Page 356 - 2012 Annual Report

356 VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
IV - VIVENDI SA 2012 STATUTORY FINANCIAL STATEMENTS
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Note 26 Foreign Currency Risk Management
Note 27. Fair Value of Derivative Instruments
Note 26. Foreign Currency Risk Management
Vivendi’s foreign currency risk management seeks to hedge highly
probable budget exposures, resulting primarily from monetary flows
generated by operations performed in currencies other than the euro and
from firm commitment contracts, essentially in relation to the acquisition
by subsidiaries of editorial content including sports, audiovisual and film
rights, realized in foreign currencies. It should be noted that:
✱ Vivendi SA is the sole counterparty for foreign currency transactions
within the Group, unless specific regulatory or operational restrictions
require otherwise;
✱ all foreign currency hedging transactions are backed by an identified
underlying economic item; and
✱ all identified exposures are hedged at a minimum of 80% for
exposures related to forecasted transactions and 100% for firm
commitment contracts.
In addition, Vivendi may also hedge foreign currency exposure resulting
from foreign currency-denominated financial assets and liabilities
by entering into currency swaps and forward contracts enabling the
refinancing or investment of cash balances in euros or other local
currencies, and use monetary or derivative instruments, if applicable, to
manage its foreign currency exposure to inter-company current accounts
denominated in foreign currencies (which qualify for hedge accounting
pursuant to the French PCG).
As of December 31, 2012, the market value of derivative instrument
portfolios classified as interest rate and currency hedges, pursuant to
Article 372 of the French General Accounting Code, was €93.8 million
and -€13.7 million, respectively (theoretical cost of unwinding). As of
December 31, 2011, the fair values of these hedging portfolios were
€59.7 million and €36.7 million, respectively.
As of December 31, 2012, aggregate derivative financial instruments,
which did not qualify for hedge accounting, totaled €0.0 million (theoretical
cost of unwinding) compared to -€0.3 million as of December 31, 2011.
(in millions of euros)
As of December 31, 2012 As of December 31, 2011
Derivative financial instruments Derivative financial instruments
qualifying for hedge
accounting
not qualifying for
hedge accounting
qualifying for hedge
accounting
not qualifying for
hedge accounting
Interest rate risk management 93.8 0.0 59.7 (0.3)
fixed-rate payer swaps (10.3) - - (0.3)
floating-rate payer swaps 104.1 - 59.7 -
Foreign currency risk management (13.7) 0.0 36.7 0.0
The table below shows the notional amount of currency to be delivered or received under currency instruments (currency swaps and forward contracts).
Positive amounts indicate currency receivable and negative amounts currency deliverable.
(in millions of euros)
December 31, 2012
EUR GBP PLN USD
Other
currency
Sales against the euro 777 (586) (8) (59) (124)
Sales against other currencies - - 7 (7) -
Purchases against the euro (1,487) 34 40 1,309 104
Purchases against other currencies 157 (8) (261) 112 -
(553) (560) (222) 1,355 (20)