Exhibit 99.4
YELL GROUP PLC AND SUBSIDIARIES
APPENDIX
CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION OF YELL GROUP PLC AND
ITS SUBSIDIARIES
We have included certain unaudited condensed combined and consolidated financial
information of Yell Group plc and its subsidiaries ("Yell Group plc") as an
appendix to the unaudited condensed combined and consolidated financial
information of Yell Finance B.V. and its subsidiaries ("Yell Finance B.V."), in
order to highlight what Yell Group plc would report under UK GAAP using UK
presentational conventions and to satisfy the requirements of Yell Group plc to
produce a UK GAAP to US GAAP reconciliation.
The unaudited financial information for Yell Group plc includes:
o condensed combined and consolidated profit and loss accounts for the three
and nine month periods ended 31 December 2001 and 2002. The results for
the nine months ended 31 December 2001 are an aggregation of the
predecessor combined results for the period from 1 April to 22 June 2001
and the successor consolidated results for the period from 22 June to 31
December 2001 in line with presentational conventions in the United
Kingdom;
o condensed combined and consolidated cash flow statements for the three and
nine month periods ended 31 December 2001 and 2002. The cash flows for the
nine months ended 31 December 2001 are an aggregation of the predecessor
combined cash flows for the period from 1 April to 22 June 2001 and the
consolidated cash flow statements for the period from 22 June to 31
December 2001;
o condensed consolidated balance sheets at 31 March 2002 and 31 December
2002;
o analysis of net debt at 31 March 2002 and 31 December 2002 and movement in
net debt for the three and nine month periods ended 31 December 2002;
o changes in equity shareholders' deficit for the three and nine months
ended 31 December 2002; and
o a reconciliation of results between US GAAP and UK GAAP for the nine month
periods ended 31 December 2001 and 2002, and equity shareholders' deficit
at 31 March 2002 and 31 December 2002.
The following unaudited condensed financial information has been prepared in
accordance with accounting principles generally accepted in the United Kingdom
("UK GAAP") and on the basis of the accounting policies set out in the audited
combined and consolidated financial statements of Yell Finance B.V. for the year
ended 31 March 2002 contained in the Form 20-F filed with the SEC on 19 July
2002.
1
YELL GROUP PLC AND SUBSIDIARIES
COMBINED AND CONSOLIDATED PROFIT AND LOSS ACCOUNTS
NINE MONTHS
ENDED NINE MONTHS
31 DECEMBER ENDED
2001 31 DECEMBER
(UNAUDITED) (AGGREGATED) 2002
---------------------- --------------------
((POUND) IN MILLIONS)
TURNOVER
---------------------- --------------------
Continuing activities 598.0 641.7
Acquisitions - 145.4
---------------------- --------------------
GROUP TURNOVER 598.0 787.1
Cost of sales (253.9) (352.9)
---------------------- --------------------
GROSS PROFIT 344.1 434.2
Distribution costs (16.5) (25.6)
ADMINISTRATIVE COSTS
Ordinary items (218.4) (264.5)
Exceptional items (3.0) (15.0)
---------------------- --------------------
(221.4) (279.5)
---------------------- --------------------
OPERATING PROFIT
---------------------- --------------------
Continuing activities 106.2 118.9
Acquisitions - 10.2
---------------------- --------------------
TOTAL OPERATING PROFIT 106.2 129.1
Net interest payable (115.8) (182.1)
---------------------- --------------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (9.6) (53.0)
Tax on loss on ordinary activities (14.4) (5.6)
---------------------- --------------------
LOSS FOR THE FINANCIAL PERIOD (24.0) (58.6)
====================== ====================
STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
NINE MONTHS
ENDED NINE MONTHS
31 DECEMBER ENDED
2001 31 DECEMBER
(UNAUDITED) (AGGREGATED) 2002
---------------------- --------------------
((POUND) IN MILLIONS)
Loss for the financial period (24.0) (58.6)
Currency movements (7.3) (36.3)
---------------------- --------------------
TOTAL RECOGNISED LOSSES FOR THE
FINANCIAL PERIOD (31.3) (94.9)
====================== ====================
See notes to the financial information for additional details.
2
YELL GROUP PLC AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
THREE MONTHS THREE MONTHS
ENDED ENDED
31 DECEMBER 31 DECEMBER
(UNAUDITED) 2001 2002
--------------------- ----------------------
((POUND) IN MILLIONS)
TURNOVER
Continuing activities 202.7 208.6
Acquisitions - 47.6
--------------------- ----------------------
GROUP TURNOVER 202.7 256.2
Cost of sales (95.0) (119.1)
--------------------- ----------------------
GROSS PROFIT 107.7 137.1
Distribution costs (5.4) (8.1)
Administrative costs (78.0) (90.8)
OPERATING PROFIT
--------------------- ----------------------
Continuing activities 24.3 33.9
Acquisitions - 4.3
--------------------- ----------------------
TOTAL OPERATING PROFIT 24.3 38.2
Net interest payable (50.4) (66.3)
--------------------- ----------------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (26.1) (28.1)
Tax on loss on ordinary activities (2.1) (0.5)
--------------------- ----------------------
LOSS FOR THE FINANCIAL PERIOD (28.2) (28.6)
===================== ======================
STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
THREE MONTHS THREE MONTHS
ENDED ENDED
31 DECEMBER 31 DECEMBER
(UNAUDITED) 2001 2002
--------------------- ----------------------
((POUND) IN MILLIONS)
Loss for the financial period (28.2) (28.6)
Currency movements 1.9 (4.6)
--------------------- ----------------------
TOTAL RECOGNISED LOSSES FOR THE
FINANCIAL PERIOD (26.3) (33.2)
===================== ======================
See notes to the financial information for additional details.
3
YELL GROUP PLC AND SUBSIDIARIES
COMBINED AND CONSOLIDATED CASH FLOW STATEMENTS
NINE MONTHS
ENDED NINE MONTHS
31 DECEMBER ENDED
2001 31 DECEMBER
(UNAUDITED) (AGGREGATED) 2002
--------------------- ---------------------
((POUND) IN MILLIONS)
NET CASH INFLOW FROM OPERATING ACTIVITIES 144.0 221.5
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid (55.8) (97.5)
Finance fees paid (68.2) (16.1)
--------------------- ---------------------
NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE (124.0) (113.6)
--------------------- ---------------------
TAXATION (0.4) (10.3)
--------------------- ---------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (11.2) (11.6)
Payment for assets transferred from BT (11.7) -
--------------------- ---------------------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (22.9) (11.6)
--------------------- ---------------------
ACQUISITIONS
Purchase of subsidiary undertakings, net of cash
acquired (1,582.3) (466.6)
--------------------- ---------------------
NET CASH OUTFLOW FOR ACQUISITIONS (1,582.3) (466.6)
--------------------- ---------------------
NET CASH OUTFLOW BEFORE FINANCING (1,585.6) (380.6)
--------------------- ---------------------
FINANCING
Issue of ordinary share capital and capital
contributions received 1.0 0.1
Cash retained by BT on acquisition (40.8) -
New loans issued 2,563.7 487.4
Borrowings repaid (872.1) (184.2)
--------------------- ---------------------
NET CASH INFLOW FROM FINANCING 1,651.8 303.3
--------------------- ---------------------
INCREASE (DECREASE) IN NET CASH IN THE PERIOD 66.2 (77.3)
===================== =====================
Total operating profit 106.2 129.1
Depreciation 15.3 16.9
Goodwill amortisation 49.4 73.7
Increase in stocks (27.9) (25.4)
(Increase) decrease in debtors (6.3) 8.0
Increase in creditors 7.3 19.2
--------------------- ---------------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 144.0 221.5
===================== =====================
See notes to the financial information for additional details.
