EXHIBIT 99.1
27 MARCH 2003
TELEWEST COMMUNICATIONS PLC
4TH QUARTER AND FULL YEAR RESULTS 2002
FINANCIAL SUMMARY
- ------------------------------- ---------------------- -------------------- -----------------
YEAR YEAR
ENDED ENDED
31 DEC 2002 31 DEC 2001 % CHANGE
(POUND)M (POUND)M
TOTAL TURNOVER * 1,347 1,323 + 2%
EBITDA ** 379 319 + 19%
EBITDA MARGIN ** 28% 24% + 4% PTS
NET LOSS *** (506) (801) - 37%
CAPEX 477 653 - 27%
NET DEBT 5,269 5,118 + 3%
- ------------------------------- ---------------------- -------------------- -----------------
* includes Telewest's proportionate share of UKTV and in 2002 is before
exceptional item of (pound)16m.
** includes Telewest's proportionate share of UKTV and in 2002 is before
exceptional items of (pound)38m.
*** shown before exceptional items in 2002 of (pound)1,712m and in 2001
(pound)1,134m.
HIGHLIGHTS
- - BROADBAND LEADERSHIP
- 297,000 BROADBAND SUBSCRIBERS TODAY
- 10% OF CUSTOMERS SUBSCRIBE TO TRIPLE-PLAY (UP FROM 3%)
- - EBITDA BEFORE EXCEPTIONALS UP 19% YEAR-ON-YEAR TO(POUND)379M
- - HEADCOUNT REDUCTIONS OF 1,450 DELIVERED
- - CAPEX DOWN BY 27% YEAR-ON-YEAR
- - EXCEPTIONAL NON-CASH CHARGE OF(POUND)1,643M FOR ASSET IMPAIRMENT
- - FINANCIAL RESTRUCTURING DISCUSSIONS CONTINUE
COMMENTING ON THE RESULTS, CHARLES BURDICK, MANAGING DIRECTOR OF TELEWEST
COMMUNICATIONS, SAID:
"We continue our focused strategy designed to accelerate cash generation, future
profitability and provide a platform for growth. These results demonstrate the
progress we have made. Costs (before redundancy payments) and capex are
significantly down and revenues, EBITDA and EBITDA margin are up. We now have
297,000 broadband customers and approximately 80% market share in our cabled
areas.
"Our efforts are now focused on sustaining our leadership in broadband, building
a profitable customer-base, great customer service and controlling costs. We are
building on our strengths in local access to the residential and business
customer; the power of bundling multiple services; and our unique position in
content through our ownership of Flextech.
Management and staff have responded well in very difficult circumstances and I
am confident that the right strategies and steps have now been taken to deliver
the vision for this company."
ENQUIRIES TO TELEWEST COMMUNICATIONS PLC
Charles Burdick managing director 020 7299 5000
Jane Hardman director of corporate communications 020 7299 5888
Richard Williams head of investor relations 020 7299 5479
And at
BRUNSWICK
John Sunnucks 020 7404 5959
Sarah Tovey 020 7404 5959
FOR AN AUDIO VISUAL INTERVIEW WITH TELEWEST MANAGING DIRECTOR, CHARLES BURDICK,
PLEASE VISIT WWW.CANTOS.COM OR WWW.TELEWEST.CO.UK
FINANCIAL REVIEW
Except where stated otherwise, all profit and loss items are stated before
exceptional items.
Total turnover (including our share of UKTV, our joint venture with the BBC) for
the year ended 31 December 2002 increased 2% to (pound)1,347 million compared to
2001, driven mainly by 6% growth in the Consumer Division to (pound)910 million.
Content Division revenues, including UKTV, fell by (pound)22 million primarily
due to the disposal of non-core businesses and the closure of ITV Digital.
Business Division revenues fell by (pound)7 million reflecting a continuing
weakness in the Carrier market.
Gross margin improved from 63% to 68% for the year with strong improvements in
CATV margins, rising telephony margins and a growing number of high margin
broadband subscribers. CATV margins improved from 57% to 62% as a result of
selected price rises, a reduction in the proportion of subscribers taking lower
margin BSkyB premium channels and cost reductions in programming. Telephony
margins have improved from 69% to 71% as a result of selected price increases,
an improvement in the mix of telephony revenue, improved routing of telephony
traffic and a reduction in termination rates for certain calls. Gross margin is
stated after having taken into account cost of sales, before depreciation.
Selling, general and administrative expenses ("SG&A") for the year were
(pound)499 million, up (pound)8 million on 2001. SG&A includes (pound)25 million
of redundancy costs of which (pound)5 million was incurred in the fourth
quarter.
As a result of the continuing improvements in revenue, gross margin and cost
control, the Group's EBITDA for the year grew 19% to (pound)379 million. This
includes our (pound)11 million share of UKTV's EBITDA. EBITDA margin grew from
24% to 28% for the year. EBITDA for the fourth quarter, including (pound)1
million from UKTV, was (pound)99 million. Excluding UKTV, EBITDA for the year
was (pound)368 million, up 20% on 2001.
Net loss for the year improved from (pound)801 million to (pound)506 million.
The improvement was as a result of the 19% improvement in EBITDA, net foreign
exchange gains relating to our US dollar denominated debt, and lower goodwill
amortisation costs, partially offset by higher depreciation and interest
charges.
Capital expenditure has fallen 27% in 2002 to (pound)477 million as the Group
continues its focus on cash and cost control.
In the fourth quarter, Telewest sold for cash its shareholding in SMG for
(pound)45 million and Maidstone Studios for (pound)4 million.
As at 31 December 2002, net debt stood at (pound)5,269 million. This comprises
(pound)3,419 million of notes and debentures, (pound)231 million of lease and
vendor financing, (pound)9 million of other loans and (pound)2,000 million drawn
down on our bank facility, offset by cash balances and short term deposits of
(pound)390 million.
EXCEPTIONAL ITEMS
The Group has provided (pound)16 million against turnover as a result of a VAT &
Duties Tribunal judgement in a dispute over the VAT status of our cable TV
listings magazines. Previously this was disclosed as a contingent liability. The
amount arises from VAT payable in the period from January 2000 to July 2002. The
Company has appealed against this ruling. An exceptional amount of (pound)2
million has also been provided for interest on the amount in dispute.
The Group has provided (pound)22 million for exceptional legal and professional
costs of its balance sheet restructuring. Additionally, (pound)29 million is
included in interest payable relating to an exceptional write-off of bank
facility fees which were previously being carried forward over the lifetime of
our Senior Secured facility that is being renegotiated as part of our balance
sheet restructuring.
