Additional indicators for results of operations

• EBITDA before special items and EBITDA considerably higher
• Adjusted earnings per share increase from €4.83 to €6.44

Aside from EBIT, EBIT before special items and EBIT after cost of capital – key performance indicators drawn upon to steer the BASF Group – we also provide additional performance indicators in this report that are not defined by IFRS. They should not be viewed in isolation, but treated as supplementary information.

Income from operations before depreciation, amortization and special items (EBITDA before special items) and income from operations before depreciation and amortization (EBITDA) are indicators that describe operational performance independent of age-related amortization and depreciation of assets and extraordinary valuation allowances (impairments or reversals of impairments). Both figures are therefore particularly useful in cross-company comparisons. EBITDA before special items is also highly useful in making comparisons over time.

EBITDA before special items rose by €2,200 million year-on-year to €12,527 million in 2017. At €12,724 million, EBITDA exceeded the prior-year figure by €2,198 million.

We calculate return on assets as income before taxes and minority interests, plus interest expenses, as a percentage of average assets employed. This indicator reflects the return independently of capital structure.

The return on assets was 10.8%, compared with 8.2% in the previous year. The considerable increase in income before taxes and minority interests with a simultaneous decrease in interest expenses more than offset the rise in average assets employed.

Compared with earnings per share, this figure has been adjusted for special items as well as amortization of and valuation allowances (impairments and reversals of impairments) on intangible assets. Amortization of intangible assets primarily results from the purchase price allocation following acquisitions and is therefore of a temporary nature. The effects of these adjustments on income taxes and on minority interests are also eliminated. This makes adjusted earnings per share a suitable measure for making comparisons over time and predicting future profitability.

In 2017, adjusted earnings per share amounted to €6.44 compared with €4.83 in the previous year.