BT 2009 Annual Report Download - page 43

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
BUSINESS AND FINANCIAL REVIEWS
41BT GROUP PLC ANNUAL REPORT & FORM 20-F
BUSINESS AND FINANCIAL REVIEWS FINANCIAL REVIEW
Free cash flow
2009 2008 2007
£m £m £m
Net cash inflow from
operating activities 4,706 5,486 5,210
Net purchase of property,
plant equipment and
software (3,038) (3,253) (3,209)
Net purchase of non current
financial assets – (1) (3)
Dividends from associates
and joint ventures 6 2 6
Interest received 19 111 147
Interest paid (956) (842) (797)
Free cash flow 737 1,503 1,354
The components of free cash flow, which is a non-GAAP measure
and a key performance indicator, are presented in the table above
and reconciled to net cash inflow from operating activities, the
most directly comparable IFRS measure. For further discussion of
the definition of free cash flow, refer to pages 47 and 48.
The decrease in free cash flow in 2009 of £766m is largely due to
lower EBITDA, higher net income tax paid in the year and higher
net interest payments, partially offset by lower cash payments in
respect of capital expenditure.
The increase in free cash flow in 2008 of £149m is largely due to
the income tax repayment from HMRC of £521m (2007: £376m), a
reduction in income taxes paid of £189m, lower pension deficiency
payments of £320m (2007: £520m), together with an
improvement in working capital movements. These improvements
were partially offset by payments of £297m associated with our
transformation activities and higher cash payments in respect of
capital expenditure and net interest paid.
Balance sheet
Summarised balance sheet
2009 2008
£m £m
Non current assets
Intangible assets 3,788 3,355
Property, plant and equipment 15,405 15,307
Retirement benefit asset – 2,887
Trade and other receivables 322 854
Other non current assets 3,746 426
23,261 22,829
Current assets
Trade and other receivables 4,185 4,449
Cash and cash equivalents 1,300 1,435
Other current assets 528 639
6,013 6,523
Current liabilities
Loans and other borrowings 1,542 1,524
Trade and other payables 7,215 7,591
Other current liabilities 595 589
9,352 9,704
Total assets less current liabilities 19,922 19,648
Non current liabilities
Loans and other borrowings 12,365 9,818
Deferred tax liabilities 1,728 2,513
Retirement benefit obligations 3,973 108
Other non current liabilities 1,687 1,777
19,753 14,216
Equity
Ordinary shares and share premium 470 482
Retained (loss) earnings (328) 4,927
142 5,409
Minority interest 27 23
Total equity 169 5,432
19,922 19,648
Net assets at 31 March 2009 were £169m compared with £5,432m
at 31 March 2008, with the reduction of £5,263m mainly due to
the loss for the year of £81m, actuarial losses of £7,037m, dividend
payments of £1,222m, partly offset by the tax credit relating to
items recorded directly in equity of £1,847m, gains on cash flow
hedges of £570m and foreign exchange movements on the
translation of overseas operations of £692m.
BT’s non current assets totalled £23,261m at 31 March 2009, of
which £15,405m were property, plant and equipment, principally
forming the UK fixed network. At 31 March 2008, non current
assets were £22,829m and property, plant and equipment were
£15,307m.