11 Equity / Non-Controlling Interests / Capital Structure Management

The subscribed capital (capital stock) of Wacker Chemie AG amounts to €260,763,000 and comprises 52,152,600 no-par-value shares (total). This corresponds to a notional par value of €5 per share. All of the shares are common shares – no other share classes have been issued. At the reporting date, no capital had been authorized for the issue of new shares. The Executive Board is authorized – in compliance with the provisions of Section 71 (1) No. 8 of the German Stock Corporation Act – to acquire treasury shares totaling a maximum of 10 percent of capital stock.

In the course of the IPO in April 2006, the number of shares outstanding increased due to the sale of some shares previously held as treasury shares. The following table shows the development in the year under review and in the prior year:

For more information on Wacker Chemie AG’s shareholder structure, please refer to the note concerning Related Party Disclosures.

Capital reserves include the amounts generated in previous years with the issue of shares above their nominal values, as well as other contributions made to equity.

Retained earnings include the amounts of accrued reserves generated at Wacker Chemie AG in previous fiscal years, transfers from the Group’s earnings for the year, the earnings of the consolidated companies less amounts due to non-controlling interests, changes to consolidated items affecting income, and changes in the scope of consolidation.

Other equity items include the differences arising from the currency translation of the financial statements of foreign subsidiaries using reporting currencies other than the euro, and the effects of the valuation of financial instruments, cash flow hedge accounting and pensions – recognized directly in equity.

The net result attributable to non-controlling interests is made up of the following profits and losses:

Non-controlling interests in equity primarily comprised the following companies:

The voting rights of non-controlling interests correspond to their equity share.

For further information on individual companies, please refer to the Breakdown of Shareholdings.

Information on Capital Management

The goal of the WACKER Group’s capital management policy is to ensure that the company remains a going concern in the long term and to generate an appropriate return on capital employed for the company’s shareholders. The capital management instruments employed to achieve this goal include dividend payments to shareholders and stock buybacks.

In managing its capital, Wacker Chemie AG complies with the legal stipulations on capital maintenance. The company’s Articles of Association do not stipulate any capital requirements. No special capital terminology is used. The Group’s general dividend policy is to distribute about 50 percent of Group net income to shareholders, provided the business situation permits and the committees responsible agree.

Above and beyond this, WACKER actively manages its debt capital with the aim of achieving a balanced financing portfolio, a diversified maturities profile and comfortable liquidity reserves. In addition, our corporate financial structures are designed to keep WACKER’s credit rating at least in the investment-grade range. In accordance with our policy of value-based management, net financial debt functions as a supplementary financial performance indicator.

As of the reporting date, the WACKER Group’s capital structure is as follows: