32 – Related-party transactions

A related party is a natural person or legal entity which can exert influence on the BASF Group or over which the BASF Group exercises control or joint control or a significant influence. In particular, this comprises nonconsolidated subsidiaries, joint ventures and associated companies.

The following tables show the volume of business with related parties that are included at amortized cost or accounted for using the equity method.

Sales and trade accounts receivable from and trade accounts payable to related parties mainly included business with own products and merchandise, agency and licensing businesses, and other operating business.

Other receivables and liabilities primarily arose from financing activities, from accounts used for cash pooling, outstanding dividend payments, profit-and-loss transfer agreements, and other finance-related and operating activities and transactions.

The decline in other receivables from associated companies and the increase in other receivables from joint ventures was largely due to the transfer of the financing function for the regulated gas transportation activities to the newly established joint venture W & G Infrastruktur Finanzierungs-GmbH, Kassel, Germany. Receivables from the associated companies GASCADE Gastransport GmbH, Kassel, Germany, and NEL Gastransport GmbH, Kassel, Germany, in the amount of €259 million were transferred to W & G Infrastruktur Finanzierungs-GmbH and a loan of €140 million was granted to it. The cash that was also transferred to the joint venture was deposited in the BASF Group’s cash pool and led to an increase of €665 million in other liabilities from joint ventures.

The €22 million decline in other liabilities from associated companies in 2017 was largely due to other financing-related liabilities.

Since the transfer of the global leather chemicals business to the Stahl group on September 29, 2017, BASF holds a minority interest in the parent company of the Stahl group, in which it can exercise significant influence. Sales, receivables, trade accounts receivable and other obligations resulting from transactions with Stahl group since then are included in the tables above in the values for associated companies in 2017.

The outstanding balances toward related parties were generally not secured and settled in cash. The balance of valuation allowances for trade accounts receivable from associated companies rose from €1 million as of December 31, 2016 to €9 million as of December 31, 2017.

Of this amount, €5 million was recognized as an expense in 2017 (2016: €1 million).

The balance of valuation allowances for other receivables from nonconsolidated subsidiaries decreased from €79 million as of December 31, 2016 to €74 million as of December 31, 2017. Of this amount, €1 million was recognized as an expense in 2017 (2016: €26 million).

There were obligations from guarantees and other financial obligations at BASF in favor of nonconsolidated subsidiaries in the amount of €5 million as of December 31, 2017 (December 31, 2016: €3 million) and in favor of associated companies in the amount of €23 million as of December 31, 2017 (December 31, 2016: €21 million).

There were no obligations arising from purchase contracts with associated companies as of December 31, 2017; as of December 31, 2016, these amounted to €26 million. Obligations arising from purchase contracts with joint ventures amounted to €3 million as of December 31, 2017, whereas there were no corresponding obligations as of December 31, 2016.

Effective December 31, 2017, the present value of the outstanding minimum rental payments for an office building including parking area payable by BASF SE to BASF Pensionskasse VVaG for the nonterminable basic rental period to 2029 amounted to €55 million.

There were no reportable related party transactions with members of the Board of Executive Directors or the Supervisory Board and their related parties in 2017.