HSBC 2013 Annual Report Download - page 117

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115
30 Lease commitments
Operating lease commitments
At 31 December 2013, the bank was obligated under a number of non-cancellable operating leases for land and buildings
for which the future minimum lease payments extend over a number of years, with an option to renew after that period.
Base rents are increased as according to the terms stated in the lease.
Land and buildings
2013
$m
2012
$m
Future minimum lease payments under non-cancellable operating leases expiring
No later than one year .............................................................................................. 50 53
Later than one year and no later than five years ...................................................... 143 153
Later than five years ................................................................................................. 71 72
264 278
In 2013, $52m (2012: $50m) was charged to ‘General and administrative expenses’ in respect of lease and sublease
agreements, all of which related to minimum lease payments.
Finance lease receivables
The bank leases a variety of assets to third parties under finance leases, including transport assets (such as aircraft),
property and general plant and machinery. At the end of the lease terms, assets may be sold to third parties or leased for
further terms. Lessees may participate in any sales proceeds achieved. Lease rentals arising during the lease terms will
either be fixed in quantum or be varied to reflect changes in, for example, tax or interest rates. Rentals are calculated to
recover the cost of assets less their residual value, and earn finance income.
2013 2012
Total future
minimum
payment
$m
Unearned
finance
income
$m
Present
value
$m
Total future
minimum
payment
$m
Unearned
finance
income
$m
Present
value
$m
Lease receivables:
No later than
one year ............. 709 (58) 651 674 (63) 611
Later than one year
and no later than
five years ............. 1,383 (97) 1,286 1,317 (98) 1,219
Later than five years .. 71 (3) 68 56 (2) 54
2,163 (158) 2,005 2,047 (163) 1,884
At 31 December 2013, unguaranteed residual values of $11m (2012: $11m) had been accrued, and the accumulated
allowance for uncollectible minimum lease payments is included in loan loss allowances.
During the year, no contingent rents were received (2012: $nil) and recognized in the income statement.