EasyJet 2012 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 2010 365 74 4 27 105
Transfer from property, plant and equipment – – – 6 6
Disposals – – – (8) (8)
At 30 September 2011 365 74 4 25 103
Amortisation
At 1 October 2010 – – 3 15 18
Charge for the year – – – 7 7
Disposals – – – (8) (8)
At 30 September 2011 – – 3 14 17
Net book value
At 30 September 2011 365 74 1 11 86
At 1 October 2010 365 74 1 12 87
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 approved by the Board for the period up to 2017, 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) 1,100
Exchange rates:
US dollar 1.58
Euro 1.27
Swiss franc 1.50
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.
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.
Accounts & other information
easyJet plc
Annual report and accounts 2012 81