Exhibit 99.1
[LOGO - ntl:]
New York, NY, November 3, 2004 (NASDAQ:NTLI)
NTL INCORPORATED'S THIRD QUARTER RESULTS LED BY CONTINUED GROWTH IN NTL:
HOME
o CONSOLIDATED REVENUES UP 5.0 PER CENT OVER Q3 2003 TO (POUND)583.1M
AND NTL: HOME REVENUES UP 8.9 PER CENT TO (POUND)405.0 M
o COMBINED SEGMENT PROFIT OF (POUND)178.5M INCLUDES (POUND)29.4M CHARGE
IN BROADCAST(1)
o NET LOSS DECLINED TO (POUND)95.4M, AN IMPROVEMENT OF 19.4 PER CENT
OVER Q3 2003
o CONTINUED STRONG GROWTH IN NTL: HOME
o HIGHEST QUARTERLY GROSS CUSTOMER ADDS IN 15 QUARTERS OF 187,900
o ADDED 83,600 BROADBAND RGUS
o REACHED 23.1 PER CENT TRIPLE PLAY PENETRATION, UP 3.5 PERCENTAGE
POINTS OVER Q3 2003
o CONFIRMING MARKET LEADERSHIP BY INCREASING BROADBAND SPEEDS TO
1MB, 2MB AND 3MB
o BROADCAST SEPARATION IN FINAL STAGES
o PROPOSALS RECEIVED FROM PROSPECTIVE PURCHASERS IN AN ACTIVE
AUCTION PROCESS
FINANCIAL HIGHLIGHTS
(In millions)
(POUND)
Q3-2004 Q3-2003
-------------- ---------------
REVENUES
Home 405.0 371.8
Business 64.2 69.4
Broadcast 66.6 67.6
Carriers 29.4 28.5
Ireland 17.9 17.9
----------- ----------
TOTAL REVENUES 583.1 555.2
=========== ==========
SEGMENT PROFIT (LOSS)
Home 180.2 176.5
Business 27.7 26.9
Broadcast (1) 2.4 28.2
Carriers 24.4 23.9
Ireland 6.0 7.5
Shared Services - services (2) (58.9) (60.9)
----------- ----------
181.8 202.1
Shared Services - stock based
compensation expense (SBCE)(2) (3.3) (2.0)
----------- ----------
COMBINED SEGMENT PROFIT 178.5 200.1
=========== ==========
COMBINED SEGMENT PROFIT MARGIN % 30.6 36.0
OPERATING INCOME (LOSS) (26.0) (17.7)
NET (LOSS) (95.4) (118.4)
(1) Charge of (pound)29.4 million in Broadcast segment reflects estimated
costs relating to a fixed price contract. For further detail, see
discussion on page 8.
(2) Shared Services consists of two components: services and stock based
compensation expense (which excludes SBCE in connection with performance
related bonus plans amounting to (pound)0.3 million) and totalled
(pound)62.2 million in Q3 04 and (pound)62.9 million in Q3 03. For a
description of the services component and the SBCE component, please see
page 10.
New York, New York (November 3, 2004) - ntl Incorporated (NASDAQ: NTLI)
announced today its third quarter 2004 results. Commenting on the results,
Simon Duffy, Chief Executive Officer of ntl, said:
"During the third quarter, we remained focussed on our four stated
objectives and, despite a more intense competitive environment, were
successful in increasing market penetration, growing total revenues year
over year, expanding underlying margins and enhancing cash flow.
We have seen an improvement in sales productivity during the quarter, with
187,900 gross customers added, the highest number for the past fifteen
quarters. In addition, we increased revenues by 5.0 per cent over Q3 2003
to (pound)583.1 million, and delivered free cash flow of (pound)52.2
million.
ntl: Home delivered strong broadband growth in the third quarter, adding
83,600 RGUs and increasing broadband customer penetration to 38.9 per cent.
To retain our leadership position in broadband, we will be increasing the
speeds of our ntl: Home products in Q1 2005 to 1Mb, 2Mb and 3Mb at existing
prices. This decision reflects our determination to ensure that we will
always have the most competitive range of broadband products in the
marketplace.
Significant progress was made in the call centre consolidation programme
with two centres closed during the quarter and a further three closures
announced. We will close six call centres in total during the fourth
quarter. The call centre consolidation, together with other efficiency
initiatives, will reduce overall headcount to around 13,100 by the end of
the year, underscoring our continuing efforts to improve margins.
The separation of ntl: Broadcast is on track for completion by the end of
this year. In assessing our strategic alternatives, we are soliciting bids
in an active auction process and considerable interest has been expressed
by prospective purchasers. The charge in ntl: Broadcast results from a
single bid for a fixed price contract and does not reflect on the current
performance or value of the business.
I am very pleased to welcome Jacques Kerrest to ntl as our new Chief
Financial Officer. Together we will continue to execute on our key
objectives for the remainder of 2004 and beyond."
For the use of non-GAAP financial measures please reference pages 17-20.
GROUP HIGHLIGHTS
QUARTER ENDED SEPTEMBER 30, 2004
REVENUE
Third quarter consolidated revenues increased by 5.0 per cent to
(pound)583.1 million ($1,060.8 million) from (pound)555.2 million ($894.1
million) for the same period of 2003.
The revenue increase was mainly associated with the net addition of 308,900
broadband RGUs and 102,600 telephony RGUs in ntl: Home, where reported
revenues increased by (pound)33.2 million or 8.9 per cent to (pound)405.0
million ($736.8 million). This increase was partly offset by lower voice
revenues in ntl: Business and lower project revenues in ntl: Broadcast.
COMBINED SEGMENT PROFIT
Third quarter combined segment profit decreased by 10.8 per cent to
(pound)178.5 million ($324.7 million) from (pound)200.1 million ($322.4
million) for the same period of 2003.
The decrease in segment profit includes a (pound)29.4 million ($53.6
million) charge in ntl: Broadcast with respect to a confidential
fixed-price contract.
Increased revenues in ntl: Home were partly offset by additional
investments in sales and marketing and higher bad debt and programming
costs, resulting in increased segment profit of (pound)3.7 million over Q3
2003. The increases in segment profit in ntl: Business and ntl: Carriers
were offset by a decrease in ntl: Ireland, where one-time benefits realised
in Q3 2003 were not repeated, and higher stock based compensation expense.
OPERATING AND NET LOSS
Including the charge of (pound)29.4 million ($53.6 million), the third
quarter 2004 operating loss was (pound)26.0 million ($47.5 million)
compared with an operating loss in Q3 2003 of (pound)17.7 million ($28.5
million).
Third quarter net loss was (pound)95.4 million ($173.5 million), a 19.4 per
cent reduction from the Q3 2003 net loss of (pound)118.4 million ($190.8
million), reflecting decreased interest expense following our successful
rights offering and refinancing.
