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Hamburger Hafen und Logistik AG

Interim / Quarterly Report Nov 14, 2011

195_10-q_2011-11-14_53d74d23-47a1-4560-952f-43a7e1888438.pdf

Interim / Quarterly Report

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HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT Interim Report January to September 2011

Key fi gures

HHLA Group
in € million 1– 9 2011 1– 9 2010 Change
Revenue and Earnings
Revenue 912.5 788.1 15.8 %
EBITDA 254.4 222.6 14.3 %
EBITDA margin in % 27.9 28.2 - 0.3 pp
EBIT 164.5 141.5 16.2 %
EBIT margin in % 18.0 18.0 0.0 pp
Profi t after tax 97.3 82.1 18.5 %
Profi t after tax and minority interests 65.4 55.5 17.9 %
Cash Flow and Investments
Cash fl ow from operating activities 200.1 164.4 21.7 %
Investments 105.7 102.5 3.1 %
Performance Data
Container throughput in thousand TEU 5,305 4,252 24.8 %
Container transport 1
in thousand TEU
1,425 1,261 13.0 %
30.09.2011 31.12.2010 Change
Balance Sheet
Total assets 1,837.1 1,715.1 7.1 %
Equity 629.6 567.0 11.0 %
Equity ratio in % 34.3 33.1 1.2 pp
Employees
Number of employees 4,778 4,679 2.1 %

Subgroup Port Logistics 2, 3 Subgroup Real Estate 2, 4

in € million 1– 9 2011 1– 9 2010 Change 1– 9 2011 1– 9 2010 Change
Revenue 892.7 769.3 16.0 % 23.6 22.1 7.0 %
EBITDA 242.2 209.5 15.6 % 12.2 13.1 - 7.1 %
EBITDA margin in % 27.1 27.2 - 0.1 PP 51.6 59.4 - 7.8 pp
EBIT 155.3 131.3 18.3 % 9.0 10.0 - 10.4 %
EBIT margin in % 17.4 17.1 0.3 PP 38.1 45.4 - 7.3 pp
Profi t after tax and minority interests 61.4 50.8 20.7 % 3.9 4.4 - 13.2 %
Earnings per share in € 5 0.88 0.73 20.7 % 1.49 1.71 - 13.0 %

The transport volume was fully consolidated

2 Before consolidation between subgroups

Listed A shares

4 Non-listed S shares

5 Basic and diluted

Content

  • The Share
  • Foreword
  • Business Development at a Glance

Interim Management Report

  • Economic Environment
  • Group Performance
  • Container Segment
  • Intermodal Segment
  • Logistics Segment
  • Real Estate Segment
  • Financial Position
  • Employees
  • Transactions with Respect to Related Parties
  • Events after the Balance Sheet Date
  • Risk and Opportunity Report
  • Business Forecast

Interim Financial Statements

  • Income Statement
  • Balance Sheet
  • Cash Flow Statement
  • Segment Report
  • Statement of Changes in Equity
  • Notes to the Condensed Interim Consolidated Financial Statements

Assurance of the Legal Representatives

Financial Calendar / Imprint

The Share

Stock Market Data

30.06.2011 – 30.09.2011 HHLA MDAX DAX
Change - 30.1 % - 23.7 % - 25.4 %
Closing 30.06.2011 € 29.96 10,932 7,376
Closing 30.09.2011 € 20.94 8,341 5,502
High € 30.63 11,187 7,471
Low € 19.85 8,146 5,072

The German stock market and fi nancial centres around the world suffered heavy losses in the period July to September. The fi nancial crisis adversely affected market sentiment once again. Investors and rating agencies alike focused mainly on the eurozone's southern periphery – causing widespread uncertainty. However, the creditworthiness of other industrialised states was increasingly called into question too. Sentiment reached its lowest point with Standard & Poor's downgrading of the USA's credit rating in early August. Despite strong half-year corporate results published in the middle of the third quarter, especially in Germany, growing fears of a new fi nancial crisis and ensuing downturn deeply unsettled the capital markets. The fear of recession began to dominate market trading: the blue-chip DAX index slid by 25.4 % to 5,502 points, while the mid-cap MDAX shed 23.7 % to close at 8,341. Shares in cyclical industries suffered disproportionately high.

The HHLA share mostly mirrored the performance of the DAX and MDAX indices during the third quarter. Once the concerns prompted by the European debt crisis had grown into a broadly based fear of recession, shares in cyclical sectors – including the HHLA share – came under severe pressure. In view of the overwhelmingly pessimistic expectations for future economic growth, both the encouraging development of volume and resulting market share gains achieved by HHLA began to take a back seat. Shares were also hit by media reports speculating about further delays or postponements to vital public infrastructure work, including such relevant projects for HHLA as the deepening of the navigation channel in the river Elbe or maintenance work on the Kiel canal. The shipping industry continues to suffer from persistently low freight rates and numerous shipping companies are once again reporting operating losses. Such news served to depress the general mood of the transport and logistics industry in addition. These factors were amplifi ed further by HHLA's limited free fl oat (32 %), as experience shows that limited trading volumes tend to result in more pronounced share price fl uctuations. Against this background, the HHLA share closed on 30 September 2011 at € 20.94 – around 30.1 % below the closing price of the previous quarter – with a market capitalisation of € 1.47 billion.

In the diffi cult environment of the third quarter, HHLA continued to actively pursue its IR work with a strong capital market presence via numerous road shows and investor conferences. Several fi nancial analysts who track and regularly comment on the company's performance believe the latest share price adjustments were overdone. Nonetheless, the banks' economists have repeatedly downgraded their general economic forecasts, prompting a reduction of short-term price targets. On average, however, the share's upside target remains above its current trading price. As a result, most analysts still recommend investors to "buy" or "hold" the share.

Source: Datastream

Dear Ladies and Gentlemen,

Based on the strong increase in its throughput and transport volumes, Hamburger Hafen und Logistic AG (HHLA) once again strengthened its position in its core markets during the fi rst nine months of the 2011 fi nancial year, achieving double-digit growth in revenue and earnings. This is all the more impressive in view of growing uncertainty during the third quarter concerning the global economy's future prospects. The assumption is now that economic growth will slow considerably. Our immediate market environment is also suffering as a result of the strained earnings situation in container shipping, the creation of excess capacity at the North Range terminals and delays to the dredging of the lower Elbe's navigation channel.

Despite these adverse conditions, we consider revenue for the full year 2011 in the region of € 1.2 billion to be possible and expect to achieve an operating result (EBIT) in the region of € 210 million. However, given the current economic slowdown, impairments with respect to German intermodal traffi c and fruit logistics can no longer be ruled out. Such adjustments could have a low doubledigit impact on the operating result. With regard to throughput and transport volumes, we expect growth to be at the upper end of the forecast range of 15 to 20 %. Container transport is anticipated to achieve growth in the middle of the expected 10 to 15 % range.

In the fi rst nine months of the 2011 fi nancial year, rapid growth in Far East and Eastern European traffi c handled by our facilities and transport systems played a major role in our performance.

It forms the basis for total growth rates of around 25 % in container throughput and 13 % in container transport. The resulting strengthening of our market position is due, in no small part, to the considerable efforts we make in terms of investment, operations and sales to meet the evergrowing requirements of maritime logistics.

In this respect, our new mega-ship berths in Hamburg have already proven their worth. By accelerating ship handling and dealing fl exibly with high peak loads, they offer tailor-made solutions for the rapidly growing number of vessels with a carrying capacity of over 10,000 standard containers. One example of the expansion of our hinterland systems is the opening of our modern inland terminal in Poznán, which went into operation in September 2011. This now enables us to extend the successful hub and shuttle concept in Czech traffi c to hinterland traffi c between German sea ports and Poland.

The services we offer for integrated transport and logistics chains between overseas ports and customers in the European hinterland help us secure market opportunities even in times of economic downturn, while at the same time enhancing our growth potential.

Yours,

Klaus-Dieter Peters Chairman of the Executive Board

Klaus-Dieter Peters Chairman of the Executive Board

Interim Management Report

Economic Environment

Macroeconomic Development

The global economy has cooled over the course of the year and the rate of growth is slowing. This development has been brought about by the faltering recovery of the world's advanced economies and the gradual diminishing of the boom in emerging markets. In view of the ongoing debt crisis in Europe and the USA, economic growth in the industrialised nations is now only marginal.

By contrast, growth in developing and emerging markets is still robust on the whole, albeit somewhat slower. China, for example, is trying to compensate for decreasing demand from the USA and Europe by expanding its trade with emerging markets – not least Eastern Europe – and increasing domestic demand. In the third quarter of 2011, Chinese GDP was therefore still able to grow by 9.1 %.

In the eurozone, the sovereign debt crisis placed an increasingly heavy burden on macroeconomic output. The economies of Germany, France and the Netherlands – the main drivers of growth at the beginning of the year – have all cooled appreciably. According to leading economic research institutes, economic growth came to a virtual standstill throughout the eurozone during the third quarter. The economies of other EU member states however – apart from Britain – made comparatively good progress.

Although the economic climate has cooled considerably, the fundamental momentum of the German economy is still robust. Following a weak second quarter, German GDP grew by 0.4 % in the third quarter of 2011 according to DIW estimates. Germany's foreign trade picked up noticeably in August, adding momentum. In August 2011, German imports were up 12.6 % on last year and exports increased by as much as 14.6 %.

Sector Development

Despite initial signs that the rapid pace of growth is slowing, global container throughput increased strongly in the fi rst nine months of 2011. After a rise of 7.6 % in the fi rst half-year, the third quarter is expected to grow by 6.7 %. At the same time, a large number of new vessels went into service – especially in the class of more than 10,000 standard containers. The result of this rapid fl eet growth was that the number of laid-up container ships increased again slightly. After a low in the middle of the year, October saw the percentage of laid-up ships in relation to the entire fl eet rise to 2.5 %. At the same time, there has been a substantial decrease in freight rates due to overcapacities in shipping and the battle for market share. They are now around 40 % below their mid-2010 levels.

The HHLA container terminals improved their market position in the Hamburg–Antwerp Range (Hamburg, Bremen, Rotterdam, Antwerp) signifi cantly over the course of the 2011 fi nancial year. Their market share rose in the fi rst half-year by 2.6 percentage points to 18.7 %. According to the latest available fi gures, this trend seems to have continued in the third quarter. HHLA increased their throughput volume in the fi rst nine months of 2011 by 24.8 % compared with the same period in the previous year, while container growth was up 7.7 % in Rotterdam and 3.1 % in Antwerp after the fi rst nine months of this year.

The high growth rate in container throughput in the Container segment was driven primarily by strong growth in core markets for the HHLA terminals. With a rise of 24.7 %, Far East traffi c once again formed the backbone of this volume expansion and accounts for nearly 50 % of HHLA's total throughput. There was even more dynamic growth in European feeder traffi c, which enjoyed a year-on-year increase of 36.9 %. Baltic Sea traffi c to Poland, the Baltic states and the Russian Federation alone rose by 59.1 %.

Business Development at a Glance

  • I Consistently strong growth in throughput and transport
  • I Sales activities supported by extraordinary operational efforts
  • I Revenue up 15.8 % to € 912.5 million
  • I Operating result (EBIT) improves by 16.2 % to € 164.5 million
  • I Profi t after tax and minority interests climbs 17.9 % to € 65.4 million
  • I Group forecast with improvement in revenue and earnings while risks increase

Boom in Baltic Sea traffi c: feeder vessel at the Container Terminal Burchardkai

Group Performance

Key Figures

in € million 1– 9 2011 1– 9 2010 Change
Revenue 912.5 788.1 15.8 %
EBITDA 254.4 222.6 14.3 %
EBITDA margin in % 27.9 28.2 - 0.3 pp
EBIT 164.5 141.5 16.2 %
EBIT margin in % 18.0 18.0 0.0 pp
Profi t after tax and minority interest 65.4 55.5 17.9 %
ROCE in % 16.3 14.3 2.0 pp

Notes on the Reporting

There is normally no long-term order backlog for throughput and transport services, and thus no use is made of this particular reporting fi gure. As the company completed the sale respectively suspension of its discontinued activities last year, the additional disclosure of "EBIT from continuing activities" is no longer necessary. EBIT is the indicator used to track operating performance. In order to show net rental income more precisely – a key fi gure for the Real Estate subgroup – incidental rental expenses charged on to tenants are reported under other operating income rather than revenue as of the 2011 fi nancial year. Income for the Port Logistics subgroup was also similarly reclassifi ed. The fi gures for the previous year have been restated accordingly. This does not affect the operating result. See also p. 34 of the Notes.

A lease with the Hamburg Port Authority (HPA) for port areas used mainly for an empty container centre came to an end on 30 June 2011. A compensation payment agreed with HPA for the early release of the areas was made in the third quarter and recognised under other operating income (€ 15 million). The amount was recognised almost completely in profi t and loss and was subject to normal taxation. See also Container Segment, p. 8, and p. 36 of the Notes.

Several companies in the Group were merged retroactively as of 1 January 2011. At Group level, this had no effect on revenue and earnings performance. However, the services exchanged between the Container and Holding/Other segments were reduced due to a cross-segment

merger with a corresponding decrease in intersegment revenue. There were no effects at Group level resulting from changes in exchange rates or in the group of consolidated companies that had a material impact on the developments in revenue and earnings in the reporting period. See also p. 36 of the Notes.

Earnings Position

In an increasingly diffi cult economic environment, the HHLA Group's business in the fi rst nine months of the year progressed in line with its previously published forecast. After strong growth in the fi rst half-year, HHLA succeeded in raising its performance fi gures once again in the third quarter of 2011. Despite the delayed dredging of the river Elbe, previously postponed maintenance work and ongoing reorganisation measures, the Group was able to strengthen its market position with substantial input of manpower and equipment. Thanks to consistently strong growth in Asian and Eastern European traffi c, throughput in the Container segment rose by 24.8 % in the fi rst nine months; transport volumes in the Intermodal segment increased by 13.0 %. As a result of this growth in volumes, the HHLA Group raised revenue by 15.8 % to € 912.5 million (previous year: € 788.1 million). As in the previous quarter, the publicly listed subgroup Port Logistics contributed around 98 % of total revenue and was largely responsible for growth dynamics. With its Container, Intermodal and Logistics segments, the Port Logistics subgroup achieved revenue growth of 16.0 % to € 892.7 million in the reporting period (previous year: € 769.3 million). In the non-listed subgroup Real Estate, revenue rose by 7.0 % to € 23.6 million (previous year: € 22.1 million). Due

to incentives to regain feeder traffi c and corresponding shifts in handling ratios, growth in revenue lagged behind the increase in ship handling volumes. Aided by higher, yet gradually declining storage charges and price increases for rail services, however, revenue quality was up on year-end 2010 over the entire period ending 30 September 2011. Changes in inventories at Group level contributed € 0.9 million (previous year: € 0.1 million) to the overall performance. Own work capitalised of € 5.1 million was roughly the same as last year. Other operating income increased year on year to € 32.4 million, largely due to a compensation payment of € 15 million from HPA for the early release of port areas (previous year: € 26.2 million, including non-recurring income of € 2.3 million for write-backs on container gantry cranes in Lübeck and € 4.2 million from the reversal of a provision for demolition costs). See also p. 34 of the Notes.

Expenses

Operating expenses rose by 16.0 % in the fi rst nine months of 2011. The increase was roughly in line with revenue growth and less than the rise in throughput and transport volumes. The cost of materials increased by 19.7 % to a total of € 324.7 million (previous year: € 271.3 million) from January to September. This fi gure is mainly determined by changes in volume. In addition to increased maintenance work by the company's workshops and higher purchases of rail services for hinterland transport, expenses were driven above all by higher fuel prices. As a result, the cost of materials ratio in relation to revenue rose to 35.6 % (previous year: 34.4 %). Personnel expenses went up year on year by 13.1 % to € 265.2 million (previous year: € 234.5 million). Although the third quarter saw a further increase in output, the ratio of personnel expenses to revenue was reduced to 29.1 % (previous year: 29.8 %). Furthermore, improved capacity utilisation made it possible to more than make up for the end of short-time working hours, disproportionate volume growth at the more personnelintensive terminals and extra expenses resulting from the new collective wage agreement introduced in June 2011. Other operating expenses increased by 17.6 % to € 106.6 million (previous year: € 90.6 million) in the reporting period. While lease expenses for land and quay walls remained largely unchanged, outsourced main-

tenance costs rose markedly. This resulted from an intense use of facilities and equipment along with servicing work previously postponed and repairs to weather-related surface damage. The ratio of expenses to revenue was slightly higher than last year at 11.7 % (11.5 %). As a result of these developments, the HHLA Group increased its operating result before depreciation and amortisation (EBITDA) by 14.3 % to € 254.4 million (previous year: € 222.6 million). After the fi rst nine months of the year, the EBITDA margin of 27.9 % did not quite reach the prior-year fi gure (28.2 %). Depreciation and amortisation increased by 10.9 % to € 89.9 million – partly due to a non-recurring effect from the revaluation of demolition obligations at the beginning of the year. Adjusted for this effect, the increase of € 6.6 million was largely due to ongoing investment in the Container segment. At Group level, the operating result (EBIT) rose 16.2 % to € 164.5 million (previous year: € 141.5 million). At 18.0 %, EBIT was on a par with last year. The Port Logistics and Real Estate subgroups contributed 94.4 % and 5.6 %, respectively, to EBIT. Although interest income increased to € 5.5 million (previous year: € 3.5 million), mainly due to a higher level of liquidity, interest expenses of € 30.4 million remained virtually unchanged (previous year: € 30.0 million) despite increased fi nancial liabilities. Due largely to above-average earnings contributions by affi liates with higher tax rates and lower utilisation of tax loss carry-forwards, the effective tax rate rose to 30.6 % (previous year: 28.9 %). Against this background, the Group posted an increase of 17.9 % in consolidated profi t after tax and minority interests, taking the fi gure to € 65.4 million (previous year: € 55.5 million). Earnings per share improved correspondingly by 17.9 % to € 0.90 (previous year: € 0.76). The publicly listed Port Logistics subgroup achieved a 20.7 % increase in earnings per share to € 0.88 (previous year: € 0.73). However, earnings per share of the non-listed Real Estate subgroup fell 13.0 % to € 1.49 (previous year: € 1.71). Thanks to a disproportionately strong improvement in operating result (EBIT) in relation to the increased capital commitment, the return on capital employed (ROCE) rose by 2.0 percentage points to 16.3 % (previous year: 14.3 %).

Container Segment

Key Figures

in € million 1–9 2011 1–9 2010 Change
Revenue 535.5 444.7 20.4 %
EBITDA1 215.8 176.1 22.5 %
EBITDA margin in % 40.3 39.6 0.7 pp
EBIT1 150.5 117.9 27.6 %
EBIT margin in % 28.1 26.5 1.6 pp
Container throughput in thousand TEU 5,305 4,252 24.8 %

1 Including a compensation payment of € 15 million

With an increase of 24.8 % to 5,305 thousand standard containers (TEU), the HHLA container terminals in Hamburg and Odessa enjoyed stronger than average growth in throughput volumes in the fi rst nine months of the 2011 fi nancial year. High volume growth in Far Eastern traffi c and a steep rise in European traffi c both contributed to this improvement. Particularly remarkable was the profound growth in Eastern European traffi c across the Baltic Sea (+ 59.1 %). Its share of total throughput at the HHLA container terminals in Hamburg improved year on year by 2.8 percentage points to 13.3 %.

North American traffi c also reported strong growth of 41.4 % (share of throughput: 6.1 %). Far Eastern traffi c continues to dominate, accounting for 48.4 % of throughput. HHLA's efforts in terms of investment, operations and sales are an important prerequisite for this success. These include the new mega-ship berths at the HHLA terminals Burchardkai and Tollerort, competitive price incentives for feeder traffi c and numerous different measures to optimise processes and increase effi ciency.

These all played a decisive role in responding adequately to growth in ship size, attracting overseas services to Hamburg and enabling above-

average growth in feeder traffi c. In an adverse market environment characterised by terminal overcapacities and low freight rates, the Group was able to translate a large part of its volume growth into revenue – despite a higher proportion of feeder traffi c. While inter-segment income was lower due to the merger of several Group companies, revenue rose by 20.4 % to € 535.5 million (previous year: € 444.7 million). This increase was topped by EBITDA growth of 22.5 % to € 215.8 million (previous year: € 176.1 million) and EBIT growth of 27.6 % to € 150.5 million (previous year: € 117.9 million). These earnings fi gures include the one-off effect from a € 15 million compensation payment for the early termination of a lease mainly used for an empty container centre in the middle section of the free port. The payment was made in July 2011. See also p. 34 of the Notes.

HHLA continued to pursue its modernisation and expansion programme in the fi rst nine months of 2011. The work is concentrated at the Container Terminal Tollerort as well as at the Container Terminal Burchardkai, where the focus is on expanding the modern block storage. As of July 2011, large container ships with a carrying capacity of 13,000 TEU are now also handled here on a regular basis.

Rapid growth: container throughput at the Container Terminal Altenwerder

Intermodal Segment

Key Figures

in € million 1–9 2011 1–9 2010 Change
Revenue 267.5 234.1 14.2 %
EBITDA 31.6 29.6 6.6 %
EBITDA margin in % 11.8 12.6 - 0.8 pp
EBIT 1 20.0 18.6 7.5 %
EBIT margin 1
in %
7.5 7.9 - 0.4 pp
Container transport 2
in thousand TEU
1,425 1,261 13.0 %

1 Previous year's fi gure including an exceptional gain of € 2.3 million 2 The transport volume was fully consolidated

In what is still a highly competitive market, transport volumes carried on HHLA's intermodal systems in the fi rst nine months of the 2011 fi nancial year were up on the equivalent fi gure for the record year 2008. Strong growth of 13.0 % to 1,425 thousand standard containers (TEU) was once again mainly driven by those highly integrated companies which own their own terminals and wagons. The HHLA inland terminals in the Czech Republic, Poland and Slovakia also reported strong growth. In the period ending 30 September 2011, they raised handling volumes by 10.3 % to 1,012 thousand TEU. German intermodal traffi c however fell short of expectations due to delays in the complex realignment of scheduling and management processes still showing an unsatisfactory earnings situation.

With growth of 14.2 % to € 267.5 million (previous year: € 234.1 million), segment revenue outpaced the increase in volume. Although costs remained largely constant, the company succeeded in raising prices in certain areas. If the prior-year EBIT fi gure is adjusted for the special item from the disposal of container gantry cranes after activities in Lübeck were discontinued in 2010, EBIT of € 20.0 million at the end of the third quarter of 2011 represents year-on-year growth of 20 %.

The main drivers of this dynamic development are those integrated transport solutions where the handling and transport processes – from sea port to inland terminal to customers in the European hinterland – are all precisely coordinated. These also include maritime transport chains organised according to the hub-and-shuttle system. This entails shuttle trains running back and forth between the sea port terminals and the inland terminals that act as hubs, from where the last mile is carried out by rail and road.

With the opening of the fi rst Polish hub terminal in Poznán on 27 September 2011, an important step was taken towards establishing hub-andshuttle traffi c for seaport–hinterland traffi c with Poland – a system already successfully used for maritime container logistics in the Czech Republic and Slovakia. The use of shuttle trains reduces transport times between Hamburg and Poznán alone by over a third.

Other important projects included the inauguration of a new Czech inland terminal in Ostrava and the opening of a branch offi ce in Munich by the joint venture Container Inland Trucking (CIT).

Expansion of the hinterland network: hub terminal opened in Poznán

Logistics Segment

Key Figures

in € million 1–9 2011 1–9 2010 Change
Revenue 94.0 90.1 4.4 %
EBITDA 8.2 11.1 - 26.4 %
EBITDA margin in % 8.7 12.3 - 3.6 pp
EBIT 2.7 5.8 - 54.1 %
EBIT margin in % 2.8 6.4 - 3.6 pp

Business in the Logistics segment was characterised by highly varied developments in the individual markets of HHLA companies over the fi rst nine months of 2011. Cruise logistics and bulk goods reported an encouraging upward trend in volumes. The performance of the company's consultancy business, however, was more restrained. Fruit logistics continued to weaken and missed to reach a satisfactory level. Contract logistics stabilised at the prior-year level, but still failed to make any decisive improvement with regard to earnings.

After a weak start to the year in the fi rst quarter, segment earnings stabilised appreciably in the second and third quarters. The 4.4 % rise in revenue to € 94.0 million (previous year: € 90.1 million) was attributable to the intra-Group settling of a major IT contract worth some € 7 million in the consultancy division. Adjusted for this item, segment revenue declined in comparison with last year.

Earnings fi gures were substantially below last year, with EBITDA decreasing by 26.4 % to € 8.2 million (previous year: € 11.1 million) and EBIT losing 54.1 % to € 2.7 million (previous year: € 5.8 million). Compared with the fi rst quarter of 2011, however, in which segment EBIT amounted to € 0.1 million and the EBIT margin merely achieved 0.4 %, these fi gures have recovered somewhat. The EBIT margin improved to 2.8 % for the fi rst nine months. The successful costcutting programmes in fruit and contract logistics made a major contribution to this improvement. These measures included the pooling of operations of the two companies HHLA Logistics and HHLA Logistics Altenwerder in a single company as of 1 October 2011.

Fruit handling at the multi-function terminal O'Swaldkai recorded a further 6 % decline in tonnage to 551 thousand tons. This was due to a change in the allocation of reefer vessels combined with a trend towards the use of reefer containers. Vehicle handling, on the other hand, was 7.8 % up on last year's fi gure at 137 thousand units. Thanks in particular to rising coal imports, bulk cargo handling of ore and coal picked up by 7.2 % to 10.8 million tons.

Cruise logistics outperformed with 105 ships and 295,000 passengers, which represent growth rates indicating a new volume record for the Port of Hamburg. Not least in view of its continued positive prospects, cruise logistics received the German Cruise Prize on 27 September 2011, giving Hamburg the title "Port of the Year 2012".

Increasing coal imports: bulker at Hansaport

Real Estate Segment

Key Figures

in € million 1–9 2011 1–9 2010 Change
Revenue 23.6 22.1 7.0 %
EBITDA 12.2 13.1 - 7.1 %
EBITDA margin in % 51.6 59.4 - 7.8 pp
EBIT 9.0 10.0 - 10.4 %
EBIT margin in % 38.1 45.4 - 7.3 pp

The positive trend on Hamburg's offi ce letting market continued in the third quarter of 2011, despite the general deterioration of the economic outlook. According to the latest market overview from Jones Lang LaSalle, new offi ce lets exceeded last year's fi gure by 7.2 % with a cumulative total of 378,600 m2 . At 8.8 %, the vacancy rate fell below last year's for the fi rst time in the current fi nancial year. Due to a fall in new building volume, Jones Lang LaSalle has revised its previous trend forecasts and now expects a further fall in vacancy rates.

With a revenue increase of 7.0 % to € 23.6 million (previous year: € 22.1 million), the HHLA properties in the Speicherstadt historical warehouse district and at Fischmarkt Hamburg-Altona GmbH on the northern bank of the Elbe continued along their growth trajectory. This is largely due to the successful expansion of letting business in both areas. Large-scale maintenance and refurbishment expenses in the Speicherstadt historical warehouse district meant that the positive revenue trend was not refl ected accordingly in earnings. As a result, EBITDA fell 7.1 % to € 12.2 million (previous year: € 13.1 million), while EBIT dropped 10.4 % to € 9.0 million (previous year: € 10.0 million). Nevertheless, high earnings margins of 51.6 % (EBITDA) and 38.1 % (EBIT) continue to underline the segment's strong profitability. The reclassifi cation of incidental rental expenses charged on to tenants, which are no longer shown as revenue but as other operating income from 2011, led to changes in the absolute fi gures for revenue and profi t margins. In order to facilitate comparison, the fi gures for last year have been restated accordingly. See also p. 36 of the Notes.

The 2011 fi nancial year has so far been dominated by a large number of new projects. One highlight was the strengthening of the district's standing as an important fashion venue with the successful letting of the fully refurbished Speicherblock Q warehouse, which offers an attractive mixture of showrooms and offi ces. The tea emporium "Wasserschloss Speicherstadt" opened in late October 2011, underlining the traditional function of the Speicherstadt historical warehouse district as one of the world's largest tea-trading centres. Two further projects complete the future profi le of the Speicherstadt historical warehouse district: in November 2011, modernisation work begins on a large historical building which will be occupied by an advertising agency. HHLA has also attracted a well-known hotel operator for the fi rst hotel in the Speicher stadt. According to current planning, the fi rst guests are expected in 2013.

New highlight: the tea emporium Wasserschloss Speicherstadt (centre)

Financial Position

Liquidity Analysis

in € million 1– 9 2011 1– 9 2010
Financial funds as of 01.01. 233.7 179.2
Cash fl ow from
operating activities
200.1 164.4
Cash fl ow from
investing activities
- 83.7 - 64.1
Free cash fl ow 116.4 100.3
Cash fl ow from
fi nancing activities
- 28.9 - 86.4
Change in fi nancial funds 87.4 13.9
Change in fi nancial funds
due to exchange rates
0.4 - 0.6
Financial funds as of 30.09. 321.5 192.4

The positive development of the HHLA Group's earnings position meant that cash in-fl ows from operating activities increased to € 200.1 million (previous year: € 164.4 million) in the period from January to September 2011. Cash out-fl ows from investing activities of € 83.7 million exceeded last year's fi gure of € 64.1 million, mainly as a result of higher payments for property, plant and equipment. The previous year's amount was also reduced by payments received on asset disposals.

The cumulative effect of these developments was that the Group generated a higher free cash fl ow of € 116.4 million (previous year: € 100.3 million), comprising the aggregate cash fl ows of operating and investing activities. Cash out-fl ows from fi nancing activities amounted to € 28.9 million (previous year: € 86.4 million). This fi gure results from dividend payments made to shareholders and minority interests in the second quarter of 2011 as well as settlement payments made under profi t and loss transfer agreements. The fi gure was reduced by borrowing of € 65.7 million.

Financial funds, made up of cash and cash equivalents (€ 259.8 million) and cash pooling (€ 67.5 million), netted with other fi nancial liabilities (€ 5.7 million), amounted to € 321.5 million as of 30 September 2011 and were thus clearly above the opening balance for the year (€ 233.7 million).

Investment Analysis

Capital expenditure in the reporting period totalled € 105.7 million and was thus slightly above last year's fi gure of € 102.5 million. Funds were used primarily for expansion projects and replacements, largely in the Container and Intermodal segments. In the Container segment, completed projects included the quay wall for a new mega-ship berth at the Container Terminal Burchardkai, which was leased from the related party Hamburg Port Authority. This new asset is valued at € 28.1 million. As the underlying agreement has been classifi ed as a fi nance lease, the amount is not recognised as a direct cash expense but is spread over the duration of the contract in the form of future lease payments (previous year's addition from fi nance lease: € 30.4 million). For the full 2011 fi nancial year, capital expenditure will continue to focus on increasing productivity in the existing terminal areas by using the latest handling technology and on expanding the high-performance hinterland connections in line with market demands.

Balance Sheet Analysis

Compared with the end of 2010, the HHLA Group's balance sheet total increased by an amount of € 122.0 million to € 1,837.1 million as of 30 September 2011.

At € 1,301.6 million, non-current assets were above the comparable fi gure as of 31 December 2010 (€ 1,290.7 million). The reason for the change was the recognition of the new quay wall for mega-ships mentioned above, in combination with ongoing depreciation of property, plant and equipment.

The increase in current assets of € 111.1 million to € 535.5 million as of 30 September 2011 was mainly due to the rise in receivables from related parties as a result of higher balances from the pooling of short-term deposits with HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH. An increase of € 29.3 million in trade receivables to € 155.8 million and of € 24.3 million in cash and cash equivalents to € 259.8 million also contributed towards the growth in current assets. A decline in income tax receivables of € 16.6 million to € 4.4 million had the opposite effect.

Balance Sheet Structure

in € million
Assets 30.09.2011 31.12.2010
Non-current assets 1,301.6 1,290.7
Current assets 535.5 424.4
1,837.1 1,715.1
Equity and Liabilities
Equity 629.6 567.0
Non-current liabilities 897.5 849.9
Current liabilities 310.0 298.2
1,837.1 1,715.1

Compared with year-end 2010, equity increased by € 62.6 million to € 629.6 million as of the reporting date. The change was largely due to the positive profi t after taxes for the reporting period less the dividend payment. The equity ratio as of the reporting date improved to 34.3 % (as of 31 December 2010: 33.1 %).

At € 897.5 million, non-current liabilities were € 47.6 million higher than at year-end 2010 (€ 849.9 million). The increase resulted principally from the recognition of the leasing liability in connection with the new mega-ship berth at the Container Terminal Burchardkai, as well as from new borrowing. The change was offset by scheduled repayments on other project-related fi nancial liabilities and the reduction of pension provisions due to an increase in the discount rate used to determine net present value. Current liabilities rose by € 11.8 million to € 310.0 million (31 December 2010: € 298.2 million). This was largely due to higher income tax liabilities and trade liabilities. The compensation payment made to a minority shareholder had the opposite effect.

There were off-balance-sheet obligations as of the balance sheet date. These were mainly payment obligations under long-term leases for port areas and quay walls. See also p. 164 of the 2010 Annual Report.

Employees

The HHLA Group employed a total of 4,778 people as of 30 September 2011. This represents an increase of 1.4 % over the same date last year.

Compared with the fi gure of 4,679 employees as of 31 December 2010, the increase was 2.1 %. The most notable year-on-year changes were the recruitment of 107 employees, or 13.8 % of the workforce, in the Intermodal segment and the decline in the Logistics segment of 34 employees or 7.5 %. The training programme launched by HHLA during the crisis has now come to a successful end. A total of 480 employees took part in the programme – some 300 of them on extended courses offering a formal occupational qualifi cation.

Transactions with Respect to Related Parties

There are various contracts between the Free and Hanseatic City of Hamburg and/or the Hamburg Port Authority and companies in the HHLA Group for the lease of land and quay walls in the Port of Hamburg and in the Speicherstadt historical warehouse district. In addition, the HHLA Group lets offi ce space to other enterprises and public institutions affi liated with the Free and Hanseatic City of Hamburg. Further information about these business relationships can be found in the consolidated fi nancial statements as of 31 December 2010.

Events after the Balance Sheet Date

There were no transactions of major signifi cance after the balance sheet date of 30 September 2011.

HHLA Group employees as of 30.09.2011

Risk and Opportunity Report

Future demand for handling and transport services will depend to a considerable extent on the stability of the fi nancial markets in light of the sovereign debt crisis. Increased risks due to surplus capacity and greater competition can therefore not be ruled out. This may also result in increasing pressure on prices. With respect to customers, possible company insolvencies may affect consortia, service and volume structures.

With regard to the HHLA Group's risk position, the statements made on pages 93 to 98 of the management report section of the 2010 Annual Report and in the Interim Reports for 2011 continue to apply, unless this report indicates otherwise. The risk factors associated with the HHLA Group's business activities are described there in the chapter "Risk and opportunity report". From a current perspective, there are still no discernible risks which could jeopardise the continued existence of the company. Opportunities arising in the past quarter have been described in the "Business forecast" section of this report.

Business Forecast

Macroeconomic Environment

The outlook for the global economy has deteriorated considerably over the past months. In view of an escalating debt crisis, the need for sweeping public-sector spending cuts and mutually reinforcing effects between industrial and emerging markets, global economic growth is likely to slow signifi cantly. These developments recently led the International Monetary Fund (IMF) to downgrade its growth forecast for 2011. However, in view of strong growth in the fi rst halfyear, the IMF still expects the global economy to grow by 4 % this year. Weaker growth is now also predicted for global trade. Despite a more signifi cant redemption, however, it is still expected to reach a good 7 %.

In those economic regions of particular importance for HHLA's business, growth rates will continue to diverge in the remaining months of 2011. The IMF forecasts only slightly lower economic growth of around 8 % for Asia, but China's gross domestic product (GDP) could still rise by as much as 9 %. The economies of Central and Eastern Europe are expected to expand by a more moderate 5 %, with a major contribu-

tion coming from Russia. Restrained economic growth of below 2 % is anticipated for those industrialised countries in the eurozone mainly affected by the debt crisis, while Germany's GDP still looks set to rise by almost 3 %.

Sector Development

In view of the increasingly diffi cult economic environment, market research institutes such as Drewry have also cut their forecasts for global container handling and are now predicting a rise of around 7 %. This will be driven mainly by South-East Asia, the Far East and Eastern Europe. While above-average growth is predicted particularly for container traffi c intra-Asia, the forecasts for Northern European ports suggest lower growth of just under 6 %. It is therefore expected that the market environment will continue to be dominated by fi erce competition in handling and transport services until the end of the year. At the same time, container shipping companies are exposed to both rising fuel costs and persistent pressure on earnings due to surplus capacity. As a result of realised and planned expansion projects in Northern Europe, the increase in handling capacity is also likely to exceed volume growth for the foreseeable future.

Thanks to the high volumes seen in the fi rst half of the year, Europe's land-based pre-carriage and on-carriage systems are expected to enjoy growth in transport volumes of around 6 %, despite the economic downturn. Depending on the target region served, growth rates are likely to vary. Transport prices should show signs of recovery as the year progresses. However, the strength of this recovery will vary according to carrier type and route.

The market environment remains heterogeneous for the HHLA companies in the Logistics segment. Overcapacities in container shipping are accelerating the trend towards transporting fruit in reefer containers rather than in conventional reefer vessels, thus presenting the specialised with the challenge of persistent structural change. At the same time, the shift in consignment activities to the regions for which the goods are intended is putting strong competitive pressure on port-based contract logistics. The rate of German steel production, on the other hand, an indicator for bulk goods handling of iron ore and coal, could increase more than 2 % on its already high level, although a noticeable decline is expected towards the end of the year. Growth

is also expected in passenger car exports, with the export of new vehicles anticipated to outstrip that of used vehicles.

Group Performance Expected Earnings Position

Although the economy is facing greater challenges than originally expected, HHLA is still aiming to substantially improve year-on-year revenue. In light of the results of the fi rst nine months, HHLA believes it can achieve consolidated Group revenue in the region of € 1.2 billion for the year as a whole.

In order to reach this goal, faster ship handling and smooth management of high peak loads must increasingly offset the disadvantages caused by the delayed dredging of the river Elbe's navigation channel. At the same time, HHLA is taking important steps to tap future earnings potential with the aid of extensive maintenance work, technological developments and restructuring projects. By pursuing both these objectives – exploiting current market opportunities and developing future competitive strengths – the Group aims to reach an operating result (EBIT) of around € 210 million. As the perspectives for an improvement of the unsatisfactory earnings development of German intermodal traffi c and fruit logistics are further limited in the light of the economic slowdown, impairments in these business activities can no longer be ruled out by the end of the year. Should adjustments be made, EBIT would be expected in the region of € 200 million. In this case an increase in operating margin does not seem to be feasible. The minority shareholders' relative proportion of the after-tax result would increase.

Revenue and earnings will continue to be driven predominantly by the listed subgroup Port Logistics. Providing volume trends do not tail off towards year-end by more than the normal seasonal variation, the Container segment is now expected to report volume growth at the upper end of the 15 to 20 % range. However, pressure on earnings is likely to remain high for the time being. At the same time, the above-mentioned cost factors are expected to have a considerable impact on ship handling in particular. Nevertheless, HHLA aims to improve its operating margin. The compensation payment of € 15 million received for the early return of leased areas will also help to achieve this target.

Providing the macroeconomic environment remains stable, the Intermodal segment will probably be able to increase its transport volume in the mid-range of between 10 and 15 %. Revenue growth is likely to be similarly strong and a number of routes have potential for improved earnings quality. In line with the expansion of the hinterland network, the company also aims to enhance added value for the segment's operative business development. However, the EBIT margin could be signifi cantly impacted by an amount in the single-digit millions range in the event of an impairment at the German intermodal traffi c.

Owing to the increasing containerisation of perishable goods and the ensuing structural changes in fruit handling, HHLA expects a continuing diffi cult situation for volumes and earnings. The operating margin is thus likely to remain signifi cantly below the previous year's level, to which an impairment in the single-digit millions range may contribute.

Despite the challenging environment, the company expects to see slightly higher revenue than last year in the non-listed Real Estate subgroup. As a result of the planned large-scale maintenance work, however, the EBIT margin is expected to be lower than in the previous year. Whereas the Holding/Other division helped reduce costs in 2010 – mainly by altering the models for phased early retirement – additional

Business Forecast 2011

HHLA Group Forecast in half-year report Forecast in nine-month report
Container
throughput
Growth of 15 to 20 % Growth of 15 to 20 %,
upper end
Container transport Growth of 10 to 15 % Growth of 10 to 15 %,
medium range
Revenue Increase in
the region of 15 %
in the region of
€ 1.2 billion
EBIT Margin improvement in the region of € 210 million before
in the region of € 200 million after risks
Investments Ranging from
€ 180 to € 220 million
Ranging from
€ 160 to € 180 million

services as part of company development and the general overhaul of a fl oating crane will result in considerably higher expenses in 2011.

Financial Position

The Group's balance sheet total for the year as a whole is expected to rise as a result of ongoing capital expenditure. As well as investing in modernisation work at the container terminals – including an initial project to expand handling operations in Odessa on the Black Sea – the company will focus on ramping up hinterland traffi c to further strengthen its vertical integration along the transport chain. Due to the postponing of activities in Odessa, the HHLA Group's planned overall capital expenditure will be now lower, at between € 160 million and € 180 million (previously: € 180 to € 220 million).

A rise in non-current assets, primarily in the area of property, plant and equipment, can therefore be expected on the assets side. On the liabilities side, equity is currently expected to develop in line with the level of net profi t generated. Financial liabilities for the realisation of investment projects are also expected to increase.

Otherwise, the further development of business will mainly be fi nanced by the available liquid-

ity reserves and the positive cash fl ows from current business activities. HHLA's good credit standing offers further fi nancing possibilities. Overall, HHLA therefore has suffi cient funds at its dis posal for value-enhancing corporate development.

Further Development

For the further development of HHLA's business in 2012, it is vital that planning approval is granted to dredge the Elbe waterway and that work can begin at the beginning of the year. Providing economic growth continues in HHLA's core markets, despite the current economic downturn, HHLA is confi dent it can expand its market position in the North Range and fully exploit further developments in global freight volumes. Against this background, HHLA will once again target further growth in revenue and earnings, aided by technological refi nements, the reorganisation of work structures and the expansion of the hinterland network. In view of the current uncertainties, however, HHLA is also preparing for other scenarios in order to safeguard where necessary the Group's earnings power and fi nancial stability – as it succeeded in doing during the fi nancial and economic crisis of 2009.

No material changes with regard to other topics occurred during the reporting period. The following table lists the topics concerned. The relevant disclosures are largely included in the Annual Report for 2010 and remain valid.

Areas in which no material changes occurred in the reporting period
(Page numbers refer to the Annual Report 2010)
Company organization and structure
See front fl ap, page 54 et seq.
Company goals/strategies
See page 60 et seq.
Main services
See page 56 et seq.
Sales markets/competitive position
See page 57 et seq.
Research and development
See page 68 et seq.
Legal parameters
See page 62 et seq.
Principles and goals of fi nancial management
See page 82
Company disposals and acquisitions
See page 84 et seq.
Planned changes to structure/organization and strategy/goals
See page 102
Future services, sales markets/competitive position, R&D activities
See page 102
Dividend policy
See page 102
Medium-term developments
See page 102 et seq.

Interim Financial Statements

Income Statement HHLA Group

in €thousand 1–9 2011 1–9 2010 7–9 2011 7–9 2010
Revenue 1 912,481 788,098 316,439 285,485
Changes in inventories 852 115 633 579
Own work capitalised 5,093 4,728 1,636 1,764
Other operating income 1 32,426 26,171 20,406 10,619
Cost of materials - 324,682 - 271,331 - 113,529 - 99,136
Personnel expenses - 265,196 - 234,549 - 88,588 - 80,770
Other operating expenses - 106,574 - 90,643 - 35,831 - 30,600
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 254,400 222,589 101,166 87,941
Depreciation and amortisation - 89,865 - 81,045 - 29,734 - 27,777
Earnings before interest and taxes (EBIT) 164,535 141,544 71,432 60,164
Earnings from associates accounted for using the equity method 253 167 107 120
Interest income 5,497 3,471 1,875 1,844
Interest expenses - 30,392 - 29,971 - 10,519 - 9,493
Other financial result 283 336 0 162
Financial result - 24,359 - 25,997 - 8,537 - 7,367
Earnings before tax (EBT) 140,176 115,547 62,895 52,797
Income tax - 42,915 - 33,448 - 18,663 - 15,575
Profit after tax 97,261 82,099 44,232 37,222
of which attributable to non-controlling interests 31,868 26,635 13,585 10,301
of which attributable to shareholders of the parent company 65,393 55,464 30,647 26,921
Earnings per share, basic, in €
Group 0.90 0.76 0.42 0.37
Port Logistics 0.88 0.73 0.42 0.36
Real Estate 1.49 1.71 0.51 0.56
Earnings per share, diluted, in €
Group 0.90 0.76 0.42 0.37
Port Logistics 0.88 0.73 0.42 0.36
Real Estate 1.49 1.71 0.51 0.56

Statement of Comprehensive Income HHLA Group

in €thousand 1–9 2011 1–9 2010 7–9 2011 7–9 2010
Profit after tax 97,261 82,099 44,232 37,222
Actuarial gains/losses 18,792 1,163 878 772
Cash flow hedges - 374 - 940 - 775 - 156
Foreign currency translation differences - 1,514 3,144 2,866 - 5,211
Deferred taxes on changes recognised directly in equity - 5,923 - 120 - 50 - 208
Other - 126 - 23 - 106 30
Income and expense recognised directly in equity 10,855 3,224 2,813 - 4,773
Total comprehensive income 108,116 85,323 47,045 32,449
of which attributable to non-controlling interests 31,800 26,771 13,390 10,467
of which attributable to shareholders of the parent company 76,316 58,551 33,655 21,981

1 For the purposes of comparison the previous year's figures have been restated due to the reclassification of the incidental rental expenses.

Interim Financial Statements Income Statement HHLA Subgroups Statement of Comprehensive Income HHLA Subgroups 18

Income Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2011
Group
1–9 2011
Port Logistics
1–9 2011
Real Estate
1–9 2011
Consolidation
Revenue 912,481 892,653 23,614 - 3,786
Changes in inventories 852 849 3 0
Own work capitalised 5,093 5,093 0 0
Other operating income 32,426 29,538 3,577 - 689
Cost of materials - 324,682 - 319,877 - 4,807 2
Personnel expenses - 265,196 - 263,536 - 1,660 0
Other operating expenses - 106,574 - 102,494 - 8,553 4,473
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 254,400 242,226 12,174 0
Depreciation and amortisation - 89,865 - 86,909 - 3,186 230
Earnings before interest and taxes (EBIT) 164,535 155,317 8,988 230
Earnings from associates accounted for using the equity method 253 253 0 0
Interest income 5,497 5,530 60 - 93
Interest expenses - 30,392 - 27,024 - 3,461 93
Other financial result 283 283 0 0
Financial result - 24,359 - 20,958 - 3,401 0
Earnings before tax (EBT) 140,176 134,359 5,587 230
Income tax - 42,915 - 41,124 - 1,736 - 55
Profit after tax 97,261 93,235 3,851 175
of which attributable to non-controlling interests 31,868 31,868 0 0
of which attributable to shareholders of the parent company 65,393 61,367 3,851 175
Earnings per share, basic, in € 0.90 0.88 1.49
Earnings per share, diluted, in € 0.90 0.88 1.49

Statement of Comprehensive Income HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2011
Group
1–9 2011
Port Logistics
1–9 2011
Real Estate
1–9 2011
Consolidation
Profit after tax 97,261 93,235 3,851 175
Actuarial gains/losses 18,792 18,549 243
Cash flow hedges - 374 - 374 0
Foreign currency translation differences - 1,514 - 1,514 0
Deferred taxes on changes recognised directly in equity - 5,923 - 5,845 - 78
Other - 126 - 126 0
Income and expense recognised directly in equity 10,855 10,690 165 0
Total comprehensive income 108,116 103,925 4,016 175
of which attributable to non-controlling interests 31,800 31,800
of which attributable to shareholders of the parent company 76,316 72,125 4,191

Income Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2010
Group
1–9 2010
Port Logistics
1–9 2010
Real Estate
1–9 2010
Consolidation
Revenue 1 788,098 769,280 22,075 - 3,257
Changes in inventories 115 141 - 26 0
Own work capitalised 4,728 4,720 0 8
Other operating income 1 26,171 22,973 3,828 - 630
Cost of materials - 271,331 - 267,279 - 4,060 9
Personnel expenses - 234,549 - 232,755 - 1,794 0
Other operating expenses - 90,643 - 87,596 - 6,918 3,870
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 222,589 209,484 13,105 0
Depreciation and amortisation - 81,045 - 78,199 - 3,075 230
Earnings before interest and taxes (EBIT) 141,544 131,285 10,030 230
Earnings from associates accounted for using the equity method 167 167 0 0
Interest income 3,471 3,363 209 - 101
Interest expenses - 29,971 - 26,258 - 3,815 101
Other financial result 336 336 0 0
Financial result - 25,997 - 22,392 - 3,606 0
Earnings before tax (EBT) 115,547 108,893 6,424 230
Income tax - 33,448 - 31,422 - 1,989 - 36
Profit after tax 82,099 77,471 4,435 194
of which attributable to non-controlling interests 26,635 26,635 0 0
of which attributable to shareholders of the parent company 55,464 50,836 4,435 194
Earnings per share, basic, in € 0.76 0.73 1.71
Earnings per share, diluted, in € 0.76 0.73 1.71

Statement of Comprehensive Income HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2010
Group
1–9 2010
Port Logistics
1–9 2010
Real Estate
1–9 2010
Consolidation
Profit after tax 82,099 77,471 4,435 194
Actuarial gains/losses 1,163 1,099 64
Cash flow hedges - 940 - 940 0
Foreign currency translation differences 3,144 3,144 0
Deferred taxes on changes recognised directly in equity - 120 - 100 - 21
Other - 23 - 23 0
Income and expense recognised directly in equity 3,224 3,180 43 0
Total comprehensive income 85,323 80,651 4,478 194
of which attributable to non-controlling interests 26,771 26,771 0
of which attributable to shareholders of the parent company 58,551 53,880 4,671

1 For the purposes of comparison the previous year's figures have been restated due to the reclassification of the incidental rental expenses.

Interim Financial Statements Income Statement HHLA Subgroups Statement of Comprehensive Income HHLA Subgroups 20

Income Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
7–9 2011
Group
7–9 2011
Port Logistics
7–9 2011
Real Estate
7–9 2011
Consolidation
Revenue 316,439 309,653 8,003 - 1,217
Changes in inventories 633 630 3 0
Own work capitalised 1,636 1,636 0 0
Other operating income 20,406 19,465 1,162 - 221
Cost of materials - 113,529 - 111,907 - 1,622 1
Personnel expenses - 88,588 - 88,101 - 487 0
Other operating expenses - 35,831 - 34,065 - 3,203 1,437
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 101,166 97,311 3,856 0
Depreciation and amortisation - 29,734 - 28,746 - 1,065 77
Earnings before interest and taxes (EBIT) 71,432 68,565 2,791 77
Earnings from associates accounted for using the equity method 107 107 0 0
Interest income 1,875 1,886 19 - 30
Interest expenses - 10,519 - 9,490 - 1,059 30
Financial result - 8,537 - 7,497 - 1,040 0
Earnings before tax (EBT) 62,895 61,068 1,751 77
Income tax - 18,663 - 18,217 - 428 - 18
Profit after tax 44,232 42,851 1,323 58
of which attributable to non-controlling interests 13,585 13,585 0 0
of which attributable to shareholders of the parent company 30,647 29,266 1,323 58
Earnings per share, basic, in € 0.42 0.42 0.51
Earnings per share, diluted, in € 0.42 0.42 0.51

Statement of Comprehensive Income HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
7–9 2011
Group
7–9 2011
Port Logistics
7–9 2011
Real Estate
7–9 2011
Consolidation
Profit after tax 44,232 42,851 1,323 58
Actuarial gains/losses 878 916 - 38
Cash flow hedges - 775 - 775 0
Foreign currency translation differences 2,866 2,866 0
Deferred taxes on changes recognised directly in equity - 50 - 63 13
Other - 106 - 106 0
Income and expense recognised directly in equity 2,813 2,838 - 25 0
Total comprehensive income 47,045 45,689 1,298 58
of which attributable to non-controlling interests 13,390 13,390 0
of which attributable to shareholders of the parent company 33,655 32,299 1,356

Income Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
7–9 2010
Group
7–9 2010
Port Logistics
7–9 2010
Real Estate
7–9 2010
Consolidation
Revenue 1 285,485 278,971 7,595 - 1,081
Changes in inventories 579 580 - 1 0
Own work capitalised 1,764 1,756 0 8
Other operating income 1 10,619 9,584 1,189 - 154
Cost of materials - 99,136 - 97,760 - 1,376 1
Personnel expenses - 80,770 - 80,185 - 585 0
Other operating expenses - 30,600 - 29,344 - 2,483 1,226
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 87,941 83,602 4,339 0
Depreciation and amortisation - 27,777 - 26,828 - 1,025 77
Earnings before interest and taxes (EBIT) 60,164 56,774 3,314 77
Earnings from associates accounted for using the equity method 120 120 0 0
Interest income 1,844 1,808 69 - 33
Interest expenses - 9,493 - 8,270 - 1,257 33
Other financial result 162 162 0 0
Financial result - 7,367 - 6,180 - 1,188 0
Earnings before tax (EBT) 52,797 50,594 2,126 77
Income tax - 15,575 - 14,898 - 664 - 12
Profit after tax 37,222 35,696 1,462 65
of which attributable to non-controlling interests 10,301 10,301 0 0
of which attributable to shareholders of the parent company 26,921 25,395 1,462 65
Earnings per share, basic, in € 0.37 0.36 0.56
Earnings per share, diluted, in € 0.37 0.36 0.56

Statement of Comprehensive Income HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
7–9 2010
Group
7–9 2010
Port Logistics
7–9 2010
Real Estate
7–9 2010
Consolidation
Profit after tax 37,222 35,696 1,462 65
Actuarial gains/losses 772 784 - 12
Cash flow hedges - 156 - 156 0
Foreign currency translation differences - 5,211 - 5,211 0
Deferred taxes on changes recognised directly in equity - 208 - 213 4
Other 30 30 0
Income and expense recognised directly in equity - 4,773 - 4,766 - 8 0
Total comprehensive income 32,449 30,930 1,454 65
of which attributable to non-controlling interests 10,467 10,467 0
of which attributable to shareholders of the parent company 21,981 20,463 1,518

1 For the purposes of comparison the previous year's figures have been restated due to the reclassification of the incidental rental expenses.

