##### 









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


(Mark One)


|  |                                              
|- | ---------------------------------------------
|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31,
2001

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. 0-22616

NTL Communications Corp.

(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.)
|                                                                       
|110 East 59th Street,
	New York, New York                               |  | 10022(Zip Code)                                
|(Address of Principal Executive
	Offices)                               |  |                                                

(212) 906-8440

(Registrants telephone number, including
area code)


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

None


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

None


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  þ  No

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.  þ

As of April 12, 2002, there were 12 shares
of the Registrants common stock outstanding. The
Registrant is an indirect wholly-owned subsidiary of NTL
Incorporated, and there is no market for the Registrants
common stock.

The Registrant meets the conditions set forth in
General Instructions I(1)(a) and I(1)(b) of
Form 10-K and is filing this form with the reduced
disclosure format pursuant to General
Instruction I(2)(b) and I(2)(c).



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Documents Incorporated by Reference

None




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Table of Contents

|                                           |  |                                                                                        |     |      |    | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------- | --- | ---- | -- | 
|                                           |  |                                                                                        |     | Page
|                                           |  |                                                                                        |     |     
|PART I                                     |  |                                                                                        |     |      |    | 
|NTL Corporate Structure                    |  |                                                                                        | 3   |     
|Item 1.                                    |  | Business                                                                               |     |      | 4  | 
|Item 2.                                    |  | Properties                                                                             |     |      | 5  | 
|Item 3.                                    |  | Legal Proceedings                                                                      |     |      | 5  | 
|Item 4.                                    |  | Submission of Matters to a Vote of Security
	Holders                                   |     |      | 5  | 
|                                          
|PART II                                    |  |                                                                                        |     |      |    | 
|Item 5.                                    |  | Market for the Registrants Common Equity
	and Related Stockholder Matters             |     |      | 5  | 
|Item 6.                                    |  | Selected Financial Data                                                                |     |      | 6  | 
|Item 7.                                    |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |     |      | 7  | 
|Item 7a.                                   |  | Quantitative and Qualitative Disclosures about
	Market Risk                            |     |      | 20 | 
|Risk Factors                               |  |                                                                                        | 22  |     
|Item 8.                                    |  | Financial Statements and Supplementary Data                                            |     |      | 26 | 
|Item 9.                                    |  | Changes in and Disagreements with Accountants on
	Accounting And Financial Disclosure  |     |      | 27 | 
|                                          
|PART III                                   |  |                                                                                        |     |      |    | 
|Items 10, 11, 12, and 13                   |  |                                                                                        | 27  |     
|                                          
|PART IV                                    |  |                                                                                        |     |      |    | 
|Item 14.                                   |  | Exhibits, Financial Statement Schedules, and
	Reports On Form 8-K                      |     |      | 27 | 
|Signatures                                 |  |                                                                                        | 34  |     
|Index to Consolidated Financial Statements |  |                                                                                        | F-1 |     

This Annual Report on Form 10-K for the year
ended December 31, 2001, at the time of filing with the
Securities and Exchange Commission, modifies and supersedes all
prior documents filed pursuant to Sections 13, 14 and 15(d)
of the Securities Exchange Act of 1934 for purposes of any
offers or sales of any securities after the date of such filing
pursuant to any Registration Statement or Prospectus filed
pursuant to the Securities Act of 1933 which incorporates by
reference this Annual Report.

Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain statements contained herein constitute
	forward-looking statements as that term is defined
	under the Private Securities Litigation Reform Act of 1995. When
	used in this Form 10-K, the words, believe,
	anticipate, should, intend,
	plan, will, expects,
	estimates, projects,
	positioned, strategy, and similar
	expressions identify such forward-looking statements. Such
	forward-looking statements involve known and unknown risks,
	uncertainties and other factors that may cause the actual
	results, performance or achievements of the Registrant, or
	industry results, to be materially different from those
	contemplated or projected, forecasted, estimated or budgeted,
	whether expressed or implied, by such forward-looking
	statements. Such factors include, among others, those set forth
	under the caption Risk Factors in this
	Form 10-K as well as: the ability of the Company to
	continue as a going concern; the ability of the Company to
	obtain trade credit and shipments and terms with vendors and
	service providers for current orders; the Companys ability
	to maintain contracts that are critical to its operations;
	potential adverse developments with respect to the
	Companys liquidity or results of operations; the ability
	to fund and execute its business plan; the ability to attract,
	retain and compensate key executives and associates; the ability
	of the Company to attract and retain customers; general economic
	and business conditions; technological developments; the
	Companys ability to continue to design networks; install
	facilities; obtain and maintain any required governmental
	licenses or approvals;

1



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | and finance construction and development, all in
	a timely manner at reasonable costs and on satisfactory terms
	and conditions, as well as assumptions about customer
	acceptance, churn rates, overall market penetration and
	competition from providers of alternative services, the impact
	of restructuring and integration actions, the impact of new
	business opportunities requiring significant up-front investment
	and interest rate and currency exchange rate fluctuations.

In this Report on Form 10-K, references to
(pound sterling) pounds sterling,
(pound), pence or p are to
the lawful currency of the UK, references to (euro)
or Euro are to the lawful currency of the European
Monetary Union, references to IR(pounds) or
Irish punts are to the historically lawful currency
of the Republic of Ireland, and references to
U.S. dollars, dollars,
$ or  (cent) are to the lawful
currency of the United States. Solely for the convenience of the
reader, this Form 10-K contains translations of some
foreign currency amounts into U.S. dollars and some
U.S. dollar amounts into foreign currencies. You should not
construe these transactions as representations that the foreign
currency amounts actually represent such U.S. dollar
amounts or vice versa or could have been or could be or will be
converted into U.S. dollars or foreign currencies, as the
case may be, at the rate indicated or at any other rate. Unless
otherwise indicated, the translations of foreign currencies into
U.S. dollars and U.S. dollars into foreign currencies
have been made at $1.4543 per UK (pound) 1.00, $.8901
per (euro) 1.00 and $1.1337 per IR (punt) 1.00, the
noon buying rates in the City of New York for cable transfers as
certified for customs purposes by the Federal Reserve Bank of
New York on December 31, 2001. On March 31, 2002, the
Noon Buying Rate was $1.4250 per (pound) 1.00,
$.8717 per (euro) 1.00 and $1.2539 per IR (punt)
1.00.

2



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NTL CORPORATE STRUCTURE

NTL INCORPORATED FLOWCHART

3



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##### 





|        |          
|------- | ---------
|Item 1. | Business.

RECENT DEVELOPMENTS

Recapitalization Process

On January 31, 2002, NTL Incorporated
(NTL Incorporated and, together with its
consolidated subsidiaries, NTL) announced that it
had appointed Credit Suisse First Boston, JP Morgan and Morgan
Stanley 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. Since
then, it has been evaluating various recapitalization
alternatives to effect a comprehensive consensual
recapitalization in a timely manner and to minimize negative
effects on its business operations. NTL has been engaged in
discussions with an unofficial committee of bondholders, the
members of which hold a majority in principal amount of the
public debt of NTL Incorporated and its subsidiaries, and France
Telecom, which owns a significant amount of NTL
Incorporateds common and preferred stock. On
April 16, NTL Incorporated announced that it and certain of
its subsidiaries had reached an agreement in principle with the
unofficial committee on a comprehensive recapitalization of NTL.
See Item 7 Managements Discussion and Analysis
of Financial Condition and Results of Operations 
Liquidity and Capital Resources and Risk
Factors for a more detailed description of the proposed
recapitalization plan and the associated uncertainties.

NTL Communications Corp. (NTL
Communications or the Company) is a leading
broadband communications company in the U.K. and the Republic of
Ireland.

The Companys predominant lines of business
are:



| |   |                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | CONSUMER SERVICES including residential
	telephony, cable television, Internet access and interactive
	services;                                                                                     
|
| |  | BUSINESS SERVICES including business telephony,
	national and international carrier telecommunications, Internet
	services and radio communications services; and                                    
|
| |  | BROADCAST TRANSMISSION AND TOWER SERVICES
	including digital and analog television and radio broadcasting,
	wireless network management, tower and site leasing and
	satellite distribution services.

NTL Incorporated, a Delaware corporation, was
incorporated in February 1999, to effect a reorganization into a
holding company structure under Section 251(g) of the Delaware
General Corporation Law. The holding company structure, which
was implemented to pursue opportunities outside of the U. K. and
Ireland, was accomplished through a merger. The stockholders of
NTL Communications (formerly NTL Incorporated), at the effective
time of the merger became stockholders of the new holding
company, and NTL Communications became a subsidiary of the new
holding company. The new holding company took the name NTL
Incorporated.

NTL Incorporated completed a second
reorganization in May 2000. A new holding company structure,
which was implemented in connection with the acquisition of the
residential assets of Cable & Wireless Communications plc
(CWC) (the operations acquired from CWC are called
ConsumerCo), was accomplished through a merger. The
stockholders of NTL (Delaware), Inc. (formerly NTL
Incorporated), at the effective time of the merger became
stockholders of the new holding company, and NTL (Delaware),
Inc. became a subsidiary of the new holding company. The new
holding company then took the name NTL Incorporated.

On February 21, 2001, NTL Incorporated
contributed the assets of ConsumerCo to NTL Communications and
NTL (Delaware), Inc. (NTL Delaware) contributed the
assets of NTL Business Limited (NTL Business)
(formerly Workplace Technologies plc) to NTL Communications. NTL
Group Limited, a wholly-owned indirect subsidiary of NTL
Communications, which was acquired in 1996, has a 30-year
history in the United Kingdom as a provider of reliable
communications services. NTL Communications conducts its
operations through direct and indirect wholly-owned
subsidiaries. NTL Communications principal executive
office is located at 110 East 59th Street, New York,
New York 10022, and its telephone number is
(212) 906-8440.

4



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Item
2.     Properties.

In the UK and Ireland, we own, lease or occupy
under license 126 business unit and regional offices, our
corporate head offices in each of Hook and Dublin, and
9 retail shops. In addition, we own or lease approximately
655 switching centers/ head-ends and operational hub-sites
together with warehouses and other non-operational properties,
as well as various cable television, telephone and
telecommunications equipment housed on public and private sites.

In addition, in the UK, for the purposes of our
site leasing and broadcast transmission businesses, we own,
lease, contract to lease, or occupy under license approximately
1,370 properties. For these businesses, we also are the
licensee of approximately 680 transmitter sites which are
owned by Castle Transmission and shared between the two
organizations pursuant to a site sharing agreement.

We maintain offices under lease for our corporate
staff in New York City. We believe that our facilities are
presently adequate for their current use.

Item 3.     Legal
Proceedings.

We are involved in, or have been involved in,
certain disputes and litigation arising in the ordinary course
of business, including claims involving contractual disputes and
claims for damages to property and personal injury resulting
from the construction of our networks and the maintenance and
servicing of our transmission masts, none of which are expected
to have a material adverse effect on our financial position or
results of operations or cash flows.

Item
4.     Submission of Matters to a
Vote of Security Holders.

Omitted pursuant to General
Instruction I(2)(c) of Form 10-K.

PART II



|        |                                                                            
|------- | ---------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common
	Equity and Related Stockholder Matters.

The Company is an indirect wholly-owned
subsidiary of NTL Incorporated and there is no market for the
Companys common stock.

Sales of Unregistered Securities

In May 2001, in reliance on the exemptions
from registration provided by Section 4(2) and Rule 144A of the
Securities Act, we issued $1,150.0 million aggregate principal
amount of 6 3/4% Convertible Senior Notes due May 15,
2008 to qualified institutional buyers. We received proceeds of
approximately $1,114.8 million after placement agents
commission and other fees. Interest is payable semiannually in
cash at a rate of 6 3/4% per annum beginning on
November 15, 2001. These notes are convertible into shares
of common stock of our parent, NTL Incorporated, at the option
of the holder after August 13, 2001 at a conversion price
of $32.728 per share. After May 20, 2004, the notes are
redeemable, in whole or from time to time in part, at NTL
Incorporateds and our option. NTL Incorporated is a
co-obligator of the notes on a subordinated basis. Proceeds
raised from the issuance were used to reduce commitments under
the UK working capital facility, finance construction, capital
expenditure, working capital requirements and for general
corporate purposes.

5



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Item 6.     Selected
Financial Data.

The following table sets forth certain financial
data for the years ended December 31, 2001, 2000, 1999,
1998 and 1997. This information should be read in conjunction
with the consolidated financial statements and notes thereto
appearing elsewhere in this Form 10-K.

|                                 |  |                         |           |      |  |      |          |      |  |      |         |   |  |   |        |   |  |   |        |  
|-------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | -------- | ---- |  | ---- | ------- | - |  | - | ------ | - |  | - | ------ | -
|                                 |  |                        
|                                 |  | Year Ended December 31,
|                                 |  |                        
|                                 |  | 2001                    |           | 2000 |  | 1999 |          | 1998 |  | 1997
|                                 |  |                         |           |      |  |      |          |      |  |     
|                                 |  | (1)                     |           | (2)  |  | (3)  |          | (4)  |  |     
|                                 |  |                        
|                                 |  | (In millions)          
|Income statement data:           |  |                         |           |      |  |      |          |      |  |      |         |   |  |   |        |   |  |   |        |  
|Operating revenues               |  | $                       | 3,189.6   |      |  | $    | 2,484.2  |      |  | $    | 1,537.1 |   |  | $ | 747.0  |   |  | $ | 491.8  |  
|(Loss) before extraordinary item |  |                         | (11,837.0 | )    |  |      | (2,388.1 | )    |  |      | (713.5  | ) |  |   | (503.9 | ) |  |   | (328.6 | )
|Net (loss)                       |  |                         | (11,837.0 | )    |  |      | (2,388.1 | )    |  |      | (716.5  | ) |  |   | (534.6 | ) |  |   | (333.1 | )

|                                  |  |                         |           |      |  |      |          |      |  |      |         |  |  |   |         |  |  |   |         |  
|--------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | -------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | -
|                                  |  |                        
|                                  |  | As of December 31, 2000
|                                  |  |                        
|                                  |  | 2001                    |           | 2000 |  | 1999 |          | 1998 |  | 1997
|                                  |  |                         |           |      |  |      |          |      |  |     
|                                  |  | (1)                     |           | (2)  |  | (3)  |          | (4)  |  |     
|                                  |  |                        
|                                  |  | (In millions)          
|Balance sheet data:               |  |                         |           |      |  |      |          |      |  |      |         |  |  |   |         |  |  |   |         |  
|Working capital (deficiency)      |  | $                       | (15,073.6 | )    |  | $    | (946.3   | )    |  | $    | 423.9   |  |  | $ | 600.5   |  |  | $ | (52.3   | )
|Fixed assets, net                 |  |                         | 10,840.3  |      |  |      | 10,916.8 |      |  |      | 5,348.4 |  |  |   | 3,854.4 |  |  |   | 1,757.0 |  
|Total assets                      |  |                         | 13,026.1  |      |  |      | 23,146.5 |      |  |      | 9,733.0 |  |  |   | 6,194.1 |  |  |   | 2,421.6 |  
|Long-term debt                    |  |                         |          |      |  |      | 11,843.4 |      |  |      | 7,598.0 |  |  |   | 5,043.8 |  |  |   | 2,015.1 |  
|Redeemable preferred stock        |  |                         |          |      |  |      |         |      |  |      |        |  |  |   | 124.1   |  |  |   | 108.5   |  
|Shareholders (deficiency) equity |  |                         | (3,179.0  | )    |  |      | 9,012.2  |      |  |      | 1,066.0 |  |  |   | 355.2   |  |  |   | (61.7   | )



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of December 31, 2001, all of the
	Companys debt has been classified as current due to the
	uncertainties about compliance with the terms and conditions of
	the Companys debt that would give the holders of the debt
	the right to accelerate payment. In the fourth quarter of 2001,
	the Company recorded asset impairments totaling
	$8,161.6 million including goodwill of
	$8,077.8 million, license acquisition costs of
	$58.8 million, customer lists of $9.1 million, other
	intangibles of $14.9 million and investments in affiliates
	of $1.0 million. In addition, in 2001 the Company recorded
	restructuring costs of $202.8 million, integration and
	consulting costs of $95.1 million and a loss on the sale of
	the ConsumerCo off-net indirect access customers of
	$88.5 million.                                                                 
|   
|(2) | In May 2000, NTL Incorporated purchased
	ConsumerCo for an aggregate purchase price of
	$13,111.0 million, including intangibles of $8,879.0
	million. ConsumerCo was subsequently acquired by the Company
	from NTL Incorporated. The net assets and results of operations
	of ConsumerCo are included in the consolidated financial
	statements from May 2000, the date of the acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(3) | In March 1999, the Company purchased Diamond
	Cable Communications plc (Diamond) for an aggregate
	purchase price of $984.6 million, including intangibles
	aggregating $1,323.0 million. In July 1999, the Company
	acquired Cablelink Limited (Cablelink) for an
	aggregate purchase price of $700.5 million, including
	intangibles of $669.6 million. In September 1999, NTL
	Delaware acquired the shares of Workplace Technologies plc, for
	an aggregate purchase price of $175.0 million, including
	intangibles of $176.9 million. Workplace Technologies was
	subsequently acquired by the Company from NTL Delaware. The net
	assets and results of operations of Diamond, Cablelink and
	Workplace Technologies are included in the consolidated
	financial statements from March 1999, July 1999 and September
	1999, their respective dates of acquisition.
|   
|(4) | In June and September 1998, the Company purchased
	ComTel Limited and Telecential Communications (collectively
	Comtel) for an aggregate purchase price of
	$969 million, including intangibles aggregating $224
	million. In October 1998, the Company purchased Comcast U.K.
	Cable Partners Limited (Comcast U.K.) for an
	aggregate purchase price of $600 million, including intangibles
	of $130 million. In December 1998, the Company purchased
	Eastern Group Telecoms (EGT) for an                                                                                                                                                                                                                                                                                                                                                                           

6



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| |                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | aggregate purchase price of $151 million,
	including intangibles of $45 million. The net assets and
	results of operations of ComTel, Comcast U.K. and EGT are
	included in the consolidated financial statements from their
	respective dates of acquisition.



|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
	of Financial Condition and Results of Operations.

Liquidity and Capital Resources

Recapitalization
Process and Ability to Continue Operations

The Company required significant amounts of
capital to finance construction of its networks, connection of
customers to the networks, other capital expenditures and for
working capital needs including debt service requirements. The
Company historically met these liquidity requirements through
issuances of high-yield debt securities in the capital markets
and equity contributions from NTL Incorporated. Both the equity
and debt capital markets have recently experienced periods of
significant volatility, particularly for securities issued by
telecommunications and technology companies. The ability of
telecommunications companies to access those markets as well as
their ability to obtain financing provided by bank lenders and
equipment suppliers has become more restricted and financing
costs have increased. During some recent periods, the capital
markets have been largely unavailable to new issues of
securities by telecommunications companies. NTL
Incorporateds public equity is no longer trading on the
New York Stock Exchange, and NTLs public debt securities
are trading at or near all time lows. These factors, together
with the Companys substantial leverage, mean the Company
does not currently have access to its historic sources of
capital.

In addition, NTLs UK credit facilities are
fully drawn and NTLs Swiss subsidiaries are currently
unable to draw the remaining undrawn amounts under the Cablecom
credit facility. The Company did not pay cash interest on
certain series of its notes that was due on April 1, 2002
and April 15, 2002. NTL Incorporated and NTL Delaware, a
wholly-owned subsidiary of NTL Incorporated, also did not pay
cash interest and related fees on a series of their notes that
was due on April 15, 2002. As of December 31, 2001,
NTL had approximately $505 million in cash and cash equivalents
on hand and, on April 4, 2002, received approximately
$303 million net cash proceeds from the sale of its
Australian business. NTL and the Company will require cash for
working capital and capital expenditures in 2002. If NTL makes
scheduled and overdue interest payments on its notes, then NTL
will not have sufficient cash resources to meet its liquidity
needs through the third quarter of 2002.

The Company does not generate sufficient cash
flow from operations to fund its operational expenses and
interest payments. The Company has historically met its cash
requirements through equity from NTL Incorporated and issuances
of high yield debt securities. Given NTL Incorporateds
liquidity situation, it is likely that it will not be able to
provide the Company with cash at least for the short-term.

These liquidity concerns raise substantial doubt
about the Companys ability to continue as a going concern.
As a consequence, the Company, NTL Incorporated and certain of
its subsidiaries need to restructure their outstanding debt
and/or raise new funds through the issuance of equity or
additional debt.

On January 31, 2002, NTL Incorporated
announced that it had appointed Credit Suisse First Boston,
JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen NTLs balance
sheet and reduce debt and put an appropriate capital structure
in place for its business. Since then, NTL has been evaluating
various recapitalization alternatives to effect a comprehensive
consensual reorganization in a timely manner to minimize
negative effects on its business operations.

On April 16, 2002, NTL announced that it and
an unofficial committee of its public bondholders had reached an
agreement in principle on a comprehensive recapitalization of
NTL. The members of the committee hold in the aggregate over 50%
of the face value of NTL Incorporateds and its
subsidiaries public bonds. The recapitalization would
result in a conversion of approximately $10.6 billion in
debt into equity.

To implement the proposed recapitalization, NTL
Incorporated, NTL Delaware, the Company, Diamond Cable
Communications Limited and Diamond Holdings Limited would file a
pre-negotiated recapitalization plan in a Chapter 11 case
under the U.S. Bankruptcy Code. NTLs operating
subsidiaries would not be

7



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##### 



included in the Chapter 11 filing. The
agreement in principle is subject to various conditions,
including mutually acceptable terms with NTLs bank
lenders. The recapitalization transaction contemplates that the
bank debt will remain in place as part of the recapitalization.


To facilitate the recapitalization, certain
members of the unofficial committee of bondholders would commit
to provide up to $500 million of new debt financing to
NTLs UK and Ireland operations during the Chapter 11
process and for the post-recapitalized NTL. The new financing
will ensure that NTLs business operations have access to
sufficient liquidity to continue ordinary operations.

Under the agreement in principle, NTL would be
split into two companies, one tentatively called NTL UK and
Ireland and holding all of its UK and Ireland assets, and one
tentatively called NTL Euroco and holding certain of its
continental European and other assets.

Holders of notes of NTL Incorporated, NTL
(Delaware), Inc., the Company and Diamond Cable Communications
Limited would in the aggregate receive 100% of the initial
common stock of NTL UK and Ireland and approximately 86.5%
of the initial common stock of NTL Euroco. NTL (Delaware), Inc.
bondholders would have the option to reinvest all or a portion
of NTL (Delaware), Inc. cash in additional shares of NTL UK and
Ireland common stock, or to receive such cash in the
recapitalization. Notes of Diamond Holdings Limited and NTL
Triangle would remain outstanding and will be kept current in
interest payments. Current preferred and common stockholders,
including France Telecom, would participate in a package of
rights (to be priced at a $10.5 billion enterprise value)
and warrants entitling them to purchase primary common stock of
NTL UK and Ireland at the consummation of the proposed
plan, in the case of the rights, and for the duration of the
eight-year warrants at prescribed prices. If fully exercised,
those rights and warrants would entitle the current preferred
stockholders to acquire approximately 23.6% and the current
common stockholders to acquire approximately 8.9% of the
entitys primary common stock.

Current preferred stockholders other than France
Telecom would receive approximately 3.2% and current common
stockholders, other than France Telecom, would receive
approximately 10.3% of the primary equity of NTL Euroco. It is
contemplated that subject to consummation of the
recapitalization France Telecom would also receive NTL
Incorporateds 27% interest in Noos, pursuant to a pledge
of such interests to France Telecom given at the time of its
acquisition by NTL.

During the recapitalization process, NTL has
maintained normal and regular trade terms with its suppliers and
customers. There can be no assurance that NTLs suppliers
will continue to provide normal trade credit or credit on
acceptable terms, if at all, or that customers will continue to
do business or enter into new business with NTL. See also
Risk Factors for a summary of risks related to
NTLs business in general and the recapitalization process
in particular.

Bank
Waivers

Before NTL could commence negotiations with the
unofficial committee of bondholders, it was necessary to obtain
waivers from the lenders under its credit facilities. Effective
March 8, 2002, these lenders granted waivers which, until
March 29, 2002, provided that the commencement of
negotiations with bondholders with a view to rescheduling its
debt would not constitute an event of default under the credit
facilities.

But for the initial waivers, the commencement of
negotiations with bondholders would have been an event of
default under the credit facilities. If an event of default were
to occur, it would entitle the lenders under the credit
facilities to declare the principal amount of the outstanding
debt immediately due and payable. If this right was exercised,
it would result in an event of default under all of NTLs
outstanding notes, except for those issued by Diamond Cable
Communications, Diamond Holdings and NTL Triangle, entitling the
trustee or 25% of the holders of a series to accelerate the
repayment of that series of notes. NTL does not have sufficient
cash resources to repay its outstanding indebtedness if it is
declared immediately due and payable.

8



---



##### 



In connection with the granting of the initial
waivers, NTL agreed:



| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to provide the lenders with a 13 week
	rolling cash flow projection (updated every two weeks);                                                                                 
|
| |  | to keep the lenders informed of, and to provide
	documents in connection with, negotiations with bondholders or
	strategic investors or concerning proposed asset dispositions;
|
| |  | not to repurchase NTL notes; and                                                                                                                                               
|
| |  | not to make an exchange offer for NTL notes or
	enter into an agreement with NTL bondholders, subject to some
	exceptions, without the consent of the lenders.                 

Effective March 28, 2002, the lenders under
the credit facilities agreed to amend the initial waivers. The
amendments to the initial waivers extend the duration of the
initial waivers to April 30, 2002 in the case of the UK
credit facilities or May 14 in the case of the Cablecom
facility, unless the missed interest payments on April 1,
2002 are remedied or a sufficient number of bondholders agree to
forbear in respect of such non-payment, in which case, the UK
credit facilities waivers will be extended to May 14, 2002.
As a condition to the waivers continuing effectiveness,
the UK lenders required NTL Delaware to loan
£90 million to NTL (UK) Group, Inc. following
receipt of the proceeds from the sale of NTL Australia. This
loan is structurally senior to the outstanding public notes
issued by the Company but contractually subordinated to the UK
credit facilities. In connection with the amendments to the
waivers, NTL affirmed the provisions of the initial waivers and
in addition, NTL agreed, among other things, to:



| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | provide the bank lenders a timeline setting forth
	the steps proposed to be taken in connection with the
	recapitalization and the dates by which such steps are to be
	taken;                                                                             
|
| |  | use reasonable endeavors to consider with the
	lenders under the Cablecom credit facility possible means of
	credit enhancement;                                                                                                                           
|
| |  | provide the lenders under the Cablecom credit
	facility, by April 12, 2002, with an updated structure
	chart of NTL as well as a contingency business plan for Cablecom
	in the event that sufficient additional funding for Cablecom is
	not obtained; and
|
| |  | pay legal, accounting and other advisory fees of
	the agent or coordinators of the Cablecom credit facility.                                                                                                                                               

The amended waivers prevent NTL from making an
exchange offer with respect to its outstanding notes or from
entering into an agreement with bondholders without the consent
of the lenders under each of the credit facilities. The amended
waivers also prohibit NTL from commencing voluntary dissolution
proceedings, including proceedings under Chapter 11 of the
U.S. Bankruptcy Code, without the consent of these lenders.

As a consequence, NTL cannot enter into a binding
agreement with the unofficial bondholder committee or implement
the proposed plan without the consent of its bank lenders.

Cablecom GmbH is the principal trading company of
NTLs Swiss group. There are a number of technical defaults
under the Swiss credit facility made available to Cablecom and
various of its subsidiaries. In addition, as of
December 31, 2001, Cablecoms and various of its
subsidiaries liabilities exceeded their respective assets.
As a consequence, under Swiss law, those entities were deemed to
be overindebted. This also constituted an event of
default under the Cablecom credit facility which entitles the
lenders to accelerate repayment. Such an acceleration would
result in an event of default under NTL Incorporateds and
NTL Delawares 5.75% convertible subordinated notes due
2011 and 5.75% convertible subordinated notes due 2009,
entitling the trustee or the holders of 25% of each series of
notes to accelerate repayment. Under Swiss law, unless the
overindebtedness is rectified, those entities would be required
to commence an insolvency proceeding in Switzerland. A plan has
been formulated to rectify this overindebtedness. Implementation
of this plan prior to April 30, 2002 would mean that those
entities would not be required to commence an insolvency
proceeding. Those proceedings would likely either be a court
supervised moratorium in which an independent administrator, or
commissioner, would be appointed to supervise the running of
each company during a restructuring or, if there is no viable
restructuring plan, a bankruptcy. The commencement of those

9



---



##### 



insolvency proceedings would also constitute an
immediate event of default and acceleration of the maturity of
the convertible subordinated notes referred to above.


NTL is currently in discussions with the lenders
under the Swiss credit facility regarding proposals to resolve
the over indebtedness issue as well as requesting that they
waive various additional covenant breaches under the credit
facility. There can be no assurance that NTL will reach
agreement on the resolution of the over indebtedness issue
within the time period required or obtain the requested waivers.

Interest
Payments on Public Notes

NTL has substantial interest payment obligations
under its existing indebtedness. The Company did not make
scheduled interest payments due April 1, 2002, in the
aggregate amount of $74.3 million, in respect of its
9 1/2% notes due 2008, 11 1/2% notes due 2008 and
11 7/8% notes due 2010. In addition, the Company did not
make interest payments falling due on April 15, 2002,
totaling $20.2 million, in respect of the 12 3/4%
Senior Deferred Coupon Notes due 2005 and NTL Incorporated and
NTL Delaware did not make interest payments and payment of
related fees falling due on April 15, 2002 in respect of
their 5 3/4% Convertible Subordinated Notes due 2011. Those
payments were not made after consideration by NTL of requests by
the unofficial bondholder committee not to make those payments.
Interest payments of $18.9 million were made, when due, on
April 2, 2002 in respect of Diamond Cable Communications
13.25% senior discount notes due 2004. On May 15, 2002,
interest totaling $94.0 million is due on outstanding notes
of the Company and NTL Triangle.

If the applicable issuer does not pay interest on
these notes after a 30 day grace period expires (on
April 30, 2002 in the case of the missed interest payments
due April 1, 2002), there is an event of default under the
indenture in respect of the notes on which the interest is due
and unpaid. An event of default entitles the trustee under the
indenture or the holders of 25% of the outstanding notes to
declare the principal amount of those notes to be immediately
due and payable. Even if the maturity of those notes is not
accelerated after April 30, 2002, such an event of default
would also result in an event of default in respect of other
debt (commonly called cross defaults) under all of NTLs
other notes, except for those issued by NTL Triangle, Diamond
Cable Communications or Diamond Holdings. As a result, upon the
expiration of the grace period, on April 30, 2002, events
of default for failure to pay interest would occur under the
relevant indentures at the Company and, contemporaneously, cross
defaults would occur under NTLs other indentures at the
Company, NTL Delaware, NTL Incorporated and under NTLs UK
credit facilities and could occur under NTLs Cablecom
facility. This would give holders of the outstanding series of
debt at these entities the right to accelerate repayment of
those debts by declaring the principal amount of the debts to be
immediately due and payable unless NTL obtains waivers or
forbearance agreements from sufficient percentages of its
creditors. If that right to accelerate was exercised, NTL would
not have sufficient cash resources to repay those debts, which
could ultimately lead to voluntary or involuntary bankruptcy
proceedings relating to the entities so affected. In addition,
the lenders under NTLs UK credit facilities have security
over the assets of NTLs UK operating subsidiaries, except
for the Diamond and NTL Triangle groups of companies. In the
event that there was an event of default under those facilities,
the lenders could seek to take control of those assets under
applicable UK insolvency law.

Credit Rating
Downgrades

On April 3, 2002, credit rating agency
Standard & Poors lowered the long-term corporate
credit rating on some of NTLs public debt to D, citing
NTLs failure to make a bond interest payment due on
April 1, 2002.

Sale of NTL
Australia

On April 2, 2002, NTL announced that it had
completed the previously announced sale of its Australian
broadcast business to Macquarie Bank for A$850 million
(US$448 million) in an all cash transaction. The net
proceeds from the sale were approximately A$574 million
(US$303 million). At that time, the business bank
debt outstanding totaled A$227 million
(US$119 million).

10



---



##### 



On April 7, 2002, NTL Delaware loaned
£90 million to NTL (UK) Group Limited, which loan
was funded by the proceeds of the sale of NTL Australia. This
loan is subordinated to NTLs UK credit facilities. The
remaining proceeds of the sale of NTL Australia remain at NTL
Delaware and it is currently anticipated that such proceeds will
form a portion of the consideration to be offered to bondholders
of NTL Delaware and NTL Incorporated in satisfaction of their
claims against NTL Delaware as part of the proposed plan of
reorganization.

