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ITV PLC (ITV)

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Wednesday 05 March, 2008

ITV PLC

Final Results

ITV PLC
05 March 2008

5 March 2008

                ITV plc results for year ended 31 December 2007

    Turnaround plan on track: ITV viewing increased and advertising revenues
           stabilised in 2007; ITV outperforming the market in 2008.

Financial summary

12 months to 31 December  (£m)                               2007           2006           Change %
Group revenue                                               2,082          2,181                (5)
Operating EBITA*                                              311            375               (17)
Profit before tax                                             188            288               (35)
Adjusted EPS**                                                5.0            6.3               (21)
Full year dividend                                           3.15           3.15                  -

* Before exceptional items
** Before exceptional items, amortisation and tax adjustments



•   Group revenue impacted by reduction in PRS revenues of £58m and reduction in 
    external Global Content revenues of £37m.
•   Operating EBITA impacted by increased investment in digital channels; 
    reduction in PRS profits; and anticipated broadband start-up losses.

Operating summary

•   Total viewing of ITV family of channels increased year-on-year for the first 
    time since the early 1990s.
•   ITV1 and ITV digital channels outperformed their terrestrial and digital 
    competitors.
•   Reviews of CRR and PSB secured and underway.
•   ITV's five year content-led growth strategy and targets announced.
•   Senior executive team strengthened.
•   Appointment to Board of Dawn Airey and Rupert Howell; Finance Director 
    recruitment underway; Peter Fincham to join as ITV Director of TV.

Segmental highlights

Broadcasting

ITV family

•   ITV net advertising revenue (NAR) held at £1,489 million (2006:
    £1,494 million)
•   ITV digital channel NAR up 33% to £209 million (2006: £157 million)
•   ITV family viewing share increased to 23.2% (2006: 23.1%)
•   Commercial impact volume rose 3.3% and share held at 41.7% (2006: 42.2%)

ITV1

•   NAR fell 4% to £1,224 million, vs decline of 12% in 2006 and 10% CRR ratchet
•   Viewing share down 2.1%, compared to double digit declines for C4 and five
•   Volume of impacts up 1%, with share down 3.3% (2006: down 10.5%)

Global Content

•   Integration of all UK and worldwide production and distribution under
    Dawn Airey
•   Senior appointments with Peter Iacono joining as MD ITV Worldwide from Sony; 
    Paul Buccieri joining as CEO Granada America from Fox's Twentieth
    Television
•   ITV Productions delivered 75% of all commissioned programmes on all UK 
    channels attracting audiences of over 10 million
•   Acquisition of 12 Yard building presence in key international game show 
    genre

Online

•   itv.com monthly unique users (UUs) reached 6 million following H2 2007 
    relaunch
•   itvlocal monthly UUs reached 0.75 million following roll-out across ITV plc 
    regions
•   Friends Reunited revenue increased 36% with strong growth across all core 
    sites

Current trading

•   Broadcasting: ITV outperforming the market in revenues and ratings
    -   Total ITV NAR estimated to be up 1.9% for Q1 with total TV down 0.7%.
    -   Total TV estimated to be down around 1% for April
    -   ITV family viewing up year to date at 23.2% (2007: 23.0%) and SOCI held 
        at 41.5% (2007: 41.7%)

•   Global Content: strong on-screen performance and international production
    -   Performance highlights in new schedule: Dancing on Ice, Lewis, 
        Coronation Street, Emmerdale, Ant and Dec's Saturday Night Takeaway.
    -   Major commissions secured for networks in US and Germany

•   Online: strategic momentum maintained into 2008
    -   Streaming technology improvements leading to increased video views on
        itv.com
    -   Increased Friends Reunited focus on advertising as core site evolves in 
        2008


Executive Chairman Michael Grade said

'In my first year back at ITV, we put together a growth strategy for the
business and strengthened the senior team. The first priority for ITV was to
stem the decline.  We did more than that, delivering an increase in viewing to
the ITV family for the first time in over a decade. For the first time in many
years, ITV1 outperformed its competitors and we've continued to do so into 2008.

'We are heartened by the positive response of advertisers to the improved
on-screen performance and our investment in channels and online. Having
stabilised our advertising revenues last year, we've been able to increase ITV
television advertising revenues nearly 2% year on year for the first quarter of
2008, running well ahead of the total market.

'We have made real progress towards delivering on our 3-5 year growth strategy.
We've reached agreements to launch Freesat, Kangaroo and an HD ITV service this
year.  We've taken a stake in Mammoth Screen, a controlling position in Jaffe
Braunstein Entertainment and acquired 12 Yard.  We've re-launched itv.com,
completed the roll out of itvlocal.com and continued to grow Friends Reunited.

'The Board's decision to recommend holding the dividend reflects their
confidence in the strategy for growth and the team we have in place to deliver
it. The Turnaround Plan is on track.'



NOTES:

1)    Impacts refer to adult impacts.  Share of viewing refers to all-time share
of all individuals viewing.  ITV family includes ITV1, GMTV and ITV digital
channels (ITV2/+1, ITV3/+1, ITV, Citv, M&M, GMTV+1, GMTV2). Viewing share data
and commercial impact data sourced to BARB/TNS.  Year to date figures cited run
to 24 February 2008 (and equivalent period in 2007).

2)    Net advertising revenue figures based on ITV data and estimates.  ITV1 NAR
refers to ITV plc share of ITV1 NAR.


For further enquiries please contact:

ITV plc
Tel: 0844 8818000

Press queries
Mark Gallagher - Group Director of Corporate Affairs
Jim Godfrey - Director of Corporate Affairs

Tel: 084488 18434

Investor queries
James Tibbitts - Company Secretary                    Tel: 084488 15656
Christy Swords - Director of Investor Relations       Tel: 084488 15651
Pippa Strong - Head of Investor Relations             Tel: 084488 14767

Tulchan Communications Group
Tel: 020 7353 4200

Andrew Grant
Susanna Voyle
David Allchurch

Website: www.itv.com, investor information: www.itvplc.com

An analysts presentation will be held at 09:30hrs on 5th March 2008 at the City
Presentation Centre, 4 Chiswell Street, London EC1Y 4UP



               Message from the Executive Chairman Michael Grade

2007 was a watershed year for ITV plc. We put in place the strategy and the team
to meet the challenges of the new digital era. With a much improved performance
on-screen, we have countered the myth that ITV is a business managing decline.
We have set out ambitious targets for our Global Content and Online businesses.
Our focus now is on implementing the Turnaround strategy and delivering
sustainable growth.

In November 2007 digital switchover in the UK started as the town of Whitehaven
turned off its analogue signal. By 2012 the whole of the UK will have switched
over to digital.

The transition to digital marks the start of a new era for ITV.  For 25 years,
ITV1 lost share to new services, for example Channel 4, five and Sky. The UK's
leading commercial channel appeared locked into an inexorable cycle of decline,
exacerbated by poor performance.

By the end of 2007, over 85% of UK homes had converted to digital. The
multichannel fragmentation effect began to ease and ITV's performance improved.
ITV1's audience started to stabilise and the channel enjoyed a number of
programming successes - from enduring favourites like Coronation Street and I'm
A Celebrity...Get Me Out of Here! to new hits, like Britain's Got Talent,
Kingdom and Primeval. A 'blue chip' roster of major sports included Champions
League football, Formula 1 motor racing and the Rugby World Cup.

Structural changes to the schedule paid off with gains in daytime and over the
summer. Over the full course of 2007, ITV1 actually delivered to its advertisers
more viewers than it had the previous year, in terms of commercial impacts.

ITV Productions played its part, delivering half of the channel's original
commissions - and more than half of its total impacts - with a slate extending
from Emmerdale to Mobile, from Parkinson to Ant and Dec's Saturday Night
Takeaway, from This Morning to Tonight with Trevor McDonald. ITV productions for
both ITV1 and other broadcasters continued to win plaudits and prizes, with
successes including The Queen, See No Evil, The Street and Longford. 75% of all
programmes (excluding sport) on all UK channels delivering audiences over 10
million in 2007 were made by ITV Productions.

However, ITV Productions was not able to deliver revenue growth to match such
on-screen successes, with drama for ITV1 and production for other UK channels
both down compared to 2006. The new strategy and structure, together with
personnel changes made towards the end of the year, are aimed at improving this
performance in 2008.

ITV's digital channels came of age in 2007, generating in excess of £200 million
of advertising and sponsorship revenues. itv.com completed its successful
relaunch and now offers a state of the art broadband experience. In November,
ITV announced a joint venture with BBC Worldwide and Channel 4 to provide a
broadband service offering access to thousands of hours of archive programming
from the UK's top broadcasters.

We are determined that ITV's strong on-screen performance in 2007 should mark
the beginning of a revival in the Company's fortunes. To this end, during the
year, we put in place the team and the strategy to deliver future growth.

The ITV Senior Executive team was considerably strengthened in 2007. In Global
Content, we recruited Dawn Airey, latterly of Sky and five. Rupert Howell, a
major figure from the advertising sector, joined us in the crucial post of
Managing Director of ITV Brand and Commercial. Carolyn Fairbairn, formerly of
the BBC  and McKinsey, leads our strategy and development function. Entering
2008, we have confirmed that Peter Fincham, the controller of BBC1 until October
2007, will join ITV as Director of Television. In this role, Peter will replace
Simon Shaps, who has performed a great job for ITV over many years and has been
Director of Television since 2005.

ITV's clarity of purpose is evident in the Turnaround strategy that we set out
in September 2007. Our vision is for ITV to be the UK's favourite source of free
entertainment. We set a revenue target for the Company of 3-5% compound annual
growth to 2010, rising to 5% to 2012. The Global Content business aims to double
its annual revenues by 2012. Our broadcast channels aim to deliver a share of
commercial impacts at or above 38.5% in 2012. We also plan to deliver £150
million of Online annual revenues by 2010.

Our plan will be self-funding. We have continued with the programme of disposing
of non-core businesses, which has now raised over £600 million since merger.
During 2007, we disposed of our stakes in Liverpool FC, Arsenal FC, MUTV and
ITFC.  Such disposals will fund acquisitions which are consistent with our
content-led growth plan. During the year, we took a majority stake in US
producer Jaffe/Braunstein Entertainment, a 25% stake in new producer Mammoth and
acquired UK independent producer 12 Yard.

Our Turnaround strategy is not founded on any assumptions of regulatory relief.
However significant regulatory relaxation is overdue in commercial public
service broadcasting (PSB). Ahead of the launch of the Ofcom PSB review, ITV set
out its detailed plans for modernising regional news. We recognise that these
will have implications in terms of regional staffing, but we believe that it is
right to be open about our plans and their rationale. Our plans would ensure
that every home in the country retains access to a high-quality ITV regional
news service from 2009, whilst maximising investment in original network
programming, where the core public interest lies.

It should be remembered that terrestrial television has always faced limitations
in delivering at the sub-regional and local levels with multiple unresolved
boundary issues stretching back over decades. Broadband delivery faces no such
technical limitations and puts regional choice with the viewer, rather than the
broadcaster. itvlocal.com was rolled out across all our regions during 2007,
supplementing our on-air regional coverage and allowing us to target local
classified and display advertising, a  new market for ITV.

In other areas, regulatory reform remains imperative.  In September 2007, the
OFT confirmed its intention to review the Contract Rights Renewal ('CRR')
mechanism which has applied to the sale of ITV1 advertising since 2003. Our
improved on-screen performance in 2007 has mitigated the worst effects of CRR.

But in a rapidly changing market, ITV still remains unduly restricted: ITV now
faces competitors who didn't even exist in 2003. We look forward to
participating in the review process over the coming year.

2007 was also a year when trust in broadcasting came to the fore. All the major
UK broadcasters faced issues over their operation of premium rate services (PRS)
and allegations of misleading viewers. ITV acted swiftly when problems started
to emerge, suspending all our PRS activities until systems were independently
assessed by Deloitte & Touche LLP ('Deloitte'). We commissioned Deloitte to
undertake a review going back over two years. Where problems have been
established, we have made full disclosure, offered full recompense to viewers
and improved our systems. We have committed to donating in full to charity any
viewer refunds that are not claimed.

ITV is also co-operating fully with Ofcom's inquiry into the PRS incidents on
ITV channels and we await the outcome of their adjudication. GMTV, which is 75%
owned by ITV, faced serious PRS issues of its own in 2007 relating to the
conduct of its on-screen competitions and received a substantial fine from the
regulator.

Such incidents for the most part appeared to stem from misguided editorial
judgments taken with a view to maximising viewer enjoyment, not from any desire
to maximise PRS revenues. Nonetheless we let our viewers down and that is
inexcusable. We are determined to restore public trust in ITV and UK
broadcasting as a whole. The Remuneration Committee of the Board has taken
account of PRS issues in calculating annual bonuses awarded to the executive
team.

I am confident that the business is in better shape going into 2008. The launch
of the new ITV1 schedule shows our commitment to innovation. We have launched a
succession of ambitious dramas, from Honest to the genre-busting Moving
Wallpaper/Echo Beach. We have brought News at Ten back to ITV1. The weekend
schedule is underpinned by great entertainment, from Dancing on Ice to Harry
Hill's TV Burp.  As the year progresses, football fans will have Euro 2008  and
England's home games to enjoy on ITV, as well as the Champions League.

Our valuable production business needs to grow and deliver programmes for ITV,
other UK broadcasters and the international market. We have the considerable
advantage of being an integrated producer/broadcaster. Our emphasis needs to
shift from producing linear programmes for one-off transmission on a single
channel to '360 degree' exploitation of the lifetime value of our content,
across multiple platforms and territories. We will also be investing for the
future: in monetising itv.com; in building on the success of ITV2; and in
rolling out an HD service as part of our Freesat project with the BBC.

BSkyB's acquisition of a 17.9% stake in ITV plc was subject to a Competition
Commission review in 2007. In January 2008, the Secretary of State confirmed
that BSkyB would be required to reduce its stake to below 7.5%, although the
decision is being appealed. The Board will continue to act in the best interest
of all shareholders.

The Board has reviewed the level of the final dividend in light of the
performance of the Company over the course of 2007, current trading conditions
and the outlook going forward. In 2007, ITV plc NAR fell by 0.3% on the previous
year with strong growth in ITV digital channels offsetting a decline in ITV1
revenues. In the first quarter of 2008, ITV plc NAR is expected to be up around
1.9%, growing ahead of the total market.

In the light of this trading context and the Company's stated policy of building
back to 2 to 2.5 times dividend cover in the medium term, the Board proposes
that the final dividend for  the year should be held at 1.8 pence per share to
be paid on 1 July 2008 to shareholders on the register on 18 April 2008.

In February 2007 Sir James Crosby was appointed senior independent director and
Chairman of the Nomination Committee. Agnes Touraine and Heather Killen joined
the Board in August 2007 and John Ormerod in January 2008. Sir Robert Phillis
resigned from the Board in 2007 and John McGrath in early 2008. The Board is
grateful to Bob and John for their significant contribution to ITV plc over the
last few years.

In February 2008, Dawn Airey and Rupert Howell were appointed directors,
providing strengthened executive representation at board level. We confirmed our
intention to appoint a dedicated Finance Director, freeing up John Cresswell to
focus on his responsibilities as Chief Operating Officer. The Board has also
extended my appointment as Executive Chairman to the end of 2010. All of my
contractual terms - including the terms and period of the Turnaround Incentive
Award - remain unchanged. The decision provides my management team and I with
the space to focus on the job to be done over the next crucial years, without
distraction.

ITV made measurable progress over the course of 2007.  The operational
performance in the year was better than  it has been for some time. We have also
started to lay the foundation for sustainable growth in the future. I would like
to thank all of my colleagues at ITV for their considerable effort, dedication
and creativity in serving the needs of our viewers, advertisers and
shareholders.

Michael Grade
Executive Chairman



                                Operating review

It was a tough year for ITV and all UK broadcasters, with the issues of trust
coming to the fore, in particular in the context of premium rate services 
('PRS').

ITV's strategy was set out publicly in September 2007, following an in-depth
analysis of the market, competitive trends and the opportunities and challenges
facing ITV. The strategy is reflected in a new segmental structure for the
Company, incorporating Broadcasting, Global Content and Online.

Broadcasting remains the primary revenue driver of the Company with ITV1 in
particular still delivering over 50% of the Company's total revenues in 2007.
Broadcast incorporates all our advertising funded television channels. Simon
Shaps is Director of Television, responsible for commissioning and scheduling
across all ITV channels. In February 2008 we announced that Peter Fincham,
former controller of BBC1, would be taking over from Simon later this year. In
November, Rupert Howell took up a new position as Managing Director of Brand and
Commercial, responsible for sales and marketing across all our channels.
Together with our advertising-funded channels, for reporting purposes,
Broadcasting incorporates the wholly owned SDN which is a platform business
operating a digital terrestrial multiplex.

Our strategy is driven by our content. Global Content was created during 2007 to
pull together all production for ITV and other UK broadcasters; international
production and distribution; merchandising and other commercial ventures. Dawn
Airey took up a new position as Managing Director of Global Content in October
2007, working closely with John Whiston as Director of ITV Productions.

Finally Online incorporates our consumer-facing online activities, notably
itv.com, itvlocal.com, Friends Reunited and the new broadband joint venture with
BBC Worldwide and Channel 4.  Our Online division is headed by Jeff Henry as
Managing Director, of ITV Consumer.

Over the course of 2007, we have also significantly strengthened core central
functions. Carolyn Fairbairn joined the Company from McKinsey as Director of
Strategy and Development and  is responsible for strategy, development and
regulation across  the Company. Mark Gallagher joined the Company from Camelot
as Director of Group Corporate Affairs and has established an integrated
communications and public affairs function. Andrew Garard also joined as Group
Legal Director.

Outside the core divisions, ITV retains a number of businesses identified as
non-core and candidates for sale or exit.  These include Carlton Screen
Advertising, Screenvision and broadband ventures related to football clubs in
which ITV no longer retains a stake.

Key operational developments in the major business areas and with respect to
these non-core activities in 2007 are described in the following sections.

Broadcasting

2007 saw improvement in ITV1's schedule and performance, with ITV's digital
family of channels continuing to grow.

Following steep declines in 2006, the performance of the ITV1 schedule was more
stable in 2007. In absolute terms, ITV1 actually delivered a higher level of
commercial impacts - individual viewings of 30 second commercials - in 2007
compared to 2006. Key long-running programmes - in particular Coronation Street
and Emmerdale in peak and This Morning and The Jeremy Kyle Show in daytime -
continued to perform well, underpinning the schedule as a whole. Performance in
the afternoons improved with the introduction of a new schedule architecture
which saw ITV's children's programming focused on the Citv channel and on
weekends on ITV1. The channel's sporting output was boosted by the explosive
debut season of Lewis Hamilton in Formula 1, England defying the odds in the
Rugby World Cup, and the enduring excitement of Champions League football.

The ITV1 schedule was refreshed with a number of successful new shows, including
Britain's Got Talent, Primeval and Kingdom, all of which return in 2008. In
total ITV1 launched 23 new shows in 2007 which secured audiences in excess of 5
million viewers (2006: 32 new shows).

ITV News continued to set the agenda with award winning programmes, reporting
and special broadcasts. The year began successfully with ITV News picking up
four prestigious Royal Television Society Journalism awards, including the
Programme of the Year award for the ITV Evening News. Following January's 'Big
Melt' climate change report from Antarctica, ITV News continued its on location
reports with a week long 'Iraq Week' special in March and 'Zimbabwe Week' in
September - the latter including interviews with Prime Minister Gordon Brown and
Archbishop Desmond Tutu.

ITV1 remained the leading free-to-air commercial channel in the UK, with a lead
over all channels (including BBC1) in peak time between 7.00 pm and 10.30 pm in
the evening. Across all time, ITV1 recorded its best year-on-year performance in
share of viewing terms since 2001, with a fall of just 2.1% year-on-year. This
compared to losses of 3.2% at BBC1, 2.9% at BBC2, 10.3% at Channel 4 and 10.1%
at five.

ITV1's volume of commercial impacts was up 1.1% year-on-year across all adults
and was up 1.3% in terms of the ABC1 adults prized by advertisers. However
ITV1's share of commercial impacts (SOCI) - the core currency for advertisers
under the CRR mechanism - fell to 32.0% compared to 33.1%in 2006.  This is
because the total universe of commercial impacts continues to grow rapidly as
the UK transitions to digital and the BBC loses viewing in the process. However
this SOCI loss of 3.3% represents a significant improvement over 2006, when ITV1
registered a decline of 10.5%.

As important as on-screen progress during the year, ITV1 also laid the
foundation in 2007 for the new schedule launch in January 2008. In March 2007
ITV secured the terrestrial rights to FA Cup football and England home
internationals from the 2008/09 season. In Autumn 2007, ITV confirmed that News
at Ten would return in 2008 with Trevor McDonald joined by Julie Etchingham and
Mark Austin. A raft of new programmes and returning favourites were commissioned
during the year to hit ITV1 screens in early 2008. These included exciting new
dramas Honest, The Fixer and Rock Rivals, returning hits including Kingdom,
Harry Hill's TV Burp, Primeval and Dancing On Ice.

Beyond ITV1, ITV's digital channels also had a successful year in 2007. ITV2
moved into the next phase of its development with increased commissioning of
exclusive content. Secret Diary of a Call Girl starring Billie Piper peaked with
an audience of 2.2 million in September, an exceptional audience for a
digital-only channel. Investment in such channel-defining, original content has
further cemented ITV2's proposition as a bespoke channel for younger audiences,
distinct from and complementary to ITV1. ITV2's share of viewing across 2007 in
multichannel homes was 2.2%, up 11.9% on 2006. ITV2 was named non-terrestrial
channel of the year at Broadcast magazine's awards and at the 2007 Edinburgh
International Television Festival.

ITV3 was the UK's ninth most popular channel for 2007 with a share of viewing of
1.4% in multichannel homes. ITV4 grew its audience share in multichannel homes
by almost 25% over the year as high quality sporting events in particular
attracted large audiences to the channel. In its first full year of broadcasting
the Citv channel played an important role in reaching children in digital homes
and in particular on the DTT platform, where it is the only free-to-air
commercial children's channel. Citv represents a far more effective means of
reaching children than children's programming on ITV1, which reduced in volume
in 2007. However the Citv channel was impacted by regulatory restrictions on
food advertising to children, which came into force in 2007 and apply in full to
children's channels from 2008. The ITV Play digital channel was closed in March
2007. Revenues had been impacted by the PRS issues referred to earlier. Closure
of the channel freed up DTT spectrum which ITV has redeployed to launch the
time-shifted ITV2+1 service on the platform.

Between them, ITV's digital channels were responsible for 37.5% of the growth in
multichannel viewing in the UK during the year and overall advertising revenue
from our digital channels grew by 33% to £209 million. The contribution from
ITV's digital channels meant that ITV overall increased its volume of commercial
impacts year-on-year by 3.2%. In SOCI terms, ITV plc channels accounted for
41.7% of all UK commercial impacts (2006: 42.2%), a 1.2% decline (2006: 5%).

ITV's strong on-screen performance in 2007 was all the more impressive as it was
delivered on approximately the same level of investment in programming as 2006.
ITV has sought to improve schedule efficiency further by developing more
long-running, returnable series, rather than one-offs or short-run series.  ITV
maintains tight control on costs and is one of the most efficient broadcasters
in the UK as measured by the relationship between programme spend and audience
share.

ITV's performance on-screen also allowed the Company to optimise its advertising
revenues across the year. ITV1 advertisers could reduce their share commitment
to ITV1 in 2007 by over 10% on average under the CRR ratchet because of ITV1
performance in 2006. However the channel was well-placed to attract short-term
advertising revenues as ITV1 fared better than its core competitors Channel 4
and five across the year. In 2007 ITV1 accounted for 498 out of the top 500
shows on UK commercial television (2006: 499 out of 500), making it the UK's
most effective brand-building channel for advertisers by some margin. ITV
television advertising revenues fell by 0.3% in 2007 compared to an 8.4% drop in
2006 and against total growth in the market in 2007 of 3.1%.

A strong on-screen performance in 2007 means that ITV1 enters 2008 with the
lowest CRR ratchet since merger. Rather than reducing their share commitment to
ITV1 by over 10% as applied going into 2007, advertisers and agencies are
entitled only to reduce their commitment by around 4% in 2008. With ITV1
schedule changes seeking to maximise audience levels in crucial peak viewing
hours and ITV's commercial competitors continuing to lose audience share, ITV
will compete fiercely for revenues from advertisers and agencies over and above
their contractual minimum. The continuing growth, in audience share and SOCI
terms, of ITV's digital channels also positions them well to continue strong
growth in revenue terms over the course of 2008, depending on conditions in the
wider market.

The wholly-owned DTT multiplex operator, SDN, enjoyed a successful year in 2007.
Early renewal of a significant contract with QVC underlined the ongoing strength
of the Freeview capacity market, and provided for improved terms for SDN.
During the course of 2007, ITV also confirmed that it had contracted with the
transmission operator Arqiva to deliver the DTT transmission infrastructure that
will take the channels occupying the capacity licensed to ITV and to SDN through
the switchover process. Post-switchover ITV's core capacity will reach around
98.5% of the UK with SDN channels available to over 90% of the UK. The
switchover process begins in earnest in 2008 and confirmation of the
post-switchover multiplex configuration (in particular for HD and PSB channels)
is also expected in 2008, which should be a further positive for the platform
and for SDN.  In 2007 ITV also confirmed a joint venture with the BBC to launch
a 'Freesat' subscription-free digital satellite service in 2008.  The new
service will include free-to-air HD services from ITV and the BBC.

Global Content

Global Content registered a number of significant achievements in 2007 and
profits increased 2% to £90 million. But while profits were maintained, revenues
were down in particular because sufficient and consistent commissions were not
secured from ITV and other UK channels.

The second series of Dancing on Ice proved a huge success for ITV1, attracting
consistently high audiences across its nine week run. Overall, Dancing on Ice
secured an average audience of  8.5 million with a 37.4% share in its Saturday
night slot (2006:  9.5 million, 41% share). Other entertainment successes
included the 7th series of I'm A Celebrity...Get Me Out of Here and the 7th
series of Ant and Dec's Saturday Night Takeaway.

Lewis returned to ITV1 on Sunday nights as a series. With an average audience of
8.3 million and a 34% share, the series was one of ITV1's top performing dramas
across the year. The ITV premiere of the Oscar-winning movie The Queen delivered
an average audience of 8.7 million and a 38% share. However drama production for
ITV overall fell short of target. Personnel changes and a restructuring during
the course of 2007 aim to return the business to growth going forward.

ITV-produced soaps continued to draw impressive audiences in 2007: Coronation
Street was the top-performing show in the UK in 2007, excluding sport, with the
highest rating episode attracting an audience of 13.1 million, and a 49.5% share
(2006: 12.6 million viewers, 52.6% share). Throughout the year it was the UK's
top performing soap, averaging an audience of 10.1 million and a 44.6% share
(2006: 10.1 million viewers, 46% share).

