-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RmFcTz+0fy1QSq7OWyn7Il6YuAfth/3KiK5t0Z1NFM3O9l+s1DquS2+OycQFXFjh dpZYw3ZYzvhY2POeIxhtfA== 0000950130-96-001726.txt : 19960517 0000950130-96-001726.hdr.sgml : 19960517 ACCESSION NUMBER: 0000950130-96-001726 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL CABLETEL INC CENTRAL INDEX KEY: 0000906347 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 521822078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22616 FILM NUMBER: 96564624 BUSINESS ADDRESS: STREET 1: 110 E 59TH ST STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 MAIL ADDRESS: STREET 1: 110 EAST 59TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-22616 ------------------------------------------- INTERNATIONAL CABLETEL INCORPORATED ----------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-1822078 --------------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 East 59th Street, New York, New York 10022 ---------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (212) 371-3714 ------------------------------------------------------------------ (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares outstanding of the issuer's common stock as of March 31, 1996 was 30,294,255. INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page - ------------------------------- ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets-- March 31, 1996 and December 31, 1995 2 Condensed Consolidated Statements of Operations-- Three months ended March 31, 1996 and 1995 4 Condensed Consolidated Statement of Shareholders' Equity-- Three months ended March 31, 1996 5 Condensed Consolidated Statements of Cash Flows-- Three months ended March 31, 1996 and 1995 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 11 PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K 22 SIGNATURES 24 - ---------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1996 1995 --------------- --------------- (Unaudited) (See Note) ASSETS CURRENT ASSETS Cash and cash equivalents $ 661,945,000 $ 175,283,000 Accounts receivable-trade, less allowance for doubtful accounts of $1,143,000 (1996) and $767,000 (1995) 9,786,000 7,340,000 VAT receivable 10,268,000 17,464,000 Prepaid expenses and other 6,516,000 5,050,000 -------------- -------------- TOTAL CURRENT ASSETS 688,515,000 205,137,000 CASH HELD IN ESCROW 1,204,000 1,598,000 FIXED ASSETS, net 716,084,000 639,674,000 LICENSE ACQUISITION COSTS, net of accumulated amortization of $25,450,000 (1996) and $22,789,000 (1995) 134,917,000 137,578,000 DEFERRED FINANCING COSTS, net of accumulated amortization of $3,115,000 (1996) and $2,044,000 (1995) 42,002,000 18,510,000 OTHER ASSETS, net of accumulated amortization of $8,321,000 (1996) and $7,493,000 (1995) 9,971,000 8,172,000 -------------- -------------- $1,592,693,000 $1,010,669,000 ============== ==============
2 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS -- Continued
March 31, December 31, 1996 1995 --------------- -------------- (Unaudited) (See Note) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 27,063,000 $ 50,848,000 Accrued expenses and other 44,713,000 37,102,000 Accrued construction costs 23,669,000 14,543,000 Current portion of long-term debt 44,351,000 26,516,000 -------------- -------------- TOTAL CURRENT LIABILITIES 139,796,000 129,009,000 LONG-TERM DEBT 1,134,122,000 513,026,000 REGIONAL DEVELOPMENT GRANT, net 630,000 661,000 COMMITMENTS AND CONTINGENT LIABILITIES MINORITY INTERESTS 25,768,000 28,716,000 SHAREHOLDERS' EQUITY Series preferred stock - $.01 par value; authorized 2,500,000 shares; none outstanding -- -- Common stock - $.01 par value; authorized 50,000,000 shares; issued and outstanding 30,294,000 (1996) and 30,202,000 (1995) shares 303,000 302,000 Additional paid-in capital 464,126,000 462,223,000 Cumulative translation adjustment 213,000 6,273,000 (Deficit) (172,265,000) (129,541,000) -------------- -------------- 292,377,000 339,257,000 -------------- -------------- $1,592,693,000 $1,010,669,000 ============== ==============
Note: The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date. See notes to condensed consolidated financial statements. 3 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31, ----------------------------- 1996 1995 -------------- ------------- Revenues: Cable television revenues $ 8,051,000 $ 1,830,000 Telephone and telecommunications revenues 7,762,000 542,000 Toll revenues 1,309,000 951,000 Microwave transmission revenues from the Joint Venture 1,312,000 1,310,000 ------------ ------------ 18,434,000 4,633,000 Costs and expenses: Operating expenses 12,629,000 3,296,000 Selling, general and administrative expenses 21,798,000 10,514,000 Depreciation and amortization 12,190,000 5,532,000 ------------ ------------ 46,617,000 19,342,000 ------------ ------------ OPERATING LOSS (28,183,000) (14,709,000) Other income (expense): Interest and other income 7,763,000 3,714,000 Interest expense (24,711,000) (4,242,000) Foreign currency transaction gains (losses) (123,000) 196,000 ------------ ------------ LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS (45,254,000) (15,041,000) Income tax benefit (provision) (42,000) 448,000 ------------ ------------ LOSS BEFORE MINORITY INTERESTS (45,296,000) (14,593,000) Minority interests 2,572,000 1,127,000 ------------ ------------ NET LOSS $(42,724,000) $(13,466,000) ============ ============ Net loss per common share $(1.41) $(.59) ============ ============ Weighted average number of common shares used in computation of net loss per share 30,211,000 22,636,000 ============ ============
See notes to condensed consolidated financial statements. 4 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
Common Stock $.01 Par Value Additional Cumulative --------------------- Paid-In Translation Shares Par Capital Adjustment (Deficit) ----------- -------- ------------ ------------ -------------- Balance, December 31, 1995 30,202,000 $302,000 $462,223,000 $ 6,273,000 $(129,541,000) Exercise of stock options 84,000 1,000 211,000 Exercise of warrants 8,000 51,000 Issuance of warrants in connection with consent solicitations 1,641,000 Net loss for the three months ended March 31, 1996 (42,724,000) Currency translation adjustment (6,060,000) ----------- -------- ------------ ----------- ------------- Balance, March 31, 1996 30,294,000 $303,000 $464,126,000 $ 213,000 $(172,265,000) =========== ======== ============ =========== =============