Description
of Outstanding Notes, Credit Facilities and Redeemable Preferred
Stock

The following summarizes the terms of the
significant notes, credit facilities and redeemable preferred
stock issued by the Company and its subsidiaries as of
December 31, 2001.

NTL
Communications:



| |                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) 12 3/4% Senior Deferred Coupon
	Notes due April 15, 2005, principal amount at maturity of
	$277.8 million, interest payable semiannually from
	October 15, 2000, redeemable at the Companys option
	on or after April 15, 2000;                                                                                          
|
| | (2) 11 1/2% Senior Deferred Coupon
	Notes due February 1, 2006, principal amount at maturity of
	$1,050.0 million, interest payable semiannually from
	August 1, 2001, redeemable at the Companys option on
	or after February 1, 2001;                                                                                      
|
| | (3) 10% Senior Notes due February 15,
	2007, principal amount of $400.0 million, interest payable
	semiannually from August 15, 1997, redeemable at the
	Companys option on or after February 15, 2002;                                                                                                                      
|
| | (4) 9 1/2% Senior Sterling Notes due
	April 1, 2008, principal amount of £125.0 million
	($181.8 million), interest payable semiannually from
	October 1, 1998, redeemable at the Companys option on
	or after April 1, 2003;                                                                                                
|
| | (5) 10 3/4% Senior Deferred Coupon
	Sterling Notes due April 1, 2008, principal amount at
	maturity of £300.0 million ($436.3 million),
	interest payable semiannually from October 1, 2003,
	redeemable at the Companys option on or after
	April 1, 2003;                                                                  
|
| | (6) 9 3/4% Senior Deferred Coupon Notes
	due April 1, 2008, principal amount at maturity of
	$1,300.0 million, interest payable semiannually beginning
	on October 1, 2003, redeemable at the Companys option
	on or after April 1, 2003;                                                                                    
|
| | (7) 9 3/4% Senior Deferred Coupon
	Sterling Notes due April 15, 2009, principal amount at
	maturity of £330.0 million ($479.9 million),
	interest payable semiannually beginning on October 15,
	2004, redeemable at the Companys option on or after
	April 15, 2004;                                                        
|
| | (8) 11 1/2% Senior Notes due
	October 1, 2008, principal amount of $625.0 million,
	interest payable semiannually from April 1, 1999,
	redeemable at the Companys option on or after
	October 1, 2003;                                                                                                                       
|
| | (9) 12 3/8% Senior Deferred Coupon
	Notes due October 1, 2008, principal amount at maturity of
	$450.0 million, interest payable semiannually beginning on
	April 1, 2004, redeemable at the Companys option on
	or after October 1, 2003;                                                                                   
|
| | (10) 7% Convertible Subordinated Notes due
	December 15, 2008, principal amount of $489.8 million,
	interest payable semiannually from June 15, 1999,
	convertible into shares of NTL Incorporated common stock at a
	conversion price of $39.20 per share, redeemable at the
	Companys option on or after December 15, 2001;
|
| | (11) 9 1/4% Senior Euro Notes due
	November 15, 2006, principal amount of
	250.0 million
	($222.5 million), interest payable semiannually from May
	15, 2000;                                                                                                                                                                

11



---



##### 





| |                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (12) 9 7/8% Senior Euro Notes due
	November 15, 2009, principal amount of
	350.0 million
	($311.5 million), interest payable semiannually from
	May 15, 2000, redeemable at the Companys option on or
	after November 15, 2004;                                                                                                  
|
| | (13) 11 1/2% Senior Deferred Coupon
	Euro Notes due November 15, 2009, principal amount at
	maturity of
	210.0 million
	($186.9 million), interest payable semiannually from
	May 15, 2005, redeemable at the Companys option on or
	after November 15, 2004;                                                                    
|
| | (14) 11 7/8% Senior Notes due
	October 1, 2010, principal amount at maturity of
	$500.0 million, interest payable semiannually beginning on
	April 1, 2001, redeemable at the Companys option on
	or after October 1, 2005;                                                                                                       
|
| | (15) 12 3/8% Senior Euro Notes due
	February 1, 2008, principal amount at maturity of
	300.0 million
	($267.0 million), interest payable semiannually from
	August 1, 2001;                                                                                                                                                       
|
| | (16) 6 3/4% Convertible Senior Notes
	due May 15, 2008, principal amount at maturity of
	$1,150.0 million, interest payable semiannually from
	November 15, 2001, convertible into shares of the
	Companys common stock at a conversion price of $32.728 per
	share, redeemable at the Companys option on or after
	May 21, 2004;

NTLCL:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (17) Working Capital Facility, originally
	for £1,300.0 million ($1,890.6 million);
	following the issuance of new debt beginning in October 2000,
	the commitment has been reduced by £882.5 million
	($1,283.4 million), of which £100.0 million
	($145.4 million) was outstanding as of December 31,
	2001. Interest payable at least every six months at LIBOR plus a
	margin rate of 5.50% per annum, which is subject to adjustment;
	effective interest rate of 9.57% at December 31, 2001; the
	unused portion of the commitment is subject to a commitment fee
	of 0.75% payable quarterly; principal is due in full on
	March 31, 2006; in January and February 2002 the remaining
	amounts available under this agreement were borrowed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (18) Senior Credit Facility, of which
	£2,784.8 million ($4,050.0 million) was
	outstanding as of December 31, 2001; originally for
	£2,500.0 million ($3,635.8 million), dated 30 May
	2000; interest payable at least every six months at LIBOR plus a
	margin rate of 2.00% per annum, which is subject to adjustment;
	effective interest rate of 6.73% at December 31, 2001; the
	unused portion of the commitment is subject to a commitment fee
	of 0.75% payable quarterly, which is reduced to 0.50% when over
	50% of the commitment is utilized; principal is due in six
	quarterly installments beginning on June 30, 2004; as
	amended and restated pursuant to a Restatement Amendment
	Agreement dated 26 September 2001 which, inter alia, amended
	such Senior Credit Facility to make available a
	£200.0 million ($290.9 million) Term Facility
	(interest payable on such Term Facility at least every six
	months at LIBOR plus a margin rate of 3.50% per annum, effective
	interest rate of 8.06 % at December 31, 2001, principal is
	due in eight quarterly installments beginning on June 30,
	2006) and increase the availability of funds under the Senior
	Credit Facility by £84.8 million ($123.3 million);

NTL
Triangle:



| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (19) 11.2% Senior Discount Debentures due
	November 15, 2007, principal amount at maturity of
	$517.3 million, interest payable semiannually beginning on
	May 15, 2001, redeemable at NTL Triangles option
	after November 15, 2000;

12



---



##### 



Diamond:



| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (20) 13 1/4% Senior Discount Notes due
	September 30, 2004, principal amount at maturity of
	$285.1 million, interest payable semiannually from
	March 31, 2000, redeemable at Diamonds option on or
	after September 30, 1999;                                                                           
|
| | (21) 11 3/4% Senior Discount Notes due
	December 15, 2005, principal amount at maturity of
	$531.0 million, interest payable semiannually from
	June 15, 2001, redeemable at Diamonds option on or
	after December 15, 2000;                                                                              
|
| | (22) 10 3/4% Senior Discount Notes due
	February 15, 2007, principal amount at maturity of
	$420.5 million, interest payable semiannually beginning on
	August 15, 2002, redeemable at Diamonds option on or
	after December 15, 2002;                                                                    
|
| | (23) 10% Senior Notes due February 1,
	2008, issued by Diamond Holdings plc, a wholly-owned subsidiary
	of Diamond, principal amount at maturity of £135.0 million
	($196.3 million), interest payable semiannually from
	August 1, 1998, redeemable at Diamonds option on or
	after February 1, 2003; and
|
| | (24) 9 1/8% Senior Notes due
	February 1, 2008, issued by Diamond Holdings plc, principal
	amount of $110.0 million, interest payable semiannually
	from August 1, 1998, redeemable at Diamonds option on
	or after February 1, 2003.                                                                     

Contractual Obligations and Commercial
Commitments

On January 22, 2002, the Securities and
Exchange Commission issued FR-61, Commission Statement
about Managements Discussion and Analysis of Financial
Condition and Results of Operations. The release sets
forth certain views of the Securities and Exchange Commission
regarding disclosure that should be considered by registrants.
The Companys consolidated contractual obligations and
commercial commitments are summarized below, and are fully
disclosed in the Notes to Consolidated Financial Statements.

The following table includes aggregate
information about the Companys contractual obligations as
of December 31, 2001 and the periods in which payments are
due. The entire long-term debt and capital lease obligation has
been classified as current due to the uncertainties about
compliance with the terms and conditions of the Companys
debt that would give the holders of the debt the right to
accelerate repayment.

|                                   |  |                        |          |           |  |       |       |       |  |         |       |  |  |   |         |  |  |   |         | 
|---------------------------------- |  | ---------------------- | -------- | --------- |  | ----- | ----- | ----- |  | ------- | ----- |  |  | - | ------- |  |  | - | ------- | 
|                                   |  |                       
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  |                        |          | Less than |  | 1-3   |       | 4-5   |  | After  
|Contractual Obligations            |  | Total                  |          | 1 Year    |  | Years |       | Years |  | 5 Years
|                                   |  |                        |          |           |  |       |       |       |  |        
|                                   |  |                       
|                                   |  | (In millions)         
|Long-Term Debt                     |  | $                      | 14,650.9 |           |  | $     | 2.9   |       |  | $       | 420.7 |  |  | $ | 5,888.3 |  |  | $ | 8,339.0 | 
|Capital Lease Obligations          |  |                        | 192.7    |           |  |       | 9.3   |       |  |         | 15.5  |  |  |   | 12.7    |  |  |   | 155.2   | 
|Operating Leases                   |  |                        | 476.9    |           |  |       | 82.9  |       |  |         | 104.7 |  |  |   | 63.6    |  |  |   | 225.7   | 
|Unconditional Purchase Obligations |  |                        | 1,367.0  |           |  |       | 306.0 |       |  |         | 216.0 |  |  |   | 195.0   |  |  |   | 650.0   | 
|Other Long-Term Obligations        |  |                        | none     |           |  |       |       |       |  |         |       |  |  |   |         |  |  |   |         | 
|Total Contractual Cash Obligations |  | $                      | 16,687.5 |           |  | $     | 401.1 |       |  | $       | 756.9 |  |  | $ | 6,159.6 |  |  | $ | 9,369.9 | 

13



---



##### 



The following table includes aggregate
information about the Companys commercial commitments as
of December 31, 2001. Commercial commitments are items that
the Company could be obligated to pay in the future. They are
not required to be included in the consolidated balance sheet.

|                               |  |                                            |      |           |  |       |     |       |  |         |     |  |  |   |      |  |  |   |      | 
|------------------------------ |  | ------------------------------------------ | ---- | --------- |  | ----- | --- | ----- |  | ------- | --- |  |  | - | ---- |  |  | - | ---- | 
|                               |  |                                           
|                               |  | Amount of Commitment Expiration Per Period
|                               |  |                                           
|Other Commercial               |  | Total Amounts                              |      | Less than |  | 1-3   |     | 4-5   |  | Over   
|Commitments                    |  | Committed                                  |      | 1 year    |  | years |     | years |  | 5 years
|                               |  |                                            |      |           |  |       |     |       |  |        
|                               |  |                                           
|                               |  | (In millions)                             
|Guarantees                     |  | $                                          | 31.0 |           |  | $     | 3.2 |       |  | $       | 1.4 |  |  | $ | 11.9 |  |  | $ | 14.5 | 
|Lines of Credit                |  |                                            | none |           |  |       |     |       |  |         |     |  |  |   |      |  |  |   |      | 
|Standby Letters of Credit      |  |                                            | none |           |  |       |     |       |  |         |     |  |  |   |      |  |  |   |      | 
|Standby Repurchase Obligations |  |                                            | none |           |  |       |     |       |  |         |     |  |  |   |      |  |  |   |      | 
|Other Commercial Commitments   |  |                                            | none |           |  |       |     |       |  |         |     |  |  |   |      |  |  |   |      | 
|Total Commercial Commitments   |  | $                                          | 31.0 |           |  | $     | 3.2 |       |  | $       | 1.4 |  |  | $ | 11.9 |  |  | $ | 14.5 | 

Consolidated Statements of Cash
Flows

Cash used in operating activities was
$558.7 million and $170.3 million in the years ended
December 31, 2001 and 2000, respectively. Cash paid for
interest exclusive of amounts capitalized in the years ended
December 31, 2001 and 2000 was $776.6 million and
$363.9 million, respectively. In addition, the change in
cash used in operating activities is also due to changes in
working capital as a result of the timing of receipts and
disbursements.

Purchases of fixed assets were
$1,653.0 million in 2001 and $1,961.8 million in 2000
as a result of the continuing fixed asset purchases and
construction, including purchases and construction by acquired
companies. The Company expects to further reduce purchases of
fixed assets in 2002 in an effort to conserve cash.

Proceeds from borrowings, net of financing costs
of $2,643.4 million in 2001 include $838.5 million borrowed
under the NTLCL senior credit facility, $431.8 million borrowed
under the NTLCL working capital facility, $1,150.0 million
from the issuance of NTL Communications 6 3/4% Convertible
Senior Notes and $277.9 million from the issuance of NTL
Communications 12 3/8% Senior Euro Notes, net of aggregate
financing costs of $54.8 million.

Critical Accounting Policies

The consolidated financial statements of the
Company and related financial information are based on the
application of accounting principles generally accepted in the
United States (referred to as GAAP). GAAP
requires the use of estimates, assumptions, judgements and
subjective interpretations of accounting principles that have an
impact on the assets, liabilities, revenue and expense amounts
reported, as well as disclosures about contingencies, risk and
financial condition. The following critical accounting policies
have the potential to have a more significant impact on the
Companys financial statements, either because of the
significance of the financial statement item to which they
relate, or because they require more judgement and estimation
due to the uncertainty involved in measuring, at a specific
point in time, transactions which are continuous in nature.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Company maintain allowances for doubtful
	accounts and notes receivable for estimated losses resulting
	from the potential inability of its customers or the other
	parties to make payments. These allowance are estimated based on
	the current aging of receivables, prior collection experience
	and future expectations of conditions that might impact the
	collectibility. If the financial condition of our customers or
	the other parties were to deteriorate resulting in an impairment
	in their ability to make payments, additions to the allowances
	may be required.
|
| |  | The Companys determination of the treatment
	of contingent liabilities in the financial statements is based
	on a view of the expected outcome of the applicable contingency.
	Legal counsel is consulted on matters related to litigation.
	Experts both within and outside the company are consulted with
	respect to other matters that arise in the ordinary course of
	business. Examples of such matters that are based on                                                                                                                                                       

14



---



##### 



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | assumptions, judgements and estimates are the
	amount to be paid to terminate certain agreements included in
	restructuring charges and the amounts to be paid to settle
	certain other liabilities, A liability is accrued if the
	likelihood of an adverse outcome is probable of occurrence and
	the amount is estimable.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | The Company reviews long-lived assets and
	goodwill for impairment as described in the Notes to
	Consolidated Financial Statements. The Company obtained a
	valuation to assist with the determination of the fair value of
	long-lived assets and goodwill. In analyzing potential
	impairments, projections of future cash flows from the asset are
	used. The projections are based on assumptions, judgements and
	estimates of growth rates for the related business, anticipated
	future economic, regulatory and political conditions, the
	assignment of discount rates relative to risk and estimates of
	terminal values. Changes to these variables in the future may
	necessitate impairment charges to reduce the carrying value to
	fair value.
|
| |  | Fixed assets and intangible assets are assigned
	useful lives which impact the annual depreciation and
	amortization expense. The assignment of useful lives involves
	significant judgements and the use of estimates. Changes in
	technology or changes in intended use of these assets may cause
	the estimated useful life to change.                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | In 2001, restructuring charges were recorded as a
	result of additional actions to reorganize, re-size and reduce
	operating costs and create greater efficiency in various areas.
	These charges, for both severance and exit costs, required the
	use of estimates. Actual results could differ from those
	estimated for restructuring.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | The valuation of the Companys pension plans
	requires the use of assumptions and estimates that are used to
	develop actuarial valuations of expenses, projected benefit
	obligations and funding requirements. These assumptions include,
	among others, discount rates, investment returns and projected
	salary increases. Changes in assumptions and future investment
	returns could potentially have a material impact on the
	Companys pension expense and funding requirements.                                                                                                                                                                                                                                                                    

Results of Operations

The Companys expects its growth in 2002 to
be curtailed by funding constraints. Although the Companys
current business plan includes a reduction in the number of new
customers and an increase in revenue from existing customers,
the Companys cash constraints present many challenges to
the successful execution of the plan. The Company is conserving
cash through a reduction in capital expenditures including
expenditures to connect new customers to the Companys
network. In order to maintain revenues and cash from operations
while reducing the number of new customers, the Company must
reduce and limit customer churn. The Company intends to improve
its customer service and increase its service offering to
customers in an effort to curtail and reduce churn. The Company
is in the process of integrating its various billing systems and
customer databases in an effort to improve one of the main tools
used to provide customer service.

The plan to reduce churn and to increase average
revenue per unit (referred to as ARPU) includes an increase in
broadband services to our existing customers. The Company
believes that its triple play offering of telephony,
broadband access to the Internet and digital television will
prove attractive to its existing customer base, which will
result in higher ARPU as revenues per existing customer
increase. However, there is significant competition in the
broadband markets, through digital satellite and digital
terrestrial television and through alternative Internet access
media, such as DSL offered by BT. If the Company is unable to
charge the prices for these services that are anticipated in its
business plan in response to competition or if the
Companys competition is able to attract the Companys
customers, the Companys ARPU and results of operations
will be adversely affected.

Media speculation regarding the Companys
financial condition and potential outcomes of the
recapitalization process could have an adverse effect on parts
of the Companys business. Similarly, negative press about
the financial condition of alternative telecom carriers in
general may effect the Companys reputation. One of the key
strategies in the Companys business plan is to increase
its penetration of higher value small to

15



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##### 



medium size enterprises (or SMEs) and provide
increased retail services of bundled voice, data and Internet
services for SMEs. However, due to the negative publicity
surrounding the Companys financial condition and the
effect of that publicity on its brand name, the Company may find
it difficult to convince SMEs to become its customers. Even if
the Company successfully completes the recapitalization process,
there is no assurance that the negative publicity will not
adversely impact the Companys results of operations or
have a long-term negative effect on the Companys brand.


In addition, this uncertainty may adversely
affect the Companys relationships with its suppliers. If
suppliers become increasingly concerned about the Companys
financial condition, they may demand faster payments or not
extend normal trade credit, both of which could further
adversely affect the Companys cash conservation measures
and its results of operations.

Years Ended
December 31, 2001 and 2000

As a result of the completion of the acquisition
of the consumer cable telephone, Internet and television
operations of Cable & Wireless Communications plc
(ConsumerCo) on May 30, 2000, the Company
consolidated the results of operations of this business from the
date of acquisition.

Consumer telecommunications and television
revenues increased to $2,069.2 million from
$1,518.2 million as a result of the ConsumerCo acquisition,
price increases, upselling new services to customers and from
growth in the Companys customer base. The 2001 and 2000
revenue includes $956.6 million and $532.2 million,
respectively, from ConsumerCo. Upselling to existing customers,
new digital and cable modem customers and the price increases
implemented in the first and second quarters of 2001 resulted in
ARPU increases that contributed to the revenue increase.
Increase in ARPU in the future is also expected to be achieved
by continuing to provide new services such as digital
television, cable modem and mobile telephone services to
consumer customers.

Business telecommunications revenues increased to
$836.8 million from $702.2 million as a result of
acquisitions and from the growth in the Companys customer
base. The acquisition of the assets and contracts of Viatel UK
in the third quarter of 2001 accounted for $65.3 million of
the revenue in 2001. The 2001 and 2000 revenue includes
$97.4 million and $62.1 million, respectively, from
ConsumerCo. In addition, the Company continues to focus specific
sales and marketing effort on winning business customers in its
franchise areas and increasing revenue from its existing
customers.

Broadcast transmission and other revenues
increased to $283.6 million from $263.8 million. The
increase reflects increases in the number of broadcast
television and FM radio customers and accounts, which exceeded
price cap reductions in the Companys regulated services,
and increases in satellite and media services used by broadcast
and media customers. The Company expects growth in broadcast
services to be driven primarily by contracts related to the
increased demand for tower infrastructure by wireless services
operators expanding and upgrading their networks for wireless
broadband, the digitalization of analog television and radio
signals and the further development of programming for the
European markets requiring satellite and terrestrial
distribution services.

In 2000 and 2001, the substantial majority of
revenues in all segments were derived from operations in the
United Kingdom.

Operating expenses (including network expenses)
increased to $1,564.3 million from $1,223.2 million as
a result of increases in interconnection and programming costs
due to revenue growth. The 2001 and 2000 expense includes
$491.5 million and $281.4 million, respectively, from
ConsumerCo.

Selling, general and administrative expenses
increased to $973.2 million from $969.1 million. The
2001 and 2000 expense includes $293.3 million and $213.1
million, respectively, from ConsumerCo. Selling, general and
administrative expenses as a percentage of revenues decreased to
30.5% in 2001 from 39.0% in 2000. The percentage decrease
reflects various cost savings efforts.

Asset impairments in 2001 of
$8,161.6 million are related to intangible assets and
investments in affiliates. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and

16



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##### 



record valuations in the telecommunications
industry. In 2001, the Company performed a review of the
recoverability of its long-lived assets and associated goodwill.
This review was initiated because of the decline in NTL
Incorporateds stock price and significantly lower
valuations for companies within its industry. Additionally, at
the time of the Companys review, the book value of NTL
Incorporateds net assets significantly exceeded its market
capitalization. Accordingly, the fair value of the
Companys assets was determined by discounting the
Companys estimates of the expected future cash flows
related to these assets when the non-discounted cash flows
indicated that the long-lived assets would not be recoverable.
The Company recorded a write-down of $8,161.6 million in
the fourth quarter of 2001 as a result of this analysis and
review. The total charge included goodwill of
$8,077.8 million, license acquisition costs of
$58.8 million, customer lists of $9.1 million, other
intangibles of $14.9 million and investments in affiliates
of $1.0 million. The aggregate asset impairment charge of
$8,161.6 million related to the Companys business
segments as follows: $6,048.1 million Consumer,
$2,113.0 million Business and $0.5 million Broadcast.


Non-cash compensation of $30.6 million in
2001 was due to modifications to certain stock options approved
by the Compensation and Option Committee of the Board of
Directors in July 2001. The latest possible expiration date of
options to purchase an aggregate of approximately
4.7 million shares of the Companys common stock with
exercise prices from $.17 to $14.76 per share was extended from
July 30, 2001 to October 2004, as applicable, to
January 30, 2006. The Company recognized non-cash
compensation expense based on the excess of the quoted market
price of the Companys common stock on the date of the
modification of $12.05 per share over the exercise price per
share.

Other charges of $297.9 million in 2001
include restructuring charges of $202.8 million and costs
of $95.1 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. Other charges of $92.7 million
in 2000 include restructuring charges of $65.9 million and
costs of $26.8 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. The increase in the information
technology integration and consulting costs was the result of an
acceleration of a number of these projects, and the associated
fees to the consultants and advisors, in order to achieve the
cost savings earlier than projected.

Restructuring charges of $202.8 million and
$65.9 million for the years ended December 31, 2001
and 2000, respectively, relate to the Companys
announcements in the fourth quarter of 2001 and in November 2000
that it was taking additional actions to reorganize, re-size and
reduce operating costs and create greater efficiency in various
areas of the Company. An aggregate of $57.9 million of the 2001
reorganization costs are for the write-off of equipment and
other assets that are not used and will not require any future
cash outlays. The employee severance and related costs in 2000
were for approximately 2,300 employees to be terminated,
approximately 550 of whom are still employed by the Company as
of December 31, 2001. These costs in 2001 are for
approximately 5,200 employees to be terminated, of which
approximately 2,900 employees are still employed by the Company
as of December 31, 2001. The following table summarizes the
restructuring charges incurred and utilized in 2000 and 2001:

|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|-------------------------- |  | ------------- | ----- | ----- |  | ------------- | ---- | ------ |  | ----- | ---- |  |  | - | ----- | - |  | - | ----- | -
|                           |  | Employee      |       |       |  |               |      |        |  |      
|                           |  | Severance     |       | Lease |  |               |      |        |  |      
|                           |  | And Related   |       | Exit  |  | Agreement     |      | Fixed  |  |      
|                           |  | Costs         |       | Costs |  | Modifications |      | Assets |  | Total
|                           |  |               |       |       |  |               |      |        |  |      
|                           |  |              
|                           |  | (In millions)
|Charged to expense         |  | $             | 47.9  |       |  | $             | 18.0 |        |  | $     |     |  |  | $ |      |   |  | $ | 65.9  |  
|Utilized                   |  |               |      |       |  |               |     |        |  |       |     |  |  |   |      |   |  |   |      |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2000 |  |               | 47.9  |       |  |               | 18.0 |        |  |       |     |  |  |   |      |   |  |   | 65.9  |  
|2000 provision utilized    |  |               | (41.3 | )     |  |               | (9.6 | )      |  |       |     |  |  |   |      |   |  |   | (50.9 | )
|2000 provision released    |  |               | (6.6  | )     |  |               | (7.3 | )      |  |       |     |  |  |   |      |   |  |   | (13.9 | )
|Charged to expense         |  |               | 89.7  |       |  |               | 41.4 |        |  |       | 27.7 |  |  |   | 57.9  |   |  |   | 216.7 |  
|2001 provision utilized    |  |               | (26.2 | )     |  |               |     |        |  |       |     |  |  |   | (57.9 | ) |  |   | (84.1 | )
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2001 |  | $             | 63.5  |       |  | $             | 42.5 |        |  | $     | 27.7 |  |  | $ |      |   |  | $ | 133.7 |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  

17



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##### 



Corporate expenses increased to
$24.3 million from $23.7 million primarily due to the
increase in various overhead costs.

Depreciation and amortization expense increased
to $2,540.3 million from $1,700.7 million due to an
increase in amortization on acquisition related intangibles and
an increase in depreciation of telecommunications and cable
television equipment. The 2001 and 2000 expense includes
$1,466.0 million and $802.0 million, respectively,
from ConsumerCo, including amortization of the acquisition
related intangibles.

Interest expense increased to
$1,240.8 million from $886.3 million due to the
issuance of additional debt, and the increase in the accretion
of original issue discount on the deferred coupon notes. The
2001 and 2000 expense includes $273.2 million and
$135.0 million, respectively related to ConsumerCo.
Interest of $844.3 million and $459.0 million was paid
in cash in the years ended December 31, 2001 and 2000,
respectively.

Other losses of $88.5 million in 2001 are
from the sale of the ConsumerCo off-net indirect access
customers.

Foreign currency transaction gains (losses) were
gains of $0.6 million in 2001 and losses of
$58.1 million in 2000 primarily due to the effect of
changes in exchange rates. The Company and certain of its
subsidiaries have cash, cash equivalents and debt denominated in
non-U.S. dollar currencies that are affected by changes in
exchange rates. In addition, foreign subsidiaries of the Company
whose functional currency is not the U.S. dollar hold cash, cash
equivalents and debt denominated in U.S. dollars which are
affected by changes in exchange rates.

Income tax expense in 2001 of $118.1 million
is primarily the result of an increase in the deferred tax
liability attributable to separate company profits of a foreign
subsidiary offset to some extent by a decrease in net deferred
tax liabilities attributable to operating losses of other
foreign subsidiaries. The increase in deferred tax liabilities
includes an adjustment related to 1997 through 2000 of
approximately $116.1 million that is primarily attributable
to additional tax depreciation being claimed during 2001 on
original and amended income tax returns.

Years Ended
December 31, 2000 and 1999

As a result of the completion of the acquisitions
of Diamond Cable Communications Limited (Diamond) in
March 1999, the Australian National Transmission Network
(NTL Australia) in April 1999, Cablelink Limited
(Cablelink) in July 1999, the 1G
Networks of France Telecom in August and December 1999,
NTL Business Limited (formerly Workplace Technologies plc)
(NTL Business) in September 1999, the cable assets
of Cablecom in March 2000 and the consumer cable telephone,
Internet and television operations of ConsumerCo in May 2000,
the Company consolidated the results of operations of these
businesses from the dates of acquisition.

Consumer telecommunications and television
revenues increased to $1,518.2 million from
$827.3 million as a result of acquisitions and from
customer growth that increased the Companys current
revenue stream. The 2000 and 1999 revenue includes
$773.6 million and $162.4 million, respectively, from
acquired companies.

Business telecommunications revenues increased to
$702.2 million from $452.5 million as a result of
acquisitions, customer growth and increases in carrier services
revenues. The 2000 and 1999 revenue includes $234.3 million
and $92.8 million, respectively, from acquired companies.
Carrier services revenues increased due to growth in services
provided by the Companys wholesale operation to other
telephone companies.

Broadcast transmission and other revenues
increased to $263.8 million from $257.3 million due to
increases in broadcast television and FM radio customers and
accounts, which exceeded price cap reductions in the
Companys regulated services, and increases in satellite
and media services used by broadcast and media customers.

Operating expenses (including network expense)
increased to $1,223.2 million from $761.5 million as a
result of increases in interconnection costs and programming
costs due to customer growth. Operating

18



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expenses as a percentage of revenues decreased to
49.2% from 49.5%. The 2000 and 1999 expense includes
$502.5 million and $141.9 million respectively, from
acquired companies.


Selling, general and administrative expenses
increased to $969.1 million from $562.9 million as a
result of increases in telecommunications and cable television
sales and marketing costs and increases in additional personnel
and overhead to service the increasing customer base. The 2000
and 1999 expense includes $377.9 million and
$52.5 million respectively, from acquired companies.

Pursuant to the terms of various United Kingdom
licenses, the Company incurred license fees paid to the
Independent Television Commission (ITC) to operate
as the exclusive service provider in certain of its franchise
areas. Upon a request by the Company in 1999, the ITC converted
all of the Companys fee bearing exclusive licenses to
non-exclusive licenses at the end of 1999, and the
Companys liability for license payments ceased upon the
conversion. Franchise fees were $16.5 million in 1999.

Corporate expenses decreased to
$23.7 million from $25.3 million due to a decrease in
various overhead costs.

Depreciation and amortization expense increased
to $1,700.7 million from $765.7 million due to an
increase in depreciation of telecommunications and cable
television equipment. The 2000 and 1999 expense includes
$1,066.3 million and $190.5 million respectively, from
acquired companies, including amortization of acquisition
related intangibles.

Interest income and other, net decreased to
$25.8 million from $48.2 million as a result of a
decline in cash available for investment.

Interest expense increased to $886.3 million
from $678.1 million due to the issuance of additional debt,
and the increase in the accretion of original issue discount on
the deferred coupon notes. The 2000 and 1999 expense includes
$298.7 million and $133.8 million, respectively, from
acquired companies. Interest of $459.0 million and
$222.1 million was paid in the years ended
December 31, 2000 and 1999, respectively.

Other gains of $493.1 million in 1999 are
from the sale of the Companys investment in Cable London.

Foreign currency transaction (losses) gains
decreased to losses of $58.1 million from gains of
$22.8 million primarily due to the effect of unfavorable
changes in exchange rates. The Companys results of
operations are impacted by changes in foreign currency exchange
rates as follows. The Company and certain of its subsidiaries
have cash, cash equivalents and debt denominated in foreign
currencies that are affected by changes in exchange rates. In
addition, foreign subsidiaries of the Company whose functional
currency is not the U.S. dollar hold cash, cash equivalents and
debt denominated in U.S. dollars which are affected by changes
in exchange rates.

The Company recorded an extraordinary loss from
the early extinguishment of debt of $3.0 million in 1999 as
a result of the repayment of the bridge loan incurred in
connection with the Cablelink acquisition.

Recent Accounting Pronouncements

In August 2001, the Financial Accounting
Standards Board (referred to as the FASB) issued Statement of
Financial Accounting Standards (referred to as SFAS)
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, effective for the Company on
January 1, 2002. This Statement supercedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of and
other related accounting guidance. The adoption of this new
standard had no significant effect on the results of operations,
financial condition or cash flows of the Company.

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations,
effective for the Company on January 1, 2003. This
Statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible fixed
assets and the associated asset retirement costs. The Company is
in the process of evaluating the financial statement impact of
the adoption of SFAS No. 143.

