REG - Ryanair Holdings PLC - Annual Financial Report <Origin Href="QuoteRef">RYA.I</Origin> - Part 15
06/09/2014 22:39
- Part 15: For the preceding part double click ID:nRSd7552Nn
profit after income tax...................................... 522.8 569.3 502.6
Other segment information:
Depreciation ........................................................................................................... (351.8) (329.6) (309.2)
Finance income........................................................................................................ 16.5 27.4 44.3
Finance expense...................................................................................................... (83.2) (99.3) (109.2)
Capital expenditure................................................................................................. (505.8) (310.7) (317.6)
(99.3)
(109.2)
Capital expenditure.................................................................................................
(505.8)
(310.7)
(317.6)
At March 31, 2014 At March 31, 2013 At March 31, 2012
EM EM EM
Reportable segment assets (i).................................................... 8,551.8 8,721.8 8,851.3
Reportable segment assets (i)....................................................
8,551.8
8,721.8
8,851.3
(i) Excludes the available-for-sale financial asset.
Reconciliation of reportable segment profit or loss to consolidated profit after income tax is as follows:
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Total adjusted profit for reportable segment............................. 522.8 569.3 502.6
Other items of profit or loss;
One-off revenue adjustment (a)................................................. - - 57.8
Consolidated profit after income tax.................................... 522.8 569.3 560.4
57.8
Consolidated profit after income tax....................................
522.8
569.3
560.4
(a) The exceptional item in fiscal year 2012, relates to a one-off release of ticket sales revenue of E57.8 million,
net of tax, due to a change in accounting estimates relating to the timing of revenue recognition for unused passenger
tickets which was made as a result of the availability of more accurate and timely data obtained through system
enhancements.
Entity-wide disclosures:
Geographical information for revenue by country of origin is as follows:
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Ireland.......................................................................................................... 532.4 471.3 387.2
United Kingdom........................................................................................... 1,253.6 1,227.1 1,054.6
Other European countries............................................................................ 3,250.7 3,185.6 2,948.4
5,036.7 4,884.0 4,390.2
3,185.6
2,948.4
5,036.7
4,884.0
4,390.2
Ancillary revenues included in total revenue above comprise:
EM EM EM
Non-flight scheduled.................................................................................. 1,012.4 832.9 677.4
In-flight...................................................................................................... 117.3 109.8 106.7
Internet income.......................................................................................... 117.5 121.5 102.1
1,247.2 1,064.2 886.2
Internet income..........................................................................................
117.5
121.5
102.1
1,247.2
1,064.2
886.2
Non-flight scheduled revenue arises from the sale of rail and bus tickets, hotel reservations, car hire and other sources,
including excess baggage charges and administration fees, all directly attributable to the low-fares business.
All of the Company's operating profit arises from low-fares airline-related activities, its only business segment. The
major revenue earning assets of the Company are its aircraft, which are registered in Ireland and therefore profits accrue
principally in Ireland. Since the Company's aircraft fleet is flexibly employed across its route network in Europe, there
is no suitable basis of allocating such assets and related liabilities to geographical segments.
18 Staff numbers and costs
The average weekly number of staff, including the executive director, during the year, analysed by category, was as
follows:
Flight and cabin crew...................................................................... 8,706 8,280 7,656
Sales, operations, management and administration......................... 795 779 782
9,501 9,059 8,438
779
782
9,501
9,059
8,438
At March 31, 2014 the company had a team of 8,992 people (2013: 9,137; 2012: 8,388).
The aggregate payroll costs of these persons were as follows:
EM EM EM
Staff and related costs................................................................................... 441.5 412.3 395.0
Social welfare costs....................................................................................... 18.7 18.4 18.1
Other pension costs (a)................................................................................. 1.5 2.9 2.6
Share based payments (b)............................................................................. 1.9 2.0 (0.7)
463.6 435.6 415.0
Share based payments (b).............................................................................
