Hedging instruments
The Company concluded the following hedge agreements in 2012.
On 17 May 2012 the Company concluded CIRS (cross-currency interest rate swap) transaction for the purpose of hedging future cash flows regarding Senior Notes interest payments, denominated in euro. The Senior Notes were issued by a subsidiary, Cyfrowy Polsat Finance AB. According to the agreement the Company is a PLN fixed rate payer and the EUR fixed rate payer is bank. The termination date of the hedge relationship was agreed at 20 May 2014. The total EUR notional amount is equal to EUR 175,000,000 (not in thousands) and the PLN notional amount totals PLN 760,375,000 (not in thousands).
On 28 June 2012 the Company concluded IRS (interest rate swap) transaction for the purpose of hedging future cash flows regarding term loan interest payments (Senior Facilities Agreement). The Senior Facility Agreement was concluded to finance acquisition of Telewizja Polsat S.A. According to the agreement, the Company is a fixed rate payer and the floating rate payer is bank. The termination date of the hedge relationship was agreed at 31 December 2014. The notional amount is equal to PLN 362,869,769 (not in thousands).
On 16 November 2012 the Company concluded CIRS (cross-currency interest rate swap) transaction for the purpose of hedging future cash flows regarding Senior Notes interest payments, denominated in euro. The Senior Notes were issued by a subsidiary, Cyfrowy Polsat Finance AB. According to the agreement the Company is a PLN fixed rate payer and the banks are the EUR fixed rate payers. The termination date of the hedge relationship was agreed at 20 May 2014. The total EUR notional amount is equal to EUR 175,000,000 (not in thousands) and the PLN notional amount totals PLN 728,525,000 (not in thousands).
On 21 December 2012 the Company concluded IRS (interest rate swap) transaction for the purpose of hedging future cash flows regarding term loan interest payments (Senior Facilities Agreement). The Senior Facility Agreement was concluded to finance acquisition of Telewizja Polsat S.A. According to the agreement the Company is a fixed rate payer and the floating rate payers are banks. The termination date of the hedge relationship was agreed at 31 March 2015. The notional amount is equal to PLN 191,638,245 (not in thousands).
Impact of hedging instruments valuation on assets and liabilities as at 31 December 2012
| IRS | CIRS | Total | |
|---|---|---|---|
| Assets | |||
| Non-current | - | - | - |
| Current | - | 478 | 478 |
| Liabilities | |||
| Long-term | (6,073) | (3,083) | (9,156) |
| Short-term | (9,248) | (8,095) | (17,343) |
| Total | (15,321) | (10,700) | (26,021) |
Impact of hedging instruments valuation on assets and liabilities as at 31 December 2011
| IRS | CIRS | Total | |
|---|---|---|---|
| Assets | |||
| Non-current | - | 3,140 | 3,140 |
| Current | - | 10,828 | 10,828 |
| Liabilities | |||
| Long-term | (4,588) | (262) | (4,850) |
| Short-term | (2,099) | - | (2,099) |
| Total | (6,687) | 13,706 | 7,019 |
Impact of hedging instruments valuation on other reserves / other comprehensive income
for the year ended
| 31 December 2012 | 31 December 2011 | |
|---|---|---|
| Balance as at 1 January | 4,758 | - |
| Valuation of cash flow hedges | (33,040) | 7,019 |
| Amount transferred to income statement | 1,695 | (1,145) |
| Deferred tax | 5,955 | (1,116) |
| Change for the period | (25,390) | 4,758 |
| Balance as at 31 December | (20,632) | 4,758 |
In 2012 the hedge was valued at PLN 33,040 (negative), including PLN 1,695 recognized in the profit and loss account in correspondence with finance costs. Since the hedge was determined to be effective, the remaining loss in the amount of PLN 31,345 was recognized within the hedge valuation reserve. The total effect of the hedge valuation on the hedge valuation reserve in 2012 amounts to PLN 25,389, representing the amount of the valuation, net of related deferred tax.
As at 31 December 2011 the hedge was valued at PLN 7,019, including PLN 1,145 recognized in the profit and loss account. Since the hedge was determined to be effective, the remaining gain in the amount of PLN 5,874 was recognized within the hedge valuation reserve. Taking into consideration deferred tax, the total effect of the hedge valuation on the other reserves is positive and amounts to PLN 4,758.
