2005-2006 Financial Statements and Management Report

Pension and healthcare measures
The fund assets for the financing of pension liabilities are exposed to capital market risks. Pension
obligations are subject to risks from increased life expectancies of beneficiaries and from obligations to
adjust pension amounts on a regular basis. In addition, cost increases for healthcare commitments in
the usa and Canada cannot be ruled out. Furthermore, in some countries there is a risk of significantly
higher payments having to be made to finance pension plans due to increased statutory requirements.
Real estate and environmental protection
The former use and continued ownership of real estate gives rise in particular to risks from contaminated
sites and mining subsidence. ThyssenKrupp counteracts these risks with appropriate preventive measures
and the scheduled fulfillment of remediation obligations. Insofar as the measures cannot be completed
within a fiscal year, we recognize accrued liabilities in the requisite volume.
Rising standards in environmental protection and conservation of resources are also causing increased
expense in other areas. On the other hand, the use of modern plant and equipment reduces charges and
energy costs. In addition, the likelihood of environmental risks being realized is reduced by the growing
number of subsidiaries with certified environmental management systems.
Volatility of steel prices and dependency on the automotive industry
The volatility of steel prices and the dependency on the economic situation in the automotive industry
have a significant influence on the economic development of the Group. However, the broad business
portfolio, both productwise and geographically, has a stabilizing effect.
Volatility on the energy markets
To counter the risk resulting from the continuous rise in electricity and gas prices since the beginning
of 2005, the Group applies a structured procurement system on the electricity market and concludes or
renews long-term gas supply contracts.
Personnel risks
To safeguard and strengthen the competencies and commitment of management personnel within the
Group, ThyssenKrupp will continue to position itself as an attractive employer and strive for long-term
retention of senior executives in the Group. In particular, the creation of perspectives, target group-oriented
mentoring, the early identification and promotion of potential executives and an attractive incentive
system for senior executives are elements of systematic management development.
FINANCIAL STATEMENTS AND MANAGEMENT REPORT Risk report
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THE GROUP HAS ADEQUATE PROVISIONS
FOR RISKS FROM CONTAMINATED
SITES AND MINING SUBSIDENCE.