Notes 16-21

19. Non-GAAP measures of performance

Reconciliation of profit before interest and taxation to Headline PBIT for the six months ended 30 June 2009


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Profit before interest
and taxation
218.5 398.5 922.0
Amortisation and impairment
of acquired intangible assets
88.1 25.5 78.4
Goodwill impairment 40.0 20.0 84.1
Goodwill write-down relating to
utilisation of pre-acquisition tax losses
0.7 1.5
Gains on disposal of investments (8.4) (3.6) (3.4)
Write-downs of investments 4.3 12.3 30.5
Share of exceptional
(gains)/losses of associates
(0.3) 0.5
Costs of changes to
corporate structure
4.6
Headline PBIT/Headline
operating profit
342.2 453.4 1,118.2
Finance income (excluding gains
on termination of hedge accounting
on repayment of TNS debt)

107.5

70.1

169.6
Finance charges (excluding
revaluation of financial instruments
and gains on swap terminations)

(197.5)

(134.4)

(319.4)
  (90.0) (64.3) (149.8)
Interest cover on
Headline PBIT
3.8 times 7.1 times 7.5 times

Calculation of Headline EBITDA


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Headline PBIT (as above) 342.2 453.4 1,118.2
Depreciation of property,
plant and equipment
97.3 68.6 149.6
Amortisation of other intangible assets 16.2 9.9 23.4
Headline EBITDA 455.7 531.9 1,291.2

Reconciliation of profit before taxation to Headline PBT and Headline earnings for the six months ended 30 June 2009


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Profit before taxation 179.3 338.5 746.8
Amortisation and impairment of
acquired intangible assets
88.1 25.5 78.4
Goodwill impairment 40.0 20.0 84.1
Goodwill write-down relating to
utilisation of pre-acquisition tax losses
0.7 1.5
Gains on disposal of investments (8.4) (3.6) (3.4)
Write-downs of investments 4.3 12.3 30.5
Share of exceptional
(gains)/losses of associates
(0.3) 0.5
Revaluation of financial instruments (25.6) (4.3) 25.4
Gains on termination of hedge
accounting on repayment
of TNS debt

(25.2)


Costs of changes to
corporate structure
4.6
Headline PBT 252.2 389.1 968.4
Taxation (excluding net deferred
tax credit in relation to the
amortisation of acquired intangible
assets and other goodwill items)

(62.5)

(104.8)

(245.3)
Minority interests (29.9) (29.1) (74.8)
Headline earnings 159.8 255.2 648.3
Ordinary dividends1 65.2 58.7 161.8
Dividend cover on
Headline earnings
2.5 times 4.3 times 4.0 times
1
For the six months ended 30 June 2009, ordinary dividends represent an estimate of the 2009 first interim dividend expected to be paid to share owners in November 2009, based on the number of shares in issue at 30 June 2009. The corresponding figure for the six months ended 30 June 2008 represents the 2008 first interim dividend paid in November 2008.

Headline PBIT margins before and after share of results of associates


 
 
 

 
 
 
Margin (%)
Six months
ended
30 June
2009
£m

 
 
 
Margin (%)
Six months
ended
30 June
2008
£m
Revenue   4,288,7 3,339.1
Headline PBIT 8.0 342.2 13.6 453.4
Share of results
of associates (excluding
exceptional gains)

 

19.5


20.7
Headline PBIT
excluding share of
results of associates

7.5

322.7

13.0

432.7

Reconciliation of free cash flow for the six months ended 30 June 2009


 
 
 
Six months
ended
30 June
2009
£m
Six months
ended
30 June
2008
£m

Year ended
31 December
2008
£m
Cash generated by operations (14.5) (31.2) 1,195.0
Plus:
Interest received
96.2 33.3 133.0
Investment income 0.4 1.7 1.8
Dividends received from associates 22.1 14.8 44.6
Issue of shares 0.1 5.9 10.6
Movements in working capital
and provisions
481.9 572.5 109.3
Proceeds on disposal of property,
plant and equipment
2.1 6.7 11.5
Proceeds on disposal of treasury shares 6.9
Less:
Interest and similar charges paid
(200.7) (99.9) (269.2)
Purchases of property,
plant and equipment
(113.0) (67.8) (196.8)
Purchases of other intangible
assets (including capitalised
computer software)

(16.1)

(6.2)

(23.8)
Corporation and overseas tax paid (94.9) (84.1) (182.5)
Dividends paid to minority
shareholders in subsidiary
undertakings

(31.3)

(26.4)

(63.5)
Free Cash Flow 132.3 319.3 776.9