Total assets decreased by EUR 0.9 billion from the end of the previous year, to EUR 36.7 billion, mainly because of the spin-off of LANXESS. Assets of our continuing operations increased by EUR 3.9 billion compared to the end of 2004, chiefly due to the acquisition of the Roche OTC business and to currency translation effects. The goodwill and other intangible assets reflected in noncurrent assets rose by EUR 1.7 billion overall. Of this amount, brands acquired as a result of the Roche OTC acquisition, such as Aleve®, Bepanthen®, Redoxon®, Rennie® and Supradyn®, accounted for about EUR 1.1 billion, and goodwill for EUR 0.6 billion.

Current assets showed a slight 3.9 percent increase, due primarily to the currency-related – and thus non-cash – increase in inventories and receivables.

Stockholders’ equity expanded by EUR 0.2 billion to EUR 11.2 billion. The spin-off of LANXESS early in the year resulted in a reduction of EUR 1.1 billion, while the dividend payment diminished stockholders’ equity by EUR 0.4 billion and the change in pension provisions, which did not affect the income statement, led to a EUR 0.7 billion decline. Group net income came to EUR 1.6 billion, while positive currency effects added EUR 0.9 billion to stockholders’ equity. Equity coverage of total assets for 2005 thus came to 30.4 percent on December 31, 2005 (2004: 29.1 percent).

Liabilities from continuing operations grew by EUR 1.3 billion compared to December 31, 2004, to EUR 25.6 billion, the largest factor here being the EUR 1.0 billion increase in pension provisions. The changes in actuarial losses in 2005 (IAS 19 revised) accounted for EUR 1.3 billion. These losses were due mainly to the decrease in the interest rates used for discounting purposes in 2005. Current liabilities rose by EUR 0.1 billion, or 1.2 percent. While total financial liabilities declined, there were increases in the other provisions and in trade accounts payable.

Balance Sheet Ratios and Financial Indicators			2004	2005
	Cost of goods sold Net sales	%	53.4	54.9
	R&D expenses Net sales	%	8.3	6.9
	Cost of goods sold Inventories		2.6	2.7
	Net sales Trade accounts receivable		5.2	5.3
	Operating result (EBIT) Net sales	%	8.1	10.3
	Property, plant, equipment and intangible assets Total assets	%	41.5	43.6
	Depreciation and amortization Capital expenditures	%	197.9	126.7
	Current liabilities Total liabilities	%	36.9	35.5
	Income before income taxes and interest expense Average total assets	%	5.7	8.9
	Income after taxes* Average stockholders’ equity*	%	6.1	14.4
	Stockholders’ equity* Total assets*	%	29.1	30.4