Cathay Pacific 2006 Annual Report Download - page 66

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Cathay Pacific Airways Limited Annual Report 2006
64
8. 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 12 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, buildings 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 2006, four Boeing 747-400s (2005: three), four Airbus A340-300s (2005: four), three Airbus
A340-600s (2005: three), fourteen Airbus A330-300s (2005: three), five Airbus A320-200s (2005: nil) and four
Airbus A321-200s (2005: nil), most 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$6,707 million (2005: HK$2,347 million).
Operating leases for buildings and other equipment are normally set with fixed rental payments with options
to renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2006 for
each of the following periods are as follows:
2006
HK$M
2005
HK$M
Aircraft and related equipment:
– within one year 1,968 941
– after one year but within five years 8,206 3,880
– after five years 4,548 4,706
14,722 9,527
Buildings and other equipment:
– within one year 348 232
– after one year but within five years 478 339
– after five years 122 129
948 700
15,670 10,227
(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$2,651 million
(2005: HK$2,036 million) for the Group and HK$424 million (2005: HK$222 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. Further information is provided under
note 13 to the accounts.
Notes to the Accounts Balance Sheet