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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
in € millions		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:

in € millions		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
Employees by functional categories		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.

in € millions		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

in € millions		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:

in € millions		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:

in € millions		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
in € millions		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:

in € millions		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
in € thousands		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
in € thousands		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
in € thousands		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
in € thousands		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:

Profit center/in € millions		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:

in %		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:

in € millions		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.

in € millions		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

in € millions		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:

in € millions		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

in € millions		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
in € millions		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:

in € millions as of Dec. 31, 2009		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

in € millions as of Dec. 31, 2008		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:

in € millions		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
in € millions		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:

as of Dec.31,2009		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:

in € millions		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:

in € millions		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); tv88 /90 (F)		ips55 (I); tv88 /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
in € millions		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
in € millions		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
in € millions		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:

in € millions		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

in € millions		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:

in € millions		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:

in %		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

in € millions		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

in € millions		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
in € millions		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
in € millions		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
in € millions		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)

Financial instrument / in millions		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)

Financial instrument / in millions		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

in € millions		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

in € millions		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:

in € millions		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

in € millions		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

in € millions		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

in € millions		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

in € millions		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:

in € millions		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