notes to the group income statement and to the group balance sheet

1 sales revenues

Sales revenues include fees and charges billed to customers for goods and services – less any reductions to the proceeds, contract penalties and cash discounts.

The breakdown of sales revenues by business divisions and regions is shown in the Group segment reporting (cf. page 102 and 155).

In connection with construction contracts, sales revenues in the amount of € 459.7 million were recognized in the reporting year (compared to € 661.2 million in the prior year) according to the percentage of completion method.

2 sales, selling expenses, research & development and general administration costs

The following is a breakdown of the cost of sales, selling expenses, research and development expenses and general and administrative expenses:

Cost of sales

Selling expenses

Research and development expenses

General and administrative expenses

Total

2008

2009

2008

2009

2008

2009

2008

2009

2008

2009

Cost of materials

702.1

476.3

2.0

1.4

0.9

9.4

1.3

0.2

706.3

487.3

Personnel expense

248.2

218.1

47.2

45.7

23.5

20.4

39.1

35.6

358.0

319.8

Amortization

14.0

13.5

0.7

0.8

5.7

3.8

5.6

5.1

26.0

23.2

Other expenses
and income


41.0


34.9


41.8


36.9


3.6


2.0


35.9


36.8


122.3


110.6

total

1,005.3

742.8

91.7

84.8

33.7

35.6

81.9

77.7

1,212.6

940.9

Personnel costs are directly allocated to the functional areas based on the cost centers, which results in the following figure:

2008

2009

Wages and salaries

301.0

266.3

Social security payments and contributions for retirement benefits
and provident fund

57.0


53.5

(of that for retirement benefits)

(2.7)

(3.2)

358.0

319.8

In 2009, the German companies within the kuka Group received subsidies as part of short-time work from the German Federal Labor Office totaling € 0.5 million, which were deducted directly from personnel expenses.

Annual average employed and employed at the balance sheet date by the kuka Group:

Annual average

Balance sheet date

Total
2008

Total
2009

Total
2008

Total
2009

of that,
Germany

of that,
abroad

Manufacturing

4,422

4,425

4,580

4,217

2,298

1,919

Sales

559

578

580

564

328

236

Administration

543

531

534

499

270

229

Research and development

291

277

287

271

264

7

5,815

5,811

5,981

5,551

3,160

2,391

Trainees / apprentices

170

169

190

193

190

3

total

5,985

5,980

6,171

5,744

3,350

2,394

3 other operating income and expenses

These line items capture income and expenses that are not allocated to the functional categories Cost of sales, Selling expenses, Research and development or General and administrative expenses or otherwise reported separately.

2008

2009

Income from foreign currency transactions

21.4

20.3

Reimbursements from damages claims

0.8

0.1

Income from the disposal of assets

0.3

0.0

Other income

5.6

4.7

other operating income

28.1

25.1

Expenses for foreign currency transactions

23.3

19.9

Donations

0.3

0.2

Other taxes

2.6

3.0

Other expenses

3.4

16.1

other operating expense

29.6

39.2

other operating income and expenses

– 1.5

– 14.1

A reason for the increase in other expenses in the other operating expenses is the sale of the location in Tours / France in particular. An appropriate allocation to the individual functional areas would not have been possible without impractical expenditures.

4 write-off of financial assets

kp Köln GmbH Konstruktion und Planung, Cologne was founded in the fourth quarter of 2009. Within the scope of a transfer of operations, 24 employees went from kuka Systems GmbH, Augsburg to the new company, which was funded with equity and had acquired the operation. On December 31, 2009 the company was sold as part of a management buy-out. For this reason an amount of € 0.4 million was written off.

5 interest income / expense

2008

2009

Other interest and similar income

9.7

10.3

Interest and similar expenses

14.7

21.4

net interest income / expense

– 5.0

– 11.1

Other interest and similar income includes an amount of € 0.2 million (prior year: € 0.2 million) for expected returns on pension plan assets. The remaining interest income represents returns on bank deposits as well as from finance leasing in connection with the financing of a factory building for the production of bodies for the Jeep Wrangler in Toledo / usa (cf. item 12).

Interest and similar expenses include the interest portion of additions to the provision for pensions in the amount of € 4.2 million (prior year: € 4.0 million). In addition, this item includes lc and commitment fees, refinancing costs and interest on loans received. The convertible bond added € 5.1 million (prior year: € 4.9 million) to the net interest expense for the financial year. Costs related to the violation of credit terms from the syndicated loan agreement and the conclusion of a new financing agreement totaling € 3.1 million have also been included in the interest cost (cf. item 28 Syndicated loan).

6 taxes on income / deferred taxes

Tax expense

Income tax expense breaks down by origin as follows:

2008

2009

Current taxes

5.2

3.0

(of that relating to other periods)

(– 4.0)

(– 3.9)

Deferred taxes

from temporary differences

12.5

6.5

from loss carry-forwards

– 1.3

1.9

16.4

11.4

Of the current expenses for tax on earnings, € – 2.3 million is attributable to domestic expenditure compared to € 1.4 million in the previous year, whereas € 5.3 million is attributable to foreign expenditure compared to € 3.8 million last year.

Deferred tax expenses of € 6.0 million are attributable to domestic operations (prior year: € 2.1 million); € 2.4 million to foreign (prior year: € 9.1 million).

The expected tax income based on earnings before taxes and the applicable tax rate for the kuka companies in Germany of 30.0 percent (prior year: 30.0 percent) leads to the following actual tax expense:

2008

2009

earnings before tax

47.0

– 64.3

expected tax expense

14.1

– 19.3

Tax rate-related differences

3.1

1.4

Tax reductions due to tax-exempt income

– 1.2

– 1.0

Tax increases due to non-deductible expenses

2.8

3.5

Tax credits received (–) for prior years

– 4.8

– 3.9

Changes to allowance on deferred taxes

2.3

32.1

Changes in tax rates due to the German Business Tax Reform in Germany

0.0

0.1

Other differences

0.1

– 1.5

taxes on income (actual tax expense)

16.4

11.4

The applicable tax rate in Germany comprises corporate income tax (Körperschaftsteuer) of 15.0 percent, earned income tax (Gewerbesteuer) based on a uniform tax rate of 14.2 percent and the reunification tax (Solidaritätszuschlag) of 5.5 percent.

In principle, deferred taxes were recognized on the basis of the applicable tax rate for each company in question.

In addition to an existing corporate income tax credit, an amount equal to € 10.3 million (prior year: € 11.6 million) results after discounting as a non-current tax receivable effective December 31, 2009, and an amount of € 1.8 million (prior year: € 1.8 million) as a current tax receivable.

There are no tax credits for which deferred taxes would need to be balanced.

Tax revenues of € 3.9 million resulted in the current financial year largely due to domestic adjustment declarations for the years 2002 to 2006 (prior year: € 4.0 million).

Deferred tax assets and liabilities

The value of deferred tax assets and liabilities due to temporary differences and tax loss carry-forwards in the Group is associated with the following items:

Deferred taxes assets

Deferred taxes liabilities

Dec. 31, 2008

Dec. 31, 2009

Dec. 31, 2008

Dec. 31, 2009

Non-current assets

16.7

2.7

39.1

25.6

Current assets

28.5

29.2

43.9

40.5

Provisions

14.1

19.8

0.0

0.2

Liabilities

17.1

12.5

3.2

7.9

Subtotal

76.4

64.2

86.2

74.2

Balancing item

– 73.1

– 55.4

– 73.1

– 55.4

Valuation allowance

– 2.0

– 6.4

0.0

0.0

Deferred taxes on temporary differences

1.3

2.4

13.1

18.8

Deferred taxes on tax loss carry-forwards

25.3

23.4

0.0

0.0

total

26.6

25.8

13.1

18.8

(thereof: from items recognized in equity)

(5.4)

(4.0)

Valuation allowances to the carrying amount of deferred tax assets are recognized if the realization of the expected benefit of the deferred taxes is not sufficiently probable. The estimates made are subject to changes over time, which may result in the reversal of valuation allowance in subsequent periods.

The recognized values on the balance sheet are written off in the event that the tax benefits that they represent were no longer expected to be realized.

From the loss carry-forward of € 182.2 million (prior year: € 179.3 million), amounts totaling € 104.8 million (prior year: € 85.9 million) are not considered in the accounting of deferred taxes.

In accordance with ias 12, deferred tax items must be recognized for the difference between the pro-rata equity of a subsidiary recognized on the Group balance sheet on the tax balance sheet of the parent company (so-called outside basis differences) if it is likely that this difference amount will be realized. Since both kuka Aktiengesellschaft as well as the subsidiaries in question are corporations, these differences are predominantly tax exempt under § 8b kstg upon realization and thus permanent in nature. According to ias 12.39, no deferred tax liability should be recognized even for temporary differences (e. g., those resulting from the 5 percent flat-rate allocation under § 8b kstg) if it is not likely, given control by the Parent company, that these differences will reverse in the foreseeable future. Since no such reversal is expected, no deferred tax items had to be recognized on the balance sheet for this purpose. There are outside basis differences in the amount of € 0.6 million.

The change to the deferred tax liabilities of € 5.7 million (prior year: € 8.4 million) is largely attributable to non-current assets.

Overall, the change to deferred tax assets and liabilities of € 6.5 million (prior year: € 12.9 million) came from amounts affecting net income totaling € 8.4 million (prior year: € 11.2 million) as well as amounts not affecting net income totaling € 1.4 million (prior year: € 1.7 million) including currency effects.

Tax losses and tax loss carry-forwards

To the extent that loss carry-forwards have not been written off, it is expected in the planning period that this tax-reducing potential will be utilized via taxable income, which is likely based on the expectations of the Group companies.

Due to the regulations stipulated in § 8c kstg, tax loss carry-forwards in connection with the largest acquisition of participating interests in kuka ag in 2009 are endangered in Germany and are therefore not subject to accounting for precautionary reasons.

As at December 31, 2009, the loss carry-forwards not yet utilized amounted to € 182.2 million (prior year: € 179.3 million). German companies account for € 119.2 million of this, and the amounts do not expire. In the usa, loss carry-forwards amount to € 12.8 million and will expire in 2011.

In addition, loss carry-forwards in the total amount also include € 36.0 million for France, € 2.9 million for China, € 3.1 million for Spain and € 2.7 million for Japan. There are loss carry-forwards totaling € 5.5 million in other countries as well. In principle, the tax loss carry-forwards outside of Germany also do not expire. Otherwise, the tax loss carry-forwards in Japan of € 1.1 million and € 1.6 million are utilizable until 2015 and 2016, respectively.

7 earnings per share

Undiluted / diluted earnings per share break down as follows:

2008

2009

Net loss / -income attributable to shareholders of kuka ag

30.5

– 75.7

Weighted average number of shares outstanding

25,819,822

25,671,659

earnings per share (in €)

1.18

– 2.95

According to ias 33, undiluted earnings per share were calculated on the basis of Group consolidated earnings after taxes and the weighted average number of shares outstanding for the year.

As a result of the share buyback program in 2008, the average number of shares outstanding fell from 26.6 million to 25.8 million. On December 31, 2008 there were 25.3 million shares outstanding. The capital increase in November 2009 increased the average number of shares outstanding to 25.7 million.

The issuance of the convertible bond on May 9, 2006 could result in a future dilution effect since contingent capital has been increased by a maximum of currently 2,718,322 shares. Since the average share price in 2009 remained below the conversion price so that a conversion would have been unfavorable for the bond holders, there was no diluting effect in 2009.

8 fixed assets

schedule of changes in fixed assets 2009

Acquisition / Manufacturing Costs

Status
as at

Jan.1,2009

Exchange
rate
differences
Changes to
scope of
consoli-
dation
*

Additions

Disposals

Reclassi-
fications

Status
as at

Dec.31,2009

i. intangible assets

1. Rights and similar assets

34,905

– 42

347

7,221

539

192

42,084

2. Self-developed software and other development costs


18,122


0


0


2,482


2,540


0


18,064

3. Goodwill

56,633

0

0

0

0

0

56,633

4. Advances paid

12

0

0

1,696

0

– 43

1,665

109,672

– 42

347

11,399

3,079

149

118,446

ii. tangible assets

1. Land, similar rights and buildings including
buildings on land owned
by third parties




115,235




– 336




0




1,412




2,924




358




113,745

2. Technical plant
and equipment


82,983


44


436


5,680


3,379


3,694


89,458

3. Other equipment, factory and office equipment


70,188


– 17


0


5,336


4,489


680


71,698

4. Advances paid and construction in progress


3,214


160


0


3,326


17


– 4,881


1,802

271,620

– 149

436

15,754

10,809

– 149

276,703

iii. financial investments

1. Participations in affiliated companies


4,697


0


0


0


113


0


4,584

2. Participations in associated companies


0


0


0


0


0


0


0

3. Other participations

161

0

0

1,121

404

0

878

6. Other loans

514

– 15

0

0

483

0

16

5,372

– 15

0

1,121

1,000

0

5,478

386,664

– 206

783

28,274

14,888

0

400,627


The following amount has been capitalized under item technical plant and equipment in consequence of finance leases in which kuka group acts as the lessee:

technical plant
and equipment


3,846




684




4,530




Accumulated Depreciation

Net carrying amount

Status
as at

Jan. 1, 2009

Exchange

rate

differences

Changes to

scope of

consolidation

Additions

Disposals

Reclassi-
fications


Status
as at

Dec.31,2009


Status
as at

Dec.31,2009

i. intangible assets


1. Rights and similar assets

25,248

– 82

0

4,634

531

– 9

29,260

12,824

2. Self-developed software and other development costs


3,228


0


0


2,286


2,540


0


2,974


15,090

3. Goodwill

6,996

0

0

0

0

0

6,996

49,637

4. Advances paid

0

0

0

0

0

0

0

1,665

35,472

– 82

0

6,920

3,071

– 9

39,230

79,216

ii. tangible assets

1. Land, similar rights and buildings including
buildings on land owned
by third parties




61,093




– 44




0




3,372




1,658




4




62,767




50,978

2. Technical plant
and equipment


65,074


25


0


6,196


2,476


0


68,819


20,639

3. Other equipment, factory and office equipment


52,391


–31


0


6,647


4,146


5


54,866


16,832

4. Advances paid and construction in progress


0


0


0


0


0


0


0


1,802

178,558

– 50

0

16,215

8,280

9

186,452

90,251

iii. financial investments

1. Participations in affiliated companies


4,519


0


0


0


10


0


4,509


75

2. Participations in associated companies


0


0


0


0


0


0


0


0

3. Other participations

34

0

0

0

34

0

0

878

6. Other loans

453

– 15

0

0

434

0

4

12

5,006

– 15

0

0

478

0

4,513

965

219,036

– 147

0

23,135

11,829

0

230,195

170,432


The following amount has been capitalized under item technical plant and equipment in consequence of finance leases in which kuka group acts as the lessee:

technical plant
and equipment


2,667




396




3,063


1,467

* relates to the acquisition in the financial year of kuka s-base s. r. o., Roznov p. R. / Czech Republic

schedule of changes in fixed assets 2008

Acquisition / Manufacturing Costs

Status
as at

Jan.1,2008

Exchange

rate

differences

Changes to

scope of

consolidation

Additions

Disposals

Reclassi-
fications


Status
as at

Dec.31,2008

i. intangible assets

1. Rights and similar assets

31,397

249

0

4,072

883

70

34,905

2. Self-developed software and other development costs


14,509


0


0


9,457


5,844


0


18,122

3. Goodwill

56,633

0

0

0

0

0

56,633

4. Advances paid

36

2

0

44

0

– 70

12

102,575

251

0

13,573

6,727

0

109,672

ii. tangible assets

1. Land, similar rights and buildings including
buildings on land owned
by third parties




113,796




500




0




2,785




2,302




456




115,235

2. Technical plant
and equipment


80,241


134


73


3,272


2,075


1,338


82,983

3. Other equipment, factory and office equipment


67,787


75


80


8,577


6,224


– 107


70,188

4. Advances paid and construction in progress


976


32


0


4,298


405


– 1,687


3,214

262,800

741

153

18,932

11,006

0

271,620

iii. financial investments

1. Participations in affiliated companies


5,651


0


– 953


0


1


0


4,697

2. Participations in associated companies


36


0


0


0


36


0


0

3. Other participations

306

0

0

0

145

0

161

6. Other loans

889

25

0

0

400

0

514

6,882

25

– 953

0

582

0

5,372

372,257

1,017

– 800

32,505

18,315

0

386,664


The following amount has been capitalized under item technical plant and equipment in consequence of finance leases in which kuka group acts as the lessee:

technical plant
and equipment


3,450


396






3,846




Accumulated Depreciation

Net carrying amount

Status
as at

Jan.1,2008

Exchange

rate

differences

Changes to

scope of

consolidation

Additions

Disposals

Reclassi-
fications


Status
as at

Dec.31,2008


Status
as at

Dec.31,2008

i. intangible assets


1. Rights and similar assets

21,422

222

0

4,484

880

0

25,248

9,657

2. Self-developed software and other development costs


4,660



0


4,412


5,844


0


3,228


14,894

3. Goodwill

6,996

0

0

0

0

6,996

49,637

4. Advances paid

0

0

0

0

0

0

12

33,078

222

0

8,896

6,724

0

35,472

74,200

ii. tangible assets

1. Land, similar rights and buildings including
buildings on land owned
by third parties




59,264




70




0




3,346




1,589




2




61,093




54,142

2. Technical plant
and equipment


60,038


50


13


6,698


2,075


350


65,074


17,909

3. Other equipment, factory and office equipment


51,568


129


31


7,035


6,022


– 350


52,391


17,797

4. Advances paid and construction in progress


2


0


0


0


0


– 2


0


3,214

170,872

249

44

17,079

9,686

0

178,558

93,062

iii. financial investments

1. Participations in affiliated companies


4,753


0


– 234


0


0


0


4,519


178

2. Participations in associated companies


0


0


0


0


0


0


0


0

3. Other participations

34

0

0

0

0

0

34

127

6. Other loans

428

25

0

0

0

0

453

61

5,215

25

– 234

0

0

0

5,006

366

209,165

496

– 190

25,975

16,410

0

219,036

167,628


The following amount has been capitalized under item technical plant and equipment in consequence of finance leases in which kuka group acts as the lessee:

technical plant
and equipment


2,046


249



372




2,667


1,179

9 intangible assets

Changes to the individual items under intangible assets are disclosed in the schedule of changes in fixed assets. In the 2009 and 2008 financial years, no impairment losses were recognized on assets.

Goodwill

Recognized goodwill in the amount of € 49.6 million compares to € 49.6 million a year earlier and breaks down as follows:

Dec.31,2008

Dec.31,2009

Body-in-White

40.7

40.7

Assembly & Test

4.7

4.7

Robotics Automotive

3.8

3.8

Others / less than € 1 million

0.4

0.4

49.6

49.6

Individual profit centers represent the smallest cash-generating unit, making them the basis for the impairment test of goodwill. The customer service business in the Robotics division is proportionately allocated to the profit centers “Automotive” and “General Industry”.

The following discount rates for wacc (Weighted average cost of capital) before taxes are used in the three year detailed planning period for the goodwill impairment tests for the 2009 financial year:

2008

2009

Planning period

2009–2011

2010–2012

Systems

9.5

9.4

Robotics

9.8

9.3

In this context, the cost of equity capital was determined on the basis of segment-specific peer groups. After the detailed planning period the future development of the generated cash flows is uniformly continued. As in the previous year, a growth rate of 0.5 percent is applied as perpetuity.

Material components used in determining wacc are the market risk premium of 5.0 percent (prior year: 5.2 percent) and the risk-free interest rate of 4.1 percent (prior year: 4.7 percent). The adjusted beta factor for the Systems segment was 1.016 (prior year: 1.072); and 0.974 (prior year: 1.142) for the Robotics segment.

The cost of borrowed capital was derived from the refinancing costs of kuka Aktiengesellschaft.

The ratios for the cost of equity capital and the cost of borrowed capital that were thus determined were based on the respective peer group. The capital structure was determined based on kuka Aktiengesellschaft. The expected average tax rate of the peer group of 33 percent (prior year: 35 percent) was chosen as the tax rate.

A 1 percent higher wacc would not influence the impairment of goodwill – just like a reduction in sales revenues over the entire planning period by 10 percent with a correspondingly lower cash flow.

Self-developed software and other product development costs

According to ias 38, self-developed software and other development costs must also be capitalized. For the purpose of such capitalization, kuka uses a definition of the costs of production which, in accordance with ias, includes attributable direct costs as well as an appropriate allocation for overheads and depreciation.

Development costs are only recognized as assets in the kuka Group by kuka Roboter GmbH. The company is working on several projects involving performance and guidance software for robots as well as new applications in the area of medical technology. Total expenditures for research and development for the reporting period were € 35.6 million compared to € 33.7 million in 2008.

Development costs with a carrying amount of € 15.1 million from the years 2006 to 2009 compared to € 14.9 million the year prior have been capitalized according to ias 38. Net additions for 2009 totaled € 0.2 million (prior year: € 5.0 million). Amortization is applied using a unit-based or straight-line method over the respective expected useful life of three years or less.

10 tangible assets

The breakdown of the assets aggregated in the balance sheet items of the tangible assets, as well as changes over the reporting year and in 2008, are shown in section 8 of the annual report. The major focus of capital expenditures in the financial year is described in the management report.

Subsidies in the amount of € 0.2 million (prior year: € 0.1 million) were deducted from the cost of purchase or cost of production for tangible assets. Government grants were received, principally for research and development projects, totaling € 2.2 million (prior year: € 2.8 million) and recognized as directly income-relevant. There were no contingently repayable grants as of the balance sheet date.

The amounts for depreciation, amortization and impairment losses are as follows:

2008

2009

Depreciation of tangible assets

scheduled

17.1

16.1

non-scheduled

0.0

0.1

17.1

16.2

Impairment losses are largely related to the discontinuation of the kuka Robotics Hungária Ipari Kft., Taksony / Hungary site.

The finance leases for technical plant and equipment have interest rates of 2.25 percent p. a.. The following table shows the breakdown of future payments due for finance lease agreements as well as the present values for future leasing payments. The corresponding amounts are recognized under other liabilities.

Dec.31,2008
Total

Dec.31,2009
Total

Up to one year

between one
and five years

Minimum lease payments

0.8

0.6

0.2

0.4

Present value

0.6

0.5

0.2

0.3

commitments from leases and rental agreements

Dec.31,2008

Dec.31,2009

up to one year

6.3

5.7

between one and five years

20.2

16.2

more than five years

11.5

7.2

38.0

29.1

Commitments in connection with leases for passenger cars, office and factory buildings include liabilities from leases and rental agreements in connection with operating leases.

Total rental expenses for the fiscal year were € 13.7 million compared to € 16.6 million in the prior year; rental income totaled € 0.4 million compared to € 0.4 million last year.

11 financial investments

The addition to financial investments primarily comprises the acquisition of a 4.9 percent share in Bright Automotive Inc., Anderson / usa for usd 1.0 million.

12 finance lease

kuka Toledo Production Operations llc., Toledo, Ohio / usa, which was consolidated for the first time in fiscal 2005, manufactures Jeep Wrangler bodies under the terms of a pay-on-production contract with Chrysler. The first unpainted car bodies associated with the project were delivered to Chrysler in July 2006. The project was financed through an operating lease agreement with a local corporation and a consortium of financing banks. kuka Aktiengesellschaft reached an agreement with Chrysler llc and the financing banks last year regarding the prepayment of the financing of the manufacturing facility of its American subsidiary, kuka Toledo Production Operations llc (ktpo), which makes Chrysler’s Jeep Wrangler car bodies. The financing to take over legal ownership of the buildings and production systems totals € 77.1 million, and was prepaid using the kuka Group’s existing net liquid assets. As a result, this segment’s capital employed has risen significantly.

Because of the existing agreement to supply car bodies to Chrysler, the acquisition of the production system assets was not included on the balance sheet as an asset acquisition, but instead categorized as a finance lease in accordance with ifric 4 / ias 17 guidelines and booked as a receivable from finance leases. Leasing receivables of € 75.8 million (prior year: € 82.0 million) and a current leasing receivable of € 3.5 million (prior year: € 3.3 million) exist as of the balance sheet date. Sales revenues shown on ktpo’s balance sheet will thus be reduced by the fictitious leasing rate. The interest component included in the fictitious leasing rate is booked under interest result, while the repayment component of this repayment reduces the receivables as per schedule.

Due to the arrangement of the dealing as a full payout lease agreement future minimum lease payments correspond with the gross investment. The following table shows the transition to the present value of the outstanding minimum lease payments:

2008

2009

Future minimum lease payments / Finance lease gross investments

146.9

130.6

of that not later than one year

(10.8)

(10.4)

of that later than one year and not later than five years

(43.3)

(41.8)

of that later than five years

(92.8)

(78.4)

Unrealized financial income

– 61.6

– 51.3

present value of outstanding minimum lease payments

85.3

79.3

of that not later than one year

(3.3)

(3.5)

of that later than one year and not later than five years

(16.5)

(17.4)

of that later than five years

(65.5)

(58.4)

13 inventories

Dec.31,2008

Dec.31,2009

Raw materials and supplies

50.4

33.2

Work in process

67.5

51.2

Finished goods

25.0

13.0

Advances paid

8.6

6.4

151.5

103.8

The carrying amount of inventories written off in the amount of € 64.5 million compare with € 92.4 million in 2008 and have been recognized at net realizable value. The write-down, relative to gross value, was € 27.9 million versus € 30.3 million the year prior.

14 receivables

Dec.31,2008

Dec.31,2009

Total

of that up
to one year

of that
more than
one year

Total

of that up
to one year

of that
more than
one year

Trade receivables

164.8

164.4

0.4

114.5

114.2

0.3

Receivables from construction contracts

167.1

167.1

0.0

124.3

124.3

0.0

Receivables from affiliated companies

0.4

0.4

0.0

0.0

0.0

0.0

332.3

331.9

0.4

238.8

238.5

0.3

The following table breaks down receivables by age and recoverability:

Net carrying amount

neither impaired nor past due as at the balance sheet date

net
carrying amount of impaired trade
receivables

impaired trade receivables before recording of impairment losses

impair-
ment
loss

Total of
past due,
unimpaired receivables

not impaired as of the
balance sheet date but in arrears by

less than

30 days

30 to 6o days

61 to 90 days

91 to 180 days

more

than

180 days

Trade receivables


114.5


81.4


4.5


10.7


– 6.2


28.6


10.3


5.2


4.1


3.3


5.7

Receivables from
affiliated companies




0.0




0.0




0.0




0.0




0.0




0.0




0.0




0.0




0.0




0.0




0.0

total

114.5

81.4

4.5

10.7

– 6.2

28.6

10.3

5.2

4.1

3.3

5.7

Net carrying amount

neither impaired nor past due as at the balance sheet date

net
carrying amount of impaired trade
receivables

impaired trade receivables before recording of impairment losses

impairment loss

Total of
past due,
unimpaired receivables

not impaired as of the
balance sheet date but in arrears by

less than

30 days

30 to 6o days

61 to 90 days

91 to 180 days

more

than

180 days

Trade receivables


164.8


110.7


2.7


9.5


– 6.8


51.4


22.1


10.8


5.4


5.9


7.2

Receivables from
affiliated companies




0.4




0.4




0.0




0.0




0.0




0.0




0.0




0.0




0.0




0.0



0.0

total

165.2

111.1

2.7

9.5

– 6.8

51.4

22.1

10.8

5.4

5.9

7.2

With respect to existing receivables that were neither impaired nor in arrears, there were no indications as of the balance sheet date that the obligors would not meet their payment obligations. Receivables from construction contracts have no specific due date and are not impaired.

Trade receivables

Bad debt allowances on trade receivables developed as follows:

2008

2009

Impairment losses / Status as at Jan. 1

7.4

6.8

Additions (Expenses related to impairment losses)

2.8

2.1

Use

– 2.1

– 1.0

Reversals

– 1.3

– 1.7

impairment losses / status as at dec. 31

6.8

6.2

The total amount of additions of € 2.1 million (2008: € 2.8 million) breaks down into additions for specific bad debt allowances of € 1.7 million (2008: € 2.1 million) and lump-sum bad debt allowances in the amount of € 0.4 million (2008: € 0.7 million). Reversals reflect € 1.2 million (2008: € 1.0 million) in specific bad debt allowances that were not required to be used as well as € 0.5 million (2008: € 0.3 million) in lump sum bad debt allowances that were not required to be used.

Receivables and liabilities from construction contracts

For receivables from construction contracts, advances received have been offset against costs incurred in connection with the contract, including contributions to earnings on a per contract basis. As at the balance sheet date, costs incurred and earnings recognized in connection with long-term contracts in the amount of € 544.6 million were offset against advances received in the amount of € 420.3 million. In 2008 these figures were € 726.4 million and € 559.3 million respectively. This resulted in receivables of € 124.3 million compared to € 167.1 million the year prior and liabilities of € 54.6 million versus € 54.6 million a year earlier. Advances received in connection with long-term contracts exceed the costs incurred and the earnings portion.

Receivables from construction contracts totaling € 17.4 million had to be written off in the past financial year due to the insolvency of a buyer.

