<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration Nos. 33-83740 and 33-98374
PROSPECTUS SUPPLEMENT NO. 4 TO PROSPECTUS DATED SEPTEMBER 17, 1996
DIAMOND CABLE COMMUNICATIONS PLC
13 1/4% SENIOR DISCOUNT NOTES DUE SEPTEMBER 30, 2004
11 3/4% SENIOR DISCOUNT NOTES DUE DECEMBER 15, 2005
---------------------
Interest will not accrue on the 13 1/4% Senior Discount Notes due September 30,
2004 (the "Initial Senior Notes") prior to September 30, 1999. Interest on the
Initial Senior Notes will be payable on March 31 and September 30 of each year,
commencing March 31, 2000, at a rate of 13 1/4% per annum. See "Description of
Initial Senior Notes" in the accompanying Prospectus. The Initial Senior Notes
are redeemable, in whole or in part, at the option of the Company at any time on
or after September 30, 1999, at the redemption prices set forth herein plus
accrued interest to the date of redemption. The Initial Senior Notes are also
redeemable in whole, but not in part, at the option of the Company at any time
at 100% of the principal amount plus accrued interest to the date of redemption
(or, prior to September 30, 1999, at 100% of Accreted Value) in the event of
certain tax law changes requiring the payment of additional amounts as described
herein. In addition, in the event that the Company (i) sells certain Equity
Securities in a Public Offering or (ii) consummates a Trade Sale, prior to March
31, 1997, the Company may, at its option, redeem up to a maximum of $71,275,250
in aggregate principal amount at maturity of Initial Senior Notes at a
redemption price of 113.25% of Accreted Value. The Company is required to offer
to repurchase all outstanding Initial Senior Notes at 101% of principal amount
plus accrued interest to the date of repurchase (or, prior to September 30,
1999, at 101% of Accreted Value on the date of repurchase) after the occurrence
of a Change of Control. See "Description of the Initial Senior Notes --
Redemption" in the accompanying Prospectus. There can be no assurance that the
Company will have the financial resources necessary or otherwise be able to
repurchase the Initial Senior Notes under such circumstances.
Interest will not accrue on the 11 3/4% Senior Discount Notes due December 15,
2005 (the "New Senior Notes") prior to December 15, 2000. Interest on the New
Senior Notes will be payable on June 15 and December 15 of each year, commencing
June 15, 2001 at a rate of 11 3/4% per annum. See "Description of the New Senior
Notes" in the accompanying Prospectus. The New Senior Notes are redeemable, in
whole or in part, at the option of the Company at any time on or after December
15, 2000, at the redemption prices set forth in the accompanying Prospectus plus
accrued interest to the date of redemption. The New Senior Notes are also
redeemable in whole, but not in part, at the option of the Company at any time
at 100% of the principal amount plus accrued interest to the date of redemption
(or, prior to December 15, 2000, at 100% of Accreted Value) in the event of
certain tax law changes requiring the payment of additional amounts as described
herein. Upon the occurrence of a Change of Control the Company is required to
offer to repurchase all outstanding New Senior Notes at 101% of principal amount
plus accrued interest to the date of repurchase (or, prior to December 15, 2000,
at 101% of Accreted Value on the date of repurchase) after the occurrence of a
Change of Control. In addition, upon the occurrence of an Asset Disposition, the
Company may be obligated to make an Offer to Purchase all or a portion of the
outstanding New Senior Notes at 100% of the principal amount plus accrued
interest to the date of repurchase (or, prior to December 15, 2000, at 100% of
Accredited Value on the date of repurchase). See "Description of the New Senior
Notes -- Redemption" in the accompanying Prospectus. There can be no assurance
that the Company will have the financial resources necessary or otherwise be
able to repurchase the New Senior Notes under such circumstances.
The Senior Notes constitute unsecured senior indebtedness of the Company. In
August 1996, certain of the Company's subsidiaries entered into a senior bank
lending facility of up to L340 million. In February and March 1997, the senior
bank lending facility was amended to reduce the aggregate amount available for
borrowing to L175 million and to revise certain covenants and conditions.
Indebtedness under the senior bank lending facility is effectively senior to the
Senior Notes as such indebtedness will be incurred by a subsidiary of the
Company, guaranteed by certain of the Company's other subsidiaries and secured
by liens on the assets of certain of the Company's subsidiaries and a pledge of
the issued shares of certain of the Company's subsidiaries other than Jewel
Holdings Limited. At March 31, 1997, the Company had approximately L501 million
of indebtedness outstanding, including approximately L126 million and L211
million in accreted value of Initial Senior Notes and the New Senior Notes,
respectively. Total Group indebtedness at such date was L501 million. The
Company has not issued, and does not have any current plans to issue, any
significant indebtedness that will be subordinated to the Senior Notes. The
Company is a holding company which conducts substantially all of its business
through subsidiaries, all of which are wholly-owned. The Senior Notes
effectively rank junior to any indebtedness of the Company's subsidiaries to the
extent of the assets of such subsidiaries and to any secured indebtedness of the
Company to the extent of the assets securing such indebtedness. The New Senior
Notes rank pari passu with the Initial Senior Notes.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
This Prospectus Supplement, together with the Prospectus dated September 17,
1996, Prospectus Supplement No. 1 thereto dated November 14, 1996, Prospectus
Supplement No. 2 thereto dated February 12, 1997 and Prospectus Supplement No. 3
thereto date April 2, 1997, is to be used by Goldman, Sachs & Co. in connection
with offers and sales of the Senior Notes related to market-making transactions
at negotiated prices related to prevailing market prices at the time of sale.
The Company will not receive any of the proceeds of such transactions. Goldman,
Sachs & Co. may act as a principal or agent in such transactions. See "Plan of
Distribution" in the Prospectus.
GOLDMAN, SACHS & CO.
---------------------
The date of this Prospectus Supplement is May 15, 1997.
