BASF A.G

BASF Makes a Strong Start to 2005

--  Sales grow strongly due to higher volumes and prices

--  EBIT before special items up 33 percent

--  Cash flow increases further

--  Outlook for full year 2005 remains positive

In the first quarter of 2005, BASF's (NYSE:BF) (FWB:BAS) (LSE:BFA) performance
followed on smoothly from the very good fourth quarter of 2004. "We are
constantly improving our portfolio according to the motto 'Building strengths
and eliminating weaknesses.' This creates the conditions that are needed to
ensure that we will continue to earn a premium on our cost of capital in the
future," said Dr. Juergen Hambrecht, Chairman of the Board of Executive
Directors, when commenting on the company's first-quarter figures at BASF's 53rd
Annual Meeting on April 28, 2005. The good first quarter gives Hambrecht grounds
for optimism: "Demand for our products remains strong. We are attempting to
counter very high raw materials costs, which are continuing to rise in some
cases, with further price increases. We are also rigorously implementing our
restructuring measures to ensure our long-term competitiveness."

First-quarter sales increased by 11 percent compared with the strong first
quarter of 2004 to over EUR 10 billion. Growth was primarily due to price
increases. Sales volumes were higher than in the first quarter of 2004, in
particular in the Chemicals and Plastics segments. Sales rose by 14 percent if
divestitures and currency fluctuations are not taken into account.

Compared with the previous year, income from operations (EBIT) before special
items climbed 33 percent to EUR 1.6 billion. In the Chemicals and Plastics
segments, where capacity utilization was predominantly high, there was a
significant improvement in margins and earnings. The Performance Products
segment increased earnings despite the divestiture of the printing systems
business. Further reductions in fixed costs contributed to the positive earnings
trend throughout the chemical businesses. Earnings in the Agricultural Products
& Nutrition segment declined slightly due to unsatisfactory profitability in the
Fine Chemicals division. In the Oil & Gas segment, earnings benefited from high
oil prices.

First-quarter EBIT after special items rose 39 percent to EUR 1.5 billion.
Special items were related to various restructuring measures that are recorded
under "Other" until implementation in the course of the year.

The financial result improved in particular due to higher earnings from the
stake in the Basell joint venture, which BASF is planning to divest. Income
before taxes and minority interests increased by 49 percent to EUR 1.5 billion.

The tax rate was 40 percent compared with 47 percent in the first quarter of
2004. The decline was due to the higher contribution to earnings from the NAFTA
region. In addition, a charge for the tax effect of planned dividend
distributions from Group companies was included in the first quarter of 2004.
Income taxes contain taxes for oil production that are noncompensable with
German corporate income tax. These oil production taxes increased from EUR 138
million to EUR 198 million due to higher income from operations from the
exploration for and production of oil.

Compared with the first quarter of 2004, net income climbed 66 percent to EUR
861 million. Earnings per share in the first quarter were EUR 1.60 compared with
EUR 0.94 in the same period of the previous year.

Outlook for 2005 remains positive

In 2005, Hambrecht continues to expect global chemical production to grow by
approximately 3 percent, although the growth is likely to vary widely from
region to region.

The company has increased its forecast for the average price of Brent crude oil
from $35 to $45 per barrel; its forecast for the average euro/dollar exchange
rate remains unchanged at $1.30 per euro.

The strong start in the first quarter gives Hambrecht grounds for optimism. The
company expects higher sales and to follow on from the high level of EBIT before
special items (IFRS) posted in 2004, if possible exceeding it. Uncertain factors
continue to be the development of oil prices and the U.S. dollar, as well as the
political situation in regional troublespots.

Sales increase in all regions - North America triples EBIT before special items

Companies in Europe increased sales by 8 percent in the first quarter of 2005.
EBIT before special items rose by EUR 222 million to EUR 1.1 billion. This was
due in particular to higher margins and a further reduction of fixed costs in
the Chemicals and Plastics segments.

In Germany, the increase in sales and earnings was due to the improvement in the
Oil & Gas segment.

In North America (NAFTA), sales by location of company improved by 24 percent in
dollar terms. EBIT before special items tripled from EUR 90 million to EUR 271
million. All segments contributed to this growth. The Chemicals segment
performed particularly strongly due to good capacity utilization of the steam
cracker in Port Arthur, Texas, combined with favorable margins for cracker
products. The Agricultural Products division also posted significantly higher
earnings as a result of strong demand for fungicides.

In Asia Pacific, companies increased sales in local currency terms by 19
percent. The sales growth was due in particular to MDI and polyurethanes systems
in the Polyurethanes division. The new plant for PolyTHF(R) in Caojing, China,
successfully started operations, and this will be followed by the THF plant in
the second quarter. At the Verbund site in Nanjing, China, the startup of the
world-scale plants is also proceeding according to schedule. EBIT before special
items was negatively impacted by startup costs for the two new sites.

In South America, Africa, Middle East, sales by location of company increased by
4 percent in local currency terms. EBIT before special items declined by EUR 7
million to EUR 71 million. In South America, sales and earnings in the
Agricultural Products division did not reach the previous year's very strong
level because dry weather reduced demand for fungicides. The Plastics and
Performance Products segments posted higher sales and earnings.

BASF is the world's leading chemical company: The Chemical Company. Its
portfolio ranges from chemicals, plastics, performance products, agricultural
products and fine chemicals to crude oil and natural gas. As a reliable partner
to virtually all industries, BASF's intelligent solutions and high-value
products help its customers to be more successful. BASF develops new
technologies and uses them to open up additional market opportunities. It
combines economic success with environmental protection and social
responsibility, thus contributing to a better future. In 2004, BASF had
approximately 82,000 employees and posted sales of more than EUR 37 billion.
BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA),
New York (BF), Paris (BA) and Zurich (AN). Further information on BASF is
available on the Internet at www.basf.com.

On April 28, 2005, you can also obtain further information from the Internet at
the following addresses:


Interim Report (from 7:30 a.m. CEST)
www.basf.de/interimreport (English)
www.basf.de/zwischenbericht (German)

Press release (from 7:30 a.m. CEST)
www.basf.de/pressrelease (English)
www.basf.de/presseinformation (German) englisch:

Live-Transmission - Speech Dr. Juergen Hambrecht
(from 10:00 a.m. CEST)
www.basf.de/shareholdermeeting (English)
www.basf.de/hauptversammlung (German)


Forward-looking statements

This release contains forward-looking statements under the U.S. Private
Securities Litigation Reform Act of 1995. These statements are based on current
expectations, estimates and projections of BASF management and currently
available information. They are not guarantees of future performance, involve
certain risks and uncertainties that are difficult to predict and are based upon
assumptions as to future events that may not prove to be accurate. Many factors
could cause the actual results, performance or achievements of BASF to be
materially different from those that may be expressed or implied by such
statements. Such factors include those discussed in BASF's Form 20-F filed with
the Securities and Exchange Commission. We do not assume any obligation to
update the forward-looking statements contained in this release.

First-Quarter Results 2005 January - March 2005, published on April 28, 2005

BASF makes a strong start to 2005 Overview BASF Group


                                                   1st Quarter
                                                                Change
Million EUR                                   2005      2004     in %
Sales                                       10,083     9,051     11.4
Income from operations before interest,
 taxes
amortization and depreciation (EBITDA)       2,019     1,614     25.1
Income from operations (EBIT) before
 special items                               1,563     1,175     33.0
Income from operations (EBIT)                1,499     1,075     39.4
Financial result                                45       (40)       .
Income before taxes and minority
 interests                                   1,544     1,035     49.2
Net income                                     861       520     65.6
Earnings per share (EUR  )                    1.60      0.94     70.2
EBIT before special items in percent of
 sales                                        15.5      13.0        -
Cash provided by operating activities        1,104       988     11.7
Additions to fixed assets(A)                   362       518    (30.1)
Amortization and depreciation(A)               520       539     (3.5)
Segment assets (end of period)(B)           27,374    27,673     (1.1)
Personnel costs                              1,277     1,297     (1.5)
Number of employees (end of period)         81,335    85,617     (5.0)


(A) Tangible and intangible fixed assets (including acquisitions)

(B) Tangible and intangible fixed assets, inventories and business-related
receivables

Starting from January 1, 2005, the accounting and reporting of the BASF Group is
performed according to International Financial Reporting Standards (IFRS). The
previous year's figures have been restated in accordance with IFRS (see also the
explanations on page 15 ff).

Contents

1 BASF Group Business Review and Outlook 4 Chemicals 5 Plastics 6 Performance
Products 7 Agricultural Products & Nutrition 8 Oil & Gas 9 Regions 10
Consolidated Statements of Income 11 Consolidated Balance Sheets 12 Consolidated
Statements of Cash Flows 13 Consolidated Statements of Equity 14 Segment
Reporting

Effects of the Transition to International Financial Reporting Standards (IFRS)

Perfect silicon disks

Modern computers have little room to spare with as many as a billion transistors
per square centimeter jostling for position on their processors and memory
chips. Imagine the entire population of India holidaying in Washington DC and
you'll have some idea of the density. What makes it possible is that transistors
are so small. And that, in fact, is the biggest challenge in their production.
Circuits this tiny can be paralyzed by a particle smaller than a flu virus. A
single misplaced atom may render a chip useless.

Microchip production is complicated

More than 600 working steps are required to turn the raw material, quartz sand,
into a modern processor. Most of these steps require the use of special
chemicals, for example to clean and etch silicon chips. "BASF is a leading
manufacturer of electronic chemicals," says Claus Poppe, Director Global
Business Management for Electronic Chemicals. "At least one BASF product was
used in the production of any microchip manufactured today." The first step is
to get silicon (the building material for most microchips) from simple quartz
sand. To clean the "dirty" silicon produced, technicians convert it into a clear
liquid that is easily purified by multiple distillations. The much cleaner
silicon emerging from this process is ready for the next step, in which
specialists use the Czochralski method to grow impressive shiny silver crystals
up to two meters tall with a perfect interior structure. Special saws cut these
crystals into paper-thin wafers that form the basis of microchip production, but
they need to be smoothed down first and polished to a shine. Again, a number of
high-purity BASF chemicals such as nitric acid, sulfuric acid and hydrochloric
acid are used for the polishing and cleaning process. The finished wafers are
round disks measuring up to 30 centimeters across. Their surface has to be
absolutely perfect. The tolerance for irregularities is limited to one
fifty-thousandth of the diameter of a human hair. When computers were first
produced, technicians were able to solder transistors by hand. Today's tiny
circuits call for a different technique. The modern technology for etching
transistors onto wafers is called photo-lithography. In this process,
specialists first apply a barrier layer to the silicon which they illuminate
through a mask. The layer dissolves at the sites exposed to light and the
underlying silicon layer is etched. Chip manufacturers treat the etched
locations with chemicals and repeat the process a number of times, building up
transistors layer by layer, like building houses from layers of blocks. But dirt
is everywhere. Metal devices invariably give off unwanted atoms. Humans transmit
impurities by a mere touch or breath. That's not counting the approximately half
a billion particles of dust floating around a normal room. For this reason every
step of chip manufacture takes place in pristine working areas where all the
furnishings are plastic and filters are installed to remove the last particle of
dust from the ambient air. Anyone entering these facilities must wear a full set
of protective gear including gloves and a face mask. "Finished microchips must
be absolutely free of contaminants, so the chemicals that are used in their
manufacture have to be extremely pure," explains Dr. Karl-Rudolf Kurtz, head of
BASF's Electronic Materials business unit. "BASF currently supplies around 30
chemicals of electronic grade purity." BASF is equipped with cleanroom labs to
check the chemicals' purity before they are delivered to chip manufacturers. "We
have the technology to detect impurities in trace amounts of less than one
microgram per tonne of product."

The Prospects

BASF is a leading supplier of chemicals to the semiconductor industry. The
global electronic chemical business acquired from Merck KGaA at the start of
2005 significantly strengthens BASF's market position. Electronic chemicals
distribution is organized in a global business management system for easier
ordering and shorter delivery times. BASF was conferred the UK gas supplier BOC
Edwards' Supplier Quality Award for the reliability and quality of its
electronic gases hydrogen chloride and ammonia. BASF is also the world's only
supplier of hydroxylamine free base, a highly active solvent for cleaning
microchips.

BASF Group Business Review and Outlook

- Sales grow strongly due to higher volumes and prices - EBIT before special
items up 33% - Cash flow increases further - Outlook for full year 2005 remains
positive

Sales

We increased sales in the first quarter of 2005 by 11% compared with the same
period of 2004 to EUR10.1 billion. Growth was primarily due to price increases.
Sales volumes were higher than in the strong first quarter of 2004, in
particular in the Chemicals and Plastics segments. Sales rose by 14% if
divestitures and currency fluctuations are not taken into account.


Factors influencing sales in comparison
with previous year
1st Quarter               % of sales
Volumes                                    1
Prices                                    13
Currencies                                (2)
Acquisitions/divestitures                 (1)
Total                                     11



Sales by segment, 1st Quarter 2005
Million EUR
Chemicals      2005         1,822        15%
               2004         1,582
Plastics       2005         2,800        21%
               2004         2,307
Performance    2005         1,908       (1)%
Products       2004         1,929
Agricultural   2005         1,354       (6)%
Products &
 Nutrition     2004         1,441
Oil & Gas      2005         1,840        32%
               2004         1,394


The Chemicals and Plastics segments increased sales as a result of overall
strong volumes and higher sales prices.

The Performance Products segment also benefited from increased sales prices,
although the loss in sales following the divestiture of the printing systems
business could not be compensated for completely. Sales in the Agricultural
Products & Nutrition segment declined due to weather conditions and lower sales
prices in the Fine Chemicals division. The Oil & Gas segment posted the
strongest sales growth in percentage terms as a result of high oil prices.


Special items          1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Million EUR            2005  2004  2005  2004  2005  2004  2005  2004
Special items in
    Income from
     operations         (64) (100)        (16)        (96)        175
    Financial result      -   (21)         (1)        (16)       (580)
    Income before
     taxes and
     minority
     interests          (64) (121)        (17)       (112)       (405)


Earnings

Compared with the previous year, we increased income from operations (EBIT)
before special items by 33% to EUR1,563 million.

In the Chemicals and Plastics segments, where capacity utilization was
predominantly high, there was a significant improvement in margins and earnings.
The Performance Products segment increased earnings despite the divestiture of
the printing systems business. Further reductions in fixed costs contributed to
the positive earnings trend throughout the chemical businesses. Earnings in the
Agricultural Products & Nutrition segment declined slightly due to
unsatisfactory profitability in the Fine Chemicals division. In the Oil & Gas
segment, earnings benefited from high oil prices.

First-quarter EBIT after special items climbed 39% to EUR1,499 million. Special
items were related to various restructuring measures that are recorded under
"Other" until implementation in the course of the year.

The financial result improved in particular due to higher earnings from our
stake in the Basell joint venture, which we are planning to divest. We increased
income before taxes and minority interests by 49% to EUR1,544 million.


EBIT before special items, 1st Quarter
 2005
Million EUR
Chemicals           2005       426   70%
                    2004       251
Plastics            2005       269   74%
                    2004       155
Performance         2005       225    7%
Products            2004       210
Agricultural        2005       296  (1)%
 Products
& Nutrition         2004       300
Oil & Gas           2005       484   41%
                    2004       343


The tax rate was 40% compared with 47% in the first quarter of 2004. The decline
was due to the higher contribution to earnings from the NAFTA region. In
addition, a charge for the tax effect of planned dividend distributions from
Group companies was included in the first quarter of 2004. Income taxes contain
taxes for oil production that are noncompensable with German corporate income
tax. These oil production taxes increased from EUR138 million to EUR198 million
due to higher income from operations from the exploration and production of oil.

Compared with the first quarter of 2004, net income climbed 66% to EUR861
million. Earnings per share in the first quarter were EUR1.60 compared with
EUR0.94 in the same period of the previous year.

Outlook

We continue to expect global chemical production to grow by approximately 3% in
2005, although the growth is likely to vary widely from region to region.

We have increased our forecast for the average price of Brent crude from $35 to
$45 per barrel; our forecast for the average euro/dollar exchange rate remains
unchanged at $1.30 per euro.

Demand for our products remains strong. We are attempting to counter very high
raw materials costs, which are continuing to rise in some cases, with further
price increases in accordance with our "value over volume" concept. The major
highlight in the further course of the year will be the startup of our new
Verbund site in Nanjing, China. We are rigorously implementing our restructuring
measures to ensure our long-term competitiveness. The strong start in the first
quarter gives us grounds for optimism. We expect to achieve higher sales and
follow on from the high level of EBIT before special items (IFRS) posted in
2004, if possible exceeding it. Uncertain factors continue to be the development
of oil prices and the U.S. dollar, as well as the political situation in
regional troublespots.

Significant events

Starting from January 1, 2005, the accounting and reporting of the BASF Group is
performed according to International Financial Reporting Standards (IFRS). The
previous year's figures have been restated; the effects of the changes are
explained on page 15 ff.

On April 11, BASF and its partner Gazprom announced a memorandum of
understanding to further strengthen their partnership. The two partners will
jointly develop the Yushno Russkoje natural gas field in western Siberia and
jointly participate in the construction of the planned North European Gas
Pipeline (NEGP) across the Baltic Sea. In addition, Gazprom will increase its
stake in the WINGAS joint venture from currently 35%, and will thus become more
heavily involved in the joint marketing of natural gas in Europe.

On April 15, BASF acquired the electronic chemicals business of Merck KGaA,
Darmstadt, Germany. The acquisition includes production sites and distribution
centers for high-purity chemicals in Asia and Europe. As of this date, these
activities will be assigned to the Inorganics division of the Chemicals segment
and reported accordingly.

On April 19, BASF announced that it would continue with its share buyback
program, and plans to buy back shares for EUR1.5 billion in 2005.


BASF shares                   1st
                               Quarter   Full year
                              2005       2004
Share price (end of
 period)(A) (EUR)               54.69         53.00
High(A) (EUR)                   58.30         53.00
Low(A) (EUR)                    51.34         40.49
Average daily trade
 (million shares)(A)               2.60          2.71
BASF share performance(B)          3.2%         22.8%
DAX 30 performance(B)              2.2%          7.3%
EURO STOXX 50 performance(B)       3.8%          9.4%
Market capitalization (end
 of period)
(billion EURO)                   29.3          28.7
Number of shares (end of
 period)
(million shares)                535.3         541.2


(A) XETRA trading (B) with dividends reinvested

Chemicals - Higher volumes and sales growth - Earnings rise strongly by 70% -
High capacity utilization and further reduction of fixed costs


Overview Chemicals                           1st Quarter
                                                         Change in
Million EUR                             2005       2004   %
Sales                                  1,822      1,582         15
Thereof    Inorganics                    207        201          3
    Petrochemicals                     1,136        919         24
    Intermediates                        479        462          4
EBITDA                                   544        354         54
EBIT before special items                426        251         70
EBIT before special items in
 percent of sales                       23.4       15.9          -
EBIT                                     426        234         82


All divisions increased sales and earnings. Price increases to pass on higher
raw materials costs were the prime reason for the rise in sales to EUR1.8
billion (volumes 5%, portfolio 1%, prices 12%, currencies -3%). Earnings
increased significantly, in particular due to improved margins, high capacity
utilization and a further reduction in fixed costs.

Inorganics

Strong demand for our inorganic specialties, electronic chemicals and catalysts
led to an increase in sales. We also improved earnings due to our measures to
reduce fixed costs, for example the use of new production technologies for basic
chemicals. By acquiring the electronic chemicals business of Merck KGaA, we are
further expanding our activities in this high-growth business area.

Petrochemicals

Sales climbed significantly thanks to price increases in all product lines, in
particular for cracker products. We benefited from strong demand for
plasticizers and solvents. As a result of higher margins and very good capacity
utilization, earnings increased considerably compared with the same period of
2004. Raw materials costs remain extremely high. In the second quarter, we will
start operations at the steam cracker and further world-scale plants at our
Verbund site in Nanjing, China.

Intermediates

The previous year's positive trend with regard to sales volumes and prices
continued in Europe and North America (NAFTA). Demand for butanediol and its
derivatives was particularly strong. We achieved higher margins and earnings by
further increasing prices. We successfully started operations at our new plant
for PolyTHF(R) in Caojing, China. PolyTHF(R) is an important precursor for
elastic fibers used, for example, in sportswear.

Plastics

- Strong sales growth primarily due to price increases - Earnings climb 74% -
Portfolio further optimized


Overview Plastics                              1st Quarter
                                                              Change
Million EUR                              2005         2004     in %
Sales                                   2,800        2,307         21
Thereof    Styrenics                    1,136          918         24
    Performance Polymers                  689          613         12
    Polyurethanes                         975          776         26
EBITDA                                    380          274         39
EBIT before special items                 269          155         74
EBIT before special items in
 percent of sales                         9.6          6.7          -
EBIT                                      268          154         74


Sales again rose significantly due to higher prices and sales volumes (volumes
3%, prices 20%, currencies -2%). Earnings in the Performance Polymers and
Polyurethanes divisions increased considerably. In the Styrenics division,
earnings were below the level of the first quarter of 2004.

Styrenics

Higher sales prices led to an increase in sales, but this did not compensate for
the significant increase in the cost of the division's most important raw
material, benzene. This margin pressure resulted in a decline in earnings. We
intend to improve profitability by increasing prices and by further optimizing
the portfolio.

Performance Polymers

Sales growth resulted from continuous price increases throughout the product
portfolio and expansion of the engineering plastics business. Earnings increased
significantly. This was due primarily to the realization of synergies from the
integration of the engineering plastics businesses acquired in prior years as
well as the optimization of production, in particular in Europe and North
America (NAFTA).

In the United States, our customer Mann + Hummel Inc. named BASF "Perfect
Supplier 2004."

In Asia, we intend to strengthen our engineering plastics business with a new
compounding plant in Shanghai, China, and by expanding the compounding plant in
Pasir Gudang, Malaysia.

Polyurethanes

Sales increased considerably in all regions. High prices for important raw
materials were passed on to the market in the form of price increases, thus
allowing the division to achieve further profitable growth. The expansion of MDI
capacity at the site in Antwerp, Belgium, from 360,000 to 450,000 metric tons
per year is scheduled for completion in early May 2005.

Performance Products

- Higher sales from ongoing business - Profitable growth in Functional Polymers
boosts earnings - Closer cooperation with customers on innovative products


Overview Performance Products                  1st Quarter
                                                              Change
Million EUR                              2005         2004     in %
Sales                                   1,908        1,929         (1)
Thereof    Performance Chemicals          694          796        (13)
    Coatings                              472          505         (7)
    Functional Polymers                   742          628         18
EBITDA                                    304          294          3
EBIT before special items                 225          210          7
EBIT before special items in
 percent of sales                        11.8         10.9          -
EBIT                                      224          203         10


Sales from ongoing business increased by 5% compared with the previous year due
to higher prices (volumes -1%, portfolio -6%, prices 8%, currencies -2%).
Earnings also improved.

Performance Chemicals

The decline in sales was due to the divestiture of the printing systems business
in the fourth quarter of 2004. Sales from ongoing business increased, in
particular due to the contribution from performance chemicals for detergents and
formulators and for the automotive and oil industry. Earnings were slightly
lower due to the divestiture of the printing systems business. On the basis of
ongoing business, however, earnings increased, thanks to a reduction in fixed
costs.

Coatings

Sales were below the previous year's level due to a decline in sales of
automotive coatings. Together with a further increase in raw materials costs,
this resulted in a decline in earnings. The profitability of the industrial
coatings business developed positively due to streamlining of the portfolio and
optimization of production.

We have further extended our cooperation with key customers. For example, we act
as a system supplier to BMW in China. In the important Japanese automobile
market, we have further strengthened our position by acquiring our partner's
shares in the joint venture BASF NOF Coatings.

Functional Polymers

We grew profitably and faster than the market due to our innovative product
portfolio and close cooperation with our customers. Sales increased
significantly, in particular for acrylic monomers, dispersions for architectural
coatings, carpet coatings and paper dispersions. Earnings also increased
significantly because we passed on higher raw materials costs to the market by
increasing our sales prices. We achieved the strongest earnings growth in North
America (NAFTA). We have added cyclohexyl methacrylate (CHM) - a special
acrylate to improve automotive coatings - to our product portfolio, and have
successfully started production at our Ludwigs-hafen site.

Agricultural Products & Nutrition - Agricultural Products: profitability further
increased - Fine Chemicals: earnings situation unsatisfactory


Overview Agricultural Products                 1st Quarter
                                                              Change
Million EUR                              2005         2004     in %
Sales                                     959          983         (2)
EBITDA                                    332          302         10
EBIT before special items                 276          254          9
EBIT before special items in
 percent of sales                        28.8         25.8          -
EBIT                                      284          234         21


The slight decline in sales (volumes -3%, prices 2%, currencies -1%) was
primarily due to weather conditions which reduced the use of crop protection
products in Europe and South America. This was partially offset by significantly
higher demand for fungicides in North America, where our customers are preparing
to combat Asian soybean rust. A higher value product portfolio and improved cost
structures led to a further increase in earnings.

We are currently working to develop six new crop protection active ingredients,
on a new herbicide tolerance project and on products to protect seeds with
established active ingredients. These product innovations have a total peak
sales potential of EUR700 million and will be ready for market in the coming
years. A further seven crop protection active ingredients with peak sales of
EUR1 billion are currently being introduced to the market. We have one of the
most promising pipelines in the industry.


Overview Fine Chemicals                        1st Quarter
                                                             Change in
Million EUR                             2005         2004     %
Sales                                    395          458         (14)
EBITDA                                    50           79         (37)
EBIT before special items                 20           46         (57)
EBIT before special items in
 percent of sales                        5.1         10.0           -
EBIT                                      20           46         (57)


The decline in sales (volumes -1%, portfolio -2%, prices -10%, currencies -1%)
was primarily due to the severe decline in the price of lysine, the highest
volume product in our portfolio. In addition, sales volumes of pharmaceutical
active ingredients and premixes were lower than in the first quarter of 2004.
Organic acids and aroma chemicals, however, continued to grow strongly. Earnings
declined due to the overall negative trend in sales volumes and prices. To some
extent, the decline was offset by the reduction of fixed costs. We are
addressing the challenging competitive environment through active portfolio
management, further cost-reduction measures, a closer focus on innovative
products as well as close cooperations with our customers.

Oil & Gas

- Positive sales and earnings development due to considerably higher oil prices

- New customers in natural gas trading

- Successful cooperation with Gazprom extended further


Overview Oil & Gas                           1st Quarter
                                                         Change in
Million EUR                             2005       2004   %
Sales                                  1,840      1,394         32
Thereof    Exploration and
 production                              693        527         31
    Natural gas trading                1,147        867         32
EBITDA                                   590        429         38
Thereof    Exploration and
 production                              459        304         51
    Natural gas trading                  131        125          5
EBIT before special items                484        343         41
Thereof    Exploration and
 production                              386        249         55
    Natural gas trading                   98         94          4
EBIT before special items in
 percent of sales                       26.3       24.6          -
    Exploration and production          55.7       47.2          -
    Natural gas trading                  8.5       10.8          -
EBIT                                     484        343         41
Thereof    Exploration and
 production                              386        249         55
    Natural gas trading                   98         94          4


The considerable increase in oil prices in terms of both dollars and euros
compared with the same period of 2004 resulted in significantly higher sales
(volumes 4%, prices/currencies 28%).

In the exploration and production business sector, production was slightly
higher than in the first quarter of 2004 due to increased oil production in
Libya and slightly higher gas volumes.

At EUR36.30 per barrel, the average price of Brent crude was 42% higher than in
the same period of the previous year, resulting in a significant increase in
earnings.

In the natural gas trading business sector, volumes increased further and we
acquired new customers. The increase in earnings was due entirely to higher
volumes. A gas supply contract was signed with the German energy company Mark-E
for a planned combined heat and power plant.

On April 11, 2005, we signed a memorandum of understanding with our partner
Gazprom to jointly produce natural gas in western Siberia and market it in
Europe.

Regions

- Sales growth in all regions

- North America: earnings triple

- Asia: startup of plants in Nanjing and Caojing proceeds as scheduled


Overview           Sales              Sales
 Regions       (location of       (location of    EBIT before special
                  company)          customer)             items
                         Change             Change              Change
Million EUR   2005  2004  in %   2005  2004  in %    2005  2004  in %
1st Quarter
Europe       6,102 5,634     8  5,851 5,387     9   1,134   912    24
    Thereof
     Germany 4,310 3,893    11  2,201 1,949    13     742   654    13
North
 America
 (NAFTA)     2,265 1,918    18  2,243 1,909    17     271    90   201
Asia
 Pacific(A)  1,299 1,099    18  1,366 1,192    15      87    95    (8)
South
 America,
 Africa,
 Middle
 East(A)       417   400     4    623   563    11      71    78    (9)
            10,083 9,051    11 10,083 9,051    11   1,563 1,175    33


Effective January 1, 2005, companies in Asia are reported in the region "Asia
Pacific." South America, which was previously reported as a separate region, is
now reported together with the African and Middle Eastern companies in the
region "South America, Africa, Middle East."

Companies in Europe increased sales by 8% in the first quarter of 2005. EBIT
before special items rose by EUR222 million to EUR1,134 million. This was due in
particular to higher margins and a further reduction of fixed costs in the
Chemicals and Plastics segments.

In Germany, the increase in sales and earnings was due to the improvement in the
Oil & Gas segment.

In North America (NAFTA), sales by location of company improved by 24% in dollar
terms. EBIT before special items tripled from EUR90 million to EUR271 million.
All segments contributed to this growth. The Chemicals segment performed
particularly strongly due to good capacity utilization of the steam cracker in
Port Arthur, Texas, combined with favorable margins for cracker products. The
Agricultural Products division also posted significantly higher earnings as a
result of strong demand for fungicides.

In Asia Pacific, companies increased sales in local currency terms by 19%. The
sales growth was due in particular to MDI and polyurethanes systems in the
Polyurethanes division. The new plant for PolyTHF(R) in Caojing, China,
successfully started operations, and this will be followed by the THF plant in
the second quarter. At our Verbund site in Nanjing, China, the startup of our
world-scale plants is also proceeding according to schedule. EBIT before special
items was negatively impacted by startup costs for our two new sites.

In South America, Africa, Middle East, sales by location of company increased by
4% in local currency terms. EBIT before special items declined by EUR7 million
to EUR71 million. In South America, sales and earnings in the Agricultural
Products division did not reach the previous year's very strong level because
dry weather reduced demand for fungicides. The Plastics and Performance Products
segments posted higher sales and earnings.

Consolidated Statements of Income


                                          1st Quarter          Year
                                                      Change
Million EUR                          2005     2004     in %      2004
Sales                              10,083    9,051     11.4    37,537
Cost of sales                       6,845    6,140     11.5    25,537
Gross profit on sales               3,238    2,911     11.2    12,000

Selling expenses                    1,004    1,111     (9.6)    4,500
General and administrative
 expenses                             164      171     (4.1)      708
Research and development
 expenses                             283      263      7.6     1,182
Other operating income                126       97     29.9       951
Other operating expenses              414      388      6.7     1,381
Income from operations              1,499    1,075     39.4     5,180
(Expenses)/income from financial
 assets                                71       13    446.2      (598)
Interest result                       (40)     (37)    (8.1)     (162)
Other financial results                14      (16)       .      (117)
Financial result                       45      (40)       .      (877)
Income before taxes and minority
 interests                          1,544    1,035     49.2     4,303

Income taxes                          622      483     28.8     2,206
Net income before minority
 interests                            922      552     67.0     2,097

Minority interests                     61       32     90.6       131
Net income                            861      520     65.6     1,966
Earnings per share (EUR)            1.60     0.94     70.2      3.58
Number of shares, in million
 (weighted)                           537      555     (3.2)      549


The interim financial statements have not been audited. The financial statements
were prepared for the first time in accordance with International Financial
Reporting Standards (IFRS); the previous year's figure have been restated (see
also the explanations on page 15 ff).

