Barclays Q1 2014, 2013 & 2012 Results Restatement

Barclays PLC

Group Reporting Changes

Q1 2014, 2013 & 2012 Results Restatement Document

Table of Contents

BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839

Notes

The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Balance sheet comparative figures have been restated to adopt the offsetting amendments to IAS 32, Financial Instruments: Presentation. The abbreviations £m and £bn represent millions and thousands of millions of Pounds Sterling.

Adjusted profit before tax, adjusted attributable profit and adjusted performance metrics have been presented to provide a more consistent basis for comparing business performance between periods. Adjusting items are considered to be significant and not representative of the underlying business performance. Items excluded from the adjusted measures are: the impact of own credit; disposal of the investment in BlackRock, Inc; the provision for Payment Protection Insurance redress payments and claims management costs (PPI redress); the provision for interest rate hedging products redress and claims management costs (interest rate hedging products redress); and goodwill impairment.

All capital measures, risk weighted assets and leverage disclosures are on a CRD IV basis unless otherwise stated.

Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the Results glossary that can be accessed at www.Barclays.com/results.

The information in this announcement does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the SEC and which contained an unqualified audit report under Section 495 of the Companies Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

Forward-looking Statements

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Barclays PLC's and its subsidiaries' (the Group) plans and its current goals and expectations relating to its future financial condition and performance. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding the Group's future financial position, income growth, assets, impairment charges and provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios), projected levels of growth in the banking and financial markets, projected costs or savings, original and revised commitments and targets in connection with the Transform Programme and Group Strategy Update, run-down of assets and businesses within Barclays Non-Core, estimates of capital expenditures and plans and objectives for future operations, projected employee numbers and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards (IFRS), evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (including with regard to the future structure of the Group) applicable to past, current and future periods; UK, US, Africa Eurozone and global macroeconomic and business conditions; the effects of continued volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of the Group; the potential for one or more countries exiting the Eurozone; the implementation of the Transform Programme; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, and expectations set forth in the Group's forward-looking statements. Additional risks and factors are identified in our filings with the US Securities and Exchange Commission (SEC) including our Annual Report on Form 20-F for the fiscal year ended 31 December 2013 and our quarterly results to 31 March 2014 on form 6-K, which are available on the SEC's website at http://www.sec.gov.

Any forward-looking statements made herein speak only as of the date they are made and it should not be assumed that they have been revised or updated in the light of new information or future events. Except as required by the Prudential Regulation Authority, the Financial Conduct Authority, the London Stock Exchange plc (the LSE) or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Barclays' expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Barclays has made or may make in documents it has published or may publish via the Regulatory News Service of the LSE and/or has filed or may file with the US Securities and Exchange Commission.

Overview of reporting changes

This document provides further details of the impact on the Group's financial reporting as a result of the business reorganisation outlined in the Group Strategy Update on 8 May 2014.

Barclays will now focus on four Core businesses:

· Personal and Corporate Banking;

· Barclaycard;

· Africa Banking; and

· Investment Bank.

A Non-Core segment has also been created, consisting of businesses and assets which are no longer considered a strategic fit with the Core business of Barclays. This segment comprises three main elements:

· Parts of the Investment Bank;

· All of Europe Retail; and

· Parts of the Corporate Bank in Europe and the Middle East, and certain long-dated Corporate loans.

The document outlines the impact on the Group's segmental results from the Group structure changes and the subsequent reallocation of elements of the Head Office results to the businesses post the resegmentation. While the Head Office allocation and resegmentation affects the reported results of the individual businesses, they have no impact on the Group's primary financial statements.

As Management principally reviews adjusting items at a Group level, segmental results are presented on an adjusted basis in accordance with IFRS 8 Operating Segments. Statutory and adjusted performance is reconciled at a Group level only.

A summary of the financial results for the resegmented Group for the year ended 31 December 2013 is shown in the table below:

1 Return on average equity and average tangible equity for Head Office and Barclays Non-Core represents the dilution for Barclays Core and the Group respectively. The change in Barclays Non-Core return on average equity dilution, as compared to the Group Strategy Update on 8 May 2014, includes the transfer, to the Investment Bank, of the £259m gain recognised in Q2 2013 in respect of assets not yet received from the 2008 US Lehman acquisition. As the majority of the activities acquired in 2008 form part of the ongoing core Investment Bank activities and as a direct consequence of the acquisition, it has been determined more appropriate to include this gain within the Investment Bank comparative.

Overview of reporting changes

Segmental restatements

Group Structure changes

In this document the Q1 2014, full year 2013 and full year 2012 segmental results have been restated to align to the new organisational structure announced on 8 May 2014:

Personal and Corporate Banking combines core elements of UK Retail and Business Banking, global Wealth and Investment Management, and global Corporate Banking. Transfers to the Non-Core segment include the UK retail insurance underwriting and investment businesses; selected non-core corporate banking in Europe and the Middle East and certain long-dated corporate loans; local Wealth operations in certain overseas locations; and certain asset management businesses. The African businesses of Corporate Banking and Wealth Management have been moved to Africa Banking. 

Barclaycard is largely unchanged, with the exception of the Africa Cards business moving to Africa Banking and the UK secured lending portfolio moving to Non-Core.

Africa Banking aligns the reporting of the business to how it is now managed. The previously reported Africa Retail and Business Banking has been combined with the other businesses across Africa previously reported within Barclaycard, the Investment Bank, Corporate Banking and Wealth Management. The Africa Head Office function has also been transferred to Africa Banking. This combined Africa Banking business is managed under three primary businesses: Retail and Business Banking; Wealth, Investment Management and Insurance; and Corporate and Investment Banking. The resulting African business comprises the Barclays Africa Group Limited (BAGL) listed entity, together with Barclays Egypt and Zimbabwe businesses.

The Investment Bank now consists of origination led and returns focused markets and banking businesses. Non-strategic and lower returning businesses have been moved to the Non-Core segment and the African Investment Banking business has been moved to Africa Banking. Investment Bank treasury operations have been moved to be reported where they are now managed alongside the Group treasury operations within Head Office and Other Operations.

Head Office and Other Operations is largely unchanged with the exception of the addition of Investment Bank treasury operations and the transfer of the Africa Head Office function.

Barclays Non-Core (BNC) groups together businesses and assets that are not strategically attractive to Barclays and that will be exited over time.

Businesses have been placed in BNC on the basis of two criteria:

· Strategic focus - businesses and portfolios that do not fit with our strategic customer franchise or are a poor fit with our sources of competitive advantage; and

· Returns on CRD IV capital and leverage exposure - businesses and portfolios that are capital and/or leverage intensive, with high cost structures, and do not expect to meet our return targets over the medium term.

Overview of reporting changes

BNC definition and allocations

Key judgments around the allocation of activity and related financial metrics between Core segments and BNC include the following:

Income

Where entire business lines have been determined not to be strategically attractive, they have been placed within BNC. In other areas, particularly within the Investment Bank, particular assets or areas of activity have been identified not to be strategically attractive and similarly placed within BNC. In certain instances, this has involved some judgment including, in particular, the two areas outlined below:

Fixed Income Financing

Following the Strategic Update, the core Fixed Income Financing business has been mandated to operate within limits defined by utilisation of leverage balance sheet. The Group's overall level of activity in this area will be reduced to come in line with these limits over time. Until then, activity in excess of the Investment Bank's mandate is Non-Core and BNC has assumed responsibility for that activity. This principally comprises the transfer of a proportion of the portfolio from the Investment Bank to BNC on arm's length terms. In addition, over time, specific asset types within the Fixed Income Financing business that are not aligned to the firm's ongoing strategy will be identified and transferred to BNC in their entirety, while being run down or exited. 

Derivative portfolios

A number of derivative portfolios in the Investment Bank reflect activity that is no longer attractive for the bank following changes in the regulatory environment and related market behaviour and pricing. Such changes have happened over time but in the interests of simplicity, these portfolios have been defined to comprise positions entered into before the principal implementation of CRD IV. Accordingly, responsibility for those portfolios after that point has been transferred to BNC. The results for those portfolios prior to that point will remain in the historical Investment Bank results.

Expense

Cost allocation 

The direct costs of Non-Core activity are reported within BNC. Where it has been necessary to make allocations of such costs between operating segments, this has been done with the objective of reporting costs in the same operating segment as the related income. Indirect costs, such as those arising from infrastructure and distribution, have been allocated by reference to the same objective, using appropriate measures of activity such as trade volume and time spent.

Litigation and conduct 

Provisions and contingent liabilities relating to litigation and conduct matters are reported within BNC where they relate to Non-Core businesses. Payment Protection Insurance and Interest Rate Hedging Products redress provisions have been reported as adjusting items and are not attributed to any operating segment.

Tax

Tax is recognised within the operating segment that has recognised the associated profit or loss. Deferred tax balances have been allocated to the operating segment that originated the related temporary difference, tax loss or tax credit.

RWAs

RWAs have been allocated to operating segments directly where possible, otherwise using judgemental allocations. Where practicable and appropriate, these methodologies calculate RWAs for Core segments on a standalone basis (such that only the netting and diversification benefits attributable to that segment are incorporated), with the residual allocated to BNC. This would mean that the BNC RWAs are lower than they would be on a standalone basis.

Overview of reporting changes

Head Office Allocations

The Group allocates elements of the Head Office performance to business segments, so that the aggregate of those businesses' results is closely aligned to the Group's results, including Group return on equity.

The underlying principle of materially allocating all of the Head Office income and costs to businesses is unchanged, although the basis of allocation has been updated as part of the restatement, in particular in relation to the following:

· In recognition of the local equity listing of the BAGL entity, the significant minority interest in the business and existing local Head Office functionality, Head Office allocations to Africa Banking have been restated to those that are deemed to be incrementally incurred as a consequence of Barclays operations in Africa. Investment Bank treasury operations have been resegmented to Head Office; and

· Residual Group treasury funding costs have been allocated from Head Office to other segments using appropriate methodologies to reflect business accountability.

Barclays Performance Highlights

1 Attributable profit/(loss) comprises profit/(loss) after tax and non-controlling interests.

2 Return on average equity and average tangible equity for Barclays Non-Core represents the dilution for the Group.

3 Net asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, by the number of issued ordinary shares. Net tangible asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, less goodwill and intangible assets, by the number of issued ordinary shares.

Barclays Performance Highlights

1 Attributable profit/(loss) comprises profit/(loss) after tax and non-controlling interests.

2 Return on average equity and average tangible equity for Barclays Non-Core represents the dilution for the Group.

3 Net asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, by the number of issued ordinary shares. Net tangible asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, less goodwill and intangible assets, by the number of issued ordinary shares.

Barclays Performance Highlights

1 Attributable profit/(loss) comprises profit/(loss) after tax and non-controlling interests. 

2 2012 returns calculated using average allocated equity based on CRD III RWAs and capital deductions.

3 Return on average equity and average tangible equity for Barclays Non-Core represents the dilution for the Group.

4 Net asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, by the number of issued ordinary shares. Net tangible asset value per share is calculated by dividing shareholders' equity, excluding non-controlling and other equity interests, less goodwill and intangible assets, by the number of issued ordinary shares.

Barclays Performance Highlights

Results by Business

1 Attributable profit comprises profit after tax and non-controlling interests.

2 2013 total assets and risk weighted assets include an allocation of liquidity pool assets previously held centrally.

3 As part of the restatement, 2013 returns have been revised for the impact of calculating average allocated equity based on estimated fully loaded CRD IV RWAs and capital deductions (previously based on CRD III).

Results by Business

1 Attributable profit comprises profit after tax and non-controlling interests.

2 2012 returns calculated using average allocated equity based on CRD III RWAs and capital deductions.

Results by Business

Results by Business

1 Attributable profit comprises profit after tax and non-controlling interests.

2 2013 total assets and risk weighted assets include an allocation of liquidity pool assets previously held centrally.

3 As part of the restatement, 2013 returns have been revised for the impact of calculating average allocated equity based on estimated fully loaded CRD IV RWAs and capital deductions (previously based on CRD III). 2012 returns remain based on CRD III.

Results by Business