Financial definitions

Financial definitions

Financial definitions

Adjusted capital employed (AV Asset value) Total equity, plus surplus value in the aircraft fleet, plus 7 times the annual cost of operating aircraft leasing, net, plus financial net debt, less equity in affiliated companies

Adjusted debt/equity ratio Financial net debt plus capitalized leasing costs (x7) in relation to equity and non-controlling interests.

Adjusted equity assets ratio Equity divided by total capital plus seven times annual operating leasing cost.

AEA The Association of European Airlines.

Affiliated company Company where the SAS Group’s holding amounts to at least 20% and at the most 50%.

AOC Air Operator Certificate.

ASK, Available seat kilometers The total number of seats available for passengers multiplied by the number of kilometers which they are flown.

ATK, Available tonne kilometers The total number of tonnes of capacity available for the transportation of passengers, freight and mail multiplied by the number of kilometers which this capacity is flown.

Available seat kilometers See ASK.

Available tonne kilometers See ATK.

Block hours Refers to the time from when the aircraft leaves the departure gate until it arrives at the destination gate.

CAGR Compound annual growth rate

CAPEX (Capital Expenditure) Future payments for aircraft on firm order.

Capital employed Total capital according to the balance sheet less noninterest- bearing liabilities.

Capitalized leasing costs (x 7) The annual cost of operating leases for aircraft multiplied by seven.

Cash flow from operations Cash flow from operating activities before changes in working capital.

CASK See unit cost.

CFROI Adjusted EBITDAR in relation to AV.

Code share When one or more airlines’ flight number is stated in the timetable for a flight, while only one of the airlines operates the flight. CSI Customer Satisfaction Index measures how customers perceive SAS’s services.

Debt/equity ratio Financial net debt in relation to equity and non-controlling interests.

Dividend yield, average price Dividend as a percentage of the average share price during the year.

Earnings per share (EPS) Income after tax divided by the total number of shares.

EBIT Operating income.

EBIT margin EBIT divided by revenue.

EBITDA margin EBITDA divided by revenue.

EBITDA, Operating income before depreciation Income before net financial items, tax, depreciation, share of income in affiliated companies and income from the sale of fixed assets.

EBITDAR margin EBITDAR divided by revenue.

EBITDAR, Operating income before depreciation and leasing costs Operating income before net financial items, tax, depreciation, share of income in affiliated companies, income from the sale of fixed assets and leasing costs for aircraft.

EBT Income before tax.

EEA European Economic Area.

Equity method Shares in affiliated companies are taken up at the SAS Group’s share of equity, taking acquired surplus and deficit values into account.

Equity per share Shareholders’ equity attributable to Parent Company shareholders divided by the total number of shares outstanding on the closing date.

Equity/assets ratio Book equity plus non-controlling interests in relation to total assets.

Finance leasing Based on a leasing contract where the risks and rewards of ownership of the asset remain with the lessee. The asset is reported as a fixed asset in the balance sheet because the lessee has an obligation to purchase the asset at the end of the lease. The commitment to pay future leasing charges is entered as a liability.

Financial net debt Interest-bearing liabilities less interest-bearing assets excluding net pension funds.

Financial net debt, market adjusted (x 7) Financial net debt plus capitalized leasing costs, multiplied by seven.

Financial preparedness Cash and cash equivalents including unutilized credit facilities/ fixed costs.

FTE Full-time equivalent.

Gross profit margin Operating income before depreciation (EBITDA) in relation to revenue.

IATA International Air Transport Association. A global association of more than 200 airlines.

ICAO International Civil Aviation Organization. The United Nations’ specialized agency for international civil aviation.

Interest-coverage ratio Operating income plus financial income in relation to financial expenses.

Interline revenue Ticket settlement between airlines.

LCC Low Cost Carrier.

Load factor RPK divided by ASK. Describes the capacity utilization of available seats. Also called occupancy rate.

Market capitalization Share price multiplied by the number of shares outstanding.

Net debt Interest-bearing liabilities less interest-bearing assets.

NPV, Net present value Used to calculate capitalized future costs of operating leases for aircraft, for example.

Operating leasing Based on a leasing contract in which the risks and rewards of ownership remain with the lessor and is equivalent to renting. The leasing charges are expensed on a current basis in the statement of income.

PASK (unit revenue) passenger revenue/ASK (scheduled).

P/CE ratio Average share price divided by cash flow per share after paid tax.

P/E ratio Average share price divided by earnings per share after standard tax.

RASK Total traffic revenue/Total ASK (scheduled+charter).

Regularity The percentage of flights completed in relation to flights scheduled.

Return on shareholders’ equity after tax Net income for the period attributed to shareholders in the Parent Company in relation to average equity excluding non-controlling interests.

Return on invested capital (ROIC) % EBIT plus the standard interest portion corresponding to 33% of net operating leasing costs minus dividends to shareholders in relation to average shareholders’ equity, net financial debt and net capitalized leasing costs(x7).

Revenue passenger kilometers (RPK) See RPK.

Revenue tonne kilometers (RTK) See RTK.

RPK, Revenue passenger kilometers Number of paying passengers multiplied by the distance they are flown in kilometers.

RTK, Revenue tonne kilometers The number of tonnes of paid traffic (passengers, freight and mail) multiplied by the distance this traffic is flown in kilometers.

Sale and leaseback Sale of an asset (aircraft, building, etc.) that is then leased back.

Total load factor RTK divided by ATK.

Total return The sum of the change in share price including dividends.

Unit cost, (CASK) total The airline’s total operating costs including aircraft leasing and depreciation adjusted for currency and restructuring costs less non-traffic-related revenue per total ASK (scheduled and charter).

Unit revenue See PASK.

WACC, Weighted average cost of capital includes the average cost of liabilities, equity and operating leases for aircraft. The sources of funds are calculated and weighted in accordance with the current market value of equity and liabilities and the capitalized present value of operating lease costs for aircraft.

Wet lease agreement Leasing in of aircraft including crew.

Yield Passenger revenue in relation to RPK (scheduled).