Consolidated Balance Sheets


Assets                   March     March              Dec.
Million EUR               31,       31,      Change    31,      Change
                         2005      2004      in %      2004     in %
Long-term assets
Intangible assets         3,543     4,004    (11.5)    3,610     (1.9)
Property, plant and
 equipment               13,202    13,792     (4.3)   13,007      1.5
Investments accounted
 for using the equity
 method                   1,165     1,670    (30.2)    1,092      6.7
Other financial assets      930       954     (2.5)      941     (1.2)
Deferred taxes            1,185     1,228     (3.5)    1,067     11.1
Other long-term assets      660       575     14.8       598     10.4
                         20,685    22,223     (6.9)   20,315      1.8
Short-term assets
Inventories               4,964     4,470     11.1     4,645      6.9
Accounts receivable,
 trade                    6,589     6,268      5.1     5,861     12.4
Other receivables and
 miscellaneous short-
 term assets              2,224     2,143      3.8     2,073      7.3
Liquid funds              3,007       909    230.8     2,291     31.3
                         16,784    13,790     21.7    14,870     12.9
Total assets             37,469    36,013      4.0    35,185      6.5



Stockholders' equity     March     March              Dec.
 and liabilities          31,       31,      Change    31,      Change
Million EUR              2005      2004      in %      2004     in %
Stockholders' equity
Subscribed capital        1,371     1,417     (3.2)    1,384     (0.9)
Capital surplus           3,037     2,991      1.5     3,022      0.5
Retained earnings        12,749    12,059      5.7    12,154      4.9
Other comprehensive
 income                      11       113    (90.3)     (166)       .
Minority interests          413       357     15.7       347     19.0
                         17,581    16,937      3.8    16,741      5.0
Long-term liabilities
Provisions for
 pensions and similar
 obligations              3,869     3,941     (1.8)    3,866      0.1
Other provisions          2,315     2,335     (0.9)    2,385     (2.9)
Deferred taxes              934       653     43.0       817     14.3
Financial indebtedness    1,966     3,071    (36.0)    1,845      6.6
Other liabilities         1,064     1,069     (0.5)    1,043      2.0
                         10,148    11,069     (8.3)    9,956      1.9
Short-term liabilities
Accounts payable,
 trade                    2,879     2,568     12.1     2,372     21.4
Provisions                2,547     2,422      5.2     2,508      1.6
Tax liabilities           1,110       897     23.7       644     72.4
Financial indebtedness    1,455       418    248.1     1,453      0.1
Other liabilities         1,749     1,702      2.8     1,511     15.8
                          9,740     8,007     21.6     8,488     14.8
Total stockholders'
 equity and
 liabilities             37,469    36,013      4.0    35,185      6.5


Consolidated Statements of Cash Flows


                                                January - March
Million EUR                                        2005          2004
Net income                                          861           520
Depreciation and amortization of long-
 term assets                                        521           547
Changes in net working capital                     (175)          (62)
Miscellaneous items                                (103)          (17)
Cash provided by operating activities             1,104           988
Payments related to tangible and
 intangible fixed assets                           (393)         (458)
Acquisitions/divestitures                           139           (73)
Financial investments and other items                38           (71)
Cash used in investing activities                  (216)         (602)
Proceeds from capital
 increases/(decreases)                             (264)         (165)
Changes in financial indebtedness                   143           (15)
Dividends                                           (19)          (16)
Cash used in financing activities                  (140)         (196)
Net changes in cash and cash equivalents            748           190
Cash and cash equivalents as of beginning
 of year and other changes                        2,094           540
Cash and cash equivalents                         2,842           730
Marketable securities                               165           179
Liquid funds                                      3,007           909


The previous year's figures were restated due to the transition to IFRS. There
were no significant changes.

As a result of the higher level of net income, cash provided by operating
activities increased by 12% in the first quarter to EUR1,104 million. Expansion
of our business resulted in an increase in inventories and receivables. Cash
used in investing activities led to a cash outflow of EUR216 million compared
with EUR602 million in the first quarter of 2004. At EUR393 million, payments
related to tangible and intangible fixed assets were below the previous year's
level and were significantly lower than the level of amortization and
depreciation on fixed assets of EUR521 million. There was a cash inflow due to
past acquisition activities; the first quarter of 2004 contained the acquisition
of Sunoco's plasticizers business.

In cash used in financing activities, further share buybacks led to a cash
outflow. In the first quarter of 2005, 5,1 million shares were bought back for
EUR274 million or an average of EUR53.80 per share. In the course of the year,
it is planned to buy back shares for a further EUR1.5 billion.

Liquid funds increased by EUR716 million to EUR3,007 million, and at EUR3,421
million financial indebtedness rose by EUR123 million compared with the figure
at the end of 2004. Net debt declined to EUR414 million.

Consolidated Statements of Equity


January - March 2005        Number of    Subscribed Capital Retained
Million EUR                 subscribed   capital    surplus  earnings
                             shares
                            outstanding


As of January 1, 2005       540,440,410      1,384   3,022    12,154
Share buyback and
 cancellation of shares
 including own shares
 intended to be cancelled    (5,091,410)       (13)     15      (276)
Capital injection by
 minority interests                   -          -       -         -
Dividends paid                        -          -       -         -
Net income                            -          -       -       861
Change in other
 comprehensive
income                                -          -       -         -
Change in scope of
 consolidation
and other changes                     -          -       -        10
As of March 31, 2005        535,349,000      1,371   3,037    12,749


January - March 2005                Other           Minority    Stock-
Million EUR                         comprehensive  interests  holders'
                                    income(A)                   equity



As of January 1, 2005                           (166)     347  16,741
Share buyback and cancellation of
 shares including own shares
 intended to be cancelled                          -        -    (274)
Capital injection by minority
 interests                                         -       10      10
Dividends paid                                     -      (19)    (19)
Net income                                         -       61     922
Change in other comprehensive
income                                           177       11     188
Change in scope of consolidation
and other changes                                  -        3      13
As of March 31, 2005                              11      413  17,581



January - March 2004        Number of    Subscribed Capital Retained
Million EUR                 subscribed   capital    surplus  earnings
                             shares
                            outstanding
As of January 1, 2004       556,643,410      1,425   2,983     11,673
Share buyback and
 cancellation of shares
 including own shares
 intended to be cancelled    (3,270,000)        (8)      8       (136)
Capital injection by
 minority interests                   -          -       -          -
Dividends paid                        -          -       -          -
Net income                            -          -       -        520
Change in other
 comprehensive
income                                -          -       -          -
Change in scope of
 consolidation
and other changes                     -          -       -          2
As of March 31, 2004        553,373,410      1,417   2,991     12,059


January - March 2004                Other          Minority  Stock-
Million EUR                          comprehensive interests holders'
                                     income(A)                 equity

As of January 1, 2004                          28       403   16,512
Share buyback and cancellation of
 shares including own shares
 intended to be cancelled                       -         -     (136)
Capital injection by minority
 interests                                      -       (29)     (29)
Dividends paid                                  -       (16)     (16)
Net income                                      -        32      552
Change in other comprehensive
income                                         85       (59)      26
Change in scope of consolidation
and other changes                               -        26       28
As of March 31, 2004                          113       357   16,937


Contains income-neutral changes in equity (in particular, translation
adjustments and fair-value changes of financial instruments)

Segment Reporting


Segments
Million EUR         Sales                     EBITDA
1st Quarter           2005     2004        %    2005     2004        %
Chemicals            1,822    1,582    15.2      544      354    53.7
Plastics             2,800    2,307    21.4      380      274    38.7
Performance
 Products            1,908    1,929    (1.1)     304      294     3.4
Agricultural
 Products &
 Nutrition           1,354    1,441    (6.0)     382      381     0.3
     Agricultural
      Products         959      983    (2.4)     332      302     9.9
     Fine
      Chemicals        395      458   (13.8)      50       79   (36.7)
Oil & Gas            1,840    1,394    32.0      590      429    37.5
Other(A)               359      398    (9.8)    (181)    (118)  (53.4)
                    10,083    9,051    11.4    2,019    1,614    25.1

                    Research and
1st Quarter         development expenses      Assets(B)
Chemicals               27       27     0.0    5,416    5,165     4.9
Plastics                34       31     9.7    6,530    6,168     5.9
Performance
 Products               50       55    (9.1)   4,711    5,073    (7.1)
Agricultural
 Products &
 Nutrition              86       82     4.9    6,700    7,479   (10.4)
     Agricultural
      Products          68       61    11.5    5,402    6,076   (11.1)
     Fine
      Chemicals         18       21   (14.3)   1,298    1,403    (7.5)
Oil & Gas               34       25    36.0    4,017    3,788     6.0
Other(A)                 52       43    20.9   10,095    8,340    21.0
                       283      263     7.6   37,469   36,013     4.0


Segments           Income from operations     Income from operations
Million EUR        before special items       (EBIT)
1st Quarter         2005     2004         %    2005     2004         %
Chemicals            426      251     69.7      426      234     82.1
Plastics             269      155     73.5      268      154     74.0
Performance
 Products            225      210      7.1      224      203     10.3
Agricultural
 Products &
 Nutrition           296      300     (1.3)     304      280      8.6
     Agricultural
      Products       276      254      8.7      284      234     21.4
     Fine
      Chemicals       20       46    (56.5)      20       46    (56.5)
Oil & Gas            484      343     41.1      484      343     41.1
Other(A)            (137)     (84)   (63.1)    (207)    (139)   (48.9)
                   1,563    1,175     33.0    1,499    1,075     39.4

                   Additions to fixed         Amortization and
1st Quarter         assets(C)                 depreciation(C)
Chemicals             88      175    (49.7)     118      120     (1.7)
Plastics              82      102    (19.6)     112      120     (6.7)
Performance
 Products             54       66    (18.2)      80       91    (12.1)
Agricultural
 Products &
 Nutrition            31       55    (43.6)      78      101    (22.8)
     Agricultural
      Products        12       19    (36.8)      48       68    (29.4)
     Fine
      Chemicals       19       36    (47.2)      30       33     (9.1)
Oil & Gas             94       86      9.3      106       86     23.3
Other(A)              13       34    (61.8)      26       21     23.8
                     362      518    (30.1)     520      539     (3.5)


(A) "Other" includes the fertilizers business and other businesses as well as
expenses, income and assets not allocated to the segments. This item also
includes foreign currency results from financial indebtedness that are not
allocated to the segments as well as from currency positions that are
macro-hedged.

(B) The assets of "Other" includes the assets of the fertilizers business and
other businesses as well as assets that are not allocated to the segments
(financial assets, liquid funds, financial receivables, deferred taxes; 1st
quarter 2005: EUR8,437 million, 1st quarter 2004: EUR6,707 million).

(C) Tangible and intangible fixed assets

Effects of the Transition to International Financial Reporting Standards (IFRS)

Starting from January 1, 2005, the accounting and reporting of the BASF Group is
performed according to IFRS. The effect of retrospective application of IFRS on
income and equity of the BASF Group is shown below. The IFRS figures for the
year 2004 have not yet been attested by the external auditor.


Overview   1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
 BASF Group 2004        2004        2004        2004       Year 2004
                 German      German      German      German     German
MillionEUR IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP
Income
from
 operations
 (EBIT)    1,075 1,038 1,250 1,181 1,076   958 1,779 1,679 5,180 4,856
Financial
results     (40)  (60)   12   (23) (127)  (93) (722) (661) (877) (837)
(Expenses)
/income
from
financial
assets(A)    13    (8)   45    26    (2)  (25) (654) (602) (598) (609)
Interest
 result     (37)  (52)  (38)  (49)  (52)  (68)  (35)  (59) (162) (228)
Other
 financial
 results     (16)    -     5     -   (73)    -   (33)    -  (117)    -
Income
before
taxes
and
minority
interests  1,035   978 1,262 1,158   949   865 1,057 1,018 4,303 4,019
Income
 taxes       483   431   514   490   537   482   672   602 2,206 2,005
Minority
 interests    32    32    34    34    46    46    19    19   131   131
Net income   520   515   714   634   366   337   366   397 1,966 1,883
Earnings
 per share  0.94  0.93  1.30  1.15  0.67  0.62  0.67  0.73  3.58  3.43


Including write-downs and losses on sale of participating interests


                                      Mar.    June    Sept.   Dec.
Million EUR                   Jan. 1,  31,     30,     30,     31,
                         Note  2004    2004     2004   2004    2004
Stockholders' equity in
 accordance with
German GAAP                   15,879  16,289  15,991  16,097  15,765
Capitalization of interest
                            a   323     326     326     312     314
Capitalization of software
 developed for internal use
                            b   114     107     101      96      81
Accounting for pensions(A)
                            c  (156)   (139)   (122)   (107)    177
Accounting for provisions
                            d  175     170     167     164     163
Accounting for financial
 instruments
                            e   (10)      4      51      (7)    191
Inventory valuation(A)
                            f    102     102     102     132     12
Reversal of goodwill
 amortization and write-offs
 due to
impairment
                            g    -      31      58      86     109
Other adjustments
                            h   (14)    (14)    (14)    (14)    (13)
Tax effects of planned
 dividend payments
and other tax effects
                            i   46      (5)     (5)    (28)    (58)
Valuation adjustments
 relating to companies
 accounted for
under the equity method
                            j   53      66      79      85       -
Adjustments in accordance
 with IFRS                       633     648     743     719     976
Stockholders' equity in
 accordance with IFRS         16,512  16,937  16,734  16,816  16,741


Including effects of changes in valuation methods in the 2004 German GAAP annual
financial statements


                            1st      2nd      3rd      4th
Million EUR                 Quarter  Quarter  Quarter  Quarter Year
                        Note 2004     2004     2004     2004      2004
EBIT in accordance with
 German GAAP                 1,038    1,181      958    1,679  4,856
Capitalization of interest
                           a  (17)     (16)     (18)     (13)   (64)
Capitalization of software
 developed for internal
 use
                           b   (13)     (10)      (8)     (23)   (54)
Accounting for pensions(A)
                           c    27       28       23      (10)    68
Accounting for provisions
                           d    (7)      (2)       1       21     13
Accounting for financial
 instruments
                           e    (14)      14        1       86     87
Inventory valuation(A)
                           f     -        -       48      (51)    (3)
Reversal of goodwill
 amortization and write-
 offs due to
impairmentg                     41       35       39       36    151
Other adjustments
                           h   (18)     (18)      (5)      17    (24)
Net financing cost of
 pensions                       38       38       37       37    150
Adjustments in accordance
 with IFRS                      37       69      118      100    324
EBIT in accordance with
 IFRS                        1,075    1,250    1,076    1,779  5,180



                            1st      2nd      3rd      4th
Million EUR                  Quarter  Quarter  Quarter  Quarter Year
                        Note  2004     2004     2004     2004     2004
Net income in accordance
 with German GAAP               515      634      337      397  1,883
Capitalization of interest
                            a    1        -       (9)      12      4
Capitalization of software
 developed for internal use
                            b    (8)      (6)      (5)     (14)   (33)
Accounting for pensions(A)
                            c    17       17       15       (6)    43
Accounting for provisions
                            d    (3)      (4)      (3)      (2)   (12)
Accounting for financial
 instruments
                            e     5       32       (8)     104    133
Inventory valuation(A)
                            f     -        -       30      (32)    (2)
Reversal of goodwill
 amortization and write-
 offs due to
impairment
                            g    31       27       28       27    113
Other adjustments
                            h    -        -       (1)       1      -
Tax effects of planned
 dividend payment and other
 tax effects
                            i   (51)       -      (24)     (36)  (110)
Valuation adjustments
 relating to companies
 accounted for
under the equity method
                            j   13       13        6      (85)   (53)
Adjustments in accordance
 with IFRS                        5       80       29      (31)    83
Net income in accordance
 with IFRS                      520      714      366      366  1,966


Including effects of changes in valuation methods in the 2004 German GAAP annual
financial statements

Explanations of the transition in accounting and valuation methods to IFRS The
accounting and reporting of the BASF Group was done according to German GAAP for
the periods up to and including the 2004 annual financial statements.
International Financial Reporting Standards (IFRS) were taken into account to
the greatest extent possible. Due to the EU regulation enacted on July 19, 2002,
BASF, as a listed company, was required to change its reporting. Effective
January 1, 2005, BASF converted its accounting completely to IFRS in compliance
with IFRS 1 "First-time Adoption." The previous year's figures were adjusted
accordingly. Effects of this transition were netted against equity as of January
1, 2004. Changes compared with the prior accounting methodology are described
below:

(a) Capitalization of construction period interest

For qualifiying assets with a lengthy construction period, interest on the
project expenditures up to the point it is placed in service can be capitalized.
Construction period interest was previously not capitalized, in conformance with
German GAAP. According to U.S. GAAP, capitalization of construction period
interest is required. In order to avoid a difference between IFRS and U.S. GAAP,
construction period interest is capitalized in these financial statements. The
amortization of capitalized construction period interest reduced EBIT (first
quarter 2004: EUR17 million, full year 2004: EUR64 million), whereas the
capitalization of construction period interest increased the financial result
(first quarter 2004: EUR17 million, full year 2004: EUR59 million). The assets
of the Chemicals and Plastics segments in particular increased as a result of
the capitalization.

