BT 2010 Annual Report Download - page 106

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
104 BT GROUP PLC ANNUAL REPORT & FORM 20-F
2. Other operating income
2010 2009 2008
Year ended 31 March £m £m £m
Profits on disposal of property, plant and equipment 75 52 50
Income from repayment works 74 72 74
Other operating income 229 228 235
Other operating income before specific items 378 352 359
Specific items (note 5) 2 (13) (10)
Other operating income 380 339 349
3. Operating costs
2010 2009a2008a
Year ended 31 March Notes £m £m £m
Costs by nature
Staff costs:
Wages and salaries 4,182 4,499 4,242
Social security costs 447 432 417
Pension costs 29 304 544 626
Share-based payment expense 30 71 141 73
Total staff costs 5,004 5,616 5,358
Own work capitalised (575) (673) (724)
Net staff costs 4,429 4,943 4,634
Depreciation of property, plant and equipment:
Owned assets 13 2,260 2,200 2,324
Held under finance leases 13 44 49 86
Amortisation of intangible assets 12 735 641 479
Payments to telecommunications operators 4,083 4,266 4,237
Other operating costsb7,138 8,934 6,408
Total operating costs before specific items 18,689 21,033 18,168
Specific items 5 427 395 529
Total operating costs 19,116 21,428 18,697
Operating costs before specific items include the following:
Contract and financial review chargese– 1,598 –
Leaver costsc142 204 127
Research and development expenditured1,177 1,021 857
Rental costs relating to operating leases 451 426 423
Foreign currency losses 730 8
aRestated for the adoption of the amendment to IFRS 2. See page 94.
bOther operating costs also include a net charge of £1m (2009: £8m credit, 2008: £nil) relating to fair value movements on derivatives recycled from the cash flow reserve.
cLeaver costs exclude leaver costs associated with the restructuring of BT Global Services during 2010 and 2009 and manager leaver costs associated with the group’s transformation and reorganisation
activities during 2009 and 2008. These costs have been recorded as a specific item. Other leaver costs are included within wages and salaries and social security costs.
dResearch and development expenditure includes amortisation of £733m (2009: £431m, 2008: £325m) in respect of internally developed computer software.
eIn 2009, the group recognised contract and financial review charges of £1,639m, of which £1,598m was recognised within other operating costs and £41m was recognised as a reduction to revenue. The
total charge of £1,639m was allocated against the following assets and liabilities: intangible assets £241m; non current trade and other receivables £913m; prepayments £52m; accrued income £41m;
provisions £256m; £136m was allocated against a number of other balance sheet categories and the individual amounts were insignificant.