1.9
2.0
(0.7)
463.6
435.6
415.0
(a) Costs in respect of defined-contribution benefit plans and other pension arrangements were E2.6 million in 2014
(2013: E2.1 million; 2012: E1.9 million) partially offset by a net credit of E1.1 million associated with defined-benefit
plans in 2014 (2013: costs of E0.8 million; 2012: costs of E0.7 million). (See Note 21 to the consolidated financial
statements).
(b) The net credit to the income statement in 2012 of approximately E0.7 million comprises a E2.5 million reversal of
previously recognised share-based compensation expense for awards that did not vest, offset by a charge of E1.8 million for
the fair value of various share options granted in prior periods, which are being recognised in the income statement in
accordance with employee services rendered.
19 Statutory and other information
EM EM EM
Directors' emoluments:
-Fees....................................................................................................................... 0.5 0.3 0.3
-Other emoluments, including bonus and pension contributions........................... 1.8 1.3 1.3
Total directors' emoluments.................................................................................. 2.3 1.6 1.6
Auditor's remuneration:
- Audit services (i).................................................................................................. 0.5 0.5 0.4
- Tax advisory services (ii)..................................................................................... 0.3 0.3 0.4
Total fees................................................................................................................ 0.8 0.8 0.8
Included within the above total fees, the following fees were payable to other KPMG firms outside of Ireland:
Audit services......................................................................................................... - - -
Tax services............................................................................................................ 0.2 0.2 0.3
Total fees................................................................................................................ 0.2 0.2 0.3
Depreciation of owned property, plant and equipment........................................ 333.9 311.2 294.3
Depreciation of property, plant and equipment held under finance leases................... 17.9 18.4 14.9
Operating lease charges, principally for aircraft..................................................... 101.5 98.2 90.7
294.3
Depreciation of property, plant and equipment held under finance leases...................
17.9
18.4
14.9
Operating lease charges, principally for aircraft.....................................................
101.5
98.2
90.7
(i) Audit services comprise audit work performed on the consolidated financial statements. In 2014, E1,000, (2013:
E1,000; 2012: E1,000) of audit fees relate to the audit of the Parent Company.
(ii) Tax services include all services, except those services specifically related to the audit of financial
statements, performed by the independent auditor's tax personnel, supporting tax-related regulatory requirements, and tax
compliance and reporting.
(a) Fees and emoluments - executive director
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Basic salary...................................................................................................... 1.0 0.8 0.8
Bonus (performance and target-related)........................................................... 0.8 0.5 0.5
1.8 1.3 1.3
0.5
0.5
1.8
1.3
1.3
During the years ended March 31, 2014, 2013, and 2012 Michael O'Leary was the only executive director.
(b) Fees and emoluments - non-executive directors
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Fees
David Bonderman...................................................................................... 0.10 - -
Michael Horgan......................................................................................... 0.04 0.03 0.03
Klaus Kirchberger(i).................................................................................. - 0.04 0.03
Charles McCreevy..................................................................................... 0.05 0.05 0.05
Declan McKeon......................................................................................... 0.05 0.05 0.05
Kyran McLaughlin.................................................................................... 0.05 0.05 0.05
Dick Milliken (ii)....................................................................................... 0.03 - -
Julie O'Neill .............................................................................................. 0.05 0.01 -
James Osborne........................................................................................... 0.05 0.05 0.05
Louise Phelan............................................................................................. 0.05 0.01 -
Paolo Pietrogrande (iii).............................................................................. - 0.02 0.03
0.47 0.31 0.29
Emoluments
Michael Horgan......................................................................................... 0.04 0.04 0.04
0.51 0.35 0.33
Michael Horgan.........................................................................................
0.04
0.04
0.04
0.51
0.35
0.33
(i) Klaus Kirchberger resigned on March 31, 2013
(ii) Dick Milliken joined the Board on July 26, 2013
(iii) Paolo Pietrogrande resigned on September 21, 2012
(c) Pension benefits
From October 1, 2008, Michael O'Leary was no longer an active member of a Company defined-benefit plan. The total
accumulated accrued benefit for Michael O'Leary at March 31, 2014 was E0.1 million (2013: E0.1 million; 2012 E0.1 million).
