<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): June 3, 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
In conjunction with NTL Communication Corp's and NTL Incorporated's
Registration Statement on Form S-3 relating to NTL Communications Corp's 7%
Convertable Subordinated Notes due 2008, NTL Communications Corp. is
incorporating by reference 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: June 3, 1999
3
<PAGE> 4
EXHIBIT INDEX
Designation Description
99.1 Unaudited Pro Forma Financial Data
4
<PAGE> 1
EXHIBIT 99.1
NTL INCORPORATED
UNAUDITED PRO FORMA FINANCIAL DATA
In March 1999, we acquired Diamond Cable Communications plc ("Diamond"),
under the terms of the Diamond acquisition agreement in exchange for our common
stock. In December 1998, we acquired Eastern Group Telecoms ("EGT") in exchange
for cash and our preferred stock. In October 1998, we completed the acquisition
of Comcast UK Cable Partners Limited ("Partners") in exchange for our common
stock. In September 1998, we completed the acquisition of ComTel Limited and
Telecential Communications (collectively "ComTel") in exchange for cash and our
preferred stock. The cash portion of the purchase price of Comtel was financed
using funds available under a bank 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
acquisitions of Partners, ComTel and EGT, which were completed in 1998, and give
further effect to the subsequent acquisition of Diamond on March 8, 1999. The
pro forma financial data is based on the historical financial statements of
Partners, ComTel, EGT, Diamond and NTL. The statements of operations data
reflects the translation of all Pound Sterling denominated amounts at the
average rate for the three months ended March 31, 1999 of $1.6329 = L.1.00 and
the average rate for the year ended December 31, 1998 of $1.6571 = L.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. We do
not currently expect future adjustments from these analyses, if any, to be
material to the unaudited pro forma financial statements.
The pro forma financial data do not give effect to (a) the sale in January
1999 of NTL 5 1/4% preferred stock and warrants to Microsoft for $500 million;
(b) the issuance of L.330,000,000 aggregate principal amount at maturity of 9
3/4% Senior Deferred Coupon Notes due 2009 in April 1999 and (c) the acquisition
of the Australian broadcast business in April 1999. In addition, no pro form
effect has been given to the proposed acquisitions of Cablelink Limited and
France Telecom's "1G Networks".
The unaudited pro forma condensed combined statements of operations for the
year ended December 31, 1998 and for the three months ended March 31, 1999 give
effect to the acquisitions as if they had been consummated on January 1, 1998.
Partners owned a 27.5% interest in Birmingham Cable Corporation Limited
("Birmingham)and owns a 50% interest in Cable London PLC ("Cable London").
Partners accounts for its equity interests using the equity method.
The equity interest in Birmingham was sold by Partners, before its
acquisition by the Company, to TeleWest Communications plc ("TeleWest"). The
agreement with TeleWest also 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 L.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 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.
<PAGE> 2
The pro forma financial data 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 we are 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 we believe are reasonable at the time made. The pro forma
financial data do not purport to present the results of operations of NTL had
the acquisitions occurred on the date specified, nor are they necessarily
indicative of the results of operations that may be achieved in the future.
<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) ADJUSTMENT 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 29,229(B) 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) -- 11,574 (D) 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................ 135,347(B) 583,732
--------- -----------
135,347 1,590,872
--------- -----------
Operating loss............... (135,347) (477,888)
OTHER INCOME (EXPENSE)
Interest and other income.... -- 83,164
Interest expense............. -- (588,402)
Other........................ -- 24,953
--------- -----------
Loss before income taxes..... (135,347) (958,173)
Income tax benefit........... -- 3,327
---------- -----------
Loss before extraordinary
item........................ (135,347) (954,846)
Loss from early
extinguishment of debt...... -- (30,689)
--------- -----------
Net loss..................... (135,347) (985,535)
Preferred stock dividends.... -- (32,853)
--------- -----------
Net loss available to common
shareholders................ $(135,347) $(1,018,388)
========= ===========
Net loss per common share --
basic and fully diluted..... $ (14.57)
===========
Weighted average shares
outstanding................. 12,705(A) 69,911
========= ===========
</TABLE>
<PAGE> 4
NTL INCORPORATED
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS,EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NTL DIAMOND*
(HISTORICAL) (HISTORICAL) ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES................................. $ 313,381 $ 28,798 $ -- $ 342,179
COSTS AND EXPENSES
Operating expenses....................... 161,544 10,046 171,590
Selling, general and administrative
expenses............................... 119,270 11,924 131,194
Franchise fees........................... 6,848 -- 6,848
Corporate expenses....................... 5,252 -- 5,252
Merger Costs ............................ -- 13,934 (13,934) --
Depreciation and amortization............ 141,734 15,277 24,319(B) 181,330
--------- -------- -------- ---------
434,648 51,181 (10,385) 496,214
--------- -------- -------- ---------
Operating loss........................... (121,267) (22,383) (10,385) (154,035)
OTHER INCOME (EXPENSE)
Interest and other income................ 11,013 2,144 13,157
Interest expense......................... (130,823) (25,561) -- (156,384)
Other.................................... 10,658 (40,572) (29,914)
--------- -------- -------- ---------
Loss before income taxes................. (230,419) (86,372) (10,385) (327,176)
Income tax benefit....................... -- -- -- --
--------- -------- -------- ---------
Net Loss................................. (230,419) (86,372) (10,385) (327,176)
Preferred stock dividends................ (13,092) -- -- (13,092)
--------- -------- -------- ---------
Net loss available to common stock....... $(243,511) $(86,372) $(10,385) $(340,268)
========= ======== ======== =========
Net loss per common stock -- basic and
fully diluted.......................... $ (3.82) $ (4.64)
========= =========
Weighted average shares outstanding...... 63,784 9,503 73,287
========= =========
</TABLE>
- --------------
* For the period from January 1, 1999 to date of acquisition (March 8, 1999).
<PAGE> 5
NTL INCORPORATED
PRO FORMA ADJUSTMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DIAMOND
----------
<S> <C>
A PURCHASE PRICE AND ALLOCATION
PURCHASE PRICE
NTL Shares issued........................................... 12,750
NTL stock price (prior to closing).......................... $ 76.19
----------
Subtotal.................................................... 971,452
Fees and other costs........................................ 8,430
----------
Purchase price.............................................. 979,882
Net tangible liabilities at date of acquisition............. 370,454
----------
Excess of Purchase Price over net tangible assets
acquired.................................................. $1,350,336
==========
ALLOCATED TO
Fixed assets................................................ $ 60,077
Customer Lists.............................................. 78,511
LAC......................................................... 84,875
Goodwill.................................................... 1,126,873
----------
$1,350,336
==========
</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 15 years).... $ (126) $ 4,005
Amortization of intangibles (over 2-15 years)............. 72,145 139,327
Historical amortization of intangibles.................... (42,790) (7,985)
-------- --------
$ 29,229 $135,347
======== ========
</TABLE>
<TABLE>
<S> <C>
For the three months ended March 31, 1999:
Depreciation of fixed asset allocation (over 15 years).... $ 735
Amortization of intangibles (over 2-15 years)............. 25,575
Historical amortization of intangibles.................... (1,991)
-------
$24,319
=======
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-----------------
<S> <C>
C CONSULTING REVENUE
Partners' consulting fee income earned under consulting
agreement with Birmingham which ceased upon the sale of
Birmingham............................................... $ 789
=======
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.......... $11,574
=======
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-----------------
<S> <C>
E INTEREST EXPENSE
Interest on ComTel debt not assumed......................... $(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........................................... 2,015
Historical interest expense on Partners' Credit Facility(2). (9,734)
-------
Net Statement of Operations Impact.......................... $62,417
=======
F PREFERRED STOCK DIVIDEND
Dividends at 9.9% on the preferred stock issued in the
ComTel and EGT acquisitions............................... $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 L.550
million. A portion of the purchase price (L.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.
