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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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AUGUST 11, 2005
Date of Report
AUGUST 11, 2005
Date of Earliest Event Reported
TELEWEST GLOBAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-50886 59-3778247
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
160 GREAT PORTLAND STREET
LONDON W1W 5QA, UNITED KINGDOM
(Address of principal executive offices)
+44-20-7299-5000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
|_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
1. Press Release
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On August 11, 2005 Telewest Global, Inc. ("Telewest") issued a press
release announcing US GAAP results for the three months ended June 30,
2005.
Substantially all of the assets of Telewest Communications plc were
transferred to Telewest UK Limited, a wholly owned subsidiary of Telewest
on July 14, 2004 in connection with Telewest Communications plc's financial
restructuring.
Telewest's quarterly results, including a discussion of how the
presentation of the results differs from the presentation of the historical
results of Telewest Communications plc and its subsidiaries are included in
its Form 10-Q, also filed with the U.S. Securities and Exchange Commission
today.
A copy of the press release is attached hereto as Exhibit 99.1.
2. Reconciliation of Non-GAAP Financial Measures in August 11, 2005
Conference Call
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On August 11, 2005, Telewest will host a conference call to discuss
its results for the three months ended June 30, 2005. On the conference
call certain non-GAAP financial measures are expected to be discussed. A
reconciliation of these measures to the nearest comparable GAAP measure and
discussion of that measure can be found below. Reconcilations and
discussion of the other non-GAAP financial measures appear in Telewest's
earnings release attached as Exhibit 99.1 hereto.
ANNUALIZED ADJUSTED EBITDA (EXCLUDING (POUND)16 MILLION VAT RECOVERY AND
RATES REBATE):
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THREE MONTHS
RECONCILIATION OF ANNUALIZED ADJUSTED EBITDA (EXCLUDING VAT ENDED JUNE 30,
RECOVERY AND RATES REBATE) TO ADJUSTED EBITDA 2005
(POUND)M
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ANNUALIZED ADJUSTED EBITDA (EXCLUDING (POUND)16 MILLION VAT RECOVERY AND
RATES REBATE) 552
Adjusted EBITDA (excluding (pound)16 million VAT recovery and
rates rebate) 138
Add back:
(pound)16 million VAT recovery 16
Rates rebate 4
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ADJUSTED EBITDA 158
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A reconciliation of Adjusted EBITDA to its most directly comparable
GAAP financial measure of Net income/(loss) is included in Telewest's
earnings release attached as Exhibit 99.1 hereto.
Our management, including our chief operating decision-maker,
considers Annualized Adjusted EBITDA (excluding (pound)16 million VAT
recovery and rates rebate) an important indicator of the operational
strength and performance of our business. Annualized Adjusted EBITDA
(excluding (pound)16 million VAT recovery and rates rebate) is Adjusted
EBITDA for the quarter excluding the impact of the recovery of (pound)16
million VAT and (pound)4 million in rates Rebate, multiplied by four. In
the opinion of management, these two items do not directly relate to the
operating performance of the business. It is the belief of management that
the recovery of (pound)16 million VAT and (pound)4 million in rates rebates
are not characteristic of our underlying business operations and are not
likely to recur in the future.
Annualized Adjusted EBITDA (excluding (pound)16 million VAT recovery
and rates rebate) is not a financial measure recognized under GAAP. This
measure is most directly comparable to the GAAP financial measure net
income/(loss). Some of the significant limitations associated with the use
of as Annualized Adjusted EBITDA (excluding (pound)16 million VAT recovery
and rates rebate) compared to net income/(loss) are (i) that Annualized
Adjusted EBITDA (excluding (pound)16 million VAT recovery and rates rebate)
does not reflect the amount of required reinvestment in depreciable fixed
assets, financial restructuring charges, VAT recoveries, rates rebates,
interest expense or receivable, foreign exchange gains or losses, income
taxes expense or benefit and similar items on our results of operations and
(ii) is not necessarily indicative of what Adjusted EBITDA would be for a
full fiscal year (which would reflect the impact of seasonal factors and
the development of the markets for Telewest's products). We believe
Annualized Adjusted EBITDA (excluding (pound)16 million VAT recovery and
rates rebate) is helpful for understanding our performance and assessing
our prospects for the future, and that it provides useful supplemental
information to investors. In particular, this non-GAAP financial measure
reflects an additional way of viewing aspects of our operations that, when
viewed with our GAAP results and the reconciliations to net income/(loss),
provide a more complete understanding of factors and trends affecting our
business. Because non-GAAP financial measures are not standardized, it may
not be possible to compare Annualized Adjusted EBITDA (excluding (pound)16
million VAT recovery and rates rebate) with other companies' non-GAAP
financial measures that have the same or similar names. The presentation of
this supplemental information is not meant to be considered in isolation or
as a substitute for net cash provided by operating activities, operating
income/(loss), net income/(loss), or other measures of financial
performance reported in accordance with GAAP.
UKTV ADJUSTED EBITDA:
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THREE MONTHS
RECONCILIATION OF UKTV ADJUSTED EBITDA TO RETAINED PROFIT FOR THE ENDED JUNE 30,
FINANCIAL PERIOD 2005
(POUND)M
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UKTV ADJUSTED EBITDA 19
Interest expense, net (3)
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Profit on ordinary activities before taxation 16
Taxation (1)
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Profit on ordinary activities after taxation 15
Dividends (3)
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RETAINED PROFIT FOR THE FINANCIAL PERIOD 12
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Telewest's primary measure of income or loss for each of its segments
is Adjusted EBITDA. However, the portion of the business of Telewest's
content segment attributable to non-consolidated entities is not reflected
in content segment Adjusted EBITDA. Telewest's share of the results of UKTV
(a group of companies in which Telewest owns 50% of the equity) is excluded
from the Adjusted EBITDA calculation, and is presented as Share of Net
Income/(Losses) of Affiliates in accordance with GAAP. Management for some
purposes view and assess the performance of the content segment, including
UKTV, as a whole. Management believes that the use of UKTV's Adjusted
EBITDA provides useful supplemental information for management and
investors in determining the income generating capacity of the content
business as a whole going forward.
UKTV Adjusted EBITDA is not a financial measure recognized under GAAP.
The measure is calculated based on the UK GAAP financial statements of UKTV
as retained profit for the financial period before, dividends, taxation,
interest expense and depreciation. UKTV Adjusted EBITDA is helpful for
understanding the aggregate performance of the content segment going
forward and provides useful supplemental information to investors. In
particular, this non-GAAP financial measure reflects an additional way of
viewing aspects of future content segment operating performance that, when
viewed with its GAAP results and the related reconciliations, provides a
more complete understanding of factors and trends affecting the business.
Because non-GAAP financial measures are not standardized, it may not be
possible to compare UKTV Adjusted EBITDA with other companies' non-GAAP
financial measures that have the same or similar names. The presentation of
this supplemental information is not meant to be considered in isolation or
as a substitute for net cash provided by operating activities, operating
income/(loss), net income/(loss), or other measures of financial
performance reported in accordance with GAAP.
UKTV Adjusted EBITDA is not necessarily indicative of the results if
reported in US GAAP and is not intended to suggest and should not be
construed as suggesting that Telewest's management controlled or directed
the operations of UKTV during the period presented or that a consolidated
presentation of the results of the entity with those of Telewest is
otherwise appropriate under GAAP.
SIT-UP ADJUSTED EBITDA:
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THREE THREE
MONTHS MONTHS
ENDED ENDED
MARCH 31, JUNE 30,
2005 2005
(POUND)M (POUND)M
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RECONCILIATION OF SIT-UP ADJUSTED
EBITDA TO RETAINED PROFIT FOR THE
FINANCIAL PERIOD
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SIT-UP ADJUSTED EBITDA 2 -
Depreciation (1) -
- -------------------------------------------------------------------
Operating profit 1 -
Interest receivable - 1
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Profit on ordinary activities before 1 1
taxation
Taxation (1) 2
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Profit on ordinary activities after - 3
taxation
Preference share dividend/appropriation - -
- -------------------------------------------------------------------
RETAINED PROFIT FOR THE FINANCIAL PERIOD - 3
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THREE THREE THREE THREE
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2004 2004 2004 2004
(POUND)M (POUND)M (POUND)M (POUND)M
- ------------------------------------------------------------------------------------------------
RECONCILIATION OF SIT-UP ADJUSTED
EBITDA TO RETAINED PROFIT FOR THE
FINANCIAL PERIOD
- ------------------------------------------------------------------------------------------------
SIT-UP ADJUSTED EBITDA 1 - 4 8
Depreciation - (1) - (1)
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Operating profit/(loss) 1 (1) 4 7
Interest receivable - - - -
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Profit on ordinary activities before 1 (1) 4 7
taxation
Taxation - - (1) (2)
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Profit on ordinary activities after 1 (1) 3 5
taxation
Preference share dividend/appropriation - - - (1)
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RETAINED PROFIT FOR THE FINANCIAL PERIOD 1 (1) 3 4
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Telewest's primary measure of income or loss for each of its segments
is Adjusted EBITDA. However, the historical results of the business that
now comprises Telewest's sit-up segment have not historically been
reflected in Telewest's Adjusted EBITDA. Telewest's share of the results of
sit-up are excluded from the Adjusted EBITDA calculation, and are presented
as Share of Net Income/(Losses) of Affiliates in accordance with GAAP for
all periods prior to May 12, 2005. Following completion of the Company's
acquisition of additional equity in sit-up, which led to management taking
overall control, management believes that the use of a pro forma non-GAAP
financial measure of sit-up's Adjusted EBITDA provides useful supplemental
information for management and investors in determining the income
generating capacity of Telewest's sit-up segment going forward.
sit-up Adjusted EBITDA is not a financial measure recognized under
GAAP. The measure is calculated based on the UK GAAP financial statements
of sit-up as retained profit for the financial period before, preference
share dividend/appropriation, interest receivable, taxation and
depreciation. Management believes that sit-up Adjusted EBITDA is helpful
for understanding the performance of Telewest's sit-up segment going
forward and that it provides useful supplemental information to investors.
In particular, this non-GAAP financial measure reflects an additional way
of viewing aspects of future sit-up segment operating performance that,
when viewed with its GAAP results and the related reconciliations, provide
a more complete understanding of factors and trends affecting the business.
Because non-GAAP financial measures are not standardized, it may not be
possible to compare sit-up Adjusted EBITDA with other companies' non-GAAP
financial measures that have the same or similar names. The presentation of
this supplemental information is not meant to be considered in isolation or
as a substitute for net cash provided by operating activities, operating
income/(loss), net income/(loss), or other measures of financial
performance reported in accordance with GAAP.
sit-up Adjusted EBITDA is not intended to suggest and should not be
construed as suggesting that Telewest's management controlled or directed
the operations of sit-up during the periods prior to May 12, 2005 or that a
consolidated presentation of the results of the entity with those of
Telewest for periods prior to May 12, 2005 is otherwise appropriate under
GAAP.
EXHIBIT INDEX
EXHIBIT
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99.1 Press release of Telewest Global, Inc., dated August 11,
2005 announcing US GAAP results for the three months ended
June 30, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: August 11, 2005
TELEWEST GLOBAL, INC.
By: /s/ Clive Burns
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Name: Clive Burns
Title: Company Secretary