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Annual Report 2011

Table of contents

  • Page 1
    Annual Report 2011

  • Page 2
    2

  • Page 3
    3

  • Page 4
    4 6 TO OUR SHAREHOLDERS 8 10 12 22 28 Letter to our shareholders Company boards of Porsche Automobil Holding SE Report of the supervisory board Corporate governance report Remuneration report (Part of the management report)

  • Page 5
    ...128 132 Group management report and management report of Porsche Automobil Holding SE Significant events Business development Capital market Results of operations, financial position and net assets Porsche Automobil Holding SE (separate financial statements pursuant to German Commercial Code) Value...

  • Page 6
    6

  • Page 7
    7 TO OUR SHAREHOLDERS

  • Page 8
    8 LETTER TO OUR SHAREHOLDERS   +LHYZOHYLOVSKLYZ 7VYZJOL(\[VTVIPS/VSKPUN:,PZVUJV\YZLMVYZ\JJLZZHUKJVTWSL[LK[OLMPZJHS`LHYVUHUHIÌ ZVS\[LS`ZVSPKMVV[PUN;...

  • Page 9
    9 ;OLZLHYLHTIP[PV\ZNVHSZP[Z[Y\L)\[[OL`JHUILHJOPL]LK)V[OJVTWHUPLZOH]LHSS[OLWYLYLX\PÌ ZP[LZYLX\PYLK[VW\[[OLPY]PZPVUZPU[VWYHJ[PJL!L_JP[PUN]LOPJSLZZ\JOHZ[OLUL^7VYZJOL [OL(\KP( HUK[OL=VSRZ^HNLU\W MHZJPUH[PUNIYHUKZLMMPJPLU[THU\MHJ[\YPUNZ[Y\J[\YLZu...

  • Page 10
    ...2012) Manager of IG Metall trade union administration, Stuttgart Berthold Huber* 1st chairman of IG-Metall trade union Werner Weresch* Member of the Porsche Automobil Holding SE works council Member of the Dr. Ing. h.c. F. Porsche AG works council * Employee representative (As of 31 December 2011...

  • Page 11
    ... of the executive board of Porsche Automobil Holding SE Chief Executive Officer of Volkswagen AG and member of the board of management of Volkswagen AG Corporate research and development Matthias Müller Diplom-Informatiker General technical product issues Chairman of the executive board of Dr. Ing...

  • Page 12
    12 REPORT OF THE SUPERVISORY BOARD 3HKPLZHUKNLU[SLTLU +LZWP[LKPMMPJ\S[JVUKP[PVUZVU[OLJHWP[HSTHYRL[Z7VYZJOL:,Z\JJLLKLKPU(WYPSPUPTWSLTLU[Ì PUN[OLPUJYLHZLVM[OLZOHYL...

  • Page 13
    13 *VVWLYH[PVUIL[^LLU[OLZ\WLY]PZVY`IVHYKHUK[OLL_LJ\[P]LIVHYK (ZWHY[VMP[ZHK]PZVY`HUKV]LYZPNO[M\UJ[PVUZ[OLZ\WLY]PZVY`IVHYK^HZRLW[PUMVYTLK[OYV\NOV\[ [OLMPZJHS`LHYI`TLHUZVM^YP[[LUHUK]LYIHSYLWVY[ZMYVT[OLL_LJ\[P]LIVHYKHUKPUQVPU[TLL[PUNZ;OL YLWVY[PUNKLHS[PU...

  • Page 14
    ...2010. In the following meeting on 9 June 2011 the executive board reported on the successful implementation of the capital increase of Porsche SE at the end of March/beginning of April 2011. In addition, the supervisory board discussed the voting behavior at the annual general meeting of the Dr. Ing...

  • Page 15
    ...ck, the members of the executive committee are Dr. Hans Michel Piëch as shareholder representative and Mr. Bernd Osterloh as employee representative. The executive committee met four times in the fiscal year 2011, namely in each case immediately prior to the ordinary supervisory board meetings. In...

  • Page 16
    ... and the current risk report and has been informed about the successfully completed capital increase. The meeting on 27 July 2011 focused on the half-year financial report 2011, the evaluation of the put and call options regarding the remaining shares of Porsche SE in Porsche Zwischenholding GmbH as...

  • Page 17
    ...the shares of Porsche SE to be newly issued in connection with the capital increase were to be determined. At the following meeting on 27 March 2011 the committee approved the resolution of the executive board regarding the determination of the specific subscription price for the newly issued shares...

  • Page 18
    ... AktG in October 2011 and made it permanently accessible to shareholders on the website www.porsche-se.com. The current declaration of compliance is published in full in the corporate governance report as part of the 2011 annual report. The supervisory board reviewed the efficiency of its activities...

  • Page 19
    ...the consolidated financial statements and the combined management and group management report as well as the proposal for the appropriation of net profit available for distribution. Other significant audit topics included the accounting of the capital increase of Porsche SE implemented in April 2011...

  • Page 20
    ... of the capital increase implemented in April 2011 as well as the valuation of the put and call options of the remaining shares of Porsche SE in Porsche Zwischenholding GmbH. Representatives of the auditor attended the meeting of the supervisory board on the relevant agenda item and reported on the...

  • Page 21
    ... declared the resolution of the annual general meeting of 29 January 2010 on the exoneration of the members of the supervisory board for the fiscal year 2008/09 to be null and void. The Stuttgart Higher Regional Court denied the right to appeal its judgment. The company will nevertheless file an...

  • Page 22
    22 C O R P O R AT E G OV E R N A N C E REPORT 9LZWVUZPISL[YHUZWHYLU[HUKLMMPJPLU[JVYWVÌ YH[LNV]LYUHUJLPZHUPU[LNYHSWHY[VM7VYZJOLqZ JVYWVYH[LJ\S[\YL HZ^LSSHZ[OLJVÌHKTPUPZ[YH[PVU...

  • Page 23
    ... boards (at Porsche SE on the one hand, and at Volkswagen AG or Porsche AG on the other) and addresses these in the company's interest. For example, members of the executive board who are also members of the Volkswagen AG board of management do not participate in any resolutions concerning issues...

  • Page 24
    ... company's articles of association (share capital) in accordance with the capital increase performed. The merger committee was established by the supervisory board on 9 June 2011 to pass the resolutions required by law or otherwise conducive to the intended merger with Volkswagen AG in cases where...

  • Page 25
    ... during the annual audit. Directors' dealings Pursuant to Sec. 15a German Securities Trading Act (WpHG), members of the executive board and supervisory board as well as other management personnel and persons closely related to them must disclose the purchase and sale of Porsche shares and related...

  • Page 26
    ... Porsche Automobil Holding SE publishes voting rights notifications by our shareholders in accordance with the German Securities Trading Act (WpHG) as required by this law. Notifications concerning the purchase and sale of Porsche preference shares by members of the executive board and supervisory...

  • Page 27
    ...of existing rights, the recommendation set forth in No. 4.2.3 (4) (severance payment cap) has been complied with only when entering into new contracts with members of the board of management. Finally, the board of management and supervisory board of Volkswagen AG declared on 3 December 2010 that the...

  • Page 28
    ...ER N A N CE R EP O R T Remuneration report (Part of the management report) The remuneration report describes the remuneration system for members of the executive board and supervisory board of Porsche Automobil Holding SE, Stuttgart, ("Porsche SE" or "the company") and explains the basic structure...

  • Page 29
    ...) Hans Dieter Pötsch Dr. Michael Macht (until 30 September 2010) Total 323,945 208,333 109,722 218,995 83,333 944,328 Post-employment benefits The members of Porsche SE's executive board do not receive any pension benefits from the company. As of the end of the fiscal year 2011, just like at the...

  • Page 30
    ...member of the supervisory board holds several offices at the same time, he/she receives remuneration only for the office with the highest remuneration. In addition, the company refunds each supervisory board member for VAT payable on their remuneration. service at Porsche SE in the fiscal year 2011...

  • Page 31
    ..., the remuneration of the supervisory board for its service at Porsche SE in the short fiscal year 2010 totaled 0.6 million euro. This amount includes fixed components of 0.3 million euro and variable components of 0.3 million euro. Beyond this, the supervisory board members did not receive any...

