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Tuesday 24 May, 2005


Final Results



LONDON 24 May 2005: EMI Group plc today announces its preliminary results for
the year ended 31 March 2005:

  * EMI Group turnover declined by 5.1% at constant currency, with EMI Music
    Publishing turnover increasing by 4.9% and EMI Music turnover declining by
  * EMI Group's digital sales more than tripled to £49.7m, representing 2.5% of
    total Group turnover for the year and 3.5% in the final quarter
  * Group operating margin increased to 12.0% from 11.8%
  * EMI Music's previously announced restructuring initiatives delivered cost
    savings of £35m in the year, £10m ahead of plan, with a further £15m of
    savings expected in the current year
  * Group Profit before tax, amortisation and exceptional items (Adjusted PBT)
    was £141.9m, in line with the 15 April trading update, and compares to £
    163.3m in the prior year
  * Adjusted diluted EPS of 13.0p compared to 15.5p in the prior year
  * Full-year dividend maintained at 8.0p per share
  * EMI maintains its positive outlook on the global recorded music market as
    declines in physical music sales continued to moderate during the year and
    digital music sales grew at a very rapid pace
Eric Nicoli, Chairman of EMI Group said, "In a still challenging trading
environment we have seen some encouraging market trends and have made strategic
progress in the past year.  EMI Music Publishing achieved strong growth in both
sales and profits.  EMI Music's sales fell short of our original expectations
due, in part, to lower than anticipated reorders in the fourth quarter and the
rescheduling of two major album releases.  The impact on the overall results
for the Group was partially mitigated by the successful implementation of our
restructuring programme at EMI Music which delivered cost savings ahead of
plan.  We remain positive on the outlook for the music industry and expect to
deliver an improved performance in the year ahead."


EMI Group plc

Amanda Conroy              Corporate Communications     +44 20 7795 7529       
Claudia Palmer             Investor Relations           +44 20 7795 7635       
Susie Bell                 Investor Relations           +44 20 7795 7971       

Brunswick Group LLP

Patrick Handley                                         +44 20 7404 5959       

A live webcast of EMI's presentation to investors and analysts will take place
at 10:15 am (UK time) today, 24 May, and can be accessed via the company's web
site, An archive will be available for viewing shortly

Interviews with Eric Nicoli, Chairman, and Martin Stewart, Group Chief
Financial Officer, in video, audio and text are available on



Part I

EMI Group Operating Overview


Global music market conditions continued to improve during the year. A key
driver has been the very rapid growth in legitimate digital music. For the
year, digital music represented more than two percent of the global music
market as compared to last year when sales had just started to take off. We
remain confident that digital music will drive the industry forward at
attractive growth rates in the coming years and that it will become a
significantly larger proportion of our business.

We are also encouraged by trends in global physical music sales, where declines
continued to moderate. During the year we saw a considerable improvement in
Continental Europe, one of the most challenging regions in recent years. While
we still saw a decline in value year-on-year, the magnitude of decline has
significantly reduced, particularly in the key German and French markets. We
also saw a notable improvement in the Japanese and Latin American markets. The
North American market softened during the year, particularly during our second

EMI Music

EMI Music's performance for the financial year was impacted by lower than
anticipated reorders in the fourth quarter and the rescheduling of two major
albums into the current financial year.

During the year, we successfully completed our announced restructuring
initiatives at EMI Music, including the outsourcing of manufacturing in the
United States and Europe and the restructuring of some of our labels in
particular in Continental Europe. These initiatives delivered combined costs
savings of £35m in the year, £10m ahead of plan. The remaining £15m of
annualised savings are expected to be realised in the current financial year,
bringing the total annualised cost savings to £50m. We continue to be focused
on improving our overall efficiency through efforts targeted at procurement and
marketing effectiveness together with our IT change programme.

EMI Music has continued to invest in artist development, the core of our
business, and has a strong track record of developing artists who have success
on a multiple-album basis. Top sellers in the year included albums from Robbie
Williams, Tina Turner, Norah Jones, Beastie Boys, Blue, Kylie Minogue, Lenny
Kravitz, Chingy and Moby. During the year, EMI Music continued to build upon
the initial success of newer superstars, Joss Stone, Keith Urban and
Yellowcard. We are continually strengthening our active roster of global
superstars which numbers nearly 50 artists.

EMI Music is aggressively pursuing the digital market. During the year, we have
worked hard to put in place the right digital partnerships globally to ensure
that, as an owner of digital content, we maximise this opportunity.

EMI Music Publishing

EMI Music Publishing has further strengthened its position as the leading
global music publisher. We continued to sign today's very best song-writing
talent during the last financial year, including Eminem and Scissor Sisters,
and we continue to lead the industry in our ability to maximise revenues from
the songs in EMI's exceptional catalogue.

During the year, EMI Music Publishing has been at the forefront of the digital
market development including, in December 2004, the ground-breaking agreement
between EMI Music Publishing and Sony BMG on new digital products for the US
and Canadian markets. We are committed to capturing the full benefits of
digital and, looking ahead, we expect both the digital opportunity and improved
conditions in the recorded music market to drive attractive growth.

Content protection

We continue to be extremely active in our fight against piracy. During the
year, we saw industry lawsuits against illegal file sharers launched across
Europe, in addition to those in the US, bringing the total number of lawsuits
initiated internationally to nearly 12,000.

The IFPI (the world-wide recording association) has published evidence to
indicate that our initiatives are having an impact. Overall, the number of
infringing music files on the Internet has dropped from a peak of 1.1 billion,
in April 2003, to 870m, in January 2005, a drop of 21%. This decline is even
more impressive given that, during the same time period, global broadband
penetration, a facilitator of online piracy as well as legitimate digital
distribution, grew by 75% from 80m to 140m households worldwide. KaZaA, which
used to be the largest and most popular file-sharing service, has seen its user
figures drop by approximately 45% (from 4.2m to 2.3m average concurrent users)
since the start of the warning and litigation campaign.

Our anti-piracy effort has included, and will continue to include, many
initiatives in addition to lawsuits. We are also working closely with
governments around the world to introduce and enforce intellectual copyright
protection. Above all, we believe that the introduction of new and exciting
legitimate digital music consumer offerings is a critical element in the fight
against piracy.


In January, we announced a succession plan for EMI Music Publishing and the
appointment of a new Group Chief Financial Officer.

Roger Faxon, who was the Group's CFO, returned to EMI Music Publishing where he
is now President and Chief Operating Officer. Roger is to become joint CEO of
EMI Music Publishing, with Martin Bandier, in April 2006 and sole CEO in April
2007 when Martin Bandier will become full-time Chairman. In 2008, Roger will
succeed Martin Bandier as Chairman and Martin Bandier will act as a consultant
to the division for a further three years.

Martin Stewart has taken up the position of Group CFO and, on 1 February 2005,
was appointed to the Board of EMI when Roger stood down.


EMI Group is a music-content company. We are focused on building shareholder
value by developing the best musical content at EMI Music and EMI Music
Publishing and fully exploiting this unique content on a global basis through
all viable and economically attractive channels. New formats, uses, outlets and
channels for our music content, particularly those related to digital music,
are providing real growth to our markets. We continue to invest in a structured
manner to yield the greatest value from our music content and the new
opportunities brought about by digital.

Looking to the year ahead, we remain positive on the outlook for the music
industry and expect to deliver an improved performance. EMI Music's portfolio
of releases should drive market share gain and increased profitability. The
positive momentum at EMI Music Publishing should continue. Both businesses will
benefit from improving long-term recorded music market trends, driven by
continued strong growth in digital music.

Part II

Financial review


Reported Group turnover fell by 8.4% or £177.9m to £1,942.8m. The decline,
excluding exchange movement, was 5.1% or £107.1m. The adverse exchange movement
was largely driven by a decline in the weighted average rate of the US Dollar
against Sterling from $1.70 last year to $1.85 in 2004/05.

At constant currency, turnover in EMI Music fell by 7.4%, declining in all
regions apart from Latin America. The disappointing level of reorders for
second-half releases and the slippage of two major albums out of the financial
year was partially offset by stronger catalogue sales.

At constant currency, turnover in EMI Music Publishing was up on the prior year
in all geographic regions and by 4.9% at a divisional level. The increase in
turnover was driven by strong growth in performance, synchronisation and other
revenues. Mechanical revenues were below the prior year, driven by the decline
in the global recorded music market.

Group digital sales increased to £49.7m from £15.1m in the prior year, an
increase of 329% at constant currency. Digital sales represented 2.5% of total
Group turnover for the year, with the percentage increasing sequentially during
the year from 2.2% in the first quarter to 3.5% in the fourth quarter.


During the course of the year, all costs were tightly controlled.
Administration expenses were reduced by £31.6m and gross margin, after
distribution costs, improved from 35.3% to 35.7%.

Royalty and copyright costs, manufacturing and distribution costs together with
marketing and promotion costs are all largely variable with turnover. They
have, therefore, declined in absolute terms but, as a result of greater
efficiencies, there has been a relative improvement particularly in marketing
and promotion costs. Group corporate costs were higher in the year due to
increased legal and regulatory costs.

The cost structure was improved over the year by the outsourcing of
manufacturing in the United States and Europe and the restructuring of some of
our record labels, particularly in Continental Europe. These initiatives
delivered savings of £35m in the year and are expected to deliver further
savings of £15m in the current financial year, bringing the total annualised
cost savings to £50m.

Operating profit

Group operating profit (EBITA) declined by £16.4m or 6.6% from £249.3m to £
232.9m. Excluding exchange the decline in EBITA was £8.7m or 3.5%.

EMI Music reported EBITA of £132.7m, a decline of £11.8m or 8.0% at constant
currency on the prior year. The EBITA contribution from the Continental Europe
region increased significantly in the year but this improvement was more than
offset by declines in North America and Asia. Operating margin remained
constant at 8.6%, further evidence of the Group's determination not to chase
unprofitable sales and its ability to control costs.

EMI Music Publishing reported EBITA of £100.2m, a growth of 3.0% at constant
currency on the prior year. Operating margin declined from 25.6% to 25.0%. This
decline in margin was primarily attributable to an increase in allocated
corporate costs.

Group operating margin increased again from 11.8% to 12.0%,.

Other items affecting earnings

Recurring Group finance charges rose by £6.2m to £92.1m. This reflected both a
2.3% increase in average net borrowings as well as increases in interest rates
in both the UK and the US, two of our major funding territories.

Adjusted profit before tax fell from £163.3m to £141.9m, driven by the decline
in turnover.

The Group tax rate, before amortisation and exceptional items, was 22% against
19.9% in the prior year. The increased rate reflected a movement in
profitability towards countries in Continental Europe, where our marginal tax
rate is higher, and away from the US, where there are brought-forward losses
available for offset.

The charge in respect of the amortisation of copyrights and goodwill at £50.7m
was slightly down from last year's total of £50.9m.

After material operating exceptional costs of £138.3m in 2003/04, there were no
operating exceptional costs to report this year. Similarly, after taking
non-operating exceptional costs of £16.5m in 2003/04, there was a credit in
2004/05 of £0.8m, being the profit on the sales of properties. There were no
finance exceptional costs to report in 2004/05 in comparison with a charge of £
10.2m in the previous year.

The minority interest cost has reversed from a credit of £0.9m in the previous
year to a charge of £4.3m this year. This is the consequence of the recorded
music business in Japan, in which there is a 45% minority, returning to profit
after falling into losses after operating exceptional costs last year.

Profit attributable to members of the Holding Company was £56.3m against a loss
last year of £71.6m.

Adjusted basic earnings per share were 13.5p, compared with 15.8p. On a diluted
basis, treating outstanding convertible debt and outstanding share options as
equity, adjusted earnings per share were 13.0p. The Board is recommending a
final dividend of 6.0p per share to maintain the total dividend of 8.0p per

Cash flow and net borrowings

Improvement in cash conversion and overall cash management remains a key area
of focus for the Group. The net cash inflow from operating activities was £
221.4m. This represented a significant reduction from last year's inflow of £
309.4m, reflecting two primary factors. First, the reduced inflow comes after
deducting £60.3m in respect of cash spend on the restructuring programmes
announced on 31 March 2004. Secondly, the inflow from improved working capital
management was £25.2m for the year, compared to £58.3m in the prior year.

After the net cash inflow from operating activities, we had cash outflows of £
101.6m for finance charges, £32.7m for taxation, £108.5m for investment
activity (notably the final payment of £42.3m in respect of Jobete and deferred
consideration payments in respect of Mute and Hit and Run), and £62.9m for
dividends, giving an overall cash outflow before exchange differences of £
84.3m. Net of receipts from the issue of shares of £1.7m and a gain on
translation of £1.8m, year-end net debt has increased by £80.8m, from £748.7m
to £829.5m.


EMI maintains a number of defined benefit plans around the world, the largest
of which is in the UK. As a consequence of the triennial valuation of that plan
as at 31 March 2003, the Group resumed annual contributions in respect of
future service to the UK fund with effect from 1 April 2004. This resulted in a
cash cost of approximately £6.5m with no profit and loss impact due to the
accounting treatment as determined by SSAP 24. These contributions will
continue until the outcome of the next triennial valuation, as at 31 March
2006, is known and future funding requirements can be determined.

Adoption of International Financial Reporting Standards (IFRS)

The Group expects to publish its first financial statements under IFRS for the
six months to 30 September 2005 and for the year ending 31 March 2006.

The Group intends to announce the impact of IFRS on its financial statements in
early July. It is anticipated that the areas of most significant impact in 2005
/06 will all be non-cash items and will comprise:

  * the inclusion of the valuations of the defined benefit pension schemes,
    notably that in the UK, on the balance sheet and the inclusion of
    equivalent service cost and financing cost information in the Profit and
    Loss Account;
  * other effects on financing charges including revaluation movements on our
    convertible bond and exchange movements on foreign currency denominated
  * the inclusion of share-based pay awards as an overhead cost;
  * the replacement of automatic amortisation of goodwill with annual
    impairment reviews.
Part III

EMI Music operating review

Market overview

EMI Music continues to operate in a marketplace that is undergoing significant
change, primarily driven by the rapid development of digital music. Market
trends during the financial year lead us to remain positive on the outlook for
the global recorded music market and optimistic about the opportunities digital
will continue to bring.

The global recorded music market, combining physical and digital music sales,
declined by only an estimated 1.0% during the year, a significant improvement
on the 5.6% decline reported in the prior year.

While market conditions remain mixed by region, we have seen improving trends
in physical music sales year-on-year in nearly all regions. Most encouraging
has been the improvement seen in Continental Europe, particularly in the second
half of the financial year. This improvement has been driven by a significant
reduction in the rate of decline in the key German and French markets. We also
saw a notable improvement in the Japanese and Latin American markets. The North
American market softened during the year, particularly during our second half.

Music video continued to be a growing segment of the global physical industry,
up 6.3% on the prior year. We see increasing market opportunities for higher
value-added physical music product that delivers increased music content to
consumers and we are working on the development and introduction of new formats
and products, for example DualDisc.


