New Zealand Gazette – 1993 – No. 94

Page 1741

✨ Financial Statements



29 JUNE NEW ZEALAND GAZETTE 1741

TELECOM AUCKLAND LIMITED

NOTES TO THE FINANCIAL STATEMENTS

(CONTINUED)

2 OPERATING EXPENSES
OTHER OPERATING EXPENSES

Other operating expenses 1993 1992
$000's $000's
455,870 463,130

Included in other operating expenses are:

  • Depreciation 129,965 125,435
  • Audit fees 216 200
  • Intercompany management fee 26,259 22,787
  • Foreign exchange gains - 5
  • Lease and rental costs 15,123 16,265

ABNORMAL REDUNDANCY AND RESTRUCTURING COSTS

A strategic restructuring of Telecom was announced towards the end of the financial year, aimed at rationalising the company structure, substantially improving service quality and reducing operating costs. For Telecom Auckland it is estimated that the cost of implementing this restructuring, which will take up to four years, is $157 million. This has been charged against earnings for the year ended 31 March 1993 as an abnormal restructuring cost. The estimate includes $77 million of employee redundancy costs associated with workforce reductions, with the balance related to the consolidation of both owned and leased premises, asset writedowns and costs incidental to the restructuring process.

Redundancy costs incurred in the first six months, prior to the announcement of the strategic restructuring, were included in the interim financial statements as normal operating costs, consistent with the treatment in prior years. These costs, along with redundancy costs incurred in the third quarter, have now been aggregated with the costs of the strategic restructuring and are reported as an abnormal charge amounting to approximately $164.6 million ($114.3 million after tax).

For comparative purposes, redundancy costs of approximately $21.8 million for the year ended 31 March 1992, previously reported as a normal operating cost, have been reclassified as an abnormal charge.

3 INVESTMENT INCOME/INTEREST EXPENSE

Interest income: 1993 1992
$000's $000's

  • Intercompany - 141
  • Other 489 3,657
    Total investment income 489 3,798

Interest expense:

  • Intercompany (including finance lease charges) 45,693 53,661
  • Other 35 33
    45,728 53,694
  • Less interest capitalised - (163)
    Total interest expense 45,728 53,531


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✨ LLM interpretation of page content

🏭 Financial Statements under Telecommunications (Disclosure) Regulations 1990 (continued from previous page)

🏭 Trade, Customs & Industry
13 May 1993
Telecommunications, Financial Statements, Notes, Operating Expenses, Redundancy Costs, Restructuring, Investment Income, Interest Expense