Earnings; Asset and Financial Position of the Bayer AG Overview Bayer AG performs important management functions for the Group. Business lease agreements between Bayer AG on the one hand, and Bayer Pharma AG and Bayer CropScience AG – the former parent companies of the respective divisions – on the other, have been in place since the start of 2017 and govern the transfer of their operational business to Bayer AG. As a result, the business of Bayer AG – previously confined to a holding company function – has expanded considerably and now also comprises the parent company functions of the two divisions. A comparison between the financial statements for 2017 and those of the previous year is therefore only possible to a limited extent. The financial statements of Bayer AG are prepared in accordance with the German Commercial Code (HGB), Stock Corporation Act (AktG) and German Energy Act (EnWG). Bayer AG supplies third parties with electricity and gas at individual facilities. In accordance with Section 3, No. 18 of the German Energy Act (EnWG), it is therefore classified as an energy provider within the meaning of the EnWG. Furthermore, as the vertically integrated energy provider Currenta GmbH & Co. OHG is a subsidiary of Bayer AG, Bayer AG is classed as a vertically integrated energy provider pursuant to Section 3, No. 38 of the EnWG.