€¦ · Key data of the Hamburg Group I Condensed balance sheet 2007 II Statement of financial performance 2007/Group structure III FOREWORD 01 …

THE FIRSTCONSOLIDATED ACCOUNTSOF A GERMAN FEDERAL STATE

Free and Hanseatic City of HamburgAnnual Report

Key data of the Hamburg Group I

Condensed balance sheet 2007 II

Statement of financial performance 2007 / Group structure III

FOREWORD 01

HAMBURG – A VIBRANT CITY 02

MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT FOR THE 2007 FINANCIAL YEAR 20Financial policy framework 22Economic environment 24

Economic growth 24

Demographic growth 26

Development of the job market 28

Business start-ups 29

Public debt 29

Research and development 30

Business developments and position of the Hamburg Group 30Key events in 2007 30

Net assets and financial position 33

Results of operations 35

Report on post-balance sheet date events 38Risk and opportunity report 38

Risks related to the state of the economy 38

Structural risks 39

Demographic risks 40

Other risks 40

Risk management 42

Opportunities 42

Anticipated developments 43Accounting law modernisation 43

Changes in tax law 44

Outlook 44

CONSOLIDATED FINANCIAL STATEMENTS 2007 46Consolidated balance sheet 48Consolidated statement of financial performance 52Consolidated statement of changes in fixed assets 54Notes on the consolidated financial statements 58

1 General disclosures on the consolidated financial statements 58

2 Consolidation 61

3 Accounting policies 67

4 Notes on the 2007 balance sheet 69

5 Notes on the 2007 statement of financial performance 78

6 Other disclosures 84

ANNUAL FINANCIAL STATEMENTS OF THE CORE ADMINISTRATION 2007 86Balance sheet 88Statement of financial performance 92Statement of changes in fixed assets 94Notes on the annual financial statements 102

1 General disclosures on the annual financial statements 102


3 Notes on the balance sheet 108

4 Notes on the statement of financial performance 127

5 Other mandatory disclosures 134

FURTHER INFORMATION 136Statement of holdings and investments 2007 138Note on the preparation of the annual and consolidated financial statements 153Glossary 154Publishing information 156

IIFree and Hanseatic City of Hamburg Consolidated condensed balance sheet 2007

CONDENSED BALANCE SHEET 2007

OBS* 01. 01.2007in EUR million

56,418

5,777

45,706

4,935

8,022

530

5,720

452

1,320

309

0

64,749

31. 12.2007in EUR million

55,083

5,484

45,730

3,869

10,437

515

7,688

0

2,234

307

—

65,827

ASSETS

A. FIXED ASSETS

I. Intangible fixed assets

II. Tangible fixed assets

III. Long-term financial assets

B. CURRENT ASSETS

I. Inventories and land held for sale

II. Receivables and other assets

III. Securities

IV. Cash-in-hand, central bank balances, bank balances and cheques

C. PREPAID EXPENSES

D. DEFERRED TAX ASSETS

TOTAL ASSETS

OBS* 01. 01.2007in EUR million

2,700

2,202

1,938

243

21

22,753

20,921

58

1,774

36,989

105

64,749

31. 12.2007in EUR million

3,773

2,061

1,802

230

29

22,983

20,016

59

2,908

36,912

98

65,827

EQUITY AND LIABILITIES

A. EQUITY

B. SPECIAL ITEMS

I. Special items for investment grants

II. Special items for contributions and fees

III. Other special items

C. PROVISIONS

I. Provisions for pensions and similar obligations

II. Provisions for repayment obligations and tax provisions

III. Other provisions

D. LIABILITIES

E. DEFERRED INCOME

TOTAL EQUITY AND LIABILITIES

* OBS = Amount on the opening balance sheet

* OBS = Amount on the opening balance sheet

Departments and offices

■ Specialist departments

■ Senate offices

■ District offices

Special areas

■ Self-managed funds

■ Special funds pursuant toSection 26 (2) LHO

Public-sector organisational units

■ State institutions pursuant to Section 15 LHO

■ State enterprises pursuant toSection 26 (1) LHO

■ Special funds pursuant toSection 26 (2) LHO (general special funds and reserves)

■ Public-sector entities

■ Public institutions

■ Public foundations

Private-sector organisational units

■ Corporations

■ Partnerships

IIIFree and Hanseatic City of Hamburg Consolidated statement of financial performance 2007 / Group structure

STATEMENT OF FINANCIAL PERFORMANCE 2007

2007in EUR million

18,897

16,869

2,028

–1,147

881

– 83

798

CORE KEY FIGURES

Total income

Total expenses

RESULT FROM OPERATING ACTIVITIES

FINANCIAL RESULT

RESULT FROM ORDINARY ACTIVITIES

EXTRAORDINARY RESULT / TAXES

NET SURPLUS

GROUP STRUCTURE

CORE ADMINISTRATION SUBSIDIARY ORGANISATIONS, COMPANIES AND EQUITY INVESTMENTS

This Annual Report provides the first complete overview of the busi-ness activities in which the city, its 390 subsidiaries and equity invest -ments are involved. With 89,000 employees, the Hamburg Group isthe largest employer in this centre of commerce and industry.

KEY DATA OF THE HAMBURG GROUP:

IFree and Hanseatic City of Hamburg Key data of the Hamburg Group / Contents

CONTENTS

Key data of the Hamburg Group I

Condensed balance sheet 2007 II

Statement of financial performance 2007 / Group structure III

FOREWORD 01HAMBURG – A VIBRANT CITY 02MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT FOR THE 2007 FINANCIAL YEAR 20CONSOLIDATED FINANCIAL STATEMENTS 2007 46ANNUAL FINANCIAL STATEMENTS OF THE CORE ADMINISTRATION 2007 86FURTHER INFORMATION 136

A detailed fold-out table of contents can be found on the back flap.

TOTAL ASSETS OF EUR 65.8 BILLIONThe Group’s total assets are comparable to those of a medium-sized German DAX-listed company.

EQUITY OF EUR 3.8 BILLIONThe Group’s equity increased by EUR 1.1 billion in 2007.

NET SURPLUS OF EUR 797.5 MILLIONThis positive result reflects the speed at which business in the Hamburg Group is growing.The core administration of this Hanseatic city also closed the financial year with a surplus ofEUR 102.2 million.

01Free and Hanseatic City of Hamburg Foreword

HAMBURG –INSPIRING

THE FUTURE

Dr Michael FreytagMinister of Finance

Ladies and Gentlemen,

Hamburg is the first German federal state to present consolidated accounts for itspublic budget and equity investments. In doing so, the city is expanding its positionas a leader in budget modernisation. It also offers proof that regional administrativebodies which prepare their accounts in accordance with the principles of Germancommercial law can generate a positive result. With equity of EUR 3.8 billion, the»Hamburg Group« is posting a net surplus of EUR 797.5 million for 2007. The city’score budget has avoided incurring new debt and closed the year at an encouragingEUR 102.2 million after write-downs and provisions.

Only an accounting system based on the principles of budget clarity and budget accuracy is capable of maintaining a sustainable financial policy that supports ourlong-term responsibility towards future generations. Hamburg’s consolidated finan-cial statements are part of this policy.

I would like to extend my special thanks to all of my staff whose commitment andexcellent work led to the publication of this Annual Report.Yours,

02Free and Hanseatic City of Hamburg Hamburg – a vibrant city

HAMBURG –A VIBRANTCITY


The future is bright for Hamburg. Not only a port city and a centrefor trade, Hamburg is also a place that offers a high quality of life fora large number of people. Hamburg holds its own against metropol -itan areas worldwide. Growth rates for Hamburg’s economy andpopulation are among the highest in Germany, while the city’ssound finances and business strength provide the backbone for itssuccess. The Senate’s long-term strategy is paying off – Hamburg isgrowing!

Berlin

Saxony

Saxony-Anhalt

Brandenburg

Thuringia

Mecklenburg-W. Pomer.

Bremen

Rhineland-Palatinate

Lower Saxony

Schleswig-Holstein

Saarland


BUDGET CLARITY – BUDGET ACCURACY

Central to the concepts of budget clarity and budget accuracy is the question of whether a federal statecan balance its budget using its own resources or only with external assistance (through equalisation pay-ments by the federal government or inter-state fiscal equalisation payments).

■ Comparative statistics generally obscure the crucial issue whether the budget is consolidated using a state’s own resources or at the expense of others (IFE and FGE payments).

■ A federal state such as Berlin, for example, whose real-world financial position is weak, looks good on paper because it reports a balancedbudget without new borrowings and even with the repayment of existing debt. By contrast, a state with healthy finances such as Hesse isstatistically worse off: its budget is balanced by raising new debt, while the state is also unable to pay back old debt.

■ What the statistics do not show, however, is the fact that Berlin receives EUR 5.8 billion in fiscal equalisation payments from the federalgovernment and other federal states. Berlin’s balanced budget is thus literally taking credit for the work of others. Hesse, on the otherhand, pays EUR 3.2 billion into the inter-state fiscal equalisation programme. This renders it unable to balance its budget from its own resources, forcing it to raise another EUR 746 million or so in new debt.

■ Consequently, the statistics often embody the very opposite of budget clarity and budget accuracy. In the future, the informative value ofbudget statistics will depend on a clear statement as to whether the budget is balanced using the state’s own resources or with externalassistance.

Hamburg managed to balance its budget using its own resources and has not resorted to new debt ornet borrowings despite paying EUR 402 million into the inter-state fiscal equalisation programme.

Hesse

Bavaria

Baden-Württemberg

HamburgNorth-Rhine/Westphalia

Recipient statesDonor states

EUR 3,164 m (– EUR 521)

EUR 2,329 m (–EUR 186)

EUR 2,135 m (–EUR 199)

EUR 402 m (– EUR 228)EUR 101 m (– EUR 6)

IFE and FGE payments receivedTotal (per capita)

IFE payments madeTotal (per capita)

5 states

11 states

TotalEUR 8.1 bn

TotalEUR 22.9 bn

Inter-state fiscal equalisation (IFE) and federal government equalisation (FGE) payments in 2007

EUR 5,827 m (EUR 1,711)

EUR 4,705 m (EUR 1,188)

EUR 2,770 m (EUR 1,143)

EUR 2,671 m (EUR 1,141)

EUR 2,629 m (EUR 1,111)

EUR 2,004 m (EUR 1,051)

EUR 630 m (EUR 950)

EUR 621 m (EUR 252)

EUR 499 m (EUR 153)

EUR 283 m (EUR 100)

EUR 262 m (EUR 62)

A reliable comparison of the federal states’ budgets /budget consolidation must disclose payments bythe federal government and the federal states in a transparent fashion. This occurs all too rarely.


Hamburg’s sound financial policy forms the well-spring of the city’s commercial and industrial vital -ity, enabling it to compete successfully againstother major cities around the world.

SOUND PUBLIC FINANCES –THE BASIS FOR A STRONG LOCATION

Hamburg’s strict consolidation strategyis generating savings of EUR 500 mil-lion per year. The cornerstones of Ham-burg’s budgetary and financial policyare in place: the budget is balanced using the city’s own resources and financed without net new borrowing.The city is also continuing to pay backits existing debt. This balance can onlybe maintained if there are no substan-tial shortfalls in tax revenue as a conse-quence of negative market con ditions.

Hamburg finances its budget using its

own resources and without taking on

further debt. This sets it apart from other

federal states, some of which are only

able to balance their budgets as a result

of receiving billions of euros each year in

aid from the federal government and

other states. As one of the five donor

states, Hamburg pays hundreds of mil-

lions of euros into the inter-state fiscal

equalisation programme every year. In

spite of these obligations, Hamburg bal-

ances its budget without having to resort

to loans.

By employing this sound budgetary

and financial policy, Hamburg is thus

ensur ing sustainability and inter-gener -

ational equity. Indeed, the strength of

the city’s position will continue to grow.

Its policy of no new debt will enable it to

generate sizeable interest savings, thus

providing more room to manoeuvre in

the years to come.


A DYNAMIC HAMBURG –BUSINESS EXPANSION AND A GROWING WORKFORCE

creased by 6.4 per cent from 2004 to

2006. The national average was just

3.8 per cent.

By combining tradition with modern -ity, Hamburg is developing the powerit needs to meet the challenges of thefuture.

As an international port city, Hamburg

is a global player. Between 2001 and

2007, the port’s container handling cap-

acity doubled to 10 million TEU (twenty-

foot equivalent units) and is expected to

double again by 2015. The city is also

one of the top three aviation industry lo-

cations worldwide. The Hamburg metro -

politan area’s aviation cluster is pre -

eminent within Germany. As a hub for

the civil aviation industry, it embodies

Hamburg’s international competitive-

ness and attests to Germany’s claim to

being a centre for leading-edge technol-

ogy and research.

No other federal state in Germany cankeep pace: Hamburg’s economy isbooming.

Hamburg has taken the top position in

the Bertelsmann Foundation’s federal

state rankings on multiple occasions – an

achievement that underlines Hamburg’s

status as a thriving business metropolis.

As an international port city, Hamburg

benefits in particular from the favour able

business framework set up by the

Senate. A policy that has adapted to

changing conditions in the international

exchange of goods from an early stage.

Between 2004 and 2007, Hamburg‘s

population grew by 1.4 per cent, while

the average population of Germany de-

clined by 0.3 per cent. During the same

period, the average number of people in

gainful employment in Hamburg in-

creased at twice the rate seen in other

federal states. Hamburg also scores in

terms of disposable income, which in-


The place for aviationHamburg is the second-largest location for civil aviation in Europe,the third-largest worldwide and a leader in the fields of researchand technology.

A port and logistics metropolisThe Port of Hamburg has doubled its container handling capacityto 10 million containers since 2001. This figure is set to increaseto 20 million containers by 2015.

+1.8millionTEU

INCREASE IN CONTAINERHANDLING

A380HIGH-FLYING


A city with a high quality of lifeWhile Germany’s average population is on the decline, in Hamburgit is on the rise. 1.77 million citizens can testify to Hamburg’sgrowth!

No. 1POPULATION GROWTH

Hamburg – a city of innovationNo other state in Germany has a faster-growing economy – or canboast of being a port city, a media metropolis and a centre forleading-edge research.

RAPIDEXPANSION AND INNOVATION


The capital city for highly skilled, cre-ative people

Between 2004 and 2007, the proportion

of university graduates in the total work-

force was one-third higher than the aver-

age for the rest of Germany. Hamburg

therefore has the most highly-qualified

workforce in Germany.

Hamburg is also a media metropolis,

home to numerous publishing houses,

broadcasting stations, advertising agen-

cies and film producers. These are com-

panies that attract creative people. Ham-

burg’s mix of media, advertising, IT, tele -

com munications and entertainment is

unique in Germany and helps to portray

Hamburg not just as a port city but also

as a magnet for information technology

and innovation. Knowledge transfer and

innovative services, both of which are ac-

tively supported by the city, also dominate

the city’s logistics and technology sector.

State-of-the-art climate protection forHamburg: economy and ecology

Innovation is also a key concept for

state-of-the-art climate protection. In

2007, Hamburg approved a climate pro-

tection plan involving a wide range of

measures.

The city is aiming to reduce its annual

CO2 emissions by two million tonnes per

year by 2012 and by a total of 40 per

cent by 2020.

The individual measures encompass

all of the relevant areas from society

and infrastructure: education, research,

business and industry, buildings and

transport.

TRADITION AND MODERNITY –INNOVATION, EDUCATION AND CLIMATE PROTECTION

TEACHERS FOR BETTER EDUCATION


50%GREEN AREAS AND WATERWAYS

A green metropolis on the waterAlmost half of the city consists of green areas or waterways. Naturereserves account for eight per cent – a figure that puts Hamburg aheadof all other federal states.

NEW

Education has a futureHamburg is focusing on education. By reducing the size of primaryschool classes and employing more teachers, the city is increasingthe long-term quality of both schools and teaching standards.


Outstanding child care facilitiesHamburg already leads all other western federal German states interms of its child care facilities. The number of children in day carefacilities in Hamburg is rising continuously and is expected to reach80,600 in 2010. Compared to 2001, this means some 12,200 morechildren will have access to day care. There will be a general legalentitlement to day care places for children aged two and up fromAugust 2010.

DAYCAREFACILITIESTWO-YEAR-OLDS WELCOMESOON

Easily accessibleHamburg’s wide range of local public transport services attracts agreater number of passengers every year. The U4 underground linewill connect the HafenCity with the city centre from 2011. The sub-urban railway link to the airport in Fuhlsbüttel will open in 2008.With the largest fleet of fuel cell buses in Germany, Hamburg is set-ting an example for climate protection in local public transport.

LOCALPUBLIC TRANSPORTA GREEN LIGHT FOR THE CLIMATE TOO


Budget accuracy and budget clarityare essential prerequisites for a solid,long-term financial policy that takesthe needs of future generations intoaccount.

In keeping with this principle, the Free

and Hanseatic City of Hamburg (FHH)

presented its annual financial statements

in accordance with German commercial

law in August 2007. The first federal state

to do so, Hamburg is leading the way in

the Federal Republic of Germany in terms

of transparency and comparability. FHH

has adopted this new approach since

the traditional cameralistic presentation

of the budget previously in force no

longer satisfies modern controlling re-

quirements. The purely cash-based cam-

eralistic system hides important finan-

cial policy information such as write-

downs and pension provisions. What is

more, this system provides an inadequate

basis for planning and information, does

not reflect all relevant issues, and thus

fails to provide a comprehensive over view

of the economic situation of a regional

administrative body. Gaps in the previ-

ous provision of information also meant

that efficient portfolio management was

not possible within the Hamburg Group.

With the consolidated accounts pre-

sented in this report, Hamburg has com-

pleted the next logical step in the process

of providing a full presentation of its net

assets, financial position and results of

operations. Spun-off functional areas and

equity investments in companies in the

financial statements are also presented.

In so doing, FHH will further increase

the depth of information compared with

the previous annual financial statements

of its core administration, prepared in ac-

cordance with German commercial law.

The claim that only private companies

can manage their businesses on the basis

of Group principles holds therefore no

longer true.

FREE AND HANSEATIC CITY OF HAMBURG –FIRST CONSOLIDATED ACCOUNTS OF A GERMAN FEDERAL STATE


FHH Group

Joint ventures Associatedcompanies

Equity investments

Full consolidationwith minority

interest reported

Proportionate consolidation

No proportionate consolidation

Equity consolidation

Measured at cost

Stake of more than 50 %

Stake of more than 20 % and up to 50 %

Stakeup to 20 %

■ Hamburg Port Authority

■ HHLA Hamburger Hafenund Logistik AG

■ UniversitätsklinikumHamburg-Eppendorf

■ Stadtreinigung Hamburg

■ Hamburger Hochbahn

■ SAGA Siedlungs-Aktien-gesellschaft Hamburg

■ Hamburger Wasser-werke

■ Hochschule für Ange-wandte Wissenschaften

■ HGV Hamburger Gesell-schaft für Vermögens-und Beteiligungs-management

■ Flughafen Hamburg

■ Dataport

■ HSH Nordbank

■ Statistikamt Nord

■ Asklepios Kliniken Hamburg GmbH

■ Eisenbahn Aktien-gesellschaft (AKN)

■ Gesellschaft zur Beseitigung von Sonderabfällen mbH

■ TÜV Hanse GmbH

■ NordwestdeutscheKlassenlotterie

■ Dedalus GmbH

■ Institut für Film und Bild in Wissenschaft und Unterricht

Subsidiaries

Companies(excerpt)

Companies(excerpt)

Companies(excerpt)


HAMBURG’S DIVERSITY –AS SHOWN BY ITS CONSOLIDATED FINANCIAL STATEMENTS

Only consolidated financial state-ments can create transparency overthe entire net assets, financial pos-ition and results of operations of a regional administrative body.

Hamburg has proven that even a re-

gional administrative body is capable of

preparing consolidated financial state-

ments. Its action also fulfils a need: al-

though federal states and local author-

ities cannot be put on a level with com-

panies, since their task structures serve

the public interest, they are undoubt-

edly organised in a similar manner to

corporations.

In recent decades, for example, Ham-

burg’s core administration has increas-

ingly outsourced functions that are not

part of its core sovereign activities so

that these can be executed much more

efficiently and more competitively. Ham-

burg also holds equity investments in

private sector companies. This not only

ensures that the city’s inhabitants are

supplied with services, for example, but

also creates and safeguards jobs while

reinforcing Hamburg’s position as a

centre of commerce and industry. Sam-

ple investments include Hamburg Port

Authority AöR (HPA) and Hamburger

Hafen und Logistik AG (HHLA) – munici-

pal companies that are pivotal to the

success of business development in the

Port of Hamburg. In the field of infra-

structure, Flughafen Hamburg GmbH

(FHG), Landesbetrieb Verkehr and Ham-

burger Hochbahn Aktiengesellschaft are

efficient market players. The IT service

provider Dataport AöR, Sprinkenhof AG,

SAGA Siedlungs Aktiengesellschaft Ham-

burg and the real estate management

company GWG Gesellschaft für Wohnen

und Bauen mbH are a number of spin-

offs and equity investments commis-

sioned by Hamburg to provide the peo-

ple in its metropolitan area with essen-

tial services.

The financial reporting of the HamburgGroup shows the variety and latitudeof the city’s activities.

The new quality of Hamburg’s consoli-

dated balance sheet can be attributed to

the fact that this is the first time that the

entire portfolio of business activities

has been accounted for. In addition to


the core administration with its special-

ist departments and offices, the group

balance sheet include 390 affiliated

subsidiary organisations, equity invest-

ments and shareholdings of the Free

and Hanseatic City of Hamburg. Since

the income and expenses of the equity

investments are also recorded, this

comprehensive overview thus includes

all assets, all liabilities and the actual

surplus or deficit recorded.

Besides the traditional core adminis-tration, a large number of subsidiariesof the Hamburg Group also provideservices for the good of the city.

The consolidated financial statements

provide clarity as to whether certain ser-

vices can be better provided by private

companies on the open market or by

the core administration. In other words:

all things considered, is it worth making

a particular equity investment to achieve

a specific political goal? The same is true

for the origin of funds: should financ ing

come from one’s own or third-party re-

sources? Finally, the accounts make vis-

ible the total sums raised by Hamburg

for its citizens and local businesses. The

consolidated financial state ments show

how Hamburg’s public sector companies

assume responsibility and reveal the

considerable contribution margins they

generate. The scope of services that FHH

keeps in reserve for its citizens and com-

panies in this city is made very clear.

Until now, the Senate and Hamburg

Parliament merely received individual re-

ports on the economic situation of spun-

off subsidiaries and equity investments

or reports on specific issues. While the

statistics on assets collected throughout

Germany that have been published for

many years contain a wealth of informa-

tion, they merely provide a cumulative

list of individual reports. This makes a

comprehensive overview almost impos-

sible, given the complexity of the in-

ternal business relationships.

Based on its total assets, Hamburg asa regional administrative body is com-parable to a medium-sized GermanDAX company.

The consolidated total assets of approxi-

mately EUR 65.8 billion reported in

these 2007 consolidated financial state-

ments are on the same scale as those of

a medium-sized company listed on the

DAX. In preparing the Annual Report,

the Hamburg administration, for which

single-entity financial statements have

been presented since 2006, was com-

bined in the consolidated financial state -

ments with 70 fully consolidated and 11

associated subsidiary organisations. The

statements show consolidated equity of

around EUR 3.8 billion.

Total revenue of the »FHH Group«

amounts to EUR 3.3 billion. Hamburg is

either the direct or indirect employer for

the Group’s workforce of 88,980.


The Free and Hanseatic City of Hamburg Group in comparisonwith the 30 largest DAX-listed German companies

Total assets 2007in EUR million

2,020,000

1,374,294

1,061,149

616,474

400,174

235,466

161,262

145,357

135,094

120,700

91,555

88,997

83,631

79,657

76,452

55,891

46,802

38,074

33,872

27,737

24,955

22,320

14,922

12,335

10,366

9,645

9,612

8,325

6,505

2,964

65,827

Sales 2007in EUR million

30,745

68,731

102,598

25,948

10,221

63,512

6,635

108,897

99,399

62,500

72,448

48,310

42,507

2,185

37,300

32,385

57,951

51,723

64,337

16,619

12,306

22,420

7,057

13,074

10,242

7,125

5,003

10,299

15,508

3,344

3,312

Employees 2007

78,275

87,815

181,207

36,767

2,000

520,112

21,920

329,300

273,902

244,000

430,000

107,539

63,500

2,979

38,634

106,200

95,175

191,350

280,000

149,113

50,485

105,261

30,968

52,307

51,400

61,406

30,000

31,344

55,086

12,033

88,980

DAX COMPANY

1. Deutsche Bank AG

2. E.ON AG

3. Allianz SE

4. Commerzbank AG

5. Hypo Real Estate Holding AG

6. Deutsche Post AG

7. Deutsche Postbank AG

8. Volkswagen AG

9. Daimler AG

10. Deutsche Telekom AG

11. Siemens AG

12. BMW AG

13. RWE AG

14. Deutsche Börse AG

15. Münchener Rück AG

16. Bayer AG

17. BASF SE

18. ThyssenKrupp AG

19. METRO AG

20. Continental AG

21. Linde AG

22. Deutsche Lufthansa AG

23. Merck KGaA

24. Henkel KGaA

25. SAP AG

26. Fresenius Medical Care KGaA

27. Infineon Technologies AG

28. adidas AG

29. MAN AG

30. K & S AG

IN COMPARISON: FHH GROUP


Consolidated financial statements arethe only suitable means of creatingcomparability between different func-tional areas, both within FHH and forother federal states.

In recent decades, the federal govern-

ment, federal states and local author-

ities have spun off functions to inde-

pendent establishments, enterprises and

institutions to a greater or lesser degree.

Besides functions, many assets (and

even liabilities) have also been spun off

to public companies and other institu-

tions in the same period.

The problem with comparing public

budgets on a cameralistic basis today is

that differences in organising the execu-

tion of functions in the federal states

and local authorities are not taken into

account. A comparison is not possible

until all hived-off administrative units

have been included in the analysis (re-

gardless of their legal form), the actual

expenditure on public services has been

calculated and the net assets have been

taken into consideration. Public-sector

accounting merely shows income and

expenses – and only for the direct admin-

istrative area. The actual expenses for

the provision of public services, includ-

ing functional areas that have been spun

off, are thereby omitted.

There is sufficient awareness of the

problem. It arises in discussions about

the fairness of distributions among the

federal states and between the govern-

ment and federal states, for example.

The statistics that serve as a basis for

inter-state fiscal equalisation payments

or for equalisation payments by the fed-

eral government are incomplete and pre -

sent an incorrect picture of the federal

states’ financial position. As one exam-

ple, the total debt and actual total assets

of the regional administrative bodies are

not taken into account. The double-entry

presentation of the actual net assets,

financial position and results of oper-

ations makes this discussion objective.

HAMBURG IS BREAKING NEWGROUND –A PIONEER AMONG FEDERAL STATES


HAMBURG IS AN EFFICIENT SERVICEPROVIDER FOR ITS CITIZENS –AS SHOWN BY ITS SINGLE-ENTITYFINANCIAL STATEMENTS

By preparing annual financial state-ments in accordance with Germancommercial law, Hamburg is follow-ing international trends.

Statements about efficiency can only be

made with any degree of accuracy if it is

known which resources were used to

perform which functions for the citizens

and at what cost. This is why, in add-

ition to public-sector finance and ac-

counting, FHH introduced resource con-

sumption-based accounting for its core

administration when it began double-

entry accounting, and accounts for its

resources each year in its single-entity

financial statements.

Comparisons of equity, fixed assets

or debt from one year to the next reveal

the financial effects of all products and

services produced and rendered by the

city’s administrative bodies and offices

during the financial year. This will enable

Hamburg to find meaningful answers to

the questions »Are we doing the right

things?« and »Are we doing these things

right?«. Each and every citizen of Ham-

burg has a vested interest in safeguard-

ing the future of Hamburg as a business

centre. This future depends to a large

extent on Hamburg’s financial situation,

i.e. its public budget, and inter-genera-

tional equity issues. Hamburg’s financial

statements in accordance with German

commercial law will make the city’s

goods and services and its use of re-

sources transparent.

The focus on resource consumptionwill be supplemented by an analysisof the effects.

At present, German commercial law

(HGB) financial statements and public-

sector accounting and management still

co-exist. Starting in 2010, the budget

planning, controlling and management

for FHH will also be migrated in full to a

system that focuses on the consump-

tion of resources and the effects there -

by achieved. To this end, the Senate has

instigated its »New Hamburg Budget -

ing / New Resource Method« project. In

the future, the anticipated or planned

results and effects will be presented in

the budget. As a result, the quantity,


value and success of the products and

services will be measured on the basis

of the resources used.

The presentation of the budget and

appropriations will be broken down by

products and programmes and supple-

mented by performance-related para -

meters. This will enable Hamburg’s citi-

zens, Parliament and Senate to assess

the business and socio-political impact

of the results of performance. The fact

that the Hamburg Parliament will no

longer approve individual projects, in-

come and expenses for the administra-

tion will create new instruments for

managing scarce resources efficiently

and effectively. The Hamburg Parliament

authorises total expenditure for certain

policy and functional areas (e.g. child

care), making it subject to the achieve-

ment of set targets.

The Senate, Hamburg Parliament and

citizens of Hamburg will then be able to

determine the effect of economic and

finance policy decisions in the double-

entry annual financial statements with-

out needing specialist knowledge.

The people involved in preparing the financial statements and the first Group Annual Report (l-r): Arne Trost, Petra Nickel, Wolfgang Marx,Holger Voß, Julia Sprei, Klaus Riebau, Minister Dr Michael Freytag, Christian Heine, Stefanie Scholz, Birgit Mincke, Karin Seeger, TanjaEhrlich, Olga Ott, Ralf Liesberg, Monika Heitmann

The Annual Report team

MANAGEMENTREPORT ANDGROUP MANAGE- MENT REPORTFOR THE 2007 FINANCIAL YEARFREE ANDHANSEATIC CITYOF HAMBURG

20Free and Hanseatic City of Hamburg Management report and Group management report for the 2007 financial year


Financial policy framework 22

Economic environment 24Economic growth 24

Demographic growth 26

Development of the job market 28

Business start-ups 29

Public debt 29

Research and development 30

Business developments and position of the Hamburg Group 30Key events in 2007 30

Net assets and financial position 33

Results of operations 35

Report on post-balance sheet date events 38

Risk and opportunity report 38Risks related to the state of the economy 38

Structural risks 39

Demographic risks 40

Other risks 40

Risk management 42

Opportunities 42

Anticipated developments 43Accounting law modernisation 43

Changes in tax law 44

Outlook 44


Financial policy framework

In this Annual Report for the 2007 financial year, the Free and Hanseatic City of

Hamburg (FHH) presents the annual financial statements for its core administra-

tion, together with the consolidated opening balance sheet and the first set of con-

solidated financial statements for the entire regional administrative authority.

FHH is thus pursuing a clearly-defined goal in line with the concepts of budget

accuracy and budget clarity, namely: a sound, long-term financial policy that takes

the needs of future generations into account.

The Hamburg Group generated a surplus of EUR 2,028 million from its operating

activities in 2007. The financial result – primarily Hamburg’s interest commitments

and those of its subsidiary organisations – reduced the result from ordinary activ-

ities and the extraordinary result by EUR 1,147 million. Overall, Hamburg posted a

consolidated net surplus of EUR 798 million in 2007.

