HSBC 2006 Annual Report Download - page 302

HSBC HOLDINGS PLC
Financial Statements (continued)
300
HSBC Holdings cash flow statement for the year ended 31 December 2006
2006 2005
Notes US$m US$m
Cash flows from operating activities
Profit before tax ...................................................................................................................... 6,974 6,541
Adjustments for:
– non-cash items included in profit before tax .................................................................. 40 58 13
– change in operating assets ............................................................................................... 40 (1,827) 3,563
– change in operating liabilities ......................................................................................... 40 1,056 (4,400)
– elimination of exchange differences1 .............................................................................. (29) (123)
– net gain from investing activities .................................................................................... (8) –
– tax received ..................................................................................................................... 219 158
Net cash from operating activities .......................................................................................... 6,443 5,752
Cash flows from investing activities
Proceeds from the sale of financial investments .................................................................... – 303
Net cash outflow from acquisition of and increase in stake of subsidiaries .......................... (4,440) (4,093)
Net cash inflow from disposal of subsidiaries ....................................................................... – 1,063
Net cash used in investing activities ...................................................................................... (4,440) (2,727)
Cash flows from financing activities
Issue of ordinary share capital ................................................................................................ 1,010 690
Issue of preference shares ....................................................................................................... – 1,405
Purchases of own shares to meet share awards and share option awards .............................. (46) (39)
On exercise of share options .................................................................................................. 127 67
Subordinated loan capital issued ............................................................................................ 2,806 1,647
Subordinated loan capital repaid ............................................................................................ – (350)
Dividends paid ........................................................................................................................ (5,927) (5,935)
Net cash used in financing activities ...................................................................................... (2,030) (2,515)
Net increase/(decrease) in cash and cash equivalents ....................................................... (27) 510
Cash and cash equivalents at 1 January ................................................................................. 756 246
Cash and cash equivalents at 31 December ............................................................................ 40 729 756
1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line
basis, as details cannot be determined without unreasonable expense.
The accompanying notes on pages 301 to 434, the audited sections of the ‘Report of the Directors: The Management of Risk’ on pages 165
to 247, and the ‘Critical accounting policies’ on pages 111 to 115 form an integral part of these financial statements.