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires that the purchase method of accounting be
used for all

19



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##### 



business combinations initiated after
June 30, 2001. Use of the pooling-of-interests method is no
longer permitted. SFAS No. 141 also includes guidance on
the initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination that is
completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets.
Instead, these assets must be reviewed annually (or more
frequently under certain conditions) for impairment in
accordance with this statement. This impairment test uses a fair
value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. The Company adopted SFAS No. 142 on
January 1, 2002. In light of the significant impairment
charge that the Company recorded in 2001, the Company does not
expect that the adoption of this new standard will have a
significant effect on the results of operations, financial
condition or cash flows of the Company. Amortization expense in
2001 related to goodwill and other indefinite lived intangible
assets was $1,104.1 million. The Company expects that
amortization expense in 2002 will not be significant.


Item
7A.     Quantitative and Qualitative
Disclosures About Market Risk.

Market Risk

The Company is exposed to various market risks,
including changes in foreign currency exchange rates and
interest rates. Market risk is the potential loss arising from
adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. The Company does not enter
into derivative financial instruments for trading or speculative
purposes. The Company has entered into derivative financial
instruments to hedge exposure to movements in the British
pound/U.S. dollar exchange rate. The counterparties are major
financial institutions.

Foreign Exchange Contracts

To the extent that the Company obtains financing
in U.S. dollars and incurs construction and operating costs in
various other currencies, it will encounter currency exchange
rate risks. Furthermore, the Companys revenues are
generated in foreign currencies while its interest and principal
obligations with respect to most of the Companys existing
indebtedness are payable in U.S. dollars.

At December 31, 2001, the Company had cross
currency swaps to hedge exposure to movements in the Euro to
British pound exchange rate.

In September 2001, the Company entered into a
British pound forward foreign exchange agreement, consisting of
twenty-six accumulating forward contracts, to reduce its
exposure to movement in the British pound/ U.S. dollar exchange
rate in accordance with its market risk strategies.

Interest Rates

The fair market value of long-term fixed interest
rate debt and the amount of future interest payments on floating
interest rate debt are subject to interest rate risk. Generally,
the fair market value of fixed interest rate debt will increase
as interest rates fall and decrease as interest rates rise.

The Company has entered into interest rate swaps
to hedge exposure to the floating rate indebtedness incurred
under the NTLCL £200.0 million term facility. The
notional amount of the interest rate swaps was
£100.0 million at December 31, 2001.

20



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##### 



The following table provides information about
the Companys long-term fixed and floating interest rate
debt and derivative financial instruments that are sensitive to
changes in interest rates and foreign currency exchange rates.

NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

|                                                                          |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |          |  
|------------------------------------------------------------------------- | ----------------------------- | ----------- | - | ----------- |  | ----------- |  | ----------- |  | ----------- |  | -------------- | - | ----- |  | -------------- | - |  |  | -------------- | - |  |  | -------------- | - |  | - | -------- |  |  | - | -------- | -
|                                                                          |                               | Year Ending |   | Year Ending |  | Year Ending |  | Year Ending |  | Year Ending |  |                |   |       |  | Fair Value    
|                                                                          |                               | 12/31/02    |   | 12/31/03    |  | 12/31/04    |  | 12/31/05    |  | 12/31/06    |  | Thereafter     |   | Total |  | 12/31/01      
|                                                                          |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |               
|Long-term Debt Including Current
	Portion                                 |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|U.S. Dollar                                                               |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Fixed Rate                    |             |   |            |  |             |  |            |  |             |  | $285.1         |   |       |  | $808.8         |   |  |  | $1,050.0       |   |  |  | $5,962.6       |   |  | $ | 8,106.5  |  |  | $ | 2,510.7  |  
|                                                                          | Average Interest Rate         |             |   |             |  |             |  |             |  |             |  | 13.25          | % |       |  | 12.09          | % |  |  | 11.50          | % |  |  | 9.71           | % |  |   |          |  |  |   |          |  
|U.K. Pound                                                                |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Fixed Rate                    |             |   |            |  |             |  |            |  |             |  |               |   |       |  |               |   |  |  |               |   |  |  | £890.0         |   |  |   | £890.0   |  |  |   | £311.2   |  
|                                                                          | Average Interest Rate         |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  | 10.09          | % |  |   |          |  |  |   |          |  
|                                                                          | Average Forward Exchange Rate |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  | 1.4372         |   |  |   |          |  |  |   |          |  
|Euro                                                                      |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Fixed Rate                    |             |   |            |  |             |  |            |  |             |  |               |   |       |  |               |   |  |  | 250.0         |   |  |  | 860.0         |   |  |   | 1,110.0 |  |  |   | 353.5   |  
|                                                                          | Average Interest Rate         |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  | 9.25           | % |  |  | 11.14          | % |  |   |          |  |  |   |          |  
|                                                                          | Average Forward Exchange Rate |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  | .8948          |   |  |  | .9090          |   |  |   |          |  |  |   |          |  
|U.K. Pound                                                                |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Variable Rate                 |             |   |            |  |             |  |            |  |             |  | £90.0          |   |       |  | £2,494.8       |   |  |  | £100.0         |   |  |  |               |   |  |   | £2,684.8 |  |  |   | £2,684.5 |  
|                                                                          | Average Interest Rate         |             |   |             |  |             |  |             |  |             |  | LIBOR plus 2.0 | % |       |  | LIBOR plus 2.0 | % |  |  | LIBOR plus 5.5 | % |  |  |                |   |  |   |          |  |  |   |          |  
|                                                                          | Average Forward Exchange Rate |             |   |             |  |             |  |             |  |             |  | 1.4131         |   |       |  | 1.4150         |   |  |  | 1.4185         |   |  |  |                |   |  |   |          |  |  |   |          |  
|U.K. Pound                                                                |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Variable Rate                 |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  | £20.0          |   |  |  | £180.0         |   |  |   | £200.0   |  |  |   | £200.0   |  
|                                                                          | Average Interest Rate         |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  | LIBOR plus 3.5 | % |  |  | LIBOR plus 3.5 | % |  |   |          |  |  |   |          |  
|                                                                          | Average Forward Exchange Rate |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  | 1.4185         |   |  |  | 1.4301         |   |  |   |          |  |  |   |          |  
|Interest Rate Derivative Financial Instruments
	Related to Long-Term Debt |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|Receipt of U.K. Pounds                                                    |                               |             |   |             |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |         
|                                                                          | Notional Euro Amount          |             |  | 76.3        |  |             |  |            |  |             |  |               |   |       |  |               |   |  |  |               |   |  |  |               |   |  |   | 76.3    |  |  |   | (4.0    | )
|                                                                          | Average Contract Rate         |             |   | .6457       |  |             |  |             |  |             |  |                |   |       |  |                |   |  |  |                |   |  |  |                |   |  |   |          |  |  |   |          |  

Related Forward Contracts to Sell Foreign
Currencies for US $



| |           
| | ----------
| | U.K. Pound

|                      |  |             |             |            |  |   |      |  
|--------------------- |  | ----------- | ----------- | ---------- |  | - | ---- | -
|                      |  | Year Ending |             | Fair Value
|                      |  | 12/31/02*   |             | 12/31/01  
|                      |  |             |             |           
|Notional amount       |  |             | Up to $47.5 |            |  | $ | (0.3 | )
|Average contract rate |  |             | 1.45        |            |  |   |      |  




*The last contract ends on May 30, 2002.

21



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##### 



Risk Factors

We currently have limited liquidity. If we
are unable to successfully implement a recapitalization, there
is substantial doubt about our ability to continue as a going
concern.

We have limited liquidity. We do not currently
have access to our historic sources of liquidity in the capital
markets and our credit facilities are either fully drawn or we
are currently unable to access remaining undrawn amounts. If we
make scheduled payments of interest and overdue payments of
interest, then we will not have sufficient cash resources to
meet our liquidity needs through the third quarter of 2002. As a
consequence, we need to restructure our outstanding debt and/or
raise new funds. If we cannot restructure our indebtedness or
obtain additional liquidity in a timely manner, we may face the
possibility of insolvency proceedings in the UK, the United
States or elsewhere.

The successful implementation of the
proposed recapitalization plan will require the support of our
creditors.

The completion of the proposed recapitalization
contemplated by the agreement in principle with the unofficial
bondholder committee will require support from NTLs
creditors and holders of NTLs preferred stock, including
France Telecom. Pursuant to the terms of NTLs credit
facilities waivers, the agreement in principle reached with the
unofficial committee is subject to the approval of the lenders
under NTLs credit facilities. The proposed
recapitalization plan will be implemented pursuant to a
Chapter 11 bankruptcy proceeding. Consummation of such a
plan of reorganization will require a favorable vote by impaired
classes of creditors, satisfaction of bankruptcy law
requirements and confirmation by the bankruptcy court, which, as
a court of equity, may exercise substantial discretion and
choose not to confirm any plan of reorganization NTL agreed with
its creditors. Even if such a plan received the necessary
support from many classes of NTLs creditors, there can be
no assurance that it would be completed. If a protracted
reorganization was to occur, or a liquidation would be
necessary, there is a risk that the value of NTL would be eroded
to the detriment of some or all NTL stakeholders.

We cannot be certain that NTLs bank
lenders will consent to the proposed recapitalization plan or
grant NTL any new waivers NTL may need.

Before we could commence negotiations with the
unofficial committee of our bondholders NTL needed to obtain
waivers from the lenders under its credit facilities. These
lenders granted waivers which, until April 30, 2002 in the
case of the UK credit facilities, or May 14, 2002 in the
case of the Cablecom facility, provide that NTLs
commencement of negotiations with bondholders with a view to
rescheduling of its debt will not constitute an event of default
under NTLs credit facilities.

The waivers prohibit NTL from making an exchange
offer with respect to its outstanding notes or from entering
into an agreement with bondholders without the consent of the
lenders under each of the credit facilities. The waivers also
prohibit NTL from commencing voluntary dissolution proceedings,
including proceedings under Chapter 11 of the U.S.
Bankruptcy Code, without the consent of these lenders. If NTL is
unable to obtain the consent of the lenders, it will not be able
to make a voluntary Chapter 11 filing as currently
contemplated in connection with the proposed plan.

The UK Credit Facility waivers, if not extended,
will terminate on April 30, 2002, unless the missed
interest payments on April 1, 2002 are remedied or a
sufficient number of noteholders have agreed to waive or forbear
from exercising any rights in respect of such non-payment, in
which case, the waivers will be extended to May 14, 2002. If the
waivers terminate and NTL continues to negotiate with
bondholders or the non-payment of interest is not cured, there
will be events of default under NTLs credit facilities
that will entitle the lenders to accelerate repayment. NTL does
not have sufficient cash resources to repay it outstanding
indebtedness if its is declared immediately due and payable. In
addition, the lenders could also seek to take control over the
assets over which they hold security in an insolvency proceeding.

22



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##### 



NTL did not pay interest due on some of its
outstanding notes on April 1 and April 15, 2002; NTL
may not cure the existing event of default. NTL may not make
future interest payments on most of its outstanding
notes.

NTL Incorporated and NTL (Delaware), Inc. did not
make scheduled interest payments due April 15, 2002 and NTL
Communications did not make scheduled interest payments and
payments of related fees due April 1 and April 15,
2002.

If NTL fails to pay interest on these notes after
a 30 day grace period expires (on April 30, 2002 in
the case of the missed interest payments due April 1,
2002), events of default for failure to pay interest would occur
under the relevant indentures and, contemporaneously, cross
defaults would occur under other of NTLs indentures at the
Company, NTL Delaware, NTL Incorporated and under NTLs UK
credit facilities and could occur under NTLs Cablecom
facility. This would give holders of the outstanding series of
debt at these entities the right to accelerate repayment of
those debts by declaring the principal amount of the debts to be
immediately due and payable unless NTL obtains waivers or
forbearance agreements from sufficient percentages of its
creditors. If that right to accelerate was exercised, NTL would
not have sufficient cash resources to repay those debts, which
could ultimately lead to bankruptcy proceedings relating to the
entities so affected.

NTL has no current availability under its
existing credit facilities.

NTL has no current ability to borrow under its
existing UK credit facilities, as it has borrowed the full
amounts available.

If we make a voluntary bankruptcy filing in
connection with the proposed plan of recapitalization, it is
likely we will lose our net operating loss carryforwards for
U.S. income tax purposes.

We need to restructure our outstanding debt
during 2002. A restructuring of our debt can be expected to give
to rise to cancellation of indebtedness (COD), which
if it occurs in the course of a proceeding pursuant to
Chapter 11 of the U.S. Bankruptcy Code, would be
non-taxable. If the COD is non-taxable, we will be required to
reduce our net operating loss carryforwards and other attributes
such as tax basis in assets by an amount equal to the
non-recognized COD. As a result, it is likely that as a result
of the successful completion of the proposed plan of
recapitalization, we will have no U.S. net operating loss
carryforwards.

Uncertainty over NTLs financial
condition may harm our business and our brand
name.

Media speculation regarding NTLs financial
condition and potential outcomes of the recapitalization process
could have an adverse effect on parts of our business.
Similarly, negative press about the financial condition of
alternative telecom carriers in general may effect our
reputation. For example, one of our key strategies is to
increase our penetration of higher value small to medium size
enterprises (or SMEs) and provide increased retail services of
bundled voice, data and Internet services for SMEs. However, due
to the negative publicity surrounding NTLs financial
condition and the potential effect of that publicity on our
brand name, we may find it difficult to convince SMEs to take up
our services. Even if NTL successfully completes the
recapitalization process, there is no assurance that it will not
adversely impact our results of operations or have a long-term
effect on our brand.

In addition, this uncertainty may adversely
affect our relationships with our suppliers. If suppliers become
increasingly concerned about NTLs financial condition they
may demand quicker payment terms or not extend normal trade
credit, both of which could further adversely affect our working
capital position. NTL may not be successful in obtaining
alternative suppliers if the need arises and this would
adversely affect our results of operations.

23



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##### 



The recapitalization process has required
significant time and resources of NTLs directors and
senior managers, which could adversely affect the operation of
our business.

NTLs senior managers and directors have
needed to spend significant amounts of their time dealing with
the negotiations with bondholders, bank lenders and other
stakeholders in connection with the recapitalization process and
it is likely that they will continue to devote significant
amounts of their time to this process for the forseeable future.
This has diverted their time and resources from managing the
operations of our business. If NTLs senior managers and
directors continue to spend significant amounts of their time in
connection with the recapitalization process, this may have a
negative impact on our operations.

We have historically incurred losses and
generated negative cash flows and we cannot assure you that we
will be profitable in the future.

Construction and operating expenditures and
interest costs have resulted in negative cash flow. We also
expect to incur substantial additional losses. We cannot be
certain that we will achieve or sustain profitability in the
future. Failure to achieve profitability has and could in the
future diminish our ability to sustain our operations, obtain
additional required funds and make required payments on our
indebtedness.

Our growth has been curtailed by funding
constraints.

We have significantly decreased the amount we are
spending on capital expenditures due to our liquidity
constraints. As a result, we will be unable to increase our
subscriber numbers in the short term and our revenue may be
adversely affected. The decrease in capital expenditure is the
result of our need to divert increasing amounts of our financial
resources to service our debt. The decrease in capital spending
is in line with our current strategy of maximizing revenue from
our existing customers rather than increasing our customer base.
In our residential business in the UK, we expect subscriber
numbers to potentially decrease in 2002. The revenue we expect
to result from our capital expenditure is long-term in nature.
The reduction in capital expenditures for connecting new
subscribers to our network will likely lead to a decrease in the
rate of revenue growth in the future. Difficulties in obtaining
additional funding will likely hamper our ability to connect new
subscribers to our network and increase our revenue.

One of our key strategies is to reduce
customer churn. However there can be no assurance that we will
successfully accomplish this or that our churn rate will not
increase.

We have experienced rapid growth and development
in a relatively short period, either through acquisitions or
connecting customers to our network. One of our biggest
challenges as we have grown has been to limit our customer churn
and the successful implementation of our business plan depends
upon a reduction in the percentage of our customers that stop
using our services. Factors contributing to increase of churn
during 2001 included the continued integration of our ConsumerCo
acquisition, the existence of multiple billing systems, the
introduction of digital television and our decision to
disconnect some of our poor paying customers.

In order to reduce churn in the future, we aim to
improve our customer service. This improvement will be difficult
to obtain without an integrated billing system and a customer
database across the entire NTL network. NTL does not as yet have
an integrated billing and operational platform.

Another part of our strategy leading to reduction
in churn is an increased take up of broadband services by our
existing customers. If this increased level of take up does not
materialize we may have difficulties in reducing churn levels,
thereby adversely impacting our results of operations.

Failure to successfully market broadband to
our existing residential client base will adversely impact our
revenue and results of operations.

A significant component of our strategy to
increase our average revenue per unit is to successfully market
broadband products to our existing residential client base.
Broadband usage by residential customers is in its infancy.
However, we believe that our triple play offering of telephony,
broadband access to the Internet and

24



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##### 



digital television will prove attractive to our
existing customer base and allow us to increase our average
revenue per user. However, we face significant competition in
these markets, through digital satellite and digital terrestrial
television and through alternative Internet access media, such
as DSL offered by BT and some of our competitors have
substantially greater financial and technical resources than we
do. If we are unable to charge prices for broadband services
that are anticipated in our business plan in response to
competition or if our competition delivers a better product to
our customers, our average revenue per unit and our results of
operations will be adversely affected.


We are dependent upon a small number of key
personnel.

A small number of key executive officers manage
our businesses. The loss of one or more of these executive
officers could have a material adverse effect on us. We believe
that our future success will depend in large part on our
continued ability to attract and retain highly skilled and
qualified personnel. We have not entered into written employment
contracts or non-compete agreements with, nor have we obtained
life insurance policies covering those key executive officers.

Our principal businesses are subject to
government regulation, including pricing regulation, and changes
in current regulations may adversely affect us.

Our principal business activities in the UK and
the Republic of Ireland are regulated and supervised by various
governmental bodies. Changes in laws, regulations or
governmental policy or the interpretations of those laws or
regulations affecting our activities and those of our
competitors, such as licensing requirements, changes in price
regulation and deregulation of interconnection arrangements,
could have a material adverse effect on us.

We are also subject to regulatory initiatives of
the European Commission. Changes in EU Directives may reduce our
range of programming and increase the costs of purchasing
television programming or require us to provide access to our
cable network infrastructure to other service providers, which
could have a material adverse effect on us.

The telecommunications industry is subject
to rapid technological changes and we cannot predict the effect
of any changes on our businesses.

The telecommunications industry is subject to
rapid and significant changes in technology and the effect of
technological changes on our businesses cannot be predicted. Our
core offerings may become outdated due to technological
breakthroughs rendering our products out of date. In addition,
our business plan contemplates the introduction of services
using new technologies. Our investments in those new services
may prove premature and we may not realize anticipated returns
on these new products. The cost of implementation for emerging
and future technologies could be significant, and our ability to
fund such implementation may depend on our ability to obtain
additional financing. We cannot be certain that we would be
successful in obtaining any additional financing required.

We do not insure the underground portion of
our cable network.

We obtain insurance of the type and in the
amounts that we believe are customary for similar companies.
Consistent with this practice, we do not insure the underground
portion of our cable network. Substantially all of our cable
network is constructed underground. Any catastrophe that affects
our underground cable network could result in substantial
uninsured losses.

We are subject to currency risk because we
obtain a substantial amount of financing in U.S. dollars and
Euro but generally generate revenues and incur expenses in other
currencies.

We encounter currency exchange rate risks because
we generate revenues and incur construction and operating
expenses in other currencies, primarily in pounds sterling while
we pay interest and principal obligations with respect to most
of our existing indebtedness in U.S. dollars and Euro. We cannot
assure you that the hedging transactions we have entered into or
any other hedging transactions we might enter into will

25



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##### 



be successful or that shifts in the currency
exchange rates will not have a material adverse effect on us.
For example, to the extent that the pound sterling declines in
value against the U.S. dollar and, to a lesser extent, the
Euro, and we have not fully hedged against such declines, the
effective cost of servicing our U.S. dollar and Euro debt will
be higher and we will incur currency losses.


The Company, Diamond and NTL Triangle are
holding companies that are dependent upon cash flow from their
subsidiaries to meet their obligations  their ability to
access that cash flow may be limited in some
circumstances.

The Company, Diamond Cable Communications and
Diamond Holdings and NTL Triangle are holding companies with no
independent operations or significant assets other than
investments in and advances to their respective subsidiaries and
affiliated joint ventures. Each of these companies depends upon
the receipt of sufficient funds from their subsidiaries or their
respective parent companies to meet their respective
obligations. The terms of existing and future indebtedness of
their respective subsidiaries and the laws of the jurisdictions
under which those subsidiaries are organized generally limit the
payment of dividends, loan repayments and other distributions to
them, subject in some cases to exceptions that allow them to
service indebtedness in the absence of specified defaults.

Item
8.Financial Statements and
Supplementary Data.

The following is a summary of the quarterly
results of operations for the years ended December 31, 2001
and 2000.

|                 |  |                    |        |         |  |              |        |             |  |   |        |   |  |   |          |  
|---------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------ | - |  | - | -------- | -
|                 |  |                   
|                 |  | 2001(1)           
|                 |  |                   
|                 |  |                   
|                 |  | Three Months Ended
|                 |  |                   
|                 |  | March 31           |        | June 30 |  | September 30 |        | December 31
|                 |  |                    |        |         |  |              |        |            
|                 |  |                   
|                 |  | (In millions)     
|Revenues         |  | $                  | 770.5  |         |  | $            | 776.9  |             |  | $ | 816.0  |   |  | $ | 826.2    |  
|Operating (loss) |  |                    | (530.9 | )       |  |              | (541.5 | )           |  |   | (494.3 | ) |  |   | (8,835.9 | )
|Net (loss)       |  |                    | (835.8 | )       |  |              | (798.9 | )           |  |   | (809.2 | ) |  |   | (9,393.1 | )

|                 |  |                    |        |         |  |              |        |             |  |   |        |   |  |   |        |  
|---------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------ | - |  | - | ------ | -
|                 |  |                   
|                 |  | 2000(2)           
|                 |  |                   
|                 |  |                   
|                 |  | Three Months Ended
|                 |  |                   
|                 |  | March 31           |        | June 30 |  | September 30 |        | December 31
|                 |  |                    |        |         |  |              |        |            
|Revenues         |  | $                  | 470.9  |         |  | $            | 553.6  |             |  | $ | 717.7  |   |  | $ | 742.0  |  
|Operating (loss) |  |                    | (173.2 | )       |  |              | (269.0 | )           |  |   | (453.4 | ) |  |   | (629.6 | )
|Net (loss)       |  |                    | (336.7 | )       |  |              | (526.1 | )           |  |   | (658.2 | ) |  |   | (867.1 | )



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In the fourth quarter of 2001, the Company
	recorded asset impairments totaling $8,161.6 million
	including goodwill of $8,077.8 million, license acquisition
	costs of $58.8 million, customer lists of
	$9.1 million, other intangibles of $14.9 million and
	investments in affiliates of $1.0 million. In addition, in
	2001 the Company recorded restructuring costs of
	$202.8 million, integration and consulting costs of
	$95.1 million and a loss on the sale of the ConsumerCo
	off-net indirect access customers of $88.5 million.
|   
|(2) | In May 2000, NTL Incorporated purchased
	ConsumerCo for an aggregate purchase price of
	$13,111.0 million, including intangibles of
	$8,879.0 million. ConsumerCo was subsequently acquired by
	the Company from NTL Incorporated. The net assets and results of
	operations of ConsumerCo are included in the consolidated
	financial statements from May 2000, the date of acquisition.                                                                                                                                                     

26



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##### 





|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
	Accountants on accounting and Financial
	Disclosure.

PART III

Items 10, 11, 12 and 13.

Omitted pursuant to General
Instruction I(2)(c) of Form 10-K.

PART IV

Item
14.Exhibits, Financial
Statement Schedules, and Reports on Form 8-K.

|                                                                                                            |  |  |     |  |  |                                                                                       |  | 
|----------------------------------------------------------------------------------------------------------- |  |  | --- |  |  | ------------------------------------------------------------------------------------- |  | 
|(a)                                                                                                         |  |  | (1) |  |  | Financial Statements See list of Financial Statements on page F-1.                  
|                                                                                                            |  |  | (2) |  |  | Financial Statement Schedules see list of Financial Statement Schedules on page F-1.
|                                                                                                            |  |  | (3) |  |  | Exhibits  See Exhibit Index on page 32.                                             
|(b) No reports on Form 8-K were filed
	by the Company during the fourth quarter of 2001.                   
|(c) Exhibits  The response
	to this portion of Item 14 is submitted as a separate
	section of this report.
|(d) Financial Statement
	Schedules  See list of Financial Statement
	Schedules on page F-1.               

27



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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, NTL
	Communications Corp. 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, NTL
	Communications and NTL Merger 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    |  |  | Agreement and Plan of Amalgamation, dated as of
	February 4, 1998, as amended, by and among NTL
	Incorporated, NTL (Bermuda) Limited, and Comcast UK Cable
	Partners Limited (Incorporated by reference to the Registration
	Statement on Form S-4, filed by NTL Incorporated on
	September 30, 1998, File No. 333-64727)                                
|        | 2.4    |  |  | Amendment No. 1 to Agreement and Plan of
	Amalgamation, dated as of May 28, 1998, by and among NTL
	Incorporated, NTL (Bermuda) Limited and Comcast UK Cable
	Partners Limited (Incorporated by reference to Annex B to
	the Registration Statement on Form S-4, filed by NTL
	Incorporated on September 30, 1998, File No. 333-64727)                   
|        | 2.5    |  |  | Share Exchange Agreement, dated as of
	June 16, 1998, as amended, by and among NTL Incorporated
	and the shareholders of Diamond Cable Communications plc
	(Incorporated by reference to Annex A to the Proxy
	Statement, filed by NTL Incorporated on January 29, 1999,
	File No. 000-22616)                                                            
|        | 2.6    |  |  | 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 plc (Incorporated by reference to
	Exhibit 99.1 to Form 8-K, filed by NTL Incorporated on
	December 23, 1998, File No. 000-22616)                                                      
|        | 2.7    |  |  | 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)                                        
|        | 2.8    |  |  | Investment Agreement, dated as of July 26,
	1999, by and between, NTL Incorporated and France Telecom S.A.
	(Incorporated by reference to Annex A the Proxy Statement,
	filed by NTL Incorporated on February 11, 2000, File
	No. 000-25691)                                                                                                             
|        | 2.8(a) |  |  | Amendment No. 1 to the Investment Agreement,
	dated as of August 6, 1999 by and among NTL Incorporated
	and France Telecom S.A.(Incorporated by reference Annex B
	to the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                          
|        | 2.8(b) |  |  | Amendment No. 2 to the Investment Agreement,
	dated as of October 8, 1999 by and among NTL Incorporated
	and France Telecom S.A.(Incorporated by reference to Annex C to
	the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                      
|        | 2.9    |  |  | Purchase Agreement, dated as of February 17,
	2000, by and between France Telecom, S.A. and NTL Incorporated
	(Incorporated by reference to Exhibit 99.3 to the
	Form 8-K, filed by NTL Incorporated on February 22,
	2000, File No. 000-25691)                                                                                                          
|        | 2.10   |  |  | Transaction Agreement dated as of
	December 12, 1999 by and among Cablecom Holding AG and NTL
	Incorporated and certain other parties thereto (Incorporated by
	reference to Exhibit 2.9 to the 1999 Annual Report on
	Form 10-K, filed by NTL Incorporated on March 17,
	2000, File No. 000-25691)                                                      

28



---



##### 



|        |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     | 
|No.     |     | 
|        |     | 
|        | 3.1 |  |  | Restated Certificate of Incorporation of NTL
	Communications Corp. (Incorporated by reference to the
	registration statement on Form S-3, filed by Communications
	Corp. on June 3, 1999, File No. 333-72335)                                                                                                                                                                                             
|        | 3.2 |  |  | By-Laws of NTL Communications Corp. (Incorporated
	by reference to Exhibit 3.4 to Amendment No. 1 to the
	Registration Statement on Form S-3/A, filed by NTL
	Communications Corp. on June 3, 1999, File
	No. 333-72335)                                                                                                                                                                                  
|        | 4.1 |  |  | Form of Indenture, dated as of September 28,
	1994, by and between Diamond Cable Communications plc, and The
	Bank of New York as Trustee, with respect to the 13 1/4%
	Senior Discount Notes due September 30, 2004 (Incorporated
	by reference to Exhibit 4.1 to the Registration Statement
	on Form S-1, filed by Diamond Cable Communications plc on
	September 6, 1994, File No. 33-83740)           
|        | 4.2 |  |  | First Supplemental Indenture, dated as of
	May 31, 1996, by and between Diamond Cable Communications
	plc and The Bank of New York as Trustee (Incorporated by
	reference to Exhibit 4.3 to Post-Effective Amendment
	No. 4 to the Registration Statement on Form S-1, filed
	by Diamond Cable Communications plc on September 12, 1996,
	File No. 33-83740)                                              
|        | 4.3 |  |  | Indenture, dated as of April 20, 1995, by
	and between NTL Communications Corp. and Chemical Bank as
	Trustee, with respect to the 12 3/4% Senior Notes
	(Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by International
	CableTel Incorporated on May 26, 1995, File
	No. 33-92794)                                                                         
|        | 4.4 |  |  | First Supplemental Indenture, dated as of
	January 22, 1996, by and between NTL Communications Corp.
	and Chemical Bank, as Trustee, with respect to the 12 3/4%
	Senior Notes (Incorporated by reference to Exhibit 4.5 to
	the Registration Statement on Form S-4, filed by
	International CabelTel Incorporated on February 5, 1996,
	File No. 333-1010)                                               
|        | 4.5 |  |  | Indenture, dated as of November 11, 1995, by
	and between Comcast UK Cable Partners Limited and Bank of
	Montreal Trust Company as Trustee with respect to the 11.20%
	Senior Discount Debentures due 2007 (Incorporated by reference
	to Exhibit 4.1 to Amendment No. 2 to the Registration
	Statement on Form S-1/A filed by Comcast UK Cable Partners
	Limited on November 5, 1995, File No. 33-96932) 
|        | 4.6 |  |  | First Supplemental Indenture, dated
	October 29, 1998, by and between NTL (Bermuda) Limited (now
	NTL Triangle) LLC) and Bank of Montreal Trust Company as
	Trustee, with respect to the 11.20% Senior Discount Debentures
	due 2007 (Incorporated by reference to Exhibit 4.1 to
	Form 8-K, filed by NTL (Triangle) LLC on November 4,
	1998, File No. 000-24792)                                        
|        | 4.7 |  |  | Indenture, dated as of December 15, 1995, by
	and between Diamond Cable Communications plc, and The Bank of
	New York as Trustee, with respect to the 11 3/4% Senior
	Discount Notes due December 15, 2005 (Incorporated by
	reference to Exhibit 4.1 to Amendment No. 2 to the
	Registration Statement on Form S-1/A, filed by Diamond
	Cable Communications plc on December 6, 1995, File
	No. 33-98374)
|        | 4.8 |  |  | Indenture, dated as of January 30, 1996, by
	and between NTL Communications and Chemical Bank as Trustee,
	with respect to the 11 1/2% Senior Notes due 2006
	(Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by International
	CabelTel Incorporated on February 5, 1996, File
	No. 333-1010)                                                                
|        | 4.9 |  |  | Indenture, date as of February 12, 1997, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 10% Senior Notes
	(Incorporated by reference to Exhibit 4.9 to the 1996
	Annual Report on Form 10-K, filed by NTL Incorporated on
	March 28, 1997, File No. 000-22616)                                                                                   

29



---



##### 



|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ---- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|No.     |      | 
|        |      | 
|        | 4.10 |  |  | Indenture, dated as of February 27, 1997, by
	and between Diamond Cable Communications plc and The Bank of New
	York as Trustee, with respect to the 10 3/4% Senior
	Discount Notes due February 15, 2007 (Incorporated by
	reference to Exhibit 4.1 to the Registration Statement on
	Form S-4, filed by Diamond Cable Communications plc on
	April 15, 1997, File No. 333-25193)                                                                                                           
|        | 4.11 |  |  | Indenture, dated as of February 6, 1998, by
	and among Diamond Holdings plc, Diamond Cable Communications
	plc, and The Bank of New York as Trustee, with respect to the
	10% Senior Notes due February 1, 2008 and 9 1/8%
	Senior Notes due February 1, 2008 (Incorporated by
	reference to Exhibit 4.1 to the Registration Statement on
	Form S-4, filed by Diamond Cable Communications plc on
	March 20, 1998, File No. 333-48413)                                                       
|        | 4.12 |  |  | Indenture, dated as of March 13, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 9 1/2% Senior Notes
	(Incorporated by reference to Exhibit 4.10 to the 1997
	Annual Report on Form 10-K filed by NTL Communications
	(File No. 0-22616) on March 30, 1998)                                                                                                                                                                    
|        | 4.13 |  |  | Indenture, date as of March 13, 1998, by and
	between NTL Communications Corp. and The Chase Manhattan Bank,
	as Trustee, with respect to the 9 3/4% Senior Deferred
	Coupon Notes (Incorporated by reference to Exhibit 4.11 to
	the 1997 Annual Report on Form 10-K, filed by NTL
	Incorporated on March 30, 1998, File No. 000-22616)                                                                                                                                                     
|        | 4.14 |  |  | Indenture, date as of March 13, 1998, by and
	between NTL Communications Corp. and The Chase Manhattan Bank,
	as Trustee, with respect to the 10 3/4% Senior Deferred
	Coupon Notes (Incorporated by reference to Exhibit 4.12 to
	the 1997 Annual Report on Form 10-K, filed by NTL
	Incorporated on March 30, 1998, File No. 000-22616)                                                                                                                                                    
|        | 4.15 |  |  | Indenture, date as of November 2, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 11 1/2% Senior Notes
	due 2008 (Incorporated by reference to Exhibit 4.13 to the
	1998 Annual Report on Form 10-K, filed by NTL Incorporated
	on March 30, 1999, File No. 000-22616)                                                                                                                                                         
|        | 4.16 |  |  | Indenture, date as of November 6, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 12 3/8% Senior
	Deferred Coupon Notes due 2008 (Incorporated by reference to
	Exhibit 4.15 to the 1998 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 1999, File
	No. 000-22616)                                                                                                                                        
|        | 4.17 |  |  | Indenture, date as of December 16, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.17 to the 1998 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 1999, File
	No. 000-22616)                                                                                                                                          
|        | 4.18 |  |  | First Supplemental Indenture, date as of
	March 31, 1999, by and among NTL Incorporated, NTL
	Communications Corp. and The Chase Manhattan Bank, as Trustee,
	with respect to the 7% Convertible Subordinated Notes due 2008
	(Incorporated by reference to Exhibit 4.4 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)                                                       
|        | 4.19 |  |  | Second Supplemental Indenture, dated as of
	March 16, 2000, by and among NTL Incorporated, NTL
	Communications Corp. (formerly NTL Incorporated) and The Chase
	Manhattan Bank as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.3 to Amendment No. 1 to the Registration
	Statement on Form S-3/A, filed by NTL Incorporated, NTL
	(Delaware), Inc. and NTL Communications Corp. on August 30,
	2000, File No. 333-42792)

30



---



##### 



|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|No.     |      | 
|        |      | 
|        | 4.20 |  |  | Third Supplemental Indenture, dated as of
	May 17, 2000, by and among NTL Incorporated, NTL
	Communications Corp. (formerly NTL Incorporated) and The Chase
	Manhattan Bank as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.4 to Amendment No. 1 to the Registration
	Statement on Form S-3/A, filed by NTL Incorporated, NTL
	(Delaware), Inc. and NTL Communications Corp. on August 30,
	2000, File No. 333-42792)                
|        | 4.21 |  |  | Indenture, dated as of April 14, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 9 3/4% Senior Deferred
	Coupon Notes due 2009 (Incorporated by reference to
	Exhibit 4.1 to the Registration Statement on Form S-4,
	filed by NTL Communications Corp. on May 13, 1999, File
	No. 333-78405)                                                                                                                                                
|        | 4.22 |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 9 1/4% Senior Notes
	due 2006 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on January 24, 2000, File
	No. 333-95267)                                                                                                                                                         
|        | 4.23 |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communication Corp. and The Chase Manhattan Bank
	as Trustee, with respect to the 9 7/8% Senior Notes Due
	2009 (Incorporated by reference to Exhibit 4.2 to the
	Registration Statement on Form S-4, filed by NTL
	Communication Corp. on January 24, 2000, File
	No. 333-95267)                                                                                                                                                           
|        | 4.24 |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 11 1/2% Senior
	Deferred Coupon Notes due 2009 (Incorporated by reference to
	Exhibit 4.3 to the Registration Statement on Form S-4,
	filed by NTL Communications Corp. on January 24, 2000, File
	No. 333-95267)                                                                                                                                        
|        | 4.25 |  |  | Indenture, dated as of October 2, 2000, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 11 7/8% Senior Notes
	due 2010 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on October 26, 2000, File
	No. 333-48648)                                                                                                                                                          
|        | 4.26 |  |  | Indenture, dated as of January 24, 2001, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 12 3/8% Senior Notes
	due 2008 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on February 9, 2001, File
	No. 333-55288)                                                                                                                                                         
|        | 4.27 |  |  | Indenture, dated as of May 15, 2001, by and
	between NTL Communications Corp., NTL Incorporated and The Chase
	Manhattan Bank, as Trustee, with respect to the 6 3/4%
	Convertible Senior Notes due 2008 (Incorporated by reference to
	Exhibit 4.7 to Amendment No. 1 to the Registration
	Statement on Form S-4/A, filed by NTL Communications Corp.
	on June 8, 2001, File No. 333-55288)                                                                                                              
|        | 4.28 |  |  | Registration Rights Agreement dated as of
	May 15, 2001 by and among NTL Communications Corp., NTL
	Incorporated, Morgan Stanley & Co. Incorporated, J.P.
	Morgan Securities Inc., Credit Suisse First Boston Corporation
	and Salomon Smith Barney Inc. with respect to the 6 3/4%
	Convertible Senior Notes due 2008 (Incorporated by reference to
	Exhibit 4.8 to Amendment No. 1 to the Registration
	Statement on Form S-4/A, filed by NTL Communications Corp.
	on June 8, 2001, File No. 333-55288)
|        | 10.1 |  |  | Compensation Plan and Agreements, as amended and
	restated effective June 3, 1997 (Incorporated by reference
	to Exhibit 10.1 to the 1997 Annual Report on
	Form 10-K, filed by NTL Communications on March 30,
	1998, File No. 0-22616)                                                                                                                                                                                                                                                                  
|        | 10.2 |  |  | Rules of the NTL Sharesave Plan, adopted by NTL
	Incorporated on October 28, 1997 (Incorporated by reference
	to Exhibit 10.2 to the 1998 Annual Report on
	Form 10-K, filed by NTL Communications, on March 30,
	1999, File No. 0-22616)                                                                                                                                                                                                                                                                 

31



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##### 



|        |         |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ------- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         | 
|No.     |         | 
|        |         | 
|        | 10.3    |  |  | Form of Director and Officer Indemnity Agreement
	(together with a schedule of executed Indemnity Agreements)
	(Incorporated by reference to Exhibit 10.3 to the 1999
	Annual Report on Form 10-K, filed by NTL Incorporated on
	March 17, 2000, File No. 000-25691)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 10.4    |  |  | 1998 Non-Qualified Stock Option Plan, as Amended
	and Restated October 1998 (Incorporated by reference to
	Exhibit 10.4 to the 1998 Annual Report on Form 10-K,
	filed by NTL Communications on March 30, 1999, File
	No. 0-22616)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10.5    |  |  | Credit Agreement relating to the acquisition of
	Cable & Wireless Communications (Holdings) PLC, dated as of
	May 30, 2000, by and among NTL Communications Limited, NTL
	Business Limited, NTL Communications Corp., Chase Manhattan PLC
	and Morgan Stanley Dean Witter Limited, Chase Manhattan
	International Limited (Incorporated by reference to
	Exhibit 10.8 to the 2000 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 2001, File
	No. 001-16183)                                                                                                                                                                                                                                                                                                               
|        | 10.6    |  |  | Restatement Amendment Agreement dated as of
	September 26, 2001 by and among NTL Communications Limited,
	NTL Investment Holdings Limited, NTL Communications Corp., J.P.
	Morgan plc and Morgan Stanley Dean Witter Bank Limited, Chase
	Manhattan International Limited and others, agreeing to amend
	the Credit Agreement, dated as of May 30, 2000, between NTL
	Communications Corp., NTL (UK) Group, Inc., NTL
	Communications Limited, Morgan Stanley Dean Witter Bank Limited
	and Chase Manhattan PLC (Incorporated by reference to
	Exhibit 10.16 to the 2001 Annual Report on Form 10-K,
	filed by NTL Incorporated on April 16, 2001, File
	No. 0-30673)                                                                                                                          
|        | 10.6(a) |  |  | Amended and Restated Credit Agreement dated as of
	September 26, 2001, restating the Credit Agreement dated as
	of 30 May 2000, as amended or waived pursuant to a letter
	dated as of 6 June 2000, amendment agreements dated as of
	8 June 2000, 30 June 2000 and 4 September 2000, a
	novation agreement dated as of 21 February 2001 and letters
	of consent dated as of 22 December 2000 and 29 January
	2001 by and among NTL Communications Limited, NTL Investment
	Holdings Limited, NTL Communications Corp., J.P. Morgan plc
	and Morgan Stanley Dean Witter Bank Limited, Chase Manhattan
	International Limited and others (Incorporated by reference to
	Exhibit 10.6(a) to the 2001 Annual Report on
	Form 10-K, filed by NTL Incorporated on April 16,
	2001, File No. 0-30673)
|        | 10.7    |  |  | Investment Agreement, dated July 26, 1999,
	as amended, by and between the Company and France telecom S.A
	(Incorporated by reference to Annex A to the proxy
	statement filed by NTL Incorporated on February 11, 2000,
	File No. 000-25691)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 10.7(a) |  |  | Amendment, dated as of September 12, 2001,
	to the Investment Agreement, dated July 26, 1999, as
	amended, by and between the Company and France Telecom S.A.
	(Incorporated by reference to Exhibit 10.1 to the Quarterly
	Report on Form 10-Q, filed by NTL Incorporated on
	November 14, 2001, File No. 001-16183)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.8    |  |  | Framework Agreement For The Provision Of IT
	Outsourcing Services, dated as of May 23, 2001, by and
	between NTL Group Limited and IBM United Kingdom 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10.9    |  |  | Amendment, dated as of April 5, 2001 to the
	Framework Agreement For The Provision of IT Outsourcing
	Services, dated as of May 23, 2001, by and between NTL
	Group Limited and IBM United Kingdom 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)                                                                                                                                                                                                                                                                                                                                                                                                                               

32



---



##### 



|        |       |  |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       | 
|No.     |       | 
|        |       | 
|        | 10.10 |  |  | Consent Letter, dated as of March 8, 2002,
	in respect of the Senior Credit Facility by and among NTL
	Communications Limited, NTL Investment Holdings Limited, NTL
	Communications Corp. and J.P. Morgan Europe Limited, on behalf
	of the banks (Incorporated by reference to Exhibit 10.11 to
	the 2001 Annual Report on Form 10-K, filed by NTL
	Incorporated on April 16, 2001, File No. 0-30673)
|        | 10.11 |  |  | Consent Letter, dated as of March 8, 2002,
	in respect of the Working Capital Facility by and among NTL
	Communications Corp., NTL Communications Limited, NTL
	(UK) Group Inc. and J.P. Morgan Europe Limited, on behalf
	of the banks (Incorporated by reference to Exhibit 10.12 to
	the 2001 Annual Report on Form 10-K, filed by NTL
	Incorporated on April 16, 2001, File No. 0-30673)          
|        | 10.12 |  |  | Consent Letter, dated as of March 28, 2002,
	in respect of the Senior Credit Facility by and among NTL
	Communications Limited, NTL Investment Holdings, NTL
	Communications Corporation and J.P. Morgan Europe Limited, on
	behalf of the banks (Incorporated by reference to
	Exhibit 10.14 to the 2001 Annual Report on Form 10-K,
	filed by NTL Incorporated on April 16, 2001, File
	No. 0-30673)
|        | 10.13 |  |  | Consent Letter, dated March 28, 2002, in
	respect of the Working Capital Facility by and among NTL
	Communications Corp., NTL Communications Limited, NTL
	(UK) Group Inc. (Incorporated by reference to
	Exhibit 10.15 to the 2001 Annual Report on Form 10-K,
	filed by NTL Incorporated on April 16, 2001, File
	No. 0-30673)                                                                      
|        | 23    |  |  | Consent of Ernst & Young LLP*                                                                                                                                                                                                                                                                                                                                                                         



---



|  |               
|- | --------------
|* | Filed herewith

33



---



##### 



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 17, 2002



| |                         
| | ------------------------
| | NTL COMMUNICATIONS CORP.



| |     |                  
| | --- | -----------------
| | By: | /s/ BARCLAY KNAPP

| |                                       
| | --------------------------------------
| |                                       
| | Barclay Knapp                         
| | President and Chief Executive
	Officer
| | (Principal Executive Officer)         

34



---



##### 



Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant in the capacities
and on the date indicated.

|                                                 |  |                                                                      |  |               
|------------------------------------------------ |  | -------------------------------------------------------------------- |  | --------------
|Signature                                        |  | Title                                                                |  | Date          
|                                                 |  |                                                                      |  |               
|                                                
|/s/ BARCLAY KNAPPBarclay Knapp                   |  | President and Chief Executive Officer (Principal
	Executive Officer) |  | April 17, 2002
|                                                
|/s/ GEORGE S. BLUMENTHALGeorge S. Blumenthal     |  | Chairman of the Board and Treasurer                                  |  | April 17, 2002
|                                                
|/s/ JOHN F. GREGGJohn F. Gregg                   |  | Chief Financial Officer
	(Chief Financial Officer)                   |  | April 17, 2002
|                                                
|/s/ GREGG N. GORELICKGregg N. Gorelick           |  | Vice President-Controller
	(Principal Accounting Officer)            |  | April 17, 2002
|                                                
|/s/ SIDNEY R. KNAFELSidney R. Knafel             |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ TED H. MCCOURTNEYTed H. McCourtney           |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ ALAN J. PATRICOFAlan J. Patricof             |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ WARREN POTASHWarren Potash                   |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ MICHAEL S. WILLNERMichael S. Willner         |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ ROBERT T. GOADRobert T. Goad                 |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ JEAN-LOUIS VINCIGUERRAJean-Louis Vinciguerra |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ ERIC BOUVIEREric Bouvier                     |  | Director                                                             |  | April 17, 2002
|                                                
|/s/ BERNARD IZERABLEBernard Izerable             |  | Director                                                             |  | April 17, 2002

35



---



##### 



FORM 10-K  ITEM 14(a)(1)
AND (2)

NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

AND FINANCIAL STATEMENT SCHEDULES


The following consolidated financial statements
of NTL Communications Corp. and Subsidiaries are included in
Item 8:

|                                                                                                             |  |  |     | 
|------------------------------------------------------------------------------------------------------------ |  |  | --- | 
|Report of Independent Auditors                                                                               |  |  | F-2 | 
|Consolidated Balance Sheets 
	December 31, 2001 and 2000                                                    |  |  | F-3 | 
|Consolidated Statements of
	Operations 
	Years ended December 31, 2001, 2000 and 1999                       |  |  | F-4 | 
|Consolidated Statement of Shareholders
	(Deficiency) Equity 
	Years ended December 31, 2001, 2000 and 1999 |  |  | F-5 | 
|Consolidated Statements of Cash
	Flows 
	Years ended December 31, 2001, 2000 and 1999                       |  |  | F-6 | 
|Notes to Consolidated Financial Statements                                                                   |  |  | F-8 | 

The following consolidated financial statement
schedules of NTL Communications Corp. and Subsidiaries are
included in Item 14(d):

|                                                            |  |  |      | 
|----------------------------------------------------------- |  |  | ---- | 
|Schedule I  Condensed Financial
	Information of Registrant |  |  | F-36 | 
|Schedule II  Valuation and
	Qualifying Accounts            |  |  | F-42 | 

All other schedules for which provision is made
in the applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and, therefore have been
omitted.

F-1



---



##### 



REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholder

NTL Communications Corp.


We have audited the consolidated balance sheets
of NTL Communications Corp. and Subsidiaries as of
December 31, 2001 and 2000, and the related consolidated
statements of operations, shareholders (deficiency) equity
and cash flows for each of the three years in the period ended
December 31, 2001. Our audits also included the financial
statement schedules listed in the Index at Item 14(d).
These financial statements and schedules are the responsibility
of the Companys management. Our responsibility is to
express an opinion on these financial statements and schedules
based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the 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 consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of NTL
Communications Corp. and Subsidiaries at December 31, 2001
and 2000, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles
generally accepted in the United States. 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.

The accompanying financial statements have been
prepared assuming that NTL Communications Corp. will continue as
a going concern. As more fully described in Note 1, the Company
has incurred recurring operating losses and negative operating
cash flows, has a working capital deficiency and a deficiency in
shareholders equity. The Company is a wholly-owned,
indirect subsidiary of NTL Incorporated, and has relied on
subsidiaries of NTL Incorporated for funding. NTL
Incorporateds substantial leverage, its current debt and
equity trading levels and its non-compliance with certain debt
covenants in 2002 have eliminated its access to its historic
sources of capital. NTL Incorporated has initiated a
recapitalization process, the success of which is dependent upon
adequate liquidity to complete the process as well as agreement
of NTL Incorporateds creditors and preferred stockholders.
These conditions raise substantial doubt about NTL
Incorporateds and the Companys ability to continue
as going concerns. Managements plans in regard to these
matters are also described in Note 1. The financial
statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

New York, New York

April 16, 2002


F-2



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                 |                                                                                                               |                       |          |           |   |   |          |          |  
|-------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | --------------------- | -------- | --------- | - | - | -------- | -------- | -
|                                                                                 |                                                                                                               |                      
|                                                                                 |                                                                                                               | December 31,         
|                                                                                 |                                                                                                               |                      
|                                                                                 |                                                                                                               | 2001                  |          | 2000     
|                                                                                 |                                                                                                               |                       |          |          
|                                                                                 |                                                                                                               |                      
|                                                                                 |                                                                                                               | (Dollars in millions)
|ASSETS                                                                           |                                                                                                               |                       |          |           |   |   |          |         
|Current assets:                                                                  |                                                                                                               |                       |          |           |   |   |          |         
|                                                                                 | Cash and cash equivalents                                                                                     |                       | $        | 251.1     |   |   | $        | 423.5    |  
|                                                                                 | Accounts receivable  trade, less
	allowance for doubtful accounts of $126.1 (2001) and
	$135.2 (2000)        |                       |          | 479.0     |   |   |          | 527.4    |  
|                                                                                 | Due from affiliates                                                                                           |                       |          | 6.9       |   |   |          | 105.1    |  
|                                                                                 | Other                                                                                                         |                       |          | 271.8     |   |   |          | 275.0    |  
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|Total current assets                                                             |                                                                                                               |                       | 1,008.8  |           |   |   | 1,331.0  |         
|Fixed assets, net                                                                |                                                                                                               |                       | 10,840.3 |           |   |   | 10,916.8 |         
|Intangible assets, net                                                           |                                                                                                               |                       | 767.3    |           |   |   | 10,566.1 |         
|Investments in and loans to affiliates, net                                      |                                                                                                               |                       | 4.6      |           |   |   | 11.6     |         
|Other assets, net of accumulated amortization of
	$125.0 (2001) and $81.9 (2000) |                                                                                                               |                       | 255.1    |           |   |   | 316.1    |         
|Loan to NTL Incorporated                                                         |                                                                                                               |                       | 150.0    |           |   |   |         |         
|Deferred income taxes                                                            |                                                                                                               |                       |         |           |   |   | 4.9      |         
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|Total assets                                                                     |                                                                                                               | $                     | 13,026.1 |           |   | $ | 23,146.5 |         
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|LIABILITIES AND SHAREHOLDERS
	(DEFICIENCY) EQUITY                               |                                                                                                               |                       |          |           |   |   |          |         
|Current liabilities:                                                             |                                                                                                               |                       |          |           |   |   |          |         
|                                                                                 | Accounts payable                                                                                              |                       | $        | 378.3     |   |   | $        | 451.1    |  
|                                                                                 | Accrued expenses and other                                                                                    |                       |          | 836.2     |   |   |          | 1,105.6  |  
|                                                                                 | Accrued construction costs                                                                                    |                       |          | 119.8     |   |   |          | 172.9    |  
|                                                                                 | Due to affiliates                                                                                             |                       |          |          |   |   |          | 117.9    |  
|                                                                                 | Interest payable                                                                                              |                       |          | 252.0     |   |   |          | 127.6    |  
|                                                                                 | Deferred revenue                                                                                              |                       |          | 290.2     |   |   |          | 291.5    |  
|                                                                                 | Current portion of long-term debt                                                                             |                       |          | 14,205.9  |   |   |          | 10.7     |  
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|Total current liabilities                                                        |                                                                                                               |                       | 16,082.4 |           |   |   | 2,277.3  |         
|Long-term debt                                                                   |                                                                                                               |                       |         |           |   |   | 11,843.4 |         
|Other                                                                            |                                                                                                               |                       | 8.9      |           |   |   | 13.6     |         
|Deferred income taxes                                                            |                                                                                                               |                       | 113.8    |           |   |   |         |         
|Commitments and contingent liabilities                                           |                                                                                                               |                       |          |           |   |   |          |         
|Shareholders (deficiency) equity:                                               |                                                                                                               |                       |          |           |   |   |          |         
|                                                                                 | Common stock  $.01 par value;
	authorized 100 shares; issued and outstanding 12 (2001) and
	12 (2000) shares |                       |          |          |   |   |          |         |  
|                                                                                 | Additional paid-in capital                                                                                    |                       |          | 13,917.7  |   |   |          | 13,746.7 |  
|                                                                                 | Accumulated other comprehensive (loss)                                                                        |                       |          | (904.5    | ) |   |          | (379.3   | )
|                                                                                 | (Deficit)                                                                                                     |                       |          | (16,192.2 | ) |   |          | (4,355.2 | )
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|                                                                                 |                                                                                                               |                       | (3,179.0 | )         |   |   | 9,012.2  |         
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         
|Total liabilities and shareholders
	(deficiency) equity                         |                                                                                                               | $                     | 13,026.1 |           |   | $ | 23,146.5 |         
|                                                                                 |                                                                                                               |                       |          |           |   |   |          |         

See accompanying notes.

F-3



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|------------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | -------- | - |  | - | ------- | -
|                                                  |  |                        
|                                                  |  | Year Ended December 31,
|                                                  |  |                        
|                                                  |  | 2001                    |           | 2000 |  | 1999
|                                                  |  |                         |           |      |  |     
|                                                  |  |                        
|                                                  |  | (In millions)          
|Revenues                                          |  |                         |           |      |  |      |          |   |  |   |         |  
|Consumer telecommunications and television        |  | $                       | 2,069.2   |      |  | $    | 1,518.2  |   |  | $ | 827.3   |  
|Business telecommunications                       |  |                         | 836.8     |      |  |      | 702.2    |   |  |   | 452.5   |  
|Broadcast transmission and other                  |  |                         | 283.6     |      |  |      | 263.8    |   |  |   | 257.3   |  
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|                                                  |  |                         | 3,189.6   |      |  |      | 2,484.2  |   |  |   | 1,537.1 |  
|Costs and expenses                                |  |                         |           |      |  |      |          |   |  |   |         |  
|Operating expenses                                |  |                         | 1,564.3   |      |  |      | 1,223.2  |   |  |   | 761.5   |  
|Selling, general and administrative expenses      |  |                         | 973.2     |      |  |      | 969.1    |   |  |   | 562.9   |  
|Asset impairments                                 |  |                         | 8,161.6   |      |  |      |         |   |  |   |        |  
|Franchise fees                                    |  |                         |          |      |  |      |         |   |  |   | 16.5    |  
|Non-cash compensation                             |  |                         | 30.6      |      |  |      |         |   |  |   |        |  
|Other charges                                     |  |                         | 297.9     |      |  |      | 92.7     |   |  |   | 16.2    |  
|Corporate expenses                                |  |                         | 24.3      |      |  |      | 23.7     |   |  |   | 25.3    |  
|Depreciation and amortization                     |  |                         | 2,540.3   |      |  |      | 1,700.7  |   |  |   | 765.7   |  
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|                                                  |  |                         | 13,592.2  |      |  |      | 4,009.4  |   |  |   | 2,148.1 |  
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|Operating (loss)                                  |  |                         | (10,402.6 | )    |  |      | (1,525.2 | ) |  |   | (611.0  | )
|Other income (expense)                            |  |                         |           |      |  |      |          |   |  |   |         |  
|Interest income and other, net                    |  |                         | 34.7      |      |  |      | 25.8     |   |  |   | 48.2    |  
|Interest expense                                  |  |                         | (1,240.8  | )    |  |      | (886.3   | ) |  |   | (678.1  | )
|Share of (losses) from equity investments         |  |                         | (22.3     | )    |  |      | (24.2    | ) |  |   | (18.4   | )
|Other (losses) gains                              |  |                         | (88.5     | )    |  |      |         |   |  |   | 493.1   |  
|Foreign currency transaction gains (losses)       |  |                         | 0.6       |      |  |      | (58.1    | ) |  |   | 22.8    |  
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|(Loss) before income taxes and extraordinary item |  |                         | (11,718.9 | )    |  |      | (2,468.0 | ) |  |   | (743.4  | )
|Income tax (expense) benefit                      |  |                         | (118.1    | )    |  |      | 79.9     |   |  |   | 29.9    |  
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|(Loss) before extraordinary item                  |  |                         | (11,837.0 | )    |  |      | (2,388.1 | ) |  |   | (713.5  | )
|Loss from early extinguishment of debt            |  |                         |          |      |  |      |         |   |  |   | (3.0    | )
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  
|Net (loss)                                        |  | $                       | (11,837.0 | )    |  | $    | (2,388.1 | ) |  | $ | (716.5  | )
|                                                  |  |                         |           |      |  |      |          |   |  |   |         |  

See accompanying notes.

F-4



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS
(DEFICIENCY) EQUITY

|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |   | 
|------------------------------------------------------- | ----- | --------------------- | -------- | -------------- |  | ---------- | - | ------------- |  | -------- | ----------- | ------------- |  | ----------------- | ---- | ----------- |  | --------- | -------- | - |  | - | --------- | --------- | - | - | ------ | - |  | - | ---- | - |  | - | --------- | - | 
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |            
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  | Accumulated Other |      |            
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  | Comprehensive     |      |            
|                                                        |       |                       |          |                |  |            |   |               |  |          |             | Income (Loss) |  |                  
|                                                        |       | Series Preferred      |          |                |  |            |   |               |  |          |             |              
|                                                        |       | Stock                 |          | Common Stock   |  |            |   |               |  |          |             | Unrealized    |  |                  
|                                                        |       | $.01 Par Value        |          | $.01 Par Value |  | Additional |   |               |  | Foreign  |             | Net           |  |                  
|                                                        |       |                       |          |                |  | Paid-In    |   | Comprehensive |  | Currency |             | Losses on     |  |                  
|                                                        |       | Shares                |          | Par            |  | Shares     |   | Par           |  | Capital  |             | Loss          |  | Translation       |      | Derivatives |  | (Deficit)
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |          
|                                                        |       |                       |          |               
|                                                        |       | (Dollars in millions) |          |               
|Balance, December 31, 1998                              |       |                       | 177,000  |                |  | $          |  |               |  |          | 60,249,000  |               |  | $                 | 0.6  |             |  | $         | 1,501.6  |   |  |   |           |           |   | $ | 104.7  |   |  |   |      |   |  | $ | (1,251.7  | )
|Exercise of stock options                               |       |                       |          |                |  |            |   |               |  |          | 432,000     |               |  |                   |     |             |  |           | 12.1     |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Exercise of warrants                                    |       |                       |          |                |  |            |   |               |  |          | 15,000      |               |  |                   |     |             |  |           |         |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Preferred stock issued for cash                         |       |                       | 500,000  |                |  |            |  |               |  |          |             |               |  |                   |      |             |  |           | 483.8    |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Warrants issued for cash                                |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 16.2     |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Accreted dividends on preferred stock                   |       |                       | 4,000    |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | (8.6     | ) |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Accretion of discount on preferred stock                |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |         |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Conversion of 7% Convertible Subordinated Notes         |       |                       |          |                |  |            |   |               |  |          | 1,000       |               |  |                   |     |             |  |           |         |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Common stock issued for an acquisition                  |       |                       |          |                |  |            |   |               |  |          | 12,705,000  |               |  |                   | 0.1  |             |  |           | 971.3    |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Stock options issued in connection with an
	acquisition |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 6.6      |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Corporate restructuring                                 |       |                       | (681,000 | )              |  |            |  |               |  |          | (73,401,900 | )             |  |                   | (0.7 | )           |  |           | 405.6    |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Distribution to NTL Incorporated                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | (500.0   | ) |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Contributions from NTL Incorporated                     |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 173.2    |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Distribution of subsidiary to NTL Incorporated          |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | (30.5    | ) |  |   |           |           |   |   |        |   |  |   |      |   |  |   | 1.1       |  
|Corporate restructuring                                 |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Comprehensive loss:                                     |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Net loss for the year ended December 31, 1999           |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  | $ | (716.5    | )         |   |   |        |   |  |   |      |   |  |   | (716.5    | )
|Currency translation adjustment                         |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | (102.9    | )         |   |   | (102.9 | ) |  |   |      |   |  |   |           |  
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|                                                        | Total |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | $         | (819.4    | ) |   |        |   |  |   |      |   |  |   |           |   | 
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Balance, December 31, 1999                              |       |                       |         |                |  |            |  |               |  |          | 100         |               |  |                   |     |             |  |           | 3,031.3  |   |  |   |           |           |   |   | 1.8    |   |  |   |      |   |  |   | (1,967.1  | )
|Contributions from NTL (Delaware),
	Inc.                |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 10,715.4 |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Corporate restructuring                                 |       |                       |          |                |  |            |   |               |  |          | (88         | )             |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Comprehensive loss:                                     |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Net loss for the year ended December 31, 2000           |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  | $ | (2,388.1  | )         |   |   |        |   |  |   |      |   |  |   | (2,388.1  | )
|Currency translation adjustment                         |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | (381.1    | )         |   |   | (381.1 | ) |  |   |      |   |  |   |           |  
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|                                                        | Total |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | $         | (2,769.2  | ) |   |        |   |  |   |      |   |  |   |           |   | 
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Balance, December 31, 2000                              |       |                       |         |                |  |            |  |               |  |          | 12          |               |  |                   |     |             |  |           | 13,746.7 |   |  |   |           |           |   |   | (379.3 | ) |  |   |      |   |  |   | (4,355.2  | )
|Contribution from NTL (Delaware), Inc., net             |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 140.4    |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Non-cash compensation                                   |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           | 30.6     |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Comprehensive loss:                                     |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Net loss for the year ended December 31, 2001           |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  | $ | (11,837.0 | )         |   |   |        |   |  |   |      |   |  |   | (11,837.0 | )
|Currency translation adjustment                         |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | (521.6    | )         |   |   | (521.6 | ) |  |   |      |   |  |   |           |  
|Unrealized net losses on derivatives                    |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | (3.6      | )         |   |   |        |   |  | $ | (3.6 | ) |  |   |           |  
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|                                                        | Total |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   | $         | (12,362.2 | ) |   |        |   |  |   |      |   |  |   |           |   | 
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  
|Balance, December 31, 2001                              |       |                       |         |                |  | $          |  |               |  |          | 12          |               |  | $                 |     |             |  | $         | 13,917.7 |   |  |   |           |           |   | $ | (900.9 | ) |  | $ | (3.6 | ) |  | $ | (16,192.2 | )
|                                                        |       |                       |          |                |  |            |   |               |  |          |             |               |  |                   |      |             |  |           |          |   |  |   |           |           |   |   |        |   |  |   |      |   |  |   |           |  

See accompanying notes.

F-5



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                         |                                                 |                            |           |         |       |      |          |         |        |   |          |        |        |  
|-------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | -------------------------- | --------- | ------- | ----- | ---- | -------- | ------- | ------ | - | -------- | ------ | ------ | -
|                                                                                                         |                                                 |                           
|                                                                                                         |                                                 | Year Ended December 31,   
|                                                                                                         |                                                 |                           
|                                                                                                         |                                                 | 2001                       |           | 2000    |       | 1999
|                                                                                                         |                                                 |                            |           |         |       |     
|                                                                                                         |                                                 |                           
|                                                                                                         |                                                 | (In millions)             
|Operating activities                                                                                     |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|Net loss                                                                                                 |                                                 | $                          | (11,837.0 | )       |       | $    | (2,388.1 | )       |        | $ | (716.5   | )     
|Adjustment to reconcile net loss to net cash
	(used in) provided by operating activities:                |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|                                                                                                         | Depreciation and amortization                   |                            |           | 2,540.3 |       |      |          | 1,700.7 |        |   |          | 765.7  |       
|                                                                                                         | Non-cash compensation                           |                            |           | 30.6    |       |      |          |        |        |   |          |       |       
|                                                                                                         | Non-cash restructuring charge                   |                            |           | 57.9    |       |      |          |        |        |   |          |       |       
|                                                                                                         | Asset impairment                                |                            |           | 8,161.6 |       |      |          |        |        |   |          |       |       
|                                                                                                         | Equity in losses of unconsolidated subsidiaries |                            |           | 22.3    |       |      |          |        |        |   |          |       |       
|                                                                                                         | Loss from early extinguishment of debt          |                            |           |        |       |      |          |        |        |   |          | 3.0    |       
|                                                                                                         | (Gain) loss on sale of assets                   |                            |           | 88.5    |       |      |          |        |        |   |          | (493.1 | )     
|                                                                                                         | Provision for losses on accounts receivable     |                            |           | 58.3    |       |      |          | 98.5    |        |   |          | 45.7   |       
|                                                                                                         | Deferred income taxes                           |                            |           | 116.4   |       |      |          | (80.8   | )      |   |          | (30.9  | )     
|                                                                                                         | Amortization of original issue discount         |                            |           | 284.7   |       |      |          | 473.1   |        |   |          | 451.4  |       
|                                                                                                         | Other                                           |                            |           | (16.8   | )     |      |          | (75.1   | )      |   |          | (8.0   | )     
|Changes in operating assets and liabilities, net
	of effect from business acquisitions and dispositions: |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|                                                                                                         |                                                 | Accounts receivable        |           |         | (31.3 | )    |          |         | (247.9 | ) |          |        | (134.6 | )
|                                                                                                         |                                                 | Other current assets       |           |         | 23.4  |      |          |         | (41.8  | ) |          |        | (34.6  | )
|                                                                                                         |                                                 | Other assets               |           |         | 56.1  |      |          |         | 42.4   |   |          |        | (25.2  | )
|                                                                                                         |                                                 | Accounts payable           |           |         | (38.8 | )    |          |         | (102.2 | ) |          |        | 32.0   |  
|                                                                                                         |                                                 | Accrued expenses and other |           |         | (81.9 | )    |          |         | 330.3  |   |          |        | 150.4  |  
|                                                                                                         |                                                 | Deferred revenue           |           |         | 7.0   |      |          |         | 120.6  |   |          |        | 68.4   |  
|                                                                                                         |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|Net cash (used in) provided by operating
	activities                                                     |                                                 |                            | (558.7    | )       |       |      | (170.3   | )       |        |   | 73.7     |       
|Investing activities                                                                                     |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|Acquisitions, net of cash acquired                                                                       |                                                 |                            | (26.2     | )       |       |      | (7,514.9 | )       |        |   | (637.6   | )     
|Purchase of fixed assets                                                                                 |                                                 |                            | (1,653.0  | )       |       |      | (1,961.8 | )       |        |   | (1,198.3 | )     
|Investments in and loans to affiliates                                                                   |                                                 |                            | (11.9     | )       |       |      |         |         |        |   |         |       
|Increase in other assets                                                                                 |                                                 |                            | (31.6     | )       |       |      | (33.7    | )       |        |   | (30.1    | )     
|Loan to NTL Incorporated                                                                                 |                                                 |                            | (150.0    | )       |       |      |         |         |        |   |         |       
|Proceeds from sales of assets                                                                            |                                                 |                            | 14.6      |         |       |      |         |         |        |   | 692.5    |       
|Purchase of marketable securities                                                                        |                                                 |                            | (9.9      | )       |       |      | (3.3     | )       |        |   | (354.5   | )     
|Proceeds from sales of marketable securities                                                             |                                                 |                            | 10.0      |         |       |      | 8.3      |         |        |   | 618.6    |       
|                                                                                                         |                                                 |                            |           |         |       |      |          |         |        |   |          |       
|Net cash (used in) investing activities                                                                  |                                                 |                            | (1,858.0  | )       |       |      | (9,505.4 | )       |        |   | (909.4   | )     

F-6



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)

|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|----------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | -------- | - |  | - | ------- | -
|                                                                              |  |                        
|                                                                              |  | Year Ended December 31,
|                                                                              |  |                        
|                                                                              |  | 2001                    |         | 2000 |  | 1999
|                                                                              |  |                         |         |      |  |     
|                                                                              |  |                        
|                                                                              |  | (In millions)          
|Financing activities                                                          |  |                         |         |      |  |      |          |   |  |   |         |  
|Distribution to NTL (Delaware), Inc.                                          |  |                         | (10.6   | )    |  |      |         |   |  |   | (500.0  | )
|Contribution from NTL (Delaware), Inc.                                        |  |                         | 40.8    |      |  |      | 5,227.2  |   |  |   | 167.6   |  
|Proceeds from borrowings, net of financing costs                              |  |                         | 2,643.4 |      |  |      | 5,009.8  |   |  |   | 1,846.0 |  
|Proceeds from issuance of preferred stock and
	warrants                       |  |                         |        |      |  |      |         |   |  |   | 500.0   |  
|Principal payments                                                            |  |                         | (421.5  | )    |  |      | (1,263.9 | ) |  |   | (758.2  | )
|Cash released from (placed in) escrow for debt
	repayment                     |  |                         |        |      |  |      | 77.5     |   |  |   | (87.0   | )
|Proceeds from exercise of stock options and
	warrants                         |  |                         |        |      |  |      |         |   |  |   | 12.1    |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Net cash provided by financing activities                                     |  |                         | 2,252.1 |      |  |      | 9,050.6  |   |  |   | 1,180.5 |  
|Effect of exchange rate changes on cash                                       |  |                         | (7.8    | )    |  |      | (25.6    | ) |  |   | (6.9    | )
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|(Decrease) increase in cash and cash equivalents                              |  |                         | (172.4  | )    |  |      | (650.7   | ) |  |   | 337.9   |  
|Cash and cash equivalents at beginning of year                                |  |                         | 423.5   |      |  |      | 1,074.2  |   |  |   | 736.3   |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Cash and cash equivalents at end of year                                      |  | $                       | 251.1   |      |  | $    | 423.5    |   |  | $ | 1,074.2 |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Supplemental disclosure of cash flow
	information                             |  |                         |         |      |  |      |          |   |  |   |         |  
|Cash paid during the year for interest exclusive
	of amounts capitalized      |  | $                       | 776.6   |      |  | $    | 363.9    |   |  | $ | 180.3   |  
|Income taxes paid                                                             |  |                         | 0.1     |      |  |      | 1.5      |   |  |   | 2.4     |  
|Supplemental schedule of non-cash financing
	activities                       |  |                         |         |      |  |      |          |   |  |   |         |  
|Contribution from NTL (Delaware), Inc.                                        |  | $                       | 110.2   |      |  | $    | 5,488.2  |   |  | $ | 5.6     |  
|Accretion of dividends and discount on preferred
	stock                       |  |                         |        |      |  |      |         |   |  |   | 8.6     |  
|Conversion of Convertible Notes, net of
	unamortized deferred financing costs |  |                         | 109.5   |      |  |      |         |   |  |   | 269.3   |  
|Common stock and stock options issued for
	acquisitions                       |  |                         |        |      |  |      |         |   |  |   | 978.0   |  

See accompanying notes.

F-7



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1.     Corporate
Restructuring and Business

Corporate Restructuring

On May 18, 2000, NTL Incorporated completed
a second corporate restructuring to create a holding company
structure in connection with the acquisition of certain assets
of Cable & Wireless Communications plc (CWC)
(the operations acquired from CWC are called
ConsumerCo). The holding company restructuring was
accomplished through a merger so that all the stockholders of
NTL Incorporated at the effective time of the merger became
stockholders of the new holding company, and NTL Incorporated
became a subsidiary of the new holding company. The new holding
company has taken the name NTL Incorporated and the holding
companys subsidiary simultaneously changed its name to NTL
(Delaware), Inc. (NTL Delaware). The Company is a
wholly-owned subsidiary of NTL Delaware.

On February 21, 2001, the Company completed
a transaction whereby it acquired the entire issued share
capital of NTL (CWC Holdings) Limited (the entity that owns
ConsumerCo) from NTL Incorporated and the entire issued share
capital of NTL Business Limited (formerly Workplace Technologies
plc) from NTL (Delaware), Inc. in exchange for shares of its
common stock. As a result of this transaction, ConsumerCo and
NTL Business Limited became wholly-owned subsidiaries of the
Company. The Company accounted for the transaction in a manner
consistent with a transfer of entities under common control,
which is similar to a pooling of interests.
Accordingly, the net assets and results of operations of
ConsumerCo and NTL Business Limited have been included in the
consolidated financial statements from their respective dates of
acquisition.

Business

The Company, through its subsidiaries, owns and
operates broadband communications networks for telephone, cable
television and Internet services in the United Kingdom and
Ireland, and transmission networks for television and radio
broadcasting in the United Kingdom. Based on revenues and
identifiable assets, the Companys predominant lines of
business are consumer services, business services and broadcast
transmission and related services in the United Kingdom.
Consumer services include telephony, cable television, Internet
access and interactive services. Business services include
telephony, national and international wholesale carrier
telecommunications, and radio communications services for the
emergency services community. Broadcast transmission and related
services include digital and analog television and radio
broadcasting, rental of antenna space on the Companys
owned and leased towers and sites and associated services, and
satellite and media services.

Liquidity and Recapitalization
Process

Recapitalization
Process and Ability to Continue Operations

The Company required significant amounts of
capital to finance construction of its networks, connection of
customers to the networks, other capital expenditures and for
working capital needs including debt service requirements. The
Company historically met these liquidity requirements through
issuances of high-yield debt securities in the capital markets
and equity contributions from NTL Incorporated. Both the equity
and debt capital markets have recently experienced periods of
significant volatility, particularly for securities issued by
telecommunications and technology companies. The ability of
telecommunications companies to access those markets as well as
their ability to obtain financing provided by bank lenders and
equipment suppliers has become more restricted and financing
costs have increased. During some recent periods, the capital
markets have been largely unavailable to new issues of
securities by telecommunications companies. NTL
Incorporateds public equity is no longer trading on the
New York Stock Exchange, and NTLs public debt securities
are trading at or near all time lows. These factors, together
with the Companys substantial leverage, mean the Company
does not currently have access to its historic sources of
capital.

F-8



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In addition, NTLs UK credit facilities are
fully drawn and NTLs Swiss subsidiaries are currently
unable to draw the remaining undrawn amounts under the Cablecom
credit facility. The Company did not pay cash interest on
certain series of its notes that was due on April 1, 2002
and April 15, 2002. NTL Incorporated and NTL (Delaware),
Inc., a wholly-owned subsidiary of NTL Incorporated, also did
not pay cash interest and related fees on a series of their
notes that was due on April 15, 2002. As of
December 31, 2001, NTL had approximately $505 million in
cash and cash equivalents on hand and, on April 4, 2002,
received approximately $303 million net cash proceeds from
the sale of its Australian business. NTL and the Company will
require cash for working capital and capital expenditures in
2002. If NTL makes scheduled and overdue interest payments on
its notes, then NTL will not have sufficient cash resources to
meet its liquidity needs through the third quarter of 2002.

The Company does not generate sufficient cash
flow from operations to fund its operational expenses and
interest payments. The Company has historically met its cash
requirements through equity from NTL Incorporated and issuances
of high yield debt securities. Given NTL Incorporateds
liquidity situation, it is likely that it will not be able to
provide the Company with cash at least for the short-term.

These liquidity concerns raise substantial doubt
about the Companys ability to continue as a going concern.
As a consequence, the Company, NTL Incorporated and certain of
its subsidiaries need to restructure their outstanding debt
and/or raise new funds through the issuance of equity or
additional debt.

On January 31, 2002, NTL Incorporated
announced that it had appointed Credit Suisse First Boston,
JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen NTLs balance
sheet and reduce debt and put an appropriate capital structure
in place for its business. Since then, NTL has been evaluating
various recapitalization alternatives to effect a comprehensive
consensual reorganization in a timely manner to minimize
negative effects on its business operations.

On April 16, 2002, NTL announced that NTL
and an unofficial committee of its public bondholders had
reached an agreement in principle on a comprehensive
recapitalization of NTL. The members of the committee hold in
the aggregate over 50% of the face value of NTL and its
subsidiaries public bonds. The recapitalization would
result in a conversion of approximately $10.6 billion in
debt into equity.

To implement the proposed recapitalization, NTL
Incorporated, NTL (Delaware), Inc., the Company Diamond Cable
Communications Limited and Diamond Holdings Limited would file a
pre-negotiated recapitalization plan in a Chapter 11 case
under the U.S. Bankruptcy Code. NTLs operating
subsidiaries would not be included in the Chapter 11
filing. The agreement in principle is subject to various
conditions, including mutually acceptable terms with NTLs
bank lenders. The recapitalization transaction contemplates that
the bank debt will remain in place as part of the
recapitalization.

To facilitate the recapitalization, certain
members of the unofficial committee of bondholders would commit
to provide up to $500 million of new debt financing to
NTLs UK and Ireland operations during the Chapter 11
process and for the post-recapitalized NTL. The new financing
will ensure that NTLs business operations have access to
sufficient liquidity to continue ordinary operations.

Under the agreement in principle, NTL would be
split into two companies, one tentatively called NTL UK and
Ireland and holding all of its UK and Ireland assets, and one
tentatively called NTL Euroco and holding certain of its
continental European and other assets.

Holders of notes of NTL Incorporated, NTL
(Delaware), Inc., the Company and Diamond Cable Communications
Limited would in the aggregate receive 100% of the initial
common stock of NTL UK and Ireland and approximately 86.5%
of the initial common stock of NTL Euroco. NTL (Delaware), Inc.
bondholders would have the option to reinvest all or a portion
of NTL (Delaware), Inc. cash in additional shares of NTL UK and
Ireland common stock, or to receive such cash in the
recapitalization. Notes of Diamond Holdings Limited and NTL
Triangle would remain outstanding and will be kept current in
interest

F-9



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

payments. Current preferred and common
stockholders, including France Telecom, would participate in a
package of rights (to be priced at a $10.5 billion
enterprise value) and warrants entitling them to purchase
primary common stock of NTL UK and Ireland at the
consummation of the proposed plan, in the case of the rights,
and for the duration of the eight-year warrants at prescribed
prices. If fully exercised, those rights and warrants would
entitle the current preferred stockholders to acquire
approximately 23.6% and the current common stockholders to
acquire approximately 8.9% of the entitys primary common
stock.

Current preferred stockholders other than France
Telecom would receive approximately 3.2% and current common
stockholders, other than France Telecom, would receive
approximately 10.3% of the primary equity of NTL Euroco. It is
contemplated that subject to consummation of the
recapitalization France Telecom would also receive NTLs
27% interest in Noos, pursuant to a pledge of such interests to
France Telecom given at the time of its acquisition by NTL.

During the recapitalization process, NTL has
maintained normal and regular trade terms with its suppliers and
customers. There can be no assurance that NTLs suppliers
will continue to provide normal trade credit or credit on
acceptable terms, if at all, or that customers will continue to
do business or enter into new business with NTL.

Bank
Waivers

Before NTL could commence negotiations with the
unofficial committee of bondholders, it was necessary to obtain
waivers from the lenders under its credit facilities. Effective
March 8, 2002, these lenders granted waivers which, until
March 29, 2002, provided that the commencement of
negotiations with bondholders with a view to rescheduling its
debt would not constitute an event of default under the credit
facilities.

But for the initial waivers, the commencement of
negotiations with bondholders would have been an event of
default under the credit facilities. If an event of default were
to occur, it would entitle the lenders under the credit
facilities to declare the principal amount of the outstanding
debt immediately due and payable. If this right was exercised,
it would result in an event of default under all of NTLs
outstanding notes, except for those issued by Diamond Cable
Communications, Diamond Holdings and NTL Triangle, entitling the
trustee or 25% of the holders of a series to accelerate the
repayment of that series of notes. NTL does not have sufficient
cash resources to repay its outstanding indebtedness if it is
declared immediately due and payable.

In connection with the granting of the initial
waivers, NTL agreed:



| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to provide the lenders with a 13 week
	rolling cash flow projection (updated every two weeks);                                                                                 
|
| |  | to keep the lenders informed of, and to provide
	documents in connection with, negotiations with bondholders or
	strategic investors or concerning proposed asset dispositions;
|
| |  | not to repurchase NTL notes; and                                                                                                                                               
|
| |  | not to make an exchange offer for NTL notes or
	enter into an agreement with NTL bondholders, subject to some
	exceptions, without the consent of the lenders.                 

Effective March 28, 2002, the lenders under
the credit facilities agreed to amend the initial waivers. The
amendments to the initial waivers extend the duration of the
initial waivers to April 30, 2002 in the case of the UK
credit facilities or May 14 in the case of the Cablecom
facility, unless the missed interest payments on April 1,
2002 are remedied or a sufficient number of bondholders agree to
forbear in respect of such non-payment, in which case, the UK
credit facilities waivers will be extended to May 14, 2002.
As a condition to the waivers continuing effectiveness,
the UK lenders required NTL Delaware to loan
£90 million to NTL (UK) Group, Inc. following
receipt of the proceeds from the sale of NTL Australia. This
loan is structurally

F-10



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

senior to the outstanding public notes issued by
the Company but contractually subordinated to the UK credit
facilities. In connection with the amendments to the waivers,
NTL affirmed the provisions of the initial waivers and in
addition, NTL agreed, among other things, to:



| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | provide the bank lenders a timeline setting forth
	the steps proposed to be taken in connection with the
	recapitalization and the dates by which such steps are to be
	taken;                                                                             
|
| |  | use reasonable endeavors to consider with the
	lenders under the Cablecom credit facility possible means of
	credit enhancement;                                                                                                                           
|
| |  | provide the lenders under the Cablecom credit
	facility, by April 12, 2002, with an updated structure
	chart of NTL as well as a contingency business plan for Cablecom
	in the event that sufficient additional funding for Cablecom is
	not obtained; and
|
| |  | pay legal, accounting and other advisory fees of
	the agent or coordinators of the Cablecom credit facility.                                                                                                                                               

The amended waivers prevent NTL from making an
exchange offer with respect to its outstanding notes or from
entering into an agreement with bondholders without the consent
of the lenders under each of the credit facilities. The amended
waivers also prohibit NTL from commencing voluntary dissolution
proceedings, including proceedings under Chapter 11 of the
U.S. Bankruptcy Code, without the consent of these lenders.

As a consequence, NTL cannot enter into a binding
agreement with the unofficial bondholder committee or implement
the proposed plan without the consent of its bank lenders.

Cablecom GmbH is the principal trading company of
NTLs Swiss group. There are a number of technical defaults
under the Swiss credit facility made available to Cablecom and
various of its subsidiaries. In addition, as of
December 31, 2001, Cablecoms and various of its
subsidiaries liabilities exceeded their respective assets.
As a consequence, under Swiss law, those entities were deemed to
be overindebted. This also constituted an event of
default under the Cablecom credit facility which entitles the
lenders to accelerate repayment. Such an acceleration would
result in an event of default under NTL Incorporateds and
NTL Delawares 5.75% convertible subordinated notes due
2011 and 5.75% convertible subordinated notes due 2009,
entitling the trustee or the holders of 25% of each series of
notes to accelerate repayment. Under Swiss law, unless the over
indebtedness is rectified, those entities would be required to
commence an insolvency proceeding in Switzerland. A plan has
been formulated to rectify this overindebtedness. Implementation
of this plan prior to April 30, 2002 will mean those
entities will not be required to commence an insolvency
proceeding. Those proceedings would likely either be a court
supervised moratorium in which an independent administrator, or
commissioner, would be appointed to supervise the running of
each company during a restructuring or, if there is no viable
restructuring plan, a bankruptcy. The commencement of those
insolvency proceedings would also constitute an immediate event
of default and acceleration of the maturity of the convertible
subordinated notes referred to above.

NTL is currently in discussions with the lenders
under the Swiss credit facility regarding proposals to resolve
the over indebtedness issue as well as requesting that they
waive various additional covenant breaches under the credit
facility. There can be no assurance that NTL will reach
agreement on the resolution of the over indebtedness issue
within the time period required or obtain the requested waivers.

Interest
Payments on Public Notes

NTL has substantial interest payment obligations
under its existing indebtedness. The Company did not make
scheduled interest payments due April 1, 2002, in the
aggregate amount of $74.3 million, in respect of its
9 1/2% notes due 2008, 11 1/2% notes due 2008 and
11 7/8% notes due 2010. In addition, the Company did not
make interest payments falling due on April 15, 2002,
totaling $20.2 million, in respect of the 12 3/4%
Senior Deferred Coupon Notes due 2005 and NTL Incorporated and
NTL Delaware did not make interest payments

F-11



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

and payment of related fees falling due on
April 15, 2002 in respect of their 5 3/4% Convertible
Subordinated Notes due 2011. Those payments were not made after
consideration by NTL of requests by the unofficial bondholder
committee not to make those payments. Interest payments of
$18.9 million were made, when due, on April 2, 2002 in
respect of Diamond Cable Communications 13.25% senior discount
notes due 2004. On May 15, 2002, interest totaling
$94.0 million is due on outstanding notes of the Company
and NTL Triangle.

If the applicable issuer does not pay interest on
these notes after a 30 day grace period expires (on
April 30, 2002 in the case of the missed interest payments
due April 1, 2002), there is an event of default under the
indenture in respect of the notes on which the interest is due
and unpaid. An event of default entitles the trustee under the
indenture or the holders of 25% of the outstanding notes to
declare the principal amount of those notes to be immediately
due and payable. Even if the maturity of those notes is not
accelerated after April 30, 2002, such an event of default
would also result in an event of default in respect of other
debt (commonly called cross defaults) under all of NTLs
other notes, except for those issued by NTL Triangle, Diamond
Cable Communications or Diamond Holdings. As a result, upon the
expiration of the grace period, on April 30, 2002, events
of default for failure to pay interest would occur under the
relevant indentures at the Company and, contemporaneously, cross
defaults would occur under NTLs other indentures at the
Company, NTL Delaware, NTL Incorporated and under NTLs UK
credit facilities and could occur under NTLs Cablecom
facility. This would give holders of the outstanding series of
debt at these entities the right to accelerate repayment of
those debts by declaring the principal amount of the debts to be
immediately due and payable unless NTL obtains waivers or
forbearance agreements from sufficient percentages of its
creditors. If that right to accelerate was exercised, NTL would
not have sufficient cash resources to repay those debts, which
could ultimately lead to voluntary or involuntary bankruptcy
proceedings relating to the entities so affected. In addition,
the lenders under NTLs UK credit facilities have security
over the assets of NTLs UK operating subsidiaries, except
for the Diamond and NTL Triangle groups of companies. In the
event that there was an event of default under those facilities,
the lenders could seek to take control of those assets under
applicable UK insolvency law.

Credit Rating
Downgrades

On April 3, 2002, credit rating agency
Standard & Poors lowered the long-term corporate
credit rating on some of NTLs public debt to D, citing
NTLs failure to make a bond interest payment due on
April 1, 2002.

Sale of NTL
Australia

On April 2, 2002, NTL announced that it had
completed the previously announced sale of its Australian
broadcast business to Macquarie Bank for A$850 million
(US$448 million) in an all cash transaction. The net
proceeds from the sale were approximately A$574 million
(US$303 million). At that time, the business bank
debt outstanding totaled A$227 million
(US$119 million).

On April 7, 2002, NTL Delaware loaned
£90 million to NTL (UK) Group Limited, which loan
was funded by the proceeds of the sale of NTL Australia. This
loan is subordinated to NTLs UK credit facilities. The
remaining proceeds of the sale of NTL Australia remain at NTL
Delaware and it is currently anticipated that such proceeds will
form a portion of the consideration to be offered to bondholders
of NTL Delaware and NTL Incorporated in satisfaction of their
claims against NTL Delaware as part of the proposed plan of
reorganization.

Uncertainty
Related to Suppliers

The uncertainty over the Companys financial
condition may adversely affect its relationships with its
suppliers. If the Companys suppliers become increasingly
concerned about its financial condition they may demand quicker
payment terms or not extend normal trade credit, both of which
could further adversely affect its results of operations,
financial condition and cash flows.

F-12



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Basis of Presentation

As indicated above, substantial doubt exists
about the Companys ability to continue as a going concern.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. The financial statements do not include any adjustments
to reflect the possible future effects on the recoverability of
assets or classification of assets or the amounts and
classification of liabilities that may result from the outcome
of this uncertainty.

Due to uncertainties about compliance with the
terms and conditions of the Companys debt that would give
the holders of the debt the right to accelerate repayment, all
of the Companys long-term debt has been classified as
current.

2.     Significant
Accounting Policies

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, the amount to be paid for other liabilities, the
Companys pension expense and pension funding requirements
and estimates related to the value of investments, long-lived
assets and goodwill. Actual results could differ from those
estimates.

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%.
Significant intercompany accounts and transactions have been
eliminated in consolidation.

Reclassification

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

Foreign Currency Translation

The financial statements of the Companys
foreign subsidiaries have been translated into U.S. dollars in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 52, Foreign Currency
Translation. All balance sheet accounts have been
translated using the current exchange rates at the respective
balance sheet dates. Statement of operations amounts have been
translated using the average exchange rates for the respective
years. The translation gains or losses resulting from the change
in exchange rates have been reported as a component of
accumulated other comprehensive income (loss). Foreign currency
transaction gains and losses are included in the results of
operations as incurred.

To the extent that the Company obtains financing
in U.S. dollars and incurs construction and operating costs in
various other currencies, it will encounter currency exchange
rate risks. In addition, the Companys revenues are
generated in foreign currencies while its interest and principal
obligations with respect to approximately half of the
Companys exiting indebtedness are payable in U.S. dollars.

Cash Equivalents

Cash equivalents are short-term highly liquid
investments purchased with a maturity of three months or less.
Cash equivalents were $218.7 million and
$211.3 million at December 31, 2001 and 2000,
respectively, which consisted primarily of U.S. Treasury bills
(2000 only) bank time deposits and corporate commercial

F-13



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##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

paper. At December 31, 2001 and 2000,
$188.7 million and $57.2 million, respectively, of the cash
equivalents were denominated in foreign currencies.

Marketable Securities

Marketable securities were classified as
available-for-sale, which are carried at fair value. Unrealized
holding gains and losses on securities, net of tax, are carried
as a component of accumulated other comprehensive (loss). The
amortized cost of debt securities is adjusted for amortization
of premiums and accretion of discounts to maturity. Such
amortization is included in interest income. Realized gains and
losses and declines in value judged to be other than temporary
will be included in interest income. The cost of securities sold
or matured is based on the specific identification method.
Interest on securities is included in interest income.

During the years ended December 31, 2001,
2000 and 1999, there were no realized gains or losses on sales
of securities.

Fixed Assets

Fixed assets are stated at cost, which includes
amounts capitalized for labor and overhead expended in
connection with the design and installation of operating
equipment. Depreciation is computed by the straight-line method
over the estimated useful lives of the assets. Estimated useful
lives are as follows: operating equipment  5 to
40 years and other equipment  3 to 40 years.

Intangible Assets

Intangible assets include goodwill, license
acquisition costs, customer lists and other intangibles.
Goodwill is the excess of the purchase price over the fair value
of net assets acquired in business combinations accounted for as
purchases. Goodwill is amortized on a straight-line basis over
the periods benefited of 3, 10, 15 or 30 years. License
acquisition costs represent the portion of purchase price
allocated to the cable television and telecommunications
licenses acquired in business combinations. License acquisition
costs are amortized on a straight-line basis over the remaining
lives of the licenses at acquisition, which vary from
approximately two years to 23 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 3 or 5 years. Other intangibles
include the portion of the purchase price allocated to the value
of workforce in place. Workforce in place is amortized over the
period benefited of four years. The Company continually reviews
the recoverability of the carrying value of these assets using
the same methodology that it uses for the evaluation of its
other long-lived assets.

Valuation of Long-Lived Assets

Long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the
expected future undiscounted cash flows is less than the
carrying amount of the asset, a loss is recognized for the
difference between the fair value and the carrying value of the
asset.

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. The difference
between the Companys recorded investment and its
proportionate interest

F-14



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

in the book value of the investees net
assets are 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 are incurred in
connection with the issuance of debt and are amortized over the
term of the related debt.

Capitalized Interest

Interest is capitalized as a component of the
cost of fixed assets constructed. In 2001, 2000 and 1999, total
interest incurred was $1,308.5 million, $981.4 million
and $719.9 million, respectively, of which interest of
$67.7 million, $95.1 million and $41.8 million,
respectively, was capitalized.

Revenue Recognition

Revenues are recognized at the time the service
is rendered to the customer or the performance of the service
has been completed. Charges for services that are billed in
advance are deferred and recognized when earned. Rental revenues
are recognized when earned on a monthly basis. Installation and
maintenance service revenues are recognized when the performance
of the service has been completed.

Cable Television System Costs, Expenses and
Revenues

The Company accounts for costs, expenses and
revenues applicable to the construction and operation of its
broadband communications networks in accordance with SFAS
No. 51, Financial Reporting by Cable Television
Companies.

Advertising Expense

The Company charges the cost of advertising to
expense as incurred. Advertising costs were $77.9 million,
$94.0 million and $35.8 million in 2001, 2000 and
1999, respectively.

Stock-Based Compensation

The Company has adopted the disclosure-only
provisions of SFAS No. 123, Accounting for
Stock-Based Compensation. The Company applied APB Opinion
No. 25, Accounting for Stock Issued to
Employees and related interpretations in accounting for
its stock option plans.

Derivative Financial Instruments

The Company uses financial instruments to hedge a
portion, but not all, of its exposure from floating interest
rate debt and from movements in foreign exchange rates. Gains
and losses on these instruments are deferred and recognized in
the statement of operations when the related hedged transactions
are recognized. To date, premiums paid for these contracts have
not been material. The Company does not use derivative financial
instruments for trading or speculative purposes.

The Company sometimes uses British pound forward
foreign exchange contracts to reduce its exposure to foreign
currency risk. A forward foreign exchange contract obligates the
Company to exchange predetermined amounts of specified foreign
currencies at specified exchange rates on specified dates or to
make an equivalent U.S. dollar payment equal to the value of
such exchange. These contracts do not qualify for hedge
accounting under SFAS No. 133 (as amended). Any changes in
fair value are recorded in results of operations.

F-15



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

3.     Recent
Accounting Pronouncements

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, effective for the Company on
January 1, 2002. This Statement supercedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of and
other related accounting guidance. The adoption of this new
standard had no significant effect on the results of operations,
financial condition or cash flows of the Company.

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations,
effective for the Company on January 1, 2003. This
Statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible fixed
assets and the associated asset retirement costs. The Company is
in the process of evaluating the financial statement impact of
the adoption of SFAS No. 143.

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the
initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination that is
completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets.
Instead, these assets must be reviewed annually (or more
frequently under certain conditions) for impairment in
accordance with this statement. This impairment test uses a fair
value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. The Company adopted SFAS No. 142 on
January 1, 2002. In light of the significant impairment
charge that the Company recorded in 2001, the Company does not
expect that the adoption of this new standard will have a
significant effect on the result of operations, financial
condition or cash flows of the Company. Amortization expense in
2001 related to goodwill and other indefinite lived intangible
assets was $1,104.1 million. The Company expects that
amortization expense in 2002 will not be significant.

4.     Asset
Impairments

As of December 31, 2001, the Company
performed an analysis of the carrying values of its long-lived
assets including goodwill. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and
record valuations in the telecommunications industry. This
analysis was initiated because of the decline in NTL
Incorporateds stock price and significantly lower
valuations for companies within its industry. Additionally, at
the time of the Companys analysis, the book value of NTL
Incorporateds net assets significantly exceeded its market
capitalization. Accordingly, the Company performed an analysis
of the recoverability of its long-lived assets and associated
goodwill. The fair value of the Companys assets was
determined by discounting the Companys estimates of the
expected future cash flows related to these investments when the
non-discounted cash flows indicated that the long-lived assets
would not be recoverable. The Company recorded a write-down of
$8,161.6 million in the fourth quarter of 2001 as a result
of this analysis and review. The total charge included goodwill
of $8,077.8 million, license acquisition costs of
$58.8 million, customer lists of $9.1 million, other
intangibles of $14.9 million and investments in affiliates
of $1.0 million. The aggregate asset impairment charge of
$8,161.6 million related to the Companys business
segments as follows: $6,048.1 million Consumer,
$2,113.0 million Business and $0.5 million Broadcast.

