2023 Consolidated Financial Statements and Notes

AIR CANADA 2023 Consolidated Financial Statements and Notes 12. SHARE CAPITAL At January 1, 2022 Shares issued on the exercise of stock options Shares issued on settlement of restricted share units At December 31, 2022 Shares issued on the exercise of stock options At December 31, 2023 Number of shares Value (Canadian dollars in millions) 357,841,857 $ 2,735 350,535 6 169,866 2 358,362,258 2,743 107,028 1 358,469,286 2,744 The issued and outstanding shares of Air Canada, along with the potential shares, were as follows: Issued and outstanding 2023 2022 Class A variable voting shares Class B voting shares Total issued and outstanding 82,887,375 275,581,911 358,469,286 72,431,001 285,931,257 358,362,258 Potential shares Convertible notes Stock options Note 8 Note 13 17,856,599 17,856,599 Total outstanding and potentially issuable shares 6,642,516 382,968,401 5,304,745 381,523,602 Shares As at December 31, 2023, the 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 shares have equivalent rights as shareholders except for voting rights as explained below. Variable Voting Shares may only be held, beneficially owned or controlled, directly or indirectly, by persons who are not Canadians (within the meaning of the Canada Transportation Act). An issued and outstanding Variable Voting Share is converted into one Voting Share automatically and without any further act of Air Canada or the holder, if such Variable Voting Share becomes held, beneficially owned and controlled, directly or indirectly, otherwise than by way of security only, by a Canadian, as defined in the Canada Transportation Act. Voting Shares may only be held, beneficially owned and controlled, directly or indirectly, by Canadians. An issued and outstanding Voting Share is converted into one Variable Voting Share automatically and without any further act of Air Canada or the holder, if such Voting Share becomes held, beneficially owned or controlled, directly or indirectly, otherwise than by way of security only, by a person who is not a Canadian. Air Canada's articles provide that holders of Variable Voting Shares are entitled to one vote per share unless (i) the number of Variable Voting Shares outstanding, as a percentage of the total number of voting shares of Air Canada exceeds 49% or (ii) the total number of votes cast by or on behalf of holders of Variable Voting Shares at any meeting exceeds 49% of the total number of votes that may be cast at such meeting. If either of the above noted thresholds would otherwise be surpassed at any time, the vote attached to each Variable Voting Share will decrease proportionately such that (i) the Variable Voting Shares as a class do not carry more than 49% of the aggregate votes attached to all issued and outstanding Voting Shares of Air Canada and (ii) the total number of votes cast by or on behalf of holders of Variable Voting Shares at any meeting do not exceed 49% of the votes that may be cast at such meeting. Air Canada's articles also provide for the automatic reduction of the voting rights attached to Variable Voting Shares in the event any of the following limits are exceeded. In such event, the votes attributable to Variable Voting Shares will be affected as follows: 50

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