AG Report 2010
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The momentum of trust. Annual Report of Continental Aktiengesellschaft 2010 Contact Data These annual financial statements of Continental Aktiengesellschaft are also available in German. The Annual Report for the Continental Corporation is published in German and English. If you would like to receive copies of any of these reports, please contact: Continental AG, Corporate Communications P.O. Box 169, 30001 Hanover, Germany Phone: +49 511 938-1146 Fax: +49 511 938-1055 E-mail: [email protected] The annual financial statements for the parent company, the Annual Report, and the interim reports are all available on the Internet at: www.continental-corporation.com Publication Data Published by: Continental Aktiengesellschaft, Hanover, Germany The management report of Continental Aktiengesellschaft is combined with the management report of the Continental Corporation in accordance with Section 315 (3) of the German Commercial Code (Handelsgesetz- buch) and published in Continental’s Annual Report for 2010. The annual financial statements and the summarized management report of Continental Aktiengesellschaft for fiscal year 2010 are published in the electronic Federal Gazette (elektronischer Bundesanzeiger). 4 Income Statement 5 Balance Sheet 6 Statement of Changes in Non-Current Assets 6 Notes to the Financial Statements 8 Accounting Policies 10 Notes to the Balance Sheet, Assets 13 Notes to the Balance Sheet, Shareholders’ Equity and Liabilities Continental AG Report 17 Notes to the Income Statement 19 Other Disclosures 35 Independent Auditor’s Report 36 Responsibility Statement in Accordance with Sections 264 (2) and 289 (1) of the German Commercial Code (Handelsgesetzbuch) 37 Other Directorships – The Executive Board 38 Other Directorships – The Supervisory Board C4 Financial Calendar Continental AG Report Continental Aktiengesellschaft Income Statement in € millions See Note 2010 2009 Sales 13 27.6 1,191.1 Cost of sales 26.4 924.3 Gross margin on sales 1.2 266.8 Selling expenses 0.1 91.3 General administrative expenses 60.3 79.0 Other operating income 14 95.1 171.2 Other operating expenses 15 337.9 318.5 Net income from financial activities 16 1,443.5 - 512.7 Result from ordinary activities 1,141.5 - 563.5 Extraordinary result 17 - 2.7 — Income tax expense 18 - 84.0 - 90.5 Net income (PY: Net loss) 1,054.8 - 654.0 Accumulated losses brought forward from the previous year - 993.7 - 339.7 Accumulated profits (PY: Accumulated losses) 61.1 - 993.7 4 Balance Sheet Assets in € millions See Note Dec. 31, 2010 Dec. 31, 2009 Intangible assets 1 6.6 16.3 Property, plant and equipment 1 3.3 3.5 Investments 2 11,075.4 11,108.9 Non-current assets 11,085.3 11,128.7 Inventories 3 0.4 0.8 Receivables and other assets 4 7,019.9 6,103.9 Short-term securities 0.0 332.3 Cash and cash equivalents 5 325.1 201.4 Current assets 7,345.4 6,638.4 Prepaid expenses and deferred charges 6 57.5 89.2 Total assets 18,488.2 17,856.3 Shareholders’ Equity and Liabilities in € millions See Note Dec. 31, 2010 Dec. 31, 2009 Common stock 8 512.0 432.6 Capital reserves 9 4,179.1 3,144.6 Revenue reserves 10 54.7 54.7 Accumulated profits (PY: Accumulated losses) 61.1 - 993.7 Shareholders’ equity 4,806.9 2,638.2 Provisions 11 645.5 696.2 Liabilities 12 13,035.7 14,521.9 Deferred income 0.1 — Total equity and liabilities 18,488.2 17,856.3 5 Continental AG Report Statement of Changes in Non-Current Assets Purchase and Production Costs Adjust- ments in Jan. 1, line with in € millions 2010 BilMoG1 Additions Transfers Disposals Dec. 31, 2010 Concessions, industrial and similar rights and assets, and licenses in such rights and assets 60.4 - 0.6 0.0 1.1 59.9 Prepayments - 0.1 - 0.8 0.0 - 0.7 Intangible assets 60.3 - 1.4 - 1.1 60.6 Land, land rights and buildings including buildings on third-party land 1.1 - - - - 1.1 Technical equipment and machinery 8.6 - 0.1 0.0 0.3 8.4 Other equipment, factory and office equipment 15.5 - 0.6 0.0 1.5 14.6 Advances to suppliers and assets under construction 0.1 - 0.1 0.0 - 0.2 Property, plant and equipment 25.3 - 0.8 - 1.8 24.3 Shares in affiliated companies 10,824.2 - 1,337.8 - 1,335.8 10,826.2 Other long-term equity investments 44.9 - - - 1.2 43.7 Claims from reinsurance policies 58.0 - 58.0 - - - - Assets of Conti Pension Trust e.V. 149.6 - 10.6 - 16.7 143.5 Trust assets for long-term working accounts 0.6 - 0.6 - - - - Long-term securities 38.9 - 2.3 40.7 - - 77.3 Investments 11,116.2 - 60.9 1,389.1 - 1,353.7 11,090.7 - Non-current assets 11,201.8 - 60.9 1,391.3 - 1,356.6 11,175.6 1 As of January 1, 2010. Continental