SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
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 16, 1997 (May 9, 1996)
------------------------------
International CableTel Incorporated
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(Exact name of Registrant as Specified in its 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)
(212) 371-3714
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(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information. The Pro Forma Financial Information
provided under Item 7(b) of the Company's Current Report on Form 8-K-/A-1
dated May 9, 1996 and filed with the Commission on May 30, 1996 (pages F-2
through F-5) are hereby amended and replaced by pages F-2 through F-7 of
this Current Report. See Index to Financial Statements on Page F-1 of
this Current Report.
SIGNATURE
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.
INTERNATIONAL CABLETEL INCORPORATED
By: /s/ RICHARD J. LUBASCH
-------------------------------
Name: Richard J. Lubasch
Title: Senior Vice President
Date: January 16, 1997
INDEX TO FINANCIAL STATEMENTS
INTERNATIONAL CABLETEL INCORPORATED
Pro forma Condensed Consolidated Financial Statements (Unaudited)......... F-2
Pro forma Condensed Consolidated Balance Sheet as of March 31, 1996 (Unau-
dited)................................................................... F-3
Pro forma Condensed Consolidated Statement of Operations for the three
months ended March 31, 1996 (Unaudited).................................. F-4
Pro forma Condensed Consolidated Statement of Operations for the year
ended December 31, 1995 (Unaudited)...................................... F-5
Notes to Pro forma Condensed Consolidated Financial Statements (Unau-
dited)................................................................... F-6
F-1
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In May 1996, a wholly owned subsidiary of International CableTel
Incorporated ("CableTel"), entered into agreements (the "Agreements") to
acquire all of the issued and outstanding stock of NTL Group Limited ("NTL")
in exchange for (i) cash of approximately (Pounds)200,000,000, (ii) an
additional cash payment of (Pounds)17,100,000 in October 1996, and (iii) an
agreement to pay (Pounds)35,000,000, subject to reduction, one year from
closing. A substantial portion of the purchase price was financed (the
"Financing") through (i) a bank facility of (Pounds)140,000,000 and (ii) a
(Pounds)60,000,000 short term bank loan. The acquisition has been accounted for
as a purchase. Accordingly, the excess of the purchase price over the fair value
of the net assets acquired has been recorded as goodwill and is being amortized
over 30 years.
The Company obtained from the former shareholders of NTL representations and
warranties concerning the commercial and financial position of the NTL group and
certain contingent liabilities and other obligations of NTL. The Company has the
right to reduce the payment of (Pounds) 35,000,000 to the former NTL
shareholders in the event that these representations and warranties are found to
be untrue or inaccurate. Any such reduction will be determined in accordance
with, and subject to the limitations set forth in, the Agreements either by
agreement being reached between the parties, or, failing agreement, by the
determination of an appropriately qualified expert or a court of law. As the
aggregate amount of such reductions can not exceed (Pounds) 35,000,000, the
Company has no further rights or recourse against the sellers for claims for
damages for breaches of representations and warranties in excess of (Pounds)
35,000,000. The Company is not currently aware of any reason that the payment
will be reduced. In the event that the payment to the former shareholders of NTL
is reduced because of claims under the representations and warranties, or in the
event that unknown liabilities exceed (Pounds) 35,000,000 or arise after the
(Pounds) 35,000,000 payment is made, such events will be accounted for in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 38,
"Accounting for Pre-acquisition Contingencies of Purchased Enterprises."
The following unaudited pro forma condensed consolidated financial
statements of CableTel give effect to the Agreements and the Financing. In
accordance with FAS No. 52, the balance sheet of NTL has been translated into
United States dollars using the exchange rate on March 31, 1996
((Pounds)1=$1.5254) and the statement of operations has been translated into
dollars using the average exchange rate for the three months ended March 31,
1996 ((Pounds)1=$1.5312) and for the year ended December 31, 1995
((Pounds)1=$1.5782).
The NTL historical financial statements have been adjusted to reflect U.S.
GAAP. The NTL condensed consolidated statement of operations for the year ended
December 31, 1995 has also been adjusted to eliminate the gain on the sale of
its Advanced Products Division of approximately (Pounds) 86,471,000 and the
operating profit of (Pounds) 3,295,000 of that division. Such items have been
excluded because they are not part of the operations of NTL acquired by
CableTel.
