3rd Quarter Results
British Airways PLC
10 February 2003
THIRD QUARTER RESULTS 2002-2003 (unaudited)
Three months ended Nine months ended
December 31 Better/ December 31 Better/
2002 2001 (Worse) 2002 2001 (Worse)
Turnover £m 1,857 1,839 1.0% 6,013 6,387 (5.9)%
Operating profit/(loss) £m 53 (187) nm 459 (65) nm
Operating margin % 2.9 (10.2) 13.1pts 7.6 (1.0) 8.6pts
Profit/(loss) before tax £m 25 (160) nm 335 (115) nm
Retained profit/(loss) for the £m 13 (144) nm 205 (99) nm
period
Net assets at period end £m 2,385 2,222 7.3% 2,385 2,222 7.3%
Earnings per share
Basic p 1.2 (13.4) nm 19.1 (9.2) nm
Diluted p 1.2 (13.4) nm 18.8 (9.2) nm
nm: Not meaningful
GROUP PROFIT AND LOSS ACCOUNT (unaudited)
Three months ended Nine months ended
December 31 Better/ December 31 Better/
2002 £m 2001 £m (Worse) 2002 £m 2001 £m (Worse)
Traffic Revenue
Scheduled Passenger 1,566 1,533 2.2% 5,122 5,383 (4.8)%
Scheduled Cargo 128 121 5.8% 373 363 2.8%
Non-scheduled services 8 8 39 43 (9.3)%
1,702 1,662 2.4% 5,534 5,789 (4.4)%
Other revenue 155 177 (12.4)% 479 598 (19.9)%
TOTAL TURNOVER 1,857 1,839 1.0% 6,013 6,387 (5.9)%
Employee costs 533 561 5.0% 1,576 1,781 11.5%
Depreciation and amortisation 166 221 24.9% 496 599 17.2%
Aircraft operating lease costs 43 46 6.5% 126 147 14.3%
Fuel and oil costs 223 265 15.8% 636 842 24.5%
Engineering and other aircraft
costs 136 161 15.5% 418 476 12.2%
Landing fees and en route charges 142 150 5.3% 451 478 5.6%
Handling charges, catering and
other operating costs 235 243 3.3% 737 845 12.8%
Selling costs 167 161 (3.7)% 579 630 8.1%
Accommodation, ground equipment
costs and currency differences 159 218 27.1% 535 654 18.2%
TOTAL OPERATING EXPENDITURE 1,804 2,026 11.0% 5,554 6,452 13.9%
OPERATING PROFIT/(LOSS) 53 (187) nm 459 (65) nm
Share of operating profits/
(losses) in associates (4) 6 4 50.0%
TOTAL OPERATING PROFIT/(LOSS)
INCLUDING ASSOCIATES 53 (191) nm 465 (61) nm
Other income 7 1 nm 7 1 nm
Profit on sale of fixed assets and
investments 20 34 (41.2)% 48 135 (64.4)%
Interest
Net payable (58) (89) 34.8% (195) (252) 22.6%
Retranslation credits 3 85 (96.5)% 10 62 (83.9)%
on currency borrowings
PROFIT/(LOSS) BEFORE TAX 25 (160) nm 335 (115) nm
Tax (8) 18 nm (120) 25 nm
PROFIT/(LOSS) AFTER TAX 17 (142) nm 215 (90) nm
Non equity minority interest* (4) (2) (100.0)% (10) (9) (11.1)%
PROFIT/(LOSS) FOR THE PERIOD 13 (144) nm 205 (99) nm
Dividends paid and proposed
RETAINED PROFIT/(LOSS) FOR THE 13 (144) nm 205 (99) nm
PERIOD
nm: Not meaningful
* Cumulative Preferred Securities
OPERATING AND FINANCIAL STATISTICS (unaudited)
Three months ended Nine months ended
December 31 Increase/ December 31 Increase/
2002 2001 (Decrease) 2002 2001 (Decrease)
TOTAL AIRLINE OPERATIONS (Note 1)
TRAFFIC AND CAPACITY
RPK (m) 24,693 23,106 6.9% 76,673 81,049 (5.4)%
ASK (m) 34,815 35,449 (1.8)% 105,443 116,058 (9.1)%
Passenger load factor(%) 70.9 65.2 5.7pts 72.7 69.8 2.9pts
CTK (m) 1,112 998 11.4% 3,217 3,028 6.2%
RTK (m) 3,582 3,341 7.2% 10,875 11,124 (2.2)%
ATK (m) 5,348 5,436 (1.6)% 16,163 17,529 (7.8)%
Overall load factor (%) 67.0 61.5 5.5pts 67.3 63.5 3.8pts
Passengers carried (000) 9,200 8,574 7.3% 29,472 31,173 (5.5)%
Tonnes of cargo carried (000) 202 183 10.4% 583 570 2.3%
FINANCIAL
Passenger revenue per RPK (p) 6.37 6.67 (4.5)% 6.73 6.69 0.6%
Passenger revenue per ASK (p) 4.52 4.35 3.9% 4.89 4.68 4.5%
Cargo revenue per CTK(p) 11.51 12.12 (5.0)% 11.59 11.99 (3.3)%
Total traffic revenue per RTK (p) 47.52 49.75 (4.5)% 50.89 52.04 (2.2)%
Total traffic revenue per ATK (p) 31.82 30.57 4.1% 34.24 33.03 3.7%
Average fuel price before hedging (US 87.63 78.24 12.0% 81.50 84.97 (4.1)%
cents/US gallon)
OPERATIONS
Average Manpower Equivalent (MPE) 51,171 55,758 (8.2)% 52,071 58,492 (11.0)%
ATKs per MPE (000) 104.5 97.5 7.2% 310.4 299.7 3.6%
Aircraft in service at period end 348 367 (19) 348 367 (19)
TOTAL GROUP OPERATIONS
FINANCIAL
Net operating expenditure 46.04 55.34 (16.8)% 46.67 52.62 (11.3)%
per RTK (p)
Net operating expenditure 30.83 34.01 (9.4)% 31.40 33.40 (6.0)%
per ATK (p)
Note 1 Excludes non airline activity companies, principally, Airmiles Travel
Promotions Ltd, BA Holidays Ltd,
BA Travel Shops Ltd, Speedbird Insurance Company Ltd and The London Eye Company
Ltd.
CHAIRMAN'S STATEMENT
Group Performance
Group profit before tax for the three months to December 31 was £25 million;
this compares with a loss of £160 million last year. Operating profit - - at £53
million - - was £240 million better than last year. The operating margin of 2.9%
was 13.1 points better than last year.
The improvement in operating profit reflects significant cost reduction
initiatives, improved contribution from the cargo business, and the impact of
the Future Size and Shape programme which continues on track. Revenue also
improved but against a prior year base severely depressed by the after-effects
of September 11th.
Group profit before tax for the nine months to December 31 was £335 million,
£450 million better than last year; operating profit - - at £459 million - - was
up £524 million on the same period a year ago.
Cash inflow before financing was £1,099 million for the nine months, with the
record closing cash balance of £1,756 million representing a £537 million
increase versus March 31. Net debt fell by £1,108 million from March 31 to
£5,186 million - - its lowest level since September 30, 1998 - - and is down
£1.4 billion from the December 2001 peak.
Turnover
For the three month period, Group turnover - - at £1,857 million - - was up 1.0%
on a flying programme 1.6% smaller in ATKs. Passenger yields were down 4.5% per
RPK; seat factor was up 5.7 points at 70.9% on capacity 1.8% lower in ASKs.
For the nine month period, turnover declined by 5.9% to £6,013 million on a
flying programme 7.8% smaller in ATKs. Passenger yields were up 0.6% per RPK
with seat factor up 2.9 points at 72.7% on capacity 9.1% lower in ASKs.
Cargo volumes for the quarter (CTKs) were up 11.4% compared with last year, with
yields (revenue/CTK) down 5.0%. For the nine month period, cargo volumes were up
6.2%, with yields down 3.3%.
Overall load factor for the quarter was up 5.5 points at 67.0%, and for the nine
months up 3.8 points at 67.3%.
Costs
For the quarter, unit costs (pence/ATK) improved by 9.4% on the same period last
year. This reflects a net cost reduction of 10.8% on capacity 1.6% lower in
ATKs.
Significant reductions were achieved in almost all categories of operating cost,
including manpower costs down 5.0%, fuel costs down 15.8%, engineering and other
aircraft costs down 15.5%, landing fees and en route charges down 5.3%,
accommodation and other costs down 27.1% (mainly due to contractor and IM cost
savings together with a lower level of bad debt provisions) and other operating
costs down 3.3%.
For the nine months, unit costs (pence/ATK) improved by 6.0% on the same period
last year. This reflects a net cost reduction of 13.3% on capacity 7.8% lower in
ATKs.
Non Operating Items
Reductions of £31 million in net interest payable were more than offset by an
£82 million reduction in the credit due to the revaluation of yen debt (used to
fund aircraft acquisitions). The quarterly revaluation credit - - a non-cash
item required by standard accounting practice - - results from the movement of
sterling against the yen.
Profits on disposals of fixed assets and investments for the quarter were £20
million, including the disposal of our investment in Concorde International
Travel, the Australian travel company and a further £3 million part deemed
disposal of our share in Qantas. The part deemed disposal related to the
dilution of our holding as a result of our non-participation in Qantas' dividend
reinvestment plan and rights issue together with their employee share option
plan.
For the nine month period net interest expense was £185 million, down £5 million
on last year. Profits on disposal were £48 million, down £87 million from last
year when go was sold at a profit of £98 million.
Earnings Per Share
The profit attributable to shareholders for the three months was equivalent to
1.2 pence per share, compared with last year's loss per share of 13.4 pence.
For the nine month period, the profit attributable to shareholders was £205
million, equivalent to 19.1 pence per share, compared with last year's loss per
share of 9.2 pence.
Net Debt / Total Capital Ratio
Borrowings, net of cash and short term loans and deposits, were £5,186 million
at December 31 - - down £1.4 billion from the December 2001 peak and down £1,108
million since the start of the year (£376 million of debt repayment, £560
million increase in cash and exchange benefits of £172 million). The net debt/
total capital ratio reduced by 6.4 points from March 2002 to 59.6%.
During the nine months we generated a positive cashflow from operations of
£1,053 million. After disposal proceeds, capital expenditure, dividends
received, and interest payments on our existing debt, cash inflow was £1,099
million. This represents an £877 million improvement on last year, primarily due
to the improvement in operating cashflow (£395 million), disposal proceeds net
of capital expenditure (£284 million) and no dividend payment (£137 million).
Aircraft Fleet
During the quarter the Group fleet in service reduced by one to 348 aircraft.
Disposals comprised two Boeing 757-200s and one de Havilland Canada DHC-8
aircraft returned to lessor and one Boeing 737-400 sale. In addition, two Boeing
737-300s and one Boeing 737-400 were stood down pending disposal. The reductions
were partially offset by the deliveries of six Airbus A320 aircraft.
Future Size and Shape
Capital spend for the year is now forecast at around £400 million, some £50
million lower than target. Disposal proceeds at December 31 were £570 million
(including £218 million in 2001/02), £70 million more than the £500 million
target.
The Group manpower reduction since August 2001 totals 10,892 including 1,397
relating to the disposal of World Network Services. This represents a reduction
of 9,209 against the FSAS target of 10,000, and we are on track to deliver the
balance by March 31.
In April 2003 British Airways is to begin flying from London City Airport for
the first time as it takes further steps towards simplifying and strengthening
its UK regional operation. British Airways CitiExpress will operate the three
new routes to Frankfurt, Glasgow and Paris Charles de Gaulle. British Airways
CitiExpress has also signed a heads of terms with Eastern Airways with the
intention of transferring the 12 strong fleet of 29-seater Jetstream 41s and its
associated engineering hangar at Glasgow to the Humberside-based airline. This
will be the first part of an accelerated strategy to move to an all-jet regional
operation and is likely to result in a restructuring charge of approximately £20
million, included in our existing forecast of FSAS restructuring costs.
Associates
As a result of our non-participation in Qantas' dividend reinvestment plan and
rights issue, together with their employee share option plan our holding reduced
from 19.49% to 18.93%.
Alliance Development
During the three months, American Airlines and British Airways concluded a
codeshare agreement covering points behind and beyond their gateways. This would
place the British Airways code on selected American Airlines flights in North
America and the American Airlines code on selected British Airways flights in
the UK, Europe and elsewhere where appropriate. We are still awaiting the
outcome of our application for approval filed with the US Department of
Transport.
British Airways and Iberia have begun parallel codesharing on the trunk routes
from Heathrow to Madrid and Barcelona. The SN Brussels Airline code is now
carried on all British Airways flights between Gatwick, Heathrow and Brussels as
well as on British Airways CitiExpress services between Birmingham and Brussels.
SN Brussels Airline no longer operate the Heathrow - Brussels route in their own
right following the sale of seven slot pairs to British Airways.
Outlook
In the absence of hostilities in the Middle East we expect this financial year
to be profitable.
We expect the business environment to be tougher in 2003 than last year.
Forecasting revenue against the backdrop of the threat of war, increasing
competitive pressure and an uncertain economic outlook is difficult, but at this
stage we anticipate no revenue growth over the next 12 months.
Our focus remains on managing our controllable costs. The implementation of our
Future Size and Shape programme is on track and delivering more than the
expected cost savings.
Business restructuring, in particular cost cutting and cash conservation have
left the company well positioned for the uncertain markets that lie ahead.
Certain information included in these statements is forward-looking and involves
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by the forward looking statements.
Forward-looking statements include, without limitation, projections relating to
results of operations and financial conditions and the Company's plans and
objectives for future operations, including, without limitation, discussions of
the Company's 'Future Size and Shape' programme, expected future revenues,
financing plans and expected expenditures and divestments. All forward-looking
statements in this report are based upon information known to the Company on the
date of this report. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new information,
future events or otherwise.
It is not reasonably possible to itemize all of the many factors and specific
events that could cause the Company's forward looking statements to be incorrect
or that could otherwise have a material adverse effect on the future operations
or results of an airline operating in the global economy. Information on some
factors which could result in material difference to the results is available in
the Company's SEC filings, including, without limitation the Company's Report on
Form 20-F for the year ended March 2002.
GROUP BALANCE SHEET (unaudited)
December 31 March 31
2002 £m 2001 £m 2002 £m
FIXED ASSETS
Intangible assets 166 140 140
Tangible assets 9,685 10,713 10,474
Investments 506 463 489
10,357 11,316 11,103
CURRENT ASSETS
Stocks 102 163 109
Debtors 986 1,058 1,231
Cash, short-term loans and deposits 1,756 1,224 1,219
2,844 2,445 2,559
CREDITORS: AMOUNTS FALLING DUE (2,892) (3,222) (3,201)
WITHIN ONE YEAR
NET CURRENT LIABILITIES (48) (777) (642)
TOTAL ASSETS LESS CURRENT LIABILITIES 10,309 10,539 10,461
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
Borrowings and other creditors (6,589) (7,069) (6,985)
Convertible Capital Bonds 2005 (112) (112) (112)
(6,701) (7,181) (7,097)
PROVISION FOR DEFERRED TAX (1,135) (1,083) (1,031)
PROVISIONS FOR LIABILITIES AND CHARGES (88) (53) (126)
2,385 2,222 2,207
CAPITAL AND RESERVES
Called up share capital 271 271 271
Reserves 1,911 1,761 1,745
MINORITY INTEREST 2,182 2,032 2,016
Minority interest 9 8 9
Non equity minority interest 194 182 182
203 190 191
2,385 2,222 2,207
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
Nine months ended Year ended
December 31 March 31
2002 £m 2001 £m 2002 £m
Profit/(loss) for the period 205 (99) (142)
Other recognised gains and losses
relating to the period
Exchange and other movements (39) 10 17
Total recognised gains and losses 166 (89) (125)
These summary financial statements were approved by the Directors on February
10, 2003.
GROUP CASH FLOW STATEMENT (unaudited)
Nine months ended Year ended
December 31 March 31
2002 £m 2001 £m 2002 £m
CASH INFLOW FROM OPERATING ACTIVITIES 1,053 658 866
DIVIDENDS RECEIVED FROM ASSOCIATES 22 15 16
GOVERNMENT COMPENSATION RECEIVED 22
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (178) (240) (327)
TAX (8) (1)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 178 (55) 94
ACQUISITIONS AND DISPOSALS 32 (19) (19)
EQUITY DIVIDENDS PAID (137) (137)
Cash inflow before management of liquid 1,099 222 514
resources and financing
MANAGEMENT OF LIQUID RESOURCES (556) (301) (301)
FINANCING (539) 81 (217)
Increase/(decrease) in cash in the period 4 2 (4)
NOTES TO THE ACCOUNTS
For the period ended December 31, 2002
1 ACCOUNTING CONVENTION
The accounts have been prepared on the basis of the accounting policies set out in the Report and Accounts for the
year ended March 31, 2002 in accordance with all applicable United Kingdom accounting standards and the Companies
Act 1985 and are consistent with those applied in the previous year. Due to the increasing incidence of the
purchase of airport landing rights, these have been reclassified from tangible fixed assets to intangible fixed
assets and the comparative figures restated accordingly.
Nine months ended Year ended
December 31 March 31
2002 £m 2001 £m 2002 £m
2 RECONCILIATION OF OPERATING PROFIT
TO CASH INFLOW FROM
OPERATING ACTIVITIES
Group operating profit/(loss) 459 (65) (110)
Depreciation and amortisation 496 599 770
Decrease in stocks and debtors 233 355 250
Decrease in creditors (97) (214) (89)
(Decrease)/increase in provisions (38) (17) 45
for liabilities and charges
Cash inflow from operating activities 1,053 658 866
3 RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET DEBT
Increase/(decrease) in cash during the 4 2 (4)
period
Net cash outflow/(inflow) from 539 (81) 217
decrease in debt and lease financing
Cash outflow from liquid resources 556 301 301
Change in net debt resulting from cash 1,099 222 514
flows
New finance leases taken out and (163) (526) (512)
hire purchase arrangements made
Assumed from subsidiary undertakings (117) (117)
acquired during the period
Conversion of Convertible Capital 1 1
Bonds
Exchange movements 172 81 43
Movement in net debt during the 1,108 (339) (71)
period
Net debt at April 1 (6,294) (6,223) (6,223)
Net debt at period end (5,186) (6,562) (6,294)
Three months ended Nine months ended
December 31 December 31
2002 £m 2001 £m 2002 £m 2001 £m
4 OTHER INCOME
Income from trade 7 1 7 1
investments
Other 7 1 7 1
Other income represented by:
Group 7 1 7 1
7 1 7 1
NOTES TO THE ACCOUNTS (continued)
For the period ended December 31, 2002
Three months ended Nine months ended
December 31 December 31
2002 £m 2001 £m 2002 £m 2001 £m
5 PROFIT ON SALE OF FIXED ASSETS
AND INVESTMENTS
Net profit on disposal of go (Note 1 below) 10 98
Net profit on part disposal of shares in France
Telecom (formerly shares held in Equant) 23 23
Net profit on disposal of other fixed assets and 20 11 38 14
investments
20 34 48 135
Represented by:
Group 20 34 48 135
20 34 48 135
Note 1 - The profit on disposal of go relates to the additional contracted proceeds resulting from the
onward sale by 3i Plc to EasyJet.
6 INTEREST
Net payable:
Interest payable less amount capitalised 73 104 241 296
Interest receivable (15) (15) (46) (44)
58 89 195 252
Retranslation credits on currency borrowings (3) (85) (10) (62)
55 4 185 190
Net interest payable represented by:
Group 55 4 183 186
Associates 2 4
55 4 185 190
7 TAX
The tax charge for the quarter is £8 million. This represents current tax of £1 million payable overseas and £7
million by way of deferred taxes in the UK.
The deferred tax provision is included on balance sheet and amounts to £1,135 million at December 31, 2002
(December 31, 2001: £1,083 million ; March 31, 2002: £1,031 million).
None of the deferred tax is expected to become payable in the foreseeable future.
8 EARNINGS PER SHARE
Basic earnings per share for the quarter ended December 31, 2002 are calculated on a weighted average of
1,069,918,000 ordinary shares (December 2001: 1,076,077,000) and for the nine months ended December 31, 2002, on a
weighted average of 1,074,054,000 ordinary shares (December 2001: 1,076,091,000) as adjusted for shares held for
the purposes of employee share ownership plans including the Long Term Incentive Plan. Diluted earnings per share
for the quarter ended December 31, 2002 are calculated on a weighted average of 1,069,918,000 ordinary shares
(December 2001: 1,076,077,000) and for the nine months ended December 31, 2002 on a weighted average of
1,122,145,000 shares (December 2001: 1,079,118,000).
The number of shares in issue at December 31, 2002 was 1,082,784,000 (December 31, 2001: 1,082,754,000; March 31,
2002: 1,082,757,000) ordinary shares of 25 pence each.
NOTES TO THE ACCOUNTS (continued)
For the period ended December 31, 2002
December 31 March 31
2002 £m 2001 £m 2002 £m
9 INTANGIBLE ASSETS
Goodwill 101 108 105
Landing rights 65 32 35
166 140 140
10 TANGIBLE ASSETS
Fleet 8,013 8,864 8,672
Property 1,218 1,340 1,300
Equipment 454 509 502
9,685 10,713 10,474
11 INVESTMENTS
Associated undertakings 432 396 425
Trade investments 43 42 39
Investment in own shares 31 25 25
506 463 489
12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Loans 76 57 62
Finance Leases 181 268 208
Hire Purchase Arrangements 310 499 409
567 824 679
Corporate tax 37 27 29
Other creditors and accruals 2,288 2,371 2,493
2,892 3,222 3,201
13 BORROWINGS AND OTHER CREDITORS FALLING DUE
AFTER MORE THAN ONE YEAR
Loans 1,284 1,416 1,483
Finance Leases 2,408 2,437 2,404
Hire Purchase Arrangements 2,571 2,997 2,835
6,263 6,850 6,722
Other creditors and accruals 326 219 263
6,589 7,069 6,985
14 RESERVES
Balance at April 1 1,745 2,944 2,944
Prior year adjustment relating to Deferred (1,094) (1,094)
Tax
Balance at April 1 as restated 1,745 1,850 1,850
Retained profit/(loss) for the period 205 (99) (142)
Exchange and other adjustments (39) 10 17
Goodwill written back on disposals 20
1,911 1,761 1,745
15 The figures for the three months and nine months ended December 31, 2002 are unaudited and do
not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The
figures for the year ended March 31, 2002 have been extracted from the full accounts with
certain minor presentational changes for that year, which have been delivered to the Registrar
of Companies and on which the auditors have issued an unqualified audit report.
