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Annual Review & Notice of Meeting 2007

Summary financial statement


Summary group income statement
for the year ended 31 March

Before specific items   Specific items a Total   Total  
  2007   2007   2007   2006  
  m   m   m   m  








Revenue 20,223     20,223   19,514








Operating profit 2,713   (172 ) 2,541   2,495
Net finance expense (233 ) 139   (94 ) (472 )
Share of post tax profit of associates and joint
    ventures
15     15   16
Profit on disposal of associate and joint ventures   22   22   1








Profit before taxation 2,495   (11 ) 2,484   2,040
Taxation (611 ) 979   368   (492 )








Profit for the year 1,884   968   2,852   1,548








Earnings per share         34.4 p 18.4 p
Earnings per share before specific items         22.7 p 19.5 p
Proposed dividends per share         15.1 p 11.9 p








a Specific items comprise items that are considered to be significant one-off or unusual items such as disposals of businesses and investments. Separate identification of these items is consistent with the way that financial performance is measured by management and assists in providing a meaningful analysis of the trading results of the group. The principal specific item in the 2007 financial year related to the settlement of substantially all open UK tax matters relating to tax years up to and including 2004/05 with HM Revenue & 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 on the repayment and operating costs of 10 million representing the costs associated with reaching this agreement. Specific items in the 2006 financial year amounted to a net cost of 96 million, mainly comprising property rationalisation costs and a provision for the costs of establishing Openreach as a separate line of business.

Line of business summary
for the year ended 31 March

    Revenue   Operating profit (loss)  
 



  2007   2006 a 2007   2006 a
  m   m   m   m  








BT Global Services 9,106   8,772   293   288
BT Retail 8,414   8,507   674   569
BT Wholesale 7,584   7,343   724   759
Openreach 5,177   5,142   1,177   1,183
Other 17   18   (327 ) (304 )
Intra-group (10,075 ) (10,268 )  








Group totals 20,223   19,514   2,541   2,495








a Restated to reflect the creation of Openreach.

Summary group cash flow statement
for the year ended 31 March

2007   2006  
  m   m  




Net cash inflow from operating activities 5,210   5,387
Net cash (used) received in investing activities (3,035 ) 365
Net cash used in financing activities (2,898 ) (5,278 )
Effects of exchange rate changes (37 )




Net (decrease) increase in cash and cash equivalents (760 ) 474
Cash and cash equivalents at the start of the year 1,784   1,310




Cash and cash equivalents at the end of the year 1,024   1,784




Free cash flowa      




Net cash inflow from operating activities 5,210   5,387
Net purchase of property, plant and equipment (3,209 ) (2,874 )
Net purchase of non-current asset investments (3 ) (1 )
Dividends received from associates 6   1
Net interest paid (650 ) (901 )




Free cash flow 1,354   1,612




aFree cash flow is defined as the net increase in cash and cash equivalents less cash flows from financing activities (except interest paid) and less the acquisition or disposal of group undertakings and less the net sale of short term investments.

Summary group balance sheet
at 31 March

2007   2006 a
  m   m  




Property, plant and equipment 14,997   15,222




Other non-current assets 3,343   3,061
Current assets 5,815   6,417
Current liabilities (9,617 ) (9,480 )




  14,538   15,220




Non-current liabilities 10,266   13,613
Parent shareholders equity 4,238   1,555
Minority interests 34   52




14,538   15,220




aComparative amounts have been reclassified to conform with the presentation adopted in the 2007 financial year.

This summary financial statement was approved by the Board of Directors on 16 May 2007 and was signed on its behalf by:

Sir Christopher Bland Ben Verwaayen Hanif Lalani
Chairman Chief Executive Group Finance Director
 

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