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Notes to the Consolidated Financial Statements

31 Cash generated from operations

All figures in £ millions Notes 2006 2005
Net profit   469 644
Adjustments for:      
Tax   19 125
Depreciation 11 77 80
Amortisation of purchased intangible assets 12 28 11
Adjustment on recognition of pre-acquisition deferred tax 12 7
Amortisation of other intangible assets 12 23 18
Investment in pre-publication assets 17 (213) (222)
Amortisation of pre-publication assets 17 210 192
Loss on sale of property, plant and equipment   2
Net finance costs 7 74 70
Share of results of joint ventures and associates 13 (24) (14)
Profit on sale of subsidiaries and associates 3, 4 (346)
Net foreign exchange (losses)/gains from transactions   (37) 39
Share-based payment costs 24 25 23
Inventories   (16) (17)
Trade and other receivables   (60) (4)
Trade and other liabilities   54 71
Provisions   (17) (17)
Cash generated from operations   621 653
Dividends from joint ventures and associates 13 45 14
Purchase of property, plant and equipment   (68) (76)
Purchase of intangible assets   (29) (24)
Finance lease principal payments   (3) (3)
Proceeds from sale of property, plant and equipment   8 3
Add back: Non-operating property, plant and equipment   1
Add back: Cash spent against integration and fair value provisions   1 2
Operating cash flow   575 570
Operating tax paid   (59) (65)
Net operating finance costs paid   (82) (65)
Operating free cash flow   434 440
Non-operating finance costs paid   (7)
Cash spent against integration and fair value provisions   (1) (2)
Total free cash flow   433 431
Dividends paid (including to minorities)   (235) (222)
Net movement of funds from operations   198 209

Following a review of accounting presentation in 2006, the Group has chosen to reclassify investment in pre-publication assets as cash generated from operations. This aligns the classification in the cash flow with the treatment of comparable items in other industries and provides more relevant information on the Group cash flow. The comparative has been reclassified accordingly.

In the cash flow statement, proceeds from sale of property, plant and equipment comprise:

In the cash flow statement, proceeds from sale of property, plant and equipment comprise:
All figures in £ millions 2006 2005
Net book amount 10 3
Loss on sale of property, plant and equipment (2)
Proceeds from sale of property, plant and equipment 8 3

The principal non-cash transactions are movements in finance lease obligations of £4m (2005: £nil).

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