Extraordinary items
There are no extraordinary items to be reported for 2003 and 2002.
Board of Managing Directors and Supervisory Board
In 2003, the total compensation of the Board of Managing Directors was € 28,005,459 (2002: € 27,205,945), thereof € 23,693,460 (2002: € 22,449,960) for variable components. Former members of the Board of Managing Directors of Deutsche Bank AG or their surviving dependents received € 31,218,859 (2002: € 31,964,054). In addition to a fixed payment of € 736,117 (2002: € 174,580), the Supervisory Board received dividend-related emoluments totaling € 1,354,264 (2002: € 1,752,156).
Provisions for pension obligations to former members of the Board of Managing Directors and their surviving dependents totaled € 173,794,918 (2002: € 181,757,309).
At the end of 2003, loans and advances granted and contingent liabilities assumed for members of the Board of Managing Directors amounted to € 95,000 (2002: € 259,000) and for members of the Supervisory Board of Deutsche Bank AG to € 473,000 (2002: € 539,400).
Staff
The average number of effective staff employed in 2003 was 69,440 (2002: 82,935) of whom 29,786 (2002: 36,077) were women. Part-time staff are included in these figures proportionately. An average of 38,420 (2002: 45,623) staff members worked abroad.
Other publications
The list of mandates gives details of mandates in Germany and abroad. It can be obtained free of charge.
Reconciliation comments
Differences in accounting and measurement methods in the Consolidated Financial Statements: U.S. GAAP
compared to German Commercial Code (HGB).
In contrast to German reporting, U.S. Generally Accepted Accounting Principles (U.S. GAAP) seek creditor protection by providing relevant information rather than by conservative reporting and valuation rules. In the following cases, the different objective of U.S. GAAP leads to different accounting and valuation methods or to different reporting in the Consolidated Financial Statements:
Trading assets. Trading assets include securities held for trading purposes and positive market values from outstanding derivative financial instruments. They are carried at fair value on the balance sheet with the changes in fair value reported in trading revenues . This leads to the recognition of earnings which are qualified as unrealized gains under German law. Furthermore, positive market values from derivative financial instruments are not carried on the balance sheet under German commercial law.
Netting in trading activities. Trading assets and trading liabilities are netted if there is an enforceable master netting agreement. Similarly, positive and negative market values from derivative financial instruments with the same counterparty are netted under existing master netting agreements . Furthermore, long and short positions in a marketable security are also reported net (so-called “CUSIP/ISIN netting”).
Securities available for sale . Financial assets classified as securities available for sale are carried at fair value, whereby, unrealized gains and losses are reported within “shareholders’ equity” and realized gains and losses are recorded in earnings. Under the German Commercial Code these holdings are carried at lower-of-cost-or-market on the balance sheet.
Goodwill . Under U.S. GAAP, goodwill is not amortized but tested for impairment on an ongoing basis. Under the German Commercial Code and German Accounting Standards, goodwill is amortized over a period of up to 20 years.
Premises and equipment
Tax bases. The tax bases are not reported in the U.S. GAAP financial statements. As a result, premises and equipment are usually carried at a higher value compared with statements prepared under the German Commercial Code.
Software costs. Certain costs for self-developed software are capitalized if the specific conditions of U.S. GAAP are fulfilled. Under the German Commercial Code, all software costs are expensed as incurred.
Trading liabilities. Trading liabilities comprise short positions and negative market values from derivative financial instruments, unless they have been netted with trading assets. The German Commercial Code requires short positions to be reported under liabilities to banks and/or liabilities to customers. Negative market values from derivative financial instruments generally result in the recognition of provisions for possible losses from pending transactions, unless certain requirements for netting within “valuation units” are fulfilled.
Provisions
for pension plans and similar obligations. Forecasted salary growth is taken into account in the actuarial calculation of pension provisions. Adjustments of current pension payments are deferred and not fully written off immediately. Also, market interest rates are utilized.
In case of pension trusts whose designated trust assets serve solely to secure the long-term pension commitments made by the bank and therefore are segregated from the bank’s other operating assets, the pension liabilities are offset with the designated plan assets for reporting purposes. The corresponding profit components are also offset. The German Commercial Code does not allow such offsetting for balance sheet and P&L reporting purposes.
Deferred taxes . Deferred taxes are recorded in accordance with the balance sheet-related temporary differences concept whereby the carrying amounts of individual assets and liabilities in the balance sheet are compared with the values for tax purposes. Temporary differences between these values result in deferred tax assets or deferred tax liabilities. On the other hand, tax deferrals according to the German Commercial Code are only admissible as timing differences between commercial-law results and the profit to be calculated in accordance with tax regulations.
Own bonds/own shares. Repurchased own bonds are extinguished. Differences between cost and issuing value are recognized in the statement of income.
Own shares (treasury shares) are deducted from shareholders’ equity with their acquisition cost. Gains and losses are directly attributed to additional paid-in capital.
Minority interests. Minority interests are reported as other liabilities.
Trust business. In accordance with its economic content, trust business which the bank transacts in its own name, but for third-party account, is not reported in the balance sheet.