British Sky Broadcasting Group plc Results For The Six Months Ended December 31, 2001; BSkyB Continues To Deliver Growth On All Fronts.Business Editors LONDON--(BUSINESS WIRE)--Feb. 8, 2002 British Sky Broadcasting British Sky Broadcasting (BSkyB — formerly two companies, Sky Television and BSB) is a company that operates Sky Digital, a subscription television service in the UK and the Republic of Ireland. It produces TV content, and owns several TV channels. plc (NYSE NYSE See: New York Stock Exchange : BSY BSY Busy BSY British School of Yoga BSY Bit Sync BSY Busy Line ), the UK-based pay-television broadcasting group, today announced its results for the six months ended December December: see month. 31, 2001. - Revenue increases by 22% to(pound)1,320 million ($1,913 million) - ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. up 11% to(pound)331 ($480) - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increases by 43% to(pound)111 million ($161 million) - Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before goodwill and exceptionals increases by 39% to(pound)70 million ($102 million) - Net DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. growth of 218,000 in the quarter to 5.7 million - Churn churn: see butter. stable at 10.4% - KirchPayTV goodwill of(pound)985 million ($1,427 million) written-off Tony Ball, Chief Executive of British Sky Broadcasting Group plc, said: "The last six months have seen another strong operating performance. We have over 5.7 million subscribers, revenue per subscriber is growing by 10% a year and we are now generating positive free cashflow. Sky's investment in digital has peaked and we now look forward to reaping the benefit." "We have today announced the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the goodwill of (pound)985 million ($1,427 million) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our investment in KirchPayTV. However, we remain focused on protecting our rights and securing full value from our put option." There will be a presentation to analysts and investors at 9:30 a.m. today at The Gibson Hall, 13 Bishopsgate Coordinates:
London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , EC2M 4QB and to the press at 11:00 a.m. at the same venue venue In law, the place or county in which the events giving rise to a legal action take place and from which a jury may be drawn to try the case. Venue statutes usually specify that a trial must take place in the district that has jurisdiction over the matter. . A webcast of the presentation to analysts, together with this press release will be available from 2:00 p.m. today on Sky's corporate website (www.sky.com/corporate). A conference call for US analysts will be held at 9:30 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) today. Details of this call have been sent to US institutions and can be obtained from Patrick Lyon Lyon English Lyons City (pop., 1999: city, 445,452; metro. area, 1,348,932), east-central France. Located at the confluence of the Rhône and Saône rivers, it was founded as the Roman military colony Lugdunum in 43 BC (see at Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. Rafferty Rafferty or Rafferty's rules Noun, pl Austral & NZ slang no rules at all [origin unknown] on +1 212 889 4350. OPERATING REVIEW At December 31, 2001 the total number of direct-to-home See DTH. (DTH) satellite subscribers in the UK and Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. was 5,716,000, all of whom were digital subscribers. This represents a net increase of 218,000 in the three months to December 31, 2001 ("the quarter"). The total number of subscribers to Sky's channels across all platforms increased by 1.0 million in the quarter to 11.2 million (representing approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 44% of UK and Ireland TV households). The quarterly annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. average revenue per DTH subscriber (ARPU) at December 31, 2001 was (pound)331 ($480), an increase of 11% over the three months ended December 31, 2000. As a result of Sky's policy of targeting high yielding customers, the take up of premium channels remains high, with over 80% of new DTH subscribers in the quarter taking the top-tier Sky World package (compared with 57% across the whole subscriber base). Digital DTH churn for the year to date (annualized) stands at 10.4%. Sky successfully launched two new subscription products during the period: Extra Digibox A digibox can refer to either:
Cable and DTT DTT Deloitte Touche Tohmatsu (Deloitte & Touch Global Operations) DTT Dithiothreitol (cytology reagent) DTT Digital Terrestrial Television DTT Discrete Trial Training subscribers to Sky channels in the UK and Ireland grew by 813,000 in the quarter, mainly due to the fact that Sky One and Sky News are now available in the basic package for all NTL NTL Nevertheless NTL National Transportation Library NTL Norsk Tjenestemannslag NTL National Training Laboratories NTL Never Too Late NTL Nothing to Lose NTL National Training Laboratory NTL None the Less NTL Number Theory Library television homes. Sky channels' share of viewing in all UK homes was 5.9% in the period. Sky One continues to be the first to bring the best new shows from the US to UK television. The first three episodes of the new series of Star Trek  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , Enterprise, were each watched by over 1 million viewers VIEWERS. Persons appointed by the courts to see and examine certain matters, and make a report of the facts together with their opinion to the court. In practice they are usually appointed to lay out roads and the like. Vide Experts. and achieved an average 9.6% share of viewing in multi-channel See multichannel. homes.In November November: see month. , Sky Sports won exclusive live rights to the ATP ATP: see adenosine triphosphate. ATP in full adenosine triphosphate Organic compound, substrate in many enzyme-catalyzed reactions (see catalysis) in the cells of animals, plants, and microorganisms. Masters Tennis for the next three seasons and coverage will begin in March. Viewers are enjoying the closest Premiership football title race for years and can also look forward to live coverage of England's international cricket International Cricket is a cricket game for the Nintendo Entertainment System that was only released in Australia in 1992. Developed by Melbourne House (as Beam Software) and published by Mattel, it was the only cricket game released for the NES. matches in New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , three England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. Rugby Union rugby union Noun a form of rugby played between teams of 15 players internationals against Ireland, Wales Wales, Welsh Cymru, western peninsula and political division (principality) of Great Britain (1991 pop. 2,798,200), 8,016 sq mi (20,761 sq km), west of England; politically united with England since 1536. The capital is Cardiff. and France, and World Cup warm-up warm-up pre-race exercise by a horse. matches for the England and Republic of Ireland football teams. In October October: see month. , American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Football became the ninth sport to go interactive with Sky Sports Active Sky Sports Active is a term used by British TV channel, Sky Sports, to describe their interactive sports service. It was launched in April 1999, on Sky Sports 1. Presented by Richard Keys, the first football game that was interactive was Arsenal vs. . Interactive Formula One coverage will be available on Sky for the next two years, starting in March 2002. In the next few months, Sky Box Office will be showing the UK television premieres of Hannibal Hannibal, Carthaginian general Hannibal (hăn`əbəl), b. 247 B.C., d. 183 or 182 B.C. Carthaginian general, an implacable and formidable enemy of Rome. , Enemy at the Gates At the Gates are a Swedish melodic death metal band. They are one of the forebears of the Gothenburg sound of heavy metal along with other bands of the Gothenburg metal scene like Dark Tranquillity and In Flames. , Bridget Noun 1. Bridget - Irish abbess; a patron saint of Ireland (453-523) Brigid, Saint Bride, Saint Bridget, Saint Brigid, St. Bride, St. Bridget, St. Brigid, Bride Jones' Diary diary [Lat.,=day], a daily record of events and observations. As distinguished from memoir (an account of events placed in perspective by the author long after they have occurred), the diary derives its impact from its immediacy, requiring each generation of readers and Pearl Harbor Pearl Harbor, land-locked harbor, on the southern coast of Oahu island, Hawaii, W of Honolulu; one of the largest and best natural harbors in the E Pacific Ocean. In the vicinity are many U.S. military installations, including the chief U.S. . Sky Premier's line up will include Charlie's Angels, Little Nicky Nicky is a given name, and may refer to: In pop culture:
