18. Property, plant and equipment

Changes in property, plant and equipment in 2009 were as follows:

Changes in Property, Plant and Equipment					[Table 4.48]
	Land and buildings	Plant installations and machinery	Furniture, fixtures and other equipment	Construction in progress and advance payments	Total
	€ million	€ million	€ million	€ million	€ million
Cost of acquisition or construction, December 31, 2008	7,471	13,612	1,534	1,310	23,927
Changes in scope of consolidation	1	(2)	(4)	1	(4)
Acquisitions	1	1	3	-	5
Capital expenditures	203	357	147	635	1,342
Retirements	(144)	(324)	(153)	(10)	(631)
Transfers	233	607	47	(887)	-
Transfers (IFRS 5)	8	-	-	-	8
Changes from revaluation (IFRS 3)	-	-	-	-	-
Exchange differences	(26)	(88)	9	(7)	(112)
December 31, 2009	7,747	14,163	1,583	1,042	24,535

Accumulated depreciation and write-downs, December 31, 2008	3,809	9,538	1,069	19	14,435
Changes in scope of consolidation	2	(1)	(4)	-	(3)
Retirements	(98)	(305)	(141)	(2)	(546)
Depreciation and write-downs in 2009	253	812	184	23	1,272
Depreciation	238	764	182	-	1,184
Write-downs	15	48	2	23	88
Write-backs	-	-	-	-	-
Transfers	3	9	-	(12)	-
Transfers (IFRS 5)	4	-	-	-	4
Exchange differences	(4)	(38)	6	-	(36)
December 31, 2009	3,969	10,015	1,114	28	15,126
Carrying amounts, December 31, 2009	3,778	4,148	469	1,014	9,409
Carrying amounts, December 31, 2008	3,662	4,074	465	1,291	9,492

Write-downs of property, plant and equipment totaled €88 million, including €69 million related to the subgroups’ restructuring programs and €8 million related to plant closures in connection with the integration of Schering, Berlin, Germany.

Further capital expenditures were made for the expansion of production capacities in China. The total capital expenditures of €1,342 million included approximately €235 million for this major region.

In 2009, borrowing costs of €14 million (2008: €29 million) were capitalized as components of the cost of acquisition and construction of qualifying assets, applying an average financing cost factor of 4.9% (2008: 6.2%).

Capitalized property, plant and equipment included assets with a total net value of €469 million (2008: €454 million) held under finance leases. The cost of acquisition and construction of these assets as of the closing date totaled €1,038 million (2008: €989 million). They comprised plant installations and machinery with a carrying amount of €240 million (2008: €266 million), buildings with a carrying amount of €143 million (2008: €103 million) and other assets with a carrying amount of €86 million (2008: €85 million). For information on the liabilities arising from finance leases see Note [27].

Also included are assets with a carrying amount of €21 million (2008: €15 million) leased to other parties under operating leases as defined in IAS 17 (Leases). The cost of acquisition of assets classified as operating leases was €41 million (2008: €33 million); their depreciation in 2009 amounted to €4 million (2008: €4 million).

In 2009, rental payments of €203 million (2008: €291 million) were made for assets leased under operating leases as defined in IAS 17 (Leases).

Bayer sold a registered usufructuary right to real estate with a carrying amount of €130 million to a leasing company and leased it back immediately under an agreement that includes a right of repurchase upon expiration of the lease. This transaction, which is accounted for as a secured loan, does not restrict the operational use of the real estate.

Changes in property, plant and equipment in 2008 were as follows:

Changes in Property, Plant and Equipment (Previous Year)					[Table 4.49]
	Land and buildings	Plant installations and machinery	Furniture, fixtures and other equipment	Construction in progress and advance payments	Total
	€ million	€ million	€ million	€ million	€ million
Cost of acquisition or construction, December 31, 2007	6,999	12,448	1,599	1,362	22,408
Changes in scope of consolidation	45	3	(2)	1	47
Acquisitions	12	8	3	2	25
Capital expenditures	231	554	136	765	1,686
Retirements	(169)	(267)	(137)	(33)	(606)
Transfers	252	637	(59)	(841)	(11)
Transfers (IFRS 5)	-	-	-	-	-
Changes from revaluation (IFRS 3)	-	-	1	-	1
Exchange differences	101	229	(7)	54	377
December 31, 2008	7,471	13,612	1,534	1,310	23,927

Accumulated depreciation and write-downs, December 31, 2007	3,577	8,914	1,069	29	13,589
Changes in scope of consolidation	30	-	1	1	32
Retirements	(120)	(249)	(122)	(17)	(508)
Depreciation and write-downs in 2008	278	732	157	5	1,172
Depreciation	226	705	153	-	1,084
Write-downs	52	27	4	5	88
Write-backs	-	-	-	-	-
Transfers	4	23	(31)	-	(4)
Transfers (IFRS 5)	-	-	-	-	-
Exchange differences	40	118	(5)	1	154
December 31, 2008	3,809	9,538	1,069	19	14,435
Carrying amounts, December 31, 2008	3,662	4,074	465	1,291	9,492
Carrying amounts, December 31, 2007	3,422	3,534	530	1,333	8,819

The following tables provide an overview of the main sites operated by each subgroup:

Principal Subgroup Sites	[Table 4.50]
Location	Main activities
HealthCare
Leverkusen, Germany	Bayer HealthCare headquarters, administration, formulation and packaging of pharmaceutical products
Bergkamen, Germany	Active ingredient production
Berlin, Germany	Production and packaging of contrast media, packaging of solids, research and development, administration
Bitterfeld-Wolfen, Germany	Formulation and packaging of Consumer Care products
Wuppertal, Germany	Production of active ingredients for pharmaceutical products, research and development
Turku, Finland	Production of gynecological and andrological products, solids (oncology), research and development
Berkeley, U.S.A.	Production, formulation and packaging of recombinant Factor VIII
Emeryville, U.S.A.	Production and formulation of Betaferon®/Betaseron®
Mishawaka, U.S.A.	Production of instruments and test strips (Medical Care Division)
Myerstown, U.S.A.	Formulation and packaging of Consumer Care products
CropScience
Monheim, Germany	Bayer CropScience headquarters, administration, research and development for fungicides and insecticides
Dormagen, Germany	Development of new production processes and manufacture of products for Crop Protection and Environmental Science
Frankfurt am Main, Germany	Research and development for herbicides, manufacture of products for Crop Protection and Environmental Science
Ghent, Belgium	Research and development for seeds and agricultural crop traits
Haelen, Netherlands	Research, development and production of vegetable seeds
Institute, U.S.A.	Manufacture of products for Crop Protection and Environmental Science
Kansas City, U.S.A.	Manufacture of products for Crop Protection and Environmental Science
Vapi, India	Development of new production processes and manufacture of products for Crop Protection and Environmental Science
MaterialScience
Leverkusen, Germany	Bayer MaterialScience headquarters, administration, production of basic chemicals, functional films and modified isocyanates
Brunsbüttel, Germany	Production of diphenylmethane diisocyanate, toluene diisocyanate, chlorine, hydrochloric acid and hydrogen
Dormagen, Germany	Production of modified isocyanates, coating resins, polycarbonate films, toluene diisocyanate, polyether, thermoplastic polyurethanes, chlorine, sodium hydroxide solution, hydrochloric acid and hydrogen
Krefeld, Germany	Production of polycarbonates, diphenylmethane diisocyanate, chlorine, sodium hydroxide solution, hydrochloric acid and hydrogen
Antwerp, Belgium	Production of polycarbonates, aniline, nitrobenzene and polyether
Tarragona, Spain	Production of diphenylmethane disocyanate, polyether formulations
Baytown, U.S.A.	Production of base and modified isocyanates, polycarbonates, diphenylmethane diisocyanate, toluene diisocyanate, chlorine, sodium hydroxide solution,hydrochloric acid and hydrogen
Map Ta Phut, Thailand	Production of polycarbonates and polycarbonate films
Shanghai, China	Production of base and modified isocyanates, polycarbonates, diphenylmethane diisocyanate, toluene diisocyanate (under construction)

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