BT 2016 Annual Report Download - page 97

102 BT Group plc
Annual Report 2016
Net debt
Net debt increased by £4,726m. This included the
£3,464m cash consideration as part of the EE acquisition
and EE net debt of £2,107m. This was partly oset by
strong cash generation from business operations.
Overall our net debt has increased to £9,845m.
We funded the cash element of the consideration for EE by
drawing down £3.2bn of our £3.6bn acquisition facility on 29
January 2016 as well as using £0.3bn of existing cash. We repaid
the majority of the drawdown through the issue of £3,019m of
Euro bonds on 10 March 2016. The eective Sterling interest
rates on the five, seven and ten‑year Euro bonds were 2.34%,
2.74% and 3.25% respectively. As at 31 March 2016, £181m
of the acquisition facility remains available and is fully drawn. We
also took on EE net debt of £2,107m.
Excluding the acquisition‑related borrowing and EE’s net debt we
decreased our net debt by £752m this year. We’ve achieved this
whilst investing for the future, including in our networks, research
and development, sports and TV content, supporting our pension
fund and funding our share buyback programme. We’ve also paid
progressive dividends to our shareholders.
We regularly review the liquidity of the group and our funding
strategy takes account of what we’ll need in the medium term, like
funding the pension deficit and share buyback.
Gross debt, translated at swap rates, at 31 March 2016 was
£13,260m. That’s made up of term debt of £11,458m, finance
leases of £240m, bank loans of £350m, syndicated loan facilities
of £619m and other loans of £593m.
In June and July 2015 our $750m and €1,000m bonds matured,
resulting in a cash outow of £1,271m.
In the table below, foreign exchange on net debt includes
translation on finance leases, short‑term borrowings, investments
and cash balances. It also includes the benefit of translating our
debt balances to Sterling at swap rates.
Movements in net debt
£m
At 1 April 2015 Normalised free cash ow Cash tax benefit of pension deficit
Specific items
Disposal and acquisitions
Proceeds from issue of own shares
Pension deficit payments
Dividends
Share buyback programme
Non-cash movements
At 31 March 2015
Normalised free cash ow
Cash tax benefit of pension deficit
Proceeds from issue of own shares
Disposal and acquisitions
Specific items
Pension deficit payments
Dividends
Share buyback programme Non-cash movements
At 31 March 2016
10
7,028
9,845
2,830
1,201
876
924
106
154
320 36
5,119 3,098
3,379
203
90
232
880
2,236
1,075
315
500
1,500
3,500
2,500
5,500
4,500
7,500
6,500
9,500
8,500
10,500
The table below shows the key components of our net debt and of the increase this year of £4,726m.
£m
At
1 April
2015
Term debt
issuance/
(maturities)
Other
cash ow
Fair value
move-
mentsd
Foreign
exchange
Transfer
to within
one year
Other
movementse
At
31 March
2016
Debt due within one yeara1,900 (1,271) 162 – 173 1,787 4863,237
Debt due after one year 7,868 3,019 436 206 (1,787) 1,686 11,032
Impact of cross-currency swapsb(357) – – – (295) – – (652)
Removal of accrued interest and fair value adjustmentsc(337) – – (36) – – 16 (357)
Gross debt 9,074 1,748 166 – 84 – 2,188 13,260
Less:
Cash equivalents (434) –(89) –25 – 1 (497)
Current assets investments (3,523) –665 –(38) –(22) (2,918)
Removal of accrued interestc2 – – – – – (2) –
Net debt 5,119 1,748 742 – 71 – 2,165 9,845
a Including accrued interest and bank overdrafts.
b Retranslation of debt balances at swap rates where hedged by cross‑currency swaps.
c Removal of accrued interest applied to reect the eective interest rate method and removal of fair value adjustments.
d Includes £49m fair value adjustment relating to EE acquired debt less £10m amortisation of de‑designated fair value hedge.
e Includes £2,223m of gross debt and £23m of investments acquired from EE.