30th May 2006 07:03
Vodafone Group Plc30 May 2006 Vodafone Group PlcPreliminary Results for the year ended 31 March 2006PART 4 NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31 MARCH 2006 (CONTINUED) 5 (Loss)/earnings per share 2006 2005 Weighted average number of shares for basic earnings pershare (millions) 62,607 66,196Weighted average number of shares for diluted earnings pershare (millions) (1) 62,607 66,427 Basic (loss)/earnings per share from continuing operations (27.66)p 8.12pDiluted (loss)/earnings per share from continuing operations (27.66)p 8.09p Basic (loss)/earnings per share on (loss)/profit for thefinancial year (35.01)p 9.68pDiluted (loss)/earnings per share on (loss)/profitfor the financial year (35.01)p 9.65p Adjusted basic earnings per share from continuing operations 10.11p 8.95pAdjusted diluted earnings per share from continuingoperations (1) 10.08p 8.92p 2006 2005 £m £m (Loss)/profit for the financial year (21,916) 6,410Loss/(profit) from discontinued operations 4,598 (1,035) -------- --------(Loss)/profit for (loss)/earnings per share from continuingoperations (17,318) 5,375Adjustments:- Impairment losses 23,515 475- Other income and expense (15) -- Share of associated undertakings' non-operating income (17) -- Non-operating income and expense 2 7- Changes in the fair value of equity put rights and similar arrangements 161 67- Tax on items not related to underlying business performance - 3 -------- --------Profit for adjusted earnings per share from continuingoperations 6,328 5,927 ======== ======== (1) In the year ended 31 March 2006, 183 million shares have been excluded from the calculation of the weighted average number of shares as they are anti dilutive. The weighted average number of shares for adjusted diluted earnings per share from continuing operations was 62,790 million, including the 183 million shares. 6 Dividends 2006 2005 £m £mEquity dividends on ordinary shares: Declared and paid during the financial year: Final dividend for the year ended 31 March 2005: 2.16pence per share (2004: 1.078 pence per share) 1,386 728 Interim dividend for the year ended 31 March 2006: 2.20pence per share (2005: 1.91 pence per share) 1,367 1,263 --------- --------- 2,753 1,991 ========= ========= Proposed or declared but not recognised as a liability: Final dividend for the year ended 31 March 2006: 3.87pence per share (2005: 2.16 pence per share) 2,327 1,386 ========= ========= 7 Cash flow information Reconciliation of net cash flows from operating activities: 2006 2005 £m £m (Loss)/profit for the year from continuing operations (17,233) 5,416(Loss)/profit for the year from discontinued operations (4,588) 1,102Adjustments(1): Tax on profit 2,520 1,433 Depreciation and amortisation 5,834 5,517 Loss on disposal of property, plant and equipment 88 162 Non operating income and expense 2 (6) Investment income (353) (303) Financing costs 1,123 900 Impairment losses 28,415 475 Other income and expense (15) - Share of result in associated undertakings (2,428) (1,980) --------- ---------Operating cash flows before movements in working capital 13,365 12,716 Decrease in inventory 23 17 Decrease/(increase) in trade and other receivables 54 (321) Increase in payables 81 145 --------- ---------Cash generated by operations 13,523 12,557 Tax paid (1,682) (1,578) --------- ---------Net cash flows from operating activities(1) 11,841 10,979 ========= ========= (1) Adjustments includes amounts relating to continuing and discontinued operations Cash flows from discontinued operations: 2006 2005 £m £m Net cash flows from operating activities 1,651 1,739Net cash flows from investing activities (939) (448)Net cash flows from financing activities (536) (1,289) --------- ---------Net increase in cash and cash equivalents 176 2Cash and cash equivalents at the beginning of thefinancial year 4 3Exchange loss on cash and cash equivalents (19) (1) --------- ---------Cash and cash equivalents at the end of the financial year 161 4 ========= ========= 8 Acquisitions A summary of the Group's significant acquisitions in the financial year is asfollows: Czech Republic South and Romania Africa India £m £m £m Net assets acquired 652 589 315Revaluation of identifiable assets andliabilities held (112) - -Minority interest (2) (9) -Goodwill 1,367 878 543 ------ ------- -------Cash consideration 1,905 1,458 858 ====== ======= ======= Net cash outflow arising on acquisition:Cash consideration 1,905 1,458 858Cash and cash equivalentsacquired (65) (14) (9) ------ ------- ------- 1,840 1,444 849 ====== ======= ======= Czech Republic and Romania On 31 May 2005, the Group acquired 99.99% of the issued share capital ofClearWave N.V. for cash consideration of £1,905 million. ClearWave N.V. is theparent company of a group of companies involved in the provision of mobiletelecommunications in the Czech Republic and Romania. This transaction has beenaccounted for by the purchase method of accounting. On 31 March 2006, thecancellation of the minority shareholdings in ClearWave N.V. was completed,resulting in the Group owning the entire issued share capital of this company. South Africa On 26 January 2006, the Group announced that its offer to acquire a 100%interest in VenFin Limited ("VenFin") had become wholly unconditional. VenFin'sprincipal asset was a 15% stake in Vodacom. At 31 March 2006 the Group held aneffective economic interest in VenFin of 98.7% and an effective voting interestof 99.3%. On 20 April 2006, the Group completed the compulsory acquisition ofthe remaining minority shareholdings in VenFin, from which date the Group held100% of the issued share capital of VenFin. As a result, the Group holds 50% ofthe share capital of Vodacom. This transaction has been accounted for by thepurchase method of accounting. India On 22 December 2005, the Group completed the acquisition of a 10% economicinterest in Bharti Tele-Ventures Limited (now renamed Bharti Airtel Limited) forcash consideration of Rs.66.56 billion (£858 million). Bharti Airtel Limited isinvolved in the provision of mobile telecommunications in India. The acquisition was undertaken by way of a direct investment in 5.61% of theordinary share capital of Bharti Airtel Limited and the acquisition of 100% ofBharti Enterprises Private Limited, who hold a 4.39% economic interest in BhartiAirtel Limited. This transaction has been accounted for by the purchase methodof accounting. 9 Summary of differences between IFRS and US GAAP The preliminary results have been prepared in accordance with IFRS, which differin certain significant respects from US Generally Accepted Accounting Principles("US GAAP"). The following is a summary of the effects of the adjustments fromIFRS to US GAAP. Amounts at 31 March 2005 and for the year then ended have beenrestated to give effect to the modified retrospective adoption of SFAS No. 123(Revised 2004). 2006 2005 £m £m Restated Revenue (IFRS) 29,350 26,678 Items (decreasing)/increasing revenue: Discontinued operations (944) (1,108) Basis of consolidation (5,756) (5,423) Connection revenue 1,106 1,223 ----------- -----------Revenue (US GAAP) 23,756 21,370 =========== =========== IFRS (loss)/profit for the financial year (21,821) 6,518 Items (increasing)/decreasing net loss: Investments accounted for under the equity method (1,230) (5,440) Connection revenue and costs 10 16 Goodwill and other intangible assets (14,299) (15,534) Impairment losses 15,377 475 Amortisation of capitalised interest (108) (105) Interest capitalised during the financial year 36 19 Other (42) 99 Income taxes 8,902 6,680 Minority interests (95) (108) Cumulative effect of change in accounting principle: post employment benefits - (195) Cumulative effect of change in accounting principle: intangible assets - (6,177) ----------- -----------Net loss (US GAAP) (13,270) (13,752) =========== =========== Basic and diluted loss per share: Loss from continuing operations (11.64)p (12.03)p Loss/(income) from operations and disposal of discontinued operations (9.56)p 0.89p Cumulative effect of changes in accounting principles - (9.63)p ----------- -----------Net loss (21.20)p (20.77)p =========== =========== IFRS total equity 85,312 113,648 Items increasing/(decreasing) shareholders'equity: Investments accounted for under the equity method (2,287) (982) Connection revenue and costs (5) (14) Goodwill and other intangible assets 32,552 31,714 Capitalised interest 1,443 1,529 Other 210 104 Income taxes (30,354) (38,856) Minority interests 113 152 ----------- -----------Shareholders' equity in accordance with US GAAP 86,984 107,295 =========== =========== Adoption of SFAS No 123 (Revised 2004) The Group adopted SFAS No. 123 (Revised 2004), "Share-based Payment", andrelated FASB staff positions on 1 October 2005. SFAS No. 123 (Revised 2004)eliminates the option to account for share-based payments to employees using theintrinsic value method and requires share-based payments to be recorded usingthe fair value method. Under the fair value method, the compensation cost foremployees and directors is determined at the date awards are granted andrecognised over the service period. Concurrent with the adoption of SFAS No. 123 (Revised 2004), the Group adoptedStaff Accounting Bulletin (SAB) 107. SAB 107 summarises the views of theSecurities and Exchange Commission ("SEC") staff regarding the interactionbetween SFAS No. 123R and certain SEC rules and regulations and provides the SECStaff's views regarding the valuation of share-based payment arrangements forpublic companies. The Group has adopted SFAS No. 123 (Revised 2004) using the modifiedretrospective method. Under this method, the Group has adjusted the financialstatements for the periods between 1 April 1995 and 30 September 2005 to giveeffect to the fair value method of accounting for awards granted, modified orsettled during those periods on a basis consistent with the pro forma amountsdisclosed under the requirements of the original SFAS No. 123, "Accounting forStock-Based Compensation". The provisions of SFAS No. 123 (Revised 2004) will beapplied to all awards granted, modified, or settled after 1 October 2005. The effect of applying the original provisions of SFAS No. 123 under themodified retrospective method of adoption on the year ended 31 March 2005 was todecrease loss before income taxes, loss from continuing operations and net lossby £66 million, £30 million and £30 million respectively (six months ended 30September 2005: increases of £4 million, £8 million and £8 million respectively). The adjustment also had the effect of decreasing both basic and diluted loss per share from continuing operations and net loss per share by 0.05 pence (six months ended 30 September 2005: increase of 0.01 pence). The adoption of SFAS No. 123 (Revised 2004) increased shareholders' equity at 1 April 2004 by £112 million. Impairment losses As discussed in note 3, during the year ended 31 March 2006, the Group recordedimpairment losses of £23,000 million in relation to the goodwill of VodafoneGermany and Vodafone Italy. Under US GAAP, the Group evaluated therecoverability of the long-lived assets in Vodafone Germany and Vodafone Italyusing undiscounted cash flows, in accordance with the requirements of SFAS No.144, and determined that the carrying amount of these assets was recoverable. Asa result, the IFRS impairment charges of £23,000 million related to VodafoneGermany and Vodafone Italy were not recognised under US GAAP. During the year ended 31 March 2006, the Group also recorded impairment lossesof £515 million and £4,900 million in relation to the goodwill of VodafoneSweden and Vodafone Japan, respectively. Under US GAAP, the Group recognisedimpairment losses of licences of £883 million and £8,556 million in VodafoneSweden and Vodafone Japan. As a result of these impairment losses, the Groupreleased related deferred tax liabilities of £247 million and £3,508 million,which have been included in the adjustment for income taxes. The impairmentlosses of Vodafone Sweden's and Vodafone Japan's licences have been included indiscontinued operations under US GAAP. Discontinued operations As discussed in note 3, the Group disposed of its interests in Vodafone Swedenand entered into agreements to dispose of its stake in Vodafone Japan during theyear ended 31 March 2006. Both operations have been classified as discontinuedunder US GAAP. UNAUDITED PROPORTIONATE FINANCIAL INFORMATIONFOR THE YEAR ENDED 31 MARCH 2006 Basis of preparation The tables of financial information below are presented on a proportionate basisfrom continuing operations. Proportionate presentation is not a measurerecognised under IFRS and is not intended to replace the full year resultsprepared in accordance with IFRS. However, since significant entities in whichthe Group has an interest are not consolidated, proportionate information isprovided as supplemental data to facilitate a more detailed understanding andassessment of the full year results prepared in accordance with IFRS. IFRS requires consolidation of entities which the Group has the power to controland allows either proportionate consolidation or equity accounting for jointventures. IFRS also requires equity accounting for interests in which the Grouphas significant influence but not a controlling interest. The proportionate presentation, below, is a pro rata consolidation, whichreflects the Group's share of revenue and expenses in entities, bothconsolidated and unconsolidated, in which the Group has an ownership interest.Proportionate results are calculated by multiplying the Group's ownershipinterest in each entity by each entity's results. Proportionate presentation of financial information differs in material respectsto the proportionate consolidation adopted by the Group under IFRS for its jointventures. Proportionate information includes results from the Group's equity accountedinvestments and other investments. The Group may not have control over therevenue, expenses or cash flows of these investments and may only be entitled tocash from dividends received from these