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ThyssenKrupp AG
Notes to the interim condensed consolidated financial statements

ThyssenKrupp Aktiengesellschaft ("ThyssenKrupp AG" or "Company") is a publicly traded corporation domiciled in Germany. The interim condensed consolidated financial statements of ThyssenKrupp AG and subsidiaries, collectively the "Group", for the period from October 01, 2008 to December 31, 2008, were authorized for issue in accordance with a resolution of the Executive Board on February 09, 2009.

The accompanying Group's interim condensed consolidated financial statements have been prepared in accordance with section 37x para. 3 in connection with section 37w para. 2 of the German Securities Trading Act (WpHG) and International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) for interim financial information effective within the European Union. Accordingly, these financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for year end reporting purposes.

The accompanying Group's interim condensed consolidated financial statements have been reviewed. In the opinion of Management, the interim financial statements include all adjustments of a normal and recurring nature considered necessary for a fair presentation of results for interim periods. Results of the period ended December 31, 2008, are not necessarily indicative for future results.

The preparation of interim financial statements in conformity with IAS 34 Interim Financial Reporting requires Management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The accounting principles and practices as applied in the interim condensed consolidated financial statements correspond to those pertaining to the most recent annual consolidated financial statements. A detailed description of the accounting policies is published in the notes to the annual consolidated financial statements of our annual report 2007/2008.

In the 1st quarter ended December 31, 2008, the Group acquired companies that are, on an individual basis, immaterial. Based on the values of the acquisition date, these acquisitions affected, in total, the Group's consolidated financial statements as presented below:

million €
1st quarter ended Dec. 31, 2008
  Carrying
amounts
as of
acquisition
date		 Adjustments Fair values
as of
acquisition
date
Goodwill 0 5 5
Other intangible assets 0 2 2
Inventories 1 0 1
Trade accounts receivable 2 0 2
Total assets acquired 3 7 10
Accrued pension and similar obligations 1 0 1
Deferred tax liabilities 0 1 1
Other current non-financial liabilities 1 0 1
Total liabilities assumed 2 1 3
Net assets acquired 1 6 7
Minority interest     0
Purchase prices (incl. incidental acquisition cost)     7
thereof: paid in cash and cash equivalents     2

As of the balance sheet date an investment is held for sale in the Technologies segment. It is included in the line item "assets held for sale".

Included in cost of sales are write-downs of inventories of €250 million which mainly refer to the Stainless and Services segments.

Management incentive plans

ThyssenKrupp recorded an income of €6.6 million from the obligations of the mid-term incentive plan in the 1st quarter ended December 31, 2008 (1st quarter ended December 31, 2007: income of €1.8 million).

The Group's Share Purchase Program resulted in a compensation expense of €5.5 million in the 1st quarter ended December 31, 2008 (1st quarter ended December 31, 2007: €4.0 million).

Significant changes in the interest rate and plan asset situation compared to September 30, 2008 as a consequence of the crisis on the international financial markets resulted in significant changes in accrued pension liability and accrued postretirement obligations other than pensions (health care obligations). Therefore, as of December 31, 2008, an updated valuation of accrued pension and health care obligations was performed taking into account these effects while keeping other assumptions unchanged.

million €
Sept. 30, 2008 Dec. 31, 2008
Accrued pension liability 5,227 5,775
Accrued postretirement obligations other than pensions 1,029 1,085
Other accrued pension-related obligations 294 283
Total 6,550 7,143

The Group applied the following weighted average assumptions to determine pension and postretirement benefit obligations other than pensions:

in %
Sept. 30, 2008 Dec. 31, 2008
  Germany Outside Germany Germany Outside Germany
Discount rate for accrued pension liability 6.75 6.44 6.00 5.94
Discount rate for postretirement obligations other than pensions (only USA/Canada) — 6.97 — 6.05

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

million €
1st quarter ended Dec. 31, 2007 1st quarter ended Dec. 31, 2008
  Germany Outside Germany Germany Outside Germany
Service cost 18 8 15 7
Interest cost 73 32 81 30
Expected return on plan assets (3) (35) (3) (26)
Settlement and curtailment gain 0 0 0 (1)
Net periodic pension cost 88 5 93 10

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

million €
1st quarter ended Dec. 31, 2007 USA/Canada 1st quarter ended Dec. 31, 2008 USA/Canada
Service cost 3 3
Interest cost 14 17
Expected return on reimbursement rights (1) (1)
Past service cost 0 (24)
Settlement and curtailment gain 0 (20)
Net periodic postretirement benefit cost 16 (25)

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

Table: Total equity


Guarantees

ThyssenKrupp AG and its segment lead companies as well as, in individual cases, its subsidiaries have issued guarantees in favor of business partners 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
Dec. 31, 2008		 Provision
as of
Dec. 31, 2008
Advance payment bonds 145 0
Performance bonds 64 0
Third party credit guarantee 40 0
Residual value guarantees 45 1
Other guarantees 81 2
Total 375 3

The terms of those 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 the non-performance of the primary obligor under a contractual agreement, e.g. late delivery, delivery of non-conforming goods under a contract or non-performance with respect to the warranted quality or default under a loan agreement.

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

Commitments and other contingencies

Compared to September 30, 2008, in the Steel and Stainless segments the commitment to enter into investment projects in Brazil and North America decreased by €1.0 billion to €3.6 billion.

Pending lawsuits and claims for damages

The Group is involved in pending and threatened litigation in connection with the sale of certain companies, which may lead to partial repayment of purchase price or to the award of damages. In addition, damage claims may be payable to customers and subcontractors under performance contracts. Some of these claims have proven unfounded or have expired under the statute of limitations. The Group believes, based upon consultation with relevant legal counsel, that the ultimate outcome of these pending and threatened lawsuits will not result in a material impact on the Group's financial condition or results of operations.

There have been no significant changes since the previous year end to other contingencies, including pending litigations.

The notional amounts and fair values of the Group's derivative financial instruments are as follows:

million €
Notional
amount
Sept. 30, 2008		 Fair value
Sept. 30, 2008		 Notional
amount
Dec. 31, 2008		 Fair value
Dec. 31, 2008
Derivative financial instruments        
Assets        
Foreign currency derivatives including embedded derivatives 5,696 213 5,850 322
Interest rate derivatives* 71 21 71 25
Commodity derivatives 1,273 292 768 312
Total 7,040 526 6,689 659
         
Liabilities        
Foreign currency derivatives including embedded derivatives 6,804 368 5,745 529
Interest rate derivatives* 898 25 897 66
Commodity derivatives 823 152 675 278
Total 8,525 545 7,317 873
* inclusive of cross currency swaps

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 is a managing director. In the 1st quarter ended December 31, 2008, the Group realized sales of €0.1 million with ESG Legierungen GmbH from the sale of zinc. The transactions were carried out at market conditions and settled as of December 31, 2008.

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 December 31, 2008, the ThyssenKrupp Group realized sales of €1.4 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 €0.1 million from the Heitkamp & Thumann Group and services with a value of €0.9 million from the Heitkamp Baugruppe. The transactions were carried out at market conditions. As of December 31, 2008, the transactions with the Heitkamp & Thumann Group resulted in trade accounts receivable of €1.4 million and trade accounts payable of €0.1 million, the transactions with the Heitkamp Baugruppe resulted in trade accounts payable of €0.9 million.

Segment information for the 1st quarter ended December 31, 2007 and December 31, 2008 is as follows:

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million €
Steel Stainless Technologies Elevator Services Corporate Consolidation Group
1st quarter ended Dec. 31, 2007                
External sales 2,872 1,649 2,804 1,183 3,733 29 0 12,270
Internal sales within the Group 342 189 18 1 134 5 (689) 0
Total sales 3,214 1,838 2,822 1,184 3,867 34 (689) 12,270
Income/(loss) before income taxes 353 (45) 179 119 132 (84) (8) 646
1st quarter ended Dec. 31, 2008                
External sales 2,633 1,045 2,904 1,342 3,572 26 0 11,522
Internal sales within the Group 292 128 17 1 154 9 (601) 0
Total sales 2,925 1,173 2,921 1,343 3,726 35 (601) 11,522
Income/(loss) before income taxes 251 (249) 164 156 30 (108) (4) 240

Basic earnings per share is computed as follows:

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million €
1st quarter ended Dec. 31, 2007 1st quarter ended Dec. 31, 2008
  Total amount
in million €		 Earnings per
share in €		 Total amount
in million €		 Earnings per
share in €
Numerator:        
Net income (attributable to ThyssenKrupp AG's stockholders) 414 0.85 168 0.36
         
Denominator:        
Weighted average shares 488,764,592   463,473,492  

Relevant number of common shares for the determination of earnings per share

Earnings per share have been computed by dividing income attributable to common stockholders of ThyssenKrupp AG (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Shares issued during the period and shares reacquired during the period have been weighted for the portion of the period that they were outstanding.

In fiscal year 2007/2008 the weighted average number of outstanding shares was reduced by the repurchase of treasury shares in February/March 2008 and July/August 2008.

There were no dilutive securities in the periods presented.

Non-cash investing activities

In the 1st quarter ended December 31, 2008, the acquisition and first-time consolidation of companies created an increase in noncurrent assets of €7 million (1st quarter ended December 31, 2007: €52 million).

The non-cash addition of assets under finance leases in the 1st quarter ended December 31, 2008 amounts to €6 million (1st quarter ended December 31, 2007: €25 million).

Non-cash financing activities

In the 1st quarter ended December 31, 2008, the acquisition and first-time consolidation of companies does not result in an increase in gross financial debt (1st quarter ended December 31, 2007: €32 million).

No reportable events occurred.