BAA Results for the Nine Months to December 31, 2001; Increased Investment Shows Confidence in the Future of Aviation Despite Short Term Reduction in Passengers.Business Editors LONDON--(BUSINESS WIRE)--Feb. 5, 2002 BAA Baa See BBB. plc-- Passenger traffic down 2.8% for nine months and 9.9% in third quarter. -- Normalised profit before tax down 4.8% to(pound)441 million ((pound)463 million). In the third quarter down 21% to(pound)103 million ((pound)130 million). -- Net retail income up 2% to (pound)371 million ((pound)363 million) and net retail income per passenger up 5%. In the third quarter, net retail income down 7% to (pound)110 million ((pound)118 million) and net retail income per passenger up 3%. -- Earnings per share before exceptionals, 28.6 pence (30.7 pence). Earnings per share after exceptionals 11.3 pence (32.5 pence). -- Investment in UK airport infrastructure up 22% to(pound)410 million ((pound)337 million), with total capital expenditure for the group up 22.0% to(pound)450 million ((pound)369 million). An interview with BAA's Chief Executive, Mike Hodgkinson, reviewing BAA's third quarter is available for viewing on BAA's website - www.baa.com/investor.
SUMMARY OF RESULTS - POST FRS 17 AND FRS 19
Post the change in accounting 9 months to 9 months to Change
policies Dec 31, 2001 Dec 31, 2000 %
(restated)
Passenger traffic 95.7m 98.4m (2.8)
Revenue(1) (pound)1,441m (pound)1,478m (2.5)
EBITDA(1) (pound)654m (pound)642m 1.9
Group operating profit(1) (pound)467m (pound)470m (0.6)
Normalised profit before tax(2)(pound)441m (pound)463m (4.8)
Profit before tax and
exceptionals (pound)436m (pound)460m (5.2)
Earnings per share before
exceptionals 28.6p 30.7p (6.8)
Earnings per share 11.3p 32.5p (65.2)
Capital expenditure (pound)450m (pound)369m 22.0
(1) Continuing operations only and excludes the joint venture BAA
McArthurGlen and exceptionals.
(2) Excludes the joint venture BAA McArthurGlen and exceptionals.
With effect from the current financial year, BAA adopted the new Financial Reporting Standards FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 17 "Retirement Benefits" and FRS 19 "Deferred Tax" and the previous year is restated accordingly. There is no impact at all on the Group's underlying performance. The table above details the nine month results after the change in accounting policies. All comments refer to nine month results reported post the adoption of FRS 17 and FRS 19, except where noted. Full details of the changes are contained within this announcement, together with a detailed reconciliation. As from 31 March 2002, all results will reported on a post FRS 17 and FRS 19 basis only. BAA plc, the international airport group, today announced normalised normalised - normalisation profit before tax of (pound)441 million (December December: see month. 31, 2000: (pound)463 million restated), a decrease of 4.8% on reduced passengers of 2.8%. In the third quarter, normalised profit before tax was down 21% to (pound)103 million ((pound)130 million restated) reflecting the aftermath AFTERMATH. A right to have the last crop of grass or pasturage. 1 Chit. Pr. 181. of September September: see month. 11 and the consequent con·se·quent adj. 1. a. Following as a natural effect, result, or conclusion: tried to prevent an oil spill and the consequent damage to wildlife. b. decrease in passenger numbers of 9.9%. Revenue for the nine months from continuing businesses decreased by 2.5% to (pound)1,441 million ((pound)1,478 million) due to the effects of September 11, the cessation cessation Vox populi The stopping of a thing. See Smoking cessation. of the Eurotunnel Eurotunnel plc (in the UK) and Eurotunnel SA (in France) make up the Eurotunnel Group, founded in August 1986, which manages and operates the Channel Tunnel between the UK and France. contract in March 2001 and reduced property rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time . EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become from continuing businesses rose by 1.9% to (pound)654 million ((pound)642 million restated). In the third quarter EBITDA was down 8% to (pound)182 million ((pound)198 million restated). Earnings per share before exceptionals decreased by 6.8% to 28.6 pence pence n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, (30.7 pence restated). Earnings per share after exceptional items were 11.3 pence (32.5 pence restated) reflecting the sale of the World Duty Free Americas A·mer·i·cas , the See America. subsidiary last October October: see month. . Chief executive's comment BAA's chief executive, Mike Hodgkinson, said: "As expected, the third quarter's performance was substantially affected by the events of September 11, although we have seen passenger traffic slowly recovering, with a further small improvement expected in January January: see month. . The recovery has been helped by a strong leisure market and the rapid growth of low cost carriers. Also, airport retailing has continued to perform well, though as expected, growth in net retail income per passenger in the third quarter was slower than in the first half. "The outlook for passenger traffic is for further gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. improvement but it remains impossible to predict the exact course of recovery. However, we have to expect that it will take some time for the adverse impact of September 11 to be fully overcome. "We welcomed the government's decision in November November: see month. to permit the building of a fifth terminal at Heathrow. We have studied the Inspector's report and the 690 conditions attached to the decision. We are in the process of obtaining the detailed planning permissions planning permission Noun formal permission granted by a local authority for the construction, alteration, or change of use of a building planning permission n → licencia de obras we need before construction can begin with a view to opening the new terminal in the spring of 2008. "The Civil Aviation Authority's initial proposals for the 2003-08 regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. regime, which were also announced in November, recognised the need to encourage investment. We have made a detailed response to these proposals as part of the consultation process. The next step, in late February February: see month. , is the CAA's referral to the Competition Commission in which they will make some recommendations on the regulatory outcome. The Competition Commission process is expected to last around 6 months. The regulatory review process is expected to conclude by the end of 2002. "Despite September 11, we are confident that growth in the aviation industry will return in the long term. Investment in Britain's airport infrastructure is essential to meet the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. demand for air travel and provide the country with quality airports. We continue to make significant investment in our airports. For the nine months, capital expenditure for the group as a whole increased by 22.0% to (pound)450 million, and for the current financial year is now likely to be in the region of (pound)600 million." OPERATING AND FINANCIAL REVIEW UK airports Before the events of September 11, passenger traffic was growing. In October 2001, passenger numbers declined by 12.0%. Since that date, the trend has been improving with November 2001 traffic down by 10.6% and December 2001 by 6.4%. The North Atlantic market continues to be the worst affected. Overall in the third quarter, passenger traffic was down 9.9% and UK airport operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was reduced by 18% to (pound)102 million ((pound)125 million restated). 95.7 million (98.4 million) people traveled through BAA's UK airports in the nine months to December 31, 2001, a decrease of 2.8%. In that period, UK airport operating profit was down 2% to (pound)428 million ((pound)438 million restated). Airport charges revenue increased by 2% to (pound)504 million ((pound)493 million). UK airport retail Despite the events of September 11 and the consequent reduction in passsenger numbers, UK airport retailing performed relatively well with net retail income for the nine months rising by 2% to (pound)371 million ((pound)363 million). Net retail income per passenger increased by 5% to (pound)3.89 ((pound)3.70). In the third quarter, net retail income was down by 7% to (pound)110 million ((pound)118 million), with net retail income per passenger growth continuing, up 3% to (pound)4.23 ((pound)4.11). World Duty Free Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). - UK airportsWorld Duty Free Europe's UK airport operations achieved a growth in revenues of 6% to (pound)268 million ((pound)253 million) in the nine months. Operating profit rose to (pound)15 million ((pound)14 million). In the third quarter, despite the lower passenger numbers, World Duty Free Europe's UK airport revenues and operating profits remained flat at (pound)85 million ((pound)85 million) and (pound)4 million ((pound)4 million). Capital expenditure Investment in the core UK airports business continued at significant levels with (pound)410 million ((pound)337 million) spent in the first nine months, up 22%. Major projects at Heathrow include the reconfiguration of Heathrow's terminals 1 and 4 for both domestic and long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. traffic and the redevelopment of the terminal 3 departures area. Stansted Stansted could be
A multi-storey car park or a parking garage is a building (or part thereof) which is designed specifically to be for automobile parking and where there are a number of at Glasgow Glasgow, city, Scotland Glasgow (glăs`gō, –kō, glăz`gō), city (1991 pop. 688,500) and council area, S central Scotland, on the river Clyde. and Southampton Southampton, county district (1991 pop. 194,400), Hampshire, S England, at the head of Southampton Water. Southampton is Britain's second largest port. The London-Southampton railway, finished in 1840, and the double tide of the harbor made Southampton an important . BAA Group capital expenditure for the nine months, excluding capitalised interest, was (pound)450 million ((pound)369 million). Heathrow Express Heathrow Express is a train service from Heathrow Airport to Paddington in central London operated by the Heathrow Express Operating Authority—a wholly owned subsidiary of BAA. Heathrow Express operating profit remained at(pound)6 million ((pound)6 million) on reduced revenues of (pound)44 million ((pound)47 million). Heathrow Express passenger numbers for the nine months were down 1.7% as compared to passenger traffic at Heathrow which decreased by 7.7%. BAA Lynton
Coordinates: Lynton is a small village in Devon, England. BAA Lynton's operating profit was(pound)15 million ((pound)20 million) on revenue of(pound)17 million ((pound)31 million), the decreases reflecting the reduced rental income as a result of the disposals of the last two years. BAA McArthurGlen There was (pound)3 million ((pound)4 million) pre-interest profit at BAA McArthurGlen and interest costs were (pound)8 million ((pound)7 million). Cashflow, borrowings and interest charge The overall cash outflow (before use of liquid resources and financing) amounted to (pound)116 million ((pound)176 million inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. ). Last year benefited from the sale of airport industrial properties and lower capital expenditure. In the third quarter, BAA issued a (pound)700 million 30 year bond at an interest rate of 5.75 percent, taking advantage of unusually low gilt rates and in preparation for the future capital expenditure programme. A further (pound)200 million, on the same terms, was issued subsequent to December 31, 2001. Net debt at December 31, 2001 was (pound)1,594 million (March 31, 2001: (pound)1,576 million). The Group net interest charge for the nine months, excluding joint ventures, reduced to (pound)60 million ((pound)64 million). The capitalised interest amount was (pound)26 million ((pound)27 million). In the current period, as a result of the adoption of FRS 17 "Retirement Benefits", other finance income of (pound)37 million ((pound)48 million) has been recorded which is a net interest credit equivalent to the expected return Expected Return The average of a probability distribution of possible returns, calculated by using the following formula: on pension fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. minus the expected increase in the present value of the scheme liabilities. Taxation The tax charge, before the impact of exceptional items, of(pound)131 million ((pound)133 million restated) represents an effective tax rate of 30% (29% restated). The adoption of FRS 19 has resulted in an increased tax charge, compared with the position before FRS 19, for both years and an effective tax rate this year equivalent to the corporation tax rate. There is however no impact on the amount of tax paid. Balance sheet At December 31, 2001, the company had net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of (pound)4,792 million ((pound)4,716 million restated) supported by tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of (pound)6,822 million ((pound)6,387 million). Included in the net assets figure is a pension fund surplus of (pound)282 million ((pound)439 million) as required to be recorded under FRS 17. BAA's international contracts include in the US: Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. , Indianapolis Indianapolis (ĭn'dēənă`pəlĭs), city (1990 pop. 731,327), state capital and seat of Marion co., central Ind., on the White River; selected 1820 as the site of the state capital (which was moved there in 1825), inc. 1847. , Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. Logan Logan, city (1990 pop. 32,762), seat of Cache co., N Utah, on the Logan River; inc. 1859. It is the center of an irrigated dairy and farm area, with huge cheese plants, other food-processing facilities, and diverse manufactures. ; in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. : Melbourne Melbourne, city, Australia Melbourne, city (1991 pop. 2,761,995), capital of Victoria, SE Australia, on Port Phillip Bay at the mouth of the Yarra River. Melbourne, Australia's second largest city, is a rail and air hub and financial and commercial center. , Launceston Launceston (lôn`sĕstən, lŏn`–), city (1991 pop. 66,747), on Tasmania, SE Australia, where the North Esk and South Esk rivers join to form the Tamar estuary; founded 1806. , Perth Perth, city, Australia Perth, city (1991 pop. 1,018,702), capital of Western Australia, SW Australia, on the Swan River estuary. Fremantle is Perth's port. , Alice Springs Alice Springs, town (1991 pop. 20,448), Northern Territory, Australia. It lies in a pastoral area surrounded by desert near the center of the continent and is a stop on the Adelaide Darwin Railway. , Tennant Tennant may refer to:
Naples, Ital. Napoli, city (1991 pop. 1,067,365), capital of Campania and of Naples prov., S central Italy, on the Bay of Naples, an arm of the Tyrrhenian Sea. ; in the Middle East: Seeb SEEB South Eastern Electricity Board (UK) International and Salalah Salalah (صلالة in Arabic), is the capital and seat of the governor or Wali of the southern Omani province of Dhofar. The population of Salalah is 178,469 as of 2005[4]. in Oman Oman (ōmän`), officially Sultanate of Oman, independent sultanate (2005 est. pop. 3,002,000), c.82,000 sq mi (212,380 sq km), SE Arabian peninsula, on the Gulf of Oman and the Arabian Sea. It was formerly known as Muscat and Oman. ; in the Indian Ocean Indian Ocean, third largest ocean, c.28,350,000 sq mi (73,427,000 sq km), extending from S Asia to Antarctica and from E Africa to SE Australia; it is c.4,000 mi (6,400 km) wide at the equator. It constitutes about 20% of the world's total ocean area. : Mauritius Mauritius (môrĭsh`ēəs, –əs), officially Republic of Mauritius, republic (2005 est. pop. 1,231,000), 790 sq mi (2,046 sq km), in the SW Indian Ocean. It is part of the Mascarene Islands, c.500 mi (800 km) E of Madagascar. . BAA ordinary shares trade on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. ; prices may be accessed on Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. under the symbol BAA LN, on the Reuter Reu·ter , Baron Paul Julius von 1816-1899. German-born British journalist who founded (1848) Reuter's, one of the first international news agencies. Equities 2000 Service under BAA.L and on Quotron under BAANU.EU. BAA ADRs, each equal to one ordinary share, appear on the pink sheets under BAAPY. Additional information is available on BAA's home page: http://www.baa.com.
Segmental
summary(1)
Revenue to Revenue to Operating Operating
Dec 31, 2001 Dec 31, 2000 profit to Dec profit to
31, 2001 Dec 31, 2000
(restated)
Airports (pound)1,087m (pound)1,066m (pound)435m (pound)447m
World Duty Free
Europe
- UK airports
(pound)268m (pound)253m (pound)15m (pound)14m
BAA Lynton (pound)17m (pound)31m (pound)15m (pound)20m
Rail
(Heathrow
Express) (pound)44m (pound)47m (pound)6m (pound)6m
Other (pound)142m (pound)340m ((pound)7m) ((pound)8m)
(pound)1,558m (pound)1,737m (pound)464m (pound)479m
less
discontinued
operations (pound)117m (pound)259m ((pound)3m) (pound)9m
TOTAL -
continuing
operations (pound)1,441m (pound)1,478m (pound)467m (pound)470m
(1) excludes the joint venture BAA McArthurGlen and exceptionals.
Results by quarter
(based on restated prior year figures)
1st Change 2nd Change 3rd Change
quarter from quarter from quarter from
2000/01 2000/01 2000/01
Revenue (1) (pound)547m (2.5%) (pound)578m (6.3%) (pound)433m (22.5%)
Group
operating
profit(1) (pound)161m 4.5% (pound)191m 1.1% (pound)112m (17.6%)
Profit before
tax and
exceptionals(pound)150m 2.7% (pound)184m 0.5% (pound)102m (22.1%)
Normalised
profit before
tax(1) (pound)152m 2.7% (pound)186m 0.5% (pound)103m (20.8%)
Earnings per
share before
exceptionals 9.8 p 2.1% 12.0 p (1.6%) 6.8p (23.6%)
(1) excludes the joint venture BAA McArthurGlen and exceptionals
BAA plc RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2001
Consolidated profit and loss account for the nine months ended
December 31, 2001
Year ended December 31,December 31,
March 31, 2001 2000
2001 (pound)M (pound)M
(pound)M (unaudited)
(restated) (restated)
1,939 Continuing operations 1,453 1,490
322 Discontinued operations 117 259
2,261 Revenue - group and share of joint
ventures 1,570 1,749
(35) Less share of joint venture revenue
- continuing operations (12) (12)
2,226 Group revenue 1,558 1,737
(1,659) Operating costs (1,094) (1,258)
(8) Operating costs - exceptional item - -
556 Continuing operations 467 470
(10) Discontinued operations (3) (7)
13 Less utilisation of prior year
provision - 16
559 Group operating profit 464 479
10 Share of operating profit in joint
ventures - continuing operations 3 4
1 Share of operating profit in
