5. Investment income and financing costs

Notes to the consolidated
financial statements

	2010 £m	2009 £m	2008 £m
Investment income:
Available-for-sale investments:
Dividends received	145	110	72
Loans and receivables at amortised cost	423	339	451
Fair value through the income statement (held for trading):
Derivatives – foreign exchange contracts	3	71	125
Other⁽¹⁾	92	275	66
Equity put rights and similar arrangements⁽²⁾	53	–	–
	716	795	714
Financing costs:
Items in hedge relationships:
Other loans	888	782	612
Interest rate swaps	(464)	(180)	61
Dividends on redeemable preference shares	56	53	42
Fair value hedging instrument	228	(1,458)	(635)
Fair value of hedged item	(183)	1,475	601
Cash flow hedges transferred from equity	82	–	–
Other financial liabilities held at amortised cost:
Bank loans and overdrafts	591	452	347
Other loans⁽³⁾	185	440	390
Potential interest on settlement of tax issues⁽⁴⁾	(178)	(81)	399
Equity put rights and similar arrangements⁽²⁾	94	627	143
Finance leases	7	1	7
Fair value through the income statement (held for trading):
Derivatives – forward starting swaps and futures	206	308	47
	1,512	2,419	2,014
Net financing costs	796	1,624	1,300

Notes:
(1): Amounts include foreign exchange gains on certain intercompany balances and investments held following the disposal of Vodafone Japan to SoftBank.
(2): Includes amounts in relation to the Group’s arrangements with non-controlling shareholders in India. Further information is provided in “Option agreements and similar arrangements”.
(3): Amount for 2010 includes £48 million (2009: £94 million) of foreign exchange losses arising from net investments in foreign operations.
(4): Amount for 2010 and 2009 includes a reduction of the provision for potential interest on tax issues.