Sky continues to benefit as an increasing number of viewers embrace the greater choice and convenience offered by multi-channel television. The combined viewing share of multi-channel services in all UK homes rose to 19.6% in 2001 from 16.6% in 2000. The parallel decline in terrestrial Dealing with the earth. See terrestrial link. viewing was reflected by falls in the audience shares of ITV (1) See interactive TV. (2) (iTV) The code name for Apple's video media hub (see Apple TV). 1 to 26.9% from 29.3% and of BBC BBC in full British Broadcasting Corp. Publicly financed broadcasting system in Britain. A private company at its founding in 1922, it was replaced by a public corporation under royal charter in 1927. 1 to 26.9% from 27.2%. Sky has recently won contracts to produce regular programming for two terrestrial broadcasters. A joint bid submitted by Sky and Princess Productions Princess Productions is a London based television production company started in September 1996 by Henrietta Conrad and Sebastian Scott and which has produced broadcast shows and pilots across a variety of genres. won the contract to produce a new breakfast show to replace Channel 4's The Big Breakfast from the spring. Since January January: see month. 7, 2002, Channel 5 has been simulcasting Sky News Sunrise Sunrise is the breakfast time programme on Sky News between 6:00am and 9:00am on weekdays and 6:00am to 10:00am on weekends. It was first aired in February 1989. Since February 2007, the weekday episodes of the show have been called Sunrise with Eamonn Holmes for half an hour on weekdays and one hour on Saturdays. These contracts will enable Sky to demonstrate its production talent, creativity and professionalism professionalism the upholding by individuals of the principles, laws, ethics and conventions of their profession. to new audiences. The launch of Sky Active on October 1, 2001, providing access to many of Sky's interactive services through a channel interface as well as the main menu, has continued the strategy of integrating interactivity more closely with programming. Messaging facilities such as email and SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. , and information services See Information Systems. such as cinema listings are now all available without interrupting TV viewing. Sky Active has continued to migrate its services to WML (Wireless Markup Language) A tag-based language used in the Wireless Application Protocol (WAP). WML is an XML document type allowing standard XML and HTML tools to be used to develop WML applications. It evolved from Openwave's HDML, but WML is not a superset of HDML. browser browser Software that allows a computer user to find and view information on the Internet. The first text-based browser for the World Wide Web became available in 1991; Web use expanded rapidly after the release in 1993 of a browser called Mosaic, which used technology, making them faster and simpler to access. Sky is leading the way in interactivity on the digital satellite platform, and third party channels are increasingly making use of the interactive potential it offers. Amongst others, the BBC, Channel 4, E4, Discovery, MTV MTV in full Music Television U.S. cable television network, established in 1980 to present videos of musicians and singers performing new rock music. MTV won a wide following among rock-music fans worldwide and greatly affected the popular-music business. , Nickelodeon, QVC QVC Quality Value Convenience QVC Question Valid Command , Cartoon Network For Cartoon Network outside of the United States, see . Cartoon Network is a cable television network created by Turner Broadcasting which primarily shows animated programming. and Disney Dis·ney , Walter Elias Known as "Walt." 1901-1966. American animator, showman, and film producer. Noted for his creation of the cartoon characters Mickey Mouse and Donald Duck, he produced the first animated film with sound, have successfully launched interactive services and more third party channels are expected to launch interactivity soon. As the operator of the platform, Sky receives a share of interactive revenues generated by third parties who use the platform's interactive functionality. Sky expects that enhanced programming will become increasingly common and that broadcasters will continue to develop new business models which create revenue generating features tied in to programming. FINANCIAL REVIEW Sky continues to increase its operating profitability year on year and has achieved its target of becoming free cashflow positive from January 1, 2002. Operating profit before goodwill and exceptional items for the six months to December 31, 2001 ("the period") was (pound)70 million ($102 million), an increase of 39% on the six months to December 31, 2000 ("the comparable period"). EBITDA for the period (calculated as operating profit before exceptional items, depreciation and amortization of goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ) increased by 43% to (pound)111 million ($161 million). Revenues increased by (pound)234 million ($339 million) to (pound)1,320 million ($1,913 million), up 22% on the comparable period. Operating expenditure increased by a smaller amount, up (pound)215 million ($312 million) to (pound)1,250 million ($1,811 million), before goodwill and exceptional items, as the Group continued to focus on tight control of costs. Before goodwill and exceptional items, the loss before tax was (pound)62 million ($89 million), an improvement of (pound)50 million ($72 million) on the comparable period. After goodwill, interest, share of joint ventures' losses and exceptional items (principally relating to KirchPayTV), the loss before tax was (pound)1,253 million ($1,815 million). The loss after tax was (pound)1,354 million ($1,961 million), resulting in a loss of 71.8 pence pence n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, (104.0c) per share. Net debt at December 31, 2001 peaked in line with expectations at (pound)1,833 million ($2,656 million) and had fallen to below (pound)1,800 million ($2,608 million) at the end of January 2002. Net debt has now peaked and will reduce further over the remainder of the current financial year. Revenues DTH revenues increased by 27% to (pound)905 million ($1,311 million) as a result of a 17% increase in the average number of DTH subscribers, and an 11% increase in core ARPU to (pound)318 ($461). An increase in the average number of cable and DTT subscribers receiving the basic channels Sky One and Sky News was almost wholly offset by a decline in the average number of premium channels taken by these subscribers. Consequently cable and DTT revenue increased by 1% in the period to (pound)147 million ($213 million). The Group's advertising revenue fell by 12% on the comparable period to (pound)118 million ($171 million) as a result of the significant advertising market downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. . This was mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. in part by continued growth in market share and the development of airtime air·time n. 1. The time during which a radio or television station is broadcasting. Also called airspace. 2. The time at which a radio or television program is broadcast. sales in Ireland. Interactive revenues increased by 149% to (pound)91 million ($132 million), of which (pound)49 million ($71 million) related to betting via interactive television, the internet and the telephone. The remaining (pound)42 million ($61 million) represented Sky's share of revenues from interactive services on the digital satellite platform generated by Sky Active and by third parties. Interactive ARPU was (pound)13 ($19), an increase of 7% on the comparable period. Costs Programming costs increased by (pound)121 million ($175 million) to (pound)657 million ($952 million). Sports costs increased by (pound)80 million ($116 million) to (pound)273 million ($396 million) mainly due to the (pound)69 million ($100 million) increase in the cost for the period of the new Premier League contract, which started in August 2001. An increase in movie costs of (pound)18 million ($26 million) to (pound)180 million ($260 million), reflected an increased proportion of "hit" titles, a 6% increase in the average number of movie subscribers and increased volumes of pay-per-view pay-per-view n. A service offered by cable television companies that allows subscribers to view special programs for an additional charge. pay purchases. Marketing costs increased 3% to (pound)220 million ($319 million) as reductions in set top box costs and above-the-line spending were offset by the consolidation of BiB's set top box subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. . On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, the subscriber acquisition cost (SAC Sac: see Sac and Fox. SAC - 1. An early system on the Datatron 200 series. [Listed in CACM 2(5):16 (May 1959)]. ) has fallen from approximately (pound)250 ($362) in the comparable period to (pound)235 ($340), reaching the target set for the current financial year six months early. Subscriber management costs increased by 25% to (pound)146 million ($212 million), due to the 17% increase in the average number of DTH subscribers over the comparable period and the introduction of several new products. Goodwill amortization of (pound)60 million ($87 million) included in operating profit relates principally to the goodwill arising on the acquisitions of Sports Internet Group and BiB which is being amortized over 7 years. The Group's share of the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of joint ventures was reduced from (pound)99 million ($143 million) in the comparable period to (pound)60 million ($87 million) in the period, following the acquisition of BiB. KirchPayTV accounted for (pound)57 million ($83 million) of these losses. The Group has made a provision against its minority equity investments in football clubs, reflecting the accounting treatment of these investments required by UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles . This has led to a non-cash exceptional charge of (pound)60 million ($87 million), which is accounted for below operating profit. KirchPayTV The Directors believe that the Group's investment in KirchPayTV ("KPTV KPTV is the Fox television affiliate serving the Portland, Oregon metropolitan area. It broadcasts its analog signal on VHF channel 12, and its digital signal on UHF channel 30. Its transmitter is located in Portland. ") is impaired See assistive technology. and have therefore made an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of (pound)985 million ($1,427 million) in respect of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the goodwill in KPTV. The ongoing losses experienced by KPTV, the Group's concerns over the adequacy of funding in place to support KPTV's business plan for the 12 month period from the date of announcing these financial statements, and the Group's evaluation of limited information it has received from KPTV regarding the expected financial effects of certain strategic, operational and management decisions made by KPTV, do not at present provide the Group with sufficient confidence that the value of KPTV is able to support the carrying value of the Group's investment in KPTV. The Group has the right to exercise a put option in respect of its stake in KPTV, and has therefore considered whether the put option could be used to support the carrying value of the Group's investment in KPTV. The put option becomes exercisable from October 1, 2002, or earlier in certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , if no initial public offering of KPTV has occurred before then. If the put option were exercised, Taurus Taurus, in astronomy Taurus [Lat.,= the bull], in astronomy, constellation NW of Orion and lying on the ecliptic (the sun's apparent path through the heavens) between Gemini and Aries; it is one of the constellations of the zodiac. Holding (formerly known as Kirch Kirch may refer to:
In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.3 billion ($1.2 billion) in cash, an amount equal to the cost of acquisition at the time the Group entered into the investment agreement, plus compound interest at 12%. The Group has not been able to obtain any evidence to its satisfaction that the resources of Taurus Holding will be sufficient to satisfy the put option if exercised. The Group has also requested detailed information from the Kirch Gruppe in order to allow it to evaluate its options. However, the Group has not yet received all of the information requested. Therefore, due to the lack of sufficient information from any source over the realizability Realizability is a part of proof theory which can be used to handle information about formulas instead of about the proofs of formulas.[1] A natural number n is said to realize a statement in the language of arithmetic of natural numbers. of contractual payments specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. by the put option, the Directors are currently unable to determine the amount, if any, likely to be received in the event of exercising the put option. Given the uncertainties described above, the Directors consider the most appropriate accounting treatment is to write down the carrying value of its investment in KPTV to nil. If these uncertainties are resolved in future accounting periods, the write down of (pound)985 million ($1,427 million) may be partially or wholly reversed under UK GAAP. The Group's share of KPTV's operating losses has been extracted from financial statements prepared by KPTV's management on a going concern basis. KPTV management has informed the Group that its auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , KMPG, have not provided a SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. 71 review on the results of KPTV for the six months to September September: see month. 30, 2001, principally due to KPMG's questioning of the appropriateness of the going concern basis for the financial statements. A shareholder, other than the Group, has committed to provide temporary financing Temporary Financing The sum of negotiated current liabilities and temporary spontaneous current liabilities. up to a specified maximum, until such time as additional financing may be obtained, for a period expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. on June June: see month. 30, 2002. However, the Group has concerns over the adequacy of the funding in place to support KPTV's business plan. Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing have drawn attention in their review report to the fundamental uncertainties over the financing and performance of KPTV and the value of the Group's put option. Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism Andersen's report is not qualified in this respect. Following the impairment charge made in respect of the Group's investment in KirchPayTV, the Group has also written down a UK deferred tax asset, as there is no longer sufficient evidence under FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 19 to support the recognition of this asset, although the Directors ultimately expect it to be fully recovered. This led to an exceptional taxation charge of (pound)96 million ($139 million) in the period. Cashflow The Group's operating cash outflow was (pound)178 million ($258 million) in the period, compared to an operating cash outflow of (pound)86 million ($125 million) in the comparable period. This included increases in working capital (principally related to the timing of payments for sports rights) of (pound)262 million ($380 million). After capital expenditure of (pound)49 million ($71 million), net interest payments of (pound)62 million ($90 million) and other net inflows of (pound)2 million ($4 million), net debt increased by (pound)287 million ($415 million) to (pound)1,833 million ($2,656 million). Corporate On December 17, 2001, the Office of Fair Trading The Office of Fair Trading or OFT is a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator. announced that it was proposing to make a decision that Sky has behaved anti-competitively, infringing UK competition law. Sky maintains that it has not infringed the Competition Act and welcomes its first opportunity to put its case to the OFT. Sky has now been made aware of the detailed allegations against it and will defend itself robustly in the next stage of the process. The OFT has said that it does not anticipate being in a position to make a final decision before summer 2002. Decisions of the OFT are subject to a right of appeal to the Competition Commission Appeals Tribunal A general term for a court, or the seat of a judge. In Roman Law, the term applied to an elevated seat occupied by the chief judicial magistrate when he heard causes. tribunal n. . On January 18, 2002, Sky informed the cable companies and ITV Digital that it was modifying its wholesale prices for its premium channels to be consistent with the OFT's new position on wholesale pricing set out in its Rule 14 notice. The modifications address, but in no way imply acceptance of, the allegations made by the OFT against Sky in its Rule 14 Notice. The effect of these new prices is expected to be broadly neutral on Sky's wholesale revenue. NTL is a major customer of the Group, accounting for a substantial proportion of wholesale revenues. In the light of NTL's announcement on January 31, 2002 that it has appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. advisers to consider strategic and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. alternatives to strengthen the company's balance sheet and reduce debt, Sky is keeping its trading relationship with NTL under close review. On February February: see month. 6, 2002, Dr Dieter Hahn Hahn , Otto 1879-1968. German chemist. He won a 1944 Nobel Prize for his work on atomic fission. Noun 1. Hahn - German chemist who was co-discoverer with Lise Meitner of nuclear fission (1879-1968) Otto Hahn resigned as a non-executive director A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. of the Company.
Appendix 1
Subscribers to Sky Channels
Prior Year Opening
Q2 2000/01 Q4 2000/01 Q1 2001/02 Q2 2001/02
as at as at as at as at
12/31/00 06/30/01 09/30/01 12/31/01
---------- ---------- ---------- ----------
DTH (1)(20
Digital 4,669,000 5,308,000 5,498,000 5,716,000
Analogue 382,000 145,000 - -
Total DTH 5,051,000 5,453,000 5,498,000 5,716,000
Cable - UK 3,093,000 2,865,000 2,914,000 3,676,000
Cable - Ireland 631,000 621,000 602,000 613,000
DTT(3) 975,000 1,105,000 1,178,000 1,218,000
Total 9,750,000 10,044,000 10,192,000 11,223,000
DTH Churn rate
for year to
date (annualized) 9.8% 10.0% 10.4%(4) 10.4%(4)
1: Includes DTH subscribers in Ireland (220,000 as at December
31, 2001).
