NTL TRIANGLE LLC - 10-Q Quarterly Report


(X)		Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended:

		SEPTEMBER 30, 2003
		OR

( )		Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from to .

NTL House, Bartley Wood Business Park, Hook,
Hampshire, RG27 9UP, England
011 44 1256 752000

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 ( )

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ( ) No (X)

As of September 30, 2003, 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 membership interests. The Registrant meets the conditions set forth in General Instructions H(1)(a) and H(1)(b) of Form 10-Q and is filing this form with the reduced disclosure format set forth in General Instruction H(2) thereto.


			Page
			Number

PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets as of September 30, 2003 (Unaudited) and December 31, 2002		1
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2003 and 2002 (Unaudited)		2
		Condensed Consolidated Statement of Member’s Capital for the Nine Months Ended September 30, 2003 (Unaudited)		3
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002 (Unaudited)		4
		Notes to Condensed Consolidated Financial Statements (Unaudited)		5
	Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition		9
	Item 4.	Controls and Procedures		18

PART II	OTHER INFORMATION
	Item 5.	Other Information		19
	Item 6.	Exhibits and Reports on Form 8-K		20
	SIGNATURES			21

CONDENSED CONSOLIDATED BALANCE SHEETS
(in £’000s, except member’s interests data)


			September 30,			December 31,
			2003			2002

			(Unaudited)			(See Note)
Assets
Current assets
	Cash and cash equivalents			£26,274			£18,154
	Accounts receivable, less allowance for doubtful accounts of £11,244 (2003) and £10,738 (2002)			20,621			21,812
	Other current assets			1,221			1,998

		Total current assets		48,116			41,964
Deferred financing costs, net of accumulated amortization of £28,958 (2003) and £25,823 (2002)				10,640			13,775
Fixed assets, net				429,478			444,680
Intangible assets, net				10,442			16,702

Total assets				£498,676			£517,121

Liabilities and member’s capital
Current liabilities
	Accounts payable and accrued expenses			£29,580			£31,667
	Interest payable			13,073			4,500
	Deferred revenue			16,291			14,757
	Due to affiliates			11,799			28,874
	Current portion of long-term debt			550			323,628

		Total current liabilities		71,293			403,426
Loans from affiliate				80,922			75,197
Long-term debt, less current portion				312,493			—
Commitments and contingent liabilities
Deferred income taxes				2,646			382
Member’s capital
	Common membership interests, £.01 par value — authorized and issued 800,000 interests			8			8
	Additional capital			511,263			493,537
	Accumulated other comprehensive (loss) income			(637	)		909
	Accumulated deficit			(479,312	)		(456,338	)

		Total member’s capital		31,322			38,116

Total liabilities and member’s capital				£498,676			£517,121

Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date. See accompanying notes.


		Three months ended						Nine months ended
		September 30,						September 30,

		2003			2002			2003			2002

Revenue			£54,217			£48,968			£161,145			£144,653

Costs and expenses
	Operating costs (exclusive of depreciation shown below)		(19,194	)		(22,578	)		(63,699	)		(67,306	)
	Selling, general and administrative expenses		(16,476	)		(15,267	)		(50,405	)		(47,258	)
	Other charges		(37	)		(2,198	)		(1,085	)		(3,324	)
	Depreciation		(13,672	)		(16,170	)		(41,122	)		(41,544	)
	Amortization		(2,098	)		(2,081	)		(6,260	)		(6,242	)

			(51,477	)		(58,294	)		(162,571	)		(165,674	)

Operating income (loss)			2,740			(9,326	)		(1,426	)		(21,021	)
Other income (expense)
	Interest expense		(10,081	)		(10,451	)		(30,235	)		(32,707	)
	Interest expense to affiliate		(760	)		(797	)		(2,226	)		(2,330	)
	Interest income		170			309			457			1,016
	Losses on disposal of fixed assets		—			(145	)		—			(145	)
	Exchange gains		2,058			9,101			10,701			26,762

			(8,613	)		(1,983	)		(21,303	)		(7,404	)

(Loss) before income taxes			(5,873	)		(11,309	)		(22,729	)		(28,425	)
Income tax (expense) benefit			(93	)		710			(245	)		873

Net (loss)			(£5,966	)		(£10,599	)		(£22,974	)		(£27,552	)


											Accumulated
		Common						Compre-			other
		membership				Additional		hensive			comprehensive			Accumulated
		interests		Par		capital		loss			income (loss)			deficit			Total

Balance at December 31, 2002			800		£8		£493,537					£909			(£456,338	)		£38,116
Capital contributed by member							17,726											17,726
Net loss									(£22,974	)					(22,974	)		(22,974	)
Currency translation adjustment									(1,546	)		(1,546	)					(1,546	)

	Comprehensive loss								(£24,520	)

