Air NZ provides details of Other Significant Items for FY20

Full Year Results27 January 2020AIRIndustrials

Stock exchange listings: New Zealand (NZX: AIR) / Australia (ASX: AIZ) / ADR (OTC: ANZLY)

MARKET ANNOUNCEMENT

Air New Zealand postal address: Private Bag 92007, Auckland, 1142, New Zealand
Investor Relations email: investor@airnz.co.nz
Investor website: www.airnewzealand.co.nz/investor

28 January 2020
Air New Zealand provides details of Other Significant Items
for the 2020 financial year

Air New Zealand is today providing an update on Other Significant Items that will be reflected in
the airline’s reported financial results for the 2020 financial year.

Details of Other Significant Items to be reported

The airline expects to report three components within Other Significant Items:
• A gain of approximately $21 million resulting from the partial sale of airport slots at London’s
Heathrow Airport to an undisclosed party, following the 23 October 2019 announcement of
the airline’s withdrawal from the Los Angeles to London route. The remaining sale of airport
slots is expected to be recognised in the airline’s 2021 financial year for a value of
approximately $21 million, bringing the total value for the transaction to approximately $42
million;
• Reorganisation costs in the range of $20 million to $25 million resulting from business
transformation activities previously communicated by the airline in March and August 2019
as part of its two-year cost reduction programme, as well as expected costs associated with
the withdrawal from the Los Angeles to London route;
• A non-cash accounting charge of approximately $46 million resulting from the
disestablishment of certain USD denominated debt as fair value hedges*.

Taking the effect of these items together, the airline expects to report a statutory charge of
approximately $45 million to $50 million which will be reflected within Other Significant Items for
the 2020 financial year, primarily driven by the non-cash impact of the disestablishment of fair value
hedges. A summary of the expected reporting for the above items is provided in the table below:

Other Significant Items impact for the 2020 Financial Year

Interim impact Full year impact
Gain on sale from
airport slots
Will not be reflected in this period Approximately $21 million gain
Reorganisation
costs
$13 million charge
Approximately $20 million to $25
million charge
Disestablishment of
fair value hedges
$46 million non-cash charge
No change from 2020 Interim
Financial Results

(continued on next page)

Page 1 of 3

Stock exchange listings: New Zealand (NZX: AIR) / Australia (ASX: AIZ) / ADR (OTC: ANZLY)

MARKET ANNOUNCEMENT

Air New Zealand postal address: Private Bag 92007, Auckland, 1142, New Zealand
Investor Relations email: investor@airnz.co.nz
Investor website: www.airnewzealand.co.nz/investor

Change in guidance definition resulting from Other Significant Items

These Other Significant Items represent events that are not reflective of the airline’s underlying
financial performance. Accordingly, Air New Zealand has amended its earnings guidance definition
for the current financial year to make it clear that these items are not included in the earnings
guidance numbers.

The airline is targeting earnings before Other Significant Items and taxation in the range of $350
million to $450 million. As discussed on 22 August 2019 when originally provided, the guidance
range excluded the impact from the change in the accounting standard for leases (which the airline
advised in its 2019 Annual Financial Results is expected to have an adverse impact on earnings
of approximately $10 million), and assumes an average jet fuel price for the year of US$75 per
barrel.

Guidance summary
Amended guidance for
2020 financial year
(as disclosed on 28 January 2020)

Based upon current market conditions and assuming an
average jet fuel price of US$75 per barrel, the airline is
targeting earnings before Other Significant Items and
taxation to be in the range of $350 million to $450 million.
This outlook excludes the impact of the new accounting
standard for leases (IFRS 16).

Previous guidance for 2020
financial year
(as disclosed on 22 August 2019)

Based upon current market conditions and assuming an
average jet fuel price of US$75 per barrel, the airline is
targeting earnings before taxation to be in the range of $350
million to $450 million. This outlook excludes the impact of the
new accounting standard for leases
.

As has been customary in recent years, the airline expects to provide earnings guidance to the
market as part of the Interim Financial Result announcement on 27 February. This would take into
account then current views on forward demand and bookings outlook as well as any expected
impact from recent events, such as the coronavirus in China.

(continued on next page)
Page 2 of 3

Air NZ announces resignation of Chief People Officer Disclosure of Directors and Senior Mngrs Relevant Interests

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.