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: |
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 |
Commission File Number 33-83740
DIAMOND CABLE COMMUNICATIONS LIMITED
(Exact name of registrant as specified in its charter)
| England and Wales | N/A | |
|
|
||
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
NTL House, Bartley Wood Business Park, Hook,
Hampshire, RG27 9UP, England
011 44 1256 752000
(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 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ]
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 59,138,852 shares of the Registrant’s Ordinary Shares of 2.5 pence each outstanding. The Registrant is a wholly owned subsidiary of NTL Incorporated and there is no market for the Registrant’s shares.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ x ] No [ ]
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
INDEX
| 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 Three and
Nine Months Ended September 30, 2003 and 2002 and January 1,
2003 (Unaudited) |
2 | |||||
Condensed Consolidated Statement of Shareholder’s Equity
(Deficiency) 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 and January 1, 2003
(Unaudited) |
4 | |||||
Notes to the Condensed Consolidated Financial Statements
(Unaudited) |
5 | |||||
Item 2. Management’s Discussion and Analysis of Results of
Operations and Financial Condition |
18 | |||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
28 | |||||
Item 4. Controls and Procedures |
29 | |||||
PART II. OTHER INFORMATION |
||||||
Item 5. Other Information |
30 | |||||
Item 6. Exhibits and Reports on Form 8-K |
31 | |||||
SIGNATURES |
32 | |||||
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(in £’000s)
| September 30, | December 31, | |||||||||||
| 2003 | 2002 | |||||||||||
| Reorganized | Predecessor | |||||||||||
| company | company | |||||||||||
| (Unaudited) | (See Note) | |||||||||||
Assets |
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents |
£3,265 | £12,168 | ||||||||||
Accounts receivable, less allowance for doubtful accounts
of £1,665 (2003) and £2,847 (2002) |
16,482 | 15,952 | ||||||||||
Other current assets |
266 | 498 | ||||||||||
Total current assets |
20,013 | 28,618 | ||||||||||
Fixed assets, net |
349,488 | 486,142 | ||||||||||
Deferred financing costs, net of accumulated amortization
of £695 (2003) and £15,468 (2002) |
2,997 | 9,684 | ||||||||||
Goodwill |
— | 66,647 | ||||||||||
Franchise costs |
— | 316 | ||||||||||
Customer list, net of accumulated amortization of £9,421 (2003) |
57,140 | — | ||||||||||
Reorganization value in excess of amounts allocable to
identifiable assets |
79,262 | — | ||||||||||
Total assets |
£508,900 | £591,407 | ||||||||||
Liabilities and shareholder’s equity (deficiency) |
||||||||||||
Current liabilities |
||||||||||||
Accrued expenses |
£8,150 | £10,542 | ||||||||||
Interest payable |
3,256 | — | ||||||||||
Deferred revenue |
4,929 | 4,525 | ||||||||||
Due to affiliates |
14,019 | 30,655 | ||||||||||
Current portion of long-term debt |
252 | 1,960 | ||||||||||
Total current liabilities |
30,606 | 47,682 | ||||||||||
Liabilities subject to compromise |
— | 1,029,422 | ||||||||||
Long-term debt, less current portion |
162,760 | — | ||||||||||
Loan from affiliates |
19,607 | — | ||||||||||
Deferred income taxes |
921 | 921 | ||||||||||
Commitments and contingent liabilities |
||||||||||||
Shareholder’s equity (deficiency) |
||||||||||||
Ordinary shares of 2.5p each: 150,000,060 authorized; |
||||||||||||
59,138,852 (2003) and 59,138,851 (2002) issued and outstanding |
1,478 | 1,478 | ||||||||||
Additional paid-in capital |
350,288 | 317,506 | ||||||||||
Accumulated deficit |
(56,760 | ) | (805,602 | ) | ||||||||
Total shareholder’s equity (deficiency) |
295,006 | (486,618 | ) | |||||||||
Total liabilities and shareholder’s equity (deficiency) |
£508,900 | £591,407 | ||||||||||
Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date. See accompanying notes.
