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	Notes to the accounts

	55 Acquisitions
	The Group made the following significant acquisitions of subsidiary undertakings in 2000 which are accounted for on an acquisition basis:

				% Acquired		Date
	Woolwich plc			100	25th October 2000
	The assets and liabilities of Woolwich plc at the date of acquisition and the total consideration paid are set out in the following table:
				Accounting
				policy	Other
		Book Value	Revaluations	alignments	adjustments	Fair value
	Woolwich plc	£m	£m	£m	£m	£m
	Assets
	Cash and balances at central banks	73	–	–	–	73
	Loans and advances to banks	916	–	–	–	916
	Loans and advances to customers	31,952	136	-	-	32,088
	Debt securities	2,010	140	-	-	2,150
	Investment in joint ventures:
	– share of gross assets	12	-	-	-	12
	– share of gross liabilities	(6)	-	-	-	(6)
	Interests in associates	11	-	-	-	11
	Intangible fixed assets	33	-	-	(33)	-
	Tangible fixed assets	320	(10)	(46)	-	264
	Other assets	258	(2)	-	-	256
	Prepayments and accrued income	344	76	(78)	-	342
		35,923	340	(124)	(33)	36,106
	Long term assurance policy holders’ assets	730	-	-	-	730
		36,653	340	(124)	(33)	36,836
	Liabilities
	Deposits by banks	2,487	-	-	-	2,487
	Customer accounts	21,279	12	-	-	21,291
	Debt securities in issue	8,316	(5)	-	-	8,311
	Other liabilities	257	33	(12)	-	278
	Accruals and deferred income	854	56	-	-	910
	Provisions for liabilities and charges	26	122	(27)	-	121
	Subordinated liabilities	833	124	-	-	957
	Less minority interests – equity	19	-	-	-	19
		34,071	342	(39)	-	34,374
	Long term assurance policy holders’ liabilities	730	-	-	-	730
		34,801	342	(39)	-	35,104
	Net assets	1,852	(2)	(85)	(33)	1,732
	Satisfied by:
	Consideration
	Cash					2,462
	Shares (a)					3,359
	Acquisition expenses					32
						5,853
	Goodwill arising (b)					4,121
	(a) The value of the 176.4m new Barclays ordinary shares issued to The Woolwich ordinary shareholders, based on the closing price on the London Stock Exchange on 25th October 2000, the day the offer for The Woolwich became effective, was 1,904p per Barclays ordinary share. (b) The goodwill arising on acquisition is being amortised over its estimated economic life of 20 years, resulting in a charge of £206m per annum.

	Included in the balance sheet above were £1m of provisions for reorganisation costs and restructuring costs in the period up to 25th October 2000. The fair value adjustments in the above table principally represent the following: Revaluations resulting from adjusting financial instruments to a fair value based on quoted market prices or discounted cashflow methodologies, recording the liability for the deficit on The Woolwich pension scheme and any related current or deferred tax adjustments. Accounting policy alignments, resulting from applying Barclays PLC Group accounting policies on mortgage incentives and software costs and any related current or deferred tax adjustments. The Woolwich previously capitalised and amortised such costs, they are now expensed as incurred. Other adjustment relating to elimination of goodwill present in The Woolwich’s consolidated accounts. Pre acquisition activities The table below sets out the summarised profit and loss account and statement of total recognised gains and losses of The Woolwich for the period 1st January to 24th October 2000 prepared using the accounting policies described in its 1999 Annual Report amended for the change in policy for accounting for introducer commissions described in the 2000 interim results.
	Summarised profit and loss account		1st January to 24th October 2000 £m
	Interest receivable and similar income arising from debt securities			105
	Other interest receivable and similar income			1,827
	Interest receivable			1,932
	Interest payable			(1,371)
	Net interest income			561
	Fees and commissions receivable			251
	Fees and commissions payable			(27)
	Other operating income			47
	Operating income			832
	Administrative expenses – staff costs			(144)
	Administrative expenses – other			(230)
	Depreciation and amortisation			(41)
	Operating profit before provisions			417
	Provisions for bad and doubtful debts			(35)
	Operating profit			382
	Share of operating loss in joint ventures			(2)
	Profit before taxation			380
	Tax			(103)
	Profit after tax			277
	Minority interests			(3)
	Profit attributable to the members of Woolwich plc			274
	Operating profit is after charging costs of £28m relating to the acquisition by Barclays.
	Statement of total recognised gains and losses		1st January to 24th October 2000 £m
	Profit for the period attributable to the members of Woolwich plc			274
	Exchange rate translation differences			(8)
	Total recognised gains and losses for the period			266
	Prior year adjustment			6
	Total gains recognised since 31st December 1999			272
	Profit after tax and minority interests for The Woolwich as reported in the audited consolidated accounts for the year ended 31st December 1999 was £351m.
	Post acquisitions results The impact of the acquisition of The Woolwich on the operating profits of the Group was as follows:
	Summarised profit and loss account		25th October to 31st December 2000 £m
	Interest receivable and similar income arising from debt securities			21
	Other interest receivable and similar income			433
	Interest receivable			454
	Interest payable			(335)
	Net interest income			119
	Fees and commissions receivable			63
	Fees and commissions payable			(14)
	Other operating income			9
	Operating income			177
	Administrative expenses – staff costs			(42)
	Administrative expenses – other			(47)
	Depreciation and amortisation			(10)
	Operating profit before provisions			78
	Provisions for bad and doubtful debts			(8)
	Operating profit			70
	Amortisation of fair value adjustments			(6)
	Operating profit after fair value amortisation			64
	The amortisation of fair value adjustments comprise £7m operating income and £1m depreciation and amortisation (net £6m). Proforma results of the Barclays Group (including The Woolwich) Assuming the acquisition occurred on 1st January 2000 (for 1999 on 1st January 1999), and on the basis of Barclays Group accounting policies and estimates, making adjustments to reflect (i) the removal of business disposals during the relevant reporting period, (ii) the net interest forgone if the cash element of the acquisition and the cash proceeds of disposals had been paid/received at the start of the relevant reporting period, (iii)amortisation of the goodwill balance of £4,121m over its estimated economic life of 20 years, (iv)the exclusion of incremental costs incurred by The Woolwich in relation to the acquisition, the Barclays Group would have reported operating income of £10,248m (1999 £9,091m), operating profit and profit before tax of £3,313m (1999 £2,695m) and a basic earnings per share figure of 134.7p (1999 111.6p). The earnings per share figure assumes the shares issued in relation to the acquisition were issued on 1st January 2000 (for 1999 on 1st January 1999).