Net Assets

Consolidated balance sheet structure

At €409.7 billion, the Volkswagen Group’s total assets at the end of fiscal year 2016 exceeded the prior-year figure by 7.3%, due above all to the increased business volume of the Financial Services Division. The structure of the consolidated balance sheet as of the reporting date is shown in the chart on this page. At €92.9 billion, the Volkswagen Group’s equity increased by €4.6 billion compared with December 31, 2015. The equity ratio was 22.7 (23.1)%.

As of the end of the fiscal year, the Group had off-balance-sheet commitments in the form of contingent liabilities in the amount of €6.8 (3.5) billion, financial guarantees in the amount of €0.2 (1.6) billion and other financial obligations in the amount of €25.9 (25.4) billion. Contingent liabilities relate primarily to legal risks in connection with the diesel issue. The other financial obligations 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. In addition, as part of the settlement agreements in the USA, Volkswagen announced investments in the infrastructure for zero-emission vehicles and in initiatives to promote access to and awareness of this technology. Other financial obligations include an amount of €1.5 billion for this purpose.

CONSOLIDATED BALANCE SHEET STRUCTURE 2016
in percent

Automotive Division balance sheet structure

The Automotive Division’s intangible assets and its property, plant and equipment were up on the year-end 2015 figure as of December 31, 2016. Equity-accounted investments decreased, mainly as a result of the sale of the LeasePlan shares. There was a significant increase in other receivables and financial assets. Noncurrent assets rose by a total of 4.7%.

Current assets rose by a total of 9.5%; inventories contained in this item rose by 11.4% because of production-related factors. Receivables were up on year-end 2015. Marketable securities increased to €14.7 (12.3) billion as compared with December 31, 2015, while cash and cash equivalents stood at €14.5 (15.7) billion.

The Automotive Division’s equity was €69.1 billion at the end of 2016, and thus 2.6% higher year-on-year. It was lifted by the good earnings growth before special items and positive effects from the measurement of derivatives recognized outside profit or loss. Expenses from special items and higher actuarial losses from the measurement of pension provisions reduced 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 decreased to 31.4 (32.6)%.

Noncurrent liabilities decreased by 4.9% year-on-year to €70.0 (73.6) billion. Pension provisions contained in this figure increased because of the change in the discount rate. Financial liabilities declined by €3.7 billion and other provisions were also down.

At €81.0 (65.9) billion, current liabilities were 22.9% higher overall than at the end of 2015. Reclassifications from noncurrent to current liabilities, due to shorter remaining maturities, as well as short-term borrowings 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. 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 provisions increased because of special items.

The Automotive Division’s total assets amounted to €220.1 billion at the end of the reporting period, up 6.4% on the prior-year figure.

Noncurrent assets in the Passenger Cars Business Area amounted to €109.9 billion as of December 31, 2016, 4.7% higher than a year before. While intangible assets and property, plant and equipment increased, equity-accounted investments declined primarily as a result of the sale of the LeasePlan shares. Current assets rose by 7.5% to €61.6 billion, mainly due to the increase in inventories. Total assets at the end of 2016 amounted to €171.5 (162.3) billion.

At €54.8 (54.6) billion, equity was on a level with the previous year. Noncurrent liabilities declined by 7.3%. The financial liabilities and provisions contained in this item decreased significantly, while pension provisions rose. The 29.0% increase in current liabilities is attributable to, among other factors, reclassifications resulting from shorter maturities and short-term borrowings. In addition, current provisions increased significantly because of special items, in particular relating to the diesel issue.

As of December 31, 2016, the Commercial Vehicles Business Area’s intangible assets were slightly below and its property, plant and equipment above the year-end 2015 figures. Overall, noncurrent assets rose by €1.5 billion to €26.2 billion. Current assets increased by 20.7% to €16.2 billion because of higher inventories and considerably higher cash and cash equivalents. Total assets increased by 11.1% to €42.4 billion.

At €11.2 billion, equity at the end of fiscal year 2016 was up 17.6% year-on-year. Noncurrent liabilities rose by 8.7%; the other provisions contained in this figure increased largely because of special items resulting from legal risks. Driven by the increase in financial liabilities, current liabilities rose by 9.1% compared with the 2015 reporting date.

The Power Engineering Business Area’s noncurrent assets declined compared with the previous year. Current assets were on a level with the previous year. The Power Engineering Business Area recorded total assets of €6.2 billion as of December 31, 2016, 2.8% lower than at year-end 2015.

Due to earnings-related factors and special items from the restructuring program, the Power Engineering Business Area’s equity at the end of the fiscal year was 3.0% lower than the figure of €3.2 billion recorded in the previous year. Noncurrent liabilities fell by 11.1%, while current liabilities were on a level with the previous year.

Financial Services Division balance sheet structure

The Financial Services Division’s total assets amounted to €189.6 billion at the end of December 2016, a 8.3% increase over the figure as of December 31, 2015.

Both lease assets and noncurrent financial services receivables increased because of the growth in business. Noncurrent assets rose by 10.9% overall.

Current assets were up 4.6% year-on-year, primarily as a result of higher financial services receivables.

The Financial Services Division accounted for 46.3 (45.8)% of the Volkswagen Group’s assets at the end of fiscal year 2016.

At €23.8 billion, the Financial Services Division’s equity as of December 31, 2016 exceeded the prior-year figure by 13.8%. In addition to good earnings growth, equity was pushed up by capital increases implemented by Volkswagen AG in the reporting period to finance the growth in business and meet regulatory capital requirements. The equity ratio was 12.5 (11.9)%.

Driven by the decline in financial liabilities, noncurrent liabilities were down by 3.2%.

Current liabilities increased by 16.9% compared with year-end 2015. This increase is attributable to the funding of volume growth. At €33.8 (26.5) billion, deposits from direct banking business were higher than in the previous year.