Statement of Financial Position

Wacker Chemie AG’s total assets were almost unchanged year over year, amounting to € 5.14 billion (Dec. 31, 2014: € 5.11 billion). The individual balance-sheet items did not develop uniformly.

Fixed assets fell slightly in the reporting year to € 3.29 billion (2014: € 3.45 billion). This was mainly due to a decline in property, plant and equipment, as depreciation of € 307.8 million (Dec. 31, 2014: € 315.9 million) was substantially higher than investment spending (€ 135.2 million). Investments primarily focused on plant and machinery. Financial assets grew from € 1.97 billion to € 2.00 billion. The largest single component of this figure was the € 179.4 million in capital raised by an intermediate holding company of the production company Wacker Polysilicon North America, LLC. The purpose of the capital increase was to finance construction of the Tennessee production site. Also in 2015, capital was raised for the subsidiary Wacker Chemicals (China) Company Ltd. (Holding), in Shanghai, China in the amount of € 42.3 million. Most of Wacker Chemie AG’s stake in a closed-end securities fund was sold in the year under review. The fund assets came to € 6.4 million as of the reporting date (Dec. 31, 2014: € 197.1 million). The ratio of fixed assets to total assets was 64 percent, compared with 67 percent in the prior year.

The level of inventories remained constant year over year at € 428.3 million (Dec. 31, 2014: € 426.5 million). Trade receivables decreased from € 377.3 million to € 357.7 million.

Other receivables and other assets grew by 25 percent to reach € 920.6 million as of the closing date (Dec. 31, 2014: € 736.0 million). They included significantly higher receivables from affiliated companies in the amount of € 868.1 million (Dec. 31, 2014: € 636.0 million). As in the preceding year, this was due to ongoing financing provided by the production company Wacker Polysilicon North America, LLC, for construction work taking place at the new production site in Charleston, Tennessee (USA). This company is funded by its US parent, Wacker Chemical Corporation.

Other assets dropped markedly, to € 47.4 million (Dec. 31, 2014: € 96.3 million), and mainly included tax receivables and receivables from claims for damages against polysilicon customers. In the prior year, they had chiefly comprised tax receivables, advance payments and reimbursement claims.

As of December 31, 2015, Wacker Chemie AG held € 20 million in fixed-term deposits with maturities of more than three months. Cash on hand and demand deposits amounted to € 118.1 million as of December 31, 2015 (Dec. 31, 2014: € 28.8 million).

Equity amounted to € 2.63 billion as of the reporting date (Dec. 31, 2014: € 2.37 billion), corresponding to an equity ratio of 51.1 percent (Dec. 31, 2014: 46.3 percent). At Wacker Chemie AG’s annual shareholders’ meeting, a resolution was passed to distribute € 74.5 million in retained profit from 2014 as dividends. The remaining retained profit of € 886.0 million was carried forward. Retained profit as of December 31, 2015 totaled € 1.22 billion, and primarily comprised the current net income in 2015 of € 335.8 million and the non-distributed profit carried forward from 2014.

Provisions for pensions and similar obligations continued to rise compared with the previous year, increasing by € 84.5 million to € 693.6 million (Dec. 31, 2014: € 609.1 million). This was chiefly due to the lower discount rate compared with the prior year. Other provisions decreased in 2015 by 4 percent to € 328.8 million (Dec. 31, 2014: € 342.6 million), and primarily comprised provisions for taxes, personnel and environmental protection. The main reason for this decline was the utilization of provisions for taxes. Overall, provisions accounted for 20 percent of total equity and liabilities.

As of the reporting date, financial liabilities amounted to € 855.3 million (Dec. 31, 2014: € 949.9 million). This decline of 10 percent was due mainly to repayment of bank loans. Bank loans amounted to € 756.1 million as of the reporting date (Dec. 31, 2014: € 899.4 million). Liabilities due to affiliated companies rose by € 50.2 million to € 95.7 million as of the reporting date (Dec. 31, 2014: € 45.5 million). Overall, the share of financial liabilities in total equity and liabilities declined to 17 percent (Dec. 31, 2014: 19 percent).

Trade payables declined slightly year over year, to € 148.0 million (Dec. 31, 2014: € 153.1 million). Other liabilities decreased once again due to the drop in advance payments received under polysilicon contracts and totaled € 450.0 million as of the closing date (Dec. 31, 2014: € 649.6 million). Polysilicon deliveries for which we had already received advance payments from customers as well as income related to the termination of long-term supply contracts together amounted to € 214.4 million. Advance payments received for polysilicon deliveries accounted for 8 percent of total equity and liabilities, and came to € 403.1 million (Dec. 31, 2014: € 617.5 million).

Deferred income came to € 38.8 million as of year-end 2015 (Dec. 31, 2014: € 39.0 million) and concerned an advance compensatory payment by Siltronic AG to Wacker Chemie AG in return for the transfer of employees to the latter.

Cash flow from operating activities rose year over year, from € 428.2 million to € 501.3 million – up 17 percent. This was mainly due to the lower level of working capital, especially as a result of reduced trade receivables and the fact that the year-over-year increase in inventories was only very low. Net income for 2015 includes higher non-cash expenses for pension provisions and other provisions. Non-cash income was roughly on a par with the prior year. As expected, advance payments received for polysilicon deliveries changed in the reporting year by € –214.4 million in line with the deliveries made and the advance payments retained in connection with terminated contracts.

At € –182.1 million, Wacker Chemie AG’s cash outflow from investing activities was considerably lower than in 2014 (€ –446.8 million). The main reason for this was the fact that a closed-end fund was largely sold, leading to a net cash inflow of € 189.0 million. In addition, investments in property, plant and equipment declined marginally, to € 135.2 million (2014: € 151.9 million). The majority of the funds were used for ongoing investments at the Burghausen site. Financial investments remained below the prior-year level as well. In 2015, capital increases for Wacker Polysilicon North America, LLC were carried out via an intermediate holding company. These increases were necessary to complete construction of the polysilicon production site at Charleston, Tennessee (USA). Financial investments also included a capital increase for Wacker Chemicals (China) Company Ltd. (Holding), Shanghai.

Net cash flow – as the sum of cash flow from operating activities excluding the change in advance payments received and cash flow from long-term investing activities (before securities) – improved substantially in the year under review, and amounted to € 352.9 million (2014: € 209.9 million).

Cash flow from financing activities totaled € –304.9 million (2014: € –266.6 million). Bank liabilities in the amount of € 150.0 million were repaid. Furthermore, Wacker Chemie AG’s amount of intra-Group financing was reduced in 2015, mainly due to cash inflows from the sale of shares in connection with the Siltronic AG IPO, which Wacker-Chemie Dritte Venture GmbH made available to Wacker Chemie AG by means of cash pooling. The dividend for fiscal 2014 led to an additional cash outflow of € –74.5 million.

Liquidity – defined as the sum of securities in current assets, shares in closed-end investment funds, and cash on hand and demand deposits – decreased substantially, from € 315.1 million to € 144.5 million as of December 31, 2015. Net financial debt – the balance of liquidity and liabilities to financial institutions – was only marginally higher, due to reduced liquidity in combination with lower bank liabilities. At year-end 2015, it amounted to € 611.6 million (2014: € 584.3 million).