11 – Financial Result

Financial result (Million €)

 

2020

2019

Interest income from cash and cash equivalents

146

168

Interest and dividend income from securities and loans

18

15

Interest income

164

183

Interest expenses

–537

–648

Interest result

–373

–465

 

 

 

Reversals of write-downs on / income from securities and loansa

22

26

Income from the capitalization of borrowing costs

30

35

Interest income on income taxesa

35

4

Miscellaneous financial income

31

16

Other financial income

118

81

Write-downs on / losses from securities and loans

–56

–8

Net interest expense from underfunded pension plans and similar obligations

–108

–155

Net interest expense from other long-term personnel obligations

–2

–5

Unwinding the discount on other noncurrent liabilities

–11

–11

Interest expenses on income taxesa

–20

–25

Miscellaneous financial expenses

–10

–117

Other financial expenses

–207

–321

Other financial result

–89

–240

 

 

 

Financial result

–462

–705

a

Reversals of write-downs on / income from securities and loans, interest income on income taxes and interest expenses on income taxes were reported as miscellaneous financial expenses in the previous year.

The interest result improved by €92 million year on year, to –€373 million, as a result of lower interest expenses. The decrease in interest expenses was mainly due to lower interest rates on financial debt, particularly commercial paper.

The rise in write-downs on / losses from securities and loans was primarily due to higher impairments on loans to nonconsolidated Group companies.

The net interest expense from underfunded pension plans and similar obligations declined year on year as a result of the lower interest rate used to determine expenses for pension benefits compared with the previous year.

The decline in other financial expenses was primarily due to lower net expenses associated with the translation of loans, bonds and commercial paper and the valuation of the corresponding hedging instruments against interest and currency risks.