3rd Quarter & 9 Months Results - Profits Up 33%

Ryanair Holdings PLC 8 February 2000 RYANAIR ANNOUNCES RECORD 3RD QUARTER RESULTS Profits up 33% as 'low fares' and new routes continue to thrive Ryanair Holdings Plc today (8 February, 2000) announced record financial results for the quarter ended December 31, 1999. Total revenues grew by 35% to £70.6m, reflecting a 17% increase in passenger volumes to 1.4m, an increase in average yields due to a longer sector length, and the strength of Sterling. Operating expenses increased by 36% which, as expected, was fractionally ahead of revenue growth reflecting the increased costs (primarily staff and airport costs) associated with the growth of the airline, and the launch of our eighth new route. As a result profits increased by 33% to a new record of £12.6m for the quarter. Summary of Results (Irish GAAP) Quarter End Dec 31, 1999 Dec 31, 1998 % Increase Passengers 1.4m 1.2m 17% Revenue IR£70.6m IR£52.5m 35% Profit after tax IR£12.6m IR£9.4m 33% Basic EPS 7.50p 5.64p 33% Commenting on these results in London today, Ryanair's CEO, Michael O'Leary said; 'These are another set of excellent results which confirm the strength of Ryanair's 'low fares' formula even on new European routes during the off-peak Winter months. During a quarter when both British Airways and its low fares subsidiary cut back capacity and introduced further restrictions on low fares, Ryanair continued to expand by launching low fare routes from London to Aarhus (Denmark) and we increased our schedules to Frankfurt, Stockholm and Glasgow, whilst at the same time growing traffic and profitability. Our rigorous cost control policy continues to pay dividends. Unlike most of our high fare competitors Ryanair has fully hedged our fuel requirements throughout the year 2000, and we intend to use this and other savings to offer our passengers even more lower air fares, this year. We are increasing our frequency and lowering our prices on the Stansted-Dublin and Stansted-Glasgow routes, in particular, to ensure that consumers won't suffer as a result of the withdrawal of Aer Lingus and KLM UK respectively. Whilst British Airways and other competitors try to reduce capacity and raise fares Ryanair will do the opposite, by continuing to offer the lowest air fares on more and more seats to and from the UK. We were disappointed that the Irish government permitted the Dublin Airport monopoly to increase costs for all airlines from 1 January, and this has already resulted in the average cost of air travel to and from Ireland rising for the first time since 1986. Dublin Airport will, once again, lose out as all of our new routes this year will operate between the UK and Europe. Our 5 new aircraft which deliver in May and June will be based in the UK. In late February we will announce at least 7 new routes from the UK to Europe, and we expect to grow our traffic from just under 6 million to over 7 million passengers in the coming year. Market conditions for further growth to and from the UK are favourable. British Airways strategy of carrying fewer non- premium passengers, reducing capacity on loss making short-haul routes, and allowing travel agents to introduce service fees can only help our growth. The recent decision of 'GO' to impose a Saturday night stay restriction on all promotional fares, thereby increasing average fares and yields, effectively removes the British Airways group from the low fares sector. While this is probably the correct strategy for BA with its high cost base, it will encourage Ryanair to grow aggressively. The most notable feature of our current trading remains the strength of Sterling which is somewhat artificially enhancing our yields. Whilst this looks like remaining a feature over the near term we still believe that over time, Sterling will weaken against the Euro, and will have a negative effect on yields. In the meantime we remain happy with current trading and comfortable with the present range of analysts forecasts for the full year outcome. Apart from the addition of five more new and efficient aircraft, this Summer we expect to generate significant cost efficiencies from the launch of 'RYANAIR.COM' our new internet booking site and ticketless travel facility. This was successfully introduced three weeks ago and its potential impact on sales and distribution costs is enormous. During the course of our latest seat sale last weekend (5th and 6th Feb) almost 50% of bookings were made on the RYANAIR.COM site generating substantial savings in travel agent commissions and reservation system fees. We will aggressively promote RYANAIR.COM in the UK and Europe, we intend to establish it as the low fares website for Europe, using headline sponsorships with Sky News and regular, internet only, seat sales and low fare promotions. The next few months will be exciting ones in Ryanair. Whilst market conditions will remain tough, we will add new aircraft, launch new routes, promote RYANAIR.COM, create 250 new highly paid jobs in the UK, and offer even lower fares to consumers on our existing and new European routes. Ryanair is now the 9th largest international airline in Europe, and with our outstanding people, our unmatched low fares and our new Boeing aircraft we remain on course to grow our business and further solidify our leadership of the low fares airline sector in Europe.' Ryanair also announced that a stock split, which was approved by the shareholders at the Annual General Meeting in September 1999 and will become effective on Monday 28th February 2000. The purpose of the stock split is to improve the marketability and liquidity of the stock. The last date of dealings in the existing Ordinary shares will be Friday 25 February 2000, and the existing ratio of five ordinary shares to one ADR will be retained. For further details please see the attached announcement. For results and further information Howard Millar Pauline McAlester please contact: Ryanair Holdings PlcMurray Consultants www.Ryanair.com Tel: 353-1-8121212 Tel: 353-1-6614666 Certain of the information included in this release is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. It is not reasonably possible to itemise all of the many factors and specific events that could affect the outlook and results of an airline operating in the European economy. Among the factors that are subject to change and could significantly impact Ryanair's expected results are the airline pricing environment, fuel costs, competition from new and existing carriers, market prices for replacement aircraft, costs associated with environmental, safety and security measures, actions of the Irish, U.K., European Union ('EU') and other governments and their respective regulatory agencies, fluctuations in currency exchange rates and interest rates, airport access and charges, labour relations, the economic environment of the airline industry, the general economic environment in Ireland, the UK and Continental Europe, the general willingness of passengers to travel and other economics, social and political factors. Ryanair Holdings plc Announcement Sub-Division of Each Ordinary Share of IR4p each into 2 Ordinary Shares of IR2p Each The Directors of Ryanair Holdings plc ('Ryanair' or the 'Company') have resolved to implement the sub-division of the Company's Ordinary Shares of IR4p into Ordinary Shares of IR2p (the 'Stock Split') which was approved by Ryanair shareholders at the Annual General Meeting of the Company held on 14 September, 1999. The Stock Split is intended to increase the liquidity and marketability of the stock by reducing the absolute price per share. The Stock Split is expected to become effective on Monday 28 February, 2000. Following the Stock Split, shareholders will own two Ordinary Shares in the Company for each one Ordinary Share they owned as at the record date (close of business on 25 February 2000). Subject to market movements, it is expected that the price of each sub- divided Ordinary Share on the Irish and London Stock Exchanges (the 'Stock Exchanges'), on the day the Stock Split becomes effective, will be one half of the price of an Ordinary Share on the Stock Exchanges prior to the Stock Split. The Company's authorised ordinary share capital prior to the Stock Split will be IR£8,400,000 divided into 210,000,000 Ordinary Shares of IR4p each and the Company's issued ordinary share capital will be IR£6,696,993 divided into 167,424,814 Ordinary Shares of IR4p each. Following the Stock Split, the total value of the authorised ordinary share capital of the Company will remain at IR£8,400,000, but will be divided into 420,000,000 Ordinary Shares of IR2p each and the total value of the issued ordinary share capital of the Company will similarly remain at IR£6,696,993 but will be divided into 334,849,628 Ordinary Shares of IR2p each. The Stock Split will not result in new Ordinary Shares being issued by the Company or becoming available in whole or in part to the public. The Ordinary Shares created pursuant to the Stock Split will carry the same rights in all respects as the Ordinary Shares in existence prior to the Stock