BASF Report 2021 Consoli dated Financial Statements – Notes 278 Reconciliation according to IAS 7 for 2021 changes presented on the left correspond to the figures in cash Million € flows from financing activities. Dec. 31, Dec. 31, 2020a Non-cash-effective changes 2021a Loan liabilities do not contain any interest components. Acquisitions/ Cash effective in divestitures/ cash flows changes in Additions Changes Other financing-related liabilities primarily comprise liabilities from from financing the scope of Currency from lease Other in fair accounts used for cash pooling with BASF companies not included activities consolidation effects contracts effects value Financial indebtedness 19,214 –2,575 97 411 – 37 – 17,184 in the Consolidated Financial Statements. They are reported in miscellaneous liabilities within the balance sheet item other liabilities Loan liabilities 559 –63 –53 6 – –8 – 441 that qualify as financial instruments. Lease liabilities 1,369 –551b –17 52 622 –61c – 1,414 Other financing-related liabilities 228 52 54 2 – 6 – 342 Assets/liabilities from hedging transactions form part of the Financial and similar liabilities 21,370 –3,137 80 471 622 –26 − 19,381 balance sheet items derivatives with positive and negative fair values Assets/liabilities from hedging transactions –43 –8 – – – – 56 5 respectively and include only those transactions which hedge risks arising from financial indebtedness and financing-related liabilities Total 21,327 –3,145 80 471 622 –26 56 19,386 secured by micro hedges. a Balances as of December 31, 2021 and 2020 also include contributions reclassified to the disposal groups and therefore deviate from balance sheet values. For more information on receivables and miscellaneous assets, see Note 18 from page 247 onward b Lease payments totaled €437 million in 2021. The principal component in the amount of €401 million is presented in cash flows from financing activities. BASF reports interest payments in cash flows from operating activities; these items amounted to €36 million. Advance payments for land use rights at the new Verbund site in Zhanjiang, China, in the amount of €150 million are also included in cash flows from financing activities. For more information on liabilities, see Note 21 from page 251 onward c Includes mainly disposals from lease contracts. For more information on the statement of cash flows, see the Management’s Report from page 65 onward Reconciliation according to IAS 7 for 2020 Capital structure management Million € Dec. 31, Dec. 31, The aim of capital structure management is to maintain the financial 2019a Non-cash-effective changes 2020a flexibility needed to further develop BASF’s business portfolio and Acquisitions/ take advantage of strategic opportunities. The objectives of the Cash effective in divestitures/ cash flows changes in Additions Changes company’s financing policy are to ensure solvency, limit financial from financing the scope of Currency from lease Other in fair risks and optimize the cost of capital. activities consolidation effects contracts effects value Financial indebtedness 18,392 1,615 –7 –789 – 3 – 19,214 Capital structure management focuses on meeting the requirements Loan liabilities 526 45 –10 –3 – 1 – 559 needed to ensure unrestricted access to the capital market and a b c Lease liabilities 1,478 –415 –54 –85 519 –74 – 1,369 solid A rating. The capital structure is managed using selected Other financing-related liabilities 284 –36 –19 2 – –3 – 228 financial ratios, such as dynamic debt ratios, as part of the company’ s Financial and similar liabilities 20,680 1,209 –90 –875 519 –73 − 21,370 financial planning. Assets/liabilities from hedging transactions –49 371 – – – – –365 –43 The equity of the BASF Group as reported in the balance sheet Total 20,631 1,580 –90 –875 519 –73 –365 21,327 amounted to €42,081 million as of December 31, 2021 (Decem- a Balances as of December 31, 2020 and 2019 also include contributions reclassified to the disposal groups and therefore deviate from balance sheet values. ber 31, 2020: €34,398 million); the equity ratio was 48.2% on b Lease payments totaled €453 million in 2020. The principal component in the amount of €415 million is presented in cash flows from financing activities. BASF reports interest payments in cash flows from operating activities; these items amounted to €38 million. December 31, 2021 (December 31, 2020: 42.8%). c Includes mainly disposals from lease contracts.