Aktiengesellschaft Notes to the Financial Statements The annual financial statements of Continental Aktien- Carve-out of the tire activities gesellschaft are prepared in accordance with the pro- Due to the transfer of the legally dependent tire subdivi- visions of the German Commercial Code (Handelsge- sion of Continental AG to Continental Reifen Deutsch- setzbuch – HGB) and the supplementary provisions of land GmbH, Hanover, on July 31, 2009, the income the German Stock Corporation Act (Aktiengesetz – statement for fiscal year 2010 is comparable to the AktG). As prescribed by law, the provisions of the income statement of the previous year to a limited German Accounting Law Modernization Act (Bilan- extent only, as sales, the cost of sales and other key zrechtsmodernisierungsgesetz – BilMoG) that took operating expenses in connection with the tire busi- effect on May 29, 2009, were applied for the first time ness operations are no longer included in the income in this fiscal year. If this resulted in changes to the statement. These items were included in the 2009 previous presentation or the previously applied valua- income statement for the period from January 1 to tion methods, Sections 252 (1) No. 6, 265 (1) and 284 July 31, 2009. (2) No. 3 HGB were not applied. Figures for previous years have not been restated. In order to improve the transparency of presentation, we have pooled individual terms of the balance sheet and income statement. These items are listed sepa- rately in the notes. 6 Depreciation, Amortization, and Write-Downs Book Value Jan. 1, 2010 Additions Disposals Dec. 31, 2010 Dec. 31, 2010 Dec. 31, 2009 44.0 11.0 1.0 54.0 5.9 16.4 - - - - 0.7 - 0.1 44.0 11.0 1.0 54.0 6.6 16.3 0.9 - - 0.9 0.2 0.2 6.6 0.4 0.2 6.8 1.6 2.0 14.3 0.5 1.5 13.3 1.3 1.2 - - - - 0.2 0.1 21.8 0.9 1.7 21.0 3.3 3.5 - 8.0 - 8.0 10,818.2 10,824.2 7.3 - - 7.3 36.4 37.6 - - - - - 58.0 - - - - 143.5 149.6 - - - - - 0.6 - - - - 77.3 38.9 7.3 8.0 - 15.3 11,075.4 11,108.9 73.1 19.9 2.7 90.3 11,085.3 11,128.7 7 Continental AG Report Accounting Policies Assets where there are no longer any grounds for permanent Purchased intangible assets are carried at acquisition impairment. Interest-bearing loans are recognized at cost and amortized on a straight-line basis in accor- their nominal value while non-interest-bearing and low dance with the expected useful life. Internally generat- interest loans are discounted to their net present val- ed intangible assets are not capitalized. ue. Property, plant and equipment is measured at acquisi- Raw materials and supplies as well as merchandise tion or production cost minus scheduled depreciation. are measured at acquisition or production cost or at Moveable assets that were acquired before fiscal 2008 the lower fair value. Finished goods and work in are depreciated using the diminishing balanced me- progress are recognized at production cost, whereby thod, while all other assets are depreciated on a production cost includes direct costs and proportio- straight-line basis. Where depreciation is carried out nate material costs, overheads and depreciation. The using the diminishing balance method, a switch is inventory risks resulting from decreased marketability made to the straight-line basis when this results in or excessive storage periods are taken into account by higher depreciation. Diminishing balance depreciation means of appropriate value deductions. Advance takes place at the maximum taxably permissible level. payments are openly deducted from inventories. Low-value asset items with an acquisition cost of less than €1,500 each are fully recognized as an expense Receivables and other assets in domestic currency are in the year of addition. recognized at their nominal account and receivables in foreign currencies are measured using the hedging The expected useful lives of intangible assets and rate, to the extent economically justifiable. All recog- property, plant and equipment are based on the tax nizable individual risks are taken into account by depreciation tables. means of appropriate discounts. Global discounts exist for the general credit risk. Shares in affiliated companies, other long-term equity investments, other loans, long-term securities and Deferred taxes include expected tax payments and trust assets transferred to Continental Pension Trust refunds from temporary differences between the e.V to fund the employee pension plan are carried at commercial and tax values of assets, liabilities and their acquisition costs minus the write-down entailed deferred income and from the use of loss carryfor- by permanent impairment.