Change

Note 5 Financing income and expenses


In € millions

 

 

 

 

2008

2009

 

 

 

 

Interest income:

 

 

-

Interest rate derivatives

36

19

-

Loans and receivables

113

43

-

Other

5

 

 

 

 

Interest expenses:

 

 

-
 

Net financing expenses on pensions and other post-retirement benefits

(49)

(174)

-

Interest rate derivatives

(54)

(9)

-

Other financial liabilities

(236)

(231)

-

Other

(37)

(54)

 

 

 

 

Fair value changes:

 

 

-

Interest rate derivatives

49

(14)

-

Other financial liabilities

(46)

12

 

 

 

 

Other

(13)

(1)

 

 

 

 

Total

(232)

(409)

The net financing charges increased by €177 million to €409 million:

  • Financing income decreased by €92 million to €62 million (2008: €154 million) due to significantly lower market interest rates and cash utilized for the share buyback program in 2008.
  • Net financing expenses on pensions and other post-retirement benefits increased by €125 million to €174 million (2008: €49 million) due to lower expected returns on plan assets. These expenses are composed of interest expenses for €770 million (2008: €851 million), which is being offset by the expected return on plan assets of €596 million (2008: €802 million).
  • Other financing expenses decreased by €40 million to €297 million (2008: €337 million). Higher interest expense for our refinanced debt during 2009 was offset by lower costs for fair value changes of financial instruments.

Included in the interest expenses was a reduction of €6 million (2008: €3 million) due to the capitalization of financing expenses of capital investment projects under construction. The average interest rate used for capitalization of borrowing cost was 6 percent.

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