33 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 insruments and to fair value changes relating to hedging transactions (see note 9). 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 loans.

Financing activities include outflows of funds from dividend payments and redemption of bonds, inflows from the capital increase and issuance of bonds, and changes in other financial liabilities. Please refer to note 24 for information on the inflows from the issuance of hybrid capital amounting to €2,457 million (previous year: from the issuance of new preferred shares in the amount of €1,980 million and the issuance of hybrid capital in the amount of €2,952 million) 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 2015, cash flows from operating activities include interest received amounting to €6,619 million (previous year: €6,129 million) and interest paid amounting to €2,440 million (previous year: €3,397 million). In addition, the share of profits and losses of equity-accounted investments (note 7) includes dividends amounting to €4,683 million (previous year: €2,997 million).

Dividends amounting to €2,294 million (previous year: €1,871 million) were paid to Volkswagen AG shareholders.

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