(b) Capitalization of internally generated intangible assets

This item contains costs for software that is internally developed and used.
These costs are to be capitalized and depreciated as an intangible asset
according to IFRS. German GAAP did not allow internally generated intangible
fixed assets to be capitalized. IAS 38 "Intangible Assets" covers the
capitalization of development costs. Due to the stringent capitalization
requirements, there has been no capitalization of development costs to date.

(c) Pension accounting

The accounting treatment of direct pension obligations was already performed in
accordance with IAS 19 "Employee Benefits" in the 2004 annual financial
statements. This led to a new valuation whereby deferred actuarial gains and
losses due to deviations from actuarial assumptions were netted out against
retained earnings. In addition, certain pension obligations were financed via
legally independent plans, especially BASF Pensionskasse VVaG. Since BASF as the
sponsoring entity maintains guarantees, these plans are treated under IFRS as
defined benefit plans, and are to be included in the Group financial statements.
The inclusion of these pension plans was not possible in the German GAAP
financial statements. From now on, they will be accounted for according to IAS
19, retrospective from January 1, 2004. Deferred actuarial gains and losses were
not included in accordance with the option under IFRS 1 "First-time Adoption."
In addition, the financing cost for pensions and other personnel obligations was
netted against the expected returns on plan assets (first quarter 2004: EUR38
million, full year 2004: EUR150 million) and shown in "Other financial results"
rather than before EBIT.

(d) Accounting for provisions

These transition items contain the following differences:

- Under German GAAP, provisions were established for omitted maintenance and
repairs, and for mandated modifications in connection with the operation of
production facilities. According to IFRS, these items are to be expensed as
incurred. - Provisions for certain environmental measures and recultivation
measures have to be capitalized under IFRS in the amount of the expected
expense, thereby increasing the acquisition costs of the affected assets.
According to German GAAP, costs were accrued over the useful life of the asset,
in contrast to IFRS, where such costs are depreciated following capitalization.
- According to German GAAP, provisions were accrued for cyclical overhauls,
which were to be carried out at specific intervals. According to IFRS, the
expenditures are to be capitalized, and depreciated over the interval between
cyclical overhauls. - Long-term provisions are to be discounted according to
IFRS, whereas under German GAAP, they were reported at nominal value.

(e) Accounting for financial instruments

Accounting under IFRS requires derivatives to be accounted for at fair value and
shown as other assets and liabilities on the balance sheet. Provided that the
conditions for hedge accounting are not fulfilled, changes in the fair value
will affect income, just as with corresponding gains and losses in the
underlying instrument. Gains from swaps and forward contracts were accounted for
upon maturity under German GAAP. Unrealized losses, however, were immediately
recognized in income within other provisions. According to German GAAP,
long-term receivables and liabilities in foreign currencies were to be valued at
the initial exchange rate, or at the exchange rate on the date of the financial
statements; the lower rate in the case of receivables, or higher rate in the
case of liabilities. According to IFRS, valuation is always made at the exchange
rate on the date of the financial statements. Available-for-sale securities are
to be valued at their fair value on the date of the financial statements.
Changes in the fair value are shown as a component of equity (Other
comprehensive income) up until the point of disposal of the securities. In
German GAAP financial statements such securities are valued at acquisition cost,
or lower fair value on the date of the financial statements, with valuation
changes immediately affecting income.

(f) Inventory valuation

Since the LIFO method is not allowed under IFRS, inventory valuation method was
changed for the 2004 annual financial statements to the average cost method,
which is allowed under IFRS.

According to German GAAP, raw materials and supplies are to be discounted based
on lower replacement costs. According to IFRS, valuation adjustments may only be
made in the event of a lower net realizable value of the inventories. (g)
Elimination of goodwill amortization, and impairment-only approach Goodwill was
formerly amortized over its expected useful life, according to German GAAP.
According to IFRS 3 "Business Combinations," goodwill is to be examined annually
in accordance with IAS 36 "Impairment of Assets" to determine if a write-down is
necessary. Due to IFRS 1 "First-time Adoption," in conjunction with IFRS 3
"Business Combinations," annual amortization is no longer permitted effective
January 1, 2004. According to impairment tests carried out at the transition
date and at year-end 2004, impairment write-downs were not necessary. In
particular, earnings in the Agricultural Products division improved as a result
of the elimination of goodwill amortization (first quarter of 2004: EUR25
million, full year 2004: EUR96 million).

(h) Other adjustments

These relate primarily to the treatment of investment subsidies that may not be
immediately credited to income according to IFRS, but instead reduce the
acquisition costs of the respective assets, as well as to reclassifications in
the income statement.

(i) Tax effects of planned dividend distributions and other tax effects

According to IFRS, in 2004, based on the updated financial plan and taking into
account a change in German corporate income tax law (Section 8b KStG), deferred
taxes were accrued for the tax effects of planned dividend distributions from
Group companies.

(j) Valuation adjustments for companies accounted for under the equity method

The IFRS valuation adjustments especially concern the capitalization and
amortization of internally developed and used software, as well as construction
period interest for companies accounted for under the equity method. Due to the
valuation adjustments, the book value of these financial assets as of January 1,
2004 was higher under IFRS than under German GAAP. The negative reconciliation
item to net income under ifrs was associated with write-downs on these financial
assets.

Changes in presentation

Presentation of the income statement and balance sheet is made in accordance
with IAS 1 "Presentation of Financial Statements." Certain individual items were
combined for clarity, and detailed separately only in the Notes to the
Consolidated Financial Statements:

- Balance sheet

IFRS requires a differentiation between long and short-term assets, in contrast
to German GAAP, where a breakdown by fixed assets versus current assets was
required. The item "Investments accounted for using the equity method" contains,
in particular, the stake in the Basell joint venture that is scheduled for
divestiture. In equity, the new item "Other Comprehensive Income" is presented
to account for changes that do not affect income. The option under IFRS 1 to net
the translation adjustment against retained earnings and net profit as of
January 1, 2004 was exercised. Liabilities are segmented according to maturity
under IFRS, whereas under German GAAP it was segmented by provisions and
liabilities.

- Income statement

Financing costs for pensions and other personnel obligations netted against the
expected returns from plan assets are presented in an item "Other financial
results" according to IFRS, rather than before EBIT. This item also contains the
capitalization of construction period interest, the discounting of other
provisions as well as changes in fair value of interest derivatives.

Segment reporting in accordance with IFRS


EBITDA      1st Quarter 2nd Quarter  3rd Quarter 4th Quarter
             2004        2004        2004        2004       Year 2004
                  German      German      German      German    German
Million EUR IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP
Chemicals    354   335   459   441   469   419   575   551 1,857 1,746
Plastics     274   265   292   280   293   268   334   337 1,193 1,150
Performance
 Products    294   279   321   305   307   283   581   575 1,503 1,442
Agri-
cultural
 Products &
 Nutrition   381   370   375   362    86    65   251   249 1,093 1,046
 Agri-
cultural
 Products    302   297   306   300    45    33   234   230   887   860
 Fine
Chemicals     79    73    69    62    41    32    17    19   206   186
Oil & Gas    429   426   443   440   582   578   644   631 2,098 2,075
Thereof
 Exploration
and
production   304   300   351   351   463   459   521   506 1,639 1,616
Natural gas
 trading     125   126    92    89   119   119   123   125   459   459
Other      (118)  (95)  (75)  (84)  (58)  (53)  189    99   (62) (133)
           1,614 1,580 1,815 1,744 1,679 1,560 2,574 2,442 7,682 7,326



