Odfjell SE Annual Report 2012

odfjell se
Note 3 Derivative financial instruments
The Company uses various derivative financial instruments to reduce fluctuations in earnings and cash flow caused by volatility in foreign
exchange rates and interest rates. In addition the Company enters into derivative financial instruments to reduce currency and bunkers
exposure in subsidiaries.
See note 4 in the Group Financial Statements for more details regarding risk management.
Below overview shows status of hedging exposure per 31 December 2012 (figures in 1 000)
Time to maturity - USD amounts
Currency Sold Bought Avg. Rate < 1 year 1 - 5 years > 5 years Total
Non hedge USD 17 806 NOK 100 000 5.62 17 806 – – 17 806
Time to maturity
Interest rates Avg. Rate < 1 year 1 - 5 years > 5 years Total
Cash flow hedging USD 200 000 4.40% 150 000 50 000 – 200 000
Non hedge, IRS ¹ ) USD 275 000 2.76% – 175 000 100 000 275 000
1)
All non hedge IRS’ are classified as held for sale
Time to maturity - USD amounts
Cross currency
interest rate swaps Sold Bought Avg. Rate < 1 year 1 - 5 years > 5 years Total
Non hedge USD 273 973 From NOK to USD 6.10% 62 489 122 918 88 566 273 973
Below overview shows status of hedging exposure per 31 December 2011 (figures in 1 000)
Time to maturity - USD amounts
Currency Sold Bought Avg. Rate < 1 year 1 - 5 years > 5 years Total
Non hedge 1) USD 26 000 NOK 185 835 7.15 26 000 – – 26 000
1)
Weekly options, amount can be between 0 and USD 52 million.
Time to maturity
Interest rates Avg. Rate < 1 year 1 - 5 years > 5 years Total
Cash flow hedging USD 200 000 4.40% – 200 000 – 200 000
Non hedge, IRS USD 225 000 3.11% – 125 000 100 000 225 000
Fair value hedging USD 88 261 From NOK to USD 4.87% – 88 261 – 88 261
Odfjell SE held in addition to the derivatives above, currency FX forwards and bunkers swaps and options to reduce exposure in subsidiaries.
The exposures from these contracts are transferred to the respective subsidiary and therefore no profit or loss effect in Odfjell SE:
(USD 1 000) 2012 2011
Bunkers 3 089 2 501
Currency 1 898 1 160
Derivative financial instruments 4 987 3 661
Fair value of financial instruments
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. Derivative financial instruments and available-for-sale-investments are
recorded in the balance sheet at the fair value at the balance sheet date. The fair value is obtained from active markets or based on third
party quotes. For cash and cash equivalents and current liabilities the carrying amount is considered to be the best estimate of fair value of
these instruments due to the short maturity date. Receivables are valued at nominal value reduced by any impairment. Carrying amount is
considered to be best estimate of fair value due to short maturity date and valid terms. For dividend payable carrying amount is considered to
be best estimate of fair value due to short maturity date and valid terms. Fair value of bonds is calculated based on market values on the bonds.
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odfjell annual report 2012