Emmerdale attracted an average audience of 7.5 million and  a 37.2% share (2006:
7.6 million, 38.4% share), and was scheduled against the BBC's biggest show,
Eastenders, on 15 occasions in 2007. In 2008, that head-to-head battle becomes a
fixture, with the new ITV1 schedule pitting Emmerdale against Eastenders every
Tuesday evening.

Across the year, ITV Productions secured around 50% of ITV1 commissions, but was
slightly down on the previous year, as the network decided not to recommission a
number of established programmes - in particular dramas - as part of its
schedule changes. The success of ITV's content-led strategy relies in part on
ITV Productions growing its share of ITV1 commissions, with a target for the
Global Content division of 75%.

The Turnaround strategy also requires significant growth in commissions for UK
broadcasters other than ITV. 2007 again saw a significant volume of ITV
production for other UK broadcasters, including The Street, University
Challenge, Come Dine With Me and Countdown. However UK production beyond ITV was
down 34% year-on-year, with external drama falling short of target.

However ITV can face the challenges of delivering growth in Global Content with
some confidence, as 2007 once again provided ample evidence of the quality of
the Company's output and the creativity of its staff.

ITV's Turnaround strategy targets a rate of expansion in Global Content that
will not be delivered solely by organic growth.  ITV has earmarked up to £200
million of proceeds from disposals for content-related acquisitions and has also
committed to supplementing existing in-house operations with a variety of
innovative partnerships and flexible structures to ensure that ITV continues to
tap the widest range of UK production talent. In July 2007, ITV announced that
it would be taking a 25% stake in Mammoth, a new drama producer set up by a team
with an established track record in the genre.

In December 2007 ITV confirmed the acquisition of 12 Yard, an independent
producer specialising in gameshow and quiz show formats and production.
Gameshows and quiz shows represent perhaps the most internationally saleable
genre of programming, but have not been an area of strength for ITV
historically.  The majority of ITV1 gameshows and quiz shows, from Who Wants to
Be a Millionaire to Goldenballs, are not in-house productions. Even where ITV
has produced or co-produced such shows itself - for example, with Countdown and
Gameshow Marathon - it has tended to rely on formats from third party producers.
It is hoped that the acquisition of 12 Yard will help reverse this trend, with a
number of possible new commissions for ITV1 under discussion.

Internationally, 2007 was a strong year for returning formats such as First 48,
Celebrity Fit Club and Hell's Kitchen with Gordon Ramsay in the US, Das Perfekte
Dinner (Come Dine With Me) in Germany, and Dancing with the Stars in Australia.
Distribution revenues at ITV Worldwide were impacted by the reduction in UK
commissions and the exchange rate. Nonetheless sales were registered with TV
broadcasters, home entertainment partners and new media platforms in more than
250 countries worldwide. Top sellers in 2007 included Hell's Kitchen USA, Agatha
Christie's Marple and Northanger Abbey and Mansfield Park from ITV's Jane Austen
season.  Format sales included Saturday Night Takeaway, sold to Hunan TV in
China which debuted in early 2008 with an audience of 55 million viewers.

Trading for Granada Ventures was challenging with price competition in areas
such as DVDs eroding margins and turnover, even where volumes were maintained.
There were strong campaigns around classic ITV brands like Sharpe and Inspector
Morse, and strategic acquisitions in the children's and comedy market. Mobile
and online gaming products were released for Catchphrase, Bullseye and
Countdown, with ITV Classic Gameshows released for Xbox, Nintendo, Sony
Playstation and PSP. A number of digital 'download to own' deals were agreed in
2007 and this will be a major initiative in 2008 exploiting our available
catalogue.

Online

2007 was a crucial year for Online with the relaunch of a video-enabled itv.com,
full national roll out of itvlocal.com, continuing growth at Friends Reunited,
and the agreement of joint venture terms for a broadband archive service with
the BBC and Channel 4.

In 2007, itv.com received a complete functional and visual overhaul, enabling it
to compete with other major entertainment sites. Now equipped with a broadband
video player and a much-expanded operations and editorial team, the site offers
channel simulcasts for ITV1, ITV2, ITV3 and ITV4 as well as a 30-day catch-up
service and access to archive material. As a result of this new look and feel,
the site has achieved substantial growth, with unique users per calendar month
breaking through the 6 million barrier for November.

Moving forward, itv.com is developing key partnerships with other online players
and the first exclusive made-for-broadband commissions. A partnership with MSN
for the duration of I'm a Celebrity...Get Me Out Of Here! in November saw
exclusive clips  on the MSN portal in exchange for cross-promotion of itv.com.

itv.com launched with Web Lives, an innovative series of short,
documentary-style programmes made by Roger Graeff. In 2008 there will be further
commissions, including a 12-part series of drama shorts linked to new ITV1
dramas Moving Wallpaper and Echo Beach, called The Mole.

2007 saw the completion of the full roll-out for our regional broadband service
itvlocal.com. From October, the service has been available in all ITV regions,
and in December, it attracted over 750,000 unique users. itvlocal.com is
modernising ITV's delivery of regional news, expanding the viewing and reach of
our regional programming online. Almost 70% of visitors are coming to
itvlocal.com for local news before the main regional news programme airs on ITV1
at 6pm.

itvlocal.com has over 1,000 hours of news, weather, short films, documentaries,
viewer videos, and other material available to be viewed on demand by broadband
viewers.

The Friends Reunited group of sites continued to grow during 2007 with revenues
increasing by 36% on the previous year. Worldwide, Friends Reunited currently
has 19 million registered members (2006: 17 million), whilst Genes Reunited has
7.9 million (2006: 5.8 million). One new name is added to Genes Reunited every
second and a new member joins the Friends Reunited Dating site every two
minutes.

Following our recent strategy review, there are plans in development for much
greater integration with each Friends Reunited business and itv.com, including a
reduced emphasis on subscription fees for some parts of the sites.

In November 2007, ITV announced the creation of a commercial three-way joint
venture with BBC Worldwide and Channel 4 to launch an on-demand content service
in 2008. The service will bring together over ten thousand hours of the UK
broadcasters' current and archive programming from the UK's three leading
broadcasters. Content will be available to be both streamed and downloaded with
viewers able to watch for free, rent or buy.

Going forward, itv.com will provide access to catch-up programming and clips,
and will carry exclusive simulcasts of ITV channels, whilst the joint venture
broadband service will be the home of the ITV archive.

Non-core businesses and efficiency savings

ITV continued its programme of non-core disposals in 2007, selling stakes in
Arsenal and Liverpool football clubs, MUTV and the ITFC sub-titling business.
ITV retains stakes in broadband services associated with Arsenal and Liverpool,
but is seeking to dispose of these businesses during the course of 2008.

Carlton Screen Advertising had a challenging year in 2007. Notwithstanding
healthy cinema attendances, CSA was adversely affected by falling revenues and
onerous contractual commitments, which led to a continuing trading loss. ITV
took an exceptional operating charge of £9 million and has entered into a
dialogue with cinema operators and other parties regarding the future of the
business.

Our US screen advertising joint venture with Thomson enjoyed another year of
impressive double-digit revenue and profit growth. The installed installation
pipeline of digital screens is currently over 7,000 out of a total screen count
of just under 15,000. Our European cinema advertising business, also a 50/50
joint venture with Thomson, experienced a year of consolidation. Total revenues
were constant year on year, with strong revenue growth in France offset by a
disappointing performance by the Belgian business.

In 2006 we announced a programme of efficiency savings across the Company aimed
at achieving a cost reduction run rate of £41 million a year by 2008. This
programme is on track with an annualised £29 million of savings delivered in
2007. Continuing efficiency gains and disposal of non-core businesses remain a
priority for the business in the context of our turnaround strategy. Savings and
disposals will fund the investment and acquisitions that are necessary to
deliver sustainable growth.

Efficiency savings 2007-08
                                                                                                      2007     2008F
                                                                                                        £m        £m
Back Office                                                                                             11        15
Property                                                                                                 1         1
Systems and Technology                                                                                   4         7
Transmission                                                                                             6         7
Staff related                                                                                            4         6
Procurement                                                                                              3         5
Cumulative total                                                                                        29        41
Cumulative cost of change                                                                               15        26

Note: Efficiency gain run-rate to end of 2007 and company forecasts to 2008.


                                Financial review

Statutory results for the year ended 31 December 2007

Total revenue for the year ended 31 December 2007 was 5% lower at £2,082 million
(2006: £2,181 million). Operating profit decreased to £192 million (2006: £264
million) with operating profit before amortisation and exceptional items down
17% at £311 million (2006: £375 million).

Our reportable segments have been redefined in 2007 following the adoption of
IFRS 8, with 2006 numbers restated as appropriate.

                                                                                             2007     2006   Change
                                                                                              £m        £m       £m
Broadcasting revenue                                                                       1,738     1,797      (59)
Broadcasting EBITA                                                                           244       296      (52)
Global content revenue                                                                       244       281      (37)
Global content EBITA                                                                          90        88        2
Online revenue                                                                                33        23       10
Online EBITA                                                                                 (12)        1      (13)
Other revenue                                                                                 67        80      (13)
Other EBITA                                                                                  (11)      (10)      (1)
Total revenue                                                                              2,082     2,181      (99)
Total EBITA                                                                                  311       375      (64)

Note: EBITA is stated before operating exceptional items.

The table above includes the revenue of disposed businesses (021 and Granada
Learning) of £8 million in 2006 within the 'Other' Segment. These businesses
were sold in 2006.

Broadcasting

Broadcasting revenues

Broadcasting revenues comprise NAR, sponsorship income, interactive revenues
(PRS and Red Button), ITV Play, SDN and other revenues.

Total ITV plc NAR decreased by 0.3% during the year to £1,489 million (2006:
£1,494 million).

                                                                                             2007     2006   Change
                                                                                               £m       £m       £m
ITV1                                                                                        1,224    1,281      (57)
Multichannel NAR                                                                              209      157       52
GMTV                                                                                           56       56        -
ITV plc NAR                                                                                 1,489    1,494       (5)


ITV1's NAR in the year was £1,224 million (2006: £1,281 million), £57 million
lower than 2006. This reduction was almost offset by the strong performance of
ITV2, ITV3 and ITV4 which, together with Men and Motors and Citv, contributed
33% year-on-year growth of £52 million, resulting in total NAR of £209 million
(2006: £157 million) across these channels.

ITV's NAR is a function of audience share which is measured in terms of
commercial impacts, prevailing advertising market conditions and television's
share of that market.

2007 was a good year for the television advertising market, with growth of 3.1%
compared to a decline of 4.9% in 2006. The decrease of 4.4% in ITV1's NAR was a
significantly better performance than in the prior year and was achieved despite
the considerable effect of CRR following the 10.5% decline in ITV1 SOCI in 2006.
ITV1 adult SOCI declined just 3.3% to 32.0% in 2007. In 2007, ITV family's adult
SOCI on UK television was 41.7% (2006: 42.2%).

Sponsorship income increased by 6% in 2007 to £56 million (2006: £53 million)
due to price increases as the cost of sponsorship moves closer to airtime value
and also the successful sponsorship of new programmes and events, such as the
2007 Rugby World Cup.

SDN revenues grew strongly in the year, increasing by 44% in 2007 to £36 million
(2006: £25 million).

Other broadcasting revenues of £157 million (2006: £225 million) include airtime
sales on behalf of third-parties, sales of ITV programming by the ITV Network
Centre to Channel 3 licences not owned by ITV and ITV Play and interactive
transactions including those from GMTV. Revenues were lower than in the prior
year largely because of the significant reduction in PRS revenues.

Broadcasting schedule costs

Total ITV schedule costs increased by £17 million in 2007 to £1,087 million
(2006: £1,070 million). This breaks down as follows:

                                                                                             2007     2006   Change
                                                                                               £m       £m       £m
ITV1                                                                                          837      840       (3)
Regional news and non-news                                                                    114      119       (5)
Total ITV1 costs                                                                              951      959       (8)
ITV2, ITV3, ITV4, Citv, M&M                                                                   101       75       26
GMTV                                                                                           35       36       (1)
Total schedule costs                                                                        1,087    1,070       17


Licence fees

Licence fees comprise both a fixed annual sum (the cash bid) and a variable
element representing a percentage of the Group's ITV1 and GMTV NAR and
sponsorship income (PQR Levy). The PQR Levy is reduced by the percentage of
homes which receive ITV1 in digital format. The digital licence rebate for 2007
is calculated on a weighted average digital penetration of 78% (2006: 70%).

                                                                                            2007     2006    Change
                                                                                              £m       £m        £m
Cash bid payment                                                                               4        4         -
PQR Levy                                                                                     180      187        (7)
Digital rebate                                                                              (140)    (140)        -
Total                                                                                         44       51        (7)

The payment will continue to fall as digital penetration increases.

In 2006 the digital rebate includes £6 million relating to the agreement of
prior year returns with Ofcom.

Broadcasting EBITA

The Broadcasting segment EBITA before exceptional items for 2007 fell by £52
million to £244 million (2006: £296 million). This was primarily due to a
decline in ITV1 NAR reflecting 2006 on-screen performance, PRS issues and
increased investment in digital channels.

Global Content

Global Content revenues                                                                      2007     2006   Change
                                                                                               £m       £m       £m
Production for other broadcasters                                                             111      138      (27)
Distribution and exploitation                                                                 114      123       (9)
Resources                                                                                      19       20       (1)
External revenues                                                                             244      281      (37)
Internal revenues                                                                             320      351      (31)
Total Global Content revenues                                                                 564      632      (68)


The table above includes revenues from 12 Yard, acquired in December 2007 and
Jaffe/Braunstein Entertainment, acquired in May 2007. These totalled £7 million.

Global content revenue includes original productions for the UK and
international markets, the distribution and exploitation of internally generated
and acquired rights, and studios and facilities revenue.

Programming made by ITV Productions for ITV channels is not included in the
reported total revenue as it represents an internal programming cost of sale and
in 2007 this internal programming amounted to £320 million of ITV network
programme spend (2006: £351 million).

In 2007, total external sales of £244 million (2006: £281 million) included
original productions for other broadcasters of £111 million (2006: £138
million), distribution and exploitation sales of £114 million (2006: £123
million) and revenue from the hire of studio and technical facilities of £19
million (2006: £20 million). The fall in revenues was partly due to the
refreshment of the ITV1 schedule which led to the ceasing of production of eight
ITV Productions shows and the termination of children's production. Personnel
issues also temporarily affected drama commissions.

Global Content profits were maintained in 2007 at £90 million (2006: £88
million).

Online

Online revenues continued to grow in 2007 and totalled £33 million for the year
(2006: £23 million). This is made up of the following revenue streams:

                                                                                             2007     2006    Change
                                                                                               £m       £m        £m
itv.com and other*                                                                             11        7         4
Friends Reunited                                                                               22       16         6
Total Online revenues                                                                          33       23        10

* includes itvlocal.com, ITV Mobile and other revenues.


Revenues increased by 44% in the year, with major contributions from Friends
Reunited and itvlocal.com. Online 2007 EBITA before exceptional items fell to a
£12 million loss (2006: £1 million profit) due to the set up costs of
relaunching itv.com and the full roll out of itvlocal.com nationally.

Other

Revenues from outside of the main segments for 2007 were revenues from Carlton
Screen Advertising (CSA) of £67 million (2006: £72 million). In 2006, £8 million
of revenue was earned from Granada Learning and 021. In 2007 CSA EBITA
contribution was a loss of £11 million due to a decline in cinema advertising
revenues and high minimum guarantee payments (2006: loss of £10 million,
including a £3 million loss from Granada Learning).

Exceptional items

The operating exceptional items in the year total £35 million and include £18
million relating to PRS fines and reimbursements costs, and £9 million CSA
onerous contract provision as a result of falling revenues and minimum guarantee
commitments and £8 million reorganisation and integration costs relating to the
efficiency programme.

Net financing costs

Financing income                                                                                      2007      2006
                                                                                                        £m        £m
Interest income on bank deposits                                                                        30        20
Expected return on defined benefit pension plan scheme assets                                          152       144
Change in fair value of financial liabilities designated at fair value through profit or loss           14         -
Foreign exchange gain                                                                                    -         4
Other interest receivable                                                                                4         2
                                                                                                       200       170


Financing costs                                                                                      2007      2006
                                                                                                       £m        £m
Interest expense on financial liabilities measured at amortised cost                                  (54)      (35)
Change in fair value of financial liabilities designated at fair value through profit or loss           -       (31)
Foreign exchange loss                                                                                 (42)        -
Interest on defined benefit pension plan obligations                                                 (134)     (126)
Other interest expense                                                                                 (3)       (4)
                                                                                                     (233)     (196)
Net financing costs                                                                                   (33)      (26)

The increase in net financing costs is primarily due to the full year impact of
the £250 million and €500 million bonds issued in October 2006, partially offset
by fair value gains on interest rate swaps.  These gains include £42 million of
cross-currency swap movements which offset the foreign exchange loss on the €356
million and €500 million bonds.

Investment income

Investment income of £1 million comprises dividend income from our holding in
SMG plc. The 2006 £3 million of income also included dividends from our former
holding in Seven Network in Australia.

Gain on sale of properties

The £9 million gain on sale of properties in the year principally arose from the
sale of properties in Southampton, Birmingham and Newbury.

Gain on sales of non-current assets and investments

During the year the disposal of non-core businesses and investments resulted in
a gain of £43 million. The sale of the investment in Liverpool Football Club and
Athletic Grounds plc resulted in a gain of £7 million. The sale of the Group's
investment in Arsenal Holdings plc, along with an option over the Group's 50%
interest in Arsenal Broadband Ltd, resulted in a gain of £28 million.
Negotiations for the sale of Arsenal Broadband Ltd are continuing. A profit on
sale of £5 million was obtained from the sale of ITFC and £3 million from the
disposal of our investment in MUTV. In addition to the above, the Group also
disposed of certain assets connected to a transmission outsourcing arrangement
for £4 million resulting in a nil gain or loss being booked.

Offsetting these disposal profits is a £26 million impairment relating to our
holding in SMG plc which has experienced a significant decline in its share
price since October 2007.

Tax

The effective rate of tax on profit before tax is 27%. The underlying rate of
tax on operating profits is 31% as shown below.
Underlying rate of tax                                                                                           £m
Operating profit before exceptional items, amortisation and share of profits of joint ventures and
associates
- Profit before tax as reported                                                                                 188
- Exceptional items (net)                                                                                         9
- Amortisation                                                                                                   84
- Share of profits of joint ventures and associates                                                              (2)
                                                                                                                279
Underlying tax charge
- Tax charge as reported                                                                                         50
- Net credit for exceptional items                                                                                6
- Credit in respect of amortisation                                                                              19
- Credit in respect of prior period items                                                                        11
                                                                                                                 86
Underlying rate of tax                                                                                          31%

Earnings per share

Basic earnings per share are 3.5 pence (2006: 5.5 pence). Adjusted basic
earnings per share before exceptional items, amortisation and tax adjustments
are 5.0 pence (2006: 6.3 pence).

Dividend

The Board is proposing a final dividend of 1.8 pence per share which is
unchanged on the 2006 dividend. The total dividend proposed for the period is
therefore 3.15 pence which is flat year-on-year and is covered 1.6 times by the
adjusted basic earnings per share (before exceptional items, amortisation and
tax adjustments) of 5.0 pence.

Intangible assets

Total intangible assets at 31 December 2007 are £3,873 million (2006: £3,895
million) being principally goodwill and acquired intangible assets. Goodwill
balances are not amortised but are instead subject to annual impairment testing.
Other intangible assets are amortised over their useful lives. An impairment
charge of £28 million has been recognised in 2007 relating to CSA as a result of
falling revenues and minimum guarantee commitments. £20 million of the
impairment relates to goodwill and the remaining £8 million to other intangible
assets. The total amortisation charge for the year including the CSA impairment
is £84 million (2006: £76 million). The goodwill and intangible asset additions
in the year principally relate to the acquisitions of 12 Yard and Jaffe/
Braunstein Entertainment and capitalised software development costs.

Cash flow and net debt

The cash generated from operations was £286 million (2006: £342 million) and was
down on the prior period due to a £64 million decrease in operating profit
before exceptional items and amortisation and a working capital outflow of £29
million versus an outflow of £36 million in 2006. The 2007 working capital
outflow was primarily due to payments for acquired US films and series.

Net cash interest paid on the Group's net debt position was £62 million. Net tax
receipts of £18 million reflect taxation repayments from prior periods more than
offsetting payments made relating to the current period. The equity dividends
paid comprise the 2006 interim and final dividends of £52 million and £70
million respectively. Expenditure on plant, property, equipment and intangible
assets totalled £59 million. This included the investment in our new itv.com
site. During the year the Group acquired 12 Yard for an initial net cash
consideration of £26 million and a 51% share in Jaffe/Braunstein Entertainment
for £3 million. Loans granted to associates and joint ventures include loans to
Freesat, ITN and Mammoth.

Proceeds from the sale of assets held for sale of £94 million, sale of
subsidiaries (net of cash disposed) of £5 million and sale of property, plant
and equipment of £4 million are from the disposal of the following assets:
                                                                                                                 £m
Liverpool Football Club and Athletic Grounds plc                                                                 17
Arsenal Holdings plc and an option over the Group's
investment in Arsenal Broadband Limited                                                                          50
MUTV Limited                                                                                                      3
Properties                                                                                                       20
Transmission assets                                                                                               4
Assets held for sale                                                                                             94

Independent Television Facilities Centre Limited                                                                  5
Sale of subsidiaries (net of cash disposed)                                                                       5

Properties                                                                                                        4
Sale of property, plant and equipment                                                                             4
Total proceeds                                                                                                  103



The principal movements in net debt in the year are shown in the table below:
                                                                                                      £m        £m
Net debt at 31 December 2006                                                                                  (734)
Cash generated from operations                                                                       286
Net interest paid                                                                                    (62)
Taxation net receipts                                                                                 18
Equity dividends paid                                                                               (122)
Expenditure on property, plant,
equipment and intangible assets                                                                      (59)
Acquisitions of subsidiaries (net of cash)                                                           (29)
Loans granted to associates and joint ventures                                                       (10)
Proceeds from assets held for sale, property,
plant and equipment and sale of subsidiaries                                                          103
Other movements                                                                                      (26)
                                                                                                                99
Defined benefit pension deficit funding                                                                        (33)
Net debt at 31 December 2007                                                                                  (668)


During the year, a €356 million exchangeable bond and a £200 million Eurobond
matured resulting in a combined cash outflow of £441 million.

Pensions

The Group's pension schemes are run independently by the schemes' trustees. All
pension scheme assets are administered separately by the trustees using a number
of external fund managers and custodians.

Defined contribution scheme arrangements are offered to all new joiners and a
choice of investment styles is available to them.

Defined benefit schemes are funded on a long term basis with advice from the
scheme actuaries. Actuarial valuations of the assets and liabilities of the
defined benefit schemes (upon which funding is based) are carried out by the
trustees at least every three years. The main defined benefit scheme is divided
into three segregated sections: A, B and C.

1. Actuarial valuations

Actuarial valuations of sections B and C of the main defined benefit scheme were
carried out as at 1 January 2007 and, on the bases adopted by the trustees, both
were in surplus with a combined surplus of £23 million or 5% of the liabilities
in those sections. An actuarial valuation of section A of the main defined
benefit scheme is due as at 1 January 2008 and the trustees and actuary are
currently working on that.

2. Deficit funding

The Group is currently making deficit funding payments into section A of the
main defined benefit scheme. In 2007 an amount of £33 million was paid by group
companies as such deficit funding. No deficit funding payments are currently
being paid into either section B or C of the main defined benefit scheme. When
the actuarial valuation of section A of the main defined benefit scheme has been
completed, the Company and trustees will discuss the terms of any recovery plan
that may be appropriate, including the amount and timing of any future deficit
funding.

3. IAS 19

The Group's defined contribution schemes gave rise to an operating charge in
2007 of £3 million (2006: £2 million).

IAS 19 accounting for the Group's defined benefit schemes values the annual cost
and the assets and liabilities of the schemes on disclosed bases, and includes
these values in the Consolidated income statement and Consolidated balance
sheet. In 2007 the IAS 19 operating charge for defined benefit schemes was £15
million (2006: £25 million). The excess of the expected return on scheme assets,
less the interest cost on liabilities, gave rise to a net financing credit of
£18 million (2006: £18 million). The aggregate IAS 19 deficit on defined benefit
schemes at 31 December 2007 was £112 million (2006: £285 million).

The reduction in the IAS 19 deficit during the year was the result principally
of an increase in the discount rate applied upon valuing scheme liabilities. An
actuarial gain of £111 million has been recognised as a credit to reserves in
the consolidated statement of recognised income and expense.

4. Defined benefit accruals

The Group's defined benefit schemes are closed to new members. There have been
historically a variety of accrual rates and normal pensionable ages for various
groups of defined benefit scheme members, depending upon the separate schemes
that they  were originally members of and which are now merged into the Group's
main defined benefit scheme. During 2007, and following a major staff
consultation process, the principal accrual factors were standardised and this
was the principal reason behind the reduced IAS 19 operating charge referred to
above. The changed factors are:

• Accrual rate 1/60 pa (previously mainly 1/50);
• Normal pensionable age 63 (previously mainly 60);
• Employee contribution rate to rise to 8% (previously mainly 5%).

5. Mortality assumptions

A topical issue for defined benefit pension schemes is mortality risk. In 2004
the Trustees of the ITV Pension Scheme conducted an in-depth analysis of the
actual mortality experience of the Scheme. That analysis was updated in 2007
with similar results. The mortality factors that the Group has used for its IAS
19 valuation are similar to those used by the Trustees for their valuation work
and reflect that analysis of the actual mortality experience. Continued
longevity improvement is assumed up to 2020 for current pensioners and up to
2035 for other members.

The forecast for life expectancy for a 65 year-old member based upon these
factors is:
                                                                                                      Men     Women
Current pensioners                                                                                   84.8      87.8
Other members                                                                                        85.8      88.7


The Group and Trustees will continue to review the mortality assumptions based
upon both actual experience in the scheme and the guidance of the actuarial
profession including the consultation launched by the Pensions Regulator in
February 2008.

6. Trustees' investment strategy

The Trustees have been and are continuing to review the investment strategy for
the main defined benefit scheme.  This has involved the use of derivative
instruments to hedge partial exposures to movements in interest rates, inflation
and foreign exchange rates and may involve further changes to the asset
allocations.

International Financial Reporting Standards

The Group has adopted International Financial Reporting Standards as adopted by
the EU. The parent Company financial statements continue to be presented under
UK GAAP.

                                  Forward look

This Business review has detailed how ITV is implementing its Turnaround
strategy with the aim of delivering sustainable growth in terms of revenues and
earnings. Over the next five years,  we aim to achieve stretching targets for
each of our core  business segments. In Broadcasting, we are targeting a share
of commercial impacts across the ITV family of channels in excess of 38.5% in
2012. Over the same period, we are targeting Global Content annual revenues
growing to £1.2 billion. We aim to generate £150 million in annual revenues in
Online by 2010. Across the Company as a whole, we are seeking to deliver annual
compound annual revenue growth of between 3-5% to 2010, then rising to 5% to
2012.

The strategy is ambitious, but we believe achievable in a rapidly changing
market context. 2008 will see some critical developments for the UK media sector
in general and for ITV in particular.

The process of digital switchover will get fully underway later this year,
following last year's first pilot. The ITV Border region will start the switch,
completing the process in 2009. Although digital switchover is upon us, the pace
of digital take up is actually slowing, with over 85% of UK homes already having
made the transition. To this extent the digital fragmentation effect on ITV1
viewing in particular should continue to ease.

The Ofcom second review of public service broadcasting will run throughout 2008.
ITV has set out its plans for modernising its regional news services in 2009,
which Ofcom will consider.  But there are also much wider questions about
sustaining commercial public service broadcasting - across ITV and Channel 4 -
in the digital age. The Government has confirmed its own intention to review
public service broadcasting, building on Ofcom's work, and it is possible that
this could lead to further broadcasting legislation around the end of this
decade.

A separate regulatory review of the CRR mechanism is being undertaken by the
OFT, working with Ofcom. The review process is expected to run into 2009,
allowing any recommendations to take effect for the trading round for 2010. The
market has changed markedly since CRR was introduced in 2003. There is more
competition between TV and different media, but the value of the mass audience
delivered by ITV1 is perhaps greater than ever. ITV will participate actively in
the review and looks forward to an outcome which maximises its ability to invest
in programming to deliver UK advertisers the mass audiences that they demand.

In Broadcasting, we estimate that for the first quarter of 2008 ITV plc's total
television advertising revenue will be up 1.9% at £357 million, with ITV1
advertising down 0.5% at £290 million. The total television market we estimate
will be down around 0.7% over the same period. For the first time in several
years ITV is outperforming the total television market, reflecting our strong
performance on-screen last year and into 2008, together with the increasing
confidence of advertisers in ITV.

Having been created in late 2007, ITV's new Global Content segment has made
promising early progress, both in the UK market and internationally, with a high
volume of exciting productions on-screen, in production or being developed. 2008
will also see significant developments in terms of Online, notably the launch of
the broadband archive service with BBC Worldwide and Channel 4 and the
development of Friends Reunited, building on its success to date. During the
year, we also expect to take an active role in the launch of a Freesat service
with the BBC and the development of free-to-air high definition television
services.

In a rapidly changing market of tremendous challenge and opportunity, control
and exploitation of content - across UK television, in other territories and via
other media - represents the key to the Company's turnaround.

                         Consolidated income statement


  For the year ended 31 December:                                                                             2006
                                                                                                    2007  Restated
                                                                                           Note       £m        £m
  Revenue                                                                                          2,082     2,181
  Operating costs before amortisation of intangible assets and exceptional items                  (1,771)   (1,806)
  Operating costs - exceptional items                                                         2      (35)      (35)
  Earnings before interest, tax and amortisation (EBITA)                                             276       340
  Amortisation and impairment of intangible assets                                            7      (84)      (76)
  Total operating costs                                                                           (1,890)   (1,917)
  Operating profit                                                                                   192       264
  Financing income                                                                                   200       170
  Financing costs                                                                                   (233)     (196)
  Net financing costs                                                                                (33)      (26)
  Share of profits of joint ventures and associated undertakings                              8        2         8
  Investment income                                                                                    1         3
  Gain on sale of properties (exceptional items)                                              2        9         4
  Gain on sale and impairment of subsidiaries and investments (exceptional items)             2       17        35
  Profit before tax                                                                                  188       288
  Taxation                                                                                    5      (50)      (66)
  Profit for the year                                                                                138       222
  Attributable to:
      Equity shareholders of the parent company                                                      137       219
      Minority interests                                                                               1         3
  Profit for the year                                                                                138       222

  Basic earnings per share                                                                    3     3.5p      5.5p
  Diluted earnings per share                                                                  3     3.5p      5.4p

Operating exceptional items during the year mainly comprise reimbursements,
fines and other costs associated with premium rate services and an onerous
contract provision associated with Carlton Screen Advertising (see note 2 for
details).

                           Consolidated balance sheet


  At 31 December:                                                                                             2006
                                                                                                    2007  Restated
                                                                                           Note       £m        £m
  Non-current assets
  Property, plant and equipment                                                                      211       193
  Intangible assets                                                                           7    3,873     3,895
  Investments in joint ventures and associated undertakings                                   8       79        66
  Available for sale financial assets                                                         9       10        37
  Held to maturity investments                                                               10      100         -
  Derivative financial instruments                                                                    32         3
  Distribution rights                                                                                  7        11
                                                                                                   4,312     4,205
  Current assets
  Assets held for sale                                                                                59       132
  Programme rights and other inventory                                                               440       400
  Trade and other receivables due within one year                                                    399       405
  Trade and other receivables due after more than one year                                             8         7
  Trade and other receivables                                                                        407       412
  Derivative financial instruments                                                                     4         1
  Cash and cash equivalents                                                                  10      498       961
                                                                                                   1,408     1,906
  Current liabilities
  Borrowings                                                                                 10      (33)     (471)
  Derivative financial instruments                                                                    (1)      (16)
  Trade and other payables due within one year                                                      (677)     (679)
  Trade and other payables due after more than one year                                               (9)       (9)
  Trade and other payables                                                                          (686)     (688)
  Current tax liabilities                                                                           (206)     (159)
  Provisions                                                                                         (27)       (9)
                                                                                                    (953)   (1,343)

  Net current assets                                                                                 455       563

  Non-current liabilities
  Borrowings                                                                                 10   (1,263)   (1,224)
  Derivative financial instruments                                                                    (9)      (15)
  Defined benefit pension deficit                                                             6     (112)     (285)
  Net deferred tax liability                                                                  5      (75)       (7)
  Other payables                                                                                     (65)      (56)
  Provisions                                                                                          (4)      (18)
                                                                                                  (1,528)   (1,605)

  Net assets                                                                                       3,239     3,163

  Attributable to equity shareholders of the parent company
  Share capital                                                                              11      389       401
  Share premium                                                                              11      120       120
  Merger and other reserves                                                                  11    2,702     2,690
  Translation reserve                                                                        11        4        (3)
  Available for sale reserve                                                                 11        4        17
  Retained earnings                                                                          11       14       (69)
  Total attributable to equity shareholders of the parent company                            11    3,233     3,156
  Minority interest                                                                          11        6         7
  Total equity                                                                               11    3,239     3,163



                        Consolidated cash flow statement


  For the year ended 31 December:                                                       2007                2006
                                                                                 £m       £m         £m       £m
  Cash flows from operating activities
  Operating profit before exceptional items                                     227                 299
  Depreciation of property, plant and equipment                                  35                  32
  Amortisation and impairment of intangible assets                               84                  76
  Increase in programme rights and other inventory, and distribution rights     (36)                (10)
  Decrease/(increase) in receivables                                              2                 (33)
  Increase in payables                                                            5                   7
  Movement in working capital                                                   (29)                (36)
  Cash generated from operations before exceptional items                                317                 371
  Cash flow relating to operating exceptional items:
      Operating loss                                                            (35)                (35)
      Increase in payables and provisions*                                        4                   6
  Cash outflow from exceptional items                                                    (31)                (29)
  Cash generated from operations                                                         286                 342
  Defined benefit pension deficit funding                                       (33)               (207)
  Interest received                                                              44                  22
  Interest paid on bank and other loans                                        (103)                (66)
  Interest paid on finance leases                                                (3)                 (3)
  Investment income received                                                      1                   3
  Net taxation received/(paid)                                                   18                 (50)
                                                                                         (76)               (301)
  Net cash flow from operating activities                                                210                  41
  Cash flows from investing activities
  Acquisition of subsidiary undertakings, net of cash and cash equivalents      (29)                 (3)
  acquired and debt
      repaid on acquisition
  Proceeds from sale of assets held for sale                                     94                  40
  Proceeds from sale of property, plant and equipment                             4                   -
  Acquisition of property, plant and equipment                                  (37)                (79)
  Acquisition of intangible assets                                              (22)                 (4)
  Acquisition of associates and investments                                      (2)                 (1)
  Loans granted to associates and joint ventures                                (10)                  -
  Loans repaid by joint ventures                                                  2                   2
  Proceeds from sale of subsidiaries                                              5                   -
  Proceeds from sale of investments and associates                                -                 157
  Net cash flow from investing activities                                                  5                 112
  Cash flows from financing activities
  Bank and other loans - amounts repaid                                        (441)                (13)
  Bank and other loans - amounts raised                                           -                 581
  Capital element of finance lease payments                                      (3)                 (3)
  Dividends paid to minority interest                                            (2)                 (8)
  Share buy-backs                                                                 -                (251)
  Purchase of own shares via employee benefit trust                             (11)                (31)
  Purchase of held to maturity investments                                     (100)                  -
  Equity dividends paid                                                        (122)               (128)
  Net cash (outflow)/inflow from financing activities                                   (679)                147
  Net (decrease)/increase in cash and cash equivalents                                  (464)                300
  Cash and cash equivalents at 1 January                                                 961                 663
  Effects of exchange rate changes and fair value movements on cash and                    1                  (2)
  cash equivalents
  Cash and cash equivalents at 31 December                                               498                 961

* Includes £2 million (2006: £6 million) relating to expenditure against
provisions held in respect of activities which have been previously
discontinued.



            Consolidated statement of recognised income and expense


For the year ended 31 December:                                                                      2007      2006
                                                                                            Note       £m        £m
Exchange differences on translation of foreign operations                                     10        2        (2)
Revaluation of available for sale investments                                                 10        3         4
Disposal and impairment transferred from available for sale reserve to income                 10      (16)      (20)
statement
Movements in respect of cash flow hedges                                                      10        5         -
Actuarial gains and losses on defined benefit pension schemes                                  5      111        29
Taxation on items taken directly to equity                                                     4      (47)       (4)
Net income recognised directly in equity                                                               58         7
Profit for the year                                                                                   138       222
Total recognised income and expense for the year                                                      196       229

Attributable to:
    Equity shareholders of the parent company                                                 10      195       226
    Minority interests                                                                        10        1         3
Total recognised income and expense for the year                                              10      196       229



                             Notes to the accounts

1   Operating segmental information

Management has determined the reportable segments based on the reports reviewed
by the Management Committee. The Management Committee comprises the executive
directors.

The Management Committee considers the business primarily from a product
perspective. The reportable segments are therefore Broadcasting, Global Content,
Online and Other. All of the segments reported meet the quantitative thresholds
required by IFRS 8.

Broadcasting is responsible for commissioning and scheduling programmes on the
ITV channels, marketing and programme publicity. It derives its revenue
primarily from the sale of advertising airtime and sponsorship. Other sources of
revenue are from premium rate services and the digital terrestrial multiplex
SDN.  The Broadcasting segment also includes the investments in SMG plc.

Global Content derives its revenue primarily from ITV Productions in the UK (a
commercial production company) and the businesses in ITV Worldwide.   A
proportion of revenue is generated internally via programme sales to the
Broadcasting segment.  ITV Worldwide is made up of Granada International,
Granada Ventures and international production centres in America, Germany and
Australia. Granada International sells programming worldwide. Granada Ventures
is a distributor of DVD entertainment in the UK and exploits merchandising and
licensing worldwide.

Online derives its revenue from two main areas: broadband and mobile. Broadband
includes itvlocal.com, itv.com and Friends Reunited. Mobile manages ITV's mobile
portal and arranges distribution of ITV's channels and content on mobile
networks.

Other comprises the Group's 100% interest in Carlton Screen Advertising, which
sells cinema screen advertising in the UK, and its 50% interest in Screenvision,
which operates cinema screen advertising businesses in continental Europe and
the United States.

The segment information provided to the Management Committee for the reportable
segments for the years ended 31 December 2007 and 31 December 2006 is as
follows:
                                      Global               
                    Broadcasting      Content              Online              Other           Consolidated
                   2007    2006    2007     2006      2007      2006      2007      2006      2007      2006
                    £m       £m      £m       £m        £m        £m        £m        £m        £m        £m
Total segment    1,750    1,801     564      632        33        23        67        80     2,414     2,536
revenue
Intersegment       (12)      (4)   (320)    (351)        -         -         -         -      (332)     (355)
revenue
Revenue from     1,738    1,797     244      281        33        23        67        80     2,082     2,181
external
customers
EBITA before       244      296      90       88       (12)        1       (11)      (10)      311       375
exceptional
items
Share of profit/    (2)       3       -        -         2         2         2         3         2         8
(loss) from
joint ventures
and associated
undertakings
Total segment    3,934    3,948     590      528       419       418        84       120     5,027     5,014
assets
Total assets
includes:
Investments in      12        7       4        -         2         -        61        59        79        66
associates and
joint ventures
Additions to        46       33      68       24         8        21         1         1       123        79
non-current
assets (other
than financial
instruments)
Total segment     (389)    (381)   (226)    (242)      (74)      (64)      (18)      (11)     (707)     (698)
liabilities

Sales between segments are carried out at arm's length. The revenue from
external parties reported to the Management Committee is measured in a manner
consistent with the income statement.   Income statement and balance sheet
allocations between reportable segments are performed on a consistent basis with
the exception of pension costs, which are allocated, and pension assets and
liabilities, which are not.  This reflects the basis of reporting to the
Management Committee.

The Management Committee assesses the performance of the reportable segments
based on a measure of EBITA before exceptional items. This measurement basis
excludes the effect of non-recurring income and expenditure. Amortisation,
investment income and share of profits of joint ventures and associates are also
excluded as they are not reflective of the underlying business. Net financing
costs are not allocated to segments as this type of activity is driven by the
central treasury and taxation functions, which manage the cash and taxation
position of the Group.

A reconciliation of EBITA before exceptional items to profit before tax is
provided as follows:
                                                                                                2007      2006
                                                                                                  £m        £m
EBITA before exceptional items                                                                   311       375
Exceptional items                                                                                (35)      (35)
Amortisation and impairment of intangible assets                                                 (84)      (76)
Net financing costs                                                                              (33)      (26)
Share of profits of joint ventures and associated undertakings                                     2         8
Investment income                                                                                  1         3
Gain on sale of properties (exceptional items)                                                     9         4
Gain on sale and impairment of subsidiaries and investments (exceptional items)                   17        35
Profit before tax                                                                                188       288

The amounts provided to the Management Committee with respect to total assets
are measured in a manner consistent with that of the financial statements. These
assets are allocated based on the operations of the segment.

Reportable segments' assets are reconciled to total assets as follows:
                                                                                                2007      2006
                                                                                                  £m        £m
Segment assets                                                                                 5,027     5,014
Unallocated:
Held to maturity investments                                                                     100         -
Assets held for sale                                                                              59       132
Derivative financial instruments                                                                  36         4
Cash and cash equivalents                                                                        498       961
Total assets per the balance sheet                                                             5,720     6,111

The amounts provided to the Management Committee with respect to total
liabilities are measured in a manner consistent with that of the financial
statements. These liabilities are allocated based on the operations of the
segment.

Reportable segments' liabilities are reconciled to total liabilities as follows:
                                                                                                2007      2006
                                                                                                  £m        £m
Segment liabilities                                                                              707       698
Unallocated:
Interest accruals                                                                                 23        20
Derivative financial instruments                                                                  10        31
Borrowings                                                                                     1,296     1,695
Current tax liabilities                                                                          206       159
Net deferred tax liability                                                                        75        7
Dividends                                                                                         52        53
Defined pension deficit                                                                          112       285
Total liabilities per the balance sheet                                                        2,481     2,948

The Group's principal operations are in the United Kingdom. Its revenue from
external customers in the United Kingdom is £1,929 million (2006: £2,012
million), and the total revenue from external customers in other countries is
£153 million (2006: £169 million).

The total of non-current assets other than financial instruments, deferred tax
assets, and employment benefit assets (there are no rights arising under
insurance contracts) located in the UK is £4,279 million (2006: £4,204 million),
and the total of these non-current assets located in other countries is £1
million (2006: £1 million).

Revenues of approximately £382 million (2006: £365 million), £258 million (2006:
£270 million) and £250 million (2006: £234 million) are derived from three
external customers.  The Group's major customers are all media buying agencies.
These revenues are attributable to the Broadcasting, Online and Other segments
and are from the only customers which individually represent over 10% of the
Group's revenues.

2    Exceptional items
                                                                                                               2006
                                                                                                     2007  Restated
                                                                                                       £m        £m
Operating exceptional items:
    Reorganisation and integration costs                                                               (8)      (23)
    PRS reimbursements and GMTV fines                                                                 (18)        -
    Onerous contract provision                                                                         (9)        -
    Fees in relation to takeover approaches                                                             -       (14)
    Receipt from liquidators                                                                            -         2
                                                                                                      (35)      (35)
Non-operating exceptional items:
    Gain on sale of properties                                                                          9         4
    Gain on sale of subsidiaries and investments                                                       43        57
    Impairment of available for sale financial assets                                                 (26)      (22)
                                                                                                       26        39
Total exceptional items before tax                                                                     (9)        4


In 2007 a charge of £8 million was incurred in respect of reorganisation and
restructuring costs including £4 million in respect of costs associated with the
operating review savings which form part of a larger project.

Provisions in respect of onerous contracts associated with Carlton Screen
Advertising (£9 million) were put in place in 2007.

A net gain of £9 million has been recognised from the sale of properties. A gain
of £17 million has been recognised from the sale of subsidiaries and investments
net of impairment of investments. This includes the profits on disposal of the
stakes in Arsenal Holdings plc and the option over the investment in Arsenal
Broadband Limited (£28 million), the investment in Liverpool Football Club and
Athletic Grounds plc (£7 million), the stake in Independent Television
Facilities Centre Limited (£5 million) and the stake in MUTV Limited (£3
million) and an impairment of the holding in SMG Plc, which is held in the
Broadcasting segment, (£26 million) following a significant and sustained
decline in its share price.

Operating exceptional items include £18 million in respect of reimbursements,
fines and other costs associated with issues arising on the use of premium rate
interactive services in programming on ITV and GMTV as follows:

                                                                                                              2007
                                                                                                                £m
Reimbursements and associated costs:
    ITV                                                                                                        (10)
    GMTV                                                                                                        (6)
Fines:
    GMTV                                                                                                        (2)
                                                                                                               (18)

Reimbursements and associated costs include the amounts that GMTV has donated
and ITV plans to donate to charities.

The terms of ITV plc's broadcasting licences require compliance with the Ofcom
Broadcasting Code, which requires that competitions are to be run fairly, and
that viewers must not be misled. If the Code is breached, it is open to the
regulator in serious cases to impose sanctions, including a fine of up to 5% of
the licensee's qualifying revenue. For free to air commercial broadcasters, such
as ITV and GMTV (its 75% subsidiary undertaking), qualifying revenue in this
context effectively equates to total advertising and sponsorship revenues. In
setting the level of fine in the past, the regulator has taken into account
whether or not problems were systemic or one-off; the period over which problems
persisted; action taken by the broadcaster once problems came to light; and the
amount of revenues generated by the affected services. The regulator has also
levied multiple fines on broadcasters where more than one programme was
affected.

Ofcom has been provided with details of all the instances in ITV's programmes
which have given rise to reimbursement. However at the date of approval of these
accounts, the regulator has not yet confirmed the level of any fine that may be
imposed and it is not possible to reliably estimate the level of fine that might
be imposed by Ofcom in this context. Therefore no provision for a fine on ITV is
included in these accounts. The regulatory process is expected to be completed
in the first half of 2008 and any subsequent fine will be included in the 2008
results as an operating exceptional item.

2006 exceptional items have been restated to include the gain on sale of
properties of £4 million.

2006 exceptional items included a charge of £23 million, including £17 million
staff costs, in respect of reorganisation and restructuring costs including the
closure of the Bristol and children's programme production centres, the
continuation of the regional news consolidation programme and redundancy and
share costs arising from the restructuring of the senior management team. A
liquidation settlement of £2 million was received from the liquidators of the
Shop! Channel. Fees of £14 million were incurred in respect of the two
unsolicited takeover approaches received in 2006.

2006 exceptional items also included a £35 million net gain from the sale of
subsidiaries and the sale and impairment of investments. This included the
profit on disposal of the stakes in Seven Network (£29 million) and TV3 (£40
million), the loss on sale of the education business (£12 million) and an
impairment of the holding in SMG Plc, which is held within the Broadcasting
segment (£22 million) following a significant decline in its share price.

3    Earnings per share
                                                                                         2007                 2006
                                                                                                          Restated
                                                                               Basic  Diluted       Basic  Diluted
                                                                                  £m       £m          £m       £m
Profit for the year attributable to equity shareholders of the parent            137      137         219      219
company
Exceptional items (including related tax effect of a credit of £6                  3        3          (2)      (2)
million, 2006: expense of £2 million)
Profit for the year before exceptional items                                     140      140         217      217
Amortisation and impairment of intangible assets (including related tax           65       65          59       59
credit of £19 million, 2006: £17 million)
Prior period tax adjustments                                                     (11)     (11)        (36)     (36)
Other tax adjustments                                                              -        -          12       12
Profit for the year before exceptional items, amortisation and impairment        194      194         252      252
of intangible assets and prior period tax adjustments
Weighted average number of ordinary shares in issue - million                  3,874    3,874       4,017    4,017
Dilution impact of share options - million                                         -       23           -       34
                                                                               3,874    3,897       4,017    4,051
Earnings per ordinary share                                                     3.5p     3.5p        5.5p     5.4p
Adjusted earnings per ordinary share
Basic earnings per ordinary share                                               3.5p     3.5p        5.5p     5.4p
Add: Loss/(profit) per ordinary share on exceptional items                      0.1p     0.1p      (0.1)p   (0.1)p
Earnings per ordinary share before exceptional items                            3.6p     3.6p        5.4p     5.3p
Add: Loss per ordinary share on amortisation and impairment of intangible       1.7p     1.7p        1.5p     1.5p
assets
Subtract: Profit per ordinary share on prior period tax adjustments           (0.3)p   (0.3)p      (0.9)p   (0.9)p
Add: Loss per ordinary share on other tax adjustments                              -        -        0.3p     0.3p
Earnings per ordinary share for the year before exceptional items,              5.0p     5.0p        6.3p     6.2p
amortisation and impairment of intangible assets and prior period tax
adjustments

An adjusted earnings per share figure has been disclosed because in the view of
the directors this gives a fairer reflection of the results of the underlying
business.

The 2006 adjusted earnings per share figures have been restated to exclude the
gain on sale of properties of £4 million to reflect more fairly the underlying
business performance.

4    Dividends

Dividends declared and recognised through equity in the year were:
                                                                                                     2007      2006
                                                                                                       £m        £m
Equity shares:
     Final 2005 dividend of 1.8 pence per share                                                         -        74
     Interim 2006 dividend of 1.35 pence per share                                                      -        53
     Final 2006 dividend of 1.8 pence per share                                                        70         -
     Interim 2007 dividend of 1.35 pence per share                                                     52         -
                                                                                                      122       127

A final dividend of 1.8 pence per share, totalling £70 million, has been
proposed after the balance sheet date in respect of the year ended  31 December
2007 (2006: 1.8 pence per share, totalling £70 million). As is required by IAS
10 (Events after the balance sheet date) this amount has not been provided for
at the balance sheet date.

5    Taxation

Recognised in the income statement:
                                                                                                     2007      2006
                                                                                                       £m        £m
Current tax expense:
    Current tax before exceptional items                                                              (58)      (37)
    Current tax credit/(expense) on exceptional items                                                   3        (2)
                                                                                                      (55)      (39)
    Adjustment for prior periods                                                                       25        48
                                                                                                      (30)        9
Deferred tax:
    Origination and reversal of temporary differences                                                  (9)      (63)
    Deferred tax credit on exceptional items                                                            3         -
    Adjustment for prior periods                                                                      (14)      (12)
                                                                                                      (20)      (75)
Total taxation expense in the income statement                                                        (50)      (66)



Reconciliation of taxation expense:
                                                                                                    2007      2006
                                                                                                      £m        £m
Profit before tax                                                                                    188       288
Taxation expense at UK corporation tax rate of 30% (2006: 30%)                                       (56)      (86)
Non-taxable/non-deductible exceptional items                                                           3        (2)
Non-taxable income/non-deductible expenses                                                            (7)       (7)
Effect of tax losses utilised                                                                          4         4
Over provision in prior periods                                                                       11        36
Impact of tax rate change                                                                              4         -
Other                                                                                                 (9)      (11)
                                                                                                     (50)      (66)

In the year ended 31 December 2007 the effective tax rate on profits is lower
(2006: lower) than the standard rate of UK corporation tax primarily as a result
of adjustments in respect of prior periods due to progress in the agreement with
revenue authorities of prior periods' tax liabilities (2006: adjustments in
respect of prior periods due to progress in the agreement with revenue
authorities of prior periods' tax liabilities). The underlying tax rate on
profits, after adjusting for the irregular tax effects caused by issues such as
exceptional items, impairments, joint ventures and associates and adjustments in
respect of prior periods, is 31% (2006: 30%).

The current tax expense for the prior year is reduced primarily as a consequence
of the reversal of temporary differences on which deferred tax assets previously
were recognised relating to pension scheme deficits and funding payments.

A tax expense totalling £47 million (2006: expense of £4 million) has been
recognised directly in equity representing a current tax credit of £nil (2006:
credit of £2 million) and a deferred tax expense of £47 million (2006: expense
of £6 million).

