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 2020 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 2019 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 2020 beginning on 1 January:
- Amendments to IAS 1 and IAS 8: Definition of Material
- Amendments to IFRS 3: Definition of a Business
- Amendments to References to the Conceptual Framework in IFRS Standards
- Amendments to IFRS 16: Covid-19-Related Rent Concessions
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 2019.
Changes in the consolidated group
In November 2019, in a public tender conducted by the Indian government, Flughafen Zürich AG was awarded the concession for the construction and operation of the new Noida International Airport in Delhi. In early 2020, the wholly-owned subsidiary Yamuna International Airport Private Limited based in New Delhi (India) was established for this purpose.
Seasonal factors
As there continues to be major uncertainty over the further course of the coronavirus crisis, it remains difficult to issue a reliable forecast for the second half of the year. The trend in passenger numbers depends to a significant extent on the pace of the recovery in international tourist traffic in light of border openings and travel restrictions.
II NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1 Segment reporting
(CHF million)
Regulated business
Noise
Non-regulated business
Eliminations
Consolidated
First half 2020
Revenue from contracts with customers (IFRS 15)
126.8
3.5
72.6
0.0
202.9
Other revenue (non IFRS 15)
0.1
0.0
107.4
0.0
107.5
Revenue from third parties
126.9
3.5
180.0
0.0
310.4
Inter-segment revenue
10.1
0.0
36.3
–46.4
0.0
Total revenue
137.0
3.5
216.3
–46.4
310.4
Personnel expenses
–33.8
–0.8
–59.4
0.0
–94.0
Other operating expenses
–73.0
–0.7
–37.8
0.0
–111.5
Inter-segment operating expenses
–36.4
–0.4
–9.6
46.4
0.0
Segment result (EBITDA)
–6.2
1.6
109.5
0.0
104.9
Depreciation and amortisation
–68.7
–1.8
–52.8
0.0
–123.3
Segment result (EBIT)
–74.9
–0.2
56.7
0.0
–18.4
Finance result
–12.8
Share of profit or loss of associates
–1.6
Income tax expense
5.3
Consolidated result
–27.5
Invested capital as at 30 June 2020
2,004.7
109.9
2,267.6
4,382.2
Non-interest-bearing non-current liabilities 1)
616.3
Non-interest-bearing current liabilities 2)
225.7
Total assets as at 30 June 2020
5,224.2
ROIC (in %) 3)
1.0
2.4
7.0
4.0
(CHF million)
Aviation
PRM
User fees
Air security 4)
Access fees 4)
Eliminations
Total regulated business
First half 2020
Revenue from contracts with customers (IFRS 15)
78.5
2.6
16.0
29.4
0.3
0.0
126.8
Other revenue (non IFRS 15)
0.1
0.0
0.0
0.0
0.0
0.0
0.1
Revenue from third parties
78.6
2.6
16.0
29.4
0.3
0.0
126.9
Inter-segment revenue
9.7
0.0
2.3
7.5
1.1
–10.5
10.1
Total revenue
88.3
2.6
18.3
36.9
1.4
–10.5
137.0
Personnel expenses
–28.7
0.0
–3.8
–1.0
–0.3
0.0
–33.8
Other operating expenses
–18.9
–3.4
–2.2
–25.6
–22.9
0.0
–73.0
Inter-segment operating expenses
–27.8
–0.4
–7.1
–4.5
–7.1
10.5
–36.4
EBITDA
12.9
–1.2
5.2
5.8
–28.9
0.0
–6.2
Depreciation and amortisation
–51.2
–0.1
–12.4
–3.5
–1.5
0.0
–68.7
EBIT
–38.3
–1.3
–7.2
2.3
–30.4
0.0
–74.9
Invested capital as at 30 June 2020
1,455.2
9.3
372.8
138.9
28.4
2,004.7
ROIC (in %) 3)
1.9
1.6
–0.1
36.8
–153.0
1.0
1) 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 non-current liabilities from concession arrangements.
2) 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.
