SKY NETWORK TELEVISION ANNUAL RESULTS 2003

Subscribers

0

100,000

200,000

300,000

400,000

500,000

Ju

n-9

1

Ju

n-9

2

Ju

n-9

3

Ju

n-9

4

Ju

n-9

5

Ju

n-9

6

Ju

n-9

7

Ju

n-9

8

Ju

n-9

9

Ju

n-0

0

Ju

n-0

1

Ju

n-0

2

Ju

n-0

3

UHF DBS (Satellite) Wholesale

Subscriber Growth

503.2

7.2

75.4

284.3

136.3

2002

(13.6%)117.7UHF Residential

Total Subscribers

Commercial

DBS Wholesale

DBS (Satellite) Residential

‘000

7.9%542.9

12.5%8.1

1.7%76.7

19.7%340.3

% Change2003

10%12%14%16%18%20%22%24%26%28%30%32%

Jun-98

Oct-98

Feb-99

Jun-99

Oct-99

Feb-00

Jun-00

Oct-00

Feb-01

Jun-01

Oct-01

Feb-02

Jun-02

Oct-02

Feb-03

Jun-03

Moving Annual Churn

1.00%

1.50%

2.00%

2.50%

2001 2002 2003 2004

Churn

2.00

2.50

3.00

3.50

2002 2003 2004

Viewer Hours per Day

$188

$236 $262$300

$345

$391

$0

$50

$100

$150

$200

$250

$300

$350

$400

$NZ

mil

lion

s

1998 1999 2000 2001 2002 2003Year End 30 June

Subscriber Revenue

$48.79

$50.14

$51.83

$47.00

$48.00

$49.00

$50.00

$51.00

$52.00

$N

Z

2001 2002 2003

Total ARPU

$54.41$56.56

$59.35

$42.55

$42.06

$40.36

$37.36

$36.09

$36.94

$20.00

$30.00

$40.00

$50.00

$60.00

$NZ

Satellite UHF Wholesale

2001 2002 2003

ARPU

$8.6$10.7 $11.6

$12.6$16.5 $19.6

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

$NZ

mil

lion

s

1998 1999 2000 2001 2002 2003Year End 30 June

Advertising Revenue

Programming Costs % Revenue

46%43%

49%50%

48%

43%

38%

40%

42%

44%

46%

48%

50%

52%

1998 1999 2000 2001 2002 2003Year End 30 June

$48.3$73.7 $74.1

$75.7

$108.2$150.8

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$NZ

mill

ions

1998 1999 2000 2001 2002 2003

Year End 30 June

EBITDA

$63.8

$114.7 $103.3

$153.3

$105.9$86.1

$0

$20

$40

$60

$80

$100

$120

$140

$160

$NZ

mil

lion

s

1998 1999 2000 2001 2002 2003Year End 30 June

Capital Expenditure

(excluding transponders)

-$6.1

$4.5

-$27.0

-$42.3

-$30.2

$0.7

-$45.0

-$40.0

-$35.0

-$30.0

-$25.0

-$20.0

-$15.0

-$10.0

-$5.0

$0.0

$5.0

$NZ

mill

ions

1998 1999 2000 2001 2002 2003

Year End 30 June

Net Profit/(Loss)

0

8

16

24

32

BIG

MA

C's

Foxtel Sky NZ Direct TV BSkyB

Big Mac Index

Results Summary

(30.2)

(1.3)

26.7

(4.8)

113.0

108.2

236.4

344.6

2002

53.8%(2.0)Other

13.6%391.3Revenue

Net Profit/(Loss) after Tax

Interest

EBIT

Depn & Amort

EBITDA

Operating Expenses

$NZ million

102.3%0.7

4.9%28.0

656.3%26.7

9.8%124.1

39.4%150.8

1.7%240.5

% Change2003

Free Cash Flow

(37.2)

(114.2)

77.0

2002

(15.9%)(96.0)Net Investing Cash Flows

66.2%128.0Net Operating Cash Flow

Free Cash Flow

$NZ million

186.0%32.0

% Change2003

Revenue Analysis

344.6

36.4

16.5

6.1

19.6

266.0

2002

16.2%309.1Residential

Total Revenue

Installation, programming sales & other

Advertising

Sky Watch

Commercial

$NZ million

13.6%391.3

(8.0)%33.5

18.8%19.6

11.5%6.8

13.8%22.3

% Change2003

Expense Analysis

347.9

113.1

48.6

6.9

12.7

166.6

2002

0.9%168.1Programming

Total Operating Expenses

Depreciation & Amortisation

Selling, General & Administration

Transmission

Subscriber Management

$ million

4.2%362.6

9.7%124.1

2.3%49.7

1.4%7.0

7.9%13.7

% Change2003

0

20

40

60

80

100

120

140

160

180

$ N

Z M

illi

on

s

2001 2002 2003

Rights Production Other

Programming Costs

Foreign Currency Hedging Sky’s hedging positions at 31 July 2003

• 97% hedged for 0 -12 months $US exposures @ .500

• 46% hedged for 13-24 months $US exposures @ .536

• 33% hedged for 25-36 months $US exposures @ .565

• 96% hedged for 0 -12 months $A exposures @ .899

• 74% hedged for 13-24 months $A exposures @ .904

• 66% hedged for 25-36 months $A exposures @ .892

• average $US payment rate for opex for year to June 03 = 44.8c

Funding

• New 5 year NZ$200m revolving bank facility refinanced in May 2003 - TD, HSBC, ANZ, BNZ, Westpac

• Event of review if News direct/indirect ownership of Sky is less than 27.5%

• Bank Facility drawn to NZ$148m. Margin is 75bp

• NZ$111m of Capital Notes raised October 2001 @ 9.3%. Election date October 2006, market yield on notes @ June 03 was 7.6%

Tax

• Tax losses carried forward of NZ$106m @ 33% = $35m

• Tax Asset of NZ$54m not recognised (includes June 02 offset to INL)

• NZ$53m of losses offset by INL for June 02 year, NZ$52m anticipated for June 03 year

• INL to repay cash to SKY when tax is due

• ie ($53m + $52m) x 33% = $35m

• Sky will receive imputation credit benefit of loss transfer

Capital Expenditure Analysis

123.4

4.5

10.7

3.0

2.0

85.7

17.5

2002

(29.0%)7.6Right of renewal

(14.3%)105.8Total Capital Expenditure

12.6%19.7Transponder Lease

Other

Interactive Applications

Digital Expansion

Subscriber Equipment

$ million

(57.8%)1.9

(76.7%)0.7

(25.0%)1.5

(13.2%)74.4

% Change2003

$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

$900.00

$NZ

2001 2002 2003 2004 Forecast

Decoder Material/Labour

DBS (Satellite) Install Costs

$719$803$832

$524

• Net profit of $0.7m a $30.9m improvement

• Operating cash flow up 66% to $128m

• Negative free cash flow improved by $69m to a positive $32m

• Subscriber numbers up 8% to 543k.

• ARPU up 3% to $51.83, DBS ARPU up 5% to $59.35

• Net Churn down 7% to 10.8%

2003 Key Messages

• Our July 2003 survey of brokers forecasts indicates

NZ$m Mean ($m)

EBITDA 175 - 199 187

NPAT 29 - 47 39

Capex 70 - 106 91

• Guidance is that SKY expects to be at the lower end of each of

these forecasts

2004 Guidance

Programming

Initiatives

2003/04

SKY NETWORK TELEVISION ANNUAL RESULTS 2003