Pension benefits have been computed in accordance with Section 6.8 of the Listing Rules of the Irish Stock Exchange.
Increases in transfer values of the accrued benefits have been calculated as at the year-end in accordance with version 1.1
of Actuarial Standard of Practice PEN-11. No non-executive directors are members of the Company defined-benefit plan.
Michael O'Leary is a member of a defined-contribution plan. During the years ended March 31, 2014, 2013, and 2012 the
Company did not make contributions to the defined-contribution plan for Michael O'Leary. No non-executive directors are
members of the Company defined-contribution plan.
(d) Shares and share options
(i) Shares
Ryanair Holdings plc is listed on the Irish, London and NASDAQ stock exchanges.
The beneficial interests as at March 31, 2014, 2013 and 2012 of the directors in office at March 31, 2014 and of their
spouses and dependent children in the share capital of the Company are as follows:
No. of Shares at March 31,
2014 2013 2012
David Bonderman................................................................................. 7,655,671 9,230,671 9,230,671
Michael Horgan..................................................................................... 50,000 50,000 50,000
Kyran McLaughlin................................................................................ 200,000 200,000 200,000
Dick Milliken........................................................................................ 10,000 - -
Michael O'Leary................................................................................... 51,081,256 51,081,256 51,081,256
James Osborne...................................................................................... 310,256 310,256 510,256
Louise Phelan........................................................................................ 7,000 - -
-
-
(ii) Share options
The share options held by each director in office at the end of fiscal 2014 were as follows:
No. of Options at March 31,
2014 2013 2012
David Bonderman ........................................................................................... 25,000 25,000 25,000
Michael Horgan ............................................................................................... - 25,000 25,000
Kyran McLaughlin .......................................................................................... - 25,000 25,000
James Osborne ................................................................................................ 25,000 25,000 25,000
25,000
25,000
These options were granted to these directors at an exercise price of E4.96 (the market value at the date of grant) during
the 2008 fiscal year and are exercisable between June 2012 and June 2014.
Directors not referred to above held no shares or share options.
In the 2014 fiscal year the Company incurred total share-based compensation expense of Enil(2013: E0.01 million; 2012: E0.1
million) in relation to directors.
20 Finance expense
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Interest payable on bank loans wholly repayable after five years............................................................................................ 82.3 99.1 109.3
Interest arising on pension liabilities, net (see Note 21)............. 0.9 0.2 (0.1)
83.2 99.3 109.2
0.2
(0.1)
83.2
99.3
109.2
21 Pensions
The Company accounts for pensions in accordance with IAS 19, "Employee Benefits." The Company applied IAS 19 (amendment
2011), "Employee benefits" with effect from April 1, 2013. The Company has not restated previously recognised amounts for
the years ended March 31, 2013 and 2012 due to this change in accounting policy. The Company has determined that any
restatement of prior period amounts would not result in a material change in the previous recognised amounts.
The Company operates defined-benefit and defined-contribution schemes.
The Company funds the pension entitlements of certain employees through defined-benefit plans. At
March 31, 2014 there was one plan operated for eligible UK employees.
The Irish defined benefit plan was closed effective December 31, 2013. In the year ended March 31, 2014, the Company made a
final contribution of E12.5 million into the Irish defined benefit plan which represented a full and final settlement of
the Company's liability to contribute to the Irish defined benefit plan.
The UK and Irish schemes were closed to new entrants on January 1, 2000. In general, on retirement, a member is entitled
to a pension calculated at 1/60th of the final pensionable salary for each year of pensionable service, subject to a
maximum of 40 years. The UK plan is fully funded on a discontinuance basis and the related pension costs and liabilities
are assessed in accordance with the advice of a professionally qualified actuary. The investments of the UK plan at March
31, 2014 consisted of units held in independently administered funds. The most recent full actuarial valuations of the UK
plan was carried out at January 1, 2011, in accordance with local regulatory requirements using the projected unit credit
method, and the valuation reports are not available for public inspection.
A separate annual actuarial valuation has been performed for the purposes of preparing these financial statements. The
principal actuarial assumptions used for the purpose of this actuarial valuation were as follows:
At March 31,
2014 2013 2012
% % %
Discount rate used for Irish plan............................................................ - 4.30 5.00
Discount rate used for UK plan............................................................. 4.60 4.40 5.00
Return on plan assets for Irish plan....................................................... - 5.92 6.15
Return on plan assets for UK plan........................................................ 7.14 6.52 6.55
Rate of euro inflation.............................................................................. - 2.00 2.00
Rate of UK inflation............................................................................... 3.30 3.30 3.25
Future pension increases in Irish plan.................................................... - 0.00 0.00
Future pension increases in UK plan..................................................... 3.20 3.20 3.15
Future salary increases for Irish plan..................................................... - 1.75 2.00
Future salary increases for UK plan ..................................................... 1.75 1.75 2.25
1.75
2.25
The Company uses certain mortality rate assumptions when calculating scheme liabilities. The mortality assumptions of the
UK scheme have been based on the "SAPS" mortality table while the mortality assumptions of the Irish scheme for the years
ended March 31, 2013 and 2012 have been based on the mortality table 62%/70% PNM/FL00. Both mortality assumptions make
allowance for future improvements in mortality rates. Retirement ages for scheme members are 60 for pilots and 65 for other
staff.
The current life expectancies underlying the value of the scheme liabilities for the UK scheme are as follows:
At March 31,
2014 2013 2012
Retiring at age 60:
Male........................................................................................................................ 26.6 26.4 26.4
Female..................................................................................................................... 28.9 28.7 28.7
Retiring at age 65:
Male........................................................................................................................ 22.1 21.9 21.9
Female..................................................................................................................... 24.1 23.9 23.9
23.9
23.9
The amounts recognised in the consolidated balance sheet in respect of defined benefit plans are as follows:
At March 31,
2014 2013 2012
EM EM EM
Present value of benefit obligations........................................................ (11.5) (48.1) (42.2)
Fair value of plan assets......................................................................... 9.8 34.6 30.3
Present value of net obligations.............................................................. (1.7) (13.5) (11.9)
Related deferred tax asset....................................................................... 0.2 1.7 1.5
Net pension liability............................................................................... (1.5) (11.8) (10.4)
1.5
Net pension liability...............................................................................
(1.5)
(11.8)
(10.4)
The amounts recognised in the consolidated income statement in respect of our defined-benefit plans are as follows:
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Included in payroll costs
Service cost..................................................................................................... 0.8 0.9 0.7
Settlement gain................................................................................................ (1.9) - -
Net defined benefit pension (gain)/costs......................................................... (1.1) 0.9 0.7
Included in finance expense
Net finance expense........................................................................................ 0.9 0.2 (0.1)
Net finance expense........................................................................................
0.9
0.2
(0.1)
Analysis of amounts included in the Consolidated Statement of Comprehensive Income ("CSOCI");
Year ended Year ended Year ended
March 31, 2014 March 31, 2013 March 31, 2012
EM EM EM
Return on scheme assets................................................................................... 0.1 2.0 (0.8)
Experience gains/(loss) on scheme liabilities..................................................... - 0.3 (0.8)
Changes in assumptions underlying the present value of scheme (1.9) (3.6) (5.5)
liabilities........................................................................................................
Actuarial loss recognised in the CSOCI............................................................ (1.8) (1.3) (7.1)
Related deferred tax asset.................................................................................. 0.2 0.2 0.8
Net actuarial losses recognised in the CSOCI................................................... (1.6) (1.1) (6.3)
0.2
0.8
Net actuarial losses recognised in the CSOCI...................................................
