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93
QANTAS ANNUAL REPORT 2014
25. DERIVATIVES AND HEDGING INSTRUMENTS
The following section summarises derivative financial instruments in the Consolidated Income Statement, Consolidated Statement
of Comprehensive Income, Consolidated Balance Sheet and the Consolidated Statement of Changes in Equity.
(A) OTHER FINANCIAL ASSETS AND LIABILITIES
Qantas Group
2014
$M
2013
$M
NET OTHER FINANCIAL ASSETS/(LIABILITIES)
Derivatives
Designated as cash flow hedges (98) 48
Designated as fair value hedges (10) (20)
De-designated derivatives (7) 3
Not qualifying for hedge accounting (including time value of options) 73 36
Net other financial assets/(liabilities) (42) 67
Net other financial assets/(liabilities) included in the Consolidated Balance Sheet
Other financial assets – current 172 180
Other financial assets – non-current 34 27
Other financial liabilities – current (182) (86)
Other financial liabilities – non-current (66) (54)
Net other financial assets/(liabilities) (42) 67
(B) OFFSETTING OTHER FINANCIAL ASSETS AND LIABILITIES
The Group enters into contractual arrangements such as the International Swaps and Derivatives Association (ISDA) Master
Agreement where, upon the occurrence of a credit event (such as default) a termination value is calculated and only a single net
amount is payable in settlement of all transactions that are capable of offset under the contractual terms.
The ISDA agreements do not meet the criteria for offsetting in the Consolidated Balance Sheet. This is because the Group does
not have any current legal enforceable right to offset recognised amounts, because the right to offset is enforceable only on the
occurrence of future events.
The following table sets out the carrying amounts of recognised financial assets and liabilities that are subject to the above agreements.
Qantas Group
$M
2014 2013
Amounts
Presented in the
Consolidated
Balance Sheet
Amounts
Subject
to Netting Net Amount
Amounts
Presented in the
Consolidated
Balance Sheet
Amounts
Subject
to Netting Net Amount
Financial assets
Other financial assets 206 (114) 92 207 (61) 146
Financial liabilities
Other financial liabilities (248) 114 (134) (140) 61 (79)
Total (42) –(42) 67 –67
(C) HEDGE RESERVE
At 30 June 2014, the Qantas Group held various types of derivative financial instruments that were designated as cash flow hedges of
future forecast transactions. These were hedging of:
–Future foreign currency revenue receipts and operational payments by future debt repayments in foreign currency and exchange
derivative contracts (forwards, swaps or options)
–Future aviation fuel purchases by crude, gasoil and jet kerosene derivative contracts (forwards, swaps or options)
–Future interest payments by interest rate derivative contracts (forwards, swaps or options)
–Future capital expenditure payments by foreign exchange derivative contracts (forwards or options)