Qantas 2001 Annual Report Download - page 39

THE SPIRIT OF AUSTRALIA p37
The net assets of the Qantas Group increased by 15.8 per cent to
$3,315.9 million during the past financial year. The major items are
discussed below.
REVIEW OF ASSETS
•Current receivables decreased by 14.1 per cent due to a
reduction in short-term money market securities and term deposits
in line with cash management requirements. The decrease has
been offset by a growth in trade debtors in line with increased
operational activity.
•Net receivables/payables under hedge/swap contracts increased
by 18.1 per cent to $1,542.2 million primarily due to the
movement in foreign exchange rates. Net receivables/payables
under hedge/swap contracts represents:
– deferred gains/losses on cross-currency swaps used to hedge
long-term foreign currency borrowings;
– deferred gains/losses on forward foreign exchange contracts used
to hedge capital expenditure; and
– net deferred losses associated with hedges of foreign currency
revenue relating to future transportation services designated to
service long-term debt.
•Inventory levels increased by 24.3 per cent due to the growth in
the level of inventory required to support the increased fleet size,
reconfiguration of aircraft and maintenance.
•Property, plant and equipment increased by 3.0 per cent primarily
due to progress payments under the new aircraft fleet, spare parts
purchased and expenditure on property projects, offset by the sale
of the Mascot Head Office land and buildings.
REVIEW OF LIABILITIES
•The growth in accounts payable and total interest-bearing liabilities
reflects the increase in operational activity and the issue of a $200
million medium term note in November 2000. The split between
non-current and current liabilities has changed due to hire
purchase and lease residuals transferring to current liabilities in
accordance with the lease contracts.
•Total provisions decreased by 31.1 per cent due to a reduction
in the dividend provision, as there is no special dividend payment
for 2001.
•A reduction in current tax liabilities is a result of the lower
corporate tax rate, lower taxable profit and the timing of tax
payments.
REVIEW OF EQUITY
•Contributed equity increased by $291 million as a result of the
issue of 97.5 million shares, 90.6 million as part of the Qantas
Dividend Reinvestment Plan and 6.9 million under the Qantas
Profitshare Scheme.
GEARING
Qantas Group gearing (including the notional capitalisation of
non-cancellable leases) on a hedged basis at 30 June 2001 was 53:47
compared to 49:51 at December 2000 and 44:56 at 30 June 2000.
The increase in gearing is principally a result of fleet expansion and
deposits for future aircraft deliveries.
The Qantas Dividend Reinvestment Plan was reinstated prior to
the payment of the special dividend in December 2000. This
reintroduction provided additional equity to fund future capital
expenditure while maintaining gearing at an acceptable level.
Gearing is determined by dividing the book value of the Qantas
Group’s net debt (short and long term plus the present value of
non-cancellable operating leases less related hedge receivables and
cash and cash equivalents) by the same amount plus the book value
of total equity.
Discussion and Analysis of the Statement of FINANCIAL POSITION
AS AT 30 JUNE 2001