The rate of development of the digital music marketplace during the year has
been very rapid and reaffirms our confidence that digital music will represent
a very significant proportion of our business in the coming years. Digital
market development to date varies significantly by region, with mobile music
products dominating the Asian markets, in particular Japan, downloads leading
the North American market and a combination of both being seen in the UK and
Continental Europe. We believe this variation will lessen in years to come
largely as a result of the roll-out of technological advances.

Importantly, a number of large organisations recognise the digital music
opportunity and have committed significant resources to drive forward the
development of this marketplace, particularly in the form of marketing
expenditure. Specifically, in the past year we saw the launch of iTunes in
Europe, a new digital download and music subscription service from Yahoo! Music
Unlimited in the US, MSN Music on a global basis, Vodafone live! with 3G in the
UK, the relaunch of Napster and the introduction of Napster To Go and

As an owner of digital music content, we believe that EMI is extremely well
positioned to capitalise on this growth. Our strategy remains to deliver our
music content to consumers in any form, at any time and in any place. As such,
we have been working very hard to put in place the right digital partnerships
globally to ensure that, as well as maximising the digital opportunity, we also
secure the right value for our exclusive music content. We are making good
progress with our IT investment programme, which is designed to enable us to
efficiently capture the increased revenue opportunities we see in the digital

EMI Music delivered digital sales of £35.6m for the financial year, an increase
of more than 300% on the prior year with digital sales now representing 2.2% of
total revenues.

Performance review

Despite this improved market backdrop, EMI Music had a challenging year because
of, in part, the changes to the release schedule and the lower than anticipated
re-orders in the fourth quarter. This resulted in a disappointing second half
performance, with the portfolio underperforming both our own expectations and
the global music market. For the year, EMI Music sales declined by 7.4% at
constant currency and market share fell to 12.9% from 13.5% in the prior year.
Prior year global market share has been restated to reflect exchange rate

In particular, the change of release dates of two major albums, X&Y from
Coldplay and Demon Days from Gorillaz, from the last financial year to the
current financial year, had a significant impact on the results. While we
tightly manage the release schedule, recording music is a creative process and
there can be instances where changes to the release schedule may adversely
affect results for a specific financial reporting period. Both albums will be
released in the first quarter of the current financial year and are expected to
be major sellers.

We also saw our major second-half releases underperforming, with reorder levels
being lower than anticipated in the fourth quarter. We are confident that this
is not a reflection of the broader portfolio and we have seen our more recent
releases performing well including albums from Moby, Chemical Brothers, Faith
Evans and Athlete.

The year had some notable successes. Robbie Williams' Greatest Hits was the
best-selling album during the financial year, achieving sales of over 6m units.
This album was hugely successful on a global basis and was number one in 18
countries. It was the industry's sixth best-selling album worldwide during
2004. In February 2005, Robbie Williams received the British music industry's
award for the best song of the past quarter century for Angels. Robbie Williams
is now recording his next album which is planned for release in the current
financial year.

In 2004, Joss Stone developed into a global superstar. Her latest album, Mind,
Body & Soul, has sold 2.8m units since its release in August and her first
album, The Soul Sessions, also continued to sell well throughout the year. Joss
Stone's enormous talent was further recognised when she received BRIT awards
for British Female Solo Artist and British Urban Act.

Norah Jones's albums, Feels Like Home and Come Away with Me, both released in
prior financial years, together sold nearly 4m units during the year.

The Now compilations enjoyed success both in the US (where Now 17 sold 3.5m
units) and in the UK and Europe (where three Now albums each sold more than 1m

As a music-content company, artist and repertoire (A&R) is core to our business
and is a key focus for us. Our strategy has been, and continues to be, the
development of long-term career artists who will enjoy success on a
multiple-album basis. During the year, we built upon the initial success of new
superstars, Joss Stone, Keith Urban and Yellowcard, all of whom we believe will
have long, productive and successful careers. Through breaking new artists, we
are continually strengthening our active roster of global superstars, which now
amounts to nearly 50 artists including Robbie Williams, Coldplay, Norah Jones,
Kylie Minogue, Moby, Lenny Kravitz, Daft Punk, Gorillaz, Beastie Boys, Paul
McCartney, the Rolling Stones, Tina Turner and Hikaru Utada.

During the year, we continued to focus on superior catalogue marketing,
maximising the revenues of our exceptional catalogue of recordings. Dino: The
Essential Dean Martin, which sold 1m units during the year, is a good example
of our ability to repackage prior recordings into new, compelling works. Other
top-selling catalogue albums were The Beatles' 1 and The Beach Boys' The Sounds
of Summer.

Geographic review

North America

Our North American business had a challenging year, following a very successful
prior year, resulting in a loss of market share. This disappointing performance
in part reflects the slippage of albums from Coldplay and Gorillaz and, also, a
number of releases selling less than we had anticipated. Top-selling albums for
the year included those from Beastie Boys, Keith Urban, Yellowcard, Chingy,
Joss Stone and Anita Baker.

Digital music sales in North America more than doubled during the year. The
market continued to be dominated by digital track downloads which, according to
Soundscan data, now represent more than 4% of the total US music market in
terms of unit sales on an album-equivalent basis. This is broadly in line with
the proportion of EMI Music's digital sales in the region. Apple's hugely
successful iPod and iTunes continued to drive market development. We have also
seen the launch of other digital services including a download service from
Microsoft, MSN Music, and subscription-based services such as Napster to Go and
Yahoo! Music Unlimited. Mobile music remains relatively undeveloped but we
expect this to change with advances in mobile technology in the region.

We continue to focus on building the breadth and depth of our North American
artist roster. During the year, we created a new division at our Virgin label,
Virgin Records Urban Music, which is headed by the proven hit-maker and
producer, Jermaine Dupri. This will add to our range of creative sources in
North America which includes the Capitol, Christian Music Group, Capitol
Nashville and Blue Note labels.

EMI recognises that building its North American roster and repositioning the
business is a multi-year effort which began to show some promising results in
the prior financial year. We view the past year's sales performance as a
temporary setback; the business remains profitable and we feel that our record
labels are on the right path creatively. The current financial year has got off
to a good start with, in particular, strongly performing releases from Dierks
Bentley and Faith Evans.

UK & Ireland

The UK & Ireland business gained market share during the year reflecting a
consistent stream of good releases. This included successful albums from
established artists, such as Robbie Williams, Kylie Minogue, Phil Collins,
Blue, Tina Turner and Chemical Brothers, as well as those from developing
artists, such as Joss Stone, Athlete and Jamelia.

The overall regional performance was impacted by the change in release timings
of albums from Coldplay and Gorillaz, both repertoire from the UK & Ireland

Digital saw massive growth in the UK during the year, driven by the launch of
iTunes in June 2004 and the development of the mobile music market. In October,
EMI Music agreed a deal with The Carphone Warehouse, which made Robbie Williams
the first-ever artist to release an entire album plus video content on a memory
card that slots straight into a mobile phone. This deal is just one example of
the new and exciting music formats and opportunities digital music brings.

Continental Europe

Our Continental European business had a good year, gaining market share and
significantly increasing its level of profitability. After a number of very
challenging years, we are seeing the benefits from our restructuring
initiatives in this region, strengthening what has traditionally been a very
solid base for EMI.

In particular, our Italian business went from strength to strength with
significant market share gains during the year. Albums from local artists,
Vasco Rossi and Tiziano Ferro, were both major sellers. We also enjoyed good
market share gains in France and Spain reflecting, in part, the successful
implementation of our restructuring initiatives.

Other major-selling albums from local artists included Cali from France, Amaral
from Spain and Wir Sind Helden and Helmut Lotti from Germany. Top-selling
international artists included Robbie Williams, Blue, Tina Turner, Norah Jones,
Moby and Joss Stone and Kylie Minogue.

