Net Assets

Consolidated balance sheet structure

At the end of the reporting period, the Volkswagen Group’s total assets amounted to €422.2 billion, 3.0% more than as of December 31, 2016. The increase, which was partially offset by exchange rate effects, was primarily due to a rise in business volumes in the Financial Services Division. The structure of the consolidated balance sheet as of the reporting date is shown in the chart on this page. The Volkswagen Group’s equity increased to €109.1 billion, €16.2 billion more than at the end of the previous reporting period. The equity ratio rose to 25.8 (22.7)%.

The “assets held for sale” item contains primarily the anticipated carrying amount of some of the shares in There Holding, which are expected to be disposed of (€0.1 billion). The negotiations are still ongoing, and the disposals are expected to be finalized in the first half of 2018.

As of the end of fiscal year 2017, the Group had off-balance-sheet commitments in the form of contingent liabilities in the amount of €8.4 (6.8) billion, financial guarantees in the amount of €0.3 (0.2) billion and other financial obligations in the amount of €24.5 (25.9) billion. Contingent liabilities relate primarily to legal risks in connection with the diesel issue as well as potential liabilities from tax risks in the Commercial Vehicles Business Area in Brazil. The other financial obligations primarily result from purchase commitments for property, plant and equipment, obligations under long-term leasing and rental contracts and irrevocable credit commitments to customers. In addition, they include investments to which the Group has committed itself, in the infrastructure for zero-emission vehicles and in initiatives to promote access to and awareness of this technology. These commitments were made as part of the settlement agreements in the USA in connection with the diesel issue. Other financial obligations include an amount of €1.3 billion for this purpose.

CONSOLIDATED BALANCE SHEET STRUCTURE 2017
in percent

Automotive Division balance sheet structure

At the end of the reporting period, the Automotive Division’s intangible assets and property, plant and equipment both increased slightly year-on-year. Lease assets were down compared with the end of December 2016 as a result of the sale of part of the PGA Group. Equity-accounted investments declined slightly. The positive business results of the Chinese joint ventures, the purchase of the shares in Navistar and the remeasurement of the interest in HERE were offset by dividend payments resolved by the Chinese joint ventures, the remeasurement of investments, as well as the reclassification of some of the shares in There Holding, which are now held for sale. At €140.9 (139.0) billion, total noncurrent assets were on a level with the previous year.

Current assets amounted to €80.2 (81.1) billion and were virtually unchanged year-on-year; the inventories included in this figure increased by 3.3% for production-related reasons. Total securities stood at €13.5 (14.7) billion and total cash and cash equivalents at €13.8 (14.5) billion, both showing a decline compared with December 31, 2016.

At the end of 2017, the Automotive Division’s equity rose by 18.0% year-on-year to €81.6 billion. It was positively impacted by healthy earnings growth despite special items, as well as by effects from the measurement of derivatives recognized outside profit or loss, the hybrid notes issued in June 2017 and lower actuarial losses from the measurement of pension provisions. Currency translation effects and the dividend paid to the shareholders of Volkswagen AG led to a decline in the Automotive Division’s equity. The capital increase implemented in the Financial Services Division also reduced equity in the Automotive Division, where the deduction was recognized. The noncontrolling interests are mainly attributable to RENK AG and AUDI AG. As these were lower overall than the noncontrolling interests attributable to the Financial Services Division, the figure for the Automotive Division, where the deduction was recognized, was negative. The equity ratio increased to 36.9 (31.4)%.

Noncurrent liabilities of €69.8 (70.0) billion were on a level with December 31, 2016. Noncurrent other liabilities were down, primarily as a result of the positive effects from the measurement of derivatives. The tax reform in the USA passed at the end of the year led to a decline in deferred tax liabilities of €1.0 billion.

As of December 31, 2017, current liabilities amounted to €69.7 billion, a decline of 13.9% compared with the end of 2016. Among other things, reclassifications from noncurrent to current liabilities due to shorter remaining maturities led to an increase in current financial liabilities to €−0.5 (−1.0) billion. 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. The item “Put options and compensation rights granted to noncontrolling interest shareholders” primarily comprises the liability for the obligation to acquire the shares held by the remaining free float shareholders of MAN. Current other liabilities were down as a result of the positive effects from the measurement of derivatives. Current other provisions declined significantly due to their use in connection with the diesel issue.

At the end of 2017, the Automotive Division’s total assets amounted to €221.1 (220.1) billion and were thus on a level with the previous year.

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PASSENGER CARS BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2017

 

Dec. 31, 2016

 

 

 

 

 

Noncurrent assets

 

111,277

 

109,918

Current assets

 

60,052

 

61,600

Total assets

 

171,329

 

171,518

Equity

 

66,449

 

54,789

Noncurrent liabilities

 

55,118

 

56,703

Current liabilities

 

49,762

 

60,026

As of December 31, 2017, noncurrent assets in the Passenger Cars Business Area increased by €1.4 billion to €111.3 billion. While intangible assets and property, plant and equipment were higher, equity-accounted investments declined. Lease assets decreased, primarily due to the partial sale of the PGA Group. Current assets were at the prior-year level, amounting to €60.1 (61.6) billion; the inventories included in this figure increased for production-related reasons. Total securities and cash and cash equivalents were down in the reporting period. On December 31, 2017, total assets were virtually unchanged compared with the previous year, at €171.3 (171.5) billion.

At €66.4 billion, the Passenger Cars Business Area’s equity was 21.3% higher than the prior-year figure, mainly due to earnings-related factors and the hybrid note issued in the reporting period.

Noncurrent liabilities decreased by 2.8%. The financial liabilities and other liabilities included in this item were down significantly. Deferred tax liabilities include the positive effect of the tax reform in the USA.

Current liabilities were down 17.1% year-on-year. Current other provisions declined significantly due to their use in connection with the diesel issue.

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COMMERCIAL VEHICLES BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2017

 

Dec. 31, 2016

 

 

 

 

 

Noncurrent assets

 

27,005

 

26,206

Current assets

 

16,908

 

16,197

Total assets

 

43,913

 

42,403

Equity

 

12,194

 

11,185

Noncurrent liabilities

 

13,975

 

12,531

Current liabilities

 

17,744

 

18,687

In the Commercial Vehicles Business Area, intangible assets were lower and property, plant and equipment higher at the end of December 2017 than at the end of the previous reporting period. Equity-accounted investments increased because of the acquisition of the shares in Navistar. Overall, noncurrent assets grew by €0.8 billion to €27.0 billion. Higher inventories and receivables led to a 4.4% rise in current assets to €16.9 billion. At €43.9 billion, total assets exceeded the prior-year figure by 3.6%.

The 9.0% rise in equity to €12.2 billion in the reporting period was mainly attributable to improved earnings. Noncurrent liabilities increased by 11.5%; the noncurrent financial liabilities contained in this item were up significantly. Driven mainly by a marked decrease in current financial liabilities, current liabilities declined by 5.0%.

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POWER ENGINEERING BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2017

 

Dec. 31, 2016

 

 

 

 

 

Noncurrent assets

 

2,629

 

2,879

Current assets

 

3,250

 

3,285

Total assets

 

5,879

 

6,165

Equity

 

2,963

 

3,157

Noncurrent liabilities

 

711

 

748

Current liabilities

 

2,205

 

2,260

At the end of the reporting period, noncurrent assets in the Power Engineering Business Area were lower than the year-end 2016 figure, driven primarily by a decrease in intangible assets. Current assets were on a level with the previous year. On December 31, 2017, the Power Engineering Business Area reported total assets of €5.9 billion, down 4.6% on the previous year.

At the end of fiscal year 2017, equity amounted to €3.0 billion, an earnings-related decline of 6.1% compared with the end of the previous year. Both noncurrent and current liabilities were slightly down year-on-year at the end of the reporting period.

Financial Services Division balance sheet structure

On December 31, 2017, total assets in the Financial Services Division of €201.1 billion exceeded the prior-year figure by 6.0%.

Noncurrent assets increased by a total of 5.4% compared with the end of 2016. Within this item, lease assets and noncurrent financial services receivables rose in line with the growth in business.

Higher volumes led to a 7.1% rise in current assets. Current financial services receivables were up €3.5 billion, at €53.8 billion. As of the balance sheet date, the Financial Services Division accounted for around 47.6 (46.3)% of the Volkswagen Group’s assets.

