Financial highlights | Three months ended September 30 |
Nine months ended September 30 |
|||||
($ in thousands, unless otherwise noted) |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|
Revenue |
1,045,055 |
1,009,728 |
3.5% |
3,070,550 |
2,982,158 |
3.0% |
|
Operating expenses |
885,537 |
883,898 |
0.2% |
2,613,484 |
2,646,294 |
(1.2%) |
|
Earnings from operations |
159,518 |
125,830 |
26.8% |
457,066 |
335,864 |
36.1% |
|
Operating margin (per cent) |
15.3% |
12.5% |
2.8 pts. |
14.9% |
11.3% |
3.6 pts. |
|
EBT |
146,295 |
71,401 |
104.9% |
427,630 |
265,491 |
61.1% |
|
Adjusted EBT(i) |
146,295 |
116,860 |
25.2% |
427,630 |
310,950 |
37.5% |
|
EBT margin (per cent)(i) |
14.0% |
7.1% |
6.9 pts. |
13.9% |
8.9% |
5.0 pts. |
|
Adjusted EBT margin (per cent)(i) | 14.0% |
11.6% |
2.4 pts. |
13.9% |
10.4% |
3.5 pts. |
|
Taxes |
44,492 |
19,210 |
131.6% |
123,536 |
72,247 |
71.0% |
|
Net earnings |
101,803 |
52,191 |
95.1% |
304,094 |
193,244 |
57.4% |
|
Adjusted net earnings(i) |
101,803 |
85,422 |
19.2% |
304,094 |
226,475 |
34.3% |
|
Earnings per share: |
|||||||
Basic |
0.82 |
0.41 |
100.0% |
2.42 |
1.51 |
60.3% |
|
Diluted |
0.82 |
0.40 |
105.0% |
2.40 |
1.50 |
60.0% |
|
Diluted (adjusted) (i) |
0.82 |
0.66 |
24.2% |
2.40 |
1.76 |
36.4% |
|
ROIC (per cent)(i) |
16.1% |
13.8% |
2.3 pts. |
16.1% |
13.8% |
2.3 pts. |
Three months ended September 30 |
Nine months ended September 30 |
|||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|
ASMs |
6,904,193,981 |
6,498,320,506 |
6.2% |
20,377,438,384 |
19,205,786,059 |
6.1% |
RPMs |
5,646,514,106 |
5,401,025,233 |
4.5% |
16,411,790,259 |
15,747,552,319 |
4.2% |
Load factor |
81.8% |
83.1% |
(1.3 pts.) |
80.5% |
82.0% |
(1.5 pts.) |
Yield (cents) |
18.51 |
18.70 |
(1.0%) |
18.71 |
18.94 |
(1.2%) |
RASM (cents) |
15.14 |
15.54 |
(2.6%) |
15.07 |
15.53 |
(3.0%) |
CASM (cents) |
12.83 |
13.60 |
(5.7%) |
12.83 |
13.78 |
(6.9%) |
CASM, excluding fuel and employee profit share (cents)(i) |
9.35 |
8.90 |
5.1% |
9.27 |
9.13 |
1.5% |
Fuel consumption (litres) |
326,531,738 |
305,320,905 |
6.9% |
960,602,171 |
913,746,054 |
5.1% |
Fuel costs per litre (cents) |
63 |
94 |
(33.0%) |
66 |
93 |
(29.0%) |
Segment guests |
5,517,289 |
5,246,819 |
5.2% |
15,388,356 |
14,825,828 |
3.8% |
Average stage length (miles) |
881 |
910 |
(3.2%) |
918 |
939 |
(2.2%) |
Departures |
55,715 |
50,661 |
10.0% |
156,486 |
144,182 |
8.5% |
Utilization (hours) |
11.7 |
11.8 |
(0.8%) |
11.7 |
11.9 |
(1.7%) |
Full-time equivalent employees at period end |
9,103 |
8,560 |
6.3% |
9,103 |
8,560 |
6.3% |
Fleet size at period end |
132 |
123 |
7.3% |
132 |
123 |
7.3% |
Expense ($ in thousands) |
CASM (cents) |
|||||
Three months ended Sept. 30 |
Three months ended Sept. 30 |
|||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|
Aircraft fuel |
206,924 |
286,817 |
(27.9%) |
3.00 |
4.41 |
(32.0%) |
Airport operations |
142,176 |
128,381 |
10.7% |
2.06 |
1.98 |
4.0% |
Flight operations and navigational charges |
126,821 |
112,886 |
12.3% |
1.84 |
1.74 |
5.7% |
Sales and distribution |
98,351 |
94,764 |
3.8% |
1.43 |
1.46 |
(2.1%) |
Depreciation and amortization |
69,739 |
56,620 |
23.2% |
1.01 |
0.87 |
16.1% |
Marketing, general and administration |
58,604 |
50,647 |
15.7% |
0.85 |
0.78 |
9.0% |
Maintenance |
62,347 |
48,062 |
29.7% |
0.89 |
0.74 |
20.3% |
Inflight |
47,029 |
43,600 |
7.9% |
0.68 |
0.67 |
1.5% |
Aircraft leasing |
40,572 |
43,082 |
(5.8%) |
0.59 |
0.66 |
(10.6%) |
Employee profit share |
32,974 |
19,039 |
73.2% |
0.48 |
0.29 |
65.5% |
Total operating expenses |
885,537 |
883,898 |
0.2% |
12.83 |
13.60 |
(5.7%) |
Total, excluding fuel and profit share |
645,639 |
578,042 |
11.7% |
9.35 |
8.90 |
5.1% |
Expense ($ in thousands) |
CASM (cents) |
|||||
Nine months ended Sept. 30 |
Nine months ended Sept. 30 |
|||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|
Aircraft fuel |
632,317 |
846,514 |
(25.3%) |
3.10 |
4.41 |
(29.7%) |
Airport operations |
412,510 |
377,178 |
9.4% |
2.02 |
1.96 |
3.1% |
Flight operations and navigational charges |
372,560 |
339,616 |
9.7% |
1.83 |
1.77 |
3.4% |
Sales and distribution |
285,304 |
282,598 |
1.0% |
1.40 |
1.47 |
(4.8%) |
Depreciation and amortization |
189,684 |
172,044 |
10.3% |
0.93 |
0.90 |
3.3% |
Marketing, general and administration |
175,108 |
164,030 |
6.8% |
0.86 |
0.85 |
1.2% |
Maintenance |
171,599 |
151,612 |
13.2% |
0.84 |
0.79 |
6.3% |
Inflight |
150,098 |
130,410 |
15.1% |
0.74 |
0.68 |
8.8% |
Aircraft leasing |
132,208 |
136,904 |
(3.4%) |
0.65 |
0.71 |
(8.5%) |
Employee profit share |
92,096 |
45,388 |
102.9% |
0.46 |
0.24 |
91.7% |
Total operating expenses |
2,613,484 |
2,646,294 |
(1.2%) |
12.83 |
13.78 |
(6.9%) |
Total, excluding fuel and profit share |
1,889,071 |
1,754,392 |
7.7% |
9.27 |
9.13 |
1.5% |
Three months ended September 30 |
Nine months ended September 30 |
|||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|
Aircraft fuel expense ($ in thousands) |
206,924 |
286,817 |
(27.9%) |
632,317 |
846,514 |
(25.3%) |
Aircraft fuel expense as a percent of operating expenses |
23.0% |
32.0% |
(9.0 pts.) |
24.0% |
32.0% |
(8.0 pts.) |
Fuel consumption (litres) |
326,531,738 |
305,320,905 |
6.9% |
960,602,171 |
913,746,054 |
5.1% |
Fuel cost per litre (cents) |
63 |
94 |
(33.0%) |
66 |
93 |
(29.0%) |
Average market price for jet fuel in US dollars (per barrel) |
65 |
120 |
(45.8%) |
71 |
123 |
(42.3%) |
Average market price for jet fuel in Canadian dollars (per barrel) |
85 |
