Cathay Pacific 2009 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2009 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 108

  • 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
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

10. 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 14 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 2009, fifteen Airbus A330-300s (2008: seventeen), four Airbus A340-300s (2008: four), six
Boeing 747-400s (2008: six), one Boeing 747-400BCF (2008: nil), eight Boeing 777-300ERs (2008: four), four
Airbus A320-200s (2008: five) and four Airbus A321-200s (2008: four) held under operating leases, most with
purchase options, were not capitalised. The estimated capitalised value of these leases being the present value
of the aggregate future lease payments is HK$11,687 million (2008: HK$9,652 million).
Operating leases for buildings and other equipment are normally set with fixed rental payments with options to
renew the leases upon expiry at new terms.
The future minimum lease payments payable under operating leases committed as at 31st December 2009 for
each of the following periods are as follows:
2009
HK$M
2008
HK$M
Aircraft and related equipment:
– within one year 2,707 2,323
– after one year but within two years 2,420 2,136
– after two years but within five years 5,470 3,957
– after five years 7,227 2,847
17,824 11,263
Buildings and other equipment:
– within one year 552 411
– after one year but within two years 384 295
– after two years but within five years 559 369
– after five years 35 55
1,530 1,130
19,354 12,393
(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$2,810 million (2008:
HK$4,052 million) for the Group and HK$292 million (2008: HK$335 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 15 to
the accounts.
(e) Parked aircraft with no existing plan for reactivation are recognised at the lower of their carrying value and fair
value less costs to sell. An impairment loss amounting to HK$219 million was recognised for these aircraft for
the year ended 31st December 2009.
Notes to the Accounts STATEMENT OF FINANCIAL POSITION
66