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Annual Financial Statements of Volkswagen AG

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    Annual Financial Statements of Volkswagen AG
    Balance Sheet of Volkswagen AG as of December 31, 2011
                                                                               Note   Dec. 31, 2011   Dec. 31, 2010
    € million

    Assets
    Fixed assets                                                                 1
    Intangible assets                                                                          135             163
    Tangible assets                                                                          4,512           3,858
    Long-term financial assets                                                             47,897          38,056
                                                                                           52,543          42,077
    Current assets
    Inventories                                                                  2           3,799           3,230
    Receivables and other assets                                                 3         13,867          13,909
    Securities                                                                   4              80              79
    Cash-in-hand and bank balances                                               5           5,326           7,738
                                                                                           23,071          24,956
    Prepaid expenses                                                                            52              67
    Excess of plan assets over post-employment benefit liability                10               –             122
    Total assets                                                                           75,666          67,223


    Equity and Liabilities
    Equity
    Subscribed capital                                                           6           1,191           1,191
         Ordinary shares                                                 755
         Preferred shares                                                436
         Contingent capital                                        102
    Capital reserves                                                             7           9,413           9,410
    Revenue reserves                                                             8           7,140           5,432
    Net retained profits                                                                     1,715           1,039
                                                                                           19,459          17,072
    Special tax-allowable reserves                                               9              53              59
    Provisions                                                                  10         28,815          24,838
    Liabilities                                                                 11         27,330          25,251
    Deferred income                                                                              9               3
    Total equity and liabilities                                                           75,666          67,223
                                                                                                                    3
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Income Statement of Volkswagen AG for the Period
January 1 to December 31, 2011
                                                                                         Note     2011      2010
 € million

 Sales                                                                                    12     67,178    57,243
 Cost of sales                                                                                  –61,789   –53,059
 Gross profit on sales                                                                            5,389     4,184
 Selling expenses                                                                                –4,534    –4,210
 General and administrative expenses                                                             –1,033     –880
 Other operating income                                                                   13      4,139     3,478
 Other operating expenses                                                                 14     –3,057    –2,435
 Financial result                                                                         15      6,240     4,791
 Write-downs of long-term financial assets and securities classified as current assets              –1        –1
 Result from ordinary activities                                                                  7,143     4,928
 Extraordinary result                                                                     16     –1,095    –1,789
 Taxes on income                                                                                 –2,630    –1,589
 Net income for the year                                                                          3,418     1,550
4




    Notes to the Annual Financial Statements of
    Volkswagen AG for the Period ended
    December 31, 2011

    Financial statements in accordance with the German Commercial Code

    The annual financial statements of Volkswagen AG have been prepared in accordance with the
    provisions of the Handelsgesetzbuch (HGB – German Commercial Code) and comply with the
    provisions of the Aktiengesetz (AktG – German Stock Corporation Act).
         To enhance the clarity of presentation, we have combined individual items of the balance sheet
    and the income statement. These items are disclosed separately in the notes. The income statement
    uses the cost of sales (function of expense) format to enable better international comparability.
         Volkswagen AG is a vertically integrated energy company within the meaning of section 3 no. 38
    of the Energiewirtschaftsgesetz (EnWG – German Energy Industry Act) and is therefore subject
    to the provisions of the EnWG. In the electricity sector, both Volkswagen AG and a subsidiary carry out
    the generation and sales and electricity distribution functions. To prevent discrimination and
    cross-subsidies, separate accounts must normally be maintained for these functions in accordance
    with section 6b(3) of the EnWG (unbundling requirement in accounting systems). Customer
    systems in accordance with section 3 no. 24 b or no. 24 a of the EnWG can be assumed for both
    the medium-voltage level (VW Kraftwerk GmbH, in part Volkswagen AG) and the low-voltage
    level (Volkswagen AG). Customer systems are also power generating systems within the meaning
    of section 3 no. 15 of the EnWG. This means that there is neither a public distribution network
    (section 3 no. 17 of the EnWG – power supply networks for general supply purposes) nor a closed
    distribution network (section 110 of the EnWG) as an exception to the general supply network.
    Both distribution networks are defined as a power supply network within the meaning of section 3
    no. 16 of the EnWG and are therefore negatively defined versus the customer system. The
    medium- and low-voltage levels almost exclusively serve operational energy transportation purposes
    and thus have no competition ramifications as far as the electricity market is concerned.
         The list of all shareholdings is a component of the notes and can also be downloaded from
    the electronic companies register at www.unternehmensregister.de and from www.volks-
    wagenag.com/ir under the heading “Mandatory Publications” and the “Annual Reports” menu
    item.



    Declaration on the German Corporate Governance Code in accordance with
    section 161 of the AktG/section 285 no. 16 of the HGB

    The Board of Management and Supervisory Board of Volkswagen AG issued the declaration of
    conformity in accordance with section 161 of the AktG on November 18, 2011.
        The declaration of conformity has been made permanently available at www.volks-
    wagenag.com/ir under the heading “Corporate Governance” and the menu item “Declarations
    of Conformity”.



    Significant events in the fiscal year

    Additional interests in MAN SE, Munich, were acquired for approximately €3.8 billion.
         On November 10, 2010, the shareholders of Porsche Gesellschaft m.b.H., Salzburg,
    exercised their right to sell the trading business of the company to Volkswagen for €3.3 billion.
    The company was therefore acquired by VW Holding Österreich GmbH, Salzburg, a subsidiary
    of Volkswagen AG, in fiscal year 2011 following a capital contribution of €3.3 billion by
    Volkswagen AG.
                                                                                                             5
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

    Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




€0.2 billion was invested in shares of SGL Carbon SE, Wiesbaden.

In addition, capital contributions were implemented at Audi AG, Ingolstadt, (€1.0 billion) and
VW Financial Services AG, Braunschweig (€0.7 billion). There were also smaller capitalization
measures at affiliated companies.
    A further €0.9 billion was invested in long-term investments.



Accounting policies

In most cases, the accounting policies applied in the previous year were retained. As before, we
have added the items Other investment income and expenses and Other financial result to the
classification format for the income statement.
    Intangible assets are carried at cost and amortized over three to five years using the straight-
line method. Grants paid for third-party assets are capitalized as purchased rights to use and
amortized over five years. Assets are derecognized once they have been fully amortized.
    Tangible assets are carried at cost and reduced by depreciation. Investment grants are deducted
from cost.
    Production costs are recognized on the basis of directly attributable material and labor costs, as
well as proportionate indirect material and labor costs, including depreciation and amortization.
Administrative cost components are not included.
    Depreciation is based primarily on the following useful lives:

>   Buildings:                                                                               25 – 50 years
>   Leasehold improvements:                                                                  9 – 33 years
>   Technical equipment and machinery:                                                       5 – 20 years
>   Operating and office equipment (including special tools and devices):                    3 – 25 years

For additions up until December 31, 2009, to the extent allowed by tax law, depreciation of movable
items of tangible assets is generally charged initially using the declining balance method, and
subsequently using the straight-line method, and also reflects the use of assets in multishift
operation. The option to retain and adjust lower carrying amounts of tangible asset balances at
December 31, 2009 in accordance with section 67(4) of the Einführungsgesetz zum Handels-
gesetzbuch (EGHGB – Introductory Act to the German Commercial Code) has been exercised.
Movable items of tangible assets purchased or manufactured as from January 1, 2010 are
depreciated using the straight-line method.
    Additions of movable assets are depreciated ratably in the year of acquisition.
    Low-value assets are written off and derecognized in full in the year they are acquired. In
addition, certain items of operating and office equipment with individual purchase costs of up to
€1,500 are treated as disposals when their standard useful life has expired.
    The differences between the carrying amounts required by the HGB and the lower carrying
amounts allowed under tax law were recorded in the special tax-allowable reserves presented
between equity and liabilities in the balance sheet. Existing special reserves are reversed to the
income statement, and new special reserves due to tax regulations are not recognized.
    Shares in affiliated companies and other equity investments are carried at the lower of cost
and net realizable value.
    Long-term investments are carried at the lower of cost or fair value. Securities held to cover
post-employment benefit obligations are offset against the corresponding provisions.
    Non- or low-interest-bearing loans are carried at their present value; other loans are carried
at their principal amount.
    Raw materials, consumables and supplies, and merchandise carried in inventories are
measured at the lower of average cost and replacement cost.
    In addition to direct materials and direct labor costs, the carrying amount of finished goods
and work in progress also includes proportionate indirect materials and labor costs, including
6




    depreciation in the amount required. Inventories are carried at a fixed carrying amount to a limited
    extent.
         Adequate valuation allowances take account of all identifiable storage and inventory risks.
         Receivables and other assets are carried at their principal amounts. Valuation allowances are
    recognized for identifiable specific risks.
         Receivables due after more than one year are carried at their present value at the balance
    sheet date by applying an interest rate to match the maturity.
         Receivables denominated in foreign currencies are translated at the middle spot rate prevailing
    at the date of initial recognition. Receivables that are due within less than one year are translated at
    the middle spot rate at the reporting date. In the case of longer-term receivables, a lower exchange
    rate at the balance sheet date results in the remeasurement of the receivable at a lower carrying
    amount, with the difference recognized in the income statement; a higher exchange rate at the
    balance sheet date (remeasurement gain) is not recognized. Hedged receivables are not remeasured
    at the closing rate.
         Purchased foreign currency and interest rate options are carried at the lower of cost or fair value
    until maturity.
         Securities classified as current assets are carried at the lower of cost or fair value.
         Adequate provisions are recognized at their settlement amount for identifiable risks and
    uncertain obligations on the basis of prudent business judgment. Provisions cover all identifiable
    risks of future settlement.
         The principles for measuring the pension provisions can be found in note (10) Provisions.
    Provisions that have an expected remaining maturity of more than one year are discounted at an
    interest rate to match the maturity. We have recognized a long-term provision in accordance
    with the net presentation principle to present the actual economic burden. The amounts to be
    presented in the financial result (mainly unwinding the discount on the amount brought forward)
    are included in the Other financial result item.
         Provisions for warranty obligations are recognized on the basis of the historical or estimated
    probability of claims affecting vehicles delivered.
         Currency forwards and commodity futures contracts are measured by comparing the agreed
    rate with the forward rate for the same maturity at the balance sheet date. A provision is recognized
    for any resulting unrealized loss. Any positive gains (remeasurement gains) are not recognized.
    Gains and losses are not offset. Measurement gains or losses are discounted to the present
    value.
         Financial instruments such as currency forwards and options are combined together with assets,
    liabilities, executory contracts, or highly probable forecast transactions to form a hedge, where
    possible and feasible. The items are not measured to the extent that and for as long as offsetting
    changes in value or cash flows are compensated.
         Liabilities are carried at their redemption or settlement amount.
         Liabilities denominated in foreign currencies are translated at the middle spot rate prevailing at
    the date of initial recognition. Short-term foreign currency liabilities due within one year or less
    are measured at the middle spot rate. Long-term foreign currency liabilities are recognized at a
    higher carrying amount, with the difference recognized in the income statement if the closing
    rate is higher. In contrast, lower exchange rates at the balance sheet date (remeasurement gains) are
    not recognized.
         The amount of contingent liabilities disclosed corresponds to the liable amount.
         In the income statement, the allocation of expenses to the cost of sales, selling and general and
    administrative functions is based on cost center accounting principles.
         Cost of sales contains all expenses relating to the purchase of materials and the production
    function, the costs of merchandise, the cost of research and development, and warranties and
    product liability expenses.
         Selling expenses include personnel and non-personnel operating costs of our sales and
    marketing activities, as well as shipping, advertising, sales promotion, market research and
    customer service costs.
                                                                                             7
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




General and administrative expenses include personnel and non-personnel operating costs of
the administrative functions.
    Other taxes are allocated to the consuming functions.
8




    Foreign currency translation

    Transactions denominated in foreign currencies are translated at the exchange rates prevailing
    at the transaction dates or at agreed exchange rates. Expected exchange rate losses at the balance
    sheet date are reflected in the measurement of the items. Equity investments are translated at
    the rate prevailing at the date of acquisition.
        To hedge future cash flows – primarily from expected future sales, purchases of materials and
    credit transactions – against currency and interest rate fluctuations, Volkswagen AG uses derivatives
    such as currency forwards and options, including structured options, as well as interest-rate
    hedges such as caps. Where possible and feasible, they are recognized in accordance with
    section 254 of the HGB (hedge accounting) (see Accounting policies). The remaining transactions are
    measured in accordance with the imparity principle (under which expected or unrealized losses
    must be recognized, but the recognition of unrealized gains is prohibited). Assets or liabilities
    hedged by cross-currency swaps and currency forwards are translated at the contractually
    agreed rates at the time of initial recognition.



    Balance Sheet Disclosures

    (1) FIXED ASSETS
    The classification of the assets combined in the balance sheet and their changes during the year
    are presented on pages 10 to 11. The carrying amount of fixed assets at the balance sheet date is
    €52,543 million. Fixed assets are composed of intangible assets, tangible assets and long-term
    financial assets.

