Notes to the Consolidated Balance Sheet

Noncurrent Assets

(15) Goodwill

Goodwill is reported under intangible assets (in 2004 the goodwill and negative goodwill were offset under intangible assets). From 2005 onwards, capitalized goodwill will not be reversed regularly as before, but subjected to an impairment test at least once a year.

The residual book value of the negative goodwill as of December 31, 2004, was reposted to retained earnings without effect on income as of January 1, 2005, in accordance with IFRS 3.

The goodwill/negative goodwill from capital consolidation developed as follows:

Development of goodwill in T€	31/12/2005	31/12/2004
Opening balance hist. acquisition costs January 1	12,863	12,863
Disposals	−11,639	−
Closing balance hist. acquisition costs December 31	1,224	12,863
Opening balance valuation allowances January 1	11,639	10,578
Amortization current financial year	−	1,061
Disposals	−11,639	−
Closing balance valuation allowances December 31	−	11,639
Book value December 31	1,224	1,224

Development of negative goodwill in T€	31/12/2005	31/12/2004
Opening balance hist. acquisition costs January 1	383,203	379,906
Additions	−	3,297
Disposals	−383,203	−
Closing balance hist. acquisition costs December 31	−	383,203
Opening balance reversals January 1	248,663	188,234
Reversals current financial year	−	60,429
Disposals	−248,663	−
Closing balance reversals as of December 31	−	248,663
Book value December 31	−	134,540

Under the IASB regulations, only the residual book value of the capitalized goodwill is reported. The accumulated valuation allowances from the previous year are therefore set off against accumulated acquisition cost and disclosed as disposals. The book value of € 1.2 million relates to a French joint venture. No value diminution expenses were ascertained and posted for this company in the reporting year.

(16) Other Intangible Assets

The development of the individual items under other intangible assets is shown in the schedule of consolidated fixed assets.

As of December 31, 2005, the book value of the capitalized internally generated intangible assets − which relates exclusively to computer software − amounted to € 0.1 million (2004: € 0.1 million).

As in the previous year, there was no capitalization of research and development expenses. Total research and development expenses in the reporting period amounted to € 57.5 million (2004: € 57.4 million).

There are no substantial restraints on the right of ownership or disposal.

(17) Tangible Fixed Assets

The development of the individual items in tangible fixed assets is shown in the consolidated fixed assets.

Breakdown of tangible fixed assets at book value:

in T€	31/12/2005	31/12/2004
Land and buildings	384,289	399,795
Plant equipment and machinery	923,281	880,044
Other equipment, factory and office equipment	51,100	49,214
Equipment under construction	41,849	30,280
Payments made on account	3,015	3,260
Tangible fixed assets	1,403,534	1,362,593

The book values of the assets capitalized as financial leasing in accordance with IAS 17 are shown in the following table:

in T€	31/12/2005	31/12/2004
Buildings	5,529	5,468
Plant equipment and machinery	1,223	393
Other equipment, factory and office equipment	34,834	4,041
	41,586	9,902

The amount of the reported value diminution expenses is shown under Note 6.

Restraints on the right of ownership or disposal on the reporting date amounted to € 31.1 million
(2004: € 35.8 million).

The historical acquisition costs of the tangible fixed assets that have been fully depreciated but are still in use amount to € 2,545.4 million (2004: € 2,423.5 million).

(18) Financial Assets

The development of the individual items under financial assets is shown in the consolidated fixed assets.

Breakdown of financial assets:

in T€	31/12/2005	31/12/2004
Shares in affiliated companies	24,916	34,634
Shareholdings	23,239	22,813
Noncurrent securities	27,888	4,215
Other loans	2,226	3,088
Financial assets	78,269	64,750

The decrease in shares in affiliated companies relates to a valuation allowance for the financial asset value of a company in the Services Division.

The increase in noncurrent securities results from the investment of cash generated by the sale of shares in Vallourec & Mannesmann Tubes S.A., Boulogne-Billancourt.

The other loans are accounted for almost entirely by interest-bearing housing loans to employees.

(19) Associated Companies

in T€	31/12/2005	31/12/2004
Opening inventory, January 1	596,308	512,594
Profit of current financial year	185,063	124,317
Additions	50,265	−
Disposals	−542,765	−
Currency translation differences	13,030	−12,939
Other changes in equity	−408	−27,664
Book value December 31	301,493	596,308

The figure reported for at-equity shares in associated companies decreased by € 294.8 million compared with the previous financial year. This was primarily accounted for by the sale of the shares in Vallourec & Mannesmann Tubes S.A., Boulogne-Billancourt, and the reduction of the shareholding in Vallourec S.A., Boulogne-Billancourt. This is offset by the results for the year posted by the associated companies, the additions from the capital increase of € 28 million at Vallourec S.A., the acquisition of further shares amounting to € 22 million in Hüttenwerke Krupp Mannesmann GmbH, Duisburg, and the change in the currency translation differences.

The Group's shares in its significant associated companies are as follows:

2005 in T€	Assets	Debts	Earnings	Profit	Proportion (%)
Vallourec S.A., Boulogne-Billancourt (France)	3,584,274	2,081,178	4,479,229	632,389	17.17
Hüttenwerke Krupp Mannesmann GmbH, Duisburg	757,541	562,924	1,948,527	2,547	30.00
	4,341,815	2,644,102	6,427,756	634,936

2004 in T€	Assets	Debts	Earnings	Profit	Proportion (%)
Vallourec S.A., Boulogne-Billancourt (France)	2,750,491	1,437,951	3,128,887	265,252	22.65
Hüttenwerke Krupp Mannesmann GmbH, Duisburg	750,868	538,840	1,638,092	5,256	20.00
	3,501,359	1,976,791	4,766,979	270,508

The shares in the listed company Vallourec S.A. represent a pro rata market capitalization of € 846.5 million.

(20) Deferred Income Tax Claims

If it is likely that tax benefits will be realized, they must be capitalized. Clearing is possible only if the deferred tax assets and liabilities relate to the same tax authority. Deferred tax claims amounting to € 239.0 million (2004: € 163.6 million) were set off in the financial year 2005.

in T€	31/12/2005	31/12/2004
Deferred tax receivables	88,712	996
Realization after more than 12 months	59,411	−
Realization within 12 months	29,301	996
Deferred tax liabilities	40,338	41,486
Realization after more than 12 months	2,615	27,621
Realization within 12 months	37,723	13,865
Balance of deferred tax receivables and deferred tax liabilities	48,374	−40,490

(21) Other Receivables and Sundry Assets

The long-term receivables from financial leasing consist of the following:

in T€	31/12/2005	31/12/2004
Total gross investment	4,401	4,766
Unrealized financial income	399	428
Book value	4,002	4,338

This position also includes the transactions from the financial leasing of telecommunications equipment at two subsidiaries in the Services Division. All of the transactions have a residual term of less than five years.

Current Assets

(22) Inventories

in T€	31/12/2005	31/12/2004
Raw materials, consumables and supplies	482,873	345,023
Unfinished products	292,704	216,507
Unfinished goods or services	6,343	7,413
Finished products and goods	639,613	499,475
Advance payments made on account	17,476	12,580
Inventories	1,439,009	1,080,998

Individual markdowns were made in the valuations of all the inventories where it is likely that the revenues realized through their sale or use will be lower than their book values. The anticipated realizable sale proceeds less costs incurred up to the time of sale are reported as the net realizable value.

If the reasons for devaluing the inventories no longer apply, a reversal of the write-down is carried out. In the reporting period this led to a write-up of € 0.5 million (2004: € 7.0 million).

