Cathay Pacific 2004 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2004 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 77

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77

48 Cathay Pacific Airways Limited 2004 Annual Report
9. FIXED ASSETS
(continued)
(a) Finance leased assets
Certain aircraft are subject to leases with purchase options to be exercised at the end of the respective leases. The remaining
lease terms range from 1 to 13 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) 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
2004, three B747-400s (2003: two), four A340-300s (2003: four) and three A340-600s (2003: three), all with purchase options,
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$1,315 million (2003: HK$1,585 million).
Operating leases for properties and other equipment are normally set with fixed rental payments with options to renew the
leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2004 for each of the
following periods are as follows:
2004 2003
HK$M HK$M
Aircraft and related equipment:
– within one year 1,144 740
– after one year but within five years 1,883 1,460
– after five years 389 –
3,416 2,200
Properties and other equipment:
– within one year 261 255
– after one year but within five years 418 470
– after five years 175 204
854 929
4,270 3,129
(c) 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 amounted to HK$2,698 million (2003: HK$1,813 million)
for the Group and HK$197 million (2003: HK$136 million) for the Company. No depreciation is provided on these advance
payments.
(d) 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.
(e) Properties held at 31st December 2004 included land held under medium-term leases in Hong Kong with a net book value of
HK$1,549 million (2003: HK$1,586 million).
Notes to the Accounts – Balance Sheet