Stock Name: WJA
Amount: CAD 0.06
Announcement Date: 08/02/2012
Record Date: 12/03/2012
Dividend Detail:
WestJet to launch a new regional airline
Airline announces a normal course issuer bid and increases its quarterly
dividend
CALGARY, Feb. 8, 2012 /CNW/ - WestJet (TSX: WJA) today announced its
fourth quarter and year-end results for 2011. The airline reported
fourth quarter net earnings of $35.6 million, or $0.26 per share and
full-year net earnings of $148.7 million, or $1.06 per share; up
significantly from the net earnings of $90.2 million, or $0.62 per
share, reported for 2010. WestJet's operating cash flow per share for
the full-year 2011 was $3.60, an increase of 25 per cent compared to
last year.
"We are very pleased with our strong fourth quarter and full-year
results for 2011. We managed to cover the elevated fuel costs with our
revenue growth and improve our profit margin on a full-year basis,"
said WestJet President and CEO Gregg Saretsky. "Low-cost continues to
be our focus and I am proud of WestJetters for their efforts throughout
2011 to keep controllable costs per unit relatively flat, while at the
same time delivering a remarkable guest experience."
On January 16, 2012, WestJet announced that it was examining the
possibility of launching a new low-cost short-haul, regional airline.
Since that time, WestJetters have provided their input and voted
overwhelmingly in favour of the strategy. "With resounding support from
WestJetters, the leadership team and the board have made the decision
to move ahead with plans to launch a new low-cost regional airline that
will replicate our success in stimulating demand by bringing low fares
to many new communities," commented Gregg Saretsky. "This is an
exciting time for WestJet as we embark on the next phase of our
evolution and introduce our friendly and caring service to more markets
across North America."
Operating highlights (stated in Canadian dollars)
| Q4 2011 | Q4 2010* | Change | Full-year 2011 | Full-year 2010* | Change |
Net earnings (millions) | $35.6 | $37.2 | (4.3%) | $148.7 | $90.2 | 64.9% |
Diluted earnings per share | $0.26 | $0.26 | - | $1.06 | $0.62 | 71.0% |
Total revenues (millions) | $781.5 | $692.2 | 12.9% | $3,071.5 | $2,607.3 | 17.8% |
Operating margin | 7.6% | 9.2% | (1.6 pts.) | 8.4% | 7.3% | 1.1 pts. |
Operating cash flow per share** | $0.52 | $0.33 | 57.6% | $3.60 | $2.89 | 24.6% |
ASMs (available seat miles) (billions) | 5.329 | 5.021 | 6.1% | 21.186 | 19.535 | 8.5% |
RPMs (revenue passenger miles) (billions) | 4.194 | 3.942 | 6.4% | 16.891 | 15.613 | 8.2% |
Load factor | 78.7% | 78.5% | 0.2 pts. | 79.7% | 79.9% | (0.2 pts.) |
Yield (revenue per revenue passenger mile) (cents) | 18.64 | 17.56 | 6.2% | 18.18 | 16.70 | 8.9% |
RASM (revenue per available seat mile) (cents) | 14.67 | 13.79 | 6.4% | 14.50 | 13.35 | 8.6% |
CASM (cost per available seat mile) (cents) | 13.55 | 12.51 | 8.3% | 13.29 | 12.37 | 7.4% |
CASM, excluding fuel and employee profit share (cents)** | 9.03 | 8.79 | 2.7% | 8.85 | 8.80 | 0.6% |
*Financial information has been restated in accordance with
International Financial Reporting Standards (IFRS).
**Refer to reconciliations in the accompanying tables for further
information regarding calculations.
Today, WestJet also announced that the Toronto Stock Exchange has
accepted the airline's notice to make a normal course issuer bid for
five per cent of the currently issued and outstanding shares. The
airline also declared an increase to its quarterly dividend from $0.05
to $0.06. "We successfully completed our previous bid in August 2011,
and believe that continuing the share buy-back program and increasing
the quarterly dividend demonstrates the robustness of our business
model and commitment to return value to our shareholders," added Gregg
Saretsky.
In the fourth quarter of 2011, WestJet launched a code-share arrangement
with Japan Airlines and entered into two additional interline
relationships. There were a total of 13 new airline partnerships
introduced in 2011; three new code-share agreements and ten interline
relationships. This pace is expected to continue as the airline
anticipates launching another three to four code-shares and several
interline relationships in 2012. In January 2012, Delta Air Lines, the
world's second largest airline, was welcomed as WestJet's fifth
code-share partner, expanding on the interline relationship that was
introduced in early 2011.
