34
11.- Derivative financial instruments
The Company uses derivative financial instruments to hedge the risks to which its business
activities, operations and future cash flows are exposed. As part of these transactions, the
Company has arranged certain hedging financial instruments, the detail of which is as follows:
Foreign currency hedges
The Company uses currency derivatives to hedge significant future transactions and cash flows.
The instruments purchased are denominated in US dollars.
The Company applies hedge accounting and documents the hedging relationships and the
measurement of their effectiveness as required by current legislation. In all cases, these include
the cash flow hedges of firm commitments, of which the EUR/USD forward exchange rate
exposures to possible variations in the cash flows payable in euros associated with broadcasting
rights is hedged.
For 2013, due to the commencement of the period in which the broadcasting rights being hedged
come into force, EUR 52 thousand was capitalised to inventories from equity. For 2012, inventories
were reduced by EUR 303 thousand with a charge to equity. The changes in the fair value of the
derivatives arranged by the Company depend on the change in the EUR/USD exchange rate and
on the euro yield curve.
At 31 December 2013, the Company had arranged instruments to hedge its foreign currency asset
and liability positions amounting to USD 89,863 thousand, at a weighted average exchange rate of
EUR 1.3117/USD 1. At 31 December 2012, the Company had arranged hedging instruments
amounting to USD 89,611 thousand, at a weighted average exchange rate of EUR 1.3058/USD 1.
At the end of 2013 and 2012, the total amount of outstanding forward currency contracts entered
into by the Group is as follows (the terms reflect the moment in which the hedged portion is
recognised and in which the value of the hedging instruments is adjusted in equity as an increase
in/reduction of inventories):
Fair value
(thousands of euros)
Classification
Type
Maturity
Amount
arranged
(thousands
of euros)
Ineffectiveness
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
Foreign currency
hedges
Foreign currency
hedge
Purchase of USD
2014
62,520
-
698
3,025
Foreign currency
hedges
Foreign currency
hedge
Purchase of USD
2015
7,313
-
-
189
Foreign currency
hedges
Foreign currency
hedge
Purchase of USD
2016
8,053
-
-
18
The information in this connection at 31 December 2012 is as follows:
Fair value
(thousands of euros)
Classification
Type
Maturity
Amount
arranged
(thousands
of euros)
Ineffectiveness
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
Foreign currency
hedges
Foreign currency
hedge
Purchase of USD
2013
60,575
-
1,245
485
Foreign currency
hedges
Foreign currency
hedge
Purchase of USD
2014
8,053
-
-
197
At 31 December 2013, the fair value of the Company’s foreign currency derivatives, which are
designated and are effective as cash flow hedges, was estimated to be positive by EUR 698
thousand and negative by EUR 3,232 thousand (31 December 2012: positive by EUR 1,245
thousand and negative by EUR 682 thousand). This amount was deferred and recognised in equity.
