Form 6-K WESTPORT INNOVATIONS For: Mar 27
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2015
Commission File Number: 001-34152
WESTPORT INNOVATIONS INC.
(Translation of registrant's name into English)
1750 West 75th Avenue, Suite 101, Vancouver, British Columbia, Canada, V6P 6G2
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
☐ Form 20-F ☒ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No ☒
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
EXHIBIT INDEX
Exhibit | Description | |
99.1 | Letter to Shareholders | |
99.2 | Sustainability Report | |
99.3* | Management’s Discussion and Analysis for the twelve months ended December 31, 2014 | |
99.4 | Management’s Report to Shareholders | |
99.5* | Audited consolidated financial statements of the Company and notes thereto for the twelve months ended December 31, 2014 | |
99.6 | Shareholder Information |
* Previously filed with our Annual Report on Form 40-F on March 9, 2015
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Westport Innovations Inc. | |||
(Registrant) | |||
Date: March 27, 2015 | By: | /s/ Ashoka Achuthan | |
Ashoka Achuthan Chief Financial Officer |
Exhibit 99.1
Letter to Shareholders
To our shareholders,
2014 was a transformational year. Despite the sudden and dramatic decline in global oil prices in the second half of 2014, Westport’s total segments revenue exceeded $1 billion. This is a significant milestone for Westport and the natural gas engine and vehicle industry, cementing natural gas as a global industry. While the volatility has created challenges in some markets and segments, in most parts of the world, the favourable price differential between natural gas and conventional fuels remains intact.
We saw solid growth in our joint ventures in 2014. Cummins Westport Inc. (CWI) reported good revenue growth with continued customer commitments to core applications such as transit, refuse trucks, and urban trucking. Our warranty accrual challenges that dampened results for the first nine months have been addressed, resulting in strong profitability. In China, we continued to see remarkable growth. Our Weichai Westport Inc. (WWI) joint venture achieved sales of over 50,000 engines for the year, which is a spectacular milestone. When combined, our joint ventures captured about 2.7% market share of the entire global medium and heavy-duty engine market last year. As a result, we can conclude that natural gas is now a material and important segment of the global engine and vehicle market.
We spent the last 10 years getting basic products into the market to establish measurable scale. The next 10 years will be about delivering the next generation of products to those established customers, as well as new ones. Our major investments in WestportTM HPDI 2.0 and the enhanced spark ignition technology are expected to deliver improved performance characteristics and lower costs for customers. We expect our capital-light business model to deliver superior returns for our shareholders and allow us to scale up quickly as the market grows.
In 2015, we expect the light-duty market, where we primarily are looking to displace gasoline vehicles, to undergo change driven by two factors. First, gasoline engines are quickly moving to advanced direct injection systems with breakthrough performance and fuel economy. Therefore, traditional natural gas conversion systems will eventually become obsolete. In fact, we recently just announced our new combustion technology in Volvo Car Company's new Drive-E powertrain bi-fuel engine. Volvo Cars is the first original equipment manufacturer (OEM) to feature the new Westport system, which will be available on the Volvo V60 and V70 2016 models. Second, the sudden competitive price pressure due to oil price and currency volatility, combined with this technology shift, will put great pressure on this traditionally fragmented industry. Many suppliers are already feeling the pressure and we believe 2015 will see significant consolidation and alliances.
We have already started to see indications of a streamlining industry. The threat of almost all the competitive products and development activities in this space has dropped away in the face of market uncertainty along with the reality that performance expectations and cost of development have risen substantially since the early days of aftermarket conversions. This has left Westport as the stand-out global go-to for alternative fuel technology that can meet the expectations of advanced global OEMs. With the competitive landscape tightening, Westport too, can now be more selective about where to invest. It gives us the flexibility to wait for partners to develop their confidence to invest alongside us in new products.
1 |
In 2014, we took significant steps to advance our business model as we shift from market creation and product demonstrations to full commercial operation and profitability. Given the uncertainty of the energy market and global economy, we took immediate actions to reprioritize investment programs, consolidate facilities, and restructure businesses to focus on lean operations, reducing our combined operating expenses by over $23 million.
We have refined our investment programs for 2015 and expect Corporate and Technology Investments’ adjusted EBITDA results to improve by approximately 40% without materially affecting our long-term product portfolio. For example, we have made significant investments in proof-of-concept and market development products in our off-road applications including mining, rail, and marine applications over the past three years. We have sufficiently proved our point and we now have royalty agreements in place with key market participants. Therefore, we no longer need anything like the past investment rate in 2015 to continue to be well positioned as this industry develops.
We remain focused on improving our operational adjusted EBITDA contributions, although the path to breakeven for Westport has stronger headwinds now than when it was originally proposed in 2013. Nevertheless, we are controlling what we can while looking for opportunities for increased sales.
Looking ahead to 2015, we will focus on four key components of Westport’s strategy to drive our path to profitability:
1. | We will continue to invest with committed OEM partners in commercial products for the next decade that contain strong technology content including WestportTM HPDI 2.0 and enhanced spark ignited direct injection, but defer investments with uncertain market timing or commercialization risk. |
2. | We will continue to rationalize and consolidate the Westport product portfolio for cost reduction and margin improvement, ensure customer value with leading price/performance, and achieve full system sales, creating and extracting value beyond individual component sales. |
3. | We will look at non-core asset sales and are confident that our portfolio of long-term investments can be supported from internal re-allocation and OEM partner co-investment. |
4. | We will continue to drive cost efficiencies and reduce global overhead expenses. |
Westport is well positioned with industry-leading technology and especially industry experience. We look forward to continued development of our global business in 2015 and continued progress toward our vision to transition from petroleum-based fuels to clean, inexpensive natural gas.
2 |
On behalf of our Board of Directors and management team, and employees around the world, thank you for your continued interest and support of Westport.
Sincerely,
/s/ David R. Demers | |
David R. Demers | |
Chief Executive Officer | |
/s/ Ashoka Achuthan | |
Ashoka Achuthan | |
Chief Financial Officer |
3 |
Exhibit 99.2
Sustainability Report
We are pleased to present our 2014 Sustainability Report; the annual update of Westport’s progress and challenges in advancing our vision of economic, social and environmental sustainability. Rapid shifts in global energy markets have underscored that significant changes are rarely without turbulence, but we end the year with increased confidence and measured evidence of the strength of the transition underway to a sustainable energy future.
Sustainability is at the core of our business
We believe that business success isn't solely measured “company to customer” but through our relationships with a range of stakeholders. As a clean technology leader, we recognize the responsibility we have to our employees, customers, partners, shareholders, suppliers, governments, the natural environment, academic institutions, non-government organizations (NGOs), and the neighbourhoods in which we live and work.
The decarbonisation of the transport sector requires vision, leadership and boldness. Governments around the world are recognizing the economic, energy security, environmental, and job creation benefits of natural gas vehicles. Environmental NGOs want to learn more about how reducing the carbon intensity of fuels has the potential to meaningfully reduce emissions from heavy-duty vehicles. Our partners see a tremendous opportunity to revolutionize how we move freight and people. Westport’s ongoing technological innovation and drive to catalyze real change will continue to transform the transportation sector.
Collaboration in 2014:
Business for Social Responsibility Future of Fuels
Westport has been a member of Business for Social Responsibility (BSR) since 2012 and was a founding member of the Future of Fuels working group. Future of Fuels helps companies understand the impacts of transportation fuel and how they can work together to create a system that is sustainable, resilient, and affordable.
The mission of Future of Fuels is to identify and promote transportation fuel pathways that enhance the sustainability and availability of emerging alternative fuel choices. The working group’s objectives are to accelerate low carbon development, improve the sustainability of all fuels, and build better public dialogue and understanding.
Future of Fuels has published reports on transitioning to low-carbon fuels and the outlook for mitigating the impacts of the North American trucking industry, and in 2015 will be launching a “Fuel Tool” application to directly support fleet managers’ procurement decisions.
Carbon Disclosure Project
The Carbon Disclosure Project (CDP) is an international, not-for-profit organization providing the only global system for companies to measure, disclose, manage and share environmental performance information. It works with 822 investors with US$95 trillion in assets and holds the largest collection of self-reported corporate climate data.1
Westport prepared its first CDP report in 2012 and has committed to file annual reports detailing our environmental performance in accordance with the CDP methodology. Our 2014 report is available for viewing at the CDP website.2 As a clean technology leader, we recognize that we must account for and reduce the environmental impact of natural gas engines and vehicles. Our work with the CDP is a major step in expanding the reach and rigour of Westport’s sustainability transparency.
University of California (Davis) NextSTEPS
The NextSTEPS program is a four-year multidisciplinary research consortium working to advance alternative transportation that operates within the Institute of Transportation Studies at the University of California (Davis). The goal of NextSTEPS is to generate new insights about the transition to a sustainable transportation energy future and to disseminate that knowledge effectively to decision-makers in the public and private sectors. NextSTEPS encompasses interdisciplinary research on electric vehicles, biofuels, hydrogen fuel cells and efficiency improvements to gasoline and diesel engines. Natural gas was added as a dedicated research stream in 2012.
1 | https://www.cdp.net/en-US/Pages/About-Us.aspx |
2 | Registration at no cost is required to view corporate reports filed on The Carbon Disclosure Project website. |
The NextSTEPS members represent 23 other government and corporate partners, including the U.S. Department of Transportation and major automotive Original Equipment Manufacturers (OEMs) such as Ford, GM, Volkswagen and Toyota. The work of this program to develop viable and defensible analyses of the potential contribution of advanced and alternative transportation technologies directly supports Westport’s business strategy.
In 2014, NextSTEPS devoted extra attention to the rapidly developing Chinese market for natural gas vehicles, holding a workshop in Beijing that brought together 60 participants including Chinese policy makers, automotive and oil industry leaders, and leading academic experts and analysts in natural gas and transportation. The workshop resulted in an improved regional understanding of the Chinese NGV market and delivered timely analysis to inform industry and government planning.
Environmental Defense Fund Pump to Wheels Methane Leakage Study
The Environmental Defense Fund (EDF) has a history of cross-sector collaboration and balanced environmental analysis. In 2012, the EDF initiated a series of studies with academic and industry partners to better understand the source and quantity of methane emissions along the natural gas supply chain.3 Westport is a core supporting member of a multi-partner study initiated by EDF and conducted by the Center for Alternative Fuels, Engines and Emission (CAFEE) at West Virginia University.
The research study will measure fugitive emissions of methane from various elements of the natural gas value chain for commercial and heavy duty on-road transportation. In 2014, other modules of the broad series of studies - including production and distribution studies - published their findings. Westport anticipates the module covering natural gas vehicle and fuel systems will be published in 2015.
Westport is participating in the EDF study to advance understanding of the greenhouse gas emission reduction benefits of commercial and heavy duty natural gas vehicles and fueling stations. Westport's market and environmental leadership position demands that we lead by example by participating in research that will help understand the emissions implications of the shift to natural gas.
3 | The five study modules are production, gathering lines and processing facilities, pipelines and storage, local distribution, and commercial trucks and refueling stations. The first peer-reviewed study has now been published in the journal Proceedings of the National Academy of Science and is available online at http://www.pnas.org/content/110/44/17768. |
Report Approach and Scope
This is our sixth published sustainability report, documenting our strategy, programs and achievements related to the environment, the safety of people and products, our employees, and our community. The scope of this report relates only to our operations in British Columbia, Canada. We have identified a need to extend the scope to encompass all of our global operations and are working to establish processes to achieve this goal. While the majority of our engine testing and development occurs in Vancouver, we recognize that we must tell a more complete story about our activities, success and challenges. This report discloses data from January to December 2014. Historical data from the past four fiscal years have been included for comparative purposes, where appropriate.
Report Content
This report has been developed in accordance with the Global Reporting Initiative (GRI) G3 standard reporting guidelines. The GRI is an independent institution that provides a standard framework for sustainability reporting across companies and industries. We have applied the principles of materiality and stakeholder inclusiveness as recommended by the GRI to assess the relevance of sustainability priorities to Westport and our stakeholders.
Westport has self-declared this report to correspond to application level B in the six-level grid of the GRI G3 guidelines. Application Level B requires us to disclose our performance on at least twenty core economic, social and environmental indicators.
Determining Material Issues
The intent of the new GRI G4 materiality review process is to ensure that content included in our annual sustainability report represents the key environmental, economic, and social issues that are most critical to our stakeholders.
