19 – Capital, Reserves and Retained Earnings

Authorized capital

BASF SE has only issued fully paid-up registered shares with no par value. There are no preferential voting rights or other restrictions. BASF SE does not hold any treasury shares.

The Annual Shareholders’ Meeting of May 2, 2014, authorized the Board of Executive Directors, with the approval of the Supervisory Board, to increase subscribed capital by issuing new registered shares up to a total of €500 million against cash or contributions in kind until May 1, 2019. The Board of Executive Directors is authorized, with the approval of the Supervisory Board, to exclude shareholders’ statutory subscription rights in the cases specified in the authorizing resolution. To date, this option has not been exercised and no new shares have been issued.

Conditional capital

By way of a resolution of the Annual Shareholders’ Meeting of May 12, 2017, the Board of Executive Directors was authorized, with the approval of the Supervisory Board, to issue, on a one-off basis or in portions on more than one occasion, bearer or registered convertible bonds and/or bonds with warrants, or combinations of these instruments, with or without maturity limitations up to a nominal value of €10 billion until May 11, 2022. The notional interest in the share capital attributable to the BASF shares to be issued in connection with the debt instruments issued under this authorization may not exceed 10% of the share capital.

In this connection, the share capital was increased conditionally by up to €117,565,184 by issuing a maximum of 91,847,800 new registered BASF shares. The conditional capital increase will only be carried out to the extent to which holders of convertible bonds, or warrants attached to bonds with warrants issued, exercise their conversion or option rights. This authorization has not been exercised to date.

Authorization of share buybacks

By way of a resolution of the Annual Shareholders’ Meeting of May 12, 2017, the Board of Executive Directors was authorized to buy back shares until May 11, 2022, in accordance with section 71(1) no. 8 of the German Stock Corporation Act (AktG). The buyback cannot exceed 10% of the company’s share capital at the time the resolution was passed and can take place via the stock exchange, a public purchase offer addressed to all shareholders, or a public invitation to the shareholders to submit sales offers. This authorization has not been exercised to date.

Reserves and retained earnings

Capital reserves include effects from BASF’s share program, premiums from capital increases and consideration for warrants and negative goodwill from the capital consolidation resulting from acquisitions of subsidiaries in exchange for the issue of BASF SE shares at par value.

Transfers from other retained earnings increased legal reserves by €81 million in 2018 (2017: €53 million).

The acquisition of shares in companies that BASF already controls or that are included in the Consolidated Financial Statements as a joint arrangement is treated as a transaction between shareholders, as long as this does not lead to a change in the consolidation method. There were no transactions of this type in 2018, as in the previous year.

Payment of dividends

In accordance with the resolution of the Annual Shareholders’ Meeting on May 4, 2018, BASF SE paid a dividend of €3.10 per share from the retained profit of the 2017 fiscal year. With 918,478,694 qualifying shares, this represented total dividends of €2,847,283,951.40. The remaining €282,560,220.29 in retained profits was recorded under retained earnings.