NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

  • I ACCOUNTING POLICIES

    • STATEMENT OF COMPLIANCE

      The unaudited interim consolidated financial statements for the six months ended 30 June 2019 were prepared in accordance with International Accounting Standard 34 (IAS 34) Interim Financial Reporting. They do not contain all the information included in the consolidated financial statements for the year ended 31 December 2018 and should therefore be read in conjunction with the latter.

    • Changes in accounting policies

      The company adopted the following new and amended International Financial Reporting Standards which are mandatory for the first time for financial year 2019 beginning on 1 January:

      • IFRS 16 Leases
      • IFRIC 23 Uncertainty over Income Tax Treatments
      • Amendments to IAS 19: Plan Amendment, Curtailment or Settlement
      • Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures
      • Amendments to IFRS 9: Prepayment Features with Negative Compensation
      • Annual Improvements to IFRSs (2015–2017 Cycle)

      Except as outlined in the following, the application of the new and amended Standards does not have a significant impact on these interim consolidated financial statements. In all other respects, these interim consolidated financial statements were prepared in accordance with the accounting policies described in the consolidated financial statements for the year ended 31 December 2018.

      IFRS 16 LEASES

      This Standard replaces IAS 17 and sets out the principles for the recognition, measurement, presentation and disclosure of leases. Most importantly, IFRS 16 introduces a single lessee accounting model that requires the lessee to recognise in the balance sheet all assets and liabilities for almost all leases.

      Carrying amounts and lease liabilities from leases that were classified as finance leases under IAS 17 were not changed. The IFRS 16 requirements were applied to these contracts at 1 January 2019. In addition, assets classified as finance leases are now described as “Right-of-use assets” in the statement of changes in property, plant and equipment (previously “Leased assets”).

      Flughafen Zürich AG applied the modified retrospective approach to transition to IFRS 16 as of 1 January 2019 and the new principles in IFRS 16 had no impact on property, plant and equipment, financial liabilities or equity as at 1 January 2019.

      Lease accounting policy

      At inception of a contract, Flughafen Zürich AG assesses whether the contract is, or contains, a lease. In making this assessment, which requires a certain amount of judgement, it examines whether the contract relates to a specified asset, whether the company obtains substantially all of the economic benefits from use of the asset and whether the company has the right to direct the use of the leased asset.

      Flughafen Zürich AG recognises the right-of-use asset and the lease liability at the commencement date of the lease. The initial measurement of the right-of-use asset is based on the present value of the lease payments, plus any initial direct costs and costs for the obligation to dismantle and remove the asset and restore the site, less any incentives received. The right-of-use asset is depreciated over the shorter of the lease term and the useful life of the underlying asset. The right-of-use asset is tested for impairment if there are indicators of impairment.

      If the lease contains an extension or purchase option that the company believes it is reasonably certain to exercise, the costs related to the option are included in the lease payments. The right-of-use asset is recognised as property, plant and equipment and the lease liability as a current or non-current financial liability.

      Flughafen Zürich AG has decided not to recognise the right-of-use asset and the lease liability if the lease term is twelve months or less or if the lease relates to IT equipment of low value (less than CHF 5,000). Payments for such leases are recognised on a straight-line basis over the term of the contract.

    • Changes in the consolidated group

      On 15 March 2019, in a public tender conducted by the Brazilian government, Flughafen Zürich AG was awarded concessions for the operation and expansion of Vitória and Macaé airports in the southeast of Brazil. The wholly-owned subsidiary Aeroportos do Sudeste do Brasil S.A. based in Vitória (Brazil) was established for this purpose (see note 15.1, Concessions for the operation of foreign airports).

    • Seasonal factors

      Due to the nature of the civil aviation sector and based on statistics, traffic volumes (passenger volumes and number of flights) are usually higher in the second half of the year than in the first half.

  • II REPORTING OF NOISE-RELATED COSTS IN THE FINANCIAL STATEMENTS

    • CURRENT DEVELOPMENTS RELATING TO THE REPORTING OF NOISE-RELATED COSTS IN THE FINANCIAL STATEMENTS

      PROVISION FOR FORMAL EXPROPRIATIONS

      In the previous year, the Swiss Federal Supreme Court handed down two rulings in test cases regarding cooperative ownership. These rulings enabled Flughafen Zürich AG to undertake a reappraisal of the outstanding cost of compensation for formal expropriations. Based on the recalculation, the total cost expected in relation to formal expropriations decreased from CHF 385.0 million to CHF 350.0 million. This enabled the provision for formal expropriations to be reduced by CHF 34.5 million (nominal amount: CHF 35.0 million) in the previous year. At the same time, the intangible asset from the right of formal expropriation was reduced by the same amount.

      As no further information that would have changed last yearʼs appraisal emerged in the first half of 2019, the total cost estimated in relation to formal expropriations remained unchanged at CHF 350.0 million, of which CHF 77.8 million had already been paid out at 30 June 2019 (see note 10, Provision for formal expropriations plus sound insulation and resident protection).

      PROVISION FOR SOUND INSULATION AND RESIDENT PROTECTION

      Flughafen Zürich AG is required to implement sound insulation measures in the area where it claims exemptions from noise limits (emission limit). In this context, the Federal Office of Civil Aviation (FOCA) initiated a night-time noise abatement procedure. The area with exemptions under the Sectoral Aviation Infrastructure Plan adopted by the Federal Council on 23 August 2017 was to be extended. In the previous year, a provision for further costs of CHF 60.0 million, with a present value of CHF 57.6 million, was recognised in this context in addition to the cost of CHF 340.0 million previously estimated for sound insulation and resident protection.