FIXED ASSET ADDITIONS (ACCRUAL BASIS)
To provide comparable data to the US Cable industry, and in accordance with
NCTA (National Cable & Telecommunications Association) reporting
guidelines*, ntl has allocated fixed asset additions (accrual basis) to the
standard NCTA reporting categories.
Third quarter fixed asset additions were (pound)84.7 million ($154.0
million) of which approximately 53 per cent related to ntl: Home and 26 per
cent related to ntl: Shared Services.
Fixed asset additions increased by (pound)25.8 million ($59.0 million) in
the third quarter 2004 over Q3 2003. Scaleable infrastructure costs rose
due to increased wholesale internet costs, localised broadband capacity
requirements and higher activity in access engineering together with video
on demand product development costs. Upgrade costs increased as a result of
progress in the London network upgrade programme which released 30,000
broadband homes to market in September, with another 100,000 homes to be
upgraded to broadband during Q4 2004.
Commercial and ntl: Broadcast expenditure also increased as new contracts
in Carriers and ntl: Broadcast required upfront capital spend.
The largest component of ntl's NCTA fixed asset additions relates to
customer premise equipment (CPE). Through increased installation
efficiencies and the ongoing reduction of set top box and cable modem
costs, CPE fixed asset additions have remained flat over Q3 2003 despite
increasing gross customer additions by 29,400 in Q3 2004 over Q3 2003.
During the fourth quarter 2004, we expect to spend approximately
(pound)100.0 million ($180.9 million) in fixed asset additions, within
previously stated full year 2004 guidance of between (pound)300.0 million
($542.7 million) to (pound)350.0 million ($633.2 million) in respect of
fixed asset additions.
(figures in millions) unaudited Q3 2004 Q3 2003
-------------------------- ----------------------
(pound) $ (pound) $
-------------------------- ----------------------
UK FIXED ASSET ADDITIONS (ACCRUAL BASIS)
NCTA Fixed Asset Additions (Accrual Basis)
CPE 32.6 59.3 30.7 49.5
Scaleable Infrastructure 17.3 31.6 8.7 14.0
Commercial 7.9 14.3 3.2 5.4
Line Extensions 0 (0.1) 0 0
Upgrade/Rebuild 5.6 10.1 0 0
Support Capital 14.2 26.0 13.5 21.6
-------------------------- ----------------------
Total NCTA Fixed Asset Additions (Accrual
Basis) 77.6 141.2 56.1 90.5
Non NCTA Fixed Asset Additions (Accrual Basis)
Broadcast/Other 4.6 8.2 0.3 0.5
---------------------------------------------------
TOTAL UK FIXED ASSET ADDITIONS (ACCRUAL BASIS) 82.2 149.4 56.4 91.0
Ireland 2.5 4.6 2.5 4.0
---------------------------------------------------
TOTAL FIXED ASSET ADDITIONS (ACCRUAL BASIS) 84.7 154.0 58.9 95.0
========================== ======================
<FN>
* ntl is not a member of the NCTA and is providing this information solely
for comparative purposes.
</FN>
CASH AND CASH EQUIVALENTS
At September 30, 2004, cash and cash equivalents were (pound)149.1 million
($269.7 million).
SEGMENT REVIEW
NTL: HOME
ntl: Home provides bundled products and services including local and long
distance telephone services, digital and analogue cable television, and a
range of broadband and dial-up internet services, to an addressable market
of 7.9 million households in the UK.
At 187,900, ntl: Home enjoyed its highest number of quarterly gross
customer additions since 2000, ending the third quarter with 3,013,800
customers, a 7.3 per cent increase from Q3 2003. In addition, ntl: Home
added 98,700 RGUs in Q3 2004 ending the quarter with 5,822,000 RGUs, a 9.2
per cent increase from Q3 2003. Triple play penetration increased by 3.5
percentage points over Q2 2003 to 23.1 per cent.
We are undertaking a review of how our existing disconnection and credit
management practices have been applied and complied with. As a result of
this ongoing review, we have identified 23,800 customers (representing
approximately 35,600 RGUs) which we have removed from the customer count at
the end of Q3. We are in the process of disconnecting these customers
during Q4. These customers were not disconnected previously, as they should
have been, due to non-compliance with our policies. These disconnections
have limited revenue impact. We have reduced our revenue by (pound)1.9
million ($3.5 million) in Q3 2004 which takes into account revenue adjusted
for prior quarters. We are continuing to review our practices in order to
ensure more effective compliance with our policies and to more accurately
track disconnects.
In addition, during the fourth quarter ntl: Home will be implementing a
revised and standardized credit policy which will reduce the number of days
an account can be overdue prior to full disconnection. Implementation of
this new policy has led to the reclassification of approximately 49,300
additional customers (representing approximately 81,000 RGUs) as pending
disconnects. We are still seeking payment from these customers and,
depending upon the success of our collection efforts, some or all of them
may be disconnected in Q4.
Revenue increased by 8.9 per cent to (pound)405.0 million ($736.8 million)
in Q3 2004 from (pound)371.8 million ($598.7 million) in Q3 2003 and
average revenue per user (ARPU) increased by (pound)0.13 over Q3 2003 to
(pound)41.56. This was achieved by adding 492,600 RGUs during the year,
over half of which were telephone talk plan customers and family pack
television customers, both of which contribute higher than average revenue
per RGU.
ntl: Home segment profit increased by 2.1 per cent to (pound)180.2 million
($327.8 million) in Q3 2004 from (pound)176.5 million ($284.1 million) in
Q3 2003. The increase in revenues was partly offset by investment in sales
and marketing and an increase in bad debt and programming costs.
Third quarter 2004 monthly churn rose to 1.5 per cent, mainly due to a
higher number of customers moving outside our network area. Of the
additional 28,500 disconnects during the third quarter when compared to the
prior quarter, approximately 19,000 related to customers moving out of ntl:
Home franchise areas during a buoyant UK housing boom.
As the UK's number one broadband provider, ntl: Home intends to maintain
its leadership position by significantly increasing the speed of its
broadband products while holding prices constant: 1Mb at (pound)17.99, 2Mb
at (pound)24.99 and 3Mb at (pound)37.99. The speed increases will be rolled
out to new customers during Q1 2005. Existing customers can also upgrade
from Q1 2005 by paying a (pound)25.00 administration fee.
ntl: Home increased third quarter broadband users by 94,100 of whom 48,100
were taking ntl: Home's 60 day free trial at the end of September. Our
experience to date is that approximately 78 per cent of those on the 60 day
free trial convert to paying customers at the end of the trial period.
Accordingly, we have excluded 22 per cent of the triallists from the RGU
total and included only 83,600 broadband RGUs in Q3 2004. We have also
restated Q2 2004 to include 5,300 (78 per cent of the second quarter's
6,800 60 day free trial customers) as RGUs, thereby ending Q3 2004 with
1,173,500 broadband RGUs and increasing broadband penetration of the
customer base to 38.9 per cent from 30.8 per cent in Q3 2003.
