Air Canada 2007 Annual Report Download - page 102

2007 Air Canada Annual Report
102
8. LONG-TERM DEBT AND CAPITAL LEASES
Final
Maturity
Stated
Interest Rate 2007 2006
Embraer aircraft fi nancing (a) 2017 - 2021 6.61 - 8.49 $ 1,138 $ 776
Boeing aircraft fi nancing (b) 2019 5.13 - 5.69 647 -
Predelivery fi nancing (c) 2008 - 2013 6.16 521 -
Conditional sales agreements (d) 2019 7.74 - 7.97 149 184
Lufthansa cooperation agreement (e) 2009 6.50 25 44
GE loan (f) 2015 10.58 38 48
Revolving credit facility (g) - -
Canadian Regional Jet (h) 2012 6.43 33 -
Other - 5
Direct Corporation debt 2,551 1,057
Jazz - senior syndicated credit facility (i) - 115
Aircraft and engine leasing entities - debt (j) 771 1,051
Fuel facility corporations - debt (k) 125 59
Debt consolidated under AcG-15 896 1,225
Capital lease obligations (l) 972 1,281
Total debt and capital leases 4,419 3,563
Current portion (413 ) (367 )
Long-term debt and capital leases $ 4,006 $ 3,196
The Stated Interest Rate in the table above is the rate as of December 31, 2007
Principal repayment requirements as at December 31, 2007 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:
2008 2009 2010 2011 2012 Thereafter Total
Direct Corporation debt $ 160 $ 152 $ 141 $ 153 $ 166 $ 1,779 $ 2,551
Debt consolidated under AcG-15 105 51 100 288 73 279 896
Capital lease principal obligation 148 80 83 84 132 445 972
Total $ 413 $ 283 $ 324 $ 525 $ 371 $ 2,503 $ 4,419
(a) Embraer aircraft fi nancing amounts to US$1,151 as at December 31, 2007 (US$666 as at December 31, 2006). Principal
and interest is repaid quarterly until maturity. The loan is secured by the 57 delivered Embraer aircraft, including 2005
to 2007 deliveries, with a carrying value of $1,651.
(b) Boeing aircraft fi nancing amounts to US$655 as at December 31, 2007, which is fi nanced under loan guarantee
support provided by the Export-Import Bank of the United States (“EXIM”), as described below. Principal and interest is
repaid quarterly until maturity. The loan is secured by the 7 delivered aircraft with a carrying value of $992.
On April 19, 2007, the Corporation received a fi nal commitment for loan guarantee support, subject to the fulfi llment
of certain terms and conditions, from EXIM covering seven Boeing 777 aircraft under the Corporation’s purchase
agreement with Boeing (the “Boeing Purchase Agreement”), to be delivered in 2007. During 2007, the Corporation
took delivery of eight Boeing 777 aircraft, seven of which were acquired under the Boeing Purchase Agreement and
fi nanced under the loan guarantee support provided by EXIM, the other one being subject to an operating lease
agreement with International Lease Finance Corporation (“ILFC”).
(c) On October 30, 2007, the Corporation entered into an agreement with a syndicate of banks for the fi nancing of pre-
delivery payments (“PDP”) for 10 of the 16 Boeing B777 aircraft contemplated in the Boeing Purchase Agreement.
The PDP fi nancing is a series of loans that are aircraft specifi c with a maximum aggregate commitment of up to
$568 (US$575). The PDP loans have a term of fi ve years, but may be prepaid upon the delivery of the aircraft without
penalty. The Corporation drew $533 (US$540) in October 2007. The Corporation prepaid in November 2007, the
PDP loan of $64 (US$65) on the fi rst Boeing 777 delivered under the PDP fi nancing agreement. In addition, the
Corporation has served notice to the PDP syndicate that it will be repaying the PDP loans on delivery of the second
through eighth aircraft. Air Canada’s intent is to prepay all PDP loans upon delivery of the relevant aircraft, using