NTL Incorporated Announces Results for Three and Six Months Ended June 30, 2001; Record EBITDA of -pound- 115 Million Reflects Strong Operational Performance.Business Editors NEW YORK--(BUSINESS WIRE)--July 26, 2001 NTL NTL Nevertheless NTL National Transportation Library NTL Norsk Tjenestemannslag NTL National Training Laboratories NTL Never Too Late NTL Nothing to Lose NTL National Training Laboratory NTL None the Less NTL Number Theory Library Incorporated (NYSE NYSE See: New York Stock Exchange : NLI (1) (Natural Language Interface) An English language interface for database queries. Using inference engines, combined with database interfaces and other tools, an NLI system lets anyone access database information without the need for traditional query tools ; NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on Europe: NTLI)
- Revises 2001 EBITDA guidance upwards by (pound)100 million to
(pound)485 million
- Revises 2002 EBITDA guidance upwards by (pound)125 million to
(pound)950 million
- Provides 2003 EBITDA guidance of (pound)1,575 million
- Current funding sufficient to reach free cash flow at end of 2003
HIGHLIGHTS
- Broadband customers up 74% to 45,750 in Q2 and over 52,000 today
- Digital TV customers up 26% to 951,300; now 41% of total TV
customers
- Overall ARPU increased to (pound)39.36 from (pound)35.68 in Q4
2000
Financial Highlights
----------------------------------------------------------------------
In (pound)millions Q2 Q1 Six Months Q2
2001 2001 2001 2000
--------- -------- ----------- --------
REVENUE
Home (pound)351 (pound)335 (pound)686 (pound)199
Business 139 137 276 110
Broadcast 59 57 115 51
TV Programming 5 5 10 2
NTL Europe 80 80 160 72
----- ----- ----- ----
Total Revenues (pound)634 (pound)614 (pound)1,247 (pound)434
EBITDA (pound)115 (pound)86 (pound)201 (pound)59
- NTL Incorporated (NYSE: NLI; NASDAQ Europe: NTLI) Commenting on the results, Barclay Knapp, President and Chief Executive of NTL said: "We are extremely pleased to be one of a very few companies able to announce both strong current results together with an increasingly positive outlook for the future. We have achieved many of our 2001 annual goals in the first six months, and we are now reaping the benefits. We have improved service levels and lowered churn churn: see butter. in the acquired companies and we now run them as integrated units within NTL: Home and NTL: Business. We have increased revenues through successful price increases and upselling our customers to new services. Digital television and cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. demand is extremely strong, and we achieved an industry first this month with our integrated set top box cable modem. We have lowered the overall capital expenditures while maintaining strong revenue growth - especially through an increased focus on on-net business customers. Our Broadcast and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations are on track and we have completed financings in the first six months that will enable us to reach free cash positive by the end of 2003. In order to achieve these results earlier than projected, we accelerated a number of projects, and the associated fees to our consultants and advisors, resulting in a one-time increase in corporate and other expenses of approximately (pound)12 million. Taken together we can now project these improvements further and with more confidence into the future, resulting in substantial increases to Revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , and net funds flow throw 2003. Congratulations to the team on yet another quarter of flawless execution." BUSINESS REVIEW UK - Consumer Services Consumer Services refers to the formulation, deformulation, technical consulting and testing of most consumer products, such as food, herbs, beverages, vitamins, pharmaceuticals, cosmetics, hair products, household cleaners, [paints, plastics, metals, waxes, coatings, minerals, Residential Services (On-Net) In NTL Home, we have grown our customer base to 2,868,500 during the second quarter by adding approximately 18,700 new customers and increasing RGU's by approximately 59,900 to 4,957,200. We continued to aggressively roll out digital television and now serve over 951,300 customers representing 41% of our total TV customer base at June 30, 2001. Our always-on, high-speed broadband Internet See broadband. subscribers stood at 45,750 at the end of the quarter and over 52,000 today. We are well on our way to meet or exceed our 2001 targets of 1.25 million digital customers and 100,000 cable modem customers. The NTL Home division increased revenues to (pound)351 million ($495m) and EBITDA to (pound)125 million ($176m), with an EBITDA margin of 35.6%. Upselling to existing customers, new digital and cable modem customers, plus the price rises implemented in Q1 and Q2, resulted in ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. increases to (pound)39.36 in the second quarter from (pound)35.68 in Q4 2000. The impact of the price rises will continue throughout 2001 with the full effect on ARPU being realized by the beginning of 2002. Increase in ARPU will also be achieved by bundling additional services with the existing consumer proposition. In May, NTL and Orange signed a Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. to provide mobile services to NTL's residential customers. Under the proposed agreement, NTL will launch a tailor-made mobile service to customers in the final quarter of 2001. On July 2nd, NTL launched broadband access See broadband and