Reflecting current market conditions, the Group has performed impairment tests
on the carrying value of its assets. The impairment review was carried out in
accordance with UK Accounting Standards to ensure that the carrying value of our
separately identifiable assets in both Cable and Content Divisions are stated at
no more than their recoverable amount, being the higher of net realisable value
and value in use. This has resulted in (pound)1,643 million of exceptional
non-cash charges. The non-cash charges comprise of impairment to goodwill
((pound)1,486 million relating to both Cable and Content Divisions' goodwill and
(pound)70 million relating to joint ventures' goodwill) and fixed assets
((pound)87 million relating to certain Cable Division fixed assets.)
Net loss after exceptional items for the year was (pound)2,218 million compared
to (pound)1,935 million last year.
GOING CONCERN
These financial statements have been prepared on a going concern basis and do
not include any adjustments that would arise as a result of the going concern
basis of preparation being inappropriate. The Board of Directors have confidence
in the successful conclusion of a restructuring of the Company's balance sheet
(and any required amendments to the Senior Secured Facility) and, together with
and on the basis of cash flow information that they have prepared, the directors
consider that the Group will continue to operate as a going concern for a period
of at least 12 months from the date of issue of these financial statements. For
additional information concerning the proposed restructuring of the Company's
balance sheet see Recent Developments. Any restructuring will require the
approval of our bankers and various stakeholders. Inherently, there can be no
certainty in relation to any of these matters.
AUDIT REPORT
Our auditors have considered the adequacy of the disclosures made in the
consolidated financial statements concerning the uncertainty as to the ability
of the Company and the Group to continue to meet their debts as they fall due.
This depends upon the successful conclusion of the proposed restructuring
referred to throughout this results announcement.
In view of the significance of this uncertainty the auditors consider that it
should be brought to shareholders' attention but their opinion is not qualified
in this respect.
RECENT DEVELOPMENTS
On 30 September 2002, we announced that we had reached a preliminary agreement
relating to a financial restructuring ("the Financial Restructuring") with an ad
hoc committee of our bondholders ("the Bondholder Committee"). That agreement
provides for the cancellation of all outstanding notes and debentures ("the
Notes"), representing approximately (pound)3.5 billion of indebtedness, issued
by the Company and Telewest Finance (Jersey) Limited and certain other unsecured
foreign exchange hedge contracts ("the Hedge Contracts") of the Company in
exchange for New Ordinary Shares ("New Shares") representing 97 per cent of the
issued share capital of the Company immediately after the Financial
Restructuring. The Company's current ordinary shareholders will receive the
remaining 3 per cent of the Company's issued ordinary share capital.
We also announced on 30 September 2002 that we were deferring payment of
interest under certain of our Notes and the settlement of the Hedge Contracts.
Such non-payment continues and has resulted in defaults under the Group's bank
facilities and a number of other financing arrangements. Based on one such
default, in respect of non-payment of approximately (pound)10.5 million to a
Hedge Contract counter-party, that counter-party has filed a petition for the
winding up of the Company with a UK Court. The Company intends to deal with this
claim as part of the overall restructuring of its unsecured debt obligations and
does not believe that the legal action will significantly impede the Financial
Restructuring process. The Company will of course continue to meet its
obligations to its suppliers and trade creditors and this legal action is
expected to have no impact on customer service.
On 15 January 2003, we announced that we had reached a non-binding agreement
with respect to the terms of amended and restated credit facilities with both
the steering committee of our senior lenders and the Bondholder Committee. In
addition, the terms of these facilities have received credit committee approval,
subject to documentation and certain other issues, from all of our senior
lenders, save for those banks which are also creditors by virtue of the
unsecured Hedge Contracts with which we will deal in the overall Financial
Restructuring. These amended facilities will replace the Group's existing bank
facilities and are, as noted above, conditional on various matters, including
the satisfactory finalisation of arrangements for dealing with foreign exchange
creditors and the completion of our balance sheet restructuring. These amended
credit facilities will provide the Company with substantial liquidity, which is
expected to be sufficient to see the Company through to cash flow positive after
completion of the Financial Restructuring.
Negotiations are continuing with the Bondholder Committee, the Company's senior
lenders and certain other major stakeholders with a view to the completion of
the Restructuring.
BUSINESS REVIEW
CONSUMER DIVISION
Consumer Division revenues grew 6% to (pound)910 million resulting mainly from
the growth of our broadband products, increased multi-service penetration and
selected price rises. This all contributed to household ARPU growing by 4% to
(pound)41.80 for the year. Compared to the third quarter, ARPU in the fourth
quarter grew by 1% to (pound)41.96.
We have seen a three-fold increase to 183,000 triple play customers subscribing
to broadband internet, telephone and TV. These triple play customers accounted
for 10% of our customer base at the year-end. Triple play customers are our most
profitable customer segment and grew by 28,000 in the fourth quarter.
During the fourth quarter, household customers grew by 400 compared to customer
losses in the previous two quarters. Revenue growth has been impacted by net
household customer losses of 7,000 in 2002, resulting from price rises and more
rigorous enforcement of installation fees and disconnection policies in line
with our objective of focusing on more cash generative customers. This strategy
rather than one of absolute customer growth means that we do not expect to see
strong customer growth in the near future. As part of this, we have introduced a
(pound)50 upfront payment (offset against any installation fee or subscription
payment) for all new customers and we have continued to tighten our credit
control policy. We are also not actively selling our entry TV package to new
subscribers. We believe initiatives such as these should contribute to
profitability, cash generation and churn reductions although may not generate
overall customer growth.
Telewest reports churn on a product basis, with 12 month rolling churn figures
for broadband internet, residential telephony and CATV. To this we are now
adding household churn, which measures those customers who disconnect entirely
from Telewest. (A full definition can be found in the operating statistics
section of this release.) Household churn in the fourth quarter was 15.7%.
Included within this calculation are "uncontrollable" disconnections as
customers disconnect when they move out of our addressable areas, which account
for approximately 20% of the UK's households.
INTERNET
Internet and other revenues increased by 98% to (pound)79 million in 2002 due to
the growth in broadband subscribers.
Net broadband additions in the fourth quarter were 46,000. At the year-end, we
had 262,000 broadband subscribers, representing subscriber growth of 21% since
the end of the third quarter. This reflects our continued success in broadband -
we remain the market leader within our addressable areas. 70% of broadband
customers subscribe to the full triple play and 93% take at least one other
product. Broadband is also successful in attracting new customers to Telewest.
In the fourth quarter, 40% of broadband installations were for subscribers new
to Telewest.
As well as our minimum standard 512Kb blueyonder broadband service, we also
offer a 1Mb service at twice the connection speed of ADSL. At the year-end,
27,000 or 10% of our broadband subscribers took this 1Mb service. We are
currently trialling a faster 2Mb service to 1,500 customers and plan to launch
later in the year, demonstrating again our focus on providing broadband
leadership.
Broadband growth has continued and as at 26 March, we had 297,000 broadband
subscribers, of which 31,000 took the 1Mb service.
In January, we launched a self-installation option for broadband, costing only
(pound)12.50 for installation - the lowest permanent entry price to broadband in
the UK. This option makes use of cable modems embedded in set-top boxes and is
available to our 857,000 digital TV subscribers. We believe this will improve
customer satisfaction and reduce our installation costs. We are also trialling a
wireless self-installation pack, which we intend to launch later this year.
Together with our dial-up internet services, we have 540,000 internet
subscribers. Dial-up is led by SurfUnlimited, which introduces our subscribers
to a reliable fixed-fee unmetered service. In the fourth quarter, 19% of our
broadband installations were for subscribers who had migrated from
SurfUnlimited.
On 1 March 2003, we raised the price of SurfUnlimited by (pound)1 to (pound)13,
which remains one of the lowest cost unmetered services in the UK today. The
price of our Pay-As-You-Go dial-up internet service has also risen from 1.5p per
minute to 2p as we continue to migrate these subscribers to a flat rate service.
We are also continuing to enhance our broadband content by developing our
network gaming skills. In alliance with Microsoft, we are conducting consumer
trials of the Xbox Live service and aim to develop a fully supportive service,
providing a user-friendly connection between the console, PC and cable modem.
Xbox Live will enable our broadband internet users to play games online with
friends, talk to other players and download current statistics, new levels and
characters. We are also working closely with Sony to help, develop and implement
technologies to enhance the consumer experience for PlayStation 2 network
gaming.
Our current PC based broadband gaming service bygames.com, with 58,000
registered users at the year-end, was recently declared "Best Gaming Service" at
the Future UK Internet Awards.
RESIDENTIAL TELEPHONY
The number of telephony subscribers at 1.6m has remained relatively flat for
both the year and the fourth quarter. Average monthly revenue per line for the
year was (pound)23.16 compared to (pound)22.79 in 2001 reflecting the continued
takeup of Talk Unlimited. Average monthly revenue per subscriber was marginally
down at (pound)24.92 due to the migration of dial-up internet subscribers to
broadband, which reduces second line penetration. Residential telephony revenues
were also impacted by the transfer of dial-up minutes of a large ISP's
subscribers to a flat rate access regime provided by our Carrier Services unit.
Subscribers to Talk Unlimited, continued to increase with 15,000 net additions
in the quarter. This is our 24-hour 7 day-a-week flat rate unmetered residential
voice service available for local and national calls in the UK. At the year-end,
we had 361,000 Talk Unlimited subscribers representing 22% of our residential
telephony base.
At the beginning of 2003, we expanded our flat rate telephony services by
launching Talk Evenings and Weekends. For (pound)17.50 per month, it gives our
customers totally unlimited local and national weekend and evening calls to
anywhere in the UK, including line rental. On 1 March, we expanded this range
further by launching Talk International for (pound)3 per month, which offers
reduced rates to all international destinations. We are also improving value for
our telephony consumers by offering them free voicemail.
On 22 January 2003, the Competition Commission announced that the mobile
operators must make significant cuts to their termination rates charged to fixed
line operators such as Telewest for fixed to mobile calls. Mobile interconnect
costs are a significant cost to our business. These cuts are due to be
implemented by 25 July 2003 and we continue to explore options to provide even
more innovative new telephone packages, so that we can pass on value to our
customers.
CATV
At the year-end, we had 1.3 million TV subscribers, of which 66% are digital
subscribers. Of our consumer products, CATV carries the highest upfront
investment and lowest margins. Therefore, our focus on cash and on profitable
customers has impacted the CATV customer base more than our other products, and
net disconnections in the quarter were 11,000. This does however represent a
slowing of subscriber losses compared to the previous two quarters. During the
year, we have lost 48,000 CATV subscribers as we have shifted our focus towards
acquiring profitable customers rather than on pursuing overall subscriber
growth.
Initiatives taken during the year to improve mix and target more profitable
customers included an August price increase for new customers subscribing to the
entry pack. We have now completely withdrawn our entry TV package from sale to
new subscribers and any customer who wishes to subscribe to TV as a stand-alone
product must take our top-tier basic package, Supreme. We have now also
withdrawn the Essential Plus package for new subscribers as we encourage
customers to take the full Supreme package.
CATV monthly ARPU remained flat for the year at (pound)20.82. The pay-to-basic
ratio has fallen to 72% from 80%. In the fourth quarter, the percentage of
subscribers taking our entry package fell to 18% as we began to successfully
improve our product mix.
In 2003, improvements to our digital TV packages continue with the addition of
Sky Multiplex (offering nine extra movie channels) and ten new basic
entertainment channels, providing even more choice and value.
BUSINESS DIVISION
Excluding Carrier Services, the Business Division's revenues for 2002 grew 5% to
(pound)224 million. The Division benefited from the strategic focus on high
margin data and internet products as we continue to leverage our local network
and product set and focus on upselling services to existing customers, which has
grown revenues and improved margins.
The focus on upsell has resulted in existing customers renewing contracts and
extending services with us such as The Scotsman newspaper. It has extended its
existing contract with us for another three years and is also taking additional
innovative technology services including IPVPN (Internet Protocol Virtual
Private Network) with MPLS (Multi Protocol Label Switching) across various
sites. It is also implementing a new Automatic Call Distribution (ACD) system to
enhance call handling services in its call centre and adopting a new Internet
structure.
Other new data contracts include one providing Littlewoods Leisure with the
capacity to run a VOIP (Voice Over Internet Protocol) service. This service
ensures the delivery of high quality voice communications across the IP Network,
which is constantly monitored to ensure that there is sufficient bandwidth to
prioritise the customer's delivery requirements.
We also continue to strengthen our public sector activity with a major contract
signed with Newcastle City Council to link and manage the joining of 15 local
libraries to the Telewest Schools Wide Area Network, into which 113 schools are
connected. The contract is worth (pound)2.1 million over five years.
Carrier Services revenues were (pound)43 million, down from (pound)61 million in
2001 reflecting a weakness in general market conditions. Carrier Services offers
our national network to other carriers and operators (such as T-Mobile) for
voice and data communications.
CONTENT DIVISION
Content Division revenues totalled (pound)170 million in 2002, including
(pound)64 million being our 50% share of UKTV revenue. Content Division revenues
are down (pound)22 million in 2002 mainly due to the disposal of non-core
businesses. The closure of ITV Digital also had an impact through lost
subscription revenue for UKTV.
Advertising revenues of (pound)73 million (including our 50% share of UKTV) for
the year were up 12% in a market that saw only a 5% overall rise. This strong
performance derives from the viewing strength of its channels, with its viewing
share in pay-TV homes growing from 6.1% to 6.6% and its share of basic viewing
remaining stable at 20.4%. In 2002, UK Gold was the second most watched
basic-pay channel in pay-TV homes, with LivingTV the sixth. The Content Division
grew its market share with a 3.4% share of the TV advertising market in the UK,
up from 3.0% in 2001.
