DHL 2010 Annual Report Download - page 207

to hedge the currency risk of future lease payments and annuities
denominated in foreign currencies.  e payments for the hedged
items are made in instalments, with the  nal payment due in .
 e Group is exposed to cash  ow risks from contracted air-
cra purchases in connection with future payments in  dollars.
 ese risks were hedged using forward transactions.  e fair value
of these cash  ow hedges amounted to   million as at  Decem-
ber  (previous year: – million).  e aircra will be added in
. Gains or losses on hedges are o set against cost and recog-
nised in pro t or loss upon the amortisation of the asset.
Risks arising from  xed-interest foreign currency investments
were hedged using synthetic cross-currency swaps, with the invest-
ments being transformed into  xed-interest euro invest ments.
 ese synthetic cross-currency swaps hedge the currency risk, and
their fair values at the reporting date amounted to   million (pre-
vious year:   million).  e investments relate to internal Group
loans that mature in .
 e Group was exposed to cash  ow risks arising from a
variable-interest liability.  ese risks were hedged using an interest
rate swap. On  September , the liability, which was to fall
due in , was settled by payment. At the same time, the hedging
instrument was transferred from the hedging portfolio to the trad-
ing portfolio at its fair value of – million.  e measurement at
fair value was recognised in income at the time of the transfer. On
 November , the derivative was closed out by payment.  e
interest rate swap had a fair value of – million on settlement.
In addition, a  xed-interest currency liability was trans-
formed into a  xed-interest euro-denominated liability using a
cross- currency swap.  e fair value of the derivative was – mil-
lion as at the reporting date (previous year: – million).  e
derivative and the underlying hedged item fall due in .
 e risks from the purchase of diesel and marine diesel fuels,
which cannot be passed on to customers, were hedged using com-
modity swaps.  e fair value of these cash  ow hedges amounted
to   million as at year-end (previous year:   million).  ere was
minor hedge ine ectiveness.
  
Interest rate swaps were used to hedge the fair value risk
of  xed-interest euro-denominated liabilities.  e fair values of
these interest rate swaps amount to   million (previous year:
  million). As at  December , there was also a   million
(previous year:   million) adjustment to the carrying amount
of the underlying hedged item arising from an interest rate swap
unwound in the past.  e adjustment to the carrying amount is
amortised over the remaining term of the liability using the e ec-
tive interest method, and reduces future interest expense.
In addition, cross-currency swaps were used to hedge liabili-
ties in foreign currency against negative changes in the market,
with the liability being transformed into a variable-interest euro-
denominated liability.  is hedged the fair value risk of the interest
and currency component.  e fair value of this interest rate swap
position was – million as at  December  (previous year:
– million).
 e following table gives an overview of the gains and losses
arising from the hedged items and the respective hedging trans-
actions:
Cash fl ow hedges
 e Group uses currency forwards and swaps to hedge the
cash  ow risks from future foreign currency operating revenue and
expenses.  e fair values of currency forwards and swaps amounted
to – million at the reporting date (previous year: – million).
 e hedged items will mostly be recognised in the income state-
ment in .
Currency forwards with a fair value of – million (previ-
ous year: – million) as at the reporting date were entered into
Ineffective portion of fair value hedges
 m
2009 2010
Losses (–) on hedged items –16 –1
Gains (+) on hedging transactions 17 3
Balance (ineffective portion) 1 2
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Other disclosures
193