|
|
|
|
Notes to the consolidated financial statementsBasis of presentation1 Summary of significant accounting policiesConsolidationThe consolidated financial statements include the accounts of ThyssenKrupp Aktiengesellschaft ("ThyssenKrupp AG") and all material controlled entities, collectively the "Group". Included in the Group financial statements are 276 (2002/2003: 299) domestic and 424 (2002/2003: 441) foreign controlled entities that are consolidated. During fiscal year 2003/2004, 27 entities were consolidated for the first time. During the same period, the scope of consolidation was reduced by 91 entities, of which 58 resulted from the internal merging of Group entities. Material equity investments are accounted for using the equity method whenever significant influence can be exerted; this is principally in instances whereby the Group holds between 20% and 50% of the voting rights ("Associated Companies"). All other equity investments are carried on the balance sheet at cost. The Group has 145 (2002/2003: 201) controlled subsidiaries that are not consolidated because their combined influence on the net assets, net income, and net cash flows of the Group is not material. Their net sales amount to 0.4%, their net loss amounts to (0.8)% and their Stockholders' Equity amounts to 0.04% of the Group's respective balances. These non-consolidated subsidiaries are classified as financial assets and are presented under the "Investments in non-consolidated subsidiaries" line item. The Group has 55 (2002/2003: 57) Associated Companies that are accounted for under the equity method. Another 63 (2002/2003: 78) Associated Companies are accounted for under the cost method because their combined results are not material to the Group. Their net income/loss, attributable to the Group, amounts to 0.7% and their Stockholders' Equity amounts to 1.5% of the Group's respective balances. These 63 (2002/2003: 78) Associated Companies are classified as financial assets and are presented under the "Other investments" line item. In consolidating investments in subsidiaries, the purchase price has been allocated to the fair market value of the interest held in the net assets of the consolidated subsidiaries at the time of acquisition. Any excess purchase price is capitalized as goodwill which is tested for impairment at least annually in accordance with the provisions of SFAS 142 "Goodwill and Other Intangible Assets". FIN 46R, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51," provides guidance for determining whether an entity qualifies as a variable interest entity ("VIE") by considering, among other factors, whether the entity lacks sufficient equity or its equity holders lack adequate decision-making ability. If the entity does not qualify as a VIE, then consolidation is based on previously established accounting standards. The Group consolidates VIEs in cases where, as the primary beneficiary, it is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns. For the non-consolidated subsidiaries and Associated Companies accounted for under the equity method, the excess of cost of the stock of those companies over the Group's share of their net assets as of the acquisition date is treated as embedded goodwill and tested for impairment in accordance with APB Opinion 18, "The Equity Method of Accounting for Investments in Common Stock". Similar to consolidated subsidiaries, SFAS 142 requires that goodwill from equity method investments is no longer amortized over its estimated useful life. Subsequent changes to the value of this balance resulting from the Group's share of income or losses including impairment of the embedded goodwill are included in "Income from equity investments" of the consolidated statement of income. Intercompany accounts and transactions have been eliminated. Foreign currency translationTransactions denominated in foreign currencies are translated at the current exchange rate at the time of the transaction and adjusted to the current exchange rate at each balance sheet date; any resulting currency fluctuations are recognized in the statement of income. Financial statements of the foreign subsidiaries included in the Group annual consolidated financial statements where the functional currency is other than the Euro are translated using their functional currency which is generally the respective local currency. The translation is performed using the current rate method, in which balance sheet amounts are translated to the reporting currency using the current exchange rate as of the balance sheet date, while income statement amounts are translated using the annual average exchange rates. Net exchange gains or losses resulting from the translation of foreign financial statements are accumulated and included in "Accumulated other comprehensive income". Non-US companies that manage their sales, purchases and financing substantially in US dollar use the US dollar as their functional currency. Using the functional currency in these cases involves translating non-monetary items such as fixed assets including scheduled depreciation and equity to US dollar using the average exchange rates of the respective year of addition (historical exchange rates). All other balance sheet line items are translated using the exchange rate as of the balance sheet date and all other income statement line items are translated using the annual average exchange rates. The resulting translation differences are included in the consolidated statement of income as "Other operating expenses or income". Thereafter, the US dollar annual financial statements are translated into the reporting currency using the current rate method. The exchange rates of those currencies significant to the Group and located outside the European Economic and Currency Union have developed as follows:
Revenue recognitionSales are generated via the delivery of products, the rendering of services, and from rental and lease agreements. Sales are recognized net of applicable provisions for discounts and allowances, when realized or realizable and earned. This is usually the case when there is clear evidence of an agreement, the risk of ownership has been transferred or the service has been rendered, the price has been agreed upon, and there is adequate assurance that collection will be made. Revenues from contracts with multiple element arrangements, such as those including both products and services, are recognized as each element is earned based on objective evidence of the relative fair value of each element. In addition to the above, a significant portion of the Group's sales (10%) are derived from long-term contracts which are accounted for using the percentage-of-completion method. Such agreements are in the Automotive, Elevator, Technologies and Services segments. Long-term contractsSales and profits from long-term contracts are recognized using the percentage-of-completion method of accounting. Long-term contracts are defined as contracts for which performance will take place over a period of at least 12 months, beginning from the effective date of the contract to the date on which the contract is substantially completed. Contracts where the Group acts in the capacity of general contractor or provides engineering services are also considered to be long-term contracts. The percentage-of-completion is measured by the percentage of costs incurred to date to total estimated cost for each contract after giving effect to the most recent estimates of total cost. All anticipated losses from long-term contracts are recognized in the fiscal year in which such losses are identified. Long-term contracts under the percentage-of-completion method are measured at construction cost plus profits earned based on the percentage of the contract completed. Research and development costsResearch and development costs are expensed as incurred. Earnings per shareBasic earnings per share are computed by dividing the Group's net income by the weighted average number of shares outstanding. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. There were no dilutive securities in the periods presented. Intangible assetsPurchased intangible assets with definite useful lives are capitalized and amortized on a straight-line basis over their estimated useful lives. For identifiable internally developed intangible assets, only the direct external costs incurred in generating these assets are capitalized and amortized on a straight-line basis over their estimated useful life. The Group reviews its intangible assets with definite useful lives for impairment whenever events or changes in circumstances indicate that the carrying amount of its assets may not be recoverable. Costs incurred in connection with the acquisition and self-development of internally used computer software, inclusive of the costs for transforming such software into an operational condition, are capitalized and amortized on a straight-line basis over its estimated useful life, usually 3 to 5 years. Costs incurred during the preliminary stage of internal use computer software projects are expensed as incurred. In accordance with SFAS 142, the Group evaluates goodwill and indefinite lived intangible assets for impairment on an annual basis and between annual test dates if events or changes in circumstances indicate that the asset may be impaired. The adoption of SFAS 142 resulted in a goodwill impairment of €347 million (€338 million net of tax) or €0.66 per share, which has been reported as a change in accounting principle in fiscal year 2001/2002. Based on the Group's annual impairment test, no goodwill impairment charges have been necessary since the adoption of the Standard. Property, plant and equipmentProperty, plant and equipment are valued at acquisition or production cost less accumulated depreciation. Capitalized production costs for internally developed assets include direct material, labor, and allocable material and manufacturing overhead costs. When production activities are performed over an extended period, interest costs incurred during production are capitalized. Administrative costs are capitalized only if such costs are directly related to production. Maintenance and repair costs are expensed as incurred. Costs for activities that lead to the prolongation of useful life or to expand future use capabilities of an asset are capitalized. Property, plant and equipment are primarily depreciated using the straight-line method. Upon sale or retirement, the acquisition or production cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the consolidated statement of income. The following useful lives are used as a basis for calculating depreciation:
LeasesLeases are classified as either capital or operating. Leasing transactions whereby the Group is the lessee and bears all substantial risks and rewards from use of the leased item are accounted for as capital leases. Accordingly, the Group capitalizes the leased asset and records the corresponding lease obligation on the balance sheet. All other leasing agreements entered into by the Group, as a lessee, are accounted for as operating leases whereby the lease payments are expensed as incurred. Leasing transactions whereby the Group is the lessor and transfers substantially all of the benefits and risks incident to the ownership of property, are accounted for as a sale or financing of the leased asset. All other lease agreements entered into by the Group, as a lessor, are accounted for as operating leases whereby the leased asset remains on the Group's balance sheet and is depreciated. Scheduled lease payments are recorded as income when earned. Long-lived asset impairment (including definite-lived intangible assets)The carrying values of long-lived assets such as property, plant and equipment, and purchased intangibles subject to amortization are reviewed for possible impairment whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the carrying amount of any long-lived asset may be impaired, an evaluation of recoverability would be performed whereby the estimated future undiscounted cash flows associated with the asset would be compared to the asset's carrying amount to determine if a write-down to fair value is required. The remaining useful life of the asset is evaluated accordingly. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value. Inventories other than percentage-of-completion contractsIn the 4th quarter of fiscal year 2003/2004, the Group changed its method of valuing similar inventories from the last-in, first-out method (LIFO) to the average cost method. This change has the greatest impact on the Steel segment and less impact on the other segments. The change to the new valuation method is preferable as it provides comparability with major competitors in the Steel industry as well as creates consistency of the valuation method used for similar inventories within the Group. In accordance with APB 20 "Accounting Changes", the change from the LIFO method has been applied retrospectively by adjusting all prior periods presented in the income statement (see Note 4). Inventories are stated at the lower of acquisition/manufacturing cost or market. The elements of costs include direct material, labor and allocable material and manufacturing overhead. ReceivablesReceivables are stated at net realizable value. If receivables are uncollectible or deemed uncollectible, bad debt expense and a corresponding allowance for doubtful accounts is recorded. Receivables that do not bear interest or bear below market interest rates and have an expected term of more than one year are discounted with the discount subsequently amortized to interest income over the term of the receivable. The Group sells undivided interests in certain trade accounts and notes receivable both on an ongoing and one-time basis to qualifying special purpose entities or other lending institutions. Financial assets sold under these arrangements are excluded from accounts receivable in the Group's balance sheet at the time of sale. Cash and cash equivalentsCash and cash equivalents comprise cash on hand, checks, deposits with national banks, as well as other bank deposits with an original maturity of three months or less. Marketable securitiesAll marketable securities in which the Group invests are classified as available-for-sale and valued at market prices as of the balance sheet date. Any unrealized gains and losses, net of deferred income taxes, are reported as a component of the "Accumulated other comprehensive income" line item within equity. An other than temporary loss of value in an available-for-sale security is realized in the statement of income and a new cost basis for the security is established. Deferred income taxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities reflect both net loss carry forwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred taxes are measured using the currently enacted tax rates in effect during the years in which the temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax law is recognized in the period that the law is enacted. Deferred tax assets, net of valuation allowances, are recognized only to the extent that it is more likely than not that the related tax benefits will be realized. Accumulated other comprehensive incomeAccumulated other comprehensive income includes changes in the equity of the Group that were not recognized in the income statement of the period, except those resulting from investments by owners and distributions to owners. Accumulated other comprehensive income includes foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities and on derivative financial instruments, as well as additional pension liabilities not yet recognized as net periodic pension cost. Accrued pension and similar obligationsAccrued pension obligations as well as provisions for health care obligations are valued according to the actuarial projected benefit obligation method (or "projected unit credit method"). Plan assets and pension obligations are measured as of June 30 of each year ("early measurement"). For some pension obligations, an additional minimum pension liability exists. A portion of the additional minimum pension liability is offset by an intangible asset to the extent of unrecognized prior service cost with the remainder charged against Stockholders' Equity. Unrecognized prior service cost results from a net transition obligation of the former Thyssen companies. Unrecognized gains and losses are generally amortized over no more than the average remaining service lives or the average remaining life expectancies of the employees entitled to receive benefits. Other accrued liabilitiesLiabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Recoveries from third parties that are probable of realization, are separately recorded, and are not offset against the related accrued liability. Provisions for contingent losses are calculated using full production cost. Provisions for product warranties depend on the type of goods sold. In the case of single-item production the provisions are calculated for each product using the full production costs. An accrued liability will be recognized only if it is probable that a claim will be asserted. By contrast, the provisions for product warranties in serial or large-scale production entities are calculated using a percentage of total sales or are based on average historical payments from past claims. If possible, risks from product liabilities (product defect) are covered by insurance contracts. For all other cases an accrued liability is recognized. Asset retirement obligations are legal obligations that arise from the retirement of tangible long-lived assets and are accounted for in accordance with SFAS 143 "Accounting for Asset Retirement Obligations". SFAS 143 requires the Group to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. This fair value is generally determined based upon estimates of future cash flows discounted using a credit adjusted risk free interest rate. The additional carrying amount is depreciated over the remaining useful life of the asset. The obligation is accreted at the end of each period through charges to operating expense. Stock-based compensationThe Group accounts for its stock-based management incentive plans under FASB Interpretation No. 28 "Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans - an interpretation of APB Opinions