2: DTH subscribers includes only primary subscriptions to Sky (no
additional units are counted for Sky+ or Extra Digibox
subscriptions).
3: Includes all DTT subscribers, excluding promotional and
non-activated subscribers, as disclosed in ITV Digital press
releases. As at September 30, 2001, 75% of these subscribed to
Sky One and 29% subscribed to one or more Sky premium channels
(based on figures reported to Sky by ITV Digital). DTT
subscribers as at December 31, 2001 are based on Sky
estimates.
4: Excludes analogue churn up to September 27, 2001 and the
effect of the termination of the analogue service on September
27, 2001.
Consolidated Profit and Loss Account for
the half year ended December 31, 2001
2001/2002
Half year 2001/2002
Before Half year
goodwill Goodwill
and and 2001/2002
exceptional exceptional Half year
items items Total
$m(1) $m(1) $m(1)
Notes (unaudited) (unaudited) (unaudited)
----- ----------- ----------- -----------
Turnover: Group
and share of joint ventures 2,048.3 - 2,048.3
Less: share of joint ventures'
turnover (134.9) - (134.9)
Group turnover 2 1,913.4 - 1,913.4
------- -------- --------
Operating expenses, net 3 (1,811.9) (86.6) (1,898.5)
------- -------- --------
EBITDA 13 161.0 - 161.0
Depreciation (59.5) - (59.5)
Amortization 8 - (86.6) (86.6)
------- -------- --------
Operating profit (loss) 101.5 (86.6) 14.9
------- -------- --------
Share of operating
results of joint ventures 4 (86.6) - (86.6)
Joint ventures'
goodwill amortization(2) 9 - (1,569.7) (1,569.7)
Profit on sale of
fixed asset investment 9 - 3.2 3.2
Share of joint
venture's loss on sale
of fixed asset investment 9 - - -
Amounts written off
fixed asset investments 9 - (86.9) (86.9)
Reversal of provision
(provision) for loss
on disposal of subsidiary 8 - 14.5 14.5
Profit (loss) on ordinary
activities before
interest and taxation 14.9 (1,725.5) (1,710.6)
------- -------- --------
Interest receivable
and similar income 12.3 - 12.3
Interest payable
and similar charges (116.3) - (116.3)
Loss on ordinary
activities before taxation (89.1) (1,725.5) (1,814.6)
------- -------- --------
Taxation charge 5 (8.0) (138.5) (146.5)
Loss on ordinary
activities after taxation (97.1) (1,864.0) (1,961.1)
------- -------- --------
Equity dividends
- paid and proposed 6 -
Retained loss 11 (1,961.1)
-------- -------- --------
Loss per share
- basic and diluted 7 (5.2c) (98.8c) (104.0c)
-------- -------- --------
2001/2002 2000/2001
Half year 2001/2002 Half year
Before Half year Before
goodwill Goodwill goodwill and
and and 2001/2002 exceptional
exceptional exceptional Half year items
items items Total as restated
(pound)m (pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------
Turnover:
Group and share
of joint ventures 1,413.7 - 1,413.7 1,188.0
Less: share of joint
ventures' turnover (93.1) - (93.1) (102.0)
Group turnover 1,320.6 - 1,320.6 1,086.0
-------- -------- -------- --------
Operating expenses, net (1,250.5) (59.8) (1,310.3) (1,035.4)
-------- -------- -------- --------
EBITDA 111.1 - 111.1 77.7
Depreciation (41.0) - (41.0) (27.1)
Amortization - (59.8) (59.8) -
-------- -------- -------- --------
Operating profit (loss) 70.1 (59.8) 10.3 50.6
Share of operating
results of
joint ventures (59.8) - (59.8) (98.6)
Joint ventures'
goodwill amortization(2) - (1,083.4) (1,083.4) -
Profit on sale of
fixed asset investment - 2.3 2.3 -
Share of joint
venture's loss on sale
of fixed asset investment - - - -
Amounts written off
fixed asset investments - (60.0) (60.0) -
Reversal of provision
(provision) for loss
on disposal of subsidiary - 10.0 10.0 -
Profit (loss) on ordinary
activities before
interest and taxation 10.3 (1,190.9) (1,180.6) (48.0)
-------- -------- -------- ---------
Interest receivable
and similar income 8.5 - 8.5 10.0
Interest payable
and similar charges (80.3) - (80.3) (74.1)
Loss on
ordinary activities
before taxation (61.5) (1,190.9) (1,252.4) (112.1)
-------- -------- -------- --------
Taxation charge (5.5) (95.6) (101.1) (1.7)
Loss on ordinary
activities
after taxation (67.0) (1,286.5) (1,353.5) (113.8)
-------- -------- -------- --------
Equity dividends
- paid and proposed -
Retained loss (1,353.5)
-------- -------- -------- --------
Loss per share
- basic and diluted (3.6p) (68.2p) (71.8p) (6.2p)
-------- -------- -------- --------
2000/2001
Half year
Goodwill and 2000/2001
exceptional Half year 2000/2001
items Total Full year
as restated as restated Total
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
------------ ----------- ----------
Turnover:
Group and share
of joint ventures - 1,188.0 2,530.1
Less: share of joint
ventures' turnover - (102.0) (224.1)
Group turnover - 1,086.0 2,306.0
-------- -------- --------
Operating expenses, net (17.9) (1,053.3) (2,213.2)
-------- -------- --------
EBITDA - 77.7 208.2
Depreciation - (27.1) (71.1)
Amortization (17.9) (17.9) (44.3)
-------- -------- --------
Operating profit (loss) (17.9) 32.7 92.8
Share of operating
results of
joint ventures - (98.6) (255.7)
Joint ventures'
goodwill amortization(2) (36.2) (36.2) (101.1)
Profit on sale of
fixed asset investment - - -
Share of joint
venture's loss on sale
of fixed asset investment (69.5) (69.5) (69.5)
Amounts written off
fixed asset investments (24.5) (24.5) (38.6)
Reversal of provision
(provision) for loss
on disposal of subsidiary - - (10.0)
Profit (loss) on ordinary
activities before
interest and taxation (148.1) (196.1) (382.1)
-------- -------- --------
Interest receivable
and similar income - 10.0 20.9
Interest payable
and similar charges - (74.1) (153.3)
Loss on
ordinary activities
before taxation (148.1) (260.2) (514.5)
-------- -------- --------
Taxation charge - (1.7) (24.1)
Loss on ordinary
activities
after taxation (148.1) (261.9) (538.6)
-------- -------- --------
Equity dividends
- paid and proposed - -
Retained loss (261.9) (538.6)
-------- -------- --------
Loss per share
- basic and diluted (8.0p) (14.2p) (29.2p)
-------- -------- --------
(1) US Dollar equivalents are provided for reader convenience at
the December 31, 2001 exchange rate of (pound)1 = $1.4489
(2) Included within joint ventures' goodwill amortization of
(pound)1,083.4 million ($1,569.7 million) for the 2001/2002
half year is (pound)984.9 million ($1,427.0 million) in
respect of an impairment of KirchPayTV goodwill (see note 9).
The accompanying notes are an integral part of this consolidated
profit and loss account.
