Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry TRANSPORT

Transcription

1 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry TRANSPORT

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3 Introduction 3 General principles for lease accounting 4 Substance over form 4 Risks and rewards approach 5 Classification of leases 6 General requirements 6 Key considerations for the passenger airline industry 7 Sales and leaseback transactions 8 General requirements 8 Key considerations for the passenger airline industry 8 Defeasance of lease obligations 10 General requirements 10 Key considerations for the passenger airline industry 10 Disclosures 11 Appendix 1 Definitions of terms under IFRS 13 Appendix 2 Classification of a lease 16

4 2 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry

5 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 3 Introduction With recent increasing aircraft orders and an upswing in the airline industry over 2006, the aircraft leasing industry is booming. Significant industry restructuring in North America and large aircraft orders out of Asia and the Middle East requiring financing indicate that there should be ongoing demand in the leasing industry in the near-term future. Along with this increase in activity, comes the associated accounting issues regarding lease classification, i.e. whether a lease is treated as an operating lease or a finance lease and thus whether it is off or on balance sheet. The extent to which the selection of a particular financing structure is motivated by a desire to account for a leased asset off balance sheet is a matter for debate. Undoubtedly, some airlines are keen to avail themselves of structures which give rise to off balance sheet treatments for reasons typically associated with balance sheet gearing, borrowing ratios, borrowing limits and covenants. Despite this, it is widely recognised that when lenders and analysts review an airline's financial statements for setting debt covenants, they focus closely on the extent of long-term operating lease commitments shown by way of footnote and adjust debt ratios accordingly. The accounting standard setters have decided it is time to have another look at the fundamental concepts behind lease accounting. The International Accounting Standards Board (IASB) and the United States Financial Accounting Standards Board (FASB) established an international working group in December 2006 to jointly fundamentally revisit lease accounting. The objective of the joint project is to reconsider the accounting requirements for leasing arrangements. The resulting standard is expected to replace IAS 17 Leases. A discussion paper is expected in the first half of The principal objective of this publication is to outline accounting considerations for lessees of aircraft under International Financial Reporting Standards (IFRS) based on existing IFRS lease accounting standards as at January The publication has not sought to specifically address the initial issues being considered in the IASB and FASB working group meetings in the first half of 2007 given the early stage of the project.

6 4 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry General principles for lease accounting IAS 17 Leases sets out accounting treatment and disclosure requirements for lessors and lessees. SIC-27 Evaluating the substance of transactions involving the legal form of a lease is an interpretation underlining the substance over form principle. IFRIC 4 Determining whether an Arrangement contains a Lease provides guidance as to whether arrangements are or contain leases that should be accounted for in accordance with IAS 17 even though the agreement is not in the legal form of a lease. As per IFRIC 4 paragraph 6 the assessment of the substance of agreements depends on whether: fulfilment of the arrangement is dependent on the use of a specific asset or assets; and the arrangement conveys a right to use the asset(s). However lease agreements in the airline industry are predominantly in the legal form of a lease. Substance over form The IASB Framework for the Preparation and Presentation of Financial Statements provides a broad discussion of the basis of preparing financial statements. It establishes a general requirement to account for transactions in accordance with their substance and economic reality and not merely their legal form. The substance of transactions or other events is not always consistent with that which is apparent from their legal or contrived form. For example, accounting for a transaction in the legal form of a lease should reflect its economic substance; and IAS 17 Leases applies when an arrangement conveys a right to use an asset for a specified period of time, regardless of whether the contract is structured legally as a lease. A lease is an agreement whereby the lessor conveys to the lessee the right to use an asset for an agreed period of time in return for a payment or series of payments. The definition of a lease includes contracts that are sometimes referred to as hire or hire-purchase contracts. While legal definitions of a lease, hire or hire-purchase agreements may vary between different legal jurisdictions, IFRSs focus on the economic substance of the agreement. Therefore lease accounting is applicable to contracts that meet the definition of a lease under IFRSs and that are not exempt from IAS 17, regardless of their legal name or definition (IAS 17.4, 17.6). Under IFRS, each lease is classified as either a finance lease or an operating lease; the classification determines the accounting treatment to be followed by the lessor and the lessee. A series of linked transactions that are in the legal form of a lease should be accounted for in accordance with their economic substance. This situation may occur, for example, when a transaction is in the form of a lease but does not transfer the right of use of the asset from the lessor to the lessee. These transactions may be entered into in order to generate a tax saving (often cross-border) or to generate fees. Transactions in the legal form of a lease are considered to be 'linked' when the individual transactions cannot be understood without reference to the series as a whole. In this case, the series of transactions should be accounted for as one transaction. Therefore the net effect of the transaction is accounted for, rather than accounting separately for each component of the transaction (SIC-27). For example, entity P purchased an airplane from entity L and leases it back to L under a finance lease. The payment to L for the airplane has been paid into a trust account securing lease payments to be made by entity L for the lease payments.

7 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 5 Entity P is entitled to significant tax deductions due to accelerated tax depreciation on the airplane. P has no residual or credit risks arising from the lease transaction as the lease payment is secured by the trust accounts. Therefore the risk and rewards of the leased assets have in substance not been transferred to P; the reason for the transaction is merely to achieve a tax benefit since in substance P pays a fee to the lessee to obtain tax benefits. Therefore the transaction is included in the scope of SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease and the indicators mentioned above demonstrate that the arrangement may not, in substance, involve a lease under IAS 17. The accounting should reflect the substance of the arrangement. Risks and rewards approach The accounting treatment of a lease under IFRS does not depend on which party has legal ownership of the leased asset, but rather on which party bears the risks and rewards incidental to ownership of the leased asset. ownership of the leased asset are transferred from the lessor to the lessee by the agreement. Typical indicators assessed to determine whether substantially all of the risks and rewards are transferred include: the present value of the minimum lease payments that the lessee is required to make relative to the fair value of the leased asset at the inception of the lease the duration of the lease relative to the economic life of the leased asset the existence of a bargain purchase option for the lessee the transfer of ownership of the leased asset to the lessee. Ultimately, lease classification depends on the substance of the transaction rather than the form of the contract. The broad objective of the risks and rewards approach is to bring 'in substance purchase transactions' on the balance sheet as finance leases and account for them as if they were purchased assets. For finance leases, the following accounting arises: the asset and lease liability are included on the balance sheet, typically measured by reference to the present value of the minimum lease payments over the lease term the interest and principal inherent in the lease payments are identified, the former being charged to the income statement, the latter reducing the lease liability the asset is depreciated in line with policies applied to similar purchased assets, having regard to the lease term. The accounting treatment arising from operating leases is entirely different; neither the asset nor the lease liability are included on the balance sheet and the lease payments are charged evenly to the income statement over the lease term. Under an operating lease, both lessee and lessor treat the lease as an executory contract. A lease is considered to be a finance lease when substantially all of the risks and rewards incidental to

8 6 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry Classification of leases General requirements The definitions in IAS 17 are important in determining classification as a finance lease or as an operating lease. This classification is the basis for all subsequent accounting for the lease by both the lessee and lessor. A detailed definition of terms is attached as Appendix 1. Appendix 2 contains a chart to assist in determining whether substantially all the risks and rewards have been transferred and whether a lease is a finance lease. Amounts owed by a lessee to a lessor may include charges for repairs and maintenance or other services. Similarly, payments due under a lease may include charges that represent reimbursements for expenditures paid by the lessor on behalf of the lessee (e.g. taxes, insurance). When there are service elements or other reimbursements included in a single payment, these elements must be separated from the minimum lease payments that relate to the right of use of the leased asset. When calculating the present value of minimum lease payments to evaluate lease classification, such service charges and reimbursements are excluded as they are not considered part of the minimum lease payments. The

