Aer Lingus 2012 Annual Report Download - page 89

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FINANCIAL STATEMENTS Aer Lingus Group Plc
ANNUAL REPORT 2012
87
The value of the consideration payable by DAA to Aer Lingus for the surrender is €22.2 million, plus interest payments. The consideration is
non-cash in nature and comprises €11.8 million of rental prepayments and €10.4 million of branding prepayments and licences to occupy
certain property owned by DAA.
The gain recognised is recorded net of a cash payment of €1.0 million to DAA on completion of the transaction, being full and final settlement
of any obligation which the Group may have to DAA in respect of the condition of the HOB site and miscellaneous professional fees.
The Group will continue to occupy the Head Office Building under a short term license from DAA to allow the Group to transfer to the new
office accommodation noted above in an organised and structured manner.
(h) Release of amounts from cash flow hedging reserve related to capital foreign exchange hedges originally associated with planned purchase
of three A330 aircraft and exercise in Q1 2011, of an option to convert those orders to three A350 aircraft. Due to significant uncertainty
regarding the Group's plans to take these aircraft, in accordance with IAS 39 Financial Instruments: Recognition and Measurement the
amounts previously held in reserves in respect of those forecast cash flows have been released from cash flow hedging reserve and due to the
significance of the amounts to the annual results, were categorised as exceptional.
(i) Gain arising from the revision of terms and conditions of membership of the Group's frequent flyer programme.
(j) Bid defence costs associated with a takeover bid from the Group's largest shareholder, Ryanair Holdings plc. The offer period under the
Takeover Rules (Republic of Ireland) commenced on 19 June 2012. As noted in Note 38, the European Commission announced on 27
February 2013 its decision to prohibit the takeover bid.
(k) During 2010 and 2011, the Group had a particular commercial exposure and assessed the probability of loss as more likely than not. An
impairment provision of €4.8 million was therefore established for this exposure during 2010 and 2011. At 31 December 2012, as a result
of a change in circumstances, the likelihood of loss is not considered to be probable and the impairment provision is no longer required. The
credit has been treated as an exceptional credit due to the size and unusual nature of the item, see Note 22.
(l) Other costs relate principally to professional fees incurred in relation to an ongoing review of the Group’s pension schemes.
10 Finance income and expense
2012 2011
€’000 €’000
Finance income
Interest on cash, cash equivalents and deposits 11,023 13,022
Interest income on loans and receivables 1,879 1,656
Amortisation of available-for-sale reserve 147 134
Finance income on post employment benefit assets 642 587
Unwinding of discounting on non-current prepayments 1,612 23
15,303 15,422
Finance expense
Interest expense on finance lease obligations 15,080 15,781
Unwinding of discounting on provisions 511 -
Interest expense on post employment benefit obligations 1,538 1,549
Miscellaneous 2-
17,131 17,330
Notes to the consolidated financial statements (continued)