Deferred tax assets and liabilities recognised and their movements are:

                                                At       Business  Recognised  Recognised  Transfer to         At
                                         1 January   combinations       in the  in equity  assets held 31 December
                                              2007             £m      income          £m     for sale
                                                £m                  statement                       £m       2007
                                                                           £m                                  £m
Property, plant and equipment                   (4)             -          (9)          -            -        (13)
Intangible assets                             (139)            (1)         24           3            -       (113)
Programme rights                                 7              -          (4)          -            -          3
Pension scheme deficits                         86              -         (21)        (34)           -         31
Pensions funding payments                       21              -         (10)          -            -         11
Interest-bearing loans and borrowings,          (4)             -           2           -            -         (2)
and derivatives
Share-based payments                            26              -          (6)        (16)           -          4
Unremitted earnings of subsidiaries,            (3)             -           1           -            -         (2)
associates and joint ventures
Other                                            3              -           3           -            -          6
                                                (7)            (1)        (20)        (47)           -        (75)


                                                 At      Business  Recognised  Recognised     Business         At
                                          1 January  combinations       in the  in equity         sale 31 December
                                               2006            £m      income          £m           £m
                                                 £m                 statement                                2006
                                                                           £m                                  £m
Property, plant and equipment                    (3)            -          (2)          -            1         (4)
Intangible assets                              (155)           (1)         17           -            -       (139)
Programme rights                                  5             -           2           -            -          7
Pension scheme deficits                         160             -         (65)         (9)           -         86
Pensions funding payments                        29             -          (8)          -            -         21
Interest-bearing loans and borrowings,            3             -          (7)          -            -         (4)
and derivatives
Share-based payments                             32             -          (9)          3            -         26
Unremitted earnings of subsidiaries,              -             -          (3)          -            -         (3)
associates and joint ventures
Other                                             3             -           -           -            -          3
                                                 74            (1)        (75)         (6)           1         (7)


The amount of the deferred tax liability at 31 December 2007 has been reduced by
£6 million as a consequence of the re-statement of the liability to the reduced,
broadly 28%, rate at which the liability is expected to reverse as a consequence
of changes in the UK Finance Act 2007. Of this benefit £4 million has been taken
through the income statement and net £2 million through equity in accordance
with IAS 12.

At 31 December 2007 total deferred tax assets are £55 million (2006: £143
million) and total deferred tax liabilities are £130 million (2006: £150
million).

Deferred tax assets estimated at £0.6 billion and £0.1 billion (2006: £0.6
billion and £0.1 billion) in respect of capital losses and loan relationship
deficits respectively, have not been recognised due to uncertainties as to
amount and whether gain or income will arise in the appropriate form and
relevant territory against which such losses could be utilised. For the same
reasons, deferred tax assets in respect of overseas losses of £10 million (2006:
£10 million) which time expire between 2017 and 2026 have not been recognised.

6   Pension schemes

The Group operates both defined benefit and defined contribution pension
schemes.

The pension scheme assets are held in a separate trustee-administered fund to
meet long-term pension liabilities to past and present employees. The trustees
of the fund are required to act in the best interest of the fund's
beneficiaries. The appointment of trustees to the fund is determined by the
scheme's trust documentation.

Defined contribution schemes

Total contributions recognised as an expense in relation to defined contribution
schemes during 2007 were £3 million (2006: £2 million).

Defined benefit schemes

The Group provides retirement benefits to some of its former and approximately
30% of current monthly paid employees through defined benefit schemes. The
Group's main scheme was formed from a merger of a number of schemes on 31
January 2006. The level of retirement benefit is principally based on basic
salary at retirement.

During 2007, the Group made significant changes to the scheme benefit structure
in respect of future service benefits. These changes involved a combination of
an increase in normal retirement age, a reduction in the rate of benefit accrual
and increased member contributions. Members were given the option to elect for
alternative benefits with an equivalent adjustment to member contributions.
Benefits accrued up to the date of the change were unaffected.

The liabilities of the defined benefit scheme are measured by discounting the
best estimate of future cash flows to be paid out by the scheme using the
projected unit method. This amount is reflected in the deficit in the balance
sheet. The projected unit method is an accrued benefits valuation method in
which the scheme liabilities make allowance for projected earnings. The
accumulated benefit obligation is an actuarial measure of the present value of
benefits for service already rendered but differs from the projected unit method
in that it includes an allowance for early leaver statutory revaluations rather
than projected earning increases. At the balance sheet date the accumulated
benefit obligation was £2,550 million (2006: £2,580 million).

The assets and liabilities of all the Group's defined benefit pension schemes
recognised in the balance sheet at 31 December 2007 under IAS 19 (as explained
in detail in this note) were £2,491 million and £2,603 million respectively,
resulting in a net deficit in the defined benefit schemes of £112 million.

An alternative method of valuation to the projected unit method is a solvency
basis, often estimated using the cost of buying out benefits at the balance
sheet date with a suitable insurer. This amount represents the amount that would
be required to settle the scheme liabilities at the balance sheet date rather
than the Group continuing to fund the ongoing liabilities of the scheme. The
Group estimates the shortfall in the amount required to settle the scheme's
liabilities at the balance sheet date is £1,100 million (2006: £1,500 million).

The statutory funding objective is that the scheme has sufficient and
appropriate assets to pay its benefits as they fall due. This is a long term
target. Future contributions will always be set at least at the level required
to satisfy the statutory funding objective. The general principles adopted by
the trustees are that the assumptions used, taken as a whole, will be
sufficiently prudent for pensions and benefits already in payment to continue to
be paid, and to reflect the commitments which will arise from members' accrued
pension rights.

The most recently completed triennial actuarial valuations in respect of the
Group's retirement benefits funds was performed by an independent actuary for
the Trustees of the ITV Pension Scheme and was carried out as at 1 January 2005.
The Group's main scheme, formed by merger on 31 January 2006, consists of three
sections, A, B and C. The first triennial valuation of section A is due at 1
January 2008. The first triennial valuation of the other sections was completed
as at 1 January 2007. The Group will monitor funding levels annually.

The levels of ongoing contributions are based on the current service costs and
the expected future cash flows of the defined benefit scheme. The Group
estimates the present value of the duration of UK scheme liabilities will on
average fall due over 16 years.

The movement in the present value of the defined benefit obligation for these
schemes is analysed below:
                                                                                                    2007      2006
                                                                                                      £m        £m
Defined benefit obligation at 1 January                                                            2,657     2,604
Current service cost                                                                                  15        23
Curtailment loss                                                                                       -         2
Interest cost                                                                                        134       126
Net actuarial (gain)/loss                                                                            (96)        3
Contributions by scheme participants                                                                   5         4
Benefits paid                                                                                       (112)     (105)
Defined benefit obligation at 31 December                                                          2,603     2,657



The present value of the defined benefit obligation is analysed between wholly
unfunded and funded defined benefit schemes in the table below:
                                                                                                    2007      2006
                                                                                                      £m        £m
Defined benefit obligation in respect of funded schemes                                            2,567     2,619
Defined benefit obligation in respect of wholly unfunded schemes                                      36        38
Total defined benefit obligation                                                                   2,603     2,657



The movement in the fair value of the defined benefit scheme assets is analysed
below:
                                                                                                    2007      2006
                                                                                                      £m        £m
Fair value of assets at 1 January                                                                  2,372     2,072
Expected return on assets                                                                            152       144
Net actuarial gain                                                                                    15        32
Employer contributions                                                                                59       225
Contributions by scheme participants                                                                   5         4
Benefits paid                                                                                       (112)     (105)
Fair value of assets at 31 December                                                                2,491     2,372



The assets and liabilities of the scheme are recognised in the balance sheet and
shown within non-current liabilities. The total recognised is:
                                                                                2007      2006      2005      2004
                                                                                  £m        £m        £m       £m
Total defined benefit scheme assets                                            2,491     2,372     2,072     1,685
Total defined benefit scheme obligations                                      (2,603)   (2,657)   (2,604)   (2,357)
Net amount recognised within the balance sheet                                  (112)     (285)     (532)     (672)



Amounts recognised through the income statement are as follows:
                                                                                                    2007      2006
                                                                                                      £m        £m
Amount charged to operating costs:
    Current service cost                                                                             (15)      (23)
    Curtailment loss                                                                                   -        (2)
                                                                                                     (15)      (25)
Amount credited/(charged) to net financing costs:
    Expected return on pension scheme assets                                                         152       144
    Interest cost                                                                                   (134)     (126)
                                                                                                      18        18
Total credited/(charged) in the income statement                                                       3        (7)



The amounts recognised through the statement of recognised income and expense
are:
                                                                                                    2007      2006
                                                                                                      £m        £m
Actuarial gains and (losses):
     Arising on scheme assets                                                                         15        32
     Arising on scheme liabilities                                                                    96        (3)
                                                                                                     111        29



The cumulative amount of actuarial gains and losses recognised through the
statement of recognised income and expense since 1 January 2004 is an actuarial
gain of £52 million (2006: £59 million loss).



Included within actuarial gains and losses are experience adjustments as
follows:
                                                                                2007     2006     2005     2004
                                                                                  £m       £m       £m       £m
Experience adjustments on scheme assets                                           15       32      219       56
Experience adjustments on scheme liabilities                                     (18)     (12)       9      (70)



At 31 December 2007 the scheme assets were invested in a diversified portfolio
that consisted primarily of equity and debt securities.



The scheme assets are shown below by major category along with the associated
expected rates of return.
                                                                             Expected    Market  Expected    Market
                                                                            long term     value long term     value
                                                                                 rate      2007      rate      2006
                                                                            of return        £m of return        £m
                                                                                 2007                2006
                                                                                    %                   %
Market value of assets - equities and property                                    7.7     1,284       7.6     1,436
Market value of assets - bonds                                              4.4 - 5.9     1,087 4.5 - 5.2       898
Market value of assets - other                                                    5.0       120       5.0        38
Total scheme assets                                                                       2,491               2,372



The expected return on plan assets is based on market expectations at the
beginning of the financial period for returns over the life of the related
obligation. Exposure through the different asset classes is obtained through a
combination of executing swaps and investing in physical assets. The expected
yield on bond investments with fixed interest rates can be derived exactly from
their market value. Some of these bond investments are issued by the UK
Government. The risk of default on these is very small. The trustees also hold
corporate bonds and other fixed interest securities. There is a more significant
risk of default on these which is assessed by various rating agencies.

The trustees also have a substantial holding of equity investments. The
investment return related to these is variable and they are generally considered
much 'riskier' investments. It is generally accepted that the yield on equity
investments will contain a premium ('the equity risk premium') to compensate
investors for the additional risk of holding this type of investment. There is
significant uncertainty about the likely size of the risk premium.

The expected return for each asset class is weighted based on the target asset
allocation for 2008 to develop the expected long term rate of return on assets
assumption for the portfolio.

The fair value of the scheme assets as a percentage of total scheme assets as at
31 December 2006 and 31 December 2007 and target allocations for 2008 are set
out below.

The benchmark for 2008 is to hold broadly 55% equities and 45% bonds. The
majority of the equities held by the scheme are in international blue chip
entities. The aim is to hold a globally diversified portfolio of equities, with
a target of broadly one-third of equities being held in the UK and two-thirds of
equities held overseas. Within the bond portfolio the aim is to hold 50% of the
portfolio in government bonds (gilts) and 50% of the portfolio in corporate
bonds and other fixed interest securities. Asset allocation is currently being
reviewed by the Trustees.

The actual return on plan assets in the year ended 31 December 2007 was £167
million (2006: £176 million).
                                                                                         Planned     2007     2006
                                                                                            2008
(as a percentage of total scheme assets)
Equities and property                                                                        55%      52%      61%
Bonds                                                                                        45%      44%      38%
Other                                                                                         0%       4%       1%



The principal assumptions used in the scheme valuations at the balance sheet
date were:
                                                                                                     2007      2006
Rate of general increase in salaries                                                                4.65%     4.25%
Rate of increase in pension payment (LPI 5% pension increases)                                      3.30%     2.90%
Rate of increase to deferred pensions                                                               3.40%     3.00%
Discount rate for scheme liabilities                                                                5.70%     5.12%
Inflation                                                                                           3.40%     3.00%



IAS 19 requires that the discount rate used be determined by reference to market
yields at the balance sheet date on high quality fixed income investments. The
currency and term of these should be consistent with the currency and estimated
term of the post-employment obligations. The discount rate has been based on the
yield available on AA rated corporate bonds of a term similar to the
liabilities.

The expected rate of inflation is an important building block for salary growth
and pension increase assumption. A rate of inflation is 'implied' by the
difference between the yields on fixed and index-linked Government bonds.
However, differences in demand for these can distort this implied figure. The
Bank of England target inflation rate has also been considered in setting this
assumption.

The Group has used PA92 tables with mortality projected to 2020 for pensioner
members and to 2035 for non-pensioner members. Using these tables, the assumed
life expectations on retirement are:
                                                                           2007        2007        2006        2006
Retiring today at age                                                        60          65          60          65
Males                                                                      24.4        19.8        24.4        19.8
Females                                                                    27.4        22.8        27.4        22.8
Retiring in 20 years
Males                                                                      25.5        20.8        25.5        20.8
Females                                                                    28.4        23.7        28.4        23.7



The tables above reflect published mortality investigation data in conjunction
with the results of investigations into the mortality experience of scheme
members.

The sensitivities regarding the principal assumptions used to measure the
schemes liabilities are set out below. The illustrations consider the single
change shown with the other assumptions assumed to be unchanged. In practice,
changes in one assumption may be accompanied by offsetting changes in another
assumption (although this is not always the case). The Company liability is the
difference between the scheme liabilities and the scheme assets. Changes in the
assumptions may occur at the same time as changes in the market value of scheme
assets. These may or may not offset the change in assumptions. For example, a
fall in interest rates will increase the scheme liability, but may also trigger
an offsetting increase in the market value so there is no net effect on the
company liability.


Assumption                                                       Change in assumption            Impact on scheme
                                                                                                      liabilities
Discount rate                                               Increase/decrease by 0.5%     Decrease/increase by 8%
Rate of inflation                                           Increase/decrease by 0.5%     Increase/decrease by 7%
Rate of salary growth                                       Increase/decrease by 0.5%     Increase/decrease by 1%
Rate of mortality                                                  Increase by 1 year              Increase by 3%



Normal contributions into the schemes in 2008 are expected to be in the region
of £12 million assuming current contribution rates continue as agreed with the
scheme trustees.



7   Intangible assets
                                    Goodwill    Brands       Customer   Licences     Software       Film     Total
                                          £m        £m  contracts and         £m  development                   £m
                                                        relationships                          libraries
                                                                   £m                      £m  and other
                                                                                                      £m
Cost
At 1 January 2006                      3,425       199            336        121            -         78     4,159
Acquisition of subsidiaries               18         -              2          -            -          -        20
Internal development                       -         -              -          -            4          -         4
At 31 December 2006                    3,443       199            338        121            4         78     4,183
Acquisition of subsidiaries               35         -              -          -            -          5        40
Internal development                       -         -              -          -           22          -        22
At 31 December 2007                    3,478       199            338        121           26         83     4,245
Amortisation and impairment
At 1 January 2006                          -        32            158         11            -         11       212
Charge for the year                        -        18             24          9            -          5        56
Impairment charge                         20         -              -          -            -          -        20
At 31 December 2006                       20        50            182         20            -         16       288
Charge for the year                        -        18             22          9            1          6        56
Impairment charge                         20         -              8          -            -          -        28
At 31 December 2007                       40        68            212         29            1         22       372
Net book value
At 31 December 2007                    3,438       131            126         92           25         61     3,873
At 31 December 2006                    3,423       149            156        101            4         62     3,895


In the 2006 annual report software development was included in the film
libraries and other category.  It has been shown separately above as a result of
its increasing significance.

Amortisation of intangible assets is shown within operating costs in the income
statement. The £28 million impairment charge in 2007 related to the Carlton
Screen Advertising cash-generating unit and was a result of structural changes
in the cinema advertising market. Of the £28 million, £20 million of the
impairment relates to goodwill and £8 million to other intangible assets. In
calculating this impairment, growth rates and discount rates consistent with
those noted below have been used, and calculations have been made on a value in
use basis, using cash flow projections over the next seven years. Carlton Screen
Advertising is part of the Other operations segment.

Impairment tests for cash-generating units containing goodwill

The following units have significant carrying amounts of goodwill:
                                                                                                     2007      2006
                                                                                                       £m        £m
Broadcasting                                                                                        2,707     2,707
Global Content                                                                                        301       267
Online                                                                                                376       375
GMTV                                                                                                   54        54
CSA                                                                                                     -        20
                                                                                                    3,438     3,423

The recoverable amount of the cash-generating units is based on value in use
calculations. Those calculations use cash flow projections based on estimated
operating results for the next seven years. Cash flows in perpetuity are
extrapolated using a 2.5% growth rate and are appropriate because these are
long-term businesses. The growth rate used is consistent with the long-term
average growth rate for the industry. A pre-tax discount rate of 11.9% has been
used in discounting the projected cash flows. The key assumptions and the
approach to determining the cash flows of the cash-generating units are:

Broadcasting

The main assumptions on which the forecast cash flows were based include the
television share of advertising market, share of commercial impacts, programme
costs and the level of PSB savings. The key assumptions in assessing the
recoverable amount of this goodwill are the growth in the total television
market and ITV's share within that market. These assumptions have been
determined by using a combination of long term trends, industry forecasts and
in-house estimates.  It is also assumed that ITV is able to renew its
broadcasting licences in 2014.  Broadcasting goodwill exceeds its carrying
amount by approximately £200 million.   In assessing the recoverable amount,
ITV's TV advertising revenues are assumed to have a net present value of £14.8
billion. Goodwill would be equal to its carrying amount if there were a 12% fall
in the growth rate assumed in assessing ITV's TV advertising revenues.

Global Content

The main assumptions on which the forecast cash flows were based include
turnover growth, share of total network programme budget obtained, and margin
growth. These assumptions have been determined by using a combination of
extrapolation of historical trends within the business, industry forecasts and
in-house estimates of growth rates.

Online

The main assumptions on which the forecast cash flows were based include page
impressions, unique users, average dwell time for unique users, number of videos
streamed and advertising rates. These assumptions have been determined by using
a combination of industry forecasts and in-house estimates of growth rates.

GMTV

The main assumptions on which the forecast cash flows were based include the
television share of advertising market, share of commercial
impacts, and programme costs. These assumptions have been determined by using a
combination of long term trends, industry forecasts and
in-house estimates.

8   Investments in joint ventures and associated undertakings
                                                                                   Joint    Associated       Total
                                                                                ventures  undertakings          £m
                                                                                      £m            £m
At 1 January 2006                                                                     60            33          93
Additions                                                                              -             1           1
Share of attributable profits                                                          5             3           8
Disposals                                                                              -           (29)        (29)
Repayment of loans                                                                    (1)            -          (1)
Reclassification as assets held for sale                                              (3)            -          (3)
Exchange movement and other                                                           (2)           (1)         (3)
At 31 December 2006                                                                   59             7          66
Additions                                                                              4             9          13
Share of attributable profits                                                          -             -           -
Repayment of loans                                                                    (1)            -          (1)
Exchange movement and other                                                            1             -           1
At 31 December 2007                                                                   63            16          79

Of the share of attributable profits of joint ventures £2 million (2006: £nil)
was allocated to assets held for sale in line with their balance sheet
classification.  The £4 million of additions in 2007 includes an investment in
Kangaroo, a joint venture with BBC Worldwide and Channel 4 seeking to offer
online access to archive programming from the UK's leading broadcasters.

The aggregated summary financial information in respect of associates in which
the Group has an interest is as follows:
                                                                                                    2007      2006
                                                                                                      £m        £m
Assets                                                                                                69        54
Liabilities                                                                                          (68)      (56)
Revenue                                                                                              117       118
Profit                                                                                                 2         4



The aggregated summary financial information in respect of the Group's share of
interests in joint ventures is as follows:
                                                                                                    2007      2006
                                                                                                      £m        £m
Non-current assets                                                                                    54        54
Current assets                                                                                        45        43
Current liabilities                                                                                  (24)      (26)
Non-current liabilities                                                                              (28)      (25)
Revenue                                                                                               68        62
Expense                                                                                              (68)      (59)



9   Available for sale financial assets
                                                                                                                 £m
At 1 January 2006                                                                                               181
Disposals                                                                                                       (90)
Revaluation to fair value                                                                                        (6)
Reclassification as assets held for sale                                                                        (48)
At 31 December 2006                                                                                              37
Revaluation to fair value                                                                                        (1)
Impairment (see note 2)                                                                                         (26)
At 31 December 2007                                                                                              10



10   Analysis of net debt
                                                                1 January           Net     Currency  31 December
                                                                     2007 cash flow and          and         2007
                                                                       £m  acquisitions     non-cash           £m
                                                                                     £m    movements
                                                                                                  £m
Cash                                                                  824          (444)           1          381
Cash equivalents                                                      137           (20)           -          117
Cash and cash equivalents                                             961          (464)           1          498
Held to maturity investments                                            -           100            -          100
Loans and loan notes due within one year                             (468)          441            -          (27)
Finance leases due within one year                                     (3)            3           (6)          (6)
Loans and loan notes due after one year                            (1,152)            -          (32)      (1,184)
Finance leases due after one year                                     (72)            -           (7)         (79)
                                                                   (1,695)          444          (45)      (1,296)
Swap held against €500m bond                                            -             -           30           30
Net debt                                                             (734)           80          (14)        (668)


                                                                1 January           Net Currency and  31 December
                                                                     2006 cash flow and     non-cash         2006
                                                                       £m  acquisitions    movements           £m
                                                                                     £m           £m
                                                                                     
Cash                                                                  522           303           (1)         824
Cash equivalents                                                      141            (3)          (1)         137
Cash and cash equivalents                                             663           300           (2)         961
Loans and loan notes due within one year                             (285)           13         (196)        (468)
Finance leases due within one year                                     (3)            3           (3)          (3)
Loans and loan notes due after one year                              (781)         (581)         210       (1,152)
Finance leases due after one year                                     (75)            -            3          (72)
                                                                   (1,144)         (565)          14       (1,695)
Net debt                                                             (481)         (265)          12         (734)

Included within cash equivalents is £71 million (2006: £75 million) the use of
which is restricted to meeting finance lease commitments under programme sale
and leaseback commitments and gilts of £32 million (2006: £31 million) over
which the unfunded pension promises have a charge.

In August 2007 ITV purchased a £100 million senior note issued by UBS AG ('UBS')
under UBS' Euro Note Programme. The note matures in March 2009 and the
investment return is a function of short term interest rates across six major
currencies. For the period to 31 December 2007 the return earned was 8.6% on a
per annum basis. The note is designated as a held to maturity investment and,
although it is the Group's intention to hold this note to maturity, it can be
redeemed for cash before the maturity date, subject to agreement by UBS.

At the time of issue of the €500 million bond the Group took out a
cross-currency interest rate swap to economically hedge Euro interest rate and
foreign exchange exposure. As at 31 December 2007 the currency element of the
swap is a £30 million asset (2006: £1 million asset) and this offsets the
exchange rate movement of the bond. The interest element of the swap is a £7
million liability (2006: £4 million liability) resulting in an overall net asset
total at 31 December 2007 of £23 million (2006: £3 million net liability total).

The €356 million exchangeable bond and £200 million Eurobond matured in 2007.

Included within non-cash movements in 2006 is the movement of the £200 million
Eurobond into amounts payable in less than one year based on its payment due
date.

11   Capital and reserves
                               Attributable to equity shareholders of the parent company
                           Share     Share    Merger Translation  Available  Retained    Total  Minority     Total
                         capital   premium       and     reserve   for sale  earnings       £m  interest    equity
                              £m        £m     other          £m    reserve        £m                 £m        £m
                                            reserves                     £m
                                                  £m
At 1 January 2006            423        98     2,666          (1)        33        74    3,293        12     3,305
Share buy-backs              (24)        -        24           -          -      (251)    (251)        -      (251)
Shares issued in the           2        22         -           -          -         -       24         -        24
year
Cancellation of              (12)        -         -           -          -         -      (12)        -       (12)
convertible shares
Issue of deferred             12         -         -           -          -         -       12         -        12
shares
Total recognised income        -         -         -          (2)       (16)      244      226         3       229
and expense
Movements due to                                                                            (9)        -        (9)
share-based
compensation                   -         -         -           -          -        (9)
Dividends paid to              -         -         -           -          -         -        -        (8)       (8)
minority interests
Equity dividends               -         -         -           -          -      (127)    (127)        -      (127)
At 31 December 2006          401       120     2,690          (3)        17       (69)   3,156         7     3,163
Cancellation of              (12)        -        12           -          -         -        -         -         -
deferred shares
Total recognised income        -         -         -           7        (13)      201      195         1       196
and expense
Movements due to                                                                    4                            4
share-based
compensation                   -         -         -           -          -                  4         -
Dividends paid to                                                                                     (2)       (2)
minority interests             -         -         -           -          -         -        -
Equity dividends               -         -         -           -          -      (122)    (122)        -      (122)
At 31 December 2007          389       120     2,702           4          4        14    3,233         6     3,239

Included within retained earnings is a £18 million (2006: £25 million) deduction
for investments held in ITV plc shares by the Group-sponsored employee benefit
trusts.

Merger and other reserves

Merger and other reserves at 31 December 2007 include merger reserves arising on
the Granada/Carlton merger of £2,548 million (2006: £2,548 million), capital
reserves of £112 million (2006: £112 million), capital redemption reserves of
£36 million (2006: £24 million), revaluation reserves of £6 million (2006: £6
million).

Translation reserve

The translation reserve comprises all foreign exchange differences arising on
the translation of the accounts of, and investments in, foreign operations.
Included within the movement in the year is £5 million related to cash flow
hedges (2006: £nil).

Available for sale reserve

The available for sale reserve comprises all movements arising on the
revaluation and disposal of assets accounted for as available for sale.

12   Basis of preparation

The Group accounts consolidate those of ITV plc, ('the Company'), a company
domiciled in the United Kingdom and its subsidiaries (together referred to as '
the Group') and the Group's interests in associates and jointly controlled
entities.

As required by EU law (IAS Regulation EC 1606/2002) the Group's accounts have
been prepared and approved by the directors in accordance with International
Financial Reporting Standards as adopted by the EU ('IFRS').

The accounts are principally prepared on the historical cost basis except where
other bases are applied under the Group's accounting policies.

The Group has adopted IFRS 7 'Financial instruments: Disclosures', and the
complementary amendment to IAS 1 'Presentation of financial statements - Capital
disclosures' which introduces new disclosures relating to financial instruments.
The impact on the 2006 comparatives has been to reclassify interest rate swaps
and forward foreign exchange contracts from accruals and deferred income to
derivative financial instruments and to reclassify amounts between financing
income and financing costs.

IFRS 8 'Operating segments' has been adopted by the Group in 2007. IFRS 8
replaces IAS 14 'Segment reporting'. The new standard requires a 'management
approach', under which the segment information is presented on the same basis as
that used for internal reporting purposes. This has resulted in an increase in
the number of reportable segments presented. In addition, the segments are
reported in a manner that is consistent with information provided to the chief
operating decision maker. Comparatives for 2006 have been restated.

The financial information set out herein does not constitute the Company's
statutory report and accounts for the year ended 31 December 2007.  Statutory
accounts for 2007 will be delivered to the Registrar of Companies following the
Company's annual general meeting.  The auditor has reported on those accounts;
their report was unqualified and did not contain statements under 237(2) or (3)
of the Companies Act 1985.  Copies of the 2007 annual report and accounts will
be made available on our website and mailed to shareholders if they have elected
to receive hard copies.  They will also be available from the registered office
of the Company, 200 Gray's Inn Road, London, WC1X 8HF.

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