    Capital expenditures amounted to:

                                                                                 2011             2010
     € million

     Intangible assets                                                             33               46
     Tangible assets                                                            1,923            1,139
     Long-term financial assets                                                10,093           10,907
     Total                                                                     12,049           12,091




    Depreciation, amortization and write-downs were charged on:

                                                                                 2011             2010
     € million

     Intangible assets                                                            62               86
     Tangible assets                                                            1,237            1,193
     Long-term financial assets                                                     1                0
     Total                                                                      1,300            1,280




    The additions to shares in affiliated companies and other equity investments primarily relate to
    the acquisition of shares of MAN SE, Munich and SGL Carbon SE, Wiesbaden, as well as capital
    contributions at VW Holding Österreich GmbH, Salzburg, Audi AG, Ingolstadt, and VW Financial
    Services AG, Braunschweig.
        Reclassifications relate primarily to the carrying amount of the investment in MAN SE,
    Munich.
        Volkswagen AG invested a further €888 million in long-term investments in 2011. Securities
    investment funds with a fair value of €2,897 million (including money market funds for Time Assets
    amounting to €49 million) carried as long-term investments were offset against the corresponding
    provisions in accordance with section 246(2) sentence 2 of the HGB.
                                                                                                                                                           9
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

    Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Reversals of write-downs of financial assets relate primarily to the carrying amount of the
investments in VW Retail GmbH, Wolfsburg, VW Group Sales India P.L., Mumbai, and LLC
Volkswagen Group Rus, Kaluga.

DISCLOSU RES IN ACCORDANCE WITH SECTION 285 NO. 26 OF TH E HGB


Securities investment funds (values as of December 31, 2011)

                                                                                             Fair value –                      Is daily
                                                  Carrying                                      carrying                   redemption      Write-downs
                                                                                                            Distribution
                                                  amount                  Fair value             amount            2011*     possible?    not recognized
    € million

    HI-TV Fund                                        2,828                   2,775                  –53             30            yes              yes
    HI-TV-AR Fund                                       423                     414                  –10             15            yes              yes
    HI-ZW Fund                                        1,014                   1,014                    –             38            yes               no
    HI-PF Fund                                        1,835                   1,835                    –             53            yes               no

*    For fiscal year 2010.


The funds’ investment objectives are a return to match the maturity with appropriate risk
diversification using the following asset classes:
    equities, fixed-income securities, cash investments and other assets.
    Fair values are calculated on the basis of quoted market prices.
    The treasury funds ( HI-TV and HI-TV-AR) are allocated to fixed assets at Volkswagen AG and
measured at cost in accordance with the HGB. In this context, in accordance with section 253(3)
sentence 3 of the HGB, they are only written down if the impairment of the fund units is expected
to be permanent. The HI-TV and the HI-TV-AR funds were not written down to the lower fair value in
2011 as no permanent impairment was expected. The reasons for this were an upward trend in
the fair values of both funds in the course of 2011 and the improvement in the negative difference
between the fair value and the carrying amount.
    In accordance with section 253(1) of the HGB in conjunction with section 246(2) of the HGB,
assets that are exempt from attachment by all creditors and that serve to settle liabilities from
post-employment benefit obligations are recognized at fair value. The fair value of these assets
corresponds to the market price (section 255(4) of the HGB). After measuring these assets at fair
value, the Bilanzrechtsmodernisierungsgesetz (BilMoG – German Accounting Law Modernization
Act) requires them to be offset against the related obligations (section 246(2) of the HGB). They
were offset against the related obligations.
    Due to the measurement of the Time Assets and pension funds at fair value, changes in value
are recognized immediately in income. This means that there is no requirement to test them for
any potential permanent impairment.
10




     STATEMENT OF CHANGES I N FIXED ASSETS OF VOLKSWAGEN AG

                                                               GROSS CAR RYI NG AMOU NTS




                                                                          Cost                                                  Cost
                                                                   Jan. 1, 2011    Additions    Transfers   Disposals   Dec. 31, 2011
      € million

      Intangible assets
      Concessions, industrial and similar rights and assets,
      and licenses in such rights and assets                              415              31          1         120             327
      Payments on account                                                    –              2          1           –               3
                                                                          415              33          1         120             329
      Tangible assets
      Land, land rights and buildings, and buildings on
      third-party land                                                  4,633              39         41           4           4,709
      Technical equipment and machinery                                10,143           417           91         496         10,156
      Other equipment, operating and office equipment                  13,987           754           70         159         14,653
      Payments on account and assets under construction                   284           713        –204            2             791
                                                                       29,048         1,923           –1         661         30,309
      Long-term financial assets
      Shares in affiliated companies                                   28,613         8,822        3,210          13         40,633
      Loans to affiliated companies                                       499              77          –          79             497
      Other equity investments                                          5,141           306      –3,210            0           2,237
      Loans to other investees and investors                                 1              –          –           0               1
      Long-term investments                                             4,196           888            –         357           4,727
      Other loans                                                           77              –          –           1              76
                                                                       38,528        10,093            –         449         48,171
      Total fixed assets                                               67,990        12,049            –       1,230         78,809
                                                                                                                                                                            11
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

   Balance Sheet       Income Statement       Notes   Responsibility Statement   Auditors’ Report




D E P R E C I AT I O N , A M O R T I Z AT I O N A N D W R I T E - D O W N S



C U M U L AT I V E         D E P R E C I AT I O N ,                                                                C U M U L AT I V E
D E P R E C I AT I O N ,   A M O RT IZAT IO N                                                                      D E P R E C I AT I O N ,
A M O RT IZAT IO N         AND WRITE-                                                                              A M O RT IZAT IO N
                                                                                                    REVERSALS OF
AND WRITE-                 DOWNS IN                                                                                AND WRITE-                     Carrying       Carrying
                                                                                                    WRITE-
DOWNS                      CURRENT                                                                                 DOWNS                      amounts Dec.   amounts Dec.
                                                      DISPOSALS               TRANSFERS             DOWNS                                        31, 2011       31, 2010
JAN. 1, 2011               YEAR                                                                                    DEC. 31, 2011




                  252                          62                  120                         –               –                     195              132            163
                      –                          –                     –                       –               –                         –              3              –
                  252                          62                  120                         –               –                     195              135            163




               3,683                           95                      3                       0               –                  3,775               934            950
               9,105                         423                   471                         0               –                  9,056             1,100          1,039
             12,402                          720                   155                         0               –                12,966              1,687          1,586
                      –                          –                     –                       –               –                         –            791            284
             25,189                       1,237                    630                         –               –                25,797              4,512          3,858


                  383                            –                     –                       –             197                     185           40,447         28,231
                      0                          –                     0                       –               0                         0            497            499
                    57                           –                     0                       –               –                       57           2,180          5,084
                      1                          0                     0                       –               –                         1              0              0
                    30                           1                     –                       –               –                       31           4,696          4,166
                      0                          –                     0                       –               0                         0             76             77
                  471                            1                     0                       –             198                     274           47,897         38,056
             25,913                       1,300                    749                         –             198                26,266             52,543         42,077
12




     (2) I NVENTORI ES

                                                                         Dec. 31, 2011    Dec. 31, 2010
      € million

      Raw materials, consumables and supplies                                     713              600
      Work in progress                                                            966              672
      Finished goods and merchandise                                            2,090            1,911
      Payments on account                                                          29               47
                                                                                3,799            3,230




     (3) RECEIVAB LES AN D OTHER ASSETS

                                                                         Dec. 31, 2011    Dec. 31, 2010
      € million

      Trade receivables                                                         1,392            1,395
       due after more than one year                                                (1)              (1)
      Receivables from affiliated companies                                   10,828           10,172
       thereof trade receivables                                               (2,467)          (2,169)
       due after more than one year                                            (1,647)          (2,070)
      Receivables from other investees and investors                              335              338
       thereof trade receivables                                                 (318)            (315)
       due after more than one year                                                (–)              (–)
      Other assets                                                              1,312            2,004
       due after more than one year                                               (83)            (104)
                                                                              13,867           13,909




     In addition to trade receivables, receivables from affiliated companies are composed primarily
     of receivables relating to profit distributions, including income tax allocations, and short- and
     medium-term loans.
         Other assets primarily include tax and cost reimbursements that are not yet due (€667 million
     and €154 million respectively), receivables from the sale of used cars on behalf of subsidiaries
     (€211 million), payments on account (€166 million) and rights from foreign currency option
     transactions entered into (€24 million).

     (4) SECU RITI ES

                                                                         Dec. 31, 2011    Dec. 31, 2010
      € million

      Other securities                                                             80               79
                                                                                   80               79




     (5) CASH-I N-HAN D AN D BAN K BAL ANCES
     Of the bank balances, €888 million relates to balances at an affiliated company, of which
     €69 million has a term of more than one year.

     (6) SU BSCRI BED CAPITAL
     The subscribed capital of Volkswagen AG is composed of no-par value bearer shares with a
     notional value of €2.56. As well as ordinary shares, there are preferred shares that entitle the
     bearer to a €0.06 higher dividend than ordinary shares, but do not carry voting rights.
         The subscribed capital increased by a total of €0.1 million as a result of the capital increase
     implemented in the fiscal year due to the exercise of conversion rights from the eighth tranche
     of the stock option plan. Following the capital increase, the subscribed capital amounted to
     €1,191 million.
                                                                                                                  13
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

    Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




The subscribed capital is composed of 295,089,817 no-par value ordinary shares and 170,142,778
preferred shares.
   Authorized capital of up to €110 million, expiring on May 2, 2016, was approved for the issue of
new ordinary bearer shares or preferred shares based on the resolution by the Annual General
Meeting on May 3, 2011.
   Following the capital increase implemented during the previous year, there is still authorized
capital of up to €179.4 million, resolved by the Extraordinary General Meeting on December 3,
2009 and expiring on December 2, 2014, to issue up to 70,095,502 new no-par value preferred
bearer shares.
   The Annual General Meeting on April 22, 2010 resolved to create contingent capital expiring on
April 21, 2015 of up to €102.4 million that can be used to issue an aggregate of up to €5 billion in
bonds with warrants and/or convertible bonds.

STOC K OPTION PL AN
The Board of Management, with the consent of the Supervisory Board, exercised the authorization
granted by the Annual General Meeting on April 16, 2002 to implement a stock option plan.
    The stock option plan entitled the optionees – the Board of Management, Group senior
executives and management, as well as employees of Volkswagen AG covered by collective pay
agreements – to purchase options on shares of Volkswagen AG by subscribing for convertible bonds
at a price of €2.56 each. Each bond was convertible into ten ordinary shares.
    The stock options were not accounted for until the exercise date. The conversion price then
received for the new shares was credited to subscribed capital or capital reserves.
    Following the expiration of the first seven tranches, the conversion prices and periods for
the eighth tranche are shown in the following table. The information is presented as data for the
reporting period, although this tranche has now also expired.

                                                                                                8th Tranche
     €

     Base conversion price                                                                          58.18
     Conversion price
     as from July 8, 2008                                                                           64.00
     as from publication of interim report for
     Jan. – Sept. 2008                                                                              66.91
     as from publication of interim report for
     Jan. – Sept. 2009                                                                              69.82
     on completion of the capital increase as of
     April 14, 2010                                                                                 69.15*
     as from publication of interim report for
     Jan. – Sept. 2010                                                                              72.06*
     Beginning of conversion period                                                           July 8, 2008
     End of conversion period                                                                June 30, 2011


*   The conversion prices were adjusted as of April 14, 2010 due to the implementation of the capital increase.




Following the expiration of the conversion period on June 30, 2011, there were no convertible
bonds outstanding as of December 31, 2011. The liabilities from convertible bonds are
recognized under other liabilities. In the reporting period, five convertible bonds with a value of
€12.80 were returned by employees who have since left the Company. 4,425 conversion rights
from the eighth tranche with a nominal value of €11,328.00 were exercised. 44,250 shares with
a notional value of €113,280.00 were thus issued.
14




     Changes in the rights to stock options granted (eighth tranche) are shown in the following table:

                                                 Nominal value of         Number of          Number of potential
                                                convertible bonds   conversion rights           ordinary shares


                                                               €              Rights                     Shares
      Balance at Jan. 1, 2011                         11,340.80                4,430                     44,300
      Exercised in the fiscal year                    11,328.00                4,425                     44,250
      Returned in the fiscal year                          12.80                   5                         50
      Balance at Dec. 31, 2011                              0.00                   0                          0




     (7) CAPITAL RESERVES

                                                                           Dec. 31, 2011           Dec. 31, 2010
      € million

                                                                                   9,413                  9,410




     The capital reserves comprise the share premium in the total amount of €9,087 million from
     the capital increases, the share premium of €219 million from the issue of bonds with warrants,
     and an amount of €107 million appropriated on the basis of the capital reduction implemented
     in a previous fiscal year. The share premium from the capital increase resulting from the
     exercise of conversion rights from the stock option plan increased the capital reserves by €3 million
     in the fiscal year. No amounts were withdrawn from the capital reserves.

     (8) REVEN U E RESERVES

                                                                           Dec. 31, 2011           Dec. 31, 2010
      € million

      Legal reserve                                                                     31                   31
      Other revenue reserves                                                       7,109                  5,401
                                                                                   7,140                  5,432




     In accordance with section 58(2) of the AktG, a total of €1,708 million was appropriated from
     net income for the year to other revenue reserves.

     (9) SPECIAL TAX-ALLOWAB LE RESERVES

                                                                           Dec. 31, 2011           Dec. 31, 2010
      € million

      Tax-free reserves                                                                  –                    0
      Accelerated tax depreciation                                                      53                   58
                                                                                        53                   59




     The accelerated tax depreciation at Volkswagen AG relates to write-downs in accordance with
     section 3(2) of the Zonenrandförderungsgesetz (German Zonal Border Development Act), section 6b
     of the Einkommensteuergesetz (EStG – German Income Tax Act)/regulation 6.6 of the Einkom-
     mensteuerrichtlinien (EStR – German Income Tax Regulations), section 7d of the EStG and
     section 82d of the Einkommensteuer-Durchführungsverordnung (EStDV – German Income Tax
     Implementing Regulation).
         The insignificant amount of tax-free reserves in accordance with section 6b of the EStG was
     released in 2011.
                                                                                                                                         15
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




(10) PROVISIONS

                                                                                                     Dec. 31, 2011       Dec. 31, 2010
 € million

 Provisions for pensions and similar obligations                                                           11,356              10,254
 Provisions for taxes                                                                                       6,020               4,970
 Other provisions                                                                                          11,439               9,615
                                                                                                           28,815              24,838
  thereof: short-term (up to 1 year)                                                                        9,169               7,251
             medium-term                                                                                    9,988               7,249
             long-term (over 5 years)                                                                       9,658              10,338
                                                                                                           28,815              24,838




Provisions for pensions and similar obligations
Provisions for pensions are recognized for commitments in the form of retirement, invalidity
and dependents’ benefits payable under pension plans. The benefits usually depend on the
employees’ length of service and remuneration.
    At Volkswagen AG, pension plans are based on defined benefit plans, whereby a distinction
is made between provision-funded and externally funded pension plans.
Pension provisions are measured in accordance with section 253 of the HGB.
    The projected unit credit method under IAS 19, which is already an IFRS requirement, is used at
Volkswagen AG for the actuarial measurement of defined benefit plans in accordance with the
German Commercial Code; under this, future obligations are measured on the basis of the
ratable benefit entitlements earned as of the balance sheet date.
    In addition to the pension payments and vested entitlements known at the balance sheet
date, future increases in salaries and pensions are taken into consideration, along with other
relevant parameters.
The discount rate is based on the discount rate of 5.14% published by the Deutsche Bundesbank in
accordance with section 253(2) of the HGB for the month of December 2011 for a remaining
maturity of 15 years.

The key assumptions used in calculating the pension provisions in 2011 are:

                                                                                                 Dec. 31, 2011           Dec. 31, 2010


 Discount rate                                                                                         5.14 %                  5.15 %
 Salary trend                                                                                           2.8 %                   2.7 %
 Pension trend                                                                                          1.5 %                   1.5 %
 Return on plan assets                                                                                 3.75 %                  4.25 %
 Fluctuation                                                                                           0.75 %                  0.75 %
 Basis of calculation                                                                        2005 G mortality        2005 G mortality
                                                                                                      tables                  tables
 Age limits                                                                                                RV-                    RV-
                                                                                           Altersgrenzenanpa     Altersgrenzenanpas
                                                                                                 ssungsgesetz            sungsgesetz
                                                                                               (German Act to         (German Act to
                                                                                           Adapt the Standard    Adapt the Standard
                                                                                            Retirement Age to     Retirement Age to
                                                                                                       Reflect                Reflect
                                                                                                 Demographic            Demographic
                                                                                                 Trends and to          Trends and to
                                                                                               Strengthen the         Strengthen the
                                                                                             Funding Basis for      Funding Basis for
                                                                                                 the Statutory          the Statutory
                                                                                            Pension Insurance      Pension Insurance
                                                                                                 System) 2007           System) 2007
16




     Unfunded pension obligations are recognized in the balance sheet as follows:

      € million                                                        Dec. 31, 2011       Dec. 31, 2010

      Settlement amount of unfunded obligations                              11,356              11,226
      Amounts not yet added from the transition to the BilMoG in
      accordance with Article 67(1) of the Einführungsgesetz zum
      Handelsgesetzbuch (EGHGB – Introductory Act to the German
      Commercial Code).                                                            –                 973
      Pension provison – unfunded                                            11,356              10,254




     Externally funded pension benefits
     Since 1996, the occupational pension arrangements of Volkswagen AG have been based on a
     specially developed expense-related pension model. With effect from January 1, 2001, this model
     was developed into a pension fund, with the annual remuneration-linked contributions being
     invested in funds by Volkswagen Pension Trust e.V. as the trustee. By investing in funds, this
     model offers an opportunity for increasing benefit entitlements, while at the same time fully
     safeguarding them. Since the fund investments held by the trust meet the criteria of section
     246(2) of the HGB for classification as plan assets, they are offset against the pension liabilities.
     The plan assets are measured at fair value in accordance with section 253(1) of the HGB. As the
     corresponding post-employment obligations exceed the minimum benefits awarded and their
     amount is determined solely by the fair value of the assets, they are also carried at the fair value
     of the plan assets.

     Plan assets (pension fund) in 2011:

      € million                                                         Dec. 31, 2011       Dec. 31, 2010


      Fair value of the pension fund                                           1,835               1,725
      Cost of the pension fund                                                 1,781               1,547




     The fair value of the assets offset was determined using market prices in an active market.
                                                                                                                                     17
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Pension obligations in the pension fund model are recognized in the balance sheet as follows:

 € million                                                                                 Dec. 31, 2011            Dec. 31, 2010

 Settlement amount of the obligations in the pension fund model =
 fair value of the pension fund
                                                                                                  1,835                     1,725
 Amounts not yet added from the transition to the BilMoG in
 accordance with article 67(1) of the EGHGB                                                            –                      122
 Pension provisions – funded                                                                      1,835                     1,603
 Offset against the fair value of the pension fund
 (in accordance with section 246(2) of the HGB)                                                   1,835                     1,725
 Excess of plan assets over post-employment benefit liability                                          –                      122




The following amounts were offset in the following income statement line items in 2011:

                                                                                             Offset income and expenses of the
                                                                                              obligations funded by the pension
                                                                                                       fund, incl. the plan assets
 € million

 Financial result
    Income
       -     Distributions from pension fund                                                                 53
       -     Adjustments to obligations resulting from changes in value                                     124
    Expenses
       -     Adjustments to obligations resulting from pension fund distributions                            53
       -     Changes in value of the pension fund                                                           124




Personnel expenses are included as pension costs in the personnel expenses of the functions;
interest expenses from obligations and interest income on changes in the fair value of pension fund
assets are offset in finance costs.
    As pension provisions increased due to the initial measurement under the BilMoG, it is
possible in accordance with section 67(1) of the EGHGB to accumulate at least one-fifteenth of
the transitional amount every fiscal year until December 31, 2024 at the latest. The amounts not
recognized in the previous year from the transition to the BilMoG had been transferred in full to
the provision and recognized in the extraordinary result by the balance sheet date.

Other provisions
Among other items, other provisions include provisions for warranties (€3.2 billion), personnel
expenses (€2.3 billion mainly for long-service jubilees, partial retirement arrangements and other
workforce costs) and other selling expenses (€2.2 billion).
    Volkswagen AG has been issuing Time Assets as a retirement benefit concept for working life
planning since January 1, 1998. An approved fund was launched for this purpose. Investments are
also made in a money market fund.
    The plan assets are measured at fair value in accordance with section 253(1) of the HGB. The
fair value of offset assets in the Time Assets fund was determined by reference to market prices
(stock market prices) in an active market.
18




     Plan assets (Time Assets fund) in 2011:

      € million                                                                          Dec. 31, 2011                Dec. 31, 2010


      Fair value of the Time Assets fund                                                        1,062                         1,020
      Cost of the Time Assets fund                                                              1,166                         1,069
      Offset against fair value
      (in accordance with section 246(2) of the HGB)                                            1,062                         1,020
      Settlement amount of offset liability                                                     1,063                         1,020




     The following amounts were offset in the following income statement line items in 2011:

                                                                                           Offset income and expenses of the
                                                                                               obligations funded by the Time
                                                                                             Assets fund, incl. the plan assets
      € million

      Financial result
         Income
           -      Distributions from pension fund                                                             38
           -      Adjustments to obligations resulting from changes in value                                  54
         Expenses
           -      Adjustments to obligations resulting from pension fund distributions                        38
           -      Changes in value of the pension fund                                                        54




     Unwinding of the discount/discounting
     An additional discount of €211 million should have been recognized on the provisions as of
     December 31, 2009 in the course of the transition to the new HGB. Volkswagen AG exercised the
     option to continue to recognize the higher level of provisions. As of December 31, 2011, the
     unrecognized discount on this legacy balance still amounted to €61 million.
         In fiscal year 2011, a total of €87 million of discounts on provisions was included in the
     annual financial statements (not including pension provisions).

     (11) LIABI LITI ES

                                                                               Total               Total
                                                Due within 1 year        Dec. 31, 2011       Dec. 31, 2010         Due within 1 year
      € million

      Type of liability
      Liabilities to banks                                    33                 433                  443                        43
      Payments received on account of
      orders                                                  56                   56                    68                      68
      Trade payables                                       2,171                2,171               1,854                    1,854
      Liabilities to affiliated companies                14,574                23,591             21,898                    14,870
      Liabilities to other investees and
      investors                                              138                 138                  151                      151
      Other liabilities                                      583                 941                  837                      516
       thereof: taxes                                        (89)                 (89)                   (88)                   (88)
                  social security                            (10)                 (10)                    (7)                    (7)
                                                         17,554                27,330             25,251                    17,502
                                                                                                                           19
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




€1,579 million (previous year: €1,422 million) of the liabilities to affiliated companies and €28
million (previous year: €38 million) of the liabilities to other investees and investors relate to
trade payables. €20,823 million (previous year: €19,778 million) of the liabilities is interest-
bearing. €493 million of liabilities (previous year: €1,482 million) to affiliated companies is due
after more than five years. €21 million (previous year: €42 million) of other liabilities relates to
liabilities due after more than five years.
    Standard retention of title applies to the liabilities from deliveries of goods contained in the
amounts shown above. €511 million of the other liabilities is secured by real estate liens.
    Liabilities due after more than five years total €514 million.

Contingencies and commitments
Contingent liabilities

 € million                                                                                 Dec. 31, 2011   Dec. 31, 2010


 Contingent liabilities from guarantees                                                              54              34
 Contingent liabilities from warranties                                                         21,736          23,841
    of which relating to affiliated companies                                                    (5,521)         (6,164)
 Granting of security for third-party liabilities                                                 2,237           2,197
 Total                                                                                          24,027          26,072


Contingent liabilities from warranties relate primarily to guarantees given to creditors of subsidiaries
for bonds issued by these subsidiaries and related swap transactions entered into.

Risk assessment of the settlement of contingent liabilities
Volkswagen AG provides guarantees for the capital market issues of the finance companies, for
development loans from supranational financial institutions and, in specific cases, for loans to
newly formed subsidiaries. Volkswagen AG manages its subsidiaries in such a way that they can
discharge their financial obligations at any time. In addition to the preparation of a monthly liquidity
report for Volkswagen AG, regular financial reviews are held during which the variances
between the actual and projected liquidity are analyzed and the necessary corrective measures
are implemented. Based on this information, the Company sees no risk of a claim being brought
under the guarantees provided.

Transactions not included in the balance sheet (section 285 no. 3 of the HGB)
Volkswagen AG finances the majority of its trade receivables from foreign affiliated companies
and certain selected non-Group importers on the basis of nonrecourse factoring via its subsidiary
Volkswagen Group Services S. A., Brussels, or Volkswagen Finance Belgium S. A., Brussels.
Selected receivables from partners of our domestic sales organization are financed on the basis
of nonrecourse factoring via Volkswagen Bank GmbH, Braunschweig. The amount concerned
was €36 billion in the fiscal year. The Company received liquid funds in this amount. These
transactions do not lead to any specific new risks.
    Volkswagen AG sells a small number of vehicles, mainly to car rental companies, subject to the
obligation to repurchase them after a fixed period of time. This was the case for approximately
20,000 vehicles worth approximately €0.3 billion in total as of December 31, 2011. There is a
risk in relation to the marketing of the repurchased vehicles in the amount of the then current
market value.
    The other financial obligations item contains long-term rental and leasing agreements for
storage, logistics and office space, as well as test tracks, which are common for the industry.
These transactions do not lead to any specific new risks.
20




     Other financial commitments
     Loan commitments to subsidiaries result in financial obligations of approximately €7.6 billion
     until no longer than 2016.
         The financial obligations resulting from rental and leasing agreements amount to a total of
     €776 million (previous year: €648 million), of which €215 million is due in 2012. Agreements
     with a term of up to five years – with expenditures in 2012 amounting to €164 million (including €102
     million to affiliated companies) – are expected to account for a total of €237 million (including
     €139 million to affiliated companies). For agreements with terms of up to 30 years, the financial
     obligations over the entire remaining contractual term amount to approximately €539 million,
     including €68 million to affiliated companies (€51 million in 2012, including €4 million to affiliated
     companies). Financial obligations from management agreements that may be terminated annually
     amount to €77 million per year, including €20 million to affiliated companies.
         Around 51 hectares of land (carrying amount €7 million) are encumbered by heritable
     building rights.
     The new co-investor in LeasePlan was granted an option to put back the shares to Volkswagen
     AG at the original selling price until January 12, 2012. On December 20, 2011, the option was
     extended until January 2, 2014. The nominal value of this option amounts to €1,460 million.
     The value of this option amounts to €–263 million as of December 31, 2011.
         In the course of the formation of LLC VW Rus, a co-investor was granted a put option that
     entitles it to return its interest in the company (now: LLC VW Group Rus) at cost plus an appropriate
     return after six years. The option had a fair value of €0 million as of December 31, 2011.
     Sales guarantees totaling €0.3 billion up to 2013 were entered into in the course of the sale of
     the gedas Group. This sales revenue is still outstanding and is expected to be recorded in 2012.
       Porsche and Volkswagen’s common goal was to merge Porsche Automobil Holding SE with
     Volkswagen AG in the course of 2011 provided that the legal requirements for the merger were
     met. On September 8, 2011, following talks with Porsche Automobil Holding SE, the Board of
     Management of Volkswagen AG came to the conclusion that a resolution on the merger with
     Porsche Automobil Holding SE could not be implemented by December 31, 2011 as provided for
     in the Comprehensive Agreement.
         In the event that the merger of Porsche Automobil Holding SE with Volkswagen AG that is
     planned under the Comprehensive Agreement does not take place, Volkswagen AG and Porsche
     Automobil Holding SE have agreed mutually exercisable call and put options in respect of the
     remaining 50.1% interest in Porsche Zwischenholding GmbH. The put option can be exercised
     between November 15, 2012 and January 14, 2013 inclusive, and again between December 1,
     2014 and January 31, 2015 inclusive, while the call option can be exercised between March 1,
     2013 and April 30, 2013 inclusive, and again between August 1, 2014 and September 30, 2014
     inclusive. Both the put option and the call option are subject to the condition that the General
     Meeting resolutions required for the merger of Porsche Automobil Holding SE with Volkswagen
     AG are not adopted by the deadline of the end of 2011 provided for in the Comprehensive Agreement.
     This condition occurred as of the reporting date. In addition, the Board of Management of
     Volkswagen AG will analyze whether there are additional ways of achieving the goal of creating
     an integrated automotive group with Porsche.
         The nominal value of these options amounts to €3,883 million in each case.
         The fair value calculated using a financial valuation model amounts to €–87 million (previous
     year: €–233 million) and €8,409 million (previous year: €2,001 million). The change in the fair
     value of the options is attributable to updated assumptions underlying their valuation.
         The options relate to the same asset (the shares of Porsche Zwischenholding GmbH).
     Together, they govern the acquisition of the 50.1% interest in Porsche Zwischenholding GmbH
     insofar as they determine the binding selling price for both parties to the contract, irrespective
     of any changes in the value of the shares of Dr. Ing. h.c. F. Porsche AG, in the event that
     Volkswagen AG does not merge with Porsche Automobil Holding SE. They must therefore be
     accounted for together. Consequently, the changes in the value of the options must be accounted
     for collectively in the course of subsequent measurement. The fair value amounted to a net total
     of €8,322 million (previous year: €1,768 million). In accordance with the imparity principle,
                                                                                                       21
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




