Mercedes 2015 Annual Report Download - page 249

256 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 shown in table  E.75.
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 transac-
tions, cross currency interest rate swaps, interest rate swaps,
options and commodity forwards.
Fair values of hedging instruments
Table  E.76 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 shown in table  E.77.
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 in other comprehensive
income, are shown in table  E.78.
Table  E.79 provides an overview of the reclassifications
of pre-tax gains/losses from equity to the statement of income
for the period.
Net profit for 2015 includes net losses (before income taxes)
of €9 million (2014: €17 million) attributable to the ineffective-
ness of derivative financial instruments entered into for
hedging purposes (hedge-ineffectiveness).
In 2015, the discontinuation of cash flow hedges as a result
of non-realizable hedged items resulted in losses of €21 million
(2014: €6 million).
The maturities of the interest rate hedges and cross currency
interest rate hedges as well as of the commodity hedges corre-
spond with those of the underlying transactions. The realization
of the underlying transactions of the cash flow hedges is
expected to correspond with the maturities of the hedging trans-
actions shown in table  E.80. As of December 31, 2015,
Daimler utilized derivative instruments with a maximum maturity
of 51 months (2014: 36 months) as hedges for currency
risks arising from future transactions.
Total interest income and total interest expense
2015 2014
In millions of euros
Total interest income 3,791 3,089
Total interest expense -1,799 -1,666
E.75
Fair values of hedging instruments
At December 31,
2015 2014
In millions of euros
Fair value hedges 498 535
Cash flow hedges -2,255 -1,527
Hedges of net investments in foreign operations –-29
E.76
Net gains/losses from fair value hedges
2015 2014
In millions of euros
Net gains/losses from hedging instruments -69 553
Net gains/losses from underlying transactions 65 -552
E.77
Unrealized gains/losses from cash flow hedges
2015 2014
In millions of euros
Unrealized gains/losses -3,770 -2,433
E.78
Reclassifications of pre-tax gains/losses from equity
to the statement of income
2015 2014
In millions of euros
Revenue -2,755 340
Cost of sales -99 -90
Interest income ––
Interest expense -3 -2
-2,857 248
E.79