WestJet reports record full-year earnings per share of $1.78, up 68 per cent

 WestJet reports record full-year earnings per share of $1.78, up 68 per cent

PR Newswire

CALGARY, Feb. 6, 2013

Airline achieves fourth quarter earnings per share of $0.46, an increase of 77
per cent
Announces increase to quarterly dividend and intent to pursue a further normal
course issuer bid

CALGARY, Feb. 6, 2013 /PRNewswire/ - WestJet (TSX: WJA) today announced its
fourth quarter and year-end results for 2012. The airline reported fourth
quarter net earnings of $60.9 million, or $0.46 per share and full-year net
earnings of $242.4 million, or $1.78 per share; up significantly from the net
earnings of $148.7 million, or $1.06 per share, reported for 2011. These
financial results mark WestJet's 31^st consecutive quarter of profitability.
Based on the trailing twelve months, the airline achieved a return on invested
capital of 13.7 per cent, up from the 12.7 per cent reported last quarter.

"We are  very  pleased with  the  positive  momentum generated  in  2012  that 
culminated with us reporting record annual earnings, record high load  factors 
and for the second  consecutive quarter, we surpassed  our return on  invested 
capital target of 12 per cent by  achieving 13.7 per cent for the year,"  said 
WestJet President  and  CEO Gregg  Saretsky.  "Fundamentally our  momentum  is 
traced to the commitment and dedication  of our over 9,000 WestJetters, and  I 
am very proud  of the  positive and caring  attitude they  exemplify each  and 
every day."

Operating highlights (stated in Canadian dollars)

                    Q4 2012   Q4 2011  Change  Full-Year  Full-Year  Change
                                                    2012       2011
Net earnings           $60.9     $35.6    71.3%    $242.4     $148.7    63.0%
(millions)
Diluted earnings per   $0.46     $0.26    76.9%    $1.78      $1.06     67.9%
share
Total revenues        $860.6    $781.5    10.1%   $3,427.4   $3,071.5   11.6%
(millions)
Operating margin       10.6%     7.6%    3.0 pts   11.0%       8.4%    2.6 pts
ASMs (available seat   5.487     5.329    3.0%     22.064     21.186    4.1%
miles) (billions)
RPMs (revenue
passenger miles)       4.493     4.194    7.1%     18.263     16.891    8.1%
(billions)
Load factor            81.9%     78.7%   3.2 pts   82.8%      79.7%    3.1 pts
Segment Guests       4,314,024 3,996,593  7.9%   17,423,352 16,040,682  8.6%
Yield (revenue per
revenue passenger      19.16     18.64    2.8%     18.77      18.18     3.2%
mile) (cents)
RASM (revenue per
available seat mile)   15.68     14.67    6.9%     15.53      14.50     7.1%
(cents)
CASM (cost per
available seat mile)   14.01     13.55    3.4%     13.83      13.29     4.1%
(cents)
CASM, excluding fuel
and employee profit    9.32      9.03     3.2%      9.12       8.85     3.1%
share (cents)*

*Refer to reconciliations in the accompanying tables for further information
regarding calculations.

Today, WestJet also announced its intention,  upon the expiry of the  12-month 
period of its 2012  normal course issuer  bid, to make  an application to  the 
Toronto Stock Exchange to initiate a  further normal course issuer bid for  up 
to 5 per cent of the currently issued and outstanding shares. The airline also
declared  an  increase  to  its  quarterly  dividend  from  $0.08  to   $0.10. 
"Continuing the share buy-back program and increasing the dividend signals our
confidence in the strength of the business and our commitment to return  value 
to shareholders," added Gregg Saretsky.

Throughout 2012,  WestJet was  able to  expand its  virtual network  with  the 
implementation of 13 new interline partnerships, and by evolving four existing
interline partnerships (Delta  Air Lines, Korean  Air, China Eastern  Airlines 
and British Airways) into code-share relationships, bringing the total  number 
of airline partnerships to thirty worldwide.

"Our positive momentum continues into 2013 as we launch WestJet Encore, add to
and evolve our  airline partnerships and  enhance value to  more business  and 
leisure guests. Our introduction of fare bundles and WestJet Plus will include
options  for  more  comfort,  convenience  and  flexibility  to  our  guests," 
commented Gregg Saretsky.

