Saab 2012 Annual Report Download - page 116

e table below shows the cash ows corresponding to the derivatives recognised
as cash ow hedges in  and  expressed in millions in local currency.
Cash flow hedges by currency
CZK EUR GBP NOK THB USD ZAR
Million Outflow Inflow Net Outflow Inflow Net Outflow Inflow Net Outflow Inflow Net Outflow Inflow Net Outflow Inflow Net Outflow Inflow Net
< 90 days -31 27 -4 -31 123 92 -25 50 25 -99-135 1,139 1,004 -93 183 90 -13 1 -12
91-180 days -10 20 10 -8 33 25 -6 38 32 -1 1 --101 421 320 -32 67 35 -18 15 -3
181-210 days -19 4 -15 -13 37 24 -2 13 11 ----29 568 539 -22 51 29 -- -
211-360 days -11 19 8-14 51 37 -5 5 --11-10 50 40 -38 60 22 -11 - -11
2014 -6 17 11 -30 70 40 -2 10 8----84 1,251 1,167 -32 121 89 -1 - -1
2015 - 3 3-13 35 22 -2 - -2 ----38 555 517 -22 111 89 -- -
2016 - - --5 51 46 -------11 - -11 -5 86 81 -- -
2017 - - --2 11 9----------3939 -- -
2018 and forward - - --1 21 20 ----------2222 -- -
Total flows 2012 -77 90 13 -117 432 315 -42 116 74 -1 11 10 -408 3,984 3,576 -244 740 496 -43 16 -27
Total flows 2011 -34 148 114 -153 501 348 -51 158 107 -9 8 -1 -46 2,350 2,304 -245 912 667 -129 41 -88
Translation exposure
e translation exposure in the Group relates to the operations of foreign
subsidiaries. Saab Aircra Leasing’s operations in Sweden have their eco-
nomic environments in  (functional currency) and are translated from
the functional currency to . e translation exposure comprises net assets
in foreign currency and arises in connection with acquisitions and divest-
ments. e value of equity subject to translation exposure amounted to
, (,) at year-end; see the table below.
Net assets translated to SEK
MSEK 31-12-2012 31-12-2011
USD 1,581 1,861
EUR 533 33
AUD 434 470
ZAR 440 573
Other currencies 455 433
Total 3,443 3,370
e eect on net assets of a change in exchange rates where the  depreci-
ates or appreciates is shown in the table below.
Sensitivity analysis of net assets
MSEK
Net assets
31-12-2012
SEK appreciation
of 10%
SEK depreciation
of 10%
USD 1,581 1,423 1,740
EUR 533 480 587
AUD 434 390 477
ZAR 440 396 484
Other currencies 455 410 499
Total 3,443 3,099 3,787
e foreign currency risk to the Group’s income and equity from translation
eects (the translation exposure ) is not hedged, pursuant to the Group
Treasury Policy.
Impairment tests
Long-term contracts in commercial aircra programmes consist of a hedged
order backlog and estimated future orders (business case) with cash ows
primarily in . Cash ows from the latter are normally hedged when they
become conrmed orders. In connection with impairment tests of loss con-
tracts, income is aected by the revaluation of future cash ows at spot rates.
Larger changes in exchange rates, primarily in  against , have a signi-
cant impact on income. is exposure is not hedged.
Interest rate risks
Interest rate risk refers to the risk that Saab will be negatively aected by
changes in interest rate levels.
Interest rate risk has been identied in the following areas:
t Saab is exposed to interest rate risk when the market value of certain
items in the statement of nancial position is aected by changes in
underlying interest rates. Large items of this type refer to pension ob-
ligations and leasing operations.
t Saab’s net nancial items are aected by changes in market rates. In-
terest rate eects on advance nancing aect gross income.
Interest rate risks in the Group’s nancial investments are managed based on
high liquidity and a duration of  months, with the option of deviating by
+/– months. As of year-end, the duration for investments was  months
(). Interest rate risks in the Group’s funding are managed based on a bench-
mark with an -month duration, with the option of deviating by
+/–months. As of year-end, the duration for nancing was  months ().
Interest rate futures and swaps are used for interest risk management to
achieve the desired duration in the nancing. For a sensitivity analysis, see
also the section on liquidity and nancing risk in this note. Lending to sub-
sidiaries in foreign currency is normally nanced in , which is converted
to the subsidiary’s currency through swaps. Interest rate swaps in  are
used mainly for interest risk management in the leasing portfolio, where the
interest rate risk is fully matched.
e pension liability, the present value of future pension obligations, is
the largest interest rate risk due to the liability’s long duration; see also the
Saab Pension Fund section of this note.
Liquidity and financing risks
Liquidity and nancing risk refers to the risk that the company will not be
able to meet its payment obligations due to insucient liquidity or diculty
raising external loans on acceptable terms.
According to the Group Treasury Policy, Saab must always maintain unu-
tilised credit facilities or liquid assets corresponding to the higher of (but not
less than  ,, adjusted for loans with maturity date within months):
t  per cent of sales (total sales)
t  per cent of outstanding on-demand guarantees for the three
largest commitments
NOTE 41, CONT.
FINANCIAL INFORMATION > NOTES
112 SAAB ANNUAL REPORT 2012