Air Canada reports record 4th quarter earnings

[tonysoprano]

Not-withstanding your tone, just the mere fact that it comes from you gives me enough reason to savour the moment. If you didn't "chew" on anything, you wouldn't have bothered asking such useless, provocative questions to begin with. What's the matter buddy, didn't get the answer you wanted to hear? BTW, the pension fund incurred another injection of some 318 million $. Don't bother waiting for anything. You should look for something else to do with your spare time.

[BigB]

"...making the numbers look nice" is illegal. Canadian accounting practices are pretty strict. You can spin it anyway you want, the numbers can't lie.

That is very true. One can disclaim any accounting figure if preceded with a statement like:

"The following measure is not a recognized measure for financial 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." Found on page 63 of the 2006 MD&A.

Feel free to correct me if I've made a mistake, but from what I can see, the above mentioned disclaimer pertains to the $236 million operating income from 2006 (which always has the commonly referred to "special charge", attached to it). That figure is used as a comparator to the 2007 operating income, from which I see as being a GAAP figure. In reality, a Non-GAAP figure from '06 is being used in comparison to a '07 GAAP figure. In essence, comparing apples to oranges.

To get the in depth explanation of those "special charges", refer to page 17 of the '06 MD&A.

http://www.aircanada.com/en/about/inves ... MDA_q4.pdf

One must peel through a few layers to get the info, but the numbers, from what I can see, add up.

Dockjock, thanks for the info. I didn't know that when saving money on expenditures via exchange rates, a company can claim it as income (or vice versa). Whether it was from derivatives or not, I'm not sure. Wow, learn something new everyday.....

[tonysoprano]

BigB.
The standards of GAAP are not always clear and sometimes open to interpretation. But you're right, the numbers add up. Management is happy, that's a good sign. As pilots, we either see profit or loss. Analysing the numbers only serves those who are not comfortable with the success of AC. That is, the competition and the revenge seekers. At the moment just about every airline in the world has had a profitable 2007 as was predicted. Nobody here questions the numbers of any other profitable company. The fact that even AC was profitable should come as no surprise. Those who have been around a while will understand the ups and downs. The new kids will take some time to convince.

[Dockjock]

BigB,

Foreign exchange gain is not reported as income; that is actually the point of breaking it out, because it does show up on the bottom line as profit.

Conversely, when our dollar falls vs. the US dollar, all canadian airlines will show a foreign exchange loss, which will be again specifically noted so as to be clear the reduced profitability (or loss) wasn't solely due to operational reasons.

[BigB]

Whooaa, slow down there Tony. I felt some negative tone from your post. Before you start pulling the trigger on that machine-gun, and in the process shooting half your own troops, re-read my last post. If anything, my post reinforces your argument that the figures are on the up & up. I apologize if you took my post in a negative way. That said:

The standards of GAAP are not always clear and sometimes open to interpretation.

I thought you said they were "pretty strict"? Not sure which view you have, but please just pick one. Heck, I'd even be satisfied if you said "GAAP is pretty strict, but not super strict".

Analysing the numbers only serves those who are not comfortable with the success of AC. That is, the competition and the revenge seekers.

Well, I'm quite sure the managers of Air Canada spent a fair amount of time analyzing those numbers. Unless of course you're suggesting they are not comfortable with the success of AC.

Nobody here questions the numbers of any other profitable company.

I beg to differ. I would even go so far to say that one must scrutinize the numbers of a profitable company even more closely, than a company that is unprofitable. I suggest you never stop questioning the numbers, especially as a stakeholder, unless you don't mind being blindsided Enron style.

The fact that even AC was profitable should come as no surprise. Those who have been around a while will understand the ups and downs.

I agree. However I ask you this question. Were you surprised when AC was not profitable?

The new kids will take some time to convince.

Convince them of what? AC being profitable, or the ups and downs?

IMO, they should have emphasized the $114 million rather than the $236 million (excluding special charges) during the release of the 2007 results. The $114 figure provides better optics ie enables a larger spread as a comparator, leading to the "four fold" comment. As well, it bodes well for clarity purposes. Of course using the $236 (esc) figure during the release of 2006, boded well in providing less clarity.

By the way, I got a chuckle out of your term "revenge seekers". First thing that popped into my mind was GWB behind a podium using his coined phrase "evil doers". Not laughing at you Tony, just the term.

Dockjock, thanks for the explanation. It's slooowwwly starting to sink in. Still having to get my head around some of these accounting concepts.

[tonysoprano]

BigB.
I hate when this happens. I was agreeing with you. GAAP can be (are) strict (I've read the book) but also open to interpretation. That's the problem with analysing the numbers to death as Four1oh was. How can you say that I'm accusing management of not being comfortable with our success??

Me:

Management is happy, that's a good sign

A misunderstanding me thinks(?)

Me:

Nobody here questions the numbers of any other profitable company.

What I meant was that you don't see anyone questioning the result of other profitable companies. Why are they questioning AC's??

You:

I agree. However I ask you this question. Were you surprised when AC was not profitable?

NO. Not at all. Experts were saying prior to 2007 that most companies would be profitable in 2007. AC worked hard to change. I certainly wasn't surprised at the results. But it appears others certainly were. Prior to the changes, it wasn't easy. We had to change with the times. Still some work to be done but we are well on our way me thinks.

You:

Convince them of what? AC being profitable, or the ups and downs?

BOTH!!! AC had a good year. Doesn't mean next year will be the same. We have been around a long time and seen many UPS and many DOWNS. The average result being something called SURVIVAL!! That's great this day in age. That's great news for the future as well.

Hey man, we're saying the same thing. Don't make me work so hard.

[Four1oh]

I won't get you too excited Tony, after all, it seems to be 'that' time of the month again. enjoy that, eh?

[tonysoprano]

Oh, I know, I can just see it mow. You or someone that hates AC will be the first to call me when we lose money next time. To which I will say ok, sure, whatever. See, I'm predicting the boring child's play already. You never use to have this problem Four1oh. What's up? Having trouble accepting the fact that you will never fly something other than a 737 with limited growth of income and security (ouch, sorry dude)? It's never too late. I hear AC gives people a second chance. I think you can do it this time around. Although your attitude won't help. I'll even put in a good word. Really though, like I said bro, get a life. AC is not worth the time. I'll accept WJetters aren't brainwashed if you accept AC makes money now and then. Deal?

[Jaques Strappe]

AC better be careful. If they post another profit they are sure to have the competition bureau declare foul.

[tonysoprano]

Don't laugh. I'm sure one or two competitors are crying foul already. If AC has two successful years in a row, we'll hear how we did it illegally or something.

[Four1oh]

guys like you, Tony, don't understand that there's guys like me out there that wouldn't give AC the time of day, let alone a 'second chance'. Rag on, bitch.

[tonysoprano]

Right, Four1oh. Sure, whatever you say. Well, that one worked as expected. Too predictable. Boring.

[Jaques Strappe]

You guys should just get married and get it over with!

[tonysoprano]

No thanks Jaucques. I practice with Four1 to be ready for battle with my real wife. It's not working too well though, they're both driving me to drink.

[RB-211]

Nice to see AC make a modest yet respectable profit. Lets hope it continues and is followed up by other Canadian carriers. There is no reason whatsoever why this can’t happen and you dim wits can stop trading shots. Airlines make big money = employees making better money. Everyone wins.

Tony. You still on wife one? Just curious………….

[tonysoprano]

Hey RB. Unfortunately at AC it doesn't work that way. I doubt they'll give us more money. It would be nice just to get some of the lost benefits back though. Yep, still on wife one. I don't know, don't ask. She sees something in me though. Nice jab, mate. Hey are you guys really going on strike?

[Jaques Strappe]

Nice to see AC make a modest yet respectable profit. Lets hope it continues and is followed up by other Canadian carriers. There is no reason whatsoever why this can’t happen and you dim wits can stop trading shots. Airlines make big money = employees making better money. Everyone wins.

Couldn't agree more!

[RB-211]

Not a jab mate, just a question. Many guys in this business are on number two or three. It takes a strong and particular type of individual in this business to make a good partner. Especially one to deal with stubborn and opinionated retards like you and yours truly! (See the humour)

Again good to see you guys making cake. I feel that you will gain from this and at the end of the day have a starting point for negotiations. Your 12,000 colleagues at AA demanding a 50% increase in pay will illustrate this. As one former superior and well educated mate of mine said: The day of the pilot is coming. You guys/gals have in within your power to gain from AC’s prosperity. Unity will do the job……………….


Ya we are weeks from using the nuclear option. First time in almost 30 years. BA will make an eye watering $2 billion this year but feel the 3200 pilots at BA are not good enough for their new European/US venture. Funny that…………It will go two ways. CEO pushes it too far and probably loses his job or we crumble and give in losing any credibility we have. Vegas odds are not out yet but I can tell you that I know where I would be betting my house.

[wallypilot]

How do you figure Sunwing is going out of business? Weve been around for over 20 years.

Not to stir the pot here, but by that comment the length a company has been in business should determine how long it will stay in business. Perhaps you've noticed a 320 with a large red 70 on the tail. You come back to me when you figure out why that 70 was painted on.

Actually, endless, if you want to get technical, AC as it is now has been a company for what, 4 years, I think? Well, since emerging from creditor protection, whenever that was. Everyone who owned shares in the previous air canada lost everything, and the organization emerged as a new company in financial terms. Without the replacement of those shares with a new companies' shares, and the starting of the new company(ACE), the airline as it was would have been done.

Effectively, what we have now is the same employees, with the same airplanes, and slight name change, and bingo, you have a new company that, to everyone else, appears to be the same company. Not trying to stir the pot, either....just an interesting discussion.

Anyways, good to see a modest profit and a reasonably healthy airline industry. I hope it continues!

[tonysoprano]

Hope you don't have to strike RB. If you do, good luck. Don't let them take your flying away.