We have seen strong growth in digital in Continental Europe during the year. In
this region, digital sales are predominantly from downloads although we are
seeing a good contribution from mobile music products, with a higher proportion
than in the US and UK.


Japan saw a decline in market share for the year, largely as a result of a
lighter release schedule and, in particular, the lack of new releases from
local superstars. During the year we have taken a number of steps to broaden
our Japanese roster and increase the development of new local talent. As
always, roster development takes time.

Major sellers during the year included a new release from Nori Makihara, new
singles collections from Glay and Yaida Hitomi, and good sell through on Hikaru
Utada's singles collection. Top-selling international artists included Beastie
Boys, Blue and Norah Jones.

The digital market grew significantly during the year driven by the rapid
development of ring tune penetration in the mobile phone market. The launch of
new mobile products, such as ring backs and ring videos, provided exciting new
consumer offerings.

South East Asia

South East Asia benefited from improving market conditions during the year but
this was largely offset by a modest loss in market share. China saw a very
significant increase in sales, reflecting aggressive development of local
repertoire. We expect China to be a key growth driver for the region in the
coming years.

Major-selling local artists during the year included S.H.E., David Tao, ADA
Band, Rene Liu and Elva Hsiao. Top-selling international artists included
Robbie Williams, Norah Jones and Blue.


Our Australasian business gained market share during the year but overall
performance was impacted by difficult market conditions. Success in the region
during the year was driven by strong local releases including albums from Jet,
Missy Higgins and Kasey Chambers. Top-selling international artists included
Robbie Williams, Norah Jones and Joss Stone.

The digital market in Australasia remains relatively immature, with the launch
of iTunes eagerly awaited and the expansion of the telecoms networks to 3G
still to happen.

Latin America

Latin America had a very good year with market conditions greatly improved and
EMI gaining significant market share. Strong sales growth resulted in the
region returning to profitability during the year. Mexico, Argentina and
Colombia were key growth drivers of the business.

Major-selling local artists during the year included Intocable, RDB,
Quintanilla III, Legiao Urbana and Aleks Syntek. Top-selling international
artists included Robbie Williams and Tiziano Ferro.

Part IV

EMI Music Publishing operating review

EMI Music Publishing continued its strong track record of achievement,
delivering constant currency sales growth of 4.9% for the financial year. Given
the backdrop of a changing and still challenging global music market, this
performance demonstrated the superiority of EMI Music Publishing's song
catalogue, creative approach, marketing capabilities and operating efficiency.
These important attributes position us to take advantage of all of the new and
growing uses of songs that are emerging around the world.

As always, a broad range of songs - both current hits and classics created
years ago - contributed to this year's performance. Notable successes from
recent releases included songs by Natasha Bedingfield, Jamie Cullum, Eminem,
Good Charlotte, Alan Jackson, Jay-Z, Kelis, Alicia Keys, Kylie Minogue, Scissor
Sisters, Jessica Simpson, Usher, Hikaru Utada, Kanye West and Pharrell

Through aggressive marketing of our songs, performance and synchronisation
revenues continued to be important drivers of growth as mechanical revenues
remained under pressure from industry conditions. We also benefited from our
continued focus on improving collection efficiency from users and the national
collection societies and ensuring proper payment for the use of our copyrights.
The use of songs in digital applications, such as ring tones, continued to
generate high rates of growth.

Regionally, our North American business continued to deliver good sales gains
on a local currency basis. Through our effective song marketing approach, we
once again achieved double-digit growth in synchronisation revenue in this
business. Our UK business generated revenue gains in all income types, most
notably in performance and mechanical revenue reflective of the high
chart-share positions achieved in the last year. Sales in Continental Europe
were marginally higher than last year at constant currency but mechanical
revenues were under pressure in territories such as France, Germany, Spain and
Scandinavia, where the recorded music industry remained especially difficult.
In Japan, we generated attractive overall sales growth on a local currency
basis, driven by gains in synchronisation income as well as higher mechanical
income, largely due to the Queen Jewels collection and Hikaru Utada.

Mechanical revenue

Mechanical royalties, derived primarily from the sales of recorded music
products, now represent less than 45% of our total publishing revenues, down
from over 56% of the total five years ago. Mechanical revenues declined by 6.3%
at constant currency for the year. Given the time lag in receiving royalties
from collection societies, mechanical revenues were negatively affected by the
prior period's decline in the global recorded music market and the phasing of

Performance revenue

Performance revenues, earned when a song is performed live on stage, played in
a bar or broadcast on the radio or television, grew by 7.7% at constant
currency for the year. This high growth was driven by a range of factors
including continued expansion of media outlets and channels around the world,
improved tracking and collection efforts and strong chart positions for our
songs, particularly in pop and urban music. Performance revenues have been a
source of growth for EMI in each of the past seven years and this income type
now contributes almost 27% of total publishing revenues.

Synchronisation revenue

Our synchronisation revenues continued to generate attractive growth,
increasing by 13.2% at constant currency for the year. Synchronisation revenue
is generated by the use of songs in audiovisual works such as advertisements,
television programmes, films, computer games and in mobile phones. Important
synchronisation licences for advertising were signed with companies including
General Electric, Philips Electronics, Fisher Price, Pepsi, Maxwell House
Coffee and Renault. Recent successes in licensing our songs to television
programmes included: American Idol, The CBS Early Show, CSI, One Tree Hill and
the OC and to films such as: Bridget Jones: The Edge of Reason, Coach Carter,
Hitch, Shark Tale, Spider Man 2 and Shrek 2.

These successes demonstrate that we have continued to achieve effective
execution of our strategy of combining a strong customer orientation with a
superior understanding of how our songs can improve an audiovisual work. This
proactive approach has enabled us to be the best at meeting the creative needs
of content creators and music producers. Our synchronisation revenue has grown
consecutively for more than ten years and this category now represents over 17%
of our total publishing revenues.

Other revenue

Other revenue, which includes income from uses such as print, stage
productions, background library, some ring tones and other miscellaneous uses,
increased by £13.8m and currently represents less than 12% of revenues.
Important drivers of growth in other revenue during the year have been ring
tones, stage productions such as Mamma Mia and We Will Rock You, and payments
for enforcing payment for the use of our copyrights.


The use of songs in new digital applications is an attractive and fast-growing
opportunity. Our digital sales grew sharply during the year, contributing over
£14m to our revenues, and were up 90% at constant currency from the prior year.
Digital revenues now represent 3.4% of EMI Music Publishing's total revenues,
compared to 2% in the prior year. Revenues from digital music are currently
classified amongst the various revenue categories - mechanical, performance,
synchronisation and other - based on the varying status of these new uses in
different countries.

The use of songs in mobile phones, particularly via ring tones, continued to be
the most significant early digital revenue contributor. Consumer acceptance of
these new musical products has been very positive, with especially high
interest in Asia and, increasingly, in Europe. In the US, mobile song use is at
a relatively early stage with the potential for very attractive growth in the
coming years as phone and compression technologies improve.

EMI Music Publishing has continued to be at the forefront of maximising royalty
generation from digital music products. In December, EMI finalised an agreement
with Sony BMG that will facilitate the introduction of a wide range of digital
offerings in North America. Ground-breaking agreements such as this are
instrumental in driving new digital music product development. The collection
societies play an important role in ensuring that publishers and songwriters
fully benefit from the many new digital uses. EMI has been working to focus
these third parties on faster identification of new product offerings, rate
setting and royalty collection from the varied digital song customers. Progress
with some of these third parties has been slower than desired, with the
development of the necessary reporting systems still at an early stage.

