EasyJet 2012 Annual Report Download - page 104

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Accounts & other information
Notes to the Company accounts
continued
c) Reconciliation of operating profit to cash generated from operations
2012
£ million
2011
£ million
Operating profit 146 2
Adjustments for non-cash items:
Unrealised foreign exchange differences (15) 1
Changes in working capital:
Increase in amounts due from subsidiary undertakings (340) (19)
Increase / (decrease) in amounts due to subsidiary undertakings 263 (10)
54 (26)
d) Guarantees and contingent liabilities
The Company has given a formal undertaking to the Civil Aviation Authority to guarantee the payment and discharge of all liabilities of
easyJet Airline Company Limited, a subsidiary of the Company. The guarantee is required for that company to maintain its operating
licence under Regulation 3 of the Licensing of Air Carriers Regulations 1992.
The Company has issued a guarantee in favour of easyJet Airline Company Limited, a subsidiary undertaking, in relation to the
processing of credit card transactions, and also in respect of hedging transactions carried out according to treasury policy.
The Company has guaranteed the contractual obligations of easyJet Airline Company Limited and easyJet Leasing Limited, both
subsidiary undertakings, in respect of its contractual obligations to Airbus SAS in respect of the supply of Airbus 320 family aircraft.
The Company has guaranteed the repayment of borrowings that financed the acquisition of aircraft by subsidiary undertakings.
The Company has also guaranteed the payment obligations for the lease of aircraft by subsidiary undertakings.
The Company has guaranteed certain letters of credit which have been issued by a bank on behalf of subsidiary undertakings.
No amount is recognised on the Company statement of financial position in respect to any of these guarantees as it is not probable
that there will be an outflow of resources.
e) Related party transactions
Transactions with subsidiary undertakings, which principally relate to the provision of funding within the Group, are carried out on an
arm’s length basis. Outstanding balances are placed on intercompany accounts with no specified credit period, are unsecured, and bear
market rates of interest.
For full details of transactions and arrangements with easyJet’s largest shareholder, see note 26 of the Group accounts.
easyJet plc
Annual report and accounts 2012
102