SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JANUARY 10, 2003
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NTL COMMUNICATIONS CORP.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-22616 52-1822078
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
110 East 59th Street, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 906-8440
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. PAGE
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Exhibits
99.1 Certain Projections of NTL Communications Corp.
ITEM 9. REGULATION FD DISCLOSURE.
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NTL Communications Corp. is filing as Exhibit 99.1 to this Form 8-K certain
projections and explanatory materials.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NTL COMMUNICATIONS CORP.
(Registrant)
By: /s/ Bret Richter
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Name: Bret Richter
Title: Vice President,
Corporate Finance and Development
Dated: January 10, 2003
EXHIBIT INDEX
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Exhibit
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99.1 Certain Projections of NTL Communications Corp.
Exhibit 99.1
NEW NTL
((pound)in millions)
Selected Financial Information
For the Quarter Ending
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12/31/02E 3/31/03E 6/30/03E 9/30/03E 12/31/03E
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Revenue (pound)532 (pound)539 (pound)545 (pound)550 (pound)559
EBITDA (pound)169 (pound)155 (pound)165 (pound)174 (pound)186
Capital Expenditures (pound)141 (pound)103 (pound)104 (pound)96 (pound)97
As of
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3/31/03E 6/30/03E 9/30/03E 12/31/03E
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Cash and Cash Equivalents (pound)277 (pound)268 (pound)196 (pound)214
Long Term Debt (pound)4,095 (pound)4,094 (pound)4,093 (pound)4,092
For the Year Ended December 31,
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2002E 2003E 2004E 2005E 2006E 2007E
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Revenue (pound)2,170 (pound)2,193 (pound)2,345 (pound)2,599 (pound)2,897 (pound)3,231
EBITDA (pound)658 (pound)680 (pound)801 (pound)943 (pound)1,113 (pound)1,264
Capital Expenditures (pound)492 (pound)400 (pound)384 (pound)389 (pound)412 (pound)456
As of December 31,
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2002E 2003E 2004E 2005E 2006E 2007E
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Cash and Cash Equivalents (pound)381 (pound)214 (pound)171 (pound)244 (pound)381 (pound)568
Long Term Debt (pound)4,096 (pound)4,092 (pound)4,088 (pound)4,034 (pound)3,888 (pound)3,673
FINANCIAL PROJECTIONS
The attached Financial Projections were prepared on the basis of an
assumed effective date for the joint reorganization plan of NTL Incorporated and
certain subsidiaries (the "Joint Reorganization Plan") of December 31, 2002, in
order to reflect the pro forma effect of the Joint Reorganization Plan on the
Financial Projections. In addition, the Financial Projections are based on
assumptions as of November 2002 related, in part, to the economic, competitive,
and general business conditions prevailing at the time. While as of the date of
this filing such economic, competitive and general business conditions have not
materially changed, any future changes in these conditions may materially impact
the ability of NTL Communications Corp. ("New NTL" or the "Company") to achieve
the Financial Projections. The Financial Projections should be read in
conjunction with the historical consolidated financial information (including
the notes and schedules thereto) and the other information set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001
as well as the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ending March 31, 2002, June 30, 2002 and September 30, 2002.
The Financial Projections include EBITDA, which the Company uses as a
measure of its cash flow from operations. EBITDA is defined as earnings before
interest, taxes, depreciation, amortization, corporate expenses, share of income
(losses) from equity investments, foreign currency transaction gains (losses),
and in 2002 and 2003 recapitalization items, asset impairment charges and
restructuring charges. The Company considers EBITDA to be an important indicator
of its operational strength and performance. EBITDA excludes the impact of costs
and expenses that do not directly effect cash flows, or are not directly related
to the performance of a single reportable segment. EBITDA should be considered
in addition to, not as a substitute for, operating loss, net loss and other
measures of financial performance reported in accordance with generally accepted
accounting principles in the Company's historical consolidated financial
information (including the notes and schedules thereto).
The Financial Projections were not prepared with a view towards
complying with the guidelines for prospective financial statements published by
the American Institute of Certified Public Accountants. The Company's
independent auditors, nor any other independent accountants or financial
advisors, have neither compiled nor examined the accompanying prospective
financial information to determine the reasonableness thereof and, accordingly,
have not expressed an opinion or any other form of assurance with respect
thereto.
The Financial Projections set forth below, in the view of the Company's
management, were prepared on a reasonable basis, reflecting the best available
estimates and judgments, and present, to the best of management's knowledge and
belief, the expected course of action and the expected future financial
performance of the Company. However, this information is not fact and should not
be relied upon as being necessarily indicative of future results, and readers
are cautioned not to place undue reliance on the Financial Projections. These
Financial Projections are being disseminated because they were shared with
certain of the Company's current and proposed lenders during the Chapter 11
process (who have been bound by confidentiality agreements). Accordingly, the
Company does not intend, and disclaims any obligation, to (a) furnish regularly
updated projections, or (b) include such updated information in any documents
that may be required to be filed with the SEC.
In preparing the Financial Projections, the Company considered the
various assumptions underlying the financial projections that were included in
NTL Incorporated's Amended Disclosure Statement dated July 15, 2002 (the
"Previous Financial Projections") and the Company's performance through November
2002. The Company therefore assumed that for the foreseeable future its growth
would be tempered by a measured capital expenditure program and affected by a
lower recurring revenue base at the end of 2002 than was anticipated at the time
of the preparation of the Previous Financial Projections. As such, the attached
financial projections are based on assumptions that result in lower capital
expenditures, lower revenue growth and lower EBITDA levels than the Previous
Financial Projections. In addition, the Financial Projections reflect the terms
of the Company's various debt obligations, which have been finalized since the
preparation of the Previous Financial Projections, as well as the effect of the
assumed December 31, 2002 effective date of Joint Reorganization Plan. In this
regard, the Company believes that the Financial Projections reflect not only the
economic, competitive, and general business conditions prevailing at the time
that they were prepared, but also portray the Company's anticipated financial
flexibility that results from the Financial Projections.
In its quarterly report filed under Form 10-Q for the period ending
September 30, 2002, the Company described the following:
"Ongoing reviews of certain balance sheet accounts have indicated that
there may be provisions that may no longer be necessary in light of the
resolution of the issues and other liabilities that such provisions sought
to address. The process of making this determination is expected to be
completed in the fourth quarter of 2002, and could result in at least an
approximate (pound)30 million increase in EBITDA for the twelve months
ending December 31, 2002.
"The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the use of
estimates, assumptions and judgements that have an impact on the assets,
liabilities, revenue and expense amounts reported, as well as disclosures
about contingencies, risk and financial condition. New NTL's determination
of the amount of labor and overhead to capitalize in connection with the
design and installation of fixed assets, and its recording of provisions
for liabilities, requires the use of such estimates, assumptions and
judgements.
"As a result of capital constraints imposed on its business, New NTL has
been engaged in a process of reducing its expenditure in a variety of
areas, including those related to expanding its customer base, and those
related to service arrangements with third parties that provide capital
improvements as part of their services. These measures, as well as the
significant restructuring of New NTL's business in 2002 in terms of
headcount reduction and departmental reorganization, have caused New NTL to
reassess whether for some 2002 expenditures, assumptions and estimates
relating to the allocation of those costs between capital and operating
expense need to be revised. This study is not sufficiently complete to book
any changes, but is expected to be completed in the fourth quarter of 2002,
and could result in up to an approximate (pound)45 million increase in
expense (and the resulting equivalent reduction in EBITDA and fixed assets)
for the twelve months ending December 31, 2002."
The 2002 figures that comprise a part of the attached Financial
Projections, are presented prior to making any of the anticipated adjustments
that result from the reviews described above. However, the Company believes that
the Financial Projections for the years 2003-2007 reflect the anticipated effect
of the revised assumptions and estimates through an increase in annual operating
expense and an equivalent decrease to capital expenditures.
In its quarterly reports filed under Form 10-Q for the period ending
September 30, 2002 for its subsidiaries NTL (Triangle) LLC ("Triangle") and
Diamond Cable Communications Limited ("Diamond"), the Company described a
relationship through which Diamond and Triangle are charged for certain
infrastructure and management support services from a subsidiary of the Company.
A portion of these charges relate to the use by Diamond and Triangle of
corporate assets owned by a subsidiary of the Company. For the first nine months
of 2002 charges for the use of these assets amounted to approximately (pound)8.9
million in the case of Diamond and (pound)6.9 million in the case of Triangle.
As part of Fresh Start reporting in accordance with AICPA Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code", which the Company will adopt upon the consummation of the Plan and the
emergence from bankruptcy, the carrying value of certain of these assets may be
reduced. As a result, and because these charges are currently based upon the
depreciation expense related to these assets, the potential subsequent reduction
in the related depreciation expense, could result in a reduction to the related
charges attributed to Diamond and Triangle for the use of these assets.
The Financial Projections have been prepared on the basis that the
Company will continue as a going concern. As such, certain assumptions are
inherent in the Financial Projections including the assumption that the Company
can refinance certain of its principal repayment obligations related to its debt
as they come due. Furthermore, it is likely that the provisions of the Company's
proposed exit facility will require that the Company receive an unqualified
opinion on its audited financial statements from its auditors, including as to
its ability to remain a going concern, in its annual report on Form 10-K.
Because this opinion will reflect the view of the Company's auditors, and not
necessarily the opinion of the Company, there can be no assurance that the
Company will receive an unqualified opinion and therefore, remain in compliance
with its indentures.
The Financial Projections provided have been prepared exclusively by
the Company's management. These Financial Projections, while presented with
numerical specificity, are necessarily based on a variety of estimates and
assumptions which, though considered reasonable by management, may not be
realized, and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond the
Company's control. No representations can be made as to the accuracy of these
Financial Projections or to New NTL's ability to achieve the projected results.
Some assumptions inevitably will not materialize. Furthermore, events and
circumstances occurring subsequent to the date on which these Financial
Projections were prepared may be different from those assumed or, alternatively,
may have been unanticipated, and thus the occurrence of these events may affect
financial results in a material and possibly adverse manner. The Financial
Projections, therefore, may not be relied upon as a guaranty or other assurance
of the actual results that will occur.