See notes to condensed consolidated financial statements. 5 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, ---------------------------------- 1996 1995 ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,541,000 $ 5,434,000 INVESTING ACTIVITIES Purchase of fixed assets (112,210,000) (83,908,000) Proceeds from sale of fixed assets -- 16,000 Increase in other assets (231,000) (205,000) ------------- ------------ NET CASH (USED IN) INVESTING ACTIVITIES (112,441,000) (84,097,000) FINANCING ACTIVITIES Proceeds from borrowings, net of financing costs 577,484,000 -- Cash held in escrow 367,000 -- Capital contribution from minority partner -- 6,329,000 Proceeds from borrowings from minority partner 18,367,000 -- Proceeds from exercise of stock options and warrants 263,000 6,000 ------------- ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 596,481,000 6,335,000 EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,081,000 4,720,000 ------------- ------------ INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS 486,662,000 (67,608,000) Cash and cash equivalents at beginning of period 175,283,000 294,602,000 ------------- ------------ Cash and cash equivalents at end of period $ 661,945,000 $226,994,000 ============= ============ Supplemental disclosure of cash flow information Cash paid during the period for interest exclusive of amounts capitalized $ 307,000 $ 359,000 Income taxes paid -- 153,000 Supplemental schedule of noncash financing activities Warrants issued in connection with consent solicitations 1,641,000 --
See notes to condensed consolidated financial statements. 6 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE A--BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with 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 three months ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. 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, 1995. Net loss per share is computed based on the weighted average number of common shares outstanding during the periods. Common stock equivalents are excluded from the net loss per share computations because they are antidilutive. NOTE B--ACCOUNTING CHANGE In October 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 defines a fair value based method of accounting for stock-based employee compensation plans (including stock option plans). As permitted by SFAS No. 123, the Company expects to continue to measure compensation costs for its plans as prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees." NOTE C--FIXED ASSETS Fixed assets consists of:
March 31, December 31, 1996 1995 ------------ ------------ (Unaudited) Cable television, telephone and telecommunications equipment $453,580,000 $395,754,000 Microwave equipment 28,978,000 28,265,000 Other equipment 57,974,000 39,717,000 Construction-in-progress 225,736,000 218,044,000 ------------ ------------ 766,268,000 681,780,000 Allowance for depreciation (50,184,000) (42,106,000) ------------ ------------ $716,084,000 $639,674,000 ============ ============
7 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Continued NOTE D--LONG-TERM DEBT Long-term debt consists of:
March 31, December 31, 1996 1995 -------------- -------------- (Unaudited) 10-7/8% Senior Deferred Coupon Notes $ 161,941,000 $157,748,000 12-3/4% Series A Senior Deferred Coupon Notes 168,606,000 163,528,000 11-1/2% Series A Senior Deferred Coupon Notes 611,825,000 -- 7-1/4% Convertible Subordinated Notes 191,750,000 191,750,000 Subsidiary bank loan 1,549,000 1,576,000 Subsidiary notes payable 42,802,000 24,940,000 -------------- ------------ 1,178,473,000 539,542,000 Less current portion 44,351,000 26,516,000 -------------- ------------ $1,134,122,000 $513,026,000 ============== ============
In January 1996, the Company issued $1,050,000,000 aggregate principal amount of 11-1/2% Series A Senior Deferred Coupon Notes due 2006. The 11-1/2% Senior Deferred Coupon Notes were issued at a price to investors of 57.155% of the aggregate principal amount at maturity or $600,127,500. The Company received net proceeds of $582,000,000 after discounts and commissions from the issuance of the 11-1/2% Senior Deferred Coupon Notes. The original issue discount accretes at a rate of 11-1/2%, compounded semiannually, to an aggregate principal amount of $1,050,000,000 by February 1, 2001. Interest will thereafter accrue at 11-1/2% per annum, payable semiannually beginning on August 1, 2001. The 11-1/2% Senior Deferred Coupon Notes may be redeemed at the Company's option, in whole or in part, at any time on or after February 1, 2001 at 105.75% the first year, 102.875% the second year and 100% thereafter, plus accrued and unpaid interest to the date of redemption. The 11-1/2% Senior Deferred Coupon Notes are effectively subordinated to all existing and future indebtedness and other liabilities and commitments of the Company's subsidiaries. The indenture governing the 11-1/2% Senior Deferred Coupon Notes contains restrictions relating to, among other things: (i) incurrence of additional indebtedness and issuance of preferred stock; (ii) dividend and other payment restrictions; and (iii) mergers, consolidations and sales of assets. Pursuant to the terms of the consent solicitations to the holders of the 10-7/8% Senior Deferred Coupon Notes and to the holders of the 12-3/4% Series A Senior Deferred Coupon Notes to gain consent to modify certain indenture provisions, the Company paid an aggregate of $3,592,000 in consent payments and issued warrants to purchase 164,000 shares of common stock at an exercise price of $23.78 per share in lieu of additional consent payments of $1,641,000. The warrants expire in 2006. 8 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Continued NOTE E--SUBSEQUENT EVENT In May 1996, an indirect wholly-owned subsidiary of the Company (the "Purchaser") acquired NTL Group Limited ("NTL"), an English limited liability company, for payments of approximately (Pounds)200 million at closing, (Pounds)35 million, subject to adjustments, on the first anniversary of closing and (Pounds)17.1 million (which corresponds to the tax credit expected by NTL by October 1, 1996) in October 1996. NTL provides television and radio transmission services and a range of other services in the broadcasting and telecommunications industries. To finance the acquisition of NTL, the Purchaser entered into an agreement dated March 28, 1996 with a syndicate of lenders (the "Lenders") pursuant to which the Lenders made available to the Purchaser senior secured loan facilities (the "A Facilities") of a maximum principal amount of (Pounds)165 million comprised of (i) a short term loan facility of (Pounds)50 million (the "Short Term Facility"), (ii) a long term loan facility of (Pounds)90 million (the "Long Term Facility," and, together with the Short Term Facility, the "Term Loan Facilities") and (iii) a revolving credit facility of (Pounds)25 million (the "Revolving Facility"). One of the Lenders also agreed to make available to the Purchaser a secured loan facility of (Pounds)60 million (the "B Facility") to finance the remainder of the payment due at closing and acquisition costs and expenses due at closing. The Term Loan Facilities and the B Facility were used to finance the acquisition of NTL including related acquisition expenses. The Revolving Facility is available until December 31, 1997 for capital expenditure and working capital purposes of NTL's group. At the end of the