EX-99 4 ntl99_2.txt EXHIBIT 99.2 Slide 1 ntl: NTL Incorporated Q1 2003 Results May 14, 2003 Slide 2 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements contained herein constitute "forwardlooking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. When used herein, the words, "believe," "anticipate," "should," "intend," "plan," "will," "expects," "estimates," "projects," "positioned," "strategy," and similar expressions identify such forwardlooking statements. Such forwardlooking 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 forwardlooking statements. Such factors include, among others, the "Risk Factors" set forth in Amendment No. 1 on Form 10-K/A to the Company's Annual Report on Form 10-K for the year ended December 31, 2002, as such filings may be amended from time to time, as well as: the impact of our organizational restructuring and integration actions; our ability to maintain contracts that are critical to our operations; potential adverse developments with respect to our liquidity or results of operations; our ability to fund and execute our business plan; our ability to attract, retain and compensate key executives and associates; our ability to attract and retain customers; general economic and business conditions; technological developments; our 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; 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 interest rate and currency exchange rate fluctuations. We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting such statements. Slide 3 Use of non-GAAP (Generally Accepted Accounting Principles) terms All US Securities and Exchange Commission Regulation G reconciliations are available in our three months ended March 31, 2003 press release on our website www.ntl.com/investors. To supplement our consolidated financial statements presented on a GAAP basis, NTL uses certain non-GAAP measures (such as EBITDA and Capital Expenditures) that we believe may be useful to enhance investor's overall understanding of our past financial performance and also our prospects for the future. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP accepted in the United States. Slide 4 ntl: Barclay Knapp Chief Executive Officer Slide 5 Agenda o Introduction and Q1 03 Summary o Divisional Review o Financial Review o Questions and Answers Slide 6 First Quarter Highlights o Revenue of (pound)546.5 million and EBITDA of (pound)156.5 million, Capital Expenditures of (pound)82.5 million and Operating Cash Flow of (pound)74.0 million o UK Revenue Generating Units now exceed 5 million o NTL Home adds over 141,400 services (RGUs) and 27,100 net customers o UK annualized churn down to 13.0% o Exceptional income of(pound)4.2 billion ($6.8b) related to emergence from Chapter 11 Slide 7 Financial Summary Year over Year ((pound) millions) Q1 2003 Q1 2002* Q1 2002 ------- ------- ------- Revenue Home (pound)362 (pound)362 Business 75 83 Broadcast 64 64 Carrier 28 33 Ireland 18 14 --------- ---------- Total Revenues (pound)547 (pound)556 (pound)556 Underlying EBITDA (pound)157 (pound)143 (pound)154 EBITDA Margin 29% 26% 28% Capital Expenditures (pound) 83 (pound) 92 (pound)103 Operating Cash Flow (pound) 74 (pound) 51 (pound) 51 * Q1 2002 restated to deduct Corporate Expenses in line with treatment in Q1 2003. Accounts for changes in assumptions relating to the allocation of certain costs from capital to operating expense that occurred in Q4 02, reducing Q1 02 EBITDA and Capital Expenditures by (pound)10.8m. Slide 8 Financial Summary Actual Q4-02 and Q1-03 vs January 10th 8-K 8-K ((pound)millions) Q1 2003 Q1 2003* Q4 2002 ------- ------- ------- Revenue (pound)547 (pound)539 (pound)533 EBITDA 157 155 158** Corporate Expenses (3) (3) Underlying EBITDA (pound)157 (pound)152 (pound)155 Underlying Capital Expenditures (pound) 83 (pound)103 (pound)133*** * As reported in 8-K filed January 10, 2003. ** Underlying Q4 2002 EBITDA, as reported in Q4 and Year-End 2002 press release. *** Underlying Q4 2002 Capital Expenditure as described in the Q4 and Year-End 2002 presentation. Slide 9 New Management and Board o Chairman - Jim Mooney, ex-Nextel o CEO - Barclay Knapp o COO - Simon Duffy, ex-Orange o CFO - Scott Schubert, ex-WilTel o Board of Directors Jeffrey D. Benjamin, James E. Bolin, David Elstein, William R. Huff, Barclay Knapp, Jim Mooney, George R. Zoffinger, Brett Wyard, Ed Banks Slide 10 [GRAPHICS OMITTED] ntl:home Slide 11 Q1 2003 Summary o 141,400 net new services (RGUs) and 27,100 net new customers added o Revenue growth continued o Second successive quarterly increase in revenue o 661k Broadband customers at March 2003, over 691k today o Increase of 144k in the Q1-03 o Telephone customer growth restarted o Margin improvement continues o Product mix, cost reductions, efficiencies Slide 12 Operating Results - Home Year over Year Adjusted ((pound)millions) Q1 2003 Q1 2002* Q1 2002 ------- ---------------------- Revenue (pound)362 (pound)362 (pound)362 EBITDA (pound)153 (pound)138 (pound)142 EBITDA Margin % 42% 38% 39% * Accounts for changes in assumptions relating to the allocation of certain costs from capital to operating expense that occurred in Q4 02, reducing Q1 02 EBITDA by (pound)4 million. Slide 13 Home Customer Base Q1 2003 vs Q4 2002 (in thousands) Q1 2003 Q4 2002 Change ------- ------- ------ Total Customers 2,713 2,686 27 Total RGUs 5,125 4,984 141 RGUs per customer 1.89 1.86 Telephone 2,427 2,412 15 Broadband 661 517 144 Television 2,038 2,055 (17) of which Digital TV 1,255 1,229 26 Slide 14
Customers and ARPU Net customers and ARPU up... Gross Adds Disconnects (Quarterly, 000s) (Quarterly, 000s) 157 | | 154 | | 116 144 | | | | 112 | | | | | | | | | | 106 | | | | | | 127 | | | | | | | | | | | | | | 119 | | | | 84 | | | | | | | | | | | | 113 | | | | 54 49 | | | | | | | | | | | | | | | | 108 | | | | | | | | | | | | | | | | | | | | | | | | | | 89 | | | | | | | | | | | | | | | | | | | | | | | | | | | | -------------------------------------------- ------------------------------------------------ Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Net Customer ARPU Movement (Average of quarter(pound)) (Quarterly, 000s) 27 | | 13 | | | | | | | | | | 40.7 -------------------------------------------- | Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 40.0 | | | | | | | | | | | | 39.6 | 40.0| | | | | | | | | (2) | | | | | | | | | | | | 38.8| | 39.1 | | | | | | | | | (29) | | | | | 38.9| | (37) | | | | | | | | | | | | | | | | | | | | | | | | (70) ------------------------------------------ (73) Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03
Slide 15
Net RGUs Broadband (Quarterly Change, 000s) (Quarterly Change, 000s) 144.0 141 137.0 | | 113 | | | | | | | | | | 105.2 | | | | 64 | | | | | | | | | | | | | | | | 92.0 | | | | | | | | | | | | | | | | | | | | | | 34 | | | | 65.0 | | | | | | | | | | | | | | | | 38.9 | | | | | | | | | | | | | | | | | | 33.4 | | | | | | | | | | | | -------------------------------------------- | | | | | | | | | | | | | | Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |_| | | |_| -------------------------------------------- (52) |_| (56) Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 (76) Telco Television (Quarterly Change, 000s) (Quarterly Change, 000s) 20 | | 15 | | | | 11 | | | | | | -------------------------------------------- -------------------------------------------- Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (14) | | | | | | | | | | | | (26) | | | | | | | | | | | | | | | | (18) | | | | (28) | | | | | | | | | | | | | | | | | | | | | | (32) | | | | | | | | | | (44) | | | | | | | | | | (65) | | (65) | | | | (71) | | | | (76) | | (77)
Slide 16 Churn & Low Bad Debt 21.3% | | 19.5% | | | | | | 17.9% | | | | | | 17.1% | | | | | | | | 16.4% | | | | | | | | | | 15.9% 13.0% | | | | 2.8%* | | | | | | | | 2.7%* | | | | | | | | | | | | | | 2.2%* | | | | 1.7%* | | | | | | | | | | 1.6%* | | 1.0%* | | | | | | | | | | | | | | 1.1%* ------------------------------------------------ Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Key *Bad Debt Churn% Slide 17 Customer Service Performance Calls Answered, Average Speed of Answer, Accessibility Index, Calls per Customer % Calls Answered 97% | | 95% | | | | | | 93% | | | | | | | | | | 90% 90% | | | | | | | | | | 89% 89% | | | | | | | | | | | | | | | | | | | | 88% | | | | | | | | | | | | | | | | | | 87% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 (continued) Avg. Speed of Answer 151 144 | | | | 141 | | | | | | | | | | | | | | 123 | | | | 123 | | 111 | | | | | | | | | | | | | | | | | | | | | | 103 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 64 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50 | | | | | | | | | | | | | | | | | | Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 (continued) Accessibility Index % Calls answered in 20 seconds or less 71% | | 62% | | | | | | 54% | | | | 48% | | | | | | | | | | | | | | | | 46% | | | | | | 41% 41% | | | | | | | | | | 39% 39% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 (continued) Calls per Customer 0.74x | | | | 0.73x | | | | | | | | 0.70x 0.68x | | | | | | | | | | | | 0.65x 0.65x | | | | | | | | | | 0.64x | | | | 0.63x | | | | | | | | | | | | 0.63x | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Slide 18 [GRAPHIC OMITTED] ntl:business Slide 19 Operating Results - Business Year over Year Adjusted ((pound)millions) Q1 2003 Q1 2002* Q1 2002 ------- ------- ------- Revenue (pound)75 (pound)83 (pound)83 EBITDA (pound)21 (pound)18 (pound)20 EBITDA Margin % 28% 22% 24% * Accounts for changes in assumptions relating to the allocation of certain costs from capital to operating expense that occurred in Q4 02, reducing Q1 02 EBITDA by (pound)2m. Slide 20 Q1 2003 Summary o Restructure of Business segments complete - VISP (Wholesale Internet) to Home - Public Safety to Broadcast - Mobile/Carrier to Carriers o New NTL Business merger of Retail and Enterprise segments - Focus on selling standard on-net voice and data products - Regional organizational structure o Strategic Focus on - Churn reduction - Cross sell and up-sell to profitable customers - Driving cost out of business Slide 21 Operating Results - Commentary o Revenue - Revenues stable despite reorganization of the business - Focus on higher margin products/customers o Gross Margin - Gross margin improvement reflects new revenue strategy o Operating Costs - Recurring costs lower as the business drives out operational inefficiencies - Significant further efficiencies identified Slide 22 ntl: Carriers Slide 23 Operating Results - Carrier Year Over Year ((pound)millions) Q1 2003 Q1 2002 Revenue Carrier (pound)10 (pound)21 Mobile 18 12 -- -- Total Revenue (pound)28 (pound)33 EBITDA (pound)22 (pound)27 EBITDA Margin % 79% 82% Slide 24 Carrier Division - Profile (Previously reported under NTL: Business) o Manage relationships with other Operators for Interconnect cost base o Voice o IP o Leased lines o Sales and Service relationships with Carriers and Mobile customers for network based products and services o Managed networks o Bandwidth (DWDM/SDH) o Voice minutes o Co-location and maintenance o Integrated with Networks Division o Exploits network design, build and management capability o Integrated within end to end processes o Exploits networks assets Slide 25 [GRAPHIC OMITTED] ntl:broadcast Slide 26 Broadcast Profile o Long term cash-generative contracts o Key assets: towers, teleports & technical facilities o Strong customer relationships & customer service reputation o Long track record of service in our major markets o Financially self-contained: customer-driven capex, near vertically integrated, free cash positive [GRAPHIC REFLECTING COMPOSITION OF BROADCAST BUSINESS (WIRELESS 17%, PUBLIC SAFETY 21% AND MEDIA 62%) AND BREAKDOWN OF MEDIA (TV & RADIO TRANSMISSION 73% AND SATELLITE & MEDIA SERVICES 27%) OMITTED] Slide 27 Operating Results - Broadcast Year over Year ((pound)millions) Q1 2003 Q1 2002 ------------------------ Revenue Media (pound)39 (pound)41 Wireless 11 10 Public Safety 14 13 -- -- Total Revenue (pound)64 (pound)64 EBITDA (pound)29 (pound)28 EBITDA Margin % 45% 44% Slide 28 o Media: o Teletext transmission renewal ((pound)10m over 10 yrs) o Digital radio network win in Yorkshire with MXR group ((pound)7.7m over 12 years) o Wireless: o Average Sharers per tower rose from 2.71 to 2.97 o Public Safety: o Metropolitan Police Integrated Communications Platform ((pound)25m over seven yrs, subject to contract) o Managing digital transition for Thames Valley Police consortium of 5 police forces ((pound)13m, up to 6 yrs) Slide 29 ntl: Financial Overview Slide 30 Financial Summary Quarter over Quarter ((pound)millions) Q1 2003 Q4 2002 Q1 2002* ------- ------- -------- Revenue Home (pound)362 (pound)356 (pound)362 Business 75 75 83 Broadcast 64 63 64 Carrier 28 27 33 Ireland 18 15 14 Q4 2002 Accounting Adjustment - (3) - -- -- -- Total Revenues (pound)547 (pound)533 (pound)556 Underlying EBITDA* (pound)157 (pound)155 (pound)143 EBITDA Margin 29% 29% 26% Capital Expenditures (pound) 83 (pound)133 (pound) 92 Operating Cash Flow (pound) 74 (pound) 22 (pound) 51 * Q1 2002 and Q4 2002 EBITDA are restated to deduct Corporate Expenses in line with treatment in Q1 2003. Q1 2002 figures account for changes in assumptions relating to the allocation of certain costs from capital to operating expense that occurred in Q4 02, reducing Q1 02 EBITDA and Capital Expenditures by (pound)10.8m. Q4 2002 Underlying EBITDA and Capital Expenditures are as reported in the Q4 2002 Year-End presentation and press release. Slide 31 Luquidity ((pound) millions) Q1 2003 ------- Cash per 8-K (pound)277 Q1 2003 Cash Improvements - Operating efficiencies - Working capital improvements + 26 - Lower capital spend ----- Actual Q1 2003 Ending Cash (pound)303 o Capital Expenditures improvement partly due to efficiencies and partly due to timing o Cash utilization across the company better than expected Slide 32 NCTA Standard Reporting: Capex o Customer Premise Equipment o Commercial o Scaleable Infrastructure o Line Extensions o Upgrade/Rebuild o Support Capital Slide 33 Q1 2003 ------- UK Customer Premise Equipment (pound)37 Commercial 4 Scaleable Infrastructure 12 Line Extensions 0 Upgrade/Rebuild 3 Support Capital 16 --- Total 72 Non-NCTA category capex Broadcast 3 Other 5 Ireland 3 --- Total Capital Expenditure (pound)83 Slide 34 Fresh Start Reporting o SOP 90-7 requires NTL to adopt 'fresh start reporting' on emergence from Chapter 11 o Professional valuation specialists performed the valuation exercise o 'Reorganization value' (the Company's fair value) is the basis of NTL's new opening balance sheet as of January 1, 2003 Slide 35 ntl: