Porsche 2006 Annual Report Download - page 21

shareholders for the spin-off of Dr. Ing. h.c. F.
Porsche AG and the conversion of the holding into
a European stock corporation, a Societas Europaea
(SE). Added to this were the expenditures for the
extraordinary stockholders’ meeting in Stuttgart
at the end of June. The fluctuating exchange rate
of the euro against the US dollar also negatively
affected the result of Porsche compared to the
previous fiscal year.
As the equity investment in Volkswagen is consoli-
dated at equity, pro rata net income of Volkswagen
AG must be allocated to the Porsche Group. For
Porsche, a share of 30.6 percent of ordinary shares
is taken as a basis. This is equivalent to 22.5 percent
of the ordinary and preference shares issued by Volks-
wagen AG. The amount disclosed by the Porsche
Group as income totaled 1.223 billion Euro. The divi-
dend for the equity investment of 30.6 percent of
the ordinary shares held in Volkswagen AG at the end
of the fiscal year amounted to 111.1 million Euro.
This dividend was recorded as income from equity
investments at Porsche AG.
Income from hedging transactions concluded in
connection with future purchases of Volkswagen
shares and with a view to the mandatory bid to the
Volkswagen shareholders came to a total of 3.593
billion Euro in the 2006/07 fiscal year. Moreover,
as a result of the positive development of the Volks-
wagen share, the investment held had to be re-
valued. A write-up to income of 520.8 million Euro
was therefore recorded in the reporting year.
Porsche achieved an excellent earnings level in the
reporting year in comparison with its competitors
thanks not least to further improved productivity,
a stringent approach to costs and prudent hedging
with respect to major currencies such as the US
dollar. The Group’s net income for the fiscal year
(earnings after taxes) rose to 4.242 billion Euro after
1.393 billion Euro in the previous year. Porsche’s
equity investments in Germany and abroad contri-
buted to the positive earnings development.
The pre-tax result calculated in accordance with
German Commercial Code (HGB) rose to 2.918
billion Euro at Porsche AG; in the previous year
this figure stood at 1.668 billion Euro. Net income
rose from 1.254 billion Euro to 1.930 billion Euro.
Besides the operating business, the distributions
of the associated companies of 149.8 million Euro
were felt here. Further information on the result of
operations is provided in the consolidated financial
statements including the notes as well as the sec-
tion on finances.
Capital Expenditures and Depreciation
Capital expenditures ran at a high level in the re-
porting year. This was due on the one hand to
the increase in business volume and preparations
for new model variants, and on the other to spending
on a wide range of construction projects. In Zuffen-
hausen, these include the enlargement of the engine
plant in preparation for the production of the Panamera
and the construction of the new museum at Porsche-
platz. The Weissach plant incurred costs for a new
drive center and a motor sport center. The reporting
year saw the completion of the supporting steel
construction and roof work in connection with the
expansion of the Leipzig plant. After the end of the
2006/07 fiscal year, the facade was in place and
the installation of building services completed. Major
construction work will be completed by the end
of 2007. In the reporting year, total construction ex-
penditures of 70.6 million Euro were recognized.