Edmonton Regional Airports Authority - Edmonton International Airport

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Edmonton Regional Airports Authority Notes to Financial Statements December 31, 2006 and 2005 (in thousands of dollars, unless otherwise noted) Deferred revenue consists of a prepayment of rent for a long-term lease at the City Centre Airport which is amortized to earnings using the straight-line method over the tenant’s lease term of 52 years. Government contributions for certain capital expenditures at the International Airport, City Centre, and Villeneuve airports will be amortized to earnings using the straight-line method over the useful lives of the underlying assets as follows: Contribution $ Useful Life (Years) Baggage conveyor systems 14,578 15 Runway rehabilitation 1,108 15 b) Other revenue 15,686 2006 $ 2005 $ Amortization of capital contributions 1,018 - International Airport fire training services 18 13 Villeneuve Airport maintenance reduction charge 29 40 Other 24 10 1,089 63 11 Fair value of financial assets and financial liabilities The fair value of Edmonton Airports’ cash in interest bearing accounts, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the immediate or short-term maturity of these financial instruments. The fair value of the interest bearing cash deposits approximates its carrying value. The fair value of the tenants’ security deposits approximates its carrying value as it represents cash and accrued interest at rates comparable to currently available rates. The fair value of the lessee receivables is not determinable. The fair value of the obligation under capital leases approximates its carrying value. The fair value at December 31, 2006 of the Series A Bonds at a market rate of 5.10% (2005 – 5.01%) is $300,507 (2005 – $307,220). Fair value has been calculated using the future cash flows (principal and interest) of the outstanding debt instruments, discounted at current market rates available to Edmonton Airports for the same or similar instruments. The fair value at December 31, 2006 of the Series C Bonds approximates its carrying value as it was negotiated near its valuation date. 51
Edmonton Regional Airports Authority Notes to Financial Statements December 31, 2006 and 2005 (in thousands of dollars, unless otherwise noted) 12 Contingencies first class business class world class In previous years, Edmonton Airports was named as a defendant in certain lawsuits. The outcome of these actions is currently not determinable. In Edmonton Airports’ opinion, these actions will not result in any significant expense to Edmonton Airports. Settlement, if any, will be accounted for in the period of settlement. 13 Commitments a) Capital commitments Before year end, Edmonton Airports’ Board of Directors approved an expansion of the existing parkade at the International Airport to be substantially completed by late 2007. The total cost of this project is estimated to be $47 million. To December 31, 2006, expenditures of $2,265 (2005 – $Nil) have been incurred on the approved project. At December 31, 2006, there is approximately $1,038 (2005 – $Nil) in outstanding commitments related to this project. It is anticipated that contracts for construction will be completed in early 2007. Edmonton Airports also has outstanding commitments related to other capital projects including surface parking lot expansion, common use terminal equipment, maintenance equipment, and conveyor systems acquisitions. Outstanding commitments of $9,070 are related to 2007 only. b) Operating commitments Edmonton Airports has operating contracts for the provision of management, security, janitorial services and electricity. These contracts have annual commitments as follows: $ 2007 2008 2009 2010 2011 14,186 8,090 5,895 5,389 3,721 The Ammended Canada Lease includes predetermined rent amounts for the periods 2006 through 2009. The amounts for 2010 and 2011 are based upon a percentage of estimated gross revenues at the Edmonton International Airport on a progressive scale. 52
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first class business class world cl
Page 3 and 4: first class business class world cl
Page 5 and 6: President’s Message Edmonton Airp
Page 7 and 8: Edmonton Airports first class busin
Page 9 and 10: Safety and security The safety and
Page 11 and 12: Edmonton Airports 8business class f
Page 13 and 14: Diversification Diversifying our so
Page 15 and 16: Port Alberta and the Asia-Pacific G
Page 17 and 18: Five-year goals and targets Our fiv
Page 19 and 20: Edmonton Airports first class busin
Page 23 and 24: World-Class Leadership Board vision
Page 27 and 28: Management Discussion and Analysis
Page 29 and 30: The reduction in revenue resulting
Page 31 and 32: Cargo Trends Global air cargo volum
Page 33 and 34: Accountability Edmonton Airports’
Page 35 and 36: March 14, 2007 REPORT OF MANAGEMENT
Page 37 and 38: Edmonton Regional Airports Authorit
Page 53: Edmonton Regional Airports Authorit
Page 59 and 60: This annual report was printed on 5
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