P20. Financial risk management

Principles, capital management and management of financial risks

For information relevant to Telia Company AB, see Notes to consolidated financial statements (Note C26).

Credit risk management

Telia Company’s exposure to credit risk arises from default of counterparts (including price risks as regards investments in equity instruments), with a maximum exposure equal to the carrying amount of these instruments (detailed in the respective Note and excluding receivables from subsidiaries), as follows.

SEK in millions

Note

Dec 31, 2016

Dec 31, 2015

Other financial assets

P10

14,718

14,776

Trade and other receivables

P11

1,244

1,159

Short-term investments, cash and cash equivalents

P12

17,275

18,773

Total

 

33,237

34,708

For information on credit risk management relevant to Telia Company AB, see Notes to consolidated financial statements (corresponding section in Note C26).

Liquidity risk management

Liquidity risk is the risk that Telia Company AB will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. For information on liquidity risk management relevant to Telia Company AB, see Notes to consolidated financial statements (corresponding section in Note C26).

As of December 31, 2016, contractual undiscounted cash flows for interest-bearing borrowings and non-interest-bearing currency derivatives (excluding intra-group derivatives) represented the following expected maturities, including installments and estimated interest payments. The balances due within 12 months equal their carrying values as the impact of discounting is insignificant.

Expected maturity
SEK in millions

Jan–Mar 2017

Apr–Jun 2017

Jul–Sep 2017

Oct–Dec 2017

2018

2019

2020

2021

Later years

Total

Utilizied bank overdraft facilities

185

185

Open-market financing program borrowings

9,164

57

351

1,792

4,453

11,267

10,513

11,489

59,088

108,175

Cross currency interest rate swaps and
interest rate swaps

                   

Payables

47,500

2,157

450

50,107

Receivables

-47,131

-2,052

-448

-49,631

Currency swaps and forward exchange contracts

                   

Payables

6,770

950

57

3,079

6,755

5,306

7,685

1,110

26,392

58,104

Receivables

-8,269

-1,077

-68

-3,000

-7,146

-5,696

-8,002

-1,133

-26,451

-60,842

Total, net

8,034

220

340

1,873

4,062

10,877

10,196

11,466

59,029

106,098

Expected maturities for and additional information on non-interest-bearing liabilities, guarantees and other contractual obligations are presented in Notes P15 “Other provisions,” P18 “Short-term provisions, trade payables and other current liabilities” and P23 “Contingencies, other contractual obligations and litigation,” respectively.