Notes to the consolidated financial statements
8. Discontinued operations
Discontinued operations are businesses that have been sold, or which are held for sale. Discontinued operations comprise the Ravenswood generation station in New York City and the engineering and communications operations in the US acquired as part of the KeySpan acquisition. The Ravenswood generation station was sold on 26 August 2008, KeySpan Communications was sold on 25 July 2008 and one of our KeySpan engineering companies was sold on 11 July 2008. Subsequent to the year end two further engineering companies were sold.
For comparative periods, discontinued operations also include our former wireless infrastructure operations in the UK and US, and the Basslink electricity interconnector in Australia. The wireless infrastructure operations in the UK and US were sold on 3 April 2007 and 15 August 2007 respectively, while the Basslink electricity interconnector business was sold on 31 August 2007.
Results of discontinued operations
| 2009 £m |
2008 £m |
2007 £m |
|
|---|---|---|---|
| Revenue | 97 | 201 | 383 |
| Operating costs | (84) | (166) | (321) |
| Operating profit before exceptional items, remeasurements and stranded cost recoveries | 13 | 35 | 117 |
| Exceptional items (i) | – | – | (55) |
| Total operating profit from discontinued operations | 13 | 35 | 62 |
| Net finance costs before remeasurement finance income | – | – | (2) |
| Remeasurement finance income (ii) | – | 8 | 37 |
| Profit before tax from discontinued operations | 13 | 43 | 97 |
| Taxation | (4) | (7) | (11) |
| Profit after tax from discontinued operations | 9 | 36 | 86 |
| Gain on disposal of Ravenswood | 27 | – | – |
| Gain on disposal of UK and US wireless operations | – | 1,506 | – |
| Gain on disposal of Basslink | – | 80 | – |
| Gain on disposal of discontinued operations before tax | 27 | 1,586 | – |
| Taxation (iii) | (11) | (4) | – |
| Gain on disposal of discontinued operations | 16 | 1,582 | – |
Total profit for the year from discontinued operations |
|||
| Before exceptional items, remeasurements and stranded cost recoveries | 9 | 28 | 104 |
| Exceptional items, remeasurements and stranded cost recoveries | 16 | 1,590 | (18) |
| 25 | 1,618 | 86 | |
- (i)
- The exceptional item for the year ended 31 March 2007 reflects an impairment of goodwill within the US wireless infrastructure operations.
- (ii)
- Remeasurement finance income for the year ended 31 March 2008 comprised £8m of mark-to-market gains on financial instruments (2007: £13m) and for the year ended 31 March 2007 an additional £24m relating to the recognition of gains on the termination of a hedging arrangement.
- (iii)
- The tax charge for the year ended 31 March 2009 includes a current tax charge of £564m offset by a deferred tax credit of £564m.