Finance leases


The total amount of leased assets attributed to the Group’s economic ownership under IAS 17 is EUR 458m (previous year: EUR 547m), of which EUR 300m (previous year: EUR 350m) relates to aircraft (two Airbus A340s, five Airbus A321s, eleven Airbus A320s, four Airbus A319s, two Boeing B767s, three Boeing B737s, three Embraer 145s and one Fokker 70).

As a rule, aircraft finance lease agreements cannot be terminated during a fixed basic lease term of at least four years and they run for a maximum of twelve years.

Once the lease term has expired the lessee is usually entitled to acquire the asset at its residual value. If the lessee does not exercise this option the lessor will sell the aircraft at the best possible market price. If the sales price is lower than the residual value, the difference has to be paid by the lessee. Some lease agreements provide for variable lease payments to the extent that the interest portion is linked to market interest rates, normally the Euribor or Libor rate.

In addition, the Group has a variety of finance leases for buildings, fixtures and for operating and office equipment. For buildings and fixtures the leases run for 15 to 30 years. The lease agreements have lease payments based partly on variable and partly on fixed interest rates, and some have purchase options at the end of the lease term. The agreements cannot be terminated. Options for extending the contracts generally rest with the lessee, if at all.

For technical equipment and operating and office equipment the lease terms are generally from four to five years. The leases normally have fixed lease payments and occasionally also have purchase options at the end of the lease term. The contracts cannot normally be extended by the lessee and cannot be cancelled.

The following lease payments are due for finance leases, whereby the variable lease payments have been extrapolated on the basis of the most recent interest rate:

 

in €m

2012

2013 – 2016

from 2017

Lease payments

79

251

136

Discounted amounts

10

36

36

Present values

69

215

100

Payments from sub-leasing

2

2

0

In the previous year the following figures were given for finance leases:

 

in €m

2011

2012 – 2015

from 2016

Lease payments

92

338

261

Discounted amounts

7

69

129

Present values

85

269

132

Payments from sub-leasing

2

4

0

Two aircraft legally owned by the Group at the end of 2011 have been let to third parties under finance leases until 2016 and 2019 respectively. The leases are to generate the following cash inflows in subsequent periods:

 

in €m

2012

2013 – 2016

from 2017

Lease payments

6

25

10

Discounted amounts

1

4

1

Present values

5

21

9

The previous year the following amounts were given for a finance lease running until 2016:

 

in €m

2011

2012 – 2015

from 2016

Lease payments

2

8

5

Discounted amounts

0

2

2

Present values

2

6

3

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