  • Page 32
    ... Zwischenholding GmbH, Stuttgart (and thus also Dr. Ing. h.c. F. Porsche Aktiengesellschaft ("Porsche AG")) as well as Volkswagen Aktiengesellschaft, Wolfsburg, ("Volkswagen AG") were group entities of Porsche SE as defined by Sec. 18 German Stock Corporations Act (AktG) in the fiscal year 2011...

  • Page 33
    ... accounts for around 60 percent. In addition, the members of Porsche AG's executive board receive other benefits in kind, such as the use of company cars and provision of insurance cover, for which Porsche AG bears the taxes incurred. The deductible provided by Sec. 93 (2) German Stock Corporations...

  • Page 34
    ... service on the supervisory board of Porsche AG in the fiscal year 2011. Neither the Porsche Zwischenholding GmbH group nor the Volkswagen group qualify as group companies of Porsche SE within the meaning of IFRSs. Remuneration of the members of the executive board in accordance with the German...

  • Page 35
    ...per year of service at the company. The maximum rate determined by the executive committee of Volkswagen AG's supervisory board is 70 percent. Thomas Edig and Matthias Müller were members of the executive board of Porsche SE and the executive board of Porsche AG in the fiscal year 2011. The members...

  • Page 36
    ... of the supervisory board As described above, Porsche Zwischenholding GmbH (and thus also Porsche AG) as well as Volkswagen AG were still group entities of Porsche SE as defined by Sec. 18 German Stock Corporations Act (AktG) in the fiscal year 2011. Therefore, the total remuneration required...

  • Page 37
    ... Dr. Ferdinand Oliver Porsche His Excellency Sheik Yassim Bin Abdulaziz Bin Yassim Al-Thani Werner Weresch Total 2 1 The figures in the table above take into account the remuneration in the Porsche Zwischenholding GmbH group and in the Volkswagen group that are no longer group companies of Porsche...

  • Page 38
    38

  • Page 39
    39 THE COMPANY

  • Page 40
    40 GROUP MANAGEMENT REPORT AND MANAGEMENT REPORT OF PORSCHE AUTOMOBIL HOLDING SE :PNUPMPJHU[L]LU[Z 5VTLYNLYVM7VYZJOL:,PU[V=VSRZ^HNLU(. ^P[OPU[OLMYHTL^VYRHUK[PTLMYHTLVM[OL IHZPJHNYLLTLU[uHPT[VHJOPL]LPU[LNYH[LK H\[VTV[P]L...

  • Page 41
    ... the annual general meetings of Porsche SE and Volkswagen AG were not adopted by 31 December 2011 ("failure of the merger within the framework and timeframe defined by the basic agreement"). These options relate to the remaining 50.1 percent shareholding in Porsche Zwischenholding GmbH, Stuttgart...

  • Page 42
    42 GROUP MANAGEMENT REPORT Capital increase at Porsche SE In April 2011, Porsche SE successfully completed its capital increase in return for cash contributions resolved at the annual general meeting on 30 November 2010. With the entry of the implementation of the capital increase in the ...

  • Page 43
    ... of information as well as market manipulation by Porsche SE, the companies behind the complaints either failed to participate in price increases of shares in Volkswagen AG and, hence, lost profits or entered into options relating to shares in Volkswagen AG and incurred losses from these options due...

  • Page 44
    ... Ing. h.c. F. Porsche Aktiengesellschaft, Stuttgart ("Porsche AG") and vigorously drive forward Strategy 2018. The supervisory board of Porsche SE approved the premature termination of his appointment to the executive board in its meeting on 27 February 2012. In June 2011, the Porsche AG supervisory...

  • Page 45
    ... Baur laid down his office as a member of the supervisory board as of 31 December 2011. Mr. Bernd Kruppa was appointed as his successor by the Stuttgart local court on 15 February 2012. Strategy 2018 approved During the reporting year, the executive board of Porsche AG developed Strategy 2018 as...

  • Page 46
    46 GROUP MANAGEMENT REPORT Large-scale construction work at various locations Already at its meeting on 15 March 2011, the supervisory board of Porsche AG had approved the decision of Porsche AG's executive board to develop the Leipzig plant into a fully fledged production location, including body...

  • Page 47
    ... improvements in performance, fuel consumption and emission levels. In particular, the group is pressing ahead with the development of hybrid and electric motors. In addition, the Volkswagen group will make cross-product investments of 17.1 billion euro over the next five years. Due to the group...

  • Page 48
    ...the Volkswagen group at the date when the planning was prepared (September 2011) and already includes Porsche Holding Salzburg. The investments in the MAN group and in Porsche Zwischenholding GmbH are still accounted for in group planning using the equity method. The cash outflow for the purchase of...

  • Page 49
    ... 2011, 10 percent more than in the prior year. Sales in western Europe were slightly below the prior-year figure: 12.8 million new vehicles were sold, down just 1 percent. However, only the good performance of the large German market prevented a greater decrease on the continent. In Germany, a total...

  • Page 50
    ...sales, production, financial services and employees only take into consideration operating developments at the Porsche Zwischenholding GmbH group, comprising Porsche AG and its subsidiaries, and at the Volkswagen group. They do not take into account the connection to the Porsche SE group (Porsche SE...

  • Page 51
    ...the Porsche Zwischenholding GmbH group. In the core markets of Germany, North America, Italy, the UK and Japan, the financial services provider manages all its operating activities itself. In all other countries, the company utilizes cooperation partners. Production expanded In the reporting period...

  • Page 52
    ... business area. With its innovative products along the automotive value chain, Volkswagen Financial Services once again contributed to the Volkswagen group's good earnings and sales situation in fiscal year 2011. The number of new finance, leasing and insurance contracts signed in fiscal year 2011...

  • Page 53
    ... 2010) will, Shareholder composition In April 2011, Porsche SE successfully completed its capital increase in return for cash contributions. With the entry of the implementation of the capital increase in the commercial register of the Stuttgart district court on 13 April 2011, the company's share...

  • Page 54
    54 GROUP MANAGEMENT REPORT par-value share representing a notional share of one euro in the share capital. Since then, Porsche SE's subscribed capital has comprised 153,125,000 ordinary shares and 153,125,000 preference shares. Until the end of the 2008/09 fiscal year, the ordinary shares had been...

  • Page 55
    ...55 Results of operations, financial position and net assets Porsche SE functions as a holding company for its investments in the operating companies Porsche Zwischenholding GmbH and Volkswagen AG. Following the change of the fiscal year at Porsche SE in 2010, the fiscal year now runs concurrently...

  • Page 56
    ...to the shareholders of Porsche SE and its hybrid capital investors. Compared to 31 December 2010, cash funds decreased by 38 million euro to 368 million euro. Financial position The cash flow from operating activities of the Porsche SE group came to 43 million euro in the fiscal year 2011 (SFY 2010...

  • Page 57
    ... 2011. The non-current assets of the Porsche SE group totaling 32,261 million euro (31 December 2010: 28,733 million euro) essentially pertain to the shares in Porsche Zwischenholding GmbH and Volkswagen AG accounted for at equity. The investments accounted for at equity have increased by a total...

  • Page 58
    ... GmbH group sold 116,978 vehicles in the fiscal year 2011. Revenue came to 10,928 million euro. The operating result of the Porsche Zwischenholding GmbH group amounted to 2,045 million euro. The Porsche Zwischenholding GmbH group reports a healthy double-digit return on sales. The Volkswagen group...

  • Page 59
    ...SE group's results of operations are therefore impacted most by the profit contributions of the investments accounted for at equity in Porsche Zwischenholding GmbH and Volkswagen AG. In addition, the valuation of the put and call options relating to the remaining shares held by Porsche SE in Porsche...

  • Page 60
    ...net profit for the fiscal year 2011 is determined mainly by the income from investments, the interest result and expenses for the capital increase performed in April 2011. Porsche SE also received dividends of 155 million euro from Porsche Zwischenholding GmbH and 330 million euro from Volkswagen AG...

