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Note 4: Financing income and expenses


In € millions

 

2011

 

2012

Financing income

 

57

 

59

Financing expenses

 

(302)

 

(239)

Net interest on net debt

 

(245)

 

(180)

 

 

 

 

 

Other interest movements

 

 

 

 

Financing expenses related to pensions

 

(57)

 

(65)

Interest on provisions

 

(46)

 

(29)

Other items

 

12

 

7

Net other financing charges

 

(91)

 

(87)

Net financing expenses

 

(336)

 

(267)

Net financing charges for the year decreased by €69 million from €336 million to €267 million. Significant variances are:

  • Financing expenses on net debt decreased by €63 million to €239 million (2011: €302 million) mainly due to a reported loss of €67 million on buy-back of bonds in December 2011
  • Interest on provisions decreased by €17 million to €29 million (2011: €46 million) due to higher discount rates applied in 2012
  • Financing expenses related to pensions increased by €8 million to €65 million (2011: €57 million) due to lower expected return on assets
  • Other items decreased by €5 million to €7 million (2011: €12 million), mainly explained by lower interest on discounted long term receivables (€3 million)

A reduction of €8 million (2011: €4 million) was included in the interest expenses of capital investment projects under construction. The average interest rate used for capitalization of these borrowing costs was 6.1 percent.

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