      As no further information that would have changed last yearʼs appraisal emerged in the first half of 2019, the total cost estimated in relation to sound insulation and resident protection measures remained unchanged at CHF 400.0 million, of which CHF 251.9 million had already been paid out at 30 June 2019 (see note 10, Provision for formal expropriations plus sound insulation and resident protection).

  • III NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

    • 1 Segment reporting

      (CHF million)

       

      Regulated business

       

      Noise

       

      Non-regulated business

       

      Eliminations

       

      Consolidated

      First half 2019

       

       

       

       

       

      Revenue from contracts with customers (IFRS 15)

       

      309.8

       

      5.5

       

      144.7

       

      0.0

       

      460.0

      Other revenue (non IFRS 15)

       

      0.1

       

      0.0

       

      127.9

       

      0.0

       

      128.0

      Revenue from third parties

       

      309.9

       

      5.5

       

      272.6

       

      0.0

       

      588.0

      Inter-segment revenue

       

      9.9

       

      0.0

       

      44.7

       

      –54.6

       

      0.0

      Total revenue

       

      319.8

       

      5.5

       

      317.3

       

      –54.6

       

      588.0

      Operating expenses

       

      –176.8

       

      –1.6

       

      –160.5

       

      54.6

       

      –284.3

      Segment result (EBITDA)

       

      143.0

       

      3.9

       

      156.8

       

      0.0

       

      303.7

      Depreciation and amortisation

       

      –68.4

       

      –2.1

       

      –45.5

       

      0.0

       

      –116.0

      Segment result (EBIT)

       

      74.6

       

      1.8

       

      111.3

       

      0.0

       

      187.7

      Finance result

       

       

       

       

       

       

       

       

       

      –3.7

      Share of profit or loss of associates

       

       

       

       

       

       

       

       

       

      –1.8

      Income tax expense

       

       

       

       

       

       

       

       

       

      –38.8

      Profit

       

       

       

       

       

       

       

       

       

      143.4

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 30 June 2019

       

      1,809.6

       

      105.7

       

      1,555.5

       

       

       

      3,470.8

      Non-interest-bearing non-current liabilities 2)

       

       

       

       

       

       

       

       

       

      618.0

      Non-interest-bearing current liabilities 3)

       

       

       

       

       

       

       

       

       

      213.8

      Total assets as at 30 June 2019

       

       

       

       

       

       

       

       

       

      4,302.6

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %) 1)

       

      7.6

       

      3.4

       

      11.6

       

       

       

      9.2

      (CHF million)

       

      Aviation

       

      PRM

       

      User fees

       

      Air security 4)

       

      Access fees 4)

       

      Eliminations

       

      Total regulated business

      First half 2019

       

       

       

       

       

       

       

      Revenue from contracts with customers (IFRS 15)

       

      181.9

       

      7.4

       

      35.7

       

      84.1

       

      0.7

       

      0.0

       

      309.8

      Other revenue (non IFRS 15)

       

      0.1

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.1

      Revenue from third parties

       

      182.0

       

      7.4

       

      35.7

       

      84.1

       

      0.7

       

      0.0

       

      309.9

      Inter-segment revenue

       

      9.4

       

      0.0

       

      2.2

       

      5.7

       

      1.0

       

      –8.4

       

      9.9

      Total revenue

       

      191.4

       

      7.4

       

      37.9

       

      89.8

       

      1.7

       

      –8.4

       

      319.8

      Operating expenses

       

      –87.2

       

      –6.5

       

      –15.9

       

      –44.3

       

      –31.3

       

      8.4

       

      –176.8

      EBITDA

       

      104.2

       

      0.9

       

      22.0

       

      45.5

       

      –29.6

       

      0.0

       

      143.0

      Depreciation and amortisation

       

      –51.0

       

      –0.1

       

      –12.5

       

      –3.1

       

      –1.7

       

      0.0

       

      –68.4

      EBIT

       

      53.2

       

      0.8

       

      9.5

       

      42.4

       

      –31.3

       

      0.0

       

      74.6

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 30 June 2019

       

      1,361.6

       

      4.8

       

      320.4

       

      87.7

       

      35.1

       

       

       

      1,809.6

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %) 1)

       

      7.3

       

      33.1

       

      4.6

       

      76.0

       

      –139.5

       

       

       

      7.6

      1) Based on the result of the 12-month period preceding the reporting date.

      2) Non-interest-bearing non-current liabilities include non-current provisions for formal expropriations plus sound insulation and resident protection, deferred tax liabilities, employee benefit obligations and the non-interest-bearing portion of non-current financial liabilities.

      3) Non-interest-bearing current liabilities include current provisions for formal expropriations and sound insulation and resident protection, current tax liabilities, trade payables and other current liabilities plus accruals and deferrals, and the non-interest-bearing portion of current financial liabilities.

      4) In accordance with the Swiss Ordinance on Airport Charges, the shortfall in the “Access fees” segment can be charged to the “Air security” segment. Taking the shortfall into account, the ROIC of the “Air security” segment amounts to 17.1%.

      The reportable segments for the prior-year period are as follows:

      (CHF million)

       

      Regulated business

       

      Noise

       

      Non-regulated business

       

      Eliminations

       

      Consolidated

      First half 2018

       

       

       

       

       

      Revenue from contracts with customers (IFRS 15)

       

      303.3

       

      5.6

       

      106.7

       

      0.0

       

      415.6

      Other revenue (non IFRS 15)

       

      0.1

       

      0.0

       

      124.5

       

      0.0

       

      124.6

      Revenue from third parties

       

      303.4

       

      5.6

       

      231.2

       

      0.0

       

      540.2

      Inter-segment revenue

       

      9.4

       

      0.0

       

      43.8

       

      –53.2

       

      0.0

      Total revenue

       

      312.8

       

      5.6

       

      275.0

       

      –53.2

       

      540.2

      Operating expenses

       

      –170.6

       

      –59.1

       

      –124.1

       

      53.2

       

      –300.6

      Segment result (EBITDA)

       

      142.2

       

      –53.5

       

      150.9

       

      0.0

       

      239.6

      Depreciation and amortisation

       

      –67.8

       

      –2.7

       

      –53.3

       

      0.0

       

      –123.8

      Segment result (EBIT)

       

      74.4

       

      –56.2

       

      97.6

       

      0.0

       

      115.8

      Finance result

       

       

       

       

       

       

       

       

       

      –9.4

      Share of profit or loss of associates

       

       

       

       

       

       

       

       

       

      –1.8

      Income tax expense

       

       

       

       

       

       

       

       

       

      –20.1

      Profit

       

       

       

       

       

       

       

       

       

      84.5

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 30 June 2018

       

      1,883.1

       

      72.7

       

      1,429.4

       

       

       

      3,385.2

      Non-interest-bearing non-current liabilities 2)

       

       

       

       

       

       

       

       

       

      585.3

      Non-interest-bearing current liabilities 3)

       

       

       

       

       

       

       

       

       

      212.7

      Total assets as at 30 June 2018

       

       

       

       

       

       

       

       

       

      4,183.2

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %) 1)

       

      6.7

       

      –39.6

       

      11.8

       

       

       

      7.2

      (CHF million)

       

      Aviation

       

      PRM

       

      User fees

       

      Air security 4)

       

      Access fees 4)

       

      Eliminations

       

      Total regulated business

      First half 2018

       

       

       

       

       

       

       

      Revenue from contracts with customers (IFRS 15)

       

      178.7

       

      7.2

       

      34.0

       

      82.8

       

      0.6

       

      0.0

       

      303.3

      Other revenue (non IFRS 15)

       

      0.1

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.1

      Revenue from third parties

       

      178.8

       

      7.2

       

      34.0

       

      82.8

       

      0.6

       

      0.0

       

      303.4

      Inter-segment revenue

       

      9.2

       

      0.0

       

      2.8

       

      5.3

       

      1.1

       

      –9.0

       

      9.4

      Total revenue

       

      188.0

       

      7.2

       

      36.8

       

      88.1

       

      1.7

       

      –9.0

       

      312.8

      Operating expenses

       

      –83.6

       

      –6.4

       

      –16.2

       

      –43.3

       

      –30.1

       

      9.0

       

      –170.6

      EBITDA

       

      104.4

       

      0.8

       

      20.6

       

      44.8

       

      –28.4

       

      0.0

       

      142.2

      Depreciation and amortisation

       

      –50.3

       

      –0.1

       

      –12.6

       

      –3.1

       

      –1.7

       

      0.0

       

      –67.8

      EBIT

       

      54.1

       

      0.7

       

      8.0

       

      41.7

       

      –30.1

       

      0.0

       

      74.4

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 30 June 2018

       

      1,421.8

       

      6.5

       

      310.3

       

      112.0

       

      32.5

       

       

       

      1,883.1

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %) 1)

       

      6.5

       

      27.4

       

      4.0

       

      62.4

       

      –142.7

       

       

       

      6.7

      1) Based on the result of the 12-month period preceding the reporting date.

      2) Non-interest-bearing non-current liabilities include non-current provisions for formal expropriations plus sound insulation and resident protection, deferred tax liabilities, employee benefit obligations and the non-interest-bearing portion of non-current financial liabilities.

      3) Non-interest-bearing current liabilities include current provisions for formal expropriations and sound insulation and resident protection, current tax liabilities, trade payables and other current liabilities plus accruals and deferrals, and the non-interest-bearing portion of current financial liabilities.

      4) In accordance with the Swiss Ordinance on Airport Charges, the shortfall in the “Access fees” segment can be charged to the “Air security” segment. Taking the shortfall into account, the ROIC of the “Air security” segment amounts to 14.1%.

    • 2 Revenue

      (CHF 1,000)

       

      First half 2019

       

      First half 2018

      Passenger charges

       

      118,650

       

      117,075

      Security charges

       

      83,096

       

      81,746

      PRM charges

       

      7,399

       

      7,239

      Passenger-related flight operations charges

       

      209,145

       

      206,060

      Landing charges

       

      42,417

       

      41,457

      Aircraft-related noise charges

       

      5,473

       

      5,619

      Emission charges

       

      1,998

       

      1,944

      Parking charges

       

      13,248

       

      12,725

      Freight revenue

       

      4,207

       

      4,378

      Other flight operations charges

       

      67,343

       

      66,123

      Total flight operations charges

       

      276,488

       

      272,183

      Baggage sorting and handling system

       

      21,232

       

      20,718

      De-icing

       

      7,390

       

      6,286

      Check-in

       

      2,838

       

      2,873

      Aircraft energy supply system

       

      1,792

       

      1,725

      Other fees

       

      3,135

       

      3,026

      Total aviation fees

       

      36,387

       

      34,628

      Refund of security costs

       

      1,043

       

      1,008

      Other revenue

       

      1,458

       

      1,205

      Total other aviation revenue

       

      2,501

       

      2,213

      Total aviation revenue

       

      315,376

       

      309,024

       

       

       

       

       

      Retail, tax & duty-free

       

      54,678

       

      52,211

      Food & beverage operations

       

      9,122

       

      8,895

      Advertising media and promotion

       

      9,162

       

      9,103

      Revenue from multi-storey car parks

       

      39,220

       

      38,846

      Other commercial revenue (car rentals, taxis, banks, etc.)

