BT 2004 Annual Report Download - page 90

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5. Operating costs
Total Group 2004
£m
2003
£m
2002
£m
Staff costs:
Wages and salaries 3,672 3,621 4,013
Social security costs 316 275 304
Pension costs (note 31) 404 322 382
Employee share ownership
a
20 36 25
Total staff costs 4,412 4,254 4,724
Own work capitalised (677) (583) (659)
Depreciation (note 21) 2,921 3,011 3,680
Amortisation and impairment of goodwill and other intangibles (note 20) 15 24 2,321
Payments to telecommunications operators 3,963 3,940 4,299
Other operating costs 5,189 5,724 7,035
Total operating costs 15,823 16,370 21,400
Operating costs included the following:
Early leaver costs
b
202 276 252
Research and development 334 380 362
Rental costs relating to operating leases, including plant and equipment hire of
£25 million (2003 – £34 million, 2002 – £51 million) 370 395 283
Foreign currency gains (5) (12) (1)
Amortisation of goodwill and exceptional items comprising:
Rectification costs 30 ––
Property rationalisation provision –198 –
Goodwill impairment in subsidiary undertakings –– 1,955
Asset impairments –– 324
Costs relating to the Concert unwind –– 172
Costs relating to the demerger of mmO
2
–– 109
BT Retail call centre rationalisation costs ––68
BT Wholesale bad debt (release) costs (23) –79
Total exceptional items 7198 2,707
Goodwill amortisation 12 20 352
Total amortisation of goodwill and exceptional items 19 218 3,059
a
Amount set aside for the year for allocation of ordinary shares in the company to eligible employees.
b
Includes £61 million of leaver costs associated with the rationalisation of the BT Retail call centres in the year ended 31 March 2002.
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.
BT Annual Report and Form 20-F 200489 Notes to the financial statements