RBS 2007 Annual Report Download - page 70

RBS Group • Annual Report and Accounts 2007
68
Business review continued
Business review
Cash flow
2007 2006 2005
£m £m £m
Net cash flows from operating activities 25,604 17,441 4,140
Net cash flows from investing activities 15,999 6,645 (2,612)
Net cash flows from financing activities 29,691 (1,516) (703)
Effects of exchange rate changes on cash and cash equivalents 6,010 (3,468) 1,703
Net increase in cash and cash equivalents 77,304 19,102 2,528
2007
The major factors contributing to the net cash inflow from
operating activities of £25,604 million were the increase of
£28,261 million in operating liabilities less operating assets and
the profit before tax of £9,900 million, partly offset by the
elimination of foreign exchange differences of £10,282 million
and income taxes paid of £2,442 million.
The acquisition of ABN AMRO, included within net investment
in business interests and intangible assets of £13,640 million,
was the largest element giving rise to net cash flows from
investing activities of £15,999 million, with cash and cash
equivalents acquired of £60,093 million more than offsetting
the cash consideration paid of £45,856 million. Net sales and
maturities of securities of £1,987 million and net disposals of
property, plant and equipment, £706 million less the net cash
outflow of £597 million in respect of other acquisitions and
disposals represented the other principle factors.
Net cash flows from financing activities of £29,691 million
primarily relate to the cash injection of £31,019 million from the
consortium partners in relation to the acquisition of ABN AMRO,
together with the issue of £4,829 million of equity securities
and £1,018 million of subordinated liabilities, offset in part by
dividend payments of £3,411 million, the repayment of £1,708
million subordinated liabilities, interest on subordinated liabilities
of £1,522 million and the redemption of £545 million of
minority interests.
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.