       

      8,327

       

      8,448

      Total commercial and parking revenue

       

      120,509

       

      117,503

      Revenue from rental and leasing agreements

       

      45,796

       

      44,884

      Energy and utility cost allocation

       

      12,024

       

      11,226

      Cleaning

       

      2,439

       

      2,348

      Revenue from services

       

      2,360

       

      1,999

      Total revenue from facility management

       

      62,619

       

      60,457

      Communication services

       

      7,752

       

      7,605

      Other services and miscellaneous

       

      8,669

       

      8,635

      Catering

       

      1,023

       

      960

      Fuel charges

       

      4,311

       

      4,121

      Total revenue from services 

       

      21,755

       

      21,321

      Revenue from consulting activities

       

      3,719

       

      3,198

      Other revenue from international business

       

      18,874

       

      19,918

      Revenue from construction projects as part of concession arrangements

       

      45,102

       

      8,761

      Total revenue from international business

       

      67,695

       

      31,877

      Total non-aviation revenue

       

      272,578

       

      231,158

       

       

       

       

       

      Total revenue 

       

      587,954

       

      540,182

      Presentation of revenue from contracts with customers (IFRS 15):

      (CHF 1,000)

       

      First half 2019

       

      First half 2018

      Flight operations charges

       

      276,488

       

      272,183

      Aviation charges

       

      36,387

       

      34,628

      Other aviation revenue

       

      2,396

       

      2,110

      Total aviation revenue from contracts with customers (IFRS 15)

       

      315,271

       

      308,921

      Aviation revenue (non IFRS 15)

       

      105

       

      103

      Total aviation revenue

       

      315,376

       

      309,024

       

       

       

       

       

      Commercial and parking revenue

       

      39,426

       

      38,882

      Revenue from facility management

       

      16,568

       

      15,322

      Revenue from services 

       

      21,019

       

      20,631

      Revenue from international activities

       

      67,694

       

      31,877

      Total non-aviation revenue from contracts with customers (IFRS 15)

       

      144,707

       

      106,712

      Non-aviation revenue (non IFRS 15)

       

      127,871

       

      124,446

      Total non-aviation revenue

       

      272,578

       

      231,158

       

       

       

       

       

      Total revenue 

       

      587,954

       

      540,182

    • 3 Other income and expenses

      (CHF 1,000)

       

      First half 2019

       

      First half 2018

      Capitalised expenditure

       

      7,237

       

      6,620

      Other income

       

      1,689

       

      587

      Capitalised expenditure and other income

       

      8,926

       

      7,207

       

       

       

       

       

      Expenses for construction projects as part of concession arrangements

       

      –45,102

       

      –8,761

      Other expenses

       

      –3,401

       

      –60,672

      Expenses for construction projects and other expenses

       

      –48,503

       

      –69,433

      The expenses of CHF 45.1 million (prior-year period: CHF 8.8 million) for construction projects under concession arrangements are the result of investments in airport infrastructure in Brazil and Chile. The corresponding counter-item can be found under note 2, Revenue.

      In the prior-year period, “Other expenses” included the CHF 57.6 million increase in the provision for sound insulation and resident protection measures that was recognised in profit or loss.

    • 4 finance result

      (CHF 1,000)

       

      First half 2019

       

      First half 2018

      Net interest expenses on debentures and non-current loans

       

      –5,345

       

      –5,545

      Net interest expenses on defined benefit obligations

       

      –537

       

      –409

      Interest expenses on finance lease liabilities

       

      –44

       

      –75

      Other interest expenses

       

      –980

       

      –781

      Adjustments to fair value on financial assets of Airport of Zurich Noise Fund

       

      0

       

      –2,746

      Present value adjustment on provision for formal expropriations plus sound insulation and resident protection 1)

       

      –2,159

       

      –94

      Present value adjustment on liabilities from concession arrangements

       

      –1,662

       

      –933

      Foreign exchange losses

       

      –640

       

      0

      Other finance costs

       

      –2,132

       

      –1,345

      Total finance costs

       

      –13,499

       

      –11,928

       

       

       

       

       

      Interest income on financial assets of Airport of Zurich Noise Fund

       

      243

       

      1,088

      Other interest income

       

      3,062

       

      1,012

      Adjustments to fair value on financial assets of Airport of Zurich Noise Fund

       

      6,410

       

      0

      Foreign exchange gains

       

      0

       

      185

      Other finance income

       

      53

       

      204

      Total finance income

       

      9,768

       

      2,489

       

       

       

       

       

      Finance result

       

      –3,731

       

      –9,439

      1) See note 10, Provision for formal expropriations plus sound insulation and resident protection.

    • 5 Property, Plant and equipment

      (CHF million)

       

      Land

       

      Engineering structures

       

      Buildings

       

      Projects in progress

       

      Movables

       

      Right-of-use assets

       

      Total property, plant and equipment

      Cost

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      118.7

       

      1,698.0

       

      4,377.9

       

      184.8

       

      272.9

       

      21.8

       

      6,674.1

      Additions

       

       

       

       

       

       

       

      94.5

       

       

       

       

       

      94.5

      Disposals

       

       

       

      –32.9

       

      –37.4

       

       

       

      –9.7

       

       

       

      –80.0

      Transfers

       

       

       

      0.2

       

      8.6

       

      –14.9

       

      4.7

       

       

       

      –1.4

      Balance as at 30 June 2019

       

      118.7

       

      1,665.3

       

      4,349.1

       

      264.4

       

      267.9

       

      21.8

       

      6,687.2

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Depreciation, amortisation

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0.0

       

      –898.4

       

      –2,936.5

       

      0.0

       

      –191.6

       

      –19.4

       

