UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K/AAmendment No. 1

|(Mark One)                                  |                                                                                         
|------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                           | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended December 31, 2004
|OR                                         
|o                                           | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period from
 to         

Commission File No. 000-22616

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NTL Incorporated(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization)                 |  | 52-1822078(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------- |  | ----------------------------------------------
|909 Third Avenue, Suite 2863 New York, New York(Address of Principal Executive Office) |  | 10022(Zip Code)                               
|(212) 906-8440(Registrant's telephone number, including area code)                    

Securities registered pursuant to Section 12(g) of the Act:

Common
Stock, par value $0.01 per share

Warrants
to purchase shares of Common Stock

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 ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. o

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

The aggregate market value of the registrant's voting stock held by non-affiliates as of June 30, 2004, based on the closing price for the
registrant's common stock on the Nasdaq National Market on such date, was $4,363,146,929.

As
of March 11, 2005, there were 87,741,486 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding, excluding shares of the registrant's
common stock issuable upon the exercise of Series A Warrants to purchase 10,313,158 shares of the registrant's common stock.

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 ý    No o

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders are incorporated by reference into Part III.



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EXPLANATORY NOTE

This Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 adds an additional footnote to our financial statements.
This additional footnote, "21. Condensed consolidated financial information," contains condensed consolidated financial information on a combined basis about:



This
footnote was not required in our Annual Report on Form 10-K when originally filed. We will be filing a registration statement with respect to an exchange of the
above-referenced privately-placed notes for notes registered with the Securities and Exchange Commission. This footnote will be required for purposes of that registration
statement. Except for the correction of typographical errors and the renumbering as footnote 22 of the original footnote 21, "Reorganization and Emergence from Chapter 11,"
appearing in our original Form 10-K filing, our financial statements are unchanged.

No
other information in our Form 10-K has been updated since the original filing date of March 16, 2005.

1

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NTL INCORPORATED AND SUBSIDIARIES  FORM 10-K/A  FOR THE YEAR ENDED DECEMBER 31, 2004        TABLE OF CONTENTS

|                                                                             |  |                                            |  | Page
|---------------------------------------------------------------------------- |  | ------------------------------------------ |  | ----
|PART IV                                                                      |  |                                            |  |     
|Item 15.                                                                     |  | Exhibits and Financial Statement Schedules |  | 3   
|SIGNATURES                                                                   |  | 9                                         
|Index to Consolidated Financial Statements and Financial Statement Schedules |  | F-1                                       

2

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PART IV

Item 15.    Exhibits and Financial Statement Schedules

3

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EXHIBIT INDEX

|Exhibit No. |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Agreement and Plan of Merger, dated as of February 9, 2000, by and among NTL Incorporated (now NTL Europe, Inc.), NTL Holdings Incorporated (now NTL (Delaware), Inc.) and Holdings Merger Sub Inc. (Incorporated by
reference to Exhibit 2.1 to Amendment No. 1 to the Registration Statement on Form S-3/A filed by NTL (Delaware), Inc. and NTL Incorporated on July 14, 2000, File No. 333-36434)       
|2.2         |  | Agreement and Plan of Merger, dated as of March 26, 1999, by and among NTL Incorporated (now NTL (Delaware), Inc.), NTL Communications Corp. (now NTL Incorporated) and NTL Mergerco, Inc. (Incorporated by reference to Exhibit 2.1 to Amendment No. 2 to
The Registration Statement on Form S-3/A filed by NTL Incorporated and NTL Communications Corp. on June 3, 1999, File No. 333-72335)             
|2.3         |  | Share Exchange Agreement, dated as of June 16, 1998, as amended, by and among NTL Incorporated and the shareholders of Diamond Cable Communications Limited (Incorporated by reference to Annex A to the Proxy Statement filed by NTL Incorporated on
January 29, 1999, File No. 000-22616)                                                                                                                 
|2.4         |  | Amendment No. 1 to Share Exchange Agreement, dated as of December 21, 1998, by and among NTL Incorporated and the shareholders of Diamond Cable Communications Limited (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed
by NTL Incorporated on December 23, 1998, File No. 000-22616)                                                                                     
|2.5         |  | Restated Transaction Agreement, dated as of July 26, 1999, by and among Bell Atlantic Corporation, Cable and Wireless PLC, Cable & Wireless Communications PLC and NTL Incorporated (Incorporated by reference to Annex J to the Proxy Statement filed
by NTL Incorporated on February 11, 2000, File No. 000-25691)                                                                                        
|2.6         |  | Second Amended Joint Plan of Reorganization Plan of NTL Incorporated and Certain Subsidiaries, dated July 15, 2002 (as subsequently modified) (Incorporated by reference to Exhibit 2.8 of NTL Incorporated's Registration Statement on Form S-1, filed on
February 12, 2003 as amended on June 28, 2003 (File No. 333-103135)                                                                              
|2.7         |  | Master Agreement relating to National Transcommunications Limited and NTL Digital Limited among NTL Group Limited, NTL (Chichester) Limited, NTL Digital Ventures Limited, Macquarie U.K. Broadcast Limited and Macquarie U.K. Broadcast Holdings Limited,
dated 1 December 2004 (Incorporated by reference to Exhibit 2.10 to the Current Report on Form 8-K filed on February 3, 2005, File No. 000-22616)
|2.8         |  | Deed of Variation to the Master Agreement among NTL Group Limited, NTL (Chichester) Limited, NTL Digital Ventures Limited, Macquarie U.K. Broadcast Limited and Macquarie U.K. Broadcast Holdings Limited, dated 23 December 2005 (Incorporated by
reference to Exhibit 2.11 to the Current Report on Form 8-K on February 3, 2005, File No. 000-22616)                                                     
|2.9         |  | Second Deed of Variation to the Master Agreement among NTL Group Limited, NTL (Chichester) Limited, NTL Digital Ventures Limited, Macquarie U.K. Broadcast Limited and Macquarie U.K. Broadcast Holdings Limited, dated 27 January 2005 (Incorporated by
reference to Exhibit 2.12 to the Current Report on Form 8-K on February 3, 2005, File No. 000-22616)                                               
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                             

4

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|2.10 |  | Third Deed of Variation to the Master Agreement among NTL Group Limited, NTL (Chichester) Limited, NTL Digital Ventures Limited, Macquarie U.K. Broadcast Limited and Macquarie U.K. Broadcast Holdings Limited, dated 31 January 2005 (Incorporated by
reference to Exhibit 2.13 to the Current Report on Form 8-K filed on February 3, 2005, File No. 000-22616)                              
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.11 |  | Deed of Accession and Adherence to the Master Agreement among NTL Group Limited, NTL (Chichester) Limited, NTL Digital Ventures Limited, Macquarie U.K. Broadcast Limited, Macquarie U.K. Broadcast Holdings Limited and NTL Ventures Limited, dated 27
January 2005 (Incorporated by reference to Exhibit 2.14 to the Current Report on Form 8-K filed on February 3, 2005, File No. 000-22616)
|3.1  |  | Amended and Restated Certificate of Incorporation of NTL Communications Corp. (now NTL Incorporated) (Incorporated by reference to Exhibit 1 to the Registration Statement on Form 8-A filed on January 10, 2003, File No. 000-22616)                                                                                                                                                           
|3.2  |  | Amended and Restated By-Laws of NTL Incorporated (as of November 4, 2004), (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on November 10, 2004, File No. 000-22616)                                                                                                                                                                                          
|4.1  |  | Equity Registration Rights Agreement, dated as of January 10, 2003, by and among NTL Incorporated and the stockholders listed on the signature pages thereto (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on January
10, 2003, File No. 000-22616)                                                                                                         
|4.2  |  | Exchange and Registration Rights Agreement, dated as of January 9, 2003, by and among NTL Incorporated, the Guarantors listed on the signature pages thereto and the initial purchasers of the Notes listed on the signature pages thereto (Incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on January 10, 2003, File No. 000-22616)                           
|4.3  |  | Registration Rights Agreement, dated as of September 26, 2003, between NTL Incorporated and W.R. Huff Asset Management Co., L.L.C. (Incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                    
|4.4  |  | Registration Rights Agreement, dated as of September 26, 2003, between NTL Incorporated and Franklin Mutual Advisers, LLC on behalf of and in its capacity as agent and investment manager for various holders (Incorporated by reference to Exhibit 4.4
to the Registration Statement on Form S-1, File No. 333-109194)                                                                        
|4.5  |  | Registration Rights Agreement, dated as of September 26, 2003, between NTL Incorporated and Oaktree Capital Management, LLC on behalf of and in its capacity as the general partner or investment manager of certain funds and accounts it manages
(Incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-1, File No. 333-109194)                                    
|4.6  |  | Participating Purchaser Agreement, dated as of September 26, 2003, between NTL Incorporated and W.R. Huff Asset Management Co., L.L.C. (Incorporated by reference to Exhibit 4.15 to the Registration Statement on Form S-1,
File No. 333-109194)                                                                                                                                               
|4.7  |  | Participating Purchaser Agreement, dated as of September 26, 2003, between NTL Incorporated and Franklin Mutual Advisers, LLC (Incorporated by reference to Exhibit 4.16 to the Registration Statement on Form S-1,
File No. 333-109194)                                                                                                                                                        
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                 

5

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|4.8    |  | Series A Warrant Agreement, dated as of January 10, 2003, by and between NTL Incorporated and Continental Stock Transfer & Trust Company, as Warrant Agent (Incorporated by reference to Exhibit 3 to the Registration Statement on Form 8-A filed on
January 10, 2003, File No. 000-22616)                                                                                        
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.9    |  | Rights Agreement, dated as of January 10, 2003, by and between NTL Incorporated and Continental Stock Transfer & Trust Company, as Rights Agent (Incorporated by reference to Exhibit 4 to the Registration Statement on Form 8-A filed on January 10,
2003, File No. 000-22616)                                                                                                   
|4.10   |  | Amendment to Rights Agreement, dated as of September 26, 2003, by and between NTL Incorporated and Continental Stock Transfer & Trust Company, as Rights Agent (Incorporated by reference to Exhibit 4.12 to the Registration Statement on Form S-1,
File No. 333-109194)                                                                                                          
|4.11   |  | Amendment to Rights Agreement, dated as of March 16, 2004, by and between NTL Incorporated and Continental Stock Transfer & Trust Company, as Rights Agent (Incorporated by reference to Exhibit 99.1 to the Form 8A/A filed by NTL
Incorporated on March 16, 2004, File No. 000-22616)                                                                                            
|4.12   |  | Indenture, dated as of April 13, 2004, by and among NTL Cable PLC, the Guarantors listed on the signature pages thereto and the Bank of New York, as Trustee (Incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed on April
20, 2004, File No. 000-22616).                                                                                            
|4.13** |  | Exchange and Registration Rights Agreement, dated as of April 13, 2004, by and among NTL Cable PLC, the Guarantors listed on the signature pages thereto and the Initial Purchasers listed in the signature pages thereto.                                                                                                                                                         
|10.1   |  | Tax Sharing Agreement, dated January 10, 2003, by and between NTL Europe, Inc. and its affiliates, and NTL Incorporated (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by NTL Incorporated on January 10, 2003, File
No. 000-22616)                                                                                                            
|10.2   |  | Demerger Agreement, dated January 10, 2003, by and between NTL Europe, Inc. and NTL Incorporated (Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by NTL Incorporated on January 10, 2003, File No. 000-22616)                                                                                                                                   
|10.3   |  | Form of 2003 Stock Option Plan of NTL Incorporated (Incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-1 filed by NTL Incorporated on February 12, 2003, File No. 333-103135)                                                                                                                                                                       
|10.4   |  | Summary Terms of NTL Group 2003 Bonus Scheme (Incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                                                                                            
|10.5   |  | Framework Agreement For The Provision of IT Outsourcing Services, dated as of May 23, 2001, by and between NTL Group Limited and IBM U.K. Limited (Incorporated by reference to Exhibit 10.9 to the 2001 Annual Report on Form 10-K, filed by NTL
Incorporated on April 16, 2001, File No. 0-30673)                                                                                
|10.6   |  | Amendment, dated as of April 5, 2002 to the Framework Agreement For The Provision of IT Outsourcing Services, dated as of May 23, 2001, by and between NTL Group Limited IBM U.K. Limited and IBM U.K. Financial Services Limited (Incorporated by
reference to Exhibit 10.10 to the 2001 Annual Report on Form 10-K filed by NTL Incorporated on April 16, 2001, File No. 0-30673)
|       |  |                                                                                                                                                                                                                                                                                                                                                                                    

6

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|10.7    |  | Amendment, dated as of September 30, 2003 to Framework Agreement for the Provision of IT Outsourcing Services, dated as of May 23, 2001, by and among NTL Group Limited, IBM U.K. Limited and IBM U.K. Financial Services Limited (Incorporated by
reference to Exhibit 10.12 to Amendment No. 1 to the Registration Statement on Form S-1, File No. 333-109194)
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8    |  | Employment Agreement, dated as of March 4, 2003 between NTL Incorporated and Howard Kalika (Incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                          
|10.9    |  | Employment Agreement, dated as of March 4, 2003 between NTL Incorporated and Richard Martin (Incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                         
|10.10   |  | Employment Agreement, dated as of March 4, 2003 between NTL Incorporated and Scott Schubert (Incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                         
|10.11   |  | Employment Agreement, dated as of September 17, 2003 between NTL Incorporated and James F. Mooney (Incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                   
|10.12   |  | Restricted Stock Agreement, dated as of March 28, 2003 between NTL Incorporated and James F. Mooney (Incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                 
|10.13   |  | Form of Director and Officer Indemnity Agreement and a schedule of persons to whom the agreement has been provided (Incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                  
|10.14   |  | Amended and Restated Employment Agreement, dated as of May 6, 2004, between NTL Incorporated and Simon Duffy (Incorporated by reference to Exhibit 10.1 to NTL Incorporated's Quarterly Report on Form 10-Q filed on May 7, 2004, File No. 000-22616)                                                                                                           
|10.15   |  | Employment Agreement, dated as of May 28, 2004, between NTL Incorporated and Bryan Hall (Incorporated by reference to Exhibit 10.1 to NTL Incorporated's Quarterly Report on Form 10-Q filed on August 6, 2004, File No. 000-22616)                                                                                                                             
|10.16   |  | Employment Agreement, dated as of September 6, 2004, between NTL Incorporated and Jacques Kerrest (Incorporated by reference to Exhibit 10.1 to NTL Incorporated's Quarterly Report on Form 10-Q filed on November 9, 2004, File No. 000-22616)                                                                                                                 
|10.17   |  | Letter Agreement, dated as of September 6, 2004, between NTL Incorporated and Scott Schubert (Incorporated by reference to Exhibit 10.2 to NTL Incorporated's Quarterly Report on Form 10-Q filed on November 9, 2004, File No. 000-22616)                                                                                                                      
|10.18** |  | Confirmation of Amendment of Employment Agreement dated as of March 4, 2003, dated as of December 22, 2004, between NTL Incorporated and Richard Martin                                                                                                                                                                                                         
|10.19** |  | Rules of Long-Term Incentive Plan                                                                                                                                                                                                                                                                                                                               
|10.20   |  | Amended and Restated NTL 2004 Stock Incentive Plan (Incorporated by reference to Appendix A to the Proxy Statement filed on April 8, 2004, File No. 000-22616)                                                                                                                                                                                                  
|10.21   |  | NTL Group 2004 Bonus Scheme (Incorporated by reference to Appendix B to the Proxy Statement filed on April 8, 2004, File No. 000-22616)                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                 

7

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|10.22   |  | NTL Incorporated Sharesave Plan (Incorporated by reference to Appendix C to the Proxy Statement filed on April 8, 2004, File No. 000-22616)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.23   |  | £2,425,000,000 Senior Facilities Agreement between NTL Incorporated, NTL Investment Holdings Limited, Credit Suisse First Boston, Deutsche Bank AG London, Goldman Sachs International, Morgan Stanley Dean Witter Bank Limited, BNP Paribas,
Citibank N.A. London, Crédit Lyonnais, Fortis Bank S.A./N.V., GE Capital Structured Finance Group Limited, HSBC Bank PLC, and Société Générale, as Mandated Lead Arrangers, Credit Suisse First Boston, as Facility
Agent and Security Trustee, GE Capital Structured Finance Group Limited, as Administrative Agent, and the other Lenders parties thereto, dated as of April 13, 2004 (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K
filed on April 20, 2004, File No. 000-22616)
|10.24   |  | High Yield Intercreditor Deed among NTL Cable PLC as Issuer, NTL Investment Holdings Limited as Borrower and as High Yield Guarantor, Credit Suisse First Boston as Facility Agent and Bank Group Security Trustee, The Bank of New York as High Yield
Trustee, the Senior Lenders named therein, the Intergroup Debtor named therein and the Intergroup Creditor named therein (Incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed on April 20, 2004, File No. 000-22616)                                                                                                                                                                                                                                                      
|10.25** |  | Restricted Stock Agreement, dated as of May 6, 2004 between NTL Incorporated and James F. Mooney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.26   |  | NTL Group 2005 Bonus Scheme (Incorporated by reference to Appendix B to the Proxy Statement filed on April 5, 2005, File No. 000-22616)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|12.1**  |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|14.1    |  | Code of Ethics (Incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K, File No. 000-22616)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|21.1    |  | Subsidiaries of the registrant (Incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-1, File No. 333-109194)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|23.1*   |  | Consent of Ernst & Young LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31.1*   |  | Certification of Chief Executive Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|31.2*   |  | Certification of Chief Financial Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|32.1*   |  | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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8

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated:
April 8, 2005

| |  | NTL INCORPORATED
| |  | ----------------
| |  | By:             

9

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Item 15(a)(1) and (2)        NTL INCORPORATED AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS        AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of NTL Incorporated and Subsidiaries are included in Item 8:

|Report of Independent Registered Public Accounting Firm                                                |  | F-2 
|------------------------------------------------------------------------------------------------------ |  | ----
|Consolidated Balance SheetsDecember 31, 2004 and 2003                                                 |  | F-3 
|Consolidated Statements of OperationsYears ended December 31, 2004, 2003 and 2002 and January 1, 2003 |  | F-5 
|Consolidated Statements of Cash FlowsYears ended December 31, 2004, 2003 and 2002 and January 1, 2003 |  | F-7 
|Consolidated Statement of Shareholders' EquityYears ended December 31, 2004, 2003 and 2002            |  | F-9 
|Notes to Consolidated Financial Statements                                                             |  | F-11

The
following consolidated financial statement schedules of NTL Incorporated and Subsidiaries are included in Item 15(d):

|Schedule ICondensed Financial Information of Registrant |  | F-67
|-------------------------------------------------------- |  | ----
|Schedule IIValuation and Qualifying Accounts            |  | F-71

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors and Shareholders
NTL Incorporated (formerly NTL Communications Corp.)

We
have audited the accompanying consolidated balance sheets of NTL Incorporated (formerly NTL Communications Corp.) and subsidiaries as of December 31, 2004 and 2003 (Successor),
and the related consolidated statements of income, shareholders' equity, and cash flows for each of the two years in the period ended December 31, 2004 for the Successor and for the year ended
December 31, 2002 for the Predecessor. Our audits also included the financial statement schedules listed in the Index at item 15(d). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of NTL Incorporated (formerly NTL Communications
Corp.) and subsidiaries as of December 31, 2004 and 2003 (Successor), and the related consolidated statements of income, shareholders' equity, and cash flows for each of the two years in the
period ended December 31, 2004 for the Successor and for the year ended December 31, 2002 for the Predecessor, in conformity with U.S. generally accepted accounting principles. Also, in
our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set
forth therein.

As
discussed in Note 22 to the consolidated financial statements, effective January 10, 2003 the Company emerged from bankruptcy and applied fresh start accounting. As a result,
the consolidated balance sheets as of December 31, 2004 and 2003 and the related statements of consolidated operations and cash flows for each of the two years in the period ended
December 31, 2004 are presented on a different basis than that for the periods before fresh start and, therefore, are not comparable. Additionally, as discussed in Note 13 of the consolidated
financial statements, as of January 1, 2003, the Company began expensing compensation expense related to stock options to conform with the provisions of Statement of Financial Accounting
Standards No. 123,"Accounting for Stock-Based Compensation".As discussed in Note 2 of the consolidated financial statements, as of
January 1, 2002, the Company changed its method of accounting for goodwill and other intangible assets to conform with the provisions of Statement of Financial Accounting Standards
No. 142,"Goodwill and Other Intangible Assets".

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of NTL Incorporated's internal control over
financial reporting as of December 31, 2004, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 16, 2005 expressed an unqualified opinion thereon.

Ernst &
Young LLP
London, England
March 16, 2005, except for Note 21, 
as to which the date is April 8, 2005

F-2

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NTL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

|                                                                               |                                                                                                  | December 31,        
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------ | --------------------
|
|Assets                                                                         |                                                                                                  |                     
|Current assets                                                                 |                                                                                                  |                     
|                                                                               | Cash and cash equivalents                                                                        |                     
|                                                                               | Restricted cash                                                                                  |                     
|                                                                               | Marketable securities                                                                            |                     
|                                                                               | Accounts receivabletrade, less allowance for doubtful accounts of $90.7 (2004) and $24.9 (2003) |                     
|                                                                               | Prepaid expenses                                                                                 |                     
|                                                                               | Current assets held for sale                                                                     |                     
|                                                                               | Other current assets                                                                             |                     
|                                                                               |                                                                                                  |                     
|                                                                               |                                                                                                  | Total current assets
|Fixed assets, net                                                              |                                                                                                  |                     
|Reorganization value in excess of amounts allocable to identifiable assets     |                                                                                                  |                     
|Customer lists, net                                                            |                                                                                                  |                     
|Other intangible assets, net                                                   |                                                                                                  |                     
|Investments in and loans to affiliates, net                                    |                                                                                                  |                     
|Other assets, net of accumulated amortization of $15.2 (2004) and $70.1 (2003) |                                                                                                  |                     
|Other assets held for sale                                                     |                                                                                                  |                     
|                                                                               |                                                                                                  |                     
|Total assets                                                                   |                                                                                                  | $                   
|                                                                               |                                                                                                  |                     

See
accompanying notes.

F-3

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|                                                 |                                                                                                                                 | December 31,               |         
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------
|
|Liabilities and shareholders' equity             |                                                                                                                                 |                            |         
|Current liabilities                              |                                                                                                                                 |                            |         
|                                                 | Accounts payable                                                                                                                |                            | $       
|                                                 | Accrued expenses and other current liabilities                                                                                  |                            |         
|                                                 | Interest payable                                                                                                                |                            |         
|                                                 | Deferred revenue                                                                                                                |                            |         
|                                                 | Current liabilities of discontinued operations                                                                                  |                            |         
|                                                 | Current portion of long-term debt                                                                                               |                            |         
|                                                 |                                                                                                                                 |                            |         
|                                                 |                                                                                                                                 | Total current liabilities  |         
|Long-term debt, net of current portion           |                                                                                                                                 |                            | 5,657.1 
|Deferred revenue and other long-term liabilities |                                                                                                                                 |                            | 420.9   
|Deferred income taxes                            |                                                                                                                                 |                            |        
|Long-term liabilities of discontinued operations |                                                                                                                                 |                            | 3.5     
|Commitments and contingent liabilities           |                                                                                                                                 |                            |         
|Shareholders' equity                             |                                                                                                                                 |                            |         
|                                                 | Preferred stock$.01 par value; authorized 5.0 (2004 and 2003) shares; issued and outstanding none                              |                            |         
|                                                 | Common stock$.01 par value; authorized 400.0 (2004 and 2003) shares; issued and outstanding 87.7 (2004) and 86.9 (2003) shares |                            |         
|                                                 | Additional paid-in capital                                                                                                      |                            |         
|                                                 | Unearned stock-based compensation                                                                                               |                            |         
|                                                 | Accumulated other comprehensive income                                                                                          |                            |         
|                                                 | Accumulated (deficit)                                                                                                           |                            |         
|                                                 |                                                                                                                                 |                            |         
|                                                 |                                                                                                                                 | Total shareholders' equity |         
|                                                 |                                                                                                                                 |                            |         
|Total liabilities and shareholders' equity       |                                                                                                                                 | $                          | 10,525.2
|                                                 |                                                                                                                                 |                            |         

See
accompanying notes.

F-4

---





NTL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

|                                                                                       |                                                                    | Year ended December 31,             |         
|-------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------------------------- | --------
|
|
|Revenue                                                                                |                                                                    | $                                   | 3,800.1 
|Costs and expenses                                                                     |                                                                    |                                     |         
|                                                                                       | Operating costs (exclusive of depreciation shown separately below) |                                     |         
|                                                                                       | Selling, general and administrative expenses                       |                                     |         
|                                                                                       | Long-lived asset impairments                                       |                                     |         
|                                                                                       | Other charges                                                      |                                     |         
|                                                                                       | Depreciation                                                       |                                     |         
|                                                                                       | Amortization                                                       |                                     |         
|                                                                                       |                                                                    |                                     |         
|                                                                                       |                                                                    |                                     | (3,871.7
|                                                                                       |                                                                    |                                     |         
|Operating (loss)                                                                       |                                                                    |                                     | (71.6   
|Other income (expense)                                                                 |                                                                    |                                     |         
|                                                                                       | Interest income and other, net                                     |                                     |         
|                                                                                       | Interest expense (contractual interest of $1,425.4 (2002))         |                                     |         
|                                                                                       | (Loss) on extinguishment of debt                                   |                                     |         
|                                                                                       | Recapitalization expense                                           |                                     |         
|                                                                                       | Share of (losses) income from equity investments                   |                                     |         
|                                                                                       | Foreign currency transaction (losses) gains                        |                                     |         
|                                                                                       |                                                                    |                                     |         
|(Loss) from continuing operations before income taxes                                  |                                                                    |                                     | (890.1  
|Income tax (expense) benefit                                                           |                                                                    |                                     | (10.5   
|                                                                                       |                                                                    |                                     |         
|                                                                                       | (Loss) from continuing operations                                  |                                     |         
|                                                                                       |                                                                    |                                     |         
|Discontinued operations                                                                |                                                                    |                                     |         
|                                                                                       | Income from discontinued operations before income taxes            |                                     |         
|                                                                                       | Income tax benefit                                                 |                                     |         
|                                                                                       |                                                                    |                                     |         
|                                                                                       |                                                                    | Income from discontinued operations |         
|                                                                                       |                                                                    |                                     |         
|Net (loss)                                                                             |                                                                    | $                                   | (880.1  
|                                                                                       |                                                                    |                                     |         
|Basic and diluted loss from continuing operations per common share(pro forma in 2002) |                                                                    | $                                   | (10.33  
|                                                                                       |                                                                    |                                     |         
|Basic and diluted net loss per common share(pro forma in 2002)                        |                                                                    | $                                   | (10.09  
|                                                                                       |                                                                    |                                     |         
|Average number of shares outstanding(pro forma in 2002)                               |                                                                    |                                     | 87.2    
|                                                                                       |                                                                    |                                     |         

See
accompanying notes.

F-5

---



|                                                                               |  | January 1,
2003 |         
|------------------------------------------------------------------------------ |  | --------------- | --------
|
|Gain on debt discharge                                                         |  | $               | 8,451.6 
|Fresh-start adoptionintangible assets                                         |  |                 | 856.3   
|Fresh-start adoptionlong-term debt                                            |  |                 | 221.3   
|Fresh-start adoptiondeferred tax liability                                    |  |                 | 27.7    
|Fresh-start adoptionaccrued expenses                                          |  |                 | (120.4  
|Fresh-start adoptionfixed assets                                              |  |                 | (3,567.6
|Recapitalization expense                                                       |  |                 | (8.0    
|                                                                               |  |                 |         
|Income from continuing operations                                              |  |                 | 5,860.9 
|Fresh-start adoptionintangible assets                                         |  |                 | 665.4   
|Fresh-start adoptiondeferred tax liability                                    |  |                 | (96.3   
|Fresh-start adoptionfixed assets                                              |  |                 | 372.7   
|                                                                               |  |                 |         
|Income from discontinued operations                                            |  |                 | 941.8   
|                                                                               |  |                 |         
|Net income                                                                     |  | $               | 6,802.7 
|                                                                               |  |                 |         
|Pro forma basic and diluted income from continuing operations per common share |  | $               | 98.50   
|                                                                               |  |                 |         
|Pro forma basic and diluted net income per common share                        |  | $               | 114.33  
|                                                                               |  |                 |         
|Pro forma average number of shares outstanding                                 |  |                 | 59.5    
|                                                                               |  |                 |         

See
accompanying notes.

F-6

---





NTL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

|                                                                                                        |                                                                    | Year ended December 31,                 |       
|------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | --------------------------------------- | ------
|
|
|Operating Activities:                                                                                   |                                                                    |                                         |       
|Net (loss)                                                                                              |                                                                    | $                                       | (880.1
|Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:             |                                                                    |                                         |       
|                                                                                                        | Depreciation and amortization                                      |                                         |       
|                                                                                                        | Asset impairments                                                  |                                         |       
|                                                                                                        | Non-cash compensation                                              |                                         |       
|                                                                                                        | Non-cash restructuring charge                                      |                                         |       
|                                                                                                        | Share of (income) losses from equity investments                   |                                         |       
|                                                                                                        | Provision for losses on accounts receivable                        |                                         |       
|                                                                                                        | Provision for cancellation of receivables from PTV Inc.            |                                         |       
|                                                                                                        | Deferred income taxes                                              |                                         |       
|                                                                                                        | Loss on extinguishment of debt                                     |                                         |       
|                                                                                                        | Amortization of original issue discount and deferred finance costs |                                         |       
|                                                                                                        | Other                                                              |                                         |       
|Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions: |                                                                    |                                         |       
|                                                                                                        | Accounts receivable                                                |                                         |       
|                                                                                                        | Other current assets                                               |                                         |       
|                                                                                                        | Prepaid expenses                                                   |                                         |       
|                                                                                                        | Other assets                                                       |                                         |       
|                                                                                                        | Accounts payable                                                   |                                         |       
|                                                                                                        | Accrued expenses and other current liabilities                     |                                         |       
|                                                                                                        | Deferred revenue                                                   |                                         |       
|                                                                                                        | Other long-term liabilities                                        |                                         |       
|                                                                                                        |                                                                    |                                         |       
|Net cash provided by operating activities                                                               |                                                                    |                                         | 706.1 
|                                                                                                        |                                                                    |                                         |       
|Investing activities                                                                                    |                                                                    |                                         |       
|                                                                                                        | Purchase of fixed assets                                           |                                         |       
|                                                                                                        | Investments in and loans to affiliates                             |                                         |       
|                                                                                                        | (Increase) in other assets                                         |                                         |       
|                                                                                                        | Proceeds from sale of assets                                       |                                         |       
|                                                                                                        | Acquisitions, net of cash acquired                                 |                                         |       
|                                                                                                        | Purchases of marketable securities                                 |                                         |       
|                                                                                                        | Proceeds from sales of marketable securities                       |                                         |       
|                                                                                                        |                                                                    |                                         |       
|                                                                                                        |                                                                    | Net cash (used in) investing activities |       
|                                                                                                        |                                                                    |                                         |       

See
accompanying notes.

F-7

---



|                                                                        |                                                    | Year ended December 31,                   |       
|----------------------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------- | ------
|
|
|Financing activities                                                    |                                                    |                                           |       
|                                                                        | Proceeds from borrowings, net of financing costs   |                                           |       
|                                                                        | Net proceeds from rights offering                  |                                           |       
|                                                                        | Proceeds from employee stock options               |                                           |       
|                                                                        | Principal payments on long-term debt               |                                           |       
|                                                                        | Proceeds from borrowings from NTL (Delaware), Inc. |                                           |       
|                                                                        | Contribution from NTL (Delaware), Inc.             |                                           |       
|                                                                        |                                                    |                                           |       
|                                                                        |                                                    | Net cash provided by financing activities |       
|Effect of exchange rate changes on cash and cash equivalents            |                                                    |                                           | 11.7  
|                                                                        |                                                    |                                           |       
|(Decrease) increase in cash and cash equivalents                        |                                                    |                                           | (555.9
|Cash and cash equivalents at beginning of year                          |                                                    |                                           | 795.9 
|                                                                        |                                                    |                                           |       
|Cash and cash equivalents at end of year                                |                                                    | $                                         | 240.0 
|                                                                        |                                                    |                                           |       
|Supplemental disclosure of cash flow information                        |                                                    |                                           |       
|Cash paid during the year for interest exclusive of amounts capitalized |                                                    | $                                         | 547.0 
|Income taxes paid                                                       |                                                    |                                           | 0.3   
|Supplemental schedule of non-cash financing activities                  |                                                    |                                           |       
|Contribution from NTL (Delaware), Inc.                                  |                                                    | $                                         |      

|                                               |                                                  | January 1,
2003                           |      
|---------------------------------------------- | ------------------------------------------------ | ----------------------------------------- | -----
|
|Net cash (used in) operating activities        |                                                  | $                                         | (46.9
|                                               |                                                  |                                           |      
|Investing activities                           |                                                  |                                           |      
|                                               | Decrease in other assets                         |                                           |      
|                                               |                                                  |                                           |      
|                                               |                                                  | Net cash provided by investing activities |      
|Financing activities                           |                                                  |                                           |      
|                                               | Proceeds from borrowings, net of financing costs |                                           |      
|                                               | Principal payments                               |                                           |      
|                                               |                                                  |                                           |      
|                                               |                                                  | Net cash provided by financing activities |      
|                                               |                                                  |                                           |      
|Increase in cash and cash equivalents          |                                                  |                                           | 138.7
|Cash and cash equivalents, beginning of period |                                                  |                                           | 502.0
|                                               |                                                  |                                           |      
|Cash and cash equivalents, end of period       |                                                  | $                                         | 640.7
|                                               |                                                  |                                           |      

See
accompanying notes.

F-8

---



NTL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

(in millions, except per share data)

|                                                       |  | Series
Preferred Stock
$.01 Par Value |  | Common Stock
$.01 Par Value |  |      |  |   |    
|------------------------------------------------------ |  | ------------------------------------- |  | --------------------------- |  | ---- |  | - | ---
|
|
|Predecessor company                                    |  |                                       |  |                             |  |      |  |   |    
|Balance, December 31, 2001                             |  |                                      |  | $                          |  |     |  | $ |   
|Contribution from NTL (Delaware), Inc., net            |  |                                      |  |                            |  |     |  |   |   
|Comprehensive loss:                                    |  |                                      |  |                            |  |     |  |   |   
|Net loss for the year ended December 31, 2002          |  |                                      |  |                            |  |     |  |   |   
|Currency translation adjustment                        |  |                                      |  |                            |  |     |  |   |   
|Pension liability adjustment                           |  |                                      |  |                            |  |     |  |   |   
|Unrealized net gains on derivatives                    |  |                                      |  |                            |  |     |  |   |   
|                                                       |  |                                       |  |                             |  |      |  |   |    
|Balance, December 31, 2002                             |  |                                      |  |                            |  |     |  |   |   
|Comprehensive income:                                  |  |                                       |  |                             |  |      |  |   |    
|Net income (loss) January 1, 2003                      |  |                                      |  |                            |  |     |  |   |   
|Issuance of common stock                               |  |                                      |  |                            |  | 50.5 |  |   | 0.5
|Fresh-start adoptionother                             |  |                                      |  |                            |  |     |  |   |   
|                                                       |  |                                       |  |                             |  |      |  |   |    
|Reorganized company                                    |  |                                       |  |                             |  |      |  |   |    
|Balance, January 1, 2003                               |  |                                      |  |                            |  | 50.5 |  |   | 0.5
|Issuance of shares into escrow                         |  |                                      |  |                            |  | 0.1  |  |   |   
|Issuance of restricted stock                           |  |                                      |  |                            |  | 0.2  |  |   |   
|Issuance of shares as payment of bonus                 |  |                                      |  |                            |  |     |  |   |   
|Exercise of stock options                              |  |                                      |  |                            |  | 0.2  |  |   |   
|Stock options at fair value                            |  |                                      |  |                            |  |     |  |   |   
|Escrow shares amortized to operations                  |  |                                      |  |                            |  |     |  |   |   
|Restricted stock amortized to operations               |  |                                      |  |                            |  |     |  |   |   
|Stock options amortized to operations                  |  |                                      |  |                            |  |     |  |   |   
|Net proceeds from Rights Offering                      |  |                                      |  |                            |  | 35.9 |  |   | 0.4
|Comprehensive loss:                                    |  |                                       |  |                             |  |      |  |   |    
|Net loss for the year ended December 31, 2003          |  |                                      |  |                            |  |     |  |   |   
|Currency translation adjustment                        |  |                                      |  |                            |  |     |  |   |   
|Pension liability adjustment                           |  |                                      |  |                            |  |     |  |   |   
|                                                       |  |                                       |  |                             |  |      |  |   |    
|Balance, December 31, 2003                             |  |                                      |  |                            |  | 86.9 |  |   | 0.9
|Exercise of stock options                              |  |                                      |  |                            |  | 0.7  |  |   |   
|Stock option grants at fair value                      |  |                                      |  |                            |  |     |  |   |   
|Repurchase of restricted stock                         |  |                                      |  |                            |  |     |  |   |   
|Issuance of restricted stock                           |  |                                      |  |                            |  | 0.1  |  |   |   
|Issuance of shares                                     |  |                                      |  |                            |  |     |  |   |   
|Performance related bonus plan                         |  |                                      |  |                            |  |     |  |   |   
|Restricted stock amortized to operations               |  |                                      |  |                            |  |     |  |   |   
|Issuance of stock amortized to operations              |  |                                      |  |                            |  |     |  |   |   
|Stock options amortized to operations                  |  |                                      |  |                            |  |     |  |   |   
|Performance related bonus plan amortized to operations |  |                                      |  |                            |  |     |  |   |   
|Comprehensive loss:                                    |  |                                       |  |                             |  |      |  |   |    
|Net loss for the year ended December 31, 2004          |  |                                      |  |                            |  |     |  |   |   
|Currency translation adjustment                        |  |                                      |  |                            |  |     |  |   |   
|Net unrealized losses on derivative instruments        |  |                                      |  |                            |  |     |  |   |   
|Pension liability adjustment                           |  |                                      |  |                            |  |     |  |   |   
|                                                       |  |                                       |  |                             |  |      |  |   |    
|Balance, December 31, 2004                             |  |                                      |  | $                          |  | 87.7 |  | $ | 0.9
|                                                       |  |                                       |  |                             |  |      |  |   |    

See accompanying notes.

F-9

---



|                                                        |       |   |          | Accumulated Other
Comprehensive Income (Loss) |   |        |   |   |       
|------------------------------------------------------- | ----- | - | -------- | --------------------------------------------- | - | ------ | - | - | ------
|
|Predecessor Company                                     |       |   |          |                                               |   |        |   |   |       
|Balance, December 31, 2001                              |       |   |          |                                               | $ | (900.9 | ) | $ |      
|Contribution from NTL (Delaware), Inc., net             |       |   |          |                                               |   |       |   |   |      
|Comprehensive loss:                                     |       |   |          |                                               |   |        |   |   |       
|Net loss for the year ended December 31, 2002           |       | $ | (2,375.8 | )                                             |   |       |   |   |      
|Currency translation adjustment                         |       |   | 351.0    |                                               |   | 351.0  |   |   |      
|Pension liability adjustment                            |       |   | (103.7   | )                                             |   |       |   |   | (103.7
|Unrealized net gains on derivatives                     |       |   | 3.6      |                                               |   |       |   |   |      
|                                                        |       |   |          |                                               |   |        |   |   |       
|                                                        | Total |   | $        | (2,124.9                                      | ) |        |   |   |       
|                                                        |       |   |          |                                               |   |        |   |   |       
|Balance, December 31, 2002                              |       |   |          |                                               |   | (549.9 | ) |   | (103.7
|Comprehensive income:                                   |       |   |          |                                               |   |        |   |   |       
|Net income January 1, 2003                              |       | $ | 6,802.7  |                                               |   |       |   |   |      
|                                                        |       |   |          |                                               |   |        |   |   |       
|Issuance of common stock                                |       |   |          |                                               |   |       |   |   |      
|Fresh-start adoptionother                              |       |   |          |                                               |   | 549.9  |   |   | 103.7 
|                                                        |       |   |          |                                               |   |        |   |   |       
|Reorganized Company                                     |       |   |          |                                               |   |        |   |   |       
|Balance, January 1, 2003                                |       |   |          |                                               |   |       |   |   |      
|Issuance of shares into escrow                          |       |   |          |                                               |   |       |   |   |      
|Issuance of restricted stock                            |       |   |          |                                               |   |       |   |   |      
|Issuance of shares as payment of bonus                  |       |   |          |                                               |   |       |   |   |      
|Exercise of stock options                               |       |   |          |                                               |   |       |   |   |      
|Stock options at fair value                             |       |   |          |                                               |   |       |   |   |      
|Escrow shares amortized to operations                   |       |   |          |                                               |   |       |   |   |      
|Restricted stock amortized to operations                |       |   |          |                                               |   |       |   |   |      
|Stock options amortized to operations                   |       |   |          |                                               |   |       |   |   |      
|Net proceeds from rights offering                       |       |   |          |                                               |   |       |   |   |      
|Comprehensive loss:                                     |       |   |          |                                               |   |        |   |   |       
|Net loss for the year ended December 31, 2003           |       | $ | (954.2   | )                                             |   |       |   |   |      
|Currency translation adjustment                         |       |   | 342.0    |                                               |   | 342.0  |   |   |      
|Pension liability adjustment                            |       |   | (0.7     | )                                             |   |       |   |   | (0.7  
|                                                        |       |   |          |                                               |   |        |   |   |       
|                                                        | Total |   | $        | (612.9                                        | ) |        |   |   |       
|                                                        |       |   |          |                                               |   |        |   |   |       
|Balance, December 31, 2003                              |       |   |          |                                               |   | 342.0  |   |   | (0.7  
|Exercise of stock options                               |       |   |          |                                               |   |       |   |   |      
|Stock option grants at fair value                       |       |   |          |                                               |   |       |   |   |      
|Repurchase of restricted stock                          |       |   |          |                                               |   |       |   |   |      
|Issuance of restricted stock                            |       |   |          |                                               |   |       |   |   |      
|Issuance of shares                                      |       |   |          |                                               |   |       |   |   |      
|Performance of related bonus plans                      |       |   |          |                                               |   |       |   |   |      
|Restricted stock amortized to operations                |       |   |          |                                               |   |       |   |   |      
|Issuance of stock amortized to operations               |       |   |          |                                               |   |       |   |   |      
|Stock options amortized to operations                   |       |   |          |                                               |   |       |   |   |      
|Performance related bonus plans amortized to operations |       |   |          |                                               |   |       |   |   |      
|Comprehensive loss:                                     |       |   |          |                                               |   |        |   |   |       
|Net loss for the year ended December 31, 2004           |       | $ | (880.1   | )                                             |   |       |   |   |      
|Currency translation adjustment                         |       |   | 220.0    |                                               |   | 220.0  |   |   |      
|Net Unrealized losses on derivatives instruments        |       |   | (45.9    | )                                             |   |       |   |   |      
|Pension liability adjustment                            |       |   | (3.4     | )                                             |   |       |   |   | (3.4  
|                                                        |       |   |          |                                               |   |        |   |   |       
|                                                        | Total |   | $        | (709.4                                        | ) |        |   |   |       
|                                                        |       |   |          |                                               |   |        |   |   |       
|Balance, December 31, 2004                              |       |   |          |                                               | $ | 562.0  |   | $ | (4.1  
|                                                        |       |   |          |                                               |   |        |   |   |       

See accompanying notes.

F-10

---





NTL INCORPORATED AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Organization and Business

Historical Structure of the Company

NTL Incorporated, or the Company, is a Delaware corporation and is publicly-traded on the Nasdaq National Market in the United States. The Company's historical
structure is as follows:

The
Company was incorporated in 1993 as a Delaware corporation and continued as a publicly-traded holding company until February 1999. From February 1999 until
January 10, 2003, the Company was a wholly-owned subsidiary of NTL (Delaware), Inc., a Delaware corporation, which was incorporated in February 1999, to effect a reorganization
into a holding company structure. The holding company structure was implemented to pursue opportunities outside of the UK and Ireland, and was accomplished through a merger. The Company's stockholders
at the time became stockholders of the new holding company, NTL (Delaware), Inc., and the Company became a wholly-owned subsidiary of the new holding company. The new holding company took the
name NTL Incorporated until May 2000 when it was changed to NTL (Delaware), Inc., its current name.

In
May 2000 another new holding company structure was implemented in connection with the acquisition of the residential assets of Cable & Wireless Communications plc,
referred to in this annual report as CWC (the operations acquired from CWC are called ConsumerCo), and was similarly accomplished through a merger. The stockholders of NTL (Delaware), Inc.
became stockholders of the new holding company, and NTL (Delaware), Inc. became a subsidiary of the new holding company, and
the Company remained a subsidiary of NTL (Delaware), Inc., referred to in this annual report as NTL Delaware. The new holding company then took the name NTL Incorporated, which remained its
name until January 10, 2003, at which time its name was changed to NTL Europe, Inc., referred to in this annual report as NTL Europe. On February 21, 2001, NTL Europe contributed
the assets of ConsumerCo to the Company.

On
January 10, 2003, the Company emerged from reorganization under Chapter 11 of the United States Bankruptcy Code. Pursuant to the plan of reorganization, which is referred to as
the Plan, the Company's former parent, NTL Europe, Inc., and its subsidiaries and affiliates were split into two separate groups, with the Company and NTL Europe each emerging as independent
public companies. The Company was renamed "NTL Incorporated" and became the holding company for the former NTL group's principal UK and Ireland assets. NTL Europe became the holding company for the
former NTL group's continental European and various other assets. All of the outstanding securities of NTL Europe and some of its subsidiaries, including the Company, were cancelled. The Company
issued shares of its common stock and Series A warrants and NTL Europe issued shares of its common stock and preferred stock to various former creditors and stockholders. As a result, the
Company is no longer affiliated with NTL Europe. NTL Europe has since changed its name to PTV, Inc., or PTV.

The
Company conducts its operations through direct and indirect wholly-owned subsidiaries.

Business

The Company is one of the leading communications and content distribution companies in the UK and the Republic of Ireland, providing broadband internet access,
telephone and television services to residential customers. The Company also provides internet and telephone services to residential customers who are not connected to its cable network, via access to
other companies' telecommunications networks and via an internet service provider operated by its subsidiary, Virgin Net Limited. The Company offers what it refers to as a "triple play" bundle of
internet, telephone and

F-11

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television
services through competitively-priced bundled packages. The Company also provides a range of voice services to businesses and public sector organizations as well as a variety of data
communications solutions from high speed internet access to fully managed business communications networks and communication transport services.

The
Company's services are delivered through its wholly-owned local access communications network. The design and capability of the Company's network provides it with the ability to
offer "triple play" bundled services to residential consumers and a broad portfolio of reliable, competitive communications solutions to business customers.

The
Company provides services to three categories of customers: residential customers, business customers and customers in the Republic of Ireland as follows:



2.    Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

The
Company operated its business as a debtor-in-possession subject to the jurisdiction of the Bankruptcy Court during the period from May 8, 2002 until
January 10, 2003. Accordingly, the Company's consolidated financial statements for periods prior to its emergence from Chapter 11 reorganization were prepared in accordance with the American
Institute of Certified Public Accountants Statement of Position 90-7,Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code("SOP 90-7"). In addition, the Company adopted fresh-start reporting upon its emergence from Chapter 11 reorganization in accordance with SOP 90-7.
For financial reporting purposes, the effects of the consummation of the Plan as
well as adjustments for fresh-start reporting have been recorded in the accompanying condensed consolidated financial statements as of January 1, 2003.

Pursuant
to fresh-start reporting, a new entity was deemed created for financial reporting purposes and the carrying values of assets and liabilities were adjusted. The carrying values
of assets were adjusted to their reorganization values that are equivalent to their estimated fair values. The carrying values of liabilities were adjusted to their present values. Since fresh-start
reporting materially changed the carrying values recorded in the Company's consolidated balance sheet, a black line separates the financial statements for periods after the adoption of fresh-start
reporting from the financial statements for periods prior to the adoption.

F-12

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The
term "Predecessor Company" refers to the Company and its subsidiaries for periods prior to and including December 31, 2002. The term "Reorganized Company" refers to the
Company and its subsidiaries for periods subsequent to January 1, 2003. The effects of the consummation of the Plan as well as adjustments for fresh-start reporting recorded as of
January 1, 2003 are Predecessor Company transactions and are presented in the accompanying consolidated statements of operations and cash flows dated January 1, 2003. All other results
of operations and cash flows on January 1, 2003 are Reorganized Company transactions.

On
December 1, 2004, the company reached an agreement for the sale of its broadcast operations. The sale completed on January 31, 2005. As of December 31, 2004, the
broadcast operations are accounted for as a discontinued operation and therefore, broadcast's results of operations have been removed from the Company's results of continuing operations for all
periods presented in this Annual Report. The results of operations of broadcast have been excluded from the components of "Loss from Continuing Operations" and shown under the caption "Income from
Discontinued Operations" in the Statements of Operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: the amount of uncollectible
accounts and notes receivable, the amount to be paid to terminate certain agreements included in restructuring costs, amounts accrued for vacated properties, the amount to be paid for other
liabilities, the Company's pension expense and pension funding requirements, amounts to be paid under the Company's employee incentive plans, costs for interconnection, the amount of costs to be
capitalized in connection with the construction and installation of the Company's network and facilities, the value of investments, long-lived
assets and goodwill and the computation of the Company's income tax expense and liability. Actual results could differ from those estimates.

Fair Values

The Company has determined the estimated fair value amounts presented in these consolidated financial statements using available market information and
appropriate methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. The estimates presented in these consolidated financial
statements are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts. The Company has based these fair value estimates on pertinent information available to it as of December 31, 2004 and 2003.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities where the Company's interest is greater than
50%. Intercompany accounts and transactions have been eliminated in consolidation.

F-13

---



Reclassification

Certain prior year amounts, principally consisting of long-term prepayments and deferred revenues related to circuit commitments, have been
reclassified to conform to the current year presentation.

Foreign Currency Translation

The functional currencies of the Company are the Pound Sterling and the Euro, while its reporting currency is the United States Dollar. The assets and liabilities
of the Company's UK and Ireland subsidiaries have been translated using the exchange rates in effect at the balance sheet dates, and revenues and expenses are translated at the average rates for the
respective years. Exchange gains and losses on translation of the Company's net equity investments in its subsidiaries are reported as a separate component of accumulated other comprehensive income
(loss) in shareholders' equity. Foreign currency transaction gains and losses are recorded in the statement of operations.

Cash Equivalents

Cash equivalents are short-term highly liquid investments purchased with a maturity of three months or less. Cash equivalents were
$45.8 million and $59.6 million at December 31, 2004 and 2003, respectively, which consisted primarily of bank term deposits and corporate commercial paper. At December 31,
2004 and 2003, none of the cash equivalents were denominated in foreign currencies.

Restricted
cash balances of $31.4 million and $26.9 million as at December 31, 2004 and 2003, respectively represent cash balances collateralized against performance
bonds given on behalf of the Company.

Trade Receivables

The Company's trade receivables are stated at outstanding principal balance, net of allowance for doubtful accounts. Allowances for doubtful accounts are
estimated based on the current aging of trade receivables, prior collection experience and future expectations of conditions that might impact recoverability. The allowance for doubtful accounts is
$90.7 million at December 31, 2004 and $24.9 million at December 31, 2003.

Concentrations of Credit Risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables. The Company's
cash equivalents are in high quality securities placed with major banks and financial institutions. Concentrations of credit risk with respect to trade
receivables are limited because of the large number of customers and their dispersion across geographic areas. The Company performs periodic credit evaluations of its Business customers' financial
condition and generally does not require collateral. At December 31, 2004, the Company did not have significant credit risk concentrations. No single group or customer represents greater than
10% of total accounts receivable.

Fixed Assets

Fixed assets, net totaled $6,933.8 million and $7,031.8 million, representing 65.8% and 62.9% of total assets at December 31, 2004 and 2003,
respectively. In accordance with SOP 90-7, upon

F-14

---



emergence
from Chapter 11 reorganization, the Company adopted fresh-start reporting as of January 1, 2003. Pursuant to fresh-start reporting, the carrying values of fixed assets were adjusted
to their reorganization values, which were equivalent to their estimated fair values. These adjusted carrying values became the revised cost basis of the Company's fixed assets at January 1,
2003. Fixed assets, net were written down by $3,567.6 million to reflect this adjustment.

The
cost of fixed assets includes amounts capitalized for labor and overhead expended in connection with the design and installation of the Company's operating network equipment and
facilities. Costs associated with initial customer installations, additions of network equipment necessary to enable enhanced services, acquisition of additional fixed assets and replacement of
existing fixed assets are capitalized. The costs of reconnecting the same service to a previously installed premise are charged to expense in the period incurred. Costs for repairs and maintenance are
charged to expense as incurred.

Labor
and overhead costs directly related to the construction and installation of fixed assets, including payroll and related costs of some employees and related rent and other occupancy
costs, are capitalized. The payroll and related costs of some employees that are directly related to construction and installation activities are capitalized based on specific time devoted to these
activities where identifiable. In cases where the time devoted to these activities is not specifically identifiable, the Company capitalizes costs based upon estimated allocations. The Company
continues to enhance its processes to reduce reliance upon these estimates in determining amounts capitalized. The labor and overhead costs capitalized in the years ended December 31, 2004,
2003 and 2002 were approximately $101.4 million, $116.9 million and $176.4 million, respectively.

The
following table illustrates the calculation of labor and overhead costs capitalized as a percentage of total operating costs and selling, general and administrative expenses and as a
percentage of cash used to purchase fixed assets (in millions except percentages).

|                                                                                                                               |  | Year ended December 31,
|------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------
|
|
|Labor and overhead costs capitalized                                                                                           |  | $101.4                 
|Total operating costs and selling, general and administrative expenses                                                         |  | 2,526.9                
|Labor and overhead costs capitalized as a percentage of total operating costs and selling, general and administrative expenses |  | 4.0%                   
|Purchase of fixed assets                                                                                                       |  | 523.2                  
|Labor and overhead costs capitalized as a percentage of purchase of fixed assets                                               |  | 19.4%                  

Interest
is capitalized as a component of the cost of fixed assets constructed. In 2004, 2003 and 2002, total interest incurred was $496.6 million, $751.9 million and
$826.5 million, respectively, of which interest of $nil, $5.5 million and $46.3 million, respectively, was capitalized.

F-15

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Depreciation
is computed by the straight-line method over the estimated useful lives of the assets. Land and fixed assets held for sale are not depreciated. Estimated useful
lives are as follows:

Operating equipment:Cable distribution plant

830 yearsSwitches and headends

810 yearsCustomer premises equipment

510 yearsOther operating equipment

820 yearsOther equipment:Buildings

30 yearsLeasehold improvements

20 years or, if less, the lease termComputer infrastructure

35 yearsOther equipment

512 years


Intangible Assets

Intangible assets include non-compete agreements, trademark license agreements and customer lists. Non-compete agreements represent the
portion of purchase price in business combinations allocated to agreements not to compete. Non-compete agreements are amortized over the non-compete period which is principally one year.
Trademark license agreements represent the portion of purchase price allocated to agreements to license trademarks acquired in business combinations. Trademark licenses are amortized over the period
in which the Company expects to derive benefits, which is principally five years. Customer lists represent the portion of the purchase price allocated to the value of the customer base.
Customer lists are amortized on a straight-line basis over the period in which the Company expects to derive benefits, which is principally three or five years. Intangible assets
held for sale are not amortized.

In
addition, the Company's total reorganization value exceeded the amounts allocable to identifiable assets resulting in a new indefinite-lived intangible asset as a consequence of
applying fresh-start reporting. This is not amortized but is reviewed annually (or more frequently under certain conditions) for impairment in accordance with FASB Statement No. 142, Goodwill and Other Intangible
Assets(FAS 142).

Effective
January 1, 2002, the Company adopted FAS 142. Upon adoption, the Company performed an analysis of its intangible assets to determine whether they should be classified
and accounted for as part of or separate from goodwill. The Company reclassified the carrying value of workforce in place included in other intangibles to goodwill. The Company determined that license
acquisition costs would no longer be subject to amortization, since they are deemed to have an indefinite useful life. The Company also determined that no changes in the useful lives of the customer
lists were required. The Company also performed an evaluation for impairment of its goodwill and license acquisition costs as of January 1, 2002 and determined that no impairment charge was
required.

Asset Retirement Obligations

As of January 1, 2003, the Company adopted FASB Statement No. 143,Accounting for Asset Retirement
Obligations(FAS 143). FAS 143 addresses financial accounting and reporting for obligations

F-16

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associated
with the retirement of tangible long-lived assets and the related asset retirement costs. The adoption of FAS 143 did not result in any recognition of liabilities by the
Company during its fiscal year ended December 31, 2004 and 2003.

The
Company accrues for the liability in respect of dilapidation on its leasehold properties over the term of the lease in accordance with FASB Statement No. 13, Accounting for Leases.

Impairment of Long-Lived Assets

Long-lived assets, including fixed assets and amortizable definite lived intangible assets, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of the carrying value of long-lived assets, by first grouping its
long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the
asset group) and, secondly, estimating the undiscounted future
cash flows that are directly associated with and expected to arise from the use of and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining
useful life of the primary asset within the asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, the Company records an impairment charge to the extent
the carrying value of the long-lived asset exceeds its fair value. The Company determines fair value through quoted market prices in active markets or, if quoted market prices are
unavailable, through the performance of internal analysis of discounted cash flows or external appraisals. The undiscounted and discounted cash flow analyses are based on a number of estimates and
assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rate and long-term growth rate.

Reorganization
value in excess of amounts allocable to identifiable assets is reviewed for impairment each year.

As
of December 31, 2004, the Company reviewed its long-lived assets for impairment and determined that there was no impairment of the Company's long-lived
assets as of December 31, 2004.

Equity Method Investments

All investments in which the Company has the ability to exercise significant influence over the investee, but less than a controlling voting interest, are
accounted for using the equity method. Equity method investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or
losses after the date of investment, additional contributions made and dividends received. Prior to the adoption of FAS 142, the difference between the Company's recorded investment and its
proportionate interest in the book value of the investees' net assets were being amortized on a straight-line basis over 10 years. The Company evaluates the carrying value of its
equity method investments and tests for impairment in accordance with APB Opinion No. 18.

Deferred Financing Costs

Deferred financing costs of $147.8 million and $134.9 million as of December 31, 2004 and 2003, respectively, are included in other assets.
Deferred financing costs are incurred in connection with the

F-17

---



issuance
of debt and are amortized over the term of the related debt using a straight-line basis, since this method is materially consistent with the effective interest basis.

Restructuring Costs

As of January 1, 2003, the Company adopted FASB Statement No. 146.Accounting for Costs Associated with Exit or Disposal
Activities(FAS 146) and recognizes a liability for costs associated with restructuring activities when the liability is incurred. The adoption of FAS 146 did not
have a significant effect on the results of operations, financial condition or cash flows of the Company.

Prior
to 2003, the Company recognized a liability for costs associated with restructuring activities at the time of a commitment to restructure is given in accordance with EITF
94-3,Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a
restructuring).

Revenue Recognition

The Company recognizes revenue only when it is realized or realizable and earned. The Company recognizes revenue when all of the following are present:



Revenues
are invoiced and recorded as part of a periodic billing cycle, and are recognized as the services are provided. At the end of each period, adjustments are recorded to defer
revenue relating to services billed in advance and to accrue for earned but unbilled services.



F-18

---





Advertising Expense

The Company charges the cost of advertising to expense as incurred. Advertising costs were $80.6 million, $60.4 million and $32.8 million in
2004, 2003 and 2002, respectively.

Stock-Based Compensation

The Company has a number of stock-based employee compensation plans, described more fully in Note 13. Effective January 1, 2003, the Company adopted
the fair value recognition provisions of FASB Statement No. 123,Accounting for Stock-Based Compensation, (FAS 123). Under the prospective
method of adoption selected by the Company under provision of FASB Statement No. 148,Accounting for Stock-Based Compensation-Transition and
Disclosure(FAS 148), the recognition provisions will be applied to all employee awards granted, modified, or settled after January 1, 2003.

Prior
to 2003, the Company's employees participated in the various stock option plans of its former ultimate parent company. The Company accounted for the stock-based compensation plans
of its former ultimate parent company under Accounting Principals Board Opinion No. 25,Accounting for Stock Issued to Employees, (APB
25) and related interpretations. No stock-based employee compensation cost was reflected in 2002, as all options granted under these plans had an intrinsic value of zero on the date of the
grant. All options to purchase shares of the Company's former ultimate parent company's common stock were cancelled on the Effective Date pursuant to the Plan.

If
the Company had elected to adopt the fair value recognition provisions of FAS 123 as of January 1, 2002, pro forma net income and diluted net income per share for 2002
(Predecessor Company) would be as follows (in millions, except per share data):

|(Loss) from continuing operations, as reported                                                                                                  |  | $ | (2,469.1 | )
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------- | -
|Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects |  |   | (250.4   | )
|                                                                                                                                                |  |   |         
|Pro forma (loss) from continuing operations                                                                                                     |  | $ | (2,719.5 | )
|                                                                                                                                                |  |   |         
|Earnings per share:                                                                                                                             |  |   |          |  
|Basic and diluted (loss) from continuing operations per share                                                                                   |  | $ | (41.50   | )
|                                                                                                                                                |  |   |         
|Basic and diluted (loss) from continuing operations per share, pro forma                                                                        |  | $ | (45.71   | )
|                                                                                                                                                |  |   |         

Pursuant
to the NTL Group Bonus Schemes, participants are eligible to receive a bonus payment equal to a percentage of their base salary as determined by their level of employment based
upon the attainment of performance targets. Bonus payments are made in two installments. Half of the bonus owing to various participants is payable in cash and the other half may, at the Company's
discretion, be paid in shares of the Company's common stock.

Pensions

The Company accounts for its defined benefit pension plans using FASB Statement No. 87,Employer's Accounting for
Pensions(FAS 87) and the disclosure rules under FASB Statement No. 132 (revised),Employers Disclosures about Pensions and Other
Postretirement Benefits, an Amendment of FASB Statements 87, 88 and 106. Under FAS 87, pension expense is recognized on an accrual basis over

F-19

---



employees'
approximate service periods. Pension expense calculated under FAS 87 is generally independent of funding decisions or requirements. The Company recognized expense for its defined benefit
pension plans of $3.8 million and $2.8 million in 2004 and 2003, respectively.

The
fair value of the Company's pension plans' assets increased from $301.9 million at December 31, 2003 to $380.9 million at December 31, 2004. The Company
contributed $28.3 million in cash to its defined benefit pension plans in 2004.

