Consolidated statement of cash flows

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Year ended 31 December 2010 Note 2010 £m 2009 £m


  1. This measure is the formal profit before tax measure under IFRS but it is not the result attributable to shareholders.
  2. The acquisition of United Overseas Bank Life Assurance Limited (UOB) resulted in an outflow of cash for investing activities of £133 million. The remaining outflow of £12 million relates to the PAC with-profits fund purchase of Meterserve.
  3. Cash movements in respect of equity capital exclude scrip dividends.
Cash flows from operating activities      
Profit before tax (being tax attributable to shareholders’ and policyholders’ returns)note (i)   2,072 1,564
Loss before tax from discontinued operations I10 (14)
Total profit before tax   2,072 1,550
Changes in operating assets and liabilities:      
Investments   (24,594) (26,388)
Other non-investment and non-cash assets   (1,161) (384)
Policyholder liabilities (including unallocated surplus)   24,287 24,932
Other liabilities (including operational borrowings)   1,332 (299)
Interest income and expense and dividend income included in result before tax   (7,514) (7,267)
Other non-cash items (including £559 million in 2009 for the loss on disposal of Taiwan agency business)   139 650
Operating cash items:      
Interest receipts   6,277 5,734
Dividend receipts   1,412 1,780
Tax paid   (302) (200)
Net cash flows from operating activities   1,948 108
Cash flows from investing activities      
Purchases of property, plant and equipment H6 (93) (91)
Proceeds from disposal of property, plant and equipment   4 54
Completion adjustment for previously disposed business I10 (20)
Disposal of Taiwan agency business I2(b) (497)
Acquisition of subsidiaries, net of cash balance note (ii) I1 (145)  
Net cash flows from investing activities   (234) (554)
Cash flows from financing activities      
Structural borrowings of the Group: I11    
Shareholder-financed operations:      
Issue of subordinated debt, net of costs   822
Redemption of senior debt   (249)
Bank loan   250
Interest paid   (251) (207)
With-profits operations:      
Interest paid   (9) (9)
Equity capital:note (iii)      
Issues of ordinary share capital H11 13 3
Dividends paid B3 (449) (344)
Net cash flows from financing activities   (446) 16
Net increase (decrease) in cash and cash equivalents   1,268 (430)
Cash and cash equivalents at beginning of year   5,307 5,955
Effect of exchange rate changes on cash and cash equivalents   56 (218)
Cash and cash equivalents at end of year H10 6,631 5,307


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