Ryanair 2016 Annual Report Download - page 185

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The table below shows, for all share option grants, the weighted-average assumptions used in the binomial lattice
model and the resulting weighted-average grant date fair value of share options granted in 2016:
Year ended
March 31, 2016
Fair value at grant date
2.62
Share price at grant date
11.38
Exercise Price
11.38
Dividend yield
3%
Volatility
25%
Range of risk free interest rates
0.3% - 0.4%
Expected term (years)
7 years
A blend of the historical and implied volatilities of the Company’s own ordinary shares is used to determine
expected volatility for share option granted. The weighted-average volatility is determined by calculating the weighted-
average of volatilities for all share options granted in a given year. The expected term of share option grants represents the
weighted-average period the awards are expected to remain outstanding. For share options granted in 2016, we estimated
the weighted-average expected term based on historical exercise data. The service period is five years.
The risk-free interest rate assumption was based on Eurozone zero-coupon bond instruments whose term was
consistent with the expected term of the share option granted. The expected dividend yield assumption was based on our
history and expectation of dividend payouts.
16. Other equity reserves
The total share based payments reserve at March 31, 2016 was €9.2 million (2015: €3.7 million; 2014: €9.1
million). The available-for-sale financial asset reserve at March 31, 2016 was €nil (2015: €291.4 million; 2014: €180.6
million). The treasury reserve amounted to negative €7.3 million at March 31, 2016 (2015: negative €3.2 million; 2014
€nil). The total cash-flow hedge reserve amounted to negative €300.6 million at March 31, 2016 (2015: positive €308.5
million; 2014: negative €83.2 million). Further details of the group’s derivatives are set out in Notes 5 and 11 to the
consolidated financial statements.
17. Analysis of operating revenues and segmental analysis
The Company is managed as a single business unit that provides low fares airline-related services, including
scheduled services, internet and other related services to third parties across a European route network. The Company
operates a single fleet of aircraft that is deployed through a single route scheduling system.
The Company determines and presents operating segments based on the information that internally is provided to
Michael O’Leary, CEO, who is the Company’s Chief Operating Decision Maker (CODM). When making resource
allocation decisions, the CODM evaluates route revenue and yield data, however resource allocation decisions are made
based on the entire route network and the deployment of the entire aircraft fleet, which are uniform in type. The objective
in making resource allocation decisions is to maximise consolidated financial results, rather than results on individual
routes within the network.
The CODM assesses the performance of the business based on the consolidated adjusted profit/(loss) after tax of
the Company for the year. This measure excludes the effects of certain income and expense items, which are unusual, by
virtue of their size and incidence, in the context of the Company’s ongoing core operations, such as the impairment of a
financial asset investment, accelerated depreciation related to aircraft disposals and one off release of ticket sale revenue.
All segment revenue is derived wholly from external customers and, as the Company has a single reportable
segment, inter-segment revenue is zero.