DHL 2009 Annual Report Download - page 53

Central cash and liquidity management
Corporate Treasury is responsible for central cash and liquidity management for
our subsidiaries, whose operations span the globe. More than   of the Group’s exter-
nal revenue is consolidated in cash pools and used to balance internal liquidity needs.
In countries where this practice is ruled out for legal reasons, internal and external bor-
rowing and investment are arranged centrally by Corporate Treasury. In this context,
we observe a balanced banking policy in order to remain independent of individual
banks. Our subsidiaries’ intragroup revenue is also pooled and managed by our in-
house bank in order to avoid external bank charges and margins (intercompany clear-
ing). Payment transactions are executed in accordance with uniform guidelines using
standardised processes and  systems.
Managing market risk
 e Group uses both primary and derivative  nancial instruments in order to
limit market risk. Interest rate risk is managed exclusively via swaps. Currency risks
are hedged using forward transactions, cross-currency swaps and options in addition.
We largely pass on the risk arising from commodity  uctuations to our customers and
manage the remaining risk using commodity swaps.  e framework, responsibilities
and controls governing the use of derivatives are laid down in internal guidelines.
Flexible and stable fi nancing
 e Group covers its long-term  nancing requirements by maintaining a balanced
ratio of equity to liabilities.  is ensures our  nancial stability whilst providing adequate
 exibility. Our most important source of funds is net cash from operating activities. We
cover our borrowing requirements using a number of independent  nancing sources,
including con rmed bilateral credit lines, bonds and structured  nancing transactions,
and operating leases. Most debt is taken out centrally in order to leverage economies of
scale and specialisation bene ts and hence to minimise the cost of capital.
 e Group has total unsecured committed credit lines of  . billion, of which only
 . billion had been drawn down as at  December . As part of our banking pol-
icy, we ensure we spread the volumes widely and maintain long-term business relation-
ships with  nancial institutions. Alongside the customary equal treatment clauses and
termination rights, the relevant loan agreements do not contain any further covenants
concerning the Group’s  nancial indicators. On average, only around   of credit lines
were drawn down in  (previous year:  ).
Guarantees and letters of comfort
Deutsche Post  provides security for the loan agreements, leases and supplier
contracts entered into by Group companies, associates or joint ventures as necessary by
issuing letters of comfort, sureties or guarantees.  is practice allows better conditions
to be negotiated locally.  e sureties are provided and monitored centrally.
Deutsche Post DHL Annual Report 
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