Vodafone 2016 Annual Report Download - page 193

Overview Strategy review Performance Governance Financials
Additional information
Vodafone Group Plc
Annual Report 2016
191
A reconciliation of cash generated by operations, the closest equivalent GAAP measure, to operating free cash ow and free cash ow,
is provided below.
2016
£m
2015
£m
2014
£m
Cash generated by operations (refer to note 19) 11,220 10,397 12,147
Capital expenditure (8,599) (9,197) (6,313)
Working capital movement in respect of capital expenditure (63) 762 456
Disposal of property, plant and equipment 140 178 79
Restructuring costs 186 336 210
Other1–387 –
Operating free cash ow 2,884 2,863 6,579
Taxation (689) (758) (3,449)
Dividends received from associates and investments 67 224 2,842
Dividends paid to non-controlling shareholders in subsidiaries (223) (247) (264)
Interest received and paid (1,026) (994) (1,315)
Free cash ow 1,013 1,088 4,393
Note:
1 Other movements for the year ended 31 March 2016 include £nil (2015: £365 million, 2014: £nil) UK pensions contribution payment and £nil (2015: £116 million, 2014: £nil) of KDG incentive
scheme payments that vested upon acquisition.
Other
Certain of the statements within the section titled “Chief Executive’s strategic review” on pages 10 to 13 contain forward-looking non-GAAP nancial
information for which at this time there is no comparable GAAP measure and which at this time cannot be quantitatively reconciled to comparable
GAAP nancial information. Certain of the statements within the section titled “Looking ahead” on page 15 contain forward-looking non-GAAP
nancial information which at this time cannot be quantitatively reconciled to comparable GAAP nancial information.
Organic growth
All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, in terms of both
merger and acquisition activity and foreign exchange movements. While “organic growth” is neither intended to be a substitute for reported growth,
nor is it superior to reported growth, we believe that the measure provides useful and necessary information to investors and other related parties for
the following reasons:
a it provides additional information on underlying growth of the business without the effect of certain factors unrelated to its
operating performance;
a it is used for internal performance analysis; and
a it facilitates comparability of underlying growth with other companies (although the term “organic” is not a dened term under IFRS and may not,
therefore, be comparable with similarly titled measures reported by other companies).
For the quarter ended 31 March 2015 and consequently the year ended 31 March 2015, the Group’s organic service revenue growth rate
was adjusted to exclude the benecial impact of a settlement of a historical interconnect rate dispute in the UK and the benecial impact
of an upward revision to interconnect revenue in Egypt from a re-estimation by management of the appropriate historical mobile interconnection
rate. The adjustments in relation to Vodafone UK and Vodafone Egypt also impacted the disclosed organic growth rates for those countries.
In addition, the Group’s organic service revenue growth rates for the year ended 31 March 2015, the six months ended 30 September 2015 and the
quarters ended 31 March 2015, 30 June 2015, 30 September 2015 and 31 December 2015 have been amended to exclude the adverse impact
of an adjustment to intercompany revenue.
For the year ended 31 March 2016, the Group has amended its reporting to reect changes in the internal management of its Enterprise business.
The primary change has been that, on 1 April 2015, the Group redened its segments to report international voice transit service revenue and costs
within common functions rather than within the service revenue and cost amounts disclosed for each country and region. The results presented
for the year ended 31 March 2015 have been restated on a comparable basis together with all disclosed organic growth rates. There is no impact
on total Group results. In addition, for the quarter and six months ended 30 September 2015 and year ended 31 March 2016, the Group’s and
Vodafone UK’s organic service revenue growth rate has been adjusted to exclude the benecial impact of a settlement of a historical interconnect
rate dispute in the UK.