5 – Other operating income and expenses

Other operating income (million €)

 

 

2nd Quarter

1st Half

 

 

2015

2014

2015

2014

Income on the reversal of provisions

 

27

7

29

28

Revenue from miscellaneous revenue-generating activities

 

44

47

85

81

Income from foreign currency and hedging transactions

 

(27)

(9)

113

125

Income from the translation of financial statements in foreign currencies

 

(19)

18

85

24

Gains on the disposal of fixed assets and divestitures

 

82

44

142

181

Income on the reversal of valuation allowances for business-related receivables

 

10

13

21

21

Miscellaneous income

 

195

156

282

216

Other operating income

 

312

276

757

676

Other operating expenses (million €)

 

 

2nd Quarter

1st Half

 

 

2015

2014

2015

2014

Expenses from the LTI program as well as other personnel obligations

 

(163)

74

123

142

Restructuring measures

 

34

12

53

22

Environmental protection and safety measures, costs of demolition and removal, and project expenses related to capital expenditures that are not subject to mandatory capitalization

 

91

85

187

145

Amortization, depreciation and impairments of intangible assets and property, plant and equipment

 

57

55

76

57

Costs from miscellaneous revenue-generating activities

 

44

39

85

67

Expenses from foreign currency and hedging transactions

 

32

92

262

236

Losses from the translation of financial statements in foreign currencies

 

20

28

90

75

Losses from the disposal of fixed assets and divestitures

 

12

4

17

9

Oil and gas exploration expenses

 

31

23

80

47

Expenses from the addition of valuation allow-ances for business-related receivables

 

27

19

46

34

Expenses from the use of inventories measured at market value and the derecognition of obsolete inventory

 

66

36

110

70

Miscellaneous expenses

 

175

126

415

262

Other operating expenses

 

426

593

1,544

1,166

The balance from hedging transactions rose by €17 million quarter-on-quarter, from minus €48 million to minus €31 million; the first half of 2015 saw a year-on-year decline of €8 million, from minus €26 million to minus €34 million. This development was largely the result of oil swaps used by WINGAS GmbH, based in Kassel, Germany, to swap variable prices for fixed prices in order to hedge trading margins.

The balance from foreign currency transactions improved by €25 million compared with the previous second quarter, from minus €53 million to minus €28 million, yet it fell by €30 million in the first half, from minus €85 million in the first half of 2014 to minus €115 million in 2015. This was predominantly attributable to the fair value development of hedging transactions for the Russian ruble and the U.S. dollar.

The balance from the translation of financial statements in foreign currencies decreased by €29 million quarter-on-quarter, from minus €10 million to minus €39 million. At the same time, the balance from the translation of financial statements in foreign currencies rose by €46 million year-on-year, from minus €51 million in the first half of 2014 to minus €5 million in the first half of 2015. This was largely due to translation effects for subsidiaries outside of the eurozone that use the euro as their functional currency.

In the second quarter of 2015, gains on the disposal of fixed assets and divestitures mostly pertained to the divestiture of the global textile chemicals business to Archroma. Gains from the disposal of fixed assets and divestitures declined in the first half of 2015 compared with the same period of 2014, in which shares in non-BASF-operated oil and gas fields in the British North Sea had been sold to the Hungarian MOL Group.

Miscellaneous income rose in comparison with the corresponding period of the previous year due to insurance compensation received for a plant outage at the Ellba C.V. joint operation in Moerdijk, Netherlands. In addition, higher income arose from a price compensation for gas producers from the Argentinian government, which was introduced in connection with the New Gas Price Scheme (NGPS) due to the lower, partly locally regulated gas prices.

Expenses from the valuation of long-term incentive (LTI) options declined owing to the adjustment of provisions for the LTI program: Whereas the previous second quarter had contained expenses for the addition of provisions, the second quarter of 2015 included income from the reversal of provisions as a result of the lower share price.

The increase in miscellaneous expenses in the second quarter of 2015 was mainly attributable to expenses related to a plant outage at the Ellba C.V. joint operation in Moerdijk, Netherlands. In addition, the first half of 2015 included expenses of around €100 million for the anniversary bonus paid out to employees on the occasion of BASF’s 150th anniversary.