Air Canada 2008 Annual Report Download - page 25

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2008 Management’s Discussion and Analysis
25
7. RESULTS OF OPERATIONS – 2008 VERSUS 2007
Air Canada recorded an operating loss of $39 million, before a provision for cargo investigations of $125 million, and a net
loss of $1,025 million in 2008. In the same period of 2007, Air Canada, including the consolidation of Jazz’s operations up
to May 24, 2007, reported consolidated operating income of $495 million and net income of $429 million. The following
tableanddiscussioncomparestheresultsofAirCanadafor2008,whichnolongerincludestheconsolidationof
Jazz, and the results of the Air Canada Services segment, which excluded the consolidation of Jazz, for 2007.
(Canadian dollars in millions,
except per share figures)
Year Change
2008 2007 (1) $ %
Operating revenues
Passenger $ 9,713 $ 9,329 $ 384 4
Cargo 515 550 (35 ) (6 )
Other 854 767 87 11
11,082 10,646 436 4
Operating expenses
Aircraft fuel 3,419 2,552 867 34
Wages, salaries and benefits 1,877 1,920 (43) (2)
Airport and navigation fees 1,001 1,022 (21) (2)
Capacity purchase with Jazz 948 923 25 3
Depreciation and amortization 694 548 146 27
Aircraft maintenance 659 757 (98) (13)
Food, beverages and supplies 314 313 1 -
Communications and information technology 286 275 11 4
Aircraft rent 279 282 (3) (1)
Commissions 194 201 (7) (3)
Other 1,450 1,420 30 2
11,121 10,213 908 9
Operatingincome(loss)beforetheundernoteditem (39) 433 (472)
Provision for cargo investigations (125) - (125)
Operating income (loss) (164) 433 (597)
Non-operating income (expense)
Interest income 57 92 (35)
Interest expense (319) (348) 29
Interest capitalized 37 108 (71)
Gain (loss) on capital assets (34) 19 (53)
Gain on financial instruments recorded at fair value 92 26 66
Other (3) (19) 16
(170) (122) (48)
Income(loss)beforethefollowingitems (334) 311 (645)
Non-controlling interest (12) (9) (3)
Foreign exchange gain (loss) (655) 317 (972)
Provision for income taxes (24) (190) 166
Income (loss) for the period $ (1,025) $ 429 $ (1,454)
EBITDARbeforetheprovisionforcargoinvestigations(2) $ 934 $ 1,263 $ (329)
EBITDAR (2) $ 809 $ 1,263 $ (454)
Earnings (loss) per share - Basic $ (10.25) $ 4.29 $ (14.54)
Earnings (loss) per share - Diluted $ (10.25) $ 4.27 $ (14.52)
(1) Reflects the results of the Air Canada Services segment, which excluded the consolidation of Jazz, for 2007. Refer to section 2 of this MD&A for additional information
on Air Canada’s reportable segments prior to May 24, 2007.
(2) See section 20 “Non-GAAP Financial Measures” in this MD&A for a reconciliation of EBITDAR before the provision for cargo investigations to operating income (loss)
and EBITDAR to operating income (loss).