BT 2003 Annual Report Download - page 43

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The net cash inflow from disposals less acquisitions in
the 2003 financial year totalled £2,842 million. Cash
proceeds from disposals amounted to £2,919 million
and principally comprised £2,603 million from the sale
of the investment in Cegetel. In the 2002 financial year
the net cash inflow from disposals less acquisitions
totalled £5,785 million. Cash proceeds from disposals
amounted to £6,916 million and principally comprised
£3,075 million from the sale of the investment in Japan
Telecom and J-Phone, £1,838 million from the sale of
the Yell directories business and £1,084 million from
the sale of our investment in Airtel. The principal cash
outflow for acquisitions was the completion of the
purchase of a minority interest in Esat Digifone in April
2001 for £869 million.
In the 2001 financial year, the group made
significant acquisitions and the net cash outflow
on these totalled £13,754 million in that year. This
included £11,438 million invested in Viag Interkom,
including acquisition of its licences, £1,233 million in
Telfort, £1,176 million in completing the Esat Telecom
Group acquisitions, offset by £464 million received
principally on the disposal of sunrise communications.
Equity dividends paid in the 2003 financial year
totalled £367 million whilst there were no equity
dividends paid in the 2002 financial year, as explained
above. Equity dividends paid in the 2001 financial year
totalled £1,432 million.
The resulting cash inflow for the 2003 financial
year, before management of liquid resources and
financing, of £4,183 million was mainly applied in
repaying short-term borrowings and investing in
short-term investments, with total borrowings of
£2,535 million being repaid. The cash inflow for the
2002 financial year of £7,433 million was also applied
in repaying short-term borrowings and investing in
short-term investments. In the 2001 financial year, the
significant cash outflow of £19,127 million was funded
by issuing substantial amounts of long-term debt
instruments and drawing on medium-term notes
programmes. In December 2000, £6,909 million was
raised through the issue of four series of US dollar
notes totalling $10 billion, with maturities between
three and thirty years. In February 2001, £6,038 million
was received through the issue of six series of euro and
sterling notes totalling e9.7 billion, with maturities
between two and sixteen years. In April 2000, a
twenty-five year £250 million index-linked Eurobond
was issued.
The cash inflow for the 2003 financial year resulted
in net debt reducing by a further £4,128 million to
£9,573 million having reduced by £14,241 million to
£13,701 million in the 2002 financial year. In the 2001
financial year the cash outflow resulted in net debt
increasing to £27,942 million at 31 March 2001.
In the 2003 financial year, the group repaid
borrowings totalling £2,535 million and no new long-
term debt was raised having repaid borrowings totalling
£12,006 million in the 2002 financial year. This was in
part due to the success of the company’s rights issue
which closed in June 2001. 1,976 million new shares
were issued for a total consideration of £5,876 million,
net of expenses. As part of the demerger
arrangements, £440 million was received from mmO
2
;
additionally mmO
2
assumed £60 million of the group’s
external net debt.
In the 2001 financial year, the group borrowed
£14,552 million in long-term loans and repaid
£225 million in long-term debt. This was in accordance
with our intention, expressed at the end of the 2000
financial year, to refinance a significant part of our
commercial paper borrowings with medium or longer-
term debt when market conditions allowed and also
to raise further significant finance in the 2001 financial
year to meet the financing needs of the UK third-
generation mobile licence, won in April 2000, increased
capital expenditure and acquisitions of interests in
subsidiaries, joint ventures and associates and their
additional funding requirements.
We expect to see a continued improvement in the
financial position of BT and are seeking to obtain a
single A rating from all the major rating agencies.
Financial review
42 BT Annual Report and Form 20-F 2003
Summarised cash flow statement 2003
£m
2002
£m
2001
£m
Net cash inflow from operating activities:
Continuing activities 6,023 5,023 5,410
Discontinued activities –234 477
Total net cash inflow from operating activities 6,023 5,257 5,887
Dividends from associates and joint ventures 6210
Net cash outflow for returns on investments and servicing of finance (1,506) (1,695) (727)
Taxation paid (434) (562) (669)
Net cash outflow for capital expenditure and financial investment (2,381) (1,354) (8,442)
Net cash inflow (outflow) for acquisitions and disposals 2,842 5,785 (13,754)
Equity dividends paid (367) – (1,432)
Cash inflow (outflow) before management of liquid resources and financing 4,183 7,433 (19,127)
Management of liquid resources (1,729) (1,864) (480)
Net cash (outflow) inflow from financing (2,473) (5,479) 19,735
(Decrease) increase in cash in the year (19) 90 128
Decrease (increase) in net debt in the year resulting from cash flows 4,225 13,930 (18,942)