associates - continuing operations 1 -
570 468 483
(7) Loss on operations to be
discontinued - exceptional item - -
(6) Loss on disposal of discontinued
operations - exceptional item (190) -
6 Less utilisation of prior year
provision - exceptional item - -
Profit on sale of fixed assets in
continuing operations - exceptional
item
24 6 22
Loss on sale of fixed assets in
discontinued operations
- exceptional
item
(3) - (3)
584 Profit on ordinary activities
before interest 284 502
(85) Net interest payable - group (60) (64)
(5) Exceptional interest charge
- group - -
(10) Net interest payable - joint
ventures (8) (7)
(1) Net interest payable - associates (1) -
64 Other finance income - group 37 48
547 Profit on ordinary activities
before taxation 252 479
(156) Tax on profit on ordinary
activities (131) (133)
1 Tax on exceptional items 1 -
392 Profit on ordinary activities
after taxation 122 346
(4) Equity minority interests (2) (4)
388 Profit for the period attributable
to shareholders 120 342
(187) Equity dividends (65) (64)
Retained profit for the group and
its share of joint ventures and
201 associates 55 278
36.8p Earnings per share 11.3p 32.5p
36.6p Earnings per share before
exceptionals 28.6p 30.7p
36.1p Diluted earnings per share 11.2p 31.5p
Statement of total recognised gains and losses for the nine months
ended December 31, 2001
Year ended December 31, December 31,
March 31, 2001 2000
2001 (pound)M (pound)M
(pound)M (unaudited)
(restated) (restated)
388 Profit for the period attributable
to shareholders(1) 120 342
158 Unrealised surplus on revaluation
of investment properties - -
Share of associate's unrealised
surplus on revaluation of investment
1 properties - -
(232) Loss on pension asset (147) (149)
70 Deferred tax associated with loss
on pension asset 44 45
(7) Currency translation differences on
foreign currency net investments - -
378 Total recognised gains and losses
relating to the period 17 238
Prior period adjustment
- Adoption of FRS 17 392
Prior period adjustment
- Adoption of FRS 19 (403)
Total recognised gains and losses
recognised since the last annual
report 6
(1) Including joint ventures and associates loss of(pound)5m
(December 31, 2000: loss of(pound)3m; March 31, 2001: profit
of(pound)1m).
Consolidated balance sheet as at December 31, 2001
March 31, December 31,December 31,
2001 2001 2000
(pound)M (pound)M (pound)M
(unaudited)
(restated) (restated)
Fixed assets
175 Intangible assets 10 175
6,636 Tangible assets 6,822 6,387
Investments in joint ventures:
12 Loans 38 9
60 Other investments 112 56
6,883 6,982 6,627
Current assets
91 Stocks 44 104
198 Debtors 214 247
265 Short-term investments 712 416
120 Cash at bank and in hand 86 121
674 1,056 888
(884) Creditors: amounts falling due
within one year (669) (940)
(210) Net current assets/(liabilities) 387 (52)
6,673 Total assets less current
liabilities 7,369 6,575
Creditors: amounts falling due
after more than one year
(1,473) Other creditors (2,062) (1,467)
(310) Convertible debt (311) (390)
(1,783) (2,373) (1,857)
Provisions for liabilities and
charges Investments
in joint ventures:
211 Share of gross assets 193 188
(231) Share of gross liabilities (229) (203)
(20) (36) (15)
(414) Other provisions (444) (414)
(434) (480) (429)
(12) Equity minority interests (6) (12)
4,444 Net assets excluding pension asset 4,510 4,277
384 Pension asset 282 439
4,828 Net assets including pension asset 4,792 4,716
1,061 Share capital 1,063 1,044
3,767 Reserves 3,729 3,672
4,828 Equity shareholders' funds 4,792 4,716
(pound)4.55 Net asset value per share (pound)4.51 (pound)4.52
Consolidated cash flow statement for the nine months ended December
31, 2001
Year ended December 31,December 31,
March 31, 2001 2000
2001 (pound)M (pound)M
(pound)M (unaudited)
(restated) (restated)
Operating activities:
559 Operating profit 464 479
222 Depreciation 180 164
11 Amortisation 6 8
8 Fixed assets written off 1 -
45 (Increase)/decrease in stocks (11) 27
1 (Increase)/decrease in debtors (32) (54)
2 (Decrease)/increase in creditors (11) 50
(25) Decrease in provisions - (20)
56 Decrease in pension assets 35 43
879 Net cash inflow from operating
activities 632 697
10 Dividends received from joint
ventures 18 8
Returns on investments and servicing of
finance:
(159) Interest paid (69) (77)
35 Interest received 16 24
(3) Dividends paid to minority
interests (3) -
(127) (56) (53)
(125) Tax paid (72) (57)
Capital expenditure and financial
investment:
(527) Additions to operational assets (449) (387)
(9) Additions to investment properties (20) (14)
22 Sale of operational assets - 5
119 Sale of investment properties 20 114
(25) Additions to long-term investments (81) (12)
- Sale of current asset investments 2 -
(420) (528) (294)
