9. Other Operating Income and Expenses

Income from the adjustment and release of provisions recognized in other operating expenses in 2021 resulted primarily from the release of provisions in connection with the restructuring of the Global Business Services unit. In both years, income also resulted from risks from lawsuits and damage claims, closures and restructuring measures, employee obligations, and various other individual items as part of the normal course of business. Provisions were reversed or adjusted if, based on the circumstances on the balance sheet date, utilization was no longer expected, or expected to a lesser extent.

As in the previous year, revenue from miscellaneous other activities primarily included income from rentals, catering operations, cultural events and logistics services. In 2020, €24 million in revenue from finance leases was also recognized.

Income from hedging transactions and LTI programs resulted exclusively from currency derivatives and other hedging transactions. No income from the release of provisions for the long-term incentive (LTI) program was recognized in 2021 or 2020.

Income from foreign currency transactions and the translation of financial statements in foreign currencies related to the translation of receivables and liabilities in foreign currencies and included income from the translation of companies’ financial statements whose local currency is different from the functional currency.

Gains on divestitures and the disposal of noncurrent assets in 2021 resulted from the sale of a production site in Kankakee, Illinois, the sale of the share in the condensate splitter in Port Arthur, Texas, and the sale of the precision microchemicals business. In 2020, this item included primarily income from the sale of fixed assets in the amount of €44 million.

Reversals of impairment losses on noncurrent assets arose in 2021 in connection with the planned divestiture of the production site in Quincy, Florida, and the associated attapulgite business.

Income from the reversal of valuation allowances for business-related receivables resulted both from the reversal of impairments for settled customer receivables for which impairments had been recorded previously as well as from adjusted expectations regarding default on individual customer receivables.

Other income included refunds in the amount of €211 million in 2021 and €151 million in 2020. This was due in both years to government grants in multiple countries, regional business development subsidies in China, and transaction tax refunds in Brazil. Additional income resulted in 2021 from compensation for environmental impact in the amount of €165 million and from special income from the sale of non-capitalized know-how in the amount of €50 million. In 2020, income was recognized in connection with the premature termination of a long-term supply agreement in North America in the amount of €103 million and from insurance refunds.

In 2021 and 2020, expenses from restructuring and integration measures were largely attributable to global restructuring activities to improve competitiveness in various operating divisions and site closures in Europe and North America (2021: €401 million, 2020: €435 million). In 2020, this item additionally contained expenses associated with the restructuring of the Global Business Services unit and site closures in Asia Pacific.

Expenses from integration measures in the amount of €21 million in 2021 related to the integration of the global polyamide business, which had been acquired from Solvay in 2020. In 2020, these expenses were €90 million. Furthermore, expenses of €7 million arose in 2021 from the integration of the battery materials business which was acquired in 2021 in China.

• For more information, see Note 3

Environmental protection and safety measures, costs of demolition and removal, and project costs not subject to mandatory capitalization were expensed if requirements for mandatory capitalization pursuant to IFRS were not met. Expenses for demolition, removal and project planning totaled €257 million in 2021 and €218 million in 2020. In both years, these mainly related to the Ludwigshafen site in Germany. Furthermore, expenses of €266 million in 2021 and €138 million in 2020 arose from the addition to environmental provisions. In both years, these concerned several discontinued sites in North America and, in 2020, additionally a site in Germany.

Depreciation, amortization and impairments of noncurrent assets and of the disposal groups were €135 million in 2021 and included impairments in the amount of €116 million resulting primarily from the closure of a plant in North America, impairments of plants in Asia, and impairments of construction in progress due to discontinued investment projects. In 2020, this item amounted to €2,968 million, primarily due to impairments of €2,368 million, which resulted from the economic impact of the coronavirus pandemic and affected all segments. In 2020, there were also impairments in the amount of €377 million because of restructuring in North America, Europe and Asia Pacific.

For more information, see:

• Note 14
• Note 15

Costs from other miscellaneous revenue-generating activities relate to the items presented in other operating income.

Expenses from hedging transactions and LTI programs related to expenses from LTI programs in the amount of €37 million in 2021 and €35 million in 2020. Further expenses resulted from changes in the fair value of currency derivatives and other hedging transactions.

As in the previous year, losses from divestitures and the disposal of noncurrent assets were mainly in connection with the divestiture of the global pigments business.

The rise in expenses from the addition of valuation allowances on business-related receivables resulted mainly from a transaction tax in Brazil.

In both years, other expenses included expenses for litigation, for REACH, for the provision of services, for warranties and for activities related to the BASF 4.0 project and for planning the new Verbund site in Guangdong, China. Other expenses arose in connection with the coronavirus pandemic in both years, but especially due to BASF’s “Helping Hands” aid campaign in 2020.