Air Canada 2007 Annual Report Download - page 101

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Consolidated Financial Statements and Notes
101
7. DEPOSITS AND OTHER ASSETS
2007 2006
Aircraft related deposits (a) $ 150 $ 168
Restricted cash (b) 84 83
Deposit related to the Pension and Benefi ts Agreement Note 20 101 -
Asset-backed commercial paper (c) 29 -
Other deposits 56 50
Other 17 11
$ 437 $ 312
(a) The amount of deposits with lessors for the lease of aircraft and fl ight simulators.
(b) Restricted cash relates to funds on deposit with various fi nancial institutions as collateral for letters of credit and
other items.
(c) The Corporation has $37 ($29 net of a fair value adjustment) in non-bank sponsored ABCP which has been recorded
in Deposits and other assets. These investments, which were scheduled to mature during the third quarter 2007, were
previously recorded in Cash and cash-equivalents and the transfer to Deposits and other assets is refl ected as an investing
activity on the Consolidated statement of cash fl ows. An agreement in principle to restructure the ABCP investments
was approved by the Pan-Canadian Committee for Third Party Structured ABCP (“Committee”) on December 23, 2007.
The approval of the restructuring, subject to a vote by all investors, is anticipated to occur by March 2008. Under the
terms of the restructuring, all of the ABCP would be exchanged for longer-term notes that will match the maturity of
the underlying assets in the proposed structure. Air Canada is not accruing interest on these investments.
During 2007, Air Canada recorded a charge of $8 ($5 after tax) in non-operating income (expense). The charge is
based on a number of assumptions as to the fair value of the investments including factors such as estimated cash
fl ow scenarios and risk adjusted discount rates. The assumptions used in estimating the fair value of the investments
are subject to change, which may result in further adjustments to non-operating results in the future.