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Cathay Pacic Airways Limited
ANNUAL REPORT 2014
Stock Code: 293

Table of contents

  • Page 1
    Cathay Pacific Airways Limited A N N U A L R E P O R T 2 0 14 Stock Code: 293

  • Page 2
    ...Letter 2014 in Review Review of Operations Financial Review Directors and Officers Directors' Report 52 53 54 39 50 51 Corporate Governance Report Independent Auditor's Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Company...

  • Page 3
    ... December 2014 had 79 new aircraft due for delivery up to 2024. Hong Kong Dragon Airlines Limited ("Dragonair"), a regional airline registered and based in Hong Kong, is a wholly owned subsidiary of Cathay Pacific operating 41 aircraft on scheduled services to 52 destinations in Mainland China and...

  • Page 4
    ...Cathay Pacific and Dragonair 2014 Available tonne kilometres ("ATK") Available seat kilometres ("ASK") Revenue passengers carried Passenger load factor Passenger yield Cargo and mail carried Cargo and mail load factor Cargo and mail yield Cost per ATK (with fuel) Cost per ATK (without fuel) Aircraft...

  • Page 5
    ... left the fleet by the end of 2016. At 31st December 2014 we had 79 new aircraft on order for delivery up to 2024. A total of nine new aircraft are scheduled for delivery in 2015. We continue to develop our passenger and cargo networks. In 2014, Cathay Pacific introduced passenger services to Doha...

  • Page 6
    ... a number of other routes and will introduce a daily service to Haneda in Tokyo in March 2015. Dragonair will stop operating to Manila in March 2015. Cathay Pacific tagged Mexico City onto its Guadalajara cargo service in March 2014 and increased this service to five flights per week in October 2014...

  • Page 7
    ... Cathay Pacific lounge to open at Hong Kong reopen in June 2015. • In May 2014, we started to offer streamed digital International Airport, is closed for renovation. It will Airbus A330-300 aircraft have new long-haul business class seats, premium economy class seats and longhaul economy class...

  • Page 8
    ...We reorganised our network in the Middle East in 2014. We stopped flights to Abu Dhabi and Jeddah but improved our schedules on other Middle Eastern routes. • We reorganised certain services to Australia. We now operate four-times-weekly direct flights to Adelaide, direct flight to Brisbane. There...

  • Page 9
    ...2014 Hong Kong Call Centre Association Award Ceremony. terminal at Hong Kong International Airport. It made our cargo operations more efficient. It handled 1.45 million tonnes of cargo in 2014. It handles cargo for Cathay Pacific, Dragonair, Air Hong Kong and four other airlines. Fleet development...

  • Page 10
    ... and to Cathay Pacific flights between Hong Kong and India in December 2014. The arrangements will be extended to Cathay Pacific flights between Hong Kong and Boston in May 2015. • Japan Airlines and Cathay Pacific extended their involved in shaping climate change and aviation policy. The aim is...

  • Page 11
    ... organised in 2013 in support of the Hong Kong SAR Government's "Hong Kong: Our Home" campaign. • "I Can Fly" is Cathay Pacific's flagship community programme in Hong Kong. Around 500 young people from underprivileged backgrounds took part in the 2014 programme. The young people, aged from 15...

  • Page 12
    ... regularly review our human resources and remuneration policies in the light of legislation, industry practice, market conditions and the performance of individuals and the Group. • Cathay Pacific was named the most attractive employer in Hong Kong in the 2014 Randstad Award. Dragonair was named...

  • Page 13
    ... 2015 and three aircraft were retired in March 2015. (e) Two aircraft were parked in January 2014. (f) In December 2013, Cathay Pacific agreed with The Boeing Company to purchase 21 new Boeing 777-9X aircraft (for delivery after 2020), three new Boeing 777-300ER aircraft and one new Boeing 747...

  • Page 14
    ...subsidiary, operates the Group's cargo terminal at Hong Kong International Airport. It has the capacity to handle 2.6 million tonnes of cargo annually. • CPSL provided cargo handling services to six airlines (Cathay Pacific, Dragonair, Air Hong Kong and three January 2015. • The terminal handled...

  • Page 15
    ..., a wholly owned subsidiary, provides ramp and passenger handling services in Hong Kong. It provides ground services to 23 airlines, including Cathay Pacific and Dragonair. • In 2014, HAS had 47.0% and 20.0% market shares in Hong Kong International Airport. • In 2014 the number of customers for...

  • Page 16

  • Page 17
    The best experience As the home airline of Hong Kong, Cathay Pacific was proud to put the city on the international stage when it was named World's Best Airline in 2014, for a record fourth time.

  • Page 18
    ... by region for Cathay Pacific and Dragonair passenger services for 2014 were as follows: ASK (million) 2014 2013 Change 2014 Load factor (%) 2013 Change Yield Change India, Middle East, Pakistan and Sri Lanka Southwest Pacific and South Africa Southeast Asia Europe North Asia North America Overall...

  • Page 19
    ... leisure destination for Southwest Pacific and South Africa • The performance of our Australian routes was satisfactory in 2014. Traffic between Mainland China and Australia was stable, despite competition from airlines flying non-stop. • Our business on the Sydney route was helped by the Hong...

  • Page 20
    ...four-times-weekly service to Boston in May 2015 and will increase our San Francisco service to 17 flights per week in June 2015. • The increase in passenger numbers did not match the increase in capacity on North American routes. • Strong competition affected the performance of our Canada routes...

  • Page 21
    Review of Operations Cargo Services Loyalty and Reward Programme 19 In the first half of 2014, the Cathay Pacific Group's cargo business was affected by high fuel prices, fierce competition and continued weakness and over-capacity in the air cargo market. After a prolonged period of weakness, ...

  • Page 22
    ... fuel prices benefited the business, but this was partially offset by fuel hedging losses. We also benefited from operating more fuel-efficient freighter aircraft. • We reduced the number of scheduled cargo flights to Europe from 11 to nine per week because of weak in the market. We concentrated...

  • Page 23
    ... of operation of our cargo terminal at Hong Kong International Airport. It made our cargo operations more efficient. It handled 1.45 million tonnes of cargo in 2014. It handles cargo for Cathay Pacific, Dragonair, Air Hong Kong and four other airlines. Flyer Programme by Business Traveller Asia...

  • Page 24

  • Page 25
    The best team Cathay Pacific staff are trained to the highest standards and always strive to excel at what they do. They take great pride in delivering service that rises above our customers' expectations.

  • Page 26
    ...The cargo business benefited from the improvement in the cargo market from the summer onwards. Overall profits benefited from lower fuel prices in the fourth quarter of 2014, but this was partially offset by fuel hedging losses. Turnover Group 2014 HK$M 2013 HK$M Cathay Pacific and Dragonair 2014 HK...

  • Page 27
    Financial Review 25 Cathay Pacific and Dragonair • Passenger turnover increased by 5.4% to HK$75,734 million. The number of revenue passengers carried kilometres increased by 7.4%. • The passenger load factor increased by 1.1 percentage points to 83.3%. Available seat kilometres increased by ...

  • Page 28
    26 Financial Review Operating expenses Group 2014 HK$M 2013 HK$M Change Cathay Pacific and Dragonair 2014 HK$M 2013 HK$M Change Staff Inflight service and passenger expenses Landing, parking and route expenses Fuel, net of hedging (losses)/gains Aircraft maintenance Aircraft depreciation and ...

  • Page 29
    ... assets. 2,409 Decrease/(increase) of: - Fuel, net of hedging (losses)/gains - Aircraft maintenance - Depreciation, amortisation and operating leases - Staff - Inflight service, landing and parking, commissions, net finance charges and others 2014 airlines' profit before taxation ANNUAL REPORT...

  • Page 30
    ... maximum percentage of projected consumption by year covered by hedging transactions at various settled Brent prices. Intangible 51% Aircraft and related equipment 6% Buildings and other equipment 20% assets 6% assets 17% and others Current Long-term investments Cathay Pacific Air ways...

  • Page 31
    Financial Review 29 Borrowings and capital • Borrowings decreased by 2.9% to HK$65,096 million in 2014 from HK$67,052 million in 2013. • Borrowings are mainly denominated in United States dollars, Hong Kong dollars, Japanese yen and Euros, fixed rates of interest after taking into account ...

  • Page 32
    The best support Behind the scenes, Cathay Pacific is continually working to improve every aspect of its operations, finding better and more efficient ways to add value for customers and stakeholders alike.

  • Page 33

  • Page 34
    ... the Company since November 2011. He is also a Director of Hong Kong Dragon Airlines Limited. He was previously Deputy Finance Director of Swire Pacific Limited. He joined the Swire group in 1995 and has worked with the group in Hong Kong, the United States, Singapore and Australia. Cathay Pacific...

  • Page 35
    ..., Sing Tao News Corporation Limited, Wing Hang Bank, Limited and Zhejiang Expressway Co., Ltd., all being companies listed in Hong Kong. He will retire as an Independent Non-Executive Director of the Company at the annual general meeting to be held on 20th May 2015. WONG, Tung Shun Peter*, aged 63...

  • Page 36
    ... Cathay Pacific Airways Limited (the "Company") is managed and controlled in Hong Kong. As well as operating scheduled airline services, the Company and its subsidiaries (the "Group") are engaged in other related areas including airline catering, aircraft handling, aircraft engineering and cargo...

  • Page 37
    ... between the Group and Hong Kong Aircraft Engineering Company Limited ("HAECO") and its subsidiary, Taikoo (Xiamen) Aircraft Engineering Company Limited ("TAECO"), for the maintenance and overhaul of aircraft and related equipment accounted for approximately 3% of the Group's operating expenses in...

  • Page 38
    ... and its subsidiaries ("Air China group") on the other hand arising from joint venture arrangements for the operation of passenger air transportation, code sharing arrangements, interline arrangements, aircraft leasing, frequent flyer programmes, the provision of airline catering, ground support and...

  • Page 39
    ... 3.10A of the Listing Rules, which requires that an issuer must appoint Independent Non-Executive Directors representing at least one-third of the Board. Article 93 of the Company's Articles of Association provides for all the Directors to retire at the third annual general meeting following their...

  • Page 40
    ... directly or indirectly, with the businesses of the Company as it operates airline services to certain destinations which are also served by the Company. Capacity No. of shares Ian Shiu Personal 1,000 0.00003 Other than as stated above, no Director or chief executive of Cathay Pacific Airways...

  • Page 41
    ... to the Company's businesses ANNUAL REPORT 2014 Corporate Governance Statement The Corporate Governance Code (the "CG Code") as published by The Stock Exchange of Hong Kong Limited sets out the principles of good corporate governance and provides two levels of recommendation: • code provisions...

  • Page 42
    40 Corporate Governance Report • ensuring that appropriate management development and succession plans are in place • setting the Group remuneration policy • approving annual budgets and forecasts • reviewing operational and financial performance • reviewing the effectiveness of internal...

  • Page 43
    ...role of the Board and the matters reserved for its attention • the role and terms of reference of Board Committees • the Group's corporate governance practices and procedures • the powers delegated to management and • the latest financial information. Directors update their skills, knowledge...

  • Page 44
    42 Corporate Governance Report • the raising of new initiatives and ideas • the presentation of papers to support decisions requiring Board approval • an update of legal and compliance matters for Directors' consideration • any declarations of interest. The executive management provides ...

  • Page 45
    ... The Board Safety Review Committee reviews and reports to the Board on safety issues. It met twice during the year and comprises its Chairman (Dr. David King) and all the NonExecutive Directors and Independent Non-Executive Directors of the Company. statements of profit or loss, financial position...

  • Page 46
    ... in kind and the terms on which they participate in any provident fund or other retirement benefit scheme), taking into consideration salaries paid by comparable companies, time commitments and responsibilities and employment conditions elsewhere in the group. Cathay Pacific Air ways Limited

  • Page 47
    ...Executive Officers, as disclosed in note 27 to the financial statements, was comparable with that paid to equivalent executives in peer group companies. No Director takes part in any discussion about his or her own remuneration. The following fee levels have been approved by the Board: 2014 HK$ 2015...

  • Page 48
    ...• the Group's compliance with regulatory and statutory requirements • the Group's internal controls and risk management systems • the Group's risk management processes • the approval of the 2015 annual Internal Audit programme and review of progress on the 2014 programme Cathay Pacific Air...

  • Page 49
    .... In addition to its agreed annual schedule of work, the Department conducts other special reviews as required. The Group Internal Audit Manager has direct access to the Audit Committee. Audit reports are sent to the Chief Operating Officer, the Finance Director, external auditors and the relevant...

