BT 2002 Annual Report Download - page 91
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5. Operating costs
Total Group 2002
£m
2001
£m
2000
£m
Staff costs:
Wages and salaries 4,034 3,954 3,754
Social security costs 304 313 316
Pension costs (note 31) 361 326 167
Employee share ownership
a
25 32 59
Total staff costs 4,724 4,625 4,296
Own work capitalised (659) (693) (498)
Depreciation (note 21) 3,680 3,045 2,752
Amortisation and impairment of goodwill and other intangibles (note 20) 2,321 3,386 89
Payments to telecommunications operators 4,299 3,802 3,086
Other operating costs
b
7,035 6,594 5,634
Total operating costs 21,400 20,759 15,359
Operating costs included the following:
Redundancy charges and early leaver payments 252 118 59
Research and development 362 364 345
Rental costs relating to operating leases, including plant and equipment hire £51 million
(2001 ± £15 million, 2000 ± £12 million) 283 166 189
Foreign currency gains (1) (50) (26)
Amortisation of goodwill and exceptional items comprising:
Goodwill impairment in subsidiary undertakings 1,955 3,000 ±
Asset impairments 324 ± ±
Costs relating to the Concert unwind 172 ± ±
Costs relating to the demerger of mmO2 109 ± ±
BT Retail call centre rationalisation costs 68 ± ±
BT Wholesale bad debt costs 79 ± ±
Credit for rates refunds, relating to prior years ±(193) ±
Write off of subscriber acquisition costs
c
±7 ±
Write off of Viag Interkom IT systems ±43 ±
BT Cellnet analogue network closure costs ±± 47
Costs relating to the disengagement from MCI ±± 64
Total exceptional items 2,707 2,857 111
Goodwill amortisation 352 373 89
Total amortisation of goodwill and exceptional items 3,059 3,230 200
a
Amount set aside for the year for allocation of ordinary shares in the company to eligible employees.
b
No charge for the cost of providing incremental pension bene®ts for employees taking early retirement was made in the years ended 31 March 2001 and 2000
in view of the combined surplus in the BT Pension Scheme disclosed by the actuarial valuations as at 31 December 1999 and 1996, and the amount provided
for pension costs within provisions for liabilities and charges.
c
The accounting of all the mmO2 operating units was aligned; this resulted in a write off of previously capitalised costs in certain non-UK operations.
The directors believe that the nature of the group's business is such that the analysis of operating costs required by the
Companies Act 1985 is not appropriate. As required by the Act, the directors have therefore adapted the prescribed format
so that operating costs are disclosed in a manner appropriate to the group's principal activity.
Notes to the financial statements
90 BT Group Annual Report and Form 20-F 2002