In 2014 we undertook a review of our process for determining materiality in accordance with the framework of the new G4 reporting guidelines. We reviewed our existing mechanisms for gathering stakeholder feedback and sought additional input where possible to organize our findings using the prioritization matrix system recommended by GRI. We began with a simple, internally focused process to ensure that we will satisfy the GRI’s recommendation that all organizations comply with the G4 guidelines by December 31, 2015.
GRI Indicator Index
Legend | ||
AA1 | we report on this indicator | |
BB2 | we partially report on this indicator | |
Economic Performance | Location / Section | |
EC1 | Direct economic value generated and distributed | 2014 Audited Financial Statements |
EC2 | Financial implications and risks and opportunities of climate change | Climate Change Risks and Opportunities |
Social Performance | ||
HR3 | Employee training on human rights | Human Rights |
LA1 | Total workforce by employment type, employment contract, and region | Employee |
LA3 | Benefits provided to full time, part-time and temporary employees | Employee |
LA6 | Workforce represented in Occupational Health and Safety committees | Health and Safety |
LA7 | Rates of injury, occupational disease, lost days, and work-related fatalities | Health and Safety |
SO1 | Nature, scope and effectiveness of programs to manage impact on communities | Community Impacts |
SO2 | Percentage and total number of business units analyzed for risks related to corruption | Anti-Corruption Efforts |
SO3 | Percentage of employees trained on anti-corruption policies and procedures | Anti-Corruption Efforts |
PR1 | Life cycle stages: health and safety impacts of products - assessed for improvements | Product Responsibility |
Total number of incidents of non-compliance with regulations and voluntary codes | ||
PR2 | concerning health and safety impacts of products | Health and Safety |
Environment Performance | ||
EN3 | Direct energy consumption by primary energy source | Energy |
EN4 | Indirect energy consumption by primary source | Energy |
EN5 | Energy saved due to conservation and efficiency efforts | Energy |
EN6 | Initiatives to provide energy-efficient or renewable based products and reductions | Energy |
EN7 | Initiatives to reduce indirect energy consumption and reduction achieved | Energy |
EN8 | Total water withdrawal by source | Water |
EN16 | Total direct and indirect greenhouse gas emissions | Greenhouse Gas Emissions |
EN18 | Initiatives to reduce GHG emissions and reductions achieved | Greenhouse Gas Emissions |
EN22 | Total amount of waste by type and disposal method | Waste Generation and Diversion |
EN23 | Total number and volume of significant spills | Waste Generation and Diversion |
EN28 | Value of fines and non-monetary sanctions for environment non-compliance | Environmental Compliance |
Social Performance Indicators
Human Rights
Westport is dedicated to preserving all fundamental and universally recognized human rights as outlined by the United Nations and the International Labour Organization. Our commitment is stated and reinforced by our Code of Conduct which is reviewed and signed annually by each of our employees.
Total Workforce
Westport is committed to providing a healthy work environment, defined by respectful relationships, professional development and advancement potential and an execution-focused culture to capitalize on business opportunities. We are dedicated to ensuring that Westport remains a desirable employer in all our locations. A similar benefits package is offered to both full-time and part-time employees.4
As of Dec 31, 2014 | Full Time | Part Time(a) | Contractor | Total | |||
Argentina | 23 | - | 3 | 26 | |||
Australia | 26 | 1 | 4 | 31 | |||
Canada | 325 | 7 | 20 | 352 | |||
China | 24 | - | 4 | 28 | |||
France | 1 | - | 1 | 2 | |||
India | 1 | - | - | 1 | |||
Italy | 254 | 24 | 1 | 279 | |||
Korea | 3 | - | - | 3 | |||
Sweden | 10 | - | 8 | 18 | |||
United Kingdom | 1 | 0 | 0 | 1 | |||
United States | 85 | - | 29 | 114 | |||
Netherlands(b) | 53 | 7 | - | 60 | |||
Total | 806 | 39 | 70 | 915 |
(a) | Part Time includes co-ops and interns |
(b) | Netherlands headcount is as of January 22, 2015. Headcount as of December 31, 2014 was not available. |
As the demand for sustainable transportation grows worldwide, Westport has continued to maintain its global presence. Our products have reached customers in more than 19 countries and being able to support these markets is essential to our future success.
Health and Safety
The health and safety of our employees, facilities, and communities is an integral part of Westport’s operations. When gauging world-class safety performance, recordable injury rates and lost-time injury rates are statistical, comparative industry measures. Our results are indicative of our ongoing and significant commitment to injury prevention, risk mitigation, regulatory compliance and continuous safety improvement.
4 | Part-time employees must work at least three days per week to be eligible for the same benefits package as full-time employees. Casual employees or contractors are not eligible for benefits. |
Our Health and Safety Committee members are champions for workplace safety. Westport maintains a Health and Safety Committee in British Columbia or approximately one Committee for every 352 employees. Our Committees are made up of cross-functional management and employee representatives who advise and recommend action on any unresolved workplace health and safety issues brought to them.
Safety Incidents (unaudited) | Dec-14 | Dec-13 | Dec-12 | Dec-11 | Mar-10 |
Recordable injury frequency | 3 | 5 | 2 | 1 | 2 |
Recordable injury rate(a) | 0.96 | 1.22 | 0.46 | 0.31 | 0.82 |
Lost time injury frequency | 1 | 2 | 1 | 1 | 1 |
Lost time injury rate(b) | 0.32 | 0.49 | 0.23 | 0.31 | 0.41 |
(a) | The recordable injury incident rate is the annualized rate of occupational injuries and illness per 100 employees. It is a calculation of the number of injuries x 200,000/employee hours worked. First aid classified injuries are not included. |
(b) | The lost time injury rate is a calculation of the total number of lost time injuries x 200,000/employee hours worked. Lost days refer to scheduled work days and the count begins on the next scheduled work day immediately after the injury. |
Our rate of recordable injuries and lost time injuries remained in line with our historical average. We continue put the health and safety of our employees at the center of our operational priorities.
Community Impacts
The liveability of specific locales or areas may be significantly impacted by an organization’s activities. Westport’s geographic location, with our technical facilities adjacent to homes, schools and other businesses requires us to monitor and manage the potentially adverse impacts our operations might have on our immediate neighbors.
Our Facilities Engineering Group maintains a preventative maintenance schedule for key equipment to minimize the likelihood of environment releases and noise levels in excess of municipal by-laws. Westport responds to community concerns regarding our facilities, infrastructure, noise levels and environmental impacts in a timely manner. We did not receive any noise complaints in 2014.
Anti-Corruption Efforts
Our expectations for individual integrity and ethical, moral and legal conduct are outlined in our Code of Conduct. The Code of Conduct has mandated compliance with all applicable laws in the jurisdictions where we operate and has always prohibited the giving or receiving of improper payments to influence business decisions. In addition, Westport maintains a confidential ethics hotline to provide an avenue for employees to raise concerns about corporate conduct. The policy includes the reassurance that they will be protected from reprisals or victimization for “whistle blowing” in good faith.
Product Responsibility
Quality and safety are imperatives across the product life cycle. Our Quality Management System (QMS) is certified to ISO 9001:2008 standards for the design, assembly and commercialization of its LNG fuel systems. Westport QMS comprises the organization’s policies and procedures that aim to ensure that customer requirements are met with consistency, resulting in enhanced customer confidence and satisfaction. The QMS, other internal requirements and engineering systems have contributed to no incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of our products. Internal systems and processes have been established to ensure that the health and safety impacts of our products are assessed in each of the following life-cycle stages:
Health and Safety Impacts Assessed at Life-Cycle Stage | Status | ||
Development of product concept | YES | ||
Research and development | YES | ||
Certification | YES | ||
Manufacturing and production | YES | ||
Marketing and promotion | YES | ||
Storage, distribution, and supply | YES | ||
Use and service | YES | ||
Disposal, reuse or recycling | PARTIAL |
Community Engagement
Being active in the community has always been central to Westport’s values. Since 2002, Westport has been a strong supporter of the United Way of the Lower Mainland. From modest beginnings, our annual workplace campaign has grown steadily and in 2014 our cumulative fundraising total reached $1.162 million CDN.
Westport’s contributions to the community go beyond financial donations. Our employee led IMPACT team provides various outlets for Westporters to engage in the community. The role of IMPACT is to bring the various activities and initiatives that Westport employees can participate in into one coordinated effort. This also provides employees an outlet to exercise their 16 hours of paid volunteer time. IMPACT initiatives generally touch on their three pillars; Environment, Education, and Community.
