35 Cash flow statement

Cash flows are presented in the cash flow statement classified into cash flows from operating activities, investing activities and financing activities, irrespective of the balance sheet classification.

Cash flows from operating activities are derived indirectly from earnings before tax. Earnings before tax are adjusted to eliminate noncash expenditures (mainly depreciation, amortization and impairment losses) and income. Other noncash income and expense results mainly from measurement effects in connection with financial instruments and to fair value changes relating to hedging transactions. This results in cash flows from operating activities after accounting for changes in working capital, which also include changes in lease assets and in financial services receivables.

Investing activities include additions to property, plant and equipment and equity investments, additions to capitalized development costs,  and investments in securities and time deposits as well as loans.

Financing activities include outflows of funds from dividend payments and the redemption of bonds, inflows from capital increases and the issuance of bonds, and changes in other financial liabilities. Please refer to the “Equity” section for information on the in-/outflows from the issuance/repayment of hybrid capital contained in the capital contributions.

The changes in balance sheet items that are presented in the cash flow statement cannot be derived directly from the balance sheet, as the effects of currency translation and changes in the consolidated Group are noncash transactions and are therefore eliminated.

In the fiscal year, cash flows from operating activities include interest received amounting to €8,504 million (previous year: €7,188 million) and interest paid amounting to €3,274 million (previous year: €2,471 million). Cash flows from operating activities also include dividend payments (net of withholding tax) received from joint ventures and associates of €2,781 million (previous year: €2,960 million).

Dividends amounting to €3,772 million (previous year: €2,419 million) were paid to Volkswagen AG shareholders.

Time deposits with contractual maturities of more than three months are not classified as cash equivalents. The maximum default risk corresponds to its carrying amount.

The following table shows the classification of changes in financial liabilities into cash and non-cash transactions: