BT 2001 Annual Report Download - page 137

Notes to the pro forma consolidated financial information
The 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 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 transaction
hadoccurredonthatdate.
1. BT historical information
The historical information included in the unaudited pro forma condensed combined balance sheet and statement of operations as
of and for the years ended 31 March 2001 and for the years ended 31 March 2000 and 1999 has been extracted from our audited
consolidated ¢nancial statements as of 31 March 2001 and for the three years then ended, included in this Annual Report on
Form 20-F.
2. Historical Viag Interkom
The historical Viag Interkom ¢nancial information incorporated by reference in the unaudited pro forma condensed combined
statement of operations for the year ended 31 March 2001 has been derived from the pro¢t and loss account included in the
audited consolidated ¢nancial statements of Viag Interkom as of and for the year ended 31 December 2000 incorporated by
reference in this document.
The historical consolidated ¢nancial statements of Viag Interkom are presented in Deutsche Marks. The historical pro¢t and
loss account of Viag Interkom for the year ended 31 December 2000 has been translated into Sterling at the average exchange rate
for the year of 3.2108 Deutsche Marks to one pound Sterling. It should be noted that such translation should not be construed as
representations that the Deutsche Mark amounts actually represent such Sterling amounts, or could have been or will be
converted at the rate indicated or at all.
Historical Viag Interkom ¢nancial information has been included in the pro forma ¢nancial statements on a UK GAAP basis.
The historical consolidated ¢nancial statements of Viag Interkom were prepared in accordance with accounting principles
generally accepted in Germany (‘‘German GAAP’’), which di¡ers in certain material respects from UK GAAP.
For the purposes of preparing the unaudited pro forma condensed combined ¢nancial information, the translated historical
pro¢t and loss account of Viag Interkom for the year ended 31 December 2000 has been restated as if UK GAAP had applied by
giving e¡ect to the following adjustment:
Depreciation
Under German GAAP, the depreciable life of ¢xed assets is determined in accordance with lives speci¢ed by German tax
regulations. Under UK GAAP, the depreciable life of ¢xed assets is based on the estimated useful life of the underlying asset
regardless of the tax regulations. The historical depreciation expense reported by Viag Interkom for the year ended 31 December
2000 has been decreased by »46 million to be restated in accordance with UK GAAP.
3. Viag Interkom purchase accounting, financing and elimination adjustments
The Group’s interest in Viag Interkom was accounted for as a joint venture investment under the equity method of accounting in
the period 1 April 2000 to 19 February 2001 and as a subsidiary in the period 20 February 2001 to 31 March, 2001. For the
purposes of the pro forma statement of operations for the year ended 31 March 2001, adjustments have been made to account for
Viag Interkom as though it had been acquired on 1 April 2000.
BT Annual report and Form 20-F 137