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AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2012
27
16. PROVISIONS
GROUP
2012
$M
GROUP
2 011
$M
COMPANY
2012
$M
COMPANY
2 011
$M
Provisions
Aircraft lease return costs 150 166 150 165
Restructuring 4 - 4 -
Other 1 1 - -
155 167 154 165
Represented by:
Current 61 79 60 77
Non-current 94 88 94 88
155 167 154 165
Aircraft lease return costs
Balance at the beginning of the year 166 202 165 202
Amount provided 60 60 60 59
Amount utilised (83) (64) (82) (64)
Foreign exchange differences 7 (32) 7 (32)
Balance at the end of the year 150 166 150 165
Represented by:
Current 56 78 56 77
Non-current 94 88 94 88
150 166 150 165
Where a commitment exists to maintain aircraft held under operating lease arrangements, a provision is made during the lease term for
the lease return obligations specified within those lease agreements. The provision is based on the present value of the estimated future
costs of major airframe inspections and engine overhauls by making appropriate charges to the Statement of Financial Performance,
calculated by reference to the number of hours or cycles operated during the year. The provision is expected to be utilised over the
shorter of the period to the next inspection or overhaul or the end of the lease.
GROUP
2012
$M
GROUP
2 011
$M
COMPANY
2012
$M
COMPANY
2 011
$M
Restructuring
Balance at the beginning of the year - - - -
Amount raised 11 3 11 1
Amount utilised (7) (3) (7) (1)
Balance at the end of the year 4 - 4 -
Represented by:
Current 4 - 4 -
4 - 4 -
A restructuring provision is created where a detailed formal plan is developed and a valid expectation exists. Costs relating to ongoing
activities are not provided for.
Other provisions include amounts relating to insurance and warranties. Insurance provisions are expected to be utilised within 12
months based on historical claim experience. Warranty provisions represent an estimate of potential liability for future rectification work
in respect of past engineering services performed. The usual warranty period is less than 12 months from the date of delivery of the
serviced aircraft. There were no additions during the year ended 30 June 2012 (30 June 2011: $1 million).
Notes to the Financial Statements (Continued)
As at 30 June 2012