Annual Report 2002 Performance Measures

Annual Report 2002 Performance Measures 80.3 18,685 78.0 74.5 18,000 69.8 15,765 70 70 16,000 15,722 – 100 14,000 60 60 12,000 – 200 50 50 – 204 10,000 40 40 – 300 8,000 30 30 6,000 – 400 20 20 4,000 – 454 – 500 10 10 – 493 2,000 DB pro forma DB incl. Stinnes 2001 2002 2001 2002 2001 2002 2001 2002 Total rail passenger Total rail freight Revenues Operating income transport performance transport performance in € million after interest in billion pkm in billion tkm in € million Relative change: +0.3% Relative change: – 6.2% Relative change: – 2.9% +18.8% Key figures pro forma Change in € million 2002 2002 2001 in % Revenues 18,685 15,765 15,722 + 18.8 Income before taxes – 438 – 466 – 409 – 7.1 Income after taxes – 468 – 482 – 406 – 15.3 EBITDA before special burden compensation 2,021 1,926 1,433 + 41.0 EBITDA 2,464 2,369 2,271 + 8.5 EBIT 37 – 15 109 – 66.1 Operating income after interest – 454 – 493 – 204 – Return on capital employed in % 0.1 – 0.1 0.4 – Fixed assets 39,775 40,637 35,790 + 11.1 Total assets 46,023 44,231 41,962 + 9.7 Equity 5,708 7,501 8,436 – 32.3 Cash flow before taxes 2,052 1,960 1,786 + 14.9 Gross capital expenditures 9,994 9,907 7,110 + 40.6 Net capital expenditures 1) 5,355 5,268 3,307 + 61.9 Employees (as of Dec 31) 250,690 210,072 214,371 + 16.9 Change Performance figures 2002 2001 in % Passengers DB Reise&Touristik million 128.4 136.3 – 5.8 DB Regio million 1,528.8 1,565.4 – 2.3 Total million 1,657.2 1,701.7 – 2.6 1) Gross capital expendi- Passenger kilometers DB Reise&Touristik million pkm 2) 33,173 35,342 – 6.1 tures less investment DB Regio million pkm 2) 36,675 39,117 – 6.2 grants from third parties Total million pkm 2) 69,848 74,459 – 6.2 2) Passenger kilometers (pkm): product of num- Train kilometers DB Reise&Touristik million train-path km 3) 156.1 161.5 – 3.3 ber of passengers and mean travel distance DB Regio million train-path km 3) 563.9 560.2 + 0.7 Total million train-path km 3) 720.0 721.7 – 0.2 3) Train-path kilometers: driving performance in Freight carried million t 278.3 291.3 – 4.5 km of trains on rail Ton kilometers million tkm 4) 77,981 80,348 – 2.9 4) Ton kilometers (tkm): Mean transport distance (freight transport) km 280.2 275.8 + 1.6 product of freight Train kilometers million train-path km 3) 211.0 226.9 – 7.0 carried and mean transport distance Number of passenger stations 5,580 5,760 – 3.1 (Please note: all tkm Train kilometers on track infrastructure million train-path km 3) 967.4 977.3 – 1.0 figures represent Length of line operated km 35,804 35,986 – 0.5 metric tons (1,000 kg= 2,200 lbs.) Organizational Structure Deutsche Bahn AG is the management holding for the DB Group, which is vertically integrated and clearly divided into Group divisions and business units. This structure assists Deutsche Bahn in achieving the necessary progress in the rail reform process and ensures business efficiency to the benefit of our various groups of customers. In addition, this organizational structure sup- ports our strategy aimed at becoming the “best railroad” and a leading provider of mobility, transport, and logistics services. Management Board of Deutsche Bahn AG Chairman and CEO CFO Personnel Marketing Track Infrastructure/ Technology Passenger Transport Freight Transport Integrated Operations Core Business Group Passenger Group Freight Group Passenger Group Track Service Functions Transport Division Transport Division* Stations Division 2) Infrastructure (directly managed DB Reise&Touristik AG 1) Railion GmbH 1) DB Station& Division business units) DB Regio AG 1) DB Cargo AG 1) Service AG 1) DB Netz AG 1) Group functions BU BU BU BU Long-Distance/ DB Energie Long-Distance Transport Wagonload Transport Traffic Station Conurbation Network BU BU BU BU Combined Rail/Road DBFuhrparkServices Regional Transport Marketing Regional Networks Transport * 1) BU Stinnes BU Marshalling Yards/ BU Transportation DB ProjektBau Urban Transport Transshipment Terminals (Schenker) DB Services Service functions BU = Business Unit * These activities will be merged in the financial 1) And related year 2003 to form the DB Systems subsidiaries new Group Transport and Logistics Division 2) General manager with full power of representation DB Telematik DB Group: An Overview Management Board Hartmut Mehdorn Diethelm Sack Dr.Karl-Friedrich Rausch Chairman and CEO CFO Technology Klaus Daubertshäuser Dr.Norbert Bensel Marketing Personnel Dr.Bernd Malmström Dr.Christoph Franz Freight Transport Passenger Transport Roland Heinisch Track Infrastructure/Integrated Operations Contents 1 Contents 2 Chairman’s Letter 10 Group Management Report 60 Employees 66 Environmental Protection Our Core Business 70 Group Divisions 70 Passenger Transport 80 Freight Transport 88 Passenger Stations 96 Track Infrastructure 106 Service Functions: Service Area 110 Stinnes 120 Rolling Stock 126 Consolidated Financial Statements and Additional Information 126 Consolidated Financial Statements 160 Independent Auditor’s Report 162 Pro Forma Consolidated Financial Statements 196 Stinnes Consolidated Financial Statements 228 Major Subsidiaries 232 The Boards of Deutsche Bahn AG 236 Report of the Supervisory Board 239 DB Advisory Board 240 Glossary 242 Events in 2002 244 Imprint Nine-Year-Summary 2 Dear Ladies and Gentlemen, 2002 was a successful year overall for Deutsche Bahn – and marked another major step on our way to completing the rail reform process. Since 1994, the year in which Deutsche Bahn was transformed into a stock corporation, we have never introduced and implemented so many effective measures for our customers as we did in the past year. What makes us especially proud: We were not only able to meet our ambitious plan objectives, but also significantly reduced our planned operating loss – which itself was the inevitable result of our comprehensive capital expenditures – beating our earlier estimates. Moreover, we achieved this under increasingly difficult conditions. After all, the economy developed much more un- favorably than had been forecast, and we also suffered more than ‡ 50 million in lost revenues due to the summer floods in eastern Germany. These figures also prove that entrepreneurial thinking and action are commonplace at Deutsche Bahn –which is especially gratifying for me personally. Revenues in 2002 increased by 18.8% compared to the previous year, to ‡ 18.7 billion, due to the first-time consolidation of Stinnes AG in the fourth quarter; yet we achieved a slight increase even without Stinnes. Transport performance declined in both freight and passenger transport, due mostly to the weak overall economy, but also to the targeted discontinuation of underperforming connections in both of these market segments. Our capital expenditures program clearly reflects our focus on sustainable structures. In 2002, capital expenditures reached the record amount of nearly ‡ 10 billion, some ‡ 2.9 billion more than in the previous year. Deducting the investment grants we received in the amount of ‡ 4.6 billion, it becomes clear just how much of the Deutsche Bahn modernization we are financing from our own sources. Our capital expenditures are not only aimed at rolling stock, either. We also spent more than ‡ 2.4 billion of our own funds on infrastructure measures. Not inci- dentally, these measures and our other procurement programs mean Deutsche Bahn has done more to protect jobs in Germany – especially among small and medium- sized enterprises – than nearly any other company. With scheduled capital expenditures totaling some ‡ 45 billion over the next five years, we are keeping our promise to become the best railroad we can be. Our clear strategy and its three pillars – restructuring, performance, and growth – demand the deliberate continuation of our modernization course. At the same time, we have to make further adjustments to Chairman’s Letter 3 our existing structures in order to get us into shape to face increasing international and intermodal competition. Although productivity has increased by over 150% since the inception of the rail reform process, value added per employee is still slightly below specific personnel expenses, which only proves that we have to continue our restructuring efforts in this, the tenth year of rail reform. 2002 was also a year of tremendous innovation. The new Cologne–Rhine/Main line was opened in the summer, and was well received by our customers from the start. The integration of this new line into our new winter timetable had an impact on fully 70% of our long-distance trains. Although the new European timetable that took effect on December 15, 2002 brought far-reaching changes, its rollout was nearly seamless. We wish to extend a sincere apology to all customers affected by the technical problems with our new vehicles, for which our industry partners are culpable and which tarnished our successes somewhat. Together with the manu- facturers, we are working hard to solve these quality problems. The same applies to initial difficulties in timetable coordination, which first became apparent in day-to-day operations. Last but not least, we introduced a new pricing system for long-distance passenger transport. Our comprehensive preparations enabled the nearly error-free imple- mentation of the necessary fundamental changes to our processes and IT systems. We spent months getting our employees and those of our sales partners ready for the changeover. The new system, which offers numerous benefits to the bulk of our passengers, now has to stand the test of the market.

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