The Bertelsmann consolidated cash flow statement has been prepared in accordance with IAS 7 and is used to evaluate the Group’s ability to generate cash and cash equivalents. Cash flows from operating activities are presented using the indirect method, whereby EBIT is adjusted for the effects of a non-cash nature, any deferrals or accruals of past or future operating receipts or payments, and items of income or expenses associated with investing cash flows. In addition, cash flows arising from income taxes are classified as cash flows from operating activities as well as other cash flows that are neither investing nor financing.

The management of Group operations of the Bertelsmann Group utilizes indicators that include Operating EBITDA  and is thus before interest and taxes, and depreciation, amortization and Impairment  and special items. Operating results and the resulting cash flow from operating activities should therefore be consistent and comparable. Accordingly, the net balances of interest paid and interest received during the financial year are shown in the cash flow statement as part of financing activities. Contributions to pension plans are a cash outflow reported as a separate item in the cash flow from investing activities. The change in provisions for pensions and similar obligations represents the balance of personnel costs for pensions and similar obligations and company payments for these obligations (further explanations are presented in note 19 “Provisions for Pensions and Similar Obligations”). Other effects include the adjustments of results from investments accounted for using the equity method and adjustments in connection with non-cash income and expenses.

The consolidated cash flow statement includes the effects of changes in foreign currencies and changes in the scope of consolidation. Items in the consolidated cash flow statement thus cannot be compared with changes in items disclosed on the consolidated balance sheet. Investing activities include payments for fixed assets and purchase price payments for consolidated investments acquired and proceeds from the disposal of non-current assets and participations. Further explanations concerning acquisitions made during the financial year are presented in the “Acquisitions and Disposals” section. Disposals during the financial year are also presented separately in that section. Financial debt of €14 million (previous year: €6 million) was assumed during the reporting period.

Cash flow from financing activities includes changes in equity, financial debt and dividend payments affecting cash, as well as interest paid and interest received. The item “Proceeds from/redemption of other financial debt” includes receipts in the amount of €476 million (previous year: €263 million) and payments in the amount of €-194 million (previous year: €-204 million). The receipts include inflows from a bank loan in order to finance a short-term funding requirement of €228 million. The other receipts and payments mainly relate to short-term loans at short maturities and correspondingly high turnaround rates. In addition, the item also includes other changes affecting cash in the amount of €46 million in connection with hedge transactions. The item “Change in equity” amounts to €657 million, of which €505 million relates to purchase price payments in connection with the shareholding increase in Penguin Random House and €128 million relates to purchase price payments including a contribution to SpotX. The increase of the item “Dividends to non-controlling interests and payments to partners in partnerships (IAS 32.18(b))” mainly results from the special dividend distribution of €373 million to the co-shareholder of the publishing group Penguin Random House.

The following table shows the cash changes and non-cash changes of financial debt.