Notes to the consolidated cash flow statement

44. 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 amount of liquidity in the broader sense is reached by adding interest-bearing securities and similar financial investments, amounting to EUR 6,698m (previous year: EUR 6,675m). This latter item includes EUR 675m (previous year: EUR 275m) in fixed-term deposits with agreed terms of four to twelve months.

In connection with the reclassification of non-pool material, the figures from the previous year presented in the following table have been adjusted in the cash flow statement:

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:

Trade working capital consists of changes in the carrying amounts of inventories, trade payables and other liabilities, contract assets and down payments, other current assets and other current liabilities, contract liabilities as well as current deferred income and prepaid expenses.

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.

The expiration of repo agreements for emissions certificates resulted in outflows of EUR 200m in the financial year (previous year: EUR 0m).

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.

A total of 15 passenger aircraft were sold and leased back in the financial year. These transactions generated total inflows of EUR 761m (previous year: EUR 690m from sale-and-leaseback transactions).

Additionally, the sale of the AirPlus Group resulted in a cash inflow of EUR 376m. As part of the transaction, assets amounting to EUR 1,510m (of which EUR 1,439m were current and EUR 71m were non-current) and liabilities amounting to EUR 1,155m (of which EUR 1,137m were current and EUR 18m were non-current) were transferred to the buyer. Of the assets transferred, EUR 263m related to cash and cash equivalents.

Financing cash flow

Financing cash flow also includes capital repayments and interest payments for lease liabilities.

In the financial year, Deutsche Lufthansa AG issued one EUR 750m euro bond and two EUR 500m euro bonds, refinancing two maturing euro bonds with a nominal amount of EUR 500m each as well as three promissory notes with a total nominal amount of EUR 750m. In addition, EUR 381m was raised through aircraft financing, while EUR 527m was repaid.

Financial liabilities and the instruments used to hedge them changed as follows in the financial year:

Changes in financial liabilities in the previous year were as follows: