Air Canada 2014 Annual Report Download - page 54

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54 2014 Annual Report
9.8. CONTRACTUAL OBLIGATIONS
The table below provides Air Canada’s contractual obligations as at December 31, 2014 including those relating
to interest and principal repayment obligations on Air Canada’s long-term debt and finance lease obligations,
operating lease obligations and committed capital expenditures.
CANADIAN DOLLARS IN MILLIONS 2015 2016 2017 2018 2019 THEREAFTER TOTAL
Long-term debt obligations $ 418 $ 381 $ 505 $ 484 $ 1,485 $ 1,751 $ 5,024
Finance lease obligations 66 28 29 32 35 93 283
TOTAL PRINCIPAL OBLIGATIONS $ 484 $ 409 $ 534 $ 516 $ 1,520 $ 1,844 $ 5,307
Long-term debt obligations $ 262 $ 242 $ 243 $ 194 $ 167 $ 152 $ 1,260
Finance lease obligations 25 20 17 14 11 27 114
TOTAL INTEREST OBLIGATIONS $ 287 $ 262 $ 260 $ 208 $ 178 $ 179 $ 1,374
TOTAL LONG-TERM DEBT AND FINANCE
LEASE OBLIGATIONS
$ 771 $ 671 $ 794 $ 724 $ 1,698 $ 2,023 $ 6,681
Operating lease obligations $ 359 $ 300 $ 266 $ 227 $ 185 $ 296 $ 1,633
Committed capital expenditures $ 1,067 $ 2,122 $ 1,598 $ 1,362 $ 1,066 $ 1,041 $ 8,256
TOTAL CONTRACTUAL OBLIGATIONS (1)(2) $ 2,197 $ 3,093 $ 2,658 $ 2,313 $ 2,949 $ 3,360 $ 16,570
1 Total contractual obligations exclude commitments for goods and services required in the ordinary course of business. Also excluded are other long-term liabilities mainly due to
reasons of uncertainty of timing of cash flows and items that are non-cash in nature.
2 The table above excludes the future minimum non-cancellable commitments under CPA arrangements which, at December 31, 2014, for the year 2015, amounted to approximately
$856 million with Jazz and $115 million for the other regional carriers. In February 2015, Air Canada and Jazz concluded an amendment to the Jazz CPA, effective as of January 1, 2015.
Air Canada is assessing the impact to the minimum non-cancellable commitment under the amended Jazz CPA, which includes modification to the fee structure by creating a fixed fee
compensation structure to replace the current variable mark-up structure.
Covenants in Credit Card Agreements
Air Canada has various agreements with companies that process customer credit card transactions.
Approximately 85% of Air Canada’s sales are processed using credit cards, with remaining sales processed
through cash based transactions. Air Canada receives payment for a credit card sale generally in advance of
when the passenger transportation is provided.
Air Canada’s principal credit card processing agreements for credit card processing services in North America
contain triggering events upon which Air Canada is required to provide the credit card processor with cash
deposits. The obligation to provide cash deposits and the required amount of deposits are each based upon a
matrix measuring, on a quarterly basis, both a fixed charge coverage ratio for Air Canada and the unrestricted
cash and short-term investments of Air Canada. In 2014, Air Canada made no cash deposits under these
agreements (nil in 2013).
Air Canada also has agreements with another processor for the provision of certain credit card processing
services requirements for markets other than North America and for its cargo operations worldwide where
such agreements also contain deposit obligations. In 2014, Air Canada made no cash deposits under these
agreements (nil in 2013).