Notes to the Consolidated Financial Statements
Accounting policies
The Consolidated Financial Statements as of September 30, 2009 are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The Interim Financial Statements and the Interim Management Report have been neither audited nor reviewed.
This interim report is based on the Consolidated Financial Statements as of and for the year ending December 31, 2008. HOCHTIEF elected early application of IFRIC 15 from September 30, 2009 following its endorsement by the EU. IFRIC 15 aims to standardize accounting practice for sales of real estate before construction is complete, specifying criteria by which sales are accounted for under either IAS 11 Construction Contracts or IAS 18 Revenues. The prioryear comparative figures have been restated accordingly. For detailed coverage, please see page 145 of the 2008 Annual Report. Additionally, with effect from September 30, 2009, the discount factor for valuing pension obligations was decreased to 5.25 percent in Germany and 5.85 percent internationally to reflect decreased capital market interest rates (December 31, 2008: 6.25 percent in Germany and 6.34 percent internationally). The rate of increase assumed for pensions in Germany was reduced to 1.75 percent (December, 31, 2008: 2.25 percent). In all other respects, this report has been prepared using the same accounting policies as the 2008 Consolidated Financial Statements. Information on those accounting policies is given in the 2008 Annual Report.
Consolidation changes
Three domestic companies were added to the consolidated group in the first nine months of fiscal 2009. One domestic company has been sold and one has been merged. Internationally, three companies were added to the consolidated group while six foreign companies have been removed.
There has been a net increase of two domestic and nine foreign companies accounted for using the equity method.
The Consolidated Financial Statements as of September 30, 2009 include HOCHTIEF Aktiengesellschaft and a total of 59 domestic and 337 foreign consolidated companies plus 17 domestic and 110 foreign companies accounted for using the equity method.
Own shares
As of September 30, 2009, HOCHTIEF Aktiengesellschaft held a total of 3,455,680 shares of treasury stock. These shares were purchased over the course of fiscal 2008 for the purposes provided for in the resolution of the General Shareholders’ Meeting of May 8, 2008. These shares represent EUR 8,846,541 (4.94 percent) of the Company’s capital stock.
In July 2009, the Company sold 44,073 of its own shares to persons in its employment or in the employment of an affiliate. Of these shares, 22,183 were sold at a price of EUR 10.95 each and 21,890 at a price of EUR 12.95 each. The shares represent EUR 112,827 (0.06 percent) of the Company’s capital stock.
Contingent liabilities
The contingent liabilities relate to liabilities under guarantees and letters of comfort; they have increased since December 31, 2008 by EUR 1,469,000 to EUR 29,110,000.
Segment reporting
Segmental reporting in the HOCHTIEF Group is based on the Group’s divisional operations. The breakdown by divisions and regions mirrors the Group’s internal reporting systems. Detailed information on the various segments making up the HOCHTIEF Group is provided herein in the Interim Management Report.
Related party disclosures
There has been no change in the companies and individuals comprising related parties of HOCHTIEF Aktiengesellschaft and HOCHTIEF Group companies. The information provided in this regard in the notes to the most recent Consolidated Financial Statements therefore continues to apply.
No material transactions were entered into during the period under review between HOCHTIEF Aktiengesellschaft or any HOCHTIEF Group company and any related party or parties having material influence over the results of operations or financial condition of the Company or the Group.