NAV CANADA announces first quarter fiscal 2011 financial results

OTTAWA, Jan. 12 /CNW/ - NAV CANADA today released its financial results for the three months ended November 30, 2010. The results show continued success in controlling costs while maintaining safe and efficient air navigation services, as well as more robust air traffic that was up 5.4 per cent from the comparable period in the prior year.

In the first quarter of fiscal 2011, the Company had an excess of expenses over revenues and other income after rate stabilization of $ 2 million. The balance in the rate stabilization account improved by $18 million during the quarter, finishing with a negative* balance of $ 2 million. However, when adjusted for rate setting purposes, there is a positive* "notional" balance of $90 million in the rate stabilization account, which reflects the Company's expectation that the market value portion of the fair value adjustments to the carrying value of its restructured notes and asset-backed commercial paper (ABCP) investments will be recovered over the terms of these investments. The current "notional" balance is essentially equal to its fiscal year 2011 target positive balance of $ 89 million.

"The good news from the quarter was the continued growth in traffic compared to budget and the positive impact on our revenues," said John Crichton, NAV CANADA President & CEO. "This growth, combined with continued efforts by all employees to control costs in line with safety, has allowed us to maintain the positive notional balance in our rate stabilization account at a level consistent with our target for the year.

"Looking ahead, we can see reasons for optimism, but it must be cautious optimism. Although the global economic recovery is beginning to pick up, there is still continued economic uncertainty in areas such as Europe and the U.S. We intend to maintain our focus on safety, service and cost effectiveness, delivering value to our customers whatever the economic conditions may be."

The Company's revenues before rate stabilization for the first quarter of fiscal 2011 were $297 million, compared to $281 million for the comparable period in the previous year.

Operating expenses before rate stabilization for the quarter were $235 million. Operating expenses were $7 million higher than in the first quarter of last year. Management continues to effectively manage headcount and overtime to partially offset somewhat higher compensation levels, pension expenses and inflationary increases.

Interest, depreciation and amortization expense before rate stabilization totalling $65 million was $5 million higher than in the comparable period of the prior year. The fair value of the Company's investments in ABCP restructured notes increased by $18 million (fair value of $221 million) on holdings with a face value of $351 million. Of the total fair value provision of $130 million, $92 million is considered recoverable over the terms of the notes.

The Company's Financial Statements and Management's Discussion and Analysis for the three months ended November 30, 2010 are available on NAV CANADA's website at:

NAV CANADA, the country's civil air navigation services provider, is a private sector, non-share capital corporation financed through publicly-traded debt. 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.


For further information:

John Morris   
Director, Communications 
(613) 563-7032  
      Ron Singer   
Manager, Media Relations  
(613) 563-7303  
Media Information Line: 1-888-562-8226

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