TUI AG
Hedging 6.7 - - 6.7 - 6.7
transactions
Other derivative
financial 35.1 - - - 35.1 35.1
instruments
Other financial 331.5 331.5 - - - 331.5
liabilities
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 30 Sep 2020
Category according to IFRS 9
At Fair value with no Fair value with no Fair value Fair value
? million Carrying amortised effect on profit and effect on profit and through of financial
amount cost loss without recycling loss with recycling profit and instruments
loss
Assets
Trade receivables
and other - - - - - -
receivables
thereof
instruments 875.2 875.2 - - - 847.1
within the scope
of IFRS 9
thereof
instruments 13.5 - - - - 39.2
within the scope
of IFRS 16
Derivative
financial
instruments
Hedging 22.3 - - 22.3 - 22.3
transactions
Other derivative
financial 74.0 - - - 74.0 74.0
instruments
Other financial 25.5 14.9 8.5 - 2.1 25.5
assets
Cash and cash 1,233.1 1,233.1 - - - 1,233.1
equivalents
Liabilities
Financial 4,269.0 4,291.4 - - - 4,022.8
liabilities
Trade payables 1,611.5 1,611.5 - - - 1,611.5
Derivative
financial
instruments
Hedging 61.3 - - 61.3 - 61.3
transactions
Other derivative
financial 257.5 - - - 257.5 257.5
instruments
Other financial 429.2 431.3 - - - 430.8
liabilities
The amounts shown in the previous table as at 30 September 2020 in the column "Carrying amount" (as shown in the balance sheet) may differ from those in the other columns of a given row, as these columns include all financial instruments. This means that these columns include financial instruments that are part of the disposal groups in accordance with IFRS 5. Further details on this can be found in the 2020 Annual Report.
The fair values of financial liabilities were determined, taking into account yield curves and the respective credit risk premium (credit spread).
The fair values of non-current trade receivables and other receivables correspond to the present values of the cash flows associated with the assets, taking account of current interest parameters which reflect market and counter party-related changes in terms and expectations. In the case of cash and cash equivalents, current trade receivables, other current receivables, other financial assets, current trade payables and other financial liabilities, the carrying amount approximates the fair value due to the short remaining term.
The current market conditions arising from the COVID-19 pandemic have been taken into account for all financial instruments for which fair values have been calculated by adjusting the underlying parameters.
The COVID-19 pandemic significantly impacted business operations and the existing hedging strategy for currency risks and fuel price risks. It led to a temporary suspension of all travel operations and flight bans. As a result, the occurrence of numerous hedged underlying transactions can no longer be assessed as highly likely, causing a rapid decline in fuel price and foreign currency hedge requirements and therefore requiring the prospective termination of these hedges.
For the hedges affected, occurrence of the underlying transactions can no longer be expected for a future point in time, either, so that all accrued amounts from the change in the value of the hedging instruments were reclassified from cash flow hedge reserve (OCI) to the cost of sales in the income statement. Accordingly, reclassifications of ?-28.3m from fuel price hedges and ?-9.1m from foreign currency hedges were made as at 30 June 2021.
All future changes in the value of these de-designated hedges are taken to the cost of sales in the income statement through profit and loss and recognised as other derivative financial instruments from the date of the termination of the cash flow hedge accounting. As at 30 June 2021, the fair value of these reclassified fuel price hedges totalled ?5.6m at a nominal volume of ?35.0m, while the fair value of the reclassified foreign currency hedges totalled ?-1.7m at a nominal volume of ?343.5m.
Furthermore, the strong increase in TUI's credit risk had a direct impact on the retrospective hedge effectiveness testing. As a result, additional fuel price, interest rate and foreign currency hedges had to be terminated as they no longer met the effectiveness requirements of IAS 39 and were outside the admissible 80-125% effectiveness bandwidth.
All future changes in the value of these de-designated fuel and foreign currency hedges are taken to the cost of sales, whilst interest rate hedges are recognised in the financial result, in the income statement through profit and loss, and recognised as other derivative financial instruments from the date of the termination of the cash flow hedge accounting. As at 30 June 2021, the fair value of these reclassified fuel price hedges totalled ?29.2m at a nominal value of ?277.5m, while the fair value of the interest rate hedges amounted to ?-12.0m at a nominal volume of ?443.0m and the fair value of foreign currency hedges totalled ?-5.4m at a nominal volume of ?196.3m.
Aggregation according to measurement categories under IFRS 9 as at 30 Jun 2021
? million Carrying amount of financial instruments Fair Value
Total
Financial assets
at amortised cost 2,210.2 2,209.6
at fair value - recognised directly in equity without recycling 6.1 6.1
at fair value - through profit and loss 53.4 53.4
Financial liabilities
at amortised cost 6,226.7 6,229.5
at fair value - through profit and loss 35.1 35.1
Aggregation according to measurement categories under IFRS 9 as at 30 Sep 2020
? million Carrying amount of financial instruments Fair Value
Total
Financial assets
at amortised cost 2,123.2 2,095.0
at fair value - recognised directly in equity without recycling 8.5 8.5
at fair value - through profit and loss 76.1 76.1
Financial liabilities
at amortised cost 6,334.1 6,065.0
at fair value - through profit and loss 257.5 257.5
Fair value measurement
The following table presents the fair values of the recurring, non-recurring and other financial instruments recognised at fair value in accordance with the underlying measurement levels. The individual levels have been defined as follows in line with the input factors: -- Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. -- Level 2: input factors for the measurement are quoted market price other than those mentioned in Level 1, directly
(as market price quotation) or indirectly (derivable from market price quotation) observable in the market for the
asset or liability. -- Level 3: input factors for the measurement of the asset or liability are based on non-observable market data.
Hierarchy of financial instruments measured at fair value as at 30 Jun 2021
Fair value hierarchy
? million Total Level 1 Level 2 Level 3
Assets
Other financial assets 8.2 - - 8.2
Derivative financial instruments
Hedging transactions 1.0 - 1.0 -
Other derivative financial instruments 51.3 - 51.3 -
Liabilities
Derivative financial instruments
Hedging transactions 6.7 - 6.7 -
Other derivative financial instruments 35.1 - 35.1 -
Hierarchy of financial instruments measured at fair value as of 30 Sep 2020
Fair value hierarchy
? million Total Level 1 Level 2 Level 3
Assets
Other financial assets 10.6 - - 10.6
Derivative financial instruments (MORE TO FOLLOW) Dow Jones Newswires
August 12, 2021 02:00 ET (06:00 GMT)
