TUI Aktiengesellschaft
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Notes on the Profit and Loss Statement

Notes on the Profit and Loss Statement

Accounting and Measurement Notes on the Balance Sheet Notes on the Profit and Loss Statement
     
Other Notes    
     


(18) Geographical breakdown of turnover


Geographical breakdown of turnover

€ ‘000 2007 2006
Germany 321,373 185,391
of which with Group companies (321,288) (183,820)
EU (excl. Germany) 128,903 114,042
of which with Group companies (128,903) (114,042)
Rest of Europe 1,618 2,616
North America 0 945
of which with Group companies (0) (945)
Asia 3,063 705
of which with Group companies (3,063) (705)
  454,957 303,699
     
 



Apart from turnover from renting out aircraft, turnover of € 225.0 million (previous year: € 92.1 million) from renting out container ships, containers and container semi-trailers was carried for a full financial year for the first time. Turnover also rose due to the year-on-year expansion of the aircraft fleet leased by TUI AG and rented out to Group airlines. On the other hand, turnover from renting out Group-owned aircraft was no longer generated following the divestment of the Group-owned fleet to a company of the TUI Travel PLC Group in August 2007.

(19) Other operating income


Other operating income

€ ‘000 2007 2006
Reversal of special non-taxed item 1,137 1,190
Miscellaneous other operating income 2,288,617 970,815
  2,289,754 972,005
     
 



Miscellaneous other operating income rose primarily due to book profits posted in connection with the transfer of TUI participation assets and the sale of aircraft to TUI Travel PLC companies, higher price gains from currency and commodity transactions and higher income from the reversal of impairments of shares in Group companies (write-back of € 200.0 million) and receivables as well as provisions.

(20) Cost of materials


Cost of materials

€ ‘000 2007 2006
Cost of purchased services 190,462 155,386
     
 



The cost of purchased services mainly related to expenses for aircraft lease agreements with third parties and maintenance costs for container ships, included for a full financial year for the first time.

(21) Personnel costs


Personnel costs

€ ’000 2007 2006
Wages and salaries 58,023 53,957
Social security contributions, pension costs and benefits 5,093 21,992
of which pension costs (194) (15,939)
  63,116 75,949
     
 



In the 2007 financial year, pension costs primarily included contributions to the German Mutual Benefit Association for Pension Security. Unchanged under commercial law current pension expenses and the accrued interest on the pension provision for 2007 (totalling € 11.6 million) were immediately offset against an actuarial gain (€ 21.2 million) through profit and loss. The resulting income (€ 9.6 million) was carried under other operating income. In 2006, these expenses had been offset against an actuarial loss of € 4.2 million, resulting in a total expense of € 15.4 million for the additions.

The actuarial gain resulted from the increase in the discount rate of 1.00 percentage point to 5.50% per annum, effected in order to adjust the rate to the increased interest rate level. The actuarial parameters ‘projected future salary increases’, ‘projected future pension increases’ and ‘projected future employee turn­over rate’, however, remained unchanged year-on-year.

(22) Depreciation/ amortisation


Depreciation/amortisation

€ ’000 2007 2006
Amortisation of intangible assets and depreciation of property, plant and equipment 359,317 320,258
of which impairments (1,126) (33,456)
     
 



The increase in depreciation/amortisation was mainly attributable to the depreciation of container ships, containers and container semi-trailers, which were offset for a full year for the first time and therefore rose by € 120.3 million. On the other hand, depreciation/amortisation declined by € 82.9 million due to the sale of the Group-owned aircraft fleet to the TUI Travel PLC Group.

(23) Other operating expenses


Other operating expenses

€ ’000 2007 2006
Miscellaneous other operating expenses 1,867,872 1,556,605
     
 



This item comprised in particular expenses for anticipated losses from derivative financial instruments, losses from the disposal of investments, costs of financial and monetary transactions as well as fees, capital procurement costs, charges and other administrative costs. The increase in miscellaneous other operating costs mainly resulted from higher provisions for anticipated losses from derivative financial instruments.

The expenses incurred for the auditors totalled € 0.8 million for audits of the financial statements, € 2.3 million for other certification or measurement services and € 0.1 million for tax advising services. Foreign partners of the auditors performed other services worth € 3.8 million in connection with the establishment of TUI Travel PLC.

(24) Net income from investments


Net income from investments

€ ‘000 2007 2006
Income from participations 323,565 115,197
of which from Group companies (307,216) (99,967)
Income from profit transfer agreements 381,179 3,623,851
of which from Group companies (381,179) (3,623,851)
Expenses relating to losses taken over - 128,002 - 66,765
of which from Group companies (- 128,002) (- 66,765)
  576,742 3,672,283
     
 



The income from profit transfer agreements included profit transfers from subsidiaries and the related rebilled tax portion as well as income from investments of second-tier subsidiaries.

Income from profit transfer agreements declined substantially year-on-year since the figures for 2006 had comprised income from the transfer of shares in Hapag-Lloyd AG to TUI AG, which was transferred to TUI AG under the profit transfer agreement with Deutsche Flugzeugvermietungs AG which existed until the merger.

Expenses for losses taken over rose due to the termination of profit and loss transfer agreements with German tourism subsidiaries at the end of August 2007 in the frame­work of the realignment of the corporate structure of TUI’s tourism division for the establishment of the TUI Travel PLC Group.

(25) Write-downs of investments


Write-downs of investments included an amount of € 492.2 million relating to Group companies (previous year: € 2,535.8 million). Apart from two write-downs due to distributions, additional write-downs were required for a holding company due to the sale of the shares in companies of TUI’s tourism division; the profit generated in this transaction was transferred to TUI AG under a profit and loss transfer agreement.

(26) Interest result


Interest result

€ ‘000 2007 2006
Income from other securities and long-term loans 1,904 6,695
of which from Group companies (952) (5,906)
Other interest and similar income 93,733 102,091
of which from Group companies (67,754) (83,421)
Interest and similar expenses - 365,722 - 292,016
of which to Group companies (- 121,965) (- 81,881)
  - 270,085 - 183,230
     
 



The deterioration of the negative interest result with Group companies (€ 55.8 million) was mainly attributable to the Group debt which had arisen in the late summer of 2006 due to the transfer of container ships and containers, and for which interest had to be paid for a full calendar year in 2007. In addition, interest expenses to non-Group third parties rose due to an increase in bank and bonded debt and an increase in interest rate levels.

(27) Taxes


Taxes

€ ‘000 2007 2006
Taxes on income - 296 5,074
Other taxes 4,747 - 1,064
  4,451 4,010
     
 



Taxes on income paid in the financial year under review comprised the balance of additions to provisions for trade taxes and foreign income taxes for 2007 and income from the reversal of income tax provisions for prior years.

Expenses and income attributable to other periods

Income of € 721.1 million and expenses of € 317.8 million were attributable to other financial years; for the most part, they were carried under other operating income and expenses. At an income tax rate of 40%, expenses and income attributable to other periods created a calculative income tax burden of € 89.0 million.