INDEPENDENT REVIEW REPORT TO BRITISH AIRWAYS Plc
Introduction
We have been instructed by the Company to review the financial information set
out within the Group Profit and Loss Account, Group Balance Sheet, Group Cash
Flow Statement and Notes to the Accounts and we have read the other information
contained in the third quarter results and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The third quarter results, including the financial information contained
therein, is the responsibility of, and has been approved by the Directors. The
Listing Rules of the Financial Services Authority require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for both the three
months and nine months ended December 31, 2002.
Ernst & Young LLP
London
February 10, 2003
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) INFORMATION
The accounts have been prepared in accordance with accounting principles accepted in the United Kingdom which differ in
certain respects from those generally accepted in the United States. The significant differences are the same as those
set out in the Report and Accounts for the year ended March 31, 2002, with the exception of the implementation of SFAS
142 'Goodwill and Other Intangible Assets' from April 1, 2002.
SFAS 142 includes the requirements to test goodwill and indefinite-lived intangible assets for impairment rather than
amortise them. Intangible assets that are not deemed to have an indefinite life continue to be amortised over their
estimated useful lives. Amortisation of goodwill charged under UK GAAP has been reversed for US GAAP. During the second
quarter the Group completed a goodwill impairment review using the two-step process prescribed in SFAS 142. No
impairment charge resulted from this review.
The adjusted net income and shareholders' equity applying US GAAP are set out below:
Three months ended Nine months ended
December 31 December 31
2002 £m 2001 £m 2002 £m 2001 £m
Profit for the period as reported in the Group 13 (144) 205 (99)
profit and loss account
US GAAP adjustments 16 (35) 191 35
Net income as so adjusted to accord with US GAAP 29 (179) 396 (64)
Net income per Ordinary Share as so adjusted
Basic 2.7p (16.6)p 36.9p (5.9)p
Diluted 2.7p (16.6)p 35.8p (5.9)p
Net income per American Depositary Share as so
adjusted
Basic 27p (166)p 369p (59)p
Diluted 27p (166)p 358p (59)p
December 31 March 31
2002 £m 2001 £m 2002 £m
Shareholders' equity as reported in the Group 2,182 2,032 2,016
balance sheet
US GAAP adjustments 260 28 55
Shareholders' equity as so adjusted to accord with 2,442 2,060 2,071
US GAAP
AIRCRAFT FLEET
Number in service with Group companies at December 31,2002
Changes
On balance Operating Leases Total since
sheet off balance sheet Dec Sept Future
Aircraft Extendible Other 2002 2002 Deliveries Options
AIRLINE OPERATIONS (Notes 1 & 2)
Concorde (Note 3) 7 7
Boeing 747-400 56 56
Boeing 777 43 43
Boeing 767-300 (Note 4) 21 21
Boeing 757-200 15 1 16 (2)
Airbus A319 (Note 5) 21 10 2 33 3 99
Airbus A320 13 2 8 23 6 7
Airbus A321 10
Boeing 737-300 21 21 (2)
Boeing 737-400 19 5 5 29 (2)
Boeing 737-500 10 10
Turbo Props (Note 6) 40 40 (1)
Embraer RJ145 16 3 9 28 17
Avro RJ100 16 16
British Aerospace 146 5 5
GROUP TOTAL 216 36 96 348 (1) 20 116
Notes:
1 Includes those operated by British Airways Plc, CityFlyer Express,
Deutsche BA and British Airways CitiExpress.
2 Excludes 3 Boeing 747-200s, 2 Boeing 737-300s and 1 Boeing
737-400, stood down pending disposal or return to lessor and 1 Boeing
747-400 sub-leased to Qantas.
3 Includes 2 Concordes currently stood down pending safety
modifications.
4 Includes 3 Boeing 767-300s temporarily out of service.
5 Certain future deliveries and options include reserved delivery
positions, and may be taken as any A320 family aircraft.
6 Includes 12 Jetstream 41 aircraft, 13 British Aerospace ATP
aircraft, 5 ATR72 aircraft and 10 de Havilland Canada DHC-8 aircraft.
This information is provided by RNS
The company news service from the London Stock Exchange
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