BT 2003 Annual Report Download - page 93

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5. Operating costs continued
Continuing activities 2003
£m
2002
£m
2001
£m
Staff costs:
Wages and salaries 3,621 3,659 3,465
Social security costs 275 270 273
Pension costs
a
(note 31) 322 367 299
Employee share ownership
b
36 25 32
Total staff costs 4,254 4,321 4,069
Own work capitalised (583) (623) (642)
Depreciation (note 21) 3,011 3,266 2,689
Amortisation and impairment of goodwill and other intangibles (note 20) 24 2,079 291
Payments to telecommunications operators 3,846 4,289 3,736
Other operating costs 5,818 5,522 4,357
Total operating costs 16,370 18,854 14,500
Operating costs included the following:
Early leaver costs
c
276 247 109
Research and development 380 362 361
Rental costs relating to operating leases, including plant and equipment hire of
£34 million (2002 – £51 million, 2001 – £13 million) 395 277 156
Foreign currency gains (12) (1) (50)
Amortisation of goodwill and exceptional items comprising:
Property rationalisation provision 198 ––
Goodwill impairment in subsidiary undertakings –1,955 200
Asset impairments –324 –
Costs relating to the Concert unwind –172 –
Costs relating to the demerger of mmO
2
–98 –
BT Retail call centre rationalisation costs –68 –
BT Wholesale bad debt costs –79 –
Credit for rates refunds, relating to prior years –– (193)
Total exceptional items 198 2,696 7
Goodwill amortisation 20 121 88
Total amortisation of goodwill and exceptional items 218 2,817 95
a
No charge for the cost of providing incremental pension benefits for employees taking early retirement was made in the year ended 31 March 2001 in
view of the combined surplus in the BT Pension Scheme and the amount provided for pension costs within provisions for liabilities and charges.
b
Amount set aside for the year for allocation of ordinary shares in the company to eligible employees.
c
Includes £61 million of leaver costs associated with the rationalisation of the BT Retail call centres in the year ended 31 March 2002.
Notes to the financial statements
92 BT Annual Report and Form 20-F 2003