“Bridging the Science Gap”: Our Partnership with Science World
Science World is dedicated to inspiring science and technology leadership in British Columbia. Westport is a contributor to Science World’s “Bridging the Science Gap” campaign through its sponsorship of the transportation exhibit in the Ken Spencer Science Park. This interactive outdoor science park is designed to educate children about the future of new, clean, low-carbon technologies. The exhibit conveys a “Clean Transportation Story” with interactive elements to demonstrate how everyday choices can impact our carbon footprint.
United Way of the Lower Mainland Community Schools
Westport is a proud partner of the United Way and Vancouver School Board’s Community Schools Program. Community schools provide safe and structured after-school activities to students aged 6-12. After-school programs play a critical role in providing structured, supervised time for children to be active, to develop positive social skills, and to build overall capabilities. Studies have linked participation in these programs with greater academic success, increased self-confidence and self-esteem, and better relationships with peers and adults.
Through this partnership, Westport employees lead classes over seven weeks in cooking, acrobatics, guitar, and visual arts at Lloyd George Elementary School.
Canadian Blood Services
Westport has been a member of the Canadian Blood Services’ Partners for Life Program since 2001. This nationwide program is designed to encourage group donations from business and community organizations. Each year, we set a target, coordinate group donations and allow employees to take time from work to donate.
The Canadian Blood Services’ Bloodmobile visited our offices for the first time in 2012 and we were able to collect more than 40 donations that day. In 2014, we made 75 donations. Since 2006, Westport employees have donated over 500 pints of blood or enough to impact 108 lives.5
Environmental Performance Indicators
Environmental Compliance
Compliance with applicable federal, provincial, and municipal regulations is a baseline environmental performance standard and we believe that leading organizations must go beyond minimum environmental requirements. Since its inception in 1996, Westport has not received any fines or non-monetary sanctions for environmental non-compliance.
Water
It is expected that climate change will impact global water resources. Water use is an increasingly critical component of each organization’s sustainability performance. Despite this, only the largest industries in British Columbia have water meters with data logging capability and the city of Vancouver does not currently provide meters to light industrial or commercial customers such as Westport.
Our calculations indicate that Westport facilities cumulatively have an average daily rate of water use of approximately 13.5 m³ per day. Engine and fuel system component testing activities use process water that flows in a closed-loop thereby minimizing total water withdrawals. Water conserving domestic appliances and fixtures have been installed at all locations in an effort to further reduce our impact. We recognize that providing only an estimate and not actual water use is a limitation of our current sustainability report.
Energy Consumption
Energy Consumption | Gigajoules for the 12 Months Ending December 2014 | ||||
Dec-14 | Dec-13 | Dec-12 | Dec-11 | Mar-10 | |
Direct | |||||
Diesel | 2,000 | 2,722 | 2,250 | 1,250 | 1,146 |
LPG | 0 | 0 | 35 | 99 | 120 |
LNG | 21,730 | 8,559 | 8,466 | 11,193 | 13,395 |
CNG | 35,449 | 38,148 | 28,802 | 19,352 | 13,363 |
Natural gas returned | -13,937 | -1,024 | -1,860 | -3,663 | -7,102 |
Net direct consumption | 45,242 | 48,405 | 37,693 | 28,232 | 20,922 |
Indirect | |||||
Electrical | 16,249 | 14,956 | 12,239 | 7,392 | 5,961 |
5 | According to Canadian Blood Services an average of 4.6 pints are required per patient. |
In 2014, both our consumption of LNG and rate of reinjection to the Fortis BC pipeline increased substantially due to testing of high-horsepower LNG pumps. Our LNG gas reinjection system enables us to return gas to the pipeline for use in other commercial, industrial, or residential applications and mitigates GHG emissions associated with fuel system development and testing. Our electrical consumption also increased in 2014 but we were able to return power to the grid through the use of transient dynamometers in our test cells.
