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UNITED STATES  SECURITIES AND EXCHANGE COMMISSION





Washington  D.C. 20549





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FORM 10-Q





|Quarterly Report Pursuant to    Section 13 or 15(d)    of the Securities Exchange Act of 1934
|---------------------------------------------------------------------------------------------
|                                                                                             
|For    the quarterly period ended    March 31, 2003                                          
|                                                                                             
|Commission    File Number   0-30673                                                          




NTL EUROPE, INC.


(Exact name of registrant as specified in its charter)





|Delaware                                                          |  | 13-4105887                             
|----------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of    incorporation or organization) |  | (I.R.S. Employer    Identification No.)
|                                                                  |  |                                        
|37    Purchase StreetRye, New York                                |  | 10580                                  
|(Address of principal executive    offices)                       |  | (Zip code)                             




Registrants telephone number, including area code:  (914) 921-1800





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 and 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. YESNO





Indicate by check mark whether the registrant is an accelerated filer  as defined in Rule 12b-2 of the Act.   YESNO





Indicate by check mark whether the registrant has filed all documents  and reports required to be filed by Section 12, 13 or 15(d) of the Securities  Exchange Act of 1934 subsequent to the distribution of securities under a plan  by a court.   YES     NO





Number of shares outstanding at July  23, 2003:  19,657,718 shares of Common  Stock, par value $.01 per share.





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NTL EUROPE, INC.





INDEX TO FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003.





|PART I:      | FINANCIAL INFORMATION                                                                                                               |   
|------------ | ----------------------------------------------------------------------------------------------------------------------------------- | --
|             |                                                                                                                                     |   
|Item 1.      | Financial Statements                                                                                                                |   
|             |                                                                                                                                     |   
|             | Condensed Consolidated Balance Sheets    as of March 31, 2003 (Unaudited) and December 31, 2002 (Audited)                           | 2 
|             |                                                                                                                                     |   
|             | Condensed Consolidated Statements of Operations    for the three months ended March 31, 2003 and 2002 (Unaudited)                   | 4 
|             |                                                                                                                                     |   
|             | Condensed Consolidated Statement of    Shareholders (Deficiency) for the three months ended March 31, 2003 and 2002    (Unaudited) | 5 
|             |                                                                                                                                     |   
|             | Condensed Consolidated Statements of    Cash Flows for the three months ended March 31, 2003 and 2002 (Unaudited)                   | 6 
|             |                                                                                                                                     |   
|             | Notes to Condensed Consolidated Financial    Statements (Unaudited)                                                                 | 8 
|             |                                                                                                                                     |   
|Item 2.      | Managements Discussion and Analysis    of Financial Condition and Results of Operations                                            | 33
|             |                                                                                                                                     |   
|Item 3.      | Quantitative and Qualitative Disclosures    About Market Risk                                                                       | 42
|             |                                                                                                                                     |   
|Item 4.      | Controls and Procedures                                                                                                             | 43
|             |                                                                                                                                     |   
|RISK FACTORS | 44                                                                                                                                 
|             |                                                                                                                                     |   
|PART II:     | OTHER INFORMATION                                                                                                                   |   
|             |                                                                                                                                     |   
|Item 1.      | Legal Proceedings                                                                                                                   | 50
|             |                                                                                                                                     |   
|Item 2.      | Changes in Securities and Use of    Proceeds                                                                                        | 50
|             |                                                                                                                                     |   
|Item 3.      | Defaults Upon Senior Securities                                                                                                     | 51
|             |                                                                                                                                     |   
|Item 4.      | Submission of Matters to a Vote of    Security Holders                                                                              | 51
|             |                                                                                                                                     |   
|Item 5.      | Other Information                                                                                                                   | 51
|             |                                                                                                                                     |   
|Item 6.      | Exhibits and Reports on Form 8-K                                                                                                    | 51
|             |                                                                                                                                     |   
|SIGNATURES   | 52                                                                                                                                 




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|PART I: | FINANCIAL INFORMATION
|------- | ---------------------




Item  1: Financial Statements





NTL  Europe, Inc. and Subsidiaries


Condensed  Consolidated Balance Sheets


(amounts  in millions)





|                                                                                                     |  | March 31,    2003    Reorganized    Company |         |  | December    31,    2002    Predecessor    Company    (see note) |  
|---------------------------------------------------------------------------------------------------- |  | ------------------------------------------- | ------- |  | --------------------------------------------------------------- | -
|                                                                                                     |  |                                             |         |  |                                                                 |  
|                                                                                                     |  | (unaudited)                                 |         |  | (audited)                                                       |  
|Assets                                                                                               |  |                                             |         |  |                                                                 |  
|Current assets:                                                                                      |  |                                             |         |  |                                                                 |  
|Cash and cash    equivalents                                                                         |  | $                                           | 195.9   |  |                                                                 | $
|Marketable securities                                                                                |  |                                             |        |  |                                                                 |  
|Accounts receivable     trade, less allowance for doubtful accounts of $10.1 (2003) and $9.4 (2002) |  |                                             | 84.9    |  |                                                                 |  
|Other                                                                                                |  |                                             | 62.6    |  |                                                                 |  
|Discontinued operations                                                                              |  |                                             |        |  |                                                                 |  
|                                                                                                     |  |                                             |         |  |                                                                 |  
|Total current assets                                                                                 |  |                                             | 343.4   |  |                                                                 |  
|Fixed assets, net                                                                                    |  |                                             | 1,171.9 |  |                                                                 |  
|Goodwill                                                                                             |  |                                             |        |  |                                                                 |  
|Reorganizational value in excess of amounts    allocable to identifiable assets                      |  |                                             | 221.0   |  |                                                                 |  
|Customer lists, net of accumulated amortization of    $2.4 (2003) and $171.4 (2002)                  |  |                                             | 211.8   |  |                                                                 |  
|Investments in and loans to affiliates, net                                                          |  |                                             | 20.9    |  |                                                                 |  
|Deferred tax asset                                                                                   |  |                                             | 91.6    |  |                                                                 |  
|Other assets, net of accumulated amortization of    $62.4 (2002)                                     |  |                                             | 23.3    |  |                                                                 |  
|                                                                                                     |  |                                             |         |  |                                                                 |  
|Total assets                                                                                         |  | $                                           | 2,083.9 |  |                                                                 | $
|                                                                                                     |  |                                             |         |  |                                                                 |  




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NTL Europe, Inc. and Subsidiaries


Condensed Consolidated Balance Sheets - continued


(amounts in millions)








|                                                                                                                                                                                               |  | March 31,    2003    Reorganized Company |          |   | December    31,    2002    Predecessor    Company    (see note) |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | -------- | - | --------------------------------------------------------------- | -
|                                                                                                                                                                                               |  |                                          |          |   |                                                                 |  
|                                                                                                                                                                                               |  | (unaudited)                              |          |   | (audited)                                                       |  
|Liabilities    and shareholders (deficiency)                                                                                                                                                  |  |                                          |          |   |                                                                 |  
|Liabilities not subject to compromise                                                                                                                                                          |  |                                          |          |   |                                                                 |  
|Current liabilities:                                                                                                                                                                           |  |                                          |          |   |                                                                 |  
|Accounts payable                                                                                                                                                                               |  | $                                        | 42.6     |   |                                                                 | $
|Accrued expenses and    other                                                                                                                                                                  |  |                                          | 68.0     |   |                                                                 |  
|Interest payable                                                                                                                                                                               |  |                                          | 6.0      |   |                                                                 |  
|Deferred revenue                                                                                                                                                                               |  |                                          | 196.8    |   |                                                                 |  
|Current portion of    long-term debt                                                                                                                                                           |  |                                          | 2,443.1  |   |                                                                 |  
|Discontinued operations    (including liabilities subject to compromise of $10,157.8)                                                                                                          |  |                                          |         |   |                                                                 |  
|                                                                                                                                                                                               |  |                                          |          |   |                                                                 |  
|Total current liabilities                                                                                                                                                                      |  |                                          | 2,756.5  |   |                                                                 |  
|Other                                                                                                                                                                                          |  |                                          | 135.2    |   |                                                                 |  
|Deferred income taxes                                                                                                                                                                          |  |                                          | 135.8    |   |                                                                 |  
|Liabilities subject to compromise, including    redeemable preferred stock                                                                                                                     |  |                                          |         |   |                                                                 |  
|Commitments and contingent liabilities                                                                                                                                                         |  |                                          |          |   |                                                                 |  
|Mandatorily redeemable preferred stock  authorized    20.0 shares; issued and outstanding 6.9 shares, liquidation preference $343.0                                                           |  |                                          | 110.3    |   |                                                                 |  
|Shareholders (deficiency):                                                                                                                                                                    |  |                                          |          |   |                                                                 |  
|Common stock - $.01 par    value; authorized 60.0 shares; issued and outstanding 19.7 shares (2003);    $.01 par value; authorized 800.0 shares; issued and outstanding 276.6 shares    (2002) |  |                                          | 0.2      |   |                                                                 |  
|Additional paid-in    capital                                                                                                                                                                  |  |                                          |         |   |                                                                 |  
|Accumulated other    comprehensive (loss)                                                                                                                                                      |  |                                          | (12.5    | ) |                                                                 |  
|(Deficit)                                                                                                                                                                                      |  |                                          | (1,041.6 | ) |                                                                 |  
|                                                                                                                                                                                               |  |                                          |          |   |                                                                 |  
|                                                                                                                                                                                               |  |                                          | (1,053.9 | ) |                                                                 |  
|                                                                                                                                                                                               |  |                                          |          |   |                                                                 |  
|Total liabilities and shareholders (deficiency)                                                                                                                                               |  | $                                        | 2,083.9  |   |                                                                 | $
|                                                                                                                                                                                               |  |                                          |          |   |                                                                 |  




See accompanying notes.





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NTL Europe, Inc. and Subsidiaries


Condensed Consolidated Statements of Operations


(unaudited)


(amounts in millions, except per share amounts)





|                                                                                  |  | Three    months ended March 31, |           
|--------------------------------------------------------------------------------- |  | ------------------------------- | ----------
|                                                                                  |  |                                 |           
|                                                                                  |  | 2003                            |           
|                                                                                  |  |                                 |           
|                                                                                  |  | Reorganized    Company          |           
|                                                                                  |  |                                 |           
|Revenues                                                                          |  | $                               | 119.6     
|Costs    and expenses                                                             |  |                                 |           
|Operating expenses (exclusive of depreciation shown    separately below)          |  |                                 | 44.2      
|Selling, general and administrative expenses                                      |  |                                 | 29.8      
|Other charges                                                                     |  |                                 | 3.5       
|Corporate expenses                                                                |  |                                 | 4.7       
|Depreciation                                                                      |  |                                 | 45.7      
|Amortization                                                                      |  |                                 | 2.5       
|                                                                                  |  |                                 |           
|                                                                                  |  |                                 | 130.4     
|                                                                                  |  |                                 |           
|Operating (loss)                                                                  |  |                                 | (10.8     
|Other    income (expense)                                                         |  |                                 |           
|Interest income and other, net                                                    |  |                                 | (0.1      
|Interest expense                                                                  |  |                                 | (1,025.9  
|Share of (losses) from equity investments                                         |  |                                 | (0.4      
|Foreign currency transaction gains                                                |  |                                 | 0.5       
|                                                                                  |  |                                 |           
|(Loss) before recapitalization items, income taxes    and discontinued operations |  |                                 | (1,036.7  
|Recapitalization items, net                                                       |  |                                 |          
|                                                                                  |  |                                 |           
|(Loss) before income taxes and discontinued    operations                         |  |                                 | (1,036.7  
|Income tax benefit (expense)                                                      |  |                                 | (0.7      
|                                                                                  |  |                                 |           
|(Loss) from continuing operations                                                 |  |                                 | (1,037.4  
|Discontinued operations:                                                          |  |                                 |           
|(Loss) from discontinued operations, net of income    tax benefit of $12.5 (2002) |  |                                 |          
|                                                                                  |  |                                 |           
|Net (loss)                                                                        |  |                                 | (1,037.4  
|Preferred stock dividends and accretion                                           |  |                                 | (4.2      
|                                                                                  |  |                                 |           
|Net (loss) available to common shareholders                                       |  | $                               | (1,041.6  
|                                                                                  |  |                                 |           
|Basic and diluted net (loss) per share:                                           |  |                                 |           
|(Loss) from continuing    operations                                              |  | $                               | (52.99    
|(Loss) from    discontinued operations                                            |  |                                 |          
|                                                                                  |  |                                 |           
|Net (loss) per common    share                                                    |  | $                               | (52.99    
|                                                                                  |  |                                 |           
|Weighted average shares                                                           |  |                                 | 19,657,433
|                                                                                  |  |                                 |           




|                                         |  | January 1,             |        
|---------------------------------------- |  | ---------------------- | -------
|                                         |  |                        |        
|                                         |  | 2003                   |        
|                                         |  |                        |        
|                                         |  | Predecessor    Company |        
|                                         |  |                        |        
|Fresh start adoption  fixed assets      |  | $                      | (507.2 
|Fresh start adoption  debt              |  |                        | 1,313.2
|Fresh start adoption  intangible assets |  |                        | 145.3  
|Fresh start adoption  deferred taxes    |  |                        | (13.5  
|Fresh start adoption  pensions          |  |                        | (31.2  
|Fresh start adoption  all other         |  |                        | (10.3  
|                                         |  |                        |        
|                                         |  |                        | 896.3  
|Gain on discontinued operations          |  |                        | 5,041.3
|Gain on debt discharge                   |  |                        | 3,962.4
|                                         |  |                        |        
|Net income                               |  | $                      | 9,900.0
|                                         |  |                        |        
|Basic and diluted net income per share   |  | $                      | 35.79  
|                                         |  |                        |        




See accompanying notes.





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NTL Europe, Inc. and Subsidiaries


Condensed Consolidated Statement of Shareholders  (Deficiency)


(unaudited)


(dollars in millions)





|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   | Accumulated    Other    Comprehensive    (Loss) |        |   |   |      
|-------------------------------------------------------- |  | ------------------------------------------- | ---------- | --------------------------------- | - | -------------------------------- |  | ----------------------- | ------------ | ---------------------------------- | - | --------------------------------------------- | - | ----------------------------------- | --------- | --------- | - | -------- | - | ----------------------------------------------- | ------ | - | - | -----
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|                                                         |  | Series    Preferred Stock    $.01 Par Value |            | Common    Stock    $.01 Par Value |   | Additional    Paid-in    Capital |  | Comprehensive    (Loss) |              | Foreign    Currency    Translation |   | Unrealized    Net    Losses on    Derivatives |   | Pension    Liability    Adjustments |           | (Deficit) |  
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |  
|                                                         |  | Shares                                      |            | Par                               |   | Shares                           |  | Par                     |              |                                    |   |                                               |   |                                     |          
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Predecessor Company                                      |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Balance, December 31, 2002                               |  |                                             | 3,000,000  |                                   | $ |                                 |  |                         | 276,626,475  |                                    | $ | 2.8                                           |   | $                                   | 13,574.9  |           |   |          |   | $                                               | (770.1 | ) | $ | (30.1
|Net Income January 1, 2003                               |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           | $ | 9,900.0  |   |                                                 |        |   |   |      
|Issuance of Common Stock                                 |  |                                             |            |                                   |   |                                  |  |                         | 19,657,433   |                                    |   | 0.2                                           |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Fresh-start adoptions     other                         |  |                                             | (3,000,000 | )                                 |   |                                  |  |                         | (276,626,475 | )                                  |   | (2.8                                          | ) |                                     | (13,574.9 | )         |   |          |   |                                                 | 770.1  |   | $ | (30.1
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Reorganized Company                                      |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Balance, January 1, 2003                                 |  |                                             |           |                                   |   |                                 |  |                         | 19,657,433   |                                    |   | 0.2                                           |   |                                     |          |           |   |          |   |                                                 |       |   |   |     
|Accretion on mandatorily      redeemable preferred stock |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Comprehensive loss:                                      |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Net loss for the three    months ended March 31, 2003    |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           | $ | (1,037.4 | ) |                                                 |        |   |   |      
|Currency translation    adjustments                      |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   | (10.1    | ) |                                                 | (10.1  | ) |   |      
|Unrealized losses on    derivatives                      |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   | (2.4     | ) |                                                 |        |   |   | (2.4 
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Total                                                    |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           | $ | (1,049.9 | ) |                                                 |        |   |   |      
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      
|Balance, March 31, 2003                                  |  |                                             |           |                                   | $ |                                 |  |                         | 19,657,433   |                                    | $ | 0.2                                           |   | $                                   |          |           |   |          |   | $                                               | (10.1  | ) | $ | (2.4 
|                                                         |  |                                             |            |                                   |   |                                  |  |                         |              |                                    |   |                                               |   |                                     |           |           |   |          |   |                                                 |        |   |   |      




See accompanying notes.





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NTL Europe, Inc. and Subsidiaries


Consolidated Statements of Cash Flows


(unaudited)


(dollars in millions)





|                                                                                                           |  | Three    months ended March 31 |                        |   | January 1, |                                     
|---------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------------------- | - | ---------- | ------------------------------------
|                                                                                                           |  |                                |                        |   |            |                                     
|                                                                                                           |  | 2003                           |                        |   | 2002       |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|                                                                                                           |  |                                | Reorganized    Company |   |            | Predecessor    Company    (see note)
|                                                                                                           |  |                                |                        |   |            |                                     
|Operating    activities                                                                                    |  |                                |                        |   |            |                                     
|Net (loss) income                                                                                          |  | $                              | (1,037.4               | ) |            | $                                   
|(Loss) from discontinued operations                                                                        |  |                                |                       |   |            |                                     
|Gain on disposal of discontinued operations                                                                |  |                                |                       |   |            |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|(Loss) income from continuing operations                                                                   |  |                                | (1,037.4               | ) |            |                                     
|Adjustments to reconcile net (loss) to net cash    provided by (used in) continuing operations:            |  |                                |                        |   |            |                                     
|Depreciation and    amortization                                                                           |  |                                | 48.2                   |   |            |                                     
|Write-off of other    assets included in other income and expense                                          |  |                                | 0.8                    |   |            |                                     
|Equity in losses of    unconsolidated subsidiaries                                                         |  |                                | 0.4                    |   |            |                                     
|Loss (gain) on sale of    assets                                                                           |  |                                |                       |   |            |                                     
|Provision for losses on    accounts receivable                                                             |  |                                | 0.6                    |   |            |                                     
|Deferred income taxes                                                                                      |  |                                | (1.0                   | ) |            |                                     
|Non cash gain on debt    discharge                                                                         |  |                                |                       |   |            |                                     
|Fresh start adjustments                                                                                    |  |                                |                       |   |            |                                     
|Accretion on debt                                                                                          |  |                                | 997.4                  |   |            |                                     
|Other                                                                                                      |  |                                | 2.1                    |   |            |                                     
|Changes in operating assets and liabilities, net of    effect from business acquisitions and dispositions: |  |                                |                        |   |            |                                     
|Accounts receivable                                                                                        |  |                                | 162.5                  |   |            |                                     
|Other current assets                                                                                       |  |                                | (9.3                   | ) |            |                                     
|Other assets                                                                                               |  |                                | 7.2                    |   |            |                                     
|Accounts payable                                                                                           |  |                                | (8.4                   | ) |            |                                     
|Accrued expenses and    other                                                                              |  |                                | (65.2                  | ) |            |                                     
|Deferred revenue                                                                                           |  |                                | (43.4                  | ) |            |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|Net cash provided by (used in) continuing operations                                                       |  |                                | 54.5                   |   |            |                                     
|Net cash provided by (used in) discontinued    operations                                                  |  |                                |                       |   |            |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|Net cash provided by (used in) operating activities                                                        |  |                                | 54.5                   |   |            |                                     
|Investing    activities                                                                                    |  |                                |                        |   |            |                                     
|Purchase of fixed assets                                                                                   |  |                                | (19.5                  | ) |            |                                     
|Investments in and loans to affiliates                                                                     |  |                                | (1.2                   | ) |            |                                     
|Increase in other assets                                                                                   |  |                                |                       |   |            |                                     
|Proceeds from sales of assets                                                                              |  |                                |                       |   |            |                                     
|Purchase of marketable securities                                                                          |  |                                |                       |   |            |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|Net cash (used in) continuing operations                                                                   |  |                                | (20.7                  | ) |            |                                     
|Net cash (used in) discontinued operations                                                                 |  |                                |                       |   |            |                                     
|                                                                                                           |  |                                |                        |   |            |                                     
|Net cash (used in) investing activities                                                                    |  |                                | (20.7                  | ) |            |                                     




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NTL Europe, Inc. and Subsidiaries


Consolidated Statements of Cash Flows  continued


(unaudited)


(dollars in millions)





|                                                                                  |  | Three    months ended March 31 |       |  | January 1,             |  
|--------------------------------------------------------------------------------- |  | ------------------------------ | ----- |  | ---------------------- | -
|                                                                                  |  |                                |       |  |                        |  
|                                                                                  |  | 2003                           |       |  | 2002                   |  
|                                                                                  |  |                                |       |  |                        |  
|                                                                                  |  | Reorganized    Company         |       |  | Predecessor    Company |  
|                                                                                  |  |                                |       |  |                        |  
|Financing activities                                                              |  |                                |       |  |                        |  
|Proceeds from discontinued operations, upon    emergence from bankruptcy          |  |                                |      |  |                        |  
|Proceeds from borrowings, net of financing costs                                  |  |                                | 0.2   |  |                        |  
|Principal payments                                                                |  |                                |      |  |                        |  
|                                                                                  |  |                                |       |  |                        |  
|Net cash (used in) provided by financing activities    of continuing operations   |  |                                | 0.2   |  |                        |  
|Net cash (used in) provided by financing activities    of discontinued activities |  |                                |      |  |                        |  
|                                                                                  |  |                                |       |  |                        |  
|Net cash (used in) provided by financing activities                               |  |                                | 0.2   |  |                        |  
|Effect of exchange rate changes on cash                                           |  |                                | 2.1   |  |                        |  
|                                                                                  |  |                                |       |  |                        |  
|Increase (decrease) in cash and cash equivalents                                  |  |                                | 36.1  |  |                        |  
|Cash and cash equivalents at beginning of year     continuing operations         |  |                                | 159.8 |  |                        |  
|Cash and cash equivalents at beginning of year     discontinued operations       |  |                                |      |  |                        |  
|Cash and cash equivalents at end of period     discontinued operations           |  |                                |      |  |                        |  
|                                                                                  |  |                                |       |  |                        |  
|Cash and cash equivalents at end of period     continuing operations             |  | $                              | 195.9 |  |                        | $
|                                                                                  |  |                                |       |  |                        |  
|Supplemental    disclosure of cash flow information                               |  |                                |       |  |                        |  
|Cash paid during the period for interest exclusive    of amounts capitalized      |  | $                              | 66.9  |  |                        | $
|Income taxes paid                                                                 |  |                                |      |  |                        |  




See accompanying notes.





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|1. | Organization    and Business
|-- | ----------------------------




NTLs  Completed Restructuring





On May 8, 2002, the entity then known as NTL Incorporated (Old NTL)  and certain of its subsidiaries as of that time each filed a pre-arranged joint  reorganization plan (the Plan) under Chapter 11 of the U.S. Bankruptcy  Code.  Old NTLs operating subsidiaries  were not included in the Chapter 11 filing. The Plan became effective on  January 10, 2003 (the Effective Date) at which time Old NTL emerged from  Chapter 11 reorganization.





Pursuant to the Plan, Old NTL and its subsidiaries were split into two  separate companies.  The entity formerly  known as NTL Incorporated was renamed NTL Europe, Inc. and became the  holding company for certain European and other assets of Old NTL (the  Company).  The entity formerly known  as NTL Communications Corp. was renamed NTL Incorporated and became the  holding company for Old NTLs principal UK and Ireland assets (New NTL).  Pursuant to the Plan, all of the outstanding  securities of Old NTL and certain of its subsidiaries were canceled, and the  Company issued shares of its common stock, par value $0.01 per share (the  Common Stock), and 10% Fixed Coupon Redeemable Preferred Stock, Series A, par  value $0.01 per share (with a $50.00 liquidation preference per share) (the  Preferred Stock), and New NTL issued shares of its common stock and
Series A  warrants to various former creditors and stockholders of Old NTL and its  subsidiaries.  The precise mix of new  securities received by holders of each particular type of security of Old NTL  and its subsidiaries was set forth in the Plan.  New NTL is an independent entity which is no longer owned by or  affiliated with the Company.





New NTL has been accounted for as a discontinued operation beginning  with the quarter ended September 30, 2002 and, accordingly, it is excluded from  assets and liabilities of continuing operations as of December 31, 2002; New  NTL has been completely removed from the Companys consolidated financial statements,  as part of the emergence from bankruptcy and application of Fresh Start  Accounting, effective January 1, 2003.





With the separation of Old NTL into two entities, the majority of the  significant assets and holdings formerly owned and consolidated by Old NTL were  retained by New NTL.  Generally, other  than Cablecom GmbH, an indirect, wholly-owned subsidiary of the Company  (Cablecom) (which is itself being restructured as described below), the  Companys assets are not material compared to those of New NTL.  As a result of the existing defaults under  Cablecoms debt agreements and its overindebtedness, in the near future, the  Company expects its interest in Cablecom to be acquired or eliminated.  The Companys board of directors and  management is exploring the strategic and financial alternatives available to  it, including the Companys possible liquidation, a going-private transaction  and the sale of its remaining assets.   The Companys historic financial statements presented herein are not  particularly
reflective of the Companys current and anticipated future  business and should not be relied upon as indicative of the Companys future  performance.





Historical  Structure of the Company





On May 18, 2000, the entity then known as NTL Incorporated (currently named  Parc Holdings, Inc. (but until August 4, 2003 known as NTL (Delaware), Inc.)  (Parc Holdings)) completed a corporate restructuring to create a holding  company structure.  The formation of the  holding company was part of Parc Holdings acquisition of certain assets of  Cable & Wireless Communications plc.   The holding company restructuring was accomplished through a merger so  that all the stockholders of Parc Holdings at the effective time of the merger  became stockholders of the new holding company, and Parc Holdings became a  subsidiary of the new holding company.   The new holding company was called NTL Incorporated (which is now known  as NTL Europe, Inc.) and the holding





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companys subsidiary simultaneously changed its name to NTL (Delaware),  Inc. but on August 4, 2003 changed its name to Parc Holdings, Inc.





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





Business





The Company, through its direct and indirect wholly-owned subsidiaries,  owns and operates Premium TV Limited, Cablecom, NTL Lanbase, SL, NTL Broadcast  (Thailand) Ltd. and NTL Broadcast Sdn, Ltd.   Premium TV Limited (Premium TV) exploits sports-related Internet and  media rights in the United Kingdom.  Cablecom  is the largest cable television operator in Switzerland, but, as discussed  below, it is overindebted under Swiss law and it is unlikely that the Company  will retain any significant interest in Cablecom.  NTL Lanbase, SL is based in Spain and is a value-added reseller  of equipment for corporate data networks in Spain.  NTL Broadcast (Thailand) Ltd. and NTL Broadcast Sdn, Ltd.,  together with New NTLs branch office in Singapore, offer operations and  maintenance services, design and build, consultancy and system integration  services to broadcasters in Malaysia and Thailand.





Cablecom has approximately CHF 3,792 million in bank debt (which  includes recently accrued interest payments) that initially matured on April  30, 2003 but the lenders have extended such due date until September 10, 2003;  provided that if certain core documents to the proposed Cablecom restructuring  are agreed to by the coordinators of the bank loan and certain principal  investors and posted to the Cablecom banks intra-links for distribution by  midnight on August 31, 2003, then the due date shall be automatically extended  from September 10, 2003 to October 31, 2003.   Cablecom has insufficient resources to satisfy such obligation.  In addition, Cablecom and certain of its  subsidiaries are overindebted under Swiss law and, accordingly, may be  required to file for insolvency proceedings in Switzerland.  Cablecom and its lenders have been involved  in ongoing discussions regarding a complete financial restructuring of
Cablecom  and, on June 19, 2003, Cablecoms board of directors had been advised that 100%  of its lenders and other holders of economic interests in Cablecoms bank debt  have agreed upon the principal terms and parameters for the restructuring of  that debt.





| |   | The principal terms for the    financial restructuring are:                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                          
| |  | The outstanding principal    amount of the debt would be reduced from approximately CHF 3.8 billion to approximately    CHF 1.7 billion.                                                                 
| |   |                                                                                                                                                                                                          
| |  | The facility would be split    into two tranches, one with a final maturity date of December 31, 2009 and    one with a final maturity date of June 30, 2010.                                            
| |   |                                                                                                                                                                                                          
| |  | Cablecoms lenders would    acquire control of substantially all of Cablecoms share capital, with the    Companys remaining interest being acquired by certain members of the new    shareholder group.
| |   |                                                                                                                                                                                                          
| |  | At the time of the    consummation of the restructuring, the additional equity capital would be    raised through a rights offering to the new shareholder group.                                        




| | The proposed restructuring is subject to various    closing conditions, including the negotiation, completion and execution of    definitive documentation.  Cablecoms lenders have also agreed to a    moratorium on the payment of interest and commitment commission accruing    between May 30, 2003 and the date on which Cablecoms credit agreement is    restated as part of the financial restructuring (when a portion of the    accrued amounts will be added to the principal amount of the facility).  If Cablecom is subject to an insolvency    proceeding before its credit agreement is restated, Cablecoms lenders have    agreed to waive such interest and commitment commission.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | In the event that the proposed restructuring is    completed, the Company expects that its remaining interest in Cablecom will    be acquired for an amount not in excess of $15 million.  If    such proposed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         




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| | restructuring is unsuccessful,    the Company expects to be deprived of all its ownership interest in Cablecom.  Accordingly, the Company anticipates that,    in the near future, the results of Cablecom will no longer be reported as    part of the Companys consolidated results of operations.  In that regard, it should also be noted    that, in accordance with the terms of the existing Cablecom credit agreement,    no dividends, distributions or other payments have ever been or will be made    by Cablecom to the Company.  Further,    the lenders under Cablecoms credit facility have no legal recourse to any    assets of the NTL Europe group, other than to the shares of Cablecom, certain    assets of the Cablecom group and certain assets of the Companys subsidiaries    which hold, directly or indirectly, the shares of the Cablecom group.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




The Company also has various equity and cost method investments  detailed in Note 8.





The Companys most significant holdings are currently being  restructured, and the Company is reviewing all of its holdings to determine the  most appropriate course of action, which may result in one or more of these  holdings being sold, transferred, foreclosed on, liquidated, wound-up or  otherwise disposed of in the near future or at a later date.  The Company may not receive any proceeds  from any of these transactions after the payment of outstanding debt that some  of these companies may owe and any fees and expenses incurred in connection  with these transactions.  See, in  particular, Note 15 Commitments and Contingent Liabilities  Cablecom.  To the extent the Company receives cash  proceeds from any asset sale it or its subsidiaries complete, the Preferred  Stock will be entitled to mandatory redemption in a like amount, subject to  some limited exceptions set forth in the Companys charter, until all
shares of  the Preferred Stock (having an aggregate of $343 million in liquidation  preference, as of March 31, 2003) have been redeemed.  (See Note 12.)





|2. | Reorganization    and Emergence from Chapter 11
|-- | -----------------------------------------------




Background  of Restructuring





On January 31, 2002, Old NTL announced that it had appointed  professional advisors to advise on strategic and recapitalization alternatives  to strengthen its balance sheet, reduce debt and put an appropriate capital  structure in place for its business.





Promptly upon obtaining the requisite waivers from the lenders under  its credit facilities in March 2002, Old NTL and certain of its subsidiaries  commenced negotiations with a steering committee of the unofficial committee of  its bondholders and the committees legal and financial advisors.





Old NTL and its subsidiaries failed to make interest payments on some  of the outstanding notes starting on April 1, 2002.  Old NTL also failed to declare or pay dividends on certain series  of its outstanding preferred stock due to a lack of available surplus under  Delaware law.





On April 16, 2002, Old NTL announced that it and an unofficial  committee of its bondholders had reached an agreement in principle on a  comprehensive recapitalization of Old NTL and its subsidiaries.  To implement the proposed recapitalization  plan, on May 8, 2002, Old NTL and certain of the other subsidiaries of Old NTL,  namely Parc Holdings, NTL Communications Corp., Diamond Cable Communications  Limited, Diamond Holdings Limited and Communications Cable Funding Corp., filed  cases and a pre-arranged joint reorganization plan under Chapter 11 of the U.S.  Bankruptcy Code.  In connection with the  filing, some members of the unofficial creditors committee of bondholders  entered into a credit facility agreement (referred to as the DIP facility)  committing to provide Communications Cable Funding Corp. with up to $500.0  million in new debt financing (Parc Holdings committed to provide up to an  additional $130.0 million under
the DIP facility.)





As a result of the payment defaults, as well as the voluntary filing  under Chapter 11 by Old NTL and certain of its subsidiaries, on May 8, 2002,  there was an event of default under all of Old NTL and its





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subsidiaries credit facilities and the indentures governing all of  their publicly traded debt, other than debt of NTL (Triangle) LLC.





The Plan was confirmed by the Bankruptcy Court on September 5,  2002.  During the fall of 2002, Old NTL  negotiated with a group of lenders to enter into a new financing arrangement to  repay the DIP facility, to repay certain obligations and to provide liquidity  to Old NTL and its subsidiaries.  The  Plan became effective on January 10, 2003, at which time Old NTL emerged from  Chapter 11 reorganization.  In  connection with Old NTLs emergence from Chapter 11 reorganization, NTL  Communications Corp. issued $558.2 million aggregate principal face amount of  19% Senior Secured Notes due 2010 and 500,000 shares of its common stock on  January 10, 2003. The proceeds were used in part to repay amounts outstanding  under the DIP facility and to purchase from Parc Holdings a £90.0 million note  of NTL (UK) Group Inc. and to repay certain other obligations.





Liquidity  and Capital Resources





The Company emerged from bankruptcy on January 10, 2003, at which time,  as part of the reorganization plan, all of its secured debt, common stock and  preferred stock were canceled and new Common Stock and Preferred Stock were  issued.  Further, upon the consummation  of the reorganization plan (after taking into account the redemption for cash  of $25 million of the Preferred Stock) the Company had approximately $63  million in cash and its subsidiaries (other than Cablecom) had an additional  amount of approximately $11 million in cash.





The Company is primarily a holding company for the stock of its  subsidiaries, with no material independent source of cash proceeds.  During 2003, the Company does not anticipate  receiving any material cash proceeds from its subsidiaries.  Accordingly, the Company expects to fund its  operations primarily out of its $63 million in cash and its subsidiaries cash remaining  after the consummation of the reorganization plan.  During 2003, the Company does not anticipate borrowing any  material amount of funds and the Company does not expect to issue any of its  securities for cash.  Further, during  2003, the Company does not anticipate any material capital expenses.





The Company expects to either complete a restructuring of the debt and  equity of Cablecom, in the near future, which would result in the acquisition  of the Companys interest in Cablecom or a complete dilution of the Companys  ownership interest or, if such restructuring is not successful, to file for the  insolvency of Cablecom in Switzerland, which would result in the Companys  having no remaining ownership in Cablecom.   The proposed restructuring is subject to various closing conditions,  including the negotiation, completion and execution of definitive  documentation.  Cablecoms lenders have also agreed to a moratorium on the payment of  interest and commitment commission accruing between May 30, 2003 and the date  on which Cablecoms credit agreement is restated as part of the financial  restructuring (when a portion of the accrued amounts will be added to the  principal amount of the facility).  If  Cablecom
is subject to an insolvency proceeding before its credit agreement is  restated, Cablecoms lenders have agreed to waive such interest and commitment  commission.





In the event that the proposed restructuring is completed, the Company  expects that its remaining interest in Cablecom will be acquired for an amount  not in excess of $15 million.  If such proposed restructuring is unsuccessful,  the Company expects to be deprived of all its ownership interest in Cablecom.  Accordingly, the Company anticipates that,  in the near future, the results of Cablecom will no longer be reported as part  of the Companys consolidated results of operations.  In that regard, it should also be noted that, in accordance with  the terms of the existing Cablecom credit agreement, no dividends,  distributions or other payments have ever been or will be made by Cablecom to  the Company.  Further, the lenders under  Cablecoms credit facility have no legal recourse to any assets of the NTL  Europe group, other than to the shares of Cablecom, certain assets of the  Cablecom group and certain assets of the
Companys subsidiaries which hold,  directly or indirectly, the shares of the Cablecom group.





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The Companys management and Board is exploring strategic and financial  alternatives available to it, including the Companys possible liquidation, a  going-private transaction and the sale of its remaining assets.  During 2003, the Companys primary expenses  are expected to consist of operating expenses of approximately $13.5 million,  including salaries, professional fees, insurance and severance costs, as well  as certain funding obligations to certain of its subsidiaries (but not  including certain guarantees to the Companys subsidiaries in the aggregate  amount of approximately £4.2 million).   Further, after reserving for certain contingent liabilities, to the  extent the Company has remaining funds legally available, the Company intends  to pay dividends on or redeem shares of its Preferred Stock.  The liquidation preference of Preferred  Stock aggregates $343 million.  In  addition, the Preferred Stock
is also entitled to mandatory redemption out of  the net proceeds of any asset sale for cash that the Company or its  subsidiaries complete, subject to some limited exceptions set forth in the  Companys charter.  Accordingly, it is  highly unlikely that common shareholders will ever receive any distribution  related to their shares.





The Company believes that its existing cash and cash equivalents will  be sufficient to support its expected operations and fund its capital  commitments through at least April 1, 2004, which, as previously noted, will  exclude Cablecom.





Basis of  Presentation





The accompanying unaudited condensed consolidated financial statements  have been prepared in accordance with accounting principles generally accepted  in the United States for interim financial information and with the rules and  regulations of the Securities and Exchange Commission.  Accordingly, they do not include all of the  information and footnotes required by accounting principles generally accepted  in the United States for complete financial statements.  In the opinion of management, all  adjustments (consisting of normal recurring accruals) considered necessary for  a fair presentation have been included.   Operating results for the three months ended March 31, 2003 are not necessarily  indicative of the results that may be expected for the year ending December 31,  2003.  For further information, refer to  the consolidated financial statements and footnotes thereto included in the  Companys Annual Report on Form 10-K for
the year ended December 31, 2002.





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





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





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





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cash flows dated January 1, 2003.   All other results of operations and cash flows on January 1, 2003 are  Reorganized Company transactions.





The Company adopted fresh-start reporting upon its emergence from  Chapter 11 reorganization in accordance with SOP 90-7.  The Company engaged an independent financial  advisor to assist in the determination of its reorganization value as defined  in SOP 90-7.  The Company and its  independent financial advisor determined the Companys reorganization value was  $2,198.6 million.  This determination  was based upon various valuation methods, including discounted projected cash  flow analysis, selected comparable market multiples of publicly traded  companies and other applicable ratios and economic information relevant to the  operations of the Company.  Certain  factors that were incorporated into the determination of the Companys  reorganization value included the following:





| |  | Reporting unit 10 year cash flow projections;                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                  
| |  | Corporate income tax rates of 30% in the UK and 25%    in Switzerland;                                                           
| |   |                                                                                                                                  
| |  | Present value discount factors of
      14.5% and 25%, depending upon the reporting unit; and                                    
| |   |                                                                                                                                  
| |  | Residual value representing the sum of the value    beyond 10 years into perpetuity was calculated using the Gordon Growth Model.




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





The Company determined that its reorganization value computed as of the  Effective Date of January 10, 2003 consisted of the following (in millions):





|Present value of discounted cash flows of the    emerging entity |  | $ | 1,615.0 | 
|---------------------------------------------------------------- |  | - | ------- | 
|Current assets                                                   |  |   | 455.6   | 
|Other assets                                                     |  |   | 128.0   | 
|                                                                 |  |   |         | 
|Reorganization value                                             |  | $ | 2,198.6 | 
|                                                                 |  |   |         | 




The Company adopted fresh-start reporting because the holders of its  voting common shares immediately before filing and confirmation of the Plan  received less than 50% of the voting shares of the emerging company, and  because the Companys reorganization value is less than its post-petition  liabilities and allowed claims, as shown below (in millions):





|Allowed claims:                                            |  |   |         | 
|---------------------------------------------------------- |  | - | ------- | 
|Liabilities subject to    compromise                       |  | $ | 4,294.1 | 
|Post petition liabilities:                                 |  |   |         | 
|Current liabilities    (excluding discontinued operations) |  |   | 3,140.2 | 
|Deferred income taxes                                      |  |   | 226.0   | 
|Other non current    liabilities                           |  |   | 132.7   | 
|                                                           |  |   |         | 
|                                                           |  |   | 7,793.0 | 
|Reorganization value                                       |  |   | 2,198.6 | 
|                                                           |  |   |         | 
|                                                           |  | $ | 5,594.4 | 
|                                                           |  |   |         | 




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The Company realized a gain of $3,962 million in connection with the  recapitalization of its debt in accordance with the Plan.  This gain has been reflected in the results  of operations of the Predecessor Company on January 1, 2003. A summary of the  gain on debt discharge follows (in millions):





|Liabilities subject to    compromise                 |  |   |         |  
|---------------------------------------------------- |  | - | ------- | -
|Pre-petition long-term    debt subject to compromise |  | $ | 1,300.0 |  
|Redeemable preferred    stock                        |  |   | 2,853.3 |  
|Accounts payable and    accrued expenses             |  |   | 0.5     |  
|Interest and dividends    payable                    |  |   | 140.3   |  
|                                                     |  |   |         |  
|                                                     |  |   | 4,294.1 |  
|Unamortized deferred    financing costs              |  |   | (37.4   | )
|                                                     |  |   |         |  
|                                                     |  |   | 4,256.7 |  
|Cash distributed upon    emergence from bankruptcy   |  |   | (188.2  | )
|Value of Reorganized    Companys preferred stock    |  |   | (106.1  | )
|Value of Reorganized    Companys common stock       |  |   | (0.2    | )
|                                                     |  |   |         |  
|                                                     |  | $ | 3,962.2 |  
|                                                     |  |   |         |  




Fresh-Start  Reporting





In accordance with SOP 90-7, the Company adopted the provisions of  fresh-start reporting as of January 1, 2003.   The following reconciliation of the Predecessor Companys consolidated  balance sheet as of December 31, 2002 to that of the Reorganized Company as of  January 1, 2003 gives effect to the emergence from Chapter 11 reorganization  and the adoption of fresh-start reporting.





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





The adjustments entitled Emergence from Chapter 11 reflect the  consummation of the Plan, including the cancellation of a substantial portion  of the Companys outstanding debt and the issuance of shares of Common Stock  and Preferred Stock to various former creditors and stockholders of Old NTL and  certain of its subsidiaries.  The  adjustments entitled Fresh-Start reflect the adoption of fresh-start  reporting.





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|                                                                                      |  | December    31, 2002   |           |                              |   |                            |   |             |           |                        |   |           | January 1,    2003 |  
|------------------------------------------------------------------------------------- |  | ---------------------- | --------- | ---------------------------- | - | -------------------------- | - | ----------- | --------- | ---------------------- | - | --------- | ------------------ | -
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|                                                                                      |  | Predecessor    Company |           | Emergence    from Chapter 11 |   | Discontinued    Operations |   | Fresh-Start |           | Reorganized    Company |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|                                                                                      |  | (dollars in millions)  |          
|Assets                                                                                |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Current assets:                                                                       |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Cash and cash    equivalents                                                          |  | $                      | 277.5     |                              | $ | (170.9                     | ) | $           | 53.2      |                        | $ |          |                    | $
|Marketable securities                                                                 |  |                        | 17.3      |                              |   | (17.3                      | ) |             |          |                        |   |          |                    |  
|Accounts    receivable-trade, less Allowance for doubtful accounts of $9.4            |  |                        | 243.4     |                              |   |                           |   |             |          |                        |   |          |                    |  
|Other                                                                                 |  |                        | 50.3      |                              |   |                           |   |             |          |                        |   | 2.1       |                    |  
|Discontinued operations                                                               |  |                        | 12,968.1  |                              |   |                           |   |             | (12,968.1 | )                      |   |          |                    |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Total current assets                                                                  |  |                        | 13,556.6  |                              |   | (188.2                     | ) |             | (12,914.9 | )                      |   | 2.1       |                    |  
|Fixed assets, net                                                                     |  |                        | 1,682.1   |                              |   |                           |   |             |          |                        |   | (507.2    | )                  |  
|Goodwill                                                                              |  |                        | 218.7     |                              |   |                           |   |             |          |                        |   | (1.5      | )                  |  
|Customer lists, net of    accumulated amortization of $171.4                          |  |                        | 62.8      |                              |   |                           |   |             |          |                        |   | 146.8     |                    |  
|Investments and loans    to affiliates, net                                           |  |                        | 13.0      |                              |   |                           |   |             |          |                        |   | 7.2       |                    |  
|Deferred financing                                                                    |  |                        | 37.4      |                              |   | (37.4                      | ) |             |          |                        |   |          |                    |  
|Other assets, net of    accumulated amortization of $62.4                             |  |                        | 83.5      |                              |   |                           |   |             |          |                        |   | (54.0     | )                  |  
|Deferred tax asset                                                                    |  |                        | 195.3     |                              |   |                           |   |             |          |                        |   | (103.7    | )                  |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Total assets                                                                          |  | $                      | 15,849.4  |                              | $ | (225.6                     | ) | $           | (12,914.9 | )                      | $ | (510.3    | )                  | $
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Liabilities    and shareholders (deficiency) equity                                  |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Liabilities not subject to compromise                                                 |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Current liabilities:                                                                  |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Accounts payable                                                                      |  | $                      | 49.3      |                              | $ |                           |   | $           |          |                        | $ | 0.3       |                    | $
|Accrued expenses and other                                                            |  |                        | 92.5      |                              |   |                           |   |             |          |                        |   | 1.2       |                    |  
|Interest payable                                                                      |  |                        | 43.5      |                              |   |                           |   |             |          |                        |   |          |                    |  
|Deferred revenue                                                                      |  |                        | 235.6     |                              |   |                           |   |             |          |                        |   |          |                    |  
|Current portion of long-term debt                                                     |  |                        | 2,719.3   |                              |   |                           |   |             |          |                        |   | (1,313.2  | )                  |  
|Discontinued operations (including liabilities    subject to compromise of $10,157.8) |  |                        | 17,956.2  |                              |   |                           |   |             | (17,956.2 | )                      |   |          |                    |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Total current liabilities                                                             |  |                        | 21,096.4  |                              |   |                           |   |             | (17,956.2 | )                      |   | (1,311.7  | )                  |  
|Other                                                                                 |  |                        | 132.7     |                              |   |                           |   |             |          |                        |   | (4.7      | )                  |  
|Deferred income taxes                                                                 |  |                        | 226.0     |                              |   |                           |   |             |          |                        |   | (90.2     | )                  |  
|Liabilities subject to compromise, including    redeemable preferred stock            |  |                        | 4,294.1   |                              |   | (4,294.1                   | ) |             |          |                        |   |          |                    |  
|Mandatorily redeemable preferred stock                                                |  |                        |          |                              |   | 106.1                      |   |             |          |                        |   |          |                    |  
|Common stock-old                                                                      |  |                        | 2.8       |                              |   |                           |   |             |          |                        |   | (2.8      | )                  |  
|Common stock-new                                                                      |  |                        |          |                              |   | 0.2                        |   |             |          |                        |   |          |                    |  
|Additional paid-in    capital                                                         |  |                        | 13,574.9  |                              |   |                           |   |             |          |                        |   | (13,574.9 | )                  |  
|Translation adjustment                                                                |  |                        | (830.2    | )                            |   |                           |   |             |          |                        |   | 830.2     |                    |  
|Retained earnings                                                                     |  |                        | (22,647.3 | )                            |   | 3,962.2                    |   |             | 5,041.3   |                        |   | 13,643.8  |                    |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Shareholders equity (deficiency)                                                     |  |                        | (9,899.9  | )                            |   | 3,962.4                    |   |             | 5,041.3   |                        |   | 896.3     |                    |  
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  
|Total liabilities and shareholders equity (deficiency)                               |  | $                      | 15,849.4  |                              | $ | (225.6                     | ) | $           | (12,914.9 | )                      | $ | (510.3    | )                  | $
|                                                                                      |  |                        |           |                              |   |                            |   |             |           |                        |   |           |                    |  




At December 31, 2002, Old NTL had net operating loss carryforwards of  approximately $400 million for U.S. federal income tax purposes that expire in  varying amounts commencing in 2009.  Old  NTL has Swiss net operating loss carryforwards of approximately $2.5 billion  that expire in varying amounts commencing in 2008.





The Company emerged from Chapter 11 bankruptcy on January 10,  2003.  A restructuring of the Companys  debt will give rise to cancellation of indebtedness income (COD) in 2003,  which will be non-taxable since the debt cancellation is in connection with a  bankruptcy reorganization.  However, to  the extent that such amount is excluded from U.S. taxable income, certain tax  attributes are subject to reduction, including certain U.S. net operating loss  carryforwards and U.S. capital carryforwards.   The reduction of tax attributes should have no material impact on the  Companys financial statement position since the deferred tax assets related to  these tax attributes are offset by a corresponding valuation allowance.  Furthermore, the reorganization will cause  an ownership change pursuant to Internal Revenue Code Section 382.  Section 382 will severely limit the  Companys ability to utilize any
remaining U.S. net operating loss  carryforwards and may limit the Companys ability to deduct any built-in losses  recognized within the subsequent five-year period.





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|3. | Pro    Forma Financial Information
|-- | ----------------------------------




The following pro forma consolidated balance sheet at March 31, 2003  and the pro forma consolidated income statement for the three months ended  March 31, 2003 reflect the likelihood that the Company will not retain a significant  interest in Cablecom and that Cablecom will no longer be reported as part of  the Companys consolidated results of operations.  As described in more detail in Note 15 (Commitments and  Contingent Liabilities  Cablecom), Cablecom has approximately CHF 3,792  million in bank debt (which includes recently accrued interest payments) that  initially matured on April 30, 2003 but the lenders have extended such due date  until September 10, 2003; provided that if certain core documents to the  proposed Cablecom restructuring are agreed to by the coordinators of the bank  loan and certain principal investors and posted to the Cablecom banks  intra-links for distribution by midnight on August 31, 2003, then the due
date  shall be automatically extended from September 10, 2003 to October 31,  2003.  Cablecom has insufficient  resources to satisfy such obligation.   In addition, Cablecom and certain of its subsidiaries are overindebted  under Swiss law and, accordingly, may be required to file for insolvency  proceedings in Switzerland.





Cablecom and its lenders have been in discussions regarding a complete  financial restructuring of Cablecom which will, among other things, reduce the  amount of bank debt outstanding, extend the maturity date thereof and resolve  the Swiss overindebtedness issue.  The  proposed restructuring is subject to various closing conditions, including the  negotiation, completion and execution of definitive documentation.  Cablecoms  lenders have also agreed to a moratorium on the payment of interest and  commitment commission accruing between May 30, 2003 and the date on which  Cablecoms credit agreement is restated as part of the financial restructuring  (when a portion of the accrued amounts will be added to the principal amount of  the facility).  If Cablecom is subject  to an insolvency proceeding before its credit agreement is restated, Cablecoms  lenders have agreed to waive such interest and commitment commission.





In the event that the proposed restructuring is completed, the Company  expects that its remaining interest in Cablecom will be acquired for an amount  not in excess of $15 million.  If such proposed restructuring is unsuccessful,  the Company expects to be deprived of all its ownership interest in Cablecom.  Accordingly, the Company anticipates that,  in the near future, the results of Cablecom will no longer be reported as part  of the Companys consolidated results of operations.  In that regard, it should also be noted that, in accordance with  the terms of the existing Cablecom credit agreement, no dividends,  distributions or other payments have ever been or will be made by Cablecom to  the Company.  Further, the lenders under  Cablecoms credit facility have no legal recourse to any assets of the NTL Europe  group, other than to the shares of Cablecom, certain assets of the Cablecom  group and certain assets of the
Companys subsidiaries which hold, directly or  indirectly, the shares of the Cablecom group.





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|                                                                                             |  | March 31,    2003      |                | Discontinued    Operations    (Cablecom) |   | Pro Forma    as of    March 31, 2003 |  
|-------------------------------------------------------------------------------------------- |  | ---------------------- | -------------- | ---------------------------------------- | - | ------------------------------------ | -
|                                                                                             |  |                        |                |                                          |   |                                     
|                                                                                             |  |                        | (Consolidated) |                                          |   |                                     
|                                                                                             |  |                        |                |                                          |   |                                      |  
|                                                                                             |  | (amounts  in millions) |               
|Assets                                                                                       |  |                        |                |                                          |   |                                      |  
|Current assets:                                                                              |  |                        |                |                                          |   |                                      |  
|Cash and cash    equivalents                                                                 |  | $                      | 195.9          |                                          | $ | (124.1                               | )
|Accounts    receivable-trade, net                                                            |  |                        | 84.9           |                                          |   | (68.5                                | )
|Other                                                                                        |  |                        | 62.6           |                                          |   | (47.8                                | )
|Discontinued operations                                                                      |  |                        |               |                                          |   | 1,979.9                              |  
|                                                                                             |  |                        |                |                                          |   |                                      |  
|Total current assets                                                                         |  |                        | 343.4          |                                          |   | 1,739.5                              |  
|Fixed assets, net                                                                            |  |                        | 1,171.9        |                                          |   | (1,167.3                             | )
|Goodwill                                                                                     |  |                        |               |                                          |   |                                     |  
|Reorganizational value in excess of amounts    allocable to identifiable assets              |  |                        | 221.0          |                                          |   | (220.0                               | )
|Customer lists, net of accumulated amortization of    $2.4                                   |  |                        | 211.8          |                                          |   | (211.8                               | )
|Investments in and loans to affiliates, net                                                  |  |                        | 20.9           |                                          |   | (7.9                                 | )
|Deferred tax asset                                                                           |  |                        | 91.6           |                                          |   | (131.8                               | )
|Other assets                                                                                 |  |                        | 23.3           |                                          |   | (0.7                                 | )
|                                                                                             |  |                        |                |                                          |   |                                      |  
|Total assets                                                                                 |  | $                      | 2,083.9        |                                          | $ |                                     |  
|                                                                                             |  |                        |                |                                          |   |                                      |  
|Liabilities    and shareholders (deficiency)                                                |  |                        |                |                                          |   |                                      |  
|Liabilities not subject to compromise                                                        |  |                        |                |                                          |   |                                      |  
|Current liabilities:                                                                         |  |                        |                |                                          |   |                                      |  
|Accounts payable                                                                             |  | $                      | 42.6           |                                          | $ | (31.7                                | )
|Accrued expenses and    other                                                                |  |                        | 68.0           |                                          |   | (39.8                                | )
|Interest payable                                                                             |  |                        | 6.0            |                                          |   | (6.0                                 | )
|Deferred revenue                                                                             |  |                        | 196.8          |                                          |   | (192.0                               | )
|Current portion of    long-term debt                                                         |  |                        | 2,443.1        |                                          |   | (2,443.1                             | )
|Discontinued operations                                                                      |  |                        |               |                                          |   | 1,979.5                              |  
|                                                                                             |  |                        |                |                                          |   |                                      |  
|Total current liabilities                                                                    |  |                        | 2,756.5        |                                          |   | (733.1                               | )
|Long-term debt                                                                               |  |                        |               |                                          |   |                                     |  
|Other                                                                                        |  |                        | 135.2          |                                          |   | (135.2                               | )
|Deferred income taxes                                                                        |  |                        | 135.8          |                                          |   | (176.0                               | )
|Commitments and contingent liabilities                                                       |  |                        |                |                                          |   |                                      |  
|Mandatorily redeemable preferred stock                                                       |  |                        | 110.3          |                                          |   |                                     |  
|Shareholders (deficiency)                                                                   |  |                        |                |                                          |   |                                      |  
|Common stock - $.01 par    value; authorized 20.0 shares; issued and outstanding 19.7 shares |  |                        | 0.2            |                                          |   |                                     |  
|Additional paid-in    capital                                                                |  |                        |               |                                          |   |                                     |  
|Accumulated other    comprehensive (loss)                                                    |  |                        | (12.5          | )                                        |   | 11.6                                 |  
|(Deficit)                                                                                    |  |                        | (1,041.6       | )                                        |   | 1,032.7                              |  
|                                                                                             |  |                        |                |                                          |   |                                      |  
|                                                                                             |  |                        | (1,053.9       | )                                        |   | 1,044.3                              |  
|                                                                                             |  |                        |                |                                          |   |                                      |  
|Total liabilities and shareholders equity (deficiency)                                      |  | $                      | 2,083.9        |                                          | $ |                                     |  
|                                                                                             |  |                        |                |                                          |   |                                      |  




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NTL Europe, Inc. and subsidiaries, pro forma income  statement reflecting Cablecom as a discontinued operation:





|                                                                                  |  | March 31,    2003                                  |            | Discontinued    Operations |   | Pro Forma    as of    March 31, 2003 |  
|--------------------------------------------------------------------------------- |  | -------------------------------------------------- | ---------- | -------------------------- | - | ------------------------------------ | -
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|                                                                                  |  | (unaudited)                                        |           
|                                                                                  |  | (dollars in millions, except per    share amounts) |           
|Revenues                                                                          |  | $                                                  | 119.6      |                            | $ | (112.8                               | )
|Costs    and expenses                                                             |  |                                                    |            |                            |   |                                      |  
|Operating expenses (exclusive of depreciation shown    separately below)          |  |                                                    | 44.2       |                            |   | (42.7                                | )
|Selling, general and administrative expenses                                      |  |                                                    | 29.8       |                            |   | (29.4                                | )
|Other charges                                                                     |  |                                                    | 3.5        |                            |   |                                     |  
|Corporate expenses                                                                |  |                                                    | 4.7        |                            |   |                                     |  
|Depreciation                                                                      |  |                                                    | 45.7       |                            |   | (44.2                                | )
|Amortization                                                                      |  |                                                    | 2.5        |                            |   | (2.5                                 | )
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|                                                                                  |  |                                                    | 130.4      |                            |   | (118.8                               | )
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Operating (loss)                                                                  |  |                                                    | (10.8      | )                          |   | 6.0                                  |  
|Other    income (expense)                                                         |  |                                                    |            |                            |   |                                      |  
|Interest income and other, net                                                    |  |                                                    | (0.1       | )                          |   | 0.1                                  |  
|Interest expense                                                                  |  |                                                    | (1,025.9   | )                          |   | 1,025.9                              |  
|Share of (losses) from equity investments                                         |  |                                                    | (0.4       | )                          |   |                                     |  
|Foreign currency transaction gains (losses)                                       |  |                                                    | 0.5        |                            |   |                                     |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|(Loss) before recapitalization items, income taxes    and discontinued operations |  |                                                    | (1,036.7   | )                          |   | 1,032.0                              |  
|Recapitalization items, net                                                       |  |                                                    |           |                            |   |                                     |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|(Loss) before income taxes and discontinued    operations                         |  |                                                    | (1,036.7   | )                          |   | 1,032.0                              |  
|Income tax benefit (expense)                                                      |  |                                                    | (0.7       | )                          |   | 0.7                                  |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|(Loss) from continuing operations                                                 |  |                                                    | (1,037.4   | )                          |   | 1,032.7                              |  
|Discontinued operations:                                                          |  |                                                    |            |                            |   |                                      |  
|(Loss) from discontinued operations, net of income    tax benefit of $0.7         |  |                                                    |           |                            |   | (1,032.7                             | )
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Net (loss)                                                                        |  |                                                    | (1,037.4   | )                          |   |                                     |  
|Preferred stock dividends and accretion                                           |  |                                                    | (4.2       | )                          |   |                                     |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Net (loss) available to common shareholders                                       |  | $                                                  | (1,041.6   | )                          | $ |                                     |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Basic and diluted net (loss) per share:                                           |  |                                                    |            |                            |   |                                      |  
|(Loss) from continuing    operations                                              |  | $                                                  | (52.99     | )                          | $ | 52.53                                |  
|(Loss) from    discontinued operations                                            |  |                                                    |           |                            |   | (52.53                               | )
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Net (loss) per common    share                                                    |  | $                                                  | (52.99     | )                          | $ |                                     |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  
|Weighted average shares                                                           |  |                                                    | 19,657,433 |                            |   | 19,657,433                           |  
|                                                                                  |  |                                                    |            |                            |   |                                      |  




|4. | Recent    Accounting Pronouncements
|-- | -----------------------------------




In May 2003, the Financial Accounting Standards Board (FASB) issued  SFAS No. 150, Accounting for Certain Financial Instruments with  Characteristics of both Liabilities and Equity.  SFAS No. 150 establishes standards for classifying and measuring  as liabilities certain financial instruments that embody obligations of the  issuer and have characteristics of both liabilities and equity.  SFAS No. 150 represents a significant change  in practice in the accounting for a number of financial instruments, including  mandatorily redeemable equity instruments.   The Company has evaluated its 10% mandatorily redeemable preferred stock  and determined that it meets the definition of a liability as set forth in SFAS  No. 150 because it is mandatorily redeemable on a fixed date.  Accordingly, as of July 1, 2003, the Company  will record the mandatorily redeemable preferred stock at its then fair value  as debt, and
accrete





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as interest expense the difference between such amount and the amount  that will be payable on the redemption date, January 10, 2003.





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





In January 2003, the FASB issued FASB Interpretation No. 46,  Consolidation of Variable Interest Entities (FIN 46), which requires  variable interest entities to be consolidated by the primary beneficiary of the  entity if certain criteria are met.  FIN  46 is effective immediately for all new variable interest entities created or  acquired after January 31, 2003.  For  variable interest entities created or acquired prior to February 1, 2003, the  provisions of FIN 46 will become effective for the Company during the third  quarter of 2003.  The Company is  presently evaluating whether it will be required to consolidate, beginning July  1, 2003, any of its unconsolidated affiliates presently accounted for using the  equity method as a result of the effectiveness of FIN 46.





In November 2002, the Emerging Issues Task Force reached a consensus on  EITF No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF  00-21).  EITF 00-21 provides guidance  on how to account for arrangements that involve the delivery or performance of  multiple products, services and/or rights to use assets.  The provisions of EITF 00-21 will apply to  revenue arrangements entered into in fiscal periods beginning after June 15,  2003.  The adoption of EITF 00-21 is not  expected to have a significant effect on the results of operations, financial  condition or cash flows of the Company.





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





|5. | Stock-Based    Compensation
|-- | ---------------------------




The Company has not issued any stock options or made any stock grants  since its reorganization.





The Predecessor Company followed the disclosure-only provisions of  Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for  Stock-Based Compensation.  The Company  applies APB Opinion No. 25, Accounting for Stock Issued to Employees and  related interpretations in accounting for its stock option plans.





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The Predecessor Companys employees participated in the various stock  option plans of Old NTL.  All options to  purchase shares of the Predecessor Companys common stock were cancelled on the  Effective Date pursuant to the Plan.





Pro forma information regarding net
    loss has been determined as if the Predecessor Company had accounted for
    its employee stock options under the fair value method of SFAS No. 123.  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 2003 and 2002; risk-free interest rates of 3.90% and 4.47%, respectively,
    dividend yield of 0%, volatility factor of the expected market price of the
    Predecessor Companys common stock of .638 and .702, respectively,
    and a weighted-average expected life of the option of 10 years and 10 years,
    respectively.





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 these 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 three months ended March 31, 2002 were  not likely to be representative of the pro forma effects on net loss in future  years.





Had compensation for stock options granted by the Predecessor Company  been determined consistent with the provisions of SFAS No. 123, the effect on  the Predecessor Companys net loss would have been changed to the following pro  forma amounts.





|                                              |  | Three    months ended March 31          |         
|--------------------------------------------- |  | --------------------------------------- | --------
|                                              |  |                                         |         
|                                              |  | 2003                                    |         
|                                              |  |                                         |         
|                                              |  | Reorganized    Company                  |         
|                                              |  |                                         |         
|                                              |  | (in millions, except per share    data) |         
|Non cash compensation expense, as reported    |  | $                                       |        
|Non cash compensation expense, pro forma      |  |                                         |        
|Net loss, as reported                         |  |                                         | (1,037.4
|Net loss, pro forma                           |  |                                         | (1,037.4
|Basic and diluted net (loss) per common share |  |                                         | (52.9   




|6. | Fixed    Assets
|-- | ---------------




Fixed assets consist of:





|                         |  | March 31,     2003     |         |   | December    31,    2002 |  
|------------------------ |  | ---------------------- | ------- | - | ----------------------- | -
|                         |  |                        |         |   |                         |  
|                         |  | Reorganized    Company |         |   | Predecessor    Company  |  
|                         |  |                        |         |   |                         |  
|                         |  | (unaudited)            |         |   |                         |  
|                         |  | (in millions)          |        
|Operating equipment      |  | $                      | 1,105.3 |   |                         | $
|Other equipment          |  |                        | 87.0    |   |                         |  
|Construction-in-progress |  |                        | 24.3    |   |                         |  
|                         |  |                        |         |   |                         |  
|                         |  |                        | 1,216.6 |   |                         |  
|Accumulated depreciation |  |                        | (44.7   | ) |                         |  
|                         |  |                        |         |   |                         |  
|                         |  | $                      | 1,171.9 |   |                         | $
|                         |  |                        |         |   |                         |  




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The change in fixed assets is primarily the result of the $507.2  million reduction in the carrying value upon the adoption of fresh-start  reporting as of January 1, 2003.





|7. | Customer    Lists
|-- | -----------------




The valuation of the Companys customer lists were:





|                         |  | March 31,    2003      |               |   | December 31,    2002   |  
|------------------------ |  | ---------------------- | ------------- | - | ---------------------- | -
|                         |  |                        |               |   |                        |  
|                         |  | Reorganized    Company |               |   | Predecessor    Company |  
|                         |  |                        |               |   |                        |  
|                         |  |                        | (unaudited)   |   |                        |  
|                         |  |                        | (in millions) |  
|Customer lists           |  | $                      | 214.2         |   |                        | $
|Accumulated depreciation |  |                        | (2.4          | ) |                        |  
|                         |  |                        |               |   |                        |  
|                         |  | $                      | 211.8         |   |                        | $
|                         |  |                        |               |   |                        |  




The change in customer lists is primarily the result of the $146.8  million increase in the carrying value upon the adoption of fresh-start  reporting as of January 1, 2003.





The estimated amortization expense for customer lists is approximately  $9.7 million per year, for each of the next five years.





|8. | Investments    in and Loans to Affiliates - Reorganized Company
|-- | ---------------------------------------------------------------




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





Investments in which the Company does not have the ability to exercise  significant influence (less than 20% ownership) are accounted for on the cost  method.





The following is a description of the Companys major investments, listed  by subsidiary:





Premium  TV Limited





Premium TV, a wholly-owned subsidiary
    of Parc Holdings, is obliged to provide funding of up to approximately £32
    million ($50.1 million), at March 31, 2003, to fund various of its joint
    venture
    and other contractual interests.  Of this amount, the payment of approximately
    £18 million ($28.2 million) has been guaranteed by Parc Holdings.  If
    Premium TV fails to provide its committed funding under the relevant shareholder
    arrangements
    relating
    to
    these joint
    ventures,
    Premium TV and, in respect of the guaranteed amounts, Parc Holdings, may
    be sued for non-payment.  As a result of the recapitalization process,
    the relevant joint venture partners may assert that they can compulsorily
    acquire Premium TVs  interest in the relevant joint venture at a third
    party appraisal valuation.  Premium TV is currently in discussions with
    certain of these joint venture partners





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with a view to restructuring the relevant joint ventures. In the event  that these discussions do not reach a resolution acceptable to Premium TV,  Premium TV may seek to discontinue these joint ventures and terminate their  activities.  The Company believes,  however, that it has various defenses and protections under the Bankruptcy Code  against such actions and intends to enforce vigorously its rights and  protections.





On September 24, 2002, Premium TV, Parc Holdings and Old NTL agreed to  vary the terms of the long-term joint venture (referred to as the Football  League Joint Venture) between Premium TV and the Football League Limited.  Under the terms of the variation, upon the  payment of arrears of rights fees by Premium TV, the Football League Limited  agreed to release Premium TV from its obligation to fund the payment of any  further rights fees to the Football League Limiteds member teams and its  obligation to provide working capital funding to the Football League Joint  Venture.  The Football League Limited  also agreed to release Parc Holdings from its guarantee of Premium TVs obligations  and to release Old NTL from the related undertaking. In return, Premium TV  agreed to waive repayment of loan capital by the Football League Joint Venture  and to provide certain ongoing services to the Football League Joint Venture  free of charge for an
initial period. Parc Holdings deposited £10.33 million  into a designated single purpose account for use by Premium TV to finance the  provision of such services.  Premium TV  and the Football League Limited also agreed to new terms relating to the distribution  of revenues generated by the Football League Joint Venture.  The remaining balance in the account at  March 31, 2003 was £7.45 million (and £8.88 million at December 31, 2002) and  is included in Other Assets in the accompanying consolidated balance sheet.





The Company has also guaranteed the obligations of one of its  subsidiaries to provide funding of up to approximately £4.2 million ($6.8  million) to a joint venture whose business is the provision of programming  content.  If the relevant subsidiary  fails to provide such funding, under the shareholder arrangements relating to  this joint venture, such subsidiary may be sued for damages.  In addition, under the shareholder  arrangements relating to this joint venture, the relevant joint venture partner  may have the option to compulsorily acquire the Companys indirect interest in  the relevant joint venture at 70% of fair market value, resulting in the  Company selling its indirect interest at a potential loss.  The Company believes that it has various  defenses and protections under the United States Bankruptcy Code against such  actions and intends to enforce vigorously its rights and protections.  The Company intends to
negotiate with its  joint venture partner to address these issues.   These negotiations may not be successful and the Company may not be able  to retain its current interest in this joint venture company.  The relevant subsidiary has ceased doing  business and currently is in the process of being would up.





The following is a brief description of the Companys minority  holdings.  The Company does not believe  that these holdings, alone or in the aggregate, represent material assets.





Two Way  TV Limited





The Company has an equity interest of approximately 38% in Two Way TV  Limited.  Two Way TV is a UK market  leader in interactive and enhanced television.   Enhanced television allows viewers to participate in popular games,  sporting events and reality television programs.  Viewers can vote, guess answers and compete with studio  contestants by using a remote control device for the set top box in all digital  delivery platforms.





Two Way TV has three product lines:   eTV applications for broadcasters, eTV technology licensing and support  services for networks and a 24-hour games channel which carries Two Way TV  proprietary games.





The Companys investments in and loans to affiliates are as follows:





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|                         |  | March 31,    2003 |     
|------------------------ |  | ----------------- | ----
|                         |  |                   |     
|                         |  | (in millions)     |     
|Total equity investments |  | $                 | 13.0
|Total cost investments   |  |                   | 7.9 
|                         |  |                   |     
|Total                    |  | $                 | 20.9
|                         |  |                   |     




|9. | Investments    in and Loans to Affiliates  Predecessor Company
|-- | ---------------------------------------------------------------




During 2002, in addition to the Companys equity and cost investments  at Premium TV and its investment in Two Way TV Limited (which are more fully  described in Note 8), the Predecessor Company had investments in various  companies and joint ventures which were also accounted for under either the  equity method or the cost method.  The  Companys additional equity investments (in 2002) included its 27% interest in  Noos S.A., a French broadband company, which offers analog and digital cable  television, high speed Internet and telephone services, its 50% interest in  eKabel InvestCo, which owns 65% of iesy Hessen GmbH (iesy), the largest cable  television network in the German province of Hessen, and its 34.01% interest in  B2 (Bredband) AG (B2), a company based in Sweden, which provides access to a  broadband network that provides transmission, both to and from the customer, at  the same speed and at the same
time.





During 2002, Old NTLs share of Noos losses reduced the investment  therein to zero.  On the Effective Date,  the Company released its 27.1% interest (the Noos Interest) in Suez Lyonnaise  Télécom (Noos) to France Telecom as part of a compromise and settlement under  the terms of the Plan.  Pursuant to the  terms of the Plan, the Noos Interest was released to France Telecom in exchange  for (i) the cancellation of the shares of Variable Coupon Redeemable Preferred  Stock, Series A of Old NTL and shares of Fixed Coupon Redeemable Preferred  Stock, Series A of Old NTL, (ii) the waiver by France Telecom of its rights to  any distribution on account of its claims as a holder of Old NTL and Parc  Holdings 53⁄4% convertible subordinated notes, (iii) the release by France  Telecom of any contingent payments due to France Telecom pursuant to the 1G  Protocol and Convention Agreement, dated May 6, 1999 (the 1G
Franchises) and  the transfer of the 1G Franchises by Old NTL to Noos, and (iv) a $25 million  payment by France Telecom to the Company on the Effective Date.





On November 3, 2002, Old NTL, Parc Holdings, and Brigadoon Ventures,  Inc., a wholly-owned subsidiary of Parc Holdings, entered into an agreement,  whereby (1) Old NTL was entitled to receive a cash facilitation fee for its  cooperation in the restructuring of iesy and its subsidiaries (but not in  consideration of certain of Old NTLs subsidiaries indirect equity stake in  iesy) of approximately $1.3 million, less such subsidiaries pro rata share of  expenses and (2) such subsidiaries were entitled to receive a release of  possible liabilities and claims arising out of their indirect equity stake in  iesy, including claims alleged by certain holders of notes of iesy in the  bankruptcy.  The transactions  contemplated by the iesy agreement closed in January 2003.  In addition to the Companys share of iesys  losses, share of losses from equity investments includes a non-cash write-down  of the investment in iesy of $40.6
million in 2002.





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B2  (Bredband) AG





On April 15, 2002, a funding request for approximately $20 million was  received by Old NTL under the terms of the investment agreement relating to Old  NTLs investment in B2.  Old NTL  informed B2 and the other principal investors that it was not in a position to  comply with the request for funding.   The B2 investment agreement provides that if Old NTL fails to provide  such funding, it may be sued for non-payment and arguably could lose certain  rights under the B2 shareholders agreement including its interest in B2.





On October 4, 2002, Old NTL filed a motion with the bankruptcy court to  reject the B2 investment agreement and shareholders agreement under section  365 of the bankruptcy code, and the bankruptcy court subsequently authorized  Old NTLs rejection of the agreements.   On November 8, 2002, B2 and the other principal shareholders filed  proofs of claim with the bankruptcy court asserting their right to recover: (1)  approximately $20 million from Old NTL in respect of the unpaid funding  request; (2) unspecified damages for Old NTLs failure to perform under the  relevant agreements; and (3) unspecified costs and expenses incurred in the  exercise of their remedies under the agreements, and reserved their other  rights to avail themselves of any remedies under the agreements.





On April 30, 2003, Parc Holdings, together with its subsidiaries NTL  Sweden SPV Inc. and Nogenta Swedish Acquisition Holding B.V., entered into an  agreement with B2 and the other principal shareholders of B2 relating to, among  other things, the transfer of the Companys securities in B2.  Under the agreement, the NTL Europe parties  have agreed to transfer their interest in B2 to certain other shareholders of  B2 in exchange for approximately $375,000 in cash or certain securities of a B2  affiliate and mutual releases among the parties relating to a dispute stemming  from an April 15, 2002 funding request for approximately $20 million.  In connection with the mutual releases, the  agreement provides that B2 and the other principal shareholders will withdraw,  or otherwise assist Parc Holdings in obtaining bankruptcy court denial of, the  proofs of claim filed by B2 and the other principal shareholders in the  bankruptcy court.  The
closing of this  transaction took place in May 2003.





