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	Financial statistics Years ended 31 March
	IFRS 2007   2006   2005     Financial ratios             Basic earnings per share before specific items – pence 22.7   19.5   18.1   Basic earnings per share – pence 34.4   18.4   21.5   Return on capital employed before specific itemsa – % (unaudited) 17.6   18.1   18.2   Interest cover before net pension finance incomeb – times (unaudited) 4.2   3.6   3.4     2007 2006 2005   £m   £m   £m     Expenditure on research and development             Research and development expense 378   326   257   Amortisation of internally developed computer software 314   161   95     Total 692   487   352     2007 2006 2005   £m   £m   £m     Expenditure on property, plant and equipment and software             Plant and equipment                Transmission equipment 1,209   1,429   1,488      Exchange equipment 118   80   143      Other network equipment 854   727   648      Computers and office equipment 149   138   187      Motor vehicles and other 877   715   474   Land and buildings 61   68   64       3,268   3,157   3,004   (Decrease) increase in engineering stores (21 ) (15 ) 7     Total expenditure on property, plant and equipment 3,247   3,142   3,011   Decrease (increase) in payables 51   (202 ) 45     Cash outflow on purchase of property, plant and equipment and software 3,298   2,940   3,056     a The ratio is based on profit before taxation and net finance expense to average capital employed. Capital employed is represented by total assets less current liabilities (excluding corporation tax, current borrowings, derivative financial liabilities and finance lease creditors) less deferred tax assets, cash and cash equivalents, derivative financial assets and investments. b The number of times net finance expense before net pension finance income is covered by total operating profit. Interest cover including net pension finance income is 11.6 times (2006: 5.6 times, 2005: 4.5 times).   UK GAAP 2005   2004   2003     Financial ratios           Basic earnings per share before goodwill amortisation and exceptional items – pence 18.1   16.9   14.4   Basic earning per share – pence 21.4   16.4   31.4   Return on capital employeda – % (unaudited) 15.5 c 15.1 c 15.5   Interest coverb – times (unaudited) 3.5 d 3.0 d 2.0       2005   2004   2003     £m   £m   £m     Expenditure on research and development 257   334   380       2005   2004   2003     £m   £m   £m     Expenditure on property plant and equipment and software             Plant and equipment                Transmission equipment 1,488   1,324   1,277      Exchange equipment 143   150   228      Other network equipment 648   585   466      Computers and office equipment 187   205   281      Motor vehicles and other 474   316   162   Land and buildings 64   73   40       3,004   2,653   2,454   Increase (decrease) in engineering stores 7   20   (9 )   Total expenditure on property plant and equipment 3,011   2,673   2,445   Decrease in payables 45   11   135     Cash outflow on purchase of property plant and equipment and software 3,056   2,684   2,580     a The ratio is based on profit before tax, goodwill amortisation and interest on long-term borrowings, to average capital employed. b The number of times net interest payable is covered by total operating profit before goodwill amortisation. c Return on capital employed before goodwill amortisation and exceptional items was 16.0% (2004 – 15.3%) d Interest cover before goodwill amortisation and exceptional items was 3.6 times (2004 – 3.3 times)

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