Siemens 2011 Annual Report Download - page 335

153 D. Consolidated Financial Statements 273 E. Additional information
158 D. Consolidated Statements of Changes in Equity
160 D. Notes to Consolidated Financial Statements
266 D. Supervisory Board and Managing Board
154 D. Consolidated Statements of Income
155 D.2 Consolidated Statements of Comprehensive Income
156 D. Consolidated Statements of Financial Position
157 D. Consolidated Statements of Cash Flow

as well as for a discussion of hedging activities employed to
mitigate or reduce commodity price risks see
Note 32 Deriv-
ative financial instruments and hedging activities.
Using historical volatilities and correlations, a ten day holding
period and a confidence level of .%, the VaR, which com-
prises the net position of commodity derivatives and the com-
modity purchase transactions with price risk, was € million
as of September ,  compared to € million as of Septem-
ber , .
Equity price risk
Siemens’ investment portfolio consists of direct and indirect
investments in publicly traded companies held for purposes
other than trading. The direct participations result mainly
from strategic partnerships or compensation from M&A trans-
actions; indirect investments in fund shares are mainly trans-
acted for financial reasons.
The equity investments are monitored based on their current
market value, affected primarily by fluctuations in the volatile
technology-related markets worldwide. The market value of
Siemens’ portfolio in publicly traded companies as of Septem-
ber ,  was € million compared to € million as of
September , .
Based on historical volatilities and correlations, a ten day
holding period and a confidence level of .%, the VaR as of
September ,  of Siemens’ equity investments was €
million compared to € million the year before.
Both changes, the increase in market value and the increase
in VaR, relate mainly to . million shares newly issued by
AtoS with a five-year lock-up commitment, received from AtoS
in connection with the divestment of Siemens IT Solutions
and Services. For further information regarding this transac-
tion see
Note 4 Acquisitions, dispositions and discontinued
operations.
Liquidity risk
Liquidity risk results from the Company ’s potential inability to
meet its financial liabilities, e.g. for the settlement of its finan-
cial debt or for ongoing cash requirements from operating ac-
tivities. In addition to having implemented effective working
capital and cash management, Siemens mitigates liquidity
risk by arranged borrowing facilities with highly rated finan-
cial institutions, via a medium-term notes program and via an
established global commercial paper program. Liquidity risk
may also be mitigated by the Siemens Bank GmbH, which was
established in December . The Siemens Bank increased
the flexibility of depositing cash or refinancing by using Euro-
pean Central Bank accounts. For further information regard-
ing short- and long-term debt see
Note 23 Debt.
In addition to the above-mentioned sources of liquidity,
Siemens constantly monitors funding options available in the
capital markets, as well as trends in the availability and costs
of such funding, with a view to maintaining financial flexibili-
ty and limiting repayment risks.
The following table reflects all contractually fixed pay-offs for
settlement, repayments and interest resulting from recog-
nized financial liabilities as well as from irrevocable loan com-
mitments. It includes expected net cash outflows from deriva-
tive financial liabilities that are in place as per September ,
. Such expected net cash outflows are determined based
on each particular settlement date of an instrument. The
amounts disclosed are undiscounted net cash outflows for the
respective upcoming fiscal years, based on the earliest date
on which Siemens could be required to pay. Cash outflows for
financial liabilities (including interest) without fixed amount
or timing are based on the conditions existing at September
, .
Year ended September ,
 
 to

 and
thereafter
(in millions of €)
Non-derivative
financial liabilities
Notes and bonds 3,099 2,604 4,539 7,306
Loans from banks 1,201 929 476 12
Other financial
indebtedness 26 13 60 29
Obligations under finance
leases 31 34 43 124
Trade payables 7,562 111 5 2
Other financial liabilities 1,384 51 29 3
Derivative
financial liabilities 901 320 225 88
Irrevocable loan
commitments 2,384 127 29 1