1
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in £’000s)
| Three months ended | Nine months ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||||||
| Reorganized | Predecessor | Reorganized | Predecessor | ||||||||||||||||||||
| company | company | company | company | ||||||||||||||||||||
Revenue |
£46,659 | £42,965 | £138,114 | £133,161 | |||||||||||||||||||
Costs and expenses |
|||||||||||||||||||||||
Operating costs (exclusive of depreciation
shown below) |
(19,748 | ) | (21,354 | ) | (60,885 | ) | (66,290 | ) | |||||||||||||||
Selling, general and administrative
expenses |
(14,519 | ) | (13,698 | ) | (43,524 | ) | (42,087 | ) | |||||||||||||||
Other charges |
(69 | ) | (2,926 | ) | (847 | ) | (2,956 | ) | |||||||||||||||
Depreciation |
(11,839 | ) | (14,873 | ) | (34,685 | ) | (45,938 | ) | |||||||||||||||
Amortization |
(3,141 | ) | — | (9,421 | ) | — | |||||||||||||||||
| (49,316 | ) | (52,851 | ) | (149,362 | ) | (157,271 | ) | ||||||||||||||||
Operating loss |
(2,657 | ) | (9,886 | ) | (11,248 | ) | (24,110 | ) | |||||||||||||||
Other income (expense) |
|||||||||||||||||||||||
Interest expense and amortization of
debt discount and expenses |
(7,472 | ) | (5,841 | ) | (22,428 | ) | (53,819 | ) | |||||||||||||||
Interest expense to affiliate |
(332 | ) | — | (29,811 | ) | — | |||||||||||||||||
Interest income |
45 | 164 | 110 | 345 | |||||||||||||||||||
Exchange gains |
508 | 26,161 | 6,617 | 69,558 | |||||||||||||||||||
| (7,251 | ) | 20,484 | (45,512 | ) | 16,084 | ||||||||||||||||||
Net (loss) income |
(£9,908 | ) | £10,598 | (£56,760 | ) | (£8,026 | ) | ||||||||||||||||
| January 1, | ||||
| 2003 | ||||
| Predecessor | ||||
| company | ||||
Interest expense to affiliate |
(£59,850 | ) | ||
Fresh-start adoption — intangible assets |
78,860 | |||
Fresh-start adoption — long-term debt |
723,533 | |||
Fresh-start adoption — fixed assets |
(113,965 | ) | ||
Net income |
£628,578 | |||
See accompanying notes.
2
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY (DEFICIENCY)
(Unaudited)
(in £’000s except number of shares)
| Compre- | ||||||||||||||||||||||||
| Additional | hensive | |||||||||||||||||||||||
| Ordinary | paid-in | income | Accumulated | |||||||||||||||||||||
| shares | Par | capital | (loss) | deficit | Total | |||||||||||||||||||
Predecessor company |
||||||||||||||||||||||||
Balance at December 31,
2002 |
59,138,851 | £1,478 | £317,506 | (£805,602 | ) | (£486,618 | ) | |||||||||||||||||
Net income |
£628,578 | 628,578 | 628,578 | |||||||||||||||||||||
Exit transactions |
1 | — | 14,380 | — | 14,380 | |||||||||||||||||||
Fresh start adjustment |
— | — | (177,024 | ) | 177,024 | — | ||||||||||||||||||
Reorganized company |
||||||||||||||||||||||||
Balance at January 1, 2003 |
59,138,852 | 1,478 | 154,862 | — | 156,340 | |||||||||||||||||||
Release of debt obligations |
— | — | 195,426 | — | 195,426 | |||||||||||||||||||
Net loss |
(£56,760 | ) | (56,760 | ) | (56,760 | ) | ||||||||||||||||||
Balance at September 30,
2003 |
59,138,852 | £1,478 | £350,288 | (£56,760 | ) | £295,006 | ||||||||||||||||||
See accompanying notes.
3
DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in £’000s)
| Nine months ended | ||||||||||||
| September 30, | ||||||||||||
| 2003 | 2002 | |||||||||||
| Reorganized | Predecessor | |||||||||||
| company | company | |||||||||||
Net cash (used in) provided by operating activities |
(£16,166 | ) | £12,976 | |||||||||
Investing activities |
||||||||||||
Purchases of fixed assets |
(12,528 | ) | (16,717 | ) | ||||||||
Proceeds from disposition of fixed assets |
— | 31 | ||||||||||
Net
cash used in investing activities |
(12,528 | ) | (16,686 | ) | ||||||||
Financing activities |
||||||||||||
Principal payments |
(132 | ) | (218 | ) | ||||||||
Capital lease payments |
— | (476 | ) | |||||||||
Loans from affiliate |
19,923 | 12,961 | ||||||||||
Contributions from NTL Communications Corp. |
— | 140 | ||||||||||
Net cash provided by financing activities |
19,791 | 12,407 | ||||||||||
(Decrease) increase in cash and cash equivalents |
(8,903 | ) | 8,697 | |||||||||
Cash and cash equivalents, beginning of period |
12,168 | 4,535 | ||||||||||
Cash and cash equivalents, end of period |
£3,265 | £13,232 | ||||||||||
Supplemental disclosure of cash flow information |
||||||||||||
Cash paid during the period for interest |
£30,143 | £23,598 | ||||||||||