WestJet reports fourth quarter and full-year results

Airline flies a record number of guests and achieves its 51st consecutive profitable quarter

CALGARY, Feb. 6, 2018 /PRNewswire/ - WestJet (TSX: WJA) today announced its fourth quarter and year-end results for 2017, with full-year net earnings of $283.6 million, or $2.42 per diluted share. This compares with net earnings of $295.5 million, or $2.45 per diluted share reported in the full-year 2016. The airline achieved its 51st consecutive quarter of profitability, reporting fourth quarter net earnings of $48.5 million, or $0.42 per diluted share compared to $55.2 million, or $0.47 per diluted share reported in the fourth quarter of 2016. For the full-year and in each quarter of 2017, the airline flew a record number of guests. Based on the trailing twelve months, the airline recorded a return on invested capital of 10.0 per cent, down 0.2 percentage points from the 10.2 per cent reported in the previous quarter.

"In 2017, we continued our evolution toward becoming a global airline while flying a record number of guests and achieving our highest annual load factor in our history. We announced an agreement to enter a joint venture with Delta Airlines, which will give Canadians more access to our low fares and growing network. We also proudly took delivery of Canada's first Boeing 737 MAX aircraft this fall, and it was in service with high reliability before the busy holiday season," said WestJet President and CEO Gregg Saretsky. "WestJetters care to the core by safely providing our guests with award-winning and friendly service every day. I thank each of the more than 13,000 WestJetters for their work and dedication this quarter, especially in light of the severe cold and weather-related operational challenges."

Operating highlights (stated in Canadian dollars)

 

Dividend declarationOn February 5, 2018, WestJet's Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the first quarter of 2018, to be paid on March 30, 2018, to shareholders of record on March 14, 2018. 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 informationCertain information set forth in this news release is forward-looking information within the meaning of applicable securities laws. Such forward-looking information includes, but is not limited to, information respecting the proposed joint venture; the anticipated benefits, amenities, and product offerings expected to be provided to customers as a result of the joint venture; the resulting impact on flight schedules, and other network effects; and implementation of the joint venture following receipt of required approvals and execution of definitive agreements. The forward-looking information contained in this news release is based on certain material factors and assumptions, including, without limitation, with respect to: negotiation of definitive agreements relating to the joint venture on terms and conditions satisfactory to the parties; receipt, in a timely manner and on acceptable terms, of applicable regulatory approvals in respect of the transaction; board approvals being obtained; and the anticipated benefits of the joint venture, including strategic and operational opportunities and benefits. Although WestJet believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements as WestJet can give no assurance that they will prove to be correct. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond WestJet's control. The risks and uncertainties that may impact WestJet include, but are not limited to: potential delays in obtaining applicable regulatory approvals; challenges to the proposed joint venture, or the imposition of conditions in respect thereof, by applicable regulatory authorities that reduce the anticipated benefits of the joint venture or prevent the implementation of such on satisfactory terms or at all; the ability of WestJet to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits; the inherent uncertainties associated with new projects; changes in general economic and competitive conditions; and operational risks inherent in implementing the joint venture including risks related to route scheduling and operations, network management, and information technology and reporting systems. The forward-looking information contained in this news release is also based on WestJet's current forecasts and strategy, the expected demand environment, the utilization of our fleet, the forward-curve for jet fuel price, the expected exchange rate of the Canadian dollar to the U.S. dollar, agreements and bookings, but may vary due to factors including, but not limited to, changes in guest demand, changes in fuel prices, delays in aircraft delivery, 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 sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking information 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.

Non-GAAP measuresThis news release contains disclosure respecting non-GAAP performance measures including, without limitation, CASM, excluding fuel and employee profit share and return on invested capital. These measures are included to enhance the 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 reporting periods. 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 and additional GAAP measures" in WestJet's management's discussion and analysis of financial results for the year ended December 31, 2017, which is available under WestJet's profile on SEDAR at sedar.com, for a further discussion of such non-GAAP measures and a reconciliation of such measures to GAAP. The financial information accompanying this news release was prepared in accordance with International Financial Reporting Standards unless otherwise noted.

Management's discussion and analysis of financial results and consolidated financial statements and notes for the three and twelve months ended December 31, 2017, are available through the Internet in the Media and Investor Relations section of westjet.com or under WestJet's SEDAR profile at sedar.com.

Analyst conference callWestJet will hold its quarterly analysts' conference call today, February 6, 2018, at 8 a.m. MDT (10 a.m. EDT). President and CEO Gregg Saretsky and Executive Vice-President of Finance and CFO Harry Taylor will discuss WestJet's 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 westjet.com.

About WestJetWestJet is proud to be named Best Airline in Canada and one of the best Low Cost Airlines in North America, based on authentic reviews from the travelling public on Trip Advisor, the world's largest travel site. We are one of very few airlines globally that does not commercially overbook. Together with our regional airline, WestJet Encore, we offer scheduled service to more than 100 destinations in North America, Central America, the Caribbean and Europe and to more than 175 destinations in over 20 countries through our airline partnerships. WestJet Vacations offers affordable, flexible vacations to more than 60 destinations and the choice of more than 800 hotels, resorts, condos and villas.  Members of the WestJet Rewards program earn WestJet dollars on flights, vacation packages and more. Members use WestJet dollars towards the purchase of flights and vacations packages to any WestJet destination with no blackout periods, and have access to Member Exclusive fares offering deals to WestJet destinations throughout our network and those of our partner airlines.

WestJet is publicly traded on the Toronto Stock Exchange (TSX) under the symbol WJA. For more information about everything WestJet, please visit westjet.com.  

Recent recognition includes:2017 Five-Star Airline in the Low-Cost Category (The Airline Passenger Experience Association)2017/2016 Canada's Most Trusted Airline (Gustavson School of Business at the University of Victoria)2017 Best Airline in Canada and Travellers' Choice Winner Mid-Sized and Low Cost Airlines – North America (TripAdvisor Travelers' Choice awards for Airlines)2016 Canada's most reputable company for Corporate Social Responsibility (Reputation Institute)2016/2015/2014/2013/2012 Ranked top three for Canadian Brands (Canadian Business Magazine)2016/2015/2014/2013 WestJet RBC World Elite MasterCard ranked #1 in Canada (MoneySense magazine)2015/2011/2010/2008/2007/2006/2005 Canada's Most Admired Corporate Culture (Waterstone Human Capital)2015 Best Employers in Canada (Aon Hewitt)

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Consolidated Statement of Earnings(Stated in thousands of Canadian dollars, except per share amounts)(Unaudited)

 

Consolidated Statement of Financial Position(Stated in thousands of Canadian dollars)(Unaudited)

 

Consolidated Statement of Cash Flows(Stated in thousands of Canadian dollars)(Unaudited)

 

CASM, excluding fuel and employee profit share(Stated in thousands of Canadian dollars, except percentage, mile and 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.

 

Return on invested capital(Stated in thousands of Canadian dollars, except percentages)(Unaudited)

ROIC is a measure commonly used to assess the efficiency with which a company allocates its capital to generate returns. Return is calculated based on our earnings before tax, excluding special items, finance costs and implied interest on our off-balance-sheet aircraft leases. Invested capital includes average long-term debt, average finance lease obligations, average shareholders' equity and off-balance-sheet aircraft operating leases.

 

SOURCE WestJet