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114 Vodafone Group Plc Annual Report 2006
Notes to the Consolidated Financial Statements
continued
29. Discontinued operations and disposals
Japan – Vodafone K.K.
On 17 March 2006, the Group announced an agreement to sell its 97.7% holding in Vodafone K.K. to SoftBank. The transaction completed on 27 April 2006 with the Group receiving
cash of approximately ¥1.42 trillion (£6.9 billion) including the repayment of intercompany debt of ¥0.16 trillion (£0.8 billion). In addition, the Group received non-cash consideration
with a fair value of approximately ¥0.23 trillion (£1.1 billion), comprised of preferred equity and a subordinated loan. SoftBank also assumed debt of approximately ¥0.13 trillion (£0.6
billion). Vodafone K.K. represented a separate geographical area of operation. On this basis, Vodafone K.K. has been treated as a discontinued operation.
Income statement and segment analysis of discontinued operation 2006 2005
£m £m
Service revenue 5,264 5,610
Equipment and other revenue 2,004 1,786
Segment revenue 7,268 7,396
Inter-segment revenue (2) (1)
Net revenue 7,266 7,395
Operating expenses (5,667) (5,417)
Depreciation and amortisation(1) (1,144) (1,314)
Impairment loss (4,900) –
Operating (loss)/profit (4,445) 664
Non operating income and expense –13
Net financing costs (3) (11)
(Loss)/profit before taxation (4,448) 666
Taxation relating to performance of discontinued operations 7436
Taxation relating to the classification of the discontinued operations (147) –
(Loss)/profit for the financial year from discontinued operations (4,588) 1,102
(Loss)/earnings per share from discontinued operations 2006 2005
Pence per share Pence per share
Basic (loss)/earnings per share (7.35) 1.56
Diluted (loss)/earnings per share (7.35) 1.56
Note:
(1) including gains and losses on disposal of fixed assets
Assets and liabilities of disposal group at 31 March 2006 2006
£m
Intangible assets 3,957
Property, plant and equipment 4,546
Other investments 29
Cash and cash equivalents 161
Inventory 131
Trade and other receivables 1,113
Deferred tax asset 655
Total assets 10,592
Current taxation liability (1)
Short and long-term borrowings (677)
Trade and other payables (1,579)
Deferred tax liabilities (246)
Other liabilities (40)
Total liabilities (2,543)