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Note 21. Guarantees, liability engagements and other liabilities
€ million 2017 2016
Real estate mortgages
For subsidiaries 4 4
Pledged shares 73 58
Guarantees
For subsidiaries 78 72
Other liabilities and liability engagements
For own debt 35 15
Rent liabilities on machinery and fixtures
Falling due within a year 9 4
Falling due later 12 7
Rent liabilities on real estate
Falling due within a year 283 104
Falling due later 1,936 400
Foreign currency risks
The result of the Company's operating activities is affected by the amount of working capital financing granted by the Company to its foreign subsidiaries and in part also, in its capacity as the Group's parent company, the subsidiaries' hedgings against their parent.
The foreign currency exposure is hedged using foreign currency derivatives in accordance with the confirmed foreign currency risk policy. The fair value of foreign currency derivatives is calculated by measuring them based on quoted market prices at the balance sheet date.
The measurement of derivatives is based on direct market data, in other words, they are classified at level 2. The maximum credit risk of these derivatives corresponds to their fair value at the balance sheet date.
The results of derivatives are recognised in financial items.
Company's transaction exposure as at 31 Dec. 2017
€ million
USD SEK NOK PLN RUB
Transaction risk -18.5 5.3 1.9 25.0 11.9
Hedging derivatives 21.7 -9.1 -4.6 -14.4 -8.6
Exposure 3.2 -3.9 -2.6 10.6 3.2
Company's transaction exposure as at 31 Dec. 2016
€ million
USD SEK NOK PLN RUB
Transaction risk -20.2 19.6 22.4 16.5 14.4
Hedging derivatives 31.3 -12.0 -18.2 -9.1 -17.6
Exposure 11.1 7.6 4.2 7.4 -3.1
The sensitivity analysis of transaction exposure shows the profit impact of a +/-10% exchange rate change on the Company's foreign currency denominated acquisitions and hedging foreign currency derivatives.
Sensitivity analysis, impact on pre-tax profit as at 31 Dec. 2017
€ million
USD SEK NOK PLN RUB
Change +10% -0.3 0.4 0.2 -1.0 -0.3
Change -10% 0.4 -0.4 -0.3 1.2 0.4
Sensitivity analysis, impact on pre-tax profit as at 31 Dec. 2016
€ million
USD SEK NOK PLN RUB
Change +10% -1.0 -0.7 -0.4 -0.7 0.3
Change -10% 1.2 0.8 0.5 0.8 -0.3
Derivatives
Fair values of derivative contracts
€ million
31 Dec. 2017
Positive fair value
(balance sheet value)
31 Dec. 2017
Negative fair value
(balance sheet value)
31 Dec. 2016
Positive fair value
(balance sheet value)
31 Dec. 2016
Negative fair value
(balance sheet value)
Currency derivatives 0.4 -2.4 4.4 -5.4
Notional amounts of derivative contracts
€ million
31 Dec. 2017
Notional amount
31 Dec. 2016
Notional amount
Currency derivatives 103.6 213.7
All currency derivatives mature in 2018.
€ million 2017 Fair
value
2016 Fair
value
Liabilities arising from derivative instruments
Values of underlying instruments as at 31 Dec.
Interest rate derivatives 70 0.3 - -
Interest rate swaps 180 -0.5 40 -0.1
Foreign currency derivatives
Forward and future contracts 84 -1.9 193 -3.6
Outside the Group 77 -1.9 174 -2.9
Inside the Group 7 0.0 19 -0.7
Option agreements
Bought, inside the Group - - 0 -0.0
Written, inside the Group - - 0 -0.0
Currency swaps 20 -0.1 20 2.7
Commodity derivatives
Electricity derivatives 12 0.0 22 0.0
Outside the Group 6 -0.3 11 -1.7
Inside the Group 6 0.3 11 1.7