131 |
(35.1%) |
89 |
134 |
(33.6%) |
Total |
Future Deliveries |
Total |
|||||||||
Dec. 31, 2014 |
Sep. 30, 2015 |
Q4 2015 |
2016 | 2017 | 2018- 20 |
2021- 23 |
2024- 27 |
Total | 2027 | ||
Boeing narrow body |
|||||||||||
737-600 NG |
13 |
13 |
- |
- |
- |
- |
- |
- |
- |
13 |
|
737-700 NG(i) |
64 |
59 |
- |
- |
- |
- |
- |
- |
- |
59 |
|
737-800 NG(ii) |
30 |
36 |
6 |
5 |
1(iii) |
- |
- |
- |
12 |
48 |
|
737 MAX 7(iv)(v) |
- |
- |
- |
- |
- |
6 |
4 |
15 |
25 |
25 |
|
737 MAX 8(iv)(v) |
- |
- |
- |
- |
4 |
19 |
11 |
6 |
40 |
40 |
|
Boeing wide body |
|||||||||||
767-300 ERW |
- |
1 |
2 |
1 |
- |
- |
- |
- |
3 |
4 |
|
Boeing aircraft |
107 |
109 |
8 |
6 |
5 |
25 |
15 |
21 |
80 |
189 |
|
Lease expiries |
- |
- |
- |
(3) |
(6) |
(21) |
(14) |
- |
(44) |
(44) |
|
Boeing aircraft after lease expiries |
107 |
109 |
8 |
3 |
(1) |
4 |
1 |
21 |
36 |
145 |
|
Bombardier |
|||||||||||
Q400 NextGen(vii) |
15 |
23 |
2 |
9 |
2 |
- |
- |
- |
13 |
36 |
|
Fleet |
122 |
132 |
10 |
15 |
7 |
25 |
15 |
21 |
93 |
225 |
|
Fleet after lease |
122 |
132 |
10 |
12 |
1 |
4 |
1 |
21 |
49 |
181 |
October 31 |
September 30 |
|
2015 |
2015 |
|
Issued and outstanding: |
||
Common voting shares |
106,764,703 |
106,582,264 |
Variable voting shares |
16,516,378 |
16,693,435 |
Total voting shares issued and outstanding |
123,281,081 |
123,275,699 |
Stock options |
5,550,556 |
5,564,980 |
RSUs - Key employee plan |
276,048 |
276,048 |
RSUs - Executive share unit plan |
122,996 |
122,996 |
PSUs - Executive share unit plan |
269,302 |
269,302 |
Total voting shares potentially issuable |
6,218,902 |
6,233,326 |
Total outstanding and potentially issuable voting shares |
129,499,983 |
129,509,025 |
Three months ended |
Nine months ended |
||||
Note |
September 30 |
September 30 |
|||
2015 |
2014 |
2015 |
2014 |
||
Revenue: |
|||||
Guest |
928,821 |
930,103 |
2,714,676 |
2,714,386 |
|
Other |
116,234 |
79,625 |
355,874 |
267,772 |
|
1,045,055 |
1,009,728 |
3,070,550 |
2,982,158 |
||
Operating expenses: |
|||||
Aircraft fuel |
206,924 |
286,817 |
632,317 |
846,514 |
|
Airport operations |
142,176 |
128,381 |
412,510 |
377,178 |
|
Flight operations and navigational charges |
126,821 |
112,886 |
372,560 |
339,616 |
|
Sales and distribution |
98,351 |
94,764 |
285,304 |
282,598 |
|
Depreciation and amortization |
69,739 |
56,620 |
189,684 |
172,044 |
|
Marketing, general and administration |
58,604 |
50,647 |
175,108 |
164,030 |
|
Maintenance |
62,347 |
48,062 |
171,599 |
151,612 |
|
Inflight |
47,029 |
43,600 |
150,098 |
130,410 |
|
Aircraft leasing |
40,572 |
43,082 |
132,208 |
136,904 |
|
Employee profit share |
3 |
32,974 |
19,039 |
92,096 |
45,388 |
885,537 |
883,898 |
2,613,484 |
2,646,294 |
||
Earnings from operations |
159,518 |
