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Note 5 Financing income and expenses


In € millions

2009

2010

 

 

 

Interest income:

 

 

Loans and receivables

58

51

Interest expenses:

 

 

– Net financing expenses on pensions and other post-retirement benefits

(171)

(100)

– Interest rate derivatives

10

14

– Other financial liabilities

(245)

(253)

– Interest on provisions

(54)

(39)

Fair value changes:

 

 

– Interest rate derivatives

(14)

16

– Other financial liabilities

12

(15)

– Other

(1)

(1)

Total

(405)

(327)

The net financing charges for the year decreased by €78 million from €405 million to €327 million, due to decreased financing expenses on pensions (€71 million mainly due to higher returns on plan assets). In addition:

  • Interest on provisions decreased by €15 million due to lower discount rates
  • Interest on other financial liabilities increased by €8 million due to higher cost of bonds refinanced in 2009.

A reduction of €10 million (2009: €6 million) was included in the interest expenses due to the capitalization of financing expenses of capital investment projects under construction. The average interest rate, used for capitalization of borrowing cost was 6.4 percent.

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