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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 March 31, 2009, were authorized for issue in accordance with a resolution of the Executive Board on May 12, 2009.

The accompanying Group's interim condensed consolidated financial statements have been prepared in accordance with section 37w 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 March 31, 2009, 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 fiscal year 2008/2009, the following Amendments to already existing Standards with relevance for ThyssenKrupp have been issued which still must be endorsed by the EU before they can be adopted:

In March 2009 the IASB issued an amendment to IFRS 7 "Financial Instruments: Disclosures" titled "Improving Disclosures about Financial Instruments". The amendment enhances the disclosure requirements about fair value measurements and about liquidity risk. The application of the amended Standard is compulsory for fiscal years beginning on or after January 01, 2009, while earlier application is permitted. In the first year of application comparative disclosures are not required. The initial application at ThyssenKrupp will lead to additional disclosures in the Notes.

In April 2009 the IASB issued the second omnibus standard "Improvements to IFRSs" as part of its annual improvement process project. This standard slightly adjusts ten existing standards and two interpretations by fifteen amendments. Unless otherwise specified, the amendments are effective for fiscal years beginning on or after January 01, 2010, while earlier application is permitted. Currently, Management does not expect the adoption of the amended standards and interpretations – if endorsed by the EU in the current version – to have a material impact on the Group's consolidated financial statements.

In the 1st half year ended March 31, 2009, 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 half ended March 31, 2009
  Carrying
amounts
as of
acquisition
date		 Adjustments Fair
values
as of
acquisition
date
Goodwill 0 18 18
Other intangible assets 0 7 7
Property, plant and equipment 1 0 1
Inventories 1 0 1
Trade accounts receivable 6 0 6
Other current non-financial assets 1 0 1
Total assets acquired 9 25 34
Accrued pension and similar obligations 1 0 1
Deferred tax liabilities 0 2 2
Current financial debt 1 0 1
Trade accounts payable 2 0 2
Other current non-financial liabilities 3 0 3
Total liabilities assumed 7 2 9
Net assets acquired 2 23 25
Minority interest     0
Purchase prices (incl. incidental acquisition cost)     25
thereof: paid in cash and cash equivalents     13

In January 2009, ThyssenKrupp acquired the remaining 25% share in ThyssenKrupp Marine Systems AG after One Equity Partner (OEP), the former minority holder of the shipyard group, had exercised the existing put option in December 2008. Due to the put option, the acquisition had only a minor impact on the Group's consolidated balance sheet as 100% of ThyssenKrupp Marine Systems AG are already consolidated.

In the 6 months period ended March 31, 2009, included in cost of sales are write-downs of inventories of €239 million which mainly refer to the Stainless and Services segments. Furthermore, impairment losses on property, plant and equipment of €80 million were recognized in cost of sales which almost exclusively refer to the 2nd quarter ended March 31, 2009 and which mainly resulted from the Stainless segment.

Management incentive plans

In January 2009, ThyssenKrupp granted 80,043 stock rights under the seventh installment of the mid-term incentive plan. In addition, in the 2nd quarter ended March 31, 2009, the stock rights granted in the fourth installment of the mid-term incentive plan were settled with a payment of €23.5 million. Due to a downward trend of the value determining components, ThyssenKrupp recorded an income of €11.1 million from the reversal of the obligations of the mid-term incentive plan in the 2nd quarter ended March 31, 2009 (2nd quarter ended March 31, 2008: expense of €5.4 million) resulting in income of €17.7 million in the 1st half year ended March 31, 2009 (1st half ended March 31, 2008: expense of €3.6 million).

The Group's Share Purchase Program resulted in a compensation expense of €0 million in the 2nd quarter ended March 31, 2009 (2nd quarter ended March 31, 2008: €1.3 million) and of €5.5 million in the 1st half year ended March 31, 2009 (1st half ended March 31, 2008: €5.3 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 March 31, 2009, 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		 March 31,
2009
Accrued pension liability 5,227 5,762
Accrued postretirement obligations other than pensions 1,029 1,028
Other accrued pension-related obligations 294 277
Total 6,550 7,067

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

in %
Sept. 30, 2008 March 31, 2009
  Germany Outside Germany Germany Outside Germany
Discount rate for accrued pension liability 6.75 6.44 6.00 6.50
Discount rate for postretirement obligations other than pensions (only USA/Canada) — 6.97 — 7.09

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

million €
1st half ended
March 31, 2008		 1st half ended
March 31, 2009		 2nd quarter ended
March 31, 2008		 2nd quarter ended
March 31, 2009
  Germany Outside Germany Germany Outside Germany Germany Outside Germany Germany Outside Germany
Service cost 38 15 30 13 20 7 15 6
Interest cost 146 64 162 61 73 32 81 31
Expected return on plan assets (6) (70) (6) (52) (3) (35) (3) (26)
Curtailment and settlement gains 0 0 0 (1) 0 0 0 0
Termination benefit expense 0 0 0 8 0 0 0 8
Net periodic pension cost 178 9 186 29 90 4 93 19

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

million €
1st half
ended
March 31,
2008
USA/Canada		 1st half
ended
March 31,
2009
USA/Canada		 2nd quarter
ended
March 31,
2008
USA/Canada		 2nd quarter
ended
March 31,
2009
USA/Canada
Service cost 5 5 2 2
Interest cost 29 34 15 17
Expected return on reimbursement rights (2) (3) (1) (2)
Past service cost 0 (25) 0 (1)
Curtailment and settlement gains 0 (20) 0 0
Net periodic postretirement benefit cost 32 (9) 16 16

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

Table: Total equity

By the resolution of the Annual General Meeting on January 23, 2009, ThyssenKrupp AG 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. In addition, by the resolution of the Annual General Meeting 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 the Company (convertible bonds). The authorization is valid until January 22, 2014.

In February 2009, ThyssenKrupp Finance Nederland B.V. issued a €1.5 billion "Dual tranche"-bond documented under the companyʼs Debt Issuance Programme. The bond is unconditionally and irrevocably guaranteed by ThyssenKrupp AG. The bond was issued in two tranches with a 4 year and a 7 year maturity. The 4 year tranche has a volume of €0.5 billion and carries a coupon of 6.75% p.a., the 7 year tranche has a volume of €1.0 billion and carries a coupon of 8.50% p.a. The purpose of the transaction is to refinance the €0.5 billion bond redemption in March 2009 and to extend the financial debt maturity profile.

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 March 31, 2009		 Provision
as of
March 31, 2009
Advance payment bonds 147 0
Performance bonds 63 0
Third party credit guarantee 40 0
Residual value guarantees 45 1
Other guarantees 70 2
Total 365 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 €1.2 billion to €3.5 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, to the award of damages or to reversal of sale. In addition, damage claims may be payable to customers and subcontractors under performance contracts. Some of these claims have proven unfounded or have been ended by settlement or expired under the statute of limitations. A number of legal and regulatory proceedings are still pending. Customers are claiming damages in connection with the business activities of ThyssenKrupp.

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
March 31, 2009		 Fair value March 31, 2009
Derivative financial instruments        
Assets        
Foreign currency derivatives including embedded derivatives 5,696 213 5,692 327
Interest rate derivatives* 71 21 70 33
Commodity derivatives 1,273 292 545 156
Total 7,040 526 6,307 516
         
Liabilities        
Foreign currency derivatives including embedded derivatives 6,804 368 4,298 356
Interest rate derivatives* 898 25 905 81
Commodity derivatives 823 152 511 151
Total 8,525 545 5,714 588
* 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 half ended March 31, 2009, the Group realized sales of €0.2 million with ESG Legierungen GmbH from the sale of zinc. In the same period the Group purchased zinc alloy with a value of €19 thousand from ESG Legierungen GmbH. The transactions were carried out at market conditions and resulted in trade accounts receivable of €0.1 million as of March 31, 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 March 31, 2009, the ThyssenKrupp Group realized sales of €4.8 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 €0.2 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 March 31, 2009, the transactions with the Heitkamp & Thumann Group resulted in trade accounts receivable of €1.7 million and trade accounts payable of €0.1 million, the transactions with the Heitkamp Baugruppe resulted in trade accounts receivable of €2 thousand and trade accounts payable of €30 thousand.

