As part of the acquisition of Scottish Newcastle in 2008, Heineken took over a specific portfolio of euro floating-
to-fixed interest rate swaps with a notional amount of EUR 1,290 million. Although interest rate risk is hedged
economically, it is not possible to apply hedge accounting on this portfolio. A movement in interest rates will
therefore lead to a fair value movement in the income statement under the other net financing income/
(expenses). Any related non-cash income or expenses in our income statement are expected to reverse over time.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates constantly applied during the reporting period would have
increased (decreased) equity and profit or loss by the amounts shown below (after tax). This analysis assumes
that all other variables, in particular foreign currency rates, remain constant and excludes any possible change
in fair value of derivatives at period-end because of a change in interest rates. The analysis is performed on the
same basis for 2008.
Profit or loss Equity
loo bp loo bp loo bp loo bp
In millions of EUR increase decrease increase decrease
31 December 2009
Variable rate instruments
at interest rate swaps floating to fixed
ash flow sensitivity (net)
1 December 2008
V ariable rate instruments
et interest rate swaps floating to fixed
ash flow sensitivity (net)
i »ther market price risk
anagement of Heineken monitors the mix of debt and equity securities in its investment portfolio based on
iarket expectations. Material investments within the portfolio are managed on an individual basis.
he primary goal of Heineken's investment strategy is to maximise investment returns in order to partially
leet its unfunded defined benefit obligations; management is assisted by external advisors in this regard.
ammodity risk is the risk that changes in commodity price will affect Heineken's income. The objective
f commodity risk management is to manage and control commodity risk exposures within acceptable
arameters, whilst optimising the return on risk. The main commodity exposure relates to the purchase of
ans, glass bottles, malt and utilities. Commodity risk is in principal addressed by negotiating fixed prices in
ipplier contracts with various contract durations. So far, commodity hedging with financial counterparties
y the Company is limited to the incidental sale of surplus C02 emission rights and aluminium hedging, which
done in accordance with risk policies. Heineken does not enter into commodity contracts other than to meet
eineken's expected usage and sale requirements. As at 31 December 2009, the underlying amount of
luminium swaps was EUR 8 million. Off-balance sheet exposure as at 31 December 2009 EUR 3,564 million and
i principal represent long-term supply contracts of raw materials.
Annual Report 2009 - Heineken N.V.