Air Canada 2009 Annual Report Download - page 82
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2009 Air Canada Annual Report
82
21. NON-GAAP FINANCIAL MEASURES
EBITDAR
EBITDAR (earnings before interest, taxes, depreciation and amortization, and aircraft rent) is a non-GAAP fi nancial measure
commonly used in the airline industry to view operating results before depreciation and amortization, and aircraft rent
as these costs can vary signifi cantly among airlines due to differences in the way airlines fi nance their aircraft and other
assets. Air Canada presents EBITDAR before and after the provision for cargo investigations and proceedings as this item
could potentially distort the analysis of trends in business performance. EBITDAR is not a recognized measure for fi nancial
statement presentation under Canadian GAAP and does not have a standardized meaning and is therefore not likely to be
comparable to similar measures presented by other public companies.
EBITDAR before the provision for cargo investigations and proceedings and EBITDAR for Air Canada are reconciled to
operating income (loss) as follows:
(Canadian dollars in millions)
Fourth Quarter Full Year
2009 2008 Change $ 2009 2008 Change $
GAAP operating loss before the provision for
cargo investigations $ (83)
$ (146) $ 63 $ (316) $ (39) $ (277)
Add back:
Aircraft rent 85 80 5 335 279 56
Depreciation and amortization 165 174 (9) 660 694 (34)
EBITDAR before the provision for cargo
investigations 167 108
59 679 934 (255)
Add back:
Provision for cargo investigations - - - - (125) 125
EBITDAR $ 167 $ 108 $ 59 $ 679 $ 809 $ (130)
Operating expense excluding fuel expense
Air Canada uses operating expense excluding fuel expense to assess the operating performance of its ongoing business
without the effects of fuel expense as it could potentially distort the analysis of trends in business performance. Fuel
expense fl uctuates widely depending on many factors including international market conditions, geopolitical events and
the Canada/U.S. exchange rate, and excluding this expense from GAAP results analysis allows Air Canada to compare its
operating performance on a consistent basis. The following measure is not a recognized measure for fi nancial statement
presentation under Canadian GAAP and does not have a standardized meaning and is therefore not likely to be comparable
to similar measures presented by other public companies.
Operating expense, excluding fuel expense, for Air Canada is reconciled to operating expense as follows:
(Canadian dollars in millions)
Fourth Quarter Full Year
2009 2008 Change $ 2009 2008 Change $
GAAP operating expense $ 2,431 $ 2,644 $ (213) $ 10,055 $ 11,121 $ (1,066)
Remove:
Aircraft fuel (601) (792) 191 (2,448) (3,419) 971
Operating expense, excluding fuel expense $ 1,830 $ 1,852 $ (22) $ 7,607 $ 7,702 $ (95)