Telstra 2008 Annual Report Download - page 196

Telstra Corporation Limited and controlled entities
193
Notes to the Financial Statements (continued)
Description of our finance leases
We have finance leases for the following types of assets:
• property leases in our controlled entity, Telstra Europe Limited;
and
• computer mainframes, computer processing equipment and other
related equipment.
The average lease term is:
• 24 years for the property leases with a remaining weighted
average life of 16 years; and
• 4 years for computer mainframes and associated equipment.
Interest rates for our finance leases are:
• property leases interest rate of 11.25%; and
• computer mainframes, computer processing equipment and
associated equipment weighted average interest rate of 7.9%.
In addition to the above finance lease commitments, we previously
entered into US finance leases for communications exchange
equipment with various entities denominated in US dollars. We have
prepaid all lease rentals due under the terms of these leases and have
no additional payment obligations.
These entities lease the communications equipment from the
ultimate lessor and then sublease the equipment to us. We have
guaranteed that the lease payments will be paid by these entities to
the ultimate lessor as scheduled over the lease terms (refer to note 23
for further information).
We hold an early buyout option that we could exercise in fiscal 2011
and fiscal 2013, otherwise the relevant lease period ends during fiscal
2015 and fiscal 2016. Refer to note 13 for further details on
communication assets and equipment that are held under finance
lease.
22. Expenditure commitments (continued)
Telstra Group Telstra Entity
As at 30 June As at 30 June
2008 2007 2008 2007
Note $m $m $m $m
(c) Finance lease commitments
Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 44 37 40
Within 1 to 5 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 76 53 58
After 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 47 --
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 167 90 98
Future finance charges on finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38) (49) (9) (10)
Present value of net future minimum lease payments . . . . . . . . . . . . . . . . . . . . 107 118 81 88
Included in the financial statements as:
Current borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 34 35 33 34
Non current borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 73 83 48 54
Total finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 107 118 81 88