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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 June 30, 2009, were authorized for issue in accordance with a resolution of the Executive Board on August 10, 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 June 30, 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 consolidated financial statements of our annual report 2007 / 2008.

Recently issued accounting standards

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 June 2009 the IASB issued an amendment to IFRS 2 "Sharebased Payment – Group Cash-settled Share-based Payment Transactions" that clarify the accounting for Group cash-settled share-based payment transactions in the individual financial statements of the subsidiary. Furthermore the amendment to IFRS 2 incorporates guidance previously included in IFRIC 8 "Scope of IFRS 2" and IFRIC 11 "IFRS 2 – Group and Treasury Share Transactions". The application of the amended Standard is compulsory 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 first 9 months ended June 30, 2009, the Group acquired companies that are, on an individual basis, immaterial. Based on the values as of the acquisition date, these acquisitions affected, in total, the Group's consolidated financial statements as presented below:

million €
9 months ended June 30, 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 is already consolidated.

In addition, in the first 9 months ended June 30, 2009, the Group sold companies as part of the portfolio optimization that are, on an individual basis, immaterial. Based on the values at the disposal date, these disposals affected, in total, the Group's consolidated financial statements as presented below:

million €
9 months
ended
June 30, 2009
Property, plant and equipment 13
Inventories 6
Trade accounts receivable 3
Other current non-financial assets 1
Cash and cash equivalents 5
Total assets disposed of 28
Accrued pension and similar obligations 1
Other current provisions 6
Trade accounts payable 7
Other current non-financial liabilities 2
Total liabilities disposed of 16
Net assets disposed of 12
Minority interest 3
Gain/(loss) resulting from the disposals (5)
Selling prices 4
thereof: received in cash and cash equivalents 4

In the 9 months period ended June 30, 2009, included in cost of sales are write-downs of inventories of €204 million which refer with the exception of the Elevator segment to all segments. Furthermore, impairment losses on intangible assets and property, plant and equipment of €137 million were recognized in cost of sales which refer with €56 million to the 3rd quarter ended June 30, 2009 and which mainly resulted from the Stainless and Technologies segments.

Management incentive plans

In January 2009, ThyssenKrupp granted 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. In total, ThyssenKrupp recorded a compensation expense of €0.8 million from the obligations of the mid-term incentive plan in the 3rd quarter ended June 30, 2009 (3rd quarter ended June 30, 2008: €13.4 million). In the 9 months period ended June 30, 2009, due to a downward trend of the value determining components, the mid-term incentive plan resulted in an income of €16.9 million from the reversal of the obligations of the mid-term incentive plan (9 months ended June 30, 2008: expense of €17.0 million).

The Group's Share Purchase Program resulted in a compensation expense of €0 million in the 3rd quarter ended June 30, 2009 (3rd quarter ended June 30, 2008: €3.7 million) and of €5.5 million in the first 9 months ended June 30, 2009 (9 months ended June 30, 2008: €9.0 million).

Significant changes in the interest rate and plan asset situation compared to September 30, 2008 as a consequence of the crisis in 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 June 30, 2009, an updated valuation of accrued pension and health care obligations was performed taking into account these effects while other assumptions remained unchanged.

million €
Sept. 30, 2008 June 30, 2009
Accrued pension liability 5,227 5,867
Accrued postretirement obligations other than pensions 1,029 1,089
Other accrued pension-related obligations 294 423
Total 6,550 7,379

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

in %
Sept. 30, 2008 June 30, 2009
  Germany Outside Germany Germany Outside Germany
Discount rate for accrued pension liability 6.75 6.44 5.75 5.94
Discount rate for postretirement obligations other than pensions (only USA/Canada) — 6.97 — 6.19

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

million €
9 months ended
June 30, 2008		 9 months ended
June 30, 2009		 3rd quarter ended
June 30, 2008		 3rd quarter ended
June 30, 2009
  Germany Outside Germany Germany Outside Germany Germany Outside Germany Germany Outside Germany
Service cost 56 23 46 19 18 8 16 6
Interest cost 219 96 242 91 73 32 80 30
Expected return on plan assets (9) (105) (10) (77) (3) (35) (4) (25)
Past service cost 0 0 12 0 0 0 12 0
Curtailment and settlement gains 0 0 0 (1) 0 0 0 0
Termination benefit expense 0 0 0 8 0 0 0 0
Net periodic pension cost 266 14 290 40 88 5 104 11

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

million €
9 months ended
June 30, 2008
USA/Canada		 9 months ended
June 30,2009
USA/Canada		 3rd quarter ended
June 30,2008
USA/Canada		 3rd quarter ended
June 30, 2009
USA/Canada
Service cost 8 6 3 1
Interest cost 44 50 15 16
Expected return on reimbursement rights (3) (4) (1) (1)
Past service cost (1) (25) (1) 0
Curtailment and settlement gains 0 (20) 0 0
Net periodic postretirement benefit cost 48 7 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 company's 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.

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.

In June 2009, ThyssenKrupp AG issued a €1 billion bond documented under its existing Debt Issuance Programme. The bond, which was issued with a 5 year maturity, carries a coupon of 8.00% p.a.

The purpose of these transactions is to extend the Group's financial debt maturity profile and to strengthen its liquidity.

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
June 30, 2009		 Provision
as of
June 30, 2009
Advance payment bonds 194 1
Performance bonds 79 0
Third party credit guarantee 40 0
Residual value guarantees 45 1
Other guarantees 76 2
Total 434 4

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 €1.6 billion to €3.1 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 the purchase price, the award of damages or reversal of sale. In addition, damage claims may be payable to customers and subcontractors under performance contracts. Some of these claims have proven unfounded, 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 September 30, 2008 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
June 30, 2009		 Fair value
June 30, 2009
Derivative financial instruments        
Assets        
Foreign currency derivatives including embedded derivatives 5,696 213 4,433 217
Interest rate derivatives* 71 21 39 13
Commodity derivatives 1,273 292 523 102
Total 7,040 526 4,995 332
         
Liabilities        
Foreign currency derivatives including embedded derivatives 6,804 368 3,117 141
Interest rate derivatives* 898 25 753 3
Commodity derivatives 823 152 426 60
Total 8,525 545 4,296 204
* 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 first 9 months ended June 30, 2009, the Group realized sales of €0.3 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 settled as of June 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 June 30, 2009, the ThyssenKrupp Group realized sales of €9.5 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 €1.3 million from the Heitkamp Baugruppe. The transactions were carried out at market conditions. As of June 30, 2009, the transactions with the Heitkamp & Thumann Group resulted in trade accounts receivable of €0.8 million and trade accounts payable of €1 thousand, the transactions with the Heitkamp Baugruppe resulted in trade accounts receivable of €4 thousand and trade accounts payable of €0.6 million.

In the first 9 months ended June 30, 2009, a Group subsidiary realized sales of €0.2 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 first 9 months ended June 30, 2008 and June 30, 2009 as well as for the 3rd quarter ended June 30, 2008 and June 30, 2009 is as follows:

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million €
Steel Stainless Technologies Elevator Services Corporate Consolidation Group

9 months ended June 30, 2008		                
External sales 9,611 5,083 9,133 3,556 12,198 69 0 39,650
Internal sales within the Group 1,144 643 75 3 504 14 (2,383) 0
Total sales 10,755 5,726 9,208 3,559 12,702 83 (2,383) 39,650
Income/(loss) before income taxes 1,138 86 566 301 515 (291) (18) 2,297

9 months ended June 30, 2009		                
External sales 6,916 2,905 8,013 3,962 8,823 61 0 30,680
Internal sales within the Group 686 286 47 2 345 21 (1,387) 0
Total sales 7,602 3,191 8,060 3,964 9,168 82 (1,387) 30,680
Income/(loss) before income taxes (41) (826) (128) 465 (171) (298) 12 (987)

3rd quarter ended June 30, 2008		                
External sales 3,494 1,711 3,317 1,210 4,431 18 0 14,181
Internal sales within the Group 408 222 40 1 172 5 (848) 0
Total sales 3,902 1,933 3,357 1,211 4,603 23 (848) 14,181
Income/(loss) before income taxes 389 93 201 92 248 (110) (4) 909

3rd quarter ended June 30, 2009		                
External sales 2,095 943 2,471 1,327 2,453 10 0 9,299
Internal sales within the Group 177 87 12 1 86 12 (375) 0
Total sales 2,272 1,030 2,483 1,328 2,539 22 (375) 9,299
Income/(loss) before income taxes (348) (204) (187) 163 (123) (87) 14 (772)

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 calculated 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 first 9 months ended June 30, 2009, the acquisition and firsttime consolidation of companies created an increase in non-current assets of €26 million (9 months ended June 30, 2008: €163 million). In the 3rd quarter ended June 30, 2009, these increases amounted to €1 million (3rd quarter ended June 30, 2008: €28 million).

The non-cash addition of assets under finance leases in the first 9 months ended June 30, 2009 amounted to €9 million (9 months ended June 30, 2008: €38 million) and in the 3rd quarter ended June 30, 2009 to €2 million (3rd quarter ended June 30, 2008: €7 million).

Non-cash financing activities

In the first 9 months ended June 30, 2009, the acquisition and firsttime consolidation of companies resulted in an increase in gross financial debt of €1 million (9 months ended June 30, 2008: €71 million. In the 3rd quarter ended June 30, 2009, these increases amounted to €0 million (3rd quarter ended June 30, 2008: €1 million).

No reportable events occurred.