Annual Report 2010 in PDF - BBA Aviation

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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
19. Pensions and other post-retirement benef ts – continued United Kingdom North America Total 2010 2009 2010 2009 2010 2009 £m £m £m £m £m £m Changes to the fair value of scheme assets during the year Fair value of scheme assets at beginning of year 411.2 343.2 20.8 20.6 432.0 363.8 Expected return on assets 23.9 21.1 1.2 0.7 25.1 21.8 Actual employer contributions 2.8 3.2 2.9 1.7 5.7 4.9 Contributions by plan participants 0.5 0.6 – – 0.5 0.6 Net benefits paid out (23.6) (22.7) (3.1) (3.1) (26.7) (25.8) Actuarial (losses)/gains on assets (10.5) 65.8 0.8 3.1 (9.7) 68.9 Foreign currency exchange rate changes (if applicable) – – 0.5 (2.2) 0.5 (2.2) Fair value of plan assets at end of year 404.3 411.2 23.1 20.8 427.4 432.0 United Kingdom 2010 2009 £m £m North America 2010 2009 £m £m Actual return on scheme assets 13.4 86.9 2.0 3.8 15.4 90.7 United Kingdom 2010 2009 £m £m North America 2010 2009 £m £m Analysis of amounts recognised in SOCIE Total actuarial gains/(losses) recognised in year 14.1 (20.7) (0.6) 2.2 13.5 (18.5) Asset not recognised (5.2) 5.1 – – (5.2) 5.1 Movement in minimum funding liability (15.3) – – – (15.3) – (6.4) (15.6) (0.6) 2.2 (7.0) (13.4) Cumulative amount of actuarial gains/(losses) recognised in SOCIE (25.4) (39.5) (19.5) (18.9) (44.9) (58.4) A 1% increase in assumed medical cost trend rates would increase the aggregate charge in the income statement by £nil and increase the net liability by £0.1 million. A 1% decrease in assumed medical cost trend rates would reduce the aggregate charge in the income statement by £nil and reduce the net liability by £0.1 million. History of Asset Values, Def ned Benefts Obligation, Surplus/Defcits in Schemes and Experience Gains and Losses United Kingdom North America 2010 2009 2008 2007 2006 2010 2009 2008 2007 2006 £m £m £m £m £m £m £m £m £m £m Fair value of assets 404.3 411.2 343.2 456.6 452.9 23.1 20.8 20.6 21.5 24.2 Defined benefits obligation 399.1 425.4 338.1 391.0 464.2 41.9 39.8 43.9 31.8 34.0 Surplus/(deficit) 5.2 (14.2) 5.1 65.6 (11.3) (18.8) (19.0) (23.3) (10.3) (9.8) Experience (losses)/gains on scheme assets (10.5) 65.8 (123.0) (22.2) 1.4 0.8 3.1 (7.1) (0.4) 1.1 Experience (losses)/gains on scheme liablities (11.9) 18.9 (5.0) 60.4 (0.6) (1.0) 0.3 0.5 (0.5) (1.9) 2010 £m 2010 £m Total 2009 £m Total 2009 £m Consolidated Financial Statements — 117
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Annual Report 2010
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Directors’ Report 2 Overview 2 Gr
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Group Structure Revenue by business
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Revenue Revenue increased by 4% on
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Corporate Governance The Board beli
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Michael Harper (66) Chairman Simon
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Worldwide Business Jet and Turbopro
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Commercial Aviation Our commercial
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Each of the fve businesses has a cl
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Principal Risks and Risk Potential
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Return on Invested Capital (ROIC) M
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Proft before tax increased by 42% t
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Financial Summary 2010 2009 Inc/(de
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ASIG United States of America, Cari
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Directors’ Report — 27
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Revenue 2010 2009 Inc/(dec) 20091 I
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ASIG Focused on growth 32 — Direc
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Key Facts ASIG is a world leading i
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London Heathrow: the A380 is a doub
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Financial Summary 2010 2009 Inc/(de
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Legacy Support United States of Ame
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Directors’ Report — 43
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Revenue 2010 2009 Inc/(dec) 20091 I
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Legacy Support Flexible resources m
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Key Facts Legacy Support is a leadi
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Houston, Texas: a Legacy Support st
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APPH Delivering continuous improvem
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Key Facts APPH has a niche focus an
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Runcorn, UK: a Jas39 Gripen nose la
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CSR leadership Group-wide Providing
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The Group also launched its new par
Page 67 and 68: A signifcant proportion of our debt
Page 69 and 70: Suppliers Payment Policy Substantia
Page 71 and 72: The Board has a formal schedule of
Page 73 and 74: a. Remuneration Committee Compositi
Page 75 and 76: Guidance on Audit Committees. The A
Page 77 and 78: Directors’ Remuneration Report I
Page 79 and 80: The following chart shows the balan
Page 81 and 82: d. Longer-term performance incentiv
Page 83 and 84: Annualised total shareholder return
Page 85 and 86: e. Pension: policy and implementati
Page 87 and 88: Independent Auditor’s Report to t
Page 89 and 90: Consolidated Statement of Comprehen
Page 91 and 92: Consolidated Cash Flow Statement Op
Page 93 and 94: Accounting Policies Basis of Accoun
Page 95 and 96: Property, Plant and Equipment Prope
Page 97 and 98: Notes to the Consolidated Financial
Page 99 and 100: 2. Proft for the year Proft for the
Page 101 and 102: 5. Dividends On 21 May 2010, the 20
Page 103 and 104: 8. Intangible assets - continued Th
Page 105 and 106: 10. Investments in associates Cost
Page 107 and 108: 13. Trade and other payables Amount
Page 109 and 110: 16. Bank overdraft and loans - cont
Page 111 and 112: 17. Derivative fnancial instruments
Page 117: 19. Pensions and other post-retirem
Page 121 and 122: 21. Share capital and reserves Allo
Page 123 and 124: 21. Share capital and reserves - co
Page 125 and 126: 23. Cash fow from operating activit
Page 127 and 128: 26. Related party transactions Tran
Page 129 and 130: Company Balance Sheet 2010 2009 Not
Page 131 and 132: Leases Where assets are f nanced by
Page 133 and 134: 6. Creditors: amounts falling due w
Page 135 and 136: 10. Capital and reserves Details of
Page 137 and 138: Five Year Summary 2010 2009 2008 20
Page 139 and 140: This Annual Report is addressed sol
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