Air New Zealand 2013 Annual Report Download - page 29

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Air New Zealand Annual Financial Results  27
. PROVISIONS
GROUP

M
GROUP

M
COMPANY

M
COMPANY

M
Provisions
Aircra lease return costs 154 150 154 150
Restructuring 4 4 1 4
Other
2 1 - -
160 155 155 154
Represented by:
Current 15 61 11 60
Non-current
145 94 144 94
160 155 155 154
Aircra lease return costs
Balance at the beginning of the year 150 166 150 165
Amount provided 61 60 61 60
Amount utilised
(58) (83) (58) (82)
Foreign exchange differences 1 7 1 7
Balance at the end of the year
154 150 154 150
Represented by:
Current
10 56 10 56
Non-current 144 94 144 94
154 150 154 150
Where a commitment exists to maintain aircra 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

M
GROUP

M
COMPANY

M
COMPANY

M
Restructuring
Balance at the beginning of the year
4 - 4 -
Amount provided
7 11 3 11
Amount utilised
(7) (7) (6) (7)
Balance at the end of the year
4 4 1 4
Represented by:
Current
4 4 1 4
4 4 1 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. Termination costs for the year ended 30 June 2013 were $7 million for the Group and $3 million for the
Company (30 June 2012: $11 million for the Group and Company).
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. There was $1 million of additions during the year ended 30 June 2013 (30 June 2012: Nil).
Warranty provisions of $1 million are classified as non-current (30 June 2012: Nil).
Notes to the Financial Statements (Continued)
As at 30 June 2013