Flughafen Zürich AG - Annual Report 2020

9 Right-of-use assets

FLUGHAFEN ZÜRICH AG AS LESSEE

(CHF 1,000)	Technical installations	Real estate	Total right-of-use assets
Cost
Balance as at 1 January 2019	21,755	41,894	63,649
Additions	0	45,403	45,403
Balance as at 31 December 2019	21,755	87,297	109,052

Balance as at 1 January 2020	21,755	87,297	109,052
Additions	0	5,571	5,571
Reclassification	–21,755	0	–21,755
Balance as at 31 December 2020	0	92,868	92,868


Depreciation, amortisation
Balance as at 1 January 2019	–19,396	0	–19,396
Additions	–1,423	–4,839	–6,262
Balance as at 31 December 2019	–20,819	–4,839	–25,658

Balance as at 1 January 2020	–20,819	–4,839	–25,658
Additions	–831	–7,334	–8,165
Reclassification	21,650	0	21,650
Balance as at 31 December 2020	0	–12,173	–12,173


Net carrying amount as at 31 December 2019	936	82,458	83,394
Net carrying amount as at 31 December 2020	0	80,695	80,695

technical installations

In December 2001, Flughafen Zürich AG entered into a framework lease contract to finance the aircraft energy supply system (ESS), which expired on 31 July 2020. At that date, the ESS was purchased at its residual value of CHF 0.1 million and transferred to the engineering structures category of assets (see note 8, Property, plant and equipment).

real estate

Flughafen Zürich AG has a right-of-use asset entitling it to use space in a building that is located on Flughafen Zürich AGʼs land and was constructed under a granted building right from 2005. Although its right to use the space ends on 31 January 2080, Flughafen Zürich AG has termination options, which have been taken into account. Had the termination options not been taken into account, additional liabilities with a nominal value of CHF 91.2 million would arise in addition to the lease liabilities recognised as at 31 December 2020.

In financial year 2020, following the completion of the real estate project the Circle, Flughafen Zürich AG moved into new office premises for which the company signed a 20-year lease with the co-ownership structure the Circle. The lease ends in October 2039 with an option to extend.

Flughafen Zürich AG leases space that is subleased as car parking space. The average period of use is five years.

The following table shows the carrying amounts of the lease liabilities and the changes during the reporting period:

(CHF 1,000)	2020	2019
Balance as at 1 January	–84,582	–44,904
Additions	–5,571	–45,403
Payments	6,887	5,797
Present value adjustment	–12	–72
Balance as at 31 December	–83,278	–84,582
of which current (payment within 1 year)	–7,463	–6,163
of which non-current (payment from 1 year on)	–75,815	–78,419

A detailed overview of the maturities of the lease liabilities can be found in note 18, Financial liabilities.

In the reporting period, the following amounts were recognised in profit or loss in connection with leases:

(CHF 1,000)	2020	2019
Depreciation charges for right-of-use assets	–8,165	–6,262
Interest expense on lease liabilities	–12	–72
Expense relating to short-term leases	–64	–1,111
Total amount recognised for leases in profit or loss	–8,241	–7,445

The total cash outflow for leases amounted to CHF 8.2 million in the reporting period (2019: CHF 6.9 million). Future cash outflows for leases not yet commenced as at the reporting date amount to CHF 17.6 million.

FLUGHAFEN ZÜRICH AG AS LESSOR

The tenancy agreements entered into by Flughafen Zürich AG as lessor may be either fixed tenancy or turnover-based agreements:

COMMERCIAL LEASES

Commercial leases consist primarily of leases of commercial space. These agreements between the parties generally comprise guaranteed basic rents plus turnover-based portions with a fixed term of five years and no other options. Moreover, some agreements involving basic rents and turnover-based portions exist as a function of passenger trends or prior-year sales.

FIXED TENANCY AGREEMENTS

Fixed tenancy agreements comprise in particular agreements for office, warehouse, archive and workshop premises. They are divided into limited-term and indefinite agreements, with the latter usually being subject to either six or twelve monthsʼ notice to be communicated in advance.

Commercial revenue (retail, tax & duty free plus food & beverage) and revenue from facility management (rental and leasing agreements) contained conditional rental payments amounting to CHF 3.1 million in the reporting period (2019: CHF 14.2 million); see also note 2, Revenue.

At the reporting date, minimum lease payments (fixed rents and guaranteed basic rents) under non-cancellable leases were as follows:

(CHF 1,000)	31.12.2020	31.12.2019
Due date up to 1 year	213,122	229,706
Due date from 1 to 5 years	801,256	774,776
Dute date in more than 5 years	308,083	368,050
Total	1,322,461	1,372,532