7 – Other operating income

Million €

 

2014

2013

Reversal of provisions

 

181

125

Revenue from miscellaneous revenue-generating activities

 

165

200

Income from foreign currency and hedging transactions

 

398

116

Income from the translation of financial statements in foreign currencies

 

75

29

Gains on the disposal of fixed assets and divestitures

 

772

640

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

 

47

39

Other

 

593

530

Other operating income

 

2,231

1,679

Reversal of provisions included income of €79 million from the reversal of the provision for the long-term incentive (LTI) program; this was due to the lower BASF share price in 2014. In 2013, however, expenses of €104 million resulted from the LTI program. These were reported under other operating expenses.

Furthermore, the reversal of provisions was predominantly related to closures and restructuring measures, employee obligations, and risks from lawsuits and damage claims, as well as various other items as part of the normal course of business. Provisions were reversed if the circumstances on the balance sheet date were such that utilization was no longer expected or expected to a lesser extent.

Revenue from miscellaneous revenue-generating activities primarily contained income from rentals, property sales, catering operations, cultural events and logistics services.

Income from foreign currency and hedging transactions concerned foreign currency translations of receivables and payables as well as changes in the fair value of currency derivatives and other hedging transactions. Compared with the previous year, higher income arose particularly from swaps for crude oil to hedge price risks from purchasing and selling contracts for natural gas.

Income from the translation of financial statements in foreign currencies included gains from the translation of companies outside of the eurozone that use the euro as their functional currency.

Gains on the disposal of fixed assets and divestitures in the amount of €458 million arose from the sale of the 50% share in Styrolution Holding GmbH, Frankfurt am Main, Germany, to INEOS.

Income of €132 million was related to the sale of selected oil and gas investments in the North Sea to the Hungarian MOL Group. Additional income in the amount of €109 million resulted from the sale of the share in the 50-50 joint operation Ellba Eastern Private Ltd., Singapore, to Shell as well as €31 million from the sale of the PolyAd Services business to Edgewater Capital Partners, L.P., Cleveland, Ohio.

The previous year primarly included €429 million in gains from the reclassification of GASCADE Gastransport GmbH, Kassel, Germany, due to loss of control following changes in corporate governance. In addition, there were disposal gains of €164 million for a 15% share in the Edvard Grieg development project in return for assets from Statoil ASA, Stavanger, Norway, in 2013.

Income on the reversal of valuation allowances for business-related receivables resulted mainly from the settlement of customer-related receivables for which a valuation allowance had been recorded.

Other income included government grants and government assistance to BASF from several countries amounting to €112 million in 2014 and €136 million in 2013. In both years, these were primarily attributable to price compensation from the Argentinian government for gas producers, which was introduced in connection with the New Gas Price Scheme (NGPS) due to the lower, partly locally regulated gas prices. Furthermore, other income in 2014 arose from insurance refunds in the amount of €53 million in connection with a plant outage at the Ellba joint operation in Moerdijk, Netherlands, as well as various settlements amounting to €43 million.

In addition, other income in 2013 had included a delayed earnings contribution from the fertilizer business.

Moreover, income in both years was related to gains from precious metal trading, additional insurance refunds, the reversal of impairments on property, plant and equipment, tax refunds and a number of other items.