The HOCHTIEF Aktiengesellschaft annual financial statements were prepared in accordance with the German Commercial Code (HGB) and Stock Corporations Act (AktG) and have been given an unqualified auditors' report by auditors Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft. The 2008 Annual Financial Statements and Management Report of HOCHTIEF Aktiengesellschaft are published in the electronic Bundesanzeiger (Federal Official Gazette).
| (EUR million) | 2008 | 2007 |
|---|---|---|
| Sales | 195.0 | 150.4 |
| Changes in the balance of construction work in progress | 0.7 | - 0.4 |
| Other operating income | 95.4 | 379.8 |
| Materials | (116,9) | - 96.7 |
| Personnel costs | (83,2) | (99,7) |
| Depreciation and amortization | (6,2) | (7,5) |
| Other operating expenses | (112,8) | (136,4) |
| Net income from financial assets | 182.8 | 44.6 |
| Net interest income | (17,5) | 8.4 |
| Writedowns on financial assets and marketable securities | (35,1) | (205,2) |
| Profit from ordinary activities | 102.2 | 37.3 |
| Income taxes | (4,3) | (1,9) |
| Net profit before changes in reserves | 97.9 | 35.4 |
| Net profit brought forward | 32.6 | 4.6 |
| Changes in revenue reserves | (32,5) | 83.6 |
| Unappropriated net profit | 98.0 | 123.6 |
| (EUR million) | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Fixed assets | ||
| Intangible assets and plant and equipment | 42.7 | 45.9 |
| Financial assets | 1,853.9 | 1,515.0 |
| 1,896.6 | 1,560.9 | |
| Current assets | ||
| Inventories, receivables other assets, and prepaid expenses | 908.7 | 985.3 |
| Cash and cash equivalents, and marketable securities | 905.0 | 648.2 |
| 1,813.7 | 1,633.5 | |
| Total assets | 3,710.3 | 3,194.4 |
| Shareholders' equity | 1,489.4 | 1,482.4 |
| Provisions | 388.7 | 438.5 |
| Liabilities | 1,832.2 | 1,273.5 |
| Total liabilities | 3,710.3 | 3,194.4 |
HOCHTIEF Aktiengesellschaft's subscribed capital of EUR 179.2 million is divided, as in previous years, into 70,000,000 no-par-value shares. Following purchases of the Company's own shares, an amount of EUR 186.9 million – equal to the carrying amount of the treasury stock – was reclassified in accordance with statutory requirements from other revenue reserves to the reserve for own stock. Shareholders' equity equaled 40.1 percent of total assets, versus 46.4 percent in 2007.
HOCHTIEF Aktiengesellschaft's net profit before changes in reserves for 2008 was EUR 97.9 million. In accordance with the resolution of the General Shareholders' Meeting of May 8, 2008, EUR 32.5 million of the 2007 net profit before changes in reserves was transferred to revenue reserves. Including profit carried forward from the previous year (EUR 32.6 million), unappropriated net profit comes to EUR 98 million.
The unappropriated net profit of HOCHTIEF Aktiengesellschaft for fiscal 2008 in the amount of EUR 98,000,000.00 will be used to pay a dividend of EUR 1.40 per eligible nopar- value share, and the amount of the dividend that would have been payable on non-eligible shares, amounting to EUR 9,799,584.20, will be carried forward.
The dividend is payable on the day following the General Shareholders' Meeting.
The number of eligible shares may change by the date of the General Shareholders' Meeting. In this event, a revised proposal for the appropriation of net profit will be submitted to the General Shareholders' Meeting, leaving the dividend unchanged at EUR 1.40 per eligible no-par-value share.
The capital reserve contains premiums received when new stock is issued by the Company.
The Executive Board is unaware of any restrictions on voting rights or transfers of securities.
CARIÁTIDE S.A., Avda. Pio XII n° 102, 28036 Madrid, Spain, gave notice with reference to Section 21 (1) of the German Securities Trading Act (WpHG) that its share of voting rights in HOCHTIEF Aktiengesellschaft was 25.08 percent on April 24, 2007. Identical notification was given by ACS, Actividades de Construcción y Servicios, S.A., Avda. Pio XII n° 102, 28036 Madrid, Spain, together with notice that the voting rights concerned are held by CARIÁTIDE S.A. and are attributable to ACS by virtue of its ownership interest in CARIÁTIDE S.A. under Section 22 (1) 1 of the German Securities Trading Act.
