Wacker Chemie AG - Annual Report 2011 - 15 Financial Liabilities

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€ million

2011

2010

Total

Of which
noncurrent

Of which
current

Total

Of which
noncurrent

Of which
current

¹	Liabilities from leasing arrangements mainly include liabilities relating to leasing the Burghausen plant’s CCGT power station, as well as for technical facilities.

Liabilities to banks

720.7

617.3

103.4

494.8

385.6

109.2

Of which > 5 years

–

281.0

–

304.7

–

Liabilities from lease obligations¹

51.5

44.8

6.7

34.4

21.5

12.9

Of which > 5 years

–

17.2

–

5.1

–

Other financial liabilities

5.7

–

5.7

4.2

–

4.2

Financial liabilities

777.9

662.1

115.8

533.4

407.1

126.3

Of which > 5 years

–

298.2

–

309.8

–

The second installment (€200 million) of an investment loan from the European Investment Bank was drawn in the fourth quarter of 2011.

No collateral exists for financial liabilities. Financial liabilities are not secured through liens or similar rights. Some of the liabilities to banks are fixed-interest and others have variable interest rates. Moreover, some of the liabilities to banks were granted on condition that particular covenants be complied with.

The following are the most significant liabilities to banks:

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€ million	2011			2010
	Currency	Carrying amount in € million	Residual term in years	Currency	Carrying amount in € million	Residual term in years

Development loan	EUR	200.0	Up to 6	EUR	–	–
Development loan	EUR	200.0	Up to 5	EUR	200.0	Up to 6
Loans	EUR	50.0	Up to 2	EUR	50.0	Up to 3
Club Deals	CNY	81.0	Up to 8	CNY	59.1	Up to 9
Club Deals	CNY	66.9	Up to 1	CNY	74.6	Up to 1
Promissory notes	EUR	19.0	Up to 2	EUR	29.0	Up to 3
Other loans		103.8	Up to 2		82.1	Up to 1
Total		720.7			494.8

As of the reporting date, the future minimum lease payments under finance lease agreements amount to:

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€ million	2011		2010
	Nominal value	Present value	Nominal value	Present value

Minimum lease payment within a year	8.9	6.7	14.4	12.9
Minimum lease payment within one and five years	33.1	27.6	19.4	16.4
Minimum lease payment over five years	18.8	17.2	5.5	5.1
	60.8	51.5	39.3	34.4
Total expected minimum lease payments from subtenancies	2.0	–	2.5	–

There are no conditional lease payments from finance leases.

The finance lease for the headquarters building in Munich expired in 2011. In November 2011, a new lease agreement was concluded with PK Wacker GSG GmbH & Co. KG, the company that purchased the building. The lease arrangement covers the land and the building. An evaluation has revealed that the new lease is not a finance lease with respect to the land or the building.

Wacker Chemie AG has capitalized a finance lease for the leased CCGT (combined-cycle gas turbine) power station at its Burghausen site. The lease for the power station is due to expire in 2019 at the latest. WACKER has the right to acquire the power station at a price oriented to book values in accordance with German commercial law. If WACKER acquires this power station, it may not be sold to a third party for five years.

WACKER also has leasing agreements for several technical facilities that qualify as finance leases and were capitalized accordingly.

The lease agreements serve to simplify the procurement and financing of operating materials and fixed assets. The long-term commitment that they involve, however, leads to a constant future outflow of cash from which the company cannot extract itself.