Annual Report 2007 - Severstal

Financial statements
OAO Severstal and subsidiaries
Consolidated statement of cash flows
Year ended December 31, 2007
(Amounts expressed in thousands of US dollars)
74 Severstal Annual Report 2007
Year ended December 31,
2007 2006 2005
(restated)
(restated)
Operating activities:
Profit before financing and taxation 2,766,911 2,221,680 2,323,619
Adjustments to reconcile profit to cash generated from operations:
Depreciation and amortization (Notes 18 and 19) 802,695 603,740 496,597
Impairment of property, plant and equipment 29,109 57,736 111,384
Provision for inventories, receivables and other provisions 52,542 (11,641) 27,629
Negative goodwill, net (12,223) (4,213) (7,630)
Loss on disposal of property, plant and equipment 35,280 39,292 36,780
Net gain on restructuring of tax liabilities (Note 26) – (14,669) (174,178)
(Gain)/loss on disposal of subsidiaries and associates (31,507) (846) 9,759
Gain on remeasurement and disposal of financial investments (25,564) (28,263) (24,443)
Share of associates’ results less dividends from associates 89,397 1,193 17,413
Changes in operating assets and liabilities:
Trade accounts receivable (334,967) (16,474) 10,585
Amounts receivable from related parties 25,083 92,387 43,006
VAT recoverable 96,603 140,315 (222,739)
Inventories (189,848) (291,466) (73,542)
Trade accounts payable 58,704 57,562 16,323
Bank customer accounts 36,500 (74,511) (28,322)
Amounts payable to related parties 80,316 (101,337) 53,386
Other taxes and social security payables (63,729) (111,604) 16,797
Other non-current liabilities (107,185) 10,396 13,114
Assets held for sale (1,856) – (14,512)
Net other changes in operating assets and liabilities 42,490 52,044 60,245
Cash generated from operations 3,348,751 2,621,321 2,691,271
Interest paid (excluding banking operations) (230,791) (215,081) (199,177)
Income tax paid (802,871) (676,582) (557,303)
Net cash from operating activities 2,315,089 1,729,658 1,934,791
Investing activities:
Additions to property, plant and equipment (1,561,911) (1,243,831) (1,204,415)
Additions to intangible assets (27,194) (8,808) (32,322)
Net decrease/(increase) in short-term bank deposits 580,706 (431,142) (133,526)
Additions to financial investments and associates (1,303,537) (1,203,824) (817,558)
Acquisition of minority interests and entities under common control (232,447) (294,249) 108,466
Net cash outflow on acquisitions of subsidiaries (644,094) (57,625) (4,223)
Net cash inflow on disposals of subsidiaries 235,978 1,588 13,701
Proceeds from disposal of property, plant and equipment 32,926 14,023 10,893
Proceeds from disposal of assets held for sale – – 10,313
Proceeds from disposal of financial investments 787,037 949,480 816,671
Interest received (excluding banking operations) 150,569 105,251 53,911
Cash from investing activities (1,981,967) (2,169,137) (1,178,089)
Financing activities:
Proceeds from debt finance 2,794,285 1,379,209 1,156,982
Proceeds from share issue – 1,105,197 –
Repayment of debt finance (2,623,463) (1,495,440) (1,357,997)
Repayments under lease obligations (3,915) – –
Dividends paid (736,156) (269,286) (277,605)
Minority capital contributions – 6,685 37,734
Net other cash flows from financing activities – – (7,742)
Cash from financing activities (569,249) 726,365 (448,628)
Effect of exchange rates on cash and cash equivalents 81,986 86,249 (70,551)
Net increase/(decrease) in cash and cash equivalents (154,141) 373,135 237,523
Cash and cash equivalents at beginning of the period 1,701,022 1,327,887 1,090,364
Cash and cash equivalents at end of the period 1,546,881 1,701,022 1,327,887
The accompanying notes form an integral part of these consolidated financial statements.