6. Scope of Consolidation; Subsidiaries and Affiliates

6.1 Changes in the Scope of Consolidation

Changes in the scope of consolidation in 2015 were as follows:

Change in Number of Consolidated Companies

 

 

Germany

 

Other countries

 

Total

Bayer AG and consolidated companies

 

 

 

 

 

 

December 31, 2014

 

67

 

235

 

302

Changes in scope of consolidation

 

2

 

8

 

10

Additions

 

2

 

6

 

8

Retirements

 

(3)

 

(10)

 

(13)

December 31, 2015

 

68

 

239

 

307

The increase in the total number of consolidated companies in 2015 was primarily due to changes in the scope of consolidation and to acquisitions. Derecognitions were primarily due to mergers among Group companies.

Bayer Pearl Polyurethane Systems LLC, United Arab Emirates, is fully consolidated because the Bayer Group holds a majority of the voting rights.

Pure Salt Baytown LLC, United States, is fully consolidated as a structured entity. The Bayer Group guarantees the liabilities of Pure Salt Baytown LLC to banks. These liabilities, which are reflected in full in the consolidated statement of financial position, amounted to €17 million as of December 31, 2015 (2014: €20 million).

The above table includes one joint operation, LyondellBasell Covestro Manufacturing Maasvlakte V.O.F., Netherlands, as of December 31, 2015, and December 31, 2014. Pursuant to IFRS 11, Bayer’s share of this company’s assets, liabilities, revenues and expenses are included in the consolidated financial statements in accordance with Bayer’s rights and obligations. The main purpose of LyondellBasell Covestro Manufacturing Maasvlakte V.O.F. is the joint production of propylene oxide (PO) for Bayer and its partner Lyondell.

In conjunction with the acquisition of the consumer care business of Merck & Co., Inc., United States, Bayer entered into a strategic collaboration with that company. This collaboration is included in the consolidated financial statements as a joint operation. Bayer and Merck & Co., Inc., have mutually agreed to collaborate on the development, production, life-cycle management and marketing of active ingredients and products in the field of soluble guanylate cyclase (sGC) modulation.

Four (2014: three) associates and three (2014: three) joint ventures were accounted for in the consolidated financial statements using the equity method. Details of these companies are given in Note [19].

Flagship Ventures V Agricultural Fund, L.P., United States, was included in the consolidated financial statements for the first time in 2015 and classified as an associate. Bayer has no control over this associate despite owning 99.9% of the capital, but is able to significantly influence its financial and operating policy decisions.

Nanjing Baijingyu Pharmaceutical Co., Ltd., China, was classified as an associate in view of Bayer’s representation on its executive committee and supervisory board. This enables Bayer to significantly influence its financial and operating policy decisions despite owning only 15% of its voting rights and capital.

A total of 71 (2014: 78) subsidiaries, including one (2014: one) structured entity and 12 (2014: 12) associates or joint ventures that in aggregate are immaterial to the Bayer Group’s financial position and results of operations are not consolidated but recognized at cost. The immaterial subsidiaries accounted for less than 0.2% of Group sales, less than 0.3% of equity and less than 0.2% of total assets.

Details of subsidiary and affiliated companies pursuant to Section 313 of the German Commercial Code can be accessed at www.annualreport2015.bayer.com/companylist.pdf

The following domestic subsidiaries availed themselves in 2015 of certain exemptions granted under Section 264, Paragraph 3, and Section 264B of the German Commercial Code regarding the publication of legal-entity financial statements:

German Exempt Subsidiaries

Company Name

 

Place of Business

 

Bayer’s interest

 

 

 

 

%

Adverio Pharma GmbH

 

Schönefeld

 

100.0

AgrEvo Verwaltungsgesellschaft mbH

 

Frankfurt am Main

 

100.0

Alcafleu Management GmbH & Co. KG

 

Schönefeld

 

99.9

Bayer 04 Immobilien GmbH

 

Leverkusen

 

100.0

Bayer 04 Leverkusen Fußball GmbH

 

Leverkusen

 

100.0

Bayer Altersversorgung GmbH

 

Leverkusen

 

100.0

Bayer Animal Health GmbH

 

Leverkusen

 

100.0

Bayer Beteiligungsverwaltung Goslar GmbH

 

Leverkusen

 

100.0

Bayer Business Services GmbH

 

Leverkusen

 

100.0

Bayer Chemicals Aktiengesellschaft

 

Leverkusen

 

100.0

Bayer Consumer Care Deutschland GmbH

 

