Barclays 2006 Annual Report Download - page 218

Notes to the accounts
For the year ended 31st December 2006
Barclays PLC
Annual Report 2006
214
41 Leasing
The Group is both lessor and lessee under finance and operating leases, providing asset financing for its customers and leasing assets for its own use.
In addition, assets leased by the Group may be sublet to other parties. An analysis of the impact of these transactions on the Group balance sheet and
income statement is as follows
(a) As Lessor
Finance lease receivables
The Group specialises in asset-based lending and works with a broad range of international technology, industrial equipment and commercial
companies and provides customised finance programmes to assist manufacturers, dealers and distributors of assets.
Finance lease receivables are included within loans and advances to customers (see Note 16).
The Group’s net investment in finance lease receivables was as follows:
2006 2005
Gross Present value of Gross Present value of
investment in Future minimum lease Unguaranteed investment in Future minimum lease Unguaranteed
finance lease finance payments residual finance lease finance payments residual
receivables income receivable values receivables income receivable values
£m £m £m £m £m £m £m £m
Not more than one year 3,650 (734) 2,916 166 2,038 (514) 1,524 61
Over one year but not more
than five years 5,824 (1,490) 4,334 334 5,345 (1,222) 4,123 113
More than five years 3,790 (898) 2,892 15 5,252 (1,811) 3,441 31
Total 13,264 (3,122) 10,142 515 12,635 (3,547) 9,088 205
The allowance for uncollectable finance lease receivables included in the allowance for impairment amounted to £22m at 31st December 2006
(2005: £11m).
Operating lease receivables
The Group acts as lessor, whereby items of plant and equipment are purchased and then leased to third parties under arrangements qualifying as
operating leases. The items purchased to satisfy these leases are treated as plant and equipment in the Group’s financial statements and are
generally disposed of at the end of the lease term (see Note 25).
The future minimum lease payments expected to be received under non-cancellable operating leases at 31st December 2006 were as follows:
2006 2005
Plant and Plant and
equipment equipment
£m £m
Not more than one year 18 22
More than one year but not more than two years 517
More than two years but not more than five years 914
More than five years 710
Total 39 63
(b) As Lessee
Finance lease commitments
The Group leases items of property, plant and equipment on terms that meet the definition of finance leases. Finance lease commitments are
included within other liabilities (see Note 30).
Obligations under finance leases were as follows:
2006 2005
Total future Total future
minimum minimum
payments payments
£m £m
Not more than one year 11 99
Over one year but not more than two years 25 71
Over two years but not more than five years 55 109
More than five years 55 97
Less: future finance charges (54) (87)
Net obligations under finance leases 92 289