Ryanair 2009 Annual Report Download - page 85
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85
Finance Income. Ryanair’s interest and similar income increased 33.3%, from €63.0 million in the
2007 fiscal year to €84.0 million in the 2008 fiscal year, primarily reflecting higher average interest rates
received on its deposits during the year, the impact of which was partially offset by lower average cash balances
on hand.
Finance Expense. Ryanair’s interest payable and similar charges increased 17.1%, from €82.9 million
in the 2007 fiscal year, to €97.1 million in the 2008 fiscal year, reflecting the increase in debt related to the
acquisition of additional Boeing 737-800 aircraft. These costs are expected to continue to increase as Ryanair
further expands its fleet.
Foreign Exchange Gains (Losses). Ryanair’s foreign exchange losses increased significantly to €5.6
million in the 2008 fiscal year, from €0.9 million in the 2007 fiscal year, primarily due to the negative impact of
changes in the U.K. pound sterling and U.S. dollar exchange rates against the Euro.
Taxation. The effective tax rate for the 2008 fiscal year was 11.0%, as compared to 3.4% in the 2007
fiscal year. The effective tax rate reflects the statutory rate of Irish corporation tax of 12.5%; the positive impact
of Ryanair.com (which benefits from a reduced corporation tax rate); and the continued benefit of Ryanair’s
Internet-related businesses. Profits from qualifying activities at Ryanair.com are currently levied at an effective
10% tax rate in Ireland. Ryanair.com will continue to be eligible for the 10% preferential tax treatment until the
scheduled expiration of its license in 2010. The effective tax rate for the 2007 fiscal year of 3.4% includes a
release of a tax contingency reserve of €34.2 million, which resulted in a benefit to the Company’s effective tax
rate that is not reasonably expected to recur.
SEASONAL FLUCTUATIONS
The Company’s results of operations have varied significantly from quarter to quarter, and
management expects these variations to continue. Among the factors causing these variations are the airline
industry’s sensitivity to general economic conditions and the seasonal nature of air travel. Ryanair typically
records higher revenues and income in the first half of each fiscal year ended March 31 than the second half of
such year.
RECENTLY ISSUED ACCOUNTING STANDARDS
Please see Note 1 to the consolidated financial statements included in Item 18 for information on
recently issued accounting standards that are material to the Company.