Maturity Analysis of Selected Financial Assets

Maturity Analysis of Selected Financial Assets  

Not individually impaired as of the reporting date and past due by:
in € millionsNeither
impaired
nor past
due on the
reporting
date
< 1 month1 to 3
months
3 to 6
months
6 to 12
months
> 12
months
Gross value
of accounts
receivable
individually
impaired
Loans7148
Securities and financial assets174
Trade receivables2,508412142522722184
Receivables from participations24114
Other selected receivables722161312337
Balance as of 12/31/20163,342429155532926277
Loans4245
Securities and financial assets184
Trade receivables2,451529145753339235
Receivables from participations332214
Other selected receivables52083111428
Balance as of 12/31/20153,064539150773453316

No impairment losses were recognized for unsettled receivables not yet due as of the end of the reporting period, as there was no indication of default.

Reconciliation of Changes in Impairment in Accordance with IFRS 7  

in € millionsBalance as
of 1/1
AdditionsUsageReversalChange of
consolidation
scope
Exchange
rate effect
Balance as
of 12/31
Loans(46)(6)22(48)
Trade receivables(242)(62)128843(197)
Receivables from participations(3)(3)
Sundry financial receivables(28)(17)12(42)
Total 2016(319)(85)139263(290)
Loans(100)(7)5912(1)(46)
Trade receivables(226)(65)957(6)(11)(242)
Receivables from participations(3)(3)
Sundry financial receivables(49)(3)177(28)
Total 2015(375)(78)8565(4)(12)(319)

The carrying amount of all receivables, loans and securities constitutes the Bertelsmann Group’s maximum default risk.

The following table presents the contractually fixed undiscounted Cash Flows of the financial liabilities for settlement. The figures are based on undiscounted cash flows at the earliest date at which the Bertelsmann Group can be held liable for payment.

Contractual Maturity Analysis of Financial Liabilities  

  Undiscounted cash flows
in € millionsCarrying
amount
Up to 1 year1 to 5 yearsOver 5 yearsTotal
Profit participation capital413413413
Fixed interest bonds and promissory notes3,5843603,2503,610
Floating rate bonds and promissory notes100100100
Liabilities to banks1039112103
Lease liabilities5194857
Other financial debt160136195160
Trade payables3,7643,557184233,764
Liabilities to participations141414
Derivative financial instruments66561066
Sundry financial payables85568012253855
Balance as of 12/31/20169,1104,5438553,7449,142
Profit participation capital413413413
Fixed interest bonds and promissory notes3,6737861602,7503,696
Floating rate bonds and promissory notes100100100
Liabilities to banks94821294
Lease liabilities64106272
Other financial debt144122175144
Trade payables3,7463,563171123,746
Liabilities to participations888
Derivative financial instruments3428634
Sundry financial payables86367711373863
Balance as of 12/31/20159,1395,2766413,2539,170

Current cash outflows from financial obligations are offset by planned cash inflows from receivables and other financial assets. To cover current cash flows, Bertelsmann SE & Co. KGaA also has adequate financial reserves in the amount of the cash and cash equivalents and unutilized credit facilities in place at the end of the reporting period.

The following table presents the remaining terms of the contractual amounts to be exchanged in a derivative financial instrument for which gross cash flows are exchanged:

Liabilities from Derivatives with Gross Settlement  

 Remaining term of liabilities
in € millionsUp to 1 year1 to 5 yearsOver 5 years
Cash outflow(2,256)(127)
Cash inflow2,195118
Balance as of 12/31/2016(61)(9)
Cash outflow(1,550)(160)
Cash inflow1,520155
Balance as of 12/31/2015(30)(5)

Based on the remaining contractual terms of its financial liabilities at the end of the reporting period, the Bertelsmann Group will have to make the following future interest payments:

