July 12, 2012 16:01 ET

NAV CANADA Announces Third Quarter Financial Results

OTTAWA, ONTARIO--(Marketwire - July 12, 2012) - NAV CANADA today released its financial results for the three and nine months ended May 31, 2012. The third quarter results show continued success in controlling costs while maintaining safe and efficient air navigation services in a period when air traffic levels were similar to those in the comparable period in the prior fiscal year.

In the third quarter of fiscal 2012, the Company has achieved positive financial performance, as evidenced by an improvement of $16 million in the rate stabilization account, finishing with a positive* balance of $18 million. When adjusted for rate setting purposes, there is a positive* "notional" balance of $92 million in the rate stabilization account, which is equal to its target balance.

"The revenue picture remains stable; however, traffic trends and recent global economic news warrant continued caution," said John Crichton, President & CEO. "Management and employees remain focused on ensuring strong financial performance and controlling costs, consistent with our safety mandate. The efficiencies we have achieved in previous years have positioned us well for the current climate."

The Company's revenues before rate stabilization for the third quarter of fiscal 2012 were $303 million, compared to $300 million in the comparative period for the previous fiscal year.

Operating expenses before rate stabilization for the third quarter were $256 million, which was $8 million higher than in the third quarter of the last fiscal year. Management continues to successfully manage its costs, largely offsetting higher compensation levels, benefit costs and inflationary increases.

Interest, depreciation and amortization expense before rate stabilization totalling $61 million was $1 million lower than in the comparable period in the previous fiscal year.

Positive fair value adjustments in the third quarter contributed $10 million to other income. As at May 31, 2012, the fair value of the Company's investments in ABCP restructured and non-restructured notes is $225 million on holdings with a face value of $307 million. Of the total fair value variances from face value of $82 million, $74 million is considered recoverable over the term of the notes.

Based on the above, the Company had an excess of expenses over revenues and other income of $13 million for the quarter. Given the seasonality of air traffic and the fact that our costs are predominantly fixed in nature, an excess of expenses over revenues during the quarter was expected. Excluding rate stabilization adjustments, expenses exceeded revenues and other income by $4 million for the quarter.

The Company's Financial Statements and Management's Discussion and Analysis for the three and nine months ended May 31, 2012 can be found at:

- Financial Statements

- Management's Discussion and Analysis

Marking 15 years as Canada'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.

* A positive/negative balance in the rate stabilization account represents a liability/asset on the Company's consolidated balance sheet, reflecting amounts returnable to/recoverable from 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.

Contact Information

  • Michelle Bishop
    Director, Government and Public Affairs
    (613) 563-7520

    Ron Singer
    Manager, Media Relations
    (613) 563-7303

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