BASF Report 2021 Management’s Report – Financial Position 63 Financial Position Equity and liabilities Equity and liabilities December 31, 2021 December 31, 2020 Million € % Million € % At a glance Subscribed capital and capital reserves 4,282 4.9 4,291 5.3 Retained earnings 40,365 46.2 37,911 47.2 ▪ Equity ratio of 48.2% after 42.8% in previous year Other comprehensive income –3,855 –4.4 –8,474 –10.6 ▪ Net debt slightly reduced to €14,352 million Noncontrolling interests 1,289 1.5 670 0.8 ▪ Rated A by Standard & Poor’s, Moody’s and Fitch Equity 42,081 48.2 34,398 42.8 ▪ Cash flows from operating activities and free cash flow higher year on year Provisions for pensions and similar obligations 6,160 7.0 8,566 10.7 Deferred tax liabilities 1,499 1.7 1,447 1.8 Equity rose by €7,683 million compared with the previous year to Tax provisions 415 0.5 587 0.7 €42,081 million. Retained earnings rose by €2,454 million, mainly Other provisions 1,782 2.0 1,484 1.8 because net income significantly exceeded the dividend payments of €3,031 million disbursed in the second quarter of 2021. Other Financial indebtedness 13,764 15.8 15,819 19.7 comprehensive income increased equity by €4,619 million, primarily Other liabilities 1,600 1.8 1,711 2.1 as a result of actuarial gains and currency effects. Noncurrent liabilities 25,220 28.8 29,614 36.9 The equity ratio improved from 42.8% to 48.2%. Accounts payable, trade 7,826 9.0 5,291 6.6 Compared with the 2020 year-end, noncurrent liabilities declined Provisions 3,935 4.5 2,825 3.5 by €4,394 million to €25,220 million. This was primarily attributable Tax liabilities 1,161 1.3 988 1.2 to the €2,406 million decrease in provisions for pensions and similar Financial indebtedness 3,420 3.9 3,395 4.3 obligations, mainly as a result of higher interest rates in all relevant Other liabilities 3,679 4.2 3,440 4.3 currency zones and returns on plan assets. Liabilities of disposal groups 61 0.1 341 0.4 Current liabilities 20,081 23.0 16,280 20.3 Furthermore, noncurrent financial indebtedness declined by €2,055 million. This was primarily due to the reclassification of three Total equity and liabilities 87,383 100.0 80,292 100.0 bonds with an aggregate carrying amount of €1,936 million and a loan in the amount of €240 million to current financial indebtedness. Exchange rates and interest had an offsetting effect. Tax provisions declined by €172 million year on year to €415 million. By contrast, deferred tax liabilities were slightly above the prior year- end figure, at €1,499 million.