Qantas 2011 Annual Report Download - page 20

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THE QANTAS GROUP 18
for the year ended 30 June 2011
Review of Operations continued
Capital Expenditure Supported by Strong Balance Sheet and Operating Cash Flows
Operating cash ows grew to $. billion, an increase of  per cent on the prior year result of $, million. This reects the Group’s growth in
earnings and improvements in working capital.
The Group invested $. billion in capital expenditure during the year. This includes the purchase of  aircraft, progress payments on future
deliveries, and continued investment in customer product and infrastructure.
Qantas Group cash was $. billion at  June , a decrease of $ million from  June . This reects the use of cash to fund
a number of aircraft purchases and the deconsolidation of $ million of cash held in Jetset Travelworld Group.
Cash Flow Summary

$M

$M
Change
$M
Change
%
Cash at beginning , , 
Operating cash ow , ,  
Investing cash ow (,) (,) () 
Financing cash ow    
Effect of foreign exchange on cash () –() ()
Cash at year end , , () ()
The Group’s balance sheet, operating cash ows and capital position remain strong. A conservative approach to capital management and
strengthening Operating cash ows provide ongoing exibility to support capital expenditure and other funding requirements, while supporting
an investment grade credit rating. At  June  the Group’s gearing ratio was  per cent.
Debt and Gearing Analysis
Net debt$M , ,  
Net debt including off balance sheet debt$M , ,  
Equity (excluding hedge reserves) $M , , 
Net debt to net debt and equity ratio :   : 
. Includes fair value of hedges related to debt and aircraft security deposits.
. Includes non-cancellable operating leases. Non-cancellable operating leases are a representation assuming assets are owned and debt funded and are not consistent with the
disclosure requirements of AASB: Leases.
. Gearing ratio is Net debt to net debt and equity (including balance sheet debt from operating leases excluding hedge reserves).
Fleet
The Qantas Group remains committed to a eet strategy that supports its objectives of two strong complementary brands and provides
for long-term eet renewal, simplication and growth, whilst retaining signicant exibility.
At  June  the Qantas Group eet comprised  aircraft. During the year,  aircraft ( purchased and nine leased) were newly
entered into service:
— Qantas – four Airbus As, one A-, ve Boeing B-s and one Bombardier Q
— Jetstar, including Jetstar Asia –  A-s, two A-s
— Qantas Freight – one B- Freighter
In addition, the Group added nine aircraft through the acquisition of the Network Aviation Group:
— Two Fokker Fs and seven Embraer EMB  Brasilia
The Group retired three owned aircraft (two B-s and one B-) during the year and returned one leased B-.
For further details refer to the Qantas Group Aircraft in Service table on page .
Qantas
Qantas’ Underlying EBIT was $ million for the year ended  June , an increase of $ million on the prior year result of $ million.
The result is  per cent above the prior year, driven by a  per cent increase in total revenue.
Total revenue $M , , 
Seat factor %. . (.) ()
Underlying EBIT $M    
Qantas achieved signicant improvements in yield on increased capacity ( per cent). Revenue recovery continued across both international
and domestic business.
The result was achieved despite the signicant operational and nancial challenges of the disruptions to the A eet, weather events and
natural disasters during the year. These events impacted scheduling and disrupted thousands of ights between November  and June
. The total nancial impact of weather events and natural disasters on the Qantas segment was $ million.
In addition, Qantas faced signicant increases in the cost of fuel during the year, which were partially recovered through fare price and fuel
surcharge increases.