No. 15 and 25". Accordingly, a pro-rata liability is accrued for the stock appreciation rights/stock rights issued, reflecting the estimated intrinsic value of the stock appreciation rights/stock rights as of the measurement date. Pursuant to SFAS 123 "Accounting for Stock-Based Compensation" incentive plans with settlement in cash are accounted for using the intrinsic value method for calculating the compensation expense prior to the settlement of the award. Therefore the amounts recognized according to APB 25 / FIN 28 are the same as those amounts that would be recognized under SFAS 123. As a result, no pro forma information is provided. Financial instrumentsIn accordance with SFAS 133 "Accounting for Derivative Instruments and Hedging Activities" all derivative financial instruments are recorded at fair value as either assets or liabilities on the balance sheet. This standard also requires the accounting for derivative financial instruments that are embedded within other contractual agreements. In general, the Group recognizes the changes in fair value of all derivative financial instruments directly in earnings. However, the Group records the changes in fair value of foreign currency derivatives used to hedge anticipated foreign currency denominated cash flows on firm commitments and forecasted transactions in accumulated other comprehensive income on the balance sheet when the requirements of the standard to apply cash flow hedge accounting are met. The reclassification from accumulated other comprehensive income into earnings occurs in the same period as the underlying transaction affects earnings. The fair value changes that are due to time value changes when measuring the effectiveness between the underlying hedged transaction and the hedging instrument are considered the ineffective portion of the hedge and are recognized in earnings immediately. The fair value changes of interest rate derivatives designated to hedge long-term liabilities subject to interest rate fluctuations are also recognized in accumulated other comprehensive income if they meet the requirements to apply cash flow hedge accounting. These amounts in other comprehensive income will be offset against related asset or liability accounts in the future as fair values fluctuate. When the cash flow hedging model is applied, changes in market rates will not impact future interest expense positions. Disposal Groups and Discontinued OperationsThe Group reports as a disposal group long-lived assets that will be disposed of by sale together with other assets and liabilities in a single transaction, which collectively meet the held for sale criteria of SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". The Group reports the assets and liabilities of a disposal group separately in the balance sheet line items "assets held for sale" and "liabilities associated with assets held for sale", respectively. Unless a disposal group qualifies for discontinued operations reporting, the revenues and expenses of the disposal group remain within continuing operations until the date of disposal. The Group reports the results of a disposal group that also qualifies as a component of the Group as discontinued operations if its cash flows can be clearly distinguished operationally and for financial reporting purposes from the rest of the Group and the Group does not have significant continuing involvement with the component subsequent to its disposal. The Group reports the results of discontinued operations in the period in which they occur separately within the consolidated statement of income as "discontinued operations (net of tax)". All prior period consolidated statements of income are adjusted to report the results of the component within discontinued operations. Financial statement classificationCertain line items in the consolidated statement of income and on the consolidated balance sheet have been combined. These items are disclosed separately in the Notes to the consolidated financial statements. Certain reclassifications have been made to the prior years presentations to conform to that of the current year. The consolidated statements of income and the consolidated balance sheets are presented in accordance with the 4th and 7th directive of the EU. Additional disclosures required by US GAAP are included in the Notes to the consolidated financial statements. Use of estimatesThe preparation of the Group consolidated financial statements requires Management to make estimates and assumptions that affect the reported carrying amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the amounts of revenues and expenses recognized during the reporting period. Actual results could differ from those estimates. New accounting pronouncementsRecently adopted accounting standards In December 2003, the FASB issued SFAS 132 (revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits". The standard requires that companies provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information on an annual basis. In addition, companies are required to report the various elements of pension and other postretirement benefit costs on a quarterly basis. The guidance is effective for fiscal years ending after December 15, 2003, and for quarters beginning after December 15, 2003. The Group adopted the standard in the second quarter of 2003/2004 and has disclosed the required information. In December 2003, the US government passed the Medicare Prescription Drug, Improvement and Modernization Act (the "Act") into law. The law provides for a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the benefit established by the law. The economic effects of the Act have been recognized in accordance with FASB Staff Position (FSP FAS) 106-2 in the 4th quarter ending September 30, 2004 (see Note 20). In December 2003, the SEC published Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition". This SAB updates portions of the SEC staff's interpretive guidance provided in SAB 101. SAB 104 deletes interpretive material no longer necessary, and conforms the interpretive material retained, because of pronouncements issued by the FASB's