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 0-24792
NTL (TRIANGLE) LLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4086747
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 East 59th Street
New York, NY 10022
(212) 906-8440
- --------------------------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of Registrant's
principal executive offices)
--------------------------
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 twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days.
Yes X No
----- -----
--------------------------
As of September 30, 2000, there were 800,000 shares of the Registrant's common
membership interests outstanding. The Registrant is an indirect, wholly owned
subsidiary of NTL Incorporated and there is no market for the Registrant's
Common Stock. 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.
NTL (TRIANGLE) LLC AND SUBSIDIARIES
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 Equity
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 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
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
PART I. FINANCIAL INFORMATION
- ------- ---------------------
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
September 30, December 31,
2000 1999
----------------- -----------------
(Unaudited) (See Note)
(in (UK Pound)000's, except share data)
Assets
Current assets
Cash and cash equivalents................................................ (UK Pound)12,764 (UK Pound)27,895
Accounts receivable, less allowance for doubtful accounts of
(UK Pound)8,160 (2000) and (UK Pound)9,452 (1999)...................... 12,518 10,170
Due from affiliate....................................................... 78 -
Other current assets..................................................... 11,992 4,240
----------------- -----------------
Total current assets................................................. 37,352 42,305
Property and equipment, net................................................. 438,854 382,078
Intangible assets, net...................................................... 402,330 434,333
Other assets, net........................................................... 25,926 42,553
----------------- -----------------
(UK Pound)904,462 (UK Pound)901,269
================= =================
Liabilities and shareholder's equity
Current liabilities
Accounts payable and accrued expenses.................................... (UK Pound)54,720 (UK Pound)34,431
Deferred revenue......................................................... 11,190 10,572
Due to affiliates........................................................ 22,983 5,905
Current portion of long-term debt........................................ 811 864
----------------- -----------------
Total current liabilities.............................................. 89,704 51,772
Long-term debt, less current portion........................................ 348,129 293,285
Commitments and contingent liabilities
Deferred income taxes....................................................... 7,554 8,237
Minority interest........................................................... 15,160 -
Shareholder's equity:
Common membership interests, (UK Pound).01 par value - authorized and
issued 800,000 shares.................................................. 8 8
Additional capital....................................................... 363,966 363,966
Accumulated other comprehensive (loss)................................... (1,473) (189)
Retained earnings........................................................ 81,414 184,190
----------------- -----------------
Total shareholder's equity............................................. 443,915 547,975
----------------- -----------------
(UK Pound)904,462 (UK Pound)901,269
================= =================
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date.
See accompanying notes.
2
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
2000 1999 2000 1999
------------------ ----------------- ----------------- ----------------
(in (UK Pound)000's)
Revenue............................. (UK Pound)117,291 (UK Pound)80,822 (UK Pound)39,679 (UK Pound)33,342
------------------ ----------------- ----------------- ----------------
Costs and expenses
Operating........................ 45,409 29,513 18,441 13,547
Selling, general and administrative 56,085 30,712 22,495 10,646
Depreciation and amortization.... 62,692 37,255 22,600 19,728
------------------ ----------------- ----------------- ----------------
164,186 97,480 63,536 43,921
------------------ ----------------- ----------------- ----------------
Operating loss...................... (46,895) (16,658) (23,857) (10,579)
Other income (expense)
Interest expense................. (26,271) (23,650) (9,294) (8,114)
Investment income................ 1,234 3,583 436 903
Equity in net loss of affiliate.. - (5,573) - (1,601)
Amalgamation costs............... - (145) - -
Exchange (losses) gains and other.. (31,444) (3,462) (8,978) 10,259
------------------ ----------------- ----------------- ----------------
(56,481) (29,247) (17,836) 1,447
------------------ ----------------- ----------------- ----------------
Loss before income taxes............ (103,376) (45,905) (41,693) (9,132)
Income tax benefit (provision)...... 600 (92) 525 (92)
------------------ ----------------- ----------------- ----------------
Net loss............................ (UK Pound)(102,776) (UK Pound)(45,997) (UK Pound)(41,168) (UK Pound)(9,224)
================== ================= ================= ================
See accompanying notes.
3
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
--------------------------------------------------------
(Unaudited)
(in (UK Pound)000's)
Common
Membership
Interests Additional Comprehensive
Shares Amount Capital Loss
-------- ----------- ----------------- ------------------
Balance at December 31, 1999. 800,000 (UK Pound)8 (UK Pound)363,966
Net loss............... (UK Pound)(102,776)
Currency translation
adjustment........... (1,284)
------------------
Comprehensive loss... (UK Pound)(104,060)
-------- ----------- ----------------- ------------------
Balance at September 30, 2000 800,000 (UK Pound)8 (UK Pound)363,966
======== =========== =================
Accumulated
Other Compre-
hensive Retained
Loss Earnings Total
-------------- ----------------- -----------------
Balance at December 31, 1999. (UK Pound)(189) (UK Pound)184,190 (UK Pound)547,975
Net loss............... (102,776) (102,776)
Currency translation
adjustment........... (1,284) (1,284)
Comprehensive loss...
-------------- ----------------- -----------------
Balance at September 30, 2000 (UK Pound)(1,473) (UK Pound)81,414 (UK Pound)443,915
================ ================= =================
See accompanying notes.
4
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
Nine Months Ended
September 30,
2000 1999
----------------- ----------------
(in (UK Pound)000's)
Net cash provided by operating activities................................ (UK Pound)41,399 (UK Pound)21,605
----------------- ----------------
Investing activities
Cash of subsidiary at acquisition..................................... - 1,536
Purchases of marketable securities.................................... (2,166) -
Proceeds from sales of marketable securities.......................... 2,199 -
Fixed asset deposit with affiliate.................................... - (51,915)
Capital expenditures.................................................. (70,514) (39,099)
Additions to deferred charges......................................... - (54)
------------------ -----------------
Net cash used in investing activities........................... (70,481) (89,532)
------------------ -----------------
Financing activities
Proceeds from investment in subsidiary................................ 15,560 -
Principal payments.................................................... (1,223) (14,711)
------------------ -----------------
Net cash provided by (used in) financing activities............. 14,337 (14,711)
Effect of exchange rate changes on cash......................... (386) (21)
------------------ -----------------
(Decrease) in cash and cash equivalents.................................. (15,131) (82,659)
Cash and cash equivalents, beginning of period........................... 27,895 103,451
------------------ -----------------
Cash and cash equivalents, end of period................................. (UK Pound)12,764 (UK Pound)20,792
================= ================
Supplemental disclosure of cash flow information
Cash paid during the period for interest.............................. (UK Pound)177 (UK Pound)573
Supplemental schedule of noncash financing activities
Capital lease obligations............................................. (UK Pound)- (UK Pound)138
See accompanying notes.
5
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
NTL (Triangle) LLC (formerly NTL (Bermuda) Limited) (the "Company") 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 Company 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
The Company's comprehensive loss for the nine months ended September 30,
2000 and 1999 was (UK Pound)104,060,000 and (UK Pound)45,997,000,
respectively. The Company's comprehensive loss for the three months ended
September 30, 2000 and 1999 was (UK Pound)42,627,000 and (UK
Pound)9,224,000, respectively.
3. Amalgamation with NTL
On October 29, 1998, NTL Incorporated ("NTL"), NTL (Bermuda) Limited, a
wholly owned subsidiary of NTL, and Comcast UK Cable Partners Limited
("Partners") consummated a transaction (the "Amalgamation"), whereby NTL
(Bermuda) Limited merged with Partners.
Pursuant to then existing arrangements between Partners and Telewest
Communications plc ("Telewest"), a co-owner of interests in Cable London
PLC ("Cable London") and Birmingham Cable Corporation Limited ("Birmingham
Cable"), Telewest had certain rights to acquire either or both of Partner's
interests in these systems as a result of the Amalgamation. On August 14,
1998, Partners and NTL entered into an agreement (the "Telewest Agreement")
with Telewest relating to Partner's ownership interests in Birmingham
Cable, Partner's and Telewest's respective ownership interests in Cable
London and certain other related matters. Pursuant to the Telewest
Agreement, in October 1998, Partners sold its 27.5% ownership interest in
Birmingham Cable to Telewest for (UK Pound)125.0 million, plus (UK
Pound)5.0 million for certain subordinated debt and fees. Additionally, in
November 1999, the Company sold its 50% ownership interest in Cable London
to Telewest for (UK Pound)428.0 million in cash.
