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 Annual General Meeting on May 14, 2019 resolved to create authorized capital of up to €179 million, expiring on May 13, 2024, to issue new preferred bearer shares.

The subscribed capital is composed of 295,089,818 no-par value ordinary shares (previous year: 295,089,818) and 206,205,445 no-par value preferred shares (previous year: 206,205,445), and amounts to €1,283,315,873 (previous year: €1,283,315,873).

The capital reserves comprise the share premium totaling €14,225 million (previous year: €14,225 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. No amounts were withdrawn from the capital reserves.

DIVIDENDS AND DIVIDEND 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 prepared in accordance with the German Commercial Code. Based on these annual financial statements of Volkswagen AG, following the transfer of €6,230 million to revenue reserves, net retained profits of  €12,021 million are eligible for distribution. The Board of Management and Supervisory Board will propose to the Annual General Meeting that a total dividend of €4,374 million, i.e. €8.70 per ordinary share and €8.76 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. The remaining net retained profits of €7,647 million will be carried forward to the new fiscal year. The Board of Management and Supervisory Board will propose to the Annual General Meeting to transfer another €7,645 million to revenue reserves.

In fiscal year 2022, based on the resolution of the Annual General Meeting of Volkswagen AG of May 12, 2022, a dividend was distributed, initially of €7.50 per ordinary share and €7.56 per preferred share. At the extraordinary General Meeting of Volkswagen AG on December 16, 2022, it was resolved in connection with the IPO of Porsche AG to adjust the regular dividend resolution by increasing the dividend by €19.06 per ordinary and preferred share (see “Key events” section).

The dividend payments of €257 million included in noncontrolling interests also comprise the dividends (€225 million) arising from the contractual obligations in connection with the IPO of Porsche AG, although these will not be distributed until after the Annual General Meeting of Porsche AG in 2023. Additional disclosures on the IPO of Porsche AG can be found in the “Key events” section.

HYBRID CAPITAL

In February 2022, Volkswagen AG called a hybrid note (maturity: 7 years) with a principal amount of €1,100 million, which had been placed in 2015 via Volkswagen International Finance N.V., Amsterdam/the Netherlands (issuer). Once called, the note had to be classified as debt in accordance with IAS 32, thus reducing the equity and net liquidity of the Volkswagen Group. The hybrid note was redeemed on March 21, 2022.

From the hybrid capital issued on March 28, 2022, Volkswagen AG recorded a cash inflow of €2,250 million less transaction costs of €11 million. In addition, the recognition of deferred taxes led to noncash effects of €3 million. The hybrid capital is to be classified as equity granted.

In November 2022, Volkswagen AG called a hybrid note (maturity: 5.5 years) with a principal amount of €1,500 million, which had been placed in 2017 via Volkswagen International Finance N.V., Amsterdam/the Netherlands (issuer). Once called, the note had to be classified as debt in accordance with IAS 32, thus reducing the equity and net liquidity of the Volkswagen Group. The hybrid note was redeemed on December 14, 2022.

Interest may be accumulated depending on whether a dividend is paid to Volkswagen AG shareholders. Under IAS 32, these hybrid notes must be classified in their entirety as equity. The capital raised was recognized in equity, less a discount and transaction costs and net of deferred taxes. The interest payments payable to the noteholders will be recognized directly in equity. IAS 32 only allows these hybrid notes to be classified as debt once the respective hybrid note is called.

NONCONTROLLING INTERESTS

As of December 31, 2022, noncontrolling interests amounted to €12,950 million (previous year: €1,705 million). Noncontrolling interests are mainly attributable to the Porsche AG Group (see “Key events” section for details) and the TRATON GROUP.

The table below shows summarized financial information of the Porsche AG Group, including amortized goodwill and fair value adjustments, which were determined at the acquisition date:

The table below shows summarized financial information of the TRATON GROUP, including amortized goodwill and fair value adjustments, which were determined at the acquisition date: