2003
95 Heineken N.V. Annual Report 2004 Financial Statements 2004 Notes to the Consolidated Balance Sheet
2004
Financial instruments
Contract value as at 31 December:
Currency hedging instruments in US dollars
Currency hedging instruments in other currencies
Interest-hedging instruments
741
208
1,502
649
101
1,414
Exchange risks
The foreign exchange hedging operations in 2004 produced an average exchange rate of 1.13 US dollars
to the euro on a total of 770 million US dollars. The expected net cash flow in 2005 amounts to approxi
mately 810 million US dollars. As at 31 December 2004,706 million US dollars of the expected 2005 cash
flow had been hedged at an average exchange rate of 1.27 US dollars to the euro. The expected cash
flow for 2006 had not yet been hedged as at 31 December 2004.
Interest rate risks
As far as possible, Heineken opts for a 50/50 mix of fixed and variable interest rates in its financing
operations, possibly combined with the use of interest rate instruments. The composition of the
interest-bearing debt as at 31 December 2004 reflects this endeavour. The interest rate instruments
used are 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
instrument amounts to €40 million (2003: €117 million). The maturity of the exchange rate hedging
instruments is less than one year. Interest rate hedging instruments maturing after one year amount
to €1,337 million. The market value of long-term loans may differ from the amount at which they are
carried in the balance sheet.
