EXHIBIT 99
Telewest Communications plc Press Release issued on October 30, 1997 with
respect to results of operations for the nine month period ended September 30,
1997 (including unaudited consolidated financial statements prepared in
accordance with UK GAAP).
FOR IMMEDIATE RELEASE 30 OCTOBER 1997
TELEWEST COMMUNICATIONS PLC
3RD QUARTER RESULTS 1997
HIGHLIGHTS
OVER 1 MILLION CUSTOMERS
CORPORATE RESTRUCTURING SUBSTANTIALLY COMPLETE
SUCCESSFUL TRIALS OF NEW PACKAGES
BBC/FLEXTECH DEAL ANNOUNCED
PPV MOVIE DEALS ANNOUNCED
EBITDA (POUND)32.2M - TWICE THE HALF YEAR TOTAL
NATIONAL INTERFRANCHISE NETWORK NEARS COMPLETION
% CHANGE SINCE SEPT. `96
2.90M HOMES PASSED + 20.8%
34.2% HOUSEHOLD PENETRATION + 1.7% POINTS
582,965 CABLE TELEVISION (CATV) CUSTOMERS + 27.1%
764,306 RESIDENTIAL TELEPHONY (RESTEL) CUSTOMERS + 38.4%
93,350 BUSINESS LINES + 56.3%
CATV 22.0% CATV PENETRATION + 0.8% POINTS
32.1% CATV CHURN - 4.1% POINTS
(POUND)23.18 AVERAGE REVENUE PER CATV CUSTOMER + 2.2%
RESTEL 29.3% RESTEL PENETRATION + 2.5% POINTS
19.4% RESTEL CHURN - 0.6% POINTS
(POUND)19.26 AVERAGE REVENUE PER LINE - 6.3%
BUSTEL 93,350 BUSINESS LINES + 56.3%
3.9 AVERAGE NUMBER OF LINES PER CUSTOMER + 25.8%
(POUND)45.31 AVERAGE REVENUE PER LINE - 15.8%
(POUND)159.69 AVERAGE REVENUE PER CUSTOMER - 0.2%
TELEWEST TODAY ANNOUNCED ITS 3RD QUARTER RESULTS.
COMMENTING ON THE RESULTS, STEPHEN DAVIDSON, CHIEF EXECUTIVE OF TELEWEST, SAID:
"THE RESULTS CONTINUE TO SHOW IMPROVED PERFORMANCE. WITH 146,386 NET NEW
CUSTOMERS ADDED DURING THE NINE MONTH PERIOD, TELEWEST HAS NOW PASSED THE
MILESTONE OF OVER 1 MILLION CUSTOMERS, AND CUMULATIVE EBITDA REACHED
(POUND)32.2M, NEARLY DOUBLE THE HALF YEAR TOTAL OF (POUND)16.4M.
"THE RESTRUCTURING PROGRAMME ANNOUNCED IN AUGUST HAS PROGRESSED ACCORDING TO
PLAN. THE PACE OF CONSTRUCTION OF NEW NETWORK, NOW 72.5% COMPLETE, WILL BE
REDUCED TO APPROXIMATELY 5,000 HOMES PER MONTH BY DECEMBER AND OUR FRANCHISES
ARE NOW MANAGED FROM FOUR, INSTEAD OF SEVEN, REGIONAL CENTRES. FOLLOWING THE
COMPLETION OF STATUTORY CONSULTATION WITH EMPLOYEES, NEXT MONTH, THE COMPANY'S
WORKFORCE WILL HAVE BEEN REDUCED BY AROUND 25%. THE FULL YEAR CASH SAVINGS OF
SOME (POUND)40M, WHICH THE RESTRUCTURING WILL PRODUCE, WILL START FLOWING
THROUGH FROM THIS POINT. THE (POUND)2M COSTS OF THE REDUNDANCY PROGRAMME HAVE
BEEN TAKEN IN THE THIRD QUARTER.
"THE RESTRUCTURING ENABLES US TO FOCUS ON RETENTION, ADDING INCREMENTAL
CUSTOMERS TO OUR NETWORKS AND INCREASING THE NUMBER OF SERVICES TO WHICH THEY
SUBSCRIBE.
"THE SUCCESS OF OUR PACKAGING TRIALS IN DUMBARTON (CUSTOMERS ARE GIVEN THE
OPTION TO PURCHASE A SMALLER SELECTION OF TELEVISION CHANNELS, WITH A
RESIDENTIAL TELEPHONE LINE, AT A REDUCED SUBSCRIPTION) HAS BEEN CONFIRMED BY
SIMILAR TESTS IN NEWCASTLE, WHERE MORE NEW CUSTOMERS WERE ADDED IN THE FIRST TWO
MONTHS OF THE TRIAL THAN IN THE FIRST SEVEN MONTHS OF THE YEAR.
"WE ARE CONVINCED THAT FREEDOM OF CHOICE, COUPLED WITH VALUE FOR MONEY, WHICH
OUR MINI BASIC PACKAGE, COMBINED TELEVISION AND TELEPHONY PACKAGES OFFER, IS THE
WAY TO OPEN UP THE CABLE MARKET. WE INTEND TO ROLL-OUT THESE PACKAGES AND PRESS
FOR FLEXIBLE, QUALITY PROGRAMMING AS FAR AND AS RAPIDLY AS WE ARE ABLE.
"THE PERIOD SAW TWO MAJOR DEVELOPMENTS IN PROGRAMMING, THE FIRST OF WHICH WAS
THE INTRODUCTION OF THE THREE BBC/FLEXTECH CHANNELS TOGETHER WITH BBC NEWS 24.
THESE QUALITY CHANNELS WILL BE LAUNCHED IN NOVEMBER AND ARE EXPECTED TO BE
SOLELY AVAILABLE ON CABLE IN 1997. SECONDLY, ON 20 OCTOBER, TELEWEST TOGETHER
WITH THREE OTHER CABLE OPERATORS ANNOUNCED THE FORMATION OF A JOINT VENTURE TO
LAUNCH PAY-PER-VIEW SERVICES. AGREEMENTS ARE ALREADY IN PLACE WITH TWO MAJOR
HOLLYWOOD STUDIOS FOR THE SUPPLY OF CONTENT.
"THESE ANALOGUE DEVELOPMENTS SHOULD BE SEEN ALONGSIDE THE INTRODUCTION OF
DIGITAL SERVICES, THE WIDENING OF PROGRAMMING FROM ALTERNATIVE SUPPLIERS AND THE
FUTURE DEVELOPMENT OF INTERACTIVE SERVICES, ALL OF WHICH WILL INCREASE FREEDOM
OF CHOICE AND DEEPEN THE CUSTOMER APPEAL OF CABLE WITH ITS BROADBAND
CAPABILITIES.
"TELEWEST'S INTERFRANCHISE NATIONAL FIBRE NETWORK WILL BE SUBSTANTIALLY
COMPLETED BY THE END OF THE YEAR AND WILL BE FULLY OPERATIONAL IN 1998. AS WELL
AS POSITIONING US TO PROVIDE DIGITAL CABLE SERVICES, THIS WILL ALLOW US TO
IMPROVE FURTHER THE ATTRACTIVENESS AND MARGINS OF OUR TELEPHONY BUSINESS AND TO
COMPETE EFFECTIVELY IN THE RAPIDLY GROWING MARKET FOR HIGH SPEED, ADVANCED DATA
SERVICES."
2
COMMENTING ON THE RESULTS, CHARLES BURDICK, GROUP FINANCE DIRECTOR, SAID;
"THE COMPANY CONTINUES TO ACHIEVE SIGNIFICANT YEAR ON YEAR GROWTH. TURNOVER HAS
INCREASED BY 36.3% TO (POUND)282M WITH ALL REVENUE STREAMS CONTRIBUTING TO THE
GROWTH. WE NOW HAVE 1,032,377 CUSTOMERS SERVICED BY OUR OWNED AND OPERATED AND
AFFILIATED FRANCHISES. BOTH RESIDENTIAL TELEPHONY AND CABLE TELEVISION
PENETRATION HAVE IMPROVED FROM 26.8% TO 29.3% AND FROM 21.2% TO 22.0%
RESPECTIVELY. TOTAL BUSINESS TELEPHONY LINES INCREASED BY 56% TO 93,350.
"TELEPHONY MARGINS INCREASED 7.3% TO 75.4% AND ALTHOUGH CATV MARGINS AT 40.7%,
ARE LOWER THAN AT THIS TIME LAST YEAR, THEY SHOW AN IMPROVEMENT ON THE PREVIOUS
QUARTER. WE CONTINUE TO BENEFIT FROM FALLING TELEPHONY INTERCONNECT RATES AND
ARE NOW SEEING THE RESULTS OF OUR RENEGOTIATED BASIC PROGRAMMING COSTS ANNOUNCED
PREVIOUSLY. EBITDA OF (POUND)32.2M HAS BEEN ACHIEVED THROUGH GROWTH IN CUSTOMER
NUMBERS AND CONTINUED EMPHASIS ON THE CONTROL OF OPERATING COSTS.
"OVER THE LAST NINE MONTHS WE INCURRED (POUND)341M OF CAPITAL EXPENDITURE. BOTH
OPERATING AND CAPITAL EXPENDITURE REQUIREMENTS WILL REDUCE SUBSTANTIALLY IN 1998
AS A RESULT OF THE ACTION TAKEN TO REDUCE THE GROUP'S COST BASE THIS YEAR AND
OUR DECISION TO REDUCE THE PACE OF THE NETWORK BUILD PROGRAMME."
NOTE:
THE FOLLOWING IS INCLUDED IN CONNECTION WITH LEGISLATION IN THE UNITED STATES OF
AMERICA, THE SAFE HARBOUR 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 1996 ANNUAL REPORT.
Enquiries to: TELEWEST COMMUNICATIONS PLC
Stephen Davidson, Chief Executive
Tel: 01483 750 900
Charles Burdick, Group Director of Finance
Tel: 01483 750 900
and at :
Dewe Rogerson (2.00pm - 6.00pm)
0171 638 9571
3
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated on an equity basis
3rd Quarter 1997 Net Additions
NET ADDITIONS NET ADDITIONS NET ADDITIONS NET ADDITIONS
Q3 FIRST NINE Q3 FIRST NINE MONTHS
1997 MONTHS 1996 1996
1997
------------------ ----------------- ------------------- --------------------
CABLE TELEVISION
Homes marketed 103,587 310,626 142,653 332,818
CATV customers 23,002 54,823 32,495 57,036
RESIDENTIAL TELEPHONY
Homes marketed 112,646 354,666 173,624 408,306
Residential telephony customers 43,798 143,929 53,428 122,669
Residential telephony lines 48,872 158,040 55,704 126,566
BUSINESS TELEPHONY
Business telephony customers 1,048 3,339 1,632 4,772
Business telephony lines 10,749 25,527 7,834 19,685
AS AT 30 SEPT AS AT 30 SEPT
1997 1996
-------------- --------------
CABLE TELEVISION
Homes marketed 2,646,579 2,164,276
CATV customers 582,965 458,505
CATV penetration 22.0% 21.2%
Quarterly churn rate (annualised) 34.0% 35.6%
Rolling 12 month churn rate 32.1% 36.2%
RESIDENTIAL TELEPHONY
Homes marketed 2,609,400 2,060,910
Residential telephony customers 764,306 552,074
Residential telephony penetration 29.3% 26.8%
Residential telephony lines 785,049 557,482
Quarterly churn rate per line
(annualised) 20.6% 19.1%
Rolling 12 month churn rate 19.4% 20.0%
BUSINESS TELEPHONY
Business telephony customers 24,221 18,997
