Full year results special - May 2011

1. The Big Picture Online Full year results special - May 2011

2. The Big Picture Online is a quarterly presentation with highlights of BT’s financial performance and examples of the actions BT is taking to become a better business with a better future • This quarter we share the latest news from BT’s full year financial results to March 2011

3. Full year results highlights “We have delivered profits and free cash flow ahead of expectations for the year, while making significant investment in the business for the future.” Ian Livingston BT Group CEO 12 May 2011 Results summary • Revenue1 – down 4% to £20bn • Profit before tax1 – up 20% to £2bn • Operating cost savings3 of over £1bn • Free cash flow2 – up 6% to £2.2bn • Full year dividend of 7.4p (up 7%) Key headlines 1 – before specific items 2 – before specific items and pension deficit payments3 – operating costs before specific items and depreciation and amortisation 0 • Global Services order intake up 10% at £7.3bn; cash flow positive a year early • Growth in Openreach copper lines as customers recognise advantages of fixed line broadband • Cash used to invest in the business; reduce net debt; pay progressive dividends; and support the pension fund. BT put £1.3bn into BT Pension Scheme (BTPS) during fiscal ending March 2011 • Expect to grow profits and free cash flow while investing to return BT to growth in 2013 • Customer service delivery • We experienced challenges this year especially in the UK • Service improvements: • - Global Services customer faults c.10% - Wholesale broadband faults c.15% - Consumer complaints c.20% - Business complaints c.60%

4. Driving broadband-based consumer services • Being the ‘Brand for Business’ for UK SMEs • BT Global Services – a global leader • The wholesaler of choice • The best network provider • A responsible and sustainable business leader A better future A betterfuture A betterbusiness Honesty Agility

5. Driving broadband-based consumer services • Weekly net adds c.5,000 • 144,000 customers • BBC iPlayer • HD • Recommendation engine Broadband New services 5.7m customers • OnLive gaming • Award winning broadband WiFi Differentiated service • Home Hub 3 with Smart Wireless • >2.8m hotspots • Lowers churn • Usage more than doubled

6. Driving broadband-based consumer services Broadband net adds • 64% share of broadband net adds1 in Q4 • highest retail net adds for 8 years • highest ever including cable • c.90% of new broadband provides in Q4 were part of a bundle • Active customer loss in Q4 lowest for 4 years • Consumer ARPU up 5% to £326 BT Other DSL & LLU BT share of net adds ‘000 2011 2009 2010 Consumer ARPU £ 2005 2006 2007 2008 2009 2010 2011 1 DSL and LLU

7. Being the ‘Brand for Business’ for UK SMEs 2011 BT Business revenue c.£2.4bn • BT Business line loss in Q4 at lowest level for more than 3 years • New business broadband propositions launched • FY business broadband net adds up c.30% YoY • Focus on IT services and mobility • IT services revenue up 17% FY • Mobility revenue up 14% FY • opportunity to increase market share 4% 16% Fixed voice & data IT services Mobility 80% IT services and mobility revenue trend IT services Mobility

8. BT Global Services – a global leader • Order intake • £7.3bn in year, up 10% • Contract wins in Q4 • Ecopetrol • BASF • AsiaPac • investment on track • growing pipeline • Strong growth in LatAm • New structure • focus on key global sectors • industry specific solutions • global account management and delivery model Banking & Financial Markets Commerce (Manufacturing, logistics & pharma) Consumer Packaged Goods Gov’t& Health UK EMEA & Latin America United States & Canada Asia Pacific

9. The wholesaler of choice • 40% of FY external revenue under long-term contract • Executing on existing MNS contracts • Portfolio evolving from traditional to IP • MNS & IP revenue up 14% FY • IP Exchange minutes up more than 75% FY • fixed Ethernet connections trebled External revenue ex transit MNS & IP Other £m

10. The best network provider QoQ change in total copper lines • Copper line base grew for first time since 2006 • up 11,000 FY versus down 326,000 last year • ADSL2+ available to 80% of UK premises by December 2011 • Ethernet - 1,000 fibre Ethernet nodes, largest network in the UK • Continued investment overseas • Ethernet, MPLS & city fibre ‘000 2010 2011

11. The best network provider • Fibre roll out progressing at a good pace • passing around 80,000 new premises per week • 5m homes to be passed in next few weeks • c.150,000 end users currently • c.45 CPs selling or trialling services • Cornwall and NI progressing well • Network capabilities • expect to roughly double our FTTC speeds to up to 80Mbps in 2012 • potential for >100Mbps FTTC • FTTP roll out commencing, 1 Gbps trial underway Fibre roll out ADSL enabled for c.99% of all premises >4m premises passed currently 5m premises passed shortly 10m premises passed by 2012 2/3 premises passed by end of 2015

12. More information to help you • For more information about BT’s strategy go to: • Team BT 2012 Challenge intranet site (http://2012challenge.intra.bt.com/our-strategy/index.htm) • Investor centre of the BTplc internet site (BT Group annual report published 27 May) • (http://www.btplc.com/sharesandperformance/index.cfm)