<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 8, 1999
NTL COMMUNICATIONS CORP.
(Exact name of Registrant as Specified in Charter)
Delaware 0-22616 52-1822078
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
110 East 59th Street, New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 906-8440
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On April 8, 1999, NTL Communications Corp. announced that it
had priced an issue of pound sterling 330 million of 9 3/4% Senior Deferred
Coupon Notes due 2009 (the "Notes"). The Notes have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or any state
securities laws, and unless so registered, may not be offered or sold except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. Accordingly, the Notes were offered and sold within the United States
pursuant to Rule 144A under the Securities Act only to "qualified institutional
buyers" and outside the United Sates in accordance with Regulation S under the
Securities Act. In connection with that offering, NTL included in its
offering memorandum certain unaudited pro forma financial data. That data is
attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
Exhibit 99.1 Unaudited Pro Forma Financial Data
2
<PAGE> 3
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 hereunto duly authorized.
NTL COMMUNICATIONS CORP.
By: /s/ Richard J. Lubasch
Name: Richard J. Lubasch
Title: Senior Vice President, General
Counsel and Secretary
Dated: April 12, 1999
3
<PAGE> 4
EXHIBIT INDEX
Designation Description
99.1 Unaudited Pro Forma Financial Data
4
<PAGE> 1
EXHIBIT 99.1
UNAUDITED PRO FORMA FINANCIAL DATA
In March 1999, NTL acquired Diamond under the terms of the Diamond
acquisition agreement in exchange for NTL's common stock. In December 1998, NTL
acquired EGT in exchange for NTL's cash and preferred stock. In October 1998,
NTL completed its acquisition of Comcast UK Cable Partners Limited in exchange
for NTL's common stock. On June 16, 1998, NTL agreed to acquire substantially
all of the operations of ComTel in a two-part transaction that was completed in
September 1998 in exchange for approximately Pound Sterling 550 million. The
cash portion of the purchase price was financed using funds available under
NTL's credit facility. The amounts borrowed under the credit facility were
repaid with most of the proceeds from the issuance of our 11 1/2% notes and our
12 3/8% notes in November 1998.
The unaudited pro forma financial data presented herein give effect to the
completed acquisitions of Partners, ComTel and EGT, and give further effect to
the subsequent acquisition of Diamond. The pro forma financial data is based on
the historical financial statements of Partners, ComTel, EGT, Diamond and NTL.
The balance sheet data reflects the translation of all Pound Sterling
denominated amounts at the December 31, 1998 rate of $1.6595 = Pound Sterling
1.00. The statements of operations data reflects the translation of all Pound
Sterling denominated amounts at the average rate for the year ended December 31,
1998 of $1.6571 = Pound Sterling 1.00.
The acquisitions have been accounted for in the pro forma financial data
using the purchase method of accounting. Accordingly, the assets acquired and
liabilities assumed have been recorded at their estimated fair values, which are
subject to further adjustment based upon appraisals and other analyses.
Management of NTL does not currently expect future adjustments from these
analyses, if any, to be material to the unaudited pro forma financial
statements.
The pro forma financial statements do not give effect to the sale in
January 1999 of NTL 5 1/4% preferred stock and warrants to Microsoft for $500
million.
Under the terms of the Diamond indentures governing the terms of the
Diamond notes, the share exchange in the Diamond acquisition constituted a
"Change of Control". In general, upon the occurrence of a change of control,
each holder of the Diamond notes has the right to require Diamond to repurchase
the Diamond notes in cash at a purchase price equal to 101% of the accreted
value or principal amount, as applicable. The pro forma financial statements do
not give effect to the repurchase, if any, of the Diamond notes.
The unaudited pro forma condensed combined statements of operations for the
year ended December 31, 1998 give effect to the acquisitions as if they had been
consummated on January 1, 1998. The unaudited pro forma condensed combined
balance sheet as of December 31, 1998 gives effect to the acquisition of Diamond
as if it had been consummated on December 31, 1998.
Partners owned a 27.5% interest (the "Birmingham Cable Equity Interest") in
Birmingham Cable Corporation Limited and currently owns a 50% interest (the
"Cable London Equity Interest" and, together with the Birmingham Cable Equity
Interest, the "Equity Interests") in Cable London PLC ("Cable London"). Partners
accounts for the Equity Interests using the equity method. The following pro
forma financial data give effect to the issuance of 0.3745 shares of NTL common
stock for each Partners common share and the sale of the Birmingham Cable Equity
Interest to TeleWest Communications plc prior to the acquisition of Partners by
NTL.
The TeleWest agreement provides that at any time during the shoot-out
period, Partners may give notice to TeleWest of an offer to sell to TeleWest the
Cable London Equity Interest and related assets for the cash sum specified in
the offer notice. If Partners fails to give the offer notice prior to the end of
the shoot-out period, Partners will be deemed to have delivered an offer notice
for a sum equal to Pound Sterling 100 million.
TeleWest will have 30 days in which to accept or decline the offer. If
TeleWest accepts the offer, Partners will sell to TeleWest the Cable London
Equity Interest and related assets at the
<PAGE> 2
sum specified in the offer notice. If TeleWest declines the offer, TeleWest will
sell to Partners all of the shares in the capital of Cable London owned by
TeleWest at the sum specified in the offer notice.
The unaudited pro forma financial statements do not give effect to the sale
of the Cable London Equity Interest to TeleWest or Partners' purchase of
TeleWest's shares in the capital of Cable London, as management is currently
unable to determine the probable outcome of the "shoot-out" procedure. The
effect of the sale of the Cable London Equity Interest by Partners would be to
eliminate Partners' investment in Cable London and increase cash by the amount
of the proceeds. The effect of Partners' purchase of all of TeleWest's shares in
the capital of Cable London would be to reduce Partners' cash and increase the
amount of Partners' investment in Cable London.
The pro forma adjustments are based upon available information and
assumptions that the management of NTL believes are reasonable at the time made.
The unaudited pro forma condensed combined financial statements do not purport
to present the financial position or results of operations of NTL had the
acquisitions occurred on the dates specified, nor are they necessarily
indicative of the financial position or results of operations that may be
achieved in the future. The unaudited pro forma condensed combined statements of
operations do not reflect any adjustments for synergies that NTL expects to
realize commencing upon consummation of the acquisitions. No assurances can be
made as to the amount of cost savings or revenue enhancements, if any, that may
be realized.
<PAGE> 3
NTL INCORPORATED
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
NTL COMTEL PARTNERS EGT FOR PRIOR DIAMOND
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) ADJUSTMENTS ACQUISITIONS (HISTORICAL)
------------ ------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES.................... $ 747,015 $ 97,222 $105,348 $17,110 $ (789)C $ 965,906 $ 147,078
COSTS AND EXPENSES
Operating expenses.......... 372,134 62,393 33,965 7,893 -- 476,385 47,088
Selling, general and
administrative expenses.... 299,494 32,285 48,448 -- -- 380,227 61,573
Franchise fees.............. 25,036 -- -- -- -- 25,036 --
Corporate expenses.......... 17,048 -- 3,977 -- -- 21,025 --
Non-recurring charges....... (4,194) -- -- -- -- (4,194) --
Depreciation and
amortization............... 266,112 41,035 37,202 3,157 29,229B 376,735 71,650
--------- -------- -------- ------- -------- ---------- ---------
975,630 135,713 123,592 11,050 29,229 1,275,214 180,311
--------- -------- -------- ------- -------- ---------- ---------
Operating loss.............. (228,615) (38,491) (18,244) 6,060 (30,018) (309,308) (33,233)
OTHER INCOME
(EXPENSE)
Interest and other income... 46,024 476 14,983 -- -- 61,483 21,681
Interest expense............ (328,815) (7,459) (49,477) -- (62,417)E (448,168) (140,234)
Other....................... 4,152 -- (3,326) -- 11,574D 12,400 12,553
--------- -------- -------- ------- -------- ---------- ---------
Loss before income taxes.... (507,254) (45,474) (56,064) 6,060 (80,861) (683,593) (139,233)
Income tax benefit.......... 3,327 -- -- -- 3,327 --
--------- -------- -------- ------- -------- ---------- ---------
Loss before extraordinary
item....................... (503,927) (45,474) (56,064) 6,060 (80,861) (680,266) (139,233)
Loss from early
extinguishment of debt..... (30,689) -- -- -- -- (30,689) --
--------- -------- -------- ------- -------- ---------- ---------
Net loss.................... (534,616) (45,474) (56,064) 6,060 (80,861) (710,955) (139,233)
Preferred stock dividends... (18,761) -- -- -- (14,092)F (32,853) --
--------- -------- -------- ------- -------- ---------- ---------
Net loss available to common
shareholders............... $(553,377) $(45,474) $(56,064) $ 6,060 $(94,953) $ (743,808) $(139,233)
========= ======== ======== ======= ======== ========== =========
Net loss per common share --
basic and fully diluted.... $ (13.43) $ (13.00)
========= ==========
Weighted average shares
outstanding................ 41,202 16,004 57,206
========= ======== ==========
<CAPTION>
ADJUSTMENTS PRO FORMA
----------- ----------
<S> <C> <C>
REVENUES.................... $ -- $1,112,984
COSTS AND EXPENSES
Operating expenses.......... -- 523,473
Selling, general and
administrative expenses.... -- 441,800
Franchise fees.............. -- 25,036
Corporate expenses.......... -- 21,025
Non-recurring charges....... -- (4,194)
Depreciation and
amortization............... 91,975B 540,360
-------- ----------
91,975 1,547,500
-------- ----------
Operating loss.............. (91,975) (434,516)
OTHER INCOME
(EXPENSE)
Interest and other income... -- 83,164
Interest expense............ -- (588,402)
Other....................... -- 24,953
-------- ----------
Loss before income taxes.... (91,975) (914,801)
Income tax benefit.......... -- 3,327
-------- ----------
Loss before extraordinary
item....................... (91,975) (911,474)
Loss from early
extinguishment of debt..... -- (30,689)
-------- ----------
Net loss.................... (91,975) (942,163)
Preferred stock dividends... -- (32,853)
-------- ----------
Net loss available to common
shareholders............... $(91,975) $ (975,016)
======== ==========
Net loss per common share --
basic and fully diluted.... $ (13.90)
==========
Weighted average shares
outstanding................ 12,948A 70,154
======== ==========
</TABLE>
<PAGE> 4
NTL INCORPORATED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NTL DIAMOND
(HISTORICAL) (HISTORICAL) ADJUSTMENTS PRO FORMA
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash, cash equivalents and marketable
securities........................ $ 996,896 $ 273,383 $ -- $ 1,270,279
Other current assets................. 207,604 20,083 -- 227,687
----------- ---------- ---------- -----------
Total current assets................... 1,204,500 293,466 -- 1,497,966
Investment in affiliates............... 229,093 -- -- 229,093
Fixed assets, net...................... 3,854,430 773,105 134,750A 4,762,285
Intangible assets, net................. 725,028 135,404 1,075,253A 1,935,685
Other assets, net...................... 181,046 33,724 -- 214,770
----------- ---------- ---------- -----------
Total assets................. $ 6,194,097 $1,235,699 $1,210,003 $ 8,639,799
=========== ========== ========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Other current liabilities............ $ 580,260 $ 81,191 $ 3,000A $ 664,451
Current portion of long-term debt and
capital leases.................... 23,691 -- -- 23,691
----------- ---------- ---------- -----------
Total current liabilities.... 603,951 81,191 3,000 688,142
Long-term debt......................... 5,043,803 1,333,230 -- 6,377,033
Deferred income taxes.................. 67,062 -- 41,773A 108,835
Senior redeemable exchangeable
preferred stock...................... 124,127 -- -- 124,127
Shareholders' equity:
Preferred stock...................... 2 -- -- 2
Common stock and additional paid-in
capital........................... 1,502,163 -- 986,508A 2,488,671
Acquired company equity.............. -- (178,722) 178,722A --
Accumulated other comprehensive
income............................ 104,657 104,657
Deficit.............................. (1,251,668) (1,251,668)
----------- ---------- ---------- -----------
355,154 (178,722) 1,165,230 1,341,662
----------- ---------- ---------- -----------
Total liabilities and
shareholders' equity....... $ 6,194,097 $1,235,699 $1,210,003 $ 8,639,799
=========== ========== ========== ===========
</TABLE>
<PAGE> 5
NTL INCORPORATED
PRO FORMA ADJUSTMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DIAMOND
----------
<S> <C>
A PURCHASE PRICE AND ALLOCATION
PURCHASE PRICE
NTL Shares issued........................................... 12,948
NTL stock price (20 day average prior to closing)........... $ 76.19
----------
Subtotal.................................................... 986,508
Fees........................................................ 3,000
----------
Purchase Price.............................................. 989,508
Deficiency at December 31, 1998............................. 178,722
Intangibles at December 31, 1998............................ 135,404
----------
Excess of Purchase Price over net tangible assets
acquired.................................................. $1,303,634
==========
ALLOCATED TO
Fixed assets................................................ $ 134,750
Intangible assets(1)........................................ 1,210,657
----------
Deferred taxes.............................................. (41,773)
----------
$1,303,634
==========
</TABLE>
<TABLE>
<CAPTION>
PRIOR
ACQUISITIONS DIAMOND
------------ -------
<S> <C> <C>
B DEPRECIATION AND AMORTIZATION
For the year ended December 31, 1998:
Depreciation of fixed asset allocation (over 7 years)..... $ (126) $19,250
Amortization of intangibles (over 5-15 years)............. 72,145 80,710
Historical amortization of intangibles.................... (42,790) (7,985)
-------- -------
$ 29,229 $91,975
======== =======
C CONSULTING REVENUE
Partners' consulting fee income earned under consulting
agreement with Birmingham which ceased upon the sale of
Birmingham
For the year ended December 31, 1998........................ $ 789
=======
</TABLE>
- ---------------
(1) The intangible assets include customer lists, license acquisition costs and
goodwill.
<PAGE> 6
NTL INCORPORATED
PRO FORMA ADJUSTMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DIAMOND
-------
<S> <C>
D EQUITY IN NET LOSS
Partner's equity in the net loss of Birmingham that will no
longer be recorded after the sale of Birmingham
For the year ended December 31, 1998........................ $11,574
=======
E INTEREST EXPENSE
Interest on ComTel Debt Not Assumed
For the year ended December 31, 1998...................... $(7,431)
Interest on the borrowings utilized to acquire ComTel(1)
For the year ended December 31, 1998...................... 77,567
Amortization of fees on borrowings recorded as deferred
financing costs
For the year ended December 31, 1998...................... 2,015
Historical interest expense on Partners' Credit Facility(2)
For the year ended December 31, 1998...................... (9,734)
-------
Net Statement of Operations Impact
For the year ended December 31, 1998...................... $62,417
=======
F PREFERRED STOCK DIVIDEND
Dividends at 9.9% on the preferred stock issued in the
ComTel and EGT acquisitions
For the year ended December 31, 1998...................... $14,092
=======
</TABLE>
- ---------------
(1) On June 16, 1998, NTL agreed to acquire substantially all of the operations
of ComTel in a two-part transaction in exchange for approximately Pound
Sterling 550 million. A portion of the purchase price (Pound Sterling 475
million) was financed using funds available under our credit facility. The
credit facility bore interest at LIBOR plus 3% per annum increasing by 0.25%
per annum each month beginning three months after the first drawdown to a
maximum of 4% per annum. In November 1998, the credit facility was repaid
using most of the proceeds from the issuance of our 11 1/2% notes and the 12
3/8% notes.
(2) This facility was repaid by Partners with the proceeds from the sale of the
Birmingham Cable Equity Interest.
