Audi 2007 Annual Report Download - page 194

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Notes to the Consolidated Income Statement
1 Revenue
The composition of the revenue of the Group, by brand, is as follows:
EUR million 2007 2006
Audi brand 25,249 23,404
Lamborghini brand 404 322
Volkswagen brand 2,802 2,772
SEAT brand 369 374
Škoda brand 221 193
Bentley brand 15 3
Total revenue from vehicles 29,060 27,068
Other sales 4,557 4,074
Total revenue 33,617 31,142
Revenue is categorized by region for the purpose of segment reporting, analogously to the
system used for internal Group steering and reporting.
Other sales constitute goods and services supplied to affiliated companies and sales to
third parties.
2 Cost of sales
Amounting to EUR 28,478 (27,309) million, cost of sales comprises the costs incurred in
generating revenue and purchase prices in trading transactions. This item also includes
expenses resulting from the formation of provisions for warranty costs, for development
expenditure which cannot be capitalized, for amortization of development expenditure rec-
ognized as an intangible asset, and for property, plant and equipment for manufacturing
purposes.
Cost of sales rose at a disproportionately lower rate than revenue in 2007. Cost of sales
included EUR 427 (547) million in impairment losses on intangible assets and property, plant
and equipment. The impairment losses were calculated on the basis of updated impairment
tests with particular account being given to the exchange rate of the euro as well as to mar-
ket risks.
3 Distribution costs
Distribution costs of EUR 2,737 (2,164) million substantially comprise labor and materials
costs for marketing and sales promotion, advertising, public relations activities and outward
freight, as well as depreciation attributable to the sales organization.
The rise in distribution costs essentially relates to the initial consolidation of further
sales subsidiaries within the Audi Group.
4 Administrative expenses
Administrative expenses of EUR 266 (237) million include labor and materials costs, as well
as depreciation attributable to administrative operations.