Qantas 2013 Annual Report Download - page 135

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133
QANTAS ANNUAL REPORT 2013
The Qantas Brands CGU and the Jetstar Group CGU have goodwill and other intangible assets with indenite useful lives as follows:
Qantas Group
2013
$M
2012
$M
Goodwill
Qantas Brands 66 17
Jetstar Group 131 129
197 146
Other intangible assets with indenite useful lives
Qantas Brands 35
35
Jetstar Group 22
20
57 55
The recoverable amounts of CGUs were determined based on their value in use. The value in use was determined by discounting
the future cash ows forecast to be generated from the continuing use of the units and were based on the following assumptions:
Assumption How Determined
Cash Flows Cash ows were projected based on the Financial Plan covering a three-year period. Cash ows to determine
a terminal value were extrapolated using a constant growth rate of 2.5 per cent per annum, which does not
exceed the long-term average growth rate for the industry.
Cash outows include capital expenditure for the purchase of aircraft and other property, plant and equipment.
These do not include capital expenditure that enhances the current performance of assets and related cash
ows have been treated consistently.
Discount Rate A pre-tax discount rate of 10.5 per cent per annum has been used in discounting the projected cash ows of the
Qantas Brands CGU and the Jetstar Group CGU, reecting a market estimate of the weighted average cost of
capital of the CGUs (2012: 10.5 per cent per annum). The discount rates are based on the risk-free rate for the
ten-year Australian Government Bonds adjusted for a risk premium to reect both the increased risk of investing
in equities and the risk of the specic CGU.
Fuel The fuel into-plane price is assumed to be US$127 per barrel (2012: US$129) and was set with regard to the forward
fuel curve and commodity analyst expectations.
Currency The US$:A$ exchange rate is assumed to be $0.96 (2012: $0.97).
25. Share-based Payments
The Deferred Share Plan (DSP) Terms and Conditions were approved by shareholders at the 2002 AGM. The DSP governed equity
benets to Executives within the Qantas Group made prior to 30 June 2010. There have been no modications to the DSP Terms and
Conditions during the year.
Equity benets to Executives made after 1 July 2010 are governed by the Employee Share Plan (ESP) Trust Deed, the Short Term
Incentive Plan (STIP) Terms and Conditions and the Long Term Incentive Plan (LTIP) Terms and Conditions which were approved by
the Qantas Remuneration Committee Chairman under Board Delegation on 12 August 2010.
Further details regarding the operation of equity plans for Executives are outlined in the Directors’ Report from pages 76 to 96.
The total equity settled share-based payment expense for the year was $20 million (2012: $31 million). The total cash settled
share-based payment expense for the year was $1 million (2012: $4 million).