Porsche 2006 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2006 Porsche annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 190

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190

the tax credits from existing reserves of 63.6 million
Euro recognized in profit or loss. Deferred tax assets
amounted to 75.1 million Euro after 152.9 million
Euro in the previous year.
Further Increase in Liquidity
Cash and cash equivalents amounted to 4.844 billion
Euro (previous year: 4.750 billion Euro). Net liquidity,
i.e. cash and cash equivalents less financial liabilities
but excluding financial services transactions, only
fell to 283.2 million Euro despite the acquisition of the
equity investment in Volkswagen AG (previous year:
1.881 billion Euro). The extended cash flow rose
sharply to 5.642 billion Euro (previous year: 2.101
billion Euro). The cash outflow from investing activities
of continuing operations totaled 3.552 billion Euro
(prior year: 3.609 billion Euro).
Significantly Higher Equity
The Porsche Group’s equity went up by 4.143 billion
Euro to 9.481 billion Euro in the reporting year. The
equity ratio rose to 40.6 percent after 36.5 percent
in the previous year. It includes a hybrid bond with
a nominal volume of one billion US dollars that is
allocable to equity.
Pension provisions together with other provisions
amounted to 2.505 billion Euro in the reporting year
(previous year: 2.300 billion Euro). All known risks
were taken into consideration. Deferred tax liabilities
increased to 612.8 million Euro, primarily as a result
of income not yet affecting cash flows, following
181.8 million Euro in the previous year. Trade pay-
ables came to 512.7 million Euro (previous year:
482.8 million Euro). Other liabilities totaled 2.775
billion Euro (previous year: 1.290 billion Euro). The
principal reason for the large increase is the rise in
the amount of financial instruments used.
Financial liabilities in the reporting year totaled
6.549 billion Euro (previous year: 4.810 billion
Euro). This increase serves to finance the expansion
of business activities. For the refinancing of the
financial services business, asset-backed structures
in specific countries were mainly used, with a volume
amounting to 1.849 billion Euro. Of the financial
liabilities, more than 2.322 billion Euro related
to bonds.
Earnings Remain Strong
Porsche’s earning power remained strong in the
reporting year. Once again, Porsche succeeded in
increasing the Group’s extremely high pre-tax result
of 2.110 billion Euro in the previous fiscal year even
further. The unusually large leap in earnings in the
reporting year to a total of 5.857 billion Euro is
due, however, to special factors and non-recurring
effects. This also applies to the rise in the net in-
come for the year to 4.242 billion Euro after 1.393
billion Euro the previous year. These extraordinary
effects include Porsche income from equity invest-
ments in Volkswagen AG of 702.4 million Euro (pre-
vious year: 182.9 million Euro) as well as the re-
valuation of the equity investment in Volkswagen to
account for the positive development of earnings,
which led to a write-up of 520.8 million Euro.
The dividend recognized by Porsche AG in the
investment result from the equity investment of
30.6 percent of the ordinary shares held in Volks-
wagen AG amounted to 111.1 million Euro. The
increase in earnings was primarily attributable
to income from share price hedges relating to the
acquisition of further shares in Volkswagen AG
and the takeover offer for shares in Volkswagen AG,
which gave rise to total net income of 3.593 bil-
lion Euro.