Condensed cash flow statement
| Amounts in SEK million unless indicated otherwise | 2008 | 2007 | change, % | |
| 1 | Funds from operations (FFO) | 30 735 | 34 049 | -9,7 |
| Cash flow from operating assets and operating liabilities | 5 459 | -1 718 | n.a. | |
| 1 | Cash flow from operating activities | 36 194 | 32 331 | 11,9 |
| 2 | Cash flow from investing activities | -41 273 | -18 037 | 128,8 |
| 3 | Cash flow from financing activities | 14 294 | -18 662 | n.a. |
| Cash flow for the year | 9 215 | -4 368 | n.a. | |
| Free cash flow2 | 18 963 | 19 650 | -3,5 |
See complete Cash flow statement on "Consolidated cash flow statement"
2) Free cash flow = Cash flow from operating activities less maintenance investments.
1 Cash flow from operating activities
Cash flow from operating activities improved by SEK 3,863 million, which is due to a decrease in funds from operations by SEK 3,314 million and an improvement in operating capital by SEK 7,177 million. The decrease in funds from operations is mainly attributable to a slightly lower profit compared with 2007 and lower depreciation for nuclear power operations. The increase in operating capital for 2008 includes a positive effect from the time delay in payment of CO2 emission allowances for 2008 pertaining to the Mining & Generation business unit in Germany.
| Amounts in SEK million | 2008 | 2007 |
| Profit before taxes | 23,498 | 23,933 |
| Depreciation, amortisation and impairment losses | 16,060 | 17,252 |
| Tax paid | -8,203 | -8,132 |
| Undistributed results from participation in associated companies | -359 | -125 |
| Unrealised foreign exchange gains | -392 | -86 |
| Unrealised foreign exchange losses | 5,720 | 1,254 |
| Unrealised items related to derivatives | -4,778 | -1,253 |
| Capital gains | -202 | -541 |
| Capital losses | 78 | 444 |
| Change in interest receivables | -380 | -226 |
| Change in interest liabilities | 1,108 | 607 |
| Change in the Swedish Nuclear Waste Fund | -1,108 | -822 |
| Change in provisions | -307 | 1,744 |
| Total | 30,735 | 34,049 |
Interest paid totalled SEK 3,846 million (2,902), and interest received totalled SEK 1,679 million (1,420). Dividends received totalled SEK 1,140 million (952).
2 Cash flow from investing activities
Investments in 2008 are broken down as follows: 42% Business Group Central Europe, 36% Business Group Nordic and 22% for the segment “Other”.
Maintenance investments in 2008 are broken down as follows: Business Group Central Europe SEK 9.5 billion, Business Group Nordic SEK 7.4 billion, and Other SEK 0.3 billion. Growth investments are broken down as follows: Business Group Central Europe SEK 8.4 billion, Business Group Nordic SEK 7.5 billion, and Other SEK 9.1 billion. Of these investments, investments in equities consisted primarily of: ENEA S.A. SEK 4.6 billion (18.7% stake), the redemption of minority shares in Vattenfall Europe AG SEK 3.9 billion, and a number of British wind power companies (AMEC Wind Ltd SEK 1.6 billion, Eclipse Wind Energy UK Plc SEK 0.6 billion, and Thanet Offshore Wind Ltd SEK 0.4 billion). During the year Vattenfall made divestments of SEK 865 million (925). (For further information, see Note 42 to the consolidated accounts.)
Investment programme 2009-2013
As a result of the announcement of Vattenfall’s offer for the Dutch company Nuon on 23 February 2009, a reprioritisation of the investment programme for 2009-2013 has been made, from SEK 202 billion previously, to SEK 191 billion.
However, compared with the five-year period 2008-2012, when the investment programme amounted to SEK 173 billion, this entails an increase of SEK 18 billion. The total investment amount is broken down as follows: Business Group Nordic SEK 81 billion and Business Group Central Europe SEK 110 billion. Investments of SEK 158 billion are planned in generation (2008-2012: SEK 133 billion), and investments of SEK 32 billion are planned in the network operations (2008-2012: SEK 40 billion). The expanded investment programme is mainly attributable to higher investment costs in all markets as well as new CO2 emission-related investments and greater investments in renewable energy. The lower investment amount for the electricity network operations is mainly due to the fact that Vattenfall plans to sell its German high-voltage transmission grid in 2009. No decision on the sale has been made yet.
3 Cash flow from financing activities
Total interest-bearing liabilities, including Capital Securities, increased by 59.8% to SEK 107,347 million (67,189). The rating agencies classify a large part of the Capital Securities as equity (Moody’s 75% and Standard & Poor’s 50%). For further information on Capital Securities, see Note 33 to the consolidated accounts. In 2008 loans were amortised in the amount of SEK 4,457 million, while new borrowing amounted to SEK 31,797 million (of which Vattenfall Treasury accounted for SEK 24,291 million in long-term loans and SEK 1,843 million in the form of a Credit Support Annex (CSA)). In addition, Vattenfall’s majority-owned nuclear power companies Forsmark and Ringhals increased their part-owner loans by SEK 816 million, which is reported as external borrowings. (Loans raised include Vattenfall’s loans from minority-owned Germany nuclear power companies, totalling SEK 4,283 million.) New borrowing consisted primarily of several small private placements and two large Eurobond issues totalling EUR 1.5 billion under Vattenfall’s EMTN programme, with durations of 5 and 10 years, respectively.
The Group’s net debt increased by 50.9% to SEK 66,000 million (43,740). As per 31 December 2008, the average fixed-interest period was 2.9 years (3.3), and the average remaining maturity for net debt was 6.5 years (6.7). Excluding Capital Securities, the average fixed-interest period was 2.4 years and the average maturity was 6.5 years. All public funding is conducted via Vattenfall Treasury AB under guarantee from Vattenfall AB.
Factors that have affected the change in cash flow
Investments
Investment programme 2009-2013
| Nordic | Central Europe | Other | Total | |||||
| SEK million | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| Electricity generation | ||||||||
| Hydro power | 1,095 | 1,038 | 165 | 191 | - | - | 1,261 | 1,229 |
| Nuclear power | 3,499 | 2,935 | 84 | 82 | - | - | 3,583 | 3,017 |
| Fossil-based power | 8 | 15 | 8,032 | 1,408 | - | - | 8,040 | 1,423 |
| Wind power | 2,525 | 997 | 49 | 1 | - | - | 2,574 | 998 |
| Biomass, waste | - | - | 488 | 706 | - | - | 488 | 706 |
| Other | - | - | - | - | - | - | - | - |
| Total Electricity Generation | 7,127 | 4,985 | 8,818 | 2,388 | - | - | 15,945 | 7,373 |
| Heat | ||||||||
| Fossil-based power | 998 | 1,357 | 1,181 | 1,110 | - | - | 2,179 | 2,467 |
| Biomass, waste | 693 | 187 | 13 | 20 | - | - | 706 | 207 |
| Other | 279 | 227 | 447 | 381 | - | - | 726 | 608 |
| Total Heat | 1,970 | 1,771 | 1,641 | 1,511 | - | - | 3,611 | 3,282 |
| Electricity networks | ||||||||
| Electricity networks | 3,306 | 3,417 | 3,008 | 1,809 | - | - | 6,314 | 5,226 |
| Other | - | - | - | - | - | - | - | - |
| Total Electricity Networks | 3,306 | 3,417 | 3,008 | 1,809 | - | - | 6,314 | 5,226 |
| Purchases of shares | 2,2361 | -82 | 445 | 195 | 9,1392 | - | 11,820 | 113 |
| Other, excl. shares | 346 | 716 | 4,002 | 2,214 | 258 | 40 | 4,606 | 2,970 |
| Total | 14,985 | 10,807 | 17,914 | 8,117 | 9,397 | 40 | 42,296 | 18,964 |
1) SEK 2,194 million pertains to acquisitions of wind power companies in the UK. The acquisitions of the British companies AMEC Wind Ltd and Thanet Offshore Wind Ltd were reported in 2008 under Business Group Nordic.
2) SEK 592 million pertains to the acquisition of the British wind power company Eclipse Wind Energy UK Plc, SEK 4.6 billion pertains to 18.7% of the Polish energy company ENEA S.A., and SEK 3.9 billion pertains to the redemption of minority shares in Vattenfall Europe AG.