9 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 7 accounting treatment of aircraft maintenance obligations is another complex area, however it is not included in this publication. Key considerations for the passenger airline industry In assessing the balance of risks and rewards between the lessor and lessee many lease structures are straightforward and classifying them as operating or financing leases may be relatively simple. Many operating leases are of a conventional nature, designed to provide the airline with the flexibility to return the aircraft to the lessor in order to facilitate fleet planning and optimise aircraft utilisation. Such leases are typically relatively short term (or have periodic break points). However, there are a range of other lease structures where the balance of risk and rewards between lessor and lessee is less easy to assess. These may include the length of the lease and/or a desire on the part of the airline to have an option to acquire the aircraft either at the end of the lease or at break points throughout the lease. The use of optional lease extension periods, with fixed price rentals, is common in the aircraft leasing market. Consideration must then be given to current market conditions and lessee operating intentions to determine whether these fixed price extension periods should be included within the assessment of lease classification. Any assessment of the balance of risks and rewards may be complicated by the fact that the airline has sought to negotiate some 'upside' in the lease arrangements by obtaining an option whilst managing the downside risk by retaining the flexibility to return the aircraft to the lessor at certain points during the lease term. Each transaction has to be judged on its merits, although in cases where the option represents a bargain purchase option, its exercise should be presumed and a finance lease treatment would be appropriate. Judgement will be required for other fixed price options, and the extent to which the option is 'in the money' such as to indicate a finance lease treatment. The position may also be influenced by the existence of termination penalties, or other alternatives to purchase options, which might be triggered if options are not exercised. We do note however many leases structured as operating leases contain market value options to purchase the aircraft at specific breakpoints. A failure to exercise the option or extend the lease will often result in the payment of a termination sum. It is possible to envisage circumstances when the probability of exercise is low and the termination payment is not prohibitive and so the lease is classified as an operating lease. In that eventuality it is considered that termination payments should be accrued for over the period of the lease as this amount forms part of the minimum lease payments. It is not practicable to put forward categorical rules for determining the appropriate classification in such circumstances. In practice there can be a real commercial tension between the lessor and the lessee, as a result of which the balance of risk and rewards is not always clear cut. This may even be influenced by each party's views on prospective market conditions, aircraft values etc. The classification of the lease should be determined at inception but should be reviewed at intervals such as break points or option exercise points. Where a decision to extend the period of the lease term results in a reclassification from an operating lease to finance lease, the asset should be capitalised at the present value of the minimum lease payments at the market rate at the date of reclassification.

10 8 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry Sales and leaseback transactions General requirements The sale and leaseback of aircraft is commonplace amongst airlines. The primary reason for entering into such transactions is to realise economic gains, generate cashflows, increase fleet flexibility and alter the balance sheet treatment of the aircraft by leasing back under operating lease. IAS 17 requires that any profit or loss arising from such transactions is treated as follows: Then it should be deferred and amortised in proportion to the rental payments over the period for which the asset is expected to be used. If the sale price is above the fair value, the excess over fair value should be deferred and amortised over the period for which the asset is expected to be used. If the fair value at the time of a sale and leaseback transaction is less than the carrying amount of the asset, a loss equal to the amount of the difference between the carrying amount and fair value should be recognised immediately. timing of the recognition of gain or loss on sale (i.e. at the point of sale or deferred over the life of the lease) whether the aircraft and/or related deposits and capitalised costs can be derecognised from the balance sheet whether there is a requirement to consolidate any special purpose leasing entities the cashflow disclosures required. Sale and finance leaseback If a sale and leaseback transaction results in a finance lease, any profit or loss should not be recognised immediately through income but should be deferred and amortised over the lease term. Sale and operating leaseback If a sale and leaseback transaction results in an operating lease and it is clear that the transaction is established at fair value, any profit or loss should be recognised immediately. If the sale price is below fair value any profit or loss should be recognised immediately except if a loss is compensated by future rentals at below market price. For finance leases no such adjustment is necessary unless there has been an impairment in value, in which case, the carrying amount is reduced to the recoverable amount. Key considerations for the passenger airline industry Varying financing structures (some of which are tax driven) are put in place to help airlines finance aircraft orders from manufacturers and refinance existing aircraft. These transactions may occur prior to or post delivery. If the financing is structured as a sale and leaseback, then the lease arrangement may be classified as a finance or operating lease. The key accounting implications include: In KPMG's experience there are a number of issues in analysing and accounting for lease transactions. These include: Has there been a sale of the aircraft? An analysis of whether the risks and benefits have been transferred to the lessor is required. One of the primary risks of aircraft financing is who bears the residual aircraft value risk. At what date was there a sale? This impacts the timing of any profit recognition and balance sheet impact. It also affects cashflow statement disclosures, as a sale pre-delivery may remove the final delivery payment to the aircraft manufacturer from an airline's cashflow statement as