Balance at September 30, 2003			800		£8		£511,263					(£637	)		(£479,312	)		£31,322


			Nine months ended
			September 30,

			2003			2002

Net cash provided by operating activities				£8,181			£19,985

Investing activities
	Purchases of fixed assets			(17,840	)		(27,335	)

		Net cash used in investing activities		(17,840	)		(27,335	)

Financing activities
	Loans from affiliate			—			2,757
	Capital contributed by member			17,726			—
	Principal payments			(441	)		(841	)

		Net cash provided by financing activities		17,285			1,916

Effect of exchange rate changes on cash and cash equivalents				494			49

Increase (decrease) in cash and cash equivalents				8,120			(5,385	)
Cash and cash equivalents, beginning of period				18,154			34,927

Cash and cash equivalents, end of period				£26,274			£29,542

Supplemental disclosure of cash flow information
	Cash paid during the period for interest			£18,032			£22,481

We are a limited liability company established under the laws of the State of Delaware. We are the holding company of subsidiaries that offer broadband and communications services providing telephone, cable television and Internet services to the home, as well as data, voice and Internet services to businesses in the Republic of Ireland and in the East Anglia and North Eastern regions of the UK. These interests are held through our subsidiaries Cambridge Holding Company Limited and ntl Communications (Ireland) Limited. We are a wholly owned subsidiary of NTL Incorporated, or NTL, and are reliant upon the support of NTL and its subsidiaries to continue our operations.

On May 8, 2002, NTL, NTL Europe, Inc. (formerly NTL Incorporated) and certain of their subsidiaries filed a pre-arranged joint reorganization plan under Chapter 11 of the US Bankruptcy Code. We were not included in the Chapter 11 filing, nor were the operating subsidiaries of NTL and NTL Europe. The Plan became effective on January 10, 2003, at which time NTL emerged from Chapter 11 reorganization.

We have prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States 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 our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Our operating results for the three and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K as amended for the year ended December 31, 2002.

Certain prior period amounts have been reclassified to conform to the current presentation.

In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This statement is effective for contracts entered into or modified after June 30, 2003. The adoption of this statement did not have a significant effect on our results of operations, financial condition or cash flows.

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” which requires variable interest entities to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 become effective for us during the fourth quarter of 2003. The implementation of this interpretation is not expected to have a significant effect on our results of operations, financial condition or cash flows.

In November 2002, the Emerging Issues Task Force reached a consensus on EITF No. 00-21, “Revenue Arrangements with Multiple Deliverables”. EITF 00-21 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. The provisions of EITF 00-21 will apply to

revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF 00-21 did not have a significant effect on our results of operations, financial condition or cash flows.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 replaced EITF Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. SFAS No. 146 requires that a liability for costs associated with an exit or disposal activity is recognized when the liability is incurred. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of this standard did not have a significant effect on our results of operations, financial condition or cash flows.

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” effective for us on January 1, 2003. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible fixed assets and the associated asset retirement costs. The adoption of this standard has not had a significant impact on our results of operations, financial condition or cash flows.

Consolidated comprehensive income (loss) includes net loss as well as other comprehensive income (loss). Our other comprehensive income (loss) consists of changes in cumulative translation adjustment. Consolidated comprehensive income (loss) consists of (in £’000s) (unaudited):


	Three months ended						Nine months ended
	September 30,						September 30,

	2003			2002			2003			2002

Net (loss)		(£5,966	)		(£10,599	)		(£22,974	)		(£27,552	)
Foreign currency translation adjustments		(428	)		(699	)		(1,546	)		785

Comprehensive (loss)		(£6,394	)		(£11,298	)		(£24,520	)		(£26,767	)


	Estimated	September 30,			December 31,
	Useful Life	2003			2002

		(unaudited)
Operating equipment	3-40 years		£666,266			£631,848
Other equipment	3-50 years		63,763			61,228
Construction in progress			6,631			13,053

			736,660			706,129
Accumulated depreciation			(307,182	)		(261,449	)

			£429,478			£444,680

We are currently evaluating the remaining useful economic lives of our fixed assets. We expect to adopt new lives when the evaluation is completed. At this time, we have not yet quantified the likely impact on our depreciation charge upon the adoption of new lives.


	September 30,		December 31,
	2003		2002

	(unaudited)
Intangible assets not subject to amortization:
Goodwill		£94		£94
Intangible assets subject to amortization:
Customer lists, net of accumulated amortization of £27,189 (2003) and £22,055 (2002)		5,133		10,267
Other, net of accumulated amortization of £13,295 (2003) and £12,167 (2002)		5,215


PART I. FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		CONDENSED CONSOLIDATED STATEMENT OF MEMBER’S CAPITAL
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
	ITEM 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
	SIGNATURES

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents


Delaware (State or other jurisdiction of incorporation or organization)		13-4086747 (I.R.S. Employer Identification No.)