Air Canada 2006 Annual Report Download - page 123

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the building in 2006 as described in Note 3. Upon execution of the agreement, the building will be sold to
ACTS at the carrying value of $28.
The Relationship between Corporation and ACE
Master Services Agreement
Air Canada provides certain administrative services to ACE in return for a fee. Such services relate to
finance and accounting, information technology, human resources and other administrative services.
Cash Management System
Air Canada manages the cash for certain related parties, including Aeroplan up to June 2005, Jazz up to
February 2006 and ACTS during all periods presented in these combined consolidated financial
statements. All cash collected from billings and sources other than Air Canada is recorded by Air Canada
on a daily basis. Any payments to pay obligations related to operating and financing costs and capital
expenditures other than obligations to Air Canada and other ACE affiliates were made through the Air
Canada cash management system. In addition, certain inter-company transactions for services were not
settled within the terms set out in the above noted agreements. Inter-company accounts receivable and
payable include any excess cash, (cash proceeds greater than cash expenditures), cash deficiencies (cash
expenditures greater than proceeds) or deferrals of receipts of payments. The combined consolidated
statement of cash flows reflects the receipt and repayment of excess cash as a financing activity and the
disbursement and repayment of cash deficiencies as investing activities.
123
Combined Consolidated Financial Statements 2006