Notes

Seasonal factors

There are seasonal differences over the course of the year that affect sales of fertilizers and salt products. In the case of fertilizers, we generally attain our highest revenues in the first half of the year because of the use of fertilizers in Europe during the spring. This effect can either be enhanced or diminished by overseas sales. Sales of salt products – especially of de-icing salt – largely depend on winter weather conditions during the first and fourth quarters.

In the aggregate, both these effects mean that revenues and earnings in particular are greatest during the first half of the year.

Geographical breakdown of revenues

In addition to the chart showing the geographical breakdown of K+S Group revenues as shown in the Management Report, the following table shows revenues, volumes and average prices for our largest business segment, Potash and Magnesium Products:

Potash and Magnesium Products
Business Segment		 Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06  
Revenues* € million  312.2  306.4  261.4  317.2  1,197.2  336.0   
- Europe € million  219.4  204.1  166.3  181.4  771.2  226.2   
- Overseas € million  92.8  102.3  95.1  135.8  426.0  109.8   
                 
Volume million tons  2.11  2.06  1.77  1.92  7.86  2.11   
- Europe million tons  1.48  1.42  1.13  1.20  5.23  1.45   
- Overseas million tons  0.63 0.64 0.64 0.72 2.63  0.66  
                 
Average price per ton in €  148.0  148.7  147.7  165.2  152.3  159.2   
- Europe per ton in €  148.2  143.7  147.2  151.2  147.5  156.0   
- Overseas per ton in €  147.3  159.8  148.6  188.6  162.0  166.9   
                 

*Revenues include prices both inclusive and exclusive of freight costs and are based on the respective USD/EUR spot exchange rates in the case of overseas revenues. Hedging transactions have been concluded for most of these revenues, enabling us to achieve more attractive EUR revenues than indicated here. These effects are included in other operating income. The information on prices is to be understood solely as providing a rough indication.

Foreign currency result in EBIT I

Our exchange rates are generally hedged using double-barrier options. The terms of the derivatives employed vary and extend until 2008. It should be noted that hedging transactions are only effective as long as the USD/EUR spot rate remains within agreed barriers: If need be, these can be adjusted by paying additional premiums. For 2006, they currently lie between USD/EUR 1.12 and USD/EUR 1.35.

We have hedged a total of US$ 500 million for 2006 (2005: US$ 480 million). Average hedged rates per quarter for the Potash and Magnesium Products business segment are as follows:

Potash and Magnesium Products
Business Segment		 Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06 Q2/06e Q3/06e Q4/06e 2006e  
USD/EUR hedged rate after premiums 1.17 1.17 1.14 1.12 1.15 1.13 1.09 1.06 1.05 1.07  
Average USD/EUR spot rate 1.31 1.26 1.22 1.19 1.24 1.20 – – – –  
                       

*The values are projected ones as of Q2/06 and we assume that no follow-up hedging will be required.


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