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94
Notes to the consolidated financial
statements, REC Group
REC Annual Report 2011
2011
Contractual cash flows in foreign exchange forward contracts at December 31, 2011
(CURRENCY INMILLION)
2012
FX FORWARD
2013
FX FORWARD
BOUGHT CURRENCY
SGD/NOK
375
0
SGD/USD
60
135
USD/NOK
60
0
SOLD CURRENCY
EUR/NOK
-675
0
EUR/USD
-15
0
USD/NOK
-440
0
FX Forward is a foreign exchange forward contract. The table above shows contractual currency amounts by year of maturity. Positive
(negative) amounts are the principal amount of the first currency mentioned bought (sold) forward with payment (receipt) of the second
currency. The EUR, SGD and USD currencies noted in the table above have spot rates to NOK of 7.75, 4.61 and 5.99 at December 31, 2011.
The table below shows the same contracts, but summarizes the future currency exposure in total for contractual cash flows in foreign
exchange forward contracts at year-end 2011 for EUR, SGD and USD.
Contractual cash flows in foreign exchange forward contracts at December 31, 2011
FUTURE CURRENCY EXPOSURE, BOUGHT CURRENCY (+), SOLD CURRENCY (-) PER YEAR
EUR
SGD
USD
(CURRENCY INMILLION)
2012
2013
2012
2013
2012
2013
USD/EUR
-15
0
0
0
20
0
EUR/NOK
-675
0
0
0
0
0
USD/NOK
0
0
0
0
-380
0
SGD/NOK
0
0
375
0
0
0
SGD/USD
0
0
60
135
-46
-110
Total
-690
0
435
135
-406
-110
For currency exposure, the REC Group is exposed to estimated net positive future operating cash flows in EUR and USD and estimated net
negative cash flows in SGD. The REC Group is hedging these cash flows by entering into derivative transactions for sale of EUR/NOK, EUR/
USD and USD/NOK and purchase of SGD/NOK and SGD/USD forward (FX Forward). The REC Group does not use hedge accounting for the
FX Forwards contracts. Compared to December 31, 2010 the REC Group has terminated the SEK forward contracts, increased USD and
SGD forward contracts and decreased EUR forward contracts in accordance with currency forecasts and the finance policy. Renewing FX
hedges that are maturing has given cash contribution throughout the year 2011 of NOK 573million.
Fair values of foreign exchange forward contracts at December 31, 2011
(NOK INMILLION)
2012
FX FORWARD
2013
FX FORWARD
BOUGHT CURRENCY
SGD/NOK
13
0
SGD/USD
2
-30
USD/NOK
11
0
SOLD CURRENCY
EUR/NOK
229
0
EUR/USD
5
0
USD/NOK
-28
0
Total
231
-30
The table above shows a specification of fair values, equaling carrying amounts, at December 31, 2011 of currency derivatives distributed
by year of maturity and currency. The main reason for the unrealized gains on FX Forwards at December 31, 2011 is the appreciation of NOK
versus EUR compared to the time the contracts were entered into.