Air Canada 2014 Annual Report Download - page 79

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79
2014 Management’s Discussion and Analysis
20. NON-GAAP FINANCIAL MEASURES
OPERATING INCOME, EXCLUDING THE IMPACT OF BENEFIT PLAN 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 the impact of 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:
CANADIAN DOLLARS IN MILLIONS
FOURTH QUARTER FULL YEAR
2014 2013 $ Change 2014 2013 $ Change
GAAP operating income $ 106 $ 135 $ (29) $ 815 $ 619 $ 196
Add back:
Benefit plan amendments (1) - (82) 82 - (82) 82
OPERATING INCOME, EXCLUDING THE
IMPACT OF BENEFIT PLAN AMENDMENTS $ 106 $ 53 $ 53 $ 815 $ 537 $ 278
1 In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.
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 and EBITDAR, excluding the impact of benefit plan amendments, are reconciled to operating
income as follows:
CANADIAN DOLLARS IN MILLIONS
FOURTH QUARTER FULL YEAR
2014 2013 $ Change 2014 2013 $ Change
GAAP operating income $ 106 $ 135 $ (29) $ 815 $ 619 $ 196
Add back:
Aircraft rent 79 76 3 313 318 (5)
Depreciation, amortization and impairment 134 148 (14) 543 578 (35)
EBITDAR $ 319 $ 359 $ (40) $ 1,671 $ 1,515 $ 156
Add back:
Benefit plan amendments (1) - (82) 82 - (82) 82
EBITDAR, EXCLUDING THE IMPACT OF
BENEFIT PLAN AMENDMENTS $ 319 $ 277 $ 42 $ 1,671 $ 1,433 $ 238
1 In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.