37. Other non-current and current provisions

Demolition obligations

The demolition obligations relate to HHLA’s Container, Logistics and Real Estate segments and are discounted at a rate of 4.0 % p.a. (previous year: 4.0 % p.a.). In the reporting year, an anticipated price increase of 2.8 % (previous year: 2.8 %) was used to calculate the provisions shown. This rate is derived from the German construction cost index. The effects of these changes are shown under additions. The outflow of these resources is expected in the period 2025–2045.

Restructuring

The provisions for restructuring relate to the reorganisation in the Logistics segment and organisational restructuring in the Container segment. Based on the current degree of implementation for the organisational restructuring in the Container segment, HHLA remeasured the restructuring provision as of 31 December 2023. The remeasurement was primarily based on an updated estimate of the measures to be implemented, in conjunction with a shift in the time they will be implemented. As a result of this remeasurement, the provision decreased by around € 18.8 million compared with 31 December 2022. The securities holdings acquired in connection with this are classified as plan assets under IAS 19 (revised 2011). They were thus netted out against the obligations contained in the provision amount. The corresponding figure of € 3,706 thousand (previous year: € 1,886 thousand) therefore reduces the provisions reported; see Note 26. A discount rate of 3.4 % p.a. (previous year: 3.7 % p.a.) was used for the calculation. The outflow of funds will take place between 2024 and 2031.

Bonuses and single payments

Current provisions for bonuses and single payments largely consist of provisions for Executive Board members and other senior staff. The outflow of funds for the current part will become payable in the 2024 financial year.

Non-current provisions for bonuses and single payments include stock appreciation rights granted to the management of a subsidiary. The management participates in the long-term development of the company on a percentage basis, within a range of 0.5 % to 1.0 % where a certain threshold value is exceeded. The threshold value is the enterprise value at the time of the commitment. Stock appreciation rights are granted by means of cash settlement. The payment is non-forfeitable insofar as the contractual provisions are complied with. An option pricing model (binomial model) is used to value the stock appreciation rights. The company's performance and the threshold value are used to determine the fair value of these stock appreciation rights, taking into account expected volatility and a risk-free interest rate corresponding to the remaining term of the stock appreciation rights. Expected dividends were not taken into account when determining the fair value. The provision to be recognised on the basis of the currency of the stock appreciation rights was determined on the basis of the proportionate service rendered. No expense was recorded in the reporting period. HHLA assumes a term until 2030.

Insurance excesses

This obligation relates to provisions largely created by the Group’s parent company to allow for potential cases of damage or loss which exceed the existing insurance cover. The funds will become payable in the 2024 financial year.

Anniversaries

Provisions for anniversaries relate to Group employees’ contractual entitlement to anniversary gratuities. The amount recognised is determined by an actuarial opinion. A discount rate of 3.5 % p.a. (previous year: 4.1 % p.a.) was used for the calculation. The outflow of these resources is expected to take place in the period 2024–2063.

Legal fees and litigation expenses

Provisions for legal fees and litigation expenses mainly consist of obligations arising from provisions for legal risks associated with pending proceedings. The outflow of these resources is expected in the 2024 financial year.

Phased early retirement

Provisions for phased early retirement consist of HHLA’s obligations from the entitlements accrued during the beneficiaries’ working period, plus a supplementary amount added pro rata temporis. The securities holdings acquired in connection with phased early retirement contracts are classified as plan assets under IAS 19 (revised 2011). They were thus netted out against the phased early retirement obligations contained in the provision amount. The corresponding figure of € 280 thousand (previous year: € 202 thousand) therefore reduces the provisions reported; see Note 26. In addition, pledged bank balances serve to cover the obligations in existence as of the balance sheet date. The amount of the provision was determined using a discount rate of 3.4 % p.a. (previous year: 3.6 % p.a.). The outflow of these resources is expected in the period 2024–2029.

Other

Other provisions largely relate to obligations arising from individual contractual agreements with members of staff. The securities holdings acquired in connection with this are classified as plan assets under IAS 19 (revised 2011). They were thus netted out against the obligations included in the amount of the provision. The corresponding figure of € 402 thousand (previous year: € 502 thousand) therefore reduces the provisions reported; see Note 26. The main outflow of funds will take place between 2024 and 2028.