      –4,045.9

      Additions

       

       

       

      –29.7

       

      –69.8

       

       

       

      –7.7

       

      –0.7

       

      –107.9

      Disposals

       

       

       

      32.8

       

      36.9

       

       

       

      9.9

       

       

       

      79.6

      Balance as at 30 June 2019

       

      0.0

       

      –895.3

       

      –2,969.4

       

      0.0

       

      –189.4

       

      –20.1

       

      –4,074.2

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Government subsidies and grants

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0.0

       

      –10.1

       

      –1.7

       

      0.0

       

      –0.4

       

      0.0

       

      –12.2

      Additions

       

       

       

       

       

       

       

      –0.3

       

       

       

       

       

      –0.3

      Disposals

       

       

       

      0.4

       

      0.1

       

       

       

      0.1

       

       

       

      0.6

      Balance as at 30 June 2019

       

      0.0

       

      –9.7

       

      –1.6

       

      –0.3

       

      –0.3

       

      0.0

       

      –11.9

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Net carrying amount as at 1 January 2019

       

      118.7

       

      789.5

       

      1,439.7

       

      184.8

       

      80.9

       

      2.4

       

      2,616.0

      Net carrying amount as at 30 June 2019

       

      118.7

       

      760.3

       

      1,378.1

       

      264.1

       

      78.2

       

      1.7

       

      2,601.1

      Projects in progress

      In the first half of 2019, Flughafen Zürich AG invested a total of CHF 94.5 million in projects in progress (prior-year period: CHF 72.4 million). The biggest items comprise the following projects:

      • Upgrading and expansion of the baggage system (CHF 16.0 million)
      • Upgrading of the power supply systems in areas used for flight operations (CHF 15.1 million)
    • 6 investment property

      (CHF 1,000)

       

      Land

       

      Project and construction costs

       

      Total investment property

      Cost

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      950

       

      306,696

       

      307,646

      Additions

       

      0

       

      44,405

       

      44,405

      Balance as at 30 June 2019

       

      950

       

      351,101

       

      352,051

       

       

       

       

       

       

       

      Accumulated depreciation and impairment losses

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0

       

      –592

       

      –592

      Additions

       

      0

       

      –120

       

      –120

      Balance as at 30 June 2019

       

      0

       

      –712

       

      –712

       

       

       

       

       

       

       

      Net carrying amount as at 1 January 2019

       

      950

       

      306,104

       

      307,054

      Net carrying amount as at 30 June 2019

       

      950

       

      350,389

       

      351,339

      THE CIRCLE PROJECT

      Based on the nature of the contractual arrangement, the co-ownership structure THE CIRCLE is classified as a joint operation in accordance with IFRS 11. The share of the rights to the assets and the share of the obligations for the liabilities of the co-ownership structure are therefore recognised and presented in the relevant line items in the consolidated financial statements of Flughafen Zürich AG (Flughafen Zürich AGʼs share: 51%).

      The share of THE CIRCLE property under construction is classified as investment property in accordance with IAS 40. In this context, Flughafen Zürich AG has decided to apply the cost model. The land recognised in the amount of CHF 1.0 million represents the purchase cost of the share of the plot of land on which the project will be implemented. “Project and construction costs” in the amount of CHF 350.4 million (31 December 2018: CHF 306.1 million) include the share of the production costs capitalised to date less accumulated depreciation and impairment losses.

      The fair value of THE CIRCLE was CHF 444.7 million at the reporting date (31 December 2018: CHF 373.3 million).

    • 7 INTANGIBLE ASSETS

      (CHF 1,000)

       

      Intangible asset from right of formal expropriation

       

      Investments in airport operator projects

       

      Other intangible assets

      Cost

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      154,029

       

      130,475

       

      92,377

      Additions

       

      0

       

      68,923

       

      729

      Disposals

       

      0

       

      –2,062

       

      –5,533

      Transfers

       

      0

       

      –408

       

      1,826

      Foreign exchange differences

       

      0

       

      –637

       

      7

      Balance as at 30 June 2019

       

      154,029

       

      196,291

       

      89,406

       

       

       

       

       

       

       

      Accumulated depreciation and impairment losses

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      –60,292

       

      –4,843

       

      –74,492

      Additions

       

      –1,446

       

      –3,235

       

      –3,830

      Disposals

       

      0

       

      0

       

      5,245

      Foreign exchange differences

       

      0

       

      –354

       

      –5

      Balance as at 30 June 2019

       

      –61,738

       

      –8,432

       

      –73,082

       

       

       

       

       

       

       

      Net carrying amount as at 1 January 2019

       

      93,737

       

      125,632

       

      17,885

      Net carrying amount as at 30 June 2019

       

      92,291

       

      187,859

       

      16,324

      Investments in airport operator projects

      The investments in airport operator projects in the amount of CHF 187.9 million (31 December 2018: CHF 125.6 million) consist of concession rights which, due to the application of IFRIC 12, comprise minimum concession payments recognised as assets and investments made. They relate to the expansion and operation of the Chilean airports in Antofagasta and Iquique (CHF 35.1 million; 31 December 2018: CHF 30.4 million), in which Flughafen Zürich AG holds a controlling interest via its subsidiary A-port Chile S.A., as well as the expansion and operation of the Brazilian airport in Florianópolis (CHF 152.8 million; 31 December 2018: CHF 95.2 million) through the subsidiary Concessionária do Aeroporto Internacional de Florianópolis S.A. The obligations of CHF 27.7 million (31 December 2018: CHF 26.1 million) relating to the corresponding concessions have been recognised as current or non-current liabilities (see note 9, Financial liabilities).

