Stock Name: WJA
Amount: CAD 0.05
Announcement Date: 09/11/2011
Record Date: 12/12/2011
Dividend Detail:
Achieves 26th consecutive profitable quarter and carries record number of guests
CALGARY, Nov. 9, 2011 /CNW/ - WestJet (TSX: WJA) today announced third
quarter results for 2011. The airline reported net earnings of $39.3
million, or 28 cents per share; compared to third quarter 2010 net
earnings of $43.8 million or 30 cents per share.
"We had a solid third quarter in which we saw growth in both our yield
and RASM, and we carried a record 4.2 million guests," said WestJet
President and CEO Gregg Saretsky. "Despite significantly higher fuel
costs, we delivered our 26th consecutive quarter of profitability thanks to the tremendous work by
WestJetters and their passion for contributing to, and sharing in, our
ongoing success."
Operating highlights (stated in Canadian dollars)
| Q3 2011 | Q3 2010* | Change | Year-to-date 2011 | Year-to-date 2010* | Change |
Net earnings (millions) | $39.3 | $43.8 | (10.4%) | $113.1 | $53.0 | 113.3% |
Diluted earnings per share | $0.28 | $0.30 | (6.7%) | $0.80 | $0.36 | 122.2% |
Total revenues (millions) | $775.3 | $684.1 | 13.3% | $2,290.0 | $1,915.1 | 19.6% |
Operating margin | 8.5% | 11.3% | (2.8 pts.) | 8.6% | 6.7% | 1.9 pts. |
ASMs (available seat miles) (billions) | 5.389 | 5.031 | 7.1% | 15.857 | 14.514 | 9.3% |
RPMs (revenue passenger miles) (billions) | 4.315 | 4.007 | 7.7% | 12.697 | 11.671 | 8.8% |
Load factor | 80.1% | 79.6% | 0.5 pts. | 80.1% | 80.4% | (0.3 pts.) |
Yield (revenue per revenue passenger mile) (cents) | 17.97 | 17.07 | 5.3% | 18.04 | 16.41 | 9.9% |
RASM (revenue per available seat mile) (cents) | 14.39 | 13.60 | 5.8% | 14.44 | 13.19 | 9.5% |
CASM (cost per available seat mile) (cents) | 13.16 | 12.06 | 9.1% | 13.20 | 12.32 | 7.1% |
CASM, excluding fuel and employee profit share (cents)** | 8.77 | 8.50 | 3.2% | 8.79 | 8.80 | (0.1%) |
*Financial information has been restated in accordance with
International Financial Reporting Standards (IFRS).
**Refer to reconciliations in the accompanying tables for further
information regarding adjustments.
In the third quarter of 2011, WestJet launched a code-share arrangement
with KLM Royal Dutch Airlines and entered into three additional
interline relationships. "Our airline partnership growth strategy
remains on track as we continue to form alliances with leading airlines
from around the world and connect new global traffic flows to our
WestJet network," said Gregg Saretsky.
For the fourth quarter of 2011, WestJet expects comparable RASM growth
to that achieved in the third quarter of 2011. "The broader economy
continues to experience a great deal of volatility and consumer
confidence measures echo that uncertainty, however, we are not seeing
this impact reflected in our forward bookings in any significant
manner," noted Gregg Saretsky. "We are optimistic that demand for air
travel will remain healthy and are confident that with our high-value
travel proposition and low-cost business model we will continue to
deliver profitable results moving forward."
Jet fuel prices remained stubbornly high in the third quarter as WestJet
reported fuel costs of $0.89 per litre, an increase of 27 per cent year
over year. For the fourth quarter of 2011, WestJet is projecting fuel
costs to range between $0.90 and $0.93 per litre. In terms of
controllable costs, WestJet anticipates that full-year 2011 CASM,
excluding fuel and employee profit share, will be up approximately one
per cent, mainly attributable to higher maintenance expense compared to
2010.
