Notes to the cash flow statement

In accordance with Ias 7 (statement of Cash Flows), the consolidated statement of cash flows describes changes in the Group’s liquid funds through cash inflows and outflows during the reporting year.

The item cash and cash equivalents includes cash and cash on hand as well as cash in transit and bank deposits with a remaining term of up to three months.

The cash flow statement distinguishes between changes in cash levels from operating, investing and financing activities. Cash flows from discontinued operations are shown sep- arately where they concern operations to be disposed of. In 2010, the assets and liabilities of the French consumer electronics stores were shown under “assets held for sale” and “liabilities related to assets held for sale”. The reclas- sified assets include cash on hand totalling €29 million. During the reporting year, net cash provided by operating activities of continuing operations amounted to €2,146 million (previous year: €2,514  million). Write-downs concern fixed assets at €1,159 million (previous year: €1,232 million), intan- gible assets at €174 million (previous year: €178 million) and investment properties at €17 million (previous year: €17 mil- lion). on the other hand, write-backs amount to €34 million (previous year: €47 million). The change in net working cap- ital amounts to €–180 million (previous year: €–288 million) and includes changes in inventories, trade receivables and receivables due from suppliers, credit card receivables and prepayments made on inventories in the item “other receiv- ables and assets”. In addition, the item includes changes in trade payables and liabilities to customers and prepayments made on orders included in the item “other liabilities”. The “others” item includes various individual items. a key compo- nent is the change in payroll liabilities at €–117 million (previ- ous year: €69 million). This resulted in a decline in cash flow from continuing operations of €186 million, which is essen- tially due to higher performance-based one-time payments in 2011. In addition, two assets were acquired for resale in Ger- many and Russia for €41 million (previous year: €0 million). During the reporting year, the Group recorded cash outflows of €1,133 million (previous year: €961 million) from investing activities of continuing operations. This includes an outflow

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Galeria Kaufhof

Galeria Kaufhof operates department stores in Germany and Belgium. In Belgium, the sales division operates under the Galeria Inno name. The Galeria department stores offer international assortments and high-quality own brands with a focus on clothing. The stationary business is closely dove- tailed with the online store.

Real Estate

MeTRo pRopeRTIes is MeTRo  GRoUp’s real estate com- pany and manages retail locations in 30 countries. MeTRo pRopeRTIes aims to add value to the Group’s real estate assets over the long term through active portfolio manage- ment. Its activities include planning new locations, the devel- opment and construction of retail properties as well as energy management on behalf of MeTRo GRoUp locations.

additional information on the segments is provided in the management report.

aside from the information on the operating segments listed above, equivalent information is provided on the Metro regions. Here, a distinction is made between the regions Germany, Western europe excluding Germany, eastern europe and asia/ africa.

→ external sales represent sales of the operating segments to third parties outside the Group.

→ Internal sales represent sales between the Group’s operat- ing segments.

→ segment eBITDaR represents eBITDa before rental ex- penses less rental income.

→ segment eBITDa comprises eBIT before write-downs and write-backs on tangible and intangible assets.

→ eBIT as the key ratio for segment reporting describes oper- ating earnings for the period before net financial income and income taxes. Intra-Group rental contracts are shown as operating leases in the segments. The properties are leased at market rates. In principle, location risks and re- coverability risks related to non-current assets are only shown in the segments where they represent Group risks. → segment investments include additions to assets adjusted

for additions due to the reclassification of “assets held for sale” as fixed assets. additions to non-current financial assets represent another exception.

→ segment assets include non-current and current assets. They do not include mostly financial assets according to the balance sheet, income tax items, cash and cash equivalents and assets allocable to discontinued operations.

The reconciliation from segment assets to Group assets is shown in the following table:

→ segment liabilities include non-current and current liabil- ities. They do not include, in particular, financial liabilities according to the balance sheet, income tax items and liabil- ities allocable to discontinued operations.

€ million 31/12/2010 31/12/2011

segment assets 28,064 28,632

non-current and current financial assets 251 198

Cash and cash equivalents 4,799 3,355

Deferred taxes 1,000 904

entitlements to income tax refunds 412 431

other entitlements to tax refunds1 _{356 342}

Receivables from other financial transactions2 _{108 57}

other 77 68

group assets 35,067 33,987

1 _{Included in the balance sheet item “other receivables and assets” (current)}

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The reconciliation from segment liabilities to Group liabilities is shown in the following table:

→ In principle, transfers between segments are made based on the costs incurred from the Group’s perspective.