DHL 2011 Annual Report Download - page 207

OTHER DISCLOSURES
 Risks and fi nancial instruments of the Group
. Risk management
As a result of its operating activities, the Group is exposed to
 nancial risks that may arise from changes in exchange rates, com-
modity prices and interest rates.  e Group manages these risks
centrally through the use of non-derivative and derivative  nan-
cial instruments. Derivatives are used exclusively to mitigate non-
derivative  nancial risks, and  uctuations in their fair value may
not be assessed separately from the underlying transaction.
 e Group’s internal risk guidelines govern the universe of
actions, responsibilities and controls regarding the use of deriva-
tives. Financial transactions are recorded, assessed and processed
using proven risk management so ware, which regularly docu-
ments the e ectiveness of hedging relationships. To limit coun-
terparty risk from  nan cial transactions, the Group only enters
into transactions with prime-rated banks. Each counterparty is
assigned a counterparty limit, the utilisation of which is regu-
larly monitored.  e Group’s Board of Management is informed
internally at regular intervals about existing  nancial risks and the
hedging instruments deployed to mitigate them. Financial instru-
ments are accounted for in accordance with  .
Liquidity management
 e ultimate objective of central liquidity management is to
secure the solvency of Deutsche Post DHL and its Group com-
panies at all times. To achieve this objective, liquidity in the Group
is centralised as much as possible in cash pools and managed in the
Corporate Center.
 e centrally available liquidity reserves (funding avail-
ability), consisting of central short-term  nancial investments and
committed credit lines, are the key control parameter.  e target is
to have at least   billion available in central credit lines.
 e Group had central liquidity reserves of  . billion (pre-
vious year:  . billion) at the reporting date, consisting of central
 nancial investments amounting to  . billion plus a syndicated
credit line of   billion.
Free cash  ow is considered to be an indicator of how much
cash is available to the company for dividend payments or the
repayment of debt. Although the cash out ow arising from the
change in property, plant and equipment, and intangible assets
rose considerably, a reduced cash out ow arising from acquisitions
or divestitures, and in particular a much improved , led to a
noticeable increase in free cash  ow from   million in the pre-
vious year to   in the year under review.
. Net cash used in fi nancing activities
Net cash used in  nancing activities of  , million was
  million lower than in the previous year. Once again, the divi-
dend payment to the shareholders of Deutsche Post , which rose
by   million to   million, was the largest payment in this area.
In contrast, repayments of non-current liabilities were lower and
declined from   million to   million in the reporting period.
 e previous year was particularly a ected by the repayment of a
municipal bond in the amount of   million in the United States.
Also in the previous year, the acquisition of the remaining shares in
the air cargo company Astar Air Cargo led to payments for trans-
actions with non-controlling interests that were not matched by
equivalent payments in the year under review. Interest paid was
reduced by   million to   million.
. Cash and cash equivalents
 e cash in ows and out ows described above produced
cash and cash equivalents of  , million; see Note .  is rep-
resents a year-on-year reduction of   million. Currency trans-
lation di erences of   million had an o setting e ect.
Deutsche Post DHL Annual Report 
Consolidated Financial Statements
Notes
Other disclosures
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