000s Q3 2004 Q2 2004
Opening broadband RGUs 1,094.2 1,028.8
Paying broadband users 46.0 59.9
60 day free trial users 48.1 6.8
94.1 66.7
---------------------------------------
1,188.3 1,095.5
22% of 60 day free trial users (10.5) (1.5)
---------------------------------------
Quarterly movement 83.6 -
Reduction to customer count* (6.2) 0.0
Data cleanse* 1.9 0.2
---------------------------------------
Closing RGU total 1,173.5 1,094.2
=======================================
* See explanations on pages 5 and 7.
ntl: Home increased third quarter on-net telephone customers by 18,500 to
2,592,400 and increased the number of digital television customers by
15,200 to 1,414,700. The overall television base declined by 3,300 to
2,056,100.
The table below reconciles the underlying quarterly RGU movements with the
data cleanse and the RGU count reduction adjustments detailed in notes 2,3
and 5 on page 7:
000s DTV TELEVISION TELEPHONE BROADBAND TOTAL
Q2 2004 closing RGUs 1,408.7 2,070.6 2,593.1 1,094.2 5,757.9
Data cleanse (0.8) (1.0) 0 1.9 0.9
Reduction to RGU count (8.4) (10.2) (19.2) (6.2) (35.6)
------------- -------------- --------------- ------------- -------------
1,399.5 2,059.4 2,573.9 1,089.9 5,723.2
Quarterly movement 15.2 (3.3) 18.5 83.6 98.7
------------- -------------- --------------- ------------- -------------
Q3 2004 closing RGUs 1,414.7 2,056.1 2,592.4 1,173.5 5,822.0
============= ============== =============== ============= =============
Note rounding differences.
ntl: Home - summary customer statistics:
000s Q3-2004 Q2-2004 Q1-2004 Q4-2003 Q3-2003
ON-NET
Opening Customers (1) 2,981.5 2,923.2 2,867.9 2,809.5 2,753.3
Data cleanse (2) 2.7 (2.2) (6.2) 0 0
Adjusted opening customers 2,984.2 2,921.0 2,861.7 2,809.5 2,753.3
Customer additions 187.9 166.5 160.3 153.9 158.5
Customer disconnects (134.5) (106.0) (98.8) (95.5) (102.3)
Net customer movement 53.4 60.5 61.5 58.4 56.2
Reduction to customer count (3) (23.8) 0 0 0 0
Closing Customers (1) 3,013.8 2,981.5 2,923.2 2,867.9 2,809.5
Churn (4) 1.5% 1.2% 1.1% 1.1% 1.2%
Revenue Generating Units (2,3,5) 5,822.0 5,757.9 5,636.1 5,497.8 5,364.1
Television 2,056.1 2,070.6 2,048.9 2,023.6 2,009.7
DTV 1,414.7 1,408.7 1,371.0 1,330.0 1,294.8
Telephone 2,592.4 2,593.1 2,558.4 2,525.0 2,489.8
Broadband 1,173.5 1,094.2 1,028.8 949.2 864.6
60 day free trial 48.1 6.8 0 0 0
RGU/Customer 1.93x 1.93x 1.93x 1.92x 1.91x
Internet dial-up and DTV access (6) 258.8 293.3 321.1 324.3 332.1
ARPU (7) (pound)41.56 (pound)41.38 (pound)41.91 (pound)41.96 (pound)41.43
<FN>
(1) Opening and closing customers include master antenna television, or
MATV customers.
(2) Data cleanse activity, as part of the harmonisation of billing
systems, resulted in an increase of recorded customers by
approximately 2,700 and an increase of RGUs by approximately 900. The
data cleanse reduced DTV RGUs by 800, reduced ATV RGUs by 200 and
increased broadband RGUs by 1,900.
(3) After reviewing how our existing disconnection and credit management
practices have been applied and complied with, we have removed
approximately 23,800 customers, representing approximately 35,600
RGUs, from the customer count; see discussion on page 5. Of the 35,600
RGUs, 19,200 were telephony RGUs, 8,400 were DTV RGUs, 1,800 were ATV
RGUs and 6,200 were broadband RGUs.
(4) Monthly customer churn is calculated by taking the total disconnects
during the month and dividing them by the average number of customers
during the month. Average monthly churn during a quarter is the
average of the three monthly churn calculations within the quarter.
The 23,800 customers removed from the customer count (see footnote 3)
will be disconnected in Q4 and are not included in the Q3 monthly
churn.
(5) Telephone, television and broadband internet subscribers directly
connected to our network count as one RGU each. Accordingly, a
subscriber who receives both telephone and television service counts
as two RGUs. RGUs may include subscribers receiving some services at a
reduced rate in connection with incentive offers. 78 per cent of the
60 day free trial broadband customers are included in the RGU numbers.
NCTA reporting guidelines for the US Cable industry do not recognise
dial-up internet customers as RGUs, although they are revenue
generating for ntl.
(6) Dial-up internet subscribers exclude metered customers who have not
used the service for 30 days or more.
(7) Average Revenue Per User is calculated on a monthly basis by dividing
total revenues generated from the provision of telephone, cable
television and internet services to customers who are directly
connected to our network in that month, exclusive of VAT, by the
average number of customers in that month. Quarterly ARPU is an
average of the three months in that quarter. In calculating ARPU, the
23,800 customers removed from the customer count (see footnote 3) and
the (pound)1.9 million of revenue relating thereto have been added
back to customer numbers and revenues.
</FN>
NTL: BUSINESS
ntl: Business provides a range of voice, data and internet products and
services to private and public sector organisations.
ntl: Business revenues decreased by 7.5 per cent to (pound)64.2 million
($116.9 million) in Q3 2004 from (pound)69.4 million ($111.8 million) in Q3
2003. The decrease in revenue was primarily due to a reduction in voice
revenues in an increasingly competitive market, which was compounded by
seasonally low voice usage and project revenues. The decline in voice
revenues was partly offset by the continued growth in data revenues.
Despite the intense price pressure in the market, ntl: Business segment
profit increased by 3.0 per cent to (pound)27.7 million ($50.5 million) in
Q3 2004 from (pound)26.9 million ($43.3 million) in Q3 2003, reflecting a
greater proportion of higher margin data revenues as well as continued
tighter control of costs.
NTL: BROADCAST
ntl: Broadcast provides digital and analogue television and radio broadcast
transmission services, network management, tower site rental and satellite
and media services as well as communications support to public safety
organisations in the UK.
ntl: Broadcast revenues decreased by 1.5 per cent to (pound)66.6 million
($121.1 million) in Q3 2004 from (pound)67.6 million ($108.8 million) in Q3
2003, primarily reflecting the non-recurrence of project revenues in Q3
2003 in our public safety business.
