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Annual Report

Net Assets

CONSOLIDATED BALANCE SHEET STRUCTURE

At €199.4 billion, the Volkswagen Group’s total assets on December 31, 2010 exceeded the prior-year figure by 12.5%. The Automotive Division made a relatively large contribution to this development due to the expansion of its business and the capital increase.

The structure of the consolidated balance sheet as of December 31, 2010 can be seen from the chart below. The Volkswagen Group’s equity ratio amounted to 24.4% (21.1%).

CONSOLIDATED BALANCE SHEET STRUCTURE 2010
as percent
Consolidated Balance Sheet structure 2010 (bar chart)

AUTOMOTIVE DIVISION BALANCE SHEET STRUCTURE

In December 2009, Volkswagen AG acquired 49.9% of the shares of Porsche Zwischenholding GmbH, Stuttgart. Porsche Zwischenholding GmbH holds 100% of the shares of Dr. Ing. h.c. F. Porsche AG, Stuttgart. On the basis of the agreements under company law with Porsche Automobil Holding SE, Volkswagen shares control of Porsche Zwischenholding GmbH and its direct and indirect subsidiaries. The shares of Porsche Zwischenholding GmbH were accounted for using the equity method.

Effective January 15, 2010, Volkswagen acquired 19.89% of the shares of Suzuki Motor Corporation, Hamamatsu, Japan, for €1.7 billion. Following the exercise of outstanding convertible bonds by other investors, Volkswagen’s interest in Suzuki fell to 19.37%. After acquiring additional shares, Volkswagen increased its interest again to 19.89% as of June 30, 2010. The shares are measured using the equity method. Allocation of the purchase price to Suzuki’s assets and liabilities has only been preliminary so far.

At the end of fiscal 2010, the Automotive Division’s noncurrent assets were 18.5% higher than in the previous year. This is mainly attributable to the increased carrying amounts of our equity-accounted investments. Property, plant and equipment was up by 5.7% due to the expansion of new production facilities. The expansion of business contributed to the fact that current assets were 11.5% higher year-on-year.

At the end of the reporting period, the Automotive Division’s equity attributable to shareholders of Volkswagen AG amounted to €37.0 billion; the 35.6% increase compared with December 31, 2009 related primarily to the capital increase and the positive earnings trend. Conversely, higher actuarial losses for pension provisions recognized directly in other comprehensive income and the decline in the fair values of derivative financial instruments had a negative effect. Including noncontrolling interests, which chiefly relate to noncontrolling interests in Scania, equity amounted to €39.5 billion, up €10.3 billion on the previous year. At 35.5% (30.2%), the equity ratio was above the 2009 figure. Higher pension provisions in particular led to a 7.2% increase in noncurrent liabilities. Within current liabilities, which rose by 6.0% due to the positive business development, financial liabilities declined sharply. The figures for the Automotive Division also contain the elimination of intra-Group transactions between the Automotive and Financial Services divisions. As the current financial liabilities for the primary Automotive Division were lower than the loans granted to the Financial Services Division, a negative amount was disclosed for the reporting period.

At €111.5 billion, the Automotive Division’s total assets as of December 31, 2010 were 15.3% higher than in 2009.

FINANCIAL SERVICES DIVISION BALANCE SHEET STRUCTURE

At the end of fiscal year 2010, the Financial Services Division’s total assets amounted to €87.9 billion, €7.4 billion higher than in the previous year. Noncurrent assets rose by 9.2%, mainly because of an increase in financial services receivables and leasing and rental assets resulting from exchange rate-related and volume-related factors. Current assets were up 9.1% on year-end 2009. Higher financial services receivables lifted this figure. Cash and cash equivalents decreased to €1.3 billion (€1.9 billion). Overall, the Financial Services Division accounted for approximately 44% of the Volkswagen Group’s assets as of the reporting date.

The Financial Services Division’s equity amounted to €9.2 billion (€8.2 billion) on December 31, 2010. The increase related in particular to improved earnings, positive currency hedging effects and a capital increase by Volkswagen AG. The equity ratio rose slightly to 10.4% (10.2%). Noncurrent liabilities were up by 2.3% primarily because of higher financial liabilities due to volume and exchange rate-related factors. The expansion of business and exchange rate effects also led to an increase in current liabilities. Deposits at Volkswagen Bank direct rose by €0.6 billion to €18.9 billion. The debt/equity ratio remained unchanged at 8:1.

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