TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Profit for the year
Profit for the year, excluding special items, totalled DKK
3,498m, up by DKK 610m or 21.1% compared with 2010.
The increase resulted mainly from improved EBITDA, fewer
amortisation costs and lower net financial expenses
resulting primarily from the positive development in fair
value adjustments and the effects of the refinancing
completed in Q1 2011.
Profit for the year, including special items, amounted to DKK
2,808m, corresponding to a decrease of DKK 199m or
6.6%. Profit from discontinued operations declined due to
the divestment of Sunrise in 2010, while net expenses from
special items developed positively as a result of a DKK
287m decrease in restructuring costs as well as the gain
from divestment of shares in Nawras.
Comprehensive income
The increase in total comprehensive income from DKK
2,636m in 2010 to DKK 3,127m in 2011 reflected mainly
the positive development in actuarial gains and losses,
which totalled a gain of DKK 276m in 2011 compared with a
loss of DKK 515m in 2010. The actuarial gains in 2011
covered favourable returns on the domestic pension funds’
assets, in particular in Q4, partly offset by losses due to an
increasing pension obligation resulting from adjusted
mortality assumptions. The actuarial losses in 2010 were
primarily the result of a decreasing discount rate during
2010.
Capital expenditure
In 2011, capital expenditure totalled DKK 3,421m
corresponding to the targeted 13.0% of revenue. Compared
with 2010, this amounted to a decrease of 3.2%. The
decrease resulted mainly from lower investments in the
landline network. Increased investments in IT and Nordic
partly offset the decline in capital expenditure.
In 2011, TDC carried through significant investments in
TDC’s high-speed mobile network with build-out of the 3G
and 4G networks. The expansion of the fibre access network
continued, resulting in an extra 100,000 households within
reach of fibre. A considerable increase in the sale of
HomeTrio installations caused significant installation
activity in Q4.
TDC Group Annual Report 2011
Cash flows
Equity free cash flow increased by DKK 79m or 1.7% to DKK
4,594m due mainly to a decrease of DKK 777m in interest
paid, partly offset by a change in net working capital that
was DKK 638m below the figure for the previous year:
• The lower interest paid was a result of the refinancing in
Q1 2011 as well as two non-recurring effects. Realisation
of fair market value gains due to declining interest rates
on fixed-to-floating swaps entered into in connection with
the refinancing yielded approximately DKK 490m. This
effect was partly offset by the early termination of
interest-rate swaps related to the Senior Facilities
Agreement and full termination of prehedges of the
EMTN issuance totalling DKK 218m. The net proceeds
from these swaps were utilised for further on-account tax
payments, resulting in reduced outstanding income tax
payables at year-end 2011.
• The negative DKK 67m change in net working capital in
2011 was caused by reduced operating expenses and
capital expenditure resulting in lower payables, as well as
increased receivables due to the introduction of the TDC
Rate instalment product.
• In addition, improved EBITDA and lower investments in
PPE and intangible assets contributed to the increase in
the EFCF, partly offset by higher income tax paid.
Cash outflow from financing activities in continuing
operations amounted to DKK 2,815m, reflecting a lower
outflow of DKK 17,276m or 86.0%. The lower outflow was
due largely to the buy-back of shares in 2010 and lower
repayments of debt. This was only partly counterbalanced
by the payment of dividends in 2011.
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