<PAGE> 2
GENERAL
This Prospectus Supplement should be read in conjunction with the
Prospectus dated September 17, 1996, Prospectus Supplement No. 1 thereto dated
November 14, 1996, Prospectus Supplement No. 2 thereto dated February 12, 1997
and Prospectus Supplement No. 3 thereto dated April 2, 1997 (collectively, the
"Prospectus"). The Prospectus has been used by Goldman, Sachs & Co. in
connection with offers and sales related to market-making transactions in the
Senior Notes. This Prospectus Supplement, together with the Prospectus, is to be
used by Goldman, Sachs & Co. in connection with such transactions and
unsolicited purchases and sales.
Capitalized terms used in this Prospectus Supplement and not otherwise
defined have the same meanings as in the Prospectus.
RECENT DEVELOPMENTS
Operating Results. Attached hereto is the Company's Quarterly Report on
Form 10-Q filed on May 15, 1997, which includes, among other things, the
Company's unaudited interim financial statements as of, and for the three month
period ended, March 31, 1997, and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the three month period ended
March 31, 1997.
2
<PAGE> 3
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-83740
Diamond Cable Communications Plc
(Exact name of registrant as specified in its charter)
England and Wales N/A
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Diamond Plaza, Daleside Road
Nottingham NG2 3GG, England N/A
(Address of principal executive offices) (Zip code)
44-115-912-2217
(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 Registrant's Ordinary Shares of
2.5 pence each outstanding as of March 31, 1997 was 59,138,791.
<PAGE> 4
DIAMOND CABLE COMMUNICATIONS PLC
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION ............................................................ 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited condensed consolidated statements of
operations--Three months ended
March 31, 1997 and 1996....................................... 5
Unaudited condensed consolidated balance sheets--
March 31, 1997 and December 31, 1996 ......................... 6
Unaudited condensed consolidated statement of
shareholders' equity -- Three months
ended March 31, 1997 ......................................... 7
Unaudited condensed consolidated statements of cash
flows -- Three months ended March 31, 1997
and 1996 .................................................... 8
Notes to the unaudited condensed consolidated
financial statements......................................... 9
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition .......................... 11
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................... 21
SIGNATURES ............................................................. 22
</TABLE>
2
<PAGE> 5
INTRODUCTION
Diamond Cable Communications Plc (the "Company") is a public limited
company (with registered number 2965241) incorporated under the laws of England
and Wales. The Company is a holding company which holds all of the shares of
(i) Diamond Cable Communications (UK) Limited (formerly Diamond Cable
(Nottingham) Limited) ("DCL") and its subsidiaries and (ii) a group of
companies comprising East Midlands Cable Group Limited ("EMCG"), East Midlands
Cable Communications Limited and East Midlands Cable Holdings Limited
(collectively "LCL"), in both cases through an intermediate holding company,
Jewel Holdings Limited ("Jewel"). References herein to the "Group" refer to
the Company and its subsidiaries, including, since September 27, 1995, LCL, and
references to "Diamond" refer to the Company and its subsidiaries, excluding
LCL.
The Group operates a telecommunications and cable television business
focused on the East Midlands area of England. The Group is currently
constructing a broadband fiber-optic network to serve the approximately 1.2
million homes and an estimated 60,600 businesses within its contiguous
franchise areas. As of March 31, 1997, the Group's cable television and
telecommunications network had passed by civils construction approximately
473,700 homes and an estimated 24,700 businesses, of which portions of the
network passing approximately 366,500 homes and an estimated 18,800 businesses
had been activated. As of that date, the Group also had approximately 111,800
residential telephone lines, 60,000 cable television subscribers and 20,800
business telephone lines. Through that date, L.342 million had been invested
(at original cost) in the construction of the network and related systems.
____________________
THIS DOCUMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, IDENTIFIED AS
SUCH, WITH RESPECT TO WHICH THE COMPANY IS SEEKING TO UTILIZE THE SAFE HARBOR
PROVIDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE ACCOMPANIED BY, AND SHOULD BE READ IN CONJUNCTION WITH, AN
EXPLANATION OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS.
3
<PAGE> 6
The Company operates only in the United Kingdom and, accordingly,
publishes its financial statements in pounds sterling. In this Report,
references to "pounds sterling," "L." "pence" or "p" are to the lawful currency
of the United Kingdom and references to "U.S. dollars," "$" or "c." are to the
lawful currency of the United States. Merely for convenience, this Report
contains translations of certain pound sterling amounts into U.S. dollars at
specified rates. These translations should not be construed as representations
that the pound sterling amounts actually represent such U.S. dollar amounts or
could have been or could be converted into U.S. dollars at the rate indicated
or at any other rate. Unless otherwise indicated, the translations of pounds
sterling into U.S. dollars have been made at $1.6448 per L.1.00, the noon
buying rate in The City of New York for cable transfers in pounds sterling as
certified for customs purposes by the Federal Reserve Bank of New York (the
"Noon Buying Rate") on March 31, 1997. On May 12, 1997, the Noon Buying Rate
was $1.6235 per L.1.00.
4
<PAGE> 7
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DIAMOND CABLE COMMUNICATIONS PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------
1996 1997 1997
---- ---- ----
(NOTE 1)
(IN THOUSANDS)
<S> <C> <C> <C>
REVENUE
Business telecommunications ............ L. 2,371 L. 3,173 $5,219
Residential telephone .................. 3,551 6,171 10,150
Cable television ....................... 1,961 3,818 6,280
---------- ---------- ----------
7,883 13,162 21,649
---------- ---------- ----------
OPERATING COSTS AND EXPENSES
Telephone ............................... (2,680) (2,596) (4,270)
Programming ............................. (1,175) (2,292) (3,770)
Selling, general, and
administrative ........................ (4,865) (6,201) (10,199)
Depreciation and amortization ........... (4,633) (6,380) (10,494)
---------- ---------- ----------
(13,353) (17,469) (28,733)
---------- ---------- ----------
OPERATING LOSS .......................... (5,470) (4,307) (7,084)
Interest income ......................... 1,164 943 1,551
Interest expense and amortization of debt
discount and expenses ................. (9,961) (12,181) (20,035)
Foreign exchange losses, net ............ (5,398) (11,994) (19,728)
Unrealized gain on derivative financial
instrument ............................ 689 76 125
Realized gain on derivative financial
instrument ............................ -- 11,553 19,002
---------- ---------- ----------
Loss before income taxes ................ (18,976) (15,910) (26,169)
Income taxes ............................ -- -- --
---------- ---------- ----------
NET LOSS ................................ L.(18,976) L.(15,910) $(26,169)
========== ========== ==========
</TABLE>
See the accompanying notes to the Unaudited Condensed Consolidated
Financial Statements.
5
<PAGE> 8
DIAMOND CABLE COMMUNICATIONS PLC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AT AT MARCH 31,
DECEMBER 31, ----------------
1996 1997 1997
--------------- ---- ----
(NOTE 1)
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents ...................... L. 18,311 L.151,102 $248,533
Trade receivables (net of allowance for doubtful
accounts of L.1,691 at December 31, 1996 and
L.1,898 at March 31, 1997) .................... 6,389 6,762 11,122
Other assets ................................... 3,904 5,311 8,736
Deferred financing costs (less accumulated
amortization of L.1,325 at December 31, 1996
and L.1,868 at March 31, 1997) ................ 19,573 24,344 40,041
Property and equipment, net (note 3) ........... 277,301 297,424 489,203
Goodwill (less accumulated amortization of
L.6,064 at December 31, 1996 and L.7,277
at March 31, 1997) ............................ 90,896 89,683 147,510
Franchise costs (less accumulated
amortization of L.91 at December 31, 1996 and
L.96 at March 31, 1997) ....................... 445 440 724
TOTAL ASSETS ................................... L.416,819 L.575,066 $945,869
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable ............................... L. 18,528 L. 23,884 $ 39,285
Other liabilities .............................. 19,150 11,925 19,614
Senior discount notes .......................... 314,418 490,487 806,753
Capital lease obligations ...................... 8,146 8,262 13,589
Mortgage loan .................................. 2,477 2,460 4,046
Shareholders' equity
Ordinary shares (70,000,000 authorized;
59,138,791 issued at December 31, 1996 and
at March 31, 1997) .......................... 1,478 1,478 2,431
Non-voting deferred shares ................... -- -- --
Additional paid-in-capital ................... 134,466 134,466 221,170
Unrealized loss on securities ................ (197) (339) (557)
Accumulated deficit .......................... (81,647) (97,557) (160,462)
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY ........................................ L.416,819 L.575,066 $945,869
</TABLE>
See the accompanying notes to the Unaudited Condensed Consolidated
Financial Statements.
6
<PAGE> 9
DIAMOND CABLE COMMUNICATIONS PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
NON-VOTING ADDITIONAL PAID-
ORDINARY SHARES DEFERRED SHARES IN-CAPITAL
--------------- --------------- ----------------
(IN THOUSANDS EXCEPT SHARE DATA)
NUMBER NUMBER
------- -------
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1997 ....... 59,138,791 L.1,478 6 -- L.134,466
Unrealized loss on securities .... -- -- -- -- --
Net loss ......................... -- -- -- -- --
BALANCE AT MARCH 31, 1997 ........ 59,138,791 L.1,478 6 -- L.134,466
UNREALIZED TOTAL
LOSS ON SHAREHOLDERS'
SECURITIES ACCUMULATED DEFICIT EQUITY
---------- ------------------- -------------
(IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
BALANCE AT JANUARY 1, 1997 ....... L.(197) L.(81,647) L.54,100
Unrealized loss on securities .... (142) -- (142)
Net loss ......................... -- (15,910) (15,910)
BALANCE AT MARCH 31, 1997 ........ L.(339) L.(97,557) L.38,048
</TABLE>
See the accompanying notes to the Unaudited Condensed Consolidated Financial
Statements.
7
<PAGE> 10
DIAMOND CABLE COMMUNICATIONS PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1996 1997 1997
---- ---- ----
(NOTE 1)
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ................................................... L.(18,976) L.(15,910) $(26,169)
Adjustments to reconcile net loss to net cash (used
in)/provided by operating activities:
Depreciation and amortization ............................ 4,633 6,380 10,494
Unrealized foreign exchange losses ....................... 5,296 11,193 18,410
Loss on disposition of assets ............................ -- 11 18
Accretion of Senior Note discount ........................ 9,478 11,184 18,395
Provision for losses on accounts receivables ............. 278 207 341
Amortization of deferred financing costs ................. 209 543 893
Change in operating assets and liabilities:
Change in trade receivables ............................ (927) (580) (954)
Change in other assets ................................. 690 (1,407) (2,314)
Change in accounts payable ............................. (1,595) 6,311 10,380
Change in other liabilities ............................ (995) (7,459) (12,268)
Net cash (used in)/provided by operating activities ........ (1,909) 10,473 17,226
Cash flows from investing activities:
Cash invested in property and equipment .................. (36,051) (26,105) (42,937)
Proceeds from disposition of assets ...................... 2 8 13
Net cash used in investing activities ...................... (36,049) (26,097) (42,924)
Cash flows from financing activities:
Proceeds of issue of debt ................................ -- 153,692 252,792
Debt financing costs ..................................... -- (4,767) (7,841)
Repayment of mortgage loan ............................... -- (17) (28)
Capital element of capital lease repayments .............. (217) (351) (577)
Net cash (used in)/provided by financing activities ........ (217) 148,557 244,346
Net (decrease)/increase in cash and cash equivalents ....... (38,175) 132,933 218,648
Cash and cash equivalents at beginning of period ........... 93,308 18,311 30,118
Effect of exchange rate changes on cash and cash equivalents 804 (142) (233)
Cash and cash equivalents at end of period ................. L.55,937 L.151,102 $248,533
</TABLE>
See the accompanying notes to the Unaudited Condensed Consolidated
Financial Statements.
8
<PAGE> 11
NOTES TO THE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
Diamond Cable Communications Plc (the "Company") owns and operates cable
television and telecommunications systems through its subsidiaries. The
unaudited consolidated financial statements of the Company and its subsidiaries
(the "Group") have been prepared in accordance with U.S. generally accepted
accounting principles and the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
The financial statements are stated in pounds sterling (L.). Merely for
convenience the financial statements contain translations of certain pound
sterling amounts into U.S. dollars at $1.6448 per L.1.00, the noon buying rate
in the City of New York for cable transfers in pounds sterling as certified for
customs purposes by the Federal Reserve Bank of New York on March 31, 1997.
2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The financial statements as of and for the periods ended March 31, 1997
and 1996 are unaudited. However, in the opinion of the management, such
statements include all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the results for the periods
presented. The results of operations for any interim period are not
necessarily indicative of the results for the full year. The interim financial
statements should be read in conjunction with the financial information
included in the Company's 1996 Annual Report on Form 10-K filed with the SEC.
9
<PAGE> 12
3. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
LAND AND CABLE OFFICE MOTOR
BUILDINGS NETWORK EQUIPMENT VEHICLES TOTAL
--------- ------- --------- -------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Acquisition costs
Balance at January 1, 1997 ........ L.5,018 L.298,062 L.6,069 L.435 L.309,584
Additions ......................... -- 24,928 376 -- 25,304
Dispositions ...................... -- (53) -- (107) (160)
Balance at March 31, 1997 ......... 5,018 322,937 6,445 328 334,728
Accumulated depreciation
Balance at January 1, 1997 ........ 314 28,941 2,780 248 32,283
Charge for period ................. 45 4,611 490 16 5,162
Dispositions ...................... -- (53) -- (88) (141)
Balance at March 31, 1997 ......... 359 33,499 3,270 176 37,304
March 31, 1997 net book value ..... 4,659 289,438 3,175 152 297,424
December 31, 1996 net book value .. L.4,704 L.269,121 L.3,289 L.187 L.277,301
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
The Company is obligated under the terms of its existing licenses, and
under the milestone requirements of its local delivery licenses ("LDLs"), to
construct cable systems passing a predetermined number of premises. Should the
Company fail to achieve these milestones, without license modifications, the
Director General could commence proceedings to require compliance. Similarly,
the Independent Television Commission ("ITC") may commence proceedings to
require compliance with the build milestones in the LDLs. If the Company is
unable to comply, its licenses in respect of which milestones have not been met
could be revoked, which could have a material adverse effect on the Company.
5. 1997 SENIOR NOTES
On February 21, 1997 the Company issued $420,500,000 of 10 3/4% Senior
Discount Notes due February 15, 2007 ("the 1997 Senior Notes") at an issue
price of $594.48 per $1.000 principal. Total proceeds received by the Company
amounted to approximately L.149 million after issuance costs of approximately
L.5 million. Interest on the 1997 Senior Notes will be payable on February 15
and August 15 of each year commencing August 15, 2002.
10
<PAGE> 13
DIAMOND CABLE COMMUNICATIONS PLC
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
The Company expended net cash to fund investing activities of L.128.2
million and L.26.1 million in the year ended 1996 and the first three months of
1997, respectively. Net cash provided by financing activities in the year
ended December 31, 1996 was L.54.4 million and net cash provided by financing
activities was L.148.6 million in the first three months of 1997. The
Company's investing activities consisted almost exclusively of the ongoing
construction of the network (L.26.1 million in the first three months of 1997
and L.128.2 million in 1996). In 1996 the Company's net cash used in operating
activities was L.1.3 million and in the three months to March 31, 1997 the
Company's net cash provided by operating activities was L.10.5 million. The
Group's cash and funding requirements historically have been met principally
through the issuance of senior discount notes ("Senior Notes") in September
1994 and December 1995, equity capital, advances from its shareholders, and
from bank and lease financing. In February 1997, the Company issued another
series of Senior Notes, raising net proceeds of approximately $240 million
(L.149 million).
In August 1996, certain of the Company's subsidiaries entered into a
senior bank lending agreement that permitted borrowing up to an aggregate
amount of L.340 million. In February 1997, the senior bank facility was
amended, and the Company has subsequently negotiated further amendments to the
senior bank facility (as amended, the "Senior Bank Facility"), including a
reduction in the amount available for borrowing under the facility to L.175
million to reflect the additional proceeds available to the Company through the
February issue of Senior Notes. DCL will be able to draw on the Senior Bank
Facility if certain conditions are met, including conditions related to the
operating cash flow of, equity contributions to and certain financial ratios of
Jewel and its subsidiaries (together, the "Borrower Group"). To date, no funds
have been drawn under the facility, and the Company does not anticipate
borrowing under the facility prior to meeting the necessary conditions. The
facility does allow for the provision of guarantees and the Company has drawn a
bond of L.1.2 million in order to meet its obligations under the Group's
telecommunications licenses. Indebtedness under the Senior Bank Facility will
be incurred by DCL, guaranteed by the Borrower Group and secured by a lien on
the assets of the Borrower Group and a pledge of the issued shares of the
Borrower Group other than Jewel but including DCL and LCL.
The further development and construction of the Group's cable television
and telecommunications network will require substantial capital investment. The
Group is obligated by the milestones in its telecommunications licenses and
LDLs to construct and activate a network passing an aggregate of 1,021,894
premises within prescribed time periods.
11
<PAGE> 14
Failure by the Group to meet its milestones could potentially subject the
Group to enforcement orders from OFTEL or the ITC, which could lead to
revocation of the relevant licenses or a shortening of an LDL period or fines.
In addition, under the Senior Bank Facility, failure to meet the Group's
milestone obligations could under certain circumstances prevent further
borrowing or result in an event of default. The Group met the required
quarterly milestone obligations under each of its telecommunications licenses
as at March 31, 1997.
The Company expects that the Group's residential cable network will extend
approximately 14,300 kilometers (plus 920 kilometers to interconnect the
residential build) and pass approximately 1.2 million homes once completed. The
network will be substantially completed by the end of 2001. The Company
currently estimates that the additional capital expenditures required for the
Group to substantially complete the network (including estimated subscriber
connection expenses) will be approximately L.550 million (of which L.500
million relates to capital expenditures occurring from March 31, 1997 through
January 1, 2001), although these amounts could vary significantly.
