Financial results restatement

BT Group PLC
23 January 2008



DC08-31                                                               23 January
2008


CHANGE TO PRESENTATION OF BT'S FINANCIAL RESULTS FOLLOWING IMPLEMENTATION OF NEW
                            ORGANISATIONAL STRUCTURE


Key points:

   •Presentation of BT's financial results is being changed to reflect the
    implementation of its new organisational structure announced in April 2007.
   •New organisational structure provides greater visibility on end-to-end
    profitability of the lines of business.
   •As previously announced, results for third quarter 2007/08 and onwards
    will be reported under the new structure.
   •Historical results at BT group level and financial targets are unaffected
    by these changes.
   •BT continues to comply with the requirements of the regulatory
    Undertakings and obligations.


In April 2007, BT announced its plans to accelerate its transformation into a
communications services company.  Key to this acceleration is the creation of a
new organisational structure that will enable the delivery of faster, more
resilient and cost effective services to customers.  BT moved to this new
structure with effect from 1 October 2007 and, as a result, is changing the
presentation of its financial results to reflect the impact of the
transformation.  As previously stated, BT's results for the third quarter of
2007/08, to be announced on 7 February 2008, and onwards will be reported under
the new structure.  Historical results at BT group level and financial targets
are unaffected by these changes.

The new organisational structure is based around two new internal operating
divisions, namely BT Design and BT Operate, which support the existing four
customer-facing lines of business.  BT Design is responsible for the design and
development of services and BT Operate is responsible for their deployment and
operation.  The divisions will help BT deliver software driven products over
next generation networks as well as drive the achievement of cost savings.

For comparative purposes, BT is today providing historical results for its lines
of business for the 2006/07 financial year and for the first half of the 2007/08
financial year on a quarterly basis under the new structure.  The main changes
are that a significant amount of intra-group trading is removed and there is
greater visibility on the end-to-end profitability of the lines of business
downstream of Openreach.  Trading between Openreach and other parts of the group
is broadly unchanged.

The summary financial results for the 2006/07 financial year and for the first
half of the 2007/08 financial year on a quarterly basis under the old and new
structures, showing the adjustments, are attached at Appendix I.


An analysts' conference call and presentation by Phil Moses, Group Controller
and Director of Investor Relations, will be held at 10:00 today and will be
audiowebcast simultaneously on the BT website at www.btplc.com/investorcentre

Performance indicators updated to reflect the impact of the new organisational
structure are also available on the BT website.


For further information

Inquiries about this news release should be made to the BT Group Newsroom on its
24-hour number: 020 7356 5369.  From outside the UK dial + 44 20 7356 5369. All
news releases can be accessed at our web site: www.btplc.com/News

About BT

BT is one of the world's leading providers of communications solutions and
services operating in 170 countries.  Its principal activities include networked
IT services; local, national and international telecommunications services;
higher-value broadband and internet products and services and converged fixed/
mobile products and services.  BT consists principally of four lines of
business: BT Global Services, Openreach, BT Retail and BT Wholesale.

In the year ended 31 March 2007, BT Group plc's revenue was £20,223 million with
profit before taxation of £2,484 million.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and
encompasses virtually all businesses and assets of the BT Group.  BT Group plc
is listed on stock exchanges in London and New York.

For more information, visit www.bt.com/aboutbt


APPENDIX I
Financial results 2006/07 - quarterly summary

                       Year ended 31 March 2007                     New reporting structure
Revenue         As reported    Adjustment    New reporting         Q1       Q2       Q3       Q4
                                               structure
                         £m            £m             £m           £m       £m       £m       £m
BT Global Services    9,106        (1,794)         7,312        1,714    1,725    1,848    2,025
BT Retail             8,414           (68)         8,346        2,054    2,061    2,108    2,123
BT Wholesale          7,584        (2,198)         5,386        1,328    1,362    1,361    1,335
Openreach             5,177            46          5,223        1,271    1,290    1,326    1,336
Other                    17             -             17            6        4        2        5
Intra-group trading (10,075)        4,014         (6,061)      (1,509)  (1,501)  (1,519)  (1,532)
                     -------     ---------       --------       ------   ------   ------   ------
       Total         20,223             -         20,223        4,864    4,941    5,126    5,292
                     =======     =========       ========       ======   ======   ======   ======


                       Year ended 31 March 2007                     New reporting structure
EBITDA before   As reported    Adjustment    New reporting         Q1       Q2       Q3       Q4
specific items                                 structure
and leaver
costs
                         £m            £m             £m           £m       £m       £m       £m
BT Global Services    1,020          (244)           776          162      169      175      270
BT Retail               869           512          1,381          300      358      360      363
BT Wholesale          1,961          (450)         1,511          383      376      379      373
Openreach             1,888            43          1,931          484      470      480      497
Other                    42           139            181           57       45       45       34
                      -------     ---------       --------      ------   ------   ------   ------
       Total          5,780             -          5,780        1,386    1,418    1,439    1,537
                      =======     =========       ========      ======   ======   ======   ======


                       Year ended 31 March 2007                     New reporting structure
Depreciation    As reported    Adjustment    New reporting         Q1       Q2       Q3       Q4
and                                            structure
amortisation
                         £m            £m             £m           £m       £m       £m       £m
BT Global Services      675           (10)           665          147      155      172      191
BT Retail               171           274            445          104      105      115      121
BT Wholesale          1,198          (290)           908          222      225      229      232
Openreach               707             -            707          175      178      177      177
Other                   169            26            195           55       40       48       52
                      -------     ---------       --------       ------   ------   ------   ------
       Total          2,920             -          2,920          703      703      741      773
                      =======     =========       ========       ======   ======   ======   ======

                       Year ended 31 March 2007                     New reporting structure
Operating       As reported    Adjustment    New reporting         Q1       Q2       Q3       Q4
profit before                                  structure
specific items
and leaver
costs
                         £m            £m             £m           £m       £m       £m       £m
BT Global Services      345          (234)           111           15       14        3       79
BT Retail               698           238            936          196      253      245      242
BT Wholesale            763          (160)           603          161      151      150      141
Openreach             1,181            43          1,224          309      292      303      320
Other                  (127)          113            (14)           2        5       (3)     (18)
                      -------     ---------       --------       ------   ------   ------   ------
       Total          2,860             -          2,860          683      715      698      764
                      =======     =========       ========       ======   ======   ======   ======

Financial results 2007/08 - quarterly summary

                    Half year ended 30 September 2007             New reporting structure
Revenue             As reported    Adjustment   New reporting           Q1             Q2
                                                structure
                           £m            £m            £m               £m             £m
BT Global Services      4,536          (838)        3,698            1,815          1,883
BT Retail               4,195           (22)        4,173            2,047          2,126
BT Wholesale            3,678        (1,104)        2,574            1,318          1,256
Openreach               2,614            14         2,628            1,321          1,307
Other                      12             -            12                7              5
Intra-group trading    (4,907)        1,950        (2,957)          (1,475)        (1,482)
                       -------      ---------      --------        ---------      ---------
         Total         10,128             -        10,128            5,033          5,095
                       =======      =========      ========        =========      =========


                    Half year ended 30 September 2007             New reporting structure
EBITDA before       As reported    Adjustment   New reporting           Q1             Q2
specific items                                  structure
and leaver
costs
                           £m            £m            £m               £m             £m
BT Global Services        479          (115)          364              178            186
BT Retail                 455           263           718              331            387
BT Wholesale              952          (215)          737              375            362
Openreach                 939            14           953              482            471
Other                      48            53           101               59             42
                        -------     ---------      --------        ---------      ---------
         Total          2,873             -         2,873            1,425          1,448
                        =======     =========      ========        =========      =========


                    Half year ended 30 September 2007             New reporting structure
Depreciation and    As reported    Adjustment   New reporting           Q1             Q2
amortisation                                    structure
                           £m            £m            £m               £m             £m
BT Global Services        339            11           350              171            179
BT Retail                  82           133           215              109            106
BT Wholesale              535          (116)          419              209            210
Openreach                 351             -           351              181            170
Other                      95           (28)           67               39             28
                        -------     ---------      --------        ---------      ---------
         Total          1,402             -         1,402              709            693
                        =======     =========      ========        =========      =========


                    Half year ended 30 September 2007             New reporting structure
Operating profit    As reported    Adjustment   New reporting           Q1             Q2
before specific                                 structure
items and leaver
costs
                           £m            £m            £m               £m             £m
BT Global Services        140          (126)           14                7              7
BT Retail                 373           130           503              222            281
BT Wholesale              417           (99)          318              166            152
Openreach                 588            14           602              301            301
Other                     (47)           81            34               20             14
                        -------     ---------      --------        ---------      ---------
         Total          1,471             -         1,471              716            755
                        =======     =========      ========        =========      =========




Internal revenue adjustment by line of business
2006/07 financial year
                                          As reported

              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global Services  -          596             988           13        42     1,639
BT Retail         156            -             177           71        13       417
BT Wholesale    1,115        1,105               -        1,307         -     3,527
Openreach         441        2,517           1,499            -        35     4,492
               --------      -------        --------     --------  --------  --------
    Total       1,712        4,218           2,664        1,391        90    10,075
               ========      =======        ========     ========  ========  ========

                                          Adjustment

              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global Services  -         -596            -988          -13       -42    -1,639
BT Retail         -25            -            -104          -69        27      -171
BT Wholesale   -1,115       -1,105               -          -30         -    -2,250
Openreach           -            -          -1,461            -     1,507        46
               --------      -------        --------     --------  --------  --------
    Total      -1,140       -1,701          -2,553         -112     1,492    -4,014
               ========      =======        ========     ========  ========  ========

                                    New reporting structure

              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global           -            -               -            -         -         -
Services
BT Retail         131            -              73            2        40       246
BT Wholesale        -            -               -        1,277         -     1,277
Openreach         441        2,517              38            -     1,542     4,538
               --------      -------        --------     --------  --------  --------
    Total         572        2,517             111        1,279     1,582     6,061
               ========      =======        ========     ========  ========  ========




Internal revenue adjustment by line
of business
2007/08 half year

                                          As reported

              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global           -          294             439            7        23       763
Services
BT Retail          91            -              74           39         3       207
BT Wholesale      555          563               -          628        -4     1,742
Openreach         210        1,224             744            -        17     2,195
               --------      -------        --------     --------  --------  --------
    Total         856        2,081           1,257          674        39     4,907
               ========      =======        ========     ========  ========  ========

                                          Adjustment

              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global Services  -         -294            -439           -7       -23      -763
BT Retail         -12            -             -44          -38        18       -76
BT Wholesale     -555         -563               -          -11         4    -1,125
Openreach           -            -            -724            -       738        14
               --------      -------        --------     --------  --------  --------
    Total        -567         -857          -1,207          -56       737    -1,950
               ========      =======        ========     ========  ========  ========

                                    New reporting structure
              BT Global  BT Retail    BT Wholesale    Openreach     Other     Total
               Services
                   £m           £m              £m           £m        £m        £m
Internal
revenue
recorded by

BT Global Services  -            -               -            -         -         -
BT Retail          79            -              30            1        21       131
BT Wholesale        -            -               -          617         -       617
Openreach         210        1,224              20            -       755     2,209
               --------      -------        --------     --------  --------  --------
    Total         289        1,224              50          618       776     2,957
               ========      =======        ========     ========  ========  ========







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