4th Jul 2005 07:00
British Airways PLC04 July 2005 Appendix I Basis of Preparation This summary financial information has been prepared in accordance with therecognition and measurement criteria of International Financial ReportingStandards (IFRS) and International Accounting Standards (IAS) issued by theInternational Accounting Standards Board (IASB) and with those of the StandingInterpretations issued by the International Financial Reporting InterpretationsCommittee (IFRIC) of the IASB as adopted by the European Union (EU). The accounting policies and basis of preparation differ from those set out inthe Report 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 of thisfinancial information under IFRS is provided below. IFRS 1 - 'First time adoption of International Financial Reporting Standards'sets out the requirements for companies preparing financial statements underIFRS for the first time and requires the accounting policies to be appliedretrospectively. IFRS 1 contains the option to take advantage of certainexemptions to the retrospective application. The Group has applied optionalexemptions as follows: - The accumulated actuarial gains and losses in relation to employee defined benefit plans have been recognised in full at April 1, 2004.- The provisions of IFRS 3 - 'Business Combinations' have been applied prospectively from April 1, 1999.- The carrying value of revalued assets at April 1, 2004 has been taken as the deemed cost.- The cumulative translation difference on foreign operations at April 1, 2004 is deemed to be zero.- The provisions of IFRS 2 - 'Share based payment' are applied only to awards made after November 7, 2002- Comparative information for IAS 32 - 'Financial Instruments - Disclosure and Presentation' and IAS 39 - 'Financial Instruments - Recognition and Measurement' is not restated for 2004/05. The provisions of the two standards will be adopted from April 1, 2005 and comparative information for 2004/05 in the 2005/06 financial statements will be presented on the existing UK GAAP basis. Appendix 2 Accounting Policies This summary financial information has been prepared using the followingaccounting policies that differ in certain respects from those previouslyapplied under UK GAAP. IFRS 1 requires companies preparing financial statements under IFRS for thefirst time to provide certain reconciliations between financial statementsprepared under the Group's prior reporting under UK GAAP and the figures underIFRS. These reconciliations are attached as Appendix 3. Basis of consolidation The Group accounts include the accounts of the company and its subsidiaryundertakings, each made up to March 31, together with the attributable share ofresults and reserves of associated undertakings, adjusted where appropriate toconform with British Airways' accounting policies. The Group's share of the profits less losses of associated undertakings isincluded in the Group income statement and its share of the post-acquisitionresults of these companies is included in interests in associated undertakingsin the Group balance sheet. Certain associated undertakings make up their annualaudited accounts to dates other than March 31. In the cases of Qantas and Iberiapublished results up to the periods ending June and December are included in theGroup results for the periods ending September and March respectively as it isimpractical to prepare financial statements as of the same date because they arelisted entities. In other cases, results disclosed by subsequent unauditedmanagement accounts are included. The attributable results of those companies acquired or disposed of during theperiod are included for the periods of ownership, except in the case of thedisposal of the Group's interest in Qantas, in which case the results includedcomprise the latest published results prior to the disposal. In addition to those subsidiary undertakings in which the Group controls amajority of the voting rights, the Group also consolidates those entities inwhich it has an interest that gives rise to benefits and risks that are insubstance no different from those that would arise were that entity a subsidiaryundertaking. Therefore in accordance with the requirements of SIC 12, the Groupconsolidates the results of The London Eye Company Limited on this basis. Revenue recognition Passenger ticket and cargo waybill sales, net of discounts, are recorded ascurrent liabilities in the 'sales in advance of carriage' account untilrecognised as revenue when the transportation service is provided. Commissioncosts are recognised at the same time as the revenue to which they relate andare charged to cost of sales. Unused tickets are recognised as revenue usingestimates regarding the timing of recognition based on the terms and conditionsof the ticket and historical trends. Other revenue is recognised at the time theservice is provided. Revenue recognition - mileage programmes The Group operates two principal loyalty programmes. The airline frequent flyerprogramme operates through the airline's 'Executive Club' and allows frequenttravellers to accumulate BA Miles mileage credits which entitle them to a choiceof various awards, primarily free travel. The estimated direct incremental costof providing free redemption services, including British Airways' flights, inexchange for redemption of miles earned by members of the Group's 'ExecutiveClub' is accrued as members of the scheme accumulate mileage. These costs arecharged to cost of sales. In addition, 'BA Miles' are sold to participating partners to use in promotionalactivity. The fair value of the miles sold is deferred and recognised onredemption of the miles by the participants to whom the miles are issued. Thecost of providing free redemption services is recognised when the miles areredeemed. The Group also operates the Airmiles scheme, operated by the company'swholly-owned subsidiary Airmiles Travel Promotions Limited. The scheme allowscompanies to purchase miles for use in their own promotional activities. Milescan be redeemed for a range of benefits, including flights on British Airwaysand other carriers. The fair value of the miles sold is deferred and recognisedon redemption of the miles by the participants to whom the miles are issued. Thecost of providing free redemption services is recognised when the miles areredeemed. Employee benefits Employee benefits, including pensions and other post-retirement benefits(principally post--retirement healthcare benefits) are presented in thesefinancial statements in accordance with IAS 19 - 'Employee Benefits'. For theGroup's defined benefit plans, post-retirement obligations are measured atdiscounted present value whilst plan assets are measured at fair value at thebalance sheet date. The cost of current service costs are recognised in theincome statement so as to spread the cost of providing the benefitsystematically over the service lives of the employees using the projected unitcredit method. Past service costs are recognised over the period they vest. Thefinancing cost and expected return on plan assets are recognised withinfinancing costs in the periods in which they arise. Actuarial gains and lossesare recognised over the remaining average service lives of the employees to theextent that such gains and losses exceed 10 per cent of the greater of thescheme assets or liabilities. Amounts paid to defined contribution post-retirement schemes are recognisedwithin the income statement when the costs are incurred. Intangible assets a Goodwill Where the cost of acquisition exceeds the fair values attributable to the netassets acquired, the resulting goodwill is capitalized. Goodwill is tested forimpairment annually and where indicators exist that the carrying value may notbe recoverable. Prior to the adoption of IFRS, goodwill was amortised over aperiod not exceeding 20 years. Prior to March 31, 1998, goodwill was set offagainst reserves on the acquisition of a business, including an equity interestin an associated undertaking. Under IFRS 1, such goodwill is not recognised ontransition to IFRS nor is the goodwill transferred to the income statement ondisposal of the investment or if the investment becomes impaired. b Landing rights Landing rights acquired from other airlines either directly or as a result of abusiness combination are capitalised at cost (or at fair value if acquiredthrough a business combination) and amortised over a period not exceeding 20years. The carrying value is reviewed for impairment if events or changes incircumstances indicate the carrying value may not be recoverable. Property, plant and equipment Property, plant and equipment are held at cost, subject to the propertyrevaluations carried out at March 31, 1995 which are elected to be the deemedcost under IFRS 1. The Group has a policy of not revaluing property, plant andequipment. Depreciation is calculated to write off the cost, less estimatedresidual