In accordance with the amended IAS 2, inventories are valued individually or the average method is applied (in the previous year the raw materials, consumables and supplies in the Steel Division and the goods in the Trading Division were still valued according to the Lifo method). The adjustment was made as per January 1, 2005, and offset against equity in the amount of € 35.4 million, without concurrent effect on income.

The book value of the inventories reported at fair value less selling expenses amounted to € 357.0 million in the reporting year (2004: € 214.1 million).

Diminutions in inventory values amounting to € 9.2 million (2004: € 25.8 million) were posted to expenses.

There are no significant restrictions on the ownership or disposal of the inventories disclosed (2004: € 10.5 million).

(23) Trade Receivables

in T€	31/12/2005	31/12/2004
Receivables due from third parties	840,512	853,632
Receivables due from affiliated companies	9,640	13,732
Receivables due from enterprises in which a participating interest is held	30,085	34,601
Trade receivables	880,237	901,965

Appropriate valuation markdowns have been made for all discernible individual risks, the credit risk assessed on the basis of empirical values and specific country risks.

Restrictions on the ownership or disposal of trade receivables amount to € 126.7 million (2004: € 173.2 million). These are accounted for exclusively (2004: € 165.8 million) by the forfaiting of receivables and asset-backed securitization programs. For further details, we refer to Note 37 “Other Liabilities”.

(24) Other Receivables and Sundry Assets

in T€	31/12/2005	31/12/2004
Other receivables due from affiliated companies	5,722	6,409
of which loans	[3,586]	[2,569]
of which other receivables	[2,136]	[3,840]
Other receivables due from participating interests	15,090	3,439
of which loans	[12,753]	[3,061]
of which other receivables	[2,337]	[378]
Loans against borrower's notes/bond (straddle)	100,000	−
Tax refund claims (other taxes)	18,764	20,146
Derivatives	18,456	12,900
Age-related part-time employment subsidies	7,717	9,784
Advances on company pensions	3,846	4,175
Finance lease agreements	2,648	2,675
Prepaid expenses and deferred charges	2,253	2,131
Assets available for sale	1,776	1,667
Sundry assets	51,323	14,032
Other receivables and sundry assets	227,595	77,358

Other receivables and sundry assets include the sum of € 7.7 million (2004: € 9.8 million) that will not become legally effective until after the reporting date.

The cash generated by the sale of the shares in Vallourec & Mannesmann Tubes S.A. was partly invested in the form of fixed-interest loans against non-listed borrower's notes. The interest on these investments ranges from 2.4 and 4.0%. They mature on June 29, 2006.

A straddle is a structured investment whose returns are subject to a notional withholding tax at the registered seat of the issuer. These forms of investment feature the EUR-USD derivative which, depending on exchange rate developments, results in the payment of an additional coupon during the term of the investment. The offsetting nature of the securities prevents asymmetrical risks and makes it possible to optimize their after-tax returns.

The short-term receivables from financial leasing consist of the following:

in T€	31/12/2005	31/12/2004
Total gross investment	3,047	3,096
Unrealized financial income	399	421
Book value	2,648	2,675

The rental earnings are reported under other operational earnings.

(25) Income Tax Refund Claims

The income tax refund claims of € 82.4 million that existed as of December 31, 2005, (2004: € 8.2 million) relate essentially to income tax overpayments by a domestic Group company. These are offset by noncurrent income tax liabilities of € 68.2 million (2004: € 26.9 million) and current income tax liabilities of € 98.9 million (2004: € 27.3 million).

Refund claims are set off against tax liabilities if there is an enforceable right to set off the reported amounts against each other and the intention is to offset them in net terms. The prerequisites of this are that the tax refund claim and the tax liability both relate to the same tax authority and that the tax authority allows their offsetting.

(26) Cash and Cash Equivalents

in T€	31/12/2005	31/12/2004
Cash at banks	592,644	245,466
Current investments	290,548	−
Checks, cash in hand	1,705	405
Cash and cash equivalents	884,897	245,871

Current investments include near-money market funds. In addition, the cash generated by the sale of the shares in Vallourec & Mannesmann Tubes S.A. was invested in the form of securities lending transactions.

For further explanations, we refer to Note 40.

(27) Subscribed Capital

In the financial year 2005, the subscribed capital (capital stock) increased to € 161,615,273.32 as a result of the issuance of 280,000 shares from the contingent capital for servicing the Salzgitter stock option plan. The 63,218,400 no par value shares have a notional par value of € 2.56 each.

In accordance with the resolution passed by the General Meeting of Shareholders on April 23, 1998, provision was made for contingent capital of up to € 5.1 million to cover the issue of warrant-linked bonds. These warrant-linked bonds comprise a 5% Salzgitter AG bond (with a term from 1998 to 2005) coupled with option rights that entitle the holder to subscribe to Salzgitter AG shares when defined conditions occur. In the financial year 2005, the criteria were fulfilled on various dates and, accordingly, option rights for subscription to 280,000 shares were exercised by the persons entitled to them. Their exercise, which was possible up to September 30, 2005, led to increases of € 715,808.64 in the subscribed capital and € 2,672,829.53 in the capital reserve. At the same time, the bond was repaid in full in the amount of € 715,808.69.

In accordance with the resolution passed by the General Meeting of Shareholders on May 26, 2004, the capital stock was increased by up to € 15,952,306.69 through the issuance of up to 6,240,000 new no par value bearer shares (Contingent Capital 2004). The purpose of this contingent increase in capital is to facilitate the granting of option and conversion rights, in accordance with the option and convertible bond terms, to the holders of the options and/or convertible bonds issued on the basis of the authorization granted by the General Meeting of Shareholders on May 26, 2004. This authorization enables the Executive Board, with the approval of the Supervisory Board, to issue interest-bearing bearer warrant-linked bonds and/or convertible bonds on one or more occasions on or before May 25, 2009, up to a total nominal value of € 90,000,000 with a maximum term of ten years and to grant the holders of the equally privileged bonds and option or conversion rights to a maximum of 6,240,000 new Salzgitter AG shares (corresponds to 10% of the capital stock prior to the capital increase).

In addition, the Executive Board, in accordance with the resolution passed by the General Meeting of Shareholders on May 26, 2004, was authorized to increase the capital stock with the approval of the Supervisory Board by up to a nominal amount of € 55,833,073.42 (= 35% of the capital stock) on or before May 25, 2009, by issuing up to 21,840,000 new no par value bearer shares against payment in cash or kind (Authorized Capital 2004).

(28) Capital Reserve

Under the capital reserve (€ 295.3 million), the sum of € 115.2 million is accounted for by a premium lodged on the occasion of a capital increase on October 1, 1970. Other amounts totaling € 111.2 million relate to reserves predating the merger of Ilseder Hütte with Salzgitter Hüttenwerke AG and lodged with the former Preussag Stahl AG, as well as a sundry contribution by the then principal shareholder dating from 1971/72.

As part of the divestiture agreement, certain assets were sold to Salzgitter AG by Preussag AG for € 0.51 each. These assets were reported at the time of acquisition at their attributable values (€ 49.1 million) and the differences posted to the capital reserve.

The exercise of option rights from the stock option program led to an increase of € 7.8 million in the capital reserve.

(29) Retained Earnings

Retained earnings include allocations deriving from the results in the financial year or from previous years and differences resulting from the currency translation − without effect on income − of the accounts of foreign subsidiaries against which, in particular, the capitalized goodwill of subsidiaries acquired up to September 30, 1995, has been offset. The retained earnings also include further components that were immediately posted to equity in accordance with the IASB regulations. The articles of incorporation of Salzgitter AG do not contain specified regulations for the formation of reserves.

The retained earnings include differences from currency translation amounting to − € 19.6 million (2004: − € 144.4 million). The decrease of € 124.8 million compared with the previous year results mainly from the sale of the V&M shares in 2005.

According to the new regulations in IAS 19 “Employee Benefits”, all pension commitments are reported in the balance sheet and the actuarial gains and losses are posted immediately to equity. As of the reporting date, actuarial losses of € 251.2 million, after deduction of deferred taxes, were posted immediately to equity (including the actuarial losses posted by associated companies that were not reported in the provisions for pensions).

Salzgitter AG holds 6,321,528 (2004: 1,129,497) of its own no par value shares with a notional total value of € 16,160,729.72, equating to 9.9995% of the subscribed capital (2004: € 2,887,513.23 = 1.79%).

In the reporting year, 5,379,337 shares with a notional total value of € 13,752,056.68 (= 8.51% of the subscribed capital) were acquired in the months of June (797,638 shares; average price € 21.43 per share), July (2,252,319 shares; average price € 23.88 per share), August (846,556 shares; average price € 28.88 per share), September (997,672 shares; average price 37.67 € per share) and October (485,152 shares; average price 40.21 € per share) at an acquisition cost of € 152,410,118.99 (average price € 28.33 per share) for the purpose of making future acquisitions.

Of the 6,321,528 shares acquired pursuant to Section 71 para. 1 no. 8 of the German Stock Corporation Act (AktG), 325,825 were acquired under the authorization granted by the General Meeting of Shareholders on March 16, 1999, 462,924 as authorized by the General Meeting of Shareholders on June 19, 2002, 153,442 as authorized by the General Meeting of Shareholders on May 28, 2003, and 5,379,337 as authorized by the General Meeting of Shareholders on May 26, 2004.

Of the 513,112 own shares held at the beginning of the financial year and acquired under the authorization granted on March 16, 1999, the company disposed of some 2,551 shares with a nominal total par value of € 6,521.53 to third parties at an average price of € 20.84. The shares, which were used as a cash equivalent, were sold in order to increase the number of shareholders. 184,736 shares with a nominal total par value of € 472,270.18 were issued free to employees and persons belonging to the Group in the form of a profit-sharing scheme, and 19 shares with a nominal total par value of € 48.57 (authorization of May 28, 2003) were likewise issued to reward improvement suggestions.

Own shares − amounting to € 160.3 million (2004: € 9.5 million) as of the reporting date − have been deducted immediately from equity.

(30) Profit shown on the Balance Sheet after Appropriation to or Transfer from Reserves

Under German commercial law, dividend payments to shareholders in Salzgitter AG are dependent on the year-end result reported under German commercial law by Salzgitter AG. The profit shown on the balance sheet after appropriation to or transfer from reserves is shown at the same level in both the consolidated financial statements of the Salzgitter Group and the financial statements of Salzgitter AG. The transition of Salzgitter AG's profit disclosed in the balance sheet after appropriation to or transfer from reserves from the consolidated net income for the year is shown in the income statement.

The proposal will be made to the General Meeting of the Shareholders of Salzgitter AG that a dividend for the financial year 2005 of € 0.50 per share, plus a bonus dividend of € 0.50 per share (equal to € 63.2 million based on the nominal capital stock of some € 161.6 million), be paid from Salzgitter AG's profit shown on the balance sheet after appropriation to or transfer from reserves and that the remaining amount be brought forward to new account.

Based on the closing price of € 45.61 for the Salzgitter share in XETRA trading on December 30, 2005, the dividend yield amounts to 2.2% (2004: 2.8%).

If the company holds own shares on the day of the General Meeting of Shareholders, the proposed appropriation of profits will be adjusted accordingly since own shares are not eligible for dividend.

(31) Minority Interests

This item contains the minority interests in the subscribed capital, the general reserves and the profits and losses of the Group companies reported.

The minority interests in equity relate to:

• Hansaport Hafenbetriebsgesellschaft mbH, Hamburg,
• Salzgitter Automotive Engineering Beteiligungsgesellschaft mbH, Wolfsburg (including its subsidiaries),
• Hövelmann & Lueg GmbH, Schwerte.

