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7. LONG-TERM DEBT AND CAPITAL LEASES
Final
Maturity
Stated Interest
Rate
2006
2005
Embraer aircraft financing (a) 2017 – 2021 6.89 – 8.49 $ 776 $ 393
Conditional sales agreements (b) 2019 8.26 – 8.28 184 193
Lufthansa cooperation agreement (c) 2009 6.50 44 59
GE loan (d) 2015 11.12 48 51
Revolving credit facility (e) 2010 - - -
Other 2007 – 2010 4.32 – 9.10 5 8
Direct Corporation debt 1,057 704
Jazz – senior syndicated credit facility (f) 2009 7.09 115 -
Jazz – term loans and credit facilities - 14
Aircraft and engine leasing entities – debt (g) 1,051 1,125
Fuel facility corporations – debt (h) 59 53
Debt consolidated under AcG-15 1,225 1,192
Capital lease obligations (i) 1,281 1,365
Total debt and capital leases
3,563
3,261
Current portion (367) (265)
Long-term debt and capital leases $ 3,196 $ 2,996
The Stated Interest Rate in the table above is the rate as of December 31, 2006.
Principal repayment requirements as at December 31, 2006 on long-term debt and capital lease obligations, and
aircraft, engine and fuel facility debt consolidated as variable interest entities under AcG-15 are as follows:
2007 2008 2009 2010 2011 Thereafter
Direct Corporation debt $ 67 $ 85 $ 70 $ 55 $ 70 $ 710
Debt consolidated under AcG-15 120 117 175 118 248 447
Capital lease principal obligation 180 179 92 90 87 653
Total $ 367 $ 381 $ 337 $ 263 $ 405 $ 1,810
(a) The following table summarizes the loans that Air Canada drew to finance the acquisition of Embraer aircraft
that are secured by the delivered aircraft:
Number of
Aircraft
Interest
Rate
Maturity
Original US$
Loan Amount
Original CDN$
Loan Amount
2006 Year
Embraer 175 1 7.34% 2018 $ 20 $ 23
Embraer 190 15 8.07% 2021 330 374
2005 Year
Embraer 175 14 7.14% 2017 277 329
Embraer 190 3 7.80% 2020 65 75
Total $ 692 $ 801
During 2006, the interest rate margins on outstanding financing relating to all EMB 175 aircraft (US$297)
were re-priced from 3.25% down to 2.35% and eight loans that bear interest at a floating interest rate were
converted to fixed interest rate loans. The Interest Rate above represents the weighted average fixed
interest rates as at December 31, 2006 of the loans that Air Canada drew relating to the Embraer aircraft
financing (7.81% – weighted average rate of the fixed and floating interest rate loans outstanding as at
December 31, 2005).
(b) US$158 principal outstanding on purchases of two A340-500 aircraft financed through conditional sales
agreements. Principal and interest is paid quarterly until maturity in 2019. The purchase price installments
bear interest at a three month LIBOR rate plus 2.9% (8.27% as at December 31, 2006 and 7.26% as at
December 31, 2005).
(c) US$38 principal outstanding to mature in 2009, with semi annual repayments, at a fixed interest rate of
4.495% plus an annual 2.0% guarantee fee.
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