Saab 2013 Annual Report Download - page 114

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 -37 59 22 -30 109 79 -25 39 14 -3 4 1-179 421 242 -74 246 172 -19 - -19
91-180 days -50 21 -29 -13 31 18 -1 29 28 -4 - -4 -74 278 204 -39 59 20 - - -
181-210 days -12 3 -9 -13 73 60 -1 15 14 -4 - -4 -2 847 845 -29 59 30 -4 - -4
211-360 days -12 - -12 -11 17 6-2 7 5-3 - -3 -66 213 147 -32 52 20 - - -
2015 - - --26 69 43 -3 4 1-3 - -3 -47 830 783 -51 205 154 -4 - -4
2016 - - --16 70 54 -3 3 -- - --1 - -1 -16 162 146 -13 - -13
2017 - - --4 11 7-2 2 -- - -- - --7 115 108 - - -
2018 - - --3 6 3-1 2 1- - -- - --1 99 98 - - -
2019 and forward - - --3 15 12 - - -- - -- - -- 71 71 - - -
Total flows 2013 -111 83 -28 -119 401 282 -38 101 63 -17 4 -13 -369 2,589 2,220 -249 1,068 819 -40 - -40
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
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 31-12-2013 31-12-2012
USD 1,552 1,581
EUR 601 533
AUD 442 434
ZAR 289 440
Other currencies 576 455
Total 3,460 3,443
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
31-12-2013
SEK appreciation
of 10%
SEK depreciation
of 10%
USD 1,552 1,397 1,707
EUR 601 541 661
AUD 442 398 486
ZAR 289 260 318
Other currencies 576 518 634
Total 3,460 3,114 3,806
Change -346 346
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, primarily in , in commercial aircra programmes
consist of a hedged order backlog and estimated future orders (business case)
with cash ows. Cash ows from the latter are normally hedged when they
become conrmed orders. In connection with impairment tests of onerous
contracts, 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:
 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.
 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 must not exceed  months
duration. 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. Lending to subsidiaries in
foreign currency is normally nanced in , which is converted to the sub-
sidiary’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
Pension Fund section.
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  ,, adjusted
for loans with maturity date within months (“Free Cash”).
NOTE 41, CONT.
FINANCIAL INFORMATION > NOTES
110 SAAB ANNUAL REPORT 2013