DHL 1997 Annual Report Download - page 12

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Pension expenses, including social security contributions and other
benefits, rose by DM 584 million to DM 7,435 million, primarily due to a
DM 621 million provision for indirect pension obligation. In addition,
we accrued DM 1,789 million for extraordinary expenses for indirect
pension obligations – previously listed in the Notes. Indirect pension
commitments, which are made to employees of Deutsche Post through
the VAP (Versorgungsanstalt der Deutschen Bundespost) and the
DPBS (Deutsche Post Betriebsrenten-Service e.V.) and which are not
yet accrued, amounted to DM 5,010 million as of December 31, 1997.
The extraordinary expenses were partly offset by the sale of shares in the
Gemeinnützige Deutsche Wohnungsbaugesellschaft mbH which gener-
ated DM 876 million in proceeds and reduced the extraordinary loss to
DM 913 million.
In fiscal 1997, the corporation reported for the first time positive retained
earnings of DM 103 million.
Enhanced financial strength
The company’s financials continued to improve according to plan.
Cash flow according to DVFA/SG formula increased by 16.8 percent to
DM 2,244 million (1996: DM 1,921 million), that is, 8.3 percent of total
revenue.
9
Profit on ordinary activities
1996 1997
576
752
800
600
400
200
0
in DM millions
Selected expense items
in DM millions 1996 1997 +/–
Cost of materials 3,262 3,637 375 11.5
Personnel expenses 19,953 19,622 –331 –1.7
Wages, salaries and other emoluments 13,102 12,187 –915 –7.0
Social security contributions,
pension expenses and other benefits 6,852 7,435 584 8.5
Other operating expenses 4,094 3,387 ––707 17.388