- prev: 1 Significant accounting policies
- next: 3 Revenue
- back: Notes to financial statements menu
The Group operates in five segments which reflect the internal organisation and management structure according to the nature of the products and services provided:
- Civil aerospace -
- Development, manufacture, marketing and sales of commercial aero engines and aftermarket services.
- Defence aerospace -
- Development, manufacture, marketing and sales of military aero engines and aftermarket services.
- Marine -
- Development, manufacture, marketing and sales of marine propulsion systems and aftermarket services.
- Energy -
- Development, manufacture, marketing and sales of power systems for the offshore oil & gas industry, electrical power generation and aftermarket services.
- Financial services -
- Engine leasing, aircraft leasing and electrical power project development.
Details for these primary reporting segments are shown below:
| Civil aerospace £m |
Defence aerospace £m |
Marine £m |
Energy £m |
Financial services £m |
Central items £m |
Eliminations £m |
Consolidated £m |
|
|---|---|---|---|---|---|---|---|---|
| Analysis by business segments for year ended December 31, 2005 |
||||||||
| Total revenue | 3,510 | 1,413 | 1,097 | 505 | 78 | — | — | 6,603 |
| Group operating profit excluding share of profit of joint ventures |
625 | 170 | 86 | (1) | (2) | (45) | — | 833 |
| Share of profit of joint ventures | 34 | 7 | 1 | 5 | (1) | — | — | 46 |
| Loss on sale of businesses | — | — | — | (2) | — | — | — | (2) |
| Profit before finance charges and taxation |
659 | 177 | 87 | 2 | (3) | (45) | — | 877 |
| Financial income | 442 | 442 | ||||||
| Financial expenses | (842) | (842) | ||||||
| Taxation | (130) | (130) | ||||||
| Profit for the period | 347 | |||||||
Other information: |
||||||||
| Segment assets | 4,325 | 816 | 1,136 | 566 | 250 | — | (273) | 6,820 |
| Investments in joint ventures | 147 | 28 | 1 | 30 | 41 | — | — | 247 |
| Cash and short-term investments | 1,794 | 1,794 | ||||||
| Fair value of swaps hedging fixed rate borrowings |
74 | 74 | ||||||
| Unallocated assets | 384 | 384 | ||||||
| Total assets | 9,319 | |||||||
| Segment liabilities | (3,194) | (904) | (545) | (282) | (91) | — | 273 | (4,743) |
| Borrowings | (1,533) | (1,533) | ||||||
| Unallocated liabilities | (1,538) | (1,538) | ||||||
| Total liabilities | (7,814) | |||||||
Expenditure on intangible assets and property, plant and equipment |
262 | 48 | 29 | 14 | 11 | 364 | ||
| Depreciation and amortisation | 164 | 32 | 19 | 9 | 19 | 243 | ||
| Impairments | — | — | — | — | 11 | 11 | ||
| Civil aerospace £m |
Defence aerospace £m |
Marine £m |
Energy £m |
Financial services £m |
Central items £m |
Eliminations £m |
Consolidated £m |
|
|---|---|---|---|---|---|---|---|---|
| Analysis by business segments for year ended December 31, 2004 |
||||||||
| Total revenue | 3,040 | 1,374 | 963 | 489 | 81 | — | — | 5,947 |
| Group operating profit excluding share of profit of joint ventures |
177 | 177 | 78 | 7 | (9) | (41) | — | 389 |
| Share of profit of joint ventures | 8 | 2 | — | 7 | 2 | — | — | 19 |
| Profit on sale of businesses | 9 | — | — | — | — | — | — | 9 |
| Profit before finance charges and taxation |
194 | 179 | 78 | 14 | (7) | (41) | — | 417 |
| Financial income | 372 | 372 | ||||||
| Financial expenses | (425) | (425) | ||||||
| Taxation | (100) | (100) | ||||||
| Profit for the period | 264 | |||||||
Other information: |
||||||||
| Segment assets | 3,634 | 791 | 1,107 | 579 | 350 | — | (236) | 6,225 |
| Investments in joint ventures | 117 | 25 | 2 | 25 | 42 | — | — | 211 |
| Cash and short-term investments | 1,488 | 1,488 | ||||||
| Unallocated assets | 190 | 190 | ||||||
| Total assets | 8,114 | |||||||
| Segment liabilities | (2,408) | (765) | (544) | (280) | (78) | — | 236 | (3,839) |
| Borrowings | (1,637) | (1,637) | ||||||
| Unallocated liabilities | (1,192) | (1,192) | ||||||
| Total liabilities | (6,668) | |||||||
Expenditure on intangible assets and property, plant and equipment |
239 | 40 | 32 | 14 | 8 | 333 | ||
| Depreciation and amortisation | 159 | 33 | 18 | 9 | 31 | 250 | ||
| Impairments | 36 | — | 1 | — | 13 | 50 | ||
Geographical segments
The Group's revenue by destination is shown below:
| 2005 £m |
2004 £m |
|
|---|---|---|
| United Kingdom | 886 | 915 |
| Rest of Europe | 1,059 | 954 |
| USA | 2,408 | 1,944 |
| Canada | 191 | 205 |
| Asia | 1,516 | 1,290 |
| Africa | 152 | 196 |
| Australasia | 96 | 93 |
| Other | 295 | 350 |
| 6,603 | 5,947 |
The following analysis shows the carrying amounts of the Group's assets, and additions to intangible assets and property, plant and equipment, by the geographical area in which the assets are located:
| Segment assets | Additions to intangible assets and property, plant and equipment |
||||
|---|---|---|---|---|---|
| 2005 £m |
2004 £m |
2005 £m |
2004 £m |
||
| United Kingdom | 6,730 | 5,842 | 316 | 293 | |
| North America | 1,265 | 1,066 | 24 | 25 | |
| Nordics | 832 | 814 | 11 | 8 | |
| Germany | 652 | 515 | 5 | 5 | |
| Other | 310 | 238 | 8 | 2 | |
| Eliminations | (470) | (361) | — | — | |
| Total | 9,319 | 8,114 | 364 | 333 | |
Underlying profit reconciliation:
| 2005 | 2004 | ||||||
|---|---|---|---|---|---|---|---|
| £m | Underlying adjustments £m |
Underlying results £m |
£m | Underlying adjustments £m |
Underlying results £m |
||
| Profit before financing costs | |||||||
| Civil aerospace | 659 | (205) | 454 | 194 | — | 194 | |
| Defence aerospace | 177 | 3 | 180 | 179 | — | 179 | |
| Marine | 87 | 2 | 89 | 78 | — | 78 | |
| Energy | 2 | 2 | 4 | 14 | — | 14 | |
| Financial services | (3) | — | (3) | (7) | — | (7) | |
| Central items | (45) | — | (45) | (41) | — | (41) | |
| 877 | (198) | 679 | 417 | — | 417 | ||
| Financing costs | (400) | 305 | (95) | (53) | — | (53) | |
| Profit before tax | 477 | 107 | 584 | 364 | — | 364 | |
| 2005 | 2004 | ||||
|---|---|---|---|---|---|
| Profit before financing costs £m |
Profit before tax £m |
Profit before financing costs £m |
Profit before tax £m |
||
| Release of transition hedge reserve | (452) | (452) | — | — | |
| Realised gains on settled derivative contracts | 328 | 396 | — | — | |
| Gains carried forward in contract balances | (74) | (74) | — | — | |
| Net unrealised fair value changes to derivative contracts | — | 345 | — | — | |
| Revaluation of trading assets and liabilities | — | (78) | — | — | |
| Exchange differences and forecast changes relating to RRSPs | — | (30) | — | — | |
| (198) | 107 | — | — | ||
The reconciliation of underlying earnings per share is provided in note 7.