6
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. Investment in Cable London
Summarized financial information for Cable London which was accounted for
under the equity method is as follows (in (UK Pound)000's):
Nine Months Three Months
Ended Ended
September 30, 1999 September 30, 1999
------------------- --------------------
Results of operations:
Service income............................................... (UK Pound)58,702 (UK Pound)20,128
Operating, selling, general and administrative expenses...... (40,844) (13,579)
Depreciation and amortization................................ (17,844) (5,923)
Operating income............................................. 14 626
Net loss..................................................... (10,854) (3,103)
Company's equity in net loss................................. (5,573) (1,601)
5. Property and Equipment
Property and equipment consist of (in (UK Pound)000's):
September 30, December 31,
2000 1999
----------------- -----------------
(Unaudited)
Operating equipment................................................ (UK Pound)478,585 (UK Pound)436,117
Other equipment.................................................... 54,670 39,523
Construction in progress........................................... 33,714 4,358
----------------- -----------------
566,969 479,998
Accumulated depreciation........................................... (128,115) (97,920)
----------------- -----------------
(UK Pound)438,854 (UK Pound)382,078
================= =================
6. Intangible Assets
Intangible assets consist of (in (UK Pound)000's):
September 30, December 31,
2000 1999
----------------- -----------------
(Unaudited)
Goodwill, net of accumulated amortization of
(UK Pound)29,223 (2000) and (UK Pound)11,928 (1999)............ (UK Pound)316,676 (UK Pound)333,971
License acquisition costs, net of accumulated amortization
of (UK Pound)9,017 (2000) and (UK Pound)3,607 (1999)........... 27,051 32,461
Customer lists, net of accumulated amortization of
(UK Pound)6,654 (2000) and (UK Pound)1,616 (1999).............. 25,668 30,706
Other, net of accumulated amortization of (UK Pound)25,428 (2000)
(UK Pound)21,168 (1999)........................................ 32,935 37,195
----------------- -----------------
(UK Pound)402,330 (UK Pound)434,333
================= =================
7
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(Unaudited)
In July 1999, NTL Communications Corp., a wholly-owned subsidiary of NTL,
acquired Cablelink Limited ("Cablelink") for IR(UK Pound)535.18 million
((UK Pound)405.7 million). NTL Communications Corp. accounted for the
acquisition as a purchase. In December 1999, the Company acquired Cablelink
from NTL Communications Corp. for (UK Pound)423.6 million in cash. The
Company accounted for the acquisition at historical cost in a manner
consistent with a transfer of entities under common control, which is
similar to that used in a "pooling of interests." Accordingly, the net
assets and results of operations of Cablelink have been included in the
consolidated financial statements from July 1999.
The pro forma unaudited consolidated results of operations for the nine
months ended September 30, 1999 assuming the consummation of the above
mentioned transaction as of January 1, 1999 is as follows (in (UK
Pound)000's):
Total revenue................................ (UK Pound)96,995
Net loss..................................... (62,383)
7. Joint Purchasing Alliance Agreement
Other assets includes a deposit of (UK Pound)25.6 million which will be
utilized under a Joint Purchasing Alliance Agreement entered into between
subsidiaries of the Company and Diamond Cable Communications Limited, a
subsidiary of NTL, for combined fixed asset purchases. The Company's
original deposit was (UK Pound)51.9 million in March 1999.
8. Related Party Transactions
Since the Amalgamation, a subsidiary of NTL Communications Corp. has been
providing management, financial, legal and technical services to the
Company. Beginning in the fourth quarter of 1999, this subsidiary began
charging the Company for these services using an allocation formula based
on customers. The Company was charged (UK Pound)16.6 million and (UK
Pound)10.1 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
amounts of these expenses that would have been incurred had the Company
operated as an unaffiliated entity. In the opinion of management of the
Company, the allocation method is reasonable.
9. Contingencies
The Company is involved in legal proceedings and claims which arise in the
ordinary course of its business. In the opinion of management, the amount
of ultimate liability with respect to these actions will not materially
affect the financial position, results of operations or liquidity of the
Company.
8
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Overview
- --------
NTL (Triangle) LLC (formerly NTL (Bermuda) Limited) (the "Company") is a holding
company which holds all of the shares of various companies principally engaged
in the development, construction, management and operation of broadband
communications networks for telephone, cable television and Internet services in
the United Kingdom ("UK") and Ireland. The Company owns the companies that have
franchises for Darlington and Teesside (collectively, "Teesside") and Cambridge
Holding Company Limited ("Cambridge") in the UK, and Cablelink Limited
("Cablelink"), which owns the companies that provide services in Dublin, Galway
and Waterford, Ireland. The Company previously owned a 50% interest in Cable
London PLC ("Cable London") which it sold in November 1999.
Liquidity and Capital Resources
- -------------------------------
In November 1995, the Company issued $517.3 million principal amount at maturity
of 11.20% Senior Discount Debentures due 2007 (the "2007 Discount Debentures").