value, on a straight line basis. Residual values, where applicable, arereviewed annually against prevailing market values for equivalently aged assetsand depreciation rates adjusted accordingly on a prospective basis. The carryingvalue is reviewed for impairment if events or changes in circumstances indicatethe carrying value may not be recoverable. a Capitalisation of interest on progress payments Interest attributed to progress payments, and related exchange movements onforeign currency amounts, made on account of aircraft and other significantassets under construction is capitalised and added to the cost of the assetconcerned b Fleet All aircraft are stated at cost. Fleet assets owned, or held on finance lease orhire purchase arrangements, are depreciated at rates calculated to write downthe cost to the estimated residual value at the end of their planned operationallives. Cabin interior modifications, including those required for brand changes andre-launches, are depreciated over the lower of five years and the remaining lifeof the aircraft. Aircraft and engine spares acquired on the introduction or expansion of a fleet,as well as rotable spares purchased separately, are carried as tangible fixedassets and generally depreciated in line with the fleet to which they relate. Major overhaul expenditure, including replacement spares and labour costs, iscapitalised and amortised over the average expected life between majoroverhauls. All other replacement spares and other costs relating to maintenanceof fleet assets are charged to the income statement on consumption or asincurred respectively. c Property and equipment Freehold properties and certain leasehold properties, professionally valued atMarch 31, 1995, are included in these accounts on the basis of that valuation asdeemed cost. Subsequent additions are included at cost. Provision is made forthe depreciation of all property and equipment, apart from freehold land, basedupon expected useful lives or in the case of additions to leasehold properties,over the duration of the leases if shorter. d Leased and hire purchase assets Finance leases or hire purchase arrangements which transfer to the Groupsubstantially all the risks and benefits incidental to ownership of the leaseditem, are recognized at the inception of the lease at the fair value of thelease property or, if lower, at the present value of the minimum lease payments.Assets held under finance leases or hire purchase arrangements are depreciatedas described above. Lease payments are apportioned between the finance chargesand the reduction of the lease liability so as to achieve a constant rate ofinterest on the remaining balance of the liability. Finance charges are chargeddirectly against income. Payments under all other lease arrangements, known asoperating leases, are charged to the income statement in equal annual amountsover the period of the lease. In respect of aircraft, operating leasearrangements allow the Group to terminate the leases after a limited initialperiod, normally 5 to 7 years, without material financial obligations. Incertain cases the Group is entitled to extend the initial lease period onpre-determined terms; such leases are described as extendible operating leases. Expendable spares and other inventories Inventories, including aircraft expendables, are valued at the lower of cost andnet realisable value. Cash and cash equivalents Cash and cash equivalents includes cash in hand and deposits repayable on demandor maturing within three months of the balance sheet date with any qualifyingfinancial institution, less any overdrafts repayable on demand. Share-based payment The fair value of employee share option plans is measured at the date of grantof the option using a binomial valuation model. The resulting cost, as adjustedfor the expected and actual level of vesting of the options is charged to incomeover the period in which the options vest. The fair value of options grantedprior to November 2002 are not charged to income. Provisions Provisions are made when an obligation exists for a future liability in respectof a past event and where the amount of the obligation can be reliablyestimated. If the effect of the time value of money is material, provisions aredetermined by discounting the expected future cash flows at a pre-tax rate thatreflects current market assessments of the time value of the money and, whereappropriate, the risks specific to the liability. Where discounting is used, theincrease in the provision due to the passage of time is recognised as aborrowing cost. Foreign currency translation Foreign currency balances are translated into sterling at the rates ruling atthe balance sheet date. Exchange differences arising on the translation offoreign operations are taken to reserves until all or part of the interest issold when the relevant portion of the exchange is recognised in income. UnderIFRS 1 exchange differences arising prior to April 1, 2004 are deemed to bezero. Profits and losses of such undertakings are translated into sterling ataverage rates of exchange during the year. All other profits or losses arisingon translation are dealt with through the income statement. From April 1, 2005 certain loan repayments denominated in US dollars andJapanese yen have been designated as hedges of highly probable future foreigncurrency revenues. The effective element of exchange differences arising fromthe retranslation of these loan repayment instalments are taken to reservesuntil the future revenue occurs when the cumulative exchange difference isrecognised in income. The hedging relationship is tested for effectiveness inaccordance with IAS 39 - 'Financial Instruments: Recognition and Measurement' inaccordance with the policy set out below. Financial Instruments (UK GAAP accounting policy applicable to March 31, 2005) The Group's accounting policy for derivatives is to defer and only recognise inthe Group profit and loss account gains and losses on hedges of revenues oroperating payments as they crystallize. Accounts payable or receivable in respect of interest rate swap agreements arerecognized in the net interest payable charge over the period of the contractson an accruals basis. Cross currency swap agreements and forward foreignexchange contracts taken out to hedge borrowings are brought into account inestablishing the carrying values of the relevant loans, leases or hire purchasearrangements in the balance sheet. Gains or losses on forward foreign exchangecontracts to hedge capital expenditure commitments are recognized as part of thetotal sterling carrying cost of the relevant tangible asset as the contractsmature or are closed out. Short term debtors and creditors are held at fair value. Taxation Full provision is made for deferred tax on all temporary differences relating tothe carrying amount of assets and liabilities where it is probable that recoveryor settlement will result in an obligation to pay more, or a right to pay less,tax in the future. Deferred tax assets in respect of losses and tax credits arerecognised where it is probable that there will be suitable taxable profits fromwhich they can be deducted. Deferred tax is measured at the tax rates that areexpected to apply in the periods in which recovery of assets and settlement ofliabilities are expected to take place, based on tax rates or laws enacted orsubstantively enacted at the balance sheet date. Appendix 3 Quarterly Reconciliations of Income and Equity Appendix 3 Balance Sheet at 01/04/04 IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 Other (a) (b) (c) (d) (e) (f) (g) (h) (i) (j)£M UK IFRSNON-CURRENT ASSETS GAAPPROPERTY, PLANT & EQUIPMENT- Fleet 7,104 - - (34) - 197 - (53) - - - - 7,214- Property 1,042 - - - - 38 - - - - - - 1,080- Equipment 491 - - - - - (12) - - - - - 479 8,637 - - (34) - 235 (12) (53) - - - - 8,773 INTANGIBLE ASSETS- Goodwill 93 - - - - - (22) - - - - - 71- Landing Rights 75 - - - - - 22 - - - - - 97- Other - - - - - - 12 - - - - - 12 168 - - - - - 12 - - - - - 180 Investment in associates 501 - - - - - - - (58) - - - 443Long term investments (trade 30 - - - - - - - - - - - 30investments)Employee benefit assets - 134 - - - - - - - - - - 134Deferred tax receivable - - - - - - - - - - - - -Other financial assets - - - - - - - - - - - 22 22 -TOTAL NON-CURRENT ASSETS 9,336 134 - (34) - 235 - (53) (58) - - 22 9,582 ASSETS HELD FOR SALE - - - - - - - 49 - - - - 49 CURRENT ASSETS AND RECEIVABLES- Expendable spares and other 76 - - - - - - - - - - - 76inventories- Trade receivables and other 2,625 - - - - - - - - - - (985) 1,640debtors- Cash and cash equivalents 64 - - - - - - - - - - 963 1,027 TOTAL CURRENT ASSETS AND 2,765 - - - - - - - - - - (22) 2,743RECEIVABLES TOTAL ASSETS 12,101 134 - (34) - 235 - (4) (58) - - - 12,374 SHAREHOLDERS' FUNDS, MINORITY INTERESTS &LIABILITIES SHAREHOLDERS' EQUITY- Issued share capital 271 - - - - - - - - - - - 271- Treasury shares (31) - - - - - - - - - - - (31)- Other reserves 1,947 (1,187) (167) (27) - 152 (6) (3) (58) - (94) - 557 TOTAL SHAREHOLDERS' EQUITY 2,187 (1,187) (167) (27) - 152 (6) (3) (58) - (94) - 797 Equity minority interest 10 - - - - - - - - - - - 10Non-equity minority interest 200 - - - - - - - - - - - 200 MINORITY INTERESTS 210 - - - - - - - - - - 210 PROVISIONS- Employee benefit - 1,901 - - - - - - - - - - 1,901obligations- Provisions for deferred tax 1,137 (508) (72) (10) - 71 6 (1) - - 94 - 717- Other provisions 85 (45) - - - - - - - - - - 40 1,222 1,348 (72) (10) - 71 6 (1) - - 94 - 2,658 LONG TERM LIABILITIES- Interest bearing long term 5,034 - - - - - - - - - - - 5,034borrowings- Convertible long term 112 - - - - - - - - - - - 112borrowings- Other long term liabilities 340 (9) - - - 12 - - - - - - 343 5,486 (9) - - - 12 - - - - - - 5,489 CURRENT LIABILITIES- Current portion of long 682 - - - - - - - - - - - 682term borrowings - Trade and other payables 2,308 (18) 239 3 - - - - - - - - 2,532 - Current tax payable 6 - - - - - - - - - - - 6- Convertible long term - - - - - - - - - - - -borrowings 2,996 (18) 239 3 - - - - - - - - 3,220 TOTAL SHAREHOLDERS' FUNDS, 12,101 134 - (34) - 235 - (4) (58) - - - 12,374MINORITY INTERESTS &LIABILITIES Memo - Net Assets 2,397 1,007 Appendix 3 Balance Sheet at 30/06/04 IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 Other £M UK (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) GAAP IFRSNON-CURRENT ASSETSPROPERTY, PLANT & EQUIPMENT- Fleet 6,953 - - (28) - 183 - - - - - - 7,108- Property 1,039 - - - - 36 - (1) - - - - 1,074- Equipment 480 - - - - - (12) - - - - - 468 8,472 - - (28) - 219 (12) (1) - - - - 8,650 INTANGIBLE ASSETS- Goodwill 92 - - - - - (20) - - - - - 72- Landing Rights 73 - - - - - 21 - - - - - 94- Other - - - - - - 12 - - - - - 12 165 - - - - - 13 - - - - - 178 Investment in associates 474 - - - - - - - (53) - - - 421Long term investments (trade 30 - - - - - - - - - - - 30investments)Employee benefit assets - 131 - - - - - - - - - - 131Deferred tax receivable - - - - - - - - - - - - -Other financial assets - - - - - - - - - - - 42 42 -TOTAL NON-CURRENT ASSETS 9,141 131 - (28) - 219 1 (1) (53) - - 42 9,452 ASSETS HELD FOR SALE - - - - - - - 1 - - - - 1 CURRENT ASSETS AND RECEIVABLES- Expendable spares and other 73 - - - - - - - - - - - 73inventories- Trade receivables and other 2,739 - - - - - - - - - - (359) 2,380debtors- Cash and cash equivalents 62 - - - - - - - - - - 317 379 TOTAL CURRENT ASSETS AND 2,874 - - - - - - - - - - (42) 2,832RECEIVABLES TOTAL ASSETS 12,015 131 - (28) - 219 1 - (53) - - - 12,285 SHAREHOLDERS' FUNDS, MINORITY INTERESTS &LIABILITIES SHAREHOLDERS' EQUITY- Issued share capital 271 - - - - - - - - - - - 271- Treasury shares (30) - - - - - - - - - - - (30)- Other reserves 1,978 (1,186) (187) (23) 1 146 (5) - (53) - (94) - 577 TOTAL SHAREHOLDERS' EQUITY 2,219 (1,186) (187) (23) 1 146 (5) - (53) - (94) - 818 Equity minority interest 10 - - - - - - - - - - - 10Non-equity minority interest 201 - - - - (1) - - - - - - 200 MINORITY INTERESTS 211 - - - - (1) - - - - - - 210 PROVISIONS- Employee benefit - 1,891 - - - - - - - - - - 1,891obligations- Provisions for deferred tax 1,178 (507) (80) (8) (1) 63 6 - - - 94 - 745- Other provisions 96 (57) - - - - - - - - - - 39 1,274 1,327 (80) (8) (1) 63 6 - - - 94 - 2,675 LONG TERM LIABILITIES- Interest bearing long term 4,758 - - - - - - - - - - - 4,758borrowings- Convertible long term 112 - - - - - - - - - - - 112borrowings- Other long term liabilities 325 (9) - - - 11 - - - - - - 327 5,195 (9) - - - 11 - - - - - - 5,197 CURRENT LIABILITIES- Current portion of long 689 - - - - - - - - - - - 689term borrowings - Trade and other payables 2,419 (1) 267 3 - - - - - - - - 2,688 - Current tax payable 8 - - - - - - - - - - - 8- Convertible long term - - - - - - - - - - - -borrowings 3,116 (1) 267 3 - - - - - - - - 3,385 TOTAL SHAREHOLDERS' FUNDS, 12,015 131 - (28) - 219 1 - (53) - - - 12,285MINORITY INTERESTS &LIABILITIES Memo - Net Assets 2,430 1,028 Appendix 3 Balance Sheet at 30/09/04 IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 Other £M UK (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) GAAP IFRSNON-CURRENT ASSETSPROPERTY, PLANT & EQUIPMENT- Fleet 6,886 - - (36) - 176 - - - - - - 7,026- Property 1,000 - - - - 35 - (1) - - - - 1,034- Equipment 471 - - - - - (50) - - - - - 421 8,357 - - (36) - 211 (50) (1) - - - - 8,481 INTANGIBLE ASSETS- Goodwill 91 - - - - - (19) - - - - - 72- Landing Rights 72 - - - - - 21 - - - - - 93- Other - - - - - - 50 - - - - - 50 163 - - - - - 52 - - - - - 215 Investment in associates 114 - - - - - - - (55) 59 - - 118Long term investments (trade 29 - - - - - - - - - - - 29investments)Employee benefit assets - 128 - - - - - - - - - - 128Deferred tax receivable - - - - - - - - - - - - -Other financial assets - - - - - - - - - - - 39 39 -TOTAL NON-CURRENT ASSETS 8,663 128 - (36) - 211 2 (1) (55) 59 - 39 9,010 ASSETS HELD FOR SALE - - - - - - - 1 - - - - 1 CURRENT ASSETS AND RECEIVABLES- Expendable spares and other 77 - - - - - - - - - - - 77inventories- Trade receivables and other 2,910 (17) - - - - - - - - - (714) 2,179debtors- Cash and cash equivalents 115 - - - - - - - - - - 675 790 TOTAL CURRENT ASSETS AND 3,102 (17) - - - - - - - - - (39) 3,046RECEIVABLES TOTAL ASSETS 11,765 111 - (36) - 211 2 - (55) 59 - - 12,057 SHAREHOLDERS' FUNDS, MINORITY INTERESTS &LIABILITIES SHAREHOLDERS' EQUITY- Issued share capital 271 - - - - - - - - - - - 271- Treasury shares (30) - - - - - - - - - - - (30)- Other reserves 2,167 (1,186) (184) (28) 1 146 (4) - (55) 59 (81) - 835 TOTAL SHAREHOLDERS' EQUITY 2,408 (1,186) (184) (28) 1 146 (4) - (55) 59 (81) - 1,076 Equity minority interest 11 - - - - - - - - - - - 11Non-equity minority interest 206 - - - - (6) - - - - - - 200 MINORITY INTERESTS 217 - - - - (6) - - - - - - 211 PROVISIONS- Employee benefit - 1,839 - - - - - - - - - - 1,839obligations- Provisions for deferred tax 1,244 (506) (79) (11) (1) 60 6 - - - 81 - 794- Other provisions 81 (27) - - - - - - - - - - 54 1,325 1,306 (79) (11) (1) 60 6 - - - 81 - 2,687 LONG TERM LIABILITIES- Interest bearing long term 4,544 - - - - - - - - - - - 4,544borrowings- Convertible long term 112 - - - - - - - - - - - 112borrowings- Other long term liabilities 306 (9) - - - 11 - - - - - - 308 4,962 (9) - - - 11 - - - - - - 4,964 CURRENT LIABILITIES- Current portion of long 540 - - - - - - - - - - - 540term borrowings - Trade and other payables 2,289 - 263 3 - - - - - - - - 2,555 - Current tax payable 24 - - - - - - - - - - - 24- Convertible long term - - - - - - - - - - -borrowings 2,853 - 263 3 - - - - - - - - 3,119 TOTAL SHAREHOLDERS' FUNDS, 11,765 111 - (36) - 211 2 - (55) 59 - - 12,057MINORITY INTERESTS &LIABILITIES Memo - Net Assets 2,625 1,287 Appendix 3 Balance Sheet at 31/12/04 IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 Other £M UK (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) GAAP IFRSNON-CURRENT ASSETSPROPERTY, PLANT & EQUIPMENT- Fleet 6,852 - - (21) - 229 - (4) - - - - 7,056- Property 977 - - - - 45 - (1) - - - - 1,021- Equipment 461 - - - - - (47) - - - - - 414 8,290 - - (21) - 274 (47) (5) - - - - 8,491 INTANGIBLE ASSETS- Goodwill 89 - - - - - (17) - - - - - 72- Landing Rights 84 - - - - - 20 - - - - - 104- Other - - - - - - 47 - - - - - 47 173 - - - - - 50 - - - - - 223 Investment in associates 117 - - - - - 1 - (55) 59 - - 122Long term investments (trade 30 - - - - - - - - - - - 30investments)Employee benefit assets - 125 - - - - - - - - - - 125Deferred tax receivable - - - - - - - - - - - - -Other financial assets - - - - - - - - - - - 44 44 -TOTAL NON-CURRENT ASSETS 8,610 125 - (21) - 274 4 (5) (55) 59 - 44 9,035 ASSETS HELD FOR SALE - - - - - - - 4 - - - - 4 CURRENT ASSETS AND RECEIVABLES- Expendable spares and other 95 - - - - - - - - - - - 95inventories- Trade receivables and other 2,710 (35) - - - - - - - - - (369) 2,306debtors- Cash and cash equivalents 81 - - - - - - - - - - 325 406 TOTAL CURRENT ASSETS AND 2,886 (35) - - - - - - - - - (44) 2,807RECEIVABLES TOTAL ASSETS 11,496 90 - (21) - 274 4 (1) (55) 59 - - 11,846 SHAREHOLDERS' FUNDS, MINORITY INTERESTS &LIABILITIES SHAREHOLDERS' EQUITY- Issued share capital 271 - - - - - - - - - - - 271- Treasury shares (27) - - - - - - - - - - - (27)- Other reserves 2,207 (1,180) (185) (18) 2 187 (2) (1) (55) 59 (82) - 932 TOTAL SHAREHOLDERS' EQUITY 2,451 (1,180) (185) (18) 2 187 (2) (1) (55) 59 (82) - 1,176 Equity minority interest 11 - - - - - - - - - - - 11Non-equity minority interest 212 - - - - (12) - - - - - - 200 MINORITY INTERESTS 223 - - - - (12) - - - - - - 211 PROVISIONS- Employee benefit - 1,828 - - - - - - - - - - 1,828obligations- Provisions for deferred tax 1,264 (504) (80) (6) (2) 85 6 - - - 82 - 845- Other provisions 81 (46) - - - - - - - - - - 35 1,345 1,278 (80) (6) (2) 85 6 - - - 82 - 2,708 LONG TERM LIABILITIES- Interest bearing long term 4,405 - - - - - - - - - - - 4,405borrowings- Convertible long term - - - - - - - - - - - - -borrowings- Other long term liabilities 301 (8) - - - 14 - - - - - - 307 4,706 (8) - - - 14 - - - - - - 4,712 CURRENT LIABILITIES- Current portion of long 491 - - - - - - - - - - - 491term borrowings - Trade and other payables 2,141 - 265 3 - - - - - - - - 2,409 - Current tax payable 27 - - - - - - - - - - - 27- Convertible long term 112 - - - - - - - - - - 112borrowings 2,771 - 265 3 - - - - - - - - 3,039 TOTAL SHAREHOLDERS' FUNDS, 11,496 90 - (21) - 274 4 (1) (55) 59 - - 11,846MINORITY INTERESTS &LIABILITIES Memo - Net Assets 2,674 1,387 Appendix 3 Balance Sheet at 31/03/05 IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 Other £M UK (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) GAAP IFRSNON-CURRENT ASSETSPROPERTY, PLANT & EQUIPMENT- Fleet 6,748 - - (6) - 207 - (5) - - - - 6,944- Property 959 - - - - 42 - (1) - - - - 1,000- Equipment 445 - - - - - (60) - - - - - 385 8,152 - - (6) - 249 (60) (6) - - - - 8,329 INTANGIBLE ASSETS- Goodwill 88 - - - - - (16) - - - - - 72- Landing Rights 102 - - - - - 20 - - - - - 122- Other - - - - - - 60 - - - - - 60 190 - - - - - 64 - - - - - 254 Investment in associates 120 - - - - - 1 - (54) 59 - - 126Long term investments (trade 30 - - - - - - - - - - - 30investments)Employee benefit assets - 137 - - - - - - - - - - 137Deferred tax receivable - - - - - - - - - - - - -Other financial assets - - - - - - - - - - - 38 38 -TOTAL NON-CURRENT ASSETS 8,492 137 - (6) - 249 5 (6) (54) 59 - 38 8,914 ASSETS HELD FOR SALE - - - - - - - 5 - - - - 5 CURRENT ASSETS AND RECEIVABLES- Expendable spares and other 84 - - - - - - - - - - - 84inventories- Trade receivables and other 2,683 (54) - - - - - - - - - (509) 2,120debtors- Cash and cash equivalents 77 - - - - - - - - - - 471 548 TOTAL CURRENT ASSETS AND 2,844 (54) - - - - - - - - - (38) 2,752RECEIVABLES TOTAL ASSETS 11,336 83 - (6) - 249 5 (1) (54) 59 - - 11,671 SHAREHOLDERS' FUNDS, MINORITY INTERESTS &LIABILITIES SHAREHOLDERS' EQUITY- Issued share capital 271 - - - - - - - - - - - 271- Treasury shares (26) - - - - - - - - - - - (26)- Other reserves 2,220 (1,177) (189) (7) 2 168 (1) (1) (54) 59 (80) - 940 TOTAL SHAREHOLDERS' EQUITY 2,465 (1,177) (189) (7) 2 168 (1) (1) (54) 59 (80) - 1,185 Equity minority interest 12 - - - - - - - - - - - 12Non-equity minority interest 207 - - - - (7) - - - - - - 200 MINORITY INTERESTS 219 - - - - (7) - - - - - - 212 PROVISIONS- Employee benefit - 1,820 - - - - - - - - - - 1,820obligations- Provisions for deferred tax 1,243 (503) (81) (2) (2) 75 6 - - - 80 - 816- Other provisions 83 (49) - - - - - - - - - - 34 1,326 1,268 (81) (2) (2) 75 6 - - - 80 - 2,670 LONG TERM LIABILITIES- Interest bearing long term 4,045 - - - - - - - - - - - 4,045borrowings- Convertible long term - - - - - - - - - - - - -borrowings- Other long term liabilities 301 (8) - - - 13 - - - - - - 306 4,346 (8) - - - 13 - - - - - - 4,351 CURRENT LIABILITIES- Current portion of long 447 - - - - - - - - - - - 447term borrowings - Trade and other payables 2,385 - 270 3 - - - - - - - - 2,658 - Current tax payable 36 - - - - - - - - - - - 36- Convertible long term 112 - - - - - - - - - - 112borrowings 2,980 - 270 3 - - - - - - - - 3,253 TOTAL SHAREHOLDERS' FUNDS, 11,336 83 - (6) - 249 5 (1) (54) 59 - - 11,671MINORITY INTERESTS &LIABILITIES Memo - Net Assets 2,684 1,397 Appendix 3 Quarter 1 2004/05 Income Statement £m IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 UK GAAP (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) IFRSTOTAL TRAFFIC REVENUE- Passenger 1,625 - - - - - - - - - - 1,625- Cargo 118 - - - - - - - - - - 118 OTHER REVENUE 182 - (23) - - - - - - - - 159 TOTAL TURNOVER 1,925 - (23) - - - - - - - - 1,902 Employee costs 551 (12) - - 2 - - - - - - 541Depreciation and amortisation 165 - - 11 - 3 (1) - - - - 178Aircraft Leasing 26 - - - - - - - - - - 26Fuel Cost 258 - - - - - - - - - - 258Fuel Derivative Gains / (Losses) - - - - - - - - - - - -Engineering and other aircraft 112 - - (16) - - - - - - - 96costsLanding Fees and en route charges 141 - - - - - - - - - - 141Handling charges, catering and 233 - - - - - - - - - - 233other operating costsSelling costs 133 - 5 - - - - - - - - 138Currency differences - - - - (4) - - - - - (4)Accommodation and ground 156 - - - - 10 - - - - - 166equipment TOTAL OPERATING EXPENDITURE 1,775 (12) 5 (5) 2 9 (1) - - - - 1,773 Interest expense (66) - - - - - - - - - - (66)Interest income 18 18Other