LIME: Communications PLC Results For The Year Ended

ANNOUNCEMENT 20 MAY 2015

Highlights

CABLE & WIRELESS COMMUNICATIONS PLC RESULTS FOR THE YEAR ENDED 31 MARCH 2015

Strong performance and improving platform for growth

•   Group revenue of US$1.8 billion up 4% reflecting strategic progress
•   Group EBITDA of US$585 million up 7%; EBITDA margin increased by 1 ppt to 33%
•   US$100 million cost reduction plan successfully completed; c.800 FTE reductions over two years
•   US$442 million Project Marlin capex investments have improved network performance
•   Significant growth in adjusted EPS to US4.7 cents driven by US$55 million lower interest cost
•   Columbus acquisition completed on 31 March 2015; integration underway
•   Recommended final dividend per share of US2.67 cents; full year dividend per share of US4 cents (2013/14 US4 cents)

Full year ended US$m 31 March 2015

Revenue 1,753 EBITDA 585 Adjusted earnings per share (US cents) 4.7c

Full year ended 31 March 2014 Change 1,689 4% 546 7% 2.2c 114%

Note: Figures above are for continuing operations, including the Seychelles and excluding Monaco. EBITDA and adjusted earnings per share are defined in the footnotes on page 3 and a reconciliation is provided on page 32

Commenting on the Group results, Phil Bentley, Chief Executive of Cable & Wireless Communications Plc, said:

“2014 was a year of transformation and growth for Cable & Wireless Communications (CWC). We created a new senior executive team operating out of our new Miami hub. We developed a new vision and strategy for the Group, backed by our US$1 billion “Project Marlin” investment programme. We began to execute a performance improvement plan and deliver our strategy to grow. The team’s hard work has started to deliver results as we saw top-line growth for the first time since demerger and EBITDA margins improve.

“In addition to our improved operating performance, we completed the sales of our Monaco Telecom business for US$445 million in May 2014 and our stake in Solomon Telekom for US$16.5 million in October 2014, and, through the acquisition of Sonitel in Panama for US$41 million, added our first acquisition in support of our Business Solutions division. Most importantly, in November 2014, we announced an agreement to acquire Columbus International Inc. (Columbus) for US$3.025 billion, which was completed on 31 March 2015.

“This is a transaction that transforms CWC, and is one that will accelerate the delivery of our strategy across the Caribbean and Latin America. Columbus is an outstanding business, backed by a state-of-the-art terrestrial and submarine fibre network. Our complementary fixed line and mobile networks and our focus on providing the best customer service, bringing together the skills and capabilities of over 7,500 team members, will position us better to serve our customers and improve the ICT infrastructure of the communities in which we operate.

“We have made good progress in executing our strategy and we are beginning to uncover the full potential of our business. CWC is on the way to becoming a better company – a genuine quad play operator, with strong market shares in the geographically focused and attractive Caribbean and Latin American markets. We see good long-term growth prospects across Consumer, Business Solutions, and Networks businesses, underpinned by our differentiated submarine and terrestrial fibre networks and full service offering.

“Overall we are pleased with the results following the first year of our new strategy, but there remains much to do to realise the full potential of the business.”

Performance against targets

Last year we set out a series of goals by which our performance would be measured. Progress is being made in delivery of our strategy as follows:

Top-line growth – Group revenue grew 4% (up 2% like-for-like) and represented the best year-on-year growth since demerger, demonstrating good levels of progress relative to the sector;

Business effectiveness – Operating costs fell US$15 million or 2% year-on-year while EBITDA grew 7%. Although our operating costs to revenue ratio fell by 2 percentage points to 41%, further reducing this ratio remains our long term ambition for the company; and

Net Promoter Score (NPS) – Customer loyalty as measured by our Group NPS was up 6 points over the year. NPS also grew across every product segment as our investments and focus began to improve customer experience.

Our strategy is expected to deliver, in the three years to 31 March 2018:

•   Annual mid to high single digit revenue growth and significant EBITDA growth;
•   Run-rate operating cost synergies of US$85 million and total capex synergies of US$145 million;
•   EPS accretion from 2016/17; dilutive in 2015/16; and
•   Following completion of Project Marlin, capital intensity is expected to fall to c.14% of revenue in the year ending 31 March 2018.Outlook

  Overall economic growth prospects in our markets remain generally positive with some variability on a country-by- country basis. Latin American countries such as Panama and Colombia have relatively robust forecast GDP growth rates of 6% and 4% respectively whilst in our Caribbean markets there are lower growth rates as the region continues to experience a more modest pace of recovery following the previous economic downturn.

  Although we face increasingly competitive conditions within some markets, for example with the introduction of mobile competition in The Bahamas later this year, we expect to continue making good progress in growing our revenue and reducing our operating cost base. In addition, we expect to benefit from revenue, operating cost and capital expenditure synergies following our acquisition of Columbus. With increasing traffic over our networks, improved service reliability, positive NPS momentum and a more diversified set of products and services to offer our customers, the decisions we have made to invest in our infrastructure and our people position us well to capitalise on positive growth trends in our industry.

Group revenue in the 2014/15 financial year grew by US$64 million or 4% (US$39 million or 2% excluding Sonitel and adjusting for currency movements). This represents the Group’s best revenue growth in five years. We saw growth across our Mobile, B2B/B2G and Video lines of business, as well as some encouraging signs for our Fixed Voice business as we refreshed tariffs and introduced innovative products to make the category more relevant for our customers. Broadband performance was disappointing with 1% growth but we are optimistic that the acquisition of Columbus will address the challenges we face, in particular in terms of faster network speeds.

Mobile network improvements through Project Marlin investments in HSPA+ and LTE have contributed to mobile data revenue growth of US$48 million. Traffic on our mobile networks grew 39% in the year and across our Group 44% of customers now has a smartphone. With the launch of a number of value added services we also began to broaden our mobile data offering beyond pure connectivity and we added some 560,000 new data plans (1.6 million in total).

Our Panama business maintained its mobile market share of greater than 50% and delivered a 4% rise in revenue driven by mobile data and subscriber growth outstripping lower ARPU. EBITDA was up 1% on a reported basis, but declined by 1% adjusting for the acquisition of Sonitel as operating costs increased by 5% due to higher marketing spend as we launched improved broadband services and a revamped video offering whilst there was also an increase in the minimum wage of up to 15%.

In the Caribbean, our Jamaica business continued to attract new mobile subscribers (up 107,000 or 15%) and gain market share, leading to 19% revenue growth (30% at constant currency). Our investments in networks and our “Upgrade Caribbean” programme led to a 10% increase in LIME mobile revenue with HSPA+ speeds now provided across the region, albeit with challenges in broadband due to delays in fibre rollout. Total reported revenue grew 3% year over year.

In The Bahamas, revenue performance declined 2% as we prepared BTC for the advent of mobile competition by reducing prices and updating roaming agreements whilst also being impacted by the introduction of VAT. We continue to anticipate that a new mobile operator will enter the Bahamian market before the end of this calendar year, which will further adversely impact performance in 2015/16. Our agreement to transfer 2% of our shares in BTC to the newly formed charitable BTC Foundation during the year, cemented our partnership with The Government of The Bahamas and will ensure investment in good causes for the benefit of the Bahamian people.

We continue to exercise cost discipline in all areas of the business and the initiative to reduce our run-rate operating costs by US$100 million by the end of 2014/15 was achieved with c.800 team members exiting the business over the two years in addition to our exiting non-core property assets, and investing to reduce power consumption. As we integrate our business with Columbus’s we will look to drive further process efficiencies.

In the second half, we generated EBITDA of US$308 million which was up 11% on the first half and 10% on the second half of the prior year (profitability is typically weighted towards the second half). This performance represents growing momentum across our business which we aim to continue.

Acquisition of Columbus International Inc.

On 31 March 2015, Cable & Wireless Communications (CWC) completed the purchase of 100 per cent. of the equity of Columbus International Inc, a leading privately-owned fibre-based telecommunications and technology services provider operating in the Caribbean, Central America and the Andean region.

We expect the operating synergies to be significant; together the new company creates the opportunity to invest more, grow faster and provide an improved customer experience and most importantly, a development opportunity for our people that neither company could have achieved on their own.

The transaction will accelerate both our mobile leadership and our fixed mobile convergence strategies, enabling customers, for example, to have seamless access to high quality video content as they move between devices and locations. The streaming of video content onto mobile phones will accelerate. In fixed line, the significant improvements in our networks along with Columbus’ broadband capabilities will deliver an outstanding online experience with faster speeds and wider coverage. The transaction also brings significantly improved content and advances in video delivery and cloud based services.

In terms of Business-to-Business (B2B) and Business-to-Government (B2G), the transaction expands CWC’s regional footprint bringing additional national and international connectivity to better serve multinational customers, as well as opening up Latin America’s high growth markets. These opportunities are well aligned with our new CWC Business Solutions unit’s focus and capabilities.

As part of the regulatory approval process, we intend to dispose our 49 per cent. stake in TSTT in Trinidad & Tobago and certain overlapping terrestrial fibre assets in Barbados.

Below we present summary combined financials for the enlarged Group.

1 Extracted from audited consolidated financial statements for the year ended 31 December 2014

In the 12 months to 31 December 2014, Columbus generated revenue of US$598 million, up 19% on a reported basis and 14% removing the impact of the Promitel acquisition. This top line growth drove EBITDA up 18% to US$255 million, 12% excluding Promitel. This is broadly in-line with our expectations at acquisition, although there have been higher initial investments required to build the Columbus Business Solutions capability and there was an impact from the devaluation of the Colombian peso.

Integration

Since completion of the acquisition, the Group has made good progress with the integration of the CWC and Columbus businesses. Our initial focus is to deliver the benefits of a combined Group to our customers. This will be achieved through a revamp of services such as our customer support, field operations and network operations activities; and improving our product offering through the introduction of Columbus’ video products across our markets in addition to the rollout of unified consumer and business facing brands.

We have also established the executive management structure for the combined Group, ensuring retention of highly skilled colleagues from both Columbus and CWC, whilst also providing a framework which will enable decisions to be made more quickly and effectively. The integration of back office functions such as our billing and provisioning systems will also be a focus, though they will require a longer period to achieve due to planning and execution considerations.

Synergies

As a result of the Columbus acquisition, the Group expects to achieve recurring annualised pre-tax cost synergies of approximately US$85 million on a run-rate basis, and one-time capital expenditure synergies of approximately US$145 million in total, by 31 March 2018. Additional revenue benefits are anticipated through an improved product offering, particularly in high-speed broadband and video services, cross-selling and reduced churn.

Recurring cost synergies

Substantial cost synergies have been identified across the following areas:

•   Duplication of corporate costs and functional overheads (approximately US$50 million): rationalisation of overlapping headcount in back office, sales and marketing and customer service roles, renegotiation of vendor rates, reduction of real estate costs and harmonisation of IT systems; and
•   Integration of networks and video content (approximately US$35 million): transition to Columbus’ fixed line fibre network where networks overlap, renegotiation of maintenance fees, consolidation of network and service operating centres and leverage of Columbus’ superior video content buying terms and access to greater economies of scale.

We expect to benefit from approximately 45% of these synergies by the end of 2015/16, 85% by the end of 2016/17 and 100% by the end of 2017/18.

To achieve the synergy benefits we anticipate one-off cash costs of US$110 million, split approximately 45%, 40% and 15% over the three years following the acquisition. US$68 million of the operating exceptional items charged in the year ended 31 March 2015 relate to these cash costs.

One-off capex synergies

In addition, the Group will benefit from one-time synergies of approximately US$145 million related to avoidance of duplicative one-off capital expenditure through network consolidation in the overlapping markets where there had been investment plans under Project Marlin and Columbus already has existing network infrastructure. Such synergies are expected to be split 35%, 40% and 25% over the three years to 31 March 2018.

Revenue synergies

Revenue synergies are anticipated from selling additional services to existing customers through cross-selling of triple play and quad play bundles, improving legacy CWC’s video offering in non-overlapping markets, improved network quality reducing customer churn and an enhanced B2B and B2G offering.

Financing of the acquisition

The acquisition of Columbus was financed through a placing of new shares, equity issuance to the vendors, two- year term loan facilities and the assumption of Columbus’ debt.

The Cable & Wireless Communications Group

Vision and Strategy

While our vision remains the same – we seek to deliver long-term and sustainable growth for shareholders through growing the lifetime value of our customer relationships – with the acquisition of Columbus we have refined our strategy to reflect our enhanced market positions and capabilities. The new company’s strategy now has six imperatives with two additions since the Columbus acquisition.

Established strategic imperatives

•   Drive to mobile leadership – Deliver the best network, data packages, handset range and customer service;
•   Fixed-mobile convergence – Leverage our unique combination of fixed and mobile assets;
•   Video and content leadership – Generate video and broadband growth whilst reducing fixed line churn; and
•   Grow our B2B and B2G business – Build bespoke, customer-centric solutions leveraging our sub-sea andterrestrial assets.
  Additional imperatives post Columbus merger

•   Build a leading wholesale network – Deliver unrivalled intra-regional connectivity; and
•   Deliver successful integration – Improve customer experience, reduce costs and improve returns.Investments

  Consistent with our vision and strategy, 2014/15 saw an uplift in our capital expenditure from US$251 million to US$442 million as we delivered the first year of Project Marlin. The main areas of investment focused on:

  Mobile networks
  We have now upgraded to HSPA+ across all our markets and launched LTE services in The Bahamas, Cayman, Panama, and Antigua, providing more than 4x the throughput of HSPA+. In the year, our total number of network sites grew by 42% and our mobile networks showed improvement across all parameters with 8 of 15 HSPA+ networks determined as “Best in Class” based on international benchmarks. Data traffic increased 165% across all LIME markets. We have more work to do however in terms of mobile network performance in our larger scale markets.

  We have added 399 new HSPA+ sites in Jamaica and 476 new HSPA+ sites in the other markets. In The Bahamas, 24 additional HSPA+ sites and additional second carriers were added to improve coverage and capacity in the high traffic areas. In addition, 107 new LTE sites were added to expand the LTE footprint. In Panama, 290 HSPA+ sites were added, 186 2nd carrier and 235 3rd carrier expansions were completed to increase network coverage and capacity. Panama launched LTE service in March 2015, with 106 sites in operation.

  Fixed networks
  On the Fixed Networks, LIME is strategically upgrading the broadband service by using FTTH capable of providing 1 Gbps and VDSL2 technologies that can yield over 30 Mbps of throughput, providing our customers with the best broadband experience in the region. In Barbados, the FTTH deployment has continued, passing 73,000 homes. In Cayman, over 12,000 homes have been passed with FTTH and another 8,000 have been passed with VDSL2. Projects in Turks and Caicos, BVI and Anguilla are well under way with over 252 km of new fibre installed and a total of 10,000 homes passed in all 3 markets providing VDSL2 services. This brings the total fibre rollout to over 1,300km across LIME markets. Panama has deployed an additional 967km of fibre, for a total of 1,173 km deployed to expand the broadband service offering to customers in new areas; our fibre coaxial network in Panama now passes over 260,000 homes. In Bahamas, an additional 71 km of fibre has been deployed, passing over 23,000 homes.

  Traffic on our fixed networks grew 31% as we drove our fixed-mobile convergence strategy to most efficiently deliver data to customers. We saw our ‘production cost’ of data fall 38% measured by cost per GB as we improved our delivery efficiency.

  We anticipate that our capital expenditure will remain elevated as a proportion of our revenue in the coming financial year as we deliver Year 2 of Project Marlin and commence the first year of our integration with Columbus. This year’s financial performance bears out our underlying belief that increased investment to deliver an improved service will generate future revenue and earnings growth.

Joint ventures and associates

Our share of profit after tax from joint ventures and associates was US$12 million, US$7 million higher than the prior period.

1 Other includes the Seychelles Cable System (SCS)

CWC’s share of TSTT revenue was down 1% in the period as competition intensified in the region. Profits increased by US$73 million to US$11 million as the prior period included a one-off US$67 million charge related to a voluntary separation scheme. CWC successfully disposed of its holding in Solomon Telekom on 24 October 2014 for US$16.5 million.

As a condition to the regulatory approval for the Columbus acquisition, we are required to divest our 49% stake in TSTT and no longer retain significant influence over its management. Accordingly, our investment in TSTT has been transferred to assets held for sale.

Capital expenditure

Capital expenditure in the year was US$442 million, 76% higher than last year, representing 25% of revenue as we accelerated investments following commencement of Project Marlin.

