UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended:
SEPTEMBER 30, 2000
OR
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition Period from ________ to ________.
Commission File Number 33-83740
DIAMOND CABLE COMMUNICATIONS LIMITED
--------------------------------------------------------------------------------
(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.)
Secretary
NTL Incorporated
110 East 59th Street
Diamond Plaza, Daleside Road New York, NY 10022
Nottingham NG2 3GG, England (212) 906-8440
--------------------------------------------------------------------------------
(Address of Registrant's (Name, address and telephone
principal executive offices) number of agent for service)
--------------------------
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
--- ---
--------------------------
As of September 30, 2000, there were 59,138,851 shares of the Registrant's
Ordinary Shares of 2.5 pence each outstanding. The Registrant is an indirect,
wholly owned subsidiary of NTL Incorporated and there is no market for the
Registrant's shares. The Registrant meets the conditions set forth in General
Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form with
the reduced disclosure format.
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
TABLE OF CONTENTS
Page
Number
------
PART I. FINANCIAL INFORMATION
------- ---------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 2000 (Unaudited) and December 31, 1999...........2
Condensed Consolidated Statements of Operations
for the Nine and Three Months Ended September 30, 2000
and 1999 (Unaudited)...........................................3
Condensed Consolidated Statement of Shareholder's Deficiency
for the Nine Months Ended September 30, 2000 (Unaudited).......4
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2000 and 1999 (Unaudited)......5
Notes to the Condensed Consolidated Financial Statements
(Unaudited)................................................6 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............9 - 11
PART II. OTHER INFORMATION
-------- -----------------
Item 6. Exhibits and Reports on Form 8-K..............................12
SIGNATURES............................................................13
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
PART I FINANCIAL INFORMATION
------ ---------------------
ITEM 1. FINANCIAL STATEMENTS
------- --------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------------- -----------------
(Unaudited) (See Note)
(in (UK Pound)000's)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents..................................................... (UK Pound)49,814 (UK Pound)124,348
Trade receivables - less allowance for doubtful accounts
of (UK Pound)5,796 (2000) and (UK Pound)4,100 (1999)....................... 15,037 14,050
Due from affiliates........................................................... 77 2,387
Other......................................................................... 5,189 4,350
--------------------- -----------------
Total current assets....................................................... 70,117 145,135
Property and equipment - net ..................................................... 510,190 518,056
Deferred financing costs - net of accumulated amortization of
(UK Pound)9,249 (2000) and (UK Pound)7,288 (1999)............................. 15,903 17,864
Goodwill - net of accumulated amortization of (UK Pound)24,250 (2000) and
(UK Pound)20,613 (1999)....................................................... 72,710 76,347
Franchise costs - net of accumulated amortization of (UK Pound)267 (2000) and
(UK Pound)248 (1999).......................................................... 349 368
--------------------- -----------------
Total assets...................................................................... (UK Pound)669,269 (UK Pound)757,770
==================== =================
Liabilities and shareholder's deficiency
Current liabilities
Accounts payable.............................................................. (UK Pound)789 (UK Pound)18,759
Accounts payable deposit...................................................... 24,712 50,558
Due to affiliates............................................................. 27,860 -
Interest payable.............................................................. 3,380 14,060
Current portion of long-term debt............................................. 2,262 2,730
Other......................................................................... 34,657 28,080
--------------------- -----------------
Total current liabilities.................................................. 93,660 114,187
Long-term debt
Notes payable................................................................. 999,213 882,805
Capital lease obligations..................................................... 697 2,129
Mortgage loan................................................................. 2,143 2,204
--------------------- -----------------
Total long-term debt....................................................... 1,002,053 887,138
Commitments and contingent liabilities
Shareholder's deficiency:
Ordinary shares: 70,000,000 authorized; 59,138,851 issued and outstanding..... 1,478 1,478
Additional paid-in-capital.................................................... 134,466 134,466
Accumulated deficit........................................................... (562,388) (379,499)
--------------------- -----------------
Total shareholder's deficiency............................................. (426,444) (243,555)
--------------------- -----------------
Total liabilities and shareholder's deficiency.................................... (UK Pound)669,269 (UK Pound)757,770
==================== =================
</TABLE>
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date.
See accompanying notes.
2
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
2000 1999 2000 1999
------------------ ----------------- ----------------- -------------
(in (UK Pound)000's)
<S> <C> <C> <C> <C>
Revenue..................................... (UK Pound)110,484 (UK Pound)85,984 (UK Pound)37,567 (UK Pound)30,115
------------------ ----------------- ----------------- -------------
Costs and expenses
Operating................................ 45,038 30,219 20,440 10,713
Selling, general and administrative...... 45,048 31,399 15,827 10,061
Depreciation and amortization............ 56,308 43,815 18,608 16,047
Other expenses (Note 3).................. - 8,893 - -
------------------ ----------------- ----------------- -------------
146,394 114,326 54,875 36,821
------------------ ----------------- ----------------- -------------
Operating loss.............................. (35,910) (28,342) (17,308) (6,706)
Other income (expense)
Interest income.......................... 3,411 8,608 1,010 3,220
Interest expense and amortization of
debt discount and expenses............. (82,030) (73,036) (28,657) (25,082)
Foreign exchange (losses) gains, net..... (68,360) (6,158) (20,530) 28,706
------------------ ----------------- ----------------- -------------
Net (loss) income .......................... (UK Pound)(182,889) (UK Pound)(98,928) (UK Pound)(65,485) (UK Pound)138
================== ================= ================= =============
</TABLE>
See accompanying notes.
3
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S DEFICIENCY
------------------------------------------------------------
(Unaudited)
(in (UK Pound)000's)
<TABLE>
<CAPTION>
Additional Total
Paid-in- Accumulated Shareholder's
Ordinary Shares capital Deficit Deficiency
----------------------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999... 59,138,851 (UK Pound)1,478 (UK Pound)134,466 (UK Pound)(379,499) (UK Pound)(243,555)
Net loss....................... - - - (182,889) (182,889)
----------- --------------- ----------------- ------------------ ------------------
Balance at September 30, 2000.. 59,138,851 (UK Pound)1,478 (UK Pound)134,466 (UK Pound)(562,388) (UK Pound)(426,444)
=========== =============== ================= ================== ==================
</TABLE>
See accompanying notes.
4
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
------------------ ----------------
(in (UK Pound)000's)
<S> <C> <C>
Net cash (used in) provided by operating activities.................... (UK Pound)(14,300) (UK Pound)99,847
------------------ ----------------
Investing activities
Purchase of property and equipment.................................. (58,280) (82,256)
Proceeds from disposition of property and equipment................. 7 37
------------------ ----------------
Net cash used in investing activities...................... (58,273) (82,219)
------------------ ----------------
Financing activities
Principal payments.................................................. (62) (132)
Capital lease payments.............................................. (1,899) (1,908)
------------------ ----------------
Net cash used in financing activities...................... (1,961) (2,040)
------------------ ----------------
(Decrease) increase in cash and cash equivalents....................... (74,534) 15,588
Cash and cash equivalents at beginning of period....................... 124,348 164,738
------------------ ----------------
Cash and cash equivalents at end of period............................. (UK Pound)49,814 (UK Pound)180,326
================== ================
Supplemental disclosure of cash flow information
Cash paid during the period for interest............................ (UK Pound)45,195 (UK Pound)20,073
</TABLE>
See accompanying notes.
5
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Diamond Cable Communications Limited (formerly Diamond Cable Communications
Plc) (the "Company") is a holding company which holds all of the shares of
various companies which operate broadband communications networks for
telephone, cable television and Internet services in the United Kingdom
(the "UK"). The Company holds these shares through an intermediate holding
company, Diamond Holdings Limited (formerly Diamond Holdings Plc) ("Diamond
Holdings").
The accompanying unaudited condensed consolidated financial statements of
the Company and its subsidiaries (the "Group") have been prepared in
accordance with U.S. generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the nine
and three months ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2000. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement, which establishes
accounting and reporting standards for derivatives and hedging activities,
is required to be adopted by the Group effective January 1, 2001. Upon the
adoption of SFAS No. 133, all derivative instruments are required to be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. The Company does not anticipate
that the adoption of SFAS No. 133 will have a significant effect on its
financial position or results of operations.
2. Comprehensive (loss) income
Comprehensive (loss) income for the nine months ended September 30, 2000
and 1999 was (UK Pound)(182,889,000) and (UK Pound)(97,561,000),
respectively. Comprehensive (loss) income for the three months ended
September 30, 2000 and 1999 was (UK Pound)(65,485,000), and (UK
Pound)138,000, respectively.
3. NTL Incorporated Acquisition
On March 8, 1999, the share exchange was completed whereby all of the
holders of the Company's ordinary and deferred shares exchanged their
shares for newly issued common stock of NTL Incorporated ("NTL"). Other
expenses of (UK Pound)8.9 million in 1999 consist of costs incurred in
connection with the Share Exchange Agreement, including fees paid to
Goldman, Sachs & Co. and Columbia Management for their role as joint
financial advisors to the Company in examining potential business
opportunities and other strategic alternatives leading up to the share
exchange.
4. Joint Purchasing Alliance Agreement
The Company and NTL entered into a Joint Purchasing Alliance Agreement (the
"Alliance Agreement") on March 5, 1999, pursuant to which the Company acts
as purchasing agent on behalf of a number of subsidiaries of NTL. Under the
terms of the Alliance Agreement, on March 8, 1999, the Company received a
deposit of (UK Pound)137.0 million from various subsidiaries of NTL. Funds
held by the Company under the Alliance Agreement are recorded on the
balance sheet as Cash and Cash Equivalents and Accounts Payable Deposit.
6
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
5. Property and Equipment
Property and equipment consists of (in (UK Pound)000's):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
----------------- -----------------
(Unaudited)
<S> <C> <C>
Operating equipment......................... (UK Pound)666,100 (UK Pound)624,013
Other equipment............................. 25,159 25,103
Construction in progress.................... 13,646 11,153
----------------- -----------------
704,905 660,269
Accumulated depreciation.................... (194,715) (142,213)
----------------- -----------------
(UK Pound)510,190 (UK Pound)518,056
================= =================
</TABLE>
6. Notes Payable
Notes payable consist of (in (UK Pound)000's):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
----------------- -----------------
(Unaudited)
<S> <C> <C>
13 1/4% Senior Discount Notes............... (UK Pound)192,805 (UK Pound)176,533
11 3/4% Senior Discount Notes............... 350,764 294,724
10 3/4% Senior Discount Notes............... 246,322 208,498
10% Senior Sterling Notes................... 135,000 135,000
9 1/8% Senior Notes......................... 74,322 68,050
----------------- -----------------
(UK Pound)999,213 (UK Pound)882,805
================= =================
</TABLE>
7. Related Party Transactions
Since the acquisition of the Company by NTL in March 1999, a subsidiary of
NTL has been providing management, financial, legal and technical services
to the Group. Beginning in the fourth quarter of 1999, this subsidiary
began charging the Group for these services using an allocation formula
based on customers. The Group was charged (UK Pound)19.1 million and (UK
Pound)11.6 million for the nine and three months ended September 30, 2000,
which is included in selling, general and administrative expenses and in
the due to affiliates balance. It is not practicable to determine the
amount of these expenses that would have been incurred had the Group
operated as an unaffiliated entity. In the opinion of management of the
Group, the allocation method is reasonable.
