02 Income from Investments in Joint Ventures and Associates / Other Investment Income / Net Interest Income / Other Financial Results
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€ million |
2013 |
2012 |
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Result from investments in joint ventures and associates |
-36.1 |
-82.6 |
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Of which pro rata result attributable to joint ventures |
-36.8 |
-22.3 |
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Of which pro rata result attributable to associated companies |
0.7 |
16.7 |
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Of which impairments |
– |
-77.0 |
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Other investment result |
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Other financial income |
0.1 |
0.1 |
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Total |
0.1 |
0.1 |
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Net interest income |
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Interest income |
15.0 |
16.0 |
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Of which from available-for-sale financial instruments |
1.5 |
2.1 |
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Of which from held-to-maturity financial instruments |
0.8 |
3.3 |
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Interest expenses |
-41.8 |
-26.2 |
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Total |
-26.8 |
-10.2 |
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Other financial result |
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Other financial income |
31.4 |
20.5 |
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Interest effect of interest-bearing provisions/liabilities/finance leases |
-53.5 |
-50.1 |
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Other financial expenses |
-34.4 |
-22.9 |
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Total |
-56.5 |
-52.5 |
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The income from investments in joint ventures and associates relates mainly to companies in China and Singapore. This income includes not only the pro rata shares of net results for the year, but also effects from pro rata eliminations of intercompany profits.
Long-term supply contracts based on fixed transfer prices are in place with the associated company Dow Corning (ZJG) Co. Ltd., Zhangjiagang, China. Changes in the transfer pricing policy made in the previous year led to a substantial reduction in future transfer prices, bringing about a change in the associated company’s expected cash inflows. For this reason, WACKER had reduced – by € 77.0 million – the related carrying amount of the associate, which is accounted for using the equity method. The impairment test performed was based on the value-in-use method. The discount rate amounted to 10.7 percent (after tax). The charge was allocated to the silicones segment.
Borrowing costs of € 2.0 million (2012: € 14.2 million) were capitalized in the year under review, resulting in a corresponding improvement in the net interest result. The average borrowing interest rate applied by the Group in the 2013 financial year was 3.1 percent, as in the previous year.
The interest effect of interest-bearing provisions includes net interest expenses from accrued interest on pension obligations and calculated proceeds from plan assets totaling € 42.3 million (2012: € 36.6 million) and interest cost and interest income from provisions of € 9.3 million (2012: € 11.2 million).
Other financial income and expenses primarily result from exchange-rate effects in connection with financial transactions.