10-Q 1 0001.txt 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: JUNE 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 June 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. NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 30, 2000 TABLE OF CONTENTS Page Number ------ PART I. FINANCIAL INFORMATION ------- --------------------- Item 1. Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2000 (Unaudited) and December 31, 1999...............2 Condensed Consolidated Statements of Operations for the Six and Three Months Ended June 30, 2000 and 1999 (Unaudited)..............................................3 Condensed Consolidated Statement of Shareholder's Equity for the Six Months Ended June 30, 2000 (Unaudited).....4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 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 Item 3. Quantitative and Qualitative Disclosures About Market Risk..................................................12 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 JUNE 30, 2000 PART I. FINANCIAL INFORMATION ------- --------------------- ITEM 1. FINANCIAL STATEMENTS ------- -------------------- CONDENSED CONSOLIDATED BALANCE SHEETS -------------------------------------
June 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)41,832 (UK Pound)27,895 Accounts receivable, less allowance for doubtful accounts of (UK Pound)10,547 (2000) and (UK Pound)9,452 (1999)..................... 10,738 10,170 Due from affiliate....................................................... 58 - Other current assets..................................................... 5,767 4,240 ------------------ ------------------- Total current assets................................................. 58,395 42,305 Property and equipment, net................................................. 411,032 382,078 Intangible assets, net...................................................... 412,937 434,333 Other assets, net........................................................... 33,309 42,553 ------------------ ------------------- (UK Pound)915,673 (UK Pound)901,269 ================== =================== Liabilities and shareholder's equity Current liabilities Accounts payable and accrued expenses.................................... (UK Pound)46,542 (UK Pound)34,431 Deferred revenue......................................................... 10,618 10,572 Due to affiliates........................................................ 32,139 5,905 Current portion of long-term debt........................................ 684 864 ------------------ ------------------- Total current liabilities.............................................. 89,983 51,772 Long-term debt, less current portion........................................ 330,937 293,285 Commitments and contingent liabilities Deferred income taxes....................................................... 8,211 8,237 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)................................... (14) (189) Retained earnings........................................................ 122,582 184,190 ------------------ ------------------- Total shareholder's equity............................................. 486,542 547,975 ------------------ ------------------- (UK Pound)915,673 (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 JUNE 30, 2000 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- (Unaudited)
Six Months Ended Three Months Ended June 30, June 30, 2000 1999 2000 1999 ------------------ ----------------- ----------------- ----------------- (in (UK Pound)000's) Revenue................................ (UK Pound)77,612 (UK Pound)47,480 (UK Pound)38,935 (UK Pound)24,291 ------------------ ----------------- ----------------- ----------------- Costs and expenses Operating........................... 26,968 15,966 13,461 8,193 Selling, general and administrative. 33,590 20,066 18,688 9,897 Depreciation and amortization....... 40,092 17,527 23,339 8,777 ------------------ ----------------- ----------------- ----------------- 100,650 53,559 55,488 26,867 ------------------ ----------------- ----------------- ----------------- Operating loss......................... (23,038) (6,079) (16,553) (2,576) Other income (expense) Interest expense.................... (16,977) (15,536) (8,840) (7,890) Investment income................... 798 2,680 467 976 Equity in net loss of affiliate..... - (3,972) - (1,912) Amalgamation costs.................. - (145) - - Exchange losses and other........... (22,466) (13,721) (15,810) (5,996) ------------------ ----------------- ----------------- ----------------- (38,645) (30,694) (24,183) (14,822) ------------------ ----------------- ----------------- ----------------- Loss before income taxes............... (61,683) (36,773) (40,736) (17,398) Income tax benefit (provision)......... 75 - (71) - ------------------ ----------------- ----------------- ----------------- Net loss............................... ((UK Pound)(61,608) (UK Pound)(36,773) (UK Pound)(40,807) (UK Pound)(17,398) ================== ================= ================= =================
See accompanying notes. 3 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 30, 2000 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY -------------------------------------------------------- (Unaudited) (in (UK Pound)000's, except share data)
Common Membership Compre- Interests Additional hensive Shares Amount Capital Loss ------ ------ ------- ---- Balance at December 31, 1999. 800,000 (UK Pound)8 (UK Pound)363,966 Net loss................... (UK Pound)(61,608) Currency translation adjustment............... 175 ----------------- Comprehensive loss......... (UK Pound)(61,433) -------- ----------- ----------------- ----------------- Balance at June 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................... (61,608) (61,608) Currency translation adjustment............... 175 175 Comprehensive loss......... -------------- ----------------- ----------------- Balance at June 30, 2000..... (UK Pound)(14) (UK Pound)122,582 (UK Pound)486,542 ============== ================= =================
See accompanying notes. 4 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 30, 2000 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited)
Six Months Ended June 30, 2000 1999 ----------------- ----------------- (in (UK Pound)000's) Net cash provided by operating activities................................ (UK Pound)29,213 (UK Pound)16,882 ----------------- ----------------- Investing activities Purchases of marketable securities.................................... (2,166) - Proceeds from sales of marketable securities.......................... 2,199 - Fixed asset deposit with affiliate.................................... - (51,915) Capital expenditures.................................................. (14,063) (28,158) Additions to deferred charges......................................... - (55) ----------------- ----------------- Net cash used in investing activities........................... (14,030) (80,128) ----------------- ----------------- Financing activities Principal payments.................................................... (915) (1,209) Net transactions with affiliates...................................... - (94) ----------------- ----------------- Net cash used in financing activities........................... (915) (1,303) Effect of exchange rate changes on cash......................... (331) - ----------------- ----------------- Increase (decrease) in cash and cash equivalents......................... 13,937 (64,549) Cash and cash equivalents, beginning of period........................... 27,895 103,451 ----------------- ----------------- Cash and cash equivalents, end of period................................. (UK Pound)41,832 (UK Pound)38,902 ================= ================= Supplemental disclosure of cash flow information Cash paid during the period for interest.............................. (UK Pound)177 (UK Pound)357 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 JUNE 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 six and three months ended June 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 is evaluating the impact that the adoption of SFAS No. 133 will have on its financial position and results of operations. 2. Comprehensive Loss Comprehensive loss for the six and three-month periods ended June 30, 2000 and 1999 was (UK Pound)61,433,000, (UK Pound)36,773,000, (UK Pound) 39,986,000 and (UK Pound)17,398,000, 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 million, plus (UK Pound)5 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 million in cash. 6 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 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):
Six Months Three Months Ended Ended June 30, 1999 June 30, 1999 ----------------- ---------------- Results of operations: Service income......................................... (UK Pound)38,574 (UK Pound)19,582 Operating, selling, general and administrative expenses (27,265) (13,686) Depreciation and amortization.......................... (11,921) (6,017) Operating loss......................................... (612) (121) Net loss............................................... (7,751) (3,728) Company's equity in net loss........................... (3,972) (1,912)
5. Property and Equipment Property and equipment consists of (in (UK Pound)000's):
June 30, December 31, 2000 1999 ----------------- ----------------- (Unaudited) Operating equipment (UK Pound)460,900 (UK Pound)436,117 Other equipment 48,312 39,523 Construction in progress 18,535 4,358 ----------------- ----------------- 527,747 479,998 Accumulated depreciation (116,715) (97,920) ----------------- ----------------- (UK Pound)411,032 (UK Pound)382,078 ================= =================
6. Intangible Assets Intangible assets consist of (in (UK Pound)000's):
June 30, December 31, 2000 1999 ----------------- ----------------- (Unaudited) Goodwill, net of accumulated amortization of (UK Pound)23,458 (2000) and (UK Pound)11,928 (1999)....... (UK Pound)322,441 (UK Pound)333,971 License acquisition costs, net of accumulated amortization of (UK Pound)7,214 (2000) and (UK Pound)3,607 (1999)...... 28,854 32,461 Customer lists, net of accumulated amortization of (UK Pound)5,035 (2000) and (UK Pound)1,616 (1999)......... 27,287 30,706 Other, net of accumulated amortization of (UK Pound)24,008 (2000) (UK Pound)21,168 (1999)............................ 34,355 37,195 ----------------- ----------------- (UK Pound)412,937 (UK Pound)434,333 ================= =================
7 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 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 (Pound) 535.18 million ((UK Pound) 426.5 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 six months ended June 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)66,180 Net loss................................. (53,429) 7. Joint Purchasing Alliance Agreement Other assets includes a deposit of (UK Pound)32.3 million which will be utilized under a Joint Purchasing Alliance Agreement entered into between subsidiaries of the Company and Diamond Cable Communications plc, 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)6.5 million and (UK Pound)3.7 million for the six and three months ended June 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 JUNE 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)74.3 million from July 1, 2000 through June 30, 2001 for capital expenditures and debt service, net of cash from operations. Management believes that