Telstra 2013 Annual Report Download - page 152

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NOTES TO THE
FINANCIAL STATEMENTS
(CONTINUED)
150 Telstra Annual Report 2013 Telstra Corporation Limited and controlled entities
Description of our finance leases
We have finance leases for the following types of assets:
• property lease in our controlled entity, Telstra Europe Limited;
and
• computer mainframes, computer processing equipment and
other related equipment.
The weighted average lease term is:
• 25 years for the property lease with a remaining average life of
24 years; and
• 5 years for computer mainframes and associated equipment.
Interest rates for our finance leases are:
• property lease interest rate of 9.5 per cent; and
• computer mainframes, computer processing equipment and
associated equipment weighted average interest rate of 7.6 per
cent.
We sublease computer mainframes, computer processing
equipment and other related equipment as part of the solutions
management and outsourcing services that we provide to our
customers. Refer to note 10 for further details regarding these
finance subleases.
During financial year 2013, we acquired the head leases associated
with a property in Telstra Europe Limited and extinguished these
finance leases. This resulted in a net gain of $8 million being
recognised in the income statement. We then sold the property and
entered into a lease back transaction, whereby a finance lease
asset and finance lease liability of $52 million was recognised. The
lease term is 25 years, with two 10 year options to extend. There is
no purchase option. Rent is based on market prices, reviewed on
an annual basis and subject to a cap and collar of 5 per cent and 2
per cent respectively.
Information regarding our share of our jointly controlled and
associated entities’ commitments is included in note 26.
22. EXPENDITURE COMMITMENTS (CONTINUED)
Telstra Group
As at 30 June
2013 2012
Note $m $m
Finance lease commitments
Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 56
Within 1 to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 99
After 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 31
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392 186
Future finance charges on finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (112) (47)
Present value of net future minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 139
The present value of finance lease liabilities is as follows
Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 66 45
Within 1 to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 79
After 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 15
Total finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 280 139