  • Page 50
    ... and Investors The Board and senior management recognise their responsibility to represent the interests of all shareholders and to maximise shareholder value. Communication with shareholders and accountability to shareholders is a high priority of the Company. Cathay Pacific Air ways Limited

  • Page 51
    ... Directors to make on-market share buy-backs Other information for shareholders Key shareholder dates for 2015 are set out on page 108 of this report. No amendment has been made to the Company's Articles of Association during the year. financial statements for the year ended 31st December ANNUAL...

  • Page 52
    50 Independent Auditor's Report To the shareholders of Cathay Pacific Airways Limited (Incorporated in Hong Kong with limited liability) We have audited the consolidated financial statements of Cathay Pacific Airways Limited ("the Company") and its subsidiaries (together "the Group") set out on ...

  • Page 53
    ... and operating leases Operating expenses Operating profit Finance charges Finance income Net finance charges Share of profits of associates Profit before taxation Taxation Profit for the year Non-controlling interests Profit attributable to the shareholders of Cathay Pacific Profit for...

  • Page 54
    ...functional currency. The US$ figures are shown only as supplementary information and are translated at HK$7.8. The notes on pages 56 to 97 and the principal accounting policies on pages 98 to 101 form part of these financial statements. John Slosar Director Hong Kong, 18th March 2015 Cathay Pacific...

  • Page 55
    ... US$ figures are shown only as supplementary information and are translated at HK$7.8. The notes on pages 56 to 97 and the principal accounting policies on pages 98 to 101 form part of these financial statements. John Slosar Director Hong Kong, 18th March 2015 Jack So Director ANNUAL REPORT 2014

  • Page 56
    ... and presented in HK$, the functional currency. The US$ figures are shown only as supplementary information and are translated at HK$7.8. The notes on pages 56 to 97 and the principal accounting policies on pages 98 to 101 form part of these financial statements. Cathay Pacific Air ways Limited

  • Page 57
    ... Statement of Changes in Equity for the year ended 31st December 2014 55 Attributable to the shareholders of Cathay Pacific Share capital HK$M Capital Share redemption premium reserve HK$M HK$M Investment Retained revaluation profit reserve HK$M HK$M Cash flow Capital hedge reserve reserve...

  • Page 58
    ... and cargo operations. The non-airline business segment includes mainly catering, ground handling, aircraft ramp handling services and cargo terminal operations. The unallocated results represent the Group's share of profits of associates. The major revenue earning asset is the aircraft fleet which...

  • Page 59
    ...Income 57 2. Segment information (continued) (b) Geographical information 2014 HK$M 2013 HK$M Turnover by origin of sale: North Asia - Hong Kong and Mainland China - Japan, Korea and Taiwan India, Middle East, Pakistan and Sri Lanka Southwest Pacific and South Africa Southeast Asia Europe North...

  • Page 60
    ... is calculated at rates of tax applicable in countries in which the Group is assessable for tax. Tax provisions are reviewed regularly to take into account changes in legislation, practice and the status of negotiations (see note 30(d) to the financial statements). Cathay Pacific Air ways Limited

  • Page 61
    ... to the shareholders of Cathay Pacific Of the profit attributable to the shareholders of Cathay Pacific, a profit of HK$4,586 million (2013: HK$3,719 million) has been dealt with in the financial statements of the Company. 7. Other comprehensive income 2014 HK$M 2013 HK$M Defined benefit plans...

  • Page 62
    60 Notes to the Financial Statements Statement of Profit or Loss and Other Comprehensive Income 8. Earnings per share (basic and diluted) Earnings per share is calculated by dividing the profit attributable to the shareholders of Cathay Pacific of HK$3,150 million (2013: HK$2,620 million) by the ...

  • Page 63
    Notes to the Financial Statements Statement of Financial Position 61 10. Fixed assets Aircraft and related equipment Owned HK$M Leased HK$M Other equipment Owned HK$M Leased HK$M Buildings Under Owned construction HK$M HK$M Total HK$M Group Cost At 1st January 2014 Exchange differences Additions...

  • Page 64
    62 Notes to the Financial Statements Statement of Financial Position 10. Fixed assets (continued) Aircraft and related equipment Owned HK$M Leased HK$M Other equipment Owned HK$M Leased HK$M Buildings Owned HK$M Total HK$M Company Cost At 1st January 2014 Additions Disposals Reclassification to ...

