
Aircraft fuel
on page 13 and
Fuel risk
on page 30; our estimate of our sensitivity of
fuel costs in US dollars to changes in crude oil of approximately $8.0 million annually for every one US-dollar change per
barrel of WTI crude oil, our estimate of our sensitivity of fuel costs in Canadian dollars to changes in fuel pricing of
approximately $13.0 million for every one-cent change per litre of jet fuel and our estimate of our sensitivity to fluctuations in
foreign exchange rates to be approximately $5.9 million for every one-cent change in the value of the Canadian dollar versus
the US dollar, all referred to under the headings
Aircraft fuel
on page 13; our estimate that every one-cent change in the
value of the Canadian dollar versus the US dollar will have an approximate impact of $8.5 million on our annual unhedged
operating costs, (approximately $5.9 million for fuel and $2.6 million related to other US-dollar-denominated operating
expenses), referred to under the heading
Foreign exchange
on page 16; that we anticipate our annual effective tax rate will
remain in the range of 27 per cent to 28 per cent for 2015, referred to under the heading
Income Taxes
on page 17; that we
expect capital and investing activities to be high in the short term and that during this period we will experience negative free
cash flow which we anticipate managing through our cash and cash equivalents balances and future debt financing, referred
to under the heading
Free cash flow
on page 23; that, over a longer period of time, we expect our operating cash flows to
sufficiently fund all our capital and investing activities, referred to under the heading
Free cash flow
on page 23; 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 23; that the unsecured bond market represents a significant new source of
financing for WestJet which will add considerable flexibility in the funding of our fleet plan going forward, referred to under
the heading
Financing
on page 23; that we expect to receive financing from EDC for up to 80 per cent of the net price for
each Bombardier Q400 aircraft, referred to under the heading
Financing
on page 23; our plan to 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, referred to under the heading
Contractual obligations and commitments
on
page 25; our expectation that there will not be adverse changes to our future ability to access similar or different sources of
liquidity than we historically have, for the purposes of meeting our contractual obligations and commitments, referred to
under the heading
Contractual obligations and commitments
on page 25; 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 25; our expectation that we will deliver the remaining five aircraft to Southwest
in the first half of 2015, referred to under the heading
Fleet
on page 25; that we expect the first scheduled deliveries of the
four 767-300ERW series aircraft to occur in 2015, referred to under the heading
Fleet
on page 25; that we expect to fund our
future operating aircraft lease commitments through cash from operations, referred to under the heading
Off Balance Sheet
Arrangements
on page 27; our confidence in delivering continued profitable results, as referred to under section
Quarterly
dividend policy
on page 28; that all Shares acquired under our normal course issuer bid will be cancelled, referred to under
the heading
Normal course issuer bid
on page 28; that we anticipate revenue and traffic growth to continue in the first
quarter of 2015 and RASM to be flat to slightly negative year over year, referred to under the heading
Outlook
on page 29;