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MASTER (12) DRAFT: September 28, 2001 Ì U44397 When submitting changes please consider the following:Ì ¬ Mark comments on the most recent version of the document. ¬ Avoid use of soft lead pencils, felt tipped pens or highlighters. ¬ Indicate minor changes with an ""X'' in the margin. ¬ Do not write on the reverse of a page. ¬ Avoid the use of scotch tape/sellotape and staples whenever possible. ¬ Indicate all Global Searches or Global Search and Replaces on a separate sheet at the front of the mark-up indicating speciÑcally the search criteria (i.e. all lower case, initial caps only, etc.) CONFIDENTIAL Please read carefully and tick the appropriate box:Proofreaders' margin marks: n Do not blackline any corrections Take out character n Blackline only the corrections made during the present Insert space cycle, keeping in Ñle the previous blacklines Lower case n Cumulative blacklining Capitals n Blackline only the corrections made during the present Italic cycle, and delete deÑnitively the previous blacklines Let it stand Start paragraph Insert period Insert comma O Bowne of London. 60, Queen Victoria Street, London EC4N 4TR. TEL: (0)20 7551-5000 FAX: (0)20 7551-5151 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F n REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ≤ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Ñscal year ended June 30, 2001 OR n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission Ñle number: 1-13488 British Sky Broadcasting Group plc (Exact name of Registrant as speciÑed in its charter) England & Wales (Jurisdiction of incorporation or organization) Grant Way, Isleworth, Middlesex, TW7 5QD, England (Address of principal executive oÇces) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each Name of each exchange Class on which registered Ordinary Shares (nominal value 50p per Share) New York Stock Exchange(1) American Depositary Shares, each of which represents New York Stock Exchange six Ordinary Shares of British Sky Broadcasting Group plc (nominal value 50p per Share) (1) The listing of Registrant's Ordinary Shares on the New York Stock Exchange is for technical purposes only and without trading privileges. Securities registered or to be registered pursuant to Section 12(g) of the Act: NONE Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NONE Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock at the close of the period covered by the annual report. Ordinary Shares (nominal value 50p per Share)............................................................1,888,793,111 Indicate by check mark whether the registrant (1) has Ñled all reports required to be Ñled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to Ñle such reports), and (2) has been subject to such Ñling requirements for the past 90 days. Yes ≤ No n Indicate by check mark which Ñnancial statement item the registrant has elected to follow. Item 17 n Item 18 ≤ TABLE OF CONTENTS Page PART I ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLEÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 ITEM 3: KEY INFORMATION ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 ITEM 4: INFORMATION ON THE COMPANY ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48 ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 58 ITEM 8: FINANCIAL INFORMATION ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61 ITEM 9: THE OFFER AND LISTING ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61 ITEM 10: ADDITIONAL INFORMATIONÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 62 ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ÏÏÏÏÏÏÏÏÏÏÏ 74 ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 77 PART II ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 ITEM 15: RESERVED ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 ITEM 16: RESERVED ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 PART III ITEM 17: FINANCIAL STATEMENTSÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 ITEM 18: FINANCIAL STATEMENTSÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 ITEM 19: EXHIBITS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 79 CERTAIN FORWARD LOOKING STATEMENTS This Annual Report on Form 20-F contains certain forward looking statements. These forward looking statements are not historical facts, but rather are based on our current expectations, estimates and projections about our industry, our beliefs and assumptions. Words such as ""anticipates'', ""expects'', ""intends'', ""plans'', ""believes'', ""seeks'', ""estimates'' and similar expressions are intended to identify forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are diÇcult to predict and could cause actual results to diÅer materially from those expressed or forecasted in the forward-looking statements. We operate in a competitive environment, and a number of factors could aÅect our ability to achieve our goals, including, but not limited to, the eÅects of government regulation upon our activities; our ability to continue to obtain exclusive rights to movies, sports events and other programming content; the risks associated with our introduction and operation of digital television transmission in the U.K. as well as our U.S. dollar/pound sterling exchange rate exposure. These risks and uncertainties are described in Item 3 ""Key Information Ì Risk Factors'', Item 4 ""Information on the Company'', Item 5 ""Operating and Financial Review and Prospects'' and elsewhere in this Annual Report on Form 20-F. We caution you not to place undue reliance on these forward looking statements, which reÖect our management's view only as of the date of this prospectus. The forward looking statements made in this Annual Report on Form 20-F relate only to events as of the date on which the statements are made. 3 PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable ITEM 3. KEY INFORMATION SELECTED FINANCIAL DATA Set forth below is selected Ñnancial data for the Company for each of the years in the Ñve year period ended June 30, 2001 and as at June 30, 1997, 1998, 1999, 2000 and 2001. The selected Ñnancial data for the Company presented in accordance with U.K. GAAP, for each of the years in the Ñve year period ended June 30, 2001 and as at June 30, 1997, 1998, 1999, 2000 and 2001 has been excerpted or derived from the Consolidated Financial Statements of the Company, and notes thereto, included elsewhere herein, which have been audited by Arthur Andersen, and should be read in conjunction therewith. The Consolidated Financial Statements have been prepared in accordance with U.K. GAAP, which diÅers in certain signiÑcant respects from U.S. GAAP. See Note 28 of Notes to Consolidated Financial Statements for a discussion of the principal diÅerences between U.K. and U.S. GAAP. These tables should be read in conjunction with the accompanying notes. Year Ended June 30, 1997(5) 1998(5) 1999(5) 2000(5) 2001 2001(1) Before goodwill Goodwill and and As As As As exceptional exceptional restated restated restated restated items items Total Total (in millions except per share data) ProÑt and Loss Account: Amounts in accordance with U.K. GAAP Direct-to-home subscriber revenues ÏÏÏÏ 861 968 979 1,189 1,537 Ì 1,537 $ 2,158 Cable revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 191 228 253 303 299 Ì 299 419 Advertising revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 150 195 217 242 271 Ì 271 381 Interactive revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì 5 93 Ì 93 131 Other revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47 43 96 108 106 Ì 106 149 Total revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,2491,434 1,545 1,847 2,306 Ì 2,306 3,238 Operating expenses, netÏÏÏÏÏÏÏÏÏÏÏÏ (875) (1,093) (1,360) (1,762) (2,146) Ì (2,146) (3,013) Goodwill amortizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì (44) (44) (62) Reorganization of Sky Interactive ÏÏÏÏ Ì Ì Ì Ì Ì (23) (23) (32) Cost of abortive Man Utd bidÏÏÏÏÏÏÏÏ Ì Ì (6) Ì ÌÌÌÌ Transition provision ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (450) (58) ÌÌÌÌ Analog termination provision ÏÏÏÏÏÏÏÏ Ì Ì Ì (41) ÌÌÌÌ SHS reorganization provision ÏÏÏÏÏÏÏÏ Ì Ì Ì (6) ÌÌÌÌ Operating expenses, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (875) (1,093) (1,816) (1,867) (2,146) (67) (2,213) (3,107) Operating proÑt (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏ 374 341 (271) (20) 160 (67) 93 131 Share of operating results of joint ventures ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10) (17) (58) (122) (239) (17) (256) (359) Joint ventures' goodwill amortization Ì Ì Ì (14) Ì (101) (101) (142) 4 Year Ended June 30, 1997(5) 1998(5) 1999(5) 2000(5) 2001 2001(1) Before goodwill Goodwill and and As As As As exceptional