Porsche 2009 Annual Report Download - page 231

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4.3 Prior-year market price risks in discontinued operations – the Porsche Zwischenholding
GmbH group (formerly: Porsche subgroup)
The disclosures below relate to the market price risk in the comparative period and until
the date of deconsolidation in the current reporting period.
4.3.1 Market price risk in the automotive division
4.3.1.1 Currency risk
In the prior year and in the reporting period until the date of deconsolidation of discontin-
ued operations, currency risks from existing receivables and liabilities as well as from highly prob-
able forecast transactions were hedged with forward exchange contracts, currency options and
combined options where this made economic sense. Hedges for value fluctuations in future cash
flows from highly probable forecast transactions mainly related to planned revenues in foreign cur-
rency. As of 31 July 2009, currency hedges were in place in particular for the major currencies US
dollar, pound sterling and Japanese yen.
For the sensitivity analyses according to IFRS 7, all non-functional currencies in which the
Porsche Zwischenholding GmbH group entered into financial instruments were considered as rele-
vant risk variables. If the functional currencies concerned had increased by 10% against the other
currencies as of 31 July 2009, equity would have been €688 million higher in the prior year. If the
currencies concerned had decreased by 10% against the other currencies as of 31 July 2009,
equity would have been €555 million lower in the prior year. If the functional currencies concerned
had increased by 10% against the other currencies as of 31 July 2009, profit or loss would have
been €33 million higher in the prior year. If the currencies concerned had decreased by 10%
against the other currencies as of 31 July 2009, profit or loss would have been €80 million lower in
the prior year.
4.3.1.2 Interest rate risk
In the prior year and in the reporting period until the date of deconsolidation of discontin-
ued operations, the interest rate risk for the automotive division resulted from changes in market
interest rates. These changes particularly affected the interest result from short-term deposits and
medium- and long-term variable-rate receivables and liabilities, but had also impact on the market
value recognized for fixed-interest receivables and liabilities. Interest rate swaps and other interest
contracts were used as hedges depending on the market situation in the prior year and in the re-
porting period until the date of deconsolidation of discontinued operations.
Interest rate risk according to IFRS 7 was calculated for the automotive division using sen-
sitivity analyses. Therefore, the effects of the risk variables in the form of market rates of interest
on the financial result and on equity were presented. If market interest rates had increased by 100
base points as of 31 July 2009, equity would have been €9 million lower. If market interest rates had
decreased by 100 base points as of 31 July 2009, this would not have affected equity as of that
date. If market interest rates had been valued 100 base points higher as of 31 July 2009, profit or