4
YELL GROUP PLC AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
THREE MONTHS THREE MONTHS
ENDED ENDED
31 DECEMBER 31 DECEMBER
(UNAUDITED) 2001 2002
-------------------- ---------------------
((POUND) IN MILLIONS)
NET CASH INFLOW FROM OPERATING ACTIVITIES 49.6 75.6
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid (16.5) (29.3)
Finance fees paid (2.8) (4.3)
-------------------- --------------------
NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE (19.3) (33.6)
-------------------- --------------------
TAXATION (0.1) (2.7)
-------------------- --------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (3.8) (3.7)
-------------------- --------------------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (3.8) (3.7)
-------------------- --------------------
Purchase of subsidiary undertakings, net of cash
acquired (0.3) (42.9)
--------------------- --------------------
NET CASH OUTFLOW FOR ACQUISITIONS (0.3) (42.9)
-------------------- --------------------
NET CASH INFLOW (OUTFLOW) BEFORE FINANCING 26.1 (7.3)
-------------------- --------------------
FINANCING
New loans issued - 78.7
Borrowings repaid - (157.8)
-------------------- --------------------
NET CASH OUTFLOW FROM FINANCING - (79.1)
-------------------- --------------------
INCREASE (DECREASE) IN NET CASH IN THE PERIOD 26.1 (86.4)
==================== ====================
Total operating profit 24.3 38.2
Depreciation 5.2 5.9
Goodwill amortisation 21.2 25.0
Increase in stocks (5.5) (14.2)
Decrease in debtors 8.5 29.5
Decrease in creditors (4.1) (8.8)
-------------------- --------------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 49.6 75.6
==================== ====================
See notes to the financial information for additional details.
5
YELL GROUP PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AT AT
31 MARCH 31 DECEMBER
(UNAUDITED) 2002 2002
------------------- ---------------------
((POUND) IN MILLIONS)
FIXED ASSETS
Intangible assets 1,640.5 1,838.5
Tangible assets 30.0 46.0
Investment 2.1 2.0
------------------- ---------------------
TOTAL FIXED ASSETS 1,672.6 1,886.5
------------------- ---------------------
CURRENT ASSETS
Stocks 90.9 140.9
Debtors 337.3 399.3
Cash at bank and in hand 100.2 21.9
------------------- ---------------------
TOTAL CURRENT ASSETS 528.4 562.1
------------------- ---------------------
CREDITORS: AMOUNTS FALLING DUE WITHIN
------------------- ---------------------
ONE YEAR
Loans and other borrowings (53.4) (68.5)
Other creditors (146.7) (202.7)
------------------- ---------------------
TOTAL CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR (200.1) (271.2)
------------------- ---------------------
NET CURRENT ASSETS 328.3 290.9
------------------- ---------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 2,000.9 2,177.4
CREDITORS: AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR
Loans and other borrowings (2,050.7) (2,322.0)
------------------- ---------------------
NET LIABILITIES (49.8) (144.6)
=================== =====================
CAPITAL AND RESERVES
Called up share capital 0.1 0.2
Share premium account 0.9 0.9
Other reserves 0.1 0.1
Deficit (50.9) (145.8)
------------------- ---------------------
EQUITY SHAREHOLDERS' DEFICIT (49.8) (144.6)
=================== =====================
See notes to the financial information for additional details.
6
YELL GROUP PLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL INFORMATION
NET DEBT
ANALYSIS OF NET DEBT
AT AT
31 MARCH 31 DECEMBER
2002 2002
------------------- --------------------
((POUND) IN MILLIONS)
Long-term loans and other borrowings
falling due after more than one year 2,050.7 2,322.0
Short-term borrowings and long-term loans and
other borrowings falling due within one year 53.4 68.5
------------------- --------------------
Total debt 2,104.1 2,390.5
Cash at bank and in hand (100.2) (21.9)
------------------- --------------------
NET DEBT AT END OF PERIOD 2,003.9 2,368.6
=================== ====================
7
YELL GROUP PLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
NET DEBT (CONTINUED)
RECONCILIATION OF MOVEMENT IN NET DEBT
DEBT DUE
WITHIN ONE
TOTAL YEAR
CASH EXCLUDING DEBT DUE
LESS BANK BANK AFTER
OVERDRAFT OVERDRAFT ONE YEAR NET DEBT
------------- --------------- -------------- --------------
((POUND) IN MILLIONS)
AT 31 MARCH 2002 100.2 (53.4) (2,050.7) (2,003.9)
Cash flow from operations less interest and
taxation paid and capital expenditures 102.1 - - 102.1
Cash inflow from financing of acquisitions 487.5 - (487.4) 0.1
Cash outflow on acquisitions (466.6) - - (466.6)
Finance fees paid (16.1) - 16.1 -
Reclass of long-term to short-term debt - (199.3) 199.3 -
Borrowings repaid (184.2) 184.2 - -
Interest and amortised fees - - (76.0) (76.0)
Currency movements (1.0) - 76.7 75.7
------------- --------------- -------------- --------------
AT 31 DECEMBER 2002 21.9 (68.5) (2,322.0) (2,368.6)
============= =============== ============== ==============
AT 30 SEPTEMBER 2002 107.1 (66.1) (2,393.1) (2,352.1)
Cash flow from operations less interest and
taxation paid and capital expenditures 39.9 - - 39.9
Cash inflow from financing of
acquisitions 78.7 - (78.7) -
Cash outflow on acquisitions (42.9) - - (42.9)
Finance fees paid (4.3) - 4.3 -
Reclass of long-term to short-term debt - (160.8) 160.8 -
Borrowings repaid (157.8) 157.8 - -
Interest and amortised fees - - (28.8) (28.8)
Currency movements 1.2 - 13.5 14.7
Other non-cash movements - 0.6 - 0.6
------------- --------------- -------------- --------------
AT 31 DECEMBER 2002 21.9 (68.5) (2,322.0) (2,368.6)
============= =============== ============== ==============
8
YELL GROUP PLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
CHANGES IN EQUITY SHAREHOLDERS' DEFICIT
SHARE SHARE OTHER PROFIT AND
CAPITAL PREMIUM RESERVES LOSS ACCOUNT TOTAL
---------- ------------- ------------- ------------------ ------------
((POUND) IN MILLIONS)
BALANCE AT 1 APRIL 2002 0.1 0.9 0.1 (50.9) (49.8)
Issuance of share capital
(ordinary shares at par value) 0.1 - - - 0.1
Loss for the period - - - (58.6) (58.6)
Currency movements (a) - - - (36.3) (36.3)
---------- ------------- ------------- ------------------ ------------
BALANCE AT 31 DECEMBER 2002 0.2 0.9 0.1 (145.8) (144.6)
========== ============= ============= ================== ============
BALANCE AT 1 OCTOBER 2002 0.2 0.9 0.1 (112.6) (111.4)
Loss for the period - - - (28.6) (28.6)
Currency movements (a) - - - (4.6) (4.6)
---------- ------------- ------------- ------------------ ------------
BALANCE AT 31 DECEMBER 2002 0.2 0.9 0.1 (145.8) (144.6)
========== ============= ============= ================== ============
(a) The cumulative foreign currency translation adjustment was (pound)3.7
million at 31 March 2002 and (pound)40.0 million at 31 December 2002.
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Our combined and consolidated financial information is prepared in accordance
with accounting principles generally accepted in the United Kingdom ("UK GAAP"),
which differ in certain significant respects from those applicable in the United
States ("US GAAP"). Differences result primarily from the different treatment of
purchase price allocations when accounting for acquisitions, "push-down"
accounting for payments made to certain members of management by BT, costs
associated with selling advertisements, derivative financial instruments,
pensions and deferred taxes. Under US GAAP, a portion of the purchase price is
allocated, when accounting for acquisitions, to the deferred costs of
directories that publish in the months immediately following the acquisition.
Under UK GAAP, the deferred costs, which represent the value of selling efforts
not yet realised, are valued at the lower of historical cost and net realisable
value. The purchase price allocation under US GAAP increases the value of the
selling effort to its fair value and, accordingly, profits in the period
immediately following an acquisition would be significantly lower under US GAAP
than under UK GAAP. Further, under US GAAP, a portion of the purchase price
would be allocated to other intangible assets such as acquired customer
relationships and brand names, which are amortised over a different life than
the goodwill recorded under UK GAAP and establishing associated deferred taxes.
On 1 April 2002, the company adopted Statement of Financial Accounting Standards
No 142 ("SFAS 142") "Goodwill and Other Intangible Assets". SFAS 142 eliminates
amortisation of goodwill associated with business combinations completed after
30 June 2001. During the transition period from 1 July 2001 through 31 March
2002, the company's goodwill associated with business combinations completed
prior to 1 July 2001 continued to be amortised over a period of up to 20 years.
Effective 1 April 2002, all goodwill amortisation was discontinued under US
GAAP. Upon adoption the Yell Group completed its impairment
9
YELL GROUP PLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
tests of goodwill as of 1 April 2002 and determined that goodwill balances were
not impaired. Also upon adoption the company evaluated its depreciable
intangible assets and determined that their remaining useful lives were
appropriate.
The following information summarises estimated adjustments, gross of their tax
effect, which reconcile net income and shareholders' deficit from that reported
under UK GAAP to that which would have been recorded had US GAAP been applied.
NET LOSS
NINE MONTHS
ENDED 31 NINE MONTHS
DECEMBER 2001 ENDED 31
(AGGREGATED) DECEMBER 2002
---------------------- -----------------------
((POUND) IN MILLIONS)
Loss for the financial period under UK GAAP (24.0) (58.6)
Adjustment for:
Directories in progress:
-Deferred costs (16.0) (25.0)
-Acquisition accounting (94.1) (24.2)
Pensions (1.7) (1.9)
Goodwill and other intangibles (31.4) (17.8)
Derivative financial instruments (15.3) (12.7)
Management incentive plans (a) (24.1) -
Deferred taxation 51.0 32.7
---------------------- -----------------------
NET LOSS ADJUSTED FOR US GAAP (155.6) (107.5)
====================== =======================
(a) Represents certain one-off adjustments that arose as a result of
acquisitions.
Effective 1 April 2002, the Group prospectively adopted SFAS 142 for US GAAP
reporting purposes which effectively suspends the amortisation of goodwill. The
following pro forma presentation restates the prior period's net loss as if SFAS
142 had been applied from 1 April 2001.
PRO FORMA NET LOSS
NINE MONTHS
ENDED 31
DECEMBER 2001
(AGGREGATED)
-------------------------
((POUND IN MILLIONS)
REPORTED NET LOSS AS ADJUSTED FOR US GAAP (155.6)
Goodwill amortisation, net of tax 22.3
-------------------------
PRO FORMA NET LOSS AS ADJUSTED FOR US GAAP (133.3)
=========================
10
YELL GROUP PLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
AT 31
MARCH AT
2002 31 DECEMBER
(AS REPORTED) 2002
------------------- --------------------
((POUND) IN MILLIONS)
Equity shareholders' deficit under UK GAAP (49.8) (144.6)
Adjustment for:
Directories in progress (72.4) (92.6)
Pensions 7.6 5.7
Goodwill and other intangibles 210.3 229.3
Derivative financial instruments (11.3) (23.9)
Deferred taxation (235.0) (234.6)
EQUITY SHAREHOLDERS' DEFICIT AS ADJUSTED
------------------- --------------------
FOR US GAAP (150.6) (260.7)
=================== ====================
11