  • Page 61
    ... for distribution 2011 12 - 14 - 128 485 - 219 136 0 41 - 31 146 86 0 232 SFY 2010 32 - 11 - 44 353 - 113 217 -2 664 0 879 0 - 439 440 Net assets and financial position The financial assets of Porsche SE mainly comprise the investments held in Porsche Zwischenholding GmbH and Volkswagen AG, which...

  • Page 62
    62 GROUP MANAGEMENT REPORT Balance sheet of Porsche Automobil Holding SE as of 31 December 2011 â,¬ million Assets Financial assets Receivables Other receivables and assets Cash and cash equivalents Prepaid expenses 24,771 4,030 228 460 5 29,494 Equity and liabilities Equity Provisions Liabilities...

  • Page 63
    ...The risks relating to the development of Porsche SE's business as the parent company of the Porsche SE group are closely connected to the risks relating to the significant investments in Porsche Zwischenholding GmbH and Volkswagen AG. Acting as a holding company also entails additional risks. Please...

  • Page 64
    ... section presents the main non-financial performance indicators of the Porsche Zwischenholding GmbH group and the Volkswagen group. These value drivers help raise the value of these significant investments held by Porsche SE in the long term. They include newly developed products, processes in the...

  • Page 65
    ... levels. Moreover, the world's first seven-speed manual gearbox is included as standard. Functions like the start-stop system increase the 911 Carrera's efficiency further. The new 911 design versions of the convertible models 911 Carrera* and 911 Carrera S* follow as early as March 2012...

  • Page 66
    ... future as the new entry-level notchback saloon in the compact class. The Mii - another sister model to the Volkswagen up! - was introduced in the reporting period and designed specifically for the SEAT brand, expanding the Spanish brand's product offering to include a new small car. A further high...

  • Page 67
    ...Porsche AG, Daimler AG and the Chrysler group. The Volkswagen group has also continued and intensified cooperation with a number of expert battery manufacturers in 2011. This allows Volkswagen to support the development of high-voltage battery systems for hybrid drives and electric vehicles. In 2010...

  • Page 68
    ... year 2011, the capitalization rate was 67 percent (calendar year 2010: 74 percent). In the fiscal year 2011, research costs and non-capitalized development costs in the Volkswagen group totaled 5,537 million euro; in the fiscal year 2010, they came to 4,589 million euro. Development costs totaling...

  • Page 69
    ... patent applications for innovations and designs is still at a high level at the Porsche Zwischenholding GmbH group. In the fiscal year 2011, the focus was on the new generation of sports cars as well as the development projects in the fields of hybrid technology and e-mobility. When it comes to the...

  • Page 70
    ... Cabriolet PDK Porsche 911 Carrera S Porsche 911 Carrera S PDK Porsche 911 Carrera S Cabriolet Porsche 911 Carrera S Cabriolet PDK Porsche Boxster Porsche Boxster PDK Porsche Boxster S Porsche Boxster S PDK * Optional low-rolling-resistance tires. ** Total operating performance Fuel consumption...

  • Page 71
    ...and avoid negatively impacting Porsche Zwischenholding GmbH group's vehicle production as far as possible. Stable supply situation for procured components and raw materials in the Volkswagen group Rising vehicle sales and numerous product start-ups shaped the supply situation in 2011. Vehicles from...

  • Page 72
    ... and radical localization in new markets The Volkswagen group can cut costs at new production facilities by localizing, meaning the use of local procurement markets. Moreover, radical localization allows Volkswagen to increase the share of value added generated by locally procured components...

  • Page 73
    ...their vehicles. The second-best European vehicle is also a Porsche: the Gran Turismo Panamera. The 911 was named the most reliable vehicle in another survey, the Vehicle Dependability Study 2011. At the same time, the main plant in StuttgartZuffenhausen was rated the best car factory in the world in...

  • Page 74
    ... to modernize the Stuttgart-Zuffenhausen site and ensure long-term job security at the company's headquarters. The facility was completed right on schedule for the start of production of the new 911. The cuttingedge environmentally friendly technology not only means that Porsche is significantly...

  • Page 75
    ...in MAN SE. At the end of the reporting period it consisted of 94 sites, of which 54 produce vehicles. The sites are spread out over the continents of Europe, North and South America, Africa and Asia. The Volkswagen group's efficient production network is composed of vehicle and component plants that...

  • Page 76
    ... production in Foshan will start just a year later. The plant in Ningbo will start manufacturing vehicles in 2014. The automobile market in North America is equally important. In the largest market of this region, the USA, the Volkswagen group put its new vehicle plant in Chattanooga into operation...

  • Page 77
    ... and indirect areas by systematically using the methods and instruments of the group-wide production system. Training centers are being established worldwide in order to train employees of the group brands in the field of production processes. For example, Volkswagen Slovakia opened a new Center for...

  • Page 78
    ... 911 and Porsche Cayenne as the best cars in their respective segments. The annual market research study is based on a survey of about 73,000 new vehicle buyers on a total of 234 different models registered in the period from November 2010 through February 2011. The overall rating aggregates the...

  • Page 79
    ... and sales efficiency, and for optimizing costs at the same time. In 2011, Volkswagen pressed forward with the integration of dealers into its IT system in order to leverage synergies and improve the exchange of information between them and with the group's wholesale operations. A close working...

  • Page 80
    ... for several years. Professional service The programs for continually improving service processes at Porsche Centers led to excellent results again in 2011. Porsche ranked best German manufacturer in ADAC automobile club's 2011 customer satisfaction survey in the workshop, brand and vehicle...

  • Page 81
    ... and endless energy. An excellent reporting year came to an end. The company is growing in all areas. For instance, the number of employees reached a new peak. As of the reporting date (31 December 2011), the Porsche Zwischenholding GmbH group employed 15,307 people - an increase of 16.3 percent on...

  • Page 82
    ... and values; in 2011, it was even rolled out for the first time to new employees from international subsidiaries. Equal opportunities and work/life balance at Porsche A key success factor for Porsche is the diversity of its employees. In the fiscal year 2011, a project was started to ensure...

  • Page 83
    ...the end of the fiscal year 2011, the Volkswagen group employed 501,956 people. The number of employees has thus increased by 25.7 percent compared to the figure as of 31 December 2010. A total of 224,851 people were employed in Germany (plus 24.0 percent). The German share of the workforce fell from...

  • Page 84
    ...Every year, the group board of management and the world works council present the "Best Apprentice Award" to the company's best trainees. This year's prize for the best apprentice was awarded for the eleventh time at the end of November 2011 in Stuttgart. 27 vocational trainees from twelve countries...

  • Page 85
    ... program. Personal development programs for women, an improved work/family balance and flexible working time models accompany the system used by Volkswagen to achieve the individual quotas. Volkswagen specifically recruits female talent. These efforts encompass special "Information Days" for...

  • Page 86
    .... Examples of good practice identified group-wide will be used systematically for process improvements in occupational safety in the future. Company pension plan at Volkswagen To secure the retirement income of former employees, Volkswagen AG along with its brands and subsidiaries operates a number...

  • Page 87
    ..., assigned to the board member for human resources and social issues, the Porsche Zwischenholding GmbH group is giving a clear signal in this area. The CSR strategy, which for the first time has been comprehensively and officially formulated for the company, provides that all future measures for the...

  • Page 88
    ... new employees for the future, and of making findings with practical relevance for its own product developments. One example of support for students is the high number of scholarships that the Porsche Zwischenholding GmbH group is awarding at more than ten selected universities throughout Germany as...

  • Page 89
    ... at a level beyond mere compliance with legal requirements. The Volkswagen group's integrated CSR concept is aimed at avoiding risks, identifying opportunities for development early on and improving the group's reputation. CSR therefore makes an important contribution to increasing the value of the...

  • Page 90
    ... the 2011 fiscal year, with the Panamera S Hybrid. With output of 380 hp, the gran turismo boasts fuel consumption of just 6.8 liters per 100 km in a best case scenario, which is equivalent to CO 2 emissions of just 159 g/km. But the completely newly designed 911 Carrera, which celebrated its world...

  • Page 91
    ... been available for order since March 2011. Porsche is working flat out to bring the model to series production. The first vehicles are slated for delivery from November 2013. Thanks to the hybrid technology, the high-performance sports car is expected to consume just three liters of fuel per 100 km...

  • Page 92
    ... and energy management system in line with future requirements, enhances innovativeness and reduces the environmental impact of the location. Porsche also fulfills its responsibility for environmental protection at other group sites. At the Weissach facility, work on extending plant development and...

  • Page 93
    ...Environmentally friendly production processes at Volkswagen Active climate protection and the efficient use of raw materials that are becoming increasingly scarce play an important role at Volkswagen. In addition to the emphasis the Volkswagen group places on environmentally compatible products, it...

  • Page 94
    ...is designed as the efficiency version in the Audi A7 in 2010, Audi expanded its range of engines for the A7 in 2011 with a high-performance version of this engine, the BiTurbo. With 230 kW (313 hp) and a torque of 650 Nm, this Fuel and powertrain strategy As in the past, the Volkswagen group's fuel...

  • Page 95
    ... vehicles to customers, the Volkswagen group proved that customers need not make sacrifices in terms of safety, comfort and suitability for everyday use when they opt for e-mobility. The fleet trials that started this year in Germany will be expanded to Austria, France, Belgium and the USA in 2012...

  • Page 96
    ... Zwischenholding GmbH group on 7 December 2009. Since then, the investments in Volkswagen AG and Porsche Zwischenholding GmbH have been included at equity in the consolidated financial statements of Porsche SE. The reporting packages of the Porsche Zwischenholding GmbH group and the Volkswagen group...

  • Page 97
    ... of Porsche SE as part of the financial statements closing process. The data reports are processed in a consolidation system, which is based on standard software and to which access and rights are restricted by the existing authorization and access rules. The clear delineation of areas of...

  • Page 98
    98 GROUP MANAGEMENT REPORT Porsche SE functions as a holding company for its investments in the operating companies Porsche Zwischenholding GmbH and Volkswagen AG. The income of Porsche SE consists mainly of the dividend payments of these two equity investments. The risks from investments only ...

  • Page 99
    ... terms of the expected development of interest rates and transferred to third parties if appropriate. Liquidity risks Specific risks faced by Porsche SE Due its function as a holding company managing its investments in the two operating companies, Porsche SE faces mainly financial and legal risks...

  • Page 100
    ... impairment loss recognized on the significant investments in Porsche Zwischenholding GmbH and Volkswagen AG recognized in Porsche SE's consolidated financial statements and could reduce the profit reported by the Porsche SE group. In order to ascertain any need to record an impairment, the company...

  • Page 101
    ... call options that Porsche SE and Volkswagen AG granted each other for the remaining 50.1 percent share held by Porsche SE in Porsche Zwischenholding GmbH, changes in the value of this equity investment have no impact on the Porsche SE's separate financial statements. Risk arising from the use of...

  • Page 102
    ...management report. Overall, Porsche SE's executive board considers the risks arising from the use of financial instruments - with the exception of the possible effects on profit or loss relating to the put and call options for the 50.1 percent share held by Porsche SE in Porsche Zwischenholding GmbH...

  • Page 103
    ...longer than anticipated and are not expected to be concluded before the start of 2012. The Stuttgart public prosecutor has to date not issued a statement on the current status of proceedings. Porsche SE considers the allegations made to be without merit. In 2010, 46 plaintiffs filed six actions for...

  • Page 104
    ... of information as well as market manipulation by Porsche SE, the companies behind the complaints either failed to participate in price increases of shares in Volkswagen AG and, hence, lost profits or entered into options relating to shares in Volkswagen AG and incurred losses from these options due...

  • Page 105
    ... as auto-electrics and electronics. By avoiding duplicate investment, the annual depreciation charge can be reduced. Moreover, the earnings of the Porsche Zwischenholding GmbH group can also be improved by combining purchasing functions and sharing existing sales channels. The main risks relating...

  • Page 106
    ... to the company. Identifying the main risk categories and control areas of relevance to the group-wide financial reporting process; Controls for monitoring the group-wide financial reporting process and its results at the level of the group's executive board and at subsidiary level; Preventative...

  • Page 107
    ...centrally by Porsche AG's risk management department in cooperation with the planning department. The plausibility and adequacy of the risk reports are examined in detailed interviews with the areas concerned. The leasing and hire-purchase business operated in the group's financial services division...

  • Page 108
    ... be taken. The documented reporting channels mean that management always has access to an overall picture of the current risk situation. Porsche Zwischenholding GmbH and the Porsche Zwischenholding GmbH group are only prepared to take transparent risks that are proportionate to the benefits expected...

  • Page 109
    ...landscape. The key markets for the group's products are western Europe and North America, and, in recent years, China. However, growth in China could be jeopardized if major cities such as Beijing wish to dramatically reduce the volume of new vehicles registered annually by introducing corresponding...

  • Page 110
    ... is deemed by Porsche Zwischenholding GmbH's management to be low. To further secure future growth, a debenture bond of 500 billion euro was issued through Porsche Liquidity risk The Porsche Zwischenholding GmbH group is reliant on adequate refinancing to meet its capital requirements. The terms...

  • Page 111
    ...of Porsche Financial Services are largely hedged through the use of suitable derivatives (e.g., interest swaps). In the case of fixed-rate bonds of the Porsche Zwischenholding GmbH group, there is no interest risk. For the syndicated two lines of credit that fall due at the end of 2012 or optionally...

  • Page 112
    ... In some markets, the Porsche Zwischenholding GmbH group bears this residual value risk. Operational risk management is provided via ongoing monitoring of the development of pre-owned car prices by means of data available within and outside the company. Residual value forecasts are used to check the...

  • Page 113
    ... steps for managing risks. Short development times and pressure on costs place high demands on suppliers. Parts deliveries are regularly subjected to quality and punctuality checks. The group sets itself high quality goals in both the production and the development of new vehicles, taking care to...

  • Page 114
    114 GROUP MANAGEMENT REPORT If product defects are extant after the start of production despite these risk avoidance measures, these defects are recorded and assessed in the sales markets. The aim is to determine and remedy the cause. To this end, Porsche AG has set up an interdisciplinary working...

  • Page 115
    ... on the information currently available, there are no developments in the Porsche Zwischenholding GmbH group that could jeopardize the ability of the group to continue as a going concern or that could significantly and negatively impact the net assets, financial position and results of operations of...

  • Page 116
    ... financial reporting process The Volkswagen group's accounting is organized along decentralized lines. For the most part, accounting duties are performed by the consolidated companies themselves or transferred to the group's centralized shared-service centers. The financial statements of Volkswagen...

  • Page 117
    ... integral parts of corporate management. Risk areas are evaluated by the controlling department and reflected in the financial reporting. Porsche Holding Salzburg and MAN SE, which were consolidated in 2011, have already implemented mature structures for risk early warning systems. Starting in 2012...

  • Page 118
    ...been taken are incorporated into the monthly forecasts on further business development in a timely manner. This means that the board of management has access to an overall picture of the current risk situation through the documented reporting channels during the year as well. The Volkswagen group is...

  • Page 119
    ... strong impact on the company's earnings. Volkswagen counters this risk with a clear, customer-oriented and innovative product and pricing policy. Outside western Europe, its overall delivery volume is broadly diversified across the markets of North America, South America, AsiaPacific, and central...

  • Page 120
    ...have been in force for after-sales service since June 2010, as well as the amendments included in EU Regulation 566/2011 dated 8 June 2011 expanding independent market participants' access to technical information, mean that Volkswagen may be exposed to increased competition in the aftermarkets. The...

  • Page 121
    ... avoided almost entirely. In 2011, the Volkswagen group expanded production at its international locations significantly. In order to ensure the necessary capacity, suppliers also increased their deliveries above and beyond what was originally agreed. Volkswagen expects demand to remain high in 2012...

  • Page 122
    ... thus helps to fulfill customer expectations and consequently boost the company's reputation, sales figures and earnings. IT risk At Volkswagen, a global company geared toward further growth, the information technology (IT) used in all divisions group-wide is assuming an increasingly important role...

