BT 2014 Annual Report Download - page 71

68 The Strategic Report
Group performance
Capital expenditure
We continue to make signicant investments to support our future
growth strategy. Delivering eciencies across our capital programmes
has allowed us to invest for the future whilst continuing to reduce our
overall capital expenditure.
Our capital expenditure net of government grants totalled £2,346m
(201213 £2,438m, 201112 £2,594m). The breakdown across our
capital programmes is shown below.
20132012 2014
£m
Capital expenditure
Year ended 31 March
Customer
Fibre
Network
Broadband Support/Other
0
500
1,000
1,500
2,000
2,500
3,000
Our capital expenditure focus has been on next generation access,
whichincludes bre and ethernet, maintaining and upgrading our
network, transformation and investing in growing and adjacent markets.
Our investments included
• continued development of customer contract infrastructure
• increasing the footprint of our bre broadband network, including
extending the reach of bre to rural areas. We have passed more than
19m homes and businesses, around two thirds of UK premises
• expansion of our next generation networks, including expenditure
on our IP Exchange platform to increase capacity to meet growing
customer demand, whilst investing in improving performance and
reducing fault rates on all platforms
• building our TV capability and
• further extending and migrating customers to our WBC copper
broadband network which now covers more than 92% of UK premises.
We received government grants of £126m relating to our capital
activity, including amounts specic to the BDUK programme.
Of our total capital expenditure, £239m (2012/13 £248m) arose
outside the UK. Capital expenditure contracted but not yet incurred
was£400m at 31 March 2014 (2012/13 £355m).
Depreciation and amortisation reduced 5% to £2,695m, largely due
to lower capital expenditure in recent years as we have become more
ecient in delivering our capital investment programmes.
Balance sheet
Summarised balance sheet
Our balance sheet primarily reects our signicant investment in the
network infrastructure assets that are the foundation of our business,
and our capital management and funding strategy with which we
nance that investment.
At 31 March
2014
£m
2013
£m
Movement
£m
Property, plant & equipment,
software and telecoms licences 15,525 15,934 (409)
Goodwill & other acquisition
related intangible assets 1,402 1,477 (75)
Other non-current & current
assets 1,000 1,586 (586)
Trade & other receivables 3,121 3,114 7
Investments, cash & cash
equivalents 2,469 1,455 1,014
Total assetsa23,517 23,566 (49)
Loans & other borrowings (9,814) (10,013) 199
Trade & other payables (5,261) (5,574) 313
Other current & non-current
liabilities (2,031) (1,859) (172)
Provisions (533) (630) 97
Deferred tax liability (829) (1,209) 380
Pensions, net of deferred tax (5,641) (4,543) (1,098)
Total liabilities (24,109) (23,828) (281)
Total (deƬcit) equity (592) (262) (330)
a Excluding deferred tax asset relating to the BT Pension Scheme.
Property, plant and equipment, software and telecoms licences make up
our core network infrastructure and the other assets that are essential
for our business. These were held at a net book value of £15.5bn at
31March 2014. The net reduction of £409m in the year reects the
related depreciation and amortisation charge of £2,695m exceeding
capital expenditure of £2,346m.
Goodwill and other acquisition related intangible assets decreased by
£75m, primarily reecting the impact of foreign exchange translation
of overseas non-current assets. This was partly oset by additions
of£35m relating mainly to the acquisition of ESPNs UK and Ireland
TVchannels business as discussed in note 14 to the consolidated
nancial statements.
Other non-current and current assets and liabilities relate primarily
to our nancial instruments, which are described in note 26 to the
consolidated nancial statements.
Trade and other receivables were broadly at at £3,121m while trade
and other payables of £5,261m were £313m lower, contributing to the
working capital outow in the year.