Air Canada 2007 Annual Report Download - page 24

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2007 Air Canada Annual Report
24
5. RESULTS OF OPERATIONS – 2007 VERSUS 2006
Air Canada recorded consolidated operating income of $495 million and net income of $429 million in 2007. The 2007
results included the consolidation of Jazz’s operations only up to May 24, 2007. In 2006, Air Canada reported consolidated
operating income of $259 million and a net loss of $74 million. The 2006 results included the consolidation of Jazz’s
operations. Prior to May 24, 2007, Air Canada had two reportable segments: Air Canada Services and Jazz. Effective May
24, 2007, Air Canada no longer consolidates the operations of Jazz. As a result of this change, Air Canada’s consolidated
results for the full year 2007 are not directly comparable to its consolidated results for the full year 2006. For comparative
purposes, the following table and discussion provides the reader with the results of Air Canada for the full year 2007,
excluding the consolidation of Jazz, and the results of Air Canada, excluding the consolidation of Jazz (previously
the “Air Canada Services” segment) for the full year 2006.
($ millions)
Year Change
2007 2006 $ %
Operating revenues
Passenger $ 9,329 $ 8,887 $ 442 5
Cargo 550 629 (79 ) (13 )
Other 767 750 17 2
10,646 10,266 380 4
Special charge for Aeroplan miles - (102 ) 102 (100 )
10,646 10,164 482 5
Operating expenses
Wages, salaries and benefi ts 1,920 1,816 104 6
Aircraft fuel 2,552 2,544 8 -
Aircraft rent 282 341 (59 ) (17 )
Airport and navigation fees 1,022 982 40 4
Aircraft maintenance, materials and supplies 757 768 (11 ) (1 )
Communications and information technology 275 273 2 1
Food, beverages and supplies 313 322 (9 ) (3 )
Depreciation, amortization and obsolescence 548 493 55 11
Commissions 201 237 (36 ) (15 )
Capacity purchase with Jazz 923 871 52 6
Special charge for labour restructuring - 20 (20 ) (100 )
Other 1,420 1,383 37 3
10,213 10,050 163 2
Operating income 433 114 319
Non-operating income (expense)
Interest income 92 82 10
Interest expense (348 ) (313 ) (35 )
Interest capitalized 108 62 46
Gain (loss) on disposal of assets 19 (6 ) 25
Gain (loss) on fi nancial instruments recorded at fair value 26 (18 ) 44
Other (19 ) 2 (21 )
(122 ) (191 ) 69
Income (loss) before the following items 311 (77 ) 388
Non-controlling interest (9 ) (12 ) 3
Foreign exchange gain 317 12 305
Recovery of (provision for) income taxes (190 ) 3 (193 )
Income (loss) for the period $ 429 $ (74 ) $ 503
EBITDAR(1) $ 1,263 $ 948 $ 315
EBITDAR(1), excluding special charges $ 1,263 $ 1,070 $ 193
Earnings per share - Basic(2) $ 4.29 $ (0.83 ) $ 5.12
Earnings per share - Diluted(2) $ 4.27 $ (0.83 ) $ 5.10
(1) See section 19 “Non-GAAP Financial Measures” in this MD&A for a reconciliation of EBITDAR to operating income (loss) and EBITDAR,
excluding special charges to operating income (loss).
(2) Earnings per share – basic and diluted are the consolidated Air Canada fi gures as reported under GAAP.