wireless broadband. via the set top box in Manchester, believed to be an industry-first worldwide. Weekly installation capacity has been virtually sold out in each of the first three weeks since launch. Seventy-four percent (74%) of these customers self-installed their PC to the STB See set-top box. STB - set-top box cable modem. As of July 25th, over 673,000 NTL homes have an NTL digital cable set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. with an embedded Inserted into. See embedded system. cable modem and therefore require no additional hardware to enjoy download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. speeds of up to 512 kbs. NTL plans to roll out this new easy-access broadband service See broadband and broadband service provider. across the UK throughout the remainder of this year. Our broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). take-up in the UK has been strengthened by NTL and Telewest launching a joint marketing initiative - "Building Broadband Britain" - to jointly promote cable modems nationwide. The campaign will highlight the benefits of cable broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a to customers throughout the UK. In the combined franchises, broadband cable modems are now available in 9 million homes, covering nearly 40% of the UK. This number will increase to over 50% of all UK homes by the end of 2002, representing virtually all of NTL's and Telewest's serviceable ser·vice·a·ble adj. 1. Ready for service; usable: serviceable equipment. 2. Able to give long service; durable: a heavy, serviceable fabric. areas. NTL and Telewest rationalized their pricing, packaging and provisioning to allow customers easy sign-up and installation. The London franchise continues to show integration improvements. The digital TV fault rate is down to 10.8/100 customers/month from an excess of 30/100 per month at the end of Q4 2000. 85% of our customers are now first-time install successes vs. 60% at the commencement of 2001. In line with our stated goal of improving customer service, the call volume to our customer call centers is down to 1.05/customer/month from 1.37/customer/month at the start of the year. Further, the average monthly churn across all our properties in the UK during the second quarter was slightly less than 1.5% per month. NTL Business NTL Business has three main units. Retail Business Markets sells telephone, data and broadband services to the 457,000 business premises in our local broadband footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. . It is estimated that a further 100,000 to 300,000 businesses, out of a total of 1.5 million UK businesses, are located within economic reach of our local broadband or national networks. The retail group has a special focus on the SME market See SMB. , as this segment is particularly underserved by British Telecom The telephone and communications carrier that provides services in Great Britain and Northern Ireland. It used to be a division of the British Post Office, but was privatized in 1984 under Margaret Thatcher's administration. and lacks any other significant competition. Our Managed Network Services business capitalizes on NTL's long history of communications prowess PROWESS Infectious disease A clinical trial–Recombinant Human Activated Protein C [Zovant™] Worldwide Evaluation in Severe Sepsis by building and operating complex communication networks for larger companies, institutions and government entities. The Carrier Services group sells high-margin wholesale capacity to other large carriers from NTL's unique national fiber optic network. Since NTL has the only paired UK and Republic of Ireland fiber optic network, and unparalleled reliability and excess capacity, NTL: Carrier achieves premium pricing Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. for its products in this segment. NTL recently purchased the UK assets and contracts of Viatel UK for (pound)14.5 million. These assets came with existing contracted revenue of approximately (pound)70 million per annum Per annum Yearly. and the purchase will result in a projected capital expenditure saving in excess of the purchase price of the assets. NTL Business growth continues to improve with substantial wins in Q2 across the business. Revenue grew to (pound)139 million (US $195m) and EBITDA improved to (pound)51 million (US $71m). We now have approximately 77,000 customers with 367,000 lines. The forward order book continues to show solid growth and is now (pound)851 million (US $1,200m). Managed Network Services won a two-year (pound)60 million contract with Virgin.net for Virtual ISP An ISP that uses the facilities and services (servers, switches, backbone, etc.) of a large ISP, but retains its own branding for marketing and billing purposes. Virtual ISPs are often formed to target a specific group, whether by location, profession, language or other subject of common provision ("V-ISP"). Virgin has more than 600,000 ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. customers and 1.5 million users. This contract is an extension to the original contract awarded over two years ago and will provide access, core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. and technical contract services. Capitalizing on the experience gained in NTL Home, NTL Retail Business Markets is well placed to bundle products and services together in a unique way for small businesses. `Business Essentials' was launched at the end of 2000 and is a communications package containing telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. , Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and e-mail for less than the price of a standard competitor phone line. Business Essentials Broadband, launched this quarter, will drive affordable broadband take up among the UK's 1.2 million small business customers. Wins in the Retail Business Markets group include Boots, a large UK retail chain, which has signed a network deal worth in excess of (pound)4 million over a three-year period. The large retail fashion chain `Next' will benefit from a new IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. and Local Area Network for its UK corporate headquarters location, following a (pound)800,000 deal with NTL Business. Nottinghamshire NHS Trust National Health Service Trusts (NHS Trusts) provide many services of the National Health Service in England and Wales. They are not trusts in the legal sense but are in effect public sector corporations. has signed a two-year (pound)1.5 million deal with NTL Business. NTL Broadcast NTL Broadcast consists of three main businesses: (1) broadcast transmission services for digital and analogue (electronics) analogue - (US: "analog") A description of a continuously variable signal or a circuit or device designed to handle such signals. The opposite is "discrete" or "digital". television and radio in the UK and Australia, (2) rental of antenna space on the Company's owned and leased towers and sites and the provision of associated services to a variety of carriers operating wireless networks, and (3) satellite and media services for programmers This is a list of programmers notable for their contributions to software, either as original author or architect, or for later additions. See also: Game programmer, List of computer scientists , news agencies, sports broadcasters and production companies including satellite uplink (1) Transmitting from an earth station to a satellite. Contrast with downlink. (2) A port on a network device that is used to connect to another network device rather than a client or server. See MDI port. , studio playout and outside broadcast services. The division continues to benefit from increased demand for its core services. Q2 revenues of (pound)59 million (US $82m) and EBITDA of (pound)30 million (US $42m) reflect the strong steady growth, quarter on quarter, and year over year characteristic of this business. In one of the finest examples of its end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. capabilities, NTL Broadcast has won a (pound)40-million satellite delivery contract from ITV (1) See interactive TV. (2) (iTV) The code name for Apple's video media hub (see Apple TV). - the most popular television channel in the UK. NTL will bring together the outputs of all the regional ITV companies, using its own fiber-optic distribution network, so that they can be `uplinked` together from one of NTL's existing earth stations near Winchester. NTL Broadcast now uplinks 170 full-time television and other services to various satellites. The Radio group continues its success in winning new digital contracts, still achieving 90% market share. In the second quarter a 12-year contract valued at over (pound)20 million was signed with MXR MXR Mixer MXR Munxar (postal locality, Malta) MXR Mail Exchange Record Ltd to provide transmission infrastructure. Second quarter signings also included 12-year contracts with Emap Digital Radio for the Teesside and Central Lancashire Central Lancashire was a designated new town in England. The designated area covers the towns of Preston, Leyland (in South Ribble) and Chorley (in the borough of Chorley). areas, and Score Digital which will provide the only digital radio service to Northern Ireland Northern Ireland: see Ireland, Northern. Northern Ireland Part of the United Kingdom of Great Britain and Northern Ireland occupying the northeastern portion of the island of Ireland. Area: 5,461 sq mi (14,144 sq km). Population (2001): 1,685,267. . Analogue radio continues to provide new opportunities and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. revenues. The national station Classic FM has recently confirmed renewal of its long-standing transmitter A device that generates signals. Contrast with receiver. service contract for a further 12 years. The second quarter also saw a 15-year contract for an entirely new regional service in the West Midlands West Midlands, former metropolitan county, central England. Created in the 1974 local government reorganization, the county embraced the Birmingham conurbation and comprised seven metropolitan districts: Walsall, Wolverhampton, Dudley, Sandwell, Birmingham, Solihull, for Saga Radio. NTL Broadcast has won all fourteen regional transmission contracts that have so far been awarded. Towers & Sites As the UK mobile operators prepare for third-generation (3G) services, site sharing and installations continue to provide healthy income. NTL Broadcast has worked with the mobile network operators to identify key NTL towers that can be connected to the NTL fiber network, and which have spare antenna capacity and good lines of sight. These so-called `hub' sites are needed by the operators to link and control their base-stations. Hutchinson 3G has already committed to using an initial 15 locations. Australia NTL Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. (51% owned by NTL Australia) has secured a 14-year contract to provide digital network services for Prime Television Ltd in the east-coast region of Australia. The total contracted value for NTL Telecommunications is A$50 million ((pound)18m). Australian Broadcasting Corporation The Australian Broadcasting Corporation (ABC) is Australia's national public broadcaster, known previously as the Australian Broadcasting Commission. The ABC provides television, radio and online services throughout metropolitan and regional Australia, as well as (ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. ) has ordered a further 17 analogue TV and three more analogue radio installations. The total value exceeds A$14 million ((pound)5m) over a 10-year contract period. NTL Australia has renegotiated its `outsourcing' contracts resulting in cost savings to NTL in excess of A$10 million ((pound)3.5m) over the next five years. Content and Programming Our content strategy has been three-fold: to launch services where we see a gap in the market and can be a force for innovation (such as offering interactive news through our partnership with ITN ITN n abbr (Brit) (= Independent Television News) → chaîne de télévision commerciale ITN (Brit) n abbr (TV) (= Independent Television News) → ); to invest in the four most popular areas of multi-channel TV (Sport: with British Eurosport, News: through the ITN News Channel, Movies: with Front Row and The Studio and Games: with Two Way TV); and to increase our negotiating position with other major content providers. On July 2, the F.A. Premier League announced that it had signed contracts with NTL, as well as Telewest, ITVDigital and BSkyB to screen 40 pay per view football matches per year for the next three years. In July we also announced that we had reached an agreement with ITV to carry the new ITV Sports channel Sports channels are television specialty channels (usually available exclusively through cable and satellite) broadcast sporting events, usually live, and when not broadcasting events, sports news and other related programming. . It will be available to both analogue and digital television customers. Shared Services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. Shared services encompass Networks, IT, Group Site Services, Finance, Legal and Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. . The shared services division has been aggressively bringing down the cost group-wide. NTL signed a strategic outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. deal with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) on May 24 covering the provisioning of Information Technology (IT) services across the UK and Ireland. NTL and IBM have adopted an innovative menu-driven approach to all services, with prices regularly benchmarked against best-in-class peers. This structure is projected to generate savings for NTL in excess of $450 million over the life of the agreement, and will allow NTL to size its IT needs and resources dynamically to generate further savings and/or competitive advantage over time. Significant cost savings will also be made in other parts of Shared Services. These include reducing Network costs by (pound)45 million per annum commencing in 2002 by realizing efficiencies in areas including fault reduction and increased field force effectiveness; for example by reducing install costs, minimizing truck rolls, and increasing the use of customer self-service. Headcount reductions in Finance, Supply Chain and Human Resources facilitated by the implementation of common IT systems, together with the outsourcing of facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. , will lead to a further (pound)17 million in cost reductions in 2002. NTL Europe NTL Europe consists of wholly-owned Cablecom (Switzerland), the 1G Networks (France) and investment holdings of 32.5% interest in eKabel, the Hessen cable network in Germany, as well as a 25% interest in Svenska Bredbandsbolaget A.B., (B2), a company based in Sweden which is deploying fiber directly to the home in Sweden and Norway. In addition, in the second quarter we closed our 27% minority investment in Noos S.A, the market-leading French broadband company with properties in central Paris, Strasbourg and Cannes. Noos has over 843,000 total customers today as well as 81,000 cable modem subscribers. These transactions have provided NTL with a presence in key European capital The term European capital may refer to:
Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. . As of June 30th 2001 on a gross basis, NTL Europe served over 4.1 million customers and passed over 7.1 million homes, making it a significant player in the consolidating European cable market. NTL Europe reported consolidated revenues of (pound)80 million with EBITDA of (pound)17 million for Q2. During the second quarter, we continued to upgrade the European networks to provide bundled services. In Switzerland, over 79% of the network is now upgraded to digital. In Germany, the upgrade is fully funded and in progress, and Noos is already fully digital with an 860MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. system. 1G continues to upgrade its network and we anticipate that 1G will be combined with Noos by year-end 2001. Finally, B2 is focusing its marketing efforts on areas that have already been upgraded. On the strength of these upgraded networks, NTL Europe continued to see growth for high speed Internet access See how to access the Internet. in Switzerland and France with over 46,000 cable modem subscribers in Cablecom and over 81,000 in Noos. At eKabel, following a successful pilot, high speed Internet, together with interactive services and telephony will be launched under the brand name iesy later this year.
Financial Review
Revenue Summary (in (pound) 000s)
----------------------------------------------------------------------
Q2-2001 Q1-2001 Q4-2000 Q3-2000 Q2-2000
----------------------------------------------------------------------
CONSUMER
On-Net 330,848 312,187 298,592 284,273 192,227
Off-Net 20,187 22,221 22,094 21,030 7,267
------- ------- ------- ------- -------
Total 351,035 334,409 320,686 305,303 199,494
BUSINESS
Direct 83,462 87,480 84,150 78,731 65,860
Wholesale 42,750 37,181 33,975 35,172 32,184
Radcomms 12,342 12,700 12,837 11,714 11,507
------- ------- ------- ------- ------
Total 138,554 137,361 130,962 125,617 109,551
BROADCAST
Towers &
Transmission 49,150 48,153 47,908 46,024 44,209
Satellites 9,470 8,587 8,341 7,535 6,908
------- ------- ------- ------- -------
Total 58,620 56,740 56,249 53,559 51,117
TV PROGRAMMING 5,449 5,108 4,303 1,968 2,073
NTL EUROPE
Cablecom(1) 67,607 67,910 60,883 61,414 60,635
Cablelink 10,349 10,092 11,330 9,668 9,280
1G Networks 2,048 2,026 1,987 2,032 2,051
------- ------- ------- ------- -------
Total 80,004 80,028 74,200 73,114 71,966
TOTAL REVENUE 633,662 613,646 586,400 559,561 434,201
------- ------- ------- ------- -------
EBITDA Summary
(in (pound) 000s)
Q2-2001 Q1-2001 Q4-2000 Q3-2000 Q2-2000
------- ------- ------- ------- -------
CONSUMER
On-Net 119,751 106,865 94,082 83,709 56,693
Off-Net 5,058 3,706 2,396 2,816 (784)
----- ---- ----- ----- -----
Total 124,809 110,571 96,478 86,525 55,909
BUSINESS
Direct 23,679 24,444 24,245 22,441 10,266
Wholesale 24,603 22,034 21,000 20,232 19,754
Radcomms 2,218 1,718 2,054 2,184 1,891
----- ---- ----- ----- -------
Total 50,500 48,196 47,299 44,857 31,911
BROADCAST
Towers
& Transmission 25,187 23,657 20,946 22,979 21,244
Satellites 4,536 3,518 4,536 2,464 3,353
----- ----- ----- ------ ------
Total 29,723 27,175 25,482 25,443 24,597
SHARED SERVICES
Technology
& Networks (46,136) (48,026) (47,175) (43,840) (29,611)
Corporate Support (57,104) (60,004) (54,053) (59,191) (37,397)
-------- -------- -------- -------- --------
Total (103,240) (108,030) (101,228) (103,031) (67,008)
TV PROGRAMMING (3,511) (4,551) (15,396) (11,373) (7,988)
NTL EUROPE
Cablecom 18,067 15,614 16,147 22,650 21,625
Cablelink 1,340 586 1,420 (684) 1,255
1G Networks (2,596) (3,968) (5,434) (2,144) (1,128)
------- ------- ------- ------- --------
Total 16,811 12,232 12,133 19,822 21,752
TOTAL EBITDA 115,092 85,593 64,768 62,243 59,173
------- ------ ------ ------ ------
Financial Outlook for
2001, 2002 and 2003
Financial Outlook
(in millions) 2001E 2002E 2003E
------------------ ------------ ------------ ------------
Revenues (pound)2,600 (pound)3,300 (pound)4,100
EBITDA(1) (pound)485 (pound)950 (pound)1,575
Capital Expenditure (pound)1,300 (pound)925 (pound)900
------------ ------------ ------------
(1) EBITDA excludes corporate expenses of approximately(pound)25
million per annum.
Financing
The Company anticipates that its financing over the remainder of
2001 and 2002 will consist mainly of cash on hand and available bank
lines in the UK, Switzerland and Australia. In the first half of 2001,
we raised or received commitments for approximately (pound)1.3 billion
of additional capital. Whilst a portion of these funds has been used
to reduce commitments to our working capital facility, approximately
(pound)700m of total incremental liquidity has been added to the
Company's resources.
We believe that, based on our financial outlook, we are funded up
to the point where the Company becomes cash flow positive at the end
of 2003. The Company will cover net cash interest by the middle of
2002 and turn free cash flow positive at the end of 2003.
Furthermore, the Company anticipates that before the end of 2001
we will have monetized at least a portion of the broadcast division's
assets and, in preparation for that event, we have retained an
investment adviser to review strategic alternatives. In addition, we
believe that the combination of our wholly owned French cable
operation, 1G, and Noos is imminent. We expect this transaction to
have a positive impact on our liquidity. Finally, we are in the
process of receiving the necessary bank consents to finalize
approximately (pound)220 million of vendor financing and we are
currently evaluating proposals for an additional (pound)200 million.
We expect to see further rapid EBITDA expansion over the next few
quarters accompanied by capital expenditure reductions.
Available Cash
and Bank Facilities
(in (pound)millions) Maximum Line Available
-------------------- -------------- -----------
Current Bank Facilities(2) (pound)4,988 (pound)1,163
Cash and Marketable Securities 643
------------
TOTAL (pound)1,806
(2) Pro Forma for the GE transaction, expected close by the end of
August.
Cash Flow Summary
This chart incorporates our expected financial outlook, the
previously mentioned financing commitments and estimated cash interest
payments for the second half of 2001, 2002 and 2003.
Cash Flows
(in (pound)millions) H2 2001E 2002E 2003E
------------ ------------ -----------
Liquidity
- Start of Period (pound)1,806 (pound)1,132 (pound)292
EBITDA 285 950 1,575
Corporate Expense (13) (25) (25)
Net Cash Interest (396) (840) (937)
Capital
Expenditures/Working Capital (550) (925) (900)
----- ----- -----
Liquidity - End of Period (pound)1,132 (pound)292 (pound)5
------------ ---------- --------
Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 Certain statements contained herein constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 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 the following: 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 (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. , overall market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" 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. 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. There will be a presentation to analysts and investors today at 08:30 EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (13:30 GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) at the Sheraton New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Hotel & Towers. Analysts and investors can dial in to the presentation by calling 888-870-4543 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or +1-706-679-3038 for international access or via a live audio webcast of the conference call on the company's website, www.ntl.com/investors. A slide presentation will also be available at our website during the conference call.
