BT 2002 Annual Report Download - page 40

Basic earnings per share before goodwill amortisation and
exceptional items, from BT's continuing activities of
8.8 pence for the 2002 ®nancial year compares with an
equivalent 19.3 pence and 29.5 pence for the 2001 and
2000 ®nancial years, respectively. The results for both the
2002 and 2001 ®nancial years re¯ect the higher interest
charges, losses incurred by newly acquired businesses and
the adverse effect which competitive pressures have
continued to have on our operating margins in the UK
®xed-voice telephony market.
Diluted earnings per share are not materially different.
A ®nal dividend for the 2002 ®nancial year of 2.0 pence
per share has been recommended. If approved at the
annual general meeting, this dividend will be paid on
9 September 2002 to shareholders on the register on
9 August 2002. This dividend will absorb £173 million. BT's
future dividend policy will be progressive, re¯ecting the
growth in earnings per share and an improving balance
sheet. It is likely dividend cover during the next three years
will be in the range of 2.5 to 2.0 times, reducing within the
range as the group's cash position improves.
As part of BT's debt reduction and restructuring plans,
the Board decided in May 2001 that there was to be no
interim dividend for the 2002 ®nancial year, nor any ®nal
dividend in respect of the 2001 ®nancial year. The dividend
for the 2001 ®nancial year of 7.8 pence per share therefore
solely comprised the interim dividend paid in February 2001
which absorbed £571 million.
Interim and ®nal dividends totalled 19.6 pence per
share for the 2000 ®nancial year and absorbed £1,426 million.
Financing
Net cash in¯ow from operating activities of £5,257 million in
the 2002 ®nancial year compares with £5,887 million in the
2001 ®nancial year and £5,849 million in the 2000 ®nancial
year. Net cash in¯ow from continuing operating activities
amounted to £5,023 million, £5,410 million and
£5,609 million in the 2002, 2001 and 2000 ®nancial years,
respectively. Special and de®ciency contributions to the
main pension fund, described below, of £600 million in the
2002 ®nancial year, £300 million in the 2001 ®nancial year
and £230 million in the 2000 ®nancial year were paid,
consequently reducing the net cash in¯ow by these amounts.
Tax paid in the 2002 ®nancial year totalled £562 million
compared with £669 million in the 2001 ®nancial year and
£1,311 million paid in the 2000 ®nancial year. The lower tax
paid in the 2002 and 2001 ®nancial years was due to the
lower pro®ts earned in the 2002 and 2001 ®nancial years.
The net cash out¯ow of £1,354 million for capital
expenditure and ®nancial investment in the 2002 ®nancial
year included £4,069 million of capital expenditure on plant
and equipment, offset by £2,645 million received on the
sale of tangible ®xed assets. These proceeds included
£2,380 million from the property sale and leaseback
transaction completed in December 2001, described above.
Net cash out¯ow of £8,442 million for capital expenditure
and ®nancial investment in the 2001 ®nancial year was
principally for capital expenditure on plant and equipment of
£4,756 million and £4,208 million invested in mmO2's
third-generation mobile licences. The net cash out¯ow of
£3,752 million in the 2000 ®nancial year was principally for
capital expenditure on plant and equipment.
The net cash in¯ow from disposals less acquisitions in
the 2002 ®nancial year 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 out¯ow for acquisitions was the completion of the
purchase of a minority interest in Esat Digifone in April 2001
for £869 million.
In the 2001 ®nancial year, the group made signi®cant
acquisitions and the net cash out¯ow 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
Financial review
BT Group Annual Report and Form 20-F 2002 39
Summarised cash ¯ow statement 2002
£m
2001
£m
2000
£m
Net cash in¯ow from operating activities:
Continuing activities 5,023 5,410 5,609
Discontinued activities 234 477 240
Total net cash in¯ow from operating activities 5,257 5,887 5,849
Dividends from associates and joint ventures 210 5
Net cash out¯ow for returns on investments and servicing of ®nance (1,695) (727) (163)
Taxation paid (562) (669) (1,311)
Net cash out¯ow for capital expenditure and ®nancial investment (1,354) (8,442) (3,752)
Net cash in¯ow (out¯ow) for acquisitions and disposals 5,785 (13,754) (6,405)
Equity dividends paid ±(1,432) (1,364)
Cash in¯ow (out¯ow) before management of liquid resources and ®nancing 7,433 (19,127) (7,141)
Management of liquid resources (1,864) (480) 1,236
Net cash in¯ow (out¯ow) from ®nancing (5,479) 19,735 5,959
Increase in cash in the year 90 128 54
Decrease (increase) in net debt in the year 13,930 (18,942) (6,582)