registration document France Telecom 2009 - Orange.com

20 NOTES
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
6.5 Exposure to Market Risks
6.5.1 Interest Rate Risk Management
France Telecom S.A. seeks to balance its fi xed-rate/variablerate
exposure in euros so as to minimize interest costs by using
interest rate derivative instruments such as swaps, futures,
caps and fl oors within limits established by the Treasury and
Financing Committee.
Derivative financial instruments
Derivative fi nancial instruments outstanding at December 31,
2009, included in the calculation of the average spot interest
rate, are analyzed as follows:
(in millions of euros)
Under
one year
One
to five years
Over
five years
Notional
Instruments designated as hedges of non-current liabilities
Fixed-rate payer and fl oating-rate receiver swaps 600 600 230 1,430
Floating-rate payer and fi xed-rate receiver swaps 394 1,170 638 2,202
Floating-rate payer and fl oating-rate receiver swaps - - 115 115
Complex swaps - - 222 222
Instruments designated as hedges of current liabilities
Short-term swaps 70 - - 70
Instruments that meet the criteria for France Telecom S.A.’s
hedging policy but do not qualify for hedge accounting
Swaps designated as hedges of non-current liabilities 600 4,491 95 5,186
Swaptions - - 191 191
Caps 500 - - 500
Analysis of gross financial liabilities by interest rate range
The table below shows an analysis of gross fi nancial liabilities by interest rate range after the impact of interest rate and currency
swaps:
Data after swaps (in millions of euros)
Year ended
Dec. 31, 2009 Dec. 31, 2008
BONDS AND BANK LOANS (1)
Rate less than or equal to 5% 8,818 7,594
Between 5% and 7% 4,903 8,060
Between 7% and 9% 10,045 9,843
Over 9%
Total fixed-rate 23,766 25,497
(Weighted average spot interest rate: 5.98 % at 31/12/2009; 6.06 % at 31/12/2008)
Total floating rate 6,479 4,520
(Weighted average spot interest rate: 3.54 % at 31/12/2009; 6.05% at 31/12/2008)
Total bank loans and bonds 30,245 30,017
(Weighted average spot interest rate: 5.46 % at 31/12/2009; 6.06 % at 31/12/2008)
TOTAL NON-CURRENT FINANCIAL LIABILITIES 30,245 30,017
o/w impact of currency swaps (2) (945) (1,065)
CURRENT FINANCIAL LIABILITIES 1,768 2,411
(Weighted average spot interest rate: 0.49% at 31/12/2009; 4.03 % at 31/12/2008)
o/w impact of currency swaps (369) (705)
TOTAL GROSS FINANCIAL LIABILITIES AFTER SWAPS 32,013 32,428
o/w impact of currency swaps (1,314) (1,770)
TOTAL GROSS FINANCIAL LIABILITIES BEFORE SWAPS 30,699 30,658
(1) Non-current fi nancial liabilities including bonds convertible, exchangeable or redeemable for shares.
(2) Swaps are allocated strictly to bank loans and bonds.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM