Barclays 2003 Annual Report Download - page 220

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Reconciliation of economic profit
Economic profit for 2003 was £1.4bn, which, added to the £3.9bn generated between 2000-2002 inclusive, delivered a cumulative total of £5.3bn for
the 2000-2003 goal period.
The 2000-2003 breakdown of economic profit performance is shown below and its reconciliation to profit after tax and minority interests.
2003 2002 2001 2000
£m £m £m £m
Profit after tax and minority interests 2,744 2,230 2,446 2,445
Goodwill amortisation 265 254 229 51
Tax credit on goodwill (7) (5) (5) –
Goodwill relating to associated undertakings 71––
Goodwill on disposals –10 – –
Profit after tax and minority interests
excluding goodwill amortisation 3,009 2,490 2,670 2,496
(Loss)/gain on disposal recognised in the statement
of total recognised gains and losses (4) 206––
3,005 2,696 2,670 2,496
Average shareholders’ funds including
average historical goodwill 17,135 15,812 14,528 10,118
Post-tax cost of equity 9.5% 9.5% 10.5% 11.0%
Cost of average shareholders’ funds
including average historical goodwill (1,585) (1,459) (1,443) (1,094)
Economic profit 1,420 1,237 1,227 1,402
The difference between the average shareholders’ funds (excluding minority interests) and that reported above represents cumulative goodwill
amortisation charged and goodwill previously written off to reserves.
The cost of average shareholders’ funds includes a charge for purchased goodwill. A post-tax cost of equity of 8.5% has been used for goodwill
associated with the acquisition of Woolwich plc. A post-tax cost of equity of 9.5% (2002: 9.5%, 2001: 10.5%, 2000: 11.0%) has been used for all other
goodwill.
Reconciliation of Economic Profit
218