Qantas 2015 Annual Report Download - page 79

NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2015
78
QANTAS ANNUAL REPORT 2015
29. COMMITMENTS CONTINUED
B) OPERATING LEASE COMMITMENTS Qantas Group
2015
$M
2014
$M
AS LESSEE
Non-cancellable operating lease commitments not provided for in the
Consolidated Financial Statements
Aircraft and engines – payable:
No later than one year 469 456
Later than one year but not later than five years 802 930
Later than five years 88 140
1,359 1,526
Non-aircraft – payable:
No later than one year 175 170
Later than one year but not later than five years 521 505
Later than five years but not later than 10 years 332 289
Later than 10 years 398 399
Less: provision for potential under-recovery of rentals on unused premises available for sub-lease
(included in onerous contract provision) (3) (4)
1,423 1,359
2,782 2,885
(C) CAPITAL EXPENDITURE COMMITMENTS
The Group’s capital expenditure commitments as at 30 June 2015 are $10,090 million (2014: $8,632 million). The Group has certain
rights within its aircraft purchase contracts which can reduce or defer the above capital expenditure.
The Group’s capital expenditure commitments are predominately denominated in US dollars. Disclosures outlined above are
translated to Australian dollar presentational currency at the 30 June 2015 closing exchange rate of $0.77 (30 June 2014: $0.94).
30. CONTINGENT LIABILITIES
Details of contingent liabilities are set out below. The Directors are of the opinion that provisions are not required with respect to
these matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of
reliable measurement.
(A) GUARANTEES
Qantas has entered into guarantees in the normal course of business to secure a self-insurance licence under the Safety,
Rehabilitation and Compensation Act 1988, New South Wales Workers Compensation Act, the Victorian Accident Compensation Act
and the Queensland Workers’ Compensation Act and Rehabilitation Act, to support non-aircraft operating lease commitments and
other arrangements entered into with third parties. Due to specific self-insurance provisions raised, the Directors are of the opinion
that the probability of having to make a payment under these guarantees is remote.
(B) 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. In certain circumstances, including the
insolvency of major international banks and other counterparties that have a minimum credit rating of A-/A3, the Qantas Group
maybe required to make payment under these guarantees.
(C) LITIGATION
i. Freight and Passenger Third Party Class Actions
Qantas is a party to a number of third party class actions relating to its freight and passenger divisions. Qantas continues to have a
number of defences to these class actions. Qantas expects the outcomes of these class actions will be known over the course of the
next few years.
ii. Other Claims and Litigation
From time to time, Qantas is subject to claims and litigation during the normal course of business. The Directors have given
consideration to such matters, which are or may be subject to litigation at year end and, subject to specific provisions raised, are of
theopinion that no material contingent liability exists.