We are well positioned to benefit from the anticipated global growth of other
digital song uses such as music and video downloads, subscription services,
ring tunes and ring backs. We already have an extensive global network and
effective song-based royalty processing systems that, together with our high
quality song catalogue, enable us to grow flexibly as each type of digital
product gains acceptance.



(a)      Financial highlights for the year ended 31 March 2005.               
(b)      Consolidated profit and loss account for the year ended 31 March     
(c)      Consolidated balance sheet at 31 March 2005.                         
(d)      Statement of total recognised gains and losses for the year ended 31 
         March 2005.                                                          
(d)      Reconciliation of movements in shareholders' funds for the year ended
         31 March 2005.                                                       
(e)      Consolidated cash flow statement for the year ended 31 March 2005.   
(f)-(g)  Notes to the consolidated cash flow statement for the year ended 31  
         March 2005.                                                          
(h)-(o)  Notes to the accounts for the year ended 31 March 2005.              

                                                                Attachment (a)


for the year ended 31 March 2005

                                                2005         2004             
                                                  £m           £m             
Group turnover                               1,942.8      2,120.7             
EBITDA (i)                                     256.8        284.3             
Group operating profit (EBITA)                 232.9        249.3             
Adjusted PBT (iii)                             141.9        163.3             
Profit (loss) before taxation                   91.8       (52.8)             
Adjusted diluted earnings per                  13.0p        15.5p             
share (iv)                                                                    
Basic earnings per share                        7.2p       (9.1)p             
Dividend per share                              8.0p         8.0p             
Return on sales (v)                            12.0%        11.8%             
Interest cover (vi)                             3.0x         3.3x             

 (i)  EBITDA is Group operating profit before operating exceptional items,     
      depreciation and amortisation of goodwill and music copyrights.          
(ii)  Group operating profit (EBITA) is before operating exceptional items and 
      amortisation of goodwill and music copyrights.                           
(iii) Adjusted PBT is before operating and non-operating exceptional items,    
      amortisation of goodwill and music copyrights.                           
(iv)  Adjusted diluted earnings per share is before operating and non-operating
      exceptional items, amortisation of goodwill and music copyrights.        
 (v)  Return on sales is defined as Group operating profit before operating    
      exceptional items and amortisation of goodwill and music copyrights as a 
      percentage of Group turnover.                                            
(vi)  Interest cover is defined as the number of times EBITDA is greater than  
      Group finance charges, excluding non-periodic interest and exceptional   

                                                                 Attachment (b)


for the year ended 31 March 2005

                                                       2005                 2004
                                          Total      Before     Before     Total
                                                excep items      excep          
                                                   & amortn    items &          
                                             £m          £m         £m        £m
Group turnover (note 2)                 1,942.8     1,942.8    2,120.7   2,120.7
Group operating profit before             232.9       232.9      249.3     249.3
exceptional items and amortisation                                              
Operating exceptional items (note 3)          -           -          -   (138.3)
Group operating profit before             232.9       232.9      249.3     111.0
Amortisation                             (50.7)           -          -    (50.9)
Group operating profit* (note 2)          182.2       232.9      249.3      60.1
Share of operating profits (losses)         0.9         1.1      (0.1)     (0.3)
in associated undertakings                                                      
Total operating profit                    183.1       234.0      249.2      59.8
Non-operating exceptional items             0.8           -          -    (16.5)
Profit before finance charges             183.9       234.0      249.2      43.3
Finance charges (note 4)                 (92.1)      (92.1)     (85.9)    (96.1)
Profit (loss) on ordinary activities       91.8       141.9      163.3    (52.8)
before taxation                                                                 
Taxation on profit (loss) on ordinary    (31.2)      (31.2)     (32.5)    (19.7)
activities (note 5)                                                             
Profit (loss) on ordinary activities       60.6       110.7      130.8    (72.5)
after taxation                                                                  
Minority interests (equity)               (4.3)       (4.3)      (6.5)       0.9
Profit (loss) attributable to members      56.3       106.4      124.3    (71.6)
of the Holding                                                                  
Dividends (equity) (note 6)              (63.2)                           (62.5)
Transfer (from) to profit & loss          (6.9)                          (134.1)
* The following items are included within                                       
Group operating profit                                                          
Cost of sales                         (1,225.3)   (1,179.5)  (1,286.0) (1,404.7)
Gross Profit                              717.5       763.3      834.7     716.0
Distribution costs                       (69.6)      (69.6)     (85.1)    (92.0)
Administration expenses                 (504.0)     (499.1)    (530.7)   (583.5)
Other operating income, net                38.3        38.3       30.4      19.6

Earnings per share (EPS)                  2005                             2004
Basic earnings per Ordinary Share (note   7.2p                           (9.1)p
Diluted earnings per Ordinary Share       7.2p                           (9.1)p
(note 7)                                                                       
Adjusted basic earnings per Ordinary     13.5p                            15.8p
Share (note 7)                                                                 
Adjusted diluted earnings per Ordinary   13.0p                            15.5p
Share (note 7)                                                                 
Adjusted earnings are included as they provide a better understanding of the   
underlying trading performance of the Group on a normalised basis.             

Average exchange rates for the year       2005                             2004
US Dollar to £1                           1.85                             1.70
Euro to £1                                1.46                             1.45
Yen to £1                               198.32                           191.67
The results for the year have been translated into Sterling at the appropriate 
average exchange rates.                                                        

                                                                 Attachment (c)

at 31 March 2005

                                                             2005          2004
                                                               £m            £m
Fixed assets                                                                   
Music copyrights                                            402.8         448.7
Goodwill                                                     33.2          31.8
Tangible fixed assets                                       183.1         202.7
Investments                                                  22.9          19.3
                                                            642.0         702.5
Current assets                                                                 
Stocks                                                       28.2          28.1
Debtors: amounts falling due within one year                720.8         722.6
Debtors: amounts falling due after more than                 79.5          88.3
one year                                                                       
Investments: liquid funds (note 8)                            1.6           1.8
Cash at bank & in hand and cash deposits (note              240.9         343.4
                                                          1,071.0       1,184.2
Creditors: amounts falling due within one year                                 
Borrowings (note 8)                                        (30.0)        (35.8)
Other creditors                                         (1,292.7)     (1,353.5)
                                                        (1,322.7)     (1,389.3)
Net current liabilities                                   (251.7)       (205.1)
Total assets less current liabilities                       390.3         497.4
Creditors: amounts falling due after more than                                 
one year                                                                       
Borrowings (including convertible debt)                 (1,042.0)     (1,058.1)
Other creditors                                            (10.2)        (12.9)
                                                        (1,052.2)     (1,071.0)
Provisions for liabilities and charges (note 9)            (85.2)       (142.8)
                                                          (747.1)       (716.4)
Capital and reserves                                                           
Called-up share capital                                     110.6         110.4
Share premium account                                       447.3         445.8
Capital redemption reserve                                  495.8         495.8
Other reserves                                              252.2         255.7
Profit & loss reserve (including goodwill               (2,101.3)     (2,091.7)
previously written off)                                                        
Equity shareholders' funds                                (795.4)       (784.0)
Minority interests (equity)                                  48.3          67.6
                                                          (747.1)       (716.4)

Year-end exchange rates                                                        
                                                             2005          2004
US Dollar to £1                                              1.89          1.84
Euro to £1                                                   1.45          1.50
Yen to £1                                                  202.11        191.20
The balance sheet has been translated into Sterling at the appropriate year-end
exchange rates.                                                                

