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