BT Regulatory News (BT.A)

BT PROVIDES REVISED FINANCIAL INFORMATION

REFLECTING ORGANISATIONAL CHANGES

BT Group has today published revised financial information to reflect organisational changes that came into effect on 1 April 2016.

Previously, our six customer-facing lines of business were BT Global Services, BT Business, BT Consumer, EE, BT Wholesale and Openreach (EE Limited1 having been acquired by the group on 29 January 2016). As announced on 1 February 2016, with effect from 1 April 2016, we've reorganised the group and our customer-facing lines of business are now: Global Services, Business and Public Sector, Consumer, EE, Wholesale and Ventures, and Openreach.

We've brought together EE's business division and parts of BT Global Services' UK corporate and public sector operations with BT Business, to form Business and Public Sector. This move allows Global Services to sharpen its focus on serving multinational companies and major customers outside the UK. And Business and Public Sector is better able to align its resources to improve customer service and delivery, adopting a more regional and forensic approach to serving the UK public sector.

Alongside these changes, EE's MVNO operations and a number of specialist ventures within the group (including Fleet, Redcare, Directories, Payphones, Tikit and Cables) have moved into Wholesale and Ventures. This gives more visibility to the smaller but important enterprises while bringing together the group's wholesale businesses. In addition, EE's technology team is now the mobile technology unit of our internal service unit, Technology, Service and Operations.

At the same time, we've taken steps to simplify our internal trading model, including moving to a cost-recovery model for certain intra-group revenues. Neither the organisational or internal trading changes have any impact on the total group results.

We show the financial impact and restated financial information, prepared on a consistent basis, for the years ended 31 March 2016 and 31 March 2015 in Appendix 1. We'll present our financial results and updated KPI document for the first quarter to 30 June 2016 (which we expect to announce on Thursday 28 July 2016) on this revised basis.

On our website (www.bt.com/results) we'll also provide pro forma historical financial information by line of business under the new organisational structure, prepared as though EE had been part of the group from 1 April 2014. The pro forma historical financial information shows EE's historical results adjusted to reflect BT's accounting policies. In the consolidated group total, we've eliminated historical transactions between BT and EE as though they had been intercompany transactions. We have not made any adjustments to reflect the allocation of the purchase price for EE. All deal and acquisition-related costs have been treated as specific items and therefore don't impact the pro forma.

1 EE Limited is a wholly-owned subsidiary of BT plc

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About BT

BT's purpose is to use the power of communications to make a better world. It is one of the world's leading providers of communications services and solutions, serving customers in 180 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed-mobile products and services. BT consists of six customer-facing lines of business: Global Services, Business and Public Sector, Consumer, EE, Wholesale and Ventures, and Openreach.

For the year ended 31 March 2016, BT Group's reported revenue was £19,042m with reported profit before taxation of £3,029m.

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

1 Before specific items

2 EE reflects results for the period from acquisition on 29 January to 31 March 2016

3 Before purchases of telecommunications licences

1 Before specific items

2 EE reflects results for the period from acquisition on 29 January to 31 March 2016

3 Before purchases of telecommunications licences