RBS 2006 Annual Report Download - page 78
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77
RBS Group • Annual Report and Accounts 2006
Operating and financial review
Cash flow
2006 2005*
£m £m
Net cash flows from operating activities 17,441 4,140
Net cash flows from investing activities 6,645 (2,612)
Net cash flows from financing activities (1,516) (703)
Effects of exchange rate changes on cash and cash equivalents (3,468) 1,703
Net increase in cash and cash equivalents 19,102 2,528
* restated (see Note 48)
2006
The major factors contributing to the net cash inflow from
operating activities of £17,441 million were the profit before
tax of £9,186 million adjusted for the elimination of foreign
exchange differences of £4,516 million and depreciation and
amortisation of £1,678 million, together with an increase of
£3,980 million in operating liabilities less operating assets.
Net sales and maturities of securities of £8,000 million was
partially offset by net purchases of property, plant and
equipment of £1,292 million, resulting in the net cash inflow
from investing activities of £6,645 million.
The issue of £671 million of equity preference shares, £3,027
million of subordinated liabilities and proceeds of £1,354
million from minority interests issued were more than offset by
dividend payments of £2,727 million, purchase of ordinary
shares amounting to £991 million, repayment of £1,318 million
of subordinated liabilities and interest on subordinated
liabilities of £1,409 million, resulting in a net cash outflow from
financing activities of £1,516 million.
2005
The major factors contributing to the net cash inflow of £4,140
million from operating activities in 2005 were the profit before
tax of £7,936 million less elimination of foreign exchange
differences of £3,060 million, increases in deposits and debt
securities in issue of £56,571 million, and increases in short
positions and settlement balances of £10,326 million, partially
offset by increases in securities of £28,842 million and
increases in loans and advances of £36,778 million.
Net purchases of property, plant and equipment of £2,592
million, including operating lease assets and computer and
other equipment, were the main contributors to the net cash
outflow from investing activities of £2,612 million.
The issue of £1,649 million preference shares and £1,234
million subordinated debt were more than offset by dividend
payments of £2,007 million and the repayment of £1,553
million of subordinated liabilities, resulting in a net cash outflow
from financing activities of £703 million.