Air New Zealand 2016 Annual Report Download - page 29

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Notes to the Financial Statements (continued)
For the year to and as at 30 June 2016
27
AIR NEW ZEALAND GROUPAIR NEW ZEALAND GROUP
20. Reserves
The Group’s reserves, together with the equity accounted share of associates’ reserves as at the reporting date are set out below:
AIR NEW
ZEALAND
RESERVES
2016
$M
AIR NEW
ZEALAND
RESERVES
2015
$M
SHARE OF
ASSOCIATES’
RESERVES*
2015
$M
TOTAL
RESERVES
2015
$M
Cash flow hedge reserve
Costs of hedging reserve
(2)
(7)
80
(4)
-
(2)
80
(6)
Hedge reserves
Foreign currency translation reserve
General reserves
(9)
(15)
(120)
76
4
(356)
(2)
(48)
5
74
(44)
(351)
Total Reserves (144) (276) (45) (321)
* The Group ceased equity accounting the investment in Virgin Australia on 30 March 2016. Refer to Note 3 for further details.
The nature and purpose of reserves is set out below:
HEDGE RESERVES
Cash flow hedge reserve
The cash flow hedge reserve contains the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related
to hedged transactions that have not yet occurred.
Costs of hedging reserve
The costs of hedging reserve contains the cumulative net change in the fair value of time value on fuel options of which are excluded from hedge
designations of fuel price risk.
Foreign currency translation reserve
The foreign currency translation reserve contains foreign exchange differences arising on consolidation of foreign operations together with the
translation of foreign currency borrowings designated as a hedge of net investments in those foreign operations.
General reserves
General reserves include the retained deficit net of dividends recognised, remeasurements in respect of the net defined benefit assets and liabilities
and the Group’s share of equity accounted associates’ reserves.
21. Operating Leases
Leases under which a significant proportion of the risks and rewards of ownership are retained by the lessor are classified
as operating leases. Payments made under operating leases (net of any incentives received) are recognised as an expense in the
Statement of Financial Performance on a straight-line basis over the term of the lease.
2016
$M
2015
$M
Rental and lease expenses recognised in earnings
Aircraft
Property
192
52
159
52
244 211
Future operating lease commitments
Aircraft leases payable*
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
184
409
163
189
430
51
756 670
Property leases payable
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
40
112
75
38
113
76
227 227
* Includes lease commitments for five A320/321 NEO aircraft due to be delivered from 2017 to 2018 calendar years.
Subject to negotiation, certain aircraft operating leases give the Group the right to renew the lease.