1. BT Group’s 2014 August SAYE maturity Francis O’Mahony - BT Carl Trimmer - Equiniti

2. © British Telecommunications plc BT Group plc BT is one of the world’s leading providers of communications services and solutions, serving customers in more than 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed/mobile products and services. BT consists principally of five lines of business: BT Global Services, BT Business, BT Consumer, BT Wholesale and Openreach For the year ended 31 March 2014, BT Group’s reported revenue was £18,287m with reported profit before taxation of £2,312m As at 31 March 2014 we had 87,800 full-time equivalents in 61 countries – 72,200 of them based in the UK

3. © British Telecommunications plc BT saveshare plans - 2014 UK Maturities 2009 5yr 1 March 111p 4,000 employees 2009 5yr 1 August 61p 22,000 employees 2012 3yr 1 August 175p 6,000 employees Share price 1 August circa 380p

4. © British Telecommunications plc Engagement and communications Campaign started early following Oct 2013 survey… First email sent Dec 2013 Subsequent emails sent on a monthly basis Subjects included: Choices – flowchart CGT/ISA/SIPP Spouse Transfer Dividend (once announced in May personalised calculation provided on next e mail) Main email sent in June telling employees they can now submit instructions

5. © British Telecommunications plc Communications Aim….. To get employees thinking about financial / tax planning early By personalising the emails employees had the size of potential value, gain and dividend right up front

6. © British Telecommunications plc Communications Why bother….. Of those with the 61p Option Price 7,186 employees saving the maximum £225 (scaled- back) Everyone saving over £35 a month had a potential CGT liability Average payout £49k (gain £41k) Maximum payout £88k (gain £74k)

7. © British Telecommunications plc Communications Key Messages….. Think about your annual CGT allowance And don’t forget your spouse’s allowance Think about your annual ISA allowance Exercise on 1 August and keep until at least 13 August if you want to qualify for the dividend Think carefully about how many shares you choose to sell

8. © British Telecommunications plc Communications Regular emails followed with a series of echats/news articles Live panel session in the auditorium CGT personalised modeller and Fact/Help sheets Myth Buster Interactive booklets Personalised emails asking employees to give their instructions on-line Q&A’s

9. © British Telecommunications plc Online maturity choices Keep some or all in EasyShare (corporate sponsored nominee) Sell some or all immediately Transfer some or all to spouse EasyShare account Transfer some/all to Equiniti ISA Transfer some or all to BTRSS (BT Retirement Savings Scheme) Transfer shares elsewhere – put in EasyShare then move on

10. © British Telecommunications plc BT considerations Sourcing of shares Getting the first day sale away in the market, in addition to the UK sale there was also an International saveshare maturity sale and a Deferred Bonus Plan release Timetabling to cover the timing of the sale and possible conflict with the dividend record date

11. © British Telecommunications plc So what happened…. 90.4% of employees gave their instructions before the cut off for the 1 August 25,492 employees exercised options over 269 million shares 13,000 employees put 127m shares into EasyShare accounts 3,741 employees sold some or all of their shares but only 7.4 million in total

12. © British Telecommunications plc So what happened…. 8,500 employees used multi choice options, with 125 million shares 5,589 online ISA account transfers 1,521 Letters of Appropriation issued (eg for non Equiniti ISA) Approx 7,100 ISA transfers in total 5,316 spouse transfers

13. © British Telecommunications plc So what happened…. 2,000 required a sale as part of their multi choice selection (4.4 million shares) 1,300 used the nominee as part of their multi choice selection (9 million shares) 74 SIPP transfers

14. © British Telecommunications plc BT Today – Newsdesk ‘scoop’ ‘Ice cream dream comes true – thanks to saveshare’ ‘What sort of husband cashes in his saveshare option to make his wife’s dream come true? ​One just like Pietro Panetta. The Openreach allocation controller has used his five-year saveshare plan to buy a 1972 VW campervan to convert into a mobile ice cream parlour….’

15. © British Telecommunications plc Observations…. Communications successful as: Small first day sale as employees consider CGT and dividend Huge take up of the ISA and spouse transfer choices Only around 550 sold shares with a gain greater than CGT allowance Surprise: The multi choice sale undertaken after the ISA valuation was larger than expected and as a result took two days to sell in the market New one: Some deliberately waiting to Jan 2015 to exercise and use two year’s ISA allowance, trading off against two missed dividends. March Maturity: Despite all communications 60 employees had to chased with personal phone calls

16. © British Telecommunications plc Feedback from employee survey 93% -amount of info they received was about right to make informed choices 84% -found the new monthly saveshare updates helpful 97% -are very satisfied or satisfied with the quantity quality of info 96% -are very satisfied or satisfied with the timeliness of info they got 88% said owning shares made them more interested in BT's performance

17. © British Telecommunications plc 2014 UK Launch 75,500 eligible employees Savings limit increased to £300 46,752 applications 73,196,861 options granted Average saving £104 per month Participation rate increased 9% to 71%

18. © British Telecommunications plc International Launch 12,389 eligible employees 3,667 applications 6,437,672 options granted Spread over 24 countries Participation rate increased 9% to 38% £300 equivalent savings limit introduced

19. © British Telecommunications plc International Maturity 3 year only, option price 156p 641 employees with options over 1.972m shares Choices: buy and keep all or take profit in cash 68% gave instructions for the first allotment 1,271,004 shares sold

20. © British Telecommunications plc Any Questions