Following a (pound)29.4 million ($53.6 million) charge under a confidential
fixed price contract, ntl: Broadcast segment profit decreased by 91.5 per
cent to (pound)2.4 million ($4.2 million) in Q3 2004 from (pound)28.2
million ($45.4 million) in Q3 2003. We are presently discussing with the
customer revisions to the contract. Based upon a review of our outstanding
obligations under this contract, we estimate that our costs to complete the
contract with these revisions will exceed our revenues from the project by
the amount of the charge. Since this figure is an estimate, there can be no
assurance that we will not incur additional costs above the estimate or
that the costs will in fact be as high as the estimate. If any additional
costs were to be incurred, additional charges may have to be taken at the
time these costs have been identified.
We have reviewed the events leading up to this charge and have concluded
that they are principally due to a material underestimation by us of the
costs of the project, a lack of adequate project management resources and
significant reliance upon a subcontractor. We have strengthened our
procedures governing the costing, pricing and management of projects to
ensure a more balanced risk:reward structure in the terms and conditions of
new contracts we enter into. We also have placed limitations on our
reliance upon sub-contractors to fulfil our obligations under material
contracts.
The terms of our credit and bond agreements include the ability to separate
our Broadcast business. We have taken steps to effect the separation, which
is now in its final stages. As part of our strategic review we are
soliciting bids in an active auction process and considerable interest has
been expressed by prospective purchasers.
NTL: CARRIERS
ntl: Carriers provides a range of wholesale telecommunications services
supporting voice, data and mobile operators. Products include network
design and build, voice transit and termination, managed infrastructure
services such as fibre and co-location and retail products such as leased
lines.
Including a (pound)2.1 million ($3.8 million) settlement from Energis for
early termination of their contract, ntl: Carriers revenues increased by
3.2 per cent to (pound)29.4 million ($53.5 million) in Q3 2004 from
(pound)28.5 million ($45.9 million) in Q3 2003.
Owing to the Energis settlement, which more than offset the impact on
underlying revenue and profits of increased price competition, ntl:
Carriers segment profit increased by 2.1 per cent to (pound)24.4 million
($44.5 million) in Q3 2004 from (pound)23.9 million ($38.5 million) in Q3
2003.
During the third quarter ntl; Carriers launched its 'wires only' DSL
service, initially on a bespoke basis for large-scale deployment to a
single wholesale customer. The full launch of the standard DSL product will
take place in early 2005.
NTL: IRELAND
ntl: Ireland offers digital and analogue television to homes in its network
areas of Dublin, Waterford and Galway. It also offers broadband in parts of
Dublin. In addition, ntl: Ireland also offers a full range of business
telecommunication services including voice, data and internet products.
ntl: Ireland revenues were unchanged at (pound)17.9 million ($32.5 million)
in Q3 2004 when compared to Q3 2003 ($28.9 million). Underlying Euro
revenues increased by 3.5 per cent due to the January 1, 2004 price
increase and additional growth in digital television subscribers.
ntl: Ireland segment profit decreased by 20.0 per cent to (pound)6.0
million ($10.9 million) in Q3 2004 from (pound)7.5 million ($12.2 million)
in Q3 2003. Local currency segment profit decreased by 17.6 per cent,
reflecting the absence of the benefit in Q3 2003 of the renegotiation of
major supplier contracts.
In Q3 2004, residential customer numbers increased by 2,500 to reach
approximately 343,600 (including MMDS customers). This encouraging
performance was reinforced by growth in digital television customers of
6,600 to approximately 88,800. Monthly customer churn remained in line with
our expectations at 0.8 per cent in Q3 2004.
During Q3 2004, ntl: Ireland commenced an investment programme to enable
its network to deliver broadband services to consumers. Homes marketable
for broadband increased by 38,500 to reach approximately 66,500. Broadband
customer numbers grew to approximately 5,400 at the end of Q3 2004 reaching
a penetration level of 8.1 per cent.
In October, ntl: Ireland ceased its domestic direct telephone service,
which had a customer base of 2,200, after identifying a potential safety
risk. This decision did not affect any other service provided by ntl:
Ireland.
SHARED SERVICES
Shared Services predominantly support our UK operations, with ntl: Ireland
being largely self-sufficient. Shared Services consists of two components:
services and stock based compensation expense (SBCE). The services
component is further divided into networks, central support and IT. The
SBCE component represents all SBCE for the group with the exception of that
in connection with performance related bonus plans which is charged to the
individual divisions (including Shared Services).
In Q3 2004, Shared Services totalled (pound)62.2 million ($113.2 million),
comprising (pound)58.9 million ($107.1 million) of services and (pound)3.3
million ($6.1 million) of SBCE. In Q3 2003, Shared Services totalled
(pound)62.9 million ($101.1 million) comprising (pound)60.9 million ($97.9
million) of services and (pound)2.0 million ($3.2 million) of SBCE.
The majority of the networks portion of Shared Services cost relates to the
day-to-day running of the network, with the remainder comprising data and
voice capacity management and, to a lesser degree, architecture and
standards.
The central support and IT portion of Shared Services comprises a range of
functions including group site services, finance, human resources, supply
chain, legal affairs, risk assurance, communications, IT and US corporate
costs.
The services component has decreased to 10.1 per cent of revenues in Q3
2004 compared with 11.0 per cent of revenues in Q3 2003.
ntl continues to recognise the provisions of FASB Statement No.123,
Accounting for Stock-Based Compensation, which has been and will be applied
to all employee stock awards granted, modified, or settled after January 1,
2003. The SBCE component of Shared Services increased in Q3 2004 over Q3
2003 following the approval of the stock awards plan at our annual meeting
of shareholders in May 2004.
OTHER MATTERS
HARMONY
A significant step was taken in the Harmony programme during the third
quarter with the implementation of release 4.5. Almost 980,000 customer
accounts were migrated and 1.4 million premises added to the Harmony
system. Over 3.5 million customer accounts have now been migrated since the
beginning of the programme with seven main billing systems reduced to
three.
SENIOR MANAGEMENT APPOINTMENT
ntl has appointed Jacques Kerrest as its Chief Financial Officer. As CFO,
Jacques is responsible for all of ntl's financial activities including cash
and credit management, capital budgeting, financial planning and analysis,
corporate finance, tax, financial reporting, SEC and regulatory filings,
accounting systems and controls, internal audit, bank relationships,
financing and investor relations.
Jacques has over 30 years' experience of financial management in Europe and
North America. Most recently Jacques was Managing Director and Chief
Financial Officer of Equant, a leading provider of global IP and data
services for businesses.
ACQUISITION OF VIRGIN.NET
On September 28, ntl announced that it has agreed to acquire Virgin Media
Group's remaining interests in Virgin.Net Ltd., together with all the
remaining minority interests held by existing and former management. These
acquisitions will take ntl's ownership of Virgin.Net, the joint venture
formed by ntl and Virgin in 1996, to 100 per cent. We have received the
required regulatory clearance from the Irish Competition Authority, and
expect to close the transaction in November.
