Annual Report 1999 in PDF - Aer Lingus

AER LINGUS GROUP PLCNotes to the Consolidated AccountsYear ended 31 December, 19991. Prior year adjustmentThe accounting policy for recording foreign currency aircraft debt and the related aircraft was changed in 1999. In prioryears, aircraft which were financed in whole or in part by foreign currency loans or finance leases were regarded,together with the related liabilities, as separate groups of assets and liabilities and accounted for in foreign currency.These foreign currency amounts were translated to the reporting currency at the end of each financial year at the yearend exchange rates and the net exchange differences were taken to reserves.The policy was changed in 1999 and aircraft, regardless of how financed, are now recorded in euros at the date ofacquisition and gains or losses on foreign currency loans or finance leases which finance such aircraft are taken to theprofit and loss account as they occur.The effect of the changes in policy is to increase operating profit in 1998 by e6.4 million, comprising e2.1 million inrespect of the elimination of the depreciation charge on cumulative foreign exchange differences and e4.3 million inrespect of a gain on foreign currency loans and finance leases. The effect of the changes in 1999 is to reduce operatingprofit in 1999 by e9.8 million, comprising a loss of e12.2 million on foreign currency loans and finance leases, offset bye2.4 million in respect of the elimination of the depreciation charge on cumulative foreign exchange differences.The effect of the changes in policy on the consolidated balance sheet is to reduce the previously reported net book valueof tangible fixed assets and shareholders’ funds at 31 December, 1998 by e23.7 million.2. Turnover and Operating ProfitContinuing Discontinued 1999 Continuing Discontinued 1998TotalTotale000 e000 e000 e000 e000 e000TurnoverPassenger and Cargo Services- Normal 1,134,224 40,444 1,174,668 1,011,720 44,222 1,055,942- Exceptional 33,013 - 33,013 - - -Airline Services - - - - 88,656 88,6561,167,237 40,444 1,207,681 1,011,720 132,878 1,144,598Cost of Sales 786,754 37,732 824,486 713,880 109,674 823,554Other Operating ExpensesSelling and Marketing- Normal 170,055 - 170,055 147,743 2,117 149,860- Exceptional 2,793 - 2,793 - - -Administrative 105,793 129 105,922 83,137 15,050 98,187Distribution - - - - 1,592 1,592Employee Participation- Normal 2,564 - 2,564 7,248 - 7,248- Exceptional 5,993 - 5,993 - - -287,198 129 287,327 238,128 18,759 256,887Operating Profit 93,285 2,583 95,868 59,712 4,445 64,157Segmental disclosure of turnover by source and destination, and the results and net assets of the Group are not providedas the Directors are of the opinion that disclosure of such information would be prejudicial to the interests of the Group.32