2.5 – Discontinued Operations/Disposal Groups Discontinued operationsAs of the binding agreement between BASF and LetterOne to merge their respective activities on September 27, 2018, the oil and gas business is presented as a discontinued operation. For more information, see Note 1.4The joint venture that will result from the merger will operate under the name Wintershall DEA. Although BASF will receive a majority stake in Wintershall DEA, the agreement stipulates joint control. With this transaction, the formation of a leading independent European oil and gas company is being pursued. BASF expects to close the transaction in the first half of 2019. Until closing, Wintershall and DEA will continue to operate as independent companies. BASF’s oil and gas activities are bundled in the Wintershall Group. Wintershall, headquartered in Kassel, Germany, focuses on exploration and production in oil and gas-rich regions in Europe, North Africa, Russia, South America and the Middle East. Wintershall is also active in the transport of natural gas in Europe with BASF’s Russian partner Gazprom. Impairments were not recorded for the discontinued oil and gas business on the date of reclassification to “held for sale” or at the end of the reporting period. The amounts in the following tables illustrate the consolidated contribution of discontinued operations. Earnings from discontinued operations are as follows: (XLS:) Download Statement of Income from discontinued operations (Million €) 2018 2017 Sales revenue 4,094 3,252 Cost of sales (2,024) (2,338) Gross profit on sales 2,070 914 Selling expenses (94) (80) General administrative expenses (68) (82) Research and development expenses (26) (45) Other operating income and expenses (248) (20) Income from companies accounted for using the equity method 99 248 EBIT 1,733 935 Financial result (19) (17) Income before income taxes 1,714 918 Income taxes (885) (158) Income after income taxes 829 760 of which attributable to noncontrolling interests (61) (41) Net income 768 719 Earnings per share from discontinued operations € 0.83 0.78 Amortization of intangible assets and depreciation of property, plant and equipment (until September 30, 2018) 617 1,024 of which impairments and reversals of impairments (until September 9, 2018) – (79) Of other comprehensive income after taxes attributable to BASF SE shareholders totaling minus €608 million (2017: minus €1,268 million), minus €102 million (2017: minus €327 million) related to discontinued operations and minus €506 million (2017: minus €941 million) to continuing operations. Discontinued operations accounted for the following amounts in BASF’s Statement of Cash Flows: (XLS:) Download Cash flows from discontinued operations (Million €) 2018 2017 Cash flows from operating activities 1,554 1,835 Cash flows from investing activities (1,011) (920) Cash flows from financing activities (346) (387) Total 197 528 The carrrying amounts of the balance sheet items of the discontinued operations are presented in the following table “Disposal groups as of December 31, 2018.” Groups of assets and liabilities held for sale (disposal groups)On May 3, 2018, BASF and Solenis announced that they had signed an agreement on the combination of BASF’s paper and water chemicals business with Solenis. The relevant assets and liabilities were reclassified to a disposal group. No impairments were recognized for the disposal group for the paper and water chemicals business on the date of reclassification to “hold to sell” or at the end of the reporting period. The business was allocated to the Performance Chemicals division until the transaction closed on January 31, 2019. The values for the disposal groups are presented in the following table. Other comprehensive income included minus €1,174 million for the oil and gas disposal group as of December 31, 2018. The paper and water chemicals business disposal group did not contribute to other comprehensive income. (XLS:) Download Disposal groups as of December 31, 2018 (Million €) Paper and water chemicals business Oil and gas business Total Balance sheet Goodwill 39 1,572 1,611 Other intangible assets 10 724 734 Property, plant and equipment 312 6,959 7,271 Investments accounted for using the equity method – 2,565 2,565 Other financial assets – 2 2 Deferred tax assets – 128 128 Other receivables and miscellaneous assets – 896 896 Noncurrent assets 361 12,846 13,207 Inventories 158 136 294 Accounts receivable, trade – 614 614 Other receivables and miscellaneous assets – 273 273 Marketable securities – – – Cash and cash equivalents – 219 219 Current assets 158 1,242 1,400 Assets of the disposal group 519 14,088 14,607 Provisions for pensions and similar obligations 3 307 310 Other provisions – 1,605 1,605 Deferred tax liabilities – 1,637 1,637 Financial indebtedness – 499 499 Other liabilities – 217 217 Noncurrent liabilities 3 4,265 4,268 Accounts payable, trade – 342 342 Provisions – 72 72 Tax liabilities – 228 228 Financial indebtedness – 10 10 Other liabilities – 833 833 Current liabilities – 1,485 1,485 Liabilities of the disposal group 3 5,750 5,753 Net assets 516 8,338 8,854 back next