Mobile investments, 41% of the total balance sheet capital expenditure, accounted for the majority of expenditure as we continue to upgrade our network in all regions. The next largest investment area was in fixed networks, 29% of the total, where fibre upgrades, 2,300 km rolled out and c.114,000 additional homes passed, provided our customers with a leading high-speed broadband experience. We also made capital investments to increase our range of managed services solutions, with our Disaster Recovery as a Service product recently recognised in the Gartner Magic Quadrant and being recognised by Avaya as their Central America and the Caribbean Mid-Market Partner of the Year.

Pre-exceptional depreciation and amortisation

Depreciation and amortisation at US$256 million was 9% higher following accelerated investment in network infrastructure as part of Project Marlin.

Other Group items

Net other operating expense

The US$20 million net other operating expense for the year comprised US$54 million of costs related to the acquisition of Columbus partly offset by income from the sub-sea cable partnership with Columbus Networks and foreign exchange translation gains related to the UK pension scheme as the US dollar strengthened against sterling. In the prior year the loss of US$15 million principally comprised a foreign exchange translation loss related to the UK pension scheme.

Exceptional expense

Exceptional expenses totalled US$231 million in the year. The charge included impairment of assets; primarily, copper plant and facilities in markets where CWC and Columbus overlap and legacy voice switches replaced as part of Project Marlin, as well as expenses to yield synergies related to the Columbus transaction and a voluntary separation scheme in The Bahamas. US$241 million of expense in the prior period included charges for the Group cost reduction initiative and a charge of US$67 million in TSTT.

Net finance expense

The US$58 million net finance expense for the Group included finance income of US$26 million (US$6 million in 2013/14) primarily due to foreign exchange gains on sterling denominated liabilities. The total finance expense was lower than the prior year at US$84 million (US$139 million in 2013/14) predominantly related to the early redemption of the secured US$500 million 2017 bond with 8.625% coupon in February 2014.

Exceptional finance expense

The US$37 million exceptional finance expense for the Group in 2014/15 related primarily to financing fees for the Columbus acquisition consents and backstop facilities. The 2013/14 exceptional finance expense related to the early redemption of the secured US$500 million 2017 bond in February 2014.

Other non-operating income

Other non-operating income of US$4 million (US$nil million in 2013/14) represented the gain on disposal of the Group’s 32.577% shareholding in Solomon Telekom.

Income tax expense

The income tax charge for the continuing Group of US$32 million (US$32 million in 2013/14) was in respect of overseas taxes. This charge represented an effective tax rate of 24% pre-exceptional items. Removing the impact of non-deductible interest charged on the Group’s central borrowing facilities this charge represented an effective tax rate of 19% pre-exceptional items.

Discontinued Operations

In the year ended 31 March 2015, discontinued operations included Monaco’s contribution until its disposal was completed on 20 May 2014. In the prior year, discontinued operations comprised Monaco, Macau and the Islands businesses.

Gains on disposals

During the period we recognised an accounting gain of US$346 million following the completed disposal of our holding in Monaco Telecom in May 2014.

Group cash flow

1. 1  Earnings before interest, tax, depreciation and amortisation, net other operating and non-operating income/(expense) and exceptional items
2. 2  Includes dividends received from joint ventures of US$nil million in 2014/15 (US$2 million in 2013/14)

The Group generated operating cash flow before exceptional items of US$143 million for the year ended 31 March 2015, 52% lower than the prior year as capital expenditure accelerated under Project Marlin. There was a US$14 million working capital outflow during the year with improvement in Panama government receivables during the second half. Net investment income primarily comprised interest on cash balances, with US$0 million dividends received from our TSTT joint venture (US$2 million in 2013/14).

Fixed charges

We paid US$52 million relating to income tax in the period, US$2 million lower than the prior year primarily due to changes in the taxation rate in Panama and lower tax payments in LIME. Interest paid on our external borrowings at US$82 million was US$40 million lower than the prior year driven by the redemption of the US$500 million 8.625% secured bonds due 2017, in February 2014. We paid dividends to non-controlling interests of US$86 million in the period, which was US$14 million higher than the prior year due to timing of dividends from Panama.

Underlying equity free cash flow of US$(87) million was US$149 million lower than the prior year.

Non-recurring and exceptional items

The net cash outflow included US$58 million for exceptional items related to restructuring programmes primarily in LIME and the centre as we established our Miami office. We made a US$52 million cash contribution to the Cable & Wireless Superannuation Fund in the period and do not anticipate any further top-up payments until H1 2015/16 per the existing agreement with the Trustees of the fund. Acquisitions and disposals for the period include the US$708 million cash consideration and fees related to the acquisition of Columbus, and a payment for the acquisition of Grupo Sonitel, offset by proceeds for the sale of Monaco Telecom less cash deconsolidated upon the disposal and US$16.5 million from the sale of our minority shareholding in Solomon Telekom. We also made a US$14 million payment related to our licence extension and additional spectrum agreement in Jamaica.

Dividend

For the financial year 2014/15 the Board is recommending a final dividend of US2.67 cents per share. Combined with the interim dividend of US1.33 cents paid in January, this will total a full year dividend of US4 cents per share, in line with the 2013/14 distribution.

For 2015/16 the Board has confirmed that, subject to financial and trading performance, it expects to recommend a dividend of US4 cents per share.

Subject to shareholder approval, the final dividend will be paid on 7 August 2015 to ordinary shareholders on the register at the close of business on 29 May 2015.

A currency option and the dividend reinvestment plan will be offered in respect of the interim dividend. The default currency for payment is sterling. Shareholders wishing to receive their dividend in US dollars or wishing to participate in the dividend reinvestment plan should make an election using CREST Input Message or return a completed Currency Mandate Form or Dividend Reinvestment Plan Mandate Form to: Equiniti Ltd, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA by 10 July 2015. Copies of the mandate forms are available from Equiniti Ltd. UK callers: 0871 384 2104; overseas callers: +44 (0)121 415 7052 or from our website www.cwc.com.

The sterling dividend payment amount per share will be announced on 16 July 2015, and will be based on the prevailing GBP sterling to US dollar exchange rate at 2:00pm BST on that date.

Transactions

Disposal of Monaco Telecom

On 20 May 2014, CWC completed the disposal of Compagnie Monegasque de Communication SAM (CMC), which was the holding company for CWC’s 55% stake in Monaco Telecom S.A.M. (Monaco Telecom). At completion, CWC received consideration of €321,788,000 (US$445 million) on a cash and debt free basis. In addition, CWC received €6.2 million (US$8.6 million) relating to the estimated cash, debt and working capital at completion.

Bahamas Telecommunications Company

On 24 July 2014, CWC completed the transfer of 2% of its 51% holding in BTC to The BTC Foundation, a charitable trust dedicated to investing in projects for the benefit of Bahamians. The 2% shareholding is not entitled to any voting rights and therefore CWC has retained majority voting rights in BTC as well as remaining the largest overall shareholder. CWC will maintain management and Board control of the business.

Acquisition of Grupo Sonitel

On 12 September 2014, Cable & Wireless Panama completed the acquisition of Grupo Sonitel for US$36 million plus contingent consideration of up to an additional US$5 million. Grupo Sonitel operates SSA Sistemas, a provider of end-to-end managed IT solutions and telecoms services to business and government customers in Panama, as well as in El Salvador, Nicaragua and Peru; and Sonset, a provider of IT solutions and services to Small and Medium Enterprise (SME) customers in Panama. Logistica, an IT hardware reseller and a small number of other non-core Grupo Sonitel companies, were not included as part of the transaction.

Disposal of Solomon Telekom

On 15 October 2014, CWC announced that it had agreed to divest its 32.577% shareholding in Solomon Telekom Company Limited (Soltel) to the Solomon Islands National Provident Fund Board for total cash proceeds of approximately US$16.5 million. The transaction completed on 24 October 2014.

Acquisition of Columbus International Inc.

On 31 March 2015, Cable & Wireless Communications (CWC) completed the purchase of 100% of the equity of Columbus International Inc, a leading privately-owned fibre-based telecommunications and technology services provider operating in the Caribbean, Central America and the Andean region, for a consideration comprising USD708 million in cash and 1,558 million CWC shares.

Appendices

Consolidated income statement 21 Consolidated statement of comprehensive income 22 Consolidated statement of financial position 23 Consolidated statement of changes in equity 24 Consolidated statement of cash flows 25 Reconciliation of net loss to net cash flow from operating activities 26 Additional information 27

Operating performance information

CWC constant currency results detail 35 KPI detail 37 Exchange rates 38 EBITDA by currency 38 Important disclaimer 39

Extracts from the financial statements and additional information Consolidated income statement

Pre-
exceptional Exceptional

2014/15

Total US$m

Pre- exceptional items US$m

Restated* 2013/14

Exceptional
items Total

US$m US$m

– 1,689

(174) (1,317)

– (204) – (31) – – – (15)

(174) 122 (67) (62)

(241) 60 – – – 6

(25) (164) (266) (98) 19 (32)

(247) (130)

– 1,081 (247) 951

(229) 859 (18) 92 (247) 951

Continuing operations
Revenue 1,753

–

(104) (127)

– – –

1,753 1,689

items items US$m US$m

Operating costs before depreciation, amortisation and impairment

(1,168)

(1,272) (336)

(1,143) (204)

Depreciation and impairment (209)

Amortisation (47)

Other operating income 42

Other operating expense (62)

Group operating profit/(loss) 309

(47) (31)

42 (62) 78

– (15)

296 5

301 – 6

(139) 168 (51)

117

1,081 1,198

1,088 110 1,198

Share of profit/(loss) of joint ventures and associates

(231)
– 12

12 Total operating profit/(loss) 321

(231) 90 – 4 – 26

(37) (121)

(268) (1) 33 (32)

(235) (33)

– 354

(235) 321

(205) 253 (30) 68

(235) 321

9.7c 9.7c

(3.8)c (3.8)c

13.5c 13.5c

Gain on sale of businesses 4 Finance income 26 Finance expense (84) Profit/(loss) before income tax 267 Income tax (expense)/credit (65) Profit/(loss) for the year from

continuing operations Discontinued operations

Profit after tax for the year from discontinued operations

202

354 Profit/(loss) for the year 556

Profit/(loss) attributable to:
Owners of the Parent Company 458 Non-controlling interests 98

Profit/(loss) for the year 556 Earnings per share attributable to the owners of the

Parent Company during the year (cents per share)1 – basic

– diluted

Loss per share from continuing operations attributable to the owners of the Parent Company during the year (cents per share)

– basic – diluted

Earnings per share from discontinued operations attributable to the owners of the Parent Company during the year (cents per share)

– basic – diluted

34.3c 34.3c

(8.4)c (8.4)c

42.7c 42.7c

*The results have been restated for the classification of Monaco in discontinued operations (note 5) and for Seychelles within continuing operations (note 3). 1 Includes discontinued operations

21

Consolidated statement of comprehensive income

Consolidated statement of financial position

ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Investments in joint ventures and associates Available-for-sale financial assets
Financial assets at fair value through profit or loss Other receivables
Deferred tax asset
Retirement benefit assets

Current assets

Trade and other receivables
Inventories
Loans to related parties
Cash and cash equivalents (see note 5)

Assets held for sale

Total assets

LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Financial liabilities at fair value through profit or loss Provisions
Current tax liabilities

Liabilities held for sale

Net current assets/(liabilities)

Non-current liabilities

Trade and other payables Borrowings
Financial liabilities at amortised cost Deferred tax liabilities
Provisions
Retirement benefit obligations

Net assets

Equity
Capital and reserves attributable to the owners of the Parent Company Share capital
Share premium
Reserves

Non-controlling interests

Total equity

31 March 31 March 2015 2014 US$m US$m

2,954 526 2,523 1,418 1 188 59 58 14 – 158 170 51 34 17 20

5,777 2,414

587 433 50 36 56 –

402 205

1,095 674 165 70

1,260 744

7,037 3,158

771 612 82 58 – 274 119 140 118 121

1,090 1,205 – 23

1,090 1,228

170 (484)

373 26 2,686 797 879 – 225 27 99 42 209 199

4,471 1,091 1,476 839

224 133 260 97 652 259

1,136 489 340 350

1,476 839

Consolidated statement of changes in equity

Balance at 1 April 2013

Profit for the year
Actuarial losses recognised (net of tax)

Foreign currency translation reserves recycled on disposal of operations
Exchange differences on translation of foreign operations

Fair value movements in available-for-sale financial assets
Total comprehensive (expense)/income for the year

Share-based payments
Dividends
Total dividends and other transactions with Cable & Wireless Communications Plc shareholders

Dividends paid to non-controlling interests Transfers on sale of subsidiaries
Total dividends and other transactions with non-controlling interests

Balance at 31 March 2014

Profit for the year
Actuarial losses recognised (net of tax)

Foreign currency translation reserves recycled on disposal of operations
Foreign currency translation reserves recycled on held for sale associate
Exchange differences on translation of foreign operations

Share Share capital premium US$m US$m

133 97

133 97

Foreign
currency Capital

translation and and hedging other reserve reserves US$m US$m

32 3,321

– – – –

(7) – (7) –

– (3)

(14) (3)

Retained
earnings Total

US$m US$m

(3,832) (249)

859 859 (6) (6)

– (7) – (7) – (3)

853 836

Non-
controlling Total

interests equity US$m US$m

501 252

92 951 (2) (8)

– (7) 4 (3) – (3)

94 930

– 6 – (100)

– (94)

(76) (76) (169) (173)

(245) (249)

350 839

68 321 (1) (77)

– (94) – (30) 3 (11)

– –6 6 – – (100) (100)

– – (94) (94)

– –– –

– (30)

– (30)

18 3,288

– – – –

(94) – (30) – (14) –

26 (4)

26 (4)

(3,047) 489

253 253 (76) (76)

– (94) – (30) – (14)

Fair value movements in available-for-sale
financialassets –––3–3–3

Total comprehensive (expense)/income for
the year –

Lock-up and put option arrangements – Issuance of ordinary shares 91 Equity share-based payments – Dividends – Total dividends and other transactions

• –  (138) 3
• –  – (879)

163 – 1,312

• –  – –
• –  – –

177 42

– (879)

– 28

(104)

(76)

– (6)

(6)

(2,952)

70 112

– (879) – 1,566 – 28 – (104)

– 611

–
(6) 6 –

(6) (80) (86)

1,136 340 1,476

with Cable & Wireless Communications Plc shareholders

Dividends paid to non-controlling interests Transfer of BTC non-controlling interests Total dividends and other transactions with non-controlling interests

Balance at 31 March 2015

91 163

224 260

– 433

(120) 3,724

1,566 28

(104)

611

(86) (86)

24

Consolidated statement of cash flows

2014/15 US$m

Cash flows from operating activities
Cash generated – continuing operations (page 26) 431 Cash generated – discontinued operations 1 Income taxes paid – continuing operations (52) Income taxes paid – discontinued operations –

Net cash from operating activities 380

Cash flows from investing activities
Finance income 4 Dividends received – Purchase of available-for-sale assets (1) Proceeds on disposal of property, plant and equipment 1 Purchase of property, plant and equipment (399) Purchase of intangible assets (57) Proceeds on disposal of subsidiaries (net of cash disposed) 16 Loans to related parties (56) Acquisition of subsidiaries (net of cash acquired) (677)

Net cash used in continuing operations (1,169) Disposal proceeds (net of cash disposed and transaction costs) for discontinued operations 403 Other discontinued operations (1)

Discontinued operations 402

Net cash from investing activities (767)

Net cash flow before financing activities (387)

Cash flows from financing activities
Dividends paid to owners of the Parent Company (104) Dividends paid to non-controlling interests (86) Repayments of borrowings (176) Finance costs (128) Proceeds from borrowings 900 Proceeds on issuance of shares 176 Proceeds on sale of CMC shares – Unwind of sale of CMC shares –

Net cash used in continuing operations 582 Discontinued operations –

Net cash used in financing activities 582

Restated* 2013/14

US$m

421 116 (54)

(3)

480

6 4 – 5

(234) (132)

– – –

(351) 1,127

(53)

1,074

723

1,203

(100) (72) (1,138) (141)

162 – 100

(100)

(1,289) (4)

(1,293)

* The results have been restated for the classification of Monaco in discontinued operations (note 5) and for Seychelles within continuing operations (note 3).

25

Reconciliation of loss for the year to net cash generated

* The results have been restated for the classification of Monaco in discontinued operations (note 5) and for Seychelles within continuing operations (note 3).

26

Additional information
1 Significant accounting policies and principles
Whilst the financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards adopted by the European Union (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Group’s 2014/15 Annual Report and Accounts are prepared in accordance with IFRS.

The accounting policies applied by the Group in this announcement are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 March 2015. The adoption of IFRS 10 Consolidated financial statements and IFRS 11 Joint arrangements had no material impact on the Group. The disclosures required under IFRS 12 Disclosures on interests in other entities will increase in line with the standard in the Annual Report and Accounts.

The financial information in this announcement represents non-statutory accounts within the meaning of Section 435 of the Companies Act 2006. The auditors have reported on the statutory accounts for the year ended 31 March 2015. Their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. These accounts will be sent to the Registrar of Companies following the Company’s Annual General Meeting. A separate dissemination announcement with the Disclosure and Transparency Rules (DTR) 6.3 will be made when the annual report and audited financial statements are available on the Group’s website.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

2 Shares outstanding at year end and weighted average number of shares

On 7 November 2014, a total of 252,812,284 new ordinary shares of US5 cents each in the capital of the Company were placed by Deutsche Bank AG (cash box placement) at a price of 45 pence per placing share, raising gross proceeds of US$180 million (excluding equity transaction costs of US$4 million). The placing shares being issued represented 10% less one share of the issued ordinary share capital of the Company prior to Placing.

On 31 March 2015, a total of 1,557,529,605 new ordinary shares of US5 cents each in the capital of the Company were issued to the Principal Vendors (as defined and further described in the circular to shareholders dated 19 November 2014). These shares represent approximately 36% of the ordinary share in CWC (excluding treasury shares).

3 Segment information

Cable & Wireless Communications Group is an international telecommunications service provider. It operates integrated telecommunications companies offering mobile, broadband, TV, fixed line and managed services and other to residential and business customers. The Group has modified its operating segments following the disposal of Monaco which has been classified as discontinued operations (note 5) and the reclassification of Seychelles to continuing operations. From 1 April 2014, the Board (the chief operating decision maker) considers the performance of BTC (Bahamas) separately from that of LIME (rest of Caribbean). During the year the Group had four principal operations which have been identified as the Group’s reportable segments, being Panama, LIME, BTC and Seychelles. Our business-to-business and business-to-government operations are included in the results of the region to which they relate.

The Group also has an ‘other’ operating segment which is comprised of the corporate centre, operational hub, results of our sub-sea cable partnership and wholesale solutions business and eliminations for inter-segment transactions. This segment does not meet the definition of an operating segment as it earns revenue from its activities that are less than 10% of overall Group revenue. This function primarily acts as an operational support provider for the reportable segments.

The Board considers the performance of each of these operations in assessing the performance of the Group and making decisions about the allocation of resources. Accordingly, these are the operating segments disclosed. There are no other operating segments identified by the Board. The operating segments are reported in a manner consistent with the internal reporting provided to the Board.

1. 1  Other and eliminations includes the corporate centre and operational hub expenses, results of our sub-sea cable partnership, wholesale solutions business and eliminations for inter-segment transactions and the results of our joint ventures and associates.
2. 2  EBITDA is used in management reporting as it is considered by management to be a key financial metric. It is defined as earnings before interest, tax, depreciation and amortisation, net other operating and non-operating income/expense and exceptional items (note 4).
3. 3  Income taxes paid represents cash tax paid during the year by consolidated subsidiaries.

1. 1  Other and eliminations includes the corporate centre and operational hub expenses, wholesale solutions business and eliminations for inter- segment transactions and the results of our joint ventures and associates.
2. 2  EBITDA is used in management reporting as it is considered by management to be a key financial metric. It is defined as earnings before interest, tax, depreciation and amortisation, net other operating and non-operating income/expense and exceptional items (note 4).
3. 3  Income taxes paid represents cash tax paid during the year by consolidated subsidiaries.

4 Exceptional items

There were US$231 million of exceptional operating expenses for the twelve months ended 31 March 2015 (31 March 2014: US$241 million). The charges included impairment of assets identified as redundant; primarily, copper plant and facilities in markets where CWC and Columbus overlap and legacy voice switches replaced as part of Project Marlin, as well as restructuring changes to yield synergies related to the Columbus transaction and a voluntary separation agreement in The Bahamas. US$241 million of expense in the prior period included charges for the Group cost reduction initiative and a charge of US$67 million in TSTT.

5 Discontinued operations
i) Monaco Telecom

At a General Meeting on 15 May 2014, shareholders of the Company approved the sale of Compagnie Monegasque de Communication SAM (CMC), the holding company for the Group’s 55% stake in Monaco Telecom SAM to a private investment vehicle controlled by Xavier Niel. Monaco Telecom also owned 36.75% of Telecom Development Company Afghanistan Limited (Roshan). The sale of the business was completed on 20 May 2014 for a total consideration of US$445 million. In addition, the Group received US$8.6 million relating to the estimated cash, debt and working capital at completion. The disposal is a further step in CWC’s strategy to focus on the Caribbean and Latin America region, and after completion of the disposal, as the Group now generates all of its revenue from the Caribbean and Latin America region, with the exception of the Seychelles.

The results of all discontinued operations are shown below:

ii) Seychelles

As at 31 March 2014 the Seychelles was held for sale and net assets were US$47 million. This included cash and cash equivalents of US$3 million.

For the twelve months ended 31 March 2015, the Seychelles is now presented in continuing operations.

6 Changes in net funds

7 Provisions for liabilities and charges

The net expense recognised through profit or loss from movements in provisions relating to discontinued operations at 31 March 2015 was US$7 million (31 March 2014 – US$7 million).

Property

Provision has been made for dilapidation costs and for the lower of the best estimate of the unavoidable lease payments or cost of exit in respect of vacant properties. Unavoidable lease payments represent the difference between the rentals due and any income expected to be derived from the vacant properties being sublet. The provision is expected to be used over the shorter of the period to exit and the lease contract life.

Redundancy

Provision has been made for the total employee related costs of redundancies announced prior to the reporting date. Amounts provided during the period primarily relate to regional integration costs for merging the operations of the new combined group. The provision is expected to be used in the next two years. Amounts used during the period relate to regional transformation activities in the Caribbean.

Network and asset retirement obligations

Provision has been made for the best estimate of the unavoidable costs associated with redundant leased network capacity. The provision is expected to be used over the shorter of the period to exit and the lease contract life.

Provision has also been made for the best estimate of the asset retirement obligation associated with office sites, technical sites, mobile cell sites and domestic and sub-sea cabling. This provision is expected to be used at the end of the life of the related asset on which the obligation arises.

Legal and other

Legal and other provisions include amounts relating to specific legal claims against the Group together with amounts in respect of certain employee benefits and sales taxes. The timing of the utilisation of the provision is uncertain and is largely outside the Group’s control, for example, where matters are contingent upon litigation. There was a US$9 million release of litigation and claim exposures following a reassessment of exposures to the Group.

8 Reconciliation of GAAP to non-GAAP items Total operating profit to EBITDA

The Group uses EBITDA as a key performance measure as it reflects the underlying operational performance of the businesses. EBITDA is not a measure defined under IFRS. It is calculated as earnings before interest, tax, depreciation and amortisation, net other operating and non-operating income and expense and exceptional items.

Basic Earnings Per Share (EPS) to Adjusted EPS

1 Excluding amounts attributable to non-controlling interests

Adjusted EPS is before exceptional items, acquisition related transaction costs, amortisation of acquired intangibles, foreign exchange (gains)/losses on financing activities and gain on disposal of businesses.

9 Business Combinations
i) Columbus International Inc.

On 6 November 2014, CWC agreed to acquire 100% of the equity of Columbus International Inc. (Columbus) a leading privately-owned fibre-based telecommunications and technology services provider operating in the Caribbean, Central America and the Andean region with approximately 700,000 residential customers.

In the Caribbean, Columbus is one of the leading providers of triple-play cable TV and broadband enabled services over its proprietary fibre optic network infrastructure. Through its wholly owned subsidiary, Columbus Networks, Columbus provides backhaul connectivity to 42 countries in the region, as well as capacity and IT services, corporate data solutions and data centre services throughout the Caribbean, Central American and the Andean region. Columbus also provides next generation connectivity and IT solutions, managed networking and cloud- based services under the brand Columbus Business Solutions. This transaction is in line with the strategy outlined in May 2014 to drive mobile leadership, accelerate fixed-mobile convergence, reinforce our video offer and grow the B2B/B2G business.

On 31 March 2015, the acquisition was completed for consideration of US$2,121 million comprising a mixture of cash, the Company’s shares, capitalised share option amounts and the fair value of put options written to the principal Columbus vendors which are detailed below.

The Group has made a provisional assessment of the fair values of the assets and liabilities as at the acquisition date based on estimated total consideration of US$2,121 million.

Due to the timing of the acquisition, on the last day of the financial year, the assessment of the fair value of assets and liabilities at the acquisition date will be subject to change and the accounting for the acquisition will be updated in the prescribed 12 month period.

The goodwill recognised of US$2,034 million on acquisition was based on the provisional assessment of the fair values of assets acquired and liabilities assumed. Goodwill arising on the acquisition includes the value of the workforce and expected synergies resulting from the integration into the existing business that did not meet the recognition criteria set out in IAS 38 Intangible Assets as they were unable to be separately identified.

ii) Grupo Sonitel

On 12 September 2014, the Group, through its subsidiary Cable & Wireless Panamá, S. A. (CWP), agreed to acquire Panama-based Grupo Sonitel for US$36 million plus contingent consideration of up to an additional US$5 million. Grupo Sonitel operates SSA Sistemas, a provider of end-to-end managed IT solutions and telecoms services to business and government customers in Panama, as well as in El Salvador, Nicaragua and Peru; and Sonset, a provider of IT solutions and services to Small and Medium Enterprise (SME) customers in Panama.

This transaction is in line with the strategy outlined in May 2014 to grow business (B2B) and government (B2G) capabilities.

The Directors has made a provisional assessment of the fair values of the assets and liabilities as at the acquisition date based on estimated total consideration (including contingent consideration) of US$39 million:

2014/15 CWC CONSTANT CURRENCY RESULTS DETAIL

nm represents % change not meaningful
1 EBITDAlesscapitalexpenditure
2 Earningsbeforeinterest,tax,depreciationandamortisation,netotheroperatingandnon-operatingincome/(expense)andexceptionalitems
3 Otherincludesmanagement,royaltyandbrandingfees,thecostsofthecorporatecentreandoperatinghub,netUKdefinedbenefitpensionchargeorcreditandintercompanyeliminations

H2 2014/15 CWC CONSTANT CURRENCY RESULTS DETAIL

nm represents % change not meaningful
1 EBITDAlesscapitalexpenditure
2 Earningsbeforeinterest,tax,depreciationandamortisation,netotheroperatingandnon-operatingincome/(expense)andexceptionalitems
3 Otherincludesmanagement,royaltyandbrandingfees,thecostsofthecorporatecentreandoperatinghub,netUKdefinedbenefitpensionchargeorcreditandintercompanyeliminations

CURRENCY INFORMATION Exchange rates

Cable & Wireless Communications EBITDA by currency for year ended 31 March 2015

IMPORTANT DISCLAIMER

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Cable & Wireless Communications’ plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are several factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. A summary of some of the potential risks faced by Cable & Wireless Communications is set out in the Group’s most recent Annual Report.

Forward-looking statements speak only as of the date they are made and Cable & Wireless Communications undertakes no obligation to revise or update any forward-looking statement contained within this announcement, or any other forward-looking statements it may make, regardless of whether those statements are affected as a result of new information, future events or otherwise (except as required by the UK Listing Authority, the London Stock Exchange, the City Code on Takeovers and Mergers or by law).