WestJet expects moderate  growth in  RASM and  margin expansion  in the  first 
quarter of  2013, notwithstanding  the difficult  prior year  comparisons  and 
increases in system wide capacity. For the full year 2013, the airline expects
CASM, excluding fuel  and employee profit  share, to increase  between two  to 
three percent year-over-year. For the  first quarter of 2013, WestJet  expects 
fuel costs to range between $0.94 and $0.96 per litre.

Dividend declaration

On February 5, 2013 WestJet's Board  of Directors declared a cash dividend  of 
$0.10 per common voting share and variable voting share for the first  quarter 
of 2013, to be paid on March 28, 2013, to shareholders of record on March  13, 
2013. 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 information

Certain information  set  forth  in  this  news  release,  including,  without 
limitation, information  regarding RASM  growth and  margin expansion  in  the 
first quarter  of  2013,  fuel costs  in  the  first quarter  of  2013,  CASM, 
excluding fuel and employee profit share for the full-year 2013, initiating  a 
normal course issuer bid and commitment  to return value to shareholders,  the 
launch of the regional airline WestJet Encore, our airline partnerships,  fare 
bundles and WestJet Plus is forward-looking information within the meaning  of 
applicable  Canadian   securities  laws.   By  its   nature,   forward-looking 
information is subject to numerous risks and uncertainties, some of which  are 
beyond WestJet's control.  The forward-looking information  contained in  this 
news release is based on WestJet's current budget, forecasts and strategy, the
expected demand environment, our fleet plan, forward-curve jet fuel prices for
the first quarter  of 2013,  and the expected  exchange rate  of the  Canadian 
dollar to the U.S. dollar in the  first quarter of 2013, along with  available 
implementation plans, agreements  and bookings,  but may vary  due to  factors 
including, but not  limited to, changes  in consumer demand,  changes in  fuel 
prices, delays in aircraft delivery, changes in guest demand, 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 
www.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.

This 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,  2012, which  is  available  under 
WestJet's profile on SEDAR at www.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  year ended  December 31,  2012,  are 
available through the Internet in the Media and Investor Relations section  of 
www.westjet.com or under WestJet's SEDAR profile at www.sedar.com.

Analyst conference call

WestJet will hold its quarterly  analysts' conference call today, February  6, 
2013, at  9 a.m.  MST (11  a.m. EST).  President and  CEO Gregg  Saretsky  and 
Executive  Vice-President  of  Finance  and  CFO  Vito  Culmone  will  discuss 
WestJet's 2012 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 
www.westjet.com.

About WestJet

WestJet is Canada's most preferred  airline, offering scheduled service to  81 
destinations in North America, Central  America and the Caribbean. Powered  by 
an award-winning culture  of care,  WestJet has pioneered  low-cost flying  in 
Canada. Recognized nationally  as a top  employer, WestJet now  has more  than 
9,000  WestJetters   across  Canada.   Operating  a   fleet  of   101   Boeing 
Next-Generation  737  aircraft  with   future  confirmed  deliveries  for   an 
additional 34 Boeing Next-Generation  737 aircraft through  2018 and plans  to 
launch a low-cost regional airline in 2013,  WestJet strives to be one of  the 
five most successful international airlines in the world.

Connect with WestJet on Facebook at www.facebook.com/westjet
Follow WestJet on Twitter at www.twitter.com/westjet
Subscribe to WestJet on YouTube at www.youtube.com/westjet

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

                                                         
                                       Three months ended Twelve months ended
                                           December 31         December 31
                                         2012      2011     2012      2011
                                                                         
Revenue:                                                                  
 Guest                                   783,750  711,246 3,133,492 2,790,299
 Other                                    76,890   70,299   293,917   281,241
                                         860,640  781,545 3,427,409 3,071,540
Expenses:                                                                 
 Aircraft fuel                           246,216  235,574   992,787   915,878
 Airport operations                      118,051  107,295   454,114   421,561
 Flight operations and navigational       91,242   84,814   366,871   344,442
  charges
 Sales and distribution                   76,509   72,958   313,082   296,954
 Marketing, general and administration    59,690   50,869   208,620   186,290
 Depreciation and amortization            46,175   44,312   185,401   174,751
 Aircraft leasing                         43,729   41,850   173,412   165,571
 Inflight                                 40,199   36,144   156,411   139,478
 Maintenance                              35,590   42,816   154,406   146,260
 Employee profit share                    11,639    5,662    46,585    23,804
                                         769,040  722,294 3,051,689 2,814,989
Earnings from operations                   91,600   59,251   375,720   256,551
                                                                         
