Porsche 2009 Annual Report Download - page 115

Overall statement on the expected development
of the Porsche SE group
Since deconsolidation of the Porsche
Zwischenholding GmbH group and the Volkswagen
group, Porsche SE has essentially been functioning as a
holding company managing equity investments. The
Porsche SE group’s profit/loss is highly dependent on
the results of operations and the profit/loss of the sig-
nificant investments accounted for at equity in Porsche
Zwischenholding GmbH and Volkswagen AG attributable
to the Porsche SE group. Porsche SE records invest-
ment income in the form of dividends in its separate
financial statements prepared in accordance with the
German Commercial Code.
This short fiscal year, which was created based
on the resolution adopted by the company’s annual gen-
eral meeting on 29 January 2010 to align the fiscal year
with the calendar year, will be the first time Porsche SE
has not included the profit/loss attributable to it from its
investment at equity in Volkswagen AG with a delay of
one month. Consequently, the Volkswagen group will be
included at equity for the period from 1 July 2010 to
31 December 2010 in Porsche SE’s profit/loss for the
short fiscal year running from 1 August 2010 to
31 December 2010.
In light of the cautious recovery of the auto-
motive markets seen in the past few months, Porsche
SE expects the profit/loss from its investments ac-
counted for at equity to show a positive development.
The profit/loss from its investments accounted for at
equity will, however, continue to include the effects,
albeit decreasing over time, resulting from amortiza-
tion of the purchase price allocations begun at the
time of inclusion of Porsche Zwischenholding GmbH
and Volkswagen AG as a joint venture and as an as-
sociate. In addition, the interest payments associated
with the existing syndicated loan will have a negative
impact on the group’s profit/loss until this loan has
been repaid. Overall, Porsche SE expects at least to
break even in the current short fiscal year. In the fis-
cal year 2011, which corresponds to the calendar
year, the company expects to record a profit at group
level.
Porsche SE will push ahead over the next few
months with preparations for the capital increase,
which is intended to play a decisive role in reducing
the company’s liabilities. After implementation of the
capital increase in 2011, Porsche SE in accordance
with the basic agreement shall be merged into Volks-
wagen AG. The proceeds from the capital increase
shall be used for repayment of the syndicated loan of
Porsche SE; among others, this shall lay the founda-
tions for the merger. The basic agreement provides
that the shareholders' resolutions for the merger shall
be taken until 31 December 2011.
From today's perspective it remains uncertain
whether the timetable for the merger provided for in
the basic agreement can be met. The legal and tax
assessment of the complex transaction to be made in
accordance with the basic agreement has not yet been
completed. This is due to external factors, among
them the fact that the tax framework for the merger is
not yet set. Further, with regard to the damages
claims filed in the US against Porsche SE and the
damages claims raised by certain funds in Germany
against Porsche SE (for both matters please refer to
section “Litigation risk” under “Opportunities and risks
of future development” in this management report), at
the current stage of those proceedings, no final as-
sessment of the consequences of those claims for the
merger is possible. The executive board of Porsche
SE currently assumes that a successful clarification of
the current uncertainties is possible and hence the
merger will take place, even though possibly not within
the ambitious timetable provided for in the basic
agreement.
Stuttgart, 1 October 2010
Porsche Automobil Holding SE
The executive board
115