Split, including full voting rights and rights to participate in any dividend of the Company and in any surplus on a winding up, and will be transferable in the same manner as Ordinary Shares in existence prior to the Stock Split. The Ordinary Shares created pursuant to Stock Split will be in registered form and may be held in certificated or uncertificated form. Application will be made to the Stock Exchanges for admission of the sub- divided Ordinary Shares to the Official List of both Exchanges. If admission is granted, the last day of dealings in the Ordinary Shares of IR4p each will be Friday 25 February, 2000 and the effective date for dealings to commence in the sub-divided Ordinary Shares of IR2p each will be Monday 28 February, 2000. New share certificates, reflecting the sub- divided Ordinary Shares, will be issued to Ryanair shareholders on request in exchange for their existing share certificates and as the Company's Registrars receive old share certificates for the purpose of processing share disposals or transfers in the normal course of business. Existing share certificates for Ordinary Shares of IR4p each remain valid, but will represent twice the number of Ordinary Shares stated on the certificate. The Company's Registrars are Bank of Ireland Registration Department, 4th Floor, Hume House, Ballsbridge, Dublin 4 (phone: 00 353 1 660 5666). Assuming admission to the Official Lists is granted, the CREST accounts of holders of uncertificated Ordinary Shares will be credited with the sub-divided Ordinary Shares at the start of business on 28 February, 2000. With regard to the Company's American Depository Shares ('ADSs'), the existing ADS ratio, where one ADS represents five Ordinary Shares will remain. Following the Stock Split the number of ADS's held by an ADR holder as of the record date will be doubled. Trading in the ADS's on the Nasdaq National Market will reflect the Stock Split as of the open of trading on Monday, 28 February, 2000. ADS holders need take no action. ADS accounts held in book entry form will be credited with a 100% distribution while registered holders will receive a 100% distribution in the mail. The record date for the Stock Split will be the close of business in Dublin on Friday 25 February, 2000 with regard to the Ordinary Shares and close of business in New York on Friday 25 February, 2000 with regard to the ADS's. Ryanair Holdings plc and Subsidiaries Consolidated Profits and Loss Accounts in accordance with UK and Irish GAAP (unaudited) Nine Nine Quarter Quarter Months Months Ended Ended Ended Ended Dec 31, Dec 31, Dec 31 Dec 31 1999 1998 1999 1998 IR'000 IR'000 IR'000 IR'000 Operating Revenues Scheduled revenues 63,147 45,988 199,326 160,567 Ancillary revenues 7,428 6,466 24,430 22,343 Total operating revenues continuing operations 70,575 52,454 223,756 182,910 Operating expenses Staff costs 9,792 7,517 28,358 23,004 Depreciation 8,884 6,886 25,536 21,321 Other operating expenses Fuel & Oil 8,445 6,718 25,038 22,350 Maintenance, materials and 3,903 2,598 10,140 7,762 repairs Marketing and distribution 5,722 3,956 18,761 15,314 costs Aircraft rentals 267 241 1,394 1,994 Route charges 5,174 4,016 15,610 12,756 Airport and Handling charges 8,396 5,079 25,393 17,921 Other 6,358 4,957 18,358 15,855 Total operating expenses 56,941 41,968 168,588 138,277 Operating profit-continuing operations 13,634 10,486 55,168 44,633 Other income/(expenses) Interest receivable and similar income 1,502 1,551 4,045 3,927 Interest payable and similar (1,047) (34) (2,137) (141) charges Foreign exchange 833 144 726 226 gains/(losses) Gains on disposal of fixed 732 0 732 21 assets Total other income/(expenses) 2,020 1,661 3,366 4,033 Profit on ordinary activities before taxation 15,654 12,147 58,534 48,666 Tax on profit on ordinary (3,102) (2,700) (12,586) (12,006) activities Profit for the financial 12,552 9,447 45,948 36,660 period Basic earnings per ordinary share 7.50 5.64 27.44 22.37 (IR Pence) Fully diluted earnings per ordinary share (IR pence) 7.43 5.64 27.21 22.37 Number of ordinary shares (in 167,425 167,425 167,425 163,888 000's) Ryanair Holdings plc and Subsidiaries Consolidated Balance Sheets in accordance with UK and Irish GAAP December 31, March 31, 1999 1999 IR'000 IR'000 (unaudited) Fixed Assets Tangible assets 240,499 160,264 Financial assets 28 42 Total Fixed Assets 240,527 160,306 Current Assets Cash and liquid 166,313 124,904 resources Accounts receivable 12,184 14,550 Other assets 5,839 4,966 Inventories 9,590 10,173 Total current assets 193,926 154,593 Total assets 