this positive change in value cannot be recognized. The fair values of €–65 million and €48
million recognized at the time of initial recognition will therefore continue to apply unchanged.
The fair value of the options is reported under receivables from and liabilities to affiliated
companies.
    In accordance with Art. 5(10) of the statutes of the Einlagensicherungsfonds (Deposit Protection
Fund), Volkswagen AG has given an undertaking to indemnify Bundesverband deutscher
Banken e.V., Cologne, against any losses incurred that are attributable to measures taken by it
in favor of a majority-owned bank.
    Volkswagen AG has liabilities from its investments in commercial partnerships.
    The purchase commitment for capital expenditure projects is within the normal levels.
22




     Derivatives – not included in hedges (section 254 of the HGB)

      € MILLION                        N OT IO N A L A MO U N T                    F A I R VA L U E

                                           Dec. 31, 2011          Dec. 31, 2010        Dec. 31, 2011                Dec. 31, 2010
      Type and volume

      Interest rate swaps                               –                      –
       negative fair values                                                                             –                      –
      Cross-currency swaps                              –                      –
       negative fair values                                                                             –                      –
      Currency futures contracts                   4,372                 2,069                        168                     20
       thereof: currency purchases                 3,919                 1,899
       thereof: positive fair values                                                                  181                     49
                negative fair values                                                                   –4                    –22
       thereof: currency sales                       452                   170
       thereof: positive fair values                                                                    0                      0
                negative fair values                                                                   –8                     –7
      Currency option contracts                      802                 2,007
       positive fair values                                                                            27                     48
      Commodity futures contracts                  3,626                 1,793
       thereof: positive fair values                                                                  145                    479
                negative fair values                                                              –267                        –1




     MEASU REMENT METHODS
     The fair values of the derivatives generally correspond to the market or quoted market price. If
     no active market exists, fair value is determined using valuation techniques, such as by discounting
     the future cash flows at the market interest rate, or by using recognized option pricing models,
     and verified by confirmations from the banks that handle the transactions. The calculations
     were based on the following term structures:

                                 EUR    USD             GBP              JPY             RUB                 CHF               SEK    CZK    MXN
      in %

      Interest rate
      for six
      months                  1,617    0,809          1,376            0,336           7,330                0,094           2,730    1,450   4,560
      Interest rate
      for one year            1,947    1,128          1,871            0,554           7,350                0,325           2,900    1,730   4,630
      Interest rate
      for five years          1,738    1,256          1,562            0,473           7,570                0,568           1,955    1,640   5,490
      Interest rate
      for ten years           2,393    2,040          2,294            0,982           7,770                1,218           2,290    2,150   6,510
                                                                                                                                       23
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Balance sheet items and carrying amounts
Derivatives not included in hedges are contained in the following balance sheet items at the
amounts shown:

 € million                                                                                           CAR RYI NG AMOU NT
                                                                          Balance sheet item         Dec. 31, 2011     Dec. 31, 2010
 Type

 Option premiums                                      Other assets                                              24               48
 Expected losses from open currency
 forwards                                             Other provisions                                          13               29
 Expected losses from open
 commodity future contracts                           Other provisions                                         267                1




Hedges (section 254 of the HGB)
Explanations of the risks hedged, the hedging strategy and the highly probable forecast
transactions are included in the management report.
    Forward exchange transactions, forward exchange transactions from structured currency
options and cross-currency swaps were used as hedging instruments.

The following currency risks were hedged and included in hedge accounting:

 € million                                                                     DEC. 31, 2011
                                                                                           Amount      Positive fair   Negative fair
                                                  Hedging instrument                        hedged            value           value
 Risks hedged

 Currency risk from assets                      Cross-currency swap                           123                 1              –7
                                                  Currency forwards                             –                 –               –
 Currency risk from liabilities                   Currency forwards                            14                 0               –
 Currency risk from executor
 contracts                                        Currency forwards                           892                40               0
 Currency risk from forecast
 transactions                                     Currency forwards                        56,904              271          –1,922




The forecast transactions primarily consist of sales and commodity purchases in foreign currency
that are highly probable in the coming five years. An insignificant amount of individual planned
purchases also relates to periods beyond this.
    Hedge effectiveness is determined using the discounted cash flow method or the dollar
offset method.
    Hedge accounting uses the net hedge presentation method.



Currency and commodity price hedging for subsidiaries
The amounts shown for forecast transactions and planned purchases of materials also
include amounts attributable to consolidated subsidiaries. These are therefore included in
the notional amounts of currency and commodity price hedges entered into.
     They participate in the gain or loss when the transactions fall due.
     The following amounts of derivatives are constructively attributable to consolidated
subsidiaries:
24




     Derivatives – not included in hedges (section 254 of the HGB)

      € million                              N OT IO N A L A MO U N T                    F A I R VA L U E

      Type and volume                            Dec. 31, 2011           Dec. 31, 2010        Dec. 31, 2011          Dec. 31, 2010


      Currency futures contracts                         1,638                    850                       72                 11
        of which: currency purchases                     1,580                    832
          of which: positive fair values                                                                    76                 20
                      negative fair values                                                                  –2                 –9
        of which: currency sales                            58                      19
          of which: positive fair values                                                                     –                  0
                      negative fair values                                                                  –2                  –
      Currency option contracts                            464                  1,016
        positive fair values                                                                                18                 24
      Commodity futures contracts                        1,545                    828
        of which: positive fair values                                                                      58                208
                     negative fair values                                                               –118                   –1




     Balance sheet items and carrying amounts
     Derivatives not included in hedges are contained in the following balance sheet items at the
     amounts shown:
      € million                                                                                CAR RYI NG AMOU NT
      Type                                                              Balance sheet item      Dec. 31, 2011        Dec. 31, 2010


      Option premiums                                                          Other assets                  14                24
      Expected losses from open currency
      forwards                                                             Other provisions                      4              9
      Expected losses from open
      commodity future contracts                                           Other provisions                 118                 1




     The following currency risks were hedged and included in hedge accounting:

      € million                                                            DEC. 31, 2011
                                                                                  Amount          Positive fair      Negative fair
                                                Hedging instrument                 hedged                value              value
      Risks hedged

      Currency risk from
      forecast transactions                     Currency forwards                  28,543                   129             –923
                                                                                                                     25
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Income Statement Disclosures

(12) SALES

                                                             2011                            %     2010        %
 € million

 by region
 Germany                                                   24,936                          37.1   21,515     37.6
 Europe (excl. Germany)                                    28,822                          42.9   24,158     42.2
 North America                                              3,769                           5.6    3,854      6.7
 South America                                                 954                          1.4     799       1.4
 Africa                                                     1,305                           1.9    1,223      2.1
 Asia-Pacific                                               7,392                          11.0    5,695      9.9
 Total                                                     67,178                     100.0       57,243    100.0
 by segment
 Vehicle sales                                             47,036                          70.0   38,688     67.6
 Genuine parts                                              4,889                           7.3    4,504      7.9
 Other sales                                               15,252                          22.7   14,052     24.5
 Total                                                     67,178                     100.0       57,243    100.0




Other sales relate primarily to intragroup deliveries to our subsidiaries and to sales of
components and parts to third parties.

(13) OTHER OPERATI NG I NCOME

                                                                                                   2011     2010
 € million

 Other operating income                                                                            4,139    3,478
 thereof income from the reversal of special tax-allowable reserves                                   (6)      (6)




Other operating income relates primarily to foreign currency translation of our deliveries of
goods and services (€1.4 billion), cost allocations (€1.3 billion) and income from the reversal of
provisions (€1.0 billion).

(14) OTHER OPERATI NG EXPENSES

                                                                                                   2011     2010
 € million

 Other operating expenses                                                                          3,057    2,435



Other operating expenses primarily relate to costs of foreign currency translation and commodity
price hedging of our deliveries of goods and services (€1.4 billion), the measurement of our
foreign currency hedging and commodity price hedging transactions not included in hedges in
accordance with the strict imparity principle – under which expected or unrealized losses must
be recognized, but the recognition of unrealized gains is prohibited – (€0.4 billion) after
elimination against the provisions recognized in the previous year, and expenses for
subsidiaries that are allocated to these companies (€1.0 billion).
26




     (15) FI NANCIAL RESU LT

                                                                              2011            2010
      € million

      Income and expenses from investments                                   7,347           6,040
      Interest income and expense                                             –459            –566
      Other financial result                                                  –648            –682
                                                                             6,240           4,791




     INCOME AND EXPENSES FROM INVESTMENTS

                                                                              2011            2010
      € million

      Income from investments                                                1,574           1,441
       thereof from affiliated companies                                      (703)           (998)
      Income from profit and loss transfer agreements                        6,144           4,929
      Other investment income                                                 216              173
      Other investment expenses                                               586              453
      Cost of loss absorption                                                    2              52

                                                                             7,347           6,040



     Income from investments primarily comprises income from our Chinese joint ventures, Scania AB,
     VW Logistics GmbH & Co. OHG, Porsche Zwischenholding GmbH and MAN SE. Income from
     profit and loss transfer agreements (primarily from AUDI AG, Financial Services AG, VW Sachsen
     GmbH, AutoVision GmbH and VW Kraftwerk GmbH) also includes allocations of income-related
     taxes.
         Other investment income relates primarily to income from the reversal of a write-down of
     the carrying amount of the investments in VW Retail GmbH, VW Group Sales India P. L. and LLC
     Volkswagen Group Rus, as well as subsequent sale proceeds and income from the reversal of
     provisions.
         Other investment expenses mainly comprise expenses from the transfer of investment income to
     an affiliated company, a waiver of debt repayment in favor of an affiliated company, as well as
     losses from the remeasurement of the option relating to LeasePlan.

     Interest income and expense

                                                                              2011            2010
      € million

      Income from other investments and long-term loans                        115              57
       thereof from affiliated companies                                       (29)            (23)
      Other interest and similar income                                        301             205
       thereof from affiliated companies                                      (154)           (117)
      Interest and similar expenses                                            876             828
       thereof to affiliated companies                                        (684)           (645)
                                                                              –459            –566




     Interest income and expense includes expenses from the factoring business (financing of non-
     interest-bearing trade receivables), primarily with our Group company Volkswagen Group
     Services S. A.
                                                                                                             27
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Other financial result

                                                                                            2011     2010
 € million



 Loss on sales of securities                                                                 –12        –
 Interest component of pension expenses                                                     –579     –710
 Unwinding of the discount on provisions                                                     –73        –
 Discounting of liabilities                                                                   14       10
 Unwinding of the discount on/discounting of liabilities                                       2       18
                                                                                            –648     –682




(16) Extraordinary result

                                                                                            2011     2010
 € million

 Extraordinary income                                                                          –      134
 Extraordinary expenses                                                                     1,095    1,922
                                                                                           –1,095   –1,789




Extraordinary income and expenses include items recognized in this line item due to the initial
application of the rules incorporated into the HGB following the introduction of the BilMoG
(article 67 of the EGHGB).

                                                                                            2011     2010
 € million

 Extraordinary income
  Reversal of provision for currency forwards                                                  –      116
  Foreign currency measurement                                                                 –       17
                                                                                               –      134



                                                                                            2011     2010
 € million

 Extraordinary expenses
  Additions to pension provisions                                                           1,095    1,907
  Fair value remeasurement of the pension fund                                                 –     –115
  Additions to other provisions for personnel expenses                                         –       14
  Fair value remeasurement of Time Assets                                                      –       82
  Unwinding of the discount on/discounting of provisions for taxes                             –       34
                                                                                            1,095    1,922




Other taxes
The other taxes allocated to the consuming functions amounted to €35 million (previous year:
€38 million). They relate mainly to land and vehicle taxes.

Deferred taxes
In accordance with the balance sheet liability concept in the version introduced by the BilMoG,
deferred taxes are calculated for temporary differences between the carrying amounts required
by the HGB and the tax base of all assets and liabilities. As Volkswagen AG is the consolidated tax
group parent and thus also the taxpayer for affiliated companies with which there are profit and
loss transfer agreements, the differences at those companies are also included when calculating
deferred taxes. Volkswagen AG is also a partner in various partnerships. Deferred taxes in
respect of the difference between the HGB carrying amounts of assets and liabilities and their
28




     tax base are also reported at Volkswagen AG where these relate to corporation tax. The deferred
     taxes in respect of these differences are calculated on the basis of an average income tax rate of
     29.5% and 15.8% respectively. Offsetting deferred tax assets and liabilities resulted in an
     excess of tax assets, which are not recognized as allowed under the option contained in section
     274 of the HGB.

      2011
      € MILLION                      D E F E R R E D TA X A S S E T S           D E F E R R E D TA X L I A B I L I T I E S

                                             Difference                   Tax            Difference                           Tax
      Item

      Assets
       Fixed assets                                1,756                 516                    –438                         –129
       Current assets                                877                 259                    –383                         –113
       Other assets                                      8                 3                          –                         –


      Liabilities
       Special reserves                                  –                 –                        –3                         –1
       Provisions                                  9,559                2,813                         –                         –
      Liabilities                                    550                 162                          –                         –
       Deferred income items                           18                  5                          –                         –


      Total                                                             3,758                                                –243
       Offset                                                           –243                                                  243
      Net deferred tax assets                                           3,515




      2010
      € MILLION                      D E F E R R E D TA X A S S E T S           D E F E R R E D TA X L I A B I L I T I E S

                                             Difference                   Tax            Difference                           Tax
      Item

      Assets
       Fixed assets                                1,718                 505                    –390                         –115
       Current assets                                933                 275                        –0                          0
       Other assets                                      8                 2                      –51                         –15


      Liabilities
       Special reserves                                  –                 –                        –0                          0
       Provisions                                  6,336                1,878                         –                         –
      Liabilities                                    147                  43                          –                         –
       Deferred income items                             –                 –                      –34                         –10


      Total                                                             2,703                                                –140
       Offset                                                           –140                                                  140
      Net deferred tax assets                                           2,563
                                                                                                                          29
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




NOTICES AN D DISCLOSU RE OF C HANGES REGARDI NG THE OWN ERSHI P OF VOTI NG RIGHTS I N
VOLKSWAGEN             AG       IN      ACCORDANCE              WITH         SECTION 21    AN D   SECTION 26   OF   THE
WERTPAPI ERHAN DELSGESETZ (WPHG – GERM AN SECU RITI ES TRADI NG ACT )


PORSC H E
1) Porsche Automobil Holding SE, Stuttgart, Germany has notified us in accordance with
section 21(1) of the WpHG that its share of the voting rights in Volkswagen Aktiengesellschaft,
Wolfsburg, Germany, exceeded the threshold of 50% on January 5, 2009 and amounted to
50.76% (149,696,680 voting rights) at this date.

2) The following persons notified us in accordance with section 21(1) of the WpHG that their
share of the voting rights in Volkswagen Aktiengesellschaft in each case exceeded the threshold
of 50% on January 5, 2009 and in each case amounted to 50.76% (149,696,680 voting rights) at
this date. All of the above-mentioned 149,696,680 voting rights are attributable to each of the
persons making the notification in accordance with section 22(1) sentence 1 no. 1 of the WpHG.
The voting rights attributed to the persons making the notifications are held via subsidiaries
within the meaning of section 22(3) of the WpHG, whose attributed share of the voting rights
amounts to 3% or more and whose names are given in brackets:

Mag. Josef Ahorner, Austria
(Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Mag. Louise Kiesling, Austria
(Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Prof. Ferdinand Alexander Porsche, Austria
(Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Dr. Oliver Porsche, Austria
(Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
30




     Kai Alexander Porsche, Austria
     (Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
     Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
     Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
     Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
     Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
     Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

     Mark Philipp Porsche, Austria
     (Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
     Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
     Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
     Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
     Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
     Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

     Gerhard Anton Porsche, Austria
     (Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH,
     Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH,
     Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand
     Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/
     Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
     Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

     Ing. Hans-Peter Porsche, Austria
     (Familie Porsche Privatstiftung, Salzburg/Austria; Familie Porsche Holding GmbH, Salzburg/
     Austria; Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH,
     Grünwald/Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche
     Automobil Holding SE, Stuttgart/Germany),

     Peter Daniel Porsche, Austria
     (Familie Porsche Privatstiftung, Salzburg/Austria; Familie Porsche Holding GmbH, Salzburg/
     Austria; Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH,
     Grünwald/Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche
     Automobil Holding SE, Stuttgart/Germany),

     Dr. Wolfgang Porsche, Germany
     (Familie Porsche Privatstiftung, Salzburg/Austria; Familie Porsche Holding GmbH, Salzburg/
     Austria; Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH,
     Grünwald/Germany; Wolfgang Porsche GmbH, Grünwald/Germany; Familie Porsche
     Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

     Ferdinand Porsche Privatstiftung, Salzburg/Austria
     (Ferdinand Porsche Holding GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/
     Austria; Louise Daxer-Piëch GmbH, Grünwald/Germany; Prof. Ferdinand Alexander Porsche
     GmbH, Salzburg/Austria; Ferdinand Alexander Porsche GmbH, Grünwald/Germany; Gerhard
     Anton Porsche GmbH, Salzburg/Austria; Gerhard Porsche GmbH, Grünwald/Germany;
     Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany; Porsche Automobil
     Holding SE, Stuttgart/Germany),
                                                                                           31
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Familie Porsche Privatstiftung, Salzburg/Austria
(Familie Porsche Holding GmbH, Salzburg/Austria; Ing. Hans-Peter Porsche GmbH, Salzburg/
Austria; Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Porsche Beteiligung GmbH,
Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Ferdinand Porsche Holding GmbH, Salzburg/Austria
(Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH, Grünwald/Germany;
Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria; Ferdinand Alexander Porsche
GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/Austria; Gerhard Porsche
GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/
Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Familie Porsche Holding GmbH, Salzburg/Austria
(Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH, Grünwald/
Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding
SE, Stuttgart/Germany),

Louise Daxer-Piëch GmbH, Salzburg/Austria
(Louise Daxer-Piëch GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/
Germany; Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany),

Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria
(Ferdinand Alexander Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch
Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Gerhard Anton Porsche GmbH, Salzburg/Austria
(Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piëch Beteiligung
GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Louise Daxer-Piëch GmbH, Grünwald/Germany
(Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany; Porsche Automobil
Holding SE, Stuttgart/Germany),

Ferdinand Alexander Porsche GmbH, Grünwald/Germany
(Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany; Porsche Automobil
Holding SE, Stuttgart/Germany),

Gerhard Porsche GmbH, Grünwald/Germany
(Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany; Porsche Automobil
Holding SE, Stuttgart/Germany),

Ing. Hans-Peter Porsche GmbH, Salzburg/Austria
(Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Porsche Beteiligung GmbH,
Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),

Hans-Peter Porsche GmbH, Grünwald/Germany
(Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE,
Stuttgart/Germany),

Wolfgang Porsche GmbH, Grünwald/Germany
(Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE,
Stuttgart/Germany),
32




     Familien Porsche-Daxer-Piëch Beteiligung GmbH, Grünwald/Germany
     (Porsche Automobil Holding SE, Stuttgart/Germany),

     Familie Porsche Beteiligung GmbH, Grünwald/Germany
     (Porsche Automobil Holding SE, Stuttgart/Germany),

     Porsche GmbH, Stuttgart/Germany
     (Porsche Automobil Holding SE, Stuttgart/Germany),

     Dr. Hans Michel Piëch, Austria
     (Porsche Automobil Holding SE, Stuttgart/Germany; Hans Michel Piëch GmbH, Grünwald/
     Germany; Dr. Hans Michel Piëch GmbH, Salzburg/Austria),

     Dr. Hans Michel Piëch GmbH, Salzburg/Austria
     (Porsche Automobil Holding SE, Stuttgart/Germany; Hans Michel Piëch GmbH, Grünwald/
     Germany),

     Hans Michel Piëch GmbH, Grünwald/Germany
     (Porsche Automobil Holding SE, Stuttgart/Germany),

     Dipl.-Ing. Dr. h.c. Ferdinand Piëch, Austria
     (Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piëch GmbH, Grünwald/
     Germany; Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria; Ferdinand Karl Alpha
     Privatstiftung, Vienna/Austria),

     Ferdinand Karl Alpha Privatstiftung, Vienna/Austria
     (Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piëch GmbH, Grünwald/
     Germany; Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria),

     Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria
     (Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piëch GmbH, Grünwald/ Germany),

     Ferdinand Piëch GmbH, Grünwald/Germany
     (Porsche Automobil Holding SE, Stuttgart/Germany).

     3) Porsche Holding Gesellschaft m.b.H., Salzburg/Austria, and Porsche GmbH, Salzburg/
     Austria, notified us in accordance with section 21(1) of the WpHG that their share of the voting
     rights in Volkswagen Aktiengesellschaft in each case exceeded the threshold of 50% on
     January 5, 2009 and in each case amounted to 53.13% (156,702,015 voting rights) at this date.

     All the above-mentioned 156,702,015 voting rights are attributable to Porsche Holding Gesellschaft
     m.b.H. in accordance with section 22(1) sentence 1 no. 1 of the WpHG. The companies via which the
     voting rights are actually held and whose attributed share of the voting rights amounts to 3% or more
     are:
     – Porsche GmbH, Salzburg/Austria;
     – Porsche GmbH, Stuttgart/Germany;
     – Porsche Automobil Holding SE, Stuttgart/Germany.

     Of the above-mentioned 156,702,015 voting rights, 50.76% of the voting rights (149,696,753
     voting rights) are attributable to Porsche GmbH, Salzburg/Austria, in accordance with
     section 22(1) sentence 1 no. 1 of the WpHG. The companies via which the voting rights are
     actually held and whose attributed share of the voting rights amounts to 3% or more are:
     – Porsche GmbH, Stuttgart/Germany;
     – Porsche Automobil Holding SE, Stuttgart/Germany.
                                                                                                               33
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet    Income Statement   Notes   Responsibility Statement   Auditors’ Report




4) Porsche Wolfgang 1. Beteiligungs GmbH & Co. KG, Stuttgart, Germany, has notified us in
accordance with section 21(1) of the WpHG that its (indirect) share of the voting rights in
Volkswagen Aktiengesellschaft, Wolfsburg, Germany, exceeded the thresholds of 3%, 5%, 10%,
15%, 20%, 25%, 30% and 50% of the voting rights on September 29, 2010 and amounted to
50.74% of the voting rights (149,696,680 voting rights) at this date.

Of this figure, 50.74% of the voting rights (149,696,680 voting rights) are attributable to
Porsche Wolfgang 1. Beteiligungs GmbH & Co. KG in accordance with section 22(1) sentence 1
no. 1 of the WpHG.

The voting rights attributed to Porsche Wolfgang 1. Beteiligungs GmbH & Co. KG are held via the
following enterprises controlled by it, whose share of the voting rights in Volkswagen
Aktiengesellschaft amounts to 3% or more in each case: Wolfgang Porsche GmbH, Grünwald,
Familie Porsche Beteiligung GmbH, Grünwald, Porsche Automobil Holding SE, Stuttgart.

QATAR
We have received the following notification:

(1)    Pursuant to section 21 (1) WpHG we hereby notify for and on behalf of the State of Qatar,
       acting by and through the Qatar Investment Authority, Doha, Qatar, that its indirect voting
       rights in Volkswagen Aktiengesellschaft

       (a) exceeded the threshold of 10 % on December 17, 2009 and amounted to 13.71 % of the
       voting rights of Volkswagen Aktiengesellschaft (40,440,274 voting rights) as per this date

                  (i) 6.93 % (20,429,274 voting rights) of which have been obtained by the exercise by
                  Qatar Holding LLC of financial instruments within the meaning of section 25 (1)
                  sentence 1 WpHG on that date granting the right to acquire shares in Volkswagen
                  Aktiengesellschaft, and

                  (ii) all of which are attributed to the State of Qatar pursuant to section 22 (1) sentence
                  1 no. 1 WpHG.

       (b) exceeded the threshold of 15 % on December 18, 2009 and amounted to 17.00 % of
       the voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this
       date

                  (i) 3.29 % (9,708,738 voting rights) of which have been obtained by the exercise by
                  Qatar Holding LLC of financial instruments within the meaning of section 25 (1)
                  sentence 1 WpHG on that date granting the right to acquire shares in Volkswagen
                  Aktiengesellschaft, and

                  (ii) all of which are attributed to the State of Qatar pursuant to section 22 (1) sentence
                  1 no. 1 WpHG.

       Voting rights that are attributed to the State of Qatar pursuant to lit. (a) and (b) above are
       held via the following entities which are controlled by it and whose attributed proportion
       of voting rights in Volkswagen Aktiengesellschaft amount to 3 % each or more:
             (aa) Qatar Investment Authority, Doha, Qatar;
             (bb) Qatar Holding LLC, Doha, Qatar;
             (cc) Qatar Holding Luxembourg II S.à.r.l., Luxembourg, Luxembourg;
             (dd) Qatar Holding Netherlands B.V., Amsterdam, The Netherlands.
34




     (2)    Pursuant to section 21 (1) WpHG we hereby notify for and on behalf of the Qatar Investment
            Authority, Doha, Qatar, that its indirect voting rights in Volkswagen Aktiengesellschaft

           (a) exceeded the threshold of 10 % on December 17, 2009 and amounted to 13.71 % of the
           voting rights of Volkswagen Aktiengesellschaft (40,440,274 voting rights) as per this date

                  (i) 6.93 % (20,429,274 voting rights) of which have been obtained by the exercise by
                  Qatar Holding LLC of financial instruments within the meaning of section 25 (1)
                  sentence 1 WpHG on that date granting the right to acquire shares in Volkswagen
                  Aktiengesellschaft, and

                  (ii) all of which are attributed to the Qatar Investment Authority pursuant to section
                  22 (1) sentence 1 no. 1 WpHG.

