HSBC 2005 Annual Report Download - page 331

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Operating lease commitments
At 31 December 2005, HSBC was obligated under a number of non-cancellable operating leases for properties, plant
and equipment for which the future minimum lease payments extend over a number of years.
2005 2004
Land and
buildings Equipment
Land and
buildings Equipment
US$m US$m US$m US$m
Future minimum lease payments under non-cancellable
operating leases:
– no later than one year .......................................... 712 32 609 29
– later than one year and no later than five years ... 1,730 24 1,430 20
– later than five years ............................................. 1,452 – 1,099 –
3,894 56 3,138 49
At 31 December 2005, future minimum sublease payments of US$26 million (2004: US$1 million) were expected to
be received under the non-cancellable subleases at the balance sheet date.
In 2005, US$1,901 million (2004: US$951 million) was charged to ‘General and administrative expenses’ in respect
of lease and sublease agreements, of which US$1,880 million (2004: US$930 million) related to minimum lease
payments, US$21 million (2004: US$21 million) to contingent rents, and US$nil (2004: US$nil) to sublease
payments.
The contingent rent represents escalation payments made to landlords for operating, tax and other escalation
expenses.
Finance lease receivables
2005 2004
Total future
minimum
payments
Unearned
finance
income
Present
value
Total future
minimum
payments
Unearned
interest
income
Present
value
US$m US$m US$m US$m US$m US$m
Lease receivables:
– no later than one year ..... 2,170 (266) 1,904 2,153 (287) 1,866
– later than one year and no
later than five years ........ 5,908 (1,329) 4,579 5,843 (1,228) 4,615
– later than five years ........ 8,369 (3,109) 5,260 9,580 (2,824) 6,756
16,447 (4,704) 11,743 17,576 (4,339) 13,237
At 31 December 2005, unguaranteed residual values of US$68 million (2004: US$94 million), had been accrued, and
the accumulated allowance for uncollectible minimum lease payments receivable amounted to US$15 million
(2004: US$28 million).
Operating lease receivables
2005 2004
Land and
buildings Equipment
Land and
buildings Equipment
US$m US$m US$m US$m
Future minimum lease payments under
non-cancellable operating leases:
– no later than one year .......................................... 71 397 48 535
– later than one year and no later than five years ... 160 1,136 84 1,150
– later than five years ............................................. 153 456 96 418
384 1,989 228 2,103
In 2005, no material income (2004: US$nil) was received as contingent rents and recognised in ‘Other operating
income’.
HSBC leases a variety of different assets to third parties under operating and finance lease arrangements, including
transport assets (such as rolling stock, aircraft and motor vehicles), property and general plant and machinery.