Air New Zealand 2012 Annual Report Download - page 49

AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2012
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27. RELATED PARTIES (CONTINUED)
Staff share purchase schemes
The Air New Zealand A and B Staff Share Purchase Schemes were established by the Group in 1998. All full time and regular part-time
employees were invited to participate in the Schemes with a share allotment date, being 12 August 1998. The shares were held by the
Trustees during a three year restrictive period, which expired in September 2001. As at 30 June 2012, the Scheme held 93 unallocated
Ordinary Shares (30 June 2011: 93 shares).
Executive share option plans
Executive share option plans are detailed in Note 22.
Transactions between the Company and its subsidiaries
During the year there have been transactions between the Company and its subsidiaries as follows:
COMPANY
2012
$M
COMPANY
2 011
$M
Operating revenue (excluding dividend revenue) 76 66
Dividend revenue 198 256
Finance costs * (28) (17)
Operating expenditure (132) (290)
Included within Operating expenditure ("Other expenses") are the following amounts:
Reversal of impairment of investment in subsidiaries 129 -
* Finance costs include finance income of $5 million (30 June 2011: $8 million) and finance costs of $33 million (30 June 2011:
$25 million).
The Company has undertaken finance and operating lease arrangements with its wholly owned subsidiary, Air New Zealand Aircraft
Holdings Limited, relating to its aircraft. Lease expense of $237 million was recognised by the Company during the year (30 June 2011:
$264 million).
Related party balances have no fixed settlement dates and are unsecured. Non-current amounts owing to subsidiaries (as shown in
Note 19) reflect deposits held in respect of capital investments. Certain balances are non interest-bearing and the remainder are
subject to interest at current floating rates. For balances outstanding at year end refer to Notes 9 and 19. Provisions for doubtful debts
of $106 million were held by the Company against outstanding balances from subsidiaries (30 June 2011: $106 million).
The Company has provided guarantees of financial indebtedness to Air New Zealand Aircraft Holdings Limited of $1,542 million
(30 June 2011: $1,255 million).
As at 30 June 2012, the Company has guaranteed the obligations of Air New Zealand Aircraft Holdings Limited and New Zealand
International Airlines Limited under aircraft operating lease arrangements amounting to $770 million (30 June 2011: $866 million),
and property lease obligations of subsidiaries of $7 million (30 June 2011: $10 million).
The Company guarantees aircraft end of lease obligations of Air New Zealand Aircraft Holdings Limited and New Zealand International
Airlines Limited.
During the year ended 30 June 2012, the investment in Air New Zealand Aircraft Holdings Limited, was assessed for impairment using
a value in use model. The model resulted in a reversal of impairment losses of $114 million which had been provided for in prior years.
The discount rate applied in the value in use model was 6.3 percent and the growth rate was 2.5 percent as at 30 June 2012.
On 26 February 2012, the Group disposed of a 65% interest in ADP Pty Limited.
The Group has a set-off arrangement on certain Bank of New Zealand balances, allowing the offset of overdraft amounts against
in-fund amounts. Interest is earned (or accrued) by Air New Zealand Limited based on the net position across the Group. This interest
is not allocated to subsidiary companies. The following entities are included in the set-off arrangement:
Air Nelson Limited
Air New Zealand Holidays Limited
Air New Zealand Limited
Eagle Airways Limited
Mount Cook Airlines Limited
Safe Air Limited
Notes to the Financial Statements (Continued)
As at 30 June 2012