New Zealand Gazette – 1993 – No. 94

Page 1777

✨ Financial Statements



29 JUNE NEW ZEALAND GAZETTE 1777

TELECOM WELLINGTON LIMITED

NOTES TO THE FINANCIAL STATEMENTS

(CONTINUED)

2 OPERATING EXPENSES

OTHER OPERATING EXPENSES

1993 1992
$000's $000's
Other operating expenses 221,448 235,486

Included in other operating expenses are:

  • Depreciation 53,245 56,113
  • Audit fees 204 200
  • Intercompany management fee 13,689 12,532
  • Lease and rental costs 9,572 11,863

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 Wellington it is estimated that the cost of implementing this restructuring, which will take up to four years, is $86 million. This has been charged against earnings for the year ended 31 March 1993 as an abnormal restructuring cost. The estimate included $38 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 $91.4 million ($70.0 million after tax).

For comparative purposes, redundancy costs of approximately $10.2 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

1993 1992
$000's $000's
Interest income:
- Intercompany 869 2,045
- Other 234 596
1,103 2,641
Dividend income from fellow subsidiary company 16,001 15,208
Total investment income 17,104 17,849

| Interest expense: | | |
| - Intercompany | 43,592 | 42,188 |



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✨ LLM interpretation of page content

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

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