Cathay Pacific 2011 Annual Report Download - page 67

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Notes to the Accounts STATEMENT OF FINANCIAL POSITION
12. Fixed assets (continued)
(b) Operating leased assets
Certain aircraft, buildings and other equipment are under operating leases.
Under the operating lease arrangements for aircraft, the lease rentals are fixed and floating and subleasing is
not allowed. At 31st December 2011, nineteen Airbus A330-300s (2010: fourteen), two Airbus A340-300s
(2010: four), five Boeing 747-400s (2010: five), one Boeing 747-400BCF (2010: one), eleven Boeing 777-300ERs
(2010: nine), six Airbus A320-200s (2010: six) and four Airbus A321-200s (2010: four) held under operating
leases, most with purchase options, were not capitalised. The estimated capitalised value of these leases being
the present value of the aggregate future lease payments is HK$13,925 million (2010: HK$12,572 million).
Operating leases for buildings and other equipment are normally set with fixed rental payments with options to
renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2011 for
each of the following periods are as follows:
2011
HK$M
2010
HK$M
Aircraft and related equipment:
– within one year 2,640 2,686
– after one year but within two years 2,228 2,328
– after two years but within five years 6,042 5,925
– after five years 7,351 8,358
18,261 19,297
Buildings and other equipment:
– within one year 611 498
– after one year but within two years 488 315
– after two years but within five years 365 383
– after five years 217 66
1,681 1,262
19,942 20,559
(c) Advance payments are made to manufacturers for aircraft and related equipment to be delivered in future years.
As at the year end, advance payments included in owned aircraft and related equipment amounted to HK$4,301
million (2010: HK$4,849 million) for the Group and HK$271 million (2010: HK$359 million) for the Company. No
depreciation is provided on these advance payments.
(d) Security, including charges over the assets concerned and relevant insurance policies, is provided to the leasing
companies or other parties that provide the underlying finance. Further information is provided under note 17 to
the accounts.
(e) Impairment in value of aircraft is considered by writing down the carrying value to estimated recoverable
amount which is the higher of the value in use and the fair value less cost to sell. An impairment loss amounting
to HK$250 million was recognised for the year ended 31st December 2011 (2010: net impairment loss of
HK$98 million written back).
Cathay Pacific Airways Limited Annual Report 2011 65