In October, WestJet received three prestigious Canadian business awards
for employee engagement and culture. WestJet placed third in Aon
Hewitt's Best Employers in Canada study, and WestJet also placed among
Canada's Top 100 Employers as measured in Mediacorp's annual study of
the best workplaces in Canada. Also, WestJet was named one of Canada's
Most Admired Corporate Cultures for Western Canada by Waterstone Human
Capital. "There is an amazing level of employee engagement at WestJet
and these accolades are not born from the work of any single individual
but rather the teamwork and dedication of all WestJetters," commented
Ferio Pugliese, WestJet's Executive Vice-President, People, Culture and
Inflight Services.
Dividend declaration
WestJet's Board of Directors declared a cash dividend of $0.05 per
common voting share and variable voting share for the fourth quarter of
2011, to be paid on December 30, 2011, to shareholders of record on
December 14, 2011. All dividends paid by WestJet are, pursuant to
subsection 89(14) of the Income Tax Act, designated as eligible
dividends, unless indicated otherwise. An eligible dividend paid to a
Canadian resident is entitled to the enhanced dividend tax credit.
Caution regarding forward-looking statements
Certain information set forth in this news release, including, without
limitation, the information regarding WestJet's partnership growth
strategy, RASM growth in the fourth quarter of 2011, our forward
bookings and demand for air travel, fuel costs in the fourth quarter of
2011, 2011 CASM, excluding fuel and employee profit share, and our
future profitability, is forward-looking information within the meaning
of applicable Canadian securities laws. By its nature, forward-looking
information is subject to numerous risks and uncertainties, some of
which are beyond WestJet's control. The forward-looking information
contained in this news release is based on WestJet's current budget,
forecasts and strategy, our fleet plan, realized jet fuel prices for
October 2011 and forward-curve prices for November and December 2011,
the expected exchange rate of the Canadian dollar to the U.S. dollar in
the fourth quarter of 2011, along with available implementation plans,
agreements and bookings, but may vary due to factors including, but not
limited to, changes in consumer demand, changes in fuel prices, delays
in aircraft delivery, changes in guest demand, general economic
conditions, competitive environment, ability to effectively implement
and maintain critical systems and other factors and risks described in
WestJet's public reports and filings including WestJet's management's
discussion and analysis and annual information form for the year ended
December 31, 2010, which are available under WestJet's profile at
www.sedar.com. Readers are cautioned that undue reliance should not be
placed on forward-looking statements as actual results may vary
materially from the forward-looking information. WestJet does not
undertake to update, correct or revise any forward-looking information
as a result of any new information, future events or otherwise, except
as may be required by applicable law.
This news release contains disclosure respecting non-GAAP performance
measures including, without limitation, and CASM, excluding fuel and
employee profit share. These measures are included to enhance overall
understanding of WestJet's current financial performance and to provide
an alternative method for assessing WestJet's operating results in a
manner that is focused on the performance of WestJet's ongoing
operations, and to provide a more consistent basis for comparison
between quarters. These measures are not calculated in accordance with,
or an alternative to, GAAP and do not have standardized meanings.
Therefore, they may not be comparable to similar measures provided by
other entities. Readers are urged to review the section entitled
"Reconciliation of non-GAAP measures" in WestJet's management's
discussion and analysis of financial results for the three and nine
months ended September 30, 2011, which is available under WestJet's
profile on SEDAR at www.sedar.com, for a further discussion of such non-GAAP measures and a
reconciliation of such measures to GAAP.
Management's discussion and analysis of financial results and the
condensed consolidated interim financial statements and notes for the three and nine months ended September 30, 2011, are available
through the Internet in the Media and Investor Relations section of www.westjet.com or under WestJet's SEDAR profile at www.sedar.com.
Analyst conference call
WestJet will hold its quarterly analysts' conference call on Wednesday,
November 9, 2011, at 9 a.m. MST (11 a.m. EST). President and CEO Gregg
Saretsky and Executive Vice-President of Finance and CFO Vito Culmone
will discuss WestJet's third quarter 2011 results and answer questions
from financial analysts and members of the media. The conference call
will be available in Toronto by calling 416-915-3239, in Vancouver by
calling 604-638-5340 and across Canada and the United States through
the toll-free telephone number 1-800-319-4610. The call can also be
heard live through an Internet webcast accessible via the Media and
Investor Relations section of www.westjet.com.
About WestJet
WestJet is Canada's favourite airline, offering scheduled service
throughout its 71-city North American and Caribbean network. Inducted
into Canada's Most Admired Corporate Cultures Hall of Fame and named
one of Canada's best employers, WestJet pioneered low-cost flying in
Canada. Named a J.D. Power 2011 Customer Service Champion, WestJet
offers increased legroom, leather seats and live seatback television
provided by Bell TV on its modern fleet of 96 Boeing Next-Generation
737 aircraft. With future confirmed deliveries for an additional 39
aircraft through 2018, WestJet strives to be one of the five most
successful international airlines in the world.
Connect with WestJet on Facebook at www.facebook.com/westjet
Follow WestJet on Twitter at www.twitter.com/westjet
Subscribe to WestJet on YouTube at www.youtube.com/westjet
Consolidated Statement of Earnings
(Stated in thousands of Canadian dollars, except share and per share
amounts)
(Unaudited)
| | | | | | |
| | Three months ended September 30 | Nine months ended September 30 | |||
| | 2011 | 2010 | 2011 | 2010 | |
| | | | | | |
Revenues: | | | | | | |
| Guest | | 714,621 | 632,659 | 2,079,053 | 1,751,438 |
| Other | | 60,664 | 51,440 | 210,942 | 163,637 |
| | 775,285 | 684,099 | 2,289,995 | 1,915,075 | |
Expenses: | | | | | | |
| Aircraft fuel | | 230,764 | 170,828 | 680,304 | 495,332 |
| Airport operations | | 106,051 | 94,051 | 314,266 | 287,826 |
| Flight operations and navigational charges | | 89,063 | 83,890 | 259,628 | 245,333 |
| Sales and distribution | | 67,846 | 64,928 | 206,491 | 188,696 |
| Marketing, general and administration | | 50,624 | 44,369 | 152,926 | 142,327 |
| Depreciation and amortization | | 43,624 | 42,598 | 130,439 | 127,896 |
| Aircraft leasing | | 41,384 | 36,754 | 123,721 | 106,409 |
| Maintenance | | 38,317 | 30,268 | 103,444 | 86,620 |
| Inflight | | 35,519 | 30,680 | 103,334 | 92,414 |
| Employee profit share | | 5,973 | 8,567 | 18,142 | 14,780 |
| | 709,165 | 606,933 | 2,092,695 | 1,787,633 | |
Earnings from operations | | 66,120 | 77,166 | 197,300 | 127,442 | |
| | | | | | |
Non-operating income (expense): | | | | | | |
| Finance income | | 3,865 | 2,531 | 11,604 | 6,303 |
| Finance costs | | (14,682) | (17,670) | (46,465) | (54,033) |
| Gain on foreign exchange | | 1,255 | 441 | 3,393 | 1,753 |
| Gain (loss) on disposal of property and equipment | | (20) | (11) | (11) | 595 |
| Loss on derivatives | | (1,233) | (473) | (7,649) | (399) |
| | (10,815) | (15,182) | (39,128) | (45,781) | |
Earnings before income tax | | 55,305 | 61,984 | 158,172 | 81,661 | |
| | | | | | |
Income tax expense: | | | | | | |
| Current | | (222) | 383 | 962 | 1,115 |
| Deferred | | 16,260 | 17,770 | 44,092 | 27,517 |
| | 16,038 | 18,153 | 45,054 | 28,632 | |
Net earnings | | 39,267 | 43,831 | 113,118 | 53,029 | |
| | | | | | |
Earnings per share: | | | | | | |
| Basic | | 0.28 | 0.30 | 0.81 | 0.37 |
| Diluted | | 0.28 | 0.30 | 0.80 | 0.36 |
Consolidated Statement of Financial Position
(Stated in thousands of Canadian dollars)
(Unaudited)
| | | | ||||
| | September 30 | December 31 | ||||
| | 2011 | 2010 | ||||
| | | | ||||
Assets | | | | ||||
Current assets: | | | | ||||
| Cash and cash equivalents | | 1,320,091 | 1,187,899 | |||
| Accounts receivable | | 30,859 | 17,518 | |||
| Prepaid expenses, deposits and other | | 69,815 | 53,761 | |||
| Inventory | | 28,650 | 26,095 | |||
| | 1,449,415 | 1,285,273 | ||||
Non-current assets: | | | | ||||
| Property and equipment | | 1,936,747 | 1,989,522 | |||
| Intangible assets | | 14,487 | 13,018 | |||
| Other assets | | 93,911 | 96,167 | |||
Total assets | | 3,494,560 | 3,383,980 | ||||
| | | | ||||
Liabilities and shareholders' equity | | | | ||||
Current liabilities: | | | | ||||
| Accounts payable and accrued liabilities | | 337,046 | 287,710 | |||
| Advance ticket sales | | 433,801 | 336,926 | |||
| Non-refundable guest credits | | 39,594 | 36,381 | |||
| Current portion of long-term debt | | 165,151 | 178,337 | |||
| Current portion of obligations under finance leases | | 75 | 108 | |||
| | 975,667 | 839,462 | ||||
Non-current liabilities: | | | | ||||
| Maintenance provisions | | 117,718 | 106,711 | |||
| Long-term debt | | 725,556 | 848,465 | |||
| Obligations under finance leases | | 3,193 | 3,249 | |||
| Other liabilities | | 9,483 | 8,958 | |||
| Deferred income tax | | 315,491 | 268,069 | |||
Total liabilities | | 2,147,108 | 2,074,914 | ||||
| | | | ||||
Shareholders' equity: | | | | ||||
| Share capital | | 629,994 | 647,637 | |||
| Equity reserves | | 72,060 | 66,726 | |||
| Hedge reserves | | 257 | (10,470) | |||
| Retained earnings | | 645,141 | 605,173 | |||
Total shareholders' equity | | 1,347,452 | 1,309,066 | ||||
| | | | | |||
Total liabilities and shareholders' equity | | 3,494,560 | 3,383,980 | ||||
Consolidated Statement of Cash Flows
(Stated in thousands of Canadian dollars)
(Unaudited)
| | | | |||
| | Three months ended September 30 | Nine months ended September 30 | |||
| | 2011 | 2010 | 2011 | 2010 | |
| | | | | | |
Operating activities: | | | | | | |
Net earnings | | 39,267 | 43,831 | 113,118 | 53,029 | |
Items not involving cash: | | | | | | |
| Depreciation and amortization | | 43,624 | 42,598 | 130,439 | 127,896 |
| Change in long-term maintenance provisions | | 8,037 | 7,292 | 22,541 | 20,849 |
| Change in other liabilities | | (183) | (150) | (115) | (530) |
| Amortization of hedge settlements | | 350 | 350 | 1,050 | 1,049 |
| Loss on derivative instruments | | 1,233 | 473 | 7,649 | 399 |
| (Gain) loss on disposal of property and equipment | | 20 | (68) | 11 | (744) |
| Share-based payment expense | | 2,903 | 2,772 | 10,015 | 12,507 |
| Income tax credit | | - | - | - | (1,667) |
| Deferred income tax expense | | 16,260 | 17,770 | 44,092 | 27,517 |
| Unrealized foreign exchange (gain) loss | | (696) | 71 | 1,387 | 222 |
| Change in non-cash working capital | | 78,429 | 48,339 | 122,061 | 132,450 |
Change in other assets | | (1,942) | (1,445) | (4,727) | (4,274) | |
| | 187,302 | 161,833 | 447,521 | 368,703 | |
| | | | | | |
Investing activities: | | | | | | |
Aircraft additions | | (8,682) | (3,938) | (56,290) | (18,727) | |
Other property and equipment and intangible additions | | (8,731) | (6,817) | (25,067) | (12,064) | |
| | (17,413) | (10,755) | (81,357) | (30,791) | |
| | | | | | |
Financing activities: | | | | | | |
Repayment of long-term debt | | (46,158) | (41,322) | (137,204) | (123,689) | |
Decrease in obligations under finance leases | | (18) | (87) | (90) | (505) | |
Shares repurchased | | (16,740) | - | (74,570) | - | |
Dividends paid | | (6,912) | - | (28,086) | - | |
Issuance of common shares | | 34 | - | 34 | 520 | |
Change in other assets | | 76 | 77 | (601) | (4,411) | |
Change in non-cash working capital | | (2) | 1,679 | 7,092 | 2,621 | |
| | (69,720) | (39,653) | (233,425) | (125,464) | |
| | | | | | |
Cash flow from operating, investing and financing activities | | 100,169 | 111,425 | 132,739 | 212,448 | |
Effect of foreign exchange on cash and cash equivalents | | 3,891 | (1,525) | (547) | 434 | |
Net change in cash and cash equivalents | | 104,060 | 109,900 | 132,192 | 212,882 | |
| | | | | | |
Cash and cash equivalents, beginning of period | | 1,216,031 | 1,108,163 | 1,187,899 | 1,005,181 | |
| | | | | | |
Cash and cash equivalents, end of period | | 1,320,091 | 1,218,063 | 1,320,091 | 1,218,063 | |
Cash taxes received (paid) | | 1,183 | (712) | 417 | (2,367) | |
Cash interest received | | 4,512 | 1,819 | 10,574 | 4,493 | |
Cash interest paid | | 12,630 | 15,081 | 39,634 | 46,764 | |
Operating Highlights
(Unaudited)
| | | ||
| Three months ended September 30 | Nine months ended September 30 | ||
| 2011 | 2010 | 2011 | 2010 |
| | | | |
ASMs | 5,389,130,444 | 5,031,112,301 | 15,857,376,004 | 14,514,281,179 |
RPMs | 4,315,419,154 | 4,006,665,895 | 12,697,311,801 | 11,671,460,713 |
Load factor | 80.1% | 79.6% | 80.1% | 80.4% |
Yield (cents) | 17.97 | 17.07 | 18.04 | 16.41 |
RASM (cents) | 14.39 | 13.60 | 14.44 | 13.19 |
CASM (cents) | 13.16 | 12.06 | 13.20 | 12.32 |
CASM, excluding fuel and employee profit share (cents) | 8.77 | 8.50 | 8.79 | 8.80 |
Fuel consumption (litres) | 260,282,959 | 245,122,101 | 771,914,701 | 707,720,372 |
Fuel costs per litre (dollars) | 0.89 | 0.70 | 0.88 | 0.70 |
Segment guests | 4,203,372 | 3,928,723 | 12,044,089 | 11,370,031 |
Average stage length (miles) | 958 | 962 | 985 | 963 |
Utilization (hours) | 11.7 | 11.6 | 11.8 | 11.6 |
Number of full-time equivalent employees at period end | 7,011 | 6,581 | 7,011 | 6,581 |
Fleet size at period end | 96 | 90 | 96 | 90 |
CASM, excluding fuel and employee profit share
(Stated in thousands of Canadian dollars, except per unit data)
(Unaudited)
WestJet excludes the effects of aircraft fuel expense and employee
profit share expense to assess the operating performance of the
business. Fuel expense is excluded from operating results due to the
fact that fuel prices are impacted by a host of factors outside
WestJet's control, such as significant weather events, geopolitical
tensions, refinery capacity and global demand and supply. Excluding
this expense allows WestJet to analyze its operating results on a
comparable basis. Employee profit share expense is excluded from
operating results due to its variable nature and excluding this expense
allows greater comparability.
| | | ||
| Three months ended September 30 | Nine months ended September 30 | ||
| 2011 | 2010 | 2011 | 2010 |
| | | | |
Operating expenses | 709,165 | 606,933 | 2,092,695 | 1,787,633 |
Adjusted for: | | | | |
Aircraft fuel expense | (230,764) | (170,828) | (680,304) | (495,332) |
Employee profit share expense | (5,973) | (8,567) | (18,142) | (14,780) |
Operating expenses, adjusted | 472,428 | 427,538 | 1,394,249 | 1,277,521 |
ASMs | 5,389,130,444 | 5,031,112,301 | 15,857,376,004 | 14,514,281,179 |
CASM, excluding above items (cents) | 8.77 | 8.50 | 8.79 | 8.80 |
For further information:
| WestJet Media Relations 1-888-WJ-4-NEWS (1-888-954-6397) Email:media@westjet.com | | | WestJet Investor Relations 1-877-493-7853 Email:investor_relations@westjet.com |
Website:www.westjet.com
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