-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BmIsF/jJA5D1qf3/9zmHUUKBUI0hkNbP6r4ES0Imj/PMPopbNs4WO4jDkhyY/oz4 S00AlR/rFujLx62HQ0Safg== 0000940180-97-001031.txt : 19971113 0000940180-97-001031.hdr.sgml : 19971113 ACCESSION NUMBER: 0000940180-97-001031 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NTL INC /DE/ CENTRAL INDEX KEY: 0000906347 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 521822078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22616 FILM NUMBER: 97716695 BUSINESS ADDRESS: STREET 1: 110 E 59TH ST STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129048440 MAIL ADDRESS: STREET 1: 110 EAST 59TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL CABLETEL INC DATE OF NAME CHANGE: 19930601 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-22616 ------------------------------------------------------------- NTL INCORPORATED - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-1822078 - ------------------------------- ------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 E. 59/th/ Street, New York, New York 10022 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212) 906-8440 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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 file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- The number of shares outstanding of the issuer's common stock as of September 30, 1997 was 32,154,068. NTL Incorporated and Subsidiaries Index
PART I. FINANCIAL INFORMATION Page - ------------------------------ ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets- September 30, 1997 and December 31, 1996.......................... 2 Condensed Consolidated Statements of Operations- Three and nine months ended September 30, 1997 and 1996........... 3 Condensed Consolidated Statement of Shareholders' Equity (Deficiency) - Nine months ended September 30, 1997........ 4 Condensed Consolidated Statements of Cash Flows- Nine months ended September 30, 1997 and 1996..................... 5 Notes to Condensed Consolidated Financial Statements.............. 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition................................ 13 PART II. OTHER INFORMATION - ---------------------------- Item 6. Exhibits and Reports on Form 8-K.................................. 21 SIGNATURES .................................................................. 22 - ----------
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NTL Incorporated and Subsidiaries Condensed Consolidated Balance Sheets
September 30, December 31, 1997 1996 ------------------------------------------------ Assets (unaudited) (see note) Current assets: Cash and cash equivalents $ 390,400,000 $ 445,884,000 Marketable securities 39,440,000 - Accounts receivable--trade, less allowance for doubtful accounts of $4,847,000 (1997) and $3,870,000 (1996) 94,942,000 57,887,000 Other 23,996,000 37,270,000 ------------------------------------------------ Total current assets 548,778,000 541,041,000 Fixed assets, net 1,616,715,000 1,459,528,000 Intangible assets, net 363,812,000 392,933,000 Other assets, net of accumulated amortization of $28,215,000 (1997) and $21,789,000 (1996) 84,346,000 61,109,000 ------------------------------------------------ Total assets $ 2,613,651,000 $ 2,454,611,000 ================================================ Liabilities and shareholders' equity (deficiency) Current liabilities: Accounts payable $ 34,634,000 $ 57,960,000 Accrued expenses and other 146,800,000 101,228,000 Accrued construction costs 35,169,000 62,723,000 Deferred revenue 34,035,000 16,491,000 Deferred purchase price 566,000 60,537,000 Current portion of long-term debt 226,352,000 - ------------------------------------------------ Total current liabilities 477,556,000 298,939,000 Long-term debt 1,983,071,000 1,732,168,000 Other 423,000 459,000 Commitments and contingent liabilities Deferred income taxes 68,499,000 94,931,000 Senior redeemable exchangeable preferred stock, $.01 par value, plus accreted dividends; liquidation preference - $1,000 per share; less unamortized discount of $3,522,000 (1997); issued and outstanding 107,000 shares (1997) and none (1996) 104,931,000 - Shareholders' equity (deficiency): Series preferred stock--$.01 par value; authorized 2,500,000 shares; issued and outstanding 780 shares (1997 and 1996) - - Common stock--$.01 par value; authorized 100,000,000 shares; issued and outstanding 32,154,000 (1997) and 32,066,000 (1996) shares 322,000 321,000 Additional paid-in capital 541,250,000 548,647,000 Cumulative translation adjustment 78,386,000 163,141,000 (Deficit) (640,787,000) (383,995,000) ------------------------------------------------ (20,829,000) 328,114,000 ------------------------------------------------ Total liabilities and shareholders' equity (deficiency) $ 2,613,651,000 $ 2,454,611,000 ================================================
Note: The balance sheet at December 31, 1996 has been derived from the audited financial statements at that date. See accompanying notes. 2 NTL Incorporated and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended Nine Months Ended September 30 September 30 ------------------------------------ ------------------------------------ 1997 1996 1997 1996 ------------------------------------ ------------------------------------ Revenues Local telecommunications and television $ 52,125,000 $ 23,928,000 $ 129,551,000 $ 58,556,000 National and international telecommunications 39,916,000 16,302,000 115,259,000 25,876,000 Broadcast transmission and other 32,531,000 34,501,000 96,818,000 51,317,000 Other telecommunications 2,162,000 2,525,000 6,745,000 7,724,000 ------------------------------------ ------------------------------------ 126,734,000 77,256,000 348,373,000 143,473,000 Costs and expenses Operating expenses 75,836,000 49,702,000 217,087,000 91,567,000 Selling, general and administrative expenses 40,724,000 34,105,000 122,934,000 80,673,000 Franchise fees 5,848,000 5,541,000 17,608,000 7,374,000 Corporate expenses 4,352,000 4,135,000 13,394,000 9,419,000 Nonrecurring charges 15,982,000 -- 20,537,000 -- Depreciation and amortization 38,430,000 28,163,000 108,254,000 60,764,000 ------------------------------------ ------------------------------------ 181,172,000 121,646,000 499,814,000 249,797,000 ------------------------------------ ------------------------------------ Operating (loss) (54,438,000) (44,390,000) (151,441,000) (106,324,000) Other income (expense) Interest and other income 6,134,000 11,150,000 24,347,000 28,669,000 Interest expense (52,978,000) (43,962,000) (152,095,000) (105,368,000) Foreign currency transaction gains 1,109,000 261,000 912,000 432,000 ------------------------------------ ------------------------------------ (Loss) before income taxes and minority interests (100,173,000) (76,941,000) (278,277,000) (182,591,000) Income tax (provision) benefit 16,816,000 (1,702,000) 21,485,000 (5,183,000) ------------------------------------ ------------------------------------ (Loss) before minority interests (83,357,000) (78,643,000) (256,792,000) (187,774,000) Minority interests -- 4,573,000 -- 11,822,000 ------------------------------------ ------------------------------------ Net (loss) $ (83,357,000) $ (74,070,000) $(256,792,000) $(175,952,000) ==================================== ==================================== Net (loss) per common share $ (2.70) $ (2.35) $ (8.26) $ (5.73) ==================================== ==================================== Weighted average number of common shares used in computation of net (loss) per share 32,122,000 31,561,000 32,101,000 30,717,000 ==================================== ====================================
See accompanying notes. 3 NTL Incorporated and Subsidiaries Condensed Consolidated Statement of Shareholders' Equity (Deficiency) (Unaudited)
Series Common Stock-- Preferred Stock $.01 Par Value Additional Cumulative --------------------------------------- Paid-In Translation Shares Par Shares Par Capital Adjustment (Deficit) ------------------------------------------------------------------------------------------- Balance, December 31, 1996 780 $ - 32,066,000 $ 321,000 $ 548,647,000 $163,141,000 $ (383,995,000) Exercise of stock options 68,000 1,000 1,153,000 Exercise of warrants 20,000 110,000 Accreted dividends on senior redeemable exchangeable preferred stock (8,453,000) Accretion of discount on senior redeemable exchangeable preferred stock (207,000) Net loss for the nine months ended September 30, 1997 (256,792,000) Currency translation adjustment (84,755,000) ------------------------------------------------------------------------------------------- Balance, September 30, 1997 780 $ - 32,154,000 $ 322,000 $ 541,250,000 $ 78,386,000 $(640,787,000) ===========================================================================================
See accompanying notes. 4 NTL Incorporated and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30 ---------------------------------------- 1997 1996 ---------------------------------------- Net cash (used in) operating activities $ (62,899,000) $ (13,237,000) Investing activities Purchase of fixed assets (354,919,000) (315,767,000) Acquisition of subsidiary, net of cash acquired - (300,994,000) Payment of deferred purchase price (57,064,000) - Increase in other assets (2,073,000) (1,819,000) Purchase of marketable securities (459,504,000) - Proceeds from sales of marketable securities 423,410,000 - ---------------------------------------- Net cash (used in) investing activities (450,150,000) (618,580,000) Financing activities Principal payments (13,043,000) (93,739,000) Proceeds from borrowings and sale of preferred stock, net of financing costs 490,556,000 1,141,085,000 Cash released from escrow - 1,594,000 Proceeds from borrowings from minority partner - 30,726,000 Proceeds from exercise of stock options and warrants 1,264,000 1,332,000 ---------------------------------------- Net cash provided by financing activities 478,777,000 1,080,998,000 Effect of exchange rate changes on cash (21,212,000) 14,618,000 ---------------------------------------- Increase (decrease) in cash and cash equivalents (55,484,000) 463,799,000 Cash and cash equivalents at beginning of period 445,884,000 175,283,000 ---------------------------------------- Cash and cash equivalents at end of period $ 390,400,000 $ 639,082,000 ======================================== Supplemental disclosure of cash flow information Cash paid during the period for interest exclusive of amounts capitalized $ 47,808,000 $ 12,009,000 Income taxes paid 31,000 367,000 Supplemental schedule of noncash financing activities Shares of senior redeemable exchangeable preferred stock issued for accrued dividends $ 6,719,000 $ - Accretion of dividends and discount on senior redeemable exchangeable preferred stock 1,941,000 - Warrants issued in connection with consent solicitations - 1,641,000 Common stock issued for acquisition - 34,137,000 Liabilities incurred in connection with acquisitions - 80,117,000
See accompanying notes. 5 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements Note A - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1996. Net loss per share is computed based on the weighted average number of common shares outstanding during the periods after giving effect to the accreted dividends on the Senior Redeemable Exchangeable Preferred Stock. Common stock equivalents are excluded because they are antidilutive. In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share". SFAS No. 128 establishes new standards for computing and presenting earnings per share and is effective for financial statements issued for periods ending after December 15, 1997. The Company will adopt SFAS No. 128 effective with its 1997 year end. The adoption of SFAS No. 128 would not have changed the net loss per share for the three and nine months ended September 30, 1997 and 1996. In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. SFAS No. 130 is effective for fiscal years beginning after December 15, 1997. The Company will adopt SFAS No. 130 for its fiscal year ending December 31, 1998. In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 131 establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. SFAS No. 131 is effective for financial statements for periods beginning after December 15, 1997. The Company will adopt SFAS No. 131 for its fiscal year ending December 31, 1998. 6 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note B - Fixed Assets Fixed assets consists of:
September 30, December 31, 1997 1996 ---------------------------------------------- (unaudited) Operating equipment $1,387,017,000 $1,080,135,000 Other equipment 215,831,000 197,368,000 Construction-in-progress 217,736,000 305,372,000 ---------------------------------------------- 1,820,584,000 1,582,875,000 Accumulated depreciation 203,869,000 123,347,000 ---------------------------------------------- $1,616,715,000 $1,459,528,000 ============================================== Note C - Intangible Assets Intangible assets consists of: September 30, December 31, 1997 1996 ---------------------------------------------- (unaudited) License acquisition costs, net of accumulated amortization of $44,130,000 (1997) and $34,894,000 (1996) $125,606,000 $134,909,000 Goodwill, net of accumulated amortization of $11,263,000 (1997) and $5,986,000 (1996) 238,206,000 258,024,000 ---------------------------------------------- $363,812,000 $392,933,000 ==============================================
In October 1996, the Company acquired the remaining 40% interest it did not already own in CableTel Newport in exchange for 780 shares of the Company's Series A Preferred Stock. CableTel Newport owns and operates cable television ("CATV"), telephone and telecommunications franchises in South Wales. The Series A Preferred Stock was valued at $49,000,000, based on an appraisal as of the date of issuance. The fair value of the net tangible assets acquired of $67,710,000 exceeded the aggregate purchase price by $18,648,000, which is classified as a reduction to license acquisition costs. In September 1996, the Company acquired the remaining 30% minority interest of English Cable Enterprises, Inc. ("ECE") that the Company did not own, in exchange for 1,415,000 shares of its common stock. ECE, through its subsidiaries, owns four CATV, telephone and telecommunications licenses in the northern suburbs of London. The value of the shares, based on the market price on the date of issuance, of $34,137,000 plus costs incurred of $204,000 exceeded the fair value of the net tangible assets acquired by $28,649,000, which is classified as license acquisition costs. In May 1996, an indirect wholly-owned subsidiary of the Company, NTL Investment Holdings Limited ("NTLIH") acquired NTL Group Limited for payments of approximately (Pounds)204,000,000 at closing, (Pounds)17,100,000 in October 1996 and (Pounds)35,000,000 in May 1997. NTL Group Limited provides television and radio transmission services and a range of other services in the broadcasting and telecommunications industries. This acquisition has been accounted for as a purchase, and, 7 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note C-Intangible Assets (continued) accordingly, the net assets and results of operations of NTL Group Limited have been included in the consolidated financial statements from the date of acquisition. The aggregate purchase price of (Pounds)256,100,000 ($439,000,000) plus costs incurred of $3,700,000 exceeded the fair value of the net tangible assets acquired by $263,000,000, which is classified as goodwill. The pro forma unaudited consolidated results of operations for the nine months ended September 30, 1996 assuming consummation of the above mentioned transactions as of January 1, 1996 are as follows: Total revenue $ 205,993,000 Net loss (188,089,000) Net loss per common share (6.12) Note D - Long-Term Debt and Redeemable Exchangeable Preferred Stock Long-term debt consists of:
September 30, December 31, 1997 1996 ------------------------------------------ (unaudited) 10-7/8% Senior Deferred Coupon Notes $ 189,820,000 $ 175,368,000 12-3/4% Series A Senior Deferred Coupon Notes 202,951,000 185,043,000 11-1/2% Series B Senior Deferred Coupon Notes 723,550,000 665,257,000 10% Series B Senior Notes 400,000,000 - 7-1/4% Convertible Subordinated Notes 191,750,000 191,750,000 7% Convertible Subordinated Notes 275,000,000 275,000,000 Term Loan and Revolving Facility 226,352,000 239,750,000 ------------------------------------------ 2,209,423,000 1,732,168,000 Less current portion 226,352,000 - ------------------------------------------ $1,983,071,000 $1,732,168,000 ==========================================
In October 1997, the principal and accrued interest outstanding under the NTLIH Term Loan and Revolving Facility was repaid using cash on hand. At September 30, 1997, there was (Pounds)140,000,000 ($226,352,000) principal amount and (Pounds)138,000 ($223,000) accrued interest outstanding. The NTLIH Term Loan and Revolving Facility principal amount was classified as a current liability at September 30, 1997 due to the repayment in October 1997. In August 1997, NTL (UK) Group, Inc., a wholly-owned subsidiary of the Company, which is the holding company for the United Kingdom operations and the parent company of NTLIH, and NTLIH entered into an agreement with The Chase Manhattan Bank pursuant to which Chase has agreed to fully underwrite an (Pounds) 875,000,000, eight-year term loan facility with an initial four-year revolving period. The facility will be used to finance capital expenditures and working capital for the Company's United Kingdom operations, including its local broadband, national telecommunications and national digital television networks. A portion of the facility ((Pounds)75,000,000) is conditional upon the execution of contracts to provide digital television transmission services to certain third parties. Pending the closing, Chase has provided a portion of the (Pounds)875,000,000 facility in the form of a (Pounds)150,000,000 facility to the Company on substantially the same terms as to restrictions, covenants, guarantees and security as the (Pounds)875,000,000 facility. 8 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note D - Long-Term Debt and Redeemable Exchangeable Preferred Stock (continued) The principal amount outstanding under the (Pounds)150,000,000 facility is required to be repaid on September 30, 1999. Interest will be payable either monthly, quarterly or semi-annually, at the option of NTLIH, at LIBOR plus 2.25% per annum. The commitment fee is .375% per annum on the unutilized portion of the (Pounds)150,000,000 facility and is payable quarterly in arrears. The facility is secured by first fixed and floating charges over all present and future assets and undertakings of the United Kingdom group. The facility contains customary financial covenants, and certain restrictions relating to, among other things: (i) incurrence of additional indebtedness or guarantees, (ii) investments, acquisitions and mergers and (iii) dividend and other payment restrictions. In February 1997, the Company issued $400,000,000 aggregate principal amount of 10% Senior Notes due 2007 (the "10% Notes") and $100,000,000 of 13% Senior Redeemable Exchangeable Preferred Stock (the "Redeemable Preferred Stock"). The Company received net proceeds of $389,000,000 and $96,625,000, after discounts and commissions, from the issuance of the 10% Notes and the Redeemable Preferred Stock, respectively. The aggregate of the discounts and commissions and other fees incurred of $15,563,000 were included in deferred financing costs ($11,834,000) and unamortized discount ($3,729,000). In June 1997, all of the 10% Notes were exchanged for 10% Series B Senior Notes due 2007 and all but 5 shares of the Redeemable Preferred Stock were exchanged for 13% Series B Senior Redeemable Exchangeable Preferred Stock. The new notes and new preferred stock have terms substantially identical to those of the old notes and old preferred stock. The 10% Notes accrue interest at 10% per annum, payable semiannually beginning on August 15, 1997. The 10% Notes are effectively subordinated to all existing and future indebtedness and other liabilities and commitments of the Company's subsidiaries. The 10% Notes may be redeemed at the Company's option, in whole or in part, at any time on or after February 15, 2002 at a redemption price of 105% that declines annually to 100% in 2005, in each case together with accrued and unpaid interest to the date of redemption. The indenture governing the 10% Notes contains restrictions relating to, among other things: (i) incurrence of additional indebtedness and the issuance of preferred stock, (ii) dividend and other payment restrictions and (iii) mergers, consolidations and sales of assets. 9 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note D - Long-Term Debt and Redeemable Exchangeable Preferred Stock (continued) Of the 2,500,000 authorized shares of Series Preferred Stock, 100,000 shares of Redeemable Preferred Stock were issued. Dividends accrue at 13% per annum ($130 per share) and are payable quarterly in arrears commencing on May 15, 1997. Dividends, whether or not earned or declared, will accrue without interest until declared and paid, which declaration may be for all or part of the accrued dividends. Dividends accruing on or prior to February 15, 2004 may, at the option of the Company, be paid in cash, by the issuance of additional Redeemable Preferred Stock or in any combination of the foregoing. As of September 30, 1997, the Company has issued approximately 7,000 shares for approximately $6,719,000 of accrued dividends. The Redeemable Preferred Stock may be redeemed, at the Company's option, in whole or in part, at any time on or after February 15, 2002 at a redemption price of 106.5% of the liquidation preference of $1,000 per share that declines annually to 100% in 2005, in each case together with accrued and unpaid dividends to the redemption date. The Redeemable Preferred Stock is subject to mandatory redemption on February 15, 2009. On any scheduled dividend payment date, the Company may, at its option, exchange all of the shares of Redeemable Preferred Stock then outstanding for the Company's 13% Subordinated Exchange Debentures due 2009 (the "Subordinated Debentures"). The Subordinated Debentures, if issued, will bear interest at a rate of 13% per annum, payable semiannually in arrears on February 15 and August 15 of each year commencing with the first such date to occur after the date of exchange. Interest accruing on or prior to February 15, 2004 may, at the option of the Company, be paid in cash, by the issuance of additional Subordinated Debentures or in any combination of the foregoing. The Subordinated Debentures will be redeemable, at the Company's option, in whole or in part, on or after February 15, 2002 at a redemption price of 106.5% that declines annually to 100% in 2005, in each case together with accrued and unpaid interest to the redemption date. Note E - Restructuring In September 1997, the Company announced a reorganization of certain of its operations. The Company will be consolidating the Customer Operations departments currently serving its three franchise areas in England into one department, and will be consolidating certain operations and management groups within the Broadcast Services division, as well as certain other consolidations or cessations of activities. As a result, the Company recorded restructuring charges of $15,811,000, which are included in Nonrecurring charges. This charge consisted of employee severance and related costs of $6,688,000 from approximately 280 employees to be terminated, lease exit costs of $6,509,000 and penalties associated with the cancellation of contractual obligations of $2,614,000. As of September 30, 1997, $717,000 of the provision has been used. Note F - Commitments and Contingent Liabilities As of September 30, 1997, the Company was committed to pay approximately $88,000,000 for equipment and services. The Company has licenses issued by the United Kingdom Department of Trade and Industry ("DTI") and the United Kingdom Independent Television Commission ("ITC") for its cable 10 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note F - Commitments and Contingent Liabilities (continued) television, telephone and telecommunications business and by the Federal Communications Commission ("FCC") for its microwave transmission business. The initial terms of the Company's licenses was 23 years for the DTI licenses, 15 years for the ITC licenses and 10 years for the FCC licenses. The Company's licenses expire in 2008 to 2016 for the DTI licenses, 1999 to 2005 for the ITC licenses and 2001 for the FCC licenses. The DTI requires a fixed annual renewal fee of (Pounds)2,500 ($4,100) per license. The ITC requires an annual license fee ranging from (Pounds)1,300 ($2,100) to (Pounds)7,900 ($12,800) per license based on the number of homes in the licensed area, which is subject to adjustment annually. The FCC requires an annual license fee of $140 per license, which is subject to adjustment annually. The Company's license fees paid in the nine months ended September 30, 1997 were $171,000. In addition, the Company was awarded certain newly issued licenses by the ITC in 1995. Pursuant to the terms of the local delivery license ("LDL") for Northern Ireland granted to a wholly-owned subsidiary of the Company, the Company is required to make annual cash payments to the ITC for fifteen years commencing in January 1997 in the amount of approximately (Pounds)14,400,000 ($23,282,000) (subject to adjustments for inflation). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first ten years and 2% for the last five years of the fifteen year license. The Company paid $17,608,000 in the nine months ended September 30, 1997. Pursuant to the terms of the LDL for Glamorgan and Gwent, Wales granted to a wholly-owned subsidiary of the Company, the Company is required to make annual cash payments to the ITC for fifteen years, commencing in the first full calendar year after the start of operations, in the amount of (Pounds)104,188 ($168,000). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first five years, 2% for the second five years and 4% for the last five years of the fifteen year license. A significant portion of NTL Group Limited's revenues is attributable to the provision of television and radio transmission and distribution services and the provision of telecommunications services. In the United Kingdom, the provision of such services is governed by the Telecommunications Act and the Wireless Telegraphy Act 1949. NTL Group Limited holds four licenses under the Telecommunications Act. The initial terms of these licenses were 10 or 25 years. These licenses expire in 2002 to 2016. NTL Group Limited holds a number of Wireless Telegraphy Act licenses which continue in force primarily from year to year unless revoked or unless any of the license fees are not paid. The current annual fees for these licenses is an aggregate of (Pounds)1,541,000 ($2,491,000), of which (Pounds)996,000 ($1,623,000) has been paid in the nine months ended September 30, 1997. The Company is involved in, or has been involved in, certain disputes and litigation arising in the ordinary course of its business. In September 1996, a customer of NTL Group Limited issued a writ in the United Kingdom High Court of Justice claiming unliquidated damages for breach of contract and misrepresentation. The Company considers the claim to be unmerited, and is defending the action. In addition, the Company is involved in other contractual disputes and disputes involving claims for damages to property and personal injury resulting from construction of the Company's networks and the maintenance and servicing of the Company's transmission masts. None of these matters are expected to have a material adverse effect on the Company's financial position, results of operations or cash flows. 11 NTL Incorporated and Subsidiaries Notes to Condensed Consolidated Financial Statements (continued) Note G - Subsequent Event In October 1997, following the U.S. District Court's decision to dismiss the Company's complaint against LeGroupe Videotron Ltee and its subsidiary, the Company entered into a Settlement Agreement dismissing with prejudice the Company's complaint in exchange for a payment of $10,000,000. 12 NTL Incorporated and Subsidiaries ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The following table illustrates the number of homes passed, the number of homes marketed and the total number of customers for the Company's newly constructed dual network:
======================================================================================================= NEWLY CONSTRUCTED DUAL NETWORK ------------------------------------------------------------------------------------------------------- September 30, December 31, September 30, 1997 1996 1996 ------------------------------- ----------------------- ----------------------- ----------------------- Homes passed (1) 957,000 779,100 694,400 ------------------------------- ----------------------- ----------------------- ----------------------- Homes marketed 746,700 467,300 390,800 ------------------------------- ----------------------- ----------------------- ----------------------- Total customers 286,600 168,200 135,300 ------------------------------- ----------------------- ----------------------- ----------------------- Dual 253,100 133,800 105,155 ------------------------------- ----------------------- ----------------------- ----------------------- Telephone-only 14,900 15,950 14,545 ------------------------------- ----------------------- ----------------------- ----------------------- CATV-only 18,600 18,450 15,600 ------------------------------- ----------------------- ----------------------- ----------------------- Total RGUs (2) 539,700 302,000 240,455 ------------------------------- ----------------------- ----------------------- ----------------------- RGU penetration (3) 72.3% 64.6% 61.5% ------------------------------- ----------------------- ----------------------- ----------------------- Telephone penetration 35.9% 32.0% 30.6% ------------------------------- ----------------------- ----------------------- ----------------------- CATV penetration 36.4% 32.6% 30.9% =============================== ======================= ======================= =======================
(1) "Homes passed" is the expression in common usage in the cable industry as the measurement of the size of a cabled area, meaning the total number of residential premises which have the potential to be connected to the Company's network. This number does not include CATV-only homes which are only included in the Company's homes passed for the purpose of its regulatory milestones. (2) An RGU (revenue generating unit) is one CATV account or one telephone account; a dual customer generates two RGUs. (3) RGU penetration is the number of RGU's per 100 homes marketed. 13 NTL Incorporated and Subsidiaries RESULTS OF OPERATIONS Three Months Ended September 30, 1997 and 1996 - ---------------------------------------------- Local telecommunications and television revenues increased to $52,125,000 from $23,928,000 as a result of customer growth that increased the Company's current revenue stream. National and international telecommunications revenues increased to $39,916,000 from $16,302,000 as a result of new site acquisition, installation, design and construction projects in 1997 as well as additional site sharing revenue in 1997. Broadcast transmission and other revenues decreased to $32,531,000 from $34,501,000. In 1996, the Company earned one-time revenues from an installation project. The decrease was offset by the revenues from NTL Group Limited's ten-year contract to broadcast Channel 5 in the United Kingdom which commenced in 1997. Operating expenses increased to $75,836,000 from $49,702,000 because of costs associated with the commencement of the Channel 5 broadcasting contract and costs associated with the new national and international telecommunications projects as well as increases in programming costs, interconnection costs and costs of operating the telecommunications and CATV network. Selling, general and administrative expenses increased to $40,724,000 from $34,105,000 as a result of additional personnel and overhead to service the increasing customer base. Franchise fees of $5,848,000 and $5,541,000 in 1997 and 1996, respectively, are for the Northern Ireland license. Corporate expenses increased to $4,352,000 from $4,135,000 due to an increase in personnel and related costs. The 1997 and 1996 amounts include $463,000 and $814,000, respectively, of non-cash expense related to non-compete agreements. Nonrecurring charges of $15,982,000 are comprised of restructuring costs of $15,811,000 and deferred costs written-off of $171,000. Restructuring costs include costs of employee severance and related costs, lease exit costs and penalties associated with the cancellation of contractual obligations. Write-off deferred costs of $171,000 relate to the Company's unsuccessful bid for Digital Terrestrial Television ("DTT") multiplex licenses. Depreciation and amortization expense increased to $38,430,000 from $28,163,000 primarily due to an increase in depreciation of telecommunications and CATV equipment. Interest and other income decreased to $6,134,000 from $11,150,000 as a result of a decrease in amounts available for short term investment. Interest expense increased to $52,978,000 from $43,962,000 due to the issuance of the 10% Senior Notes in February 1997. Interest of $25,987,000 and $2,386,000 was paid in the three months ended September 30, 1997 and 1996, respectively. Foreign currency transaction gains of $1,109,000 in 1997 and $261,000 in 1996 are the result of changes in the exchange rate. 14 NTL Incorporated and Subsidiaries Nine Months Ended September 30, 1997 and 1996 - --------------------------------------------- As a result of the acquisition of NTL Group Limited in May 1996, the Company consolidated the results of operations of NTL Group Limited from the date of acquisition. Local telecommunications and television revenues increased to $129,551,000 from $58,556,000 as a result of customer growth that increased the Company's current revenue stream. National and international telecommunications revenues increased to $115,259,000 from $25,876,000 as a result of the acquisition of NTL Group Limited in May 1996, plus the new site acquisition, installation, design and construction projects and additional site sharing revenue in 1997. Broadcast transmission and other revenues increased to $96,818,000 from $51,317,000 as a result of the acquisition of NTL Group Limited in May 1996, plus the revenues from NTL Group Limited's ten-year contract to broadcast Channel 5 in the United Kingdom which commenced in 1997. Operating expenses increased to $217,087,000 from $91,567,000. NTL Group Limited operating expenses in the nine months ended September 30, 1997 and 1996 were $136,808,000 and $43,993,000, respectively. The remainder of the increase was the result of increases in programming costs, interconnection costs and costs of operating the telecommunications and CATV network. Selling, general and administrative expenses increased to $122,934,000 from $80,673,000. NTL Group Limited selling, general and administrative expenses in the nine months ended September 30, 1997 and 1996 were $15,826,000 and $7,281,000, respectively. The remainder of the increase was the result of increases in telecommunications and CATV sales and marketing costs and in additional personnel and overhead to service the increasing customer base. Franchise fees of $17,608,000 and $7,374,000 in 1997 and 1996, respectively, are for the Northern Ireland license. Operations in Northern Ireland commenced in June 1996. Corporate expenses increased to $13,394,000 from $9,419,000 due to an increase in personnel and related costs. The 1997 and 1996 amounts include $1,389,000 and $2,442,000, respectively, of non-cash expense related to non-compete agreements. Nonrecurring charges of $20,537,000 are comprised of restructuring costs of $15,811,000 and deferred costs written-off of $4,726,000. Restructuring costs include costs of employee severance and related costs, lease exit costs and penalties associated with the cancellation of contractual obligations. Write-off of deferred costs of $4,726,000 relate to the Company's unsuccessful bid for DTT multiplex licenses. Depreciation and amortization expense increased to $108,254,000 from $60,764,000. The increase was primarily due to an increase in depreciation of telecommunications and CATV equipment. Depreciation and amortization expense of NTL Group Limited and amortization of goodwill as a result of the acquisition was $27,695,000 and $11,977,000 in the nine months ended September 30, 1997 and 1996, respectively. 15 NTL Incorporated and Subsidiaries Interest expense increased to $152,095,000 from $105,368,000 due to the issuance of the 10% Senior Notes in February 1997, the issuance of the 7% Convertible Subordinated Notes in June 1996 and the increase in accretion of the original issue discount on the 11 1/2% Series B Senior Deferred Coupon Notes. Interest of $52,941,000 and $12,009,000 was paid in the nine months ended September 30, 1997 and 1996, respectively. Foreign currency transaction gains of $912,000 in 1997 and $432,000 in 1996 are the result of changes in the exchange rate. LIQUIDITY AND CAPITAL RESOURCES The Company will require significant amounts of capital to finance construction of its network, for connection of telephone, telecommunications and CATV customers to the network, for working capital and for debt service. Based on the information currently available to the Company, the Company currently estimates that, from October 1, 1997 through September 30, 1998, these requirements will aggregate (Pounds)398 million (approximately $643 million). In addition, in October 1997, the Company repaid the (Pounds)140 million principal amount and accrued interest of the NTLIH Facility (see below). The Company intends to fund its requirements from cash, cash equivalents and marketable securities on hand of $430 million as of September 30, 1997 and with borrowings from the new facility agreement with The Chase Manhattan Bank. The Company's commitments for equipment and services at September 30, 1997 of approximately $88 million are included in the anticipated requirements. In August 1997, NTL (UK) Group, Inc., a wholly-owned subsidiary of the Company, which is the holding company for the United Kingdom operations and the parent company of NTLIH, and NTLIH entered into an agreement with The Chase Manhattan Bank pursuant to which Chase has agreed to fully underwrite an (Pounds)875 million eight-year term loan facility with an initial four-year revolving period. The facility will be used to finance capital expenditures and working capital for the Company's United Kingdom operations, including its local broadband, national telecommunications and national digital television networks. A portion of the facility ((Pounds)75 million) is conditional upon the execution of contracts to provide digital television transmission services to certain third parties. Pending the close, Chase has provided a portion of the (Pounds)875 million facility in the form of a (Pounds)150 million facility to the Company on substantially the same terms as to restrictions, covenants, guarantees and security as the (Pounds)875 million facility. The principal amount outstanding under the (Pounds)150 million facility is required to be repaid on September 30, 1999. Interest will be payable either monthly, quarterly or semi-annually, at the option of NTLIH, at LIBOR plus 2.25% per annum. 16 NTL Incorporated and Subsidiaries The commitment fee is .375% per annum on the unutilized portion of the (Pounds)150 million facility and is payable quarterly in arrears. The facility is secured by first fixed and floating charges over all present and future assets and undertakings of the United Kingdom group. The facility contains customary financial covenants, and certain restrictions relating to, among other things: (i) incurrence of additional indebtedness or guarantees, (ii) investments, acquisitions and mergers and (iii) dividend and other payment restrictions. In connection with the Chase facility, NTL (UK) Group, Inc. entered into a European Currency Option with a bank in which NTL (UK) Group, Inc. may purchase U.S. dollars at a fixed rate of (Pounds)1 to $1.40. The option is exercisable on specified dates commencing in October 1997 through June 2001 for specified amounts of U.S. dollars. The dates and U.S. dollar amounts correspond to the Company's interest payment dates and amounts for its U.S. dollar denominated debt. In May 1996, NTLIH acquired all the issued shares of NTL Group Limited. To finance a substantial portion of the purchase price for NTL Group Limited, NTLIH obtained from a syndicate of lenders senior secured loan facilities (the "NTLIH Facility") of a maximum principal amount of (Pounds)165 million comprised of: (i) the Term Loan Facility of (Pounds)140 million and (ii) the Revolving Facility of (Pounds)25 million. Loans under the NTLIH Facility incurred interest at an annual rate equal to LIBOR plus a margin that varied from 0.75% per annum to 1.75% per annum, based on certain financial ratios of NTLIH and certain of its subsidiaries. Interest was payable either monthly, quarterly or semiannually, at the option of NTLIH. In October 1997, the principal and accrued interest outstanding under the NTLIH Facility was repaid using cash on hand. At September 30, 1997, there was (Pounds)140,000,000 ($226,352,000) principal amount and (Pounds)138,000 ($223,000) accrued interest outstanding. 17 NTL Incorporated and Subsidiaries The Company is highly leveraged. At September 30, 1997, the Company's total long-term indebtedness (including the Redeemable Preferred Stock) was approximately $2.1 billion, representing approximately 101% of total capitalization. The following table summarizes the terms of those notes and preferred stock issued by the Company.
7% 7-1/4% 11-1/2% 12-3/4% Convertible Convertible Series B Senior Series A Senior Subordinated Subordinated Deferred Coupon Deferred Coupon Notes Notes Notes Notes --------------------- ---------------------- --------------------- --------------------- Net Proceeds ($) (in 000's) 267,437 186,065 582,000 145,125 Issue Date June 12, 1996 April 20, 1995 January 30, 1996 April 20, 1995 Issue Price/(1)/ 100% 100% 57.155% 53.995% Aggregate Principal Amount at Maturity ($) (in 000's) 275,000 191,750 1,050,000 277,803 Maturity Date June 15, 2008 April 15, 2005 February 1, 2006 April 15, 2005 Yield or Interest Rate/(2)/ 7% 7-1/4% 11-1/2% 12-3/4% Interest or Dividend Payment Dates June 15 and April 15 and February 1 and April 15 and December 15 October 15 August 1 October 15 from 12-15-96 from 10-15-95 from 8-1-01 from 10-15-00 Earliest Optional Redemption Date/(4)/ June 15, 1999 April 15, 1998 February 1, 2001 April 15, 2000 Redemption Price (%) /(5)/ 104.9 (1999) to 105.08 (1998) to 105.75 (2001) to 103.64 (2000) to 100 (2006) 100.73 (2004) 100 (2003) 100 (2002) Conversion Price ($) /(6)/ 37.875 27.56 N/A N/A Senior/Subordinated Subordinated Subordinated Senior Senior 10-7/8% Senior Deferred 10% Redeemable Coupon Series B Preferred Notes Senior Notes Stock --------------------- --------------------- --------------------- Net Proceeds ($) (in 000's) 119,797 389,000 96,625 Issue Date October 7, 1993 February 7, 1997 February 7, 1997 Issue Price/(1)/ 58.873% 100% 100% Aggregate Principal Amount at Maturity ($) (in 000's) 212,000 400,000 100,000 Maturity Date October 15, 2003 February 15, 2007 February 15, 2009 Yield or Interest Rate/(2)/ 10-7/8% 10% 13% Interest or Dividend Payment Dates April 15 and February 15 and May 15, August 15, October 15 August 15 November 15 and from 4-15-99 from 8-15-97 February 15 from 5-15-97/(3)/ Earliest Optional Redemption Date/(4)/ October 15, 1998 February 15, 2002 February 15, 2002 Redemption Price (%)/(5)/ 103.107 (1998) to 105 (2002) to 106.5 (2002) to 100 (2000) 100 (2005) 100 (2005) Conversion Price ($) /(6)/ N/A N/A N/A Senior/Subordinated Senior Senior N/A
1. Percent of aggregate principal amount at maturity. 2. Percent per annum. 3. Dividend payments on the Redeemable Preferred Stock are payable in cash or additional shares of Redeemable Preferred Stock, at the Company's option. From 5-15-04 dividend payments are payable in cash. 4. This is the first date when redeemable at the Company's option. 5. Expressed as a percentage of principal amount plus, in each case, accrued and unpaid interest or dividends thereon to the applicable redemption date. 6. This is the conversion price per share of the Company's common stock, adjusted for the four-for-three stock split in August 1995 and subject to further adjustments in certain events. 18 NTL Incorporated and Subsidiaries Based on the information currently available to the Company, the Company currently estimates that, from October 1, 1998 through December 31, 2002 (the date by which the Company currently estimates that its network will have passed the total of 2,090,000 homes required by its regulatory build schedules), the aggregate cost of network construction (including the license payments in respect of the Northern Ireland LDL and the Glamorgan and Gwent LDL) will be approximately (Pounds)717 million (approximately $1.2 billion). Pursuant to the terms of the Northern Ireland LDL, CableTel Northern Ireland Limited (a wholly-owned subsidiary of the Company) is required to make annual cash payments to the ITC for fifteen years in the amount of approximately (Pounds)14.4 million (subject to adjustments for inflation). CableTel Northern Ireland Limited began making payments of (Pounds)1.2 million per month in January 1997. Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first ten years and 2% for the last five years of the fifteen year license. Pursuant to the terms of the Glamorgan and Gwent LDL, CableTel South Wales Limited (a wholly-owned subsidiary of the Company) is required to make annual cash payments to the ITC for fifteen years, commencing in the first full calendar year after the start of operations, in the amount of (Pounds)104,188 (subject to adjustment for inflation). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first five years, 2% for the second five years and 4% for the last five years of the fifteen year license. Cash interest payments on and principal payments of indebtedness of the Company and its subsidiaries from October 1, 1998 through December 31, 2002 will be approximately $1.1 billion and $224 million, respectively (excluding the NTLIH Facility repaid in October 1997 and including assumptions about the (Pounds)875 million bank credit facility and assuming no conversion of convertible debt or refinancing of existing indebtedness and no exchange of the Redeemable Preferred Stock). As described above, the Company has significant capital requirements for the completion of its telephone, telecommunications and CATV network passed the total of 2,090,000 homes required by its regulatory build schedules, for its LDL payments and for scheduled cash interest and principal payments, as well as requirements for other capital expenditures. The Company expects to fund these requirements with funds from the (Pounds)875 million bank credit facility and cash from operations. There can be no assurance that (i) actual construction costs will not exceed the amount estimated above or that additional funding substantially in excess of the amounts estimated above will not be required, (ii) conditions precedent to advances under the new bank credit facility will be satisfied when funds are required, (iii) the Company and its subsidiaries will be able to generate sufficient cash from operations to meet capital