availability period, any amount outstanding under the Revolving Facility will be converted to term debt and be aggregated with the Long Term Facility. The Short Term Facility is repayable in full on December 31, 1996 unless certain conditions are fulfilled on or prior to that date, in which case the amounts outstanding under the Short Term Facility will automatically be converted into, and shall be deemed to be, amounts outstanding under the Long Term Facility. The Company anticipates that such conditions will be met and that the amounts outstanding under the Short Term Facility will be so converted. All amounts outstanding under the Long Term Facility are scheduled to be repaid in quarterly installments from 1998 to 2002 inclusive. The amount of the installments will be based upon an agreed percentage of the loan and will increase year to year. Final repayment of the Long Term Facility is due on December 31, 2002. Loans under the A Facilities bear interest at an annual rate equal to LIBOR plus a margin that varies from 0.75% per annum to 1.75% per annum, based on certain financial ratios of the Purchaser and certain of its subsidiaries. The A Facilities are secured by guarantees from NTL and each of its subsidiaries and by first ranking fixed and floating charges over all the present and future assets of the Purchaser, NTL and its subsidiaries. The A Facilities do not, therefore, provide for the lenders to have recourse to assets of the Company other than to the assets of the Purchaser and its subsidiaries. The A Facilities contain various financial and other covenants, including covenants with respect to the Purchaser and certain of its subsidiaries relating to minimum total debt to operating cash flow (as defined in the "A Facilities"), 9 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Continued NOTE E--SUBSEQUENT EVENT-Continued fixed charge coverage, net worth and pro-forma debt service ratios. The A Facilities also include restrictions on dividends and distributions by the Purchaser to its shareholders. The B Facility is secured by cash of (pounds) 62,500,000 on deposit with the lender and guarantees from the Company, OCOM Corporation, OCOM Sub I Inc., OCOM Sub III Inc., CableTel (UK) Group, Inc. and CableTel (UK) Limited and by second ranking fixed and floating charges over all the present and future assets of the Purchaser, NTL and its subsidiaries, subject to certain subordination arrangements. The B Facility must be repaid in full by December 31, 1996. Loans under the B Facility bear interest at an annual rate equal to LIBOR plus a margin of 3%, which margin shall be increased by an additional 1.25% on each of the "Applicable Margin Step-Up Dates" falling three, four, five, six and seven months after the advance of any loans under the B Facility. The Purchaser may repay all, but not less than all, of the amount outstanding under the B Facility at any time without penalty. The B Facility contains covenants similar to those of the A Facilities. NOTE F--COMMITMENTS AND CONTINGENT LIABILITIES As of March 31, 1996, the Company was committed to pay approximately $26,900,000 for equipment and services. The Company has licenses issued by the United Kingdom Department of Trade and Industry ("DTI") and the United Kingdom Independent Television Commission ("ITC") for its cable television, telephone and telecommunications business and the Federal Communications Commission ("FCC") for its microwave transmission business. The initial terms of the Company's licenses was 23 years for the DTI licenses, 15 years for the ITC licenses and 10 years for the FCC licenses. The Company's licenses expire in 2008 to 2017 for the DTI licenses, 1999 to 2005 for the ITC licenses and 2001 for the FCC licenses. The DTI requires a fixed annual renewal fee of (Pounds)2,500 ($4,000) per license. The ITC requires an annual license fee ranging from (Pounds)1,300 ($2,000) to (Pounds)7,900 ($12,000) per license based on the number of homes in the licensed area, which is subject to adjustment annually. The FCC requires an annual license fee of $140 per license, which is subject to adjustment annually. The Company's license fees in 1996 were $ 19,000. In addition, the Company was awarded certain newly issued licenses by the ITC in 1995. Pursuant to the terms of the local delivery license ("LDL") for Northern Ireland granted to a wholly-owned subsidiary of the Company, the Company is required to make annual cash payments to the ITC for fifteen years, commencing the earlier of the first full calendar year after the start of operations or May 1997, in the amount of approximately (Pounds)14,400,000 ($21,900,000) (subject to adjustments for inflation). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first ten years and 2% for the last five years of the fifteen year license. Pursuant to the terms of the LDL for Glamorgan and Gwent, Wales granted to one of the Company's joint ventures, the joint venture is required to make annual cash payments to the ITC for fifteen years, commencing in the first full calendar year after the start of operations, in the amount of (Pounds)104,188 ($159,000). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first five years, 2% for the second five years and 4% for the last five years of the fifteen-year license. 10 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The following table illustrates the number of homes passed, the number of homes released to marketing and the total number of customers as of March 31, 1996 and December 31, 1995, for the full-service dual network constructed by the Company since 1993 and, as of March 31, 1996, for the network constructed as cable-only and inherited by the Company through prior acquisitions: Newly Constructed Dual Network and Inherited Cable-Only Network
================================================================================== Newly Constructed Newly Constructed Inherited Cable- Dual Network Dual Network Only Network March 31, 1996 December 31, 1995 March 31, 1996 - ---------------------------------------------------------------------------------- Homes passed 516,000 463,000 263,200 Homes marketed* 249,500 176,200 263,200 Total customers 81,860 57,700 47,500 Dual 62,440 44,630 -- Cable-only 9,750 6,620 47,500 Telephone-only 9,670 6,450 -- Total RGU's** 144,300 102,330 47,500 RGU penetration 58% 58% 18% Cable penetration 29% 29% 18% Telephone penetration 29% 29% -- ==================================================================================
*At March 31, 1996, homes for which the sales process has begun. At December 31, 1995, homes for which the initial sales process was completed. **An RGU (revenue generating unit) is one cable television account or one telephone account; thus, a dual customer counts as two RGU's. 11 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued RESULTS OF OPERATIONS --------------------- Three Months Ended March 31, 1996 and 1995 - ------------------------------------------ Cable television revenues increased to $8,051,000 from $1,830,000 as a result of customer growth that increased the Company's current revenue stream. Telephone and telecommunications revenues increased to $7,762,000 from $542,000 as a result of customer growth that increased the Company's current revenue stream. OCOM's toll revenues increased to $1,309,000 from $951,000 due to the expansion of the long distance business into new markets in the second quarter of 1995, which represents 65% of the 1996 toll revenue. Toll revenue in 1995 includes $331,000 from the CCI/AirTouch Joint Venture's resale of OCOM's long distance service, which revenue is no longer generated due to the conversion of the CCI/AirTouch Joint Venture's business to a new service provider in June and July 1995. Microwave transmission revenues increased to $1,312,000 from $1,310,000 as a result of additional revenue from additional circuits installed in the microwave network offset by reductions in amounts billed to the CCI/AirTouch Joint Venture for circuits in the microwave network. Operating expenses increased to $12,629,000 from $3,296,000 due to the increase in the operating expenses of the cable television, telephone and telecommunications business to $11,683,000 from $2,306,000. The cable television, telephone and telecommunications business operating expenses increased as a result of the increases in programming costs, interconnection costs and costs of operating the network. OCOM's operating expenses decreased due to a decrease in property taxes, offset by costs incurred in new markets where OCOM has provided long distance service since the second quarter of 1995. Selling, general and administrative expenses increased to $21,798,000 from $10,514,000 principally because of the increase in costs of the cable television, telephone and telecommunications business to $21,100,000 from $9,646,000. The cable television, telephone and telecommunications business costs increased as a result of increases in sales and marketing costs and additional personnel and overhead to service the increasing customer base. OCOM's costs decreased as a result of a reduction in marketing costs related to OCOM's entrance into new markets in 1995 offset by increases in billing costs from the additional long distance business in 1996. The 1996 and 1995 cable television, telephone and telecommunications costs include $814,000 of non-cash expense from the amortization of non-competition agreements in connection with the acquisitions of certain United Kingdom subsidiaries. Depreciation and amortization expense increased to $12,190,000 from $5,532,000 primarily due to an increase in depreciation of cable television, telephone and telecommunications equipment. 12 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued Interest and other income increased to $7,763,000 from $3,714,000 due to an increase in funds available for short term investment and an increase in the interest rate on the Company's short term investments. Interest expense increased to $24,711,000 from $4,242,000 due to the issuance of the 12-3/4% and the 11-1/2% Senior Deferred Coupon Notes and the 7-1/4% Convertible Subordinated Notes subsequent to March 1995. Foreign currency transaction losses of $123,000 in 1996 and gains of $196,000 in 1995 are the result of changes in the exchange rate. In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation." Although all entities are encouraged to adopt this method of accounting for all stock-based employee compensation plans (including stock option plans), SFAS No. 123 allows an entity to continue to measure compensation costs for its plans as prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees." At this time, management expects to continue its accounting in accordance with APB Opinion No. 25. LIQUIDITY AND CAPITAL RESOURCES The Company will require significant amounts of capital for construction of its system network, connection of cable television, telephone and telecommunications customers to the network and working capital. The Company also requires capital for debt service. The Company believes that, after taking into account its proportional ownership of its franchises, the aggregate cost of network construction from March 31, 1996 through passing 2,090,000 of the total 2,292,000 homes in its franchises in accordance with its regulatory build schedules (including the license payments in respect of the Northern Ireland LDL and the Gwent and Glamorgan LDLs), will be approximately (Pounds)1.05 billion (which includes the commitments for equipment and services at March 31, 1996 of approximately $26,900,000). The exact amounts and timing of these expenditures could vary significantly with the actual number of subscribers and are subject to a variety of factors which may vary greatly by market and may be beyond the control of the Company. In addition, this amount includes various estimated inflation factors on certain components. The substantial costs will result in a negative cash flow until an adequate customer base is established. The Company expects that the capital required to build its networks and connect residential and business subscribers will be approximately $950 per home in its franchise areas, of which approximately $600 represents the cost of the network itself and the remainder represents the capital cost of connecting customers to its network. Certain locations may require more or less capital depending upon household density, business density and penetration rates. In addition, certain costs such as the establishment of telephone switches, cable headends and facilities are incurred during the 13 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued initial phases of network construction, leading to average capital expenditures per home which are higher in the initial years. The construction and development of the systems will depend on, among other things, the Company's ability to design network routes, 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. Pursuant to the terms of the Northern Ireland LDL, CableTel Northern Ireland Limited is required to make annual cash payments to the ITC for fifteen years, commencing on the earlier of the end of the first full calendar year after the start of operations or May 18, 1997, in the amount of approximately (Pounds)14.4 million (subject to adjustments for inflation). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first ten years and 2% for the last five years of the fifteen-year license. CableTel Northern Ireland Limited is committed to covering at least 428,000 out of the total 530,000 homes in the LDL area. Pursuant to the terms of the Glamorgan and Gwent LDL, CableTel South Wales Limited is required to make annual cash payments to the ITC for fifteen years, commencing in the first full calendar year after the start of operations, in the amount of approximately (Pounds)104,188 (subject to adjustment for inflation). Such payments are in addition to the percentages of qualifying revenue already set by the ITC of 0% for the first five years, 2% for the second five years and 4% for the last five years of the fifteen-year license. CableTel South Wales Limited is committed to covering at least 230,000 out of a total 330,000 homes in the LDL area. OCOM requires capital in order to expand its private line microwave transmission business. Historically, OCOM has used cash from operations to expand this business. In addition, through its participation in the equal access balloting process conducted by AT&T Wireless, OCOM provides long distance service to AT&T Wireless customers who chose OCOM as their long distance service provider. OCOM will need capital for a continuing marketing effort and for interconnection costs in each market in which it provides service. OCOM's cash on hand and cash from operations are expected to be sufficient to meet all of its requirements. Cash and cash equivalents as of March 31, 1996 are expected to be sufficient to meet the capital requirements of the franchises and NTL to the second quarter of 1997 in accordance with the build schedules contained in the existing licenses. The Company is engaged in ongoing discussions with commercial banks regarding the arrangement of the certain proposed credit facilities (the "Proposed Credit Facilities") for an aggregate principal amount of between (Pounds)250 million and (Pounds)300 million to further fund construction costs and working capital requirements. Based on the information currently available to the Company and taking into account the Company's proportional ownership of its franchises, it is currently anticipated that expected sources of funds (including, but not limited to, the Proposed Credit Facilities or other financings, if obtained), cash on hand and cash flow from operations which is expected by early 1997 will be sufficient to fund the estimated costs required to complete planned construction in its existing franchises past 2,090,000 homes in accordance with the construction milestones set forth in its licenses. To the extent that either the Company is unable to obtain the Proposed Credit Facilities or does not meet its 14 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued projections, the Company will require additional debt and/or equity financings. There can be no assurance that (i) the Proposed Credit Facilities or any other financings will be obtained (or be available on acceptable terms), (ii) any other financings will be consummated or available on acceptable terms, (iii) actual construction costs will not exceed the Company's expectations or that additional funding substantially in excess of the amounts estimated above will not be required, (iv) conditions precedent to advances under any such credit facility will be satisfied when funds are required, (v) the Company will not acquire additional franchises or businesses that would require additional capital or (vi) the Company will be able to generate sufficient cash from operations to meet any unfunded portion of its capital requirements when required. The Company does not have any firm additional financing plans to address any of the foregoing situations at this time. The inability of the Company to obtain the Proposed Credit Facilities or alternative financing could result in a failure to comply with the minimum build milestones set forth in its licenses for certain of its franchises and could ultimately lead to the revocation of such licenses, which would have a material adverse effect on the Company. The Company also incurs capital expenditures for the establishment of its business facilities and fixtures, office and computer equipment, its billing and subscriber management systems and vehicles. These costs also vary by location and size of franchise, but are substantially less than the capital costs of the network itself. The exact amounts and timing of all of these expenditures are subject to a variety of factors which may vary greatly by market and be beyond the control of the Company. Accordingly, there can be no assurance that the amount of the anticipated funding requirements will not exceed the estimated amounts described above or that additional funding substantially in excess of the amounts estimated above will not be required. Furthermore, if the Company were to make additional investments or acquire additional franchises, funding would be needed in addition to the anticipated funding requirements described above. In addition to its capital expenditures, the Company incurs direct operating costs for such items as salaries and office rent. As network installation progresses, the Company will incur increased sales and marketing expenses (including sales commissions). Since the Company does not intend initially to produce its own programming, it purchases programming from suppliers whose charges may reach 65% of cable television revenues in the early years. The Company also incurs charges from other telecommunications systems in order to interconnect with the worldwide telephone network. The Company's ability to generate positive operating cash flow depends upon its ability to increase penetration and revenues at a faster rate than the growth of these costs. NTL Acquisition - --------------- In May 1996, an indirect wholly-owned subsidiary of the Company (the "Purchaser") acquired NTL, an English limited liability company, for payments of approximately (Pounds)200 million at closing, (Pounds)35 million, subject to adjustments, on the first anniversary of closing and 15 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued (Pounds)17.1 million (which corresponds to the tax credit expected by NTL by October 1, 1996) in October 1996. NTL provides television and radio transmission services and a range of other services in the broadcasting and telecommunications industries. To finance the acquisition of NTL, the Purchaser entered into an agreement dated March 28, 1996 with a syndicate of lenders (the "Lenders") pursuant to which the Lenders made available to the Purchaser senior secured loan facilities (the "A Facilities") of a maximum principal amount of (Pounds)165 million comprised of (i) a short term loan facility of (Pounds)50 million (the "Short Term Facility"), (ii) a long term loan facility of (Pounds)90 million (the "Long Term Facility," and, together with the Short Term Facility, the "Term Loan Facilities") and (iii) a revolving credit facility of (Pounds)25 million (the "Revolving Facility"). One of the Lenders also agreed to make available to the Purchaser a secured loan facility of (Pounds)60 million (the "B Facility") to finance the remainder of the payment due at closing and acquisition costs and expenses due at closing. The Term Loan Facilities and the B Facility were used to finance the acquisition of NTL including related acquisition expenses. The Revolving Facility is