RBS 2008 Annual Report Download - page 73

RBS Group Annual Report and Accounts 200872
Business review continued
Cash flow
2008 2007
£m £m
Net cash flows from operating activities (75,338) 25,604
Net cash flows from investing activities 16,997 15,999
Net cash flows from financing activities 15,102 29,691
Effects of exchange rate changes on cash and cash equivalents 29,209 6,010
Net (decrease)/increase in cash and cash equivalents (14,030) 77,304
2008
The major factors contributing to the net cash outflow from operating
activities of £75,338 million were the net operating loss before tax of
£36,459 million from continuing and discontinued operations, the
decrease of £42,219 million in operating liabilities less operating assets,
and the elimination of foreign exchange differences of £41,874 million,
partly offset by the write down of goodwill and other intangible assets,
£32,581 million and other non-cash items, £8,603 million.
Proceeds on disposal of discontinued activities of £20,113 million was
the largest element giving rise to net cash flows of investing activities of
£16,997 million. Outflow from net purchases of securities of £1,839
million and net disposals of property, plant and equipment, £3,529
million less the net cash inflow of £2,252 million in respect of other
acquisitions and disposals represented the other principle factors.
Net cash flows from financing activities of £15,102 million primarily
arose from the capital raised from the placing and open offer of
£19,741 million and the rights issue of £12,000 million, the issue of
subordinated liabilities of £2,413 million and proceeds of minority
interests, £1,427 million. This was offset in part by the cash outflow on
redemption of minority interests of £13,579 million, repayment of
subordinated liabilities of £1,727 million, dividends paid of £3,193
million and interest paid on subordinated liabilities of £1,967 million.
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.