Financial Statements of
Ottawa Macdonald-Cartier International Airport Authority

December 31, 2016

Management’s Responsibility for Financial Statements

Management of Ottawa Macdonald-Cartier International Airport Authority is responsible for the integrity of the accompanying financial statements and all other information in this Annual Report. The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles, which for publicly accountable enterprises, and in the case of the Authority, require International Financial Reporting Standards. Their preparation necessarily involves the use of management’s best estimates and careful judgement, particularly in those circumstances where transactions affecting a current period are dependent upon future events. All financial information in the Annual Report is consistent with the information and data contained in the financial statements.

To discharge its responsibilities for financial reporting and safeguarding of assets, management believes that it has established appropriate systems of internal accounting control which provide reasonable assurance that the financial records are reliable and form a proper basis for the timely and reliable preparation of financial statements.

The Board of Directors discharges its responsibilities for the financial statements primarily through its Audit Committee, which is composed solely of Directors who are neither officers nor employees of the Authority. This committee meets periodically with management and the independent auditors to review performance and to discuss audit, internal control, accounting policy, and financial reporting matters. The Audit Committee reports its findings to the Board of Directors which reviews and approves annual financial statements. These financial statements were reviewed by the Audit Committee and approved by the Board of Directors.

The financial statements have been audited by PricewaterhouseCoopers LLP, who were appointed at the annual general meeting. Their report is presented below.

Mark Laroche
President and Chief Executive Officer

Rob Turpin, CPA, CA, CPA (Illinois)
Vice-President, Finance and Chief Financial Officer

INDEPENDENT AUDITOR’S REPORT

To the Directors of Ottawa Macdonald-Cartier International Airport Authority

We have audited the accompanying financial statements of the Ottawa Macdonald-Cartier International Airport Authority, which comprise the balance sheet as at December 31, 2016 and the statements of operations and comprehensive income (loss), changes in equity, and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Ottawa Macdonald-Cartier International Airport Authority as at December 31, 2016 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Chartered Professional Accountants, Licensed Public Accountants
Ottawa, Ontario
February 22, 2017

Balance Sheet

as at December 31, 2016
(in thousands of Canadian dollars)

Assets	2016 $	2015 $
Current assets
Cash and cash equivalents	29,955	42,719
Trade and other receivables	14,709	11,611
Consumable supplies	3,326	3,531
Prepaid expenses and advances	1,581	1,090
Sinking Fund investments (note 3)	200,000	200,000
	249,571	258,951

Non-current assets Debt Service Reserve Fund (note 8a)	11,321	11,232
Property, plant and equipment (note 4)	432,443	435,821
Post-employment pension benefit asset (note 10)	204	148
Other assets (note 5)	5,399	5,463
	698,938	711,615

Liabilities and Equity	2016 $	2015 $
Current liabilities
Accounts payable and accrued liabilities	18,293	21,635
Current portion of long-term debt (note 8)	203,695	3,272
	221,988	24,907

Non-current liabilities Other post-employment benefit liability (note 10)	8,532	7,559
Long-term debt (note 8)	424,258	627,588
	654,778	660,054

Equity
Retained earnings	51,612	56,881
Accumulated other comprehensive loss	(7,452)	(5,320)
	44,160	51,561
	698,938	711,615

(See accompanying notes to the financial statements)

Statement of Operations and Comprehensive Income

years ended December 31
(in thousands of Canadian dollars)

Revenues	2016 $	2015 $
Airport improvement fees (note 9)	46,920	45,434
Terminal fees and loading bridge charges	26,432	25,248
Landing fees	12,861	12,448
Concessions	12,419	10,923
Car parking	14,344	13,746
Land and space rentals (note 12)	6,349	6,237
Other revenue	2,587	2,628
Gain on cash flow hedges (note 8)	–	1,588
	121,912	118,252

Expenses	2016 $	2015 $
Interest (net) (note 8b)	29,029	24,105
Ground rent (note 12)	8,994	8,737
Materials, supplies, and services	33,404	31,106
Salaries and benefits (note 10)	22,690	21,500
Payments in lieu of municipal taxes	5,017	4,974
	99,134	90,422

Earnings before depreciation	22,778	27,830
Depreciation	28,047	25,953
Net earnings (loss) for the year	(5,269)	1,877
Other comprehensive income (loss) Items that will never be reclassified subsequently to net earnings – Remeasurement of defined benefit plans (note 10)	(2,132)	2,094
Total comprehensive income (loss)	(7,401)	3,971

(See accompanying notes to the financial statements)

Statement of Changes in Equity

years ended December 31
(in thousands of Canadian dollars)

Equity	2016 $	2015 $
Retained earnings – beginning of year	56,881	55,004
Net earnings (loss) for the year	(5,269)	1,877
Retained earnings – end of year	51,612	56,881

