1 – Basis of presentation

Selected exchange rates

 

 

Closing rates

Average rates 1st Quarter

1 € equals

 

Mar. 31, 2015

Dec. 31, 2014

2015

2014

Brazil (BRL)

 

3.50

3.22

3.22

3.24

China (CNY)

 

6.67

7.54

7.02

8.36

Great Britain (GBP)

 

0.73

0.78

0.74

0.83

Japan (JPY)

 

128.95

145.23

134.12

140.80

Malaysia (MYR)

 

3.99

4.25

4.08

4.52

Mexico (MXN)

 

16.51

17.87

16.83

18.13

Russian Federation (RUB)

 

62.44

72.34

70.96

48.04

Switzerland (CHF)

 

1.05

1.20

1.07

1.22

South Korea (KRW)

 

1,192.58

1,324.80

1,240.16

1,465.34

United States (USD)

 

1.08

1.21

1.13

1.37

The Consolidated Financial Statements of the BASF Group for the year ending December 31, 2014, were prepared in accordance with the International Financial Reporting Standards (IFRS) valid as of the balance sheet date. The Interim Financial Statements as of March 31, 2015, have been prepared in line with the rules of International Accounting Standard 34 in abbreviated form and, with the exception of the changes outlined below, using the same accounting policies. The Interim Financial Statements and Interim Management’s Report have been neither audited nor have undergone an auditor’s review.

Change in presentation of joint operation sales in BASF Group Financial Statements

At its meeting on March 24, 2015, the IFRS Interpretation Committee (IFRIC) determined that, according to IFRS 11.20 (d), a joint operator’s share of the output purchased by another partner cannot be recognized as revenue as long as these sales correspond to the operator’s share of ownership interest in the joint operation. As a consequence of this determination, this portion of the joint operation’s sales to other partners has no longer been recognized as of January 1, 2015. Partners’ share of the output purchased in excess of their ownership interest will continue to be shown in the BASF Group Financial Statements as sales to third parties. Intercompany sales from the joint operation will also continue to be eliminated.

Sales in the first quarter of 2014 contained €158 million and for the full year €415 million that, according to the new recognition method, would have been eliminated against cost of sales. If the recognition method had remained unchanged, sales and cost of sales in the first quarter of 2015 would each have been €19 million higher. This immaterial change in recognition has no further impact on the presentation of the net assets, financial position and results of operations of the BASF Group.

Restatement of prior-year figures due to dissolution of natural 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 the stipulations of International Financial Reporting Standard 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.

Details on the restated prior-year figures due to the dissolution of the gas trading disposal group were published on February 27, 2015.

The following tables show the effects on significant comparative figures of the restatements necessary for the first quarter of 2014:

Overview of income statement information for the BASF Group

 

 

 

1st Quarter 2014

Income statement information

 

 

restated

previous

change

Sales

 

million €

19,512

19,512

Income from operations (EBIT)

 

million €

2,221

2,249

(28)

Financial result

 

million €

(183)

(183)

Income from shareholdings

 

million €

5

5

Interest result

 

million €

(124)

(124)

Other financial result

 

million €

(64)

(64)

Income before taxes and minority interests

 

million €

2,038

2,066

(28)

Income taxes

 

million €

(512)

(525)

13

Minority interests

 

million €

(62)

(64)

2

Net income

 

million €

1,464

1,477

(13)

Earnings per share

 

1.59

1.61

(0.02)

Overview of balance sheet for the BASF Group (in million €)

 

 

Mar. 31, 2014

Assets

 

restated

previous

change

Noncurrent assets

 

38,609

37,456

1,153

Current assets

 

29,124

30,484

(1,360)

Total assets

 

67,733

67,940

(207)

Overview of balance sheet for the BASF Group (in million €)

 

 

Mar. 31, 2014

Equity and liabilities

 

restated

previous

change

Equity

 

28,255

28,386

(131)

Noncurrent liabilties

 

24,664

24,254

410

Current liabilities

 

14,814

15,300

(486)

Total equity and liabilities

 

67,733

67,940

(207)

Overview of cash flows for the BASF Group (in million €)

 

 

1st Quarter 2014

Statement of cash flows

 

restated

previous

change

Cash provided by operating activities

 

1,747

1,704

43

Cash used in investing activities

 

(810)

(770)

(40)

Cash used in financing activities

 

389

389

Change in presentation of hedges for financial receivables and payables in the statement of cash flows

The presentation in the statement of cash flows of hedges for financial receivables and payables has been adjusted as of January 1, 2015. Without changing cash provided by operating activities, hedging is now better reflected by offsetting adjustment effects from underlying transactions with changes in the market value of hedging transactions in the line item “miscellaneous items.” The effects from hedging transactions were previously contained in the item “changes in net working capital.” The figures for 2014 have been adjusted accordingly.

In the first quarter of 2014, this led to a €78 million decrease in the line item “changes in net working capital” and a rise of €78 million in the line item “miscellaneous items.”

For the 2014 business year, this resulted in an increase of €76 million in changes in net working capital and a reduction of €76 million in miscellaneous items.