Air Canada 2006 Annual Report Download - page 120

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18. RELATED PARTY TRANSACTIONS
ACE has a 75% ownership interest in Air Canada and a 79.7% ownership interest in Jazz. The Corporation has
various related party transactions with ACE and other entities under common control, including, Aeroplan and
ACTS. These transactions are recorded at the exchange amount.
Related party trade balances arise from the provision of services, as outlined in the table below, the allocation of
employee related costs, as further described in Note 9, the allocation of corporate expenses, as described in
Note 1, and centralized cash management activities as described below.
The related party balances resulting from the application of the commercial and contractual practices were as
follows:
2006
2005
Accounts receivable
ACE $ - $ 57
Aeroplan 6 5
ACTS 97 75
$ 103 $ 137
Accounts payable and accrued liabilities
ACE $ 12 $ 7
ACTS 111 96
$ 123 $ 103
Revenues and expenses with related parties are summarized as follows:
2006 2005
Revenues
Revenues from Aeroplan related to Aeroplan rewards $ 358 $ 307
Cost of Aeroplan Miles purchased from Aeroplan (243) (204)
Property rental revenues from related parties 46 44
Revenues from information technology services to related parties 27 28
Revenues from corporate services and other 14 13
Cargo revenues from related parties 4 5
$ 206 $ 193
Expenses
Maintenance expenses from ACTS $ 614 $ 562
Call centre management and marketing fees from Aeroplan 10 13
Other expenses 39 25
Recovery of salary, wages and benefit expense for employees
assigned to Aeroplan and ACTS
(413)
(374)
$ 250 $ 226
Net interest expense from related parties $ 6 $ 21
Air Canada held certain investments in Aeroplan, Jazz and ACTS. As described in Note 1, certain cash
payments and notes received from ACE on transfer of these investments to ACE have been included in these
combined consolidated financial statements as a contribution from ACE to Shareholders’ Equity (Note 12).
Summary of significant related party agreements
The Relationship between the Corporation and Aeroplan
Aeroplan is a subsidiary of ACE in which ACE has a 75.3% interest at December 31, 2006 (50.3% after
January 10, 2007). Aeroplan operates a loyalty program which provides loyalty marketing services to its
customers.
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