2005-2006 Financial Statements and Management Report

The reduction in other operating income is mainly attributable
to a lower write-up of €23.5 million on the carrying value of an
investment (previous year €51.8 million). The release of special
items with an equity portion in the amount of €7.0 million (previous
year €1.8 million) led to an increase in income. The events described
led to other operating income not relating to the period.
17 WRITEDOWNS ON FINANCIAL ASSETS AND
SECURITIES CLASSED AS OPERATING ASSETS
The writedowns on financial assets include €2.2 million (previous
year €0.7 million) writedowns on affiliated companies and investments.
The treasury stock purchased in fiscal year 2005/2006
was valued at the lower price quoted on the balance sheet date.
The valuation was based on the lower-of-cost-or-market principle
and resulted in an adjustment affecting income in the amount
of €13.9 million.
18 GENERAL ADMINISTRATIVE COSTS
million €
Salaries
Statutory social contributions
Expense for pensions
Expense for other benefits
Total personnel expense
Depreciation/amortization
Other administrative costs
Total
2004/2005
63.1
4.4
85.4
0.0
152.9
23.7
176.3
352.9
2005/2006
92.0
4.8
44.1
0.4
141.3
21.1
184.3
346.7
Overall ThyssenKrupp ag personnel expense is recorded under
the general administrative costs item in accordance with § 275
subsection 3 hgb.
The increase in expenses for salaries is attributable to the
granting of stock appreciation rights and rights under share-based
compensation plans. The value of these rights is carried forward
over time. In the reporting year this led to expense of €19.2 million.
In addition, expenses for special payments, premiums and bonuses
reported under personnel expense increased by €7.8 million.
The reduction in expenses for pensions under general administrative
costs relates in the amount of €37.8 million to the adjustment
in the previous period of the discount rate used to calculate accrued
pension obligations from 6% to 4%.
FINANCIAL STATEMENTS AND MANAGEMENT REPORT Notes 83
ThyssenKrupp ag employed on average 449 (previous year
430) salary earners in the fiscal year. The change is attributable
to various new recruitments.
19 OTHER OPERATING EXPENSE
Other operating expense mainly includes additional expenses in
the form of an allowance for a Groupwide project to promote
research and development activities in the amount of €23.4 million
(previous year €0.0 million) and €3.9 million (previous year €4.6
million) for payroll tax and land tax. Added to this were expenditures
from foreign currency forward contracts and an allocation to special
items with an equity portion (see Note 8).
20 NET INTEREST
million €
Income from loans classified
as financial assets
amount thereof from affiliated companies
Other interest and similar income
amount thereof from affiliated companies
Interest and similar costs
amount thereof from affiliated companies
Total
The reduction in net interest expense in the reporting period
2005/2006 is due to the rise in interest income from financial
investments as well as non-period interest for tax refunds and
interest income of ThyssenKrupp Materials & Services GmbH
which has been merged into ThyssenKrupp ag.
21 EXTRAORDINARY INCOME
2004/2005
44.1
43.7
295.3
256.9
(542.8)
(427.8)
(203.4)
2005/2006
62.5
62.5
404.5
267.0
(629.3)
(496.7)
(162.3)
Extraordinary income from the previous period includes €911.8
million from the impairment charge on the carrying value of RAG
Aktiengesellschaft. Running counter to this was the release of
a provision for risks from investments in the amount of €400.00
million.
In the fiscal year income of €152.6 million was achieved through
the receipt of a break-up fee from the non-realized takeover of
Dofasco.
The merger effective October 01, 2005 of ThyssenKrupp
Materials & Services GmbH into ThyssenKrupp ag led to a merger
loss of €39.7 million which is stated as an extraordinary expense.