Qantas 2009 Annual Report Download - page 147

145 Qantas Annual Report 2009
Notes to the Financial Statements
for the year ended 30 June 2009
34. Financial Risk Management continued
Asat30June2009,55percent(2008:68percent)offorecastoperationalandcapitalexpenditureforeignexchangeexposureslessthanoneyearand
18percent(2008:20percent)ofexposuresgreaterthanoneyearbutlessthanveyearshavebeenhedged.Asat30June2009,totalunrealised
exchangegainsonhedgesofnetrevenuedesignatedtoservicelong-termdebtwere$121million(2008:$425milliongain).
Fortheyearended30June2009,othernancialassetsandliabilitiesincludederivativenancialinstrumentsusedtohedgeforeigncurrency,including
hedgingoffuturecapitalandoperatingexpenditurepayments,totalling$231million(netasset)(2008:$615million(netliability)).
These are recognised at fair value in accordance with A ASB 139.
(iii) Fuel price risk
TheQantasGroupusesoptionsandswapsonaviationfuel,gasoilandcrudeoiltohedgetheexposuretomovementsinthepriceofaviationfuel.
HedgingisconductedinaccordancewithQantasGrouppolicy.Upto100percentofestimatedfuelconsumptionoutto12monthsmaybehedgedand
upto50percentinthesubsequent12months,withanyhedgingoutsidetheseparametersrequiringapprovalbytheBoard.Asat30June2009,71per
cent(2008:65percent)offorecastfuelexposurelessthanoneyearandtwopercent(2008:twopercent)offorecastfuelexposurebetweenoneand
veyearshavebeenhedged.
Fortheyearended30June2009,othernancialassetsandliabilitiesincludefuelderivativestotalling$154million(liability)(2008:$840million(asset)).
These are recognised at fair value in accordance with A ASB139.
(iv) Sensitivity on interest rate, foreign exchange and fuel price risk
Thefollowingtablesummarisestheimpactofreasonablypossiblechangesinmarketriskonnetprotandequity.Forthepurposeofthisdisclosure,the
following assumptions were used:
•100basispointsincreaseanddecreaseinallrelevantinterestrates;
•20percent(2008:10percent)increaseanddecreaseinallcurrencypairs;
•20percent(2008:10percent)increaseanddecreaseinallrelevantfuelindices;
•sensitivityanalysisassumesdesignationsandhedgeeffectivenesstestingresultsasat30June2009remainunchanged;and
•sensitivityanalysisisisolatedforeachrisk.Forexample,fuelpricesensitivityanalysisassumesallothervariables,includingforeignexchangerates,
remain constant.
•sensitivityanalysisonforeigncurrencypairsandfuelindiceswereincreasedfrom10percentto20percenttoreflectvolatilemarketconditions.
Qantas Group Qantas
Net Profit Equity Net Profit Equity
2009 2008 2009 2008 2009 2008 2009 2008
100bps increase in interest rates $M $M $M $M $M $M $M $M
Variablerateinterestbearinginstruments(netdebt) 1 (24) – – 1 (24) ––
Derivatives designated in a cash flow hedge relationship – – 14 9 – – 14 9
Derivativeandxedratedebtinafairvaluehedgerelationship 4 25 –– 4 25 ––
100bps decrease in interest rates
Variablerateinterestbearinginstruments(netdebt) (1) 24 – – (1) 24 ––
Derivatives designated in a cash flow hedge – – (14) (9) – – (14) (9)
Derivativeandxedratedebtinafairvaluehedgerelationship (5) (25) – – (5) (25) ––
20% movement in foreign currency pairs
20% (2008: 10%) increase in all currency pairs (76) (32) (458) (549) (73) (32) (461) (549)
20% (2008: 10%) decrease in all currency pairs 104 43 625 704 101 43 628 704
20% movement in fuel indices
20%(2008:10%)increaseperbarrelinfuelindices 39 32 279 255 39 32 279 255
20%(2008:10%)decreaseperbarrelinfuelindices (28) (29) (204) (232) (28) (29) (204) (231)