Eurotunnel 1999 Results; Following a Successful Year,With Operating Profit Up 17% and a Net...

Business Editors

PARIS--(BUSINESS WIRE)--March 6, 2000

Eurotunnel, the operator of the high-speed transport system linking the UK to Continental Europe through the Channel Tunnel, today announced:

1 Operating profit up 17%: the objective for 1999 of compensating

for loss of duty free margin is met

In 1999, operating revenue increased to (pound)627 million and is made up as follows: - Shuttle revenue ((pound)271 million) has increased by 31% due to

the growth in HGV traffic and the increase in average prices; - Revenues from retail and other activities ((pound)141 million)

have decreased as expected by 27% following the abolition of duty

free sales within the European Union; - Revenues from the railways ((pound)215 million) increased by 3%

and consist mainly of the payments guaranteed under the Minimum

Usage Charge.

Operating revenue, after deduction of cost of sales - which is the only relevant comparison - increased by 8% compared with 1998.

Operating costs for 1999 have decreased by 5%, primarily due to the reduction in cost of sales (down 33%).

In total, after deduction of bank fees, restructuring costs, depreciation and provisions, operating profit increased to (pound)210 million during 1999 compared with (pound)180 million in 1998 (at constant exchange rates), a 17% increase.

Operating results       1999(a)    19989(b)   % change    1998(c)
((pound) million)       Actual     Restated    99/98      Reported

Shuttle services        271        207         +31%        210
Retail and other        141        192         -27%        195
Railways                215        209          +3%        213
                       ----------------                  -----
Operating revenue       627        608          +3%        618
Other income             27         47                      48
                       ----------------                  -----
Total turnover          654        655            -        666
Operating costs        (299)      (314)         -5%       (321)
                       ----------------                  -----
Operating Margin        355        341          +5%        345
Bank fees and
 restructuring costs     (4)       (11)                    (11)
Depreciation and
 provisions            (141)      (150)                   (150)

                        ---------------                   -----
Operating profit        210        180         +17%        184

(a) Exchange rate: (pound)1 = FRF10.14. (b) Exchange rate : (pound)1 = FRF10.14. The figures for 31 December

1998 have been restated at this exchange rate to assist comparison

with the 1999 figures. (c) Exchange rate: (pound)1 = FRF9.76.

2 A larger net profit due to active management of the balance sheet

During 1999 Eurotunnel continued its strategy of actively managing its balance sheet. Under this strategy, several financial operations have reduced both the debt and the interest charges of the Group (the restructuring of the Senior Debt, early redemption of Equity Notes, and debt buy backs using money from TML claims and the proceeds from a rights issue).

Impact of financial operations
((pound)million)           Debt         Exceptional   Annual interest
                           reduction    profit        charge reduction

                                        1999
Exchange rate FRF/(pound)  10.55        10.14         10.14
----------------------------------------------------------------------

Senior Debt Refinancing        -            -           5.3
PLN Buyback                125.3         86.5           1.3
Equity Note Redemption      25.9         27.0          11.6
Debt repurchase            308.7        176.4          12.8
Other financial operations   9.5          6.5           0.1
----------------------------------------------------------------------

Total                      469.4        296.4          31.1
----------------------------------------------------------------------

    This active management of the balance sheet has led to an
improvement in the debt/equity ratio which has improved to 230% at the
end of 1999, a fundamental strengthening of the balance sheet.

----------------------------------------------------------------------
Gearing                        1997                      1999
(pound) billion          before restructuring     after restructuring

----------------------------------------------------------------------
Equity and Equity Notes         0.3                       2.8
Debt                            8.9                       6.3

----------------------------------------------------------------------
Total                           9.2                       9.1
Debt/equity ratio              2643%                      230%
----------------------------------------------------------------------

    After inclusion of the exceptional profit of (pound)296 million
generated by the financial operations, the net profit increased to
(pound)202 million compared with (pound)64 million in 1998.
    Before exceptional profit and exchange differences, the underlying
loss is (pound)139 million, a significant reduction from the
underlying loss of (pound)194 million in 1998. This is due to the
increase in operating profit and the reduction in interest charges.

----------------------------------------------------------------------

Net results                      1999 (a)           1998(b)
In (pound) million               Actual             Reported

Operating profit                 210                 184
Interest                        (349)               (378)
                                -----               -----
Underlying loss                 (139)               (194)
Exchange gains / (losses)         45                 (21)
Exceptional profit
 /Restructuring impact           296                 279
                                -----               -----
Net profit                       202                  64
                                -----               -----

----------------------------------------------------------------------

(a) Exchange rate: (pound)1 = FRF10.14. (b) Exchange rate: (pound)1 = FRF9.76.

3 Continued improvement in the level of interest cover (91% before

capital expenditure, 74% after capital expenditure)

Operating cash flow was (pound)312 million in 1999. Capital expenditure, (pound)59 million, has been primarily to expand the freight shuttle fleet and therefore to increase future revenue. Available cash flow for servicing debt was (pound)253 million. Interest cover has significantly improved, as shown by the level before capital expenditure which has increased to 91% compared with 84% in 1998. After capital expenditure, the level of interest cover is 74% (69% in 1998). This is in line with the Prospectus, and therefore shows a marked improvement as it includes the significant acceleration of the development of the freight shuttle fleet and a level of investment which is much higher than projected in the Prospectus.

4 1999 - a successful year of transition

During this year of transition characterised by the abolition of duty free on 30 June, Eurotunnel succeeded in compensating for the loss of profit from this activity and continued to reinforce its position as cross-Channel market leader.

Eurotunnel Shuttle Services

Freight shuttles

During 1999, Eurotunnel accelerated the expansion of its freight shuttle capacity with three new shuttles coming into service and has therefore been able to benefit from the rapidly expanding Dover-Calais market for accompanied freight (+14%). Eurotunnel carried 838,776 trucks, an increase of 19% compared with 1998, and achieved an average market share for the year of 39%, two percentage points higher than in 1998. The growth was particularly high during the last quarter with a new monthly record of 85,866 trucks carried in November 1999, and Eurotunnel ended the year as market leader.

Passenger shuttles

In anticipation of the loss of duty free sales, Eurotunnel decided to concentrate on the car market, which is more profitable than the coach market. Eurotunnel carried 3,260,166 cars in 1999, a 54% market share, which is two percentage points higher than in 1998.

The number of coaches carried in 1999 (82,074) decreased by 15% compared with 1998 and market share fell to 34%, a decrease of five percentage points.

Total revenue from passenger and freight shuttle services rose by 31%, and accounts for 43.1% of the operating revenue.

Other Services: Retail and Telecommunications

Retail

Revenue in this activity decreased substantially as expected, as a direct result of the disappearance of duty free sales.

Telecommunications

In 1999, Eurotunnel continued to develop its telecommunications business, concentrating on two separate areas of activity: - as a commercial operator, providing high-volume communication

links between London and Paris; - as a provider of telecommunications infrastructure (fibre optics

and cables), laying cables in the tunnel for other operators. In

1999, five contracts were signed for the laying of new telecoms

cables.

Revenue from retail and telecommunications represents 22.5% of operating revenue.

Railway Services

Eurostar, which operates up to 66 trains per day, maintained its position as market leader on the London-Paris/Brussels route, carrying 6.6 million passengers through the Channel Tunnel in 1999 compared with 6.3 million in 1998 (+4.5%). In contrast, rail freight traffic has once more suffered from quality of service problems, 2.9 million tons were carried in 1999 compared with 3.1 million tons in 1998 (-8.8%).

Revenue from the railways (Eurostar and rail freight services), which consists primarily of payments guaranteed under the Minimum Usage Charge, represents 34.4% of operating revenue.

5 After three years of progress, Eurotunnel sets a new target for

2002

Eurotunnel, which had prepared for the abolition of duty free sales, has successfully come through this year of transition and strengthened its position in its markets.

The market of transporting people and goods between the UK and continental Europe is a promising one. The growth of the car market should, as predicted, pick up again next year once the effect of the abolition of duty free and the consequential increases in prices have been absorbed. The strong growth of lorry traffic in recent years should continue.

Given that these markets should experience sustained overall growth, Eurotunnel intends to continue to increase its market shares whilst at the same time increasing prices for its shuttle services to more realistic levels. Eurotunnel will achieve this through increasing its capacity by accelerating the purchase of additional freight shuttles, and through improving the quality of its transport services as well as broadening the range of services available for passengers and transport operators.

As far as the railways are concerned, after a long period of decline there should be a progressive revival in rail freight traffic, given the declared political will to achieve this, and Eurostar's active marketing policy should ensure steady growth of traffic between the three major European capitals of London, Paris and Brussels.

Reviewing the first five years of operation, Patrick Ponsolle, Executive Chairman of Eurotunnel reflected on the outlook for the coming years: "The combination of the essentially fixed nature of our costs and the continuing increases in our revenue should allow us to achieve a strong growth of our results.

"However we will not be able to consider our financial recovery as truly complete until we can cover all of our interest charges by our operational cash flow after capital expenditure. The 1997 Prospectus projected that we would reach this point in 2004.

"Barring a major change in market conditions, we have set ourselves the target to achieve this in 2002."

Notes to Editors

1. The difference in the percentage increase in operating profit

between the Sterling figures (+17%) and the French Franc figures

(+15%) is due to the depreciation charge being accounted for at

historic exchange rates while the other elements of the profit and

loss account are calculated at the exchange rate for the period.

2. The 1999 accounts will be submitted for approval at the Annual

General Meeting in London on 17 May. The shareholder information

meeting will take place the following day in Paris.

Since 1 July 1999 when BAA began to operate the retail activities, BAA pays Eurotunnel a share of its margin subject to certain minimum annual guarantees. Eurotunnel's accounts only show its share of the margin and no longer show separately retail sales and the associated costs (mainly cost of goods sold). In 1999 these costs amounted to (pound)48 million but are still 33% lower than in 1998.

Attachments: Chairmen's message from the Annual Report Financial analysis

Enquiries:

Eurotunnel Press Office tel: 01303 288737

01303 288728

e-mail: press.uk@eurotunnel.com

Eurotunnel Internet site address: www.eurotunnel.com

Eurotunnel reservations: tel: 08705 353535 Eurotunnel travel information: tel: 08000 969 992

Eurostar Press Office tel: 0171 922 4425

0171 922 4494

0171 922 6030 EWS Press Office tel: 0171 713 2486

A Successful Year

Dear Shareholder,

After a year of good results in 1999 - a year which has seen, with the abolition of duty free sales on 30 June, the ending of the key uncertainty affecting the development of the cross-Channel market the time has now come to review where Eurotunnel has got to after its first five years of operation and to reflect on the outlook for the coming years.

Since the start of commercial services during the summer of 1994, the Channel Tunnel has steadily become the fastest and most reliable way of crossing the Channel, borne out by the high level of satisfaction across our various customers. Eurotunnel is today the market leader on the Channel for cars (with 54% of the market) and for trucks (with 39% of the market). It is the exclusive link for Eurostar passenger trains (which carry over 50% of the market between London, Paris and Brussels) and for freight trains between Great Britain and continental Europe.

In parallel with these commercial successes, the balance sheet of our company has been considerably strengthened thanks to the financial restructuring and to the various operations completed during 1999. The debt to equity ratio has been brought to a level which can be considered near to acceptable for an infrastructure company such as ours.

Above all, over the last three years, we have consistently delivered operating results higher than those forecast in the 1997 Prospectus. As a result we have already gone most of the way towards covering our interest charges by our operational cash flow.

These first successes augur well for the future.

Our market - the transport of people and goods between Great Britain and continental Europe - is a promising one: - The growth of car traffic should, as predicted, pick up again next

year once the effect of the abolition of duty free and the

consequential increases in prices have been absorbed. - The strong growth of lorry traffic in recent years should

continue. - Eurostar's active marketing policy should ensure the steady growth

of traffic between the three major European capitals of London,

Paris and Brussels. - All the evidence suggests that, after a long period of decline,

there should be a progressive revival in rail freight traffic

given the declared political will to achieve this.