  • Page 65
    ... policies, is provided to the leasing companies or other parties that provide the underlying finance. Further information is provided in note 15 to the financial statements. (e) An impairment loss amounting to HK$599 million was recognised for the year ended 31st December 2014 (2013: HK$210 million...

  • Page 66
    ... related to the relevant segments. Management believes that any reasonably foreseeable change in any of the above key assumptions would not cause the carrying amount of goodwill to exceed the recoverable amount. 12. Investments in subsidiaries Company 2014 HK$M 2013 HK$M Unlisted shares at cost...

  • Page 67
    ... subsidiaries are listed on page 96. 13. Investments in associates Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Hong Kong listed shares at cost (Market value: HK$16,513 million, 2013: HK$15,249 million) Unlisted shares at cost Share of net assets - listed in Hong Kong - unlisted...

  • Page 68
    ... income - profit/(loss) from continuing operations 3,768 121 (68) 53 1,128 (439) 28 (411) Principal associates are listed on page 97. 14. Other long-term receivables and investments Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Equity investments at fair value - listed in Hong Kong...

  • Page 69
    ... and the related funds, as well as related expenditure and income, have been defeased in the financial statements. (b) Obligations under finance leases The Group has commitments under finance lease agreements in respect of aircraft and related equipment expiring during the years 2015 to 2026...

  • Page 70
    ... age, years of service and compensation. The Group has an obligation to provide participating employees with these benefits. The Swire Group Retirement Benefit Scheme ("SGRBS") in Hong Kong, in which the Company, Cathay Pacific Catering Services (H.K.) Limited ("CPCS"), Vogue Laundry Service Limited...

  • Page 71
    ... the Financial Statements Statement of Financial Position 69 17. Retirement benefits (continued) Staff employed by the Company in Hong Kong on expatriate terms before April 1993 were eligible to join another scheme, the Cathay Pacific Airways Limited Retirement Scheme ("CPALRS"). Both members and...

  • Page 72
    ... to the Financial Statements Statement of Financial Position 17. Retirement benefits (continued) Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Movements in present value of funded obligations comprise: At 1st January Remeasurements: - actuarial losses/(gains) arising from changes in...

  • Page 73
    ... assets to pay all employees the benefits relating to employee service in the current and prior periods. Staff employed by the Company in Hong Kong on expatriate terms are eligible to join a defined contribution retirement scheme, the CPA Provident Fund 1993. All staff employed in Hong Kong...

  • Page 74
    ...in associates - cash flow hedges Provision in respect of certain lease arrangements The following amounts, determined after appropriate offsetting, are shown separately on the statement of financial position: Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Net deferred tax asset recognised...

  • Page 75
    ... for hedge accounting amounted to HK$1,315 million and HK$1,315 million respectively (2013: HK$1,329 million and HK$1,329 million). Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Analysis of trade debtors (net of allowance for doubtful debts) by age: Current One to three months overdue...

  • Page 76
    ...as a Level 2 measurement. 21. Liquid funds Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Short-term deposits and bank balances (note 26) Short-term deposits maturing beyond three months when placed Funds with investment managers - debt securities listed outside Hong Kong - bank deposits...

  • Page 77
    ... March 2014, any amount standing to the credit of the share premium account and the capital redemption reserve has become part of the Company's share capital. These changes do not have an impact on the number of shares in issue or the relative entitlement of any of the members. ANNUAL REPORT 2014

  • Page 78
    76 Notes to the Financial Statements Statement of Financial Position 24. Reserves Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Share premium Capital redemption reserve Retained profit Investment revaluation reserve Cash flow hedge reserve Capital reserve and others - - 42,156 1,051 (10...

  • Page 79
    ... million (2013: HK$2,774 million) and share of associate's other negative reserve of HK$733 million (2013: HK$681 million). The cash flow hedge reserve relates to the effective portion of the cumulative net change in fair values of hedging instruments and exchange differences on borrowings and lease...

  • Page 80
    78 Notes to the Financial Statements Statement of Cash Flows 25. Reconciliation of operating profit to cash generated from operations 2014 HK$M 2013 HK$M Operating profit Depreciation of fixed assets Amortisation of intangible assets Provision for impairment of assets held for sale Provision for...