the (UK Pound)74.3 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)32.3 million. Subsidiaries of the Company and Diamond Cable Communications plc, 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)29.2 million and (UK Pound)16.9 million for the six months ended June 30, 2000 and 1999, respectively. The increase in net cash provided by operating activities is due to the increase in the Company's operating income before depreciation and amortization and changes in working capital as a result of the timing of receipts and disbursements. Net cash used in investing activities amounted to (UK Pound)14.0 million and (UK Pound)80.1 million for the six months ended June 30, 2000 and 1999, respectively. During the six months ended June 30, 2000, net cash used in investing activities includes capital expenditures of (UK Pound)14.1 million. During the six months ended June 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)28.2 million. Net cash used in financing activities amounted to (UK Pound)915,000 and (UK Pound)1.3 million for the six months ended June 30, 2000 and 1999, respectively, primarily for debt principal payments. 9 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 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 six and three months ended June 30, 2000 and 1999 is as follows (in thousands, "NM" denotes percentage is not meaningful):
Six Months Ended June 30, Increase/(Decrease) 2000 1999 (UK Pound) % ---------------- ---------------- ---------------- --------- Revenue..................................... (UK Pound)77,612 (UK Pound)47,480 (UK Pound)30,132 63.5% Operating, selling, general and administrative expenses................... 60,558 36,032 24,526 68.1 Depreciation and amortization............... 40,092 17,527 22,565 128.7 ---------------- ---------------- Operating loss.............................. (23,038) (6,079) 16,959 279.0 Interest expense............................ (16,977) (15,536) 1,441 9.3 Investment income........................... 798 2,680 (1,882) (70.2) Equity in net loss of affiliate............. - (3,972) (3,972) (100.0) Amalgamation costs.......................... - (145) (145) (100.0) Exchange losses and other................... (22,466) (13,721) 8,745 63.7 ---------------- ---------------- Loss before income taxes.................... (61,683) (36,773) 24,910 67.7 Income tax benefit.......................... 75 - 75 NM ---------------- ---------------- Net loss.................................... (UK Pound)(61,608) (UK Pound)(36,773) (UK Pound)24,835 67.5% ================ ================ Three Months Ended June 30, Increase/(Decrease) 2000 1999 (UK Pound) % ---------------- ---------------- ---------------- --------- Revenue..................................... (UK Pound)38,935 (UK Pound)24,291 (UK Pound)14,644 60.3% Operating, selling, general and administrative expenses................... 32,149 18,090 14,059 77.7 Depreciation and amortization............... 23,339 8,777 14,562 165.9 ---------------- ---------------- Operating loss.............................. (16,553) (2,576) 13,977 542.6 Interest expense............................ (8,840) (7,890) 950 12.0 Investment income........................... 467 976 (509) (52.2) Equity in net loss of affiliate............. - (1,912) (1,912) (100.0) Exchange losses and other................... (15,810) (5,996) 9,814 163.7 ---------------- ---------------- Loss before income taxes.................... (40,736) (17,398) 23,338 134.1 Income tax provision........................ (71) - (71) NM ---------------- ---------------- Net loss.................................... (UK Pound)(40,807) (UK Pound)(17,398) (UK Pound)23,409 134.5% ================ ================
Substantially all of the increases in revenues, operating expenses, selling, general and administrative expenses and depreciation and amortization expense for the six and three months ended June 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. Interest expense for the six and three months ended June 30, 2000 and 1999 was (UK Pound)17.0 million, (UK Pound)15.5 million, (UK Pound)8.8 million and (UK Pound)7.9 million, respectively, representing increases of (UK Pound)1.4 million and (UK Pound)950,000, respectively, from 1999 as 10 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 30, 2000 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 six and three months ended June 30, 2000 and 1999 was (UK Pound)798,000, (UK Pound)2.7 million, (UK Pound)467,000 and (UK Pound)976,000, respectively, representing decreases of (UK Pound)1.9 million and (UK Pound)509,000, 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 six and three months ended June 30, 1999 of (UK Pound)4.0 million and (UK Pound)1.9 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 and other for the six and three months ended June 30, 2000 and 1999 were (UK Pound)22.5 million, (UK Pound)13.7 million, (UK Pound)15.8 million and (UK Pound)6.0 million, respectively, representing increases of (UK Pound)8.7 million and (UK Pound)9.8 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 JUNE 30, 2000 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ------- ---------------------------------------------------------- There have not been any material changes in the reported market risks since the end of the most recent fiscal year. 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 June 30, 2000. 12 NTL (TRIANGLE) LLC AND SUBSIDIARIES FORM 10-Q QUARTER ENDED JUNE 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: August 10, 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: August 10, 2000 By: /s/ David Kelham -------------------------------------- David Kelham (Principal Accounting and Financial Officer and Director of NTL Group Ltd., the sole managing member) on behalf of registrant 13