Notes to the consolidated balance sheets

12 Intangible assets

Changes in the Group's intangible assets were as follows:

million €

		Franchises, trademarks and similar rights and values as well as licenses there to		Development costs, internally developed software and website		Goodwill		Total
Gross amounts
Balance as of Sept. 30, 2007		1,188		319		4,658		6,165
Currency differences		(3)		5		(72)		(70)
Acquisitions/divestitures of businesses		36		(3)		69		102
Additions		57		103		49		209
Transfers		19		(2)		0		17
Disposals		(14)		(41)		(2)		(57)
Balance as of Sept. 30, 2008		1,283		381		4,702		6,366
Currency differences		(9)		4		(40)		(45)
Acquisitions/divestitures of businesses		7		0		71		78
Additions		85		90		2		177
Transfers		29		14		0		43
Disposals		(35)		(1)		(8)		(44)
Balance as of Sept. 30, 2009		1,360		488		4,727		6,575
Accumulated amortization and impairment losses
Balance as of Sept. 30, 2007		584		156		863		1,603
Currency differences		(2)		2		(13)		(13)
Acquisitions/divestitures of businesses		1		(4)		(4)		(7)
Amortization expense		90		33		0		123
Impairment losses		5		8		0		13
Reversals of impairment losses		0		0		—		0
Transfers		0		1		0		1
Disposals		(14)		(21)		(2)		(37)
Balance as of Sept. 30, 2008		664		175		844		1,683
Currency differences		(4)		1		(17)		(20)
Acquisitions/divestitures of businesses		0		0		(2)		(2)
Amortization expense		103		37		0		140
Impairment losses		12		40		0		52
Reversals of impairment losses		0		0		—		0
Transfers		(3)		4		0		1
Disposals		(21)		(3)		0		(24)
Balance as of Sept. 30, 2009		751		254		825		1,830
Net amounts
as of Sept. 30, 2007		604		163		3,795		4,562
as of Sept. 30, 2008		619		206		3,858		4,683
as of Sept. 30, 2009		609		234		3,902		4,745

The balance as of Sept. 30, 2009 includes gross amounts of €145 million (2008: €0 million) as well as accumulated amortization and impairment losses of €42 million (2008: €0 million) resulting in net amounts of €103 million (2008: €0 million) which relate to disposal groups.

Impairment of goodwill

Goodwill impairment losses are in included in other operating expenses.

In 2007/2008 and 2008/2009 neither the annual impairment test nor other events indicated that goodwill might be impaired because the recoverable amounts of all cash generating units exceeded the respective carrying amounts.

Impairment of other intangible assets

Impairment losses of intangible assets other than goodwill are included in cost of sales.

In 2007/2008 the Stainless segment fully impaired in the ThyssenKrupp Acciai Speciali Terni business unit a capitalized intangible asset of €4 million resulting from a former favourable supply of energy which does not longer exist. Furthermore impairment losses of €6 million for capitalized development costs were recognized in the Automotive Solutions business unit as a result of weakening market conditions. The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate of 10.6% was used to calculate the values in use.

In 2008/2009 the Steel segment fully impaired in the Auto business unit capitalized development costs of €9 million attributable to projects to improve the conditions and the surface structure of steel because the recognition criteria of IAS 38 were no longer met.

Also, in the Stainless segment in the ThyssenKrupp Nirosta business unit capitalized development cost of €16 million of a strip casting equipment were fully impaired due to a lack of usability in the market. In the Technologies segment in the Automotive Solutions business unit capitalized development cost of €12 million were fully impaired because the recognition criteria of IAS 38 were no longer met.

Goodwill

Goodwill (excluding goodwill of equity method investments) has been allocated to cash generating units within all segments. The recoverable amount of each cash generating unit is determined based on a value in use calculation using after-tax cash flow projections based on bottom-up prepared financial budgets approved by ThyssenKrupp AG's management covering a four-year period (Steel: five-year period). The budgeted last year is generally used to determine the cash flows beyond the budgeted period. No growth rate is taken into account to extrapolate the budgeted last year. The weighted average cost of capital discount rate is based on a risk-free interest rate of 4.0% and risk premiums for equity and debt capital of 5.0 percentage-points and 2.5 percentage-points, respectively. Moreover for each CGU an individual beta derived from the relevant peer group, an individual tax rate and an individual capital structure is used. The following after-tax discount rate ranges have been applied to the cash flow projections by segment:

in %

		After tax discount rate ranges
		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Steel		7.4 - 9.5		8.1 - 8.6
Stainless		7.8 - 9.6		7.7 - 9.2
Technologies		5.8 - 10.0		6.8 - 10.8
Elevator		6.7 - 7.4		8.2 - 8.3
Services		7.2 - 8.9		7.7 - 8.8
Corporate		8.0		7.8

The goodwill impairment test performed as of September 30, 2009, to test certain goodwills whether they might be impaired due to events or changes in circumstances, used current betas. Compared to October 01, 2008, a modified risk-free interest rate of 4.25% and a debt capital spread of 2.4% were used in the calculations resulting in an after tax discount rate range between 8.5% and 8.9% for the CGUs of the Stainless segment and an after tax discount rate of 7.2% for the Marine Systems CGU. The tests did not indicate that any goodwill might be impaired.

The values in use for the CGUs are generally calculated on the basis of expected price inflation in the country in which the CGU is located and on the basis of estimated sales growth rates. These figures are determined based on both historical data and expected forecast market performance. The values assigned to the key assumptions are generally consistent with external information sources.

41 CGUs were identified in the ThyssenKrupp Group, of which 35 report goodwill. Total goodwill as of October 01, 2008 amounts to €3,858 million. 53% of this goodwill relates to the CGUs Metallurgy, Marine Systems and Americas, as shown in the following table:

Table: Significant goodwill

For none of the CGUs a goodwill impairment had to be recognized because the recoverable amount of all CGUs was higher than the respective carrying amount. The recoverable amount of the CGU Presta Steering exceeded the carrying amount of the CGU by less than 10%.

Critical goodwill

CGU (Segment)		Carrying amount of CGU (million €)		Recoverable amount of CGU (million €)		Description of key assumptions of budgeting		Procedure used to determine key assumptions
Presta Steering (Technologies)		408		423		- Market growth rates		Consideration of the current sales base as well as external sources of information and customer information

A 10% increase in the discount rate of the CGU Presta Steering would result in a goodwill impairment of €53 million. However, the Management of ThyssenKrupp believes in the case of this CGU that no reasonably possible change in any of the key assumptions used in calculating the recoverable amount would cause the carrying amount of the CGU to exceed the respective recoverable amount.

The change in the carrying amount of goodwill (excluding goodwill of equity method investments) is as follows:

Download

million €

		Steel		Stainless		Technologies		Elevator		Services		Corporate		Total*
Balance as of Sept. 30, 2007		324		334		1,573		1,187		362		15		3,795
Currency differences		(1)		(1)		(2)		(47)		(8)		0		(59)
Acquisitions/(divestitures)		3		0		(21)		19		72		0		73
Additions		0		0		11		38		0		0		49
Balance as of Sept. 30, 2008		326		333		1,561		1,197		426		15		3,858
Currency differences		0		(2)		4		(20)		(5)		0		(23)
Acquisitions/(divestitures)		(1)		0		4		19		51		0		73
Additions		0		0		0		1		1		0		2
Disposals		0		0		(7)		(1)		0		0		(8)
Balance as of Sept. 30, 2009		325		331		1,562		1,196		473		15		3,902

13 Property, plant and equipment

Changes in the Group's property, plant and equipment were as follows:

million €

		Land, leasehold rights and buildings including buildings on third-party land		Technical machinery and equipment		Other equipment, factory and office equipment		Assets under finance lease		Assets under operating lease		Construction in progress		Total
Gross amounts
Balance as of Sept. 30, 2007		5,126		14,719		2,352		287		43		899		23,426
Currency differences		(2)		(32)		(13)		(1)		(3)		9		(42)
Acquisitions/divestitures of businesses		(7)		(89)		(10)		6		(11)		(13)		(124)
Additions		129		739		282		41		0		2,766		3,957
Transfers		114		507		(6)		(4)		(6)		(432)		173
Disposals		(72)		(268)		(167)		(89)		(7)		0		(603)
Balance as of Sept. 30, 2008		5,288		15,576		2,438		240		16		3,229		26,787
Currency differences		(31)		(65)		(17)		(1)		0		(100)		(214)
Acquisitions/divestitures of businesses		2		(12)		5		0		0		4		(1)
Additions		130		660		222		11		0		3,017		4,040
Transfers		113		442		32		(3)		0		(82)		502
Disposals		(42)		(223)		(122)		(19)		0		(11)		(417)
Balance as of Sept. 30, 2009		5,460		16,378		2,558		228		16		6,057		30,697
Accumulated depreciation and impairment losses
Balance as of Sept. 30, 2007		2,560		10,556		1,573		139		7		1		14,836
Currency differences		(1)		(28)		(7)		(1)		0		0		(37)
Acquisitions/divestitures of businesses		(15)		(69)		(11)		2		(3)		0		(96)
Depreciation expense		157		838		235		25		1		0		1,256
Impairment losses		3		19		1		2		0		0		25
Reversals of impairment losses		(1)		(15)		0		0		0		0		(16)
Transfers		11		5		(5)		(4)		0		0		7
Disposals		(48)		(233)		(140)		(32)		(1)		0		(454)
Balance as of Sept. 30, 2008		2,666		11,073		1,646		131		4		1		15,521
Currency differences		(9)		(51)		(10)		(1)		0		0		(71)
Acquisitions/divestitures of businesses		(2)		(11)		1		0		0		4		(8)
Depreciation expense		140		854		222		21		1		0		1,238
Impairment losses		141		243		6		0		0		2		392
Reversals of impairment losses		(1)		(1)		0		0		0		0		(2)
Transfers		(2)		(4)		6		(3)		0		0		(3)
Disposals		(21)		(201)		(102)		(11)		(1)		0		(336)
Balance as of Sept. 30, 2009		2,912		11,902		1,769		137		4		7		16,731
Net amounts
as of Sept. 30, 2007		2,566		4,163		779		148		36		898		8,590
as of Sept. 30, 2008		2,622		4,503		792		109		12		3,228		11,266
as of Sept. 30, 2009		2,548		4,476		789		91		12		6,050		13,966

The balance as of Sept. 30, 2009 includes gross amounts of €324 million (2008: €0 million) as well as accumulated amortization and impairment losses of €151 million (2008: €0 million) resulting in net amounts of €173 million (2008: €0 million) which relate to disposal groups.

Impairment losses of property, plant and equipment are included in cost of sales.

In 2007/2008 impairment losses of €6 million were recognized in the Metal Forming business unit of the Steel segment. €1 million of the total impairment refers to land and buildings and €2 million to assets under finance lease which both had to be fully impaired due to the intended closing of a location. Another €3 million of the impairment loss was recognized as a result of the weakening economic situation for technical machinery and equipment. The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate of 15.7% was used to calculate the values in use. Furthermore, the Technologies segment recorded impairments of €15 million as a result of a weakening economic situation in the Mechanical Components, Automotive Solutions and Transrapid business units. €2 million of the total impairment relates to land and buildings and €13 million to technical machinery and equipment. The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate of 12.7% was used to calculate the values in use.

In addition, in 2007/2008 in the ThyssenKrupp Acciai Speciali Terni business unit of the Stainless segment an impairment loss of €14 million on technical equipment has been reversed because compared to September 30, 2007, a higher selling price is expected for parts of the equipment. The amount of the reversal has been based on fair value less cost to sell.

In 2008/2009 impairment losses are mainly incurred in the context of the restructurings. The Steel segment recorded impairments of €13 million in the Industry and Auto business units. €4 million of the total impairment relates to land and buildings and €9 million to technical machinery and equipment. The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate of 13.1% and 14.7%, respectively, was used to calculate the values in use. In the Stainless segment impairment losses of €91 million were recognized, mainly in the ThyssenKrupp Nirosta und Shanghai Krupp Stainless business units. €14 million of the total impairment refers to land and buildings, €76 million to technical machinery and equipment and €1 million to other equipment. The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate of 11.7% and 9.2%, respectively, was used to calculate the values in use. In the Technologies segment impairment losses of €286 million were recognized; thereof €122 million refers to land and buildings, €157 million to technical machinery and equipment and €7 million to other equipment. The impairment losses were mainly recognized in the Marine Systems (€148 million) and Mechanical Components (€114 million) business units. Given the weak order situation in the Marine Systems business unit, it was necessary to reduce overcapacities, resulting in significant impairments. In the Mechanical Components business unit the sharp drop in demand in the automotive and construction machinery businesses and in engineering sector in general resulted in a substantial decrease in orders that affected all areas, but in particular the production of construction machinery components and forged crankshafts.

