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Financial Statements
11. Discontinued operations
During the year, our wireless infrastructure operations in the UK and US and Australian interconnector were reclassified as businesses held for sale in the expectation that they will be disposed of during the year ending 31 March 2008. The wireless infrastructure business in the UK was sold on 3 April 2007. During the year ended 31 March 2006 holdings in four of the eight UK gas distribution networks were disposed of. During August 2004, the Argentinian joint venture, Citelec was disposed of.
Results of discontinued operations
| 2007 £m |
2006 £m |
2005 £m |
|
|---|---|---|---|
| Revenues | 383 | 493 | 1,313 |
| Operating costs | (321) | (382) | (848) |
| Operating profit before exceptional items | 117 | 131 | 552 |
| Exceptional items (i) | (55) | (20) | (87) |
| Total operating profit from discontinued operations | 62 | 111 | 465 |
| Net finance costs before remeasurement finance income | (2) | (4) | (2) |
| Remeasurement finance income (ii) | 37 | - | - |
| Share of post-tax results of joint venture | - | - | (5) |
| Profit before tax from discontinued operations | 97 | 107 | 458 |
| Taxation | (11) | (45) | (153) |
| Profit after tax from discontinued operations | 86 | 62 | 305 |
| Gain on disposal of gas distribution networks | - | 2,636 | - |
| Gain on disposal of joint venture | - | - | 13 |
| Gain on disposal of discontinued operations before tax | - | 2,636 | 13 |
| Taxation | - | (31) | - |
| Gain on disposal of discontinued operations | - | (2,605) | 13 |
| Total profit for the year from discontinued operations | |||
| Before exceptional items and remeasurements | 104 | 77 | 379 |
| Exceptional items and remeasurements | (18) | 2,590 | (61) |
| 86 | 2,667 | 318 |
(i) The operating exceptional item for the year ended 31 March 2007 related to an impairment of goodwill within US wireless infrastructure operations. Operating exceptional items for the year ended 31 March 2006 related to a fine (£15m) incurred in respect of a breach of health and safety laws in 1999 and to restructuring costs (£5m). Operating exceptional items for the year ended 31 March 2005 related to restructuring costs (£83m) and to environmental costs (£4m).
(ii) Remeasurement finance income for the year ended 31 March 2007 comprised £24m relating to the recognition of gains on the termination of a hedging arrangement and to £13m of subsequent mark-to-market gains.
The following assets and liabilities relate to businesses held for sale at 31 March 2007. There were no businesses held for sale at 31 March 2006.
| 2007 £m |
|
|---|---|
| Non-current assets | |
| Goodwill | 573 |
| Other intangible assets | 206 |
| Property, plant and equipment | 1,003 |
| Other receivables | 9 |
| Non-current assets | 1,791 |
| Current assets | |
| Inventories | 3 |
| Derivative financial assets | 39 |
| Trade and other receivables | 112 |
| Cash and cash equivalents | 23 |
| Current assets | 177 |
| Assets of businesses held for sale | 1,968 |
| Current liabilities | |
| Trade and other payables | (198) |
| Current tax liabilities | (1) |
| Provisions | (1) |
| Total current liabilities | (200) |
| Non-current liabilities | |
| Borrowings | (20) |
| Other non-current liabilities | (78) |
| Deferred tax liabilities | (124) |
| Pensions and post-retirement obligations | (2) |
| Provisions | (26) |
| Non-current liabilities | (250) |
| Liabilities of businesses held for sale | (450) |