Qantas 2011 Annual Report Download - page 23

21 ANNUAL REPORT 2011
for the year ended 30 June 2011
Review of Operations continued
Statutory Result
The Group’s Statutory Prot After Tax was $ million for the year ended  June , an increase of $ million on the prior year result
of $ million.

$M

$M
Change
$M
Change
%
Statutory Prot After Tax    
Addback: Tax expense    
Statutory PBT    
Addback: Non-recurring items    
Addback: Ineffectiveness and non-designated derivatives
relating to other reporting periods   () ()
Underlying PBT    
Statutory Prot After Tax includes ineffective and non-designated derivative losses relating to other reporting periods and non-recurring items.
Non-recurring items are signicant items occurring outside the ordinary course of business that are separately disclosed in order to report
underlying performance. Non-recurring items included in the  statutory result are:
— Aircraft impairments following restructuring of eet plans of $ million
— Loss on disposal and other transaction costs relating to the Jetset Travelworld Group merger of $ million
— Prot on the sale of the DPEX Group ($ million) and Harvey Holidays ($ million)
— Provision for freight regulatory nes and third party class actions of $ million
— Provision for redundancies and restructuring of $ million
EVENTS SUBSEQUENT TO BALANCE DATE
(A) Qantas International business announcement
On  August  the Group announced the outcome of the strategic review of Qantas International.
The key pillars of the review are:
. Continuing focus and investment in the customer experience
. Deepening presence in Asia
. Deepening and broadening alliance relationships
. Ongoing underlying business improvement
Signicantly, as a result of the review, the Group has announced it will restructure its route network and restructure the Joint Services
Agreement with British Airways. As a result, six A aircraft will be deferred by between ve and six years and will deliver from /
to coincide with the retirement of the last B aircraft. In addition, four B aircraft will be retired earlier than previously planned.
The Group also announced that it would establish a premium airline based in Asia.
Whilst the nancial impact is still being nalised, it is anticipated that Non-Recurring expenditure of between $ million and $ million
will be incurred with less than half of this resulting in cash outows in the period.
On  August  the Group announced the purchase of between  and  A aircraft with  purchase rights and options.
Included in the  aircraft are  “classic” A aircraft and  Aneo, being Airbus’ new engine option for the A family to enter service
in . It incorporates latest generation engines and large “Sharklet” wing tip devices, which together will deliver  per cent in fuel and CO
emission savings per aircraft.
Eight of the A aircraft will be allocated to the new airline based in Asia.
In addition, the Group announced that it had reached agreement with Japan Airlines and Mitsubishi to establish a low cost carrier based in
Japan in . The new venture will be known as Jetstar Japan. Whilst each partner will have equal voting rights, the Qantas Group will have
 per cent economic interest. As such the business will be accounted for as an Investment in Associates using the equity accounting method.
Of the  As purchased,  will be allocated to this venture and will not be funded by the Qantas Group. Qantas’ equity investment in this
business is expected to total approximately $ million over  years.
The net effect on capital expenditure in / of deferring six A aircraft (and associated refund of pre-delivery payments), and the
sign on fees and pre-delivery payments expected in / as a result of the purchase agreement is a net reduction in the Group’s capital
expenditure of approximately $ million.
(B) Other matters
On  September  the Federal Court of Australia upheld the Qantas Group’s appeal against a decision of the Administrative Appeals
Tribunal in respect of the GST treatment of domestic fares where the passenger did not travel. The Australian Taxation Ofce has  days
to seek special leave to appeal the Federal Court decision to the High Court.
Except for the matters disclosed above, there has not arisen in the interval between  June  and the date of this Report any event that
would have had a material effect on the Financial Statements as at  June .