The recoverable amounts used to calculate the impairment losses correspond in each case to the values in use. A discount rate in a range between 10.1% and 17.4% was used to calculate the values in use.

Property, plant and equipment include leased buildings, technical machinery and equipment and other equipment that have been capitalized, where the terms of the lease require the Group, as lessee, to assume substantially all of the benefits and risks of use of the leased asset (finance lease).

million €

		Gross amounts				Accumulated depreciation and impairment losses				Net amounts
		Sept. 30, 2008		Sept. 30, 2009		Sept. 30, 2008		Sept. 30, 2009		Sept. 30, 2008		Sept. 30, 2009
Land, leasehold rights and buildings including buildings on third-party land		97		94		43		44		54		50
Technical machinery and equipment		95		85		59		59		36		26
Other equipment, factory and office equipment		48		49		29		34		19		15
Assets under finance lease		240		228		131		137		109		91

Property, plant and equipment have been pledged as security for financial payables of €129 million (2008: €174 million).

14 Investment property

Changes in the Group's investment property were as follows:

million €

		2008		2009
Gross amounts
Balance as of Sept. 30, 2007 and Sept. 30, 2008, respectively		569		506
Currency differences		0		0
Acquisitions/divestitures of businesses		0		0
Additions		1		1
Transfers		(8)		10
Disposals		(56)		(24)
Balance as of Sept. 30, 2008 and 2009, respectively		506		493
Accumulated depreciation and impairment losses
Balance as of Sept. 30, 2007 and Sept. 30, 2008, respectively		180		149
Currency differences		0		0
Acquisitions/divestitures of businesses		0		0
Depreciation expense		3		2
Impairment losses		1		2
Reversals of impairment losses		(1)		0
Transfers		(8)		5
Disposals		(26)		(6)
Balance as of Sept. 30, 2008 and 2009, respectively		149		152
Net amounts
as of Sept. 30, 2007		389		—
Balance as of Sep. 30, 2008 and 2009, respectively		357		341

The fair value of the Group's investment property is determined using various internationally accepted valuation methods such as the gross rental method, discounted cash flow method, asset value method and comparison to current market prices of similar real estate. Investment property located in Germany is primarily determined based on internally prepared valuations using the gross rental method which is regulated in Germany by the "Verordnung über Grundsätze für die Ermittlung der Verkehrswerte von Grundstücken – WertV". Investment property located outside Germany is determined by external appraisers.

As of September 30, 2009, the total fair value of the Group's investment property is €436 million (2008: €455 million) of which €13 million (2008: €16 million) are based on valuations of external appraisers.

Additions which are disclosed in the gross amounts include subsequent expenditure of €0 million (2008: €0.3 million).

The lease of investment property resulted in rental income of €20 million (2007/2008: €26 million) and direct operating expense of €10 million (2007/2008: €15 million). Direct operating expense of €6 million (2007/2008: €6 million) resulted from investment property that does not generate rental income.

15 Investments accounted for using the equity method

Investments in associates

As of September 30, 2009, the carrying amount of investments in associates accounted for using the equity method is €59 million (2008: €76 million). The income of investments in associates accounted for using the equity method is €(15) million (2007/2008: €28 million).

Summarized financial information of associates accounted for using the equity method is presented in the table below. The information given represents 100% and not the Group's interest in the associates:

million €

		Sept. 30, 2008		Sept. 30, 2009
Total assets		774		717
Total liabilities		496		521
		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Net sales		781		629
Net income		57		(34)

In 2008/2009, the unrecognized share of losses of an associate accounted for using the equity method amounts to €2 thousand (2007/2008: 0). The unrecognized losses cumulate to €27 thousand (2007/2008: €314 thousand).

Joint Ventures

The following table shows the summarized financial information of the Group's joint ventures. The information given represents the Group's interest in the joint ventures:

million €

		Sept. 30, 2008		Sept. 30, 2009
Current assets		633		641
Non-current assets		399		418
Current liabilities		385		404
Non-current liabilities		308		327
		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Net sales		1,575		1,730
Net income		45		20

The associates and joint ventures are included in the list of the Group's subsidiaries and equity interests investments which is presented in Note 38.

16 Operating lease as lessor

The Group is the lessor of various commercial real estates under operating lease agreements.

As of September 30, the future minimum lease payments to be received on non-cancellable operating leases are as follows:

million €

		Sept. 30, 2008		Sept. 30, 2009
Not later than one year		24		24
Between one and five years		36		37
Later than five years		35		30
Total		95		91

The amounts reflected as future minimum lease payments do not contain any contingent rentals. No contingent rentals have been recognized in the consolidated statements of income in 2008/2009 (2007/2008: 0).

17 Inventories

million €

		Sept. 30, 2008		Sept. 30, 2009
Raw materials		2,145		1,362
Supplies		490		468
Work in process		2,159		1,958
Finished products, merchandise		4,700		2,968
Total		9,494		6,756

Inventories of €2,099 million (2008: €781 million) are carried at net realizable value. Inventories of €5 million (2008: €41 million) have a remaining term of more than 1 year. Inventories of €36,905 million (2008: €44,270 million) are recognized as an expense during the period. Included in cost of sales are write-downs of inventories of €317 million (2008: €76 million).

18 Trade accounts receivable

million €

		Sept. 30, 2008		Sept. 30, 2009
Receivables from sales of goods and services		6,853		4,593
Amounts due from customers for construction work		1,032		679
Total		7,885		5,272

Receivables from the sales of goods and services in the amount of €723 million (2008: €873 million) have a remaining term of more than 1 year. As of September 30, 2009 cumulative impairment losses of €513 million (2008: €284 million) are recognized for doubtful accounts.

An analysis of the age of trade accounts receivable that are past due but not impaired as of the reporting date is presented in the table below:

million €

		Carrying amount		thereof:		thereof: not impaired but past due as of balance sheet date												thereof:
		Trade accounts receivable		neither impaired nor past due as of balance sheet date		past due up to 30 days		past due 31 to 60 days		past due 61 to 90 days		past due 91 to 180 days		past due 181 to 360 days		past due more than 360 days		impaired as of balance sheet date
Sept. 30, 2008		7,885		6,590		610		207		95		85		78		135		85
Sept. 30, 2009		5,272		4,399		333		113		79		90		80		45		133

Amounts due from customers for construction work are calculated as follows:

million €

		Sept. 30, 2008		Sept. 30, 2009
Contract costs incurred and recognized contract profits (less recognized losses)		2,836		3,318
Less advance payments received		(1,804)		(2,639)
Total		1,032		679

Advanced payments received are collateralized by assets of €99 million (2008: €48 million). Sales from construction contracts of €7,276 million were recognized in the period (2007/2008: €6,721 million).

The Group regularly primarily sells credit insured trade accounts receivable under asset backed securitization programs and other programs as well as under one-time transactions.

As of September 30, 2008, sales of receivables in the amount of €3 million did not result in a derecognition from the balance sheet because the Group retained substantially all the risks and rewards of ownership. The corresponding liability is included in financial debt (see also Note 25). The sales resulted in net proceeds in the amount of €3 million. As of September 30, 2009, such sales of receivables did not exist.

The amount of receivables sold and derecognized from the balance sheet as of September 30, 2009, was €836 million (2008: €972 million), resulting in net proceeds in the amount of €816 million (2007/2008: €938 million). In some cases, when the Group sells receivables it retains rights and immaterial obligations; these retained interests mainly consist of servicing as well as providing limited cash reserve accounts and dilution reserves. The recognized assets and provided guarantees which serve as a cash reserve account amounted to €73 million (2008: €72 million) as of September 30, 2009. Continuing involvement primarily resulting from the dilution reserve was €19 million (2008: €26 million) as of September 30, 2009.

19 Other financial assets

million €

		Sept. 30, 2008				Sept. 30, 2009
		current		non-current		current		non-current
Loans and receivables		248		44		729		30
Available-for-sale financial assets		107		74		170		66
Derivatives that do not qualify for hedge accounting (Financial assets held for trading)		448		—		245		—
Derivatives that qualify for hedge accounting		78		—		114		—
Total		881		118		1,258		96

Other financial assets in the amount of €124 million (2008: €156 million) have a remaining term of more than 1 year. As of September 30, 2009 cumulative impairments amount to €60 million (2008: €75 million) regarding current other financial assets and €51 million (2008: €25 million) regarding non-current other financial assets.

An analysis of the age of other financial assets that are past due but not impaired as of the reporting date is presented in the table below:

million €

		Carrying amount		thereof:		thereof: not impaired but past due as of balance sheet date												thereof:
		Other financial assets		neither impaired nor past due as of balance sheet date		past due up to 30 days		past due 31 to 60 days		past due 61 to 90 days		past due 91 to 180 days		past due 181 to 360 days		past due more than 360 days		impaired as of balance sheet date
Sept. 30, 2008		999		931		0		0		0		0		0		0		68
Sept. 30, 2009		1,354		1,277		2		1		0		1		1		1		71

20 Other non-financial assets

million €

		Sept. 30, 2008				Sept. 30, 2009
		current		non-current		current		non-current
Advance payments on intangible assets		—		40		—		24
Advance payments on property, plant and equipment		—		862		—		431
Advance payments to suppliers of inventories		802		—		771		—
Other advance payments and prepayments		312		—		204		—
Reimbursement rights		83		—		76		—
Others		756		—		678		—
Total		1,953		902		1,729		455

Other non-financial assets in the amount of €43 million (2008: €47 million) have a remaining term of more than 1 year. As of September 30, 2009 cumulative impairments amount to €19 million (2008: €34 million).

21 Total Equity

Total equity and the number of shares outstanding changed as follows:

Table: Total Equity

€(1) million, €2 million and €2 million of the balance of cumulative income and expense directly recognized in equity result from associates as of Sept. 30, 2007, Sept. 30, 2008 and Sept. 30, 2009, respectively. €0 million (2007/2008: €3 million) of the changes of cumulative income and expense directly recognized in equity result from associates.

The following table shows the changes of the foreign currency translation adjustment which is part of cumulative income and expense directly recognized in equity:

million €

		Foreign currency translation adjustment
Balance as of Sept. 30, 2007		(202)
Change in unrealized gains/(losses), net		(83)
Net realized (gains)/losses		0
Balance as of Sept. 30, 2008		(285)
Change in unrealized gains/(losses), net		(48)
Net realized (gains)/losses		0
Balance as of Sept. 30, 2009		(333)

Capital stock

The capital stock of ThyssenKrupp AG consists of 514,489,044 no-par bearer shares of stock, all of which have been issued, with 463,473,492 outstanding as of September 30, 2009 and 2008, respectively. Each share of common stock has a stated value of €2.56.

All shares grant the same rights. The stockholders are entitled to receive dividends as declared and are entitled to one vote per share at the stockholders' meetings.

Additional paid in capital

Additional paid in capital include the effects of the business combination of Thyssen and Krupp as well as premiums resulting from capital increases at subsidiaries with minority interest.

Retained earnings

Retained earnings include prior years' undistributed consolidated income. In addition, the recycling of actuarial gains and losses in the context of the disposal of accrued pension liabilities as well as equity impacts resulting from share-based compensation are included in this balance sheet item.

Treasury stock

On the basis of the authorization granted by the Annual General Meeting on January 18, 2008, the Executive Board of ThyssenKrupp AG resolved on January 31, 2008, to acquire up to approximately 3% of the current capital stock issued. In the period from February 01, 2008 to March 07, 2008, ThyssenKrupp AG purchased a total of 14,791,100 treasury shares, representing approximately 2.9% of the capital stock, at an average price of €35.34. This represents a total amount of €523 million. In addition, based on the authorization of the Annual General Meeting, the Executive Board resolved on July 14, 2008, to acquire up to approximately 2% of the capital stock issued. In the period from July 15, 2008 to August 13, 2008, ThyssenKrupp AG purchased a total of 10,500,000 treasury shares, representing approximately 2.0% of the capital stock, at an average price of €33.98. This represents a total amount of €357 million.

After the two acquisitions in 2007/2008 and the treasury share acquisition in 2005/2006, ThyssenKrupp AG holds 51,015,552 treasury shares in total as of September 30, 2009, representing approximately 9.9% of the capital stock.

Minority interest

In fiscal year 2008/2009, the investment of the minority shareholder Vale S.A. in ThyssenKrupp CSA Siderúrgica do Atlântico Ltda. resulted in an increase of minority interest of €1.4 billion.

Management of capital

As of September 30, 2009, the equity ratio reached 23.4% (2008: 27.6%). Among the ThyssenKrupp Group's most important financial goals are a sustainable appreciation of entity value and ensuring solvency at all times. Creating sufficient liquidity reserves is therefore of great importance. These objectives are achieved by implementing various capital cost reduction and capital structure optimization measures as well as effective risk management.

The ThyssenKrupp Group's financial risks are assessed on the basis of ratings by rating agencies:

		Long-termrating		Short-termrating		Outlook
Standard & Poor’s		BBB-		A-3		watch negative
Moody’s		Baa3		Prime-3		negative
Fitch		BBB-		F3		negative

In 2008/2009 the ratings of ThyssenKrupp have been lowered by all agencies, mainly because of weaker earnings as a consequence of the worldwide recession. ThyssenKrupp is rated as investment grade by all rating agencies. For the financing of the ThyssenKrupp Group, an investment grade rating in the "BBB" range leads to an optimum of capital costs. Moreover, it basically ensures access to a broad base of investors. Capital management at ThyssenKrupp is based on debt ratios published by rating agencies, which calculate cash-flow-to-debt ratios periodically. ThyssenKrupp is not subject to statutory capital requirements.

Authorizations

According to Art. 5 Para. 5 of the Articles of Association of ThyssenKrupp AG, the Executive Board is authorized, with the approval of the Supervisory Board, to increase the capital stock on one or more occasions on or before January 18, 2012, by up to €500 million by issuing up to 195,312,500 new no-par shares in exchange for cash and/or contributions in kind (Authorized Capital).

By resolution of the Annual General Meeting on January 23, 2009, the Executive Board is authorized, subject to the approval of the Supervisory Board, to issue bearer bonds with a total par value up to €2 billion and to grant the bond holders the right to convert the bonds into a total of up to €50 million bearer shares of ThyssenKrupp with an arithmetical share in the Company's capital stock of up to €128 million (convertible bonds). The authorization is valid until January 22, 2014. In addition, by resolution of the Annual General Meeting on January 23, 2009, ThyssenKrupp is authorized through July 22, 2010, to purchase treasury stock for certain defined purposes up to a total of 10% of the current capital stock issued.

Dividend proposal

The Executive Board and Supervisory Board have agreed to propose to the Annual General Meeting a dividend in the amount of €0.30 per share entitled to dividend to be distributed from unappropriated net income of the stand-alone entity ThyssenKrupp AG for fiscal 2008/2009 as determined in conformity with the principles of the German Commercial Code (HGB). This would result in a dividend payout of €139 million in total.

22 Share-based compensation programs

Management incentive plans

In 2003, ThyssenKrupp implemented a performance based mid-term incentive plan which issues stock rights to eligible participants. All Executive Board members of ThyssenKrupp AG are eligible to participate. Starting with the second installment which was issued in 2004, the group of beneficiaries was expanded to include the segment lead companies as well as several other selected executive employees. As of September 30, 2009, 293,992 stock rights were issued in the 5th installment, 229,562 stock rights in the 6th installment and 435,544 stock rights in the 7th installment.

The number of stock rights issued will be adjusted at the end of each performance period based on the average economic value added (EVA) over the three-year performance period, beginning October 01 of the year the stock rights were granted, compared to the average EVA over the previous three fiscal year period. At the end of the performance period the stock rights will be settled in cash based on the average price of ThyssenKrupp stock during the three month period immediately following the performance period.

To determine the fair value of the stock rights used to calculate the pro-rata liability as of the balance sheet date forward prices of the ThyssenKrupp stock are calculated taking into account partial caps starting in the 3rd installment. The forward calculation is carried out for predefined periods (averaging periods) taking into account the ThyssenKrupp stock price and the Euro interest rate curve as of the balance sheet date and the dividends assumed to be paid until the maturity of the stock rights. The following assumptions were used for the determination of the fair values as of September 30, 2008 and as of September 30, 2009:

Year ended Sept. 30, 2008

		4th installment		5th installment		6th installment
Maturity		Dec. 31, 2008		Dec. 31, 2009		Dec. 31, 2010
Averaging period		Oct. 01 to Dec. 31, 2008		Oct. 01 to Dec. 31, 2009		Oct. 01 to Dec. 31, 2010
ThyssenKrupp stock price as of balance sheet date		€21.03		€21.03		€21.03
Assumed dividend payment(s) per stock until maturity		—		€1.30 on Jan. 26, 2009		€1.30 on Jan. 26, 2009 €1.30 on Jan. 25, 2010
Average dividend yield		—		5.80%		6.15%
Average interest rate (averaging period)		4.44%		4.95%		4.67%
Fair value as of Sept. 30, 2008
- without caps		€20.87		€19.65		€18.43
- with caps		€20.87		€19.65		€18.43
Year ended Sept. 30, 2009
		5th installment		6th installment		7th installment
Maturity		Dec. 31, 2009		Dec. 31, 2010		Dec. 31, 2011
Averaging period		Oct. 01 to Dec. 31, 2009		Oct. 01 to Dec. 31, 2010		Oct. 01 to Dec. 31, 2011
ThyssenKrupp stock price as of balance sheet date		€23.53		€23.53		€23.53
Assumed dividend payment(s) per stock until maturity		—		€0.30 on Jan. 22, 2010		€0.30 on Jan. 22, 2010 €0.30 on Jan. 24, 2011
Average dividend yield		—		1.16%		1.21%
Average interest rate (averaging period)		0.53%		1.29%		1.78%
Fair value as of Sept. 30, 2009
- without caps		€23.50		€23.16		€22.85
- with caps		€23.50		€23.16		€22.85

In the 2nd quarter of 2008/2009, the 4th installment of the mid-term incentive plan was settled in cash with €15.82 per stock right resulting in a total payment of €23.5 million. In the 2nd quarter of 2007/2008, the 3rd installment of the mid-term incentive plan was settled in cash with €41.15 per stock right resulting in a total payment of €54.1 million. Due to a downward trend of the TKVA, the Group recorded an income of €19.4 million from the reversal of the obligations of the mid-term incentive plan in 2008/2009 (2007/2008: income of €3.5 million). There was no liability arising from the mid-term incentive plan amounts as of September 30, 2009 (2008: €43 million).

In February 2006, the Group implemented a Share Purchase Program for selected executive employees who are not beneficiaries of the mid-term incentive plan. Under the Program the beneficiaries are entitled to purchase up to a fixed amount ThyssenKrupp shares at a discount. In the 2nd quarter ended March 31, 2008, the Group's Share Purchase Program for fiscal year 2006/2007 was settled with the purchase of 229,664 shares at a discount. This resulted in compensation expense of €4.1 million in 2007/2008, having already recognized compensation expense of €8.1 million in 2006/2007. At the same time, in March 2008 it was decided to renew the Program for fiscal year 2007/2008. Under the Program, again selected executive employees are entitled to purchase up to a fixed amount ThyssenKrupp shares at a discount. The realization of the new Program was postponed to fiscal year 2009/2010. The Group recorded compensation expense from the new Program of €3.0 million in 2008/2009 and of €9.4 million in 2007/2008; thereof €1.6 million (2008: €5.1 million) were recognized in equity and the remaining amount of €1.4 million (2008: €4.3 million) as an obligation. In total, in 2008/2009 the Group recorded compensation expense for the Share Purchase Program in the amount of €3.0 million (2007/2008: €13.5 million).

Employee share purchase program

In the 3rd quarter of 2007/2008, the Group primarily offered eligible members of its domestic and French workforce the right to purchase up to €270 in ThyssenKrupp shares at a 50% discount as part of an employee share purchase program. The program resulted in the Group recording compensation expense of €6.3 million. In 2008/2009 these programs had not been offered.

23 Accrued pension and similar obligations

million €

		Sept. 30, 2008		Sept. 30, 2009
Accrued pension liability		5,227		6,068
Accrued postretirement obligations other than pensions		1,029		1,076
Other accrued pension-related obligations		294		393
Total		6,550		7,537

Accrued pension and similar obligations in the amount of €6,928 million (2008: €5,970 million) have a remaining term of more than 1 year.

Pension plans

The Group maintains defined benefit pension plans and defined contribution plans that cover the majority of the employees in Germany, the USA, Canada and Great Britain. In some other countries, eligible employees receive benefits in accordance with the respective local requirements.

In Germany, benefits generally take the form of pension payments that are indexed to inflation. Benefits for some senior staff are based on years of service and salary during a reference period, which is generally three years prior to retirement. Other employees receive benefits based on years of service. In addition, ThyssenKrupp offers certain German employees the opportunity to participate in a defined benefit program which allows for the deferral of compensation which earns interest at a rate of 6.00% per year.

In the USA and Canada, hourly paid employees receive benefits based on years of service. Salaried employee benefits are typically based on years of service and salary history. In Great Britain, employee benefits are based on years of service and an employee's final salary before retirement.

Defined benefit obligations and funded status

The reconciliation of the changes in the defined benefit obligations and the fair value of plan assets are as follows:

million €

		Sept. 30, 2008				Sept. 30, 2009
		Germany		Outside Germany		Germany		Outside Germany
Change in defined benefit obligations (DBO):
DBO at beginning of fiscal year		5,773		2,158		5,013		1,925
Service cost		79		29		60		25
Interest cost		292		115		324		120
Participant contributions		0		8		0		9
Past service cost		5		3		22		0
Actuarial (gains)/losses		(691)		(113)		706		232
Acquisitions/(divestitures)		(26)		(7)		0		0
Curtailments and settlements		0		(36)		0		(43)
Termination benefits		0		0		8		8
Currency differences		0		(87)		0		(90)
Benefit payments		(421)		(144)		(421)		(157)
Others		2		(1)		0		13
DBO at end of fiscal year		5,013		1,925		5,712		2,042
Change in plan assets:
Fair value of plan assets at beginning of fiscal year		167		1,910		180		1,544
Expected return on plan assets		12		126		11		102
Actuarial gains/(losses)		(26)		(313)		(2)		(21)
Acquisitions/(divestitures)		(1)		(2)		0		0
Employer contributions		37		79		0		115
Participant contributions		0		8		0		9
Settlements		0		(47)		0		(34)
Currency differences		0		(89)		0		(73)
Benefit payments		(9)		(128)		(10)		(142)
Others		0		0		0		13
Fair value of plan assets at end of fiscal year		180		1,544		179		1,513

As of the balance sheet date, defined benefit obligations related to plans that are wholly unfunded amount to €5,523 million (2008: €4,907 million) and defined benefit obligations that relate to plans that are wholly or partly funded amount to €2,231 million (2008: €2,031 million).

Actual return which amounts to €90 million (2008: €(201) million) is calculated as the total of expected return on plan assets and actuarial gains and losses, respectively.

The following represents the funded status of these plans:

million €

		Sept. 30, 2008				Sept. 30, 2009
		Germany		Outside Germany		Germany		Outside Germany
Funded status at end of fiscal year		(4,833)		(381)		(5,533)		(529)
Not recognized as an asset due to asset ceiling		0		(3)		0		(1)
Net amount recognized		(4,833)		(384)		(5,533)		(530)
Amounts recognized in the consolidated balance sheets consist of:
Other non-financial assets		0		10		0		5
Accrued pension liability		(4,833)		(394)		(5,533)		(535)
Net amount recognized		(4,833)		(384)		(5,533)		(530)

Net periodic pension cost

The net periodic pension cost for the defined benefit plans were as follows:

million €

		Year ended Sept. 30, 2008				Year ended Sept. 30, 2009
		Germany		Outside Germany		Germany		Outside Germany
Service cost		79		29		60		25
Interest cost		292		115		324		120
Expected return on plan assets		(12)		(126)		(11)		(102)
Past service cost		5		3		22		0
Settlement and curtailment loss/(gain)		0		14		0		(7)
Termination benefit expense		0		0		8		8
Net periodic pension cost		364		35		403		44

The interest cost and the expected return on plan assets components of net periodic pension cost are included in the line item "Interest expense" and "Interest income", respectively in the Group's consolidated statement of income.

Assumptions

The assumptions for discount rates and the rates of compensation increase on which the calculation of the obligations are based were derived in accordance with standard principles and established for each country as a function of their respective economic conditions. Discount rates are generally determined based on market yields of high quality corporate bonds in the respective countries with terms corresponding to the estimated terms of the post-employment benefit obligations. The expected return on plan assets is determined based on detailed studies conducted by the plans' third party investment and actuarial advisors. The studies take into consideration the long-term historical returns and the future estimates of long-term investment returns based on the target asset allocation.

The Group applied the following weighted average assumptions to determine benefit obligations:

in %

		Sept. 30, 2008				Sept. 30, 2009
		Germany		Outside Germany		Germany		Outside Germany
Weighted-average assumptions:
Discount rate		6.75		6.44		5.25		5.24
Expected return on plan assets		6.00		7.10		6.00		7.00
Rate of compensation increase		2.50		2.43		2.50		1.91

Plan assets

In the Group, the majority of reported plan assets associated with the funded pension plans are located in the USA, Canada, Great Britain and to a lesser extent in Germany and some other European countries. The Group invests in diversified portfolios consisting of an array of asset classes that attempt to maximize returns while minimizing volatility. The asset classes include national and international stocks, fixed income government and non-government securities and real estate. Plan assets do not include any direct investments in ThyssenKrupp debt securities, equity securities or real estate.

The Group uses professional investment managers to invest plan assets based on specific investment guidelines developed by the plans' Investment Committees. The Investment Committees consist of senior financial management especially from treasury and other appropriate executives. The Investment Committees meet regularly to approve the target asset allocations, and review the risks and performance of the major pension funds and approve the selection and retention of external managers.

The Group's target portfolio structure has been developed based on asset-liability studies that were performed for the major pension funds within the Group.

The pension plan asset allocation and target allocation are as follows:

		Plan assets as of				Target allocation
		Sept. 30, 2008		Sept. 30, 2009		Sept. 30, 2010
Equity securities		44%		39%		40-55%
Debt securities		48%		54%		45-60%
Real estate/other		8%		7%		0-10%
Total		100%		100%

Pension plan funding

In general, the Group's funding policy is to contribute amounts to the plans sufficient to meet the minimum statutory funding requirements relevant in the country in which the plan is located. In the USA and Canada, certain plans require minimum funding based on collective bargaining agreements. The Group may from time to time make additional contributions at its own discretion. ThyssenKrupp's expected contribution in fiscal year 2009/2010 is €103 million related to its funded plans, all of which is expected to be as cash contributions.

Pension benefit payments

In fiscal year 2008/2009, pension benefit payments to the Group's German and Non-German plans were €421 million (2007/2008: €421 million) and €157 million (2007/2008: €144 million) respectively. The estimated future pension benefits to be paid by the Group's defined benefit pension plans are as follows:

million €

		Germany		Outside Germany
(for fiscal year)
2009/2010		437		128
2010/2011		433		122
2011/2012		434		123
2012/2013		430		126
2013/2014		426		130
2014/2015 - 2018/2019		2,064		654
Total		4,224		1,283

Amounts recognized for the current and the previous periods for defined benefit pension plans are as follows:

million €

		Sept. 30, 2005		Sept. 30, 2006		Sept. 30, 2007		Sept. 30, 2008		Sept. 30, 2009
Present value of defined benefit obligation		9,209		8,655		7,931		6,938		7,754
Fair value of plan assets		1,937		2,067		2,077		1,724		1,692
Surplus/(deficit) in the plans		(7,272)		(6,588)		(5,854)		(5,214)		(6,062)
Experience adjustments on plan liabilities		(43)		(52)		(89)		(47)		25
Experience adjustments on plan assets		112		13		44		(345)		(23)

Defined Contribution Plans

The Group also maintains domestic and foreign defined contribution plans. Amounts contributed by the Group under such plans are based upon percentage of the employees' salary or the amount of contributions made by the employees. The total cost of pension plans accounted for as defined contribution plans in the current fiscal year was €140 million (2007/2008: €140 million). Thereof, €84 million (2007/2008: €86 million) were related to multi-employer plans. In addition, contributions paid to public/state pension insurance institutions amounted to €345 million (2007/2008: €363 million).

Postretirement obligations other than pensions

The Group provides certain postretirement health care and life insurance benefits to retired employees in the USA and Canada who meet certain minimum requirements regarding age and length of service. The plans primarily relate to the retained assets and liabilities of ThyssenKrupp Budd.

In December 2003, the US government signed into law the Medicare Prescription Drug, Improvement and Modernization Act. This law provides for a federal subsidy to sponsors of retiree health care benefit plans that provide benefit that is at least actuarially equivalent to the benefit established by the law. The Group accounts for these federal subsidies as reimbursement rights in accordance with IAS 19.

The changes in accumulated postretirement benefit obligations and reimbursement rights are as follows:

million €

		Sept. 30, 2008 USA, Canada		Sept. 30, 2009 USA, Canada
Change in accumulated postretirement benefit obligation:
Accumulated postretirement benefit obligation at beginning of fiscal year		893		1,013
Service cost		10		8
Interest cost		52		66
Past service cost		8		(53)
Actuarial (gains)/losses		103		109
Curtailments and settlements		0		(24)
Currency differences		(10)		(33)
Benefit payments		(43)		(46)
Accumulated postretirement benefit obligation at end of fiscal year		1,013		1,040
Change in reimbursement rights relating to postretirement benefits:
Fair value of reimbursement rights at beginning of fiscal year		67		83
Expected return on reimbursement rights		4		(4)
Actuarial gains/(losses)		14		1
Employer contributions		3		3
Currency differences		0		(1)
Benefit payments		(6)		(6)
Others		1		0
Fair value of reimbursement rights at end of fiscal year		83		76

The following represents the funded status of these plans:

million €

		Sept. 30, 2008 USA, Canada		Sept. 30, 2009 USA, Canada
Funded status at end of fiscal year		(1,013)		(1,040)
Unrecognized past service cost		(16)		(36)
Net amount recognized for postretirement obligations other than pensions		(1,029)		(1,076)

Assumptions

The determination of the accumulated postretirement benefit obligations is based on the following weighted average assumptions:

in %

		Sept. 30, 2008 USA, Canada		Sept. 30, 2009 USA, Canada
Weighted-average assumptions:
Discount rate		6.97		5.50
Health care cost trend rate for the following year		9.73		9.80
Ultimate health care cost trend rate (expected in 2032)		5.00		5.00

Net periodic postretirement benefit cost

The net periodic postretirement benefit cost for health care obligations is as follows:

million €

		Year ended Sept. 30, 2008 USA, Canada		Year ended Sept. 30, 2009 USA, Canada
Service cost		10		8
Interest cost		52		66
Expected return on reimbursement rights		(4)		4
Past service cost		3		(31)
Settlement and curtailment loss/(gain)		0		(24)
Net periodic postretirement benefit cost		61		23

The interest cost component of net periodic postretirement benefit cost is included in the line item "Interest expense" in the Group's consolidated statement of income.

The effects of a one-percentage-point increase or decrease in the assumed health care cost trend rates are as follows:

million €

		one-percentage-point
		Increase		Decrease
Effect on service and interest cost components		9		(7)
Effect on postretirement benefit obligation		124		(104)

Amounts recognized for the current and the previous period for postretirement obligations other than pensions are as follows:

million €

		Sept. 30, 2005		Sept. 30, 2006		Sept. 30, 2007		Sept. 30, 2008		Sept. 30, 2009
Present value of defined benefit obligation		1,290		1,122		893		1,013		1,040
Fair value of reimbursement rights		79		90		67		83		76
Surplus/(deficit)		(1,290)		(1,122)		(893)		(1,013)		(1,040)
Experience adjustments on plan liabilities		(19)		(33)		13		(41)		(1)
Experience adjustments on reimbursement rights		1		31		0		0		1

Other pension related obligations

Some German companies have obligations resulting from partial retirement agreements. Under these agreements, employees work additional time prior to retirement, which is subsequently paid for in installments after retirement. For these obligations, accruals in the amount of €283 million (2008: €242 million) were recognized in accordance with IAS 19 "Employee Benefits".

24 Other provisions

Table: Other provisions

As of September 30, 2009, €2,075 million (2008: €1,746 million) of the total of other provisions are current, while €821 million (2008: €641 million) are non-current. Provisions of €746 million (2008: €548 million) have a remaining term of more than 1 year.

Product warranties and product defects represent the Group's responsibility for the proper functioning of the goods sold (product warranty) as well as the obligation that arise from the use of the products sold (product defect).

Provisions for other contractual costs represent pending losses from uncompleted contracts.

Provisions for employee compensation and benefit costs primarily represent employment anniversary bonuses and obligations for the management incentive plans, while social plan and related costs pertaining to personnel related structural measures are reflected in the provision for restructuring activities. Pension related obligations for partial retirement agreements and early retirement programs, partly resulting from restructurings, are part of the provision for pensions and similar obligations.

The provision for restructurings consists of provisions for employee termination benefits and exit costs which have been established by operating divisions for costs incurred in connection with activities which do not generate any future economic benefits for the Group. Restructurings are being carried out in all segments. The balance as of September 30, 2009, consists of €282 million within the Steel segment, €280 million within the Technologies segment and €80 million within the Services segment. As of 2008/2009, the corresponding expenses are included in the categories cost of sales, selling expenses as well as general and administrative expenses; prior year figures have been adjusted accordingly.

The provision for decommissioning obligations mainly consists of obligations associated with mining activities and recultivating landfills. Obligations associated with mining activities and recultivating landfills are generally handled over long periods of time, in some cases more than 30 years. The technical parameters are very complex. As a result, uncertainty exists with regard to the timing and concrete amount of the expenses.

Provisions for environmental obligations refer primarily to rehabilitating contaminated sites, redevelopment and water protection measures.

25 Financial debt

Carrying amounts in million €

		Sept. 30, 2008		Sept. 30, 2009
Bonds		1,497		4,483
Notes payable		479		479
Liabilities to financial institutions		968		2,003
Finance lease liabilities		98		70
Other loans		26		125
Non-current financial debt		3,068		7,160
Bonds		500		0
Notes payable		50		0
Liabilities to financial institutions		711		381
Liabilities due to sales of receivables not derecognized from the balance sheet		3		0
Acceptance payables		31		19
Finance lease liabilities		27		34
Other loans		26		10
Current financial debt		1,348		444
Financial debt		4,416		7,604

Current financial debt includes financial debt with a remaining term up to one year, while the non-current financial debt has a remaining term of more than one year.

Financial debt in the amount of €129 million (2008: €174 million) is collateralized by real estate.

As of September 30, 2009, the financial debt reflects a total discount in the amount of €30 million (2008: €4 million), which is offset by a total premium in the amount of €12 million (2008: 0). Amortization of discounts and premiums of financial debt is included in "financial income/(expense), net".

Bonds, Notes payable

		Carrying amount in million € Sept. 30, 2008		Carrying amount in million € Sept. 30, 2009		Notional amount in million € Sept. 30, 2009		Interest rate in %		Fair value in million € Sept. 30, 2009		Maturity Date
ThyssenKrupp Finance Nederland B.V. bond (€500 million) 2002/2009		500		—		—		7.000		—		03/19/2009
ThyssenKrupp Finance Nederland B.V. bond (€1,000 million) 2009/2013		—		1,009		1,000		6.750		1,062		02/25/2013
ThyssenKrupp Finance Nederland B.V. bond (€1,000 million) 2009/2016		—		988		1,000		8.500		1,099		02/25/2016
ThyssenKrupp AG bond (€750 million) 2004/2011		748		749		750		5.000		776		03/29/2011
ThyssenKrupp AG bond (€1,000 million) 2009/2014		—		988		1,000		8.000		1,095		06/18/2014
ThyssenKrupp AG bond (€750 million) 2005/2015		749		749		750		4.375		735		03/18/2015
ThyssenKrupp AG note loan (€50 million) 2004/2009		50		—		—		4.500		—		01/19/2009
ThyssenKrupp AG note loan (€100 million) 2008/2013		100		100		100		5.150		103		04/15/2013
ThyssenKrupp AG note loan (€150 million) 2008/2013		149		149		150		5.300		155		04/25/2013
ThyssenKrupp AG note loan (€150 million) 2008/2014		150		150		150		5.375		152		05/21/2014
ThyssenKrupp AG note loan (€80 million) 2008/2016		80		80		80		5.710		77		09/15/2016
Total		2,526		4,962		4,980				5,254

In 2008/2009 ThyssenKrupp issued bonds in the total volume of €3 billion. In February 2009, ThyssenKrupp Finance Nederland B.V. issued a €1.5 billion "dual tranche"-bond. The bond was issued in two tranches with a 4 year (€500 million) and a 7 year (€1,000 million) maturity. In April 2009, the 4 year maturity tranche was increased by €500 million. In June 2009, ThyssenKrupp AG issued another bond in the volume of €1 billion with a 5 year maturity.

ThyssenKrupp AG has assumed the unconditional and irrevocable guarantee for the payments pursuant to the terms and conditions of the bond of ThyssenKrupp Finance Nederland B.V.

As of September 30, 2009, the financing structure of liabilities to financial institutions and other loans comprise the following:

Liabilities to financial institutions, Other loans

		Carrying amount in million € Sept. 30, 2008		Carrying amount in million € Sept. 30, 2009		Amount thereof in Euro		Weighted average interest rate % Sept. 30, 2009		Amount thereof in USD		Weighted average interest rate % Sept. 30, 2009		Amount thereof in other currencies		Fair value in million € Sept. 30, 2009
Bilateral credits (at variable interest rates)		—		510		305		1.16		205		0.78		—		510
Other credits at variable interest rates		1,221		1,099		83		1.77		93		2.45		923		1,099
Credits at fixed interest rates		510		910		890		5.52		6		—		14		952
Total		1,731		2,519		1,278		4.24		304		1.28		937		2,561

As of September 30, 2009, ThyssenKrupp has available a €2.5 billion syndicated joint credit multi-currency-facility agreement. The agreement was fixed in July 2005 and has a term until July 01, 2014. The facility agreement was not utilized as of the balance sheet date.

Another component of financial debt are revolving credit agreements with banking institutions whereby ThyssenKrupp AG, ThyssenKrupp Finance USA, Inc. or ThyssenKrupp Finance Nederland B.V. can borrow in Euros, U.S. dollars or in British pounds Sterling up to €2.3 billion. Of these facilities, 50% have a remaining term of more than 5 years and 50% a remaining term of up to 5 years. As of September 30, 2009, cash loans of €0.5 billion were outstanding.

In total the Group has available unused, committed credit lines amounting to €4.2 billion.

The Group's Commercial Paper Program also provides up to €1.5 billion in additional financing. As of September 30, 2009, the program was not used.

As of the balance sheet date the future minimum lease payments reconcile to their present value (= finance lease liability) as follows:

million €

		Sept. 30, 2008						Sept. 30, 2009
		Future minimum lease payments		Interest		Present value (finance lease liabilities)		Future minimum lease payments		Interest		Present value (finance lease liabilities)
Not later than one year		35		8		27		40		6		34
Between one and five years		92		16		76		64		11		53
Later than five years		29		7		22		22		5		17
Total		156		31		125		126		22		104

Maturity of financial debt is as follows:

million €

		Total financial debt		thereof: Liabilities to financial institutions
(for fiscal year)
2009/2010		444		381
2010/2011		963		80
2011/2012		377		359
2012/2013		1,738		472
2013/2014		1,567		413
thereafter		2,515		679
Total		7,604		2,384

26 Trade accounts payable

Trade accounts payable in the amount of €41 million (2008: €40 million) have a remaining term of more than 1 year.

27 Other financial liabilities

million €

		Sept. 30, 2008				Sept. 30, 2009
		current		non-current		current		non-current
Financial liabilities measured at amortized cost		999		321		1,390		4
Derivatives that do not qualify for hedge accounting		369		—		138		—
Derivatives that qualify for hedge accounting		176		—		58		—
Total		1,544		321		1,586		4

Other financial liabilities amounting to €8 million (2008: €328 million) have a remaining term of more than 1 year.

28 Other non-financial liabilitiess

million €

		Sept. 30, 2008				Sept. 30, 2009
		current		non-current		current		non-current
Amounts due to customers for construction work		3,445		—		2,883		—
Advance payments		1,084		—		957		—
Selling and buying market related liabilities		642		—		725		—
Liabilities due to put options		180		19		22		0
Liabilities to the employees		965		—		738		—
Liabilities for social security		122		—		100		—
Deferred income		187		—		117		—
Tax liabilities (without income taxes)		370		—		349		—
Other		506		1		791		46
Total		7,501		20		6,682		46

Other non-financial liabilities amounting to €506 million (2008: €883 million) have a remaining term of more than 1 year.

Amounts due to customers for construction work are calculated as follows:

million €

		Sept. 30, 2008		Sept. 30, 2009
Contract costs incurred and recognized contract profits (less recognized losses)		5,382		5,881
Less advance payments received		(8,827)		(8,764)
Total		(3,445)		(2,883)

29 Contingencies and commitments

Contingencies

ThyssenKrupp AG and its segment lead companies as well as – in individual cases – its subsidiaries have issued or have had guarantees issued in favour of customers or lenders. The following table shows obligations under guarantees where the principal debtor is not a consolidated Group company.

million €

		Maximum potential amount of future payments as of				Provision as of
		Sept. 30, 2008		Sept. 30, 2009		Sept. 30, 2008		Sept. 30, 2009
Advance payment bonds		145		231		1		1
Performance bonds		67		80		1		0
Third party credit guarantee		42		39		0		0
Residual value guarantees		45		45		1		1
Other guarantees		79		48		1		2
Total		378		443		4		4

Guarantees include no (2008: €0 million) contingent liabilities of associates and €248 million (2008: €189 million) of contingent liabilities of joint ventures.

The terms of these guarantees depend on the type of guarantee and may range from three months to ten years (e.g. rental payment guarantees).

The basis for possible payments under the guarantees is always the non-performance of the principal debtor under a contractual agreement, e.g. late delivery, delivery of non-conforming goods under a contract, non-performance with respect to the warranted quality or default under a loan agreement.

All guarantees are issued by or issued by instruction of ThyssenKrupp AG or the segment lead companies upon request of principal debtor obligated by the underlying contractual relationship and are subject to recourse provisions in case of default. Is such principal debtor a company owned fully or partially by a foreign third party, such third party is generally requested to provide additional collateral in a corresponding amount.

ThyssenKrupp bears joint and several liability as a member of certain civil law partnerships, ordinary partnerships and consortiums.

Former stockholders of Thyssen and of Krupp have petitioned per Art. 305 UmwG (Reorganization Act) for a judicial review of the share exchange ratios used in the merger of Thyssen AG and Fried. Krupp AG Hoesch-Krupp to form ThyssenKrupp AG. The proceedings are pending with the Düsseldorf Regional Court. Should a ruling be made in favour of the petitioners, the Court would require settlement to be made via an additional cash payment plus interest. The additional payment also would be required to be made to all affected stockholders, even if they were not petitioners in the judicial proceedings. However, the Group expects no such payments to become due as the exchange ratios were duly determined, negotiated between unrelated parties and audited and confirmed by the auditor that has been appointed by court.

As a result of the integration of Thyssen Industrie AG into Thyssen AG, the Group is defendant to court proceedings from minority stockholders of Thyssen Industrie AG to examine the appropriateness of the merger consideration received. If the court rules that the consideration offered was inappropriate, the increased consideration will be granted to all outside stockholders by an additional cash payment.

The Group is involved in pending and threatened litigation in connection with the purchase and sale of certain companies, which may lead to partial repayment of purchase price or to the payment of damages. In addition, damage claims may be payable to customers, consortium partners and subcontractors under performance contracts. Certain of these claims have proven unfounded or have expired under the statute of limitations. Some of these lawsuits are still pending.

Commitments and other contingencies

The Group is the lessee to property, plant and equipment classified as operating leases. Rental expense amounting to €274 million (2007/2008: €272 million) resulting from rental contracts, long-term leases and leasing contracts classified as operating leases was incurred in fiscal 2008/2009. It comprises as follows:

million €

		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Minimum rental payments		272		276
Contingent rental payments		0		0
less income from sublease agreements		0		(2)
Total		272		274

The future minimum rental payments, excluding accrued interest from such non-cancellable contracts that have an initial or remaining term of more than one year as of the balance sheet date are (at face amounts):

million €

		Sept. 30, 2008		Sept. 30, 2009
Not later than one year		258		236
Between one and five years		565		552
Later than five years		453		382
Total		1,276		1,170

The future minimum rental income from non-cancelable sublease contracts amounting to €5 million (2007/2008: €4 million) is not included in the total of future minimum rental payments.

The commitment to enter into investment projects amounts to €3,028 million (2008: €5,090 million) and relates mainly to the Steel segment.

Payment commitments and obligations to make further contributions to corporations and cooperative associations exist in the total amount of €3 million (2008: €3 million). In addition, other financial commitments exist in the amount of €2,957 million (2008: €3,539 million), primarily from the commitments to purchase coking coal, coal and lime under long term supply contracts and obligations under ship-charter contracts in the Steel segment as well as purchasing commitments resulting from the Group's electricity and gas supply contracts. In addition, in the Steel segment long term iron ore and iron ore pellets supply contracts exist which will result in purchasing commitments over a period of up to 14 years. Due to the high volatility of iron ore prices, the measurement of the complete purchasing commitments is based on the iron ore price as of the current balance sheet date resulting in purchasing commitments of €11,485 million in total.

Under property and business interruption insurance policies, substantial deductibles exist for some production units of the Steel and Stainless segments. One or more damages at these units could significantly impact the Group's net assets, financial position and results of operations.

In its decision of July 02, 2008, the EU Commission classified various investment subsidies and undertakings granted to Hellenic Shipyards S.A. (HSY) as state aid which is not compatible with the Single Market. The aid was partly granted between 1997 and 2002 in connection with the privatization of the formerly nationalized shipyards. A clause in the purchase contract for the acquisition of HSY in 2002 exempting the purchaser Howaldtswerke-Deutsche Werft GmbH from any claims for repayment of the aid is also considered incompatible with state aid rules by the Commission. The EU Commission has requested Greece to recover the aid from HSY; in the Commission's opinion, the amount involved is approximately €236 million (plus interest). An appeal against the Commission's findings was lodged with the European Court of First Instance (Luxembourg). An action has already been filed with the competent court in Athens against the seller of HSY for exemption from contingent recovery claims of the Greek government. The recovery obligation of the Greek government only refers to the non-naval business of HSY, and not to the naval one. Discussions to achieve an agreement with all parties involved were not finalized in 2008/2009. Should this matter in total not be resolved favourably, a material impact on the consolidated financial statements of ThyssenKrupp cannot be ruled out currently.

30 Financial instruments

The following table shows financial assets and liabilities by measurement categories and classes. Finance lease receivables and liabilities, and derivatives that qualify for hedge accounting are also included although they are not part of any IAS 39 measurement category.

Table: Financial instruments

The carrying amounts of trade accounts receivable, other current receivables as well as cash and cash equivalents equal their fair values. The fair value of fixed rate loans equals the present value of expected cash flows which are discounted on the basis of interest rates prevailing on the balance sheet date.

Available-for-sale financial assets primarily include equity and debt instruments. They are in general measured at fair value, which is based to the extent available on market prices as of the balance sheet date. When no quoted market prices in an active market are available and the fair value cannot be reliably measured, availablefor- sale financial assets are measured at cost.

The fair value of foreign currency forward transactions is determined on the basis of the middle spot exchange rate applicable as of the balance sheet date, and taking account of forward premiums or discounts arising for the respective remaining contract term compared to the contracted forward exchange rate. Common methods for calculating option prices are used for foreign currency options. The fair value of an option is influenced not only by the remaining term of an option, but also by other factors, such as current amount and volatility of the underlying exchange or base rate.

Interest rate swaps and cross currency swaps are measured at fair value by discounting expected cash flows on the basis of market interest rates applicable for the remaining contract term. In the case of cross currency swaps, the exchange rates for each foreign currency, in which cash flows occur, are also included.

The fair value of commodity futures is based on published price quotations. It is measured as of the balance sheet date, both internally and by external financial partners.

The carrying amounts of trade accounts receivable and other current liabilities equal their fair values. The fair value of fixed rate liabilities equals the present value of expected cash flows. Discounting is based on interest rates applicable as of the balance sheet date. The carrying amounts of floating rate liabilities equal their fair values.