15 other assets, prepaid expenses and deferred charges

Dec.31,2008

Dec.31,2009

Total

of that up
to one year

of that
more than
one year

Total

of that up
to one year

of that
more than
one year

Other assets, prepaid expenses
and deferred charges


26.5


16.7


9.8


26.7


17.1


9.6

The following table shows the financial instruments recognized under other assets as outlined in ifrs 7 according to age and impairment:

Net
carrying
amount

of which: neither impaired nor past due as
at the balance sheet date

net
carrying amount of impaired trade
receivables

impaired trade receivables before recording of impairment losses

impair-
ment
loss

Total of
past due,
unimpaired receivables


of which: not impaired as of the
balance sheet date but in arrears by

less than

30 days

30 to 6o days

61 to 90 days

91 to 180 days

more

than

180 days

Dec.31,2008

19.9

19.4

0.5

2.9

– 2.4

0.0

0.0

0.0

0.0

0.0

0.0

Dec.31,2009

16.8

16.7

0.1

3.8

– 3.7

0.0

0.0

0.0

0.0

0.0

0.0

With respect to existing other assets that were neither impaired nor in default, there were no indications as of the balance sheet date that the obligors would not meet their payment obligations.

Impairment losses on other assets developed as follows:

2008

2009

Impairment losses / Status as at Jan. 1

2.7

2.4

Additions (Expenses related to impairment losses)

0.1

1.9

Use

0.0

0.0

Reversals

– 0.4

– 0.6

impairment losses / status as at dec. 31

2.4

3.7

16 cash and cash equivalents

This item comprises all funds recognized on the balance sheet as cash and cash equivalents, i. e. cash in hand, checks and cash balances with financial institutions, provided that they are available within three months.

The kuka Group maintains bank balances exclusively at financial institutions of sound credit worthiness. Furthermore, funds to be invested are distributed across several financial institutions in order to diversify risk.

17 equity

Changes in equity, including changes without effect on profit or loss are disclosed in the Development of Group equity and in the Group Income Statement / Statement of Comprehensive Income.

For more information on equity see the notes in the management report under “Disclosure as per Article 315 para. 4 hgb” and the “Explanatory report”.

18 subscribed capital

In November 2009 the share capital of kuka Aktiengesellschaft was raised under exclusion of shareholder subscription rights by means of a partial utilization of authorized capital by an amount of € 6,915,974.00 to € 76,075,974.00 (prior year: € 69,160,000.00) in exchange for cash contributions.

2,659,990 bearer shares were issued at the issue price of € 2.60 per share and at the offer price of € 10.50 per share.

The share capital is thus subclassified into 29,259,990 (prior year: 26,600,000) no-par value bearer shares. Each share is equal to one vote.

The difference between offer price and issue price is reported in the capital reserve, taking into account commissions and taxes.

19 capital reserve

The capital reserve applies to kuka ag. The change compared to last year resulted from the capital increase in November 2009. The resulting transaction costs of € 763,357.89 of the issue volume were deducted from the capital reserve without effect on profit or loss. Taxes of € 229,007.36 were accounted for.

20 treasury shares

As authorized by the Annual General Meeting of May 16, 2007, treasury shares were bought back on the open market in the period from March 25, 2008 to August 29, 2008. Under the terms of this authorization, kuka Aktiengesellschaft bought back a total of 1,327,340 kuka shares valued at € 27,898,339.58. Together with the capital increase in November 2009 there were 27,932,650 shares outstanding as of December 31, 2009.

21 revenue reserves

The revenue reserves include:

  • The accumulated retained earnings of kuka Aktiengesellschaft and its consolidated subsidiaries
  • Consolidation and currency translation effects
  • Actuarial gains and losses included in provisions for pensions and the associated deferred taxes.
  • Obligations as part of an employee stock ownership program for kuka – employees

Deferred taxes totaling € 4.0 million (prior year: € 5.4 million) from transactions not recognized in profit or loss are included in equity. € 3.4 million (prior year: € 3.4 million) is attributable to the convertible bond and € 0.6 million (prior year: € 2.0 million) to actuarial gains and losses from pensions.

22 minority interests

This item primarily comprises the minority stake held by third parties in kuka Enco Werkzeugbau spol. s. r. o., Dubnica / Slovakia. The changes to this item are detailed in the Development of Group equity.

23 management of capital

The primary goal of managing capital for the kuka Group is to support ongoing business operations by providing adequate financial resources and increasing enterprise value.

This requires sufficient shareholders’ equity (Leverage ratio as the key indicator), liquidity (Net liquidity as the key indicator), and a sufficient return on capital employed (roce as the key indicator). Management and controlling of the business divisions therefore takes place based on these key indicators.

2008

2009

Equity

in € millions

213.5

160.8

/ Total quity

in € millions

865.5

726.2

equity ratio

%

24.7

22.1

ebit

in € millions

52.0

– 52.9

/ Capital Employed (annual average)

in € millions

242.3

317.5

roce

%

21.5

– 16.7

Cash and cash equivalents

in € millions

41.3

61.2

– non-current finance liabilities

in € millions

– 61.3

– 63.8

– current finance liabilities

in € millions

– 33.6

– 45.9

net cash position / net debt

%

– 53.6

– 48.5

24 pension provisions and similar obligations

Actuarial gains and losses are recognized directly in equity at the time in which they occur (Option 3 in accordance with ias 19.93A).

Accordingly, provisions for pensions developed as follows in the financial year 2009:

Status as at Jan. 1

Changes to the scope of consolidation, exchange rate differences, Other

Consumption

Reduction

Additions

Actuarial gains
and losses
(directly in equity)

Status as at Dec. 31

2008

73.9

0.0

5.9

0.0

3.9

– 3.4

68.5

2009

68.5

– 0.2

6.2

0.7

4.4

4.2

70.0

Pension provisions include liabilities from vested benefits and from current benefits paid to vested and former employees of the kuka Group as well as their surviving dependents. Depending on the legal, economic and tax situation in each of the countries concerned, various such retirement benefit systems are in place, that are, as a rule, based on employees’ length of service and compensation.

Since they are in the nature of a retirement benefit, liabilities of the us Group company kuka Assembly and Test Corp. for post-employment medical benefits are also disclosed under pension provisions according to ias 19. Of the total provisions and accruals, these obligations similar to pensions, calculated according to the rules of ias 19, represent € 0.6 million compared to € 1.0 million in 2008. Liabilities for health insurance coverage in the current financial year generated a gain of € 0.4 million compared to a gain of € 0.4 million as a result of plan curtailments the year prior. The possible effects of an increase / reduction of 1 percent of the expected cost development in the field of medicine are under € 50,000.

Company retirement benefit coverage in the Group is provided through both defined contribution and defined benefit plans.

For the defined contribution plans, the company pays contributions to a public or private pension insurance carrier. Upon payment of the contributions, the company has no further obligations. Total payments for pensions under defined contribution plans in the amount of € 19.2 million compared to € 21.0 million in 2008 are disclosed as expenses in the year in question.

Under defined benefit plans, the company incurs an obligation to provide the benefits promised by the plan to current and former employees.

The only remaining funded benefit plans are in effect in the usa.

The amount of pension obligations (defined benefit obligation) was calculated by actuarial methods for which estimates are unavoidable. In addition to assumptions related to life expectancy, this involves assumptions detailed below, which are dependent on the economic environment for each country in question:

Germany

usa

Others

Dec. 31

2008

2009

2008

2009

2008

2009


Demographic assumptions


rt
2005 G


rt
2005 G


rp
2000


rp
2000

ips55 (I);
tv
88 /90 (F)

ips55 (I);
tv
88 /90 (F)

Discount factor

6.25 %

5.40 %

6.00 %

5.75%

5.60 %

5.60 %

Expected rate of return on assets

n / a

n / a

8.00 %

8.00%

n / a

n / a

Wage dynamics

0.00 – 2.50 %

0.00 – 2.50 %

n / a

n / a

0.00 – 1.50 %

0.00 – 1.50 %

Pension dynamics

2.00 – 2.50 %

2.00 – 2.50 %

n / a

n / a

0.00 – 2.00 %

0.00 – 2.00 %

Changes in cost of
medical services


n / a


n / a


5.00 – 8.00 %


5.00 – 7.00 %


n / a


n / a

The discounting factor is determined on the financial reporting date based on the returns from high-quality, fixed-rate corporate bonds.

Wage dynamics encompass future increases in wages and salaries that are estimated annually by reference to factors such as inflation and economic conditions, among others.

The expected returns are derived from consensus forecasts for the respective asset classes as well as bank discussions. The forecasts are based on experienced data, economic data, interest forecasts and stock market expectations.

For funded plans, the pension obligations calculated according to the Projected Unit Credit Method are reduced by an amount equal to the fund assets. If the fund assets exceed the defined benefit obligations, an asset is recognized according to ias 19 and disclosed under other assets. To the extent that the fund assets do not cover the commitment, the net obligation is recognized as a liability under pension provisions.

Increases or decreases in either the present value of the defined benefit obligations or the fair value of the plan assets may give rise to actuarial gains or losses. This may be caused by factors such as changes in actuarial parameters, changes to estimates for the risk profile of the pension obligations and differences between the actual and expected returns on the fund assets. Actuarial gains and losses are recognized directly in equity and offset against revenue reserves in the year in which they occur.

funding status of defined benefit pension obligations

Germany

usa

Others

Total

2008

2009

2008

2009

2008

2009

2008

2009

Present value of pension benefits covered by provisions


64.8


67.9


0.9


0.6


1.2


0.5


66.9


69.0

Present value of funded
pension benefits


0.0


0.0


4.0


4.1


0.0


0.0


4.0


4.1

Defined benefit obligation

64.8

67.9

4.9

4.7

1.2

0.5

70.9

73.1

Fair value of plan assets

0.0

0.0

2.4

3.1

0.0

0.0

2.4

3.1

net obligation as of dec. 31 *

64.8

67.9

2.5

1.6

1.2

0.5

68.5

70.0

* Is the same as the pension provision because in both the reporting year as well as in the previous year there was no overfunding plan assets and no unrecognized past service cost.

As a result of the decline in market rates observed especially in the euro zone since the reference date for the prior year, lower discount rates were applied generally for the discounting of pension obligations resulting, ceteris paribus, in a higher defined benefit obligation. Details of the changes in defined benefit obligations for the financial year are shown in the following summary:

changes in defined benefit obligations

Germany

usa

Others

Total

2008

2009

2008

2009

2008

2009

2008

2009

Net obligations as of Jan. 1

70.6

64.8

5.3

4.9

1.1

1.2

77.0

70.9

(of which funded in a separate fund)

(–)

(–)

(3.6)

(4.0)

(0.0)

(0.0)

(3.6)

(4.0)

(of which funded by provisions)

(70.6)

(64.8)

(1.7)

(0.9)

(1.1)

(1.2)

(73.4)

(66.9)

Current service costs

0.4

0.3

0.1

0.1

0.1

0.0

0.6

0.4

Interest expense

3.7

3.9

0.3

0.3

0.0

0.0

4.0

4.2

Plan changes

0.0

0.0

– 0.5

– 0.4

0.0

– 0.3

– 0.5

– 0.7

Payments

– 5.6

– 5.6

– 0.2

– 0.2

– 0.1

– 0.2

– 5.9

– 6.0

Acturial gains (–) / and losses (+)

– 4.3

4.5

– 0.4

0.2

0.1

0.0

– 4.6

4.7

Currency translation

0.0

0.0

0.3

– 0.2

0.0

0.0

0.3

– 0.2

Other changes

0.0

0.0

0.0

0.0

0.0

– 0.2

0.0

– 0.2

net obligations as of dec. 31

64.8

67.9

4.9

4.7

1.2

0.5

70.9

73.1

(of which funded in a separate fund)

(–)

(–)

(4.0)

(4.1)

(0.0)

(0.0)

(4.0)

(4.1)

(of which funded by provisions)

(64.8)

(67.9)

(0.9)

(0.6)

(1.2)

(0.5)

(66.9)

(69.0)

The defined benefit obligation increased in the reporting year owing to a decrease in the discounting factor for domestic and foreign pension plans. The influence of the remaining valuation parameters was minimal.

Current service costs and interest expenses totaling € 4.6 million (prior year: € 4.6 million) compare to benefit payments of € 6.0 million during the financial year (prior year: € 5.9 million). The increase of the defined benefit obligation results mainly in actuarial losses of € 4.7 million accrued during the financial year, compared to gains of € 4.6 million in 2008.

Other changes are related to the transfer of employees along with their pension claims in conjunction with the sale of the Tours location of kuka Systems France s. a. / France.

pension expense for defined benefit plans

Germany

usa

Others

Total

2008

2009

2008

2009

2008

2009

2008

2009

Current service costs

0.4

0.3

0.1

0.1

0.1

0.0

0.6

0.4

Interest expense

3.7

3.9

0.3

0.3

0.0

0.0

4.0

4.2

Expected return on plan assets

0.0

0.0

– 0.2

– 0.2

0.0

0.0

– 0.2

– 0.2

Plan curtailments

0.0

0.0

– 0.5

– 0.4

0.0

– 0.3

– 0.5

– 0.7

pension expenses from
defined benefit commitments


4.1


4.2


– 0.3


– 0.2


0.1


– 0.3


3.9


3.7

Pension expense for defined benefit plans decreased by € 0.2 million to € 3.7 million from the previous year’s € 3.9 million. This is mainly due to reductions in medical care coverage of kuka Assembly and Test Corp., Saginaw / usa of € 0.4 million as well as the loss of claims due to restructuring at kuka Systems France s. a., Montigny / France in the amount of € 0.3 million.

The actuarial gains and losses recognized in Group equity includes the following amounts:

2006

2007

2008

2009

Cumulative gains (+) and losses (–) recognized
directly in equity as at Jan. 1


– 9.5


– 6.3


3.5


6.9

Actuarial gains (+) and losses (–) of the financial year

3.2

9.8

3.4

– 4.2

cumulative gains (+) and losses (–) recognized
directly in equity as at dec. 31


– 6.3


3.5


6.9


2.7

development of plan assets in the financial year

2008

2009

Fair value as at Jan. 1

3.1

2.4

Expected returns on plan assets

0.2

0.2

Acturial gains / losses

– 1.2

0.5

Currency translation

0.2

– 0.1

Employer contributions

0.2

0.2

Payments

– 0.1

– 0.1

fair value as at dec. 31

2.4

3.1

The actual gains from external pension funds were € 0.7 million (prior year expenses: € 1.1 million).

As of December 31, 2009 the plan assets of € 3.1 million (prior year: € 2.4 million) broke down into shares in stock funds equal to 79 percent (prior year: 75 percent), with the remaining 21 percent comprising fixed-interest securities and cash funds. Debentures were no longer held in 2009 (Prior year: 25 percent).

Employer payments into the fund assets of € 0.3 million are expected in the 2010 financial year.

Amounts for the current year and the four previous years of pension obligations, the excluded assets and the assets exceeding benefit commitments are represented as follows:

2005

2006

2007

2008

2009

Defined Benefit Obligation

222.2

213.2

77.0

70.9

73.1

Plan Assets

72.5

74.9

3.1

2.4

3.1

funded status

149.7

138.3

73.9

68.5

70.0

The following shows the experience-based adjustments for the current and two previous years:

2007

2008

2009

Experience-based increase (+) / decrease (–) of pension obligations

– 3.0

0.8

1.0

Experience-based increase (+) / decrease (–) of plan assets

0.0

– 53.1

15.6

25 provision for taxes

Status as at
Jan.1,2009

Exchange rate
differences

Use

Reversals

Additions

Status as at
Dec.31,2009

provision for taxes

11.3

– 0.1

4.6

2.6

9.3

13.3

The items included in the provision for taxes have a remaining maturity of up to one year.

26 other provisions and accruals

Status as at
Jan.1,2009

Exchange rate
differences

Use

Reversals

Additions

Status as at Dec.31,2009

Warranty commitments and risks from pending transactions


43.8


– 0.2


15.0


12.6


19.8


35.8

Liabilities arising from restructurings

6.4

0.0

5.4

0.0

21.7

22.7

Other provisions

57.3

– 0.4

36.1

1.1

32.9

52.6

107.5

– 0.6

56.5

13.7

74.4

111.1

Other provisions and accruals for warranty commitments and risks from pending transactions include provisions for impending losses from pending transactions of € 22.5 million (prior year: € 20.5 million) and warranty risk of € 13.3 million (prior year: € 23.3 million). Of the reversals, € 5.5 million is attributable to provisions for impending losses and € 7.1 to warranty risk.

In addition to provisions made for personnel measures, restructuring obligations also include provisions for material measures. The company has put together, announced and in part already begun to implement an extensive restructuring plan that will affect the entire Group. Provisions totaling roughly € 21.7 million were made in the reporting year for the expected restructuring measures. At year end restructuring obligations totaled € 22.7 million; € 17.8 million for the Systems division, and € 4.0 million for the Robotics division. There was a provision of € 7.6 million as of the key date related to the restructuring in France. Net assets of € 3.1 million were deducted from the kuka Group owing to the sale of the Tours location. 80 employees have left the company as a result.

Of the other provisions, € 22.0 million (prior year: € 27.6 million) relate among other items to costs still to be incurred for orders already invoiced and litigation risk of € 5.2 million (prior year: € 4.1 million).

The other provisions essentially have a remaining term of up to one year.

27 liabilities

2009

Remaining maturity

up to
one year

between one
and five years

more than
five years

Dec.31,2009 total

Liabilities due to banks

45.5

0.0

0.0

45.5

Convertible bond

0.4

63.8

0.0

64.2

Financial liabilities

45.9

63.8

0.0

109.7

Liabilities from construction contracts

54.6

54.6

Advances received

27.1

27.1

Trade payables

73.3

73.3

Accounts payable to affiliated companies

0.1

0.0

0.0

0.1

Other liabilities and deferred income

71.3

14.8

1.2

87.3

(of that for taxes)

(10.7)

(0.0)

(0.0)

(10.7)

(of that for social security payments)

(1.2)

(0.0)

(0.0)

(1.2)

(of that, liabilities relating to personnel)

(38.1)

(7.0)

(0.5)

(45.6)

(of that for leases)

(0.2)

(0.5)

(0.0)

(0.7)

(of that fair values of foreign exchange and
interest rate contracts)


(1.6)


(2.2)


(0.0)


(3.8)

272.3

78.6

1.2

352.1

2008

Remaining maturity

up to
one year

between one
and five years

more than
five years

Dec.31,2009 total

Liabilities due to banks

33.2

0.0

0.0

33.2

Convertible bond

0.4

61.3

0.0

61.7

Financial liabilities

33.6

61.3

0.0

94.9

Liabilities from construction contracts

54.6

54.6

Advances received

36.7

36.7

Trade payables

149.1

149.1

Accounts payable to affiliated companies

0.2

0.0

0.0

0.2

Other liabilities and deferred income

102.9

12.1

1.1

116.1

(of that for taxes)

(18.5)

(0.0)

(0.0)

(18.5)

(of that for social security payments)

(1.8)

(0.0)

(0.0)

(1.8)

(of that, liabilities relating to personnel)

(54.2)

(7.0)

(0.7)

(61.9)

(of that for leases)

(0.0)

(0.0)

(0.0)

(0.0)

(of that fair values of foreign exchange and
interest rate contracts)


(11.2)


(4.8)


(0.0)


(16.0)

377.1

73.4

1.1

451.6

28 financial liabilities / financing

The remaining existing financial liabilities mainly represent the convertible bond issued in May of 2006 as well as the utilization of the existing cash lines from the syndicated loan.

fixed interest rate agreements

Net carrying amount

Fair value

2008

2009

2008

2009

Original maturity

Notional interest rate

Convertible bond

61.7

64.2

50.2

55.9

2006 – 2011

3.75 % p. a.

The market value of the convertible bond was determined using the closing price in floor trading at the Frankfurt Stock Exchange on December 31, 2009.

variable interest rate liabilities to banks (2009)

Net carrying amount

avg. Notional
interest rate

Year of latest
maturity

Liabilities due to banks

44,1 eur 44,1 eur

4.93 % p. a.