In the annual financial statements of the core administration, Hamburg reported

a surplus from administrative activities of EUR 931 million in 2007. This surplus was

offset by interest payments on the state’s existing debt. The financial result reported

in the single-entity financial statements consequently reduced the result from ordin-

MANAGEMENT REPORT AND GROUP MANAGEMENT REPORTFOR THE 2007 FINANCIAL YEAR

First set of consolidated financial state-ments for the whole of FHH as a regionaladministrative body

Consolidated net surplus for the Hamburg Group: EUR 798 million

Surplus from administrative activities:EUR 931 million


Net surplus of EUR 102 million in the financial statements of the core adminis-tration

Financial policy objective: to balance the double-entry statement of financialperformance in the next six to ten years

Substantially accelerated reduction of net borrowings

ary administrative activities in 2007 by EUR 829 million. As a result, Hamburg posted

a net surplus for 2007 based on double-entry accounting of EUR 102 million for its

core administration activities.

This amount confirms the surplus for the core administration as forecast for

2007 by the Senate last year. The Senate is thus the first German federal state gov-

ernment to bring its financial policy targets in line with the stringent requirements

of commercial accounting. The aim – while dependent on growth in tax receipts – is

to balance the double-entry statement of financial performance in the next six to

ten years.

This ambitious goal has already been achieved in the 2007 financial year as a re-

sult of sound financial policy and a healthy business environment. Hamburg has

succeeded in generating the depreciation required on its fixed assets. Nevertheless,

the core administration’s 2007 surplus was reduced by a sizeable expenditure of

EUR 988 million on interest and similar expenses.

Given the strong earnings in 2007 and the anticipated restatements of pension

provisions in 2006, it was realistic to forecast a positive statement of financial per-

formance for the 2007 financial year. While earnings in the 2008 financial year are

subject to risks, the Senate will strive to present a break-even statement of financial

performance for this period as well. However, to achieve this goal, the Senate will

need to be systematic in pursuing its successful policy of quality-oriented budget

consolidation and its responsible financial policy.

One significant contribution to the likelihood of its success is the priority that

the Senate has placed on the policy of accelerating the reduction of net borrow-

ings. The core administration put an end to net new borrowing from the start of the

2007 financial year.

Accelerated reduction of net borrowings in line with financial planning 2007 to

2011 (see printed matter 18 / 7392), in EUR million:

2011

350

0

2010

400

0

2009

450

0

2008

350

0

2007

450

0

Net borrowings

Old

New

At the same time, Hamburg also began to reduce the existing debt in its core

budget – currently totalling around EUR 22 billion – at a symbolic rate of EUR 1 mil-

lion per year. In aiming to balance the budget from 2013 without taking out new

loans, the Senate is thus addressing the decision by the Hamburg Parliament to

amend the state budgetary regulations (Landeshaushaltsordnung) much earlier

than expected. By reducing the interest burden, this financial policy will create re-

newed opportunities for taking action in the future and will stimulate both growth

and employment.


Despite these objectives, it is essential not to reduce the interests of the city to

mere accounting variables, thereby losing sight of the people of Hamburg. Ham-

burg is and remains a community committed to social welfare. If the city’s citizens

are viewed as its shareholders, however, then the task in hand is to preserve the

value of the community to suit their needs and those of their children and grand-

children. We need to be able to assess whether our actions today will be a burden

on future generations and recognise where assets are being continuously depleted.

The whole of Hamburg must take on the challenge of ending the depletion of

assets. In adopting accrual accounting and the new consolidated financial account-

ing and reporting, the Free and Hanseatic City of Hamburg is now the first German

state to be equipped with a compass to guide its systematic journey along this

path.

Economic environment

A positive macro-economic environment and the sound economic and financial

policy of the Hamburg Senate not only provide the platform for coping with a grow-

ing number of requirements but also make the city increasingly competitive at the

same time.

Economic growthA characteristic feature of Hamburg as a centre of commerce and industry is the

strong presence of its companies within international markets. Similarly, the FHH

Group’s subsidiaries – including, in particular, Hamburger Hafen und Logistik AG

(HHLA), Flughafen Hamburg GmbH (FHG), HSH Nordbank AG and Hamburger

Hochbahn Aktiengesellschaft (HOCHBAHN) – are not active solely in the Hamburg

metropolitan area or in Germany: they have business relationships spanning both

Europe and the world beyond.

Although the global economy weakened slightly in 2007 following several years

of buoyant growth, it remained robust on the whole. Despite the financial strain

caused by spiralling energy costs, increased volatility on the stock markets and

fluctuations in exchange rates, World Bank estimates show the global economy ex-

panding by 5.2 per cent in 2007 (after adjustment for price increases). Global econ-

omy growth was driven by the sustained boom in China (+ 11.3 per cent) and the

positive trend in Europe (+ 2.7 per cent). However, development was more subdued

in the United States (+ 2.2 per cent).

The extent of the effects of the US sub-prime mortgage crisis became increas-

ingly apparent in the second half of 2007. Particularly the conditions for the provi-

sion of loans and liquidity in the global financial system deteriorated rapidly. The far-

Hamburg – a community committedto social welfare, focusing on the well- being of future generations and thepreservation of assets

Strong ties between Hamburg companiesand international markets

Global economy weaker in 2007 thoughgenerally robust

Financial market crisis continues to burden financial markets and the real economy


reaching consequences of the sub-prime crisis became especially apparent in the

banking sector. In both the USA and Europe, banks that had been involved directly

in sub-prime lending and related products saw their financial performance suffer a

strong downturn. The crisis escalated in 2008 and continues to put a strain on both

the financial markets and the real economy.

Gross domestic product of FHH at historic prices per capita

55,000

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

220

200

180

160

140

120

100

80

60

40

20

0

1970 1980 1990 2000 2007

in EUR

indexed compared to Germany

(GER=100)

Source: Working group »National Accounting of the Federal States«


The German economy continued its strong growth trend in 2007. After adjusting

for price increases, the gross domestic product (GDP) rose by 2.5 per cent year-on-

year, with all areas of the economy contributing to this increase. Impetus for

growth came from both within Germany and abroad. Foreign trade maintained its

strong momentum. Exports rose by 8.3 per cent, once again outstripping imports,

which were up 5.7 per cent in 2007. Companies’ investment activities again proved

to be a growth driver in Germany, posting an increase of 8.4 per cent. Consumer

spending accounted for 0.2 per cent of GDP growth. This effect is attributable

partly to increased government spending on consumption (+ 2.0 per cent) since pri-

vate consumer spending was down around 0.3 per cent year-on-year as a result of

anticipated spending prior to the VAT increase.

Prices in Germany rose by 2.2 per cent in 2007 when compared with 2006. As a

result, the annual inflation rate was much higher than the prior-year figure of

1.7 per cent. This was primarily due to the increase in energy and food prices.

The public deficit was reduced substantially in 2007 and now amounts to 0.2 per

cent of GDP, according to recent calculations by the Federal Statistical Office. The

number of jobs subject to social security contributions increased by 1.9 per cent in

Germany. At the same time, the average annual unemployment rate fell substan-

tially from 2006 to 2007, dropping 1.8 percentage points to 9.0 per cent.

In making its contribution to Germany’s economic growth in 2007, Hamburg not

only recorded higher-than-average growth in economic power, but the highest GDP

per capita of all federal states: Hamburg ranks first with GDP per inhabitant of

EUR 50,557 and gross value added per gainfully employed member of the popula-

tion of EUR 70,880. The nominal year-on-year increase in GDP in 2007 was 4.6 per

cent.

Real economic growth in Hamburg was well above average when compared

with all other federal states. Hamburg’s per capita economic growth in real terms

was also higher than the national average.

Demographic growthHamburg’s population reached 1.77 million in 2007, its highest figure since 1974.

The number of inhabitants rose by 1.4 per cent between 2004 and 2007, the fastest

growth rate of all states in Germany. Hamburg has been especially successful in

attracting highly-qualified, creative people and is expected to achieve a larger

population influx than other federal states in the future.

By 2020, the number of people moving from Hamburg to the six surrounding

districts will fall gradually to 4,500 people per year, from the present figure of

around 6,000. The number of people migrating to Hamburg from the rest of Ger-

many will drop successively from around 11,000 per year to 3,800 until 2020.

It still tends to be the younger age groups who move to Hamburg from other

parts of the country. Within the 16 – 35 age bracket, an average of 11,500 people

German national economic growth in 2007

Year-on-year price increases of 2.2 per cent in Germany in 2007

Hamburg: highest GDP per capita of EUR 50,557 and economic growth well above the national average

1.77 million inhabitants in Hamburg


migrated annually to Hamburg between 2000 and 2002, demonstrating that Ham-

burg is considered an attractive location by this segment of the population.

All in all, there is no doubt that Hamburg is growing steadily. This forecast of

population growth not only implies positive effects for Hamburg’s tax revenues and

the inter-state fiscal equalisation programme: the job market can also look forward

to a growing supply of young, highly-skilled employees.

Population development of FHH 2000 – 2007 and forecast

1,900,000

1,875,000

1,850,000

1,825,000

1,800,000

1,775,000

1,750,000

1,725,000

1,700,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 2015 2020 2025

Persons

Source: Working group »National Accounting of the Federal States«

Hamburg is growing – attracting youngpeople in particular

Forecast


Development of the job marketAs at 31 December 2007, there were 1,085,800 people in gainful employment in

Hamburg, of whom 772,007 were employed in jobs subject to payment of social

security contributions. This is an increase of 2.1 per cent from the previous year (a

2.6 per cent rise in the number subject to payment of social security contributions).

The main increases in recent years have been within the service sector, especially in

the hotel and catering and private household segments. Hamburg’s service sector

developed at a faster pace than that of other federal states. The impact factor from

the number of people employed in the tertiary sector is the second highest after

Berlin.

People in gainful employment and unemployment rate of FHH

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2007

People in gainful employmentin 1,000 persons

Unemploymentrate

2003 2004 2005 2006

Sources: Working group »National Accounting of the Federal States«; statistics of the Federal Labour Agency

Above-average positive growth in the service sector


The unemployment rate in Hamburg was 10.5 per cent in 2007, and thus slightly

higher than the national average.

The number of people in gainful employment rose by 4.0 per cent between 2004

and 2007 (second-highest increase among all the federal states). As a result of its

above-average employment rate (87.6 per cent), Hamburg had more people in work

than any other state in Germany. At 28.9 per cent, Hamburg had also the largest

number of people working in high-growth sectors (employment growth of over 5.0

per cent).

Business start-upsThe number of self-employed people in Hamburg is rising steadily. In recent years,

the number of business start-ups has increased continuously from 17,000 business

registrations in 2003 to 21,918 in 2007. Besides take-overs and company reloca-

tions to Hamburg, around 19,000 of these were new businesses. On the other

hand, 14,890 businesses were deregistered in 2007 and 4,110 companies in Ham-

burg went bankrupt.

Public debtThe capacity for political action is dependent on the degree of financial independ-

ence. Accordingly, the ability of a federal state’s financial policy to cope with future

challenges increases the sooner revenues and fixed expenditures allow leeway for

politically-activated spending.

The level of Hamburg’s public debt jumped considerably in the early 1970s with

the city’s first substantial net borrowings. Borrowing fluctuated significantly in the

1980s and 1990s, though with an unmistakably upward trend. New debt remained

steady at a high level from 1999 onwards. Starting in 2003, it was then scaled back

gradually until no further new loans were taken out in 2007.

Other than in 1977 and 2007, Hamburg made no debt repayments in the entire

period mentioned above. Unsurprisingly, the city’s public debt continued to mount

up. The level of indebtedness doubled for the first time between 1970 and 1975, for

the second time between 1975 and 1985 and for a third and final time between 1985

and 1999. The debt position then stabilised after 2005 and fell slightly to EUR 21.9

billion in 2007.

The long, steady rise in public debt increasingly restricted the city’s options in

terms of its financial policy. The proportion of taxes needing to be spent on interest

payments increased from less than 6 per cent in 1970 to 17 per cent in 1997, and

was still just under 16 per cent in 2001. The interest-to-tax ratio ultimately fell only

as a result of the scaling back of net borrowings, a marked increase in tax receipts

and a lower lending rate. By 2007, the figure was only 12.2 per cent – in spite of the

further rise in interest rates on the capital markets.

No net borrowings in 2007

Employment figures up 4.0 per cent

Ever-increasing number of new business start-ups


Research and developmentThe ongoing restructuring of society as a knowledge community means that the

technological capabilities of the federal states will become increasingly important.

The dynamic development of companies in research- and knowledge-intensive in-

dustry sectors is a key element of this technological restructuring process. Apart

from indicators such as the number of business start-ups and patent registrations,

research and development expenditure also illustrates this process particularly well.

Knowledge-intensive services, which employ as much as one-third of the popula-

tion of Hamburg and Berlin, are already crucial for the technological efficiency of

these city-states. Spending by the Hamburg Ministry of Science and Research on

university education and the promotion of non-university research rose year-on-

year to approximately EUR 869 million in 2007.

Business developments and positionof the Hamburg Group

Key events in 2007Consolidated financial statements (basis of consolidation)

Establishment of subsidiary organisations and companies■ The Hamburger Institut für Berufliche Bildung (HIBB) was founded on 1 January

2007. HIBB was still using public-sector accounting in the 2007 financial year.

Following the presentation of the opening balance sheet as at 1 January 2008,

HIBB will be consolidated as an independent subsidiary from the 2008 financial

year onwards.■ Winterhuder Werkstätten GmbH was established on 18 August 2006. In 2007,

Landesbetrieb Winterhuder Werkstätten was transferred together with its oper-

ating assets to Winterhuder Werkstätten GmbH and the former’s budget was

discontinued. In 2007, FHH held 64.6 per cent of the equity interests directly,

with the other 35.4 per cent being held by Pier Pro Integration Entwicklung und

Rehabilitation Holding GmbH (Pier Holding), which was also founded in 2007.

FHH holds 34.2 per cent of Pier Holding through Berufsförderungswerk GmbH.

In 2008, an additional tranche of FHH interests are scheduled to be transferred

to Pier Holding (94.7 per cent, FHH: 5.3 per cent).■ Landesbetrieb Straßen, Brücken und Gewässer (LSBG) was hived off in 2007,

and included in the Group as a fully consolidated affiliated organisation.■ In February 2007, FHH founded HamburgMusik gGmbH – Elbphilharmonie und

Laeiszhalle Betriebsgesellschaft. Elbphilharmonie Hamburg Bau GmbH & Co. KG

was established in 2007 as the builder-owner of the concert hall. FHH holds a

Dynamic development of companiesin research- and knowledge-intensive industry sectors


joint interest in this company with a new foundation, Stiftung Elbphilharmonie

(95.2 per cent and 4.8 per cent, respectively).■ European ScreeningPort GmbH was formed from a shell company via a memo-

randum of association dated 31 August 2007. FHH holds a 40.9 per cent interest

in this company directly and also indirectly through Centrum für Angewandte

Nanotechnologie GmbH.■ In 2007, FHH acquired an 8.9 per cent holding in Deutsche Einheit Fernstraßen-

planungs- und -bau GmbH (DEGES) as a new shareholder.

Group business transactions in association with HGV Hamburger Gesellschaft für

Vermögens- und Beteiligungsmanagement mbH■ Within the scope of the partial IPO of Hamburger Hafen und Logistik AG (HHLA)

on 2 November 2007, HGV sold 27.1 per cent of HHLA’s share capital through

its wholly-owned subsidiary HHLA-Beteiligungsgesellschaft mbH. Including the

new shares issued via a capital increase, a total of 22 million Class A shares (Port

Logistics subgroup) were offered for sale on the stock exchange (30.3 per cent

of HHLA’s share capital). All unlisted Class S shares (Real Estate subgroup) were

consolidated within HGV.■ SAGA Siedlungs-Aktiengesellschaft will make a phased purchase of 94.9 per

cent of the interests in GWG – Gesellschaft für Wohnen und Bauen mbH from

HGV or its wholly-owned subsidiary GWG-Beteiligungsgesellschaft mbH. The

Hamburg-based SAGA Siedlungs-Aktiengesellschaft had already acquired 5.1 per

cent of the shares by 1 January 2007. A further 13.9 per cent of the interests

were taken over from GWG-Beteiligungsgesellschaft mbH as at 31 December

2007. This tranche included an agreement on majority voting rights in favour of

SAGA Siedlungs-Aktiengesellschaft, which led to the creation of the consoli-

dated VAT group in the SAGA-GWG group.■ At the end of 2007, FHH sold a 24.2 per cent interest in SAGA Siedlungs-Aktien -

gesellschaft to HGV, thereby reducing its direct shareholding to just 62.1 per

cent. Further sales of shares are planned for the coming years.■ In January 2007, HGV sold its 10 per cent stake in Beiersdorf AG (equivalent to

25.2 million shares) by way of a book building process.■ In the spring of 2007, HGV teamed up with several investors from the public

sector and the banking industry to acquire a 10.0 per cent interest in Dedalus

GmbH & Co. KGaA, which indirectly holds 7.5 per cent of the interests (approxi-

mately 61 million shares) in European Aeronautic Defence and Space Company

EADS N.V. The purchase price was EUR 155.5 million.■ HGV sold its 6 per cent shareholding in Daimler Luft- und Raumfahrt Holding AG

(DLRH; formerly DaimlerChrysler Luft- und Raumfahrtholding AG), held through

its wholly-owned subsidiary HGL Hamburgische Luft- und Raumfahrt Beteili-

gungsgesellschaft mbH, at the end of 2007.

Partial IPO of Hamburger Hafen und Logistik AG (HHLA)


■ At the end of December 2007, capital contributed by silent partners at HSH

Nordbank AG to the amount of EUR 326.4 million was converted into equity.

Furthermore, HGV acquired shares to the value of approximately 1 per cent of

the share capital of HSH Nordbank AG from Hamburgischer Versorgungsfonds

AöR (HVF).

Other events■ The former pflegen & wohnen AöR changed its name to f & w fördern und

wohnen AöR as of 1 January 2007. Since 1 November 2005, the »Nursing« busi-

ness unit has been operated by pflegen & wohnen Betriebs-GmbH, a subsidiary

of pflegen & wohnen AöR. Vitanas Hamburg GmbH acquired the sum total of

interests in pflegen & wohnen Betriebs-GmbH with effect from 1 January 2007.

With the »Nursing« area now hived off, all that is left of the institution is the

»Housing« and »Integration Assistance« business units, plus parts of the former

head office.■ A further 25.0 per cent of LBK Hamburg GmbH (Asklepios Kliniken Hamburg

GmbH since 24 April 2007) was transferred to Asklepios Kliniken GmbH as at

1 January 2007.■ Hamburger Hochbahn Aktiengesellschaft has founded BeNEX GmbH to take

over expansion routes. A minority holding of 49 per cent was sold to a private

investor.

Annual financial statements of the core administration (core accounting group)FHH’s core administration employs around 64.9 per cent of the Group’s entire

workforce.

As at 31 December 2007, there were 57,765 people working in the core admin-

istration. There has been a decrease of 4,385 employees working in the city’s spe-

cialist departments and offices and an increase of 3,934 staff at the state enter-

prises, in accordance with Section 26 of the state budgetary regulations. This is

largely a result of the establishment of the state enterprises Hamburger Institut für

Berufliche Bildung (HIBB) and Landesbetrieb für Straßen, Brücken und Gewässer

(LSBG). The privatisation of Landesbetrieb Krankenhäuser, the former state enter-

prise for hospitals, has meant that 1,612 returnees – including 55 returnees from

the former Hamburger Weltwirtschaftsarchiv (HWWA) – needed to be placed on

FHH’s internal job market in 2007.

Since January 2008, FHH has offered all returnees an employment contract in

their current salary group at the end of an individual one-year period. Personnel

expenses incurred for the returnees have been reflected in Hamburg’s budget since

the beginning of January 2008.

Around 64.9 per cent of employees work in the core administration

FHH’s internal job market


Net assets and financial positionConsolidated financial statements (basis of consolidation)Amounting to EUR 65,827 million as at 31 December 2007, consolidated total assets

increased substantially in comparison with the Group’s opening balance sheet

(EUR 64,749 million).

Fixed assets fell slightly to EUR 55,083 million, resulting in a ratio of fixed assets

to total assets of 83.7 per cent (opening balance sheet: 87.1 per cent). Tangible fixed

assets amounted to EUR 45,730 million, while long-term financial assets came to

EUR 3,869 million. Goodwill of EUR 2,830 million was capitalised (opening balance

sheet: EUR 3,120 million). The proportion of fixed assets accounted for by depreci-

ation, amortisation and write-downs was 2.8 per cent.

Current assets increased by 30.1 per cent to EUR 10,437 million when com-

pared with the consolidated opening balance sheet. This was primarily as a result of

receivables rising by EUR 1,968 million and cash and cash equivalents increasing

by EUR 914 million.

Equity rose by EUR 1,073 million to EUR 3,773 million, yielding an equity ratio of

5.7 per cent. Current and non-current debt amounting to EUR 36,912 million (open-

ing balance sheet: EUR 36,989 million) was used to finance assets. The debt ratio

was thus 56.1 per cent.

Net assets and financial position

31. 12. 2007in EUR million

55,083

10,437

307

65,827

3,773

2,061

22,983

29,849

7,063

98

65,827

per cent

83.7

15.8

0.5

100.0

5.7

3.1

35.0

45.3

10.7

0.2

100.0

OBS* 01. 01. 2007in EUR million

56,418

8,022

309

64,749

2,700

2,202

22,753

29,702

7,287

105

64,749

per cent

87.1

12.4

0.5

100.0

4.2

3.4

35.1

45.9

11.2

0.2

100.0

BALANCE SHEET ITEMS

Fixed assets

Current assets

Prepaid expenses

TOTAL ASSETS

Equity

Special items

Provisions

Long-term debt

Short-term debt

Deferred income


Consolidated total assets as at 31 December 2007: EUR 65.83 billion

Consolidated fixed assets as at 31 December 2007: EUR 55.08 billion

Consolidated current assets as at 31 December 2007: EUR 10.44 billion

Consolidated equity as at 31 December 2007: EUR 3.77 billion

OBS = Amount on the opening balance sheet


The FHH Group reported pension provisions totalling EUR 20,016 million. Provi-

sions for pensions and similar obligations in the amount of EUR 904 million were

reversed in the year under review. Pension provisions accounted for 30.4 per cent

of total equity and liabilities.

At EUR 2,967 million, other provisions were EUR 1,134 million higher than on

the opening balance sheet (EUR 1,833 million).

Annual financial statements of the core administration (core accounting group)Total assets amounted to EUR 49,644 million at the reporting date, an increase of

EUR 558 million or 1.0 per cent year-on-year (EUR 49,086 million).

Fixed assets fell slightly to EUR 45,832 million (previous year: EUR 46,004 mil-

lion). These were divided into intangible fixed assets of EUR 3,328 million, tangible

fixed assets of EUR 32,150 million and long-term financial assets of EUR 10,354

million.

Current assets increased by 26.3 per cent year-on-year to EUR 3,534 million.

This rise is attributable to increases of EUR 412 million in receivables and other

assets and of EUR 361 million in cash and cash equivalents.

Equity rose slightly to EUR 2,390 million (previous year: EUR 2,287 million) on

the back of the net surplus, thus yielding an equity ratio of 4.8 per cent.

The sum of EUR 18,067 million was recognised in the core administration’s annual

financial statements for provisions for pensions and similar obligations (previous year:

EUR 18,962 million).

Both credit and interest management and the management of debt and receiv-

ables are carried out centrally by the Ministry of Finance via its asset and invest-

ment management offices.

FHH finances its debt primarily through debentures issued by the state

(EUR 7,342 million as at 31 December 2007) and borrower’s note loans (EUR 14,313

million as of 31 December 2007).

One aspect of the Ministry of Finance’s financial management involves the invest-

ing of cash and cash equivalents to generate interest. Only conservative, largely

short-term forms of investment as overnight money or time deposits are chosen for

this. FHH does not enter into speculative transactions.

Unlike a private company, FHH is a regional administrative body and thus not

subject to the risk of insolvency. For this reason, the core administration of FHH re-

quires no collateral to support its financing projects.

In the process of hiving off subsidiary organisations, FHH took on guarantees

and warranty commitments, a number of which involve liability as the guarantor.

Total guarantees as at 31 December 2007 amounted to around EUR 9.7 billion. Fol-

lowing an assessment of the individual cases, a provision of EUR 20 million was

recognised for the anticipated utilisation of these guarantees.

Pension provisions in the Group as at 31 December 2007: EUR 20.02 billion

Total assets of the core administration asat 31 December 2007: EUR 49.64 billion

Fixed assets of the core administration asat 31 December 2007: EUR 45.83 billion

Current assets of the core administrationas at 31 December 2007: EUR 3.53 billion

Equity of the core administration as at31 December 2007: EUR 2.39 billion

Pension provisions of the core administration as at 31 December 2007:EUR 18.07 billion

No speculative transactions with cash and cash equivalents

Total guarantees as at 31 December 2007:around EUR 9.7 billion


Results of operationsConsolidated financial statements (basis of consolidation)Total income amounted to EUR 18,897 million. The primary items on the income

side are tax income and income similar to taxes of EUR 8,474 million, as well as

other income of EUR 5,085 million. At EUR 2,818 million, most of the other income

is attributable to the reversal of provisions.

External revenue of the Hamburg Group amounted to EUR 3,312 million in the

2007 financial year.

Total expenditure amounted to EUR 16,869 million. The main items are person-

nel expenses of EUR 6,086 million, other expenses of EUR 3,684 million and trans-

fer payments of EUR 3,435 million. Hamburg recorded a net surplus from operating

activities of EUR 2,028 million.

Total income in the Group in 2007: EUR 18.90 billion

The 10 largest subsidiaries based on sales(after consolidation)

Sales 2007in EUR million

531

272

260

254

208

205

196

172

158

47

SUBSIDIARY

SAGA Siedlungs-Aktiengesellschaft Hamburg

Hamburger Hochbahn Aktiengesellschaft

Stadtreinigung Hamburg AöR

Universitätsklinikum Hamburg-Eppendorf – KöR

HSE Hamburger Stadtentwässerung AöR

GWG Gesellschaft für Wohnen und Bauen mbH

Hamburgische Wohnungsbaukreditanstalt AöR

Flughafen Hamburg GmbH

Hamburger Wasserwerke GmbH

Hamburger Messe und Congress GmbH

The sales of the HHLA subsidiaries are not included in this chart. Please see the consolidated financial statements of HHLA.

Total expenditure in the Group in 2007: EUR 16.87 billion


The Group’s average personnel expenses amounted to EUR 68,398 per active

employee. Personnel expenses accounted for 36.1 per cent of the total expenses.

Hamburg posted a net surplus for the FHH Group of EUR 798 million in 2007.

The loss carryforward from the previous year and the appropriation of surplus

through transfers to reserves reduced the consolidated net surplus. The statement

of financial performance therefore closed with a consolidated accumulated deficit

of EUR 896 million. On the whole, however, equity rose in comparison with the pre-

vious year.

Presentation of aggregate income and expenses(consolidated financial statements)


8,474

812

4

3,312

960

42

33

175

5,085

18,897


1,207

6,086

3,435

117

367

1,274

699

3,684

16,869

INCOME

Tax incomeand income similar to taxes

Income from transfer payments

Income from equipment grants

Sales

Fees and similar income

Other own work capitalised

Inventory changes

Rental and lease income

Other income

TOTAL

EXPENSES

Cost of materials

Personnel expenses

Transfer payments

Expenses for equipment grants

Inter-state fiscal equalisation payments

Amortisation, depreciationand write-downs

Rental and lease expenses

Other expenses

TOTAL

Net surplus for the Group in 2007: EUR 798 million


Annual financial statements of the core administration (core accounting group)A favourable economic environment meant that the results of operations of FHH’s

core administration were positive in 2007. Total income amounted to EUR 13,581

million. Tax income constitutes the main item on the income side. Taking the impact

of periodisation into account, this income totals EUR 8,474 million. The main driver

of tax revenues was the nation-wide economic upturn in 2007. This development

prompted a perceptible recovery in the labour market in 2007, resulting in higher

income tax revenues. Hamburg is well ahead of other federal states in terms of

growth in the number of jobs subject to payment of social security contributions.

Income from administrative activities is also generated from fees and contribu-

tions, fines and penalty payments, and fees payable under private law. Total income

from these areas amounted to approximately EUR 873 million.

Apart from income of EUR 812 million from transfer payments, primarily from

the federal government, other income also contributed to the net surplus. Reversal

of provisions and special items are the main constituents of other income.

Notwithstanding the positive result, the cumulative figure of around EUR 9,934

million for operating expenses, expenses for professional services and personnel

expenses remains high and dominates the expenses side. Personnel expenses ac-

counted for 33.5 per cent of total expenditure. Depreciation, amortisation and

write-downs of EUR 564 million and other expenses of EUR 2,152 million (including

additions to provisions for liabilities as well as bad debt allowances) were also

recorded.

FHH posted a surplus from its administrative activities. The city’s income ex-

ceeds current personnel expenses, transfer payments, inter-state fiscal equalisation

payments and other expenses by EUR 931 million. This surplus from administrative

activities is reduced by the financial result. In addition to income from equity invest-

ments, a large proportion of this result consists of interest payments due on exist-

ing debt. As a result, FHH posted a net surplus for the year of EUR 102 million.

Equity rose equal to the amount of this net surplus.

Total income of the core administration: EUR 13.58 billion

FHH posts administrative surplus


Report on post-balance sheet date events

In early 2008, HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsman-

age ment mbH purchased approximately 2 million shares in Norddeutsche Affinerie

AG for around EUR 59 million, thus acquiring a 5 per cent shareholding. The share-

holding was designated as a temporary investment and was sold at a profit at the

beginning of August 2008.

With the aim of developing space in the port area, FHH established Fischerei-

hafenentwicklungsgesellschaft mbH & Co. KG (FEG) and Fischereihafenentwick-

lungsgesellschaft mbH as a personally-liable shareholder of FEG via a memoran-

dum of association dated 9 January 2008.

HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement

mbH has held an interest in Hamburgische Seefahrtsbeteiligung »Albert Ballin«

GmbH & Co. KG and its general partner since May 2008. The company participated

in the bidding process for Hapag-Lloyd AG and concluded the contract of sale for

the purchase of Hapag-Lloyd AG in October 2008. Once the transaction has been

completed as planned in early 2009, Hamburg will hold a 23 per cent indirect stake

in Hapag-Lloyd AG through HGV.

Risk and opportunity report

Risks to the Hamburg budget arise primarily from short and medium-term eco-

nomic fluctuations, as well as from long-term structural and demographic trends.

Risks associated with the state of the economy include changes to tax revenues, in-

terest payments and transfer payments to recipients of social benefits. Changes in

tax law present a significant structural risk for revenues and such changes are thus

a primary source of long-term structural risk. Risks also arise as a result of demo-

graphic changes in society. The following principal risks and opportunities should

be taken into consideration for 2008 and subsequent financial years:

Risks related to the state of the economyLong-term empirical studies reveal that growth in tax revenues in Germany largely

runs parallel to nominal growth in GDP. Notwithstanding this trend, there has been

a marked decrease in income since 2001, both in Hamburg and at a federal level,

attributable in part to changes in tax legislation. Tax receipts were only restored to

the level they attained in 2000 once the economic upturn began in 2005.

