Aer Lingus 2013 Annual Report Download - page 116

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114
Assets and liabilities relating to derivative financial instruments represent the fair value of open forward foreign exchange contracts and fuel
price swaps to which the Group is a party at the reporting date. The fair value of these open positions is calculated by reference to the
forward foreign exchange rates and forward fuel prices at the reporting date. During 2013 the fair value of fuel contract open positions has
increased significantly due to the fact that fuel prices were circa US$10 per metric tonne higher than at 31 December 2012, and the Group’s
hedge positions were at more attractive rates. However, during 2013 the value of the Group’s foreign exchange hedges decreased
significantly mainly due to a weakening of the US dollar against the euro.
The gains and losses arising from cash flow hedging positions are recognised in reserves until they are realised. The position in reserves is
recognised net of deferred tax.
The statement of comprehensive income shows fair value losses to 31 December 2013 (before the impact of deferred tax) of €8.4 million
(2012: losses of €5.8 million). This represents both mark to market and deferred realised losses on the Group’s portfolio of foreign
exchange hedges, partially offset by the gain in the Group’s portfolio of fuel hedges.
Foreign exchange contracts
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2013 were €491.5 million (31
December 2012: €411.9 million).
Interest rate swaps
The notional principal amounts of the outstanding interest rates swaps at 31 December 2013 were €nil (31 December 2012 €36.4 million).
Aircraft fuel price contracts
The Group enters into derivative contracts to fix the price of a proportion of its forecast aircraft fuel purchases. The notional principal
amounts of the outstanding contracts at 31 December 2013 were €233.4 million (31 December 2012: €216.1 million). The outstanding fuel
price contracts at 31 December 2013 amounted to 355,025 metric tonnes of aircraft fuel (31 December 2012: 297,471 metric tonnes).
The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the statement of financial position.
A gain relating to ineffectiveness of fuel hedges of €0.74 million is reflected in the income statement in 2013 (2012: charge of €0.03
million).
Cash flows in respect of derivative financial instruments are expected to occur as they mature at various points over the next 18 months.
The fair value of the instruments at the point of settlement will affect the income statement at the point of settlement.
20 Inventories
2013
2012
€’000
€’000
Sundry inventory
2,536
2,235
Sundry inventory primarily comprises catering and retail stock for sale on board.
There were no write-downs of inventory during the current or prior year.
21 Trade and other receivables
Group
2013
2012
(as restated1)
€’000
€’000
Trade receivables
53,552
42,273
Other amounts receivable
28,124
27,689
Prepayments and accrued income
35,128
29,825
116,804
99,787
Shown as:
Non-current assets
43,278
33,133
Current assets
73,526
66,654
116,804
99,787
1See Basis of Preparation Note (v).