EasyJet 2014 Annual Report Download - page 28

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26 easyJet plc Annual report and accounts 2014
Financial review continued
Shareholders’ equity increased by £155 million driven by the profit for the year, offset partially by payment of the ordinary
and special dividends.
The net book value of property, plant and equipment increased by £262 million driven principally by the acquisition of nine
A320 family aircraft, and pre-delivery payments relating to aircraft purchases and life-limited parts.
Reconciliation of net cash flow to movement in net cash
2014
£ million
2013
£ million
Change
£ million
Cash and cash equivalents 424 1,013 (589)
Money market deposits 561 224 337
985 1,237 (252)
Bank loans (377) (484) 107
Finance lease obligations (186) (195) 9
(563) (679) 116
Net cash 422 558 (136)
Net cash at 30 September 2014 was £422 million compared with net cash of £558 million at 30 September 2013, with
the reduction of £136 million driven mainly by the special dividend payment of £175 million. After allowing for the impact
of aircraft operating leases, adjusted net debt has increased by £290 million to £446 million. As a result, gearing has
increased to 17% at 30 September 2014.
GOING CONCERN
easyJet’s business activities, together with factors likely to affect its future development and performance, are described
in this strategic report on pages 2 to 51. Principal risks and uncertainties facing the Group are described on pages 28 to
35. Note 23 to the accounts sets out then Group’s objectives, policies and procedures for managing its capital and
provides details of the risks related to financial instruments held by the Group.
At 30 September 2014, the Group held cash and cash equivalents of £424 million and money market deposits of
£561 million. Total debt, which is free of financial covenants, was £563 million, with £91 million due for repayment in the
year to 30 September 2015.
Net current liabilities at 30 September 2014 were £159 million but included unearned revenue (payments made by
customers for flights scheduled post year end) of £572 million.
The Group is exposed to fluctuations in jet fuel prices and US dollar and euro exchange rates. The Group’s policy is to
hedge between 65% and 85% of estimated exposures 12 months in advance, and between 45% and 65% of estimated
exposures from 13 months up to 24 months in advance. The Group was compliant with this policy at 17 November 2014.
After making enquiries, the Directors have a reasonable expectation that the Company and Group will be able to
operate within the level of available facilities and cash and deposits for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing these accounts.
Chris Kennedy
Chief Financial Officer