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NOTES TO THE FINANCIAL STATEMENTS
31 March 2007
Singapore Airlines 114 Annual Report 2006-07
17 Long-Term Liabilities (in $ million) (continued)
Finance leases
The Company has fi nance leases for two B747-400s, which were subsequently sub-leased to Singapore Airlines Cargo
Pte Ltd (“SIA Cargo”) in 2001-02, as part of Cargo Division’s corporatisation. Both fi nance leases matured in 2007, and all
outstanding liabilities were repaid during the year.
SIA Cargo holds four B747-400 freighters under fi nance leases, which mature between 2015 and 2026, without any
options for renewal. Three leases have options for SIA Cargo to purchase the aircraft at the end of the lease period of
12 years. The other lease has an option for SIA Cargo to purchase the aircraft at the end of the 12th or 15th year of the
lease period. Sub-leasing is allowed under the lease agreements.
SIA Cargo continues to remain the primary obligor under the lease agreements and as such, there are unpaid lease
commitments of $95.2 million (2006: $101.5 million) as at 31 March 2007. Out of this, $54.3 million (2006: $54.8 million)
are covered by funds placed with fi nancial institutions to provide for payments due at time of exercise of purchase
option and $23.5 million (2006: $27.5 million) secured by a letter of credit. These arrangements have not been included
in the fi nancial statements as there are no outstanding liabilities under this arrangement.
The SIAEC Group has a lease agreement for a building for a lease term of 30 years from August 2005. The initial down
payment of 20% for the building of $2.4 million is payable by instalment over a period of 24 months, at an interest rate
of 2% per annum.
Interest rates on the Company’s fi nance lease commitments are charged at a margin above the LIBOR. These ranged
from 4.80% to 6.11% (2005-06: 3.19% to 5.18%) per annum.
Interest rates on SIA Cargo’s fi nance lease commitments are charged at a margin above the LIBOR. These ranged from
4.80% to 6.11% (2005-06: 2.88% to 4.74%) per annum.
Future lease payments under these fi nance leases are as follows:
The Group The Company
31 March 31 March
––––––––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––––––––––––
2007 2006 2007 2006
Minimum Repayment Minimum Repayment Minimum Repayment Minimum Repayment
Payments of Principal Payments of Principal Payments of Principal Payments of Principal
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Not later than one year 93.9 60.8 512.4 464.6 – – 441.7 419.5
Later than one year but
not later than fi ve years 378.3 271.8 417.0 331.3 – – 122.3 122.3
Later than fi ve years 375.8 330.5 304.5 269.0 – – – –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total future lease
payments 848.0 663.1 1,233.9 1,064.9 – – 564.0 541.8
Amounts representing
interest (184.9) – (169.0) – – – (22.2) –
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Principal value of
long-term commitments
under fi nance leases 663.1 663.1 1,064.9 1,064.9 – – 541.8 541.8
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––