The
calculation of pension expense and the Company's pension liability requires the use of a number of assumptions. Changes in these assumptions can result in different expense and
liability amounts, and future actual experience can differ from the assumptions. The Company believes that the two most critical assumptions are the expected long-term rate of return on
plan assets and the assumed discount rate.

When
calculating pension expense for 2004, the Company assumed that its plans' assets would generate a long-term rate of return of between 7.4% and 7.9%. This range is higher
than the assumed rates of between 6.6% and 7.9% used to calculate the 2003 expense. The Company determines its expected long-term rate of return assumption based on historical experience
and by evaluating input from the trustee managing the plan's assets, including the trustee's review of asset class return expectations by several consultants and economists as well as
long-term inflation assumptions. The Company's expected long-term rate of return on plan assets is based on a target allocation of assets, which is based on its goal of earning
the highest rate of return while maintaining risk at acceptable levels. The plan strives to have assets sufficiently diversified so that adverse or unexpected results from one security class will not
have an unduly detrimental impact on the entire portfolio.

The
Company discounted its future pension obligations using rates of between 4.8% and 5.3% at December 31, 2004 and rates of between 5.5% and 6.0% for 2003. The Company determined
the appropriate discount rate based on the current rates earned on long-term bonds that receive one of the two highest ratings given by a recognized rating agency. The pension liability
and future pension expense both increase as the discount rate is reduced.

At
December 31, 2004, the Company has unrecognized actuarial losses of $29.9 million. These losses will be recognized as a component of pension expense in future years.

Future
changes in plan asset returns, assumed discount rates and various other factors related to the participants in the Company's pension plans will impact its future pension expense
and liabilities. The Company cannot predict with certainty what these factors will be in the future.

Derivative Financial Instruments

The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. As some of the Company's indebtedness
accrues interest at variable rates, it has exposure to volatility in future cash flows and earnings associated with variable interest rate payments. Also, a substantial portion of the Company's
revenue and operating costs are earned and paid in pounds sterling and, to a lesser extent, euros, but it pays interest and principal obligations on some of its indebtedness in U.S. dollars. As a
result, the Company has exposure to volatility in future cash flows and earnings associated with changes in foreign currency exchange rates on payments of principal and interest on a portion of its
indebtedness.

F-20

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The
Company's objective in managing its exposure to fluctuations in interest rates and foreign currency exchange rates is to decrease the volatility of its earnings and cash flows caused
by changes in underlying rates. To achieve this objective, the Company enters into derivative financial instruments. The Company has established policies and procedures to govern the strategic
management of these exposures through a variety of derivative financial instruments, including interest rate swaps, cross-currency interest rate swaps and foreign currency forward rate contracts. By
policy, the Company does not enter into derivative financial instruments with a level of complexity or with a risk that is greater than the exposure to be managed.

In
accordance with FASB Statement No. 133,Accounting for Derivative Instruments and Hedging Activities(FAS 133), the
Company recognizes derivative financial instruments as either assets or liabilities measured at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use
of the derivative and whether it is designated and qualifies for hedge accounting. To the extent that the derivative instrument is designated and considered to be effective as a cash flow hedge of an
exposure to future changes in interest rates or foreign currency exchange rates, the change in fair value of the instrument is deferred in other comprehensive income. Amounts recorded in other
comprehensive income are reclassified to the income statement to match the corresponding cash flows on the underlying hedged transaction. Changes in fair value of any instrument not designated as a
hedge or considered to be ineffective as a hedge are reported in earnings immediately.

Software Development Costs

The Company capitalizes costs related to computer software developed or obtained for internal use in accordance with SOP 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. Software obtained for internal use has generally been
enterprise-level business and finance software that the Company customizes to meet its specific operational needs. Costs incurred in the application development phase are capitalized and amortized
over their useful lives, generally three to five years. The Company has not sold, leased or licensed software developed for internal use to its customers and the Company has no intention of
doing so in the future.

Income Taxes

The Company provides for income taxes in accordance with FASB Statement No. 109,Accounting for income
taxes. Judgment is required in determining the Company's provision for income taxes, deferred tax assets and liabilities and the extent to which deferred tax assets can be
recognized. The Company recognizes deferred tax assets only if it is more likely than not that sufficient taxable income will be available in the future against which the temporary differences and
unused tax losses can be utilized. The Company has considered future taxable income and tax planning strategies in assessing whether deferred tax assets should be recognized.

Loss from Continuing Operations Per Share and Net Loss Per Share

Basic and diluted loss from continuing operations per share and net loss per share are computed by dividing the loss from continuing operations and net loss
respectively by the average number of shares outstanding during the years ended December 31, 2004, 2003 and 2002, as adjusted for the effect of the rights offering in November 2003.
Options to purchase 3.1 million shares and 0.1 million

F-21

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shares
of restricted stock at December 31, 2004 are excluded from the calculation of diluted net loss per share, since the inclusion of such options and shares is anti-dilutive. The
average number of shares outstanding is computed as follows (in millions):

|                                                   |  | Year Ended December 31,
|-------------------------------------------------- |  | -----------------------
|
|
|Number of shares outstanding at start of period(1) |  | 86.8                   
|Issues of common stock                             |  | 0.4                    
|Adjustment for the effect of the rights offering   |  |                       
|                                                   |  |                        
|Average number of shares outstanding               |  | 87.2                   
|                                                   |  |                        

---

Pro
forma basic and diluted loss from continuing operations per share and net loss per share for periods prior to January 1, 2003 are computed as if the 50.0 million shares
issued in connection with the reorganization plan and the 500,000 shares issued in connection with the issuance of the Exit Notes were outstanding for those periods. Owing to the effect of the rights
offering, the average number of shares outstanding at January 1, 2003 increased by 9.0 million shares.

3.     Recent Accounting Pronouncements

On December 16, 2004, the Financial Accounting Standards Board ("FASB") issued Statement No. 123 (revised 2004),Share Based
Payment(FAS 123R), which is a revision of FAS 123. FAS 123R also supersedes APB 25 and amends FASB Statement No. 95, Statement of Cash Flows. The Company
previously adopted FAS 123 in 2003 as discussed in Note 2. FAS 123R differs from
FAS 123, by requiring all entities to measure liabilities incurred in stock based payment transactions at fair value rather than measuring the liability at its intrinsic value. FAS 123R
requires entities to estimate the number of instruments for which the requisite service period is expected to be rendered rather than accounting for forfeitures as they occur. Under FAS 123R,
modifications to the terms or conditions of an award are measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification, as opposed to
measuring the effects of a modification as the difference between the fair value of the modified award at the date it is granted and the awards value immediately before the modification.
FAS 123R will also clarify and expand current guidance under FAS 123 including the measurement of fair value, classifying an award as either equity or as a liability and attributing
compensation cost to reporting periods. FAS 123R amends FAS 95 requiring that the excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. The
statement is effective in the first interim or annual reporting period beginning after June 15, 2005.

FAS 123R
provides two alternatives for adoption: (1) a "modified prospective" method in which compensation cost is recognized for all awards granted subsequent to the
effective date of this statement as well as for the unvested portion of awards outstanding as of the effective date and (2) a "modified retrospective" method which follows the approach in the
"modified prospective" method, but also permits entities to restate prior periods to reflect compensation cost calculated under FAS 123 for pro forma amounts disclosure. The Company plans to
adopt FAS 123R using the modified prospective

F-22

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method.
As the Company currently accounts for share based payments to employees in accordance with the fair value method under FAS 123, the adoption of FAS 123R is not expected to have a
significant impact on the Company's results of operations or financial position.

In
December 2004, the FASB issued Staff Position No. FAS 109-1,Application of FASB Statement No. 109, Accounting for Income Taxes, to the
Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004. Also in December 2004, the FASB issued Staff Position No. FAS 109-2, Accounting and Disclosure
Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004.The Company does not
expect the adoption of these new tax provisions to have a material impact on its consolidated financial position, results of operations, or cash flows, since the Company does not have any substantive
operations in the U.S.

4.     Discontinued Operations

On December 1, 2004, the Company reached an agreement to sell its broadcast operations, a provider of commercial television and radio transmission
services, to a consortium led by Macquarie Communications Infrastructure Group. The sale completed on January 31, 2005. Accordingly, as of December 31, 2004, the Company has accounted
for the broadcast operations as discontinued operations. Revenue of the broadcast operations, reported in discontinued operations, for the years ended December 31, 2004, 2003 and 2002 was
$509.0 million, $439.2 million and $386.6 million respectively. Broadcast's pre-tax income, reported within discontinued operations, for the years ended
December 31, 2004, 2003 and 2002, was $20.5 million, $34.0 million and $82.1 million respectively. Prior year financial statements for 2003 and 2002 have been restated to
present the broadcast operations as discontinued operations.

The
assets and liabilities of the broadcast operations reported as held-for-sale include (in millions):

|                             |                          | December 31,                
|---------------------------- | ------------------------ | ----------------------------
|
|Current assets held for sale |                          |                             
|                             | Accounts receivable, net |                             
|                             | Prepaid expenses         |                             
|                             | Other current assets     |                             
|                             |                          |                             
|                             |                          | Current assets held for sale
|                             |                          |                             

|                           |                                                                            | December 31,               |  
|-------------------------- | -------------------------------------------------------------------------- | -------------------------- | -
|
|Other assets held for sale |                                                                            |                            |  
|                           | Fixed assets, net                                                          |                            | $
|                           | Reorganization value in excess of amounts allocable to identifiable assets |                            |  
|                           | Customer lists, net                                                        |                            |  
|                           | Investments in and loans to affiliates, net                                |                            |  
|                           | Other assets                                                               |                            |  
|                           |                                                                            |                            |  
|                           |                                                                            | Other assets held for sale |  
|                           |                                                                            |                            |  

F-23

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|                                               |                  | December 31,
|---------------------------------------------- | ---------------- | ------------
|
|Current liabilities of discontinued operations |                  |             
|                                               | Accounts payable |             
|                                               | Accrued expenses |             
|                                               | Deferred revenue |             
|                                               |                  |             
|                                               |                  | $           
|                                               |                  |             

|                                                 |                             | December 31,
|------------------------------------------------ | --------------------------- | ------------
|
|Long-term liabilities of discontinued operations |                             |             
|                                                 | Deferred income taxes       |             
|                                                 | Other long-term liabilities |             
|                                                 |                             |             
|                                                 |                             | $           
|                                                 |                             |             

5.     Asset Impairments

Asset impairment charges were $445.1 million in the year ended December 31, 2002. These charges are non-cash charges to
write-down certain assets to their estimated fair values based on an assessment that their carrying value was not recoverable. These charges include fixed assets of $56.0 million,
license acquisition costs of $29.0 million and goodwill of $360.1 million. The charge with respect to fixed assets was estimated based upon the technological obsolescence of certain
network and other equipment. The charge with respect to license acquisition costs and goodwill was determined in accordance with FAS 142.

There
were no asset impairment charges recorded in the years ended December 31, 2003 and 2004.

6.     Acquisitions and Disposals

On November 8, 2004, the Company acquired Virgin Media Group's remaining interests in Virgin Net Limited, together with all the remaining minority
interests held by existing and former management, for £23.9 million, or $43.8 million. These acquisitions have taken the Company's ownership of Virgin Net Limited, the joint
venture formed by Virgin and the Company in 1996, to 100 per cent. The Company has accounted for the acquisition under the purchase method of accounting in FASB Statement No. 141, Business Combinations. The Company has consolidated the results of operations of Virgin Net in its income statement from November 8, 2004. Prior
to that date, the Company accounted for its investment in Virgin Net Limited using the equity method of accounting.

On
December 1, 2004, the Company reached an agreement to sell its broadcast operations, a provider of commercial television and radio transmission services, to a consortium led by
Macquarie Communications Infrastructure Group. The sale completed on January 31, 2005. See Note 4Discontinued Operations.

F-24

---



7.     Fixed Assets

Fixed assets consist of (in millions):

|                         |                             |                           |                                      | December 31, |         
|------------------------ | --------------------------- | ------------------------- | ------------------------------------ | ------------ | --------
|
|
|Operating equipment      |                             |                           |                                      |              |         
|                         | Cable distribution plant    |                           | 830 years                           |              | $       
|                         | Switches and headends       |                           | 810 years                           |              |         
|                         | Customer premises equipment |                           | 510 years                           |              |         
|                         | Other operating equipment   |                           | 820 years                           |              |         
|                         |                             |                           |                                      |              |         
|                         |                             | Total operating equipment |                                      |              |         
|Other equipment          |                             |                           |                                      |              |         
|                         | Land                        |                           |                                     |              |         
|                         | Buildings                   |                           | 30 years                             |              |         
|                         | Leasehold improvements      |                           | 20 years or, if less,
the lease term |              |         
|                         | Computer infrastructure     |                           | 35 years                            |              |         
|                         | Other equipment             |                           | 512 years                           |              |         
|                         |                             |                           |                                      |              |         
|                         |                             | Total other equipment     |                                      |              |         
|                         |                             |                           |                                      |              |         
|                         |                             |                           |                                      |              | 9,246.0 
|Accumulated depreciation |                             |                           |                                      |              | (2,409.9
|                         |                             |                           |                                      |              |         
|                         |                             |                           |                                      |              | 6,836.1 
|Construction in progress |                             |                           |                                      |              | 97.7    
|                         |                             |                           |                                      |              |         
|                         |                             |                           |                                      | $            | 6,933.8 
|                         |                             |                           |                                      |              |         

F-25

---



8.     Intangible Assets

Intangible assets consist of (in millions):

|                                               |                                                                            |                        |  | December 31,
|---------------------------------------------- | -------------------------------------------------------------------------- | ---------------------- |  | ------------
|
|
|Intangible assets not subject to amortization: |                                                                            |                        |  |             
|                                               | Reorganization value in excess of amounts allocable to identifiable assets |                        |  |             
|                                               |                                                                            |                        |  |             
|Intangible assets subject to amortization:     |                                                                            |                        |  |             
|                                               | Cost                                                                       |                        |  |             
|                                               |                                                                            | Non-compete agreements |  | 1 year      
|                                               |                                                                            | Trademark licences     |  | 5 years     
|                                               |                                                                            | Customer lists         |  | 35 years   
|                                               |                                                                            |                        |  |             
|                                               |                                                                            |                        |  |             
|                                               |                                                                            |                        |  |             
|                                               | Accumulated amortization                                                   |                        |  |             
|                                               |                                                                            | Non-compete agreements |  |             
|                                               |                                                                            | Trademark licences     |  |             
|                                               |                                                                            | Customer lists         |  |             
|                                               |                                                                            |                        |  |             
|                                               |                                                                            |                        |  |             
|                                               |                                                                            |                        |  |             
|                                               |                                                                            |                        |  | $           
|                                               |                                                                            |                        |  |             

Estimated
aggregate amortization expense for each of the five succeeding fiscal years from December 31, 2004 is as follows: $215.8 million in 2005, $209.5 million in
2006, $208.3 million in 2007, $68.2 million in 2008 and $6.7 million in 2009.

The
change in the carrying amount of reorganization value in excess of amounts allocable to identifiable assets during the year ended December 31, 2004 is as follows (in
millions):

|Reorganization value in excess of amounts allocable to identifiable assetsJanuary 1, 2004   |  | $ | 363.8 |  
|-------------------------------------------------------------------------------------------- |  | - | ----- | -
|Foreign currency exchange translation adjustments                                            |  |   | 27.2  |  
|Adjustment to deferred tax accounts                                                          |  |   | (7.4  | )
|                                                                                             |  |   |      
|Reorganization value in excess of amounts allocable to identifiable assetsDecember 31, 2004 |  | $ | 383.6 |  
|                                                                                             |  |   |      

The
increase in reorganization value in excess of amounts allocable to identifiable assets during the year ended December 31, 2004 includes a tax benefit of $7.4 million
that is primarily attributable to the use of deferred tax assets that existed as of January 10, 2003 that were previously offset by a valuation allowance.

F-26

---



9.   Leases

A summary of assets held under capital leases are as follows (in millions).

|                               |  | December 31, |      
|------------------------------ |  | ------------ | -----
|
|Cable distribution plant       |  | $            | 57.8 
|Switches and headends          |  |              | 4.8  
|                               |  |              |      
|                               |  |              | 62.6 
|Less: accumulated depreciation |  |              | (14.5
|                               |  |              |      
|                               |  | $            | 48.1 
|                               |  |              |      

Amortization
of assets held under capital leases is included within the depreciation expense.

Future
minimum annual payments at December 31, 2004 are as follows (in millions). The table reflects the Company's contractual obligations.

|                                         |      | Capital
Leases |        | Operating
Leases
|---------------------------------------- | ---- | -------------- | ------ | ----------------
|Year ended December 31:                  |      |                |        |                 
|                                         | 2005 |                | $      | 8.8             
|                                         | 2006 |                |        | 8.4             
|                                         | 2007 |                |        | 8.3             
|                                         | 2008 |                |        | 7.8             
|                                         | 2009 |                |        | 7.7             
|Thereafter                               |      |                | 189.6  |                 
|                                         |      |                |        |                 
|Total minimum lease payments             |      |                | 230.6  |                 
|                                         |      |                |        |                 
|Less: amount representing interest       |      |                | (156.0 | )               
|                                         |      |                |        |                 
|Present value of net minimum obligations |      |                | 74.6   |                 
|Less: current portion                    |      |                | (1.3   | )               
|                                         |      |                |        |                 
|                                         |      | $              | 73.3   |                 
|                                         |      |                |        |                 

Leases
for buildings, offices space and equipment extend through 2031. Total rental expense for the years ended December 31, 2004, 2003, and 2002 under operating leases was
$135.8 million, $110.0 million and $123.7 million respectively.

F-27

---



10.     Long-Term Debt

Long-term debt consists of (in millions):

|                                                                             |  | December 31,
2004 |         | December 31,
2003 |  
|---------------------------------------------------------------------------- |  | ----------------- | ------- | ----------------- | -
|8.75% Senior Notes due 2014                                                  |  | $                 | 425.0   |                   | $
|9.75% Sterling Senior Notes due 2014                                         |  |                   | 718.5   |                   |  
|8.75% Euro Senior Notes due 2014                                             |  |                   | 304.6   |                   |  
|Floating Rate Senior Notes due 2012                                          |  |                   | 100.0   |                   |  
|Senior credit facility                                                       |  |                   | 4,148.1 |                   |  
|11.2% Senior Discount Debentures, less unamortized discount of $115.4 (2003) |  |                   |        |                   |  
|10% Senior Sterling Notes, less unamortized discount of $38.7 (2003)         |  |                   |        |                   |  
|91/8% Senior Notes, less unamortized discount of $26.5 (2003)                |  |                   |        |                   |  
|Capital leases                                                               |  |                   | 74.6    |                   |  
|Other                                                                        |  |                   | 3.1     |                   |  
|                                                                             |  |                   |         |                   |  
|                                                                             |  |                   | 5,773.9 |                   |  
|Less: current portion                                                        |  |                   | (116.8  | )                 |  
|                                                                             |  |                   |         |                   |  
|                                                                             |  | $                 | 5,657.1 |                   | $
|                                                                             |  |                   |         |                   |  

The
effective interest rates on the variable interest rate debt were as follows:

|                                    |                    | December 31, |     
|----------------------------------- | ------------------ | ------------ | ----
|
|Floating Rate Senior Notes due 2012 |                    | 7.07         | %   
|Senior credit facility              |                    |              |     
|                                    | Revolving facility |              |    
|                                    | Term facility      |              | 7.13

In
April 2004 the Company completed its refinancing transaction from which it raised approximately $5.9 billion of new indebtedness and repaid approximately
$5.5 billion of its existing indebtedness. The refinancing transaction extended the maturities on substantially all of the Company's debt and lowered its weighted average interest expense. In
particular:



F-28

---





The
refinancing transaction resulted in a loss on extinguishment of debt as follows (in millions):

|Redemption price               |                         |  |   |         | $ | 5,508.9
|------------------------------ | ----------------------- |  | - | ------- | - | -------
|Net carrying amount:           |                         |  |   |         |   |        
|                               | Face value              |  | $ | 5,497.5 |   |        
|                               | Unamortized discount    |  |   | (163.3  | ) |        
|                               | Unamortized issue costs |  |   | (115.4  | ) |        
|                               |                         |  |   |         |  
|                               |                         |  |   |         |   | 5,218.8
|                               |                         |  |   |         |  
|Loss on extinguishment of debt |                         |  |   |         | $ | 290.1  
|                               |                         |  |   |         |  

Outstanding Public Notes

The terms of the Senior Notes and senior credit facility as at December 31, 2004 are summarized below.

Senior Notes



Senior credit facility



F-29

---





The
agreements governing the Senior Notes and the senior credit facility significantly restrict the ability of the Company's subsidiaries to transfer funds to the Company in the form of
cash dividends, loans or advances. In addition, the agreements significantly, and, in some cases, absolutely restrict the Company's ability and the ability of most of its subsidiaries to:



During
2004, 2003 and 2002, the Company recognized $17.2 million, $58.8 million and $96.7 million, respectively, of original issue discount as interest expense.

Long-term
debt repayments, excluding capital leases, as of December 31, 2004 are due as follows (in millions).

|Year ended December 31: |  |   |        
|----------------------- |  | - | -------
|2005                    |  | $ | 115.4  
|2006                    |  |   | 229.6  
|2007                    |  |   | 365.7  
|2008                    |  |   | 497.5  
|2009                    |  |   | 489.1  
|Thereafter              |  |   | 4,002.0
|                        |  |  
|Total debt payments     |  | $ | 5,699.3
|                        |  |  

On
February 4, 2005, the Company voluntarily prepaid £500 million of the senior credit facility which included the scheduled repayments due in 2005. As a
consequence, scheduled repayments in

F-30

---



2006
and beyond have also reduced. The effects of the voluntary prepayment are not reflected in the table above.

11.   Derivative Financial Instruments

The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. As some of the Company's indebtedness
accrues interest at variable rates, it has exposure to volatility in future cash flows and earnings associated with variable interest rate payments. Also, substantially all of the Company's revenue
and operating costs are earned and paid in pounds sterling and, to a lesser extent, euros, but it pays interest and principal obligations on some of its indebtedness in U.S. dollars. As a result, the
Company has exposure to volatility in future cash flows and earnings associated with changes in foreign currency exchange rates on payments of principal and interest on a portion of its indebtedness.

The
Company's objective in managing its exposure to fluctuations in interest rates and foreign currency exchange rates is to decrease the volatility of its earnings and cash flows caused
by changes in underlying rates. To achieve this objective, the Company enters into derivative financial instruments. The Company has established policies and procedures to govern the strategic
management of these exposures through a variety of derivative financial instruments, including interest rate swaps, cross-currency interest rate swaps and foreign currency forward rate contracts. By
policy, the Company does not enter into derivative financial instruments with a level of complexity or with a risk that is greater than the exposure to be managed.

In
accordance with FAS 133, the Company recognizes derivative financial instruments as either assets or liabilities measured at fair value. Gains and losses resulting from changes
in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. To the extent that the derivative instrument is designated and
considered to be effective as a cash flow hedge of an exposure to future changes in interest rates or foreign currency exchange rates, the change in fair value of the instrument is deferred in other
comprehensive income. Amounts recorded in other comprehensive income are reclassified to the income statement to match the corresponding cash flows on the underlying hedged transaction. Changes in
fair value of any instrument not designated as a hedge or considered to be ineffective as a hedge are reported in earnings immediately.

F-31

---



The
fair values of the Company's derivative instruments were as follows (in millions):

|                                                                 |                                         | December 31,
|---------------------------------------------------------------- | --------------------------------------- | ------------
|
|Included within other assets:                                    |                                         |             
|                                                                 | Interest rate swaps                     |             
|                                                                 |                                         |             
|Included within other current liabilities:                       |                                         |             
|                                                                 | Foreign currency forward rate contracts |             
|                                                                 |                                         |             
|Included within deferred revenue and other long-term liabilities |                                         |             
|                                                                 | Foreign currency forward rate contracts |             
|                                                                 | Interest rate swaps                     |             
|                                                                 |                                         |             
|                                                                 |                                         | $           
|                                                                 |                                         |             

Interest Rate SwapsHedging of Interest Rate Sensitive Obligations

As of December 31, 2004, the Company has entered into interest rate swap agreements to manage the exposure to variability in future cash flows on the
interest payments associated with £1,250 million of its outstanding senior credit facility, which accrues at variable rates based on LIBOR. The interest rate swaps allow the Company
to receive interest based on LIBOR in exchange for payments of interest at fixed rates of 5.30% and 5.10%. The interest rate swaps became effective on October 14, 2004 and mature on
April 14, 2007. The net settlement of $1.6 million under the hedges is included within interest expense for the year ended December 31, 2004.

The
Company has designated these interest rate swaps as cash flow hedges under FAS 133, because they hedge against changes in the amount of future cash flows attributable to
changes in LIBOR. As of December 31, 2004, the Company recorded $25.1 million of unrealized losses in accumulated other comprehensive income (loss) as a result of the decrease in fair
market value of these interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Cross-Currency Interest Rate SwapsHedging the Interest Payments of Senior Notes and senior credit facility

At December 31, 2004, the Company has entered into cross-currency interest rate swaps with principal amounts of $920.2 million and
€151.0 million. The Company currently hedges the pound sterling value of interest payments on the U.S. dollar denominated 8.75% Senior Notes due 2014, interest payments on its
U.S. dollar denominated Floating Rate Notes due 2012, interest payments on its U.S. dollar denominated senior credit facility, and the pound sterling value of interest payments on the euro denominated
senior credit facility. Under these cross-currency swaps, the Company receives interest in U.S. dollars at a fixed rate of 8.75% and variable rate based on LIBOR, and in euros at variable rate based
on LIBOR, in exchange for payments of interest in pound sterling at a fixed rate of 9.42%, and variable rate LIBOR based on the pound sterling equivalent of $920.2 million and
€151.0 million. The net settlement of $4.6 million under the hedges is included within interest expense for the year ended December 31, 2004.

F-32

---



The
Company has designated these cross-currency swaps as cash flow hedges under FAS 133 because they hedge the changes in the pound sterling value of the interest payments on its
U.S. dollar denominated Senior Notes and U.S. dollar and euro denominated senior credit facility, that result from changes in the U.S. dollar, euro and pound sterling exchange rates. As of
December 31, 2004, the Company recorded $23.1 million of unrealized losses and $2.3 million of unrealized gains in accumulated other comprehensive income (loss) as a result of the
changes in fair market value of these cross currency interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Foreign Currency Forward Rate ContractsHedging the Principal Obligations of the U.S. Dollar Senior Notes and senior credit facility

As of December 31, 2004, the Company has entered into foreign currency forward rate contracts to purchase $820.2 million and
€151.0 million, maturing in April 2009. These contracts hedge changes in the pound sterling, U.S. dollar and euro value of the principal obligation of the 8.75% Senior
Note due 2014, and variable rate LIBOR senior credit facility, caused by changes in the U.S. dollar, euro and pound sterling exchange rates.

Foreign Currency Forward Rate ContractsHedging the stock repurchase program

As of December 31, 2004, the Company has entered into foreign currency forward rate contracts to sell £100 million and option contracts
to sell an additional £100 million maturing in March 2005. These contracts are associated with the Company's recently announced stock repurchase program and hedge changes in
the pound sterling value of the Company's stock price caused by changes in the U.S. dollar pound sterling exchange rate. On January 31, 2005, the Company announced that it intends to use up to
£475 million of the proceeds from the sale of the broadcast operations to repurchase shares of its common stock. In February 2005, the Company used approximately
$130 million to effect repurchases in the open market.

The
forward rate contracts are not effective hedges under FAS 133.As such, the contracts are carried at fair value on the
Company's balance sheet with changes in the fair value recognized immediately in the income statement. The forward rate contracts do not subject the Company to material volatility in its earnings and
cash flows because changes in the fair value directionally and partially mitigate the gains or losses on the translation of its U.S. dollar denominated debt into its functional currency pound sterling
in accordance with FASB Statement No. 52, "Foreign Currency Translation". Changes in fair value of these contracts are reported with foreign
exchanges gains (losses).

Net
changes in the fair value of the forward rate contracts recognized in (loss) from continuing operations for the three years ended December 31, 2004 were as follows (in
millions):

|                                                 |  | Year Ended December 31,
|------------------------------------------------ |  | -----------------------
|
|
|Net loss in fair value of forward rate contracts |  | $                      

F-33

---



12.   Fair Values of Financial Instruments

The Company in estimating its fair value disclosures for financial instruments used the following methods and assumptions:

Cash and cash equivalents, and restricted cash:The carrying amounts reported in the consolidated balance sheets approximate
fair value.

Marketable securities:The carrying amounts reported in the consolidated balance sheets approximate fair value.

Long-term debt:The carrying amounts of the bank credit facilities approximate their fair values. The fair values
of the Company's other debt in the following table are based on the quoted market prices.

The
carrying amounts and fair values of the Company's financial instruments are as follows (in millions):

|                          |                                      | December 31, 2004 |       | December 31, 2003
|------------------------- | ------------------------------------ | ----------------- | ----- | -----------------
|
|Cash and cash equivalents |                                      | $                 | 240.0 |                  
|Restricted cash           |                                      |                   | 31.4  |                  
|Marketable securities     |                                      |                   | 22.1  |                  
|Long-term debt:           |                                      |                   |       |                  
|                          | 8.75% Senior Notes due 2014          |                   | $     | 425.0            
|                          | 9.75% Sterling Senior Notes due 2014 |                   |       | 718.5            
|                          | 8.75% Euro Senior Notes due 2014     |                   |       | 304.6            
|                          | Floating Rate Senior Notes due 2012  |                   |       | 100.0            
|                          | Senior credit facility               |                   |       | 4,148.1          
|                          | 11.2% Debentures                     |                   |       |                 
|                          | 10% Sterling Notes                   |                   |       |                 
|                          | 91/8% Notes                          |                   |       |                 

F-34

---





NTL INCORPORATED AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.   Stock-Based Compensation Plans

At December 31, 2004, the Company has a number of stock-based compensation plans, which are described below. The Company accounts for the fair value of its
grants under these plans in accordance with FAS 123. The compensation cost that has been charged against income for these plans was $26.4 million, $12.6 million and $nil for 2004,
2003 and 2002, respectively.



The NTL Stock Option Plans are intended to provide incentives to certain employees of the Company and its subsidiaries to foster and promote the
long-term growth and performance of the Company and to better align such employees' interests with the stockholders of the Company. Under the NTL Stock Option Plans, options to purchase up
to 8.6 million shares of the Company's common stock may be granted from time to time to certain employees of the Company and its subsidiaries. Accordingly, the Company has reserved
8.6 million shares of common stock for issuance under the NTL Stock Option Plans.

All
options have a 10 year term and vest and become fully exercisable over a period of 3 to 5 years of continued employment. For the NTL Stock Option Plans, the Company
adopted the fair value recognition provisions of FAS 123. Under the prospective method of adoption selected by the Company under the provisions of FAS 148, the recognition provisions
have been applied to all employee awards granted, modified, or settled after January 1, 2003.

Prior
to 2003, the Company's employees participated in the various stock option plans of its former ultimate parent company. The Company accounted for stock options using the intrinsic
value method under APB 25 and related Interpretations.

Pro
forma information regarding net income and earnings per share, as presented in Note 2, is required by FAS 123, as amended by FAS 148, and has been determined as
if the Company had accounted for its employee stock options under the fair value method of that Statement upon its initial effective date. The fair value for these options was estimated at the date of
grant using a Black-Scholes option-pricing model with the following weighted-average assumptions for 2004, 2003 and 2002:

|                        |  | For the Year ended December 31,
|----------------------- |  | -------------------------------
|
|
|Risk-free Interest Rate |  | 3.97%                          
|Expected Dividend Yield |  | 0%                             
|Expected Volatility     |  | 0.837                          
|Expected Lives          |  | 3.438                          

F-35

---



A
summary of the activity and related information of the NTL Stock Option Plans and the Company's former parent's stock option plans for the years ended December 31 is as follows:

|                                                                          |  | 2004 |       | 2003 |   | 2002 
|------------------------------------------------------------------------- |  | ---- | ----- | ---- | - | -----
|
|
|
|Outstanding-beginning of year                                             |  |      | 3.2   |      | $ | 13.85
|Granted                                                                   |  |      | 0.8   |      |   | 47.04
|Exercised                                                                 |  |      | (0.7  | )    |   | 13.03
|Expired                                                                   |  |      |      |      |   |     
|Forfeited                                                                 |  |      | (0.2  | )    |   | 12.67
|                                                                          |  |      |       |      |   |      
|Outstanding-end of year                                                   |  |      | 3.1   |      | $ | 22.84
|                                                                          |  |      |       |      |   |      
|Exercisable at end of the year                                            |  |      | 0.4   |      | $ | 20.51
|                                                                          |  |      |       |      |   |      
|Weighted-average grant date fair value of options granted during the year |  | $    | 50.21 |      |   |      
|                                                                          |  |      |       |      |   |      

All
of the options to purchase shares of the Company's former ultimate parent company were cancelled on the Effective Date pursuant to the reorganization plan.

Exercise
prices for options outstanding as of December 31, 2004 are as follows:

|Range of exercise prices |  | Number of options
outstanding |  | Weighted average
exercise price |       | Weighted average
remaining
contractual life |     | Number of shares
currently
exercisable |         | Weighted average
exercise price
|------------------------ |  | ----------------------------- |  | ------------------------------- | ----- | ------------------------------------------- | --- | -------------------------------------- | ------- | -------------------------------
|$0.01                    |  | 200,000                       |  | $                               | 0.01  |                                             | 9.3 |                                        | 33,333  |                                
|$9.00 to $15.00          |  | 2,242,677                     |  |                                 | 13.39 |                                             | 8.3 |                                        | 317,477 |                                
|$40.00 to $50.00         |  | 160,000                       |  |                                 | 44.53 |                                             | 9.1 |                                        | 25,000  |                                
|$50.01 to $60.00         |  | 131,300                       |  |                                 | 59.08 |                                             | 9.3 |                                        | 2,500   |                                
|$60.01 to $70.00         |  | 207,000                       |  |                                 | 60.40 |                                             | 9.7 |                                        |        |                                
|$70.01 to $80.00         |  | 200,000                       |  |                                 | 71.60 |                                             | 9.0 |                                        | 40,000  |                                

NTL Group Bonus Schemes

Participants in the NTL Group Bonus Schemes are eligible to receive a bonus payment equal to a percentage of their base salary as determined by their level of
employment based upon the attainment of performance targets. Bonus payments are made in two installments. Half of the bonus owing to various participants is payable in cash and the other half may, at
the Company's discretion, be paid in shares of common stock.

In
accordance with the NTL Group Bonus Schemes, 33,259 shares were awarded in June 2003, 38,265 shares were awarded in December 2003 and 27,819 shares were awarded in
June 2004.

F-36

---



Restricted Stock Grants

The Company has granted a total of 267,500 shares of restricted common stock to its chairman and certain employees. The shares vest over periods of up to three
years. The Company has also granted a total of 40,000 shares of restricted common stock to persons who were then employees of W.R. Huff Asset Management Co., L.L.C. or its affiliates, as
discussed in Note 17.

In
connection with its emergence from Chapter 11, the Company granted a total of 133,912 shares of restricted common stock to its then-executive officers and other employees.

14.   Employee Benefit Plans

Certain subsidiaries of the Company operate defined benefit pension plans in the United Kingdom and Republic of Ireland. The assets of the Plans are held
separately from those of the Company and are invested in specialized portfolios under the management of an investment group. The pension cost is calculated using the projected unit method. The
Company's policy is to fund amounts to the defined
benefit plans necessary to comply with the funding requirements as prescribed by the laws and regulations in the United Kingdom and the Republic of Ireland.

The
Company's defined benefit pension plans use a measurement date of December 31:

Obligations and Funded Status

|                                        |  | Year Ended December 31, |      
|--------------------------------------- |  | ----------------------- | -----
|
|
|Change in Projected Benefit Obligation  |  |                         |      
|Benefit obligation at beginning of year |  | $                       | 458.8
|Service cost                            |  |                         | 12.0 
|Interest cost                           |  |                         | 25.8 
|Members contributions                   |  |                         | 3.5  
|Plan amendments                         |  |                         |     
|Actuarial losses                        |  |                         | 31.4 
|Benefits paid                           |  |                         | (12.3
|FAS 88 events                           |  |                         | 2.4  
|Expenses                                |  |                         |     
|Foreign currency exchange rate changes  |  |                         | 37.1 
|                                        |  |                         |      
|Benefit obligation at end of year       |  | $                       | 558.7
|                                        |  |                         |      

F-37

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|                                               |  | Year Ended December 31, |      
|---------------------------------------------- |  | ----------------------- | -----
|
|
|Change in Plan Assets                          |  |                         |      
|Fair value of plan assets at beginning of year |  | $                       | 301.9
|Actual return on plan assets                   |  |                         | 34.7 
|Employer contributions                         |  |                         | 28.3 
|Employee contributions                         |  |                         | 3.5  
|FAS 88 events                                  |  |                         |     
|Benefits paid                                  |  |                         | (12.3
|Expenses                                       |  |                         |     
|Foreign currency exchange rate changes         |  |                         | 24.8 
|                                               |  |                         |      
|Fair value of plan assets at end of year       |  | $                       | 380.9
|                                               |  |                         |      

|                                   |  | Year Ended December 31, |       
|---------------------------------- |  | ----------------------- | ------
|
|
|Funded status                      |  | $                       | (177.8
|Unrecognized net losses            |  |                         | 29.9  
|Unamortized prior service costs    |  |                         | 0.1   
|Unrecognized transition obligation |  |                         |      
|                                   |  |                         |       
|Net amount recognized              |  | $                       | (147.8
|                                   |  |                         |       

|                                                                      |  | Year Ended December 31, |       
|--------------------------------------------------------------------- |  | ----------------------- | ------
|
|
|Amounts Recognized in the Statement of Financial Position Consist of: |  |                         |       
|Prepaid benefit cost                                                  |  | $                       |      
|Accrued benefit liability                                             |  |                         | (151.9
|Intangible asset                                                      |  |                         |      
|Accumulated other comprehensive income                                |  |                         | 4.1   
|Other                                                                 |  |                         |      
|                                                                      |  |                         |       
|Net amount recognized                                                 |  | $                       | (147.8
|                                                                      |  |                         |       

The
accumulated benefit obligation for all defined benefit plans was $511.4 million and $424.1 million at December 31, 2004 and 2003, respectively.

F-38

---



Information for pension plans with an accumulated benefit obligation in excess of plan assets

|                               |  | Year Ended December 31,
|------------------------------ |  | -----------------------
|
|
|Accumulated benefit obligation |  | $                      
|Fair value of plan assets      |  |                        

Information for pension plans with an projected benefit obligation in excess of plan assets

|                             |  | Year Ended December 31,
|---------------------------- |  | -----------------------
|
|
|Projected benefit obligation |  | $                      
|Fair value of plan assets    |  |                        

Components of Net Periodic Benefit Costs

|                                      |  | Year ended December 31, |      
|------------------------------------- |  | ----------------------- | -----
|
|
|
|Service cost                          |  | $                       | 12.0 
|Interest cost                         |  |                         | 25.8 
|Expected return on plan assets        |  |                         | (25.7
|Amortization of transition obligation |  |                         |     
|Amortization of prior service costs   |  |                         |     
|Recognized actuarial loss             |  |                         | (0.1 
|FAS 88 adjustment                     |  |                         | 2.4  
|                                      |  |                         |      
|Total net periodic benefit cost       |  | $                       | 14.4 
|                                      |  |                         |      

The
Company has retained the earned pension and other post-retirement benefits liabilities related to the broadcast operations. Accordingly, the information disclosed in the
tables above includes continuing and discontinued operations.

Additional Information

|                                                                     |  | December 31,
|-------------------------------------------------------------------- |  | ------------
|
|
|Increase in minimum liability included in other comprehensive income |  | $           

F-39

---



Assumptions

Weighted-average assumptions used to determine benefit obligations

|                              |  | December 31, |  
|----------------------------- |  | ------------ | -
|
|Discount rate                 |  | 5.24         | %
|Rate of compensation increase |  | 3.03         | %

Weighted-average
assumptions used to determine net periodic benefit costs

|                                                 |  | December 31, |  
|------------------------------------------------ |  | ------------ | -
|
|Discount rate                                    |  | 5.51         | %
|Expected long-term rate of return on plan assets |  | 7.49         | %
|Rate of compensation increase                    |  | 3.02         | %

Where
investments are held in bonds and cash, the expected long-term rate of return is taken to be yields generally prevailing on such assets at the measurement date. The
higher rate of return is expected on equity investments, which is based more on realistic future expectations than on the returns that have been available historically. The overall expected
long-term rate on assets is then the average of these rates taking into account the underlying assets portfolios of the pension plans.

Plan Assets

NTL's pension plan weighted-average assets allocations at December 31, 2004, and 2003, by asset category are as follows:

|                  |       | December 31, |      
|----------------- | ----- | ------------ | -----
|
|Asset Category    |       |              |      
|Equity Securities |       | 66.7         | %    
|Debt Securities   |       | 31.6         | %    
|Real Estate       |       | 0.2          | %    
|Other             |       | 1.5          | %    
|                  |       |              |      
|                  | Total |              | 100.0
|                  |       |              |      

The
trustees of the main defined benefit pension plan, which makes up over 80% of the assets of the five defined benefit pension plans of the company, have in place an agreement with the
investment managers that targets an allocation of 64% equities and 36% bonds and cash at December 31, 2004. Deviations from these central targets are permitted from time to time. Because the
main defined benefit pension plan is now closed to new entrants, the investment strategy is moving towards a higher proportion of bonds over time to reflect the steadily maturing profile of
liabilities.

There
were no shares of the Company's common stock included in the Equity Securities at December 31, 2004 and 2003 respectively.

F-40

---



Cash flows

Contributions

At December 31, 2004, all of the Company's pension plans have projected benefit obligations exceeding plan assets totaling $177.8 million. The
Company will need to fund these deficits in accordance with the laws and regulations of the United Kingdom and the Republic of Ireland. The Company expects to contribute a total of approximately
£60.3 million, or $115.6 million, during 2005, of which £56.6 million ($108.4 million) relates to a single contribution to reduce deficits in two of
the Company's pension plans.

Estimated Future Benefit Payments

The benefits expected to be paid out of the pension plans in total are set out below for each of the next five years and the following fives years in aggregate.
The benefits expected to be paid are based on the same assumptions used to measure the Company's benefit obligation at December 31, 2004 and include estimated future employee services.

|                  |  | Pension Benefits
|----------------- |  | ----------------
|
|2005              |  | $               
|2006              |  |                 
|2007              |  |                 
|2008              |  |                 
|2009              |  |                 
|Years 2010 - 2014 |  |                 

Defined Contribution Pension Plans

The Company's subsidiaries operate defined contribution pension plans in the UK and Republic of Ireland. The Company's expense in relation to these plans was
$17.9 million, $16.5 million and $13.9 million for the years ended December 31, 2004, 2003 and 2002 respectively.

15.   Other Charges Including Restructuring Charges

Other charges of $43.7 million in 2004 relate to the Company's announcement to consolidate call centers and include $22.8 million for involuntary
employee termination and related costs for approximately 2,000 employees, of whom approximately 250 were still employed by the Company at December 31, 2004, $4.4 million for lease exit
costs and $16.5 million for other costs including recruitment and training costs. On April 7, 2004, the Company announced the consolidation over the next 18 months of its 13 UK
customer service call centers into three equipped to handle anticipated expansion of its customer base. Following an internal review, three specialist call centers will be retained and developed and
will be supported by four sales and customer support sites, located throughout the UK. As part of the consolidation, the Company intends to make additional investments in technology and training in
order to streamline processes and generate efficiencies. As of December 31, 2004, the Company has incurred £23.8 million, or $43.7 million, and it expects to incur a
total of approximately £29.0 million, or $55.6 million, of costs to fully execute this program.

F-41

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Other
charges of $37.9 million in 2003 include restructuring charges of $33.9 million and $4.0 million of professional fees. Other charges of $382.7 million
in 2002 include restructuring charges of $98.3 million and non-cash charges of $284.4 million primarily for allowances for the cancellation of receivables from the Company's
former ultimate parent company and certain of its subsidiaries in accordance with the Plan.

Restructuring
charges of $33.9 million and $98.3 million for the years ended December 31, 2003 and 2002, respectively, relate to the Company's actions to reorganize,
re-size and reduce operating costs and create greater efficiency in various areas. An aggregate of $7.5 million of the 2002 restructuring charges were for the write-off
of equipment and other assets that are not in use and will not require any future cash outlays. There were no such costs in 2003. The employee severance and related costs in 2003 were for
approximately 940 employees all of whom were terminated by the Company as of December 31, 2004. These costs in 2002 were for approximately 680 employees to be terminated, all of whom were
terminated by the Company as of December 31, 2004.

The
following table summarizes the restructuring charges incurred and utilized in 2002, 2003 and 2004 (in millions):

|                                                  |  | Involuntary Employee Termination and Related Costs |       | Lease
Exit
Costs |   | Agreement
Modifications |   | Fixed
Assets |       | Other |   | Total |  
|------------------------------------------------- |  | -------------------------------------------------- | ----- | ---------------- | - | ----------------------- | - | ------------ | ----- | ----- | - | ----- | -
|Balance, December 31, 2001                        |  | $                                                  | 66.0  |                  | $ | 33.5                    |   | $            | 27.7  |       | $ |      |  
|Released                                          |  |                                                    | (0.6  | )                |   | (15.1                   | ) |              | (11.5 | )     |   |      |  
|Charged to expense                                |  |                                                    | 31.8  |                  |   | 78.9                    |   |              | 1.2   |       |   | 7.5   |  
|Utilized                                          |  |                                                    | (78.4 | )                |   | (18.6                   | ) |              | (16.2 | )     |   | (7.5  | )
|                                                  |  |                                                    |       |                  |   |                         |   |              |       |       |   |       |  
|Balance, December 31, 2002                        |  |                                                    | 18.8  |                  |   | 78.7                    |   |              | 1.2   |       |   |      |  
|Foreign currency exchange translation adjustments |  |                                                    | 1.6   |                  |   | 13.3                    |   |              | 0.1   |       |   |      |  
|Released                                          |  |                                                    | (3.4  | )                |   | (1.2                    | ) |              | (0.3  | )     |   |      |  
|Charged to expense                                |  |                                                    | 38.9  |                  |   | 0.8                     |   |              | 0.5   |       |   |       |  
|Utilized                                          |  |                                                    | (55.9 | )                |   | (19.5                   | ) |              | (1.0  | )     |   |       |  
|                                                  |  |                                                    |       |                  |   |                         |   |              |       |       |   |       |  
|Balance, December 31, 2003                        |  |                                                    |      |                  |   | 72.1                    |   |              | 0.5   |       |   |      |  
|Foreign currency exchange translation adjustments |  |                                                    | 0.1   |                  |   | 4.5                     |   |              |      |       |   |      |  
|Released                                          |  |                                                    |      |                  |   |                        |   |              |      |       |   |      |  
|Charged to expense                                |  |                                                    | 22.8  |                  |   | 4.4                     |   |              |      |       |   |      |  
|Utilized                                          |  |                                                    | (19.6 | )                |   | (23.3                   | ) |              | (0.2  | )     |   |      |  
|                                                  |  |                                                    |       |                  |   |                         |   |              |       |       |   |       |  
|Balance, December 31, 2004                        |  | $                                                  | 3.3   |                  | $ | 57.7                    |   | $            | 0.3   |       | $ |      |  
|                                                  |  |                                                    |       |                  |   |                         |   |              |       |       |   |       |  

F-42

---





16.   Income Taxes

The expense (benefit) for income taxes consists of the following (in millions):

|               |                 | Year Ended December 31, |     
|-------------- | --------------- | ----------------------- | ----
|
|
|Current:       |                 |                         |     
|               | Federal         |                         | $   
|               | State and local |                         |     
|               | Foreign         |                         |     
|               |                 |                         |     
|Total current  |                 |                         | 3.1 
|               |                 |                         |     
|Deferred:      |                 |                         |     
|               | Federal         |                         |     
|               | Foreign         |                         |     
|               |                 |                         |     
|Total deferred |                 |                         | 7.4 
|               |                 |                         |     
|               |                 | $                       | 10.5
|               |                 |                         |     

The
Company's 2004 current tax expense relates to federal alternative minimum tax, state and local taxes, and to foreign taxes not covered by net operating losses. The deferred tax
expense relates to the use of deferred tax assets that were covered by a valuation allowance that existed as of January 10, 2003.

Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes. Significant components of deferred tax liabilities and assets are as follows (in millions):

|                                            |                                 | December 31, |          
|------------------------------------------- | ------------------------------- | ------------ | ---------
|
|Deferred tax liabilities:                   |                                 |              |          
|                                            | Intangibles                     |              | $        
|                                            | Depreciation and amortization   |              |          
|                                            |                                 |              |          
|Total deferred tax liabilities              |                                 |              | 253.3    
|Deferred tax assets:                        |                                 |              |          
|                                            | Net operating losses            |              |          
|                                            | Capital losses                  |              |          
|                                            | Depreciation and amortization   |              |          
|                                            | Purchase accounting liabilities |              |          
|                                            | Other                           |              |          
|                                            |                                 |              |          
|Total deferred tax assets                   |                                 |              | 14,021.3 
|Valuation allowance for deferred tax assets |                                 |              | (13,768.0
|                                            |                                 |              |          
|Net deferred tax assets                     |                                 |              | 253.3    
|                                            |                                 |              |          
|Net deferred tax liabilities                |                                 | $            |         
|                                            |                                 |              |          

F-43

---



At
December 31, 2004, December 31, 2003 and January 10, 2003, the Company had a valuation allowance against its deferred tax assets to the extent it was not more
likely than not that such assets would be realized in the future. To the extent the Company realizes a benefit attributable to the valuation allowance that existed as of January 10, 2003, such
benefit would reduce excess reorganization value, then reduce other intangible assets existing at that date, then be credited to paid in capital. Substantially all of the valuation allowance at
December 31, 2004 would be treated in this way. In 2004, the Company recognised such a benefit to the extent of $7.4 million, resulting in a deferred tax expense and a reduction in
reorganization value of this amount.

On
the adoption of Fresh Start reporting, adjustments were made to the Company's deferred tax balance, which were refined during 2003 giving rise to an adjustment to reorganization value
in excess of amounts allocable to identifiable assets. The net effect of these adjustments was a decrease in the deferred tax liability of $92.7 million.

As
discussed in note 22, the Company emerged from Chapter 11 bankruptcy on January 10, 2003. The restructuring of the Company's debt gave rise to cancellation of debt
income in 2003, which was non-taxable since the debt cancellation was in connection with a bankruptcy reorganization. However, to the extent that such amount was excluded from U.S. taxable
income, certain tax attributes were subject to reduction, including certain U.S. net operating loss carryforwards. The reduction of tax attributes, which is reflected in the above table, had no impact
on the Company's financial statement position since the deferred tax assets related to these tax attributes were offset by a corresponding valuation allowance. Furthermore, the reorganization caused
an ownership change pursuant to Internal Revenue Service Code Section 382. Section 382 will limit the Company's ability to utilize any remaining U.S. net operating loss carryforwards
that existed at January 10, 2003. In addition, Section 382 will severely limit the Company's ability to utilize remaining U.S. capital loss carryforwards within the five-year
carryforward period.

At
December 31, 2004, the Company had net operating loss carryforwards of approximately $400 million for U.S. federal income tax purposes that expire in varying amounts
commencing in 2010. This excludes net operating loss carryforwards of certain companies that are taxable in both the U.S. and the United Kingdom. In addition, the Company has capital loss
carryforwards of approximately $7.7 billion for U.S. federal income tax purposes that expire in 2006. The Company does not expect to realize any significant benefit from these capital losses
for various reasons, including the Section 382 limitation discussed above. The Company has United Kingdom net operating loss carryforwards of approximately $5.7 billion that have no
expiration date. Pursuant to United Kingdom law, these losses are only available to offset income of the separate entity that generated the loss. A portion of the United Kingdom net operating loss
carryforward relates to dual resident companies, of which the U.S. net operating loss carryforward amount is approximately $2.2 billion. Section 382 will severely limit the Company's
ability to utilize a significant portion of these losses for U.S. purposes. The Company also has United Kingdom capital loss carryforwards of approximately $23.3 billion that have no expiration
date. However, the Company does not expect to realize any significant benefit from these capital losses, which can only be used to the extent the Company generates United Kingdom taxable capital gain
income in the future.

At
December 31, 2004, the Company had fixed assets on which future United Kingdom tax deductions can be claimed of approximately $14.5 billion. The maximum that can be
claimed in any one year is 25% of the remaining balance, after additions, disposals and prior claims.

F-44

---



The
reconciliation of income taxes computed at U.S. federal statutory rates to income tax expense is as follows (in millions):

|                                          |                                          | Year Ended December 31, |       
|----------------------------------------- | ---------------------------------------- | ----------------------- | ------
|
|
|(Benefit) at federal statutory rate (35%) |                                          | $                       | (311.5
|Add:                                      |                                          |                         |       
|                                          | Non-deductible assets impairments        |                         |       
|                                          | Non-deductible expenses                  |                         |       
|                                          | Foreign losses with no benefit           |                         |       
|                                          | U.S. losses with no benefit              |                         |       
|                                          | Difference in U.S. and foreign tax rates |                         |       
|                                          | State and local income tax               |                         |       
|                                          | Other                                    |                         |       
|                                          |                                          |                         |       
|                                          |                                          | $                       | 10.5  
|                                          |                                          |                         |       

17.   Related Party Transactions

The Company has identified the following persons as being related parties of the Company with whom it has entered into transactions as described below:



Refinancing Transactions

In November 2003, the Company effected an approximately $1.4 billion rights offering in which the Company distributed to each of its stockholders
proportionate rights to purchase shares of its common stock. The rights were transferable, subject to various exceptions. The proceeds from the rights offering were used in part to prepay in full an
outstanding principal amount of approximately $554.1 million under the Company's 19% Senior Secured Notes due 2010 and to repay in full a working capital facility with an outstanding principal
amount of approximately $684.9 million.

F-45

---



In
connection with the Company's rights offering, on September 26, 2003, the Company entered into two separate participating purchaser agreements with each of W.R. Huff Asset
Management Co., L.L.C., on behalf of certain of its affiliates and managed accounts, and Franklin Mutual Advisers LLC, as agent and investment advisor for certain funds. Each participating purchaser
held shares of the Company's common stock or was the general partner or investment manager of managed funds and third party accounts that directly held shares of the Company's common stock.

Pursuant
to these agreements, W.R. Huff Asset Management Co., L.L.C., on behalf of managed accounts and affiliates, and Franklin Mutual Advisers LLC, on behalf of funds for which it acts
as an agent or investment advisor, each agreed in advance of the rights offering to exercise the basic subscription privilege for all of the rights distributed to their respective managed accounts,
affiliates and funds in the rights offering. The rights offering prospectus indicated to the Company's stockholders that these parties had made advance commitments. Other stockholders did not have to
commit to exercise their subscription privileges in advance.

W.R.
Huff Asset Management Co., L.L.C., on behalf of managed accounts and affiliates, purchased 4,582,594 shares of the Company's common stock for $40.00 per share and Franklin Mutual
Advisers LLC, on behalf of funds for which it acts as an agent or investment advisor, purchased 2,974,908 shares of the Company's common stock for $40.00 per share. This was the same price offered to
all recipients of rights in the offering. W.R. Huff Asset Management Co., L.L.C., on behalf of managed accounts and affiliates, also purchased approximately 25,000 shares of the Company's common stock
for $40.00 per share pursuant to the over-subscription privilege available to all rights holders in the offering. Franklin Mutual Advisers LLC, on behalf of funds for which it acts as an
agent or investment advisor, also purchased 35,752 shares of the Company's common stock for $40.00 pursuant to the over-subscription privilege available to all rights holders in the
offering.

The
shares of the Company's common stock that each participating purchaser received upon the exercise of the rights that the participating purchaser had committed to exercise constituted
restricted
stock for the purposes of the Securities Act of 1933. Accordingly, the Company entered into a registration rights agreement with each participating purchaser. The Company filed a registration
statement on February 13, 2004 to fulfill its obligations under these agreements.

The
Company completed a transaction on April 13, 2004 in which the Company's indirect wholly owned subsidiary, NTL Cable PLC, issued £375 million aggregate
principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount of 8.75%
senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012. Some of the Company's significant stockholders were holders of the 10% senior sterling
notes due 2008 and 91/8% senior notes due 2008 of Diamond Holdings Limited and of the 11.2% discount debentures due 2007 of NTL (Triangle) LLC, which were redeemed on May 13,
2004 in connection with the transaction. Some of these stockholders, including managed accounts and affiliates of W.R. Huff Asset Management Co., L.L.C., acquired a substantial quantity of the notes
issued in the transaction. On behalf of managed accounts and affiliates, W.R. Huff Asset Management Co., L.L.C. is a significant participant in the market for non-investment grade debt
securities.

Pursuant
to the participating purchaser agreements, and in consideration for their advance commitments in the rights offering, managed accounts and affiliates for which W.R. Huff Asset
Management Co., L.L.C. acts as an investment adviser were paid fees totaling $5.3 million on

F-46

---



March 24,
2004 and funds for which Franklin Mutual Advisers LLC acts as an agent or investment adviser were paid fees totaling $3.1 million on November 24, 2003 and
$0.3 million on March 17, 2004. In consideration for financial and business services, subject to the successful completion of the refinancing, a related entity of W.R. Huff Asset
Management Co., L.L.C. was paid $7.5 million on April 27, 2004.

In
May 2004, the Company's board granted to each of Eric Koza and Karim Samii, who were then each employees of W.R. Huff Asset Management Co., L.L.C. or its affiliates, the right
to receive 20,000 restricted shares of the Company's common stock under the 2003 Stock Option Plan. The restricted stock award was made in consideration of financial and business services provided to
the Company by Messrs. Koza and Samii. Mr. Samii is no longer an employee of W. R. Huff Asset Management Co., L.L.C. or its affiliates. Shares authorized under the 2003 Stock Option
Plan, including those granted to Messrs. Koza and Samii, were registered under a registration statement on Form S-8 that the Company filed with the SEC on May 6, 2004.

Chapter 11 Reorganization and Exit Notes

At the time of the Company's emergence from Chapter 11 reorganization, the Company issued shares of its common stock and Series A warrants to various
former creditors and stockholders of the entity
then known as NTL Europe, Inc., or NTL Europe, and some of its subsidiaries, including the Company, which was then one of NTL Europe's subsidiaries. The Company's principal stockholders were
creditors or stockholders of NTL Europe and, accordingly, received a significant amount of their present equity interest in the Company from that issuance.

Registration Rights Agreements

At the time of the Company's emergence from Chapter 11 reorganization, the Company granted various registration rights to some of the persons who were then
stockholders and warrantholders of the Company. In connection with the rights offering, the Company granted various registration rights to the participating purchasers as described above, and to
affiliates of Oaktree Capital Management, LLC.

Relationship with NTL Europe

At the time of the completion of the Plan, the Company had entered into several agreements with NTL Europe, now known as PTV, Inc., including a Demerger
Agreement and a Tax Sharing Agreement.

Demerger Agreement

The Demerger Agreement enables NTL Europe and the Company to have access to records and documents that NTL Europe and the Company require but which are held by or
in the control of the other. In addition, the agreement provides that, to the extent possible, all warranties, indemnities or liabilities relating to assets or companies which the Company currently
owns, but which were originally acquired by NTL Europe or one of its subsidiaries before being transferred to the Company or one of the Company's subsidiaries, are transferred to the Company or the
Company is given the benefit of the warranties, covenants and indemnities relating to these assets or companies.

F-47

---



Tax Sharing Agreement

Until consummation of the Plan, the Company was a part of a federal consolidated income tax group having NTL Europe as the common parent corporation. Under the
Plan, the Company separated from the NTL Europe consolidated group, becoming a separate federal consolidated tax group. The Company entered into a Tax Sharing Agreement which allocates rights and
responsibilities for tax matters between the Company and NTL Europe and its affiliates.

In
general, the Company has control over, and is responsible for, the preparation and filing of the Company's own tax returns and also any joint tax returns that include the Company and
the NTL Europe companies.

For
2002 and the portion of 2003 during which the Company was included in a joint tax return with NTL Europe, the Company would be liable for any tax liability attributable to the
Company and NTL Europe would be liable for any tax liability attributable to NTL Europe and its affiliates. The Company has the exclusive right to determine the portion of tax liability attributable
to the Company and NTL Europe on any reasonable basis. Any refunds of taxes paid with respect to joint returns will also be reasonably apportioned between the Company and NTL Europe on a similar
basis.

NTL
Europe's U.K. affiliates are required, as the Company may direct, to surrender group relief up to the maximum permitted by law to some of the Company's U.K. affiliates for tax
periods before, or that include, the date of the completion of the Plan as the Company may direct. This group relief allows the Company's U.K. affiliates to use deductions from NTL Europe's U.K.
affiliates to reduce foreign taxable income. The Company also has the ability to cause NTL Europe's U.K. affiliates to amend any claims for the surrender of group relief in order to give effect to
such surrender.

The
Company has the exclusive right to control, contest and represent its interests and NTL Europe's interest in any audit relating to a joint tax return. The Company also has the right
to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with any joint return if the matter involved could affect the Company. However, NTL
Europe has the exclusive authority to handle audits that relate solely to NTL Europe or its affiliates to the extent the asserted liability or matter either:



The
Company has an obligation to provide NTL Europe with information in order to keep NTL Europe informed and to permit NTL Europe an opportunity to participate in discussions with tax
authorities regarding tax issues that involve NTL Europe or its affiliates. The Company has the right to reasonably apportion any of the costs associated with its responding to an audit, claim or
asserted deficiency of NTL Europe.

NTL
Europe's ability to perform its continuing obligations under the Tax Sharing Agreement could be affected by a sale of some or all of its assets or by a change of control.
Accordingly, NTL Europe is required to provide the Company with notice of any change of control of it or any of its affiliates. The Company and NTL Europe have customary rights and obligations to
cooperate, exchange information, provide notice and resolve disputes with respect to tax matters.

F-48

---





18.   Shareholders' Equity

Series A Warrants

On the effective date of the Plan, the Company issued Series A warrants to some of its former creditors and stockholders. The Series A warrants were
initially exercisable for a total of 8,750,496 shares of common stock at an exercise price of $309.88 per share. After adjustment to account for the rights offering in accordance with the
anti-dilution adjustment provisions described below, the Series A warrants are exercisable for a total of 10,313,158 shares of common stock at an exercise price of $262.93 per
share. The Series A warrants expire on January 10, 2011. The agreement governing the Series A warrants is governed by New York law. The Series A warrants are listed on the
Nasdaq National Market under the symbol "NTLIW." The Series A warrants may be subject to further change.

Stock repurchase program

On January 31, 2005, the Company announced that it intended to use up to £475.0 million of the proceeds from the sale of its broadcast
operations to repurchase shares of its common stock. In February 2005, the Company used approximately $130.0 million to effect share repurchases in the open market.

