DHL 2015 Annual Report Download - page 65

Deutsche Post  Group —  Annual Report
e “ to debt” dynamic performance metric increased in the reporting year com-
pared with the prior year, due to a decrease in debt.
Funds from operations declined slightly by  million to a total of , million.
ere was a sharp decrease in the amount of interest paid, largely because we unwound
interest rate swaps for bonds and therefore generated interest income. Operating
restructuring payments in the amount of  million were recognised as non-recurring
income / expenses in the reporting year.
Debt decreased by  million year-on-year to , million in nancial year
. e main reason for the decline was lower pension obligations due to an increase
in discount rates. Further information on pensions is contained in the Notes.
Cash and liquidity managed centrally
e cash and liquidity of our globally operating subsidiaries is managed centrally by
Corporate Treasury. More than   of the Group’s external revenue is consolidated in
cash pools and used to balance internal liquidity needs. In countries where this practice
is ruled out for legal reasons, internal and external borrowing and investment are man-
aged centrally by Corporate Treasury. In this context, we observe a balanced banking
policy in order to remain independent of individual banks. Our subsidiaries’ intra-group
revenue is also pooled and managed by our in-house bank in order to avoid external
bank charges and margins through inter-company clearing. Payment transactions are
executed in accordance with uniform guidelines using standardised processes and 
systems. Many Group companies pool their external payment transactions in the
Group’s Payment Factory, which executes payments in the name of the respective com-
panies via Deutsche Post ’s central bank accounts.
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 debt.
is ensures our nancial stability and also provides adequate exibility. Our most im-
portant 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 by one year in  and now runs until . 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.
Note 
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Group Management Report — REPORT ON ECONOMIC POSITION — Financial position