Notes

Foreign currency result in EBIT I

At the end of 2007/beginning of 2008, we reorganised our US dollar hedging system. Options have been used since then, hedging a worst-case scenario for 2008 of about 1.51 USD/EUR including costs for a volume of US$ 932 million. During the second half of the year, however, we were able to participate in a strengthening US dollar. Following the trend on the foreign currency markets, in comparison to 2007, this resulted overall in a far weaker average exchange rate for the Potash and Magnesium Products business segment of about 1.46 USD/EUR (2007: hedging of US$ 475 million by means of double-barrier options at 1.33 USD/EUR).

Average exchange rates per quarter for the Potash and Magnesium Products business segment are as follows:

Potash and Magnesium Products Business Segment
	Q1/07	Q2/07	Q3/07	Q4/07	2007	Q1/08	Q2/08	Q3/08	Q4/08	2008
USD/EUR exchange rate after premiums	1.08	1.00	1.13	2.61	1.33	1.48	1.50	1.50	1.38	1.46
Average USD/EUR spot rate	1.31	1.35	1.37	1.45	1.37	1.50	1.56	1.50	1.31	1.47

 

USD/EUR hedge transactions currently extend until the beginning of 2010 and have a volume of about US$ 1,680 million and, in a worst-case scenario, fixed USD hedging rates of about 1.51 USD/EUR in 2009 and, currently, of about 1.50 USD/EUR in 2010.

Other operating income/expenses
€ million	Q4/08	Q4/07	12M/08	12M/07
Foreign currency result (from measurement and hedging)	2.6	(57.5)	19.3	(9.5)
Change in provisions	29.0	8.1	17.3	3.7
Other	(12.4)	4.1	(39.5)	12.0
Other operating income/expenses	19.2	(45.3)	(2.9)	6.2

 

Financial result
€ million	Q4/08	Q4/07	12M/08	12M/07
Interest income	22.6	1.4	25.1	6.7
Interest expense	7.1	(12.8)	(29.7)	(42.3)
- of which interest expense for pension provisions	(0.5)	(0.8)	(2.3)	(4.0)
- of which interest income/expense   for provisions for mining obligations	32.0	(3.7)	20.0	(13.9)
Interest income, net	29.7	(11.4)	(4.6)	(35.6)
Other financing income/costs	0.6	(0.3)	0.1	(0.3)
Income from the disposal of financial investments, net	–	0.4	11.5	0.6
Income from the measuring of financial investments, net	(1.2)	0.1	(0.2)	(0.4)
Other financial result	(0.6)	0.2	11.4	(0.1)
Financial result	29.1	(11.2)	6.8	(35.7)

 

The actuarial valuation of pension provisions is performed using the projected unit credit method in accordance with IAS 19. The following parameters were applied in computing pension provisions:

•  Trend in salary increases:	1,8 % (2007:1,8 %)
•  Trend in pension increases:	1,8 % (2007:1,8 %)
•  Discount factor:	5,3 % (2007:4,6 %)

The following parameters were taken into account in computing a large portion of the provisions for mining obligations:

•  Trend in price increases:	1,5 % (2007:1,5 %)
•  Discount factor:	5,6 % (2007:5,0 %)

 

Taxes on income
€ million	Q4/08	Q4/07	12M/08	12M/07
Corporate income tax	41.4	(8.8)	141.6	0.3
Trade tax on income	32.2	(8.2)	109.6	2.9
Foreign income taxes	(0.5)	3.3	15.1	16.2
Deferred taxes	15.4	(37.8)	61.4	(68.9)
Taxes on income	88.5	(51.5)	327.7	(49.5)

 

Non-cash deferred taxes result from tax loss carryforwards as well as other temporary tax-related measurement differences.