Balance Sheet HHLA Group

in €thousand
Assets 30.09.2011 31.12.2010
Non-current assets
Intangible assets 84,573 83,850
Property, plant and equipment 995,524 978,583
Investment property 181,854 185,568
Associates accounted for using the equity method 1,873 1,620
Financial assets 9,926 8,284
Deferred taxes 27,859 32,766
1,301,609 1,290,671
Current assets
Inventories 22,717 20,965
Trade receivables 155,831 126,516
Receivables from related parties 72,087 2,704
Other financial receivables 5,771 2,607
Other assets 14,939 15,209
Income tax receivables 4,372 20,972
Cash and cash equivalents 259,764 235,493
535,481 424,466
1,837,090 1,715,137
Equity and liabilities
Equity
Subscribed capital 72,680 72,680
Subgroup Port Logistics 69,975 69,975
Subgroup Real Estate 2,705 2,705
Capital reserve 139,728 139,728
Subgroup Port Logistics 139,222 139,222
Subgroup Real Estate 506 506
Retained earnings 360,998 337,337
Subgroup Port Logistics 345,080 322,200
Subgroup Real Estate 15,918 15,137
Other comprehensive income 40,438 29,514
Subgroup Port Logistics 39,172 28,412
Subgroup Real Estate 1,266 1,102
Non-controlling interests 15,715 - 12,257
Subgroup Port Logistics 15,715 - 12,257
Subgroup Real Estate 0 0
629,559 567,002
Non-current liabilities
Pension provisions
314,842 331,134
Other non-current provisions 50,914 52,565
Non-current liabilities to related parties 93,610 65,747
Non-current financial liabilities 423,364 387,612
Deferred taxes 14,809 12,897
897,539 849,955
Current liabilities
Other current provisions 24,589 21,896
Trade liabilities 86,704 77,026
Current liabilities to related parties 71,648 67,986
Current financial liabilities 77,791 91,136
Other liabilities 32,306 34,577
Income tax liabilities 16,954 5,559
309,992 298,180

1,837,090 1,715,137

Balance Sheet HHLA Subgroups

Equity and liabilities

in €thousand; subgroup Port Logistics and subgroup Real Estate; annex to the condensed notes

30.09.2011 30.09.2011 30.09.2011 30.09.2011
Consolidation Real Estate Port Logistics Group Assets
Non-current assets
0 12 84,561 84,573 Intangible assets
17,017 5,791 972,716 995,524 Property, plant and equipment
- 30,863 150,213 62,504 181,854 Investment property
0 0 1,873 1,873 Associates accounted for using the equity method
0 1,412 8,514 9,926 Financial assets
- 4,027 25 31,861 27,859 Deferred taxes
- 17,873 157,453 1,162,029 1,301,609
Current assets
0 86 22,631 22,717 Inventories
0 570 155,261 155,831 Trade receivables
- 13,459 150 85,396 72,087 Receivables from related parties
0 42 5,729 5,771 Other financial receivables
0 282 14,657 14,939 Other assets
- 78 78 4,372 4,372 Income tax receivables
0 234 259,530 259,764 Cash and cash equivalents
- 13,537 1,442 547,576 535,481
- 31,410 158,895 1,709,605 1,837,090
Equity
Subscribed capital 72,680 69,975 2,705 0
Capital reserve 139,728 139,222 506 0
Retained earnings 360,998 345,080 26,333 - 10,415
Other comprehensive income 40,438 39,172 1,266 0
Non-controlling interests 15,715 15,715 0 0
629,559 609,164 30,810 - 10,415
Non-current liabilities
Pension provisions 314,842 309,441 5,401 0
Other non-current provisions 50,914 49,454 1,460 0
Non-current liabilities to related parties 93,610 93,610 0 0
Non-current financial liabilities 423,364 400,774 22,590 0
Deferred taxes 14,809 15,078 7,189 - 7,458
897,539 868,357 36,640 - 7,458
Current liabilities
Other current provisions 24,589 21,836 2,753 0
Trade liabilities 86,704 84,271 2,433 0
Current liabilities to related parties 71,648 4,152 80,955 - 13,459
Current financial liabilities 77,791 73,851 3,940 0
Other liabilities 32,306 31,638 668 0
Income tax liabilities 16,954 16,336 696 - 78
309,992 232,084 91,445 - 13,537
1,837,090 1,709,605 158,895 - 31,410

Balance Sheet HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate; annex to the condensed notes

Assets 31.12.2010
Group
31.12.2010
Port Logistics
31.12.2010
Real Estate
31.12.2010
Consolidation
Non-current assets
Intangible assets 83,850 83,831 19 0
Property, plant and equipment 978,583 955,772 5,464 17,347
Investment property 185,568 66,715 150,276 - 31,423
Associates accounted for using the equity method 1,620 1,620 0 0
Financial assets 8,284 7,082 1,202 0
Deferred taxes 32,766 36,439 25 - 3,698
1,290,671 1,151,459 156,986 - 17,774
Current assets
Inventories 20,965 20,906 59 0
Trade receivables 126,516 125,831 685 0
Receivables from related parties 2,704 11,951 39 - 9,286
Other financial receivables 2,607 2,535 72 0
Other assets 15,209 15,062 147 0
Income tax receivables 20,972 24,053 240 - 3,321
Cash and cash equivalents 235,493 235,220 273 0
424,466 435,558 1,515 - 12,607
1,715,137 1,587,017 158,501 - 30,381
Equity
Subscribed capital 72,680 69,975 2,705 0
Capital reserve 139,728 139,222 506 0
Retained earnings 337,337 322,200 25,728 - 10,591
Other comprehensive income 29,514 28,412 1,102 0
Non-controlling interests - 12,257 - 12,257 0 0
567,002 547,552 30,041 - 10,591
Non-current liabilities
Pension provisions 331,134 325,386 5,748 0
Other non-current provisions 52,565 51,143 1,422 0
Non-current liabilities to related parties 65,747 65,747 0 0
Non-current financial liabilities 387,612 362,657 24,955 0
Deferred taxes 12,897 13,431 6,649 - 7,183
849,955 818,364 38,774 - 7,183
Current liabilities
Other current provisions 21,896 19,984 1,912 0
Trade liabilities 77,026 73,748 3,278 0
Current liabilities to related parties 67,986 2,001 75,271 - 9,286
Current financial liabilities 91,136 86,979 4,157 0
Other liabilities 34,577 34,252 325 0

Income tax liabilities 5,559 4,137 4,743 - 3,321

298,180 221,101 89,686 - 12,607 1,715,137 1,587,017 158,501 - 30,381

Cash Flow Statement HHLA Group

in €thousand 1– 9   2011 1–9 2010
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT) 164,535 141,544
Depreciation, amortisation, impairment and reversals on non-financial non-current assets 90,054 79,202
Decrease in provisions - 12,432 - 13,586
Gains/losses arising from the disposal of non-current assets - 787 151
Increase in inventories, trade receivables and other assets not attributable to investing or financing activities - 37,299 - 31,518
Increase in trade payables and other liabilities not attributable to investing or financing activities 21,071 37,747
Interest received 5,767 3,554
Interest paid - 15,738 - 17,642
Income tax paid - 14,014 - 35,429
Exchange rate and other effects - 1,088 368
Cash flow from operating activities 200,069 164,391
2. Cash flow from investing activities
Proceeds from disposal of intangible assets and property, plant and equipment 1,491 8,871
Payments for investments in property, plant and equipment and investment property - 78,708 - 65,534
Payments for investments in intangible assets - 5,748 - 5,391
Proceeds from disposal of non-current financial assets 12 4
Payments for investments in non-current financial assets - 768 - 1,802
Payments for acquiring interests in consolidated companies and other business units 0 - 259
Proceeds from disposal of interests in consolidated companies and other business units 0 1
Cash flow from investing activities - 83,721 - 64,110
3. Cash flow from financing activities
Dividends paid to shareholders of the parent company - 41,732 - 30,695
Dividends/settlement obligation paid to non-controlling interests - 27,798 - 27,166
Redemption of lease liabilities - 3,202 - 3,010
Proceeds from the issuance of (financial) loans 65,733 0
Payments for the redemption of (financial) loans - 21,938 - 25,523
Cash flow from financing activities - 28,937 - 86,394
4. Financial funds at the end of the period
Change in financial funds (subtotals 1. –  3.) 87,411 13,887
Change in financial funds due to exchange rates 439 - 629
Financial funds at the beginning of the period 233,682 179,156
Financial funds at the end of the period 321,532 192,414

Cash Flow Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2011
Group
1–9 2011
Port Logistics
1–9 2011
Real Estate
1–9 2011
Consolidation
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT) 164,535 155,317 8,988 230
Depreciation, amortisation, impairment and reversals on non-financial non
current assets
90,054 87,098 3,186 - 230
Change in provisions - 12,432 - 12,993 561
Gains/losses arising from the disposal of non-current assets - 787 - 786 - 1
Change in inventories, trade receivables and other assets not attributable to
investing or financing activities
- 37,299 - 40,112 - 360 3,173
Change in trade payables and other liabilities not attributable to investing or
financing activities
21,071 19,189 5,055 - 3,173
Interest received 5,767 5,800 60 - 93
Interest paid - 15,738 - 12,103 - 3,728 93
Income tax paid - 14,014 - 8,854 - 5,160
Exchange rate and other effects - 1,088 - 1,088 0
Cash flow from operating activities 200,069 191,468 8,601 0
2. Cash flow from investing activities
Proceeds from disposal of intangible assets and property,
plant and equipment
1,491 1,484 7
Payments for investments in property, plant and equipment
and investment property
- 78,708 - 75,260 - 3,448
Payments for investments in intangible assets - 5,748 - 5,747 - 1
Proceeds from disposal of non-current financial assets 12 12 0
Payments for investments in non-current financial assets - 768 - 768 0
Cash flow from investing activities - 83,721 - 80,279 - 3,442 0
3. Cash flow from financing activities
Dividends paid to shareholders of the parent company - 41,732 - 38,487 - 3,245
Dividends/settlement obligation paid to non-controlling interests - 27,798 - 27,798 0
Redemption of lease liabilities - 3,202 - 3,202 0
Proceeds from the issuance of (financial) loans 65,733 65,733 0
Payments for the redemption of (financial) loans - 21,938 - 19,585 - 2,353
Cash flow from financing activities - 28,937 - 23,339 - 5,598 0
4. Financial funds at the end of the period
Change in financial funds (subtotals 1. –  3.) 87,411 87,850 - 439 0
Change in financial funds due to exchange rates 439 439 0
Financial funds at the beginning of the period 233,682 238,009 - 4,327
Financial funds at the end of the period 321,532 326,298 - 4,766 0

Cash Flow Statement HHLA Subgroups

in €thousand; subgroup Port Logistics and subgroup Real Estate;
annex to the condensed notes
1–9 2010
Group
1–9 2010
Port Logistics
1–9 2010
Real Estate
1–9 2010
Consolidation
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT) 141,544 131,284 10,030 230
Depreciation, amortisation, impairment and reversals on
non-financial non-current assets
79,202 76,357 3,075 - 230
Change in provisions - 13,586 - 14,039 453
Gains/losses arising from the disposal of non-current assets 151 151 0
Change in inventories, trade receivables and other assets
not attributable to investing or financing activities
- 31,518 - 31,317 857 - 1,058
Increase in trade payables and other liabilities not
attributable to investing or financing activities
37,747 34,300 2,389 1,058
Interest received 3,554 3,591 64 - 101
Interest paid - 17,642 - 13,781 - 3,962 101
Income tax paid - 35,429 - 34,088 - 1,341
Exchange rate and other effects 368 368 0
Cash flow from operating activities 164,391 152,826 11,565 0
2. Cash flow from investing activities
Proceeds from disposal of intangible assets and property,
plant and equipment
8,871 8,871 0
Payments for investments in property, plant and equipment
and investment property
- 65,534 - 62,325 - 3,209
Payments for investments in intangible assets - 5,391 - 5,391 0
Proceeds from disposal of non-current financial assets 4 4 0
Payments for investments in non-current financial assets - 1,802 - 1,801 - 1
Payments for acquiring interests in consolidated companies
and other business units
- 259 - 259 0
Proceeds from disposal of interests in consolidated companies
and other business units
1 1 0
Cash flow from investing activities - 64,110 - 60,900 - 3,210 0
3. Cash flow from financing activities
Dividends paid to shareholders of the parent company - 30,695 - 27,990 - 2,705
Dividends paid to non-controlling interests - 27,166 - 27,166 0
Redemption of lease liabilities - 3,010 - 3,010 0
Payments for the redemption of (financial) loans - 25,523 - 23,170 - 2,353
Cash flow from financing activities - 86,394 - 81,336 - 5,058 0
4. Financial funds at the end of the period
Change in financial funds (subtotals 1. –  3.) 13,887 10,590 3,297 0
Change in financial funds due to exchange rates - 629 - 629 0
Financial funds at the beginning of the period 179,156 183,538 - 4,382 0
Financial funds at the end of the period 192,414 193,499 - 1,085 0

