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)
í
(144)
í
(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