available until December 31, 1997 for capital expenditure and working capital purposes of NTL's group. At the end of the availability period, any amount outstanding under the Revolving Facility will be converted to term debt and be aggregated with the Long Term Facility. The Short Term Facility is repayable in full on December 31, 1996 unless certain conditions are fulfilled on or prior to that date, in which case the amounts outstanding under the Short Term Facility will automatically be converted into, and shall be deemed to be, amounts outstanding under the Long Term Facility. The Company anticipates that such conditions will be met and that the amounts outstanding under the Short Term Facility will be so converted. All amounts outstanding under the Long Term Facility are scheduled to be repaid in quarterly installments from 1998 to 2002 inclusive. The amount of the installments will be based upon an agreed percentage of the loan and will increase year to year. Final repayment of the Long Term Facility is due on December 31, 2002. Loans under the A Facilities bear interest at an annual rate equal to LIBOR plus a margin that varies from 0.75% per annum to 1.75% per annum, based on certain financial ratios of the Purchaser and certain of its subsidiaries. The A Facilities are be secured by guarantees from NTL and each of its subsidiaries and by first ranking fixed and floating charges over all the present and future assets of the Purchaser, NTL and its subsidiaries. The A Facilities do not, therefore, provide for the lenders to have recourse to assets of the Company other than to the assets of the Purchaser and its subsidiaries. The A Facilities contain various financial and other covenants, including covenants with respect to the Purchaser and certain of its subsidiaries relating to minimum total debt to operating cash flow (as defined in the "A Facilities"), fixed charge coverage, net worth and pro-forma debt service ratios. The A Facilities also include restrictions on dividends and distributions by the Purchaser to its shareholders. 16 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued The B Facility is secured by cash of (pounds) 62,500,000 on deposit with the lender and guarantees from the Company, OCOM Corporation, OCOM Sub I Inc., OCOM Sub III Inc., CableTel (UK) Group, Inc. and CableTel (UK) Limited and by second ranking fixed and floating charges over all the present and future assets of the Purchaser, NTL and its subsidiaries, subject to certain subordination arrangements. The B Facility must be repaid in full by December 31, 1996. Loans under the B Facility bear interest at an annual rate equal to LIBOR plus a margin of 3%, which margin shall be increased by an additional 1.25% on each of the "Applicable Margin Step-Up Dates" falling three, four, five, six and seven months after the advance of any loans under the B Facility. The Purchaser may repay all, but not less than all, of the amount outstanding under the B Facility at any time without penalty. The B Facility contains covenants similar to those of the A Facilities. The Company may be required to obtain up to approximately (Pounds)95 million in additional funding to repay the borrowings under the B Facility and pay the (Pounds)35 million on the first anniversary of the date of closing of the acquisition. In addition, the Company may be required to repay the (Pounds)50 million Short Term Facility if certain conditions are not met. The Company anticipates that such additional funding should be available from net cash provided by operations, existing cash on hand of the Company available for such purposes and sales of equity or equity related securities of the Company. There is no assurance that such additional funding will be available to the Company on acceptable terms or at all. In addition, the Company anticipates that substantial amounts of capital investment will be required in the future in order to fully develop NTL's business. The Company estimates, based on information currently available to it, that through December 31, 1997 NTL will require approximately up to (Pounds)50 million in capital beyond that which NTL is capable of generating from its current operations. Up to (Pounds)25 million is expected to be available under the Revolving Facility, subject to a number of conditions, in particular, the repayment of the B Facility. The Company believes that NTL's other capital needs for the foreseeable future will be funded by cash on hand of the Company. The information in the preceding paragraphs includes projections; in reviewing such information it should be kept in mind that actual results may differ materially from those in such projections. These projections were based on various factors and were derived utilizing numerous assumptions. Important assumptions and factors that could cause actual results to differ materially from those in these projections include the Company's ability to continue to design network routes, 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. Other factors and assumptions not identified above were also involved in the derivation of these projections, and the failure of such other assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. The Company assumes no obligation to update these projections to reflect actual funding requirements, capital expenditures and results, changes in assumptions or changes in other factors affecting such projections. 17 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued Description of Certain Indebtedness - ----------------------------------- In January 1996, the Company issued $1,050,000,000 aggregate principal amount of its 11-1/2% Series A Senior Deferred Coupon Notes Due 2006 (the "11-1/2% Notes"). The 11-1/2% Notes were issued at a price to investors of 57.155% of the aggregate principal amount at maturity, or $600,127,500. The Company received net proceeds of approximately $582,000,000 from the issuance of the 11-1/2% Notes. The original issue discount of the 11-1/2% Notes accretes at a rate of 11-1/2%, compounded semiannually, to an aggregate principal amount of $1,050,000,000 by February 1, 2001. Interest will thereafter accrue at 11-1/2% per annum, payable semiannually beginning on August 1, 2001. The 11-1/2% Notes may be redeemed at the Company's option, in whole or in part, at any time on or after February 1, 2001 at 105.75% the first year, 102.875% the second year and 100% thereafter, plus accrued and unpaid interest to the date of redemption. The Company has filed a registration statement on Form S-4 relating to its offer to exchange an aggregate principal amount at maturity of up to $1,050,000,000 of 11-1/2% Series B Senior Deferred Coupon Notes Due 2006 (the "New Notes") of the Company for a like principal amount at maturity of the issued and outstanding 11-1/2% Notes. The terms of the New Notes are identical in all material respects to the 11-1/2% Notes, except (i) for certain transfer restrictions and registration rights relating to the 11-1/2% Notes and (ii) that, if the exchange offer is not consummated by May 29, 1996 or the Company fails to comply with certain other registration obligations with respect to the 11-1/2% Notes, interest will accrue (in addition to the accrual of the original issue discount and stated interest on the 11-1/2% Notes) at a rate per annum of up to 1.50% of the Accreted Value of the 11-1/2% Notes (the "Special Interest") from and including May 30, 1996 until but not including the date of the consummation of the exchange offer or, as the case may be, compliance by the Company with such other registration obligations. Any Special Interest will be payable in cash semiannually in arrears each February 1 and August 1, commencing August 1, 1996. In April 1995, the Company issued $175,000,000 aggregate principal amount of its Convertible Subordinated Notes due 2005 and $277,803,500 aggregate principal amount at maturity of its 12-3/4% Senior Deferred Coupon Notes Due 2005 (the "Old 12-3/4% Notes"). On August 18, 1995, the Company issued $277,803,500 aggregate principal amount at maturity of the 12-3/4% Series A Senior Deferred Coupon Notes Due 2005 (the "12-3/4% Notes") in exchange for the Old 12-3/4% Notes pursuant to the Indenture. The terms of the 12-3/4% Notes are identical in all material respects to the Old 12-3/4% Notes except for certain transfer restrictions and registration rights applicable to the Old 12-3/4% Notes. The Old 12-3/4% Notes were canceled on August 18, 1995 on consummation of the exchange offer which was made pursuant to the Company's Prospectus dated July 18, 1995 forming part of the Registration Statement on Form S-4 filed with the SEC on May 26, 1995. The 12-3/4% Notes were issued at a price to investors of 53.995% of the aggregate principal amount at maturity, or $150,000,000. The Company received proceeds of $145,125,000 from the issuance of the 12-3/4% Notes and $169,750,00 from the issuance of the Convertible Subordinated Notes. In addition, in May 1995, the initial purchasers exercised their overallotment option for an additional $16,750,000 principal amount of Convertible Subordinated Notes, for which the Company received proceeds of $16,315,000. 18 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued The original issue discount of the 12-3/4% Notes accretes at a rate of 12-3/4%, compounded semiannually, to an aggregate principal amount of $277,803,500 by April 15, 2000. Interest will thereafter accrue at 12-3/4% per annum, payable semiannually beginning on October 15, 2000. The 12-3/4% Notes may be redeemed at the Company's option, in whole or in part, at any time on or after April 15, 2000 at 103.64% the first year, 101.82% the second year and 100% thereafter, plus accrued and unpaid interest on the date of redemption. Interest on the Convertible Subordinated Notes is payable semiannually beginning on October 15, 1995. The Convertible Subordinated Notes are convertible into shares of common stock prior to maturity at a conversion price of $27.56 per share, (as adjusted for the four-for-three stock split by way of a stock dividend paid in August 1995), subject to further adjustment in certain events. The Convertible Subordinated Notes are redeemable, in whole or in part, at the option of the Company at any time on or after April 15, 1998, at a redemption price of 105.08% that declines annually to 100.73% in 2004, in each case together with accrued and unpaid interest to the redemption date. On July 18, 1995, the SEC declared effective the Company's shelf registration statement relating to the resale of the Convertible Subordinated Notes and the Common Stock issuable upon conversion thereof by the holders thereof. In October 1993, the Company issued $212,000,000 aggregate principal amount of its 10-7/8% Senior Deferred Coupon Notes due 2003 ("the 10-7/8% Notes"). The 10-7/8% Notes were issued at a price to investors of 58.873% of the aggregate principal amount at maturity, or $124,811,000. The Company received proceeds of $119,797,000 from the issuance of the 10-7/8% Notes. The original issue discount of the 10-7/8% Notes accretes at a rate of 10-7/8%, compounded semiannually, to an aggregate principal amount of $212,000,000 by October 15, 1998. Interest will thereafter accrue at 10-7/8% per annum, payable semiannually beginning on April 15, 1999. The 10-7/8% Notes may be redeemed at the Company's option, in whole or in part, at any time on or after October 15, 1998 at 103.107% the first year, 101.554% the second year and 100% thereafter, plus accrued and unpaid interest to the date of redemption. The Company's operations are conducted through its direct and indirect wholly-owned subsidiaries and joint ventures. As a holding company, the Company holds no significant assets other than its investments in and advances to its subsidiaries and joint ventures and the Company is dependent upon the receipt of sufficient funds from its subsidiaries and joint ventures to meet its own obligations. The ability of the Company and its creditors, including holders of the 11-1/2% Notes, the 12-3/4% Notes, the 10-7/8% Notes and the Convertible Subordinated Notes, to benefit in the distribution of any assets of any of the Company's subsidiaries and joint ventures upon any liquidation of any such subsidiary will be subject to the prior claims of the subsidiary's creditors, including trade creditors and, to the extent that such subsidiary is not directly owned by the Company, to the prior claims of creditors of other entities directly or indirectly owning such subsidiary. Accordingly, the Company's ability to make scheduled interest and principal payments (or any other payments that may become payable) when due to holders of indebtedness of the Company is dependent upon the receipt of sufficient funds from its subsidiaries, which may be restricted by the terms of future indebtedness of the Company's subsidiaries. 19 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued Currently, there are no encumbrances or restrictions on the ability of any subsidiary to pay dividends or make loans or advances to the Company, other than restrictions on the Purchaser and its subsidiaries, and restrictions as described in the following sentences. Each of the Company's subsidiaries which are Delaware incorporated corporations may pay dividends, under the Delaware General Corporation Law (the "DGCL") only out of its surplus or, in the circumstances prescribed by the DGCL, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Each of the Company's subsidiaries which are United Kingdom companies are, under applicable United Kingdom law, prohibited from paying dividends unless such payments are made out of profits available for distribution (which consist of accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less accumulated realized losses, so far as not previously written off in a reduction or reorganization of capital). The Company's United Kingdom subsidiaries (not including NTL and subsidiaries) do not currently have such profits and are not expected to have any such profits for the foreseeable future. In addition, the United Kingdom may impose a withholding tax on distributions (of interest, dividends or otherwise) by United Kingdom subsidiaries of the Company. In light of the Company's strategy of continued growth, in part through acquisitions, the Company and its subsidiaries may incur substantial indebtedness in the future. A substantial portion of such future indebtedness and, in particular, indebtedness incurred by the Company's subsidiaries under the Proposed Credit Facilities, is expected to be secured and, consequently, will have priority to the extent of such security over unsecured indebtedness. In addition, the lenders under the Proposed Credit Facilities may impose restrictions on the rights of the Company to receive from its subsidiaries repayment of or interest in respect of intercompany loans or restrictions on the ability of the Company's subsidiaries to pay dividends or make other distributions. Therefore, for the reasons referred to in this paragraph, there can be no assurance that the Company will be able to receive any cash flow from its subsidiaries in a timely manner or at all. In addition, the Company will encounter currency exchange rate risks which could be material relative to funding United Kingdom operations and to revenues. To the extent that the Company obtains financing in United States dollars and incurs costs in the construction and operation of the Company's regional systems in the United Kingdom in British pounds sterling, it will encounter currency exchange rate risks. Furthermore, the Company's revenue will be generated primarily in British pounds sterling while its interest and principal obligations with respect to most of the Company's existing indebtedness is, and will be, payable in United States dollars. At March 31, 1996, the Company had invested approximately $607,000,000 in British pounds sterling money market instruments and cash accounts to reduce this risk. While the Company may consider entering into transactions to hedge the risk of exchange rate fluctuations, there can be no assurances that the Company will engage in such transactions, and, if the Company decides to engage in such transactions, that they will successfully prevent shifts in the currency exchange rates from having a material adverse effect on the Company. 20 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES Continued Condensed Consolidated Statement of Cash Flows - ---------------------------------------------- Cash provided by operating activities was $1,541,000 in 1996 and $5,434,000 in 1995. The change is primarily due to the significant increase in the net loss, which was partially offset by non-cash charges. Purchases of fixed assets, net of proceeds from sales, were $112,210,000 in 1996 and $83,892,000 in 1995 as a result of increased cable television, telephone and telecommunications fixed asset purchases in 1996. Cash provided by financing activities was $596,481,000 in 1996 primarily due to the proceeds from the 11-1/2% Notes of $600,128,000, net of financing costs incurred of $22,339,000. Additional financing costs of $305,000 were incurred in connection with the Proposed Credit Facilities. Pursuant to the subsidiary bank loan, $367,000 was released from cash held in escrow. In 1996, one of the Company's joint ventures borrowed (Pounds)18,000,000 from the Company and (Pounds)12,000,000 from the minority interest holder in the joint venture. The proceeds from borrowings from minority partner of $18,367,000 are the result of the cash received from the minority interest holder for the loan. 21 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES 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 During the quarter ended March 31, 1996, the Company filed the following current reports on Form 8-K: (i) Report dated January 8, 1996 reporting under Item 5, Other Events, that the Company amended its solicitation of the consent of the holders of its 10-7/8% Senior Deferred Coupon Notes to amend the indenture governing the 10-7/8% Notes, and also seeking the consent of the holders of its 12-3/4% Senior Deferred Coupon Notes to amend the indenture governing the 12-3/4% Notes. (ii) Report dated January 16, 1995 reporting under Item 5, Other Events, and attaching as an exhibit under Item 7, information contained in an offering memorandum prepared in connection with a then-proposed issuance by the Company of certain Notes in compliance with Rule 144A. (iii) Report dated January 17, 1996 reporting under Item 5, Other Events, that the Company extended its solicitation of the consent of the holders of its 10-7/8% Senior Deferred Coupon Notes and its 12-3/4% Senior Deferred Coupon Notes. The expiration date for the solicitation was extended to January 19, 1996. (iv) Report dated January 23, 1996 reporting under Item 5, Other Events, that the Company had received the necessary consents from the holders of its 10-7/8% Senior Deferred Coupon Notes and its 12-3/4% Senior Deferred Coupon Notes to amend the indentures governing those Notes. (v) Report dated January 30, 1996 reporting under Item 5, Other Events, that the Company has raised net proceeds of approximately $582 million from an offering that it had completed of its 11-1/2% Series A Deferred Coupon Notes Due 2006. (vi) Report dated February 5, 1996, reporting under item 5, Other Events and attaching as an exhibit under Item 7, information contained in a registration statement on Form S-4 prepared in connection with a then-proposed offer by the Company of certain Notes. 22 INTERNATIONAL CABLETEL INCORPORATED AND SUBSIDIARIES (b) Reports on Form 8-K - Continued (vii) Report dated March 19, 1996 reporting under Item 5 Other Events, and attaching as an exhibit under Item 7, certain licenses issued to, or acquired by, the Company's U.K. subsidiaries and affiliated Joint Ventures (and their predecessors). (viii) Report dated March 28, 1996 reporting under Item 5, Other Events, the Company's agreement to acquire NTL Group Ltd. No financial statements were filed with these reports. 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERNATIONAL CABLETEL INCORPORATED Date: May 13, 1996 By: /s/ J. Barclay Knapp ----------------------------- J. Barclay Knapp President Date: May 13, 1996 By: /s/ Gregg Gorelick ------------------------------ Gregg Gorelick Vice President-Controller (Principal Accounting Officer) 24 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 661,945,000 0 10,929,000 (1,143,000) 0 16,784,000 766,268,000 (50,184,000) 1,592,693,000 139,796,000 1,134,122,000 0 0 303,000 292,074,000 1,592,693,000 0 18,434,000 0 12,629,000 21,798,000 0 24,711,000 (42,682,000) 42,000 (42,724,000) 0 0 0 (42,724,000) (1.41) 0
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