DHL 2005 Annual Report Download - page 65
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Principles and aims of financial management
In order to ensure nancial stability and exibility for the Deutsche Post Group, we aim
to achieve a balanced relationship between equity and liabilities. In doing so, we have to
take into account both the return expected by shareholders and the requirements for rat-
ing purposes. In 2005, the equity ratio amounted to 30% (previous year: 25%). In order to
minimize the cost of capital and benet from economies of scale and specialization, exter-
nal nancing measures, Group-wide nance and liquidity management, and the hedging
of interest rate, currency as well as commodity price risks are all coordinated centrally. To
limit these risks, the Group makes use of derivative as well as primary nancial instru-
ments.
Currently, this involves managing interest rate risk mostly with interest rate swaps and, to
a limited extent, with options. Cross-currency swaps and options are used to hedge cur-
rency risks, in addition to ordinary forward transactions. Swaps are one of the methods
employed by the Group to limit risks relating to commodities. e necessary universe of
actions, responsibilities and controls have been clearly established in internal guidelines.
Deutsche Post aims to structure its debt nancing using a broad mix of nancial instru-
ments. Particular use is made of capital market measures, structured nancing transac-
tions and operating leases for this purpose.
Operating leases are used for nancing aircra and real estate in particular, but also for
vehicles and IT equipment.
By far the most important currency in which debt is denominated is the euro (64%), fol-
lowed by the US dollar (24%). e Group expects interest rates in the euro zone to in-
crease slightly but to continue to remain well below long-term average rates. e negative
impact which a rise in interest rates would have on the nancial position has admittedly
been increased by the cash outows used for acquisitions, but still remains insubstantial.
In addition, the Group currently has unused credit lines amounting to some €4.2 billion.
is is in keeping with the fundamental banking policy applied across the Group, whereby
dependence on the lending policy of a single bank or banking group is to be avoided.
e creditworthiness of the Group is regularly reviewed by the Standard & Poor’s, Moody’s
Investors Service and Fitch IBCA rating agencies. e current ratings are:
Ratings
Moody’s Investors Service Standard & Poor’s Fitch IBCA
Long-term A2 A A+
Outlook Stable Negative Negative
Short-term P–1 A–1 F1
Last change February 14, 2006 December 14, 2005 December 20, 2005
Details on lease obligations and contingent
liabilities can be found in items 52 and 54
in the “Notes” section.
Deutsche Post World Net
61
Net Assets and Financial Position
Group Management ReportConsolidated Financial StatementsAdditional Information