Ryanair 2008 Annual Report Download - page 61

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61
Derivative financial instruments, all of which have been recognised at fair value in the Group’s
balance sheet, are analysed as follows:
2008 2007
1000 1000
Current assets
Gains on cash flow hedging instruments – maturing after one year..................................................... 10,228 52,736
10,228 52,736
Total derivative assets.......................................................................................................................... 10,228 52,736
Current liabilities
Losses on fair value hedging instruments – maturing within one year ................................................ (44,380) (17,217)
Losses on cash flow hedging instruments – maturing within one year ................................................ (97,331) (38,836)
(141,711) (56,053)
Non-current liabilities
Losses on fair value hedging instruments – maturing after one year ................................................... (324) (236)
Losses on cash flow hedging instruments – maturing after one year ................................................... (75,361) (58,430)
(75,685) (58,666)
Total derivative liabilities .................................................................................................................... (217,396) (114,719)
Net derivative financial instrument position at year end ............................................................... (207,168) (61,983)
All of the above gains and losses were unrealised at the period end.
The table above includes the following derivative arrangements:
Fair value Fair value
2008 2007
1000 1000
Interest rate swaps
Less than one year ................................................................................................
...........................
(10,492) (16,546)
More than one year................................................................................................
..........................
(49,035) (55,812)
(59,527) (72,358)
Foreign currency forward contracts
Less than one year ................................................................................................
...........................
(127,006) (39,507)
More than one year................................................................................................
..........................
(26,650) (2,854)
(153,656) (42,361)
Commodity forward contracts
Less than one year ................................................................................................
...........................
6,015 52,736
6,015 52,736
Net derivative position at year end................................................................
...............................
(207,168) (61,983)
Additional information in relation to the above interest rate swaps and forward currency contracts (i.e. notional value and weighted average
interest rates) can be found in note 11.
Interest rate swaps are primarily used to convert a portion of the Group’s floating rate exposures on
borrowings and operating leases into fixed rate exposures and are set so as to match exactly the critical terms
of the underlying debt or lease being hedged (i.e. notional principal, interest rate settings, repricing dates).
These are all classified as cash flow hedges of the forecasted variable interest payments and rentals due on
the Group’s underlying debt and operating leases and have been determined to be highly effective in
achieving offsetting cash flows. Accordingly no material level of ineffectiveness has been recorded in the
income statement relating to these hedges in the current year. Unrealised losses on the Group’s interest rate
swaps of 159.5m (2007: 172.4m) will be amortised to the income statement from equity over the period in
which forecasted interest and lease payments will be made (typically 1-12 years from the year end), as an
offset to the related interest or rental expense.