7
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)
(Unaudited)
8. Summarized Financial Information about Diamond Holdings Limited
On February 6, 1998, Diamond Holdings, a subsidiary of the Company, issued
(UK Pound)135.0 million principal amount of its 10% Senior Notes due
February 1, 2008 and $110.0 million principal amount of its 9 1/8% Senior
Notes due February 1, 2008 (together, the "1998 Notes"). The 1998 Notes
have been fully and unconditionally guaranteed by the Company as to
principal, interest and other amounts due. The Company has no independent
operations and no subsidiaries other than Diamond Holdings. Diamond
Holdings is restricted in its ability to make funds available to the
Company except for funds to pay interest on the Discount Notes and (UK
Pound)5 million annually. The following table presents summarized
consolidated financial information for Diamond Holdings as of and for the
nine months ended September 30, 2000. This summarized financial information
is being provided pursuant to Article 3-10(c) of Regulation S-X.
<TABLE>
<CAPTION>
Nine months
ended Year ended
September 30, December 31,
2000 1999
------------------ ------------------
(in (UK Pound)000's)
<S> <C> <C>
Summarized Consolidated Results of Operations Information
Revenue................................................ (UK Pound)110,484 (UK Pound)119,476
================== ==================
Operating costs and expenses........................... (UK Pound)146,366 (UK Pound)141,666
================== ==================
Net loss............................................... (UK Pound)(185,611) (UK Pound)(132,380)
================== ==================
September 30, December 31,
2000 1999
------------------ ------------------
(in (UK Pound)000's)
Summarized Consolidated Balance Sheet Information
Current assets......................................... (UK Pound)70,005 (UK Pound)17,878
Fixed and noncurrent assets............................ 588,320 600,361
------------------ ------------------
Total assets........................................... (UK Pound)658,325 (UK Pound)618,239
================== ==================
Current liabilities.................................... (UK Pound)66,848 (UK Pound)54,768
Noncurrent liabilities................................. 1,105,093 891,476
Shareholder's deficiency............................... (513,616) (328,005)
------------------ ------------------
Total liabilities and shareholder's deficiency......... (UK Pound)658,325 (UK Pound)618,239
================== ==================
</TABLE>
8
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Overview
--------
Diamond Cable Communications Limited (formerly Diamond Cable Communications Plc)
(the "Company") is a holding company which holds all of the shares of various
companies which operate broadband communications networks for telephone, cable
television and Internet services in the United Kingdom (the "UK"). The Company
holds these shares through an intermediate holding company, Diamond Holdings
Limited (formerly Diamond Holdings Plc) ("Diamond Holdings"). Except as the
context may otherwise require references to the "Group" refer to the Company and
its subsidiaries.
Liquidity and Capital Resources
-------------------------------
The Company issued senior discount notes in September 1994, December 1995 and
February 1997 (collectively, the "Discount Notes"). In February 1998, Diamond
Holdings issued two new series of notes (the "1998 Notes"). The 1998 Notes are
guaranteed by the Company as to payment of principal, interest and any other
amounts due. In connection with the issuance of the 1998 Notes, the Group
terminated its existing bank facility.
The further development and construction of the Group's broadband communications
network will require substantial capital investment. The Group currently
estimates that the additional capital expenditures and debt service requirements
of the Group, net of cash from operations from October 1, 2000 through September
30, 2001 will be approximately (UK Pound)72.0 million. These capital
expenditures could vary significantly depending on, among other things, the
number of customers actually connected to the network, the availability of
construction resources, the impact of competition from other cable or
telecommunications operators or television delivery platforms, and the pace of
the Group's construction program. The Group expects to use the (UK Pound)25.1
million cash and cash equivalents on hand, which excludes the (UK Pound)24.7
million held on behalf of affiliates pursuant to the Joint Purchasing Alliance
Agreement, and debt or equity from NTL or its subsidiaries to meet its cash
requirements.
To the extent that the amounts required for capital expenditures exceed the
estimates, or the Group's cash flow does not meet expectations, the amount of
cash requirements will increase. There can be no assurance that debt or equity
financing will be available to the Group on acceptable commercial terms or at
all.
Condensed Consolidated Statements of Cash Flows
-----------------------------------------------
Net cash (used in) provided by operating activities amounted to (UK Pound)(14.3)
million and (UK Pound)99.8 million for the nine months ended September 30, 2000
and 1999, respectively. During the nine months ended September 30, 2000, net
cash (used in) operating activities includes cash used for the Joint Purchasing
Alliance Agreement of (UK Pound)(25.8) million compared to cash provided of (UK
Pound)92.3 million in the prior period. The remainder of the change is primarily
due to changes in working capital as a result of the timing of receipts and
disbursements. During the nine months ended September 30, 2000, non-cash foreign
exchange losses were (UK Pound)70.4 million compared to losses of (UK Pound)7.1
million in the prior period, and accretion on the Discount Notes was (UK
Pound)46.0 million compared to (UK Pound)55.9 million in the prior period.
Net cash used in investing activities amounted to (UK Pound)58.3 million and (UK
Pound)82.2 million for the nine months ended September 30, 2000 and 1999,
respectively, primarily for continuing fixed asset purchases.
Net cash used in financing activities amounted to (UK Pound)2.0 million and (UK
Pound)2.0 million for the nine months ended September 30, 2000 and 1999,
respectively, for mortgage principal payments and capital lease payments.
9
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
Results of Operations for the Nine and Three Months Ended September 30, 2000
----------------------------------------------------------------------------
and 1999
--------
Revenue for the nine and three months ended September 30, 2000 and 1999 was (UK
Pound)110.5 million, (UK Pound)86.0 million, (UK Pound)37.6 million and (UK
Pound)30.1 million, respectively, representing increases of (UK Pound)24.5
million and (UK Pound)7.5 million, respectively, from 1999 as compared to the
same periods in 2000. This growth was primarily attributable to increases in the
number of telephone lines and cable television customers, together with the
provision of new services. These trends are expected to continue for the
foreseeable future.
Beginning in the third quarter of 2000, certain costs previously classified as
selling, general and administrative expenses were re-classified as operating
costs in order to be consistent with the other NTL companies. The Company is not
currently able to reclassify prior years in the same manner. In the nine months
ended September 30, 2000, this movement resulted in an increase in operating
costs of (UK Pound)8.0 million and a decrease in selling, general and
administrative expenses of (UK Pound)8.0 million.
Operating costs for the nine and three months ended September 30, 2000 and 1999
were (UK Pound)45.0 million, (UK Pound)30.2 million, (UK Pound)20.4 million, and
(UK Pound)10.7 million, respectively, representing increases of (UK Pound)14.8
million and (UK Pound)9.7 million, respectively, from 1999 as compared to the
same periods in 2000. These increases were predominantly attributable to the
reclassification of costs described above, and the remaining increase is due to
increases in interconnection costs and programming costs as a result of growth
in telephone lines and cable television customers.
Selling, general and administrative expenses for the nine and three months ended
September 30, 2000 and 1999 were (UK Pound)45.0 million, (UK Pound)31.4 million,
(UK Pound)15.8 million, and (UK Pound)10.1 million, respectively, representing
increases of (UK Pound)13.6 million and (UK Pound)5.8 million, respectively,
from 1999 as compared to the same periods in 2000. Beginning in the fourth
quarter of 1999, a subsidiary of NTL began charging the Group for management,
financial, legal and technical services it provides to the Group. These charges
were (UK Pound)19.1 million and (UK Pound)11.6 million in the nine and three
months ended September 30, 2000, respectively. After adjusting for the NTL
charges and for the reclassification of costs described above, selling, general
and administrative expenses as a percentage of total revenue decreased to 30.7%
and 32.7% for the nine and three months ended September 30, 2000, respectively,
from 36.5% and 33.4% in the comparable periods in 1999.
