Air Canada 2007 Annual Report Download - page 75

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Management’s Discussion and Analysis of Results and Financial Condition
75
19. NON-GAAP FINANCIAL MEASURES
EBITDAR
EBITDAR (earnings before interest, taxes, depreciation, amortization and obsolescence and aircraft rent) is a non-GAAP
fi nancial measure commonly used in the airline industry to view operating results before aircraft rent and depreciation,
amortization and obsolescence as these costs can vary signifi cantly among airlines due to differences in the way airlines
fi nance their aircraft and other assets.
EBITDAR is not a recognized measure for fi nancial 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 and EBITDAR excluding the special charge for Aeroplan miles and the special charge for labour restructuring for
Air Canada (previously “Air Canada Services”) is reconciled to operating income (loss) as follows:
($ millions)
Fourth Quarter
$ Change
Year
$ Change
2007 2006 2007 2006
Air Canada
GAAP operating income (loss) $ 72 $ (5 ) $ 77 $ 433 $ 114 $ 319
Add back:
Aircraft rent 62 83 (21 ) 282 341 (59 )
Depreciation, amortization and obsolescence 140 135 5 548 493 55
EBITDAR $ 274 $ 213 $ 61 $ 1,263 $ 948 $ 315
Add back:
Special charge for Aeroplan Miles - - - - 102 (102 )
Special charge for labour restructuring - (8 ) 8 - 20 (20 )
EBITDAR excluding special charges $ 274 $ 205 $ 69 $ 1,263 $ 1,070 $ 193
Operating Income excluding the Special Charge for Aeroplan Miles and the Special Charge for Labour Restructuring
Air Canada uses operating income excluding the special charge for Aeroplan miles and the special charge for labour
restructuring to assess the operating performance of its ongoing business without the effects of these special charges.
These items are excluded from Air Canada’s results as they could potentially distort the analysis of trends in business
performance. The special charge for Aeroplan miles is the full and fi nal settlement between the parties in connection with
Air Canada’s obligations for the redemption of pre-2002 miles. The special charge for labour restructuring is the total cost
of the 20% non-unionized workforce reduction plan announced in February 2006. The special charge for Aeroplan miles and
the special charge for labour restructuring are not refl ective of the underlying fi nancial performance of Air Canada from
ongoing operations.
The following measure is not a recognized measure for fi nancial 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.
Operating income (loss) excluding the special charge for Aeroplan miles and the special charge for labour restructuring for
Air Canada (previously “Air Canada Services”) is reconciled to operating income (loss) as follows:
($ millions)
Fourth Quarter
$ Change
Year
$ Change
2007 2006 2007 2006
Air Canada
GAAP operating income (loss) $ 72 $ (5 ) $ 77 $ 433 $ 114 $ 319
Add back:
Special charge for Aeroplan Miles - - - - 102 (102 )
Special charge for labour restructuring - (8 ) 8 - 20 (20 )
Operating income (loss),
excluding special charges $ 72 $ (13 ) $ 85 $ 433 $ 236 $ 197