Air Canada 2012 Annual Report Download - page 42

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2012 Air Canada Annual Report
42
9.5. Consolidated Cash Flow Movements
The following table provides the cash flow movements for Air Canada for the periods indicated:
Fourth Quarter Full Year
(Canadian dollars in millions) 2012 2011 Change $ 2012 2011 Change $
Cash flows from (used for) operating activities 71 (6) 77 649 576 73
Proceeds from borrowings – 107 (107) 126 232 (106)
Reduction of long-term debt and finance lease
obligations (162) (124) (38) (442) (608) 166
Shares purchased for cancellation (5) – (5) (5) – (5)
Distributions related to aircraft special purpose leasing
entities – – – (16) (52) 36
Cash flows used for financing activities (167) (17) (150) (337) (428) 91
Short-term investments 88 (53) 141 (22) (139) 117
Additions to property, equipment and intangible assets (94) (56) (38) (462) (220) (242)
Proceeds from sale of assets 20 2 18 50 6 44
Other (1) 4 (5) 32 (37) 69
Cash flows from (used for) investing activities 13 (103) 116 (402) (390) (12)
Net decrease in cash and cash equivalents (83) (126) 43 (90) (242) 152
Cash and cash equivalents, beginning of period 841 974 (133) 848 1,090 (242)
Cash and cash equivalents, end of period 758 848 (90) 758 848 (90)
The following table provides the consolidated calculation of free cash flow for Air Canada for the periods indicated:
Fourth Quarter Full Year
(Canadian dollars in millions) 2012 2011 Change $ 2012 2011 Change $
Cash flows from (used for) operating activities 71 (6) 77 649 576 73
Additions to property, equipment and intangible assets (94) (56) (38) (462) (220) (242)
Free cash flow(1) (23) (62) 39 187 356 (169)
(1) Free cash flow is a non-GAAP financial 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.
Free cash flow
Free cash flow was negative $23 million in the fourth quarter of 2012 compared to negative free cash flow of $62 million
in the fourth quarter of 2011, an improvement of $39 million. This improvement was mainly due to an increase in cash
flows from operating activities of $77 million, partly offset by an increase in capital expenditures of $38 million.
For the full year 2012, free cash flow amounted to $187 million, a decrease of $169 million from 2011. This decrease in
free cash flow was mainly due to an increase in capital expenditures of $242 million.
Cash from (used for) operating activities
Cash from operations for the fourth quarter 2012 of $71 million improved $77 million versus the fourth quarter of 2011.
This increase was driven by the stronger earnings performance in the fourth quarter of 2012.
Cash from operations for the full year 2012 of $649 million improved $73 million versus the full year 2011. This increase
was also driven by the higher earnings performance year-over-year as well as improvements in cash provided by working
capital. Partially offsetting these improvements was the impact of higher pension payments, with payments to Air
Canada’s pension plans of $433 million in 2012, $48 million higher than 2011 levels. In addition, cash premiums paid on
fuel derivatives, net of hedge settlements, reflected an outflow of $48 million in 2012 versus a net outflow of $4 million
in 2011.