Air Canada 2012 Annual Report Download - page 14

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2012 Air Canada Annual Report
14
5. OVERVIEW
Due to continuing strong passenger demand, a disciplined approach to capacity management and an ongoing focus on cost
transformation, Air Canada reported solid improvements in its financial performance in 2012 with adjusted net income of
$53 million, a $175 million improvement over 2011 results. On a GAAP basis, in 2012, net income amounted to $131 million
compared to a net loss of $249 million in 2011, an improvement of $380 million. Additional information on Air Canada’s full
year and fourth quarter 2012 financial performance is provided below:
Full Year 2012 Financial Summary
Operating revenue growth of $508 million or 4% from 2011.
Passenger revenue growth of $529 million or 5.2% on a 2.6% increase in system passenger traffic and a 1.8%
improvement in system yield. Passenger revenues in the premium cabin increased $87 million or 4.0% on a 2.7% growth
in traffic and a 1.3% improvement in yield.
System ASM capacity increase of 1.2%, reflecting capacity growth in all markets with the exception of the Atlantic
market where capacity was unchanged from 2011. The system capacity growth was in line with the 0.75% to 1.25% full
year 2012 ASM capacity increase projected in Air Canada’s news release dated November 8, 2012.
RASM growth of 3.2%, reflecting RASM increases in all markets with the exception of the U.S. transborder market. The
RASM increase was due to the yield growth of 1.8% and a passenger load factor improvement of 1.1 percentage points.
Operating expense increase of $250 million or 2% from 2011. In 2012, the ACPA collective agreement was amended to
allow pilots to continue to work past age 60, which was the age of mandatory retirement in the previous collective
agreement. As a result of these changes to retirement age, in 2012, Air Canada recorded an operating expense reduction
of $124 million in Benefit plan amendments on its consolidated statement of operations related to the impact of those
amendments on pension and other employee benefit liabilities. In 2012, adjusted CASM increased 1.0% from 2011, in line
with the 0.75% to 1.25% increase projected in Air Canada’s news release dated November 8, 2012. Refer to section 20
“Non-GAAP Financial Measures” for additional information.
Operating income of $437 million compared to operating income of $179 million in 2011, an increase of $258 million.
Net income of $131 million or $0.45 per diluted share compared to a net loss of $249 million or $0.92 per diluted share
in 2011, an increase of $380 million or $1.37 per diluted share.
EBITDAR (excluding the impact of benefit plan amendments) of $1,327 million compared to EBITDAR of $1,242 million in
2011, an increase of $85 million. Refer to section 20 “Non-GAAP Financial Measures” for additional information.
Adjusted net income of $53 million or $0.19 per diluted share compared to an adjusted net loss of $122 million or $0.44
per diluted share in 2011. Refer to section 20 “Non-GAAP Financial Measures” for additional information.
Free cash flow of $187 million, a decrease of $169 million from 2011, largely reflecting the airline’s continued funding of
ongoing purchase deposit payments on committed Boeing 777 and 787 aircraft.
At December 31, 2012, adjusted net debt of $4,281 million, a decrease of $295 million from December 31, 2011,
reflecting the impact of ongoing net debt repayments and the resulting lower debt balances.
At December 31, 2012, cash and short-term investments amounted to $2,026 million, or 17% of 2012 annual operating
revenues (December 31, 2011 – $2,099 million, or 18% of 2011 annual operating revenues).