Cathay Pacific 2008 Annual Report Download - page 66

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Notes to the Accounts STATEMENT OF FINANCIAL POSITION
11. 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 2008, seventeen Airbus A330-300s (2007: fourteen), four Airbus A340-300s (2007: four), six
Boeing 747-400s (2007: six), four Boeing 777-300ERs (2007: two), five Airbus A320-200s (2007: five), four
Airbus A321-200s (2007: four) and nil Airbus A340-600 (2007: three), 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$9,652 million (2007: HK$7,707 million).
Operating leases for buildings and other equipment are normally set with fixed rental payments with options to
renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2008 for
each of the following periods are as follows:
2008
HK$M
2007
HK$M
Aircraft and related equipment:
– within one year 2,323 2,430
– after one year but within five years 6,093 7,246
– after five years 2,847 3,561
11,263 13,237
Buildings and other equipment:
– within one year 411 364
– after one year but within five years 664 440
– after five years 55 97
1,130 901
12,393 14,138
(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$4,052 million
(2007: HK$3,247 million) for the Group and HK$335 million (2007: HK$123 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 16 to
the accounts.
64 Cathay Pacific Airways Limited Annual Report 2008