2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
18. CAPITAL DISCLOSURES
The Corporation views capital as the sum of Long-term debt and lease liabilities, the embedded derivative on
convertible notes, and the book value of Shareholders' equity (deficiency). The Corporation also monitors its net debt
which is calculated as the sum of Long-term debt and lease liabilities less cash and cash equivalents, and short-term
and long-term investments.
The Corporation's main objectives when managing capital are:
.
To ensure the Corporation has access to capital to fund contractual obligations as they become due and to ensure
adequate cash levels to withstand deteriorating economic conditions;
• To ensure capital allocation decisions generate sufficient returns and to assess the efficiency with which the
Corporation allocates its capital to generate returns;
• To structure repayment obligations in line with the expected life of the Corporation's principal revenue generating
assets;
.
To maintain an appropriate balance between debt supplied capital versus investor supplied capital; and
.
To monitor the Corporation's credit ratings to facilitate access to capital markets at competitive interest rates.
In order to maintain or adjust the capital structure, the Corporation may adjust the type or amount of capital utilized,
including purchase versus debt financing versus lease decisions, defer or cancel aircraft expenditures by not exercising
available options or selling aircraft options, redeeming or issuing debt securities, issuing equity securities, and
repurchasing outstanding shares, all subject to market conditions and the terms of the underlying agreements (or any
consents required) or other legal restrictions.
The total capital and net debt as at December 31 are calculated as follows:
(Canadian dollars in millions)
Long-term debt and lease liabilities
Current portion of long-term debt and lease liabilities
December 31,
2023
December 31,
2022
$
Total long-term debt and lease liabilities
12,996
866
13,862
$
15,043
1,263
16,306
Embedded derivative on convertible notes
56
120
Shareholders' equity (deficiency)
796
(1,555)
Total Capital
$
14,714
$
14,871
Total long-term debt and lease liabilities
13,862
16,306
Less Cash and cash equivalents, and short-term and long-term investments
(9,295)
(8,811)
Net debt
$
4,567
$
7,495
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