Q3 2013

QUARTERLY FINANCIAL REPORT of the K+S GROUP July to September

- Potash and Magnesium Products at lower average
- Salt business: Sales volumes rise by a good 9 % on last year
- Quarterly revenues decrease by roughly 11 %
- Operating earnings EBIT I at € 116 million (Q3/12: € 156 million)
- Programme "Fit for the future" started
- Outlook: EBIT I of more than € 600 million expected

KEY DATA BUSINESS DEVELOPMENT

Key Figures (IFRS) 1

		Q3/13	Q3/122	%	9M/13	9M/122	%

Revenues	€ million	817.7	916.6	(10.8)	2,972.5	2,993.7	(0.7)
– thereof Potash and Magnesium Products business unit		456.7	560.5	(18.5)	1,630.5	1,811.9	(10.0)
– thereof Salt business unit		321.0	318.5	+ 0.8	1,220.7	1,064.7	+ 14.7
Earnings before interest, taxes, depreciation and amortisation (EBITDA)		175.6	212.8	(17.5)	739.0	790.6	(6.5)
– thereof Potash and Magnesium Products business unit		134.8	181.7	(25.8)	580.6	675.3	(14.0)
– thereof Salt business unit		37.0	34.9	+ 6.0	155.8	126.9	+ 22.8
Operating earnings (EBIT I)		115.8	155.7	(25.6)	556.3	622.1	(10.6)
– thereof Potash and Magnesium Products business unit		107.0	158.1	(32.3)	498.2	605.8	(17.8)
Margin	%	23.4	28.2	—	30.6	33.4	—
– thereof Salt business unit		9.2	4.9	+ 87.8	68.8	38.6	+ 78.2
Margin	%	2.9	1.5	—	5.6	3.6	—
EBIT margin	%	14.2	17.0	—	18.7	20.8	—
Group earnings from contin ued operations, adjusted3		71.6	98.1	(27.0)	367.7	406.9	(9.6)
Earnings per share from con tinued operations, adjusted3	€	0.37	0.52	(28.8)	1.92	2.13	(9.9)
Operating cash flow		73.5	136.1	(46.0)	617.6	464.9	+ 32.8

Key Figures (IFRS) 1 Q3/13 Q3/122 % 9M/13 9M/122 % Free cash flow (68.8) (318.0) — 264.8 (322.5) — Capital expenditure4 186.4 102.5 + 81.9 488.5 221.4 > 100 Net indebtedness as of 30 September — — — 902.0 750.2 + 20.2 Net indebtedness/ EBITDA (LTM) — — — 0.9 0.7 — Equity ratio % — — — 52.9 51.7 — Return on Capital Employed (LTM)5 % — — — 17.5 21.5 — Book value per share as of 30 September € — — — 17.93 17.32 + 3.6 Average number of shares million 191.40 191.40 — 191.40 191.40 — Average number of employees 6 number 14,342 14,300 + 0.3 14,318 14,316 — Market capitalisation as of 30 September € billion — — — 3.7 7.3 (49.9) Enterprise value as of 30 September € billion — — — 4.6 8.1 (43.4) (continued)

Content

Financial Calendar

2014

Report on business in 2013	13 March 2014
Annual General Meeting, Kassel	14 May 2014
Quarterly Financial Report, 31 March 2014	14 May 2014
Dividend payment	15 May 2014
Half-yearly Financial Report, 30 June 2014	14 August 2014
Quarterly Financial Report, 30 September 2014	13 November 2014

← Footnotes Key Figures (IFRS)

1 Unless stated otherwise, information refers to the continued operations of the K+S Group. The income statement and the cash flow statement were adjusted in accordance with IFRS following the divestment of the nitrogen business. The balance sheet and therefore the key figures of net indebtedness and book value per share as of 30 September 2012 were not adjusted and also include the discontinued operations of the nitrogen business.
2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.
3 The adjusted key figures only include the result from operating forecast hedges of the respective reporting period reported in EBIT I, which eliminates effects from changes in the market value of the hedges as well as effects from the exchange rate hedging of future capital expenditure in Canadian dollar (Legacy Project). Related effects on deferred and cash taxes are also eliminated.
4 Capital expenditure in or depreciation on property, plant and equipment, intangible assets and investment properties as well as depreciation on financial assets.
5 Return on capital employed of the last twelve months as of 30 September.
6 FTE: Full-time equivalents; part-time positions are weighted in accordance with their respective share of working hours.

In this Quarterly Financial Report rounding differences may arise in percentages and numbers.

← Key Data Business Development U2

1 M ANAGEMENT REPORT

1.1 Group Structure and Business Operations	3
1.2 Corporate Strategy and Enterprise
Management	3
1.3 Overview of Course of Business	3
1.4 Earnings, Financial and Asset Position	8
1.5 Segments of the K+S Group	14
1.6 Employees	18
1.7 Research and Development	19
1.8 Risk Report	19
1.9 Opportunity Report	19
1.10 Subsequent Events	19
1.11 Forecast Report	20
1.12 Guarantee of the Legal Representatives
of K+S Aktiengesellschaft	22

2 financial section

2.1 Income Statement	24
2.2 Cash Flow Statement	26
2.3 Balance Sheet	28
2.4 Statement of Changes in Equity	29
2.5 Notes	30
2.6 Summary by Quarter	38

M ANAGEMENT REPORT

1.1 Group Structure and Business Operations 3 1.2 Corporate Strategy and Enterprise Management 3 1.3 Overview of Course of Business 3 1.4 Earnings, Financial and Asset Position 8 1.5 Segments of the K+S Group 14 1.6 Employees 18 1.7 Research and Development 19 1.8 Risk Report 19

1.9 Opportunity Report	19
1.10 Subsequent Events	19
1.11 Forecast Report	20
1.12 Guarantee of the Legal Representatives
of K+S Aktiengesellschaft	22

1.1 Group Structure and Business Operations

For a comprehensive description of our Group structure and business operations, including our products and services, please see the relevant passages in our Financial Report 2012 on page 57.

Changes in the scope of consolidation are presented in the Notes of this Quarterly Financial Report on page 31. The Group structure and business operations described in the Financial Report 2012 are unchanged. The major sales markets and competitive positions described in this chapter change as follows for the Potash and Magnesium Products business unit: Since 30 July 2013, Russian Uralkali and Belarusian Belaruskali are no longer acting jointly through the BPC export organisation. K+S is reacting to the resulting market changes.

1.2 Corporate Strategy and Enterprise Management

There were no changes in the strategy of the Company and its enterprise management in the third quarter. / For a detailed description of the corporate strategy and enterprise management, please see the relevant passages in our Financial Report 2012 on page 66.

1.3 Overview of course of business

Macroeconomic environment

The global economy improved slightly over the course of the third quarter of 2013. Economic activity picked up in the industrialised countries above all, while remaining muted in the emerging market countries. / tab: 1.3.1

With the downturn in the economy in Europe having already slowed in the first half of the year, gross domestic product was able to post a slight gain in the third quarter. Private consumer spending and capital expenditure rose slightly. In addition, the situation on the labour market improved, with the result that the number of people unemployed even declined slightly in the summer.

The US economy gained appreciably in momentum in the third quarter. In particular, investment in commercial and industrial construction rose significantly. While private household demand grew slightly, it nevertheless continued to be subdued on account of the tax increases that came into force at the start of the year. The unemployment rate continued to decline while the number of job vacancies rose significantly in the third quarter.

The economies of the emerging market countries continued to grow, albeit at a slowed pace, during the quarter under review, with continued weak demand from the industrialised countries as a result of the recessions in Japan and Europe having a particular impact.

Monetary policy in the industrialised countries continued to be expansionary during the course of the third quarter of 2013. Both the European Central Bank (ECB) and the Federal Reserve Bank (FED) left their key interest rates at 0.50 % and 0 to 0.25 % respectively.

The price of Brent crude oil rose moderately over the course of the quarter and was about US\$ 108 per barrel at the end of September (30 June 2013: US\$ 102; 31 December 2012: US\$ 111). The background to the price increase in the quarter under review was a reduction in supply on the part of the OPEC countries; at about US\$

Percentage change in Gross Domestic Product TAB: 1.3.1
	2013e	2012	2011	2010	2009
in %; real
Germany	+ 0.4	+ 0.7	+ 3.0	+ 3.7	(4.7)
European Union (EU-28)	(0.1)	(0.3)	+ 1.6	+ 1.9	(4.2)
World	+ 2.7	+ 3.1	+ 3.9	+ 5.1	(0.8)

Source: Deka Bank

110, the average price for the third quarter of 2013 was on the level of the same quarter a year ago (Q3/12: US\$ 110). / FIG: 1.3.1

With the supply outlook more favourable, the prices of some agricultural commodities fell significantly during the third quarter. Only the price of wheat posted an increase of about 5 % during the course of the quarter.

The US dollar weakened somewhat against the euro over the course of the quarter under review, and as of 30 September, was trading at 1.35 USD/EUR (31 December 2012: 1.32 USD/EUR; 30 September 2012: 1.29 USD/ EUR). The strengthening of the euro was particularly attributable to the continued easing of the European sovereign debt crisis and to positive economic data for the euro zone. In terms of the average for the quarter, the US dollar was, at 1.32 USD/EUR, below the level for the same quarter of the previous year (Q3/12: 1.25 USD/ EUR). In addition to the USD/EUR currency relationship, a relative comparison of the currencies of our competitors (Canadian dollar, Russian rouble) in relation to the US dollar in each case is of importance for us. A strong US dollar normally has a positive impact on the earnings capacity of most of the world's potash producers in their respective local currency; this is due to the fact that the bulk of worldwide potash output lies outside the US dollar zone while almost all sales, with the exception of the European market, are invoiced in US dollars.

Figure 1.3.2 shows the performance of the US dollar against the euro and the currencies of our competitors

from Canada and Russia over the course of the third quarter. / FIG: 1.3.2

Impact on K+S

The changes in the macroeconomic environment had the following main effects on the course of business for K+S in the third quarter:

- The energy costs of the K+S Group are particularly affected by the costs of procuring gas. With the aim of creating greater flexibility and lowering purchasing costs, the gas supply contracts of the Potash and Magnesium Products business unit, which were previously largely linked to the oil price, were renegotiated last year, so that future price opportunities on the gas spot markets can be exploited for part of the volumes obtained. Gas procurement now comprises a relative balance in relation to procurement on the gas spot market, longer-term contracts for which fixed gas prices have been agreed and agreements tied to the oil price, which are reflected in our cost accounting with a delay now of only three to four months. Consequently, energy procurement will be more diversified in the future and we can take advantage of opportunities arising on the energy markets. In the third quarter, it was possible for the Potash and Magnesium Products business unit to achieve a moderate saving on energy costs.
- Foreign currency hedging system: As a result of the hedging instruments used for the Potash and Magnesium Products business unit, the exchange rate in the third quarter was on average 1.29 USD/EUR incl. hedging costs and thus more favourable than the

average spot rate (1.32 USD/EUR) as well as the rate for the same period a year ago (Q3/12 exchange rate incl. hedging costs: 1.30 USD/EUR).

Industry-specific framework conditions

The conditions on important sales markets and the competitive positions of the individual business units described in the "Group Structure and Business Operations" section of the Financial Report 2012 on page 57 essentially remained unchanged. The circumstances in which Russian Uralkali left the BPC export organisation previously operated jointly with Belarusian Belaruskali on 30 July 2013 were of particular relevance to the Potash and Magnesium Products business unit. The report will elaborate on the respective effects of this.

Potash and Magnesium Products business unit

The global potash market during the first half of 2013 was characterised by increased demand compared with the same period a year ago. The conclusion of contracts by North American and Russian producers with Chinese and Indian customers at the beginning of the year caused demand to rise significantly again – in time with the start of the spring season in Europe and North America as well as in South America and South East Asia. Against this backdrop, the international prices for potassium chloride stabilised over the course of the first half of 2013.

In the third quarter, the announcement issued by Russian Uralkali that it would leave the BPC sales organisation operated jointly with Belarusian Belaruskali and the associated statements issued by Uralkali saying it would expand its own capacity and the utilisation of that capacity regardless of the price level created considerable uncertainty about future volume and price trends on the potash market. This initially resulted in significant buying restraint on the part of potash customers and subsequently in a reduction in the international price level.

Salt business unit

De-icing salt – Western Europe

As a result of the wintry weather at the start of the year, sales volumes for the European de-icing salt market were up significantly on the same period a year ago. Early stocking-up demand for the 2013/14 winter season was therefore good. The overall good price level could also be maintained in the third quarter, although some slight pressure on prices was discernible in certain regions of Western Europe.

De-icing salt – North America

Despite the normalisation of market conditions in the de-icing salt regions of the United States and in Canada at the start of the year, North American tender price levels for the coming winter season came under pressure because users still had relatively high stocks as a result of the winter 2012/13 having been generally mild.

Industrial salt

While demand for industrial salt was stable in South America, demand in some regions of Europe rose slightly as a result of positive economic trends. At the same time, competition intensified both in South America as well as in parts of Northern Europe. Whereas a slight price decrease had to be recorded in North America, industrial salt prices in Europe remained relatively stable.

Food grade salt

Demand for food grade salt in Europe and in South America remained good, whereas a decrease in demand was noted in North America. While prices in Europe remained largely stable, on the North American market a slight price reduction was recorded as a result of competition intensifying further.

Salt for chemical use

Demand for salt for chemical use remained largely stable on the North and South American markets in the third quarter; by contrast, the markets in Europe and Asia displayed a slight downward trend.

