EasyJet 2011 Annual Report Download - page 83

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Other intangible assets
Goodwill
£ million
Landing
rights
£ million
Contractual
rights
£ million
Computer
software
£ million
Total
£ million
Cost
At 1 October 2009 365 74 3 17 94
Additions – – 1 – 1
Transfer from property, plant and
equipment – – – 10 10
At 30 September 2010 365 74 4 27 105
Amortisation
At 1 October 2009 – – 2 10 12
Charge for the year – – 1 5 6
At 30 September 2010 – – 3 15 18
Net book value
At 30 September 2010 365 74 1 12 87
At 1 October 2009 365 74 1 7 82
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 strategic plan for the period up to 2015 approved by
the Board, using the following key assumptions:
Pre-tax discount rate (derived from weighted average cost of capital) 9–10%
Fuel price (US dollars per metric tonne) 1,060
Exchange rates
US dollar 1.60
Euro 1.15
Swiss franc 1.30
Both fuel price and exchange rates are volatile in nature, and the assumptions used represent management’s
view of reasonable average rates and are derived from recent market information. Operating margins are
sensitive to significant changes in these rates.
Cash flow projections beyond the forecast period have been extrapolated using growth rate scenarios ranging
from zero up to an estimated average of long-term economic growth rates for the principal countries in which
easyJet operates. No impairment resulted from any of these scenarios.
No reasonably possible combination of changes to the key assumptions above would result in the carrying value
of the cash-generating unit exceeding its recoverable amount.
easyJet plc
Annual report
and accounts 2011
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81