In the income statement, the result is reported proportionately under “minority interests in Group net income for the year”.

Noncurrent Debts

(32) Provisions for Pensions and similar Obligations

In Germany there is a contribution-related basic employee pension scheme embodied in law under which pension payments are made on the basis of income and contributions. Once the company has paid the relevant contributions to the state social security insurance authority and to pension funds constituted under private law, it has no obligation to pay further benefits. The ongoing contribution payments are reported as expenses in the relevant period.

In addition, the Salzgitter Group operates a company pension scheme based on performance-related commitments that are covered by provisions. The Group also has some insignificant fund-financed pension commitments.

The pension provisions are accounted for mostly by pension commitments undertaken by German companies and contain the entire net present value of the defined benefit obligations.

Provisions for pensions and similar obligations:

in T€	31/12/2005	31/12/2004
Pension provisions	1,721,946	1,625,039
Similar obligations	2,643	2,749
Total	1,724,589	1,627,788

The provisions for similar obligations take account of bridging payments in the event of death.

The actuarial gains (−) and losses (+) developed as follows:

in T€	FY 2005	FY 2004
As at January 1 of financial year	128,846	94,860
Change in current financial year	117,339	33,986
As at December 31 of financial year	246,185	128,846

The differences between the anticipated and actual development (experience adjustment) amounted to € 4.2 million in the reporting year.

The amount of provisions in the balance sheet is calculated as follows:

in T€	31/12/2005
Net present value of fund-financed obligations	6,941
Fair value of planned assets	−3,938
	3,003
Net present value of non-fund-financed obligations	1,718,943
Balance sheet provision for pensions	1,721,946

The provisions for pensions and similar obligations developed as follows:

FY 2005 in T€	Pension provisions	Similar obligations	Total
Opening balance Jan. 1	1,625,039	2,749	1,627,788
Transfer to other account	3,282	−	3,282
Transfer	−73	−	−73
Used	−114,209	−156	−114,365
Reversal	−331	−34	−365
Adjustment in line with actuarial assumptions, no effect on income	117,339	−	117,339
Additions	12,494	84	12,578
Interest added	78,405	−	78,405
Closing balance Dec. 31	1,721,946	2,643	1,724,589

FY 2004 in T€	Pension provisions	Similar obligations	Total
Opening balance Jan. 1	1,504,722	2,977	1,507,699
Adjustment due to IAS 19	94,860	−	94,860
Opening balance Jan. 1 (adjusted)	1,599,582	2,977	1,602,559
Changes in the consolidated group	3,003	−	3,003
Transfer to other account	2,639	−466	2,173
Transfer	272	−11	261
Used	−115,045	−110	−115,155
Reversal	−84	−42	−126
Adjustment in line with actuarial assumptions, no effect on income	33,986	−	33,986
Additions	19,266	401	19,667
Interest added	81,420	−	81,420
Closing balance Dec. 31	1,625,039	2,749	1,627,788

(33) Sundry Provisions

The development of the other short-term and long-term provisions is shown in the following table:

FY 2005 in T€	Status 1/1	Currency differences	Addition/Disposals from changes in consolidated group	Transfer
Other taxes	4,404	23	−	−
Personnel	129,300	−	−	289
of which anniversary provisions	[32,932]	[−]	[−]	[33]
of which for the social plan/ age-related part-time employment	[62,201]	[−]	[−]	[61]
Operating risks	56,617	−	−	−
Other provisions	141,178	462	−	−111
of which markdowns/complaints	[37,656]	[97]	[−]	[−]
Total	331,499	485	−	178

