Capitalisation and shareholder return
All data in this section are on an actual basis (unless noted otherwise).
SUMMARY OF SHAREHOLDER DISTRIBUTIONS
| Shares re-purchased (million) |
Cost $m |
Dividend per share $ |
Total dividend cost $m |
Total shareholder distributions $m |
|
|---|---|---|---|---|---|
| 1999 | 4.4 | 183 | 0.700 | 1,242 | 1,425 |
| 2000 | 9.4 | 352 | 0.700 | 1,236 | 1,588 |
| 2001 | 23.5 | 1,080 | 0.700 | 1,225 | 2,305 |
| 2002 | 28.3 | 1,190 | 0.700 | 1,206 | 2,396 |
| 2003 | 27.2 | 1,154 | 0.795 | 1,350 | 2,504 |
| 2004 | 50.1 | 2,212 | 0.940 | 1,555 | 3,767 |
| 2005 | 67.7 | 3,001 | 1.300 | 2,068 | 5,069 |
| 2006 | 72.2 | 4,147 | 1.720 | 2,649 | 6,796 |
| 2007 | 79.9 | 4,170 | 1.870 | 2,740* | 6,910* |
| Total | 362.7 | 17,489 | 9.425 | 15,271 | 32,760 |
*Total dividend cost estimated based upon number of shares in issue at 31 December 2007.
Capitalisation
At 31 December 2007, the number of shares in issue was 1,457 million. During the year, 4.7 million shares were issued in consideration of share option plans and employee share plans for a total of $218 million. Reserves increased by $339 million due to the effect of exchange rate and tax movements offset by actuarial losses, net investment hedging losses of non-US dollar denominated debt, losses on cash flow hedges issued in anticipation of the debt issues and holding losses on available for sale investments.
Shareholders’ equity decreased by a net $526 million to $14,778 million at the year end. Minority interests increased from $112 million at 31 December 2006 to $137 million at 31 December 2007.
Dividend and share re-purchases
During 2007, we returned $6,811 million to shareholders through a mix of share re-purchases and dividends. We have re-purchased and cancelled 79.9 million shares in 2007 at a cost of $4,170 million. As a result, the total number of shares re-purchased to date under the share re-purchase programmes begun in 1999 is 362.7 million (over 20% of our initial share capital post merger) at a cumulative cost of $17,489 million.
The Board’s distribution policy and its overall financial strategy is to strike a balance between the interests of the business, our shareholders and our financial creditors, whilst maintaining a strong investment grade credit rating. The Board expects to undertake share re-purchases in the region of $1 billion in 2008, subject to business needs.
After investing fully in opportunities to strengthen the pipeline, the Board intends to continue its stated policy of growing dividends in line with earnings before restructuring and synergy costs (aiming to maintain at least two times dividend cover) whilst applying the balance of cash flow to debt servicing and repayment and share re-purchases. We paid the second interim dividend of $1.23 in respect of 2006 on 19 March 2007 and a first interim dividend for 2007 on 17 September 2007 of $0.52 per Ordinary Share. A second interim dividend for 2007 of $1.35 per Ordinary Share has been declared, which the Annual General Meeting will be asked to confirm as the final dividend.
