Financial Statements

Table A

Summary income statement based on proportional consolidation

The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with funds and joint ventures consolidated on a line by line, i.e. proportional basis. The underlying profit before tax and total profit after tax are the same as presented in the consolidated income statement.

	3 months ended
	Q4	Q3	Q2	Q1	Year ended 31 March 2007 £m	Year ended 31 March 2006† £m
	31 March 2007 £m	31 Dec 2006 £m	30 Sep 2006 £m	30 June 2006 £m
Gross rental income	173	180	177	176	706	751
Net rental income	162	169	166	164	661	701
Fees and other income	7	10	10	24	51	51
Administrative expenses	(17)	(22)	(23)	(23)	(85)	(88)
Net interest costs	(89)	(93)	(96)	(92)	(370)	(436)
Underlying profit before tax	63	64	57	73	257	228
Debt refinancing costs		(77)	(228)		(305)	(122)
Net valuation gains (includes profits on disposals)	304	310	355	455	1,424	1,748
Amortisation of intangible asset	(4)	(3)	(4)	(4)	(15)	(10)
Songbird dividend (capital)	33				33
Goodwill impairment*	(3)	(106)		(2)	(111)	(240)
REIT conversion costs*		(13)			(13)
Profit on ordinary activities before tax	393	175	180	522	1,270	1,604
Tax charge relating to underlying profit	(4)	(1)	(12)	(14)	(31)	(43)
REIT conversion charge*		(325)			(325)
Deferred tax benefit*		1,673			1,673
Other taxation	(3)	(33)	(5)	(93)	(134)	(377)
Profit for the year after taxation	386	1,489	163	415	2,453	1,184
Underlying earnings per share – diluted basis	11p	12p	9p	11p	43p	36p

† Restated as described in note 1.

The underlying earnings per share is calculated on underlying pre tax profit of £257m (2006: £228m), tax attributable to underlying profits of £31m (2006: £43m) and fully diluted shares numbering 522m (2006: 521m). Gross rental income excludes service charge receivable.

*Effect of REIT conversion	£m
Deferred tax benefit^‡
on investment properties	1,673
on development properties (included in the consolidated statement of recognised income and expense)	84
Goodwill impairment	(106)
Elimination of deferred tax, net of goodwill	1,651
REIT conversion charge and costs	(338)
Net effect of REIT conversion	1,313

‡ The deferred tax benefit shown is the deferred tax which would have been recorded at 31 December 2006 had the Group not converted to REIT status.

Summary balance sheets based on proportional consolidation

The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the composition of the EPRA net assets of the Group, with share of funds and joint venture assets and liabilities included on a line by line, i.e. proportional basis and assuming full dilution.

	Group £m	Share of funds £m	Share of joint ventures £m	Deferred tax £m	Mark-to- market of interest rate swaps £m	Dilution effect of options £m	Head lease** £m	EPRA Net assets 2007 £m	EPRA Net assets 2006 £m
Retail properties	7,348	1,352	1,502				(29)	10,173	8,775
Office properties	6,168		4				(7)	6,165	5,200
Other properties	531		34					565	439
Total properties	14,047	1,352	1,540				(36)	16,903	14,414
Investment in funds and joint ventures	1,610	(840)	(770)
Other investments	267							267	250
Intangible assets	50							50	65
Other net liabilities	(823)	(12)	(32)	168		46	36	(617)	(243)
Net debt	(6,404)	(500)	(738)		(99)			(7,741)	(6,684)
Net assets	8,747			168	(99)	46		8,862	7,802
EPRA NAV per share(note 2)								1682p	1486p

** Head lease liabilities include £30m relating to Group properties and £6m relating to joint venture properties.

Calculation of EPRA NNNAV per share	2007 £m	2006 £m
EPRA NAV	8,862	7,802
Deferred tax arising on revaluation movements, capital allowances and derivatives	(168)	(1,530)
Mark to market on effective cash flow hedges and related debt adjustments	99	(33)
Mark to market on debt	75	(386)
Tax relief arising thereon		125
EPRA NNNAV	8,868	5,978
EPRA NNNAV per share	1683p	1139p

EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of debt and derivatives and to include the deferred taxation on revaluations.

Total property valuations including share of funds and joint ventures

	2007 £m	2006 £m
British Land Group	14,017	11,753
Share of funds and joint ventures
Investment properties	2,815	2,651
Development properties	77
Trading and finance lease properties at valuation		18
Head lease liabilities	(6)	(8)
	2,886	2,661
Total property portfolio valuation	16,903	14,414

Segment information

Primary and secondary segments

Since the UK is the predominant location of the Group's property portfolio, these financial statements and related notes represent the results and financial position of the Group's primary business segment. The secondary reporting format by property use is shown below:

	Offices		Retail		Offices		Retail
	2007 £m	2006 £m	2007 £m	2006 £m	2007 £m	2006 £m	2007 £m	2006 £m
Net rental income
British Land Group	228	238	306	318	27	33	561	589
Share of funds and joint ventures	2	12	96	98	2	2	100	112
Total	230	250	402	416	29	35	661	701

Segment assets
British Land Group	6,171	5,105	7,401	6,307	1,198	866	14,770	12,278
Share of funds and joint ventures	51	153	2,877	2,546	185	182	3,113	2,881
Total	6,222	5,258	10,278	8,853	1,383	1,048	17,883	15,159

Capital expenditure
British Land Group	487	491	1,016	506	147	45	1,650	1,042
Share of funds and joint ventures		210	539	1,071	15	6	554	1,287
Total	487	701	1,555	1,577	162	51	2,204	2,329