Notes to the Income Statements

Net Sales

Total reported net sales for 2018 amounted to €39,586 million, rising by €4,571 million, or 13.1%, compared with 2017. They were derived primarily from product deliveries. Breakdowns of net sales by segment and geographical area are given in the overview provided in Note “Segment reporting.”

Sales of €667 million were recognized in 2018 from performance obligations already satisfied in previous years. These sales primarily resulted from adjustments to refund liabilities for expected product returns, from rebates to be granted and from right-to-use licenses granted against sales-based royalties. Contractually agreed sales volumes pertaining to performance obligations not yet satisfied as of December 31, 2018, are expected to be reclassified to profit or loss as follows, taking into account anticipated sales deductions:

Allocation of Transaction Price to Unfulfilled Performance Obligations

 

 

€ million

Transaction price outstanding as of Dec. 31, 2018

 

2,107

of which to be recognized within 1 year

 

281

of which to be recognized between 1 and 2 years

 

266

of which to be recognized between 2 and 3 years

 

220

of which to be recognized between 3 and 4 years

 

163

of which to be recognized between 4 and 5 years

 

155

of which to be recognized after more than 5 years

 

1,022

The description above only accounts for customer contracts with an original contractual term of more than one year.

The change in contract liabilities between January 1, 2018, and December 31, 2018, was due to the following factors:

Roll Forward of Contract Liabilities

 

 

€ million

Contract liability balance as of Jan. 1, 2018

 

1,530

Changes due to business combinations

 

418

Additions

 

5,845

Revenue recognized in the current year that was included in the contract liability balance as of Jan. 1

 

(770)

Revenue recognized in the current year that was not included in the contract liability balance as of Jan. 1

 

(2,782)

Exchange differences

 

(20)

Contract liability balance as of Dec. 31, 2018

 

4,221

Contract liabilities mainly result from advance payments by customers for product deliveries and are predominantly recognized as sales within one year. In connection with the acquisition of Monsanto, certain Crop Science businesses were transferred to BASF. Portions of the purchase price were recognized as contract liabilities since certain payment components were not yet earned. Further significant amounts of contract liabilities comprised milestone payments already received for right-to-access licenses. The contract liabilities relating to these two factors will be recognized as sales over a period of more than five years.

Compare to Last Year