BASF SE

Interim / Quarterly Report • Jul 28, 2011

Interim Report

1st Half 2011 (January – June)

BASF with strong fi rst half 2011

• Sales and earnings signifi cantly above previous year's levels
• Outlook for 2011 confi rmed

BASF Group 1st Half 2011

Million €	2nd Quarter			1st Half
	2011	2010	Change in %	2011	2010	Change in %
Sales	18,461	16,214	13.9	37,822	31,668	19.4
Income from operations before depreciation and amortization (EBITDA)	3,015	2,867	5.2	6,380	5,494	16.1
Income from operations (EBIT) before special items	2,237	2,206	1.4	4,969	4,160	19.4
Income from operations (EBIT)	2,217	2,079	6.6	4,767	3,919	21.6
Financial result	(121)	(93)	(30.1)	709	(173)
Income before taxes and minority interests	2,096	1,986	5.5	5,476	3,746	46.2
Net income	1,454	1,183	22.9	3,865	2,212	74.7
Earnings per share (€)	1.59	1.29	23.3	4.21	2.41	74.6
Adjusted earnings per share (€)1	1.75	1.50	16.7	3.69	2.82	30.9
EBITDA margin (%)	16.3	17.7	–	16.9	17.3	–
Cash provided by operating activities	783	1,353	(42.1)	3,038	2,721	11.7
Additions to long-term assets2	859	494	73.9	1,381	874	58.0
Research and development expenses	391	376	4.0	771	726	6.2
Amortization and depreciation2	798	788	1.3	1,613	1,575	2.4
Segment assets (as of June 30)3	49,250	45,549	8.1	–	–	–
Personnel costs	2,273	2,166	4.9	4,457	4,116	8.3
Number of employees (as of June 30)	110,289	103,284	6.8	–	–	–

¹ For further information, see page 35

² Intangible assets and property, plant and equipment (including acquisitions)

³ Intangible assets, property, plant and equipment, inventories and business-related receivables

Contents

Interim Management's Analysis

BASF Group Business Review	1
BASF on the Capital Market4	5
Significant Events and Economic Environment	6
Chemicals	7
Plastics	8
Performance Products	9
Functional Solutions	11
Agricultural Solutions	12
Oil & Gas	13
Regional Results	14
Overview of Other Topics	15
Outlook	16

Interim Financial Statements

Consolidated Statements of Income	17
Consolidated Balance Sheets	18
Consolidated Statements of Cash Flows	19
Consolidated Statements of Recognized Income
and Expense	20
Consolidated Statements of Stockholders' Equity	21
Segment Reporting	22
Notes to the Interim Financial Statements	24
Calculation of Adjusted Earnings per Share	35
Statement in Accordance with Section 37y and Section
37w (2) No. 3 of the German Securities Trading Act	36

⁴ This section is not part of the interim management's analysis.

Change in comparison with 1st half 2010

1st Half

Sales EBIT

before special items

2011 +19% +19%

Cover photo: Elke Balz, laboratory technician at BASF, monitors the color analysis of carotinoid powders. Nature-identical carotinoids are used to give drinks, ice cream and other food products an appealing color, ranging from yellow to red.

BASF's Segments

Chemicals Page 7

In the Chemicals segment, we supply products to customers in the chemical, electronics, construction, textile, automotive, pharmaceutical and agricultural industries as well as many others. We also ensure that other BASF segments are supplied with chemicals for producing downstream products. Our portfolio ranges from basic chemicals, glues and electronic chemicals for the semiconductor and solar cell industries, to solvents and plasticizers, as well as starting materials for detergents, plastics, textile fibers, paints and coatings, crop protection products and pharmaceuticals.

Plastics Page 8

Functional Solutions Page 11

Performance Products Page 9

Performance Products lend stability and color to countless everyday items and help to improve their application profile. Our product portfolio includes vitamins and food additives as well as ingredients for pharmaceuticals and for hygiene, home and personal care items. Other Performance Products improve processes in the paper industry, oil and gas production, mining and water treatment. They can also enhance the efficiency of fuels and lubricants, the effectiveness of adhesives and coatings, and the stability of plastics.

In the Functional Solutions segment, we bundle system solutions and innovative products for specific sectors and customers, in particular for the automotive and construction industries. Our portfolio comprises automotive and industrial catalysts, automotive and industrial coatings and concrete admixtures as well as construction systems such as tile adhesives and architectural coatings.

Agricultural Solutions Page 12

Our crop protection products guard against fungal diseases, insects and weeds and they increase quality and secure crop yields. Our research in plant biotechnology concentrates on plants for greater efficiency in agriculture, healthier nutrition and for use as renewable raw materials. Research and development expenses, sales, earnings and all other data of BASF Plant Science are not included in the Agricultural Solutions segment; they are reported in Other.

Oil & Gas Page 13

As the largest German producer of oil and gas, we focus our exploration and production on oil- and gas-rich regions in Europe, North Africa, South America, Russia and the Caspian Sea region. Together with our Russian partner Gazprom, we are active in the transport, storage and trading of natural gas in Europe.

BASF's Innovations

X-Seed: From nanocrystals to concrete components

X-Seed® crystals from BASF make concrete harden faster and reduce carbon emissions

They're everywhere, although we hardly spare a thought for them in everyday life – precast concrete components. Whether it's bridge girders, sewer pipes, staircases or railway sleepers: millions of these structural elements are industrially prefabricated and installed on-site. With the hardening accelerator X-Seed® from BASF, precast concrete components can be manufactured faster. Furthermore, X-Seed helps to considerably reduce energy consumption and therefore carbon emissions.

Prefabricated components are produced by pouring the concrete into formwork molds while it is still liquid. Only when the concrete has hardened sufficiently can this casting mold be opened. During the hardening process, calcium silicate hydrate (CSH) and other compounds crystallize out of the cement, the most important component of concrete, producing a compact artificial stone. At ambient temperatures of around 20 degrees Celsius, this takes around twelve hours – time during which the formwork cannot be re-utilized. To speed things up, the liquid concrete is often heated with steam. Although this accelerates the hardening process, it also requires a lot of additional energy.

X-Seed makes heat curing largely superfluous. With this additive, concrete hardens just as fast at 20 degrees Celsius as it otherwise does at 60 degrees Celsius. This is accomplished just by adding something that is already contained in the concrete: calcium silicate hydrate. More precisely, it's the countless millions of tiny CSH crystals with a diameter of several nanometers suspended in liquid in X-Seed. They speed up the crystallization process: Further molecules from the cement attach themselves to the excess of CSH particles. The resulting crystals grow dense and interlock to form compact cement stone.

With X-Seed, the time to formwork removal at 20 degrees Celsius can be halved from about twelve to six hours, without any detectable differences in the final product.

Nanoscale crystal particles help concrete harden faster. With X-Seed, heat curing is unnecessary for hardening – and that saves a lot of energy.

Concrete is everywhere these days. Worldwide, around 1.4 billion metric tons of cement are processed annually to make concrete.

Innovations in the chemical industry – X-Seed

• With the hardening accelerator X-Seed, precast concrete components can be manufactured faster
• Nanoscale crystal particles speed up the concrete hardening process
• X-Seed makes additional heat curing of concrete superfluous and that saves a lot of energy
• With X-Seed, the time to formwork removal can be halved

BASF Group Business Review

2nd Quarter 2011

After a powerful start to the year 2011, our business continued to develop successfully in the second quarter. Sharply higher raw materials costs could be largely passed on to the market thanks to stronger demand compared with the same quarter of the previous year. Despite negative currency effects and the suspension of our oil production in Libya, our sales improved by 13.9% to €18.5 billion.

Income from operations before special items rose by €31 million to €2.2 billion. The second quarter 2010 included an earnings contribution from oil production in Libya of €280 million, of which €209 million were noncompensable income taxes on oil-producing operations. Adjusted for these non-compensable income taxes on oil-producing operations, income improved by €240 million thanks to the positive development of our business.

Compared with the second quarter of 2010, our sales volumes increased in all segments except Oil & Gas. Production volumes in the Oil & Gas segment decreased as a result of the suspension of oil production in Libya in late February 2011. In nearly every division, we were able to pass on increased raw materials costs through higher sales prices. Portfolio measures led to a 5% increase in sales; this effect was largely attributable to the acquisition of Cognis in December 2010. In contrast to the first quarter of 2011, negative currency effects reduced sales growth by 6%.

Factors influencing sales (% of sales)

	2nd Quarter
Volumes	2
Prices	13
Portfolio measures	5
Currencies	(6)
	14

In the Chemicals segment, sales were significantly higher than the level of the previous second quarter. We raised sales prices in all divisions, particularly in the Petrochemicals division. Demand for our products continued to be strong and sales volumes increased. Negative currency effects slowed sales growth. Due to the impact of scheduled and unscheduled plant shutdowns, we were not quite able to match the earnings level of the previous second quarter.

In the Plastics segment, we posted higher sales volumes in both divisions. Increased prices, especially in the Performance Polymers division, also contributed to sales growth. In the Polyurethanes division, maintenance shutdowns at several plants reduced earnings. Overall, the segment's earnings improved thanks to higher volumes and margins.

Second-quarter sales (million €)

Chemicals	2011	3,392	14%
	2010	2,970
Plastics	2011	2,828	9%
	2010	2,584
Performance	2011	4,095	30%
Products	2010	3,151
Functional	2011	2,766	13%
Solutions	2010	2,453
Agricultural	2011	1,205	0%
Solutions	2010	1,211
Oil & Gas	2011	2,461	4%
	2010	2,374
Other	2011	1,714	17%
	2010	1,471

In the Performance Products segment, we posted a strong increase in sales thanks largely to a considerable contribution from the acquired Cognis businesses. In a favorable business environment, we were able to increase both the sales volumes and sales prices of our products in nearly all divisions. Earnings were higher than in the same quarter of the prior year, also because of the inclusion of the Cognis businesses.

BASF Group 2nd Quarter 2011

• Powerful start to 2011 leads into successful second quarter
• Substantial sales growth of 13.9% to €18.5 billion; sales growth reduced by 6% owing to negative currency effects
• Higher raw materials costs mostly passed on to the market through increased sales prices
• Earnings improve by 1.4% to €2.2 billion, even without earnings contribution from Libya
• Volumes decline in the Oil & Gas segment as a result of the suspension of production in Libya

In the Functional Solutions segment, sales volumes increased substantially. In addition, higher precious metals prices boosted the significant sales growth. Demand from the automotive industry for our products continued to be good. In some parts of Europe, construction activity began to grow moderately again. Earnings improved slightly in particular thanks to the contribution from the Catalysts division.

In the Agricultural Solutions segment, we increased sales volumes by 6%; volumes grew particularly in our business with fungicides. With stable sales prices, sales reached the good level of the previous second quarter despite negative currency effects. Although weather conditions in Europe and North America were unfavorable, earnings were slightly above the level of the same period of the previous year.

Sales in the Oil & Gas segment rose slightly compared with the second quarter of 2010, thanks to higher crude oil and natural gas prices. However, the suspension of our oil production in Libya at the end of February 2011 led to an 18% decline in volumes in the segment. Earnings in the Oil & Gas segment were lower year-on-year due to the lack of earnings contribution from the Libyan activities. Adjusted for the non-compensable income taxes on oil-producing operations, earnings exceeded the level of the second quarter of 2010.

Other posted substantial sales growth, primarily attributable to higher prices in the Styrenics business and in raw materials trading. The earnings of Other exceeded the level of the second quarter of 2010 thanks largely to improved foreign currency results.

Special items in EBIT amounted to minus €20 million (second quarter of 2010: minus €127 million), which included income of €68 million from the repeal of the fine imposed by the E.U. on the former Ciba in 2009.

EBIT grew year-on-year by 7% to reach €2,217 million. EBITDA rose by €148 million to €3,015 million. The EBITDA margin was 16.3% (second quarter of 2010: 17.7%).

Second-quarter EBIT before special items (million €, absolute change)

Chemicals	2011	674	(13)
	2010	687
Plastics	2011	383	+34
	2010	349
Performance	2011	513	+42
Products	2010	471
Functional	2011	167	+2
Solutions	2010	165
Agricultural	2011	331	+11
Solutions	2010	320
Oil & Gas	2011	332	(183)
	2010	515
Other	2011	(163)	+138
	2010	(301)

The financial result was minus €121 million, a decrease of €28 million compared with the same period of 2010. This was primarily attributable to lower earnings from companies accounted for using the equity method. Overall, special items in income before taxes and minority interests amounted to minus €49 million (second quarter 2010: minus €127 million).

Income before taxes and minority interests rose by €110 million in the second quarter of 2011 to €2,096 million. At 26%, the tax rate was far below the level of the second quarter of 2010. This decline was primarily due to the lack of noncompensable income taxes on oil-producing operations as a result of the suspension of oil production in Libya.

Net income increased by 23% to €1,454 million. Earnings per share were €1.59 in the second quarter of 2011 compared with €1.29 in the same period of the previous year. Adjusted for special items and amortization of intangible assets, earnings per share amounted to €1.75 (second quarter of 2010: €1.50).

Information on the calculation of adjusted earnings per share can be found on page 35

BASF Group special items (million €)

	2011	2010
1st quarter	705	(114)
2nd quarter	(49)	(127)
1st half	656	(241)
3rd quarter		(58)
4th quarter		(78)
Full Year		(377)

Adjusted earnings per share (€)

	2011	2010
1st quarter	1.94	1.32
2nd quarter	1.75	1.50
1st half	3.69	2.82
3rd quarter		1.52
4th quarter		1.39
Full Year		5.73

BASF Group Business Review

1st Half 2011

There was strong demand for our products in the first half of 2011. We increased our sales volumes and, particularly in the second quarter, our sales prices. The inclusion of the Cognis businesses additionally bolstered sales growth. Overall, our sales rose by 19.4% to €37.8 billion despite the oil production stoppage in Libya. We significantly improved income from operations before special items; at around €5 billion, it was 19.4% higher year-on-year. Adjusted for the non-compensable income taxes on oil-producing operations in Libya (first half 2011: €280 million; first half 2010: €436 million), our income from operations before special items even improved by €965 million.

At €3 billion, our operating cash flow exceeded the level of the first half of 2010. Since the beginning of the year we have reduced our net debt by €1.3 billion.

In the first half of 2011, sales volumes improved in all segments except Oil & Gas. The suspension of our oil production in Libya in February 2011 led to a considerable decline in volumes in the Oil & Gas segment. We were largely able to compensate for the sharp rises in raw materials costs since the start of the year with price increases in nearly all divisions. Portfolio measures, especially the acquisition of Cognis in December 2010, led to a 5% increase in sales.

Factors influencing sales (% of sales)

	1st Half
Volumes	3
Prices	13
Portfolio measures	5
Currencies	(2)
	19

In the Chemicals segment, sales in all divisions were considerably higher than the level of the first half of 2010. Volumes rose slightly while our sales prices increased substantially. In the Petrochemicals division in particular, we were able to pass on higher raw materials costs to the market. Despite scheduled and unscheduled plant shutdowns in the second quarter of 2011, earnings in the segment were significantly higher than in the first half of 2010.

In the Plastics segment, demand grew compared with the first half of 2010 and we were able to considerably increase sales volumes for our products. Furthermore, we increased our sales prices, particularly in the Performance Polymers division. Sales grew substantially and earnings improved considerably.

Chemicals	2011	6,668	20%
	2010	5,558
Plastics	2011	5,616	17%
	2010	4,781
Performance	2011	8,077	34%
Products	2010	6,022
Functional	2011	5,584	23%
Solutions	2010	4,543
Agricultural	2011	2,435	3%
Solutions	2010	2,356
Oil & Gas	2011	5,916	6%
	2010	5,599
Other	2011	3,526	26%
	2010	2,809

First-half sales (million €)

In the Performance Products segment, the acquired Cognis businesses made an important contribution to the significant improvement in sales. We increased both the sales volumes and sales prices of our products. Earnings rose sharply, mainly as a result of the acquired Cognis businesses as well as the successful repositioning of the combined businesses following the Ciba integration.

BASF Group 1st Half 2011

• Significant sales growth of 19.4% to €37.8 billion; higher prices and volumes in nearly all segments
• Earnings increase significantly by 19.4% to €5 billion; higher contribution in particular from the chemicals business1
• Volume-related earnings decline in the Oil & Gas segment resulting from suspension of production in Libya in late February
• At €3 billion, operating cash flow exceeds previous first-half level; net debt reduced by €1.3 billion since beginning of 2011

In the Functional Solutions segment, we posted a substantial rise in sales. Particularly in our catalysts business, our sales volumes considerably improved. We were able to increase our sales prices in the Catalysts and Coatings divisions. In some parts of Europe, construction activity began to rise moderately again. Owing to the strong contribution from Catalysts, earnings were higher than the level of the first half of 2010.

We posted a slight increase in sales in the Agricultural Solutions segment. There was strong demand for our products worldwide, especially for fungicides. Slight declines in prices and negative currency effects were more than offset by the increase in volumes. Despite some unfavorable weather conditions, we were able to improve earnings compared with the same period of the previous year.

Sales in the Oil & Gas segment grew in the first half of 2011, primarily due to higher prices. However, declining volumes resulting from the suspension of our oil production in Libya had a negative impact on sales growth. The negative time-lag effect caused by the higher oil price had an adverse impact on margins in the Natural Gas Trading business sector. Overall, earnings did not match the level of the previous first half on account of lower volumes. Adjusted for the non-compensable income taxes on oil-producing operations, earnings were nevertheless considerably higher than in the same period of 2010.

Sales in Other rose in particular due to higher prices in Styrenics and raw materials trading. There was also a strong improvement in earnings in the Styrenics business. Overall, earnings in Other were above the level of the first half of 2010.

Special items in EBIT amounted to minus €202 million (first half of 2010: minus €241 million), primarily related to the integration of the Cognis businesses. In addition, they contained income resulting from the repeal of the fine imposed on the former Ciba by the E.U. in 2009.

EBIT grew by 22% compared with the first half of 2010 to reach €4,767 million. EBITDA rose by €886 million to €6,380 million. The EBITDA margin was 16.9% (first half of 2010: 17.3%).

First-half EBIT before special items (million €, absolute change)

Chemicals	2011	1,439	+291
	2010	1,148
Plastics	2011	776	+148
	2010	628
Performance	2011	1,067	+177
Products	2010	890
Functional	2011	309	+33
Solutions	2010	276
Agricultural	2011	674	+33
Solutions	2010	641
Oil & Gas	2011	1,076	(68)
	2010	1,144
Other	2011	(372)	+195
	2010	(567)

The financial result was €709 million, an improvement of €882 million compared with the same period of the previous year. This was primarily due to the special item of €887 million that resulted from the sale of our stake in K+S Aktiengesellschaft. Overall special items in income before taxes and minority interests amounted to €656 million (first half of 2010: minus €241 million).

Income before taxes and minority interests rose by €1,730 million in the first half of 2011 to €5,476 million. At 25.2%, the tax rate was far below the level of the same period of 2010. This decline was largely due to the lack of non-compensable income taxes on oil-producing operations in the second quarter of 2011 owing to the suspension of oil production in Libya.

Net income increased by 75% to €3,865 million. Earnings per share amounted to €4.21 in the first half of 2011 compared with €2.41 in the same period of the previous year. Adjusted for special items and amortization of intangible assets, earnings per share were €3.69 (first half of 2010: €2.82).

Information on the calculation of adjusted earnings per share can be found on page 35

Earnings in the 1st Half of 2011

– Income from operations before special items improved by 19.4% compared with first half of 2010 to reach €5 billion

• Income before taxes and minority interests increased by €1,730 million year-on-year
• Net income rises by 75% compared with the same period of 2010
• Earnings per share of €4.21 (first half of 2010: €2.41)
• Adjusted earnings per share of €3.69 (first half of 2010: €2.82)

BASF on the Capital Market

Overview of BASF shares

2nd Quarter 2011	1st Half 2011
14.4	17.0
4.8	6.7
0.1	4.1
4.2	11.6
2.2	6.4
64.03	61.14
69.40	69.40
60.83	53.96
67.57	67.57
4.4	3.9
918.5	918.5
62.1	62.1

Market trend

At the end of the second quarter, BASF shares traded at €67.57, an increase of 10.7% compared with the closing price in the first quarter of 2011. Assuming the dividend of €2.20 paid out on May 9, 2011 was reinvested, our share performance in the second quarter was around 14.4%. The BASF stock thus outperformed the German and European stock markets, whose leading indices, the DAX 30 and DJ EURO STOXX 50, increased in value by 4.8% and 0.1%, respectively, in the same period. At the end of the second quarter, the global industry indices DJ Chemicals and MSCI World Chemicals were up by 4.2% and 2.2%, respectively, compared with their value in the first quarter.

For up-to-date information on BASF shares online, visit basf.com/share

Standard & Poor's raises BASF's credit rating

In May 2011, Standard & Poor's raised BASF's rating from "A/A-1 outlook stable" to "A+/A-1 outlook stable." Our rating from Moody's is unchanged with "A1/P-1 outlook negative." This means we have good ratings, especially compared with competitors in the chemical industry. We also continue to have solid financing. Since the beginning of the year, we have reduced our net debt by €1,289 million to €12,257 million.

BASF financial communication honored again

For the fifth time in a row, BASF has won the Investor Relations award from the German business magazine Capital. Furthermore, in the Thomson Extel Pan-European Survey 2011, our Investor Relations team was once again honored as "Best IR Team in Europe" and "Best IR Team in the Chemicals Sector." In addition, our Investors Relations work was given a number of awards in a survey by Britain's renowned IR Magazine. wird aktualisiert

BASF on the Capital Market

• BASF share significantly outperforms the overall market in the second quarter
• Good credit ratings and solid financing; net debt reduced by €1,289 million
• Financial communication once again receives multiple honors
• You can reach our Investor Relations team by phoning +49 621 60-48230 or by e-mailing ir@basf.com

Dividend per share1 (€ per share)

¹ Adjusted for two-for-one stock split conducted in the second quarter of 2008.

Significant Events and Economic Environment

Significant Events

At the beginning of June, the European Commission granted its approval for the establishment of the Styrolution joint venture, subject to one condition. The U.S. competition authorities have also given BASF and INEOS clearance to combine in Styrolution their global activities in the business areas styrene monomers, polystyrene, acrylonitrile butadiene styrene, styrene-butadiene block copolymers and other styrene-based copolymers as well as copolymer blends. Styrolution will be the leading global company in the styrenic plastics industry with production sites in Europe, Asia and North America. The transaction is still subject to approvals from antitrust authorities in other countries and is expected to close during the fourth quarter of 2011. Until then, BASF and INEOS will continue to operate as strictly independent companies.

BASF plans to build the world's largest single-train TDI (toluene diisocyanate) plant in Europe. The plant will have a capacity of 300,000 metric tons per year and start production in 2014. TDI is a key component for polyurethane foams, which are primarily used in applications in the automotive and furniture industries.

Together with PETRONAS, BASF is planning an expansion of the existing production capacity at BASF PETRONAS Chemicals Sdn. Bhd. in Kuantan, Malaysia. In addition, both companies have started a feasibility study for a new superabsorbents plant. With these projects under consideration, BASF and PETRONAS want to further improve their position in the fastgrowing market for specialty chemicals in Asia.

At the end of April, BASF signed an agreement to acquire inge watertechnologies AG, a leading global provider of ultrafiltration technology, a membrane process used in the treatment of drinking water, process water, wastewater and sea water. The transaction, which is still subject to approval by the relevant merger control authorities, is expected to close within the third quarter of 2011. With the acquisition of inge watertechnologies, BASF continues to strengthen its market position in the field of water treatment.

Economic Environment

Following the economic recovery in 2010, the global economy continued to experience high growth in the first half of 2011. This growth was driven mainly by the positive economic trend in the emerging markets of Asia. Compared with the same period of the previous year, global gross domestic product grew by around 3% in the first half of 2011. As a result of the strong demand for consumer and capital goods, global industrial production also continued to grow, rising by around 4.5% compared with the first half of 2010.

The outlook for the full year 2011 can be found on page 16.

Significant Events and Economic Environment

• European Commission approves establishment of Styrolution joint venture
• BASF to build world's largest single-train TDI production plant in Europe
• PETRONAS and BASF plan expansion of production capacity of BASF PETRONAS Chemicals
• Agreement signed to acquire inge watertechnologies AG
• Global gross domestic product grows by around 3% compared with first half 2010

Chemicals

Excellence in the Verbund, technology and cost leadership

Segment data Chemicals (million €)

		2nd Quarter			1st Half
		2011	2010	Change in %	2011	2010	Change in %
Sales to third parties		3,392	2,970	14	6,668	5,558	20
	Thereof Inorganics	351	325	8	704	607	16
	Petrochemicals	2,348	1,997	18	4,562	3,720	23
	Intermediates	693	648	7	1,402	1,231	14
	Income from operations before depreciation and amortization (EBITDA)	847	859	(1)	1,773	1,485	19
	Income from operations (EBIT) before special items	674	687	(2)	1,439	1,148	25
	Income from operations (EBIT)	686	687		1,451	1,148	26
Assets		6,712	6,635	1	–	–	–
Research expenses		33	31	6	65	62	5
	Additions to property, plant and equipment and intangible assets	146	115	27	256	202	27

2nd Quarter 2011

All divisions in the Chemicals segment posted a significant rise in sales compared with the same quarter of the previous year. Thanks to good demand, we were able to pass on sharply higher raw materials costs in our sales prices. Sales volumes also increased again compared with the second quarter of 2010. Negative currency effects, mainly as a result of the weaker U.S. dollar, slowed sales growth (volumes 2%, prices 20%, currencies –8%). Income from operations before special items decreased slightly, which was attributable to the impact of scheduled and unscheduled plant shutdowns.

Inorganics

Sales in the Inorganics division rose in comparison with the second quarter of 2010. In particular, our businesses with inorganic chemicals, glues and impregnating resins were very successful. We were able to largely compensate for higher raw materials costs through price increases. Despite ongoing good demand, earnings did not match the level of the previous second quarter. This was due to lower margins for ammonia and methanol as well as higher fixed costs as a result of maintenance shutdowns.

Petrochemicals

In the Petrochemicals division, we experienced continued strong demand and achieved significant sales growth. Sales volumes were slightly above the level of the second quarter of 2010. We were able to pass on the strong rise in raw materials costs to the market through price increases. Furthermore, margin levels for some products improved. Mainly due to the impact of scheduled maintenance shutdowns in Ludwigshafen, earnings were just below the very high level of the second quarter of the previous year.

Intermediates

In the second quarter of 2011, sales volumes and sales in the Intermediates division grew in almost all regions. The strong demand could not be fully met in various product lines; this was due to several scheduled maintenance shutdowns as well as a temporary shutdown for acetylene and derivatives due to an operational disruption at the Ludwigshafen site. Price increases led to improved margins. While fixed costs remained constant, earnings exceeded the level of the previous second quarter.

Chemicals

• Considerably higher sales in all divisions
• Overall slight decline in earnings due to scheduled and unscheduled plant shutdowns
• Earnings improve in the Intermediates division

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

+14% –13

Plastics Energy-efficient products and system solutions for our customers

Segment data Plastics (million €)

	2nd Quarter				1st Half
	2011	2010	Change in %	2011	2010	Change in %
Sales to third parties	2,828	2,584	9	5,616	4,781	17
Thereof Performance Polymers	1,330	1,184	12	2,639	2,161	22
Polyurethanes	1,498	1,400	7	2,977	2,620	14
Income from operations before depreciation and amortization (EBITDA)	483	461	5	980	842	16
Income from operations (EBIT) before special items	383	349	10	776	628	24
Income from operations (EBIT)	383	350	9	776	627	24
Assets	5,356	5,383	(1)	–	–	–
Research expenses	37	37	–	73	72	1
Additions to property, plant and equipment and intangible assets	51	55	(7)	91	96	(5)

2nd Quarter 2011

In the Plastics segment, we posted higher sales in both divisions. Demand for our products was stronger than in the previous second quarter. In addition, we were able to increase our sales prices. This more than offset negative currency effects (volumes 4%, prices 12%, currencies –7%). Income from operations before special items exceeded the level of the second quarter of 2010.

Performance Polymers

Sales in the Performance Polymers division increased significantly, primarily due to higher prices. Demand for engineering plastics for the automotive industry continued to grow, especially in Europe and North America. Production of our biodegradable plastics Ecoflex® and Ecovio® was temporarily disrupted by an insufficient supply of precursors. In contrast, there was once again improved availability of other products on the market, such as polyamide and polyamide intermediates, while demand continued to be strong. Thanks to increased volumes and higher margins for polyamide and intermediates, earnings surpassed the level of the second quarter of 2010.

Polyurethanes

In the Polyurethanes division, our sales improved compared with the second quarter of 2010, in particular due to higher sales volumes of products for the automotive and construction industries. However, we were not able to fully pass on higher raw materials costs to the market. We successfully expanded our specialties business. Earnings were slightly above the level of the previous second quarter mainly as a result of higher volumes, but were negatively impacted by maintenance shutdowns in several plants.

Plastics

• Increased sales in both divisions
• Higher sales prices, particularly in the Performance Polymers division
• Earnings above the level of the previous second quarter due mainly to higher sales volumes

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

+9% +34

Performance Products

Innovative, fast-growing and cyclically resilient

Segment data Performance Products (million €)

			2nd Quarter			1st Half
		2011	2010	Change in %	2011	2010	Change in %
Sales to third parties		4,095	3,151	30	8,077	6,022	34
	Thereof Dispersions & Pigments	937	857	9	1,786	1,580	13
	Care Chemicals	1,353	675	100	2,729	1,310	108
	Nutrition & Health	480	373	29	949	741	28
	Paper Chemicals	417	440	(5)	810	860	(6)
	Performance Chemicals	908	806	13	1,803	1,531	18
	Income from operations before depreciation and amortization (EBITDA)	688	633	9	1,335	1,171	14
	Income from operations (EBIT) before special items	513	471	9	1,067	890	20
	Income from operations (EBIT)	456	450	1	863	791	9
Assets		13,516	10,318	31	–	–	–
Research expenses		80	72	11	158	146	8
	Additions to property, plant and equipment and intangible assets	130	68	91	231	115	101

2nd Quarter 2011

Sales in the Performance Products segment were far above the level of the same quarter of 2010, mainly owing to the inclusion of the Cognis businesses. In a favorable business environment, we further increased the sales volumes of our products. In addition, sales growth was boosted by higher sales prices as a result of increased raw materials costs. By contrast, currency effects had a negative influence on sales development (volumes 2%, prices 6%, portfolio 27%, currencies –5%). Income from operations before special items exceeded the level of the second quarter of 2010. The businesses acquired from Cognis, stronger demand and the successful repositioning of the combined businesses following the Ciba integration all contributed to this.

Dispersions & Pigments

Sales in the Dispersions & Pigments division improved once again while sales volumes increased in all business areas. We were able to largely offset higher raw materials costs with price increases. With nearly stable margins, higher volumes led to an increase in earnings compared to the previous second quarter. The successful repositioning of the combined businesses following the Ciba integration also contributed to the improvement in earnings.

Care Chemicals

Sales doubled in the Care Chemicals division compared with the same quarter of the previous year, due largely to the inclusion of the Cognis businesses. We were able to maintain our margins despite considerable increases in raw materials costs. Due to the inclusion of the Cognis businesses, earnings were far above the level of the previous second quarter.

Performance Products

• Sales increase sharply due to inclusion of Cognis businesses as well as higher prices
• Sales volumes rise in nearly all divisions
• Earnings improve in particular due to higher volumes and acquired Cognis businesses

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

+30% +42

Nutrition & Health

The Nutrition & Health division posted a substantial rise in sales compared with the second quarter of 2010, due in large part to the inclusion of the Cognis businesses. We increased sales volumes in all business areas. However, sales growth was negatively affected by declining vitamin prices due to intense competition as well as the weak U.S. dollar. Earnings did not match the high level of the previous second quarter, mainly as a result of lower margins for vitamins.

Paper Chemicals

In a challenging business environment, sales in the Paper Chemicals division declined slightly. This was a result of divestitures and portfolio streamlining as well as our "value over volume" strategy. Nevertheless, we could not fully offset higher raw materials costs with price increases. We continued to reduce fixed costs. Earnings did not match the level of the second quarter of 2010 owing to the adverse impact of higher raw materials costs.

Performance Chemicals

In the Performance Chemicals division, significant sales growth was driven by price increases as well as the acquired Cognis businesses. Weaker demand from Japan led to lower sales volumes of our products for the automotive, construction and packaging industries. Higher prices could only partially compensate for increased raw materials costs. The division's earnings were therefore slightly below the level of the strong second quarter of 2010.

Performance Products

• Dispersions & Pigments: Sales and earnings rise, due to higher volumes and prices
• Care Chemicals: Sales and earnings increase considerably thanks to acquired Cognis businesses
• Nutrition & Health: Substantial rise in sales; earnings decline due to lower margins for vitamins
• Paper Chemicals: Slight decline in sales; earnings below level of previous second quarter due to higher raw materials costs
• Performance Chemicals: Sales increase significantly; earnings decline slightly due to strong increase in raw materials costs

Functional Solutions

Customer-specific products and system solutions

Segment data Functional Solutions (million €)

			2nd Quarter			1st Half
		2011	2010	Change in %	2011	2010	Change in %
Sales to third parties		2,766	2,453	13	5,584	4,543	23
	Thereof Catalysts	1,500	1,225	22	3,177	2,289	39
	Construction Chemicals	577	576		1,046	1,008	4
	Coatings	689	652	6	1,361	1,246	9
	Income from operations before depreciation and amortization (EBITDA)	258	266	(3)	496	468	6
	Income from operations (EBIT) before special items	167	165	1	309	276	12
	Income from operations (EBIT)	165	164	1	307	275	12
Assets		9,423	9,491	(1)	–	–	–
Research expenses		50	47	6	95	85	12
	Additions to property, plant and equipment and intangible assets	190	40	375	215	68	216

2nd Quarter 2011

Compared with the second quarter of 2010, our sales volumes rose in the Functional Solutions segment. Demand from the automotive industry for our mobile emissions catalysts and automotive coatings was strong. In some parts of Europe, construction activity began to rise again moderately. In addition, higher precious metals prices had a positive effect on the significant sales growth (volumes 12%, prices 8%, currencies –7%). Income from operations before special items rose slightly compared with the same quarter of 2010. This was due primarily to the volume-related strong contribution from the Catalysts division.

Catalysts

In the Catalysts division, our business with chemical and refinery catalysts developed successfully. Although demand from Japan declined, we also posted a substantial increase in sales volumes of our mobile emissions catalysts. Precious metals trading also contributed to the overall strong sales growth with sales of €648 million (second quarter 2010: €609 million). Earnings were far above the level of the previous second quarter thanks to higher volumes.

Construction Chemicals

In the Construction Chemicals division, our sales volumes improved compared with the second quarter of 2010. Owing to negative currency effects, sales matched the previous second quarter level. In parts of Europe, there were signs of a slight recovery in construction activity. In North America, the market remained difficult but we nevertheless increased our sales volumes there as well. Demand continued to develop favorably in the emerging markets of Asia, South America and Eastern Europe. As our prices remained at the level of the second quarter of 2010, the sharp increase in raw materials costs had a negative impact on margins, and earnings declined.

Coatings

In the Coatings division, we benefited from stronger demand for automotive and architectural coatings. Despite declining demand from Japan, we increased sales compared with the previous second quarter. However, we were not able to fully pass on higher raw materials costs to the market. Due to lower margins, earnings did not match the very good level of the second quarter of 2010.

Functional Solutions

• Sales increase significantly
• Slight earnings improvement compared with the previous second quarter
• High earnings growth in the Catalysts division

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

+13% +2

Agricultural Solutions Innovations for the health of crops

Segment data Agricultural Solutions (million €)

	2nd Quarter			1st Half
	2011	2010	Change in %	2011	2010	Change in %
Sales to third parties	1,205	1,211	0	2,435	2,356	3
Income from operations before depreciation and amortization (EBITDA)	373	370	1	757	739	2
Income from operations (EBIT) before special items	331	320	3	674	641	5
Income from operations (EBIT)	331	320	3	674	641	5
Assets	5,316	5,478	(3)	–	–	–
Research expenses	95	102	(7)	192	186	3
Additions to property, plant and equipment and intangible assets	36	25	44	59	51	16

2nd Quarter 2011

Our sales volumes in the Agricultural Solutions segment, particularly for fungicides, increased year-on-year thanks to strong global demand for agricultural products. Negative currency effects were offset by higher volumes. With sales prices stable, sales nearly reached the good level of the previous second quarter (volumes 6%, prices 0%, currencies –6%).

Thanks to strong demand for our products in Eastern Europe, our sales in Europe exceeded the level of the previous second quarter despite the dry weather in Western Europe.

The weaker U.S. dollar was particularly responsible for the decline in sales in North America. In addition, flooding resulted in a decrease in cultivated acreage, which led to lower demand for herbicides. In contrast, sales volumes of fungicides increased.

In South America we increased sales due in part to good demand for our herbicide tolerance technology Clearfield® as well as for insecticides for sugarcane and seed treatment.

In Asia, sales were considerably above the level of the second quarter of 2010, which was mainly attributable to the positive development of the herbicide business.

We posted a slight increase in income from operations before special items despite negative currency effects.

1st Half 2011 – Sales by indication

1	Fungicides	46%
2	Herbicides	37%	€2,435
3	Insecticides/other	17%	million

1st Half 2011 – Sales by region (location of customer)

1	Europe	47%
2	North America	28%
3	Asia Pacific	12%
4	South America, Africa, Middle East	13%

2

3

1

Agricultural Solutions

• Sales match good level of previous second quarter
• Earnings rise slightly in a positive market environment
• Herbicide business drives growth in Asia

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

0% +11

Oil & Gas

Exploration and production of crude oil and natural gas; Trading, transportation and storage of natural gas

Segment data Oil & Gas (million €)

		2nd Quarter			1st Half
	2011		2010 Change in %	2011		2010 Change in %
Sales to third parties	2,461	2,374	4	5,916	5,599	6
Thereof Exploration & Production	563	854	(34)	1,631	1,879	(13)
Natural Gas Trading	1,898	1,520	25	4,285	3,720	15
Income from operations before depreciation and amortization (EBITDA)	436	642	(32)	1,310	1,409	(7)
Thereof Exploration & Production	338	512	(34)	1,061	1,099	(3)
Natural Gas Trading	98	130	(25)	249	310	(20)
Income from operations (EBIT) before special items	332	515	(36)	1,076	1,144	(6)
Thereof Exploration & Production	269	420	(36)	895	904	(1)
Natural Gas Trading	63	95	(34)	181	240	(25)
Income from operations (EBIT)	332	515	(36)	1,076	1,144	(6)
Thereof Exploration & Production	269	420	(36)	895	904	(1)
Natural Gas Trading	63	95	(34)	181	240	(25)
Assets	8,927	8,244	8	–	–	–
Thereof Exploration & Production	5,008	5,062	(1)	–	–	–
Natural Gas Trading	3,919	3,182	23	–	–	–
Exploration expenses	30	41	(27)	83	88	(6)
Additions to property, plant and equipment and intangible assets	276	169	63	467	303	54
Income taxes on oil-producing operations non-compensable with German corporate income tax	–	209		280	436	(36)
Net income	257	148	74	563	421	34

2nd Quarter 2011

Sales in the Oil & Gas segment rose slightly. Due to the suspension of our oil production in Libya at the end of February, production volumes decreased. However, this volume decline was offset by higher oil prices and sales prices in natural gas trading (volumes –18%, prices/currencies 22%). Income from operations before special items did not match the second quarter 2010 level due to the lack of earnings contributions from Libyan operations. In contrast, net income improved substantially.

Due to the production stoppage in Libya, production volumes in the Exploration & Production business sector fell considerably. Therefore, sales declined sharply despite higher crude oil

Oil & Gas

• Oil production in Libya suspended since the end of February
• Sales increase slightly thanks to higher prices
• Earnings below the level of previous second quarter
• More information on net income in the Oil & Gas segment can be found in the Notes on page 26

and natural gas prices. The average price for Brent crude oil was \$117 per barrel, compared with \$78 per barrel (+50%) in the second quarter of 2010. Earnings did not match the level of the previous second quarter owing to the lack of earnings from Libyan operations. In the previous second quarter, earnings contained non-compensable income taxes on oil-producing operations of €209 million.

Sales volumes declined slightly year-on-year in the Natural Gas Trading business sector. Nevertheless sales grew considerably as a result of higher natural gas prices. Margins were negatively impacted by the contractually delayed adjustment of sales prices to purchase prices, and earnings therefore declined.

2nd Quarter 2011 (change compared with 2nd quarter 2010)

Sales EBIT

before special items (million €)

+4% –183

Regional Results 1st Half 2011

Overview of regions (million €)

	Sales Location of company			Sales Location of customer			EBIT before special items
	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %
2nd Quarter
Europe	10,215	8,743	17	9,743	8,300	17	1,410	1,383	2
Thereof Germany	6,964	6,256	11	3,598	2,981	21	754	990	(24)
North America	3,980	3,637	9	3,742	3,498	7	457	463	(1)
Asia Pacific	3,294	3,004	10	3,637	3,210	13	286	293	(2)
South America, Africa, Middle East	972	830	17	1,339	1,206	11	84	67	25
	18,461	16,214	14	18,461	16,214	14	2,237	2,206	1
1st Half
Europe	21,365	17,700	21	20,399	16,702	22	3,243	2,634	23
Thereof Germany	14,883	12,722	17	7,640	6,261	22	1,968	1,908	3
North America	7,831	6,804	15	7,418	6,710	11	850	792	7
Asia Pacific	6,683	5,560	20	7,319	5,959	23	701	603	16
South America, Africa, Middle East	1,943	1,604	21	2,686	2,297	17	175	131	34
	37,822	31,668	19	37,822	31,668	19	4,969	4,160	19

Sales in Europe rose by 21% over the level of the first half of 2010. The Performance Products segment made a strong contribution to this growth. In the Chemicals segment, we were able to pass on higher raw materials costs to the market. We also posted substantial sales growth in the Plastics segment thanks to good demand from the automotive industry. Despite the adverse impact of the suspension of our oil production in Libya1 as well as scheduled and unscheduled plant shutdowns, earnings increased by €609 million to €3,243 million.

Sales in North America grew by 22% in U.S. dollars and by 15% in euro terms. The inclusion of the Cognis businesses considerably bolstered sales growth in the Performance Products segment. Our chemicals business developed successfully overall. In the Agricultural Solutions segment, sales declined in particular as a result of the weaker U.S. dollar. Earnings at €850 million were €58 million above the level of the first half of 2010.

With good demand, sales in Asia Pacific rose by 22% in localcurrency terms and by 20% in euro terms. The considerable growth in sales was attributable to the inclusion of the Cognis businesses, as well as to price increases due to higher raw materials costs especially in the Petrochemicals, Performance Polymers and Catalysts divisions. Sales also grew in the Agricultural Solutions segment thanks to our strong herbicide business. We improved earnings by €98 million to €701 million in particular due to good margins in the Performance Products segment.

In South America, Africa, Middle East our sales increased significantly by 22% in local-currency terms and by 21% in euro terms. The Performance Products segment made a significant contribution to sales thanks to the inclusion of the Cognis businesses. Sales in the Catalysts division also grew considerably as a result of higher volumes and prices. Earnings improved by €44 million to €175 million, thanks in part to our successful business with crop protection products.

1st Half 2011

• Europe: Substantial rise in sales and earnings, higher raw materials costs largely passed on to the market
• North America: Sales and earnings improve, strong contribution from Performance Products as a result of Cognis inclusion
• Asia Pacific: Sales and earnings significantly higher, good demand for our products
• South America, Africa, Middle East: Sales and earnings rise significantly year-on-year due to higher volumes and prices

Overview of Other Topics

Research and development

Batteries are the key technology for the sustainable electromobility of the future. Over the next five years, BASF will therefore be investing a three-digit million euro sum in research, development and production of battery materials. In addition to cathode materials, we are also developing new electrolytes. We are thus expanding our portfolio of innovative solutions for highperformance lithium-ion batteries, and will be able to support our customers' competitiveness in the electromobility sector. Furthermore, we are already researching future battery concepts, such as lithium-sulfur or lithium-air.

We have brought the first animal feed enzyme combination in granulate form to the world market: Natuphos® 5000 Combi G. Based on many years of experience in enzyme formulation, our experts have succeeded in unifying the enzymes 3-phytase, beta-xylanase and beta-glucanase in a stable formulation suited particularly well for pelleting. Customers benefit not only from the simplified handling and dosing of the product, they also save storage space and packaging material. The enzymes in Natuphos 5000 Combi G increase the digestibility of feed plants and energy value of animal feed, letting pigs and poultry better utilize the nutrients it contains.

Furthermore, we have extended our range of extruded polystyrene rigid foam panels (XPS) with an innovative product – a new insulation material called Styrodur® HT. While conventional XPS can be used at a temperature of up to 75 degrees Celsius, Styrodur HT's key feature is a heat distortion temperature of up to 105 degrees Celsius. The foam is therefore suitable for applications exposed to high temperatures such as insulating hot water tanks, inverted flat roofs, or for various insulation applications in solar technology. Styrodur HT also boasts the proven properties of Styrodur C: high compressive strength, low water absorption, resistance to rot and outstanding insulation performance.

We have signed a wide-ranging cooperation agreement with EMBRAPA, the leading Brazilian agricultural research institution, to develop and bring new agriculture technologies and products to Brazilian growers. The cooperation brings together expertise and know-how in the development of innovative agricultural solutions, especially in the areas of plant biotechnology, genetic improvement of crops, soil fertility, mechanization, crop protection and plant physiology. We have already worked together with EMBRAPA successfully: Our jointly developed herbicide-tolerant soybean Cultivance® received approval for commercial cultivation in Brazil in 2010.

Employees

Compared with the end of 2010, the number of BASF Group employees rose by 1,149 to a total of 110,289 as of June 30, 2011. On this date, 64% of BASF Group employees were employed in Europe while North America accounted for 15% of employees, Asia Pacific for 15% and South America, Africa, Middle East for 6%.

Compared with the same period of the previous year, personnel costs in the first half 2011 increased by 8.3% to €4,457 million due particularly to the acquisition of Cognis.

Research and development

• Investments in research, development and production of battery materials
• BASF brings to market the world's first animal feed enzyme combination in granulate form
• Innovative insulation material Styrodur HT has heat distortion temperature of up to 105 degrees Celsius
• BASF and EMBRAPA sign wide-ranging cooperation agreement

Employees by region

	June 30, 2011	Dec. 31, 2010
Europe	70,281	69,809
North America	16,442	16,487
Asia Pacific	16,663	15,965
South America, Africa, Middle East	6,903	6,879
	110,289	109,140

Outlook

Our business developed successfully in the first half of 2011; demand for our products was strong. In the second half of the year we expect the pace of growth to be slower and that demand from our customer industries will stabilize at a high level. In 2011, we aim to significantly exceed the record 2010 levels in sales and earnings.

Opportunities and risks

We see opportunities for our business in consistently implementing our strategy and further improving our operational excellence. We will continue to concentrate on portfolio improvements, restructuring and increasing efficiency as well as on product innovations and expanding our business in growth markets. Therefore we will continue to strengthen our research and development activities.

However, there are also risks to the development of our business. An intensification of the debt crisis in Europe and the United States could adversely impact economic growth. Moreover, increasing raw materials costs could have a negative effect on our margins and dampen demand.

The statements on opportunities and risks made in the BASF Report 2010 remain valid.

More detailed information can be found in the BASF Report 2010, in the Risk Report on pages 103–111

Forecast

Our expectations for the global economy in 2011 are generally unchanged. We have adjusted our forecasts for the oil price and the U.S. dollar exchange rate (previous forecasts in parentheses):

• Growth of gross domestic product: 3% 4%
• Growth in industrial production: 5% 6%
• Growth in chemical production (excluding pharmaceuticals): 5% – 6%
• An average euro/dollar exchange rate of \$1.40 per euro (\$1.35 per euro)
• Average oil price of \$110 per barrel in 2011 (\$100 per barrel)

In our forecast, we continue to assume that we will not be able to resume our crude oil production in Libya in 2011. Despite the reduction in oil production, we expect significant sales growth for the BASF Group in 2011. Due to the suspension of oil production in Libya, we now expect non-compensable income taxes on oil-producing operations reported in income from operations will decline by around €700 million in 2011 (assumption 2011: €280 million; 2010: €983 million). Adjusted for the non-compensable income taxes on oil-producing operations, we continue to aim to significantly exceed the record 2010 level in income from operations before special items. We expect to once again earn a high premium on our cost of capital in 2011.

Outlook for 2011

• We aim for a significant improvement in sales and earnings and expect to earn a high premium on our cost of capital
• We expect that we will not be able to resume oil production in Libya in 2011
• Risks arise, for example, from the intensification of the debt crisis in Europe and the United States as well as from increasing raw materials costs

Interim Financial Statements Consolidated Statements of Income

Consolidated Statements of Income BASF Group (million €)

	2nd Quarter
Further information in Note	2011	2010	Change in %	2011	2010	Change in %
Sales	18,461	16,214	13.9	37,822	31,668	19.4
Cost of sales	13,502	11,314	19.3	27,327	22,342	22.3
Gross profit on sales	4,959	4,900	1.2	10,495	9,326	12.5
Selling expenses	1,813	1,679	8.0	3,573	3,174	12.6
General and administrative expenses	313	270	15.9	611	545	12.1
Research and development expenses	391	376	4.0	771	726	6.2
Other operating income (5)	285	283	0.7	570	502	13.5
Other operating expenses (5)	510	779	(34.5)	1,343	1,464	(8.3)
Income from operations	2,217	2,079	6.6	4,767	3,919	21.6
Income from companies accounted for using the equity method	3	38	(92.1)	61	104	(41.3)
Other income from participations	33	39	(15.4)	928	51
Other expenses from participations	17	7	142.9	18	9	100.0
Interest income	42	29	44.8	70	57	22.8
Interest expense	184	195	(5.6)	364	373	(2.4)
Other financial result	2	3	(33.3)	32	(3)
Financial result (6)	(121)	(93)	(30.1)	709	(173)
Income before taxes and minority interests	2,096	1,986	5.5	5,476	3,746	46.2
Income taxes (7)	545	645	(15.5)	1,379	1,256	9.8
Income before minority interests	1,551	1,341	15.7	4,097	2,490	64.5
Minority interests (8)	97	158	(38.6)	232	278	(16.5)
Net income	1,454	1,183	22.9	3,865	2,212	74.7
Earnings per share (€) (9)
Undiluted (9)	1.59	1.29	23.3	4.21	2.41	74.6
Diluted (9)	1.59	1.29	23.3	4.21	2.41	74.6

Consolidated Balance Sheets BASF Group

Assets (million €)

Further information in Note	June 30, 2011	June 30, 2010	Change in %	Dec. 31, 2010	Change in %
Intangible assets (10)	11,730	11,117	5.5	12,245	(4.2)
Property, plant and equipment (10)	16,776	16,926	(0.9)	17,241	(2.7)
Investments accounted for using the equity method	1,262	1,239	1.9	1,328	(5.0)
Other financial assets	807	1,601	(49.6)	1,953	(58.7)
Deferred tax assets	1,005	1,192	(15.7)	1,112	(9.6)
Other receivables and miscellaneous short-term assets	921	606	52.0	653	41.0
Long-term assets	32,501	32,681	(0.6)	34,532	(5.9)
Inventories (11)	9,490	7,890	20.3	8,688	9.2
Accounts receivable, trade (11)	10,874	10,181	6.8	10,167	7.0
Other receivables and miscellaneous short-term assets (11)	3,537	3,598	(1.7)	3,883	(8.9)
Marketable securities (11)	15	18	(16.7)	16	(6.3)
Cash and cash equivalents (11)	1,838	2,107	(12.8)	1,493	23.1
Assets of disposal groups	1,019	–	–	614	–
Short-term assets	26,773	23,794	12.5	24,861	7.7
Total assets	59,274	56,475	5.0	59,393	(0.2)

Stockholders' equity and liabilities (million €)

	Further information in Note	June 30, 2011	June 30, 2010	Change in %	Dec. 31, 2010	Change in %
Subscribed capital	(12)	1,176	1,176	–	1,176	–
Capital surplus	(12)	3,216	3,229	(0.4)	3,216	–
Retained earnings	(12)	17,698	12,866	37.6	15,817	11.9
Other comprehensive income		(307)	1,274	–	1,195
Equity of shareholders of BASF SE		21,783	18,545	17.5	21,404	1.8
Minority interests		1,191	1,305	(8.7)	1,253	(4.9)
Stockholders' equity		22,974	19,850	15.7	22,657	1.4
Provisions for pensions and similar obligations	(13)	2,720	3,199	(15.0)	2,778	(2.1)
Other provisions	(14)	3,632	3,552	2.3	3,352	8.4
Deferred tax liabilities		2,590	2,129	21.7	2,467	5.0
Financial indebtedness	(15)	10,239	11,705	(12.5)	11,670	(12.3)
Other long-term liabilities	(15)	925	940	(1.6)	901	2.7
Long-term liabilities		20,106	21,525	(6.6)	21,168	(5.0)
Accounts payable, trade		4,820	4,334	11.2	4,738	1.7
Provisions	(14)	3,295	3,178	3.7	3,324	(0.9)
Tax liabilities		1,374	1,198	14.7	1,140	20.5
Financial indebtedness	(15)	3,856	3,880	(0.6)	3,369	14.5
Other short-term liabilities	(15)	2,616	2,510	4.2	2,802	(6.6)
Liabilities of disposal groups		233	–	–	195	–
Short-term liabilities		16,194	15,100	7.2	15,568	4.0
Total stockholders' equity and liabilities		59,274	56,475	5.0	59,393	(0.2)

Consolidated Statements of Cash Flows BASF Group

Consolidated Statements of Cash Flows (million €)

	1st Half
	2011	2010
Net income	3,865	2,212
Depreciation and amortization of intangible assets, property, plant and equipment and financial assets	1,614	1,581
Changes in net working capital	(1,178)	(1,355)
Miscellaneous items	(1,263)	283
Cash provided by operating activities	3,038	2,721
Payments related to property, plant and equipment and intangible assets	(1,265)	(889)
Acquisitions/divestitures	32	17
Financial investments and other items	1,314	273
Cash provided by (used in) investing activities	81	(599)
Capital increases/repayments, share repurchases	–	–
Changes in financial liabilities	(486)	(292)
Dividends	(2,278)	(1,762)
Cash used in financing activities	(2,764)	(2,054)
Net changes in cash and cash equivalents	355	68
Cash and cash equivalents as of beginning of year and other changes	1,483	2,039
Cash and cash equivalents at end of period	1,838	2,107

Cash provided by operating activities at €3,038 million in the first half of 2011 was €317 million higher than in the same period of the previous year. This can primarily be attributed to increased earnings. Inventories and accounts receivable rose between January and June 2011 due particularly to higher price levels as well as the building up of natural gas inventories. The negative value for miscellaneous items resulted mainly from the gain of €887 million from the disposal of around 19.7 million shares in K+S Aktiengesellschaft, which was reclassified into cash flow from investing activities.

Cash provided by investing activities amounted to €81 million, while cash used in investing activities was €599 million in the first half of 2010. The sale of shares in K+S Aktiengesellschaft resulted in cash inflows of €972 million in March. Payments for property, plant and equipment and intangible assets amounted to €1,265 million, which was considerably higher than the level of €889 million one year earlier, but did not reach the level of depreciation and amortization.

Financing activities led to a cash outflow of €2,764 million. Dividends of €2,021 million were paid to shareholders of BASF SE and €257 million was paid to minority shareholders in Group companies. The 4% euro-denominated bond from 2006 and the 3.25% CHF-denominated bond from 2008 were redeemed. By contrast, BASF SE expanded its U.S. dollar commercial paper program. Financial liabilities totaling €486 million were repaid.

Cash and cash equivalents amounted to €1,838 million as of June 30, 2011, compared with €1,493 million at the end of 2010. Net debt was reduced to €12,257 million by the end of the second quarter 2011, compared with €13,546 million as of December 31, 2010.

Consolidated Statements of Recognized Income and Expense BASF Group

Income and expense items (million €)

	1st Half
	2011	2010
Income before minority interests	4,097	2,490
Actuarial gains/losses from pensions and other obligations; asset ceiling	80	(1,009)
Foreign currency translation adjustment	(491)	1,201
Fair value changes in available-for-sale securities1	(1,013)	(41)
Cash flow hedges	(35)	(13)
Hedges of net investments in foreign operations	10	(20)
Revaluation due to acquisition of majority of shares	(1)	(1)
Deferred taxes	(6)	292
Minority interests	(61)	93
Total income and expense recognized in equity	(1,517)	502
Total income and expense for the period	2,580	2,992
Thereof BASF	2,409	2,621
Thereof minority interests	171	371

¹Following the disposal of the shares in K+S Aktiengesellschaft in 2011, the realized fair value changes were reclassified in the financial result.