There are no shares with special control rights. The Executive Board is not aware of any employee shares where the control rights are not exercised directly by the employees.
Statutory rules on the appointment and replacement of Executive Board members are contained in Sections 84 and 85 and statutory rules on the amendment of the Articles of Association in Sections 179 and 133 of the German Stock Corporations Act (AktG). Under Section 7 (1) of the Company's Articles of Association, the Executive Board comprises at least three individuals. Section 23 (1) of the Articles of Association provides that resolutions of the General Shareholders' Meeting require a simple majority of votes cast unless there is a mandatory requirement stipulating a different majority. In instances where the Act requires a majority of the capital stock represented at the time of the resolution in addition to a majority of votes cast, Section 23 (3) of the Articles of Association provides that a simple
Pursuant to Section 4 (5) of the Articles of Association, the Executive Board is authorized subject to Supervisory Board approval to increase the capital stock by issuing new no-par-value bearer shares for cash or non-cash consideration in one or more issues up to a total of EUR 53,760,000 by or before May 17, 2010 (Authorized Capital I). Detailed provisions are contained in the stated section of the Articles. Pursuant to Section 4 (4) of the Articles of Association, the Company's capital stock has been conditionally increased by up to EUR 38,400,000 divided into up to 15,000,000 no-par-value bearer shares (conditional capital). Detailed provisions are contained in the stated section of the Articles.
Authorization to repurchase shares: The Company is authorized by resolution of the General Shareholders' Meeting of May 8, 2008 to repurchase its own shares in accordance with Section 71 (1) 8 of the German Stock Corporations Act (AktG). The authorization expires on November 7, 2009. It is limited to ten percent of the capital stock at the time of the General Shareholders' Meeting resolution, with the quantity of shares able to be acquired by the use of call options limited to a maximum of five percent of the capital stock at the time of the resolution. The authorization can be exercised directly by the Company or by third parties engaged by the Company and allows the share repurchase to be executed in one or more installments covering the entire amount or any fraction. The repurchase may be effected through the stock exchange or by public offer to all shareholders, or by the issue to the shareholders of rights to sell shares or by the use of call options. The conditions governing the repurchase are set forth in detail in the resolution.
By resolution of the General Shareholders' Meeting of May 8, 2008, the Executive Board is authorized, subject to Supervisory Board approval, in the event of a sale of repurchased shares effected by way of an offer to all shareholders, to issue subscription rights to the shares to holders
The HOCHTIEF Aktiengesellschaft Executive Board is authorized, subject to Supervisory Board approval and the conditions set out in the following, to offer and transfer repurchased shares other than through the stock exchange and other than by way of an offer to all shareholders. Such transactions may take place in the course of acquisitions of business enterprises in whole or part and in the course of mergers. They are also permitted for the purpose of obtaining a listing for the Company's shares on foreign stock exchanges where it is not yet listed. The shares may also be offered for purchase by employees or former employees of the Company or its affiliates. Holders of warrant-linked and/or convertible bonds which the Company or a Group company subordinate to it issues or has issued under the authorization granted at the General Shareholders' Meeting of May 18, 2005 (agenda item 10) may also be issued with the shares upon exercising the warrant and/or conversion rights and/or obligations attached to the bonds.
Shareholders' statutory subscription rights to such shares are barred pursuant to Sections 71 (1) 8 and 186 (3) and (4) of the German Stock Corporations Act (AktG) to the extent that the shares are used in exercise of the authorizations set out above.
The Executive Board is also authorized, subject to Supervisory Board approval, to retire repurchased shares without a further resolution of the General Shareholders' Meeting being required for the share retirement itself or its execution.
The conditions governing awards of subscription rights and the sale, transfer and retirement of treasury stock are
On October 24, 2007, HOCHTIEF Aktiengesellschaft and a syndicate of international banks signed a long-term global revolving guarantee facility for a total of EUR 2 billion and renegotiated both an earlier revolving credit facility for a total of EUR 600 million and an earlier revolving guarantee facility for a total of EUR 291.5 million. The three facilities have substantively identical change-of-control provisions. Lenders may each withdraw from their credit exposure subject to satisfaction of an agreed condition precedent if negotiations with the borrower to continue the facility have failed, such negotiations having given consideration to the credit standing of the company taking control, the risk of any change in corporate strategy and the risk of the lenders being restricted in any way in provision of the facilities. The condition precedent is satisfied if a party, or group of parties acting in concert, secures control of the borrower within the meaning of Section 29 (2) of the German Securities Acquisition and Takeover Act (WpÜG). Lenders may give notice of termination of their credit exposure within 70 days of it becoming known to HOCHTIEF Aktiengesellschaft that the condition precedent has been satisfied, subject to a minimum of ten days to consider the options available.
HOCHTIEF Aktiengesellschaft signed two EUR 100 million promissory note loan agreements (Schuldscheindarlehen) – one each with two separate banks – on May 24, 2004. Each of the loan agreements and the loans extended under them can be terminated without notice by the respective creditor if at least 50 percent of HOCHTIEF Aktiengesellschaft"s capital stock is taken over by, or control of HOCHTIEF Aktiengesellschaft is otherwise transferred to, one or more other business enterprises.
HOCHTIEF Aktiengesellschaft signed a EUR 50 million global revolving credit facility with a German bank on July 8, 2008. If there is a change of control, the credit facility can be terminated after 60 days unless agreement has been reached on its continuation. A change of control is defined
HOCHTIEF Aktiengesellschaft signed two promissory note loan agreements (Schuldscheindarlehen) for EUR 50 million and EUR 200 million with a German bank on July 4, 2008. If there is a change of control, HOCHTIEF Aktiengesellschaft must repay the loan early unless lender and borrower reach agreement on its continuation within 60 days of announcement of the change of control and the lender does not demand early repayment within ten days of the 60-day period expiring. A change of control is defined in this context as a party, or group of parties acting in concert within the meaning of Section 30 (2) of the German Securities Acquisition and Takeover Act (WpÜG), securing control of HOCHTIEF Aktiengesellschaft within the meaning of Section 29 (2), WpÜG.
On October 23, 2007, HOCHTIEF Aktiengesellschaft signed a general counter indemnity with four US surety companies to secure a USD 5 billion bonding line provided by the surety companies. The general counter indemnity contains a change-of-control provision giving them the right, if an agreed condition precedent is satisfied, to require HOCHTIEF Aktiengesellschaft to submit up to USD 500 million in cash by way of security. The condition precedent is satisfied if a party, or group of parties acting in concert, acquires in total 30 percent or more of all shares in HOCHTIEF Aktiengesellschaft or otherwise secures control of HOCHTIEF Aktiengesellschaft within the meaning of Section 29 (2) of the German Securities Acquisition and Takeover Act (WpÜG). The security payment must then be made within 30 bank working days of notification that it is required.
Through subsidiaries, HOCHTIEF Aktiengesellschaft indirectly holds an ownership interest – as general partner, trading as HOCHTIEF AirPort Capital Verwaltungs GmbH
HOCHTIEF PPP Solutions GmbH has sold stakes in two Chilean toll road project companies. Under the contract of sale, the seller is obliged in certain circumstances to provide the buyer with a guaranteed present value greater than the purchase price. HOCHTIEF Aktiengesellschaft has furnished a guarantee for the seller's obligations. A change of control at HOCHTIEF Aktiengesellschaft is consequently one of the circumstances that trigger the guaranteed present value obligation. The contract defines a change of control as when a party, or group of parties acting in concert, secures control of HOCHTIEF Aktiengesellschaft within the meaning of Section 29 (2) of the German Securities Acquisition and Takeover Act (WpÜG).
Under the terms of the liability insurance taken out by HOCHTIEF Aktiengesellschaft, the insurer has a right to alter the premiums and conditions in the event of a takeover of the Company. The terms of the D&O insurance taken out by HOCHTIEF Aktiengesellschaft provide for a limitation of insurance cover if another company or other third party gains control of HOCHTIEF Aktiengesellschaft. In such an event, the insurance solely covers claims relating
Above and beyond the mandatory disclosures under Sections 289 (4) 8 and 315 (4) 8 of the German Commercial Code, other Group companies are party to further agreements that are conditional upon a change of control. The following is an abridged and nonexhaustive presentation: A change of control at HOCHTIEF AirPort GmbH would have various legal consequences. In particular, such a change of control may trigger sale or purchase obligations relating to ownership interests held by HOCHTIEF AirPort GmbH. In the PPP segment, project contracts frequently accord the client substantial rights that make it difficult to effect a change of ownership structure in the project company.
