Financial Result

The financial result for 2018 was minus €1,596 million (2017: minus €1,326 million), comprising equity-method income of €68 million (2017: €20 million), financial expenses of €2,574 million (2017: €1,635 million) and financial income of €910 million (2017: €289 million). Details of the components of the financial result are provided in the following sections.

Income (loss) from investments in affiliated companies

The net income (loss) from investments in affiliated companies was comprised as follows:

Income (Loss) from Investments in Affiliated Companies

 

 

2017

 

2018

 

 

€ million

 

€ million

Net income (loss) from investments accounted for using the equity method (equity-method income / loss)

 

20

 

68

Expenses

 

 

 

 

Losses from the sale of investments in affiliated companies

 

(1)

 

Miscellaneous expenses from investments in affiliated companies

 

(1)

 

(459)

Income

 

 

 

 

Gains from the sale of investments in affiliated companies

 

5

 

304

Miscellaneous income from investments in affiliated companies

 

7

 

Total

 

30

 

(87)

Income from investments in affiliated companies accounted for using the equity method primarily comprised equity-method income of €103 million (2017: €51 million) from the interest in Covestro, which until May 2018 was accounted for in the Bayer Group consolidated financial statements as an associate using the equity method. The other main components of this item were equity-method losses of €26 million (2017: €15 million) from the BlueRock joint ventures and €22 million (2017: €16 million) from the Casebia Group.

Miscellaneous expenses from investments in affiliated companies included changes in the fair value of the remaining interest in Covestro, which has been presented as an equity instrument since May 2018.

Gains from the sale of investments in affiliated companies included the income from the sale of our interest in Covestro AG, which was accounted for using the equity method.

Further details of the companies accounted for using the equity method are given in Note “Investments accounted for using the equity method.”

Net interest expense

The net interest expense was comprised as follows:

Net Interest Expense

 

 

2017

 

2018

 

 

€ million

 

€ million

Interest and similar expenses

 

(685)

 

(1,386)

of which interest expense relating to nonfinancial liabilities

 

(54)

 

(92)

Interest and similar income

 

272

 

321

of which interest income relating to nonfinancial assets

 

96

 

65

Total

 

(413)

 

(1,065)

The change in the liability of a redeemable noncontrolling interest (IAS 32) is reflected in interest income or expense. In 2018, a €3 million (2017: €49 million) increase in this liability was recognized as interest expense.

Other financial income and expenses

Other financial income and expenses were comprised as follows:

Other Financial Income and Expenses

 

 

2017

 

2018

 

 

€ million

 

€ million

Expenses

 

 

 

 

Interest portion of interest-bearing provisions

 

(189)

 

(202)

Exchange gain (loss)

 

(326)

 

(271)

Miscellaneous financial expenses

 

(433)

 

(256)

Income

 

 

 

 

Miscellaneous financial income

 

5

 

285

Total

 

(943)

 

(444)

The interest portion of noncurrent provisions comprised €168 million (2017: €191 million) in interest expense for pension and other post-employment benefit provisions and minus €34 million (2017: €2 million) in effects of interest expense and interest-rate fluctuations for other provisions and corresponding overfunding. The interest expense for pension and other post-employment benefit provisions included €584 million (2017: €539 million) for the unwinding of discount on the present value of the defined benefit obligation and €416 million (2017: €348 million) in interest income from plan assets.

The miscellaneous financial expenses included €124 million (2017: €210 million) in commitment fees and other fees related to the syndicated bank financing for the acquisition of Monsanto. The €230 million in positive fair value changes (2017: €172 million in negative fair value changes) of the debt instruments (exchangeable bond) issued in June 2017 was recognized in miscellaneous financial income.

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