BT 2008 Annual Report Download - page 49

48 BT Group plc Annual Report & Form 20-F
Summarised cash flow statement 2008 2007 2006
£m £m £m
................................................................................................................
Cash generated from operations 5,187 5,245 5,777
Net income taxes repaid (paid) 299 (35) (390)
Net cash inflow from operating
activities 5,486 5,210 5,387
Net purchase of property, plant,
equipment and software (3,253) (3,209) (2,874)
Net acquisition of subsidiaries,
associates, joint ventures and
group undertakings (364) (237) (167)
Net (purchase) sale of current and
non current asset investments (160) 515 3,069
Dividends received from associates
and joint ventures 261
Interest received 111 147 185
Net cash (used) received in
investing activities (3,664) (2,778) 214
Net drawdown (repayment) of
borrowings 2,061 (765) (2,946)
Equity dividends paid (1,236) (1,057) (907)
Net repurchase of shares (1,413) (279) (339)
Interest paid (842) (797) (1,086)
Net cash used in financing activities (1,430) (2,898) (5,278)
Effect of exchange rates on cash and
cash equivalents 25 (35) –
Net increase (decrease) in cash and
cash equivalents 417 (501) 323
(Increase) decrease in net debt
resulting from cash flows (1,510) (219) 199
In 2008, we received a net tax refund of £299 million, which
includes a refund of £521 million in relation to the settlement
of open tax years up to and including 2004/05, which was
agreed with HMRC in 2007, together with tax paid of
£222 million. In 2007, we paid net tax of £35 million, which
includes the initial cash receipt of £376 million in relation to the
settlement with HMRC. In 2006, we paid tax of £390 million.
Net cash outflow from investing activities was £3,664 million
in 2008 (2007: £2,778 million outflow, 2006: £214 million
inflow). In 2008, our net cash outflow for the purchase of
property, plant and equipment was £3,253 million (2007:
£3,209 million, 2006: £2,874 million). The increase in both
2008 and 2007 reflects our preparations for 21CN and the
systems developments required by the Undertakings agreed with
Ofcom. In 2008, we have continued to make targeted
acquisitions to expand our global reach and enhance our
capabilities in specific areas. Our net cash expenditure on
acquiring new businesses was £364 million in 2008 (2007: £237
million, 2006: £167 million). Significant acquisitions made in the
current year include Comsat International, Frontline Technologies
Corporation Limited and i2i Enterprise Private Limited. In 2007,
significant acquisitions included INS Inc and PlusNet, and in
2006, Radianz and Atlanet.
In 2008, the net cash outflow from the net purchase of
investments was £160 million, compared with an inflow of £515
million in 2007, and an inflow of £3,069 million in 2006. The
cash outflow in 2008 mainly related to the increase in amounts
held by liquidity funds. The net cash inflow in 2006 relates to
the sale of investments, which was used to partly fund the
repayment of maturing debt in that year.
Interest received was £111 million in 2008, compared with
£147 million in 2007 and £185 million in 2006. The interest
receipts in 2008 and 2007 include £65 million and £74 million,
respectively, from HMRC on the settlement discussed in the
specific items section of this Financial review. Excluding these
receipts, interest received was £27 million lower in 2008 which
in turn was £112 million lower in 2007, reflecting the lower
level of investments held as debt matured and was repaid.
Net cash outflow from financing activities of £1,430 million in
2008 compares with £2,898 million in 2007 and £5,278 million
in 2006. In 2008, we raised debt of £3,939 million mainly
through our European Medium Term Note and US Shelf
programmes which was partially offset by cash outflows on the
repayment of maturing borrowings, lease liabilities and the net
repayment of commercial paper amounting to £1,878 million. In
2007, the full and part maturity of notes and leases resulted in
a cash outflow of £1,085 million mainly offset by the net issue
of commercial paper of £309 million. Included in the 2006 net
cash outflow is a repayment of £4,432 million for maturing
debt. In addition, we raised new Sterling floating rate borrowing
of £1,000 million and issued commercial paper raising net
proceeds of £464 million in 2006.
At 31 March 2008, net debt was £9,460 million, compared
with £7,914 million at 31 March 2007 and £7,534 million at
31 March 2006. The components of net debt, which is a non-
GAAP measure, together with a reconciliation to the most
directly comparable IFRS measure, are detailed on page 109.
The share buy back programme has resulted in a cash outflow of
£1,498 million and this is reflected in the increase in net debt in
2008.
Equity dividends paid in 2008 were £1,236 million, compared
with £1,057 million and £907 million in 2007 and 2006,
respectively. Interest paid in 2008 was £842 million, compared
with £797 million and £1,086 million in 2007 and 2006,
respectively. The increase in 2008 mainly reflects the impact of
increased net debt and a one-off payment of £26 million on the
Report of the Directors Financial review
.............................................................................................................................................................
11%
increase in free cash flow
to £1,503 million