Net debt
Net debt was £22.3 billion at 31 March 2015 and includes liabilities for amounts payable under the domination agreement in relation to Kabel Deutschland (£1.3 billion) and deferred spectrum licence costs in India (£1.8 billion). This increased by £8.5 billion in the year as a result of the acquisition of Grupo Corporativo Ono, S.A., payments for spectrum licences and equity shareholders dividends which outweighed favourable foreign exchange movements and positive free cash flow.
Net debt represented 35.1% of our market capitalisation at 31 March 2015 compared to 23.5% at 31 March 2014. Average net debt at month end accounting dates over the 12 month period ended 31 March 2015 was £19.8 billion and ranged between net debt of £14.1 billion and £22.9 billion.
Our consolidated net debt position at 31 March was as follows:
2015 2014
£m £m
Cash and cash equivalents 6,882 10,134
Short-term borrowings
Bonds (1,786) (1,783)
Commercial paper1 (5,077) (950)
Put options over non-controlling interests2 (1,307) (2,330)
Bank loans (1,876) (1,263)
Other short-term borrowings3 (2,577) (1,421)
(12,623) (7,747) Long-term borrowings
Put options over non-controlling interests (7) (6)
Bonds, loans and other long-term borrowings (22,428) (21,448)
(22,435) (21,454)
Other financial instruments4 5,905 5,367
Net debt (22,271) (13,700)
Notes:
1 At 31 March 2015 US$3,321 million was drawn under the US commercial paper programme and €3,928 million was drawn under the euro commercial paper programme.
2 Includes a £1.3 billion (2014: £1.4 billion) liability for payments due to holders of the equity shares in Kabel Deutschland AG under the terms of a domination and profit and loss transfer agreement.
3 At 31 March 2015 the amount includes £2,542 million (2014: £1,185 million) in relation to cash received under collateral support agreements.
4 Comprises mark-to-market adjustments on derivative financial instruments which are included as a component of trade and other receivables (2015: £4,005 million; 2014: £2,443 million) and trade and other payables (2015: £984 million; 2014: £881 million) and short-term investments primarily in index linked government bonds and managed investment funds included as a component of other investments (2015: £2,884 million; 2014: £3,805 million).
Notes to the consolidated financial statements (continued)
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At 31 March 2015 we had £6,882 million of cash and cash equivalents which are held in accordance with the counterparty and settlement risk limits of the Board approved treasury policy. The main forms of liquid investment at 31 March 2015 were managed investment funds, money market funds, UK index linked government bonds, tri-party repurchase agreements and bank deposits.
The cash received from collateral support agreements mainly reflects the value of our interest rate swap and cross currency interest rate swap portfolios which are substantially net present value positive. See note 23 for further details on these agreements.
Commercial paper programmes
We currently have US and euro commercial paper programmes of US$15 billion and £5 billion respectively which are available to be used to meet short-term liquidity requirements. At 31 March 2015 amounts external to the Group of €3,928 million (£2,839 million) were drawn under the euro commercial paper programme and US$3,321 million (£2,237 million) were drawn down under the US commercial paper programme, with such funds being provided by counterparties external to the Group. At 31 March 2014 amounts external to the Group of €731 million (£604 million) were drawn under the euro commercial paper programme and US$578 million (£346 million) were drawn down under the US commercial paper programme, with such funds being provided by counterparties external to the Group.
The commercial paper facilities were supported by US$3.9 billion (£2.6 billion) and €3.9 billion (£2.8 billion) of syndicated committed bank facilities (see “Committed facilities” below). No amounts had been drawn under either bank facility.
Bonds
We have a €30 billion euro medium-term note programme and a US shelf programme which are used to meet medium to long-term funding requirements. At 31 March 2015 the total amounts in issue under these programmes split by currency were US$14.6 billion, £1.7 billion and
€7.8 billion.
At 31 March 2015 we had bonds outstanding with a nominal value of £17,153 million (2014: £16,979 million). In the year ended 31 March 2015 bonds with a nominal value equivalent of £2.2 billion were issued under the US shelf. The bonds issued in the year were:
Nominal amount Sterling equivalent
Date of bond issue Maturity of bond €m £m
11 September 2014 11 September 2020 1,750 1,265
11 September 2014 11 September 2025 1,000 723
1 December 2014 1 December 2034 332 240
Own shares
The Group held a maximum of 2,371,948,109 of its own shares during the year which represented 8.2% of issued share capital at that time.
Committed facilities
In aggregate we have committed facilities of approximately £10,991 million, of which £6,620 million was undrawn and £4,371 million was drawn at 31 March 2015. The following table summarises the committed bank facilities available to us at 31 March 2015.
Committed bank facilities Amounts drawn Terms and conditions
28 March 2014
€3.9 billion syndicated revolving credit facility, maturing 28 March 2020.
No drawings have been made against this facility. The facility supports our commercial paper programmes and may be used for general corporate purposes including acquisitions.
Lenders have the right, but not the obligation, to cancel their commitments and have outstanding advances repaid no sooner than 30 days after notification of a change of control. This is in addition to the rights of lenders to cancel their commitment if we commit an event of default; however, it should be noted that a material adverse change clause does not apply.
The facility matures on 28 March 2020, with each lender having the option to extend the Facility for a further year prior to the second anniversary of the Facility, if requested by the Company.
27 February 2015 US$3.9 billion syndicated revolving credit facility, maturing 27 February 2020.
No drawings have been made against this facility. The facility supports our commercial paper programmes and may be used for general corporate purposes including acquisitions.