  • Page 123
    ...protection regulations for passenger cars and light commercial vehicles and therefore the key regulatory framework for product design and marketing by all vehicle manufacturers operating in the European markets. From 2012 onwards, the average CO2 emissions of Europe's new passenger car fleet may not...

  • Page 124
    ... the goal of limiting global warming to 2°C, creating a viable basis for the necessary further negotiation process. In order to be best prepared for the third emissions trading period in 2013, the Volkswagen group calculated and reported the CO2 emissions to be reported for its German plants in...

  • Page 125
    ... rates, commodity prices, and share and fund prices. Management of financial and liquidity risks is the responsibility of the central group treasury department, which minimizes these risks using non-derivative and derivative financial instruments. The Volkswagen group board of management is informed...

  • Page 126
    ... of the company's rating could adversely affect the terms attached to the Volkswagen group's borrowings. In the reporting period, the acquisition of the automobile trading operations of Porsche Holding Gesellschaft m.b.H. (Porsche Holding Salzburg) and a majority interest in MAN SE resulted in...

  • Page 127
    ... to the significant investments held in Porsche Zwischenholding GmbH and Volkswagen AG presented above and the specific risks of Porsche SE. The risk management system ensures that these risks can be controlled. Based on of the information currently available to us, the executive board has not...

  • Page 128
    ...Baur also laid down his office as a member of the supervisory board of Porsche AG on 31 December 2011. The Stuttgart local court appointed Mr. Bernd Kruppa as his successor on 15 February 2012. Overall economic development The growth rate of the global economy can be expected to continue to slow in...

  • Page 129
    ... is likely to be fueled by continued high demand for Porsche vehicles in China and other emerging markets. On the other hand, the Porsche Zwischenholding GmbH group expects its attractive product range to fuel further growth in demand in the main markets of Europe and North America. In the next two...

  • Page 130
    ... range of models, growing presence in all major regions of the world and wide range of financial services. The Volkswagen group therefore expects its sales to customers to exceed the previous years' levels overall in 2012 and 2013. The Chinese joint venture companies, as well as the new production...

  • Page 131
    ... group level in the fiscal years 2012 and 2013. In the fiscal year 2012, too, a special effect on the group's profit will arise from an adjustment through profit or loss, but without effect on cash, of the valuation of the put and call options for the shares in Porsche Zwischenholding GmbH remaining...

  • Page 132
    ... With 118,868 deliveries, the fiscal year 2011 marks another highlight in the company's history. For the first time, Porsche delivered more than 100,000 units in the international market in one fiscal year. This represents an increase of 22 percent on 2010. Double-digit growth rates compared to the...

  • Page 133
    ... eleventh year following its establishment, Porsche Latin America continued its success story. Today, dealers in 30 countries in Central and South America are supported. Deliveries in the fiscal year 2011 totaled 3,113 units, a 21 percent increase on the prior-year figure. The most successful model

  • Page 134
    ... the Cayenne with 2,080 deliveries, followed by the mid-engined sports cars with 507 units. The number of 911 vehicles delivered to customers came to 272. The Gran Turismo Panamera accounted for 254 units. Brazil, the region's growth driver, remained the largest individual market, followed by Mexico...

  • Page 135
    ... model series were delivered, an increase of 2 percent. Due to the generation change initiated for the sports cars, these figures were 19 percent down on the prior-year level. Swiss and Austria: growth in the heart of Europe Porsche Switzerland made 1,801 deliveries to customers, an increase...

  • Page 136
    ...-year level. 576 vehicles of the mid-engined Boxster and Cayman sports cars were delivered to customers, representing a 20 percent increase on the prior-year period. Future growth will focus on Africa and India. A total of 21 importers are supported from Dubai. China: largest growth market In 2011...

  • Page 137
    ... year's level, in spite of the slight decline in passenger car markets in several countries. Passenger cars and light commercial vehicles sold in western Europe accounted for 38.4 percent (prior year: 40.3 percent) of the group's delivery volume. All volume brands increased sales in the reporting...

  • Page 138
    ... sales as against the previous year in the Indian passenger car market, with 111,637 units sold. The Polo hatchback, Polo notchback and Å KODA Fabia hatchback models demonstrated the highest growth rates. Deliveries in North America In the reporting period, deliveries to Volkswagen group customers...

  • Page 139
    ...customers to 80,108 units, up 25.7 percent year-on-year. In western Europe, we sold 38,073 vehicles, of which 35,466 were trucks. In this market, the group benefited more than average from replacement purchases of heavy trucks in the course of the economic recovery. The Volkswagen group sold a total...

  • Page 140
    140

  • Page 141
    141 FINANCIALS

  • Page 142
    142 FINANCIALS

  • Page 143
    ... Other operating expenses Profit/loss from investments accounted for at equity Profit/loss before financial result Finance costs Financial revenue Financial result Profit/loss before tax Income tax Profit/loss for the year thereof attributable to shareholders of Porsche Automobil Holding SE non...

  • Page 144
    ... Porsche SE for the period from 1 January to 31 December 2011 â,¬ million Profit/loss for the year Other comprehensive income from investments accounted for at equity (after tax) Other income after taxes Total comprehensive income thereof attributable to shareholders of Porsche Automobil Holding SE...

  • Page 145
    ...Consolidated balance sheet of Porsche SE as of 31 December 2011 â,¬ million Assets Investments accounted for at equity Other receivables and assets Non-current assets Other receivables and assets Income tax assets Cash, cash equivalents and time deposits Current assets Note 31/12/2011 31/12/2010...

  • Page 146
    ... Consolidated statement of cash flows of Porsche SE for the period from 1 January to 31 December 2011 â,¬ million 1. Operating activities Profit/loss for the year Change in other provisions Income taxes Change in deferred taxes Income taxes paid Income taxes received Income from disposal of stock...

  • Page 147
    ...As of 1 January 2011 Profit/loss for the year Other comprehensive income after taxes Total comprehensive income for the period Capital increase in exchange for cash contributions Transaction costs Dividends paid2 Change in non-controlling interests at the level of investments accounted for at equity...

  • Page 148
    148 FINANCIALS Notes to the consolidated financial statements of Porsche SE for the fiscal year 2011 Basis of presentation Porsche Automobil Holding SE ("Porsche SE") is a European Company (Societas Europaea) and is headquartered at Porscheplatz 1 in 70435 Stuttgart, Germany. It is registered at ...

  • Page 149
    ...business activities of the Porsche SE group are limited to holding and managing the investments in Porsche Zwischenholding GmbH, Stuttgart, and Volkswagen AG, Wolfsburg. As separate assets the investments do not meet the definition of operating segments, and segment reporting in accordance with IFRS...

  • Page 150
    ... it holds the majority of voting rights of 50.1%. Since this point in time, Porsche Zwischenholding GmbH has been a joint venture of Porsche SE and Volkswagen AG and has accordingly been accounted for at equity. The number of companies included in the consolidated financial statements of Porsche SE...

  • Page 151
    ... Equity Profit/loss EUR000 EUR000 1 2 Diverging from the capital share, the share in voting rights is 50.73% as of the reporting date. Short fiscal year for the period from 21 November to 30 November 2011. Porsche Zweite Vermögensverwaltung GmbH, Stuttgart, was merged into Porsche SE effective...

  • Page 152
    ...statements of Porsche SE as an associate. As of 31 December 2011, the market value of the investment in Volkswagen AG amounted to â,¬15,524 million (31 December 2010: â,¬15,861 million). The Volkswagen group reported the following key figures for the fiscal year 2011: â,¬ million Non-current assets...

  • Page 153
    ... contributions to profit or loss made by the investments accounted for at equity have a significant influence on the net assets and results of operations of the Porsche SE group, the consolidation principles applicable only within the Porsche Zwischenholding GmbH group and the Volkswagen group are...

  • Page 154
    ...changed to reflect the Porsche SE group's share of changes in net assets of the associate or joint venture. The group's share in profit/loss after tax and after noncontrolling interests is recognized in the income statement within the item "profit/loss from investments accounted for at equity". This...