Development of income and expense recognized directly in equity (million €)

	Retained earnings Actuarial gains/losses; asset ceiling	Other comprehensive income
		Foreign currency translation adjustment	Fair value changes in available for-sale securities	Cash flow hedges	Hedges of net investments in foreign operations	Revalua tion due to acquisition of majority of shares	Total of other comprehen sive income
As of January 1, 2011	(1,526)	190	1,009	(3)	(7)	6	1,195	(331)
Additions	–	–	–	(35)	10	–	(25)	(25)
Releases	80	(491)	(1,013)	–	–	(1)	(1,505)	(1,425)
Deferred taxes	(34)	7	13	8	–		28	(6)
As of June 30, 2011	(1,480)	(294)	9	(30)	3	5	(307)	(1,787)
As of January 1, 2010	(1,425)	(555)	698	5	–	8	156	(1,269)
Additions	–	1,201	–	–	–	–	1,201	1,201
Releases	(1,009)	–	(41)	(13)	(20)	(1)	(75)	(1,084)
Deferred taxes	300	(17)	1	8	–	–	(8)	292
As of June 30, 2010	(2,134)	629	658	–	(20)	7	1,274	(860)

Consolidated Statements of Stockholders' Equity BASF Group

1st Half 2011 (million €)

	Number of subscribed shares out standing	Subscribed capital	Capital surplus	Retained earnings	Other com prehensive income1	Equity of sharehol ders of BASF SE	Minority interests	Stockhol ders' equity
As of January 1, 2011	918,478,694	1,176	3,216	15,817	1,195	21,404	1,253	22,657
Effects of acquisitions achieved in stages	–	–	–	(1)	–	(1)	–	(1)
Dividends paid	–	–	–	(2,021)	–	(2,021)	(257)2	(2,278)
Net income	–	–	–	3,865	–	3,865	232	4,097
Change in income and expense recognized directly in equity	–	–	–	46	(1,502)	(1,456)	(61)	(1,517)
Changes in scope of consolidation and other changes	–	–	–	(8)	–	(8)	24	16
As of June 30, 2011	918,478,694	1,176	3,216	17,698	(307)	21,783	1,191	22,974

1st Half 2010 (million €)

As of January 1, 2010	918,478,694	1,176	3,229	12,916	156	17,477	1,132	18,609
Dividends paid	–	–	–	(1,561)	–	(1,561)	(201)2	(1,762)
Net income	–	–	–	2,212	–	2,212	278	2,490
Change in income and expense recognized directly in equity	–	–	–	(709)	1,118	409	93	502
Changes in scope of consolidation and other changes	–	–	–	8	–	8	3	–
As of June 30, 2010	918,478,694	1,176	3,229	12,866	1,274	18,545	1,305	19,850

¹ Details are provided in the "Consolidated Statements of Recognized Income and Expense" on page 20.

² Including profit and loss transfers

Segment Reporting BASF Group

2nd Quarter (million €)

		Sales			EBITDA				Income from operations (EBIT) before special items		Income from operations (EBIT)
	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %
Chemicals	3,392	2,970	14.2	847	859	(1.4)	674	687	(1.9)	686	687	(0.1)
Plastics	2,828	2,584	9.4	483	461	4.8	383	349	9.7	383	350	9.4
Performance Products	4,095	3,151	30.0	688	633	8.7	513	471	8.9	456	450	1.3
Functional Solutions	2,766	2,453	12.8	258	266	(3.0)	167	165	1.2	165	164	0.6
Agricultural Solutions	1,205	1,211	(0.5)	373	370	0.8	331	320	3.4	331	320	3.4
Oil & Gas	2,461	2,374	3.7	436	642	(32.1)	332	515	(35.5)	332	515	(35.5)
Other	1,714	1,471	16.5	(70)	(364)	80.8	(163)	(301)	45.8	(136)	(407)	66.6
	18,461	16,214	13.9	3,015	2,867	5.2	2,237	2,206	1.4	2,217	2,079	6.6

2nd Quarter (million €)

	Research expenses		Assets		Additions to long-term assets1		Amortization and depreciation2
	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %
Chemicals	33	31	6.5	6,712	6,635	1.2	146	115	27.0	161	172	(6.4)
Plastics	37	37	–	5,356	5,383	(0.5)	51	55	(7.3)	100	111	(9.9)
Performance Products	80	72	11.1	13,516	10,318	31.0	130	68	91.2	232	183	26.8
Functional Solutions	50	47	6.4	9,423	9,491	(0.7)	190	40	375.0	93	102	(8.8)
Agricultural Solutions	95	102	(6.9)	5,316	5,478	(3.0)	36	25	44.0	42	50	(16.0)
Oil & Gas	4	4	–	8,927	8,244	8.3	276	169	63.3	104	127	(18.1)
Other	92	83	10.8	10,024	10,926	(8.3)	30	22	36.4	66	43	53.5
	391	376	4.0	59,274	56,475	5.0	859	494	73.9	798	788	1.3

¹ Investment in intangible assets and property, plant and equipment

² Depreciation and amortization of intangible assets and property, plant and equipment

1st Half (million €)

		Sales			EBITDA		Income from operations (EBIT) before special items			Income from operations (EBIT)
	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %
Chemicals	6,668	5,558	20.0	1,773	1,485	19.4	1,439	1,148	25.3	1,451	1,148	26.4
Plastics	5,616	4,781	17.5	980	842	16.4	776	628	23.6	776	627	23.8
Performance Products	8,077	6,022	34.1	1,335	1,171	14.0	1,067	890	19.9	863	791	9.1
Functional Solutions	5,584	4,543	22.9	496	468	6.0	309	276	12.0	307	275	11.6
Agricultural Solutions	2,435	2,356	3.4	757	739	2.4	674	641	5.1	674	641	5.1
Oil & Gas	5,916	5,599	5.7	1,310	1,409	(7.0)	1,076	1,144	(5.9)	1,076	1,144	(5.9)
Other	3,526	2,809	25.5	(271)	(620)	56.3	(372)	(567)	34.4	(380)	(707)	46.3
	37,822	31,668	19.4	6,380	5,494	16.1	4,969	4,160	19.4	4,767	3,919	21.6

1st Half (million €)

	Research expenses			Assets			Additions to long-term assets1		Amortization and depreciation2
	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %	2011	2010	Change in %
Chemicals	65	62	4.8	6,712	6,635	1.2	256	202	26.7	322	337	(4.5)
Plastics	73	72	1.4	5,356	5,383	(0.5)	91	96	(5.2)	204	215	(5.1)
Performance Products	158	146	8.2	13,516	10,318	31.0	231	115	100.9	472	380	24.2
Functional Solutions	95	85	11.8	9,423	9,491	(0.7)	215	68	216.2	189	193	(2.1)
Agricultural Solutions	192	186	3.2	5,316	5,478	(3.0)	59	51	15.7	83	98	(15.3)
Oil & Gas	7	5	40.0	8,927	8,244	8.3	467	303	54.1	234	265	(11.7)
Other	181	170	6.5	10,024	10,926	(8.3)	62	39	59.0	109	87	25.3
	771	726	6.2	59,274	56,475	5.0	1,381	874	58.0	1,613	1,575	2.4

¹ Investments in intangible assets and property, plant and equipment

² Depreciation and amortization of intangible assets and property, plant and equipment

Other3 (million €)

	2nd Quarter				1st Half
	2011	2010	Change in %	2011	2010	Change in %
	1,714	1,471	16.5	3,526	2,809	25.5
	811	785	3.3	1,654	1,451	14.0
	903	686	31.6	1,872	1,358	37.8
	(163)	(301)	45.8	(372)	(567)	34.4
	(59)	(55)	(7.3)	(114)	(106)	(7.5)
Corporate research	(87)	(78)	(11.5)	(170)	(160)	(6.3)
Currency results, hedges and other valuation effects	(118)	(198)	40.4	(196)	(334)	41.3
Styrenics, fertilizers, other business	76	67	13.4	261	168	55.4
	27	(106)		(8)	(140)	94.3
	(136)	(407)	66.6	(380)	(707)	46.3
	Thereof Styrenics4 Thereof Other business included under Other EBIT before special items Thereof Group corporate costs Special items

³ Further information about Other can be found in the Notes on pages 25 and 26.

4 Since January 1, 2011, Styrenics only includes the carved-out Styrenics businesses; the previous year's values were adjusted accordingly.

Notes to the Interim Financial Statements of BASF Group

1 – Basis of presentation

The Consolidated Financial Statements of the BASF Group for the year ending December 31, 2010 were prepared according to the International Financial Reporting Standards (IFRS) valid as of the balance sheet date. The Interim Financial Statements as of June 30, 2011 have been prepared in line with the rules of International Accounting Standard 34 in abbreviated form and using the same accounting policies. The Interim Financial Statements and Interim Management's Analysis have been neither audited nor subject to an auditor's review.

The BASF Report 2010 containing the Consolidated Financial Statements as of December 31, 2010 can be found on the Internet at: basf.com/report

A change was made in 2010 to the presentation of the consolidated statements of cash flows. In connection with the regular renewal of U.S. dollar hedging transactions, inflows or outflows in euro can result depending on the development of the U.S. dollar exchange rate. Since 2010, these are no longer reported in Cash provided by operating activities; they are now reported under the item "changes in financial liabilities" in Cash used in financing activities. The quarterly figures for 2010 were adjusted accordingly.

Selected exchange rates

	Closing rates		Average rates
	June 30,	Dec. 31,	1st Half
€1 equals	2011	2010	2011	2010
Brazil (BRL)	2.26	2.22	2.29	2.38
China (CNY)	9.34	8.82	9.17	9.06
Great Britain (GBP)	0.90	0.86	0.87	0.87
Japan (JPY)	116.25	108.65	114.95	121.32
Malaysia (MYR)	4.36	4.10	4.25	4.39
Mexico (MXN)	16.98	16.55	16.69	16.81
The Russian Federation (RUB)	40.40	40.82	40.13	39.89
Switzerland (CHF)	1.21	1.25	1.27	1.44
South Korea (KRW)	1,543.19	1,499.06	1,544.84	1,531.21
United States (USD)	1.45	1.34	1.40	1.33

2 – Scope of consolidation

The Consolidated Financial Statements include BASF SE, as well as all material subsidiaries on a fully consolidated basis. Material jointly operated companies are proportionally consolidated. The development of the number of fully and proportionally consolidated companies is shown in the table.

There have been 18 first-time consolidations since the beginning of 2011; 11 of these were due to the carve-out of the styrenics activities and seven were due to the increasing importance of these companies.

Since the beginning of 2011, five companies have been deconsolidated as a result of mergers with other BASF companies or decreased significance.

Scope of consolidation

	2011	2010
As of January 1	339	345
Thereof proportionally consolidated	21	19
First-time consolidations	18	4
Thereof proportionally consolidated	2	1
Deconsolidations	5	35
Thereof proportionally consolidated	–	–
As of June 30	352	314
Thereof proportionally consolidated	23	20

3 – Acquisitions/Divestitures

On May 31, 2011, BASF increased its stake to 50% in Heesung Catalysts Corporation, based in South Korea. The company was previously reported using the equity method. Following the acquisition of the additional shares, the company is now proportionally consolidated in the Consolidated Financial Statements. In connection with the reclassification of the company, currency effects amounting to €29 million, which had previously been recognized directly in equity, were charged as a special item to the financial result. In accordance with IFRS 3, a purchase price allocation has to be carried out as a result of the acquisition of the interest. The purchase price allocation took place in the second quarter on the basis of estimates and should be considered preliminary. It resulted in additions to assets of €253 million (thereof €55 million in goodwill). The purchase price allocation can be adjusted within one year.