434,453 314,899 Current liabilities Accounts payable 15,945 24,229 Accrued expenses and other 66,423 61,408 Liabilities Current maturities of long term debt 6,459 1,390 Short term borrowings 1,029 3,066 Total current 89,856 90,093 liabilities Other liabilities Provisions for liabilities and charges 9,647 8,881 Long Term debt 91,352 18,275 100,999 27,156 Shareholder's funds - equity Called -up share capital 6,697 6,697 Share Premium Account 102,861 102,861 Profit and loss account 134,040 88,092 Shareholder's funds - 243,598 197,650 equity Total liabilities and shareholders' funds 434,453 314,899 Ryanair Holdings plc and Subsidiaries Consolidated Cashflow Statements in Accordance with UK and Irish GAAP (unaudited) Nine Nine Months Months Ended Ended Dec 31, Dec 31, 1999 1998 IR'000 IR'000 Net cash inflow from operating 80,778 69,805 activities Returns on investments and servicing of finance 1,783 2,571 Taxation (12,237) (8,973) Capital expenditure (including aircraft deposits) (105,024) (47,962) Net cash inflow before financing and use of liquid resources (34,700) 15,441 Financing 78,146 45,460 (Increase) in liquid resources (37,961) (62,241) Increase/(decrease)in cash 5,485 (1,340) Analysis of movement in liquid resources Liquid resources at beginning of 108,715 46,197 period 37,961 62,241 Increase in period Liquid resources at end of period 146,676 108,438 Analysis of movement in cash At beginning of period 13,123 3,168 Net cash inflow/(outflow) 5,485 (1,340) Net cash at end of period 18,608 1,828 Ryanair Holdings plc and Subsidiaries Consolidated Statement of Changes in Shareholders' Funds - Equity in accordance with UK and Irish GAAP (unaudited) Share Profit Ordinary Premium and shares account loss Total account IR£'000 IR'000 IR'000 IR'000 Balance at April 1, 6,697 102,861 88,092 197,650 1999 Profit for the - - 45,948 45,948 period ------ ------ ------ ------ Balance at Dec 31, 6,697 102,861 134,040 243,598 1999 Ryanair Holdings plc and Subsidiaries Consolidated Profit and Loss Account in Accordance with US GAAP (unaudited) Quarter Quarter Nine Nine Ended Ended Months Months Dec Dec Ended Ended 31, 31, Dec Dec 1999 1998 31, 31, 1999 1998 IR'000 IR'000 IR'000 IR'000 Operating Revenues Scheduled revenues 63,147 45,988 199,326 160,567 Ancillary revenues 7,428 6,466 24,430 22,343 Total operating revenues - continuing operations 70,575 52,454 223,756 182,910 Operating expenses Staff costs 9,752 7,507 28,238 22,546 Depreciation 8,503 5,445 24,385 16,516 Other operating expenses Fuel & Oil 8,445 6,718 25,038 22,350 Maintenance, materials and 3,903 6,674 10,140 21,478 repairs Marketing and distribution costs 5,722 3,956 18,761 15,314 Aircraft rentals 267 241 1,394 1,994 Route charges 5,174 4,016 15,610 12,756 Airport and Handling charges 8,396 5,079 25,393 17,921 Other 6,341 4,940 18,307 15,804 Total operating expenses 56,503 44,576 167,266 146,679 Operating profit - continuing operations 14,072 7,878 56,490 36,231 Other income/(expenses) Interest receivable and similar 1,502 1,551 4,045 3,927 income Interest payable and similar charges (1,047) (34) 2,137) (141) Foreign exchange gains/(losses) 765 (411) 305 1,979 Gains on disposal of fixed 732 0 732 21 assets Total other income/(expenses) 1,952 1,106 2,945 5,786 Profit on ordinary activities before taxation 16,024 8,984 59,435 42,017 Tax on profit on ordinary activities (3,089) (1,560) (12,487) (9,393) Profit for the financial period 12,935 7,424 46,948 32,624 Basic earnings per ordinary share (IR Pence) 7.73 4.43 28.04 19.91 Diluted earnings per ordinary share (IR pence) 7.66 4.43 27.80 19.91 Basic earnings per ADS (IR 38.63 22.17 140.21 99.53 pence)* Diluted earnings per ADS (IR 38.30 22.17 139.00 99.53 pence)* 167,425 167,425 167,425 163,888 Number of ordinary shares (in 000's) *Each ADS represents five ordinary shares Note 1 - Restatement of Comparative Results In accordance with US accounting rules, changes in accounting policies result in a one time charge, known as a cumulative catch up adjustment, in the quarter in which the change is made. This contracts with Irish/UK accounting principles under which the impact of a change in accounting policy is recorded in the quarter and years impacted and historical financial statements are re-stated. As a result, the consolidated US GAAP profit and loss accounts of Ryanair Holdings plc & subsidiaries set out above are not comparable as the basis of accounting for maintenance impacting on maintenance expense, depreciation and taxation is significantly different in 1999 than 1998. If the US GAAP results had been re-stated for the change in accounting policy Net Income for the quarter to December 31,1998 and for the nine months to December 31, 1998 would have increased to IR£9.5million and IR£39.6million respectively and basic earnings per ADS (Irish pence) would have increased to IR28.45pence and IR120.95pence respectively. Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles (unaudited) (A) Net Income under US GAAP Quarter Quarter Nine Nine Ended Ended Months Months Ended Ended Dec 31, Dec 31, Dec 31 Dec 31, 1999 1998 1999 1998 IR'000 IR'000 IR'000 IR'000 Profit as reported in the consolidated profit and loss accounts and in accordance with UK and Irish GAAP 12,552 9,447 45,948 36,660 Adjustments Pension 35 23 105 68 Unrealised (losses)/gains forward exchange contracts (68) (555) (421) 1,753 Employment grants 17 (1) 51 425 Depreciation on tangible fixed assets: - basis of accounting for August 1996 transaction 294 345 890 1,035 - basis of accounting for aircraft acquired from Northill Limited 87 87 261 261 Darley Investments Limited 17 17 51 51 Share option compensation (12) (12) (36) (36) expense Taxation effect of above 13 174 99 (571) Effect of changes in accounting policies: Maintenance and depreciation 0 (3,067) 0 (10,206) Tax 0 966 0 3,184 Net income in accordance 12,935 7,424 46,948 32,624 with US GAAP (B) Consolidated Cashflow Statements in accordance with US GAAP Nine Nine Months Months Ended Ended Dec 31, Dec 31, 1999 1998 IR£000 IR£000 Cash Inflow from operating activities 70,325 63,403 Cashflow from investing activities (137,391) (68,430) Cashflow from financing activities 76,109 46,549 Increase in cash and cash 9,043 41,522 equivalents Cash and cash equivalents at beginning of period 76,948 43,605 Cash and cash equivalents at end of period 85,991 85,127 Cash and cash equivalents under US GAAP 85,991 85,127 Deposits with a maturity of between three and six months 80,322 27,833 Cash and liquid resources under UK and Irish GAAP 166,313 112,960 Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles (continued) (unaudited) (C) Shareholders' Funds Dec Dec equity 31,1999 31,1998 IR'000 IR'000 Shareholders' equity as reported in the consolidated balance sheets (UK and Irish 243,598 190,860 GAAP) Adjustments: Pension 546 418 Unrealised gains on forward exchange 478 275 contracts Employment grants (477) (429) Basis of accounting for August 1996 transactions (1,888) (4,530) Basis of accounting for aircraft acquired from Northill Limited (228) (576) Darley Investments (413) (481) Limited Share option compensation expense 8 56 Investments 1,772 0 Tax effect of adjustments 333 413 Cumulative effect of change in accounting 0 (18,210) policies Effect of change in accounting policies: Maintenance and depreciation 0 (10,206) Tax 0 3,184 Shareholders' equity as 243,729 160,774 adjusted to accord with US GAAP Opening shareholders' equity under US GAAP 196,822 80,880 Investments (41) 0 Net income in accordance with US GAAP 46,948 32,624 Stock issued for cash 0 47,270 Closing shareholder's _______ _______ equity under US GAAP 243,729 160,774 Ryanair Holdings plc Management Discussions and Analysis of Results Summary Quarter Ended December 31, 1999 Profit after tax has increased by 33% to IR£12.6m, compared to IR£9.4m in the previous quarter December 31, 1998. Total Operating Revenues, grew by 35% to IR£70.6m, whilst passenger volumes increased by 17% to 1.4m. Total Operating Expenses increased by 36% to IR£56.9m, due to the increased level of activity, and the increased costs, primarily staff and airport costs, associated with the growth of the airline. Profit Before Tax has increased by 29% to IR£15.7m. The Corporation Tax rate for the period was 20% compared to 22% for the previous quarter, and primarily reflects the impact of the decline in the headline rate of corporation tax in Ireland. Nine Months Ended December 31, 1999 Profit after tax has increased by 25% to IR£45.9m, compared to IR£36.7m in the previous nine months ended December 31, 1998. Total Operating Revenues, grew by 22% to IR£223.8m, whilst passenger volumes increased by 13% to 4.2m. Total Operating Expenses increased by 22% to IR£168.6m, due to the increased level of activity, and the increased costs, primarily staff and airport costs, associated with the growth of the airline. Profit Before Tax has increased by 20% to IR£58.5m. The Corporation Tax rate for the period was 22% compared to 25% for the previous nine months, and reflects the impact of the decline in the headline rate of corporation tax in Ireland. Balance Sheet at December 31, 1999 Cash