Future Undiscounted Interest Payments  

 Undiscounted interest payments
in € millionsUp to 1 year1 to 5 yearsOver 5 yearsTotal
Profit participation capital4518145271
Bonds and promissory notes85332290707
Liabilities to banks314
Lease liabilities257
Other financial debt3317
Balance as of 12/31/2016138522336996
Profit participation capital4518190316
Bonds and promissory notes116313338767
Liabilities to banks415
Lease liabilities279
Other financial debt314
Balance as of 12/31/20151705034281,101

Carrying Amounts and Measurement Methods by Measurement Category

Assets  

in € millionsCategory in accordance with IAS 39Balance as of 12/31/2016Category in accordance with IAS 39Balance as of 12/31/2015
Loans and receivablesAvailable-for-saleFinancial assets initially recognized at fair value through profit or lossFinancial assets held for tradingDerivatives with hedge relation Loans and receivablesAvailable-for-saleFinancial assets initially recognized at fair value through profit or lossFinancial assets held for tradingDerivatives with hedge relation 
MeasurementAt amortized costAt costFair value recognized in equityFair value recognized in profit or lossFair value recognized in profit or loss At amortized costAt costFair value recognized in equityFair value recognized in profit or lossFair value recognized in profit or loss 
Loans71714141
Investments in affiliates312151414
Other investments5436642027438312
Securities and financial assets1313171611018
Derivative financial instruments68631318152133
Trade receivables3,1503,1503,2653,265
Receivables from participations27273939
Sundry financial receivables752752549549
Cash1,1921,1921,2091,209
Other securities < 3 months181181101101
5,373583811368635,9565,205294391081525,681

Other investments include mainly the minority stakes in other entities and so-called fund-in-fund investments purchased by the Bertelsmann Investments division. As a rule, these financial instruments are measured at fair value, and the gains and losses from fluctuations in fair value are recognized in other comprehensive income with deferred taxes taken into consideration. The fair value measurement of fund-infund investments is based on the valuations of the external management as presented in regular reporting and taking into account a fungibility discount. When possible, measuring fair value of minority stakes in other entities is based, on observable prices obtained as part of the most recently implemented qualified financing rounds taking into account life and development cycles of the entity.

Certain investments in affiliates and other investments that are classified as available-for-sale within financial assets are measured at cost as they do not have a quoted price on an active market and a reliable estimate of the fair value is not possible. No plan has been made to sell significant holdings of the other available-for-sale investments in the near future. For all other financial assets and financial liabilities, their carrying amount represents a reasonable approximation of fair value.

Equity and Liabilities  

in € millionsCategory in accordance with IAS 39Balance as of 12/31/2016Category in accordance with IAS 39 Balance as of 12/31/2015
Financial
liabilities
Financial liabilities initially recognized at fair value through profit or lossFinancial liabilities held for tradingDerivatives with hedge relationPayables out of scope of IAS 39 Financial
Liabilities
Financial liabilities initially recognized at fair value through profit or lossFinancial liabilities held for tradingDerivatives with hedge relationPayables out of scope of IAS 39 
MeasurementAt amortized costFair value recognized in profit or lossFair value recognized in profit or loss At amortized costFair value recognized in profit or lossFair value recognized in profit or loss 
Profit participation capital413413413413
Bonds and promissory notes3,6843,6843,7733,773
Liabilities to banks1031039494
Lease liabilities51516464
Other financial debt160160144144
Trade payables3,7643,7643,7463,746
Liabilities to participations141488
Derivative financial instruments6336629534
Sundry financial payables8074885581845863
8,94548633519,1108,99645295649,139

Financial Assets Measured at Fair Value Categorized Using the Fair Value Measurement Hierarchy

Financial Assets Measured at Fair Value Categorized Using the Fair Value Measurement Hierarchy  

in € millionsLevel 1:
Quoted prices in active markets
Level 2:
Observable market data
Level 3:
Unobservable market data
Balance as of
12/31/2016
Financial assets initially recognized at fair value through profit or loss1313
Available-for-sale financial assets91371381
Primary and derivative financial assets held for trading65368
Derivatives with hedge relation6363
9142374525
in € millionsLevel 1:
Quoted prices in active markets
Level 2:
Observable market data
Level 3:
Unobservable market data
Balance as of
12/31/2015
Financial assets initially recognized at fair value through profit or loss1010
Available-for-sale financial assets813039
Primary and derivative financial assets held for trading75681
Derivatives with hedge relation5252
813836182

It is possible to allocate the financial instruments measured at fair value in the balance sheet to the three levels of the fair value hierarchy by category based on the table “Carrying Amounts and Measurement Methods by Measurement Category.”

Financial Assets Measured at Fair Value Based on Level 3  

in € millionsAvailable-for-sale
financial
assets
Primary and
derivative
financial
assets held for
trading
Total
Balance as of 1/1/201630636
Total gain (+) or loss (-)(3)(3)
– in profit or loss(3)(3)
– in other comprehensive income
Purchases22
Transfers out of/into level 3 (including first-time classification on level 3)339339
Balance as of 12/31/20163713374
Gain (+) or loss (-) for assets still held at the end of the reporting period(3)(3)
in € millionsAvailable-for-
sale financial
assets
Primary and
derivative
financial
assets held for
trading
Total
Balance as of 1/1/20153434
Total gain (+) or loss (-)(5)61
– in profit or loss66
– in other comprehensive income(5)(5)
Purchases11
Transfers out of/into level 3 (including first-time classification on level 3)
Balance as of 12/31/201530636
Gain (+) or loss (-) for assets still held at the end of the reporting period66

In the financial year 2016, various investments held by the Bertelsmann Investments division were recognized at fair value for the first time (further details are presented in note 13 “Other Financial Assets”). The difference between the carrying amount, which generally equals the acquisition costs, and fair value was recognized in equity under other comprehensive income. The addition of fair value to level 3 is shown in the table above.

Financial Liabilities Measured at Fair Value Categorized Using the Fair Value Measurement Hierarchy  

in € millionsLevel 1:
Quoted prices in active markets
Level 2:
Observable market data
Level 3:
Unobservable market data
Balance as of
12/31/2016
Financial liabilities initially recognized at fair value through profit or loss4848
Primary and derivative financial liabilities held for trading6363
Derivatives with hedge relation33
6648114
in € millionsLevel 1:
Quoted prices in active markets
Level 2:
Observable market data
Level 3:
Unobservable market data
Balance as of
12/31/2015
Financial liabilities initially recognized at fair value through profit or loss4545
Primary and derivative financial liabilities held for trading2929
Derivatives with hedge relation55
344579

Financial Liabilities Measured at Fair Value Based on Level 3  

in € millionsFinancial liabilities initially recognized at fair value through profit or lossTotal
Balance as of 1/1/20164545
Total gain (-) or loss (+)(12)(12)
– in profit or loss(12)(12)
– in other comprehensive income
Purchases2222
Issues
Settlements(7)(7)
Transfers out of/into level 3
Balance as of 12/31/20164848
Gain (-) or loss (+) for liabilities still held at the end of the reporting period(5)(5)
in € millionsFinancial liabilities initially recognized at fair value through profit or lossTotal
Balance as of 1/1/20154343
Total gain (-) or loss (+)(2)(2)
– in profit or loss(4)(4)
– in other comprehensive income22
Purchases55
Settlements(1)(1)
Transfers out of/into level 3
Balance as of 12/31/20154545
Gain (-) or loss (+) for liabilities still held at the end of the reporting period

Level 1:
The fair value of the existing financial instruments is determined on the basis of stock exchange listings at the end of the reporting period.

