32 – Related Party Transactions

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

The following tables show the volume of business with related parties that are included in the Consolidated Financial Statements at amortized cost or accounted for using the equity method. The values include sales, receivables, other receivables, liabilities and other liabilities with respect to the disposal groups and/or discontinued operations.

Since February 1, 2019, following the merger of the paper and water chemicals business with Solenis, the resulting sales, receivables and trade accounts payable as well as other liabilities to the Solenis group have been included in associated companies in the following table.

Since May 1, 2019, following the merger of the oil and gas businesses of Wintershall and DEA, the resulting sales as well as receivables and trade accounts payable to Wintershall Dea have been included in joint ventures in the following table.

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 businesses.

Sales from subsidiaries to BASF Group companies amounted to €233 million in 2019, and €191 million in 2018. Sales from joint ventures to BASF Group companies amounted to €785 million in 2019, and €543 million in 2018. Sales from associated companies to companies in the BASF Group amounted to €811 million in 2019, and €626 million in 2018.

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 decrease in both other receivables and other liabilities to joint ventures was due mainly to other finance-related receivables and/or liabilities to Wintershall companies.

The outstanding balances toward related parties were generally not secured and settled in cash.

The balance of valuation allowances on other receivables from nonconsolidated subsidiaries decreased from €76 million as of December 31, 2018, to €23 million as of December 31, 2019.

By contrast, the balance of valuation allowances on trade accounts receivable from associated companies increased by €1 million as of December 31, 2019. Of this amount, €1 million was also recognized as an expense.

BASF had obligations from guarantees and other financial obligations in favor of nonconsolidated subsidiaries in the amount of €10 million as of December 31, 2019 (December 31, 2018: €6 million), and in favor of associated companies in the amount of €36 million as of December 31, 2019 (December 31, 2018: €17 million).

Obligations arising from purchase contracts with joint ventures amounted to €4 million as of December 31, 2019, and €3 million as of December 31, 2018.

As of December 31, 2019, the present value of outstanding minimum rental payments for an office building including a parking area payable by BASF SE to BASF Pensionskasse VVaG for the nonterminable basic rental period to 2029 amounted to €86 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 2019.