Aer Lingus 2009 Annual Report Download - page 10

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Tax charge
There was a tax credit for the year of €24.8m
(2008: €12.2m) arising from an increase in
deferred tax assets due to losses incurred
during the year and the remeasurement
of existing corporation tax provisions.
Cash flow, cash and debt
Gross cash (loans and receivables, deposits
and cash and cash equivalents) decreased
by 31.3% during the year, to €828.5m
(31 December 2008: €1,206.8m).
During the year the Group made payments
totalling €158.8m for the delivery of two
A330 aircraft and deposits for future aircraft
deliveries. The Group obtained new lease
financing of €55.7m. The Group made
redundancy payments of €124.2m during the
year. Finance lease debt at 31 December 2009
was €492.6m (31 December 2008: €552.9m).
Fuel and currency hedging
To achieve greater certainty on costs we
manage our exposure to fluctuations in the
prices of fuel and foreign currency through
hedging. At 27 April 2010, our estimated fuel
requirements for the remainder of 2010 and
for 2011 were hedged as follows:
Remainder
of 2010
Full year
2011
% hedged 77% 31%
Average price
per tonne $762 $779
Our major foreign currency exposure is to the
US dollar. At 31 December 2009, our forward
purchases of US dollars comprised 72% of
the estimated trading requirements for 2010
at an average rate of €1=$1.48.
Principal risks and uncertainties
The Group is required to give a description
of the principal risks and uncertainties which
it faces. Risk management is a key part of the
Group’s business process. A corporate risk
assessment is undertaken on an ongoing basis
and it is reviewed by the Risk Committee of
the Board. The risk assessment process is a
key tool in identifying and managing business
risk. A corporate risk register is maintained
and workshops are attended by management
and executives representing the operational,
commercial and finance functions in the
business.
The principal risks and uncertainties for the
Group are set out below:
n Economy: The continuing recession in
the Group’s primary markets, in particular
the Group’s core Irish market, has negatively
impacted and may continue to negatively
impact the Group’s business.
Operating and Financial Review Aer Lingus Group Plc – Annual Report 2009