125 AGL Energy Limited Annual Report 2011 Cross currency swap contracts The movement in other comprehensive income is due to an increase/decrease in the fair value of forward foreign exchange contracts  designated as cash flow hedges. At the end of the reporting period, if the Australian dollar had been 10% higher or lower and all other variables were held constant, the  consolidated entity’s profit after tax and other comprehensive income would have been affected as follows: The sensitivity analysis includes only outstanding foreign currency denominated financial instruments and adjusts their translation at the  end of the reporting period for a 10% change in foreign currency rates. The following table details the sensitivity to a 10% increase or decrease in the Australian dollar against the relevant foreign currencies. A  sensitivity of 10% has been used as this is considered reasonable given the current level of exchange rates and the volatility observed both  on a historical basis and market expectations for future movements. Foreign currency sensitivity The following table details the cross currency swap contracts outstanding at the end of the reporting period: The fair value of cross currency swaps at 30 June 2011 was a liability of $85.9 million (2010: $nil), of which $22.4 million is in a cash flow  hedge relationship and $63.5 million is in a fair value hedge relationship. Under cross currency swap contracts, the consolidated entity has agreed to exchange specified foreign currency loan principal and interest  amounts at agreed future dates at fixed exchange rates. Such contracts enable the consolidated entity to eliminate the risk of movements  in foreign exchange rates related to foreign currency denominated borrowings. The following table details the movements in the hedging reserve from forward foreign exchange contracts and cross currency swap  contracts: Profit after tax  Other comprehensive income Increase/(decrease) Increase/(decrease) 2011 2010 2011 2010 $m $m $m $m US dollar +10%  – – (6.0) (0.1) US dollar –10%  – – 7.4 0.1 Euro +10%  – – (25.8) (0.2) Euro –10%  – – 31.5 0.2 British pound +10%  – – – (0.1) British pound –10%  – – – 0.1 2011 2010 Hedging reserve  $m $m Balance at beginning of financial year  (0.5) (0.7) Loss in fair value of cash flow hedges  (88.3) (0.7) Reclassified to finance costs  3.3 – Transferred to plant and equipment  4.6 1.0 Income tax on items taken directly to or transferred from equity  24.1 (0.1) Balance at end of financial year  (56.8) (0.5) Cash flow ineffectiveness recognised immediately in profit or loss  – – Average interest rate  Average exchange rate  Contract value  Fair value 2011 2010 2011 2010 2011 2010 2011 2010 Outstanding contracts % % $m $m $m $m Buy US dollars 5 years or more  7.67 – 0.888 – 337.8 – (85.9) –