BT 2002 Annual Report Download - page 36

resulted in an impairment in goodwill of £3,000 million, of
which £200 million related to BT's continuing activities.
Other exceptional items within operating costs in the
2001 ®nancial year included a credit of £193 million for the
refund of rates on BT's infrastructure following a successful
legal action taken by BT in 2000 to challenge the rateable
valuations on which it was charged for its network assets.
In the 2000 ®nancial year, there were exceptional costs
of £64 million involved in the work to ensure that BT's
business became fully independent of MCI
Communications, a former associated company. In addition
there were £47 million costs for the exit of BT Cellnet's
analogue network in the 2000 ®nancial year.
Group operating pro®t (loss)
In the 2002 ®nancial year, group operating pro®t from
continuing activities before goodwill amortisation and the
exceptional items, described above, of £2,771 million was
10% lower than in the 2001 ®nancial year, which in turn was
10% lower than in the 2000 ®nancial year.
Total group operating loss for the 2002 ®nancial year
was £479 million compared to a pro®t of £27 million in the
2001 ®nancial year and £3,572 million in the 2000 ®nancial
year.
Associates and joint ventures
The results of associates and joint ventures between
continuing and discontinued activities are shown below:
2002
£m
2001
£m
2000
£m
Share of turnover
Continuing activities 4,049 4,625 2,279
Discontinued activities 715 5,312 1,085
Total 4,764 9,937 3,364
Share of operating pro®t (loss)
before exceptional items
and goodwill amortisation
Continuing activities (108) (157) (156)
Discontinued activities 74 277 (160)
Total (34) 120 (316)
After the disposals in the 2001 and 2002 ®nancial years,
BT's share of its ventures' turnover fell to £4,764 million in
the 2002 ®nancial year from £9,937 million in the 2001
®nancial year. The growth in the 2001 ®nancial year was
due to our establishment and acquisition of interests in
ventures in North America, Europe and Asia Paci®c, many
of which have now been sold, terminated or unwound.
Acquisitions of interests contributed £6,133 million of the
growth in the 2001 ®nancial year. In the 2002 ®nancial year,
£4,618 million of the total arose from ventures located
outside the UK, compared with £9,677 million in the 2001
®nancial year and £3,164 million in the 2000 ®nancial year.
The principal contributors to turnover from continuing
activities in the 2002 ®nancial year were Concert
(£2,158 million), Cegetel in France (£1,068 million) and
LG Telecom in Korea (£240 million). The principal
contributors to turnover in the 2001 ®nancial year were
Concert (£2,576 million), Cegetel (£860 million) and LG
Telecom (£281 million). The main contributors in the 2000
®nancial year were Cegetel (£727 million), Concert (£583
million from January 2000) and a full year's contribution
from LG Telecom (£200 million).
The principal contributors to turnover from discontinued
activities in the 2002 ®nancial year were Japan Telecom and
J-Phone (£559 million to June 2001) and Airtel (£76 million
to June 2001). The principal contributors to turnover from
discontinued activities in the 2001 ®nancial year were Japan
Telecom and J-Phone (£4,542 million), and Airtel (£286
million). The main contributors in the 2000 ®nancial year
were Japan Telecom (£501 million from September 1999),
and Airtel (£250 million).
The group's share of its ventures' operating losses from
continuing activities totalled £108 million in the 2002
®nancial year, before £1,335 million goodwill amortisation
and exceptional items. The comparable losses, before
goodwill amortisation and exceptional items, amounted to
£157 million and £156 million in the 2001 and 2000 ®nancial
years, respectively.
The principal contributor to the group's share of
operating losses from continuing activities before goodwill
amortisation and exceptional items in the 2002 ®nancial
year was Concert (£225 million) offset by pro®ts from
Cegetel (£168 million). In the 2001 ®nancial year Concert
reported pro®ts of £19 million and Cegetel of £90 million,
offset by losses in other ventures. The main contributors to
the loss in the 2000 ®nancial year was BiB (British
Interactive Broadcasting) (£89 million) offset by pro®ts from
Concert (£69 million from January 2000) and Cegetel
(£30 million).
Exceptional items within the operating pro®ts from
ventures are as follows:
2002
£m
2001
£m
2000
£m
Impairment of Concert 806 ± ±
Concert unwind costs 81 ± ±
Impairment of investments
and related exit costs 234 ± ±
Goodwill impairment 173 200 ±
Subscriber acquisition costs ±96 ±
Total attributable to
continuing activities 1,294 296 ±
Total attributable to
discontinued activities ±36 ±
Total exceptional operating
costs 1,294 332 ±
Concert's performance was a cause of concern in 2001
and in October 2001 BT and AT&T announced the unwind
of Concert which was subsequently completed on 1 April
2002. On completion, the businesses, customer accounts
and networks returned to the two parent companies with
BT and AT&T each taking ownership of substantially those
parts of Concert originally contributed by them. The working
capital and other liabilities of Concert on completion were
Financial review
BT Group Annual Report and Form 20-F 2002 35