2010

Liabilities due to banks

1.2 gbp 1.3 eur

2.50 % p. a.

2010

variable interest rate liabilities to banks (2008)

Net carrying amount

avg. Notional
interest rate

Year of latest
maturity

Liabilities due to banks

32,2 eur 32,2 eur

4.09 % p. a.

2009

Liabilities due to banks

0.7 gbp 0.7 eur

2.00 % p. a.

2009

Liabilities due to banks

1.0 brl 0.3 eur

30.00 % p. a.

2009

All averages are calculated as the arithmetic mean of the values of the individual financial instruments as at the financial statement reporting date, weighted by the respective carrying amounts in euro.

Convertible bond

In May 2006, kuka placed a convertible bond with a face value of € 69 million, collateralized by kuka Aktiengesellschaft, via its subsidiary kuka Finance b. v., Amsterdam / Netherlands. The bond was issued in denominations of € 50,000 each and grants rights for conversion in consideration of the 2007 dividend into up to 2,718,322 no-par value shares of kuka Aktiengesellschaft. The conversion price is € 25.3833 per share. The conversion rate is 1,969.8005 shares by unit of denomination. The adjustment related to dividend payments guarantees the anti-dilution provisions with respect to distributions in accordance with the bond terms and conditions. The conversion right can be exercised until the maturity date of the bond. The bond carries an interest coupon of 3.75 percent p. a.. Interest is paid in November of each year.

The bond matures on November 9, 2011 and will be redeemed by payment equal to the face value plus interest accrued up until that time. As of December 9, 2009, kuka has the right to call the bonds at any time at the nominal amount, plus accrued interest, subject to the share price exceeding 130 percent of the conversion price within a period defined in the bond terms and conditions.

The convertible bond is listed on the Luxembourg exchange (isin de000A0grmc0 / wkn A0grmc). The last price quoted for the bond on the Frankfurter stock exchange in 2009 was 81.00 percent (72.80 percent in 2008).

On the balance sheet, the convertible bond is broken down into an equity and a debt component. The market value of the debt component (€ 55.7 million) was determined on the basis of the market interest rate for a corresponding fixed-interest bond without conversion feature (7.63 percent). Including the issuing costs allocated proportionately to the equity and debt components, the effective interest rate rises to 8.25 percent. The resulting value of the equity component (€ 11.3 million) is recognized as part of the capital reserve and will not be changed until the due date or conversion. In the 2008 financial year, interest expense of € 5.1 million (prior year: € 4.9 million) was booked in connection with the bond account.

Syndicated loan

Syndicated loan until March 2010

On December 22, 2006 kuka Aktiengesellschaft and 31 subsidiaries had closed a syndicated loan for € 475 million with a select group of banks. The lead banks of the syndicate are Landesbank Baden-Württemberg, Commerzbank Aktiengesellschaft and UniCredit Bank ag. They are joined by Bayernlb, the Royal Bank of Scotland and Deutsche Bank. The syndicated loan agreement was executed effective January 31, 2007.

Following the successful sale of the Packaging division in April of 2007, contractual adjustments to this syndicated loan became effective. Aside from the elimination of the twelve companies in this business division as parties to the contract, the term loan was repaid and the guaranteed line of credit was reduced by € 20 million.

The availability of the financing is tied to the adherence to specific covenants. This has to do with the interest coverage ratio (measured as ebitda to adjusted net interest), the debt ratio (measured as defined net debt to ebitda), and the absolute level of equity adjusted for minority interests. Economic conditions made it impossible to adhere to the covenant regarding the debt-equity ratio since the second quarter of 2009. This could have led to credit lines being payable in the 2009 financial year. As part of a rolling waiver process the issuing banks waived their right to early repayment. The necessary cash and credit lines for continuing operations have been made available in the respective amounts until the syndicated loan agreement is readjusted in March 2010.

At the balance sheet date the kuka Group had € 67.0 million (prior year: € 115.0 million) at its disposal under this agreement as revolving cash lines as well as € 190.0 million (prior year: € 190.0 million) as guaranteed credit lines. The latter are particularly important for kuka in connection with the financing of plant construction deals.

The utilization of the line of credit totaled € 110.6 million (prior year: € 108.7 million) as of the key date; the existing operating line of credit was utilized in the amount of € 40.0 million (prior year: € 30.1 million).

Syndicated loan from March 2010

Agreement on extending the Syndicated Senior Facilities Agreement totaling € 336 million (of which € 146 million is a cash credit line and € 190 million a credit line for lcs) was reached in March 2010, after the December 31, 2009 closing date. It includes various constraints and conditions, such as the successfully implementing kuka Group’s restructuring, which also comprises further increasing via equity or subordinated loans, refinancing the existing convertible bond and honoring various financial and non-financial covenants. Accordingly, no dividends will be paid to shareholders during the term of the Syndicated Senior Facilities Agreement.

Key covenants relate to minimum earnings before interest, taxes and depreciation (ebitda), the degree of indebtedness and equity. As part of this agreement with the consortium banking partners, kuka ag is obligated to ensure that it adds € 23 million either as equity or subordinated loans by the end of June 2010. Concerning this, the company has a guarantee in the amount of € 15 million.

The receivables of the syndicate of banks from the financing agreement are collateralized by kuka companies. The collateral package includes a registered land charge on the industrial site in Augsburg totaling € 70.0 million, charges on business interests and kuka’s own interests, patent and trademark rights, domestic property, long-term tax receivables, as well as other assets including blanket assignments and transfers by way of securities.

Credit lines from surety companies

Guaranteed credit lines in the amount of € 5.0 million (prior year: € 50 million) have been committed by surety companies. Utilization at the end of the financial year was € 3.6 million (prior year: € 3.2 million).

Asset-backed securities program

In December 2006, an abs program (asset-backed securities) was issued with a five year term. Under this program, trade receivables of kuka Roboter GmbH in an amount of up to € 25 million can be sold in regular tranches to a special purpose vehicle (spv) of Bayernlb. The spv finances the purchase of the receivables by issuing securities on the capital market or through utilization of a special credit line provided by Bayernlb. Covenants are also in place for this financing program that could not be upheld in 2009. In this case as well, the participating parties waived their contractual right to cancel the agreement as part of a waiver process. Consequently, the financing was available without restriction throughout the entire financial year 2009. The contractual adjustments took effect in March 2010.

At the balance sheet date € 9.5 million (prior year: € 15.7 million) was utilized from the program. The adequate credit worthiness of the receivables sold is guaranteed by a default guarantee from a credit insurer. In this connection, kuka Roboter GmbH absorbs the first 1.15 percent of the credit risk from the sale of the receivables. A cash deposit of € 2.9 million (prior year: € 4.4 million) was established as a further security and is reported under other assets. The claims of kuka Roboter GmbH for the management and settlement of the sold receivables are also included in this category at a present value of € 0.1 million (prior year: € 0.3 million). The continuing involvement of € 0.2 million (prior year: € 0.2 million) was completely written off as of the balance sheet date.

29 other non-current / current liabilities and deferred income

Liabilities arising from finance leases are recognized at the present value of future lease payments and disclosed as other liabilities. Liabilities for vacation pay, flex-time credits and the statutory German early retirement scheme (Altersteilzeit), are recognized under other liabilities. Trade payables include payments due on outstanding supplier invoices.

30 financial risk management and financial derivatives

a) Principles of risk management

The kuka Group is exposed in particular to risks from movements in exchange rates and interest rates that affect its assets, liabilities and forecast transactions. Financial risk management aims to limit and control these market risks through ongoing operational and finance activities. Derivative hedging instruments are used for this purpose. Depending on the risk assessment; the Group principally only hedges the risks that affect its cash flow. Derivatives are exclusively used as hedging instruments, i. e., not for trading or other speculative purposes. To reduce the credit risk, hedging transactions are only concluded with financial institutions of sound credit worthiness.

The fundamentals of the Group’s financial policy are established each year by the Executive Board. The Group Treasury is responsible for implementing the finance policy and for ongoing risk management. Certain transactions require the prior approval of the Financial Director, who is also regularly briefed on the current risk exposure.

The Treasury regards effective management of the market risk as one of its main tasks. For this, the department performs simulation calculations using different most-likely and worst-case scenarios.

b) Currency risks

kuka is exposed to currency risks from its investing, financing, and operating activities. These are hedged at the time of their occurrence to the extent that they influence the Group’s cash flows, through the conclusion of derivative financial instruments with banks or by offsetting opposing payment flows. Hedging may also cover future planned transactions where hedging instruments with a short term (< 1 year) are used to cover currency risks. Foreign-currency risks that do not influence the Group’s cash flows, e. g. risks resulting from translation of assets and liabilities of foreign kuka operations into the Group’s reporting currency, are generally not hedged. In certain cases these risks can also be hedged after approval by the cfo. In the area of investments, there were no major risks from foreign currency transactions on the kuka reporting date.

Foreign currency risks in the financing area are caused by loans in foreign currency that are extended to Group entities and liquid funds in foreign currency.

The Treasury hedges the major risks arising from these. Currency derivatives are used to convert financial obligations and intra-Group loans denominated in foreign currencies into the Group entities’ functional currencies. At the reporting date, there are no major financial liabilities in foreign currencies. All intra-Group loans denominated in foreign, freely convertible currencies were hedged accordingly. On account of these hedging activities, kuka was not exposed to any significant exchange rate risks in the area of financing at the reporting date.

The individual kuka companies handle their operating activities mainly in the relevant functional currency. However, some kuka companies are exposed to corresponding exchange rate risks in connection with planned payments outside their own functional currencies. kuka uses currency derivatives to hedge these payments. On account of these hedging activities, kuka was not exposed to any significant exchange rate risks from its operating activities at the reporting date.

Currency risks as defined by ifrs 7 arise on account of financial instruments that are denominated in a currency other than the functional currency and are of a monetary nature. Differences resulting from the translation of financial statements into the Group’s presentation currency are not taken into consideration. Relevant risk variables are generally all non-functional currencies in which kuka has financial instruments.

For the presentation of market risks, ifrs 7 requires sensitivity analyses that show the effects of hypothetical changes of relevant risk variables (e. g. interest rates, exchange rates) on profit or loss and shareholders’ equity. The periodic effects are determined by relating the hypothetical changes in the risk variables to the balance of financial instruments at the reporting date. It is assumed that the balance at the reporting date is representative for the year as a whole.

The currency sensitivity analysis is based on the following assumptions:

  • Major non-derivative monetary financial instruments (liquid assets, receivables, liabilities) are either directly denominated in the functional currency or are transferred to the functional currency through the use of derivatives. Exchange rate fluctuations therefore have no effects on profit or loss, or shareholders’ equity.
  • Interest income and interest expense from financial instruments are also either recorded directly in the functional currency or transferred to the functional currency by using derivatives. For this reason, there can be no effects on the variables considered in this connection.
  • In the case of fair value hedges designed for hedging currency risks, the changes in the fair values of the hedged item and the hedging instruments attributable to exchange rate movements balance out almost completely in the income statement in the same period. Consequently, these financial instruments are not exposed to currency risks with an effect on profit or loss, or shareholders’ equity either.

The following currency scenarios arise at the balance sheet date for the main foreign currencies used by the kuka Group:

A 10 percent gain of the eur against the usd would have had a positive effect on Group profits of plus € 1.0 million (prior year: plus € 0.7 million). A 10 percent decline of the eur against the usd would have had a negative effect on Group profits of minus € 1.3 million (prior year: minus € 0.8 million).

A 10 percent gain of the eur against the jpy would have had a negative effect on Group profits of minus € 0.8 million (prior year: minus € 0.1 million). A 10 percent decline of the eur against the jpy would have had a positive effect on Group profits of plus € 0.9 million (prior year: plus € 0.1 million).

A 10 percent gain of the eur against the huf would have had a negative effect on Group profits of minus € 0.3 million (prior year: minus € 0.1 million). A 10 percent decline of the eur against the huf would have had a positive effect on Group profits of plus € 0.4 million (prior year: plus € 0.1 million).

A 10 percent gain of the eur against the gbp would have had a negative effect on Group profits of minus € 0.1 million (prior year: minus € 0.3 million). A 10 percent decline of the eur against the gbp would have had a positive effect on Group profits of plus € 0.1 million (prior year: plus € 0.4 million).

c) Interest rate risks

Risks from interest rate changes at kuka are essentially the result of short-term investments / credits in eur. These are not hedged at the reporting date.

Interest rate risks are presented by way of sensitivity analyses in accordance with ifrs 7. These show the effects of changes in market interest rates on interest payments, interest income and expense, other income components and, if appropriate, shareholders’ equity. The interest rate sensitivity analyses are based on the following assumptions:

  • Changes in the market interest rates of non-derivative financial instruments with fixed interest rates only affect income if these are measured at their fair value. As such, all financial instruments with fixed interest rates that are carried at amortized cost (e. g. convertible bonds) are not subject to interest rate risk as defined in ifrs 7.
  • Changes in market interest rates affect the interest income or expense of non-derivative variable-interest financial instruments, the interest payments of which are not designated as hedged items of cash flow hedges against interest rate risks.

An increase as well as a decrease in market interest rates by 100 basis points at December 31, 2009 would have had a positive effect on results of plus € 0.2 million. In 2008, results would have been higher by € 0.1 million with an increase by 100 basis points. A decrease by 100 basis points would have lowered results in 2008 by € 0.1 million. The hypothetical effect of € 0.2 million results solely from the financial investments (credits) with variable interest rates totaling € 61.2 million (€ 45.9 million) at the balance sheet date.

d) Credit risks

The kuka Group is exposed to credit risk from its operating activities and certain financing activities. A default can occur if individual business partners do not meet their contractual obligations and the kuka Group thus suffers a financial loss. With regard to financing activities, important transactions are only concluded with counterparties that have a credit rating of at least A- / A1.

At the level of operations, the outstanding debts are continuously monitored in each area (locally). Business relations with critical major customers (e. g. us oems) and the associated credit risks are subject to separate quarterly credit rating monitoring at the Group’s Executive Board level. Credit risks must be taken into account through individual impairments.

In the course of abs transactions, the designated receivables are managed separately. A security margin is provided as a cash reserve for the credit risk. The percentage of the provision for the credit risk has been statistically proven to be stable. A statement of the actual loan losses is prepared periodically and any excess payments to the cash reserve are refunded.

The maximum exposure to credit risk is represented by the carrying amounts of the financial assets that are carried in the balance sheet (including derivatives with positive market values). No agreements reducing the maximum exposure to credit risk had been concluded as of the reporting date.

e) Liquidity risks

One of kuka ag’s primary tasks is to coordinate and control the Group’s financing requirements as well as ensure the financial independence of kuka and its ability to pay on time. With this goal in mind, the kuka Group optimizes the Group’s financing and limits its financial risks. The standardized, group-wide treasury reporting system implemented in 2007 was further enhanced in the 2009 financial year for this purpose. In addition, the Group’s overall liquidity risk is reduced by closely monitoring the Group’s companies and their control of payment flows.

In order to ensure the payment capability at all times and the financial flexibility of the kuka Group, a liquidity reserve is kept in the form of credit lines and cash funds. For this, kuka has, among other things, concluded a syndicated loan agreement with a consortium of banks. Detailed information is provided in the notes under item 28 Financial liabilities / financing in the section “Syndicated loan”.

The following figures show the commitments for undiscounted interest and redemption repayments for the financial instruments subsumed under ifrs 7:

December 31, 2009

Cash flows 2010

Cash flows 2011

Cash flows
2012-2014

Cash flows
2015 ff.

Non-current financial liabilities

2.6

71.6

0.0

0.0

Current financial liabilities

45.8

0.0

0.0

0.0

Trade payables

73.3

0.0

0.0

0.0

Accounts payable to affiliated companies

0.0

0.0

0.0

0.0

Other non-current liabilities

0.0

2.5

0.2

0.0

(of that for leases)

(0.0)

(0.3)

(0.2)

(0.0)

(of that Derivatives with a hedging relationship)
(hedge accounting)


(0.0)


(0.0)


(0.0)


(0.0)

Other current liabilities

18.2

0.0

0.0

0.0

(of that for leases)

(0.2)

(0.0)

(0.0)

(0.0)

(of that Derivatives with a hedging relationship
(hedge accounting))


(0.0)


(0.0)


(0.0)


(0.0)

December 31, 2008

Cash flows 2009

Cash flows 2010

Cash flows
2011-2013

Cash flows
2014 ff.

Non-current financial liabilities

2.6

2.6

71.5

0.0

Current financial liabilities

33.6

0.0

0.0

0.0

Trade payables

149.1

0.0

0.0

0.0

Accounts payable to affiliated companies

0.2

0.0

0.0

0.0

Other non-current liabilities

0.0

1.7

3.9

0.1

(of that for leases)

(0.0)

(0.0)

(0.0)

(0.0)

(of that Derivatives with a hedging relationship)
(hedge accounting)


(0.0)


(1.4)


(3.4)


(0.0)

Other current liabilities

67.9

0.0

0.0

0.0

(of that for leases)

(0.0)

(0.0)

(0.0)

(0.0)

(of that Derivatives with a hedging relationship
(hedge accounting))


(11.2)


(0.0)


(0.0)


(0.0)

All financial instruments are included which were held at the balance sheet dates and for which payments have already been contractually agreed. Foreign currency amounts are expressed at the spot rate on the key date. The variable interest payments from the financial instruments were determined on the basis of the interest rates last fixed prior to December 31, 2009, i. e. 2008. Financial liabilities repayable at any time are always assigned to the earliest time period. The payment flows from derivatives (forward exchange transactions) are net, i. e. they are represented by balancing the inflow and outflow of funds.

f) Hedges

Hedges are used by the kuka Group to secure fair values and existing balance sheet items as well as to hedge future payment flows. These are exclusively for the purpose of hedging exchange risks.

There were no fair value hedges at the reporting date. Last year fair value hedges had an effect on the result due to the carrying amount adjustment of the underlying transactions of € 2.7 million, which were included under Other operating expenses and income. The reverse developments of the market values for hedges amount to € – 2.7 million and have also been included under Other operating expenses and income.

Hedges are entered into exclusively in the form of forward exchange transactions.

The following shows the carrying amounts of the financial instruments according to the valuation categories of ias 39:

Abbr.

Status as at
Dec.31,2008

Status as at
Dec.31,2009

Available-for-Sale Financial Assets

afs

0.2

1.0

Loans and Receivables

lar

391.1

308.8

Financial Assets Held for Trading

fahft

5.1

1.3

Financial Liabilities Measured at Amortized Cost

flac

289.5

199.5

Financial Liabilities Held for Trading

flhft

16.0

3.8

The carrying amounts and the fair values are derived from the following table:

net carrying amount and fair values of ias by measurement categories for 2009

ias 39 – measurement categories

Net carrying amount / Status as at Dec. 31, 2009

of that:
other
assets and liabilities not covered by
ifrs 7

of that:
other
assets and liabilities covered
by
ifrs 7

Net carrying
amount of
the financial
instruments/
Status as at
Dec.31,2009

Fair value/
Status as at
Dec.31,2009

assets

Financial investments

1.0

0.0

0.0

1.0

1.0

(of that loans)

lar

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(of that participations)

afs

(1.0)

(0.0)

(0.0)

(1.0)

(1.0)

Long-term finance lease receivables

n. a.

75.8

0.0

75.8

0.0

75.8

Other non-current liabilities and other assets


10.0


4.1


0.0


5.9


10.0

(of that trade receivables)

lar

(0.3)

(0.0)

(0.0)

(0.3)

(0.3)

(of that from the category lar)

lar

(5.6)

(0.0)

(0.0)

(5.6)

(5.6)

(of that Other)

n. a.

