BMW 2014 Annual Report Download - page 161

161 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
represents 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
cor-
relations serve as input factors to assess the relevant
probability distributions.
The potential negative impact on earnings is com-
puted for each raw material category for the following
financial year on the basis of current market prices
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.
Cash and cash equivalents included in the cash flow
statement comprise cash in hand, cheques, and cash at
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-sensitive exposures of the BMW Group:
and exposure to a confidence level of 95 % and a hold-
ing period of up to one year. Correlations between the
various categories of raw materials are taken into ac-
count 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:
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:
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 con-
trast, the cash flow from operating activities is derived
indirectly from the net profit for the year. Under this
method, changes in assets and liabilities relating to
operating activities are adjusted for currency translation
effects and changes in the composition of the Group.
in € million 31. 12. 2014 31. 12. 2013
Euro* 398 363
US Dollar 347 246
British Pound 108 62
Chinese Renminbi 44 11
Japanese Yen 11 6
* Prior year figures amended for the value-at-risk of one additional interest-bearing exposure.
in € million 31. 12. 2014 31. 12. 2013
Raw materials price exposures 3,770 4,550
in € million 31. 12. 2014 31. 12. 2013
Cash flow at risk 230 405