19.   Commitments and Contingent Liabilities

At December 31, 2004, the Company was committed to pay approximately $315.5 million for equipment and services and for investment in, and loans to,
affiliates. This amount includes approximately $70.2 million for operations and maintenance contracts and other commitments from January 1, 2006 to 2013. The aggregate amount of the
fixed and determinable portions of these obligations for the succeeding five fiscal years is as follows (in millions):

|Year ended December 31: |      |   |      
|----------------------- | ---- | - | -----
|                        | 2005 |   | $    
|                        | 2006 |   |      
|                        | 2007 |   |      
|                        | 2008 |   |      
|                        | 2009 |   |      
|                        |      |  
|                        |      | $ | 315.5
|                        |      |  

The
Company is involved in certain disputes and litigation arising in the ordinary course of its business. None of these matters are expected to have a material adverse effect on the
Company's financial position, results of operations or cash flows.

The
Company's banks have provided guarantees in form of performance bonds on the Company's behalf as part of the Company's contractual obligations. The fair value of the guarantees has
been

F-49

---



calculated
by reference to the monetary value for each performance bond. The amount of commitment expires over the following periods (in millions):

|Year ended December 31: |      |   |     
|----------------------- | ---- | - | ----
|                        | 2005 |   | $   
|                        | 2006 |   |     
|                        | 2007 |   |     
|                        | 2008 |   |     
|                        | 2009 |   |     
|Thereafter              |      |   | 15.9
|                        |      |  
|                        |      | $ | 38.4
|                        |      |  

20.   Industry Segments

The Company implemented a reorganization of its business segments during the fourth quarter of 2004. As a result, the Company has one reportable segment. The
Company describes its different products and services offered over its broadband communications network and its routes to market in Note 1, but the products and services are solely multiple
services offered to customers in bundled packages. The products and services have similar economic characteristics, are all communications related, have similar or the same distribution methods and
have the same regulatory environment.

Geographic information

|                  |  | United
States |       | United
Kingdom |   | Ireland  |  | Total
|----------------- |  | ------------- | ----- | -------------- | - | -------- |  | -----
|
|2004              |  |               |       |                |   |          |  |      
|Revenues          |  | $             |      |                | $ | 3,667.1  |  | $    
|Long-lived assets |  |               | 1.3   |                |   | 8,098.4  |  |      
|2003              |  |               |       |                |   |          |  |      
|Revenues          |  | $             |      |                | $ | 3,087.5  |  | $    
|Long-lived assets |  |               | 2.3   |                |   | 8,264.3  |  |      
|2002              |  |               |       |                |   |          |  |      
|Revenues          |  | $             |      |                | $ | 2,788.5  |  | $    
|Long-lived assets |  |               | 163.6 |                |   | 11,185.1 |  |      

21.   Condensed consolidated financial information

On April 13, 2004, the Company's wholly owned, newly-formed subsidiary, NTL Cable PLC, or NTL Cable, issued £375 million
aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount
of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012, together referred to as the Senior Notes. The Company and certain of its
subsidiaries, namely Communications Cable Funding Corp., NTL (UK) Group, Inc. and NTL

F-50

---



Communications
Limited, have guaranteed the Senior Notes on a senior basis. NTL Investment Holdings Limited, or NTLIH, has guaranteed the Senior Notes on a senior subordinated basis.

The
Company presents the following condensed consolidated financial information as of December 31, 2004 and 2003 and for the years ended December 31, 2004, 2003 and 2002
and January 1, 2003 as required by Article 3-10(d) of Regulation S-X.

|                                                 |                                            | December 31, 2004
|------------------------------------------------ | ------------------------------------------ | -----------------
|
|
|Cash and cash equivalents                        |                                            | $                
|Restricted cash                                  |                                            |                  
|Marketable securities                            |                                            |                  
|Current assets held for sale                     |                                            |                  
|Other current assets                             |                                            |                  
|                                                 |                                            |                  
|                                                 | Total current assets                       |                  
|Fixed assets, net                                |                                            |                  
|Intangible assets, net                           |                                            |                  
|Investments in, and loans to, affiliates         |                                            |                  
|Other assets, net                                |                                            |                  
|Other assets held for sale                       |                                            |                  
|                                                 |                                            |                  
|                                                 | Total assets                               |                  
|                                                 |                                            |                  
|Current liabilities of discontinued operations   |                                            | $                
|Other current liabilities                        |                                            |                  
|                                                 |                                            |                  
|Total current liabilities                        |                                            |                  
|Long-term debt                                   |                                            |                  
|Other long-term liabilities                      |                                            |                  
|Long-term liabilities of discontinued operations |                                            |                  
|Shareholders' equity                             |                                            |                  
|                                                 |                                            |                  
|                                                 | Total liabilities and shareholders' equity |                  
|                                                 |                                            |                  

F-51

---



|                                                 |                                            | December 31, 2003
|------------------------------------------------ | ------------------------------------------ | -----------------
|
|
|Cash and cash equivalents                        |                                            | $                
|Restricted cash                                  |                                            |                  
|Current assets held for sale                     |                                            |                  
|Other current assets                             |                                            |                  
|                                                 |                                            |                  
|                                                 | Total current assets                       |                  
|Fixed assets, net                                |                                            |                  
|Intangible assets, net                           |                                            |                  
|Investments in, and loans to, affiliates         |                                            |                  
|Other assets, net                                |                                            |                  
|Other assets held for sale                       |                                            |                  
|                                                 |                                            |                  
|                                                 | Total assets                               |                  
|                                                 |                                            |                  
|Current liabilities of discontinued operations   |                                            | $                
|Other current liabilities                        |                                            |                  
|                                                 |                                            |                  
|                                                 | Total current liabilities                  |                  
|Long-term debt                                   |                                            |                  
|Other long-term liabilities                      |                                            |                  
|Long-term liabilities of discontinued operations |                                            |                  
|Shareholders' equity                             |                                            |                  
|                                                 |                                            |                  
|                                                 | Total liabilities and shareholders' equity |                  
|                                                 |                                            |                  

F-52

---



|                                             |                                 | Year ended December 31, 2004 |       
|-------------------------------------------- | ------------------------------- | ---------------------------- | ------
|
|
|Revenue                                      |                                 | $                            |      
|Operating costs                              |                                 |                              |      
|Selling, general and administrative expenses |                                 |                              | (38.3 
|Other charges                                |                                 |                              |      
|Depreciation and amortization                |                                 |                              |      
|                                             |                                 |                              |       
|                                             | Operating loss                  |                              |       
|Interest and other income, net               |                                 |                              | 1.2   
|Interest expense                             |                                 |                              |      
|Loss on extinguishment of debt               |                                 |                              |      
|Share of loss from equity investments        |                                 |                              |      
|Foreign currency (losses) gains              |                                 |                              | (3.9  
|Income tax expense                           |                                 |                              | (2.6  
|                                             |                                 |                              |       
|                                             | Loss from continuing operations |                              |       
|Income from discontinued operations          |                                 |                              |      
|Equity in net loss of subsidiaries           |                                 |                              | (836.5
|                                             |                                 |                              |       
|                                             | Net loss                        |                              | $     
|                                             |                                 |                              |       

F-53

---



|                                             |                                 | Year ended December 31, 2003 |       
|-------------------------------------------- | ------------------------------- | ---------------------------- | ------
|
|
|Revenue                                      |                                 | $                            |      
|Operating costs                              |                                 |                              |      
|Selling, general and administrative expenses |                                 |                              | (34.3 
|Other charges                                |                                 |                              | (12.3 
|Depreciation and amortization                |                                 |                              |      
|                                             |                                 |                              |       
|                                             | Operating loss                  |                              |       
|Interest and other income, net               |                                 |                              | 2.0   
|Interest expense                             |                                 |                              | (112.0
|Share of income from equity investments      |                                 |                              |      
|Foreign currency gains                       |                                 |                              | 1.9   
|Income tax (expense) benefit                 |                                 |                              | (1.6  
|                                             |                                 |                              |       
|                                             | Loss from continuing operations |                              |       
|Income (loss) from discontinued operations   |                                 |                              |      
|Equity in net loss of subsidiaries           |                                 |                              | (797.9
|                                             |                                 |                              |       
|                                             | Net loss                        |                              | $     
|                                             |                                 |                              |       

|                                            |                                   | January 1, 2003 |        
|------------------------------------------- | --------------------------------- | --------------- | -------
|
|
|Gain on debt discharge                      |                                   | $               | 7,322.8
|Fresh-start adoptionintangible assets      |                                   |                 |       
|Fresh-start adoptionlong-term debt         |                                   |                 |       
|Fresh-start adoptiondeferred tax liability |                                   |                 |       
|Fresh-start adoptionaccrued expenses       |                                   |                 |       
|Fresh-start adoptionfixed assets           |                                   |                 | (0.8   
|Recapitalization expense                    |                                   |                 | (8.0   
|                                            |                                   |                 |        
|                                            | Income from continuing operations |                 |        
|Income from discontinued operations         |                                   |                 |       
|Equity in net loss of subsidiaries          |                                   |                 | (511.3 
|                                            |                                   |                 |        
|                                            | Net income (loss)                 |                 | $      
|                                            |                                   |                 |        

F-54

---



|                                             |                                          | Year ended December 31, 2002 |         
|-------------------------------------------- | ---------------------------------------- | ---------------------------- | --------
|
|
|Revenue                                      |                                          | $                            |        
|Operating costs                              |                                          |                              |        
|Selling, general and administrative expenses |                                          |                              | (37.9   
|Long-lived asset impairments                 |                                          |                              |        
|Other charges                                |                                          |                              | (154.8  
|Depreciation and amortization                |                                          |                              | (26.7   
|                                             |                                          |                              |         
|                                             | Operating loss                           |                              |         
|Interest and other income, net               |                                          |                              | 9.4     
|Interest expense                             |                                          |                              | (280.3  
|Recapitalization expense                     |                                          |                              | (87.8   
|Share of income from equity investments      |                                          |                              |        
|Foreign currency (losses) gains              |                                          |                              | (282.0  
|Income tax benefit                           |                                          |                              | 1.2     
|                                             |                                          |                              |         
|                                             | (Loss) income from continuing operations |                              |         
|Income from discontinued operations          |                                          |                              |        
|Equity in net loss of subsidiaries           |                                          |                              | (1,516.9
|                                             |                                          |                              |         
|                                             | Net loss                                 |                              | $       
|                                             |                                          |                              |         

F-55

---



|                                                    |                                                     | Year ended December 31, 2004 |      
|--------------------------------------------------- | --------------------------------------------------- | ---------------------------- | -----
|
|
|Net cash (used in) provided by operating activities |                                                     | $                            | (25.6
|Investing activities:                               |                                                     |                              |      
|                                                    | Purchases of fixed assets                           |                              |      
|                                                    | (Advances to) repayments from affiliates            |                              |      
|                                                    | Proceeds from sale of assets                        |                              |      
|                                                    | Acquisitions, net                                   |                              |      
|                                                    | Purchases of marketable securities                  |                              |      
|                                                    |                                                     |                              |      
|                                                    | Net cash (used in) investing activities             |                              |      
|                                                    |                                                     |                              |      
|Financing activities:                               |                                                     |                              |      
|                                                    | Proceeds from borrowings, net                       |                              |      
|                                                    | Proceeds from employee stock options                |                              |      
|                                                    | Principal payments                                  |                              |      
|                                                    |                                                     |                              |      
|                                                    | Net cash provided by (used in) financing activities |                              |      
|Effect of exchange rate changes                     |                                                     |                              |     
|                                                    |                                                     |                              |      
|(Decrease) increase in cash                         |                                                     |                              | (39.7
|Cash and cash equivalents at start of period        |                                                     |                              | 112.8
|                                                    |                                                     |                              |      
|Cash and cash equivalents at end of period          |                                                     | $                            | 73.1 
|                                                    |                                                     |                              |      

F-56

---



|                                                    |                                                     | Year ended December 31, 2003 |       
|--------------------------------------------------- | --------------------------------------------------- | ---------------------------- | ------
|
|
|Net cash (used in) provided by operating activities |                                                     | $                            | (189.2
|Investing activities:                               |                                                     |                              |       
|                                                    | Purchases of fixed assets                           |                              |       
|                                                    | (Advances to) repayments from affiliates            |                              |       
|                                                    | Proceeds from sales of marketable securities        |                              |       
|                                                    |                                                     |                              |       
|                                                    | Net cash (used in) provided by investing activities |                              |       
|                                                    |                                                     |                              |       
|Financing activities:                               |                                                     |                              |       
|                                                    | Proceeds from borrowings, net                       |                              |       
|                                                    | Proceeds from rights offering, net                  |                              |       
|                                                    | Proceeds from employee stock options                |                              |       
|                                                    | Principal payments                                  |                              |       
|                                                    |                                                     |                              |       
|                                                    | Net cash provided by (used in) financing actvities  |                              |       
|Effect of exchange rate changes                     |                                                     |                              |      
|                                                    |                                                     |                              |       
|(Decrease) increase in cash                         |                                                     |                              | (182.4
|Cash and cash equivalents at start of period        |                                                     |                              | 295.2 
|                                                    |                                                     |                              |       
|                                                    | Cash and cash equivalents at end of period          |                              | $     
|                                                    |                                                     |                              |       

F-57

---



|                                                    |                                                     | January 1, 2003 |      
|--------------------------------------------------- | --------------------------------------------------- | --------------- | -----
|
|
|Net cash (used in) provided by operating activities |                                                     | $               | (69.7
|Investing activities:                               |                                                     |                 |      
|                                                    | (Advances to) repayments from affiliates            |                 |      
|                                                    | Decrease in other assets                            |                 |      
|                                                    |                                                     |                 |      
|                                                    | Net cash (used in) provided by investing activities |                 |      
|                                                    |                                                     |                 |      
|Financing activities:                               |                                                     |                 |      
|                                                    | Proceeds from borrowings, net                       |                 |      
|                                                    | Principal payments                                  |                 |      
|                                                    |                                                     |                 |      
|                                                    | Net cash provided by (used in) financing actvities  |                 |      
|Effect of exchange rate changes                     |                                                     |                 |     
|                                                    |                                                     |                 |      
|(Decrease) increase in cash                         |                                                     |                 | 259.0
|Cash and cash equivalents at start of period        |                                                     |                 | 36.2 
|                                                    |                                                     |                 |      
|                                                    | Cash and cash equivalents at end of period          |                 | $    
|                                                    |                                                     |                 |      

F-58

---



|                                                    |                                                   | Year ended December 31, 2002 |      
|--------------------------------------------------- | ------------------------------------------------- | ---------------------------- | -----
|
|
|Net cash provided by (used in) operating activities |                                                   | $                            | 52.9 
|Investing activities:                               |                                                   |                              |      
|                                                    | Purchases of fixed assets                         |                              |      
|                                                    | (Advances to) repayments from affiliates          |                              |      
|                                                    | Increase in other assets                          |                              |      
|                                                    | Proceeds from sales of assets                     |                              |      
|                                                    | Purchases of marketable securities                |                              |      
|                                                    | Proceeds from sales of marketable securities      |                              |      
|                                                    |                                                   |                              |      
|                                                    | Net cash (used in) investing activities           |                              |      
|                                                    |                                                   |                              |      
|Financing activities:                               |                                                   |                              |      
|                                                    | Proceeds from borrowings, net                     |                              |      
|                                                    | Principal payments                                |                              |      
|                                                    | Proceeds from borrowings from NTL (Delaware), Inc |                              |      
|                                                    | Contribution from NTL (Delaware), Inc             |                              |      
|                                                    |                                                   |                              |      
|                                                    | Net cash provided by financing activities         |                              |      
|Effect of exchange rate changes                     |                                                   |                              |     
|                                                    |                                                   |                              |      
|(Decrease) increase in cash                         |                                                   |                              | (42.3
|Cash and cash equivalents at start of period        |                                                   |                              | 78.5 
|                                                    |                                                   |                              |      
|                                                    | Cash and cash equivalents at end of period        |                              | $    
|                                                    |                                                   |                              |      

22.   Reorganization and Emergence from Chapter 11

Background of Restructuring

Both the equity and debt capital markets experienced periods of significant volatility in 2001 and 2002, particularly for securities issued by telecommunications
and technology companies. As a result, the ability of the Company's former ultimate parent company and its subsidiaries to access those markets as well as its ability to obtain financing from its bank
lenders and equipment suppliers became severely restricted. In addition, the Company's former ultimate parent company and its subsidiaries, including the Company, had no further funds available, or
were unable to draw upon funds, under the Company's credit facilities. As a result of these factors, together with its substantial leverage, on January 31, 2002, the Company's former ultimate
parent company announced that it had appointed professional advisors to advise on strategic and recapitalization alternatives to strengthen its balance sheet, reduce debt and put an appropriate
capital structure in place for its business.

Promptly
upon obtaining the requisite waivers from the lenders under its credit facilities in March 2002, the Company's former ultimate parent company and certain of its
subsidiaries commenced

F-59

---



negotiations
with a steering committee of the unofficial committee of its bondholders and the committee's legal and financial advisors.

The
Company's former ultimate parent company and its subsidiaries failed to make interest payments on some of the outstanding notes starting on April 1, 2002. The Company's former
ultimate parent company also failed to declare or pay dividends on certain series of its outstanding preferred stock owing to a lack of available surplus under Delaware law.

On
April 16, 2002, the Company's former ultimate parent company announced that it and an unofficial committee of its bondholders had reached an agreement in principle on a
comprehensive recapitalization of the former NTL group. To implement the proposed recapitalization plan, on May 8, 2002, the Company, the Company's former ultimate parent company and certain of
the other subsidiaries of the Company's former ultimate parent company filed cases and a pre-arranged joint reorganization plan under Chapter 11 of the U.S. Bankruptcy Code. In
connection with the filing, some members of the unofficial creditors' committee of bondholders entered into a credit facility agreement (the "DIP facility") committing to provide a wholly-owned
subsidiary of the Company with up to $500.0 million in new debt financing. NTL Delaware committed to provide up to an additional $130.0 million under the DIP facility.

As
a result of the payment defaults, as well as the voluntary filing under Chapter 11 by the Company's former ultimate parent company and certain of its subsidiaries on May 8,
2002, there was an event of default under all of the Company's former ultimate parent company and its subsidiaries' credit facilities and the indentures governing all of their publicly traded debt,
other than debt of NTL (Triangle) LLC.

The
Bankruptcy Court confirmed the Plan on September 5, 2002. During the fall of 2002, the Company's former ultimate parent company negotiated with a group of lenders to enter
into a new financing arrangement to repay the DIP facility, to repay certain obligations and to provide liquidity to the Company and its subsidiaries. The Plan became effective on January 10,
2003 (the "Effective Date"), at which time the Company emerged from Chapter 11 reorganization. In connection with the Company's emergence from Chapter 11 reorganization, the Company and
certain of its subsidiaries issued $558.249 million aggregate principal face amount of 19% Senior Secured Notes due 2010 (the "Exit Notes") on January 10, 2003. Initial purchasers of the
Company's Exit Notes also purchased 500,000 shares of the Company's common stock on that date. The gross proceeds from the sale of the Exit Notes and such shares totaled $500.0 million. The
proceeds were used in part to repay amounts outstanding under the DIP facility and to purchase from NTL Delaware a £90.0 million note of the Company's subsidiary, NTL (UK)
Group Inc., and to repay certain other obligations. Also on January 10, 2003, the Company and its lending banks amended the Company's existing credit facilities. The Exit Notes were
repaid on November 17, 2003 following the Company's rights offering.

In
connection with the Company's Chapter 11 reorganization, UBS Securities LLC provided advisory services to the Company for which they received customary fees, including an
amount of up to $4.0 million payable in April 2004 in shares of the Company's common stock. The shares will be issued if the value of the shares received by the Company's former debt
holders in the Chapter 11 reorganization exceeds specified levels. The shares will be valued for these purposes based upon the market price of the shares over the 60-day trading
period commencing January 10, 2004.

F-60

---



Reorganization Value

The Company adopted fresh-start reporting upon its emergence from Chapter 11 reorganization in accordance with SOP 90-7. The Company
engaged an independent financial advisor to assist in the determination of its reorganization value as defined in SOP 90-7. The Company and its independent financial advisor determined the
Company's reorganization value was $11,247.5 million. This determination was based upon various valuation methods, including discounted projected cash flow analysis, selected comparable market
multiples of publicly traded companies and other applicable ratios and economic information relevant to the operations of the Company. Certain factors that were incorporated into the determination of
the Company's reorganization value included the following:



The
cash flow projections were based on economic, competitive and general business conditions prevailing when the projections were prepared. They were also based on a variety of
estimates and assumptions which, though considered reasonable by management, may not be realized, and are inherently subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Company's control. A change in the estimates and assumptions about revenue, operating cash flow, tax rates and capital expenditures may have had a
significant effect on the determination of the Company's reorganization value.

