2003 2002
Notes to the Consolidated Balance Sheet
Financial instruments
Contract value as at 31 December
Currency hedging instruments in US dollars
Currency hedging instruments in other currencies
Interest-hedging instruments
649
101
1,414
904
114
1,029
Exchange risks
The foreign exchange hedging operations in 2003
produced an average exchange rate of 0.96 US dollars
to the euro on a total of 795 million US dollars.
The expected net cash flow in 2004 amounts to approx
imately 800 million US dollars. As at 31 December 2003,
544 million US dollars of the expected 2004 cash flow
had been hedged at an average exchange rate of
1.09 US dollars to the euro. The expected cash flow for
2005 has not yet been hedged as at 31 December 2003.
Interest rate risks
Heineken attempts to hedge results and cash flows
against interest rate fluctuations as far as possible by
financing either at fixed rates or at variable rates
combined with the use of interest rate instruments,
namely interest rate swaps, forward rate agreements,
caps and floors.
Market value
The market value of interest rate and exchange rate
instruments is the amount for which the financial
instruments concerned can be bought or sold in a free
market. The market value of the financial instruments
amounts to €117 million (2002: €83 million). The maturity
of the exchange rate hedging instruments is less than
one year. Interest rate hedging instruments maturing
after one year amount to €1,335 million. The market
value of long-term loans may differ from the amount
at which they are carried in the balance sheet.
INANCIAL STATEMENTS 2003
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