Daimler Annual Report 2011 - Alle jaarverslagen

The consolidated net profit for 2011 includes net losses
(before income taxes) of €42 million (2010: net gains
of €2 million) attributable to the ineffectiveness of derivative
financial instruments entered into for hedging purposes.
In 2011, the discontinuation of cash flow hedges as a result
of non-realizable hedged items resulted in gains of €3 million
(2010: gains of €3 million).
The maturities of the interest rate hedges and cross currency
interest rate hedges correspond with those of the underlying
transactions. As of December 31, 2011, Daimler utilized derivative
instruments with a maximum maturity of 39 months
(2010: 44 months) as hedges for currency risks arising from
future transactions.
Nominal values of derivative financial instruments.
Table 7.78 shows the nominal values of derivative financial
instruments entered into for the purpose of hedging currency
risks, interest rate risks and commodity price risks that arise
from the Group’s operating and/or financing activities.
Most of the hedging transactions for which the effects from
the mark-to-market valuation of the hedging instrument and
the underlying transaction to a large extent offset each other
in the consolidated statement of income/loss are not classified
for hedge accounting treatment.
Explanations regarding the hedging of exchange rate risks,
interest rate risks and commodity price risks can be found
in Note 31 in the sub-item “Finance market risk.”
31. Risk management
General information on financial risk
As a result of its businesses and the global nature of
operations, Daimler is exposed in particular to market risks from
changes in foreign currency exchange rates and interest
rates, while commodity price risks arise from procurement.
An equity price risk results from investments in listed companies
(including EADS, Kamaz, Renault and Nissan). In addition,
the Group is exposed to credit risks from its lease and financing
activities and from its operating business (trade receivables).
With regard to the lease and financing activities credit risks
arise from operating lease contracts, finance lease contracts
and financing contracts. Furthermore, the Group is exposed
to liquidity risks relating to its credit and market risks or a deterioration
of its operating business or financial market disturbances.
If these financial risks materialize, they could adversely
affect Daimler’s financial position, cash flows and profitability.
Daimler has established guidelines for risk controlling procedures
and for the use of financial instruments, including a clear
segregation of duties with regard to financial activities, settlement,
accounting and the related controlling. The guidelines
upon which the Group’s risk management processes are based
are designed to identify and analyze these risks throughout
the Group, to set appropriate risk limits and controls and to
monitor the risks by means of reliable and up-to-date administrative
and information systems. The guidelines and systems
are regularly reviewed and adjusted to changes in markets
and products.
7.78
Nominal values of derivative financial instruments
In millions of euros
Nominal values
December 31, 2011 December 31, 2010
thereof fair value
thereof fair value
hedges and cash
hedges and cash
flow hedges Nominal values flow hedges
Hedging of currency risks from receivables/liabilities
Forward exchange contracts 5,033 – 7,192 –
Cross currency interest rate swaps 6,929 1,825 9,475 1,950
Hedging of currency risks from forecasted transactions
Forward exchange contracts and currency options 28,394 27,372 24,032 23,199
Hedging of interest rate risks from receivables/liabilities
Interest rate swaps 20,313 18,837 21,312 17,430
Hedging of commodity price risks from forecasted transactions
Forward commodity contracts 2,014 1,484 831 736
62,683 49,518 62,842 43,315
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