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SPECIFIC
ITEMS
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Specific items for the 2007, 2006 and 2005 financial years
are shown in the table below.
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2007 |
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2006 |
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2005 |
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£m |
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£m |
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£m |
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Operating
costs:
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Property
rationalisation costs
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64 |
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68 |
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59 |
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Write
off of circuit inventory and other working capital
balances
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65 |
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– |
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– |
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Creation
of Openreach
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30 |
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70 |
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– |
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Costs
associated with settlement of open tax years
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10 |
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– |
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– |
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169 |
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138 |
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59 |
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Other
operating income:
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Net
loss on sale of group undertakings
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5 |
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– |
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– |
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Profit
on sale of non current asset investments
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(2 |
) |
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– |
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(358 |
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3 |
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– |
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(358 |
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Finance
income:
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Interest
on settlement of open tax years
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(139 |
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– |
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– |
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Associates
and joint ventures:
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Profit
on sale of joint venture
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– |
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(1 |
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– |
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Profit
on sale of associate
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(22 |
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– |
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– |
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Impairment
of assets in joint ventures
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– |
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– |
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25 |
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Net
specific items loss (profit) before tax
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11 |
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137 |
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(274 |
) |
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Tax
credit in respect of settlement of open tax years
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(938 |
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– |
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– |
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Tax
credit on specific items
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(41 |
) |
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(41 |
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(16 |
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Net
specific items loss (profit) after tax
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(968 |
) |
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96 |
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(290 |
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In the 2007
financial year, specific operating costs included £64
million of property rationalisation charges in relation
to the group’s provincial property portfolio. A further
£30 million was recognised for the incremental costs
associated with the creation of Openreach and complying
with the Undertakings agreed with Ofcom. A charge of £65
million was recognised as a result of a review of circuit
inventory and other working capital balances. During the
year, the group agreed the settlement of substantially
all open UK tax matters relating to ten tax years up to
and including 2004/05 with HM Revenue and Customs. The
total impact of this settlement was a net credit of £1,067
million comprising a tax credit of £938 million
representing those elements
of the tax charges previously recognised which were in
excess of the final agreed liability, interest income
of £139 million and operating costs of £10
million representing the costs associated with reaching
this agreement. The group also disposed of 6% of its equity
interest in its associate Tech Mahindra Limited resulting
in a profit on disposal of £22 million, in addition,
the group disposed of a number of non core businesses
in the 2007 financial year, resulting in a total loss
on disposal of £5 million. This principally comprised
a loss on disposal of £7 million relating to the
sale of satellite broadcast assets.
In
the 2006 financial year specific operating costs included
£68 million of property rationalisation charges
in relation to the group’s provincial property portfolio.
In addition, a provision of £70 million was recognised
relating to the incremental and directly attributable
costs to create Openreach arising from the Undertakings
agreed with Ofcom.
In
the 2005 financial year, the profit on disposal of non
current asset investments, included within other operating
income totalled £358 million. This mainly comprised
the sale of BT’s 15.8% interest in Eutelsat SA for
net proceeds of £356 million resulting in a profit
on disposal of £236 million, the sale of BT’s
4% interest in Intelsat for net proceeds of £64
million which resulted in a profit on disposal of £46
million and the sale of BT’s 11.9% interest in StarHub
Pte Ltd for net proceeds of £77 million resulting
in a profit on disposal of £38 million. In addition,
BT incurred an impairment charge of £25 million
being BT’s share of a write down of Albacom’s
assets prior to becoming a subsidiary. |
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