11 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 9 it is made by the lessor. If there is an intention to sell the aircraft prior to delivery, the classification of the security deposits also requires consideration. Are the sale proceeds at fair value? Aircraft fair values are often difficult to determine owing to the significant discounts to list prices given to large aircraft orders. Assessments of fair values are often complicated by the capitalisation of interest costs, hedging gains or losses, and other costs into the cost of the aircraft by airlines. When these costs are totalled do they represent an appropriate fair value to be analysed against the lessor's upfront payment in a sale and leaseback? When the transaction involves older aircraft this determination of appropriate fair values is more complex as there may be a lack of recent relevant sales information. Whilst third party 'desktop' valuations are a useful starting point to assess the fair value of an aircraft, other important factors to be considered include an analysis of the nature of costs capitalised into the aircraft value; benchmarking of lease rates; and understanding the economic rationale for any gain or loss on disposal. Is there a requirement to consolidate any special purpose leasing entities? SIC-12 Consolidation Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements contain technical guidance in regards to determining whether the special purpose leasing entity is controlled. For example, an assessment needs to be performed on who obtains the benefit of leasing an aircraft and who has the majority exposure to risk.

12 10 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry Defeasance of lease obligations General requirements As per IAS 39 Financial Instruments: Recognition and Measurement paragraph 39 derecognition of a financial liability (e.g. lease liability) occurs when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged, cancelled or expires. This condition is met when one of the following occurs: the debtor discharges the liability by paying the creditor, normally with cash, other financial assets, or goods or services. the debtor is legally released from primary responsibility for the liability (or part thereof) either by process of law or by the creditor. As per IAS 32 paragraph 42 financial assets and liabilities should be offset and the net amount reported in the balance sheet only if both of the following conditions are met: there is a legally enforceable right to set off the recognised amounts; and primary responsibility for the obligation for a fee while continuing to make the contractual payments on behalf of the third party. In order for the entity to derecognise its liability, it must obtain legal release from its creditor whereby the creditor agrees to accept the third party as the new primary obligor. Key considerations for the passenger airline industry Certain aircraft financing structures give rise to the defeasance of lease obligation, which is typically achieved by: a lease assignment there is the intention to settle on a net basis or to realise the asset and settle the liability simultaneously. a payment made to a third party to assume the airline's obligation to repay the debt element of the lease financing The extinguishment and set-off of debt should be approached with caution. Where lease structures give rise to a legal defeasance, it may in certain circumstances, be possible to extinguish the debt. It is not possible for an entity to extinguish a liability through an in-substance defeasance of its debt as the entity is not legally released from the obligation, and therefore derecognition of the liability would be inappropriate. An entity may arrange for a third party to assume the equity investors under a leveraged lease agreeing to accept a security in full settlement of the debt. Defeasance is a complex issue subject to different legal interpretation in different jurisdictions and therefore requires review of the specific facts and circumstances of each lease transaction.

13 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 11 Disclosures As per IAS 17 lessees shall make the following disclosures for finance leases in addition to meeting the requirements of IFRS 7 Financial Instruments: Disclosures if IFRS 7 is early adopted (otherwise IAS 32 Financial Instruments: Disclosure and Presentation): for each class of asset, the net carrying amount at the balance sheet date; a reconciliation between the total future minimum lease payments at the balance sheet date, and their present value; the total future minimum lease payments at the balance sheet date, and their present value for each of the following periods: (i) not later than one year; (ii) later than one year and not later than five years; and (iii) later than five years; contingent rents recognised as expense in the period; the total future minimum sublease payments expected to be received under noncancellable subleases at the balance sheet date; and a general description of the lessee's material leasing arrangements including, but not limited to: (i) the basis on which contingent rent payable is determined (ii) the existence and terms of renewal or purchase options and escalation clauses (iii) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt and further leasing. As per IAS 17 lessees shall make the following disclosures for operating leases in addition to meeting the requirements of IFRS 7 Financial Instruments: Disclosures if IFRS 7 is early adopted (otherwise IAS 32 Financial Instruments: Disclosure and Presentation): the total future minimum lease payments under non-cancellable operating leases for each of the following periods: (i) not later than one year (ii) later than one year and not later than five years (iii) later than five years the total future minimum sublease payments expected to be received under noncancellable subleases at the balance sheet date lease and sublease payments recognised as an expense in the period, with separate amounts for minimum lease payments, contingent rents, and sublease payments a general description of the lessee's significant leasing arrangements including, but not limited to: (i) the basis on which contingent rent payments are determined (ii) the existence and terms of renewal or purchase options and escalation clauses (iii) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt and further leasing for the purpose of applying the requirements of IAS 17, payments and other consideration required by an arrangement containing a lease are separated into those for the lease and those for other elements on the basis of their relative fair values. If a purchaser

14 12 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry concludes that it is impracticable to separate the payments reliably, in the case of an operating lease it treats all payments under the arrangement as lease payments for the purposes of complying with the disclosure requirements of IAS 17: (i) disclose those payments separately from minimum lease payments of other arrangements that do not include payments for non-lease elements (ii) state that the disclosed payments also include payments for non-lease elements in the arrangement. Airlines generally split the lease disclosures between aircraft and non aircraft leases as financial analysts and debt providers often use these disclosures to determine airline indebtedness after the notional capitalisation of aircraft operating lease commitments. As a consequence, the disclosures for aircraft leases need to be clear.

15 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 13 Appendix 1 Definitions of terms under IFRS A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease. A non-cancellable lease is a lease that is cancellable only: a) upon the occurrence of some remote contingency; b) with the permission of the lessor; c) if the lessee enters into a new lease for the same or an equivalent asset with the same lessor; or d) upon payment by the lessee of such an additional amount that, at inception of the lease, continuation of the lease is reasonably certain. The inception of the lease is the earlier of the date of the lease agreement and the date of commitment by the parties to the principal provisions of the lease. As at this date: a) a lease is classified as either an operating or a finance lease; and b) in the case of a finance lease, the amounts to be recognised at the commencement of the lease term are determined. The commencement of the lease term is the date from which the lessee is entitled to exercise its right to use the leased asset. It is the date of initial recognition of the lease (i.e. the recognition of the assets, liabilities, income or expenses resulting from the lease, as appropriate). The lease term is the non-cancellable period for which the lessee has contracted to lease the asset together with any further terms for which the lessee has the option to continue to lease the asset, with or without further payment, when at the inception of the lease it is reasonably certain that the lessee will exercise the option. Minimum lease payments are the payments over the lease term that the lessee is or can be required to make, excluding contingent rent, costs for services and taxes to be paid by and reimbursed to the lessor, together with: (a) for a lessee, any amounts guaranteed by the lessee or by a party related to the lessee; or (b) for a lessor, any residual value guaranteed to the lessor by: (i) the lessee; (ii) a party related to the lessee; or (iii) a third party unrelated to the lessor that is financially capable of discharging the obligations under the guarantee. However, if the lessee has an option to purchase the asset at a price that is expected to be sufficiently lower than fair value at the date the option becomes exercisable, for it to be reasonably certain, at the inception of the lease, that the option will be exercised, the minimum lease payments comprise the minimum payments payable over the lease term to the expected date of exercise of this purchase option and the payment required to exercise it. Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

16 14 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry Economic life is either: a) the period over which an asset is expected to be economically usable by one or more users; or b) the number of production or similar units expected to be obtained from the asset by one or more users. Useful life is the estimated remaining period, from the commencement of the lease term, without limitation by the lease term, over which the economic benefits embodied in the asset are expected to be consumed by the entity. Guaranteed residual value is: a) for a lessee, that part of the residual value that is guaranteed by the lessee or by a party related to the lessee (the amount of the guarantee being the maximum amount that could, in any event, become payable); and b) for a lessor, that part of the residual value that is guaranteed by the lessee or by a third party unrelated to the lessor that is financially capable of discharging the obligations under the guarantee. Unguaranteed residual value is that portion of the residual value of the leased asset, the realisation of which by the lessor is not assured or is guaranteed solely by a party related to the lessor. Initial direct costs are incremental costs that are directly attributable to negotiating and arranging a lease, except for such costs incurred by manufacturer or dealer lessors. Gross investment in the lease is the aggregate of: a) the minimum lease payments receivable by the lessor under a finance lease; and b) any unguaranteed residual value accruing to the lessor. Net investment in the lease is the gross investment in the lease discounted at the interest rate implicit in the lease. Unearned finance income is the difference between: a) the gross investment in the lease; and b) the net investment in the lease. The interest rate implicit in the lease is the discount rate that, at the inception of the lease, causes the aggregate present value of: a) the minimum lease payments; and b) the unguaranteed residual value to be equal to the sum of: i. the fair value of the leased asset; and ii. any initial direct costs of the lessor. The lessee's incremental borrowing rate of interest is the rate of interest the lessee would have to pay on a