5.     Acquisitions

On May 30, 2000, the Company acquired the
consumer cable telephone, Internet and television operations of
CWC in the United Kingdom (ConsumerCo). The
acquisition was accounted for as a purchase, and accordingly,
the net assets and results of operations of the acquired
business has been included in the consolidated financial
statements from the date of acquisition.

F-16



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In March 1999, the Company purchased Diamond
Cable Communications plc (Diamond) for an aggregate
purchase price of $984.6 million, including intangibles
aggregating $1,323.0 million. In July 1999, the Company
acquired Cablelink Limited (Cablelink) for an
aggregate purchase price of $700.5 million, including
intangibles of $669.6 million. In September 1999, NTL
Delaware acquired the shares of Workplace Technologies plc, for
an aggregate purchase price of $175.0 million, including
intangibles of $176.9 million. Workplace Technologies was
subsequently acquired by the Company from NTL Delaware. The net
assets and results of operations of Diamond, Cablelink and
Workplace Technologies plc are included in the consolidated
financial statements from March 1999, July 1999 and September
1999, their respective dates of acquisition.

A significant component of the pro forma results
is associated with the acquisition of ConsumerCo. The historical
results of ConsumerCo reflect certain intercompany costs and
expenses as they were prior to the separation of ConsumerCo,
which was completed in the second quarter of 2000. These costs
and expenses do not necessarily reflect the costs and expenses
that would have been incurred had ConsumerCo reported as a
separate entity for these periods. Therefore the historical
results of ConsumerCo which are included in the pro forma
results below are not reflective of results on a going forward
basis.

The pro forma unaudited consolidated results of
operations for the years ended December 31, 2000 and 1999
assuming consummation of these transactions as of
January 1, 1999 is as follows (in millions).

|                                     |  |                         |          |      |  |   |          |  
|------------------------------------ |  | ----------------------- | -------- | ---- |  | - | -------- | -
|                                     |  |                        
|                                     |  | Year Ended December 31,
|                                     |  |                        
|                                     |  | 2000                    |          | 1999
|                                     |  |                         |          |     
|Total revenue                        |  | $                       | 2,953.4  |      |  | $ | 2,844.5  |  
|Net (loss) before extraordinary item |  |                         | (2,973.5 | )    |  |   | (2,326.0 | )
|Net (loss)                           |  |                         | (2,973.5 | )    |  |   | (2,329.0 | )

In November 2001, the Company sold a portion of
the indirect access customers acquired from CWC for
£10.2 million ($14.8 million) which does not
include contingent payments for the collection of certain future
service revenues and existing receivables. The Company
recognized a loss on this sale of $88.5 million, after
deducting $102.0 million of unamortized intangibles.

6.     Fixed
Assets

Fixed assets consist of:

|                         |  |               |          |      |  |   |          |  
|------------------------ |  | ------------- | -------- | ---- |  | - | -------- | -
|                         |  |              
|                         |  | December 31, 
|                         |  |              
|                         |  | 2001          |          | 2000
|                         |  |               |          |     
|                         |  |              
|                         |  | (In millions)
|Operating equipment      |  | $             | 11,703.1 |      |  | $ | 10,004.9 |  
|Other equipment          |  |               | 833.2    |      |  |   | 1,079.8  |  
|Construction-in-progress |  |               | 1,274.4  |      |  |   | 1,509.7  |  
|                         |  |               |          |      |  |   |          |  
|                         |  |               | 13,810.7 |      |  |   | 12,594.4 |  
|Accumulated depreciation |  |               | (2,970.4 | )    |  |   | (1,677.6 | )
|                         |  |               |          |      |  |   |          |  
|                         |  | $             | 10,840.3 |      |  | $ | 10,916.8 |  
|                         |  |               |          |      |  |   |          |  

Depreciation expense (including amortization of
assets held under capital leases) for the years ended
December 31, 2001, 2000 and 1999 was $1,361.4 million,
$874.4 million and $475.5 million, respectively.

F-17



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

7.     Intangible
Assets

Intangible assets consist of:

|                                                                                               |  |               |       |      |  |   |          | 
|---------------------------------------------------------------------------------------------- |  | ------------- | ----- | ---- |  | - | -------- | 
|                                                                                               |  |              
|                                                                                               |  | December 31, 
|                                                                                               |  |              
|                                                                                               |  | 2001          |       | 2000
|                                                                                               |  |               |       |     
|                                                                                               |  |              
|                                                                                               |  | (In millions)
|Goodwill, net of accumulated amortization of
	$58.4 (2001) and $837.7 (2000)                   |  | $             | 640.9 |      |  | $ | 10,236.4 | 
|License acquisition costs, net of accumulated
	amortization of $125.2 (2001) and $215.8 (2000) |  |               | 54.7  |      |  |   | 139.2    | 
|Customer lists, net of accumulated amortization
	of $78.1 (2001) and $70.4 (2000)              |  |               | 64.8  |      |  |   | 158.6    | 
|Other intangibles, net of accumulated
	amortization of $4.5 (2001) and $5.5 (2000)             |  |               | 6.9   |      |  |   | 31.9     | 
|                                                                                               |  |               |       |      |  |   |          | 
|                                                                                               |  | $             | 767.3 |      |  | $ | 10,566.1 | 
|                                                                                               |  |               |       |      |  |   |          | 

Amortization of intangibles and other assets
charged to expense for the years ended December 31, 2001,
2000 and 1999 was $1,178.9 million, $826.3 million and
$290.2 million, respectively.

8.     Investments in
Cable London plc

NTL (Triangle) LLC (NTL Triangle), an
indirect wholly-owned subsidiary of the Company, owned a 50%
interest in Cable London plc (Cable London).
Pursuant to an agreement with Telewest Communications plc
(Telewest) relating to NTL Triangles and
Telewests respective 50% ownership interests in Cable
London, in November 1999 Telewest purchased all of NTL
Triangles shares of Cable London for
£428.0 million ($692.5 million) in cash. The
Company recorded a gain of $493.1 million on the sale. The
sale of the Cable London interest was an Asset Sale
for purposes of the Companys Indentures for certain of its
notes. The Company used an amount equal to the proceeds from the
sale to invest in Replacement Assets by November
2000.

F-18



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

9.     Long-Term
Debt

Long-term debt consists of:

|                            |                                                          |  |     |               |          |         |  |  |          |         | 
|--------------------------- | -------------------------------------------------------- |  | --- | ------------- | -------- | ------- |  |  | -------- | ------- | 
|                            |                                                          |  |     |              
|                            |                                                          |  |     | December 31, 
|                            |                                                          |  |     |              
|                            |                                                          |  |     | 2001          |          | 2000   
|                            |                                                          |  |     |               |          |        
|                            |                                                          |  |     |              
|                            |                                                          |  |     | (In millions)
|NTL Communications:         |                                                          |  |     |               |          |         |  |  |          |        
|                            | 12 3/4% Senior Deferred Coupon Notes                     |  | (a) |               | $        | 277.8   |  |  | $        | 277.8   | 
|                            | 11 1/2% Senior Deferred Coupon Notes                     |  | (b) |               |          | 1,050.0 |  |  |          | 1,040.5 | 
|                            | 10% Senior Notes                                         |  | (c) |               |          | 400.0   |  |  |          | 400.0   | 
|                            | 9 1/2% Senior Sterling Notes, less
	unamortized discount |  | (d) |               |          | 181.4   |  |  |          | 186.5   | 
|                            | 10 3/4% Senior Deferred Coupon Sterling Notes            |  | (e) |               |          | 382.3   |  |  |          | 353.6   | 
|                            | 9 3/4% Senior Deferred Coupon Notes                      |  | (f) |               |          | 1,153.8 |  |  |          | 1,048.5 | 
|                            | 9 3/4% Senior Deferred Coupon Sterling Notes             |  | (g) |               |          | 385.9   |  |  |          | 360.8   | 
|                            | 11 1/2% Senior Notes                                     |  | (h) |               |          | 625.0   |  |  |          | 625.0   | 
|                            | 12 3/8% Senior Deferred Coupon Notes                     |  | (i) |               |          | 364.9   |  |  |          | 323.6   | 
|                            | 7% Convertible Subordinated Notes                        |  | (j) |               |          | 489.8   |  |  |          | 599.3   | 
|                            | 9 1/4% Senior Euro Notes                                 |  | (k) |               |          | 222.5   |  |  |          | 234.7   | 
|                            | 9 7/8% Senior Euro Notes                                 |  | (l) |               |          | 311.5   |  |  |          | 328.6   | 
|                            | 11 1/2% Senior Deferred Coupon Euro Notes                |  | (m) |               |          | 135.6   |  |  |          | 127.9   | 
|                            | 11 7/8% Senior Notes, less unamortized
	discount         |  | (n) |               |          | 490.7   |  |  |          | 489.6   | 
|                            | 12 3/8% Senior Euro Notes, less unamortized
	premium     |  | (o) |               |          | 267.8   |  |  |          |        | 
|                            | 6 3/4% Convertible Senior Notes                          |  | (p) |               |          | 1,150.0 |  |  |          |        | 
|NTL Communications Limited: |                                                          |  |     |               |          |         |  |  |          |        
|                            | Credit Agreement                                         |  | (w) |               |          | 3,759.1 |  |  |          | 375.3   | 
|                            | Working Capital Agreement                                |  | (w) |               |          | 145.4   |  |  |          |        | 
|                            | Senior Secured Financing                                 |  | (w) |               |          | 290.9   |  |  |          |        | 
|                            | Other                                                    |  |     |               |          | 58.6    |  |  |          |        | 
|NTL Business:               |                                                          |  |     |               |          |         |  |  |          |        
|                            | Credit Agreement                                         |  | (w) |               |          |        |  |  |          | 3,030.3 | 
|ConsumerCo:                 |                                                          |  |     |               |          |         |  |  |          |        
|                            | Term Loan Facility and other                             |  |     |               |          |        |  |  |          | 21.7    | 
|NTL Triangle:               |                                                          |  |     |               |          |         |  |  |          |        
|                            | 11.2% Senior Discount Debentures                         |  | (q) |               |          | 517.3   |  |  |          | 517.3   | 
|                            | Other                                                    |  |     |               |          | 4.5     |  |  |          | 5.2     | 
|Diamond:                    |                                                          |  |     |               |          |         |  |  |          |        
|                            | 13 1/4% Senior Discount Notes                            |  | (r) |               |          | 285.1   |  |  |          | 285.1   | 
|                            | 11 3/4% Senior Discount Notes                            |  | (s) |               |          | 531.0   |  |  |          | 531.0   | 
|                            | 10 3/4% Senior Discount Notes                            |  | (t) |               |          | 415.1   |  |  |          | 373.9   | 
|                            | 10% Senior Sterling Notes                                |  | (u) |               |          | 196.3   |  |  |          | 201.9   | 
|                            | 9 1/8% Senior Notes                                      |  | (v) |               |          | 110.0   |  |  |          | 110.0   | 
|                            | Other                                                    |  |     |               |          | 3.6     |  |  |          | 6.0     | 
|                            |                                                          |  |     |               |          |         |  |  |          |        
|                            |                                                          |  |     |               | 14,205.9 |         |  |  | 11,854.1 |        

F-19



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                     |  |  |  |               |          |      |  |   |          | 
|-------------------- |  |  |  | ------------- | -------- | ---- |  | - | -------- | 
|                     |  |  |  |              
|                     |  |  |  | December 31, 
|                     |  |  |  |              
|                     |  |  |  | 2001          |          | 2000
|                     |  |  |  |               |          |     
|                     |  |  |  |              
|                     |  |  |  | (In millions)
|Less current portion |  |  |  |               | 14,205.9 |      |  |   | 10.7     | 
|                     |  |  |  |               |          |      |  |   |          | 
|                     |  |  |  | $             |         |      |  | $ | 11,843.4 | 
|                     |  |  |  |               |          |      |  |   |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | 12 3/4% Notes due April 15, 2005,
	principal amount at maturity of $277.8 million, interest
	payable semiannually from October 15, 2000, redeemable at
	the Companys option on or after April 15, 2000;                                                                                                                                                                                                                                       
|   
|(b) | 11 1/2% Notes due February 1, 2006,
	principal amount at maturity of $1,050.0 million, interest
	payable semiannually from August 1, 2001, redeemable at the
	Companys option on or after February 1, 2001;                                                                                                                                                                                                                                   
|   
|(c) | 10% Notes due February 15, 2007, principal
	amount at maturity of $400.0 million, interest payable
	semiannually from August 15, 1997, redeemable at the
	Companys option on or after February 15, 2002;                                                                                                                                                                                                                                      
|   
|(d) | 9 1/2% Sterling Notes due April 1,
	2008, principal amount at maturity of £125.0 million
	($181.8 million), interest payable semiannually from
	October 1, 1998, redeemable at the Companys option on
	or after April 1, 2003;                                                                                                                                                                                                                
|   
|(e) | 10 3/4% Sterling Notes due April 1,
	2008, principal amount at maturity of £300.0 million
	($436.3 million), interest payable semiannually beginning
	on October 1, 2003, redeemable at the Companys option
	on or after April 1, 2003;                                                                                                                                                                                                       
|   
|(f) | 9 3/4% Notes due April 1, 2008,
	principal amount at maturity of $1,300.0 million, interest
	payable semiannually beginning on October 1, 2003,
	redeemable at the Companys option on or after
	April 1, 2003;                                                                                                                                                                                                                                
|   
|(g) | 9 3/4% Sterling Notes due April 15,
	2009, principal amount at maturity of £330.0 million
	($479.9 million), interest payable semiannually beginning
	on October 15, 2004, redeemable at the Companys
	option on or after April 15, 2004;                                                                                                                                                                                                     
|   
|(h) | 11 1/2% Notes due October 1, 2008,
	principal amount at maturity of $625.0 million, interest
	payable semiannually from April 1, 1999, redeemable at the
	Companys option on or after October 1, 2003;                                                                                                                                                                                                                                        
|   
|(i) | 12 3/8% Notes due October 1, 2008,
	principal amount at maturity of $450.0 million, interest
	payable semiannually beginning on April 1, 2004, redeemable
	at the Companys option on or after October 1, 2003;                                                                                                                                                                                                                                
|   
|(j) | 7% Convertible Notes due December 15, 2008,
	principal amount at maturity of $489.8 million, interest
	payable semiannually from June 15, 1999, redeemable at the
	Companys option on or after December 15, 2001,
	convertible into shares of NTL Incorporated common stock at a
	conversion price of $39.20 per share (there are approximately
	12.5 million shares of NTL Incorporated common stock
	reserved for issuance upon conversion);
|   
|(k) | 9 1/4% Euro Notes due November 15,
	2006, principal amount at maturity of
	250.0 million,
	($222.5 million), interest payable semiannually from
	May 15, 2000;                                                                                                                                                                                                                                                                                
|   
|(l) | 9 7/8% Euro Notes due November 15,
	2009, principal amount at maturity of
	350.0 million,
	($311.5 million), interest payable semiannually from
	May 15, 2000, redeemable at the Companys option on or
	after November 15, 2004;                                                                                                                                                                                                             
|   
|(m) | 11 1/2% Deferred Euro Notes due
	November 15, 2009, principal amount at maturity of
	210.0 million
	($186.9 million), interest payable semiannually beginning
	on May 15, 2005, redeemable at the Companys option on
	or after November 15, 2004;                                                                                                                                                                                            
|   
|(n) | 11 7/8% Notes due October 1, 2010,
	principal amount at maturity of $500.0 million, interest
	payable semiannually from April 1, 2001, redeemable at the
	Companys option on or after October 1, 2005;                                                                                                                                                                                                                                        

F-20



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(o) | 12 3/8% Senior Euro Notes due
	February 1, 2008, issued in January and February 2001,
	principal amount at maturity of
	300.0 million
	($267.0 million), interest payable semiannually from
	August 1, 2001;                                                                                                                                                                                                                                                                
|   
|(p) | 6 3/4% Convertible Senior Notes due
	May 15, 2008, issued in May 2001, principal amount at
	maturity of $1,150.0 million, interest payable semiannually
	from November 15, 2001, redeemable at the Companys
	option on or after May 20, 2004, convertible into shares of
	NTL Incorporated common stock at a conversion price of $32.728
	per share (there were approximately 35.1 million shares of
	NTL Incorporated common stock reserved for issuance upon
	conversion);
|   
|(q) | 11.2% Debentures due November 15, 2007,
	principal amount at maturity of $517.3 million, interest
	payable semiannually from May 15, 2001, redeemable at NTL
	Triangles option after November 15, 2000;                                                                                                                                                                                                                                                                     
|   
|(r) | 13 1/4% Notes due September 30, 2004,
	principal amount at maturity of $285.1 million, interest
	payable semiannually from March 31, 2000, redeemable at
	Diamonds option on or after September 30, 1999;                                                                                                                                                                                                                                                                   
|   
|(s) | 11 3/4% Notes due December 15, 2005,
	principal amount at maturity of $531.0 million, interest
	payable semiannually from June 15, 2001, redeemable at
	Diamonds option on or after December 15, 2000;                                                                                                                                                                                                                                                                      
|   
|(t) | 10 3/4% Notes due February 15, 2007,
	principal amount at maturity of $420.5 million, interest
	payable semiannually beginning on August 15, 2002,
	redeemable at Diamonds option on or after
	December 15, 2002;                                                                                                                                                                                                                                                           
|   
|(u) | 10% Sterling Notes due February 1, 2008,
	issued by Diamond Holdings plc, principal amount at maturity of
	£135.0 million ($196.3 million), interest payable
	semiannually from August 1, 1998, redeemable at
	Diamonds option on or after February 1, 2003; and                                                                                                                                                                                                            
|   
|(v) | 9 1/8% Notes due February 1, 2008,
	issued by Diamond Holdings plc, principal amount of
	$110.0 million, interest payable semiannually from
	August 1, 1998, redeemable at Diamonds option on or
	after February 1, 2003.                                                                                                                                                                                                                                                   

See Note 1 for discussion of the
uncertainties about compliance with the terms and conditions of
the Companys debt that would give the holders of the debt
the right to accelerate repayment, which has caused primarily
all of the Companys long-term debt to be classified as
current.

The indentures governing the notes contain
restrictions relating to, among other things:
(i) incurrence of additional indebtedness and issuance of
preferred stock, (ii) dividend and other payment
restrictions and (iii) mergers, consolidations and sales of
assets.

The Company, NTL Incorporated and NTL Delaware
did not make interest payments and payments of related fees when
due on April 1 and April 15, 2002. If the applicable
issuer does not pay interest on these notes after a 30 day
grace period expires (on April 30, 2002 in the case of the
missed interest payments due April 1, 2002), there is an
event of default under the indenture in respect of the notes on
which the interest is due and unpaid. An event of default
entitles the trustee under the indenture or the holders of 25%
of the outstanding notes to declare the principal amount of
those notes to be immediately due and payable. Even if the
maturity of those notes is not accelerated after April 30,
2002, such an event of default would also result in an event of
default for payment defaults in respect of other debt (commonly
called cross defaults) under all of our other notes, except for
those issued by NTL Triangle, Diamond Cable Communications or
Diamond Holdings. As a result, upon the expiration of the grace
period, on April 30, 2002, events of default for failure to
pay interest would occur under the relevant indentures at NTL
Communications and, contemporaneously, cross defaults would
occur under the Companys other indentures at NTL
Communications, NTL Delaware, NTL Incorporated and under our
bank credit facility in the United Kingdom. This would give
holders of the outstanding series of debt at these entities the
right to accelerate repayment of those debts by declaring the
principal amount of the debts to be immediately due and payable
unless we obtain waivers or forbearance agreements from
sufficient percentages of our creditors.

F-21



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

During 2001, 2000 and 1999, the Company
recognized $284.7 million, $473.1 million and
$451.4 million, respectively, of original issue discount as
interest expense.

In addition to the notes described above, a
subsidiary of the Company has the following bank credit
agreements outstanding:



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(w) | In May 2000, NTL Business Limited (NTL
	Business), a wholly-owned subsidiary of the Company and
	NTL Communications Limited (NTLCL), a wholly-owned
	indirect subsidiary of the Company, entered into a
	£2,500.0 million ($3,635.8 million) credit
	agreement in connection with the ConsumerCo acquisition. On
	February 21, 2001, as required by the NTL Business and
	NTLCL credit agreement, the Company completed a transaction
	whereby it acquired the entire issued share capital of NTL (CWC
	Holdings) Limited (the entity that owns ConsumerCo) from NTL
	Incorporated and the entire issued share capital of NTL Business
	from NTL Delaware in exchange for shares of NTL Incorporated
	common stock. As a result of this transaction, ConsumerCo and
	NTL Business became subsidiaries of the Company, and NTL
	Business rights and obligations under the
	£2,500.0 million credit agreement were assigned to a
	subsidiary of NTLCL. In October 2001, NTLCL completed
	£169.6 million ($246.6 million) of vendor
	financing as an addition to NTLCLs
	£2,500.0 million credit agreement with the same terms
	and conditions. The Company borrowed £84.8 million
	($123.3 million) of the vendor financing in October 2001.
	The commitment for the remaining £84.8 million has
	expired. Interest is payable at least every six months at LIBOR
	plus a margin rate of 2.00% per annum, which is subject to
	adjustment based on the ratio of EBITDA to finance charges of
	the UK Group.

For purposes of this credit agreement, Diamond
Cable Communications Limited and subsidiaries, NTL (Triangle)
LLC and subsidiaries and certain other entities are excluded
from the U.K. Group. The unused portion of the commitment is
subject to a commitment fee of 0.75% payable quarterly, which is
reduced to 0.50% when over 50% of the commitment is utilized.
Principal is due in six quarterly installments beginning on
June 30, 2004. The credit agreement contains various
financial and other covenants with respect to the U.K. Group,
and restrictions on dividends and distributions by the U.K.
Group. As of December 31, 2001, there was
£2,584.8 million ($3,759.1 million) outstanding
under this credit agreement. The effective interest rate was
6.73% and 8.283% as of December 31, 2001 and 2000,
respectively.

In October 2001, NTLCL completed
£200.0 million ($290.9 million) of GE Capital
senior secured financing. Interest on the GE Capital senior
secured financing is payable at least every six months at LIBOR
plus a margin rate of 3.50% per annum. The senior secured
financing is repayable in eight quarterly installments beginning
on June 30, 2006. The effective interest rate at
December 31, 2001 was 8.06%.

NTLCL has a £1,300.0 million
($1,890.6 million) credit agreement with a group of banks,
which is available to finance working capital requirements of
the U.K. Group (as defined above). Pursuant to the credit
agreement, in connection with the issuance of new debt beginning
in October 2000, the commitment has been reduced by
£882.5 million ($1,283.4 million). Interest is
payable at least every six months at LIBOR plus a margin rate of
5.50% per annum. The margin rate shall increase by 0.50% on the
three month anniversary of the initial advance and by an
additional 0.50% on each subsequent three month anniversary, up
to a maximum total interest rate of 16.00% per annum. The unused
portion of the commitment is subject to a commitment fee of
0.75% payable quarterly. Principal is due in full on March 31,
2001. The credit agreement contains various financial and other
covenants with respect to the U.K. Group, and restrictions on
dividends and distributions by the U.K. Group. As of
December 31, 2001, £100.0 million
($145.4 million) was outstanding under this credit
agreement with an effective interest rate of 9.57%. In January
and February 2002, the Company borrowed the remaining amounts
available under this agreement.

F-22



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In February 2001, $109.5 million principal
amount of 7% Convertible Subordinated Notes due
December 15, 2008 were converted into 2.8 million
shares of NTL Incorporated common stock at the applicable
conversion price of $39.20 per share. The Company issued as a
premium on the conversion an additional 0.5 million shares
which were valued at NTL Incorporated closing common stock price
on the dates of conversion. The premium, which amounted to
$17.6 million, is included in interest expense.
Additionally accrued and unpaid interest of $1.2 million at
the time of the conversion was waived by the holders of the
convertible notes.

In connection with the Cablelink acquisition, the
Company issued $704.6 million principal amount Senior
Increasing Rate Notes due 2000. In November 1999, the Company
received net proceeds of $720.7 from the issuance of the
9 1/4% Euro Notes, the 9 7/8% Euro Notes and the
11 1/2% Deferred Euro Notes, of which $716.5 million
was used to repay the Senior Increasing Rate Notes plus accrued
interest. The Company recorded an extraordinary loss from the
early extinguishment of the notes of $3.0 million in 1999.

The NTLCL bank credit facilities, as well as the
NTL Triangle and Diamond notes, restrict the payment of cash
dividends and loans to the Company. At December 31, 2001,
restricted net assets were $3,640.1 million.

Long-term debt repayments are due as follows (in
millions). The table reflects the Companys contractual
obligations, but the entire obligation has been classified as
current.

|                         |  |   |           |  
|------------------------ |  | - | --------- | -
|Year ending December 31: |  |  
|2002                     |  | $ | 2.9       |  
|2003                     |  |   | 2.4       |  
|2004                     |  |   | 418.3     |  
|2005                     |  |   | 4,439.2   |  
|2006                     |  |   | 1,449.1   |  
|Thereafter               |  |   | 8,339.0   |  
|                         |  |   |           |  
|Total debt repayments    |  | $ | 14,650.9  |  
|Less: current portion    |  |   | (14,650.9 | )
|                         |  |   |           |  
|                         |  | $ |          |  
|                         |  |   |           |  

10.     Derivative
Financial Instruments

Effective January 1, 2001, the Company
adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by SFAS
Nos. 137 and 138. The new accounting standard requires that
all derivative instruments be recorded on the balance sheet at
fair value. Changes in the fair value of derivatives are
recorded each period in the results of operations or in other
comprehensive income (loss), depending on whether a derivative
is designated as a fair value or cash flow hedge. The
ineffective portion of all hedges is recognized in the results
of operations. Beginning in October 1, 2001, the Company
has recorded the change in the fair value of derivatives related
to changes in time value each period in other comprehensive
income for certain qualifying cash flow hedges.

On January 1, 2001, the Company recorded all
of its outstanding derivative instruments at their fair value.
The outstanding derivative instruments were comprised of cross
currency swaps to hedge exposure to movements in the British
pound/ U.S. dollar exchange rate, and a number of zero cost
collars to hedge exposure to floating interest rates on certain
of its debt. The aggregate fair value on January 1, 2001
was a liability of $2.2 million, which was recorded as
other comprehensive loss. In 2001, the Company entered into
cross currency swaps to hedge exposure to movements in the Euro/
British pound exchange rate. In the year

F-23



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

ended December 31, 2001, the Company
recorded other comprehensive loss of $1.4 million as a
result of changes in the fair values. The aggregate fair value
at December 31, 2001 was a net liability of
$3.6 million.

In September 2001, the Company entered into a
British pound forward foreign exchange agreement, consisting of
twenty-six accumulating forward contracts, to reduce its
exposure to movement in the British pound/ U.S. dollar
exchange rate in accordance with its market risk strategies. As
of December 31, 2001, the fair value of this instrument was
a liability of $0.3 million.

11.     Non-Cash
Compensation

In July 2001, the Compensation and Option
Committee of the Board of Directors (the Compensation
Committee) approved modifications to certain stock
options. The latest possible expiration date of options to
purchase an aggregate of approximately 4.7 million shares
of NTL Incorporateds common stock with exercise prices
from $.17 to $14.76 per share was extended from July 30,
2001 to October 2004, as applicable, to January 30, 2006.
The Company recognized non-cash compensation expense of
$30.6 million based on the excess of the quoted market
price of NTL Incorporateds common stock on the date of the
modification of $12.05 per share over the exercise price per
share.

In September 2000, the Board of Directors
approved modifications to certain stock options granted to
employees in November 1999 through May 2000. Options to purchase
an aggregate of approximately 16.5 million shares of NTL
Incorporateds common stock with a weighted average
exercise price of $64.39 per share were modified such that the
exercise price was reduced to $44.50 per share and the vesting
schedule was delayed and/or lengthened. The Company is
accounting for these options as a variable plan beginning in
September 2000. The Company will recognize non-cash compensation
expense for the excess of the quoted market price of NTL
Incorporateds common stock over the exercise price of the
vested options while the options remain outstanding. In
September 2000, the Company recognized non-cash compensation
expense of $2.2 million related to this plan.

The Compensation Committee has taken the actions
described above to continue to provide the appropriate
performance incentives to those affected.

12.     Other Charges
Including Restructuring Charges

Other charges of $297.9 million in 2001
include restructuring charges of $202.8 million and costs
of $95.1 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. Other charges of $92.7 million
in 2000 include restructuring charges of $65.9 million and
costs of $26.8 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. Other charges of $16.2 million
in 1999 were incurred for the cancellation of certain contracts.

Restructuring charges of $202.8 million and
$65.9 million for the years ended December 31, 2001
and 2000, respectively, relate to the Companys
announcements in the fourth quarter of 2001 and in November 2000
that it was taking additional actions to reorganize, re-size and
reduce operating costs and create greater efficiency in various
areas of the Company. An aggregate of $57.9 million of the
2001 reorganization costs are for the write-off of equipment and
other assets that are not in use and will not require any future
cash outlays. The employee severance and related costs in 2000
were for approximately 2,300 employees to be terminated,
approximately 550 of whom are still employed by the Company as
of December 31, 2001. These costs in 2001 are for
approximately 5,200 employees to be terminated, of which
approximately 2,900 employees are still employed by the Company
as of December 31, 2001.

F-24



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes the restructuring
charges incurred and utilized in 2000 and 2001:

|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|-------------------------- |  | ------------- | ----- | ----- |  | ------------- | ---- | ------ |  | ----- | ---- |  |  | - | ----- | - |  | - | ----- | -
|                           |  | Employee      |       |       |  |               |      |        |  |      
|                           |  | Severance     |       | Lease |  |               |      |        |  |      
|                           |  | And Related   |       | Exit  |  | Agreement     |      | Fixed  |  |      
|                           |  | Costs         |       | Costs |  | Modifications |      | Assets |  | Total
|                           |  |               |       |       |  |               |      |        |  |      
|                           |  |              
|                           |  | (In millions)
|Charged to expense         |  | $             | 47.9  |       |  | $             | 18.0 |        |  | $     |     |  |  | $ |      |   |  | $ | 65.9  |  
|Utilized                   |  |               |      |       |  |               |     |        |  |       |     |  |  |   |      |   |  |   |      |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2000 |  |               | 47.9  |       |  |               | 18.0 |        |  |       |     |  |  |   |      |   |  |   | 65.9  |  
|2000 provision utilized    |  |               | (41.3 | )     |  |               | (9.6 | )      |  |       |     |  |  |   |      |   |  |   | (50.9 | )
|2000 provision released    |  |               | (6.6  | )     |  |               | (7.3 | )      |  |       |     |  |  |   |      |   |  |   | (13.9 | )
|Charged to expense         |  |               | 89.7  |       |  |               | 41.4 |        |  |       | 27.7 |  |  |   | 57.9  |   |  |   | 216.7 |  
|2001 provision utilized    |  |               | (26.2 | )     |  |               |     |        |  |       |     |  |  |   | (57.9 | ) |  |   | (84.1 | )
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2001 |  | $             | 63.5  |       |  | $             | 42.5 |        |  | $     | 27.7 |  |  | $ |      |   |  | $ | 133.7 |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  

13.     Income
Taxes

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

|               |         |                         |       |       |  |      |       |       |   |   |       |       |  
|-------------- | ------- | ----------------------- | ----- | ----- |  | ---- | ----- | ----- | - | - | ----- | ----- | -
|               |         |                        
|               |         | Year Ended December 31,
|               |         |                        
|               |         | 2001                    |       | 2000  |  | 1999
|               |         |                         |       |       |  |     
|               |         |                        
|               |         | (In millions)          
|Current:       |         |                         |       |       |  |      |       |       |   |   |       |      
|               | Federal |                         | $     | 1.2   |  |      | $     |      |   |   | $     | 1.0   |  
|               | Foreign |                         |       | 0.5   |  |      |       | 0.9   |   |   |       |      |  
|               |         |                         |       |       |  |      |       |       |   |   |       |      
|Total current  |         |                         | 1.7   |       |  |      | 0.9   |       |   |   | 1.0   |      
|               |         |                         |       |       |  |      |       |       |   |   |       |      
|Deferred:      |         |                         |       |       |  |      |       |       |   |   |       |      
|               | Foreign |                         | $     | 116.4 |  |      | $     | (80.8 | ) |   | $     | (30.9 | )
|               |         |                         |       |       |  |      |       |       |   |   |       |      
|Total deferred |         |                         | 116.4 |       |  |      | (80.8 | )     |   |   | (30.9 | )    
|               |         |                         |       |       |  |      |       |       |   |   |       |      
|               |         | $                       | 118.1 |       |  | $    | (79.9 | )     |   | $ | (29.9 | )    
|               |         |                         |       |       |  |      |       |       |   |   |       |      

The Companys tax expense relates primarily
to an increase in the deferred tax liability attributable to
separate company profits of a foreign subsidiary offset to some
extent by a decrease in net deferred tax liabilities
attributable to operating losses of other foreign subsidiaries.
The increase in deferred tax liabilities includes an adjustment
related to 1997 through 2000 of approximately
$116.1 million that is primarily attributable to additional
tax depreciation being claimed during 2001 on original and
amended income tax returns.