British Sky Broadcasting Group plc
Consolidated Profit and Loss Account
for the three months ended December 31, 2001
Three
Before months
goodwill Goodwill ended
and and December 31,
exceptional exceptional 2001
items items Total
$m(a) $m(a) $m(a)
(unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------
Turnover: Group and
share of joint
ventures 1,051.2 - 1,051.2
Less: share of joint
ventures' turnover (69.0) - (69.0)
Group turnover 982.2 - 982.2
------------------------------------------------------------------
Operating expenses,
net (945.3) (43.6) (988.9)
-----------------------------------------------------------------
EBITDA 67.5 - 67.5
Depreciation (30.6) - (30.6)
Amortization - (43.6) (43.6)
-----------------------------------------------------------------
Operating profit
(loss) 36.9 (43.6) (6.7)
-----------------------------------------------------------------
Share of operating
results of joint
ventures (41.8) - (41.8)
Joint ventures'
goodwill
amortization(b) - (1,498.5) (1,498.5)
Amounts written off
fixed asset
investments - (86.9) (86.9)
Loss on ordinary
activities before
interest and taxation (4.9) (1,629.0) (1,633.9)
----------------------------------------------------------------
Interest receivable
and similar income 6.4 - 6.4
Interest payable and
similar charges (57.8) - (57.8)
Loss on ordinary
activities before
taxation (56.3) (1,629.0) (1,685.3)
----------------------------------------------------------------
Taxation (charge)
credit 0.1 (138.5) (138.4)
Loss on ordinary
activities after
taxation (56.2) (1,767.5) (1,823.7)
---------------------------------------------------------------
Equity dividends
- paid and
proposed -
Retained loss (1,823.7)
---------------------------------------------------------------
Loss per share
- basic and
diluted (3.0c) (93.6c) (96.6c)
---------------------------------------------------------------
Three
Before months
goodwill Goodwill ended
and and December 31,
exceptional exceptional 2001
items items Total
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------
Turnover: Group and
share of joint
ventures 725.5 - 725.5
Less: share of joint
ventures' turnover (47.6) - (47.6)
Group turnover 677.9 - 677.9
--------------------------------------------------------------------
Operating expenses,
net (652.4) (30.1) (682.5)
-------------------------------------------------------------------
EBITDA 46.6 - 46.6
Depreciation (21.1) - (21.1)
Amortization - (30.1) (30.1)
-------------------------------------------------------------------
Operating profit
(loss) 25.5 (30.1) (4.6)
------------------------------------------------------------------
Share of operating
results of joint
ventures (28.9) - (28.9)
Joint ventures'
goodwill
amortization(b) - (1,034.2) (1,034.2)
Amounts written off
fixed asset
investments - (60.0) (60.0)
Loss on ordinary
activities before
interest and taxation (3.4) (1,124.3) (1,127.7)
-----------------------------------------------------------------
Interest receivable
and similar income 4.4 - 4.4
Interest payable and
similar charges (39.9) - (39.9)
Loss on ordinary
activities before
taxation (38.9) (1,124.3) (1,163.2)
-----------------------------------------------------------------
Taxation (charge)
credit 0.1 (95.6) (95.5)
Loss on ordinary
activities after
taxation (38.8) (1,219.9) (1,258.7)
-----------------------------------------------------------------
Equity dividends
- paid and
proposed -
Retained loss (1,258.7)
-----------------------------------------------------------------
Loss per share
- basic and
diluted (2.1p) (64.6p) (66.7p)
----------------------------------------------------------------
Before Three
goodwill Goodwill months
and and ended
exceptional exceptional December
items items 31, 2000
as restated as restated Total as restated
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------
Turnover: Group and
share of joint
ventures 624.4 - 624.4
Less: share of joint
ventures' turnover (58.7) - (58.7)
Group turnover 565.7 - 565.7
-------------------------------------------------------------
Operating expenses,
net (551.3) (12.5) (563.8)
------------------------------------------------------------
EBITDA 28.8 - 28.8
Depreciation (14.4) - (14.4)
Amortization - (12.5) (12.5)
------------------------------------------------------------
Operating profit
(loss) 14.4 (12.5) 1.9
-------------------------------------------------------------
Share of operating
results of joint
ventures (61.3) - (61.3)
Joint ventures'
goodwill
amortization(b) - (19.4) (19.4)
Amounts written off
fixed asset
investments - (24.5) (24.5)
Loss on ordinary
activities before
interest and taxation (46.9) (56.4) (103.3)
-------------------------------------------------------------
Interest receivable
and similar income 6.4 - 6.4
Interest payable and
similar charges (39.7) - (39.7)
Loss on ordinary
activities before
taxation (80.2) (56.4) (136.6)
----------------------------------------------------------
Taxation (charge)
credit 3.6 - 3.6
Loss on ordinary
activities after
taxation (76.6) (56.4) (133.0)
----------------------------------------------------------
Equity dividends
- paid and
proposed -
Retained loss (133.0)
----------------------------------------------------------
Loss per share
- basic and
diluted (4.2p) (3.0p) (7.2p)
----------------------------------------------------------
(a) US Dollar equivalents are provided for reader convenience at
the December 31, 2001 exchange rate of (pound)1 = $1.4489
(b) Included within joint ventures' goodwill amortization of
(pound)1,034.2 million ($1,498.5 million) for the 2001/2002
half year is (pound)984.9 million ($1,427.0 million) in
respect of an impairment of KirchPayTV goodwill (see note 9).
Consolidated Statement of Total Recognized Gains and Losses for the
half year ended December 31, 2001
2000/2001
2001/2002 2001/2002 Half year 2000/2001
Half year Half year as restated Full year
$m(1) (pound)m (pound)m (pound)m
Notes (unaudited) (unaudited) (unaudited) (audited)
----- ---------- ---------- ----------- ---------
Loss for the period 11 (1,961.1) (1,353.5) (260.1) (538.6)
Net loss on
deemed disposals - - (20.6) (20.7)
Translation
differences on
foreign currency
net investment 11 2.0 1.4 3.2 (2.1)
Total gains and
losses relating
to the period (1,959.1) (1,352.1) (277.5) (561.4)
-------- -------- --------- ---------
Prior year
adjustment 5 - 148.7 150.5
Total gains and
losses recognized
since the
last annual report (1,959.1) (1,352.1) (128.8) (410.9)
-------- -------- --------- ---------
(1) US Dollar equivalents are provided for reader convenience at
the December 31, 2001 exchange rate of (pound)1 = $1.4489 The
accompanying notes are an integral part of this consolidated
statement of total recognized gains and losses.
Consolidated Balance
Sheet as at December 31, 2001
Dec. 31,
Dec. 31, Dec. 31, 2000 June 30,
2001 2001 as restated 2001
$m(1) (pound)m (pound)m (pound)m
Notes (unaudited) (unaudited) (unaudited) (audited)
----- ---------- ---------- ---------- ---------
Fixed assets
Intangible assets 8 1,035.2 714.5 256.6 789.3
Tangible assets 455.5 314.4 247.2 315.4
Investments 9 158.2 109.2 1,483.8 1,305.9
1,648.9 1,138.1 1,987.6 2,410.6
------- ------- ------- -------
Current assets
Stocks 940.2 648.9 483.2 424.1
Debtors: Amounts
falling due
within one year 755.5 521.4 506.8 493.4
Debtors: Amounts
falling due after
more than one year 314.3 216.9 386.7 324.6
Cash at bank
and in hand 125.3 86.5 42.4 223.6
2,135.3 1,473.7 1,419.1 1,465.7
------- ------- ------- -------
Creditors: Amounts
falling due
within one year
- short-term
borrowings (3.8) (2.6) (0.1) (2.1)
- other creditors (1,359.8) (938.5) (994.9) (988.7)
(1,363.6) (941.1) (995.0) (990.8)
-------- ------- -------- --------
Net current assets 771.7 532.6 424.1 474.9
-------- ------- -------- --------
Total assets less
current liabilities 2,420.6 1,670.7 2,411.7 2,885.5
-------- ------- ------- -------
Creditors: Amounts
falling due after
more than one year
- long-term
borrowings (2,777.6) (1,917.1) (1,482.2) (1,768.0)
- other creditors (17.5) (12.1) (17.1) (13.9)
(2,795.1) (1,929.2) (1,499.3) (1,781.9)
-------- -------- -------- --------
Provisions for
liabilities
and charges 10 (22.6) (15.6) (123.2) (43.0)
Total net
(liabilities) assets (397.1) (274.1) 789.2 1,060.6
-------- -------- -------- --------
Capital and
reserves - equity
Called-up
share capital 11 1,371.1 946.3 924.2 944.4
Share premium 11 3,484.3 2,404.8 2,217.7 2,377.6
Shares to be issued 11 372.2 256.9 - 256.9
Merger reserve 11 440.8 304.2 240.0 340.8
Profit and
loss account 11 (6,065.5) (4,186.3) (2,592.7) (2,859.1)
Total shareholders'
(deficit) funds 11 (397.1) (274.1) 789.2 1,060.6
-------- -------- -------- --------
(1) US Dollar equivalents are provided for reader convenience at
the December 31, 2001 exchange rate of (pound)1 = $1.4489 The
accompanying notes are an integral part of this consolidated
balance sheet.
Consolidated Cash Flow Statement for
the half year ended December 31, 2001
2001/2002 2001/2002 2000/2001 2000/2001
Half year Half year Half year Full year
$m(1) (pound)m (pound)m (pound)m
Notes (unaudited) (unaudited) (unaudited)(audited)
----- ---------- ---------- ---------- ---------
Net cash
(outflow) inflow
from operating
activities 12a (257.8) (177.9) (86.0) 38.9
Returns on
investments
and servicing
of finance
Interest received
and similar income 9.7 6.7 8.2 4.6
Interest paid
and similar
charges on
external financing (99.8) (68.9) (62.7) (118.6)
Interest element
of finance
lease payments (0.3) (0.2) (0.5) (1.7)
Net cash outflow
from returns
on investments and
servicing of finance (90.4) (62.4) (55.0) (115.7)
------- ------- ------ -------
Taxation
Consortium
relief paid - - (16.2) (16.2)
Net cash outflow
from taxation - - (16.2) (16.2)
------- ------- ------ -------
Capital expenditure
and financial
investment
Payments to
acquire tangible
fixed assets (71.4) (49.3) (46.5) (133.3)
Payments to
acquire fixed
asset investments - - (25.0) (25.5)
Receipts from
sales of fixed
asset investments 0.6 0.4 - -
Receipts from
sales of
intangible assets 0.9 0.6 - 0.2
Purchase
of own shares (9.7) (6.7) - -
Net cash outflow
from capital
expenditure and
financial investment (79.6) (55.0) (71.5) (158.6)
------- ------- ------ -------
Acquisitions
and disposals
Purchase of
subsidiary
undertakings - - - (27.3)
Net cash acquired
with subsidiary
undertakings - - 5.0 11.7
Funding to
joint ventures (4.8) (3.3) (74.1) (137.3)
Repayments of
funding from
joint ventures 2.8 1.9 - -
Net cash outflow
from acquisitions
and disposals (2.0) (1.4) (69.1) (152.9)
------- ------- ------ -------
Net cash outflow
before management
of liquid resources
and financing (429.8) (296.7) (297.8) (404.5)
------- ------- ------ -------
Management of liquid
resources Decrease
in short-term
deposits 12b 80.1 55.3 155.0 85.0
------- ------- ------ -------
Financing
Proceeds from
issue of
ordinary shares 17.1 11.8 4.3 6.5
Payments made on
the issue of
ordinary shares (2.6) (1.8) (1.4) (3.5)
Net increase
in total debt 12b 216.8 149.6 69.8 357.6
Net cash inflow
from financing 231.3 159.6 72.7 360.6
------- ------- ------- -------
(Decrease)
increase in cash 12b (118.4) (81.8) (70.1) 41.1
------- ------- ------- -------
Increase in net debt 12b (415.4) (286.7) (294.9) (401.5)
------- ------- ------- -------
(1) US Dollar equivalents are provided for reader convenience at the December 31, 2001 exchange rate of (pound)1 = $1.4489 The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. notes are an integral part of this consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: cash flow statement. 1 Basis of preparation The interim accounts for the half year ended December 31, 2001 have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting policies consistent with those applied in the accounts for the year ended June 30, 2001, which were approved by the Directors on July July: see month. 24, 2001. The interim accounts for the six months ended December 31, 2001 do not constitute statutory accounts and are unaudited, but have been formally reviewed by Arthur Andersen who have drawn attention in their review report to the fundamental uncertainties over the financing and performance of KirchPayTV and the value of the Group's put option. Arthur Andersen's report is not qualified in this respect. The interim accounts were approved by the Board of Directors on February 7, 2002. The financial information for the 2000/2001 full year is extracted from the accounts for that year which have been filed with the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. . The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985. At December 31, 2001, the Group's balance sheet showed net liabilities of (pound)274.1 million. The Directors consider that the operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of the Group, together with its own bank facilities, will be sufficient to cover the Group's projected operating requirements and to settle or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the Group's other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. as they fall due. Accordingly the interim accounts are prepared on a going concern basis. 2 Turnover The Group's turnover, whilst deriving de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from one class of business, has been analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. as follows:
2001/2002 2000/2001 2000/2001
Half year Half year Full year
(pound)m (pound)m (pound)m
(unaudited)(unaudited) (audited)
---------- ---------- ----------
Direct-To-Home subscribers 904.9 714.7 1,536.7
Cable and DTT subscribers 147.5 146.1 299.1
Advertising 118.1 133.7 270.5
Interactive(1) 91.0 36.6 93.0
Other 59.1 54.9 106.7
1,320.6 1,086.0 2,306.0
------- ------- -------
(1) Interactive income includes income from gaming, online
advertising, internet, e-commerce, interconnect, text services
and Sky Interactive set-top box subsidy recovery.
3 Operating expenses, net
2001/2002
Half year 2001/2002
Before Half year
goodwill and Goodwill and 2001/2002
exceptional exceptional Half year
items items Total
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
----------- ----------- ----------
Programming(1) 657.4 - 657.4
Transmission and
related functions(1) 71.9 - 71.9
Marketing 220.2 - 220.2
Subscriber management 146.5 - 146.5
Administration(2) 107.8 59.8 167.6
Interactive 46.7 - 46.7
1,250.5 59.8 1,310.3
--------- -------- --------
2000/2001
Half year 2000/2001
Before Half year
goodwill and Goodwill and 2000/2001 2000/2001
exceptional exceptional Half year Full year
items items Total Total
(pound)m (pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited) (audited)
----------- ------------- ---------- ---------
Programming(1) 536.2 - 536.2 1,133.8
Transmission and
related functions(1) 55.1 - 55.1 128.6
Marketing 213.3 - 213.3 378.1
Subscriber management 117.6 - 117.6 243.4
Administration(2) 80.4 17.9 98.3 254.0
Interactive 32.8 - 32.8 75.3
1,035.4 17.9 1,053.3 2,213.2
------- ------- ------- -------
(1) The amounts shown are net of (pound)5.0 million (2000/2001:
half year (pound)6.0 million; full year (pound)55.1 million)
receivable from the disposal of programming rights not
acquired for use by the Group, and (pound)11.9 million
(2000/2001: half year (pound)28.7 million; full year
(pound)53.9 million) in respect of the provision to third
party broadcasters of spare transponder capacity.
