Air Canada 2009 Annual Report Download - page 118

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2009 Air Canada Annual Report
118
9. OTHER LONG-TERM LIABILITIES
2009 2008
Unfavourable contract liability on aircraft leases (a) $ 31 $ 37
Proceeds from contractual commitments (b) Note 1C 107 -
Aircraft rent in excess of lease payments Note 2W 41 56
Long-term employee liabilities (c) 33 35
Workplace safety and insurance board liabilities 40 37
Deferred gains on aircraft sale- leasebacks 69 76
Other (d) 134 129
$ 455 $ 370
(a) The unfavourable contract liability on aircraft leases represents the net present value of lease payments in excess of
estimated market rents related to lease arrangements that existed on fresh start reporting.
(b) Proceeds from contractual commitments represent non-refundable proceeds received, net of related costs and
deposits, in consideration of various contractual commitments and will be recognized as reductions in the cost of
those contractual commitments when incurred.
(c) The following table outlines the changes to labour related provisions which are included in long-term employee
liabilities:
2009 2008
Beginning of year $ 54 $ 66
Interest accretion 3 4
Charges recorded in Wages, salaries and benefi ts 30 21
Amounts disbursed (26) (37)
End of year 61 54
Current portion in Accounts payable and accrued liabilities (28) (19)
$ 33 $ 35
The Corporation offers certain severance programs to certain employees from time to time. The cost of these
programs is recorded within Operating expenses.
(d) “Other” includes asset retirement obligations of the Corporation. Under the terms of their respective land leases,
each Fuel Facility Corporation has an obligation to restore the land to vacant condition at the end of the lease and to
rectify any environmental damage for which it is responsible. If it were found that the Fuel Facility Corporations had
to contribute to any remediation costs, each contracting airline would share pro rata, based on system usage, in the
costs. For all asset retirement obligations including all Fuel Facility Corporations in Canada in which the Corporation
participates, the Corporation has recorded an obligation of $9 ($40 undiscounted) (2008 - $8 ($40 undiscounted))
representing the present value of the estimated decommissioning and remediation obligations at the end of the
lease using an 8% (2008 - 8%) discount rate, with lease term expiry dates ranging from 2032 to 2039. This estimate
is based on numerous assumptions including the overall cost of decommissioning and remediation and the selection
of alternative decommissioning and remediation approaches.