BT 2003 Annual Report Download - page 133

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V Consolidated statements of cash flows continued
The following statements summarise the statements of cash flows as if they had been presented in accordance
with US GAAP, and include the adjustments which reconcile cash and cash equivalents under US GAAP to cash
at bank and in hand reported under UK GAAP.
2003
£m
2002
£m
2001
£m
Net cash provided by operating activities 3,395 1,455 5,515
Net cash provided by (used in) investing activities 1,253 3,049 (22,785)
Net cash (used in) provided by financing activities (2,852) (5,611) 18,311
Net increase (decrease) in cash and cash equivalents 1,796 (1,107) 1,041
Effect of exchange rate changes on cash 13 (50) (15)
Cash and cash equivalents under US GAAP at beginning of year 1,124 2,281 1,255
Cash and cash equivalents under US GAAP at end of year 2,933 1,124 2,281
Short-term investments with original maturities of less than three months (2,842) (966) (1,869)
Cash at bank and in hand under UK GAAP at end of year 91 158 412
VI Current asset investments
Under US GAAP, investments in debt securities would be classified as either trading, available-for-sale or
held-to-maturity. Trading investments would be stated at fair values and the unrealised gains and losses would be
included in income. Securities classified as available-for-sale would be stated at fair values, with unrealised gains
and losses, net of deferred taxes, reported in shareholders’ equity. Debt securities classified as held-to-maturity
would be stated at amortised cost. The following analyses do not include securities with original maturities of
less than three months.
At 31 March 2003, the group held trading investments (as defined by US GAAP) with fair values totalling
£935 million (2002 – £1,260 million). Held-to-maturity securities at 31 March 2002 and 2003 consisted
of the following:
Amortised
cost
£m
Estimated
fair value
£m
Commercial paper, medium-term notes and other investments 2,565 2,565
Total at 31 March 2003 2,565 2,565
Commercial paper, medium-term notes and other investments 2,372 2,372
Total at 31 March 2002 2,372 2,372
The contractual maturities of the held-to-maturity debt securities at 31 March 2003 were as follows:
Cost
£m
Fair value
£m
Maturing on or before 31 March 2004 1,663 1,663
Maturing after 31 March 2004 902 902
Total at 31 March 2003 2,565 2,565
VII Pension costs
The following position for the main pension scheme is computed in accordance with US GAAP pension accounting
rules under SFAS No. 87 and SFAS No. 88, the effect of which is shown in the above reconciliation statements.
The pension cost determined under SFAS No. 87 was calculated by reference to an expected long-term rate
of return on scheme assets of 6.9% (2002 – 6.5%, 2001 – 6.25%). The components of the pension cost for
the main pension scheme comprised:
2003
£m
2002
£m
2001
£m
Service cost 453 564 580
Interest cost 1,707 1,739 1,673
Expected return on scheme assets (1,813) (1,863) (1,850)
Amortisation of prior service costs 24 24 24
Amortisation of net obligation at date of limited application of SFAS No. 87 52 52 52
Recognised gains (22) (67) (133)
Additional cost of termination benefits 60 140 349
Pension cost for the year under US GAAP 461 589 695
United States Generally Accepted Accounting Principles
132 BT Annual Report and Form 20-F 2003