5th Aug 2005 07:00
British Airways PLC05 August 2005 FIRST QUARTER RESULTS 2005-2006 (unaudited) OPERATING AND FINANCIAL STATISTICS (unaudited) Three months ended June 30 Better/ 2005 2004 (Worse) Revenue £m 2,059 1,902 8.3% Profit before tax £m 124 75 65.3% Profit after tax £m 90 43 nm Net assets £m 1,783 1,028 73.4% Basic earnings per share p 8.3 3.7 nm nm: Not meaningful Three months ended June 30 Better/ 2005 2004 (Worse) TOTAL GROUP OPERATIONS TRAFFIC AND CAPACITY RPK (m) 27,768 27,083 2.5%ASK (m) 36,706 36,150 1.5%Passenger load factor (%) 75.6 74.9 0.7ptsCTK (m) 1,185 1,217 (2.6)%RTK (m) 3,949 3,909 1.0%ATK (m) 5,722 5,652 1.2%Overall load factor (%) 69.0 69.2 (0.2)ptsPassengers carried (000) 9,177 9,288 (1.2)%Tonnes of cargo carried (000) 193 216 (10.6)% FINANCIAL Operating profit (£m) 176 129 36.4%Operating margin (%) 8.5 6.8 1.7ptsPassenger revenue per RPK (p) 6.09 6.00 1.5%Passenger revenue per ASK (p) 4.60 4.50 2.2%Cargo revenue per CTK (p) 9.96 9.70 2.7%Total traffic revenue per RTK (p) 45.78 44.59 2.7%Total traffic revenue per ATK (p) 31.60 30.84 2.5%Net operating expenditureper RTK (p) 41.33 41.29 (0.1)%Net operating expenditureper ATK (p) 28.52 28.56 0.1%Average fuel price before hedging(US cents/US gallon) 161.81 115.52 (40.1)% TOTAL AIRLINE OPERATIONS (Note 1) OPERATIONS Average Manpower Equivalent (MPE) 46,079 46,280 0.4%ATKs per MPE (000) 124.2 122.1 1.7%Aircraft in service atperiod end 287 290 (3) Note 1: Excludes non airline activity companies, principally, Airmiles TravelPromotions Ltd, BA Holidays Ltd, BA Travel Shops Ltd, Speedbird InsuranceCompany Ltd and The London Eye Company Ltd. CHAIRMAN'S STATEMENT International Financial Reporting Standards British Airways consolidated financial statements are now prepared underInternational Financial Reporting Standards (IFRS). As permitted under IFRS 1,the group decided to defer the adoption of IAS 39 and IAS 32 until April 1,2005. As a consequence the comparative information for 2004/05 (published onJuly 4, 2005) was prepared applying IFRS standards with the exception of IAS 32and 39 - these standards are applied for the first time this quarter. (The basisof preparation is detailed on page 8). Group Performance Group profit before tax for the three months to June 30 was £124 million; thiscompares with a profit of £75 million last year. Operating profit - - at £176 million - - was £47 million better than last year.The improvement in operating profit primarily reflects an increase in passengerrevenue, partially offset by the increase in the cost of fuel net of fuelsurcharges and higher engineering and employment costs. The operating margin was 8.5%, 1.7 points better than last year. Cash inflow from operating activities was £349 million for the quarter, withclosing cash, cash equivalents and short term deposits at £1,936 millionrepresenting a £254 million increase versus March 31. Net debt fell by £395million from March 31, 2005 to £2,527 million. Turnover For the three month period, Group turnover - - at £2,059 million - - was up8.3%, including passenger revenue up 4.0%. The flying programme was 1.2% largerin ATKs. Passenger yield (pence per RPK) for the three months improved by 1.5%compared with last year, largely driven by cabin mix; seat factor was up 0.7points at a record 75.6% on capacity 1.5% higher in ASKs. Cargo revenue was flat compared with last year, reflecting yields up 2.7%,offset by reduced volumes (CTKs were down 2.6%). Overall load factor was down 0.2 points at 69.0%. Costs For the quarter, group net unit costs (pence/ATK) improved by 0.1% on the sameperiod last year. This reflects the net cost increase of 1.1% on capacity 1.2%higher in ATKs. Total expenditure from operations was up by 6.2%. Fuel costs increased by 37.6%due to increases in fuel price net of hedging partially offset by exchange;engineering costs increased by 21.9% due primarily to the phasing of engineinputs and costs for an additional cargo freighter; employee costs increased by5.4% mainly reflecting wage awards and increased pension service costs, onlypartially offset by manpower reductions. These increases were partially offsetby continued reductions in selling costs, down 21.7% due to agents' commissionrestructuring and increased online sales. Non Operating Items Interest expense reduced by £7 million from last year to £59 million reflectingthe impact of lower debt. Interest income at £21 million was £3 million higherthan last year reflecting higher cash balances. Retranslation of currency borrowings generated a charge of £9 million, (prioryear: £12 million credit), due to the retranslation of dollar and yen debt. Theretranslation - - a non-cash item required by standard accounting practice - -results from the strengthening of the dollar and yen against sterling. Loss on disposals of fixed assets and investments was £3 million. Tax The tax rate for the quarter was 27%, largely as a result of non-taxable income.The company expects to return to a UK taxpaying position this year, andaccordingly we anticipate paying £50 million in Corporation tax in the currentyear. Earnings Per Share The earnings attributable to shareholders for the three months was equivalent to8.3 pence per share, compared with last year's earnings per share of 3.7 pence. Net Debt / Total Capital Ratio Borrowings, net of cash and short term loans and deposits, were £2,527 millionat June 30 - - down £395 million since the start of the year (partly due to theconversion of the £112 million of bonds from debt to equity) and £4.1 billionfrom the December 2001 peak. The net debt/total capital ratio reduced by 9.1points from March 31 to 58.6%. The net debt/total capital ratio includingoperating leases was 65.0%, a 7.4 point reduction from March 31. The reductionin adjusted gearing is partly due to the conversion of the convertible capitalbonds from debt to equity (2.2 points) and partly due to the adoption of IAS 39from April 1, 2005. The adoption of IAS 39 resulted in equity increasing by £183million versus last year, and gearing reducing by 2.4 points. Cash Flow During the quarter we generated a positive cash flow from operating activitiesof £349 million, £28 million higher than last year. Including current interestbearing deposits, the cash position at June 30, 2005 was £1.9 billion, anincrease of £254 million compared with March 31, 2005. Aircraft Fleet During the quarter the Group fleet in service reduced by three to 287 aircraft,following the sale of a BAe 146 and returns to lessors of a Boeing 737-500aircraft and a de Havilland Canada DHC-8 aircraft. Outlook Record passenger loads in July indicate that the short term impact of the Londonbombings was not material although it is too early to say what the long termimpact will be. When taken together with the uncertain economic outlook andvolatility in both fuel prices and the US Dollar exchange rate, accurateforecasting is even more of a challenge than usual. Market conditions, however, remain broadly unchanged. The continuing strength of the US Dollar and increased surcharges have improvedthe revenue outlook. We now expect total revenue for the year to March 2006 togrow by 5.5 - 6.5%. Capacity and volume are still expected to increase by about3% with total yield flat. We now expect fuel costs, net of hedging, to be about £525 million more thanlast year, a further increase of £75 million, largely driven by the stronger USDollar. As announced in our latest Business Plan, our focus is on preparing for the moveto Terminal 5 in 2008, investing in products for our customers and continuing todrive simplification to deliver a competitive cost base. Certain information included in these statements is forward-looking and involvesrisks and uncertainties that could cause actual results to differ materiallyfrom those expressed or implied by the forward looking statements. Forward-looking statements include, without limitation, projections relating toresults of operations and financial conditions and the Company's plans andobjectives for future operations, including, without limitation, discussions ofthe Company's Business Plan programs, expected future revenues, financing plansand expected expenditures and divestments. All forward-looking statements inthis report are based upon information known to the Company on the date of thisreport. The Company undertakes no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information, future eventsor otherwise. It is not reasonably possible to itemize all of the many factors and specificevents that could cause the Company's forward looking statements to be incorrector that could otherwise have a material adverse effect on the future operationsor results of an airline operating in the global economy. Information on somefactors which could result in material difference to the results is available inthe Company's SEC filings, including, without limitation the Company's Report onForm 20-F for the year ended March 2005. CONSOLIDATED INCOME STATEMENT (unaudited) Three months ended June 30 Better/ 2005 £m 2004 £m (Worse) Traffic RevenuePassenger 1,690 1,625 4.0%Cargo 118 118 1,808 1,743 3.7%Other revenue 251 159 57.9%TOTAL REVENUE 2,059 1,902 8.3%Employee costs 570 541 (5.4)%Depreciation and amortisation 178 178Aircraft operating lease costs 25 26 3.8%Fuel and oil costs 355 258 (37.6)%Engineering and otheraircraft costs 117 96 (21.9)%Landing fees and en routecharges 142 141 (0.7)%Handling charges, catering andother operating costs 234 233 (0.4)%Selling costs 108 138 21.7%Currency differences (5) (4) 25.0%Accommodation, ground equipmentand IT costs 159 166 4.2% TOTAL EXPENDITURE FROM OPERATIONS 1,883 1,773 (6.2)% OPERATING PROFIT 176 129 36.4% Fuel derivative gains* 1 nmInterest expense (59) (66) 10.6%Interest income 21 18 16.7%Financing income and expense relating to pensions (4) (11) 63.6%Retranslation (charges)/creditson currency borrowings (9) 12 nmLoss on sale of fixed assetsand investments (3) (3)Share of losses in associates (1) (4) 75.0%Income relating to fixed assetinvestments 2 nm PROFIT BEFORE TAX 124 75 65.3% Tax (34) (32) (6.3)%PROFIT AFTER TAX 90 43 nm Attributable to:Equity holders of the parent 90 43 nmMinority interest 90 43 nm Earnings per share:Basic 8.3 3.7 nmFully diluted 7.9 3.7 nm nm: Not meaningful * Fuel derivative gains reflect the ineffective portion of unrealised gains andlosses on fuel derivative hedges required to be recognised through the incomestatement under IAS 39. CONSOLIDATED BALANCE SHEET (unaudited) June 30 June 30 March 31 2005 £m 2004 £m 2005 £mNON-CURRENT ASSETSProperty, plant and equipmentFleet 6,843 7,108 6,944Property 985 1,074 1,000Equipment 378 468 385 8,206 8,650 8,329 Goodwill 72 72 72Landing rights 121 94 122Other intangible assets 55 12 60Investments in associates 120 421 126Long term investments 29 30 30 Available-for-sale financial assets 4Employee benefit assets 137 131 137Other financial assets 107 42 38 TOTAL NON-CURRENT ASSETS 8,851 9,452 8,914 NON-CURRENT ASSETS HELD FOR SALE 3 1 5 CURRENT ASSETS AND RECEIVABLESExpendable spares and other inventories 86 73 84Trade receivables 738 705 685Other current assets 567 319 301Other current interest bearing deposits 903 1,356 1,134Cash and cash equivalents 1,033 379 548 1,936 1,735 1,682 TOTAL CURRENT ASSETS AND RECEIVABLES 3,327 2,832 2,752 TOTAL ASSETS 12,181 12,285 11,671 SHAREHOLDERS' EQUITY AND LIABILITIESSHAREHOLDERS' EQUITYIssued share capital 283 271 271Treasury shares (24) (30) (26)Other reserves 1,512 577 940 TOTAL SHAREHOLDERS' EQUITY 1,771 818 1,185 MINORITY INTEREST 12TOTAL EQUITY 1,783 Equity minority interest 10 12Non-equity minority interest 200 200MINORITY INTERESTS 210 212 PROVISIONSEmployee benefit obligations 1,816 1,891 1,820Provisions for deferred tax 906 745 816Other provisions 41 39 34TOTAL PROVISIONS 2,763 2,675 2,670 NON-CURRENT LIABILITIESInterest bearing long-term borrowings 4,016 4,758 4,045Convertible long-term borrowings 112Other long term liabilities 304 327 306TOTAL LONG-TERM LIABILITIES 4,320 5,197 4,351 CURRENT LIABILITIESCurrent portion of long-term borrowings 447 689 447Convertible long-term borrowings 112Trade and other payables 2,811 2,688 2,658Current tax payable 57 8 36TOTAL CURRENT LIABILITIES 3,315 3,385 3,253 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 12,181 12,285 11,671 CONSOLIDATED CASHFLOW STATEMENT (unaudited) Three months ended June 30 Better/ 2005 £m 2004 £m (Worse) CASHFLOWS FROM OPERATING ACTIVITIESOperating profit 176 129 47Depreciation and amortisation 178 178Operating cashflow before working capital changes 354 307 47Increase in inventories and other receivables (66) (52) (14)Increase in trade and other payables and provisions 111 115 (4)Other non-cash movements 2 2 Cash generated from operations 401 372 29Interest paid (48) (52) 4Taxation (4) 1 (5) NET CASHFLOW FROM OPERATING ACTIVITIES 349 321 28 CASHFLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (40) (51) 11Purchase of interest in associated undertaking (3) 3Proceeds from sale of property, plant and equipment 4 51 (47)Costs of disposal of subsidiary undertakings (5) 5Interest received 18 11 7Dividends received 2 5 (3)Decrease/(increase) in interest bearing deposits 233 (718) 951 NET CASH USED IN INVESTING ACTIVITIES 217 (710) 927 CASHFLOWS FROM FINANCING ACTIVITIESRepayment of borrowings (12) (23) 11Payment of finance lease liabilities (69) (227) 158Exercise of share options 1 1Distributions made to holders of perpetual securities (3) (3) NET CASH USED IN FINANCING ACTIVITIES (83) (253) 170 Net increase/(decrease) in cash and cash equivalents 483 (642) 1,125Net foreign exchange difference 2 (6) 8Cash and cash equivalents at March 31 548 1,027 (479) CASH AND CASH EQUIVALENTS AT JUNE 30 1,033 379 654 These summary financial statements were approved by the Directors on August 4,2005. NOTES TO THE ACCOUNTS (unaudited)For the period ended June 30, 2005 1 BASIS OF PREPARATION These summary financial statements have been prepared in accordance with therecognition and measurement criteria of International Financial ReportingStandards (IFRS)* issued by the International Accounting Standards Board (IASB)and with those of the Standing Interpretations issued by the InternationalFinancial Reporting Interpretations Committee (IFRIC) of the IASB with theexception of the disclosure requirements of IAS 34 - 'Interim Reporting'. Theaccounting policies and basis of preparation differ from those set out in theReport and Accounts for the year ended March 31, 2005 which were prepared inaccordance with United Kingdom accounting standards and the Companies Act 1985(UK GAAP). A summary of the significant accounting policies used in the preparation ofthese financial statements under IFRS and a summary of the impact of the changefrom UK GAAP to IFRS on comparative periods as required by IFRS 1 - 'First-timeadoption of International Financial Reporting Standards' were included in thegroup's 'Release of financial information for 2004/05 under InternationalFinancial Reporting Standards' published on July 4, 2005. The release includedthe quarterly results for the quarters ended June 30, 2004, September 30, 2004,December 31, 2004 and March 31, 2005 restated under the recognition andmeasurement rules of IFRS and a summary of the significant differences to UKGAAP. The release also included restated balance sheets at those dates inaddition to the restated balance sheet at April 1, 2004, the group's transitiondate to IFRS. As permitted under IFRS 1, the group elected to apply the requirements of IAS 32- 'Financial Instruments - Disclosure and Presentation' and IAS 39 - 'FinancialInstruments - Recognition and Measurement' from April 1, 2005. As a consequencecertain assets and liabilities are required to be recognised and measured atfair value. As a result of the application of IAS 39 the opening net assets ofthe group increased by £183 million at April 1, 2005. The increase representsthe fair value of financial instruments and available for sale financial assets(£193 million, net of deferred tax), partially offset by the impact of thegroup's share of the opening reserves adjustments of associated undertakings(£10 million). The adoption of IAS 32 had no impact on the reserves or netassets of the group except for minor presentational differences between minorityinterests and shareholders' equity. Under IAS 39, financial instruments are recorded initially at fair value.Subsequent measurement of those instruments at the balance sheet date reflectsthe designation of the financial instrument. Listed investments (other than interests in associates) are designated asavailable-for-sale assets and are recorded at fair value. Any change in the fairvalue is reported in reserves until the investment is sold when the cumulativereserves movement is recognised in income. Any provisions for impairment of thecarrying value are reflected in income when they arise. Exchange gains andlosses on monetary items are taken to income unless the item has been designatedas a hedging instrument. Exchange gains and losses on non-monetary investmentsare reflected in reserves until the investment is sold when the balance isrecognised in income. Derivative financial instruments, comprising interest rate swap agreements,foreign exchange derivatives and fuel hedging derivatives (including options,swaps and collars) are measured at fair value on the group balance sheet.Changes in the fair value are reported through operating income or financingaccording to the nature of the derivative financial instrument unless thederivative financial instrument has been designated as a hedge of a highlyprobable expected future cashflow. Gains and losses on forward exchangecontracts to hedge capital expenditure commitments are recognised as part of thetotal sterling carrying cost of the relevant tangible asset as the contractsmature or are closed out. Gains and losses on derivative financial instrumentsdesignated as hedging instruments that are expected to be highly effective atinception and were highly effective for the period are taken to reserves andreflected in the income statement when the cashflow either occurs or ceases tobe highly probable. Certain loan repayment instalments denominated in US dollars and Japanese yenare designated as hedges of highly probable future foreign currency revenues.Exchange differences arising from the translation of these loan repaymentinstalments are taken to reserves until the future revenue occurs when thecumulative exchange difference is recognised in income. The hedging relationships are tested for effectiveness in accordance with IAS 39- 'Financial Instruments'. Long term borrowings, finance leases and hire purchase agreements are recordedat amortised cost. Certain leases contain interest rate swaps that are closelyrelated to the underlying financing and, as such, are not accounted for as anembedded derivative. The carrying value of the interest rate swap is reflectedwithin the carrying value of the long term borrowing. NOTES TO THE ACCOUNTS (unaudited) (Continued)For the period ended June 30, 2005 BASIS OF PREPARATION (continued) The financial information presented has been prepared on the basis of thoseStandards and Interpretations of the International Financial ReportingInterpretations Committee (IFRIC) and Standing Interpretations Committee (SIC)that are expected to be applicable to 2005/06 financial reporting. These aresubject to ongoing review and endorsement by the European Commission, whilst theapplication of the Standards continues to be subject to interpretation by IFRICas well as emerging industry consensus. As a consequence, further adjustments tothe accounting policies and treatments may need to be made in the first completeset of IFRS financial statements for 2005/06 for the year ending March 31, 2006. These financial statements have been prepared on a historical cost conventionexcept for certain financial assets and liabilities, including derivativefinancial instruments and available-for-sale financial assets, that are measuredat fair value. The carrying value of recognised assets and liabilities that arehedged are adjusted to record changes in the fair values attributable to therisks that are being hedged. * For the purposes of these statements IFRS also include International Accounting Standards (IAS). 