F-25



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 the
deferred tax liabilities and assets are as follows:

|                                            |                                 |               |          |         |  |   |          |         | 
|------------------------------------------- | ------------------------------- | ------------- | -------- | ------- |  | - | -------- | ------- | 
|                                            |                                 |              
|                                            |                                 | December 31, 
|                                            |                                 |              
|                                            |                                 | 2001          |          | 2000   
|                                            |                                 |               |          |        
|                                            |                                 |              
|                                            |                                 | (In millions)
|Deferred tax liabilities:                   |                                 |               |          |         |  |   |          |        
|                                            | Intangibles                     |               | $        | 34.5    |  |   | $        | 58.0    | 
|                                            | Depreciation and amortization   |               |          | 354.2   |  |   |          | 591.9   | 
|                                            |                                 |               |          |         |  |   |          |        
|Total deferred tax liabilities              |                                 |               | 388.7    |         |  |   | 649.9    |        
|Deferred tax assets:                        |                                 |               |          |         |  |   |          |        
|                                            | Net operating losses            |               |          | 1,932.9 |  |   |          | 1,491.9 | 
|                                            | Net deferred interest expense   |               |          | 239.9   |  |   |          | 198.6   | 
|                                            | Depreciation and amortization   |               |          | 401.5   |  |   |          | 378.0   | 
|                                            | Inventory                       |               |          | 15.9    |  |   |          | 18.5    | 
|                                            | Purchase accounting liabilities |               |          | 16.5    |  |   |          | 158.5   | 
|                                            | Other                           |               |          | 51.9    |  |   |          | 32.4    | 
|                                            |                                 |               |          |         |  |   |          |        
|Total deferred tax assets                   |                                 |               | 2,658.6  |         |  |   | 2,277.9  |        
|Valuation allowance for deferred tax assets |                                 |               | (2,383.7 | )       |  |   | (1,623.1 | )      
|                                            |                                 |               |          |         |  |   |          |        
|Net deferred tax assets                     |                                 |               | 274.9    |         |  |   | 654.8    |        
|                                            |                                 |               |          |         |  |   |          |        
|Net deferred tax (assets) liabilities       |                                 | $             | 113.8    |         |  | $ | (4.9     | )      
|                                            |                                 |               |          |         |  |   |          |        

At December 31, 2001, 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. At December 31, 2001, the valuation
allowance includes approximately $475.0 million, which, if
realized, would be accounted for as a reduction to goodwill or
an increase in additional paid-in capital.

At December 31, 2001, the Company had net
operating loss carryforwards of approximately
$1,000.0 million for U.S. federal income tax purposes that
expire in varying amounts commencing in 2009. This excludes net
operating loss carryforwards of companies that are resident in
both the U.S. and the United Kingdom. The Company also has
United Kingdom net operating loss carryforwards of approximately
$5,215.0 million 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 $1,100.0 million.

As discussed in Note 1, the Company needs to
restructure its outstanding debt during 2002. A restructuring of
the Companys debt can be expected to give rise to
cancellation of indebtedness (COD), which if it
occurs in the course of a proceeding pursuant to Chapter 11
of the U.S. Bankruptcy Code, would be non-taxable. If the COD is
non-taxable, the Company will be required to reduce its U.S. net
operating loss carryforwards and other attributes such as tax
basis in assets by an amount equal to the non-recognized COD.
Therefore, it is likely that as a result of the successful
completion of the proposed plan of recapitalization, the Company
will have no U.S. net operating loss carryforwards.

In 2000, the Internal Revenue Service completed
its federal income tax audit of the Company for the years 1993,
1994 and 1995. The audit resulted in a reduction in U.S. net
operating loss carryforwards that had no material impact on the
Company. The Company is currently undergoing a U.S. federal
income tax audit

F-26



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

for the years 1996, 1997 and 1998. The Company
does not expect that the audit adjustments will have a material
adverse effect on its financial position, results of operations
or cash flows.

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

|                                          |                                                    |                         |          |         |  |      |        |       |  |   |        |       | 
|----------------------------------------- | -------------------------------------------------- | ----------------------- | -------- | ------- |  | ---- | ------ | ----- |  | - | ------ | ----- | 
|                                          |                                                    |                        
|                                          |                                                    | Year Ended December 31,
|                                          |                                                    |                        
|                                          |                                                    | 2001                    |          | 2000    |  | 1999
|                                          |                                                    |                         |          |         |  |     
|                                          |                                                    |                        
|                                          |                                                    | (In millions)          
|(Benefit) at federal statutory rate (35%) |                                                    | $                       | (4,101.6 | )       |  | $    | (863.8 | )     |  | $ | (261.0 | )    
|Add:                                      |                                                    |                         |          |         |  |      |        |       |  |   |        |      
|                                          | Non-deductible asset impairments                   |                         |          | 2,856.6 |  |      |        |      |  |   |        |      | 
|                                          | Foreign losses with no benefit                     |                         |          | 809.7   |  |      |        | 568.6 |  |   |        | 106.9 | 
|                                          | U.S. losses with no benefit                        |                         |          | 436.6   |  |      |        | 215.3 |  |   |        | 124.2 | 
|                                          | Prior year accelerated depreciation                |                         |          | 116.3   |  |      |        |      |  |   |        |      | 
|                                          | State and local income tax, net of federal benefit |                         |          | 0.5     |  |      |        |      |  |   |        |      | 
|                                          |                                                    |                         |          |         |  |      |        |       |  |   |        |      
|                                          |                                                    | $                       | 118.1    |         |  | $    | (79.9  | )     |  | $ | (29.9  | )    
|                                          |                                                    |                         |          |         |  |      |        |       |  |   |        |      

14.     Fair Values
of Financial Instruments

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

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

Long-term debt:The
carrying amounts of the bank credit facilities and the senior
secured financing 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:

|                          |                              |                   |       |                   |  |          |       |            |  |   |       |         |  |   |       |       | 
|------------------------- | ---------------------------- | ----------------- | ----- | ----------------- |  | -------- | ----- | ---------- |  | - | ----- | ------- |  | - | ----- | ----- | 
|                          |                              |                   |       |                  
|                          |                              | December 31, 2001 |       | December 31, 2000
|                          |                              |                   |       |                  
|                          |                              | Carrying          |       |                   |  | Carrying |       |           
|                          |                              | Amount            |       | Fair Value        |  | Amount   |       | Fair Value
|                          |                              |                   |       |                   |  |          |       |           
|                          |                              |                  
|                          |                              | (In millions)    
|Cash and cash equivalents |                              | $                 | 251.1 |                   |  | $        | 251.1 |            |  | $ | 423.5 |         |  | $ | 423.5 |      
|Long-term debt:           |                              |                   |       |                   |  |          |       |            |  |   |       |         |  |   |       |      
|                          | 12 3/4% Notes                |                   |       | 277.8             |  |          |       | 91.7       |  |   |       | 277.8   |  |   |       | 255.6 | 
|                          | 11 1/2% Notes                |                   |       | 1,050.0           |  |          |       | 336.0      |  |   |       | 1,040.5 |  |   |       | 913.5 | 
|                          | 10% Notes                    |                   |       | 400.0             |  |          |       | 120.0      |  |   |       | 400.0   |  |   |       | 348.0 | 
|                          | 9 1/2% Sterling Senior Notes |                   |       | 181.4             |  |          |       | 60.1       |  |   |       | 186.5   |  |   |       | 154.2 | 
|                          | 10 3/4% Sterling Notes       |                   |       | 382.3             |  |          |       | 124.3      |  |   |       | 353.6   |  |   |       | 242.3 | 
|                          | 9 3/4% Notes                 |                   |       | 1,153.8           |  |          |       | 338.0      |  |   |       | 1,048.5 |  |   |       | 715.0 | 
|                          | 9 3/4% Sterling Notes        |                   |       | 385.9             |  |          |       | 124.8      |  |   |       | 360.8   |  |   |       | 214.7 | 
|                          | 11 1/2% Notes                |                   |       | 625.0             |  |          |       | 200.0      |  |   |       | 625.0   |  |   |       | 556.3 | 
|                          | 12 3/8% Notes                |                   |       | 364.9             |  |          |       | 108.0      |  |   |       | 323.6   |  |   |       | 252.0 | 
|                          | 7% Convertible Notes         |                   |       | 489.8             |  |          |       | 53.9       |  |   |       | 599.3   |  |   |       | 470.5 | 
|                          | 9 1/4% Euro Notes            |                   |       | 222.5             |  |          |       | 74.6       |  |   |       | 234.7   |  |   |       | 207.7 | 
|                          | 9 7/8% Euro Notes            |                   |       | 311.5             |  |          |       | 104.4      |  |   |       | 328.6   |  |   |       | 269.4 | 

F-27



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                |  |                   |         |                   |  |          |         |            |  |  |         |  |  |  |         | 
|------------------------------- |  | ----------------- | ------- | ----------------- |  | -------- | ------- | ---------- |  |  | ------- |  |  |  | ------- | 
|                                |  |                   |         |                  
|                                |  | December 31, 2001 |         | December 31, 2000
|                                |  |                   |         |                  
|                                |  | Carrying          |         |                   |  | Carrying |         |           
|                                |  | Amount            |         | Fair Value        |  | Amount   |         | Fair Value
|                                |  |                   |         |                   |  |          |         |           
|                                |  |                  
|                                |  | (In millions)    
|11 1/2% Euro Deferred Notes     |  |                   | 135.6   |                   |  |          | 44.9    |            |  |  | 127.9   |  |  |  | 99.6    | 
|11 7/8% Senior Notes            |  |                   | 490.7   |                   |  |          | 160.0   |            |  |  | 489.6   |  |  |  | 445.0   | 
|12 3/8% Senior Euro Notes       |  |                   | 267.8   |                   |  |          | 90.8    |            |  |  |        |  |  |  |        | 
|6 3/4% Convertible Senior Notes |  |                   | 1,150.0 |                   |  |          | 353.6   |            |  |  |        |  |  |  |        | 
|Credit Agreement                |  |                   | 3,759.1 |                   |  |          | 3,759.1 |            |  |  | 3,405.6 |  |  |  | 3,405.6 | 
|Working Capital Agreement       |  |                   | 145.4   |                   |  |          | 145.4   |            |  |  |        |  |  |  |        | 
|Senior Secured Financing        |  |                   | 290.9   |                   |  |          | 290.9   |            |  |  |        |  |  |  |        | 
|11.2% Debentures                |  |                   | 517.3   |                   |  |          | 367.3   |            |  |  | 517.3   |  |  |  | 439.7   | 
|13 1/4% Notes                   |  |                   | 285.1   |                   |  |          | 77.0    |            |  |  | 285.1   |  |  |  | 270.8   | 
|11 3/4% Notes                   |  |                   | 531.0   |                   |  |          | 132.8   |            |  |  | 531.0   |  |  |  | 467.3   | 
|10 3/4% Notes                   |  |                   | 415.1   |                   |  |          | 100.9   |            |  |  | 373.9   |  |  |  | 281.7   | 
|10% Sterling Notes              |  |                   | 196.3   |                   |  |          | 143.4   |            |  |  | 201.9   |  |  |  | 161.5   | 
|9 1/8% Notes                    |  |                   | 110.0   |                   |  |          | 71.5    |            |  |  | 110.0   |  |  |  | 89.7    | 

15.  Related Party
Transactions

In 1999, the Company provided management,
financial, legal and technical services to Cellular
Communications International, Inc. (CCII) and
Cellular Communications of Puerto Rico, Inc. (CCPR).
Certain officers and directors of the Company were officers and
directors of CCII and CCPR.

In the fourth quarter of 1999, CoreComm Limited
(CoreComm) (which was formed in 1998 and has certain
common officers and directors with the Company) began charging
the Company a percentage of its office rent and supplies expense
in respect of certain facilities which were shared with the
Company. In 1999, the Company charged CCPR, CCII and CoreComm
$0.1 million, $0.4 million and $1.3 million,
respectively, for direct costs where identifiable and a fixed
percentage of its corporate overhead, net of CoreComms
charges to the Company. Charges to CCPR and to CCII ceased in
1999 due to each of them being acquired and the resulting
termination of services. In 2001 and 2000, the Company charged
CoreComm $0.3 million and $0.9 million, respectively,
for direct costs where identifiable and a fixed percentage of
its corporate overhead, net of CoreComms charges to the
Company. These charges reduced corporate expenses in 2001, 2000
and 1999. It is not practicable to determine the amounts of
these expenses that would have been incurred had the Company
operated as an unaffiliated entity. In the opinion of management
of the Company, the allocation methods are reasonable.

The Company obtains billing and software
development services from CoreComm. CoreComm billed the Company
$3.4 million, $5.9 million and $4.6 million in
2001, 2000 and 1999, respectively, for these services.

In March 2000, the Company and CoreComm announced
that they had entered into an agreement to link their networks
in order to create an international Internet backbone that
commenced operations in February 2001. The Company incurred
costs of $0.3 million for network usage in the year ended
December 31, 2001.

On April 12, 2001, NTL Incorporated
purchased $15.0 million of an unsecured convertible note
from CoreComm Limited and received warrants to purchase 770,000
shares of CoreComm common stock at an exercise price of $.01 per
share that expire in April 2011. In addition, concurrently with
the note purchase and without additional compensation, NTL
Incorporated entered into a network and software agreement with
CoreComm. Under the agreement, CoreComm will provide U.S.
network access for Internet traffic from NTL Incorporateds
U.K. customers for three years, as well as a royalty free
license to use certain billing and

F-28



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

provisioning software and know-how. Interest on
the notes is at 10.75% per annum, payable semiannually beginning
on October 15, 2001. The interest is payable in kind by the
issuance of additional notes in such principal amount equal to
the interest payment that is then due. The notes are convertible
into CoreComm common stock prior to maturity at a conversion
price of $1.00 per share, subject to adjustment. Additional
notes issued for interest will have an initial conversion price
equal to 120% of the weighted average closing price of CoreComm
common stock for a specified period. The Company and CoreComm
have agreed to certain modifications to the conversion feature
in connection with CoreComms recapitalization in December
2001.

In 2001, the Company and CoreComm entered into a
license agreement whereby the Company was granted an exclusive,
irrevocable, perpetual license to certain billing software
developed by CoreComm for telephony rating, digital television
events rating, fraud management and other tasks. The sales price
was cash of $9.8 million for the development costs expended
by CoreComm plus a fixed amount of $3.0 million
representing the one-time perpetual license fee. The billing
software was being used by the Company at the time of this
agreement, and was being maintained and modified by CoreComm
under an ongoing software maintenance and development
outsourcing arrangement between the companies.

On September 28, 2001, the Company loaned
NTL Incorporated $150.0 million in cash and received 15.0%
Promissory Notes due September 30, 2004. Interest is
payable monthly in cash at a rate of 15.0% per annum beginning
on October 31, 2001.

At December 31, 2001 and 2000, the Company
had a receivable from CoreComm of $1.1 million and a
payable to CoreComm of $17.1 million, respectively. The
2000 payable balance primarily related to services and other
charges billed in advance in October and November 2000 of
$15.8 million.

16.     Shareholders
Equity

Sales of Preferred Stock and
Warrants

In January 1999, the Company received
$500.0 million in cash from Microsoft Corp.
(Microsoft) in exchange for 500,000 shares of the
Companys 5.25% Convertible Preferred Stock and warrants to
purchase 1.9 million shares of the Companys common
stock at an exercise price of $53.76 per share (as adjusted for
stock splits in 1999 and 2000).

Series Preferred Stock

In February 1997, the Company issued 100,000
shares of its 13% Senior Redeemable Exchangeable Preferred Stock.

In September 1998, the Company issued 125,000
shares of 9.9% Non-voting Mandatorily Redeemable Preferred
Stock, Series A (the Series A Preferred
Stock) in connection with an acquisition. Each share of
Series A Preferred Stock had a stated value of $1,000.
Cumulative dividends accrued at 9.9% of the stated value per
share. Dividends were payable when and if declared by the Board
of Directors.

In December 1998, the Company issued 52,000
shares of 9.9% Non-voting Mandatorily Redeemable Preferred
Stock, Series B (the Series B Preferred
Stock) in connection with an acquisition. Each share of
Series B Preferred Stock had a stated value of $1,000.
Cumulative dividends accrued at 9.9% of the stated value per
share. Dividends were payable when and if declared by the Board
of Directors.

F-29



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The changes in the number of shares of
Series Preferred Stock were as follows:

|                                          |  |     |          |          |  |          |          |       |  |  |         |   |  |  |          |  
|----------------------------------------- |  | --- | -------- | -------- |  | -------- | -------- | ----- |  |  | ------- | - |  |  | -------- | -
|                                          |  |     |          | 9.9%     |  | 9.9%     |          |      
|                                          |  | 13% |          | Series A |  | Series B |          | 5.25%
|                                          |  |     |          |          |  |          |          |      
|Balance, December 31, 1997                |  |     | 110,000  |          |  |          |         |       |  |  |        |   |  |  |         |  
|Issued for acquisitions                   |  |     |         |          |  |          | 125,000  |       |  |  | 52,000  |   |  |  |         |  
|Issued for dividends                      |  |     | 15,000   |          |  |          |         |       |  |  |        |   |  |  |         |  
|                                          |  |     |          |          |  |          |          |       |  |  |         |   |  |  |          |  
|Balance, December 31, 1998                |  |     | 125,000  |          |  |          | 125,000  |       |  |  | 52,000  |   |  |  |         |  
|Issued for cash                           |  |     |         |          |  |          |         |       |  |  |        |   |  |  | 500,000  |  
|Issued for dividends                      |  |     | 3,000    |          |  |          |         |       |  |  |        |   |  |  | 4,000    |  
|Corporate restructuring                   |  |     | (128,000 | )        |  |          | (125,000 | )     |  |  | (52,000 | ) |  |  | (504,000 | )
|                                          |  |     |          |          |  |          |          |       |  |  |         |   |  |  |          |  
|Balance, December 31, 2001, 2000 and 1999 |  |     |         |          |  |          |         |       |  |  |        |   |  |  |         |  
|                                          |  |     |          |          |  |          |          |       |  |  |         |   |  |  |          |  

Stock Options

The Companys employees participate in the
following NTL Incorporated stock option plans.

There are 3,848,000 shares and 10,396,000 shares
of common stock reserved for issuance under the 1991 Stock
Option Plan and the 1993 Stock Option Plan, respectively. These
plans provide that incentive stock options (ISOs) be
granted at the fair market value of NTL Incorporateds
common stock on the date of grant, and nonqualified stock
options (NQSOs) be granted at not less than 85% of
the fair market value of NTL Incorporateds common stock on
the date of grant. Options are exercisable as to 20% of the
shares subject thereto on the date of grant and become
exercisable as to an additional 20% of the shares subject
thereto on each January 1 thereafter, while the optionee remains
an employee of the Company. Options will expire ten years after
the date of the grant. No additional options will be granted
under these plans.

There are 156,000 shares and 500,000 shares of
common stock reserved for issuance under 1991 and 1993
Non-Employee Director Stock Option Plans, respectively. Under
the terms of these plans, options will be granted to members of
the Board of Directors who are not employees of the Company or
any of its affiliates. These plans provide that all options be
granted at the fair market value of NTL Incorporateds
common stock on the date of grant, and options will expire ten
years after the date of the grant. Options are exercisable as to
20% of the shares subject thereto on the date of grant and
become exercisable as to an additional 20% of the shares subject
thereto on each subsequent anniversary of the grant date while
the optionee remains a director of the Company. Options will
expire ten years after the date of the grant. No additional
options will be granted under these plans.

There are 83,438,000 shares of common stock
reserved for issuance under the 1998 Non-Qualified Stock Option
Plan, and there are 19,684,000 shares available for issuance at
December 31, 2000. The exercise price of a NQSO shall be
determined by the Compensation and Option Committee. Options are
generally exercisable ratably over five to ten years while the
optionee remains an employee of the Company. Options will expire
ten years after the date of the grant.

There were 13.7 million, 34.8 million
and 6.4 million options granted under these plans for the
years ended December 31, 2001, 2000 and 1999, respectively.

Pro forma information regarding net loss and net
loss per share is required by SFAS No. 123, and has been
determined as if the Company had accounted for NTL Inc.s
employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the
date of grant using the Black-Scholes option pricing model with
the following weighted-average assumptions for 2001, 2000 and
1999: risk-free interest rates of 4.47%, 5.30% and 6.81%,
respectively, dividend yield of 0%, volatility factor of the

F-30



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

expected market price of NTL Incorporated common
stock of .702, .385 and .336, respectively, and a
weighted-average expected life of the option of 10 years.

The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded
options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected
stock price volatility. Because NTL Incorporated stock options
have characteristics significantly different from those of
traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, in
managements opinion, the existing models do not
necessarily provide a reliable single measure of the fair value
of its stock options.

For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense over
the options vesting period. The effects of applying SFAS
No. 123 on pro forma disclosures of net loss for the years
ended December 31, 2001, 2000 and 1999 are not likely to be
representative of the pro forma effects on net loss in
future years. Following is the Companys pro forma
information as if the Company and not NTL Incorporated had
issued the stock options:

|                     |  |                         |           |      |  |      |          |   |  |   |        |  
|-------------------- |  | ----------------------- | --------- | ---- |  | ---- | -------- | - |  | - | ------ | -
|                     |  |                        
|                     |  | Year Ended December 31,
|                     |  |                        
|                     |  | 2001                    |           | 2000 |  | 1999
|                     |  |                         |           |      |  |     
|                     |  |                        
|                     |  | (In millions)          
|Pro forma net (loss) |  | $                       | (12,096.9 | )    |  | $    | (2,636.7 | ) |  | $ | (799.8 | )

17.     Employee
Benefit Plans

Certain subsidiaries of the Company operate
defined benefit pension plans in the United Kingdom. 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
attained age 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.

At December 31, 2001, the projected benefit
obligation of NTL Business defined benefit pension plan
exceeded the fair value of its plan assets by $3.0 million.

|                                        |  |               |       |      |  |   |       |  
|--------------------------------------- |  | ------------- | ----- | ---- |  | - | ----- | -
|                                        |  |              
|                                        |  | Year Ended   
|                                        |  | December 31, 
|                                        |  |              
|                                        |  | 2001          |       | 2000
|                                        |  |               |       |     
|                                        |  |              
|                                        |  | (In millions)
|Change in benefit obligation            |  |               |       |      |  |   |       |  
|Benefit obligation at beginning of year |  | $             | 201.8 |      |  | $ | 197.1 |  
|Service cost                            |  |               | 9.9   |      |  |   | 10.7  |  
|Interest cost                           |  |               | 11.3  |      |  |   | 11.3  |  
|Actuarial (gains) losses                |  |               | (7.0  | )    |  |   | 0.2   |  
|Benefits paid                           |  |               | (6.3  | )    |  |   | (5.7  | )
|Foreign currency exchange rate changes  |  |               | (9.4  | )    |  |   | (11.8 | )
|                                        |  |               |       |      |  |   |       |  
|Benefit obligation at end of year       |  | $             | 200.3 |      |  | $ | 201.8 |  
|                                        |  |               |       |      |  |   |       |  

F-31



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                               |  |               |       |      |  |   |       |  
|---------------------------------------------- |  | ------------- | ----- | ---- |  | - | ----- | -
|                                               |  |              
|                                               |  | Year Ended   
|                                               |  | December 31, 
|                                               |  |              
|                                               |  | 2001          |       | 2000
|                                               |  |               |       |     
|                                               |  |              
|                                               |  | (In millions)
|Change in plan assets                          |  |               |       |      |  |   |       |  
|Fair value of plan assets at beginning of year |  | $             | 269.1 |      |  | $ | 278.4 |  
|Actual return on plan assets                   |  |               | (31.0 | )    |  |   | 2.0   |  
|Company contributions                          |  |               | 8.0   |      |  |   | 8.6   |  
|Plan participants contributions               |  |               | 3.0   |      |  |   | 3.4   |  
|Benefits paid                                  |  |               | (6.3  | )    |  |   | (5.7  | )
|Foreign currency exchange rate changes         |  |               | (13.6 | )    |  |   | (17.6 | )
|                                               |  |               |       |      |  |   |       |  
|Fair value of plan assets at end of year       |  | $             | 229.2 |      |  | $ | 269.1 |  
|                                               |  |               |       |      |  |   |       |  
|Funded status of the plan                      |  | $             | 28.9  |      |  | $ | 67.3  |  
|Unrecognized net actuarial gains               |  |               | (12.4 | )    |  |   | (62.0 | )
|Unrecognized transition obligation             |  |               | 5.0   |      |  |   | 6.8   |  
|                                               |  |               |       |      |  |   |       |  
|Prepaid benefit cost                           |  | $             | 21.5  |      |  | $ | 12.1  |  
|                                               |  |               |       |      |  |   |       |  

|                       |                                                  |                         |  |               |  |  |  |               | 
|---------------------- | ------------------------------------------------ | ----------------------- |  | ------------- |  |  |  | ------------- | 
|                       |                                                  |                        
|                       |                                                  | Year Ended December 31,
|                       |                                                  |                        
|                       |                                                  | 2001                    |  | 2000         
|                       |                                                  |                         |  |              
|Actuarial assumptions: |                                                  |                         |  |               |  |  |  |              
|                       | Weighted average discount rate                   |                         |  | 6.00%         |  |  |  | 6.00%         | 
|                       | Weighted average rate of compensation increase   |                         |  | 3.50% - 4.00% |  |  |  | 3.50% - 4.25% | 
|                       | Expected long-term rate of return on plan assets |                         |  | 7.00% - 7.50% |  |  |  | 7.50% - 7.75% | 

The components of net pension costs are as
follows:

|                              |  |                         |       |      |  |      |       |   |  |   |       |  
|----------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                              |  |                        
|                              |  | Year Ended December 31,
|                              |  |                        
|                              |  | 2001                    |       | 2000 |  | 1999
|                              |  |                         |       |      |  |     
|                              |  |                        
|                              |  | (In millions)          
|Service cost                  |  | $                       | 9.9   |      |  | $    | 10.7  |   |  | $ | 12.0  |  
|Interest cost                 |  |                         | 11.3  |      |  |      | 11.3  |   |  |   | 12.0  |  
|Actual return on plan assets  |  |                         | 31.0  |      |  |      | (2.0  | ) |  |   | (43.1 | )
|Net amortization and deferral |  |                         | (51.9 | )    |  |      | (20.6 | ) |  |   | 26.8  |  
|                              |  |                         |       |      |  |      |       |   |  |   |       |  
|                              |  | $                       | 0.3   |      |  | $    | (0.6  | ) |  | $ | 7.7   |  
|                              |  |                         |       |      |  |      |       |   |  |   |       |  

18.     Leases

A summary of assets held under capital lease are
as follows (in millions):

|                               |  |              |       |      |  |   |       |  
|------------------------------ |  | ------------ | ----- | ---- |  | - | ----- | -
|                               |  |             
|                               |  | December 31,
|                               |  |             
|                               |  | 2001         |       | 2000
|                               |  |              |       |     
|Land, buildings and equipment  |  | $            | 100.2 |      |  | $ | 95.8  |  
|Less: accumulated depreciation |  |              | (28.5 | )    |  |   | (22.2 | )
|                               |  |              |       |      |  |   |       |  
|                               |  | $            | 71.7  |      |  | $ | 73.6  |  
|                               |  |              |       |      |  |   |       |  

F-32



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Future minimum annual payments at
December 31, 2001 are as follows (in millions). The table
reflects the Companys contractual obligations, but the
entire obligation has been classified as current.

|                                         |  |         |        |           |  |   |       | 
|---------------------------------------- |  | ------- | ------ | --------- |  | - | ----- | 
|                                         |  | Capital |        | Operating
|                                         |  | Leases  |        | Leases   
|                                         |  |         |        |          
|Year ending December 31:                 |  |         |        |           |  |   |       | 
|2002                                     |  | $       | 9.3    |           |  | $ | 82.9  | 
|2003                                     |  |         | 8.2    |           |  |   | 61.2  | 
|2004                                     |  |         | 7.3    |           |  |   | 43.5  | 
|2005                                     |  |         | 6.5    |           |  |   | 32.4  | 
|2006                                     |  |         | 6.2    |           |  |   | 31.2  | 
|Thereafter                               |  |         | 155.2  |           |  |   | 225.7 | 
|                                         |  |         |        |           |  |   |       | 
|Total minimum lease payments             |  |         | 192.7  |           |  | $ | 476.9 | 
|                                         |  |         |        |           |  |   |       | 
|Less: amount representing interest       |  |         | (129.8 | )         |  |   |       | 
|                                         |  |         |        |           |  |   |       | 
|Present value of net minimum obligations |  |         | 62.9   |           |  |   |       | 
|Less: current portion                    |  |         | (62.9  | )         |  |   |       | 
|                                         |  |         |        |           |  |   |       | 
|                                         |  | $       |       |           |  |   |       | 
|                                         |  |         |        |           |  |   |       | 

Leases for buildings, office space and equipment
extend through 2031. Total rental expense for the years ended
December 31, 2001, 2000 and 1999 under operating leases was
$74.5 million, $46.2 million and $27.5 million,
respectively.

19.     Commitments
and Contingent Liabilities

At December 31, 2001, the Company was
committed to pay approximately $1,367.0 million for
equipment and services, which includes approximately
$1,061.0 million for certain operations and maintenance
contracts through 2006.

The Company had certain exclusive local delivery
operator licenses for Northern Ireland and other franchise areas
in the United Kingdom. Pursuant to these licenses, various
subsidiaries of the Company were required to make monthly cash
payments to the Independent Television Commission
(ITC) during the 15-year license terms. Upon a
request by the Company in 1999, the ITC converted all of the
Companys fee bearing exclusive licenses to non-exclusive
licenses by the end of 1999. In 1999, the Company paid
$30.1 million in connection with these licenses. Since the
Companys liability for the license payments ceased upon
the conversion, in 1999 the Company reversed an accrual for
franchise fees of $13.6 million.

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.

20.     Industry
Segments

The Company has four reportable segments:
Broadcast Services, Consumer Services, Business Services and
Shared Services. The Broadcast Services segment operates in the
United Kingdom and includes digital and analog television and
radio broadcasting, rental of antenna space on the
Companys owned and leased towers and sites and associated
services, and satellite and media services. Consumer Services
include telephony, cable television, Internet access and
interactive services in regional franchise areas in the United
Kingdom and Ireland. The Business Services segment operates
primarily in the United Kingdom and includes telephony, national
and international wholesale carrier telecommunications, and
radio communications

F-33



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

services to the emergency services community.
Shared Services principally include network and information
technology management, finance, human resources and facilities
management. Shared Services also includes assets and related
depreciation and amortization that are not allocated to another
segment.