Berlin

 

100.0

Bayer CropScience Aktiengesellschaft

 

Monheim

 

100.0

Bayer CropScience Biologics GmbH

 

Wismar

 

100.0

Bayer CropScience Deutschland GmbH

 

Langenfeld

 

100.0

Bayer Direct Services GmbH

 

Leverkusen

 

100.0

Bayer Gastronomie GmbH

 

Leverkusen

 

100.0

Bayer Gesellschaft für Beteiligungen mbH

 

Leverkusen

 

100.0

Bayer HealthCare Aktiengesellschaft

 

Leverkusen

 

100.0

Bayer Innovation GmbH

 

Leverkusen

 

100.0

Bayer Intellectual Property GmbH

 

Monheim

 

100.0

Bayer Real Estate GmbH

 

Leverkusen

 

100.0

Bayer Schering Pharma AG

 

Berlin

 

100.0

Bayer Technology Services GmbH

 

Leverkusen

 

100.0

Bayer Vital GmbH

 

Leverkusen

 

100.0

Bayer Weimar GmbH und Co. KG

 

Weimar

 

100.0

Bayer-Handelsgesellschaft mit beschränkter Haftung

 

Leverkusen

 

100.0

BGI Deutschland GmbH

 

Leverkusen

 

100.0

Chemion Logistik GmbH

 

Leverkusen

 

100.0

Dritte Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Erste Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Erste K-W-A Beteiligungsgesellschaft mbH

 

Leverkusen

 

100.0

Euroservices Bayer GmbH

 

Leverkusen

 

100.0

Fünfte Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Generics Holding GmbH

 

Leverkusen

 

100.0

GP Grenzach Produktions GmbH

 

Grenzach-Wyhlen

 

100.0

Hild Samen GmbH

 

Marbach am Neckar

 

100.0

Intendis GmbH

 

Berlin

 

100.0

Intraserv GmbH & Co. KG

 

Schönefeld

 

100.0

Jenapharm GmbH & Co. KG

 

Jena

 

100.0

KOSINUS Grundstücks-Verwaltungsgesellschaft mbH & Co. Gamma OHG

 

Schönefeld

 

100.0

KVP Pharma+Veterinär Produkte GmbH

 

Kiel

 

100.0

MENADIER Heilmittel GmbH

 

Berlin

 

100.0

Schering-Kahlbaum Gesellschaft mit beschränkter Haftung

 

Berlin

 

100.0

Sechste Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Siebte Bayer VV GmbH

 

Leverkusen

 

100.0

Steigerwald Arzneimittelwerk GmbH

 

Darmstadt

 

100.0

TECTRION GmbH

 

Leverkusen

 

100.0

TravelBoard GmbH

 

Leverkusen

 

100.0

Vierte Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Zweite Bayer Real Estate VV GmbH & Co. KG

 

Schönefeld

 

100.0

Zweite K-W-A Beteiligungsgesellschaft mbH

 

Leverkusen

 

100.0

6.2 Business Combinations and Other Acquisitions

Acquisitions in 2015

The purchase prices for the acquisitions made in 2015, along with adjustments to purchase prices and purchase price allocations effected in 2015 relating to previous years’ transactions, totaled €8 million (2014: €13,741 million). The purchase prices of the acquired companies or businesses were settled mainly in cash. Adjustments to purchase price allocations and other adjustments reduced the total carrying amount of goodwill by €5 million (2014: €5,169 million increase). The changes in goodwill mainly resulted from the following transactions:

On March 2, 2015, Covestro successfully completed the acquisition of all the shares of Thermoplast Composite GmbH, Germany, a technology leader specializing in the production of thermoplastic fiber composites. The aim of the acquisition is to expand the range of polycarbonate materials for major industries to include composites made from continuous fiber-reinforced thermoplastics. A purchase price of €18 million was agreed. This includes a variable component of €4 million. The purchase price mainly pertained to patents and goodwill.

On July 1, 2015, CropScience completed the acquisition of all the shares of SeedWorks India Pvt. Ltd., based in Hyderabad, India. The company is specialized in the breeding, production and marketing of hybrid seeds of tomato, hot pepper, okra and gourds. It has research and seed processing locations in Bangalore and Hyderabad, respectively. The purchase of SeedWorks India is intended to further strengthen CropScience’s vegetable seed business in India. A purchase price of €80 million was agreed, subject to the usual purchase price adjustments. The purchase price mainly pertained to patents, research and development projects and goodwill.

