Telstra 2010 Annual Report Download - page 146

Telstra Corporation Limited and controlled entities
131
Notes to the Financial Statements (continued)
(a) Risk and mitigation (continued)
(i) Interest rate risk (continued)
The weighted average interest rates on our fixed and floating rate
financial instruments as at 30 June which do not have offsetting
risk positions and the principal/notional amounts on which interest
is calculated are shown in Table A below. Interest rate positions on
our foreign cross currency and foreign interest rate swaps and on
the majority of our foreign borrowings are fully offset.
Accordingly, the majority of our instruments in the following table
represent Australian dollar interest positions.
Principal/notional amounts shown are net of discounts and as such
differ from the face value disclosed in note 17 (Table D).
(*) The average rate is calculated as the weighted average (based
on principal/notional value) effective interest rate, as at balance
date.
(#) These instruments are used to hedge our net foreign
investments.
(^) Rates on cash at bank balances represent average rates earned
on net positive cash balances after taking into account bank set-off
arrangements.
(**) Some of our forward contracts have a contractual maturity
greater than 12 months, however the amounts are not material and
have been classified as current.
18. Financial risk management (continued)
TABLE A Telstra Group
As at 30 June 2010 As at 30 June 2009
Principal/
notional
receivable/
(payable)
$m
Weighted
average
% (*)
Principal/
notional
receivable/
(payable)
$m
Weighted
average
% (*)
Fixed rate instruments - Australian interest rate
Cross currency & interest rate swap payable . . . . . . . . . . . . . . . . . . . (6,059) 6.22 (6,020) 6.31
Finance lease payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (108) 6.90 (70) 5.89
Telstra bonds and domestic loans . . . . . . . . . . . . . . . . . . . . . . . . (1,879) 7.21 (1,727) 7.16
Fixed rate instruments - Foreign interest rates
Bank deposits with maturity greater than 90 days . . . . . . . . . . . . . . . . 16 2.23 16 2.10
Finance lease payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) 21.00 (25) 12.19
Offshore loans (#) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (285) 7.43 (202) 7.38
(8,336) (8,028)
Variable rate instruments - Australian interest rates
Contractual repricing or maturity 6 months or less
Cash and cash equivalents (^) . . . . . . . . . . . . . . . . . . . . . . . . . 1,586 4.89 964 3.23
Cross currency swap receivable (#) . . . . . . . . . . . . . . . . . . . . . . 685 4.85 680 3.14
Cross currency & interest rate swap payable . . . . . . . . . . . . . . . . . . . (6,630) 6.07 (6,147) 4.33
Telstra bonds and domestic loans . . . . . . . . . . . . . . . . . . . . . . . . (1,434) 5.16 (2,280) 4.01
Offshore loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -(269) 5.03
Contractual repricing or maturity within 0 to 12 months
Forward contract liability - net (**) . . . . . . . . . . . . . . . . . . . . . . . (72) 3.60 (109) 1.63
Telstra bonds and domestic loans . . . . . . . . . . . . . . . . . . . . . . . . - - (500) 7.39
Variable rate instruments - Foreign interest rates
Contractual repricing or maturity 6 months or less
Cash and cash equivalents (^) . . . . . . . . . . . . . . . . . . . . . . . . . 442 0.93 333 0.55
Cross currency swap payable (#) . . . . . . . . . . . . . . . . . . . . . . . . (633) 0.05 (668) 0.26
Promissory notes (#) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (205) 3.23 (284) 3.45
(6,261) (8,280)
Net interest bearing debt (14,597) (16,308)