EITF on various revenue recognition topics. The adoption of SAB 104 did not have a material impact on the results of operation or the financial position of the Group. In March 2004, the Emerging Issues Task Force (EITF) reached a consensus on EITF 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments". EITF 03-1 addresses the meaning of other-than-temporary impairment and its application to investments in debt and equity securities accounted for under SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities", and to investments in equity securities accounted for using the cost method. The consensus reached in March 2004 requires certain disclosures regarding unrealized losses related to investments within the scope of EITF 03-1. EITF 03-1 also requires certain disclosures regarding cost method investments when the fair values of such investments are not currently estimable. The recognition and measurement provisions of EITF 03-1 have been deferred until additional guidance is issued which are not expected to have a material impact on the results of operation or the financial position of the Group. 2 Acquisitions and divestituresDuring the fiscal years 2003/2004 and 2002/2003 the Group completed the following transactions: Year ending September 30, 2004 On October 01, 2003, ThyssenKrupp finalized the acquisition of 75% of the common stock and voting rights of the Korean Dongyang group in the Elevator segment for a final purchase price of €125 million (preliminary €128 million). The purchase agreement includes a call option and a put option for the remaining 25% interest. Both options are exercisable between the fourth and the nineth year after closing. In addition, the call option is exercisable earlier if certain events that are defined in the contract occur. Dongyang is the second largest elevator producer and provider of elevator related services in South Korea and with the acquisition ThyssenKrupp Elevator will strengthen its position in the Asian market as South Korea is the third largest elevator market in Asia. The results of these operations have been included in the consolidated financial statements since October 01, 2003. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
Substantially all of the intangible assets were assigned to service contracts which are subject to amortization and have a weighted average useful life of approximately 15 years. The final purchase price allocation resulted in goodwill of €130 million (preliminary €121 million) which has been assigned entirely to the acquired companies. No goodwill is deductible for tax purposes. On November 17, 2003, ThyssenKrupp acquired 60% of Mercedes-Benz Lenkungen (MB Lenk) in the Automotive segment at a purchase price of €43 million. The purchase agreement includes a put option and a call option for the remaining 40% interest. The put option is exercisable between two and five years from the purchase date and the call option is exercisable between three and six years from the purchase date. MB Lenk manufactures steering gears and with the acquisition ThyssenKrupp Automotive becomes a global supplier of complete steering systems. The results of these operations have been included in the consolidated financial statements since December 01, 2003. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
The final purchase price allocation resulted in goodwill of €6 million (preliminary €8 million) which has been assigned entirely to the acquired companies. No goodwill is deductible for tax purposes. Year ending September 30, 2003 On April 01, 2003, ThyssenKrupp acquired 100% of the shares of Tepper Aufzüge GmbH & Co. KG, located in Münster, Germany ("Tepper"), in the Elevator segment, for a purchase price of €42 million, paid in cash. Tepper is a manufacturer and service provider for elevators and with the acquisition ThyssenKrupp will strengthen its market position in Germany. The results of these operations have been included in the consolidated financial statements since April 01, 2003. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
Substantially all of the intangible assets were assigned to service contracts which are subject to amortization and have a weighted average useful life of approximately 25 years. The final purchase price allocation resulted in goodwill of €21 million (preliminary €16 million) which has been assigned entirely to the acquired company. No goodwill is deductible for tax purposes. On April 01, 2003, ThyssenKrupp acquired the remaining 75.5% of the shares of Galmed in the Steel segment for €51 million. The acquisition of the hot dip galvanizer, located in Sagunto (Spain), brings the Group's ownership percentage to 100%. ThyssenKrupp believes that full ownership will give it direct access to the high-growth Spanish automobile market and the acquisition is a further step in the strategy of internationalizing the downstream activities. The results of Galmed have been included in the consolidated financial statements since April 01, 2003. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
The final purchase price allocation resulted in goodwill of €9 million which has been assigned entirely to the acquired company. No goodwill is deductible for tax purposes. On July 25, 2003, ThyssenKrupp acquired 100% of the shares of Sofedit S.A., located in Versailles, France ("Sofedit"), in the Automotive segment, for a purchase price of €66 million consisting of €14 million in cash and the assumption of debt of €52 million. Sofedit produces automotive stampings and assemblies as well as chassis, body and cockpit modules in France, Brazil, Poland and Spain. The acquisition will strengthen ThyssenKrupp Automotive's leading positions in the Body and Chassis businesses. The results of these operations have been included in the consolidated financial statements since July 01, 2003. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
Substantially all of the intangible assets were assigned to software which is subject to amortization and have a weighted average useful life of approximately 7 years.The final purchase price allocation resulted in goodwill of €7 million (preliminary €12 million) which has been assigned entirely to the acquired companies. No goodwill is deductible for tax purposes. On August 31, 2003, the ThyssenKrupp finalized the sale of the formwork and scaffolding activities of the business unit Construction Services in the Services segment as part if its portfolio realignment. On the sale the Group realized cash in the amount of €47 million and vendor loans in the value of €28 million. The sale resulted in a loss of €61 million. 3 Discontinued operations and disposal groupsYear ending September 30, 2004 As part of the portfolio optimization program, the Group has sold or has initiated the disposal of several business units and operating groups during the period. In accordance with SFAS 144, these transactions have been classified as discontinued operations and accordingly the results as well as the gain or loss on the disposals of the discontinued operations have been presented separately in the consolidated statements of income in the line item "discontinued operations (net of tax)". Prior periods have been adjusted accordingly. For the entities for which the disposal has not been completed as of September 30, 2004, the assets and liabilities have been disclosed separately in the consolidated balance sheet of the current reporting period as "assets held for sale" and "liabilities associated with assets held for sale". On October 07, 2003, in the Technologies segment, Novoferm was sold. The Group has received €174 million in cash. The disposal did not result in a significant gain or loss. In the September 30, 2003 consolidated balance sheet Novoferm was classified as a disposal group; Novoferm did not qualify for discontinued operations reporting. In March 2004, the business unit Information Services, in the Services segment, was discontinued through the sale of the Triaton group as well as the termination of the other remaining activities within the business unit. The selling price amounted to €249 million, which resulted in a gain before taxes of €191 million. Due to the continuation of service contracts between ThyssenKrupp and Triaton, €64 million of the disposal gain has been deferred and will be recognized rateably over a period of seven years. The Group recognized €6 million of this disposal gain in cost of sales in the Services segment in the 2nd half of fiscal year 2003/2004, which partially offset the cost of services purchased from the former Triaton group during the period. In the 2nd quarter ending March 31, 2004, a gain on the disposal of discontinued operations of €127 million (€125 million net of tax) was realized. The results from discontinued operations are disclosed in the table below. In September 2004, the Services segment initiated the disposal of the operating group Facilities Services which was consumated in October 2004. Facilities Services is a provider of technical and infrastructural facility management as well as building services and commercial property management. In conjunction with the initiated sale, an impairment loss of €34 million was recognized in 2003/2004 to write down the related carrying amounts to their fair values less cost to sell which has been included in cost of sales in the schedule of the Services segment. The following table shows the assets and liabilities of the discontinued operating group Facilities Services:
Results of discontinued operations in the Services segment are as follows:
In September 2004, the Steel segment sold the operating group Berkenhoff. Berkenhoff is a supplier of high-tech nonferrous metal wire used in electrical discharge machining (EDM), electronics, welding and medical engineering. The selling price amounted to €40 million, resulting in a gain before taxes in the amount of €20 million (€20 million net of tax). The results from discontinued operations are disclosed in the table below. As of September 30, 2004, in the Steel segment the disposal of the operating group Krupp Edelstahlprofile (KEP) was initiated and subsequent to year-end consumated. KEP is a producer of crude steel, bar steel, bright steel, wire rod and wire products. In conjunction with the initiated sale, an impairment loss of €21 million was recognized in 2003/2004 to write down the related carrying amounts to their fair values less cost to sell which has been reported in cost of sales in the schedule of the Steel segment. The following table shows the assets and liabilities of the discontinued operating group Krupp Edelstahlprofile:
Results of discontinued operations in the Steel segment are as follows:
The above mentioned "assets held for sale" and "liabilities associated with assets held for sale" as well as the "income/(loss) from discontinued operations" are included in the amounts disclosed in the notes to the consolidated financial statements. Year ending September 30, 2003 Within Mechanical Engineering of the Technologies segment, Novoferm, had been offered for sale as part of the Group's realignment. Novoferm is a supplier of doors, frames and operators for domestic, commercial and industrial use. Novoferm was reported as a "disposal group" in accordance with SFAS 144. Accordingly, the assets and liabilities of the disposal group have been disclosed separately as of September 30, 2003 and have been presesented as "assets held for sale" and "liabilities associated with assets held for sale" in the balance sheet as separate line items. The income statement remains unaffected by the separate presentation. Revenues and expenses were shown as income from continuing operations until the date of the disposal. Novoferm did not qualify as a component of the Group and therefore had not been recorded as a discontinued operation. The following table shows the main assets and liabilities of the disposal group:
The above mentioned "assets held for sale" and "liabilities associated with assets held for sale" are included in the amounts disclosed in the notes to the consolidated financial statements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Download section "Financial Report" (PDF)
Printer friendly version
Send page
top
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