On the whole, a slight decrease in total federal tax income can be expected in

the current financial year 2008. Primary drivers for this decrease will be the add-

itional burden imposed by the corporate tax reform and the further drop in contri-

Acquisition of a 5 per cent stake in Norddeutsche Affinerie AG and profitable sale in 2008

Acquisition of a stake in Hapag-Lloydin October 2008

Tax receipts heavily dependent on business cycles

Slight decrease in total federal tax income expected for 2008


butions for unemployment insurance. Lower tax prepayments by companies are an-

ticipated in November and December as a result of the crisis in the financial market

and an economic slowdown in the fourth quarter of 2008.

In addition to tax receipts risks, the amount payable for inter-state fiscal equal-

isation presents a risk that cannot yet be quantified precisely. The amount Hamburg

is required to pay depends to a large extent on tax revenues in other federal states.

Hamburg accounts for the risks to growth in tax receipts as identifiable at the

time of budget preparation through a risk-conscious, conservative estimate of tax

receipts. Risks arising from changes in tax law or anticipated tax refunds are taken

into consideration by making appropriate deductions from total estimated rev-

enues.

The risk of changes in interest rates also depends on the state of the economy.

Since December 2005, the European Central Bank’s key interest rate has risen from

2.25 per cent to 4.25 per cent. Its current value is 3.75 per cent, lowered as a result

of the ongoing financial market crisis. FHH incurred interest expense of around

EUR 988 million in 2007. An increase in the interest rate of one percentage point

would result in an additional charge of between EUR 30 and EUR 50 million per

year. Hamburg counters the risk of rising interest rates with a forward-looking esti-

mate of interest expense in its budget and a borrowing policy that optimises the

cost of credit.

A direct effect of the economic downturn is the increase in government transfer

payments. Expenditure on statutory benefits has risen disproportionately in the last

20 years. As one example, while social security benefit costs were approximately

EUR 668 million in 1988, they had almost doubled by 2007, reaching a sum of

EUR 1,239 million. This is mainly attributable to double-digit rates of increase

between 1988 and 1994. A slight downward trend in the years 1995 to 1999 was

unable to remedy the situation, with further rises in subsequent years leading to the

two-fold increase mentioned above. Changes to benefits legislation (German Social

Code books II and XII), demographic effects and increases in benefits for individual

metropolitan areas (e.g. for day care facilities) are also expected to exacerbate the

burden.

Structural risksIn addition to the risk related to the state of the economy, changes to tax law are

major contributors to structural revenue risks. The corporate tax reform, which came

into force on 1 January 2008, will lead to a substantial drop in tax income for all

regional administrative authorities, at least in the years immediately following its

enactment. The reason for this is the fact that effects stemming from the reduction

of subsidies will be delayed, while the lowering of tax rates will reduce corporate

tax burdens immediately. Hamburg’s share of the financial impact has been esti-

mated at 3 per cent of the revenues received by the federal states and municipal-

Financial market crisis – lower tax prepayments expected in Q4 2008

Risks arising from inter-state fiscal equalisation payments

Risk of interest rate changes

Rising government transfer payments

Risks from changes in tax law


ities. However, since the measures contained in the law overwhelmingly relate to

the types of tax that generate the most revenue for Hamburg – namely corporation

tax, income tax and trade tax – Hamburg’s share of lost tax revenue is likely to stand

at around 4 per cent of the portion received by federal states and municipalities.

This amounts to around EUR 150 million in each case for 2008 and subsequent

years.

Other sources of significant risks include the pending Federal Constitutional

Court ruling on the commuter allowance, the implementation of the Federal Consti-

tutional Court’s ruling on the tax deduction of contributions towards health and

nursing care insurance, ongoing legislative procedures and potential future changes

in tax law, as well as future economic developments. The federal tax assessment

has made allowances for the financial impact of the financial market crisis in its

forecasts for corporation tax and trade tax and has also regionalised the impact for

Hamburg. Ultimately, however, a precise assessment of the exact extent of the

effects on taxation is currently not yet possible.

Demographic risksHamburg’s future expenditure and income will also be influenced by demographic

factors, of which the most significant is an aging population. Although recent stud-

ies rate Hamburg’s demographic trend more positively than that of other regions in

Germany, marked changes in income and expenditure are to be expected. Despite

the fact that the decline in population and in the number in gainful employment is

lower in Hamburg than elsewhere, expenditure will nonetheless be incurred at a

state and local authority level, especially for people over the age of 60 (nursing care,

hospitals). As the average age rises, it is expected that less will be spent on the

under-30s (children’s day care facilities, schools, universities) and more on older

people. Current long-term projections at all levels of government have been slow to

recognise the rapidly-growing costs of an aging society.

Government spending on benefits, pensions, health care and nursing will rise

steadily in the coming years. As things stand, the government has instigated initial

counter-measures only with regard to pensions by reducing pension levels and

increasing the statutory pension age. Yet medical and social care schemes remain

inadequately prepared for demographic change. This is expected to have a negative

effect on the national budget.

Other risksHamburg currently uses a discount rate of 6.0 per cent in reporting its pension pro-

visions in the annual financial statements of the core administration in accordance

with the Tax Code and uniform national regulations. The audit court of the Free and

Hanseatic City of Hamburg commented on the reporting of the pension provisions

in the 2007 Annual Report. It is the opinion of the audit court that a lower discount

Other source of risks include rulings by the Federal Constitutional Court, ongoing legislative procedures and future changes in tax law

Precise assessment of the effects of the financial market crisis on taxation currently impossible

Aging population

Rising costs of an aging society


rate, also accounting for future increases in salaries, would reflect the provisions

for pensions in a more future-proof manner.

If a discount rate of 4.5 per cent were to be used, it would be necessary to restate

the provisions to around EUR 3.45 billion under equity in FHH’s balance sheet.

While FHH’s debt remains largely static, cyclical fluctuations in interest rates on

the capital markets are generating risks in refinancing for repayment of maturing

treasury notes issued by the federal states or borrower’s note loans. These risks are

limited on the basis of regulations imposed by the Hamburg Ministry of Finance.

For example, the proportion of positions with variable interest rates must not exceed

25 per cent of the debt from credit resources. In the event of a 1 per cent increase

in interest rates, the additional cost burden must not exceed 7.5 per cent of the

budget estimate for the interest expense. The interest rate risk is reviewed contin -

uously. Both limits were observed at all times in 2007.

Risks in refinancing for repayment of maturing federal state treasury notes or borrower’s note loans

Pension provisions of FHH as at 31. 12. 2007

25,000

22,500

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

4.0 4.5 5.0 5.5 6.0

Provisionsin EUR million

Interestrate

Interest Provisionrate

4.0% EUR 21,114 million






The liabilities from derivative-influenced credit operations amounted to

EUR 1,714 million. Termination or conversion options are integrated into the credit

agreements.

Risk managementSection 91 (2) of the German Stock Corporation Act (Aktiengesetz) stipulates that

public companies (and other companies as a result of the spill-over effect) are re-

quired to set up a risk early warning system. Whether and to what extent the execu-

tive management boards of FHH’s public sector companies have implemented a

risk management system depends on the nature and size of the company and the

complexity of its structure.

A risk control system connected to the risk management system of FHH’s in-

vestment area is being set up in conformity with the reporting applicable to FHH’s

equity investments in accordance with Section 53 of the German Budget Principles

Act (Haushaltsgrundsätzegesetz). Such a system includes the presentation of pos-

sible losses and likelihood of their occurrence. There are plans to expand the risk

early warning system as part of the modernisation of Hamburg’s budgeting oper -

ations.

The Hamburg Ministry of Finance also intends to review the set of rules gov-

erning internal controls and develop a modernised internal control system on this

basis. Work on this project will commence in 2008 and results are expected for

2009 / 2010.

For information on other risks, especially those resulting from the tax estimate,

inter-state fiscal equalisation and long-term structural budget risks, please consult

the 2009 / 2010 Financial Report presented by the Senate.

OpportunitiesMacro-economic opportunitiesHistorically, Hamburg has benefited from its outstanding geographical location.

The political upheaval caused by the opening of the borders to the east further im-

proved this situation. Continuous expansion of its infrastructure in line with require-

ments has made Hamburg easier to reach by land, air and water and turned it into

an important gateway for European trade: Hamburg is one of the world’s largest

container handling ports for west-east transport routes, especially between Europe

and China. Its leading position is helped in particular by intermodal transport be-

tween waterborne carriers as well as by rail and road business. In north-south trans-

port, Hamburg is gaining in importance through the rise in business volumes in

Scandinavia and the Baltic and is meeting with growing economic interest in this

area.

Hamburg therefore enjoys ideal conditions for safeguarding its status as a trade

metropolis in the long term. Alongside positive development in the service sector,

Modernisation of Hamburg’s budgeting will include expansion of risk early warning system

Hamburg’s favourable geographical location


aviation and other innovative sectors, Hamburg also possesses a prime environ-

ment for ensuring continued long-term growth and rising tax revenue.

Strategic opportunitiesHamburg manages its long-term risks, structural risks and risks dependent on the

state of the economy with an active growth policy aimed at implementing the vision

of »Hamburg – the growing city«. The objectives of this vision, formulated and en-

acted in 2002, include maintaining a continuous influx of population for Hamburg

and achieving faster economic growth than other federal states. Other key goals

seek to develop Hamburg into a city of talented citizens, and one offering a high

quality of life. 2007 also saw Hamburg further strengthening and expanding its

position as an international, competitive business centre. While the economic fore-

casts for the coming years have been revised downwards, the outlook for the city

and its economy is brighter than for other states. Hamburg is receiving significant

numbers of new inhabitants and a large influx of families and young employees.

The city is growing.

Anticipated developments

The Hamburg Group will continue to face considerable challenges in the coming

years and will have to cope with both internal and external change.

Accounting law modernisationThe ministerial bill for the German Accounting Law Modernisation Act (Bilanz rechts -

moder nisierungsgesetz) was passed on 21 May 2008. Parliament is expected to

reach a decision by the end of 2008. With this Act, the largest reform of German

commercial law (HGB) for many years, the government is aiming to develop HGB

accounting into a lasting and equal alternative to International Accounting Stand-

ards that is both more cost-effective and simpler to employ.

The ministerial bill makes it likely that effects on both accounting and the state-

ment of financial performance should be anticipated for corporate planning and

accounting as early as 2009. Areas affected include the measurement of provi-

sions, the recognition of intangible fixed assets, the treatment of existing provi-

sions for expenses and the reporting of deferred taxes in the event of differences

between the financial statements and the tax accounts.

From the Group perspective, basic economic assumptions and the handling of

transition periods should be standardised. Corresponding standards have been

drawn up by the Hamburg Ministry of Finance and submitted in a timely manner to

the investment management offices of the specialist departments.

Population influx, economic growth,a high quality of life and a city of talented citizens

Effects of the Accounting Law Modernisation Act expected as early as 2009

Good conditions for continued long-term growth and rising tax revenues


Changes in tax lawIt is not possible at this moment in time to make a precise statement concerning

the effects on the tax burden of the organisations included in the consolidated

financial statements. This is because the measures contained in the 2008 Corporate

Tax Reform Act (Unternehmensteuerreformgesetz) stand to produce both opposing

(tax rate reductions on the one hand and reduction of subsidies on the other) and

also highly localised effects. It cannot be ruled out, for example, that some FHH

companies may end up with a higher tax burden in absolute terms in spite of the

substantial tax cuts planned. Some will be affected to a considerable degree by the

recently introduced earnings stripping rule or the new regulation of trade tax add-

itions, while others will benefit greatly from the lower tax rates.

OutlookOn account of the ongoing crisis on the financial markets and the risks arising for

the real economy, it is becoming increasingly difficult to estimate future tax re-

ceipts – a government’s most important item of revenue – with any degree of preci-

sion.

Experts are forecasting a considerable slowdown in global economic growth in

2008 and 2009 as a consequence of the continuing crisis in the financial markets.

The IMF, for example, predicts that the global economy will lose significant mo-

mentum and grow by as little as 3.9 per cent this year (previous year: 5 per cent). A

figure of just 3.0 per cent is forecast for next year, the lowest growth rate since

2002.

German industry has become more competitive in recent years, with companies

investing and creating new jobs. The federal government anticipates GDP growth of

1.7 per cent for 2008. However, the economic forecast for 2009 is expected to be

adjusted downwards. The federal government and many research institutes believe

that Germany’s GDP will show only a slight increase of 0.2 per cent. These fore-

casts may have to be revised at short notice.

The persistently high write-downs required on banks’ balance sheets are putting

pressure on markets and companies. As a result of the city’s high degree of inter -

nationalisation, these developments are also taking their toll on Hamburg’s busi-

ness – one example being HSH Nordbank AG. This situation will be addressed by

the German Act on the Implementation of Measures to Stabilise the Financial Mar-

ket (Financial Market Stabilisation Act – Finanzmarktstabilisierungsgesetz), which

was passed by the Bundestag and Bundesrat (Lower and Upper Houses of the Ger-

man Parliament) on 17 October 2008. This Act will help to consolidate the banks

and regenerate the markets in the long term.

Despite the anticipated economic downturn, Hamburg has every opportunity to

compete successfully. It is one of Europe’s most attractive major cities and enjoys a

healthy position when compared with other regions. Risk will need to be mitigated

No precise statement on how the tax burden of the consolidated companies will be affected

Ongoing financial market crisis fuels expectation of major slowdown in global economic growth in 2008 and 2009

Increased difficulties in estimating future tax receipts

Financial Market Stabilisation Act


by taking a homogenous approach to policy and ensuring collaboration between all

departments. This will produce a responsible financial policy that will reconcile in-

come and expenditure. Such a policy involves striking a balance between strength-

ening the forces of growth and consolidating the budget as needed, while reducing

new debt to zero and putting an end to the depletion of assets.

Hamburg, October 2008

A responsible financial policy for Hamburg as one of Europe’s most attractive major cities with a strong competitive position

CONSOLIDATEDFINANCIAL STATEMENTS 2007FREE ANDHANSEATIC CITYOF HAMBURG

46Free and Hanseatic City of Hamburg Consolidated financial statements 2007

47Free and Hanseatic City of Hamburg Consolidated financial statements 2007

Consolidated balance sheet 48Consolidated statement of financial performance 52Consolidated statement of changes in fixed assets 54Notes on the consolidated financial statements 58

1 General disclosures on the consolidated financial statements 58

2 Consolidation 61


4 Notes on the 2007 balance sheet 69

5 Notes on the 2007 statement of financial performance 78

6 Other disclosures 84

Statement of holdings and investments 2007 138Note on the preparation of the annual and consolidated financial statements 153

Totals and subtotals may contain rounding differences.

48Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated balance sheet (assets)

OBS 01. 01. 2007in EUR thsd.

56,417,980

5,776,756

2,388,486

75,510

3,119,898

192,862

45,705,947

36,366,022

3,992,589

807,150

3,311,513

1,228,673

4,935,277

347,376

9,901

3,012,627

1,160,867

37,834

310,960

55,712

8,022,200

252,515

277,681

53,919

195,579

144

28,039

ASSETS

A. FIXED ASSETS


1. Investment grants paid

2. Other intangible fixed assets

3. Goodwill

4. Prepayments


1. Land and buildings

2. Technical equipment and machinery

3. Other equipment, operating and office equipment

4. Works of art, monuments and museum collections

5. Prepayments and assets under construction


1. Shares in affiliated, not fully consolidated organisations

2. Loans to affiliated, not fully consolidated organisations

3. Shares in associated organisations

4. Other equity investments

5. Loans to associated organisationsand to long-term investees and investors

6. Long-term securities

7. Other loans

B. CURRENT ASSETS

I. Land held for sale

II. Inventories

1. Raw materials, consumables and supplies

2. Work in progress

3. Finished goods and merchandise

4. Prepayments

31. 12. 2007in EUR thsd.

55,083,481

5,483,758

2,226,726

60,524

2,830,027

366,481

45,730,245

35,977,566

3,973,717

822,011

3,312,063

1,644,888

3,869,478

406,328

6,783

2,862,018

153,610

33,508

350,665

56,566

10,436,682

150,805

363,797

57,455

284,712

742

20,888

CONSOLIDATED BALANCE SHEET(ASSETS)AS OF 31 DECEMBER 2007

49Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated balance sheet (assets)

ASSETS

III. Receivables and other assets

1. Trade receivables

2. Receivables from affiliated, not fully consolidated organisations and from long-term investees and investors

3. Other assets

4. Receivables from shareholders not included in consolidation

IV. Securities

V. Cash-in-hand, central bank balances, bank balances and cheques

C. PREPAID EXPENSES

I. Discount

II. Other prepaid expenses

D. DEFERRED TAX ASSETS

TOTAL ASSETS


5,719,670

4,513,543

146,310

1,007,351

52,466

452,199

1,320,135

308,691

26,516

282,175

106

64,748,977

31. 12. 2007in EUR thsd.

7,688,038

5,221,630

226,454

2,230,624

9,330

196

2,233,846

306,369

24,709

281,660

0

65,826,532

50Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated balance sheet (equity and liabilities)


A. EQUITY

I. Net account

II. General reserve (revenue / capital reserves)

III. Special-purpose reserves

IV. Adjustment item for minority interests

V. Consolidated accumulated deficit

B. SPECIAL ITEMS




C. PROVISIONS

I. Provisions for pensions and similar obligations

II. Provisions for repayment obligations



2,700,083

2,854,076

1,006,353

5,070

– 315,487

– 849,929

2,202,103

1,938,482

242,717

20,904

22,753,104

20,920,502

58,049

1,774,553

CONSOLIDATED BALANCE SHEET(EQUITY AND LIABILITIES)AS OF 31 DECEMBER 2007

31. 12. 2007in EUR thsd.

3,772,747

2,854,076

1,973,024

34,870

– 193,088

–896,135

2,060,997

1,802,360

229,836

28,801

22,982,980

20,015,595

59,296

2,908,089

51Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated balance sheet (equity and liabilities)


D. LIABILITIES

I. Bonds

II. Liabilities to banks

III. Payments received on account of orders

IV. Trade payables

V. Liabilities to affiliated, not fully consolidated organisationsand to long-term investees and investors

VI. Other liabilities

VII. Liabilities to shareholders

E. DEFERRED INCOME



36,989,038

7,581,509

25,143,946

720,205

1,487,033

46,109

1,616,181

394,055

104,649

64,748,977

31. 12. 2007in EUR thsd.

36,911,611

7,342,529

24,424,820

811,041

1,766,016

273,244

1,894,076

399,885

98,197

65,826,532

52Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated statement of financial performance

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 2007

1. Tax income and income similar to taxes

2. Income from transfer payments

3. Income from equipment grants

4. Sales

5. Fees and similar income

6. Own work capitalised

7. Increase in finished goods inventories and work in progress

8. Rental and lease income

9. Other income

a) Income from disposal of assets

b) Income from the reversal of provisions

c) Income from the reversal of special items for investment grants

d) Miscellaneous other income

10. Cost of materials

a) Cost of raw materials, consumables and supplies, and of purchased merchandise

b) Cost of purchased services

11. Personnel expenses

a) Wages, salaries and remuneration

b) Social and old-age pension benefits

c) Other social and pension benefits

12. Expenses for transfer payments

13. Expenses for equipment grants

14. Expenses for inter-state fiscal equalisation programme

15. Depreciation, amortisation and write-downs

16. Rental and lease expenses

2007in EUR thsd.

8,474,139

811,835

3,683

3,311,693

960,224

42,133

33,152

175,475

5,085,073

1,097,649

2,817,852

193,811

975,761

1,207,014

424,399

782,615

6,086,090

3,256,681

1,221,531

1,607,878

3,434,617

117,406

367,249

1,274,074

698,692

53Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated statement of financial performance

17. Other expenses

a) Expenses from disposal of assets

b) Expenses from administrative activities

c) Expenses from the addition to the special item for investment grants

d) Miscellaneous other expenses

18. RESULT FROM OPERATING ACTIVITIES

19. Result from equity investments

20. Income from other securities and long-term loans

21. Interest and similar income

22. Write-downs of long-term financial assets and of securities classified as current assets

23. Interest and similar expenses

24. FINANCIAL RESULT

25. RESULT FROM ORDINARY ACTIVITIES

26. Extraordinary income

27. Extraordinary expenses

28. EXTRAORDINARY RESULT

29. Taxes on income

30. Other taxes

31. NET SURPLUS

32. Accumulated losses brought forward

33. Appropriation to reserves

34. Surplus attributable to minority interests

35. Deficit attributable to minority interests

36. CONSOLIDATED ACCUMULATED DEFICIT

2007in EUR thsd.

3,684,153

201,805

422,621

20,711

3,039,016

2,028,112

295,010

4,914

166,135

289,262

1,323,916

– 1,147,119

880,993

36,632

7,166

29,466

95,333

17,590

797,536

861,954

792,699

40,760

1,742

– 896,135

54Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Consolidated statement of changes in fixed assets




3. Goodwill

4. Prepayments


1. Land and buildings

2. Technical equipmentand machinery

3. Other equipment, operatingand office equipment

4. Works of art, monumentsand museum collections

5. Prepayments andassets under construction

Disposals

in EUR thsd.

12,085

13,064

142,996

0

168,145

499,377

107,321

217,156

70

30,049

853,973

Reclassifi-cations

in EUR thsd.

– 86,074

3,219

0

3,880

– 78,975

205,211

128,624

14,074

0

– 444,322

– 96,413

Write-ups

in EUR thsd.

457

27

0

0

484

44,116

0

1,447

614

0

46,177

Additions

in EUR thsd.

197,255

13,282

3,245

169,743

383,525

179,576

131,070

149,380

26

886,826

1,346,878

Changes in the basis of

consolidationin EUR thsd.

0

340

0

0

340

25

522

12,497

0

566

13,610

01. 01. 2007

in EUR thsd.

6,130,125

287,199

3,284,103

192,862

9,894,289

50,346,447

6,451,739

2,993,230

3,311,569

1,232,119

64,335,104

CONSOLIDATED STATEMENTOF CHANGES IN FIXED ASSETSAS OF 31 DECEMBER 2007

31. 12. 2007

in EUR thsd.

6,229,678

291,004

3,144,352

366,484

10,031,518

50,275,999

6,604,634

2,953,473

3,312,139

1,645,141

64,791,386

COST


OBS 01. 01. 2007

in EUR thsd.

2,388,486

75,510

3,119,898

192,862

5,776,756

36,366,022

3,992,589

807,150

3,311,513

1,228,673

45,705,947

31. 12. 2007

in EUR thsd.

2,226,726

60,524

2,830,027

366,481

5,483,758

35,977,566

3,973,717

822,011

3,312,063

1,644,888

45,730,245

31. 12. 2007

in EUR thsd.

4,002,952

230,480

314,324

4

4,547,760

14,298,433

2,630,917

2,131,461

76

252

19,061,139

Disposals

in EUR thsd.

230

12,746

14,197

0

27,173

154,640

40,069

188,785

2

333

383,829

Reclassifi-cations

in EUR thsd.

11

– 1

0

4

14

– 12,197

16,440

– 1,061

0

– 3,196

– 14

Write-ups

in EUR thsd.

4

0

0

0

4

– 1,449

0

581

0

0

– 868

Additions

in EUR thsd.

261,528

31,537

164,316

0

457,381

486,293

195,396

134,646

22

335

816,692



0

0

0

0

0

0

0

0

0

0

0

01. 01. 2007

in EUR thsd.

3,741,639

211,689

164,205

0

4,117,533

13,980,425

2,459,150

2,186,080

56

3,447

18,629,158

VALUATION ALLOWANCES RESIDUAL BOOK VALUES



1. Shares in affiliated,not fully consolidated organisations

2. Loans to affiliated,not fully consolidated organisations

3. Shares in associatedorganisations

4. Other equity investments

5. Loans to associatedorganisations and to long-term investees and investors


7. Other loans

TOTAL FIXED ASSETS

CONSOLIDATED STATEMENTOF CHANGES IN FIXED ASSETS (cont.)AS OF 31 DECEMBER 2007

Disposals

in EUR thsd.

2,313

620

475,642

1,140,773

5,054

7,922

795

1,633,119

2,655,237

Reclassifi-cations

in EUR thsd.

– 8,807

0

0

– 278

0

0

39

– 9,046

– 184,434

Write-ups

in EUR thsd.

0

0

0

0

0

0

0

0

46,661

Additions

in EUR thsd.

68,526

502

585,211

155,495

650

47,628

1,565

859,577

2,589,980



7

0

– 5,123

0

0

0

45

– 5,071

8,879

01. 01. 2007

in EUR thsd.

356,200

9,951

3,012,627

1,161,504

37,957

311,520

55,712

4,945,471

79,174,864

31. 12. 2007

in EUR thsd.

413,613

9,833

3,117,074

175,949

33,553

351,226

56,566

4,157,814

78,980,718

COST


OBS 01. 01. 2007

in EUR thsd.

347,376

9,901

3,012,627

1,160,867

37,834

310,960

55,712

4,935,277

56,417,980

31. 12. 2007

in EUR thsd.

406,328

6,783

2,862,018

153,610

33,508

350,665

56,566

3,869,478

55,083,481

31. 12. 2007

in EUR thsd.

7,285

3,050

255,055

22,339

45

562

0

288,336

23,897,235

Disposals

in EUR thsd.

1,940

0

0

350

78

14

0

2,382

413,384

Reclassifi-cations

in EUR thsd.

0

0

0

0

0

0

0

0

0

Write-ups

in EUR thsd.

0

0

0

0

0

– 34

0

– 34

– 898

Additions

in EUR thsd.

400

3,000

255,055

22,052

0

49

0

280,556

1,554,629



0

0

0

0

0

0

0

0

0

01. 01. 2007

in EUR thsd.

8,825

50

0

637

123

560

0

10,195

22,756,886

VALUATION ALLOWANCES RESIDUAL BOOK VALUES

1 General disclosures on the consolidated financial statements

In this report, the Free and Hanseatic City of Hamburg (FHH) is presenting its con-

solidated opening balance sheet as at 1 January 2007 and its first set of consoli-

dated financial statements for the period ended 31 December 2007. The financial

year corresponds to the calendar year. Recognition and measurement were con-

ducted, mutatis mutandis, in accordance with the provisions of German commer-

cial law as well as German Accepted Accounting Principles (Grundsätze ordnungs -

mäßi ger Buchführung – GoB).

A binding standard for group accounting in the public sector does not yet exist.

Recognition and measurement are therefore based on the recognised standards of

commercial accounting. In addition to the German Commercial Code (HGB), these

include the standards for double-entry accounting and group accounting at public

level currently being developed by the »Cost and Performance Accounting / Double-

Entry Accounting« (Kosten-Leistungsrechnung / Doppik) joint federal and state

work ing group of the Finance Ministers Conference. The provisions of the German

Commercial Code are currently also relevant for the majority of FHH’s associated

organisations and equity investments.

Hiving off functions of the regional administrative authority to, in some cases,

legally independent organisations creates more flexibility, efficiency and profitabil-

ity. However, up to now the liabilities of outsourced functional areas, for example,

have not been reflected in the cameralistic budget. The primary objective of group

accounting in the public sector is therefore to achieve a transparent presentation of

the total assets and total obligations (liabilities and provisions) as well as of the utili-

sation of all resources on a consolidated basis across the entire section of the pub-

lic sector in which the functions of the Hamburg »Group« are executed. This pre-

sentation makes it necessary to include all areas charged with the execution of

NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTSAS OF 31 DECEMBER 2007

58Free and Hanseatic City of Hamburg Consolidated financial statements 2007 / Notes

public-sector functions for FHH, regardless of their form of organisation or legal

form, in which the functions are executed (core administration, private-sector sub-

sidiary organisations, etc.).

Hamburg’s consolidated financial statements are prepared for the basis of con-

solidation. Besides the core administration, this includes the financially independ-

ent subsidiary organisations and associated investments of FHH. The Group parent

and central organisational unit is FHH’s core administration. The annual financial

statements of the core administration and the recognition, measurement and pre-

sentation principles defined for these financial statements provide the starting

point for the broader portrayal of the entire Group. The single-entity financial state-

ments of the Group subsidiaries (which have different forms of organisation and

legal forms), some of which were prepared using different measurement and pre-

sentation principles, must be aligned with the standards used for FHH’s annual

financial statements and then combined into an overall view.

The consolidated financial statements do not simply aggregate the data of the

Group entities included, but rather consolidate the accounting data for a Group

overview taking the commercial links between the individual legally independent

entities into account. In compliance with the standards for double-entry accounting

in the public sector, FHH decided for the consolidated opening balance sheet and

the first set of consolidated financial statements that not all measurement and

recognition principles in the Group have to be standardised completely in line with

the principles of the annual financial statements of the core administration. The

recognition, measurement and presentation principles will be harmonised in the

Group during a transition period.

The characteristics of the accounting policies for FHH’s consolidated financial

statements have been defined in detail and explained in FHH’s Group directive and

accounting manual. Departures from the German Commercial Code are explained in

more detail in the section entitled »Accounting policies«.

FHH’s consolidated financial statements comprise the balance sheet, statement

of financial performance, notes and management report. A consolidated cash flow

statement and segment reporting were not prepared.

Individual items have been combined to improve the clarity of presentation in the

statement of financial performance and the balance sheet. These items are reported

separately in the notes and explained. Items with zero returns are not reported.

The balance sheet uses the classification provided in Section 266 of the HGB,

but has been adapted to the specific features of public activities (following

Section 265 (1) and (5) of the HGB). The statement of financial performance uses

the total cost (nature of expense) format in accordance with Section 275 (2) of the

HGB. The term »statement of financial performance« is used instead of »income

statement« to take account of the fact that a regional administrative authority is not

motivated by profit but rather executes functions in the public sector for the com-



mon good. In this respect, the financial statements report on the results of manag-

ing the public-sector regional administrative body of Hamburg in 2007. Simplified

methods and limits are used to determine the carrying amounts of insignificant

items.

Like the annual financial statements for the city’s core administration prepared

in accordance with German commercial law, FHH’s consolidated financial state-

ments are prepared on a voluntary basis and in addition to cameralistic accounting.

The preparation of consolidated financial statements by FHH does not give rise to

any tax implications for the subsidiary organisations that already prepare consoli-

dated financial statements. Most importantly, it does not release them from their

obligation to prepare exempting consolidated financial statements.

German accepted accounting principles and the materiality principle in conform-

ity with the German Commercial Code have been taken into account. The GoB sat-

isfy the requirements of accounting for a public-sector regional administrative body

with a dominant cameralistic accounting system.

The consolidated financial statements are prepared in euros. Unless otherwise

specified, all amounts are rounded to millions of euros (EUR million).


2 Consolidation

2.1 Basis of consolidationThe basis of consolidation used for the group accounting comprises the accounting

group of the core administration (core accounting group), i. e. the economic entity

of FHH presented in the annual financial statements of the core administration, and

the financially independent entities of FHH (referred to here as subsidiary organisa-

tions, other equity investments and shareholdings).

Departments and offices

■ Specialist departments

■ Senate offices

■ District offices

Special areas

■ Self-managed funds

■ Special funds pursuant toSection 26 (2) LHO

Public-sector organisational units

■ State institutions pursuant to Section 15 LHO

■ State enterprises pursuant toSection 26 (1) LHO

■ Special funds pursuant to Section 26 (2)LHO (general special funds and reserves)

■ Public-sector entities

■ Public institutions

■ Public foundations

Private-sector organisational units

■ Corporations

■ Partnerships

CORE ACCOUNTING GROUP SUBSIDIARY ORGANISATIONS, COMPANIES AND EQUITY INVESTMENTS

FREE AND HANSEATIC CITY OF HAMBURG GROUP

Structure of the FHH Group

As the consolidated financial statements also include state enterprises, state insti-

tutions, public foundations, public institutions, public-sector entities and special

funds that are not companies, the term »affiliated organisations« is used instead of

»affiliated companies«.

The core accounting group includes areas of the organisation that are affiliated with

FHH but ■ are financially dependent,■ do not prepare independent accounts in accordance with German commercial

law or■ do not have independent management empowered to make decisions.

For more information please refer to the notes on the annual financial statements of

the core administration (section 3.5).


Subsidiary organisations do not form part of the core accounting group, though

they permanently serve the objectives of FHH. A controlling influence also exists as

FHH holds the majority of the voting rights as the shareholder. FHH usually has an

equity interest of over 50 per cent in such organisations.

In contrast to the core accounting group, the subsidiary organisations and the

other equity investments are organisational units that are affiliated with FHH and

have their own financially independent operations. Some entities like universities

are consolidated depending on the stage they are at in the transition from single-

entry to double-entry accounting and providing the quality of the data under Ger-

man commercial law is sufficiently high.

Total assets of the organisations that still predominantly use the cameralistic

system and which were not fully consolidated in 2007 due to the cameralistic focus

of their accounting amounted to approximately EUR 577 million.

Equity investments in the sense of joint ventures and associated organisations are

Group entities over which FHH may exercise a significant, though not controlling,

influence. This classification is generally based on the requirement that the parent

company’s interest is between 20 and 50 per cent. Equity investments in the sense

of joint ventures are not reported separately in FHH’s consolidated financial state-

ments but are accounted for in the same way as investments in associated organ-

isations.

Core accounting groupSubsidiary organisations,

other equity investments and shareholdings

FREE AND HANSEATIC CITY OF HAMBURG GROUP OTHER SHAREHOLDINGS

Subsidiary organisations> 50 %

At cost

Full consolidation

At cost

≤ 20%

significant insignificant significant insignificant

At equity

At cost

> 20%

Equity investments and shareholdings≤ 50%

Types of consolidation


Organisations that are outside the Group and in which FHH holds an interest of

20 per cent or less are accounted for under »Other investments«. They are reported

under either fixed assets or current assets depending on the goals of the city’s

involvement.

Taking incorporation options into account, the 2007 consolidated financial state-

ments include 390 subsidiary organisations, other equity investments and share-

holdings. FHH holds 98 of the 390 equity investments and shareholdings directly.

70 subsidiaries were fully consolidated. The basis of consolidation was defined

using the financial statements for the previous year, taking materiality limits into

account. Landes betrieb Straßen, Brücken und Gewässer (LSBG) and Hoch schule

für Angewandte Wis senschaften Hamburg (HAW) were included in the basis of

consolidation in 2007 for the first time.

For the opening balance sheet, twelve organisations were included using the

equity method of accounting. Three of these left the consolidated group in 2007:

Elbe Werkstätten GmbH, Hamburger Werkstatt GmbH and Landesbetrieb Winter-

huder Werkstätten. Landesbetrieb Winterhuder Werkstätten was incorporated into

Winterhuder Werkstätten GmbH, which in addition to Pier Pro Integration Entwick-

lung und Rehabilitation Holding GmbH was consolidated at equity in 2007 for the

first time.

As at 31 December 2007, eleven subsidiary organisations were thus consoli-

dated using the equity method. The list of shareholdings and details on the inclu-

sion of subsidiary organisations in the consolidated financial statements as at

31 December 2007 (Sections 287, 313 (4) of the HGB) are provided in the overview

of equity investments. The overview of equity investments lists 331 of the 390

equity investments. It does not list the indirect equity investments in which Ham-

burg holds an interest of up to 20 per cent.

2.2 Consolidation methodsNo subgroup financial statements were included in the consolidation for FHH’s

consolidated financial statements. This is because:■ The IT system used does not yet allow an explicit allocation of the subsidiary

organisations to the individual specialist departments and offices (e.g. subsidiar-

ies of HGV Hamburger Gesellschaft für Vermögens- und Beteiligungs manage -

ment mbH must be allocated to different specialist departments).■ The subgroup financial statements are generally available too late for the pur-

poses of FHH’s consolidated financial statements.■ The subgroup financial statements are based on different dates of initial consoli-

dation.


Subsidiary organisationsAffiliated organisations are usually consolidated in full. Where consolidation options

were exercised, these organisations were included at cost (purchase cost). Organ-

isations were consolidated in full when sales of over EUR 15 million or total assets

in excess of EUR 20 million were reported in the annual financial statements used

to define the basis of consolidation. Exceptions to this rule were:■ Entities that are in the process of switching from cameralistic to double-entry

accounting. These were only included where the quality of the data under Ger-

man commercial law was sufficiently high.■ Foreign entities were not included in the first set of consolidated financial state-

ments.■ Subsidiary organisations whose parent companies are considered affiliated yet

insignificant were generally included at cost.■ Subsidiary organisations that are included at a direct parent company using the

equity method or at cost. These were generally included at cost in FHH’s finan-

cial statements.

Equity investments in the sense of associated organisationsIf an equity investment is not managed as a joint venture but the investor still exer-

cises influence over the organisation’s business and financial policies, it is termed

an associated organisation. Associated organisations were consolidated using the

equity method unless impeded by the principles of materiality and profitability, in

which case they were carried at cost.

Other equity investmentsIf no significant influence was exercised, the equity investment was carried at amort-

ised cost.

Establishing the date of initial consolidationUnder accounting law, the acquisition date is generally taken as the date on which

the beneficial ownership of the shareholdings was transferred to FHH. This date is

often several years – in some cases even decades – in the past. It was therefore not

possible to record and verify this data.

As the long-term financial assets reported in FHH’s single-entity financial state-

ments that are being consolidated were revalued at the time FHH’s first set of

consolidated financial statements were being prepared, the initial acquisition ac-

counting did not give rise to any differences. The date of initial consolidation was

established as 1 January 2006.

The first set of consolidated financial statements was prepared for the year

ended 31 December 2007.


Acquisition accountingThe book value method was used for acquisition accounting. Here, the carrying

amounts of the shares in the subsidiary organisations included in FHH’s consoli-

dated financial statements were eliminated against the proportionate amount of

equity that these shares represent. The assets and liabilities were taken over at their

carrying amounts. The causes of any remaining differences were investigated as

part of the consolidation accounting.

Equity consolidationIn equity consolidation, only equity investments over which material influence is ex-

ercised are reflected in the consolidated financial statements. In contrast to full

consolidation, no individual assets, liabilities, income and expenses are included in

the consolidated financial statements.

The equity method is characterised by the fact that the carrying amount of the

equity investment, taken at historical cost, is adjusted in subsequent years in line with

the development of the proportionate share of equity reported in the balance sheet.

Similar to full consolidation, however, any differences between the cost of the

investment and its proportionate share of the subsidiary organisation’s equity are

also calculated using the equity method. The organisations included at equity were

consolidated for the first time as at 1 January 2006 using the book value method.

Consolidation of intercompany balancesAs an organisation cannot report any receivables from and liabilities to itself, intra-

group receivables, provisions and liabilities are eliminated in accordance with the

entity concept.

From the Group perspective, non-valid set-off differences arise as a result of

classification differences. Possible causes include transfer periods or goods ship-

ments that have not been received by the balance sheet date and are therefore

accounted for differently in the balance sheets of the business partners.

Valid set-off differences are caused by the unequal treatment of debt relation-

ships at the business partners involved based on the realisation and imparity principle

in the German Commercial Code, i. e. when a subsidiary organisation recognises

provisions for uncertain obligations in respect of another subsidiary organisation or

writes down a receivable that the business partner continues to record as a liability

in its balance sheet.

Closing date-related set-off differences may arise when subsidiary organisations

are consolidated with a different balance sheet date, without interim financial state-

ments being prepared, and a debt is created or repaid between the closing dates.

In the FHH Group, accounts with a volume of over EUR 1 million per side of the

balance sheet and partner are squared.


In the case of differences■ items from the intercompany balances were recorded on the basis of the explan-

ations of both partners (clarified differences from items of over EUR 1 million

with a difference in excess of EUR 250,000).■ arising from the consolidation of intercompany balances between subsidiary

organisations as well as between the core accounting group and subsidiary

organisations, the differences were recognised in income (affecting equity).

Eliminations of EUR 4,556 million were made as at 31 December 2007.

In 2007, net set-off differences totalling EUR 22 million arose that were recog-

nised fully as income (see explanations under »Other income«).

Consolidation of income and expensesThe aim of consolidation of income and expenses is to calculate an aggregated

statement of financial performance for the Group. From a Group perspective, trans-

actions between the Group companies are internal deliveries that are not to be re-

flected in the consolidated financial statements. They were eliminated against each

other in accordance with Section 305 of the HGB providing they were not reported

as an increase in finished goods inventories and work in progress or as other own

work capitalised.

Differences from the elimination of income and expenses were recognised in

income providing the relationship involved two subsidiary organisations. If the

transaction in question was a transaction between the core accounting group and a

subsidiary organisation, the difference between expenses and income in respect of

third parties was transferred to the corresponding subsidiary organisation in the

core accounting group.

Intragroup deliveries and services amounting to EUR 1,798 million were elimin-

ated as part of the consolidation of income and expenses.

Net differences of EUR 5 million were derecognised as income in the consolida-

tion of income and expenses.

Elimination of intermediary resultsNo intermediary results were eliminated as at 31 December 2007.


3 Accounting policies

3.1 Consolidated balance sheet and statement of financial performanceFor the consolidated opening balance sheet and the first set of consolidated finan-

cial statements, the Free and Hanseatic City of Hamburg decided in line with the

standards for double-entry accounting in the public sector that efforts would be

made to gradually harmonise all significant accounting policies in keeping with the

guidance for the single-entity financial statements in the FHH Group. The first step

was therefore to implement simplification rules for the harmonisation of the stand-

ards and the exercise of accounting options.

The 2007 consolidated financial statements were based on the following key

stipulations:■ No specifications were made regarding the harmonisation of depreciation

methods and useful economic lives.■ The goodwill arising from the acquisition accounting that was reported in the

consolidated financial statements is amortised on a straight-line basis over a

useful economic life of 20 years.■ Specifications on the recognition of deferred taxes from the consolidation were

not taken into account because FHH being a regional administrative authority is

not subject to taxation.■ When the consolidated financial statements were being prepared, the special

tax items that could no longer be recognised (Section 6b of the German Income

Tax Act) were retained unchanged at the time of initial consolidation. There were

no transfers to revenue reserves taking deferred tax liabilities into account. The

special items recognised or reversed during the reporting year at the level of the

consolidated companies were taken over unchanged into the consolidated


The method chosen for the accounting policies is designed to create a set of con-

solidated financial statements that, with a reasonable amount of time and effort,

provide transparency over the actual net assets, financial position and results of

operations of the entire regional administrative authority. This approach, which is

based on the principle of materiality, enables the situation to be presented realistic-

ally because all significant business transactions were taken into account.

In the FHH Group, the following material accounting policies were generally

used by the consolidated subsidiary organisations in the financial year:

Intangible fixed assets were measured at cost and reduced by straight-line

amortisation in accordance with their estimated useful economic life.

Tangible fixed assets are measured at purchase or production cost.

Asset erosion in fixed assets subject to wear and tear was accounted for through

depreciation and amortisation in accordance with the tax depreciation tables.


Shares in affiliated organisations, equity investments and long-term securities

were measured at cost. Due depreciation and amortisation was charged where per-

mitted under tax law or where a lower value was to be applied. The requirement to

reverse write-downs was observed.

Loans were reported at their principal amount and, where necessary, discounted

to the balance sheet date.

Land held for sale was measured at cost.

Inventories were carried at the lower of the average adjusted cost and the re-

placement cost at the balance sheet date. In addition to the directly attributable

costs, proportionate overheads were included in the cost of the services in progress

and finished services.

Trade receivables and other assets were carried at their principal amounts and

discounted where necessary. The Group makes allowance for identifiable risks

through specific and global valuation allowances.

Investment grants and third-party subsidies were reported as special items. Sub-

sidies received up to 2002 (especially building grants) are written back over a period

of 20 years, while subsidies received after 2003 are written back using the depreci-

ation rates of the assets in question and recognised in income.

The provisions for pensions and similar obligations were calculated using the

German entry age normal method in line with tax regulations and generally ac-

cepted actuarial tables (Heubeck’s 2005 G mortality tables). The necessary provi-

sion requirements were generally calculated in the Group using a discount rate of

6 per cent.

Obligations totalling EUR 113 million were not expensed for existing commit-

ments in accordance with Art. 28 (1) of the Introductory Law to the German Com-

mercial Code (Einführungsgesetz zum Handelsgesetzbuch) that were made before

1 January 1987.

The provisions for repayment obligations and the other provisions were recog-

nised in the amounts dictated by prudent business judgement.

Liabilities were reported at their settlement amount.

Foreign-currency receivables and liabilities were measured at the respective ex-

change rate on the transaction date, making allowance for changes from exchange

rate differences at the balance sheet date.

Please refer to the notes to the single-entity financial statements of FHH (sec-

tion 2) for information on the characteristics of the accounting policies used for the

annual financial statements of the core administration.


3.2 Further specificationsThe annual financial statements of the organisations included in the consolidated

financial statements were prepared as at the closing date 31 December.

Subsidiary organisations with a different balance sheet date did not have to pre-

pare interim accounts. The last set of annual financial statements for each subsid-

iary organisation was taken as the basis for the consolidation. The only fully con-

solidated subsidiary organisation with a different balance sheet date (31 July) was

Hamburger Staatsoper. Hamburger Staatsoper did not report any significant events

between the different balance sheet dates.

The last set of annual financial statements of each of the associated organisa-

tions was taken as a basis for the measurement of the Group’s equity investments

in associated organisations using the equity method.

4 Notes on the 2007 balance sheet

4.1 General remarks on fixed assetsChanges in the individual items of fixed assets in the 2007 financial year are shown

in the statement of changes in consolidated fixed assets.

Intangible fixed assetsThe largest item of intangible fixed assets is goodwill amounting to EUR 2,830 mil-

lion (opening balance sheet: EUR 3,120 million). The next-largest item is the invest-

ment grants paid of EUR 2,227 million (opening balance sheet: EUR 2,388 million).

Prepayments of EUR 366 million (opening balance sheet: EUR 193 million) mainly

included unallocated investment grants. Other intangible fixed assets of EUR 61

million (opening balance sheet: EUR 76 million) included licences and computer

software. EUR 4,596 million (opening balance sheet: EUR 4,763 million) of the total

volume of EUR 5,484 million (opening balance sheet: EUR 5,777 million) is attribut-

able to the core accounting group. The difference against the financial statements

of the core accounting group was due to consolidated adjustment entries.

Tangible fixed assetsAt EUR 35,978 million (opening balance sheet: EUR 36,366 million), land and build-

ings constituted the largest item of tangible fixed assets. Works of art, monuments

and museum collections of EUR 3,312 million (opening balance sheet: EUR 3,312

million) were reported in the core accounting group.


Long-term financial assetsLong-term financial assets had a volume of EUR 3,869 million (opening balance

sheet: EUR 4,935 million).

Shares in associated organisations was the largest item at EUR 2,862 million

(opening balance sheet: EUR 3,013 million). The main change in the 2007 financial

year resulted, among other things, from the disposal of interests in Beiersdorf by

HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH

in excess of EUR 1,000 million.

Long-term financial assets were also written down by EUR 278 million in the

financial year. Of this figure, EUR 236 million was attributable to HGV Hamburger

Gesellschaft für Vermögens- und Beteiligungsmanagement mbH and EUR 41 mil-

lion to Hamburgischer Versorgungsfonds AöR (HVF). The equity investments in

HSH Nordbank AG were written down on account of impairment that is expected

to be permanent.

The main equity investments are listed in the overview of equity investments in

this Annual Report.

4.2 Land held for saleLand held for sale in the amount of EUR 151 million (opening balance sheet:

EUR 253 million) was attributable primarily to the core accounting group.

4.3 Inventories

BALANCE SHEET ITEM

Raw materials, consumables and supplies

Work in progress

Finished goods and merchandise

Prepayments

TOTAL


54

196

0

28

278


57

285

1

21

364

The portion of work in progress of EUR 171 million (opening balance sheet:

EUR 168 million) accounted for by services in progress was due primarily to SAGA

Siedlungs-Aktiengesellschaft Hamburg and related among other things to out-

standing amounts to be billed for operating costs.


4.4 Receivables and other assets

BALANCE SHEET ITEM

Trade receivables

Valuation allowances on receivables

Receivables from affiliated, not fully consolidatedorganisations and from long-term investeesand investors

Other assets

thereof due after more than one year

Receivables from shareholders not includedin consolidation

thereof due after more than one year

TOTAL


4,877

– 363

146

1,007

574

52

49

5,719


5,778

– 557

227

2,231

531

9

0

7,688

The trade receivables reported in the consolidated balance sheet were mainly

based on the receivables of EUR 3,627 million (opening balance sheet: EUR 3,535

million) reported in the annual financial statements of Hamburgische Wohnungs-

baukreditanstalt AöR and the accounts receivable of the core accounting group

amounting to EUR 1,869 million (opening balance sheet: EUR 1,060 million).

Of the other assets, the highest amount of EUR 1,154 million was attributable to

HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH,

e.g. for the granting of borrower’s note loans. The core accounting group reported

other assets of EUR 404 million.

4.5 Securities classified as current assetsSecurities classified as current assets amounted to EUR 0.2 million (opening bal-

ance sheet: EUR 452 million).

In the 2007 financial year, HGL Hamburgische Luft- und Raumfahrt Beteiligungs -

gesellschaft mbH sold its interests of EUR 450 million in Daimler Luft- und Raum-

fahrt Holding.

4.6 Cash-in-hand, central bank balances, bank balances and chequesCash-in-hand and bank balances had a total volume of EUR 2,234 million (opening

balance sheet: EUR 1,320 million). EUR 1,292 million (opening balance sheet:

EUR 818 million) of this figure was attributable to the core accounting group. Dis-

crepancies from the values in the annual financial statements of the core account-

ing group arose on account of IT-related presentations in the consolidated financial

statements.


4.7 Prepaid expensesPrepaid expenses amounted to EUR 306 million (opening balance sheet: EUR 309

million). Of this figure, EUR 278 million (opening balance sheet: EUR 283 million) is

attributable to the core accounting group and comprised discounts from borrow-

ings in the amount of EUR 25 million (opening balance sheet: EUR 27 million).

4.8 EquityThe Group’s equity amounted to EUR 3,773 million (opening balance sheet:

EUR 2,700 million) as at 31 December 2007.

Net accountThe net account had a volume of EUR 2,854 million (opening balance sheet:

EUR 2,854 million) and was attributable in full to the core accounting group.

General reserve (revenue / capital reserves)The general reserve at the balance sheet date amounted to EUR 1,973 million, an

increase of EUR 967 million compared with the opening balance sheet (EUR 1,006

million). This increase was mainly due to a net transfer to reserves of EUR 72 mil-

lion at Hamburger Hafen und Logistik AG (HHLA) and of EUR 738 million at HGV

Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH – prin-

cipally from the proceeds of the sale of shares in Hamburger Hafen und Logistik AG.

Special-purpose reservesThe special-purpose reserves of EUR 35 million (opening balance sheet: EUR 5 mil-

lion) increased by EUR 9 million at Vereinigung Hamburger Kindertagesstätten

gGmbH and by EUR 16 million at GWG Gesellschaft für Wohnen und Bauen mbH.

CASH-IN-HAND AND BANK BALANCES

Hamburgischer Versorgungsfonds AöR

HHLA Hamburger Hafen- und Logistik-Aktiengesellschaft


HGV – Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH



263

8

21

0

106


397

199

74

73

55


Adjustment item for minority interestsThe adjustment item for minority interests of EUR –193 million (opening balance

sheet: EUR –315 million) mainly comprised fair value adjustments at Flughafen

Hamburg GmbH (FHG), a 51 per cent interest in which is held by HGV Hamburger

Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, for the opening

balance sheet.

The value of the adjustment item rose by EUR 126 million in the course of the

partial IPO of Hamburger Hafen und Logistik AG (HHLA).

Consolidated accumulated deficitA consolidated accumulated deficit of EUR 850 million was reported in the opening

balance sheet. This was attributable to the deficit reported by the core accounting

group in the previous year as well as Group entries and consolidation effects. In

spite of a high consolidated net surplus of EUR 798 million, a consolidated accumu-

lated deficit of EUR 896 million was recorded as at 31 December 2007. This was

mainly due to appropriations to reserves, in particular by HGV Hamburger Gesell-

schaft für Vermögens- und Beteiligungsmanagement mbH (EUR 755 million), GWG

Gesellschaft für Wohnen und Bauen mbH (EUR 16 million) and SAGA Siedlungs-

Aktiengesellschaft Hamburg (EUR 46 million) as well as transactions in connection

with Hamburger Hafen und Logistik AG (HHLA).

4.9 Special itemsThe special items totalling EUR 2,061 million (opening balance sheet: EUR 2,202

million) comprised investment grants received in the amount of EUR 1,802 million

(opening balance sheet: EUR 1,938 million), special items from contributions

amounting to EUR 230 million (opening balance sheet: EUR 243 million) and other

special items of EUR 29 million (opening balance sheet: EUR 21 million).

The special items for investment grants amounting to EUR 1,543 million (open-

ing balance sheet: EUR 1,678 million) and for contributions amounting to EUR 230

million (opening balance sheet: EUR 243 million) were attributable to the core ac-

counting group. The special items for contributions chiefly comprised contributions

for general road construction, the construction of sewers and sewer lines, as well

as road improvement.

Proportionate reversals recognised in income were taken into account for all

items.


4.10 ProvisionsProvisions developed in the 2007 financial year as follows:

PROVISIONS

Provisions for pensions and similar obligations

Provisions for taxes

Other personnel provisions

Provisions for leave obligations

Provisions for outstanding invoices

Provisions for unperformed maintenance

Provisions for concession right risks

Miscellaneous other provisions

TOTAL

As of 31. 12. 2007

in EUR million

20,016

42

375

20

99

68

98

2,265

22,983

Reversal / Use

in EUR million

2,222

28

78

18

44

22

2

746

3,160

Addition

in EUR million

1,336

23

68

19

82

41

55

1,665

3,289

Reclassifi-cation

in EUR million

– 18

0

125

0

1

1

45

– 58

96

Addition, basisof consolidation

in EUR million

0

0

5

0

0

0

0

0

5

As of 01. 01. 2007

in EUR million

20,921

47

255

19

59

49

0

1,403

22,753

Provisions schedule

The provisions for holiday entitlements listed merely contained reports from the sub-

sidiary organisations. The provisions for outstanding invoices of the core account-

ing group were reported under other provisions for liabilities.

Provisions for taxesProvisions for taxes were recognised exclusively by the subsidiary organisations.

The highest amount of EUR 17 million (opening balance sheet: EUR 12 million) was

attributable to Hamburg Port Authority AöR (HPA).

Other provisionsThe greater part of other provisions in the amount of EUR 1,860 million (opening

balance sheet: EUR 913 million) was attributable to the core accounting group.


OTHER PROVISIONS




Verkehrsbetriebe Hamburg-Holstein Aktiengesellschaft



112

73

65

15

61


70

43

39

27

25

TYPE OF LIABILITY

Bonds

Liabilities to banks

Payments received on account of orders

Trade payables

Liabilities to affiliated, not fully consolidated organisations and to long-term investees and investors

Other liabilities

Liabilities to shareholders

TOTAL

TotalOBS 01. 01. 2007

in EUR million

7,582

25,144

720

1,487

46

1,616

394

36,989

Thereofdue

> 5 yearsin EUR million

1,931

14,499

0

272

179

667

0

17,548

Thereofdue between 1 and 5 years

in EUR million

4,442

7,666

1

8

43

141

0

12,301

Thereofdue

< 1 yearin EUR million

970

2,260

810

1,486

51

1,086

400

7,063

Total 31. 12. 2007

in EUR million

7,343

24,425

811

1,766

273

1,894

400

36,912

4.11 LiabilitiesLiabilities totalling EUR 36,912 million (opening balance sheet: EUR 36,989 million)

predominantly comprised bonds as well as liabilities to banks total ling EUR 31,767

million (opening balance sheet: EUR 32,725 million). Liabilities at 31 December 2007

were carried at their settlement amount. The only exception was liabilities from

leases that will run for several more years. In the financial statements of the core

accounting group, these liabilities were discounted at an interest rate of 4.25 per

cent or the contractually agreed rate.

Under other liabilities, »thereof« remarks relating to taxes and social security

were dispensed with because of the characteristics of public-sector accounting.

Liabilities schedule


4.12 Deferred incomeDeferred income amounted to EUR 98 million (opening balance sheet: EUR 105

million) and comprised the following items, among others.

OTHER FINANCIAL OBLIGATIONS

Purchase commitments

Obligations from rental agreements and leases, up to 1 year

Obligations from rental agreements and leases, 1 to 5 years

Obligations from rental agreements and leases, more than 5 years

Other financial obligations

TOTAL


643

31

55

68

221

1,018

4.13 Disclosures on other financial obligations and contingent liabilities

DEFERRED INCOME

Hamburg Messe und Congress GmbH


Hamburger Friedhöfe AöR


36

22

8


35

21

8

The disclosures were made exclusively by the subsidiary organisations.

The obligations from rental agreements and leases were reported at their princi-

pal amounts. As the only bank among the subsidiary organisations, Hamburgische

Wohnungsbaukreditanstalt AöR was assigned a special role because financial

accounting for banks is subject to special regulations. Grants pledged by FHH of

EUR 1,251 million, contingent liabilities from counter-securities of EUR 113 million

and irrevocable loan commitments of EUR 665 million were listed in these consoli-

dated financial statements. The financial statements of Hamburgische Wohnungs-

baukreditanstalt contain further information.


CONTINGENT LIABILITIES

Under (absolute) guarantees

Obligations under warranties

Liens granted

Other collateral

TOTAL


9,451

360

31

101

9,943

Contingent liabilitiesThe Group’s contingent liabilities totalled EUR 9,943 million as at 31 December

2007.

The guarantees of EUR 9,363 million were attributable to the core accounting

group (see section 3.16 of the notes to the single-entity financial statements).

EUR 32 million of this figure was attributable to subsidiary organisations that were

not fully consolidated.

Obligations from warranties, liens and other collateral were attributable exclu-

sively to the subsidiary organisations.

4.14 DerivativesDerivatives were used on the money and capital markets to counter FHH’s interest

risk and improve terms of loan. Derivatives were used for the sole purpose of man-

aging existing interest risk. Speculative transactions are prohibited as a rule.

At 31 December 2007, the nominal volume of the derivative transactions

(swaps, swaptions and caps) totalled EUR 4,903 million, EUR 3,539 million of

which was attributable to the core accounting group. The derivatives were not rec-

ognised as they involve uncompleted transactions.

The liabilities from lending transactions hedged with derivatives amounted to

EUR 2,320 million, EUR 1,714 million of which was attributable to the core account-

ing group. Termination or conversion options have been integrated into the credit

agreements in some cases.

The notes on the single-entity financial statements (section 3.17) contain further

information.


5 Notes on the 2007 statement of financial performance

As FHH’s consolidated financial statements for the 2007 financial year are the first

set of consolidated accounts, the statement of financial performance for 2007 does

not contain any comparative figures.

5.1 IncomeThe income recorded was FHH’s tax income and income similar to taxes amounting

to EUR 8,474 million.

FHH’s consolidated financial statements differ from those of a corporation in the

private sector in that they show not only tax expenses but also tax income. Some of

the taxes to be paid by the consolidated subsidiary organisations flow directly or

proportionately to the Group parent through levies. These tax receipts are not a

negative tax expense and are therefore reported as tax income. From the perspec-

tive of the Group as a homogeneous organisation, this relates to expenses or

income that have not been realised and must therefore be eliminated. Due to the

sovereign nature of the tax collection, the gross disclosure is declared in FHH’s

consolidated financial statements as a modification of the entity concept and the

corresponding items from these transactions are not eliminated. Income resulting

from FHH’s position as tax creditor is therefore also posted in the consolidated

financial statements and not offset against the tax expense.

Income from transfer payments amounted to EUR 812 million and was taken over in

full from the core accounting group. This related mainly to allocations from the

public sector.

Sales, fees and similar income amounted to EUR 3,312 million in the financial year.

Fees and similar income totalled EUR 960 million. Due to the different business

segments in which the subsidiary organisations operate, sales included rental

income, billed services for container handling, income from passenger transport,

waste disposal fees and hospital services.


SALES





2007in EUR million

530

272

260

254

OTHER INCOME

Income from disposal of assets

Income from the reversal of provisions

Income from the reversal of special items for investment grants

Income from the consolidation of intercompany balances

Income from the consolidation of income and expenses

Income from full or partial disposal from the consolidated group

Miscellaneous other income

TOTAL

2007in EUR million

1,098

2,818

194

22

6

17

930

5,085

Rental and lease income amounted to EUR 175 million in the financial year. Of this

figure, EUR 47 million was attributable to the core accounting group, EUR 44 mil-

lion to Hamburg Port Authority AöR (HPA) and EUR 43 million to Flughafen Ham-

burg GmbH (FHG).

Other income comprised the following items:

At EUR 868 million, income from asset disposals reflected the proceeds from the

partial IPO of HHLA. Income from the reversal of provisions was attributable to the

core accounting group in the amount of EUR 2,731 million and to Hamburgischer

Ver sorgungsfonds AöR in the amount of EUR 36 million. Miscellaneous other

income also included a series of consolidation transactions (including income from

the consolidation of income and expenses as well as the consolidation of intercom-

pany balances, income from full or partial disposals from the consolidated group).

Miscellaneous other income comprised in particular EUR 291 million from Universi -

tätsklinikum Hamburg-Eppendorf – KöR.


5.2 ExpensesThe cost of materials comprised the cost of raw materials, consumables and sup-

plies and of purchased merchandise in the amount of EUR 424 million as well as

the cost of purchased services of EUR 783 million. EUR 79 million of the aggregate

EUR 1,207 million was attributable to the core accounting group.

COST OF MATERIALS



Hamburg Port Authority AöR (HPA)


Flughafen Hamburg GmbH

2007in EUR million

163

143

96

93

60

PERSONNEL EXPENSES





Vereinigung Hamburger Kindertagesstätten gGmbH

2007in EUR million

309

223

185

133

132

Personnel expenses totalled EUR 6,086 million, of which EUR 3,257 million related

to wages, salaries and remuneration for civil servants. Social security and pension

costs of EUR 2,829 million were incurred, of which EUR 1,222 million for the cost

of old-age pensions.

Depreciation, amortisation and write-downs mainly included the following items:

The erosion of the intangible and tangible fixed assets led to amortisation and

depreciation of EUR 1,274 million, of which EUR 164 million was goodwill amort-

isation. Amortisation of other intangible fixed assets including investment grants

paid amounted to EUR 293 million, while depreciation of tangible fixed assets to-

talled EUR 817 million. The depreciation and amortisation of fixed assets was sys-

tematic. Most of the depreciation and amortisation volume amounting to EUR 678

million was attributable to the core accounting group.


Of this figure, EUR 564 million was taken over directly; a further EUR 114 million

resulted from Group entries.