financing income and - (11) - - - - - - - - - (11)chargesRetranslation credits and charges 23 - - - - (11) - - - - - 12on borrowingsShare of Profit of Associates (4) - - - - - - - - - - (4)Profit or Loss on Disposal (6) - - - - - - 3 - - - (3)Income and charges relating to - - - - - - - - - - - -fixed asset investments PROFIT BEFORE TAX 115 1 (28) 5 (2) (20) 1 3 - - - 75 Taxation (42) - 8 (2) 1 4 - (1) - - - (32) PROFIT FOR THE PERIOD 73 1 (20) 3 (1) (16) 1 2 - - - 43 Attributable to shareholders 70 1 (20) 3 (1) (16) 1 2 - - - 40Attributable to minority 3 - - - - - - - - - - 3interests MemoOPERATING PROFIT 150 12 (28) 5 (2) (9) 1 - - - - 129 Operating Margin 7.8% 6.8% EPS (basic) 6.5 3.7 EPS (diluted) 6.4 3.7 Appendix 3 Quarter 2 2004/05 Income Statement £m IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 UK GAAP (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) IFRSTOTAL TRAFFIC REVENUE- Passenger 1,705 - - - - - - - - - - 1,705- Cargo 118 - - - - - - - - - - 118 OTHER REVENUE 203 - 12 - - - - - - - - 215 TOTAL TURNOVER 2,026 - 12 - - - - - - - - 2,038 Employee costs 561 (13) - - 2 - - - - - - 550Depreciation and amortisation 168 - - 11 - 3 (1) - - - - 181Aircraft Leasing 27 - - - - - - - - - - 27Fuel Cost 271 - - - - - - - - - - 271Fuel Derivative Gains / (Losses) - - - - - - - - - - - -Engineering and other aircraft 118 - - (3) - - - - - - - 115costsLanding Fees and en route charges 145 - - - - - - - - - - 145Handling charges, catering and 238 - (1) - - - - - - - - 237other operating costsSelling costs 126 - 9 - - - - - - - - 135Currency differences - - - - - (8) - - - - - (8)Accommodation and ground 132 - - - - 8 - - - - - 140equipment TOTAL OPERATING EXPENDITURE 1,786 (13) 8 8 2 3 (1) - - - - 1,793 Interest expense (73) - - - - - - - 5 - - (68)Interest income 22 - - - - - - - - - - 22Other financing income and - (11) - - - - - - - - - (11)chargesRetranslation credits and charges 4 - - - - (5) - - - - - (1)on borrowingsShare of Profit of Associates 34 - - - - - - - (13) - - 21Profit or Loss on Disposal (8) - - - - - - - (5) 97 - 84Income and charges relating to 1 - - - - - - - - - - 1fixed asset investments PROFIT BEFORE TAX 220 2 4 (8) (2) (8) 1 - (13) 97 - 293 Taxation (93) (1) (1) 2 - 1 - - 11 - 13 (68) PROFIT FOR THE PERIOD 127 1 3 (6) (2) (7) 1 - (2) 97 13 225 Attributable to shareholders 123 1 3 (6) (2) (7) 1 - (2) 97 13 221Attributable to minority 4 - - - - - - - - - - 4interests MemoOPERATING PROFIT 240 13 4 (8) (2) (3) 1 - - - - 245 Operating Margin 11.8% 12.0% EPS (basic) 11.5 20.6 EPS (diluted) 11.2 19.9 Appendix 3 Quarter 3 2004/05 Income Statement £m IAS 19 IAS 18 IAS 16 IFRS 2 IAS 21 IFRS 3 IFRS 5 IAS 28 IFRS 1 IAS 12 UK GAAP (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) IFRSTOTAL TRAFFIC REVENUE- Passenger 1,613 - - - - - - - - - - 1,613- Cargo 134 - - - - - - - - - - 134 OTHER REVENUE 226 - (16) - - - - - - - - 210 TOTAL TURNOVER 1,973 - (16) - - - - - - - - 1,957 Employee costs 553 (23) - - 2 - - - - - - 532Depreciation and amortisation 167 - - 11 - 5 (1) 1 - - - 183Aircraft Leasing 28 - - - - - - - - - - 28Fuel Cost 330 - - - - - - - - - - 330Fuel Derivative Gains / (Losses) - - - - - - - - - - - -Engineering and other aircraft 123 - - (25) - - - - - - - 98costsLanding Fees and en route charges 140 - - - - - - - - - - 140Handling charges, catering and 232 - (1) - - - - - - - - 231other operating costsSelling costs 115 - (13) - - - - - - - - 102Currency differences - 3 - - - 25 - - - - - 28Accommodation and ground 175 - - - - (26) - - - - - 149equipment TOTAL OPERATING EXPENDITURE 1,863 (20) (14) (14) 2 4 (1) 1 - - - 1,821 Interest expense (58) - - - - - - - - - - (58)Interest income 15 - - - - - - - - - - 15Other financing income and 8 (11) - - - - - - - - - (3)chargesRetranslation credits and charges (1) - - - - 60 - - - - - 59on borrowingsShare of Profit of Associates - - - - - - 1 - - - - 1Profit or Loss on Disposal 1 - - - - - - - - - - 1Income and charges relating to - - - - - - - - - - - -fixed asset investments PROFIT BEFORE TAX 75 9 (2) 14 (2) 56 2 (1) - - - 151 Taxation (23) (3) 1 (4) 1 (4) - - - - (1) (33) PROFIT FOR THE PERIOD 52 6 (1) 10 (1) 52 2 (1) - - (1) 118 Attributable to shareholders 49 6 (1) 10 (1) 52 2 (1) - - (1) 115Attributable to minority 3 - - - - - - - - - - 3interests MemoOPERATING PROFIT 110 20 (2) 14 (2) (4) 1 (1) - - - 136 Operating Margin 5.6% 6.9% EPS (basic) 4.6 10.7 EPS (diluted) 4.6 10.4Related Shares:
International Airlines