In 2011, WACKER funded its investments entirely out of its own cash flow, despite its high current level of investment spending. At €867.0 million, gross cash inflow from operating activities (gross cash flow) was down 21 percent (2010: €1.1 billion). This was mainly due to our reduced net income of €356.1 million for the year (2010: €497.0 million) and to the marked rise in inventories by year-end 2011. Inventories reduced gross cash flow by €192.1 million (2010: €-46.7 million). Cash inflow from advance payments received was €154.0 million (2010: €165.2 million).
The cash flow from noncurrent investment activities shows that we continue to invest sizable amounts in the ongoing expansion of our production facilities. In 2011, capital expenditures of €781.1 million (2010: €617.3 million) mainly focused on buildings, plants, machinery and infrastructure. Most expenditures were used for production-capacity expansion at WACKER POLYSILICON and for further pyrogenic-silica production facilities in China at WACKER SILICONES. Loans to joint ventures and associates resulted in cash payments totaling €34.9 million.
In 2011, WACKER purchased current and noncurrent securities totaling €187.5 million (2010: €252.2 million) that are allocable to cash flow from investment activities.
Net cash flow (the difference between cash inflow from operating activities and cash outflow due to long-term investment activities before securities, including finance-lease obligations) amounted to €6.2 million. In 2010, net cash flow had reached €421.6 million.
In connection with the refinement of our internal value-management system, net cash flow is to be redefined in 2012. For internal-reporting purposes, noncurrent advance payments received will be regarded as financial liabilities. Based on the new definition, 2011’s net cash flow would have been €-157.4 million.
In 2011, cash inflow from financing activities was €37.4 million (2010: €3.7 million). The dividend payments for 2010 reduced cash flow from financing activities by €159.0 million. In contrast, the net effect of entering into bank liabilities was a cash inflow of €207.9 million (2010: €73.2 million).
Cash and cash equivalents resulting from cash flow and adjusted for exchange-rate fluctuations went down by €71.3 million as of the reporting date. They totaled €473.9 million as of year-end 2011.
