2000 1999 1,061 246 945 Notes to the Consolidated Balance Sheet Off-balance sheet obligations Tenancy and operating leases Assets on order, in so far as not included 52 44 under tangible fixed assets Long-term raw materials purchase contracts Declarations of liability Other off-balance sheet obligations 68 32 261 14 57 72 208 14 Financial instruments Contract value on 31 December Currency hedging instruments US-dollar Currency hedging instruments other currencies Interest hedging instruments 690 180 219 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 cash flow in US dollars, which totals some US$ 630 million on an annual basis, is hedged well in advance by means of a combination of forward contracts and op tions. This policy reduces the vulnerability of export proceeds and results from short-term fluctua tions in the US dollar rate and delays the impact of long-term fluctuations in the result. As far as is possible, temporary cash surpluses are held centrally and invested in bank deposits in euros with a maximum term of one year. The risk of a reduction in interest income on these deposits due to a fall in the interest rate and the risk of an increase in interest charges due to a rise in the interest rate on interest-bearing loans, is hedged to approximately 60% through the use of interest instruments. These interest-hedging instruments include interest rate swaps, forward rate agree ments, and caps and floors. The implementation of the currency and interest policy is tied to a stringently defined policy and strict rules. Only a limited number of counterparties is used, all with excellent credit ratings. The ac tivities are closely monitored, independently of implementation. 66

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2000 | | pagina 74