Subscription revenues of (pound)65 million (including our 50% share of UKTV) in
2002 were down 4% on 2001 and were affected overall by the closure of ITV
Digital. This was partially offset by strong subscriber growth at BSkyB and
improved tiering at NTL.
On 15 January 2003, Flextech launched its latest TV channel, Ftn and UKTV
launched UK Bright Ideas on the new Freeview digital terrestrial platform. These
channels joined UK History which launched in October, and the Content Division
now has three channels on this new distribution platform.
NOTES:
1. Non-statutory information provided in this document is defined as follows:
o EBITDA, which we consider is a standard measure commonly reported and
widely used by analysts, investors and other interested parties in the
cable television and telecommunications industry, represents group
operating profit before deducting depreciation of fixed assets and
amortisation of goodwill.
o Gross margin is defined as Group turnover less cost of sales before
deducting depreciation.
All commentary in this document is based on the Group's UK GAAP financial
results unless otherwise specified.
2. The following is included in connection with legislation in the United
States, the Safe Harbor Statement under the US Private Securities Litigation
Reform Act of 1995: the foregoing includes certain forward looking statements
that involve various risks and uncertainties which could lead to actual results
significantly different than those anticipated by Telewest. For a discussion of
certain of these risks and uncertainties, see the Company's Annual Report on
Form 20-F filed with the US Securities and Exchange Commission on 1 July 2002.
TELEWEST COMMUNICATIONS PLC
OPERATING STATISTICS - UNAUDITED
- ---------------------------------------------------------------------------------------------------------------------------
CONSUMER DIVISION
NET ADDITIONS NET ADDITIONS Net additions Net additions
Q4 2002 2002 Q4 2001 2001
- ---------------------------------------------------------------------------------------------------------------------------
Household customers 391 (6,994) 21,007 74,278
Blueyonder broadband internet subscribers 46,046 177,097 31,988 78,229
Telephony subscribers (866) (1,485) 24,143 77,669
Telephone lines (8,713) (45,121) 17,885 56,153
Cable television subscribers (11,024) (47,973) 23,805 92,174
- ---------------------------------------------------------------------------------------------------------------------------
AS AT 31 DEC As at 31 Dec
2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Homes passed 4,895,956 4,914,155
Homes passed and marketed 4,699,694 4,713,937
Dual or triple service subscribers (1) 1,228,586 1,218,294
Cable television only subscribers 116,508 138,053
Residential telephony only subscribers 395,133 401,286
Internet only subscribers 18,398 7,986
Total residential subscribers 1,758,625 1,765,619
Household penetration 37.4% 37.5%
Percentage of triple service subscribers (1) 10.4% 3.3%
Percentage of dual or triple service subscribers (1) 69.9% 69.0%
Average household churn (2) 18.2% N/A
Average monthly revenue per subscriber (3) (POUND)41.80 (pound)40.03
- ---------------------------------------------------------------------------------------------------------------------------
BLUEYONDER INTERNET SUBSCRIBERS
Blueyonder broadband 262,219 85,122
Blueyonder SurfUnlimited 193,201 184,034
Blueyonder pay-as-you-go 85,025 119,295
Total Internet subscribers 540,445 388,451
- ---------------------------------------------------------------------------------------------------------------------------
BLUEYONDER BROADBAND
Average subscriber churn rate (4) 12.4% 7.5%
Average monthly revenue per subscriber (5) (POUND)25.12 (pound)25.21
- ---------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL TELEPHONY
Residential telephony subscribers 1,614,324 1,615,809
Talk Unlimited subscribers 360,662 154,566
Residential telephony penetration (6) 34.4% 34.3%
Residential telephone lines 1,717,191 1,762,312
Second line penetration 6.4% 9.1%
Average subscriber churn rate (7) 17.3% 16.5%
Average monthly revenue per line (8) (POUND)23.16 (pound)22.79
Average monthly revenue per subscriber (9) (POUND)24.92 (pound)25.09
- ---------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
Cable television subscribers 1,293,811 1,341,784
Digital television subscribers 857,472 723,826
Penetration rate (10) 27.5% 28.5%
Average subscriber churn rate (11) 21.5% 18.7%
Average monthly revenue per subscriber (12) (POUND)20.82 (pound)20.75
- ---------------------------------------------------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS PLC
OPERATING STATISTICS - UNAUDITED (CONTINUED)
- ------------------------------------------------------------------------------------------------------------
AS AT 31 DEC As at 31 Dec
2002 2001
- ------------------------------------------------------------------------------------------------------------
BUSINESS DIVISION
Business customer accounts 73,746 72,934
Business telephony lines 466,820 444,998
Average business lines per customer account (13) 6.3 6.1
Average annualised monthly revenue per business line (14) (POUND)41.96 (pound)44.12
Annualised revenue per customer account (15) (POUND)3,114 (pound)3,137
- ------------------------------------------------------------------------------------------------------------
CONTENT DIVISION
Pay multichannel subscribers 9,764,233 10,504,118
Flextech share of basic viewing (16) 20.4% 20.4%
Share of total TV advertising revenues (17) 3.4% 3.0%
- ------------------------------------------------------------------------------------------------------------
(1) Dual or triple service subscribers are those subscribers who
take at least two or all three of our cable television,
residential telephony and broadband internet services.
(2) Average household churn rate for the period is calculated on a
rolling 12-month basis and represents (i) the total number of
residential customers who disconnected or who were
disconnected during such period, divided by (ii) the average
number of residential customers in such period
(3) Average monthly revenue per subscriber (often referred to as
"ARPU" or "Average Revenue per User") represents (i) the
average monthly revenue of residential customers for such
period, divided by (ii) the average number of residential
customers in such period.
(4) Average blueyonder broadband subscriber churn rate for the
period is calculated on a rolling 12-month basis and
represents (i) the total number of blueyonder broadband
subscribers who terminated their services or whose services
were terminated during such period, divided by (ii) the
average number of blueyonder broadband subscribers in such
period.
(5) Average monthly revenue per blueyonder broadband subscriber
for each period represents (i) the average monthly blueyonder
broadband revenue for such period, divided by (ii) the average
number of blueyonder broadband subscribers in such period.
(6) Residential telephony penetration rate at a specified date
represents (i) the total number of residential cable telephony
subscribers at such date divided by (ii) the total number of
homes passed and marketed for residential cable telephony at
such date.
(7) Average residential telephony subscriber churn rate for the
period is calculated on a rolling 12-month basis and
represents (i) the total number of residential cable telephony
subscribers who terminated telephony services or whose
services were terminated during such period, divided by (ii)
the average number of residential cable telephony subscribers
in such period.
(8) Average monthly revenue per residential telephony line for
each period represents (i) the average monthly residential
cable telephony revenue for such period, divided by (ii) the
average number of residential cable telephony lines in such
period.
(9) Average monthly revenue per residential telephony subscriber
for each period represents (i) the average monthly residential
cable telephony revenue for such period, divided by (ii) the
average number of residential cable telephony subscribers in
such period.