Acquisitions and disposals:
- Sale of operations 13 -
Deferred consideration paid in
respect of a subsidiary
undertaking
(12) acquired in a prior year - (12)
Deferred consideration received in
respect of the sale of a 5%
1 interest in a subsidiary
undertaking in a prior year - 1
(11) 13 (11)
(178) Equity dividends paid (123) (114)
Cash (outflow)/inflow before use
of liquid resources and financing
28 (116) 176
Management of liquid resources:
122 Cash (placed on)/returned from
deposit (567) 5
(20) Sale/(purchase) of commercial paper 117 (52)
102 (450) (47)
Financing:
18 Issue of shares 12 5
(141) Repurchase of own shares - (141)
3 Net increase in debt 520 18
(120) 532 (118)
10 (Decrease)/increase in cash in the
period (34) 11
NOTES 1. This statement has been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the accounting policies used in the 2000/01 annual report with the exception of the changes described in note 2. 2. The Group has applied three new accounting standards, FRS 17, FRS 18 and FRS 19 during the period. The adoption of FRS 17 and FRS 19 has required a change to the accounting treatment of pensions and deferred tax, and the prior period results have been restated accordingly. Deferred tax balances are not discounted. The adoption of FRS 18 "Accounting Policies" has not had a significant impact on the Group's results or financial position. 3. The interest charge is shown net of interest capitalised in respect of the Group of(pound)26m (December 31, 2000:(pound)27m; March 31, 2001:(pound)33m). 4. Other finance income of (pound)37m (December 31, 2000 restated: (pound)48m; March 31, 2001 restated: (pound)64m) has been included as a result of adopting FRS 17. This represents the interest charge on accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. offset by a credit equivalent to the Group's long term expected return on assets based on the market value of the scheme assets at the start of the period. 5. The taxation charge for the nine months ended December 31, 2001 has been based on the estimated effective rate for the full year before exceptionals of 30%. Following the adoption of FRS 17 and FRS 19 the prior period results have been restated. On a similar pre-exceptional profit basis the taxation charge for the restated nine months ended December 31, 2000 was based on a revised estimated Revised estimate The third estimate of GDP released about three months after the measurement period. effective rate for the full year of 29% and the taxation charge for the restated year ended March 31, 2001 was based on a revised estimated effective rate of 29%. 6. The Group's investment properties are included at March 31, 2001 valuations as adjusted for additions and disposals since that date. 7. Airport fixed assets in the course of construction include (pound)342m (December 31, 2000: (pound)254m; March 31, 2001: (pound)264m) in respect of Terminal 5 at Heathrow Airport for which approval in principle has now been given, subject to a number of conditions. If for any reason these conditions are not met or the regulatory outcome is unsatisfactory, and as a result the project does not proceed, costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the project will be charged to the profit and loss account in the year in which a decision not to proceed is taken. 8. Liabilities include net borrowings of(pound)1,594m (December 31, 2000:(pound)1,503m; March 31, 2001:(pound)1,576m). 9. The information shown for the year ended March 31, 2001 does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 and has been extracted, after restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. for FRS 17 and FRS 19, from the full financial statements for the year ended March 31, 2001 which have been filed with the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. . The auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together have reported on those accounts; their report was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. By order of the Board of BAA plc Rachel Rachel, in the Bible Rachel (rā`chəl), in the Bible, wife of Jacob and mother of Joseph and Benjamin. She is one of the four Jewish matriarchs. An alternate form is Rahel. Rowson Company Secretary February 4, 2002 RECONCILIATION - PRE AND POST FRS 17 AND FRS 19 RESULTS With effect from the current financial year, BAA adopted the new Financial Reporting Standards FRS 17 "Retirement Benefits" and FRS 19 "Deferred Tax". There is no impact at all on the Group's underlying performance. The table below details the proforma Proforma A financial projection based on assumptions. results prior to the adoption of FRS 17 and FRS 19. As from March 31, 2002, all results will reported on a post FRS 17 and FRS 19 basis only.
SUMMARY OF RESULTS - PROFORMA (PRE FRS 17 AND FRS 19)
Prior to change in accounting 9 months to 9 months to Change
Policies Dec 31, 2001 Dec 31, 2000 %
Revenue(1) (pound)1,441m (pound)1,478m (2.5)
EBITDA(1) (pound)683m (pound)678m 0.7
Group operating profit(1) (pound)496m (pound)506m (2.0)
Normalised profit before tax(2) (pound)433m (pound)451m (4.0)
Profit before tax and
exceptionals (pound)428m (pound)448m (4.5)
Earnings per share before
exceptionals 30.2p 31.6p (4.4)
Earnings per share 12.9p 33.4p (61.4)
Capital expenditure (pound)450m (pound)369m 22.0
(1) Continuing operations only and excludes the joint venture BAA
McArthurGlen and exceptionals.
(2) Excludes the joint venture BAA McArthurGlen and exceptionals.
The table below provides reconciliation between the financial results
before and after the changes in accounting policies
(pound)m 9 months to 9 months to
December 31, 2001 December 31, 2000
Pre Adj Post Pre Adj Post
Operating profit:
UK airports 456 (28) 428 473 (35) 438
Other businesses 41 (1) 40 46 (1) 45
Total operating profit 497 (29) 468 519 (36) 483
Exceptional items (184) - (184) 19 - 19
Profit before interest 313 (29) 284 538 (36) 502
Net interest payable
- Group and associates (61) - (61) (64) - (64)
Other finance income - 37 37 - 48 48
Net interest payable
- joint ventures (8) - (8) (7) - (7)
Profit on ordinary
activities before
taxation 244 8 252 467 12 479
Tax on profit (105) (25) (130) (111) (22) (133)
Profit on ordinary
activities after
taxation 139 (17) 122 356 (10) 346
Equity minority
interests (2) - (2) (4) - (4)
Profit for the
period attributable
to shareholders 137 (17) 120 352 (10) 342
Earnings per share
before
exceptionals (pence) 30.2p (1.6)p 28.6p 31.6p (0.9)p 30.7p
Normalised profit
before tax(1) 433 8 441 451 12 463
(1) Excludes the joint venture BAA McArthurGlen and exceptionals.
Accounting Policy Change - FRS 19 "Deferred Tax" In the current period, BAA has adopted the new Financial Reporting Standard FRS 19 "Deferred Tax" which requires full provision for timing differences to be made in the accounts for deferred tax. Since BAA is a capital intensive company, it has had historically an effective tax rate below the standard rate, principally due to high capital allowances, thereby reducing taxable profits to a greater extent than depreciation reduced accounting profits. Under the old standard (SSAP SSAP Source Service Access Point SSAP Statistical Signal and Array Processing SSAP Session Service Access Point SSAP sequential structure alignment program (for protein structure comparison) SSAP Simple Spectral Access Protocol 15), provision for deferred tax was only required if it was expected that this relationship would reverse in the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. Given BAA's ongoing large capital programme, it was expected that high capital allowances would continue to be generated, in excess of depreciation, and therefore, under the old accounting standard, there was no requirement to provide for deferred tax on capital allowances. Under FRS 19, BAA is required to make full provision for deferred tax in respect of timing differences, recognising in total the potential future tax impact of past transactions and ignoring the likely future high capital allowances that will be generated by the forecast capital programme. The change to full provision will reduce earnings by increasing the profit and loss account tax charge, and reduce net asset values by increasing provisions. This in turn will affect accepted profitability and financing measures such as P/E ratios P/E ratio Current stock price divided by trailing annual earnings per share or expected annual earnings per share. Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25.50 = 10 times $2.55. XYZ stock sells for ten times earnings. , earnings ratios and gearing ratios Gearing Ratio A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. . There will be no impact on cashflows. BAA's accounts have been prepared to reflect deferred tax on a full provisioning basis. No discounting has been applied. As a result, for the first nine months BAA's effective tax rate is increased by 5.1% to 30% and the pre-exceptional tax charge is (pound)131 million, of which (pound)23 million relates to deferred tax. The amount of the deferred tax liability provided for in the balance sheet is (pound)424 million of which (pound)403 million is the cumulative prior period effect of this change of accounting policy and has been charged to reserves. The deferred tax is not expected to crystallise Verb 1. crystallise - make free from confusion or ambiguity; make clear; "Could you clarify these remarks?"; "Clear up the question of who is at fault" crystalise, crystalize, shed light on, sort out, crystallize, elucidate, illuminate, enlighten, straighten out, in the foreseeable future. The table below summarises the impact of the adoption of FRS 19 on the Group's financial results (after the adoption of FRS 17) in the current period:
