BT 2011 Annual Report Download - page 119

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116
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. Finance expense and finance income
2011 2010a2009a
Year ended 31 March £m £m £m
Finance expense
Interest on listed bondsb,c 775 806 777
Interest on finance leasesb18 18 25
Interest on other borrowingsb56 58 130
Unwinding of discount on provisionsb343
Fair value movements on derivativesd34 19 29
Finance expensee,f 886 905 964
Less: amounts included in the cost of qualifying assetsg(6) (3) –
Total finance expense before specific items 880 902 964
Specific items (note 8) 2,323 2,211 2,308
Total finance expense 3,203 3,113 3,272
aIn 2011 the group amended its definition of specific items to include net interest on pensions due to its volatile nature. Comparatives have been re-presented to be on a consistent basis.
bCalculated using the effective interest rate method unless otherwise stated below.
cIncludes a net charge of £38m (2010: £44m, 2009: £25m) relating to fair value movements on derivatives recycled from the cash flow reserve.
dIncludes a charge of £28m (2010: £9m, 2009: £nil) arising from restructuring certain derivatives and £6m (2010: £10m, 2009: £29m) of fair value movements on derivatives not in a designated hedge
relationship.
eIncludes a net credit of £293m (2010: net credit of £451m, 2009: net charge of £2,161m) relating to foreign exchange movements on loans and borrowings and a net charge of £293m (2010: net charge of
£451m, 2009: net credit of £2,161m) relating to fair value movements on derivatives recycled from the cash flow reserve. The items generating these foreign exchange movements are in designated hedge
relationships.
fIncludes a net credit of £3m (2010: net credit of £29m, 2009: net charge of £39m) relating to fair value movements arising on hedged items and net charge of £3m (2010: net charge of £29m, 2009: net
credit of £39m) relating to fair value movements arising on derivatives designated as fair value hedges.
gThe weighted average capitalisation rate on general borrowings was 7.8% in 2011 (2010: 7.9%).
2011 2010a2009a
Year ended 31 March £m £m £m
Finance income
Interest on available-for-sale investments 9 5 14
Interest on loans and receivables 7717
Other interest and similar income 19––
Total finance income before specific items 35 12 31
Specific items (note 8) 2,244 1,943 2,621
Total finance income 2,279 1,955 2,652
aIn 2011 the group amended its definition of specific items to include net interest on pensions due to its volatile nature. Comparatives have been re-presented to be on a consistent basis.
2011 2010 2009
Year ended 31 March £m £m £m
Net finance expense before specific items 845 890 933
Specific items (note 8) 79 268 (313)
Net finance expense 924 1,158 620
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