(2) Administration costs for the full year include goodwill and
exceptional items of (pound)67.4 million.
4 Share of operating results of joint ventures
2001/2002 2000/2001 2000/2001
Half year Half year Full year
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
---------- ---------- ----------
KirchPayTV GmbH
& Co KGaA ("KirchPayTV") 57.1 46.4 116.0
British Interactive
Broadcasting ("BiB") - 52.0 135.4
Programming joint ventures, net 2.7 0.2 4.3
59.8 98.6 255.7
------ ------ ------
This relates to the Group's equity share of the operating results
of the Group's joint ventures.
The Group recognized 32.5% of the results of BiB up until November
2000. From this date, to May 9, 2001, 100% of BiB's losses were
recognized due to the agreement dated July 17, 2000, under which the
Group agreed to provide 100% of BiB's funding after existing funding
had been utilized. From May 9, 2001, the Group fully consolidated BiB
as a subsidiary (see note 9).
In the absence to date of results for KirchPayTV for the period
from July 1, 2001 to December 31, 2001, the results for a similar
period, to September 30, 2001, have been used.
5 Taxation
Analysis of charge in period:
2000/2001
2001/2002 Half year 2000/2001
Half year as restated Full year
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
---------- ---------- ----------
Tax charge (credit) on
profit before exceptional items:
Deferred tax 4.9 1.8 23.3
Share of joint
ventures' tax charge (credit) 0.6 (0.1) -
5.5 1.7 23.3
------ ------ ------
Tax charge - exceptional items:
Deferred tax 95.6 - 0.8
101.1 1.7 24.1
------ ------ ------
The Group adopted FRS 19, Deferred tax, in June 2001 and has
restated the 2000/2001 half year figures accordingly.
Adoption has resulted in the recognition of deferred tax assets in
respect of losses and other timing differences incurred in prior
years, and corresponding restatement of the prior period results.
Following the impairment charge made in respect of the Group's
investment in KirchPayTV (see note 9), there is currently insufficient
evidence to support recognition of a deferred tax asset arising on
losses incurred by certain UK companies. Accordingly, this asset has
been written off as at December 31, 2001, although the Directors do
expect it ultimately to be recovered in full.
6 Dividends
No interim dividend is proposed (2000/2001: half year nil; full
year nil).
7 Loss per share
Basic and diluted loss per share represents the loss attributable
to the equity shareholders divided by the weighted average number of
Ordinary Shares in issue during the period of 1,886,064,965
(2000/2001: half year 1,839,868,141; full year 1,847,057,433).
8 Intangible assets
The movement in the period was as follows:
Goodwill Other Total
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
---------- ----------- ----------
Net book value at July 1, 2001 788.4 0.9 789.3
Fair value adjustments
to BiB provisional goodwill (24.3) - (24.3)
Disposals - (0.7) (0.7)
Amortization (59.8) - (59.8)
Release of provision for
loss on disposal of subsidiary 10.0 - 10.0
Net book value at December 31, 2001 714.3 0.2 714.5
------ ------ ------
Goodwill of (pound)272.4 million arising on the acquisition of SIG
is being amortized over a period of 7 years on a straight-line basis.
Provisional goodwill of (pound)540.6 million arising on the
acquisition of BiB is being amortized over a period of 7 years on a
straight-line basis. Provisional goodwill of (pound)5.2 million
arising on the acquisition of WAP TV is being amortized over a period
of 7 years on a straight-line basis.
On October 16, 2001, the Group and Ladbrokes, the betting and
gaming division of Hilton Group plc, announced that they had
discontinued negotiations relating to a proposed joint venture to
offer a fixed odds betting service on Sky Sports channels and other
media. As a result, the provision for loss on disposal of a subsidiary
has been written back.
9 Fixed asset investments
December 31, December 31, June 30,
2001 2000 2001
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
----------- ----------- ---------
Joint ventures:
- KirchPayTV - 1,283.5 1,142.1
- BiB - 20.0 -
- Programming joint ventures 22.3 23.9 21.6
Total investments in joint ventures 22.3 1,327.4 1,163.7
------ ------- -------
Investment in own shares 22.0 19.1 19.1
Other investments 64.9 137.3 123.1
Total investments 109.2 1,483.8 1,305.9
------ ------- -------
KirchPayTV The charge of (pound)1,083.4 million in the half year period to December 31, 2001 in respect of joint ventures goodwill amortization includes an impairment charge of (pound)984.9 million in respect of the Group's interest in KirchPayTV (see below). The Directors believe that the Group's investment in KirchPayTV is impaired and have therefore made an impairment charge of (pound)984.9 million in respect of the carrying value of the goodwill in KirchPayTV. The ongoing losses experienced by KirchPayTV, the Group's concerns over the adequacy of funding in place to support KirchPayTV's business plan for the 12 month period from the date of announcing these financial statements, and the Group's evaluation of limited information it has received from KirchPayTV regarding the expected financial effects of certain strategic, operational and management decisions made by KirchPayTV, do not at present provide the Group with sufficient confidence that the value of KirchPayTV is able to support the carrying value of the Group's investment in KirchPayTV. The Group has the right to exercise a put option in respect of its stake in KirchPayTV, and has therefore considered whether the put option could be used to support the carrying value of the Group's investment in KirchPayTV. The put option becomes exercisable from October 1, 2002, or earlier in certain circumstances, if no initial public offering of KirchPayTV has occurred before then. If the put option were exercised, Taurus Holding (formerly known as Kirch Holding), KirchPayTV's largest shareholder, would be required to pay Euro 1.3 billion in cash, an amount equal to the cost of acquisition at the time the Group entered into the investment agreement, plus compound interest at 12%. The Group has not been able to obtain any evidence to its satisfaction that the resources of Taurus Holding will be sufficient to satisfy the put option if exercised. The Group has also requested detailed information from the Kirch Gruppe in order to allow it to evaluate its options. However, the Group has not yet received all of the information requested. Therefore, due to the lack of sufficient information from any source over the realizability of contractual payments specified by the put option, the Directors are currently unable to determine the amount, if any, likely to be received in the event of exercising the put option. Given the uncertainties described above, the Directors consider the most appropriate accounting treatment is to write down the carrying value of its investment in KirchPayTV to nil. If these uncertainties are resolved in future accounting periods, the write down of (pound)984.9 million may be partially or wholly reversed under UK GAAP. The Group's share of KirchPayTV's operating losses has been extracted from financial statements prepared by KirchPayTV's management on a going concern basis. KirchPayTV management has informed the Group that its auditors, KMPG, have not provided a SAS71 review on the results of KirchPayTV for the six months to September 30, 2001, principally due to KPMG's questioning of the appropriateness of the going concern basis for the financial statements. A shareholder, other than the Group, has committed to provide temporary financing up to a specified maximum, until such time as additional financing may be obtained, for a period expiring on June 30, 2002. However, the Group has concerns over the adequacy of the funding in place to support KirchPayTV's business plan. Arthur Andersen have drawn attention in their review report to the fundamental uncertainties over the financing and performance of KirchPayTV and the value of the Group's put option. Arthur Andersen's report is not qualified in this respect. On August 31, 2000, KirchPayTV disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of their remaining 58 million holding of BSkyB BSkyB British Sky Broadcasting shares. The Group's share of the loss on disposal was (pound)69.5 million. The loss was calculated as BSkyB's share of the difference between the balance sheet value of the 58 million shares at (pound)15.21 per share (based on the value of the shares at the date of acquisition of 24% of KirchPayTV by BSkyB) and the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). realized by KirchPayTV of (pound)10.05 per share. BiB The Group recognized 32.5% of the results of BiB up until November 2000, from which date 100% of BiB's losses were recognized due to the arrangement dated July 17, 2000, under which the Group agreed to provide 100% of BiB's funding after existing funding had been utilized. Following the acquisition of a further 47.6% of BiB on 9 May 2001, the results of BiB have been fully consolidated within the Group. As a result BiB was consolidated from May 9, 2001. On June 28, 2001, the Group acquired the remaining 19.9%, increasing the Group's interest to 100%. Investment in own shares During the period, the Trustees of the Group's employee ownership trust ("ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). "), as authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the Board, purchased 900,000 of the Company's Ordinary Shares in the open market, funded by a loan from the Company. These shares will be utilized, together with shares already held by the ESOP, to satisfy the exercise of employee share options and share awards under certain long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. incentive schemes. At December 31, 2001, the ESOP held 3.6 million Ordinary Shares in the Company at an average value of (pound)6.12 per share, primarily to hedge the obligations of the Group then outstanding under various share option schemes against further increases in the Company's share price. Other investments At December 31, 2001, the Group has made a provision against its minority equity investments in football clubs leading to a non-cash exceptional charge of (pound)60.0 million. At December 31, 2000, (pound)24.5 million was provided against minority investments in new media companies of which (pound)24.0 million related to investments held by the Group and (pound)0.5 million related to investments held by the BiB joint venture. An additional (pound)15.5 million was provided against these investments at March 31, 2001. This brought the carrying value of the Group's minority investments in new media companies to nil. At June 30, 2001, the provision was reduced by (pound)1.4 million to reflect the post year end disposal of the Group's unlisted investment in Static 2358 Limited, which the Group disposed of on July 2, 2001 for total consideration of (pound)3.7 million, comprising a mixture of cash and shares in Open TV. The Group made a profit on disposal of (pound)2.3 million.
10 Provisions for liabilities and charges
Sky In-Home
Analogue Service Limited Sky Interactive
termination Transition reorganization reorganization
provision provision provision provision
(pound)m (pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------
At beginning
of period 8.2 18.6 0.4 15.5
Charged to
profit and loss
account - - - -
Subsidiary
acquired - - - -
Utilized in period (3.3) (18.6) (0.1) (5.2)
At end of period 4.9 - 0.3 10.3
Provision for December 31, December 31, June 30,
closure of 2001 2000 2001
Sky Pictures Total Total Total
(pound)m (pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited) (audited)
----------------------------------------------------------------------
At beginning
of period 0.3 43.0 225.5 225.5
Charged to
profit and loss
account - - - 12.4
Subsidiary
acquired - - - 3.4
Utilized in period (0.2) (27.4) (102.3) (198.3)
At end of period 0.1 15.6 123.2 43.0
------------------------------------------------------------
The analogue termination provision principally comprises the cost
of early termination of analogue transponder leases and various other
costs incurred in terminating the Group's analogue operations.
The transition provision utilized during the period of (pound)18.6
million (2000/2001: half year (pound)95.1 million; full year
(pound)174.3 million) is net of (pound)2.2 million (2000/2001: half
year (pound)14.1 million; full year (pound)21.2 million) of
installation income received from subscribers. The transition
provision comprised the cost of the set-top box, installation costs,
Sky Interactive set-top box subsidy costs and various other costs
incurred in enabling a subscriber to use the digital service, less any
upfront income received from the subscriber.
The Sky In-Home Service Limited reorganization provision
principally comprises the costs of staff redundancies.
The Sky Interactive reorganization provision relates to costs
associated with the reorganization and consolidation of all
interactive and online activities within the division 'Sky
Interactive'. The post acquisition provision principally comprises the
cost of termination of certain contracts, the closure of duplicate
sites and a reduction in headcount.
The Sky Pictures provision principally comprises the cost of a
reduction in headcount.
11 Reconciliation of movement in shareholders' funds (deficit)
Share Share Shares to
capital premium be issued
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
--------------------------------------------------------
At July 1, 2001 944.4 2,377.6 256.9
Issue of
share capital 1.9 29.0 -
Share issue
costs - (1.8) -
Loss for the
period - - -
Transfer from
merger reserve - - -
Translation
differences on
foreign
currency
net investment - - -
At December
31, 2001 946.3 2,404.8 256.9
Profit Total
Merger and loss shareholders'
reserve account funds (deficit)
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
--------------------------------------------------------------
At July 1, 2001 340.8 (2,859.1) 1,060.6
Issue of
share capital - (11.7) 19.2
Share issue
costs - - (1.8)
Loss for the
period - (1,353.5) (1,353.5)
Transfer from
merger reserve (36.6) 36.6 -
Translation
differences on
foreign
currency
net investment - 1.4 1.4
At December
31, 2001 304.2 (4,186.3) (274.1)
During the period the Company issued shares with a market value of
(pound)30.9 million (2000/2001: half year (pound)9.7 million; full
year (pound)15.6 million) in respect of the exercise of options
awarded under various share option schemes, with (pound)11.8 million
(2000/2001: half year (pound)4.3 million; full year (pound)6.5
million) received from employees.
12a Reconciliation of operating profit to operating cash flows
2001/2002 2000/2001 2000/2001
Half year Half year Full year
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
----------------------------------------------------------
Operating profit 10.3 32.7 92.8
Depreciation 41.0 27.1 71.1
Goodwill
amortization 59.8 17.9 44.3
Increase in
working capital (261.6) (73.8) (6.7)
Provisions utilized,
net (27.4) (89.9) (162.6)
Net cash (outflow)
inflow from
operating
activities (177.9) (86.0) 38.9
-------------------------------------------------------
12b Analysis of changes in net debt
As at As at
July 1, December 31,
2001 Cash flow 2001
(pound)m (pound)m (pound)m
(audited) (unaudited) (unaudited)
--------------------------------------------------------
Overnight
deposits 91.9 (64.5) 27.4
Other cash 61.7 (17.3) 44.4
153.6 (81.8) 71.8
--------------------------------------------------------
Short-term
deposits 70.0 (55.3) 14.7
Cash at bank
and in hand
less bank
overdrafts 223.6 (137.1) 86.5
--------------------------------------------------------
Debt due after
more than one year (1,759.1) (150.0) (1,909.1)
Finance leases (11.0) 0.4 (10.6)
Total debt (1,770.1) (149.6) (1,919.7)
--------------------------------------------------------
Total net debt (1,546.5) (286.7) (1,833.2)
--------------------------------------------------------
13 EBITDA
EBITDA (Earnings before interest, tax, depreciation and
amortization) is calculated as operating profit before depreciation
and amortization of goodwill and intangible assets.
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