BMW 2013 Annual Report Download - page 157

157 GROUP FINANCIAL STATEMENTS
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In the next stage, these exposures are compared to all
hedges that are in place. The net cash flow surplus rep-
resents an uncovered risk position. The cash-flow-at-
risk approach involves allocating the impact of potential
raw materials fluctuations to operating cash flows on
the basis of probability distributions. Volatilities and
correlations serve as input factors to assess the relevant
probability distributions.
The potential negative impact on earnings is computed
for each raw material category for the following
finan-
cial year on the basis of current market prices and
ex-
Other risks
A further exposure relates to the residual value risk on
vehicles returned to the BMW Group at the end of lease
contracts. The risk in
this context was not material to
the Group in the past and / or at the end of the reporting
Raw materials price risk
The BMW Group is exposed to the risk of price fluctua-
tions for raw materials. A description of the management
of these risks is provided in the Combined Management
Report.
Explanatory notes to the cash flow statements
The cash flow statements show how the cash and cash
equivalents of the BMW Group and of the Automotive
and Financial Services segments have changed in the
course of the year as a result of cash inflows and cash
outflows. In accordance with IAS 7 (Statement of Cash
Flows), cash flows are classified into cash flows from
operating, investing and financing activities.
In the following table the potential volumes of fair value
fluctuations – measured on the basis of the value-at-
risk approach – are compared with the expected value for
the interest rate relevant positions of the BMW Group
for the five main currencies:
posure to a confidence level of 95 % and a holding
period of up to one year. Correlations between the
various categories of raw materials are taken into
account when the risks are aggregated, thus reducing
the overall risk.
The following table shows the potential negative impact
for the BMW Group – measured on the basis of the cash-
flow-at-risk approach – attributable to fluctuations in
prices across all categories of raw materials. The risk at
each reporting date for the following financial year was
as follows:
period. A description of the management of this risk is
provided in the
Combined Management Report. Infor-
mation regarding the
residual value risk from operating
leases is provided in the section on accounting policies
in note 5.
The first step in the analysis of the raw materials price
risk is to determine the volume of planned purchases of
raw materials (and components containing those raw
materials). These amounts, which represent the gross
exposure, were as follows at each reporting date for the
following financial year:
Cash and cash equivalents included in the cash flow
statement comprise cash in hand, cheques, and cash at
bank, to the extent that they are available within three
months from the end of the reporting period and are
subject to an insignificant risk of changes in value.
The cash flows from investing and financing activities
are based on actual payments and receipts. By contrast,
in € million 31. 12. 2013 31. 12. 2012
Euro 214 269
US Dollar 246 271
British Pound 62 44
Chinese Renminbi 11 17
Japanese Yen 6 12
in € million 31. 12. 2013 31. 12. 2012
Raw materials price exposures 4,550 3,370
in € million 31. 12. 2013 31. 12. 2012
Cash flow at risk 405 350