(1.6)
(1.1)
(6.3)
Changes in the present value of the defined-benefit obligation of the plans are as follows:
At March 31,
2014 2013 2012
EM EM EM
Projected benefit obligation at beginning of year....................................... 48.1 42.2 32.9
Service cost................................................................................................ 0.8 0.9 0.6
Interest cost............................................................................................... 1.7 2.1 1.9
Plan participants' contributions................................................................ 0.2 0.3 0.3
Actuarial loss............................................................................................. 1.9 3.5 6.2
Benefits paid.............................................................................................. (0.7) (0.8) (0.2)
Foreign exchange rate changes.................................................................... 0.3 (0.1) 0.5
Liabilities extinguished on closure of Irish defined benefit plan................ (40.8) - -
Projected benefit obligation at end of year funded.................................... 11.5 48.1 42.2
Projected benefit obligation at end of year funded....................................
11.5
48.1
42.2
Changes in fair values of the plans' assets are as follows:
At March 31,
2014 2013 2012
EM EM EM
Fair value of plan assets at beginning of year........................................... 34.6 30.3 27.9
Expected return on plan assets................................................................. 0.4 1.9 2.0
Interest income.......................................................................................... 0.8 - -
Actuarial gain/(loss) on plan assets........................................................... 0.1 2.0 (0.8)
Employer contribution.............................................................................. 0.5 0.8 0.7
Settlement on closure of Irish defined benefit plan................................... 12.5 - -
Plan participants' contributions............................................................... 0.2 0.3 0.3
Benefits paid............................................................................................. (0.7) (0.8) (0.2)
Foreign exchange rate changes................................................................... 0.3 0.1 0.4
Assets distributed on closure of Irish defined benefit plan...................... (38.9) - -
Fair value of plan assets at end of year..................................................... 9.8 34.6 30.3
Fair value of plan assets at end of year.....................................................
9.8
34.6
30.3
The fair value of the plans' assets at March 31 of each year is analysed as follows:
At March 31,
2014 (i) 2013 (ii) 2012 (ii)
EM EM EM
Equities............................................................................................................... 1.9 26.8 22.5
Bonds................................................................................................................. 7.0 5.8 5.4
Property............................................................................................................. 0.1 0.7 0.7
Other assets........................................................................................................ 0.8 1.3 1.7
Total fair value of plan assets............................................................................ 9.8 34.6 30.3
Total fair value of plan assets............................................................................
9.8
34.6
30.3
(i) Amounts for the year ended March 31, 2014 relate to the UK plan only.
(ii) Amounts for the years ended March 31, 2013 and 2012 relate to both the Irish and UK plans combined.
The plans' assets do not include any of our own financial instruments, nor any property occupied by, or other assets used
by us.
The expected long-term rate of return on assets of 7.14% (2013: 6.52%; 2012: 6.55%) for the UK scheme was calculated based
on the assumptions of the following returns for each asset class: Equities 8.30% (2013: 7.50%; 2012: 7.50%); Corporate and
Overseas Bonds 4.30% (2013: 4.40%; 2012: 4.65%); and Other 3.65% (2013: 2.85%; 2012: 3.00%).
Since there are no suitable euro-denominated AA-rated corporate bonds, the expected return is estimated by adding a
suitable risk premium to the rate available from government bonds. The assumptions are based on long-term expectations at
the beginning of the reporting period and are expected to be relatively stable.
The history of the plans for the current and prior periods is as follows:
At March 31,
2014 2013 2012 2011 2010
EM EM EM EM EM
Difference between expected and actual return on assets............................................ 0.1 2.0 (0.8) (0.3) 5.6
Expressed as a percentage of scheme assets 1% 6% (3%) (1%) 22%
Experience (loss)/gain on scheme liabilities.. - 0.3 (0.8) 0.9 0.5
Expressed as a percentage of scheme liabilities....................................................... -% 1% (2%) 3% 1%
Total actuarial (losses)/gains........................ (1.8) (1.3) (7.1) 5.5 -
Expressed as a percentage of scheme liabilities....................................................... (17%) (3%) (17%) 17% 0%
(17%)
(3%)
(17%)
17%
0%
The Company expects to contribute approximately E0.2 million to our defined-benefit plan in 2014.
