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124 Qantas Annual Report 2009
Notes to the Financial Statements
for the year ended 30 June 2009
25. Derivatives and Hedging Instruments
Qantas Group Qantas
2009 2008 2009 2008
DERIVATIVES $M $M $M $M
Designated as cash flow hedges (43) 236 (30) 238
Designated as fair value hedges (101) (500) (101) (500)
De-designated derivatives (134) (143) (147) (143)
Not qualifying for hedge accounting 194 246 194 246
Total derivative liabilities (84) (161) (84) (159)
Other financial assets 80 149 80 149
Net financial liabilities (4) (12) (4) (10)
The following section summarises derivative financial instruments in the Balance Sheet, Income Statement and Statement of Changes in Equity.
(A) OTHER FINANCIAL ASSETS AND LIABILITIES
Other financial assets are measured at amortised cost. These amounts are shown net of impairment losses of $181 million (2008: $122 million).
(B) HEDGE RESERVE
At 30 June 2009, the Qantas Group and Qantas held various types of derivative financial instruments that were designated as cash flow hedges of future
forecast transactions. These were hedging of:
•certainforeigncurrencyrevenuereceiptsandoperationalpaymentsbyfuturedebtrepaymentsinforeigncurrencyandexchangederivativecontracts
(forwards, swaps or options);
•futureaviationpurchasesbyforwardcrude,gasoilandjetkerosenederivativecontractsandoptions;
•futureinterestpaymentsbyinterestratederivativecontracts(forwards,swapsoroptions);and
•futurecapitalexpenditurepaymentsbyforeignexchangederivativecontracts(forwardsoroptions).
Totheextentthatthehedgeswereassessedashighlyeffective,theeffectiveportionofchangesinfairvalueareincludedinthehedgereserve.Forfurther
informationonaccountingforderivativenancialinstrumentsascashowhedges,refertoNote1(F).Theperiodsinwhichtherelatedcashowsare
expectedtooccuraresummarisedbelow:
Qantas Group Qantas
CONTRACTS TO HEDGE
2009
$M
Futureforeigncurrency
receipts and payments 117 111 37 265 136 111 37 284
Futureaviationfuelpayments (286) 12 – (274) (275) 12 – (263)
Futureinterestpayments (5) (28) (1) (34) (5) (28) (1) (34)
Futurecapitalexpenditurepayments (8) 10 – 2 (8) 10 – 2
(182) 105 36 (41) (152) 105 36 (11)
Relateddeferredtaxbenet 12 3
Total net loss included within
hedge reserve (29) (8)
2008
Futureforeigncurrency
receipts and payments (18) 296 13 291 (17) 296 13 292
Futureaviationfuelpayments 653 108 – 761 653 108 – 761
Futureinterestpayments 21 39 2 62 21 39 2 62
Futurecapitalexpenditurepayments (390) (123) – (513) (390) (123) – (513)
266 320 15 601 267 320 15 602
Relateddeferredtaxexpense  (180) (181)
Total net gain included within
hedge reserve 421 421
1 to 5 Years
1 to 5 Years
More than 5 Years
Total
Less than 1 Year
Less than 1 Year
More than 5 Years
Total