3) Based on the result of the 12-month period preceding the reporting date.
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 -4.7%.
The reportable segments for the prior-year period are as follows:
(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
Personnel expenses
–40.7
–0.9
–64.2
0.0
–105.8
Other operating expenses
–91.7
–0.4
–86.4
0.0
–178.5
Inter-segment operating expenses
–44.4
–0.3
–9.9
54.6
0.0
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
Consolidated result
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 1)
618.0
Non-interest-bearing current liabilities 2)
213.8
Total assets as at 30 June 2019
4,302.6
ROIC (in %) 3)
7.6
3.4
11.6
9.3
(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
Personnel expenses
–33.9
0.0
–5.0
–1.2
–0.6
0.0
–40.7
Other operating expenses
–22.9
–6.0
–2.8
–36.3
–23.7
0.0
–91.7
Inter-segment operating expenses
–30.4
–0.5
–8.1
–6.8
–7.0
8.4
–44.4
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 %) 3)
7.3
33.1
4.6
76.0
–139.5
7.6
1) 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 non-current liabilities from concession arrangements.
2) 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.
3) Based on the result of the 12-month period preceding the reporting date.
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%.
2 Revenue
(CHF 1,000)
First half 2020
First half 2019
Passenger charges
41,953
118,650
Security charges
28,952
83,096
PRM charges
2,575
7,399
Passenger-related flight operations charges
73,480
209,145
Landing charges
18,840
42,417
Aircraft-related noise charges
3,515
5,473
Emission charges
921
1,998
Parking charges
12,312
13,248
Freight revenue
3,338
4,207
Other flight operations charges
38,926
67,343
Total flight operations charges
112,406
276,488
Baggage sorting and handling system
8,575
21,232
De-icing
3,158
7,390
Check-in
1,388
2,838
Aircraft energy supply system
1,030
1,792
Other fees
2,211
3,135
Total aviation fees
16,362
36,387
Refund of security costs
439
1,043
Other revenue
1,222
1,458
Total other aviation revenue
1,661
2,501
Total aviation revenue
130,429
315,376
Retail, tax & duty-free
33,931
54,678
Food & beverage operations
5,528
9,122
Advertising media and promotion
6,117
9,162
Revenue from multi-storey car parks
21,392
39,220
Other commercial revenue (car rentals, taxis, banks, etc.)
5,539
8,327
Total commercial and parking revenue
72,507
120,509
Revenue from rental and leasing agreements
54,834
45,796
Energy and utility cost allocation
10,824
12,024
Cleaning
1,156
2,439
Revenue from services
2,316
2,360
Total revenue from facility management
69,130
62,619
Communication services
7,399
7,752
Other services and miscellaneous
5,019
8,669
Catering
393
1,023
Fuel charges
1,969
4,311
Total revenue from services
14,780
21,755
Revenue from consulting activities
2,799
3,719
Other revenue from international business
17,427
18,874
Revenue from construction projects as part of concession arrangements
3,328
45,102
Total revenue from international business
23,554
67,695
Total non-aviation revenue
179,971
272,578
Total revenue
310,400
587,954
Sales of commercial partners in the retail, tax & duty free and food & beverage segments were much lower owing to the coronavirus crisis. The corresponding commercial revenue of Flughafen Zurich AG for the 2020 financial year will therefore be based on the agreed minimum annual rents.
According to a legal assessment, tenants affected by the lockdown are not required to pay the agreed minimum annual rent. Accordingly, Flughafen Zurich AG did not enter the minimum rent for the lockdown period from 17 March until 10 May 2020.
Additional rent reductions have been discussed with the tenants concerned for the post-lockdown period (as of 11 May 2020). Solutions have already been found with most commercial partners. On the basis of a best-possible assessment, the company has factored the expected rent reductions in to the half-yearly results as at 30 June 2020.
