Financial statements I Notes to the consolidated financial statements continued
32. Financial risk management and financial instruments :ontinued
Interest rate risk - Profile
At the reporting date the interest rate profile of HEINEKEN's interest-bearing financial instruments was as follows:
In millions of EUR
2011
2010
Fixed rate instruments
Financial assets
95
84
Financial liabilities
(5,253)
(5,275)
Interest rate swaps floating to fixed
(1,051)
(456)
(6,209)
(5,647)
Variable rate instruments
Financial assets
431
633
Financial liabilities
(3,177)
(2,786)
Interest rate swaps fixed to floating
1,051
456
(1,695)
(1,697)
Fair value sensitivity analysis for fixed rate instruments
During 2011HEINEKEN opted to apply fair value hedge accounting on certain fixed rate financial liabilities. The fair value movements on these
instruments are recognised in profit or loss. The change in fair value on these instruments was EUR(30) million in 2011 (2010: EUR(67) million),
which was offset by the change in fair value of the hedge accounting instruments, which was EUR39 million (2010: EUR70 million).
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown
below (after tax).
Profit or loss
Equity
In millions of EUR
100 bp increase
100 bp decrease
100 bp increase
100 bp decrease
31 December 2011
Instruments designated at fair value
29
(29)
29
(29)
Interest rate swaps
(20)
21
(2)
2
Fair value sensitivity (net)
9
(8)
27
(27)
31 December 2010
Instruments designated at fair value
39
(40)
40
(40)
Interest rate swaps
(25)
27
(4)
5
Fair value sensitivity (net)
14
(13)
36
(35)
As part of the acquisition of Scottish Newcastle in 2008, HEINEKEN took over a specific portfolio of euro floating-to-fixed interest rate swaps of
which currently EUR690 million is still outstanding. 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 profit or loss under the other net financing income/
(expenses). Any related non-cash income or expenses in our profit or loss are expected to reverse over time.
132
Heineken N.V. Annual Report 2011