The unaudited condensed consolidated pro forma balance sheet as of March 31,
1996 gives effect to the Agreements and Financing as if they had been
consummated on March 31, 1996. The unaudited pro forma condensed consolidated
statement of operations for the three months ended March 31, 1996 and for the
year ended December 31, 1995 gives effect to the Agreements and Financing as if
they had occurred at the beginning of the respective periods.
The pro forma financial statements have been prepared by CableTel's
management. These pro forma financial statements may not be indicative of the
results that actually would have occurred if the transactions had been in
effect on the dates indicated or which may be obtained in the future. The pro
forma financial statements should be read in conjunction with the consolidated
financial statements and notes of CableTel and NTL.
F-2
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 1996
(IN THOUSANDS)
CABLETEL NTL ADJUSTMENTS PRO FORMA
---------- -------- ----------- ----------
ASSETS
Current assets:
Cash and cash equivalents
(Pro forma includes $95,338
of restricted cash)......... $ 661,945 $ 19,068 $305,080 (b) $ 672,018
(314,075)(a)
Trade accounts receivable.... 9,786 17,724 27,510
Prepaid expenses and other
current assets.............. 16,784 11,166 27,950
---------- -------- -------- ----------
Total current assets........... 688,515 47,958 (8,995) 727,478
Fixed assets, net.............. 716,084 101,944 97,078 (a) 915,106
License acquisition costs...... 134,917 -- 134,917
Goodwill....................... -- 7,090 (7,090)(a) 154,736
154,736 (a)
Other assets................... 53,177 12,851 66,028
---------- -------- -------- ----------
Total assets................... $1,592,693 $169,843 $235,729 $1,998,265
========== ======== ======== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Trade accounts payable....... $ 27,063 $ 19,548 $ (3,034)(a) $ 43,577
Accrued expenses............. 68,085 -- 68,085
Current portion of long term
debt........................ 44,351 68,519 99,275 (a)(b) 212,145
Other current liabilities.... 297 4,505 79,473 (a) 84,275
---------- -------- -------- ----------
Total current liabilities...... 139,796 92,572 175,714 408,082
Long term debt................. 1,134,122 -- 137,286 (a)(b) 1,271,408
Other non-current liabilities.. 630 12,635 (12,635)(a) 630
Deferred tax liability......... -- 52,797 (52,797)(a) --
Minority interests............. 25,768 -- 25,768
Total stockholders' equity..... 292,377 11,839 (11,839)(a) 292,377
---------- -------- -------- ----------
Total liabilities and
stockholders' equity.......... $1,592,693 $169,843 $235,729 $1,998,265
========== ======== ======== ==========
See accompanying notes.
F-3
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS)
CABLETEL NTL ADJUSTMENTS PRO FORMA
-------- ------- ----------- ---------
Revenues............................ $ 18,434 $44,134 $ 62,568
Costs and expenses:
Operating expenses................ 12,629 24,949 37,578
Selling, general and administra-
tive............................. 21,798 5,473 27,271
Depreciation and amortization..... 12,190 4,021 $ 2,921(c) 19,132
-------- ------- ------- --------
Total costs and expenses............ 46,617 34,443 2,921 83,981
-------- ------- ------- --------
Income (loss) from operations....... (28,183) 9,691 (2,921) (21,413)
Interest (expense).................. (24,711) (1,130) (5,236)(d) (31,077)
Interest income..................... 7,763 340 -- 8,103
Other............................... (123) -- -- (123)
-------- ------- ------- --------
Income (loss) before provision for
income taxes and minority
interests.......................... (45,254) 8,901 (8,157) (44,510)
Benefit (provision) for income tax-
es................................. (42) (2,672) 2,672 (e) (42)
-------- ------- ------- --------
Income (loss) before minority inter-
ests............................... (45,296) 6,229 (5,485) (44,552)
Minority interests.................. 2,572 -- -- 2,572
-------- ------- ------- --------
Income (loss) from continuing opera-
tions.............................. $(42,724) $ 6,229 $(5,485) $(41,980)
======== ======= ======= ========
Net (loss) per share................ $ (1.41) -- -- $ (1.39)
======== ======= ======= ========
Weighted average number of shares
used in calculation of earnings per
share.............................. 30,211 -- -- 30,211
======== ======= ======= ========
See accompanying notes.
F-4
INTERNATIONAL CABLETEL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
CABLETEL NTL ADJUSTMENTS PRO FORMA
--------- -------- ----------- ---------
Revenues......................... $ 33,741 $172,590 $ 206,331
Costs and expenses:
Operating expenses............. 24,415 104,690 129,105
Selling, general and adminis-
trative....................... 72,629 18,489 91,118
Depreciation and amortization.. 29,823 15,421 $ 12,040(c) 57,284
--------- -------- -------- ---------
Total costs and expenses......... 126,867 138,600 12,040 277,507
--------- -------- -------- ---------
Income (loss) from operations.... (93,126) 33,990 (12,040) (71,176)
Interest (expense)............... (28,379) (3,278) (22,967)(d) (54,624)
Interest income.................. 21,185 1,046 -- 22,231
Other............................ 84 -- -- 84
--------- -------- -------- ---------
Income (loss) before provision
for income taxes and minority
interests....................... (100,236) 31,758 (35,007) (103,485)
Benefit (provision) for income
taxes........................... 2,477 (9,998) 352 (e) (7,169)
--------- -------- -------- ---------
Income (loss) before minority in-
terests......................... (97,759) 21,760 (34,655) (110,654)
Minority interests............... 6,974 -- -- 6,974
--------- -------- -------- ---------
Income (loss) from continuing op-
erations........................ $ (90,785) $ 21,760 $(34,655) $(103,680)
========= ======== ======== =========
Net (loss) per share............. $ (3.01) -- -- $ (3.43)
========= ======== ======== =========
Weighted average number of shares
used in calculation of earnings
per share....................... 30,190 -- -- 30,190
========= ======== ======== =========
See accompanying notes.
F-5
INTERNATIONAL CABLETEL INCORPORATED
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
For purposes of determining the effect of the Agreements and Financing on
CableTel's Condensed Consolidated Statement of Operations for the three months
ended March 31, 1996 and the year ended December 31, 1995 and on the Condensed
Consolidated Balance Sheet as of March 31, 1996, the following pro forma
adjustments have been made:
MARCH 31, 1996
--------------
(IN THOUSANDS)
(a) The excess of the purchase price paid over the
historical book value of the net assets acquired
has been allocated to property and equipment and
goodwill
Cash paid to shareholders and to financial
institutions................................... $310,573
Costs and expenses of acquisition................ 3,502
Deferred consideration payable................... 79,473
--------
393,548
Historical book value of net tangible assets..... 141,734
--------
Excess........................................... $251,814
========
Excess of the fair value over the book value of
property and equipment acquired................ $ 97,078
Goodwill......................................... 154,736
--------
$251,814
========
(b) Proceeds from issuance of (Pounds)60,000,000 of
short term debt.................................... $ 91,524
Proceeds from issuance of (Pounds)140,000,000 of
long term debt of which (Pounds)50,000,000 is due on
December 31, 1996 unless certain events take place
and is included in current portion of long term
debt............................................... 213,556
--------
$305,080
========
F-6
THREE
YEAR ENDED MONTHS ENDED
DECEMBER 31, 1995 MARCH 31, 1996
------------------ ----------------
(IN THOUSANDS) (IN THOUSANDS)
(c) Depreciation of the excess of the fair
value over book value of property and
equipment acquired.................. $(6,320) $(1,533)
Amortization of goodwill over 30
years............................... (5,720) (1,388)
-------- -------
$(12,040) $(2,921)
(d) Interest expense on debt in (b) above
at 9.25% per annum for the short
term debt and 7.91% per annum for
the long term debt (the rates in
effect at the consummation of the
Financing)(1)...... .................. $(26,245) $(6,366)
Less interest on NTL debt retired.... 3,278 1,130
-------- -------
(22,967) (5,236)
(e) Estimated tax benefit from filing for
group relief......................... 352 2,672
-------- -------
$(34,655) $(5,485)
======== =======
The excess of the fair value over the book value of the property and
equipment of approximately (Pounds) 64,000,000 is being depreciated over the
estimated lives of such property (50 years for the tower structures and 10 years
for equipment).
The allocation of the purchase price is subject to revision. The Company
does not expect that there will be any material adjustment to the allocation of
the purchase price.
(1) Each 1/8% per annum change in the interest rate would change interest
expense by $395,000 and $96,000 for the year ended December 31, 1995 and for
the three months ended March 31, 1996, respectively.
F-7