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Notes to the Financial Statements (continued)
As at 30 June 2015
Air New Zealand Annual Financial Results 2015 21
14. Interest-Bearing Liabilities
Borrowings, bonds and finance lease obligations are initially recognised at fair value, net of transaction costs incurred. They are
subsequently stated at amortised cost using the effective interest rate method, where appropriate. Borrowings, bonds and finance
lease obligations are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for more than 12 months after the balance date.
2015
$M
2014
$M
Current
Secured borrowings
Finance lease liabilities
46
207
22
168
253 190
Non-current
Secured borrowings
Unsecured bonds
Finance lease liabilities
466
150
1,453
191
150
1,202
2,069 1,543
Interest rates basis:
Fixed rate
Floating rate
830
1,492
727
1,006
At amortised cost 2,322 1,733
At fair value 2,314 1,671
The fair value of interest-bearing liabilities for disclosure purposes is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest for similar liabilities at reporting date.
All secured borrowings are secured over aircraft or aircraft related assets and are subject to floating interest rates.
The unsecured, unsubordinated fixed rate bonds have a maturity date of 15 November 2016 and an interest rate of 6.90% payable semi-annually.
Finance lease liabilities
Payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.
The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability.
2015
$M
2014
$M
Repayable as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
238
866
719
191
734
591
Less future finance costs
1,823
(163)
1,516
(146)
Present value of future rentals 1,660 1,370
Repayable as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
207
777
676
168
654
548
1,660 1,370
Finance lease liabilities are secured over aircraft and are subject to both fixed and floating interest rates. Fixed interest rates ranged from 0.7
percent to 3.4 percent (30 June 2014: 0.5 percent to 4.1 percent). Purchase options are available on expiry or, if applicable under the lease
agreement, on early termination of the finance leases.