Air Canada 2006 Annual Report Download - page 111

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Segment Asset Information
2006
Air Canada
Services Jazz Elimination
Consolidated
Total
Cash and cash equivalents $ 1,312 $ 135 $ - $ 1,447
Short-term investments 798 - - 798
$ 2,110 $ 135 $ - $ 2,245
Additions to capital assets $ 863 $ 25 $ - $ 888
Total assets $ 11,388 $ 483 $ (122) $ 11,749
2005
Air Canada
Services Jazz Elimination
Consolidated
Total
Cash and cash equivalents $ 1,000 $ 34 $ - $ 1,034
Short-term investments 302 - - 302
$ 1,302 $ 34 $ - $ 1,336
Additions to capital assets $ 852 $ 16 $ - $ 868
Total assets $ 9,995 $ 504 $ (237) $ 10,262
The Corporation is a domestic and international carrier and for the purposes of segment reporting, flight equipment is
attributed to Canada. As a result, substantially all of the Corporation’s property and equipment are related to operations in
Canada.
Relationship between Air Canada and Jazz
Air Canada has no ownership interests in Jazz. Jazz is consolidated in these combined consolidated financial
statements under AcG-15. Air Canada has been determined to be the primary beneficiary. Air Canada and Jazz
negotiate transactions between each other as if they were unrelated parties on an arm’s length basis.
The Air Canada Services segment is comprised of the passenger and cargo transportation services business
operated by Air Canada and related ancillary services.
The Jazz segment is Jazz Air LP operating under the capacity purchase agreement (“Jazz CPA”) with Air
Canada as described in Note 1C.
Under the Jazz CPA, Jazz is reimbursed for all pass-through costs (as described below) and Jazz is paid fees
by Air Canada on a variety of different metrics based on an estimate of all costs and expenses to be incurred
and paid by Jazz for the applicable period with respect to flights operated by Jazz pursuant to the Jazz CPA and
other services to aircraft, other than Jazz's pass-through costs marked-up by a specified percentage. The fees
include both a variable component that is dependent on Jazz aircraft utilization and a fixed component. The fees
charged by Jazz to the Air Canada Services segment are payable on a monthly basis and are broken down
between aircraft rent and other operating expenses in the segmented results.
Pass-through costs, which are reimbursed to Jazz, include fuel, airport and navigations fees and other, are
recorded within the Other operating expenses in the segment results of Air Canada Services.
The accounting policies for these two segments are as described in Note 2. In addition, Jazz recognizes its
revenue under the Jazz CPA as the services are provided to the Air Canada Services segment.
111
Combined Consolidated Financial Statements 2006