Annual Report 1999 in PDF - Aer Lingus

AER LINGUS GROUP PLCMovements on the Employee Share Participation Scheme from inception are as follows:Number of CashSharesMillionemMaximum entitlement 12.2 15.5Distributions made:1996 (in respect of 1995) (2.7) (0.7)1997 (in respect of 1996) (3.4) (0.8)1998 (in respect of 1997) (4.1) (0.6)1999 (in respect of 1998) (2.0) (3.7)Balance available for distribution Nil 9.7Following the announcement by the Irish Government on 14 December, 1999 that a decision had been taken that therewould be an Initial Public Offering (IPO) of the Company’s shares, discussions have taken place between employeerepresentatives, the Departments of Public Enterprise and Finance, and the Company on the establishment of anEmployee Share Ownership Plan (ESOP). Agreement has been reached on the terms of the ESOP, one of which is that theremaining balance on the Employee Share Participation Scheme (e9.66 million) will be utilised to partly fund thepurchase of shares to be held on behalf of the ESOP. Full provision has been made in these accounts for the amountpayable of e9.66 million, e3.67 million of which is recorded as a charge against operating profit representing the shareof profits for 1999. The remaining balance, e5.99 million, has been included as an exceptional charge.21. PensionsThe Group operates a number of externally funded defined benefit pension schemes for the majority of its employees.Regular actuarial valuations are carried out, normally every three years, in respect of the schemes. The latest actuarialreports, based on valuations at dates ranging from 31 March, 1997 to 01 January, 1999, were completed by independentactuaries and disclosed the schemes to have a surplus of assets over liabilities. The principal actuarial method used wasthe Aggregate Method which involved determining appropriate future Group contribution rates designed to fund theprojected liabilities of the schemes over the remaining working lifetime of the current members. The primary financialassumption underlying the actuarial valuations was that the yield on the schemes’ investments will earn a real rate ofinvestment return of 2% per annum over general salary inflation for members. No explicit provision was made for futurepension increases. The total market value of the assets of the schemes at the valuation dates was e1,170 million and thelevel of funding was 117%. Actuarial reports are not available for public inspection.The Group’s pension contributions charged for the year were e12.1 million (1998 - e13.3m), based on rates as advisedby the actuaries. An amount of e3.8 million (1998 - e3.2m) is included in Creditors, being the excess of theaccumulated pension cost together with other pension liabilities over the amounts paid to the schemes at 31 December,1999.22. Guarantees and Other Financial Commitments(a)Capital commitmentsAt 31 December, 1999 the Group had capital commitments as follows:1999 1998e000e000Contracted for but not provided- Aircraft and equipment 219,037 316,326- Other 11,687 10,915Authorised but not contracted for- Aircraft and equipment - 359- Other 1,230 4,442231,954 332,04243