Porsche 2011 Annual Report Download - page 197

4.2.2 Risk from put and call options relating to the shares in Porsche Zwischenholding GmbH
remaining at Porsche SE
The market price risk is due in particular to changes in the enterprise value of Porsche
Zwischenholding GmbH. It affects the measurement of the put and call option and consequently their
measurement in the balance sheet as well as the profit or loss reported in the income statement. The
enterprise value is determined on the basis of the key measurement parameters used in impairment testing of
the investments accounted for at equity (for the description of these parameters, please refer to the section
“Consolidated group”). The risk due to changes in the enterprise value is determined by means of a sensitivity
analysis.
If the enterprise value of Porsche Zwischenholding GmbH as of 31 December 2011 had been 10%
higher, the group’s profit would have been €931 million (prior year: €264 million) lower. If the enterprise value
as of 31 December 2011 had been 10% lower, the group’s profit would have been €932 million (prior year:
€265 million) higher.
Since the options are subject to the condition that the merger fails in terms of the framework and
timeframe defined by the basic agreement, their valuation was based on the theoretical probability to exercise
the options. All other measurement parameters remaining equal, a change in the assessment of probability of
exercise would have increased/reduced the carrying amount on a straight-line basis; any resulting change in
the balance sheet items was recognized in profit or loss and impacted the Porsche SE group’s results of
operations accordingly. Since the merger was not performed by the reporting date within the framework and
the timeframe defined by the basic agreement, the theoretical probability of exercise of the options as of
31 December 2011 was 100% (assessment as of 31 December 2010: 50%). The merger is deemed to have
failed within the framework and the timeframe defined by the basic agreement if, among other things, the
merger resolutions of annual general meetings of Porsche SE and of Volkswagen AG were not adopted by
31 December 2011. It is no longer necessary to take the theoretical probability of exercise of the options into
account in the valuation. The options are accounted for at their fair value.
Accordingly, it was no longer necessary to prepare a sensitivity analysis as of the reporting date of the
probability of the merger failing in terms of the framework and timeframe defined by the basic agreement. If
the theoretical probability of exercise of the options had been 70% as of 31 December 2010 instead of 50%,
the group’s profit in SFY 2010 would have been €193 million lower. If the theoretical probability of exercise of
the options had been 30% as of 31 December 2010 instead of 50%, the group’s profit in SFY 2010 would have
been €193 million higher.
A partly offsetting effect results from the accounting for the investment in Volkswagen AG at equity, as
the accounting for the options at the level of Volkswagen AG has the opposite effect on the pro rata profit/loss
attributable to Porsche SE in accordance with its share in capital held in Volkswagen AG.
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