Air Canada 2014 Annual Report Download - page 7

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2014 Management’s Discussion and Analysis 7
In this Management’s Discussion and Analysis of
Results of Operations and Financial Condition
(“MD&A”), the “Corporation” refers, as the context
may require, to Air Canada and/or one or more of
Air Canada’s subsidiaries, including its wholly owned
operating subsidiaries, Touram Limited Partnership,
doing business as Air Canada Vacations® (“Air Canada
Vacations”) and Air Canada rouge LP, doing business as
Air Canada rouge® (“Air Canada rouge”). This MD&A
provides the reader with a review and analysis, from the
perspective of management, of Air Canada’s financial
results for the fourth quarter and the full year 2014. This
MD&A should be read in conjunction with Air Canada’s
audited consolidated financial statements and notes
for 2014. All financial information has been prepared
in accordance with generally accepted accounting
principles in Canada (“GAAP”), as set out in the CPA
Canada Handbook – Accounting (“CPA Handbook”),
which incorporates International Financial Reporting
Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”), except for any
financial information specifically denoted otherwise.
Except as otherwise noted, monetary amounts are
stated in Canadian dollars. For an explanation of
certain terms used in this MD&A, refer to section 21
“Glossary” of this MD&A. Except as otherwise noted
or where the context may otherwise require, this
MD&A is current as of February 10, 2015. Certain
comparative figures have been reclassified to conform
to the financial statement presentation adopted in
the current year. Forward-looking statements are
included in this MD&A. See “Caution Regarding
Forward-Looking Information” below for a discussion
of risks, uncertainties and assumptions relating to
these statements. For a description of risks relating
to Air Canada, refer to section 18 “Risk Factors” of
this MD&A. Air Canada issued a news release dated
February 11, 2015 reporting on its results for the
fourth quarter and the full year 2014. This news
release is available on Air Canada’s website at
www.aircanada.com and on SEDAR’s website
at www.sedar.com. For further information on
Air Canada’s public disclosures, including
Air Canada’s Annual Information Form, consult
SEDAR at www.sedar.com.
CAUTION REGARDING
FORWARD-LOOKING INFORMATION
Air Canada’s public communications may include
written or oral forward-looking statements within the
meaning of applicable securities laws. Such statements
are included in this MD&A and may be included in
other communications, including filings with regulatory
authorities and securities regulators. Forward-looking
statements may be based on forecasts of future results
and estimates of amounts not yet determinable.
These statements may involve, but are not limited
to comments relating to strategies, expectations,
planned operations or future actions. Forward-
looking statements are identified by the use of terms
and phrases such as “anticipate”, “believe”, “could”,
“estimate”, “expect”, “intend”, “may”, “plan”, “predict”,
“project”, “will”, “would” and similar terms and phrases,
including references to assumptions.
Forward-looking statements, by their nature, are based
on assumptions, including those described herein and
are subject to important risks and uncertainties.
Forward-looking statements cannot be relied upon
due to, amongst other things, changing external events
and general uncertainties of the business. Actual
results may differ materially from results indicated in
forward-looking statements due to a number of factors,
including without limitation, industry, market, credit and
economic conditions, the ability to reduce operating
costs and secure financing, energy prices, currency
exchange and interest rates, competition, employee
and labour relations, pension issues, war, terrorist acts,
epidemic diseases, environmental factors (including
weather systems and other natural phenomena and
factors arising from man-made sources), insurance
issues and costs, changes in demand due to the seasonal
nature of the business, supply issues, changes in laws,
regulatory developments or proceedings, pending and
future litigation and actions by third parties as well as
the factors identified throughout this MD&A and, in
particular, those identified in section 18 “Risk Factors” of
this MD&A. The forward-looking statements contained
in this MD&A represent Air Canada’s expectations as of
February 10, 2015 (or as of the date they are otherwise
stated to be made), and are subject to change after
such date. However, Air Canada disclaims any intention
or obligation to update or revise any forward-looking
statements whether as a result of new information,
future events or otherwise, except as required under
applicable securities regulations.
KEY ASSUMPTIONS
Assumptions were made by Air Canada in preparing
and making forward-looking statements. As part of its
assumptions, Air Canada assumes Canadian GDP growth
of 1.75% to 2.25% for 2015. In addition, Air Canada
expects that the Canadian dollar will trade, on average,
at C$1.25 per U.S. dollar in the first quarter of 2015
and for the full year 2015 and that the price of jet fuel
will average 66 cents per litre for the first quarter of
2015 and 67 cents per litre for the full year 2015.
2. INTRODUCTION AND KEY ASSUMPTIONS