Greenhouse Gas Emissions
The Greenhouse Gas Protocol6 developed by the World Business Council on Sustainable Development (WBSCD) is the globally accepted standard for greenhouse gas (GHG) emissions accounting. The organizational boundary of this inventory includes all of Westport’s British Columbia-based facilities and includes both scope one and scope two emissions.7 We have not measured scope three emissions to date.
Greenhouse Gas Inventory (unaudited) |
tonnes CO2 equivalent for the 12 months ended | ||||
Dec-14 | Dec-13 | Dec-12 | Dec-11 | 31-Mar-10 | |
Total Scope 1 Direct Emissions |
2389.7 |
2,576.1 | 2,224.2 | 1,805.5 | 2,005.4 |
Total Scope 2 Indirect Emissions |
413.0 | 387.0 | 288.0 | 237.0 | 245.0 |
Total GHG impact |
2802.7 |
2,963.1 | 2,512.2 | 2,042.5 | 2,250.4 |
6 | The GHG Protocol methodology used at this time only includes emissions associated with fuel consumption and not energy and emissions associated with fuel production, distribution and transport. |
7 | Scope One Direct Emissions encompass both liquefied and compressed natural gas, diesel, propane, and fuel used in company vehicles. Scope Two Indirect Emissions include emissions associated with the purchase and use of electricity. |
Finding comparable organizations against which to benchmark our GHG emissions remains a challenge, as the research and development of new engine technologies is necessarily an energy-intensive process. There are currently no regulatory requirements for a company of our size to disclose its emissions.8 The process of compiling a GHG inventory provides an important foundation for understanding reduction opportunities and measuring progress. Westport works through the internationally-recognized Carbon Disclosure Project to inventory and make public our GHG emissions. We have identified future opportunities to reduce the impacts of our operations, as well as opportunities to integrate climate change risk into our risk management procedures and overall business strategy.
Waste Generation and Diversion:
Waste reduction, reuse and recycling programs are well established and well-maintained. Using formulas based on bin size and frequency of collection, Westport generates approximately 200 tonnes of waste annually. Reducing the amount of waste sent to landfill remains a priority and we have launched employee education and awareness efforts to communicate the importance of minimizing the amount of waste generated.
We extend the opportunity for employees to recycle electronics, batteries, confidential paper, and some hazardous waste like paint through our waste minimization program.
Our Facilities Engineering Group tracks the amount of waste recycled via our hazardous waste program, scrap materials collection and office waste initiatives.
8 | In Canada, Large Final Emitters (LFEs), those facilities that emit the equivalent of 100,000 tonnes (100 kT) or more of carbon dioxide (CO2) equivalents per year are required to disclose their emissions. |
Types of Hazardous and Solid Waste Recycled | |||
Aluminum | Diesel | Hard and soft plastic | Viscor |
Batteries | E-waste | Paper | Wastewater |
Beverage containers | Filters/rags | Plastic oil pails | Wood |
Cardboard | Light bulbs | Solvents | Organics (kitchen waste) |
Coolant | Lube oil | Steel |
Exhibit 99.4
Management’s Report to Shareholders
The consolidated financial statements presented here have been prepared by management in accordance with generally accepted accounting principles in the United States. The integrity and objectivity of the data in these consolidated financial statements are management’s responsibility.
The company has implemented a system of internal accounting and administrative controls in order to provide reasonable assurance that transactions are appropriately authorized, assets are safeguarded, and financial records are properly maintained to provide accurate and reliable financial statements.
The Board of Directors, through its Audit Committee, oversees management’s responsibility for financial reporting and internal control. The Audit Committee is comprised of four directors who are not involved in the daily operations of the Company.
The duties of the Audit Committee include the review of the system of internal controls and of any relevant accounting, auditing and financial matters. The Audit Committee meets on a regular basis with management and the Company’s independent auditors to ensure itself that its duties have been properly discharged. The Audit Committee reports its findings to the Board of Directors for consideration in approving the consolidated financial statements for issuance to the shareholders.
