✓ audited

8 – Other operating expenses

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Million €

2012

2011

Restructuring measures

197

233

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

215

203

Valuation adjustments on intangible assets and property, plant and equipment

377

366

Costs from miscellaneous revenue-generating activities

146

220

Expenses from foreign-currency and hedging transactions as well as market valuation

554

399

Losses from the translation of the financial statements in foreign currencies

54

56

Losses from the disposal of property, plant and equipment and divestitures

47

40

Oil and gas exploration expenses

222

184

Expenses from the addition of valuation allowances for business-related receivables

81

124

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

179

233

Other

599

632

 

2,671

2,690

In 2012, expenses for restructuring measures were primarily related to the site in Grenzach, Germany, in the amount of €47 million, and a site in France in the amount of €17 million. Further restructuring at several sites in the Performance Chemicals and Construction Chemicals divisions amounted to €24 million and €37 million, respectively. In 2011, expenses of €157 million related to the Cognis integration.

Further expenses were related to environmental protection and safety measures, costs of demolition and removal, and planning expenses related to capital expenditures that are not subject to mandatory capitalization according to IFRS. Expenses for demolition, removal and project planning totaled €169 million in 2012 and €128 million in 2011. These related in particular to the Ludwigshafen site. Furthermore, there were additions of €24 million to environmental provisions in 2012 for the remediation of landfills at several sites in North America. In 2011, expenses of €50 million arose from the remediation of landfills at various sites in Europe.

Valuation adjustments on intangible assets and property, plant and equipment of €200 million were related to impairment charges on a Norwegian oil field development project. Other valuation adjustments were recognized in the Construction Chemicals division for marketing and trademark rights amounting to €71 million and for property, plant and equipment at several sites amounting to €13 million. In 2011, impairments of €83 million related to property, plant and equipment in the Petrochemicals division at the site in Port Arthur, Texas, and impairments of €79 million related to Relius’ decorative paints business, which has since been sold. Furthermore, impairments also included €46 million for assets taken over as part of the Cognis acquisition and €54 million for property, plant and equipment in the Paper Chemicals division at a site in the United States.

Costs from miscellaneous revenue-generating activities were related to the respective items presented in other operating income.

Expenses from foreign-currency and hedging transactions as well as market valuation concerned foreign currency translations of receivables and payables as well as changes in the fair value of currency derivatives and other hedging transactions. In addition, expenses of €299 million resulted from the long-term incentive program (LTI program) owing to the rise in the share price. In 2011, expenses of €125 million resulted from the LTI program.

In 2012, losses from the disposal of property, plant and equipment and divestitures in the amount of €17 million arose from the sale of assets at several sites in North America. In 2011, losses of €12 million resulted from the sale of individual businesses and plants at the site in Hythe, United Kingdom.

Expenses from the addition of valuation allowances for business-related receivables declined in comparison to the previous year. This was due to the recognition of valuation allowances for receivables from an insolvent customer in the Oil & Gas segment in 2011.

Expenses from the use of inventory measured at market value and the derecognition of obsolete inventory were attributable to the use of inventory measured at market value during the Cognis acquisition amounting to €58 million in 2011.

Other expenses were the result of a legal settlement reached in the United States, the implementation of various projects and the recognition of provisions for onerous contracts. Further expenses related to REACH as well as to a number of other items. In addition, other expenses in 2011 resulted from the cost of a settlement reached in a further legal dispute in the United States.