Presentation of revenue from contracts with customers (IFRS 15):
(CHF 1,000)
First half 2020
First half 2019
Flight operations charges
112,406
276,488
Aviation charges
16,362
36,387
Other aviation revenue
1,556
2,396
Total aviation revenue from contracts with customers (IFRS 15)
130,324
315,271
Aviation revenue (non IFRS 15)
105
105
Total aviation revenue
130,429
315,376
Commercial and parking revenue
20,629
39,426
Revenue from facility management
14,072
16,568
Revenue from services
14,296
21,018
Revenue from international activities
23,554
67,695
Total non-aviation revenue from contracts with customers (IFRS 15)
72,551
144,707
Non-aviation revenue (non IFRS 15)
107,420
127,871
Total non-aviation revenue
179,971
272,578
Total revenue
310,400
587,954
3 Other income and expenses
(CHF 1,000)
First half 2020
First half 2019
Capitalised expenditure
7,607
7,237
Other income
736
1,689
Capitalised expenditure and other income
8,343
8,926
Expenses for construction projects as part of concession arrangements
–3,328
–45,102
Other expenses
–2,409
–3,401
Expenses for construction projects and other expenses
–5,737
–48,503
The expenses of CHF -3.3 million (prior-year period: CHF -45.1 million) for construction projects under concession arrangements are the result of investments in airport Brazil, Chile and India. The corresponding counter-item can be found under note 2, Revenue.
4 finance result
(CHF 1,000)
First half 2020
First half 2019
Net interest expenses on debentures and non-current loans
–5,082
–5,345
Net interest expenses on defined benefit obligations
–175
–537
Interest expenses on finance lease liabilities
–12
–44
Other interest expenses
–4,110
–980
Adjustments to fair value on financial assets of Airport of Zurich Noise Fund
–1,399
0
Present value adjustment on provision for formal expropriations plus sound insulation and resident protection
0
–2,159
Present value adjustment on liabilities from concession arrangements
–959
–1,662
Foreign exchange losses
–699
–640
Other finance costs
–1,115
–2,132
Total finance costs
–13,551
–13,499
Interest income on financial assets of Airport of Zurich Noise Fund
200
243
Other interest income
397
3,062
Adjustments to fair value on financial assets of Airport of Zurich Noise Fund
0
6,410
Other finance income
78
53
Total finance income
675
9,768
Finance result
–12,876
–3,731
The increase in “Other interest expenses” in the first half of 2020 is due in particular to borrowing costs payable in Florianópolis, as these can no longer be capitalised since the new terminal was completed in autumn 2019.
The decline in “Other interest income” compared with the prior-year period is attributable to lower holdings of cash and cash equivalents for international concessions, which in turn generate a lower amount of interest income.
5 Property, Plant and equipment
(CHF million)
Land
Engineering structures
Buildings
Projects in progress
Movables
Total property, plant and equipment
Cost
Balance as at 1 January 2020
129.0
1,673.3
4,607.7
305.2
277.4
6,992.6
Additions
9.1
0.8
128.5
138.4
Disposals
–2.0
–4.6
–7.3
–13.9
Transfers
0.2
28.4
–35.3
3.8
–2.9
Balance as at 30 June 2020
138.1
1,671.5
4,632.3
398.4
273.9
7,114.2
Depreciation, amortisation
Balance as at 1 January 2020
0.0
–921.4
–3,022.6
0.0
–193.9
–4,137.9
Additions
–29.4
–72.4
–8.2
–110.0
Disposals
1.8
4.3
7.2
13.3
Balance as at 30 June 201920
0.0
–949.0
–3,090.7
0.0
–194.9
–4,234.6
Government subsidies and grants
Balance as at 1 January 2020
0.0
–9.3
–1.7
0.0
–0.2
–11.2
Additions
–0.7
–0.7
Disposals
0.4
0.1
0.1
0.6
Transfers
–0.5
0.5
0.0
Balance as at 30 June 2020
0.0
–8.9
–2.1
–0.2
–0.1
–11.3
Net carrying amount as at 1 January 2020
129.0
742.6
1,583.4
305.2
83.3
2,843.5
Net carrying amount as at 30 June 2020
138.1
713.6
1,539.5
398.2
78.9
2,868.3
Projects in progress
In the first half of 2020, Flughafen Zürich AG invested a total of CHF 128.5 million in projects in progress (prior-year period: CHF 94.5 million). The biggest items comprise the following projects:
- Upgrading and expansion of the baggage system (CHF 30.5 million)
-
Renovation of the maintenance workshop (CHF 13.8 million)
- Expansion of the landside passenger zones (CHF 13.3 million)
Impairment
Due to the coronavirus pandemic and the related indicators that items of property, plant and equipment may be impaired, Flughafen Zürich AG performed an impairment test (see note 16.1, Impairment in accordance with IAS 36).
6 investment property
(CHF 1,000)
Land
Project and construction costs
Total investment property
Cost
Balance as at 1 January 2020
950
432,519
433,469
Additions
0
71,805
71,805
Balance as at 30 June 2020
950
504,324
505,274
Accumulated depreciation and impairment losses
Balance as at 1 January 2020
0
–712
–712
Additions
0
–466
–466
Balance as at 30 June 2020
0
–1,178
–1,178
Net carrying amount as at 1 January 2020
950
431,807
432,757
Net carrying amount as at 30 June 2020
950
503,146
504,096
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 fair value of The Circle was CHF 627.3 million at the reporting date (31 December 2019: CHF 530.9 million). The value was calculated by an external property valuer.
7 INTANGIBLE ASSETS
(CHF 1,000)
Investments in airport operator projects
Intangible asset from right of formal expropriation
Other intangible assets
Cost
Balance as at 1 January 2020
353,759
134,029
94,114
Additions
11,038
0
23
Disposals
0
0
–19,350
Transfers
0
0
2,913
Foreign exchange differences
–79,168
0
–739
Balance as at 30 June 2020
285,629
134,029
76,961
Accumulated depreciation and impairment losses
Balance as at 1 January 2020
–10,469
–63,184
–75,581
Additions
–4,384
–1,127
–3,525
Disposals
0
0
19,350
Foreign exchange differences
3,679
0
337
Balance as at 30 June 2020
–11,174
–64,311
–59,419
Net carrying amount as at 1 January 2020
343,290
70,845
18,533
Net carrying amount as at 30 June 2020
274,455
69,718
17,542
Investments in airport operator projects
The investments in airport operator projects in the amount of CHF 274.5 million (31 December 2019: CHF 343.3 million) consist of concession rights which, due to the application of IFRIC 12, comprise minimum concession payments recognised as assets and investments made.
The obligations of CHF 21.7 million (31 December 2019: CHF 26.3 million) relating to the corresponding concessions have been recognised as current or non-current liabilities (see note 10, Financial liabilities).
IMPAIRMENT
Due to the coronavirus pandemic and the related indicators that intangible assets may be impaired, Flughafen Zürich AG performed an impairment test (see note 16.1, Impairment in accordance with IAS 36).
8 Trade receivables
(CHF 1,000)
30.06.2020
31.12.2019
Trade receivables, gross
54,644
112,805
Allowance for expected credit loss
–1,001
–616
Trade receivables, net
53,643
112,189
(CHF 1,000)
30.06.2020
Not past due
Past due, 0 to 30 days
Past due, 31 to 60 days
Past due, more than 60 days
Total
Expected credit loss rate (in %)
0.3
1.5
3.0
5.0
Trade receivables, gross
27,343
7,012
9,538
10,751
54,644
Expected credit loss
–74
–105
–285
–537
–1,001
(CHF 1,000)
31.12.2019
Not past due
Past due, 0 to 30 days
Past due, 31 to 60 days
Past due, more than 60 days
Total
Expected credit loss rate (in %)
0.3
1.5
3.0
5.0
Trade receivables, gross
94,505
14,754
1,499
2,047
112,805
Expected credit loss
–247
–221
–46
–102
–616
9 CASH AND CASH EQUIVALENTS AND FIXED-TERM DEPOSITS
30.06.2020
31.12.2019
(CHF 1,000)
Total
of which AZNF
Total
of which AZNF
Cash on hand
181
0
120
0
Cash at banks and in postal accounts
133,775
12,512
115,845
18,092
Fixed-term deposits 1)
488,381
0
16,463
0
Total cash and cash equivalents
622,337
12,512
132,428
18,092
Current fixed-term deposits 2)
175,000
0
37,500
0
Non-current fixed-term deposits 2)
25,596
0
636
0
Total fixed-term deposits
200,596
0
38,136
0
1) Due within 90 days from date of acquisition.
