Net Assets

Consolidated balance sheet structure

At €351.2 billion, the Volkswagen Group’s total assets as of the fiscal 2014 year-end exceeded the prior-year figure by 8.3%. The structure of the consolidated balance sheet as of the reporting date can be seen from the chart on this page. The Volkswagen Group’s equity amounted to €90.2 billion, up slightly on the €90.0 billion recorded as at December 31, 2013. The equity ratio decreased to 25.7% (27.8%).

Noncontrolling interests declined to €0.2 billion (€2.3 billion) following the increase in the interest in Scania; these are now largely attributable to external shareholders of RENK AG and AUDI AG.

As of December 31, 2014, the Group had off-balance-sheet liabilities in the form of contingent liabilities in the amount of €4.5 billion (€4.2 billion) and other financial obligations in the amount of €27.3 billion (€24.4 billion). The latter primarily result from purchase commitments for property, plant and equipment, as well as obligations under long-term leasing and rental contracts and irrevocable credit commitments to customers.

CONSOLIDATED BALANCE SHEET STRUCTURE 2014
in percent

Automotive Division balance sheet structure

The Automotive Division’s intangible assets and in particular its property, plant and equipment, which reflects the high investment volumes, were up on the year-end 2013 figure as of December 31, 2014. Noncurrent assets rose by a total of 4.7%. Mainly as a result of the positive business performance of the Chinese joint ventures the equity-accounted investments contained in the other noncurrent assets item increased rose from €7.6 billion to €9.4 billion. Overall, current assets increased by 1.3% year-on-year; within this item, inventories rose by 10.5% as a result of the increase in business. Cash and cash equivalents declined by €4.0 billion to €16.5 billion.

All of the outstanding Scania shares with the exception of 0.43% of the share capital were acquired following the fulfillment of all of the conditions for Volkswagen AG’s voluntary tender offer to acquire all Scania shares in May. The transaction reduced equity by €6.7 billion. €6.5 billion was paid for the Scania A and B shares already acquired; a liability was recognized for the shares to be acquired in the squeeze-out. This did not affect liquidity. The noncontrolling interests are mainly attributable to RENK AG and AUDI AG. Since the deduction was recognized in the Automotive Division, the figure was negative overall.

The Automotive Division’s equity amounted to €72.8 billion at the end of 2014, 4.2% lower than on the prior-year reporting date. It was boosted by healthy earnings growth, the hybrid notes issued in March and the capital increase implemented in June by issuing new preferred shares using authorized capital. The equity reduction due to the acquisition of all outstanding Scania shares, higher actuarial losses from the measurement of pension provisions, negative effects from the fair value measurement of derivative financial instruments and the dividends paid out to Volkswagen AG shareholders had an offsetting effect. The equity increase implemented in the Financial Services Division also decreased equity in the Automotive Division, where the deduction was recognized. The division’s equity ratio decreased to 36.9% (39.8%).

Noncurrent liabilities were up on the year-end 2013 figure, at €66.4 billion (€65.3 billion). Within this item, pension provisions increased by €7.9 billion to €29.4 billion as a result of the actuarial remeasurement due to the change in the discount rate. Current liabilities increased by a total of 17.5% year-on-year. Reclassifications from noncurrent to current liabilities, in particular due to shorter remaining maturities, led to an increase in current financial liabilities. The figures for the Automotive Division also contain the elimination of intragroup transactions between the Automotive and Financial Services divisions. As the current financial liabilities for the primary Automotive Division were lower than the loans granted to the Financial Services division, a negative amount was disclosed for the reporting period. The “Put options and compensation rights granted to noncontrolling interest shareholders” item primarily comprises the liabilities for the obligation to acquire the shares held by the remaining free float shareholders of MAN and the Scania shares to be acquired in the squeeze-out.

The Automotive Division’s total assets amounted to €197.4 billion at the end of the reporting period, up 3.5% on the prior-year figure.

Noncurrent assets in the Passenger Cars Business Area rose by 6.9% year-on-year to €101.5 billion as of December 31, 2014. Within this item, property, plant and equipment increased in particular as a result of the comprehensive investment program. Equity-accounted investments rose thanks to the healthy earnings growth recorded by the Chinese joint ventures. Current assets rose by 5.4% to €52.9 billion, mainly due to the increase in inventories. Total assets amounted to €154.3 billion (€145.0 billion) as of year-end 2014.

Equity was down 3.0% on the previous year, at €58.7 billion. This includes negative effects from the decreased interest rate for pension provisions and the completion of the Scania tender offer. Noncurrent liabilities increased by 2.8%, while current liabilities rose by €9.6 billion. This was primarily due to reclassifications resulting from shorter maturities.

In the Commercial Vehicles/Power Engineering Business Area, both noncurrent and current assets were down year-on-year at the end of the reporting period. Total assets declined to €43.1 billion (€45.7 billion).

At €14.1 billion, equity was down 8.9% year-on-year at the end of fiscal 2014. Noncurrent liabilities were 2.6% lower than in the previous year. Current liabilities declined by 5.3%.

Financial Services Division balance sheet structure

The Financial Services Division’s total assets amounted to €153.8 billion on December 31, 2014, €20.2 billion higher than the 2013 figure.

Noncurrent assets rose by 15.3% overall as against year-end 2013. Within this item, lease assets and noncurrent financial services receivables rose as a result of business growth. The higher volumes also led to a 14.9% increase in current assets. Current financial services receivables increased by €5.6 billion to €44.9 billion. The Financial Services Division accounted for approximately 43.8% of the Volkswagen Group’s assets at the reporting date.

The Financial Services Division’s equity amounted to €17.4 billion at the end of the reporting period, 23.6% higher than in the previous year. This was due to earnings-related factors and to the capital increase carried out by Volkswagen AG at the beginning of the year in order to finance business growth and meet regulatory capital requirements. The equity ratio was 11.3% (10.5%). Noncurrent liabilities increased by 26.8% overall as against December 31, 2013 due to higher noncurrent financial liabilities entered into to fund business growth. Current liabilities rose by 4.9% as against the prior–year reporting date, which was also related to funding. Deposits from the direct banking business increased to €25.3 billion (€23.3 billion). The debt to equity ratio amounted to 7:1.