17 Accounting for Leases of Aircraft Fleet Assets in the Global Airline Industry 15 similar lease or, if that is not determinable, the rate that, at the inception of the lease, the lessee would incur to borrow over a similar term, and with a similar security, the funds necessary to purchase the asset. Contingent rent is that portion of the lease payments that is not fixed in amount but is based on the future amount of a factor that changes other than with the passage of time (e.g. percentage of future sales, amount of future use, future price indices, future market rates of interest). Defeasance is the release of a debtor from the primary obligation for a debt. Legal defeasance is a defeasance in which the release of the debtor from the primary obligation is either acknowledged formally by the creditor or by a duly appointed trustee of the creditor, or established by legal judgement. In-substance defeasance is a defeasance other than a legal defeasance in which the debtor effectively achieves release from a primary obligation for a debt either by placing in trust assets which are adequate to meet the servicing requirements (both interest and principal) of the debt or by having a suitable entity assume responsibility for those servicing requirements.

18 Appendix 2 Classificaton of a lease The following chart represents examples of situations in which it could be inferred that substantially all of the risks and rewards of the ownership have been transferred. Lease agreement The lease transfers ownership of the asset to the lessee by the end of the lease term ( transfer of ownership ) The lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than the fair value ( bargain purchase option ) The lease term is for the major part of the economic life of the asset even if title is not transferred ( economic life ) At the inception of the lease the present value of the minimum lease payments amount to at least substantially all of the fair value of the leased asset ( present value ) The leased assets are of such a specialised nature that only the lessee can use them without minor modification no no no no yes yes yes yes yes no Operate lease Finance lease

19 KPMG s Global Airline practice contacts Martin Sheppard Australia Head of Aviation msheppard@kpmg.com.au Dr Ashley Steel United Kingdom Global Chair Transport ashley.steel@kpmg.co.uk Argentina Norbeto Cors ncors@kpmg.com Brazil Manuel Fernandes mfernandes@kpmg.com Canada Steve Beatty sbeatty@kpmg.ca Egypt Hossam Fahmy hfahmy@kpmg.com Finland Solveig Tornroos-Huhtamaki solveig.tornroos-huhtamaki@kpmg.fi France Philippe Arnaud parnaud@kpmg.com Germany Ulrich Maas umaas@kpmg.com Hong Kong Andrew Weir andrew.weir@kpmg.com.hk Hungary Andrea Sartori andreasartori@kpmg.com Ireland Sean O Keefe sean.okeefe@kpmg.ie Italy Marco Giordano mgiordano@kpmg.it Japan Toshio Ikeda toshio.ikeda@jp.kpmg.com Korea Peter C Kim pckim@kpmg.com Mexico Hector A Ramirez hramirez@kpmg.com Netherlands Herman van Meel vanmeel.herman@kpmg.nl New Zealand Paul Herrod pherrod@kpmg.com Norway Aage Seldal aage.seldal@kpmg.no Peru Jessica Oblitas joblitas@kpmg.com Russia Richard Glasspool richardglasspool@kpmg.com Singapore Wah Yeow Tan wahyeowtan@kpmg.com.sg South Africa Tshidi Mokgabudi tshidi.mokgabudi@kpmg.com.za Spain Miguel Angel Ibanez maibanez@kpmg.es Sweden Roland Nilsson roland.nilsson@kpmg.se Switzerland Roger Neininger rneininger@kpmg.com Taiwan Beryl Lin beryllin@kpmg.com.tw Thailand John Sim Jsim3@kpmg.com United States Chris Xystros cmxystros@kpmg.com

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