Air Canada 2010 Annual Report Download - page 39

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2010 Management’s Discussion and Analysis
39
9.5 CONSOLIDATED CASH FLOW MOVEMENTS
The following table provides the cash flow movements for Air Canada for the periods indicated.
(Canadian dollars in millions)
Fourth Quarter Full Year
2010 2009 Change $ 2010 2009 Change $
$ 167 $ 54 $ 113 $ 873 $ 442 $ 431
Cash used for fuel hedge settlements, terminations
and premiums (18) (18) - (80) (275) 195
Fuel hedge collateral deposits, net 2 62 (60) 43 268 (225)
Excess of employee future benefit funding over
expense (43) (53) 10 (126) (368) 242
Changes in non-cash working capital 40 (55) 95 154 (234) 388
Cash flows from (used for) operating activities 148 (10) 158 864 (167) 1,031
Additions to capital assets (26) (42) 16 (118) (232) 114
Free cash flow (1) 122 (52) 174 746 (399) 1,145
Proceeds from sale and leaseback transactions - 380 (380) 20 552 (532)
Proceeds from contractual commitments - - - - 230 (230)
Reduction to Aveos letter of credit - - - 23 - 23
Short-term investments (440) (125) (315) (810) 214 (1,024)
Other (5) (1) (4) (11) 74 (85)
Cash flows from (used for) investing activities
(excluding additions to capital assets)
(445)
254 (699) (778) 1,070 (1,848)
Proceeds from borrowings - 3 (3) 1,175 926 249
Issue of common shares and warrants 2 249 (247) 2 256 (254)
Repayment of long-term debt and capital
lease obligations (100) (381) 281 (1,135) (1,237) 102
Other - - - (35) - (35)
Cash flows from (used for) financing activities (98) (129) 31 7 (55) 62
Net increase (decrease) in cash and cash equivalents (421) 73 (494) (25) 616 (641)
Net increase (decrease) in short-term investments 440 125 315 810 (214) 1,024
Net increase in cash, cash equivalents
and short-term investments
$ 19
$ 198 $ (179) $ 785 $ 402 $ 383
(1) Free cash flow is a non-GAAP measure used by Air Canada and may not be comparable to measures presented by other public companies. Air Canada considers free cash
flow to be an indicator of the financial strength and performance of its business because it shows how much cash is available, including repaying debt, meeting ongoing
financial obligations and reinvesting in Air Canada.
An increase in free cash flow in the fourth quarter of 2010 of $174 million was largely due to an improvement in Air
Canada’s cash operating results year-over-year of $113 million. The improvement in non-cash working capital of $95
million also factored in to the free cash flow improvement. Similar factors supported the improvement in free cash flow in
2010 of $1,145 million versus 2009. The impact of not making pension past service cost contributions in 2010 as a result
of the adoption of the Air Canada 2009 Pension Plan Funding Regulations, versus contributions of $140 million in 2009,
also contributed to the improvement.
Net cash from operating activities, before the
under noted items