BT 2013 Annual Report Download - page 52

Performance
50
Capital expenditure
We are making significant investments in the future of our business. The
efficiencies we have delivered in our capital programmes mean that our
capital expenditure has reduced, even though we have accelerated our
fibre rollout. We are doing more for less.
Our capital expenditure before purchases of telecommunications
licences totalled £2,438m (2011/12: £2,594m, 2010/11: £2,590m).
This is shown below.
0
300
600
900
1,500
2,700
2,100
1,800
2,400
1,200
Capital expenditure
2011/12 2012/13
£m
Customer
Fibre
Network
Broadband
Support/Other
Our capital expenditure this year reflects our continuing strategy to
improve customer service and invest for the future of the business. Our
investments included:
— increasing the footprint of our fibre broadband network which
now passes more than 15m homes and businesses, over half of UK
premises
— extending our WBC copper broadband network which now covers
more than 90% of premises, with more than 5m active customers
— providing additional capacity in support of our Ethernet portfolio for
BT Wholesale and BT Global Services customers
— migrating our customers onto next generation networks (both in
the UK and overseas) while simplifying and decommissioning legacy
platforms.
We also purchased a 4G licence in the UK for a cost of £202m. This will
enable us to provide our business and consumer customers with an
enhanced range of mobile broadband services, building on our existing
strength in wi-fi.
Of the capital expenditure, £248m (2011/12: £235m) arose outside the
UK. Capital expenditure contracted but not yet incurred totalled £355m
at 31 March 2013 (2011/12: £433m).
Balance sheet
Summarised balance sheet
Our balance sheet primarily reflects the significant investments in
infrastructure that are the foundations of our business, and our capital
management and funding strategy with which we underpin that
investment.
At 31 March
2013
£m
2012
£m
Movement
£m
Property, plant & equipment,
software and telecoms licences 15,934 16,121 (187)
Goodwill & other acquisition
related intangible assets 1,477 1,394 83
Other non-current & current
assets 1,586 1,538 48
Trade & other receivables 3,061 3,476 (415)
Investments, cash & cash
equivalents 1,455 844 611
Loans & other borrowings (10,013) (10,486) 473
Trade & other payables (5,521) (5,962) 441
Other current & non-current
liabilities (1,859) (1,787) (72)
Provisions (630) (857) 227
Deferred tax liability (1,209) (1,100) (109)
Pensions, net of deferred tax (4,543) (1,873) (2,670)
Total (deficit) equity (262) 1,308 (1,570)
The carrying value of property, plant & equipment, software and
telecommunications licences reduced by £187m. This reflects the
related depreciation and amortisation charge of £2,825m exceeding
the capital expenditure of £2,438m and £202m for the purchases of
telecommunications licences. Goodwill and other acquisition related
intangible assets have increased by £83m, mainly relating to the
acquisition of Tikit Group plc.
Other non-current and current assets increased by £48m, principally
reflecting an increase in derivative financial instruments of £227m,
partially offset by a decrease in current and deferred tax assets of £49m
and by a £125m decrease in our investments in associates and joint
ventures due to the disposal of Tech Mahindra. Deferred tax movements
are shown in note 10 to the consolidated financial statements. Trade and
other receivables and trade and other payables reduced by £415m and
£441m, respectively, principally reflecting lower revenue and costs.
Investments, cash and cash equivalents and loans and other borrowings
totalling £8,558m decreased by £1,084m, as shown on page 48.
Provisions reduced by £227m mainly due to the utilisation of regulatory
provisions in the year. Pensions, net of deferred tax, increased by
£2,670m to £4,543m, as explained in Pensions below.
The reduction in equity in 2012/13 is principally due to the recognition
of actuarial losses on retirement benefit obligations, which more than
offset the profit for the year. The deficit at 31 March 2013 does not
impact the distributable reserves and dividend paying capacity of the
parent company, BT Group plc, which had a profit and loss reserve of
£9,667m at 31 March 2013.