Ryanair 2011 Annual Report Download - page 90

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The Company’s net cash used in investing activities in fiscal years 2011 and 2010 totaled 1474.0
million and 11,549.1 million, respectively, primarily reflecting the Company’s capital expenditures, and
investment of cash with maturities of greater than three months, as described in more detail below.
The Company’s net cash provided by financing activities totaled 1238.1 million in the 2011 fiscal year
and 1572.3 million in the 2010 fiscal year, largely reflecting the receipt of proceeds from long-term borrowings
of 1991.4 million and 1788.1 million in fiscal years 2011 and 2010, respectively, offset in part by repayments of
long-term borrowings of 1280.7 million and 1230.3 million in fiscal years 2011 and 2010, respectively and the
payment of a 1500.0 million special dividend to shareholders in fiscal year 2011.
Capital Expenditures. The Company’s net cash outflows for capital expenditures in fiscal years 2011
and 2010 were 1897.2 million and 1997.8 million, respectively. Ryanair has funded a significant portion of its
acquisition of new Boeing 737-800 aircraft and related equipment through borrowings under facilities provided
by international financial institutions on the basis of guarantees issued by Ex-Im Bank. At March 31, 2011,
Ryanair had a fleet of 272 Boeing 737-800 aircraft, the majority of which (185 aircraft) were funded by Ex-Im
Bank-guaranteed financing. Other sources of on-balance-sheet aircraft financing utilized by Ryanair are
Japanese Operating Leases with Call Options (“JOLCOs”), which are treated as finance leases (30 of the aircraft
in the fleet as of March 31, 2011) and commercial debt financing (6 of the aircraft in the fleet as of March 31,
2011). 51 Boeing 737-800 aircraft in Ryanair’s fleet at March 31, 2011 were financed through operating lease
arrangements. Of the 50 new Boeing 737-800 aircraft which Ryanair took delivery of between April 1, 2010 and
March 31, 2011, 10 were financed through JOLCO’s, 6 through sale-and-leaseback financings and the
remainder through Ex-Im Bank guaranteed-financing. Ryanair has generally been able to generate sufficient
funds from operations to meet its non-aircraft acquisition-related working capital requirements. Management
believes that the working capital available to the Company is sufficient for its present requirements and will be
sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the 2012
fiscal year.
The table on the following page summarizes the delivery schedule for the Boeing 737-800 aircraft
Ryanair has purchased, or is required to purchase, under its past and current contracts with Boeing, including
through the exercise of purchase options. These Boeing 737-800s are identical in all significant respects, having
189 seats and the same cockpit and engine configuration. The table also provides details of the “Basic Price”
(equivalent to a standard list price for an aircraft of this type) for each of these aircraft. The Basic Price for each
of the firm-order aircraft to be delivered pursuant to the 2005 Boeing contract, as well as for each of the firm-
order aircraft that remained to be delivered and purchase options outstanding under the prior contracts at
January 1, 2005, will be increased by (a) an estimated $900,000 per aircraft for certain “buyer furnished”
equipment the Company has asked Boeing to purchase and install on each of the aircraft, and (b) an “Escalation
Factor” designed to increase the Basic Price of any individual aircraft to reflect increases in the published U.S.
Employment Cost and Producer Price indices from the time the Basic Price is set through the time six months
prior to the delivery of such aircraft. The Basic Price is also subject to decrease to take into account certain
concessions granted to the Company by Boeing pursuant to the terms of the contracts. These concessions take
the form of credit memoranda, which the Company may apply towards the purchase of goods and services from
Boeing or towards certain payments in respect of the purchase of the aircraft. These credit memoranda are
generally incorporated into Boeing’s final aircraft invoices and thus reduce the amount paid by Ryanair for
aircraft. Boeing and CFM International S.A. (the manufacturer of the CFM56-7B engines that power the Boeing
737-800 aircraft) have also agreed to give the Company certain allowances for promotional and other activities,
as well as provide other goods and services to the Company on concessionary terms. As a result of credit
memoranda received from Boeing, the effective price of each aircraft purchased in the past has been, and the
effective prices of aircraft to be delivered in the future are expected to be, significantly below the unadjusted
Basic Prices in the table on the following page.