Telstra 2004 Annual Report Download - page 48

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46
discussion and analysis
statement of financial position
We continued to maintain a strong financial position with
net assets of $15,361 million, compared with net assets of
$15,422 million as at 30 June 2003.
The decrease in net assets by $61 million comprised a reduction
in our total assets of $606 million and a decrease in total liabilities
of $545 million.
The decrease in total assets of $606 million was primarily due
to the following movements during the year:
•Cash assets decreased by $613 million due to management
of our working capital and the off market share buy-back
completed in November 2003;
•Our property, plant and equipment decreased by $149 million,
due mainly to depreciation and amortisation charges; and
•Offset by current other assets being higher due to increasing
deferred mobile handset subsidies of $94 million.
The decrease in total liabilities of $545 million was primarily
due to a reduction in total interest-bearing liabilities, which was
attributable to the repayment of loans from free cash flow
generated during the year.
The group continued to maintain a strong free cash flow position,
which enabled the company to pay strong dividends, fund the
acquisition of the Trading Post Group and complete an off market
share buy-back. We have gained cash through continued strong
company operating activities and through careful capital and cash
management. We have also achieved a sustainable reduction in
capital expenditure.
statement of cash flows
We continued to generate strong cash flow from operating
activities of $7,433 million (2003: $7,057 million). This position was
the result of continued tight control of expenditure and improved
working capital management, partially offset by higher tax
payments.
Cash used in investing activities was $3,270 million, representing
an increase of $778 million over the prior year. The increase is
mainly attributable to the acquisition of the Trading Post Group
for $634 million and the Cable Telecom group for $31 million net
of cash balances acquired. In addition, a decrease of $629 million in
our proceeds from property, plant and equipment was due mainly
to the sale of a portfolio of seven office properties in fiscal 2003.
The current year proceeds on sale included $154 million from
the sale of our interest in IBMGSA, $50 million from the sale of
our interest in PT Mitra Global Telekomunikasi Indonesia and
$168 million from the sale of property, plant and equipment.
Total cash flow before financing activities (free cash flow)
decreased to $4,163 million (2003: $4,565 million).
Our cash used in financing activities was $4,776 million (2003:
$4,317 million) after dividend payments of $3,186 million (2003:
$3,345 million), a share buy-back of $1,009 million (2003: nil) and
net repayment of borrowings of $581 million (2003: $972 million).
concise financial reportcontinued