2 FINANCE COSTS / INCOME Three months ended June 30 2005 £m 2004 £m INTEREST EXPENSEInterest payable on bank and other loans andfinance charges payable under finance leases andhire purchase contracts 59 66Interest capitalisedTotal interest costs 59 66 INTEREST INCOMEBank interest receivable 21 18Total interest income 21 18 FINANCING INCOME AND EXPENSE RELATING TO PENSIONSFinancing income and expense relating to pensions 4 11Amortisation of actuarial (gains)/losses on pensionsTotal financing income and expense relating to pensions 4 11 Retranslation on currency borrowings (9) 12 3 LOSS ON SALE OF FIXED ASSETS AND INVESTMENTS Three months ended June 30 2005 £m 2004 £m Net loss on the disposal of property, plant andequipment (3) (3) (3) (3)4 TAX The tax charge for the quarter is £34 million, £12 million of which representsdeferred tax in the UK and £22 million represents current tax in the UK. 5 EARNINGS PER SHARE Basic earnings per share for the quarter ended June 30, 2005 are calculated on aweighted average of 1,080,074,000 ordinary shares (June 2004: 1,070,112,000;March 2005: 1,071,126,000) as adjusted for shares held for the purposes ofemployee share ownership plans including the Long Term Incentive Plan. Dilutedearnings per share for the quarter ended June 30, 2005 are calculated on aweighted average of 1,128,239,000 ordinary shares (June 2004: 1,118,145,000;March 2005: 1,126,485,000). The number of shares in issue at June 30, 2005 was 1,130,882,000 (June 30, 2004:1,082,903,000; March 31, 2005: 1,082,903,000) ordinary shares of 25 pence each. NOTES TO THE ACCOUNTS (unaudited) (Continued)For the period ended June 30, 2005 6 RECONCILIATION OF MOVEMENT IN NET DEBT TO CHANGES IN CASH FLOWS Three months ended June 30 2005 £m 2004 £m Increase/(decrease) in cash and cash equivalents during the period 483 (642)Net cash used in repayment of long-term borrowings 81 250(Reduction)/increase in interest bearing deposits (233) 718Change in net debt resulting from cash flows 331 326New finance leases taken out and hirepurchase arrangements made (2) (3)Conversion of Convertible Capital Bonds 2005 112Exchange movements (46) 11Movement in net debt during the period 395 334Net debt at April 1 (2,922) (4,158)Net debt at period end (2,527) (3,824) Net debt comprises the current and non-current portions of long-term borrowings,convertible long-term borrowings and overdrafts, less cash and cash equivalentsplus interest-bearing short-term deposits. 7 ANALYSIS OF LONG-TERM BORROWINGS June 30 June 30 March 31 2005 £m 2004 £m 2005 £m Interest bearing long-term borrowings comprise:Loans 1,102 1,103 1,105Finance Leases 1,488 1,938 1,493Hire purchase arrangements 1,426 1,717 1,447 4,016 4,758 4,045 Current portion of long-term borrowings comprise:Loans 62 100 63Finance Leases 100 137 96Hire purchase arrangements 285 452 288 447 689 447 8 RESERVES June 30 June 30 March 31 2005 £m 2004 £m 2005 £mBalance at April 1 940 557 557Transitional effects from the adoption of IAS 39 and IAS 32 383Profit for the period 90 43 392Distributions to perpetual preferred security holders (3) (3) (14)Conversion of Convertible Capital Bonds 2005 100Exchange and other movements 2 (20) 5 1,512 577 940 9 The figures for the three months ended June 30, 2005 and 2004 are unauditedand do not constitute full accounts within the meaning of Section 240 of theCompanies Act 1985. The financial statements for the year ended March 31, 2005have been delivered to the Registrar of Companies and on which the auditors haveissued an unqualified audit report and did not contain a statement under Section237 of the Companies Act 1985. INDEPENDENT REVIEW REPORT TO BRITISH AIRWAYS Plc Introduction We have been instructed by the Company to review the financial information forthe three months ended June 30, 2005, which comprises the Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Cash Flow Statement andNotes to the Accounts. We have read the other information contained in the firstquarter results and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the Company in accordance with guidance containedin Bulletin 1999/4 'Review of Interim Financial Information' issued by theAuditing Practices Board. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than the Company, for our work,for this report, or for the conclusions we have formed. Directors' responsibilities The first quarter results, including the financial information containedtherein, is the responsibility of, and has been approved by the directors. Thedirectors are responsible for preparing the interim report in accordance withthe Listing Rules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the Group willbe prepared in accordance with those IFRSs adopted for use by the EuropeanUnion. The accounting policies are consistent with those that the directors intend touse in the next financial statements. There is, however, a possibility that thedirectors may determine that some changes to these policies are necessary whenpreparing the full annual financial statements for the first time in accordancewith those IFRS adopted for use by the European Union. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4'Review of interim financial information' issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of Group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies have been applied. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the three monthsended June 30, 2005. Ernst & Young LLPLondon August 4, 2005 UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) INFORMATION(unaudited and for information only) The accounts have been prepared in accordance with the measurement andrecognition requirements of International Financial Reporting Standards (IFRS)that differ in certain respects from those generally accepted in the UnitedStates. The group has restated the comparatives to recognise the adoption of IFRS. The adjusted net income and shareholders' equity applying US GAAP are set outbelow: Three months ended June 30 2005 £m 2004 £m Profit for the period as reported in theGroup profit and loss account 90 43US GAAP adjustments (59) 15Net income as so adjusted toaccord with US GAAP 31 58 Net income per Ordinary Shareas so adjustedBasic 2.9p 5.4pDiluted 2.7p 5.4p Net income per American Depositary Shareas so adjustedBasic 29p 54pDiluted 27p 54p June 30 March 31 2005 £m 2004 £m 2005 £m Shareholders' equity and minority interests asreported in the Group balance sheet 1,783 1,028 1,397US GAAP adjustments 530 980 766Shareholders' equity and minority interests as soadjusted to accord with US GAAP 2,313 2,008 2,163 AIRCRAFT FLEET(unaudited and for information only) Number in service with Group companies at June 30, 2005 On Balance Off Balance Changes Sheet Sheet Total Since Future Aircraft Aircraft June 2005 March 2005 deliveries OptionsAIRLINE OPERATIONS (Note 1) Boeing 747-400 57 57Boeing 777 40 3 43Boeing 767-300 21 21Boeing 757-200 13 13Airbus A319 (Note 2) 21 12 33 3 45Airbus A320 (Note 3) 9 17 26 3Airbus A321 6 6 1Boeing 737-300 5 5Boeing 737-400 (Note 4) 18 18Boeing 737-500 9 9 (1)Turboprops (Note 5) 8 8 (1)Embraer RJ145 16 12 28Avro RJ100 16 16British Aerospace 146 4 4 (1)GROUP TOTAL 205 82 287 (3) 7 45 Notes: 1. Includes those operated by British Airways Plc and British Airways CitiExpress Ltd. 2. Certain future deliveries and options include reserved delivery positions, and may be taken as any A320 family aircraft. 3. Excludes 1 Airbus 320 sub-leased to GB Airways. 4. Excludes 2 Boeing 737-400s sub-leased to Air One. 5. Comprises 8 de Havilland Canada DHC-8s. Excludes 5 British Aerospace ATPs stood down pending return to lessor and 12 Jetstream 41s sub-leased to Eastern Airways. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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