Financial result and net income
- Financial result significantly below level of 2011: previous year had included special income from sale of our shares in K+S Aktiengesellschaft
- Tax rate increases considerably, mostly due to continuous oil production in Libya
- Net income declines
The financial result was minus €540 million, significantly below the previous year’s value of €384 million. This was predominantly the result of special income of €887 million in income from participations that resulted from the sale of our stake in K+S Aktiengesellschaft in 2011. In the previous year, special items had improved the financial result by a total of €829 million. In 2012, a special charge of €88 million in the financial result arose from the market valuation of options for the disposal of our participation in the Styrolution joint venture. Income before taxes and minority interests therefore included special items totaling €7 million, compared with €968 million in the previous year.
At minus €573 million, the interest result matched the previous year’s level. Income from participations accounted for using the equity method improved to €171 million. Other financial expenses and income fell to minus €170 million.
Income before taxes and minority interests declined from €8,970 million to €8,436 million. Return on assets therefore amounted to 14.6%, compared with 16.1% in the previous year.
Despite decreased income before taxes and minority interests, income taxes rose by €847 million to €3,214 million. The tax rate increased significantly, from 26.4% to 38.1%, as a result of the continuous production of oil in Libya. In 2011, non-compensable income taxes on oil production totaled €439 million due to the suspension of oil production in Libya; these taxes amounted to €1,880 million in 2012. Furthermore, gains from the 2011 sale of our shares in K+S Aktiengesellschaft were predominantly tax-free.
Income before minority interests fell by €1,381 million to €5,222 million. Minority interests declined from €415 million to €343 million. The sharpest decline was posted at BASF TOTAL Petrochemicals LLC in Port Arthur, Texas, due to the temporary shutdown and maintenance of the steam cracker.
Net income amounted to €4,879 million – a decline of €1,309 million. Earnings per share thus fell from €6.74 to €5.31.