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Chairmanʼs letter
7
Major events
Interim Group management report
Consolidated interim financial statements
The relevant economic environment for freight transport in Germany improved substantially. The
relevant economic factors were mainly favorable with strong gains in foreign trade figures providing
major support. Production in the manufacturing sector rose noticeably. Above all, however, industries
that depend heavily on exports recorded high double-digit growth figures. Steel production rose
significantly and was driven by higher demand in customer industries and the increasing restocking of
inventories. Although construction activity was initially held back by severe winter weather, it was
subsequently able to almost completely make up for the drop.
Bond markets, especially sovereign bond markets, remain nervous
After ten-year Bunds yielded 3.38 % at the end of 2009, growing uncertainty surrounding the further
development of debt levels of individual states in the Eurozone led to an increased aversion to take on
risk. Developments seen in Greece, in particular, led to a sharp increase in risk premiums and the preparation
of a rescue package assembled by the EU and the International Monetary Fund. A further
rescue package of up to € 750 billion for Eurozone countries facing repayment problems did not bring
lasting calm to the bond markets. Investors still viewed German government bonds as safe haven
investments, which in turn caused the yield on ten-year Bunds to decline to 2.53 % at the beginning of
June 2010. Ten-year Bunds were yielding 2.57 % at the end of the period under review. Against the background
of the ongoing recovery of the global economy and continuing economic stimulus programs,
the corporate bond market was able to assert itself, although this primarily applied to companies with a
good credit-worthiness. We were one of the few companies in this capital market environment to issue
a ten-year bond at favorable conditions.
POLITICAL ENVIRONMENT
Regulatory environment for rail transport
Federal Network Agency declares station price system invalid
With its ruling of December 10, 2009 the Federal Network Agency declared that fees paid for the usage
of DB Station&Service AG’s passenger stations were invalid, and that its ruling would take effect as of
May 1, 2010. DB Station&Service AG filed a protest against the ruling based on the fact that the fees paid
for the usage of passenger stations are the same for all train operating companies (TOCs) and therefore
are not discriminatory. On March 23, 2010 the Higher Administrative Court in Münster ruled in favor of
the motion filed by DB Station&Service AG to postpone the implementation of the Federal Network
Agency’s decision with certain conditions attached. The station pricing system can remain in effect for
the time being as long as certain conditions are met. We are currently engaged in seeking a solution with
the Federal Network Agency.
Federal Network Agency denies regional factor fees
In its declaration of March 5, 2010, which will take effect as of December 12, 2010, the Federal Network
Agency prohibited DB Netz AG from continuing to charge users a regional factor as part of the train-path
pricing system. The Federal Network Agency views the regional factor as being discriminatory as TOCs
are not treated equally on lines with or without regional factors. Furthermore, the Federal Network
Agency has stated that the regional factors do not meet the legal regulatory requirements for transparency.
DB Netz AG filed a protest against the ruling on May 4, 2010. A decision regarding the legality
of the regional factors is therefore still pending. Here again, we are engaged in discussions with the
Federal Network Agency to resolve this issue.