BT 2014 Annual Report Download - page 67

64 The Strategic Report
Group performance
Earnings per share
Adjusted earnings per share increased 7% to 28.2p.
This is one of our key performance indicators (see pages 60 and 61) and
has increased 21% over the last two years. The graph below shows the
drivers of the rise in adjusted earnings per share over this period.
2014 2012
EBITDA
Depreciation &
amortisation
Otherb
Otherb
Tax
Interest
2013
Prot on associates
Interest
Depreciation &
amortisation
EBITDA
Tax
pence
21
23
25
27
29
Adjusted earnings per sharea
Year ended 31 March
23.4
26.3
28.2
1.9
0.8
1.4
1.7
0.4
0.3
0.3
0.3
0.2
0.2
0.1
a 5estated. See note 1 to the consolidated Ƭnancial statements.
b Other includes the impact of the change in the weighted average number of shares.
Reported earnings per share (which includes specic items) was 25.7p,
up 4%.
Our earnings per share in future years will be impacted by share options
maturing and share awards vesting under our employee share plans.
Seepage 26 for more details.
Cash Ʈow
We generated normalised free cash ow of £2,450m, up £150m or
7%, and also higher than our outlook of around £2.3bn. The cash
generation of our business has continued to be strong, enabling us
to make investments while also maintaining our strong liquidity and
funding position.
Free cash Ʈow
Our cash generation and nancial strength have enabled us to progress
our nancial objectives. We have reduced our net debt by £769m whilst
making investments for the future of our business, supporting our
pension fund and our share buyback programme, and paying progressive
dividends to our shareholders.
The increase in normalised free cash ow in the year partly reects a
particularly strong cash ow performance within BT Global Services as
well as lower tax, interest payments and capital expenditure. We paid
instalments of around £240m for the Premier League football broadcast
rights, as well as making a £60m deposit for the UEFA Champions
League and UEFA Europa League broadcast rights that we won in the
year. This years free cash ow included around £60m of early customer
receipts for services to be delivered in 201415.
Summarised cash Ʈow statement
Year ended 31 March
Before specic items
2014
£m
2013
£m
2012
£m
EBITDAa 6,116 6,143 6,034
Capital expenditureb (2,346) (2,438) (2,560)
Interest (608) (692) (685)
Taxationc (424) (624) (615)
Working capital movements (380) (81) (3)
Other non-cash and non-current
liabilities movementsa92 (8) 136
Normalised free cash Ʈow 2,450 2,300 2,307
Purchases of telecommunications
licences (202) 
Cash tax benet of pension decit
payments 77 560 215
Specic items (356) (366) (204)
Reported free cash Ʈow 2,171 2,292 2,318
Pension decit payments (325) (325) (2,000)
Dividends (778) (683) (590)
Disposals and acquisitions (22) 222 15
Share buyback programme (302) (302) 
Proceeds from issue of own shares 75 109 21
Reduction (increase) in net debt from
cash ows 819 1,313 (236)
Net debt at 1 April (7,797) (9,082) (8,816)
Reduction (increase) in net debt from
cash ows 819 1,313 (236)
Non-cash movements (50) (28) (30)
Net debt at 31 March (7,028) (7,797) (9,082)
a 5estated, see note 1 to the consolidated Ƭnancial statements.
b Excluding purchases of telecommunications licences.
c Excluding cash tax beneƬt of pension deƬcit payments.
Reported free cash ow, which includes specic items and a £77m
(201213 £560m) tax benet from pension decit payments, was
£2,171m (201213 £2,292m). The prior year included £202m for
thepurchase of our 4G telecommunications licence in the UK.
The cash cost of specic items was £356m (201213 £366m) mainly
comprising restructuring costs of £267m (201213 £147m), property
rationalisation costs of £55m (201213 £55m) and payments relating
to provisions for claims of £16m (201213 £nil).
Disposals and acquisitions included payments of £19m relating to
the acquisition of ESPNs UK and Ireland TV channels business. In the
prior year we received proceeds of £270m relating to the sale of our
remaining interest in Tech Mahindra, oset by an outow of £54m in
relation to our acquisition of Tikit Group.
We have spent £302m (201213 £302m) on our share buyback
programme to counteract the dilutive eect of our all-employee share
option plans maturing. Exercises of share options generated proceeds of
£75m (201213 £109m).
We have set out a reconciliation from net cash inow from operating
activities, the most directly comparable IFRS measure, to normalised free
cash ow, on page 186.