Alternative Performance Measures

To describe the results of operations of the BASF Group, this Quarterly Statement also makes use of the following alternative performance measures, not defined by IFRS. These should not be viewed in isolation, but treated as supplementary information.

The special items used to calculate some alternative performance measures arise from the integration of acquired businesses, restructuring measures, impairments, gains or losses resulting from divestitures and the sale of shareholdings, and other expenses and income outside of the ordinary course of business.

Adjusting for special items makes income from operations (EBIT) before special items an especially suitable figure for illustrating the development of operating business over time as well as for forecasts. It is therefore among the most important performance measures for managing the BASF Group.

Income from operations before depreciation and amortization (EBITDA) describes operational performance independently of age-related amortization and depreciation of assets and any valuation allowances (impairments or write-ups). It is therefore particularly useful for comparing companies.

Compared with earnings per share, this measure has been adjusted for special items and amortization and impairments of intangible assets. The latter primarily result from the purchase price allocation following acquisitions. The amortization of intangible assets is therefore of a temporary nature. Adjusted earnings per share is a suitable measure for long-term comparability and predicting future profitability.