1.2 – Restatement due to dissolution of gas trading business disposal group

BASF and Gazprom agreed on December 18, 2014, not to proceed with the asset swap planned for the end of 2014. The arrangement had been for Wintershall to give Gazprom its share in the jointly operated natural gas trading and storage business as well as a 50% share in Wintershall Noordzee B.V., Rijswijk, Netherlands. In return, BASF would have received 25% plus a share in blocks IV and V of the Achimov formation of the Urengoy natural gas and condensate field in western Siberia. At the end of 2012, the assets and liabilities affected by the swap were reclassified into a gas trading business disposal group in the financial statements. As a result of the transaction’s cancellation in December 2014, the reporting as a disposal group in accordance with IFRS 5 – Noncurrent Assets Held for Sale and Discontinued Operations was ceased, and the amortization and depreciation as well as equity-accounted income from the joint ventures that had been contained in the disposal group – and thus suspended since 2012 – were accounted for. The restatement of the 2012 business year reduced retained earnings by €10 million and minority interests by €38 million in the adjusted opening balance of January 1, 2013. In the 2013 business year, reintegrated depreciation and amortization reduced restated income from operations by €118 million. Depreciation and amortization led to a €93 million increase in cost of sales in 2013; selling expenses rose by €3 million, research expenses by €14 million, and other operating expenses by €8 million. Further adjustments predominantly affected income from companies accounted for using the equity method.

The necessary adjustments for the 2013 business year are summarized below.

Adjusted statement of income for 2013 due to dissolution of gas trading business disposal group (in million €)

 

 

 

2013
restated

2013
previous

change

Sales revenue

 

 

73,973

73,973

Cost of sales

 

 

(55,576)

(55,483)

(93)

Gross profit on sales

 

 

18,397

18,490

(93)

 

 

 

 

 

 

Selling expenses

 

 

(7,426)

(7,423)

(3)

General administrative expenses

 

 

(1,366)

(1,366)

Research expenses

 

 

(1,849)

(1,835)

(14)

Other operating income

 

 

1,679

1,679

Other operating expenses

 

 

(2,576)

(2,570)

(6)

Income from companies accounted for using the equity method

 

 

301

298

3

Income from operations

 

 

7,160

7,273

(113)

 

 

 

 

 

 

Income from other shareholdings

 

 

74

74

Expenses from other shareholdings

 

 

(70)

(70)

Interest income

 

 

160

160

Interest expense

 

 

(688)

(688)

Other financial income

 

 

238

238

Other financial expenses

 

 

(274)

(274)

Financial result

 

 

(560)

(560)

 

 

 

 

 

 

Income before taxes and minority interests

 

 

6,600

6,713

(113)

Income taxes

 

 

(1,487)

(1,540)

53

Income before minority interests

 

 

5,113

5,173

(60)

 

 

 

 

 

 

Minority interests

 

 

(321)

(331)

10

Net income

 

 

4,792

4,842

(50)

 

 

 

 

 

 

Earnings per share

 

5.22

5.27

(0.05)

Dilution effect

 

(0.01)

(0.01)

Diluted earnings per share

 

5.21

5.27

(0.06)

Adjusted income before minority interests and statement of income and expense recognized in equity for 2013 due to dissolution of gas trading business disposal group (in million €)

 

 

2013
restated

2013
previous

change

Income before minority interests

 

5,113

5,173

(60)

 

 

 

 

 

Remeasurements of defined benefit plans

 

1,531

1,531

Remeasurements due to acquisition of majority shares

 

(1)

(1)

Deferred taxes for items that will not be reclassified to the statement of income

 

(404)

(404)

Total income and expense recognized in equity that will not be reclassified to the statement of income at a later date

 

1,126

1,126

 

 

 

 

 

Foreign currency translation adjustment

 

(1,098)

(1,098)

Fair value changes in available-for-sale securities

 

(1)

(1)

Cash flow hedges

 

13

13

Hedges in net investments on foreign operations

 

Deferred taxes for items that will be reclassified to the statement of income

 

21

21

Total income and expense recognized in equity that will be reclassified to the statement of income at a later date

 

(1,065)

(1,065)

 

 

 

 

 

Minority interests

 

(34)

(34)

Total income and expense recognized in equity

 

27

27

 

 

 

 

 

Income before minority interests and statement of income and expense recognized in equity

 

5,140

5,200

(60)

Thereof attributable to shareholders of BASF SE

 

4,853

4,903

(50)

attributable to minority interests

 

287

297

(10)

Adjusted balance sheet for 2013 due to dissolution of gas trading business disposal group

 

 

 

 

 

 

 

 

Balance sheet – assets (in million €)

 

 

December 31, 2013

January 1, 2013

 

 

restated

previous

change

restated

previous

change

Intangible assets

 

12,324

12,235

89

12,284

12,193

91

Property, plant and equipment

 

19,229

18,254

975

17,507

16,610

897

Investments accounted for using the equity method

 

4,174

4,137

37

3,502

3,459

43

Other financial assets

 

643

630

13

613

613

Deferred tax assets

 

1,006

992

14

1,516

1,473

43

Other receivables and miscellaneous assets

 

877

876

1

913

911

2

Noncurrent assets

 

38,253

37,124

1,129

36,335

35,259

1,076

 

 

 

 

 

 

 

 

Inventories

 

10,160

9,592

568

10,269

9,581

688

Accounts receivable, trade

 

10,233

9,376

857

10,829

9,506

1,323

Other receivables and miscellaneous assets

 

3,714

3,630

84

3,570

3,455

115

Marketable securities

 

17

17

14

14

Cash and cash equivalents

 

1,827

1,815

12

1,654

1,647

7

Assets of disposal groups

 

2,828

(2,828)

3,264

(3,264)

Current assets

 

25,951

27,258

(1,307)

26,336

27,467

(1,131)

Total assets

 

64,204

64,382

(178)

62,671

62,726

(55)

 

 

 

 

 

 

 

 

Balance sheet – equity and liabilities (in million €)

 

 

December 31, 2013

January 1, 2013

 

 

restated

previous

change

restated

previous

change

Subscribed capital

 

1,176

1,176

1,176

1,176

Capital surplus

 

3,165

3,165

3,188

3,188

Retained earnings

 

26,102

26,170

(68)

23,698

23,708

(10)

Other comprehensive income

 

(3,400)

(3,400)

(3,461)

(3,461)

Equity of shareholders of BASF SE

 

27,043

27,111

(68)

24,601

24,611

(10)

Minority interests

 

630

678

(48)

972

1,010

(38)

Equity

 

27,673

27,789

(116)

25,573

25,621

(48)

 

 

 

 

 

 

 

 

Provisions for pensions and similar obligations

 

3,727

3,709

18

5,442

5,421

21

Other provisions

 

3,226

2,924

302

3,218

2,925

293

Deferred tax liabilities

 

2,894

2,849

45

2,290

2,234

56

Financial indebtedness

 

11,151

11,151

8,704

8,704

Other liabilities

 

1,194

1,157

37

1,135

1,111

24

Noncurrent liabilities

 

22,192

21,790

402

20,789

20,395

394

 

 

 

 

 

 

 

 

Accounts payable, trade

 

5,153

4,505

648

5,781

4,502

1,279

Provisions

 

2,670

2,616

54

2,774

2,628

146

Tax liabilities

 

968

954

14

878

870

8

Financial indebtedness

 

3,256

3,256

4,094

4,094

Other liabilities

 

2,292

2,182

110

2,782

2,623

159

Liabilities of disposal groups

 

1,290

(1,290)

1,993

(1,993)

Current liabilities

 

14,339

14,803

(464)

16,309

16,710

(401)

Total equity and liabilities

 

64,204

64,382

(178)

62,671

62,726

(55)

Adjusted statement of cash flows for 2013 due to dissolution of gas trading business disposal group (in million €)

 

 

2013
restated

2013
previous

change

Net income

 

4,792

4,842

(50)

Depreciation and amortization of intangible assets, property, plant and equipment and financial assets

 

3,314

3,196

118

Changes in inventories

 

(95)

(215)

120

Changes in receivables

 

1,056

512

544

Changes in operating liabilities and other provisions

 

(247)

508

(755)

Changes in pension provisions, defined benefit assets, net assets of disposal groups and other items

 

(717)

(970)

253

Gains(−)/losses(+) from disposal of noncurrent assets and securities

 

(3)

(3)

Cash provided by operating activities

 

8,100

7,870

230

 

 

 

 

 

Payments for property, plant and equipment and intangible assets

 

(4,873)

(4,660)

(213)

Payments for financial assets and securities

 

(796)

(784)

(12)

Payments for acquisitions

 

(1,156)

(1,156)

Payments from divestitures

 

63

63

Payments from the disposal of noncurrent assets and securities

 

768

768

Cash used in investing activities

 

(5,994)

(5,769)

(225)

 

 

 

 

 

Capital increases/repayments and other equity transactions

 

Additions to financial and similar liabilities

 

5,636

5,636

Repayment of financial and similar liabilities

 

(4,808)

(4,808)

Dividends paid

 

 

 

 

To shareholders of BASF SE

 

(2,388)

(2,388)

minority shareholders

 

(314)

(314)

Cash used in financing activities

 

(1,874)

(1,874)

Net changes in cash and cash equivalents

 

232

227

5

 

 

 

 

 

Change in cash and cash equivalents

 

 

 

 

From foreign exchange rates

 

(60)

(60)

changes in scope of consolidation

 

1

1

Cash and cash equivalents at the beginning of the year

 

1,654

1,647

7

Cash and cash equivalents at the end of the year

 

1,827

1,815

12