Net Assets and Financial Position

Total assets amounted to €133.5 billion at December 31, 2015, €17.4 billion up on the prior-year figure. At €2.7 (2.8) billion, investments in tangible and intangible assets were on a level with the previous year. Investments in financial assets declined by €9.2 billion to €9.1 (18.2) billion. Fixed assets accounted for a share of 71.1 (75.0)% of total assets.

Current assets (including prepaid expenses) increased by a total of €9.5 billion to €38.6 billion, driven among other factors by lending activities and a significant rise in investment income receivable from affiliated companies.

Equity amounted to €24.4 billion at the end of the reporting period; the €4.1 billion decrease year-on-year was primarily due to the impact on earnings of the emissions issue. The capital increase resulting from the settlement of the mandatory convertible notes had a positive effect. The equity ratio was 18.3 (24.5)%.

Other provisions increased by €15.9 billion year-on-year to a total of €28.6 billion. This is primarily attributable to higher warranty provisions and provisions for legal risks resulting from the diesel issue. Due to intragroup agreements, these provisions also cover risks that arise at other Volkswagen Group brands. Provisions for pensions and similar obligations rose by €1.2 billion to €14.3 billion, primarily due to changes in the discount rate, while provisions for taxes decreased by €0.7 billion to €4.6 billion. The €5.0 billion rise in total liabilities (including deferred income) to €61.5 billion is mainly attributable to higher liabilities to banks.

Volkswagen AG’s cash funds, comprising cash instruments with a maturity of less than three months, less bank and cash pooling liabilities repayable on demand, declined by €1.6 billion year-on-year to €−5.1 billion, due in particular to the expansion of intragroup financing activities.

At €51.4 (48.2) billion, the interest-bearing portion of debt was up on the previous year.

In our assessment, the economic position of Volkswagen AG is as strained as that of the Volkswagen Group.