Virgin.net, is currently the UK's 5th largest Internet Service Provider
(ISP) serving 590,000 customers, of whom around 54,000 take broadband.
Virgin.Net subscriber figures and financials are not consolidated in ntl's
third quarter results.
REVENUE SUMMARY (IN (POUND) MILLIONS) (UNAUDITED)
- -------------------------------------------------------------------------------------------------------
Q3- 2004 Q2 -2004 Q1-2004 Q4-2003 Q3-2003
- -------------------------------------------------------------------------------------------------------
HOME
On-Net (pound) 373.4 (pound) 366.3 (pound) 363.2 (pound) 358.1 (pound) 345.5
Wholesale & Off-Net 31.6 31.5 35.2 32.6 26.3
--------------- --------------- --------------- --------------- ---------------
Total 405.0 397.8 398.4 390.7 371.8
BUSINESS 64.2 66.8 69.2 66.5 69.4
BROADCAST 66.6 72.6 71.4 71.9 67.6
CARRIERS 29.4 29.3 28.5 28.9 28.5
IRELAND 17.9 17.9 17.5 18.7 17.9
TOTAL REVENUES (pound) 583.1 (pound) 584.4 (pound) 585.0 (pound) 576.7 (pound) 555.2
================================================================================
SEGMENT PROFIT (LOSS) SUMMARY (IN (POUND) MILLIONS) (UNAUDITED)
- -------------------------------------------------------------------------------------------------------
Q3-2004 Q2-2004 Q1-2004 Q4-2003 Q3-2003
- -------------------------------------------------------------------------------------------------------
HOME
On-Net (pound) 172.8 (pound) 169.2 (pound) 168.2 (pound) 171.5 (pound) 164.1
Wholesale & Off-Net 7.4 7.0 8.5 10.6 12.4
--------------- --------------- --------------- --------------- ---------------
Total 180.2 176.2 176.7 182.1 176.5
BUSINESS 27.7 26.5 26.2 32.6 26.9
BROADCAST* 2.4 33.6 29.9 32.2 28.2
CARRIERS 24.4 23.4 22.9 23.1 23.9
IRELAND 6.0 6.1 6.1 7.4 7.5
SHARED SERVICES**
Services component:
Networks (16.1) (14.1) (16.2) (13.6) (14.0)
Central Support/IT (42.8) (44.4) (48.8) (55.8) (46.9)
--------------- --------------- --------------- --------------- ---------------
Total (58.9) (58.5) (65.0) (69.4) (60.9)
Stock based (3.3) (4.9) (1.9) (3.4) (2.0)
compensation expense
component***
COMBINED SEGMENT
PROFIT (pound) 178.5 (pound) 202.4 (pound) 194.9 (pound) 204.6 (pound) 200.1
================================================================================
<FN>
*In Q3 2004 ntl: Broadcast segment profit includes a charge of (pound)29.4
million with respect to a confidential fixed price contract.
**Shared Services consists of two components: services and stock based
compensation expense.
***Stock based compensation expense component of Shared Services includes
stock options and restricted stock but excludes SBCE in connection with
performance related bonus plans amounting to (pound)0.3 million. Prior
periods have been adjusted to remove this component and show it separately.
</FN>
The reporting currency for the company is the U.S. dollar, however, the
functional currencies of our subsidiaries are the British Pound Sterling
and the Euro. Unless otherwise disclosed, all amounts in U.S. dollars as of
September 30, 2004 are based on an exchange rate of $1.8090 to (pound)1,
all amounts disclosed for the nine months ended September 30, 2004 are
based on an average exchange rate of $1.8216 to (pound)1 and all amounts
disclosed for the nine months ended September 30, 2003 are based on an
average exchange rate of $1.6107 to (pound)1. All amounts in U.S. dollars
as of December 31, 2003 are based on an exchange rate of $1.7842 to
(pound)1. All rates are based on the noon buying rate in the City of New
York for cable transfers as certified for customs purposes by the Federal
Reserve Bank of New York. U.S. dollar amounts for the three months ended
September 30, 2003 and 2004 are determined by subtracting the U.S. dollar
converted financial result for the six months ended June 30, 2003 and 2004
from the U.S. dollar converted financial result for the nine months ended
September 30, 2003 and 2004 respectively. The variation between the 2003
and 2004 exchange rates has impacted the dollar comparisons significantly.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
SEPTEMBER 30,
2004 2003
------------------------------
REVENUE $1,060.8 $894.1
COSTS AND EXPENSES
Operating costs (exclusive of (493.5) (359.4)
depreciation shown separately below)
Selling, general and administrative (242.6) (212.3)
expenses
Other charges (11.5) (4.2)
Depreciation (304.1) (296.5)
Amortisation (56.6) (50.2)
------------ ------------
Total costs and expenses (1,108.3) (922.6)
------------ ------------
OPERATING INCOME (LOSS) (47.5) (28.5)
OTHER INCOME (EXPENSE)
Interest income and other, net 2.4 5.2
Interest expense (111.1) (188.9)
Loss on extinguishment of debt - -
Share of income (loss) from equity 0.9 -
investments
Foreign currency transaction (losses) (16.5) 3.4
gains
------------ ------------
(LOSS) BEFORE INCOME TAXES (171.8) (208.8)
Income tax (expense) (1.7) 18.0
------------ ------------
NET (LOSS) ($173.5) ($190.8)
============ ============
BASIC AND DILUTED NET (LOSS) PER COMMON SHARE ($1.99) ($3.20)
============ ============
AVERAGE NUMBER OF SHARES OUTSTANDING 87.4 59.6
============ ============
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
SEPTEMBER 30,
2004 2003
------------------------------
REVENUE $3,192.4 $2,662.5
COSTS AND EXPENSES
Operating costs (exclusive of (1,417.7) (1,157.2)
depreciation shown separately
below)
Selling, general and administrative (725.8) (653.1)
expenses
Other charges (39.3) (28.0)
Depreciation (895.9) (871.6)
Amortisation (169.9) (150.4)
------------ ------------
Total costs and expenses (3,248.6) (2,860.3)
------------ ------------
OPERATING INCOME (LOSS) (56.2) (197.8)
OTHER INCOME (EXPENSE)
Interest income and other, net 11.9 11.1
Interest expense (376.3) (552.3)
Loss on extinguishment of debt (290.1) -
Share of income (loss) from equity 3.1 (1.5)
investments
Foreign currency transaction (losses) (28.9) 21.0
gains
------------ ------------
(LOSS) BEFORE INCOME TAXES (736.5) (719.5)
Income tax (expense) (5.8) (10.8)
------------ ------------
NET (LOSS) ($742.3) ($730.3)
============ ============
BASIC AND DILUTED NET (LOSS) PER COMMON ($8.52) ($12.27)
SHARE
============ ============
AVERAGE NUMBER OF SHARES OUTSTANDING 87.1 59.5
============ ============
CONDENSED CONSOLIDATED BALANCE SHEET
(IN MILLIONS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, DECEMBER 31,
2004 2003
------------- -------------
(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents $269.7 $795.9
Accounts receivable - trade, less allowance for 453.9 405.3
doubtful accounts of $76.6 (2004) and $28.8 (2003)
Prepaid expenses 113.7 85.2
Other current assets 43.5 55.8
------------- -------------
Total current assets 880.8 1,342.2
Fixed assets, net 7,497.0 7,880.5
Reorganisation value in excess of amounts allocable to 543.9 539.1
identifiable assets
Customer lists, net of accumulated amortisation of $393.8
(2004) and $221.9 (2003) 1,026.5 1,178.9
Investments in and loans to affiliates, net 1.0 2.3
Other assets, net of accumulated amortisation of $9.3
(2004) and $70.1 (2003) 229.2 229.8
------------- -------------
TOTAL ASSETS $10,178.4 $11,172.8
