Air Canada 2014 Annual Report Download - page 114

Download and view the complete annual report

Please find page 114 of the 2014 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

114114 2014 Annual Report
The following table provides a continuity schedule of all recorded provisions. Refer to Note 18 for
additional information on Litigation provisions. Current provisions are recorded in Accounts payable and
accrued liabilities.
MAINTENANCE (A)
ASSET
RETIREMENT (B) LITIGATION
TOTAL
PROVISIONS
AT DECEMBER 31, 2013
Current $ - $ - $ 29 $ 29
Non-current 656 17 -673
$ 656 $ 17 $ 29 $ 702
Provisions arising during the year $ 91 $ - $ 1 $ 92
Amounts disbursed (14) -(1) (15)
Changes in estimated costs (13) 2 - (11)
Accretion expense 11 - - 11
Foreign exchange loss 65 - - 65
AT DECEMBER 31, 2014 $ 796 $ 19 $ 29 $ 844
Current $ - $ - $ 29 $ 29
Non-current 796 $ 19 -815
$ 796 $ 19 $ 29 $ 844
(a) Maintenance provisions relate to the provision for the costs to meet the contractual return conditions
on aircraft under operating leases. The provision relates to leases with expiry dates ranging from 2015
to 2024 with the average remaining lease term of approximately four years. The maintenance provisions
take into account current costs of maintenance events, estimates of inflation surrounding these costs as
well as assumptions surrounding utilization of the related aircraft. Assuming the aggregate cost for return
conditions increases by 5%, holding all other factors constant, there would be a cumulative balance sheet
adjustment to increase the provision by $40 at December 31, 2014 and an increase to maintenance expense
in 2015 of approximately $3. If the discount rates were to increase by 1%, holding all other factors constant,
there would be a cumulative balance sheet adjustment to decrease the provision by $17 at December 31,
2014. Due to low market rates of interest, a 1% decrease in discount rates was not considered a reasonable
scenario.
(b) Under the terms of certain land and facilities leases, the Corporation has an obligation to restore the land to
vacant condition at the end of the lease and to rectify any environmental damage for which it is responsible.
The related leases expire over terms ranging from 2015 to 2041. These provisions are based on numerous
assumptions including the overall cost of decommissioning and remediation and the selection of alternative
decommissioning and remediation approaches. The non-current provision is recorded in Other long-term
liabilities.
10. PROVISIONS FOR OTHER LIABILITIES