K+S on the capital market

Course of the K+S share price in the third quarter

After trading at about € 28 at the start of the third quarter, the price of the K+S share fell sharply until the end of September.
While the share price in July was initially depressed by muted expectations regarding the development of potash prices in the second half of the year, the

aforementioned announcements and comments on the part of Uralkali caused the share prices for all potash producers to plunge. At the end of August, the K+S share finally closed at € 18.37.

K+S DAX DJ STOXX 600 MSCI World Source: Bloomberg

At the beginning of September, speculation that the BPC distribution alliance might be revived and the expectation that tensions on the potash market may ease triggered a short-lived rise in the price of the K+S share, which reached a high of € 23.15.
On 30 September, the price of the K+S share closed at € 19.16. It was therefore down about 45 % on the clos-

C apital Market Key Data							TAB: 1.3.2
		Q3/13	Q3/12	%	9M/13	9M/12	%
Closing price as of 30 September	XETRA, €	—	—	—	19.16	38.27	(49.9)
Highest price	XETRA, €	28.32	40.86	(30.7)	37.53	40.86	(8.2)
Lowest price	XETRA, €	15.92	36.12	(55.9)	15.92	30.40	(47.6)
Average price	XETRA, €	21.69	38.85	(44.2)	29.58	37.22	(20.5)
Performance year to date	%	(32.6)	+ 6.3	—	(45.3)	+ 9.6	—
Market capitalisation as of 30 September	€ billion	—	—	—	3.7	7.3	(49.9)
Enterprise value as of 30 September	€ billion	—	—	—	4.6	8.1	(43.4)

Performance of the K+S Share in Relation to Peers FIG: 1.3.5 in % January February March April May June July August September

ing price for 2012. Over the same period, the DAX, MSCI World and Stoxx 600 indices rose by 13 %, 15 % and 11 % respectively.

/ FIG: 1.3.3, 1.3.4 / TAb: 1.3.2

/ You can find the current share price and further information about the stock at www. k-plus-s.com/en/ks-aktie.

Since the start of the year, the share prices of Uralkali, Mosaic and Potashcorp have fallen by about 32 %, 24 % and 23 % respectively. By contrast, the share price of salt producer Compass rose by 2 %. / FIG: 1.3.5

According to Bloomberg, 8 banks gave us a "buy/accumulate" recommendation, 8 a "hold/neutral" recommendation and 22 a "reduce/sell" recommendation. The average target price was € 17.25.

Shareholder structure

During the third quarter of 2013, there were no significant changes in the shareholder structure, and to that extent, it was as follows as of 30 September:

- Meritus Trust Company Limited via EuroChem Group SE: 9.88 % (notification of 12 July 2011)
- Blackrock: 5.08 % (notifications of 11 May 2012)

Under the free float definition applied by Deutsche Börse AG, the free float remains unchanged at about 90 %.

K+S Bonds

Source: Bloomberg

As a result of the continued high provision of liquidity by the ECB and the other major central banks, the bond

K+S PotashCorp Mosaic Uralkali Compass Source: Bloomberg

Index: 31 December 2012; Calculation on the basis of local currencies

prices of obligors with good credit ratings remained on a high level on the capital market while yields were comparatively low. However, the statements issued by Uralkali triggered a substantial price decrease, thus causing the yield to rise. The bond maturing in September 2014 (issue volume: € 750 million; interest coupon: 5.0 % p.a.) was quoted at 104.0 % on 30 September 2013 with a yield of 0.8 % p.a. (31 December 2012: 107.1 % and 0.8 % p.a. respectively). The price of the 10-year bond which was issued in June 2012 (issue volume: € 500 million; interest coupon: 3.0 % p.a.) was quoted at 97.9 % on 30 September 2013 with a yield of 3.3 % p.a. (31 December 2012: 104.8 % and 2.4 % p.a. respectively).

1.4 Earnings, Financial and Asset Position

development of orders

Most of the business of the K+S Group is not covered by longer-term agreements concerning fixed volumes and prices.

In the Potash and Magnesium Products business unit, the proportion of the backlog of orders in relation to revenues is low, i.e. less than 10 %. This is customary in the industry. The business is largely characterised by long-term customer relationships as well as revolving framework agreements with non-binding volume and price indications.

In the Salt business unit, de-icing salt contracts for the public sector in Europe, Canada and the United States are issued by means of public invitations to tender. These take place every second and third quarter for the upcoming winter season, but also, to a certain extent, for the following winter. The contracts include both price and maximum volume agreements. However, as the actual volumes depend on the winter weather conditions and are therefore uncertain in advance, they cannot be classified as backlog of orders as such. This also applies to agreements with minimum purchasing obligations on the part of our customers, since they can normally be shifted to the following winter in the event of weak demand in a season.

For the above-mentioned reasons, the disclosure of the backlog of orders of the K+S Group and its business units is of no relevance for assessing the short- and medium-term earnings capacity.

Revenues and Earnings Position

Revenues fall by 10.8% in the third quarter

Overall, the revenues of the K+S Group for the first nine months were just about stable at € 2,972.5 million (9M/12: € 2,993.7 million). In particular due to the high first quarter sales volumes in both business units, negative price and volume effects on the Potash and Magnesium Products business unit could almost be compensated. The revenues for the quarter under review fell by € 98.9 million to € 817.7 million, mainly prompted by price factors; this corresponds to a decrease of about 11 % compared with the robust figure for the same period a year ago. / TAb: 1.4.1

In the first nine months of the year, just under 55 % of revenues were generated by the Potash and Magnesium Products business unit, followed by Salt (41 %) and Complementary Activities (4 %). In Europe, we generated a revenue share of approximately 45 %, followed by North America (27 %), South America (16 %) and Asia (10 %). / FIG: 1.4.1, 1.4.2

Development of selected cost types

Total costs (revenues minus EBIT) remained roughly constant in the quarter under review. The most important cost types developed as follows: Personnel expenses amounted to € 226.0 million in the third quarter or about 30 % of revenues and thus remained on the level of the same quarter a year ago (for more explanations, see page 19). Freight costs, about 20 % measured in terms of revenues, rose significantly compared with a year ago

V ariance analysis		TAB: 1.4.1
in %	Q3/13	9M/13
Change in revenues	(10.8)	(0.7)
volume/structure	+ 1.6	+ 6.5
prices/price-related	(9.1)	(5.6)
exchange rates	(3.3)	(1.6)
consolidation	—	—

Detailed information on average prices and sales volumes can be found in tables 1.5.3 and 1.5.6.

mainly as a result of volume factors, while energy costs (as a proportion of revenues: just under 10 %) fell slightly.

To make sustainable improvements to organisational and cost structures, K+S has been working on an array of projects for some time with the aim of increasing efficiency of production and administrative and sales functions. In order to strengthen the Company's competitiveness, it has compiled the plans with additional activities in the 'Fit for the Future' programme. K+S strives a total in the magnitude of € 500 million over the next three years in comparison with the cost planning for the same period; the Company expects a cost reduction of a good € 150 million in the year 2014.

4 Asia 9.8 12.8 5 Africa, Oceania 2.5 2.9

The planned savings will primarily stem from material costs, but also include considerations that could lead to reductions in the number of employees.

Operating earnings EBIT I at € 556.3 million

For the first nine months of 2013, the K+S Group achieved operating earnings of € 556.3 million, which represents a decrease of about 11 % on the figure reported a year ago (9M/12: € 622.1 million). At € 182.7 million, depreciation and amortisation taken into account in the first nine months were a good 8 % above the figure for the same period a year ago (9M/12: € 168.5 million). Operating earnings EBIT I for the quarter under review fell significantly by € 39.9 million to € 115.8 million (Q3/12: € 155.7 million). In the Potash and Magnesium Products business unit, lower prices promoted by the uncertainty on the market for products containing potassium as well as lower sales volumes resulted in declining earnings. By contrast, operating earnings in the Salt business unit rose slightly; higher volume-related earnings contributions from the early stocking-up business could more than offset increased maintenance costs. At € 59.8 million, depreciation and amortisation were up on the figure for the same period a year ago (Q3/12: € 57.1 million) as a result of higher capital expenditure on the package of measures for water protection.

The result from operating forecast hedges included in EBIT I corresponds – due to the elimination of all fluctuations in the market value during the term – to the value of the hedges at the time of realisation (difference between the spot rate and hedged rate) less the premiums paid or plus the premiums received in the case of option transactions. The changes in the market value of the operating forecast hedges still outstanding are, however, only taken into consideration in the result after operating hedges (EBIT II).

Result after operating hedges (EBIT II)

For the first nine months of 2013, at € 546.1 million, the result after operating hedges EBIT II was down significantly on the figure of a year ago (9M/12: € 651.0 million); the earnings effects resulting from the operating forecast hedges included in this figure amounted to € (10.2) million (9M/12: € +28.9 million). EBIT II for the quarter under review reached € 114.9 million, after having been € 177.1 million for the same quarter a year ago ((35)%). EBIT II for the third quarter was adversely affected by earnings effects resulting from operating forecast hedges in the amount of € 0.9 million, while the figure a year ago had still benefited from € 21.4 million.

Under IFRS, changes in the market value from hedging transactions have to be reported in the income statement. EBIT II includes all earnings arising from operating hedging transactions, i.e. both valuation effects as at the reporting date and earnings from realised operating hedging derivatives. Effects on earnings from the hedging of underlying transactions relating to financing whose earnings effects do not influence EBIT are shown in the financial result.

Financial result improved

Overall, the financial result for the first three quarters was € (56.8) million against € (60.9) million in the previous year. The financial result for the third quarter was € (21.4) million compared with € (21.7) million for the same period a year ago; the improvement is due to lower interest expenses, and higher interest income also had a positive effect. In addition to the interest expenses for pension provisions (Q3/13: € (1.4) million), the financial result also includes the interest expenses for other non-current provisions, mainly provisions for mining obligations (Q3/13: € (7.0) million); both are noncash.

/ Further details regarding the financial result can be found in the Notes on page 34.

(Adjusted) earnings before income taxes

For the first nine months, earnings before income taxes were € 489.3 million (9M/12: € 590.1 million) and earnings before income taxes adjusted for the effects of operating forecast hedges that were not already recorded in operating earnings EBIT I came to € 499.5 million (9M/12: € 561.2 million). In the quarter under review, earnings before income taxes totalled € 93.5 million and were down about 40 % on the figure for the same quarter a year ago (Q3/12: € 155.4 million). Adjusted earnings before income taxes amounted to € 94.4 million and were therefore down € 39.6 million or 30 % on that posted a year ago.

The average domestic Group tax rate was 28.5 % in the third quarter (Q3/12: 28.5 %), and the adjusted Group tax ratio from continued operations amounted to 24.1 % for the 2013 quarter under review, compared with 26.8 % for the same quarter a year ago.

(Adjusted) Group earnings from continued operations

For the first nine months, Group earnings after taxes from continued operations amounted to € 360.4 million (9M/12: € 427.6 million). The tax expense for this period was € 128.6 million, including deferred, i.e. non-cash tax income of € 40.1 million (income tax expense 9M/12: € 162.0 million, of which € 31.0 million was deferred tax income). Compared with the same period a year ago, adjusted Group earnings from continued operations for the first three quarters fell by € 39.2 million or about 10 % to € 367.7 million. Per share, this represents a decrease of just under 10 % to € 1.92 compared with € 2.13 a year ago. At € 70.9 million, Group earnings after taxes from continued operations for the third quarter remained significantly below the figure for a year ago (Q3/12: € 113.4 million). In the quarter under review, a tax expense totalling € 22.5 million was incurred, including deferred, i.e. non-cash tax income in the amount of € 15.4 million (Q3/12: tax expense of € 41.8 million, of which € 7.7 million was deferred tax income). Adjusted Group earnings from continued operations for the quarter under review fell by € 26.7 million or about 27 % to € 71.6 million (Q3/12: € 98.1 million). In the quarter under review, adjusted earnings per share from continued operations reached € 0.37 and were thus about 29 % below the figure for the same period last year of € 0.52. This was computed on the basis of 191.40 million no-par value shares, being the average number of shares outstanding. / Further details regarding income taxes can be found in the Notes on page 34.

Adjusted Group earnings and adjusted earnings per share

Adjusted Group earnings for the first nine months came to € 367.7 million (9M/12: € 507.2 million, with the discontinued operations of K+S Nitrogen accounting for € 100.3 million). Adjusted Group earnings (including discontinued operations) in the third quarter reached € 71.6 million (Q3/12: € 164.5 million). In the same quarter a year ago, € 66.4 million was still attributable to the discontinued operations of the nitrogen business.

Adjusted earnings per share, including discontinued operations, for the first nine months reached € 1.92, compared with € 2.65 for the same period a year ago, with € 0.52 attributable to discontinued operations at this time. Adjusted earnings per share (including discontinued operations) in the quarter under review reached € 0.37 (Q3/12: € 0.86); in the same quarter a year ago, this still included € 0.34 from the discontinued operations of the nitrogen business.

Financial position

Capital expenditure in third quarter rises steeply as planned

In the first nine months, capital expenditure came to € 488.5 million in all (9M/12: € 221.4 million), a good third of which € 193.9 million – was used for measures relating to replacement and ensuring production; this share exceeded the depreciation in the amount of € 182.7 million. In the third quarter of 2013, the capital expendi-

1 Capital expenditure in property, plant and equipment, intangible and financial assets of the continued operations. 2 Further information regarding future capital expenditures can be found on page 21.

ture incurred by the K+S Group came to € 186.4 million and was therefore about 80 % higher than in the same quarter of the previous year (Q3/12: € 102.5 million). The majority of the capital expenditure was accounted for by the Potash and Magnesium Products business unit. In this business unit, the increase is mainly attributable to the implementation of the package of measures for water protection in the Hesse-Thuringia potash district and to the Legacy Project – mainly infrastructure, water supply, drilling and engineering works –, which is advancing as planned in terms of cost and time. The volume of capital expenditure in the Salt business unit also rose significantly, with the optimisation of the mining process at the rock salt site in Fairport, USA, the expansion of the brine field at Frisia in Harlingen, the Netherlands, and measures for the development of a lower-lying mining level at the rock salt site in Weeks Island, USA, being among the most important projects in the quarter under review. Just under one half of the capital expenditure is accounted for by measures relating to replacement and ensuring production; also this share of about € 87.5 million exceeded the depreciation of € 59.8 million. / FIG: 1.4.3

Cash flow from operating activities benefits from significantly fewer funds being tied up in working capital

Gross cash flow reached € 490.9 million in the first nine months and was thus down € 134.2 million or about 22 % on the figure posted a year ago as a result of lower EBIT I and higher income tax payments (9M/12: € 625.1 million). The increase in income tax payments resulted from a back payment for the year 2012, which had already benefited from a tax refund for 2011. / TAb: 1.4.2

Cash flow from operating activities (without the outfinancing of pension obligations) in the first nine months could be increased by € 156.4 million or about 33 % to € 631.4 million. This was attributable to a significantly lower tying up of funds in working capital. In the Potash and Magnesium Products business unit, receivables fell as a result of price and volume factors, especially in the overseas business. In the Salt business unit, there was also a significant decrease in receivables and a significantly higher reduction in inventories due to in part above-average wintry weather in the first quarter.

Cash flow for investing activities (without investments in securities) in the first nine months amounted to € (458.0) million (9M/12: € (223.1) million) due to higher capital expenditure, especially in connection with the package of measures for water protection and the Legacy Project. Free cash flow (without out-financing of pension obligations and investments in securities) totalled € 173.4 million (9M/12: € 251.9 million). Adjusted for acquisitions/divestments, the free cash flow (without out-financing of pension obligations and investments in securities) declined by € 82.7 million to € 173.4 million compared with the same period a year ago (9M/12: € 256.1 million).

Cash flow from/for financing activities for the first nine months amounted to € (271.3) million, compared with € 243.8 million for the same period a year ago, which had benefited from the issuance of a bond for about € 500 million. As of 30 September 2013, net cash and cash equivalents amounted to € 334.0 million (30 September 2012: € 385.0 million; 31 December 2012: € 345.0 million). It should be noted that during the period under review, € 237.2 million was invested in securities and other financial investments, while there was a cash inflow of € 342.4 million from matured securities and from financial investments. These relate to investments with terms from the acquisition date of more than three months which continue to remain available as cash reserves but cannot be regarded as net cash and cash equivalents in accordance with IFRS.

As of the reporting date, net indebtedness (including provisions for pensions and mining obligations) increased to € 902.0 million compared with the figure as of 30 September 2012 (€ 750.2 million) due to the scheduled rise in capital expenditure for the Legacy Project. / Further information on this can be found in the Notes on page 36.

Very solid financing structure

The financing structure of the K+S Group continues to be very solid: As of 30 September 2013, the equity ratio remained on a high level, amounting to about 53 % of the balance sheet total. The share of non-current debt, including non-current provisions, amounted to 27 % (30 September 2012: 40 %), while the share of current debt rose to 20 % (30 September 2012: 8 %). The reason for this is that the bond due in September 2014 is now recorded as current debt.

C ash flow Overview 1		TAB: 1.4.2
	9M/13	9M/12
in € million
Gross cash flow	490.9	625.1
Cash flow from operating activities 2	631.4	475.0
Cash flow for investing activities 3	(458.0)	(223.1)
– of which acquisitions/divestments	—	(4.2)
Free cash flow2,3	173.4	251.9
Free cash flow before acquisitions/divestments 2,3	173.4	256.1
Cash flow from/for financing activities	(271.3)	243.8
Operational change in cash and cash equivalents 2,3	(103.1)	+ 498.5

1 Information refers to the continued operations of the K+S Group.

2 Without out-financing of pension obligations in the amount of

€ (13.8) million in 9M/13 (9M/12: € (10.1) million).

3 Without purchases/disposals of securities and other financial investments in the amount of € 105.2 million net in 9M/13 (9M/12: € (564.3) million).

/ Further details concerning the main changes in individual balance sheet items can be found in the Notes on page 36.

As of 30 September 2013, the K+S Group's debt consisted chiefly of financial liabilities (41 %), provisions (39 %) and trade payables (7 %). As of 30 September 2013, financial liabilities amounted to € 1,265.8 million; of this, € 749.5 million could be classified as current. The main provisions of the K+S Group as of 30 September 2013 concern provisions for mining obligations (€ 720.3 million, down € 13.7 million compared with 31 December 2012) as well as for pensions and similar obligations (€ 104.3 million, up € 55.8 million). / FIG: 1.4.4

Off-balance sheet financing instruments/Off-balance sheet assets

We primarily use operating leases, for example for vehicles, storage capacity and IT accessories. Due to the chosen contractual structures, these items are not to be carried under fixed assets.

Asset position

As of 30 September 2013, the balance sheet total of the K+S Group amounted to € 6,490.8 million, which represents a decrease of about 2 % on the end of 2012. The ratio of non-current to current assets was 63:37. The proceeds from the bond issued in June 2012 were invested temporarily in securities and other financial investments with terms of more than twelve months and are now in part recorded as current assets due to their remaining term. Cash and cash equivalents, current and non-current securities and other financial investments totalled € 1,170.1 million, which corresponds to a decrease of about 9 % since the start of the year (31 December 2012: € 1,286.3 million).

/ Further details concerning the main changes in individual balance sheet items can be found in the Notes on page 36.

Including the cash and cash equivalents (€ 340.8 million), the non-current and current securities and other financial investments (€ 829.3 million) on the one hand and claims for reimbursement in connection with a bond at Morton Salt (€ 18.3 million), the provisions for mining obligations and pensions (€ 720.3 million and € 104.3 million respectively) and the financial liabilities (€ 1,265.8 million) on the other, the net indebtedness of the K+S Group was € 902.0 million as of 30 September 2013 (31 December 2012: € 827.3 million); this represents an increase of € 151.8 million on the figure posted a year ago (30 September 2012: € 750.2 million). / FIG: 1.4.5

E quity and Liabilities						FIG: 1.4.4
in %	20	40	60	80		100
			52.9	26.7		20.4
30.09.2013			51.5		38.7	9.8
31.12.2012			51.6		40.0	8.4
30.09.20121

Equity Non-current debt Current debt

1 Information as of 30 September 2012 has not been adjusted and also includes the discontinued operations of the nitrogen business.

assets					FIG: 1.4.5
in %	20	40	60	80	100
30.09.2013			63.5		36.5
31.12.2012			62.9		37.1
30.09.20121			62.0		38.0

Non-current assets Current assets

1 Information as of 30 September 2012 has not been adjusted and also includes the discontinued operations of the nitrogen business.

1.5 Segments of the K+S Group

Potash and Magnesium Products Business Unit

/ A description of the market environment in the Potash and Magnesium Products business unit can be found on page 5 in the 'Industry-specific framework conditions' section.

Revenues

For the first nine months, the business unit saw revenues decrease by 10 % to € 1,630.5 million; at 5.43 million tonnes, sales volumes nevertheless remained on the level of a year ago. At € 456.7 million, revenues for the third quarter of 2013 were down € 103.8 million or 18.5 % on the figure posted a year ago (Q3/12: € 560.5 million), with the lower price level on the global potash markets being the principal cause of the revenue decrease. Additionally, exchange rate effects in the overseas business had a negative impact on the development of rev-

Industrial products (4.9) (1.6)

Potash and Magnesium Products Business Unit TAB: 1.5.2
	Q3/13	Q3/12	%	9M/13	9M/12	%
in € million
Revenues	456.7	560.5	(18.5)	1,630.5	1,811.9	(10.0)
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	134.8	181.7	(25.8)	580.6	675.3	(14.0)
Operating earnings (EBIT I)	107.0	158.1	(32.3)	498.2	605.8	(17.8)
Capital expenditure	155.4	80.8	+ 92.3	413.9	158.8	>100
Employees as of 30 September (number)	—	—	—	8,382	8,374	+ 0.1

V ariance analysis		TAB: 1.5.1	R				FIG: 1.5.2
	Q3/13	9M/13				9M/13	9M/12
in %			5		in %
Change in revenues	(18.5)	(10.0)		1	1 Europe	53.0	47.5
volume/structure	(1.4)	+ 1.4	4		– of which Germany	12.7	12.9
prices/price-related	(14.5)	(10.0)			2 North America	3.1	2.1
exchange rates	(2.6)	(1.3)			3 South America	22.4	25.4
consolidation	—	—	3		4 Asia	17.2	20.4
				2	5 Africa, Oceania	4.3	4.6
Potassium chloride	(31.6)	(17.8)
Fertilizer specialities	(4.0)	(1.2)

D	evelopment of revenues, sales volumes and average prices by region 1 TAB: 1.5.3
		Q1/12	Q2/12	Q3/12	9M/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	9M/13
Revenues	€ million	581.9	669.5	560.5	1,811.9	478.7	2,290.6	625.5	548.3	456.7	1,630.5
Europe	€ million	318.7	273.0	268.4	860.1	258.6	1,118.7	354.4	276.3	233.1	863.8
Overseas	US\$ million	345.0	508.1	365.2	1,218.3	285.4	1,503.7	358.0	355.3	296.5	1,009.8

Sales volumes	t eff. million	1.78	1.96	1.69	5.43	1.52	6.95	2.03	1.77	1.63	5.43
Europe	t eff. million	0.98	0.85	0.85	2.68	0.84	3.52	1.11	0.89	0.77	2.77
Overseas	t eff. million	0.80	1.11	0.84	2.75	0.68	3.43	0.92	0.88	0.86	2.66

Average prices	€/t eff.	327.4	340.8	332.3	333.7	314.2	329.4	308.0	309.4	280.4	300.2
Europe	€/t eff.	326.1	319.5	315.7	320.7	308.4	317.8	318.8	311.7	301.3	311.7
Overseas	US\$/t eff.	431.1	457.7	436.5	443.5	415.4	437.9	389.5	401.0	346.3	379.6

1 Revenues include prices both inclusive and exclusive of freight costs and, in the case of overseas revenues, are based on the respective USD/EUR spot rates. For most of these revenues, hedging transactions have been concluded. The price information is also affected by the respective product mix and is therefore to be understood as providing a rough indication only.

enues. In the case of our most important product in terms of volumes, potassium chloride, revenues for the quarter under review fell by € 92.5 million or 31.6 % to € 200.3 million, which was mainly due to the significant decline in prices as well as lower sales volumes compared with the corresponding period a year ago. In the case of fertilizer specialities, revenues decreased only slightly to € 186.9 million (Q3/12: € 194.7 million). Revenues for industrial products declined by 4.9 % to € 69.5 million (Q3/12: € 73.0 million), mainly as a result of currency and volume factors. Sales volumes for potash and magnesium products only decreased in the third quarter compared with the same period a year ago, falling by about 4 % to 1.63 million tonnes (Q3/12: 1.69 million tonnes). / Tab: 1.5.1, 1.5.2, 1.5.3 / FIG: 1.5.1, 1.5.2

Development of earnings

At € 498.2 million, operating earnings EBIT I for the first nine months were down 17.8 % on the same period a year ago (9M/12: € 605.8 million); this figure includes depreciation and amortisation of € 82.2 million (9M/12: € 69.5 million). Operating earnings EBIT I for the third quarter reached € 107.0 million and were down 32.3 % on the figure for the same quarter a year ago (€ 158.1 million). The reason for this was a lower price level compared with the quarter a year ago. Depreciation and amortisation amounted to € 27.8 million, compared with € 23.5 million for the same quarter a year ago.

Salt Business Unit

/ A description of the market environment in the Salt business unit can be found on page 5 in the 'Industry-specific framework conditions' section.

Revenues

The Salt business unit was able to increase its total revenues for the first nine months due to volume and price factors to € 1,220.7 million (9M/12: € 1,064.7 million), which corresponds to an increase of 15 %. At € 321.0 million, third quarter revenues were on the same level as a year ago (Q3/12: € 318.5 million); positive volume effects were almost completely cancelled out by revenue decreases attributable to currency and structural factors.

Revenues for the de-icing salt business in the quarter under review rose by about 28 % to € 73.3 million (Q3/12: €

V ariance analysis		TAB: 1.5.4
in %	Q3/13	9M/13
Change in revenues	+ 0.8	+ 14.7
volume/structure	+ 6.5	+ 15.7
prices/price-related	(1.0)	+ 1.1
exchange rates	(4.9)	(2.3)
consolidation	+ 0.2	+ 0.1
Food grade salt	(9.2)	(6.0)
Industrial salt	(1.5)	+ 1.3
Salt for chemical use	(6.6)	(6.6)
De-icing salt	+ 27.7	+ 60.8
Other	(7.8)	(12.6)

57.4 million), especially as a result of the good early stocking-up business in Europe. Revenues for food grade salt fell by 9 % to € 82.8 million (Q3/12: € 91.2 million), mainly due to currency effects. Compared with the same quarter a year ago, industrial salt revenues remained more or less stable at € 124.1 million (Q3/12: € 126.0 million); positive volume effects could almost offset revenue decreases attributable to structural, price and currency factors. At € 26.7 million, third quarter revenues achieved with salt for chemical use were down slightly on the figure for the same period a year ago (Q3/12: € 28.7 million); pricerelated revenue increases in North America could just about offset lower sales volumes. In the case of Other, revenues fell by 8 % to € 14.1 million (Q3/12: € 15.3 million). However, total crystallised salt sales volumes for the first nine months rose by 24 % to 15.53 million tonnes against the background of a below-average sales volume for deicing salt (9M/12: 12.50 million tonnes). During the quarter under review, sales volumes of crystallised salt totalled 3.65 million tonnes and were therefore up a good 9 % on the figure for the same period a year ago (Q3/12: 3.34 million tonnes). / Tab: 1.5.4, 1.5.5, 1.5.6 / FIG: 1.5.3, 1.5.4

Development of earnings

Operating earnings EBIT I in the Salt business unit for the first nine months rose to € 68.8 million compared with € 38.6 million a year ago, impacted by depreciation and amortisation of € 87.0 million (9M/12: € 88.3 million). This increase is primarily attributable to significantly higher revenues as a result of volume factors due to the above-average de-icing salt business in Europe. This was countered by one-off effects at Morton Salt

S alt Business Unit						TAB: 1.5.5
	Q3/13	Q3/12	%	9M/13	9M/12	%
in € million
Revenues	321.0	318.5	+ 0.8	1,220.7	1,064.7	+ 14.7
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	37.0	34.9	+ 6.0	155.8	126.9	+ 22.8
Operating earnings (EBIT I)	9.2	4.9	+ 87.8	68.8	38.6	+ 78.2
Capital expenditure	23.5	17.8	+ 32.3	50.2	51.2	(1.9)
Employees as of 30 September (number)	—	—	—	5,123	5,033	+ 1.8

R evenues by Region January – September 2013			FIG: 1.5.4
5		9M/13	9M/12
4	in %
1 3	1 Europe	28.3	23.3
	– of which Germany	13.1	8.9
	2 North America	62.5	65.5
2	3 South America	7.9	9.8
	4 Asia	0.9	1.3
	5 Africa, Oceania	0.4	0.1

D evelopment of revenues, sales volumes and average prices 1							TAB: 1.5.6
		Q1/12	Q2/12	Q3/12	9M/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	9M/13
De-icing salt
Revenues	€ million	207.3	29.6	57.4	294.2	161.7	456.0	359.4	40.4	73.3	473.1
Sales volumes	t million	4.02	0.60	1.11	5.73	2.60	8.33	6.53	0.77	1.41	8.72
Average prices	€/t	51.5	49.6	51.7	51.3	62.2	54.7	55.1	52.1	51.9	54.3
Industrial salt, salt for chemical use and food grade salt
Revenues	€ million	228.1	245.7	245.8	719.6	239.6	959.2	236.5	233.2	233.6	703.2
Sales volumes	t million	2.16	2.38	2.23	6.77	2.46	9.23	2.38	2.19	2.24	6.81
Average prices	€/t	105.8	103.2	110.0	106.3	97.5	104.0	99.5	106.5	104.4	103.3
Other
Revenues	€ million	23.1	12.4	15.3	50.8	18.8	69.6	18.6	11.7	14.1	44.4
Salt business unit
Revenues	€ million	458.5	287.7	318.5	1,064.7	420.1	1,484.8	614.5	285.2	321.0	1,220.7

1 Revenues include prices both inclusive and exclusive freight costs. The price information is also affected by changes of the exchange rates and the respective product mix and is therefore to be understood as providing a rough indication only.

connected with the transition to SAP and the planned sale of a transport and supply ship as part of the transition to a more cost-effective third-party operation. Catching-up effects related to maintenance activities also had a negative effect. At € 9.2 million for the quarter under review, operating earnings were up € 4.3 million on a year ago. This increase is particularly attributable to the significantly higher revenues in the European de-icing salt business compared with the same quarter a year ago. In addition, enhancements in efficiency at K+S Chile S.A. (previously: SPL) had a positive impact on earnings. Operating earnings EBIT I include depreciation and amortisation of € 27.8 million (Q3/12: € 30.0 million).

Complementary Activities

Revenues

For the first nine months, the Complementary Activities achieved revenues involving third parties of € 119.7 million (9M/12: € 113.6 million), while total revenues came to € 146.3 million (9M/12: € 141.5 million). In the third quarter, revenues generated by Complementary Activities involving third parties amounted to € 39.6 million compared with € 36.4 million a year ago. Including intersegment revenues, total revenues amounted to € 47.8 million, compared with € 46.5 million for the same quarter a year ago. / Tab: 1.5.7, 1.5.8 / FIG: 1.5.5, 1.5.6

Third quarter revenues for the animal hygiene products segment fell slightly from € 9.6 million to € 9.5 million. Those of the trading business for the period under review increased by € 0.4 million to € 4.4 million. The waste management and recycling segment increased its revenues by € 0.6 million to € 22.5 million due to volume, price and structural factors. As a result of contractual changes for certain business transactions resulting in their treatment as internal revenues, the revenues generated by K+S Transport GmbH rose by € 2.3 million to € 3.2 million.

Development of earnings

Operating earnings EBIT I in the first three quarters of 2013 fell by about 6 % to € 18.3 million (9M/12: € 19.5 million); this figure includes depreciation and amortisation of € 5.2 million (9M/12: € 4.9 million). At € 5.3 million, operating earnings EBIT I for the quarter under review

V ariance analysis	TAB: 1.5.7
	Q3/13	9M/13
in %
Change in revenues	+ 8.8	+ 5.4
volume/structure	+ 7.1	+ 3.0
prices/price-related	+ 1.6	+ 2.4
exchange rates	—	—
consolidation	—	—
Waste Management and Recycling	+ 2.7	+ 2.3
K+S Transport GmbH	> 100	+ 11.1
Animal hygiene products	(0.7)	+ 6.0
CFK Trading	+ 10.0	+ 17.4

C omplementary Activities						TAB: 1.5.8
	Q3/13	Q3/12	%	9M/13	9M/12	%
in € million
Revenues	39.6	36.4	+ 8.8	119.7	113.6	+ 5.4
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	6.9	7.7	(10.4)	23.5	24.4	(3.7)
Operating earnings (EBIT I)	5.3	6.0	(11.7)	18.3	19.5	(6.2)
Capital expenditure	0.8	1.1	(27.3)	1.6	3.1	(48.4)
Employees as of 30 September (number)	—	—	—	293	290	+ 1.1

were down just under 12 % on the figure of a year ago (Q3/12: € 6.0 million). Operating earnings EBIT I include depreciation and amortisation of € 1.6 million (Q3/12: € 1.7 million). While the CFK (trading), animal hygiene products as well as waste management and recycling segments were able to achieve higher contributions to earnings as a result of volume factors, the K+S Transport GmbH segment posted an earnings decrease.

Revenues by Segment January – September 2013 FIG: 1.5.5

	9M/13	9M/12
in %
1 Waste Management and Recycling	56.6	58.3
2 K+S Transport GmbH	8.3	7.9
3 Animal hygiene products	23.8	23.7
4 CFK Trading	11.3	10.1

R evenues by Region January – September 2013			FIG: 1.5.6
3		9M/13	9M/12
	in %
2	1 Germany	82.3	81.7
1	2 Rest of Europe	17.3	18.0
	3 Asia	0.4	0.3

1.6 Employees

Number of employees stable

As of 30 September 2013, the K+S Group employed a total of 14,473 people. Compared with 30 September 2012 (14,352 employees), the number thus remained almost stable. While there was an increase in the number of employees in the Potash and Magnesium Products business unit in order to maintain the volume of crude salt extracted, for intensified activities in the area of environmental protection as well as for the Legacy Project and in K+S Aktiengesellschaft, there were fewer employees in the Salt business unit. The average number of people employed over the quarter was 14,342 (Q3/12: 14,300). As a result of the greater internationalisation of the K+S Group since 2006, just under a third of the employees are now located outside Germany and more than a quarter outside Europe. On 30 September 2013, the number of trainees in Germany was 602 and thus on about the high level of a year ago (30 September 2012: 610). / FIG: 1.6.1

For a comprehensive presentation of the risk and oppor-

tunity management system as well as possible risks, reference is made to the corresponding comments in our Financial Report 2012 on page 113. The risks described there remain largely unchanged as of 30 September 2013.

The risks to which the K+S Group is exposed, both in isolation or in interaction with other risks, are limited and do not, according to current estimates, jeopardise the continued existence of the Company.

Personnel expenses

At € 716.0 million, personnel expenses related to continued operations for the first nine months fell slightly (9M/12: € 735.5 million). In the third quarter, personnel expenses for continued operations amounted to € 226.0 million and were therefore down moderately on the level of the same quarter a year ago (Q3/12: € 242.2 million) as a result of a lower accruals amount for performance-related remuneration.

1.7 Research and development

Research costs for continued operations came to € 3.9 million for the quarter under review (Q3/12: € 3.5 million). Capitalised development-related capital expenditure for the third quarter amounted to about € 1.1 million and was therefore significantly down, although it is still at a higher level than in previous years. The figure for the same quarter a year ago (Q3/12: € 8.5 million) was determined by strong one-time effects from the Legacy Project. In the first nine months of 2013, research costs decreased to € 10.6 million (9M/12: € 17.2 million) and capitalised development-related capital expenditure to € 3.4 million compared with a year ago (9M/12: € 8.5 million). The R&D projects planned for 2013 and described in the Financial Report 2012 on page 134 are being continued according to schedule. As of 30 September 2013, there were 87 employees working in the area of research and development at the K+S Group, which means that their number was higher than a year ago as intended (30 September 2012: 81).

/ For a comprehensive description of the research and development activities, please see the relevant passages in our Financial Report 2012 on pages 81 and 134.

1.9 Opportunity report

For a comprehensive presentation of possible opportunities, please refer to the relevant passages in our Financial Report 2012 on page 143. There is no offsetting of opportunities and risks or their positive and negative changes.

1.10 Subsequent events

On 1 October 2013, three miners tragically lost their lives as a result of an outburst of carbon dioxide triggered by extraction blasting at the Unterbreizbach mine. In the meantime, the crude salt extraction could again be resumed. Initially, however, the extraction is limited to a part of the underground area. There are no plans for other plants to compensate for the production shortfall.

Apart from this, the K+S Group has experienced no significant changes in the economic environment or in the situation of our industry and no events of material importance require disclosure.

1.11 Forecast report

Future Group direction

Business policy

We do not intend to introduce any fundamental change in our business policy over the coming years. We want to expand our market positions in our business units, especially by increasing sales of speciality products, to enhance our efficiency also by exploiting cost potentials and synergies, to press ahead with the expansion of new potash capacities with the Legacy Project in Canada and to grow organically and externally in the Potash and Magnesium Products as well as Salt business units.

Future sales markets

/ A presentation of the future sales markets can be found in the Financial Report 2012 on pages 132 and 137.

Future macroeconomic situation

The following discussion about the future macroeconomic situation is largely based on forecasts of the Kiel Institute for the World Economy (Kiel Discussion Papers: Global Economy and German Economy in Autumn 2013, September 2013) and those of Deka Bank (Makro Research, Volkswirtschaft Prognosen, September 2013).

Sentiment indicators with respect to the global economic development have recently improved slightly. However, the Kiel Institute for the World Economy continues to assess the pace of economic recovery as very moderate. Increased economic activity in the industrialised countries on the one hand and the continued muted development of the emerging market countries on the other will cloud growth prospects for the coming years. Overall, against this backdrop, Deka Bank expects global GDP growth of 2.7 % for 2013.

The effects on the course of business of the K+S Group described on page 5 should therefore also persist under the macroeconomic conditions forecast.

Future industry situation

The medium- to long-term trends described in the Financial Report 2012 on pages 137–139, which positively influence the demand for K+S Group products retain their validity.

The prosperity of the emerging market countries should tend to increase further. This should result in higher dietary expectations on the part of their populations. Moreover, the world's population continues to grow. Demand for agricultural products should therefore continue to grow largely independent of the economic situation. In the case of salt products, the impact of the general economic situation on demand is of minor importance, since business in the de-icing salt sector depends on the weather and business with the other salts is largely independent of economic conditions. / Tab: 1.11.1

Percentage change in Gross Domestic Product					TAB: 1.11.1
	2013e	2012	2011	2010	2009
in %; real
Germany	+ 0.4	+ 0.7	+ 3.0	+ 3.7	(4.7)
European Union (EU-28)	(0.1)	(0.3)	+ 1.6	+ 1.9	(4.2)
World	+ 2.7	+ 3.1	+ 3.9	+ 5.1	(0.8)

Source: Deka Bank

Potash and Magnesium Products business unit

Russian Uralkali's exit from the BPC sales organisation operated jointly with Belarusian Belaruskali along with Uralkali's related statement that it wants to expand production and sales created considerable uncertainty about future volume and price developments on the market for potash fertilizers and that continues to be the case. It was and is obvious, that the announcement caused tangible purchasing restraint on the customers' side. From today's perspective, the duration of this phase of uncertainty is difficult to assess reliably.

Salt business unit

Regarding the de-icing salt business, we assume, as usual, multi-year average sales volumes for de-icing salt over the remaining months of the year. Taking into account the de-icing salt business in the first quarter of the year as well as the good early stocking-up business in the second and third quarter, this results in the expectation of significantly higher sales volumes, especially after demand in 2012 was below average as a result of the exceptionally mild weather conditions at the start of the year. In the food grade salt segment, the demand in both Europe and North America should largely remain stable in 2013. South American sales volumes for food grade salt should continue to grow in line with local population trends, but following the normalisation of the salt harvest situation in Brazil, stronger competition can be observed there. While chemical industry demand for salt for chemical use should rise slightly in North America, we expect sales volumes to remain stable in South America and to be slightly lower in Europe. Salt consumption in Asia is continuing to grow at an appreciable rate. After K+S Chile S.A. could make a series of deliveries to the chemical industry in China in 2011 and 2012, this region should continue to gain in importance for us in the future. The consumption of industrial salts should remain stable in all regions.

Future earnings, financial and asset position

The following forecasts relate to the expected organic revenue and earnings development of the K+S Group.

Our assessment for 2013 as a whole is largely based on the following assumptions:

- For 2013 as a whole, average prices in the Potash and Magnesium Products business unit to decrease tangibly year on year (2012: € 329 per tonne)
- Sales volume for potash and magnesium products of about 6.8 million tonnes (2012: 6.95 million tonnes)
- At a good 22 million tonnes, significantly higher sales volumes for crystallised salt (of which de-icing salt accounting for a good 13 million tonnes; 2012: 8.33 million tonnes) compared with the below-average sales volumes for the previous year (2012: 17.56 million tonnes)
- An average exchange rate for the year of 1.33 USD/ EUR (2012: 1.28 USD/EUR) as well as 1.36 CAD/EUR for the Canadian dollar (2012: 1.28 CAD/EUR).

Revenues on the level of a year ago

The revenues of the K+S Group for financial year 2013 should be on the same level as last year (2012: € 3,935 million). While we assume a volume- and price-related revenue decrease in the Potash and Magnesium Products business unit, we expect higher revenues in the Salt business unit as a result of volume factors, which should almost offset the decrease.

Operating earnings lower

The operating earnings EBIT I of the K+S Group for the year as a whole should exceed € 600 million (2012: € 804.1 million).

Group earnings follow EBIT I trend

Adjusted Group earnings after taxes follow the trend in operating earnings and should amount to just under € 400 million for the year as a whole (2012: € 637.4 million).

Future capital expenditure increases as planned because of Legacy

The K+S Group's anticipated volume of capital expenditure for 2013 amounts to about € 800 million. Outlays connected with the Legacy Project should account for € 375 million (about CAD 500 million) of this figure. The remaining increase in the volume of capital expenditure compared with the previous year (2012: € 465.5 million) can be attributed to the implementation of the package of measures on water protection in the Hesse-Thuringia potash district (about € 110 million) and the construction work completed on the saltwater pipeline from the Neuhof site to the Werra plant (about € 30 million). Thus, we expect a total volume of about € 620 million for the Potash and Magnesium Products business unit. Capital expenditure in the Salt business unit should amount to about € 130 million. Just under one half of the Group's volume of capital expenditure is accounted for by measures relating to replacement and ensuring production.

Expected development of liquidity

As a result of the increasing volume of capital expenditure, free cash flow should only be just slightly positive.

Expected financing structure

The K+S Group continues to have a strong financial base, despite rising net indebtedness in view of the upcoming capital expenditure for the expansion of our potash capacities in Canada (Legacy Project).

Future dividend policy

We are pursuing an essentially earnings-based dividend policy. According to this, a dividend payout ratio of between 40 % and 50 % of adjusted Group earnings after taxes (including discontinued operations) forms the basis for the amount of future dividend recommendations to be determined by the Board of Executive Directors and the Supervisory Board. A temporary deviation from our dividend policy cannot be ruled out because of the uncertainty on the market for potash and magnesium products and financing measures that are necessary.

Future number of employees

As for the end of 2013, we expect the number of employees to be more or less constant compared with the previous year (31 December 2012: 14,362). The average number of employees should remain stable this year at about 14,400 (2012: 14,336).

1.12 Guarantee of the Legal Representatives of K+S Aktiengesellschaft

To the best of our knowledge and in accordance with the applicable accounting principles for interim reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim Group Management Report 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.

Kassel, 8 November 2013 K+S Aktiengesellschaft The Board of Executive Directors

Forward-looking statements

This report contains facts and forecasts that relate to the future development of the K+S Group and its companies. The forecasts are estimates that we have made on the basis of all the information available to us at this moment in time. Should the assumptions underlying these forecasts prove not to be correct or should certain risks – such as those referred to in the Risk Report – materialise, actual developments and events may deviate from current expectations. The Company assumes no obligation to update the statements contained in the Management Report, save for the making of such disclosures as are required by the provisions of statute.

FINANCIAL SECTION

2

2.1 Income Statement	24
2.2 Cash Flow Statement	26
2.3 Balance Sheet	28
2.4 Statement of Changes in Equity	29
2.5 Notes	30
2.6 Summary by Quarter	38

Income Statement 1,2						TAB: 2.1.1
	Q3/13	Q3/12	9M/13	9M/12	LTM3/13	12M/12
in € million
Revenues	817.7	916.6	2,972.5	2,993.7	3,914.1	3,935.3
Cost of sales	490.6	521.0	1,671.1	1,634.4	2,195.4	2,158.7
Gross profit	327.1	395.6	1,301.4	1,359.3	1,718.7	1,776.6
Selling expenses	186.3	167.8	610.1	543.5	800.8	734.2
General and administra tive expenses	41.1	47.5	141.8	140.7	197.9	196.8
Research and develop ment costs	3.9	3.5	10.6	17.2	12.8	19.4
Other operating income	42.9	29.6	91.6	103.4	146.1	157.9
Other operating expenses	33.0	41.9	91.2	117.8	125.5	152.1
Income from investments, net	3.1	0.7	6.1	4.1	7.2	5.2
Result from operating forecast hedges	6.1	11.9	0.7	3.4	2.2	4.9
Result after operating hedges (EBIT II)4	114.9	177.1	546.1	651.0	737.2	842.1
Interest income	6.1	5.8	17.7	13.8	24.7	20.8
Interest expenses	27.8	32.6	75.1	80.3	100.4	105.6
Other financial result	0.3	5.1	0.6	5.6	0.9	5.9
Financial result	(21.4)	(21.7)	(56.8)	(60.9)	(74.8)	(78.9)
Earnings before income taxes	93.5	155.4	489.3	590.1	662.4	763.2
Taxes on income	22.5	41.8	128.6	162.0	164.0	197.4
– of which deferred taxes	(15.4)	(7.7)	(40.1)	(31.0)	(42.7)	(33.6)
Earnings after taxes from continued operations	71.0	113.6	360.7	428.1	498.4	565.8
Earnings after taxes from discontinued operations	—	66.4	—	101.0	(1.0)	100.0
Net income	71.0	180.0	360.7	529.1	497.4	665.8

	Q3/13	Q3/12	9M/13	9M/12	LTM3/13	12M/12
in € million
Minority interests in earnings	0.1	0.2	0.3	0.5	0.3	0.5
Group earnings after taxes and minority interests	70.9	179.8	360.4	528.6	497.1	665.3
– thereof continued operations	70.9	113.4	360.4	427.6	498.1	565.3
– thereof discontinued operations	—	66.4	—	101.0	(1.0)	100.0
Earnings per share in € (undiluted ^= diluted)	0.37	0.94	1.88	2.76	2.59	3.47
– thereof continued operations	0.37	0.60	1.88	2.24	2.60	2.95
– thereof discontinued operations	—	0.35	—	0.53	(0.01)	0.52
Average number of shares in million	191.40	191.40	191.40	191.40	191.40	191.40
Operating earnings (EBIT I) 4	115.8	155.7	556.3	622.1	738.3	804.1
Earnings before income taxes from continued operations, adjusted5	94.4	134.0	499.5	561.2	663.5	725.2
Group earnings from contin ued operations, adjusted5	71.6	98.1	367.7	406.9	498.7	538.1
Earnings per share from continued operations in €, adjusted5	0.37	0.52	1.92	2.13	2.60	2.81
Group earnings after taxes, adjusted5,6	71.6	164.5	367.7	507.2	497.7	637.4
Earnings per share in €, adjusted5,6	0.37	0.86	1.92	2.65	2.60	3.33

(continued)

1 The income statement of 2012 was adjusted according to IFRS following the divestment of the nitrogen business. Detailed information on the discontinued operations can be found in the Notes on page 32.

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30. 3 LTM = last twelve months (Q4/12 + Q1/13 + Q2/13+ Q3/13).

4 Management of the K+S Group is handled, amongst others, on the basis of operating earnings (EBIT I). Reconciliation of EBIT II to operating earnings (EBIT I) is recorded in table 2.1.3.

5 The adjusted key figures only include the result from operating forecast hedges of the respective reporting period reported in EBIT I, which eliminates effects from changes in the market value of the hedges as well as effects from the exchange rate hedging of future capital expenditure in Canadian dollar (Legacy Project). Related effects on deferred and cash taxes are also eliminated; tax rate for Q3/13: 28.5%

(Q3/12: 28.5%). 6 Earnings from continued and discontinued operations.

Income Statement 1,2 TAB: 2.1.1

Statement of comprehensive income 1 TAB: 2.1.2
	Q3/13	Q3/12	9M/13	9M/12	LTM2/13	12M/12
in € million
Net income	71.0	180.0	360.7	529.1	497.4	665.8
Financial assets available for sale	(0.2)	—	(0.2)	1.8	2.8	3.0
Difference resulting from foreign currency translation	(63.9)	(31.6)	(87.4)	32.9	(149.1)	(28.8)
Items that may be reclassified subsequently to profit or loss	(64.1)	(29.8)	(87.6)	34.7	(148.1)	(25.8)
Actuarial gains/losses	7.4	(16.7)	35.6	(33.7)	37.0	(32.3)
Items that will not be reclassified to profit or loss	7.4	(16.7)	35.6	(33.7)	37.0	(32.3)
Other comprehensive income after taxes	(56.7)	(46.5)	(52.0)	1.0	(111.1)	(58.1)
Comprehensive income of the period	14.3	133.5	308.7	530.1	386.3	607.7
Minority interests in comprehensive income	0.1	0.2	0.3	0.5	0.3	0.5
Group comprehensive income after taxes and minority interests	14.2	133.3	308.4	529.6	386.0	607.2

O perating earnings (EBIT I) 1,4 TAB: 2.1.3
	Q3/13	Q3/12	9M/13	9M/12	LTM2/13	12M/12
in € million
Result after operating hedges (EBIT II)	114.9	177.1	546.1	651.0	737.2	842.1
Income (−)/expenses (+) from market value changes of operating forecast hedges still outstanding	(7.5)	(15.2)	(3.0)	(4.2)	(8.3)	(9.5)
Neutralising of market value changes of realised operating forecast hedges, recognised in earlier periods	5.9	(6.2)	10.4	(24.7)	6.6	(28.5)
Realised income (−)/expenses (+) of currency hedging for capital expenditure in Canada	2.5	—	2.8	—	2.8	—
Operating earnings (EBIT I)3	115.8	155.7	556.3	622.1	738.3	804.1

1 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30. 2 LTM = last twelve months (Q4/12 + Q1/13 + Q2/13 + Q3/13).

3 Management of the K+S Group is handled, amongst others, on the basis of operating earnings (EBIT I).

4 Information on operating earnings refers to continued operations.

in inventories (39.3) (9.7) 49.7 (4.6) 11.5 (42.8)

Cash Flow Statement 1,2 TAB: 2.2.1 Q3/13 Q3/12 9M/13 9M/12 LTM3/13 12M/12 in € million Result after operating hedges (EBIT II) 114.9 177.1 546.1 651.0 737.2 842.1 Income (−)/expenses (+) from market value changes of operating forecast hedges still outstanding (7.5) (15.2) (3.0) (4.2) (8.3) (9.5) Neutralisation of market value changes of realised operating forecast hedges, recognised in earlier periods 5.9 (6.2) 10.4 (24.7) 6.6 (28.5) Realised income (−)/ expenses (+) of currency hedging for capital expenditure in Canada 2.5 — 2.8 — 2.8 — Operating earnings (EBIT I) 115.8 155.7 556.3 622.1 738.3 804.1 Depreciation (+)/write-ups (−) on intangible assets, property, plant and equipment and financial assets 59.8 57.1 182.5 168.5 243.0 229.0 Increase (+)/decrease (−) in non-current provisions (without interest rate effects) (10.4) 10.8 (18.3) 2.5 (17.4) 3.4 Interests and dividends received and similar income 2.8 6.9 16.9 13.5 25.0 21.6 Gains (+)/losses (−) from the realisation of financial assets and liabilities (1.7) (1.5) (0.4) 0.8 (1.9) (0.7) Interest paid (−) (42.1) (38.5) (58.9) (41.8) (60.1) (43.0) Income taxes paid (−) (48.9) (45.3) (185.5) (140.9) (246.7) (202.1) Other non-cash expenses (+)/ income (−) 0.9 3.2 (1.7) 0.4 (1.4) 0.7 Gross cash flow from continued operations 76.2 148.4 490.9 625.1 678.8 813.0 Gross cash flow from discontinued operations — (11.6) — 29.1 0.8 29.9 Gross cash flow 76.2 136.8 490.9 654.2 679.6 842.9 Gain (−)/loss (+) on the disposal of fixed assets and securities 0.3 (5.0) (1.8) (5.5) 1.7 (2.0) Increase (−)/decrease (+) Cash Flow Statement 1,2 TAB: 2.2.1 Q3/13 Q3/12 9M/13 9M/12 LTM3/13 12M/12 in € million Increase (−)/decrease (+) in receivables and other assets from operating activities 10.6 (0.6) 150.3 (53.6) 117.2 (86.7) Increase (+)/decrease (−) in liabilities from operating activities 3.4 (19.3) (48.7) (141.7) 9.9 (83.1) Increase (+)/decrease (−) in current provisions 26.1 25.5 (9.0) (25.8) (11.5) (28.3) Out-financing of plan assets (3.8) (3.2) (13.8) (10.1) (47.1) (43.4) Cash flow from operating activities 73.5 124.5 617.6 412.9 761.3 556.6 – thereof continued operations 73.5 136.1 617.6 464.9 759.9 607.2 – thereof discontinued operations — (11.6) — (52.0) 1.4 (50.6) Proceeds from disposals of fixed assets 0.9 9.4 5.6 15.1 11.8 21.3 Disbursements for intangible assets (2.9) (10.2) (6.7) (14.3) (16.8) (24.4) Disbursements for property, plant and equipment (182.4) (92.4) (456.8) (218.8) (637.0) (399.0) Disbursements for financial assets — (0.3) (0.1) (0.3) (1.0) (1.2) Proceeds from the disposal of consolidated companies — 75.0 — 75.0 — 75.0 Disbursements for the acquisition of consolidated companies — — — (4.2) — (4.2) Proceeds from the disposal of securities and other financial investments 98.4 87.8 342.4 262.4 392.3 312.3 Disbursements for the purchase of securities and other financial investments (56.3) (448.1) (237.2) (826.7) (281.3) (870.8) Cash flow for investing activities (142.3) (378.8) (352.8) (711.8) (532.0) (891.0) – thereof continued operations (142.3) (454.1) (352.8) (787.4) (532.0) (966.6) – thereof discontinued operations — 75.3 — 75.6 — 75.6 (continued)