Given that our market should experience sustained overall growth, our ambition is to increase our market shares whilst at the same time increasing prices for our shuttle services to more realistic levels. We will achieve this through increasing our capacity - as we are doing today by accelerating the purchase of additional freight shuttles and above all by giving priority to improving our quality of service and to broadening the range of goods and services available to our customers, over and above the shopping and catering facilities currently existing on and close to our terminals, to better meet their needs.

To this end, we are completely renewing our internet site. Our target is to have 30% of shuttle bookings made via our internet site within two years, as compared with 3% today, and to offer our extensive customer base a complete range of complementary travel services, including restaurant and hotel reservations, tourist attractions, weather forecasts and road information.

The progress of the last five years has been achieved by an efficient and well motivated management and staff. They have made significant service and productivity improvements as a result of training initiatives at all levels. We are convinced that the distribution of stock options to over 70% of our staff, as approved by shareholders, will significantly assist in increasing the motivation of all of our staff and in continuing the progress in cost control and quality of service.

We intend to continue our strategy of actively managing our balance sheet to strengthen our financial position and to reduce our financial charges. The latter will not be affected by a possible rise in interest rates in the UK and France since, as part of the financial restructuring of 1997, interest rates on Eurotunnel's various debt instruments have been fixed until December 2003.

So the combination of the essentially fixed nature of our costs and the continuing increases in our revenues should allow us to achieve strong growth of our results. This is well demonstrated in 1999 when, despite the loss of duty free margin in the second half, show our operating profits increased by 17% and our underlying loss reduced by 28%.

However, we will not be able to consider our financial recovery as truly complete until we can cover all of our interest charges by our operational cash flow after capital expenditure. The 1997 Prospectus projected that we would reach this point in 2004. The management of your company, supported by your Board, has henceforth fixed as its target to achieve this in 2002, barring any major change in market conditions. At that time, we will be in a position to indicate to you what the subsequent steps will be in your company's development, including the dates for the first profits and dividends.

We hope that the progress of the last three years will give you renewed confidence in the future prospects of the long term investment that you made when you became a Eurotunnel shareholder.

3 March 2000

Patrick Ponsolle Group Executive Chairman

Charles Mackay Deputy Chairman

Taking advantage of financial conditions

During 1999, Eurotunnel vigorously pursued its stategy of active balance sheet management. The objective of this strategy is to generate shareholder value through the optimisation of the Group's capital structure, reducing debt and interest charges. Throughout the year, Eurotunnel was able to take advantage of the fact that a proportion of its debt trades in the secondary market at a substantial discount to face value. As a result, the Group was able to cancel (pound)469 million of debt for only (pound)178 million.

FINANCIAL OPERATIONS

Richard Shirrefs Chief Financial Officer

"Delivering our promise to grow operating profits has created the conditions where we can actively manage our balance sheet, reducing our debt and cutting our interest bill".

Active balance sheet management

February: Senior Debt refinancing

The Senior Debt was refinanced with the margin being reduced from 2.5% to 1%. This margin reduction was also applied to the Fourth Tranche Debt. This generated an annualised interest saving of (pound)5.3 million. Standard and Poor's awarded the refinanced debt an "A" rating.

February: repurchase of part of the Participating Loan Notes

The refinancing of the Senior Debt allowed Eurotunnel to use the money received from TML to repurchase (pound)125 million of Participating Loan Notes (PLNs). This generated an exceptional profit, after fees, of (pound)86 million and an annualised interest saving of (pound)1.3 million. The participation in available cash flow to which the holders of PLNs are entitled post-2005 was reduced from 30% to 26.45% as a result of the repurchase.

May: early redemption of part of the Equity Notes with Units

In response to Eurotunnel's early redemption offer, (pound)256 million of Equity Notes, representing 29.2% of the total then outstanding, were converted into Units on the basis of 1.3 Notes for 1 Unit. This created an exceptional profit, after fees, of (pound)27 million and an annualised interest saving of (pound)11.6 million. Debt outstanding under the Stabilisation Facility was reduced by (pound)26 million of surrendered deferred interest. As a result of this operation, 29.2% of any proceeds of exercise of the 2001 and 2003 Warrants will be available to Eurotunnel to make market repurchases of debt.

December: debt repurchases

Eurotunnel announced in September that it had entered into contracts with some of its debt holders to repurchase (pound)309 million of its debt, comprising (pound)104 million of PLNs, (pound)189 million of Resettable Advances and (pound)16 million of Stabilisation Advances. These operations generated an exceptional profit of (pound)176 million and an annualised interest saving of (pound)12.8 million. The participation in available cash flow to which the holders of PLNs are entitled post-2005 was further reduced to 23.3%. The debt repurchases costing a total of (pound)139 million were funded from the proceeds of a rights issue of 250 million new Units launched in October at an issue price of 65p or 1.02 Euros which raised a total of (pound)150 million after expenses.

Other transactions

Further repurchases of (pound)10 million of debt during 1999 generated an exceptional profit of (pound)7 million.

Details of all these operations are summarised below

----------------------------------------------------------------------
((pound)million)           Debt        Exceptional   Annual interest
                           reduction        profit   charge reduction

                                            1999

Exchange rate(pound)/FRF   10.55       10.14         10.14
----------------------------------------------------------------------

Senior Debt refinancing        -           -           5.3
PLN buyback                125.3        86.5           1.3
Equity Note redemption      25.9        27.0          11.6
Debt repurchase            308.7       176.4          12.8
Other financial operations
                             9.5         6.5           0.1
----------------------------------------------------------------------
Total                      469.4       296.4          31.1

FINANCIAL ANALYSIS

Improved result

The underlying loss after interest, has been reduced to (pound)139 million from (pound)194 million. The net profit for the year is (pound)202 million.

In order to assist the comparison between 1999 and 1998 in this analysis, the operating results for 1998 have been restated at the exchange rate used for the preparation of the 1999 results ((pound)1=FRF10.14) as set out in the table.

Turnover

Total turnover at (pound)654 million for the year is at the same level as 1998 ((pound)655 million). Shuttle services revenue increased by 31% to (pound)271 million with the growth in Freight business and the increase in prices. Revenues from retail and other activities decreased as expected by 27% to (pound)141 million as a direct result of the abolition of duty free sales. Railways revenue is up by 3% at (pound)215 million and is mainly payments guaranteed by the Minimum Usage Charge under the Railways Usage Contract. The ending of the duty free activity caused a 33% reduction in cost of sales. Operating revenue increased by 3% at (pound)627 million. After deduction of cost of sales, operating revenue increased by 8%.

Operating profit

Operating costs decreased in 1999 by 5% due to the reduction in cost of sales. Operating margin therefore increased by 5% to (pound)355 million. The charge for depreciation and provisions has been reduced to (pound)141 million mainly as a result of the extension to the Concession. After deduction of bank fees, depreciation and provisions, operating profit amounted to (pound)210 million compared with (pound)180 million in 1998.

Operating result

----------------------------------------------------------------------
(in (pound)million)         1999         1998      %           1998
                          Actual     Restated    change    Reported
----------------------------------------------------------------------
Exchange rate(pound)/FRF   10.14       10.14                   9.76
----------------------------------------------------------------------
Shuttle services             271         207      +31%          210
Retail and other             141         192      -27%          195
Railways                     215         209       +3%          213
----------------------------------------------------------------------
Operating Revenue            627         608       +3%          618
Other income                  27          47                     48
----------------------------------------------------------------------
Total Turnover               654         655         -          666
Operating costs             (299)       (314)       -5%        (321)
----------------------------------------------------------------------
Operating margin             355         341        +5%         345
Bank fees and restructuring
 costs                        (4)        (11)                   (11)
Depreciation and provisions

                            (141)       (150)                  (150)
----------------------------------------------------------------------
Operating profit             210         180                    184

Interest

Mainly as a result of the financial operations described above and an increase in interest received, the Group's net interest for the year was reduced from (pound)378 million in 1998 to (pound)349 million in 1999.

The exchange gains in 1999 and the losses in 1998 resulted principally from the revaluation of the inter-Group debt and are mainly unrealised.

Net profit

The improvement in operating profit together with the reduction in net interest charges have combined to reduce the Group's underlying loss before exceptional profit and exchange differences from (pound)194 million in 1998 to (pound)139 million in 1999. The exceptional profit of (pound)296 million generated by the financial operations has thus raised the net profit for the year to (pound)202 million compared with (pound)64 million in 1998.