Non-operating income (expense):                                           
 Finance income                            4,973    4,383    18,391    15,987
 Finance costs                          (11,636) (14,446)  (48,900)  (60,911)
 Gain (loss) on foreign exchange             518    (908)     1,061     2,485
 Gain (loss) on disposal of property          88     (43)       469      (54)
  and equipment
 Loss on fuel derivatives                      -    1,597   (6,512)   (6,052)
                                         (6,057)  (9,417)  (35,491)  (48,545)
Earnings before income tax                 85,543   49,834   340,229   208,006
                                                                         
Income tax expense (benefit):                                             
 Current                                   8,654      274    66,230     1,236
 Deferred                                 15,945   13,976    31,607    58,068
                                          24,599   14,250    97,837    59,304
Net earnings                               60,944   35,584   242,392   148,702
                                                                         
Earnings per share:                                                       
 Basic                                      0.46     0.26      1.79      1.06
 Diluted                                    0.46     0.26      1.78      1.06

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

                                                      
                                           December 31 December 31
                                               2012        2011
Assets                                                           
Current assets:                                                  
 Cash and cash equivalents                   1,408,199   1,243,605
 Restricted cash                                51,623      48,341
 Accounts receivable                            37,576      34,122
 Prepaid expenses, deposits and other          101,802      66,936
 Inventory                                      35,595      31,695
                                             1,634,795   1,424,699
Non-current assets:                                              
 Property and equipment                      1,985,599   1,911,227
 Intangible assets                              50,808      33,793
 Other assets                                   75,413     103,959
Total assets                                  3,746,615   3,473,678
                                                                
Liabilities and shareholders' equity                             
Current liabilities:                                             
 Accounts payable and accrued liabilities      460,003     307,109
 Advance ticket sales                          480,947     432,186
 Non-refundable guest credits                   47,859      43,485
 Current portion of long-term debt             164,909     158,832
 Current portion of maintenance provisions      34,135         245
                                             1,187,853     941,857
Non-current liabilities:                                         
 Maintenance provisions                        145,656     151,645
 Long-term debt                                574,139     669,880
 Obligations under finance leases                    -       3,174
 Other liabilities                               9,914      10,449
 Deferred income tax                           356,748     326,456
Total liabilities                             2,274,310   2,103,461
                                                                
Shareholders' equity:                                            
 Share capital                                 614,899     630,408
 Equity reserves                                69,856      74,184
 Hedge reserves                                (5,746)     (3,353)
 Retained earnings                             793,296     668,978
Total shareholders' equity                    1,472,305   1,370,217
                                                                
Total liabilities and shareholders' equity    3,746,615    3,473,678

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

                                                         
                                      Three months ended  Twelve months ended
                                           December 31         December 31
                                        2012      2011      2012      2011
                                                                         
Operating activities:                                                     
Net earnings                              60,944    35,584   242,392   148,702
Items not involving cash:                                                 
     Depreciation and amortization       46,175    44,312   185,401   174,751
     Change in long-term maintenance      7,859    15,981    34,426    38,522
      provisions
     Change in other liabilities              7     (198)     (383)     (313)
     Amortization of hedge                  350       350     1,400     1,400
      settlements
     Loss on fuel derivatives                 -   (1,597)     6,512     6,052
     (Gain) loss on disposal of            (88)        43     (469)        54
      property and equipment
     Share-based payment expense          3,121     2,538    12,815    12,553
     Deferred income tax expense         15,945    13,976    31,607    58,068
     Finance income                     (4,973)   (4,383)  (18,391)  (15,987)
     Finance costs                       11,636    14,446    48,900    60,911
     Unrealized foreign exchange            604        66   (1,487)     1,453
      (gain) loss
Change in non-cash working capital      (48,136)  (32,935)   173,563    89,739
Change in restricted cash                (2,981)   (5,869)   (3,282)  (19,758)
Change in other assets                   (1,299)       984   (6,894)   (4,344)
Cash taxes received (paid)                 (219)     (391)     (950)        26
Cash interest received                     4,462     4,057    17,780    14,631
Purchase of shares pursuant to                 -         -   (1,306)         -
compensation plans
                                         93,407    86,964   721,634   566,460
                                                                         
