EasyJet 2014 Annual Report Download - page 136

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134 easyJet plc Annual report and accounts 2014
Notes to the Company accounts continued
d) Reconciliation of profit for the year to cash generated from operations
2014
£ million
2013
£ million
Profit for the year 667 34
Adjustments for:
Finance and other similar income (12) (9)
Unrealised foreign exchange differences (10) 12
Tax charge 5 3
Dividends received (650) (40)
Operating cash flows before movement in working capital – –
Changes in working capital:
Decrease/(increase) in tax recoverable 10 (10)
Decrease in amounts due from subsidiary undertakings 538 52
Decrease in amounts due to subsidiary undertakings (253) (15)
295 27
e) 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 issued 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.
f) 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 27 of the consolidated accounts.