1999 1998 Off-balance sheet obligations Tenancy and operating leases 44 35 Assets on order, in so far as not included under tangible fixed assets 57 59 Long-term raw materials purchase contracts 72 63 - Declarations of liability 208 213 Other off-balance sheet obligations 14 21 Financial instruments Contract value on December 31 Currency hedging instruments US-dollars 690 429 Currency hedging instruments other currencies 180 371 Interest hedging instruments 219 355 Financial instruments are used in the normal course of business to hedge the effects of fluctuations in exchange rates and interest rates on earnings.The most important inflow of foreign currency is denominated in US-dollars and is generated by export activities. The expected net cashflow in US-dollars totalling some US-dollars 580 million on an annual basis, is hedged well in advance via a combination of forward contracts and options. This policy reduces the vulnerability of export proceeds and results from term fluctuations in the US-dollar rate and delays inclusion of long-term fluctuations in the result. As far as possible, temporary cash surpluses are held centrally and invested in bank deposits in Dutch guilders with a maximum term of one year. The risk of reduction of the interest income on these deposits due to a fall in the interest rate as well as the risk of increase of interest expense due to a rise of interest rate of interest bearing debts, is hedged to approximately 30% via use of interest instruments. These interest hedging instruments comprise interest rate swaps, forward rate agreements and caps and floors. Implementation of the currency and interest policy is linked with stringently defined policy and strict rules. Only a limited number of counterparties is used, all with excellent credit ratings. The activities are carefully monitored, independently of implementation. HEINEKEN N. V. FINANCIAL STATEMENTS 19 9 9 57

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 1999 | | pagina 58