For period ending Post adoption of Pre adoption of
31 December 2001 FRS 19 "Deferred FRS 19 "Deferred
Tax" Tax"
P&L impact:
Effective tax rate 30.0% 24.9%
Pre-exceptional tax charge ((pound)131m) ((pound)108m)
B/S impact:
Full deferred tax
(liability)/asset ((pound)424m) -
Gearing (post FRS 17) 33.3% 30.6%
Accounting Policy Change - FRS 17 "Retirement Benefits" In line with best practice, BAA has adopted early the new Financial Reporting Standard FRS 17 "Retirement Benefits" which replaces SSAP 24 "Accounting for Pension Costs". BAA's principal UK pension fund is a defined benefit scheme which is self administered. Under the previous accounting policy, the surplus in the pension scheme (as defined at the time of the last actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin valuation in September 1999) was amortised over the average remaining service lives of relevant employees and effectively served to reduce the charge to the profit and loss account for pension costs. On this basis, the pension scheme surplus would be eliminated by 2014. The profit and loss charge comprised a regular pension cost net of spreading of surplus and a notional no·tion·al adj. 1. Of, containing, or being a notion; mental or imaginary. 2. Speculative or theoretical. 3. interest credit. The pension fund surplus was not included on the Group's balance sheet. The only balance sheet item was a provision representing the cumulative difference between pension charges included in the profit and loss account and actual payments made to the scheme. Under FRS 17, the accounting treatment for company pension funds has changed significantly. The full service cost of pension provision relating to the period, together with the cost of any benefits relating to past service is charged to operating profit. Two new items are included in the profit and loss account under "other finance income - Group": -- a charge equal to the expected increase in the present value of the scheme liabilities because the benefits are closer to settlement; and netted against this -- a credit equivalent to the Group's long-term expected return on assets based on the market value of the scheme assets at the start of the period. The difference between the market value of the assets of the scheme and the present value of accrued pension liabilities is shown as a new asset on the balance sheet net of deferred tax. Any difference between the expected return on assets and that actually achieved is recognised in the statement of recognised gains and losses along with differences which arise from experience or assumption changes. This in turn will affect accepted profitability and financing measures such as P/E ratios, earnings ratios and gearing ratios. The table below details the impact of the adoption of FRS 17 on the Group's financial results in the current period:
For period ending Post adoption Pre adoption
December 31, 2001 of FRS 17 of FRS 17
"Retirement Benefits" "Retirement Benefits"
P&L impact:
Operating costs
Group pension cost:
-- regular pension cost ((pound)35m) ((pound)32m)
-- spreading of surplus - (pound)8m
-- notional interest earned on
surplus - (pound)18m
Total charge to operating profit ((pound)35m) ((pound)6m)
Interest and other finance income:
-- expected return on
pension scheme
assets (pound)87m -
-- interest on pension
scheme liabilities ((pound)50m) -
Other finance income (pound)37m -
Total impact on
Profit before tax (pound)2m ((pound)6m)
B/S impact:
Pension provision - ((pound)14m)
Pension fund asset (pound)282m -
Accounting Policy Changes - Combined Impacts of adoption of
FRS 17 "Retirement Benefits" and FRS 19 "Deferred Tax"
For period ending Post adoption of FRS 17 Pre adoption of FRS 17
December 31, 2001 "Retirement Benefits" "Retirement Benefits"
and FRS 19 "Deferred Tax" and FRS 19 "Deferred Tax"
P&L impact:
Profit before tax and exceptionals (pound)436m (pound)428m
Effective tax rate (%) 30.0% 24.7%
Tax charge before exceptionals ((pound)131m) ((pound)106m)
Minority interests ((pound)2m) ((pound)2m)
Profit for the year attributable
to shareholders before exceptionals (pound)303m (pound)320m
Earnings per share before
exceptionals (pence) 28.6p 30.2p
B/S impact:
Pension provision - ((pound)14m)
Pension fund asset (pound)282m -
Full deferred tax
(liability)/asset ((pound)424m) (pound)4m
Corporation tax liability - ((pound)1m)
Net asset impact ((pound)142m) ((pound)11m)
Net assets (pound)4,792m (pound)4,923m
Net debt ((pound)1,594m)((pound)1,594m)
Gearing 33.3% 32.4%
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