The following table shows net gains and losses from financial instruments by measurement categories. Gains or losses arising from finance lease and from derivatives that qualify for hedge accounting are not included, as they are not part of any IAS 39 measurement category.

million €

		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Loans and receivables		136		(145)
Available-for-sale financial assets		140		112
Derivatives that do not qualify for hedge accounting (Financial assets held for trading)		107		151
Financial liabilities measured at amortized cost		(291)		(120)

Net losses under "loans and receivables" mainly comprises interest on financial receivables, impairment allowances on trade accounts receivable and gains and losses on foreign currency receivables.

The category "available-for-sale financial assets" mainly includes current earnings from equity and debt instruments as well as gains or losses on their disposal.

Gains and losses arising from changes in fair value of foreign currency, interest rate and commodity derivatives that do not comply with the hedge accounting requirements under IAS 39 are included in the "derivatives that do not qualify for hedge accounting" category.

The category "financial liabilities measured at amortized cost" includes interest expenses on financial liabilities as well as gains and losses on foreign currency liabilities.

Derivative financial instruments

The Group uses various derivative financial instruments, including foreign currency forward contracts, foreign currency options, interest rate swaps, cross currency swaps and commodity forward contracts. Derivative financial instruments are generally used to hedge existing or anticipated underlying transactions so as to reduce foreign currency, interest rate and commodity price risks.

The following table shows the notional amounts and fair values of derivatives used within the Group:

million €

		Notional amount Sept. 30, 2008		Carrying amount Sept. 30, 2008		Notional amount Sept. 30, 2009		Carrying amount Sept. 30, 2009
Assets
Foreign currency derivatives that do not qualify for hedge accounting		4,041		150		4,024		163
Foreign currency derivatives qualifying as cash flow hedges		1,466		55		292		32
Embedded derivatives		189		8		377		19
Interest rate derivatives that do not qualify for hedge accounting*		71		21		36		8
Interest rate derivatives qualifying as cash flow hedges*		0		0		750		29
Commodity derivatives that do not qualify for hedge accounting		1,113		269		669		55
Commodity derivatives qualifying as cash flow hedges		116		17		129		53
Commodity derivatives qualifying as fair value hedges		44		6		41		0
Total		7,040		526		6,318		359
Liabilities
Foreign currency derivatives that do not qualify for hedge accounting		3,534		179		2,349		91
Foreign currency derivatives qualifying as cash flow hedges		2,415		137		1,562		56
Embedded derivatives		855		52		201		8
Interest rate derivatives that do not qualify for hedge accounting*		750		21		0		0
Interest rate derivatives qualifying as cash flow hedges*		148		4		1		0
Commodity derivatives that do not qualify for hedge accounting		670		117		310		39
Commodity derivatives qualifying as cash flow hedges		143		34		23		2
Commodity derivatives qualifying as fair value hedges		10		1		41		0
Total		8,525		545		4,487		196

Derivatives that qualify for hedge accounting

Hedge accounting in accordance with IAS 39 is used to hedge foreign currency risks of firm commitments, future receivables and liabilities denominated in foreign currency, commodity price risks arising from sales and purchase transactions, and interest rate risks from noncurrent financings.

Cash-Flow-Hedges

Cash flow hedges are mainly used to hedge future cash flows against foreign currency and commodity price risks arising from future sales and purchase transactions as well as interest rate risks from noncurrent liabilities. These derivatives are measured at fair value, divided into an effective and ineffective portion. Until realization of the hedged underlying transaction, the effective portion of fluctuations in fair value of these derivatives is recognized directly in equity in the cumulative income and expense position, while the ineffective portion is recognized in profit or loss. The cumulative gain or loss recognized in equity is reclassified to profit or loss in the same period during which the future underlying transactions (hedged items) affect profit or loss. As of 30 September 2009, hedging instruments with positive fair value totaled €114 million (2008: €72 million) and those with negative fair value totaled €58 million (2008: €175 million). For the 2008/2009 financial year, €33 million (2007/2008: €(189) million) (before tax) in unrealized gains or losses have been recognized directly in equity in the cumulative income and expense position. Cash flows from future transactions are currently hedged for a maximum of 60 months.

During the current fiscal year, €9 million (2008: €21 million) in cumulative gain or loss recognized directly in equity were reclassified to profit or loss as a result of the underlying transactions being realized during the year; of this amount €9 million (2007/2008: €21 million) are attributable to sales and €0 million (2007/2008: 0) to other financial income/(expense), net. In addition, €40 million in cumulative gain or loss recognized directly in equity were reclassified to decrease cost of inventories (2008: €191 million to increase cost of inventories), as the hedged commodities were recognized, although the underlying transaction had not yet been taken to profit or loss. This resulted in decreased expenses of €48 million in 2008/2009; an expense of €8 million of that reclassified amount is expected to impact earnings in the subsequent fiscal year. Furthermore, €147 million (2008: €0 million) in cumulative gain or loss recognized directly in equity were reclassified to cost of property, plant and equipment. €2 million of that reclassified amount is expected to impact earnings in 2010/2011, €7 million in 2011/2012 and €131 million in subsequent fiscal years.

As of September 30, 2009, net income from the ineffective portions of derivatives classified as cash flow hedges totaled €41 million (2007/2008: €(3) million).

The cancellation of cash flow hedges during the current fiscal year resulted in earnings of €84 million (2007/2008: €1 million) due to reclassification from cumulative gain or loss recognized directly in equity to profit or loss. These fluctuations in fair value of derivatives originally recognized in equity were reclassified to profit or loss when the hedged underlying transaction was no longer probable to occur. This was mainly the result of decreased purchases of commodities due to the economic crisis.

In the subsequent fiscal year fluctuations in fair value of derivatives included under cumulative change in equity as of the reporting date is expected to impact earnings by expenses of €19 million. During the 2010/2011 fiscal year, earnings are expected to be impacted by income of €17 million, during the 2011/2012 fiscal year by income of €8 million and during the following fiscal years by income of €27 million.

Fair-Value-Hedges

Fair value hedges are mainly used to hedge the exposure to changes in fair value of a firm commitment and exposure to inventory price risks. These commodity derivatives as well as their corresponding underlying transactions are measured at fair value. As of September 30, 2009, hedging instruments with positive fair value totalled €191 thousand (2008: €6 million) and those with negative fair value totalled €317 thousand (2008: €1 million). Fluctuations in fair value are recognized immediately in profit or loss under sales or cost of sales, depending on the type of underlying transaction. During the fiscal year, income/(expense), net from the measurement of fair value hedging instruments totaled €(1) million (2007/2008: €(3) million), while income/(expense), net from the corresponding underlying transactions during the same period amounted to €1 million (2007/2008: €3 million).

Derivates that do not qualify for hedge accounting

If a hedging relationship does not meet the requirements for hedge accounting in accordance with the conditions under IAS 39, the derivative financial instrument is recognized as a derivative that does not qualify for hedge accounting. The resulting impact on profit or loss is shown in the table on net gains and losses from financial instruments by measurement categories. This item also includes embedded derivatives. They exist in the ThyssenKrupp Group in the way that regular supply and service transactions with suppliers and customers abroad are not concluded in the functional currency (local currency) of either contracting parties.

Financial risks

The management of ThyssenKrupp AG has implemented a risk management system that is monitored by the Supervisory Board. The general conditions for compliance with the requirements for proper and future-oriented risk management within the ThyssenKrupp Group are set out in the risk management principles. These principles aim at encouraging all Group members of staff to responsibly deal with risks as well as supporting a sustained process to improve risk awareness. The risk management manual and other Group guidelines specify risk management processes, compulsory limitations, and the application of financial instruments. The risk management system aims at identifying, analyzing, managing, controlling and communicating risks promptly throughout the Group. ThyssenKrupp Group's risk environment is updated at least twice a year by carrying out a risk inventory in all Group companies. The results of the risk inventory process are communicated to both ThyssenKrupp AG's Executive Board and the Supervisory Board's audit committee. Risk management reporting is a continuous process and part of regular Group reporting. Group guidelines and information systems are checked regularly and adapted to current developments. In addition, the internal auditing department regularly checks whether Group companies comply with risk management system requirements.

Being a global Group, ThyssenKrupp is exposed to credit, liquidity and market risks (foreign currency, interest rate and commodity price risks) during the course of ordinary activities. The aim of risk management is to limit the risks arising from operating activities and associated financing requirements by applying selected derivate and non-derivative hedging instruments.

Credit risk (counterparty default risk)

To the Group, financial instruments bear default risk resulting from one party's possible failure to meet its payment obligations, with the maximum default risk being equal to the positive fair value of the respective financial instrument. Against the background of the financial crisis, default risks take on greater significance; we are therefore managing them very carefully. In order to minimize default risk, the ThyssenKrupp Group only enters into financial instruments for financing purposes with contracting parties that have a very good credit standing or are members of a deposit protection fund. For further risk minimizing transactions are concluded in compliance with specified risk limits. In the operative area, receivables and default risks are monitored by Group companies on an ongoing basis and partially covered by merchandise credit insurance. Risks arising from the delivery of goods to major customers are subject to a special credit watch. In addition, letters of credit and indemnity bonds are used to hedge receivables from major customers. However, receivables from these contracting parties do not reach levels that would result in extraordinary risk concentrations. Default risk is taken into account by valuation allowances.

Liquidity risk

Liquidity risk is the risk that the Group is unable to meet its existing or future obligations due to insufficient availability of cash or cash equivalents. Managing liquidity risk, and therefore allocating resources and hedging the Group's financial independence, are some of the central tasks of ThyssenKrupp AG. Against the background of the financial crisis, liquidity risk is an increasing focus of attention. In order to be able to ensure the Group's solvency and financial flexibility at all times, long-term credit limits and cash and cash equivalents are reserved on the basis of perennial financial planning and monthly rolling liquidity planning. Cash pooling and external financing focus primarily on ThyssenKrupp AG and specific financing companies. Funds are provided internally to Group companies according to need. Despite the difficult market environment as a consequence of the financial crisis, our financing is also secured for the next fiscal year. In particular with the issue of bonds with a volume of €3 billion in 2008/2009, the maturity profile was improved and the liquidity situation was further strengthened.

The following table shows future undiscounted cash outflows (positive amounts) and cash inflows (negative amounts) from financial liabilities based on contractual agreements:

million €

		Carrying amount Sept. 30, 2008		Cash flows in 2008/2009		Cash flows in 2009/2010		Cash flows between 2010/2011 and 2012/2013		Cash flows after 2012/2013
Bonds		1,997		605		70		886		816
Liabilities to financial institutions		1,679		796		146		666		559
Finance lease liabilities		125		35		38		54		29
Other financial debt		615		145		29		336		264
Trade accounts payable		5,731		5,690		31		9		1
Derivative financial liabilities that do not qualify for hedge accounting		369		308		32		22		(15)
Derivative financial liabilities that qualify for hedge accounting		176		156		16		0		0
Other financial liabiltities		1,320		994		4		322		0

million €

		Carrying amount Sept. 30, 2009		Cash flows in 2009/2010		Cash flows in 2010/2011		Cash flows between 2011/2012 and 2013/2014		Cash flows after 2013/2014
Bonds		4,483		303		1,053		2,728		1,953
Liabilities to financial institutions		2,384		484		220		1,557		817
Finance lease liabilities		104		40		25		39		22
Other financial debt		633		56		138		478		99
Trade accounts payable		4,185		4,144		15		24		2
Derivative financial liabilities that do not qualify for hedge accounting		138		129		7		1		1
Derivative financial liabilities that qualify for hedge accounting		58		53		5		0		0
Other financial liabiltities		1,394		1,391		2		1		0

Cash flows from derivatives are offset by cash flows from hedged underlying transactions, which have not been considered in the analysis of maturities. If cash flows from the hedged underlying transactions were also considered, the cash flows shown in the table would be accordingly lower.

Market risks

Market risk is the risk that fair values or future cash flows of nonderivative or derivative financial instruments will fluctuate due to changes in risk factors. Among market risks relevant to ThyssenKrupp are foreign currency, interest rate, commodity price, and especially raw material price risks. Associated with these risks are fluctuations in income, equity and cash flow. The objective of risk management is to eliminate or limit emerging risks by taking appropriate precautions, especially by applying derivatives. The application of derivatives is subject to strict controls set up on the basis of guidelines as part of regular reporting. The Group primarily concludes over-the-counter (OTC) forward foreign currency transactions, cross currency derivatives and commodity forward contracts with banks and trading partners. In addition, exchange-traded futures are used to hedge commodity prices.

The following analysis and amounts determined by means of sensitivity analyses represent hypothetical, future-oriented data that can differ from actual outcomes because of unforeseeable developments in financial markets. Moreover, non-financial or non-quantifiable risks, such as business risks, are not considered here.

Foreign currency risk exposures

The international nature of our business activities generates numerous cash flows in different currencies – especially in US dollars. Hedging the resulting currency risk exposures is an essential part of our risk management.

Group-wide regulations form the basis for ThyssenKrupp Group's currency management. Principally, all group companies are obliged to hedge foreign currency positions at the time of inception. Affiliated companies based in the Euro zone are obliged to submit all unhedged positions from trade activities in major transaction currencies to a central clearing office. Depending on the derivatives' hedging purpose and resulting accounting treatment, the offered positions are either hedged under a portfolio hedge approach or directly hedged with banks on a back-to-back basis taking into account the respective maturity. Financial transactions and the transactions undertaken by our subsidiaries outside the Euro zone are hedged in close cooperation with central Group management. Compliance with the Group's requirements is regularly ascertained by our Central Internal Audit Department.

Foreign currency hedging is used to fix prices on the basis of hedging rates as protection against any unfavorable exchange rate fluctuations in the future. When hedging anticipated production-related ore, coal and coke purchases, favorable developments in the Euro/US dollar exchange rate are also systematically exploited.

Hedging periods are generally based on the maturities of underlying transactions. Foreign currency derivative contracts usually have maturities of twelve months or less, but can also be significantly longer in exceptional cases. The hedging periods for forecasted ore, coal and coke purchases have been established on the basis of a theoretical fair exchange rate (based on purchasing power parity) and the margin of fluctuation between the US dollar and the Euro based on historical data. In accordance with a set pattern, purchases forecasted for a specific period are hedged whenever defined hedging rates are reached.

The US dollar is the only relevant risk variable for sensitivity analyses under IFRS 7, as the vast majority of foreign currency cash flows occurs in US dollars. As hedging transactions are generally used to hedge underlying transactions, opposite effects in underlying and hedging transactions are almost entirely offset over the total period. Thus, the currency risk exposure described here results from hedging relationships with off-balance sheet underlying transactions, i.e. hedges of firm commitments and forecasted sales. Based on our analysis, the US dollar exposure as of September 30, 2009 was as follows:

If the Euro had been 10% stronger against the US dollar as of September 30, 2009, the hedge reserve in equity and fair value of hedging transactions would have been €42 million (2008: €229 million) lower and earnings resulting from the measurement as of the balance sheet date €85 million (2007/2008: €32 million) higher. If the Euro had been 10% weaker against the US dollar as of September 30, 2009, the hedge reserve in equity and fair value of hedging transactions would have been €51 million (2008: €280 million) higher and earnings resulting from the measurement as of the balance sheet date €100 million (2007/2008: €41 million) lower.

Interest rate risk

Due to the international focus of ThyssenKrupp's business activities, the Group procures liquidity in international money and capital markets in different currencies – predominantly in Euros and US dollars – and with various maturities. Some of the resulting financial debt and financial investments are exposed to interest rate risk. The Group's central interest rate management manages and optimizes interest rate risk. This includes regular interest analyses. In some cases, the Group uses derivatives to hedge interest rate risk. These instruments are contracted with the objective of minimizing interest rate volatilities and finance costs for underlying transactions.

Major parts of the interest derivatives are immediately and directly allocated to particular financings as cash flow hedges. These are derivatives that qualify for hedge accounting. The sum total of interest expenses from these derivatives' underlying transactions and allocated interest derivatives recognized in the statement of income represents the hedging relationship's fixed interest rate.

Another part of the interest derivatives is not specifically allocated to an individual financing but hedges a portfolio of individual loans using a macro hedge approach.

Cross currency swaps have been contracted primarily in connection with the US dollar financing activities. In 2008/2009 these derivatives were classified as cash flow hedges.

Interest rate instruments can result in cash flow risks, opportunity effects, as well as interest rate risks affecting the balance sheet and earnings. Refinancing and variable-rate financial instruments are subject to cash flow risk which expresses the uncertainty of future interest payments. Cash flow risk is measured by means of cash flow sensitivity. Opportunity effects arise from non-derivatives, as these are measured at amortized cost rather than fair value, in contrast to interest derivatives. This difference, the so-called opportunity effect, affects neither the balance sheet nor the statement of income. On-balance sheet interest rate risks affecting equity result from the measurement of interest derivatives qualifying as micro hedges. Interest rate risks affecting earnings arise from the remaining interest derivatives. Opportunity effects and interest rate risks affecting the balance sheet and earnings are determined by calculating fair value sensitivity analyses and changes.

As of September 30, 2009, a +100/(20) basis point parallel shift in yield curves is assumed for all currencies in interest analyses. In the previous year the parallel shift was +100/(100) basis points. Due to the current low interest level the shift was reduced from (100) basis points to (20) basis points to avoid negative interest rates. The analysis results in the opportunities (positive values) and risks (negative values) shown in the following table:

million €

		Changes in all yield curves as of Sept. 30, 2009 by
		+ 100 basis points		(20) basis points
Cash flow risk		46		(9)
Opportunity effects		256		(53)
Interest rate risks resulting from interest rate derivatives affecting balance sheet		(1)		0
Interest rate risks resulting from interest rate derivatives affecting earnings		0		0

In the previous year the analysis resulted in the opportunities (positive values) and risks (negative values) shown in the following table:

million €

		Changes in all yield curves as of Sept. 30, 2008 by
		+ 100 basis points		(100) basis points
Cash flow risk		21		(21)
Opportunity effects		100		(106)
Interest rate risks resulting from interest rate derivatives affecting balance sheet		1		(1)
Interest rate risks resulting from interest rate derivatives affecting earnings		2		(2)

If, as of September 30, 2009, all yield curves combined had been 100 basis points higher, the hedge reserve in equity and fair value of the relevant interest derivatives would have been €1 million lower (2008: €1 million higher) and earnings resulting from the measurement as of the balance sheet date €46 million (2007/2008: €23 million) higher. If, as of September 30, 2009, all yield curves combined had been 20 basis points lower, the hedge reserve in equity and fair value of the relevant interest derivatives would have been unchanged (2008: shift by (100) basis points €1 million lower) and earnings resulting from the measurement as of the balance sheet date €9 million (2007/2008: shift by (100) basis points €23 million) lower.

Commodity price risks

The Group uses various nonferrous metals, especially nickel, as well as commodities such as ore, coal, coke and energy, for different production processes. Purchase prices for commodities and energy can vary significantly depending on market conditions. Fluctuations in commodity prices cannot always be passed on to customers.

This causes commodity price risks which can affect income, equity and cash flow. Long-term supply contracts have been concluded with suppliers, especially for ore, coal and coke, to hedge commodity price risks. In addition, some Group companies use derivatives, especially for nickel and copper, so as to minimize risks arising from commodity price volatilities. These instruments are in general hedged locally, and the contracting of such financial derivatives is subject to strict guidelines which are checked for compliance by internal auditing. Only marketable instruments are used, as there are mainly commodity forward contracts. Commodity forward contracts are measured at fair value. Fluctuations in fair value are recognized predominately in profit or loss under sales revenue or cost of sales. Sometimes cash flow hedge accounting is used when commodity derivatives are immediately and directly allocated to a particular firm commitment. In some cases, fair value hedges are used to hedge the exposure to changes in fair value of a firm commitment and exposure to inventory price risks.

Risks resulting from rising energy prices are limited by structuring procurement on the electricity market and concluding or extending long-term natural gas contracts. These contracts are subject to the so-called "own use exemption" and therefore not carried as derivatives.

Only hypothetical changes in market prices for derivatives are included in scenario analysis, required for financial instruments under IFRS 7. Offsetting effects from underlying transactions are not taken into account and would reduce their effect significantly.

In assuming oversupply of various metals, we used market prices at production cost level of important manufacturers; depending on said commodities, this equates to a hypothetical maximum price reduction of 71% (2007/2008: 73%). The reason for this assumption is that downturns in metal production, and even closures, are usually the consequence of significantly lower market prices for a sustained period of time. As usual at times of oversupply, there are high forward mark-ups ("contango") on each metal. The estimated hypothetical impact on profit or loss resulting from the measurement as of the balance sheet date is €117 million (2007/2008: €275 million), and on equity €(37) million (2008: €(64) million). Historical peak market prices are used in a scenario of high prices associated with severe shortages. Forward discounts ("backwardation") usually associated with undersupplied markets also reflect historical peak prices. Depending on commodity, price rises of up to 214% (2007/2008: 252%) are assumed. The estimated hypothetical impact on profit or loss resulting from the measurement as of the balance sheet date is €(336) million (2007/2008: €(295) million), and on equity €149 million (2008: €116 million).

31 Related parties

Based on the notification received in accordance with German Securities Trade Act (WpHG) Art. 21 as of December 21, 2006, the Alfried Krupp von Bohlen und Halbach Foundation holds an interest of 25.10% in ThyssenKrupp AG; based on a voluntary notification of the Foundation as of October 06, 2009, the interest in ThyssenKrupp AG amounts to 25.33% as of September 30, 2009. Outside the services and considerations provided for in the by-laws (Article 21 of the Articles of Association of ThyssenKrupp AG), there are no other significant delivery and service relations except for the following transactions. In 2006/2007, a Group subsidiary received a €2 million elevator modernization contract from an entity belonging to the Alfried Krupp von Bohlen und Halbach Foundation. Based on this contract, a Group subsidiary realized sales of €1.4 million in 2007/2008 and of €0.2 million in 2008/2009.

In 2008/2009, the Group has business relations with non-consolidated subsidiaries, associates and joint ventures. Transactions with these related parties result from the delivery and service relations in the ordinary course of business; the extent of the business relations is presented in the following table:

million €

		Sales		Supplies and services		Receivables		Payables
		Year ended Sept. 30, 2009		Year ended Sept. 30, 2009		Sept. 30, 2009		Sept. 30, 2009
Non-consolidated subsidiaries		1		0		2		1
Associates		88		8		50		15
Joint ventures		180		1,049		53		295

In 2007/2008, the Group had business relations with non-consolidated subsidiaries to a minor extent. With joint ventures of major importance the Group realized sales of €257 million in 2007/2008 resulting in receivables of €160 million as of September 30, 2008. At the same time the Group purchased supplies and services in the amount of €1,524 million from major joint ventures in 2007/2008 resulting in payables of €290 million as of September 30, 2008. With associates of major importance the Group realized sales of €40 million in 2007/2008 resulting in receivables of €18 million as of September 30, 2008. At the same time the Group purchased supplies and services in the amount of €38 million from major associates which did not result in any payables as of September 30, 2008. The transactions resulted from the delivery and service relations in the ordinary course of business.

ESG Legierungen GmbH is classified as a related party due to the fact that a close member of the family of an Executive Board member of ThyssenKrupp AG is a managing director. In 2008/2009 the Group realized sales of €0.3 million (2007/2008: €1.7 million) with ESG Legierungen GmbH from the sale of zinc. In the same period the Group purchased zinc alloy with a value of €0.1 million (2007/2008: €0.2 million) from ESG Legierungen GmbH. The transactions were carried out at market conditions and resulted in trade accounts payable of €48 thousand (2008: trade accounts receivable of €0.1 million) as of September 30, 2009.

The Heitkamp & Thumann Group located in Düsseldorf and the Heitkamp Baugruppe located in Herne are classified as related parties due to the fact that a member of the Supervisory Board has significant influence on both Groups. In the period from November, 16, 2008 to September 30, 2009, the ThyssenKrupp Group realized sales of €14.4 million with the Heitkamp & Thumann Group from the sale of steel and stainless material as well as from industrial servicing. In the same period ThyssenKrupp purchased tools with a value of €0.5 million from the Heitkamp & Thumann Group and services with a value of €1.9 million from the Heitkamp Baugruppe. The transactions were carried out at market conditions. As of September 30, 2009, the transactions with the Heitkamp & Thumann Group resulted in trade accounts receivable of €1.2 million and trade accounts payable of €3 thousand, the transactions with the Heitkamp Baugruppe resulted in trade accounts receivable of €2 thousand and trade accounts payable of €0.7 million.

Compensation of current Executive and Supervisory Board members

The Group's key management personnel compensation which has to be disclosed in accordance with IAS 24 comprises of the compensation of the current Executive and Supervisory Board members.

