Air Canada 2011 Annual Report Download - page 128

Download and view the complete annual report

Please find page 128 of the 2011 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 150

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

2011 Air Canada Annual Report
128
Following is a classification of fair value measurements recognized in the Consolidated Statement of Financial Position using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements.
Fair value measurements at reporting date using:
December 31, 2011
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
Financial Assets
Held–for–trading securities
Cash equivalents $ 356 $– $356 $ –
Short–term investments 1,251 – 1,251 –
Deposits and other assets
Asset backed commercial paper 24 – – 24
Investment in Aveos 51 – – 51
Derivative instruments
Fuel derivatives 11 – 11 –
Share forward contracts 5 – 5 –
Foreign exchange derivatives 5 – 5 –
Interest rate swaps 15 – 15 –
Total $ 1,718 $– $1,643 $ 75
Fair value measurements at reporting date using:
December 31 2011
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
Financial Liabilities
Derivative instruments
Interest rate swaps $ 13 $– $13 $ –
Total $ 13 $– $13 $ –
Financial assets held by financial institutions in the form of cash and restricted cash have been excluded from the fair value
measurement classification table above as they are not valued using a valuation technique.
The change in level 3 assets in 2011 related to the charge of $5 in non-operating income (expense) for ABCP described below.
Asset Backed Commercial Paper (“ABCP”)
The Corporation has $37 ($24 net of a fair value adjustment) in non-bank sponsored ABCP which has been recorded in
Deposits and other assets. There is a limited private market to sell certain of these investments however management does
not believe that this market qualifies as an active market and therefore has estimated the fair value of these investments
using valuation techniques. The carrying value as at December 31, 2011 is based on a number of assumptions as to the fair
value of the investments including factors such as estimated cash flow 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. During 2011, the Corporation recorded a charge of $5 in non-operating
income (expense).