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 are divided into those relating to operating activities, investing activities and financing activities. Cash flows from operating activities are presented using the indirect method, with Group earnings before interest and taxes adjusted for non-cash items. Income and expenses relating to cash flows from investing activities are also eliminated.
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 balance of interest paid and interest received during the financial year is 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 the section “Provisions for Pensions and Similar Obligations”).
Other effects include the adjustments of gains and losses from the disposal of assets, 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 €6 million (previous year: €41 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 bonds and promissory notes” mainly includes the payments received from the publicly listed bond of €500 million issued in April and the promissory note of €200 million issued in a private placement in June 2016. The item “Redemption of bonds and promissory notes” includes the on-time repayment for the bond due in September 2016 in the amount of €1,000 million, of which €214 million had already been repaid ahead of time in financial year 2013. The item “Proceeds from/redemption of other financial debt” includes receipts in the amount of €263 million (previous year: €222 million) and payments in the amount of €-204 million (previous year: €-377 million).