Qantas 2009 Annual Report Download - page 146

144 Qantas Annual Report 2009
Notes to the Financial Statements
for the year ended 30 June 2009
34. Financial Risk Management continued
FINANCIAL LIABILITIES
QANTAS
2009
$M
Trade creditors 466 – – 466
Bankloans–secured1 249 1,027 826 2,102
Bankloans–unsecured1 23 641 – 664
Otherloans–unsecured1 78 818 685 1,581
Leaseandhirepurchaseliabilities1 531 1,996 1,750 4,277
Derivatives–inows (270) (1,782) (815) (2,867)
Derivatives–outows 819 2,065 886 3,770
Total financial liabilities 1,896 4,765 3,332 9,993
2008
Tradecreditors 738 – – 738
Bankloans–secured1 134 637 135 906
Bankloans–unsecured1 51 706 – 757
Otherloans–unsecured1 303 703 567 1,573
Leaseandhirepurchaseliabilities1 308 1,673 285 2,266
Derivatives–inows (552) (1,894) (666) (3,112)
Derivatives–outows 1,452 2,651 891 4,994
Total financial liabilities 2,434 4,476 1,212 8,122
1.Recognisednancialliabilitycarryingvaluesareshownpre-hedging.
(B) MARKET RISK
TheQantasGrouphasexposuretomarketriskinthefollowingareas:interestrate,foreignexchangeandfuelpricerisks.Thefollowingsection
summarisesQantasGroup’sapproachtomanagingtheserisks.
(i) Interest rate risk
Interestrateriskreferstotheriskthatthefairvalueorfuturecashowsofanancialinstrumentwilluctuatebecauseofchangesinmarketinterestrates.
TheQantasGrouphasexposuretomovementsininterestratesarisingfromitsportfolioofinterestratesensitiveassetsandliabilitiesinanumberof
currencies,predominantlyinAUD,GBPandEUR.Theseprincipallyincludecorporatedebt,leasesandcash.TheQantasGroupmanagesinterestraterisk
byreferencetoadurationtarget,beingameasureofthesensitivityoftheborrowingportfoliotochangesininterestrates.Therelativemixofxedand
oatinginterestratefundingismanagedbyusinginterestrateswaps,forwardrateagreementsandoptions.
Fortheyearended30June2009,interest-bearingliabilitiesamountedto$5,503million(2008:$4,160million).Thexed/oatingsplitis37percentand
63percentrespectively(2008:37percentand63percent).Othernancialassetsandliabilitiesincludednancialinstrumentsrelatedtodebttotalling
$81million(liability)(2008:$245million(liability)).ThesenancialinstrumentsarerecognisedatfairvalueoramortisedcostinaccordancewithAASB139.
Financialinstrumentsareshownnetofimpairmentlossesfortheyearof$58million(2008:$59million).
(ii) Foreign exchange risk
Foreignexchangeriskistheriskthatthefairvalueoffuturecashowsofanancialinstrumentwilluctuatebecauseofchangesinforeignexchange
rates.Thesourceandnatureofthisriskarisefromoperations,capitalexpendituresandtranslationrisks.
Cross-currencyswapsareusedtoconvertlong-termforeigncurrencyborrowingstocurrenciesinwhichtheQantasGrouphasforecastsufcientsurplusnet
revenuetomeettheprincipalandinterestobligationsundertheswaps.Wherelong-termborrowingsareheldinforeigncurrenciesinwhichtheQantasGroup
derivessurplusnetrevenue,offsettingforwardforeignexchangecontractshavebeenusedtomatchthetimingofcashowsarisingundertheborrowings
withtheexpectedrevenuesurplusesusedtohedgetheborrowings.Theseforeigncurrencyborrowingshaveamaturityofbetweenoneand12years.Tothe
extentaforeignexchangegainorlossisincurred,andthecashowhedgeisdeemedeffective,thisisdeferreduntilthenetrevenueisrealised.
Forwardforeignexchangecontractsandcurrencyoptionsareusedtohedgeaportionofremainingnetforeigncurrencyrevenueorexpenditurein
accordancewithQantasGrouppolicy.Netforeigncurrencyrevenueandexpenditureouttoveyearsmaybehedgedwithinspecicparameters,with
anyhedgingoutsidetheseparametersrequiringapprovalbytheBoard.Purchasesanddisposalsofproperty,plantandequipmentdenominatedina
foreigncurrencyarehedgedusingacombinationofforwardforeignexchangecontractsandcurrencyoptionsatthedatearmcommitmentisentered
intotobuyorsellcurrencyunlessotherwiseapprovedbytheBoard.
1 to 5 Years
More than 5 Years
Total
Less than 1 Year