Transfer to other account	Used	Reversals	Allocations	Interest added	Status 31/12
−	−951	−359	5,337	−	8,454
−1,534	−34,867	−5,101	49,614	493	138,194
[−]	[−2,096]	[−517]	[5,600]	5	[35,957]
[−1,539]	[−23,231]	[−1,574]	[29,880]	−32	[65,766]
−	−4,069	−830	24,411	115	76,244
−1,914	−29,766	−39,696	87,981	503	158,637
[−]	[−15,254]	[−9,222]	[36,221]	[−]	[49,498]
−3,448	−69,653	−45,986	167,343	1,111	381,529

The comparable figures for the previous year were as follows:

FY 2004 in T€	Status 1/1	Currency differences	Addition/Disposals from changes in consolidated group	Transfer
Other taxes	3,118	−3	−	−
Personnel	134,955	−	1,055	−168
of which anniversary provisions	[32,892]	[−]	[181]	[−24]
of which for the social plan/ age-related part-time employment	[70,766]	[−]	[564]	[−186]
Operating risks	36,361	−	−	−
Other provisions	116,516	−60	509	4
of which markdowns/complaints	[26,117]	[−]	[299]	[−]
Total	290,950	−63	1,564	−164

Transfer to other account	Used	Reversals	Allocations	Interest added	Status 31/12
53	−1,492	−67	2,795	−	4,404
−2,173	−41,338	−3,663	40,365	267	129,300
[155]	[−2,105]	[−791]	[2,624]	[−]	[32,932]
[−2,442]	[−27,218]	[−2,259]	[22,976]	[−]	[62,201]
−3,332	−3,513	−589	26,970	720	56,617
3,332	−26,772	−16,651	63,935	365	141,178
[514]	[−11,745]	[−4,411]	[26,882]	[−]	[37,656]
−2,120	−73,115	−20,970	134,065	1,352	331,499

The provisions reported regarding personnel were valued on the basis of an assumed actuarial interest rate of 4.25% per annum (2004: 5.0% per annum).

The allowances for employees leaving the company under the terms of age-related part-time employment contracts are capitalized as an asset worth € 7.7 million (2004: € 9.8 million) and not offset against provisions.

Provisions for operational risks are formed in particular for waste disposal and recultivation obligations.

The provisions for other risks primarily include provisions for litigation risks, warranties, environmental risks and pending transaction risks.

Maturities of the other provisions:

FY 2005 in T€	Total 31/12	short-term	long-term
Other taxes	8,454	8,454	−
Personnel	138,194	56,452	81,742
of which anniversary provisions	[35,957]	[−]	[35,957]
of which for the social plan/age-related part-time employment	[65,766]	[32,875]	[32,891]
Typical operating risks	76,244	8,201	68,043
Other provisions	158,637	158,637	−
of which markdowns/complaints	[49,498]	[49,498]	[−]
Total	381,529	231,744	149,785

 

FY 2004 in T€	Total 31/12	short-term	long-term
Other taxes	4,404	4,404	−
Personnel	129,300	49,485	79,815
of which anniversary provisions	[32,932]	[−]	[32,932]
of which for the social plan/age-related part-time employment	[62,201]	[26,134]	[36,067]
Typical operating risks	56,617	5,179	51,438
Other provisions	141,178	141,178	−
of which markdowns/complaints	[37,656]	[37,656]	[−]
Total	331,499	200,246	131,253

(34) Long-Term Borrowings

in T€	31/12/2005	31/12/2004
Liabilities to banks	57,575	66,085
Liabilities from financial lease agreements	38,576	8,083
Other borrowings	316	−
Borrowings	96,467	74,168

The liabilities from financial leasing reported under long-term borrowings are shown in the following tables:

in T€	Residual time to maturity 1−5 years	Residual time to maturity > 5 years	31/12/2005     Total
Minimum lease payments	22,899	31,124	54,023
Financing costs	8,366	7,081	15,447
Present value of minimum lease payments	14,533	24,043	38,576

 

in T€	Residual time to maturity 1−5 years	Residual time to maturity > 5 years	31/12/2004     Total
Minimum lease payments	6,851	3,781	10,632
Financing costs	1,753	796	2,549
Present value of minimum lease payments	5,098	2,985	8,083

The long-term liabilities from leasing transactions relate essentially to the leasing of plant equipment and machinery.

Current Debts

(35) Short-Term Borrowings

in T€	31/12/2005	31/12/2004
Liabilities to banks	120,799	108,753
Bonds	−	716
Liabilities
to affiliated companies	2,282	2,627
to participating interests	−	764
Liabilities from financial lease agreements	3,573	1,806
Other borrowings	6,105	2,079
Short-term borrowings	132,759	116,745

The liabilities from financial leasing transactions reported under short-term borrowings are shown in the following table:

in T€	31/12/2005	31/12/2004
Minimum lease payments	4,535	2,523
Financing costs	962	717
Net present value of minimum lease payments	3,573	1,806

The short-term liabilities from leasing transactions relate primarily to the leasing of plant equipment and machinery as well as factory and office equipment.

(36) Trade Payables

in T€	31/12/2005	31/12/2004
Liabilities
to third parties	493,373	462,243
to participating interests	16,163	41,195
to affiliated companies	826	465
Trade payables	510,362	503,903

(37) Other Liabilities

in T€	31/12/2005 Total	31/12/2004 Total
Other liabilities
to affiliated companies	9,144	8,251
to participating interests	1,473	24
Other liabilities	338,129	356,878
of which from forfaiting and asset-backed securitization programs	[126,695]	[165,793]
of which to employees	[68,856]	[41,696]
of which taxes	[39,107]	[41,505]
of which social security contributions	[27,414]	[25,336]
of which received payments on account	[20,263]	[17,358]
of which derivatives	[10,514]	[9,292]
of which bills payable	[9,362]	[11,920]
of which other liabilities	[35,918]	[43,978]
Other liabilities (short-term)	348,746	365,153

Of the sum total of liabilities, some € 153.7 million (2004: € 229.3 million) is secured by liens and similar rights.

Other liabilities of total € 126.7 million (previous year € 165.8 million) in debts are resulting from forfaiting and asset-backed securitization programs. Salzgitter Stahlhandel GmbH, Düsseldorf, and Salzgitter Mannesmann International GmbH, Düsseldorf, are carrying out revolving sales of short-term domestic trade receivables on the basis of an asset-backed securitization agreement. The sale of receivables is limited to an amount (purchase price) of € 80.0 million. The purchase price comprises the nominal value of the receivables less a del credere markdown relating to the default rate over the past twelve months, a verity markdown and a markdown for refinancing, insurance and administrative costs. Since Salzgitter Stahlhandel GmbH, Düsseldorf, and Salzgitter Mannesmann International GmbH, Düsseldorf, bear the commercial risks inherent in the receivables, they report the sold receivables in the accounts accurately as own receivables and report the funds received for them as liabilities arising from the sale of receivables.

With the support of Salzgitter Mannesmann Handel GmbH, Düsseldorf, Salzgitter Mannesmann International GmbH, Düsseldorf, made other non-Group external financing arrangements, and Salzgitter Mannesmann International GmbH, Düsseldorf, also sold receivables worth € 12.0 million (previous year € 40.9 million) as of December 31, 2005. In accordance with the framework contracts, Salzgitter Mannesmann International GmbH, Düsseldorf, carries out revolving sales of export receivables insured against default for amounts of up to a maximum of € 75.0 million. In addition, Salzgitter Mannesmann International GmbH, Düsseldorf, − for amounts up to a maximum of US-$ 20.0 million − has sold export receivables worth the equivalent of € 5.4 million (2004: € 9.3 million) and secured by bank guaranties. Furthermore, Salzgitter Mannesmann International (USA) Inc., Houston, has sold receivables equivalent to € 30.0 million (2004: € 35.4 million) as of December 31, 2005, and reported the funds received as liabilities.