Air Canada 2013 Annual Report Download - page 39

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2013 Management’s Discussion and Analysis
39
Factors contributing to the year-over-year change in fourth quarter non-operating expense included:
• Losses on foreign exchange, mainly related to U.S. denominated long-term debt, which amounted to $55 million in the
fourth quarter of 2013 compared to gains of $9 million in the fourth quarter of 2012. The losses in the fourth quarter of
2013 were mainly attributable to a weaker Canadian dollar at December 31, 2013 when compared to September 30,
2013. The December 31, 2013 closing exchange rate was US$1 = C$1.0636 while the September 30, 2013 closing
exchange rate was US$1 = C$1.0303. In the fourth quarter of 2013, losses on foreign exchange translation of $93 million
were partly offset by gains on foreign currency derivatives of $38 million. Refer to section 12 of this MD&A for additional
information.
• An increase in interest capitalized of $3 million which was mainly due to a standby charge related to the EETC financing
incurred prior to aircraft delivery.
• A decrease in net financing expense relating to employee benefits of $19 million which was mainly due to the impact of
lower pension liabilities.
• Gains related to fair value adjustments on financial instruments which amounted to $22 million in the fourth quarter of
2013 versus gains of $7 million in the fourth quarter of 2012. Refer to section 12 of this MD&A for additional information.