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $256.5 $260.0
Accrued expenses 577.1 633.1
Accrued construction costs 34.7 33.6
Interest payable 165.6 194.6
Deferred revenue 274.7 269.9
Other current liabilities 24.7 27.1
Current portion of long-term debt 110.7 2.3
------------- -------------
Total current liabilities 1,444.0 1,420.6
Long-term debt, net of current portion 5,378.7 5,728.4
Deferred revenue and other long term liabilities 334.6 325.7
Deferred income taxes 0.5 0.1
Commitments and contingent liabilities - -
Shareholders' equity
Preferred stock - $.01 par value; authorised 5.0 (2004 and - -
2003) shares; issued and outstanding none
Common stock - $.01 par value; authorised 400.0 (2004 and 0.9 0.9
2003) shares; issued and outstanding 87.6 (2004) and 86.9
(2003) shares
Additional paid-in capital 4,375.6 4,325.0
Unearned stock-based compensation (36.0) (15.0)
Accumulated other comprehensive income 376.6 341.3
Accumulated (deficit) (1,696.5) (954.2)
------------- -------------
Total shareholders' equity 3,020.6 3,698.0
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,178.4 $11,172.8
============= =============
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
(UNAUDITED) (IN MILLIONS)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2004 2003
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $527.7 $267.9
INVESTING ACTIVITIES
Purchase of fixed assets (386.6) (457.5)
Investments in and loans to affiliates 4.5 3.2
Decrease in other assets - 2.1
Purchase of marketable securities (17.1)
Proceeds from sale of assets 5.1 -
Proceeds from sale of marketable securities - 22.3
---------- ----------
Net cash (used in) investing activities (377.0) (447.0)
FINANCING ACTIVITIES
Proceeds from employee stock option exercises 6.4 -
Proceeds from new borrowings, net 5,275.7 -
Principal payments on long-term debt (5,957.3) (7.0)
---------- ----------
Net cash (used in) financing activities (675.2) (7.0)
Effect of exchange rate changes on cash and cash equivalents (1.7) 14.8
---------- ----------
(Decrease) in cash and cash equivalents (526.2) (171.3)
Cash and cash equivalents, beginning of period 795.9 640.7
---------- ----------
Cash and cash equivalents, end of period $269.7 $469.4
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest, exclusive of amounts $359.1 $466.2
capitalised 0.2
Income taxes paid
USE OF NON-US GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL
MEASURES
SEGMENT PROFIT (LOSS)
ntl's primary measure of profit or loss for each of our reportable segments
is segment profit (loss). Our management, including our chief executive
officer who is our chief operating decision maker, considers segment profit
(loss) an important indicator of the operational strength and performance
of our reportable segments. Segment profit (loss) for each segment excludes
the impact of costs and expenses that do not directly affect our cash flows
or do not directly relate to the operating performance of that segment.
These costs and expenses include depreciation, amortisation, interest
expense, loss on extinguishment of debt, foreign currency transaction gains
(losses), share of income (losses) from equity investments, and taxation.
Other charges, including restructuring charges and other losses are also
excluded from segment profit (loss) as management believes they are not
characteristic of our underlying business operations. Furthermore
management believes that some of the components of these charges are not
directly related to the performance of a single reportable segment.
COMBINED SEGMENT PROFIT
Combined segment profit is not a financial measure recognised under US
GAAP. Combined segment profit represents our combined earnings before
interest, taxes, depreciation and amortisation, other charges, share of
income from equity investments, loss on extinguishment of debt and foreign
currency transaction gains (losses), for each of our reportable business
segments. This measure is most directly comparable to the US GAAP financial
measure net income (loss). Some of the significant limitations associated
with the use of combined segment profit as compared to net income (loss)
are that combined segment profit does not consider the amount of required
reinvestment in depreciable fixed assets, interest expense, gains or losses
on foreign currency transactions, income tax expense or benefit and similar
items on our results of operations. Combined segment profit also ignores
the impact on our results of operations of items that management believes
are not characteristic of our underlying business operations. We compensate
for these limitations by using combined segment profit to measure profit or
loss on a combined divisional basis and not to determine our consolidated
results of operations.
We believe combined segment profit is helpful for understanding our
performance and assessing our prospects for the future, and that it
provides useful supplemental information to investors. In particular, this
non-US GAAP financial measure reflects an additional way of viewing aspects
of our operations that, when viewed with our US GAAP results and the
reconciliations to net income (loss), shown below, provide a more complete
understanding of factors and trends affecting our business. Because non-US
GAAP financial measures are not standardised, it may not be possible to
compare combined segment profit (loss) with other companies' non-US GAAP
financial measures that have the same or similar names. The presentation of
this supplemental information is not meant to be considered in isolation or
as a substitute for net income (loss) or other measures of financial
performance reported in accordance with US GAAP.
FIXED ASSET ADDITIONS (ACCRUAL BASIS)
ntl's primary measure of expenditures for fixed assets is Fixed Asset
Additions (Accrual Basis). Fixed Asset Additions (Accrual Basis) is defined
as the purchase of fixed assets as measured on an accrual basis. ntl's
business is underpinned by its significant investment in network
infrastructure and information technology. Management therefore considers
Fixed Asset Additions (Accrual Basis) an important component in evaluating
ntl's liquidity and financial condition since purchases of fixed assets are
a necessary component of ongoing operations. Fixed Asset Additions (Accrual
Basis) (formerly Capital Expenditure) is most directly comparable to the US
GAAP financial measure purchases of fixed assets as reported in the
Statement of Cash Flows. The significant limitations associated with the
use of Fixed Asset Additions (Accrual Basis) as compared to purchases of
fixed assets are (1) Fixed Asset Additions (Accrual Basis) excludes timing
differences from payments of liabilities related to purchases of fixed
assets and (2) Fixed Asset Additions (Accrual Basis) excludes capitalised
interest. Management excludes these amounts from Fixed Asset Additions
(Accrual Basis) because both are more related to the cash management
treasury function than to ntl's management of fixed asset purchases for
long-term operational performance and liquidity. Management compensates for
these limitations by separately measuring and forecasting working capital
and interest payments.
