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Derivative Financial Instruments and Risk Management Policies (Tables)
12 Months Ended
Dec. 31, 2017
Financial Instruments [Abstract]  
Schedule of Sensitivity Analysis
Millions of euros
Change in basis points (bp)
Impact on consolidated income statement

Impact on consolidated equity

 +100pb
(91
)
335

 -100pb
74

(331
)
The following table illustrates the sensitivity of foreign currency gains and losses and of equity to changes in exchange rates, where: a) in calculating the impact on the income statement, the exchange rate position affecting the income statement at the end of 2017 was considered constant during 2018; b) in calculating the impact on equity, only monetary items have been considered, namely debt and derivatives such as hedges of net investment and loans to subsidiaries related to the investment, whose breakdown is considered constant in 2018 and identical to that existing at the end of 2017. In both cases, Latin American currencies are assumed change their value against the dollar and the rest of the currencies against the euro by 10%.
Millions of euros
 
 

 

Currency
Change
Impact on the consolidated income statement

Impact on consolidated equity

All currencies vs EUR
10%
17

(352
)
USD vs EUR
10%
(2
)
(66
)
European currencies vs EUR
10%
(1
)
(303
)
Latin American currencies vs USD
10%
20

17

All currencies vs EUR
(10)%
(17
)
352

USD
(10)%
2

66

European currencies vs EUR
(10)%
1

303

Latin American currencies vs USD
(10)%
(20
)
(17
)
Schedule of Financial Results
The breakdown of the financial results recognized in 2017, 2016 and 2015 is as follows:
Millions of euros
2017

2016

2015

Interest income
638

723

1,068

Dividends received
16

19

30

Other financial income
17

38

250

Subtotal
671

780

1,348

Changes in fair value of financial assets at fair value through profit or loss
35

438

(317
)
Changes in fair value of financial liabilities at fair value through profit or loss
(97
)
(463
)
189

Transfer from equity to profit and loss from cash flow hedges (*)
(162
)
(238
)
(207
)
Transfer from equity to profit and loss from available-for-sale assets and others
(33
)
(136
)
539

Gain/(loss) on fair value hedges
(150
)
(26
)
62

(Loss)/gain on adjustment to items hedged by fair value hedges
194

(6
)
24

Subtotal
(213
)
(431
)
290

Interest expenses
(1,975
)
(2,225
)
(3,146
)
Ineffective portion of cash flow hedges
(10
)
1


Accretion of provisions and other liabilities
(453
)
(466
)
(313
)
Other financial expenses
(310
)
(365
)
(520
)
Subtotal
(2,748
)
(3,055
)
(3,979
)
Net finance costs excluding foreign exchange differences and hyperinflationary adjustments
(2,290
)
(2,706
)
(2,341
)
(*)The difference in 2016 between this amount and the impact in the consolidated statement of comprehensive income (184 million euros) is because of recycling the hedges related to the operation of Telefónica United Kingdom, recorded in the exchange differences account in the consolidated income statement.
Schedule of Telefonica's Derivatives, Fair Value, and Expected Maturity
The breakdown of Telefónica’s derivatives at December 31, 2016, their fair value at year-end and the expected maturity schedule are as set forth in the table below:
2016
Millions of euros
Fair value
(**)
Notional amount Maturities (*)
Derivatives
 
2017
2018
2019
Subsequent years
Total
Interest rate hedges
(407
)
(535
)
(481
)
(653
)
667

(1,002
)
Cash flow hedges
172

(505
)
150

(417
)
3,597

2,825

Fair value hedges
(579
)
(30
)
(631
)
(236
)
(2,930
)
(3,827
)
Exchange rate hedges
(1,038
)
823

1,170

359

2,760

5,112

Cash flow hedges
(1,062
)
1,028

1,170

359

2,760

5,317

Fair value hedges
24

(205
)



(205
)
Interest and exchange rate hedges
(1,842
)
(260
)
24

1,149

4,273

5,186

Cash flow hedges
(1,707
)
(277
)
309

1,160

4,215

5,407

Fair value hedges
(135
)
17

(285
)
(11
)
58

(221
)
Net investment Hedges
(7
)
(2,309
)
(33
)
(36
)

(2,378
)
Other Derivatives
(107
)
1,256

(332
)
(437
)
(2,702
)
(2,215
)
Interest rate
9

1,232

(471
)
(456
)
(2,818
)
(2,514
)
Exchange rate
(101
)
(574
)
139

19

116

(299
)
Others
(15
)
598




598

(*) For interest rate hedges, the positive amount is in terms of fixed “payment.” For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.
(**) Positive amounts indicate payables.
The breakdown of Telefónica’s derivatives at December 31, 2017, their fair value at year-end and the expected maturity schedule is as set forth in the table below:
2017
Millions of euros
Fair value
(**)
Notional amount Maturities (*)
Derivatives
 
2018
2019
2020
Subsequent years
Total
Interest rate hedges
(285
)
(1,596
)
(901
)
1,563

1,701

767

Cash flow hedges
140

(1,015
)
(658
)
1,399

3,778

3,504

Fair value hedges
(425
)
(581
)
(243
)
164

(2,077
)
(2,737
)
Exchange rate hedges
339

(220
)
547

2,219

4,720

7,266

Cash flow hedges
344

1,700

621

2,219

4,720

9,260

Fair value hedges
(5
)
(1,920
)
(74
)


(1,994
)
Interest and exchange rate hedges
(546
)
344

963

952

4,419

6,678

Cash flow hedges
(422
)
344

963

800

3,744

5,851

Fair value hedges
(124
)


152

675

827

Net investment Hedges

(140
)



(140
)
Other Derivatives
(13
)
(2,431
)
1,840

(495
)
(2,451
)
(3,537
)
Interest rate
(109
)
(3,035
)
1,840

(495
)
(3,051
)
(4,741
)
Exchange rate
26

(209
)



(209
)
Others
70

813



600

1,413

(*) For interest rate hedges, the positive amount is in terms of fixed “payment.” For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.
(**) Positive amounts indicate payables.