DEPRECIATION, AMORTISATION AND WRITE-DOWNS





HHLA Container Terminal Altenwerder GmbH

2007in EUR million

94

66

54

36

29

For comparisons please see the statement of changes in consolidated fixed assets.

In the financial year, write-downs of EUR 22 million were charged exclusively on

tangible fixed assets of subsidiary organisations. On account of tax law regulations,

depreciation of tangible fixed assets amounted to EUR 18 million in 2007.

Rental and lease expenses amounted to EUR 699 million. The core accounting

group reported rental and lease expenses of EUR 365 million; the greater part of the

rental and lease expenses incurred by the subsidiary organisations is attributable to

SAGA Siedlungs-Aktiengesellschaft Hamburg in the amount of EUR 268 million.

In the area of other expenses, the expenses from asset disposals included losses

from an asset disposal of EUR 161 million and lost revenue of EUR 20 million from

an asset disposal in the core accounting group.

OTHER EXPENSES

Expenses from disposal of assets

Expenses from administrative activities

Expenses from the addition to the special item for investment grants

Expenses from the consolidation of intercompany balances

Expenses from the consolidation of income and expenses

Expenses from full or partial disposal from the consolidated group

Miscellaneous other expenses

TOTAL

2007in EUR million

202

423

21

0

2

7

3,029

3,684


Expenses from administrative activities contained EUR 406 million from the core

accounting group.

Miscellaneous other expenses in the amount of EUR 3,029 million were sub-

stantially attributable to the core accounting group.

MISCELLANEOUS OTHER EXPENSES




2007in EUR million

235

173

148

RESULT FROM EQUITY INVESTMENTS




2007in EUR million

120

98

11

5.3 Result from operating activitiesThe result from operating activities was positive at EUR 2,028 million.

5.4 Financial resultThe result from equity investments comprised income from equity investments in

affiliated, unconsolidated organisations (EUR 45 million), income from associated

organisations (EUR 227 million), income from profit / loss transfer agreements

(EUR 26 million), income from other equity investments (EUR 4 million) and the

cost of loss absorption (EUR 7 million). EUR 38 million of the aggregate of EUR 295

million was attributable to the core accounting group.

Interest and similar income amounted to EUR 166 million. Of this figure, EUR 89

million was attributable to the core accounting group, which in turn was taken over

directly with EUR 104 million and adjusted by EUR 15 million to account for consoli-

dation measures. This item did not include interest income of Hamburgische Woh-

nungsbaukreditanstalt AöR, which was reported under sales.


Write-downs of long-term financial assets and of securities classified as current assets amounted to EUR 289 million in the 2007 financial year. The highest amount

of EUR 236 million was attributable to HGV Hamburger Gesellschaft für Vermö-

gens- und Beteiligungsmanagement mbH.

Interest and similar expenses amounted to EUR 1,324 million. These amounted to

EUR 965 million from the core accounting group. Of this figure, EUR 988 million

was taken over directly; a further EUR – 23 million resulted from consolidation en-

tries.

INTEREST INCOME




2007in EUR million

26

17

10

The financial result was negative at EUR – 1,147 million.

5.5 Result from ordinary activitiesThe result from ordinary activities was positive at EUR 881 million.

5.6 Extraordinary resultThe extraordinary result of EUR 30 million was composed of income of EUR 37 mil-

lion and expenses of EUR 7 million.

Taxes on income of EUR 95 million and other taxes of EUR 18 million (total volume

of EUR 113 million) resulted primarily from the tax burden of the following subsid-

iary organisations.

INTEREST EXPENSE




2007in EUR million

91

73

46


TAX EXPENSE


HHLA Container Terminal Altenwerder GmbH


2007in EUR million

43

28

10

EMPLOYEES

Civil servants

Other employees

SUBTOTAL

Trainees

TOTAL

2007 average

35,353

50,467

85,820

3,160

88,980

As of31. 12. 2007

35,406

50,620

86,026

3,162

89,188

5.7 Net surplusThe net surplus amounted to EUR 798 million.

5.8 Consolidated accumulated deficitFHH closed the statement of financial performance in its first set of consolidated

financial statements with a deficit of EUR 896 million. This figure is calculated from

the net surplus of EUR 798 million, the loss carryforward from previous years of

EUR – 862 million, the appropriations to reserves of EUR – 793 million and the sur-

plus or deficit attributable to minority interests of EUR – 39 million.

6 Other disclosures

6.1 EmployeesThe Group’s workforce at the balance sheet date and on average was as follows:


6.2 Disclosures on the impact of tax regulationson the consolidated net surplus / deficit

Accelerated tax depreciation of EUR 18 million and charges from special tax-

allowable reserves of EUR 0.5 million were reported by subsidiary organisations for

the 2007 financial year. The future charges from this were insignificant for FHH.

6.3 Senate / Hamburg ParliamentPlease refer to the notes on the single-entity financial statements (sections 5.1 and

5.2) for information on this section.

6.4 Disclosures on executive body remuneration,loans to executive bodies and other legal relationships

Please refer to the notes to the annual financial statements of the core administra-

tion and to the single-entity financial statements of the subsidiary organisations for

disclosures on executive body remuneration, loans to executive bodies and other

legal relationships.

ANNUAL FINAN-CIAL STATEMENTSOF THE CORE ADMINISTRATION2007FREE ANDHANSEATIC CITYOF HAMBURG

86Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007

87Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007

Balance sheet 88Statement of financial performance 92Statement of changes in fixed assets 94Notes on the annual financial statements 102

1 General disclosures on the annual financial statements 102


3 Notes on the balance sheet 108

4 Notes on the statement of financial performance 127

5 Other mandatory disclosures 134

Statement of holdings and investments 2007 138Note on the preparation of the annual and consolidated financial statements 153

Totals and subtotals may contain rounding differences.

88Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Balance sheet (assets)

31. 12. 2006in EUR thsd.

46,003,949

3,236,967

3,017,703

36,211

10

183,043

31,819,886

7,717,473

3,529,562

365,438

477,886

3,344,587

11,618,756

6,731,416

333,615

4,541,829

11,896

4,258,801

3,290,093

286,157

136,476

546,075

3,881,927

2,143,232

1,022,827

715,868

260,820

246,408

3,311,514

524,187

ASSETS

A. FIXED ASSETS



2. Licences, computer software


4. Prepayments


1. Land used for the city’s own purposes

a) Universities, schools, sport and cultural facilities

b) Domestic security

c) Social, health care and youth facilities

d) Other administration

2. Land classified as infrastructure assets

a) Roads, paths, squares, railways, airports

b) Port areas and areas covered by water protection legislation

c) Parks, green spaces, agriculture and forestry

d) Water areas

3. Buildings used for the city’s own purposes





4. Buildings classified as infrastructure assets

a) Roads, paths, squares, railways, airports

b) Port facilities and buildings covered by water protection legislation


5. Traffic control, supply and disposal equipment

6. Other equipment, operating and office equipment

7. Works of art, monuments and museum collections

8. Prepayments and assets under construction

31. 12. 2007in EUR thsd.

45,831,929

3,327,610

2,960,931

22,742

1,903

342,034

32,150,171

7,703,644

3,529,697

357,856

473,669

3,342,422

11,638,096

6,738,624

333,982

4,553,498

11,992

4,288,225

3,344,826

278,031

131,554

533,814

3,721,915

2,060,258

1,003,208

658,449

260,917

224,991

3,312,063

1,000,320

BALANCE SHEET(ASSETS)AS OF 31 DECEMBER 2007

89Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Balance sheet (assets)

ASSETS


1. Shares in affiliated organisations

a) State institutions pursuant to Section 15 (2) LHO

b) State enterprises pursuant to Section 26 (1) LHO

c) Special funds pursuant to Section 26 (2) LHO

d) Entities, institutions and foundations

e) Affiliated companies incorporated under private law

2. Equity investments


4. Loans

B. CURRENT ASSETS


II. Inventories


1. Receivables from third parties (excluding the public sector)

2. Receivables from affiliated organisations and from long-term investees and investors

3. Receivables from other public-sector entities

4. Other assets

IV. Cash-in-hand, central bank balances, bank balances and cheques

C. PREPAID EXPENSES

TOTAL ASSETS

31. 12. 2006in EUR thsd.

10,947,096

10,305,370

26,593

109,456

259,199

2,956,715

6,953,406

26,576

220,019

395,132

2,798,448

188,263

5,007

1,639,539

446,402

764,305

141,160

287,672

965,639

283,228

49,085,625

31. 12. 2007in EUR thsd.

10,354,148

9,806,939

26,593

110,979

259,199

2,956,715

6,453,453

69,276

256,769

221,164

3,533,777

150,790

4,829

2,051,431

613,857

401,606

542,814

493,154

1,326,727

277,839

49,643,545

90Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Balance sheet (equity and liabilities)


A. EQUITY

I. Net account

II. Surplus / deficit carried forward

III. Net surplus / previous year: net deficit

B. SPECIAL ITEMS




C. PROVISIONS

I. Provisions for pensionsand similar obligations

II. Provisions for repayment obligations


31. 12. 2006in EUR thsd.

2,287,316

2,854,076

0

– 566,760

1,920,622

1,677,873

242,716

33

20,124,541

18,962,360

4,902

1,157,279

BALANCE SHEET (EQUITY AND LIABILITIES)AS OF 31 DECEMBER 2007

31. 12. 2007in EUR thsd.

2,389,501

2,854,076

– 566,760

102,185

1,773,656

1,542,514

229,836

1,306

20,151,224

18,067,170

10,896

2,073,158

91Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Balance sheet (equity and liabilities)


D. LIABILITIES

I. Bonds

II. Liabilities to banks

III. Payments received on account of orders

IV. Liabilities to other third parties

a) Public sector

thereof inter-state fiscal equalisation programme

b) Private sector

thereof repayment of taxes and similar charges

V. Liabilities to affiliated organisations and to long-term investees and investors

VI. Other liabilities

E. DEFERRED INCOME


31. 12. 2006in EUR thsd.

24,752,146

7,581,509

14,081,516

375,356

1,004,403

878,043

129,295

126,360

92,327

1,001,212

708,150

1,000

49,085,625

31. 12. 2007in EUR thsd.

25,325,464

7,342,529

14,312,601

499,626

1,085,987

866,449

88,204

219,538

188,123

1,120,128

964,593

3,700

49,643,545

92Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Statement of financial performance

STATEMENT OF FINANCIAL PERFORMANCE 2007

1. Income from administrative activities

a) Tax income and income similar to taxes

thereof community taxes

thereof state taxes

thereof municipal taxes

thereof income similar to taxes

b) Income from fees, contributions and reimbursements

c) Income from fines, cautions and penalty payments

d) Fees payable under private law


thereof social transfer payments

3. Other income

4. Expenses from administrative activities

a) Expenses for rent, managing and maintaining land

b) Expenses for managing and maintaining infrastructure assets

c) Expenses for administrative requirements

d) Expenses for legal aid and other purchased services

e) Expenses for teaching material and learning aids


a) Wages and salaries

b) Civil servants’ remuneration

c) Social security, post-employment and other employee benefit costs

thereof additions to pension provisions


a) to third parties (excluding the public sector)

b) to subsidiary organisations

c) to other public-sector entities

2007in EUR thsd.

9,347,067

8,474,139

4,758,191

830,532

2,799,457

85,959

698,810

55,982

118,136

812,433

281,296

3,421,957

1,064,516

438,853

93,943

398,616

83,655

49,449

4,242,398

587,974

1,385,552

2,268,872

907,400

4,259,409

2,553,169

1,024,336

681,904

2006in EUR thsd.

9,188,179

8,466,117

4,643,033

730,341

3,001,664

91,079

582,570

52,988

86,504

681,722

310,957

541,163*

1,003,568

419,659

91,277

362,158

80,980

49,495

3,851,566

619,609

1,507,414

1,724,543

419,519

3,460,908

2,428,053

520,022

512,833

93Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Statement of financial performance

7. Expenses for inter-state fiscal equalisation programme


of intangible fixed assets and tangible fixed assets

thereof buildings

thereof infrastructure assets

9. Other expenses

10. RESULT FROM ADMINISTRATIVE ACTIVITIES

11. Income from equity investments


thereof from affiliated organisations

13. Other interest and similar income


thereof to affiliated organisations


16. RESULT FROM ORDINARY ADMINISTRATIVE ACTIVITIES

17. NET SURPLUS / PREVIOUS YEAR: NET DEFICIT

2007in EUR thsd.

367,249

564,429

564,429

109,538

137,489

2,152,177

931,279

38,292

16,027

16,027

104,371

987,784

16,240

– 829,094

102,185

102,185

2006in EUR thsd.

635,824

611,448

611,448

107,562

140,334

549,093

298,657*

31,976

29,411

29,411

19,573

946,377

11,415

– 865,417

– 566,760

– 566,760

* incl. cameralistic reconciliation (2007:11,789 /2006:102,271)

94Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Statement of changes in fixed assets



2. Licences, computer software


4. Prepayments


1. Land used for the city’s own purposes

a) Universities, schools, sport and culturalfacilities

thereof universities

schools

sport facilities

cultural facilities


c) Social, health care andyouth facilities

thereof social facilities

health care facilities

youth facilities


Subsequentadditions to the

carrying amount

in EUR thsd.

457

—

27

—

484

—

—

—

—

—

—

—

—

—

—

32,031

32,031

Reclassification

in EUR thsd.

18,914

130

8

3,800

22,851

131

12,251

—

– 12,120

—

226

– 187

—

—

– 187

9,507

9,676

Disposal

in EUR thsd.

–12,085

– 1,637

—

—

– 13,721

– 8,573

– 2,607

– 4,826

– 10

– 1,130

– 1,366

– 3,987

– 3,987

—

—

– 91,505

– 105,432

Addition

in EUR thsd.

197,255

2,279

1,859

155,194

356,587

6,555

1,433

3,967

26

1,130

—

17

—

—

17

11,903

18,476

Capitalisationvalue

01. 01. 2007

in EUR thsd.

6,759,341

117,173

10

183,043

7,059,568

3,630,136

595,324

2,011,602

818,344

204,867

386,660

524,297

449,625

73,043

1,629

3,693,924

8,235,017

STATEMENTOF CHANGES IN FIXED ASSETS AS OF 31 DECEMBER 2007

Capitalisationvalue

31. 12. 2007

in EUR thsd.

6,963,883

117,945

1,903

342,037

7,425,769

3,628,249

606,401

2,010,742

806,239

204,867

385,519

520,140

445,638

73,043

1,459

3,655,860

8,189,769


Carrying amount01. 01. 2007

in EUR thsd.

3,017,703

36,211

10

183,043

3,236,967

3,529,562

581,439

1,967,283

777,334

203,506

365,438

477,886

419,827

56,430

1,629

3,344,587

7,717,473

Reclassificationof current assets

31. 12. 2006

in EUR thsd.

—

—

—

—

—

– 18,866

– 1,321

– 17,545

—

—

– 1,507

– 17,883

– 17,883

—

—

– 111,143

– 149,400


in EUR thsd.

2,960,931

22,742

1,903

342,034

3,327,610

3,529,697

593,770

1,970,780

761,641

203,506

357,856

473,669

415,781

56,430

1,459

3,342,422

7,703,644


31. 12. 2007

in EUR thsd.

—

—

—

—

—

– 16,844

– 68

– 13,189

– 3,588

—

– 7,949

– 17,943

– 17,943

—

—

– 75,692

– 118,428

Accumulateddepreciation,amortisation

and write-downs31. 12. 2007in EUR thsd.

– 4,002,952

– 95,204

—

– 4

– 4,098,159

– 81,709

– 12,563

– 26,774

– 41,011

– 1,361

– 19,714

– 28,528

– 11,915

– 16,614

—

– 237,746

– 367,697

Depreciation,amortisation

and write-downs,disposals,

reclassificationsin EUR thsd.

215

1,422

1

– 4

1,634

—

—

—

—

—

—

—

—

—

—

448

448


and write-downs,financial yearin EUR thsd.

– 261,528

– 15,663

– 1

—

– 277,192

—

—

—

—

—

—

—

—

—

—

—

—



– 3,741,639

– 80,962

—

—

– 3,822,601

– 81,709

– 12,563

– 26,774

– 41,011

– 1,361

– 19,714

– 28,528

– 11,915

– 16,614

—

– 238,194

– 368,144


2. Land classified as infrastructure assets

a) Roads, paths, squares,railways, airports

thereof roads, paths, squares

railways

airports

b) Port areas and areas covered bywater protection legislation

thereof port areas

areas covered by water protection legislation


thereof parks, playgrounds,green spaces

agriculture and forestry

d) Water areas

3. Buildings used for the city’s own purposes


thereof universities

schools

sport facilities

cultural facilities



thereof social facilities

health care facilities

youth facilities



carrying amount

in EUR thsd.

8,062

7,981

—

80

449

—

449

3,047

3,044

3

85

11,643

—

—

—

—

—

—

—

—

—

—

222

222

Reclassification

in EUR thsd.

1,488

1,479

9

—

158

—

158

207

30

177

11

1,864

214,382

426

55,987

157,969

—

591

343

4

—

338

409

215,725

Disposal

in EUR thsd.

– 4,713

– 4,713

—

—

—

—

—

– 2,764

– 2,419

– 345

—

– 7,477

– 11,754

– 5,083

– 3,483

—

– 3,188

– 4,449

– 2,626

– 509

– 2,072

– 45

– 8,317

– 27,145

Addition

in EUR thsd.

4,117

4,117

—

—

251

—

251

2,429

2,374

55

—

6,797

30,869

—

22,096

4,672

4,101

—

325

21

—

304

9,318

40,512

Capitalisationvalue

01. 01. 2007

in EUR thsd.

7,112,749

6,340,721

152,373

619,655

366,669

23,338

343,332

4,701,809

4,065,766

636,043

12,017

12,193,244

6,168,478

1,474,949

3,775,007

588,894

329,628

451,573

304,648

89,534

39,973

175,140

1,321,950

8,246,649

Capitalisationvalue

31. 12. 2007

in EUR thsd.

7,121,703

6,349,586

152,383

619,735

367,527

23,338

344,189

4,704,728

4,068,796

635,932

12,113

12,206,072

6,401,976

1,470,292

3,849,607

751,535

330,542

447,715

302,689

89,050

37,901

175,738

1,323,583

8,475,963

STATEMENT OF CHANGES IN FIXED ASSETS (cont.)AS OF 31 DECEMBER 2007



in EUR thsd.

6,731,416

6,157,544

144,265

429,607

333,615

21,588

312,027

4,541,829

3,912,528629,301

11,895

11,618,756

3,290,093

829,253

1,959,669

328,573

172,597

286,157

136,476

39,002

14,240

83,233

546,075

4,258,802


31. 12. 2006

in EUR thsd.

– 10,037

– 10,037

—

—

– 232

– 232

—

– 28,593

– 28,593

—

– 1

– 38,863

—

—

—

—

—

—

—

—

—

—

—

—


in EUR thsd.

6,738,624

6,164,663

144,274

429,687

333,982

21,083

312,899

4,553,498

3,924,300

629,197

11,992

11,638,096

3,344,826

809,242

1,986,030

381,476

168,079

278,031

131,553

37,000

13,028

81,525

533,814

4,288,225


31. 12. 2007

in EUR thsd.

– 11,775

– 11,775

—

—

– 737

– 737

—

– 19,850

– 19,850

—

– 1

– 32,363

—

—

—

—

—

—

—

—

—

—

—

—



– 371,304

– 173,147

– 8,109

– 190,048

– 32,808

– 1,518

– 31,290

– 131,381

– 124,646

– 6,735

– 120

– 535,613

– 3,057,150

– 661,050

– 1,863,577

– 370,060

– 162,462

– 169,685

– 171,136

– 52,051

– 24,873

– 94,213

– 789,769

– 4,187,738




– 9

– 9

—

—

14

—

14

6

—

6

—

12

– 97,443

3,247

556

– 101,247

—

1,370

1,662

328

1,334

—

4,059

– 90,353



—

—

—

—

—

—

—

—

—

—

—

—

– 81,321

– 18,602

– 48,795

– 8,492

– 5,432

– 5,639

– 4,626

– 1,847

– 474

– 2,306

– 17,953

– 109,538



– 371,296

– 173,139

– 8,109

– 190,048

– 32,822

– 1,518

– 31,305

– 131,387

– 124,646

– 6,741

– 120

– 535,626

– 2,878,385

– 645,696

– 1,815,338

– 260,321

– 157,031

– 165,416

– 168,171

– 50,531

– 25,733

– 91,907

–775,875

– 3,987,847


4. Buildings classified asinfrastructure assets

a) Roads, paths, squares, bridges, tunnels

thereof roads, paths, squares

bridges, tunnels

b) Port facilities and buildings covered by water protection legislation

thereof port facilities

buildings covered by water protection legislation

c) Parks, green spaces, agricultureand forestry

thereof parks, green spaces

agriculture and forestry

5. Traffic control equipment

thereof traffic control

supply and disposal

6. Other equipment, operatingand office equipment

thereof vehicles

information and communication equipment

Other equipment, operating and office equipment

7. Works of art, monumentsand museum collections

8. Prepayments and assetsunder construction


carrying amount

in EUR thsd.

100

—

100

84

—

84

—

—

—

184

—

—

—

762

50

34

678

614

—

45,456

Reclassification

in EUR thsd.

5,995

5,931

64

124

10

114

– 138,787

– 138,839

52

– 132,669

—

—

—

1,554

1,123

84

346

—

– 119,040

– 22,890

Disposal

in EUR thsd.

– 13,648

– 13,648

—

—

—

—

– 698

– 698

—

– 14,346

—

—

—

– 156,529

– 10,232

– 9,303

– 136,994

– 70

– 6,985

– 317,984

Addition

in EUR thsd.

4,905

4,902

3

229

215

14

1,976

1,805

171

7,110

1,285

1,175

110

40,900

8,695

13,704

18,501

26

602,160

717,266

Capitalisationvalue

01. 01. 2007

in EUR thsd.

4,939,758

3,873,781

1,065,977

2,966,127

5,103

2,961,024

1,306,816

1,293,043

13,773

9,212,701

269,227

138,299

130,928

985,924

171,039

134,118

680,767

3,311,569

524,187

42,978,518

Capitalisationvalue

31. 12. 2007

in EUR thsd.

4,937,109

3,870,966

1,066,143

2,966,564

5,329

2,961,235

1,169,308

1,155,312

13,996

9,072,981

270,512

139,474

131,038

872,610

170,674

138,637

563,299

3,312,139

1,000,322

43,400,368




in EUR thsd.

2,143,232

1,572,948

570,284

1,022,827

1,553

1,021,274

715,868

710,423

5,445

3,881,927

260,820

133,270

127,550

246,408

72,200

38,461

135,746

3,311,514

524,187

31,819,886


31. 12. 2006

in EUR thsd.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

– 188,263


in EUR thsd.

2,060,258

1,502,168

558,090

1,003,208

1,710

1,001,498

658,449

652,973

5,476

3,721,915

260,917

133,604

127,313

224,991

69,194

35,823

119,974

3,312,063

1,000,320

32,150,171


31. 12. 2007

in EUR thsd.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

– 150,790



– 2,876,852

– 2,368,798

– 508,054

– 1,963,355

– 3,618

– 1,959,737

– 510,859

– 502,339

– 8,520

– 5,351,066

– 9,594

– 5,870

– 3,725

– 647,619

– 101,480

– 102,814

– 443,325

– 76

– 2

– 11,099,405




14,072

14,072

—

– 2

—

– 2

101,941

101,941

—

116,011

—

—

—

132,082

9,530

5,318

117,233

2

—

158,202



– 94,397

– 82,036

– 12,361

– 20,054

– 69

– 19,985

– 21,852

– 21,660

– 192

– 136,302

– 1,187

– 841

– 347

– 40,185

– 12,171

– 12,476

– 15,538

– 22

– 1

– 287,235



– 2,796,526

– 2,300,834

– 495,692

– 1,943,300

– 3,550

– 1,939,750

– 590,948

– 582,620

– 8,328

– 5,330,774

– 8,407

– 5,029

– 3,378

– 739,516

– 98,839

– 95,656

– 545,021

– 56

—

– 10,970,370



1. Shares in affiliated organisations

a) State institutions pursuant toSection 15 (2) LHO

b) State enterprises pursuant toSection 26 (1) LHO

c) Special funds pursuant toSection 26 (2) LHO

d) Entities, institutions and foundations

e) Companies incorporated under private law

2. Equity investments


4. Loans

TOTAL FIXED ASSETS


carrying amount

in EUR thsd.

—

—

—

—

—

—

—

—

—

—

45,940

Reclassification

in EUR thsd.

—

—

—

—

—

—

—

—

39

39

—

Disposal

in EUR thsd.

– 500,083

—

—

—

—

– 500,083

—

– 2,250

– 174,770

– 677,103

– 1,008,807

Addition

in EUR thsd.

1,652

—

1,523

—

—

129

42,700

39,000

763

84,115

1,157,968

Capitalisationvalue

01. 01. 2007

in EUR thsd.

10,305,370

26,593

109,456

259,199

2,956,716

6,953,406

26,576

220,019

395,131

10,947,096

60,985,183

Capitalisationvalue

31. 12. 2007

in EUR thsd.

9,806,939

26,593

110,979

259,199

2,956,716

6,453,453

69,276

256,769

221,164

10,354,148

61,180,284




in EUR thsd.

10,305,370

26,593

109,456

259,199

2,956,715

6,953,406

26,576

220,019

395,132

10,947,096

46,003,949


31. 12. 2006

in EUR thsd.

—

—

—

—

—

—

—

—

—

—

– 188,263


in EUR thsd.

9,806,939

26,593

110,979

259,199

2,956,715

6,453,453

69,276

256,769

221,164

10,354,148

45,831,929


31. 12. 2007

in EUR thsd.

—

—

—

—

—

—

—

—

—

—

– 150,790



—

—

—

—

—

—

—

—

—

—

– 15,197,565




—

—

—

—

—

—

—

—

—

—

159,835



—

—

—

—

—

—

—

—

—

—

– 564,429



—

—

—

—

—

—

—

—

—

—

– 14,792,971

102Free and Hanseatic City of Hamburg Annual financial statements of the core administration 2007 / Notes

1 General disclosures on the annual financial statements

The Free and Hanseatic City of Hamburg (FHH) hereby submits its second closing

balance sheet and second statement of financial performance for the year ended

31 December 2007. The financial year corresponds to the calendar year. Recogni-

tion and measurement were conducted, mutatis mutandis, in accordance with the

provisions of German commercial law as well as German Accepted Accounting

Principles (Grundsätze ordnungsmäßiger Buchführung).

A binding standard for commercial accounting in the public sector does not yet

exist. Recognition and measurement were therefore based on recognised stand-

ards for commercial accounting. In addition to the German Commercial Code (Han-

delsgesetzbuch – HGB), these included the draft by the German Institute of Audi-

tors (Institut der Wirtschaftsprüfer in Deutschland e.V.) on Accounting for Public

Administration in accordance with the Principles of Double-Entry Accounting (IDW

ERS ÖFA 1) and the standards for double-entry accounting at public level currently

being developed by the »Cost and Performance Accounting / Double-Entry Account-

ing« (Kosten-Leistungsrechnung / Doppik) joint federal and state working group of

the Finance Ministers Conference.

FHH executes governmental and community functions through departments

and offices as well as through legal entities under public law and through subsid-

iary organisations organised under private law. The annual financial statements

were prepared for the reporting group of the core administration (core accounting

group). In addition to the departments and offices specified, this included the self-

managed funds pursuant to Section 15 (3) of the state budgetary regulations (Lan-

deshaushaltsordnung – LHO), special funds pursuant to Section 26 (2) of the LHO

and net-costed institutions pursuant to Section 15 (2) of the LHO, which had no in-

dependent commercial accounting at the balance sheet date.

NOTES ON THE ANNUAL FINANCIAL STATEMENTSAS OF 31 DECEMBER 2007


As FHH’s tasks and functions (e.g. education, care of children and young peo-

ple, social transfer payments, maintenance of public safety and order by the police

force, the courts and the fire brigade) are very different from those of a private sec-

tor company, special requirements arise for the accounting policies for the public

sector. These were set out in detail and explained in a specialist business manage-

ment programme for the introduction of double-entry accounting and first-time

reporting in Hamburg. FHH’s accounting guideline shall be used for subsequent re-

porting. Departures from the German Commercial Code have been explained in

more detail in the section entitled »Accounting policies«.

To improve the clarity of presentation, individual items were combined in the bal-

ance sheet and statement of financial performance and explained separately in the

notes. Items with zero returns were not reported. Use was not made of the options

regarding accounting conveniences permitted under commercial law, such as busi-

ness start-up expenses in particular.

The balance sheet used the classification format provided in Section 266 of the

HGB, but was adapted to take account of the specific characteristics of public

activities (following Section 265 (1) and (5) of the HGB). Assets were classified

according to areas of policy for which the asset is used in each case. This allows

conclusions to be drawn regarding the degree to which the assets are committed

for public purposes and the extent to which they can be utilised.

The statement of financial performance uses the total cost (nature of expense)

format in accordance with Section 275 (2) of the HGB. The term »statement of finan-

cial performance« was used instead of »income statement« to take account of the

fact that a regional administrative authority is not motivated by profit. The classifi-

cation in the statement of financial performance (particularly under »Sales«) was

also modified to ensure that the substance of government action can be identified.

Simplified methods and limits are used to determine the carrying amounts of in-

significant items. Deviations are regarded as significant if they■ change the net surplus / deficit by at least 10 per cent in total and also change

total assets by at least 0.25 per cent or ■ change total assets by at least 5 per cent or ■ change particularly important individual items in the annual financial statements

by at least 10 per cent.

German Accepted Accounting Principles (GoB) and the materiality principle in con-

formity with the German Commercial Code and IAS / IFRS were taken into account.

The GoB satisfy the requirements of accounting for a regional administrative body

with a dominant cameralistic accounting system.

Since the services of a legal entity incorporated under public law are, in principle,

not subject to VAT and FHH is usually not authorised to deduct input tax, amounts

are generally shown including VAT. The balance sheet and statement of financial

performance are prepared in thousands of euros.


2 Accounting policies

2.1 AssetsAt 1 January 2006, the date on which the opening balance sheet was prepared for

the first time, FHH’s assets were measured at prudently estimated current market

values. In the current reporting, assets are measured at cost. The recognition op-

tions permitted under commercial law in accordance with Section 255 (2) of the

HGB were not included in their entirety in the calculation of production costs. The

erosion of fixed assets caused by production and the costs of general administra-

tion were not reflected. A capitalisation threshold of EUR 5,000 (gross) was used

for movable and intangible assets.

Hamburg makes funds available to third parties for investment purposes outside

the administration to fulfil functions in which Hamburg has a considerable interest.

These investment grants, with which third parties create reportable fixed assets,

were capitalised as intangible fixed assets. As a rule, the entity receiving the sub-

sidy undertakes to provide a service in return. FHH reports the right arising from

this. The grants are generally written down over the commitment period. As a rule,

the useful economic life amounts to 25 years. Discrepancies may result from the

rulings on which the grant is based or from specific individual cases (e.g. in the

case of global subsidies under the German Hospital Financing Act (Krankenhaus -

finan zie rungs gesetz) and the Hamburg Hospital Act (Hamburgisches Krankenhaus-

gesetz), where the useful economic life is ten years).

Standard office software was reported as a component of information and com-

munication hardware under the balance sheet item »Other equipment, operating

and office equipment«.

Transport infrastructure constructions (roadways), dykes and dyke defence

roads were reported in various collective assets depending on the type of construc-

tion. The same applies to infrastructure constructions in parks and green areas.

Fixed values were recognised for trees on roads and traffic control equipment (e.g.

traffic lights and parking meters).

Museum collections were divided into meaningful measurement units (clusters)

in the item »Works of art, monuments and museum collections« and fixed values

recognised with prudently estimated current market values.

Only third-party services were capitalised for assets under construction.

In the case of movable fixed assets, fixed values were recognised for standard

office equipment, collections and libraries.

For the opening balance sheet, affiliated organisations and equity investments

were generally measured using the equity method. Where this measurement led to

significant discrepancies in the current market value due to substantial hidden

reserves (over EUR 250 million), the enterprise values were determined on the basis

of expert opinions. These carrying amounts are carried forward in the subsequent


balance sheets as the cost of the long-term financial assets. They are not amort-

ised.

Long-term securities and loans were measured at cost or at market prices. There

was no regular adjustment to take account of changes in the equity of long-term

financial assets.

Assets or organisational units of FHH were hived off in line with the provisions of

German commercial law (Umwandlungsgesetz – German Reorganisation Act) dated

28 October 1994; the hived-off organisation generally reports the assets con-

tributed at FHH’s carrying amount at the time of the spin-off.

Assets were depreciated or amortised on a straight-line basis. FHH’s tax table of

depreciation rates based on the tax code was used to stipulate useful lives.

In the case of inventories, a capitalisation threshold for stock levels of at least

EUR 50,000 per item in stock or a total stock value of at least EUR 500,000 applies

for materiality reasons. Total utilisation of stockpiled goods was assumed over the

course of the year. For the purposes of simplicity, these were measured at cost or

at average prices. No work in progress was reported.

Receivables and other assets were carried at their principal amounts. Any neces-

sary write-downs are shown in separate accounts. Receivables and liabilities also

include the business accounts of the affiliated organisations. Each of these organ-

isations has several accounts.

In the case of outstanding community taxes, only Hamburg’s share was reported

as a receivable.

Taking the principle of materiality into account, prepaid expenses were only re-

ported upwards of EUR 10 million. The deferral of rental expenses and tax prepay-

ments was therefore dispensed with for the time being. The option of capitalising

discounts permitted under Section 250 (3) of the HGB was only made use of to the

extent that discounts are always deferred.

2.2 Equity and liabilitiesInvestment grants and subsidies are reported in the balance sheet as separate

items using the gross presentation method and written down over the same period

as the subsidised equipment.

The special items for contributions and fees include contributions for general

road construction, construction of sewers and sewer lines and road improvement.

It is impossible to link these exactly with the facilities, e.g. roads, financed with

them. This is why, in the interests of simplicity, annual totals were recognised which

are reversed over an average useful economic life of 25 years.

With regard to pension provisions, the option permitted under Section 28 (1)

sentence 1 of the Introductory Law to the German Commercial Code was exercised

uniformly to the effect that all existing commitments (entitlements acquired prior to

1 January 1987) were reported on the liabilities side. The provisions were calculated


using generally accepted actuarial principles based on a discount rate of 6 per cent

(cf. Section 6a (3) sentence 3 of the German Income Tax Act).

The public administration is obliged to grant civil servants, judges, mayors, sen-

ators and those employed under a special contract of employment governed by the

principles of civil service law assistance if they fall ill even after they have retired.

The provision in question was calculated using the previous year’s figures as a per-

centage of pension provisions.

Provisions were recognised for repayment obligations arising from tax receipts,

the tax apportionment and comparable fiscal relationships such as the inter-state

fiscal equalisation programme. Taking the principle of materiality into account, the

tax receipts were subject to a limit of EUR 50 million per individual case.

No provisions were recognised for maintenance, anticipated losses and the stor-

age of business documentation. The recognition of provisions for annual leave not

taken and overtime worked was dispensed with until a central time management

system is introduced at FHH because of the considerable amount of time required

to collect this data locally.

For clean-up operations of contaminated sites as well as the removal of pollu-

tants and hazardous materials, provisions were recognised only for upcoming

clean-up operations. In the case of other provisions (particularly for litigation costs,

damages and compensatory measures as well as general provisions for expenses

and liabilities), a limit of EUR 100,000 per individual case applied for materiality rea-

sons.

Provisions were only recognised for restoration obligations if there was suffi-

cient certainty that these would be required. This was not foreseeable with many

leases. Where provisions for restoration were recognised, these were not calcu-

lated proportionately over the useful life but directly for the full amount of the antici-

pated expenses. Here, too, a limit of EUR 100,000 per individual case applied.

Provisions for uncertain obligations were recognised to cover staff who take par-

tial retirement under the block model and sabbaticals. These were not discounted.

Provisions were not recognised for possible though as yet unused partial retire-

ment.

The other provisions were calculated using prudent business judgement.

Interest swaps are concluded in connection with long-term loans and bonds. As

regards their amount and term, these derivative transactions are based on the under-

lying credit transactions. These derivatives are not capitalised because of the result-

ing connectivity. Only the resulting income and expenses are reported in the state-

ment of financial performance.

Liabilities were reported at their settlement amount unless they related to inter-

est-bearing lease liabilities.

Inbuilt discrepancies arose between the result shown in the balance sheet and in

the statement of financial performance. These were attributable to differences


between cameralistic and commercial accounting and the resulting differences in

entries. The item »Cameralistic reconciliation« was therefore added to the state-

ment of financial performance and the net account in the balance sheet. The dis-

crepancies were reported under »Other income«.

FHH’s chart of accounts was reclassified for the opening balance sheet.

2.3 Statement of financial performanceDeparting from the definition of sales under commercial law, a distinction was

made in the income of the Free and Hanseatic City of Hamburg between income

from administrative activities (in particular tax receipts) and income from transfer

payments.

Income from taxes and income similar to taxes included receipts from commu-

nity taxes, state and municipal taxes. Community taxes include income, corpora-

tion and value-added tax. The revenues are collected in the federal states but entitle -

ment to them is shared between the federal government and the federal states in

accordance with Article 106 (3) sentence 1 of the Basic Law. Only the share attrib-

utable to Hamburg is reported in the statement of financial performance.

For taxes that are collected without payment notices (withholding tax), the date

on which they are received is deemed the income date. FHH’s repayment obliga-

tions were also posted under tax income.

Expenditure on internally generated assets was only capitalised as own work if it

was posted in an IT-based process and could be substantiated.

Global valuation allowances were charged for the receivables from third parties

using the debt enforcement quotas from Kasse.Hamburg, the tax collector’s office

and the court cashier. They were reported under »Other expenses«. The aim of the

quotas is to take account of the different levels of bad debts in the various areas.

Interest rate hedging transactions were concluded in connection with FHH’s

borrowings. The resulting interest income and interest expense incurred in a trans-

action were consolidated for reporting purposes.


3 Notes on the balance sheet

3.1 General disclosuresManual data collection and enquiries at specialist departments and offices were

needed to account for individual balance sheet items (notably provisions).

The audit of the opening balance sheet and the annual financial statements for

the year ended 31 December 2006 by the audit court of the Free and Hanseatic City

of Hamburg led to corrections (for specific details see the annual report of the audit

court of the Free and Hanseatic City of Hamburg dated 3 January 2008). The prep-

aration of the 2007 annual financial statements gave rise to a need for additional

corrections. The opening balance sheet and the 2006 annual financial statements

were amended in the 2007 financial year.


ASSETS

A. FIXED ASSETS




B. CURRENT ASSETS


II. Inventories


IV. Securities

V. Cash-in-hand, central bank balances,bank balances and cheques

C. PREPAID EXPENSES


A. EQUITY

B. SPECIAL ITEMS

C. PROVISIONS

D. LIABILITIES

E. DEFERRED INCOME

Changes

in EUR million

119

0

– 993

1,112

– 606

0

0

115

0

– 721

0

– 487

– 278

0

– 2

– 207

0

– 487

Corrected figures

in EUR million

46,714

3,163

31,833

11,718

2,043

129

1

1,704

0

209

244

49,001

3,024

2,087

20,260

23,629

1

49,001

Publishedfigures

in EUR million

46,595

3,163

32,826

10,606

2,649

129

1

1,589

0

930

244

49,488

3,302

2,087

20,262

23,836

1

49,488

Notes

In particular restatement of the value of port land;restatements under »buildings used for the city’s ownpurposes«

Subsequent additions to the carrying amount of the special fund »Stadt und Hafen«; correction of the carryingamount of the interest in HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH

Restatement of deferred tax receivables;correction of loan receivables and other receivables balances

Restatement of bank balances

Among others, reclassification of FHH’s chart of accounts

Restatement of the warranty provisions and the person-nel obligations in respect of Hamburg Port Authority AöR(HPA)

Restatement of the liabilities for children’s day care facilities, cash advances, liabilities to the Bundesbank

a) Corrections to the opening balance sheet as at 1 January 2006Overview of the corrections to the opening balance sheet as at 1 January 2006


b) Corrections to the annual financial statements for the year ended 31 December 2006Overview of the corrections to the balance sheet as at 31 December 2006

ASSETS

A. FIXED ASSETS




B. CURRENT ASSETS


II. Inventories


IV. Securities

V. Cash-in-hand, central bank balances,bank balances and cheques

C. PREPAID EXPENSES

of whichcurrent

changes2006

in EUR million

– 73

– 24

–17

– 31

222

0

2

494

0

– 274

0

149

of which changes vs.the OBS as of01. 01. 2006

in EUR million

119

0

– 993

1,112

– 606

0

0

115

0

–721

0

– 487

Changes

in EUR million

46

– 24

– 1,010

1,081

– 384

0

2

609

0

– 995

0

– 338

Correctedfigures

in EUR million

46,004

3,237

31,820

10,947

2,798

188

5

1,639

0

965

283

49,085

Publishedfigures

in EUR million

45,957

3,261

32,830

9,866

3,182

188

3

1,030

0

1,960

283

49,423

Notes

Among others, restatements for the reporting of spoil

Restatements under »buildings used for the city’s own purposes«

Restatement of the equity investment in Hamburgischer Versorgungsfonds AöR (HVF)

Restatement of stock levels

Restatement of the tax receivables and receivables from Hamburgischer Versorgungsfonds AöR (HVF)

Restatement of bank balances



A. EQUITY

B. SPECIAL ITEMS

C. PROVISIONS

D. LIABILITIES

E. DEFERRED INCOME

of whichcurrent

changes2006

in EUR million

– 176

1

247

77

0

149

of which changes vs.the OBS as of01. 01. 2006

in EUR million

– 278

0

– 2

– 207

0

– 487

Changes

in EUR million

– 454

1

245

– 130

0

– 338

Correctedfigures

in EUR million

2,287

1,920

20,124

24,752

1

49,085

Publishedfigures

in EUR million

2,741

1,919

19,879

24,882

1

49,423

Notes

Balance from cameralistic reconciliation (EUR 170 million) and restatement of netdeficit for 2006

Restatement of special items for contributions

In particular correction of provisions for guarantor’s liability and for benefits

Among others, restatement of tax liabilities,personnel liabilities


1. Income from administrative activities


3. Other income

4. Expenses for administrative activities



7. Expenses for inter-state fiscal equalisationprogramme


9. Other expenses

10. RESULT FROM ADMINISTRATIVE ACTIVITIES

11. Income from equity investments


13. Other interest and similar income



16. RESULT FROM ORDINARY ADMINISTRATIVE ACTIVITIES / NET DEFICIT

Publishedfigures

in EUR million

9,016

682

443

1,014

3,823

3,450

631

611

299

313

32

20

20

945

– 873

– 561

Notes

Restatement of income from taxes

In particular, correction of income from the reversalof provisions; balance from cameralistic reconciliation(EUR 102 million)

Correction of expenses for the final settlement of asale transaction with HGV Hamburger Gesellschaft fürVer mögens- und Beteiligungsmanagement mbH; stock increase (medicines)

Correction of expenses for benefits

Restatement of expenses for subsidies to Hamburg Port Authority AöR (HPA), combination of Hamburger Kindertagesstätten gGmbH (KITA) andfördern und wohnen AöR (f & w)

Correction of expenses for the transfer to provisions for the final instalment in 2006

In particular, corrections of expenses for the transferto warranty provisions; long-term financial assets of Hamburgischer Versorgungsfonds AöR (HVF); grant to Hamburg Port Authority AöR (HPA) for the storage of spoil and dry ground raising; expenses for buildingsused for the city’s own purposes

Balance

Correction of income from the equity investment in Hamburgischer Versorgungsfonds AöR (HVF)

Correction of interest expense

Balance

Balance

c) Corrections to the 2006 statement of financial performanceOverview of the corrections to the 2006 statement of financial performance

Corrected figures

in EUR million

9,188

682

540

1,004

3,851

3,461

636

611

549

298

32

29

20

946

– 865

– 567

Changes

in EUR million

172

0

97

– 10

28

11

5

0

250

– 15

0

9

0

1

8

– 6


3.2 General remarks on fixed assetsChanges in the individual items of fixed assets in the 2007 financial year are pre-

sented in the statement of changes in fixed assets.

3.3 Intangible fixed assetsAt EUR 2,961 million, investment grants paid constituted the largest item under in-

tangible fixed assets. Of the investment grants capitalised in 2007, EUR 115 million

was paid to Universitätsklinikum Hamburg-Eppendorf – KöR (UKE), EUR 30 million

was spent on subsidies in accordance with Section 22 of the Hamburg Hospital Act

and EUR 10 million went to Hamburger Hochbahn Aktiengesellschaft for under-

ground railway lines.

The main changes under prepayments related to EUR 96 million for transporta-

tion (including EUR 48 million for the construction of the underground line to

Hafen City, EUR 16.5 million for the construction of the suburban railway link to the

airport) as well as EUR 38 million for hospitals (including EUR 6.6 million for

Marienkrankenhaus, EUR 7.9 million for Endo-Klinik, EUR 3.8 million for Diakonie-

Klinikum Hamburg and EUR 4.5 million for Allgemeine Krankenhaus St. Georg).

These intangible fixed assets under construction are expected to be capitalised

from 2008 onwards.

3.4 Tangible fixed assetsFor land and the buildings constructed on this land, a distinction was made be-

tween land and buildings used for the city’s own purposes and land and buildings

which form part of infrastructure assets. The item »Traffic control, supply and dis-

posal equipment« was reported in place of the HGB balance sheet item »Technical

equipment and machinery«, to account for FHH’s special asset structure. There is

also a balance sheet item for »Works of art, monuments and museum collections«.

The write-downs charged on land for contaminated sites were reported in the

statement of changes in fixed assets.

Assets from finance leases whose beneficial owner is Hamburg were also recog-

nised under buildings. The total carrying amount of these assets was EUR 187 mil-

lion and included the police headquarters (EUR 94 million), Berliner Tor University

of Applied Sciences (EUR 32 million), the public office building in Billstrasse 84

(EUR 60.5 million) and two buildings of the fire brigade (EUR 0.4 million). The lease

liabilities arising as a result were reported under other liabilities.

The current carrying amount of the item »Buildings used for the city’s own pur-

poses« increased as a result of the completion of various school buildings and

school construction projects.

Sports grounds and sports facilities were reclassified between the buildings,

parks, green areas and sports facilities so that they were allocated to the correct

asset category.


The changes under »Other equipment, operating and office equipment« were

mainly attributable to additions to the police force and the fire brigade and to dis-

posals from the hiving-off of administrative units.

The changes under »Assets under construction« comprised EUR 177 million for

subsidies provided by FHH to Hamburg Port Authority AöR (HPA) for port construc-

tion projects. Subprojects are scheduled to be completed by the end of 2008. This

item also contained EUR 89 million for the construction of the concert section of

Hamburg’s Elbphilharmonie concert hall. The other investments are broken down

into various construction engineering projects (including the expansion of the Bern-

hard Nocht Institute, construction projects by Hamburg University) and road-build-

ing projects.

3.5 Long-term financial assetsLong-term financial assets totalled EUR 10.35 billion and are listed individually in

the overview of equity investments. This overview contains all directly and indir -

ectly affiliated subsidiary organisations and equity investments.

The non-cash contribution Grundstück Kaispeicher A and the contribution to the

liability capital for Elbphilharmonie Hamburg Bau GmbH & Co. KG, which was

founded in 2007, were reported as additions to the direct investments of EUR 42.7

million. The additions to the securities related to the special funds (»public-sector

pension reserves«) that Hamburg maintains to finance future pension obligations.

The disposals under »Shares in affiliated organisations« were attributable to the

sale of interests in SAGA Siedlungs-Aktiengesellschaft Hamburg to HGV Ham-

burger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH. The dis-

posal in the area of loans was primarily due to the issue of sponsor loans and loan

repayments.

Hamburger Institut für Berufliche Bildung, which was established as a state en-

terprise as at 1 January 2007 in accordance with Section 26 (1) of the LHO, will

continue to be accounted for in the core accounting group during the transition

period until commercial accounting is introduced.

State institutions pursuant to Section 15 (2) of the LHO and special funds pur-

suant to Section 26 (2) of the LHO must, as a rule, be classified as long-term finan-

cial assets because of their financial independence. Institutions whose accounts

are still integrated into the Hamburg budget are allocated in full to the core account-

ing group.

These include the following institutions in accordance with Section 15 (2) of the

LHO:■ Staatlicher Hochbau der Behörde für Stadtentwicklung und Umwelt (BSU) (Pub-

lic Construction of the Ministry of Urban Development and the Environment) ■ Landesfeuerwehrschule (State Firefighter School)


■ Institut für Hygiene und Umwelt (Institute for Hygiene and the Environment) ■ Landesbetrieb Bernhard-Nocht-Institut (Forschung) (research institute) ■ Wassergütestelle Elbe der Behörde für Stadtentwicklung und Umwelt (BSU)

(Water Quality Office Elbe of the Ministry of Urban Development and the Envir-

onment) ■ Zentrum für Aus- und Fortbildung (Centre for Education and Further Education) ■ Hochschule der Polizei (Police Academy)

as well as the following special funds pursuant to Section 26 (2) of the LHO: ■ Zusatzversorgung der FHH (Supplementary Benefits of FHH) ■ Zusätzlicher Versorgungsfonds der FHH (Supplementary Pension Fund of FHH) ■ Versorgungsrücklage der FHH (Pension Reserve of FHH) ■ Versorgungsfonds für die Altersversorgung der Abgeordneten der Bürgerschaft

(Old-Age Pension Fund for Members of the Hamburg Parliament) ■ Schuldendienstrücklage (Debt Servicing Reserve) ■ Ausgleichsrücklage nach dem Schwerbehindertengesetz (Equalisation Reserve

under the Disability Act) ■ Allgemeine Rücklage (General Reserve) ■ Sondervermögen für Naturschutz und Landschaftspflege der Behörde für Stadt -

entwicklung und Umwelt (BSU) (Special Funds for Nature Conservation and

Land scaping of the Ministry of Urban Development and the Environment) ■ Grundstock für Grunderwerb (Basic Fund for Land Purchases) ■ Tierseuchenkasse der FHH (Animal Epidemics Fund of FHH) ■ Vermächtnis »Borsteler Jäger« (Legacy »Borsteler Jäger«)

The Free and Hanseatic City of Hamburg maintains the first four special funds (»public-

sector pension reserves«) to finance future pension obligations. These special funds

were included in the balance sheet via the long-term financial assets invested from

them or the business accounts. Nothing is shown in the balance sheet if the special

funds were invested in bonds and debentures issued by the state (Hamburg acts as an

issuer at the same time). The special funds contained the following amounts:

SPECIAL FUNDS

Zusatzversorgung der FHH

Zusätzlicher Versorgungsfonds der FHH

Versorgungsrücklage der FHH

Versorgungsfonds für die Altersversorgung der Abgeordneten der Bürgerschaft

Amountin EUR million

60

71

134

1


3.6 Land held for saleLand held for sale in the near future worth EUR 150.8 million was reported under

this item. This principally comprised planned sales of residential and commercial

property space as well as expendable lots to facilitate the mobilisation of assets.

3.7 InventoriesInventories of EUR 5 million include the police force’s and fire brigade’s stores

amounting to EUR 2.6 million and the store of the Ministry of Social Issues, Health,

the Family and Consumer Protection (medicines) amounting to EUR 2.2 million.

3.8 Receivables and other assetsOn account of the special characteristics of the public sector, the classification of

receivables differs from that under commercial law. Instead of trade receivables,

»Receivables from third parties (excluding the public sector)« were generally re-

ported.

Receivables and other assets comprised the following items:

TYPE OF RECEIVABLES

Receivables from third parties(excluding the public sector)

Valuation allowances on receivablesfrom third parties

Receivables from affiliatedorganisations and from long-term investees and investors

Receivables from other public-sector entities

Other assets

TOTAL

Thereofdue > 1 year

in EUR million

106

—

43

354

44

547

Thereofdue < 1 year

in EUR million

1,049

– 541

358

189

449

1,504

Total31. 12. 2007

in EUR million

1,155

– 541

401

543

493

2,051

Total31. 12. 2006

in EUR million

817

– 370

764

141

288

1,640

Receivables from third parties comprised in particular tax receivables of EUR 780

million and receivables from social welfare loans of EUR 71 million.

Receivables from affiliated organisations and receivables from other long-term

investees and investors included balances of the business accounts of public-sector

companies totalling EUR 88 million, third-party funds of EUR 113 million as well as

benefits and pensions of the Ministry of Social Issues, Health, the Family and Con-

sumer Protection for the subsidiary organisation f & w fördern und wohnen AöR in

the amount of EUR 60 million.


Receivables from the rest of the public sector included receivables of EUR 354

million in accordance with Section 107b of the Civil Servants’ Pension Act (Beam -

ten versorgungsgesetz), VAT (state portion) for the fourth quarter of 2007 amount-

ing to EUR 19 million and receivables from hived-off areas of EUR 24 million.

Other assets included unpaid investment grants and subsidies of EUR 213

million.

Valuation allowances totalling EUR 541 million were recognised for receivables,

EUR 456 million of which for tax receivables.

3.9 Cash-in-hand, central bank balances, bank balances and chequesThe figure of EUR 1,326.7 million reported under this item comprised bank bal-

ances of approximately EUR 1.8 million, term and overnight money of EUR 1,322

million as well as cash and cash equivalents held at Kasse.Hamburg of EUR 2.9 mil-

lion as at 31 December 2007.

3.10 Prepaid expensesPrepaid expenses of EUR 277.8 million included discounts from borrowings of

EUR 17.4 million as well as remuneration for civil servants and members of parlia-

ment in the amount of EUR 181.4 million. This item also contains advance pay-

ments for social welfare and children’s day care facilities of EUR 78.9 million paid in

December for the following year.

3.11 EquityFHH’s equity developed as follows in the year under review:

EQUITY

As of 01. 01. 2007

Net deficit 2006

Net surplus 2007

As of 31. 12. 2007

Total equity and liabilitiesin EUR million

2,855

– 567

102

2,390

Netsurplus / deficitin EUR million

0

—

102

102

Surplus / deficitcarried forwardin EUR million

0

– 567

—

– 567

Netaccount

in EUR million

2,855

—

—

2,855

The net deficit of EUR 567 million reported in the 2006 financial statements was

carried forward. The net surplus of EUR 102 million generated in 2007 gave rise to

equity of EUR 2,390 million as of 31 December 2007.

3.12 Special itemsThe special items of EUR 1,774 million (previous year: EUR 1,921 million) com-

prised investment grants received in the amount of EUR 1,543 million (previous


year: EUR 1,678 million), special items from contributions of EUR 230 million (pre-

vious year: EUR 243 million) and special items from donations in kind of EUR 1 mil-

lion. Proportionate reversals recognised in income were taken into account for

special items. The special items for investment grants received up to 2005 and the

special items for contributions are reversed over 25 years on a straight-line basis.

Since 2006, newly recognised special items for investment grants have been re-

versed based on the standard useful life of the subsidised asset.

3.13 ProvisionsProvisions developed as follows in the year under review:

PROVISIONS

Pension provisions

Benefit provisions

Provisions for repayment obligations

Provisions for litigation risks and costs

Provisions for damages

Provisions for loss absorption obligations

Provisions for guarantees and warranty obligations

Provisions for cleaning up contaminated sites

Provisions for equalisation measures

Provisions for partial retirement and sabbaticals

General provisions for internal expenses

Provisions for liabilities

TOTAL

As of 31. 12. 2007

in EUR million

16,202

1,865

11

98

0

179

244

125

14

113

10

1,290

20,151

Reversal / use

in EUR million

2,002

137

—

1

12

—

356

65

8

17

1

147

2,746

Addition

in EUR million

1,175

92

6

55

—

57

212

—

—

6

2

1,180

2,785

Reclassification

in EUR million

23

—

—

—

—

—

13

—

—

—

—

– 23

13

As of 01. 01. 2007

in EUR million

17,052

1,910

5

44

12

122

401

190

22

124

9

234

20,125

Provisions schedule


There were commitments for pensions and similar benefits for the following

groups:■ Hamburg civil servants as well as those employed under special contracts of

employment when they reach retirement age or fall ill (Section 4 ff. of the Civil

Servants’ Pension Act),■ Surviving dependents (widows, widowers and orphans) of Hamburg civil ser-

vants and for the granting of death benefits (Section 16 ff. of the Civil Servants’

Pension Act),■ Employees (Hamburg’s Supplementary Benefits Act),■ Mayors and senators as well as their surviving dependents (old-age pension and

transitional benefits pursuant to Section 13 ff. of the Senate Act) and ■ Members of the Hamburg Parliament (old-age pension and transitional benefits

pursuant to Section 9 ff. of the Hamburg Members of Parliament Act).

The pension provisions were made up as follows:

PENSION PROVISIONS

Civil servants

Employees working undercollective agreements

TOTAL

Number

30,810

29,403

60,213

in EUR million

8,202

1,026

9,228

Number

37,031

24,258

61,289

in EUR million

6,578

396

6,974

The provisions required were calculated using the actuarial pension evaluation

report dated 26 April 2008 based on accepted mortality tables (Heubeck’s 2005 G

mortality tables) plus a discount rate of 6 per cent.

The straight-line increases of 1.9 per cent for civil servants and recipients of

benefits and 2.9 per cent for those employed under collective agreements (only

those currently working) were taken into account. The regular adjustments of 1 per

cent for those employed under collective agreements (retired) are generally in-

cluded.

The actuarial opinion did not include provisions required for members of Ham-

burg Parliament. Since these are subject to particularly complex legal regulations,

there is no standard actuarial method of calculation. A provision requirement of

EUR 2.4 million was calculated on the basis of average expenditure over the last

three years.

The actuarial calculation did not consider insignificant areas and cases where

special rules apply. These obligations were calculated in conformity with the actuar-

ial assessments.

Current employees Benefit recipients


Pension provisions were composed as follows, grouped by accounting area:

PENSION PROVISIONSBY ACCOUNTING AREA

Civil servants in the core administration

Employees working under collective agreementsin the core administration

Members of the Hamburg Parliament

Existing benefit recipients of the university clinic Hamburg-Eppendorf

Mayor and senators

Orphans

Vested entitlements of employees working undercollective agreements

Previous employees of Landesbetriebs Krankenhäuser /Asklepios Kliniken Hamburg GmbH working under collectiveagreements

Obligations under Section 107b Civil Servants’ Pension Act

TOTAL

Benefit recipients

in EUR million

8,083

1,020

2

49

60

14

—

—

—

9,228

Employees

in EUR million

6,282

354

—

—

29

—

13

28

268

6,974

The year-on-year decrease in pension provisions of EUR 850 million was due in par-

ticular to reclassifications of pension obligations. Obligations to state institutions

pursuant to Section 15 (2) of the LHO (to the extent that these institutions recog-

nised pension provisions) and pursuant to Section 26 (1) of the LHO amounting to

EUR 812 million were carried under provisions for liabilities.

The provision for repayment obligations related to inter-state fiscal equalisation

payments of EUR 5 million for 2006 and of EUR 6 million for 2007. The provision for

2007 was measured as part of a qualified estimate based on the calculations of bal-

ances due in the previous three years.

The transfer to the provisions for litigation costs of EUR 55 million related to vari-

ous legal actions costing upwards of EUR 100,000. Where a lawsuit is already

pending or it was sufficiently probable that an action would be commenced, the full

litigation costs were carried.

The provision for obligations to absorb losses rose mainly on account of the re-

statement of the provision for uncertain obligations to subsidiary organisations in

the amount of EUR 57 million.

Under provisions for guarantees and warranty obligations, EUR 20 million was

reported for the utilisation of guarantees and EUR 224 million for negative equity of


subsidiary organisations. As some subsidiary organisations had not submitted

financial statements by the balance sheet date, a provision for negative equity was

recognised similar to the previous year. The provision of EUR 356 million for nega-

tive equity of f & w fördern und wohnen AöR was reversed as the subsidiary organ-

isation posted positive equity in 2007. Personnel provisions of EUR 13 million taken

over from Hamburg Port Authority AöR (HPA) were reclassified as liabilities.

Provisions were recognised for future costs of securing and cleaning up con-

taminated sites on the basis of a calculation of the present value. The interest rate

used for this calculation was based on the German Valuation Tax Act (Bewertungs-

gesetz).

The provisions for compensation measures included amounts of EUR 14.7 mil-

lion for compensation charges. These had already been collected by the »Sonder -

ver mögen für Naturschutz und Landschaftspflege« (Special Funds for Nature Con-

servation and Landscaping). The compensation or replacement measures are still

outstanding.

Provisions of EUR 100 million and EUR 13 million respectively were recognised

for staff who take partial retirement and sabbaticals. These amounts are adjusted

once a year.

Other provisions for liabilities included a provision of EUR 101 million for FHH’s

interest in the construction of the new hospital in Barmbek, as well as a provision of

EUR 250 million for other pension obligations. The pension obligations to former

employees whose employment or service contracts were transferred to a state en-

terprise were previously reported under pension or benefit provisions. In 2007, pen-

sions of EUR 812 million and benefits of EUR 86 million were reported under other

provisions for liabilities. The provisions to be recognised for the state enterprises in-

creased compared with the previous year, mainly owing to the spin-off of Ham-

burger Institut für Berufliche Bildung (EUR 625 million) and Landesbetrieb Straßen,

Brücken und Gewässer (EUR 31 million). Since 2007, pension obligations to affili-

ated organisations of EUR 125 million have been reported under liabilities.

3.14 LiabilitiesThe classification of liabilities differs from that under German commercial law. The

item »Liabilities to other third parties« was generally used instead of »Trade pay-

ables«. Under other liabilities, »thereof« remarks relating to taxes and social Backup

were dispensed with because of the characteristics of public-sector accounting.

Liabilities at 31 December 2007 were carried at their settlement amount. The

only exception was liabilities from leases that will run for several more years. These

liabilities were discounted at an interest rate of 4.25 per cent or the contractually

agreed rate.


