Notes to the Financial Statements

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4 PROPERTY, PLANT AND EQUIPMENT

2016

(in thousands of Canadian dollars)	Buildings and Support Facilities $	Runways, Roadways and Other Paved Surfaces $	Information Technology, Furniture and Equipment $	Vehicles $	Land $	Construction in Progress $	Total 2016 $
Gross value Balance – January 1, 2016	461,887	100,563	40,061	29,256	10,298	11,693	653,758
Additions	211	–	1,614	1,060	13	21,781	24,679
Transfers	16,638	4,907	1,522	–	518	(23,585)	–
Disposals	(3,307)	(1,475)	(5,144)	(273)	(12)	–	(10,211)
At December 31, 2016	475,429	103,995	38,053	30,043	10,817	9,889	668,226

Accumulated depreciation Balance – January 1, 2016	145,372	26,816	28,362	10,947	6,440	–	217,937
Depreciation	18,093	4,327	3,392	1,757	478	–	28,047
Disposals	(3,306)	(1,475)	(5,135)	(273)	(12)	–	(10,201)
At December 31, 2016	160,159	29,668	26,619	12,431	6,906	–	235,783

Net value At December 31, 2016	315,270	74,327	11,434	17,612	3,911	9,889	432,443

2015

(in thousands of Canadian dollars)	Buildings and Support Facilities $	Runways, Roadways and Other Paved Surfaces $	Information Technology, Furniture and Equipment $	Vehicles $	Land $	Construction in Progress $	Total 2015 $
Gross value Balance – January 1, 2015	436,217	96,706	37,404	24,493	9,734	28,800	633,354
Additions	7,766	3,740	3,475	5,251	22	10,952	31,206
Transfers	25,641	117	1,759	–	542	(28,059)	–
Disposals	(7,737)	–	(2,577)	(488)	–	–	(10,802)
At December 31, 2015	461,887	100,563	40,061	29,256	10,298	11,693	653,758

Accumulated depreciation Balance – January 1, 2015	136,307	22,850	27,708	9,921	5,997	–	202,783
Depreciation	16,802	3,966	3,231	1,511	443	–	25,953
Disposals	(7,737)	–	(2,577)	(485)	–	–	(10,799)
At December 31, 2015	145,372	26,816	28,362	10,947	6,440	–	217,937

Net value At December 31, 2015	316,515	73,747	11,699	18,309	3,858	11,693	435,821

5 OTHER ASSETS

(in thousands of Canadian dollars)	2016 $	2015 $
Interest in future proceeds from 4160 Riverside Drive, at cost	2,930	2,930
Tenant improvements and leasehold inducements, net of amortization	2,469	2,533
	5,399	5,463

Interest in future proceeds from 4160 Riverside Drive

In an agreement signed on May 27, 1999, the Authority agreed to assist the Regional Municipality of Ottawa-Carleton (now the City of Ottawa, the “City”) in acquiring lands municipally known as 4160 Riverside Drive by contributing to the City 50.0% of the funds required for the acquisition. In return, the City agreed to place restrictions on the use of the lands to ensure the lands are used for purposes that are compatible with the operations of the Authority. In addition, the Authority will receive 50.0% of the net proceeds from any future sale, transfer, lease or other conveyance of the lands.

Tenant improvements and leasehold inducements

During 2011, the Authority entered into a long-term lease with a subtenant that included a three-year rent-free period and provided, as a tenant inducement, a payment in the amount of $1.5 million towards the cost of utilities infrastructure and other site improvements. Tenant inducements associated with leased premises, including the value of rent free periods, are deferred and amortized on a straight-line basis over the term of the related lease and recognized as a reduction of rental revenues. The value of these tenant inducements is being recognized as a reduction in rent during the first 20 years of the 47-year term of the lease.

6 CREDIT FACILITIES

The Authority maintains access to an aggregate of $140.0 million (2015 – $140.0 million) in committed credit facilities (“Credit Facilities”) with two Canadian banks. The 364-day Credit Facilities that expired on October 14, 2016 have been extended for another 364-day term expiring on October 13, 2017. The Credit Facilities are secured under the Master Trust Indenture (see note 8) and are available by way of overdraft, prime rate loans, or Bankers’ Acceptances. Indebtedness under the Credit Facilities bears interest at rates that vary with the lender’s prime rate and Bankers’ Acceptance rates,
as appropriate.

The following table summarizes the amounts available under each of these Credit Facilities, along with their related expiry dates and intended purposes:

Type of Facility	Maturity	Purpose	2016 $ (millions)	2015 $ (millions)
Revolver 364-Day	October 13, 2017	General corporate and capital expenditures	40.0	40.0
USD Contingency ($10 million USD)	October 13, 2017	Interest Rate hedging	14.0	14.0
Letter of Credit	October 13, 2017	Security for the Debt Service Reserve Fund (see Note 8a)	6.0	6.0
Revolver 5-year	May 15, 2020	General corporate and capital expenditures	80.0	80.0
Total			140.0	140.0

As at December 31, 2016, $14.0 million of the Credit Facilities had been designated to the Operating and Maintenance Reserve Fund (see note 8a).

In order to satisfy the Debt Service Reserve Fund requirement for the Series E Bonds, $5.9 million of the Credit Facilities had been designated to an irrevocable standby letter of credit in favour of the Trustee.

7 CAPITAL MANAGEMENT

The Authority is continued without share capital under the Canada Not-for-profit Corporations Act and, as such, all earnings are retained and reinvested in airport operations and development. Accordingly, the Authority’s only sources of capital for investing in airport operations and development are bank debt, long-term debt, and accumulated earnings included on the Authority’s balance sheet as retained earnings.

The Authority incurs debt, including bank debt and long-term debt, to finance development. It does so on the basis of the amount that it considers it can afford and manage based on revenues from AIF and to maintain appropriate debt service coverage and long term debt per enplaned passenger ratios. This provides for a self-imposed limit on what the Authority can spend on major development of the airport, such as the Authority’s major infrastructure construction programs.

The Authority manages its rates and charges for aeronautical and other fees to safeguard the Authority’s ability to continue as a going concern and to maintain a conservative capital structure. It makes adjustments to these rates in light of changes in economic conditions, operating expense profiles and regulatory environment to maintain sufficient net earnings to meet ongoing debt coverage requirements.

The Authority is not subject to capital requirements imposed by a regulator, but manages its capital to comply with the covenants of the Master Trust Indenture (see note 8a) and to maintain its credit ratings in order to secure access to financing at a reasonable cost.

Back

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.