  • Page 155
    ... discounted cash flow method. The most recent five-year corporate planning approved by the management of the equity investments was used as a basis in each case. One integral component of the corporate planning for the Porsche Zwischenholding GmbH group is the increase in the annual sales volume to...

  • Page 156
    ... the separate item is reclassified to profit or loss. The foreign currency rates applied for translating transactions to the euro are presented in the following table. Balance sheet Closing rate Porsche SE group and Porsche Zwischenholding GmbH group1 1â,¬= Argentina Australia Brazil Canada China...

  • Page 157
    ... to profit or loss made by the investments accounted for at equity have a significant impact on the net assets and results of operations of the Porsche SE group, those accounting policies applicable at the Porsche SE group only within the Porsche Zwischenholding GmbH group and the Volkswagen group...

  • Page 158
    ...in time at which all recognition criteria are met. Capitalized development costs are amortized beginning at the start of production using the straight-line method over the expected useful life of the product, taking any impairments into account. The useful life is usually five to ten years. Research...

  • Page 159
    ... charged on a straight-line basis, reflects the pattern of the assets' expected utility to the company. Higher depreciation rates are applied for some equipment used in shift operations. Depreciation is based on the following useful lives: Years Buildings Site improvements Technical equipment and...

  • Page 160
    ...net investment. Borrowing costs Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are recognized as part of the cost of that asset. The Porsche SE group did not capitalize any borrowing costs either in the 2011 reporting period or in SFY 2010...

  • Page 161
    ... the asset in prior years. Investment property Investment property held to generate rental income is accounted for at depreciated cost. The underlying useful lives and depreciation methods used in subsequent measurement correspond to those applied for items of property, plant and equipment used by...

  • Page 162
    ...reliably, income is only recognized at the amount of the contract costs incurred (zero profit method). If the total of accumulated contract costs and reported profits exceeds advance payments received, the development contracts are recognized as an asset under trade receivables as future receivables...

  • Page 163
    ...instruments measured are traded on an active market. If there is no active market for a financial instrument, fair value is calculated using appropriate valuation techniques such as generally accepted option price models or discounting future cash flows with the market interest rate, or by referring...

  • Page 164
    ..., there is a put option for Porsche SE and a call option for Volkswagen AG to Porsche SE's remaining 50.1% of shares in Porsche Zwischenholding GmbH. Derivative financial instruments are generally recognized at fair value through profit or loss and remeasured at fair value in subsequent periods.

  • Page 165
    ... is reclassified to profit or loss. Gains or losses from cash flow hedge accounting are presented under other operating income or expenses in the income statement. The options held by the Porsche SE group as of the reporting date generally are not traded on a public market. In such cases, IAS 39.48...

  • Page 166
    ... that it has become probable that future taxable profit will allow it to be recovered. Deferred taxes are measured on the basis of the tax rates that apply or that are expected to apply based on the current legislation in the individual countries at the time of realization. Deferred taxes are not...

  • Page 167
    ... fair value less costs to sell, and are presented separately in current assets and liabilities in the balance sheet. Hybrid capital Provided the bond conditions of the hybrid capital issued satisfy the corresponding criteria, hybrid capital is accounted for as an equity instrument of the group in...

  • Page 168
    ... amount is calculated using best estimates, including estimated cost increases. Non-current provisions are stated at their present value at the reporting date. The interest rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the...

  • Page 169
    ... assets and contingent liabilities. These judgments and estimates reflect the current information available. Key sources of estimations are the parameters influencing the profit or loss from investments accounted for at equity such as the fair value from purchase price allocations, the useful...

  • Page 170
    ... statements and assumptions as to the expected future development of the global and industry environment were used to estimate the company's future business performance. The estimates on which accounting is based are associated with uncertainties. This applies above all to forecasted cash flows...

  • Page 171
    ... 10 "Consolidated Financial Statements" focuses on the introduction of a uniform consolidation model for all companies that is based on the parent company's control over subsidiaries. The control concept is thus applicable to both parent-subsidiary relationships that are based on voting rights as...

  • Page 172
    ... use power over the investee to affect the amount of the investor's returns. All three elements of the control concept have to be fulfilled. IFRS 10 replaces the requirements from IAS 27 "Consolidated and Separate Financial Statements" in relation to consolidation and SIC 12 "Consolidation - Special...

  • Page 173
    ... statements for SFY 2010 already presented amendments that have still not been applied in the fiscal year 2011. Porsche SE will analyze the impact of the new standards and the amendments on the presentation of its net assets, financial position and results of operations as well as the cash flows...

  • Page 174
    ... increase in the investment in Volkswagen AG. The income from valuation of options on non-stock company shares reported for the comparative period contains the change in the fair value of the put option of Porsche SE relating to the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH...

  • Page 175
    ...SFY 2010 547 17 0 10 16 590 Expenses from valuation of options on non-stock company shares contain the change in the fair value of the call option of Volkswagen AG relating to the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH. On the one hand, the increase in fiscal year 2011...

  • Page 176
    ... capital 2011 4,827 - 165 4,662 -2 4,660 SFY 2010 1,281 - 206 1,075 0 1,075 The profit or loss from investments accounted for at equity consists of the profit or loss contribution from the investments in Porsche Zwischenholding GmbH of â,¬395 million (prior year: â,¬106 million) and Volkswagen AG...

  • Page 177
    ... periods Deferred tax income/expense, Germany Deferred tax income/expense, other countries Deferred taxes Income tax 2011 - 42 3 - 39 - 42 8 0 8 - 31 SFY 2010 - 648 1 - 647 - 648 0 0 0 - 647 The overall income tax rate for the German entities is 30% (prior year: 30%). The tax rate applied for the...

  • Page 178
    ... year: 30%) and the actual reported income tax expense: â,¬ million Profit before tax Group tax rate Expected income tax expense Tax rate related differences Difference in tax base Recognition and measurement of deferred taxes Taxes relating to other periods Reported income tax expense 2011 28...

  • Page 179
    ... per share 2011 Profit/loss for the year Profit/loss attributable to non-controlling interests - hybrid capital investors Profit/loss attributable to shareholders of Porsche SE Profit/loss attributable to ordinary shares (basic) Profit/loss attributable to preference shares (basic) Profit/loss...

  • Page 180
    ... shares in Porsche Zwischenholding GmbH held by Porsche SE. In addition, to improve transparency, gains and losses on the disposal of stock options as well as noncash expenses and income from marking stock options to market were presented in separate line items in the cash flow from operating...

  • Page 181
    ... with the cash-settled stock option transactions used to secure stock prices in the comparative period and for other purposes and was therefore not included in cash funds reported in the statement of cash flows. As a result of the disposal of all of these stock options in SFY 2010, the remaining...

  • Page 182
    ... of Porsche SE. Porsche SE remained the economic owner, exercised voting rights and received the profit distributions. In addition the investment in Porsche Zwischenholding GmbH was pledged as collateral for financial liabilities. The right of lien could not be exercised before Volkswagen AG had...

  • Page 183
    ... mandatory or optional grounds for insolvency have arisen at Porsche AG. The loan receivables from the Porsche Zwischenholding GmbH group thus exceed the corresponding financial liabilities by a total of â,¬136 million (prior year: â,¬136 million). There is neither a guarantee by Volkswagen AG for...

  • Page 184
    ...-stock company shares Assets from derivatives without hedging relationship 31/12/2011 31/12/2010 232 232 459 459 The options on non-stock company shares contain the positive fair value of the put option relating to the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH. Prior...

  • Page 185
    ... to dividends as of 1 August 2010. The new preference shares were admitted to stock exchange trading on 13 April 2011. Taking into account transaction costs of â,¬95 million, the net issue proceeds came to â,¬4,893 million. The annual general meeting on 17 June 2011 passed a resolution to cancel the...

  • Page 186
    ... on the consolidated income statement in the VW group's consolidated financial statements. The statutory financial statements of Porsche SE as of 31 December 2011 report a net retained profit available for distribution of â,¬232 million (prior year: â,¬440 million). The executive board will propose...

