Notes to the consolidated financial statements – analysis of items in the primary statements

1. Segmental analysis	10. Earnings per share	19. Trade and other receivables
2. Other operating income	11. Goodwill	20. Cash and cash equivalents
3. Operating costs	12. Other intangible assets	21. Borrowings
4. Exceptional items, remeasurements and stranded cost recoveries	13. Property, plant and equipment	22. Trade and other payables
5. Pensions and other post-retirement benefits	14. Other non-current assets	23. Other non-current liabilities
6. Finance income and costs	15. Financial and other investments	24. Provisions
7. Taxation	16. Deferred tax assets and liabilities	25. Share capital
8. Discontinued operations	17. Derivative financial instruments	26. Reconciliation of movements in total equity
9. Dividends	18. Inventories and current intangible assets	27. Consolidated cash flow statement

17. Derivative financial instruments

Our use of derivatives may entail a derivative transaction qualifying for one or more hedge type designations under IAS 39. For further information and a detailed description of our derivative financial instruments and hedge type designations, refer to note 32. The fair value amounts by designated hedge type can be analysed as follows:

	2008			2007
	Assets £m	Liabilities £m	Total £m	Assets £m	Liabilities £m	Total £m
Fair value hedges
Interest rate swaps	23	(8)	15	16	(30)	(14)
Cross-currency interest rate swaps	271	(43)	228	50	(137)	(87)
	294	(51)	243	66	(167)	(101)
Cash flow hedges
Interest rate swaps	49	(76)	(27)	15	(6)	9
Cross-currency interest rate swaps	609	(8)	601	69	(25)	44
Foreign exchange forward contracts	16	(7)	9	–	–	–
	674	(91)	583	84	(31)	53
Net investment hedges
Cross-currency interest rate swaps	362	(49)	313	270	(32)	238
Foreign exchange forward contracts	–	(20)	(20)	4	(13)	(9)
	362	(69)	293	274	(45)	229
Derivatives not in a formal hedge relationship
Interest rate swaps	76	(100)	(24)	17	(35)	(18)
Interest rate swaptions	–	(6)	(6)	–	–	–
Cross-currency interest rate swaps	4	–	4	123	(4)	119
Equity index-linked (i)	–	–	–	145	(189)	(44)
	80	(106)	(26)	285	(228)	57
	1,410	(317)	1,093	709	(471)	238
Hedge positions offset within derivative instruments	116	(116)	–	(52)	52	–
Total	1,526	(433)	1,093	657	(419)	238

(i) The equity index-linked derivatives are investment related derivative financial instruments that offset each other on a post-tax basis.

The maturity of derivative financial instruments is as follows:

	2008			2007
	Assets £m	Liabilities £m	Total £m	Assets £m	Liabilities £m	Total £m
In one year or less	463	(114)	349	277	(235)	42
Current	463	(114)	349	277	(235)	42
In more than one year, but not more than two years	104	(3)	101	26	(10)	16
In more than two years, but not more than three years	113	(21)	92	12	(7)	5
In more than three years, but not more than four years	358	(68)	290	5	(3)	2
In more than four years, but not more than five years	170	(36)	134	173	(22)	151
In more than five years	318	(191)	127	164	(142)	22
Non-current	1,063	(319)	744	380	(184)	196
	1,526	(433)	1,093	657	(419)	238

For each class of derivatives, our exposure, based on the sterling equivalent notional value of the pay leg is as follows:

	2008 £m	2007 £m
Interest rate swaps	(10,105)	(7,026)
Interest rate swaptions	(202)	–
Cross-currency interest rate swaps	(7,120)	(8,631)
Foreign exchange forward contracts	(2,020)	(2,213)
Equity index-linked	–	(607)
Total	(19,447)	(18,477)

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