Annual report and accounts 2016

43
Cash flow
€ million 2016 2015
Higher/
(lower)
EBITDAR before
exceptional 4,581 4,301 280
Rentals (before
exceptional) (759) (659) (100)
EBITDA 3,822 3,642 180
Net interest (148) (149) 1
Tax (318) (245) (73)
Net capex (1,301) (1,767) 466
Equity Free Cash
Flow 2,055 1,481 574
Movement in working
capital and other 235 (575) 810
Pension and
restructuring (946) (671) (275)
Acquisition of
subsidiary (net of
cash and deposits) – (438) 438
Dividend paid (442) (163) (279)
Net financing and
refinancing 187 1,067 (880)
Other investing
movements 2 45 (43)
Other financing
movements (45) (184) 139
Cash inflow 1,046 562 484
Opening cash, cash
equivalents and
interest-bearing
deposits 5,856 4,944 912
Net foreign exchange
differences (474) 350 (824)
Cash and cash
equivalents and
other interestbearing
deposits 6,428 5,856 572
€ million 2016 2015
Higher/
(lower)
British Airways 2,958 2,806 152
Iberia 1,179 832 347
Aer Lingus 855 772 83
Vueling 648 633 15
IAG and other Group
companies 788 813 (25)
Cash and cash
equivalents and
interest-bearing
deposits 6,428 5,856 572
In 2016, the Group net CAPEX included delivery of 11 new
aircraft, two Airbus A380s, two Boeing 787-9s, four Airbus
A330s, and three aircraft from the Airbus A320 family. This
capital expenditure has been partially offset by €1,582 million of
proceeds from the sale and leaseback of 26 new aircraft (nine
Airbus A321 family, eight Airbus A330 family and nine Boeing
787-9s). The Group also received proceeds for the sale and
leaseback of 12 of its owned Airbus A319s, which were divested
to reduce any residual value risk.
In comparison, 2015 deliveries included nine new aircraft, two
Airbus A380s, five Boeing B787-9s, one Airbus A320 and one
Embraer E-190. In 2015 the Group sale and leaseback was
€111 million. The current year net CAPEX of €1,301 million is
below the Group’s long term planning goal of an average of
€1,700 million per annum.
Movements in Working capital generated a €235 million
increase in free cash flow primarily related to an increase in
sales in advance of carriage. In 2015, the significant use of cash
through working capital reflects higher prepayments including
fuel, a reduction in payables primarily with lower fuel prices, and
the addition of Aer Lingus from August 18, 2015.
Pension and restructuring payments are higher at British
Airways due to an increase in cash sweep of €403 million and
from a low base with some of the 2015 payment made in 2014.
In 2015, the acquisition of Aer Lingus net of its cash and
deposits was a cash outflow of €438 million.
In 2016, the cash Dividend paid reflects the 2015 final
dividend and the 2016 interim dividend. In 2015, the cash
dividend was only the 2015 interim dividend, the Group’s first
dividend payment.
Net financing and refinancing are discussed on the next page.
Taking these factors into consideration, the Group’s cash
in flow for the year was €1,046 million and after net foreign
exchange differences, the increase in cash net of exchange
was €572 million. Adequate cash levels are maintained by each
operating company.
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