Liabilities schedule

TYPE OF LIABILITY

Bonds

Liabilities to banks

Payments received on account of orders

Liabilities to other third parties

thereof a) public sector

thereof b) private sector

Liabilities to affiliated organisationsand to long-term investees and investors

Other liabilities

TOTAL

Thereofdue

> 5 yearsin EUR million

1,931

9,070

—

272

269

3

404

51

11,728

Thereofdue between1 and 5 years

in EUR million

4,442

3,999

—

—

—

—

90

45

8,576

Thereofdue

< 1 yearin EUR million

969

1,244

500

814

597

217

626

868

5,021

Total 31. 12. 2007

in EUR million

7,342

14,313

500

1,086

866

220

1,120

964

25,325

Total 31. 12. 2006

in EUR million

7,582

14,082

375

1,004

878

126

1,001

708

24,752

Bonds and debentures principally comprised bonds issued by the state in the

amount of EUR 7,342 million.

Liabilities to banks included general loans of EUR 14.29 billion plus a loan of

EUR 0.6 million to the Ministry of Internal Affairs for police uniforms and a short-

term cash advance of EUR 20 million to HSH Nordbank AG.

Payments received on account of orders in the amount of EUR 500 million in-

cluded EUR 280 million from sales of land and other facilities where the purchase

price had already been paid but the transfer of ownership had not yet taken place.

The main items reported under liabilities to third parties and the public sector

were tax liabilities from the apportionment amounting to EUR 460 million for the

fourth quarter of 2007, liabilities from inter-state fiscal equalisation of EUR 88 mil-

lion and liabilities to the federal government for housing construction of EUR 303

million.

The liabilities to affiliated organisations and other long-term investees and in-

vestors mainly comprised balances of the business accounts of public-sector com-

panies totalling EUR 309 million and EUR 269 million from grants and subsidies. Of

this figure, EUR 98.4 million was attributable to various infrastructure measures in

the port, EUR 69 million to the construction of the Elbphilharmonie concert hall and

EUR 404 million to warranty obligations from pension-related entitlements in re-

spect of state enterprises.

Other liabilities included EUR 468 million for interest expense from 2007 that

was not due until the following year, as well as EUR 100 million for creditors with


debit balances, EUR 96 million for grants to third parties that were collected for the

first time as at 31 December 2007 and EUR 94 million from finance leases (of which

EUR 51 million due in over five years; cf. explanations of tangible fixed assets in

section 3.4).

3.15 Deferred incomeDeferred income of EUR 3.7 million (previous year: EUR 1 million) was reported.

This item contained EUR 1.5 million in student loans and grants with the Kredit -

anstalt für Wiederaufbau and premiums from borrowings of EUR 2.2 million.

3.16 Contingent liabilitiesIn addition to its direct pension obligations, in the course of the spin-offs of subsid-

iary organisations Hamburg assumed absolute guarantees for hived-off institutions

in the event that these are not able to meet their obligations (among other things)

from a commitment to provide a company pension.

Under Hamburg law, public institutions (Anstalten öffentlichen Rechts – AöR)

cannot go bankrupt. Accordingly, the respective establishment acts provide for a

»guarantor’s liability« whereby FHH will have unlimited liability for not only the

assets but also the liabilities of the public institution if and when these entitlements

cannot be covered by the institution’s assets.

In addition, Hamburg gives implicit warranty commitments to the net-costed

institutions pursuant to Section 15 (2) of the LHO and to the state enterprises pur-

suant to Section 26 (1) of the LHO that are a legal part of FHH and therefore do not

need a formal guarantee. These obligations have no specific financial impact for

Hamburg. Where these institutions did not recognise any pension provisions, the

entitlements arising from the obligations were taken into account in the recognition

of the provisions.

The city’s individual specialist departments also give guarantees to third parties

that are listed in the guarantee register. Following an assessment of the individual

cases, a provision of EUR 20.1 million was recognised for the anticipated utilisation

of the FHH guarantees. The sum total of the guarantees was EUR 9,689 million as

at 31 December 2007. The security in the guarantee register in 2007 was divided

into warranties of EUR 1,601 million and guarantees of EUR 8,088 million.


Overview of guarantees and other financial obligations for which no provisions

were recognised:

FINANCIAL OBLIGATION

Obligations under guarantees

Obligations under warranties

Letters of comfort

Warranty commitments to state enterprisespursuant to Section 26 (1) LHO

Thereof for affili-ated organisations

EUR 9,278 million

complete

—

complete

Total

EUR 9,689 million

unlimited

—

unlimited

There is also a large number of indemnifications and bonds of indemnity. For more

information please refer to the relevant budget resolutions.

3.17 DerivativesIn line with the authorisation in the budget resolution, since 1994 certain derivative

instruments (e.g. interest rate swaps, interest limitation transactions) may be used

on the money market and the capital market to manage interest risk and improve

credit terms.

Derivatives are used for the sole purpose of managing existing interest risk.

At 31 December 2007, the total nominal volume of the derivative transactions

that were not to be recognised because they involved uncompleted transactions

was EUR 3,539 million.

INTEREST RATE DERIVATIVES

Interest rate swaps without termination or conversion options

Interest rate swaps with termination or conversion options

Interest limitation transactions: swaptions

TOTAL


EUR 2,023 million

EUR 1,465 million

EUR 51 million

EUR 3,539 million


Overview of derivative transactions in the year under review:

INTEREST RATE DERIVATIVES

FHH pays fixed / receives variable

thereof: without options

with options

FHH pays fixed / receives fixed


with options

FHH pays variable / receives fixed


with options

FHH pays variable / receives variable


with options

Total swaps


with options

Swaptions

TOTAL


1,446

1,006

440

250

0

250

1,492

867

625

300

150

150

3,488

2,023

1,465

51

3,539


STRUCTURED LOANS

Fixed-interest loans with creditor’s right to convert

Fixed-interest loans with creditor’s right to terminate

Fixed-interest loans with debtor’s right to terminate

Interest rate period variable / variable

Interest rate period fixed / variable

thereof: at variable interest

at fixed interest

Variable / fixed with creditor’s right to convert

Variable with debtor’s right to terminate

Variable / fixed with creditor’s right to terminate

TOTAL


100

666

0

475

198

75

123

100

75

100

1,714

The liabilities from derivative-influenced credit transactions amounted to EUR 1,714

million. Termination or conversion options are integrated into the credit agree-

ments.


4 Notes on the statement of financial performance

4.1 IncomeIncome from administrative activities was generated primarily through tax income,

which totalled EUR 8,474 million. Income from administrative activities also in-

cluded income from fees, contributions and the reimbursement of expenditure (dis-

bursements) of EUR 699 million. Income from fines, cautions and penalty payments

as well as fees payable under private law (mainly from rental agreements and

leases) totalled EUR 174 million.

Income from administrative activities was broken down as follows:

Tax income comprised EUR 4,758 million from community taxes, EUR 831 million

from state taxes, EUR 2,799 million from municipal taxes and EUR 86 million from

income similar to taxes.

INCOME FROM ADMINISTRATIVE ACTIVITIES

Tax income and income similar to taxes

thereof community taxes

thereof state taxes

thereof municipal taxes

thereof income similar to taxes

Fees, contributions and reimbursements

Fines, cautions and penalty payments

Fees payable under private law

TOTAL

2006in EUR million

8,466

4,643

730

3,002

91

582

53

87

9,188

2007in EUR million

8,474

4,758

831

2,799

86

699

56

118

9,347


TAX INCOME AND INCOME SIMILAR TO TAXES

Wage tax and assessed income tax

Non-assessed tax on income

Trade tax

VAT

Corporation tax

Real estate transfer tax

Property tax

Other taxes and income similar to taxes

TOTAL

2006in EUR million

3,100

382

1,994

1,259

767

304

386

274

8,466

2007in EUR million

3,218

734

1,719

1,447

323

331

332

370

8,474

Tax income and income similar to taxes was classified by the following tax types:

The income from wage tax, the type of tax that generated the highest revenue,

merely edged up year-on-year as a result of the moderate increase in salaries.

The year-on-year decrease in income from community taxes is due in particular

to a drop in corporation tax receipts.

The year-on-year increase in income from state taxes resulted from an increase

in revenue from inheritance tax and real estate transfer tax. The higher revenue

from real estate transfer tax was attributable to the development of Hamburg’s real

estate market.

Differences between the tax receipts under cameralistic accounting and the

double-entry tax income can be attributed to the nature of the two systems and re-

sult in particular from periodisation effects through the deferral of receivables and

liabilities.

Income from transfer payments totalled EUR 812 million (previous year: EUR 682

million). This related mainly to allocations from the public sector including the fed-

eral government. The largest item was the special-purpose allocations by the fed-

eral government in the amount of EUR 394 million. Income of EUR 281 million was

also generated from transfer payments for social services.


Other income comprised, in particular:

OTHER INCOME

Income from the reversal of provisions

Income from benefits pursuant to Section 107bCivil Servants’ Pension Act

Changes in inventory

Income from subsequent additions to the carrying amount

Income from the disposal of assets

Income from the reversal of special items and investment grants

Cameralistic reconciliation

Miscellaneous other income

TOTAL

2006in EUR million

31

0

0

15

151

172

102

70

541

2007in EUR million

2,731

87

260

85

23

167

12

57

3,422

Income from the reversal of provisions resulted mainly from the restatement of

pension provisions to the correct reporting groups, a reallocation of the pension ob-

ligations to state enterprises as provisions for liabilities and a reallocation of the

pension obligations to affiliated subsidiary organisations as liabilities. The corres-

ponding amounts for these allocations were reported under other expenses.

A warranty provision of EUR 356 million for the negative equity of f & w fördern

und wohnen AöR and a provision of EUR 11 million for damage caused by breach

of contract due to a lawsuit won were also reversed.

The changes in inventory related mainly to valuation allowances on tax receiv-

ables in the amount of EUR 260 million.

The income from subsequent additions to the carrying amount shows, among

other things, the non-cash contribution of Kaispeicher A in the amount of EUR 38

million as well as various other subsequent additions to the carrying amounts of

lots amounting to EUR 47 million.

The income from the disposal of assets related to land transactions, especially

various sales of land.

The income from the reversal of special items and investment grants relates

mainly to the reversal of special items for contributions of EUR 24 million and a re-

versal of EUR 142 million for grants and subsidies.

Employees working under collective agreements must pay contributions of

1.25 per cent from the gross amount subject to taxation into the public pension

scheme. Contributions must be made by all employees who are required to pay

pension insurance and by certain employees exempted from paying pension insur-


ance on the basis of Hamburg’s Supplementary Benefits Act. The contributions were

withheld from each employee’s net salary and amounted to EUR 8.5 million in 2007

(previous year: EUR 10 million). They are reported under miscellaneous other income.

The cameralistic reconciliation gave rise to inbuilt income of EUR 12 million that

was reported under other income.

4.2 ExpensesExpenses from administrative activities totalled EUR 1,064.5 million (previous year:

EUR 1,004 million), of which EUR 533 million was spent on rent, managing and

maintaining buildings and infrastructure assets and a further EUR 399 million was

attributable to administrative requirements, especially IT costs.

Expenses for legal aid and other purchased services amounted to approximately

EUR 84 million in the year under review. Expenses for teaching materials and learn-

ing aids came to EUR 49 million.

Personnel expenses totalling EUR 4,242 million were reported in the 2007 financial

year:

Expenses for wages and salaries fell by around EUR 32 million in 2007 compared

with 2006.

This was primarily due to the following factors:■ EUR – 25 million due to the spin-off of the budget of Hamburger Institut für

Berufliche Bildung (HIBB), ■ EUR – 13.5 million due to the spin-off of the budget of Landesbetrieb Straßen,

Brücken und Gewässer (LSBG), ■ EUR – 4.5 million due to the discontinuation of holiday pay for pay scale employ-

ees in line with the collective agreement for public-service employees in the fed-

eral states (TV-L), ■ EUR + 8 million due to the one-off payments in 2007 for pay scale employees in

accordance with TV-L.

PERSONNEL EXPENSES

Wages and salaries

Civil servants’ remuneration

Other social and pension benefits

thereof additions to pension provisions

TOTAL

2006in EUR million

620

1,507

1,725

420

3,852

2007in EUR million

588

1,385

2,269

907

4,242


Expenses for civil servants’ remuneration fell by around EUR 122 million in 2007

compared with 2006.

The main causes for this were, in particular:■ EUR – 127.5 million due to the spin-off of the budget of Hamburger Institut für

Berufliche Bildung (HIBB), ■ EUR – 5.5 million due to the spin-off of the budget of Landesbetrieb Straßen,

Brücken und Gewässer (LSBG), ■ EUR + 17.5 million due to one-off payments for civil servants.

Expenses for social and pension benefits (excluding transfers to pension provisions)

rose by around EUR 85 million in 2007 compared with 2006.

This is attributable to the following factors in particular:■ Transfers to pension reserves / funds of EUR + 44 million, ■ EUR + 14 million increase in expenses for benefits to recipients of benefits, ■ EUR + 6 million due to a requirement to make a refund to pension insurance

plans from 2006 (EUR 3 million) that was only paid in 2007 on account of a ne-

cessary review.

The transfers to the pension provisions rose by EUR 487 million in 2007 compared

with the previous year.

EUR 4,259 million was spent on transfer payments (previous year: EUR 3,461 mil-

lion). Of this figure, EUR 1,024 million went to subsidiary organisations, EUR 682

million to other public-sector entities and EUR 2,553 million to third parties, of

which, in particular, EUR 370 million to children’s day care facilities and EUR 2,183

million for other social benefits.

Hamburg is one of the donor federal states in the inter-state fiscal equalisation pro-gramme. Expenses of EUR 367 million (previous year: EUR 636 million) were ac-

crued in relation to this. There were no repayments from previous years. The reduc-

tions in the compensatory amounts and allocations in the inter-state fiscal

equal isation system are attributable on the whole to changes in the relevant tax re-

ceipts and their distribution among the federal states.

The expenses included transfers of EUR 6 million to the provisions for repay-

ment obligations. The final accounting for 2007 will be determined in the calcula-

tion of balances due in early 2009.


Depreciation and amortisation of fixed assets was carried out using the straight-line

method. The residual book values of assets disposed of were derecognised. The

erosion of intangible and tangible fixed assets gave rise to depreciation and amort-

isation of EUR 564 million (previous year: EUR 611 million). This decline is primarily

due to the fact that the depreciation period for operating and office equipment at

the Ministry of Education and Sport ended in 2006. As a result, depreciation and

amortisation decreased by EUR 37 million in the year under review.

Other expenses amounted to EUR 2,152 million in the 2007 financial year. They

comprised the following items:

OTHER EXPENSES

Valuation allowances and write-downs on receivables

Additions to the provisions for litigation risks and costs

Additions to the provisions for loss absorption obligations

Additions to the provisions for guarantees and warranty obligations

Additions to the general provisions for liabilities

Losses from the disposal of assets without proceeds

Other expenses

TOTAL

2006in EUR million

15

2

0

222

12

177

121

549

2007in EUR million

431

55

57

212

1,158

161

78

2,152

The valuation allowances and write-downs on receivables primarily related to tax

receivables from third parties. The difference compared to the previous year resulted

from the change in the method of calculation to a more cautious measurement.

The transfer to provisions for litigation risks and costs of EUR 40 million was

principally for risks arising from a lawsuit for the collection of tax on gaming ma-

chines. The seventh Senate of the Hamburg Fiscal Court has ruled that the general

collection of tax on gaming machines in Hamburg is anti-constitutional because it

infringes the principle of equality before the law (Article 3 of the Basic Law). It has

presented this point of law with a ruling to the Federal Constitutional Court for deci-

sion.

A total of EUR 57 million was appropriated to the provisions for risks relating to

the obligations to affiliated organisations to absorb losses.

The transfers of EUR 212 million to the provisions for guarantees were slightly

lower than in the previous year (EUR 222 million) and mainly comprised expenses

resulting from changes in equity at affiliated organisations.


The transfers to the general provisions for liabilities amounted to EUR 1,158 mil-

lion and were due primarily to the reclassification of pension and benefit obliga-

tions to the state enterprises and other imponderables in the amount of EUR 1,128

million. The corresponding reversals of pension and benefit provisions were reported

under other income.

4.3 Result from administrative activitiesA surplus from current administrative activities of EUR 931 million was reported

(previous year: EUR 299 million). This constitutes an increase of EUR 632 million.

4.4 Financial resultThe financial result was calculated as the balance of income from equity invest-

ments (EUR 38 million), other securities (EUR 16 million), interest (EUR 104 million)

and interest expense. Interest income included receipts from derivatives of EUR 35

million and interest from cash resources of EUR 43 million. Interest expense

amounted to EUR 987 million (previous year: EUR 946 million). The increase in in-

terest expense of EUR 41 million is largely due to the general increase in interest for

debt rescheduling with a financing volume of EUR 2,541 million. The European

Central Bank raised its key interest rate by 2.25 per cent to 4.25 per cent between

January 2006 and December 2007.

4.5 Net surplusA positive result from ordinary administrative activities of EUR 102 million was re-

ported in 2007. As no extraordinary income and expenses were incurred in the past

financial year, the net surplus also amounted to EUR 102 million.


5 Other mandatory disclosures

5.1 Senate as at 31 December 2007The First Mayor and the senators form the Senate in the Free and Hanseatic City of

Hamburg. The Senate is the state government. It manages and supervises the ad-

ministration.

Senate members:■ Ole von Beust (CDU), President of the Senate and First Mayor■ Birgit Schnieber-Jastram (CDU), Ministry of Social Issues, Health,

the Family and Consumer Protection and Second Mayor■ Gunnar Uldall (CDU), Ministry of the Economy and Employment■ Jörg Dräger, Ph.D. (independent), Ministry of Science and Research■ Prof. Dr Karin von Welck (independent), Ministry of Culture■ Udo Nagel (independent), Ministry of Internal Affairs■ Alexandra Dinges-Dierig (CDU), Ministry of Education and Sport■ Dr Michael Freytag (CDU), Ministry of Finance ■ Carsten-Ludwig Lüdemann (CDU), Ministry of Justice■ Axel Gedaschko (CDU), Ministry of Urban Development and the Environment,

until 17 January 2007: Dr Michael Freytag (CDU)The official remuneration paid to the members of the Senate totalled EUR 1.7 mil-

lion in 2007.

5.2 Hamburg Parliament as at 31 December 2007Hamburg Parliament comprises 121 members from three parliamentary parties.

CDU parliamentary party (63 members):Ahrons, Barbara; Beuß, Wolfgang; Bliebenich, Bettina; Böttcher, Niels; Böttger, Olaf;

Capeletti, Bernd; Claußen, Bruno; Dietrich, Lars; Eggers, Karin; Ehlers, Inge; Engels,

Hartmut; Finck, Henning; Fischer, Lydia; Frankenberg, Egbert von; Freistedt, Marino;

Frommann, Jörn; Fuchs, Michael; Gienow, Hanna; Goldberg, Thies; Grapengeter,

Jens; Hamann, Jörg; Harlinghausen, Rolf; Hecht, Heiko; Heinemann, Robert; Heintze,

Roland; Hesse, Klaus-Peter; Hochheim, Dr Natalie; Hoth, Dietrich; Jäger, Dr Man-

fred; Jensen, Hans Heinrich; Jürs, Vera Antonia; Kempfert, Dr Angelika (since

01.11. 2007); Kleibauer, Thilo; Koop, Karen; Kraxner, Stefan (until 31.10. 2007);

Krüger, Harald; Kruse, Rüdiger; Lafrenz, Hans; Langhein, Dr A. W. Heinrich; Lemke,

Dittmar; Machaczek, Bettina; Martens, Brigitta; Mattner, Dr Andreas; Meyer-Kainer,

Marita; Müller-Kallweit, Wolfgang; Niedmers, Ralf; Ohlsen, Olaf; Ploog, Wolfhard;

Reinert, Bernd; Röder, Berndt; Roock, Hans-Detlef; Rusche, Dietrich; Sardina,

Alexander-Martin; Schira, Frank; Spethmann, Viviane; Stehr, Dr Diethelm; Stras-

burger, Stefanie; Thomas, Elke; Trepoll, André; Voet van Vormizeele, Kai; Wankum,

Andreas C.; Warnholz, Karl-Heinz; Wersich, Ekkehart; Winter, Herbert


SPD parliamentary party (41 members):Bestmann, Tanja; Boeddinghaus, Sabine; Böwer, Thomas; Brinkmann, Petra; Brün-

ing, Dr Barbara; Buss, Wilfried; Cords, Ingrid; Dees, Hans-Christoff; Dobritz, Werner;

Dräger, Gesine; Dressel, Dr Andreas; Duden, Barbara; Egloff, Ingo; Ernst, Britta;

Fiedler, Luisa; Frank, Günter; Grund, Uwe; Hilges, Dr Andrea (until 30. 09. 2007);

Kienscherf, Dirk; Klooß, Rolf-Dieter; Kretschmann-Johannsen, Lutz; Lein, Gerhard;

Mandel, Doris; Marx, Wolfgang; Neumann, Michael; Özoguz, Aydan; Petersen,

Dr Mathias; Pumm, Erhard; Quast, Jan; Riecken, Jan Peter; Rogalski-Beeck, Karin;

Rosenfeldt, Jenspeter; Schaal, Dr Monika; Schäfer, Dr Martin; Schmidt, Jürgen;

Schüssler, Jürgen (since 01.10.2007); Schulz, Rüdiger; Stapelfeldt, Dr Dorothee;

Timmermann, Karin; Veit, Carola; Vogt-Deppe, Silke; Zuckerer, Walter

GAL parliamentary party (17 members):Blömeke, Christiane; Goetsch, Christa; Gregersen, Martina; Güçlü, Nebahat; Husen,

Katja; Kerstan, Jens; Köncke, Gudrun; Lappe, Dr Verena; Lieven, Claudius; Lüh-

mann, Jörg; Maaß, Christian; Maier, Dr Willfried; Möller, Antje; Müller, Farid; Opitz,

Dr Heike; Sarrazin, Manuel; Steffen, Dr Till

5.3 Employees

For more information on the number and structure of employees in Hamburg’s ad-

ministration, please see the Senate reports in its annual personnel structure report.

Core accounting group

Total number of employees

less trainees

less employees on leave

less employees in partial retirement

less employees on sabbaticals

TOTAL

2007average

37,660

– 1,462

– 1,645

– 189

– 106

34,258

As of31. 12. 2007

37,648

– 1,360

– 1,680

– 179

– 125

34,304

Civil servantsEMPLOYEES

2007average

20,063

– 847

– 882

– 468

– 11

17,855

As of31. 12. 2007

20,117

– 915

– 842

– 488

– 8

17,864

Other employees

2007average

57,723

– 2,308

– 2,527

– 658

– 118

52,113

As of31. 12. 2007

57,765

– 2,275

– 2,522

– 667

– 133

52,168

Total

Employees

FURTHERINFORMATIONFREE ANDHANSEATIC CITYOF HAMBURG

136Free and Hanseatic City of Hamburg Further information

137Free and Hanseatic City of Hamburg Further information

Statement of holdings and investments 2007 138Note on the preparation of the annual and consolidated financial statements 153Glossary – Overview of selected terms 154Publishing information 156

138Free and Hanseatic City of Hamburg Further information / Overview of equity investments 2007

HOLDINGS AND INVESTMENTS AS OF 31. 12. 2007

Fully-consolidated organisations

Hochschule für Angewandte Wissenschaften Hamburg (HAW)

Landesbetrieb Erziehung und Berufsbildung

Landesbetrieb Großmarkt Obst, Gemüse und Blumen

Landesbetrieb Hamburgische Münze

Landesbetrieb Straßen, Brücken und Gewässer

Landesbetrieb Verkehr

Sondervermögen Hamburgisches Telekommunikationsnetz

f & w fördern und wohnen AöR

Hamburg Port Authority Anstalt des öffentlichen Rechts (HPA)

Hamburger Friedhöfe AöR

»Hamburgischer Versorgungsfonds« (HVF) AöR



Stadtreinigung Hamburg AöR (SRH)

Universitätsklinikum Hamburg-Eppendorf – Körperschaft des öffentlichen Rechts (UKE)

Notes

3)

3)

2), 3), 5)

2), 3)

3), 5)

3)

3)

3)

3)

3), 5)

3), 5)

3)

3)

3)

3)

Net surplus /deficit

in EUR thsd.2007

1,407

– 933

1,048

465

–10,503

1,774

0

34,092

104

243

1,365

1,100

33,136

5,505

– 7,752

Total equity

in EUR thsd.31. 12. 2007

11,950

20,394

30,883

13,916

– 8,666

10,012

78,026

27,312

563,378

9,090

513,352

750,766

947,967

65,027

42,853

Stake heldin per cent

31. 12. 2007

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

§ 15 (2) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (2) LHO

AöR

AöR

AöR

AöR

AöR

AöR

AöR

KöR

STATEMENT OFHOLDINGS AND INVESTMENTS 2007List of shareholdings of the Free and Hanseatic City of Hamburg as of 31. 12. 2007 (Sections 287, 313 (4) HGB)


HOLDINGS AND INVESTMENTS AS OF 31. 12. 2007 (cont.)

Fully-consolidated organisations (cont.)

Innovationsstiftung Hamburg

Bäderland Hamburg GmbH

Berufsbildungswerk Hamburg GmbH (BBW)

Berufsförderungswerk Hamburg GmbH (BFW)

BNM Baugesellschaft Neue Messe mbH

combisped Hanseatische Spedition GmbH

FFG Fahrzeugwerkstätten Falkenried GmbH

Fischmarkt Hamburg-Altona GmbH

Flughafen Hamburg GmbH (FHG)

GHL Gesellschaft für Hafen- und Lagereiimmobilien –Verwaltung Bei St. Annen mbH

GHL Gesellschaft für Hafen- und Lagereiimmobilien –Verwaltung Block D mbH

Grundstücksgesellschaft Polizeipräsidium mbH

GWG Gesellschaft für Wohnen und Bauen mbH

GWG-Beteiligungsgesellschaft mbH

HAB Hamburger Arbeit Beschäftigungsgesellschaft mbH

Hamburg Messe und Congress GmbH (HMC)

Hamburger Gesellschaft für Gewerbebauförderung mbH (HaGG-Vermögen)

Hamburger Wasserwerke GmbH

Hamburgische Staatsoper GmbH

HCCR Hamburger Container- und Chassis-Reparatur-Gesellschaft mbH

HGL Hamburger Gesellschaft für Luftverkehrsanlagen mbH

HGL Hamburgische Luft- und Raumfahrt Beteiligungs-gesellschaft mbH

HGV Hamburger Gesellschaft für Vermögens- und Beteiligungs-management mbH

Notes

3)

1)

—

3), 5)

—

1)

1)

1)

1), 5)

—

1)

—

—

1)

3)

1)

3)

1)

3), 7)

1)

1)

1)

3)


in EUR thsd.2007

1,054

0

1,443

– 850

0

0

0

0

0

381

0

6

16,101

0

573

0

4,879

0

– 132

0

0

0

788,190

Total equity

in EUR thsd.31. 12. 2007

52,655

38,093

21,039

8,488

25

12,600

4,100

3,491

63,760

6,971

8,184

28

244,060

358,663

10,943

11,679

3,525

141,679

325

1,909

985

25

3,319,660


31. 12. 2007

100.00

100.00

90.00

100.00

100.00

69.71

100.00

69.71

51.00

69.71

69.71

100.00

100.00

100.00

100.00

100.00

60.00

100.00

100.00

69.71

100.00

100.00

100.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Lübeck

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

Stiftung des öR

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




HHLA Container Terminal Burchardkai GmbH

HHLA Container Terminal Tollerort GmbH

HHLA Container Terminals GmbH, Hamburg (HHCT)

HHLA Container-Terminal Altenwerder GmbH

HHLA CTA Besitzgesellschaft mbH

HHLA Frucht- und Kühlzentrum GmbH

HHLA Intermodal GmbH

HHLA-Beteiligungsgesellschaft mbH

HSG Hanseatische Siedlungsgesellschaft mbH

HWW-Beteiligungsgesellschaft mbH

IMPF Hamburgische Immobilien Management Gesellschaft mbH

Pinneberger Verkehrsgesellschaft mbH (PVG)

Reisering Hamburg RRH GmbH

SAGA Erste Immobiliengesellschaft mbH

Service Center Burchardkai GmbH

SpriAG-Beteiligungsgesellschaft

SRH Verwaltungsgesellschaft mbH (SRHV)

TEREG Gebäudedienste GmbH

Unikai Hafenbetrieb GmbH

UNIKAI Lagerei- und Speditionsgesellschaft mbH

Vereinigung Hamburger Kindertagesstätten gGmbH

Hamburger Hochbahn Aktiengesellschaft (HOCHBAHN)



SpriAG – Sprinkenhof AG

Verkehrsbetriebe Hamburg-Holstein Aktiengesellschaft (VHH)

Notes

1)

1)

1)

—

—

—

1)

1)

—

1)

1)

1)

1)

1)

1)

1)

—

1)

1)

—

3), 5)

1)

—

3)

1)

1)


in EUR thsd.2007

0

0

0

55,050

2

2,053

0

0

– 953

0

0

0

0

0

0

0

– 3,400

0

0

2,055

9,647

0

– 12,137

53,386

0

0

Total equity

in EUR thsd.31. 12. 2007

74,938

7,669

91,410

118,595

5,243

14,187

29,039

133,805

8,891

613,828

25

10,939

2,064

7,200

26

17,370

8,997

1,731

3,500

4,259

79,090

141,934

313,002

481,461

6,486

17,122


31. 12. 2007

69.71

69.71

69.71

52.21

52.21

35.54

69.71

100.00

100.00

100.00

100.00

97.06

89.15

100.00

69.71

100.00

100.00

56.00

69.71

35.55

100.00

100.00

69.71

100.00

100.00

96.90

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Schenefeld

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

AG

AG

AG

AG

AG




GroundSTARS GmbH & Co. KG, Hamburg (GroundSTARS KG)

HOCHBAHN Beteiligungsgesellschaft mbH & Co.KG

HOCHBAHN Grundstücksverwaltungsgesellschaft mbH & Co.KG

Kommanditgesellschaft VHG Verwaltung Hamburgischer Gebäude GmbH & Co.

Projektierungsgesellschaft Finkenwerder mbH & Co. KG

FHK Flughafen Hamburg Konsortial und Service GmbH & Co. oHG

At equity

Dataport – Anstalt öffentlichen Rechts –

Statistikamt Nord

Asklepios Kliniken Hamburg GmbH

Gesellschaft zur Beseitigung von Sonderabfällen mbH

Hansaport Hafenbetriebsgesellschaft mbH

Pier Pro Integration Entwicklung und Rehabilitation Holding GmbH

Polzug Intermodal GmbH, Hamburg

Winterhuder Werkstätten GmbH (WW GmbH)

Eisenbahn Aktiengesellschaft (AKN)

HSH Nordbank AG

Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG

Other direct equity investments of FHH

HafenCity Universität (HCU)

Hochschule für bildende Künste (HfbK)

Hochschule für Musik und Theater (HfMT)

Kasse.Hamburg

Notes

5)

1)

1)

3)

3)

5)

3), 9)

3), 9)

9)

9)

1), 9)

3), 5), 9)

9)

3), 5), 11)

1), 3), 9)

3), 9)

9)

3), 6), 8)

3), 4), 8)

3), 8)

3), 5), 8)


in EUR thsd.2007

– 780

0

0

25,679

2,702

22,925

659

683

– 13,791

– 65

0

– 26

2,207

1,869

0

531

941

N / I

– 165

427

0

Total equity

in EUR thsd.31. 12. 2007

356

56,038

39,572

97,541

538,825

0

54,036

3,231

150,551

13,710

5,113

292

5,661

17,529

9,979

7,369,136

3,900

– 42

737

4,647

855


31. 12. 2007

51.00

100.00

100.00

100.00

100.00

51.00

41.67

47.50

25.10

50.00

34.16

44.03

23.21

80.19

50.00

35.36

34.86

100.00

100.00

100.00

100.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Altenholz

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Kaltenkirchen

Kiel and Ham.