  • Page 81
    ...Directors receive fees as members of the Board and its committees. Executive Directors receive salaries. For Directors employed by the Swire group, the remuneration disclosed represents the amount charged to the Company. Bonus is related to services for 2013 and was paid in 2014. ANNUAL REPORT 2014

  • Page 82
    ...the Financial Statements Directors and Employees 27. Directors' and executive officers' remuneration (continued) (b) Executive officers' remuneration disclosed as recommended by the Listing Rules is as follows: Cash Non-cash Bonus Contributions paid into to retirement retirement Other Housing 2014...

  • Page 83
    ... the Financial Statements Directors and Employees 81 28. Employee information (a) The five highest paid individuals of the Company included four Directors (2013: three) and one executive officer (2013: two), whose emoluments are set out in note 27 above. (b) The table below sets out the number of...

  • Page 84
    ... with Directors and executive officers except for those relating to shareholdings (as disclosed in the Directors' Report and the Corporate Governance Report). Remuneration of Directors and executive officers is disclosed in note 27 to the financial statements. Cathay Pacific Air ways Limited

  • Page 85
    ... 16,420 Operating lease commitments are shown in note 10(b) to the financial statements. (b) Guarantees in respect of lease obligations, bank loans and other liabilities outstanding at the year end: Group 2014 HK$M 2013 HK$M Company 2014 HK$M 2013 HK$M Subsidiaries Associates Related parties Staff...

  • Page 86
    ... provided in the financial statements of the Company before 2014. The Company is a defendant in various putative class action cases filed in the United States, in which the plaintiffs allege the Company and other carriers that provide air cargo services fixed the prices of various air cargo charges...

  • Page 87
    ...31. Financial risk management (continued) At the reporting date there was no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the statement of financial position...

  • Page 88
    ... to hedge future operating revenues is a key component of the financial risk management process, as exchange differences realised on the repayment of financial commitments are effectively matched by the change in value of the foreign currency earnings used to make those repayments. Cathay Pacific...

  • Page 89
    Notes to the Financial Statements Supplementary Information 87 31. Financial risk management (continued) At the reporting date, the exposure to foreign currency risk was as follows: 2014 USD HK$M EUR HK$M TWD HK$M SGD HK$M RMB HK$M JPY HK$M Group Loans due from associates Trade debtors, other ...

  • Page 90
    ... Financial Statements Supplementary Information 31. Financial risk management (continued) 2013 USD HK$M EUR HK$M TWD HK$M SGD HK$M RMB HK$M JPY HK$M Company Loans due from subsidiaries Trade debtors, other receivables and prepayments Liquid funds Long-term loans Obligations under finance leases...

  • Page 91
    ... associates Net amounts due from subsidiaries Liquid funds Long-term loans Obligations under finance leases Interest rate and currency swaps Net exposure Sensitivity analysis for interest rate exposure An increase of 25 basis points in interest rates at the reporting date would have decreased profit...

  • Page 92
    ... to the Financial Statements Supplementary Information 31. Financial risk management (continued) (iii) Fuel price risk Fuel accounted for 39.2% of the Group's total operating expenses (2013: 39.0%). Exposure to fluctuations in the fuel price is managed by the use of fuel derivatives. The profit or...

  • Page 93
    ... are market interest rates, exchange rates and fuel price. Level 3 includes financial instruments with fair values measured using dividend discount model and discounted cash flow valuation techniques in which any significant input is not based on observable market data. 2014 Group Level 1 HK$M Level...

  • Page 94
    ... to the Financial Statements Supplementary Information 31. Financial risk management (continued) 2013 Group Level 1 HK$M Level 2 HK$M Level 3 HK$M Total HK$M Level 1 HK$M Company Level 2 HK$M Level 3 HK$M Total HK$M Recurring fair value measurement Assets Investments at fair value - listed 259...

  • Page 95
    ... to the Financial Statements Supplementary Information 93 31. Financial risk management (continued) The movement during the year in the balance of Level 3 fair value measurements is as follows: Group HK$M Company HK$M Investments at fair value - unlisted At 1st January 2014 Additions Disposals...

  • Page 96
    ... Company Derivative financial assets Related pledged security deposits Obligations under finance leases Derivative financial liabilities 3,186 520 (520) (15,011) (11,825) - (520) 520 - - 3,186 - - (15,011) (11,825) (1,640) - - 1,640 - 1,546 - - (13,371) (11,825) Cathay Pacific Air ways Limited

  • Page 97
    ... year history is included on pages 102 and 103 of the annual report. 33. Impact of further new accounting standards HKICPA has issued new and revised standards which become effective for accounting periods beginning on or after 1st January 2015 and which are not adopted in the financial statements...

