Cash flow sensitivity analysis for variable rate instruments
Achangeof 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 2010.
Profit or loss
Equity
100 bp increase
100 bp decrease
100 bp increase
100 bp Decrease
31 December 2011
Variable rate instruments
(20)
20
(20)
20
Net interest rate swaps fixed to floating
8
(8)
8
(8)
Cash flow sensitivity (net)
(12)
12
(12)
12
31 December 2010
Variable rate instruments
(16)
16
(16)
16
Net interest rate swaps fixed to floating
3
(3)
3
(3)
Cash flow sensitivity (net)
(13)
13
(13)
13
Commodity price risk
Commodity price risk is the risk that changes in commodity prices will affect HEINEKEN's income. The objective of commodity price risk management
is to manage and control commodity risk exposures within acceptable parameters, whilst optimising the return on risk. The main commodity exposure
relates to the purchase of cans, glass bottles, malt and utilities. Commodity price risk is in principle addressed by negotiating fixed prices in supplier
contracts with various contract durations. So far, commodity hedging with financial counterparties by the Company is limited to the incidental
sale of surplus C02 emission rights and to aluminium hedging and, to a limited extent, gas hedging, which is done in accordance with risk policies.
EIEINEKEN does not enter into commodity contracts other than to meet El EINEKEN's expected usage and sale requirements. As at 31 December 2011
the market value of aluminium swaps was EUR(22) million (2010: EUR12 million).
Cash flow hedges
The following table indicates the periods in which the cash flows associated with derivatives that are cash flow hedges, are expected to occur.
2011
In millions of EUR
Carrying
amount
Expected
cash flows
Less than
1 year
1 -2 years
2-5 years
More than
5 years
Interest rate swaps:
Assets
170
1,904
120
107
726
951
Liabilities
m
(1,786)
(136)
(108)
(658)
(884)
Forward exchange contracts:
Assets
15
1,078
871
207
-
-
Liabilities
(49)
(1,111)
(896)
(215)
-
-
Commodity derivatives:
Assets
11
11
11
-
-
-
Liabilities
(36)
(36)
(32)
(4)
-
-
63
60
(62)
(13)
68
67
The periods in which the cash flows associated with forward exchange contracts that are cash flow hedges are expected to impact profit or loss
is on average two months earlier than the occurrence of the cash flows as in the above table.
Eleineken N.V. Annual Report 2011
133