The financial expenses break down as follows:
Financial expense |
|
|
(€ thousand) |
2010 |
2009 |
|
|
|
Interest expenses from loans |
167,347 |
144,129 |
Foreign currency exchange rate losses |
53,877 |
28,904 |
Interest cost of defined benefit obligation |
41,434 |
37,836 |
Interest cost of leases |
35,951 |
41,153 |
Interest cost of shareholder loan |
27,882 |
27,882 |
Amortisation of finance costs |
8,333 |
1,418 |
Interest cost of non-current financial liabilities |
3,263 |
3,817 |
Other interest expenses and similar charges |
16,318 |
16,719 |
Total financial expense |
354,405 |
301,858 |
The interest expenses from loans include interest costs of €129,260 thousand (2009: €95,928 thousand) arising from variable-rate loan liabilities in connection with the senior facilities agreement and losses of €38,087 thousand (2009: €48,201 thousand) on interest rate swaps.
The foreign currency exchange rate losses include a loss of €38,219 thousand on the translation of a foreign-currency loan denominated in US dollars (2009: gain of €13,161 thousand) and losses on derivatives amounting to €15,641 thousand (2009: gain of €15,438 thousand).
The interest cost of leases relates to the interest portion of lease payments in financial services transactions in which risks and rewards are borne by KION Group companies as lessees (finance leases). Sale-finance leaseback-operating subleases (SALB-FL-OL) gave rise to interest expense of €16,615 thousand (2009: €19,580 thousand). This interest expense was not directly offset by any interest income. The interest income is a component of the lease payments reported within revenue.
The interest cost of the defined benefit obligation is the annual interest expense in connection with the non-current pension obligations.
