Cathay Pacific 2007 Annual Report Download - page 63

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Notes to the Accounts
Balance Sheet
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 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) 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 2007, six Boeing 747-400s (2006: four), two Boeing 777-300ERs (2006: nil), four Airbus A340-
300s (2006: four), three Airbus A340-600s (2006: three), fourteen Airbus A330-300s (2006: fourteen), five Airbus
A320-200s (2006: five) and four Airbus A321-200s (2006: four), 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$7,707 million (2006: HK$6,707 million).
Operating leases for buildings and other equipment are normally set with fixed rental payments with options to
renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2007 for
each of the following periods are as follows:
2007
HK$M
2006
HK$M
Aircraft and related equipment:
– within one year 2,430 1,968
– after one year but within five years 7,246 8,206
– after five years 3,561 4,548
13,237 14,722
Buildings and other equipment:
– within one year 364 348
– after one year but within five years 440 478
– after five years 97 122
901 948
14,138 15,670
(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$3,247 million (2006:
HK$2,651 million) for the Group and HK$123 million (2006: HK$424 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 14 to
the accounts.
Cathay Pacific Airways Limited Annual Report 2007 61