Accumulated other comprehensive loss
Remeasurement of defined benefit plans (that will never be recycled into net earnings) Balance – beginning of year	(5,320)	(7,414)
Other comprehensive income (loss) for the year (note 10)	(2,132)	2,094
Balance – end of year	(7,452)	(5,320)
Total equity	44,160	51,561

(See accompanying notes to the financial statements)

Statement of Cash Flows

years ended December 31
(in thousands of Canadian dollars)

Cash Provided By (Used In)	2016 $	2015 $
Operating activities
Net earnings (loss) for the year	(5,269)	1,877
Non-cash items:
Depreciation	28,047	25,953
Amortization of deferred financing costs	365	320
Decrease in other assets	64	57
Decrease in other post-employment benefit liability	(1,215)	(1,924)
	21,992	26,283
Interest expense (net)	29,029	24,105
Interest paid	(30,587)	(25,207)
Changes in non-cash working capital related to operations (note 13)	(2,572)	(457)
	17,862	24,724

Cash Provided By (Used In)	2016 $	2015 $
Financing activities
Proceeds on disposal of property, plant and equipment	10	–
Issue of long-term debt	–	300,000
Debt issue transaction costs	–	(1,577)
Increase in Debt Service Reserve Fund (note 8a)	(89)	(197)
Repayment of long-term debt	(3,272)	(3,111)
	(3,351)	295,115

Investing activities
Purchase of property, plant and equipment (note 4)	(24,679)	(31,206)
Increase in Sinking Fund investments	–	(200,000)
Change in accounts payable and accrued liabilities related to investing activities	(2,596)	2,768
	(27,275)	228,438
Increase (decrease) in cash and cash equivalents	(12,764)	91,401
Cash and cash equivalents (bank indebtedness) – beginning of year	42,719	(48,682)
Cash and cash equivalents – end of year	29,955	42,719

(See accompanying notes to the financial statements)

The Ottawa Airport was the setting for the two-week Canadian Police Canine Association “Train the Trainers” canine behavior shaping course for law enforcement canine teams from across the country. The dynamic and complex airport environment was ideal for specific training exercises, and the teams had the opportunity to hone their skills before taking their newfound tips and techniques back to their respective communities.
Ottawa Macdonald-Cartier International Airport Authority Annual Report 2016 13 Travelling from Winnipeg was no small feat for Edith who had come to spend her first Christmas in Ottawa. Although this 90-year-old grandmother had looked forward to the trip to visit her son and his family (and to meet her granddaughter’s new boyfriend), moving throughout the terminal with limited mobility had concerned her. The assistance she received and the accessibility of the airport made her passage from the gate to the arrivals area easy and comfortable. As Edith put it, “it’s a lovely place to pass through, and the welcome has been wonderful.”
Saying goodbye is never easy – especially when you’re parting ways for as much as a year. The members of the 2016-2017 National Evangelization Team know that all too well, and the Ottawa Airport has been the back-drop for many of their bittersweet goodbyes as they head off to do their mission work. The youths are like a family, so their time spent together at the airport before they leave is very important to them, and like they put it, “one for the scrapbook”.
Maya and Clara thought that offering a stuffed animal to a child arriving at the airport would be the perfect way to say “Welcome to Canada”. The girls learned of the crisis in Syria and the impact it was having on Syrian children. When they found out that most families would be arriving in Ottawa by air, they decided to launch a ‘Stuffies for Syria’ campaign. They collected more than 700 stuffed animals and handed them out at the airport, along with a lot of compassion and reassuring smiles to some grateful newcomers.
Stittsville native Erica Wiebe was overwhelmed with the warm welcome she received in the arrivals area following her gold-medal win for wrestling at the Rio 2016 Olympics. She was greeted by Ottawa Mayor Jim Watson and City Councillor Marianne Wilkinson, and about a hundred friends, family, and fans. Having the group cheering and holding flags and signs as she came down the escalator, following a bagpiper, gave her a well-deserved hero’s hometown welcome. She was very gracious and made her way through the crowd, greeting each person who had come out, signing autographs, posing for photos, and even letting people touch her gold medal.
Each step that Boniface and Isaac took at the airport years ago was a step towards a new beginning and a promising future, filled with hope, freedom, and success. Originally from the Congo, they were welcomed at the Ottawa Airport as refugees. Nowadays, visiting the airport means something completely different to them. It bridges the distance between them and their brother and enables them to renew and maintain relationships abroad.
Charities like the Ottawa Food Bank rely on donations from the community in order to provide much-needed support to those who need it. The Ottawa Airport and its campus partners have been supporters of the Ottawa Food Bank for the past seven years, raising funds during the holidays, or donating the coins from the fountains. Our support has helped the 41,500 people who, every month, turn to a food bank when they would otherwise go hungry. Rachael Wilson, the Director of Communications and Development at the Ottawa Food Bank, was thrilled to also receive 800 pounds of non-perishable food items that were donated by airport employees and packed up by volunteers.