9. Other Operating Income and Expenses

Income from the adjustment and release of provisions recognized in other operating expenses resulted in 2023 from the release of provisions for environmental measures in North America. As in the previous year, additional income resulted from release of provisions in connection with the restructuring of the Global Business Services unit. In addition, income resulted in both years from the adjustment to provisions for 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.

In both years, revenue from miscellaneous other activities primarily included income from rentals, catering operations, cultural events and logistics services. The rise in revenue over the previous year was largely compensated by higher production costs.

In 2023, income from hedging transactions and LTI programs mainly included income from the valuation of virtual and physical power purchase agreements in North America. A decline in income from hedging transactions for the procurement of natural gas was attributable to lower prices. Moreover, this item in the previous year had included income from the release of provisions for the long-term incentive (LTI) programs in the amount of €24 million. In 2023, by contrast, expenses were incurred for additions to these provisions.

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 2023 were mainly from the sale of an office building in Europe and the divestiture of some smaller businesses. In 2022, this item primarily consisted of gains on the sale of 51% of shares in the company holding the interest in the Hollandse Kust Zuid wind farm and the sale of the production site in Quincy, Florida.

• For more information, see Note 3

The rise in income from the reversal of valuation allowances for business-related receivables was particularly due to the reversal of valuation allowances relating to a transaction tax in Brazil.

In both years, income from refunds and government grants was mainly attributable to grants for regional business developments in China and other funding measures in various countries. Additionally, reimbursements from the government in connection with a plant closure in 2019 occurred in 2023.

Other income included income from the sale of CO₂ certificates in the amount of €185 million in 2023. Income in both years related to gains from the sale of precious metals as well as multiple other items.

In 2023, expenses from restructuring and integration measures related mainly to restructuring measures in connection with the cost savings program focusing on Europe, adjustments to production structures at the Verbund site in Ludwigshafen, Germany, and, as in the previous year, the carve-out of the BASF Environmental Catalyst and Metal Solutions unit within the Catalysts division. In both years, additional expenses were largely attributable to restructuring measures to improve competitiveness in various operating divisions and site closures in Europe and North America. Expenses also resulted in 2022 from the adjustment of business activities in Russia. In both years, expenses from integration measures related almost entirely to the integration of the battery materials business, which had been acquired in 2021.

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 €407 million in 2023 and €352 million in 2022, and related mainly to the site in Ludwigshafen, Germany, and the development of the new Verbund site in China in both years. Expenses for the battery materials business in Schwarzheide, Germany and Finland were also included in both years. Additionally, expenses of €123 million in 2023 and €59 million in 2022 arose from additions to environmental provisions which mainly concerned several discontinued sites in North America in both years.

Depreciation, amortization and impairments of noncurrent assets and of the disposal groups in 2023 included impairments in the amount of €1,149 million. These comprised impairments on property, plant and equipment in the Surface Technologies segment, especially in the battery materials business, on plants in the Agricultural Solutions segment and on property, plant and equipment and intangible assets in the Materials segment. In 2022, impairments amounted to €393 million relating primarily to plants in Ludwigshafen, Germany, and De Meern, Netherlands. Impairments to construction in progress from discontinued investment projects were also included in both years.

• For more information, see Note 14

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

Expenses from hedging transactions and LTI programs in 2023 included expenses of €83 million and in 2022 of €61 million from hedging transactions, primarily attributable in both years to expenses for option premiums used to hedge natural gas purchases. Furthermore, expenses arose from changes in the fair value of currency derivatives and other hedging transactions. LTI programs led to expenses in the amount of €35 million in 2023. In the previous year, income resulted from the reversal of provisions for LTI programs.

In both years, losses from divestitures and the disposal of noncurrent assets were mainly in connection with the divestiture of the site in De Meern, Netherlands. Additional expenses in 2023 resulted from purchase price adjustments for divestitures in previous years as well as consulting costs.

In both years, other expenses included expenses for litigation, for REACH, for the provision of services and for warranties. Furthermore, other expenses for societal engagement arose in both years.