Air New Zealand 2008 Annual Report Download - page 30

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AIR NEW ZEALAND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS AT 30 JUNE 2008
16. FINANCIAL INSTRUMENTS (CONTINUED)
COMPANY
AS AT 30 JUNE 2007
In NZ$M NZD USD AUD EUR JPY GBP OTHER TOTAL
Foreign currency risk
Non-derivative financial instruments
Cash and cash equivalents 1,008 - 2 2 - - 38 1,050
Security deposit 120 - - - - - - 120
Trade and other receivables (excluding prepayments) 214 82 18 9 6 22 20 371
Amounts owing from subsidiaries 103 101 - - 1 - - 205
Trade and other payables (135) (118) (33) (4) (5) (24) (9) (328)
Interest-bearing liabilities (294) - - - - - - (294)
Amounts owing to subsidiaries (706) (361) (6) - - - - (1,073)
Amounts owing to associates - - (3) - - - - (3)
Net financial position exposure before hedging activities 310 (296) (22) 7 2 (2) 49 48
Foreign currency derivatives
Notional principal (NZ$M)
Cash flow hedges (764) 1,595 (312) (85) (115) (289) (105) (75)
Non-hedge accounted (857) 773 10 2 4 6 4 (58)
Balance** (1,311) 2,072 (324) (76) (109) (285) (52) (85)
Cash flows in respect of foreign currency cash flow hedges
were expected to occur as follows:
Not later than 1 year (697) 1,441 (276) (76) (106) (262) (92) (68)
Later than 1 year and not later than 2 years (67) 154 (36) (9) (9) (27) (13) (7)
(764) 1,595 (312) (85) (115) (289) (105) (75)
** The Company does not hold any foreign currency interest-bearing liabilities. Foreign currency derivatives executed through the central Treasury
function within the Company are used to provide a natural offset at a Group level of translation gains or losses on United States Dollar denominated
interest-bearing liabilities (“foreign currency debt cover”). Within the Company, there is no such offset. The balance shown above, excluding the foreign
currency debt cover, represents hedges of highly probable forecast foreign currency operating and capital expenditure transactions.
Foreign currency sensitivity on financial instruments
The following table demonstrates the sensitivity of Air New Zealand’s financial instruments at reporting date to a reasonably possible appreciation/
depreciation in the United States Dollar against the New Zealand Dollar. Other currencies are evaluated by converting first to United States Dollars
and then applying the above change against the New Zealand Dollar. All other variables are held constant. This analysis does not include future
forecast hedged operating or capital transactions.
GROUP
AS AT 30 JUNE 2008
In NZ$M USD AUD EUR JPY GBP OTHER
On profit before taxation
5 cents appreciation 4 - (1) - - (1)
5 cents depreciation (5) - 1 - - 1
On cash flow hedge reserve (within equity)
5 cents appreciation (168) 29 10 8 22 10
5 cents depreciation 191 (34) (11) (9) (25) (11)
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