24 | Equity The subscribed capital of Volkswagen AG is composed of no-par value bearer shares with a
24 | Equity 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 is composed of 295,089,818 no-par value ordinary shares and 170,142,778 preferred shares. Volkswagen AG issued one ordinary share in connection with the contribution of Porsche SE’s holding company operating business to Volkswagen AG in the course of a capital increase with a mixed noncash contribution (for further information, see the disclosures on the basis of consolidation).
Authorized capital of up to €110 million, expiring on April 18, 2017, was approved for the issue of new ordinary bearer shares or preferred shares based on the resolution by the Annual General Meeting on April 19, 2012.
Following the capital increase implemented in fiscal year 2010, 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 in the amount of up to €102.4 million expiring on April 21, 2015 that can be used to issue up to €5 billion in bonds with warrants and/or convertible bonds.
This authorization was exercised in the reporting period to issue a €2.5 billion mandatory convertible note to subscribe for preferred shares. The preemptive rights of existing shareholders were disapplied. The convertible note bears a coupon of 5.50% and matures on November 9, 2015. The minimum conversion price was set at €154.50, and the maximum conversion price is €185.40. The conversion price will be adjusted if certain events occur. The convertible note will be settled by issuing new preferred shares no later than at maturity. Based on the conversion prices given above, the mandatory convertible note entitles the holders of the convertible note to subscribe for a maximum of 16,181,229 and a minimum of 13,484,358 no- par value preferred shares of Volkswagen AG. There was no conversion in the reporting period. Volkswagen can convert the mandatory convertible note at any time at the minimum conversion price. Because of the fixed conversion ratio, the mandatory convertible note is recognized, net of transaction costs (€54 million) and the deferral of taxes (€133 million), in the capital reserves at an amount of €2,181 million and in the financial liabilities at an amount of €397 million.
CHANGE IN ORDINARY AN D PREFERRED SHARES AND SUBSCRI BED CAPITAL
Balance at January 1
Capital increase
3 – Stock option plan
Balance at December 31
CONSOLI DATED FI NANC IAL STATEMENTS 309
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
The capital reserves comprise the share premium totaling €11,183 million (previous year: €9,087 million net of transaction costs of €84 million) from capital increases, the share premium of €219 million from the issuance of bonds with warrants and an amount of €107 million appropriated on the basis of the capital reduction implemented in 2006. The capital reserves increased by €2,181 million in the reporting period due to the issuance of the mandatory convertible note. No amounts were withdrawn from the capital reserves.
DIVIDEN D PROPOSAL
In accordance with section 58(2) of the Aktiengesetz (AktG – German Stock Corporation Act), the dividend payment by Volkswagen AG is based on the net retained profits reported in the annual financial statements of Volkswagen AG. Based on the annual financial statements of Volkswagen AG, net retained profits of €3,200 million are eligible for distribution. The Board of Management and Supervisory Board will propose to the Annual General Meeting that a total dividend of €1,639 million, i.e. €3.50 per ordinary share and €3.56 per preferred share, be paid from the net retained profits. Shareholders are not entitled to a dividend payment until it has been resolved by the Annual General Meeting.
A dividend of €3.00 per ordinary share and €3.06 per preferred share was distributed in fiscal year 2012.
NONCONTROLLING INTERESTS
The noncontrolling interests in equity are attributable primarily to shareholders of MAN SE and Scania AB.
25 | Noncurrent and current financial liabilities The details of noncurrent and current financial liabilities are presented in the following table:
Dec. 31, € million
24,029 35,947 Commercial paper and notes
7,537 15,269 Liabilities to banks
8,561 16,035 Deposit business
3,093 23,089 Loans and miscellaneous liabilities
923 2,825 Bills of exchange
0 24 – 24 Finance lease liabilities
* Prior-period figures adjusted because of the updated purchase price allocation for MAN.
Of the financial liabilities reported in the consolidated balance sheet, a total of €2,496 million (previous year: €511 million) is secured, for the most part by real estate liens and leasing portfolios.
The deposits from direct banking business contained in the financial liabilities of €117.7 billion (previous year: €93.5 billion) increased by €3.4 million as a result of a fair value adjustment from portfolio hedging (previous year: increase of €6.3 million).
Asset-backed securities transactions amounting to €17,655 million (previous year: €14,478 million) entered into to refinance the financial services business are included in bonds, commercial paper and notes, and liabilities from loans. Receivables of €21,543 million (previous year: €16,795 million) from the customer finance and leasing business are pledged as collateral. The expected payments are assigned to special purpose vehicles and the financed vehicles trans- ferred as collateral.
All public and private asset-backed securities transactions of the Volkswagen Financial Services AG group can be repaid in advance (clean-up call) if less than 9% of the original transaction volume is outstanding. The asset-backed securities conduit transactions of Volks- wagen Financial Services (UK) and Volkswagen Financial Services Japan are private trans- actions that can be terminated at fixed dates.
26 | Noncurrent and current other financial liabilities
Dec. 31, € million
Current Noncurrent 2011
Negative fair values of derivative financial instruments
1,727 2,247 3,974 Interest payable
749 6 756 Miscellaneous financial liabilities
The noncurrent and current financial liabilities previously reported in the “Other liabilities” item are presented in greater detail in fiscal year 2012. The prior-period figures were reclassified accordingly.
The negative fair values of derivatives relate to the following items:
Transactions for hedging
foreign currency risk from assets using fair value hedges 21 14 foreign currency risk from liabilities using fair value hedges
53 85 interest rate risk using fair value hedges
168 interest rate risk using cash flow hedges
77 73 foreign currency and price risk from future cash flows (cash flow hedges)
Hedging transactions
Liabilities related to derivatives not included in hedging relationships
CONSOLI DATED FI NANC IAL STATEMENTS 311
Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes
Responsibility Statement Auditors’ Report
Of the other financial liabilities reported in the consolidated balance sheet, a total of €744 million (previous year: €539 million) is secured, for the most part by real estate liens.
The negative fair value of transactions for hedging price risk from future cash flows (cash flow hedges) amounted to €26 million (previous year: €35 million). Negative fair values of €158 million (previous year: €89 million) were recognized from transactions for hedging interest rate risk (fair value hedges) used in portfolio hedges. In the previous year, liabilities from derivatives not included in hedging relationships included the put options written by Volkswagen AG to acquire the outstanding shares of Porsche Holding Stuttgart in the amount of €87 million.
Further details on derivative financial instruments as a whole are given in note 33 Financial risk management and financial instruments.
27 | Noncurrent and current other liabilities
Dec. 31, € million
Payments on account received in respect of orders*
1,134 5,548 Liabilities relating to
other taxes
322 2,003 social security