                                                                 Attachment (d)


for the year ended 31 March 2005

                                                        2005               2004
                                                  £m      £m        £m       £m
Profit (loss) for the financial year                                           
Group                                                   55.4             (71.3)
Associates                                               0.9              (0.3)
Profit (loss) for the financial year                    56.3             (71.6)
Currency translation - Group*                  (7.2)              28.0         
Impairment of property and revaluation of      (0.7)              20.7         
music copyright                                                                
Other recognised (losses) gains                        (7.9)               48.7
Total recognised gains and losses relating              48.4             (22.9)
to the year                                                                    
*Net currency losses of £4.7m (2004: losses of £4.5m), which relate to foreign 
currency borrowings to finance investment overseas and the related tax charge  
of £nil (2004: £nil), have been included within the Group currency translation 
movement on reserves.                                                          


for the year ended 31 March 2005

                                                         2005              2004
                                                   £m      £m      £m        £m
Opening shareholders' funds                           (784.0)           (700.4)
Profit (loss) for the financial year             56.3          (71.6)          
Shares issued                                     1.7               -          
Dividends (equity) (note 6)                    (63.2)          (62.5)          
Other recognised (losses) gains                 (7.9)            48.7          
Goodwill adjustments                            (0.3)               -          
Employee Benefit Trust transactions               2.0             1.8          
Net (decrease) in shareholders' funds for              (11.4)            (83.6)
the year                                                                       
Closing shareholders' funds                           (795.4)           (784.0)

                                                                 Attachment (e)


for the year ended 31 March 2005

                                                            2005           2004
                                                              £m             £m
Net cash inflow from operating activities                  221.4          309.4
Returns on investments and servicing of finance                                
Net interest paid                                        (100.3)         (95.4)
Dividends paid to minorities                               (1.3)          (3.5)
Net cash outflow from returns on investments and         (101.6)         (98.9)
servicing of finance                                                           
Tax paid                                                  (32.7)         (30.6)
Capital expenditure and financial investment                                   
Purchase of music copyrights                               (6.0)          (5.1)
Sale of music copyrights                                     0.2            0.4
Purchase of tangible fixed assets                         (29.9)         (51.3)
Sale of tangible fixed assets                                3.3           78.0
Purchase of investments: own shares                        (0.3)          (0.3)
Purchase of fixed asset investments                        (2.9)              -
Sale of fixed asset investments                                -            1.0
Net cash (outflow) inflow from capital                    (35.6)           22.7
expenditure and financial investment                                                                     
Acquisitions and disposals                                                     
Purchase of businesses net of cash acquired                (6.8)         (73.3)
Deferred consideration paid                               (64.1)         (16.1)
Purchase of associated undertakings                        (2.1)              -
Disposal of associated undertakings                          0.1            0.4
Net cash (outflow) from acquisitions and                  (72.9)         (89.0)
Equity dividends paid                                     (62.9)         (62.7)
Net cash (outflow) inflow before management of            (84.3)           50.9
liquid resources and financing                                                                      
Issue of ordinary share capital                              1.7              -
Management of liquid resources (note b)                    (0.8)          (1.7)
Financing (note b):                                                            
   New loans                                                   -          398.5
   Loans repaid                                              1.8        (209.4)
   Capital element of finance leases repaid                (0.1)          (2.1)
Net cash inflow from management of liquid                    2.6          185.3
resources and financing                                                                      
(Decrease) increase in cash (note b)                      (81.7)          236.2

Reconciliation of net cash flow to movement in net debt                        
                                                            2005           2004
                                                              £m             £m
(Decrease) increase in cash                               (81.7)          236.2
Cash outflow from increase in liquid                         0.8            1.7
Cash (inflow) from increase in loans                           -        (398.5)
Cash (inflow) outflow from repayment of                    (1.7)          211.5
Change in net debt resulting from cash                    (82.6)           50.9
Loans acquired                                                 -          (0.4)
Exchange differences                                         1.8           60.6
Movement in net debt                                      (80.8)          111.1
Net debt at beginning of year                            (748.7)        (859.8)
Net debt at end of year                                  (829.5)        (748.7)

                                                                 Attachment (f)

for the year ended 31 March 2005

a) Reconciliation of operating profit to net cash flow from operating

                                                           2005            2004
                                                             £m              £m
Group operating profit                                    182.2            60.1
Depreciation charge                                        23.9            35.0
Amortisation charge:                                                           
Music copyrights                                           45.8            46.9
Goodwill                                                    4.9             4.0
Exceptional non cash write-down                               -            43.1
Goodwill write-down - subsidiaries                            -            18.1
Music copyrights write-down                                   -             4.5
ESOP transactions                                           2.3             2.1
Amounts provided                                            7.8            73.4
Provisions utilised:                                                           
Disposals and fundamental reorganisations                (11.3)               -
Other                                                    (59.4)          (36.1)
(Increase) decrease in working capital:                                        
Stock                                                     (0.1)           (8.0)
Debtors                                                    10.9            59.8
Creditors                                                  14.4             6.5
Net cash inflow from operating activities                 221.4           309.4

b) Analysis of movement in the Group's net borrowings:

                                 At     Cash Acquisitions   Exchange         At
                                        flow            /   movement           
                            1 April                                    31 March
                               2004             disposals                  2005
                                 £m       £m           £m         £m         £m
Cash at bank and in hand      342.7  (101.7)            -      (1.9)      239.1
Overdrafts                   (32.5)     20.0            -        0.7     (11.8)
Cash                          310.2   (81.7)            -      (1.2)      227.3
Debt due after more than  (1,058.0)     13.2            -        2.8  (1,042.0)
one year                                                                       
Debt due within one year      (3.3)   (15.0)            -        0.1     (18.2)
Finance leases                (0.1)      0.1            -          -          -
Financing*                (1,061.4)    (1.7)            -        2.9  (1,060.2)
Investments: liquid funds       1.8    (0.3)            -        0.1        1.6
Cash deposits                   0.7      1.1            -          -        1.8
Liquid resources                2.5      0.8            -        0.1        3.4
Total                       (748.7)   (82.6)            -        1.8    (829.5)
* Cash flow on financing of £(1.7)m is split between new loans of £(128.9)m,   
loans repaid of £127.3m and the capital element of finance leases repaid of £  

                                                                 Attachment (g)

for the year ended 31 March 2005

                                 At     Cash Acquisitions   Exchange         At
                                        flow  / disposals   movement           
                            1 April                                    31 March
                               2003                                        2004
                                 £m       £m           £m         £m         £m
Cash at bank and in hand       99.9    245.4          0.4      (3.0)      342.7
Overdrafts                   (25.0)    (9.6)            -        2.1     (32.5)
Cash                           74.9    235.8          0.4      (0.9)      310.2
Debt due after more than    (920.5)  (198.9)            -       61.4  (1,058.0)
one year                                                                       
Debt due within one year     (12.8)      9.8        (0.4)        0.1      (3.3)
Finance leases                (2.2)      2.1            -          -      (0.1)
Financing*                  (935.5)  (187.0)        (0.4)       61.5  (1,061.4)
Investments: liquid funds       0.5      1.3            -          -        1.8
Cash deposits                   0.3      0.4            -          -        0.7
Liquid resources                0.8      1.7            -          -        2.5
Total                       (859.8)     50.5            -       60.6    (748.7)
*Cash flow on financing of £(187.0)m is split between new loans of £(398.5)m,  
loans repaid of £209.4m and the capital element of finance leases repaid of £  
The following definitions have been used:                                      
Cash: Cash in hand and deposits repayable on demand if available within 24     
hours without penalty, including overdrafts.                                   
Financing: Borrowings, less overdrafts which have been treated as cash.        
Liquid resources: Investments and deposits, other than those included as cash, 
which are readily convertible into known amounts of cash.                      

                                                                 Attachment (h)

for the year ended 31 March 2005

NOTE 1 - ACCOUNTING POLICIES - basis of preparation

The consolidated financial statements are prepared under the historical cost   
convention with the exception of certain tangible fixed assets and in          
accordance with applicable accounting standards. The results for the years     
ended 31 March 2005 and 31 March 2004 represent continuing operations.         
The financial statements have been prepared on the basis of the accounting     
policies set out in the Group's accounts for the year ended 31 March 2005.     
This announcement does not constitute the Group's financial statements for the 
year ended 31 March 2005. The financial statements for the year ended 31 March 
2005 have not yet been delivered to the Registrar. However the auditor has     
issued an unqualified audit report on the financial statements for this year.  


                                                     2005                        2004
                              Recorded      Music   Total Recorded      Music   Total
                                 Music Publishing            Music Publishing        
                                    £m         £m      £m       £m         £m      £m
By class of business:                                                                
Group turnover                 1,542.1      400.7 1,942.8  1,722.8      397.9 2,120.7
Group operating profit           132.7      100.2   232.9    147.4      101.9   249.3
(loss) before                                                                        
exceptional items and                                                                
Operating exceptional            (7.9)     (42.8)  (50.7)  (132.7)     (56.5) (189.2)
items and                                                                            
Group operating profit           124.8       57.4   182.2     14.7       45.4    60.1
Non-operating                      0.8          -     0.8   (16.5)          -  (16.5)
exceptional items                                                                    
Share of operating                 0.4        0.5     0.9    (0.4)        0.1   (0.3)
profits (losses) in                                                                  
associated undertakings                                                              
Finance charges                                    (92.1)                      (96.1)
Profit (loss) on                                     91.8                      (52.8)
ordinary activities                                                                  
before taxation                                                                      
Operating assets                 (3.4)      341.3   337.9   (45.7)      343.7   298.0
Average employees (No.)          6,043        629   6,672    7,373        623   7,996

                                                                 Attachment (i)

for the year ended 31 March 2005


                             United   Rest   Latin   North    Asia  Other   Total
                            Kingdom     of America America Pacific               
                                 £m     £m      £m      £m      £m     £m      £m
By origin:                                                                       
Group turnover                305.8  618.1    55.8   574.9   365.2   23.0 1,942.8
Group operating profit         48.7   86.6     3.2    70.9    18.9    4.6   232.9
(loss) before exceptional                                                        
items and amortisation                                                           
Operating exceptional items   (5.5)  (6.3)   (0.6)  (36.1)   (2.2)      -  (50.7)
and amortisation*                                                                    
Group operating profit         43.2   80.3     2.6    34.8    16.7    4.6   182.2
Non-operating exceptional                                                     0.8
Share of operating profits                                                    0.9
(losses) in associated undertakings                                                          
Finance charges                                                            (92.1)
Profit (loss) on ordinary                                                    91.8
activities before taxation                                                                  
Operating assets               65.8 (45.8)     0.6   265.1    52.9  (0.7)   337.9
Average employees (No.)       1,156  1,623     239   2,124  1,345     185   6,672
By destination:                                                                  
Group turnover                299.0  619.7    33.2   578.0   366.3   46.6 1,942.8

                             United   Rest   Latin   North    Asia  Other   Total
                            Kingdom     of America America Pacific               
                                 £m     £m      £m      £m      £m     £m      £m
By origin:                                                                       
Group turnover                308.6  651.1    44.6   671.9   423.6   20.9 2,120.7
Group operating profit         53.6   62.0   (1.8)    99.2    32.5    3.8   249.3
(loss) before exceptional                                                        
items and amortisation                                                           
Operating exceptional items  (39.1) (58.0)   (1.1)  (62.1)  (25.2)  (3.7) (189.2)
and amortisation*                                                                    
Group operating profit         14.5    4.0   (2.9)    37.1     7.3    0.1    60.1
Non-operating exceptional                                                  (16.5)
Share of operating profits                                                  (0.3)
(losses) in associated undertakings                                                          
Finance charges                                                            (96.1)
Profit (loss) on ordinary                                                  (52.8)
activities before taxation                                                                  
Operating assets               17.8 (52.3)   (0.6)   256.8    76.7  (0.4)   298.0
Average employees (No.)       1,199  2,338     324   2,464   1,403    268   7,996
By destination:                                                                  
Group turnover                304.4  649.2    21.5   678.9   422.1   44.6 2,120.7

* Comprises operating exceptional items of £nil (2004: £(138.3)m) and
amortisation of goodwill and music copyrights of £(50.7)m (2004: £(50.9)m).

                                                                 Attachment (j)

for the year ended 31 March 2005


Operating profit is analysed instead of profit before taxation as finance       
charges are borne centrally and are not allocated to the operating businesses.  
Operating assets include deferred consideration of £0.9m (2004: £69.8m) which   
is not conditional upon the satisfaction of future performance criteria.        
The reconciliation of operating assets to net liabilities is as follows:        
                                                            2005           2004 
                                                              £m             £m 
Operating assets                                           337.9          298.0 
Tax, dividends and net                                   (255.5)        (265.7) 
interest payable                                                                
Capital employed                                            82.4           32.3 
Net borrowings                                           (829.5)        (748.7) 
Net liabilities                                          (747.1)        (716.4) 


(i) Operating exceptional items

                                                            2005           2004
                                                              £m             £m
Impact of retail destocking in Japan, including                -         (16.7)
amended returns terms                                                          
Restructuring and reorganisation costs:                                        
Music Publishing: headcount reduction and system               -          (6.6)
Recorded Music: headcount and roster reduction             (3.8)         (84.5)
and other*                                                                     
Release of overprovision for reorganisation                  3.8              -
costs charged in prior year                                                                     
Asset impairment and other**                                   -         (22.6)
Proposed acquisition of Warner Music - deal                    -          (7.9)
Total                                                          -        (138.3)

* Headcount reduction (£3.8m) (2004: headcount reduction (£51.7m), roster      
reduction (£20.6m), vacant property provisions and asset write-down (£3.5m),   
distribution changes and integration costs (£4.6m) and other (£4.1m)).         
** (2004: write-downs of music copyrights (£4.5m) and goodwill (£18.1m)).      
The attributable taxation credit relating to operating exceptional items is £  
nil (2004: £14.4m).                                                            
In 2004 assets were written down to their net realisable value or to a value in
use based on a discounted cash flow projection. Discount rates of 6% to 14%    
were applied in the impairment reviews completed during that year. The discount
rates were appropriate to the divisions and the assets being valued.           
The share of the operating exceptional items attributable to minority interests
is £0.2m (2004: £7.2m).                                                        

                                                                 Attachment (k)

for the year ended 31 March 2005


(ii) Non-operating exceptional items

                                                            2005           2004
                                                              £m             £m
Losses on the sale and closure of manufacturing                -         (45.5)
Net gain on sale of fixed assets and investments             0.8           24.0
Profit on sale of HMV Group plc, including                     -            5.0
goodwill of £262.5m***                                                         
Total                                                        0.8         (16.5)
* (2004: costs of redundancies (£11.8m), losses on sale or decommissioning of  
fixed assets (£12.1m), losses on sales of stocks (£12.0m) and integration costs
** Comprises gains (losses) on sale of properties (2004: gains (losses) on sale
of properties).                                                                
*** (2004: release of a provision to cover EMI Group Plc's pension liability no
longer required).                                                              
The attributable taxation charge relating to non-operating exceptional items is
£nil (2004: £1.6m).                                                            

(iii) Finance exceptional charge

                                                            2005           2004
                                                              £m             £m
Costs incurred as part of the Group's                          -         (10.2)
refinancing programme (note 4)                                                 
Total                                                          -         (10.2)


