[13] Financial expenses

Financial expenses break down as follows: > TABLE 051

Financial expense

 

051

in € million

2015

2014

Interest expense from loans

10.2

12.5

Interest expense from corporate bond

30.4

40.5

Interest cost of leases

49.9

48.1

Net interest expense from defined benefit plans

17.1

20.4

Amortisation of finance costs

1.3

10.3

Foreign currency exchange rate losses (financing)

7.0

3.5

Interest cost of non-current financial liabilities

0.7

1.8

Other interest expenses and similar charges

27.3

36.2

Total financial expense

144.0

173.2

In 2015, financial expenses decreased by a substantial €29.2 million year on year. This reduction was largely due to early repayment in 2014 of the fixed-rate tranche of the corporate bond issued in 2011, which was due to mature in 2018 and had a volume of €325.0 million, and the floating-rate tranche of the corporate bond issued in 2013, which was due to mature in 2020 and had a volume of €200.0 million. Early redemption of the two bond tranches caused interest expenses arising from capital market liabilities to reduce by €10.1 million year on year. In 2014, financial expenses had also included one-off expenses of €8.4 million in connection with the amortisation of borrowing costs and a payment of €14.8 million representing early repayment charges, which were reported in other interest expense and similar charges.

The interest cost of leases relates to the interest portion of lease payments in financial services transactions in which the material risks and rewards are borne by KION Group entities as lessees (finance leases). Sale and finance leaseback operating sub-leases (SALB-FL-OL) incurred interest expenses of €27.8 million (2014: €27.2 million). The income from corresponding customer agreements is, according to IAS 17, a component of the rental and lease payments received and is therefore reported within revenue rather than as interest income.

Net interest expense from defined benefit plans relates to the net interest cost of the net liability of pension plans applying the discount rate for plans in which pension obligations exceed plan assets.

The foreign currency exchange rate gains and losses (financing) include losses amounting to €0.3 million (2014: gains of €0.3 million) on derivative financial instruments used to hedge financial currency risk.