Air Canada 2007 Annual Report Download - page 98

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2007 Air Canada Annual Report
98
4. PROPERTY AND EQUIPMENT
2007 2006
Cost
Flight equipment, including spare engines (a) $ 5,433 $ 3,666
Assets under capital leases (b) 1,899 1,813
Buildings, including leasehold improvements 603 662
Ground and other equipment 136 122
8,071 6,263
Accumulated depreciation and amortization
Flight equipment, including spare engines (a) 685 476
Assets under capital leases (b) 438 285
Buildings, including leasehold improvements 118 95
Ground and other equipment 35 24
1,276 880
6,795 5,383
Purchase deposits, including capitalized interest (c) 1,124 563
Property and equipment at net book value (d) $ 7,919 $ 5,946
(a) Included in fl ight equipment as at December 31, 2007 are rotable parts, including spare engines with a cost of $560
(2006 - $450) less accumulated depreciation of $121 (2006 - $70) for a net book value of $439 (2006 - $380). Also
included in fl ight equipment are 33 aircraft which are leased to Jazz (Note 16) and third parties with a cost of $753
(2006 - $763) less accumulated depreciation of $152 (2006 - $100) for a net book value of $601 (2006 - $663).
(b) Included in capital leases as at December 31, 2007 are 39 aircraft (2006 - 37) with a cost of $1,825 (2006 - $1,739)
less accumulated depreciation of $409 (2006 - $265) for a net book value of $1,416 (2006 - $1,474), computer
equipment with a cost of $28 (2006 - $28) less accumulated depreciation of $23 (2006 - $16) for a net book value
of $5 (2006 - $12) and facilities with a cost of $46 (2006 - $46) less accumulated depreciation $6 (2006 - $4) for a
net book value of $40 (2006 - $42).
(c) Includes $867 (2006 - $287) for Boeing B777/787 aircraft, $26 (2006 - $66) for Empresa Brasileira de Aeronautica
S.A. (“Embraer”) aircraft, $205 (2006 - $175) for the aircraft interior refurbishment program and $26 (2006 - $35)
for equipment purchases and internal projects. Refer to Note 8(c) relating to the fi nancing of Boeing predelivery
payments.
(d) Net book value of Property and equipment includes $973 (2006 - $1,137) consolidated for aircraft and engine
leasing entities, $123 (2006 - $111) consolidated for fuel facility corporations, and nil (2006 - $199) consolidated for
Jazz; all of which are consolidated under AcG-15 (Jazz ceased to be consolidated effective May 24, 2007 as described
in Note 1).
As at December 31, 2007, fl ight equipment included 12 aircraft (2006 - 28), that are retired from active service with a net
carrying value of $5 (2006 - $5), which approximates fair value.
Interest capitalized during 2007 amounted to $108 (2006 - $61) with $63 at an interest rate of 3 month US LIBOR plus
3.0%, $5 at an interest rate of 30 day LIBOR plus 1.14%, and $40 at an interest rate of 8.34%.