Vodafone 2002 Annual Report Download - page 46

Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects44
Operating and Financial Review and Prospects continued
During the year ended 31 March 2002, the Group generated £2,365 million
of free cash flow. This comprised £8,102 million in cash from operating
activities, representing a 77% increase over that of the year ended 31 March
2001, plus dividends from joint ventures and associated undertakings of
£139 million and dividends from other investments of £2 million, partially offset
by payments of £545 million in respect of taxation, £854 million of interest on
Group debt, £84 million of dividends paid to minority shareholders in subsidiary
undertakings and net capital expenditure of £4,395 million in respect of
intangible and tangible fixed assets.
The significant decrease in net cash outflow for capital expenditure and
financial investment from £19,011 million in the prior period to £4,447 million
in the year ended 31 March 2002 was due primarily to a reduction in the
amount spent on the acquisition of 3G network licences as the Group had
acquired 3G licences in the majority of its major markets by the beginning
of the current financial year. During the year ended 31 March 2002,
£325 million was spent in respect of 3G licences in Greece, Spain and
Australia, a GSM licence in Albania and additional GSM spectrum in Greece.
The Group’s expenditure on tangible fixed assets increased by £447 million to
£4,145 million during the period, including approximately £780 million spent in
Japan and £790 million in Germany to increase network capacity.
Impact on net debt
Date: Event: £bn $bn
4 April 2001 Acquisition of 34.5% interest in Grupo Iusacell. 0.7 1.0
12 April 2001 Second tranche payment to acquire 15% stake in Japan Telecom from West Japan Railway Company
and Central Japan Railway Company. 0.8 1.1
19 April 2001 Monetisation of remaining 14.9 billion cash receipt due to be received from France Telecom
in respect of the repurchase of France Telecom shares which had been received in part consideration
for the trade sale of Orange. (2.9) (4.2)
27 April 2001 Purchase of additional 10% stake in Japan Telecom from AT&T. 0.9 1.3
8 May 2001 Issue of 1.825 billion new ordinary shares at 194 pence per share. (3.5) (5.0)
June and July 2001 Acquisition of BT’s interests in Japan Telecom and the J-Phone Group. 3.7 5.3
29 June 2001 Purchase of BT’s interests in Airtel Móvil, S.A. 1.1 1.6
27 September 2001 Payment of second tranche of consideration in respect of the acquisition of a 25% interest in Swisscom Mobile. 1.0 1.4
12 October 2001 Completion of the Group’s tender offer for an additional 21.7% interest in Japan Telecom.
Cash consideration plus consolidation of Japan Telecom and J-Phone’s debt. 7.3 10.4
4 March 2002 Disposal of remaining interest in Atecs Mannesmann AG. (2.2) (3.1)
26 March 2002 Payment from Deutsche Bahn in connection with the sale of Arcor DB Telematik GmbH. (0.7) (1.0)
The Group expects to spend approximately £6.0 billion on tangible fixed assets
in each of the next two financial years and reduced amounts thereafter.
Incremental expenditure on 3G infrastructure in the 2003 financial year is
expected to represent approximately 30% of total capital expenditure.
Net cash outflow from acquisitions and disposals of £7,691 million arose
primarily in respect of the acquisitions of additional stakes in Japan Telecom,
the J-Phone Group and Airtel and the purchase of a 34.5% interest in Grupo
Iusacell, all of which are described in more detail under “Information on the
Company – History and Development of the Company – Acquisitions of
businesses”above, and additional cash paid in connection with the acquisition
of a 25% interest in Swisscom Mobile, offset by amounts received on the
monetisation of the France Telecom receivable, both described in the table below.
The following table presents, in chronological order, a summary of significant
business transactions in the twelve month period from 1 April 2001 to 31 March
2002, and shows their impact on the Group’s consolidated net debt position,
which increased from £6,722 million at 31 March 2001 to £12,034 million at
31 March 2002, representing approximately 14% of the Group’s market
capitalisation at 31 March 2002. This compares with 5.4% as at 31 March
2001. Solely for convenience, the amounts presented have been translated into
US dollars and pounds sterling at actual rates for dollar denominated
transactions or, otherwise, at the respective exchange rates on 29 March 2002.