Air Canada 2014 Annual Report Download - page 124
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124124 2014 Annual Report
OPERATING LEASE AND CAPITAL COMMITMENTS
The estimated aggregate cost of the future firm Boeing 787, Boeing 777 and Boeing 737 MAX aircraft deliveries
and other capital purchase commitments as at December 31, 2014 approximates $8,256. U.S. dollar amounts
are converted using the December 31, 2014 closing rate of CDN$1.1601. The estimated aggregate cost of
aircraft is based on delivery prices that include estimated escalation and, where applicable, deferred price
delivery payment interest calculated based on the 90-day U.S. LIBOR rate at December 31, 2014.
2015 2016 2017 2018 2019 THEREAFTER TOTAL
Capital commitments $ 1,067 $ 2,122 $ 1,598 $ 1,362 $ 1,066 $ 1,041 $ 8,256
As at December 31, 2014 the future minimum lease payments under existing operating leases of aircraft and
other property amount to $1,633 using year end exchange rates.
2015 2016 2017 2018 2019 THEREAFTER TOTAL
Aircraft $ 313 $ 268 $ 238 $ 204 $ 172 $ 145 $ 1,340
Other property 46 32 28 23 13 151 293
TOTAL $ 359 $ 300 $ 266 $ 227 $ 185 $ 296 $ 1,633
The future minimum non-cancellable commitment for the next 12 months under the Jazz CPA is approximately
$856 and under the capacity purchase agreements with other regional carriers is $115. In February 2015,
the Corporation and Jazz concluded an amendment to the Jazz CPA, effective as of January 1, 2015. The
Corporation is assessing the impact to the minimum non-cancellable commitment under the amended Jazz
CPA, which includes modifications to the fee structure by creating a fixed fee compensation structure to
replace the current variable mark-up structure.
Non-cancellable Lease and Sublease Receipts
The Corporation leases or subleases to third parties eight aircraft and five spare engines which have final
maturities ranging from 2015 to 2016 and the future minimum rentals receivable under such leases and
subleases amount to $9 using year end exchange rates.
2015 2016 2017 2018 2019 THEREAFTER TOTAL
Subleases $ 6 $ 1 $ 1 $ 1 $ - $ - $ 9
Flow-through Leases
For accounting purposes, the Corporation acts as an agent and subleases certain aircraft to Jazz on a
flow-through basis, which are reported net on the consolidated statement of operations. These subleases
relate to 25 Bombardier CRJ-200 aircraft and 15 Bombardier CRJ-705 aircraft which have final maturities
ranging from 2015 to 2024. The sublease revenue and lease expense related to these aircraft each amounted
to $84 in 2014 (2013 – $78). The operating lease commitments under these aircraft, which are recovered
from Jazz, are not included in the aircraft operating lease commitments or non-cancellable lease and sublease
receipt tables above but are summarized as follows:
2015 2016 2017 2018 2019 THEREAFTER TOTAL
Jazz flow-through leases $ 86 $ 80 $ 73 $ 70 $ 69 $ 233 $ 611