In the 1st half year ended March 31, 2009, a Group subsidiary realized sales of €0.1 million resulting from a €2 million elevator modernization contract which the subsidiary received in 2006/2007 from an entity belonging to the Alfried Krupp von Bohlen and Halbach Foundation.

Segment information for the 1st half year ended March 31, 2008 and March 31, 2009 as well as for the 2nd quarter ended March 31, 2008 and March 31, 2009 is as follows:

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million €
Steel Stainless Technologies Elevator Services Corporate Consolidation Group
1st half ended March 31, 2008                
External sales 6,117 3,372 5,816 2,346 7,767 51 0 25,469
Internal sales within the Group 736 421 35 2 332 9 (1,535) 0
Total sales 6,853 3,793 5,851 2,348 8,099 60 (1,535) 25,469
Income/(loss) before income taxes 749 (7) 365 209 267 (181) (14) 1,388
1st half ended March 31, 2009                
External sales 4,821 1,962 5,542 2,635 6,370 51 0 21,381
Internal sales within the Group 509 199 35 1 259 9 (1,012) 0
Total sales 5,330 2,161 5,577 2,636 6,629 60 (1,012) 21,381
Income/(loss) before income taxes 307 (622) 59 302 (48) (211) (2) (215)

2nd quarter ended March 31, 2008		                
External sales 3,245 1,723 3,012 1,163 4,034 22 0 13,199
Internal sales within the Group 394 232 17 1 198 4 (846) 0
Total sales 3,639 1,955 3,029 1,164 4,232 26 (846) 13,199
Income/(loss) before income taxes 396 38 186 90 135 (97) (6) 742
2nd quarter ended March 31, 2009                
External sales 2,188 917 2,638 1,293 2,798 25 0 9,859
Internal sales within the Group 217 71 18 0 105 0 (411) 0
Total sales 2,405 988 2,656 1,293 2,903 25 (411) 9,859
Income/(loss) before income taxes 56 (373) (105) 146 (78) (103) 2 (455)

Basic earnings per share is computed as follows:

Table: Earnings per share

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

Earnings per share have been computed by dividing income/ (loss) 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 half year ended March 31, 2009, the acquisition and first-time consolidation of companies created an increase in non-current assets of €25 million (1st half ended March 31, 2008: €135 million). In the 2nd quarter ended March 31, 2009, these increases amounted to €18 million (2nd quarter ended March 31, 2008: €83 million).

The non-cash addition of assets under finance leases in the 1st half year ended March 31, 2009 amounted to €7 million (1st half ended March 31, 2008: €31 million) and in the 2nd quarter ended March 31, 2009 to €1 million (2nd quarter ended March 31, 2008: €6 million).

Non-cash financing activities

In the 1st half year ended March 31, 2009, the acquisition and first-time consolidation of companies resulted in an increase in gross financial debt of €1 million (1st half ended March 31, 2008: €70 million. In the 2nd quarter ended March 31, 2009, these increases amounted to €1 million (2nd quarter ended March 31, 2008: €38 million).

In April 2009, ThyssenKrupp Finance Nederland B.V. increased the volume of its 6.75% - €500 million bond of 2009/2013 issued in February 2009 which is unconditionally and irrevocably guaranteed by ThyssenKrupp AG by an amount of €500 million. The purpose of this transaction is to extend the financial debt maturity profile.