C ash Flow Statement	(continued) 1,2					TAB: 2.2.1
	Q3/13	Q3/12	9M/13	9M/12	LTM3/13	12M/12
in € million							in € million
Free cash flow	(68.8)	(254.3)	264.8	(298.9)	229.3	(334.4)	Change in cash and
– thereof continued operations	(68.8)	(318.0)	264.8	(322.5)	227.9	(359.4)
– thereof discontinued operations	—	63.7	—	23.6	1.4	25.0	Net cash and cash
Dividends paid	—	—	(268.0)	(248.8)			Net cash and cash equivalents
Disbursements for the acquisition of non controlling interests	—	—	—	—			– thereof cash on hand and
Payments from other allocations to equity	—	—	4.1	5.1			– thereof cash invested
Purchase of own shares	—	—	(5.1)	(6.5)
Sale of own shares	—	—	—	—			– thereof cash received
Increase (+)/decrease (−) in liabilities from finance lease	(0.4)	(0.6)	(1.3)	(1.5)			– thereof net cash and
Taking out (+)/repay ment of (−) loans	(0.5)	(2.9)	(1.0)	(1.6)			cash equivalents from
Incoming payments (+)/ repayments (−) from the issuing of bonds	—	—	—	497.1
Cash flow from/for financing activities	(0.9)	(3.5)	(271.3)	243.8			be found in the Notes on page 30. 3 LTM = last twelve months (Q4/12 + Q1/13 + Q2/13 + Q3/13).
– thereof continued operations	(0.9)	(3.5)	(271.3)	243.8
– thereof discontinued operations	—	—	—	—
Change in cash and cash equivalents affecting cash flow	(69.7)	(257.8)	(6.5)	(55.1)
– thereof continued operations	(69.7)	(321.5)	(6.5)	(78.7)
– thereof discontinued operations	—	63.7	—	23.6
Change in cash and cash equivalents resulting from exchange rates	(1.9)	(1.9)	(5.2)	2.8
Change in cash and cash equivalents resulting from consolidation	—	—	0.7	—

Cash Flow Statement 1,2 TAB: 2.2.1

	Q3/13	Q3/12	9M/13	9M/12
in € million
Change in cash and cash equivalents	(71.6)	(259.7)	(11.0)	(52.3)
Net cash and cash equivalents as of 1 January	—	—	345.0	437.3
Net cash and cash equivalents as of 30 September	—	—	334.0	385.0
– thereof cash on hand and balances with banks	—	—	340.8	392.7
– thereof cash invested with affiliated companies	—	—	0.1	0.1
– thereof account overdrafts	—	—	—	(1.1)
– thereof cash received from affiliated companies	—	—	(6.9)	(6.7)
– thereof net cash and cash equivalents from discontinued operations	—	—	—	—

1 The cash flow statement was adjusted according to IFRS following the divestment of the nitrogen

business. Detailed information on the discontinued operations can be found in the Notes on page 32.

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.

Balance Sheet – Assets 1 TAB: 2.3.1

Balance Sheet – equity and liabilities 1 TAB: 2.3.1

	30.9.2013	30.9.20122	31.12.20122
in € million
Intangible assets	960.4	1,019.3	1,000.8
– of which goodwill from acquisitions	623.2	657.8	642.3
Property, plant and equipment	2,785.6	2,335.9	2,527.4
Investment properties	7.6	7.7	7.6
Financial assets	14.3	15.8	15.9
Receivables and other assets	41.6	42.5	48.1
Securities and other financial investments	229.2	484.9	499.5
Deferred taxes	79.7	70.5	49.1
Reimbursement claims of income taxes	0.1	0.1	0.1
Non-current assets	4,118.5	3,976.7	4,148.5
Inventories	626.8	660.0	687.9
Accounts receivable – trade	599.5	732.0	770.3
Other receivables and assets	166.8	174.5	166.3
Reimbursement claims of income taxes	38.3	21.7	36.8
Securities and other financial investments	600.1	459.9	435.0
Cash on hand and balances with banks	340.8	392.7	351.8
Assets classified as held for sale	—	—	—
Current assets	2,372.3	2,440.8	2,448.1
ASSETS	6,490.8	6,417.5	6,596.6

1 Information refers to the continued operations of the K+S Group. Due to the divestment of the nitrogen business, these are in accordance with IFRS disclosed as "discontinued operations". The balance sheet as of 30 September 2012 was not adjusted and also includes the discontinued operations of the nitrogen business.

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.

	30.9.2013	30.9.20122	31.12.20122
in € million
Subscribed capital	191.4	191.4	191.4
Additional paid-in capital	645.9	646.0	647.2
Other reserves and accumulated profit	2,591.5	2,473.9	2,551.7
Minority interests	3.9	3.6	3.6
Equity	3,432.7	3,314.9	3,393.9
Bank loans and overdrafts	516.3	1,264.9	1,264.9
Other liabilities	15.6	16.7	17.8
Provisions for pensions and similar obligations	104.3	191.0	160.1
Provisions for mining obligations	720.3	648.5	706.6
Other provisions	109.1	136.4	131.2
Deferred taxes	267.2	307.8	274.7
Non-current debt	1,732.8	2,565.3	2,555.3
Bank loans and overdrafts	749.5	2.6	0.9
Accounts payable – trade	228.8	192.9	289.2
Other liabilities	67.8	57.3	70.6
Income tax liabilities	32.0	56.1	50.1
Provisions	247.2	228.4	236.6
Liabilities directly associated with assets classified as held for sale	—	—	—
Current debt	1,325.3	537.3	647.4
EQUITY AND LIABILITIES	6,490.8	6,417.5	6,596.6

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.

Statement of Changes in Equity 1,2 TAB: 2.4.1

	Subscribed capital	Additional paid-in capital	Accumulated profit /Revenue reserves	Differences from foreign currency translation	Financial assets available for sale	Changes in equity without recognition in profit or loss regarding actuarial gains/losses	Total K+S AG shareholders' equity	Minority interests	Equity
in € million
Balances as of 1 January 2013	191.4	647.2	2,461.1	172.3	2.9	(84.6)	3,390.3	3.6	3,393.9
Net income	—	—	360.4	—	—	—	360.4	0.3	360.7
Other comprehensive income after taxes	—	—	—	(87.4)	(0.2)	35.6	(52.0)	—	(52.0)
Comprehensive income of the period	—	—	360.4	(87.4)	—	35.6	308.4	0.3	308.7
Dividend for the previous year	—	—	(268.0)	—	—	—	(268.0)	—	(268.0)
Issuance of shares to employees	—	(1.3)	—	—	—	—	(1.3)	—	(1.3)
Other changes in equity	—	—	(0.6)	—	—	—	(0.6)	—	(0.6)
Balances as of 30 September 2013	191.4	645.9	2,552.9	84.9	2.7	(49.0)	3,428.8	3.9	3,432.7
Balances as of 1 January 2012	191.4	648.1	2,044.5	201.1	(0.1)	(52.3)	3,032.7	3.1	3,035.8
Net income	—	—	528.6	—	—	—	528.6	0.5	529.1
Other comprehensive income after taxes	—	—	—	32.9	1.8	(33.7)	1.0	—	1.0
Comprehensive income of the period	—	—	528.6	32.9	—	(33.7)	529.6	0.5	530.1
Dividend for the previous year	—	—	(248.8)	—	—	—	(248.8)	—	(248.8)
Issuance of shares to employees	—	(2.1)	—	—	—	—	(2.1)	—	(2.1)
Other changes in equity	—	—	(0.1)	—	—	—	(0.1)	—	(0.1)
Balances as of 30 September 2012	191.4	646.0	2,324.2	234.0	1.7	(86.0)	3,311.3	3.6	3,314.9

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.

2.5 Notes

Explanatory Notes

The interim report of 30 September 2013 is prepared in accordance with the International Financial Reporting Standards (IFRS) as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), insofar as those have been recognised by the European Union. The report is prepared as abridged financial statements with selected explanatory notes as stipulated by IAS 34. Apart from the exceptions described below, the accounting and valuation principles used for this interim report correspond to those used for the consolidated financial statements 2012.

IAS 19 "Employee Benefits", which was approved by the IASB in June 2011 and endorsed by the EU in June 2012, is to be applied for the first time to financial years beginning on or after 1 January 2013. The changes are to be implemented with retroactive effect to the beginning of the comparative period, i.e. as of 1 January 2012. This essentially means the following for K+S:

- Abolition of the corridor method: As a result, actuarial gains and losses are to be recorded in other earnings (equity) and have a direct impact on the consolidated balance sheet. It is no longer necessary to amortise actuarial gains and losses with recognition in profit or loss when the corridor is exceeded. The income statement will thus in future remain free of effects from actuarial gains and losses. The abolition of the corridor method as of 1 January 2012 resulted in a decrease in equity of € 52.3 million, a reduction in other non-current assets and an increase in provisions for pensions and similar obligations by a total of € 70.0 million as well as an increase in deferred tax assets and a decrease of deferred tax liabilities by a total of € 17.7 million.
- Computing planned interest on plan assets: This is no longer based on the anticipated yield but corresponds to the discount rate applied to determine the defined benefit obligation.
- Revised definition of termination benefits: Under the revised definition, step-up contributions for partial retirement obligations are now treated as other non-current employee benefits which are to be accrued on a pro-rata basis over the period of vesting. After stepup contributions were recognised as liabilities in the full amount of their present value, a provision in the amount of € 4.7 million was reversed as of 1 January 2012 which will again be recognised in profit or loss in subsequent periods. Conversely, as of 1 January 2012, equity rose by € 3.5 million (after taxes).

Taking into account tax effects, the following changes occurred with respect to the reporting periods in question:

C	hanges IAS 19 – Balance Sheet TAB: 2.5.1
	30.9.2012 (old)	30.9.2012 (change)	30.9.2012 (new)	31.12.2012 (old)	31.12.2012 (change)	31.12.2012 (new)
in € million
Receivables and other assets	61.7	(19.2)	42.5	91.3	(43.2)	48.1
Deferred taxes	69.7	0.8	70.5	48.3	0.8	49.1
Non-current assets	3,995.1	(18.4)	3,976.7	4,190.9	(42.4)	4,148.5
Current assets	2,440.8	—	2,440.8	2,448.1	—	2,448.1
ASSETS	6,435.9	(18.4)	6,417.5	6,639.0	(42.4)	6,596.6

Equity	3,399.3	(84.4)	3,314.9	3,477.3	(83.4)	3,393.9
Provisions for pensions and similar obligations	95.5	95.5	191.0	88.8	71.3	160.1
Other provisions	137.9	(1.5)	136.4	131.5	(0.3)	131.2
Deferred taxes	335.8	(28.0)	307.8	304.7	(30.0)	274.7
Non-current debt	2,499.3	66.0	2,565.3	2,514.3	41.0	2,555.3
Current debt	537.3	—	537.3	647.4	—	647.4
EQUITY AND LIABILITIES	6,435.9	(18.4)	6,417.5	6,639.0	(42.4)	6,596.6

C hanges IAS 19 –
Income statement and statement of comprehensive income						TAB: 2.5.2
	9M/12 (old)	9M/12 (change)	9M/12 (new)	2012 (old)	2012 (change)	2012 (new)
in € million
Other operating expenses	(114.6)	(3.2)	(117.8)	(147.7)	(4.4)	(152.1)
Result after operating hedges (EBIT II)	654.2	(3.2)	651.0	846.5	(4.4)	842.1
Interest income	14.1	(0.3)	13.8	21.2	(0.4)	20.8
Interest expenses	(80.7)	0.4	(80.3)	(106.7)	1.1	(105.6)
Earnings before income taxes	593.2	(3.1)	590.1	766.9	(3.7)	763.2
Taxes on income	(162.8)	0.8	(162.0)	(198.4)	1.0	(197.4)
Earnings after taxes from continued operations	430.4	(2.3)	428.1	568.5	(2.7)	565.8
Earnings after taxes from discontinued operations	100.6	0.4	101.0	99.6	0.4	100.0
Net income	531.0	(1.9)	529.1	668.1	(2.3)	665.8
Operating earnings (EBIT I)	625.3	(3.2)	622.1	808.5	(4.4)	804.1
Other comprehensive income after taxes	34.7	(33.7)	1.0	(25.8)	(32.3)	(58.1)
Comprehensive income of the period	565.7	(35.6)	530.1	642.3	(34.6)	607.7

In the cash flow statement, the changes in the base values for EBIT II and for EBIT I (9M/2012: € (3.2) million; 2012: € (4.4) million) are neutralised by countervailing changes in the item "Increase/decrease in non-current provisions". The other items in the cash flow statement remain unchanged.