APPENDIX
Western Europe Customer Statistics as of June 30, 2001 (in 000s)
(continued on next page)
(UK) (Ireland) (Swiss) (France) NTL Direct
NTL Cablelink Cablecom 1G Networks Subtotal
------ --------- -------- ----------- ----------
Ownership Interest 100% 100% 100%(1) 100%
Homes in Franchise 11,411.2 420.0 1,900.7 287.0 14,018.9
Homes passed 8,404.1 419.4 1,900.7 266.2 10,990.4
Homes marketed
(Telco) 7,477.6 20.0 - - 7,497.6
Homes marketed
(CATV) 7,701.0 419.4 1,728.0 214.9 10,063.3
Homes marketed
(Ethernet) - - - - -
Customers 2,868.5 374.1 1,569.1 75.7 4,887.4
Single RGU 825.6 370.6 1,522.8 75.5 2,794.5
Dual/Triple RGU 2,042.9 3.5 46.3 0.2 2,092.9
CATV 2,316.2 374.1 1,569.1 75.7 4,335.1
Digital 951.3 - 37.7 1.6 990.6
Analog 1,364.9 374.1 1,531.4 74.1 3,344.5
Telephone (Direct) 2,595.2 3.5 - - 2,598.7
Broadband Internet 45.8 - 46.3 0.2 92.3
RGUs 4,957.2 377.6 1,615.4 75.9 7,026.1
Internet Subscribers 2,060.3 - 200.9 0.2 2,261.4
Wholesale 1,133.0 - 1,133.0
ntlworld 622.6 622.6
Telephone (Indirect) 396.6 - - - 396.6
Residential
Customers 4,398.1 374.1 1,569.1 75.7 6,417.0
Residential
Services 7,368.3 377.6 1,770.0 75.9 9,591.8
Business Customers 76.0 1.0 3.4 - 80.4
Penetration
CATV 30.1% 89.2% 90.8% 35.2% 43.1%
Telephone 34.7% nm na na 34.7%
Customer 37.2% 89.2% 90.8% 35.2% 48.6%
RGU 64.4% 90.0% 93.5% 35.3% 69.8%
Dual/Triple 71.2% 0.9% 3.0% 0.3% 42.8%
===== ===== ===== ===== =====
(1) Cablecom owns portions of 28 cable systems in Switzerland. The
following statistics reflect the proportional operating data in
which Cablecom does not maintain an equity interest: 190,600 homes
passed, 162,600 homes marketed, 153,300 subscribers and 700
broadband Internet subscribers.
Western Europe Customer Statistics as of June 30, 2001 (in 000s)
(continued from prior page)
(Paris) (Frankfurt) (Stockholm) Equity Gross
Noos eKabel(2) B2 Total Total
------- ----------- ----------- ------ ------
Ownership Interest 27% 32.5% 25%
Homes in
Franchise 3,179.0 2,800.0 303.1 15,672.4 20,301.0
Homes passed 2,563.0 1,828.0 184.0 12,131.9 15,565.4
Homes marketed (Telco) 1.0 - - 7,497.9 7,498.6
Homes marketed
(CATV) 2,563.0 1,828.0 - 11,186.8 14,454.3
Homes marketed
(Ethernet) - - 136.0 34.0 136.0
Customers 806.1 1,294.0 32.1 5,380.3 7,019.6
Single RGU 745.1 1,294.0 32.1 3,271.7 4,865.7
Dual/Triple RGU 61.0 - - 2,108.7 2,153.9
CATV 784.4 1,294.0 - 4,814.1 6,413.5
Digital 279.8 - - 1,064.4 1,270.4
Analog 504.6 1,294.0 - 3,749.7 5,143.1
Telephone (Direct) 2.5 - - 2,599.4 2,601.2
Broadband Internet 81.8 - 32.1 121.7 206.2
RGUs 868.7 1,294.0 32.1 7,535.2 9,220.9
Internet Subscribers 81.8 - 32.1 2,290.8 2,375.3
Wholesale - 1,133.0 1,133.0
ntlworld - 622.6 622.6
Telephone (Indirect) - - - 396.6 396.6
Residential
Customers 806.1 1,294.0 32.1 6,909.9 8,549.2
Residential
Services 868.7 1,294.0 32.1 10,100.9 11,786.6
Business Customers 37.3 - - 90.5 117.7
Penetration
CATV 30.6% 70.8% na 43.0% 44.4%
Telephone na na na 34.7% 34.7%
Customer 31.5% 70.8% 23.6% 48.1% 48.6%
RGU 33.9% 70.8% 23.6% 67.4% 63.8%
Dual/Triple 7.6% 0.0% 0.0% 39.2% 30.7%
===== ===== ===== ===== =====
(2) Data as of December 31, 2000.
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