In fiscal 2008, we generated €8,853 million in cash flows from operating activities. This was 45 % more year on year. American Water’s cash flows are no longer included in figures for 2008, but are still included for 2007. Cash flows rose considerably due to the improved operating result earned by our German power generation business. In addition, at RWE Power, we benefited from the fact that a large part of our expense for CO₂ certificates will not have an effect on profit or loss until 2009. Cash flows from operating activities benefited from another special item resulting from the early fixing of the price for parts of our electricity generation via forward sales on the European Energy Exchange (EEX) in Leipzig, Germany. By concluding these types of hedges, we aim to limit the short-term influence of volatile commodity prices on our earnings. On the balance sheet date, prices on the electricity market for large parts of this generation were lower than the prices established in the forward contracts. Our contracting partners were required to provide us with payments to make up the difference (“variation margins”). Netting them with the variation margins paid by us results in a net cash flow of €1,753 million and led to a corresponding change in working capital.

Cash flows from investing activities (including cash investments) were €3,584 million higher than proceeds from the disposal of assets and the sale of companies. Our cash investments include the transfer of additional assets to RWE Pensionstreuhand e.V. as part of contractual trust arrangements in November 2008. This resulted in a negative cash flow of €1.3 billion. Cash flows from financing activities were -€5,907 million. This was largely attributable to the share buyback (€2.5 billion), the provision of margins and collateral for forward transactions (€2.3 billion), dividend payments (€2.0 billion) and the redemption of two bonds (€1.6 billion). The November 2008 bond issuance (€2.0 billion) had a counteracting effect.

Cash flows from operating activities, minus capital expenditure on property, plant and equipment, result in free cash flow. It amounted to €4,399 million, and was more than double the previous year’s figure. The significant increase in cash flows from operating activities was the only reason.