and Liquid Resources have increased from IR£125.0m at March 31, 1999 to IR£166.3m at December 31, 1999, reflecting the increased cash flows from the profitable trading performance. During the nine months the company incurred capital expenditure of IR£105.0m primarily financed by an increase in the level of debt. Shareholder's Funds at December 31, 1999 have increased to IR£243.6m, compared to IR£197.7m at March 31, 1999. Discussion and Analysis Quarter Ended December 31, 1999 Profit after tax has increased by 33% to IR£12.6m, compared to IR£9.4m in the previous quarter ended December 31, 1998. Total Operating Revenues, grew by 35% to IR£70.6m, whilst passenger volumes increased by 17% to 1.4m. Scheduled Passenger Revenues increased by 37% to IR£63.1m due to a 17% increase in passenger volumes, an increase in the average yield per passenger reflecting the strength of sterling, and the longer average sector length flown. Ancillary Revenues increased by 15% to IR£7.4m reflecting the reduction in average spend per passenger due to the cessation of duty free sales, being offset by, increased revenues from other ancillary activities. Total Operating Expenses increased by 36% to IR£56.9m, due to the increased level of activity, and the increased costs, primarily staff and airport costs, associated with the growth of the airline. Staff Costs have increased by 30% to IR£9.8m. The increase in staff costs reflects a 16% increase in average employment to 1,261. Pilots, who earn higher than average salaries, accounted for 18% of the increase in employment. Staff costs also rose due to the impact of a 3% increase in pay during the quarter. Depreciation increased by 29% to IR£8.9m, reflecting the increased depreciation costs arising from the acquisition of five new Boeing 737- 800 next generation aircraft, and the amortisation of capitalised maintenance costs. Fuel Costs rose by 26% to IR£8.4m reflecting the impact of a 19% increase in the number of sectors flown, an increase in the average sector length, and an increase in the cost per gallon of fuel in local currency due to the strengthening of the dollar. Maintenance Costs increased by 50% to IR£3.9m, reflecting an increase in the number of sectors flown, increased line maintenance costs associated with the expansion of the Stansted base, and a non-recurring engine overhaul cost incurred during the quarter. Marketing and Distribution Costs have increased by 45% to IR£5.7m, due to a combination of, an increase in passenger volumes, increased distribution costs, and the increased marketing costs associated with the launch of eight new routes. Aircraft Rental Costs were £0.3m reflecting the cost incurred to rent additional seat capacity during the quarter. Route Charges increased by 29% to IR£5.2m primarily due to a 19% increase in the number of sectors flown, and an increase in the average sector length. Airport and Handling Charges increased by 65% to IR£8.4m, due to an increase in the number of passengers flown, and the impact of increased airport and handling charges on some existing routes, offset by, lower charges on the new routes from the UK to Europe. Other Expenses increased by 28% to IR£6.4m, which was higher than the growth in passenger volumes and reflects the increased ancillary product costs arising from the change in product mix post the cessation of duty free. Operating Profits have increased by 30% to IR£13.6m for the reasons outlined above. Interest Receivable amounted to IR£1.5m during the quarter, and Interest Payable increased to IR£1.0m due to the increased level of debt arising from the acquisition of the five new aircraft. Gains on Disposals of Assets increased by £0.7m reflecting the gain on the disposal of shares in an airline network provider. Corporation Tax rate for the quarter was 20% compared to 22% in the previous quarter and primarily reflects the impact of the decline in the headline rate of corporation tax in Ireland. The Company's Balance Sheet continues to highlight the impact of the profitable trading performance during the period. Cash and liquid resources increased from IR£125.0m at March 31, 1999 to IR£166.3m reflecting the strong cashflows generated during the period. The company incurred capital expenditure of IR£105.0m primarily financed by an increase in the level of debt. Shareholder's Funds at December 31, 1999 have increased to IR£243.6m compared to IR£197.7m at March 31 1999. Nine Months Ended December 31, 1999 Profit after tax has increased by 25% to IR£45.9m compared to IR£36.7m in the nine months ended December 31, 1998. Total Operating Revenues, grew by 22% to IR£223.8m, whilst passenger volumes increased by 13% to 4.2m. Scheduled Passenger Revenues increased by 24% to IR£199.3m due to a 13% increase in passenger volumes, an increase in the average yield per passenger reflecting the strength of sterling, and the longer sector length flown. Ancillary Revenues increased by 9% to IR£24.4m, which was lower than the growth in passenger volumes, and reflects the reduction in average spend per passenger post the cessation of duty free, being offset by, increased revenues from other ancillary activities. Total Operating Expenses increased by 22% to IR£168.6m, due to the increased level of activity, and the increased costs, primarily staff and airport costs, associated with the growth of the airline. Staff Costs have increased by 23% to IR£28.4m. The increase in staff costs reflects a 16% increase in average employment to 1,248. Pilots, who earn higher than average salaries, accounted for 22% of the increase in employment. Staff costs also rose due to the impact of a 3% increase in pay. Depreciation increased by 20% to IR£25.5m, reflecting the impact of the acquisition of five new Boeing 737-800 next generation aircraft, and the amortisation of capitalised maintenance costs. Fuel Costs rose by 12% to IR25.0m and reflects the impact of, a 13% increase in the number of sectors flown during the nine months, an increase in the average sector length, offset by, a reduction in the average cost per gallon of fuel reflecting the impact of the forward hedging contracts entered into in 1998. Maintenance Costs increased by 31% to IR£10.1m, primarily reflecting the increase in the number of hours flown, and the increased line maintenance costs associated with the expansion of our Stansted base. Marketing and Distribution Costs have increased by 23% to IR£18.8m, due to a combination of an increase in passenger volumes, and the increased costs associated with the launch of eight new routes. Aircraft Rental Costs decreased by IR£0.6m to IR£1.4m reflecting the continued decline in the need to rent additional seat capacity. Route Charges increased by 22% to IR£15.6m due to a 13% increase in the number of sectors flown, and an increase in the average sector length. Airport and Handling Charges increased by 42% to IR£25.4m, due to an increase in the number of passengers flown, and the impact of increased airport and handling charges on some existing routes, offset by, lower charges on the new routes from the UK to Europe. Other Expenses increased by 16% to IR£18.4m, and reflects the increase in the level of activity during the period. Operating Profits have increased by 24% to IR55.2m for the reasons outlined above. Interest Receivable amounted to £4m during the period, and Interest Payable increased to IR£2.1m due to the increased level of debt arising from the acquisition of the five new aircraft. Gains on Disposals of Assets increased by £0.7m reflecting the gain on the disposal of shares in an airline network provider. Corporation Tax for the half year was 22% compared to 25% in the previous nine months and reflects the impact of the decline in the headline rate of corporation tax in Ireland. The Company's Balance Sheet continues to highlight the impact of the profitable trading performance during the nine months. Cash and liquid resources increased from IR£125.0m at March 31,1999 to IR£166.3m reflecting the strong cashflows during the nine months. The company incurred capital expenditure of IR£105.0m during the nine months which was primarily financed by an increase in the level of debt. Shareholder's Funds at December 31, 1999 have increased to IR£243.6m compared to IR£197.7m at March 31, 1999. Notes to the Financial Statements 1. Accounting Policies The accounting policies followed in the preparation of these interim consolidated financial statements have not changed from those set out in the Annual Report for the year ended March 31, 1999. 2. Approval of the Financial Statements The consolidated financial statements for the Nine Months and Quarter ended 31 December 1999 were approved by the Audit Committee on February 4th, 2000. 3. Generally Accepted Accounting Policies The Management Discussion and Analysis of Results for the Nine Months and Quarter ended December 31, 1999 are based on the results reported under Irish and UK GAAP. 4. Year 2000 Compliance The company has successfully completed its Year 2000 programme and the company's information systems continue to operate normally.

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