Level 2:
For measuring the fair value of unlisted derivatives, Bertelsmann uses various financial methods reflecting the prevailing market conditions and risks at the respective balance sheet dates. Irrespective of the type of financial instrument, future cash flows are discounted at the end of the reporting period based on the respective market interest rates and interest rate structure curves at the end of the reporting period. The fair value of forward exchange transactions is calculated using the average spot prices at the end of the reporting period and taking into account forward markdowns and markups for the remaining term of the transactions. The fair value of interest rate derivatives is calculated on the basis of the respective market rates and interest rate structure curves at the end of the reporting period. The fair value of forward commodity transactions is derived from the stock exchange listings published at the end of the reporting period. Any incongruities to the standardized stock exchange contracts are reflected through interpolation or additions.

Level 3:
If no observable market data is available, measuring fair values is based primarily on cash flow-based valuation techniques. As a rule, qualified financing rounds are used for minority stakes in the Bertelsmann Investments division.

The valuation of financial assets and financial liabilities according to level 2 and level 3 requires management to make certain assumptions about the model inputs including cash flows, discount rate and credit risk, as well as the life and development cycle of start-up investments. During the financial year 2016, no reclassifications were performed between levels 1, 2 and 3.

Net Result from Financial Instruments

Net Result from Financial Instruments  

in € millionsLoans and
receivables
Available-
for-sale
financial
assets
Financial
assets
initially
recognized
at fair value
through
profit or
loss
Financial
liabilities at
amortized
cost
Financial
liabilities
initially
recognized
at fair value
through
profit or
loss
Derivatives
with hedge
relation
Financial
instruments
held for
trading
Other
currency
translation
differences
From dividends14
From interest9(117)(3)
From impairment5(18)
From fair value measurement124(3)
From currency translation differences39(29)
From disposal/derecognition(29)7223
Net income 2016(15)68(94)12433(29)
From dividends17
From interest12(123)(2)
From impairment(17)(12)
From fair value measurement416
From currency translation differences(97)91
From disposal/derecognition(20)2312
Net income 2015(25)28(111)41(93)91

Other currency translation differences consist of the exchange rate effects of the “Loans and receivables” and “Financial liabilities at amortized cost” categories.

Financial assets and liabilities are offset on the balance sheet if master netting agreements or similar agreements allow the Bertelsmann Group and the counterparty to reach settlement on a net basis. Settlement on a net basis is thus legally valid both as part of ordinary business activities and also in the event of payment default by one of the parties. In addition, Bertelsmann purchases financial derivatives that do not meet the criteria for offsetting on the balance sheet as future events determine the right to offset. As in the previous year, in general, the requirements for offsetting the financial instruments reported on the balance sheet are not met so that no material offsetting was carried out as of December 31, 2016.

Financial Derivatives

Bertelsmann uses standard market financial derivatives, primarily unlisted (OTC) instruments. These include, in particular, forward agreements, currency swaps, currency options, interest rate swaps and individual commodities forwards. Transactions are entered into solely with banks with a high credit Rating. As a rule, the Central Financial Department’s transactions are only performed with a group of banks approved by the Executive Board. The nominal volume is the total of all underlying buying and selling amounts of the respective transactions.

The majority of the financial derivatives at the end of the reporting period (nominal volume €3,682 million) are used to hedge against exchange rate risks from intercompany financing activities. These financial derivatives account for a total of €2,144 million (58 percent) as of the end of the reporting period. A total of €1,538 million (42 percent) is due to financial derivatives used to hedge currency risks from operating business as of the end of the reporting period. Financial derivatives are also used to hedge against interest rate risks from cash and cash equivalents and financing. No financial derivatives were purchased for speculative purposes.

All relationships between hedging instruments and hedged items in addition to its risk management objectives and strategies in connection with the various hedges are documented. This method includes linking all derivatives used for hedging purposes to the underlying assets, liabilities, firm commitments and forecasted transactions. Furthermore, the Bertelsmann Group assesses and documents the degree to which changes in the fair values or cash flows of hedged items are effectively offset by changes in the corresponding hedging instruments, both when the hedges are initiated and on an ongoing basis.

Nominal Volume and Fair Values of Financial Derivatives  

 12/31/2016
Nominal volumeFair values
in € millions< 1 year1 to 5 years> 5 yearsTotal
Currency derivatives
Forward contracts and currency swaps2,942699413,68262
Interest rate derivatives
Interest rate swaps
Other derivative financial instruments3
2,942699413,68265
 12/31/2015
Nominal volumeFair values
in € millions< 1 year1 to 5 years> 5 yearsTotal
Currency derivatives 
Forward contracts and currency swaps3,1495163,66594
Interest rate derivatives
Interest rate swaps5252(1)
Other derivative financial instruments776
3,2085163,72499

The option offered in IFRS 13.48 (net risk position) is used for measuring the fair value of financial derivatives. In order to identify the credit exposure from financial derivatives, the respective net position of the fair values with the contractual partners is used as a basis, as these are managed based on a net position in view of their market or credit default risks. Currency forwards are used to hedge the exchange rate risk relating to the purchase of program rights and output deals for the TV business. Bertelsmann hedges between 80 and 100 percent of the future cash flows from the purchase of program rights in foreign currency, which represent a fixed obligation (within one year) or a future transaction with a high probability of occurrence, and between 10 and 80 percent of the longer-term (two to five years) transactions expected in the future under output deals. The derivatives used for this purpose are recognized as hedging instruments in connection with cash flow hedges. The effective portion of changes in the fair value of cash flow hedges is recognized in other comprehensive income until the effects of the hedged underlying transaction affect profit or loss or until a basis adjustment occurs. In the financial year 2016, changes in the fair value of cash flow hedges amounted to €14 million (previous year: €34 million) related to previous-year hedging relationships and €25 million (previous year: €2 million) related to new hedging relationships. The amount of €-33 million relating to other comprehensive income (previous year: €-26 million) was reclassified to the income statement. These are amounts before tax. The portion remaining in other comprehensive income at December 31, 2016, will thus mainly impact the income statement in the next years. The ineffective portion of the cash flow hedges in the amount of €5 million (previous year: €3 million) is recognized under the items “Other financial expenses” and “Other financial income.”

The following table provides an overview of the carrying amounts of the derivative financial instruments, which correspond to their fair values. A distinction is made between derivatives that are included in an effective hedging relationship in accordance with IAS 39 and those that are not.

Derivative Financial Instruments  

in € millionsCarrying amount as
of 12/31/2016
Carrying amount as
of 12/31/2015
Assets
Forward contracts and currency swaps
– without hedge relation6575
– in connection with cash flow hedges6352
Interest rate swaps
– without hedge relation
– in connection with cash flow hedges
Other derivative financial instruments without hedge relation36
Equity and liabilities
Forward contracts and currency swaps
– without hedge relation6328
– in connection with cash flow hedges35
Interest rate swaps
– without hedge relation1
– in connection with cash flow hedges
Other derivative financial instruments without hedge relation

Financial Instruments
Financial Risk Management

The Bertelsmann Group is exposed to various forms of financial risk through its international business operations. Above all, this includes the effects of exchange and interest rate movements. Bertelsmann’s risk management activities are designed to effectively mitigate these risks.

The Executive Board establishes basic risk management policy, outlining general procedures for hedging currency and interest rate risk and the utilization of derivative financial instruments. The Corporate Treasury and Finance Department advises subsidiaries on operating risk and hedges risks using derivative financial instruments as necessary. However, subsidiaries are not obliged to use the services provided by this department for their operating risks. Some subsidiaries, such as RTL Group in particular, have their own finance departments. They report their hedge transactions to the Corporate Treasury and Finance Department each quarter. Further information on financial market risks and financial risk management is presented in the Combined Management Report.