Business telephony lines 93,350 59,706
Average number of lines per customer 3.9 3.1
Quarterly churn rate per line
(annualised) 16.5% 14.4%
Rolling 12 month churn rate 16.2% 13.5%
Cable television and residential
telephony customers 449,362 323,282
Cable television only customers 133,603 135,223
Residential telephony only customers 314,944 228,792
4
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated and affiliated franchises
* On an equity basis
3rd Quarter 1997 Net Additions
NET ADDITIONS NET ADDITIONS NET ADDITIONS NET ADDITIONS
Q3 YEAR TO DATE Q3 YEAR TO DATE 1996
1997 1997 1996
----------------- ----------------- ------------------ -------------------
CABLE TELEVISION
Homes marketed 118,021 351,671 165,026 374,164
CATV customers 25,069 61,923 35,924 65,531
RESIDENTIAL TELEPHONY
Homes marketed 127,044 395,834 196,774 451,999
Residential telephony customers 69,663 179,310 57,228 134,243
Residential telephony lines 74,137 193,267 59,648 138,486
BUSINESS TELEPHONY
Business telephony customers 1,152 3,660 1,819 5,251
Business telephony lines 11,984 28,519 8,601 22,022
AS AT 30 SEPT AS AT 30 SEPT
1997 1996
--------------- --------------
CABLE TELEVISION
Homes marketed 2,977,900 2,440,819
CATV customers 661,522 523,003
RESIDENTIAL TELEPHONY
Homes marketed 2,938,269 2,334,558
Residential telephony customers 865,411 611,898
Residential telephony lines 886,788 617,951
BUSINESS TELEPHONY
Business telephony customers 26,958 21,237
Business telephony lines 107,088 69,540
Average number of lines per customer 4.0 3.3
Note:
* The affiliated franchises include Telewest's interests in Cable London plc
(50.0% interest, 1996 49.0% interest), Birmingham Cable Corporation (27.5%
interest) and The Cable Corporation (16.5% interest).
5
TELEWEST COMMUNICATIONS PLC
Owned and Operated Franchises
As at 30 September 1997
London South South West North East Scotland South East North West Midlands Total
------------ ----------- ----------- --------- ------------- ----------- --------- ----------
CABLE TELEVISION
Homes marketed 363,294 370,194 205,243 499,536 222,985 565,529 419,798 2,646,579
CATV customers 81,569 75,290 42,558 108,701 58,114 125,090 91,643 582,965
CATV penetration 22.5% 20.3% 20.7% 21.8% 26.1% 22.1% 21.8% 22.0%
RESIDENTIAL TELEPHONY
Homes marketed 355,225 370,267 201,993 474,498 222,998 564,621 419,798 2,609,400
Residential telephony customers 71,990 107,576 63,197 134,396 71,963 171,958 143,226 764,306
Residential telephony penetration 20.3% 29.1% 31.3% 28.3% 32.3% 30.5% 34.1% 29.3%
Residential telephony lines 75,994 111,716 64,092 138,783 74,113 176,083 144,268 785,049
BUSINESS TELEPHONY
Business telephony customers 4,538 4,834 1,576 3,971 1,346 4,895 3,061 24,221
Business telephony lines 21,672 18,982 3,628 11,985 5,643 16,835 14,605 93,350
Average number of lines per
customer 4.8 3.9 2.3 3.0 4.2 3.4 4.8 3.9
6
TELEWEST COMMUNICATIONS PLC
UK GAAP
UNAUDITED SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE NINE MONTHS
ENDED 30 SEPTEMBER 1997
Note 9 MONTHS 9 months Year
