Notes 6-10

10. Analysis of cash flows

The following tables analyse the items included within the main cash flow headings:

Net cash (outflow)/inflow from operating activities:


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Profit for the period 138.3 237.3 513.9
Taxation 41.0 101.2 232.9
Finance costs 171.9 130.1 344.8
Finance income (132.7) (70.1) (169.6)
Share of results of associates (19.8) (20.7) (46.0)
Operating profit 198.7 377.8 876.0
Adjustments for:
Non-cash share-based incentive
plans (including share options)

31.1

30.2

62.3
Depreciation of property,
plant and equipment
97.3 68.6 149.6
Goodwill impairment 40.0 20.0 84.1
Goodwill write-down relating to
utilisation of pre-acquisition tax losses
0.7 1.5
Amortisation and impairment of
acquired intangible assets
88.1 25.5 78.4
Amortisation of other intangible assets 16.2 9.9 23.4
Gains on disposal of investments (8.4) (3.6) (3.4)
Write-downs of investments 4.3 12.3 30.5
Losses/(gains) on sale of property,
plant and equipment
0.1 (0.1) 1.9
Operating cash flow before
movements in working capital
and provisions

467.4

541.3

1,304.3
Movements in working capital
and provisions1
(481.9) (572.5) (109.3)
Cash generated by operations (14.5) (31.2) 1,195.0
Corporation and overseas tax paid (94.9) (84.1) (182.5)
Interest and similar charges paid (200.7) (99.9) (269.2)
Interest received 96.2 33.3 133.0
Investment income 0.4 1.7 1.8
Dividends from associates 22.1 14.8 44.6
(191.4) (165.4) 922.7
1
The Group typically experiences an outflow of working capital in the first half of the financial year and an inflow in the second half. This is primarily due to the seasonal nature of working capital flows associated with its media buying activities on behalf of clients.

Acquisitions and disposals:


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Initial cash consideration (28.1) (94.1) (891.9)
Cash/(overdraft) and cash
equivalents acquired (net)
0.9 (9.9) (6.1)
Earnout payments (37.8) (30.4) (67.8)
Loan note redemptions (2.6) (2.6)
Purchase of other investments
(including associates)
(36.7) (42.8) (91.7)
Proceeds on disposal of investments 8.7 3.8 11.0
  (93.0) (176.0) (1,049.1)

Share repurchases and buy-backs:


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Share cancellations
(excluding brokerage fees)
(112.2) (112.2)
Shares purchased into treasury (9.5)
Proceeds on disposal of
treasury shares
6.9
(9.5) (112.2) (105.3)

Net increase in borrowings:


 
 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
(Decrease)/increase in drawings
on bank loans
(534.0) 1,273.3
Proceeds from issue of
£450 million 5.75% convertible
bonds due May 2014

450.0


Proceeds from issue of
$600 million 8.0% bonds
due September 2014

367.4


Proceeds from issue of
€750 million 6.625% bonds
due May 2016


594.6

594.6
Repayment of €650 million 6.0% bonds (515.1) (515.1)
Repayment of $100 million 6.875% bonds (50.5)
Repayment of $150 million 5.0% bonds (96.2)
Repayment of TNS debt (175.7) (395.7)
107.7 79.5 810.4

Cash and cash equivalents:


 
 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Cash at bank and in hand 1,026.9 1,193.8 2,485.9
Short-term bank deposits 71.3 83.1 86.6
Overdrafts1 (380.3) (646.1) (1,254.4)
717.9 630.8 1,318.1
1
Bank overdrafts are included in cash and cash equivalents because they form an integral part of the Group’s cash management.