Subsidiaries with Material Non-Controlling Interests

In the Group’s view, material non-controlling interests relate to RTL Group and the publishing group Penguin Random House. The proportion of ownership interests held by non-controlling interests in RTL Group based in Luxembourg, Luxembourg, is 24.3 percent after treasury shares (previous year: 24.3 percent). At RTL Group itself, material non-controlling interests relate to the subsidiary Groupe M6 based in Paris, France. Bertelsmann has a 48.4 percent interest (previous year: 48.4 percent) in Groupe M6. Of the non-controlling interests of RTL Group, €409 million (previous year: €405 million) is attributable to Groupe M6. The publishing group Penguin Random House, formed due to the merger of Random House and Penguin as of July 1, 2013, consists of the two legal groups Penguin Random House LLC, based in Wilmington, Delaware, United States, which bundles all of the publishing units in the United States, and Penguin Random House Limited, based in London, UK, comprised of all other publishing units. To better reflect the substance of the Bertelsmann Group’s investment in the two groups, both groups are considered as a single entity. The proportion of ownership interests held by non-controlling interests in Penguin Random House is 47.0 percent (previous year: 47.0 percent).

The following table shows summarized financial information on RTL Group and Penguin Random House including the interests in their subsidiaries, joint ventures and associates. The information disclosed shows the amounts before intercompany eliminations.

Financial Information for Subsidiaries with Material Non-Controlling Interests  

RTL GroupPenguin Random House
in € millions12/31/201512/31/201412/31/201512/31/2013
Non-current assets6,6946,5702,0111,965
Current assets3,6113,2881,7571,692
Non-current liabilities1,2581,222223237
Current liabilities3,5253,2501,3191,368
Bertels­mann share­holders' equity4,4354,3371,3941,282
Non-controlling interests1,0871,049832770
  
in € millions2015201420152014
Revenues6,0295,8083,3943,007
Profit or loss865726342260
thereof non-controlling interests266238162122
Total comprehen­sive income907744531434
thereof non-controlling interests277241232205
  
Dividends to non-controlling interests243313192119
 
Cash flow from operating activities990934350419
Cash flow from investing activities(264)(454)(33)(135)
Cash flow from financing activities(768)(545)(405)(283)
Increase/(de­crease) in cash and cash equivalents(42)(65)(88)1

Investments Accounted for Using the Equity Method

The investments accounted for using the equity method relate to joint ventures in the amount of €46 million (previous year: €50 million) and to associates in the amount of €899 million (previous year: €542 million).

Investments in Joint Ventures

The Bertelsmann Group holds investments in 29 (previous year: 29) individually immaterial joint ventures as of the end of the reporting period. The following table shows summarized financial information on these joint ventures. The information given represents in each case the Bertelsmann Group’s interest.

Financial Information on Individually Immaterial Joint Ventures  

in € millions12/31/201512/31/2014
Non-current assets4843
Current assets7976
Non-current liabilities67
Current liabilities7055
 
in € millions20152014
Earnings after taxes from continuing operations2624
Earnings after taxes from discontinued operations
Other comprehensive income(2)(1)
Total comprehensive income2423

Investments in Associates

The Bertelsmann Group holds investments in 42 (previous year: 30) associates as of the end of the reporting period. As in the previous year, the investment of RTL Group in Atresmedia, based in San Sebastián de los Reyes, Spain, is individually material for the Group. The investment in Atresmedia decreased from 19.2 percent as of December 31, 2014, to 18.6 percent as of June 30, 2015, and remained unchanged as of December 31, 2015. The transaction resulted in a dilution of interest generating a gain of €10 million. In the previous year, the ownership in Atresmedia decreased from 20.5 percent as of December 31, 2013, to 19.2 percent as of December 31, 2014, as a result of the partial novation on February 19, 2014, of the Integration Agreement executed with the shareholder La Sexta on December 14, 2011, and the reduction of the number of treasury shares. This transaction resulted in a dilution of interest generating a loss of €5 million in the financial year 2014. As of December 31, 2015, the ownership is 18.7 percent after treasury shares (previous year: 19.3 percent). Although the Bertelsmann Group holds less than 20 percent of the interest in Atresmedia, management considers that the Bertelsmann Group still exercises a significant influence in Atresmedia due to the representation of RTL Group within decision-making bodies of Atresmedia. On December 31, 2015, the stock market value of Atresmedia, which is listed on the Madrid Stock Exchange, amounted to €2,221 million (previous year: €2,628 million). As of December 31, 2015, the fair value of the Bertelsmann Group’s interest in Atresmedia amounted to €414 million (previous year: €504 million).