125,830 |
457,066 |
335,864 |
|
Non-operating income (expense): |
|||||
Finance income |
3,550 |
4,220 |
12,020 |
12,349 |
|
Finance cost |
12 |
(13,314) |
(14,588) |
(40,712) |
(37,646) |
Gain (loss) on foreign exchange |
(549) |
1,377 |
(236) |
407 |
|
Loss on disposal of property and equipment |
(2,766) |
(45,438) |
(364) |
(45,483) |
|
Loss on derivatives |
(144) |
à|
(144) |
à|
|
(13,223) |
(54,429) |
(29,436) |
(70,373) |
||
Earnings before income tax |
146,295 |
71,401 |
427,630 |
265,491 |
|
Income tax expense (recovery): |
|||||
Current |
39,645 |
18,829 |
106,066 |
86,298 |
|
Deferred |
4,847 |
381 |
17,470 |
(14,051) |
|
44,492 |
19,210 |
123,536 |
72,247 |
||
Net earnings |
101,803 |
52,191 |
304,094 |
193,244 |
|
Earnings per share: |
|||||
Basic |
11 |
0.82 |
0.41 |
2.42 |
1.51 |
Diluted |
11 |
0.82 |
0.40 |
2.40 |
1.50 |
September 30 |
December 31 |
||
Note |
2015 |
2014 |
|
Assets | |||
Current assets: |
|||
Cash and cash equivalents |
4 |
1,419,679 |
1,358,071 |
Restricted cash |
5 |
57,315 |
58,149 |
Accounts receivable |
74,218 |
54,950 |
|
Prepaid expenses, deposits and other |
98,670 |
144,192 |
|
Inventory |
33,540 |
36,658 |
|
Assets held for sale |
78,306 |
||
1,683,422 |
1,730,326 |
||
Non-current assets: |
|||
Property and equipment |
6 |
3,231,294 |
2,793,194 |
Intangible assets |
61,975 |
60,623 |
|
Other assets |
88,513 |
62,290 |
|
Total assets |
5,065,204 |
4,646,433 |
|
Liabilities and shareholders' equity | |||
Current liabilities: |
|||
Accounts payable and accrued liabilities |
546,417 |
415,562 |
|
Advance ticket sales |
624,509 |
575,781 |
|
Deferred Rewards program |
114,034 |
86,870 |
|
Non-refundable guest credits |
36,499 |
45,434 |
|
Current portion of maintenance provisions |
7 |
69,809 |
54,811 |
Current portion of long-term debt |
8 |
150,264 |
159,843 |
1,541,532 |
1,338,301 |
||
Non-current liabilities: |
|||
Maintenance provisions |
7 |
233,527 |
191,768 |
Long-term debt |
8 |
1,047,696 |
1,028,820 |
Other liabilities |
17,141 |
13,150 |
|
Deferred income tax |
314,709 |
296,892 |
|
Total liabilities |
3,154,605 |
2,868,931 |
|
Shareholders' equity: |
|||
Share capital |
9 |
583,478 |
603,287 |
Equity reserves |
78,828 |
75,094 |
|
Hedge reserves |
(1,147) |
(3,179) |
|
Retained earnings |
1,249,440 |
1,102,300 |
|
Total shareholders' equity |
1,910,599 |
1,777,502 |
|
Commitments |
14 |
||
Total liabilities and shareholders' equity |
5,065,204 |
4,646,433 |
Three months ended |
Nine months ended |
||||
September 30 |
September 30 |
||||
Note |
2015 |
2014 |
2015 |
2014 |
|
Operating activities: |
|||||
Net earnings |
101,803 |
52,191 |
304,094 |
193,244 |
|
Items not involving cash: |
|||||
Depreciation and amortization |
69,739 |
56,620 |
189,684 |
172,044 |
|
Change in maintenance provisions |
13,612 |
9,444 |
21,303 |
19,526 |
|
Change in other liabilities |
(238) |
(144) |
45 |
(371) |
|
Amortization of hedge settlements |
350 |
350 |
1,050 |
1,050 |
|
Loss on derivatives |
144 |
- |
144 |
- |
|
Loss on disposal of property and equipment |
2,766 |
45,438 |
364 |
45,483 |
|
Share-based payment expense |
9 |
4,125 |
4,548 |
12,875 |
14,310 |
Deferred income tax expense (recovery) |
4,847 |
381 |
17,470 |
(14,051) |
|
Unrealized foreign exchange gain |
(9,772) |
(3,185) |
(21,541) |
(8,311) |
|
Change in non-cash working capital |
161,447 |
102,934 |
212,392 |
21,937 |
|
Change in restricted cash |
(14,697) |
(19,152) |
835 |
4,250 |
|
Change in other assets |
(3,240) |
4,695 |
(9,132) |
(6,728) |
|
Purchase of shares pursuant to compensation plans |
(601) |
(406) |
(13,672) |
(10,823) |
|
330,285 |
253,714 |
715,911 |
431,560 |
||
Investing activities: |
|||||
Aircraft additions |
(128,332) |
(128,017) |
(523,427) |
(466,094) |
|
Aircraft disposals |
565 |
- |
83,216 |
58 |
|
Other property and equipment and intangible additions |
(22,242) |
(11,501) |
(49,075) |
(41,080) |
|
(150,009) |
(139,518) |
(489,286) |
(507,116) |
||
Financing activities: |
|||||
Increase in long-term debt |
17,510 |
416,192 |
135,380 |
597,378 |
|
Repayment of long-term debt |
(42,795) |
(167,531) |
(125,981) |
(263,332) |
|
Shares repurchased |
(47,897) |
- |
(119,803) |
(29,575) |
|
Dividends paid |
10 |
(17,258) |
(15,342) |
(52,465) |
(45,979) |
Issuance of shares pursuant to compensation plans |
- |
- |
36 |
40 |
|
Cash interest paid |
(15,540) |
(10,284) |
(39,369) |
(30,086) |
|
Change in non-cash working capital |
(3,708) |
2,429 |
(3,734) |
2,002 |
|
(109,688) |
225,464 |
(205,936) |
230,448 |
||
Cash flow from operating, investing and financing activities |
70,588 |
339,660 |
20,689 |
154,892 |
|
Effect of foreign exchange on cash and cash equivalents |
19,539 |
8,415 |
40,919 |
13,849 |
|
Net change in cash and cash equivalents |
90,127 |
348,075 |
61,608 |
168,741 |
|
Cash and cash equivalents, beginning of period |
1,329,552 |
1,076,671 |
1,358,071 |
1,256,005 |
|
Cash and cash equivalents, end of period |
1,419,679 |
1,424,746 |
1,419,679 |
1,424,746 |
|
Supplemental disclosure of operating cash flows |
|||||
Cash interest received |
3,619 |
3,848 |
12,772 |
12,467 |
|
Cash taxes paid, net |
(27,781) |
(23,521) |
(89,085) |
(193,595) |
December 31, 2014 |
Level 1 |
Level 2 |
Total |
Asset (liability): |
|||
Cash and cash equivalents |
1,416,220 |
- |
1,416,220 |
Foreign exchange derivatives |
- |
6,360 |
6,360 |
Interest rate derivatives |
- |
(7,654) |
(7,654) |
Deposits |
25,204 |
- |
25,204 |
1,441,424 |
(1,294) |
1,440,130 |