Air Canada 2008 Annual Report Download - page 95

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Consolidated Financial Statements and Notes
95
Under the terms of the credit card processing agreement, beginning at the end of the second quarter of 2009, the triggering
events for deposits will change and be based upon a matrix of unrestricted cash and a debt service coverage ratio. The
ratio is based upon an EBITDAR (earnings before interest, income taxes, depreciation, amortization, aircraft rentals, certain
non operating income (expense) and special items) to fixed charges (principal, interest and aircraft rentals) ratio for the
preceding four quarters. Under these triggering events, beginning at the end of the second quarter 2009, the unrestricted
cash required in order to avoid a deposit could be as much as $1.3 billion. The basis for calculating the amount of the
deposit, if required, remains consistent with the above description.
Cargo Investigations
The Corporation is exposed to potential liabilities related to the cargo matter, as described in Note 17. During 2008, the
Corporation recorded a provision of $125 as a preliminary estimate. This estimate is based upon the current status of
the investigations and proceedings and the Corporation’s assessment as to the potential outcome for certain of them.
This provision does not address the proceedings in all jurisdictions, but only where there is sufficient information to do
so. Management has determined it is not possible at this time to predict with any degree of certainty the outcome of all
proceedings. Additional material provisions may be required. Amounts could become payable within the year and may be
materially different than management’s preliminary estimate.