(4.1)

(4.1)

(0.0)

(0.0)

(4.1)

Trade and other receivables

lar

114.2

0.0

0.0

114.2

114.2

Receivables from construction contracts


lar


124.3


0.0


0.0


124.3


124.3

Receivables from affiliated companies


lar


0.0


0.0


0.0


0.0


0.0

Current finance lease receivables

n. a.

3.5

0.0

3.5

0.0

3.5

Other assets, prepaid expenses and deferred charges


17.1


12.6


0.0


4.5


17.1

of that Derivatives without a hedging relationship
(held for sale))



fahft



(1.3)



(0.0)



(0.0)



(1.3)



(1.3)

(of that Derivatives with a
hedging relationship
(hedge accounting))



fahft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Other from the category lar)

lar

(3.2)

(0.0)

(0.0)

(3.2)

(3.2)

(of that Other)

n. a.

(12.6)

(12.6)

(0.0)

(0.0)

(12.6)

Cash and cash equivalents

lar

61.2

0.0

0.0

61.2

61.2

liabilities

Non-current financial liabilities

flac

63.8

0.0

0.0

63.8

55.9

Other non-current liabilities

16.0

13.3

0.5

2.2

16.0

(of that for leases)

n. a.

(0.5)

(0.0)

(0.5)

(0.0)

(0.5)

(of that Derivatives without a hedging relationship
(held for sale))



flhft



(2.2)



(0.0)



(0.0)



(2.2)



(2.2)

(of that Derivatives with a
hedging relationship
(hedge accounting))



flhft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Other from the category flac)

flac

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(of that Other)

n. a.

(13.3)

(13.3)

(0.0)

(0.0)

(13.3)

Current financial liabilities

flac

45.9

0.0

0.0

45.9

45.9

Trade payables

flac

73.3

0.0

0.0

73.3

73.3

Liabilities from construction contracts


n. a.


54.6


54.6


0.0


0.0


54.6

Accounts payable to affiliated companies


flac


0.1


0.0


0.0


0.1


0.1

Other current liabilities and
deferred income


71.3


53.1


0.2


18.0


71.3

(of that for leases)

n. a.

(0.2)

(0.0)

(0.2)

(0.0)

(0.2)

(of that Derivatives without a hedging relationship
(held for sale))



flhft



(1.6)



(0.0)



(0.0)



(1.6)



(1.6)

(of that Derivatives with a
hedging relationship
(hedge accounting))



flhft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Other from the category flac)

flac

(16.4)

(0.0)

(0.0)

(16.4)

(16.4)

(of that Other)

n. a.

(53.1)

(53.1)

(0.0)

(0.0)

(53.1)

net carrying amount and fair values of ias by measurement categories for 2008

ias 39 – measurement categories

Net carrying amount / Status as at Dec. 31, 2008

of that:
other
assets and liabilities not covered by
ifrs 7

of that:
other
assets and liabilities covered
by
ifrs 7

Net carrying
amount of
the financial
instruments/
Status as at
Dec.31,2008

Fair value/
Status as at
Dec.31,2008

assets

Financial investments

0.4

0.0

0.0

0.4

0.3

(of that loans)

lar

(0.2)

(0.0)

(0.0)

(0.2)

(0.2)

(of that participations)

afs

(0.2)

(0.0)

(0.0)

(0.2)

(0.1)

Long-term finance lease receivables

n. a.

82.0

0.0

82.0

0.0

82.0

Other non-current liabilities and other assets


10.3


0.0


0.0


10.3


10.3

(of that trade receivables)

lar

(0.4)

(0.0)

(0.0)

(0.4)

(0.4)

(of that from the category lar)

lar

(9.9)

(0.0)

(0.0)

(9.9)

(9.9)

(of that Other)

n. a.

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

Trade and other receivables

lar

164.4

0.0

0.0

164.4

164.4

Receivables from construction contracts


lar


167.1


0.0


0.0


167.1


167.1

Receivables from affiliated companies


lar


0.4


0.0


0.0


0.4


0.4

Current finance lease receivables

n. a.

3.3

0.0

3.3

0.0

3.3

Other assets, prepaid expenses and deferred charges


16.7


4.2


0.0


12.5


16.7

(of that Derivatives without a hedging relationship
(held for sale))



fahft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Derivatives with a
hedging relationship
(hedge accounting))



fahft



(5.1)



(0.0)



(0.0)



(5.1)



(5.1)

(of that Other from the category lar)

lar

(7.4)

(0.0)

(0.0)

(7.4)

(7.4)

(of that Other)

n. a.

(4.2)

(4.2)

(0.0)

(0.0)

(4.2)

Cash and cash equivalents

lar

41.3

0.0

0.0

41.3

41.3

liabilities

Non-current financial liabilities

flac

61.3

0.0

0.0

61.3

50.2

Other non-current liabilities

13.2

8.2

0.0

5.0

13.2

(of that for leases)

n. a.

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(of that Derivatives without a hedging relationship
(held for sale))



flhft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Derivatives with a
hedging relationship
(hedge accounting))



flhft



(4.8)



(0.0)



(0.0)



(4.8)



(4.8)

(of that Other from the category flac)

flac

(0.2)

(0.0)

(0.0)

(0.2)

(0.2)

(of that Other)

n. a.

(8.2)

(8.2)

(0.0)

(0.0)

(8.2)

Current financial liabilities

flac

(33.6)

(0.0)

(0.0)

(33.6)

(33.6)

Trade payables

flac

149.1

0.0

0.0

149.1

149.1

Liabilities from construction contracts


n. a.


54.6


54.6


0.0


0.0


54.6

Accounts payable to affiliated companies


flac


0.2


0.0


0.0

0.2

0.2

Other current liabilities and
deferred income


102.9


46.6


0.0


56.3


102.9

(of that for leases)

n. a.

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(of that Derivatives without a hedging relationship
(held for sale))



flhft



(0.0)



(0.0)



(0.0)



(0.0)



(0.0)

(of that Derivatives with a
hedging relationship
(hedge accounting))



flhft



(11.2)



(0.0)



(0.0)



(11.2)



(11.2)

(of that Other from the category flac)

flac

(45.1)

(0.0)

(0.0)

(45.1)

(45.1)

(of that Other)

n. a.

(46.6)

(46.6)

(0.0)

(0.0)

(46.6)

With the exception of financial investments and leasing claims, most assets have short terms to maturity. Their carrying amounts as of the closing date therefore correspond approximately with the fair value. Long-term interest-bearing receivables including finance lease receivables are measured and, if necessary, impaired based on different parameters such as interest rates and customer-specific credit ratings. Thus, these carrying amounts largely reflect the market values.

Liabilities – with the exception of long-term financial liabilities and the remaining long-term liabilities – have regular, short terms to maturity. The values shown on the balance sheet approximately represent the fair values. The market value of the convertible bond is based on the quoted prices as of the balance sheet date.

The derivative financial instruments recognized at the balance sheet date have to do with forward exchange transactions to hedge exchange exposure. Recognition in the balance sheet occurs at the market value determined using standardized financial mathematical methods, among other things, in relation to the foreign exchange rates.

In the previous year the hedge-related derivatives were exclusively in conjunction with forward exchange transactions and were recognized according to the rules of hedge accounting. This financial year the derivatives are likewise exclusively related to forward exchange transactions. However, these are no longer recognized according to the rules of hedge accounting.

In accordance with ifrs 7.27A, financial assets and financial liabilities measured at market values are to be attributed to the three levels of the fair value hierarchy. The three levels of the fair value hierarchy are defined as follows:

Level 1: Quoted price in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices that are observable either directly or indirectly
Level 3: Inputs for assets and liabilities that are not based on observable market data.

Affected by this in the kuka Group are primarily the forward exchange transactions carried as an asset (€ 1.3 million) and those carried as a liability (€ 3.8 million). These are measured according to level 2.

Net results for the financial year listed according to valuation categories are represented as follows:

net profit / loss of ias 39 by measurement categories for 2009

Net gains /
losses

Total interest income / expenses

Commission
income/expenses

Loans and Receivables (lar)

– 5.7

2.6

0.0

Available-for-sale Financial Assets (afs)

– 0.4

0.0

0.0

Financial Instruments Held for Trading (fahft und fl

3.2

0.0

0.0

Financial Liabilities Measured at Amortized Cost (flac)

3.5

– 12.1

– 5.1

total

0.6

– 9.5

– 5.1

The following figures resulted for the financial year 2008:

net profit / loss of ias 39 by measurement categories for 2008

Net gains /
losses

Total interest income / expenses

Commission
income/expenses

Loans and Receivables (lar)

2.3

3.3

0.0

Available-for-sale Financial Assets (afs)

0.0

0.0

0.0

Financial Instruments Held for Trading (fahft und fl

– 1.4

0.0

0.0

Financial Liabilities Measured at Amortized Cost (flac)

4.3

– 8.8

0.5

total

5.2

– 5.5

0.5

Net losses (net profits in the previous year) from the category Loans and Receivables include for the most part exchange rate effects as well as results from additions and reversals of provisions for receivables and other assets. In addition to foreign currency effects, the net profits from Financial Liabilities Measured at Amortized Cost also include income from writing off liabilities. Within the scope of fair value hedges in 2008, exchange losses totaling € 0.2 million resulted from hedging transactions, which are matched in their amount by exchange gains from underlying transactions.

Interest income for financial instruments from the category Loans and Receivables comes from the investment of cash and cash equivalents. The interest result from financial liabilities from the category Financial Liabilities Measured at Amortized Cost largely reflects interest expenses from the convertible bond as well as from financial liabilities due to banks.

Commission expenses are recorded as the transaction costs for financial liabilities due to banks and fees for the provision of guarantees.

31 contingent liabilities and other financial commitments

The following contingent liabilities and other financial commitments existed as of the balance sheet date:

2008

2009

Liabilities from guarantees

22.2

5.5

Liabilities from warranty agreements

39.8

67.7

Other commitments

25.5

14.8

(of that, discounted notes)

(3.2)

(1.6)

(of that, other financial commitments)

(22.3)

(13.2)

total

87.5

88.0