           (b) exceeded the threshold of 15 % on December 18, 2009 and amounted to 17.00 % of the
             voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this date

                  (i) 3.29 % (9,708,738 voting rights) of which have been obtained by the exercise by
                  Qatar Holding LLC of financial instruments within the meaning of section 25 (1)
                  sentence 1 WpHG on that date granting the right to acquire shares in Volkswagen
                  Aktiengesellschaft, and

                  (ii) all of which are attributed to the Qatar Investment Authority pursuant to section
                  22 (1) sentence 1 no. 1 WpHG.

            Voting rights that are attributed to the Qatar Investment Authority pursuant to lit. (a) and
            (b) above are held via the entities as set forth in (1) (bb) through (dd) which are controlled
            by it and whose attributed proportion of voting rights in Volkswagen Aktiengesellschaft
            amount to 3 % each or more.

     (3)    Pursuant to section 21 (1) WpHG we hereby notify for and behalf of Qatar Holding LLC ,
            Doha, Qatar, that its direct and indirect voting rights in Volkswagen Aktiengesellschaft

            (a) exceeded the threshold of 10 % on December 17, 2009 and amounted to 13.71 % of
            the voting rights of Volkswagen Aktiengesellschaft (40,440,274 voting rights) as per this
            date

                  (i) 6.93 % (20,429,274 voting rights) of which have been obtained by the exercise of
                  financial instruments within the meaning of section 25 (1) sentence 1 WpHGon that
                  date granting the right to acquire shares in Volkswagen Aktiengesellschaft, and

                  (ii) 6.78 % (20,011,000 voting rights) of which are attributed to Qatar Holding LLC
                  pursuant to section 22 (1) sentence 1 no. 1 WpHG.

            (b) exceeded the threshold of 15 % on December 18, 2009 and amounted to 17.00 % of
            the voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this
            date

                  (i) 3.29 % (9,708,738 voting rights) of which have been obtained by the exercise of
                  financial instruments within the meaning of section 25 (1) sentence 1 WpHG on that
                  date granting the right to acquire shares in Volkswagen Aktiengesellschaft, and

                  (ii) 6.78 % (20,011,000 voting rights) of which are attributed to Qatar Holding LLC
                  pursuant to section 22 (1) sentence 1 no. 1 WpHG.
                                                                                                         35
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




       Voting rights that are attributed to Qatar Holding LLC pursuant to lit. (a) and (b) above are
       held via the entities as set forth in (1) (cc) through (dd) which are controlled by it and
       whose attributed proportion of voting rights in Volkswagen Aktiengesellschaft amount to
       3 % each or more.

We have received the following notification:

(1)    Pursuant to section 21 (1) WpHG we hereby notify for and on behalf of Qatar Holding
       Luxembourg II S.à.r.l., Luxembourg, Luxembourg, that its indirect voting rights in
       Volkswagen Aktiengesellschaft exceeded the thresholds of 10 % and 15 % on December
       18, 2009 and amounted to 17.00 % of the voting rights of Volkswagen Aktiengesellschaft
       (50,149,012 voting rights) as per this date, all of which are attributed to Qatar Holding
       Luxembourg II S.à.r.l. pursuant to section 22 (1) sentence 1 no.1 WpHG.

       Voting rights that are attributed to Qatar Holding Luxembourg II S.à.r.l. are held via the
       following entities which are controlled by it and whose attributed proportion of voting
       rights in Volkswagen Aktiengesellschaft amount to 3 % each or more:

       (a) Qatar Holding Netherlands B.V., Amsterdam, The Netherlands;

       (b) Qatar Holding Germany GmbH, Frankfurt am Main, Germany.

(2)    Pursuant to section 21 (1) WpHG we hereby notify for and on behalf of Qatar Holding
       Netherlands B.V., Amsterdam, The Netherlands, that its indirect voting rights in
       Volkswagen      Aktiengesellschaft exceeded the thresholds of 10 % and 15 % on
       December 18, 2009 and amounted to 17.00 % of the voting rights of Volkswagen
       Aktiengesellschaft (50,149,012 voting rights) as per this date, all of which are attributed
       to Qatar Holding Luxembourg II S.à.r.l. pursuant to section 22 (1) sentence 1 no. 1 WpHG.

       Voting rights that are attributed to Qatar Holding Netherlands B.V. are held via the entity as
       set forth in (1) (b) which is controlled by it and whose attributed proportion of voting rights
       in Volkswagen Aktiengesellschaft amount to 3 % or more.

(3)    Pursuant to section 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 Volkswagen
       Aktiengesellschaft exceeded the thresholds of 3 %, 5 %, 10 % and 15 % on December 18,
       2009 and amounted to 17.00 % of the voting rights of Volkswagen Aktiengesellschaft
       (50,149,012 voting rights) as per this date.

STATE OF LOWER SAXONY
The State of Lower Saxony notified us on January 24, 2012 that it held a total of 59,022,310
ordinary shares as of December 31, 2011. It held 440 VW ordinary shares directly and
59,021,870 ordinary shares indirectly via Hannoversche Beteiligungsgesellschaft mbH
(HanBG), which is owned by the State of Lower Saxony.
36




     RECONCI LIATION OF N ET I NCOME TO N ET RETAI N ED PROFITS

                                                                            2011            2010
      € million

      Net income for the year                                               3,418          1,550
      Retained profits brought forward                                          6            130
      Appropriations to revenue reserves
       to other revenue reserves                                           –1,708           –640


      Net retained profits                                                  1,715          1,039


     TOTAL EXPENSE FOR TH E PERIOD
     Cost of materials

                                                                            2011            2010
      € million

      Cost of raw materials, consumables and supplies, and of purchased
      merchandise                                                          47,700         40,219
      Cost of purchased services                                            3,173          2,635
                                                                           50,872         42,853


     Personnel expenses

                                                                            2011            2010
      € million

      Wages and salaries                                                    6,734          5,538
      Social security and other pension costs                               1,423          1,354
         - thereof in respect of old age pensions                            (401)          (385)
                                                                            8,156          6,892


     OTHER DISC LOSU RES
     The tax expense is attributable to the result from ordinary activities.
        Expenses attributable to other fiscal years, primarily for warranties, amounted to €851
     million (previous year: €560 million). Prior-period income amounts to €1,158 million (previous
     year: €891 million). This relates in particular to income from the reversal of provisions
     recognized in previous years and contained in other operating income.

     WRITE-DOWNS

                                                                            2011            2010
      € million

      of long-term financial assets
       Affiliated companies                                                     –              –
        Loans to other investees and investors                                  0              –
       Other loans                                                              –              –
       Long-term investments                                                    1              0
                                                                                1              0
                                                                                                             37
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




AVERAGE N UMBER OF EMPLOYEES OF VOLKSWAGEN AG DU RI NG TH E YEAR

                                                                                            2011     2010


 by group
 Performance-related wage-earners                                                          47,021   47,046
 Time-rate wage-earners                                                                    17,174   17,651
 Salaried employees                                                                        31,247   29,441
                                                                                           95,442   94,137
 Vocational trainees                                                                        4,201    4,054
                                                                                           99,643   98,191


 by plant
 Wolfsburg                                                                                 54,294   53,283
 Hanover                                                                                   12,515   12,561
 Braunschweig                                                                               5,639    5,534
 Kassel                                                                                    13,702   13,329
 Emden                                                                                      7,548    7,519
 Salzgitter                                                                                 5,945    5,965
                                                                                           99,643   98,191


Information about the composition of the Board of Management and the Supervisory Board, on
changes in these executive bodies and on the memberships of members of the Board of
Management and the Supervisory Board of other statutory supervisory boards and comparable
supervisory bodies is contained in an annex to the notes.

REL ATED PARTY DISCLOSU RES
Related parties as defined by IAS 24 are natural persons and entities that Volkswagen AG has the
ability to control or on which it can exercise significant influence, or natural persons and
entities that have the ability to control or exercise significant influence on Volkswagen AG, or
that are influenced by another related party of Volkswagen AG.
     At 50.73%, Porsche Automobil Holding SE, Stuttgart, held a majority interest of the voting
rights in Volkswagen AG at the balance sheet date. The creation of rights of appointment for the
State of Lower Saxony was resolved at the Extraordinary General Meeting of Volkswagen AG on
December 3, 2009. As a result, Porsche Automobil Holding SE can no longer appoint the
majority of the members of Volkswagen AG’s Supervisory Board for as long as the State of Lower
Saxony holds at least 15% of Volkswagen AG’s ordinary shares. However, Porsche Automobil
Holding SE has the power to participate in the operating policy decisions of the Volkswagen
Group. Prior to the Annual General Meeting, the Supervisory Board of Volkswagen approved the
Comprehensive Agreement between Volkswagen AG, Porsche Automobil Holding SE, Porsche
Holding Gesellschaft m.b.H., Salzburg, Porsche Gesellschaft m.b.H., Salzburg, Porsche
Zwischenholding GmbH, Stuttgart, the ordinary shareholders of Porsche Automobil Holding SE
and the employee representatives of Volkswagen AG, Porsche Automobil Holding SE and
Dr. Ing. h.c. F. Porsche AG, Stuttgart, to create an integrated automotive group led by Volkswagen.
     Moreover, in the course of the performance of these agreements, Volkswagen AG reached
the following key arrangements with Porsche Automobil Holding SE and companies belonging
to the Porsche Zwischenholding GmbH Group:
> Volkswagen AG will be indemnified by Porsche Automobil Holding SE against obligations
   arising from certain legal disputes, tax claims (plus interest) and from certain substantial
   losses.
> Porsche Automobil Holding SE has also granted a number of guarantees to Volkswagen AG in
   respect of Porsche Zwischenholding GmbH and Dr. Ing. h.c. F. Porsche AG. Among other
   things, these relate to the proper issuance of and full payment for the shares of Dr. Ing. h.c. F.
   Porsche AG, to the ownership of the shares in Porsche Zwischenholding GmbH and Dr. Ing.
38




       h.c. F. Porsche AG, and to the existence of the approvals, permissions and industrial property
       rights required to operate the business activities of Dr. Ing. h.c. F. Porsche AG.
     > Volkswagen AG will indemnify Porsche Automobil Holding SE against certain financial
       guarantees issued by Porsche Automobil Holding SE to creditors of the companies belonging to
       the Porsche Zwischenholding GmbH Group up to the amount of its share in the capital of
       Porsche Zwischenholding GmbH.
     > Volkswagen AG has guaranteed loans made by Porsche Automobil Holding SE to Porsche
       Zwischenholding GmbH or Dr. Ing. h.c. F. Porsche AG in the case that these loans fall due and
       cannot be recovered because of the insolvency of Porsche Zwischenholding GmbH or Dr. Ing.
       h.c. F. Porsche AG, to the extent that these obligations could have been settled if the companies
       had not been insolvent on the due date by offsetting them against counterclaims of Porsche
       Automobil Holding SE.
     > Volkswagen AG has indemnified Porsche Automobil Holding SE internally against claims by the
       Einlagensicherungsfonds (Deposit Protection Fund) after Porsche Automobil Holding SE
       submitted an indemnification agreement required by the Bundesverband Deutscher Banken
       (Association of German Banks) to the Einlagensicherungsfonds in August 2009. Volkswagen AG
       has also undertaken to indemnify the Einlagensicherungsfonds against any losses caused by
       measures taken by the latter in favor of a bank in which Volkswagen AG holds a majority
       interest.

     On September 8, 2011, following talks with Porsche Automobil Holding SE, the Board of
     Management of Volkswagen AG came to the conclusion that a resolution on the merger with
     Porsche Automobil Holding SE could not be implemented by December 31, 2011 as provided for
     in the Comprehensive Agreement.
         In the event that the merger of Porsche Automobil Holding SE with Volkswagen AG that is
     planned under the Comprehensive Agreement does not take place, Volkswagen AG and Porsche
     Automobil Holding SE have agreed mutually exercisable call and put options in respect of the
     remaining 50.1% interest in Porsche Zwischenholding GmbH. The put option is exercisable
     from November 15, 2012 to January 14, 2013 inclusive and again from December 1, 2014 to
     January 31, 2015 inclusive; the call option may be exercised from March 1, 2013 to April 30,
     2013 inclusive and again from August 1, 2014 to September 30, 2014 inclusive. Both the put
     and the call option are subject to the condition that the General Meeting resolutions required
     for the merger of Porsche Automobil Holding SE with Volkswagen AG are not adopted by the
     end-2011 date stipulated in the Comprehensive Agreement. This condition was satisfied at the
     reporting date. The Board of Management of Volkswagen AG will investigate whether further
     opportunities are available for achieving the goal of an integrated automotive Group with
     Porsche.
         The strike price for the two options amounts to €3,883 million and is subject to minor
     adjustments. Both Volkswagen AG (if it exercises its call option) and Porsche Automobil Holding
     SE (if it exercises its put option) have undertaken to bear the tax burden resulting from the
     exercise of the options and any subsequent activities in relation to the equity investment in
     Porsche Zwischenholding GmbH (e.g. from recapture taxation on the spin-off in 2007 and/or
     2009). To secure any potential remaining claims by Volkswagen AG under the agreement
     between Porsche Automobil Holding SE and Volkswagen AG on the acquisition by Volkswagen
     AG of an interest in Porsche Zwischenholding GmbH, a purchase price retention mechanism
     was agreed in favor of Volkswagen AG for the case that the put or call options are exercised.
         If tax benefits accrue to Volkswagen AG, Porsche Zwischenholding GmbH, Dr. Ing. h.c. F.
     Porsche AG, or their respective subsidiaries as a result of recapture taxation on the spin-off in
     2007 and/or 2009, the purchase price to be paid by Volkswagen AG for the transfer of the
     outstanding 50.1% equity investment in Porsche Zwischenholding GmbH will be increased by
     the present value of the tax benefits if the put option is exercised by Porsche Automobil Holding
     SE.
                                                                                                 39
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




The call option has a positive fair value of €8,409 million (previous year: €2,001 million) as
measured in accordance with financial valuation techniques, and the corresponding put option
has a negative fair value of €87 million (previous year: €233 million). As it was no longer
possible to adopt the Annual General Meeting resolutions necessary for the merger by the date
stipulated in the Comprehensive Agreement, the probability of a merger was estimated at 0%
(previous year: 50%) for the measurement of the options. In addition to the change in the
probability of the merger, the adjustment of the enterprise value attributable to the updated
business plans of Porsche Zwischenholding GmbH in particular significantly affected the value
of the options.
    In addition, Volkswagen granted a put option to Porsche Holding Gesellschaft m.b.H., a
company owned by the Porsche and Piëch families, relating to the trading business of the
company. In return, Volkswagen was granted rights of involvement in the management of the
company during the term of the option. The option was exercised on November 10, 2010. The
trading company was transferred on March 1, 2011 against payment of €3.3 billion.
    According to a notification dated January 24, 2012, the State of Lower Saxony and
Hannoversche Beteiligungsgesellschaft mbH, Hanover, continue to hold 20.00% of the voting
rights of Volkswagen AG as of December 31, 2011. As mentioned above, the General Meeting of
Volkswagen AG on December 3, 2009 also resolved that the State of Lower Saxony may appoint
two members of the Supervisory Board (right of appointment).
    Members of the Board of Management and Supervisory Board of Volkswagen AG are
members of supervisory and management boards or shareholders of other companies with
which Volkswagen AG has relations in the normal course of business.
    All transactions with related parties are conducted on an arm’s length basis.
    The amounts of the supplies and services transacted between Volkswagen AG and related
parties (consolidated and unconsolidated subsidiaries, joint ventures, associates, Porsche
Automobile Holding SE, Stuttgart, Porsche Zwischenholding GmbH, Stuttgart, Porsche Holding
Gesellschaft m.b.H., Salzburg/Austria, and their affiliated companies as well as other related
parties) are presented in the following tables:
40




     RELATED PARTI ES

                                                                                       SUPPLIES AN D SERVICES                    SUPPLIES AN D SERVICES
                                                                                       RENDERED                                  RECEIVED
                                                                                                                          2011                            2011
      € million

      Porsche Automobil Holding SE                                                                                          –                                –
      Supervisory Board members                                                                                             0                                –
      Board of Management members                                                                                           0                                –
      Consolidated subsidiaries1,2                                                                                    9,272                               5,246
      Unconsolidated subsidiaries2                                                                                        376                              278
      Joint ventures2,3                                                                                               3,047                                596
      Associates4,6                                                                                                        39                               11
      Pension plans                                                                                                         2                                –
      Other related parties                                                                                                 2                                9
      Porsche Holding Salzburg, its majority interests and joint ventures5                                                 15                                0
      State of Lower Saxony, its majority interests and joint ventures                                                      9                                0


     1 Includes the MAN companies from November 9, 2011.
     2 Also includes the companies of Porsche Holding Gesellschaft m.b.H., Salzburg/Austria, from March 1, 2011.
     3 Includes Porsche Zwischenholding GmbH, Stuttgart, and its subsidiaries.
     4 Includes the MAN companies until November 8, 2011.
     5 Until February 28, 2011.
     6 Suzuki Motor Corporation until September 13, 2011.




                                                                                             CO ST O F
                                                                                             LOSS
                                                   INCOME FROM PROFIT AND                    ABSORPT         I NTER EST      I NTER EST
                                                   LOSS TRANSFER AGREEMENTS                  ION             INCOME          EXPENSE

                                                                                      2011        2011             2011             2011
      € million

      Porsche Automobil Holding SE                                                      –                –            –                   –
      Supervisory Board members                                                         –                –            –                   –
      Board of Management members                                                       –                –            –                   –
      Consolidated subsidiaries1,2                                                5,192                  –          74               111
      Unconsolidated subsidiaries2                                                      5                1            1                   1
      Joint ventures2,3                                                               923                –            0                   0
      Associates4,6                                                                    93                –            –                   –
      Pension plans                                                                     –                –            –                   –
      Other related parties                                                             –                –            –                   –
      Porsche Holding Salzburg, its
      majority interests and joint
      ventures5                                                                         –                –            –                   –
      State of Lower Saxony, its majority
      interests and joint ventures                                                      –                –            –                   –


     1 Includes the MAN companies from November 9, 2011.
     2 Also includes the companies of Porsche Holding Gesellschaft m.b.H., Salzburg/Austria, from March 1, 2011.
     3 Also includes Porsche Zwischenholding GmbH, Stuttgart, and its subsidiaries.
     4 Includes the MAN companies until November 8, 2011.
     5 Until February 28, 2011.
     6 Suzuki Motor Corporation until September 13, 2011.
                                                                                                                                                                    41
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




                                                  C O L L AT E R A L G R A N T E D         C O L L AT E R A L R E C E I V E D         CREDIT LINES GRANTED

 Mio. €                                                                        2011                                           2011                           2011


 Porsche Automobil Holding SE                                                        –                                            –                            –
 Supervisory Board members                                                           –                                            –                            –
 Board of Management members                                                         –                                            –                            –
 Consolidated subsidiaries1,2                                                   568                                               –                          247
 Unconsolidated subsidiaries2                                                        4                                            –                           51
 Joint ventures2,3                                                           5,278                                              264                            –
 Associates4,6                                                                       –                                            –                            –
 Pension plans                                                                       –                                            –                            –
 Other related parties                                                               –                                            –                            –
 Porsche Holding Salzburg, its
 majority interests and joint
 ventures5                                                                           –                                            –                            –
 State of Lower Saxony, its majority
 interests and joint ventures                                                        –                                            4                            –


1 Includes the MAN companies from November 9, 2011.
2 Also includes the companies of Porsche Holding Gesellschaft m.b.H., Salzburg/Austria, from March 1, 2011.
3 Also includes Porsche Zwischenholding GmbH, Stuttgart, and its subsidiaries.
4 Includes the MAN companies until November 8, 2011.
5 Until February 28, 2011.
6 Suzuki Motor Corporation until September 13, 2011.




€0.2 billion (previous year: €0.2 billion) of factoring-related financing at standard market terms
and collateral granted to a subsidiary of Porsche Zwischenholding GmbH was still outstanding
as of December 31, 2011; €103 million of this amount was granted during the reporting period.
In fiscal year 2010, Porsche Corporate Finance GmbH, Salzburg, Zurich Branch, Austria,
subscribed for seven commercial paper issues by Volkswagen International Finance N.V.,
Amsterdam, the Netherlands, with a total volume of €0.1 billion, which were guaranteed by
Volkswagen AG. All securities had matured by the 2010 reporting date.

The Board of Management and Supervisory Board of the Volkswagen Group are related parties.
The following benefits and remuneration were recorded for these persons in connection with
their executive body membership:

                                                                                                                     2011                  2010
 €

 Short-term benefits                                                                                        77,622,730                41,746,417
 Termination benefits                                                                                                    –                    –
 Post-employment benefits                                                                                     7,393,147                9,420,390
 Share-based payment                                                                                                      –                   –
                                                                                                            85,015,877                51,166,807




Employee representatives on the Supervisory Board continue to receive a regular salary as
stipulated in their employment contracts. This is based on the provisions of the
Betriebsverfassungsgesetz (BetrVG – German Works Constitution Act) and is appropriate to
their respective function or role in the Company. The same applies for representatives of senior
management on the Supervisory Board.
42




     There are outstanding balances for bonuses of the Board of Management members in the
     amount of €61,075,000 at the end of the fiscal year (previous year: €28,792,500). The post-
     employment benefits relate to additions to pension provisions for current members of the Board
     of Management. The expenses shown above do not correspond to the definition of remuneration
     of members of the Board of Management and the Supervisory Board in accordance with the
     German Corporate Governance Code.



     REMU N ERATION OF TH E BOARD OF MANAGEMENT AN D TH E SU PERVISORY BOARD

                                                                             2011            2010
      €

      Board of Management remuneration
      Non-performance-related remuneration                              9,031,491        7,759,479
      Performance-related remuneration                                 61,555,000       28,912,500


      Supervisory Board remuneration
      Fixed remuneration components                                       282,021         283,275
      Variable remuneration components                                  6,690,408        4,791,163
      Loans to Supervisory Board members                                   12,500          14,167




     The fixed remuneration of the Board of Management also includes differing levels of
     remuneration for the assumption of appointments at Group companies, as well as noncash
     benefits, which consist in particular of the use of company cars and the grant of insurance
     cover. The additional annual variable amount paid to each member of the Board of
     Management contains annually recurring components that are tied to the business success of
     the Company. It is primarily oriented on the results achieved and the financial position of the
     Company.
         On December 31, 2011, the present value of pension obligations for members of the Board
     of Management amounted to €71,818,192 (previous year: €61,157,564). Current pensions are
     index-linked in accordance with the index-linking of the highest collectively agreed salary
     insofar as the application of section 16 of the Gesetz zur Verbesserung der betrieblichen
     Altersversorgung (BetrAVG – German Company Pension Act) does not lead to a larger increase.
         Retired members of the Board of Management and their surviving dependents received
     €8,618,915 (previous year: €8,562,867). The present value of pension obligations for this group
     of people amounted to €104,212,838 (previous year: €107,392,431). The members of the Board
     of Management are entitled to the retirement pension in the event of disability, and to payment
     of their normal remuneration for six months in the event of illness. Surviving dependents
     receive a widow’s pension of 66 2/3% and a 20% orphan’s pension per child – but no more than
     a maximum of 100% – based on the pension of the former member of the Board of
     Management.
         The individual remuneration of the members of the Board of Management and the
     Supervisory Board is explained in the remuneration report in the management report.
                                                                                             43
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG

  Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Interest-free advances in the total amount of €480,000 (previous year: €120,000) have been
granted to members of the Board of Management. The advances will be set off against
performance-related remuneration (2011: €120,000). Loans in the total amount of €12,500
(repayments in 2011: €1,667) have been granted to members of the Supervisory Board. The
loans generally bear interest at a rate of 4% and have an agreed term of up to 15 years.




Wolfsburg, February 14, 2012

Volkswagen Aktiengesellschaft

The Board of Management
44




     Responsibility Statement

     To the best of our knowledge, and in accordance with the applicable reporting principles, the
     annual financial statements give a true and fair view of the assets, liabilities, financial position
     and profit or loss of Volkswagen AG, and the management report includes a fair review of the
     development and performance of the business and the position of the Company, together with a
     description of the material opportunities and risks associated with the expected development of
     the Company.




     Wolfsburg, February 14, 2012

     Volkswagen Aktiengesellschaft

     The Board of Management




     Martin Winterkorn                 Francisco Javier Garcia Sanz      Jochem Heizmann




     Christian Klingler                Michael Macht                     Horst Neumann




     Hans Dieter Pötsch                Rupert Stadler
                                                                                                      45
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG
 Balance Sheet   Income Statement   Notes   Responsibility Statement   Auditors’ Report




Auditors’ Report

On completion of our audit, we issued the following unqualified auditors` report dated
February 15, 2012. This report was originally prepared in German. In case of ambiguities the
German version takes precedence:

    Auditor’s Report

We have audited the annual financial statements, comprising the balance sheet, the income
statement and the notes to the financial statements, together with the bookkeeping system, and
the management report, which is combined with the group management report of
VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg, for the business year from January 1 to
December 31, 2011. As required by Article 6b (5) EnWG ("Energiewirtschaftsgesetz", "German
Energy Industry Law"), the audit also included the company's observance of obligations for the
accounting pursuant to Article 6b (3) EnWG whereby the activities pursuant to Article 6b (3)
EnWG have to be accounted for in separate accounts. The maintenance of the books and records
and the preparation of the annual financial statements and the combined management report
in accordance with German commercial law as well as the observance of the obligations
pursuant to Article 6b (3) EnWG are the responsibility of the Company’s Board of Management.
Our responsibility is to express an opinion on the annual financial statements, together with the
bookkeeping system and the combined management report and on the observance of
obligations for the accounting pursuant to Article 6b (3) EnWG based on our audit.
    We conducted our audit of the annual financial statements in accordance with § (Article) 317
HGB ("Handelsgesetzbuch": "German Commercial Code") and German generally accepted
standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that
we plan and perform the audit such that misstatements materially affecting the presentation of
the net assets, financial position and results of operations in the annual financial statements in
accordance with (German) principles of proper accounting and in the combined management
report are detected with reasonable assurance and to obtain reasonable assurance about
whether, in all material respects, the obligations for accounting pursuant to Article 6b (3) EnWG
have been observed. Knowledge of the business activities and the economic and legal
environment of the Company and expectations as to possible misstatements are taken into
account in the determination of audit procedures. The effectiveness of the accounting-related
internal control system and the evidence supporting the disclosures in the books and records,
the annual financial statements and the combined management report, as well as the
observance of obligation for the accounting pursuant to Article 6b (3) EnWG are examined
primarily on a test basis within the framework of the audit. The audit includes assessing the
accounting principles used and significant estimates made by the Company’s Board of
Management, as well as evaluating the overall presentation of the annual financial statements
and the combined management report, and assessing whether the amounts stated and the
classification of accounts pursuant to Article 6b (3) EnWG are appropriate and comprehensible
and whether the principle of consistency has been observed. We believe that our audit provides
a reasonable basis for our opinion.
    Our audit of the annual financial statements, together with the bookkeeping system and of
the management report has not led to any reservations.
    In our opinion based on the findings of our audit, the annual financial statements comply
with the legal requirements and give a true and fair view of the net assets, financial position and
results of operations of the Company in accordance with (German) principles of proper
accounting. The combined management report is consistent with the annual financial
statements and as a whole provides a suitable view of the Company's position and suitably
presents the opportunities and risks of future development.
46




     The audit of the observance of obligations for accounting pursuant to Article 6b (3) EnWG
     whereby the activities pursuant to Article 6b (3) EnWG have to be accounted for in separate
     accounts has not led to any reservations.



