Air Canada 2007 Annual Report Download - page 113

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Consolidated Financial Statements and Notes
113
11. OTHER LONG-TERM LIABILITIES
2007 2006
Aeroplan miles obligations (a) $ 29 $ 105
Unfavourable contract liability on aircraft leases (b) 54 77
Aircraft rent in excess of lease payments (c) Note 2X 54 121
Long-term employee liabilities (d) 47 54
Workplace safety and insurance board liabilities 45 45
Other (e) 107 70
$ 336 $ 472
(a) Air Canada has a liability related to Aeroplan Miles which were issued by Air Canada prior to January 1, 2002. Refer
to Note 22 for a description of the Special charge for Aeroplan Miles in 2006. As of December 31, 2007 a liability
for approximately 7 billion miles, or $84, remains in Air Canada, of which $55 is included in current liabilities (total
liability of 15 billion Miles, or $163, as at December 31, 2006). The amount of the additional liability was determined
by valuing the incremental Miles at the current fair value.
(b) 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.
(c) Included in this balance is nil as at December 31, 2007 (2006 - $59) related to Jazz, which was consolidated under
AcG-15 until May 24, 2007.
(d) The following table outlines the changes to labour related provisions which are included in long-term employee
liabilities for balances that existed upon the implementation of fresh start reporting on September 30, 2004:
2007 2006
Beginning of year $ 77 $ 121
Interest accretion 5 8
Amounts disbursed (38 ) (52 )
Deconsolidation of Jazz (4 ) -
End of year 40 77
Current portion (6 ) (32 )
$ 34 $ 45
The following table outlines the changes to labour related provisions which are included in long-term employee
liabilities for balances that have been created subsequent to the implementation of fresh start reporting on September
30, 2004 (current portion included in Accounts payable and accrued liabilities):
2007 2006
Beginning of year $ 29 $ 13
Special charge for labour restructuring - 20
Charges recorded in wages, salaries, and beneļ¬ ts 14 7
Amounts disbursed (17 ) (11 )
End of year 26 29
Current portion (13 ) (20 )
$ 13 $ 9
The Corporation offers certain severance programs to certain employees from time to time. The cost of these
programs is recorded within operating expenses.
During 2006 a workforce reduction plan was announced to reduce non-unionized employee levels by 20 percent.
A special charge of $20 was recorded in 2006 relating to this program.