Air Canada 2007 Annual Report Download - page 16

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2007 Air Canada Annual Report
16
4. RESULTS OF OPERATIONS – FOURTH QUARTER 2007 VERSUS FOURTH QUARTER 2006
Air Canada recorded operating income of $72 million and net income of $35 million in the fourth quarter of 2007. In the
same period of 2006, Air Canada, including the consolidation of Jazz’s operations, reported consolidated operating income
of $29 million and a net loss of $144 million.
Prior to May 24, 2007, Air Canada had two reportable segments: Air Canada Services and Jazz. Effective May 24, 2007,
Air Canada no longer consolidates the operations of Jazz. As a result of this change, Air Canada’s consolidated results for the
fourth quarter of 2007 are not directly comparable to its consolidated results for the fourth quarter of 2006. For comparative
purposes, the following table and discussion provides the reader with the results of Air Canada for the fourth quarter of
2007, which no longer includes the consolidation of Jazz, and the results of Air Canada, excluding the consolidation of
Jazz (previously the “Air Canada Services” segment) for the fourth quarter of 2006.
Unaudited ($ millions)
Fourth Quarter Change
2007 2006 $ %
Operating revenues
Passenger $ 2,196 $ 2,071 $ 125 6
Cargo 142 166 (24 ) (14 )
Other 175 186 (11 ) (6 )
2,513 2,423 90 4
Operating expenses
Wages, salaries and benefi ts 468 443 25 6
Aircraft fuel 615 583 32 5
Aircraft rent 62 83 (21 ) (25 )
Airport and navigation fees 238 232 6 3
Aircraft maintenance, materials and supplies 173 205 (32 ) (16 )
Communications and information technology 67 68 (1 ) (1 )
Food, beverages and supplies 67 76 (9 ) (12 )
Depreciation, amortization and obsolescence 140 135 5 4
Commissions 37 49 (12 ) (24 )
Capacity purchase with Jazz 227 224 3 1
Special charge for labour restructuring - (8 ) 8 (100 )
Other 347 338 9 3
2,441 2,428 13 1
Operating income (loss) 72 (5 ) 77
Non-operating income (expense)
Interest income 22 24 (2 )
Interest expense (89 ) (88 ) (1 )
Interest capitalized 20 22 (2 )
Gain (loss) on disposal of assets - (10 ) 10
Gain (loss) on fi nancial instruments recorded at fair value (1 ) 1 (2 )
Other (4 ) (1 ) (3 )
(52 ) (52 ) -
Income (loss) before the following items 20 (57 ) 77
Non-controlling interest (3 ) (3 ) -
Foreign exchange gain (loss) 20 (107 ) 127
Recovery of (provision for) income taxes (2 ) 23 (25 )
Income (loss) for the period $ 35 $ (144 ) $ 179
EBITDAR(1) $ 274 $ 213 $ 61
EBITDAR(1), excluding special charge $ 274 $ 205 $ 69
Earnings per share - Basic and diluted(2) $ 0.35 $ (1.55 ) $ 1.90
(1) See section 19 “Non-GAAP Financial Measures” in this MD&A for a reconciliation of EBITDAR to operating income.
(2) Earnings per share – basic and diluted are the consolidated Air Canada fi gures as reported under GAAP.