Airbus 2015 Annual Report Download - page 249

AIRBUS GROUP FINANCIAL STATEMENTS 2015 l 67 l
Notes to the IFRSConsolidatedFinancialStatements
2.
2.7 Capital Structure and Financial Instruments
A summary of the VaR position of the Group’s financial instruments portfolio at 31December 2015 and 2014 is as follows:
(In € million) Total VaR Equity price VaR Currency VaR Commodity price VaR Interest rate VaR
31December 2015     
FX hedges for forecast transactions
or firm commitments 1,814 01,870 0181
Financing liabilities, financial assets
(including cash, cash equivalents
securities and related hedges) 210 162 82 015
Finance lease receivables and
liabilities, foreign currency trade
payables and receivables 91 024 083
Commodity contracts 7 0 3 6 0
Equity swaps 11 11 0 0 0
Diversification effect (418) (8) (172) 0(92)
All financial instruments 1,715 165 1,807 6187
31December 2014     
FX hedges for forecast transactions
or firm commitments 1,052 01,135 0122
Financing liabilities, financial assets
(including cash, cash equivalents
securities and related hedges) 407 401 33 032
Finance lease receivables and
liabilities, foreign currency trade
payables and receivables 55 019 057
Commodity contracts 9 0 2 9 0
Equity swaps 17 17 0 0 0
Diversification effect (489) (17) (74) 0(27)
All financial instruments 1,051 401 1,115 9184
The increase of total VaR as of 31December 2015 is mainly attributable to a strong increase of market volatilities, in particular
foreign exchange (“FX”) volatility in combination with an increased net foreign exchange portfolio in comparison to year-end
2014. The Group uses its derivative instruments entirely for hedging purposes. As a result, the respective market risks of these
hedging instruments are – depending on the hedges’ actual effectiveness – offset by corresponding opposite market risks of the
underlying forecast transactions, assets or liabilities. Under IFRS7, the underlying forecast transactions do not qualify as financial
instruments and are therefore not included in the tables shown above. Accordingly, the VaR of the FX hedging portfolio in the
amount of € 1,814million (2014: € 1,052million) cannot be considered as a risk indicator for the Group in the economic sense.
Liquidity Risk
The Group’s policy is to maintain sufficient cash and cash
equivalents at any time to meet its present and future
commitments as they fall due. The Group manages its liquidity
by holding adequate volumes of liquid assets and maintains
a committed credit facility (€ 3.0billion as of 31December
2015 and 2014) in addition to the cash inflow generated by its
operating business. The Group continues to keep within the
asset portfolio the focus on low counterparty risk. In addition,
the Group maintains a set of other funding sources, and
accordingly may issue bonds, notes and commercial papers
or enter into security lending agreements. Adverse changes in
the capital markets could increase the Group’s funding costs
and limit its financial flexibility.
Further, the management of the vast majority of the Group’s
liquidity exposure is centralised by a daily cash concentration
process. This process enables the Group to manage its liquidity
surplus as well as its liquidity requirements according to the
actual needs of its subsidiaries. In addition, management
monitors the Group’s liquidity reserve as well as the expected
cash flows from its operations.
Financial Statements 2015
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