     Hanover, February 15, 2012

     PricewaterhouseCoopers
     Aktiengesellschaft
     Wirtschaftsprüfungsgesellschaft




     Harald Kayser                            Martin Schröder
     Wirtschaftsprüfer                        Wirtschaftsprüfer
     (German Public Auditor)                  (German Public Auditor)
                                                                                                                                                           47
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG




Executive Bodies
Members of the Board of Management and their Appointments
APPOINTMENTS: AS OF DECEMBER 31, 2011




PROF. DR. RER. NAT. DR.-ING. E.H.         DR. RER. POL. H.C.                       PROF. DR. RER. POL.
MARTIN WINTERKORN (64)                    FRANCISCO JAVIER                         HORST NEUMANN (62)
Chairman (since January 1, 2007)          GARCIA SANZ (54)                         Human Resources and Organization
Research and Development                  Procurement                              December 1, 2005*
July 1, 2000*                             July 1, 2001*                            Appointments:
Chairman of the Executive Board of        Appointments:                             Wolfsburg AG, Wolfsburg
Porsche Automobil Holding SE               Criteria CaixaHolding S.A.,
November 25, 2009*                           Barcelona
Appointments:                                                                      HANS DIETER PÖTSCH (60)
 FC Bayern München AG, Munich                                                     Finance and Controlling
 Salzgitter AG, Salzgitter               PROF. DR. RER. POL.                      January 1, 2003*
                                          JOCHEM HEIZMANN (60)                     Chief Financial Officer of Porsche
                                          Commercial Vehicles                      Automobil Holding SE
                                          January 11, 2007*                        November 25, 2009*
                                          Appointments:                            Appointments:
                                           Lufthansa Technik AG, Hamburg           Bertelsmann AG, Gütersloh




                                          CHRISTIAN KLINGLER (43)                  RUPERT STADLER (48)
                                          Sales and Marketing                      Chairman of the Board of
                                          January 1, 2010*                         Management of AUDI AG
                                                                                   January 1, 2010*
                                                                                   Appointments:
                                          DR.-ING E.H. MICHAEL MACHT (51)           FC Bayern München AG, Munich
                                          Production
                                          October 1, 2010*




As part of their duty to manage and supervise the    Membership of statutory supervisory boards in      * The date signifies the beginning or period of
Group’s business, the members of the Board of          Germany.                                            membership of the Board of Management.
Management hold other offices on the supervisory     Comparable appointments in Germany and abroad.
boards of consolidated Group companies and other
significant investees.
48




     Members of the Supervisory Board and their Appointments

     APPOINTMENTS: AS OF DECEMBER 31, 2011




     HON.-PROF. DR. TECHN. H.C. DIPL.-   DR. HUSSAIN ALI AL-ABDULLA (55)            ANNIKA FALKENGREN (49)
     ING. ETH FERDINAND K. PIËCH (74)    Vice Chairman of Qatar Holding LLC         President and Group Chief Executive
     Chairman                            April 22, 2010*                            of Skandinaviska Enskilda Banken AB
     April 16, 2002*                     Appointments:                              May 3, 2011*

     Appointments:                        Qatar Investment Authority,              Appointments:

      AUDI AG, Ingolstadt                 Doha                                      Münchener Rückversicherungs-

      Dr. Ing. h.c. F. Porsche AG,       Qatar Holding, Doha (Deputy                 Gesellschaft AG, Munich

       Stuttgart                           Chairman)                                 Securitas AB, Stockholm

      MAN SE, Munich (Chairman)          Masraf Al Rayan, Doha (Chairman)
      Porsche Automobil Holding SE,      Qatar Exchange, Doha (Chairman)
       Stuttgart                          Qatar Airways, Doha                      DR. JUR. MICHAEL FRENZEL (64)

      Porsche Gesellschaft m.b.H.,       Gulf Investment Corporation,             Chairman of the Board of

       Salzburg                            Safat/Kuwait                             Management

      Porsche Holding Gesellschaft                                                 of TUI AG

       m.b.H., Salzburg                                                             June 7, 2001*

      Porsche Piech Holding AG          KHALIFA JASSIM AL-KUWARI (35)              Appointments:

       Salzburg                          Chief Operating Officer of the Qatar        AWD Holding AG, Hanover
                                         Investment Authority and of Qatar           AXA Konzern AG, Cologne
                                         Holding LLC                                ● Hapag-Lloyd AG, Hamburg
                                         May 3, 2011*                                  (Chairman)
     BERTHOLD HUBER (61)
     Deputy Chairman
                                         Appointments:                              ● TUI Cruises GmbH, Hamburg
     First Chairman of IG Metall
                                          Songbird Estates plc, London             ● TUI Deutschland GmbH, Hanover
                                          Qatar Exchange, Doha                        (Chairman)
     May 25, 2010*
     Appointments:
                                          Qatar & Oman Investment                  ● TUIfly GmbH, Hanover
                                           Company, Doha                               (Chairman)
      AUDI AG, Ingolstadt (Deputy
       Chairman)                                                                     TUI China Travel Co. Ltd., Beijing

      Porsche Automobil Holding SE,                                                 TUI Travel PLC, London
                                         JÖRG BODE (41)
       Stuttgart
                                         Minister of Economic Affairs, Labor
      Siemens AG, Munich (Deputy
                                         and Transport for the Federal State        BABETTE FRÖHLICH (46)
       Chairman)
                                         of Lower Saxony                            IG Metall,
                                         November 4, 2009*                          Department head for coordination
                                         Appointments:                              of Executive Board duties and
                                          Deutsche Messe AG, Hanover               planning
                                                                                    October 25, 2007*
                                                                                    Appointments:
                                                                                     MTU Aero Engines Holding AG,
                                                                                       Munich

     DR. JUR. KLAUS LIESEN (80)
     July 2, 1987 – May 3, 2006*
     Honorary Chairman of the
     Supervisory Board of Volkswagen
     AG (since May 3, 2006)
                                                    Membership of statutory supervisory boards in      * The date signifies the beginning or period of
                                                       Germany.                                           membership of the Supervisory Board.
                                                   ● Group appointments to statutory supervisory
                                                       boards.
                                                    Comparable appointments in Germany and abroad.
                                                                                                                 49
A N N UAL F I NA NC IAL STATEMENTS OF VOLKSWAG EN AG




DR. JUR. HANS MICHAEL GAUL (69)        BERND OSTERLOH (55)                  DR. JUR. FERDINAND OLIVER
June 19, 1997 – May 3, 2011*           Chairman of the General and Group    PORSCHE (50)
                                       Works Councils of Volkswagen AG      Member of the Board of
                                       January 1, 2005*                     Management of Familie Porsche AG
DR. ING. JÜRGEN GROSSMANN (59)         Appointments:                        Beteiligungsgesellschaft
May 3, 2006 – May 3, 2011*              Autostadt GmbH, Wolfsburg          August 7, 2009*
                                        Porsche Automobil Holding SE,      Appointments:
                                          Stuttgart                          AUDI AG, Ingolstadt
PETER JACOBS (54)                       Wolfsburg AG, Wolfsburg             Dr. Ing. h.c. F. Porsche AG,
Chairman of the Works Council at        Porsche Holding Gesellschaft         Stuttgart
the Volkswagen AG Emden plant             m.b.H., Salzburg                   Porsche Automobil Holding SE,
April 19, 2007*                         Projekt Region Braunschweig          Stuttgart
Appointments:                             GmbH, Braunschweig                 PGA S.A., Paris
 Volkswagen                            VfL Wolfsburg-Fußball GmbH,         Porsche Holding Gesellschaft
  Belegschaftsgenossenschaft fur          Wolfsburg                           m.b.H., Salzburg
  Regenerative Energien am              Volkswagen Coaching GmbH,           Porsche Lizenz- und
  Standort Emden eG, Emden                Wolfsburg                           Handelsgesellschaft mbH & Co.
 Volkswagen Coaching GmbH,                                                   KG, Bietigheim-Bissingen
  Wolfsburg                                                                  Voith AG, Heidenheim
                                       DR. JUR. HANS MICHEL PIËCH (70)
                                       Lawyer in private practice
DAVID MCALLISTER (41)                  August 7, 2009*                      DR. RER. COMM. WOLFGANG
Minister-President of the Federal      Appointments:                        PORSCHE (68)
State of Lower Saxony                   AUDI AG, Ingolstadt                Chairman of the Supervisory Board
July 1, 2010*                           Dr. Ing. h.c. F. Porsche AG,       of Porsche Automobil Holding SE;
                                          Stuttgart                         Chairman of the Supervisory Board
                                        Porsche Automobil Holding SE,      of Dr. Ing. h.c. F. Porsche AG
HARTMUT MEINE (59)                        Stuttgart                         April 24, 2008*
Director of the Lower Saxony and        Porsche Cars Great Britain Ltd.,   Appointments:
Saxony-Anhalt Regional Office of IG       Reading                            Dr. Ing. h.c. F. Porsche AG,
Metall                                  Porsche Cars North America Inc.,     Stuttgart (Chairman)
December 30, 2008*                        Wilmington                         Porsche Automobil Holding SE,
Appointments:                           Porsche Gesellschaft m.b.H.,         Stuttgart (Chairman)
 Continental AG, Hanover                 Salzburg (Chairman)                Familie Porsche AG
 KME AG, Osnabrück                     Porsche Holding Gesellschaft         Beteiligungsgesellschaft,
                                          m.b.H., Salzburg                    Salzburg (Chairman)
                                        Porsche Ibérica S.A., Madrid        Porsche Cars Great Britain Ltd.,
PETER MOSCH (40)                        Porsche Italia S.p.A., Padua         Reading
Chairman of the General Works           Porsche Piech Holding AG,           Porsche Cars North America Inc.,
Council of AUDI AG                        Salzburg (Chairman)                 Wilmington
January 18, 2006*                       Schmittenhöhebahn AG, Zell am       Porsche Gesellschaft m.b.H.,
Appointments:                             See                                 Salzburg (Deputy Chairman)
 AUDI AG, Ingolstadt                   Volksoper Wien GmbH, Vienna         Porsche Holding Gesellschaft
 Porsche Automobil Holding SE,                                               m.b.H., Salzburg (Deputy
  Stuttgart                                                                   Chairman)
                                                                             Porsche Ibérica S.A., Madrid
                                                                             Porsche Italia S.p.A., Padua
                                                                             Porsche Piech Holding AG,
                                                                              Salzburg (Deputy Chairman)
                                                                             Schmittenhöhebahn AG, Zell am
                                                                              See
50




     WOLFGANG RITMEIER (63)              COMMITTEES OF THE SUPERVISORY           Members of the Committee for
     Chairman of the Board of            BOARD                                   Major Shareholder Business
     Management of Volkswagen            As of December 31, 2011                 Relationships
     Management Association (VMA)                                                Hon.-Prof. Dr. techn. h.c. Dipl.-Ing.
     April 19, 2007*                     Members of the Presidium                ETH Ferdinand K. Piëch (Chairman)
     Appointments:                       Hon.-Prof. Dr. techn. h.c. Dipl.-Ing.   Berthold Huber (Deputy Chairman)
      Volkswagen Pension Trust e.V.,    ETH Ferdinand K. Piëch (Chairman)       Jörg Bode
       Wolfsburg                         Berthold Huber (Deputy Chairman)        Dr. Michael Frenzel
                                         David McAllister                        Bernd Osterloh
                                         Bernd Osterloh                          Dr. Wolfgang Porsche
     JÜRGEN STUMPF (57)                  Dr. Wolfgang Porsche                    Jürgen Stumpf
     Chairman of the Works Council       Bernd Wehlauer                          Bernd Wehlauer
     at the Volkswagen AG Kassel plant
     January 1, 2005*
                                         Members of the Mediation                Members of the Integrated
                                         Committee in accordance with            Automotive Group Committee
     BERND WEHLAUER (57)                 section 27(3) of the                    Hon.-Prof. Dr. techn. h.c. Dipl.-Ing.
     Deputy Chairman of the General      Mitbestimmungsgesetz (German            ETH Ferdinand K. Piëch (Chairman)
     and Group Works Councils of         Codetermination Act)                    Bernd Osterloh (Deputy Chairman)
     Volkswagen AG                       Hon.-Prof. Dr. techn. h.c. Dipl.-Ing.   David McAllister
     September 1, 2005*                  ETH Ferdinand K. Piëch (Chairman)       Bernd Wehlauer
     Appointments:                       Berthold Huber (Deputy Chairman)
      Wolfsburg AG, Wolfsburg           David McAllister
      Sitech Sitztechnik GmbH,          Bernd Osterloh
       Wolfsburg
      Volkswagen Immobilien GmbH,
       Wolfsburg                         Members of the Audit Committee
      Volkswagen Pension Trust e.V.,    Dr. Ferdinand Oliver Porsche
       Wolfsburg                         (Chairman)
                                         Bernd Wehlauer (Deputy Chairman)
                                         Babette Fröhlich
     THOMAS ZWIEBLER (46)                Dr. jur. Michael Frenzel
     Chairman of the Works Council of
     Volkswagen Commercial Vehicles
     May 15, 2010*                       Members of the Nomination
                                         Committee
                                         Hon.-Prof. Dr. techn. h.c. Dipl.-Ing.
                                         ETH Ferdinand K. Piëch (Chairman)
                                         David McAllister
                                         Dr. Wolfgang Porsche

				
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