Investing activities:                                                     
Aircraft additions                      (31,671)   (4,975) (218,116)  (61,265)
Other property and equipment and         (9,971)  (32,041)  (51,191)  (57,108)
intangible additions
                                       (41,642)  (37,016) (269,307) (118,373)
                                                                         
Financing activities:                                                     
Increase in long-term debt                     -         -    72,995         -
Repayment of long-term debt             (41,405)  (62,021) (162,678) (199,225)
Decrease in obligations under finance       (19)      (18)      (75)     (108)
leases
Shares repurchased                      (33,193)         - (112,065)  (74,570)
Dividends paid                          (10,577)   (6,914)  (37,549)  (35,000)
Issuance of shares pursuant to                36         -       198        34
compensation plans
Cash interest paid                      (10,178)  (12,088)  (43,055)  (51,722)
Change in non-cash working capital       (1,458)   (2,345)   (5,825)   (2,084)
                                       (96,794)  (83,386) (288,054) (362,675)
                                                                         
Cash flow from operating, investing     (45,029)  (33,438)   164,273    85,412
and financing activities
Effect of foreign exchange on cash and       294     (576)       321   (1,123)
cash equivalents
Net change in cash and cash             (44,735)  (34,014)   164,594    84,289
equivalents
                                                                         
Cash and cash equivalents, beginning   1,452,934 1,277,619 1,243,605 1,159,316
of period
                                                                         
Cash and cash equivalents, end of      1,408,199 1,243,605 1,408,199 1,243,605
period

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.

                                                
             Three months ended December 31           Twelve months ended December 31
             2012          2011        Change         2012           2011        Change
CASM,                                                                                
excluding
fuel and
employee
profit
share
Operating       769,040       722,294      46,746      3,051,689      2,814,989     236,700
expenses
Aircraft      (246,216)     (235,574)    (10,642)      (992,787)      (915,878)    (76,909)
fuel
expense
Employee       (11,639)       (5,662)     (5,977)       (46,585)       (23,804)    (22,781)
profit
share
expense
Operating       511,185       481,058      30,127      2,012,317      1,875,307     137,010
expenses,
adjusted
ASMs      5,487,467,646 5,328,928,405 158,539,241 22,063,583,754 21,186,304,409 877,279,345
CASM,              9.32          9.03        3.2%           9.12           8.85        3.1%
excluding
above
items
(cents)

Return on invested capital (ROIC)
(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
earnings before tax, excluding special items, finance costs and implied
interest on 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.

                                                                  
                                                  2012      2011     Change
Return on invested capital                                                 
Earnings before income taxes                       340,229   208,006   132,223
Add:                                                                       
 Finance costs                                     48,900    60,911  (12,011)
 Implicit interest in operating leases^(i)         91,041    86,925     4,116
                                                  480,170   355,842   124,328
Invested capital:                                                          
 Average long-term debt^(ii)                      783,880   927,757 (143,877)
 Average obligations under finance leases^(iii)     1,625     3,303   (1,678)
 Average shareholders' equity                   1,421,261 1,337,225    84,036
 Off-balance-sheet aircraft leases^(iv)         1,300,590 1,241,783    58,807
                                                3,507,356 3,510,068   (2,712)
Return on invested capital                           13.7%     10.1%  3.6 pts.

(i)   Interest implicit in operating leases is equal to 7.0 per cent of
           7.5 times the trailing 12 months of aircraft lease expense. 7.0 per
           cent is a proxy and does not
           necessarily represent actual for any given period.
(ii)  Average long-term debt includes the current portion and long-term
           portion.
(iii) Average obligations under finance leases include the current
           portion and long-term portion.
(iv)  Off-balance-sheet aircraft leases are calculated by multiplying the
           trailing 12 months of aircraft leasing expense by 7.5. At December
           31, 2012, the trailing 12
           months of aircraft leasing costs totaled $173,412 (December 31,
           2011 - $165,571).




SOURCE WestJet

Contact:

WestJet Media Relations
1-888-WJ-4-NEWS (1-888-954-6397)
Email:media@westjet.com

WestJet Investor Relations
1-877-493-7853
Email:investor_relations@westjet.com

Website:www.westjet.com
 
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