ENDED ended ended
30 SEPT 30 Sept 31 December
1997 1996 1996
(POUND)000 (pound)000 (pound)000
TURNOVER
Cable television 116,397 86,133 121,224
Telephony - residential 122,520 90,177 125,013
Telephony - business 32,069 23,796 34,562
Other (Internet, Ad Sales etc) 10,540 6,497 9,467
================ ================ =================
281,526 206,603 290,266
================ ================ =================
OPERATING LOSS (94,776) (89,663) (129,251)
Share of results of associated undertakings (15,922) (11,449) (15,203)
Other interest receivable and similar income 6,966 14,540 17,222
Interest payable and similar charges 3 (121,253) (90,060) (122,671)
---------------- ---------------- -----------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAX (224,985) (176,632) (249,903)
Tax on loss on ordinary activities (165) (150) (820)
---------------- ---------------- -----------------
LOSS ON ORDINARY ACTIVITIES AFTER TAX (225,150) (176,782) (250,723)
Minority interests (334) (116) (180)
================ ================ =================
LOSS FOR THE FINANCIAL PERIOD (225,484) (176,898) (250,903)
================ ================ =================
LOSS PER EQUITY SHARE (15.8) (12.5) (17.7)
================ ================ =================
1 EARNINGS/ (LOSS) BEFORE INTEREST, TAXES,
DEPRECIATION, AND AMORTISATION ("EBITDA")
Operating loss (94,776) (89,663) (129,251)
Add: Depreciation and amortisation 126,975 84,106 129,716
----------------- ---------------- -----------------
EBITDA 32,199 (5,557) 465
================= ================ =================
2 OPERATING COSTS
Programming expenses 69,042 47,182 69,906
Telephony expenses 37,982 36,349 52,572
Selling, general, and administrative expenses 142,303 128,629 167,323
Depreciation and amortisation 126,975 84,106 129,716
----------------- ---------------- -----------------
376,302 296,266 419,517
================= ================ =================
3 INTEREST PAYABLE AND SIMILAR CHARGES
On bank loans and overdrafts and other loans
Wholly repayable within 5 years 14,664 2,025 3,816
Wholly or partly repayable in more than five years 10,607 1,150 1,924
Finance costs of Senior Discount Debentures 52,615 44,564 60,696
Finance costs of Senior Debentures 16,984 16,819 22,471
Finance charges payable in respect of finance
lease and hire purchase contracts 3,643 2,517 3,442
Exchange losses on foreign currency translation,
net 22,740 19,018 25,852
Other - 3,967 4,470
----------------- ---------------- -----------------
121,253 90,060 122,671
================= ================ =================
The consolidated financial statements as set out on pages 7 and 8 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1996 Annual Report. The balance sheet, profit and loss account and
cash flow statement at 31 December 1996 is derived from the statutory accounts
for 1996 which have been delivered to the Registrar of Companies. The auditors
have reported on those accounts: their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.