entities. Group proportionate revenue is stated net of intercompany revenue. ProportionateEBITDA represents the Group's ownership interests in the respective entities'EBITDA. As such, proportionate EBITDA does not represent EBITDA available to theGroup. Reconciliation of proportionate revenue to statutory revenue 2006 2005 £m £m Proportionate revenue 41,355 36,859Minority share of revenue in subsidiary undertakings 666 465Group share of revenue in associated undertakings andtrade investments (12,671) (10,646) --------- ---------Statutory revenue 29,350 26,678 ========= ========= Reconciliation of proportionate EBITDA to profit for the financial year 2006 2005 £m £m Proportionate EBITDA 16,380 14,761Minority share of EBITDA in subsidiary undertakings 224 141Group's share of EBITDA in associated undertakings andother investments (4,838) (4,162) --------- ---------Group EBITDA 11,766 10,740Charges for depreciation and amortisation (4,709) (4,299)Loss on disposal of property, plant and equipment (69) (68)Share of results in associated undertakings 2,428 1,980Impairment losses (23,515) (475)Other income and expense 15 - --------- ---------Operating (loss)/profit (14,084) 7,878Non-operating income (2) (7)Investment income 353 294Financing costs (1,120) (880)Tax on (loss)/profit (2,380) (1,869)(Loss)/profit for the financial year from discontinuedoperations (4,588) 1,102 --------- ---------(Loss)/profit for the financial year (21,821) 6,518 ========= ========= OTHER INFORMATION 1) Copies of this document are available from the Company's registered office: Vodafone HouseThe ConnectionNewburyBerkshireRG14 2FN 2) These preliminary results will be available on the Vodafone Group Plc website, www.vodafone.com, from 30 May 2006. For further information: Vodafone GroupInvestor Relations Media RelationsTelephone: +44 (0) 1635 664447 Telephone: +44 (0) 1635 664444 High resolution photographs are available to the media free of charge atwww.newscast.co.uk. Video interviews with Arun Sarin, Chief Executive, and Andy Halford, ChiefFinancial Officer, are available on www.vodafone.com and www.cantos.com. Alsoavailable in audio and transcript. Vodafone, Vodafone live!, Vodafone Mobile Connect, Vodafone Wireless Office,Vodafone Simply, Vodafone Passport, Stop the Clock and Vodafone Radio DJ aretrademarks of the Vodafone Group. The RIM and BlackBerry(R) family of relatedmarks, images and symbols are the exclusive properties and trademarks ofResearch In Motion Limited - used by permission. Other product and company namesmentioned herein may be the trademarks of their respective owners. FORWARD-LOOKING STATEMENTS This document contains "forward-looking statements" within the meaning of the USPrivate Securities Litigation Reform Act of 1995 with respect to the Group'sfinancial condition, results of operations and businesses and certain of theGroup's plans and objectives. In particular, such forward-looking statements include statements with respectto Vodafone's expectations as to launch and roll-out dates for products,services or technologies offered by Vodafone; intentions regarding thedevelopment of products and services introduced by Vodafone or by Vodafone inconjunction with initiatives with third parties; the ability to integrate alloperations throughout the Group in the same format and on the same technicalplatform and the ability to be operationally efficient; the development andimpact of new mobile technology; anticipated benefits to the Group of the OneVodafone programme; the results of Vodafone's brand awareness and brandpreference campaigns; growth in customers and usage, including improvements incustomer mix; future performance, including turnover, average revenue per user("ARPU"), cash flows, costs, capital expenditures and margins, non-voiceservices and their revenue contribution; share purchases; the rate of dividendgrowth by the Group or its existing investments; expectations regarding theGroup's access to adequate funding for its working capital requirements;expected effective tax rates and expected tax payments; the ability to realisesynergies through cost savings, revenue generating services, benchmarking andoperational experience; future acquisitions, including increases in ownership inexisting investments and pending offers for investments; future disposals;contractual obligations; mobile penetration and coverage rates; the impact ofregulatory and legal proceedings involving Vodafone; expectations with respectto long-term shareholder value growth; Vodafone's ability to be the mobilemarket leader, overall market trends and other trend projections. Forward-looking statements are sometimes, but not always, identified by theiruse of a date in the future or such words as "anticipates", "aims", "could","may", "should", "expects", "believes", "intends", "plans" or "targets". Bytheir nature, forward-looking statements are inherently predictive, speculativeand involve risk and uncertainty because they relate to events and depend oncircumstances that will occur in the future. There are a number of factors thatcould cause actual results and developments to differ materially from thoseexpressed or implied by these forward-looking statements. These factors include,but are not limited to, the following: changes in economic or politicalconditions in markets served by operations of the Group that would adverselyaffect the level of demand for mobile services; greater than anticipatedcompetitive activity, from both existing competitors and new market entrants,including Mobile Virtual Network Operators ("MNVOs"), which could requirechanges to the Group's pricing models, lead to customer churn and make it moredifficult to acquire new customers, and reduce profitability; the impact ofinvestment in network capacity and the deployment of new technologies, or therapid obsolescence of existing technology; slower than expected customer growthand reduced customer retention; changes in the spending patterns of new andexisting customers; the possibility that new products and services, includingmobile internet platforms, 3G, Vodafone live!, Vodafone Radio DJ and otherproducts and services, will not be commercially accepted or perform according toexpectations or that vendors' performance in marketing these technologies willnot meet the Group's requirements; the Group's ability to win 3G licenceallocations; the Group's ability to realise expected synergies and benefitsassociated with 3G technologies; a lower than expected impact of GPRS, 3G,Vodafone live!, Vodafone Radio DJ and other new or existing products, servicesor technologies on the Group's future revenue, cost structure and capitalexpenditure outlays; the ability of the Group to harmonise mobile platforms anddelays, impediments or other problems associated with the roll-out and scope of3G technology, Vodafone live!, Vodafone Radio DJ and other new or existingproducts, services or technologies in new markets; the ability of the Group tooffer new services and secure the timely delivery of high-quality, reliable GPRSand 3G handsets, network equipment and other key products from suppliers; theGroup's ability to develop competitive data content and services that willattract new customers and increase average usage; future revenue contributionsof both voice and non-voice services; greater than anticipated prices of newmobile handsets; changes in the costs to the Group of or the rates the Group maycharge for terminations and roaming minutes; the Group's ability to achievemeaningful cost savings and revenue improvements as a result of its One Vodafoneinitiative; the ability to realise benefits from entering into partnerships fordeveloping data and internet services and entering into service franchising andbrand licensing; the possibility that the pursuit of new, unexpected strategicopportunities may have a negative impact on the Group's financial performance;developments in the Group's financial condition, earnings and distributablefunds and other factors that the Board of Directors takes into account indetermining the level of dividends; any unfavourable conditions, regulatory orotherwise, imposed in connection with pending or future acquisitions ordispositions and the integration of acquired companies in the Group's existingoperations; the risk that, upon obtaining control of certain investments, theGroup discovers additional information relating to the businesses of thatinvestment leading to restructuring charges or write-offs or with other negativeimplications; changes in the regulatory framework in which the Group operates,including possible action by regulators in markets in which the Group operatesor by the EU regulating rates the Group is permitted to charge; the impact oflegal or other proceedings against the Group or other companies in the mobiletelecommunications industry; the possibility that new marketing or usagestimulation campaigns or efforts and customer retention schemes are not aneffective expenditure; the possibility that the Group's integration efforts donot reduce the time to market for new products or improve the Group's costposition; loss of suppliers or disruption of supply chains. the Group's abilityto satisfy working capital requirements through borrowing in capital markets,bank facilities and operations; changes in exchange rates, includingparticularly the exchange rate of pounds sterling to the euro and the US dollar;changes in statutory tax rates and profit mix which would impactthe weighted average tax rate; changes in tax legislation in the jurisdictionsin which the Group operates; and final resolution of open issues which mightimpact the effective tax rate; timing of tax payments relating to the resolutionof open issues. Furthermore, a review of the reasons why actual results and developments maydiffer materially from the expectations disclosed or implied withinforward-looking statements can be found under "Risk Factors and LegalProceedings - Risk Factors" in Vodafone Group Plc's Annual Report for the yearended 31 March 2005. All subsequent written or oral forward-looking statementsattributable to the Company or any member of the Group or any persons acting ontheir behalf are expressly qualified in their entirety by the factors referredto above. No assurances can be given that the forward-looking statements in thisdocument will be realised. Neither Vodafone nor any of its affiliates intends toupdate these forward-looking statements. USE OF NON-GAAP FINANCIAL INFORMATION In presenting and discussing the Group's reported financial position, operatingresults and cash flows, certain information is derived from amounts calculatedin accordance with IFRS but this information is not itself an expresslypermitted GAAP measure. Such non-GAAP measures should not be viewed in isolationas alternatives to the equivalent GAAP measure. A summary of certain non-GAAP measures included in this results announcement,together with details where additional information and reconciliation to thenearest equivalent GAAP measure can be found, is shown below. Location in this results Equivalent GAAP announcement of reconciliationNon-GAAP measure measure and further information------------------------ ------------------- -------------------------------Group EBITDA Profit for the Proportionate financial financial year information on page 37 Mobile EBITDA Operating profit Business review on page 6 Adjusted operating profit Operating profit Business review on page 6 Adjusted profit before Profit before tax Financial update on page 21tax Operating free cash flow Net cash flows from Cash flows and funding on page operating activities 23 Adjusted profit for the Profit for the Note 5 on page 32year attributable to financial yearequity shareholders Adjusted earnings per Earnings per share Note 5 on page 32share Free cash flow Net cash flows from Cash flows and funding on page operating activities 23 Net debt Cash and cash Cash flows and funding on page equivalents 23 Proportionate revenue Statutory revenue Proportionate financial information on page 37 Proportionate EBITDA Profit for the Proportionate financial financial year information on page 37 Adjusted effective tax Tax on profit as a Financial update on page 21rate percentage of profit before taxation In addition, the trading results of the Group and key markets present certainGAAP financial information, being revenue and cost of sales related toacquisition and retention activity, on a net basis. The Group believes that thisbasis of presentation provides useful information for investors regarding trendsin net subsidies with respect to the acquisition and retention of customers andfacilitates comparability of results with other companies operating in themobile telecommunications business. "Other revenue", "Net acquisition costs" and"Net retention costs", as used in the trading results, are defined on page 41. DEFINITION OF TERMS Term Definition------------ -----------------------------------------------------------------3G broadband 3G services enabled with High Speed Downlink Packet Access ("HSDPA") technology which enables data transmission speeds of up to 2 megabits per second. 3G device A handset or device capable of accessing 3G data services. Acquired Amortisation relating to intangible assets identified andintangibles recognised separately in respect of a business combination inamortisation excess of the intangible assets recognised by the acquiree prior to acquisition. Active A customer who pays a monthly fee or has made or received acustomer chargeable event in the last three months. ARPU Total revenue excluding handset revenue and connection fees divided by the weighted average number of customers during the period. Average Total ARPU in an accounting period divided by the number of monthsmonthly ARPU in the period. Capitalised This measure includes the aggregate of capitalised property, plantfixed asset and equipment additions and capitalised software costs.additions Churn Total gross customer disconnections in the period divided by the average total customers in the period. Controlled The networks include the Group's mobile operating subsidiaries andand jointly joint ventures. Measures for controlled and jointly controlledcontrolled networks include 100% for subsidiaries and the Group'snetworks proportionate share for joint ventures. Customer A customer is defined as a SIM, or in territories where SIMs do not exist, a unique mobile telephone number, which has access to the network for any purpose (including data only usage) except telemetric applications. Telemetric applications include, but are not limited to, asset and equipment tracking, mobile payment/ billing functionality (for example, vending machines and meter readings) and includes voice enabled customers whose usage is limited to a central service operation (for example, emergency response applications in vehicles). Data revenue Data revenue includes all non-voice service revenue excluding messaging. Depreciation This measure includes the profit or loss on disposal of property,and other plant and equipment and computer software.amortisation Inter-segment Revenue between operating companies of the same business (mobilerevenue or non-mobile) in different reporting segments. Intra-segment Revenue between operating companies of the same business (mobilerevenue or non-mobile) within the same reporting segment. Messaging Messaging revenue includes all SMS and MMS revenue includingrevenue wholesale messaging revenue, revenue from the use of messaging services by Vodafone customers roaming away from their home network and customers visiting the local network. Net The total of connection fees, trade commissions and equipmentacquisition costs, net of related revenue, relating to new customercosts connections. Net debt Long-term borrowings, short term borrowings and mark to market adjustments on financing instruments less cash and cash equivalents. Net retention The total of trade commissions, loyalty scheme and equipmentcosts costs, net of related revenue, relating to customer retention and upgrade. Non-voice Comprises all service revenue that is not related to voiceservice services including, but not limited to, messaging, downloads,revenue Internet browsing and other data services. Organic The percentage movements in organic growth are presented togrowth reflect operating performance on a comparable basis. Where an entity, being a subsidiary, joint venture or associated undertaking, was newly acquired or disposed of in the current or prior period, the Group adjusts, under organic growth calculations, the results for the current and prior period to remove the amount the Group earned in both periods as a result of the acquisition or disposal of subsidiary or associated undertakings. Where the Group increases, or decreases, its ownership interest in a joint venture or associated undertaking in the current or prior period, the Group's results for the prior period are restated at the current period's ownership level. Further adjustments in organic calculations exclude the effect of exchange rate movements by restating the prior period's results as if they had been generated at the current period's exchange rates and excludes the amortisation of acquired intangible assets. Organic growth for proportionate results is adjusted to reflect current year and prior year results at constant exchange rates, using like-for-like ownership levels in both years. Other revenue Comprises all non-service revenue. In the trading results, presented for the mobile telecommunications business and the Group's key markets, net other revenue excludes revenue relating to acquisition and retention activities as such revenue is deducted from acquisition and retention costs. The Group believes that this basis of presentation provides useful information for investors regarding trends in net subsidies with respect to the acquisition and retention of customers and facilitates comparability of results with other companies operating in the mobile telecommunications business. Partner Markets in which the Group has entered into a Partner AgreementMarkets with a local mobile operator enabling a range of Vodafone's global products and services to be marketed in that operator's territory and extending Vodafone's brand reach into such new markets. Purchased Amortisation relating to capitalised licence and spectrum feeslicence purchased directly by the Group, and such fees recognised by anamortisation acquiree prior to acquisition. Vodafone A handset or device equipped with the Vodafone live! portal whichlive! active has made or received a chargeable event in the last month.device This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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