    • 8 CASH AND CASH EQUIVALENTS AND FIXED-TERM DEPOSITS

       

       

      30.06.2019

       

      31.12.2018

      (CHF 1,000)

       

      Total

       

      of which AZNF

       

      Total

       

      of which AZNF

      Cash on hand

       

      191

       

      0

       

      213

       

      0

      Cash at banks and in postal accounts

       

      241,158

       

      13,516

       

      273,288

       

      34,242

      Fixed-term deposits 1)

       

      38,780

       

      0

       

      122,371

       

      0

      Total cash and cash equivalents

       

      280,129

       

      13,516

       

      395,872

       

      34,242

       

       

       

       

       

       

       

       

       

      Current fixed-term deposits 2)

       

      116,319

       

      0

       

      149,167

       

      0

      Non-current fixed-term deposits 2)

       

      127

       

      0

       

      37,500

       

      0

      Total fixed-term deposits

       

      116,446

       

      0

       

      186,667

       

      0

      1) Due within 90 days from date of acquisition.

      2) Due after 90 days from date of acquisition.

    • 9 FINANCIAL LIABILITIES

      (CHF 1,000)

       

      30.06.2019

       

      31.12.2018

      Debentures

       

      1,050,298

       

      1,050,244

      Non-current lease liabilities

       

      263

       

      1,655

      Non-current liabilities from concession arrangements

       

      26,757

       

      25,711

      Other non-current financial liabilities

       

      96,147

       

      7,860

      Non-current financial liabilities

       

      1,173,465

       

      1,085,470

       

       

       

       

       

      Debentures

       

      0

       

      38,204

      Current lease liabilities

       

      1,847

       

      1,355

      Current liabilities from concession arrangements

       

      984

       

      438

      Other current financial liabilities

       

      3,044

       

      2,660

      Current financial liabilities

       

      5,875

       

      42,657

       

       

       

       

       

      Total financial liabilities

       

      1,179,340

       

      1,128,127

    • 10 PROVISION FOR FORMAL EXPROPRIATIONS PLUS SOUND INSULATION AND RESIDENT PROTECTION

      (CHF 1,000)

       

      Formal expropriations

       

      Sound insulation and resident protection

       

      Total

      Balance as at 1 January 2019

       

      275,183

       

      148,170

       

      423,353

      Provisions used 1)

       

      –5,726

       

      –2,754

       

      –8,480

      Present value adjustment

       

      1,024

       

      1,135

       

      2,159

      Balance as at 30 June 2019

       

      270,481

       

      146,551

       

      417,032

      of which current (planned payment within 1 year)

       

      35,076

       

      15,220

       

      50,296

      of which non-current (planned payment from 1 year on)

       

      235,405

       

      131,331

       

      366,736

      1) The amount paid for formal expropriations only includes effective payments of compensation, and excludes other associated external costs in accordance with the regulations of the Airport of Zurich Noise Fund.

      Provision for formal expropriations

      As at 30 June 2019, the estimated costs for formal expropriations remained unchanged versus the last reporting date at CHF 350.0 million, of which CHF 77.8 million had so far been paid out. The outstanding costs of CHF 272.2 million (nominal amount) are stated at their present value of CHF 270.5 million in the interim consolidated financial statements for the period ended 30 June 2019. Due to another fall in interest rates, the interest rate used to adjust the present value of the future nominal payment flows was 0.10% (31 December 2018: 0.25%). It is currently expected that the payments can be completed by the end of 2025.

      Provision for sound insulation and resident protection

      As at 30 June 2019, the estimated costs for sound insulation and resident protection measures remained unchanged versus the last reporting date at CHF 400.0 million, of which CHF 251.9 million had so far been paid out. The outstanding costs of CHF 148.1 million (nominal amount) are stated at their present value of CHF 146.6 million in the interim consolidated financial statements for the period ended 30 June 2019. Due to another fall in interest rates, the interest rate used to adjust the present value of the future nominal payment flows was 0.10% (31 December 2018: 0.35%). It is currently expected that the payments can be completed by the end of 2030.

    • 11 AIRPORT of ZURICH NOISE FUND

      (CHF 1,000)

       

      2019

      Airport of Zurich Noise Fund as at 1 January

       

      425,405

      Revenue from noise charges

       

      5,287

      Costs for sound insulation and resident protection

       

      –2,754

      Costs for formal expropriations 1)

       

      –5,875

      Airport of Zurich Noise Fund as at 30 June before operating costs and finance result

       

      422,063

      Noise-related operating costs

       

      –1,701

      Interest income from financial assets of Airport of Zurich Noise Fund

       

      221

      Adjustments to fair value on financial assets of Airport of Zurich Noise Fund

       

      6,410

      Airport of Zurich Noise Fund as at 30 June

       

      426,993

      1) In addition to compensation payments for formal expropriations, this amount includes other associated external costs (in accordance with the regulations of the Airport of Zurich Noise Fund).

      Summary of assets invested in the Airport of Zurich Noise Fund:

      (CHF 1,000)

       

      30.06.2019

       

      31.12.2018

      Cash equivalents (see note 8, "Cash and cash equivalents")

       

      13,516

       

      34,242

      Current financial assets of Airport of Zurich Noise Fund

       

      37,342

       

      21,967

      Non-current financial assets of Airport of Zurich Noise Fund

       

      380,953

       

      377,241

      Accrual / deferral towards Flughafen Zürich AG 1)

       

      –4,818

       

      –8,045

      Total assets invested for Airport of Zurich Noise Fund

       

      426,993

       

      425,405

      1) For accounting reasons, an asset or liability towards Flughafen Zürich AG arises as of the balance sheet date. This is compensated in the subsequent month, so the balance of liquid funds is restored.

