Derivative Financial Instruments

12 Months Ended

Dec. 31, 2019

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Derivative Financial Instruments

27.  Derivative Financial Instruments

The fair values of derivative financial instruments are analysed by year of maturity and by accounting designation as follows:

	Fair value hedges €m		Cash flow hedges €m		Net investment hedges €m		Not designated as hedges €m		Total €m
At 31 December 2019
Derivative assets
Within one year - current assets		-		3		2		1		6
Between one and two years		-		1		-		-		1
Between three and four years		23		-		-		-		23
After five years		52		-		-		-		52
Non-current assets		75		1		-		-		76
Total derivative assets		75		4		2		1		82
Derivative liabilities
Within one year - current liabilities		-		(8)		(4)		(4)		(16)
Between one and two years - non-current liabilities		-		(1)		-		-		(1)
Total derivative liabilities		-		(9)		(4)		(4)		(17)
Net asset/(liability) arising on derivative financial instruments		75		(5)		(2)		(3)		65
The equivalent disclosure for the prior year is as follows:
At 31 December 2018
Derivative assets
Within one year - current assets		-		3		10		2		15
Between one and two years		-		2		-		-		2
Between two and three years		-		1		-		-		1
Between four and five years		24		-		-		-		24
After five years		3		-		-		-		3
Non-current assets		27		3		-		-		30
Total derivative assets		27		6		10		2		45
Derivative liabilities
Within one year - current liabilities		-		(32)		(2)		(7)		(41)
Between one and two years		-		(2)		-		-		(2)
After five years		(16)		-		-		-		(16)
Non-current liabilities		(16)		(2)		-		-		(18)
Total derivative liabilities		(16)		(34)		(2)		(7)		(59)
Net asset/(liability) arising on derivative financial instruments		11		(28)		8		(5)		(14)

At 31 December 2019 and 2018, the Group had no master netting or similar arrangements, collateral posting requirements, or enforceable right of set-off agreements with any of its derivative counterparts.

Fair value hedges consist of interest rate swaps. These instruments hedge risks arising from changes in asset/liability fair values due to interest rate movements.

Cash flow hedges consist of forward foreign exchange and commodity contracts and currency swaps. These instruments hedge risks arising to future cash flows from movements in foreign exchange rates and commodity prices. Cash flow hedges are expected to affect profit and loss over the period to maturity.

Net investment hedges comprise cross-currency swaps and hedge changes in the value of net investments due to currency movements.

The profit/(loss) arising on fair value, cash flow, net investment hedges and related hedged items reflected in the Consolidated Income Statement is shown below:

	2019 €m		2018 €m		2017 €m
Fair value of hedge instruments		64		(12)		(16)
Fair value of the hedged items		(64)		11		18
Components of other comprehensive income - cash flow hedges
Gains/(losses) arising during the year:
- commodity forward contracts		27		(38)		9
- currency forward contracts		(3)		(2)		(1)
Total		24		(40)		8

Fair value hierarchy	2019 Level 2 €m		2018 Level 2 €m
Assets measured at fair value
Fair value hedges - interest rate swaps		75		27
Cash flow hedges - cross-currency and commodity forwards		4		6
Net investment hedges - cross-currency swaps		2		10
Not designated as hedges (held for trading) - cross-currency swaps and forward foreign exchange contracts		1		2
Total		82		45
Liabilities measured at fair value
Fair value hedges - interest rate swaps		-		(16)
Cash flow hedges - cross-currency and commodity forwards		(9)		(34)
Net investment hedges - cross-currency swaps		(4)		(2)
Not designated as hedges (held for trading) - cross-currency swaps and forward foreign exchange contracts		(4)		(7)
Total		(17)		(59)

At 31 December 2019 and 2018 there were no derivatives valued using Level 1 or Level 3 fair value techniques.