Defined-contribution schemes
The Company operates defined-contribution retirement plans in Ireland and the UK. The costs of these plans are charged to
the consolidated income statement in the period in which they are incurred. The pension cost of these defined-contribution
plans was E2.6 million in 2014 (2013: E2.1 million; 2012: E1.9 million).
22 Earnings per share
At March 31,
2014 2013 2012
Basic earnings per ordinary share (in euro cent).................................................. 36.96 39.45 38.03
Diluted earnings per ordinary share (in euro cent).............................................. 36.86 39.33 37.94
Number of ordinary shares (in Ms) used for EPS
Basic ................................................................................................................... 1,414.6 1,443.1 1,473.7
Diluted (a) ........................................................................................................... 1,418.2 1,447.4 1,477.0
1,443.1
1,473.7
Diluted (a) ...........................................................................................................
1,418.2
1,447.4
1,477.0
______________
(a) Details of share options in issue have been described more fully in Note 15 to the consolidated financial
statements. See below for explanation of diluted number of ordinary shares.
Diluted earnings per share takes account solely of the potential future exercise of share options granted under the
Company's share option schemes. For the 2014 fiscal year, the weighted average number of shares in issue of 1,418.2 million
includes weighted average share options assumed to be converted, and equal to a total of 3.6 million shares. For the 2013
fiscal year, the weighted average number of shares in issue of 1,447.4 million includes weighted average share options
assumed to be converted, and equal to a total of 4.3 million shares. For the 2012 fiscal year, the weighted average number
of shares in issue of 1,477.0 million includes weighted average share options assumed to be converted, and equal to a total
of 3.3 million shares.
23 Commitments and contingencies
Commitments
In March 2013, the Group entered into a contract with Boeing (the "2013 Boeing Contract") whereby the Group agree to
purchase 175 Boeing 737-800 "next-generation" aircraft over a five year period from calendar 2014 to 2018.
In April 2014, the Company agreed to purchase an additional 5 Boeing 737-800 "next-generation" aircraft for delivery in
fiscal year 2016 on the same terms and conditions as the 2013 Boeing Contract bringing the total "firm" new deliveries to
180 aircraft.
The table below details the firm aircraft delivery schedule at March 31, 2014 and March 31, 2013 for the Company pursuant
to the 2013 Boeing contracts.
Aircraft Delivered at March 31, 2014 Firm Aircraft Deliveries Firm Aircraft Deliveries Total "Firm" Aircraft Basic price per aircraft (U.S.$ million) Firm Aircraft Deliveries Fiscal 2013-2014 at March 31, 2013
Fiscal 2014/ 2015 Post Fiscal 2014/2015
2013 Contract.................... 0 11 164 175 78.0 -
Total.................................. 0 11 164 175 -
0
11
164
175
-
The "Basic Price" (equivalent to a standard list price for an aircraft of this type) for each aircraft governed by the 2013
Boeing contract will be increased by (a) an estimated U.S.$2.9 million per aircraft for certain "buyer furnished" equipment
the Company has asked Boeing to purchase and install on each of the aircraft, and (b) an "Escalation Factor" designed to
increase the Basic Price, as defined in the purchase agreement, of any individual aircraft by applying a formula which
reflects increases in the published U.S. Employment Cost and Producer Price indices between the time the Basic Price was
set and the period of 18 to 24 months prior to the delivery of such aircraft.
Boeing has granted Ryanair certain price concessions with regard to the Boeing 737-800 "next generation" aircraft as part
of the Boeing 2013 Contract. These take the form of credit memoranda to the Company for the amount of such concessions,
which the Company may apply toward the purchase of goods and services from Boeing or toward certain payments, other than
advance payments, in respect of the purchase of the aircraft under the various Boeing contracts.
Boeing and CFMI (the manufacturer of the engines to be fitted on the purchased aircraft) have also agreed to give the
Company certain allowances in addition to providing other goods and services to the Company on concessionary terms. These
credit memoranda and allowances will effectively reduce the price of each aircraft to the Company. As a result, the
effective price of each aircraft (the purchase price of the new aircraft net of discounts received from Boeing) will be
significantly below the Basic Price mentioned above. At March 31, 2014, the total potential commitment to acquire all 175
"firm" aircraft, not taking such increases and decreases into account, will be approximately U.S. $13.8 billion. At March
31, 2013, the total potential commitment was U.S. $13.8 billion to acquire all 175 "firm" aircraft.
Operating leases
The Company financed 76 of the Boeing 737-800 aircraft delivered between December 2003 and March 2014 under seven-year,
sale-and-leaseback arrangements with a number of international leasing companies, pursuant to which each lessor purchased
an aircraft and leased it to Ryanair under an operating lease. Between October 2010 and December 2012, 17 operating lease
aircraft were returned to the lessor at the agreed maturity date of the lease. At March 31, 2014 Ryanair had 51 operating
lease aircraft in the fleet. As a result, Ryanair operates, but does not own, these aircraft. Ryanair has no right or
obligation to acquire these aircraft at the end of the relevant lease terms. 18 of these leases are denominated in euro
and require Ryanair to make fixed rental payments over the term of the leases. 33 remaining operating leases are U.S.
dollar-denominated which require Ryanair to make fixed rental payments. The Company has an option to extend the initial
period of seven years on 34 of the 51 remaining operating lease aircraft as at March 31, 2014, on pre-determined terms.
This includes 3 operating lease arrangements which are due to mature during the year ended March 31, 2015 but have been
extended for a further 7 years. The following table sets out the total future minimum payments of leasing 51 aircraft
(2013: 59 aircraft; 2012: 59 aircraft), ignoring movement in interest rates, foreign currency and hedging arrangements, at
March 31, 2014, 2013 and 2012, respectively:
At March 31,
2014 2013 2012
Minimum payments Present value of Minimum payments Minimum payments Present value of Minimum payments Minimum payments Present value of minimum payments
EM EM EM EM EM EM
Due within one year....... 118.7 112.7 107.2 98.4 116.9 106.4
Due between one and five years............................... 292.1 246.5 342.4 258.0 328.0 232.5
Due after five years........ 61.9 44.4 94.5 53.3 160.9 87.4
Total............................... 472.7 403.6 544.1 409.7 605.8 426.3
87.4
Total...............................
472.7
403.6
544.1
409.7
605.8
426.3
Finance leases
The Company financed 30 Boeing 737-800 aircraft delivered between March 2005 and March 2014 with 13-year euro-denominated
Japanese Operating Leases with Call Options ("JOLCOs"). These structures are accounted for as finance leases and are
initially recorded at fair value in the Company's balance sheet. Under each of these contracts, Ryanair has a call option
to purchase the aircraft at a pre-determined price after a period of 10.5 years, which it may exercise.
The following table sets out the total future minimum payments of leasing 30 aircraft (2013: 30 aircraft; 2012: 30
aircraft) under JOLCOs at March 31, 2014, 2013 and 2012, respectively:
At March 31,
2014 2013 2012
Minimum payments Present value of Minimum payments Minimum payments Present value of Minimum payments Minimum payments Present value of minimum payments
EM EM EM EM EM EM
Due within one year....... 78.1 73.5 58.1 53.4 63.2 51.0
Due between one and five years............................... 408.6 250.0 359.1 260.9 318.9 243.6
Due after five years........ 248.4 83.9 365.7 146.5 484.0 217.2
Total minimum lease payments........................ 735.1 407.4 782.9 460.8 866.1 511.8
Less amounts allocated to future financing costs...... (18.2) - (20.3) - (60.1) -
Present value of minimum lease payments........................................ 716.9 407.4 762.6 460.8 806.0 511.8
-
(60.1)
-
Present value of minimum lease payments........................................
