Air Canada 2006 Annual Report Download - page 92

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As at December 31, 2006, obligations under capital leases for future minimum lease payments are as
follows:
2007 $ 275
2008 260
2009 161
2010 152
2011 142
Thereafter 829
Total minimum lease payments 1,819
Less amount representing interest (538)
Total obligation under capital leases $ 1,281
Certain aircraft lease agreements contain a fair value test, beginning on July 1, 2009, and annually
thereafter until lease expiry. This test relates to 38 aircraft under lease of which 37 are accounted for as
capital leases. Under the test, the Corporation may be required to prepay certain lease amounts, based on
aircraft fair values, as of the date of the test. Any amounts prepaid are recoverable to the extent that aircraft
fair values exceed certain thresholds and to the extent the Corporation has obtained residual value support
on lease expiry. The maximum amount payable on July 1, 2009, assuming the related aircraft are worth nil,
is US$871. This amount declines over time to nil upon lease expiry.
Interest paid on long-term debt and capital lease obligations in 2006 by the Corporation was $251 (2005 –
$227).
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