Net results

----------------------------------------------------------------------
(in (pound)million)                          1999               1998
                                           Actual           Reported
----------------------------------------------------------------------
Exchange rate(pound)/FRF                    10.14               9.76
----------------------------------------------------------------------

----------------------------------------------------------------------
Operating profit                              210                184
Interest                                     (349)              (378)
----------------------------------------------------------------------
Underlying loss                              (139)              (194)
Exchange gains/(losses)                        45                (21)
Exceptional profit/
 Restructuring impact                         296                279
----------------------------------------------------------------------
Net profit                                    202                 64
----------------------------------------------------------------------

Cash flow

Cash flow from operations for the year was (pound)312 million. (pound)59 million was spent on capital expenditure, mainly to expand the freight shuttle fleet. Cash flow available for the servicing of finance was (pound)253 million. Interest cover before capital expenditure was 91% compared to 84% last year. Interest cover after capital expenditure was 74% against 69% last year. Net financing charges of (pound)252 million were paid including fees for financial operations. (pound)178 million was used to repurchase debt. This was funded from (pound)150 million received from the net proceeds of the rights issue and from money received in 1998 and 1999 from the settlement of outstanding claims with TML. The total cash and investments were thereby reduced from (pound)231 million at the end of 1998 (re-expressed at (pound)1=FRF10.55) to (pound)207 million at the end of 1999. Of this, (pound)115 million was held in reserve for the payment of interest in January 2000 and (pound)11 million of rights issue money was held in reserve for use at Eurotunnel's discretion.

Cash flow statement

----------------------------------------------------------------------
((pound) million)                     1999                     1998
                                    Actual              As reported
----------------------------------------------------------------------
----------------------------------------------------------------------
Exchange rate(pound)/FRF             10.55                     9.29
----------------------------------------------------------------------

Net cash flow from operations          312                      317
Net insurance                            -                        8
Capital expenditure (net)              (59)                     (57)
----------------------------------------------------------------------
Cash available for servicing debt      253                      268
Net financing costs paid              (246)                    (210)
Financial operations fees               (6)                      (8)
Debt repayment                        (178)                      (7)
Net equity receipts                    150                        -
Receipts from claims settlement          3                       38
----------------------------------------------------------------------
(Decrease)/increase in cash balances   (24)                      81
----------------------------------------------------------------------
Interest cover before capital
 expenditure                            91%                      84%
----------------------------------------------------------------------
Interest cover after capital
 expenditure                            74%                      69%
----------------------------------------------------------------------

EUROTUNNEL GROUP COMBINED ACCOUNTS

Balance sheet

                               31 December 1999      31 December 1998
                                    (pound)'000           (pound)'000

Assets
Tangible fixed assets
Concession fixed assets               9,041,705             9,104,713
Other fixed assets                        3,443                 3,582
Total tangible fixed assets           9,045,148             9,108,295

Financial fixed assets
Shares                                       96                   297
Others                                       42                    59
Total fixed assets                    9,045,286             9,108,651

Stocks                                   13,749                13,625
Trade debtors                            58,625                51,641
Other debtors                            18,532                14,481
Investments and liquid funds            209,251               249,712
Total current assets                    300,157               329,459

Prepaid expenses                          8,331                11,717
Total assets                          9,353,774             9,449,827


Shareholders' funds and liabilities
Issued share capital                    237,667               194,903
Share premium account                 1,772,747             1,400,775
Profit and loss account reserve        (547,719)             (611,534)
Profit for the year                     202,059                63,815
Exchange adjustment reserve             470,891                13,639
Total shareholders' funds             2,135,645             1,061,598

Provisions                               47,111                39,676

Loan notes                            1,532,913             2,156,691
Bank loans and overdrafts             5,435,586             5,973,363
Other creditors                         164,819               167,401
Total creditors                       7,133,318             8,297,455

Deferred income                          37,700                51,098
Total shareholders' funds and
 liabilities                          9,353,774             9,449,827


Profit and Loss Account

                                       Year ended           Year ended
                                 31 December 1999     31 December 1998
                                      (pound)'000          (pound)'000

Turnover
Turnover and other operating income
                                          626,724             618,134
Other income                               27,660              48,242
Total turnover                            654,384             666,376

Operating expenditure
Materials and services (net)              206,900             240,348
Staff costs                                95,220              91,727
Depreciation                              123,751             136,946
Provisions                                 17,456              12,946
Other operating charges                     1,392                 611
Total operating expenditure               444,719             482,578

Operating profit                          209,665             183,798

Financial income
Interest receivable and similar income
                                           12,179               8,584
Profit on disposal of investments
                                              408                 295
Exchange differences                       45,403               3,577
Total financial income                     57,990              12,456

Financial charges
Interest payable and similar charges
                                          361,580             386,613
Exchange differences                          372              24,497
Total financial charges                   361,952             411,110
Financial result                         (303,962)           (398,654)
Exceptional result                        296,388             278,694
Taxation                                       32                  23

Result
Profit for the year                       202,059              63,815
Earnings per Unit                           11.0p                4.3p
Fully diluted earnings per Unit             10.0p                5.3p


Cash Flow Statement

                                       Year ended         Year ended
                                      31 December        31 December
                                             1999               1998
                                      (pound)'000        (pound)'000

Net cash inflow from operating activities
                                          314,870             355,938
Taxation                                      (31)                (24)
Returns on investments and servicing
 of finance                              (246,188)           (210,145)
Capital expenditure                       (58,589)            (57,258)
Other non operating cash flows             (5,753)                (98)

Cash inflow before financing                4,309              88,413

Financing                                 (27,798)             (7,327)

(Decrease)/Increase in cash
 in the period                            (23,489)             81,086

Notes

1. The Summary Financial Statement is extracted from the Report and

Accounts of Eurotunnel which were approved by the Board on 3 March

2000.

2. The Combined Accounts have been prepared applying exchange rates

as described in the notes to the accounts. The average FRF/(pound)

exchange rate in 1999 was (pound)1 = FRF 10.14 (Average 1998

exchange rate: (pound)1= FRF 9.76 ). The 1999 year end exchange

rate was (pound)1= FRF 10.55 (31 December 1998: (pound)1=FRF9.29).

3. The Auditors and Commissaires aux Comptes have reported on the

Combined Accounts. Their report was not qualified.

4. The Combined Accounts consist of the combination of the accounts

of Eurotunnel P.L.C. Group and Eurotunnel S.A. Group. These

Combined Accounts have been prepared on the going concern basis,

under the historical cost convention and in accordance with

accounting principles generally accepted in France and the

accounting policies set out in the notes to the accounts. The

Combined Accounts constitute the Eurotunnel S.A. Group

Consolidated Accounts according to French law.

5.  Earnings/(loss) per Unit

----------------------------------------------------------------------
                                      1999        1998        1998
----------------------------------------------------------------------
                                                 restated
----------------------------------------------------------------------
                                         p           p           P
----------------------------------------------------------------------

Basic                                 11.0         4.2         4.3
Pre-exceptional result                (5.1)      (14.1)      (14.5)
Fully diluted                         10.0         5.2         5.3
----------------------------------------------------------------------

The basic earnings per Unit of 11.0p (1998: 4.3p) for the year is calculated using the weighted average number of Units in issue during the year of 1,844,776,545 1998: (1,484,338,500) and the profit for the year of (pound)202,059,000 (1998: (pound)63,815,000). The pre-exceptional loss per Unit of 5.1p (1998: loss of 14.5p) is calculated using the above weighted average number of Units in issue, but using the loss of (pound)94,330,000 (1998: (pound)214,879,000) before crediting the exceptional profit of (pound)296,388,000 in 1999 (1998: (pound)278,694,000).

The 1998 restated figures reflect the adjustments arising from the December 1999 rights issue. The fully diluted earnings per Unit for the year of 10.0p (1998: 5.3p) is calculated using the fully diluted number of Units of 2,306,325,734 (1998: 1,957,927,541) and the adjusted profit for the year of (pound)230,276,000 (1998: (pound)104,414,000).

Additional information on Eurotunnel can be accessed on the company's home page: http://www.eurotunnel.com