Exchange Rate Risk

Bertelsmann is exposed to exchange rate risk in various currencies. Its subsidiaries are advised, but not obliged, to hedge themselves against exchange rate risks in the local reporting currency by signing forward agreements with banks that have a high credit rating. Loans within the Bertelsmann Group that are subject to exchange rate risk are hedged using derivatives.

A number of subsidiaries are based outside the eurozone. The resulting translation risk is managed through the relationship of economic financial debt to opeRating EBITDA of key currency areas. Over the long term, the Group aims to achieve a reasonable relationship between financial debt and results of operations. Bertelsmann’s focus is on the maximum Leverage Factor permitted for the Group.

Interest Rate Risk

There are interest rate risks for interest-bearing assets and financial debt. Interest rate risk in the Bertelsmann Group is analyzed centrally and managed on the basis of the Group’s planned net financial debt. A key factor in this management is the Group’s interest result over time and its sensitivity to interest rate changes. The Group aims for a balanced relationship between floating rates and long-term fixed interest rates depending on the absolute amount, forecast performance of the interest-bearing liability and interest level. This is implemented using underlying and derivative financial instruments for control.

Liquidity Risk

Liquidity risks may arise through a lack of rollover financing (liquidity risk in a narrow sense), delayed receipt of payment and unforeseen expenditure (budgeting risk). Budgeting risk is determined by comparing deviations in actual spending with budget and reserve amounts. In a narrow sense, liquidity risk depends on the volume of debt due within a given period.

Liquidity risk is monitored on an ongoing basis with reference to the budget for current and future years. New and unplanned transactions (e.g., acquisitions) are continuously tracked. The maturity profile of financial assets and liabilities is also reconciled on a regular basis. Budget risks are managed through effective cash management and constant monitoring of projected versus actual cash flows. Debt maturities are also diversified to ensure that rising financing costs do not have a short-term impact. Credit facilities are also maintained for unplanned expenditures.

Counterparty Risk

The Bertelsmann Group is exposed to default risks in the amount of the invested cash and cash equivalents and the positive fair value of the derivatives in its portfolio. Transactions involving money market securities and other financial instruments are exclusively conducted with a defined group of banks with a high credit rating (“core banks”). The credit ratings of core banks are constantly monitored and classified on the basis of quantitative and qualitative criteria (rating, CDS spreads, stock price, etc.). Counterparty limits determined on the basis of credit ratings refer to cash holdings and positive fair values; the use of limits is monitored regularly. Funds are invested in very short-term portfolios in some cases to preserve flexibility in the event of credit rating changes.

In addition, some tri-party transactions with banks have been concluded to reduce default risks. These tri-party transactions are collateralized investments, and the banks provide predefined securities as collateral. As in the previous year, at the end of the reporting period, no tri-party transactions were outstanding and no collateral had been provided. Processing these transactions and managing and valuing the collateral are performed by a clearing agent. Default risks arising from trade receivables are partially mitigated through credit insurance coverage. The Bertelsmann Group has obtained credit collateralization in the amount of €610 million for these receivables (previous year: €541 million).

Capital Management

The financing guidelines adopted by the Bertelsmann Group are designed to ensure a balance between financing security, return on equity and growth. The Group’s net indebtedness is based specifically on the requirements for a credit rating of “Baa1/BBB+.” Financial management at Bertelsmann is conducted using quantified financing objectives that are a central factor in ensuring the Group’s independence and capacity to act. These objectives, as elements of the planning process and regular monitoring, are broadly defined performance indicators. The key performance indicator for limiting economic debt within the Bertelsmann Group is a maximum leverage factor of 2.5. On December 31, 2016, the leverage factor was 2.5 (previous year: 2.4). In addition, the Coverage Ratio is to remain above 4. The coverage ratio amounted to 9.7 on December 31, 2016 (previous year: 10.1). The equity ratio is not to fall below 25 percent of total assets. Management of the equity ratio is based on the definition of equity in IFRS. Although minority interests in partnerships represent equity in financial terms, they are classified as debt for accounting purposes. In the financial year 2016, the equity ratio was 41.6 percent (previous year: 41.2 percent), meeting the internal financial target set by the Group.

