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Accounting for pension and other post-employment benefit obligations

Since January 1, 2013, the LANXESS Group has applied the revised version of IAS 19 that was published in June 2011. The revisions address the recognition and measurement of expenses for defined-benefit pension plans and termination benefits. In compliance with the respective financial reporting standards, the accounting change has been applied retrospectively. There are also changes regarding the information required to be disclosed in the notes to the annual financial statements.

Since the option used by the LANXESS Group in accounting for actuarial gains and losses already corresponds to the future mandatory method, application of the revised version of IAS 19 does not significantly impact the financial position or results of operations.

The accounting change increases the provisions for pensions and other post-employment benefits and the other reserves reported as of September 30, 2012, by €1 million and €4 million, respectively, and those reported as of December 31, 2012, by €1 million and €5 million, respectively. The net incomes for the first nine months of 2012 and full year 2012 are diminished accordingly. It increased other reserves as of September 30, 2013 by €4 million and correspondingly diminished net income for the reporting period. The decline in net income was predominantly due to a higher negative balance of other financial income and expense, taking into account deferred taxes.