Income from
 operations
before
special     1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
items        2004        2004        2004        2004       Year 2004
Million           German      German      German      German    German
EUR         IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP
Chemicals    251   245   340   333   367   331   419   425 1,377 1,334
Plastics     155   150   180   172   180   158   237   247   752   727
Performance
 Products    210   196   233   217   216   192   191   185   850   790
Agri-
cultural
 Products &
 Nutrition  300   269   273   241     4   (36)  186   171   763   645
 Agri-
cultural
 Products    254   227   239   212   (11)  (44)  184   161   666   556
  Fine
Chemicals     46    42    34    29    15     8     2    10    97    89
Oil & Gas    343   343   339   339   459   458   512   507 1,653 1,647
Thereof
 Exploration
and
production   249   247   278   279   371   369   418   410 1,316 1,305


Natural
gas
trading       94    96    61    60    88    89    94    97   337   342
Other       (84)  (65)  (99) (105)  (54)  (49)   59   (31) (178) (250)
           1,175 1,138 1,266 1,197 1,172 1,054 1,604 1,504 5,217 4,893



Income from
 operations 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
 (EBIT)     2004        2004        2004        2004       Year 2004
                German      German      German      German      German
Million EUR IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP  IFRS  GAAP
Chemicals    234   228   335   328   338   302   377   383 1,284 1,241
Plastics     154   149   171   163   169   147   200   210   694   669
Performance
Products     203   189   230   214   214   190   481   475 1,128 1,068
Agri-
cultural
Products
&
Nutrition    280   249   268   236   (26)  (66)  136   121   658   540
  Agri-
cultural
Products     234   207   235   208   (29)  (62)  162   139   602   492
     Fine
Chemicals     46    42    33    28     3    (4)  (26)  (18)   56    48
Oil & Gas    343   343   346   346   459   458   495   490 1,643 1,637

Thereof
Exploration
and
production   249   247   285   286   371   369   401   393 1,306 1,295
  Natural
gas
trading       94    96    61    60    88    89    94    97   337   342
Other      (139) (120) (100) (106)  (78)  (73)   90     -  (227) (299)
           1,075 1,038 1,250 1,181 1,076   958 1,779 1,679 5,180 4,856



Research and      1st       2nd       3rd       4th
 development       Quarter   Quarter   Quarter   Quarter
expenses           2004      2004      2004      2004     Year 2004
                      German    German    German    German      German
Million EUR       IFRS GAAP IFRS GAAP  IFRS GAAP  IFRS GAAP  IFRS GAAP
Chemicals          27    28  25    27  26    27  20    22    98   104
Plastics           31    32  33    33  35    36  37    37   136   138
Performance
 Products          55    56  55    56  61    62  46    47   217   221
Agricultural
 Products &
 Nutrition         82    83  85    86  91    92 104   104   362   365
     Agricultural
      Products     61    61  63    64  67    67  81    81   272   273
     Fine
      Chemicals    21    22  22    22  24    25  23    23    90    92
Oil & Gas          25    25  37    37  49    50  88    86   199   198
     Thereof
      Exploration
      and
      production   25    25  37    37  49    50  88    86   199   198
          Natural
           gas
           trading  -     -   -     -   -     -   -     -     -     -
Other              43    36  43    36  47    41  37    34   170   147
                  263   260 278   275 309   308 332   330 1,182 1,173



Assets         1st Quarter   2nd Quarter   3rd Quarter
                2004          2004          2004         Year 2004
                      German        German        German        German
Million EUR    IFRS   GAAP   IFRS   GAAP   IFRS   GAAP   IFRS   GAAP
Chemicals       5,165  4,911  5,373  5,124  5,374  5,105  5,219  5,008
Plastics        6,168  5,985  6,216  6,032  6,426  6,231  6,187  6,044
Performance
 Products       5,073  4,919  5,090  4,934  5,082  4,919  4,538  4,426
Agricultural
 Products &
 Nutrition      7,479  7,320  7,116  6,933  6,549  6,338  6,293  6,118
     Agri-
cultural
Products        6,076  5,969  5,693  5,563  5,211  5,053  4,985  4,849
     Fine
      Chemicals 1,403  1,351  1,423  1,370  1,338  1,285  1,308  1,269
Oil & Gas       3,788  3,598  3,726  3,536  3,940  3,743  4,063  3,876
 Thereof
  Exploration
and
production      1,830  1,761  1,857  1,787  1,897  1,818  1,943  1,829
 Natural
gas
trading         1,958  1,837  1,869  1,749  2,043  1,925  2,120  2,047
Other           8,340  8,336  8,166  8,084  8,732  8,892  8,885  8,444
               36,013 35,069 35,687 34,643 36,103 35,228 35,185 33,916



Additions to fixed 1st       2nd       3rd       4th
 assets            Quarter   Quarter   Quarter   Quarter
                   2004      2004      2004      2004     Year 2004
                      German    German    German    German      German
Million EUR       IFRSGAAP  IFRSGAAP  IFRSGAAP  IFRSGAAP  IFRS  GAAP
Chemicals         175   166 143   141 114   107 169   141   601   555
Plastics          102    98 110   105 102   100 159   151   473   454
Performance
 Products          66    63  68    66  62    58 108    99   304   286
Agricultural
 Products &
 Nutrition         55    53  56    49  60    54  82    76   253   232
     Agricultural
      Products     19    18  17    15  22    20  42    42   100    95
     Fine
      Chemicals    36    35  39    34  38    34  40    34   153   137
Oil & Gas          86    80  58    55 120   109 124   130   388   374
     Thereof
      Exploration
      and
      production   82    77  58    55 105    94  84    91   329   317
          Natural
           gas
           trading  4     3   -     -  15    15  40    39    59    57
Other              34    33  31    30  33    32  46    44   144   139
                  518   493 466   446 491   460 688   641 2,163 2,040



Amortization and  1st       2nd       3rd       4th
 depreciation(A)  Quarter   Quarter   Quarter   Quarter
                   2004      2004      2004      2004     Year 2004
                    German    German    German    German      German
Million EUR       IFRSGAAP  IFRSGAAP  IFRSGAAP  IFRSGAAP  IFRS  GAAP
Chemicals         120   107 124   113 131   117 198   168   573   505
Plastics          120   116 121   117 124   121 134   127   499   481
Performance
 Products          91    90  91    91  93    93 100   100   375   374
Agricultural
 Products &
 Nutrition        101   121 107   126 112   131 115   128   435   506
     Agricultural
      Products     68    90  71    92  74    95  72    91   285   368
     Fine
      Chemicals    33    31  36    34  38    36  43    37   150   138
Oil & Gas          86    83  97    94 123   120 149   141   455   438
     Thereof
      Exploration
      and
      production   55    53  66    65  92    90 120   113   333   321
          Natural
           gas
           trading 31    30  31    29  31    30  29    28   122   117
Other              21    25  25    22  20    20  99    99   165   166
                  539   542 565   563 603   602 795   763 2,502 2,470


Forward-looking statements

This report contains forward-looking statements under the U.S. Private
Securities Litigation Reform Act of 1995. These statements are based on current
expectations, estimates and projections of BASF management and currently
available information. They are not guarantees of future performance, involve
certain risks and uncertainties that are difficult to predict and are based upon
assumptions as to future events that may not prove to be accurate. Many factors
could cause the actual results, performance or achievements of BASF to be
materially different from those that may be expressed or implied by such
statements. Such factors include those discussed in BASF's Form 20-F filed with
the Securities and Exchange Commission. (The Annual Report on Form 20-F is
available on the Internet at www.basf.com.) We do not assume any obligation to
update the forward-looking statements contained in this report.


-  Important Dates


-  August 3, 2005
   Interim Report Second Quarter 2005

-  November 2, 2005
   Interim Report Third Quarter 2005

-  February 22, 2006
   Financial Results 2005

-  May 4, 2006
   Annual Meeting, Mannheim
   Interim Report First Quarter 2006

-  Contacts


-  Corporate Media Relations:
   Michael Grabicki
   Phone:  +49 621 60-99938
   Fax:    +49 621 60-92693
   E-mail: michael.grabicki@basf-ag.de

-  Investor Relations:
   Magdalena Moll
   Phone:  +49 621 60-48230
   Fax:    +49 621 60-92693
   E-mail: investorrelations@basf-ag.de

-  General inquiries:
   Phone:  +49 621 60-0
   Fax:    +49 621 60-42525
   E-mail: info.service@basf-ag.de

-  Internet: www.basf.com

-  BASF Aktiengesellschaft
   67056 Ludwigshafen
   Germany



Publisher:
BASF Aktiengesellschaft
Communications BASF Group
67056 Ludwigshafen
Germany


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