716.9
407.4
762.6
460.8
806.0
511.8
Commitments resulting from the use of derivative financial instruments by the Company are described in Notes 5 and 11 to
the consolidated financial statements.
Contingencies
The Company is engaged in litigation arising in the ordinary course of its business. Management does not believe that any
such litigation will individually or in aggregate have a material adverse effect on the financial condition of the Company.
Should the Company be unsuccessful in these litigation actions, management believes the possible liabilities then arising
cannot be determined but are not expected to materially adversely affect the Company's results of operations or financial
position.
In February 2004, the European Commission ruled that Ryanair had received illegal state aid from the Walloon regional
government in connection with its establishment of a low cost base at Brussels (Charleroi). Ryanair advised the regional
government that it believed no money was repayable as the cost of establishing the base exceeded the amount determined to
be illegal state aid. Ryanair also appealed the decision of the European Commission to the European Court of First Instance
("CFI"), requesting that the Court annul the decision on the basis that Ryanair's agreement at Brussels (Charleroi) was
consistent with agreements at similar privately owned airports and therefore did not constitute illegal state aid. The
Company placed E4.0 million in an escrow account pending the outcome of this appeal. In December 2008, the CFI annulled the
Commission's decision against Charleroi Airport and Ryanair was repaid the E4 million that the Commission had claimed was
illegal state aid. A further action taken by the Belgian government for E2.3 million has also been withdrawn.
Ryanair is facing similar legal challenges with respect to agreements with certain other airports. In January 2010, the
European Commission concluded the Bratislava state aid investigation with a finding that Ryanair's agreement with
Bratislava airport involved no aid. In July 2012 the European Commission found that Ryanair's arrangement with Tampere
airport contained no aid. In February 2014 the European Commission reached the same conclusion in respect of Marseille,
Aarhus and Berlin (Schönefeld) investigations. On July 23, 2014 the European Commission announced a 'no state aid'
decision in respect of Dusseldorf (Weeze) airport, as well as findings of state aid to Ryanair in its arrangements with
Pau, Nimes and Angouleme airports, ordering Ryanair to repay a total of approximately E9.7m of alleged aid. Ryanair will
appeal these 'aid' decisions to the EU General Court where proceedings are expected to take between 2 and 4 years. The
remaining fourteen investigations involving Ryanair and Lübeck, Alghero, Frankfurt (Hahn), Zweibrücken, Altenburg,
Klagenfurt, (Stockholm) Vasteras, Paris (Beauvais), La Rochelle, Carcassonne, Cagliari, Brussels (Charleroi), Girona and
Reusairports are ongoing and Ryanair currently expects that they will conclude mid to late 2014, with any European
Commission decisions appealable to the EU General Court.
State aid complaints by Lufthansa about Ryanair's cost base at Frankfurt (Hahn) have been rejected by German courts, as
have similar complaints by Air Berlin in relation to Ryanair's arrangement with Lubeck airport, but following a German
Supreme Court ruling on a procedural issue in early 2011, these cases will be re-heard by lower courts. In addition,
Ryanair has been involved in legal challenges including allegations of state aid at Alghero, Berlin (Schönefeld) and
Marseille airports. The Alghero case (initiated by Air One) was dismissed in its entirety in April 2011. The Berlin
(Schönefeld) case (initiated by Germania) was discontinued following the European Commission's finding in February 2014
that Ryanair's arrangement with the airport contained no state aid. The Marseille case was withdrawn by the plaintiffs
(subsidiaries of Air France) in May 2011.
The Company has also entered into a series of interest rate swaps to hedge against fluctuations in interest rates for
certain floating-rate financing arrangements. Cash deposits have been set aside as collateral for the counterparty's
exposure to risk of fluctuations on long-term derivative and other financing arrangements with Ryanair (restricted cash)
(see Note 9 to the consolidated financial statements for further details). Additional numerical information on these swaps
and on other derivatives held by the Company is set out in Notes 5 and 11 to the consolidated financial statements.
24 Note to cash flow statement
At March 31,
2014 2013 2012
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