BT 2010 Annual Report Download - page 47
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REVIEW OF THE YEAR FINANCIAL REVIEW
45BT GROUP PLC ANNUAL REPORT & FORM 20-F
ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
EBITDA
In 2010 adjusted EBITDA was £5,639m, compared with £5,238m
in 2009 and £5,784m in 2008, as disclosed in the Segment
information note on page 102. The increase in 2010 reflects the
benefit of group wide cost reduction activities and the
improvement in the performance of BT Global Services. The decline
in 2009 reflected the unacceptable performance in BT Global
Services and the continued decline in BT Wholesale offset by a
good performance in BT Retail and Openreach.
Adjusted EBITDA for the last five financial years is included in the
Selected financial data section on page 152.
Other group items
Specific items
Specific items for 2010, 2009 and 2008 are shown in the table
below and are defined on page 55.
2010 2009 2008
£m £m £m
Revenue
Regulatory settlement 52 – –
Other operating income
(Profit) loss on disposal of a business (2) 13 10
Operating costs
BT Global Services restructuring charges 301 280 –
Property rationalisation costs 121 – –
Costs associated with settlement of open tax years 5 – –
Restructuring costs – group transformation and reorganisation activities – 65 402
21CN asset impairment and related charges – 50 –
Creation of Openreach and delivery of the Undertakings – – 53
Write off of circuit inventory and other working capital balances – – 74
427 395 529
Finance income
Interest on settlement of open tax years (11) – –
Share of results of associates and joint ventures
Impact of renegotiated supply contracts on associate (29) – –
Reassessment of carrying value of associate – (36) –
Loss (profit) on disposal of associate 12 – (9)
Net specific items charge before tax 449 372 530
Tax credit in respect of settlement of open tax years (230) – (40)
Tax credit on re-measurement of deferred tax – – (154)
Tax credit on specific items above (112) (43) (149)
Net specific items charge after tax 107 329 187
Operating profit
In 2010 adjusted operating profit was £2,600m (2009: £2,348m,
2008: £2,895m), 11% higher than 2009 which in turn was 19%
lower than 2008. The increase in 2010 reflects the improved
EBITDA partially offset by higher depreciation and amortisation.
The reduction in 2009 reflected the unacceptable performance in
BT Global Services, partially offset by good performance in the
other lines of business. Reported operating profit was £2,123m in
2010, compared with £301m in 2009 and £2,356m in 2008.