Annual Report 2010 in PDF - BBA Aviation

Financial statements Notes to the Consolidated Financial Statements – continued
85 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Consolidated
19. Pensions and other post-retirement benef ts – continued
A 0.25% decrease/increase in the assumed discount rate on the UK plan would increase/decrease the net surplus by approximately £8.0 million.
Financial Statements
The sensitivity of the defcit to a 0.25% decrease/increase in the assumed rate of future price infation would be broadly similar to a 0.25%
86 Consolidated Income
Statement
increase/decrease in the assumed discount rate.
87 Consolidated Statement of United Kingdom North America
Comprehensive Income
2010 2009 2008 2010 2009 2008
88
89
Consolidated Balance Sheet
Consolidated Cash Flow
Statement
Long-term expected return on assets (%)
Equities 8.5 8.8 8.1 8.5 9.0 8.1
90 Consolidated Statement of Government bonds 4.2 4.5 3.9 – – 2.8
Changes in Equity Corporate bonds 5.2 5.5 5.6 4.7 4.5 4.8
Property
8.5 8.8 7.1 – – –
Insurance policies
5.4 5.5 6.4 – – –
Other 4.1 5.7 7.1 2.8 3.3 1.4
91 Accounting Policies of
the Group
95 Notes to the Consolidated
Financial Statements
126 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Parent Company
Financial Statements
127 Company Balance sheet
128 Accounting Policies of
the Company
129 Notes to the Company
Financial Statements
134 Principal Subsidiary
Undertakings
The expected rates of return ref ect the Group’s best estimate of the investment returns (net of tax and expenses) that will be earned on each
asset class over the long term. The long-term rates of return on bonds and other investments are set in line with market yields available at the
balance sheet date. The long term-rate of return on equities is derived from considering current “risk free” rates of return with the addition of a
future “risk premium”. The overall expected return on assets in the analysis of the income statement is based on weighted average returns using
the above rates for each asset class, and taking into account the asset allocation in each plan.
United Kingdom North America Total
2010 2009 2010 2009 2010 2009
£m £m £m £m £m £m
135 Five Year Summary
Analysis of income statement charge
Current service cost 1.7 1.9 0.2 0.2 1.9 2.1
136 Shareholder Information Interest cost
Expected return on assets
22.8
(23.9)
21.0
(21.1)
2.2
(1.2)
2.3
(0.7)
25.0
(25.1)
23.3
(21.8)
(Gain)/loss due to settlements/curtailments and terminations (3.1) – 0.3 0.3 (2.8) 0.3
(Income)/expense recognised in income statement (2.5) 1.8 1.5 2.1 (1.0) 3.9
116 — Consolidated Financial Statements
Current and past service costs have been recognised in the income statement within administrative expenses. Net interest income has been
recognised within investment income. Settlement losses have been recognised within other operating expenses and curtailment gains have
been recognised within other operating income.
United Kingdom North America Total
2010 2009 2010 2009 2010 2009
£m £m £m £m £m £m
Changes to the present value of the def ned beneft obligation during the year
Defined benefit obligation at beginning of year 425.4 338.1 39.8 43.9 465.2 382.0
Current service cost 1.7 1.9 0.2 0.2 1.9 2.1
Interest cost 22.8 21.0 2.2 2.3 25.0 23.3
Contributions by plan participants 0.5 0.6 – – 0.5 0.6
Actuarial (losses)/gains on scheme liabilities (24.6) 86.5 1.4 0.9 (23.2) 87.4
Net benefits paid out (23.6) (22.7) (3.1) (3.1) (26.7) (25.8)
Gains due to settlements and curtailments (3.1) – 0.3 0.3 (2.8) 0.3
Foreign currency exchange rate changes – – 1.1 (4.7) 1.1 (4.7)
Defined benefit obligation at end of year 399.1 425.4 41.9 39.8 441.0 465.2