Air Canada 2006 Annual Report Download - page 108

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13. EARNINGS PER SHARE
The following table outlines the calculation of basic and diluted earnings per share:
(in millions, except per share amounts)
2006 2005
Numerator:
Numerator for basic earnings per share:
Loss for the year $ (74) $ (20)
Effect of potential dilutive securities:
Stock options - -
Adjusted numerator for diluted earnings per share $ (74) $ (20)
Denominator:
Denominator for basic earnings per share:
Weighted-average shares (a) 89 82
Effect of potential dilutive securities:
Stock options - -
Adjusted denominator for diluted earnings per share 89 82
Basic loss per share $ (0.83) $ (0.25)
Diluted loss per share $ (0.83) $ (0.25)
The calculation of earnings per share is based on whole dollars and not on rounded millions. As a result, the above amounts
may not be recalculated to the per share amount disclosed above.
(a) The weighted average shares outstanding used in the above calculations of basic and diluted earnings per
share for 2006 and 2005 have taken into consideration the impact of the exchanges of different share types
within share capital in deriving the outstanding common shares of Air Canada at the time of the Air Canada
IPO (Note 12). These exchanges have been treated as stock splits and reverse stock splits in these
financial statements and the weighted average number of common shares for the purpose of computing per
share amounts has been retroactively restated.
The dilutive effect of outstanding stock options on earnings per share is based on the application of the treasury
stock method. Under this method, the proceeds from the exercise of such securities are assumed to be used to
purchase Class B Voting Shares.
Excluded from the calculation of diluted earnings per share were 1,699,678 outstanding options as the option’s
exercise price was greater than the average market price of the common shares for the year (2005 – nil).
At December 31, 2006, approximately 346,000 performance share units of Air Canada were outstanding and
commence vesting on January 1, 2007. These units are excluded from the calculation of diluted earnings per
share above.
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