The Company believes that available cash reserves and cash flows from
operations will be sufficient to complete the planned construction through the
first quarter of 1998, at which time the Group estimates that approximately
61.4% of the aggregate final milestones will have been constructed and
activated. Thereafter, the Company expects that the Group will be able to
utilize amounts under the Senior Bank Facility. If such amounts are not
available or are insufficient, the Group would be required to obtain further
debt and/or equity financing.
DCL will be able to draw on the Senior Bank Facility if it is able in the
future to meet certain conditions, including conditions related to the
operating cash flow of, equity contributions to and certain financial ratios of
the Borrower Group which are not currently met. However, the Group may not be
able to borrow sufficient funds under the Senior Bank Facility to meet its
remaining funding requirements. In particular, even after the initial
conditions to borrowing have been met the amount of funds that may be borrowed
will be limited to a specified multiple of the Borrower Group's reported
annualized cash flow (as defined in the Senior Bank Facility). This reported
annualized cash flow will depend on a number of variables,including revenue
market share of business telecommunications and penetration of residential
telephone, cable television and premium channels, average revenues in each of
these areas, churn, expenses such as programming costs and interconnect
charges, network construction and development expenditures and financing costs.
Adverse developments in any of these or other areas could adversely affect the
Borrower Group's reported annualized cash flow and reduce amounts available
under the Senior Bank Facility.
To the extent that (i) the Group is unable to utilize fully the Senior
Bank Facility, (ii) the amounts required to complete the Group's
12
<PAGE> 15
planned build out exceed its estimates or (iii) the Borrower Group's
reported annualized cash flow (as defined in the Senior Bank Facility) does not
meet expectations, the Group will require additional debt and/or other
financing. There can be no assurance that any such debt financing will be
permitted under the terms of the Group's debt instruments, which limit the
incurrence of additional debt by the Group, or that any such debt or other
financing will be available on acceptable commercial terms or at all.
The foregoing information with regard to expected completion times, future
capital expenditures and the sufficiency of funding is forward-looking in
nature. Due to factors identified in the preceding two paragraphs and below,
actual results may differ materially from the expected results. There can be no
assurance that (i) conditions precedent to advances or the availability of
funds under any of the Group's existing and anticipated debt instruments will
be satisfied when funds are required; (ii) the Group will be able to generate
sufficient cash from operations to meet any unfunded portion of its capital
requirements when required; (iii) the cost of constructing and activating the
network will not increase significantly; (iv) the Group will not acquire
additional franchise areas, which would require additional capital
expenditures; or (v) the Group will not incur losses from foreign currency
transactions or its exposure to foreign currency exchange rate fluctuations.
The inability of the Group to secure additional financing could result in
a failure to comply with the minimum build milestones set forth in its licenses
and could ultimately lead to the revocation of such licenses.
The Group's revenues are denominated in pounds sterling, while its
obligations to pay interest and principal on the three series of Senior Notes
are denominated in U.S. dollars. Therefore, the Company and the Group are
subject to currency exchange risks that may adversely affect their ability to
meet their obligations, including obligations under outstanding debt
instruments, as they become due.
SELECTED OPERATING DATA
The following table sets forth certain data concerning the Group's
franchises at and for the years ended December 31, 1995 and 1996 and at and for
the three-month period ended March 31, 1997. The combined operating data at
and for the year ended December 31, 1995 reflects the acquisition of LCL on a
pro-forma basis as if it had been completed at the beginning of 1995.
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------- MARCH 31,
1995 1996 1997
DIAMOND LCL COMBINED
------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
Homes passed by civils construction(1) 222,335 58,976 281,311 453,496 473,741
Homes activated(2) ................... 105,951 51,955 157,906 347,246 366,513
Homes marketed(3) .................... 77,657 48,950 126,607 252,601 280,990
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CABLE TELEVISION
Basic service subscribers ................... 20,261 10,488 30,749 59,242 60,008
Penetration rate of homes marketed(4) ....... 26.1% 21.4% 24.3% 23.5% 21.4%
Average monthly revenue per subscriber(5) ... L.16.80 L.18.89 L.17.62 L.18.03 L.20.35
Churn(6) .................................... 35.5% 31.0% 33.8% 40.9% 46.8%(7)
RESIDENTIAL TELEPHONE
Residential lines connected ................. 36,122 16,576 52,698 104,460 111,881
Penetration rate of homes marketed(4) ....... 46.5% 33.9% 41.6% 41.4% 39.8%
Average monthly revenue per line(8)(9) ...... L.18.68 L.22.19 L.19.88 L.18.40 L.18.62
Pro-forma average monthly revenue per line(9) L.18.11 L.21.35 L.19.22 L.18.64 L.18.62
Churn(6) .................................... 13.9% 17.2% 15.0% 20.6% 18.1%(7)
BUSINESS TELECOMMUNICATIONS
Business customers accounts ................. 1,627 772 2,399 3,935 4,339
Business lines connected .................... 7,036 2,843 9,879 18,932 20,874
Private circuits(10) ........................ 151 10 161 226 232
Average lines per business(11) .............. 4.3 3.7 4.1 4.8 4.8
Average monthly revenue per line(9)(12) ..... L.74.60 L.59.60 L.70.23 L.50.17 L.47.14
Pro-forma average monthly revenue per line(9) L.72.02 L.56.88 L.67.70 L.51.25 L.47.14
</TABLE>
(1) Homes passed by civils is the number of homes that have had ducting buried
outside.
(2) Homes activated is the number of homes that are capable of receiving cable
service without further extension of transmission lines, apart from the
final connection to the home.
(3) Homes marketed is the number of homes activated for which the initial
marketing phase has been completed.
(4) Penetration rate of homes marketed is calculated by dividing the number of
homes receiving basic cable television or the number of residential lines
connected, as the case may be, on the given date by the total number of
homes marketed for the given service as of such date, expressed as a
percentage.
(5) The average monthly revenue per cable television subscriber is calculated
by dividing total cable television subscriber revenues (excluding
installation revenues) for the period by the average number of cable
television subscribers (calculated as a simple average of the number of
basic service subscribers at the end of each month during the period) and
dividing that amount by 12 (for the years ended December 31, 1995 and 1996)
or by three (for the three months ended March 31, 1997).
(6) Churn is calculated by dividing net disconnections (total disconnections
less the number of disconnected accounts for which service is later
restored) in a period by the average number of subscribers in the period
(calculated as a simple average of the number of subscribers at the end of
each month during the period). Churn for the three months ended March 31,
1997 is annualized by multiplying the amount as calculated above by four.
(7) The Company changed the method of calculating churn for the quarter ended
March 31, 1997 to eliminate from the number of net disconnected accounts
those subscribers who disconnect from the service when moving residence and
reconnect to the service in their new residence. These subscribers could
not be identified under the Company's information systems prior to the
first quarter of 1997 and were therefore included in the churn calculation
as disconnected accounts. If churn for the quarter to March 31, 1997 were
calculated on a basis consistent with prior periods churn would have been
(annualized) 49.7% and 21.9% for cable television and residential
telephone, respectively. The difference between churn on the new and prior
bases is not necessarily indicative of the adjustment that would arise if
it were possible to recalculate the churn for prior quarters.
(8) The average monthly revenue per residential telephone line is calculated by
dividing (i) line and equipment rental, outgoing call charges and incoming
call charges for the period by (ii) the average number of residential
telephone lines (calculated as a simple average of the number of subscribed
lines at the end of each month during the period) and dividing that amount
by 12 (for the years ended December 31, 1995 and 1996) or by three (for the
three months ended March 31, 1997).
(9) The calculation of the average monthly revenue per line (for both
residential telephone and business telecommunication revenues) for the year
to December 31, 1996 reflects the reduction in revenues stemming from
rebates to BT on incoming termination revenues relating in part to 1995 but
recorded in full against revenues in 1996. The rebates were calculated in
accordance with recently revised interconnect agreements with BT that were
made effective retroactively from April 1995. The pro-forma average
monthly revenue per line (for both residential telephone and business
telecommunications revenues) gives effect to the revised interconnect
agreements as if they had been in effect from April 1995 and allocates to
each period the portion of the rebates that relates to such period.
14
<PAGE> 17
(10) Private circuits are point-to-point customer specific connections for which
a fixed annual rental charge is made.
(11) Average lines per business account is calculated by dividing the number of
business lines connected on the given date by the number of business
customer accounts on such date.
(12) The average monthly business telecommunications revenue per line is
calculated by dividing (i) business telecommunications line and equipment
rental, outgoing call charges and incoming call charges (including revenue
from private circuits) for the period by (ii) the average number of
business telecommunications lines and private circuits (calculated as a
simple average of the number of subscribed lines and private circuits at
the end of each month during the period) and dividing that amount by 12
(for the years ended December 31, 1995 and 1996) or by three (for the
three months ended March 31, 1997).
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1996 AND 1997
The Group continued to experience increases in its subscribers, revenues
and expenses during the three month period ended March 31, 1997. In general,
these increases were attributable to the Group's continued network
construction, activation and marketing of new homes and businesses. Homes
passed by civils construction increased by 20,245 homes (4.5%) and homes
activated increased by 19,267 (5.5%) from December 31, 1996 to March 31, 1997.
During the three months to March 31, 1997 the Company's pace of civils
construction and activation slowed due in large part to the phase out during
the period of one of the Company's largest contractors which went into
liquidation. Nevertheless, the Group met the required quarterly milestone
obligations under each of its telecommunications licenses as at March 31, 1997.
In addition, in order to improve the management and quality of the
residential sales force, in February 1997 the Company terminated arrangements
with its independent sales contractors and began to develop its own internal
sales force through direct hiring of residential sales people. Prior to this
reorganization, the sales force comprised approximately 150 residential sales
people who were employed by the independent contractors that the Group paid on
a full commission basis. The Group now employs residential sales people
directly and pays them on the basis of a salary plus sales commission. At
March 31, 1997, the Company employed approximately 120 residential sales
people, including former contracted sales people who were hired by the Company
in accordance with its employment criteria following interviews. The Company
is planning to increase the number of residential sales people further. The
reorganization has delayed the progress of marketing and affected penetration
in the areas being marketed during this transitional period. At March 31,
1997, residential telephone line penetration had fallen to 39.8% and cable
television penetration had fallen to 21.4% from 41.4% and 23.5% respectively at
December 31, 1996. Penetration rates for residential telephone and cable
television were 41.9% and 23.9% at March 31, 1996.
REVENUE
15
<PAGE> 18
For the three months ended March 31, 1997, total revenues were L.13.2
million, a 67% increase over total revenues of L.7.9 million for the comparable
period in 1996. This growth is attributable to increases in revenues in all
three of Diamond's primary lines of business.
As a result of entering into revised interconnect agreements with BT which
will apply retroactively, the Company will receive outgoing interconnect charge
rebates relating to all periods prior to December 31, 1996 and must pay
incoming termination rebates relating to the period from April 1, 1995 to
December 31, 1996. Based on interim rates for the year to March 31, 1997, no
rebates will be payable to or due from BT for the three month period to March
31, 1997. The rebates that will be paid to BT relating to the incoming
termination element amount to an estimated L.1,351,000 based on draft final
rates for the twelve month period from April 1, 1995 and interim rates for the
nine month period from April 1, 1996. This amount has been provided by
reducing residential telephone and business telecommunications revenues in 1996
by L.776,000 and L.575,000, respectively, of which L.151,000 and L.122,000,
respectively, relates to the three month period ended March 31, 1996. The
total amount of rebates to be received by the Company will be determined by the
parties once BT has furnished to the Company a proposed calculation and
supporting data and OFTEL has determined the final rates applicable. The
Company has estimated that the amount of the rebate due to the Company from BT
will exceed the amount of the rebates to be provided by the Company to BT.