The
Company determined that its reorganization value computed as of the Effective Date, consisted of the following (in millions):

|Present value of discounted cash flows of the emerging entity |  | $ | 9,811.0 
|------------------------------------------------------------- |  | - | --------
|Current assets                                                |  |   | 1,237.0 
|Other assets                                                  |  |   | 199.5   
|                                                              |  |  
|Reorganization value                                          |  | $ | 11,247.5
|                                                              |  |  

The
Company adopted fresh-start reporting because the holders of its voting common shares immediately before filing and confirmation of the Plan received less than 50% of the voting
shares of

F-61

---



the
emerging company, and because the Company's reorganization value is less than its post-petition liabilities and allowed claims, as shown below (in millions):

|Allowed claims:            |                                   |   |           |         
|-------------------------- | --------------------------------- | - | --------- | --------
|                           | Liabilities subject to compromise |   | $         | 10,157.8
|Post petition liabilities: |                                   |   |           |         
|                           | Current liabilities               |   |           | 7,965.3 
|                           | Deferred income taxes             |   |           | 94.4    
|                           |                                   |   |          
|                           |                                   |   | 18,217.5  |         
|Reorganization value       |                                   |   | (11,247.5 | )       
|                           |                                   |   |          
|                           |                                   | $ | 6,970.0   |         
|                           |                                   |   |          

Gain on Debt Discharge

The Company realized a gain of $8,451.6 million in connection with the recapitalization of its debt in accordance with the Plan. This gain has been
reflected in the results of operations of the Predecessor Company on January 1, 2003. A summary of the gain on debt discharge follows (in millions):

|Liabilities subject to compromise:          |                                                   |   |          |        
|------------------------------------------- | ------------------------------------------------- | - | -------- | -------
|                                            | Pre-petition long-term debt subject to compromise |   | $        | 9,814.2
|                                            | Accounts payable and accrued expenses             |   |          | 1.6    
|                                            | Interest payable                                  |   |          | 316.8  
|                                            | Due to NTL Europe, Inc.                           |   |          | 25.2   
|                                            |                                                   |   |         
|                                            |                                                   |   | 10,157.8 |        
|                                            | Unamortized deferred financing costs              |   |          | (127.9 
|                                            |                                                   |   |         
|                                            |                                                   |   | 10,029.9 |        
|Claims assumed and consideration exchanged: |                                                   |   |          |        
|                                            | Diamond Holdings' notes assumed                   |   |          | 327.3  
|                                            | Interest payable assumed                          |   |          | 38.0   
|                                            | Accounts payable and accrued expenses assumed     |   |          | 1.6    
|                                            | Due to NTL Europe, Inc. assumed                   |   |          | 25.2   
|                                            | Value of Reorganized Company's common stock       |   |          | 1,186.2
|                                            |                                                   |   |         
|                                            |                                                   |   | 1,578.3  |        
|                                            |                                                   |   |         
|                                            |                                                   | $ | 8,451.6  |        
|                                            |                                                   |   |         

F-62

---



Recapitalization Expense

The joint reorganization plan provided that recapitalization costs be allocated between the Company and NTL Europe. Recapitalization expense consisted of the
following (in millions):

|                    |  | Year Ended December 31, |  
|------------------- |  | ----------------------- | -
|
|
|Payroll and related |  | $                       | 
|Professional fees   |  |                         | 
|                    |  |                         |  
|                    |  | $                       | 
|                    |  |                         |  

|                    |  | January 1,
2003 |     
|------------------- |  | --------------- | ----
|
|Payroll and related |  | $               |    
|Professional fees   |  |                 | (8.0
|                    |  |                 |     
|                    |  | $               | (8.0
|                    |  |                 |     

Details
of operating cash receipts and payments resulting from the recapitalization are as follows (in millions):

|                                                     |  | Year Ended December 31, |  
|---------------------------------------------------- |  | ----------------------- | -
|
|
|Payroll and related costs paid                       |  | $                       | 
|Professional fees                                    |  |                         | 
|                                                     |  |                         |  
|Net operating cash flows from recapitalization items |  | $                       | 
|                                                     |  |                         |  

|                                                     |  | January 1,
2003 |     
|---------------------------------------------------- |  | --------------- | ----
|
|Payroll and related costs paid                       |  | $               |    
|Professional fees                                    |  |                 | (8.0
|                                                     |  |                 |     
|Net operating cash flows from recapitalization items |  | $               | (8.0
|                                                     |  |                 |     

Fresh-start reporting

In accordance with SOP 90-7, the Company adopted the provisions of fresh-start reporting as of January 1, 2003. The following
reconciliation of the Predecessor Company's consolidated balance sheet

F-63

---



as
of December 31, 2002 to that of the Reorganized Company as of January 1, 2003 gives effect to the emergence from Chapter 11 reorganization and the adoption of fresh-start
reporting.

The
Company engaged an independent financial advisor to assist in the determination of the reorganization value (or fair value) of its assets and the present value of its liabilities.
This determination resulted in the fresh-start reporting adjustments to write-down fixed assets and write-up intangible assets to their fair values. In addition, the Company's
total reorganization value exceeded the amounts allocable to identifiable assets that resulted in a new indefinite-lived intangible asset.

The
adjustments titled "Emergence from Chapter 11" reflect the consummation of the Plan, including the cancellation of a substantial portion of the Company's outstanding debt and
the issuance of shares of new common stock and Series A warrants to various former creditors and stockholders of the Company's former ultimate parent company and certain of its subsidiaries,
including the Company. The adjustments titled "Fresh-Start" reflect the adoption of fresh-start reporting.

F-64

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|                                                                           |                                                | December 31, 2002         |          |           |         |           |          | January 1, 2003 |         
|-------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------- | -------- | --------- | ------- | --------- | -------- | --------------- | --------
|
|
|Assets                                                                     |                                                |                           |          |           |         |           |          |                 |         
|Current assets:                                                            |                                                |                           |          |           |         |           |          |                 |         
|                                                                           | Cash and cash equivalents                      |                           | $        | 502.0     |         | $         | 138.7    |                 | $       
|                                                                           | Marketable securities                          |                           |          | 5.2       |         |           |         |                 |         
|                                                                           | Accounts receivabletrade, net                 |                           |          | 355.4     |         |           |         |                 |         
|                                                                           | Current assets held for sale                   |                           |          | 55.2      |         |           |         |                 |         
|                                                                           | Due from affiliates                            |                           |          | 1.6       |         |           |         |                 |         
|                                                                           | Prepaid expenses                               |                           |          | 156.9     |         |           |         |                 |         
|                                                                           | Other current assets                           |                           |          | 94.4      |         |           | (72.4    | )               |         
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|                                                                           |                                                | Total current assets      |          |           | 1,170.7 |           |          | 66.3            |         
|Fixed assets, net                                                          |                                                |                           | 10,602.1 |           |         |          |          |                 | (3,567.6
|Intangible assets, net                                                     |                                                |                           | 395.3    |           |         |          |          |                 | 504.0   
|Investments in and loans to affiliates, net                                |                                                |                           | 13.5     |           |         |          |          |                 |        
|Reorganization value in excess of amounts allocable to identifiable assets |                                                |                           |         |           |         |          |          |                 | 352.3   
|Other assets held for sale                                                 |                                                |                           | 481.7    |           |         |          |          |                 | 1,038.1 
|Other assets, net                                                          |                                                |                           | 378.1    |           |         | (187.0    | )        |                 |        
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|Total assets                                                               |                                                | $                         | 13,041.4 |           | $       | (120.7    | )        | $               | (1,673.2
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|Liabilities and shareholders' equity (deficit)                             |                                                |                           |          |           |         |           |          |                 |         
|Liabilities not subject to compromise                                      |                                                |                           |          |           |         |           |          |                 |         
|Current liabilities:                                                       |                                                |                           |          |           |         |           |          |                 |         
|                                                                           | Accounts payable                               |                           | $        | 374.7     |         | $         | 0.7      |                 | $       
|                                                                           | Accrued expenses                               |                           |          | 715.5     |         |           | 6.6      |                 |         
|                                                                           | Accrued construction costs                     |                           |          | 70.4      |         |           |         |                 |         
|                                                                           | Interest payable                               |                           |          | 177.3     |         |           | 38.0     |                 |         
|                                                                           | Deferred revenue                               |                           |          | 327.4     |         |           |         |                 |         
|                                                                           | Current liabilities of discontinued operations |                           |          | 73.1      |         |           |         |                 |         
|                                                                           | Other current liabilities                      |                           |          | 271.5     |         |           | (234.6   | )               |         
|                                                                           | Current portion of long-term debt              |                           |          | 5,955.4   |         |           | (5,952.3 | )               |         
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|                                                                           |                                                | Total current liabilities |          |           | 7,965.3 |           |          | (6,141.6        | )       
|Long-term debt                                                             |                                                |                           |         |           |         | 6,540.1   |          |                 |        
|Long-term debt discount                                                    |                                                |                           |         |           |         |          |          |                 | (221.3  
|Other                                                                      |                                                |                           |         |           |         |          |          |                 | 47.2    
|Deferred income taxes                                                      |                                                |                           | 47.8     |           |         |          |          |                 | (27.8   
|Long-term liabilities of discontinued operations                           |                                                |                           | 46.6     |           |         |          |          |                 | 96.3    
|Commitments and contingent liabilities                                     |                                                |                           |          |           |         |           |          |                 |         
|Liabilities subject to compromise                                          |                                                |                           | 10,157.8 |           |         | (10,157.8 | )        |                 |        
|Shareholders' equity (deficit):                                            |                                                |                           |          |           |         |           |          |                 |         
|                                                                           | Common stockold                               |                           |          |          |         |           |         |                 |         
|                                                                           | Common stocknew                               |                           |          |          |         |           | 0.5      |                 |         
|                                                                           | Additional paid-in capital                     |                           |          | 14,045.5  |         |           | 1,194.1  |                 |         
|                                                                           | Accumulated other comprehensive (loss) income  |                           |          | (653.6    | )       |           | 0.4      |                 |         
|                                                                           | (Deficit) retained earnings                    |                           |          | (18,568.0 | )       |           | 8,443.6  |                 |         
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|                                                                           |                                                |                           | (5,176.1 | )         |         | 9,638.6   |          |                 | (1,534.9
|                                                                           |                                                |                           |          |           |         |           |          |                 |         
|Total liabilities and shareholders' equity (deficit)                       |                                                | $                         | 13,041.4 |           | $       | (120.7    | )        | $               | (1,673.2
|                                                                           |                                                |                           |          |           |         |           |          |                 |         

F-65

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Pro Forma Results of Operations

The consolidated pro forma results of operations for the year ended December 31, 2002 assuming the emergence from Chapter 11 reorganization and the
adoption of fresh-start reporting occurred on January 1, 2002 follows (in millions, except per share data). The pro forma results of operations are not necessarily indicative of the
results that would have occurred had the emergence from Chapter 11 reorganization and the adoption of fresh-start reporting occurred on January 1, 2002, or that might occur in the
future.

|                                          |  | Year ended December 31, |         
|----------------------------------------- |  | ----------------------- | --------
|
|Total revenue                             |  | $                       | 2,878.5 
|Loss from continuing operations           |  |                         | (1,686.7
|Loss from continuing operations per share |  |                         | (28.35  

F-66

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NTL INCORPORATED        SCHEDULE ICONDENSED FINANCIAL INFORMATION OF REGISTRANT        CONDENSED BALANCE SHEETS        (In millions, except per share data)

|                                            |                                                                                                                                | December 31,               |        
|------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | -------
|
|Assets                                      |                                                                                                                                |                            |        
|Current assets                              |                                                                                                                                |                            |        
|                                            | Cash and cash equivalents                                                                                                      |                            | $      
|                                            | Marketable securities                                                                                                          |                            |        
|                                            | Other current assets                                                                                                           |                            |        
|                                            |                                                                                                                                |                            |        
|                                            |                                                                                                                                | Total current assets       |        
|Investments in and loans to affiliates, net |                                                                                                                                |                            | 2,953.9
|                                            |                                                                                                                                |                            |        
|Total assets                                |                                                                                                                                | $                          | 3,049.9
|                                            |                                                                                                                                |                            |        
|Liabilities and shareholders' equity        |                                                                                                                                |                            |        
|Current liabilities                         |                                                                                                                                | $                          | 24.2   
|Shareholders' equity                        |                                                                                                                                |                            |        
|                                            | Preferred stock$.01 par value; authorized 5.0 (2004 and 2003); issued and outstanding none                                    |                            |        
|                                            | Common stock$.01 par value; authorized 400.0 (2004 and 2003) shares issued and outstanding 87.7 (2004) and 86.9 (2003) shares |                            |        
|                                            | Additional paid-in capital                                                                                                     |                            |        
|                                            | Unearned stock compensation                                                                                                    |                            |        
|                                            | Accumulated other comprehensive income                                                                                         |                            |        
|                                            | (Deficit)                                                                                                                      |                            |        
|                                            |                                                                                                                                |                            |        
|                                            |                                                                                                                                | Total shareholders' equity |        
|                                            |                                                                                                                                |                            |        
|Total liabilities and shareholders' equity  |                                                                                                                                | $                          | 3,049.9
|                                            |                                                                                                                                |                            |        

See
accompanying notes.

F-67

---





NTL INCORPORATED        CONDENSED FINANCIAL INFORMATION OF REGISTRANT        STATEMENT OF OPERATIONS        (In millions)

|                                                                    |                                                          | Year ended December 31, |       
|------------------------------------------------------------------- | -------------------------------------------------------- | ----------------------- | ------
|
|
|Costs and expenses                                                  |                                                          |                         |       
|                                                                    | General and administrative expenses                      |                         | $     
|                                                                    | Other charges                                            |                         |       
|                                                                    | Depreciation                                             |                         |       
|                                                                    | Amortization                                             |                         |       
|                                                                    |                                                          |                         |       
|Operating (loss)                                                    |                                                          |                         | (38.3 
|Other income (expense)                                              |                                                          |                         |       
|                                                                    | Interest income and other, net                           |                         |       
|                                                                    | Interest expense (contractual interest of $831.3 (2002)) |                         |       
|                                                                    | Recapitalization expense                                 |                         |       
|                                                                    | Foreign currency transaction (losses) gains              |                         |       
|                                                                    |                                                          |                         |       
|(Loss) before income taxes and equity in net (loss) of subsidiaries |                                                          |                         | (41.0 
|Income tax (expense) benefit                                        |                                                          |                         | (2.6  
|                                                                    |                                                          |                         |       
|(Loss) before equity in net (loss) of subsidiaries                  |                                                          |                         | (43.6 
|Equity in net (loss) of subsidiaries                                |                                                          |                         | (836.5
|                                                                    |                                                          |                         |       
|Net (loss)                                                          |                                                          | $                       | (880.1
|                                                                    |                                                          |                         |       

|                                          |  | January 1,
2003 |        
|----------------------------------------- |  | --------------- | -------
|
|Gain on debt discharge                    |  | $               | 7,322.8
|Fresh-start adoptionfixed assets         |  |                 | (0.8   
|Recapitalization expense                  |  |                 | (8.0   
|Share of (losses) from equity investments |  |                 | (511.3 
|                                          |  |                 |        
|Net income                                |  | $               | 6,802.7
|                                          |  |                 |        

See
accompanying notes.

F-68

---





NTL INCORPORATED        CONDENSED FINANCIAL INFORMATION OF REGISTRANT        STATEMENT OF CASH FLOWS        (In millions)

|                                                       |                                              | Year ended December 31,                   |      
|------------------------------------------------------ | -------------------------------------------- | ----------------------------------------- | -----
|
|
|Net cash (used in) provided by operating activities    |                                              | ($                                        | 25.6 
|Investing activities                                   |                                              |                                           |      
|                                                       | Purchase of marketable securities            |                                           |      
|                                                       | Proceeds from sales of marketable securities |                                           |      
|                                                       | Investments in and loans to affiliates       |                                           |      
|                                                       |                                              |                                           |      
|                                                       |                                              | Net cash (used in) investing activities   |      
|                                                       |                                              |                                           |      
|Financing activities                                   |                                              |                                           |      
|                                                       | Contribution from NTL (Delaware), Inc.       |                                           |      
|                                                       | Net proceeds from rights offering            |                                           |      
|                                                       | Proceeds from exercise of stock options      |                                           |      
|                                                       | Principal payments on long-term debt         |                                           |      
|                                                       |                                              |                                           |      
|                                                       |                                              | Net cash provided by financing activities |      
|                                                       |                                              |                                           |      
|(Decrease) in cash and cash equivalents                |                                              |                                           | (39.7
|Cash and cash equivalents, beginning of period         |                                              |                                           | 112.8
|                                                       |                                              |                                           |      
|Cash and cash equivalents, end of period               |                                              | $                                         | 73.1 
|                                                       |                                              |                                           |      
|Supplemental disclosure of cash flow information       |                                              |                                           |      
|Cash paid for interest                                 |                                              | $                                         |     
|Income taxes paid                                      |                                              |                                           | 0.3  
|Supplemental schedule of non-cash financing activities |                                              |                                           |      
|Contribution from NTL (Delaware) Inc.                  |                                              | $                                         |     

|                                               |  | January 1,
2003 |       
|---------------------------------------------- |  | --------------- | ------
|
|Net cash (used in) operating activities        |  | $               | (69.7 
|Net cash provided by investing activities      |  |                 | (171.3
|Net cash provided by financing activities      |  |                 | 500.0 
|                                               |  |                 |       
|Increase in cash and cash equivalents          |  |                 | 259.0 
|Cash and cash equivalents, beginning of period |  |                 | 36.2  
|                                               |  |                 |       
|Cash and cash equivalents, end of period       |  | $               | 295.2 
|                                               |  |                 |       

See
accompanying notes.

F-69

---





NTL INCORPORATED        NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1. Corporate Restructuring

On January 10, 2003, the Company emerged from reorganization under Chapter 11 of the United States Bankruptcy Code. Pursuant to the plan of reorganization,
which is referred to as the Plan, the Company's former parent, NTL Europe, Inc., or NTL Europe, and its subsidiaries and affiliates were split into two separate groups, with the Company
and NTL Europe, each emerging as independent public companies. The Company was renamed "NTL Incorporated" and became the holding company for the former NTL group's principal UK and Ireland
assets. NTL Europe became the holding company for the former NTL group's continental European and various other assets. All of the outstanding securities of NTL Europe and some of its subsidiaries,
including the Company, were cancelled. The Company issued shares of its common stock and Series A warrants and NTL Europe issued shares of its common stock and preferred stock to various
former creditors and stockholders. As a result, the Company is no longer affiliated with NTL Europe.

2. Basis of Presentation

In the Company's condensed financial statements, the Company's investment in subsidiaries is stated at cost plus equity in the undistributed earnings of the
subsidiaries. The Company's share of net loss of its subsidiaries is included in net loss using the equity method of accounting. The condensed financial statements should be read in conjunction with
the Company's consolidated financial statements.

3. Leases

Leases for office space end in 2007. Total rental expense for the years ended December 31, 2004, 2003 and 2002 under operating leases was
$0.4 million, $1.1 million and $1.4 million, respectively.

Future
minimum lease payments under noncancellable operating leases as of December 31, 2004 are $0.4 million.

4. Other

On the Effective Date, the Company loaned Communications Cable Funding Corp., (a wholly-owned subsidiary), $160.6 million for the repayment of debt to NTL
Delaware, Inc. Interest is payable on demand at a rate of 5.28516% per annum and will be increased to 15% per annum. On December 22, 2003, Communications Cable Funding Corp. repaid
$4.6 million of the loan and on April 7, 2004, the Company contributed the remaining $156.0 million of the loan to the capital of Communications Cable Funding Corp.

In
addition, on the Effective Date, the Company acquired the public debt of Diamond Cable Communications Limited aggregating $1,373.1 million (including interest of
$136.5 million). On February 4, 2003, the Company released Diamond Cable Communications Limited from its obligations under these notes.

On
September 28, 2001, the Company loaned NTL Europe, Inc. $150.0 million in cash and received 15.0% Promissory Notes due December 31, 2004. Interest is
payable monthly in cash at a rate of 15.0% per year beginning on October 31, 2001. Upon emergence from Chapter 11 reorganization and in accordance with the Plan, these notes were canceled.

No
cash dividends were paid to the registrant by subsidiaries for the years ended December 31, 2004, 2003, and 2002.

F-70

---





NTL INCORPORATED AND SUBSIDIARIES        SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

|Col. A                       |                                 | Col. B |   | Col. C |  | Col. D |      | Col. E
|---------------------------- | ------------------------------- | ------ | - | ------ |  | ------ | ---- | ------
|
|
|
|Reorganized Company          |                                 |        |   |        |  |        |      |       
|Year ended December 31, 2004 |                                 |        |   |        |  |        |      |       
|                             | Allowance for doubtful accounts |        | $ | 24.9   |  | $      | 55.7 |       
|                             |                                 |        |   |        |  |        |      |       
|Year ended December 31, 2003 |                                 |        |   |        |  |        |      |       
|                             | Allowance for doubtful accounts |        | $ |       |  | $      | 23.8 |       
|                             |                                 |        |   |        |  |        |      |       
|Predecessor Company          |                                 |        |   |        |  |        |      |       
|Year ended December 31, 2002 |                                 |        |   |        |  |        |      |       
|                             | Allowance for doubtful accounts |        | $ | 121.7  |  | $      | 53.7 |       
|                             |                                 |        |   |        |  |        |      |       

---

F-71

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