WestJet is focused on continuing to improve the value it provides
business travellers. In 2011, the airline launched an initiative with
unique service offerings on its expanded daily service between Toronto
and Montreal and between Toronto and Ottawa. WestJet also successfully
bid on landing slots at New York's LaGuardia airport in November 2011,
and plans to introduce service in June 2012. "Connecting this key
business market directly to the WestJet network, in conjunction with a
growing list of airline partnerships and a maturing frequent guest
program, are helping expand our penetration into the higher yielding
corporate travel segment," noted Gregg Saretsky.
The airline anticipates that its full-year 2012 CASM, excluding fuel and
employee profit share, will be flat to up one per cent year over year.
For the first quarter of 2012, WestJet expects fuel costs, excluding
hedging, to range between $0.93 and $0.95 per litre. This represents a
nine to 12 per cent increase compared to the first quarter of 2011, and
a 37 to 40 per cent increase versus 2010.
"We continue to expand our reach and grow profitably thanks to the
teamwork of over 8,600 WestJetters and their commitment to the success
of our airline," added Gregg Saretsky. "Our forward bookings remain
healthy as we have not seen any negative impact despite the ongoing
broader economic uncertainty." WestJet anticipates modest
year-over-year RASM growth for the first quarter of 2012.
Dividend declaration
WestJet's Board of Directors declared a cash dividend of $0.06 per
common voting share and variable voting share for the first quarter of
2012, to be paid on March 30, 2012, to shareholders of record on March
14, 2012. 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 the launch of a new short-haul
regional airline, WestJet's partnership growth strategy, plans to
introduce service to LaGuardia, RASM growth in the first quarter of
2012, our forward bookings and demand for air travel, fuel costs in the
first quarter of 2012, 2012 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 January 2012 and forward-curve prices for
February and March 2012, the expected exchange rate of the Canadian
dollar to the U.S. dollar in the first quarter of 2012, 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 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-IFRS performance
measures including, without limitation, and CASM, excluding fuel and
employee profit share and operating cash flow per 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, IFRS 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-IFRS measures" in
WestJet's management's discussion and analysis of financial results for
the year ended December 31, 2011, which is available under WestJet's
profile on SEDAR at www.sedar.com, for a further discussion of such non-IFRS measures and a
reconciliation of such measures to IFRS.
Management's discussion and analysis of financial results and
consolidated financial statements and notes for the year ended December 31, 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 today,
February 8, 2012, 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 2011 fourth quarter and year-end 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 76-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. WestJet offers increased legroom and leather seats on its
modern fleet of 97 Boeing Next-Generation 737 aircraft. With future
confirmed deliveries for an additional 38 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 December 31 | Twelve months ended December 31 | ||||||
| 2011 | 2010 | 2011 | 2010 | ||||
| | | | | ||||
Revenues: | | | | | ||||
| Guest | 711,246 | 639,449 | 2,790,299 | 2,390,887 | |||
| Other | 70,299 | 52,770 | 281,241 | 216,407 | |||
| 781,545 | 692,219 | 3,071,540 | 2,607,294 | ||||
Expenses: | | | | | ||||
| Aircraft fuel | 235,574 | 179,276 | 915,878 | 674,608 | |||
| Airport operations | 107,295 | 100,286 | 421,561 | 388,112 | |||
| Flight operations and navigational charges | 84,814 | 80,249 | 344,442 | 325,582 | |||
| Sales and distribution | 66,873 | 67,036 | 273,364 | 255,732 | |||
| Marketing, general and administration | 56,954 | 52,154 | 209,880 | 194,481 | |||
| Depreciation and amortization | 44,312 | 42,566 | 174,751 | 170,462 | |||
| Aircraft leasing | 41,850 | 36,972 | 165,571 | 143,381 | |||
| Maintenance | 42,816 | 30,437 | 146,260 | 117,057 | |||
| Inflight | 36,144 | 31,889 | 139,478 | 124,303 | |||
| Employee profit share | 5,662 | 7,442 | 23,804 | 22,222 | |||
| 722,294 | 628,307 | 2,814,989 | 2,415,940 | ||||
Earnings from operations | 59,251 | 63,912 | 256,551 | 191,354 | ||||
| | | | | ||||
Non-operating income (expense): | | | | | ||||
| Finance income | 4,383 | 3,607 | 15,987 | 9,910 | |||
| Finance costs | (14,446) | (16,881) | (60,911) | (70,914) | |||
| (Loss) gain on foreign exchange | (908) | 826 | 2,485 | 2,579 | |||
| (Loss) gain on disposal of property and equipment | (43) | (25) | (54) | 570 | |||
| Gain (loss) on derivatives | 1,597 | 365 | (6,052) | (34) | |||
| (9,417) | (12,108) | (48,545) | (57,889) | ||||
Earnings before income tax | 49,834 | 51,804 | 208,006 | 133,465 | ||||
| | | | | ||||
Income tax expense: | | | | | ||||
| Current | 274 | 458 | 1,236 | 1,573 | |||
| Deferred | 13,976 | 14,178 | 58,068 | 41,695 | |||
| 14,250 | 14,636 | 59,304 | 43,268 | ||||
Net earnings | 35,584 | 37,168 | 148,702 | 90,197 | ||||
| | | | | ||||
Earnings per share: | | | | | ||||
| Basic | 0.26 | 0.26 | 1.06 | 0.62 | |||
| Diluted | 0.26 | 0.26 | 1.06 | 0.62 | |||
| | | | | ||||
Weighted average number of shares outstanding - basic | 138,259,455 | 144,292,212 | 139,902,637 | 144,852,548 | ||||
Weighted average number of shares outstanding - diluted | 138,627,995 | 144,559,472 | 140,638,659 | 145,080,105 | ||||
Consolidated Statement of Financial Position
(Stated in thousands of Canadian dollars)
(Unaudited)
| | | | | |
| | December 31 | December 31 | January 1 | |
| | 2011 | 2010 | 2010 | |
| | | | | |
Assets | | | | | |
Current assets: | | | | | |
| Cash and cash equivalents | | 1,243,605 | 1,159,316 | 994,989 |
| Restricted cash | | 48,341 | 28,583 | 10,192 |
| Accounts receivable | | 34,122 | 17,518 | 27,654 |
| Prepaid expenses, deposits and other | | 66,936 | 53,761 | 64,868 |
| Inventory | | 31,695 | 26,095 | 31,505 |
| | 1,424,699 | 1,285,273 | 1,129,208 | |
Non-current assets: | | | | | |
| Property and equipment | | 1,911,227 | 1,989,522 | 2,108,351 |
| Intangible assets | | 33,793 | 13,018 | 14,087 |
| Other assets | | 103,959 | 96,167 | 98,451 |
Total assets | | 3,473,678 | 3,383,980 | 3,350,097 | |
| | | | | |
Liabilities and shareholders' equity | | | | | |
Current liabilities: | | | | | |
| Accounts payable and accrued liabilities | | 307,279 | 287,710 | 228,911 |
| Advance ticket sales | | 432,186 | 336,926 | 297,720 |
| Non-refundable guest credits | | 43,485 | 36,381 | 63,164 |
| Current portion of long-term debt | | 158,832 | 178,337 | 165,111 |
| Current portion of obligations under finance leases | | 75 | 108 | 744 |
| | 941,857 | 839,462 | 755,650 | |
Non-current liabilities: | | | | | |
| Maintenance provisions | | 151,645 | 113,206 | 97,722 |
| Long-term debt | | 669,880 | 848,465 | 1,028,165 |
| Obligations under finance leases | | 3,174 | 3,249 | 3,358 |
| Other liabilities | | 10,449 | 8,958 | 9,517 |
| Deferred income tax | | 326,456 | 266,407 | 223,509 |
Total liabilities | | 2,103,461 | 2,079,747 | 2,117,921 | |
| | | | | |
Shareholders' equity: | | | | | |
| Share capital | | 630,408 | 647,637 | 633,075 |
| Equity reserves | | 74,184 | 66,726 | 75,866 |
| Hedge reserves | | (3,353) | (10,470) | (14,852) |
| Retained earnings | | 668,978 | 600,340 | 538,087 |
Total shareholders' equity | | 1,370,217 | 1,304,233 | 1,232,176 | |
| | | | | |
Total liabilities and shareholders' equity | | 3,473,678 | 3,383,980 | 3,350,097 | |
Consolidated Statement of Cash Flows
(Stated in thousands of Canadian dollars)
(Unaudited)
| | | | | |
| Three months ended December 31 | Twelve months ended December 31 | |||
| 2011 | 2010 | 2011 | 2010 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | 35,584 | 37,168 | 148,702 | 90,197 | |
Items not involving cash: | | | | | |
| Depreciation and amortization | 44,312 | 42,566 | 174,751 | 170,462 |
| Change in long-term maintenance provisions | 16,933 | 7,078 | 38,522 | 27,927 |
| Change in other liabilities | (198) | (155) | (313) | (685) |
| Amortization of hedge settlements | 349 | 351 | 1,400 | 1,400 |
| (Gain) loss on derivative instruments | (1,597) | (365) | 6,052 | 34 |
| Loss (gain) on disposal of property and equipment | 43 | (19) | 54 | (763) |
| Share-based payment expense | 2,538 | 2,989 | 12,553 | 15,497 |
| Income tax credit | | | | (1,667) |
| Deferred income tax expense | 13,976 | 14,178 | 58,068 | 41,695 |
| Unrealized foreign exchange loss | 66 | 115 | 1,453 | 337 |
| Change in non-cash working capital | (25,600) | (34,068) | 88,410 | 98,382 |
Change in restricted cash | (5,869) | (20,972) | (19,758) | (18,391) | |
Change in other assets | (7,785) | (1,384) | (3,510) | (5,659) | |
| 72,752 | 47,482 | 506,384 | 418,766 | |
| | | | | |
Investing activities: | | | | | |
Aircraft additions | (4,975) | (11,157) | (61,265) | (29,884) | |
Other property and equipment and intangible additions | (32,041) | (6,611) | (57,108) | (18,675) | |
| (37,016) | (17,768) | (118,373) | (48,559) | |
| | | | | |
Financing activities: | | | | | |
Repayment of long-term debt | (62,021) | (41,300) | (199,225) | (164,989) | |
Decrease in obligations under finance leases | (18) | (239) | (108) | (744) | |
Shares repurchased | | (31,391) | (74,570) | (31,391) | |
Dividends paid | (6,914) | | (35,000) | | |
Issuance of common shares | | | 34 | 520 | |
Change in other assets | (235) | 1,464 | (836) | (2,947) | |
Change in non-cash working capital | 14 | (7,147) | 7,106 | (4,526) | |
| (69,174) | (78,613) | (302,599) | (204,077) | |
| | | | | |
Cash flow from operating, investing and financing activities | (33,438) | (48,899) | 85,412 | 166,130 | |
Effect of foreign exchange on cash and cash equivalents | (576) | (2,237) | (1,123) | (1,803) | |
Net change in cash and cash equivalents | (34,014) | (51,136) | 84,289 | 164,327 | |
| | | | | |
Cash and cash equivalents, beginning of period | 1,277,619 | 1,210,452 | 1,159,316 | 994,989 | |
| | | | | |
Cash and cash equivalents, end of period | 1,243,605 | 1,159,316 | 1,243,605 | 1,159,316 | |
Cash taxes received (paid) | (391) | (590) | 26 | (2,958) | |
Cash interest received | 4,057 | 3,850 | 14,631 | 8,343 | |
Cash interest paid | (12,088) | (14,516) | (51,722) | (61,280) | |
CASM, excluding fuel and employee profit share
(Stated in thousands of Canadian dollars, except per unit amounts)
(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 December 31 | Twelve months ended December 31 | ||
| 2011 | 2010 | 2011 | 2010 |
| | | | |
Operating expenses | 722,294 | 628,307 | 2,814,989 | 2,415,940 |
Aircraft fuel expense | (235,574) | (179,276) | (915,878) | (674,608) |
Employee profit share expense | (5,662) | (7,442) | (23,804) | (22,222) |
Operating expenses, adjusted | 481,058 | 441,589 | 1,875,307 | 1,719,110 |
ASMs | 5,328,928,405 | 5,021,010,134 | 21,186,304,409 | 19,535,291,313 |
CASM, excluding above items (cents) | 9.03 | 8.79 | 8.85 | 8.80 |
Operating cash flow per share
(Stated in thousands of Canadian dollars, except per share amounts)
(Unaudited)
Cash flow from operations divided by the diluted weighted average number
of shares outstanding.
| | | | |
| Three months ended December 31 | Twelve months ended December 31 | ||
| 2011 | 2010 | 2011 | 2010 |
| | | | |
Cash flow from operating activities | 72,752 | 47,482 | 506,384 | 418,766 |
Weighted average number of shares outstanding - diluted | 138,627,995 | 144,559,472 | 140,638,659 | 145,080,105 |
Diluted operating cash flow per share | 0.52 | 0.33 | 3.60 | 2.89 |
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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