The National Shipping Company of Saudi Arabia (A Saudi Joint Stock Company) Notes to the Consolidated Financial Statements As of December 31, 2012 (in Thousands of Saudi Riyals)
6. Bareboat Lease Receivable, Net On January 30, 2009, National Chemical Carriers Ltd. Co. signed agreements with Odfjell to charter three vessels under a bareboat arrangement for a period of ten years with a purchase option after three years. These ships were delivered to Odfjell on February 1, 2009. The arrangement qualifies as a capital lease as it transfers to Odfjell substantially all the benefits and risks and also gives Odfjell a purchase option under the arrangement. The net bareboat lease receivable balance as of December 31 is summarized as follows:
Description
2012
2011
Future minimum lease payments
411,418
467,005
Unguaranteed residual value at the end of the lease term
247,875
247,875
659,293
714,880
Unearned income
(254,471)
(302,520)
Net bareboat lease receivable balance
404,822 412,360
The above amount is classified at December 31 as follows: Current
10,143
7,538
Non-current
394,679
404,822
Net bareboat lease receivable balance
404,822 412,360
The future minimum lease payments and unguaranteed residual value at the end of lease term to be received during the next five years and thereafter is as follows:
Description
2012
2011
Due within 12 months
57,313
55,586
Due within 1-2 years
61,245
57,313
Due within 2-3 years
65,351
61,245
Due within 3-4 years
69,649
65,351
Due within 4-5 years
73,564
69,649
Thereafter
332,171
405,736
Total
659,293 714,880
Income related to the above arrangement for the year ended December 31, 2012 amounted to SR 48.05 million (2011: SAR 48.82 million) and is included in operating revenues in the accompanying consolidated statement of income.
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