As part of the acquisition of the consumer care business of Merck & Co., Inc., Whitehouse Station, New Jersey, United States, the production facilities at the Pointe-Claire site in Canada were acquired on July 1, 2015. A purchase price of €67 million was agreed.

The global purchase price allocation for the consumer care business acquired from Merck & Co., Inc. in 2014 was completed in September 2015.

This resulted in an adjustment to deferred tax assets due to temporary differences between the carrying amounts of intangible assets in the IFRS financial statements and those reported for tax purposes, along with a corresponding decline in goodwill in the statement of financial position. These deferred tax assets were retroactively restated to the date of acquisition pursuant to IFRS 3.45ff.

Change in Purchase Price Allocation

 

 

Dec. 31, 2014

 

 

Before change in purchase price allocation

 

Change in purchase price allocation

 

After change in purchase price allocation

 

 

€ million

 

€ million

 

€ million

Goodwill

 

16,168

 

(821)

 

15,347

Deferred taxes

 

2,981

 

821

 

3,802

In addition, the purchase price was reduced by €8 million in 2015 on the basis of agreed purchase price adjustment mechanisms.

The court proceedings initiated by former minority stockholders of Bayer Pharma AG (formerly Bayer Schering Pharma AG), Berlin, Germany, were settled in August 2015. The additional payment made as a result represents a subsequent purchase price adjustment according to the March 31, 2004, version of IFRS 3 in effect at the acquisition date. The goodwill was increased by €261 million in 2013 based on the status of the proceedings at that time. The settlements made it possible to finally determine the goodwill arising from the acquisition. It was therefore necessary to reduce the goodwill amount by €115 million in 2015 as a result of the proceedings. Both the increase and the reduction were recognized outside profit or loss against the liability resulting from the minority stockholders’ compensation claim.

The global purchase price allocation for Dihon Pharmaceutical Group Co. Ltd., Kunming, Yunnan, China, acquired in 2014, was completed in October 2015. The purchase price was reduced by €43 million in 2015 due to adjustment mechanisms.

The purchase price allocations for SeedWorks India Pvt. Ltd. and the production facilities at the Pointe-Claire site in Canada acquired from Merck & Co., Inc. currently remain incomplete pending compilation and review of the relevant financial information. It is therefore possible that changes will be made in the allocation of the purchase prices to the individual assets and liabilities.

The businesses of the above-mentioned acquired companies Thermoplast Composite GmbH and SeedWorks India Pvt. Ltd. contributed a total of €5 million to Bayer Group sales in 2015. EBIT Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards. of these businesses in 2015 totaled minus €5 million. Their total income after taxes since the respective dates of their first-time consolidation was minus €5 million. This includes the financing costs incurred since the respective acquisition dates.

If the above acquisitions had already been made as of January 1, 2015, the Bayer Group would have had total sales of €46,334 million in 2015. Group income after taxes and earnings per share would not have been materially affected.

The effects of these transactions and other, smaller transactions made in 2015 – along with adjustments to purchase prices and purchase price allocations made in 2015 relating to previous years’ transactions – on the Group’s assets and liabilities as of the respective acquisition or adjustment dates are shown in the table. Net of acquired cash and cash equivalents, the transactions resulted in the following cash outflow:

Acquired Assets and Assumed Liabilities (Fair Values at the Respective Acquisition Dates)

 

 

2014

Of which Merck CC

Of which Dihon

 

2015

Of which Merck CC

Of which Merck Canada

Of which Dihon

 

 

€ million

€ million

€ million

 

€ million

€ million

€ million

€ million

2014 figures restated

Goodwill

 

5,169

4,316

96

 

(5)

49

3

1

Patents and technologies

 

1,762

 

39

Trademarks

 

5,672

5,362

295

 

53

35

18

Production rights

 

71

 

R&D projects

 

16

 

26

Other rights

 

30

6

 

(20)

(20)

Property, plant and equipment

 

235

146

66

 

36

(23)

61

(2)

Other noncurrent assets

 

9

9

 

Deferred tax assets

 

1,264

1,222

3

 

(5)

(5)

Inventories

 

331

295

18

 

(44)

(46)

4

(8)

Receivables

 

222

106

70

 

57

43

3

(4)

Other current assets

 

 

Cash and cash equivalents

 

105

3

12

 

2

Provisions for pensions and other post-employment benefits

 

 

Other provisions

 

(105)

(101)

(3)

 

(85)

(50)

(3)

(19)

Financial liabilities

 

(213)

(20)

(65)

 

Other liabilities

 

(292)

(150)