(10) Cable television penetration rate at a specified date
represents (i) the total number of cable television
subscribers at such date, divided by (ii) the total number of
homes passed and marketed for cable television at such date.
(11) Average cable television subscriber churn rate for the period
is calculated on a rolling 12-month basis and represents (i)
the total number of cable television subscribers who
terminated basic services or whose services were terminated
during such period, divided by (ii) the average number of
cable television subscribers in such period.
(12) Average monthly revenue per cable television subscriber for
each period represents (i) the average monthly cable
television revenue for such period, divided by (ii) the
average number of cable television subscribers in such period.
(13) Average number of business lines per customer account at a
specified date represents (i) the number of business cable
telephony lines at such date, divided by (ii) the average
number of business cable telephony customer accounts at such
date.
(14) Average annualised monthly revenue per business line
represents (i) the average monthly business services revenue
for the 12 months to date, divided by (ii) the average number
of business lines in such period.
(15) Average annualised revenue per customer account represents
(i) the average monthly business services revenue for the 12
months to date, divided by (ii) the average number of
business services customers in such period, multiplied by 12
months.
(16) Basic viewing over 24 hours in pay-TV homes.
(17) Includes Flextech's wholly owned channels and UKTV's
advertising revenues
TELEWEST COMMUNICATIONS PLC
UK GAAP
SUMMARISED AUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
2002 2002 2002 2001
BEFORE EXCEPTIONAL TOTAL TOTAL
EXCEPTIONAL ITEMS
ITEMS (note 5)
(POUND)M (POUND)M (POUND)M (POUND)M
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
TURNOVER
Consumer Division:
Cable television 336 - 336 329
Telephony 495 - 495 488
Internet and other 79 (16) 63 40
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
910 (16) 894 857
Business Division 267 - 267 274
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
TOTAL CABLE DIVISION 1,177 (16) 1,161 1,131
CONTENT DIVISION
Programming, transactional and interactive revenues 106 - 106 129
Share of joint ventures' turnover (UKTV) 64 - 64 63
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
TOTAL CONTENT DIVISION 170 - 170 192
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
TOTAL TURNOVER 1,347 (16) 1,331 1,323
Less: share of joint ventures' turnover (64) - (64) (63)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
GROUP TURNOVER (note 1) 1,283 (16) 1,267 1,260
TOTAL OPERATING COSTS (note 2) (1,524) (1,595) (3,119) (2,572)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
GROUP OPERATING LOSS (note 1) (241) (1,611) (1,852) (1,312)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
Group Turnover 1,283 (16) 1,267 1,260
Operating expenses before depreciation and amortisation (915) (22) (937) (954)
----------------- ----------------- --------------- --------------
EBITDA (note1) 368 (38) 330 306
Depreciation and amortisation (note 2) (609) (1,573) (2,182) (1,618)
----------------- ----------------- --------------- --------------
Group operating loss (241) (1,611) (1,852) (1,312)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
SHARE OF OPERATING PROFITS OF JOINT VENTURES 10 - 10 9
SHARE OF OPERATING LOSSES OF ASSOCIATED UNDERTAKINGS (1) - (1) (7)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
TOTAL OPERATING LOSS (232) (1,611) (1,843) (1,310)
GAIN/(LOSS) ON DISPOSAL OF INVESTMENTS 36 - 36 (4)
INTEREST RECEIVABLE AND SIMILAR INCOME (note 3) 309 - 309 15
AMOUNTS WRITTEN OFF INVESTMENTS (47) (70) (117) (138)
INTEREST PAYABLE AND SIMILAR CHARGES (note 4) (572) (31) (603) (494)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (506) (1,712) (2,218) (1,931)
TAX ON LOSS ON ORDINARY ACTIVITIES (1) - (1) (5)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (507) (1,712) (2,219) (1,936)
MINORITY INTERESTS 1 - 1 1
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
LOSS FOR FINANCIAL YEAR (506) (1,712) (2,218) (1,935)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
LOSS PER ORDINARY SHARE (pence) (17.6) (59.6) (77.2) (67.2)
- -------------------------------------------------------------- ----------------- ----------------- --------------- --------------
The financial information presented above reflects the continuing operations of
the business. The consolidated financial information set out on pages 10 to 14,
has been prepared on the basis of the accounting policies set out in Telewest's
Annual Report. The audited consolidated financial information set out pages 10
to 14, does not constitute the Company's statutory accounts for the years ended
31 December 2002 or 2001 but is derived from those accounts. Statutory accounts
for 2001 were delivered to the Registrar of Companies following the Company's
Annual General Meeting on 11 June 2002. The auditors have reported on those
accounts; their report was unqualified and did not contain statements under
section 237(2) or (3) of the Companies Act 1985.
TELEWEST COMMUNICATIONS PLC
UK GAAP
SUMMARISED AUDITED CONSOLIDATED BALANCE SHEETS
AS AT 31 DECEMBER
- ----------------------------------------------------------------------- ---------------------- ----------------------
2002 2001
(POUND)M (POUND)M
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
FIXED ASSETS
Intangible assets 157 1,743
Tangible assets 3,398 3,498
Investment in joint ventures:
Share of gross assets 45 30
Goodwill 241 330
Share of gross liabilities (146) (138)
Loans to joint ventures 208 218
--------- ---------
348 440
Investments in associated undertakings and
participating interests 8 107
Other investments - 1
--------- ---------
356 548
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
3,911 5,789
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
CURRENT ASSETS
Stocks 28 67
Debtors 210 239
Secured cash deposits restricted for more than one year 12 20
Cash at bank and in hand 390 14
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
640 340
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR(includes convertible
debt of(pound)282m in 2002) (4,410) (670)
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
NET CURRENT LIABILITIES (3,770) (330)
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
TOTAL ASSETS LESS CURRENT LIABILITIES 141 5,459
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE (1,932) (5,031)
YEAR (includes convertible debt of(pound)608m in 2002
and(pound)904m in 2001)
MINORITY INTERESTS 1 (1)
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
NET (LIABILITIES)/ASSETS (1,790) 427
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
EQUITY SHAREHOLDERS' (DEFICIT)/FUNDS (1,790) 427
- ----------------------------------------------------------------------- --------- ------------ --------- -------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
SUMMARISED AUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
- ---------------------------------------------------------------------------------------------- --------------- ---------------
2002 2001
(POUND)M (POUND)M
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH INFLOW FROM OPERATING ACTIVITIES (note 6) 391 348
- ---------------------------------------------------------------------------------------------- --------------- ---------------
DIVIDENDS RECEIVED FROM ASSOCIATED UNDERTAKINGS 1 3
- ---------------------------------------------------------------------------------------------- --------------- ---------------
RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Interest received 7 5
Interest received from joint ventures 12 12
Interest paid (287) (335)
Dividend paid to minority interests in subsidiary undertaking (1) -
Interest element of finance lease payments (18) (20)
Issue costs of Notes and credit facility arrangement costs - (41)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (287) (379)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (448) (548)
Sale of tangible fixed assets 1 2
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE (447) (546)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertakings - (6)
Disposal of subsidiary undertakings 14 10
Cash disposed of with a subsidiary undertaking - (2)
Disposal of associated undertakings 59 -
Investments in associated undertakings and other participating interests (2) (26)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH INFLOW/(OUTFLOW) FROM ACQUISITIONS AND DISPOSALS 71 (24)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (271) (598)
MANAGEMENT OF LIQUID RESOURCES
Net (increase)/decrease in fixed and secured deposits (229) 11
- ---------------------------------------------------------------------------------------------- --------------- ---------------
FINANCING
Net repayment of borrowings under old credit facilities - (824)
Net proceeds from borrowings under new credit facilities 640 1,393
Net proceeds from maturity of forward contracts 76 -
Repayments of loans made to joint ventures (net) 9 9
Repayment of SMG equity swap (33) -
Proceeds from issue of Accreting Convertible Notes, 2003 - 30
Repayment of other borrowings (2) -
Proceeds from exercise of share options - 6
Capital element of finance lease payments (51) (54)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
NET CASH INFLOW FROM FINANCING 639 560
- ---------------------------------------------------------------------------------------------- --------------- ---------------
INCREASE/(DECREASE) IN CASH IN THE YEAR 139 (27)
- ---------------------------------------------------------------------------------------------- --------------- ---------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
NOTES TO THE SUMMARISED AUDITED CONSOLIDATED ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
CABLE CONTENT INTER- TOTAL CABLE CONTENT INTER- TOTAL
DIVISIONAL DIVISIONAL
2002 2002 2002 2002 2001 2001 2001 2001
(POUND)M (POUND)M (POUND)M (POUND)M (POUND)M (POUND)M (POUND)M (POUND)M
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
1 SEGMENTAL ANALYSIS
Group Turnover before exceptional item 1,177 121 (15) 1,283 1,131 143 (14) 1,260
(pound)16m in 2002
Operating expenses before exceptional
items (pound)22m in 2002, depreciation
and amortisation (816) (114) 15 (915) (833) (135) 14 (954)
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
EBITDA before exceptional items 361 7 - 368 298 8 - 306
Exceptional items (38) - - (38) - - - -
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
EBITDA after exceptional items 323 7 - 330 298 8 - 306
Depreciation and amortisation (548) (61) - (609) (497) (129) - (626)
Exceptional items -
Impairment of tangible assets (87) - - (87) - - - -
Impairment of goodwill (1,110) (376) - (1,486) - (992) - (992)
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
GROUP OPERATING LOSS (1,422) (430) - (1,852) (199) (1,113) - (1,312)
- ---------------------------------------- --------- --------- ----------- --------- --------- ---------- ----------- -----------
2002 2001
(POUND)M (POUND)M
- ------------------------------------------------------------------------------------------------- -------------- ---------------
2 TOTAL OPERATING COSTS
COST OF SALES:
Consumer programming expenses 128 142
Business and consumer telephony expenses 218 238
Content Division cost of sales 70 83
- ------------------------------------------------------------------------------------------------- -------------- ---------------
PRIME COST OF SALES (COST OF SALES BEFORE DEPRECIATION) 416 463
Depreciation of tangible fixed assets (Includes exceptional write down(pound)87m in 2002) 577 445
- ------------------------------------------------------------------------------------------------- -------------- ---------------
993 908
- ------------------------------------------------------------------------------------------------- -------------- ---------------
ADMINISTRATION EXPENSES
Selling, general and administrative expenses (Includes exceptional items(pound)22m in 2002) 521 491
Amortisation of goodwill and intangible assets (Includes exceptional impairment 2002:(
pound)1,486m 2001:(pound)992m) 1,605 1,173
- ------------------------------------------------------------------------------------------------- -------------- ---------------
2,126 1,664
- ------------------------------------------------------------------------------------------------- -------------- ---------------
TOTAL OPERATING COSTS (Includes exceptional items(pound)1,595m in 2002 and(pound)992m in 2001) 3,119 2,572
- ------------------------------------------------------------------------------------------------- -------------- ---------------
3 INTEREST RECEIVABLE AND SIMILAR INCOME
Interest receivable 19 15
Exchange gains on foreign currency translation 290 -
- ------------------------------------------------------------------------------------------------- -------------- ---------------
TOTAL INTEREST RECEIVABLE AND SIMILAR INCOME 309 15
- ------------------------------------------------------------------------------------------------- -------------- ---------------
4 INTEREST PAYABLE AND SIMILAR CHARGES
Share of interest of associated undertakings and joint ventures 9 11
On bank loans 135 105
Finance costs of Notes and Debentures 325 329
Finance charges payable in respect of finance leases and hire purchase contracts 17 19
Exchange losses on foreign currency translation 74 15
Other (Includes exceptional items(pound)31m in 2002) 43 15
- ------------------------------------------------------------------------------------------------- -------------- ---------------
TOTAL INTEREST PAYABLE AND SIMILAR CHARGES (Includes exceptional items(pound)31m in 2002) 603 494
- ------------------------------------------------------------------------------------------------- -------------- ---------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
NOTES TO THE SUMMARISED AUDITED CONSOLIDATED ACCOUNTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER
- --------------------------------------------------------------------------------
5 EXCEPTIONAL ITEMS
The Group continued to review the carrying value of goodwill arising on its
acquisitions of subsidiaries, joint ventures and associated undertakings and of
its network assets in compliance with FRS 10 and FRS 11. The review resulted in
non-cash exceptional adjustments of (pound)1,643 million, being (pound)1,486
million in respect of goodwill impairment of investments in subsidiaries,
(pound)87 million of impairment in respect of certain cable assets and (pound)70
million in respect of goodwill impairment in respect of joint ventures.
The Group has provided (pound)16 million against turnover as a result of a VAT &
Duties Tribunal judgement in a dispute over the VAT status of our cable TV
listings magazines. Previously this was disclosed as a contingent liability. The
amount arises from VAT payable in the period from January 2000 to July 2002. The
Company has appealed against this ruling. An exceptional amount of (pound)2
million has also been provided for interest on the amount in dispute.
Additionally shown as exceptional items are (pound)22 million of legal and
professional costs incurred during 2002 relating to the Financial Restructuring
of our balance sheet and (pound)29 million of bank facility fees written off
within interest payable which were being carried forward over the lifetime of
our Senior Secured Facility that is being re-negotiated as part of the Financial
Restructuring.
During 2002 the Group sold its investment in subsidiary undertakings The Way
Ahead Group Limited and Maidstone Studios and in its associate undertakings TV
Travel Group Limited and SMG plc making an aggregate gain on the disposals of
(pound)36 million.
- ------------------------------------------------------------------------------------------- ------------- --------------
2002 2001
(POUND)M (POUND)M
- ------------------------------------------------------------------------------------------- ------------- --------------
6 RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Group operating loss (1,852) (1,312)
Depreciation of tangible fixed assets 490 445
Exceptional impairment of tangible fixed assets 87 -
Amortisation of goodwill and intangible assets 119 181
Exceptional impairment of goodwill 1,486 992
Decrease in stocks and programming inventory 7 2
Decrease in debtors 24 23
Increase in creditors 30 17
- ------------------------------------------------------------------------------------------- ------------- --------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 391 348
- ------------------------------------------------------------------------------------------- ------------- --------------
7 NET DEBT
Net debt, other than short-term creditors and accruals
- ------------------------------------------------------------------------------------------- ------------- --------------
Convertible Notes 890 904
Other Notes and Debentures 2,529 2,598
Bank facility 2,000 1,324
Other loans 9 45
Vendor financing and obligations under finance leases and hire
purchase contracts 231 261
- ------------------------------------------------------------------------------------------- ------------- --------------
TOTAL DEBT 5,659 5,132
Less cash at bank and in hand (390) (14)
- ------------------------------------------------------------------------------------------- ------------- --------------
NET DEBT (before restricted cash deposits) 5,269 5,118
- ------------------------------------------------------------------------------------------- ------------- --------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
SUMMARISED UNAUDITED QUARTERLY CONSOLIDATED PROFIT AND LOSS ACCOUNTS
FOR THE QUARTERS ENDED
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
31 DEC 30 SEPT 30 JUN 31 MAR 31 DEC
2002 2002 2002 2002 2001
(POUND)M (POUND)M (POUND)M (POUND)M (POUND)M
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TURNOVER
Consumer Division:
Cable television 81 82 88 85 86
Telephony 122 122 125 126 126
Internet and other (before Q4 exceptional item of(pound)16m) 23 22 18 16 14
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
226 226 231 227 226
Business Division 68 68 67 64 71
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL CABLE DIVISION 294 294 298 291 297
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Content Division
Programming, transactional and interactive 27 27 26 26 36
revenues
Share of joint ventures' turnover (UKTV) 16 15 16 17 17
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL CONTENT DIVISION 43 42 42 43 53
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL TURNOVER (NOTE 1) 337 336 340 334 350
Less: share of joint ventures' turnover (16) (15) (16) (17) (17)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
GROUP TURNOVER 321 321 324 317 333
TOTAL OPERATING COSTS before exceptional items (375) (382) (389) (378) (402)
EXCEPTIONAL ITEMS (NOTE 2) (1,611) - - - (992)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
GROUP OPERATING LOSS after exceptional items (1,665) (61) (65) (61) (1,061)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Group Turnover before exceptional VAT adjustment 321 321 324 317 333
Operating expenses before exceptional items, depreciation and
amortisation (223) (227) (234) (231) (240)
------------ ------------ ------------ ------------ ------------
EBITDA before exceptional items 98 94 90 86 93
Exceptional items (VAT adjustment and restructuring costs) (38) - - - -
------------ ------------ ------------ ------------ ------------
EBITDA after exceptional items 60 94 90 86 93
Depreciation and amortisation (152) (155) (155) (147) (162)
Exceptional item - impairment of tangible assets (87) - - - -
Exceptional item- impairment of goodwill (1,486) - - - (992)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Group operating loss after exceptional items (1,665) (61) (65) (61) (1,061)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
LOSS FOR THE FINANCIAL PERIOD (1,821) (158) (73) (166) (1,338)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
LOSS PER ORDINARY SHARE (pence) (63.3) (5.6) (2.5) (5.8) (46.5)
- --------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Note 1 - Total turnover is stated before the Q4 exceptional item of(pound)16m
Note 2 - Exceptional items of (pound)1,611m comprised (pound)1,595m charged to
operating costs and (pound)16m charged to turnover
TELEWEST COMMUNICATIONS PLC
UK GAAP
SUMMARISED UNAUDITED QUARTERLY CONSOLIDATED ACCOUNTS
FOR THE QUARTERS ENDED
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
31 DEC 30 SEPT 30 JUNE 31 MAR 31 DEC
2002 2002 2002 2002 2001
(POUND)M (POUND)M (POUND)M (POUND)M (POUND)M
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL OPERATING COSTS
COST OF SALES:
Consumer programming expenses 32 31 32 33 33
Business and consumer telephony expenses 53 52 58 55 59
Content Division cost of sales 22 17 15 16 26
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
PRIME COST OF SALES (COST OF SALES BEFORE DEPRECIATION) 107 100 105 104 118
Depreciation of tangible fixed assets 123 125 125 117 117
Exceptional write down of tangible fixed assets 87 - - - -
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
317 225 230 221 235
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
ADMINISTRATION EXPENSES:
Selling, general and administrative expenses 116 127 129 127 122
Exceptional selling, general and administrative expenses 22 - - - -
Amortisation of goodwill and intangible assets 29 30 30 30 45
Exceptional item - impairment of goodwill 1,486 - - - 992
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
1,653 157 159 157 1,159
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL OPERATING COSTS 1,970 382 389 378 1,394
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
INTEREST PAYABLE AND SIMILAR CHARGES
Share of interest of associated 2 1 2 4 3
undertakings and joint ventures
On bank loans 38 36 32 29 33
Finance costs of Notes and Debentures 72 84 85 84 83
Finance charges payable in respect of 4 4 6 3 8
finance leases and hire purchase contracts
Exchange losses on foreign currency translation (13) (6) 22 71 9
Other 1 5 3 3 1
Exceptional items 31 - - - -
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL INTEREST PAYABLE AND SIMILAR CHARGES 135 124 150 194 137
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
INTEREST RECEIVABLE AND SIMILAR INCOME
Interest receivable 6 5 5 3 3
Exchange gains on foreign currency translation 46 58 104 82 -
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL INTEREST RECEIVABLE AND SIMILAR INCOME 52 63 109 85 3
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
NET DEBT
Net debt, other than short-term creditors and accruals
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Convertible Notes 890 893 897 916 904
Other Notes and Debentures 2,529 2,560 2,657 2,678 2,598
Bank facility 2,000 1,969 1,807 1,455 1,324
Other loans 9 35 42 43 45
Vendor financing and obligations under finance 231 221 246 277 261
leases and hire purchase contracts
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL DEBT 5,659 5,678 5,649 5,369 5,132
Less cash at bank and in hand (392) (351) (341) (91) (14)
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
NET DEBT 5,267 5,327 5,308 5,278 5,118
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TELEWEST COMMUNICATIONS PLC
US GAAP
SUMMARISED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEAR ENDED 31 DECEMBER
