HSBC 2004 Annual Report Download - page 314

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
312
40 Reconciliation of operating profit to net cash flow from operating activities
2004 2003 2002
US$m US$m US$m
Operating profit .............................................................................................. 16,514 12,297 9,035
Change in prepayments and accrued income .................................................. (4,969) (6,825) 355
Change in accruals and deferred income ........................................................ 2,492 6,015 190
Interest on finance leases and similar hire purchase contracts ........................ 42 38 36
Interest on subordinated loan capital .............................................................. 1,052 958 862
Depreciation and amortisation......................................................................... 3,506 2,847 2,044
Accretion of discounts and amortisation of premiums ................................... (218) 338 (8)
Provisions for bad and doubtful debts ............................................................ 6,357 6,093 1,321
Loans written off net of recoveries ................................................................. (7,984) (6,846) (1,931)
Provisions for liabilities and charges .............................................................. 1,244 759 879
Provisions utilised .......................................................................................... (1,123) (781) (1,331)
Amounts written off fixed asset investments .................................................. (99) 66 324
Net cash inflow from trading activities .......................................................... 16,814 14,959 11,776
Change in items in the course of collection from other banks ........................ 299 (135) 124
Change in treasury bills and other eligible bills .............................................. (26) 650 715
Change in loans and advances to banks .......................................................... (9,957) (14,537) 16,550
Change in loans and advances to customers ................................................... (132,052) (77,614) (35,332)
Change in other securities .............................................................................. (24,107) (10,518) 2,543
Change in other assets .................................................................................... (9,657) (4,302) (7,055)
Change in deposits by banks .......................................................................... 11,684 14,628 (3,505)
Change in customer accounts ......................................................................... 105,454 76,085 31,161
Change in items in the course of transmission to other banks ........................ 909 (251) 716
Change in debt securities in issue ................................................................... 54,172 13,976 2,935
Change in other liabilities .............................................................................. 26,783 14,443 (1,580)
Elimination of exchange differences1 ............................................................. (3,107) (4,709) (2,622)
Net cash inflow from operating activities ....................................................... 37,209 22,675 16,426
1Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line
basis, as details cannot be determined without unreasonable expense
41 Changes in financing during the year
Subordinated
loan capital
Preference
shares1
Ordinary
Shares
Share
premium
Own shares
held
US$m US$m US$m US$m US$m
Balance at 1 January 2004 ........... 21,197 8,719 5,481 4,406 (923)
Shares issued in lieu of dividends – – 80 (80) –
Acquisition of subsidiaries .......... 218––––
Issued during the year ................. 6,021 1,480 26 555 –
Repaid during the year ................ (1,740)––––
Net purchases and sales of own
shares during the year ............. ––––(88)
Net cash inflow/(outflow) from
financing ................................. 4,281 1,480 26 555 (88)
Exchange and other movements .. 790 519 – – (90)
Balance at 31 December 2004 ... 26,486 10,718 5,587 4,881 (1,101)