    • 12 DEFERRED TAX ASSETS AND LIABILITIES

      In accordance with IAS 12.47, deferred tax assets and liabilities are calculated at the rate that is expected to apply when the asset is realised or the liability settled. Flughafen Zürich AG currently anticipates an applicable tax rate of 20.4% (31 December 2018: 20.5%).

      The balance of deferred taxes changed as follows:

      (CHF 1,000)

       

      2019

      Deferred tax assets and liabilities, net as at 1 January

       

      –42,334

      Change in tax rate, recognised in other comprehensive income

       

      –25

      Change in tax rate, recognised in income statement

       

      292

      Deferred taxes on remeasurement of defined benefit liability, recognised in other comprehensive income

       

      5,926

      Change according to income statement

       

      –1,177

      Deferred tax assets and liabilities, net as at 30 June

       

      –37,318

      of which deferred tax assets

       

      790

      of which deferred tax liabilities

       

      –38,108

    • 13 Employee benefit obligations

      Employee benefit obligations broke down as follows at the reporting date:

      (CHF 1,000)

       

      30.06.2019

       

      31.12.2018

      Net defined benefit obligations

       

      –174,180

       

      –143,466

      Other long-term employee benefits

       

      –12,227

       

      –11,889

      Employee benefit obligations

       

      –186,407

       

      –155,355

      Net defined benefit obligations changed as follows in the first half of 2019:

      (CHF 1,000)

       

      2019

      Net defined benefit obligations as at 1 January

       

      –143,466

      Total charge recognised in the income statement

       

      –10,577

      Total remeasurements recognised in other comprehensive income

       

      –29,059

      Employer contributions

       

      8,922

      Net defined benefit obligations as at 30 June

       

      –174,180

      The total changes in measurement recognised in other comprehensive income resulted both from the change in the discount rate and from asset performance in the first half of 2019. The discount rate declined from 0.8% as at 31 December 2018 to 0.3%, as a result of which the liability increased by around 8%. Asset performance, on the other hand, was around 4.5%. This was calculated on the basis of the benefit planʼs financial position.

    • 14 FAIR VALUE DISCLOSURES

      FAIR VALUES

      Due to their short-term nature, the carrying amounts of cash and cash equivalents, fixed-term deposits, trade receivables, other current receivables and current liabilities are a reasonable approximation of their fair values.

      Financial assets in the Airport of Zurich Noise Fund: The fair value of the bonds corresponds to the market price of the securities at the reporting date (level 1). The fair value of the mixed investment fund is the unadjusted net asset value, as the units may be redeemed at that value as at the reporting date (level 2).

      Financial liabilities: The fair value of the debentures corresponds to the market price at the reporting date (level 1).

      Derivative financial instruments: The fair value of the cross-currency swap is determined using a fair value model (level 2). The key inputs are foreign exchange rates and interest rates observable in the market. Unobservable inputs are not significant to the measurement.

      (CHF 1,000)

       

       

       

      30.06.2019

       

       

       

      31.12.2018

       

       

      Carrying amount

       

      Fair value

       

      Carrying amount

       

      Fair value

       

       

       

       

       

       

       

       

       

      Bonds of Airport of Zurich Noise Fund

       

      418,295

       

      425,806

       

      303,812

       

      307,599

      Mixed investment fund of the Airport of Zurich Noise Fund

       

      101,806

       

      101,806

       

      95,396

       

      95,396

      Total financial assets

       

      520,101

       

      527,612

       

      399,208

       

      402,995

       

       

       

       

       

       

       

       

       

      Debentures

       

      –1,050,298

       

      –1,106,547

       

      –1,088,448

       

      –1,121,597

      Cross-currency swap

       

      –5,644

       

      –5,644

       

      –5,624

       

      –5,624

      Total financial liabilities

       

      –1,055,942

       

      –1,112,191

       

      –1,094,072

       

      –1,127,221

      FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

      Financial instruments recognised or disclosed at fair value are categorised according to the following hierarchy, reflecting the significance of the inputs used to measure fair value:

      Level 1 – Quoted market prices

      The inputs used to measure the assets or liabilities are quoted, unadjusted market prices determined in active markets for identical assets or liabilities at the measurement date.

      Level 2 – Measurement based on observable inputs

      The assets or liabilities are measured on the basis of inputs (other than the quoted prices included within level 1) that are directly or indirectly observable for the asset or liability.

      Level 3 – Measurement based on unobservable inputs

      The inputs for these assets or liabilities are not observable.

      (CHF 1,000)

       

      30.06.2019

       

      31.12.2018

       

       

      Level 1

       

      Level 2

       

      Level 3

       

      Level 1

       

      Level 2

       

      Level 3

       

       

       

       

       

       

       

       

       

       

       

       

       

      Mixed investment fund of the Airport of Zurich Noise Fund at fair value

       

       

       

      101,806

       

       

       

       

       

      95,396

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Cross-currency swap

       

       

       

      –5,644

       

       

       

       

       

      –5,624

       

       

    • 15 FURTHER DETAILS

      15.1 CONCESSIONS FOR THE OPERATION OF FOREIGN AIRPORTS

      As at the reporting date, Flughafen Zürich AG was responsible, via its subsidiaries, for the operation and expansion of the following foreign airports:

      Brazil

      In 2017, in a public tender conducted by the Brazilian government as part of an airport privatisation programme, Flughafen Zürich AG was awarded the concession for the operation and expansion of Hercílio Luz International Airport (IATA: FLN) in Florianópolis in the south of Brazil. The airport has a catchment area of 1.1 million people and is located in Santa Catarina, a popular holiday destination for both local and international travellers. In 2018, traffic volumes reached 3.8 million passengers. Concession fees totalling BRL 241.5 million are payable as consideration for the right to operate the airport. A portion of the concession charge was paid on the day that the concession arrangement was signed (BRL 83.3 million or CHF 24.7 million). Further minimum concession payments totalling BRL 158.2 million (CHF 40.1 million) are due over the 30-year term of the concession. Following the signing of the concession arrangement in July 2017, the wholly-owned subsidiary Concessionária do Aeroporto Internacional de Florianópolis S.A., as sole holder of the concession, took over flight operations from the state-owned operator Infraero on 3 January 2018. Flughafen Zürich AG is currently investing approximately BRL 550 million (approximately CHF 140 million) in airport infrastructure. The new terminal is expected to open in October 2019.

