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FINANCIAL STATEMENTS S TAT E M E N T O F O P E R AT I O N S AND CHANGES IN NET ASSETS Year ended December 31 2006 2005 (in thousands of dollars) $ $ revenues Terminal and passenger security fees 11,875 8,833 Landing fees 9,148 8,703 Concessions 8,301 7,789 Parking 6,260 5,314 Rentals 1,825 2,018 Interest income 1,756 63 Other (note 4) 312 1,640 39,477 34,360 Airport improvement fees (note 5) 12,316 11,707 51,793 46,067 operating expenses Salaries, wages and benefits 11,655 11,042 Materials, services and supplies 11,276 9,061 Amortization 6,530 3,361 Ground lease rent 4,271 4,361 General and administrative 3,588 3,376 Interest expense on long-term debt (note 4) 2,762 36 Property taxes 1,265 1,187 41,347 32,424 Excess of revenues over expenses 10,446 13,643 Net assets, beginning of year 76,569 62,926 Net assets, end of year (note 5) 87,015 76,569 See accompanying notes STATEMENT OF CASH FLOWS Year ended December 31 2006 2005 (in thousands of dollars) $ $ operating activities Excess of revenues over expenses 10,446 13,643 Items not involving cash: Amortization 6,530 3,361 Net change in non-cash working capital balances related to operations (7,559) 3,949 Cash provided by operating activities 9,417 20,953 investing activities Expenditures on capital assets (54,008) (48,581) Cash used in investing activities (54,008) (48,581) financing activities Proceeds of bond issue 150,000 – Proceeds of long-term debt construction loan 24,000 26,000 Repayments of long-term debt (50,081) (1,086) Debt service reserve fund (4,127) – Deferred financing costs (3,912) – Cash provided by financing activities 115,880 24,914 Increase (decrease) in cash 71,289 (2,714) Cash, beginning of year 6,065 8,779 Cash, end of year 77,354 6,065 Supplementary Information Cash interest paid – long-term debt – 35 See accompanying notes H A L I F A X I N T E R N A T I O N A L A I R P O R T A U T H O R I T Y 2 0 0 6 A N N U A L R E P O R T 16
NOTES TO FINANCIAL STATEMENTS December 31, 2006 1. general The Halifax International Airport Authority (the “Authority”) was incorporated on November 23, 1995 as a corporation without share capital under Part II of the Canada Corporations Act. On February 1, 2000, the Authority signed a 60-year ground lease with Transport Canada and assumed responsibility for the management, operation and development of the Halifax Robert L. Stanfield International Airport. Excess revenues over expenses are retained and reinvested in airport operations and development. The Authority is a dynamic and multi-faceted aviation enterprise that provides air access to the world, facilitates personal and business connections and promotes regional economic growth. The Authority is governed by a Board of Directors whose members are nominated by the Halifax Regional Municipality, the Province of Nova Scotia and the Federal Government, as well as the Halifax Chamber of Commerce. The nominated members can also appoint additional members who represent the interests of the community. The Authority is exempt from federal and provincial income tax, federal large corporation tax, and Nova Scotia capital tax. 2. significant accounting policies The Authority’s financial statements have been prepared in accordance with Canadian generally accepted accounting principles. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities at the date of the financial statements and the reported amounts of certain revenues and expenses during the year. Actual results could differ from those estimates. Inventories Inventories consist of materials, parts and supplies and are stated at the lower of cost, determined on an average cost basis, and estimated replacement cost. Ground lease The ground lease with Transport Canada is accounted for as an operating lease. Capital assets Capital assets are recorded at cost including interest on funds borrowed for capital purposes, net of contributions and government assistance and are amortized over their estimated useful lives on a straight-line basis as follows: 2. significant accounting policies (continued) Assets Rate Computer hardware and software 20% - 33% Leasehold improvements 2.5% - 10% Machinery, equipment, furniture and fixtures 5% - 20% Vehicles 5% - 17% Construction in progress is recorded at cost and is transferred to leasehold improvements when the projects are complete and the assets are placed into service. Revenue recognition Landing fees, terminal fees, parking revenues and passenger security fees are recognized as the airport facilities are utilized. Concession revenues are recognized on the accrual basis and calculated using agreed percentages of reported concessionaire sales, with specified minimum guarantees where applicable. Rental revenues are recognized over the lives of respective leases, licenses and permits. Airport improvement fees (“AIF”) are recognized when originating departing passengers board their aircraft as reported by the airlines. Deferred revenue consists primarily of a portion of the common-use terminal equipment (“CUTE”) fee required for future capital acquisitions and the unamortized portion of a grant received from the government to undertake specific marketing activities to increase the air connections and routes between the United Kingdom, Germany, Iceland, the Netherlands and Nova Scotia that use Halifax Robert L. Stanfield International Airport. Employee benefit plans The Authority sponsors a pension plan on behalf of its employees which has defined benefit and defined contribution components. In valuing pension obligations for its defined benefit component, the Authority uses the accrued benefit actuarial method prorated on services and best estimate assumptions. Pension plan assets are valued at current market values. The excess of the accumulated net actuarial gain or loss over 10% of the greater of the accrued benefit obligation and the fair value of the plan assets is amortized over the average remaining service life of employees. Defined contribution component amounts are expensed as incurred. Deferred financing costs Costs relating to the issue of Series A Revenue Bonds, including agent fees, professional fees and termination of interest-rate swap agreements, are deferred and amortized on a straight-line basis over the term of the related debt. H A L I F A X I N T E R N A T I O N A L A I R P O R T A U T H O R I T Y 2 0 0 6 A N N U A L R E P O R T 17
Page 1 and 2: Halifax International Airport Autho
Page 3 and 4: C Message from the Chair | 2 P Mess
Page 5 and 6: Message from the Chair Halifax Inte
Page 7 and 8: P 2006 will be remembered as a wate
Page 9 and 10: S E T T I N G T H E S TAG E Transfo
Page 11 and 12: R E WARDING EXPERIENCES Enhancing o
Page 13 and 14: What’s more, HIAA supported over
Page 15 and 16: U.S. preclearance means many new de
Page 17: Financial Statements AU D I TO R S
Page 21 and 22: NOTES TO FINANCIAL STATEMENTS Decem
Page 23 and 24: NOTES TO FINANCIAL STATEMENTS Decem
Page 25 and 26: Peter McDonough, QC Director Bernar
Page 27 and 28: Five-Year Forecast A C T U A L F I

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