FREE CASH FLOW
ntl's primary measure of cash flow is Free Cash Flow. Free Cash Flow is
defined as net cash provided by (used in) operating activities less
purchase of fixed assets. ntl's business is underpinned by its significant
investment in network infrastructure and information technology. Management
therefore considers it important to measure cash flow after cash used in
the purchase of fixed assets. Free Cash Flow is most directly comparable to
the US GAAP financial measure net cash provided by (used in) operating
activities. The significant limitation associated with Free Cash Flow as
compared to net cash provided by (used in) operating activities is that it
includes cash used in the investing activity, purchase of fixed assets.
Management deducts purchase of fixed assets in arriving at Free Cash Flow
because it considers the amount invested in the purchase of fixed assets to
be an important component in evaluating ntl's liquidity.
The presentation of this supplemental information is not meant to be
considered in isolation or as a substitute for other measures of financial
performance reported in accordance with US GAAP accepted in the United
States. These non-US GAAP financial measures reflect an additional way of
viewing aspects of ntl's operations that, when viewed with ntl's US GAAP
results and the accompanying reconciliations to corresponding US GAAP
financial measures, provide a more complete understanding of factors and
trends affecting ntl's business. Management encourages investors to review
ntl's financial statements and publicly-filed reports in their entirety and
to not rely on any single financial measure.
RECONCILIATION OF REVENUE TO US GAAP REVENUE AND
RECONCILIATION OF COMBINED SEGMENT PROFIT TO US GAAP NET LOSS
(IN MILLIONS)
(UNAUDITED)
3 MONTHS 3 MONTHS 3 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED ENDED
SEPTEMBER JUNE MARCH DECEMBER SEPTEMBER
30, 2004 30, 2004 31, 2004 31, 2003 30, 2003
Revenue (in (pound)'s) (pound) 583.1 (pound) 584.4 (pound) 585.0 (pound) 576.7 (pound) 555.2
Effective exchange rate 1.82 1.81 1.84 1.70 1.61
----------------------------------------------------------------------------------
US GAAP Revenue (in US $'s) $1,060.8 $1,055.5 $1,076.1 $982.7 $894.1
Combined Segment Profit (in (pound)'s) (pound) 178.5 (pound) 202.4 (pound) 194.9 (pound) 204.6 (pound) 200.1
Effective exchange rate 1.82 1.81 1.84 1.70 1.61
----------------------------------------------------------------------------------
Combined Segment Profit (in US $'s) $324.7 $365.7 $358.5 $346.9 $322.4
Reconciling items:
Other Charges (11.5) (26.9) (0.9) (12.7) (4.2)
Depreciation & Amortisation (360.7) (351.5) (353.6) (414.6) (346.7)
----------------------------------------------------------------------------------
Operating income (loss) (47.5) (12.7) 4.0 (80.4) (28.5)
Interest income (expense) and other, net (108.7) (120.8) (134.9) (188.2) (183.7)
Loss on extinguishment of debt - (290.1) - - -
Share of income (losses) from equity
investments 0.9 1.0 1.2 1.0 -
Foreign currency transaction (losses) gains (16.5) (25.3) 12.9 33.0 3.4
Income tax benefit (expense) (1.7) (0.6) (3.5) 10.7 18.0
----------------------------------------------------------------------------------
US GAAP net (loss) in (US $) ($173.5) ($448.5) ($120.3) ($223.9) ($190.8)
==================================================================================
(pound) Equivalent net loss ((pound) 95.4) ((pound) 249.8) ((pound) 65.4) ((pound )130.2) ((pound) 118.4)
(pound) Equivalent operating income (loss) (pound) (26.0) ((pound) 7.0) (pound) 2.2 ((pound) 47.4) ((pound) 17.7)
RECONCILIATION OF
FIXED ASSET ADDITIONS (ACCRUAL BASIS) TO US GAAP PURCHASE OF FIXED ASSETS
(IN MILLIONS)
unaudited
3 MONTHS 3 MONTHS 3 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED ENDED
SEPTEMBER JUNE MARCH DECEMBER SEPTEMBER
30, 2004 30, 2004 31, 2004 31, 2003 30, 2003
Fixed Asset Additions (accrual basis)
(in (pound)'s) (pound) 84.7 (pound) 69.3 (pound) 68.5 (pound) 63.6 (pound) 58.9
Effective exchange rate 1.81 1.81 1.84 1.71 1.61
----------------------------------------------------------------------------------
Fixed Asset Additions (accrual basis) $154.0 $125.4 $125.9 $109.0 $95.0
(in US $'s)
Other items:
Changes in liabilities related to Fixed (1.6) 4.1 (21.2) 7.7 62.8
Asset Additions (accrual basis)
----------------------------------------------------------------------------------
Subtotal (1.6) 4.1 (21.2) 7.7 62.8
----------------------------------------------------------------------------------
Purchase of Fixed Assets (in US $'s) $152.4 $129.5 $104.7 $116.7 $157.8
==================================================================================
RECONCILIATION OF FREE CASHFLOW TO U.S.GAAP NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
(IN MILLIONS)
Unaudited
3 MONTHS ENDED 3 MONTHS ENDED 3 MONTHS ENDED 3 MONTHS ENDED 3 MONTHS ENDED
SEPTEMBER 30, 2004 JUNE 30, 2004 MARCH 31, 2004 DECEMBER 31, 2003 SEPTEMBER 30, 2003
Free cashflow ((pound)m) (pound) 52.2 (pound) 38.0 ((pound) 12.8) 85.3 (78.4)
Effective exchange rate 1.81 1.85 1.84 1.60 1.61
--------------------------------------------------------------------------------------------------
Free cashflow ($m) $94.4 $70.2 $23.5 $136.5 ($126.3)
Add back: Purchase of Fixed
Assets 152.4 129.5 104.7 116.7 157.8
--------------------------------------------------------------------------------------------------
Net Cash provided by (used in)
operating activities ($m) $246.8 $199.7 $81.2 $253.2 $31.5
==================================================================================================
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Various 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 these forward-looking
statements. These forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance or achievements or industry results to be materially different
from those contemplated, projected, forecasted, estimated or budgeted,
whether expressed or implied, by these forward-looking statements. These
factors include those set forth under the caption "Risk Factors" in our
form 10-K that was filed with the SEC on March 11, 2004 and under the
caption "Risks Factors" in a Registration Statement on Form S-8 that was
filed with the SEC on September 9, 2004 such as:
o potential adverse developments with respect to our liquidity or
results of operations;
o our significant debt payments and other contractual commitments;
o our ability to fund and execute our business plan;
o our ability to generate sufficient cash to service our debt;
o the impact of new business opportunities requiring significant
up-front investments;
o our ability to attract and retain customers, increase our overall
market penetration and react to competition from providers of
alternative services;
o our ability to integrate our billing systems;
o our significant management changes since our emergence from Chapter 11
reorganisation;
o our ability to develop and maintain back-up for our critical systems;
o our ability to respond adequately to technological developments;
o our ability to maintain contracts that are critical to our operations;
o our ability to continue to design networks, install facilities, obtain
and maintain any required governmental licenses or approvals, and
finance construction and development, in a timely manner at reasonable
costs and on satisfactory terms and conditions;
o interest rate and currency exchange rate fluctuations;
o the impact of our reorganisation and subsequent organisational
restructuring; and
o our plan to separate ntl: Broadcast from our other operations and the
results of our ongoing auction process.