As a result of the changes in IAS 19, undiluted and diluted earnings per share fell by € 0.01 for the first nine months of 2012 and by € 0.02 for 2012 as a whole.

If the old version of IAS 19 had continued to be applied in 2013, this would have resulted in the following changes for the first nine months of 2013:

- Increase in net income of € 1.8 million
- Increase in other non-current assets and decrease in provisions for pensions and similar obligations by a total of € 71.3 million
- Increase in cumulative other earnings of € 49.0 million
- Decrease in deferred tax assets and increase in deferred tax liabilities by a total of € 20.5 million
- Increase in the undiluted and diluted earnings per share of € 0.01

In May 2011, IFRS 13 was approved by the IASB and endorsed by the EU in December 2012. IFRS 13 "Fair value measurement" is to be applied prospectively for the first time for financial years starting on or after 1 January 2013. The application of the standard will involve additional disclosure obligations of information on financial instruments during the course of the year which until now only had to be reported in the annual financial statements.

With the changes to IAS 1 "Presentation of Financial Statements", a separation of the elements of other earnings in the statement of comprehensive income occurs. Items which may subsequently be reclassified in profit or loss, and items which will not be reclassified in profit or loss, must be recorded separately. The standard, which was approved by the IASB in June 2012, is to be applied for the first time for financial years beginning on or after 1 July 2012.

Foreign currency assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Income and expenses are translated applying the average exchange rates for the quarter.

Changes in the legal Group and organisational structure

Dr. Andreas Radmacher assumed his position as member of the Board of Executive Directors of K+S Aktiengesellschaft with effect from 1 September 2013. He is responsible for the Potash and Magnesium Products business unit. Apart from this, there were no changes in the third quarter in the composition and responsibilities of the Board of Executive Directors and the Supervisory Board as described in the Financial Report 2012.

Auditor's review

The interim financial statements and the interim management report were not reviewed by the auditor (Section 37w, Para. 5, Sent. 1 of the German Securities Trading Act).

Changes in the scope of consolidation

In the third quarter, no material changes occurred in the scope of consolidation.

2.5 Notes

Discontinued operations

The strategy of the K+S Group provides for growth in the Potash and Magnesium Products and Salt business units in particular and for focussing management resources and financial means on this correspondingly.

Against this background, in the past year, K+S sold the business activities of K+S Nitrogen to EuroChem (detailed information can be found on page 168 of the K+S Group Financial Report 2012).

All previous year's figures for the income and expenses of K+S Nitrogen, classified as a discontinued operation, were reclassified and disclosed in a separate item "Earnings after taxes from a discontinued operation".

The previous year's cash flows from discontinued operations are shown separately in the cash flow statement in accordance with IFRS 5.

The composition of the previous year's earnings after taxes from discontinued operations is as presented in the following table:

discontinued operations		TAB: 2.5.3
	9M/13	9M/12
in € million
Revenues	—	654.4
Other income and expenses	—	(606.6)
EBIT II	—	47.8
Financial result	—	0.1
Earnings before taxes	—	47.9
Taxes on income	—	13.3
Earnings after income taxes for the period	—	34.6

Gain from the divestment (before income taxes)	—	77.9
Taxes on income	—	11.5
Gain from the divestment (after income taxes)	—	66.4

Earnings after taxes from discontinued operations	—	101.0

Acquisition SMO

esco – European Salt Company GmbH & Co. KG, a 100 % subsidiary of K+S Aktiengesellschaft, acquired through its subsidiary esco International GmbH 100 % of the voting rights in the Czech salt processing company, Solné MlÝny, a.s. (SMO), as of 3 January 2012.

SMO is a major supplier of salt products in the Czech Republic and is also active in other neighbouring European markets. The purchase price was € 4.4 million.

Comprehensive information regarding the acquisition of SMO can be found in the Financial Report 2012 on page 173.

The fair values of assets acquired and liabilities assumed from SMO, recognised at the time of acquisition (3 January 2012), are presented in the following table:

Fair values as of the date of acquisition

6.1
1.9
1.9
9.9

0.8
1.2
1.2
3.2

6.7
2.3
4.4

From the comparison of the cost of the acquisition and the revalued proportional net assets results a bargain purchase of € 2.3 million, which was reversed through profit or loss as other operating income in 2012.

Seasonal factors

There are seasonal differences over the course of the year that affect the sales volumes of fertilizers and salt products. In the case of fertilizers, we generally attain our highest sales volumes in the first half of the year because of the spring fertilization in Europe. Sales volumes of salt products – especially of de-icing salt – largely depend on the respective wintry weather during the first and fourth quarters. In the aggregate, both these effects mean that revenues and particularly earnings are generally strongest during the first half of the year.

Important key figures (ltm1)		TAB: 2.5.5
	LTM 20131	2012
in € million
Revenues	3,914.1	3,935.3
EBITDA	981.7	1,033.3
EBIT I	738.3	804.1
Group earnings from continued operations, adjusted	498.9	538.1

translated into euros at spot rates. This can result in currency-related fluctuations in the equity of the K+S Group. Translation effects from the conversion of US dollars mainly appear in the Salt business unit.

Within the framework of transaction hedging, options and futures are utilised to hedge the worst case, but at the same time the opportunity is created for part of the hedging transactions to participate in a more favourable exchange rate development. Translation risks are not hedged.

F oreign Currency Hedging P otash and Magnesium Products business unit TAB: 2.5.6
	Q1/12	Q2/12	Q3/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	2013e
USD/EUR exchange rate after premiums	1.34	1.31	1.30	1.35	1.32	1.31	1.28	1.29	1.29
Average USD/ EUR spot rate	1.31	1.28	1.25	1.30	1.28	1.32	1.31	1.32	—

1 LTM = last twelve months (Q4/12 + Q1/13 + Q2/13 + Q3/13).

Information concerning material events since the end of the interim reporting period

You will find such information in our Subsequent Events section on page 19.

Foreign currency hedging

Exchange rate fluctuations can lead to the value of the service performed not matching the value of the consideration, because income and expenditure arise at different times in different currencies (transaction risks). Exchange rate fluctuations, especially in relation to the US dollar, play a particular role for the Potash and Magnesium Products business unit, in relation to the levels of its proceeds and receivables. Furthermore, currency effects arise at subsidiaries whose functional currency is not the euro (translation risks): On the one hand, the earnings of these companies determined in a foreign currency are translated into euros at average rates and recognised in profit or loss, and on the other hand, their net assets are For the construction of the new potash plant in Canada (Legacy Project), during the primary investment phase, payments will be made in the Canadian dollar (CAD) and the US dollar (USD). The Canadian dollar investment is partly aided by a natural hedge arising from surpluses in the salt business in Canada. Futures or options will also be used to hedge the remaining CAD net position. The US dollar investments are included in the USD net position of the Potash and Magnesium Products business unit; during the investment phase, this leads to a reduction of the total US dollar volume requiring hedging. In the subsequent operating phase, the hedge volume will increase given the anticipated additional USD revenues.

Other operating Income/Expenses

The following significant items are included in other operating income and expenses:

O ther operating income/expenses TAB: 2.5.7
	Q3/13	Q3/12	9M/13	9M/12
in € million
Gains/losses on foreign exchange rates	(3.0)	(7.1)	(4.5)	(3.3)
Change in provisions	12.6	5.8	24.2	10.8
Other	0.3	(11.0)	(19.3)	(21.9)
Other operating income/expenses	9.9	(12.3)	0.4	(14.4)

Financial Result

The financial result includes the following significant items:

Fi nancial result				TAB: 2.5.8
	Q3/13	Q3/12	9M/13	9M/12
in € million
Interest income	6.1	5.8	17.7	13.8
Interest expenses	27.8	32.6	75.1	80.3
– of which interest expenses for pension provisions	1.4	1.8	4.3	4.9
– of which interest expenses for provisions for mining obligations	7.0	13.9	20.9	33.2
Interest income, net	(21.7)	(26.8)	(57.4)	(66.5)
Income from the realisation of financial assets/liabilities	0.8	(1.5)	2.4	0.8
Income from the valuation of financial assets/liabilities	(0.5)	6.6	(1.8)	4.8
Other financial result	0.3	5.1	0.6	5.6
Financial result	(21.4)	(21.7)	(56.8)	(60.9)

Discount factors for provisions

The actuarial measurement of pension provisions is performed by applying the projected unit credit method in accordance with IAS 19. The average weighted discount factor for pensions and similar obligations as of 30 September 2013 was 4.2 % (30.9.2012: 3.8 %, 31.12.2012: 3.8 %). The average weighted discount factor for mining obligations as of 30 September 2013 was the same as of 31 December 2012 and amounted to 4.3 % (30.9.2012: 4.3 %).

Taxes on income

The following key items are included in taxes on income:

T axes on income				TAB: 2.5.9
	Q3/13	Q3/12	9M/13	9M/12
in € million
Corporate income tax	17.9	20.1	82.4	86.1
Trade tax on income	15.0	20.4	68.7	73.1
Foreign taxes on income	5.0	9.0	17.6	33.8
Deferred taxes	(15.4)	(7.7)	(40.1)	(31.0)
Taxes on income	22.5	41.8	128.6	162.0

Non-cash deferred taxes result from tax loss carryforwards as well as from other temporary tax-related measurement differences.

Financial instruments

The following table shows the carrying amounts and fair values of Group financial instruments:

C arrying amounts and fair values of financial instruments					TAB: 2.5.10
	Measurement		30.9.2013	31.12.2012
	category under IAS 39	Carrying amount	Fair value	Carrying amount	Fair value
in € million
Investments in affiliated com panies and equity interests	Available for sale	13.5	13.5	14.9	14.9
Loans	Loans and receivables	0.8	0.8	1.0	1.0
Financial assets		14.3	14.3	15.9	15.9
Accounts receivable – trade	Loans and receivables	599.5	599.5	770.3	770.3
Remaining receivables and non-derivative financial assets	Loans and receivables	91.2	91.2	102.0	102.0
Derivatives	Held for trade	21.7	21.7	28.7	28.7
Other assets	not IFRS 7	95.5	95.5	83.7	83.7
Other receivables and assets		208.4	208.4	214.4	214.4
Securities and other financial investments	Loans and receivables	627.3	627.4	715.1	716.2
Securities and other financial investments	Available for sale	202.0	202.0	219.4	219.4
Cash on hand and balances with banks	Loans and receivables	340.8	340.8	351.8	351.8
Financial liabilities	Financial liabilities at amortised cost	1,265.8	1,278.2	1,265.8	1,348.1
Accounts payable – trade	Financial liabilities at amortised cost	228.8	228.8	289.2	289.2
Other non-derivative financial liabilities	Financial liabilities at amortised cost	40.7	40.7	58.5	58.5
Derivatives	Held for trade	7.1	7.1	4.3	4.3
Liabilities from finance leases	IFRS 7	3.6	3.6	4.5	4.5
Other liabilities	not IFRS 7	32.0	32.0	21.1	21.1
Remaining and other liabilities		83.4	83.4	88.4	88.4

The fair values of the financial instruments were mainly determined on the basis of the market information available on the balance sheet date and are to be allocated to one of the three levels of the fair value hierarchy in accordance with IFRS 13.

Level 1 financial instruments are calculated on the basis of prices quoted on active markets for identical assets and liabilities. In Level 2, financial instruments are calculated on the basis of input factors which are derivable from observable market data or on the basis of market prices for similar instruments. Level 3 financial instruments are calculated on the basis of input factors which are not derivable from observable market data. As of 30 September 2013, financial assets held for trading amounting to € 21.7 million and financial liabilities held for trading amounting to € 7.1 million are to be allocated to Level 2 of the fair value hierarchy. Securities and other financial investments in the "Available for sale" category are based on measurements at Level 1. There are no financial instruments at Level 3 of the fair value hierarchy.

Material changes in individual balance sheet items

Compared with the 2012 consolidated financial statements, the balance sheet total as of 30 September 2013 fell by € 105.8 million.

On the asset side, non-current assets decreased by € 30.0 million and current assets declined by € 75.8 million. The decrease in non-current assets is largely due to a reduction in the balance sheet item securities and other financial investments (€ 270.3 million) as a result of a shift in maturity. By contrast, property, plant and equipment increased by € 258.2 million. The change in current assets resulted from the increase in securities and other financial investments (€ 165.1 million) as well as reductions in cash on hand and balances with banks (€ 11.0 million), inventories (€ 61.1 million) and trade receivables (€ 170.8 million).

On the equity and liabilities side, equity rose by € 38.8 million. This is primarily due to the positive net income for the first nine months of 2013. Non-current debt decreased by € 822.5 million – mainly as a result of shifts in the maturities of financial liabilities (€ 748.6 million) as well as adjustments in the area of provisions. Current debt increased by € 677.9 million. In addition to the reclassification from the non-current area, this was mainly due to a reduction in trade payables (€ 60.4 million).

Material changes in equity

Equity is influenced by transactions with and without recognition in profit or loss as well as through capital transactions with shareholders. Compared with the 2012 consolidated financial statements, accumulated profit and other reserves increased by € 39.8 million. The increase is mainly due to the positive net income for the first nine months of financial year 2013 (after taxes and minority interests), which could more than make up for the dividend payment made in May. Furthermore, changes in equity without recognition in profit or loss resulting from the foreign currency translation of subsidiaries in functional currencies (primarily US dollar) had to be taken into account. Differences arising from foreign currency translation are recorded in a separate currency translation reserve; this reserve decreased by € 87.4 million as of 30 September 2013 because of exchange rate fluctuations. In addition, actuarial gains (after taxes) totalling € 35.6 million served to increase equity. These mainly resulted from the raising of foreign discount rates for pensions and similar obligations.