On April 8, 2011, BASF divested its surface technologies business for thermal spray coatings, which had been acquired as part of the Engelhard acquisition in 2006. The business was sold to North American firm Metal Improvement Company, LLC, a subsidiary of Curtiss Wright Corporation, based in New Jersey.

On April 1, 2011, a BASF joint venture with Sumitomo Metal Mining in Japan divested the business with chemicals for surface treatment and electroplating to Metalor, based in Switzerland. This business includes solutions for precious metals as well as apparatus engineering for electroplating applications, which are primarily sold to customers in the electrical industry.

The purchase price allocation for Cognis Holding GmbH, acquired on December 9, 2010, should still be generally considered preliminary.

4 – Segment reporting

BASF's worldwide business is conducted by operating divisions that are aggregated into six segments for reporting purposes.

Chemicals consists of the Inorganics, Petrochemicals and Intermediates divisions. Its portfolio ranges from basic chemicals, glues and electronic chemicals to solvents and plasticizers, as well as starting materials for products such as detergents, plastics, textile fibers, paints and coatings, cropprotection products and pharmaceuticals.

Plastics is composed of the Performance Polymers and Polyurethanes divisions.

Performance Products, which is made up of the Dispersions & Pigments, Care Chemicals, Nutrition & Health, Paper Chemicals and Performance Chemicals operating divisions, primarily offers customer-specific specialties alongside standard products.

Functional Solutions comprises the Catalysts, Construction Chemicals and Coatings divisions.

Agricultural Solutions contains the Crop Protection division.

The Oil & Gas segment is composed of the Oil & Gas division with the Exploration & Production and Natural Gas Trading business sectors.

Activities not assigned to a particular division are reported in Other. This comprises primarily the Styrenics and fertilizers activities. With the carve-out of the styrenic plastics business as of January 1, 2011, Styrenics now corresponds to the carvedout activities. The activities that were not affected by the carveout are still reported under Other, but not as part of Styrenics. The previous year's values have been adjusted.

In addition, the sale of raw materials, engineering and other services, rental income and leases are reported under Other. Group corporate costs consist of the expenses for steering the BASF Group and are not allocated to the segments but reported under Other.

With our cross-divisional corporate research, which is also reported under Other, we develop growth clusters and ensure the long-term competence of BASF with regard to technology and methods.

Earnings from currency conversion that are not allocated to the segments are reported under Other, as are earnings from the hedging of raw materials prices and foreign currency exchange risks. Furthermore, expenses and revenues from the long-term incentive (LTI) program are reported under Other.

The sales and earnings of Other improved considerably in the first half of 2011 compared with the same period of the previous year. As well as Styrenics and fertilizers, raw materials trading was particularly responsible for the rise in sales.

Transfers between the segments are almost always executed at market-based prices. The allocation of assets and depreciation to the segments is based on economic control. Assets used by more than one segment are allocated based on the percentage of usage.

Assets of Other (million €)

	1st Half
	2011	2010
Assets of business included under Other	3,073	2,544
Financial assets	2,070	2,840
Deferred tax assets	1,005	1,192
Cash and cash equivalents, marketable securities	1,853	2,125
Defined benefit assets	497	138
Miscellaneous receivables/prepaid expenses	1,526	2,087
	10,024	10,926

Reconciliation reporting for Oil & Gas (million €)

	2nd Quarter			1st Half
	2011	2010	2011	2010
Income from operations	332	515	1,076	1,144
Income from participations	29	44	72	109
Other income	(8)	(20)	(12)	(28)
Income before taxes and minority interests	353	539	1,136	1,225
Income taxes	70	344	482	689
thereof income taxes on oil-producing operations non-compensable with German corporate income tax	–	209	280	436
Income before minority interests	283	195	654	536
Minority interests	(26)	(47)	(91)	(115)
Net income	257	148	563	421

In the reconciliation reporting for Oil & Gas, the income from operations of the Oil & Gas segment is reconciled to the contribution of the companies in this segment to the net income of the BASF Group.

Other income includes all expenses and income not included in income from operations of the segment, the interest result and the miscellaneous financial result.

The decrease in income from operations and income taxes are attributable to the suspension of oil production in Libya.

The decrease in income from participations in the first half of 2011 resulted chiefly from lower earnings at OAO Severneftegazprom, which is accounted for using the equity method.

5 – Other operating income and expenses

Other operating income (million €)

		2nd Quarter		1st Half
	2011	2010	2011	2010
Income from currency conversion and foreign currency transactions	51	113	161	197
Disposal of property, plant and equipment	16	32	27	41
Reversal/usage of provisions	2	6	3	7
Reversal of allowances for doubtful receivables	7	20	22	40
Revenue from miscellaneous typical business activities	(3)	10	19	16
Miscellaneous	212	102	338	201
Other operating income	285	283	570	502

Other operating expenses (million €)

		2nd Quarter	1st Half
	2011	2010	2011	2010
Losses from currency conversion and foreign currency transactions	45	148	134	258
Oil and gas exploration expenses	30	41	83	88
Miscellaneous	435	590	1,126	1,118
Other operating expenses	510	779	1,343	1,464

The decline of income from currency conversion and foreign currency transactions in the first half of 2011 was mainly a result of the devaluation of all major currencies in comparison to the euro. The decline in disposals of property, plant and equipment is a result of the sale of shares in oil and gas projects in the previous year. The rise in income reported in Miscellaneous is primarily attributable to higher income from hedges against raw materials price risks as well as higher payments related to the previous year's earnings in the fertilizers business.Losses from currency conversion and foreign currency transactions declined sharply versus the first half of 2010.

6 – Financial result

2011 2010 2011 2010 Income from companies accounted for using the equity method 3 38 61 104 Income from participations in affiliated and associated companies 27 30 31 31 Income from the disposal of participations 3 – 890 – Income from profit transfer agreements 3 8 5 18 Income from tax allocation to participating interests – 1 2 2 Other income from participations 33 39 928 51 Losses from loss transfer agreements (3) (1) (4) (2) Write-downs of/losses from the sale of participations (14) (6) (14) (7) Other expenses from participations (17) (7) (18) (9) Interest income from cash and cash equivalents 36 22 61 42 Interest and dividend income from securities and loans 6 7 9 15 Interest income 42 29 70 57 Interest expense (184) (195) (364) (373) Write-ups/profits from the sale of securities and loans – – – – Expected income from plan assets to cover pensions and similar obligations 201 197 403 384 Income from plan assets to cover other long-term personnel obligations – (1) 8 4 Income from construction interest 24 15 45 30 Miscellaneous financial income (4) 15 28 24 Other financial income 221 226 484 442 Write-downs/losses from the disposal of securities and loans (1) – (1) – Interest accrued on pension obligations and other similar obligations (204) (207) (410) (406) Expenses from other long-term employee obligations (1) (5) (14) (17) Interest accrued on other long-term liabilities (13) (11) (27) (22) Miscellaneous financial expenses – – – – Other financial expenses (219) (223) (452) (445) Financial result (121) (93) 709 (173)	Million €	2nd Quarter	1st Half

The decline in income from companies accounted for using the equity method resulted primarily from the lower income contribution from OAO Severneftegazprom in the first half of 2011 as well as the earnings effects from the proportional consolidation of the South Korean company Heesung Catalysts Corporation.

Income from the disposal of participations was generated in particular from the sale of shares in K+S Aktiengesellschaft.

Interest income and expenses relate to expenses and income from interest-bearing liabilities and financial investments, including dividend income on securities. In addition, these items take into account the ongoing interest expenses and income from interest rate and currency swaps with banks.

The interest result improved compared with the same period of the previous year. The repayment of two bonds led to lower interest expenses in the second quarter of 2011. In addition, the higher interest rate level resulted in an increase in interest income.

The higher level of expected income from pension plan assets can be attributed to the increase in pension plan assets compared with the previous year.

7 – Income taxes

Income before taxes and minority interests (million €)

	2nd Quarter		1st Half
	2011	2010	2011	2010
Germany	775	613	2,359	1,145
Foreign oil production branches of German companies	(15)	268	351	556
Other foreign	1,336	1,105	2,766	2,045
	2,096	1,986	5,476	3,746

Income taxes (million €)

		2nd Quarter		1st Half
	2011	2010	2011	2010
Germany	215	245	413	376
Foreign oil production branches of German companies	(18)	248	316	518
Thereof non-compensable	–	209	280	436
Other foreign	348	152	650	362
	545	645	1,379	1,256
Tax rate (%)	26.0	32.5	25.2	33.5

Oil production in Libya was suspended at the end of February 2011. This resulted in a decline in the income taxes for oil production that are non-compensable with German corporate income tax as well as the tax rate in the first half of 2011.

8 – Minority interests

Million €	2nd Quarter		1st Half
	2011	2010	2011	2010
Minority interests in profits	96	154	232	282
Minority interests in losses	1	4	–	(4)
	97	158	232	278

The decline in minority interests in profits was primarily related to the Group companies engaged in natural gas trading as well as BASF FINA Petrochemicals L. P., based in Port Arthur, Texas. In particular, at BASF PETRONAS Chemicals Sdn. Bhd., Malaysia, there were higher minority interests in profits than in the previous year.

9 – Earnings per share

		2nd Quarter			1st Half
		2011	2010	2011	2010
Net income	million €	1,454	1,183	3,865	2,212
Number of outstanding shares (weighted average)	(in thousands)	918,479	918,479	918,479	918,479
Earnings per share	€	1.59	1.29	4.21	2.41

The calculation of earnings per share is based on the weighted average number of common shares outstanding. The calculation of diluted earnings per common share reflects all possible outstanding common shares and the resulting effect on income of the BASF incentive share program "plus".

In the first half of 2011, and in the corresponding period of 2010, there was no dilutive effect; undiluted earnings per share were the same as the diluted value per share.

10 – Long-term assets

Development (million €)

		1st Half 2011
	Intangible assets	Property, plant and equipment	Investments accounted for using the equity method and other financial assets
Acquisition costs
Balance as of January 1	15,232	54,732	3,544
Additions	154	1,227	56
Disposals	(303)	(335)	(1,290)
Transfers	45	27	33
Exchange differences	(383)	(1,070)	(17)
Balance as of June 30	14,745	54,581	2,326
Amortization and depreciation
Balance as of January 1	2,987	37,491	263
Additions	367	1,246	1
Disposals	(286)	(292)	(4)
Transfers	4	2	(3)
Exchange differences	(57)	(642)	–
Balance as of June 30	3,015	37,805	257
Net book value as of June 30	11,730	16,776	2,069

Development (million €)

		1st Half 2010
	Intangible assets	Property, plant and equipment	Investments accounted for using the equity method and other financial assets
Acquisition costs
Balance as of January 1	13,303	51,943	3,220
Additions	19	855	157
Disposals	(217)	(195)	(189)
Transfers	38	151	(152)
Exchange differences	1,032	2,510	63
Balance as of June 30	14,175	55,264	3,099
Amortization and depreciation
Balance as of January 1	2,854	35,658	261
Additions	306	1,269	6
Disposals	(210)	(155)	(9)
Transfers	(69)	95	–
Exchange differences	177	1,471	1
Balance as of June 30	3,058	38,338	259
Net book value as of June 30	11,117	16,926	2,840

Additions to property, plant and equipment in the first half of 2011 arose from a number of investments. The most significant investments were: the expansion of the synthesis gas plants and construction of the intermodal transportation terminal in Ludwigshafen; the construction of the oleum/sulfuric acid plant in Antwerp, Belgium; the construction of natural gas pipelines in Europe; and a polyol plant and a methylamines plant in Geismar, Louisiana.

Disposals of intangible assets primarily comprised the derecognition of fully amortized licenses for crop protection products. The disposal of the participation in K+S Aktiengesellschaft is reported under other financial assets; the participation had previously been booked at fair value as an asset available for sale.

11 – Short-term assets

Million €	June 30, 2011	June 30, 2010	Dec. 31, 2010
Raw materials and factory supplies	2,576	2,172	2,427
Work-in-process, finished goods and merchandise	6,790	5,614	6,171
Advance payments and services-in-process	124	104	90
Inventories	9,490	7,890	8,688
Accounts receivables, trade	10,874	10,181	10,167
Other receivables and miscellaneous short-term assets	3,537	3,598	3,883
Marketable securities	15	18	16
Cash and cash equivalents	1,838	2,107	1,493
Assets of disposal groups	1,019	–	614
Other short-term assets	6,409	5,723	6,006
Short-term assets	26,773	23,794	24,861

Work-in-process, finished goods and merchandise are combined into one item because of the production conditions in the chemical industry. Services-in-process relate primarily to services not invoiced at the balance sheet date. Inventories are valued using the weighted average cost method. The increase in inventories is attributable to the Cognis acquisition, seasonal effects in the business with agricultural products as well as natural gas trading, and the expansion of the business in several areas as a result of the favorable economic development.

Trade accounts receivable increased in comparison with year-end 2010 as a result of the expansion of business activities and higher price levels.

12 – Stockholders' equity

Authorized capital

At the Annual Meeting of April 30, 2009, shareholders authorized the Board of Executive Directors to increase the subscribed capital by issuing new shares in an amount of up to €500 million against cash with the approval of the Supervisory Board through April 30, 2014. The Board of Executive Directors is empowered, following the approval of the Supervisory Board, to decide on the exclusion of shareholders' subscription rights for these new shares in certain predefined cases covered by the enabling resolution. Until now, this option has not been exercised and no new shares were issued.

Retained earnings

Transfers from Other retained earnings increased legal reserves by €21 million in the first half. The offsetting of actuarial gains and losses, as well as the asset ceiling, resulted in a reduction in retained earnings of €46 million in the first half of 2011 and a reduction of €709 million in the same period of 2010.

Reserves (million €)

	June 30, 2011	Dec. 31, 2010
Legal reserves	468	436
Other retained earnings	17,230	15,381
	17,698	15,817

Payment of dividends

In accordance with the resolution of the Annual Meeting on May 6, 2011, BASF SE paid a dividend of €2.20 per share from the retained profit of the 2010 fiscal year. With 918,478,694 shares entitled to dividends, this corresponds to a total dividend payout of €2,020,653,126.80.

Other comprehensive income

Following the sale of the shares in K+S Aktiengesellschaft, the realized gain was recorded in the financial result. Accordingly, there was a derecognition of the effects of the fair market valuation of the participation amounting to €1,014 million which had been previously reported in stockholders' equity.

13 – Provisions for pensions

Assumptions used to determine the defined benefit obligation (weighted average in %)

	Germany		Foreign
	June 30, 2011	Dec. 31, 2010	June 30, 2011	Dec. 31, 2010
Discount rate	5.25	5.00	4.74	4.74
Projected increase of wages and salaries	2.75	2.75	3.79	3.79
Projected pension increase	1.75	1.75	1.00	1.00

Assumptions used to determine expenses for pension benefits (from January 1 through June 30 of the respective year; weighted average in %)

	Germany		Foreign
	June 30, 2011	Dec. 31, 2010	June 30, 2011	Dec. 31, 2010
Discount rate	5.00	5.50	4.74	5.17
Projected increase of wages and salaries	2.75	2.75	3.79	3.91
Projected pension increase	1.75	2.00	1.00	0.92
Expected return on plan assets	5.28	5.13	5.49	6.28

The assumptions regarding the overall expected long-term rate of return are based on the target asset allocation and the weighted average rate of expected returns of each individual asset class. The forecasts are based on long-term historical average returns and take into consideration the current yield level and the inflation trend.

In the first half of 2011, developments in the capital markets led to an increase in the discount rate for existing pension obligations denominated in euro.

14 – Other provisions

Million €	June 30, 2011	June 30, 2010	Dec. 31, 2010
Other long-term provisions	3,632	3,552	3,352
Short-term provisions	3,295	3,178	3,324
	6,927	6,730	6,676

In the first half of 2011, other provisions increased compared with the end of 2010. This increase primarily affects provisions for the LTI program as well as for restructuring measures in the course of the Cognis integration.

15 – Liabilities

Liabilities (million €)

				Dec. 31, 2010
					Long-term
4,820	–	4,334	–	4,738	–
2,936	8,815	3,366	10,322	2,637	10,267
920	1,424	514	1,383	732	1,403
3,856	10,239	3,880	11,705	3,369	11,670
1,374	–	1,198	–	1,140	–
79	–	61	–	283	–
46	2	40	27	73	2
162	23	151	34	166	26
2,008	686	2,008	681	2,126	670
321	214	250	198	154	203
2,616	925	2,510	940	2,802	901
	Short-term	June 30, 2011 Long-term	Short-term	June 30, 2010 Long-term	Short-term

Financial indebtedness (million €)

			Carrying amounts based on effective interest method
	Nominal value (million, in issuing currency)	Effective interest rate	June 30, 2011	Dec 31, 2010	June 30, 2010
3.5% Euro Bond 2003/2010 of BASF SE	1,000	3.63 %	–	–	1,000
4% Euro Bond 2006/2011 of BASF SE	1,000	4.05 %	–	1,000	1,000
3.375% Euro Bond 2005/2012 of BASF SE	1,400	3.42 %	1,400	1,399	1,399
3.75% Euro Bond 2009/2012 of BASF SE	1,350	3.97 %	1,346	1,345	1,344
4.5% Euro Bond 2006/2016 of BASF SE	500	4.62 %	497	497	497
4.25% Euro Bond 2009/2016 of BASF SE	200	4.40 %	199	199	198
5.875% GBP Bond 2009/2017 of BASF SE	400	6.04 %	440	461	485
4.625% Euro Bond 2009/2017 of BASF SE	300	4.69 %	299	299	299
3.25% CHF Bond 2008/2011 of BASF Finance Europe N.V.	300	3.39 %	–	240	226
6% Euro Bond 2008/2013 of BASF Finance Europe N.V.	1,250	6.15 %	1,246	1,245	1,244
5% Euro Bond 2007/2014 of BASF Finance Europe N.V.	1,000	5.09 %	997	997	997
5% Euro Bond 2007/2014 of BASF Finance Europe N.V.	250	4.83 %	251	251	251
3.625% CHF Bond 2008/2015 of BASF Finance Europe N.V.	200	3.77 %	165	159	150
5.125% Euro Bond 2009/2015 of BASF Finance Europe N.V.	1,500	5.30 %	1,491	1,489	1,489
5.125% Euro Bond 2009/2015 of BASF Finance Europe N.V.	500	4.38 %	513	515	516
4.5% Euro Medium Term Note 2009/2016 of BASF Finance Europe N.V.	150	4.56 %	150	150	150
USD Extendible Floating Rate Notes of BASF Finance Europe N.V.		0.33 %	–	–	3
3.25% CHF Bond 2006/2012 of Ciba Spezialitätenchemie Finanz AG	225	3.32 %	184	177	165
4.875% Euro Bond 2003/2018 of Ciba Special. Chem. Finance Luxembourg S.A.	477	4.88 %	405	401	397
USD Commercial Paper	2,219		1,535	1,384	1,125
Other bonds			634	696	753
Bonds and other liabilities to the capital market			11,752	12,904	13,688
Liabilities to credit institutions			2,343	2,135	1,897
			14,095	15,039	15,585

16 – Related-party transactions

Material supply relationships exist for the supply of oil and gas between companies of the BASF Group and the proportionally consolidated joint venture companies Wintershall Erdgas Handelshaus GmbH & Co. KG, Berlin, and Wintershall Erdgas Handelshaus Zug AG, Zug, Switzerland. These transactions are conducted at arm's length prices and business terms. The unconsolidated portion of these supplies amounted to €443 million in the first half of 2011, and €513 million in the same period of 2010.

In addition, there are material supply relationships with Ellba C.V., the Netherlands, and Ellba Eastern Private Ltd., Singapore. The unconsolidated portion of these supplies amounted to €246 million in the first half of 2011, and €257 million in the same period of 2010.

There were no reportable related-party transactions with members of the Board of Executive Directors or the Supervisory Board. BASF has not issued loans to members of the Board of Executive Directors or the Supervisory Board.

Calculation of Adjusted Earnings per Share

		2nd Quarter		1st Half
		Million €	Million €	Million €	Million €
		2011	2010	2011	2010
Income before taxes and minority interests		2,096	1,986	5,476	3,746
Special items		49	127	(656)	241
Amortization of intangible assets		165	154	367	306
Amortization of intangible assets contained in the special items		–	–	(30)	(5)
Adjusted income before taxes and minority interests		2,310	2,267	5,157	4,288
Adjusted income taxes		605	725	1,530	1,411
Adjusted income before minority interests		1,705	1,542	3,627	2,877
Adjusted minority interests		97	161	234	283
Adjusted net income		1,608	1,381	3,393	2,594
Weighted average number of outstanding shares	in thousands	918,479	918,479	918,479	918,479
Adjusted earnings per share	€	1.75	1.50	3.69	2.82

The earnings per share figure adjusted for special items and amortization of intangible assets has become internationally established as a key figure that can be compared over the course of time and is particularly suitable for forecasts of future earnings.

The special items are primarily the result of the integration of acquired businesses, restructuring measures, impairment losses and gains or losses resulting from divestitures and sales of participations. This involves expenses and income that do not arise in conjunction with ordinary business activities. Intangible assets primarily result from purchase price allocation following acquisitions. The amortization of intangible assets is therefore of a temporary nature.

The calculation of earnings per share in accordance with International Financial Reporting Standards (IFRS) is presented in the Notes on page 30. Adjusted income before taxes and minority interests, adjusted net income and adjusted earnings per share are key ratios that are not defined under IFRS. They should not be viewed in isolation, but rather treated as supplementary information.

Statement in accordance with Section 37y and Section 37w (2) No. 3 of the German Securities Trading Act

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the Interim Financial Statements give a true and fair view of the assets, liabilities, financial position and profit situation of the Group, and the Interim Management's Analysis includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group in the remainder of the financial year.

Ludwigshafen, July 25, 2011 BASF SE The Board of Executive Directors

Forward-looking Statements

This report contains forward-looking statements. These statements are based on current estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed from pages 103 to 111 in the BASF Report 2010. The BASF Report can be found on the Internet at: basf.com/report. We do not assume any obligation to update the forward-looking statements contained in this report.

Interim Report 3rd Quarter 2011

Oct. 27, 2011

Full Year Results 2011

Feb. 24, 2012

Annual Meeting 2012 / Interim Report 1st Quarter 2012

Interim Report 1st Half 2012

July 26, 2012

April 27, 2012

Further Information Contact

Published on July 28, 2011

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BASF SE, 67056 Ludwigshafen, Germany