293
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 24. Financial instruments and management of financial risks
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Interest rate hedges
Interest rate risk management instruments used by Vivendi include
pay-floating and pay-fixed interest rate swaps. Pay-floating swaps
effectively convert fixed rate borrowings to LIBOR and EURIBOR indexed
ones. Pay-fixed interest rate swaps convert floating rate borrowings into
fixed rate borrowings. These instruments enable the group to manage
and reduce volatility in future cash flows required for interest payments
on borrowings.
As of December 31, 2013, the portfolio of Vivendi’s interest rate hedging
instruments included the following swaps:
a pay-floating interest rate swap with a notional amount of
€450 million, maturing in 2017, set up in 2012;
a pay-fixed interest rate swap with a notional amount of
€450 million, maturing in 2017, set up in 2010 for €750 million
(€300 million was terminated early in 2012);
a pay-fixed interest rate swap with a notional amount of
€1,000 million, maturing in 2016, set up in 2011;
a pay-fixed interest rate swap with a notional amount of
€750 million, maturing in 2019, set up in 2013 and backed by
the bond with the same notional amount and maturity, issued in
July 2013; and
a pay-fixed interest rate swap with a notional amount of
€400 million, maturing in 2016, set up in 2013.
The tables below show the notional amounts of interest rate risk management instruments used by Vivendi:
(in millions of euros)
December 31, 2013
Notional amounts
Fair value
Total
2014 2015 2016 2017 2018
After
2018 Assets Liabilities
Pay-fixed interest rate swaps
450
450
-
(7)
Pay-floating interest rate swaps
(2,600)
(1,400)
(450)
(750)
88
-
Net position at fixed interest rate
(2,150)
(1,400)
(a)
-
(750)
88
(7)
Breakdown by accounting category of rate hedging instruments
Cash flow hedge
-
-
-
Fair value hedge
(2,150)
(1,400)
(750)
46
-
Economic hedging
(b)
-
(a)
-
42
(7)
(in millions of euros)
December 31, 2012
Notional amounts
Fair value
Total
2013 2014 2015 2016 2017
After
2017 Assets Liabilities
Pay-fixed interest rate swaps
450
450
-
(10)
Pay-floating interest rate swaps
(1,450)
(1,000)
(450)
104
-
Net position at fixed interest rate
(1,000)
(1,000)
(a)
-
104
(10)
Breakdown by accounting category of rate hedging instruments
Cash flow hedge
-
-
-
Fair value hedge
(1,000)
(1,000)
49
-
Economic hedging
(b)
-
(a)
-
55
(10)
(a)
Includes pay-floating interest rate swaps for a notional amount of €450 million as well as pay-fixed swaps for a notional amount of €450 million,
maturing in 2017, both of which qualified as economic hedges.
(b)
The economic hedging instruments relate to derivative financial instruments which are not eligible for hedge accounting pursuant to IAS 39.
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Outstanding and average income
from investments
In 2013, average cash and cash equivalents amounted to €0.9 billion
(compared to €0.6 billion in 2012), bearing interest at floating rates. The
average interest income rate amounted to 2.69% in 2013 (compared to
4.62% in 2012).
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Sensitivity to changes in interest rates
As of December 31, 2013, given the relative weighting of the group’s
fixed-rate and floating-rate positions, an increase of 100 basis points
in short-term interest rates (or a 100 basis points decrease) would have
resulted in a €56 million increase in interest expense (or a €56 million
decrease), compared to a €63 million increase/(decrease) as of
December 31, 2012.
