Air Canada 2006 Annual Report Download - page 31

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9.2 Liquidity and Working Capital
Air Canada Services
At December 31, 2006, Air Canada Services had cash, cash equivalents and short-term investments of $2,110
million and positive working capital of $318 million. Compared to December 31, 2005, cash, cash equivalents and
short-term investments have increased $808 million mainly due net proceeds of $187 million and a transfer of Air
Canada’s investment to ACE of $1,156 million ($673 million related to the transfer of ACTS to ACE and $483 million
related to the transfer of Jazz to ACE).
The introduction of Air Canada’s innovative customer driven revenue model in conjunction with a redesigned
network and a renewed fleet is expected to generate increased revenue and improved cost efficiencies going
forward. This, in turn, is expected to improve cash generated from operations which will in part be used to fund
capital expenditures as well as to pay down debt incurred to finance a large portion of the capital expenditures. The
Corporation continues to closely monitor its liquidity requirements and is assessing various financing transactions
and initiatives with the objective of ensuring its future liquidity needs are addressed. At December 31, 2006, Air
Canada Services had an unused secured syndicated revolving credit facility of $400 million on which no amounts
have been drawn.
Jazz
At December 31, 2006, Jazz had cash and cash equivalents of $135 million and positive working capital of $31
million. Compared to December 31, 2005, cash and cash equivalents have increased $101 million while working
capital has decreased $58 million.
Consolidated Summary
At December 31, 2006, the Corporation had cash, cash equivalents and short-term investments of $2,245 million
and positive working capital of $349 million. Compared to December 31, 2005, cash, cash equivalents and short-
term investments have increased $909 million and working capital has improved $624 million.
31
Management's Discussion and Analysis of Results and Financial Condition