NAV CANADA announces year end financial results
(Ottawa, October 24, 2014) – NAV CANADA (the “Company”) today released its financial results for the year ended August 31, 2014. The results show continued success in controlling costs while maintaining safe and efficient air navigation services, as well as growth in air traffic volumes of 3.5 per cent over the prior fiscal year.
In fiscal 2014, 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 $76 million. When adjusted for rate setting purposes, there is a positive(2) “notional” balance of $93 million in the rate stabilization account, which is equal to its target balance.
“We have seen a steady recovery of air traffic volumes throughout the fiscal year. There was modest growth in every month – a trend which started in the third quarter of fiscal 2013,” said John Crichton, President & CEO. “It has now been 10 years since our last overall rate increase and our customers continue to benefit from two rate decreases that were implemented during that period.
“At the same time, we have developed and implemented world-leading air traffic management technologies and systems that have improved safety and efficiency in Canadian skies. It is a testament to the dedication and ingenuity of our employees that we have been able to accomplish so much.”
The Company’s revenues before rate stabilization for fiscal 2014 were $1,272 million, compared to $1,231 million in the previous fiscal year, mainly due to the growth in air traffic volumes.
Operating expenses before rate stabilization for fiscal 2014 were $1,043 million as compared to $997 million for fiscal 2013, mainly due to higher compensation levels, higher pension expense and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalling $241 million was in line with the previous fiscal year.
Positive fair value adjustments on investments in fiscal 2014 contributed $28 million to other income before rate stabilization. As at August 31, 2014, the fair value of the Company’s investments in ABCP restructured and non-restructured notes is $289 million on holdings with a face value of $307 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 $23 million for the year.
The Company’s Financial Statements, Management's Discussion and Analysis and Annual Information Form for the year ended August 31, 2014 can be found at:
• Financial Statements
• Annual Information Form
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 through operations and investment activities. 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.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.
For further information, please contact:
Director, Government and Public Affairs
Manager, Media Relations
Media Information Line: 1-888-562-8226
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.