Porsche 2011 Annual Report Download - page 55

Results of operations, financial
position and net assets
Porsche SE functions as a holding company
for its investments in the operating companies Por-
sche Zwischenholding GmbH and Volkswagen AG.
Following the change of the fiscal year at Porsche SE
in 2010, the fiscal year now runs concurrently with
the calendar year. The present consolidated financial
statements of Porsche SE therefore cover the period
from 1 January to 31 December 2011. The compara-
tive period, the short fiscal year 2010, ran from
1 August to 31 December 2010, covering a five-
month period. Due to the different durations of the
two fiscal years, the financial position and results of
operations of the fiscal year 2011 are not fully com-
parable to the financial position and results of opera-
tions of the comparative period.
Results of operations
In the period from 1 January to 31 Decem-
ber 2011, the Porsche SE group generated a profit
for the year of 59 million euro, following a profit for
the year of 1,286 million euro recorded in SFY 2010.
The company presents a positive result from invest-
ments accounted for at equity of 4,660 million euro
(SFY 2010: 1,075 million euro). However, this was
largely compensated by a non-cash special effect
recognized in income from the adjustment of the
valuation of the put and call options for the shares in
Porsche Zwischenholding GmbH remaining with Por-
sche SE totaling minus 4,372 million euro (SFY 2010:
minus 389 million euro). The main parameters for the
valuation of the put and call options in the fiscal year
2011 were above all the theoretical probability of
exercise of the options as well as the enterprise
value of Porsche Zwischenholding GmbH. The enter-
prise value of Porsche Zwischenholding GmbH in turn
depends to a large extent on the underlying planning
and the cost of capital derived as of the respective
valuation date.
As the merger was not achieved within the
framework and timeframe of the basic agreement,
the valuation of the put and call options as of 31
December 2011 was to be based on a theoretical
probability of 100 percent that the options will be
exercised. Since the theoretical probability was still
50 percent as of 31 December 2010, the increase to
100 percent placed a considerable burden on earn-
ings (we refer to our statements under “No merger of
Porsche SE into Volkswagen AG within the framework
and timeframe of the basic agreement – aim to
achieve integrated automotive group with Volks-
wagen unchanged” in the “Significant events” section
of this management report). Furthermore, an update
of the corporate planning of Porsche Zwischenhold-
ing GmbH and the additional model series planned in
the sporty off-roader segment (Macan) resulted in an
increase in the enterprise value and in a negative
impact on earnings due to the valuation of the put
and call options at fair value.
The increase in the cost of capital used for
valuation purposes compared to the prior fiscal year
end had an opposite effect on the valuation of the
put and call options. However, this increase only
partially compensated for the increase in the enter-
prise value and the theoretical probability of the
exercise of the options and, in turn, the net valuation
result.
Other operating income for the fiscal year
2011 of 12 million euro (SFY 2010: 269 million euro)
chiefly comprises income from the reversal of provi-
sions. In the comparative period, other operating
income contained in particular income from stock
price hedging (102 million euro) and income from the
valuation of the put option for the remaining shares
held by Porsche SE in Porsche Zwischenholding
GmbH (158 million euro).
The Porsche SE group’s other operating ex-
penses of 4,445 million euro (SFY 2010: 590 million
euro) essentially contain the effect described from
the valuation of the put and call options for the
shares in Porsche Zwischenholding GmbH remaining
with Porsche SE at fair value totaling minus 4,372
million euro (SFY 2010: expenses from the valuation
of the call option of 547 million euro).
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