Final Results - Part 2

TBI PLC 26 June 2001 PART 2 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2001 1. SEGMENTAL INFORMATION Business analysis In the segmental information provided below, Airport Ownership relates to airports which are either owned or operated under long term agreements. Restated 2001 2000 £'000 £'000 Group turnover Airport Ownership Traffic income 54,995 46,735 Commercial income 16,914 15,031 Tenant income 9,430 7,368 Airport Services 32,355 13,452 Airport Management 3,125 1,721 116,819 84,307 Property - 5,390 Other operations 8,289 6,405 125,108 96,102 Gross profit Airport Ownership Traffic income 54,995 46,735 Commercial income 16,914 15,031 Tenant income 9,430 7,368 Airport Services 4,254 2,628 Airport Management 3,037 1,490 88,630 73,252 Property - 3,253 Other operations 6,808 5,649 95,438 82,154 Group operating profit before depreciation, amortisation and reorganisation costs Airport Ownership 34,141 29,764 Airport Services 1,693 1,803 Airport Management 1,787 1,178 37,621 32,745 Property - 2,772 Other operations 308 1,318 Head office costs (6,853) (6,252) Non-recurring items 417 - 31,493 30,583 1. SEGMENTAL INFORMATION (CONTINUED) Business analysis (continued) Restated 2001 2000 £'000 £'000 Depreciation Airports (4,059) (3,351) Property - (104) Other operations (1,000) (708) Head office costs (499) (237) (5,558) (4,400) Amortisation of intangible assets Airports (4,624) (2,093) (4,624) (2,093) Reorganisation costs and other non-recurring items Airports 903 (1,505) Other operations (486) - Non-recurring items (417) - - (1,505) Group operating profit Airports 29,841 25,796 Property - 2,668 Other operations (1,178) 610 Head office costs (7,352) (6,489) 21,311 22,585 Profit/(loss) on ordinary activities before taxation Airports 28,935 25,004 Property - 2,621 Other operations (1,178) 610 Head office costs (7,352) (6,489) Exceptional items - (20,479) Net interest (7,228) (5,638) 13,177 (4,371) The exceptional items in 2000 included in the profit/(loss) on ordinary activities before taxation table above, represent the profit on the sale of 29% of Northern Territory Airports of some £1.0 million, and the loss on sale of the property business of some £21.5 million. All results in 2001 derive from continuing operations. Property operations were discontinued in 2000. The profit on ordinary activities before taxation, amortisation and exceptional and non-recurring items from continuing operations is analysed as follows: Restated 2001 2000 £'000 £'000 Profit on ordinary activities before taxation (2000: Note 5) 13,177 15,582 Exceptional and non-recurring items 1,522 513 Amortisation 4,624 2,093 19,323 18,188 1. SEGMENTAL INFORMATION (CONTINUED) The Group operating profit before reorganisation costs for the year ended 31 March 2000 is analysed as follows: Restated Restated Continuing Discontinued Total operations operations £'000 £'000 £'000 Turnover 90,712 5,390 96,102 Gross profit 78,901 3,253 82,154 Administrative expenses, excluding depreciation and amortisation of intangible assets (51,090) (481) (51,571) Operating profit before depreciation and 27,811 2,772 30,583 amortisation of intangible assets Depreciation (4,296) (104) (4,400) Amortisation of intangible assets (2,093) - (2,093) Group operating profit before reorganisation 21,422 2,668 24,090 costs Restated 2001 2000 £'000 £'000 Net assets Airports 469,486 316,458 Other operations 23,927 32,263 Net debt (Note 7) (184,277) (77,987) 309,136 270,734 Other operations include an hotel, an aircraft and unallocated head office assets and liabilities. Geographical analysis (origin and destination) Restated 2001 2000 £'000 £'000 Turnover United Kingdom 65,189 64,159 Rest of Europe 4,032 4,552 North America 44,273 22,255 South America 11,614 5,136 125,108 96,102 Profit before interest and taxation United Kingdom* 17,261 20,649 Rest of Europe (1,573) (770) North America 1,650 280 South America 2,702 1,531 Australasia** 365 1,048 20,405 22,738 * In the year to 31 March 2000, this excludes the loss on sale of the property business of some £21.5 million. ** In the year to 31 March 2000, this includes the profit of some £1.0 million arising on the Group's disposal of 29.1% of Northern Territory Airport PTY Limited. Net assets United Kingdom 161,486 136,676 Rest of Europe 27,098 25,290 North America 94,222 79,975 South America 2,364 1,069 Australasia 23,966 27,724 309,136 270,734 2 . NET INTEREST PAYABLE 2001 2000 £'000 £'000 Interest payable and similar charges Continuing operations Interest payable on bank and similar loans 8,988 8,663 Interest on finance lease and hire purchase arrangements 540 586 Bank charges 266 29 Group's share of joint ventures' interest charges 1,334 692 Write off of unamortised issue costs on bank facilities 494 - replaced by the new facilities in respect of the acquisition of LLAG 11,622 9,970 Discontinued operations Interest payable on bank and similar loans - 632 Debenture interest - 442 Interest on finance lease and hire purchase arrangements - 2 Bank charges - 48 - 1,124 Total 11,622 11,094 Interest receivable and similar income Continuing operations Short term deposits and corporate bonds 1,983 3,426 Interest receivable from other investments 2,411 2,009 4,394 5,435 Discontinued operations Short term deposits and corporate bonds - 21 Total 4,394 5,456 Net interest payable Continuing operations 7,228 4,535 Discontinued operations - 1,103 Total 7,228 5,638 In addition to the interest payable on bank and similar loans above, an amount of £nil (2000: £675,000) was capitalised. The net interest expense relating to discontinued operations in the year ended 31 March 2000 represents interest on loans and deposits specifically attributed to the Group's property business. 3. TAXATION 2001 2000 The charge for taxation is made up as follows: £'000 £'000 Continuing operations Airport and other operations Current year UK corporation tax at 30% 2,365 3,345 Deferred taxation - 155 Overseas taxation 1,304 724 Prior years UK corporation tax (167) (582) Deferred taxation - 568 3,502 4,210 Discontinued operations Property and other operations Current year UK corporation tax at 30% - (3,478) Total 3,502 732 As at 31 March 2001, losses estimated at £13 million (2000: £20 million) were available to be carried forward for taxation purposes and offset against future taxable profits. The taxation relating to discontinued operations in 2000 principally represents taxation assessed in respect of the companies engaged in the Group's property operations. 4. DIVIDENDS 2001 2000 2001 2000 Pence per share Pence per share £'000 £'000 Interim dividend - paid 0.70 0.60 3,557 2,652 Final dividend - proposed 1.60 1.40 8,129 7,107 2.30 2.00 11,686 9,759 5. EARNINGS PER SHARE Earnings per share have been calculated in accordance with FRS 14, 'earnings per share', by dividing the profit/(loss) attributable to shareholders for the year by the weighted average number of ordinary shares in issue during the year, based on the following information: Restated Year Year ended ended 31 March 31 March 2001 2000 Profit/(loss) attributable to shareholders (£'000) 9,675 (5,103) Earnings from continuing operations (£'000) 9,675 11,372 Earnings from continuing operations before amortisation and 15,821 13,978 exceptional and non-recurring items (£'000) Basic weighted average share capital (number of shares, 509 476 million) Diluted weighted average share capital (number of shares, 510 479 million) The difference between the basic and the diluted weighted average number of shares is wholly attributable to outstanding share options. 5. Earnings per share (continued) The calculation of earnings per share from continuing operations for the year ended 31 March 2000 is based on the following analysis: Continuing operations Restated Year ended 31 March 2001 £'000 Turnover 90,712 Operating profit before reorganisation costs 20,630 Non-recurring items (513) Profit on ordinary activities before interest and taxation 20,117 Net interest payable (4,535) Profit on ordinary activities before taxation 15,582 Taxation on profit on ordinary activities (4,210) Profit for the financial year 11,372 Discontinued operations Turnover 5,390 Operating profit before reorganisation costs 2,668 Non-recurring items* (21,518) Loss on ordinary activities before interest and taxation (18,850) Net interest payable (1,103) Loss on ordinary activities before taxation (19,953) Taxation on loss on ordinary activities 3,478 Loss for the financial year (16,475) Total operations Loss for the financial year (5,103) * This relates to the loss on the sale of the property business and the loss on sale of investment properties. The calculation of earnings per share from continuing operations before amortisation and exceptional and non-recurring items is based on the following analysis: Restated Year ended Year ended 31 March 2001 31 March 2000 £'000 £'000 Profit for the financial year 9,675 11,372 Exceptional and non-recurring items 1,522 513 Amortisation 4,624 2,093 15,821 13,978 6. PRINCIPAL ACQUISITIONS LLAG During the year, the Group acquired an additional 46.4% of the issued share capital of LLAG. The fair value attributed to the assets and liabilities acquired and the goodwill arising on the transaction was accounted for in accordance with the acquisition accounting methodology and in accordance with FRS 7, 'fair value in acquisition accounting'. Date of acquisition 21 March 2001 Fair value of consideration - all cash £58.5 million Costs of acquisition £3.1 million Cost of acquiring equity £50.2 million Cost of acquiring Loan Stock £8.3 million LLAG unaudited consolidated balance Fair value Fair sheet as at value 21 March Accounting adjustments to 2001 policy alignment the Group Note £'000 £'000 £'000 £'000 Tangible fixed assets (a) 81,846 (975) 372 81,243 Intangible assets (b) 8,617 (5,866) (2,751) - Stock 162 - - 162 Debtors 5,535 - - 5,535 Short term deposit 4,200 - - 4,200 Cash 65 - - 65 Creditors: due within one year (15,445) - -(15,445) Provisions for reorganisation (1,939) - - (1,939) Other provisions for liabilities and charges (c) (3,306) - (4,348) (7,654) Bank loans (d) (67,678) - (6,226)(73,904) Shareholder loans (17,952) - -(17,952) Net liabilities acquired (5,895) (6,841) (12,953)(25,689) £'000 £'000 Additional 46.4% equity Consideration for additional 50,205 46.4% equity Net liabilities acquired at (11,920) 46.4% 62,125 Goodwill arising Conversion of existing 25.0% equity Cost of investment in LLAG 3,697 Less - 25% of Loan Stock (4,488) acquired Add - equity accounted results of LLAG whilst part of the Group 3,717 2,926 Net liabilities acquired at (6,422) 25.0% Goodwill arising 9,348 Costs of acquisition 3,132 Total goodwill 74,605 Given the proximity of the LLAG acquisition to the year end, the above fair value adjustments are provisional and will be subject to a further review during the year to 31 March 2002. Significant fair value adjustments (a) This adjustment predominantly represents the inclusion of fixed assets not previously recorded. (b) This adjustment arises from a reassessment of prepayments. (c) This adjustment represents unrecorded liabilities at the date of acquisition. Some of these amounts are in respect of claims, the outcome of which is uncertain. In addition, the removal of the deferred tax provision given the losses incurred by LLAG is also reflected. (d) This represents the adjustment necessary in order to reflect the fair value of the bank loan. Period from 1 April Year ended 2000 to 21 March 31 March 2001 2000 £'000 £'000 Summarised profit and loss account of LLAG Turnover 56,772 50,898 Operating profit before exceptional items 2,156 3,427 Exceptional items (5,781) - (Loss)/profit on ordinary activities before (8,954) 510 taxation (Loss)/profit after taxation (8,954) 360 The results of LLAG for the period from 21 March 2001 to 31 March 2001 are not consolidated in the results of the Group on the grounds of materiality. 7. ANALYSIS OF NET DEBT Debt Debt Finance due due lease Loan Other one after and hire note bank Sub within one purchase Cash receivable depo- total year year arrange- Total sits ments £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 31 March 936 20,000 12,516 33,452 (8,582) (95,170) (7,687) (77,987) 2000 Cashflow 3,048 - 6,287 9,335 187,355 (225,405) 1,979 (26,736) Acquisitions - - 4,200 4,200 - (79,038) - (74,838) Non-cash changes - - - - (181,463) 180,727 (1,291) (2,027) Exchange 79 - 580 659 (184) (3,164) - (2,689) movements At 31 March 2001 4,063 20,000 23,583 47,646 (2,874) (222,050) (6,999) (184,277) At 31 March 4,240 - 6,796 11,036 (11,070) (178,728) (8,429) (187,191) 1999 Cashflow (3,262) - 5,299 2,037 19,115 89,970 1,733 112,855 Acquisitions - - 360 360 (16,114) (6,690) - (22,444) Non-cash changes - 20,000 - 20,000 4 (4) (991) 19,009 Exchange movements (42) - 61 19 (517) 282 - (216) At 31 March 2000 936 20,000 12,516 33,452 (8,582) (95,170) (7,687) (77,987) ADDITIONAL FINANCIAL INFORMATION 2001 2000 £'000 £'000 Total operating profit before amortisation, depreciation and exceptional and non-recurring items Belfast International 18,093 17,664 Cardiff International 12,123 9,713 Orlando Sanford 1,602 873 Stockholm Skavsta (858) (111) Bolivia 3,468 1,625 Costa Rica (287) - Airport Services 1,693 1,803 Airport Management - North America 892 516 - Australia and London Luton Airport 895 662 - Share of operating result of joint ventures - Australia - 102 - Share of operating result of joint ventures - London Luton Airport 539 (894) Total - airports division 38,160 31,953 Other operations 308 1,318 Property - 2,772 Head office (6,853) (6,252) Total operating profit before amortisation, depreciation, and exceptional and non-recurring items 31,615 29,791 Exceptional and non-recurring items (1,028) (1,505) Depreciation (5,558) (4,400) Amortisation (4,624) (2,093) Profit before interest, taxation and non-recurring items 20,405 21,793 Non-recurring items including non-recurring interest items (494) (20,526) Net interest payable excluding non-recurring interest items (6,734) (5,638) Profit/(loss) on ordinary activities before taxation 13,177 (4,371) Taxation on profit/(loss) on ordinary activities (3,502) (732) Profit/(loss) attributable to shareholders 9,675 (5,103) Profit attributable to shareholders from continuing operations before amortisation and exceptional and non-recurring items (Note 5) 15,821 13,978 Earnings per share attributable to shareholders from continuing operations before amortisation and exceptional and non-recurring items 3.11p 2.94p AIRPORT OPERATIONAL INFORMATION Airport ownership with a controlling interest 31 March 31 March 31 March 31 March 31 March 31 March 2001 2000 2001 2000 2001 2000 Belfast International Cardiff International Orlando Sanford Airport Airport Total passengers Charter 817,293 768,962 1,149,150 988,077 879,896 860,555 Schedule 2,338,261 2,318,018 376,513 319,852 135,802 22,728 Transit 19,549 24,759 20,941 29,322 176,592 113,218 Total 3,175,103 3,111,739 1,546,604 1,337,251 1,192,290 996,501 Terminal Passengers Spend per head £2.23 £2.18 £2.55 £2.78 £3.54 £3.36 Net passenger supplement per head £4.54 £4.54 £5.99 £5.63 £1.21 £1.21 Total £6.77 £6.72 £8.54 £8.41 £4.75 £4.57 Charter services Number of tour 23 22 32 28 19 16 operators Number of seats (capacity) 940,000 880,000 1,289,361 1,135,721 927,000 905,000 New charter 2 3 1 - 4 - destinations Scheduled services Number of major 10 11 5 4 1 1 airlines Number of seats (capacity) 3,350,000 3,180,000 655,369 542,151 326,012 75,394 Freight tonnage 47,100 41,474 3,569 3,091 11,332 9,775 Some of the direct services from Belfast International Airport - Aberdeen, Amsterdam, Birmingham, Brussels, Cardiff, East Midlands, Edinburgh, Glasgow, Jersey, Liverpool, London Heathrow, London Luton, London Stansted, Manchester, New York and Shannon. Some of the services from Cardiff International Airport - Amsterdam, Brussels, Dublin, Glasgow, Edinburgh, Orlando, Paris and Toronto. Some of the services from Orlando Sanford - Acapulco, Allentown, Atlantic City, Aruba, Bahamas, Belfast, Birmingham, Bristol, Cardiff, Dublin, East Midlands, Edinburgh, Gary, Glasgow, Gulfport, Humberside, London Gatwick, London Luton, Manchester, Memphis, Mexico City, Newcastle, Pittsburg, Portsmouth, Puerto Vallaria, Shannon, St Louis, Teesside and Worchester. Airport ownership with a controlling interest (continued) 31 March 31 March 31 March 31 March 31 March 31 March 2001 2000 2001 2000 2001 2000 Stockholm Skavsta Bolivian Airports London Luton Airport Airport Total passengers Charter 3,680 13,839 - - 1,364,715 1,349,361 Schedule 265,415 236,060 1,017,876 1,035,920 4,966,540 4,100,714 Transit 8,663 8,308 364,674 389,890 32,735 70,734 Total 277,758 258,207 1,382,550 1,425,810 6,363,990 5,520,809 Terminal Passengers Spend per head £2.32 £1.74 £2.09 £2.28* £3.92** £4.14** Net passenger supplement per head £0.47 £0.47 £3.13 £2.77* £3.58** £3.71** Total £2.79 £2.21 £5.22 £5.05* £7.50** £7.85** Charter services Number of tour operators 1 3 - - 24 22 Number of seats (capacity) 3,706 14,644 - - 1,566,505 1,614,272 New charter destinations 1 - - - 2 1 Scheduled services Number of major airlines 3 2 9 7 7 7 Number of seats (capacity) 399,724 340,272 2,268,600 2,445,000 6,430,481 5,483,041 Freight tonnage 18,777 25,519 4,600 4,000 35,862 32,244 Some of the services from Stockholm Skavsta Airport - London Stansted, Malmo, Preveza and Visby. Some of the services from the Bolivian Airports - Asuncion, Bogota, Buenos Aires, Cancun, Caracas, Lima, Miami, Mexico City, Montevideo, Panama City, Rio de Janeiro, Santiago and Sao Paulo. Some of the services from London Luton Airport - Aberdeen, Alicante, Amsterdam, Athens, Barcelona, Belfast, Dublin, Dusseldorf, Edinburgh, Geneva, Gibraltar, Glasgow, Inverness, Isle of Man, Jersey, Madrid, Malaga, Menorca, Munich, Nice, Palma, Tenerife, Waterford and Zurich. * This information is calculated for the period post acquisition by TBI. ** This information relates to a period prior to the acquisition by TBI. Accounting Policy This preliminary announcement has been prepared on the basis of accounting policies consistent with those set out in the Annual Report and Accounts for the year ended 31 March 2000, except for the introduction of the requirements of UITF 24 'Start Up Costs'. Audit Status The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 31 March 2001 or 31 March 2000. The financial information has however, been extracted from statutory accounts for those years which have been audited. The auditors' reports on those statutory accounts were unqualified. This preliminary announcement was approved by the Board on 25 June 2001.

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