requirements, debt service and other obligations as they fall due when required, (iv) the Company will be able to access such cash flow or (v) the Company will not incur losses from its exposure to exchange rate fluctuations or be adversely affected by interest rate fluctuations. The Company's operations are conducted through its direct and indirect wholly- owned subsidiaries. As a holding company, the Company holds no significant assets other than its investments in and advances to its subsidiaries. The Company is therefore dependent upon the receipt of sufficient funds from its subsidiaries to meet its own obligations. Accordingly, the Company's ability to make scheduled interest and principal payments when due to holders of indebtedness of the Company and the Company's ability to pay cash dividends to its stockholders is dependent upon the receipt of sufficient funds from its subsidiaries. 19 NTL Incorporated and Subsidiaries To the extent that the Company obtains financing in United States dollars and incurs costs in the construction and operation of the Company's regional systems in the United Kingdom in British pounds sterling, it will encounter currency exchange rate risks. At September 30, 1997, the Company had invested approximately $394 million in pounds sterling money market instruments and cash accounts to reduce this risk. In addition, the Company's (Pounds)875 million bank credit facility will also reduce this risk. Furthermore, the Company's revenue are generated primarily in British pounds sterling while its interest and principal obligations with respect to most of the Company's existing indebtedness are payable in dollars. A subsidiary of the Company has entered into an option agreement to hedge some of the risk of exchange rate fluctuations related to interest payments on U.S. dollar denominated debt. The information in the preceding paragraphs includes projections; in reviewing such information it should be kept in mind that actual results may differ materially from those in such projections. These projections were based on various factors and were derived utilizing numerous assumptions. Important assumptions and factors that could cause actual results to differ materially from those in these projections include the Company's ability to continue to design networks, install facilities, obtain and maintain any required governmental licenses or approvals and finance construction and development, all in a timely manner at reasonable costs and on satisfactory terms and conditions, as well as assumptions about customer acceptance, churn rates, overall market penetration and competition from providers of alternative services. The failure of such assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. The Company assumes no obligations to update these projections to reflect actual results, changes in assumptions or changes in other factors affecting such projections. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Cash used in operating activities was $62,899,000 and $13,237,000 in the nine months ended September 30, 1997 and 1996, respectively. The increase in cash used in operating activities is primarily due to the significant increase in net loss, which was offset by non-cash charges and changes in operating assets and liabilities. Purchases of fixed assets were $354,919,000 in 1997 and $315,767,000 in 1996 as a result of increased fixed asset purchases and construction in 1997. In May 1997, the Company paid (Pounds)35,000,000 ($57,064,000) to the former shareholders of NTL Group Limited in respect of the final payment of deferred purchase price. Proceeds from borrowings and sale of preferred stock, net of financing costs of $490,556,000 is comprised of the proceeds from the 10% Senior Notes and the 13% Redeemable Exchangeable Preferred Stock of $500,000,000, net of financing costs incurred of $15,608,000, plus proceeds from borrowings under NTLIH's Revolving Facility of (Pounds)8,000,000 ($13,043,000) less $6,879,000 of financing costs paid in connection with the new bank credit facility. Principal payments of $13,043,000 represent the repayment of the NTLIH Revolving Facility. 20 NTL Incorporated and Subsidiaries PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K During the quarter ended September 30, 1997, the Company filed the following current reports on Form 8-K: (i) Report dated August 4, 1997 reporting under Item 5, Other Events, that the Company was engaged in early stage preliminary talks with Telewest plc with regards to a possible business transaction. (ii) Report dated September 25, 1997 reporting under Item 5, Other Events, the announcement that in response to articles appearing in the British press, the Company reiterated its statement in a previous press release that in keeping with its policy it would not comment on any talks with Telewest plc or any other telephony cable provider in the U.K. No financial statements were filed with either of these reports. 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NTL INCORPORATED Date: November 12, 1997 By:/s/ J. Barclay Knapp ------------------------- J. Barclay Knapp President, Chief Executive Officer and Chief Financial Officer Date: November 12, 1997 By:/s/ Gregg Gorelick -------------------------- Gregg Gorelick Vice President-Controller (Principal Accounting Officer) 22 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1997 SEP-30-1997 JAN-01-1997 390,400,000 39,440,000 99,789,000 (4,847,000) 0 23,996,000 1,820,584,000 (203,869,000) 2,613,615,000 477,556,000 1,983,071,000 104,931,000 0 322,000 (21,151,000) 2,613,651,000 0 348,373,000 0 217,087,000 122,934,000 0 152,095,000 (278,277,000) 21,485,000 (256,792,000) 0 0 0 (256,792,000) (8.26) 0
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