Note 27 – Group cash flow statement
a) Reconciliation of operating profit to net cash inflow from operating activities before exceptional items
| |
2005 £m |
2004 (restated) £m |
2003 (restated) £m |
|---|---|---|---|
| Operating profit of Group undertakings | 1,845 | 1,830 | 1,572 |
| Group exceptional operating items | 251 | 277 | 479 |
| Depreciation and amortisation | 1,132 | 1,117 | 1,088 |
| (Increase)/decrease in stocks | (10) | 31 | (16) |
| Decrease/(increase) in debtors | 15 | (121) | (149) |
| (Decrease)/increase in creditors | (111) | (6) | 159 |
| Decrease in provisions | (35) | (95) | (16) |
| Share-based payment charges | 16 | 25 | 37 |
| Net cash inflow from operating activities before exceptional items | 3,103 | 3,058 | 3,154 |
b) Disposal of investments
| |
2005 £m |
2004 £m |
2003 £m |
|---|---|---|---|
| Cash consideration received | 8 | 33 | 328 |
| Comprises: | |||
| Disposal of Group undertakings | – | – | 92 |
| Disposal of joint venture | 8 | – | – |
| Disposal of other investments | – | 33 | 236 |
| 8 | 33 | 328 |
c) Acquisition of Group undertakings
| |
2005 £m |
2004 £m |
2003 £m |
|---|---|---|---|
| Payments to acquire Group undertakings | (1,151) | – | – |
| Cash at bank of Group undertakings acquired | 29 | – | – |
| (1,122) | – | – |
d) Reconciliation of net cash flow to movement in net debt
| |
2005 £m |
2004 £m |
2003 £m |
|---|---|---|---|
| Movement in cash and overdrafts | 13 | 13 | 34 |
| Net cash outflow from the management of liquid resources | 54 | 48 | 138 |
| (Increase)/decrease in borrowings | (1,068) | 426 | (267) |
| Change in net debt resulting from cash flows | (1,001) | 487 | (95) |
| Disposal of Group undertaking | – | – | (62) |
| Exchange adjustments | 112 | 534 | 593 |
| Settlement of EPICs (see note 4(b)) | – | 243 | – |
| Other non-cash movements | (28) | (18) | (15) |
| Movement in net debt in the year | (917) | 1,246 | 421 |
| Net debt at start of year | (12,632) | (13,878) | (14,299) |
| Net debt at end of year | (13,549) | (12,632) | (13,878) |
During the year ended 31 March 2004 certain cross-currency swaps were terminated and £209m of cash was received. £61m of this cash flow was reported in the cash flow statement within the total of net cash outflow for returns on investments and servicing of finance amounting to £(692)m, and £148m was reported within net cash inflow from financing. Termination of these cross-currency swaps also necessitated a retranslation of Euro denominated debt at new swapped rates amounting to £(140)m, which was reported within the net exchange adjustments of £534m reported above.
e) Analysis of changes in net debt
| |
At 1 April 2002 £m |
Cash flow £m |
Disposal of Group undertakings £m |
Exchange adjustments £m |
Other non-cash movements £m |
At 31 March 2003 £m |
|---|---|---|---|---|---|---|
| Cash at bank and in hand | 110 | 12 | – | (3) | – | 119 |
| Bank overdrafts | (84) | 22 | – | – | – | (62) |
| 34 | ||||||
| Current asset investments | 354 | 138 | – | (10) | – | 482 |
| Borrowings due after one year | (12,713) | (1,226) | (55) | 497 | 1,264 | (12,233) |
| Borrowings due within one year | (1,966) | 959 | (7) | 109 | (1,279) | (2,184) |
| (267) | ||||||
| (14,299) | (95) | (62) | 593 | (15) | (13,878) |
| |
At 1 April 2003 £m |
Cash flow £m |
Exchange adjustments £m |
Settlement of EPICs £m |
Other non-cash movements £m |
At 31 March 2004 £m |
|---|---|---|---|---|---|---|
| Cash at bank and in hand | 119 | (21) | (2) | – | – | 96 |
| Bank overdrafts | (62) | 34 | 2 | – | – | (26) |
| 13 | ||||||
| Current asset investments | 482 | 48 | (10) | – | – | 520 |
| Borrowings due after one year | (12,233) | (1,117) | 448 | – | 1,360 | (11,542) |
| Borrowings due within one year | (2,184) | 1,543 | 96 | 243 | (1,378) | (1,680) |
| 426 | ||||||
| (13,878) | 487 | 534 | 243 | (18) | (12,632) |
| |
At 1 April 2004 £m |
Cash flow £m |
Exchange adjustments £m |
Other non-cash movements £m |
At 31 March 2005 £m |
|---|---|---|---|---|---|
| Cash at bank and in hand | 96 | 5 | (1) | – | 100 |
| Bank overdrafts | (26) | 8 | – | – | (18) |
| 13 | |||||
| Current asset investments | 520 | 54 | (4) | – | 570 |
| Borrowings due after one year | (11,542) | (301) | 80 | 800 | (10,963) |
| Borrowings due within one year | (1,680) | (767) | 37 | (828) | (3,238) |
| (1,068) | |||||
| (12,632) | (1,001) | 112 | (28) | (13,549) |