The accounting policies of the segments are the
same as those described in the Significant Accounting Policies
note. The Companys management evaluates segment
performance based on various financial and non-financial
measurements. The Companys primary measure of profit or
loss is EBITDA. The results of operations data utilized in
financial measurements are revenues and EBITDA, which is
earnings before interest, taxes, depreciation and amortization,
franchise fees, non-cash compensation, other charges, corporate
expenses, asset impairments, share of (losses) from equity
investments, other (losses) gains, foreign currency transactions
gains (losses) and extraordinary items. Certain selling, general
and administrative expenses are allocated to segments based on
revenues. Management does not allocate costs of shared services
departments and jointly used assets for purposes of measuring
segment performance. The reportable segments are strategic
business units that are managed separately and offer different
services.

|                                   |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|---------------------------------- |  | ------------- | ----- | -------- |  | -------- | -------- | ------ |  | ----- | ------- |  |  | - | ------- | - |  | - | -------- | 
|                                   |  | Broadcast     |       | Consumer |  | Business |          | Shared |  | Total
|                                   |  |               |       |          |  |          |          |        |  |      
|                                   |  |              
|                                   |  | (In millions)
|Year ended December 31, 2001       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 283.6 |          |  | $        | 2,069.2  |        |  | $     | 836.8   |  |  | $ |        |   |  | $ | 3,189.6  | 
|Depreciation and amortization      |  |               | 76.0  |          |  |          | 1,840.5  |        |  |       | 587.9   |  |  |   | 35.9    |   |  |   | 2,540.3  | 
|EBITDA(1)                          |  |               | 143.9 |          |  |          | 738.7    |        |  |       | 335.2   |  |  |   | (565.7  | ) |  |   | 652.1    | 
|Expenditures for long-lived assets |  |               | 75.3  |          |  |          | 823.9    |        |  |       | 171.9   |  |  |   | 577.3   |   |  |   | 1,648.4  | 
|Total assets(2)                    |  |               | 792.5 |          |  |          | 8,008.0  |        |  |       | 3,287.0 |  |  |   | 938.6   |   |  |   | 13,026.1 | 
|Year ended December 31, 2000       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 263.8 |          |  | $        | 1,518.2  |        |  | $     | 702.2   |  |  | $ |        |   |  | $ | 2,484.2  | 
|Depreciation and amortization      |  |               | 53.2  |          |  |          | 1,443.6  |        |  |       | 184.2   |  |  |   | 19.7    |   |  |   | 1,700.7  | 
|EBITDA(1)                          |  |               | 130.3 |          |  |          | 410.8    |        |  |       | 232.4   |  |  |   | (481.6  | ) |  |   | 291.9    | 
|Expenditures for long-lived assets |  |               | 70.0  |          |  |          | 1,088.5  |        |  |       | 724.6   |  |  |   | 276.1   |   |  |   | 2,159.2  | 
|Total assets(3)                    |  |               | 804.8 |          |  |          | 17,910.7 |        |  |       | 3,746.0 |  |  |   | 685.0   |   |  |   | 23,146.5 | 
|Year ended December 31, 1999       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 257.3 |          |  | $        | 827.3    |        |  | $     | 452.5   |  |  | $ |        |   |  | $ | 1,537.1  | 
|Depreciation and amortization      |  |               | 52.7  |          |  |          | 580.0    |        |  |       | 104.1   |  |  |   | 28.9    |   |  |   | 765.7    | 
|EBITDA(1)                          |  |               | 140.4 |          |  |          | 245.0    |        |  |       | 106.6   |  |  |   | (279.3  | ) |  |   | 212.7    | 
|Expenditures for long-lived assets |  |               | 69.6  |          |  |          | 590.5    |        |  |       | 356.7   |  |  |   | 124.5   |   |  |   | 1,141.3  | 
|Total assets(4)                    |  |               | 698.4 |          |  |          | 6,646.5  |        |  |       | 1,319.1 |  |  |   | 1,069.0 |   |  |   | 9,733.0  | 



---



|    |                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents earnings before interest, taxes,
	depreciation and amortization, franchise fees, non-cash
	compensation, other charges, corporate expenses, asset
	impairments, share of (losses) from equity investments,
	other (losses) gains, foreign currency transaction gains
	(losses) and extraordinary items.
|   
|(2) | At December 31, 2001, shared assets included
	$189.8 million of cash and cash equivalents and $748.8 million
	in other assets.                                                                                                                                                                                    
|   
|(3) | At December 31, 2000, shared assets included
	$355.0 million of cash and cash equivalents and
	$330.0 million of other assets.                                                                                                                                                                                    
|   
|(4) | At December 31, 1999, shared assets included
	$828.6 million of cash, cash equivalents and marketable
	securities and $240.4 million in other assets.                                                                                                                                                             

F-34



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The reconciliation of segment combined EBITDA to
loss before income taxes and extraordinary item is as follows:

|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |        |  
|----------------------------------------------- | ------------------------------------------- | ----------------------- | --------- | ------- | - | ---- | -------- | ------- | - | - | ------ | ------ | -
|                                                |                                             |                        
|                                                |                                             | Year Ended December 31,
|                                                |                                             |                        
|                                                |                                             | 2001                    |           | 2000    |   | 1999
|                                                |                                             |                         |           |         |   |     
|                                                |                                             |                        
|                                                |                                             | (In millions)          
|Segment Combined EBITDA                         |                                             | $                       | 652.1     |         |   | $    | 291.9    |         |   | $ | 212.7  |       
|(Add) Deduct:                                   |                                             |                         |           |         |   |      |          |         |   |   |        |       
|                                                | Franchise fees                              |                         |           |        |   |      |          |        |   |   |        | 16.5   |  
|                                                | Non-cash compensation                       |                         |           | 30.6    |   |      |          |        |   |   |        |       |  
|                                                | Other charges                               |                         |           | 297.9   |   |      |          | 92.7    |   |   |        | 16.2   |  
|                                                | Corporate expenses                          |                         |           | 24.3    |   |      |          | 23.7    |   |   |        | 25.3   |  
|                                                | Asset impairments                           |                         |           | 8,161.6 |   |      |          |        |   |   |        |       |  
|                                                | Depreciation and amortization               |                         |           | 2,540.3 |   |      |          | 1,700.7 |   |   |        | 765.7  |  
|                                                | Interest income and other, net              |                         |           | (34.7   | ) |      |          | (25.8   | ) |   |        | (48.2  | )
|                                                | Interest expense                            |                         |           | 1,240.8 |   |      |          | 886.3   |   |   |        | 678.1  |  
|                                                | Shares of losses from equity investments    |                         |           | 22.3    |   |      |          | 24.2    |   |   |        | 18.4   |  
|                                                | Other losses (gains)                        |                         |           | 88.5    |   |      |          |        |   |   |        | (493.1 | )
|                                                | Foreign currency transaction (gains) losses |                         |           | (0.6    | ) |      |          | 58.1    |   |   |        | (22.8  | )
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       
|                                                |                                             |                         | 12,371.0  |         |   |      | 2,759.9  |         |   |   | 956.1  |       
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       
|Loss before income taxes and extraordinary item |                                             | $                       | (11,718.9 | )       |   | $    | (2,468.0 | )       |   | $ | (743.4 | )     
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       

21.     Geographic
Information

|                  |  |               |       |                |  |         |          |       |  |   |       |  |  |   |          | 
|----------------- |  | ------------- | ----- | -------------- |  | ------- | -------- | ----- |  | - | ----- |  |  | - | -------- | 
|                  |  | United States |       | United Kingdom |  | Ireland |          | Total
|                  |  |               |       |                |  |         |          |      
|                  |  |               |       |                |  |        
|                  |  |               |       | (In millions)  |  |        
|2001              |  |               |       |                |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |                |  | $       | 3,127.3  |       |  | $ | 62.3  |  |  | $ | 3,189.6  | 
|Long-lived assets |  |               | 151.3 |                |  |         | 11,703.3 |       |  |   | 162.6 |  |  |   | 12,017.2 | 
|2000              |  |               |       |                |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |                |  | $       | 2,423.0  |       |  | $ | 61.2  |  |  | $ | 2,484.2  | 
|Long-lived assets |  |               | 1.6   |                |  |         | 21,660.1 |       |  |   | 155.4 |  |  |   | 21,815.5 | 
|1999              |  |               |       |                |  |         |          |       |  |   |       |  |  |   |          | 
|                  |  |               |       |                |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |                |  | $       | 1,505.9  |       |  | $ | 31.2  |  |  | $ | 1,537.1  | 
|Long-lived assets |  |               | 1.6   |                |  |         | 8,143.6  |       |  |   | 148.0 |  |  |   | 8,293.2  | 

F-35



---



##### 



NTL COMMUNICATIONS CORP.

SCHEDULE I-CONDENSED FINANCIAL INFORMATION OF
REGISTRANT

CONSOLIDATED BALANCE SHEETS

|                                                                                                   |                                        |               |          |           |   |   |          |          |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------- | -------- | --------- | - | - | -------- | -------- | -
|                                                                                                   |                                        |              
|                                                                                                   |                                        | December 31, 
|                                                                                                   |                                        |              
|                                                                                                   |                                        | 2001          |          | 2000     
|                                                                                                   |                                        |               |          |          
|                                                                                                   |                                        |              
|                                                                                                   |                                        | (In millions)
|ASSETS                                                                                             |                                        |               |          |           |   |   |          |         
|Current assets:                                                                                    |                                        |               |          |           |   |   |          |         
|                                                                                                   | Cash and cash equivalents              |               | $        | 78.5      |   |   | $        | 168.2    |  
|                                                                                                   | Other                                  |               |          | 12.9      |   |   |          | 10.5     |  
|                                                                                                   |                                        |               |          |           |   |   |          |         
|Total current assets                                                                               |                                        |               | 91.4     |           |   |   | 178.7    |         
|                                                                                                  
|Office improvements and equipment, net of
	accumulated depreciation of $1.7 (2001) and $1.2 (2000) |                                        |               | 1.2      |           |   |   | 1.6      |         
|Investments in and loans to affiliates, net                                                        |                                        |               | 4,461.3  |           |   |   | 15,188.5 |         
|Deferred financing costs, net of accumulated
	amortization of $75.9 (2001) and $51.4 (2000)        |                                        |               | 154.1    |           |   |   | 136.6    |         
|Note receivable from NTL Incorporated                                                              |                                        |               | 150.0    |           |   |   |         |         
|                                                                                                   |                                        |               |          |           |   |   |          |         
|Total assets                                                                                       |                                        | $             | 4,858.0  |           |   | $ | 15,505.4 |         
|                                                                                                   |                                        |               |          |           |   |   |          |         
|                                                                                                  
|LIABILITIES AND SHAREHOLDERS
	(DEFICIENCY) EQUITY                                                 |                                        |               |          |           |   |   |          |         
|Current liabilities                                                                                |                                        | $             | 8,037    |           |   | $ | 96.8     |         
|Long-term debt                                                                                     |                                        |               |         |           |   |   | 6,396.4  |         
|                                                                                                  
|Shareholders (deficiency) equity:                                                                 |                                        |               |          |           |   |   |          |         
|                                                                                                   | Common stock                           |               |          |          |   |   |          |         |  
|                                                                                                   | Additional paid-in capital             |               |          | 13,917.7  |   |   |          | 13,746.7 |  
|                                                                                                   | Accumulated other comprehensive (loss) |               |          | (904.5    | ) |   |          | (379.3   | )
|                                                                                                   | (Deficit)                              |               |          | (16,192.2 | ) |   |          | (4,355.2 | )
|                                                                                                   |                                        |               |          |           |   |   |          |         
|                                                                                                   |                                        |               | (3,179.0 | )         |   |   | 9,012.2  |         
|                                                                                                   |                                        |               |          |           |   |   |          |         
|Total liabilities and shareholders
	(deficiency) equity                                           |                                        | $             | 4,858.0  |           |   | $ | 15,505.4 |         
|                                                                                                   |                                        |               |          |           |   |   |          |         

See accompanying notes.

F-36



---



##### 



NTL COMMUNICATIONS CORP.

SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|---------------------------------------------------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | -------- | - |  | - | ------ | -
|                                                                                         |  |                        
|                                                                                         |  | Year Ended December 31,
|                                                                                         |  |                        
|                                                                                         |  | 2001                    |           | 2000 |  | 1999
|                                                                                         |  |                         |           |      |  |     
|                                                                                         |  |                        
|                                                                                         |  | (In millions)          
|Costs and expenses                                                                       |  |                         |           |      |  |      |          |   |  |   |        |  
|Corporate expenses                                                                       |  | $                       | 24.5      |      |  | $    | 23.6     |   |  | $ | 22.7   |  
|General and administrative expenses                                                      |  |                         | 3.2       |      |  |      | 5.9      |   |  |   |       |  
|Asset impairments                                                                        |  |                         | 1.0       |      |  |      |         |   |  |   |       |  
|Non-cash compensation                                                                    |  |                         | 30.6      |      |  |      |         |   |  |   |       |  
|Depreciation and amortization                                                            |  |                         | 25.0      |      |  |      | 19.7     |   |  |   | 18.3   |  
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|Operating (loss)                                                                         |  |                         | (84.3     | )    |  |      | (49.2    | ) |  |   | (41.0  | )
|Other income (expense)                                                                   |  |                         |           |      |  |      |          |   |  |   |        |  
|Interest income and other, net                                                           |  |                         | 26.9      |      |  |      | 14.4     |   |  |   | 121.6  |  
|Interest expense                                                                         |  |                         | (762.8    | )    |  |      | (599.4   | ) |  |   | (529.5 | )
|Foreign currency transaction gains                                                       |  |                         | 58.2      |      |  |      | 67.8     |   |  |   | 21.9   |  
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|(Loss) before income taxes, extraordinary item
	and equity in net (loss) of subsidiaries |  |                         | (762.0    | )    |  |      | (566.4   | ) |  |   | (427.0 | )
|Income tax expense                                                                       |  |                         |          |      |  |      |         |   |  |   | (1.0   | )
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|(Loss) before extraordinary item and equity in
	net (loss) of subsidiaries               |  |                         | (762.0    | )    |  |      | (566.4   | ) |  |   | (428.0 | )
|Loss from early extinguishment of debt                                                   |  |                         |          |      |  |      |         |   |  |   | (3.0   | )
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|(Loss) before equity in net (loss) of subsidiaries                                       |  |                         | (762.0    | )    |  |      | (566.4   | ) |  |   | (431.0 | )
|Equity in net (loss) of subsidiaries                                                     |  |                         | (11,075.0 | )    |  |      | (1,821.7 | ) |  |   | (285.5 | )
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  
|Net (loss)                                                                               |  | $                       | (11,837.0 | )    |  | $    | (2,388.1 | ) |  | $ | (716.5 | )
|                                                                                         |  |                         |           |      |  |      |          |   |  |   |        |  

See accompanying notes.

F-37



---



##### 



NTL COMMUNICATIONS CORP.

SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|----------------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                                                                              |  |                        
|                                                                              |  | Year Ended December 31,
|                                                                              |  |                        
|                                                                              |  | 2001                    |          | 2000 |  | 1999
|                                                                              |  |                         |          |      |  |     
|                                                                              |  |                        
|                                                                              |  | (In millions)          
|Net cash (used in) operating activities                                       |  | $                       | (399.0   | )    |  | $    | (293.8   | ) |  | $ | (118.3   | )
|                                                                             
|Investing activities                                                          |  |                         |          |      |  |      |          |   |  |   |          |  
|Purchase of office improvements and equipment                                 |  |                         | (0.1     | )    |  |      | (0.5     | ) |  |   | (0.9     | )
|Purchase of marketable securities                                             |  |                         | (9.9     | )    |  |      |         |   |  |   | (354.5   | )
|Proceeds from sales of marketable securities                                  |  |                         | 10.0     |      |  |      | 5.0      |   |  |   | 618.6    |  
|Loan to NTL Incorporated                                                      |  |                         | (150.0   | )    |  |      |         |   |  |   |         |  
|Increase in investments in and loans to affiliates                            |  |                         | (956.8   | )    |  |      | (5,953.2 | ) |  |   | (1,164.8 | )
|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|Net cash (used in) investing activities                                       |  |                         | (1,106.8 | )    |  |      | (5,948.7 | ) |  |   | (901.6   | )
|                                                                             
|Financing activities                                                          |  |                         |          |      |  |      |          |   |  |   |          |  
|Distribution to NTL (Delaware), Inc.                                          |  |                         | (10.6    | )    |  |      |         |   |  |   | (500.0   | )
|Contributions from NTL (Delaware), Inc.                                       |  |                         | 40.8     |      |  |      | 5,227.2  |   |  |   | 167.6    |  
|Proceeds from borrowings, net of financing costs                              |  |                         | 1,385.9  |      |  |      | 476.3    |   |  |   | 1,846.0  |  
|Proceeds from issuance of preferred stock and
	warrants                       |  |                         |         |      |  |      |         |   |  |   | 500.0    |  
|Principal payments                                                            |  |                         |         |      |  |      | (73.7    | ) |  |   | (730.3   | )
|Proceeds from exercise of stock options and
	warrants                         |  |                         |         |      |  |      |         |   |  |   | 12.1     |  
|Cash released from (placed in) escrow for debt
	repayment                     |  |                         |         |      |  |      | 77.5     |   |  |   | (87.0    | )
|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|Net cash provided by financing activities                                     |  |                         | 1,416.1  |      |  |      | 5,707.3  |   |  |   | 1,208.4  |  
|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|(Decrease) increase in cash and cash equivalents                              |  |                         | (89.7    | )    |  |      | (535.2   | ) |  |   | 188.5    |  
|Cash and cash equivalents at beginning of year                                |  |                         | 168.2    |      |  |      | 703.4    |   |  |   | 514.9    |  
|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|Cash and cash equivalents at end of year                                      |  | $                       | 78.5     |      |  | $    | 168.2    |   |  | $ | 703.4    |  
|                                                                              |  |                         |          |      |  |      |          |   |  |   |          |  
|Supplemental disclosure of cash flow
	information                             |  |                         |          |      |  |      |          |  
|Cash paid for interest                                                        |  | $                       | 424.3    |      |  | $    | 240.2    |   |  | $ | 209.1    |  
|Income taxes paid                                                             |  |                         |         |      |  |      | 0.4      |   |  |   |         |  
|Supplemental schedule of non-cash financing
	activities                       |  |                         |          |      |  |      |          |  
|Accretion of dividends and discount on preferred
	stock                       |  | $                       |         |      |  | $    |         |   |  | $ | 8.6      |  
|Conversion of Convertible Notes, net of
	unamortized deferred financing costs |  |                         | 109.5    |      |  |      |         |   |  |   | 269.3    |  
|Contribution from NTL (Delaware), Inc.                                        |  |                         | 110.2    |      |  |      |         |   |  |   |         |  
|Common stock and stock options issued for an
	acquisition                     |  | $                       |         |      |  |      |         |   |  |   | 978.0    |  

See accompanying notes.

F-38



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

NOTES TO CONDENSED FINANCIAL
STATEMENTS

1.     Corporate
Restructuring

On May 18, 2000, NTL Incorporated completed
a corporate restructuring to create a holding company structure
in connection with the acquisition of ConsumerCo. The holding
company restructuring was accomplished through a merger so that
all the stockholders of NTL Incorporated at the effective time
of the merger became stockholders of the new holding company,
and NTL Incorporated became a subsidiary of the new holding
company. The new holding company has taken the name NTL
Incorporated and the holding companys subsidiary
simultaneously changed its name to NTL (Delaware), Inc. NTL
Communications Corp. (the Company) is a wholly-owned
subsidiary of NTL (Delaware), Inc.

On February 21, 2001, the Company completed
a transaction whereby it acquired the entire issued share
capital of NTL (CWC Holdings) Limited (the entity that owns
ConsumerCo) from NTL Incorporated and the entire issued share
capital of NTL Business Limited (formerly Workplace Technologies
plc) from NTL (Delaware), Inc. in exchange for shares of its
common stock. As a result of this transaction, ConsumerCo and
NTL Business Limited became wholly-owned subsidiaries of the
Company. The Company accounted for the transaction in a manner
consistent with a transfer of entities under common control,
which is similar to a pooling of interests.
Accordingly, the net assets and results of operations of
ConsumerCo and NTL Business Limited have been included in the
financial statements from their respective dates of acquisition.

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.     Long-Term
Debt

Long-term debt consists of:

|                                                          |  |     |  |               |         |      |  |   |         | 
|--------------------------------------------------------- |  | --- |  | ------------- | ------- | ---- |  | - | ------- | 
|                                                          |  |     |  |              
|                                                          |  |     |  | December 31, 
|                                                          |  |     |  |              
|                                                          |  |     |  | 2001          |         | 2000
|                                                          |  |     |  |               |         |     
|                                                          |  |     |  |              
|                                                          |  |     |  | (In millions)
|12- 3/4% Senior Deferred Coupon Notes                     |  | (a) |  | $             | 277.8   |      |  | $ | 277.8   | 
|11- 1/2% Senior Deferred Coupon Notes                     |  | (b) |  |               | 1,050.0 |      |  |   | 1,040.5 | 
|10% Senior Notes                                          |  | (c) |  |               | 400.0   |      |  |   | 400.0   | 
|9- 1/2% Senior Sterling Notes, less
	unamortized discount |  | (d) |  |               | 181.4   |      |  |   | 186.5   | 
|10- 3/4% Senior Deferred Coupon Sterling
	Notes           |  | (e) |  |               | 382.3   |      |  |   | 353.6   | 
|9- 3/4% Senior Deferred Coupon Notes                      |  | (f) |  |               | 1,153.8 |      |  |   | 1,048.5 | 
|9- 3/4% Senior Deferred Coupon Sterling Notes             |  | (g) |  |               | 385.9   |      |  |   | 360.8   | 
|11- 1/2% Senior Notes                                     |  | (h) |  |               | 625.0   |      |  |   | 625.0   | 
|12- 3/8% Senior Deferred Coupon Notes                     |  | (i) |  |               | 364.9   |      |  |   | 323.6   | 
|7% Convertible Subordinated Notes                         |  | (j) |  |               | 489.8   |      |  |   | 599.3   | 
|9- 1/4% Senior Euro Notes                                 |  | (k) |  |               | 222.5   |      |  |   | 234.7   | 
|9- 7/8% Senior Euro Notes                                 |  | (l) |  |               | 311.5   |      |  |   | 328.6   | 
|11- 1/2% Senior Deferred Coupon Euro Notes                |  | (m) |  |               | 135.6   |      |  |   | 127.9   | 
|11- 7/8% Senior Notes, less unamortized
	discount         |  | (n) |  |               | 490.7   |      |  |   | 489.6   | 
|12- 3/8% Senior Euro Notes, plus unamortized
	premium     |  | (o) |  |               | 267.8   |      |  |   |        | 
|6- 3/4% Convertible Senior Notes                          |  | (p) |  |               | 1,150.0 |      |  |   |        | 
|                                                          |  |     |  |               |         |      |  |   |         | 
|                                                          |  |     |  |               | 7,889.0 |      |  |   | 6,396.4 | 
|Less current portion                                      |  |     |  |               | 7,889.0 |      |  |   |         | 
|                                                          |  |     |  |               |         |      |  |   |         | 
|                                                          |  |     |  | $             |        |      |  | $ | 6,396.4 | 
|                                                          |  |     |  |               |         |      |  |   |         | 

F-39



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

NOTES TO CONDENSED FINANCIAL
STATEMENTS



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | 3.     Long-Term
	Debt (continued)                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|   
|(a) |  | 12- 3/4% Notes due April 15, 2005,
	principal amount at maturity of $277.8 million, interest payable
	semiannually from on October 15, 2000, redeemable at the
	Companys option on or after April 15, 2000;                                                                                                                                                                                                                                   
|   
|(b) |  | 11- 1/2% Notes due February 1, 2006,
	principal amount at maturity of $1,050.0 million, interest
	payable semiannually from August 1, 2001, redeemable at the
	Companys option on or after February 1, 2001;                                                                                                                                                                                                                                  
|   
|(c) |  | 10% Notes due February 15, 2007, principal
	amount at maturity of $400.0 million, interest payable
	semiannually from August 15, 1997, redeemable at the
	Companys option on or after February 15, 2002;                                                                                                                                                                                                                                      
|   
|(d) |  | 9- 1/2% Sterling Notes due April 1,
	2008, principal amount at maturity of £125.0 million
	($181.8 million), interest payable semiannually from
	October 1, 1998, redeemable at the Companys option on
	or after April 1, 2003;                                                                                                                                                                                                               
|   
|(e) |  | 10- 3/4% Sterling Notes due April 1,
	2008, principal amount at maturity of £300.0 million
	($436.3 million), interest payable semiannually beginning on
	October 1, 2003, redeemable at the Companys option on
	or after April 1, 2003;                                                                                                                                                                                                      
|   
|(f) |  | 9- 3/4% Notes due April 1, 2008,
	principal amount at maturity of $1,300.0 million, interest
	payable semiannually beginning on October 1, 2003,
	redeemable at the Companys option on or after
	April 1, 2003;                                                                                                                                                                                                                               
|   
|(g) |  | 9- 3/4% Sterling Notes due April 15,
	2009, principal amount at maturity of £330.0 million
	($479.9 million), interest payable semiannually beginning on
	October 15, 2004, redeemable at the Companys option
	on or after April 15, 2004;                                                                                                                                                                                                    
|   
|(h) |  | 11- 1/2% Notes due October 1, 2008,
	principal amount at maturity of $625.0 million, interest payable
	semiannually from April 1, 1999, redeemable at the
	Companys option on or after October 1, 2003;                                                                                                                                                                                                                                       
|   
|(i) |  | 12- 3/8% Notes due October 1, 2008,
	principal amount at maturity of $450.0 million, interest payable
	semiannually beginning on April 1, 2004, redeemable at the
	Companys option on or after October 1, 2003;                                                                                                                                                                                                                               
|   
|(j) |  | 7% Convertible Notes due December 15, 2008,
	principal amount at maturity of $489.8 million, interest payable
	semiannually from June 15, 1999, convertible into shares of
	NTL Incorporated common stock at a conversion price of $39.20
	per share, redeemable at the Companys option on or after
	December 15, 2001 (there are approximately 12.5 million
	shares of NTL Incorporated common stock reserved for issuance
	upon conversion);
|   
|(k) |  | 9- 1/4% Euro Notes due November 15,
	2006, principal amount at maturity of
	250.0 million
	($222.5 million), interest payable semiannually from
	May 15, 2000;                                                                                                                                                                                                                                                                                
|   
|(l) |  | 9- 7/8% Euro Notes due November 15,
	2009, principal amount at maturity of
	350.0 million
	($311.5 million), interest payable semiannually from
	May 15, 2000, redeemable at the Companys option on or
	after November 15, 2004;                                                                                                                                                                                                             
|   
|(m) |  | 11- 1/2% Deferred Euro Notes due
	November 15, 2009, principal amount at maturity of
	210.0 million
	($186.9 million), interest payable semiannually beginning on
	May 15, 2005, redeemable at the Companys option on or
	after November 15, 2004 and;                                                                                                                                                                                       
|   
|(n) |  | 11- 7/8% Notes due October 1, 2010,
	principal amount at maturity of $500.0 million, interest payable
	semiannually from April 1, 2001, redeemable at the
	Companys option on or after October 1, 2005;                                                                                                                                                                                                                                       
|   
|(o) |  | 12- 3/8% Senior Euro Notes due
	February 1, 2008, issued in January and February 2001,
	principal amount at maturity of
	300.0 million
	($267.0 million), interest payable semiannually from
	August 1, 2001;                                                                                                                                                                                                                                 
|   
|(p) |  | 6- 3/4% Convertible Senior Notes due
	May 15, 2008, issued in May 2001, principal amount at
	maturity of $1,150.0 million, interest payable semiannually from
	November 15, 2001, convertible into shares of                                                                                                                                                                                                                                   

F-40



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

NOTES TO CONDENSED FINANCIAL
STATEMENTS

3.     Long-Term
Debt (continued)



| |  |                                                                                                                                                                                                                                                                
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | NTL Incorporated common stock at a conversion
	price of $32.728 per share, redeemable at the Companys
	option on or after May 20, 2004 (there are approximately
	35.1 million shares of NTL Incorporated common stock reserved
	for issuance upon conversion);

The indentures governing the notes contain
restrictions relating to, among other things:
(i) incurrence of additional indebtedness and issuance of
preferred stock, (ii) dividend and other payment
restrictions and (iii) mergers, consolidations and sales of
assets.

During 2001, 2000 and 1999, the Company
recognized $243.5 million, $334.3 million and $308.1 million,
respectively, of original issue discount as interest expense.

In connection with the Cablelink acquisition, the
Company issued $704.6 million principal amount Senior Increasing
Rate Notes due 2000. In November 1999, the Company received net
proceeds of $720.7 million from the issuance of the 9- 1/4%
Euro Notes, the 9- 7/8% Euro Notes and the 11- 1/2%
Deferred Euro Notes, of which $716.5 million was used to repay
the Senior Increasing Rate Notes plus accrued interest. The
Company recorded an extraordinary loss from the early
extinguishment of the notes of $3.0 million in 1999.

Long-term debt repayments are due as follows (in
millions). The table reflects the Companys contractual
obligations, but the entire obligation has been classified as
current.

|                         |                       |  |   |          |  
|------------------------ | --------------------- |  | - | -------- | -
|Year ending December 31: |                       |  |   |         
|                         | 2002                  |  | $ |         |  
|                         | 2003                  |  |   |         |  
|                         | 2004                  |  |   |         |  
|                         | 2005                  |  |   | 277.8    |  
|                         | 2006                  |  |   | 1,272.5  |  
|                         | Thereafter            |  |   | 6,778.2  |  
|                         |                       |  |   |         
|                         | Total debt repayments |  |   | 8,328.5  |  
|                         | Less: current portion |  |   | (8,328.5 | )
|                         |                       |  |   |         
|                         |                       |  | $ |         |  
|                         |                       |  |   |         

4.     Leases

Leases for office space end in 2004. Total rental
expense for the years ended December 31, 2001, 2000 and
1999 under operating leases was $1.8 million, $2.0 million and
$1.2 million, respectively.

Future minimum lease payments under
noncancellable operating leases as of December 31, 2001 are (in
millions): $77.7 (2002), $56.3 (2003), $39.7 (2004) and $29.7
(2005).

5.     Other

On September 28, 2001, the Company loaned NTL
Incorporated $150.0 million in cash and received 15.0%
Promissory Notes due September 30, 2004. Interest is payable
monthly in cash at a rate of 15.0% per year beginning on
October 31, 2001.

F-41



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES


SCHEDULE I  CONDENSED
FINANCIAL INFORMATION OF
REGISTRANT  (continued)

NOTES TO CONDENSED FINANCIAL
STATEMENTS



5.     Other
(continued)


No cash dividends were paid to the registrant by
subsidiaries for the years ended December 31, 2001, 2000 and
1999.

F-42



---



##### 



NTL COMMUNICATIONS CORP. AND
SUBSIDIARIES

SCHEDULE II  VALUATION
AND QUALIFYING ACCOUNTS

|                             |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |       | 
|---------------------------- | ------------------------------- | ------------ | - | ---------- |  | ---------- | - | ---------------------- |  | --------- | - | - |  |  | - | ----- | ---- |  | - | ----- | 
|                             |                                 |              |   |            |  |            |   |                       
|Col. A                       |                                 | Col. B       |   | Col. C     |  | Col. D     |   | Col. E                
|                             |                                 |              |   |            |  |            |   |                       
|                             |                                 |              |   |            |  |            |   |                       
|                             |                                 |              |   | Additions  |  |            |   |                       
|                             |                                 |              |   |            |  |            |   |                       
|                             |                                 |              |   |            |  | (2)        |   |                        |  |          
|                             |                                 |              |   | (1)        |  | Charged to |   |                        |  |          
|                             |                                 | Balance at   |   | Charged to |  | Other      |   |                        |  | Balance  
|                             |                                 | Beginning of |   | Costs and  |  | Accounts  |   | (Deductions)/Additions |  | at End   
|Description                  |                                 | Period       |   | Expenses   |  | Describe   |   | Describe               |  | of Period
|                             |                                 |              |   |            |  |            |   |                        |  |          
|Year ended December 31, 2001 |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |              | $ | 135.2      |  |            | $ | 58.3                   |  |           | $ |  |  |  | $ | (67.4 | )(b) |  | $ | 126.1 | 
|                             |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      
|Year ended December 31, 2000 |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |              | $ | 84.9       |  |            | $ | 98.5                   |  |           | $ |  |  |  | $ | (48.2 | )(c) |  | $ | 135.2 | 
|                             |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      
|Year ended December 31, 1999 |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |              | $ | 38.5       |  |            | $ | 45.7                   |  |           | $ |  |  |  | $ | 0.7   | (a)  |  | $ | 84.9  | 
|                             |                                 |              |   |            |  |            |   |                        |  |           |   |   |  |  |   |       |      |  |   |      



---



|    |                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Uncollectible accounts written-off, net of
	recoveries of $63.5 million and $3.9 million foreign
	currency translation adjustments.                                                                                                                      
|   
|(b) | Uncollectible accounts written-off, net of
	recoveries of $91.6 million and $5.7 million foreign
	exchange currency translation adjustments, offset by
	$49.1 million allowance for doubtful accounts as of
	acquisition dates of purchased subsidiaries.
|   
|(c) | Uncollectible accounts written-off, net of
	recoveries of $15.1 million and $1.1 million foreign
	currency exchange translation adjustments, offset by
	$16.9 million allowance for doubtful accounts as of
	acquisition dates of purchased subsidiaries.

F-42