NAV CANADA announces first quarter financial results
(Ottawa, January 14, 2015) – NAV CANADA (the “Company”) today released its financial results for the three months ended November 30, 2014. The results demonstrate the Company’s continuing ability to control costs during a period in which air traffic volumes grew by 5.3 per cent compared to the same period in the prior fiscal year.
The Company’s fiscal year runs from September 1 to August 31. In the first quarter of fiscal 2015, the Company achieved positive free cash flow(1) and strong financial performance as evidenced by an improvement in its rate stabilization account, finishing with a positive(2) balance of $81 million. When adjusted for rate setting purposes, there is a positive(2) “notional” balance of $98 million in the rate stabilization account, which is equal to its target balance.
Speaking at the Company’s Annual General Meeting held earlier today in Ottawa, John Crichton, President & CEO noted that improvements to technology and procedures not only contribute to the safety and efficiency of air travel, they also help improve the Company’s productivity.
“This is reflected in our financial results for fiscal 2014, which show our continued success in controlling costs while maintaining safe and efficient air navigation services,” said Crichton in his address. “I am pleased to note that we continue to hold service charges steady, as we have for a decade. This 10-year track record of no overall increase in rates is unmatched in most industries anywhere, and the credit for this achievement goes to our people.
”The Company’s revenues before rate stabilization for the first quarter of fiscal 2015 were $325 million, compared to $308 million in the first quarter of fiscal 2014, mainly due to the growth in air traffic volumes.
Operating expenses before rate stabilization for the first quarter of fiscal 2015 were $265 million as compared to $251 million over the same period in fiscal 2014, mainly due to higher compensation levels, higher pension expense and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalling $60 million was in line with the comparable period in the previous fiscal year.
Other income before rate stabilization for the first quarter of fiscal 2015 was $4 million as compared to $9 million over the same period in fiscal 2014. As at November 30, 2014, the fair value of the Company’s investments in ABCP restructured and non-restructured notes is $279 million on holdings with a face value of $297 million. Of the total fair value variances from face value of $18 million, $17 million is considered recoverable over the terms of the notes.
Based on the above, the Company had an excess of revenue and other income over expenses before rate stabilization of $4 million for the first quarter of fiscal 2015.
The Company’s Financial Statements and Management's Discussion and Analysis for the three months ended November 30, 2014 can be found at:
NAV CANADA is the country’s private sector civil air navigation services provider. With operations from coast to coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.
(1) Free cash flow is a non-GAAP financial measure used by NAV CANADA to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by Canadian GAAP and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures and investments in Aireon LLC and other subsidiaries. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources.
(2) A positive balance in the rate stabilization account represents a liability on the Company’s balance sheet, reflecting amounts returnable to customers through future customer service charges.
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This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.