Cathay Pacific 2002 Annual Report Download - page 47

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44 Cathay Pacific Airways Limited Annual Report 2002
10. FIXED ASSETS
(continued)
(a) Finance leased assets
Certain aircraft are subject to leases with purchase options to be exercised by the Group at the end of the
respective leases. The remaining lease terms range from 1 to 15 years. Some of the rent payments are on a
floating basis which are generally linked to market rates of interest. All leases permit subleasing rights subject to
appropriate consent from lessors. Early repayment penalties would be payable on some of the leases should
they be terminated prior to their specified expiry dates.
(b) Leased out assets
As at 31st December 2002, no aircraft (2001: five B747-300s) was leased out to a third party.
(c) Operating leased assets
Certain aircraft, properties and other equipment are under operating leases.
Under the operating lease arrangements for aircraft, the lease rentals are fixed and subleasing is not allowed.
At 31st December 2002, the two B747-400s (2001: two), four A340-300s (2001: four) and two A340-600s
(2001: nil), all with purchase options, delivered and held under operating leases were not capitalised. The estimated
capitalised value of these leases being the present value of the aggregate future lease payments is
HK$2,106 million (2001: HK$1,222 million).
Operating leases for properties and other equipment are normally set with fixed rental payments with options to
renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2002 for
each of the following periods are as follows:
2002 2001
HK$M HK$M HK$M HK$M
Aircraft and related equipment
-
within one year 636 440
-
after one year but within five years 2,052 1,937
-
after five years 41 2,729 206 2,583
Properties and other equipment
-
within one year 289 359
-
after one year but within five years 427 537
-
after five years 232 948 242 1,138
3,677 3,721
(d) Advance payments are made to manufacturers for aircraft and related equipment to be delivered in future
years. Advance payments included in owned aircraft and related equipment amount to HK$1,672 million
(2001: HK$2 million) for the Group and HK$2 million (2001: HK$2 million) for the Company. No depreciation is
provided on these advance payments.
(e) 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.
(f) Properties held at 31st December 2002 include land held under medium-term leases in Hong Kong with a net
book value of HK$1,622 million (2001: HK$1,658 million).
Notes to the Accounts
-
Balance Sheet