14.2 Calculation of EBIT(DA) Before Special Items

EBIT Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards. (income after income taxes, plus income taxes, plus financial result), which is not defined in the International Financial Reporting Standards, is influenced by one-time special effects and by the amortization of intangible assets and depreciation of property, plant and equipment, along with impairment losses and impairment loss reversals. To elucidate the effects of these parameters on the operational business and facilitate the comparability of operational earning power over time, we determine additional indicators: EBITDA EBIT plus the amortization of intangible assets and the depreciation of property, plant and equipment, plus impairment losses and minus impairment loss reversals, recognized in profit or loss during the reporting period; this indicator is not defined in the International Financial Reporting Standards. , EBIT before special items EBIT plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards. , EBITDA before special items EBITDA plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards. and the EBITDA margin before special items The EBITDA margin before special items is calculated by dividing EBITDA before special items by sales. This indicator is not defined in the International Financial Reporting Standards. . These indicators also are not defined in the International Financial Reporting Standards.

EBITDA (EBIT plus the amortization of intangible assets and the depreciation of property, plant and equipment, plus impairment losses and minus impairment loss reversals, recognized in profit or loss during the reporting period) serves to characterize the operational business irrespective of the effects of amortization, depreciation or impairment losses/impairment loss reversals.

EBIT before special items and EBITDA before special items show the development of the operational business irrespective of the effects of special items – those that are nonrecurring or do not regularly recur or attain similar magnitudes. EBIT before special items and EBITDA before special items are determined by adding special charges and subtracting special gains. They constitute relevant key data for Bayer.

The EBITDA margin before special items, which is calculated by dividing EBITDA before special items by sales, serves as an indicator of relative operational earning power for purposes of internal and external comparison.

Depreciation, amortization and impairment losses were 14.1% higher in 2015 at €3,333 million (2014: €2,920 million), comprising €1,802 million (2014: €1,581 million) in amortization and impairments on intangible assets and €1,531 million (2014: €1,339 million) in depreciation and impairments on property, plant and equipment. A total of €136 million (2014: €68 million) in depreciation, amortization and impairments constituted special items.

In 2015, the following special effects were taken into account in calculating EBIT and EBITDA before special items:

Special Items Reconciliation

 

 

EBIT 4th Quarter 2014

EBIT 4th Quarter 2015

 

EBIT Full Year 2014

EBIT Full Year 2015

 

EBITDA 4th Quarter 2014

EBITDA 4th Quarter 2015

 

EBITDA Full Year 2014

EBITDA Full Year 2015

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

2014 figures restated

Before special items

 

991

1,024

 

5,833

7,069

 

1,829

1,903

 

8,685

10,266

HealthCare

 

(376)

(264)

 

(331)

(600)

 

(347)

(196)

 

(298)

(505)

Impairment losses / impairment loss reversals

 

(29)

(43)

 

(29)

(43)

 

(1)

 

(1)

Restructuring

 

(155)

 

(243)

 

(129)

 

(190)

Litigations

 

(88)

(2)

 

(88)

(16)

 

(88)

(2)

 

(88)

(16)

Integration costs

 

(86)

(50)

 

(153)

(227)

 

(86)

(50)

 

(149)

(227)

Settlement of pre-existing relationship

 

 

35

 

 

35

Divestitures

 

(173)

 

(96)

3

 

(173)

 

(96)

3

Revaluation of other receivables

 

(14)

 

(74)

 

(14)

 

(74)

CropScience

 

(32)

301

 

(32)

222

 

(2)

295

 

(2)

222

Litigations

 

(1)

303

 

(1)

285

 

(1)

303

 

(1)

285

Divestitures

 

(31)

 

(31)

(50)

 

(1)

(6)

 

(1)

(50)

Revaluation of other receivables

 

(2)

 

(13)

 

(2)

 

(13)

Covestro

 

(22)

(144)

 

(43)

(332)

 

(21)

(128)

 

(38)

(291)

Restructuring

 

(22)

(143)

 

(43)

(329)

 

(21)

(127)

 

(38)

(288)

Revaluation of other receivables

 

(1)

 

(3)

 

(1)

 

(3)

Reconciliation

 

(12)

(9)

 

(32)

(109)

 

(12)

(9)

 

(32)

(109)

Restructuring

 

(12)

(9)

 

(32)

(76)

 

(12)

(9)

 

(32)

(76)

Litigations

 

 

(32)

 

 

(32)

Revaluation of other receivables

 

 

(1)

 

 

(1)

Total special items

 

(442)

(116)

 

(438)

(819)

 

(382)

(38)

 

(370)

(683)

of which cost of goods sold

 

(68)

(169)

 

(80)

(440)

 

(37)

(144)

 

(49)

(363)

of which selling expenses

 

(50)

(118)

 

(63)

(198)

 

(21)

(107)

 

(34)

(183)

of which research and development expenses

 

1

(51)

 

(2)

(67)

 

1

(9)

 

(2)

(23)

of which general administration expenses

 

(23)

(43)

 

(55)

(203)

 

(23)

(43)

 

(51)

(203)

of which other operating income / expenses

 

(302)

265

 

(238)

89

 

(302)

265

 

(234)

89

After special items

 

549

908

 

5,395

6,250

 

1,447

1,865

 

8,315

9,583