  • Page 98
    ... Dragon Airlines Limited Snowdon Limited Troon Limited Vogue Laundry Service Limited Hong Kong Computerised reservation systems and related services Cargo airline Property investment Property investment Property investment Travel reward programme Travel tour operator Financial services Aircraft...

  • Page 99
    ... Limited Cebu Pacific Catering Services Inc. Ground Support Engineering Limited HAECO ITM Limited LSG Lufthansa Service Hong Kong Limited Shanghai International Airport Services Co., Limited People's Republic of China People's Republic of China Philippines Hong Kong Cargo carriage service Airline...

  • Page 100
    ... 87 of that Schedule. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). In addition, the requirements of Part 9 "Accounts and Audit...

  • Page 101
    ...'s statement of financial position, investments in associates are stated at cost less any impairment loss recognised and loans to those companies. Freighter aircraft 4. Foreign currencies Foreign currency transactions entered into during the year are translated into Hong Kong dollars at the market...

  • Page 102
    ... based on the interest rates implicit in the leases. Operating lease payments and income are charged and credited respectively to profit or loss on a straight line basis over the life of the related lease. With respect to operating lease agreements, where the Group is required to return the aircraft...

  • Page 103
    ...unit credit method. Under this method, the cost of providing retirement benefits is charged to the statement of profit or loss and other comprehensive income so as to spread the regular cost over the service lives of employees. The asset or liability recognised on the statement of financial position...

  • Page 104
    ... Profit/(loss) attributable to the shareholders of Cathay Pacific Dividends paid Retained profit for the year Consolidated statement of financial position summary Fixed and intangible assets Long-term receivables and investments Borrowings Liquid funds less bank overdrafts Net borrowings Net current...

  • Page 105
    Statistics 103 2012 2011 2010 2009 2008 2007 2006... (93,125) 5,281 - - (744) 1,708 6,245 (779) 5,466 (169) 5,297 (3,777) 1,520 82,099 23,393 (43,335) 19,597 (23,738) (16,685) (3,650) ...0.70 9.1 12.3 2.1 14.2 0.73 0.29 6.5 8.7 1.2 15.1 0.70 0.36 6.2 8.5 1.9 17.1 0.64 0.26 ANNUAL REPORT 2014

  • Page 106
    ... load factor Passenger load factor Cargo and mail carried Cargo and mail revenue tonne kilometres Cargo and mail load factor Excess baggage carried Kilometres flown Block hours Aircraft departures Length of scheduled routes network Number of destinations at year end Staff number at year end ATK per...

  • Page 107
    Statistics 105 2012 2011 2010 2009 2008 2007 2006 2005 26,250 18,819 129,595 28,961 103,837 76.2 80.1 1,563 8,942 64.2 ...35 29 15 3 24 7 6 6 - - 5 12 5 112 10 6 16 1 3 3 39 27 15 3 22 7 6 5 - - 5 12 - 102 10 6 16 1 3 1 37 26 15 3 22 7 6 1 - - 5 11 - 96 11 6 13 1 3 - 34 ANNUAL REPORT 2014

  • Page 108
    ...0 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Productivity* Cost per ATK (with fuel) ATK per HK$'000 staff cost Aircraft utilisation Share prices High Low Year-end Price ratios (Note) Price/earnings Market capitalisation/ funds attributable to the shareholders of Cathay Pacific...

  • Page 109
    ...number of shares (by days) in issue for the year Profit/(loss) attributable to the shareholders of Cathay Pacific Turnover Net debt/ equity ratio = Net borrowings Funds attributable to the shareholders of Cathay Pacific = Profit/(loss) margin = Revenue passenger kilometres/ Cargo and mail revenue...

  • Page 110
    ... 2014 Annual report available to shareholders Annual General Meeting Six months ending 30th June 2015 Interim results announcement Interim dividend payable 10th April 2015 20th May 2015 Stock codes Hong Kong Stock Exchange 293 ADR CPCAY August 2015 October 2015 Cathay Pacific Air ways Limited

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    DESIGN: FORMAT LIMITED www.format.com.hk Printed in Hong Kong ANNUAL REPORT 2014 109

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