RBS 2003 Annual Report Download - page 92

Operating and financial review continued
90
Operating and financial review
Cash flow
2003 2002 2001
£m £m £m
Net cash inflow from operating activities 19,708 13,737 7,287
Dividends received from associated undertakings 9 11
Returns on investments and servicing of finance (956) (1,103) (1,048)
Taxation (1,454) (1,107) (1,209)
Capital expenditure and financial investment (6,965) (9,185) (10,337)
Acquisitions and disposals (1,571) (281) (1,653)
Equity and AVS dividends paid (2,235) (1,527) (1,052)
Financing 4,128 2,711 4,411
Increase/(decrease) in cash 10,664 3,246 (3,600)
2003
The major factors contributing to the net cash inflow of £19,708
million from operating activities in 2003 were the profit before
tax of £6,159 million, increases in deposits and debt securities
in issue of £33,935 million, increases in short positions and
settlement balances of £3,202 million and decreases in
treasury and other eligible bills of £6,626 million, partially
offset by the net increase in loans and advances of £23,343
million and increases in securities of £9,871 million.
Interest on subordinated liabilities of £557 million and
dividends of £399 million to preference and minority
shareholders were paid during the year.
Net purchases of investment securities of £3,056 million and
fixed assets of £3,909 million, including operating lease assets
and investment properties, comprised the net cash outflow
from capital expenditure and financial investment.
Equity and Additional Value Shares (‘AVS’) dividends paid
includes the final dividend on the AVS of £1,463 million.
The issue of £883 million trust preferred securities and £3,817
million subordinated debt, partially offset by the redemption of
preference shares of £364 million and repayment of £336
million of subordinated debt were the main contributors to the
net cash inflow from financing of £4,128 million.
2002
The major factors contributing to the net cash inflow of £13,737
million from operating activities in 2002 were the profit before
tax of £4,763 million and an increase in deposits, debt
securities in issue and other liabilities of £40,981 million, which
were partially offset by the increase in loans and advances of
£35,426 million.
Interest on subordinated liabilities of £674 million and
dividends of £429 million to preference and minority
shareholders were paid during the year.
Net purchases of investment securities of £6,629 million and
fixed assets of £2,556 million, including operating lease assets,
comprised the net cash outflow from capital expenditure and
financial investment.
Equity and AVS dividends paid includes the second dividend
on the AVS of £798 million.
The issue of £1,242 million trust preferred securities and
£2,157 million subordinated debt, partially offset by the
redemption of preference shares of £600 million and repayment
of £202 million of subordinated debt were the main contributors
to the net cash inflow from financing of £2,711 million.
2001
Profit before tax of £4,252 million and an increase of £27,450
million in deposits and debt securities in issue together with an
increase in short positions and settlement balances of £3,644
million, partially offset by increases in loans and advances of
£22,823 million and in treasury and other eligible bills of
£6,796 million, were the major factors in the net cash inflow
from operating activities of £7,287 million.
Interest on subordinated liabilities of £652 million and
dividends of £396 million to preference and minority
shareholders were paid during the year.
Net cash outflow from capital expenditure and financial
investment consisted of net purchases of investment securities
of £6,959 million and fixed assets, including operating lease
assets, of £3,378 million.
Equity and AVS dividends paid includes the first dividend on
the AVS of £399 million.
The issue of £2,705 million of subordinated debt and £2,131
million proceeds from the issue of shares, including a market
placing of £2,007 million, in July 2001, to fund the acquisition
of the Mellon Regional Franchise, were the main contributors to
the net cash inflow from financing of £4,411 million.