(60)

 

(25)

7

(1)

(27)

Deferred tax liabilities

 

(535)

(2)

(46)

 

(21)

2

(2)

Net assets

 

13,741

11,177

401

 

8

(8)

67

(43)

Changes in noncontrolling interest

 

 

Purchase price

 

13,741

11,177

401

 

8

(8)

67

(43)

Acquired cash and cash equivalents

 

(105)

(3)

(12)

 

(2)

Advance purchase price payments made in prior years

 

 

(11)

(11)

Settlement gain from pre-existing relationship

 

(35)

 

111

Liabilities for future payments

 

(92)

(65)

 

Payments for previous years’ acquisitions

 

4

 

65

63

Purchase price adjustment

 

33

33

 

5

5

Net cash outflow for acquisitions

 

13,546

11,109

422

 

176

55

56

(38)

On December 19, 2015, Bayer entered into an agreement to create a joint venture with CRISPR Therapeutics AG, Basel, Switzerland. The joint venture is to be established in the first quarter of 2016. Its purpose is the development and commercialization of new methods to treat blood disorders, blindness and heart diseases. As of December 31, 2015, Bayer had capital contribution commitments of US$370 million to CRISPR Therapeutics AG and the joint venture yet to be established. These commitments mature on December 31, 2020, at the latest.

Acquisitions in 2014

In 2014, the following acquisitions were accounted for in accordance with IFRS 3:

On March 6, 2014, CropScience completed the acquisition of all the shares of Biagro Group, a producer and distributor of biological seed treatment solutions headquartered in General Las Heras in the province of Buenos Aires, Argentina. The company operates production facilities in Argentina and Brazil. Its portfolio of established brands includes seed-applied inoculants, plant-growth-promoting microorganisms and other products for integrated pest management based on bacterial and fungal strains. The acquisition helps CropScience to build on the success of its soybean seed business in Latin America. A one-time payment and purchase price adjustment totaling €10 million were agreed upon along with potential milestone payments reflected at €6 million in the purchase price allocation. The milestone payments are mainly dependent on the achievement of certain sales targets and product approvals. The purchase price mainly pertained to the technology platform and goodwill.

In March 2014, HealthCare successfully completed the takeover offer for the shares of Algeta ASA, Oslo, Norway, and acquired 100% of the outstanding shares. Bayer issued a takeover offer for all the shares of Algeta at a price of NOK 362 per share in cash on January 20, 2014. On expiration of the offer deadline, Bayer had received acceptances from Algeta shareholders representing about 98% of the share capital. On March 14, 2014, a compulsory acquisition process was carried out to obtain the remaining 2% of the shares, also at a price of NOK 362 per share.

Algeta creates novel cancer therapies based on its world-leading, patented technologies. The company develops alpha-pharmaceuticals designed to target cancers using the unique properties of alpha particle radiation. HealthCare and Algeta began collaborating in 2009 to develop and commercialize radium‑223 dichloride, which was approved in the United States in May 2013 under the tradename Xofigo™. The acquisition strengthened the oncology business of Pharmaceuticals. The purchase price was €1,974 million, including €35 million for the settlement of the pre-existing relationship between Algeta and Bayer. The latter amount represented the value of the advantage enjoyed by the acquirer from the contractual relationship that existed prior to the acquisition compared to market conditions for similar collaborations. The settlement amount was reflected in other operating income and at the same time increased the consideration transferred.

The purchase price mainly pertained to an intangible asset for the product-specific radium‑223 technology along with goodwill. The goodwill is mainly attributable to synergies in administration processes and infrastructure, including cost savings in the selling, research and development, and general administration functions.

On September 30, 2014, CropScience completed the acquisition of the seeds business of Granar S.A., headquartered in Encarnación, Paraguay. Granar specializes in the breeding, production and marketing of improved seed, especially soybean seed, that is adapted to the growing conditions in subtropical regions. It has a strong presence in Paraguay and Uruguay and an increasing presence in Brazil. Granar continued to sell the seed for its own account for the 2014 / 15 sowing season. Bayer took over marketing in 2015. Part of the agreed one-time payment of €15 million to acquire the business has been retained for disbursement over the next six years and is reflected at €2 million in the purchase price allocation.

On October 1, 2014, HealthCare completed the acquisition of the consumer care business of U.S. company Merck & Co., Inc., Whitehouse Station, New Jersey. The acquired business is primarily comprised of products in the cold, allergy, sinus & flu, dermatology (including sun care), foot health and gastrointestinal categories. The most important brands are Claritin™ (allergy), Coppertone™ (sun care), Mira™ (gastrointestinal) and Afrin™ (cold), and – in North America and Latin America – Dr. Scholl’s™ (foot health). These products complement Bayer’s existing range of nonprescription medicines.

In those countries where the consumer care business was acquired via an asset deal, Merck & Co., Inc. continued the sales activities in its own name for a transitional period until the marketing authorizations had been transferred to Bayer or Bayer was able to take over the business as distributor. During this period, the economic rewards and risks already accrued to Bayer, and Bayer received the operating profit on the business from Merck. The transitional period has ended.

Where the business was acquired via a share deal, Bayer purchased 100% of the respective company’s shares.

In 2014, Bayer paid a provisional purchase price of €11,177 million, less specific amounts that were retained pending the receipt of antitrust approvals in the Republic of Korea and the transfer of further assets. The provisional purchase price allocation mainly comprised goodwill of €5,137 million and acquired trademarks valued at €5,362 million. The goodwill amount was retroactively adjusted to €4,316 million as of the acquisition date. It is largely based on cost synergies, especially in marketing and manufacturing, as well as on sales synergies resulting from the increased distribution capability and use of the global infrastructure. As expected, a goodwill amount of €2,084 million is tax-deductible.

Upon closure of this acquisition, the strategic pharmaceutical collaboration agreed between Bayer and Merck & Co., Inc. in the field of soluble guanylate cyclase (sGC) modulation also came into effect. Bayer’s aim in entering into the global co-development and co-commercialization agreement, which has already received antitrust clearance, is to strengthen its development potential in the cardiovascular therapeutic area. In this connection, Merck & Co., Inc. is to make payments to Bayer of up to US$2.1 billion, comprising an up-front payment of US$1.0 billion (€793 million) made in 2014 and sales milestone payments of up to US$1.1 billion related to future joint activities with certain compounds, including Adempas™ (riociguat) to treat pulmonary hypertension. The one-time payment of €793 million is to be recognized in sales and earnings over a period of 13.5 years as the obligations are satisfied.

On November 1, 2014, Consumer Health acquired all the shares of Dihon Pharmaceutical Group Co. Ltd., Kunming, Yunnan, China. Dihon is a pharmaceutical company specializing in the manufacture and marketing of over-the-counter ( OTC At Bayer, OTC (over-the-counter) medicines are those obtainable without a prescription. In finance, OTC represents trade between financial market participants outside of an organized exchange. OTC transactions are nevertheless subject to securities trading laws. ) and herbal traditional Chinese medicine products. A provisional purchase price of €401 million was accounted for in 2014. This was based on a purchase price adjustment mechanism. The purchase price mainly pertained to acquired trademarks and goodwill.

On December 1, 2014, CropScience completed the acquisition of land management assets in the United States, Canada, Mexico, Australia and New Zealand from E. I. DuPont de Nemours and Company, United States. The acquisition provides CropScience with access to the growing forestry and range & pasture business segments in North America. Bayer paid a provisional purchase price of €120 million in 2014. A potential milestone payment for a successful registration was agreed upon in addition. This payment was included at €18 million in the purchase price allocation. The purchase price mainly pertained to intangible assets for product-related technologies and goodwill.

6.3 Divestitures, Material Sale Transactions and Discontinued Operation

Divestitures and material sale transactions in 2015

The effects of divestitures and material sale transactions made in 2015 and previous years on the consolidated financial statements were as follows:

On March 2, 2015, Consumer Health completed the sale of two equine products, Legend / Hyonate and Marquis, to Merial, Inc., Duluth, Georgia, United States. A purchase price of €120 million was agreed. The one-time payment is accounted for as deferred income. The purchase prices for Legend / Hyonate and Marquis will be reflected in sales and earnings over a four-year and a three-year period, respectively, as Bayer has entered into further significant obligations.

No assets or liabilities were derecognized in 2015 as a result of this divestiture.

