Annual Report 2010 - Knorr-Bremse AG.

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23
Financial results
2010 TEUR 2009 TEUR
Miscellaneous interest and similar income 6,163 5,129
Depreciation on investments (2,078) (3)
Interest and similar expenses (14,818) (8,742)
(thereof for discounts on accruals) (8,044)
Income from associated, affiliated and other companies (239) 80
Total (10,972) (3,536)
24
Extraordinary result
Extraordinary expenses reflect the one-off effect of adjustments in compliance with the German
Accounting Law Modernization Act.
25
Net income
2010 TEUR 2009 TEUR
Net income 239,381 98,729
Minority interests in earnings of consolidated subsidiaries (30,690) (6,398)
Retained earnings brought forward from the previous year (after
180,670 107,762
distribution of dividends)
Withdrawals from retained earnings (126,805) 32,577
Unappropriated consolidated net income (Knorr-Bremse
AG unappropriated retained earnings)
262,556 232,670
26
Financial derivatives
Financial instruments are not held for trading purposes.
Underlying transactions and their derivatives are bundled together as single items for valuation purposes
(“macro hedges”). These bundled derivatives are netted out without affecting net income wherever
the respective impact on income of the underlying transaction (hedged item) and the related
hedge offset each other (net hedge presentation method).
Forward exchange and option transactions are performed purely and exclusively in order to hedge current
and future foreign currency payables and receivables from the sale and purchase of goods and
services and the elimination of exchange rate risk for selected assets. The aim of hedging operations at
Knorr-Bremse is to reduce the risks posed by foreign exchange fluctuations to the ordinary course of
business. Currency hedging is based on the volume of open commitments arising or expected to arise
from core business activities. Maturities are based on the lifespans of the underlying business transactions,
whereby highly probable transactions are hedged over a rolling three-year planning period. Because
the conditions and parameters of the hedges match those of the hedged items, any payment