2) Due after 90 days from date of acquisition.
10 FINANCIAL LIABILITIES
(CHF 1,000)
30.06.2020
31.12.2019
Debentures
1,448,879
750,416
Non-current liabilities to banks
67,080
89,491
Non-current lease liabilities
80,323
78,419
Non-current liabilities from concession arrangements
20,679
25,256
Other non-current financial liabilities
43,750
15,786
Non-current financial liabilities
1,660,711
959,368
Debentures
299,999
299,938
Current liabilities to banks
60,000
0
Current lease liabilities
6,346
6,163
Current liabilities from concession arrangements
995
1,068
Other current financial liabilities
7,288
44,383
Current financial liabilities
374,628
351,552
Total financial liabilities
2,035,339
1,310,920
In February 2020, Flughafen Zürich AG issued a fifteen-year CHF 400.0 million debenture bearing a coupon of 0.20%, which was used to fund property purchases and served as working capital.
In May 2020, the company placed a further debenture in order to secure liquidity. This was a four-year CHF 300.0 million debenture bearing a coupon of 0.70%.
The maturities and terms of the debentures outstanding at the reporting date were as follows:
as at 30.06.2020
as at 30.06.2020
Debentures
Nominal value
Carrying amount
Duration
Interest rate
Early amortisation
Interest payment date
(CHF 1,000)
(CHF 1,000)
Debenture 1)
300,000
299,999
2012 – 2020
1.250%
no
3.7.
Debenture
400,000
399,863
2013 – 2023
1.500%
no
17.4.
Debenture
300,000
299,082
2020 – 2024
0.700%
no
22.5.
Debenture
350,000
350,547
2017 – 2029
0.625%
no
24.5.
Debenture
400,000
399,387
2020 – 2035
0.200%
no
26.2.
Total debentures
1,748,878
1) Repayment as per 3 July 2020.
As at the reporting date, Flughafen Zürich AG had the following unused credit facilities at its disposal:
(CHF 1,000)
Duration
30.06.2020
31.12.2019
Operating credit lines (committed credit lines)
31.12.2025
160,000
240,000
Total credit lines
160,000
240,000
Utilisation
–74,716
–15,904
Total unused credit lines
85,284
224,096
11 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 2020
248,079
139,428
387,507
Provisions used 1)
–1,089
–2,952
–4,041
Present value adjustment
0
0
0
Balance as at 30 June 2020
246,990
136,476
383,466
of which current (planned payment within 1 year)
16,641
16,051
32,692
of which non-current (planned payment from 1 year on)
230,349
120,425
350,774
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 2020, the estimated costs for formal expropriations remained unchanged at CHF 330.0 million, of which CHF 83.0 million had already been paid out at that date. A provision for the outstanding costs of CHF 247.0 million (nominal amount) was recognised in the consolidated financial statements at present value as at the reporting date. As the interest rate used to adjust the present value of the nominal payment flows remained unchanged at 0.00%, the present value is the nominal amount. It is expected that the payments can be completed by the end of 2030.
Provision for sound insulation and resident protection
As at 30 June 2020, the estimated costs for sound insulation and resident protection measures remained unchanged at CHF 400.0 million, of which CHF 263.5 million had already been paid out at that date. A provision for the outstanding costs of CHF 136.5 million (nominal amount) was recognised in the consolidated financial statements at present value as at the reporting date. As the interest rate used to adjust the present value of the nominal payment flows remained unchanged at 0.00%, the present value is the nominal amount. It is expected that the payments can be completed by the end of 2030.
12 AIRPORT of ZURICH NOISE FUND
(CHF 1,000)
2020
Airport of Zurich Noise Fund as at 1 January
422,882
Revenue from noise charges
4,142
Costs for sound insulation and resident protection
–2,952
Costs for formal expropriations 1)
–1,440
Airport of Zurich Noise Fund as at 30 June before operating costs and finance result
422,632
Noise-related operating costs
–1,701
Interest income and adjustments to fair value financial assets of Airport of Zurich Noise Fund
–1,143
Airport of Zurich Noise Fund as at 30 June
419,788
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)
30.06.2020
31.12.2019
Cash equivalents (see note 9, "Cash and cash equivalents")
12,512
18,092
Current financial assets of Airport of Zurich Noise Fund
20,257
17,376
Non-current financial assets of Airport of Zurich Noise Fund
395,753
394,428
Accrual / deferral towards Flughafen Zürich AG 1)
–8,734
–7,014
Total assets invested for Airport of Zurich Noise Fund
419,788
422,882
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.
13 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 2019: 20.4%).
The balance of deferred taxes changed as follows:
(CHF 1,000)
2020
Deferred tax assets and liabilities, net as at 1 January
–34,033
Deferred taxes on remeasurement of defined benefit obligations, recognised in OCI
4,081
Change according to income statement
5,554
Foreign exchange differences
–251
Deferred tax assets and liabilities, net as at 30 June
–24,649
of which deferred tax assets
1,503
of which deferred tax liabilities
–26,152
14 Employee benefit obligations
Employee benefit obligations broke down as follows at the reporting date:
(CHF 1,000)
30.06.2020
31.12.2019
Net defined benefit obligations
–200,229
–177,007
Other long-term employee benefits
–13,600
–13,197
Employee benefit obligations
–213,829
–190,204
Net defined benefit obligations changed as follows in the first half of 2020:
(CHF 1,000)
2020
Net defined benefit obligations as at 1 January
–177,007
Total charge recognised in the income statement
–12,407
Total remeasurements recognised in other comprehensive income
–19,947
Employer contributions
9,132
Net defined benefit obligations as at 30 June
–200,229
15 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)
30.06.2020
31.12.2019
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets of Airport of Zurich Noise Fund (bonds)
312,510
316,414
307,305
313,155
Total financial assets
312,510
316,414
307,305
313,155
Debentures
–1,748,878
–1,755,785
–1,050,354
–1,093,000
Total financial liabilities
–1,748,878
–1,755,785
–1,050,354
–1,093,000
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)
30.06.2020
31.12.2019
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
103,500
104,499
Cross-currency swap
–2,574
–4,843
16 FURTHER DETAILS
16.1 IMPAIRMENT IN ACCORDANCE WITH IAS 36 (IMPAIRMENT TEST)
The coronavirus crisis brought air traffic almost completely to a standstill in some cases. This and the related reduction in commercial activities resulted in lower demand at airports around the globe and also affected Flughafen Zürich AG. As these circumstances indicate that the carrying amount of assets may be impaired, the company performed an impairment test for its cash-generating units. In each case, the cash-generating unitʼs value in use was calculated as its recoverable amount and checked to determine whether it exceeds the corresponding carrying amount. Management did not identify any impairment losses for Flughafen Zürich AGʼs cash-generating units as a result of this analysis as at the reporting date. The impairment calculations will be conducted again in the second half based on the current impact of the coronavirus crisis.
16.2 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.
Flughafen Zürich AG is jointly and severally liable to third parties for the liabilities of the co-ownership structure The Cirle and the ordinary partnership The Circle.
16.3 EVENTS AFTER THE REPORTING DATE
The Board of Directors approved the 2020 interim consolidated financial statements and authorised them for issue on 18 August 2020.
On 3 July 2020, a CHF 300 million debenture was repaid on schedule.
