Mercedes 2013 Annual Report Download - page 244

248
Total interest income and total interest expense
Total interest income and total interest expense for financial
assets or financial liabilities that are not measured at fair
value through profit or loss are presented in table  F.83.
See Note 1 for qualitative descriptions of accounting for
financial instruments (including derivative financial instruments).
Information on derivative financial instruments
Use of derivatives. The Group uses derivative financial
instruments exclusively for hedging financial risks that arise
from its commercial business or refinancing activities. These
are mainly interest rate risks, currency risks and commodity
price risks. For these hedging purposes, the Group mainly uses
currency forward transactions, cross currency interest rate
swaps, interest rate swaps, options and commodity forwards.
Fair values of hedging instruments. Table  F.84 shows
the fair values of hedging instruments at the end of the reporting
period.
Fair value hedges. The Group uses fair value hedges primarily
for hedging interest rate risks.
Net gains and losses from these hedging instruments
and the changes in the value of the underlying transactions
are presented in table  F.85.
Cash flow hedges. The Group uses cash flow hedges
for hedging currency risks, interest rate risks and commodity
price risks.
Unrealized pre-tax gains and losses on the measurement
of derivatives, which are recognized during the period
in other comprehensive income, are shown in table  F.86.
Table  F.87 gives an overview of the reclassifications
of pre-tax gains/losses from equity to the statement of income
for the period.
The unrealized pre-tax gains and losses on the measurement
of derivatives as well as reclassifications of pre-tax gains and
losses from equity to the statement of income do not include
gains and losses from derivatives entered into by our equity-
method investments (see Note 20 for further information).
Net profit for 2013 includes net losses (before income taxes)
of €7million (2012: €17 million) attributable to the ineffective-
ness of derivative financial instruments entered into for hedging
purposes.
Total interest income and total interest expense
2013 2012
In millions of euros
Total interest income 2,964 3,235
Total interest expense -1,977 -2,244
F.83
Fair values of hedging instruments
At December 31,
2013 2012
In millions of euros
Fair value hedges 118 648
Cash flow hedges 1,177 96
Hedges of net investments in foreign operations 13 –
F.84
Net gains/losses from fair value hedges
2013 2012
In millions of euros
Net losses/gains from hedging instruments -386 285
Net gains/losses from underlying transactions 413 -344
F.85
Unrealized gains from cash flow hedges
2013 2012
In millions of euros
Unrealized gains 1,388 151
F.86
Reclassifications of pre-tax gains/losses from equity
to the statement of income
2013 2012
In millions of euros
Revenue 286 -824
Cost of sales -36 -16
Interest income –2
Interest expense -2 .
248 -838
F.87