Qantas 2000 Annual Report Download - page 46

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44
7. CONTINGENT LIABILITIES (continued)
AIRCRAFT FINANCING
As part of the financing arrangements for the acquisition of aircraft, the Qantas Group has provided certain guarantees
and indemnities to various lenders and equity participants in leveraged lease transactions. Only in exceptional circumstances,
including the insolvency of major international banks, will the Qantas Group be required to make any payments under
these guarantees. The Qantas Group has guaranteed that the lessors will receive all of the funds due to them under the
lease arrangements.
Qantas and certain controlled entities have entered into asset value underwriting arrangements with lenders under certain
aircraft secured financings. These arrangements protect the value of the aircraft security to the lenders to a predetermined level.
This is reflected by the balance of aircraft security deposits held with certain financial institutions and included in current and
non-current receivables totalling $562.6 million (1999: $531.1 million).
The Qantas Group has provided standard tax indemnities to the equity investors in certain leveraged leases. The indemnities
effectively guarantee the after tax rate of return of the investors and the Qantas Group may be subject to additional financing
costs on future lease payments if certain assumptions made at the time of entering the transactions, including assumptions as
to the rate of income tax, subsequently become invalid.
UNREALISED LOSSES – BACK TO BACK HEDGES
Where long-term foreign currency borrowings have been denominated in surplus net revenue currencies, offsetting forward
foreign exchange contracts have been used to match the cash flows arising under the borrowings with the expected revenue
surpluses used to hedge the borrowings. To the extent a gain or loss is incurred, this is deferred until the net revenue is realised.
As at 30 June 2000, total unrealised exchange losses on hedges of net revenue designated to service long-term debt were
$374.7 million compared to $272.2 million as at 30 June 1999.
QANTAS GROUP
2000 1999
cents cents
8. EARNINGS PER SHARE
Earnings per share based on net profit after tax attributable
to members of the Company 42.8 35.4
There is no material difference between basic and diluted earnings per share for the
above years. The calculation of earnings per share is based upon the weighted average
number of shares outstanding during the year.
Number Number
mm
Weighted average number of ordinary shares used in the calculation of
earnings per share 1,209.3 1,189.7
9. EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction or
event of a material and unusual nature that, in the opinion of the Directors, has significantly affected, or may significantly affect,
the operations of the Qantas Group, the results of those operations, or the state of affairs of the Qantas Group, in this financial
year or in future financial years.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2000