registration document France Telecom 2009 - Orange.com

20 CONSOLIDATED
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
STATEMENTS
The impact of fair value hedges on the income statement are shown in the table below:
(in millions of euros) 2009 2008 2007
Gain (loss) recognized on hedging instruments 23 172 (171)
Change in accrued interest 69 (7) 13
Gain (loss) recognized on hedging instruments
(excluding accrued interest) (1) (46) 179 (184)
Gain (loss) recognized on hedged items 59 (170) 198
Ineffectiveness (finance costs, net) 13 9 14
(1) Used in effectiveness tests.
On November 5, 2009, the fair value hedging relationship of
the bond with a nominal amount of 250 million pounds sterling,
maturing on March 29, 2037, was discontinued. As of that date,
the interest rate component excluding accrued interest on the
associated hedging instrument amounted to 18 million euros
and is amortized through profi t or loss over the remaining term
of the initial hedging relationship.
23.3 Net investment hedges
In 2008, the France Telecom Group set up derivatives to hedge
its foreign exchange risk on its net investment in Switzerland.
These are cross currency interest rate swaps for which the
foreign exchange component qualifi ed as a net investment
hedge.
At December 31, 2009, the hedged nominal amount totaled
633 million Swiss francs for net assets in Swiss francs amounting
to 944 million euros excluding net debt (s ee Note 28, Other
information on exposure to market risks).
The change in the net investment hedge reserve is analyzed as follows:
(in millions of euros) 2009 2008 2007
Gain (loss) recognized in other comprehensive income during the period (0) (26) -
Reclassifi cation adjustment in net income for the period - - -
Effectiveness portion recycled to income statement - - -
Ineffectiveness (fi nance costs, net) 5 (1) -
23.4 Hedging instruments reserves
In accordance with cash fl ow and net investment hedge
accounting, the portion of gain or loss realized on the hedging
instrument that is deemed to be effective is recognized in other
comprehensive income in hedging instruments reserves.
(in millions of euros) December 31, 2009 December 31, 2008 December 31, 2007
Effective component of cash fl ow hedges (76) 500 220
Reserve to be amortized for discontinued hedges 516 123 (12)
Effective component of net investment hedges (27) (26) -
Contribution of France Telecom S.A. (1) 413 597 208
Contribution of other entities (0) 43 (1)
TOTAL 413 640 207
o/w share attributable to owners of the parent company 412 645 211
o/w share attributable to non-controlling interest 1 (5) (4)
(1) Mainly includes interest rate impact on cross-currency interest rate swaps
In 2009, the transfer of the effective component of cash
fl ow hedges in reserves to be amortized is mainly related to
the termination of cross-currency interest rate swaps and to
hedging relationships that were discontinued in the fi rst quarter
of 2009.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM