Ryanair 2006 Annual Report Download - page 50

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(Continued)
Notes
50
ANNUAL REPORT & FINANCIAL STATEMENTS 2006
15 FINANCIAL INSTRUMENTS
Group:
The group utilises financial instruments to reduce exposures to market risks throughout its business. Borrowings, cash and cash
equivalents and liquid investments are used to finance the group's operations. Derivative financial instruments are contractual
agreements with a value which reflects price movements in an underlying asset. The group uses derivative financial instruments,
principally jet fuel derivatives, interest rate swaps and forward foreign exchange contracts, to manage commodity risks, interest
rate risks, currency exposures and achieve the desired profile of borrowings and leases. It is the group's policy that no speculative
trading in financial instruments shall take place.
The main risks attaching to the group's financial instruments are discussed in more detail in the Operating & Financial Review
(Treasury Policy, Fuel, Currency and Interest Rate Risk Management) on page 14 and details of the derivatives employed to hedge
against these risks have been given in note 3.
(a) Commodity risk
The group’s exposure to price risk in this regard is primarily for jet fuel used in the normal course of operations however at year
end, the group had no jet fuel derivatives in place.
b) Maturity and interest rate risk profile of financial assets and financial liabilities
At March 31, 2006 the group had borrowings equivalent to 1,677.7m (2005: 1,414.9m) from various financial institutions provided
primarily on the basis of guarantees granted by the Export-Import Bank of the United States to finance the acquisition of 82 Boeing
737-800 "next generation" aircraft. The guarantees are secured with a first fixed mortgage on the delivered aircraft. The remaining
balance of long term debt relates to 4 aircraft held under finance leases, totalling 115.8m (2005: 120.6m) and borrowings to
finance aircraft simulators totalling 11.3m (2005:12.9m).
The maturity profile of the group’s financial liabilities at March 31, 2006 is as follows:
Financial liabilities: Weighted Year ended March 31
average 2007 2008 2009 2010 Thereafter Total
fixed rate (%) 000 000 000 000 000 000
Fixed rate
Secured long term debt 5.17% 54,174 57,363 60,758 64,379 207,902 444,576
Debt swapped from floating to fixed 5.91% 63,091 64,612 66,166 67,786 436,809 698,464
Secured long term debt after swaps 5.62% 117,265 121,975 126,924 132,165 644,711 1,143,040
Finance leases 2.70% - - - - 34,395 34,395
Total fixed rate debt 117,265 121,975 126,924 132,165 679,106 1,177,435
Floating rate
Secured long term debt 93,198 95,655 98,280 100,977 729,267 1,117,377
Debt swapped from floating to fixed (63,091) (64,612) (66,166) (67,786) (436,809) (698,464)
Secured long term debt after swaps 30,107 31,043 32,114 33,191 292,458 418,913
Finance leases 5,939 6,195 6,462 6,740 56,044 81,380
Total floating rate debt 36,046 37,238 38,576 39,931 348,502 500,293
Total financial liabilities 153,311 159,213 165,500 172,096 1,027,608 1,677,728