Woodside Petroleum Ltd|Financial Statements 127
E.1 Contingent liabilities and assets
Contingent liabilities at reporting date
Not otherwise provided for or disclosed in the
Contingent liabilities relate predominantly to actual or potential
claims on the Group for which amounts are reasonably estimated
but the liability is not probable and therefore the Group has
not provided for such amounts in these ﬁnancial statements.
Additionally, there are a number of other claims and possible
claims that have arisen in the course of business against entities
in the Group, the outcome of which cannot be foreseen at present
and for which no amounts have been included in the table above.
Operating lease commitments
Rents payable on non-cancellable operating
Within one year
After one year but not more than ﬁve years
Later than ﬁve years
Subject to the joint operation that utilises the lease, the Group’s
share of actual payments made under operating leases may be
lower than the value of commitments disclosed.
The Group leases assets for operations including vessels,
helicopters, cranes, land, mobile oshore drilling units, oce
premises and computers.
There are no restrictions placed upon the lessee by entering into
these leases. Renewals are at the option of the Group. Certain leases
contain a clause enabling upward revision of the rental charge on
an annual basis based on the consumer price index. The Group
made payments under operating leases of US$242 million during
the year (2017: US$227 million). A portion of this amount relates
to arrangements containing non-lease elements, which are not
practicable to separate.
Recognition and measurement
Operating lease payments are recognised as an expense in the
income statement on a straight-line basis over the lease term.
Lease incentives received are recognised in the income statement
as a part of total lease expense.
E.3 Employee benefits
(a) Employee beneﬁts
Employee beneﬁts for the reporting period are as follows:
Deﬁned contribution plan costs
Deﬁned beneﬁt plan expense
Recognition and measurement
The Group’s accounting policy for employee beneﬁts other than
superannuation is set out in Note D.4. The policy relating to share-
based payments is set out in Note E.3(c).
All employees of the Group are entitled to beneﬁts on retirement,
disability or death from the Group’s superannuation plan.
The majority of employees are party to a deﬁned contribution
scheme and receive ﬁxed contributions from Group companies
and the Group’s legal or constructive obligation is limited to
these contributions. Contributions to deﬁned contribution funds
are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payment is available.
The Group also operates a deﬁned beneﬁt superannuation
scheme, the membership of which is now closed. The net deﬁned
beneﬁt plan asset at 31 December 2018 was US$15 million
(2017: US$14 million).
(b) Compensation of key management personnel
Key management personnel (KMP) compensation for the ﬁnancial
year was as follows:
Short-term employee beneﬁts
Post employment beneﬁts
Long-term employee beneﬁts
(c) Share plans
The Group provides beneﬁts to its employees (including KMP) in
the form of share-based payments whereby employees render
services for shares (equity-settled transactions).
Woodside equity plan (WEP) and supplementary
Woodside equity plan (SWEP)
The WEP is available to all permanent employees, but since
1 January 2018 has excluded EIS participants
. The number of
Equity Rights (ERs) oered to each eligible employee will be
calculated with reference to salary and performance. The linking
of performance to an allocation allows the Group to recognise and
reward eligible employees for high performance. The ERs have no
further ongoing performance conditions after allocation, and do
not require participants to make any payment in respect of the ERs
at grant or at vesting. SWEP is available to a number of employees
identiﬁed as being retention critical. Participants do not make any
payment in respect of the ERs at grant or at vesting. Each ER entitles
the participant to receive a Woodside share on the vesting date
three years after the grant date.
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018