Ryanair 2004 Annual Report Download - page 43

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(Continued)
Notes 43
A N N U A L R E P O RT & F I N A N C I A L S T A T E M E N T S 2 0 0 4
16 INTEREST RATE RISK
Financial liabilities
The net interest rate risk profile of Ryanair’s financial liabilities at March 31, 2004 and March 31, 2003 was as follows:
2004 2003
Fixed Floating Total Fixed Floating Total
PRINCIPAL CURRENCY - EURO 000 000 000 000 000 000
Short term borrowings - 345 345 - 1,316 1,316
Current maturities of long term debt 77,578 2,759 80,337 63,291 - 63,291
Non-current maturities of long term debt 839,819 32,826 872,645 773,934 - 773,934
917,397 35,930 953,327 837,225 1,316 838,541
Average interest rates applicable to fixed rate financial liabilities shown above are as follows:
Weighted Average Weighted Average Weighted Average Weighted Average
years interest 2004 years interest 2003
remaining rate 000 remaining rate 000
Fixed euro denominated
Long term debt 10.3 5.59% 909,404 9.7 5.28% 828,233
Other euro debt 7.8 5.81% 7,993 9.0 5.81% 8,992
917,397 837,225
Alllong termeuro fixeddebtshownabove matures between financial years ending 2011and 2016(2003: 2011and 2015)andattracts
a range of fixedinterest rates of between 4.93% and 5.97% (2003: 4.93% and 5.60%).
Floating interest rates on financial liabilities are generally referenced to inter-bank interest rates (principally Euribor).
Financial assets
The group holds significant cash balances that are invested on a short-term basis. At March 31, 2004 all of the group’s cash and
liquid resources had a maturity of one yearorless andattracted a weighted average interest rate of 2.11%(2003: 2.79%).
Interest rates on financialassets are generally basedontheappropriate Libor, Euriborand Euribor-basedbank offered rates.
Interest rate related derivative arrangements
As explained in the Operating and Financial Review, the group’s objective is to reduce interest rate risk through a combination of
financial instruments which lock in interest rates on debt and by matching a proportion of floating rate assets with floating rate
liabilities. In line with this strategy, the group has enteredinto a series of interest rate swaps whereby it has effectively converted
almost all of its floating rate debt under each of its long term debt facilities into fixed rate debt. Loans for approximately 4% of
long term debt are not covered by such swaps and have therefore remained at floating rates linked to Euribor. The interest rate
exposure from these loans is hedged by a similar amount of cash on deposit at floating rates. Interest rate swaps have also been
used to convert floating rate rentalson various aircraft operating leases into fixed rate rentals.