"Perspectives 2011" - Sustainability and Annual Report (pdf)

Workforce and work environmentEnvironmental and climate protectionFinancial reviewP Supervisory board’s reportP Consolidated management reportq Consolidated financial statementsp Independent auditor’s reporttSustainable developmentAs a result of a new collective pay agreement forapron controllers and airport fire service employees,provisions were made for phased retirement for theseroles for the first time in 2011. These provisions werealso calculated using Prof. Klaus Heubeck’s 2005 Gguideline tables, assuming monthly payments in ad -vance, at an interest rate of 5.14 percent, and a durationof 15 years. The valuation assumed that thetrend will be for apron controller salaries to rise 5.9 per -cent a year until 2016 and 3.00 percent a year from2017. A salary trend of 2.50 percent per year was as -sumed for fire service employees. Initially, no fluctuationwas taken into account for either of thesegroups.Prof. Heubeck’s 2005 G guideline tables were alsoused to calculate provisions for anniversaries andbenefits. The benefit provisions were based on aninterest rate of 5.05 percent (2010: 5.06 percent)and a salary and pension trend running at 2.00 percent(2010: 2.00 percent). Anniversary provisionswere based on an interest rate of between 4.49 and4.69 percent (2010: between 4.57 and 4.69 percent)and assumed a salary trend of between 2.00 and3.00 percent (2010: 3.00 percent) and a fluctuationof between 3.00 and 10.00 percent (2010: 3.00 percent).Other provisions are carried at anticipated settlementamounts based on prudent and reasonable commercialassessment. Other provisions with terms of morethan one year are discounted at interest rates appropriateto their terms, determined and publishedby Deutsche Bundesbank in accordance with theGerman Regulation on the Discounting of Provisions.The interest rates at which provisions were discountedin 2011 were between 3.75 percent and 4.78,depending on their residual term.Based on a conservative assessment, all foreseeablerisks and losses occurring through to the balancesheetdate – even those emerging between thereporting date and the date of the preparation ofthe consolidated yearend accounts – have been addressed.5. LiabilitiesLiabilities are valuated at their respective settlementamounts. Liabilities for annuity payments are statedat their present values, with a mean interest rate of5.5 percent.6. Deferred taxesDeferred taxes are determined based on differencesbetween the times at which values are measuredfor assets, liabilities, accruals and deferrals in connectionaccounts prepared for tax purposes and accountsprepared for financial reporting purposes. Taxlosses and interest carried forward are taken into accountin the process. Valuations for controlled com -panies are conducted on the basis of the currentcorporate income tax and trade tax rates (plus reunificationtax) for the tax consolidation group. Forcompanies outside the tax consolidation group, theirindividual rates of tax apply. In accordance with theoptions provided by Section 274, Paragraph 1, Sentence2 of the German Commercial Code, deferredtax assets exceeding deferred tax liabilities are notcapitalized. Deferred taxes under Section 306 ofthe German Commercial Code are offset against deferredtaxes under Section 274.7. Currency conversionsForeign-currency receivables and liabilities with a residualterm of less than one year are valuated at themid-market spot rate on the balance-sheet date.All other foreign-currency receivables and liabilitiesare valuated at the conversion rate applicable at theinvoice date or the less favorable of the lower orhigher spot rate on the balance-sheet date.8. Derivative financial instrumentsDerivative financial instruments are valuated individuallyat their market value on the balance-sheet date.The underlying transactions and hedging transactionsare combined in a single unit of valuation if they satisfythe requirements for doing so.137