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Overview Business review Governance Accounts Other information
easyJet plc
Annual report and accounts 2010
71
7 Goodwill and other intangible assets
Other intangible assets
Goodwill
£ million
Landing
rights
£ million
Contractual
rights
£ million
Computer
software
£ million
Total
£ million
Cost
At 1 October 2009 365.4 74.0 2.5 16.7 93.2
Additions – – 1.2 – 1.2
Transfer from property, plant and equipment – – – 10.1 10.1
At 30 September 2010 365.4 74.0 3.7 26.8 104.5
Amortisation
At 1 October 2009 – – 1.7 9.8 11.5
Charge for the year – – 0.7 5.5 6.2
At 30 September 2010 – – 2.4 15.3 17.7
Net book value
At 30 September 2010 365.4 74.0 1.3 11.5 86.8
At 1 October 2009 365.4 74.0 0.8 6.9 81.7
Other intangible assets
Goodwill
£ million
Landing
rights
£ million
Contractual
rights
£ million
Computer
software
£ million
Total
£ million
Cost
At 1 October 2008 365.4 72.6 2.5 12.6 87.7
Additions – 1.4 – 4.1 5.5
At 30 September 2009 365.4 74.0 2.5 16.7 93.2
Amortisation
At 1 October 2008 – – 0.7 6.4 7.1
Charge for the year – – 1.0 3.4 4.4
At 30 September 2009 – – 1.7 9.8 11.5
Net book value
At 30 September 2009 365.4 74.0 0.8 6.9 81.7
At 1 October 2008 365.4 72.6 1.8 6.2 80.6
easyJet has one cash-generating unit, being its route network. The recoverable amount of goodwill and other assets with indefinite
expected useful lives has been determined based on value in use calculations of the route network.
Pre-tax cash flow projections have been derived from the five-year strategic plan approved by the Board in November 2010, using the
following key assumptions:
Pre-tax discount rate (derived from weighted average cost of capital) 9–10%
Fuel price, per metric tonne, in US dollars 720
Exchange rates:
US dollar 1.50
Euro 1.20
Swiss franc 1.65
Both fuel price and exchange rates are volatile in nature, and the assumptions used represent management’s view of reasonable average
rates. Operating margins are sensitive to significant changes in these rates.