We assume no obligation to update the forward-looking statements contained
herein to reflect actual results, changes in assumptions or changes in
factors affecting these statements.
FOR MORE INFORMATION CONTACT:
INVESTOR RELATIONS:
US: Patti Leahy, +1 610 667 5554
UK: Virginia Ramsden, +44 (0)20 7967 3338
MEDIA:
Alison Kirkwood, +44 (0)1256 752662 / (0)7788 186154
Buchanan Communications
Richard Oldworth or Jeremy Garcia, +44 (0)20 7466 5000
There will be a conference call to analysts and investors today at 08.30
EDT/ 13.30 UK time. Analysts and investors can dial in to the presentation
by calling + 1 334 420 4951 OR +1 334 323 6201 in the United States or + 44
(0)20 7162 0025 for international access or via a live webcast of the
conference call and presentation on the Company's website,
www.ntl.com/investors.
The replay will be available for one week beginning approximately two hours
after the end of the call until November 10, 2004. The dial-in number is as
follows: US Replay Dial-in Number: + 1 334 323 6222 and the International
Replay Dial-in Number is + 44 (0)20 8288 4459 Conference ID: 437552.
RESIDENTIAL OPERATING STATISTICS AS OF SEPTEMBER 30, 2004
(subscriber totals in 000s) UK IRELAND (1) TOTAL
--------------------------------------------
Homes Marketable (2)
Telco - On Net 7,730.1 23.0 7,753.1
ATV 7,910.0 468.9 8,378.9
DTV 7,411.0 403.3 7,814.3
Broadband 6,854.9 66.5 6,921.4
============== ============= ===============
Customers
Single RGU 889.3 317.9 1,221.2
Dual RGU 1,428.7 7.6 1,444.2
Triple RGU 695.8 0 697.7
-------------- ------------- ---------------
Total 3,013.8 325.5 3,339.3
============== ============= ===============
Telephone Customers 2,592.4 2.2 2,594.6
Television Customers
DTV - Cable 1,414.7 70.7 1,485.4
ATV - Cable & Master Antenna Television 641.4 254.8 896.2
-------------- ------------- ---------------
Total 2,056.1 325.5 2,381.6
============== ============= ===============
Internet
Dial-Up (metered - active last 30 days) (5) 56.7 0 56.7
Dial-Up (unmetered - active last 30 days) (5) 193.9 1.3 195.2
DTV Access 8.2 0 8.2
Broadband 1,136.0 5.4 1,130.8
Broadband 60 day free trial (78% of 48.1) 37.5 37.5
-------------- ------------- ---------------
Total 1,432.3 6.7 1,439.0
============== ============= ===============
RGUs (3)
Telephone 2,592.4 2.2 2,594.6
Television 2,056.1 325.5 2,381.6
Broadband Internet 1,173.5 5.4 1,178.9
-------------- ------------- ---------------
Total 5,822.0 333.1 6,155.1
============== ============= ===============
RGUs/Customer 1.93 1.02 1.84
Penetration (4)
Telephone 33.5% 9.6% 33.5%
Television 26.0% 69.4% 28.4%
Broadband Internet 17.1% 8.1% 17.0%
Customer 38.1% 69.4% 39.9%
Customer/RGU Movement
Opening Customers (at June 30, 2004) 2,981.5 324.2 3,305.7
Data cleanse (5) 2.7 0 2.7
-------------- ------------- ---------------
Adjusted opening Customers 2,984.2 324.2 3,308.4
Gross Adds 187.9 9.4 197.3
Disconnects (134.5) (8.1) (142.6)
Reduction to customer count (6) (23.8) 0 (23.8)
-------------- ------------- ---------------
Closing Customers (at September 30, 2004) 3,013.8 325.5 3,339.3
============== ============= ===============
Quarterly Customer Adds 53.4 1.3 54.7
Quarterly RGU Adds 98.7 2.6 101.3
% Customer Churn (7) 1.5% 0.8% 1.4%
Off-Net Telephony
Telephone 7.3 0.7 8.0
Telephone and Internet 81.7 0.5 82.2
-------------- ------------- ---------------
Total 89.0 1.2 90.2
============== ============= ===============
<FN>
(1) ntl: Ireland also offers MMDS services to 70,000 marketable homes and
had approximately 18,100 digital MMDS customers at September 30, 2004.
In October, ntl: Ireland ceased its domestic direct telephone service
to its 2,200 customers after identifying a potential safety risk.
(2) Homes marketable refer to the number of homes within our service area
that can potentially be served by our network with minimal connection
costs.
(3) Telephone, television and broadband internet subscribers directly
connected to our network count as one RGU each. As such, a subscriber
who receives both telephone and television service counts as two RGUs.
RGUs may include subscribers receiving some services at a reduced rate
in connection with incentive offers.
(4) Penetration rate measures the number of subscribers for our services
divided by the number of marketable homes that our services pass.
(5) Data cleanse activity, as part of the harmonisation of billing
systems, resulted in an increase of recorded customers by
approximately 2,700 and an increase of RGUs by approximately 900. The
data cleanse reduced DTV RGUs by 800, reduced ATV RGUs by 200 and
increased broadband RGUs by 1,900.
(6) After reviewing how our existing disconnection and credit management
practices have been applied and complied with, we have removed
approximately 23,800 customers, representing approximately 35,600
RGUs, from the customer count; see discussion on page 5. Of the 35,600
RGUs, 19,200 were telephony RGUs, 8,400 were DTV RGUs, 1,800 were ATV
RGUs and 6,200 were broadband RGUs.
(7) Monthly customer churn is calculated by taking the total disconnects
during the month and dividing them by the average number of customers
during the month. Average monthly churn during a quarter is the
average of the three monthly churn calculations within the quarter.
The 23,800 customers removed from the customer count (see footnote 6)
will be disconnected in Q4 and are not included in the Q3 monthly
churn.
</FN>