MISSISSAUGA, ON, Aug. 13,
2024 /CNW/ - Cargojet Inc. ("Cargojet" or the
"Corporation") (TSX: CJT) announced today financial results for the
second quarter ended June 30,
2024.
Total revenue for the quarter was $230.8
million compared to second quarter 2023 revenue of
$209.7 million. Revenue from domestic
network, ACMI and All-in Charter for the quarter was $191.3 million compared to $171.6 million for the same period in 2023.
Adjusted EBITDA(1) for the quarter was $79.1 million compared to the second quarter 2023
Adjusted EBITDA of $74.3 million. Net
loss for the quarter were $25.0
million (net earnings of $28.9
million excluding warrant valuation and contract asset
amortization) compared to net earnings of $31.1 million for the same period in 2023 (net
earnings of $1.5 million excluding
warrant valuation and contract asset amortization).
Strong cash flow focus generated a Free Cash
Flow(1) inflow of $0.5
million for the three-month period ended June 30, 2024 compared to an outflow of
$18.5 million for the same period in
2023. Net cash generated from operating activities was $48.5 million for the three-month period
ended June 30, 2024, compared to
$58.8 million for the same period in
2023.
"Cargojet continues to identify and execute on opportunities in
the fast-changing global supply chains. Our earlier announcement,
launching a Charter service for fast growing China based e-commerce brands is an example of
our deep understanding of new and emerging air cargo routes".
"While geo-political challenges and broader economic headwinds
continue to affect the overall transportation industry, we remain
focused on continuing to grow our Domestic, ACMI and All-in Charter
revenue," said Jamie Porteous,
Co-Chief Executive Officer.
"A continued focus on controlling costs and maintaining EBITDA
margins has resulted in another very solid quarter. We continue to
be industry leaders in terms of On-time Performance, flexibility,
responsiveness, and adding value to our customers," said
Pauline Dhillon, Co-Chief Executive
Officer. "Our team's commitment to excellence is unwavering, and
this quarter's achievements are a testament to their hard work and
dedication. We are particularly pleased with the loyalty,
dedication, and contributions of every Cargojet team member,"
concluded Pauline Dhillon.
All references to "$" in this press release are to Canadian
dollars.
About Cargojet
Cargojet is Canada's leading
provider of time sensitive premium air cargo services to all major
cities across North America,
providing Dedicated, ACMI and International Charter services and
carries over 25,000,000 pounds of cargo weekly. Cargojet operates
its network with its own cargo fleet of 41 aircraft.
(1) Non-GAAP measures. See "Non-GAAP Financial Measures"
section.
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FINANCIAL
INFORMATION AND OPERATING STATISTICS HIGHLIGHTS
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(Canadian dollars in
millions, except where indicated)
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Three Month Period
Ended
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Six month period
ended
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June
30,
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June
30,
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2024
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2023
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Change
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%
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2024
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2023
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Change
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%
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Domestic network, ACMI
and charter revenues
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$191.3
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$171.6
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$19.7
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11.5 %
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$372.3
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$341.5
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$30.8
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9.0 %
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Fuel surcharge and
other revenues
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$44.9
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$41.3
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$3.6
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8.7 %
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$100.4
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$107.1
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($6.7)
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-6.3 %
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Total revenues
excluding warrant amortization
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$236.2
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$212.9
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$23.3
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10.9 %
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$472.7
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$448.6
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$24.1
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5.4 %
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Amortization of stock
warrant contract assets
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($5.4)
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($3.2)
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($2.2)
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68.8 %
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($10.7)
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($7.0)
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($3.7)
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52.9 %
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Total
revenues
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$230.8
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$209.7
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$21.1
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10.1 %
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$462.0
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$441.6
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$20.4
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4.6 %
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Direct
expenses
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$185.7
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$167.2
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$18.5
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11.1 %
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$372.2
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$353.5
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$18.7
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5.3 %
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Gross
margin
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$45.1
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$42.5
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$2.6
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6.1 %
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$89.8
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$88.1
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$1.7
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1.9 %
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Gross margin -
(%)
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19.5 %
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20.3 %
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-0.8 %
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19.4 %
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20.0 %
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-0.6 %
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Selling, general and
administrative expenses
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$23.6
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$14.5
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$9.1
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62.8 %
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$41.0
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$32.2
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$8.8
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27.3 %
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Net finance costs and
other gains and losses
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$35.2
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($2.3)
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$37.5
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1630.4 %
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$25.2
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($9.7)
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$34.9
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359.8 %
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Share of (gain) loss in
associate
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($0.3)
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($0.4)
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$0.1
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25.0 %
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($0.6)
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$0.2
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($0.8)
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-400.0 %
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(Loss) earnings
before income taxes
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($13.4)
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$30.7
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($44.1)
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-143.6 %
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$24.2
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$65.4
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($41.2)
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-63.0 %
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Income taxes
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11.6
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($0.4)
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$12.0
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3000.0 %
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$16.7
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$3.7
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$13.0
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351.4 %
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Net (loss)
earnings
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($25.0)
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$31.1
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($56.1)
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-180.4 %
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$7.5
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$61.7
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($54.2)
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-87.8 %
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Adjusted net (loss)
earnings(1)
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($0.8)
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$15.8
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($16.6)
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-105.1 %
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$30.2
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$32.7
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($2.5)
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-7.6 %
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(Loss) earnings per
share
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Basic
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($1.53)
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$1.81
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($3.34)
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-184.5 %
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$0.46
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$3.59
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($3.13)
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-87.2 %
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Diluted
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($1.53)
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$1.68
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($3.21)
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-191.1 %
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$0.46
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$3.32
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($2.86)
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-86.1 %
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Adjusted(1)
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($0.05)
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$0.91
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($0.96)
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-105.6 %
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$1.84
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$1.90
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($0.06)
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-3.2 %
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Adjusted EBITDA
(1)
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$79.1
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$74.3
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$4.8
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6.5 %
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$157.5
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$149.3
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$8.2
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5.5 %
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Adjusted EBITDA margin
(1) - (%)
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34.3 %
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35.4 %
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-1.1 %
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34.1 %
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33.8 %
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0.3 %
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Net cash from
operating activities
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$48.5
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$58.8
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($10.3)
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-17.5 %
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$128.8
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$121.9
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$6.9
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5.7 %
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Free cash flow
(1)
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$0.5
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($18.5)
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$19.0
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-102.7 %
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$169.2
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($3.3)
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$172.5
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-5227.3 %
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Operating statistics
(2)
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Operating days
(3)
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51
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50
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1
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2.0 %
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100
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100
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-
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-
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Average domestic
network revenue per operating day (4)
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1.75
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1.61
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0.14
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8.7 %
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1.79
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1.65
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0.14
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8.5 %
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Block hours
(5)
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17,623
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16,819
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804
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4.8 %
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34,938
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35,656
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(718)
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-2.0 %
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B757-200
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17
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15
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2
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17
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15
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2
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B767-200
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3
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4
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(1)
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3
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4
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(1)
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B767-300
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21
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18
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3
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21
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18
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3
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Cargo operating
fleet
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41
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37
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4
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10.8 %
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41
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37
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4
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10.8 %
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Head count
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1,874
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1,817
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57
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3.1 %
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1,874
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1,817
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57
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3.1 %
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1.
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Non-GAAP measures. See
"Non-GAAP Financial Measures" section.
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2.
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The definitions for the
Operating statistics included in this table are provided in the
notes below.
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3.
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Operating days refer to
the days on which the full domestic network air cargo network is in
operation. The Corporation's domestic network air cargo network
operates primarily from Monday to Thursday with a reduced network
operating on Friday, weekends and on certain weekdays that are
adjacent to certain statutory holidays.
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4.
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Average domestic
network revenue per operating day refers to total domestic network
revenues earned by the Corporation's per operating day.
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5.
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Block hours refer to
the total duration of a flight from the time the aircraft releases
its brakes when it initially moves from the airport parking area
prior to flight, to the time the brakes are set when it arrives at
the airport parking area after the completion of the
flight.
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(1) Non-GAAP Measures
Below is a description of certain non-GAAP financial measures
and non-GAAP financial ratios used by the Corporation to provide
readers with additional information on its financial and operating
performance. Non-GAAP financial ratios are ratios or percentages
that are calculated using a non-GAAP financial measure. Such
measures are not recognized measures for financial statement
presentation under GAAP, do not have standardized meanings, may not
be comparable to similar measures presented by other entities and
should not be considered a substitute for or superior to GAAP
results.