/s/ David R. Demers
Chief Executive Officer
March 9, 2015
/s/ Ashoka Achuthan
Chief Financial Officer
March 9, 2015
Exhibit 99.6
Information for Shareholders
DIRECTORS AND EXECUTIVE OFFICERS
NAME/POSITION | RESIDENCE | START | COMMITTEES | ||||
Audit | Human Resources & Compensation | Innovation | Nominating & Corporate Governance | Strategy | |||
Ashoka Achuthan CFO |
Chicago, Illinois | June 2014 | |||||
James (Jim) Arthurs Executive Vice President |
North Vancouver, British Columbia |
Jan. 2014 | |||||
Warren J. Baker Director |
Avila Beach, California |
Sept. 2002 | a | a | a | ||
John A. Beaulieu Director |
Vancouver, Washington |
Sept. 1997 | a | a | |||
M.A. (Jill) Bodkin Chairman and Director |
Vancouver, British Columbia |
July 2008 | a | a | a | a | a |
Joseph P. Caron Director |
West Vancouver, British Columbia |
Aug. 2014 | a | ||||
David R. Demers CEO and Director |
Vancouver, British Columbia |
Mar. 1995
|
a | a | |||
Brenda J. Eprile Director |
North York, Ontario |
Oct. 2013 | a | a | |||
Nancy S. Gougarty President & COO |
Vancouver, British Columbia |
July 2013 | |||||
Philip B. Hodge Director |
Calgary, Alberta |
June 2012 | a | a | |||
Dezsö J. Horváth Director |
Toronto, Ontario |
Sept. 2001 | a | a | |||
Douglas R. King Director |
Hillsborough, California |
Jan. 2012 | a | a | |||
Gottfried (Guff) Muench Director |
West Vancouver, British Columbia |
July 2010 | a | a | |||
Mehran K. Rahbar Executive Vice President |
San Clemente, California |
Sept. 2014 |
CORPORATE INFORMATION
Westport Shareholder Services
Shareholders with questions about their account—including change of address, lost stock certificates, or receipt of multiple mail-outs and other related inquiries—should contact our Transfer Agent and Registrar:
COMPUTERSHARE TRUST COMPANY OF CANADA
510 Burrard Street, 3rd Floor
Vancouver, British Columbia, Canada V6C 3B9
T 604-661-9400 » F 604-661-9401
Legal Counsel
Bennett Jones LLP, Calgary, Alberta, Canada
Auditors
Deloitte LLP, Independent Registered Public Accounting Firm, Vancouver, British Columbia, Canada
STOCK LISTINGS
NASDAQ WPRT
Toronto Stock Exchange WPT
ANNUAL & SPECIAL MEETING OF SHAREHOLDERS
Thursday, April 30, 2015 at 2:00 PM (Pacific) at 1750 West 75th Avenue, Suite 101, Vancouver, British Columbia
WESTPORT ON THE INTERNET
Topics featured in this document can be found on our websites:
Westport | WESTPORT.COM |
Fuel for Thought blog | BLOG.WESTPORT.COM |
YouTube Channel | YOUTUBE.COM/WESTPORTDOTCOM |
FACEBOOK.COM/WESTPORTDOTCOM | |
Cummins Westport | CUMMINSWESTPORT.COM |
Weichai Westport | WEICHAI-WESTPORT.COM |
The information on these websites is not incorporated by reference into this Annual Report. Financial results, Annual Information Form, news, services, and other activities can also be found on the Westport website, on SEDAR at SEDAR.COM, or at the SEC at SEC.GOV. Shareholders and other interested parties can also sign up to receive news updates in a variety of formats including email, Twitter, and RSS feeds:
WESTPORT.COM/COMPANY/MEDIA/SUBSCRIPTIONS
CONTACT INFORMATION
1750 West 75th Avenue, Suite 101
Vancouver, British Columbia, Canada V6P 6G2
T 604-718-2000 » F 604-718-2001 » [email protected]
Forward Looking Statements
This document contains forward-looking statements about Westport’s business, operations, technology development, products, the performance of our products, sources of revenue, our future market opportunities and/or about the environment in which it operates, which are based on Westport’s estimates, forecasts, and projections. Such forward looking statements include, but are not limited to, statements concerning returns to shareholders, competitive pressures on our industry and future consolidation and alliances in that industry, changes in adjusted EBTIDA results, our focus for the year ahead, and impacts of climate change. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond Westport’s control and may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed in or implied by these forward looking statements. These risks include risks relating to the timing and demand for our products, future success of our business strategies and other risk factors described in our most recent Annual Information Form and other filings with securities regulators. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Westport disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by applicable legislation.
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