Interest accretes on the 2007 Discount Debentures at 11.20% per annum compounded
semiannually from November 15, 1995 to November 15, 2000, after which date
interest will be paid in cash on each May 15 and November 15 through November
15, 2007. The 2007 Discount Debentures contain restrictive covenants which limit
the Company's ability to pay dividends.
The Company currently estimates that it will require approximately (UK
Pound)75.6 million from October 1, 2000 through September 30, 2001 for capital
expenditures and debt service, net of cash from operations. Management expects
that the (UK Pound)75.6 million required will be funded through cash on hand,
debt or equity from NTL or its subsidiaries and from the Joint Purchasing
Alliance Agreement deposit of (UK Pound)25.6 million. Subsidiaries of the
Company and Diamond Cable Communications Limited, a subsidiary of NTL, entered
into this agreement in 1999 for joint fixed asset purchases. The Company's
ability to meet its long-term liquidity and capital requirements is contingent
upon Cambridge, Teesside and Cablelink's ability to generate positive operating
cash flow, or, if necessary, to obtain external financing, although there can be
no assurance that any such financing will be obtained on acceptable terms and
conditions.
Condensed Consolidated Statements of Cash Flows
- -----------------------------------------------
Net cash provided by operating activities amounted to (UK Pound)41.4 million and
(UK Pound)21.6 million for the nine months ended September 30, 2000 and 1999,
respectively. The increase in net cash provided by operating activities is
primarily due to the changes in working capital as a result of the timing of
receipts and disbursements.
Net cash used in investing activities amounted to (UK Pound)70.5 million and (UK
Pound)89.5 million for the nine months ended September 30, 2000 and 1999,
respectively. During the nine months ended September 30, 2000, net cash used in
investing activities includes capital expenditures of (UK Pound)70.5 million.
During the nine months ended September 30, 1999, net cash used in investing
activities includes the Joint Purchasing Alliance Agreement deposit of (UK
Pound)51.9 million for combined purchases of fixed assets by NTL affiliates and
capital expenditures of (UK Pound)39.1 million.
Net cash provided by financing activities amounted to (UK Pound)14.3 million for
the nine months ended September 30, 2000 which includes (UK Pound)15.6 million
in cash received by Cablelink from a subsidiary of NTL net of (UK Pound)1.2
million for debt principal payments. Net cash used in financing activities of
(UK Pound)14.7 million for the nine months ended September 30, 1999 includes
debt principal payments of (UK Pound)1.6 million and the repayment at maturity
of the (UK Pound)13.1 million due under the note payable to Comcast U. K.
Holdings, Inc.
9
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
Results of Operations
- ---------------------
In December 1999, Cablelink was acquired by the Company from NTL Communications
Corp. This transaction was accounted for at historical cost in a manner
consistent with a transfer of entities under common control, which is similar to
that used in a "pooling of interests." Accordingly, the Company consolidated the
results of operations of Cablelink from July 1999.
Summarized consolidated financial information for the Company for the nine and
three months ended September 30, 2000 and 1999 is as follows (in thousands, "NM"
denotes percentage is not meaningful):
Nine Months Ended
September 30, Increase/(Decrease)
2000 1999 (UK Pound) %
------------------ ---------------- ---------------- --------
Revenue..................................... (UK Pound)117,291 (UK Pound)80,822 (UK Pound)36,469 45.1%
Operating, selling, general and
administrative expenses................... 101,494 60,225 41,269 68.5
Depreciation and amortization............... 62,692 37,255 25,437 68.3
------------------ ---------------
Operating loss.............................. (46,895) (16,658) 30,237 181.5
Interest expense............................ (26,271) (23,650) 2,621 11.1
Investment income........................... 1,234 3,583 (2,349) (65.6)
Equity in net loss of affiliate............. - (5,573) (5,573) (100.0)
Amalgamation costs.......................... - (145) (145) (100.0)
Exchange losses and other................... (31,444) (3,462) 27,982 808.3
------------------ ---------------
Loss before income taxes.................... (103,376) (45,905) 57,471 125.2
Income tax provision........................ 600 (92) 692 752.2
------------------ ---------------
Net loss.................................... (UK Pound)(102,776) (UK Pound)(45,997) 56,779 123.4%
================== =================
Three Months Ended
September 30, Increase/(Decrease)
2000 1999 (UK Pound) %
------------------ ---------------- ---------------- --------
Revenue..................................... (UK Pound)39,679 (UK Pound)33,342 (UK Pound)6,337 19.0%
Operating, selling, general and
administrative expenses................... 40,936 24,193 16,743 69.2
Depreciation and amortization............... 22,600 19,728 2,872 14.6
------------------ ---------------
Operating loss.............................. (23,857) (10,579) 13,278 125.5
Interest expense............................ (9,294) (8,114) 1,180 14.5
Investment income........................... 436 903 (467) (51.7)
Equity in net loss of affiliate............. - (1,601) (1,601) (100.0)
Exchange (losses) gains and other........... (8,978) 10,259 (19,237) (187.5)
------------------ ---------------
Loss before income taxes.................... (41,693) (9,132) 32,561 356.6
Income tax provision........................ 525 (92) 617 670.7
------------------ ---------------
Net loss.................................... (UK Pound)(41,168) (UK Pound)(9,224) 31,944 346.3%
================== =================
Substantially all of the increases in revenues, operating expenses, selling,
general and administrative expenses and depreciation and amortization expense
for the nine and three months ended September 30, 2000, as compared to the same
periods in 1999, are attributable to the effects of the acquisition of
Cablelink, as well as the continued development of the Company's operations and
increased business activity resulting from the growth in the number of
subscribers in Cambridge and Teesside. These trends in operations and business
activity are expected to continue for the foreseeable future.