Segment Report HHLA Group

in €thousand; business segments;

annex to the condensed notes Subgroup Port Logistics
1–9 2011 Container Intermodal Logistics
Segment revenue
Segment revenue from non-affiliated third parties 531,356 266,032 81,324
Inter-segment revenue 4,156 1,441 12,693
Total segment revenue 535,512 267,473 94,017
Earnings
EBITDA 215,753 31,561 8,163
EBITDA margin 40.3% 11.8% 8.7%
EBIT 150,453 19,971 2,667
EBIT margin 28.1% 7.5% 2.8%
Segment assets 926,040 274,410 98,731
Other segment information
Investments
Property, plant and equipment
and investment property
70,138 23,445 2,978
Intangible assets 4,263 478 58
Depreciation of property, plant and
equipment and investment property
60,472 11,319 5,332
Amortisation of intangible assets 4,828 270 164
Non-cash items 10,700 1,775 2,499
Container throughput in thousand TEU 5,305
Container transport1 in thousand TEU 1,425
1–9 2010
Segment revenue2
Segment revenue from non-affiliated third parties 436,966 232,848 86,992
Inter-segment revenue 7,693 1,296 3,071
Total segment revenue 444,659 234,144 90,063
Earnings
EBITDA 176,108 29,601 11,093
EBITDA margin 39.6% 12.6% 12.3%
EBIT 117,889 18,584 5,808
EBIT margin 26.5% 7.9% 6.4%
EBIT from continuing activities3 117,889 16,641 5,808
Segment assets 875,439 254,463 106,490
Other segment information
Other segment information
Investments
Property, plant and equipment
and investment property
76,895 13,953 1,923
Intangible assets 3,669 320 35
Depreciation of property, plant and
equipment and investment property
55,579 10,784 5,111
Amortisation of intangible assets 2,640 233 174
Non-cash items 5,027 2,156 2,138
Container throughput in thousand TEU 4,252
Container transport1 in thousand TEU 1,261

The transport volume was fully consolidated.

2 For the purposes of comparison the revenue figures have been presented without income from incidental rental expenses.

3 EBIT from continuing activities does not contain the result from CTL.

In the figures for the current financial year an individual disclosure was dispensed with for reasons of materiality.

Group Consolidation and
reconciliation with Group
Total Subgroup Real Estate
Real Estate Holding/Other
912,481 0 912,481 21,730 12,039
- 102,315 102,315 1,884 82,141
1,014,796 23,614 94,180
254,400 - 1,290 255,690 12,174 - 11,961
51.6% - 12.7%
164,535 177 164,358 8,988 - 17,721
38.1% - 18.8%
1,837,090 298,543 1,538,547 158,558 80,808
- 1,243 101,176 3,448 1,167
198 5,550 1 750
- 803 85,636 3,178 5,335
- 662 5,695 8 425
129 23,306 481 7,851
0 788,098 20,236 11,056
- 109,660 109,660 1,839 95,761
897,758 22,075 106,817
468 222,121 13,105 - 7,786
59.4% - 7.3%
2,079 139,465 10,030 - 12,846
2,044 137,522 45.4%
10,030
- 12.0%
- 12,846
183,399 1,475,825 155,429 84,004
1,659,224
0 97,155 3,209 1,175
631 4,760 0 736
- 763 79,168 3,066 4,628
- 848
182
3,488
17,249
9
740
432
7,188

Statement of Changes in Equity HHLA Group

in €thousand

Parent company
Retained
consolidated
earnings
Reserve for
foreign currency
translation
A division S division A division S division
69,975 2,705 139,222 506 291,805 - 18,624
- 30,695
55,464 2,787
69,975 2,705 139,222 506 316,574 - 15,836
69,975 2,705 139,222 506 337,337 - 15,046
- 41,732
65,393 - 1,525
69,975 2,705 139,222 506 360,998 - 16,571
Subscribed capital Capital reserve
Total consolidated
equity
Non-controlling
interests
Parent com
pany interests
Other comprehensive income
Other Deferred taxes on
changes recognised
directly in equity
Actuarial
gains/losses
Cash flow
hedges
636,985 102,225 534,760 11,687 - 17,808 56,161 - 869
- 57,861 - 27,166 - 30,695
85,322 26,771 58,551 - 19 - 225 1,191 - 647
664,446 101,830 562,616 11,668 - 18,033 57,352 - 1,516
567,002 - 12,257 579,260 11,585 - 15,698 49,700 - 1,026
- 45,561 - 3,829 - 41,732
108,115 31,800 76,315 - 111 - 5,962 18,764 - 244
1 1 1
629,559 15,715 613,844 11,475 - 21,660 68,464 - 1,270

Interim Financial Statements 32

Statement of Changes in Equity HHLA Subgroup Port Logistics (A division) Statement of Changes in Equity HHLA Subgroup Real Estate (S division)

Statement of Changes in Equity HHLA Subgroup Port Logistics (A division)

in €thousand; annex to the condensed notes

Parent company
Subscribed capital Capital reserve Retained
consolidated
earnings
Reserve for
foreign currency
translation
Balance as of 31.12.2009 69,975 139,222 280,300 - 18,624
Dividends - 27,990
Total comprehensive income
subgroup
50,836 2,787
Balance as of 30.09.2010 69,975 139,222 303,146 - 15,836
Balance as of 31.12.2010 69,975 139,222 322,200 - 15,046
Dividends - 38,487
Total comprehensive income
subgroup
61,367 - 1,525
Other changes
Balance as of 30.09.2011 69,975 139,222 345,080 - 16,571

Statement of Changes in Equity HHLA Subgroup Real Estate (S division)

in €thousand; annex to the condensed notes

Balance as of 31.12.2009
Dividends
Total comprehensive income subgroup
Balance as of 30.09.2010
Plus income statement consolidation effect
Less balance sheet consolidation effect
Total effects of consolidation
Balance as of 30.09.2010
Balance as of 31.12.2010
Dividends
Total comprehensive income subgroup
Balance as of 30.09.2011
Plus income statement consolidation effect
Less balance sheet consolidation effect
Total effects of consolidation
Balance as of 30.09.2011

Interim Financial Statements Statement of Changes in Equity HHLA Subgroup Port Logistics (A division) Statement of Changes in Equity HHLA Subgroup Real Estate (S division) 33

Total subgroup
consolidated
equity
Non-controlling
interests
Parent com
pany interests
Other comprehensive income
Other Deferred taxes on
changes recognised
directly in equity
Actuarial
gains/losses
Cash flow
hedges
621,076 102,225 518,851 11,687 - 17,240 54,400 - 869
- 55,156 - 27,166 - 27,990
80,650 26,771 53,879 - 19 - 205 1,127 - 647
646,570 101,830 544,740 11,668 - 17,445 55,527 - 1,516
547,552 - 12,257 559,810 11,585 - 15,174 48,074 - 1,026
- 42,316 - 3,829 - 38,487
103,924 31,800 72,125 - 111 - 5,883 18,521 - 244
2 1 1 1
609,164 15,715 593,449 11,475 - 21,057 66,595 - 1,270
Total subgroup
consolidated
equity
Other comprehensive income
Deferred taxes on
changes recognised
directly in equity
Actuarial
gains/losses
Retained
consolidated
earnings
Capital reserve Subscribed capital
28,013 - 568 1,761 23,610 506 2,705
- 2,705 - 2,705
4,478 - 21 64 4,435
29,787 - 589 1,825 25,340 506 2,705
194 194
- 12,105 - 12,105
- 11,912 - 11,912
17,875 - 589 1,825 13,429 506 2,705
30,041 - 524 1,626 25,728 506 2,705
- 3,245 - 3,245
4,015 - 79 243 3,851
30,810 - 603 1,869 26,333 506 2,705
175
- 10,590 - 10,590
- 10,415 - 10,415
20,395 - 603 1,869 15,918 506 2,705

Notes to the Condensed Interim Consolidated Financial Statements

1. Basic information on the Group

The Group's parent company is Hamburger Hafen und Logistik Aktiengesellschaft, Bei St. Annen 1, 20457 Hamburg (in the following, HHLA), registered in the Hamburg Commercial Register under HRB 1902. The holding company above the HHLA Group is HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg.

The condensed interim consolidated financial statements, and therefore the information in the Notes, are presented in euros (€). For the sake of clarity, the individual items are shown in thousands of euros (€ thousand) unless otherwise indicated. Due to the use of rounding procedures, some figures may not add up to the stated sums.

2. Significant events in the reporting period

A settlement was reached in 2010 between the Hamburg Port Authority AöR, Hamburg (HPA), UNIKAI Hafenbetrieb GmbH, Hamburg (UNIKAI), and LZU Leercontainer Zentrum Unikai GmbH, Hamburg (LZU), on the early termination of leases for port areas with effect from 30 June 2011. In the second quarter the settlement reached in 2010 was supplemented by a temporary lease. This postponed the return of the properties and the entitlement to compensation by one month until 31 July 2011 but did not affect the early termination of the lease. Operations ceased as of 30 June 2011. HPA is a related party of HHLA and paid total compensation of € 15,000 thousand to UNIKAI and LZU in the third quarter for the loss of income for the leased areas.

In accordance with a merger agreement dated 13 July 2011 and approved by a shareholders' meeting on 13 and 14 July 2011, CTL Container Terminal Lübeck GmbH, Lübeck, was merged with HHLA Intermodal GmbH, Hamburg. All the assets were transferred and the company was dissolved. The merger took effect on 22 August 2011 when it was entered in the commercial register for the acquiring company.

The merger agreement between GHL Erste Gesellschaft für Hafenund Lagereiimmobilien-Verwaltung mbH, Hamburg, and GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg, was signed before a notary on 14 July 2011 and approved by a shareholders' meeting. It became effective when it was entered into the commercial register on 27 July 2011.

The merger agreement between GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block T mbH, Hamburg, and GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Bei St. Annen mbH, Hamburg, was also signed before a notary on 14 July 2011 and approved by a shareholders' meeting. It became effective when it was entered into the commercial register on 27 July 2011.

A merger agreement between HHLA Energiehandelsgesellschaft mbH, Hamburg, and HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg, was also signed before a notary and approved by a shareholders' meeting on 20 July 2011. It became effective when it was entered into the commercial register on 5 August 2011.

There was a change among the shareholder representatives on HHLA's Supervisory Board. Mr. Peter Wenzel left the Supervisory Board of HHLA at the close of the Annual General Meeting on 16 June 2011. At the Annual General Meeting Mr. Michael Pirschel, a senior civil servant at the Hamburg Ministry for the Economy, Transport and Innovation, was elected to replace him. He took his seat as of 16 June 2011 for the remaining period of office of the Supervisory Board.

Among the employee representatives, Mr. Uwe Schröder resigned his Supervisory Board seat as trade union representative on entering retirement on 30 June 2011. With effect from 1 July 2011 the Hamburg Local Court appointed Mr. Torsten Ballhause, ver.di trade union secretary for the Harbours work group, to succeed him.

3. Consolidation, accounting and valuation principles

3.1 Basis for preparation of the financial statements

The condensed interim consolidated financial statements for the period from 1 January to 30 September 2011 were prepared in compliance with the rules of IAS 34 Interim Financial Reporting.

The IFRS requirements which apply in the European Union have been met in full.

The condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of 31 December 2010.

3.2 Principal accounting and valuation methods

The accounting and valuation methods used for the preparation of the condensed interim consolidated financial statements correspond to the methods used in the preparation of the consolidated financial statements as of 31 December 2010.

In addition, the company is applying the following rules for the first time as of 1 January 2011:

  • I IAS 24 (revised) Related Party Disclosures
  • I Amendments to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (November 2009)
  • I Amendments to IAS 32 Financial Instruments: Presentation
  • I IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
  • I Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement
  • I Various Improvements to IFRS (May 2010)

Income from incidental rental expenses, which was previously recognized in revenue, has been accounted for differently since the first quarter of 2011. This income was reclassified as other operating income for the first time as of 31 March 2011 and relates primarily to the Real Estate subgroup. The item includes income for operating costs that can be charged to tenants. This income does not constitute revenue due to its transitory nature. The corresponding figures in the income statement for last year have been adjusted accordingly. The following overview can be used for comparison purposes:

in €thousand Revenues Other operating
income
1–9 2011 1–9 2010 1–9 2011 1–9 2010
Before
reclassification
916,206 791,913 28,701 22,356
Reclassification - 3,725 - 3,815 3,725 3,815
After ­reclassification 912,481 788,098 32,426 26,171

For the first time, a financial settlement payable to a minority shareholder calculated using estimated future shares of earnings was included in the non-current financial liabilities as of 31 December 2010. The estimated figure used as a basis for this liability was retained unchanged. It will be updated as and when new information becomes available.

Apart from that, there were no significant effects on the condensed interim consolidated financial statements.

4. Purchase and sale of shares in subsidiaries

No shares in subsidiaries were purchased or sold in the period to 30 September 2011.

5. Earnings per share

The following table illustrates the calculation for basic earnings per share:

1–9 2011 1–9 2010
Net profit attributable to shareholders of
the parent company in € thousand
65,393 55,464
Number of shares in circulation 72,679,826 72,679,826
Basic earnings per share in € 0.90 0.76

The basic earnings per share were calculated for the Port Logistics subgroup as follows:

1–9 2011 1–9 2010
Net profit attributable to shareholders of
the parent company in € thousand 61,367 50,836
Number of shares in circulation 69,975,326 69,975,326
Basic earnings per share in € 0.88 0.73

The basic earnings per share were calculated for the Real Estate subgroup as follows:

1–9 2011 1–9 2010
Net profit attributable to shareholders of
the parent company in € thousand
4,026 4,629
Number of shares in circulation 2,704,500 2,704,500
Basic earnings per share in € 1.49 1.71

Diluted earnings per share are identical to basic earnings per share as there were no conversion or option rights in circulation during the reporting period.

6. Dividends paid

At the Annual General Meeting held on 16 June 2011, shareholders approved the proposal by the Executive Board and Supervisory Board to distribute a dividend of € 0.55 per share to shareholders of the Port Logistics subgroup and of € 1.20 per share to shareholders of the Real Estate subgroup. The dividend of € 41,732 thousand was paid accordingly on 17 June 2011.

7. Segment report

The segment report is presented as an annex to the Notes to the condensed interim consolidated financial statements.

The HHLA Group's segment report is prepared in accordance with the provisions of IFRS 8 Operating Segments. IFRS 8 requires reporting on the basis of the internal reports to the Executive Board for the purpose of controlling the company's activities.

The segment performance indicator used is the internationally customary key figure EBIT (earnings before interest and taxes), which serves to measure the success in each segment and therefore serves the internal control function. In the previous year, internal reporting was extended to include EBIT from continuing activities. For further information, please refer to the consolidated financial statements as of 31 December 2010. Since the first quarter of 2011, the EBIT margin has been reported in addition to the standard EBIT figure.

The accounting and valuation principles applied for internal reporting comply with the principles used for the HHLA Group as described in Note 6 "Accounting and valuation principles" in the Notes to the consolidated financial statements as of 31 December 2010.

Segment information is reported on the basis of the internal control function, which is consistent with external reporting and continues to be classified in accordance with the activities of the HHLA Group's business segments. These are organized and managed autonomously in accordance with the type of services being offered.

The HHLA Group operates unchanged in the following four segments:

Container

This segment encompasses services relating to containers and ship handling. With its high-performance container terminals, HHLA maintains the Port of Hamburg's outstanding importance as a logistics hub for general cargo traffic.

Intermodal

The companies allocated to HHLA's Intermodal segment provide a comprehensive transport network encompassing rail, road and sea which links the German seaports with their hinterland in Europe.

Logistics

This segment combines a wide range of services – including special handling, contract logistics and advisory services – which go to make up Hamburg's diversity as an all-purpose port.

Real Estate

HHLA's Real Estate segment owns properties in and around the Port of Hamburg which are not used specifically for port handling. These include properties in the historical Speicherstadt warehouse district and the fish market area on the northern banks of the river Elbe.

The Holding/Other division used for segment reporting does not represent an independent business segment as defined by the IFRS standards. However, it has been allocated to the segments within the subgroup Port Logistics in order to provide a complete and clear picture.

The reconciliation of segment assets with Group assets incorporates not only items for which consolidation is mandatory, but also claims arising from current and deferred income taxes, cash and cash equivalents, and financial assets which are not to be assigned to segment assets.

The reconciliation of the segment variable EBIT with consolidated earnings before taxes (EBT) incorporates not only transactions between the segments and the subgroups for which consolidation is mandatory, but also the proportion of companies accounted for using the equity method, net interest income and other financial result.

Reconciliation of the segment variable EBIT to earnings before taxes (EBT)

in €thousand 1–9 2011 1–9 2010
Total segment earnings (EBIT) 164,358 139,465
Elimination of intercompany relations
between segments and subgroups
177 2,079
Group (EBIT) 164,535 141,544
Earning from associated accounted for
using the equity method
253 167
Net interest - 24,895 - 26,500
Other financial result 283 336
Earnings before tax (EBT) 140,176 115,547

8. Equity

The change of € 1,525 thousand in the reserve for foreign currency translation differences results mainly from exchange rate movements for the Ukrainian hryvnia.

The breakdown and development of HHLA's equity for the first nine months of 2011 and 2010 are presented in the statement of changes in equity.

9. Pension provisions

The calculation of pension provisions as of 30 September 2011 was based on an interest rate of 5.0 % (31 December 2010: 4.50 %; 30 September 2010: 4.75 %). This means that there was one change in the actuarial gains or losses to be posted directly to equity for the reporting period.

Consequently, the actuarial gains or losses offset in equity developed as follows:

in €thousand 2011 2010
Accumulated actuarial gains
on 1 January
49,838 56,253
Change in financial year 18,792 1,163
Accumulated actuarial gains
on 30 September
68,630 57,416

10. Investments

As of 30 September 2011, total investments throughout the HHLA Group amounted to € 105.7 million.

The largest investments up to the end of the third quarter of 2011 were made in the Container and Intermodal segments. In the Container segment this mainly concerned the lease of a berth at HHLA Container Terminal Burchardkai GmbH, Hamburg, in the form of a finance lease contract.

Of the most significant investment commitments as of 30 September 2011, the Container segment accounted for € 43.4 million and the Intermodal segment by € 19.9 million.

11. Litigation

Companies within the HHLA Group were involved in legal disputes within the scope of their commercial activities as of 30 September 2011. As of the balance sheet date there are no legal disputes which could have a substantial effect on the Group's financial position.

Appropriate provisions for the risks and costs of litigation have been made to cover any financial expense from court proceedings if the event took place before the balance sheet date and the company's legal representatives estimate the probability of an outflow of economic resources at more than 50 %.

12. Events after the balance sheet date

As of 1 October 2011, the operating business of HHLA Logistics GmbH, Hamburg, and HHLA Logistics Altenwerder GmbH & Co. KG, Hamburg, was bundled in HHLA Logistics GmbH.

There were no other notable events after the balance sheet date 30 September 2011.

Hamburg, 11 November 2011

Hamburger Hafen und Logistik Aktiengesellschaft

The Management Board

Klaus-Dieter Peters Dr. Stefan Behn Heinz Brandt

Dr. Sebastian Jürgens Dr. Roland Lappin

HHLA Interim Report 1–9|2011

Assurance of the Legal Representatives

We herewith give our assurance that, to the best of our knowledge, the consolidated interim financial statements convey a true and fair view of the net assets, financial position and results of operations of the Group in accordance with the applicable accounting principles, and that in the Group management report for the interim period the course of business, including the business earnings, and the situation of the Group are described such that a true and fair view is conveyed, and that there is a description of the principal opportunities and risks of probable development of the Group in the remainder of the financial year.

Hamburg, 11 November 2011

Hamburger Hafen und Logistik Aktiengesellschaft

The Management Board

Klaus-Dieter Peters Dr. Stefan Behn Heinz Brandt

Dr. Sebastian Jürgens Dr. Roland Lappin

HHLA Interim Report 1–9|2011

Financial Calendar

30 March 2012 Annual Report 2011 Balance Sheet Press Conference, Analyst Conference

15 May 2012 Interim Report January – March 2012

14 June 2012 Annual General Meeting

14 August 2012 Interim Report January – June 2012

13 November 2012 Interim Report January – September 2012

Imprint

Published by

Hamburger Hafen und Logistik AG Bei St. Annen 1 20457 Hamburg Germany Tel.: +49-40-3088-0 Fax: +49-40-3088-3355 [email protected] www.hhla.de

Investor Relations

Tel.: +49-40-3088-3100 Fax: +49-40-3088-55-3100 [email protected]

Corporate Communications

Tel.: +49-40-3088-3446 Fax: +49-40-3088-3355 [email protected]

Design

Kirchhoff Consult AG

Note

For specialist terminology and financial terms see the annual report 2010, page 182 et seq.

This document contains forward-looking statements which are based on the current estimates and assumptions by the corporate management of Hamburger Hafen und Logistik Aktiengesellschaft (HHLA ). Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by HHLA and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside the control of HHLA and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. HHLA neither plans nor undertakes to update any forward-looking statements.

Hamburger Hafen und Logistik Aktiengesellschaft Bei St. Annen 1, 20457 Hamburg, Germany, Tel.: +49-40-3088-0, Fax: +49-40-3088-3355, www.hhla.de, [email protected]

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