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20. NON-GAAP FINANCIAL MEASURES
EBITDAR
EBITDAR (earnings before interest, taxes, depreciation, amortization and obsolescence and aircraft rent) is a
non-GAAP financial measure commonly used in the airline industry to view operating results before aircraft rent
and depreciation, amortization and obsolescence as these costs can vary significantly among airlines due to
differences in the way airlines finance their aircraft and other assets.
EBITDAR is not a recognized measure for financial 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 is reconciled to operating income (loss) as follows:
($ millions) $ $
2006 2005 Change 2006 2005 Change
Air Canada Services
GAAP operating income (loss) (5) (91) 86 114 191 (77)
Add back:
Aircraft rent 75 90 (15) 314 341 (27)
Depreciation, amortization and obsolescence 135 106 29 493 404
89
EBITDAR 205 105 100 921 936 (15)
Add back:
Special charge for labour restructuring (8) - (8) 20 -
20
Special charge for Aeroplan miles - - - 102 -
102
EBITDAR excluding special charges
197
105
92
1,043
936
107
Jazz
GAAP operating income 33 34 (1) 144 129
15
Add back:
Aircraft rent 34 28 6 134 80
54
Depreciation, amortization and obsolescence 5 4 1 21 18
3
EBITDAR
72
66
6
299
227
72
Consolidated total
GAAP operating income (loss) 29 (57) 86 259 318 (59)
Add back:
Aircraft rent 107 117 (10) 441 417
24
Depreciation, amortization and obsolescence 140 110 30 514 422
92
EBITDAR 276 170 106 1,214 1,157
57
Add back:
Special charge for labour restructuring (8) - (8) 20 -
20
Special charge for Aeroplan miles - - - 102 -
102
EBITDAR excluding special charges
268
170
98
1,336
1,157
179
Quarter 4
67
Management's Discussion and Analysis of Results and Financial Condition