Frankfurt a. M.

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

oHG

AöR

AöR

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

AG

AG

GmbH & Co. KG

§ 15 (2) LHO

§ 15 (2) LHO

§ 15 (2) LHO

§ 15 (2) LHO



Other direct equity investments of FHH (cont.)

Staats- und Universitätsbibliothek (SUB)

Technische Universität Hamburg-Harburg (TUHH)

Universität Hamburg (UHH)

Hamburger Volkshochschule

Laeiszhalle Musikhalle Hamburg

Landesbetrieb Geoinformation und Vermessung

Landesbetrieb Philharmonisches Staatsorchester

Landesbetrieb Planetarium

Landesbetrieb Rathaus-Service

Landwirtschaft der Jugend- und Frauenvollzugsanstalt Hahnöfersand

Zentrum für Personaldienste (ZPD)

Claus-Ramm-Stiftung

Ebba-Wittke-Nachlass

Israel Samuel Bonn – Legat

Ludwig-Peters-Stiftung

Luise-Gothmann Stiftung

Maria-Wolters-Stiftung

Richard-Bruns-Vermächtnis

Sondervermögen »Stadt und Hafen«

Stiftung Harburg

Eichdirektion Nord

KfW Bankengruppe

Stiftung Altonaer Museum

Stiftung Hamburger Kunsthalle

Stiftung Helms Museum

Stiftung Museum der Arbeit

Notes

3), 4), 5), 8)

3), 4), 11)

3), 4), 11)

3), 8)

3), 8)

2), 3), 5), 8)

3), 7), 8)

3), 8)

3), 8)

3), 7), 8)

3), 8)

3), 8)

3), 8)

3), 8)

3), 8)

3), 8)

3), 8)

3), 8)

3), 5), 11)

3), 8)

1), 3), 9), 14)

3), 9), 14)

3), 5), 8)

3), 8)

3), 5), 8)

3), 5), 8)


in EUR thsd.2007

577

6,646

7,717

– 5,073

362

– 14,431

– 5,103

– 216

103

– 41

– 268

0

1

N / I

1

0

0

0

– 6,512

1

0

1,392,936

1,236

3,893

175

455

Total equity

in EUR thsd.31. 12. 2007

3,074

11,389

12,538

1,429

183

13,842

370

9,594

1,009

1,373

2,339

20

24

29

67

8

3

5

N / I

70

2,397

12,480,500

– 565

– 1,072

– 166

– 211


31. 12. 2007

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

30.00

0.81

100.00

100.00

100.00

100.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Kiel

Frankfurt a. M.

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

§ 15 (2) LHO

§ 15 (2) LHO

§ 15 (2) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (1) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

§ 26 (2) LHO

AöR

AöR

Stiftung des öR

Stiftung des öR

Stiftung des öR

Stiftung des öR




Stiftung Museum für Hamburgische Geschichte

Stiftung Museum für Kunst und Gewerbe

Stiftung Museum für Völkerkunde

Nordwestdeutsche Klassenlotterie (NKL)

AMI – Arzneimitteluntersuchungsinstitut Nord GmbH

Centrum für Angewandte Nanotechnologie GmbH (CAN)

Deichtorhallen Hamburg GmbH

Deutsche Einheit Fernstraßenplanungs- und -bau GmbH (DEGES)

Deutsches Klimarechenzentrum GmbH (DKRZ)

European Screeningport GmbH

Fachinformationszentrum Karlsruhe, Ges. für wiss. techn. Information mbH (FIZ)

FilmFörderung Hamburg / Schleswig-Holstein GmbH (FFHSH)

Forschungszentrum Geesthacht GmbH (GKSS)

FWU Institut für Film und Bild in Wissenschaft und Unterricht gGmbH

Hamburg Marketing GmbH (HMG)

Hamburg Media School GmbH (HMS)

HamburgMusik gGmbH – Elbphilharmonie und Laeiszhalle Betriebsgesellschaft

Hamburg Tourismus GmbH (HHT)

hamburg.de Beteiligungs GmbH

Hamburger Verkehrsverbund GmbH (HVV)

Hamburgische Gesellschaft für Wirtschaftsförderung mbH (HWF)

Hochschul-Informations-System GmbH (HIS)

Internationale Bauausstellung Hamburg 2013 (IBA) GmbH

Internationale Gartenschau Hamburg (IGS) 2013 GmbH

Notes

3), 5), 8)

3), 4), 8)

3), 4), 8)

3), 7), 9), 14)

3), 9), 14)

3), 9), 14)

3), 8)

3), 9), 14)

3), 9), 14)

3), 5), 13)

3), 9), 14)

3), 8)

3), 4), 9), 14)

3), 9), 14)

3), 8)

3), 9), 14)

3), 6), 13)

3), 9), 14)

3), 9), 14)

1), 3), 8)

3), 9), 14)

3), 9), 14)

3), 5), 8)

3), 8)


in EUR thsd.2007

481

2

– 1,049

22,605

– 1,322

0

– 22

5

555

– 39

0

0

0

95

0

– 7,752

N / I

3

3

0

0

– 1,152

1

– 1,596

Total equity

in EUR thsd.31. 12. 2007

– 532

– 50

– 940

37,098

1,158

26

19

118

3,531

– 14

48

26

41

595

100

42,853

N / I

81

63

60

51

760

25

– 1,571


31. 12. 2007

100.00

100.00

100.00

15.87

16.67

34.80

100.00

8.93

27.38

40.85

2.17

74.80

1.25

6.25

55.00

100.00

100.00

49.50

25.66

85.50

42.00

4.17

100.00

66.60

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Bremen

Hamburg

Hamburg

Berlin

Hamburg

Hamburg

Karlsruhe

Hamburg

Geesthacht

Grünwald

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hanover

Hamburg

Hamburg

Legalform

Stiftung des öR

Stiftung des öR

Stiftung des öR

Eigenbetrieb öR

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




Kunst- und Ausstellungshalle der BR Deutschland GmbH

MAZ level one GmbH

Neue Schauspielhaus GmbH

Nordwest Lotto und Toto Verwaltungsgesellschaft mbH

Norgenta Norddeutsche Life Science Agentur GmbH

ReGe Hamburg Projekt-Realisierungsgesellschaft mbH

Thalia-Theater GmbH

TuTech Innovation GmbH

TÜV Hanse GmbH

Wissen und Medien gGmbH (IWF)

Wachstumsinitiative Süderelbe AG

Elbphilharmonie Hamburg Bau GmbH & Co. KG

hamburg.de GmbH & Co. KG

Other indirect equity investments of FHH

1. HaGG Hamburger Verwaltungsgesellschaft mbH

53° Nord Agentur und Verlag GmbH

ABG Ahrensburger Busbetriebsgesellschaft mbH

Aerotronic – Aviation Electronic Service GmbH

AHS Hamburg Aviation Handling Services GmbH

AIRSYS Airport Business Information Systems GmbH

AKK Altonaer Kinderkrankenhaus gGmbH

Ambulanzzentrum des UKE GmbH

Analytical Services North GmbH

ANG Airport Networks Gesellschaft mbH

Arbeitsstiftung Hamburg Gesellschaft für Mobilität im Arbeitsmarkt mbH

Notes

3), 9), 14)

3), 8)

3), 7), 8)

3), 8)

3), 9), 14)

3), 8)

3), 7), 8)

3), 5), 11)

3), 9), 14)

3), 4), 9), 14)

3), 5), 9), 14)

3), 13)

3), 9), 14)

8)

9), 14)

8)

8)

9), 14)

8)

8)

8)

8)

8)

9), 14)


in EUR thsd.2007

– 538

– 81

–18

2

0

134

254

369

31

0

519

– 60,427

– 2,185

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

– 2,413

292

– 205

29

50

776

912

553

– 827

51

513

38,073

– 2,114

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

2.44

100.00

100.00

100.00

50.00

100.00

100.00

100.00

10.00

10.00

8.72

100.00

25.66

60.00

41.61

56.20

51.00

33.38

51.00

94.00

100.00

100.00

51.00

45.00

Domicile

Bonn

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Göttingen

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Ahrensburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

AG

GmbH & Co. KG

GmbH & Co. KG

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH



Other indirect equity investments of FHH (cont.)

Asklepios Dienstleistungsgesellschaft mbH

Asklepios MVZ Nord GmbH

Asklepios Reha Klinik Bad Schwartau GmbH

ATG Alster-Touristik GmbH

BCH BüroConsult Hamburg Gesellschaft für Personal-dienstleistungen mbH

BeNEX GmbH

Berufliches Trainingszentrum Hamburg GmbH – BTZ

BFW Vermittlungskontor GmbH Hamburg

Biowerk GmbH

BTI Blohm und TEREG Industriedienstleistungen GmbH

C.A.T.S. Verwaltungs-GmbH

cantus Verkehrsgesellschaft mbH

Cap San Diego Betriebsgesellschaft mbH

Chance Beschäftigungsgesellschaft mbH

Cleaning in Gesundheitsbetrieben CleaniG GmbH

CONSULAQUA Hamburg Beratungsgesellschaft mbH

CSP Commercial Services Partner GmbH

ctd Container-Transport-Dienst GmbH

CTL Container Terminal Lübeck GmbH

CTT Besitzgesellschaft mbH

Cuxcargo Hafenbetrieb Verwaltungs-GmbH

DHU Gesellschaft für Datenverarbeitung Hamburger Umschlagsbetriebe mbH

Diagnostic and Science GmbH (DAS)

Elbe Werkstätten GmbH

EVG Elmshorner Verkehrsgesellschaft mbH

Notes

9), 14)

9), 14)

9), 14)

8)

8)

12)

8)

8)

9), 14)

9), 14)

8)

9), 14)

9), 14)

8)

9), 14)

8)

8)

8)

8)

8)

9), 14)

9), 14)

9), 14)

3), 4), 9)

8)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

25.10

25.10

25.10

100.00

100.00

51.00

90.89

100.00

47.50

28.00

51.00

25.50

23.21

100.00

25.10

100.00

51.00

69.71

69.71

69.71

34.86

24.80

50.00

41.61

97.06

Domicile

Hamburg

Hamburg

Bad Schwartau

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Kassel

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Lübeck

Hamburg

Cuxhaven

Hamburg

Schwerin

Hamburg

Elmshorn

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




FBG Fulda Bus GmbH

Filmfest Hamburg GmbH

ForEx Gutachten GmbH

Friedrich Jasper Rund- und Gesellschaftsfahrten GmbH

GAC German Airport Consulting GmbH

GGAB Gemeinnützige Gesellschaft für Alten- und Behindertenhilfe mbH

GHL Erste Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH

GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block T mbH

GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH

GLOBUS 24 Gesellschaft für Leistungen zur Omnimobilität mit Bus und Schiene mbH

GroundSTARS Verwaltungs-GmbH

Grundstücksgesellschaft Billstr. 82-84 mbH

Güterkraftverkehr Hamburg-Holstein GmbH

GWG Gewerbe Gesellschaft für Kommunal- und Gewerbeimmobilien mbH

HAB Service Gesellschaft mbH

HADAG Verkehrsdienste GmbH

HafenCity Hamburg GmbH

HaGG Hamburger Gesellschaft für Grundstücksverwaltung und Projektplanung mbH (HaGG-Projekt)

Hamburg Innovation GmbH

Hamburg Travel GmbH

Hamburger Krematoriums-Transport-Gesellschaft mbH

Hamburger Stadtentwässerung HSE Abwasser Service Gesellschaft mbH

Notes

8)

8)

8)

8)

8)

9), 14)

8)

8)

8)

8)

8)

8)

9), 14)

8)

8)

8)

8)

8)

8)

9), 14)

8)

8)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

51.00

74.80

100.00

100.00

51.00

50.00

69.71

69.71

69.71

97.06

51.00

100.00

50.00

100.00

100.00

100.00

100.00

60.00

90.00

49.50

80.00

100.00

Domicile

Fulda

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Schenefeld

Hamburg

Hamburg

Kaltenkirchen

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




Hamburger Verkehrsmittel-Werbung GmbH

Hamburger Werkstatt GmbH – Werkstatt für behinderte Menschen

Hamburgisches WeltWirtschaftsInstitut gGmbH – HWWI

Hanseatisches Schlackenkontor GmbH (HSK)

HanseCom Gesellschaft für Informations- und Kommunikationsdienstleistungen mbH

HanseGM Gebäudemanagement GmbH

HC Hamburg Consult Gesellschaft für Verkehrsberatung und Verkehrsmanagement mbH

HEG Hamburger Entsorgungsgesellschaft mbH

HHB Hamburg-Holstein-Bus GmbH

HHLA Intermodal Verwaltung GmbH

HHLA Personal-Service GmbH

HHLA Rhenus Logistics Altenwerder GmbH

HHLA Rhenus Logistics Altenwerder Verwaltungs-GmbH

HHLA Rhenus Logistics GmbH

HHLA Rosshafen Terminal GmbH

HHW Hamburger Hochbahn-Wache GmbH

HNB Verwaltungsgesellschaft mbH

HOCHBAHN-Verwaltungsgesellschaft mbH

Holsteiner Wasser GmbH

HPC Hamburger Port Consulting GmbH

HPTI Hamburger Port Training Institute GmbH

HSE Hamburger Stadtentwässerung Verwaltungsgesellschaft

HSE KOM Hamburger Stadtentwässerung Kommunikationsnetze

HWC Hamburger Wohn Consult Gesellschaft für wohnungswirts. Beratung mbH

HWWi Consult GmbH

Notes

9), 14)

9)

9), 14)

9), 14)

7), 9), 14)

9), 14)

9), 14)

8)

8)

8)

8)

9), 14)

8)

9), 14)

12)

8)

8)

8)

9), 14)

8)

8)

8)

8)

8)

9), 14)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

24.90

47.01

50.00

20.84

26.00

28.00

49.00

50.40

96.98

69.71

69.71

34.19

52.32

35.55

69.71

100.00

51.00

100.00

50.00

69.71

69.71

100.00

100.00

100.00

50.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Neumünster

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




hySOLUTIONS GmbH

International Center for Graduate Studies der Universität Hamburg GmbH (ICGS)

Junge Werkstatt – bbw Hamburg GmbH

KFE Energie GmbH

KFE Klinik Facility-Management Eppendorf GmbH

KHG Konzertkasse Hauptbahnhof GmbH

KLE Klinik Logistik Eppendorf GmbH

Klinik Gastronomie Eppendorf GmbH

KME Klinik Medizintechnik Eppendorf GmbH

Kombi-Transeuropa Terminal Hamburg GmbH

komm.pass.arbeit gGmbH

KSE Klinik Service Eppendorf GmbH

KTE Klinik Textil Eppendorf GmbH

Kühne School of Logistics and Management GmbH

KVG Kieler Verkehrsgesellschaft mbH

KVip Kreisverkehrsgesellschaft in Pinneberg GmbH

KVP Kraftwerk Peute Verwaltungsgesellschaft mbH

Logisyst GmbH

LZU Leercontainer Zentrum Unikai GmbH

Martini-Klinik am UKE GmbH

Media Desk Informationsstelle für europäische Filmförderung GmbH

MediGate GmbH

METRANS Internat. Spedition und Transporte (Deutschland) GmbH

Mobilitätszentrale Nord

MPCH Medizinisches PräventionsCentrum Hamburg GmbH

Notes

8)

8)

8)

13)

10)

9), 14)

8)

8)

8)

9), 14)

8)

8)

8)

9), 14)

9), 14)

9), 14)

9), 14)

8)

9), 14)

8)

8)

8)

9), 14)

9), 14)

9), 14)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

61.00

100.00

90.00

51.00

51.00

24.75

100.00

51.00

51.00

26.11

100.00

51.00

51.00

26.00

27.16

46.55

100.00

83.60

45.31

100.00

74.80

100.00

34.92

45.00

49.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Kiel

Pinneberg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Uetersen

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




Multimedia Kontor Hamburg GmbH (MMKH)

MVZ am Altonaer Kinderkrankenhaus GmbH (MVZ AKK)

NBB Norddeutsche Bus-Beteiligungsgesellschaft mbH

NBE nordbahn Eisenbahnverwaltungsgesellschaft mbH

NOZ Norddeutsches Zyklotron GmbH

ODEG Ostdeutsche Eisenbahn GmbH

ODIG Ostdeutsche Instandhaltungsgesellschaft mbH

Orthmann’s Reisedienst »ORD« GmbH

P+R-Betriebsgesellschaft mbH

PGF Planungsgesellschaft Finkenwerder mbH in Liquidation

Pier Service und Consulting GmbH

PIER Tempo Zeitarbeit GmbH

Polder – Seehäfen – Harburg GmbH

Privita GmbH

Pro Quartier Hamburg Gesell. für Sozialmanagement und Projekte mbH

Promedig gGmbH

ProVivere GmbH

RMH Real Estate Maintenance Hamburg GmbH

RMVB Ratzeburg-Möllner Verkehrsbetriebe GmbH

S.A.E.M.S. Verwaltungs-GmbH, Hamburg (SAEM Verwaltung)

SAGA IT Services GmbH

SBG Süderelbe Bus GmbH

SCA Service Center Altenwerder GmbH

Schleswig-Holstein-Bahn GmbH

School of Life Science Hamburg gGmbH

Schulservice Hamburg Gesellschaft für Facility Management mbH

Notes

8)

8)

8)

8)

13)

9), 14)

9), 14)

8)

8)

8)

9), 14)

9), 13)

9), 14)

9), 14)

8)

9), 14)

9), 14)

11)

8)

9), 14)

8)

8)

11)

9), 14)

8)

13)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

100.00

94.00

55.42

50.50

100.00

25.50

25.50

92.06

95.00

100.00

44.03

44.03

31.27

25.10

100.00

25.10

25.10

51.00

73.64

30.60

100.00

100.00

52.21

50.00

100.00

100.00

Domicile

Hamburg

Hamburg

Hamburg

Kaltenkirchen

Hamburg

Parchim

Parchim

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Ratzeburg

Hamburg

Hamburg

Hamburg

Hamburg

Kaltenkirchen

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




SecuServe Aviation Security and Services Hamburg GmbH (SecuServe Hamburg)

SecuServe Aviation Security and Services Holding InternationalGmbH (SecuServe Holding)

SGG Städtische Gebäudeeigenreinigung GmbH

SIM Sprinkenhof Immobilien Management GmbH

SRH Beteiligungsgesellschaft mbH (SRHB)

Stadtverkehr Lübeck GmbH

STARS Verwaltungs-GmbH, Hamburg (STARS Verwaltung)

Stilbruch Betriebsgesellschaft mbH

STR Stadtteilreinigungsgesellschaft mbH

Textilversorgung in Gesundheitsbetrieben TexiG GmbH

TFG Verwaltungs GmbH

UKE Consult und Management GmbH

Ulrich Stein GmbH

Uniconsult Universal Transport Consulting GmbH

Universitäres Herzzentrum Hamburg GmbH (UHZ)

Universitäres Herz- und Gefäßzentrum Hamburg GmbH

Universität Hamburg Marketing GmbH

UTZ, Universitäres Transplantationszentrum Hamburg gGmbH

Vereinigung KITA Servicegesellschaft mbH

Vereinigung Kitas Nord gGmbH

Verwaltung Hamburgische Gebäude VHG GmbH

Verwaltungsgesellschaft Finkenwerder mbH

Verwaltungsgesellschaft MVR Müllverwertung Rugenberger Damm mbH

VKN Vetriebsgesellschaft Kompostprodukte Nord mbH

WERT Wertstoff-Einsammlung GmbH

Notes

8)

8)

8)

8)

8)

9), 14)

9), 14)

8)

8)

9), 14)

9), 14)

9), 14)

11), 14)

8)

10)

8)

8)

8)

8)

8)

8)

8)

9), 14)

9), 14)

8)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

51.00

51.00

100.00

100.00

100.00

36.92

26.01

100.00

100.00

25.10

34.86

40.00

35.55

69.71

100.00

51.00

100.00

100.00

100.00

100.00

100.00

100.00

25.00

48.85

100.00

Domicile

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Lübeck

Hamburg

Hamburg

Hamburg

Hamburg

Frankfurt a. M.

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Legalform

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH

GmbH




WSH Wohnservice Hamburg Gesellschaft für wohnungswirtschaftl. Dienste mbH

Zentral-Omnibus-Bahnhof »ZOB« Hamburg GmbH

HADAG Seetouristik und Fährdienst AG

METRANS AG, Prague / Czech Republic

Uetersener Eisenbahn AG

1. HaGG Hamburger Immobilien Beteiligung GmbH & Co. KG

Biowerk Hamburg GmbH & Co. KG

CATS Cleaning and Aircraft Technical Services GmbH & Co. KG

HNB Hamburger Nahverkehrs-BeteiligungsgesellschaftmbH & Co. KG

HSE Hamburger Stadtentwässerung Immobiliengesellschaft mbH & Co. KG

KPP Kraftwerk Peute Projektmanagement GmbH & Co.KG

Molita Vermietungsgesellschaft mbH & Co. Objekt Messe Hamburg KG

MPCH Medizinisches PräventionsCentrum Hamburg GmbH & Co. KG

MVR Müllverwertung Rugenberger Damm GmbH & Co.KG

NBE nordbahn Eisenbahngesellschaft mbH & Co.KG

SAEMS Special Airport Equipment and MaintenanceService GmbH & Co. KG

STARS Special Transport and Ramp Services GmbH & Co. KG (STARS KG)

WoWi Media GmbH & Co. KG

Cuxcargo Hafenbetrieb GmbH & Co.KG

Rechenzentrum der Hamburger Staatstheater (GbR)

SC HPC Ukraina, Odessa

METRANS Danube a. s., Danube / Slovakia

Notes

8)

8)

8)

9), 14)

9), 14)

12)

9), 14)

8)

8)

8)

8)

12)

9), 14)

9), 14)

8)

9), 14)

9), 14)

9), 14)

9), 14)

8)

10)

9), 14)


in EUR thsd.2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—


31. 12. 2007

100.00

83.29

100.00

34.92

44.16

60.00

47.50

51.00

51.00

100.00

100.00

100.00

50.00

25.00

50.50

30.60

26.01

29.35

34.86

100.00

69.71

34.92

Domicile

Hamburg

Hamburg

Hamburg

Czech Rep.

Uetersen

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Hamburg

Kaltenkirchen

Hamburg

Hamburg

Hamburg

Cuxhaven

Hamburg

Ukraine

Slovakia

Legalform

GmbH

GmbH

AG

AG

AG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

GmbH & Co. KG

KG

GbR

Ltd.

a.s.




METRANS Danubia Kft., Gyor / Hungary

Polzug Intermodal Polska sp. z o.o., Warsaw / Poland

Notes

9), 14)

9), 14)


in EUR thsd.2007

—

—

Total equity

in EUR thsd.31. 12. 2007

—

—


31. 12. 2007

34.92

23.21

Domicile

Hungary

Poland

Legalform

Kft.

Sp. z o.o.

Equity and the net surplus/deficit are not reported for other indirect equity investments. The statement of holdings and investments lists 331 of the 390 Group organisations.It does not list the indirect equity investments in which Hamburg holds an interest of less than 20 per cent.

1) No net surplus /deficit is reported since a profit and loss transfer agreement is in place

2) Net surplus /deficit is reported before payment to the budget

3) Direct equity investments of the Free and Hanseatic City of Hamburg, reported under long-term financial assets in the annual financial statements for the core administration

4) The annual financial statements for 2007 were not available. The last available financial statements were used

5) The financial statements are preliminary

6) No financial statements are available for one indirect equity investment

7) The financial year of this subsidiary deviates from that of FHH

8) Not fully consolidated for reasons of immateriality

9) Not fully consolidated because the equity interest does not exceed 50 per cent

10) Not fully consolidated because it is a foreign subsidiary

11) Not fully consolidated because the cost and delay for obtaining the information for preparing the consolidated financial statements would be prohibitive

12) Not fully consolidated because the direct parent is not fully consolidated for reasons of immateriality

13) Not fully consolidated or included at equity because it was added not until 2007

14) Not included at equity for reasons of immateriality

N / I: No information available

153Free and Hanseatic City of Hamburg Further information / Note on the preparation of the financial statements

NOTEON THE PREPARATION OF THE 2007 ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS

The 2007 annual and consolidated financial statements and this Annual Report were prepared by the Ministry of Finance. To intro -

duce group accounting in the Hamburg administration, a project was initiated in the Annual and Consolidated Financial State-

ments section. This developed the management basis, organised the Hamburg-wide confirmation of balances and co- ordin -

ation processes and created the technical platform for the consolidated opening balance sheet and the first set of consolidated


The project work for the preparation of the annual and consolidated financial statements was supported by■ PricewaterhouseCoopers AG WPG (introduction of group accounting)■ IDS Scheer AG (annual financial statements for the core administration)

In addition to the cameralistic book-keeping and accounting, the audit court also audits the city’s annual and consolidated

financial statements in accordance with German commercial law. These audits serve the purpose of quality assurance and are

designed to ensure that the additional accounting and reporting is carried out properly. A separate audit certificate on the an-

nual and consolidated financial statements is not required as long as accounting in accordance with commercial principles is

not mandated by law.

The audit court will report on the findings of the audit of the 2007 annual and consolidated financial statements presented here

in its 2009 annual report. In its 2008 annual report, the audit court reported on the audit of the annual financial statements for

the year ended 31 December 2006 (cf. Nos. 22 – 29 there and the appendix to the annual report).

The remarks of the audit court were implemented in essence.

154Free and Hanseatic City of Hamburg Further information / Glossary

Annual financial statementsAnnual financial statements consist of the balance sheet, the statement of financial performance, the notes and a management

report. Through the introduction of double-entry accounting, cameralistic (cash-based) accounting is being supplemented in

Hamburg by annual financial statements.

Balance sheetIn the balance sheet, the values of property (assets) and capital (liabilities) are balanced against one another. The left-hand side

of the balance sheet therefore provides information on how the funds deployed are used, while the right-hand side provides in-

formation on the origin of funds by showing debt and equity.

Cash flow statementThe cash flow statement contains all inflows and outflows of funds in a specific period. As long as cash-based (cameralistic)

accounting remains the dominant system in the Free and Hanseatic City of Hamburg, cash flows will be reported within the

framework of the cameralistic budget accounting.

Debt Debt is shown on the liabilities side of the balance sheet. It describes current and future debts (liabilities and provisions that are

liabilities in nature) to third parties that were incurred legally or caused economically. Debt is one of the sources of funding

and, taken as a ratio to equity, indicates the percentage of assets attributable to borrowing.

Depreciation, amortisation and write-downsDepreciation, amortisation and write-downs record the erosion on tangible and intangible items of fixed assets. With this item,

the purchase or production cost of these assets is recognised in income over several accounting periods.

Double-entry accountingIn double-entry accounting, entries are made in at least two accounts. This form of accounting makes use of balance sheet ac-

counts (for preparing a balance sheet) and profit and loss accounts (for preparing a statement of financial performance).

GLOSSARY –OVERVIEW OF SELECTED TERMS

155Free and Hanseatic City of Hamburg Further information / Glossary

EquityEquity is an accounting variable. In double-entry accounting, it is understood as the difference between an organisation’s prop-

erty (assets) and debts (liabilities and provisions) as well as special items. A net surplus increases equity, whereas a net deficit

reduces it.

LiabilitiesA liability constitutes an obligation to perform. This obligation may be based on an agreement (contract) or another legal basis.

Management reportGerman commercial law requires corporations to prepare a management report in addition to their annual financial statements.

This report contains interpretations of the profit or loss and further comments on the organisation’s general economic situa-

tion.

NotesThe notes are a component of the annual financial statements. The role of the notes is to explain and supplement the informa-

tion contained in the balance sheet, the statement of financial performance, the cash flow statement and the sub-accounts.

ProvisionsProvisions are liabilities items in the balance sheet that are required to be recognised for uncertain obligations. Provisions must

be recognised for expenses for which the cause is certain at the balance sheet date but their amount and date on which they

will fall due are uncertain. Some examples are pension provisions, provisions for unperformed maintenance.

Receivables If goods or services are delivered or supplied against subsequent payment (»on credit«), the seller has a receivable (claim for

performance) vis-à-vis the purchaser equal to the invoice amount on the due date.

Statement of changes in fixed assetsThe statement of changes in fixed assets provides an overview of changes in individual items of fixed assets within a financial

year.

Statement of financial performanceThe statement of financial performance shows the net surplus or deficit for the year by comparing expenses and income in a

given financial year. If income exceeds expenditure, a net surplus is produced; otherwise a net deficit is shown. The statement

of financial performance corresponds to the commercial income statement.

Transfer paymentsTransfer payments are payments in cash or in kind that a person receives without having to provide a direct service in return.

The term is mainly applied to benefits provided by the government to its citizens. Government transfer payments in Germany

include Arbeitslosengeld II (long-term, lower-level unemployment benefits), Sozialhilfe (social welfare), BAföG (student loans

and grants), Elterngeld (parental allowance) and Kindergeld (children’s allowance).

156Free and Hanseatic City of Hamburg Publishing information

PUBLISHING INFORMATION

Annual Report teamHans-Hinrich Coorssen (Head of the Finance Ministry’s Budget and Task Planning Office) would like to thank■ all staff in the specialist departments and offices who were involved in preparing the annual and consolidated financial state-

ments and the Annual Report. Special thanks to the asset accountants, the inventory officers, the IC officers and Group con-

tacts as well as to the colleagues from the Budget and Task Planning Office and the Asset and Investment Management Of-

fice;■ all staff in the affiliated organisations of the Free and Hanseatic City of Hamburg who were actively involved in preparing the

first set of consolidated financial statements;■ Ulrike Lempert (Head of the Executive Office) and her staff: Christoph Klamp, Caroline Klawitter, Sebastian Panknin;■ Claus Rüter (Head of the Budget and Policy department) and, above all, the team of the Annual and Consolidated Financial

Statements section: Christian Heine, Karin Seeger, Monika Heitmann, Julia Sprei, Klaus Riebau, Bernd Anders, Helge Asbahr,

Christa Bossow, Tanja Ehrlich, Elisabeth Gay, Ralf Liesberg, Werner Lux, Wolfgang Marx, Birgit Mincke, Petra Nickel, Olga

Ott, Lars Pohl, Stefanie Scholz, Roswitha Schuldt, Christin Suppan, Arne Trost, Holger Voß.

Published byFree and Hanseatic City of Hamburg

Ministry of Finance

Gänsemarkt 36

20354 Hamburg

www.hamburg.de/finanzbehoerde

EnquiriesPress officer of the Ministry of Finance

+49 (0) 40 - 42823 - 1662

Photoswww.bildarchiv-hamburg.de

www.mediaserver.hamburg.de

www.hamburgfotos.de

www.hochbahn.de

www.istockphoto.com

Concept, design and translationCAT Consultants GmbH & Co., Hamburg As of: Hamburg, October 2008

www.hamburg.de

Free and Hanseatic City of HamburgMinistry of FinanceGänsemarkt 3620354 HamburgPhone: +49 (0) 40 - 42823 - 1662

€¦ · Key data of the Hamburg Group I Condensed balance sheet 2007 II Statement of financial performance 2007/Group structure III FOREWORD 01 …

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