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102 2014 Annual Report
AIRCRAFT
AND FLIGHT
EQUIPMENT
BUILDINGS AND
LEASEHOLD
IMPROVEMENTS
GROUND
AND OTHER
EQUIPMENT
PURCHASE
DEPOSITS AND
ASSETS UNDER
DEVELOPMENT TOTAL
YEAR ENDED DECEMBER 31, 2013
At January 1, 2013 $ 3,869 $ 385 $ 133 $ 324 $ 4,711
Additions 736 (4) 27 198 957
Reclassifications 143 320 (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
YEAR ENDED DECEMBER 31, 2014
At January 1, 2014 $ 4,208 $ 352 $ 157 $ 356 $ 5,073
Additions 1,011 636 468 1,521
Reclassifications 259 76 2(337) -
Disposals (94) - - - (94)
Depreciation (440) (35) (27) -(502)
At December 31, 2014 $ 4,944 $ 399 $ 168 $ 487 $ 5,998
AT DECEMBER 31, 2014
Cost $ 7,264 $ 742 $ 397 $ 487 $ 8,890
Accumulated depreciation (2,320) (343) (229) -(2,892)
$ 4,944 $ 399 $ 168 $ 487 $ 5,998
During 2014, the Corporation took delivery of six Boeing
787 aircraft and one Boeing 777 aircraft. In 2014, the
Corporation disposed of two A340-500 aircraft and
repaid the financing related to these aircraft. No gain or
loss was recorded on the disposition.
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, 2014, property and equipment
included finance leased assets including 17 aircraft
(2013 – 18) with a net book value of $145 (2013 –
$150) and facilities with a net book value of $42
(2013 – $45).
Included in aircraft and flight equipment are
28 aircraft and 5 spare engines (2013 – 32 aircraft
and six spare engines) which are leased to Sky
Regional, Jazz (Note 16) and third parties with a cost
of $361 (2013 – $481) less accumulated depreciation
of $118 (2013 – $124) including accumulated
impairment losses of $19 related to the fleet of
A340-300 aircraft (2013 – $26) for a net book value
of $243 (2013 – $357). Depreciation expense for 2014
for this aircraft and flight equipment amounted to
$22 (2013 – $38).
Interest capitalized during 2014 amounted to $30 at
an interest rate of 5.29% (2013 – $46 at an interest
rate of 8.36%) 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.
4. PROPERTY AND EQUIPMENT