29 – Statement of cash flows and capital structure management Statement of cash flows Cash provided by operating activities contained the following payments: (XLS:) Download Million € 2017 2016 Income tax payments 2,147 1,495 Interest payments 409 459 Dividends received 498 225 Interest payments comprised interest payments received of €161 million (2016: €156 million) and interest paid of €570 million (2016: €615 million). In 2017, BASF SE transferred securities in the amount of €500 million to BASF Pensionstreuhand e.V., Ludwigshafen, Germany. This transfer was not cash effective and therefore had no effect on the statement of cash flows. In 2016, cash provided by operating activities included €262 million in pension benefits paid, which are covered by a contractual trust arrangement. Cash used in investing activities included €150 million in payments made for acquisitions (2016: €2,828 million). In the previous year, payments had especially been made for the acquisition of the global surface treatment provider Chemetall from Albemarle Corp., Charlotte, North Carolina. Payments of €177 million were received for divestitures in 2017 (2016: €664 million). In the previous year, payments had been received primarily from the sale of the Coatings division’s industrial coatings business to the AkzoNobel Group and from the sale of the global polyolefin catalysts business to W.R. Grace & Co., Columbia, Maryland. The payments made for property, plant and equipment, and intangible assets in the amount of €3,996 million included investments for 2017, to the extent that they already had an effect on cash. Cash and cash equivalents were not subject to any utilization restrictions, as in the previous year. For more information on cash flow from acquisitions and divestitures, see Note 2.4 (XLS:) Download Reconciliation according to IAS 7 (million €) Dec. 31, 2016 Cash-effective in cash provided by/used in fiancing activities Non-cash effective changes Dec. 31, 2017 Acquisitions/divestitures/changes inthe scope ofconsolidation Currency effects Other effects Changes in fair value 1 Includes additions from leasing contracts Financial indebtedness 16,312 2,330 4 (631) 17 – 18,032 Loan liabilities 357 (4) 29 (6) – – 376 Liabilities from finance leases 106 (31) – (5) 541 – 124 Other financing-related liabilities 516 542 (23) (3) 26 – 1,058 Financial and similar liabilities 17,291 2,837 10 (645) 97 – 19,590 Assets/liabilities from hedging transactions 205 411 – – – (734) (118) Total 17.496 3.248 10 (645) 97 (734) 19,472 The reconciliation shows changes in such financial liabilities and hedging transactions for which payments received and made are shown under cash provided by/used in financing activities in the statement of cash flows. Loan liabilities do not contain any interest components. Other financing-related liabilities primarily comprise liabilities from accounts used for cash pooling with BASF companies not included in the Consolidated Financial Statements. They are reported in miscellaneous liabilities within the balance sheet item other liabilities which qualify as financial instruments. The assets/liabilities relating to hedging transactions form part of the balance sheet item derivatives with positive or negative fair values and include only those transactions which hedge risks arising from financial indebtedness and financing-related liabilities secured by micro hedges. For more information on receivables and miscellaneous assets, see Note 18For more information on liabilities, see Note 24 Capital structure management The aim of capital structure management is to maintain the financial flexibility needed to further develop BASF’s business portfolio and take advantage of strategic opportunities. The objectives of the company’s financing policy are to secure solvency, limit financial risks and optimize the cost of capital. Capital structure management focuses on meeting the requirements needed to ensure unrestricted access to capital markets and a solid A rating. BASF’s capital structure is managed using selected financial ratios, such as dynamic debt ratios, as part of the company’s financial planning. The equity of the BASF Group as reported in the balance sheet amounted to €34,756 million as of December 31, 2017 (December 31, 2016: €32,568 million); the equity ratio was 44.1% on December 31, 2017 (December 31, 2016: 42.6%). BASF prefers to access external financing on the capital markets. A commercial paper program is used for short-term financing, while corporate bonds are used for financing in the medium and long term. These are issued in euros and other currencies with different maturities. The goal is to create a balanced maturity profile, achieve a diverse range of investors and optimize our debt capital financing conditions. Currently, BASF has the following ratings, which were most recently confirmed in the fourth quarter of 2017 (Moody’s: December 19, 2017; Standard & Poor’s and Scope: October 18, 2017). (XLS:) Download Dec. 31, 2017 Noncurrent financial indebtedness Current financial indebtedness Outlook Moody’s A1 P-1 stable Standard & Poor’s A A-1 stable Scope A S-1 stable (XLS:) Download Dec. 31, 2016 Noncurrent financial indebtedness Current financial indebtedness Outlook Moody’s A1 P-1 stable Standard & Poor’s A A-1 stable Scope A S-1 stable BASF strives to maintain at least a solid A rating, which ensures unrestricted access to financial and capital markets. For more information on financing policy and the Statement of Cash Flows, see the Management’s Report back next