BT 2002 Annual Report Download - page 57

Risk factors
from operations. BT has a business continuity strategy
designed to deal with such events, including major terrorist
action, industrial action, hurricane or ¯ooding, that may
impact the ability to maintain an effective service to
customers. Any such strategy can provide only reasonable
and not absolute assurance against material loss and there
can be no assurance that material adverse events will not
occur.
BT's ability to pay dividends in the future will depend
on the success of the restructured group
BT did not pay a ®nal dividend for the year ended 31 March
2001 or an interim dividend for the year ended 31 March
2002 after ceasing the payment of a ®nal dividend for the
year ended 31 March 2001 in advance of the group
restructuring programme. The Board has recommended a
®nal dividend of 2.0 pence per share in respect of the year
ended 31 March 2002 and expects to resume regular
dividend payments thereafter. However, the level of
dividend which BT expects to pay in the future will be
dependent on the future performance of the business.
Declining investment returns may result in the funding
cost of the de®ned bene®t pension scheme becoming
an unsustainable burden on the ®nancial resources
of BT
The de®ned bene®t pension scheme, the BT Pension
Scheme (BTPS), was closed to new members on 31 March
2001 and has been replaced by a de®ned contribution
scheme (BTRP). The next full triennial actuarial review of the
BTPS is due to be completed at 31 December 2002. The
results of future scheme valuations will be impacted by the
future equity market performance, interest rates and the
general trend towards longer life expectancy, all of which
are outside the control of BT. In the event that investment
returns decline, the cash funding cost to BT will increase
and may have a signi®cant effect on the ®nancial resources
of BT.
If BT Ignite continues to incur losses in European
operations BT may not realise an economic return on
its investment
BT Ignite's European connectivity business, which
includes operations in Germany, the Netherlands, the
Republic of Ireland and Spain, made an operating loss of
£276 million before exceptional items and goodwill
amortisation in the year ended 31 March 2002. The
strategic focus of BT Ignite is to streamline its European
activities with a focus on providing value added solutions
and services to multi-site corporate customers with the
objective of reversing its loss making businesses. There
can, however, be no assurance that BT Ignite will not
continue to incur losses and, in this event, BT Ignite may
close or dispose of operations.
56 BT Group Annual Report and Form 20-F 2002