MARCONI CORPORATION
CONSOLIDATED PROFIT AND LOSS ACCOUNT
 
 Note 9 months to 9 months to Year to
 31 December 31 December 31 March
£ million  2003 2002 2003
TURNOVER
Continuing operations 3 1,164 1,485 1,914
Discontinued operations 3 - 87 88
Group 2 1,164 1,572 2,002
 ------------ ------------ ------------
OPERATING LOSS
Group operating loss
Excluding goodwill amortisation and  (72) (280) (308)
exceptional items
Goodwill amortisation (74) (82) (104)
Operating exceptional items 4a (69) (251) (317)
 3 (215) (613) (729)
Continuing operations (215) (607) (723)
Discontinued operations -  (6) (6)
 3 (215) (613) (729)
Share of operating loss of joint
ventures
Excluding goodwill amortisation and (2) (6) (8)
exceptional items
Operating exceptional items 4a - (32) (32)
 (2) (38) (40)
 ------------ ------------ ------------
 (217) (651) (769)
Share of operating loss of associates
Excluding goodwill amortisation and (6) (23) (27)
exceptional items
Goodwill amortisation (5) (7) (10)
Goodwill impairment - (27) (27)
Operating exceptional items 4b  - (21) (25)
 (11) (78) (89)
 ------------ ------------ ------------
Total operating loss  2 (228) (729) (858)
 
Non-operating exceptional items
Gain on disposal of discontinued 4c 9 (6) (5)
operations
Gain on disposal of joint ventures and 4c 77  - -
associates
Gain on disposal of fixed assets and 4c 19 23 26
investments in continuing operations
Merger/demerger items - - 123
Group share of associates' non-operating 4c - (3) (3)
exceptional items
 105 14 141
Amounts written off investments 4d  (2) (41) (40)
Gain / (loss) on waiver of balance 4e 25 (186) (315)
payable to M (2003) plc group
 
Net interest payable
Group 5 (30) (172) (242)
Share of joint ventures and associates 5 - 1 -
 5 (30) (171) (242)
 
Net finance (expenditure) / income 6  (52) 25 (14)
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION
Excluding goodwill amortisation and (162) (455) (599)
exceptional items
Goodwill amortisation and exceptional (20)  (633) (729)
items
 2 (182) (1,088) (1,328)
TAX CREDIT/(CHARGE) ON LOSS ON ORDINARY
ACTIVITIES
Excluding tax on goodwill amortisation (6) (10)  107
and exceptional items
Exceptional tax credit 20 - 78
 7a 14 (10) 185
 
LOSS ON ORDINARY ACTIVITIES AFTER  (168) (1,098) (1,143)
TAXATION
Equity minority interests (1) (1) (1)
 ------------ ------------ ------------
LOSS ON ORDINARY ACTIVITIES ATTRIBUTABLE
TO THE
EQUITY SHAREHOLDERS AND RETAINED LOSS
FOR THE
PERIOD (169) (1,099) (1,144)
 ======= =======  =======
Basic and diluted loss per share 8 (63.7p) (191.7p) (199.6p)
Basic adjusted loss per share 8 (46.4p) (81.2p) (86.0p)
 ======= ======= =======
 
CONSOLIDATED BALANCE SHEET
 
 Note 31 December 30 September 31 March
£ million 2003 2003 2003
 
FIXED ASSETS
Goodwill 510 541 597
Tangible assets 173 192 243
Investments 9 23 63
 ------------ ------------ ------------
 692 756 903
CURRENT ASSETS
Stocks and contracts in progress 10 195 202 234
Debtors: amounts falling due within one 11 438 464 581
year
Debtors: amounts falling due after more 11 5 8 32
than one year
Cash at bank and in hand 12 687 772 1,158
 ------------ ------------ ------------
 1,325 1,446 2,005
 
Creditors: amounts falling due within 13 (630) (627) (5,541)
one year
 ------------ ------------ ------------
NET CURRENT ASSETS/(LIABILITIES)  695 819 (3,536)
 ------------ ------------ ------------
Total assets less current liabilities 1,387 1,575 (2,633)
Creditors: amounts falling due after 13 (539) (660) (46)
more than one year
Provisions for liabilities and charges 14 (259) (246) (300)
 ------------ ------------ ------------
NET ASSETS/(LIABILITIES) BEFORE
RETIREMENT
BENEFIT DEFICITS 589 669 (2,979)
Retirement benefit scheme deficits (337) (346) (353)
  ------------ ------------ ------------
NET ASSETS/(LIABILITIES) AFTER
RETIREMENT
BENEFIT DEFICITS 252 323 (3,332)
 ============ ============ ============
 
CAPITAL AND RESERVES
Called-up share capital 15 50 50 143
Shares to be issued 15 15 8 -
Share premium account 15 - - 700
Capital reserve 15 9 9 9
Capital reduction reserve 15 334 334 -
Profit and loss account 15 (158) (81) (4,187)
 ------------ ------------ ------------
Equity shareholders' interests  250 320 (3,335)
Equity minority interests 2 3 3
 ------------ ------------ ------------
  252 323 (3,332)
 ============ ============ ============
 
CONSOLIDATED CASH FLOW STATEMENT
 
 Note 9 months to 9 months to Year to
 31 December 31 December 31 March
£ million 2003 2002 2003
 
Net cash inflow/(outflow) from operating
activities before
exceptional items 16a 100 (70) 8
Exceptional cash outflows from operating 4f (131) (253) (329)
activities
 
Net cash outflow from operating activities
after exceptional items
Continuing operations (31) (282) (282)
Discontinued operations - (41) (39)
  (31) (323) (321)
 
Returns on investments and servicing of 16b (37) (171) (164)
finance
Tax (paid)/repaid 16c (3) 32 31
Capital expenditure and financial 16d 38 (22) (30)
investment
Acquisitions and disposals 16e 102 389 433
 ----------- ----------- -----------
Cash inflow/(outflow) before use of liquid 69 (95) (51)
resources and financing
 
Net cash inflow/(outflow) from management of 16f 22 (100) (159)
liquid resources
Cash element of Scheme consideration 16g (340) - -
Other net cash outflow from financing 16g (156) (48) (40)
 ----------- ----------- -----------
DECREASE IN CASH AND NET BANK BALANCES
REPAYABLE ON DEMAND (405) (243) (250)
 =========== =========== ===========