Equity in the Financial Services Division amounted to €27.5 billion at the end of 2017, 15.5% more than on the previous year’s balance sheet date. Equity was pushed up by earnings growth and by the capital increase implemented by Volkswagen AG at the beginning of the year to finance the growth in business and to meet regulatory capital requirements. The equity ratio rose to 13.7 (12.5)%.

Higher noncurrent financial liabilities to fund business growth led to an overall increase of 19.6% in noncurrent liabilities compared with December 31, 2016.

Current liabilities declined by 6.1%; the current financial liabilities contained in this item fell significantly. At €31.4  (33.3) billion, deposits from direct banking business were lower than at the end of the previous year.

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CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31

 

 

VOLKSWAGEN GROUP

 

AUTOMOTIVE1

 

FINANCIAL SERVICES

1

Including allocation of consolidation adjustments between the Automotive and Financial Services divisions, primarily intragroup loans.

€ million

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent assets

 

262,081

 

254,010

 

140,912

 

139,003

 

121,169

 

115,007

Intangible assets

 

63,419

 

62,599

 

63,211

 

62,372

 

208

 

227

Property, plant and equipment

 

55,243

 

54,033

 

52,503

 

51,415

 

2,739

 

2,619

Lease assets

 

39,254

 

38,439

 

3,140

 

3,385

 

36,114

 

35,054

Financial services receivables

 

73,249

 

68,402

 

−7

 

9

 

73,256

 

68,393

Investments, equity-accounted investments and other equity investments, other receivables and financial assets

 

30,916

 

30,537

 

22,065

 

21,822

 

8,851

 

8,715

Current assets

 

160,112

 

155,722

 

80,210

 

81,083

 

79,902

 

74,640

Inventories

 

40,415

 

38,978

 

36,113

 

34,947

 

4,302

 

4,031

Financial services receivables

 

53,145

 

49,673

 

−686

 

−660

 

53,832

 

50,333

Other receivables and financial assets

 

32,040

 

30,286

 

17,354

 

17,561

 

14,686

 

12,726

Marketable securities

 

15,939

 

17,520

 

13,512

 

14,703

 

2,427

 

2,817

Cash, cash equivalents and time deposits

 

18,457

 

19,265

 

13,826

 

14,532

 

4,632

 

4,733

Assets held for sale

 

115

 

 

90

 

 

24

 

Total assets

 

422,193

 

409,732

 

221,121

 

220,085

 

201,071

 

189,647

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

109,077

 

92,910

 

81,605

 

69,130

 

27,472

 

23,780

Equity attributable to Volkswagen AG shareholders

 

97,761

 

85,122

 

70,857

 

61,714

 

26,904

 

23,408

Equity attributable to Volkswagen AG hybrid capital investors

 

11,088

 

7,567

 

11,088

 

7,567

 

 

Equity attributable to Volkswagen AG shareholders and hybrid capital investors

 

108,849

 

92,689

 

81,945

 

69,281

 

26,904

 

23,408

Noncontrolling interests

 

229

 

221

 

−339

 

−151

 

568

 

373

Noncurrent liabilities

 

152,726

 

139,306

 

69,805

 

69,982

 

82,921

 

69,324

Financial liabilities

 

81,628

 

66,358

 

6,709

 

5,876

 

74,919

 

60,483

Provisions for pensions

 

32,730

 

33,012

 

32,189

 

32,464

 

540

 

549

Other liabilities

 

38,368

 

39,936

 

30,906

 

31,643

 

7,462

 

8,293

Current liabilities

 

160,389

 

177,515

 

69,711

 

80,973

 

90,678

 

96,542

Put options and compensation rights granted to noncontrolling interest shareholders

 

3,795

 

3,849

 

3,795

 

3,849

 

 

Financial liabilities

 

81,844

 

88,461

 

−458

 

−1,019

 

82,302

 

89,481

Trade payables

 

23,046

 

22,794

 

20,497

 

20,753

 

2,548

 

2,041

Other liabilities

 

51,705

 

62,411

 

45,877

 

57,391

 

5,828

 

5,021

Total equity and liabilities

 

422,193

 

409,732

 

221,121

 

220,085

 

201,071

 

189,647