If shareholders obtain control of HOCHTIEF Aktiengesellschaft as defined in Sections 29 and 30 of the German Securities Acquisition and Takeover Act (WpÜG), all members of the Executive Board in office in the year concerned are entitled – under agreements entered into with them before 2008 – to resign from office and simultaneously terminate their contracts at six months' notice. The members of the Executive Board are each similarly entitled in the event of other takeover-like contingencies specified in their contracts (including, among other things, the obtaining of a majority of voting rights at general shareholders' meetings). Executive Board members also have such a right if confronted by sustained and substantial pressure from shareholders demanding that they resign or take specific action which the members concerned are unable to reconcile with their personal responsibility for the exercise of office. In the event that their contracts are terminated by notice, terminated by mutual agreement or expire within nine months following a takeover, the departing Executive Board members receive in compensation for termination of their contracts a severance award equaling two-and-a-half years' benefits comprising their fixed annual compensation plus performance-linked compensation in the amount budgeted for in their contracts. If an Executive Board member"s contract has more than two-and-a-half years left to run from the effective date of termination, the severance award in
With regard to a presentation of the salient points of the Executive Board compensation system pursuant to Sections 289 (2) 5 and 315 (2) 4 of the German Commercial Code, we refer to the information provided in the Compensation Report section of the Corporate Governance Report.
Our disclosures for HOCHTIEF Aktiengesellschaft relate to the situation in fiscal 2008. The disclosures consist of information on the Company's subscribed capital, direct and indirect holdings in the Company exceeding ten percent of voting rights, statutory rules and rules contained in the Company's Articles of Association about the appointment and replacement of Executive Board members and about amendment of the Articles of Association, powers of the Company's Executive Board including in particular any powers in relation to the issuing or buying back of shares, any significant agreements to which the Company is a party that are conditional upon a change of control of the Company following a takeover bid, and any agreements between the Company and members of its Executive Board providing for compensation in the event of a change of control.
The structure of the Company's subscribed capital and rights attaching to no-par-value bearer shares in the Company are determined among other things by the Company's Articles of Association. Restrictions on voting rights attaching to those shares may result from the provisions of the German Stock Corporations Act. For example, there are circumstances in which shareholders are prohibited from voting (Section 136 of the Act). The Company also has no voting rights with regard to treasury stock (Section 71b of the Act). No agreements are known to us that may result in restrictions on voting rights or on the transfer of securities. The fact that ACS, Actividades de Construcción y Servicios, S.A., Madrid, Spain, indirectly holds 25.08 percent of voting rights in HOCHTIEF Aktiengesellschaft is
The Executive Board's powers in relation to the issuing or buying back of shares are based in their entirety on authorizations granted by resolution of the General Shareholders' Meeting. The information provided on these powers conforms to the authorizations granted by resolution of the General Shareholders' Meeting.
Significant agreements to which the Company is a party that are conditional upon a change of control of the Company following a takeover bid, and the effects of such agreements, are accurately described. If lenders were to exercise their right of termination under these agreements according to the conditions stated, the corresponding borrowing needs of HOCHTIEF Aktiengesellschaft and the HOCHTIEF Group would have to be met by other means. We refer in this connection to the Risk Report on page 115.
By way of an additional disclosure for informational purposes, in supplement to the mandatory disclosures under the stated sections of the German Commercial Code, other Group companies are party to further agreements that are conditional upon a change of control. The following is an abridged and nonexhaustive presentation:
A change of control at HOCHTIEF AirPort GmbH would have various legal consequences. In particular, such a change of control may trigger sale or purchase obligations relating to ownership interests held by HOCHTIEF AirPort GmbH. In the PPP segment, project contracts frequently accord the client substantial rights that make it difficult to effect a change of ownership structure in the project company.
Where there are agreements between the Company and members of its Executive Board providing for compensation
The remaining disclosures required under Sections 289 (4) and 315 (4) of the German Commercial Code relate to circumstances that do not apply to HOCHTIEF Aktiengesellschaft. We do not therefore cover these points in detail in the combined Group and HOCHTIEF Aktiengesellschaft Management Report. There are no limitations on voting rights, no restrictions on the exercise of voting rights attached to employee shares, no agreements between the Company and its employees for the event of a takeover bid, and no securities carrying special rights with regard to control of the Company.
Essen, February 16, 2009
Dr. Lütkestratkötter Ehlers Dr. Lohr Dr. Noé Dr. Rohr