Lenders have the right, but not the obligation, to cancel their commitments and have outstanding advances repaid no sooner than 30 days after notification of a change of control. This is in addition to the rights of lenders to cancel their commitment if we commit an event of default; however, it should be noted that a material adverse change clause does not apply.
The facility matures on 27 February 2020, with each lender having the option to (i) extend the Facility for a further year prior to the first anniversary of the Facility and should such extension be exercised, to (ii) extend the Facility for a further year prior to the second anniversary of the Facility, in both cases if requested by the Company.
27 November 2013
£0.5 billion loan facility,
maturing 12 December 2021. This facility was drawn down in full in euros, as allowed by the terms of the facility, on 12 December 2014.
As the syndicated revolving credit facilities with the addition that, should our UK and Irish operating companies spend less than the equivalent of
£0.9 billion on capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 50% of the capital expenditure.
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Committed bank facilities Amounts drawn Terms and conditions
28 July 2008
€0.4 billion loan facility,
maturing 12 August 2015. This facility was drawn down in full
on 12 August 2008. As the syndicated revolving credit facilities with the addition that, should our Italian operating company spend less than the equivalent of
€1.5 billion on capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 18% of the capital expenditure.
15 September 2009
€0.4 billion loan facility, maturing 30 July 2017.
This facility was drawn down in full on 30 July 2010.
As the syndicated revolving credit facilities with the addition that, should our German operating company spend less than the equivalent of
€0.8 billion on VDSL related capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 50% of the VDSL capital expenditure.
29 September 2009 US$0.7 billion export credit agency loan facility, final maturity date 19 September 2018.
This facility is fully drawn down and
is amortising. As the syndicated revolving credit facilities with the addition that the Company was permitted to draw down under the facility based upon eligible spend with Ericsson up until the final draw down date of 30 June 2011. Quarterly repayments of the drawn balance commenced on 30 June 2012 with a final maturity date of 19 September 2018.
8 December 2011
€0.4 billion loan facility,
maturing on 5 June 2020. This facility was drawn down in full
on 5 June 2013. As the syndicated revolving credit facilities with the addition that, should our Italian operating company spend less than the equivalent of
€1.3 billion on capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 50% of the capital expenditure.
20 December 2011
€0.3 billion loan facility,
maturing 18 September 2019. This facility was drawn down in full
on 18 September 2012. As the syndicated revolving credit facilities with the addition that, should our Turkish and Romanian operating companies spend less than the equivalent of €1.3 billion on capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 50% of the capital expenditure.
4 March 2013
€0.1 billion loan facility, maturing 4 December 2020.
This facility was drawn down in full on 4 December 2013.
2 December 2014 US$0.85 billion loan facility, maturing 2 June 2018.
This facility is undrawn and has an availability period of six months.
As the syndicated revolving credit facilities with the addition that the expenditure should be spent on projects involving Canadian domiciled entities.
17 December 2014
€0.35 billion loan facility, maturing on the seven year anniversary of the first drawing.
This facility is undrawn and has an availability period of 18 months.
The facility is available to finance a project to upgrade and expand the mobile network in Germany.
As the syndicated revolving credit facilities with the addition that, should our German operating company spend less than the equivalent of
€0.7 billion on capital expenditure, we will be required to repay the drawn amount of the facility that exceeds 50% of the capital expenditure.
Furthermore, certain of our subsidiaries are funded by external facilities which are non-recourse to any member of the Group other than the borrower. These facilities may only be used to fund their operations. At 31 March 2015 Vodafone India had facilities of INR 233 billion (£2.5 billion) of which INR 233 billion (£2.5 billion) was drawn. Vodafone Egypt had an undrawn revolving credit facility of EGP 4.0 billion (£353 million).
Vodacom had fully drawn facilities of ZAR 1.0 billion (£55 million). Ghana had external facilities of US$143 million (£96 million) and GHS 60 million (£11.0 million) both of which were fully drawn.
We believe that we have sufficient funding for our expected working capital requirements for at least the next 12 months. Further details regarding the maturity, currency and interest rates of the Group’s gross borrowings at 31 March 2015 are included in note 21 “Borrowings”.
Dividends from associates and to non-controlling shareholders
Dividends from our associates are generally paid at the discretion of the Board of Directors or shareholders of the individual operating and holding companies, and we have no rights to receive dividends except where specified within certain of the Group’s shareholders’ agreements. Similarly, other than ongoing dividend obligations to the KDG minority shareholders should they continue to hold their minority stake, we do not have existing obligations under shareholders’ agreements to pay dividends to non-controlling interest partners of our subsidiaries or joint ventures.
The amount of dividends received and paid in the year are disclosed in the consolidated statement of cash flows.
Potential cash outflows from option agreements and similar arrangements
Under the terms of the sale and purchase agreement governing the disposal of the US Group, including the 45% interest in Verizon Wireless, the Group retains the responsibility for any tax liabilities of the US Group, excluding those relating to the Verizon Wireless partnership, for periods up to the completion of the transaction on 21 February 2014.
Off-balance sheet arrangements
We do not have any material off-balance sheet arrangements as defined in item 5.E.2. of the SEC’s Form 20-F. Please refer to notes 29 and 30 for a discussion of our commitments and contingent liabilities.
Notes to the consolidated financial statements (continued)
22. Liquidity and capital resources (continued)
Vodafone Group PlcAnnual Report 2015