Compensation of the current Executive Board members is as follows:

Thousand €

		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Short-term benefits (without share-based compensation)		18,871		5,423
Post-employment benefits		1,502		879
Share-based compensation		963		1,120

Service cost resulting from the pension obligations of the current members of the Executive Board is disclosed as post-employment benefits. The disclosure of share-based compensation refers to the fair value at grant date.

In addition, in fiscal 2008/2009, the Executive Board members received payments of €4,745 thousand (2007/2008: €13,272 thousand) from share-based compensation.

As of September 30, 2008 and 2009, respectively, no loans or advance payments were granted to members of the Executive Board; also as in the previous year no contingencies were assumed for the benefit of Executive Board members.

Compensation of the current Supervisory Board members is as follows:

Thousand €

		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Short-term benefits		2,721		1,717
Long-term benefits		895		162

In addition, members of the Supervisory Board of ThyssenKrupp AG received compensation of €124 thousand in fiscal 2008/2009 (2007/2008: €223 thousand) for supervisory board mandates at Group subsidiaries.

As of September 30, 2008 and 2009, respectively, no loans or advance payments were granted to members of the Supervisory Board; also as in the previous year no contingencies were assumed for the benefit of Supervisory Board members.

For individualized presentation and further details of Executive and Supervisory Board compensation refer to the presentation of the audited compensation report which is part of the "Corporate Governance" chapter of the annual report.

Compensation of former Executive and Supervisory Board members

Total compensation paid to former members of the Executive Board and their surviving dependants amounted to €24.4 million (2007/2008: €13.7 million); this includes benefits according to IAS 24.16(d) in the amount of €9.9 million (2007/2008: 0). Under IFRS an amount of €173.5 million (2008: €142.3 million) is accrued for pension obligations benefiting former Executive Board members and their surviving dependants.

Former Supervisory Board members who left the Supervisory Board prior to October 01, 2008 receive a proportional payment from the long-term compensation component in the total amount of €4 thousand (2007/2008: €16 thousand).

32 Segment reporting

The segments described below follow the internal organizational and reporting structure of the Group. The various products and services of the Group are considered in the segmentation.

Steel

The Steel segment concentrates on the production and sale of highquality carbon steel flat products. The product range is focused on products with high value added along the value chain. The segment's capabilities are characterized by intelligent materials solutions, product-specific processing, services and extensive customer support.

Stainless

This segment combines all production and sales functions for flat-rolled stainless steel, nickel alloys and titanium. With its strong delivery performance, flexibility and full range of services, Stainless supports customers in the manufacture of high-quality end products.

Technologies

The companies of the Technologies segment produce high-tech plants and components. They include Plant Technology, Marine Systems, Mechanical Components, Automotive Solutions and Transrapid. Plant Technology provides project management for the engineering and construction of specialized and large-scale plants for the chemical, petrochemical, cement, mining/handling and coke sectors. Marine Systems specializes in building, repair, conversion and service in particular of naval ships, i.e. conventional submarines and surface vessels. In non-naval shipbuilding, Marine Systems builds mega-yachts and container ships. The Mechanical Components companies produce components for the mechanical engineering and automotive industries, including large-diameter antifriction bearings, assembled camshafts, crankshafts, castings and undercarriages for construction machinery. Automotive Solutions develops solutions to meet the needs of the auto industry. Products and services range from steering and damping systems to the entire body technology process chain, systems solutions for chassis applications to assembly equipment for the auto industry. Transrapid is involved in engineering, project management and construction of high-speed maglev train systems.

Elevator

This segment is active in the construction, modernization and servicing of elevators, escalators, moving walks, stair and platform lifts as well as passenger boarding bridges. Alongside a full range of installations for the volume market, the segment also delivers customized solutions.

Services

The Services segment is a service provider for industrial materials, raw materials and industrial processes. Alongside the distribution and sale of rolled and specialty steel, tubular products, nonferrous metals and plastics, it offers services ranging from primary processing and logistics to warehouse and inventory management and supply chain management. The process services include production support as well as complex maintenance activities. Other capabilities include the worldwide supply of metallurgical raw materials and development of innovative technical system solutions.

Corporate

Corporate includes the Group's head office and internal service providers as well as inactive companies which could not be assigned to an individual segment. In addition, the non-operating property is managed and utilized centrally by Corporate. Also the retained assets and liabilities of ThyssenKrupp Budd were assigned to Corporate. Corporate loss before taxes consists of:

million €

		Year ended Sept. 30, 2008		Year ended Sept. 30, 2009
Corporate administration		(192)		(109)
Pension expenses		(20)		(23)
R&D promotion		(6)		(12)
Interest cost of financial debt		(2)		(52)
Interest cost of pensions		(159)		(206)
Miscellaneous financial income/(expense)		(22)		46
Risk and insurance services		21		18
Special items		(47)		(7)
Loss Corporate Headquarters		(427)		(345)
Income Corporate Real Estate		10		1
Loss Corporate before income taxes		(417)		(344)

Consolidation

Consolidation essentially contains the elimination of intercompany profits in inventories. The elimination of the income from equity investments in which the segments Steel and Services are jointly involved also takes place in the Group consolidation. These jointly owned companies are fully consolidated by the Steel segment in which they are managed. In the Services segment, the equity method of accounting for investments is used. Within Services, results on investments from intra-group joint ventures amount to €0 million (2007/2008: €19 million).

Apart from the compensation for expenses outlined above, the accounting principles for the segments are the same as those described for the Group in the summary of significant accounting principles. The measure of segment profit and loss, which is used to evaluate the performance of the operating segments of the Group, is the "Income before income taxes" line item presented in the consolidated statements of income.

Inter-segment pricing is determined on an arm's length basis.

Table: Information by segments

In presenting information for geographical areas, allocation of sales is based on the location of the customer. Allocation of segment assets and capital expenditures is based on the location of the assets. Capital expenditures are presented in line with the definition of the cash flow statement.

The geographical segment "Other EU" comprises of all member states of the European Union (besides Germany) as of the current reporting date. European countries which are currently not member of the European Union are part of the "Other countries" segment.

The "Americas" segment includes the countries of the Nafta and of South America. The "Asia/Pacific" segment consists of Asia and Australia.

Due to the high volume of customers and the variety of business activities, there are no individual customers that generate sales values that are material to the Group's consolidated net sales.

Information bY Geographical area million €

		Germany		Other EU*		Americas		Asia / Pacific		Other countries		Group
External sales (location of the customer)
Year ended Sept. 30, 2008		19,161		16,677		9,706		4,852		3,030		53,426
Year ended Sept. 30, 2009		13,031		12,142		7,858		4,341		3,191		40,563
Non-current assets (intangible assets, property, plant and equipment, investment property and other non-financial assets) (location of the assets)
Sept. 30, 2008		8,129		2,515		5,437		795		332		17,208
Sept. 30, 2009		7,943		2,377		7,972		822		393		19,507

33 Accounting estimates and judgements

The preparation of the Group's consolidated financial statements requires management estimates and assumptions that affect reported amounts and related disclosures. All estimates and assumptions are made to the best of management's knowledge and belief in order to fairly present the Groups financial position and results of operations. The following accounting policies are significantly impacted by management's estimates and judgements.

Business combinations

As a result of acquisitions the Group recognized goodwill in its balance sheet. In a business combination, all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their respective fair value. One of the most significant estimates relates to the determination of the fair value of these asset and liabilities. Land, buildings and equipment are usually independently appraised while marketable securities are valued at market price. If any intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, the Group either consults with an independent external valuation expert or develops the fair value internally, using an appropriate valuation technique which is generally based on a forecast of the total expected future net cash flows. These evaluations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the discount rate applied.

Goodwill

As stated in the accounting policy in Note 01, the Group tests annually and in addition if any indicators exist, whether goodwill has suffered an impairment. If there is an indication, the recoverable amount of the cash-generating unit has to be estimated which is the greater of the fair value less costs to sell and the value in use. The determination of the value in use involves making adjustments and estimates related to the projection and discounting of future cash flows (see Note 12). Although management believes the assumptions used to calculate recoverable amounts are appropriate, any unforeseen changes in these assumptions could result in impairment charges to goodwill which could adversely affect the future financial position and operating results.

Recoverability of assets

At each balance sheet date, the Group assesses whether there is any indication that the carrying amounts of its property, plant and equipment, investment property or intangible assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the fair value less costs to sell and the value in use. In assessing the value in use, discounted future cash flows from the related assets have to be determined. Estimating the discounted future cash flows involves significant assumptions, including particularly those regarding future sale prices and sale volumes, costs and discount rates. Although management believes that its estimates of the relevant expected useful lives, its assumptions concerning the economic environment and developments in the industries in which the Group operates and its estimations of the discounted future cash flows are appropriate, changes in the assumptions or circumstances could require changes in the analysis. This could lead to additional impairment charges in the future or to reversal of impairments if the trends identified by management reverse or the assumptions or estimates prove incorrect.

Revenue recognition on construction contracts

Certain Group entities, particularly in the Technologies and Elevator segments, conduct a portion of their business under construction contracts which are accounted for using the percentage-of-completion method, recognizing revenue as performance on the contract progresses. This method requires accurate estimates of the extent of progress towards completion. Depending on the methodology to determine contract progress, the significant estimates include total contract costs, remaining costs to completion, total contract revenues, contract risks and other judgements. The managements of the operating companies continually review all estimates involved in such construction contracts and adjust them as necessary.

Income taxes

The Group operates and earns income in numerous countries and is subject to changing tax laws in multiple jurisdictions within the countries. Significant judgements are necessary in determining the worldwide income tax liabilities. Although management believes they have made reasonable estimates about the ultimate resolution of tax uncertainties, no assurance can be given that the final tax outcome of these matters will be consistent with what is reflected in the historical income tax provisions. Such differences could have an effect on the income tax liabilities and deferred tax liabilities in the period in which such determinations are made.

At each balance sheet date, the Group assesses whether the realization of future tax benefits is sufficiently probable to recognize deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to, among other things, benefits that could be realized from available tax strategies and future taxable income, as well as other positive and negative factors. The recorded amount of total deferred tax assets could be reduced if estimates of projected future taxable income and benefits from available tax strategies are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Group's ability to utilize future tax benefits. See Note 09 for further information on potential tax benefits for which no deferred tax asset is recognized.

Employee benefits

The Group accounts for pension and other postretirement benefits in accordance with actuarial valuations. These valuations rely on statistical and other factors in order to anticipate future events. These factors include key actuarial assumptions including the discount rate, expected return on plan assets, expected salary increases, mortality rates and health care cost trend rates. These actuarial assumptions may differ materially from actual developments due to changing market and economic conditions and therefore result in a significant change in postretirement employee benefit obligations and the related future expense. (See Note 23 for further information regarding employee benefits).

Legal contingencies

ThyssenKrupp companies are parties to litigations related to a number of matters as described in Note 29. The outcome of these matters may have a material effect on the financial position, results of operations or cash flows. Management regularly analyzes current information about these matters and provides provisions for probable contingent losses including the estimate of legal expense to resolve the matters. For the assessments internal and external lawyers are used. In making the decision regarding the need for loss provisions, management considers the degree of probability of an unfavorable outcome and the ability to make a sufficiently reliable estimate of the amount of loss. The filing of a suit or formal assertion of a claim against ThyssenKrupp companies or the disclosure of any such suit or assertions, does not automatically indicate that a provision of a loss may be appropriate.

34 Subsequent events

Since 2006, the Group subsidiaries HDW and HSY from the Marine Systems business unit have been exposed to an increasing risk of default by the defense ministry of the Republic of Greece as contracting authority for a newbuild and modernization program for a total of 7 submarines. The total nominal value of the overdue payments had reached €534 million. Against this background, continuation of the contractual relationship was no longer defensible. The underlying construction contracts were terminated for cause with immediate effect on September 21, 2009. In view of this situation the financing commitments of ThyssenKrupp AG to HSY were terminated at September 25, 2009. An interim financing commitment of the parent company ThyssenKrupp Marine Systems AG expired at October 31, 2009. As a result, HSY's financial situation worsened to the extent that the going-concern assumption could no longer be maintained for this Group subsidiary. Negotiations are currently ongoing to try to reach a change-of-ownership solution that meets the interests of the parties concerned. This includes in particular ThyssenKrupp's interest in settlement of the outstanding receivables.