DHL 2013 Annual Report Download - page 57

e “ to debt” dynamic performance metric rose signicantly in the reporting
year compared with the prior year due to the improvement in funds from operations
and the decrease in debt.
Funds from operations increased by  million to a total of , million, pri-
marily due to the increase in operating cash ow before changes in working capital. e
prior-year gure had been negatively impacted by the one-time increase in the plan assets
of German pension plans (, million) and portions of the additional  payment
( million). Since the related eects were non-recurring, they were recorded under
non-recurring income / expenses, which in the previous year also included operating
restructuring payments ( million) and the interest eects of the additional 
payment ( million). In the reporting year, operating restructuring payments in the
amount of  million were recognized as non-recurring income / expenses.
Debt declined by  million year-on-year to , million in nancial year
. e decrease was mainly attributable to the good operating business trend, which
led to a substantial rise in surplus cash and near-cash investments. e increase was also
the result of bonds totalling  billion that we issued in October  to renance a bond
which matured in January . However, since reported nancial liabilities also rose
in the same amount, the bond issues had a neutral impact on debt. More information
on the nancial liabilities reported is contained in the Notes.
Cash and liquidity managed centrally
e cash and liquidity of our globally operating subsidiaries is managed centrally
by Corporate Treasury. More than   of the Group’s external revenue is consolidated
in cash pools and used to balance internal liquidity needs. In countries where this
practice is ruled out for legal reasons, internal and external borrowing and investment
are arranged centrally by Corporate Treasury. In this context, we observe a balanced
banking policy in order to remain independent of individual banks. Our subsidiaries’
intra-group revenue is also pooled and managed by our in-house bank in order to
avoid external bank charges and margins through intercompany clearing. Payment
trans actions are executed in accordance with uniform guidelines using standardised
processes and  systems. As part of the transition to , many Group companies
pooled their external payment transactions in the Group’s Payment Factory, which
executes payments in the name of the respective companies via Deutsche Post ’s
central bank accounts.
Limiting market risk
e Group uses both primary and derivative nancial instruments to limit market
risk. Interest rate risk is managed exclusively via swaps. Currency risk is additionally
hedged using forward transactions, cross-currency swaps and options. We pass on most
of the risk arising from commodity uctuations to our customers and, to some extent,
use commodity swaps to manage the remaining risk. e parameters, responsibilities
and controls governing the use of derivatives are laid down in internal guidelines.
Note 
53Deutsche Post DHL 2013 Annual Report
Report on Economic Position
Financial position
Group Management Report