<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 9, 1996
-------------------
International CableTel Incorporated
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
Delaware 0-22616 52-1822078
- --------------------------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
110 East 59th Street, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 371-3714
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired. See Index to Financial
Statements on page F-1.
(b) Pro Forma Financial Information. See Index to Financial Statements on
page F-1.
(c) Exhibits. *
2.1 Deed of Irrevocable Undertaking dated March 28, 1996 by and among
Addroute Limited, certain shareholders in the NTL Group Limited, NTL
Group Limited and International CableTel Incorporated
2.2 Form of Offer Document dated March 28, 1996 of Addroute Limited for
NTL Group Limited
2.3 Deed of Adjustment dated March 28, 1996 by and among Addroute Limited
and Mercury Asset Management plc.
10.1 The A Facilities Agreement, dated March 28, 1996, by and among
Addroute Limited, Chase Investment Bank Limited and The Chase
Manhattan Bank, N.A.
10.2 The B Facility Agreement, dated March 28, 1996, by and among
Addroute Limited, Chase Investment Bank Limited and The Chase
Manhattan Bank, N.A.
10.3 Guarantee of Certain Liabilities of Addroute Limited, dated March 28,
1996, by and among the Registrant, OCOM Corporation, OCOM Sub I Inc.,
CableTel (UK) Group Inc., OCOM Sub III Inc., CableTel (UK) Limited,
and the Chase Manhattan Bank, N.A.
10.4 Deed of Undertaking of the Registrant to Addroute Limited dated March
28, 1996 in relation to the Further Payment.
10.5 Short Term Po Deed of Undertaking of the Registrant to Chase
Manhattan Bank, N.A. and Addroute Limited dated March 28, 1996 in
relation to the Reduction Amount
- -------------------------------
* All exhibits are incorporated herein by reference to exhibits to Amendment
No. 2 to the Company's Form S-4 Registration Statement (333-1010), filed on
April 16, 1996.
<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 hereunto duly authorized.
INTERNATIONAL CABLETEL INCORPORATED
Date: May 30, 1996 By: /s/ RICHARD J. LUBASCH
--------------------------------
Name: Richard J. Lubasch
Title: Senior Vice President
2
<PAGE>
INDEX TO FINANCIAL STATEMENTS
INTERNATIONAL CABLETEL INCORPORATED
<TABLE>
<S> <C>
Pro forma Condensed Consolidated Financial Statements (Unaudited)......... F-2
Pro forma Condensed Consolidated Balance Sheet as of March 31, 1996 (Unau-
dited)................................................................... F-3
Pro forma Condensed Consolidated Statement of Operations for the three
months ended March 31, 1996 (Unaudited).................................. F-4
Pro forma Condensed Consolidated Statement of Operations for the year
ended December 31, 1995 (Unaudited)...................................... F-5
Notes to Pro forma Condensed Consolidated Financial Statements (Unau-
dited)................................................................... F-6
NTL GROUP LIMITED
Consolidated Group Profit and Loss Accounts for the three months ended
March 31, 1996 and 1995 (Unaudited)...................................... F-7
Consolidated Group Balance Sheet as of March 31, 1996 (Unaudited)......... F-8
Consolidated Group Statements of Cash Flows for the three months ended
March 31, 1996 and 1995 (Unaudited)...................................... F-9
Notes to the Accounts (Unaudited)......................................... F-10
Report of Independent Auditors............................................ F-13
Consolidated Group Profit and Loss Accounts for the years ended December
31, 1995 and 1994........................................................ F-14
Consolidated Statement of Total Recognised Gains and Losses............... F-14
Consolidated Group Balance Sheets as of December 31, 1995 and 1994........ F-15
Consolidated Group Statements of Cash Flows for the years ended December
31, 1995 and 1994........................................................ F-16
Notes to the Accounts..................................................... F-17
</TABLE>
F-1
<PAGE>
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In May 1996, a wholly owned subsidiary of International CableTel
Incorporated ("CableTel"), entered into an agreement (the "Agreement") and
acquired all of the issued and outstanding stock of NTL Group Limited ("NTL")
in exchange for cash of approximately (Pounds)200,000,000, subject to
adjustment, an additional cash payment of (Pounds)17,100,000 payable in
October 1996, (which represents a tax credit expected to be received by NTL in
October 1996, although the (Pounds)17,100,000 payment is unconditional) and an
agreement to pay (Pounds)35,000,000, subject to adjustment, one year from
closing. A substantial portion of the purchase price was financed (the
"Financing") through (i) a bank facility of (Pounds)140,000,000 and (ii) a
(Pounds)60,000,000 short term bank loan.
The following unaudited pro forma condensed consolidated financial
statements of CableTel give effect to the Agreement and the Financing. In
accordance with FAS 52, the balance sheet of NTL has been translated into
United States dollars using the exchange rate on March 31, 1996
((Pounds)1=$1.5254) and the statement of operations has been translated into
dollars using the average exchange rate for the three months ended March 31,
1996 ((Pounds)=$1.5312) and for the year then ended December 31, 1995
((Pounds)1=$1.5782).
The NTL historical financial statements have been adjusted to reflect U.S.
GAAP and to eliminate the gain on the sale of its Advanced Products Division
and the operations of that division.
The unaudited pro forma condensed consolidated balance sheet as of March 31,
1996 gives effect to the Agreement using the purchase method of accounting,
and is based upon CableTel's estimate of the fair value of the net assets to
be acquired. Such allocations of purchase price may change upon final
appraisal of the fair value of the net assets acquired. The unaudited
condensed consolidated pro forma balance sheet as of March 31, 1996 gives
effect to the Agreement and Financing as if they had been consummated on March
31, 1996. The unaudited pro forma condensed consolidated statement of
operations for the three months ended March 31, 1996 and for the year ended
December 31, 1995 gives effect to the Agreement and Financing as if they had
occurred at the beginning of the respective periods.
The pro forma financial statements have been prepared by CableTel's
management. These pro forma financial statements may not be indicative of the
results that actually would have occurred if the transactions had been in
effect on the dates indicated or which may be obtained in the future. The pro
forma financial statements should be read in conjunction with the consolidated
financial statements and notes of CableTel and NTL.
F-2
<PAGE>
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CABLETEL NTL ADJUSTMENTS PRO FORMA
---------- -------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents
(Pro forma includes $95,338
of restricted cash)......... $ 661,945 $ 19,068 $305,080 (b) $ 675,522
(310,571)(a)
Trade accounts receivable.... 9,786 17,724 27,510
Prepaid expenses and other
current assets.............. 16,784 11,166 27,950
---------- -------- -------- ----------
Total current assets........... 688,515 47,958 (5,491) 730,982
Fixed assets, net.............. 716,084 101,944 50,000 (a) 868,028
License acquisition costs...... 134,917 -- 134,917
Goodwill....................... -- 7,090 247,068 (a) 254,158
Other assets................... 53,177 12,851 66,028
---------- -------- -------- ----------
Total assets................... $1,592,693 $169,843 $291,577 $2,054,113
========== ======== ======== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Trade accounts payable....... $ 27,063 $ 19,548 $ (3,034)(a) $ 43,577
Accrued expenses............. 68,085 -- 68,085
Current portion of long term
debt........................ 44,351 68,519 99,275 (a)(b) 212,145
Other current liabilities.... 297 4,505 79,473 (a) 84,275
---------- -------- -------- ----------
Total current liabilities...... 139,796 92,572 175,714 408,082
Long term debt................. 1,134,122 -- 137,286 (a)(b) 1,271,408
Other non-current liabilities.. 630 12,635 (12,635)(a) 630
Deferred tax liability......... -- 52,797 3,051 (a) 55,848
Minority interests............. 25,768 -- 25,768
Total stockholders' equity..... 292,377 11,839 (11,839)(a) 292,377
---------- -------- -------- ----------
Total liabilities and
stockholders' equity.......... $1,592,693 $169,843 $291,577 $2,054,113
========== ======== ======== ==========
</TABLE>
See accompanying notes.
F-3
<PAGE>
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO
CABLETEL NTL ADJUSTMENTS FORMA
-------- ------- ----------- --------
<S> <C> <C> <C> <C>
Revenues............................ $ 18,434 $44,134 $ 62,568
Costs and expenses:
Operating expenses................ 12,629 24,949 37,578
Selling, general and administra-
tive............................. 21,798 5,473 27,271
Depreciation and amortization..... 12,190 4,021 $ 4,044(c) 20,255
-------- ------- ------- --------
Total costs and expenses............ 46,617 34,443 4,044 85,104
-------- ------- ------- --------
Income (loss) from operations....... (28,183) 9,691 (4,044) (22,536)
Interest (expense).................. (24,711) (1,130) (6,240)(d) (32,081)
Interest income..................... 7,763 340 -- 8,103
Other............................... (123) -- -- (123)
-------- ------- ------- --------
Income (loss) before provision for
income taxes and minority
interests.......................... (45,254) 8,901 (10,284) (46,637)
Benefit (provision) for income tax-
es................................. (42) (2,672) 2,672 (e) (42)
-------- ------- ------- --------
Income (loss) before minority inter-
ests............................... (45,296) 6,229 (7,612) (46,679)
Minority interests.................. 2,572 -- -- 2,572
-------- ------- ------- --------
Income (loss) from continuing opera-
tions.............................. $(42,724) $ 6,229 $(7,612) $(44,107)
======== ======= ======= ========
Net (loss) per share................ $ (1.41) -- -- $ (1.46)
======== ======= ======= ========
Weighted average number of shares
used in calculation of earnings per
share.............................. 30,211 -- -- 30,211
======== ======= ======= ========
</TABLE>
See accompanying notes.
F-4
<PAGE>
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
CABLETEL NTL ADJUSTMENTS PRO FORMA
--------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues......................... $ 33,741 $172,590 $ 206,331
Costs and expenses:
Operating expenses............. 24,415 104,690 129,105
Selling, general and adminis-
trative....................... 72,629 18,489 91,118
Depreciation and amortization.. 29,823 15,421 $ 16,177(c) 61,421
--------- -------- -------- ---------
Total costs and expenses......... 126,867 138,600 16,177 281,644
--------- -------- -------- ---------
Income (loss) from operations.... (93,126) 33,990 (16,177) (75,313)
Interest (expense)............... (28,379) (3,278) (26,579)(d) (58,236)
Interest income.................. 21,185 1,046 22,231
Other............................ 84 84
--------- -------- -------- ---------
Income (loss) before provision
for income taxes and minority
interests....................... (100,236) 31,758 (42,756) (111,234)
Benefit (provision) for income
taxes........................... 2,477 (9,998) 352 (e) (7,169)
--------- -------- -------- ---------
Income (loss) before minority in-
terests......................... (97,759) 21,760 (42,404) (118,403)
Minority interests............... 6,974 -- -- 6,974
--------- -------- -------- ---------
Income (loss) from continuing op-
erations........................ $ (90,785) $ 21,760 $(42,404) $(111,429)
========= ======== ======== =========
Net (loss) per share............. $ (3.01) -- -- $ (3.69)
========= ======== ======== =========
Weighted average number of shares
used in calculation of earnings
per share....................... 30,190 -- -- 30,190
========= ======== ======== =========
</TABLE>
See accompanying notes.
F-5
<PAGE>
INTERNATIONAL CABLETEL INCORPORATED
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
For purposes of determining the effect of the Agreement and Financing on
CableTel's Condensed Consolidated Statement of Operations for the three months
ended March 31, 1996 and the year ended December 31, 1995 and on the Condensed
Consolidated Balance Sheet as of March 31, 1996, the following pro forma
adjustments have been made:
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
(IN THOUSANDS)
<S> <C> <C>
(a) The excess of the purchase price paid over the
historical book value of the net assets acquired
has been allocated to property and equipment and
goodwill
Cash paid........................................ $310,571
Deferred consideration payable................... 79,473
--------
390,044
NTL term loan, revolver loan and accrued interest
retired (1)..................................... $71,553
Non recoverable ACT tax.......................... (3,051)
Negative goodwill of NTL......................... 12,635
Historical book value of net assets.............. 11,839 92,976
------- --------
Excess........................................... $297,068
========
Amount allocated to property and equipment....... $ 50,000
Amount allocated to goodwill..................... 247,068
--------
$297,068
========
(b) Proceeds from issuance of (Pounds)60,000,000 of
short term debt.................................... $ 91,524
Proceeds from issuance of (Pounds)140,000,000 of
long term debt of which (Pounds)50,000 is due on
December 31, 1996 unless certain events take place
and is in-cluded in current portion of long term
debt............................................... 213,556
--------
$305,080
========
</TABLE>
<TABLE>
<CAPTION>
THREE
YEAR ENDED MONTHS ENDED
DECEMBER 31, 1995 MARCH 31, 1996
------------------ ----------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
(c) Depreciation of increase in basis of
property and equipment............... $(10,000) $(2,500)
Amortization of goodwill over 40
years............................... (6,177) (1,544)
-------- -------
$(16,177) $(4,044)
(d) Interest expense on debt in (b) above
at 10 1/2% per annum for the short
term debt and 9 1/4% per annum for
the long term debt................... $(29,857) $(7,370)
Less interest on NTL debt retired.... 3,278 1,130
-------- -------
(26,579) (6,240)
(e) Estimated tax benefit from filing for
group relief......................... 352 2,672
-------- -------
$(42,404) $(7,612)
======== =======
</TABLE>
(1) Includes interest of (Pounds)408,000 and estimated additional borrowings
of (Pounds)1,581,000 used to pay off existing liabilities (aggregating
$3,034,000).
F-6
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP PROFIT AND LOSS ACCOUNTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED 31 MARCH
------------------------------------------------
1996 1995
----------- ------------------------------------
TOTAL CONTINUING DISCONTINUED TOTAL
----------- ----------- ------------ -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C>
TURNOVER 28,823 27,427 5,517 32,944
Cost of sales................. 18,976 22,501 4,655 27,156
------ ------ ----- ------
Gross profit.................. 9,847 4,926 862 5,788
------ ------ ----- ------
Administrative expenses....... 3,566 2,292 298 2,590
Loss in associated
undertaking.................. 15 25 -- 25
------ ------ ----- ------
PROFIT BEFORE INTEREST........ 6,266 2,609 564 3,173
------ ------ ----- ------
Interest receivable........... 237 72
Interest payable.............. (738) (625)
------ ------
(501) (553)
------ ------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION.............. 5,765 2,620
Tax on profit on ordinary
activities................... 1,745 1,565
------ ------
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION AND RETAINED
PROFIT FOR THE PERIOD*....... 4,020 1,055
====== ======
</TABLE>
- --------
* A summary of the significant adjustments to profit on ordinary activities
after taxation which would be required if United States generally accepted
accounting principles had been applied instead of those generally accepted in
the United Kingdom is given in Note 3 of Notes to the Accounts.
F-7
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
31 MARCH
1996
-----------
(Pounds)000
<S> <C>
FIXED ASSETS
Tangible assets..................................................... 68,053
Investments......................................................... 40
------
68,093
------
CURRENT ASSETS
Stocks.............................................................. 4,320
DEBTORS: amounts falling due:
after one year.................................................... 8,385
within one year................................................... 11,619
------
20,004
Cash at bank and in hand............................................ 12,500
------
36,824
CREDITORS: amounts falling due within one year...................... 39,687
------
Net current liabilities............................................. (2,863)
------
Total assets less current liabilities........................... 65,230
------
CREDITORS: amounts falling due after more than one year............. 21,000
------
44,230
======
</TABLE>
<TABLE>
<S> <C>
CAPITAL AND RESERVES*
Called up share capital............................................. 50
Share premium account............................................... 2,483
Capital reserve account............................................. 1,433
Capital redemption reserve.......................................... 11
Goodwill write-off reserve.......................................... 4,500
Profit and loss account............................................. 35,753
------
44,230
======
</TABLE>
- --------
* A summary of the significant adjustments to capital and reserves which would
be required if United States generally accepted accounting principles had
been applied instead of those generally accepted in the United Kingdom is
given in Note 3 of Notes to the Accounts.
F-8
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED 31
MARCH
-----------------------
1996 1995
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Net cash inflow from operating activities.............. 4,742 9,759
------- ------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received...................................... 237 74
Interest paid.......................................... (271) (36)
------- ------
Net cash (outflow) inflow from returns on investments
and servicing of finance.............................. (34) 38
------- ------
TAXATION
Taxation paid.......................................... (21,552) (142)
------- ------
Tax paid............................................... (21,552) (142)
------- ------
INVESTING ACTIVITIES
Payments to acquire tangible fixed assets.............. (4,485) (4,546)
Receipts from sales of tangible fixed assets........... 98 12
------- ------
Net cash inflow/(outflow) from investing activities.... (4,387) (4,534)
------- ------
Net cash inflow before financing....................... (21,231) 5,121
======= ======
FINANCING
Unsecured loan stock received.......................... -- (4,000)
Grants received........................................ -- 39
------- ------
Net cash outflow from financing........................ -- (3,961)
Increase/(decrease) in cash and cash equivalents....... (21,231) 9,082
------- ------
(21,231) 5,121
======= ======
</TABLE>
- --------
* The significant differences between the cash flow statement presented above
and that required under United States generally accepted accounting
principles are described in Note 3 of Notes to the Accounts.
F-9
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
(UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. 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 months
ended 31 March 1996 are not necessarily indicative of the results that may be
expected for the year ending 31 December 1996. For further information, refer
to the consolidated financial statements and footnotes thereto included herein
for the year ended 31 December, 1995.
NOTE 2--SALE OF COMPANY
On 8 May 1996, NTL Group Limited and its subsidiaries were acquired by
Addroute Limited--a wholly owned subsidiary of International CableTel Inc.--
for (Pounds)204m with a further (Pounds)35m conditional, deferred
consideration. Part of the consideration paid was to repay NTL's long term
loan and the amount drawn down on the revolver loan facility. As such both
amounts shown in the balance sheet as at 31 March 1996 have now been fully
repaid.
NOTE 3--DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE
UNITED KINGDOM AND THE UNITED STATES
The Group's financial statements are prepared in accordance with UK GAAP
which differ in certain respects from US GAAP. Those differences which have a
significant effect on the Group are described below.
Goodwill
Goodwill arising on consolidation is eliminated against retained earnings
and other reserves. Under US GAAP, goodwill is capitalised and amortised over
its respective useful economic life. For the purposes of the reconciliation
below, a period of 40 years has been utilised. The carrying amount of goodwill
and the amortisation period assigned to it are reviewed for impairment by
reference to expected future cash flows.
Negative goodwill is credited to the goodwill write-off reserve. Under US
GAAP, negative goodwill would be apportioned to the fixed assets acquired,
thereby reducing the annual depreciation charge, and any remainder would be
carried forward and released to the profit and loss account over its useful
life. For the purposes of the reconciliation below, a period of 40 years has
again been utilised.
Fair Value Adjustment
Under UK GAAP, fair values of acquired assets can be assessed for the full
accounting period following the acquisition. Under US GAAP, this period of
hindsight only stretches for 12 months. Hence the adjustment taken to the
goodwill write-off reserve under UK GAAP in the year ended 31 December 1995
has been expensed in the reconciliation below.
Dividends
Under UK GAAP final dividends are provided for in the accounts for the year
in respect of which they are proposed by the Directors for approval by the
shareholders. Under US GAAP, dividends would not be provided for until
declared.
Deferred Tax
Under UK GAAP, deferred taxes are accounted for using the liability method
to the extent that it is considered probable that a liability or asset will
crystallize in the foreseeable future. Under US GAAP, deferred taxes are
accounted for using the liability method on all temporary differences and
deferred tax assets are recognized where it is more likely than not that they
will be realized.
F-10
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
(UNAUDITED)
The effect on profit on ordinary activities after taxation (net income) and
capital and reserves (shareholders' equity) of applying US GAAP is summarised
as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
31 MARCH
------------------------
1996 1995
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
NET INCOME
Profit on ordinary activities after taxation as
reported .......................................... 4,020 4,260
Adjustments:
Amortization of goodwill............................ 21 21
Depreciation........................................ 35 35
Pension costs....................................... (8) 928
Deferred tax........................................ -- 154
----- -----
Net income as adjusted to accord with US GAAP....... 4,068 5,398
===== =====
Comprising:
Income from continuing operations................... 4,068 4,536
Income from discontinued operations................. -- 862
----- -----
Net income.......................................... 4,068 5,398
===== =====
</TABLE>
<TABLE>
<CAPTION>
31 MARCH
1995
-----------
(Pounds)000
<S> <C>
SHAREHOLDERS' EQUITY
Capital and reserves as reported................................. 44,230
Adjustments:
Intangible assets
Goodwill....................................................... 5,350
Amortization................................................... (702)
Tangible assets
Negative goodwill adjustment................................... (1,573)
Depreciation adjustment........................................ 351
Negative goodwill
Deferred credit................................................ (8,736)
Released to profit & loss...................................... 453
Current assets (liabilities)
Pension costs.................................................. 3,000
Deferred taxes................................................. (34,612)
-------
Shareholder's equity as adjusted to accord with US GAAP.......... 7,761
=======
</TABLE>
F-11
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
(UNAUDITED)
CASH FLOWS
The Cash Flow Statements prepared under UK GAAP in accordance with Financial
Reporting Standard No. 1 present substantially the same information as that
required under US GAAP by FAS 95, "Statement of Cash Flows". These standards
differ, however, with regard to classification of items within the statements
and as regards the definition of cash and cash equivalents.
Under US GAAP, cash and cash equivalents would not include bank overdrafts
and borrowings with initial maturities of less than three months. Under US
GAAP, bank overdrafts and the revolver loan would be classified as financing
activities. Under UK GAAP, cash flows are presented separately for operating
activities, returns on investments and servicing of finance, taxation,
investing activities and financing activities. US GAAP, however, requires only
three categories of cash flow activity to be reported: operating, investing
and financing. Cash flows from taxation and returns on investments and
servicing of finance shown under UK GAAP would, with the exception of
dividends paid, be included as operating activities under US GAAP. The payment
of dividends would be included as a financing activity under US GAAP.
The categories of cash flow activity under US GAAP can be summarised as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
31 MARCH
-----------------------
1996 1995
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Cash inflow/(outflow) from operating activities...... (16,844) 9,655
Cash inflow/(outflow) on investing activities........ (4,387) (4,534)
Cash inflow/(outflow) from financing activities...... 21,068 (5,437)
------- ------
Increase/(decrease) in cash and cash equivalents..... (163) (316)
Cash and cash equivalents at January 1............... 13,744 3,066
------- ------
Cash and cash equivalents at March 31................ 13,581 2,750
======= ======
</TABLE>
F-12
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
NTL Group Limited
We have audited the accompanying consolidated balance sheets of NTL Group
Limited as of December 31, 1995 and 1994, and the related consolidated group
profit and loss accounts, statements of total recognized gains and losses and
statements of cash flows for the years then ended. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with United Kingdom auditing standards
which do not differ in any significant respect from United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurances about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of NTL Group
Limited at December 31, 1995 and 1994, and the consolidated results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United Kingdom which differ in
certain respects from those followed in the United States (See Note 29 of
Notes to the Accounts).
ERNST & YOUNG
Chartered Accountants
London, England
March 5, 1996
F-13
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP PROFIT AND LOSS ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-------------------------------------------------------------------------
1995 1994
------------------------------------ ------------------------------------
NOTES CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED TOTAL
----- ----------- ------------ ----------- ----------- ------------ -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C> <C> <C> <C>
TURNOVER 2 109,359 25,206 134,565 102,298 13,398 115,696
Cost of sales........... 3 76,330 21,016 97,346 72,998 6,926 79,924
------- ------ ------- ------- ------ -------
Gross profit............ 33,029 4,190 37,219 29,300 6,472 35,772
------- ------ ------- ------- ------ -------
Administrative
expenses............... 3 14,265 895 15,160 3,485 7,084 10,569
Restructuring costs..... -- -- -- 5,853 -- 5,853
Loss in associated
undertaking............ 4 40 -- 40 226 -- 226
------- ------ ------- ------- ------ -------
OPERATING PROFIT
(LOSS)................. 5 18,724 3,295 22,019 19,736 (612) 19,124
------- ------ ------- ------- ------ -------
Non operating
exceptional item--sale
of discontinued
operation.............. 7 86,471 --
------- -------
PROFIT BEFORE INTEREST.. 108,490 19,124
------- -------
Interest receivable..... 8 703 418
Interest payable........ 9 (2,077) (3,541)
------- -------
(1,374) (3,123)
------- -------
PROFIT ON ORDINARY
ACTIVITIES BEFORE
TAXATION............... 107,116 16,001
Tax on profit on
ordinary activities.... 10 7,450 5,990
------- -------
PROFIT ON ORDINARY
ACTIVITIES AFTER
TAXATION*.............. 99,666 10,011
Interim dividend paid... 86,211 --
Final dividend
proposed............... 11 4,398 3,282
------- -------
RETAINED PROFIT FOR THE
YEAR................... 12 9,057 6,729
======= =======
</TABLE>
- --------
* A summary of the significant adjustments to profit on ordinary activities
after taxation which would be required if United States generally accepted
accounting principles had been applied instead of those generally accepted in
the United Kingdom is given in Note 29 of Notes to the Accounts.
A statement on the movement in reserves is given in note 12.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
There are no recognised gains or losses other than the profit attributable
to shareholders of the company of (Pounds)99,666,000 in the year ended 31
December 1995 and of (Pounds)10,011,000 in the year ended 31 December 1994.
F-14
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP BALANCE SHEETS
<TABLE>
<CAPTION>
31 DECEMBER
NOTES 1995 1994
----- ----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets.................................. 13 66,327 67,489
Investments...................................... 15 -- 7
------ ------
66,327 67,496
------ ------
CURRENT ASSETS
Stocks........................................... 16 4,413 8,014
DEBTORS: amounts falling due: 17
after one year................................. 8,786 7,337
within one year................................ 26,792 18,218
------ ------
35,578 25,555
Cash at bank and in hand......................... 18 13,744 3,066
------ ------
53,735 36,635
CREDITORS: amounts falling due within one year... 19 55,556 34,790
------ ------
Net current (liabilities)/assets................. (1,821) 1,845
------ ------
Total assets less current liabilities........ 64,506 69,341
------ ------
CREDITORS: amounts falling due after more than
one year........................................ 20 14,000 25,000
Provision for liabilities and charges............ 21 5,224 4,218
Accruals and deferred income..................... 22 5,072 8,511
------ ------
24,296 37,729
------ ------
40,210 31,612
====== ======
CAPITAL AND RESERVES*
Called up share capital.......................... 23 50 50
Share premium account............................ 12 2,483 2,483
Capital reserve account.......................... 12 1,433 1,433
Capital redemption reserve....................... 12 11 11
Goodwill write-off reserve....................... 12 4,500 4,959
Profit and loss account.......................... 12 31,733 22,676
------ ------
40,210 31,612
====== ======
</TABLE>
- --------
* A summary of the significant adjustments to capital and reserves which would
be required if United States generally accepted accounting principles had
been applied instead of those generally accepted in the United Kingdom is
given in Note 29 of Notes to the Accounts.
F-15
<PAGE>
NTL GROUP LIMITED
CONSOLIDATED GROUP STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
NOTES 1995 1994
----- ----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C> <C>
Net cash inflow from operating activities....... 5(b) 35,243 30,315
------- -------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received............................... 715 406
Interest paid................................... (1,996) (3,858)
Dividends paid.................................. (89,493) --
------- -------
Net cash outflow from returns on investments and
servicing of finance........................... (90,774) (3,452)
------- -------
TAXATION
Taxation paid................................... (6,287) (4,542)
------- -------
Tax paid........................................ (6,287) (4,542)
------- -------
INVESTING ACTIVITIES
Purchase of DTELS Ltd........................... -- (6,827)
Disposal of Advanced Products Division.......... 7 91,775 --
Payments to acquire tangible fixed assets....... (11,287) (15,962)
Receipts from sales of tangible fixed assets.... 483 1,186
Purchase of redeemable preference shares in
Prospectre Ltd................................. -- (200)
------- -------
Net cash inflow/(outflow) from investing activi-
ties........................................... 80,971 (21,803)
------- -------
Net cash inflow before financing................ 19,153 518
======= =======
FINANCING
Issue of ordinary share capital................. 24 -- (6)
Re-purchase of ordinary shares.................. 24 -- 329
Unsecured loan stock repaid/(received).......... 24 4,000 (4,000)
Term loan repaid................................ 24 7,000 7,000
Grants received................................. 24 (70) (59)
------- -------
Net cash outflow from financing................. 10,930 3,264
Increase/(decrease) in cash and cash equiva-
lents.......................................... 25 8,223 (2,746)
------- -------
19,153 518
======= =======
</TABLE>
- --------
* The significant differences between the cash flow statement presented above
and that required under United States generally accepted accounting
principles are described in Note 29 of Notes to the Accounts.
F-16
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 1--ACCOUNTING POLICIES
Basis of preparation
The accounts are prepared under the historical cost convention. The accounts
are prepared in accordance with United Kingdom ("UK") applicable accounting
standards.
Basis of consolidation
The group accounts consolidate the accounts of NTL Group Limited and all its
subsidiary undertakings drawn up to 31 December.
Undertakings, other than subsidiary undertakings, in which the group has an
investment representing not less than 20% of the voting rights and over which
it exerts significant influence are treated as associated undertakings. The
group accounts include the appropriate share of these undertakings' results
and reserves based on audited accounts to 31 December.
The consolidated accounts also include the accounts for NTL Limited, NTL
Trustees Limited and NTL Networks Limited, which have not traded since their
incorporation.
Goodwill
Purchased goodwill is set-off directly against reserves.
Turnover
Turnover includes the value of goods and services supplied to third party
customers and is exclusive of VAT. Turnover related to facilities leasing and
other contracts which span financial years are included to the extent that the
proportion of the contract period falls into the current financial year.
Finance and operating leases
Assets acquired under finance leases are capitalised and subsequently dealt
with under the same accounting policies as other tangible fixed assets,
excluding the interest portion of costs which is expensed.
Costs arising under operating leases are charged evenly over the term of the
lease.
Assets leased to customers under agreements which transfer substantially all
the risks and rewards associated with ownership, other than legal title, are
classified as finance leases.
Amounts receivable under finance leases represent the unpaid capital element
of the original cost of equipment.
The interest element of income from such leasing contracts is credited to
the profit and loss account on a straight line basis over the term of the
lease.
Fixed assets
Tangible fixed assets represent the cost of capital works and equipment
purchased from third parties. Where a contribution is received towards the
cost of an asset, the recorded cost is reduced by the contribution. Where the
contribution is in excess of the cost, the excess contribution is included as
turnover.
F-17
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
Assets are capitalised in the month following the month in which the asset
goes into service. The cost of company staff effort and their related costs
associated with capital projects are not capitalised, but are written off as
incurred.
Depreciation
The depreciation of tangible fixed assets is calculated on a straight line
basis by reference to the cost, expected useful lives, and the possible effect
of technological change.
Depreciation is charged on a monthly basis with effect from the month of
capitalisation.
The principal rates of depreciation are as follows:
Freehold land --Nil
Freehold buildings --2% per annum
Leasehold land and buildings --Over the lesser of the term of the
lease or 50 years
Plant and equipment --5% to 25% per annum
Test equipment --20% per annum
Computer equipment --33% per annum
Furniture and fixtures --10% to 33% per annum
Satellite equipment --25% per annum
Vehicles --25% per annum
The fixed assets of the group acquired as part of the purchase of National
Transcommunications Limited and of DTELS Limited are being depreciated over
the remaining useful lives of the assets concerned.
Stocks
Stocks held by the group are maintenance spares and manufacturing stocks.
Stocks are valued at average cost less provisions for obsolescence, slow
moving and surplus items. Stock items are charged to profit and loss as they
are consumed. Manufacturing stocks are valued at the lower of cost and net
realisable value.
Research and development
The cost of research and development expenditure is written off as incurred.
Equipment used in the research and development area is capitalised and a
depreciation charge is made to research and development expenditure under the
depreciation policy.
Deferred taxation
Deferred taxation is provided using the liability method on all timing
differences which are expected to reverse in the future without being
replaced, calculated at the rate at which it is anticipated the timing
differences will reverse.
Currency translation
Transactions in foreign currency are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currency are retranslated at the rate of exchange ruling at the balance sheet
date, all differences are taken to the profit and loss account.
Pensions
National Transcommunications Limited, the principal subsidiary of NTL Group
Limited, operates a pension plan ("the Plan") of the defined benefit type
which was established on 1 January 1991. DTELS Limited, another subsidiary of
NTL Group Limited, is a participating employer in the Plan. The assets of the
Plan are held
F-18
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
separately from those of the company and are invested in specialised
portfolios under the management of Clerical Medical Investment Group.
The regular pension cost is assessed using the attained age method.
Variations in pension cost, which are identified as a result of actuarial
valuations, are amortised over the average expected remaining working
lifetimes of employees in proportion to their expected payroll costs.
Differences between the amounts funded and the amounts charged to the profit
and loss accounts are treated as either provisions or prepayments in the
balance sheet.
Government grants
Grants of a revenue nature are credited to income in the period to which
they relate.
Warranties
An appropriate provision is made for potential customer claims relating to
current year sales of video compression products.
NOTE 2--TURNOVER
Turnover includes the value of charges made for transmission services,
distribution services, products, facilities leasing, interest on rental of
equipment under finance leases, research and development contracts, other
contracts, rents from properties, excess above cost in respect of capital
works contributions from third parties and site charges made to the BBC under
the site sharing agreement.
Turnover is analysed by geographical area as follows:
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
GEOGRAPHICAL AREA
United Kingdom.......................................... 113,762 105,969
Europe.................................................. 6,553 5,062
Scandinavia............................................. 248 1,108
North America........................................... 2,494 621
Africa, Asia and Australasia............................ 11,426 2,936
Middle East............................................. 82 --
------- -------
134,565 115,696
======= =======
</TABLE>
Turnover has not been analysed by class of business as in the directors'
opinion such information, if disclosed, would not be in the interests of the
group.
NOTE 3--COST OF SALES AND ADMINISTRATIVE EXPENSES
Included in cost of sales is an amount of (Pounds)2,275,000 (1994--
(Pounds)49,000) and in administrative expenses a credit of (Pounds)(93,000)
(1994 charge--(Pounds)275,000) in respect of reorganisation costs as follows:
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Provision made for reorganisation costs 2,255 275
Provision made for rent and rates costs of vacated
premises (46) 49
Relocation costs of premises and plant and equipment (27) --
----- ---
2,182 324
===== ===
</TABLE>
NOTE 4--LOSS IN ASSOCIATED UNDERTAKING
The loss in associated undertaking is in respect of 50% share in the
operating losses of Prospectre Limited.
F-19
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 5--OPERATING PROFIT
(a) This is stated after charging/(crediting):
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Staff costs....................................... 37,074 31,363
Auditors' remuneration--as auditors............... 62 57
Auditors' remuneration--for other services........ 50 47
Depreciation of owned fixed assets................ 9,995 9,473
Operating lease rentals--land and buildings....... 2,672 2,330
Operating lease rentals--plant and machinery...... 3,044 3,369
Independent Local Radio (ILR) contract provision.. -- (164)
Grants receivable................................. (35) (83)
Directors' emoluments............................. 5,074 986
(b) Reconciliation of operating profit to net cash inflow from operating
activities:
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Operating profit........ 22,019 19,124
Depreciation............ 9,995 9,473
Profit on disposal of
tangible fixed assets.. (429) (271)
ILR contract provision
released............... -- (164)
Grants received......... (35) (83)
Increase in stocks...... (4,402) (2,805)
Increase in debtors..... (2,477) (10,079)
Increase in creditors... 8,091 11,882
Decrease in finance
lease debtor........... 2,481 3,238
------ --------
Net cash inflow from or-
dinary operating activ-
ities.................. 35,243 30,315
====== ========
(c) Staff costs
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Wages and salaries...... 30,514 25,779
Social security costs... 2,640 2,249
Pension costs........... 3,920 3,335
------ --------
37,074 31,363
====== ========
</TABLE>
The average number of employees of the group during the year ended 31
December was as follows:
<TABLE>
<CAPTION>
1995 1994
----- -----
NO. NO.
<S> <C> <C>
Regional operations.............................................. 681 693
Engineering services............................................. 199 180
Administrative................................................... 111 97
Business development............................................. 59 49
Advanced products................................................ 132 86
Nexus............................................................ 8 3
----- -----
1,190 1,108
===== =====
</TABLE>
F-20
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 6(A)--DIRECTORS' REMUNERATION
Directors' emoluments, including pension contributions, amounted to
(Pounds)5,074,464 (1994--(Pounds)985,771). This includes an amount of
(Pounds)39,282 (1994--(Pounds)40,136) paid to third party companies in respect
of directors' fees.
The remuneration of the chairman, excluding pension contributions, amounted
to (Pounds)231,171 (1994--(Pounds)94,902). The remuneration of the highest
paid director, excluding pension contributions, amounted to (Pounds)4,070,647
(1994--(Pounds)109,386). Directors emoluments include (Pounds)4,004,117 in
respect of non-recurring payments made to four directors in recognition for
the sale of NTL's Advanced Products business. Remuneration totalling
(Pounds)24,693 was deferred by one director.
The remuneration of those directors employed under executive service
agreements includes payments related to the achievement of financial and
personal performance objectives which have been determined by the remuneration
committee.
The emoluments (including non-recurring payments), excluding pension
contributions, of the directors fell within the following ranges:
<TABLE>
<CAPTION>
YEAR ENDED
31 DECEMBER
------------
1995 1994
----- -----
NO. NO.
<S> <C> <C>
Nil -- (Pounds)5,000............................ 1 --
(Pounds)5,001 -- (Pounds)10,000 ........................... 1 --
(Pounds)15,001 -- (Pounds)20,000 ........................... 2 2
(Pounds)20,001 -- (Pounds)25,000 ........................... -- 1
(Pounds)90,001 -- (Pounds)95,000 ........................... -- 2
(Pounds)95,001 -- (Pounds)100,000............................ -- 2
(Pounds)100,001 -- (Pounds)105,000............................ 1 --
(Pounds)110,001 -- (Pounds)115,000............................ 1 --
(Pounds)120,001 -- (Pounds)125,000............................ -- 1
(Pounds)215,001 -- (Pounds)220,000............................ 1 --
(Pounds)230,001 -- (Pounds)235,000............................ 2 --
(Pounds)365,001 -- (Pounds)370,000............................ -- 1
(Pounds)4,070,001 -- (Pounds)4,075,000........................... 1 --
</TABLE>
NOTE 6(B)--DIRECTORS' INTERESTS IN SHARES AND OPTIONS
<TABLE>
<CAPTION>
OPTIONS OVER
'A' ORDINARY SHARES 'B' ORDINARY SHARES 'C' ORDINARY SHARES 'C' ORDINARY SHARES
---------------------- -------------------- -------------------- --------------------
31.12.95 1.1.95 31.12.95 1.1.95 31.12.95 1.1.95 31.12.95 1.1.95
---------- ---------- ---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
I Armitage.............. -- 1,294 -- -- -- 1,294 -- --
D S Chambers............ -- -- 13,000 13,000 13,000 13,000 -- --
Dr J R Forrest.......... -- -- 14,000 14,000 14,000 14,000 -- --
R A F Heath............. -- -- -- -- -- -- -- --
Ms F C Jacob............ 531 -- -- -- 531 -- -- --
R A McKellar............ -- -- 14,000 14,000 14,000 14,000 5,816 --
J A Okas................ -- -- 14,000 14,000 14,000 14,000 5,490 --
Sir Alfred Shepperd..... -- -- -- -- -- -- -- --
A J Sukawaty............ -- -- 1,520 1,520 1,520 1,520 167,304 167,304
A S Walsh............... -- -- -- -- -- -- 6,275 6,275
</TABLE>
Mr Armitage resigned as a director on 21 February 1995. Ms Jacob was
appointed as a director on 21 February 1995 and held 431 'A' ordinary shares
and 431 'C' ordinary shares at that time.
F-21
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
No other director of the company had a notifiable interest in the shares of
the company or in any subsidiary undertaking as at 31 December 1995.
NOTE 7--NON OPERATING EXCEPTIONAL ITEM
On 31 October 1995 the group completed the sale of the Advanced Products
Division of National Transcommunications Limited.
The disposal is analysed as follows:
<TABLE>
<CAPTION>
YEAR ENDED 31
DECEMBER 1995
-----------------------
(Pounds)000 (Pounds)000
<S> <C> <C>
Cash consideration................................... 92,000
Less fees paid....................................... (225)
------
Net cash inflow as at 31.12.95....................... 91,775
less:
consideration adjustment............................. 2,148
fees outstanding..................................... 777
net assets disposed of:
Fixed assets......................................... 2,401
Stocks............................................... 8,003
Debtors.............................................. 3,541
Creditors............................................ (11,566)
-------
2,379
------
Gain on disposal..................................... 86,471
======
</TABLE>
NOTE 8--INTEREST RECEIVABLE
<TABLE>
<CAPTION>
YEAR ENDED 31
DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Interest receivable on short-term deposits........... 671 410
Interest received net of tax......................... 26 8
Other interest received.............................. 6 --
------- ------
703 418
======= ======
</TABLE>
NOTE 9--INTEREST PAYABLE
<TABLE>
<CAPTION>
YEAR ENDED 31
DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Term loan interest................................... 2,018 2,983
Unsecured loan stock interest........................ 36 357
Legal costs in respect of restructured facilities.... -- 195
Other interest....................................... 23 6
------- ------
2,077 3,541
======= ======
</TABLE>
F-22
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 10--TAX ON PROFIT ON ORDINARY ACTIVITIES
<TABLE>
<CAPTION>
YEAR ENDED
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Based on profit for the year:
UK corporation tax at 33.0%.......................... 7,594 6,365
UK corporation tax--prior years...................... (147) (377)
Overseas tax incurred on royalty income.............. 3 4
Double taxation relief............................... -- (2)
----- -----
7,450 5,990
===== =====
</TABLE>
NOTE 11--DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Interim paid......................................... 86,211 --
Final proposed....................................... 4,398 3,282
------ -----
90,609 3,282
====== =====
</TABLE>
NOTE 12--SHARE CAPITAL, MOVEMENT ON RESERVES AND RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
TOTAL
PROFIT CAPITAL GOODWILL SHARE-
SHARE SHARE AND LOSS CAPITAL REDEMPTION WRITE OFF HOLDERS'
CAPITAL PREMIUM ACCOUNT RESERVE RESERVE RESERVE FUNDS
----------- ----------- ----------- ----------- ----------- ----------- -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C> <C> <C> <C>
As at 1 January 1994.... 25 2,513 16,440 1,269 -- (5,350) 14,897
Shares issued during the
year................... 6 6
Bonus issue of 'C'
ordinary shares........ 25 (25)
Shares re-purchased
during the year for
cancellation........... (11) (329) 11 (329)
Arising on acquisition
of DTELS Ltd........... 10,309 10,309
ILR Contract Provision
released............... (164) 164
Profit attributable to
members of the group... 10,011 10,011
Dividends............... (3,282) (3,282)
--- ----- ------- ----- --- ------ -------
As at 31 December 1994.. 50 2,483 22,676 1,433 11 4,959 31,612
Fair value adjustment
DTELS Ltd.............. (459) (459)
Profit attributable to
members of the group... 99,666 99,666
Dividends............... (90,609) (90,609)
--- ----- ------- ----- --- ------ -------
As at 31 December 1995.. 50 2,483 31,733 1,433 11 4,500 40,210
=== ===== ======= ===== === ====== =======
</TABLE>
F-23
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 13--TANGIBLE ASSETS
<TABLE>
<CAPTION>
LAND &
BUILDINGS
-----------------------
PLANT FURNITURE TOTAL ASSETS
LONG SHORT AND AND ASSETS UNDER
FREEHOLD LEASE LEASE EQUIPMENT FITTINGS IN USE CONSTRUCTION TOTAL
----------- ----------- ----------- ----------- ----------- ----------- ------------ -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost:
At 1 January 1994....... 9,285 -- 4,802 59,871 5,091 79,049 5,174 84,223
Assets acquired on
purchase
of subsidiary.......... 1,520 195 -- 821 79 2,615 -- 2,615
Additions............... -- -- -- -- -- -- 14,305 14,305
Assets brought into
commission............. 295 -- 112 12,628 1,381 14,416 (14,416) --
Disposals............... (5) -- -- (1,526) (140) (1,671) -- (1,671)
Reclassification of
assets................. (33) -- (54) 131 (44) -- -- --
------ --- ----- ------- ------ ------- ------- -------
At 31 December 1994..... 11,062 195 4,860 71,925 6,367 94,409 5,063 99,472
------ --- ----- ------- ------ ------- ------- -------
Depreciation:
At 1 January 1994....... (425) -- (466) (19,523) (2,852) (23,266) -- (23,266)
Charge to profit and
loss................... (236) (3) (237) (7,915) (1,082) (9,473) -- (9,473)
Disposals............... -- -- -- 628 128 756 -- 756
Reclassification of
assets................. 15 -- -- (63) 48 -- -- --
------ --- ----- ------- ------ ------- ------- -------
At 31 December 1994..... (646) (3) (703) (26,873) (3,758) (31,983) -- (31,983)
------ --- ----- ------- ------ ------- ------- -------
Cost:
At 1 January 1995....... 11,062 195 4,860 71,925 6,367 94,409 5,063 99,472
Additions............... -- -- -- -- -- -- 11,287 11,287
Assets brought into
commission............. 491 -- 233 9,563 1,985 12,272 (12,272) --
Disposals............... (2) -- (47) (2,628) (3,152) (5,829) (604) (6,433)
Reclassification of
assets................. (103) -- 14 88 1 -- -- --
------ --- ----- ------- ------ ------- ------- -------
At 31 December 1995..... 11,448 195 5,060 78,948 5,201 100,852 3,474 104,326
------ --- ----- ------- ------ ------- ------- -------
Depreciation:
At 1 January 1995....... (646) (3) (703) (26,873) (3,758) (31,983) -- (31,983)
Charge to profit and
loss................... (258) (4) (240) (7,987) (1,506) (9,995) -- (9,995)
Disposals............... 2 -- 9 1,745 2,223 3,979 -- 3,979
Reclassification of
assets................. 2 -- -- (1) (1) -- -- --
------ --- ----- ------- ------ ------- ------- -------
At 31 December 1995..... (900) (7) (934) (33,116) (3,042) (37,999) -- (37,999)
------ --- ----- ------- ------ ------- ------- -------
Net book value:
At 31 December 1995..... 10,548 188 4,126 45,832 2,159 62,853 3,474 66,327
====== === ===== ======= ====== ======= ======= =======
At 31 December 1994..... 10,416 192 4,157 45,052 2,609 62,426 5,063 67,489
====== === ===== ======= ====== ======= ======= =======
At 1 January 1994....... 8,860 -- 4,336 40,348 2,239 55,783 5,174 60,957
====== === ===== ======= ====== ======= ======= =======
</TABLE>
F-24
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
The total provision for the permanent diminution in value of fixed assets at
31 December 1995 was (Pounds)100,000 (1994--(Pounds)175,000) which was
expensed during the year.
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Capital expenditure
Amounts contracted but not provided.................. 8,078 1,769
Amounts authorised but not contracted for............ 5,002 4,388
</TABLE>
NOTE 14--INVESTMENT IN SUBSIDIARY
During the year certain fair value adjustments were made to the book values
of the assets of DTELS Limited to reflect their fair value to NTL Group
Limited. These comprised a write down of finance lease debtor to net
realisable value. This adjustment of (Pounds)459,000 was charged in the
goodwill write off reserve (Note 12).
NOTE 15--INVESTMENTS
Details of associated undertaking:
<TABLE>
<CAPTION>
COUNTRY OF PROPORTION
NAME OF COMPANY REGISTRATION HOLDINGS HELD NATURE OF BUSINESS
---------------- ------------ -------- ---------- ------------------
<S> <C> <C> <C> <C>
Prospectre Limited...... Scotland Ordinary shares 50%* Satellite
uplinking &
telephony
services
Preference shares 50%*
</TABLE>
The investment in Prospectre Limited has been written down to nil in the
year.
* 100% held by a subsidiary undertaking
NOTE 16--STOCKS
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Spares.................................................. 4,413 4,517
Manufacturing stocks/finished goods..................... -- 3,497
----- -----
4,413 8,014
===== =====
</TABLE>
The difference between purchase price or production cost of stocks and their
replacement cost is not material.
NOTE 17--DEBTORS
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Corporation tax recoverable............................. 9,914 --
Trade debtors........................................... 11,902 13,781
Capital amount receivable under finance leases.......... 5,840 8,780
Other debtors........................................... 1,073 303
Prepayments and accrued income.......................... 2,601 2,672
VAT recoverable......................................... 97 19
Advance corporation tax................................. 4,151 --
------ ------
35,578 25,555
====== ======
</TABLE>
F-25
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
Capital amount receivable under finance leases includes an amount of
(Pounds)4,592,000 (1994--(Pounds)7,276,000) which is due after more than one
year. Original cost of assets acquired for the purpose of letting under
finance leases was (Pounds)10,092,000.
Included in other debtors is an amount of (Pounds)43,000 (1994--
(Pounds)61,000) which is due after more than one year. This is in respect of
house purchase loans and car purchase loans to employees, under the approved
company schemes.
Advance corporation tax is due after more than one year.
NOTE 18--CASH AT BANK AND IN HAND
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Cash in escrow account................................ 12,615 --
Cash at bank.......................................... 1,097 743
Cash in hand.......................................... 32 23
Cash on short-term deposit............................ -- 2,300
------ -----
13,744 3,066
====== =====
</TABLE>
(Pounds)12,500,000 of the cash in escrow will revert to NTL Group Limited
control in 1997. (Pounds)115,000 of the cash in escrow represents interest
earned which has been credited to the profit and loss account and reverted to
NTL Group Limited control in January 1996.
NOTE 19--CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Interest due on term loan............................... 332 252
Bank overdraft.......................................... 932 1,477
Revolver loan........................................... 3,000 --
Trade creditors......................................... 12,185 12,098
Current corporation tax................................. -- 6,321
Other taxes and social security......................... 1,938 2,541
Other creditors......................................... 4,218 1,819
Current installments due on term loan................... 7,000 7,000
Dividend payable........................................ 4,398 3,282
Advance corporation tax................................. 21,553 --
------ ------
55,556 34,790
====== ======
</TABLE>
F-26
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 20--CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Term loan:
due between two and five years....................... 7,000 14,000
due between one and two years........................ 7,000 7,000
------ ------
14,000 21,000
Unsecured loan stock 1997/2000
due between two and five years...................... -- 4,000
------ ------
14,000 25,000
====== ======
</TABLE>
The term loan is scheduled to be repaid between 1996 and 1998.
The unsecured loan stock 1997/2000 was redeemed on 31 January 1995 at par.
NOTE 21--PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Reorganisation provision............................. 4,924 3,032
Relocation provision................................. 271 344
Rent and rates provision............................. 29 220
Product warranty..................................... -- 622
----- -----
5,224 4,218
===== =====
</TABLE>
The reorganisation provision is in respect of the termination costs of
employees which arises from a restructuring of the group.
The relocation provision is in respect of commitments made by the group to
employees who have moved location within the group.
The rent and rates provision is in respect of vacated premises.
Deferred taxation amounts not provided are as follows:
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Capital allowances in advance of depreciation....... 7,572 7,334
Rental equipment.................................... 381 258
Other timing differences............................ (1,841) (863)
------ -----
6,112 6,729
Less: advance corporation tax recoverable........... (4,151) --
------ -----
1,961 6,729
====== =====
</TABLE>
No provision for deferred tax has been made as the current capital
expenditure plan for the group for the foreseeable future indicates an excess
in aggregate of capital allowances over depreciation.
F-27
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
The amounts above do not include the potential deferred tax liability of
(Pounds)28.5 million arising upon the sale of the Advanced Products Division
of National Transcommunications Limited. It is assumed that these gains will
be held over into qualifying assets.
NOTE 22--ACCRUALS AND DEFERRED INCOME
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Accruals................................................ 2,309 4,819
Deferred income......................................... 2,763 3,692
----- -----
5,072 8,511
===== =====
</TABLE>
NOTE 23--SHARE CAPITAL
<TABLE>
<CAPTION>
ALLOTTED,
CALLED UP AND
AUTHORISED FULLY PAID
----------- -------------
(Pounds)000 (Pounds)000
<S> <C> <C>
2,198,000 'A' ordinary shares of 1p each......... 22 22
296,375 'B' ordinary shares of 1p each of which
289,925 represents fully paid up issued shares.. 3 3
2,884,000 'C' ordinary shares of 1p each of which
2,487,925 represents fully paid up issued
shares.......................................... 29 25
12 Redeemable special shares of 1p each.......... -- --
--- ---
As at 1 January 1994 and 31 December 1994 and
1995............................................ 54 50
=== ===
</TABLE>
'A' ordinary shares
The 'A' ordinary shares have the right to the payment of a dividend equal to
one third of the consolidated post tax profits (the 'Participating 'A'
Ordinary Dividend'). The 'A' ordinary shares each carry one vote.
'B' and 'C' ordinary shares
The 'B' and 'C' ordinary shares rank pari passu with the 'A' ordinary shares
for any dividend declared after payment of the Participating 'A' Ordinary
Dividend and also for any distribution on a winding up. The 'B' and 'C'
ordinary shares ordinarily carry no voting rights.
Redeemable special shares
The 12 redeemable special shares carry no voting rights, nor any rights to a
dividend or to a distribution on a winding up. Redeemable special shares may
be redeemed at par, or converted to deferred shares, upon any of the following
events:
(i) the holder ceasing to hold 'A' ordinary shares;
(ii) the company obtaining a Stock Exchange listing; or
(iii) the sale of at least 50% of the equity other than to a qualifying
institution (as defined in the articles of association).
The articles of association also require that the consent of 75% of the
holders of the redeemable special shares shall be obtained in respect of
certain transactions or events.
F-28
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
NOTE 24--ANALYSIS OF CHANGES IN FINANCING DURING THE YEAR
<TABLE>
<CAPTION>
SHARE SHARE PROFIT AND LOANS AND GRANTS
CAPITAL PREMIUM LOSS ACCOUNT DEBENTURES RECEIVABLE
----------- ----------- ------------ ----------- -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C> <C>
Balance at 1 January
1994................... 25 2,513 16,440 35,000 (11)
Cash inflows from
financing.............. -- 6 -- 4,000 59
Cash outflows from
financing.............. -- -- (329) (7,000) --
Non-cash movements...... 25 (36) 6,565 -- (83)
--- ----- ------ ------- ---
Balance at 31 December
1994................... 50 2,483 22,676 32,000 (35)
Cash inflows from
financing.............. -- -- -- -- 70
Cash outflows from
financing.............. -- -- -- (11,000) --
Non-cash movements...... -- -- 9,057 -- (35)
--- ----- ------ ------- ---
Balance at 31 December
1995................... 50 2,483 31,733 21,000 --
=== ===== ====== ======= ===
</TABLE>
NOTE 25--CASH AND CASH EQUIVALENTS
Analysis of balances as shown in the group balance sheet and changes during
the current year and previous year:
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
At 1 January........................................... 1,589 4,335
Net cash inflow/(outflow).............................. 8,223 (2,746)
------ ------
Balance at 31 December................................. 9,812 1,589
====== ======
Represented by:
Cash in escrow account................................. 12,615 --
Cash at bank........................................... 1,097 743
Cash in hand........................................... 32 23
Cash on short-term deposit............................. -- 2,300
Overdraft.............................................. (932) (1,477)
Revolver loan.......................................... (3,000) --
------ ------
9,812 1,589
====== ======
</TABLE>
NOTE 26--PENSION COMMITMENTS
The Plan is operated by National Transcommunications Limited, a wholly owned
subsidiary of NTL Group Limited.
The pension cost is assessed in accordance with the advice of a qualified
actuary using the attained age method. The most recent actuarial valuation of
the Plan was performed as at 1 January 1994. The principal assumptions
employed in this valuation were that investment returns would be 9.5% per
annum, that salary increases would be 8.0% per annum and that dividend income
would increase at 4.75% per annum.
The pension cost for the year was (Pounds)3,919,551 (1994--
(Pounds)3,538,130). This included (Pounds)59,780 (1994--(Pounds)52,213) in
respect of amortisation of past service liabilities over the future working
lifetime of the current membership. The regular costs included an allowance
for the possible effect of the favourable early retirement terms offered under
the Plan.
F-29
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
At the date of the actuarial valuation of the Plan the market value of the
assets was (Pounds)75.0 million and the actuarial value of the assets was
sufficient to cover 99% of the benefits that had accrued to members, after
allowing for expected future increases in earnings.
A division of NTL was sold on 31 October 1995. The effects of this sale on
the funding position of the pension plan are minor. The pension cost in future
years is expected to reduce in line with the reduction in payroll due to the
sale.
NOTE 27--OTHER FINANCIAL COMMITMENTS
The group had annual commitments under non-cancellable operating leases as
set out below:
<TABLE>
<CAPTION>
LAND AND
BUILDINGS OTHER
----------------------- -----------------------
31 DECEMBER
-----------------------------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
(Pounds)000 (Pounds)000 (Pounds)000 (Pounds)000
<S> <C> <C> <C> <C>
Operating leases which expire:
Within one year................ 102 120 -- --
Within two to five years....... 183 342 -- --
In over five years............. 1,868 1,658 3,384 2,987
----- ----- ----- -----
2,153 2,120 3,384 2,987
===== ===== ===== =====
</TABLE>
NOTE 28--COMPANIES ACT 1985
These financial statements do not comprise the Company's statutory accounts
within the meaning of section 240 of the Companies Act 1985. Statutory
accounts for the year ended 31 December 1994 have been, and statutory accounts
for the year ended 31 December 1995 will be, delivered to the Registrar of
Companies for England and Wales. The auditors' reports on such accounts were
unqualified.
NOTE 29--DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE
UNITED KINGDOM AND THE UNITED STATES
The Group's financial statements are prepared in accordance with UK GAAP
which differ in certain respects from US GAAP. Those differences which have a
significant effect on the Group are described below.
Goodwill
Goodwill arising on consolidation is eliminated against retained earnings
and other reserves. Under US GAAP, goodwill is capitalised and amortised over
its respective useful economic life. For the purposes of the reconciliation
below, a period of 40 years has been utilised. The carrying amount of goodwill
and the amortisation period assigned to it are reviewed for impairment by
reference to expected future cash flows.
Negative goodwill is credited to the goodwill write-off reserve. Under US
GAAP, negative goodwill would be apportioned to the fixed assets acquired,
thereby reducing the annual depreciation charge, and any remainder would be
carried forward and released to the profit and loss account over its useful
life. For the purposes of the reconciliation below, a period of 40 years has
again been utilised.
F-30
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
Fair Value Adjustment
Under UK GAAP, fair values of acquired assets can be assessed for the full
accounting period following the acquisition. Under US GAAP, this period of
hindsight only stretches for 12 months. Hence the adjustment taken to the
goodwill write-off reserve under UK GAAP in the year ended 31 December 1995
has been expensed in the reconciliation below.
Dividends
Under UK GAAP final dividends are provided for in the accounts for the year
in respect of which they are proposed by the Directors for approval by the
shareholders. Under US GAAP, dividends would not be provided for until
declared.
Deferred tax
Under UK GAAP, deferred taxes are accounted for using the liability method
to the extent that it is considered probable that a liability or asset will
crystallize in the foreseeable future. Under US GAAP, deferred taxes are
accounted for using the liability method on all temporary differences and
deferred tax assets are recognized where it is more likely than not that they
will be realized.
F-31
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
The effect on profit on ordinary activities after taxation (net income) and
capital and reserves (shareholders' equity) of applying US GAAP is summarised
as follows:
<TABLE>
<CAPTION>
YEAR ENDED
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
NET INCOME
Profit on ordinary activities after taxation as
reported .......................................... 99,666 10,011
Adjustments:
Amortization of goodwill............................ 84 48
Depreciation........................................ 140 176
Fair value adjustment............................... (459) --
Pension costs....................................... 3,008 (701)
Deferred tax........................................ (27,883) (728)
------- ------
Net income as adjusted to accord with US GAAP....... 74,556 8,806
======= ======
Comprising:
Income from continuing operations................... 13,788 9,418
Income from discontinued operations................. 2,180 (612)
Gain on sale of discontinued operation.............. 58,588 --
------- ------
Net income.......................................... 74,556 8,806
======= ======
</TABLE>
<TABLE>
<CAPTION>
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
SHAREHOLDERS' EQUITY
Capital and reserves as reported.................... 40,210 31,612
Adjustments:
Intangible assets
Goodwill.......................................... 5,350 5,350
Amortization...................................... (670) (536)
Tangible assets
Negative goodwill adjustment...................... (1,573) (1,573)
Depreciation adjustment........................... 316 176
Negative goodwill
Deferred credit................................... (8,736) (8,736)
Released to profit & loss......................... 400 182
Current assets (liabilities)
Pension costs..................................... 3,008 (701)
Deferred taxes.................................... (34,612) (6,729)
Dividends proposed.................................. 4,398 3,282
------- ------
Shareholder's equity as adjusted to accord with US
GAAP............................................... 8,091 22,327
======= ======
</TABLE>
F-32
<PAGE>
NTL GROUP LIMITED
NOTES TO THE ACCOUNTS
Cash flows
The Cash Flow Statements prepared under UK GAAP in accordance with Financial
Reporting Standard No. 1 present substantially the same information as that
required under US GAAP by FAS 95, "Statement of Cash Flows". These standards
differ, however, with regard to classification of items within the statements
and as regards the definition of cash and cash equivalents.
Under US GAAP, cash and cash equivalents would not include bank overdrafts
and borrowings with initial maturities of less than three months (see Note
25). Under US GAAP, bank overdrafts and the revolver loan would be classified
as financing activities. Under UK GAAP, cash flows are presented separately
for operating activities, returns on investments and servicing of finance,
taxation, investing activities and financing activities. US GAAP, however,
requires only three categories of cash flow activity to be reported:
operating, investing and financing. Cash flows from taxation and returns on
investments and servicing of finance shown under UK GAAP would, with the
exception of dividends paid, be included as operating activities under US
GAAP. The payment of dividends would be included as a financing activity under
US GAAP.
The categories of cash flow activity under US GAAP can be summarised as
follows:
<TABLE>
<CAPTION>
YEAR ENDED
31 DECEMBER
-----------------------
1995 1994
----------- -----------
(Pounds)000 (Pounds)000
<S> <C> <C>
Cash inflow from operating activities................ 27,675 22,321
Cash inflow/(outflow) on investing activities........ 80,971 (21,803)
Cash (outflow) from financing activities............. (97,968) (2,335)
------- -------
Increase/(decrease) in cash and cash equivalents..... 10,678 (1,817)
Cash and cash equivalents at January 1............... 3,066 4,883
------- -------
Cash and cash equivalents at December 31............. 13,744 3,066
======= =======
</TABLE>
F-33
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- ----------- ------
<S> <C> <C>
2.1 Deed of Irrevocable Undertaking dated March 28, 1996 by and among
Addroute Limited, certain shareholders in the NTL Group Limited, NTL
Group Limited and International CableTel Incorporated
2.2 Form of Offer Document dated March 28, 1996 of Addroute Limited for
NTL Group Limited
2.3 Deed of Adjustment dated March 28, 1996 by and among Addroute Limited
and Mercury Asset Management plc.
10.1 The A Facilities Agreement, dated March 28, 1996, by and among
Addroute Limited, Chase Investment Bank Limited and The Chase
Manhattan Bank, N.A.
10.2 The B Facility Agreement, dated March 28, 1996, by and among
Addroute Limited, Chase Investment Bank Limited and The Chase
Manhattan Bank, N.A.
10.3 Guarantee of Certain Liabilities of Addroute Limited, dated March 28,
1996, by and among the Registrant, OCOM Corporation, OCOM Sub I Inc.,
CableTel (UK) Group Inc., OCOM Sub III Inc., CableTel (UK) Limited,
and the Chase Manhattan Bank, N.A.
10.4 Deed of Undertaking of the Registrant to Addroute Limited dated March
28, 1996 in relation to the Further Payment.
10.5 Short Term Po Deed of Undertaking of the Registrant to Chase
Manhattan Bank, N.A. and Addroute Limited dated March 28, 1996 in
relation to the Reduction Amount
</TABLE>
- -------------------------------
* All exhibits are incorporated herein by reference to exhibits to Amendment
No. 2 to the Company's Form S-4 Registration Statement (333-1010), filed on
April 16, 1996.
