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3. Hedges of future transactions
The Group purchases yen put options to fix the minimum exchange
rate on vehicle sales in Japan over three years. As of December 31,
2002, 2001 and 2000, the nominal amounts hedged by put options
were as follows:
(in millions of euros) 2002 2001 2000
706 453 431
The Faurecia group uses forward purchase and sale contracts and
options - all of which mature in 2003 - as hedges of commercial
transactions in progress at December 31, 2002 and transactions
planned in 2003. At December 31, 2002, 2001 and 2000, the nominal
amounts hedged for planned transactions were as follows:
(in millions of euros) 2002 2001 2000
135 122 89
4. Non-hedging transactions
The gains and losses recorded by PSA International, the finance
subsidiary specialized in managing currency risks on financial
instruments not qualifying as hedges, generally correspond to gains and
losses on closed positions – representing foreign exchange purchase and
sale contracts for the same amount – which serve to fix margins without
exposing the subsidiary to the risk of losses resulting from an
unfavorable future movement in exchange rates. Pre-tax profits on these
trading transactions amounted to €4.6 million in 2002, €5.5 million in
2001 and €4 million in 2000.
5. Currency risk
The net position of the manufacturing and sales companies in the main foreign currencies is as follows:
(in millions of euros) GBP YEN USD PLN CHF BRL Other
Total assets 362 84 236 104 24 6 407
Total liabilities (510) (3) (172) - (152) (73) (142)
Net position before hedging (148) 81 64 104 (128) (67) 265
Off-balance sheet position 147 (81) (64) (104) 128 67 (260)
Net position after hedging (1) - - - - - 5
The above table shows the Group position arising from all transactions recognized in the balance sheet at December 31, 2002. The Group has also
hedged currency risks on future vehicle sales in Japan (note 47 3).
6. Interest rate risk
(in millions of euros)
intraday 1 to More than
to 1 year 5 years 5 years Total
Total assets 6,672 62 40 6,774
Total liabilities (4,307) (409) (1,734) (6,450)
Net position
before hedging 2,365 (347) (1,694) 324
Off-balance
sheet position (1,705) 146 1,559 -
Net position
after hedging 660 (201) (135) 324
This table analyzes fixed rate assets and debt by maturity and adjustable
rate assets and debts based on the next rate adjustement date.
In the statement of off-balance sheet items, swaps and other derivative
instruments are reported as positive amounts (lender leg) and negative
amounts (borrower leg).
A 1 point decrease in interest rates would have the effect of reducing
net interest income by €4 million.
The net position after hedging for assets and liabilities due beyond
1 year mainly concerns employee profit-sharing reserves (€181 million)
and obligations under finance leases (€168 million).
d) Finance companies
As of December 31, 2002, 2001 and 2000, after eliminating
intercompany transactions, outstanding contracts on financial
instruments used to match interest and exchange rates on customer
loans and the related refinancing were as follows:
1. Hedges of actual transactions
(in millions of euros) 2002 2001 2000
Currency risk
Currency swaps 1,488 2,749 1,718
Forward contracts 1,253 552 188
2,741 3,301 1,906
Interest rate risk
Hedges of financing
transactions
- Interest rate swaps 23,120 17,547 11,317
- Purchases of caps and collars 192 372 175
- Sales of floors - - 173
- FRA - - 20
- Futures 340 - -
- Swaptions - 518 -
23,652 18,437 11,685
174
PSA PEUGEOT CITROËN - APPENDICES TO THE MANAGING BOARD REPORT