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7. RESULTS OF OPERATIONS – FOURTH QUARTER 2006 VERSUS FOURTH QUARTER 2005
The following table reflects the results of the Corporation as defined under “Basis of Presentation”, the results of its reportable segments and certain non-
GAAP measures for Quarter 4 2006 and for Quarter 4 2005.
Operating revenues
Air Canada
Services Jazz
Inter-segment
elimination
Consolidated
total
Air Canada
Services Jazz
Inter-segment
elimination
Consolidated
total
Passenger $2,071 - - $2,071 $1,949 1 -
$1,950
Cargo 166 - - 166 177 - -
177
Other 178 352 (372) 158 145 303 (319)
129
2,415 352 (372) 2,395 2,271 304 (319)
2,256
Operating expenses
Salaries, wages and benefits 443 82 - 525 463 75 -
538
Aircraft fuel 583 69 (69) 583 577 62 (62)
577
Aircraft rent 75 34 (2) 107 90 28 (1)
117
Airport and navigation fees 232 46 (46) 232 222 37 (37)
222
Aircraft maintenance, materials and supplies 205 27 (4) 228 180 18 (4)
194
Communications and information technology 68 2 (1) 69 72 2 (1)
73
Food, beverages and supplies 76 4 - 80 78 3 -
81
Depreciation, amortization and obsolescence 135 5 - 140 106 4 -
110
Commissions 49 - - 49 47 - -
47
Capacity purchase fees paid to Jazz 224 - (224) - 194 - (194)
-
Special charge for labour restructuring (8) - - (8) - - -
-
Other 338 50 (27) 361 333 41 (20)
354
2,420 319 (373) 2,366 2,362 270 (319)
2,313
Operating income (loss) (5) 33 1 29 (91) 34 - (57)
Non-operating income (expense)
Interest income 24 2 (1) 25 14 - 1
15
Interest expense (88) (2) (1) (91) (74) (3) (1) (78)
Interest capitalized 22 - - 22 6 - -
6
Gain (loss) on sale of and provisions on assets (10) - - (10) (30) 1 - (29)
Other - (1) 1 - (2) - - (2)
(52) (1) (1) (54) (86) (2) - (88)
Income (loss) before the following items: (57) 32 - (25) (177) 32 - (145)
Non-controlling interest (3) - (32) (35) (2) - (32) (34)
Foreign exchange loss (107) - - (107) (11) - - (11)
Recovery of income taxes 23 - - 23 55 - -
55
Income (loss) for the period (144) $32 (32) ($144) ($135) $32 ($32) ($135)
EBITDAR
(1) 205 72 (1) 276 105 66 (1)
170
EBITDAR(1) excluding special charges 197 72 (1) 268 105 66 (1)
170
Quarter 4 2006 Quarter 4 2005
(1) See section 20 "Non-GAAP Financial Measures" in this MD&A for a reconciliation of EBITDAR to operating income (loss).
15
Management's Discussion and Analysis of Results and Financial Condition