Pending final determination of rebates, the Company has recognized a reduction
in interconnect charges in the same period during which the related reduction
in revenues is being recognized. Accordingly, a reduction in telephone
expenses of L.1,351,000 has been recorded in 1996 of which L.273,000 relates to
the three month period ended March 31, 1996.
The analysis of revenue and average revenue per line is provided below on
the basis of revenues as reported as well as on a pro-forma basis for periods
up to December 31, 1996 adjusting for the incoming termination rebates in the
appropriate periods as if the revised interconnect agreements and the draft
final rates for the year to March 31, 1996 and interim rates for the nine
months to December 31, 1996 had been in effect.
Business Telecommunications. Business telecommunications revenue was
L.3.2 million for the three month period ended March 31, 1997 compared to L.2.4
million (pro-forma L.2.2 million) for the comparable period in 1996,
representing an increase of 34% (41% on a pro-forma basis). The growth in
reported revenues is due primarily to an increase in the number of business
lines installed from 11,054 at March 31, 1996 to 20,874 at March 31, 1997, an
increase of 89%. The growth in the number of business lines was partially
offset by lower monthly revenue per line. The monthly revenue per line
decreased from L.70.70 in the three months to March 31, 1996 (L.66.90 on a pro-
16
<PAGE> 19
forma basis) to L.47.14 in the comparable period in 1997. This decline was due
to a combination of (i) Diamond's success in marketing Centrex services which
has the effect of increasing the average number of lines held by existing and
new customers taking those services (the Company operated 8,522 Centrex lines
at March 31, 1997 compared to 2,832 Centrex lines at March 31, 1996), (ii) a
reduction in certain tariffs in response to price reductions by competitors,
including BT, Diamond's principal competitor for business telecommunications
services which reduced in June 1996 its prices by an average of 10% for most of
its business customers and made smaller price reductions at other times during
1996, and (iii) the installation for existing customers of an increasing number
of lines utilized for incoming calls in addition to existing lines dedicated
solely to outgoing calls. Monthly revenue per line has remained relatively
stable during the three month periods ended September 30, 1996, December 31,
1996 and March 31, 1997. The Company may lower prices in the future if
necessary for competitive reasons.
Residential Telephone. Residential telephone revenues were L.6.2 million
in the three month period to March 31, 1997 compared to L.3.6 million (L.3.4
million on a pro-forma basis) for the comparable period in 1996, an increase of
74% (79% on a pro-forma basis). The growth in residential telephone revenue is
due primarily to an increase in the number of residential telephone lines from
64,095 at March 31, 1996 to 111,881 at March 31, 1997, representing an increase
of 75%. Monthly revenue per line was L.19.88 (pro-forma L.19.24) in the three
month period to March 31, 1996 and L.18.62 in the comparable period in 1997.
The fall in average revenues was partly due to a reduction in overall tariffs
for LCL subscribers in July 1996 to conform tariffs for all Diamond subscribers
together with additional call tariff reductions in late 1996. These call
tariff reductions were partly offset by increases in line rental charges in
January 1997. The Company will continue to review and adjust its tariffs to
maintain its price competitive advantage. The churn rate (annualized) was
18.1% for the first three months of 1997 (21.9% before taking into account the
new adjustments described above in Note 7 to the Selected Operating Data) as
compared to 16.0% in the comparable period in 1996. The increase in churn in
1997 is attributable in part to a tighter disconnect policy for certain
customers and ongoing efforts by BT aimed at regaining former customers.
Cable Television. Cable television revenues increased from L.2.0 million
in the three months to March 31, 1996 to L.3.8 million in the comparable period
in 1997, an increase of 95%. This growth in cable television revenue was
primarily due to a combination of an increase in the number of cable television
subscribers which rose from 36,574 at March 31, 1996 to 60,008 at March 31,
1997, an increase of 64% and an increase in the average monthly revenue per
subscriber from L.18.23 for the first three months of 1996 to L.20.35 for the
comparable period in 1997. The
17
<PAGE> 20
increase in average revenue per subscriber is primarily due to increases in
cable television pricing. The number of cable television subscribers increased
by 766 from 59,242 at December 31, 1996 to 60,008 at March 31, 1997. This was
supplemented by an increase in average revenues from L.18.94 in the quarter to
December 31, 1996 to L.20.35 in the quarter to March 31, 1997, resulting in an
increase in cable television revenues of 15% between the quarter to December
31, 1996 and the first quarter of 1997. The small increase in the number of
subscribers was due to the delay in the sales effort described earlier and the
level of churn.
The Group's churn rate was 46.8% for the three months to March 31, 1997
(49.7% before taking into account the new adjustments described above in Note 7
to the Selected Operating Data) as compared to a churn rate of 36.6% in the
comparable period in 1996. The Company believes that the increase in churn was
due in part to the continuing effect of increases in the fourth quarter of 1996
in premium subscription rates which led certain longer-term customers who had
previously benefitted from grandfathered rates, to disconnect service, the
effect of an increase in the basic subscription rate, additional price
increases resulting from the Company passing on to its customers a new BskyB
charge for Sky Sports 3 (which BSkyB provides to its own sports subscribers at
no additional charge) and other aggressive promotional activity of BSkyB, as
well as to the application of a stricter disconnect policy relating to non
payment. With the aim of reducing churn among new subscribers, the Company has
begun to require payment of an installation fee in connection with the
subscription for new residential services and is evaluating other means to
reduce its churn in the future.
OPERATING COSTS AND EXPENSES
Telephone expenses, consisting principally of interconnect charges payable
to BT, Mercury and Energis were L.2.7 million in the three months to March 31,
1996 and L.2.6 million in the three months to March 31, 1997. On a pro-forma
basis reflecting the apportioned reduction in interconnect charges resulting
from the revised interconnect agreements in the appropriate periods to which
they relate, telephone expenses would have been L.2.4 million in the three
months to March 31, 1996. As a percentage of combined business
telecommunications and residential telephone revenues, these direct costs
decreased from 45% (42% on a pro-forma basis) in the three months to March 31,
1996 to 28% in the comparable period in 1997 due primarily to reduced
interconnect charges paid to these operators.
