Cash flow


EUR 2.4bn cash flow from operating activities generated

The fall in profits is mirrored in the Group’s cash flow from operating activities. This came to EUR 2.4bn, which was EUR 636m or 21.3 per cent below the previous year’s record figure. Based on a EUR 688m drop in the profit/loss before income taxes, non-cash expenses of EUR 73m from changes in the market value of financial derivatives (previous year: income of EUR 7m) were eliminated when calculating cash flow because they do not affect the cash flow from operating activities. After adjustment for non-cash depreciation and amortisation as well as for the proceeds of non-current asset disposals, which are attributed to investing activities, cash flow improved further by EUR 310m. By contrast, EUR 155m more was spent on income tax payments than in the previous year. However, the change in working capital depressed cash flow from operating activities by EUR 149m compared with the previous year. As of the financial year 2011 the calculation of cash flow from operating activities also includes retirement benefits paid to former staff from external pension funds (EUR 80m), which are included in changes in working capital. The figures for the previous year have been adjusted in accordance with the presentation in the reporting year. This resulted in a cash flow from continuing operations of EUR 2.5bn. Cash flow from discontinued operations came to EUR –161m.

Capital expenditure, cash flow from operating activities and depreciation and amortisation (bar chart)

Free cash flow substantially positive at EUR 713m

Gross capital expenditure for the Lufthansa Group came to EUR 2.6bn. This includes the primary, secondary and financial investment described above as well as repairable spare parts for aircraft.

Asset disposals, including the disposal of non-consolidated shareholdings, gave an income of EUR 465m in 2011. The sale of aircraft accounted for EUR 208m of the total, securities disposals for EUR 130m, repayments received for lending for EUR 48m and the sale of intangible assets for EUR 76m.

Interest and dividend income went up by 17.0 per cent to EUR 454m. This brought total net cash used for investing activities to EUR 1.6bn (previous year: EUR 1.5bn).

After deducting this net cash used for investing activities, free cash flow for the financial year 2011 was substantially positive at EUR 713m (previous year: EUR 1.5bn). The internal financing ratio, that is the proportion of capital expenditure financed from cash flow, came to 91.8 per cent (previous year: 131.6 per cent).

Cash flow from operating activities and free cash flow (bar chart)

Targeted reduction of financial liabilities

In the financial year 2011 we retained our policy of funding our pension obligations flexibly over the medium term. A total of EUR 736m was committed to further funding in Germany and abroad. The purchase of securities for EUR 1.4bn and the sale of securities for EUR 1.9bn resulted in a net cash inflow of EUR 535m (previous year: net outflow of EUR 1.3bn).

The balance of financing activities was a net cash outflow of EUR 1.4bn (previous year: EUR 300m). Cash outflows included dividends paid, including profits attributable to minority interests (EUR 296m), as well as interest paid (EUR 449m) and scheduled repayment of debt amounting to EUR 1.0bn. In addition, the good liquidity position in the first half-year was used to optimise the financial structure and pay back five borrower’s note loan tranches worth a total of EUR 407m ahead of schedule. In exchange, in 2011 a total of EUR 740m was successfully raised from new borrowing at favorable conditions, see chapter “Financing”, and EUR 5m received in capital contributions from minority shareholders.

Cash and cash equivalents at EUR 4.0bn

Cash and cash equivalents declined by EUR 210m in the reporting year to around EUR 887m. This includes an increase of EUR 9m in cash and cash equivalents due to exchange rate movements. Cash of EUR 46m was shown in the balance sheet under assets held for sale. Total liquid funds (including current securities) came to EUR 4.0bn (previous year: EUR 5.4bn).

Abbreviated cash flow statement of the Lufthansa Group

 

2011
in €m

2010
in €m

Change
in %

Profit/loss before income taxes

446

1,134

–60.7

Depreciation and amortisation/reversals

1,780

1,659

7.3

Net proceeds on disposal of non-current assets

–25

–214

88.3

Net interest/result from equity investments

217

243

–10.7

Income tax payments

–265

–110

–140.9

Measurement of financial derivatives through profit or loss

73

–7

 

Change in working capital

291

440

–33.9

Cash flow from continuing operations

2,517

3,145

–20.0

Cash flow from discontinued operations

–161

–153

–5.2

Cash flow from operating activities

2,356

2,992

–21.3

 

 

 

 

Investments and additions to repairable spare parts

–2,562

–2,349

–9.1

Purchase/disposal of shares/non-current assets

465

511

–9.0

Dividends and interest received

454

388

17.0

Net cash from used in investing activities

–1,643

–1,450

–13.3

Free cash flow

713

1,542

–53.8

 

 

 

 

Purchase/disposal of securities/fund investments

535

–1,345

 

 

 

 

 

Capital increase

5

– 

Non-current borrowing and repayment of non-current borrowing

–681

169

 

Dividends paid

–296

–18

 

Interest paid

–449

–451

0.4

Net cash from used in investing activities

–1,421

–300

 

 

 

 

 

Changes due to currency translation differences

9

64

–85.9

Cash included in assets held for sale

–46

– 

Cash and cash equivalents 1.1.

1,097

1,136

–3.4

Cash and cash equivalents 31.12.

887

1,097

–19.1

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