Depreciation and amortization expense for the nine and three months ended
September 30, 2000 and 1999 was (UK Pound)56.3 million, (UK Pound)43.8 million,
(UK Pound)18.6 million, and (UK Pound)16.0 million, respectively, representing
increases of (UK Pound)12.5 million and (UK Pound)2.6 million, respectively,
from 1999 as compared to the same periods in 2000. These increases were
attributable to the increasing cost of the Group's network and the related
additional depreciation.
Other expenses of (UK Pound)8.9 million for the nine months ended September 30,
1999 relate to costs incurred in connection with the Share Exchange Agreement,
including fees paid to financial advisors to the Group.
Interest expense and amortization of debt discount and expenses for the nine and
three months ended September 30, 2000 and 1999 was (UK Pound)82.0 million, (UK
Pound)73.0 million, (UK Pound)28.7 million, and (UK Pound)25.1 million,
respectively, representing increases of (UK Pound)9.0 million and (UK Pound)3.6
million, respectively, from 1999 as compared to the same periods in 2000. For
the nine and three months ended September 30, 2000, interest expense includes
the accretion of the discount on the Discount Notes of (UK Pound)46.0 million
and (UK Pound)16.4 million, interest on the 1994 and 1998 Notes of (UK
Pound)33.5 million and (UK Pound)11.4 million, amortization of debt financing
costs of (UK Pound)2.0 million and (UK Pound)0.7 million and other interest
expense of (UK Pound)500,000 and (UK Pound)200,000, respectively. For the nine
and three months ended September 30, 1999, interest expense includes the
accretion of the discount on the Discount Notes of (UK Pound)55.9 million and
(UK Pound)19.4 million, interest on the 1998 Notes of (UK Pound)14.8 million and
(UK Pound)4.9 million, amortization of debt financing costs of (UK Pound)1.8
million and (UK Pound)600,000 and other interest expense of (UK Pound)500,000
and (UK Pound)200,000, respectively.
A substantial portion of the Group's existing debt obligations is denominated in
U.S. dollars, while the Group's revenues and expenses are generated and stated
in UK pounds sterling. During the nine and three months ended September 30, 2000
and 1999, the Group recorded net foreign exchange (losses) gains of (UK
Pound)(68.4) million, (UK Pound)(6.2) million, (UK Pound)(20.5) million and (UK
Pound)28.7 million, respectively, primarily due to the unrealized losses and
gains on translation of its Discount Notes and 1998 Notes. Changes in foreign
currency exchange rates may affect the Group's ability to satisfy its
obligations, including obligations under outstanding debt instruments, as they
become due.
10
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------
Certain statements contained herein constitute "forward-looking statements" as
that term is defined under the Private Securities Litigation Reform Act of 1995.
When used herein, the words, "believe," "anticipate," "should," "intend,"
"plan," "will," "expects," "estimates," "projects," "positioned," "strategy,"
and similar expressions identify such forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Group, or industry results, to be materially different from those
contemplated, projected, forecasted, estimated or budgeted, whether expressed or
implied, by such forward-looking statements. Such factors include the following:
general economic and business conditions, the Group's ability to continue to
design networks, install facilities, obtain and maintain any required
governmental licenses or approvals and finance construction and development, all
in a timely manner at reasonable costs and on satisfactory terms and conditions,
as well as assumptions about customer acceptance, churn rates, overall market
penetration and competition from providers of alternative services, the impact
of new business opportunities requiring significant up-front investment, and
availability, terms and deployment of capital.
11
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
PART II. OTHER INFORMATION
-------- -----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------- --------------------------------
(a) Exhibits:
27 Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Company during the quarter
ended September 30, 2000.
12
<PAGE>
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
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 LIMITED
-------------------------------------------
Date: November 13, 2000 By: /s/ Leigh C. Wood
---------------------------------
Leigh C. Wood
Chairman of the Board and Director
(Principal Executive Officer)
Date: November 13, 2000 By: /s/ David W. Kelham
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David W. Kelham
Director (Principal Financial and
Accounting Officer)
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