  • Page 187
    3 187 Capital management The target of capital management at Porsche SE is the continuous increase in the enterprise value, securing its liquidity and a return on investment that is commensurate with the risk involved. These goals aim to protect the interests of the shareholders and employees and ...

  • Page 188
    ... assumptions: Germany % Discount rate Increase in wages and salaries Career progress Increase in pensions 2011 5.00 3.00 0.50 1.50 SFY 2010 4.80 3.00 0.50 1.50 Changes in the present value of pension obligations: â,¬ million As of 1 January and 1 August Current service cost Interest expenses...

  • Page 189
    ... Experience adjustments on plan assets 2011 8 0 8 2.7% - SFY 2010 8 0 8 - 8.8% - 2009/10 8 0 8 1.7% - 2008/09 17,222 - 3,510 13,712 - 0.7% - 0.5% 2007/08 760 - 41 719 13.1% - 1.7% [17] Non-current and current income tax provisions and other provisions 31/12/2011 thereof due within one year...

  • Page 190
    ... in the fiscal year 2011 and in SFY 2010. [18] Trade payables The trade payables disclosed, amounting to â,¬9 million (prior year: â,¬33 million), were mainly liabilities for legal and consulting services. [19] Non-current and current financial liabilities Financial liabilities break down...

  • Page 191
    ... liabilities 31/12/2011 5,087 150 5,237 31/12/2010 942 151 1,093 1,088 5 thereof non-current thereof current 5,087 150 The item derivative financial instruments includes Volkswagen AG's call option for the remaining shares in Porsche Zwischenholding GmbH held by Porsche SE. In the comparative...

  • Page 192
    .../12/2010 942 942 The options on non-stock company shares contain the fair value of Volkswagen AG's call option relating to the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH. Prior to conclusion of the new syndicated loan agreement, the claims arising at the level of Porsche SE...

  • Page 193
    ...Porsche SE group, the monitoring of the enterprise value of Porsche Zwischenholding GmbH and Volkswagen AG, the development of interest levels on the capital markets and monitoring of the financial ratios. Any concentrations of risk within the Porsche SE group are also analyzed using these processes...

  • Page 194
    ... 232 469 4,731 31/12/2010 Other financial receivables Financial guarantees Derivative financial instruments Cash, cash equivalents and time deposits 4,027 2 459 622 5,110 There are no past due or impaired financial assets in the Porsche SE group. The credit ratings of the gross carrying amounts of...

  • Page 195
    ... on the management of liquidity risks in the Porsche SE group and risks originating from financial covenants presented in the risk report as part of the group management report. Liquid funds comprise the cash, cash equivalents and time deposits reported in the balance sheet. The following...

  • Page 196
    ... call options for the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH. The risks arise from fluctuations in the general interest rate risks, from fluctuation in the enterprise value of Porsche Zwischenholding GmbH and to a small extent from cash investments. It is company policy...

  • Page 197
    ... at Porsche SE The market price risk is due in particular to changes in the enterprise value of Porsche Zwischenholding GmbH. It affects the measurement of the put and call option and consequently their measurement in the balance sheet as well as the profit or loss reported in the income statement...

  • Page 198
    ... on non-stock company shares contain the put option relating to the remaining shares held by Porsche SE in Porsche Zwischenholding GmbH amounting to â,¬3,943 million and the call option of the same amount, as in the prior year. Market values of the derivatives were determined using market data as...

  • Page 199
    3 199 The market value of financial instruments is determined by reference to stock market listings, reference prices or generally accepted valuation techniques such as the discounted cash flow method. The underlying interest and discount rates were determined based on the EURIBOR. The following ...

  • Page 200
    ... value of financial instruments in level 3 is calculated using valuation techniques with inputs that are not based on observable market data. These include options for equity instruments of nonlisted companies. The put and call options relating to the shares in Porsche Zwischenholding GmbH remaining...

  • Page 201
    ... (acquisitions) Reclassification from level 2 to level 3 Total comprehensive income with effect on profit/loss recognized directly in equity Disposal (sales) As of 31 December 2011 Result recognized in profit or loss fiscal year 2011 Other operating profit/loss thereof attributable to assets...

  • Page 202
    202 FINANCIALS The principal risk variables for measurement of the options held by Porsche SE for the remaining shares in Porsche Zwischenholding GmbH is the enterprise value in each case and, in SFY 2010, additionally the executive board's assessment of the theoretical probability of exercise. ...

  • Page 203
    ... longer than anticipated and are not expected to be concluded before the start of 2012. The Stuttgart public prosecutor has to date not issued a statement on the current status of proceedings. Porsche SE considers the allegations made to be without merit. In 2010, 46 plaintiffs filed six actions for...

  • Page 204
    ... of information as well as market manipulation by Porsche SE, the companies behind the complaints either failed to participate in price increases of shares in Volkswagen AG and, hence, lost profits or entered into options relating to shares in Volkswagen AG and incurred losses from these options due...

  • Page 205
    ... the company to purchase Volkswagen AG shares at economically secured conditions, if it later decided to purchase them, as well as payment agreements with, and severance payments to, former members of Porsche SE's executive board. All the applicants withdrew their applications in May 2011, thereby...

  • Page 206
    ...to the executive board in its meeting on 27 February 2012. In June 2011, the Porsche AG supervisory board appointed Mr. Thomas Edig deputy chairman, board member for human resources and social issues, and labor director for a further five years, effective as of 1 May 2012. The control body appointed...

  • Page 207
    ... Porsche GmbH, Stuttgart. The share in voting rights of Porsche Holding KG allocated to the notifying parties pursuant to Sec. 22 (1) No. 2 WpHG, old version, or Sec. 22 (1) No. 1 WpHG, new version, were actually held via Porsche GmbH, Salzburg and Porsche GmbH, Stuttgart. In both cases, the share...

  • Page 208
    ... to Sec. 22 (1) Sentence 1 No. 1 WpHG. Voting rights that are attributed to the Qatar Investment Authority are held via the entities as set forth in (1) (b) through (d) which are controlled by it and whose proportion of voting rights in Porsche Automobil Holding SE amounts to 3% each or more.

  • Page 209
    ...on 18 December 2009: "Pursuant to Sec. 21 (1) WpHG we hereby notify for and on behalf of Qatar Holding Germany GmbH, Frankfurt am Main, Germany, that its direct voting rights in Porsche Automobil Holding SE exceeded the thresholds of 3% and 5% and reached the threshold of 10% on 18 December 2009 and...

  • Page 210
    210 FINANCIALS Notification on 30 May 2011: On 30 May 2011, we were informed of the following pursuant to Sec. 21 (1) WpHG: "The percentage of voting rights held by the following notifying parties in Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart ("Porsche SE"), fell below the ...

  • Page 211
    ... on 30 May 2011: On 30 May 2011, we were informed of the following pursuant to Sec. 21 (1) Sentence 1 WpHG: I. 1. The percentage of voting rights held by the following notifying parties in Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, fell below the voting rights threshold of 75...

  • Page 212
    212 FINANCIALS 5. The voting rights allocable to Ferdinand Porsche Privatstiftung, Salzburg, are actually held by the following controlled entities, whose voting share in Porsche SE amounts to 3% or more in each case: Ferdinand Porsche Holding GmbH, Salzburg, Louise Daxer-Piëch GmbH, Salzburg, ...

  • Page 213
    ... share in Porsche SE amounts to 3% or more in each case: Familie Porsche Privatstiftung, Salzburg, Familie Porsche Holding GmbH, Salzburg, Ing. Hans-Peter Porsche GmbH, Salzburg, Hans-Peter Porsche GmbH, Grünwald, Familie Porsche Beteiligung GmbH, Grünwald 5. The voting rights allocable to Dr...

  • Page 214
    214 FINANCIALS 7. The voting rights allocable to Familie Porsche Holding GmbH, Salzburg, are actually held by the following controlled entities, whose voting share in Porsche SE amounts to 3% or more in each case: Ing. Hans-Peter Porsche GmbH, Salzburg, Hans-Peter Porsche GmbH, Grünwald, Familie ...

