Notes on the Consolidated cash flow statement
45. Notes to cash flow from operating, investing and financing activities
The cash flow statement shows how cash and cash equivalents have changed over the reporting year at the Lufthansa Group. In accordance with IAS 7, cash flows are divided into cash inflows and outflows from operating activities, from investing activities and from financing activities. The cash flows shown include both continuing operations and the discontinued Catering operations. The cash flows attributable to the discontinued segment are presented in the “Profit/loss for the year from discontinued operations” section (↗ Note 16). The amount of liquidity in the broader sense is reached by adding securities that can be liquidated at short notice.
Interest paid and interest income from the corresponding interest rate hedges are netted to avoid overemphasising the items interest income and interest paid in the cash flow statement.
Additional information on the cash flow statement
Cash flow from operating activities
Cash flow from operating activities is derived from profit/loss before income taxes using the indirect method. It is adjusted for non-cash income and expenses as well as changes in trade working capital and in other assets/liabilities that are not attributable to investing or financing activities. Cash flows related to pension obligations are shown entirely in cash flow from operating activities. They also include payments received from the CTA plan assets that can be called up to equalise pension payments.
In the current financial year, the Group primarily recognised the following non-cash income and expenses:
| T141 | SIGNIFICANT NON-CASH INCOME AND EXPENSES | ||
|---|---|---|---|
| in €m | 2023 | 2022 | |
| Result of miscellaneous financial items | 8 | -238 | |
| Write-down on receivables | 151 | 98 | |
| Reversal of write-downs on receivables | -87 | -53 | |
| Income from the reversal of provisions and accruals | -360 | -351 | |
| Adjustments to retirement and transitional benefit systems | 24 | 20 | |
| Total | -264 | -524 | |
Trade working capital consists of changes in the carrying amounts of inventories, trade receivables and payables, contract assets and down payments, other current assets and other current liabilities, contract liabilities and current deferrals and prepaid expenses. In the previous year, the inflow from changes in working capital was exceptionally high due to the strong increase in business activity and the resulting escalation in advance payments for fares.
Other assets/liabilities mainly include corrections between pension expenses and payments, changes in other provisions, accruals/deferrals and corrections for non-cash effects from currency translation.
Repo agreements for emissions certificates resulted in inflows of EUR 200m in the reporting year (previous year, from the expiry of such transactions: outflow of EUR 172m).
Cash flow from investing (and cash management) activities
Cash flows from investing and financing activities are calculated on the basis of payments.
Investing cash flow results mainly from capital expenditure and disinvestments in non-current assets.
Twelve passenger aircraft were sold and leased back in the financial year. Advance payments for the purchase of a cargo aircraft were also sold to a lessor and the aircraft then leased. These transactions resulted in inflows of EUR 690m in total.
Cash flow from financing activities
Financing cash flow now also includes capital repayments and interest payments on lease liabilities.
Companies in the AirPlus group raised financing of EUR 153m in total (previous year: EUR 120m raised) by means of asset-backed securities.
Borrowings and the instruments used to hedge them changed as follows in the financial year:
| T142 | FINANCIAL LIABILITIES 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in €m | As of 31 Dec 2022 | Cash- effective |
Non-cash-effective | 31 Dec 2023 | ||||||
| Addition Group of consolidated companies |
Addition due to lease liabilities |
Currency differences |
Interest added back | Reclassification/Reclassification to held for sale | Changes in fair value |
|||||
| Non-current borrowings | 13,270 | 60 | – | 685 | -151 | 38 | -2,920 | 73 | 11,055 | |
| Current borrowings | 1,881 | -1,589 | – | – | -3 | 104 | 2,467 | 28 | 2,888 | |
| Other borrowings1) | 21 | -8 | – | – | – | -9 | – | 4 | ||
| Total financial liabilities | 15,172 | -1,537 | – | 685 | -154 | 142 | -462 | 101 | 13,947 | |
| Interest rate swaps and currency futures used for hedging – assets |
-155 | -37 | – | – | – | – | 99 | -93 | ||
| Interest rate swaps and currency futures used for hedging – liabilities |
218 | – | – | – | – | – | 52 | 270 | ||
| 1) Mainly relate to bank overdrafts. | ||||||||||
Changes in borrowings in the previous year were as follows:
| T142 | FINANCIAL LIABILITIES 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in €m | 31 Dec 2021 | Cash- effective |
Non-cash-effective | 31 Dec 2022 | ||||||
| Addition Group of consolidated companies |
Addition due to lease liabilities1 |
Currency differences |
Interest added back | Reclassification/Reclassification to held for sale | Changes in fair value |
|||||
| Non-current borrowings | 15,041 | 638 | 2 | 448 | 191 | 36 | -2,733 | -353 | 13,270 | |
| Current borrowings | 1,629 | -2,517 | 32 | – | 9 | 2 | 2,733 | -7 | 1,881 | |
| Other borrowings1) | 19 | 1 | – | 1 | – | – | – | 21 | ||
| Total financial liabilities | 16,689 | -1,878 | 34 | 448 | 201 | 38 | – | -360 | 15,172 | |
| Interest rate swaps and currency futures used for hedging – assets |
-181 | 70 | – | – | – | – | -44 | -155 | ||
| Interest rate swaps and currency futures used for hedging - liabilities |
27 | – | – | – | – | – | 191 | 218 | ||
| 1) Mainly relate to bank overdrafts. | ||||||||||