Financial Highlights

Imperial Tobacco Group PLC Half Yearly Report to 31 March 2009

Results for 2009 include a full six month’s contribution from Altadis, whereas 2008 comparatives include the Altadis contribution since completion of the acquisition on 25 January 2008. The 2008 per share figures have been restated to reflect the bonus element of the rights issue. Profit from operations, profit before tax, attributable earnings, basic and diluted earnings per share are impacted, where applicable, by amortisation of acquired intangibles, restructuring costs, post-employment benefits net financing income, fair value gains and losses on derivative financial instruments in respect of commercially effective hedges, one-off acquisition accounting adjustments, brand divestment gains and related taxation effects. The main adjustments to profit before tax relate to amortisation of acquired intangibles of £224 million and fair value losses on derivative financial instruments of £937 million, following significant moves in market interest rates and foreign exchange rates. We hedge interest rate and foreign exchange exposures in an efficient, commercial and structured manner. However, the strict requirements of IAS 39 mean that we are obliged to recognise the movements in fair value of some of these hedges in our income statement. These movements are predominantly offset by movements taken directly to reserves.

Management believes that reporting adjusted measures provides a useful comparison of business performance and reflects the way in which the business is controlled. Accordingly, as outlined in our accounting policy note, adjusted measures of profit from operations, net finance costs, profit before tax, taxation, attributable earnings and earnings per share exclude, where applicable, amortisation of acquired intangibles, restructuring costs, post-employment benefits net financing income, fair value gains and losses on derivative financial instruments in respect of commercially effective hedges, one-off acquisition accounting adjustments, brand divestment gains and related taxation effects. Reconciliations between adjusted and reported profit from operations are included within note 1 to the half yearly statements, adjusted and reported finance costs in note 3, adjusted and reported taxation in note 4, and adjusted and reported earnings per share in note 6. The adjusted measures in this report are not defined terms under International Financial Reporting Standards and may not be comparable with similarly titled measures reported by other companies.

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