Air Canada 2013 Annual Report Download - page 78

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2013 Air Canada Annual Report
78
20. NON-GAAP FINANCIAL MEASURES
Operating Income, Excluding the Impact of Benefit Amendments
Air Canada uses Operating income, excluding the impact of benefit plan amendments to assess the operating performance of
its ongoing airline business without the effects of unusual items, such as benefit plan amendments, as these items may distort
the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
Operating income, excluding benefit plan amendments is not a recognized measure for financial statement presentation under
GAAP, does not have a standardized meaning and may not be comparable to similar measures presented by other public
companies.
Operating Income, excluding the impact of benefit plan amendments, is reconciled to operating income as follows:
Fourth Quarter Full Year
(Canadian dollars in millions) 2013 2012 $ Change 2013 2012 $ Change
GAAP operating income $ 135 $47 $88 $619 $442 $ 177
Add back:
Benefit plan amendments(1) (82) – (82) (82) (127) 45
Operating income, excluding the impact of
benefit plan amendments $ 53 $47 $6 $537 $315 $ 222
(1) In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans. In 2012, Air Canada recorded an
operating expense reduction of $127 million related to changes to the terms of the ACPA collective agreement pertaining to retirement age.
EBITDAR
EBITDAR (earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent) is a non-GAAP
financial measure commonly used in the airline industry to view operating results before depreciation, amortization and
impairment, and aircraft rent 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 GAAP, does
not have a standardized meaning, and may not be comparable to similar measures presented by other public companies.
EBITDAR, excluding the impact of benefit plan amendments, and EBITDAR are reconciled to operating income as follows:
Fourth Quarter Full Year
(Canadian dollars in millions) 2013 2012 $ Change 2013 2012 $ Change
GAAP operating income $ 135 $47 $88 $619 $442 $ 177
Add back:
Aircraft rent 76 81 (5) 318 336 (18)
Depreciation, amortization and impairment 148 155 (7) 578 669 (91)
EBITDAR $ 359 $283 $76 $1,515 $1,447 $ 68
Add back:
Benefit plan amendments(1) (82) – (82) (82) (127) 45
EBITDAR, excluding the impact of benefit
plan amendments $ 277 $283 $(6) $1,433 $1,320 $ 113
(1) In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans. In 2012, Air Canada recorded an
operating expense reduction of $127 million related to changes to the terms of the ACPA collective agreement pertaining to retirement age.