The following table shows summarized financial information on Atresmedia. The information presented is the amounts included in the financial statements of Atresmedia plus adjustments for using the equity method, and not the Bertelsmann Group’s share of these amounts.

Financial Information on Individually Material Associates  

Atresmedia
in € millions12/31/201512/31/2014
Non-current assets638642
Current assets615565
Non-current liabilities(203)(204)
Current liabilities(567)(561)
Equity483442
 
in € millions20152014
Revenues970883
Earnings after taxes from continuing operations10342
Earnings after taxes from discontinued operations
Other comprehensive income11
Total comprehensive income10443
Dividends received from the associate129

Reconciliation of the summarized financial information shown to the carrying amount of the interest in Atresmedia in the Consolidated Financial Statements:

Reconciliation to Carrying Amount  

in € millions12/31/201512/31/2014
Equity483442
Proportionate equity9085
Goodwill166171
Carrying amount256256

The following table shows summarized financial information on associates which management considers individually immaterial. The information given represents in each case the Bertelsmann Group’s interest.

Summarized Financial Information on Individually Immaterial Associates  

in € millions12/31/201512/31/2014
Non-current assets563240
Current assets214128
Non-current liabilities3320
Current liabilities13467
 
in € millions20152014
Earnings after taxes from continuing operations(17)14
Earnings after taxes from discontinued operations
Other comprehensive income(3)2
Total comprehensive income(20)16

The total carrying amount of the investments in all individually immaterial associates amounts to €643 million (previous year: €286 million) as of December 31, 2015. Thereof, €179 million is attributable to the investment in the online education platform HotChalk made in December 2015. The interest in HotChalk was acquired by purchase price payment of €134 million and contribution of an existing interest in Synergis in the amount of €45 million. The carrying amount of the investment mainly reflects goodwill. As of December 31, 2015, the proportion of ownership interest is 40.8 percent. The online education platform provides services to universities that enable them to run online degree programs, collaborates with universities in designing courses and provides support in marketing and student recruitment.
In addition, the Bertelsmann Group increased its investment in the online learning provider Udacity from 5.0 percent as of December 31, 2014, to 17.5 percent as of December 31, 2015. Although the interest is less than 20 percent, management considers that the Bertelsmann Group exercises a significant influence in Udacity due to the representation within the board of directors. After remeasurement of the interest previously held and carried at cost, carried out as part of determining the cost of investment, and a purchase price payment in the amount of €69 million, the carrying amount is €139 million at the end of the reporting period. The carrying amount of the investment mainly reflects goodwill. Udacity offers special interactive online courses that include multimedia exercises, instructional videos, interviews with coaches and experts, and exams.
Of the total carrying amount of the investments in all individually immaterial associates, an additional €58 million (previous year: €84 million) is attributable to the four University Venture Funds, which invest in high-growth companies in the education sector. Bertelsmann holds between 47.3 percent and 100 percent of the shares in these funds. As operational management and investment decisions in particular are the responsibilities of the respective fund managers (general partners), control as defined by IFRS 10 does not exist despite an ownership interest of over 50 percent in some cases, but rather a significant influence. Due to deterioration in business results, an impairment loss of €18 million was recognized during the financial year for the investment accounted for using the equity method in Beijing Boda New Continent Advertising Company Limited, attributable to the Gruner + Jahr division.