<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2000.
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission file number: 000-30075
COMPLETEL LLC
(Exact name of registrant as specified in its charter)
Amsterdam, The Netherlands 98-0202823
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Kruisweg 609
2132 NA Hoofddorp
The Netherlands
(Address of principal executive offices)
(31) 20 666 1701
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 Registrant currently does not have any publicly traded securities.
As of July 1, 2000, the Registrant had outstanding 123,572 units of its common
units.
<PAGE>
COMPLETEL LLC
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION 1
ITEM 1. Financial Statements (unaudited) 1
Consolidated Condensed Balance Sheets as of
June 30, 2000 and December 31, 1999 (unaudited) 1
Consolidated Condensed Statements of Operations for the
Three and Six Months Ended June 30, 2000 and 1999 (unaudited) 2
Consolidated Condensed Statement of Members' Equity (Deficit) for the
Six Months Ended June 30, 2000 (unaudited) 3
Consolidated Condensed Statements of Cash Flows for the
Six Months Ended June 30, 2000 and 1999 (unaudited) 4
Notes to Unaudited Consolidated Condensed Financial Statements (unaudited) 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 17
PART II OTHER INFORMATION 18
ITEM 4. Submission of Matters to a Vote of Security Holders 18
ITEM 6. Exhibits
SIGNATURES 20
</TABLE>
i
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
COMPLETEL LLC AND SUBSIDIARIES
------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Stated in thousands of U.S. Dollars see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 2000 1999
------ --------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 527,604 $ 60,469
Restricted investments 74,443 -
Customer accounts receivable 6,323 1,702
VAT receivables, prepaid expenses and other current assets 26,433 14,892
--------- -----------
Total current assets 634,803 77,063
--------- -----------
LONG-TERM ASSETS:
Property and equipment, net (Note 4) 172,440 92,872
Licenses and other intangibles, net 3,947 4,938
Deferred financing costs, net 20,286 6,352
Other long-term assets 986 872
--------- -----------
Total long-term assets 197,659 105,034
--------- -----------
TOTAL ASSETS $832,462 $ 182,097
======== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Network vendor payables $ 48,212 $ 28,711
Accrued liabilities and trade accounts payable 40,159 24,076
--------- -----------
Total current liabilities 88,371 52,787
--------- -----------
LONG-TERM DEBT 261,675 79,922
--------- -----------
MINORITY INTEREST 117,991 279
REDEEMABLE CUMULATIVE CONVERTIBLE PREFERRED UNITS:
No par value, -0- and 84,070 units authorized, issued and
outstanding, respectively - 113,469
MEMBERS' EQUITY:
Common units, no par value; 131,494 units authorized; 123,572
and 18,485 units issued and outstanding, respectively 623,895 30,065
Deferred compensation (71,992) (28,495)
Other cumulative comprehensive loss (9,673) (3,912)
Accumulated deficit (117,805) (62,018)
--------- -----------
TOTAL MEMBERS' EQUITY 364,425 (64,360)
--------- -----------
TOTAL LIABILITIES AND MEMBERS' EQUITY $ 832,462 $ 182,097
========= ===========
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated balance sheets.
1
<PAGE>
COMPLETEL LLC AND SUBSIDIARIES
------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Stated in thousands of U.S. Dollars see - Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
REVENUES $ 5,202 $ 321 $ 8,136 $ 321
OPERATING EXPENSES:
Network costs 5,254 430 8,228 564
Selling, general and administrative 19,598 7,595 34,658 12,395
Non-cash compensation charges
(credits) (7,072) 188 61,724 223
Depreciation and amortization 4,054 294 7,014 439
------------ ----------- ------------- -----------
Total operating expenses 21,834 8,507 111,624 13,621
------------ ----------- ------------- -----------
OPERATING LOSS (16,632) (8,186) (103,488) (13,300)
OTHER INCOME (EXPENSE):
Interest income 8,775 1,030 9,239 1,591
Interest expense, net of
capitalized interest (6,393) (2,915) (8,296) (4,217)
Foreign exchange loss and
other expense (10,076) (266) (17,906) (266)
------------ ----------- ------------- -----------
Total other income (expense) (7,694) (2,151) (16,963) (2,892)
------------ ----------- ------------- -----------
NET LOSS BEFORE MINORITY INTEREST (24,326) (10,337) (120,451) (16,192)
MINORITY INTEREST IN LOSS OF
CONSOLIDATED SUBSIDIARIES 5,726 710 6,005 710
------------ ----------- ------------- -----------
NET LOSS BEFORE INCOME TAXES (18,600) (9,627) (114,446) (15,482)
INCOME TAX PROVISION - - - -
------------ ----------- ------------- -----------
NET LOSS BEFORE
EXTRAORDINARY ITEM (18,600) (9,627) (114,446) (15,482)
EXTRAORDINARY ITEM - gain on early
extinguishment of debt 1,012 - 1,012 -
------------ ----------- ------------- -----------
NET LOSS (17,588) (9,627) (113,434) (15,482)
ACCRETION OF REDEEMABLE
CUMULATIVE CONVERTIBLE
PREFERRED UNITS - (1,322) (2,353) (2,294)
------------ ----------- ------------- -----------
NET LOSS APPLICABLE TO
COMMON UNITS $ (17,588) $ (10,949) $ (115,787) $ (17,776)
============ =========== ============= ===========
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
2
<PAGE>
COMPLETEL LLC AND SUBSIDIARIES
------------------------------
CONSOLIDATED CONDENSED STATEMENT OF MEMBERS' EQUITY (DEFICIT)
-------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------
(Stated in thousands of U.S. Dollars, except share and per share amounts -
see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Other
Cumulative
Common Units Comprehensive
----------------------- Deferred Income
Number Amount Compensation (Loss)
---------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1999 18,485 $ 30,065 $ (28,495) $ (3,912)
Issuance of forfeitable common units 100 1,150 (1,150) -
Repurchase of forfeitable common units (500) - (3,007) -
Conversion of redeemable cumulative
convertible preferred units to forfeitable
common units 105,487 115,822 - -
Gain on issuance of equity at subsidiary - 375,780 - -
Deferred compensation expense related to
equity based incentive compensation plan - 101,078 (101,078) -
Accretion of redeemable cumulative
convertible preferred units - - - -
Amortization of deferred
compensation - - 61,738 -
Cumulative translation
adjustments - - - (5,761)
Net loss - - - -
---------- ----------- ------------ -------------
BALANCE, June 30, 2000 123,572 $ 623,895 $ (71,992) $ (9,673)
========== =========== ============ =============
<CAPTION>
Total
Accumulated Comprehensive
Deficit Income (Loss) Total
----------- ------------- ---------
BALANCE, December 31, 1999 $ (62,018) $ (52,096) $ (64,360)
======
Issuance of forfeitable common units - - -
Repurchase of forfeitable common units - - (3,007)
Conversion of redeemable cumulative
convertible preferred units to forfeitable
common units - - 115,822
Gain on issuance of equity at subsidiary - - 375,780
Deferred compensation expense related to
equity based incentive compensation plan - - -
Accretion of redeemable cumulative
convertible preferred units (2,353) - (2,353)
Amortization of deferred
compensation - - 61,738
Cumulative translation
adjustments - (5,761) (5,761)
Net loss (113,434) (113,434) (113,434)
----------- ------------- ---------
BALANCE, June 30, 2000 $ (177,805) $ (119,195) $ 364,425
=========== ============= =========
</TABLE>
The accompanying notes are an integral part of this unaudited
condensed consolidated financial statements.
3
<PAGE>
COMPLETEL LLC AND SUBSIDIARIES
------------------------------
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
--------------------------------------------------
(Stated in thousands of U.S. Dollars - see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(113,434) $(15,482)
Adjustments to reconcile net loss to cash
used by operating activities-
Depreciation and amortization 7,014 439
Non-cash compensation expense 61,724 223
Accretion of senior notes 5,319 4,051
Amortization of deferred financing costs 345 -
Minority interest in net loss 6,005 710
Gain on early extinguishment of debt (1,012) -
Unrealized foreign exchange loss 9,373 -
Exchange differences in affiliate payables - 249
Changes in assets and liabilities-
Increase in receivables (4,621) (5,074)
Increase in other current assets (11,541) (1,046)
Decrease (increase) in other long-term assets (114) 113
Increase in accrued liabilities and trade accounts payable 16,083 10,486
--------- --------
Net cash used by operating activities (36,311) (5,331)
--------- --------
INVESTING ACTIVITIES:
Expenditures for property and equipment (91,720) (26,985)
Increase in network vendor payables 19,501 -
Purchase of licenses and other intangibles - (2,543)
Restricted investments, including funds
placed in escrow (74,443) (73,198)
Proceeds from escrowed offering and investment earnings - 73,198
--------- --------
Net cash used by investing activities (146,662) (29,528)
--------- --------
FINANCING ACTIVITIES:
Net proceeds from senior discount notes offering - 70,532
Net proceeds from initial public offering 491,406 -
Gross proceeds from senior notes offering 192,100 -
Repurchase of senior discount notes (14,243) -
Issuance of equity in subsidiary - 4,478
Issuance of redeemable cumulative convertible preferred units - 52,580
Deferred financing costs (14,757) (3,672)
--------- --------
Net cash provided by financing activities 654,506 123,918
--------- --------
Effect of exchange rates on cash (4,398) (5,687)
--------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 467,135 83,372
CASH AND CASH EQUIVALENTS, beginning of period 60,469 3,744
--------- --------
CASH AND CASH EQUIVALENTS, end of period $ 527,604 $ 87,116
========= ========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accretion of redeemable cumulative convertible preferred units $ 2,353 $ 2,294
========= ========
SAB No. 51 gain recorded in members' equity related to
issuance of equity in subsidiary $ 375,780 $ 698
========= ========
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
4
<PAGE>
COMPLETEL LLC AND SUBSIDIARIES
------------------------------
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
--------------------------------------------------------------
1. GENERAL:
--------
CompleTel LLC ("Parent," a Delaware limited liability company) (together with
its wholly-owned subsidiaries, the "Company") seeks to be a leading facilities-
based operator of a technologically advanced, high capacity fiber optic
communications infrastructure and provider of telecommunications and Internet-
related services to business and government end-users, carriers and Internet
service providers in targeted metropolitan areas across Western Europe, with an
initial focus on network deployment in France and Germany. Additionally, the
Company intends to provide Internet access services in France, Germany and the
United Kingdom ("UK"). The Company's deployment plan includes building networks
in ten metropolitan markets in France and seven markets in Germany.
The Company has been principally engaged in developing its business plans,
applying for and procuring regulatory and government authorizations, raising
capital, hiring management and other key personnel, working on the design,
development and construction of its fiber optic networks and operation support
systems, negotiating equipment and facilities agreements, and negotiating
interconnection agreements and certain right-of-way agreements. As a result of
these activities, the Company has experienced significant operating losses and
negative cash flows from operations. The Company expects to continue to
generate negative cash flows from operations in each market while it emphasizes
development, construction and expansion of its business and until the Company
establishes a sufficient revenue generating customer base in that market. The
Company also expects to experience ongoing operating losses and negative cash
flows as it expands its operations in 17 cities in France and Germany currently
included in its business plan and provides Internet-related services in these
cities and the United Kingdom.
The Company is currently implementing its business plan to deploy and operate
metropolitan area networks ("MANs") in 17 cities in France and Germany and
provide Internet-related services in these cities and the United Kingdom. The
Company believes that it has fully funded its current business plan to construct
MANs in these 17 cities and provide the Internet-related services.
5
<PAGE>
2. BASIS OF PRESENTATION:
----------------------
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP") for interim financial information and are in the form
prescribed by the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by U.S. GAAP for complete
financial statements. The interim unaudited financial statements should be read
in conjunction with the audited financial statements of the Company as of and
for the year ended December 31, 1999. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the
three and six month periods ended June 30, 2000 are not necessarily indicative
of the results that may be expected for the year ended December 31, 2000.
The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those estimates. The
Company has adopted a calendar fiscal year. Certain prior year amounts have
been reclassified to conform with the current year presentation.
Functional Currency
Prior to January 1, 2000, the functional currency for CompleTel LLC, CableTel
Management, Inc., CompleTel Holdings LLC, CompleTel N.A.N.V., CompleTel Europe
N.V., CompleTel Holding I B.V., CompleTel Holding II B.V. and CompleTel ECC B.V.
was the U.S. dollar and the functional currency for each of CompleTel Europe's
operating subsidiaries was the applicable local currency. Effective January 1,
2000, the Company's publicly-held subsidiary, CompleTel Europe N.V. ("CompleTel
Europe"), CompleTel Holding I B.V., CompleTel Holding II B.V. and CompleTel ECC
B.V. and each of their subsidiaries, except those in the U.K., utilized the euro
as their functional currency.
3. INITIAL PUBLIC OFFERING:
------------------------
On March 30, 2000, CompleTel Europe completed its initial public offering
("IPO") of common stock. In that offering, CompleTel Europe issued 31,280,000
shares of its common stock in exchange for gross proceeds of approximately
$547.4 million. CompleTel Europe will use the proceeds to (i) further develop
fiber optic networks in its target markets in France and Germany, (ii) fund the
expansion of its Internet-related services, (iii) develop complimentary local
access systems, (iv) fund net operating losses and (v) for general corporate
purposes.
Compensation Charges
CompleTel Europe's IPO caused certain common units of the Company held by
employees of the Company to vest as a result of meeting specified performance
vesting criteria. As a result, the Company recorded compensation expense of
approximately $41.0 million based on the value of those vested common units as
implied by the IPO price received. In addition, based upon the IPO value of the
Company as indicated above, the Company recorded additional compensation expense
and deferred compensation in the quarter ended March 31, 2000, of approximately
$23.2 million and $72.4 million, respectively, for performance vesting units
that did not vest as a result of the IPO but which may vest upon a qualified
sale by Madison Dearborn Partners ("MDP") or in May 2005 based on a deemed
vesting date as defined. The additional deferred compensation will be amortized
to expense over the remaining vesting period to May 18, 2005 (deemed vesting
date if not prior due to a qualified sale by MDP as defined in the executive
securities agreements). The recorded amount of compensation expense and deferred
compensation for these variable awards are adjusted at each reporting date to
reflect management's estimate of the number of such units that will ultimately
vest and the fair market value of those units as of the end of each reporting
period based on the then current market value of the Company's ordinary shares.
Accordingly, as of June 30, 2000, the Company reduced previously recorded
compensation expense and deferred compensation of approximately $ 7.2 million
and $31.1 million, respectively, based on the June 30, 2000 share price of
CompleTel Europe N.V.
The compensation charges (credits) described above are included in non-cash
compensation charges (credits) in the accompanying statement of operations for
the three and six months ended June 30, 2000. Also included in non-cash
compensation charges for the three and six months ended June 30, 2000 is $1.8
million and $3.4 million, respectively, resulting from the recognition of
deferred compensation on fixed stock option awards granted to employees and
other common units of Parent held by employees subject only to time vesting.
6
<PAGE>
4. PROPERTY AND EQUIPMENT:
-----------------------
Property and equipment includes network equipment, office furniture and
equipment, computer equipment and software, leasehold improvements and
construction in progress. These assets are stated at cost and are depreciated
when ready for their intended use. Property and equipment at June 30, 2000 and
December 31, 1999, consisted of the following (in thousands):
June 30, December 31,
2000 1999
---------- ------------
Network equipment $ 78,180 $ 39,955
Office furniture and equipment 3,093 1,521
Computer equipment and software 8,274 5,582
Leasehold improvements 4,257 1,855
Buildings 206 206
---------- -----------
Property and equipment, in service 94,010 49,119
Less: accumulated depreciation (10,509) (4,215)
---------- -----------
Property and equipment, in service, net 83,501 44,904
Network construction in progress 88,939 47,968
---------- -----------
Property and equipment, net $172,440 $ 92,872
========== ===========
5. LONG-TERM DEBT:
---------------
Senior Discount Notes
In February 1999, CompleTel Europe completed an offering of 147,500 units (the
"Units") consisting of $147.5 million aggregate principal amount at maturity of
14% Senior Discount Notes due 2009 (the "Notes") issued by CompleTel Europe and
1,475,000 non-voting Class B Membership Interests of CompleTel Holdings.
CompleTel Europe issued the Notes at a substantial discount from their principal
amount at maturity. The proceeds of the offering, net of offering fees and
costs, were approximately $72.6 million and were held in an escrow account until
CompleTel Europe received a minimum commitment of $90 million in senior credit
facilities. To comply with Netherlands laws, the Notes are guaranteed by the
Company on a senior unsecured basis. As the Company is a holding company with
no operations other than the operations to be conducted by CompleTel Europe and
its subsidiaries, it is unlikely that the Company will have sufficient funds to
satisfy CompleTel Europe's obligations on the Notes if CompleTel Europe is
unable to satisfy its own obligation on the Notes. Of the $75 million gross
proceeds from the offering, approximately $70.5 million was attributed to the
Notes and approximately $4.5 million was attributed to the 1,475,000 Class B
Membership Interests of CompleTel Holdings.
Cash interest will not accrue on the Notes prior to February 15, 2004, with the
Notes accreting to their stated principal amount at maturity at an effective
interest rate of 15.1%. The accretion will be charged to interest expense.
Commencing February 15, 2004, interest on the Notes will accrue at 14% per annum
and will be payable in cash on August 15 and February 15 of each year. The
Notes mature February 16, 2009.
Credit Agreement
In January 2000, CompleTel Europe executed an agreement for a 265 million senior
secured credit facility with Goldman Sachs International and Paribas as co-
arrangers of the facility. The funds were to be available to the Company's
subsidiaries, initially to include CompleTel ECC, CompleTel Services S.A.S.,
CompleTel France and CompleTel Germany, in two tranches including a euro term
facility available until December 31, 2000, in the aggregate amount of (Euro)105
million and a euro revolving loan facility available until December 31, 2002, in
the aggregate amount of (Euro)160 million. The (Euro)160 million tranche was to
become available after May 31, 2000, if the euro term facility was fully drawn,
and other conditions were satisfied. Following December 31, 2002, up to 141
7
<PAGE>
million of the outstanding advances under the euro revolving loan facility will
first be converted into a term loan, and any other outstanding advances will
become part of a 19 million working capital facility. The facility matures on
December 31, 2006.
In April 2000, CompleTel Europe entered into an agreement (the "Suspension
Agreement") with the lenders under its credit facility which provides that
CompleTel Europe will not borrow funds under its credit facility until the
credit facility is amended and that, in turn, during this period, the lenders
will suspend the application of various provisions, including substantially all
of the representations, covenants and events of default in the credit facility.
During such period, certain other provisions of the credit facility will remain
in effect including, without limitation, the obligation to maintain the security
interests of the lenders and to pay, among other things, commitment fees to the
lenders. The Suspension Agreement will be in effect until the earlier of (a)
January 11, 2001, (b) the date CompleTel Europe cancels its credit facility or
(c) the date an amendment to the credit facility is in effect. In the event that
an amendment to the credit facility cannot be agreed upon by six months, or, if
extended by CompleTel Europe, nine months, after the effective date of the
Suspension Agreement, the Suspension Agreement and credit facility will
terminate. After giving effect to this offering, without this suspension of the
covenants, CompleTel Europe would not be able to borrow under its credit
facility without obtaining a waiver from the lenders. CompleTel Europe intends
to negotiate an amendment to the credit facility prior to the expiration of the
Suspension Agreement which will include modifications to the covenants and
permit CompleTel Europe to borrow under such amended credit facility.
Senior Notes
In April 2000, CompleTel Europe completed an offering of an aggregate (Euro)200
million 14% senior notes due 2010 (the "Senior Notes"). A portion of the
proceeds were used to repurchase $27.0 million ((euro)27.6 million) principal
amount at maturity of the Notes. CompleTel Europe lent approximately (Euro)
$74.4 million of the net proceeds of the Senior Notes offering to a wholly-owned
subsidiary which used the funds to invest in a portfolio of securities which is
pledged as security for the Senior Notes. The proceeds of these pledged
securities will be used to make the first six interest payments on the Senior
Notes. The remaining proceeds from the Senior Notes offering will be used to (i)
fund the further deployment of the Company's networks in existing markets and an
additional six cities in France and Germany, (ii) fund the expansion of the
Company's Internet-related services, (iii) develop complementary local access
systems, (iv) fund net operating losses and (v) for general and corporate
purposes.
Long-term debt consists of the following:
June 30, December 31,
2000 1999
-------- ------------
14% Senior Discount Notes, face amount
$147.5 million, due 2009, effective interest rate
of 15.1%, at accreted value $ 71,415 $ 79,922
(Euro)265 million senior secured credit facility - -
14% Senior Notes, face amount
(Euro)200 million due 2010 190,260 -
-------- ------------
Total $261,675 $ 79,922
======== ============
8
<PAGE>
6. SEGMENT REPORTING:
------------------
SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
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. Operating segments are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
9
<PAGE>
Management currently evaluates the Company's development efforts according to
the geographic location of its markets. Certain financial information reflecting
the Company's development efforts is presented below.
As of and for the three months ended June 30, 2000 (in thousands):
<TABLE>
<CAPTION>
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 3,378 $ 477 $ 1,347 $ - $ 5,202
Depreciation and amortization 2,328 1,175 58 493 4,054
Net income (loss) applicable
to common units (17,647) (11,502) (715) 12,276 (17,588)
Total assets 136,650 77,921 2,452 615,439 832,462
Expenditures for long-lived
assets 24,557 27,356 242 4,408 56,583
</TABLE>
As of and for the three months ended June 30, 1999 (in thousands):
<TABLE>
<CAPTION>
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 281 $ - $ 40 $ - $ 321
Depreciation and amortization 188 2 10 94 294
Net loss applicable to common
units (5,419) (592) (237) (4,701) (10,949)
Total assets 45,184 479 971 83,084 129,718
Expenditures for long-lived
assets 15,400 234 18 859 16,511
</TABLE>
As of and for the six months ended June 30, 2000 (in thousands):
<TABLE>
<CAPTION>
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 5,163 $ 702 $ 2,271 $ - $ 8,136
Depreciation and amortization 4,342 1,892 93 687 7,014
Net income (loss) applicable
to common units (30,914) (17,936) (1,024) (65,913) (115,787)
Total assets 136,650 77,921 2,452 615,439 832,462
Expenditures for long-lived
assets 44,296 41,582 407 5,435 91,720
</TABLE>
10
<PAGE>
As of and for the six months ended June 30, 1999 (in thousands):
<TABLE>
<CAPTION>
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 281 $ - $ 40 $ - $ 321
Depreciation and amortization 326 2 10 101 439
Net income (loss) applicable
to common units X(9,548) (735) (650) (6,843) (17,776)
Total assets 45,184 479 971 83,084 129,718
Expenditures for long-lived
assets 25,745 262 39 3,482 29,528
</TABLE>
11
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
When used in this report, the words "intend", "expect," "estimate,"
"anticipate," "project," "believe," "plan," and "should", or other variations
of such terms, are intended to identify forward-looking statements.
Specifically, statements included in this report that are not historical facts,
including statements about our beliefs and expectations about our business and
our industry are forward-looking statements. These statements are subject to
risks and uncertainties that could cause actual results or outcomes to differ
materially. These risks and uncertainties include, but are not limited to, our
ability to do the following in a timely manner: successfully market our network
services to current and new customers; interconnect with and develop cooperative
working relationships with incumbent local exchange carries; develop efficient
operations support systems and other back office systems; successfully and
efficiently transfer new customers to our networks and access new geographic
markets; successfully develop Internet data centers and market our Internet-
related services; identify, finance and complete suitable acquisitions and
partnering arrangements with other companies; secure additional financing
necessary to carry out our plans and expand our services; install new switching
facilities and other network equipment; obtain leased fiber optic line capacity,
rights-of-way, building access rights and any required governmental
authorizations, franchiser and permits; consistently deliver reliable services
and minimize system failures or shutdowns; sucessfully obtain necessary
regulatory approvals and manage changes in regulatory requirments; and other
factors discussed in our filings with the Securities and Exchange Commission.
Forward-looking statements included in this report speak only as of the date of
this report and we will not revise or update these statements to reflect events
or circumstances after the date of this report or to reflect the occurrence of
unanticipated events.
Introduction
We are a rapidly growing CLEC operating in France and Germany. We offer
traditional fixed wireline retail business telecommunications services to our
directly connected on-net customers and sell wholesale services to other
carriers. We also have established an Internet division to offer a full range
of Internet-related services through Internet data centers we are establishing
in France, Germany and the United Kingdom.
Prior to January 1, 2000, the functional currency for CompleTel LLC, CableTel
Management Inc., CompleTel Holdings LLC, CompleTel N.A.N.V., CompleTel Europe
N.V., CompleTel Holding I B.V., CompleTel Holding II B.V. and CompleTel ECC B.V.
was the U.S. Dollar and the functional currency for each of CompleTel Europe's
operating subsidiaries was the applicable local currency. Effective January 1,
2000, the Company's publicly-held subsidiary, CompleTel Europe N.V. ("CompleTel
Europe"), CompleTel Holding I B.V., CompleTel Holding II B.V. and CompleTel ECC
B.V. and each of their subsidiaries, except, those in the U.K., utilized the
euro as their functional currency.
CompleTel LLC currently intends to begin the distribution of CompleTel Europe
N.V. ordinary shares beneficially owned by CompleTel LLC's members, through
optional redemptions of their fully vested units, beginning at the end of the
third quarter 2000, subject to limitations imposed by applicable Dutch law and
Delaware law. Upon all units becoming fully vested, CompleTel LLC currently
intends to permit the optional redemption of such units and initiate the
liquidation process.
Results of Operations
We have generated operating losses and negative cash flow from our operating
activities to date. As a result of our operating history, prospective investors
have limited operating and financial data about us upon which to base an
evaluation of our performance.
Revenues
For the quarter ended June 30, 2000, revenues totaled $5.2 million compared to
$0.3 million for the comparable period in 1999. For the six months ended June
30, 2000 revenues totaled $8.1 million, compared to $0.3 million in the
comparable period in 1999. Since January 1998, we have developed and refined
our business plans, procured regulatory and governmental authorizations for our
17 markets, raised capital, hired management and other key personnel, designed,
developed and begun installing our fiber optic metropolitan area networks and
operation support systems, obtained senior financing commitments and negotiated
equipment and facilities agreements.
Operating Expenses
Our primary operating expenses consist of network costs, selling, general and
administrative expenses, including start-up costs, and depreciation and
amortization expenses.
12
<PAGE>
Network Costs
Network costs for the three and six month periods ended June 30, 2000 totaled
$5.3 million and $8.2 million, respectively, compared to $0.4 million and $0.6
million for the comparable periods in 1999. We expect these costs will increase
as we expand our networks and services. Our network costs include costs such as
interconnection costs, the cost of leasing high capacity digital lines that
interconnect our network with the networks of other providers, the cost of
leasing local loop lines that connect our customers to our network, and switch
site rent, operating and maintenance costs. We also lease dark fiber and
conduit to establish and augment our networks in certain markets.
For the quarter ended June 30, 2000, our direct operating margin, which includes
network costs directly associated with our revenues such as interconnect costs,
totaled $2.7 million, or 50 percent. For the prior quarter, direct operating
margin was over 50 percent. For the three and six month period ended June 30,
2000, our gross margin, which includes all network costs, was approximately
break-even.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses include selling and marketing
costs, customer care, billing, corporate administration, salaries and other
personnel costs and legal fees. For the three and six month periods ended June
30, 2000, selling, general and administrative expenses totaled $19.6 million and
$34.7 million, respectively, compared to $7.6 million and $12.4 million for the
comparable periods in 1999. The $4.0 million increase in the second quarter and
the increase in the comparable 1999 period are due to the rapid growth in
the number of our personnel and associated wages, salaries and related costs.
We are assembling a large, locally based, direct sales force in our local and
regional markets and a national account team to service multiple location
customers and key account executives. To attract and retain a highly
qualified sales force, we offer our sales and customer-care personnel a highly
competitive compensation package. The number of employees increased from 206 as
of June 30, 1999 to 564 as of June 30, 2000. On June 30, 2000, we had a sales
force of 138 (including managers and administrators), compared to 59 on June 30,
1999. We expect the number of sales and marketing personnel to continue to grow
and our selling, general and administrative costs to increase as we develop and
expand our operations.
We incurred amortization of stock-based compensation expense of approximately
$1.6 million and $1.6 million under our fixed stock option plan for the three
and six month ended June 30, 2000. This amount is based on deferred compensation
at the date of grant totaling approximately $32.0 million.
We incurred additional stock-based compensation expense of approximately $41.0
million upon completion of our IPO due to the resulting vesting of certain
CompleTel LLC performance vesting units held by certain of our employees in
connection with a qualified public offering. This compensation expense is based
on an assumed IPO price of (Euro)17.50 ($17.09) per share. In addition, based
upon our value as indicated in the IPO, we recorded compensation expense and
deferred compensation in the quarter ended March 31, 2000, of approximately
$23.2 million and $72.4 million, respectively, for performance vesting units
that will not vest as a result of the IPO but which may vest upon a qualified
sale by Madison Dearborn Partners or in May 2005 based on a deemed vesting date.
The additional deferred compensation is being amortized to expense over the
remaining vesting period to May 18, 2005 (deemed vesting date if not prior due
to a qualified sale by Madison Dearborn Partners). The recorded amount of
compensation expense and deferred compensation for these variable awards are
adjusted at each reporting date to reflect management's estimate of the number
of such units that will ultimately vest and the fair market value of those units
as of the end of the reporting period based on the then current market value of
ordinary shares. Accordingly, as of June 30, 2000, we reduced previously
recorded compensation expense and deferred compensation by approximately $7.2
million and $31.1 million, respectively, based on the June 30, 2000 share price
of CompleTel Europe N.V.
Depreciation and Amortization
For the three and six-month periods ended June 30, 2000, we recorded
depreciation and amortization expense of $4.0 million and $7.0 million,
respectively, compared to $0.3 million and $0.4 million for the comparable
periods in 1999. These increases are due to increases in network and non-network
related property and equipment. We started recording network depreciation during
the quarter ended June 30, 1999 when we initiated network services.
Other Income and Expense
13
<PAGE>
We incurred interest expense, net of $2.6 million of capitalized interest, of
$6.4 million during the quarter ended June 30, 2000. Interest expense for the
quarter ended June 30, 1999 totaled $2.9 million. For the six-month periods
ended June 30, 2000 and 1999, interest expense totaled $8.3 million, net of $3.8
million of capitalized interest and $4.2 million, respectively. The interest
expense recorded reflects interest on our senior notes, the accretion of our
senior discount notes and the amortization of deferred financing costs. We
capitalize a portion of our interest costs as part of the construction cost of
our networks, in accordance with Statement of Financial Accounting Standards No.
34 "Capitalization of Interest Costs" ("SFAS 34").
Interest income totaled $8.8 million and $9.2 million for the three and six
month periods ended June 30, 2000, respectively, compared to $1.0 million and
$1.6 million for the comparable periods in 1999. CompleTel Europe applied for an
exemption from regulations required by the Investment Company Act of 1940. As a
result of the regulation, and until such time that we obtain an exemption, to
remain in compliance with the investment requirements as of June 30, 2000, we
have invested approximately $470.6 million of our initial public offering
proceeds and senior notes proceeds in short-term maturities of U.S. treasury
bills. As a result of this requirement, we have entered into forward currency
contracts for the amount of these investments to minimize our currency exposure.
Foreign Exchange Rates
The revenues, costs, assets and liabilities of CompleTel Europe and its
operating subsidiaries are, for the most part, denominated in euros, which is
their functional currency, effective January 1, 2000. Therefore, they are
exposed to changes in currency exchange rates due to their U.S. dollar
denominated debt and investments. The notes which CompleTel Europe issued in
February 1999 expose us to exchange rate fluctuations as the payment of
principal and interest on the notes will be made in U.S. dollars, and a
substantial portion of our future cash flow used to service these payments will
be denominated in local currencies, including the euro. While we intend to take
steps to minimize exchange rate risks, we cannot assure you that we will not be
materially adversely affected by variations in currency exchange rates.
14
<PAGE>
Net Loss
Our net loss during the three and six month periods ended June 30, 2000 was
$23.3 million and $121.5 million, respectively, compared to net losses during
the similar periods in 1999 of $10.9 million and $17.8 million, respectively.
The increases were primarily the result of non-cash compensation charges and
substantial start-up costs of the operating subsidiaries.
Adjusted EBITDA
Since the commencement of our operations, we have experienced significant
operating losses and negative Adjusted EBITDA, as set forth below. We expect to
continue to generate significant operating losses and negative Adjusted EBITDA
in each of our markets as we develop, construct and expand our business, until
we have established a sufficient revenue-generating customer base in each
market.
We expect to experience increasing consolidated operating losses and negative
cash flows from operations as we expand our operations and enter new markets,
even if and after we have achieved positive cash flow from operations in our
initial markets. The following table summarizes our Adjusted EBITDA calculation
for the periods indicated (amounts in thousands of U.S. Dollars).
<TABLE>
<CAPTION>
Six Months Ended
--------------------
June 30, June 30,
2000 1999
--------- ---------
<S> <C> <C>
Net Loss $(119,160) $(15,482)
Interest expense (net of interest income and capitalized interest) (943) 2,626
Income taxes - -
Depreciation and amortization 7,014 439
Non-cash compensation expense 61,724 223
Foreign exchange loss and other expense 17,906 266
Gain on early extinguishment of debt (1,012) -
--------- --------
Negative Adjusted EBITDA $ (34,471) $(11,928)
========= ========
</TABLE>
In view of our highly leveraged capital structure, we consider Adjusted EBITDA
to be an important performance measure. Adjusted EBITDA consists of net
earnings (loss) before interest expense, interest income, income taxes, non-cash
compensation expense, depreciation and amortization and other non-cash charges,
including foreign currency exchange rate gains and losses. Conceptually,
Adjusted EBITDA measures the amount of income generated each period that could
be used to service debt, because it is independent of the actual leverage
employed by the business; but Adjusted EBITDA ignores funds needed for capital
expenditures, income taxes and expansion. Some investment analysts track the
relationship of Adjusted EBITDA to total debt as one measure of financial
strength. However, Adjusted EBITDA does not represent cash provided or used by
operating activities and you should not consider Adjusted EBITDA in isolation or
as a substitute for measures of performance prepared in accordance with U.S.
generally accepted accounting principles.
You also should be aware that Adjusted EBITDA may differ significantly from cash
flows from operating activities as reflected in a statement of cash flows
prepared in accordance with U.S. generally accepted accounting principles. Cash
from operating activities is net of interest and taxes paid and is a more
comprehensive determination of periodic income on a cash, rather than accrual,
basis and is exclusive of non-cash items of income and expenses such as
depreciation and amortization. In contrast, Adjusted EBITDA is derived from
accrual basis income and is not adjusted for changes in working capital.
Consequently, Adjusted EBITDA is not affected by the timing of receivable
collections or when accrued expenses are paid. We are not aware of any uniform
standards for determining Adjusted EBITDA. Presentations of Adjusted EBITDA may
not be calculated consistently by different companies in the same or similar
businesses. As a result, our reported Adjusted EBITDA may not be comparable to
similarly titled measures used by other companies.
15
<PAGE>
Statements of Cash Flows
------------------------
We had cash and cash equivalents of $527.6 million as of June 30, 2000, an
increase of $467.1 million from $60.5 million as of December 31, 1999. Details
of the change in cash and cash equivalents are set forth in the table below.
<TABLE>
<CAPTION>
Six Months Ended
--------------------
June 30, June 30,
2000 1999
--------- --------
<S> <C> <C>
Cash flows from operating activities $ (36,311) $ (5,331)
Cash flows from investing activities (146,662) (29,528)
Cash flows from financing activities 654,506 123,918
Effect of exchange rates on cash (4,398) (5,687)
--------- --------
Net increase in cash and cash equivalents 467,135 83,372
Cash and cash equivalents at beginning of period 60,469 3,744
--------- --------
Cash and cash equivalents at end of period $ 527,604 $ 87,116
========= ========
</TABLE>
Cash Flows from Operating Activities
During the six months ended June 30, 2000, we used $36.3 million in operating
activities, a $31.0 million increase from the $5.3 million used in operating
activities for the similar period in 1999. This decrease was primarily related
to the substantial organization and start-up costs incurred during the
development of our networks. Our development efforts increased significantly
since the first half of 1999.
Cash Flows from Investing Activities
We used approximately $146.7 million of cash in investing activities during the
six months ended June 30, 2000, compared to a use of $29.5 million for the
similar period in 1999. The increase was primarily due to investment of our
initial public offering proceeds during the first quarter of 2000 and the
purchase of approximately $74.4 million of securities that are currently pledged
as security for our senior notes (see Liquidity and Capital Resources below).
Cash Flows from Financing Activities
We had approximately $654.5 million of cash flows from financing activities
during the six months ended June 30, 2000, compared to $123.9 million for the
similar period in 1999. The increase was due to the proceeds from our initial
public offering and our senior note offering less approximately $14.2 million
used to repurchase a portion of our existing senior discount notes. Cash flows
from financing activities during the first quarter of 1999 resulted from
proceeds from our senior discount note offering and equity contributions from
our parent.
Liquidity and Capital Resources
-------------------------------
The telecommunications business is capital intensive. We have needed and will
continue to need large amounts of capital to fund capital expenditures, working
capital, debt service, and operating losses. As of June 30, 2000, we had $602.0
million of cash and short-term investments and net working capital of $546.4
million.
In January 2000, CompleTel Europe executed an agreement for a (Euro)265 million
senior secured credit facility with Goldman Sachs International and Paribas as
co-arrangers of the facility. As of June 30, 2000, we had no borrowings
outstanding under the facility. In April 2000, we entered into a suspension
agreement with the co-arrangers and other parties whereby we agreed not to
borrow funds under the credit facility in exchange for their agreement to
suspend the application of substantially all of the representations, covenants
and events of default. See Note 5 of the Notes to Unaudited Consoldiated
Condensed Financial Statements included elsewhere in this report for a
discussion of the agreement.
In April 2000, CompleTel Europe completed an offering of an aggregate (Euro)200
million 14% senior notes due 2010 (the "Senior Notes"). A portion of the
proceeds from the Senior Notes offering were used to repurchase $27.0 million
(Euro)27.6 million principal amount at maturity of our existing senior discount
notes. CompleTel Europe lent
16
<PAGE>
approximately $74.4 million of the net proceeds to a wholly-owned subsidiary
which used the funds to invest in a portfolio of securities which is pledged as
security for the Senior Notes. The proceeds of these pledged securities will be
used to make the first six interest payments on the Senior Notes. The remaining
proceeds from the Senior Notes offering will be used to (i) fund the further
deployment of our networks in existing markets and an additional six cities in
France and Germany, (ii) fund the expansion of our Internet-related services,
(iii) develop complementary local access systems, (iv) fund net operating losses
and (v) for general and corporate purposes.
Capital Expenditures
During the quarters ended June 30, 2000 and 1999, we made capital expenditures
of $56.6 million and $16.5 million, respectively, for property and equipment
necessary to deploy networks in our initial markets. For the six-month periods
ended June 30, 2000 and 1999, we made capital expenditures totaling $91.7
million and $29.5 million respectively. We also used capital during these
periods to fund our operating losses.
The actual amount and timing of the Company's future capital requirements may
differ materially from the Company's current estimates, and additional financing
may be required in the event of departures from the Company's business plans and
projections, including those caused by unforeseen delays, cost overruns,
engineering design changes, demand for the Company's services that varies from
that expected by the Company, and adverse regulatory, technological or
competitive developments. The Company may also require additional capital (or
require financing sooner than anticipated) if it alters the schedule or targets
of its roll-out plan in response to regulatory, technological or competitive
developments (including additional market developments and new opportunities in
and outside of its target markets). The Company intends to evaluate potential
joint ventures, strategic alliances, and acquisition opportunities on an ongoing
basis as they arise, and the Company may require additional financing if it
elects to pursue any such opportunities. The Company also may be required to
seek additional financing if it elects to provide complementary
telecommunications services or deploy networks in other Western European markets
beyond its target markets. Sources of additional financing may include
commercial bank borrowings, vendor financing and/or the private or public sale
of equity or debt securities.
The Company is currently implementing its business plan to deploy and operate
metropolitan area networks ("MANs") in 17 cities in France and Germany and
provide Internet-related services in these cities and the United Kingdom. The
Company believes that it has fully funded its current business plan to construct
MANs in these 17 cities and provide the Internet-related services.
Item 3. Quantitative and Qualitative Disclosure about Market Risks
Investment Portfolio and Interest Rate Sensitivity
Our investment policy is limited by the indentures for our outstanding notes and
our senior secured credit facility. We are restricted to investing in financial
instruments with a maturity of one year or less (with certain limited
exceptions). We are required to utilize investments that meet high credit
quality standards, such as obligations of the U.S. government or any European
Economic Community member government or any agency thereof guaranteed by the
country, certificates of deposits, money market deposits, and commercial paper
with a rating of A-1 or P-1. When and if we terminate the suspension of our
credit facility, we would be required to enter into an interest rate hedging
program with respect to 50% of every tranche of (Euro)50 million borrowed to
mitigate foreign currency exchange rate risk.
Interest income earned on our investment portfolio is affected by changes in
short-term interest rates. We are thus exposed to market risk related to changes
in market interest rates. To date, we have managed these risks by monitoring
market rates and the duration of our investments.
Impact of Foreign Currency Rate Changes
Our operations are not significantly exposed to changes in currency exchange
rates because our revenues, costs, assets and liabilities are, for the most
part, denominated in euros. However, the senior discount notes which we issued
in February 1999 expose us to exchange rate fluctuations as the payment of
principal and interest on the notes will be made in dollars, and a substantial
portion of our future cash flows used to service these payments will be
denominated in euros. In addition, because of the issues surrounding our desire
to not be considered an investment company under the Investment Company Act of
1940, we must invest a substantial portion of our available cash in U.S.
government treasury bills with various short-term maturities. Accordingly, we
have executed certain forward currency contracts in order to hedge our risk
against foreign currency fluctuations between the U.S. dollar and the euro.
While we intend to take steps to minimize exchange rate risks, we cannot assure
you that we will not be materially adversely affected by variations in currency
exchange rates.
Our operating subsidiaries' monetary assets and liabilities are subject to
foreign currency exchange risk if purchases of network equipment and services
are denominated in currencies other than the subsidiary's own function currency.
However, the majority of such purchases to date have been based on each
subsidiary's functional currency.
The spot rates for the euro are shown below expressed in dollar per one euro.
December 31, 1998 $ 1.181/(1)/
June 30, 1999 $ 1.033
December 31, 1999 $ 1.007
June 30, 2000 $ 0.951
/(1)/ Based on the exchange rate as of January 4, 1999, the date on which the
Euro Noon Buying Rate was first quoted.
We intend to manage exchange rate risk by incurring financing liabilities
denominated in the currency of the country of operations. In addition, we intend
to adopt hedging strategies to manage our exposure to foreign currency exchange
rate risk.
17
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were submitted to a vote of security holders of CompleTel
LLC during the quarter ended June 30, 2000:
By written consent of the members of CompleTel LLC dated April 21, 2000, the
members approved, ratified and confirmed the actions of the executive committee
of the board of managers with respect to the redemption of Class B Interests of
CompleTel Holdings LLC and the dissoluton of CompleTel Holdings LLC.
By written consent of the members of CompleTel LLC dated May 9, 2000, the
members approved, ratified and confirmed the actions of the board of directors
of CableTel Management, Inc. with respect to amending the employment agreements
of Messrs. Lacey, Pearson and Dovey and entering into a secondment agreement
with Mr. Lacey.
By written consent of the members of CompleTel LLC dated May 15, 2000, the
members approved, ratified and confirmed the actions of the executive committee
of the board of managers with respect to amending the articles of association of
CompleTel (N.A.) N.V. and the redemption of Class B Interests of CompleTel
Holdings LLC.
<TABLE>
<CAPTION>
Item 6(a) Exhibits
Exhibit No. Description
----------- -----------------------------------------------------------------------------------------------------------------------
<C> <S>
10.1 CompleTel LLC Guaranty Agreement, dated April 13, 2000 by CompleTel LLC in favor of the noteholders
10.2(1) Amended Employment Agreement by and between CableTel Management, Inc. and William H. Pearson, dated June 30, 2000
10.3(1) Amended Employment Agreement by and between CableTel Management, Inc. and David Lacey dated June 30, 2000
10.4(1) Amended Employment Agreement by and between CableTel Management, Inc. and James E. Dovey dated June 30, 2000
10.5(1) Amended and Restated Executive Securities Agreement by and between CompleTel LLC and Martin Rushe dated as of January
15, 2000
10.6(1) Amended and Restated Executive Securities Agreement by and between CompleTel LLC and Hansjorg Rieder dated as of May
26, 1999
10.7(1) First Omnibus Amendment dated March 24, 2000 by and among CompleTel LLC and the Parties defined therein
10.8(1) Second Amended and Restated Performance Vesting Agreement dated November 23, 1999 by and among CompleTel LLC and the
Purchasers defined therein
10.9(1) Second Amended and Restated Securityholders Agreement dated November 23, 1999 by and among CompleTel LLC and the
Securityholders defined therein
10.10(1) Second Amended and Restated Equity Purchase Agreement dated November 23, 1999 by and among CompleTel LLC and the
Purchasers defined therein
10.11(2) German License Certificate Class 4 for the Provision of Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for Cities in the Administrative District of Leipzig dated July 7, 2000
10.12(2) German License Certificate Class 3 for the Operation of Transmission Lines for the Offer of Telecommunications
Services for the Public by the Licensee or other Parties for Cities in the Administrative District of Leipzig dated
July 7, 2000
10.13(2) German License Certificate Class 3 for the Operation of Transmission Lines for the Offer of Telecommunications
Services for the Public by the Licensee or other Parties for Cities in the Administrative District of Dresden dated
July 7, 2000
10.14(2) German License Certificate Class 3 for the Operation of Transmission Lines for the Offer of Telecommunications
Services for the Public by the Licensee or other Parties for Cities in the Administrative Districts of Karlsruhe and
Rheinhessen-Pfalz dated July 7, 2000
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
10.15(2) German License Certificate Class 3 for the Operation of Transmission Lines for the Offer of Telecommunications
Services for the Public by the Licensee or other Parties for the State of Hamburg, Cities in the State of
Schleswig-Holstein and Cities in the Administrative District of Luneburg dated July 7, 2000
10.16(2) German License Certificate Class 4 for the Provision of Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for Cities in the Administrative District of Stuttgart dated July 7, 2000
10.17(2) German License Certificate Class 4 for the Provision of Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for Cities in the Administrative District of Dresden dated July 7, 2000
10.18(2) German License Certificate Class 4 for the Provision of Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for the State of Hamburg, Cities in the State of Schleswig-Holstein and Cities in the
Administrative District of Luneburg dated July 7, 2000
10.19(2) German License Certificate Class 4 for the Provision of Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for Cities in the Administrative Districts of Karlsruhe and Rheinhessen-Platinate dated
July 7, 2000
10.20(2) German License Certificate Class 3 for the Operation of Transmission Lines for the Offer of Telecommunications
Services for the Public by the Licensee or other Parties for Cities in the Administrative District of Stuttgart dated
July 7, 2000
10.21(2) Amendment to German License Certificate Class 3 for the Operation of Transmission Lines Offered for Telecommunications
Services for the Public by the Licensee or Others for Cities in the Administrative District of Darmstadt and Cities in
the State of Rhineland-Palatinate dated July 7, 2000
10.22(2) Amendment to German License Certificate Class 4 for Voice Telephony Services on the Basis of Self-operated
Telecommunications Networks for Cities in the Administrative District of Darmstadt and Cities in the State of
Rhineland-Palatinate dated July 7, 2000
27.1 Financial Data Schedule
</TABLE>
___________
(1) Previously filed as an exhibit to the Registrants' Registration Statement
on Form S-4, file number 333-41126, filed with the Securities and Exchange
Commission on July 11, 2000 and incorporated herein by reference.
(2) Previously filed as an exhibit to Amendment No. 1 to the Registrants'
Registration Statement on Form S-4, file number 333-41126, filed with the
Securities and Exchange Commission on July 21, 2000 and incorporated herein
by reference.
19
<PAGE>
SIGNATURE
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.
COMPLETEL LLC
(Registrant)
Date: August 14, 2000 /s/ William H. Pearson
----------------------
William H. Pearson
President and
Chief Executive Officer
Date: August 14, 2000 /s/ David E. Lacey
------------------
David E. Lacey
Chief Financial Officer
20