10
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
Beginning in the fourth quarter of 1999, a subsidiary of NTL Communications
Corp. began charging the Company for management, financial, legal and technical
services it provides to the Company. These charges were (UK Pound)16.6 million
and (UK Pound)10.1 million for the nine and three months ended September 30,
2000, respectively, which are included in selling, general and administrative
expenses.
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)5.7 million and a decrease in selling, general and
administrative expenses of (UK Pound)5.7 million.
Interest expense for the nine and three months ended September 30, 2000 and 1999
was (UK Pound)26.3 million, (UK Pound)23.7 million, (UK Pound)9.3 million and
(UK Pound)8.1 million, respectively, representing increases of (UK Pound)2.6
million and (UK Pound)1.2 million, respectively, from 1999 as compared to the
same periods in 2000. The increases are primarily attributable to the
compounding of interest on the 2007 Discount Debentures, partially offset by the
payment of the note payable to Comcast U.K. Holdings, Inc. in September 1999.
Investment income for the nine and three months ended September 30, 2000 and
1999 was (UK Pound)1.2 million, (UK Pound)3.6 million, (UK Pound)436,000 and (UK
Pound)903,000, respectively, representing decreases of (UK Pound)2.3 million and
(UK Pound)467,000, respectively, from 1999 as compared to the same periods in
2000. The decreases are primarily attributable to the termination of the loans
to Cable London in November 1999 and to decreases in the average cash balances
available for investment in 2000 as compared to the same periods in 1999.
Equity in net loss of affiliate for the nine and three months ended September
30, 1999 of (UK Pound)5.6 million and (UK Pound)1.6 million, respectively, was
from the Company's 50% ownership interest in Cable London.
The Company incurred costs of (UK Pound)145,000 in the first quarter of 1999
associated with the amalgamation with NTL.
Exchange (losses) gains and other for the nine and three months ended September
30, 2000 and 1999 were (UK Pound)(31.4) million, (UK Pound)(3.5) million, (UK
Pound)(9.0) million and (UK Pound)10.3 million, respectively, representing
increases of (UK Pound)28.0 million and (UK Pound)19.2 million, respectively,
from 1999 as compared to the same periods in 2000. The increases primarily
resulted from the impact of fluctuations in the valuation of the UK Pound
Sterling on the 2007 Discount Debentures, which are denominated in US dollars.
The Company's results of operations will continue to be affected by exchange
rate fluctuations.
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 provisions of 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 Company, 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,
among others: general economic and business conditions, the Company'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
NTL (TRIANGLE) LLC AND SUBSIDIARIES
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
NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2000
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NTL (TRIANGLE) LLC
------------------------------------
(Registrant)
By: NTL Group Limited
Its Sole Managing Member
Date: November 13, 2000 By: /s/ Leigh C. Wood
------------------------------------
Leigh C. Wood
(Chairman of the Board, Director,
and Principal Executive Officer of
NTL Group Ltd., the sole managing
member) on behalf of registrant
Date: November 13, 2000 By: /s/ David W. Kelham
------------------------------------
David W. Kelham
(Principal Accounting and Financial
Officer and Director of NTL Group
Ltd., the sole managing member) on
behalf of registrant
13