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 cash management activities, amounting to EUR 6,988m (previous year: EUR 6,698m). This latter item includes EUR 1,165m (previous year: EUR 675m) in fixed-term deposits with agreed terms of four to twelve months.

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.

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 cash outflow of EUR 325m in the financial year resulted from the acquisition of a 41% stake in ITA Airways in the form of a capital contribution. The sale of the AirPlus Group resulted in a cash inflow of EUR 376m in the previous year.

A total of 19 passenger aircraft were sold and leased back in the financial year. These transactions generated total inflows of EUR 1,273m (previous year: EUR 761m from sale-and-leaseback transactions).

Cash flow from financing activities

Cash flow from financing activities also includes capital repayments and interest payments for lease liabilities. Cash flows from collateral provided to secure the existing market values of cross-currency swaps are also shown here.

Deutsche Lufthansa AG issued one EUR 600m convertible bond, one EUR 500m hybrid bond and eight borrower’s note loans with a total nominal amount of EUR 380m in the financial year. These were offset by capital repayments of EUR 2,130m, primarily for one bond in the Euro Medium Term Note (EMTN) programme, the redemption of a convertible bond, borrower’s note loans and lease financing.

In addition, EUR 752m was raised through aircraft financing (previous year: EUR 381m), while EUR 618m (previous year: 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: