DHL 2014 Annual Report Download - page 59

Limiting market risk
e Group uses both primary and derivative nancial instruments to limit market risk.
Interest rate risk is managed exclusively via swaps. Currency risk is hedged additionally
using forward transactions, cross-currency swaps and options. We pass on most of the
risk arising from commodity uctuations to our customers and, to some extent, use
commodity swaps to manage the remaining risk. e parameters, responsibilities and
controls governing the use of derivatives are laid down in internal guidelines.
Flexible and stable financing
e Group covers its long-term nancing requirements by means of equity and liabil-
ities. is ensures our nancial stability and also provides adequate exibility. Our most
important source of funds is net cash from operating activities.
We also have a syndicated credit facility in a total volume of  billion that guaran-
tees us favourable market conditions and acts as a secure, long-term liquidity reserve.
e facility was extended in  and renewed in the reporting year by one year and now
runs until . Moreover, there is an option to renew it for another year. e syndicated
credit facility does not contain any covenants concerning the Group’s nancial indica-
tors. In view of our solid liquidity, it was not drawn down during the year under review.
As part of our banking policy, we spread our business volume widely and maintain
long-term relationships with the nancial institutions we entrust with our business. In
addition to credit lines, we meet our borrowing requirements through other independ-
ent sources of nancing, such as bonds and operating leases. Most debt is taken out
centrally in order to leverage economies of scale and specialisation benets and hence
minimise borrowing costs.
No bonds were issued in the reporting year and a bond falling due in January 
was repaid. Further information on the existing bonds is contained in the Notes.
Group issues sureties, letters of comfort and guarantees
Deutsche Post  provides security for the loan agreements, leases and supplier con-
tracts entered into by Group companies, associates or joint ventures by issuing letters
of comfort, sureties or guarantees as needed. is practice allows better conditions to
be negotiated locally. e sureties are provided and monitored centrally.
Group’s credit rating improved
Credit ratings represent an independent and current assessment of a company’s credit
standing. Ratings are based upon a quantitative analysis and measurement of the an-
nual report and appropriate planning data. Qualitative factors, such as industry-specic
features and the company’s market position and range of products and services, are also
taken into account.
Note 
Deutsche Post  Group —  Annual Report
53
Group Management Report — REPORT ON ECONOMIC POSITION — Financial position