"Adjusted EBITDA" is used by the Corporation to assess earnings
before interest, taxes, depreciation, amortization, gain or loss on
disposal of capital assets, share-based compensation, gain or loss
on disposal of property, plant and equipment and assets held for
sale, impairment and gain on insurance claim, fair value increase
or decrease on stock warrant, amortization of stock warrant
contract assets, gain or loss on fair value or settlement of swap
derivatives, unrealized foreign exchange gains or losses, gains or
losses on settlement of debts, share of gain or loss in associate,
and provision for employee pension, as these costs can vary
significantly among airlines due to differences in the way airlines
finance their aircraft and other assets. The most directly
comparable financial measure disclosed in the Corporation's
financial statements is net earnings.
"Adjusted EBITDA margin" is defined as Adjusted EBITDA as a
percentage of revenue. Adjusted EBITDA margin is commonly used in
the airline industry and is used by the Corporation as a means to
measure the operating margin excluding certain items as described
above.
"Free Cash Flow" is used by the Corporation to evaluate its
financial strength and performance of its business, indicating the
amount of cash the Corporation can generate from operations after
capital expenditures.
Prior to the fourth quarter of 2023, the Corporation used two
non-GAAP measures related free cash flow, "Standardized Free Cash
Flow" and "Adjusted Free Cash Flow". Standardized Free Cash Flow
was defined as cash flows from operating activities as reported in
the IFRS financial statements, including operating cash flows
provided from or used in discontinued operations; total maintenance
capital expenditures minus proceeds from the disposition of capital
assets other than those of discontinued operations, as reported in
the IFRS financial statements; and dividends, when stipulated,
unless deducted in arriving at cash flows from operating
activities. Adjusted Free Cash Flow was defined by the Corporation
as Standardized Free Cash Flow less operating cash flows provided
from or used in discontinued operations, changes in working
capital, plus the provision for current income taxes.
In the fourth quarter of 2023, to simplify the non-GAAP measures
related to free cash flow, the Corporation replaced Standardized
Free Cash Flow and Adjusted Free Cash Flow with one measure.
"Free Cash Flow" is defined as cash flows from operating
activities less purchases of property, plant and equipment plus
proceeds from disposals of property, plan and equipment and assets
held for sale, and insurance proceeds related to these assets.
Wherever presented, prior periods free cash flow is revised
accordingly.
"Adjusted net earnings" and "Adjusted net earnings per share"
("Adjusted EPS") are defined as net earnings and net earnings per
basic share excluding impairment and gain on insurance claim, fair
value increase or decrease on stock warrant, amortization of stock
warrant contract assets, gain or loss on swap derivatives, and
unrealized foreign exchange gain or loss. These items are excluded
as they may distort the analysis of certain business trends and
render comparative analysis to other airlines less meaningful.
Adjusted net earnings and Adjusted EPS are used to assess the
overall financial performance of its business. The most directly
comparable financial measure disclosed in the Corporation's
financial statements is net earnings.
Reconciliations of non-GAAP measures are provided below and in
the "Non-GAAP Measures" section of the Corporation's Management's
Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") for the three month period ended
June 30, 2024 and is available on
SEDAR+ at www.sedarplus.ca.
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Three Month Period
Ended
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Six Month Period
Ended
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(Unaudited -
Canadian dollars in millions, except where
indicated)
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June
30,
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June
30,
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2024
|
2023
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2024
|
2023
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Calculation of
EBITDA and Adjusted EBITDA
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$
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$
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$
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$
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Net (loss)
earnings
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(25.0)
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31.1
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7.5
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61.7
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Add:
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Interest
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15.2
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13.5
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30.5
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23.6
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Provision (benefit) of
deferred taxes
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11.6
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(0.4)
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16.7
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3.7
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Depreciation of
property, plant and equipment
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42.5
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43.3
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87.3
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83.3
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EBITDA
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44.3
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87.5
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142.0
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172.3
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Add:
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Share-based
compensation
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9.7
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(0.2)
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10.7
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3.1
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Gain on disposal of
property, plant and equipment
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1.2
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2.7
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(17.3)
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2.7
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Impairment on property,
plant and equipment
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-
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-
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1.1
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-
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Fair value adjustment
on warrant valuation and amortization of stock warrant contract
assets
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53.9
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(29.6)
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42.2
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(50.3)
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(Gain) loss on swap
derivative
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(30.4)
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15.0
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(22.6)
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22.0
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Unrealized foreign
exchange loss (gain)
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0.7
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(0.7)
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2.0
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(0.7)
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Share of (gain) loss in
associate
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(0.3)
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(0.4)
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(0.6)
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0.2
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Adjusted
EBITDA
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79.1
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74.3
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157.5
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149.3
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Revenue
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230.8
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209.7
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462.0
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441.6
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Adjusted EBITDA
margin
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34.3 %
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35.4 %
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34.1 %
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33.8 %
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Three Month Period
Ended
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Six Month Period
Ended
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(Unaudited -
Canadian dollars in millions)
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June
30,
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June
30,
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2024
|
2023
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2024
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2023
|
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Calculation of Free
Cash Flow
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$
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$
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$
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$
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$
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$
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$
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$
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Net cash from operating
activities
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48.5
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58.8
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128.8
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121.9
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Purchase of property,
plant and equipment (1)
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(48.0)
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(113.8)
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(60.9)
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(161.7)
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Proceeds from disposal
of property, plant and equipment and assets held for
sale
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-
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36.5
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101.3
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36.5
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Free cash
flow
|
0.5
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(18.5)
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169.2
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(3.3)
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Three Month period
ended
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Six month period
ended
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(Unaudited -
Canadian dollars in millions, except where
indicated)
|
June
30,
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June
30,
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2024
|
2023
|
2024
|
2023
|
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Calculation of
Adjusted Earnings and Adjusted EPS
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$
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$
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$
|
$
|
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Net (loss)
earnings
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(25.0)
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31.1
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7.5
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61.7
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Add:
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Impairment on property,
plant and equipment
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-
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-
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1.1
|
-
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Fair value adjustment
on stock warrant and amortization of stock warrant contract
assets
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53.9
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(29.6)
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42.2
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(50.3)
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(Gain) loss on swap
derivative
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(30.4)
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15.0
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(22.6)
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22.0
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Unrealized foreign
exchange loss (gain)
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0.7
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(0.7)
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2.0
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(0.7)
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Adjusted net (loss)
earnings
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(0.8)
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15.8
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30.2
|
32.7
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Weighted average
number of shares - basic (in millions of shares)
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16.4
|
17.2
|
16.4
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17.2
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Adjusted
EPS
|
(0.05)
|
0.91
|
1.84
|
1.90
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Notice on Forward Looking Statements:
Certain statements contained herein constitute "forward-looking
statements", including with respect to the Corporation's intention
to continue rationalizing costs and capital expenditures to
generate cash, strengthen strategic customer relationships, and
drive shareholder value. Forward-looking statements look into the
future and provide an opinion as to the effect of certain events
and trends on the business. Forward-looking statements may include
words such as "plans," "intends," "anticipates," "should,"
"estimates," "expects," "believes," "indicates," "targeting,"
"suggests" and similar expressions. These forward-looking
statements are based on current expectations and entail various
risks and uncertainties. Reference should be made to the
Corporation's most recent Annual Information Form ("AIF") filed
with the Canadian securities regulators, and its most recent Annual
Consolidated Financial Statements and Notes thereto and related
MD&A, for a summary of major risks. Actual results may
materially differ from expectations, if known and unknown risks or
uncertainties affect our business, or if our estimates or
assumptions prove inaccurate. The Corporation cautions that the
list of risk factors and uncertainties described in the AIF and
MD&A is not exhaustive and other factors could also adversely
affect its results. Readers are urged to carefully consider the
risks, uncertainties and assumptions in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such information. The forward-looking information
contained herein represents our expectations as of the date hereof
(or as the date they are otherwise stated to be made), and are
subject to change after such date. However, we disclaim any
intention or obligation or undertaking to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required under applicable
securities laws. In the event that we update any forward-looking
statement, no inference should be made that we will make additional
updates with respect to that statement, related matters, or any
other forward-looking statement.
SOURCE Cargojet Inc.