Air Canada 2013 Annual Report Download - page 142

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2013 Air Canada Annual Report
142
19. INVESTMENTS IN AVEOS
In 2012, as a result of Aveos Fleet Performance Inc. (“Aveos”) ceasing operations and filing for court protection pursuant to
the Companies’ Creditors Arrangements Act (“CCAA”), Air Canada reduced the carrying value of its investment in Aveos
Holding Company, Aveos’ parent company, as well as the carrying value of a long term note receivable from Aveos to nil and
recorded an aggregate loss on investments of $65 in Non-operating expense. In addition, Air Canada recorded a liability of $55,
which was charged to Discontinued Operations, related to Air Canada’s commitment under a separation program. For the
twelve months ended December 31, 2013, a cash outflow of $29 was generated in relation to this separation program ($26 in
2012).
A settlement and termination agreement pertaining to operating amounts owing between Air Canada and Aveos, including
disputed invoices, was concluded during 2013. This agreement resulted in the set-off, settlement and release of all
outstanding invoices between Air Canada and Aveos. Settlement of the Pension and Benefits Agreement was concluded in
October 2013 with payment in trust to Aveos, for distribution to identified Aveos eligible recipients. The letter of credit of $20
previously issued in favour of Aveos was returned to Air Canada. Following this, obligations under the other post-retirement
and post-employment benefit plans pertaining to transferred unionized Aveos employees are no longer included in the
Corporation’s consolidated financial statements as at December 31, 2013. In 2012, OSFI ordered the termination of Aveos’
defined benefit pension plan and, as a result, the assets and liabilities accruing prior to July 14, 2011 in respect of transferred
Aveos employees could not be transferred to Aveos’ plans and remain under Air Canada’s pension plans.