Direct costs for cable television programming, which generally depend on
the number of subscribers and per-subscriber rates charged by programming
suppliers, increased from L.1.2 million in the three months to March 31, 1996
to L.2.3 million in the comparable period in 1997. As a percentage of cable
18
<PAGE> 21
television revenues, these direct costs were 60% in both the three month
periods ended March 31, 1996 and 1997.
Selling, general and administrative expenses increased by 27% from the
three months to March 31, 1996 to the comparable period in 1997. The increase
was due to higher administration costs associated with the expansion of the
Company's business. In February 1997, the Group began employing residential
sales people directly and paying them on the basis of a salary plus sales
commissions.
Depreciation and amortization expenses increased by 38% from the three
month period to March 31, 1996 to the comparable period in 1997. This increase
was attributable to the increasing size of the Company's network.
INTEREST INCOME/EXPENSE
Interest expense was L.12.2 million in the three months ended March 31,
1997 compared to L.10.0 million in the comparable period in 1996. The increase
is due primarily to the accretion on the Senior Notes of L.11.2 million in the
first quarter of 1997 (compared to L.9.5 million in the first quarter of 1996).
In addition, amortization of debt financing costs was L.0.5 million and other
interest expense was L.0.5 million in the three months to March 31, 1997,
compared to L.0.2 million and L.0.3 million respectively in the three months to
March 31, 1996. Interest received was L.0.9 million in the three months to
March 31, 1997 through temporary investments of the proceeds of the 1997 Senior
Notes.
FOREIGN EXCHANGE
A substantial portion of the Group's existing debt obligations are
denominated in U.S. dollars, while the Group's revenues and accounts are
generated and stated in pounds sterling. Foreign currency translation gains and
losses, except for unrealized gains and losses on available-for-sale
securities, are reported as part of the profit or loss of the Group. In the
year ended December 31, 1996, the Group recognized an unrealized foreign
exchange gain on the translation of its liability on the Senior Notes issued in
1994 and 1995 of L.31.5 million, an unrealized gain on its short-term
securities of L.0.1 million and a net realized foreign exchange loss of L.0.4
million relating to its operations. During the three months ended March 31,
1997, the Group recorded a net foreign exchange loss of L.12.0 million
primarily due to the unrealized loss on translation of its liability on the
Senior Notes.
GAINS ON DERIVATIVE FINANCIAL INSTRUMENTS
Unrealized gains on derivative financial instruments of L.0.1 million in
the three months to March 31, 1997 consist of the
19
<PAGE> 22
mark-to-market valuation of an interest rate swap commitment.
The Company entered into a foreign exchange forward contract on November
1, 1996 for settlement on May 6, 1997 to sell L.200 million at a rate of
$1.6289 to L.1. On January 31, 1997 an offsetting agreement was entered into at
a rate of $1.6014 to L.1. The offsetting contracts were settled on February 6,
1997 with a payment of approximately L.3.4 million to the Company. Because of
changes in prevailing rates, the Company recorded for the year ended December
31, 1996, an unrealized loss of approximately L.8.1 million on the pounds
sterling sell forward contract which partially offset the gain that was
recorded on the translation of the U.S. dollar denominated obligations on the
1994 Senior Notes and 1995 Senior Notes during the same period. During the
first quarter of 1997, the Company has recorded a gain of approximately L.11.5
million on the two offsetting forward contracts, reflecting the reversal of an
L.8.1 million loss referred to above and the approximately L.3.4 million cash
payment on settlement of the contracts. The realized gain on the foreign
exchange forward contract in the first quarter of 1997 largely offset the
unrealized loss that was recorded in the same period on the translation of the
U.S. dollar denominated obligations on the Senior Notes. The Company may from
time to time in the future enter into similar foreign currency contracts based
on its assessment of foreign currency market conditions and their effect on the
Group's operations and financial condition. Therefore, changes in currency
exchange rates may continue to have a material effect on the results of
operations of the Group and may materially affect the Company and the Group's
ability to satisfy their obligations, including obligations under outstanding
debt instruments, as they become due.
NET LOSS
As a result of the foregoing factors, Diamond had net losses of L.15.9
million in the three-month period ended March 31, 1997, compared to net losses
of L.19.0 million in the comparable period of 1996.
20
<PAGE> 23
DIAMOND CABLE COMMUNICATIONS PLC
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -
None.
(b) Reports on Form 8-K -
The Company filed on March 12, 1997 a report on Form 8-K announcing the
retirement of its Managing Director, Gary L. Davis.
21
<PAGE> 24
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.
DIAMOND CABLE COMMUNICATIONS PLC
Date: May 15, 1997 By: /s/ Robert Goad
------------------------------
Robert Goad
(Chief Executive Officer)
Date: May 15, 1997 By: /s/ Nicholas Millard
------------------------------
Nicholas Millard
(Chief Financial Officer)
Date: May 15, 1997 By: /s/ Duncan Craig
------------------------------
Duncan Craig
(Chief Accounting Officer)
22
<PAGE> 25
[ARTICLE] 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
10-Q DATED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
[MULTIPLIER] 1,000
[CURRENCY] POUNDS STERLING
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-START] JAN-01-1997
[PERIOD-END] MAR-31-1997
[EXCHANGE-RATE] 1.6448
[CASH] 151,102
[SECURITIES] 0
[RECEIVABLES] 8,660
[ALLOWANCES] 1,898
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 334,728
[DEPRECIATION] 37,304
[TOTAL-ASSETS] 575,066
[CURRENT-LIABILITIES] 0
[BONDS] 490,487
[COMMON] 1,478
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 36,570
[TOTAL-LIABILITY-AND-EQUITY] 575,066
[SALES] 0
[TOTAL-REVENUES] 13,162
[CGS] 0
[TOTAL-COSTS] 17,469
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 207
[INTEREST-EXPENSE] 12,181
[INCOME-PRETAX] (15,910)
[INCOME-TAX] 0
[INCOME-CONTINUING] (15,910)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (15,910)
[EPS-PRIMARY] 0
[EPS-DILUTED] 0
</TABLE>
