BT 2001 Annual Report Download - page 133

Pro forma financial information
British Telecommunications plc and subsidiaries
Introduction
The following unaudited pro forma condensed combined statements of operations for the years ended 31 March 2001, 2000 and
1999 give pro forma e¡ect to (a) the acquisition of Viag Interkom GmbH & Co. (‘‘Viag Interkom’’) and (b) the related ¢nancings,
as if each of these transactions had occurred on 1 April 2000, and (c) the probable demerger of BT Wireless, and (d) the probable
demerger or sale of Yell, as if each of these transactions had occurred on 1 April 1998. The unaudited pro forma condensed
combined balance sheet as of 31 March 2001 gives e¡ect to (a) the probable demerger of BT Wireless and (b) the probable
demerger or sale of Yell as if each such transaction had occurred on that date.
The unaudited pro forma condensed combined statements of operations and balance sheet have been prepared based upon
BT’s audited annual consolidated ¢nancial statements for the years ended 31 March 2000 and 31 March 1999, BT’s audited annual
consolidated ¢nancial statements as of and for the year ended 31 March 2001, and the audited consolidated ¢nancial statements of
Viag Interkom for the year ended 31 December 2000, each included elsewhere or incorporated by reference in this Annual Report
on Form 20-F, and based upon other available information and assumptions which management believes are reasonable.
BT has a year-end of 31 March, Viag Interkom had a year end 31 December. As a result, the period for which a consolidated
result of operations of Viag Interkom has been obtained and re£ected in the unaudited pro forma condensed consolidated
statement of operations does not exactly conform to the reporting period presented therein.
The acquisition of Viag Interkom has been accounted for using the purchase method of accounting under UK and US GAAP.
Assets and liabilities have been recorded at their estimated fair values at the date of purchase. The fair value adjustments
included in the unaudited condensed statement of operations for the year ended 31 March 2001 represent BT’s preliminary
determination of these adjustments based upon available information and assumptions which management believes are
reasonable.
Upon receipt of the necessary approvals required to e¡ect the probable sale or demergers, BT will report BT Wireless and
Yell as discontinued operations under US GAAP, in accordance with APB Opinion No. 30 ‘‘Reporting the Results of Operations ^
Reporting the E¡ects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions’’.
No account has been taken within the unaudited pro forma condensed combined statements of operations of any costs
associated with the demerger or any future changes in administrative costs incurred or charged from BT which may or are
expected to occur as a result of the demerger of BT Wireless or the demerger or sale of Yell.
There can be no assurance that the actual results of Future BT, BT Wireless or Yell will not di¡er signi¢cantly from the pro
forma ¢gures re£ected in the unaudited ¢nancial information presented herein.
The pro forma condensed combined statements of operations and balance sheet are for information only. The pro forma
condensed combined statements of operations do not purport to represent our consolidated results of operations had the demerger
of BT Wireless and the demerger or sale of Yell actually occurred on 1 April 1998, and had the acquisition of Viag Interkom
actually occurred on 1 April 2000, nor are they intended to represent results which may occur in the future.
The pro forma ¢nancial information has been prepared in accordance with UK GAAP, which di¡ers in certain signi¢cant
respects from US GAAP as described in note 9 of the unaudited pro forma condensed combined ¢nancial statements.
In preparing the unaudited pro forma condensed combined ¢nancial statements, certain adjustments were identi¢ed and
made to re£ect the di¡erences between UK GAAP, as applied by BT and German GAAP, as applied by Viag Interkom. For the
purpose of presenting the unaudited pro forma condensed consolidated ¢nancial information, the Viag Interkom statement of
operations has been conformed to UK GAAP.
These unaudited pro forma condensed combined ¢nancial statements should be read in conjunction with the ¢nancial review,
BT’s audited consolidated ¢nancial statements, including the notes to those statements appearing elsewhere in this Annual
Report on Form 20-F for the ¢nancial year ended 31 March 2001 and the audited consolidated ¢nancial statements of Viag
Interkom and the related notes thereto, furnished to the US Securities and Exchange Commission on Form 6-K dated 10 May 2001.
Unaudited pro forma condensed combined financial statements
BT Annual report and Form 20-F 133