Air Canada 2013 Annual Report Download - page 112

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2013 Air Canada Annual Report
112
(c) Other US dollar secured financings are fixed and floating rate financings that are secured by certain assets including
assets described in b) above relating to the New Credit Facility. It also includes a revolving credit facility for the financing
of jet fuel. Financial covenants under the revolving credit facility require the Corporation to maintain certain minimum
operating results and cash balance tests. In 2012, this debt amount included spare engines financings of which an amount
of US$44 was repaid in 2013.
(d) Other CDN dollar secured financing is a revolving credit facility for the financing of jet fuel. Financial covenants under the
agreement require the Corporation to maintain certain minimum operating results and cash balance tests.
(e) Finance leases, related to facilities and aircraft, total $328 ($76 and US$237) (2012 – $363 ($78 and US$286)). During
2013, the Corporation recorded interest expense on finance lease obligations of $46 (2012 – $40). The carrying value of
aircraft and facilities under finance leases amounted to $150 and $45 respectively (2012 – $177 and $47).
Air Canada has aircraft leasing transactions with a number of structured entities. Air Canada controls and consolidates leasing
entities covering 23 aircraft as at December 31, 2013. This debt amount includes any guarantee by Air Canada in the residual
value of the aircraft upon expiry of the lease. The related aircraft are charged as collateral against the debt by the owners
thereof. The creditors under these leasing arrangements have recourse to Air Canada, as lessee, in the event of default or early
termination of the lease.
Certain aircraft and other secured finance agreements contain collateral fair value tests. Under the tests, Air Canada may be
required to provide additional collateral or prepay part of the financings. The maximum amount payable in 2014, assuming
the collateral is worth nil, is $271 (US$257). The maximum amount payable declines over time in relation to the outstanding
principal. Total collateral as at December 31, 2013 is $5 (US$5) (2012 – $20(US$20)) in the form of cash deposits, included in
Deposits and other assets, has been provided under the fair value test for certain of these aircraft leases.
Cash interest paid on Long-term debt and finance leases in 2013 by the Corporation was $345 (2012 – $287).
Refer to Note 16 for the Corporation’s principal and interest repayment requirements as at December 31, 2013.