7
TELEWEST COMMUNICATIONS PLC
UK GAAP
UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 1997
30 SEPT 30 Sept 31 December
1997 1996 1996
(POUND)000 (pound)000 (pound)000
FIXED ASSETS 1,789,836 1,514,986 1,564,604
--------------- ----------------- -------------------
CURRENT ASSETS
Stocks 73 54 53
Debtors 70,961 82,002 66,929
Cash at bank and in hand 25,688 100,161 79,116
--------------- ----------------- -------------------
96,722 182,217 146,098
CREDITORS: amounts falling due within one year (201,716) (181,011) (212,434)
--------------- ----------------- -------------------
NET CURRENT (LIABILITIES)/ASSETS (104,994) 1,206 (66,336)
--------------- ----------------- -------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 1,684,842 1,516,192 1,498,268
CREDITORS: amounts falling due after more than one year (1,330,742) (860,113) (918,008)
Minority interests (681) (283) (347)
=============== ================= ===================
CAPITAL AND RESERVES 353,419 655,796 579,913
=============== ================= ===================
UNAUDITED SUMMARISED CONSOLIDATED CASH FLOW STATEMENT FOR THE NINE MONTHS ENDED
30 SEPTEMBER 1997
9 MONTHS 9 months
ENDED ended Year ended
30 SEPT 30 Sept 31 December
1997 1996 1996
(POUND)000 (pound)000 (pound)000
OPERATING LOSS (94,776) (89,663) (129,251)
Depreciation and amortisation 126,975 84,106 129,716
Increase in stocks (20) (14) (13)
Increase in debtors (2,952) (13,937) (16,493)
Increase/(decrease) in creditors (11,075) (2,970) 44,520
--------------- ----------------- -------------------
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 18,152 (22,478) 28,479
Returns on investments and servicing of finance (34,788) 1,468 (10,343)
Capital expenditure and financial investment (326,146) (302,857) (461,308)
Acquisitions and disposals (9,113) (20,283) (21,895)
Management of liquid resources 58,201 357,766 376,808
Financing 298,529 (20,795) 79,003
=============== ================= ===================
INCREASE/(DECREASE) IN CASH 4,835 (7,179) (9,256)
=============== ================= ===================
8
TELEWEST COMMUNICATIONS PLC
US GAAP
Unaudited summarised consolidated statements of operations
3 months 3 MONTHS 3 months 9 months 9 MONTHS 9 months
ended ENDED ended ended ENDED ended
30 Sept 30 SEPT 30 Sept 30 Sept 30 SEPT 30 Sept
1997 1997 1996 1997 1997 1996
$000 (POUND)000 (pound)000 $000 (POUND)000 (pound)000
REVENUE
Cable television 63,746 39,552 29,261 187,597 116,397 86,133
Telephony - residential 71,996 44,671 32,853 197,465 122,520 90,177
Telephony - business 19,611 12,168 8,564 51,686 32,069 23,796
Other 5,952 3,693 2,445 16,987 10,540 6,497
----------- ----------- ------------ ----------- ------------- ------------
161,305 100,084 73,123 453,735 281,526 206,603
=========== =========== ============ =========== ============= ============
OPERATING LOSS (66,715) (41,394) (34,512) (184,671) (114,581) (109,305)
Interest income 3,433 2,130 2,918 10,057 6,240 14,400
Interest expense (60,403) (37,478) (26,035) (162,318) (100,712) (78,307)
Foreign exchange losses, net (13,728) (8,518) (7,575) (52,891) (32,817) (55,243)
Share of losses of
affiliates (9,024) (5,599) (3,958) (25,661) (15,922) (11,449)
Minority interest in
profits of consolidated
subsidiaries, net (200) (124) (62) (538) (334) (116)
Other, net 408 253 (18) 1,170 726 140
----------- ----------- ------------ ----------- ------------- ------------
LOSS BEFORE INCOME TAXES (146,229) (90,730) (69,242) (414,852) (257,400) (239,880)
Income tax expense (81) (50) (61) (266) (165) (150)
=========== =========== ============ =========== ============= =============
NET LOSS (146,310) (90,780) (69,303) (415,118) (257,565) (240,030)
=========== =========== ============ =========== ============= =============
LOSS PER ORDINARY SHARE
(DOLLARS/POUNDS) (0.16) (0.10) (0.07) (0.45) (0.28) (0.26)
=========== =========== ============ =========== ============= =============
1 EARNINGS/(LOSS) BEFORE
INTEREST, TAXES,
DEPRECIATION AND
AMORTISATION ("EBITDA")
Operating loss (66,715) (41,394) (34,512) (184,671) (114,581) (109,305)
Add: depreciation and
amortisation of goodwill 92,221 57,220 36,003 236,566 146,780 103,690
----------- ----------- ------------ ----------- ------------- -------------
EBITDA 25,506 15,826 1,491 51,895 32,199 (5,615)
=========== =========== ============ =========== ============= =============
2 OPERATING COSTS
AND
EXPENSES
Programming (36,128) (22,416) (16,422) (111,275) (69,042) (47,182)
Telephony (16,991) (10,542) (11,032) (61,216) (37,982) (36,349)
Selling, general and
administration (82,680) (51,300) (44,178) (229,349) (142,303) (128,687)
Depreciation (81,579) (50,617) (29,433) (204,646) (126,975) (84,106)
Amortisation of goodwill (10,642) (6,603) (6,570) (31,920) (19,805) (19,584)
----------- ----------- ------------ ----------- ------------- -------------
(228,020) (141,478) (107,635) (638,406) (396,107) (315,908)
=========== =========== ============ =========== ============= =============
The consolidated financial statements as set out on pages 9 and 10 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1996 Annual Report. The balance sheet, profit and loss account and
cash flow statement at 31 December 1996 is derived from the statutory accounts
for 1996 which have been delivered to the Registrar of Companies. The auditors
have reported on those accounts: their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.
The economic environment in which the Company operates is the United Kingdom
("UK") and hence its reporting currency is Pounds Sterling ("(pound)"). Merely
for convenience, the financial statements contain translations of certain Pounds
Sterling amounts into US Dollars at $1.6117 per (pound)1.00, the Noon Buying
Rate of the Federal Reserve Bank of New York on September 30, 1997. 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
Unaudited summarised consolidated balance sheets
30 Sept 30 Sept 31 December
1997 1997 1996
$000 (pound)000 (pound)000
--------------- -- --------------- -- -----------------
ASSETS
Cash and cash equivalents 41,401 25,688 79,116
Receivables and prepaid expenses 114,368 70,961 66,867
Investments 141,740 87,944 95,086
Property and equipment 2,679,435 1,662,490 1,447,194
Goodwill 761,520 472,495 491,290
Other assets 102,709 63,727 62,387
=============== =============== =================
TOTAL ASSETS 3,841,173 2,383,305 2,241,940
=============== =============== =================
LIABILITIES
Debt 2,068,785 1,283,604 879,351
Other liabilities 460,024 285,428 291,445
--------------- --------------- -----------------
TOTAL LIABILITIES 2,528,809 1,569,032 1,170,796
MINORITY INTERESTS 1,098 681 347
SHAREHOLDERS' EQUITY 1,311,266 813,592 1,070,797
=============== =============== =================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,841,173 2,383,305 2,241,940
=============== =============== =================
Unaudited summarised consolidated statements of cash flows
9 months 9 months 9 months
ended ended ended
30 Sept 30 Sept 30 Sept
1997 1997 1996
$000 (pound)000 (pound)000
--------------- -- --------------- -- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (415,118) (257,565) (240,030)
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation 204,646 126,975 84,106
Amortisation of goodwill 31,920 19,805 19,584
Amortisation of deferred financing costs and issue
discount on senior discount debentures 91,685 56,887 56,388
Unrealised loss on foreign currency translation 52,891 32,817 55,243
Share of losses of affiliates 25,661 15,922 11,449
Gain on disposals of assets (1,170) (726) (140)
Minority interests in profits 538 334 116
Changes in operating assets and liabilities
Change in receivables (7,809) (4,845) (14,975)
Change in prepaid expenses 87 54 2,920
Change in accounts payable (10,515) (6,524) (10,783)
Change in other liabilities 372 230 15,112
--------------- --------------- -----------------
NET CASH USED IN OPERATING ACTIVITIES (26,812) (16,636) (21,010)
NET CASH USED IN INVESTING ACTIVITIES (540,337) (335,259) (323,140)
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES 481,139 298,529 (20,795)
--------------- --------------- -----------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (86,010) (53,366) (364,945)
Effect of exchange rate changes on cash and cash equivalents (100) (62) 288
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 127,511 79,116 464,818
=============== =============== =================
CASH AND CASH EQUIVALENTS AT END OF YEAR 41,401 25,688 100,161
=============== =============== =================
10