Interest Rate and Exchange Rate Sensitivity

For the analysis of interest rate risk, a distinction is made between cash flow and present value risks. Financial debt, cash and cash equivalents and interest rate swaps with variable interest terms are subject to a greater degree of cash flow risk, as changes in market interest rates impact the Group’s interest result almost immediately. In contrast, medium- and long-term interest rate agreements are subject to a greater degree of present value risk. The accounting treatment of present value risks depends on the respective financial instrument or a hedging relationship documented in conjunction with a derivative (micro-hedge).

Upon initial recognition, originated financial debt is measured at fair value less transaction costs. Subsequent measurement is based on amortized cost. Changes in fair value are limited to opportunity effects, as changes in interest rates have no effect on the balance sheet or the income statement. The recognition of originated financial debt at fair value is only permitted for transactions for which a micro-hedge is documented in accordance with IAS 39 in conjunction with the conclusion of an interest rate or exchange rate hedge transaction involving derivatives. In this case, changes in the fair value of the respective items are recognized in the income statement in order to substantially balance out the offsetting effects of the fair value measurement of the related derivatives.

For derivative financial instruments, the effects of changes in interest rates are recognized in the income statement. In the case of documented hedging relationships (cash flow hedges), however, these effects are taken directly to equity. The cash flow or present value risks existing at the end of the reporting periods are analyzed using a sensitivity calculation as an after-tax observation. A parallel shift in the interest rate curve of +/-1 percent is assumed for all major currencies. The analysis is performed on the basis of financial debt, cash and cash equivalents and derivatives at the end of the reporting period. The results are shown in the following table:

Sensitivity Analysis of Cash Flow and Present Value Risks  

 12/31/201612/31/2015
in € millionsShift +1%Shift -1%Shift +1%Shift -1%
Cash flow risks (income statement)8(8)5(5)
Present value risks (income statement)4(4)
Present value risks (equity)

The analysis of exchange rate sensitivity includes the Group’s financial debt and operating transactions at the end of the reporting period and the hedging relationships entered into (forward agreements and options). The calculation is performed for the unsecured net exposure on the basis of an assumed 10 percent write-up of the euro versus all foreign currencies and is presented after tax. A uniform devaluation of foreign currencies would have resulted in a change in the carrying amount recognized in profit or loss of €-11 million (previous year: €-9 million). Thereof, €-6 million (previous year: €-3 million) relates to fluctuations in the US dollar exchange rate with a net exposure of US$95 million (previous year: US$53 million). Shareholders’ equity would have changed by €50 million (previous year: €43 million) as a result of fluctuations in the fair values of documented cash flow hedges. Thereof, €50 million (previous year: €43 million) relates to fluctuations in the US dollar exchange rate on the basis of a documented cash flow hedge volume of US$766 million (previous year: US$680 million). If there had been a uniform increase in the value of foreign currencies, this would have led to opposite changes in these amounts for the Bertelsmann Group.

Factoring

In certain specific individual cases, Bertelsmann sells receivables to financial intermediaries. The receivables sold relate primarily to short-term external receivables that Arvato Financial Solutions acquires from third parties as part of its services in receivables management. This business can be changed at any time during the year. The receivables are resold to financial intermediaries on an ongoing basis. The volume of receivables sold amounted to €321 million as of the end of the reporting period (previous year: €331 million). As part of the contractual agreements on the sale of receivables, in the majority of cases neither all rewards nor all risks that are associated with the receivables were transferred or retained. In particular, parts of the default and late payment risks were retained by Bertelsmann, with the result that a receivable was accounted for in the amount of the continuing involvement of €45 million (previous year: €45 million). The carrying amount of the associated liability is €52 million (previous year: €54 million).