Ryanair 2010 Annual Report Download - page 91
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89
acquisition of additional Boeing 737-800 aircraft. These costs are expected to continue to increase as Ryanair
further expands its fleet.
Foreign Exchange Gains (Losses). Ryanair recorded foreign exchange gains of 14.4 million in the
2009 fiscal year, as compared with foreign exchange losses of 15.6 million in the 2008 fiscal year, with the
different result being primarily due to the positive impact of changes in the U.K. pound sterling and U.S. dollar
exchange rates against the euro during the 2009 fiscal year.
Taxation. The tax credit of 111.3 million recorded in the 2009 fiscal year was primarily due to the
recognition of a deferred tax asset of 134.3 million in respect of net operating losses incurred and available to
carry-forward to future periods. The recoverability of the deferred tax asset is based on future income forecasts
which demonstrate that it is more likely than not that future profits will be available in order to utilize the
deferred tax asset. The deferred tax asset’s recoverability is not dependent on material improvements over
historical levels of pre-tax income, material changes in the present relationship between income reported for
financial and tax purposes, or material asset sales or other non-routine transactions. The effective tax rate for the
2009 fiscal year was a tax benefit of (6.3%), as compared to the effective tax rate of 11.0% in the 2008 fiscal
year. The effective tax rate reflects the statutory rate of Irish corporation tax of 12.5%, the positive impact of the
reduced rates tax applicable to Ryanair.com and other Internet-related businesses and the loss due to the
impairment of the Company’s available-for-sale financial asset (which is not subject to corporation tax).
SEASONAL FLUCTUATIONS
The Company’s results of operations have varied significantly from quarter to quarter, and
management expects these variations to continue. Among the factors causing these variations are the airline
industry’s sensitivity to general economic conditions and the seasonal nature of air travel. Ryanair typically
records higher revenues and income in the first half of each fiscal year ended March 31 than the second half of
such year.
RECENTLY ISSUED ACCOUNTING STANDARDS
Please see Note 1 to the consolidated financial statements included in Item 18 for information on
recently issued accounting standards that are material to the Company.