Financial Position

PRINCIPLES AND GOALS OF FINANCIAL MANAGEMENT

Financial management at the Volkswagen Group comprises the areas of liquidity management, currency, interest rate and commodity risk management, as well as credit and country default risk management. This is performed centrally for all Group companies by Group Treasury, based on internal directives and risk parameters.

For more information on the principles and goals of financial management, please refer to the Notes to the 2008 Consolidated Financial Statements to chapter "Financial risk management" as well as to the Risk Report to chapter "Risks arising from financial instruments".


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CASH FLOW STATEMENT BY DIVISION

 

 

 

 

 

 

Volkswagen Group

 

Automotive1

 

Financial Services

€ million

 

2008

 

2007

 

2008

 

2007

 

2008

 

2007

1

Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.

2

These relate mainly to fair value measurement of financial instruments, application of the equity method and reclassification of gains/losses on the disposal of noncurrent assets to investing activities.

3

Before consolidation of intra-Group transactions: €8,876 million (€13,897 million).

4

Including loan receivables previously reported in financing activities. Prior-period amounts have been adjusted.

5

Cash and cash equivalents comprise cash at banks, checks, cash-in-hand and call deposits.

Profit before tax

 

6,608

 

6,543

 

5,677

 

5,474

 

931

 

1,069

Income taxes paid

 

–2,075

 

–1,172

 

–1,973

 

–1,290

 

–102

 

118

Depreciation and amortization expense

 

8,438

 

9,238

 

6,680

 

7,429

 

1,758

 

1,809

Change in pension provisions

 

140

 

103

 

132

 

99

 

8

 

4

Other noncash income/expense and reclassifications2

 

893

 

–50

 

591

 

190

 

302

 

–240

Gross cash flow

 

14,004

 

14,662

 

11,107

 

11,902

 

2,897

 

2,760

Change in working capital

 

–3,205

 

1,000

 

–2,336

 

1,773

 

–869

 

–773

Change in inventories

 

–3,056

 

–1,856

 

–2,688

 

–1,219

 

–368

 

–637

Change in receivables

 

–1,333

 

–942

 

–1,130

 

–555

 

–203

 

–387

Change in liabilities

 

815

 

2,244

 

1,100

 

2,092

 

–285

 

152

Change in other provisions

 

369

 

1,554

 

382

 

1,455

 

–13

 

99

Cash flows from operating activities

 

10,799

 

15,662

 

8,7713

 

13,6753

 

2,028

 

1,987

Cash flows from investing activities

 

–19,710

 

–13,474

 

–11,450

 

–6,550

 

–8,260

 

–6,924

of which: acquisition of
              property, plant and
              equipment

 

–6,883

 

–4,638

 

–6,762

 

–4,555

 

–121

 

–83

capitalized development costs

 

–2,216

 

–1,446

 

–2,216

 

–1,446

 

 

change in leasing and rental assets (excluding depreciation)

 

–3,055

 

–2,763

 

–277

 

–80

 

–2,778

 

–2,683

change in financial services receivables

 

–5,053

 

–3,588

 

297

 

251

 

–5,350

 

–3,839

acquisition and disposal of equity investments

 

–2,596

 

–1,224

 

–2,571

 

–869

 

–25

 

–355

Net cash flow

 

–8,911

 

2,188

 

–2,679

 

7,125

 

–6,232

 

–4,937

Change in investments in securities and loans4

 

430

 

–2,338

 

496

 

–2,020

 

–66

 

–318

Cash flows from financing activities

 

8,123

 

787

 

942

 

–4,204

 

7,181

 

4,991

Changes in cash and cash equivalents due to exchange rate changes

 

–113

 

–90

 

–57

 

–81

 

–56

 

–9

Net change in cash and cash equivalents

 

–471

 

547

 

–1,298

 

820

 

827

 

–273

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at Dec. 315

 

9,443

 

9,914

 

7,639

 

8,937

 

1,804

 

977

Securities and loans

 

7,875

 

9,178

 

5,679

 

7,047

 

2,196

 

2,131

Gross liquidity

 

17,318

 

19,092

 

13,318

 

15,984

 

4,000

 

3,108

Total third-party borrowings

 

–69,555

 

–57,992

 

–5,279

 

–2,506

 

–64,276

 

–55,486

Net liquidity

 

–52,237

 

–38,900

 

8,039

 

13,478

 

–60,276

 

–52,378

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