EXHIBIT 99.1
FOR IMMEDIATE RELEASE 6TH AUGUST 1998
TELEWEST COMMUNICATIONS PLC
INTERIM RESULTS 1998
EBITDA (POUND)54.3M +231.4%
REVENUE (POUND)225.9M +24.5%
CATV MARGIN 46.0% +6.7% POINTS
TELEPHONY MARGIN 75.3% +3.4% POINTS
HOUSEHOLD PENETRATION 34.5% +0.5% POINTS
- ----------------------------- -------------------- ------------------------------ ------------------------------
QUARTER ENDING JUN. 98 JUN. 97 DEC. 97
- ----------------------------- -------------------- ------------------------------ ------------------------------
TELEVISION
Customers 642,303 559,963 (+14.7%) 605,988 (+6.0%)
Penetration 22.8% 22.0% (+0.8% points) 22.0% (+0.8% points)
Churn 33.7% 32.2% (+1.5% points) 34.0% (-0.3% points)
Av. Rev. per cust (pound)23.40 (pound)23.37 (+0.1%) (pound)23.40 (+0.0%)
RESIDENTIAL TELEPHONY
Customers 853,121 720,508 (+18.4%) 810,358 (+5.3%)
Penetration 30.6% 28.9% (+1.7% points) 29.7% (+0.9% points)
Churn 21.1% 19.2% (+1.9% point) 20.0% (+1.1% points)
Av. Rev. per line (pound)19.22 (pound)19.09 (+0.7%) (pound)19.19 (+0.2%)
BUSINESS TELEPHONY
Lines 116,634 82,601 (+41.2%) 100,989 (+15.5%)
Av. Lines per cust. 4.2 3.6 (+16.7%) 4.0 (+5.0%)
Av. Rev. per line (pound)44.55 (pound)44.67 (-0.3%) (pound)43.62 (+2.1%)
Av. Rev. per cust. (pound)183.70 (pound)152.91 (+20.1%) (pound)158.05 (+16.2%)
INTERNET
Dial-up customers 19,810 8,806 (+125.0%) 16,713 (+18.5%)
- ----------------------------- -------------------- ------------------------------ ------------------------------
TELEWEST TODAY ANNOUNCED ITS INTERIM RESULTS.
Commenting on the results Charles Burdick, Group Finance Director, said:
"I am very pleased with the strong results for the first half of 1998. Total
revenues are almost 25 per cent higher than the corresponding period last year,
while earnings before interest, tax and depreciation (EBITDA) are up by more
than 230 per cent and are already above the full 1997 result.
"Our household penetration has risen to 34.5 per cent; sales of business
telephone lines and revenues per business customer are, respectively, 41 per
cent and 20 per cent higher; and we have further improved the margins of both
telephony and cable television.
"We have reduced selling, general and administrative costs as a proportion of
revenues to 41 per cent, compared to over 50 per cent in 1997. We have also
achieved a 50 per cent reduction in capital expenditure while completing our
national network and continuing to develop our local broadband systems.
"The company ended the second quarter of 1998 with (pound)1.51 billion of debt
split between (pound)0.6bn of Senior Bank debt and (pound)0.91bn of bond debt.
We are fully funded and operating comfortably within our restructured bank
facilities.
"We are currently looking at financing options with regard to the exercise of
our pre-emption rights resulting from the Comcast/NTL merger and the purchase of
Comcast's Birmingham Cable and Cable London shareholdings."
David Van Valkenburg, Chief Executive of Telewest, said:
"The second quarter of 1998 has been an exciting period for Telewest. Our
interim results show we are well placed to sustain our leading position in the
cable market.
"Cable TV and telephony penetration have reached record levels, we have launched
new services for the residential and business markets and we have earned more in
the first six months of this year than we did in the whole of 1997.
These achievements are a credit to everyone at Telewest.
"Our new Millennium packages are growing in popularity and we see evidence that
the wider choices we are offering are what customers want from their pay-TV
service. Penetration in the North East region has grown by 5.5 percentage points
since we introduced the Millennium package a year ago. This indicates the
near-term opportunity to increase penetration throughout our regions as we
re-market all our customer base with Millennium.
"Front Row has exceeded all our expectations. One in five of our customers is
regularly using the service. We have brought forward our plans to expand Front
Row from a four to eight-channel service and to accelerate the introduction of
remote-control ordering facilities in all our franchises.
"While churn in cable TV declined in the second quarter, both TV and telephony
churn are receiving our close attention. There are encouraging signs that we
have tackled the product-related causes of churn. Our efforts are now focused on
bolstering the support systems our people need to serve our customers most
effectively.
"In the business market, volumes continued to rise sharply in terms of
customers, lines per customer, and revenue per customer. In particular we have
been very successful in selling digital products to our business customers.
"The completion of our national network means we are ready to expand our range
of products and services. The network will allow us to design more sophisticated
solutions for corporate customers and be more innovative in our pricing and
packaging of voice and data services. We will also be creating a new business
unit to target the substantial opportunities in the provision of wholesale
services for other operators.
"Looking ahead, we expect to start trials of digital services later this year
and to launch services in 1999. In addition to digital broadcast and
subscription television channels, we will dedicate 40 - 50 channels to near
video on demand services, offer Internet access through the TV and give
consumers access to a wide range of interactive services.
"We will also be launching high speed Internet services in the first half of
1999. Our cable modems will connect users to the Internet at up to 100 times the
speed of a normal telephone line. We are currently exploring joint venture
possibilities with content providers and other cable operators to maximise this
opportunity.
"Finally, on 15th April 1998 we announced that the boards of Telewest and
General Cable PLC had agreed the terms of a proposed merger and that we intend
to exercise our options to acquire the interests held by Comcast UK Cable
Partners Ltd in Birmingham Cable and Cable London (subject to, inter alia, price
and availability of finance). Together these transactions will, when
implemented, create the largest UK cable operator and one better positioned to
capitalise on the excellent progress made to date."
2
NOTES:
ALL REFERENCES TO FINANCIAL INFORMATION ABOVE ARE UK GAAP.
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 1997 ANNUAL REPORT
AND REGISTERED STATEMENTS FILED IN JUNE 1998.
Enquiries to: TELEWEST COMMUNICATIONS PLC
David Van Valkenburg, Chief Executive
Tel: 01483 750900
Charles Burdick, Group Finance Director
Tel: 01483 750900
Stephen Powers, Media Relations Manager
Tel: 01483 295281/0467 392804
and at :
Dewe Rogerson
Anthony Carlisle
0171 638 9571
3
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated on an equity basis
- -----------------------------------------------------------------------------------------------------------------------
2ND QUARTER 1998 NET ADDITIONS
NET ADDITIONS NET ADDITIONS NET ADDITIONS NET ADDITIONS
Q2 1998 YTD 98 Q2 1997 YTD 1997
- -----------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 27,720 62,372 103,615 207,039
CATV CUSTOMERS 24,426 36,315 18,235 31,821
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 29,398 65,070 119,243 242,020
RESIDENTIAL TELEPHONY CUSTOMERS 21,536 42,763 50,931 100,131
RESIDENTIAL TELEPHONY LINES 31,334 59,491 56,282 109,168
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 966 2,023 1,668 2,291
BUSINESS TELEPHONY LINES 6,619 15,645 8,061 14,778
- -----------------------------------------------------------------------------------------------------------------------
AS AT 30 JUNE AS AT 30 JUNE
1998 1997
- -----------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 2,822,556 2,542,992
CATV CUSTOMERS 642,303 559,963
CATV PENETRATION 22.8% 22.0%
QUARTERLY CHURN RATE (ANNUALISED) 28.8% 32.9%
ROLLING 12 MONTH CHURN RATE 33.7% 32.2%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 2,790,224 2,496,754
RESIDENTIAL TELEPHONY CUSTOMERS 853,121 720,508
RESIDENTIAL TELEPHONY PENETRATION 30.6% 28.9%
RESIDENTIAL TELEPHONY LINES 895,659 736,177
QUARTERLY CHURN RATE PER LINE (ANNUALISED)
21.7% 19.1%
ROLLING 12 MONTH CHURN RATE 21.1% 19.2%
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 27,498 23,173
BUSINESS TELEPHONY LINES 116,634 82,601
AVERAGE NUMBER OF LINES PER CUSTOMER 4.2 3.6
INTERNET
- --------
DIAL-UP CUSTOMERS 19,810 8,806
CABLE TELEVISION AND RESIDENTIAL TELEPHONY
CUSTOMERS 528,614 422,484
CABLE TELEVISION ONLY CUSTOMERS 113,689 137,479
RESIDENTIAL TELEPHONY ONLY CUSTOMERS 324,507 298,024
INTERNET ONLY CUSTOMERS 1,825 2,454
TOTAL CUSTOMERS 968,635 860,441
- -----------------------------------------------------------------------------------------------------------------------
4
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated and affiliated franchises
* On an equity basis
- ---------------------------------------------------------------------------------------------------------------------
2ND QUARTER NET ADDITIONS
NET ADDITIONS NET ADDITIONS NET ADDITIONS NET ADDITIONS
Q2 1998 YTD 1998 Q2 1997 YTD 1997
- ---------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 30,355 66,041 114,776 233,044
CATV CUSTOMERS 24,880 38,127 19,445 36,854
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 32,102 68,452 130,503 268,184
RESIDENTIAL TELEPHONY CUSTOMERS 23,527 48,318 55,835 109,647
RESIDENTIAL TELEPHONY LINES 33,795 66,006 61,423 119,129
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 1,192 2,381 1,764 2,508
BUSINESS TELEPHONY LINES 8,164 18,297 8,988 16,535
- ---------------------------------------------------------------------------------------------------------------------
AS AT 30 JUNE AS AT 30 JUNE
1998 1997
- ---------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 3,162,623 2,859,879
CATV CUSTOMERS 725,479 636,453
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 3,130,779 2,811,225
RESIDENTIAL TELEPHONY CUSTOMERS 943,000 795,747
RESIDENTIAL TELEPHONY LINES 988,547 812,650
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 30,712 25,806
BUSINESS TELEPHONY LINES 134,970 95,104
AVERAGE NUMBER OF LINES PER CUSTOMER 4.4 3.7
- ---------------------------------------------------------------------------------------------------------------------
Note:
* The affiliated franchises include Telewest's interests in Cable London plc
(50.0% 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 June 1998
- ------------------------------------------------------------------------------------------------------------------------
London and Midlands and Scotland and North West Total
Sount East South West North East
- ------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 630,203 838,017 757,473 596,863 2,822,556
CATV CUSTOMERS 149,808 185,740 178,507 128,248 642,303
CATV PENETRATION 23.8% 22.2% 23.6% 21.5% 22.8%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 624,210 838,140 731,783 596,091 2,790,224
RESIDENTIAL TELEPHONY CUSTOMERS
160,580 278,555 230,664 183,322 853,121
RESIDENTIAL TELEPHONY PENETRATION
25.7% 33.2% 31.5% 30.8% 30.6%
RESIDENTIAL TELEPHONY LINES 175,602 289,383 238,958 191,716 895,659
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 6,583 9,105 6,410 5,400 27,498
BUSINESS TELEPHONY LINES 31,669 42,493 20,759 21,713 116,634
AVERAGE NUMBER OF LINES PER
CUSTOMER 4.8 4.7 3.2 4.0 4.2
- ------------------------------------------------------------------------------------------------------------------------
6
TELEWEST COMMUNICATIONS PLC
Owned and Operated Franchises
As at 30 June 1998
- ------------------------------------------------------------------------------------------------------------------------------------
London South North Scotland South North Midlands Total
South West Esat East West
- ------------------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
- ----------------
HOMES MARKETED 364,964 382,232 225,079 532,394 265,239 596,863 455,785 2,822,556
CATV CUSTOMERS 81,224 85,153 55,711 122,796 68,584 128,248 100,587 642,303
CATV PENETRATION 22.3% 22.3% 24.8% 23.1% 25.9% 21.5% 22.1% 22.8%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 358,947 382,355 222,882 508,901 265,263 596,091 455,785 2,790,224
RESIDENTIAL TELEPHONY CUSTOMERS 76,583 121,904 76,346 154,318 83,997 183,322 156,651 853,121
RESIDENTIAL TELEPHONY PENETRATION 21.3% 31.9% 34.3% 30.3% 31.7% 30.8% 34.4% 30.6%
RESIDENTIAL TELEPHONY LINES 85,729 128,809 78,004 160,954 89,873 191,716 160,574 895,659
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 5,034 5,229 1,790 4,620 1,549 5,400 3,876 27,498
BUSINESS TELEPHONY LINES 25,478 23,266 5,071 15,688 6,191 21,713 19,227 116,634
AVERAGE NUMBER OF LINES PER
CUSTOMER 5.1 4.5 2.8 3.4 4.0 4.0 5.0 4.2
- ------------------------------------------------------------------------------------------------------------------------------------
7
TELEWEST COMMUNICATIONS PLC
Affiliated Franchises
As at 30 June 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Cable London Birmingham Cable The Cable Corporation Total Affiliates
ACTUAL EQUITY ACTUAL EQUITY ACTUAL EQUITY ACTUAL EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION
HOMES MARKETED 358,497 179,249 415,099 114,152 282,827 46,666 1,056,423 340,067
CATV CUSTOMERS 87,604 43,802 116,893 32,146 43,809 7,228 248,306 83,176
CATV PENETRATION 24.4% 24.4% 28.2% 28.2% 15.5% 15.5% 23.5% 24.5%
RESIDENTIAL TELEPHONY
HOMES MARKETED 358,497 179,249 415,099 114,152 285,782 47,154 1,059,378 340,555
RESIDENTIAL TELEPHONY CUSTOMERS
88,094 44,047 128,247 35,268 64,027 10,564 280,368 89,879
RESIDENTIAL TELEPHONY PENETRATION
24.6% 24.6% 30.9% 30.9% 22.4% 22.4% 26.5% 26.4%
RESIDENTIAL TELEPHONY LINES 94,110 47,055 128,247 35,268 64,027 10,564 286,384 92,887
BUSINESS TELEPHONY
BUSINESS TELEPHONY CUSTOMERS 3,202 1,601 4,523 1,243 2,234 369 9,959 3,213
BUSINESS TELEPHONY LINES 16,568 8,284 20,022 5,506 27,548 4,545 64,138 18,335
AVERAGE NUMBER OF LINES PER
CUSTOMER 5.2 5.2 4.4 4.4 12.3 12.3 6.4 5.7
- ------------------------------------------------------------------------------------------------------------------------------------
8
- -----------------------------------------------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
- -----------------------------------------------------------------------------------------------------------------------
UNAUDITED SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 1998
NOTE 6 MONTHS 6 MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
1998 1997 1997
(POUND)000 (POUND)000 (POUND)000
- -----------------------------------------------------------------------------------------------------------------------
TURNOVER
CABLE TELEVISION 88,758 76,845 159,918
TELEPHONY - RESIDENTIAL 98,918 77,849 166,645
TELEPHONY - BUSINESS 28,106 19,901 43,882
OTHER (INTERNET, AD SALES ETC) 10,095 6,847 16,053
225,877 181,442 386,498
====================================================
OPERATING LOSS (39,816) (59,985) (127,764)
SHARE OF RESULTS OF ASSOCIATED UNDERTAKINGS (3,457) (5,418) (11,126)
OTHER INTEREST RECEIVABLE AND SIMILAR income (includes 2,968 5,266 14,662
the group share of interest receivable in associated
undertakings of (pound)104,(pound)683 and (pound)5,565 respectively)
INTEREST PAYABLE AND SIMILAR CHARGES 3 (101,317) (82,206) (185,681)
LOSS ON ORDINARY ACTIVITIES BEFORE TAX (141,622) (142,343) (309,909)
TAX ON LOSS ON ORDINARY ACTIVITIES 3 (115) (521)
LOSS ON ORDINARY ACTIVITIES AFTER TAX (141,619) (142,458) (310,430)
MINORITY INTERESTS (68) (210) (293)
LOSS FOR THE FINANCIAL PERIOD (141,687) (142,668) (310,723)
====================================================
LOSS PER EQUITY SHARE (PENCE) (10.0) (10.0) (21.8)
====================================================
- -----------------------------------------------------------------------------------------------------------------------
1 EARNINGS/ (LOSS) BEFORE INTEREST, TAXES,
DEPRECIATION, AND AMORTISATION ("EBITDA")
- -----------------------------------------------------------------------------------------------------------------------
OPERATING LOSS (39,816) (59,985) (127,764)
ADD: DEPRECIATION 94,079 76,358 177,341
EBITDA 54,263 16,373 49,577
=====================================================
2 OPERATING COSTS
PROGRAMMING EXPENSES 47,923 46,626 93,441
TELEPHONY EXPENSES 31,315 27,440 50,145
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES 92,376 91,003 193,335
DEPRECIATION 94,079 76,358 177,341
265,693 241,427 514,262
=====================================================
3 INTEREST PAYABLE AND SIMILAR CHARGES
SHARE OF INTEREST OF ASSOCIATED UNDERTAKINGS 7,721 5,588 15,751
ON BANK LOANS AND OVERDRAFTS AND OTHER LOANS
WHOLLY REPAYABLE WITHIN 5 YEARS 41 8,207 16,941
WHOLLY OR PARTLY REPAYABLE IN MORE THAN 5 YEARS 24,398 5,282 14,741
FINANCE COSTS OF SENIOR DISCOUNT DEBENTURES 40,548 34,344 71,661
FINANCE COSTS OF SENIOR DEBENTURES 11,370 11,318 22,657
FINANCE CHARGES PAYABLE IN RESPECT OF FINANCE
LEASE AND HIRE PURCHASE CONTRACTS 2,490 1,976 4,702
EXCHANGE LOSSES ON FOREIGN CURRENCY TRANSLATION, NET 5,218 15,023 30,954
OTHER 9,531 468 8,274
101,317 82,206 185,681
- ------------------------------------------------------------------------------------------------------------------------
The consolidated financial statements as set out on pages 9, 10 and 11 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1997 Annual Report. The balance sheet, profit and loss account and
cash flow information at 31 December 1997 is derived from the statutory accounts
for 1997 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.
9
- -----------------------------------------------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS PLC
UK GAAP
UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET AT 30 JUNE 1998
30 JUNE 30 JUNE 31 DECEMBER
1998 1997 1997
(POUND)000 (POUND)000 (POUND)000
- -----------------------------------------------------------------------------------------------------------------------
FIXED ASSETS 1,790,807 1,720,546 1,809,213
CURRENT ASSETS
Stocks 91 72 32
Debtors 81,479 68,242 70,457
Cash at bank and in hand 26,295 61,732 29,582
107,865 130,046 100,071
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (197,523) (210,395) (334,756)
NET CURRENT LIABILITIES (89,658) (80,349) (234,685)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,701,149 1,640,197 1,574,528
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
(1,573,948) (1,203,004) (1,305,708)
MINORITY INTERESTS (708) (557) (640)
------------------------------------------------------
CAPITAL AND RESERVES 126,493 436,636 268,180
- -----------------------------------------------------------------------------------------------------------------------
10
TELEWEST COMMUNICATIONS PLC
UK GAAP
- ---------------------------------------------------------------------------------------------------------
Unaudited summarised consolidated statements
of cash flows
6 Months ended Y/ending
June 30 31 Dec 97
- ---------------------------------------------------------------------------------------------------------
1998 1997 1997
(pound)'000 (pound)'000 (pound)'000
- ---------------------------------------------------------------------------------------------------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 40,861 (2,493) 68,624
----------------------------------------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 1,833 2,988 3,599
Interest paid (32,501) (20,044) (63,479)
Interest element of finance lease payments (2,490) (2,594) (4,702)
----------------------------------------------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE (33,158) (19,650) (64,582)
----------------------------------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (110,304) (207,504) (436,100)
Sale of tangible fixed assets 4,354 922 6,066
----------------------------------------------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT (105,950) (206,582) (430,034)
----------------------------------------------
ACQUISITIONS AND DISPOSALS
Investment in associated undertakings and
other participating interests (3.719) (9,113) (9,633)
----------------------------------------------
NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (3,719) (9,113) (9,633)
----------------------------------------------
MANAGEMENT OF LIQUID RESOURCES
Decrease in fixed deposits (net) 8,710 21,523 53,288
FINANCING
Cash paid for credit facility arrangement costs (5,900) 0 0
Proceeds from borrowings 110,000 222,500 392,500
Repayment of borrowings (10) 0 (2,375)
Capital element of finance lease payments (5,397) (2,063) (3,971)
----------------------------------------------
NET CASH INFLOW FROM FINANCING 98,693 220,437 386,154
----------------------------------------------
INCREASE IN CASH 5,437 4,122 3,817
- ---------------------------------------------------------------------------------------------------------
11
TELEWEST COMMUNICATIONS PLC
US GAAP
- --------------------------------------------------------------------------------------------------------------------------
UNAUDITED SUMMARISED CONSOLIDATED
STATEMENTS OF OPERATIONS 3 Months 3 Months 3 Months 6 Months 6 Months 6 Months
ENDED ENDED ENDED ENDED ENDED ENDED
30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE
1998 1998 1997 1998 1998 1997
$000 (POUND)000 (POUND)000 $000 (POUND)000 (POUND)000
- --------------------------------------------------------------------------------------------------------------------------
REVENUE
Cable television 74,267 44,578 38,744 147,871 88,758 76,845
Telephony - residential 84,103 50,482 38,175 164,797 98,918 77,849
Telephony - business 24,330 14,604 10,614 46,825 28,106 19,901
Other 9,644 5,789 3,519 16,818 10,095 6,847
----------- ----------- ------------ ----------- ----------- -----------
192,344 115,453 91,052 376,311 225,877 181,442
=========== =========== ============ =========== =========== ===========
OPERATING LOSS (42,403) (25,452) (36,421) (88,325) (53,016) (73,187)
Interest income 1,626 976 1,748 3,444 2,067 4,110
Interest expense (66,085) (39,667) (32,920) (137,258) (82,388) (63,234)
Foreign exchange gain/(losses), net (13,396) (8,041) (172) (2,351) (1,411) (24,299)
Share of losses of affiliates (7,280) (4,370) (5,345) (18,449) (11,074) (10,323)
Minority interest in profits of
consolidated subsidiaries, net (70) (42) (93) (113) (68) (210)
Other, net 417 251 352 1,327 797 473
----------- ----------- ------------ ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (127,191) (76,345) (72,851) (241,725) (145,093) (166,670)
Income tax expense (28) (17) (51) 5 3 (115)
----------- ----------- ------------ ----------- ----------- -----------
NET LOSS (127,219) (76,362) (72,902) (241,720) (145,090) (166,785)
=========== =========== ============ =========== =========== ===========
LOSS PER ORDINARY SHARE
(DOLLARS/POUNDS) (0.14) (0.08) (0.08) (0.26) (0.16) (0.18)
=========== =========== ============ =========== =========== ===========
1 EARNINGS/(LOSS) BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTISATION ("EBITDA")
Operating loss (42,403) (25,452) (36,421) (88,325) (53,016) (73,187)
Add: depreciation and amortisation of 89,891 53,956 45,510 178,727 107,279 89,560
goodwill
----------- ----------- ------------ ----------- ----------- -----------
