1998

1997

1996

Notes

£m

£m

£m

Turnover

1

15,640

14,935

14,446

Other operating income (a)

2

372

106

103

Operating costs (b)

3

(12,355)

(11,796)

(11,449)

Operating profit

3,657

3,245

3,100

Group’s share of profits (losses) of associated undertakings

(252)

139

82

Profit on sale of group undertakings

4

63

8

7

Interest receivable

5

165

206

201

Interest payable

6

(414)

(335)

(371)

Premium on repurchase of bonds

7

–

(60)

–

Profit on ordinary activities before taxation

3,219

3,203

3,019

Tax on profit on ordinary activities:

Corporation and similar taxes

(978)

(1,102)

(1,027)

Windfall tax

(510)

–

–

(1,488)

(1,102)

(1,027)

Profit on ordinary activities after taxation

1,731

2,101

1,992

Minority interests

(25)

(24)

(6)

Profit for the financial year

1,706

2,077

1,986

Dividends:

9

Ordinary

(1,220)

(1,266)

(1,184)

Special

–

(2,244)

–

(1,220)

(3,510)

(1,184)

Retained profit (transfer from reserves) for the financial year

23

486

(1,433)

802

Earnings per share

10

26.7p

32.8p

31.6p

Earnings per share before exceptional items

31.7p

32.8p

31.6p

Fully diluted earnings per share

26.3p

32.2p

31.0p

Fully diluted earnings per share before exceptional items

31.2p

32.2p

31.0p

(a) Including MCI merger break up fee net of expenses

238

–

–

(b) Including redundancy charges

106

367

421

1998

1997

1996

£m

£m

£m

Profit for the financial year

1,706

2,077

1,986

Currency movements arising on consolidation of foreign subsidiary and associated undertakings

(74)

(76)

42

Total recognised gains and losses

1,632

2,001

2,028

1998

1997

1996

Notes

£m

£m

£m

Net cash inflow from operating activities

11

6,076

6,192

5,834

Returns on investments and servicing of finance

Interest received

168

196

202

Interest paid, including finance costs

(328)

(342)

(332)

Premium paid on repurchase of bonds

–

(60)

–

Dividends paid to minorities

–

(14)

(20)

Net cash outflow for returns on investments and servicing of finance

(160)

(220)

(150)

Taxation

UK corporation tax paid

(1,625)

(1,032)

(738)

Windfall tax paid

(255)

–

–

Overseas tax paid

(6)

(13)

(46)

Tax paid

(1,886)

(1,045)

(784)

Capital expenditure and financial investment

Purchase of tangible fixed assets

(3,020)

(2,823)

(2,547)

Sale of tangible fixed assets

127

124

88

Purchase of fixed asset investments

(265)

(172)

(85)

Disposal of fixed asset investments

50

51

44

Net cash outflow for capital expenditure and financial investment

(3,108)

(2,820)

(2,500)

Acquisitions and disposals

Purchase of subsidiary undertakings, net of £6m (1997 – £2m, 1996 – £1m)

cash acquired

(121)

(126)

(26)

Purchase of associated undertakings

(1,380)

(148)

(122)

Sale of subsidiary undertakings

–

11

16

Sale of associated undertakings

–

11

–

Net cash outflow for acquisitions and disposals

(1,501)

(252)

(132)

Equity dividends paid

(3,473)

(1,217)

(1,138)

Cash inflow (outflow) before management of liquid resources and financing

(4,052)

638

1,130

Management of liquid resources

12

2,247

(504)

(1,317)

Financing

Issue of ordinary share capital

144

160

130

Minority shares issued

48

51

59

New loans

1,637

35

175

Loan repayments

(338)

(670)

(133)

Net increase (decrease) in short-term borrowings

303

200

(16)

Net cash inflow (outflow) from financing

1,794

(224)

215

Increase (decrease) in cash in the year

(11)

(90)

28

Decrease (increase) in net debt in the year

13

(3,860)

849

1,319

Group

Company

1998

1997

1998

1997

Notes

£m

£m

£m

£m

Tangible assets

14

17,252

16,802

14,899

14,493

Investments

15

1,708

1,273

7,808

6,599

Total fixed assets

18,960

18,075

22,707

21,092

Current assets

Stocks

145

180

124

159

Debtors

16

3,387

3,807

4,918

4,013

Investments

17

731

2,974

15

2,909

Cash at bank and in hand

62

26

1

–

Total current assets

4,325

6,987

5,058

7,081

Creditors: amounts falling due within one year

Loans and other borrowings

18

881

483

3,282

2,316

Other creditors

20

6,081

9,171

6,043

9,005

Total creditors: amounts falling due within one year

6,962

9,654

9,325

11,321

Net current liabilities

(2,637)

(2,667)

(4,267)

(4,240)

Total assets less current liabilities

16,323

15,408

18,440

16,852

Creditors: amounts falling due after more than one year

Loans and other borrowings

18

3,889

2,693

4,126

3,493

Provisions for liabilities and charges

21

1,426

1,391

1,269

1,341

Minority interests

223

208

–

–

Capital and reserves

Called up share capital

22

1,603

1,589

1,603

1,589

Share premium account

23

892

675

892

675

Other reserves

23

776

777

749

750

Profit and loss account

23

7,514

8,075

9,801

9,004

Total equity shareholders’ funds

23

10,785

11,116

13,045

12,018

16,323

15,408

18,440

16,852