Cash provided by operating activities (net cash flow)
Thanks to the strong growth in business, gross cash flow increased by 8.1 percent to EUR 1,190
million (Q1 2005: EUR 1,101 million). Net cash flow improved by EUR 354 million, to EUR 128 million (Q1 2005: minus EUR 226 million). Despite its higher sales, MaterialScience succeeded in keeping working-capital growth well below the level of the prior-year quarter. This more than compensated for the increase associated with the expansion of business at HealthCare.
 
Net cash used in investing activities
There was a net cash outflow of EUR 192 million for investing activities (Q1 2005: EUR 947 million). Capital expenditures for property, plant and equipment (EUR 242 million) and intangible assets (EUR 177 million) rose by a total of EUR 238 million to EUR 419 million (Q1 2005: EUR 181 million). This mainly includes the purchase of the European marketing rights for the blood pressure treatments Pritor® and PritorPlus® and expenditures for the expansion of our polymers production facilities at Caojing, China. A payment of EUR 41 million for the late-stage development ­product alfimeprase under our agreement with Nuvelo Inc. is also included here. It is capitalized as an intangible asset.

Cash outflows for acquisitions, totaling EUR 20 million, mainly include the purchase price paid for the biotech company Icon Genetics AG. The higher interest receipts, as well as the higher interest disbursements reflected in the financing cash flow, are primarily due to amounts received from, or paid to, tax authorities.

In the first quarter of the previous year, cash outflows for acquisitions mainly comprised approximately EUR 1.9 billion for the consumer health business of Roche. Cash inflows of EUR 1,000 million from financial assets were also registered in that quarter, mainly due to the scheduled repayment of loans by Lanxess and the expiration of derivatives. Cash receipts from the sale of property, plant and equipment totaling EUR 256 million in the first quarter of 2005 mainly related to the divestiture of the plasma business in the United States.

*	for definition see Bayer Group Key Data

Including marketable securities and other instruments, the Bayer Group had liquid assets of EUR 3,163 million as of March 31, 2006. Of this amount, EUR 299 million was held in escrow accounts to be used exclusively for payments relating to civil law settlements in antitrust proceedings. In view of the restriction on its use, this liquidity was not deducted when calculating net debt.

*	EUR 2,864 million = EUR 3,163 million - EUR 299 million