EBITDA 47,488 28,504 9,089 90,402 54,263 16,373
=========== =========== ============ =========== =========== ===========
2 OPERATING COSTS AND EXPENSES
Programming (37,762) (22,666) (23,428) (79,840) (47,923) (46,626)
Telephony (28,512) (17,114) (13,061) (52,171) (31,315) (27,440)
Selling, general and administration (78,584) (47,169) (45,474) (153,898) (92,376) (91,003)
Depreciation (78,893) (47,355) (38,902) (156,736) (94,079) (76,358)
Amortisation of goodwill (10,997) (6,601) (6,608) (21,991) (13,200) (13,202)
----------- ----------- ------------ ----------- ----------- -----------
(234,748) (140,905) (127,473) (464,636) (278,893) (254,629)
- --------------------------------------------------------------------------------------------------------------------------
The consolidated financial statements as set out on pages 12 and 13 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1997 Annual Report. The balance sheet, profit and loss account and
cash flow information at 31 December 1997 is derived from the statutory accounts
for 1997 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 $1.666 per (pound)1.00, the Noon Buying Rate
of the Federal Reserve Bank of New York on June 30, 1998. 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.
12
TELEWEST COMMUNICATIONS PLC
US GAAP
- ------------------------------------------------------------------------------------------------------------------
1998 1998 1997
$000 (POUND)000 (POUND)000
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ASSETS
Cash and cash equivalents 43,807 26,295 29,582
Receivables and prepaid expenses 135,744 81,479 70,459
Investments 125,072 75,073 85,373
Property and equipment 2,854,173 1,713,189 1,705,520
Goodwill 754,215 452,710 465,905
Other assets 73,049 43,847 56,513
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TOTAL ASSETS 3,986,060 2,392,593 2,413,352
=============== =============== =================
LIABILITIES
Debt 2,513,154 1,508,496 1,373,054
Other liabilities 482,689 289,729 300,908
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TOTAL LIABILITIES 2,995,843 1,798,225 1,673,962
MINORITY INTERESTS 1,180 708 640
SHAREHOLDERS' EQUITY 989,037 593,660 738,750
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,986,060 2,392,593 2,413,352
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UNAUDITED SUMMARISED CONSOLIDATED STATEMENTS OF CASH FLOWS
6 months 6 months 6 months
ended Ended ended
30 June 30 June 30 June
1998 1998 1997
$000 (pound)000 (pound)000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (241,720) (145,090) (166,785)
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation 156,736 94,079 76,358
Amortisation of goodwill 21,983 13,195 13,202
Amortisation of deferred financing costs and issue
discount on senior discount debentures 71,761 43,074 37,178
Unrealised (gains)/loss on foreign currency translation 2,161 1,297 24,061
Share of losses of affiliates 18,448 11,073 10,323
Gain on disposals of assets (1,211) (727) (473)
Minority interests in profits of consolidated 113 68 210
subsidiaries, net
Changes in operating assets and liabilities
Change in receivables (8,963) (5,380) (117)
Change in prepaid expenses (3,430) (2,059) (1,089)
Change in accounts payable 18,356 11,018 (8,648)
Change in other liabilities (21,402) (12,845) (6,363)
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NET CASH PROVIDED BY / (USED) IN OPERATING ACTIVITIES 12,832 7,703 (22,143)
NET CASH USED IN INVESTING ACTIVITIES (182,709) (109,669) (215,695)
NET CASH PROVIDED BY FINANCING ACTIVITIES 164,423 98,693 220,437
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NET DECREASE IN CASH AND CASH EQUIVALENTS (5,454) (3,273) (17,401)
Effect of exchange rate changes on cash and cash equivalents (23) (14) 17
Cash and cash equivalents at beginning of period 49,284 29,582 79,116
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CASH AND CASH EQUIVALENTS AT END OF PERIOD 43,807 26,295 61,732
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