  • Page 215
    ...Familienholding GmbH, Salzburg, Austria, and Porsche Gesellschaft m.b.H., Salzburg, Austria, in Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, fell below the voting rights threshold of 75% on 24 May 2011 and amounts to 73.28% (112,205,710 voting rights) as of that date. 2. A share of...

  • Page 216
    ...of purchase rights resulting from financial instruments according to Sec. 25 (1) Sentence 1 WpHG." Notification on 21 June 2011: With reference to its voting rights notification dated 30 May 2011, Porsche Verwaltungs GmbH, Salzburg, Austria, informed Porsche Automobil Holding SE, Stuttgart, Germany...

  • Page 217
    ...on 21 June 2011: With reference to its voting rights notification dated 30 May 2011, Porsche Verwaltungs GmbH, Salzburg, Austria, informed Porsche Automobil Holding SE, Stuttgart, Germany, on 21 June 2011 in accordance with Sec. 27a (1) WpHG of the following: "The voting rights threshold is exceeded...

  • Page 218
    218 FINANCIALS Notification on 5 October 2011: Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, Germany, was informed of the following on 5 October 2011 pursuant to Sec. 21 (1) Sentence 1 WpHG: I. 1. The percentage of voting rights held by the following notifying party in Porsche ...

  • Page 219
    ..., Gerhard Porsche GmbH, Grünwald, Familien Porsche-DaxerPiech Beteiligung GmbH, Grünwald 6. The voting rights allocable to Ferdinand Porsche Holding GmbH, Salzburg, are actually held by the following controlled entities, whose voting share in Porsche SE amounts to 3% or more in each case: Louise...

  • Page 220
    ... share in Porsche SE amounts to 3% or more in each case: Familie Porsche Privatstiftung, Salzburg, Familie Porsche Holding GmbH, Salzburg, Ing. Hans-Peter Porsche GmbH, Salzburg, Hans-Peter Porsche GmbH, Grünwald, Familie Porsche Beteiligung GmbH, Grünwald 5. The voting rights allocable to Dr...

  • Page 221
    ... The percentage of voting rights held by Porsche Piech Holding GmbH, Salzburg, in Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, exceeded the voting rights threshold of 75% on 4 October 2011 and amounts to 90.00% (137,812,500 voting rights) as of that date. 2. A share of 8.87% of the...

  • Page 222
    ... shares in the issuer." Notification on 5 October 2011: Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, Germany, was informed of the following on 5 October 2011 pursuant to Sec. 21 (1) Sentence 1 WpHG: "1. The percentage of voting rights held by Porsche Piech Holding GmbH, Salzburg...

  • Page 223
    ...arising from the shares of the following shareholder were allocated to ZH 1320 GmbH: Familie Porsche Beteiligung GmbH, Grünwald, Germany. 2. The percentage of voting rights held by ZH 1330 GmbH, Salzburg, Austria, in Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, exceeded the voting...

  • Page 224
    ...: Familie Porsche Beteiligung GmbH, Grünwald, Germany. These voting rights were not obtained by exercise of purchase rights resulting from financial instruments according to Sec. 25 (1) Sentence 1 WpHG. Notification on 3 November 2011: Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart...

  • Page 225
    ...Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, Germany, exceeded the voting rights threshold of 75% on 5 December 2011 and amounts to 78.63% (120,395,572 of a total of 153,125,000 voting rights in Porsche Automobil Holding SE) as of that date: 1. 2. 3. 4. 5. 6. 7. Prof. Dipl.-Ing. Dr...

  • Page 226
    ... voting rights arising from the shares of the respective shareholder in accordance with Sec. 22 (1) Sentence 1 No. 1 WpHG): * Ferdinand Piëch GmbH, Grünwald, Germany; * Hans-Michel Piëch GmbH, Grünwald, Germany; * Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald, Germany; * Porsche...

  • Page 227
    ... to 0.00% of voting rights in the issuer in each case (0 voting rights) as of that date. PP 1480 GmbH, Grünwald, Germany, has been dissolved through merger." Notification on 7 December 2011: Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, Germany, was informed of the following on...

  • Page 228
    ...ch GmbH, Grünwald, Germany. These voting rights were not obtained by exercise of purchase rights resulting from financial instruments according to Sec. 25 (1) Sentence 1 WpHG." Notification on 24 January 2012: Porsche Automobil Holding SE, Porscheplatz 1, 70435 Stuttgart, Germany, was informed of...

  • Page 229
    ...the power to participate in the financial and operating policies of the entity, but do not control it. In the 2011 reporting period, this concerns members of the supervisory board and the executive board of Porsche SE as well as their close family members. The disclosure requirements pursuant to IAS...

  • Page 230
    ... required for Porsche AG's operations. · Volkswagen AG will hold Porsche SE harmless from certain financial guarantees issued by Porsche SE to the creditors of entities in the Porsche Zwischenholding GmbH group for the amount of its share in Porsche Zwischenholding GmbH's capital (please refer...

  • Page 231
    ...the executive board and of the supervisory board, short-term employee benefits of â,¬3.3 million were paid out in the fiscal year 2011 (prior year: â,¬1.6 million). No post-employment benefits were paid out either in the fiscal year 2011 or in SFY 2010. The members of Porsche SE's executive board do...

  • Page 232
    ... the remuneration paid by Porsche SE. The members of Porsche SE's executive board receive a fixed basic salary only. The total remuneration of the supervisory board for fiscal year 2011 amounts to â,¬1.0 million (prior year: â,¬0.6 million). The remuneration consists of short-term benefits only...

  • Page 233
    ...The executive board and supervisory board of Porsche SE issued the declaration required by Sec. 161 AktG on 5 October 2011 and made it permanently accessible to the shareholders of Porsche SE on the website www.porsche-se.com. Stuttgart, 27 February 2012 Porsche Automobil Holding SE The executive...

  • Page 234
    ... business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group. Stuttgart, 27 February 2012 Porsche Automobil Holding SE The executive board Prof. Dr. Martin Winterkorn Thomas Edig Hans Dieter...

  • Page 235
    3 235 Auditors' report of the group auditor "We have audited the consolidated financial statements prepared by Porsche Automobil Holding SE, Stuttgart, comprising the income statement, the statement of comprehensive income, the balance sheet, the statement of cash flows, the statement of changes ...

  • Page 236
    ... bodies Members of the supervisory board of Porsche Automobil Holding SE Dr. Wolfgang Porsche (chairman) A) B) Dr. Ing. h.c. F. Porsche AG, Stuttgart (chairman) Volkswagen AG, Wolfsburg Porsche Holding Gesellschaft m.b.H., Salzburg Porsche Gesellschaft m.b.H., Salzburg (deputy chairman) Familie...

  • Page 237
    ...Cars North America Inc., Wilmington Porsche Ibérica S.A., Madrid Porsche Italia S.p.A., Padua Porsche Piech Holding AG, Salzburg (chairman) Volksoper Wien GmbH, Vienna Schmittenhöhebahn AG, Zell am See Werner Weresch A) Dr. Ing. h.c. F. Porsche AG, Stuttgart B) Hans Baur (until 31 December 2011...

  • Page 238
    ... F. Porsche AG, Stuttgart AUDI AG, Ingolstadt Volkswagen Financial Services AG, Braunschweig (chairman) Autostadt GmbH, Wolfsburg (chairman) Bertelsmann AG, Gütersloh Bentley Motors Ltd., Crewe Volkswagen (China) Investment Company Ltd., Beijing (deputy chairman) Volkswagen Group of America, Inc...

  • Page 239
    3 239 Balance sheet of Porsche Automobil Holding SE as of 31 December 20111 â,¬ million Assets Non-current assets Financial assets Current assets Trade receivables Other receivables and assets Cash and cash equivalents 31/12/2011 31/12/2010 24,771 24,771 4,030 228 460 4,718 24,771 24,771 4,...

  • Page 240
    240 FINANCIALS Income statement of Porsche Automobil Holding SE for the period from 1 January to 31 December 2011 â,¬ million Other operating income Personnel expenses Other operating expenses Income from investments Interest result Income from ordinary activities Extraordinary expenses Income ...