      On 15 March 2019, in a public tender conducted by the Brazilian government, Flughafen Zürich AG was awarded concessions for the operation and expansion of the airports in Vitória (IATA: VIX) and Macaé (IATA: MEA) in the southeast of Brazil. In 2018, traffic volumes at the two airports reached around 3.2 million passengers. A fixed concession fee totalling BRL 437.0 million (CHF 110.8 million) is payable as consideration for the right to operate the airports for a period of 30 years. This fee will fall due when the concession arrangement is signed in September 2019. As of the sixth year of operations, variable, revenue-based concession payments will also be due. Following the signing of the concession arrangement, the wholly-owned subsidiary Aeroportos do Sudeste do Brasil S.A., as sole holder of the concession, will take over the operation of the airports from the state-owned operator Infraero.

      Chile

      Since 2011, Sociedad Concesionaria Aeropuerto de Antofagasta S.A., a wholly-owned subsidiary of A-port S.A., has held the concession for the expansion and operation of Andrés Sabella International Airport (IATA: ANF) in Antofagasta in the north of Chile. The airport is located approximately 25 kilometres north of the city of Antofagasta. The concession has a term that is dependent upon traffic volumes and ends 36 months after the date on which 75% of the maximum aeronautical revenues are generated, but at the latest after 15 years. It is currently expected to end in 2025. No notable infrastructure investments are anticipated in the period through to the end of the concession.

      In 2017, Sociedad Concesionaria Aeropuerto Diego Aracena S.A., a wholly-owned subsidiary of A-port S.A., acquired the new concession for the operation and expansion of Diego Aracena International Airport (IATA: IQQ) in Iquique in the north of Chile. The airport is located around 40 kilometres south west of the city of Iquique in the Tarapacá region. With 1.4 million passengers a year, it is the countryʼs fifth-largest airport. The concession commenced in April 2018 and has a variable term that is dependent upon traffic volumes and ranges from an anticipated 18 years up to a possible maximum of 25 years. As part of the concession arrangement, the company has undertaken to invest in measures to upgrade and extend the airport infrastructure, in particular to extend the existing terminal. The company is currently expecting investments in airport infrastructure of approximately USD 60 million (approximately CHF 58 million) during the first four years.

      15.2 Contingent liabilities

      A number of legal proceedings and claims against Flughafen Zürich AG in the context of its normal business activities are still pending. The company does not expect the amounts required to settle these lawsuits and claims to have a significantly negative impact on the consolidated financial statements and cash flow of Flughafen Zürich AG.

      Depending on future and final-instance legal judgements, especially with respect to the southern approaches, noise-related liabilities may in future be subject to substantial adjustments, which would also require adjustments to the noise-related costs recognised as assets and liabilities in the balance sheet. At the present time, it is not possible to reliably estimate the total costs to capitalise as an intangible asset from the right of formal expropriation, the resulting amortisation or the corresponding provision.

      As part of its involvement in the expansion and operation of Confins International Airport in Belo Horizonte, Flughafen Zürich AG provides a guarantee as security for local debt financing, which is made available by the Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES). As at the reporting date, the amount arising from this guarantee was CHF 26.5 million (31 December 2018: CHF 26.5 million). Moreover, Flughafen Zürich AG has entered into a counterbond for a performance bond which the operator, Concessionária do Aeroporto Internacional de Confins S.A., had to submit to Brazilʼs National Civil Aviation Authority (ANAC). As at the reporting date, the amount arising from the counterbond was CHF 11.2 million (31 December 2018: CHF 10.6 million).

      As part of its involvement in the expansion and operation of the airport in Florianópolis, Flughafen Zürich AG provides a guarantee as security for local debt financing, which is made available by the Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES). As at the reporting date, the amount arising from this guarantee was CHF 87.9 million (31 December 2018: CHF 0.0 million). Moreover, Flughafen Zürich AG has entered into a counterbond for a performance bond which the operator, Concessionária do Aeroporto Internacional de Florianópolis S.A., had to submit to Brazilʼs National Civil Aviation Authority (ANAC). As at the reporting date, the amount arising from the counterbond was CHF 30.8 million (31 December 2018: CHF 28.8 million).

      As part of the concession arrangements for the airports in Antofagasta and Iquique, the operators have entered into performance bonds for the Chilean Ministry of Public Works (Ministerio de Obras Públicas). As at the reporting date, the total amount arising from these performance bonds was CHF 6.4 million (31 December 2018: CHF 7.0 million).

      Flughafen Zürich AG is jointly and severally liable to third parties for the liabilities of the co-ownership structure THE CIRCLE and the ordinary partnership THE CIRCLE.

      15.3 Events after the reporting date

      The Board of Directors approved the 2019 interim consolidated financial statements and authorised them for issue on 22 August 2019. No events occurred between 30 June 2019 and the date on which these consolidated financial statements were authorised for issue by the Board of Directors which would require an adjustment to the carrying amounts of the groupʼs assets and liabilities or which would have to be disclosed here.