Aer Lingus 2014 Annual Report Download - page 27

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hedging. The cash flows in respect of these derivatives are expected to occur as they mature over the next 18 months with the income
statement impacted as the hedged transactions occur.
At 31 December 2014 our estimated fuel requirements for 2015 and 2016 were approximately 515,000 and 517,000 metric tonnes in each
year respectively which were hedged as follows:
Fuel hedging
2015
2016
% expected fuel requirement hedged
90%
21%
Average price per tonne US$ (excluding into-plane costs)
830
845
Currency hedging
Our main foreign currency exposure is in US$. Our US$ denominated sales provide us with a natural currency hedge, however there remains
a net shortfall due to a number of US$ denominated costs such as fuel, aircraft hire and certain maintenance costs.
At 31 December 2014, Aer Lingus had bought US$117.0 million for 2015 at an average rate of US$1.35. In addition we sold forward
GBP£62 million for 2015 at an average rate of GBP£0.84.
US$ hedging
2015
2016
Forward purchases of US$ (US$ million)
117
14
Average rate (US$ to EUR)
1.35
1.38
EU emissions trading
The EU emissions trading system (“EU ETS”) became effective for airlines from 1 January 2012 requiring that all flights departing from or
arriving at EU airports attract a charge for a portion of their carbon emissions. This charge is to be met by submission to the EU of “carbon
allowances”, and aircraft operators have been provided with a portion of their allowance requirement as a “free” allocation based upon their
share of total EU activity in 2010. On 21 January 2014 the Transport Committee of the European Parliament voted in favour of extending the
2012 moratorium on the ETS scheme in respect of flights which were not entirely within the EU. This moratorium was agreed to continue
until the end of 2016 and requires a further vote by the EU to pass into law. Aer Lingus is compliant with EU ETS derogated requirements
and has received free allowances equivalent to approximately 70% of its 2014 requirement. The balance of the 2014 requirement (i.e.
approx. 30%) was purchased for €1.2 million.
A portion of the Aer Lingus carbon allowances for 2015 has been purchased already, and assuming a derogated scheme is in place and
associated free allocation, we estimate that the ETS cost of compliance in 2015 would be circa €1.7 million based on a blended carbon prices
of €6.50 per tonne at the reporting date.
Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent by the weighted average number of
shares in issue during the year, excluding treasury shares.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. As at 31 December 2014, dilutive potential ordinary shares relate to share awards and options granted that
have satisfied specific performance conditions as set out in the underlying award or option agreement. In accordance with IAS 33.41
potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease profit per share or
increase loss per share from continuing operations.
Earnings per share
2014
2013
(Loss)/profit attributable to owners of the parent (€ m)
(95.8)
34.1
Weighted average number of ordinary shares in issue ('000s)
532,633
531,822
Basic and diluted (loss)/profit per share (cent per share)
(18.0)
6.4
Weighted average number of ordinary shares in issue ('000s)
532,633
531,822
Dilutive effect of options and long term incentive plan ('000s)
-
4,597.0
Weighted average number of ordinary shares for diluted earnings per share ('000s)
532,633
536,419
2014 balance sheet movements:
The Group’s balance sheet remains strong with net assets of €660.6 million at 31 December 2014 (December 2013: €852.8 million).
Retained earnings of €334.7 million, decreased by €124.8 million following the once-off IASS pension provision of €190.7 million.