Free cash flow
| |
|
2008
£m |
|
2007
£m |
|
2006
£m |
|
| Net cash inflow from operating
activities |
|
5,486 |
|
5,210 |
|
5,387 |
|
| Net purchase of property,
plant equipment and software |
|
(3,253 |
) |
(3,209 |
) |
(2,874 |
) |
| Net purchase of non current
asset investments |
|
(1 |
) |
(3 |
) |
(1 |
) |
| Dividends from associates
and joint ventures |
|
2 |
|
6 |
|
1 |
|
| Interest received |
|
111 |
|
147 |
|
185 |
|
| Interest paid |
|
(842 |
) |
(797 |
) |
(1,086 |
) |
|
|
|
|
|
|
|
|
| Free cash flow |
|
1,503 |
|
1,354 |
|
1,612 |
|
|
|
|
|
|
|
|
|
The components of free cash flow, which
is a non-GAAP measure and a key performance indicator, are presented in the
table above and reconciled to net cash inflow from operating activities, the
most directly comparable IFRS measure. For further discussion of the definition
of free cash flow.
| |
| |
|
|
| |
|
|
 |
|
11%
increase in free cash flow
to £1,503 million |
| |
|
|
The
increase in free cash flow in 2008 of £149 million is largely due to the
income tax repayment from HMRC of £521 million (2007: £376 million),
a reduction in income taxes paid of £189 million, lower pension deficiency
payments of £320 million (2007: £520 million), together with an improvement
in working capital movements. These improvements were partially offset by payments
of £297 million associated with our transformation activities and higher
cash payments in respect of capital expenditure and net interest paid. The reduction
in free cash flow in 2007 compared with 2006 was mainly due to the pension deficiency
payment of £520 million and an increase in net expenditure on property,
plant, equipment and software of £335 million. These increases were offset
by lower taxes paid following the initial cash receipt in relation to the settlement
of £376 million from HMRC and lower net interest paid of £731 million.
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