Cash and liquidity

The net debt position (cash and cash equivalents less loans, overdrafts and finance leases) at the year end was £338m (2008: £136m). This consisted of £790m of cash and £1,128m of interest-bearing loans and liabilities.

The increase in net debt has arisen primarily due to:

• The cash impact of costs incurred to deliver the synergy benefits;
• A working capital outflow driven by capacity reductions and the later booking curve;
• Acquisitions made in the year; and
• An adverse impact arising on the translation of foreign currency denominated debt.

On 29 September 2009, we announced a number of financing measures, including:

• An issue of £350m of convertible bonds due in October 2014;
• Additional revolving credit facilities of £140m, maturing in June 2012; and
• Deferral to April 2011 of €160m of the shareholder loan, beyond the 2011 seasonal peak in net debt, as part of a rescheduling of the repayment profile of the loan.

In accordance with the new repayment schedule, we repaid €100m of our shareholder loan on 30 September 2009 and the outstanding balance is now €919m. The new repayment schedule is set out below:

In addition to the above, we have a £770m revolving credit facility which matures in June 2012. Given the Group’s current facilities and current cash flow forecasts, the Board remains satisfied with the Group’s funding and liquidity position. Fixed charges cover and the ratio of net debt to EBITDA, which we believe to be the most useful measures of cash generation and gearing, were 2.0x and 0.5x respectively at the year end (2008: 2.1x and 0.2x respectively). Fixed charges cover is defined as EBITDA before operating lease rentals charge divided by net interest plus operating lease rentals. EBITDA is defined as earnings before interest, tax, depreciation and amortisation and is calculated on an underlying basis.

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