18. Property, plant and equipment

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

	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)
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)
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

Write-downs of property, plant and equipment totaled €88 million, including €61 million related to the subgroups’ restructuring programs. A further material write-down consists of a €10 million impairment of property, plant and equipment that was utilized for the production of Trasylol®.

Further capital expenditures were made for the expansion of the production facilities in Shanghai, China. The total capital expenditures of €1,686 million include approximately €400 million for this major project alone.

In 2008, borrowing costs of €29 million (2007: €9 million) were capitalized as components of the cost of acquisition and construction of qualifying assets, applying an average financing cost factor of 6.2% (2007: 5%).

Capitalized property, plant and equipment includes assets with a total net value of €454 million (2007: €237 million) held under finance leases. The cost of acquisition and construction of these assets as of the balance sheet date totaled €989 million (2007: €719 million). They comprise plant installations and machinery with a carrying amount of €266 million, buildings with a carrying amount of €103 million and other assets with a carrying amount of €85 million. For information on the liabilities arising from finance leases see Note [27].

Also included are assets with a carrying amount of €15 million (2007: €51 million) leased to other parties under operating leases as defined in IAS 17 (Leases). The cost of acquisition of assets classified as operating leases is €33 million (2007: €70 million); their depreciation in 2008 amounted to €4 million (2007: €4 million).

In 2008 rental payments of €291 million (2007: €204 million) were made for assets leased under operating leases as defined in IAS 17 (Leases).

Changes in property, plant and equipment in 2007 were as follows:

	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, 2006	7,267	12,514	1,566	971	22,318
Changes in scope of consolidation	2	10	1	4	17
Acquisitions	28	36	-	5	69
Capital expenditures	117	273	144	1,046	1,580
Retirements	(413)	(290)	(167)	(23)	(893)
Transfers	189	277	93	(577)	(18)
Exchange differences	(191)	(372)	(38)	(64)	(665)
December 31, 2007	6,999	12,448	1,599	1,362	22,408

Accumulated depreciation and write-downs, December 31, 2006	3,670	8,703	1,049	29	13,451
Changes in scope of consolidation	(2)	3	-	-	1
Retirements	(356)	(274)	(142)	(2)	(774)
Depreciation and write-downs in 2007	370	711	184	5	1,270
Depreciation	278	681	181	-	1,140
Write-downs	92	30	3	5	130
Write-backs	(3)	(8)	(1)	-	(12)
Transfers	(28)	26	-	-	(2)
Exchange differences	(74)	(247)	(21)	(3)	(345)
December 31, 2007	3,577	8,914	1,069	29	13,589
Carrying amounts, December 31, 2007	3,422	3,534	530	1,333	8,819
Carrying amounts, December 31, 2006	3,597	3,811	517	942	8,867

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

Location	Principal use
Bayer HealthCare
Leverkusen, Germany	Headquarters, administration, formulation and packaging of pharmaceutical products
Bergkamen, Germany	Active ingredient production
Berkeley, U.S.A	Production, formulation and packaging of recombinant Factor VIII
Wuppertal, Germany	Production of active ingredients for pharmaceutical products, research and development
Berlin, Germany	Production and packaging of contrast media, packaging of solids, research and development, administration
Emeryville, U.S.A	Production and formulation of Betaferon® / Betaseron®
Myerstown, U.S.A	Formulation and packaging of Consumer Care products
Mishawaka, U.S.A	Production of instruments and test strips (Diabetes Care Division)
Bitterfeld, Germany	Formulation and packaging of Consumer Care products
Turku, Finland	Production of gynecological and andrological products, solids (oncology), research and development
Bayer CropScience
Monheim, Germany	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, Germany	Research and development for herbicides, manufacture of products for Crop Protection and Environmental Science
Haelen, Netherlands	Research, development and production of vegetable seeds
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
Bayer MaterialScience
Leverkusen, Germany	Headquarters, administration
Krefeld, Germany	Production of polycarbonates, diphenylmethane diisocyanate, chlorine, sodium hydroxide solution, hydrochloric acid and hydrogen
Baytown, U. S. A.	Production of base and modified isocyanates, polycarbonates, diphenylmethane diisocyanate, toluene diisocyanate, chlorine, sodium hydroxide solution, hydrochloric acid and hydrogen
Dormagen, Germany	Production of modified isocyanates, coating resins, polycarbonate film, toluene diisocyanate, polyether, thermoplastic polyurethanes, chlorine, sodium hydroxide solution, hydrochloric acid and hydrogen
Antwerp, Belgium	Production of polycarbonates, aniline, nitrobenzene and polyether
Brunsbüttel, Germany	Production of diphenylmethane diisocyanate, toluene diisocyanate, chlorine, hydrochloric acid and hydrogen
Shanghai, China	Production of base and modified isocyanates, polycarbonates, diphenylmethane diisocyanate, toluene diisocyanate (under construction)

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