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Cathay Pacific Airways Limited
90 Notes to the Financial Statements Supplementary Information
31. Financial risk management (continued)
(iii) Fuel price risk
Fuel accounted for 39.2% of the Group’s total operating expenses (2013: 39.0%). Exposure to fluctuations in
the fuel price is managed by the use of fuel derivatives. The profit or loss generated from these fuel derivatives
is dependent on the nature and combination of contracts which generate payoffs in any particular range of
fuel prices.
Sensitivity analysis for jet fuel price derivatives
An increase/(decrease) of five percent in the jet fuel price at the reporting date would have affected profit or
loss and other equity components for the year by the amounts shown below. These amounts represent the
change in fair value of fuel derivatives at the reporting date.
2014 2013
Net increase/
(decrease) in
profit or loss
HK$M
Net
increase/
(decrease) in
other equity
components
HK$M
Net
increase/
(decrease) in
profit or loss
HK$M
Net
increase/
(decrease) in
other equity
components
HK$M
Increase in jet fuel price by 5% (21) 1,695 (98) 872
Decrease in jet fuel price by 5% 12 (1,702) (38) (736)
(d) Hedge accounting
The carrying values of financial assets/(liabilities) designated as cash flow hedges as at 31st December 2014 were
as follows:
2014
HK$M
2013
HK$M
Foreign currency risk
 – long-term liabilities (natural hedge) (7,482) (7,751)
 – cross currency swaps 519 877
 – foreign currency forward contracts 1,168 520
 – foreign exchange swap (4) (1)
Interest rate risk
 – interest rate swaps (258) 6
Fuel price risk
 – fuel derivatives (14,307) 1,654
(e) Fair values
The fair values of the following financial instruments differ from their carrying amounts shown in the statement of
financial position:
2014 2013
Carrying
amount
HK$M
Fair value
HK$M
Carrying
amount
HK$M
Fair value
HK$M
Group
Loans receivable 601 650 663 719
Long-term loans (33,697) (35,185) (30,788) (32,089)
Obligations under finance leases (32,119) (33,171) (37,851) (39,354)
Pledged security deposits 720 855 1,587 1,839