Divested Assets and Liabilities

 

 

2014

 

2015

 

 

€ million

 

€ million

Goodwill

 

286

 

Patents and technologies

 

62

 

Other intangible assets

 

17

 

Property, plant and equipment

 

18

 

Other noncurrent assets

 

2

 

Inventories

 

10

 

Other current assets

 

 

Other provisions

 

 

Other liabilities

 

 

Divested net assets

 

395

 

Divestitures and material sale transactions in 2014

On August 29, 2014, Consumer Health completed the sale of the Interventional device business to Boston Scientific Corporation, Natick, Massachusetts, United States. The sale comprised the AngioJet™ thrombectomy system and the Jetstream™ atherectomy system, as well as the Fetch™2 aspiration catheter used in cardiology, radiology and peripheral vascular procedures. The total transaction price, including fees for transitional services to Boston Scientific and before Working capital is the difference between short-term current assets and short-term liabilities; it is calculated by deducting short-term liabilities from current assets (excluding cash and cash equivalents). In financial accounting, the change in working capital is one of the variables used to assess a company’s financial health. The objective of working capital management is to reduce working capital by minimizing the “financing gap” caused by the time lapse between the disbursement of funds (= payment for necessary raw materials) and the receipt of funds for the finished product. adjustments, was €315 million. Disregarding the transitional services, a special gain of €80 million was recognized in other operating income, and deferred income of €2 million was recognized in liabilities.

On October 1, 2014, the strategic pharmaceutical collaboration agreed between Bayer and Merck & Co., Inc., United States, in the area of soluble guanylate cyclase (sGC) modulation came into effect. Pharmaceuticals and Merck & Co., Inc. assumed joint control of the sGC modulators business. The collaboration agreement provides for future net Cash flow Key indicator for assessing a company’s financial strength; in addition to gross cash flow, the statement of cash flows also reports the cash flow from operating activities (net cash flow), which shows the amount of funds available from operating activities for financing investments, repaying debts or distributing dividends. The cash flows from investing and financing activities are also reported. to be equally shared between Bayer and Merck & Co., Inc. Of the goodwill allocated to the Pharmaceuticals segment, €173 million was derecognized through profit or loss as of the date the collaboration came into effect.

Discontinued operation

On June 8, 2015, an agreement was signed to sell the Diabetes Care business to Panasonic Healthcare Holdings Co., Ltd., Tokyo, Japan, for approximately €1 billion. The sale includes the leading Contour™ portfolio of blood glucose monitoring meters and strips, as well as other products such as Breeze™2, Elite™ and Microlet™ lancing devices. Implementation of the agreement began on January 4, 2016. Bayer has entered into further significant obligations, which are to be met over the next two years.

The Diabetes Care activities are reported as a Discontinued operations Business operations already divested or earmarked for divestiture in the near future; opposite of continuing operations . The respective information is provided from the standpoint of the Bayer Group and is not intended to present these activities as a separate entity.

The income statements for the discontinued operation are given below:

Income Statements for Discontinued Operations

 

 

2014

 

2015

 

 

€ million

 

€ million

1

EBIT = earnings before financial result and taxes

Net sales

 

900

 

947

Cost of goods sold

 

(357)

 

(380)

Gross profit

 

543

 

567

 

 

 

 

 

Selling expenses

 

(349)

 

(386)

Research and development expenses

 

(37)

 

(48)

General administration expenses

 

(38)

 

(36)

Other operating income / expenses

 

(8)

 

(20)

EBIT1

 

111

 

77

 

 

 

 

 

Financial result

 

 

 

 

 

 

 

Income before income taxes

 

111

 

77

 

 

 

 

 

Income taxes

 

(11)

 

3

 

 

 

 

 

Income after income taxes

 

100

 

80

The assets and liabilities of the discontinued operation are shown in the following table:

Assets and Liabilities of Discontinued Operations

 

 

Dec. 31, 2015

 

 

€ million

Noncurrent assets

 

 

Goodwill

 

36

Other intangible assets

 

4

Property, plant and equipment

 

8

 

 

48

Current assets

 

 

Inventories

 

135

 

 

135

 

 

 

Total assets

 

183

 

 

 

Noncurrent liabilities

 

 

Provisions for pensions and other post-employment benefits

 

23

 

 

23

Current liabilities

 

 

Other provisions

 

89

 

 

89

 

 

 

Total liabilities

 

112

In addition to the assets of the discontinued Diabetes Care business amounting to €183 million, the statement of financial position as of December 31, 2015, reflects a further €14 million in assets held for sale.

The Discontinued operations Business operations already divested or earmarked for divestiture in the near future; opposite of continuing operations affected the Bayer Group statement of cash flows as follows:

Cash Flows of Discontinued Operations

 

 

2014

 

2015

 

 

€ million

 

€ million

Net cash provided by (used in) operating activities (net cash flow)

 

113

 

43

Net cash provided by (used in) investing activities

 

(6)

 

(4)

Net cash provided by (used in) financing activities

 

(107)

 

(39)

Change in cash and cash equivalents