Air Canada 2006 Annual Report Download - page 2

Highlights
Air Canada Services (1)
(1) In accordance with Canadian GAAP ACG-15, Air Canada is required to consolidate the financial statements of Jazz, certain leasing entities and fuel facility corporations into its financial statements.
Air Canada does not have any ownership interest in Jazz. The financial statements of Air Canada, the mainline airline, are termed "Air Canada Services".
(2) Air Canada's combined consolidated results include the financial position, results of operations and cash flows of the various components and entities (including Jazz Air LP) as described in Note 1 to Air Canada's
combined consolidated financial statements. Air Canada has two business segments: Air Canada Services and Jazz. Refer to section 1 of Air Canada's 2006 Management Discussion and Analysis of Results ("MD&A").
(3) A special charge of $102 million was recorded to operating revenues in Quarter 3 2006 in connection with Air Canada's obligations for the redemption of pre-2002 Aeroplan miles ("Special charge for Aeroplan miles")
Refer to section 20 "Non-GAAP Financial Measures" of Air Canada's 2006 MD&A. A special charge for labour restructuring of $28 million was recorded in Quarter 1 2006. During Quarter 4 2006, the estimated cost of
this plan was revised due to the favourable impact of attrition and other factors and the charge was reduced by $8 million to $20 million.
(4) EBITDAR (earnings before interest, taxes, depreciation, amortization and obsolescence and aircraft rent) is a non-GAAP financial measure commonly used in the airline industry to view operating results before aircraft
rent and depreciation, amortization and obsolescence as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. EBITDAR is not a recognized
measure for financial statement presentation under GAAP and does not have a standardized meaning and is therefore not likely to be comparable to similar measures presented by other public companies.
(5) Operating expense per available seat mile, before fuel expense and the special charge for labour restructuring, is calculated as operating expense, removing fuel expense and the special charge for labour restructuring,
divided by ASMs. Refer to section 20 "Non-GAAP Financial Measures" of Air Canada's 2006 MD&A for additional information.
(6) Operating fleet excludes chartered freighters in 2006 and 2005.
(7) Excludes maintenance down-time.
(8) Excludes third party carriers operating under capacity purchase arrangements.
(9) Includes fuel handling and fuel hedging expenses.
Quarter 4 Quarter 4
2006 2005 2006 2005
Financial (Canadian dollars in millions unless stated otherwise) $ Change $ Change
Operating revenues 2,415 2,271 144 10,137 9,509 628
Operating revenues, excluding the special charge for Aeroplan miles
(3)
2,415 2,271 144 10,239 9,509 730
Operating income (loss)
(5 ) (91 ) 86 114 191 (77 )
Operating income (loss), excluding special charges
(3)
(13 ) (91 ) 78 236 191 45
Non-operating income (expense)
(52 ) (86 ) 34 (191 ) (224 ) 33
Income (loss) before non-controlling interest, foreign exchange
and for income tax
(57 ) (177 ) 120 (77 ) (33 ) (44 )
Income (loss) for the period
(144 ) (135 ) (9 ) (74 ) (20 ) (54 )
Operating margin
(0.2 )% (4.0 )% 3.8 pp 1.1 % 2.0 % (0.9 )pp
Operating margin, excluding special charges
(3)
(0.5 )% (4.0 )% 3.5 pp 2.3 % 2.0 % 0.3 pp
EBITDAR
(4)
205 105 100 921 936 (15 )
EBITDAR, excluding special charges
(3) (4)
197 105 92 1,043 936 107
EBITDAR margin
8.5 % 4.6 % 3.9 pp 9.1 % 9.8 % (0.7 )pp
Cash, cash equivalents and short-term investments
2,110 1,302 808 2,110 1,302 808
Cash flows from (used for) operating activities
$ (159 ) $ (48 ) $ (111 ) $ 211 196 15
Operating Statistics % Change % Change
Revenue passenger miles (millions) (RPM) 11,160 10,584 5 48,993 46,762 5
Available seat miles (millions) (ASM) 14,343 13,807 4 61,083 58,818 4
Passenger load factor 77.8 % 76.7 % 1.1 pp 80.2 % 79.5 % 0.7 pp
Passenger revenue yield per RPM (cents)
18.5 18.4 1 18.1 17.5 3
Passenger revenue per ASM (cents)
14.4 14.1 2 14.5 13.9 4
Operating revenue per ASM (cents)
16.8 16.5 2 16.6 16.2 3
Operating expense per ASM (cents)
16.9 17.1 (1 ) 16.4 15.8 4
Operating expense per ASM, excluding fuel expense (cents)
12.8 12.9 (1 ) 12.2 12.1 1
Operating expense per ASM, excluding fuel expense
and the special charge for labour restructuring (cents)
(3) (5)
12.9 12.9 (1 ) 12.2 12.1 1
Average number of full-time equivalent (FTE) employees (thousands)
23.3 24.1 (3 ) 23.6 24.0 (2 )
Aircraft in operating fleet at period end
(6)
332 322 3 332 322 3
Average aircraft utilization (hours per day)
(7) (8)
10.3 10.0 3 10.5 10.6 (1 )
Average aircraft flight length (miles)
(8)
847 842 1 873 871 0
Fuel price per litre (cents)
(9)
64.1 65.7 (2 ) 66.2 59.7 11
Fuel litres (millions)
906 874 4 3,813 3,643 5
Air Canada Combined Consolidated (2)
Financial (Canadian dollars in millions unless stated otherwise) $ Change $ Change
Operating revenues 2,395 2,256 139 10,065 9,458 607
Operating income (loss)
29 (57 ) 86 259 318 (59 )
Operating income (loss), excluding special charges
(3)
21 (57 ) 78 381 318 63
Income (loss) for the period (144 ) (135 ) (9 ) (74 ) (20 ) (54 )
Operating margin
1.2 % (2.5 )% 3.7 pp 2.6 % 3.4 % (0.8 )pp
Cash, cash equivalents and short-term investments
2,245 1,336 909 2,245 1,336 909
EBITDAR is reconciled to operating income (loss) as follows ($ millions) Quarter 4, 2006 Quarter 4, 2005 2006 2005
Operating income (loss) (5 ) (91 ) 114 191
Add back:
Aircraft rent 75 90 314 341
Depreciation, amortization & obsolescence 135 106 493 404
EBITDAR 205 105 921 936
Add back:
Special charge for labour restructuring (3) (8 ) - 20 -
Special charge for Aeroplan miles (3) - - 102 -
EBITDAR before special charges 197 105 1,043 936