Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

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AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2011, AND 2010 (EXPRESSED IN THOUSANDS OF EUROS - KEUR) The reasons for the increase in the CFaR levels with respect to 2010 are: an increase in the implicit volatilities of the foreign exchange rates during 2011 as a consequence of the turbulence of the financial markets at the end of the year and an increase in the expected size of the GBP and AUD exposures in the coming years. b) Interest rate risk The objective of the Group in terms of interest rate risk management is reducing the volatility of the net interest flows payable by the Group. In line with this goal, the Group has set up hedges that fix a significant part of the interests to be paid up to July 2014. At December 31, 2011, after taking into account the effect of the interest rate swaps in place, approximately 82.4% of the Groups’ borrowings are at fixed rate of interest (2010: 88.3%). Although the interest rate swaps which hedge the Group debt fix the amount of interests to be paid in the coming years, their fair values are sensitive to changes in the level of interest rates. In the table below you can see an estimation of the Group’s sensitivity to a 0.1% parallel shift of the interest rate curve: Sensitivity of fair value to parallel changes in the interest rate curve 31/12/2011 31/12/2010 +10 bps -10 bps +10 bps -10 bps EUR denominated debt 3,850 (3,866) 428 (437) USD denominated debt 74 (61) 72 (62) EUR accounting hedges 1,134 (1,136) 1,952 (2,057) USD accounting hedges 651 (652) 917 (1,054) Total debt and accounting hedges 5,709 (5,715) 3,369 (3,610) USD economic hedges - - 2 (1) Economic hedges - - 2 (1) Total 5,709 (5,715) 3,371 (3,611) In 2011 there has been a significant increase in the sensitivity of the EUR denominated debt to the movements of the interest rate curve with respect to the previous year. This increase is due to the issuance of a fixed rate bond in the July 2011. Although the future flows of this instrument are not sensitive to the changes in the level of interest rates, the fair value of the instrument is very sensitive to these changes. Note that in the case of the floating rate debt, the spread payable on this debt is fixed and therefore its fair value is sensitive to changes in the level of interest rates. 25
AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2011, AND 2010 (EXPRESSED IN THOUSANDS OF EUROS - KEUR) According to the table above a 10 bps drop in the level of interest rates would cause a loss in the fair value of the debt and the derivatives hedging it amounting to KEUR 5,715 at December 31, 2011, and KEUR 3,611 at December 31, 2010 respectively. However, given that changes in the fair value of the derivatives that qualify for hedge accounting are recognized directly in equity and the hedged item (the underlying debt) is measured at amortized cost, the impact of a 10 bps drop in the level of interest rate would imply no loss recognized in profit and loss at December 31, 2011, due to all derivatives apply for hedge accounting, and just KEUR 1 at December 31, 2010 respectively. In cash flow terms, in the case of a parallel drop (or rise) in the level of interest rates the lower (or higher) interests payable for the debt which is hedged, would be compensated by a similar amount of higher (or lower) debt interests to be paid during the life of the hedges (cash flow hedge concept). c) Own shares price evolution risk The Group has three different remuneration schemes outstanding which are referenced to the Amadeus shares; the Value Sharing Plan (VSP), the Performance Share Plan (PSP) and the Restricted Share Plan (RSP). The VSP is a one-off incentive program given to those employees of the Group not entitled to the first cycle of the PSP and having contractual relationship with Amadeus companies by June 30, 2010. The value of this plan fluctuates with the changes in the Amadeus share price. This value is expensed in the statement of comprehensive income within the “Personnel and related expenses” caption during the time period in which the plan is outstanding. In order to reduce the volatility in the “Operating income” of the statement of comprehensive income caused by the effect of the Amadeus share price fluctuations in the VSP, the Company entered into an equity-forward transaction which hedges approximately 79.5% (2,300,000 shares) of the notional of the VSP to the fluctuations of the Amadeus share price. Additionally, Amadeus has two recurring share-based plans known as the Performance Share Plan (PSP) and the Restricted Share Plan (RSP). According to the rules of these plans, when they mature their beneficiaries will receive a number of Amadeus’ shares which for the plans granted in 2010 and 2011 will be (depending on the evolution of certain performance conditions) between a maximum of 2,200,000 shares and a minimum of 650,000 shares, approximately. It is Amadeus intention to make use of the 2,093,760 treasury shares to settle these plans at their maturity. d) Credit risk Credit risk is the risk that a counterparty to a financial asset will cause a loss for the Group by failing to discharge an obligation. Amadeus’ cash and cash equivalents are deposited in major banks or invested through short term repurchase agreements guaranteed by prime government debt on the basis of diversification and the credit risk of the available investment alternatives. 26
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FORM ANNUAL CORPORATE GOVERNANCE RE
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A.3 Please complete the following t
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A.8 Please complete the following t
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B.1.2 Please complete the following
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Central Bank to assume a role with
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Reasons As a result of the placemen
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B.1.8 Please detail any Board membe
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Other Benefits Amount in thousands
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B.1.13 Please identify the total am
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Please specify whether the Board at
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MR. ENRIQUE DUPUY DE LOME CHAVARRI
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B.1.19 Please specify the procedure
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B.1.24 Please specify whether the c
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Please specify, if applicable, the
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Outgoing auditor Incoming auditor I
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Explanation of procedure its books,
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egulatory requirements, the proper
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l) issue a report annually, prior t
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OPERATION: The Nomination and Remun
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C. RELATED-PARTY TRANSACTIONS C.1.
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- To analyze, measure and evaluate
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shareholders and provided that said
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E.6 Please provide details of any a
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7.- Report on the remuneration poli
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) Identity of grantor and represent
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c) Transactions whose effect is equ
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2. Transactions carried out at pric
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Complies 15. That when the number o
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Complies 25. Companies should organ
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34. That whenever, due to resignati
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vii) Remuneration of executive Boar
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50. That the Audit Committee shall
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It is the power of the Nomination a
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Section B.1.13 There are no indemni
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COMPLEMENTARY INFORMATION TO THE CO
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AMADEUS AMADEUS IT IT HOLDING, HOLD
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The Human Resources Unit is respons
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In 2011 Amadeus’ Finance Function
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In addition the Audit Committee has
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Use of estimates and assumptions, a
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The SLA should include next minimum
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The Committee supports and oversees
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Key terms � “ACH”: refers to
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