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
3 MONTHS 3 MONTHS 3 MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
31 DEC 31 DEC 31 DEC 31 DEC 31 DEC 31 DEC
2002 2002 2001 2002 2002 2001
$M (POUND)M (POUND)M $M (POUND)M (POUND)M
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
REVENUE
Cable television 132 82 86 541 336 329
Consumer telephony 196 122 126 797 495 488
Internet and other 10 6 14 101 63 40
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
TOTAL CONSUMER DIVISION 338 210 226 1,439 894 857
Business Services Division 113 70 66 455 283 268
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
TOTAL CABLE DIVISION 451 280 292 1,894 1,177 1,125
Content Division 43 27 37 171 106 129
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
TOTAL REVENUE 494 307 329 2,065 1,283 1,254
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
OPERATING COSTS AND EXPENSES
Consumer programming expenses (52) (32) (32) (206) (128) (142)
Business and consumer telephony expenses (85) (53) (57) (351) (218) (235)
Content expenses (35) (22) (26) (113) (70) (83)
Depreciation (199) (123) (123) (797) (495) (469)
Impairment of fixed assets (1,353) (841) - (1,353) (841) -
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
Cost of sales (1,724) (1,071) (238) (2,820) (1,752) (929)
Selling, general and administrative expenses (225) (140) (123) (846) (526) (497)
Amortisation of goodwill - - (46) - - (183)
Impairment of goodwill (2,326) (1,445) (766) (2,326) (1,445) (766)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
(4,275) (2,656) (1,173) (5,992) (3,723) (2,375)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
OPERATING LOSS (3,781) (2,349) (844) (3,927) (2,440) (1,121)
OTHER INCOME/(EXPENSE)
Interest income 10 6 3 30 19 15
Interest expense (190) (118) (127) (829) (515) (487)
Foreign exchange gains/(losses), net 96 60 (7) 343 213 -
Share of net losses of affiliates and impairment (182) (113) (215) (190) (118) (216)
Minority interest in losses of consolidated
subsidiaries, net 2 1 1 2 1 1
Other, net 52 32 4 58 36 (3)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
LOSS BEFORE INCOME TAXES (3,993) (2,481) (1,185) (4,513) (2,804) (1,811)
Income tax benefit 37 23 63 45 28 70
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
NET LOSS (3,956) (2,458) (1,122) (4,468) (2,776) (1,741)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
Basic and diluted loss per ordinary share $(1.38) (pound)(0.86) (pound)(0.38) $(1.56) (pound)(0.97) (pound)(0.60)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
Operating loss (3,781) (2,349) (844) (3,927) (2,440) (1,121)
Add: depreciation, amortisation and impairment
of goodwill and fixed assets 3,878 2,409 935 4,476 2,781 1,418
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
EBITDA (AFTER NON-CASH SHARE-BASED COMPENSATION 97 60 91 549 341 297
(CREDIT)/COST)
Add back: non-cash share-based compensation
(credit)/cost - - - (2) (1) 1
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
EBITDA (BEFORE NON-CASH SHARE-BASED COMPENSATION 97 60 91 547 340 298
(CREDIT)/COST)
- ------------------------------------------------- ---------- -------------- -------------- --------- -------------- ---------------
The consolidated financial information as set out on pages 17 to 19, which is
unaudited, has been prepared on the basis of the accounting policies set out in
Telewest's 2001 Annual Report, other than where changes are necessary to
implement new accounting standards.
The economic environment in which the Company operates is the United Kingdom and
hence its reporting currency is Pounds Sterling ("(pound)"). Merely for
convenience, the financial statements contain translation of certain Pounds
Sterling amounts into US Dollars ("$") at $1.6095 per (pound)1.00, the noon
buying rate of the Federal Reserve Bank of New York on 31 December 2002. The
presentation of the US Dollar amounts should not be construed as a
representation that the Pounds Sterling amounts could be so converted into US
Dollars at the rate indicated or at any other rate.
TELEWEST COMMUNICATIONS PLC
US GAAP
SUMMARISED UNAUDITED CONSOLIDATED BALANCE SHEETS
AS AT 31 DECEMBER
2002 2002 2001
$M (POUND)M (POUND)M
- -------------------------------------------------------------- --------------- -------------- ------------
ASSETS
Cash and cash equivalents 628 390 14
Secured cash deposits restricted for more than one year 19 12 20
Receivables and prepaid expenses 346 215 261
- -------------------------------------------------------------- --------------- -------------- ------------
Total current assets 993 617 295
Investments 605 376 547
Property and equipment 4,182 2,598 3,473
Goodwill and other intangibles 719 447 1,892
Inventory 45 28 67
Other assets 65 40 58
- -------------------------------------------------------------- --------------- -------------- ------------
TOTAL ASSETS 6,609 4,106 6,332
- -------------------------------------------------------------- --------------- -------------- ------------
LIABILITIES
Debt 8,772 5,450 4,897
Other liabilities 1,658 1,030 984
- -------------------------------------------------------------- --------------- -------------- ------------
TOTAL LIABILITIES 10,430 6,480 5,881
MINORITY INTERESTS (2) (1) -
SHAREHOLDERS' (DEFICIT)/EQUITY (3,819) (2,373) 451
- -------------------------------------------------------------- --------------- -------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,609 4,106 6,332
- -------------------------------------------------------------- --------------- -------------- ------------
TELEWEST COMMUNICATIONS PLC
US GAAP
SUMMARISED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
2002 2002 2001
$M (POUND)M (POUND)M
- ----------------------------------------------------------------------------------------- ----------- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (4,468) (2,776) (1,741)
Adjustments to reconcile net loss to net cash provided by/(used in) operating
activities:
Depreciation 797 495 469
Impairment of fixed assets 1,353 841 -
Amortisation and impairment of goodwill 2,326 1,445 949
Amortisation of deferred financing costs and issue discount on Senior Discount Debentures 166 103 99
Deferred tax credit (45) (28) (70)
Unrealised gain on foreign currency translation (343) (213) (10)
Non-cash accrued share-based compensation (credit)/cost (2) (1) 1
Share of net (gains)/losses of affiliates and impairment (16) (10) 216
Loss on disposal of assets 148 92 4
Minority interest in losses of consolidated subsidiaries - - (1)
Changes in operating assets and liabilities, net of effect of acquisition of
subsidiaries:
Change in receivables 31 19 25
Change in prepaid expenses 10 6 6
Change in other assets 24 15 1
Change in accounts payable 27 17 3
Change in other liabilities 157 98 62
- ----------------------------------------------------------------------------------------- ----------- -------------- --------------
NET CASH PROVIDED BY/(USED) IN OPERATING ACTIVITIES 165 103 13
NET CASH USED IN INVESTING ACTIVITIES (587) (365) (561)
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,027 638 502
- ----------------------------------------------------------------------------------------- ----------- -------------- --------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 605 376 (46)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23 14 60
- ----------------------------------------------------------------------------------------- ----------- -------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 628 390 14
- ----------------------------------------------------------------------------------------- ----------- -------------- --------------