Consolidated cash flow statement
At December 31, 2008
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| Notes | 2008 £m |
2007 £m |
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| Reconciliation of cash flows from operating activities | |||
| (Loss)/profit before taxation | (1,892) | 733 | |
| Share of profit of joint ventures | 10 | (74) | (66) |
| (Profit)/loss on sale or termination of businesses | 25 | (7) | 2 |
| (Profit)/loss on sale of property, plant and equipment | (11) | 1 | |
| Net interest payable | 3 | 10 | 6 |
| Net post-retirement scheme financing | 3 | 22 | (30) |
| Net other financing | 3 | 2,722 | (197) |
| Taxation paid | (117) | (71) | |
| Amortisation of intangible assets | 8 | 107 | 63 |
| Depreciation of property, plant and equipment | 9 | 208 | 170 |
| Increase/(decrease) in provisions | 39 | (42) | |
| Increase in inventories | (208) | (359) | |
| Increase in trade and other receivables | (1,072) | (128) | |
| Increase in trade and other payables | 1,242 | 778 | |
| Decrease in other financial assets and liabilities | 144 | 357 | |
| Additional cash funding of post-retirement schemes | (117) | (441) | |
| Share-based payments charge | 21 | 40 | 36 |
| Transfers of hedge reserves to income statement | 16 | (80) | (149) |
| Dividends received from joint ventures | 10 | 59 | 42 |
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| Net cash inflow from operating activities | 1,015 | 705 | |
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| Cash flows from investing activities | |||
| Additions of unlisted investments | (1) | (5) | |
| Disposals of unlisted investments | 6 | — | |
| Additions to intangible assets | (389) | (294) | |
| Purchases of property, plant and equipment | (286) | (304) | |
| Disposals of property, plant and equipment | 68 | 47 | |
| Acquisitions of businesses | 25 | (50) | (6) |
| Disposals of businesses | 25 | 6 | 3 |
| Investments in joint ventures | (32) | (13) | |
| Disposals of joint ventures | 30 | — | |
| Net cash outflow from investing activities | (648) | (572) | |
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| Cash flows from financing activities | |||
| Borrowings due within one year – repayment of loans | (1) | (350) | |
| Borrowings due after one year – repayment of loans | (22) | — | |
| Capital element of finance lease payments | (4) | (5) | |
| Net cash outflow from decrease in borrowings | (27) | (355) | |
| Interest received | 52 | 95 | |
| Interest paid | (53) | (93) | |
| Interest element of finance lease payments | (1) | (3) | |
| Decrease/(increase) in government securities and corporate bonds | 39 | (6) | |
| Issue of ordinary shares | 17 | 29 | |
| Purchase of ordinary shares | (44) | (77) | |
| Other transactions in ordinary shares | (4) | 34 | |
| Redemption of B Shares | (200) | (97) | |
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| Net cash outflow from financing activities | (221) | (473) | |
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| Increase/(decrease) in cash and cash equivalents | 146 | (340) | |
| Cash and cash equivalents at January 1 | 1,872 | 2,171 | |
| Foreign exchange | 441 | 41 | |
| Net cash of businesses acquired/disposed | 3 | — | |
| Cash and cash equivalents at December 31 | 2,462 | 1,872 | |
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| 2008 £m |
2007 £m |
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| Reconciliation of movements in cash and cash equivalents to movements in net funds | ||
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| Increase/(decrease) in cash and cash equivalents | 146 | (340) |
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| Net cash outflow from decrease in borrowings | 27 | 355 |
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| Cash (inflow)/outflow from(decrease)/increase in government securities and corporate bonds | (39) | 6 |
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| Change in net funds resulting from cash flows | 134 | 21 |
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| Net funds of businesses acquired | (3) | — |
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| Exchange adjustments | 439 | 41 |
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| Fair value adjustments | (319) | (18) |
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| Movement in net funds | 251 | 44 |
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| Net funds at January 1 excluding the fair value of swaps | 873 | 829 |
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| Net funds at December 31 excluding the fair value of swaps | 1,124 | 873 |
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| Fair value of swaps hedging fixed rate borrowings | 334 | 15 |
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| Net funds at December 31 | 1,458 | 888 |
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The movement in net funds (defined by the Group as including the items shown below) is as follows:
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| At January 1, 2008 £m |
Funds flow £m |
Net funds of businesses acquired/ disposed £m |
Exchange adjustments £m |
Fair value adjustments £m |
Reclassi- fications £m |
At December 31, 2008 £m |
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| Cash at bank and in hand | 1,265 | (550) | 1 | 224 | — | — | 940 |
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| Overdrafts | (25) | 18 | — | (2) | — | — | (9) |
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| Short-term deposits | 632 | 678 | 2 | 219 | — | — | 1,531 |
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| Cash and cash equivalents | 1,872 | 146 | 3 | 441 | — | — | 2,462 |
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| Investments | 40 | (39) | — | — | — | — | 1 |
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| Other borrowings due within one year | (4) | 1 | (6) | — | — | (2) | (11) |
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| Borrowings due after one year | (1,026) | 22 | — | (3) | (319) | 2 | (1,324) |
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| Finance leases | (9) | 4 | — | 1 | — | — | (4) |
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| 873 | 134 | (3) | 439 | (319) | — | 1,124 | |
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| Fair value of swaps hedging fixed rate borrowings |
15 | 319 | 334 | ||||
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| 888 | 134 | (3) | 439 | — | — | 1,458 | |
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