                                                    2005                  2004
                                           £m         £m         £m         £m
Interest payable on:                                                          
Bank overdrafts and loans                81.7                  72.3           
Other                                    13.2                  17.3           
                                                    94.9                  89.6
Interest receivable on:                                                       
Bank balances                           (2.2)                 (2.0)           
Other                                   (0.6)                 (1.7)           
                                                   (2.8)                 (3.7)
Group finance charges (including                    92.1                  85.9
Finance exceptional charge                             -                  10.2
Total                                               92.1                  96.1
* Finance charges for associates are £nil                                     
(2004: £nil).                                                                 

                                                                 Attachment (l)

for the year ended 31 March 2005


                                                            2005           2004
                                                              £m             £m
Current tax:                                                                   
UK corporation tax                                           4.3            5.3
Double taxation relief                                     (4.3)          (5.3)
                                                               -              -
Withholding tax                                              7.1            9.5
Other foreign tax                                           28.2           17.4
Adjustment in respect of prior periods                     (6.9)          (2.8)
Total current tax                                           28.4           24.1
Deferred tax:                                                                  
Origination and reversal of timing differences               2.8          (4.5)
Associated undertakings                                        -            0.1
Tax on profit on ordinary activities                        31.2           19.7

NOTE 6 - DIVIDENDS (equity)

                                             2005      2004      2005      2004
                                        Per share Per share        £m        £m
Ordinary dividends (net):                                                      
Interim                                      2.0p      2.0p      15.7      15.8
Adjustment to 2005 and 2004 interim             -         -         -     (0.1)
Proposed final                               6.0p      6.0p      47.4      47.1
Adjustment to 2004 and 2003 final               -         -       0.1     (0.3)
Total                                        8.0p      8.0p      63.2      62.5

Subject to the approval of shareholders, the final dividend of 6.0p per share
will be paid on 7 October 2005 to shareholders on the register at the close of
business on 9 September 2005.

                                                                 Attachment (m)

for the year ended 31 March 2005


                                                            2005           2004
Earnings per Ordinary Share is calculated as                                   
Earnings                                                  £56.3m       £(71.6)m
Adjusted earnings                                        £106.3m        £124.2m
Weighted average number of Ordinary Shares in             785.6m         784.4m
Adjusted weighted average number of Ordinary              872.8m         826.5m
The adjusted weighted average number of Ordinary Shares used in the diluted    
earnings per share calculations, 872.8m (2004: 826.5m), is the weighted average
number of Ordinary Shares in issue, 785.6m (2004: 784.4m), plus adjustments for
dilutive share options, 8.4m (2004: 2.9m) plus adjustments for convertible bond
options, 78.9m (2004: 39.2m).                                                  
Adjusted earnings are included as they provide a better understanding of the   
underlying trading performance of the Group on a normalised basis.             

RECONCILIATION OF ADJUSTED EARNINGS                                            
                                                      2005                 2004
                                             £m  Per Share        £m  Per Share
                   Earnings/basic EPS      56.3       7.2p    (71.6)     (9.1p)
Exceptional items and attributable        (0.8)     (0.1p)      152.2     19.3p
Amortisation of goodwill and music         50.9       6.4p       51.1      6.5p
Minority interest (re music               (0.3)       0.0p      (0.4)      0.0p
copyright amortisation)                                                        
Minority interest (re operating             0.2       0.0p      (7.0)    (0.9)p
exceptional items and attributable                                             
       Adjusted earnings/adjusted EPS     106.3      13.5p     124.3      15.8p
Convertible bond                            6.9     (0.5p)       3.7     (0.3)p
   Adjusted earnings/adjusted diluted     113.2      13.0p     128.0      15.5p

                                                                 Attachment (n)

for the year ended 31 March 2005


                                                              2005        2004
                                                                £m          £m
LONG-TERM BORROWINGS                                                          
Bank loans and debt finance                                1,042.0     1,058.0
Finance leases                                                   -         0.1
Total long-term borrowings                                 1,042.0     1,058.1
SHORT-TERM BORROWINGS                                                         
Loans and overdrafts                                          11.8        34.7
Finance leases                                                   -           -
Short-term element of long-term loans                         18.2         1.1
Total short-term borrowings                                   30.0        35.8
Total borrowings                                           1,072.0     1,093.9
Liquid funds:                                                                 
    Investments: liquid funds                                (1.6)       (1.8)
    Cash at bank and in hand and cash deposits             (240.9)     (343.4)
Net borrowings                                               829.5       748.7
On 15 July 2004, the Group signed an additional 364 day £100m committed credit
facility with a group of banks.                                               
On 2 and 3 October 2003, the Group completed a major restructuring of its     
borrowings. Five separate but related transactions were completed: (a) the    
issue of €425m 8.625% Senior Notes due 2013; (b) the issue of US$243.3m       
Guaranteed Convertible Bonds due 2010, unless previously redeemed, converted  
or purchased and cancelled; (c) the cancellation of the existing revolving    
credit bank facilities expiring 2005; (d) the finalisation of a new £250m     
revolving credit bank facility expiring 2007 (at 31 March 2005, £236.9m was   
available under this facility but undrawn); and (e) prepayment of US$25m      
Senior Notes due 2012 and US$31.25m Senior Notes due 2009.                    
Long-term borrowings include £nil (2004: £nil) of borrowings repayable within 
one year, which are drawings under long-term committed facilities and,        
therefore, have been classified as such. Long-term borrowings are stated after
deduction of issue costs which are capitalised and amortised over the term of 
the borrowing. Issue costs are defined as incremental costs that are incurred 
directly in connection with the issue of a capital instrument and include     
arrangements and underwriting fees.                                           
Under their banking arrangements, overdraft and cash balances of the Company  
and of certain subsidiaries are pooled or offset and cross-guaranteed. Such   
pooling and offsets are reflected in the Group balance sheet as appropriate.  
The Group has cash balances and liquid funds of £113.1m held with banks within
the UK and £129.4m held with banks outside, but freely transferable to, the   

Maturity analysis of long-term borrowings:                                    
                                                              2005        2004
                                                                £m          £m
Amounts falling due after more than one year are                              
repayable as follows:                                                         
    Between one and two years                                  1.1         2.0
    Between two and five years                               632.1       385.7
    After five years:                                                         
        Other                                                408.8       670.4
Total                                                      1,042.0     1,058.1
The amount of debt, any of which falls due for payment after more than five   
years, is £408.8m (2004: £670.4m).                                            

                                                                 Attachment (o)


for the year ended 31 March 2005


                              Trading  Pensions  Disposal & Acquisition   Total
                                   £m        £m          £m          £m      £m
At 31 March 2004                 82.2      31.3        20.3         3.3   137.1
Currency retranslation            0.7       1.5       (0.2)           -     2.0
Provisions utilised            (53.0)     (6.4)      (13.2)       (0.6)  (73.2)
Charged against:                                                               
    Operating profit              2.3       5.5           -           -     7.8
Reclassification                  0.7         -         1.1           -     1.8
At 31 March 2005                 32.9      31.9         8.0         2.7    75.5

Trading provisions include royalty audit and other trading provisions charged  
through operating profit before exceptional items. It also includes            
restructuring and reorganisation provisions charged through operating          
exceptional items. £13.9m of the £32.9m are restructuring and reorganisation   
provisions which will be utilised in the short term (2004: £63.5m of £82.2m).  
The majority of the disposal and fundamental reorganisation provision will be  
utilised in the short term.                                                    
The pension provisions arise in overseas companies in respect of state schemes 
and employees covered by the Group's unfunded schemes.

a d v e r t i s e m e n t