Air Canada 2007 Annual Report Download - page 120

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2007 Air Canada Annual Report
120
13. SHAREHOLDERS’ EQUITY
Share capital (net of issue costs) consists of the following:
Share Capital 2007 2006
Common shares $ 562 $ 562
Adjustment to shareholders’ equity (a) (288 ) (288 )
$ 274 $ 274
(a) As a result of the fi nancial reorganization under CCAA, the assets and liabilities of the consolidated entity, excluding
goodwill, were comprehensively valued to fair values and a revaluation adjustment of $4,234 was recorded as a
credit to share capital. GAAP does not permit goodwill to be recorded even if the fair value of net assets is less than
the fair value of the enterprise as a whole.
Common Shares
As at December 31, 2007, the common shares issuable by Air Canada consist of an unlimited number of Class A Variable
Voting Shares (“Variable Voting Shares”) and an unlimited number of Class B Voting Shares (“Voting Shares”). The two
classes of common shares have equivalent rights as common shareholders except for voting rights. Holders of Variable
Voting Shares are entitled to one vote per share unless the aggregate number of Variable Voting Shares outstanding, as a
percentage of the total number of votes attaching to all issued and outstanding voting shares of Air Canada exceeds 25% or
the total number of votes cast by or on behalf of holders of Variable Voting Shares at any meeting exceeds 25% of the total
number of votes that may be cast at such meeting. If the 25% threshold would be surpassed, the votes attaching to the
Variable Voting Shares would be proportionately reduced. Variable Voting Shares will be automatically converted to Voting
Shares if the shares become held, benefi cially owned and controlled, directly or indirectly, by a Canadian, as defi ned in the
Canada Transportation Act. Voting Shares will be automatically converted to Variable Voting Shares if the shares become
held, benefi cially owned or controlled, directly or indirectly, by a party that is not a Canadian, as defi ned in the Canada
Transportation Act.
The issued and outstanding common shares of Air Canada, along with the potential common shares, are as follows:
Outstanding common shares 2007 2006
Issued and outstanding
Class A variable voting shares 16,654,049 18,343,095
Class B voting shares 83,345,951 81,656,905
Total issued and outstanding 100,000,000 100,000,000
Potential common shares
Stock options 1,720,092 1,695,035
Performance share units 551,251 345,805
Accumulated Other Comprehensive Income
The following table outlines the components of Accumulated other comprehensive income:
(in millions) 2007 2006
Accumulated other comprehensive income
Unrealized period change in fair value of derivatives (net of tax of $28) $ 56 $ -
$ 56 $ -