N et indebtedness		TAB: 2.5.11
	9M/13	9M/12
in € million
Net indebtedness as of 1 January	(827.3)	(660.9)
Cash on hand and balances with banks as of 30 September	340.8	392.7
Non-current securities and other financial investments as of 30 September	229.2	484.9
Current securities and other financial investments as of 30 September	600.1	459.9
Bank loans and overdrafts	(1,265.8)	(1,267.5)
Net financial liabilities as of 30 September	(95.7)	70.0
Provisions for pensions and similar obligations	(104.3)	(191.0)
Provisions for mining obligations	(720.3)	(648.5)
Reimbursement claim bond Morton Salt	18.3	19.3
Net indebtedness as of 30 September	(902.0)	(750.2)

Contingent liabilities

There have been no significant changes in contingent liabilities in comparison with the annual financial statements 2012 and they can be classified as immaterial overall.

Related parties

Within the K+S Group, deliveries are made and services rendered on customary market terms. Besides transactions between K+S Group companies, business relations are maintained with non-consolidated subsidiaries as well as companies over which the K+S Group can exercise a significant influence (associated companies). Such relationships do not have a material influence on the consolidated financial statements of the K+S Group. In the K+S Group, related persons are mainly the Board of Executive Directors and the Supervisory Board. The remuneration received by this group of persons is disclosed annually in the Remuneration Report. There were no other material transactions with related parties.

T otal Revenues Q3 1			TAB: 2.5.12
	Third-party revenues	Intersegment revenues	Total revenues
in € million
Potash and Magnesium Products business unit	456.7	18.7	475.4
Salt business unit	321.0	1.8	322.8
Complementary Activities	39.6	8.2	47.8
Reconciliation	0.4	(28.7)	(28.3)
K+S Group Q3/13	817.7	—	817.7
Potash and Magnesium Products business unit	560.5	16.5	577.0
Salt business unit	318.5	1.3	319.8
Complementary Activities	36.4	10.1	46.5
Reconciliation	1.2	(27.9)	(26.7)
K+S Group Q3/12	916.6	—	916.6

T otal Revenues 9M 1			TAB: 2.5.13
	Third-party revenues	Intersegment revenues	Total revenues
in € million
Potash and Magnesium Products business unit	1,630.5	57.7	1,688.2
Salt business unit	1,220.7	4.8	1,225.5
Complementary Activities	119.7	26.6	146.3
Reconciliation	1.6	(89.1)	(87.5)
K+S Group 9M/13	2,972.5	—	2,972.5

Potash and Magnesium Products business unit	1,811.9	46.1	1,858.0
Salt business unit	1,064.7	3.8	1,068.5
Complementary Activities	113.6	27.9	141.5
Reconciliation	3.5	(77.8)	(74.3)
K+S Group 9M/12	2,993.7	—	2,993.7

1 Information refers to the continued operations of the K+S Group.

2.6 Summary by Quarter 1,2

Revenues & operating earnings (IFRS) TAB: 2.6.1

	Q1/12	Q2/12	Q3/12	9M/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	9M/13
in € million
Potash and Magnesium Products business unit	581.9	669.5	560.5	1,811.9	478.7	2,290.6	625.5	548.3	456.7	1,630.5
Salt business unit	458.5	287.7	318.5	1,064.7	420.1	1,484.8	614.5	285.2	321.0	1,220.7
Complementary Activities	39.1	38.1	36.4	113.6	40.1	153.7	39.7	40.4	39.6	119.7
Reconciliation	1.1	1.2	1.2	3.5	2.7	6.2	0.6	0.6	0.4	1.6
K+S Group revenues	1,080.6	996.5	916.6	2,993.7	941.6	3,935.3	1,280.3	874.5	817.7	2,972.5

Potash and Magnesium Products business unit	207.7	240.0	158.1	605.8	165.1	770.9	209.2	182.0	107.0	498.2
Salt business unit	45.3	(11.6)	4.9	38.6	23.0	61.6	73.1	(13.5)	9.2	68.8
Complementary Activities	6.9	6.6	6.0	19.5	1.5	21.0	6.8	6.2	5.3	18.3
Reconciliation	(12.2)	(16.3)	(13.3)	(41.8)	(7.6)	(49.4)	(11.2)	(12.1)	(5.7)	(29.0)
K+S Group EBIT I	247.7	218.7	155.7	622.1	182.0	804.1	277.9	162.6	115.8	556.3

Income Statement (IFRS) TAB: 2.6.2

Q1/12 Q2/12 Q3/12 9M/12 Q4/12 2012 Q1/13 Q2/13 Q3/13 9M/13 in € million Revenues 1,080.6 996.5 916.6 2,993.7 941.6 3,935.3 1,280.3 874.5 817.7 2,972.5 Cost of sales 575.8 537.6 521.0 1,634.4 524.3 2,158.7 715.4 465.1 490.6 1,671.1 Gross profit 504.8 458.9 395.6 1,359.3 417.3 1,776.6 564.9 409.4 327.1 1,301.4 Selling expenses 193.6 182.1 167.8 543.5 190.7 734.2 235.2 188.6 186.3 610.1 General and administrative expenses 44.9 48.3 47.5 140.7 56.1 196.8 50.4 50.3 41.1 141.8 Research and development costs 8.1 5.6 3.5 17.2 2.2 19.4 3.4 3.3 3.9 10.6 Other operating income/expenses (3.7) 1.6 (12.3) (14.4) 20.2 5.8 (0.7) (8.8) 9.9 0.4 Income from investments, net — 3.4 0.7 4.1 1.1 5.2 2.4 0.6 3.1 6.1 Result from operating forecast hedges 18.4 (26.9) 11.9 3.4 1.5 4.9 (3.5) (1.9) 6.1 0.7 Result after operating hedges (EBIT II) 272.9 201.0 177.1 651.0 191.1 842.1 274.1 157.1 114.9 546.1 Financial result (15.1) (24.1) (21.7) (60.9) (18.0) (78.9) (17.9) (17.5) (21.4) (56.8) Earnings before income taxes 257.8 176.9 155.4 590.1 173.1 763.2 256.2 139.6 93.5 489.3 Taxes on income 71.3 48.9 41.8 162.0 35.4 197.4 68.5 37.6 22.5 128.6 – of which deferred taxes (10.8) (12.5) (7.7) (31.0) (2.6) (33.6) (8.6) (16.1) (15.4) (40.1) Earnings after taxes from continued operations 186.5 128.0 113.6 428.1 137.7 565.8 187.7 102.0 71.0 360.7 Earnings after taxes from discontinued operations 25.1 9.5 66.4 101.0 (1.0) 100.0 — — — — Net income 211.6 137.5 180.0 529.1 136.7 665.8 187.7 102.0 71.0 360.7

Income statement (IFRS) (continued) TAB: 2.6.2

	Q1/12	Q2/12	Q3/12	9M/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	9M/13
in € million
Net income	211.6	137.5	180.0	529.1	136.7	665.8	187.7	102.0	71.0	360.7
Minority interests in earnings	0.2	0.1	0.2	0.5	—	0.5	0.2	—	0.1	0.3
Group earnings after taxes and minority interests	211.4	137.4	179.8	528.6	136.7	665.3	187.5	102.0	70.9	360.4

Operating earnings from continued operations (EBIT I)	247.7	218.7	155.7	622.1	182.0	804.1	277.9	162.6	115.8	556.3
Earnings before income taxes from continued operations, adjusted3	232.6	194.6	134.0	561.2	164.0	725.2	260.0	145.1	94.4	499.5
Group earnings from continued operations, adjusted3	168.3	140.5	98.1	406.9	131.2	538.1	190.2	105.9	71.6	367.7
Group earnings after taxes, adjusted3,4	192.6	150.1	164.5	507.2	130.2	637.4	190.2	105.9	71.6	367.7

Other key data (IFRS) TAB: 2.6.3

		Q1/12	Q2/12	Q3/12	9M/12	Q4/12	2012	Q1/13	Q2/13	Q3/13	9M/13

Capital expenditure5	€ million	41.2	77.7	102.5	221.4	244.1	465.5	110.8	191.3	186.4	488.5
Depreciation and amortisation5	€ million	55.4	56.0	57.1	168.5	60.7	229.2	58.4	64.4	59.8	182.7
Gross cash flow	€ million	264.5	212.2	148.4	625.1	187.9	813.0	277.0	137.7	76.2	490.9
Working capital	€ million	1,047.3	1,067.3	—	1,097.1	—	1,025.7	982.6	836.2	—	845.5
Net indebtedness	€ million	630.0	813.1	—	750.2	—	827.3	618.8	791.1	—	902.0
Earnings per share from continued operations, adjusted3	€	0.88	0.73	0.52	2.13	0.68	2.81	0.99	0.56	0.37	1.92
Earnings per share, adjusted3,4	€	1.01	0.78	0.86	2.65	0.68	3.33	0.99	0.56	0.37	1.92
Gross cash flow per share	€	1.38	1.11	0.78	3.27	1.13	4.40	1.45	0.72	0.40	2.56
Book value per share	€	16.73	16.62	—	17.32	—	17.73	19.05	17.86	—	17.9
Number of shares outstanding6	million	191.40	191.40	—	191.40	—	191.40	191.40	191.40	—	191.40
Average number of shares 7	million	191.40	191.40	191.40	191.40	191.40	191.40	191.40	191.40	191.40	191.40
Closing price	XETRA, €	39.23	36.00	—	38.27	—	35.00	36.29	28.41	—	19.16
Employees as of the reporting date	number	14,323	14,325	—	14,352	—	14,362	14,300	14,255	—	14,473

1 Unless stated otherwise, information refers to the continued operations of the K+S Group. The income statement and the cash flow statement were adjusted according to IFRS following the divestment of the nitrogen business. The balance sheet and therefore the key figures of working capital, net indebtedness and the book value per share as of 30 September 2012 were not adjusted and also include the discontinued operations of the nitrogen business.

2 The figures of the previous year were adjusted due to the change of IAS 19. Further information can be found in the Notes on page 30.

3 The adjusted key figures only include the result from operating forecast hedges of the respective reporting period reported in EBIT I, which eliminates effects from changes in the market value of the hedges as well as effects from the exchange rate hedging of future capital expenditure in Canadian dollar (Legacy Project). Related effects on deferred and cash taxes are also eliminated; tax rate for Q3/13: 28.5% (Q3/12: 28.5%).

4 Earnings from continued and discontinued operations.

5 Capital expenditure in or depreciation on property, plant and equipment, intangible assets and investment properties as well as depreciation on financial assets.

6 Total number of shares less the number of own shares held by K+S as of the balance sheet date.

7 Total number of shares less the average number of own shares held by K+S.

Providing Solutions:

An explanation of the title can be found in the cover of the Financial Report 2012.

10:00 PM/Q3 2013

K+S Aktiengesellschaft

Bertha-von-Suttner-Strasse 7 34131 Kassel, Germany phone: +49 (0)561/9301-0 fax: +49 (0)561/9301-1753 Internet: www.k-plus-s.com

Investor Relations

phone: +49 (0)561/9301-1100 fax: +49 (0)561/9301-2425 e-Mail: [email protected]

Communications

phone: +49 (0)561/9301-1722 fax: +49 (0)561/9301-1666 e-Mail: [email protected]

This report was published on 14 November 2013.

AI assistant

K+S AG — Interim / Quarterly Report 2013

239_10-q_2013-11-14_b360be5b-770a-4eae-af01-a3844aae9039.pdf

Q3 2013

QUARTERLY FINANCIAL REPORT of the K+S GROUP July to September

KEY DATA BUSINESS DEVELOPMENT

Key Figures (IFRS) 1

Content

← Footnotes Key Figures (IFRS)

← Key Data Business Development U2

2 financial section

M ANAGEMENT REPORT

1.1 Group Structure and Business Operations

1.2 Corporate Strategy and Enterprise Management

1.3 Overview of course of business

Macroeconomic environment

Impact on K+S

Industry-specific framework conditions

Potash and Magnesium Products business unit

Salt business unit

De-icing salt – Western Europe

De-icing salt – North America

Industrial salt

Food grade salt

Salt for chemical use

K+S on the capital market

Course of the K+S share price in the third quarter

Shareholder structure

K+S Bonds

1.4 Earnings, Financial and Asset Position

development of orders

Revenues and Earnings Position

Revenues fall by 10.8% in the third quarter

Development of selected cost types

Operating earnings EBIT I at € 556.3 million

Result after operating hedges (EBIT II)

Financial result improved

(Adjusted) earnings before income taxes

(Adjusted) Group earnings from continued operations

Adjusted Group earnings and adjusted earnings per share

Financial position

Capital expenditure in third quarter rises steeply as planned

Cash flow from operating activities benefits from significantly fewer funds being tied up in working capital

Very solid financing structure

Off-balance sheet financing instruments/Off-balance sheet assets

Asset position

Equity Non-current debt Current debt

1.5 Segments of the K+S Group

Potash and Magnesium Products Business Unit

Revenues

Development of earnings

Salt Business Unit

Revenues

Development of earnings

Complementary Activities

Revenues

Development of earnings

Revenues by Segment January – September 2013 FIG: 1.5.5

1.6 Employees

Number of employees stable

For a comprehensive presentation of the risk and oppor-

Personnel expenses

1.7 Research and development

1.9 Opportunity report

1.10 Subsequent events

1.11 Forecast report

Future Group direction

Business policy

Future sales markets

Future macroeconomic situation

Future industry situation

Potash and Magnesium Products business unit

Salt business unit

Future earnings, financial and asset position

Revenues on the level of a year ago

Operating earnings lower

Group earnings follow EBIT I trend

Future capital expenditure increases as planned because of Legacy

Expected development of liquidity

Expected financing structure

K+S AG Interim / Quarterly Report 2013