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8. RESULTS OF OPERATIONS – 2006 VERSUS 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 the year ended December 31, 2006 and for the year ended December 31, 2005.
Operating revenues
Air Canada
Services Jazz
Inter-segment
elimination
Consolidated
total
Air Canada
Services Jazz
Inter-segment
elimination
Consolidated
total
Passenger $8,887 - - $8,887 $8,197 2 -
$8,199
Cargo 629 - - 629 625 - -
625
Other 723 1,381 (1,453) 651 687 1,021 (1,074)
634
10,239 1,381 (1,453) 10,167 9,509 1,023 (1,074)
9,458
Special charge for Aeroplan miles (102) - - (102) - - -
-
10,137 1,381 (1,453) 10,065 9,509 1,023 (1,074)
9,458
Operating expenses
Salaries, wages and benefits 1,816 311 - 2,127 1,857 265 -
2,122
Aircraft fuel 2,544 285 (284) 2,545 2,197 177 (177)
2,197
Aircraft rent 314 134 (7) 441 341 80 (4)
417
Airport and navigation fees 982 178 (178) 982 924 124 (124)
924
Aircraft maintenance, materials and supplies 768 98 (11) 855 693 68 (10)
751
Communications and information technology 273 8 (3) 278 294 5 (2)
297
Food, beverages and supplies 322 15 (2) 335 326 8 -
334
Depreciation, amortization and obsolescence 493 21 - 514 404 18 -
422
Commissions 237 - - 237 253 - -
253
Capacity purchase fees paid to Jazz 871 - (871) - 693 - (693)
-
Special charge for labour restructuring 20 - - 20 - - -
-
Other 1,383 187 (98) 1,472 1,336 149 (62)
1,423
10,023 1,237 (1,454) 9,806 9,318 894 (1,072)
9,140
Operating income 114 144 1 259 191 129 (2)
318
Non-operating income (expense)
Interest income 82 6 (1) 87 48 1 (1)
48
Interest expense (313) (8) - (321) (270) (16) 2 (284)
Interest capitalized 62 (1) - 61 14 - -
14
Gain (loss) on sale of and provisions on assets (6) - - (6) (31) 4 - (27)
Other (16) (1) - (17) 15 - 1
16
(191) (4) (1) (196) (224) (11) 2 (233)
Income (loss) before the following items: (77) 140 - 63 (33) 118 -
85
Non-controlling interest (12) - (140) (152) (13) - (118) (131)
Foreign exchange gain 12 - - 12 47 - -
47
Recovery of (provision for) income taxes 3 - - 3 (21) - - (21)
Income (loss) for the period (74) $140 (140) ($74) ($20) $118 ($118) ($20)
EBITDAR
(1) 921 299 (6) 1,214 936 227 (6)
1,157
EBITDAR(1) excluding special charges 1,043 299 (6) 1,336 936 227 (6)
1,157
Year ended December 31, 2006 Year ended December 31, 2005
(1) See section 20 "Non-GAAP Financial Measures" in this MD&A for a reconciliation of EBITDAR to operating income (loss) and EBITDAR excluding special charges for
Aeroplan miles and labour restructuring to operating income (loss).
21
Management's Discussion and Analysis of Results and Financial Condition