Calculation of EBIT(DA) Before Special Items

EBIT (income after income taxes, plus income taxes, plus financial result), which is not defined in the International Financial Reporting Standards, is influenced by 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 before special items, EBITDA before special items and the EBITDA margin before special items. 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, i.e. special effects for the company with regard to their nature and magnitude. These may include litigations, restructuring, integration costs, impairment losses and impairment loss reversals. In the calculation of EBIT before special items and EBITDA before special items, special charges are added and special gains subtracted. 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.

Special Items Reconciliation

 

 

EBIT Q3 2015

EBIT Q3 2016

 

EBIT 9M 2015

EBIT 9M 2016

 

EBITDA Q3 2015

EBITDA Q3 2016

 

EBITDA 9M 2015

EBITDA 9M 2016

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

2015 figures restated

Before special items

 

1,776

1,920

 

6,023

6,754

 

2,530

2,682

 

8,340

9,123

Pharmaceuticals

 

(7)

(6)

 

(109)

(248)

 

(7)

(5)

 

(105)

(15)

Restructuring

 

(7)

(6)

 

(42)

(18)

 

(7)

(5)

 

(38)

(16)

Litigations

 

 

(14)

1

 

 

(14)

1

Integration costs

 

 

(2)

 

 

(2)

Impairment losses / impairment loss reversals

 

 

(231)

 

 

Divestitures

 

 

3

 

 

3

Revaluation of other receivables

 

 

(54)

 

 

(54)

Consumer Health

 

(32)

(29)

 

(182)

(93)

 

(32)

(27)

 

(182)

(77)

Restructuring

 

(1)

(6)

 

(1)

(23)

 

(1)

(4)

 

(1)

(7)

Integration costs

 

(31)

(23)

 

(175)

(70)

 

(31)

(23)

 

(175)

(70)

Revaluation of other receivables

 

 

(6)

 

 

(6)

Crop Science

 

(4)

(71)

 

(79)

(104)

 

(3)

(71)

 

(73)

(104)

Restructuring

 

(18)

 

(46)

 

(18)

 

(46)

Litigations

 

 

(18)

(5)

 

 

(18)

(5)

Acquisition costs

 

(52)

 

(52)

 

(52)

 

(52)

Divestitures

 

(4)

(1)

 

(50)

(1)

 

(3)

(1)

 

(44)

(1)

Revaluation of other receivables

 

 

(11)

 

 

(11)

Animal Health

 

(7)

(1)

 

(45)

(2)

 

(5)

(1)

 

(22)

(2)

Restructuring

 

(7)

(1)

 

(45)

(2)

 

(5)

(1)

 

(22)

(2)

Reconciliation

 

(67)

(18)

 

(100)

(54)

 

(67)

(18)

 

(100)

(54)

Restructuring

 

(35)

(18)

 

(67)

(49)

 

(35)

(18)

 

(67)

(49)

Litigations

 

(32)

 

(32)

(5)

 

(32)

 

(32)

(5)

Revaluation of other receivables

 

 

(1)

 

 

(1)

Total special items Life Sciences

 

(117)

(125)

 

(515)

(501)

 

(114)

(122)

 

(482)

(252)

Covestro

 

(87)

 

(188)

 

(84)

 

(163)

Restructuring

 

(87)

 

(186)

 

(84)

 

(161)

Revaluation of other receivables

 

 

(2)

 

 

(2)

Total special items

 

(204)

(125)

 

(703)

(501)

 

(198)

(122)

 

(645)

(252)

of which cost of goods sold

 

(34)

(20)

 

(271)

(219)

 

(28)

(18)

 

(219)

(40)

of which selling expenses

 

(9)

(25)

 

(80)

(96)

 

(9)

(25)

 

(76)

(60)

of which research and development expenses

 

(5)

(13)

 

(16)

(66)

 

(5)

(13)

 

(14)

(33)

of which general administration expenses

 

(97)

(72)

 

(160)

(116)

 

(97)

(72)

 

(160)

(116)

of which other operating income / expenses

 

(59)

5

 

(176)

(4)

 

(59)

6

 

(176)

(3)

After special items

 

1,572

1,795

 

5,320

6,253

 

2,332

2,560

 

7,695

8,871

In the third quarter of 2016, depreciation, amortization and impairments were approximately level year on year at €765 million (Q3 2015: €760 million), comprising €397 million (Q3 2015: €402 million) in amortization and impairments on intangible assets and €368 million (Q3 2015: €358 million) in depreciation and impairments on property, plant and equipment. The impairments totaled €35 million (Q3 2015: €8 million) and included no special items (Q3 2015: €6 million).

Depreciation, amortization and impairments were 10.2% higher in the first nine months of 2016 at €2,618 million (9M 2015: €2,375 million), comprising €1,511 million (9M 2015: €1,273 million) in amortization and impairments on intangible assets and €1,107 million (9M 2015: €1,102 million) in depreciation and impairments on property, plant and equipment. The impairments totaled €333 million (9M 2015: €75 million), of which €244 million (9M 2015: €58 million) constituted special items.