Air Canada 2013 Annual Report Download - page 105
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2013 Consolidated Financial Statements and Notes
105
4. PROPERTY AND EQUIPMENT
Aircraft and
flight
equipment
Buildings, and
leasehold
improvements
Ground and
other
equipment
Purchase
deposits,
including
capitalized
interest
Total
Year ended December 31, 2012
At January 1, 2012 $ 4,346 $ 356 $ 140 $ 96 $ 4,938
Additions 86 38 18 282 424
Reclassifications 30 24 – (54) –
Disposals (22) – (1) – (23)
Depreciation (571) (33) (24) – (628)
At December 31, 2012 $ 3,869 $ 385 $ 133 $ 324 $ 4,711
At December 31, 2012
Cost $ 5,991 $ 662 $ 311 $ 324 $ 7,288
Accumulated depreciation (2,122) (277) (178) – (2,577)
$ 3,869 $ 385 $ 133 $ 324 $ 4,711
Year ended December 31, 2013
At January 1, 2013 $ 3,869 $ 385 $ 133 $ 324 $ 4,711
Additions 736 (4) 27 198 957
Reclassifications 143 3 20 (166) –
Disposals (65) – – – (65)
Depreciation (445) (32) (23) – (500)
Impairment (30) – – – (30)
At December 31, 2013 $ 4,208 $ 352 $ 157 $ 356 $ 5,073
At December 31, 2013
Cost $ 6,119 $ 660 $ 359 $ 356 $ 7,494
Accumulated depreciation (1,911) (308) (202) – (2,421)
$ 4,208 $ 352 $ 157 $ 356 $ 5,073
The Corporation took delivery of four Boeing 777 aircraft in 2013. These aircraft were financed through the proceeds from the
private offering of enhanced equipment trust certificates as described in Note 8. In 2013, an impairment charge of $30 was
recorded in Depreciation, amortization and impairment expense related mainly to four A340-300 aircraft (none of which were
operated by Air Canada). The impairment charge was based upon the net proceeds expected upon the return or other
disposition of these aircraft. In 2013, these four A340-300 aircraft were sold with proceeds approximating book value.
As at December 31, 2013, property and equipment included finance leased assets including 18 aircraft (2012 – 19) with a net
book value of $150 (2012 – $177) and facilities with a net book value of $45 (2012 – $47).
Included in aircraft and flight equipment are 32 aircraft and 6 spare engines (2012 – 28 aircraft and 8 spare engines) which are
leased to Sky Regional, Jazz (Note 16) and third parties with a cost of $481 (2012 – $371) less accumulated depreciation of
$124 (2012 – $112) including accumulated impairment losses of $26 related to the fleet of A340-300 aircraft (2012 – $46)
for a net book value of $357 (2012 – $259). Depreciation expense for 2013 for this aircraft and flight equipment amounted to
$38 (2012 – $50).
Interest capitalized during 2013 amounted to $46 at an interest rate of 8.36% (2012 $18 at an interest rate of 10.85%) and is
included in Purchase deposits and assets under development in the table above.
Certain property and equipment are pledged as collateral as further described under the applicable debt instrument in Note 8.