The Predecessor Companys investments in and loans to affiliates are as  follows:





|                         |  | December    31, 2002 |       | March 31,    2002 |  
|------------------------ |  | -------------------- | ----- | ----------------- | -
|                         |  |                      |       |                   |  
|                         |  | Ownership            |       | Balance           |  
|                         |  |                      |       |                   |  
|                         |  | (in    millions)     |      
|Noos                     |  |                      | 27.00 | %                 | $
|B2                       |  |                      | 34.01 | %                 |  
|iesy                     |  |                      | 32.50 | %                 |  
|Others                   |  |                      |       |                   |  
|                         |  |                      |       |                   |  
|Total equity investments |  |                      |       |                   |  
|Total cost investments   |  |                      |       |                   |  
|                         |  |                      |       |                   |  
|Total                    |  |                      |       |                   | $
|                         |  |                      |       |                   |  




The Predecessor Company had reclassified $18.3 million of credit  balances to Other Long-Term Liabilities, (at December 31, 2002) which related  to investments where the Company has funding commitments and losses to date,  which have exceeded the Companys investment.





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|10. | Liabilities    Subject to Compromise
|--- | ------------------------------------




Liabilities subject to compromise consist of the following:





|                                                      |  | March 31,    2003      |   |  | December    31,    2002 |  
|----------------------------------------------------- |  | ---------------------- | - |  | ----------------------- | -
|                                                      |  |                        |   |  |                         |  
|                                                      |  | Reorganized    Company |   |  | Predecessor    Company  |  
|                                                      |  |                        |   |  |                         |  
|                                                      |  | (unaudited)            |   |  |                         |  
|                                                      |  | (in millions)          |  
|Account payable                                       |  | $                      |  |  |                         | $
|Interest payable                                      |  |                        |  |  |                         |  
|Dividends payable                                     |  |                        |  |  |                         |  
|Accrued expenses                                      |  |                        |  |  |                         |  
|Redeemable preferred stock:                           |  |                        |   |  |                         |  
|Cumulative Convertible    Preferred Stock             |  |                        |  |  |                         |  
|Variable Coupon    Redeemable Preferred Stock         |  |                        |  |  |                         |  
|6.5% Redeemable    Preferred Stock                    |  |                        |  |  |                         |  
|13% Senior Redeemable    Exchangeable Preferred Stock |  |                        |  |  |                         |  
|Long term debt:                                       |  |                        |   |  |                         |  
|NTL Europe, Inc.:                                     |  |                        |   |  |                         |  
|53⁄4% Convertible    Subordinated Notes                 |  |                        |  |  |                         |  
|NTL Delaware, Inc.:                                   |  |                        |   |  |                         |  
|53⁄4% Convertible    Subordinated Notes                 |  |                        |  |  |                         |  
|                                                      |  |                        |   |  |                         |  
|Total                                                 |  | $                      |  |  |                         | $
|                                                      |  |                        |   |  |                         |  




Upon emergence from Chapter 11 reorganization and in accordance with  the Plan, all of the outstanding preferred stock of the Company and long-term  debt of the Company and Parc Holdings was canceled.





|11. | Long-Term    Debt
|--- | -----------------




Long-term debt, exclusive of amounts subject to compromise, consisted  of:





|                                       |  | March 31,    2003    Reorganized    Company |          |   | December    31,    2002    Predecessor    Company |  
|-------------------------------------- |  | ------------------------------------------- | -------- | - | ------------------------------------------------- | -
|                                       |  |                                             |          |   |                                                   |  
|                                       |  | (in    millions)                            |         
|Cablecom:                              |  |                                             |          |   |                                                   |  
|Term Loan Facility                     |  | $                                           | 1,994.3  |   |                                                   | $
|Revolving Facility                     |  |                                             | 779.3    |   |                                                   |  
|Other                                  |  |                                             | 4.9      |   |                                                   |  
|                                       |  |                                             |          |   |                                                   |  
|                                       |  |                                             | 2,778.5  |   |                                                   |  
|Less: Fair value adjustment            |  |                                             | (1,341.8 | ) |                                                   |  
|Plus: Debt Accretion to March 31, 2003 |  |                                             | 1,006.6  |   |                                                   |  
|                                       |  |                                             |          |   |                                                   |  
|                                       |  |                                             | 2,443.1  |   |                                                   |  
|Less current portion                   |  |                                             | (2,443.1 | ) |                                                   |  
|                                       |  |                                             |          |   |                                                   |  
|                                       |  | $                                           |         |   |                                                   | $
|                                       |  |                                             |          |   |                                                   |  




Under the provisions of Fresh Start Accounting, the Reorganized Company  recorded the Cablecom debt at its estimated fair value, resulting in a gain on  January 1, 2003 of $1,341.8 million.   Substantially all of Cablecoms debt was due on April 30, 2003 (although  subsequent extensions granted by Cablecoms lenders have delayed the maturity  date to September 10, 2003; provided that if certain core documents to the  proposed Cablecom restructuring are agreed to by the coordinators of the bank  loan and certain principal investors and posted to the Cablecom banks  intra-links for distribution by midnight on August 31, 2003, then the due date  shall be automatically extended from September 10, 2003 to October 31,  2003).  During 2003, the Reorganized  Company was required to accrete Cablecoms outstanding debt back to its full  face value at its maturity date (April 30, 2003).  Therefore, during the first quarter of
2003,





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the Reorganized Company charged  Interest Expense for approximately $1,006.6 million to reflect the accreted  value of the Cablecom debt at March 31, 2003.   The remaining accretion will be recorded during the second quarter of  the year.





In March 2000, Cablecom borrowed CHF 2,700.0 million ($1,951.8 million)  at December 31, 2002 under its term loan facility in connection with the acquisition  of the Cablecom business.  Interest is  payable at least every six months at Swiss LIBOR plus a margin rate of 2.5% per  annum, which is subject to adjustment.   The effective interest rate was 3.51% at December 31, 2002.  Although the term loan facility was  originally scheduled to mature on April 30, 2003, upon the request of Cablecom,  the maturity date has been extended to September 10, 2003; provided that if  certain core documents to the proposed Cablecom restructuring are agreed to by  the coordinators of the bank loan and certain principal investors and posted to  the Cablecom banks intra-links for distribution by midnight on August 31,  2003, then the due date shall be automatically extended from September 10, 2003  to October 31, 2003.





Cablecom had the option to draw on a revolving facility of up to an  additional CHF 1,400 million.  The  amount available had been capped at CHF 1,055 million although the availability  may be increased with the consent of the requisite majority of the  lenders.  At December 31, 2002, Cablecom  had borrowed CHF 1,055.0 million ($762.7 million) and Cablecom has subsequently  borrowed an additional CHF 37 million for accrued interest payments.  Interest is payable at least every six months  at Swiss LIBOR plus a margin rate of 2.5% per annum, which is subject to  adjustment. The effective rate of interest was 3.71% at December 31, 2002.  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. Although the revolving  facility was originally scheduled to mature on April 30, 2003, upon the request  of Cablecom, the maturity date has
been extended to September 10, 2003;  provided that if certain core documents to the proposed Cablecom restructuring  are agreed to by the coordinators of the bank loan and certain principal  investors and posted to the Cablecom banks intra-links for distribution by  midnight on August 31, 2003, then the due date shall be automatically extended  from September 10, 2003 to October 31, 2003.





As described in more detail in Note 15, Cablecom does not have  sufficient resources to satisfy these bank obligations.  In addition, Cablecom and certain of its  subsidiaries are overindebted under Swiss law and, accordingly, may be  required to file for insolvency proceedings in Switzerland.  Cablecom and its lenders have been involved  in ongoing discussions regarding a complete financial restructuring of Cablecom  which will, among other things, reduce the amount of bank debt outstanding,  extend the maturity date thereof and resolve the Swiss overindebtedness  issue.  The proposed restructuring is  subject to various closing conditions, including the negotiation, completion  and execution of definitive documentation.   Cablecoms lenders have also agreed  to a moratorium on the payment of interest and commitment commission accruing  between May 30, 2003 and the date on which Cablecoms credit agreement is
restated as part of the financial restructuring (when a portion of the accrued  amounts will be added to the principal amount of the facility).  If Cablecom is subject to an insolvency  proceeding before its credit agreement is restated, Cablecoms lenders have  agreed to waive such interest and commitment commission.





In the event that the proposed restructuring is completed, the Company  expects that its remaining interest in Cablecom will be acquired for an amount  not in excess of $15 million.  If such proposed restructuring is unsuccessful,  the Company expects to be deprived of all its ownership interest in Cablecom.  Accordingly, the Company anticipates that,  in the near future, the results of Cablecom will no longer be reported as part  of the Companys consolidated results of operations.  In that regard, it should also be noted that, in accordance with  the terms of the existing Cablecom credit agreement, no dividends,  distributions or other payments have ever been or will be made by Cablecom to  the Company.  Further, the lenders under  Cablecoms credit facility have no legal recourse to any assets of the NTL  Europe group, other than to the shares of Cablecom, certain assets of the  Cablecom group and certain assets of the
Companys subsidiaries which hold,  directly or indirectly, the shares of the Cablecom group.





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|12. | Mandatorily    Redeemable Preferred Stock
|--- | -----------------------------------------




The Companys charter authorizes the issuance of 8,000,000 shares of  10% Fixed Coupon Redeemable Preferred Stock, par value $0.01 per share.  Approximately 7,364,000 shares of the  Preferred Stock were issued and outstanding on the Effective Date of the Plan  prior to the redemption of $25 million of liquidation preference of the  Preferred Stock pursuant to the Plan.   Immediately after such redemption, approximately $343 million of  liquidation preference of the Preferred Stock remains outstanding, which is  equal to 6,864,000 shares of Preferred Stock.   The redemption date of such mandatorily redeemable preferred stock is  January 10, 2023.





Each share of the Fixed Coupon Redeemable Preferred Stock entitles its  holder to receive cumulative dividends, when, as and if declared by the board  of directors, out of funds legally available for the payment of dividends.  With respect to those dividends, the  Preferred Stock will rank senior to all classes of the Companys Common Stock.





Dividends are payable at the semi-annual rate of $2.50 per share  (subject to adjustment for stock splits, stock dividends, combinations,  recapitalizations or other similar transactions) payable by the Company in cash.  Dividends on the Preferred Stock are payable  on a pro rata basis with respect to shares of the Preferred Stock in arrears on  June 30 and December 31 of each year (commencing on June 30, 2003) and are  cumulative at a 10% annual rate and are compounded on a semi-annual basis until  paid or satisfied in full from the date of issue whether or not they have been  declared and whether or not there are profits, surplus or other funds legally  available for the payment of such dividends.





No dividends or distributions may be declared, made, paid or set apart  for payment upon any of the Companys stock ranking on parity with the  Preferred Stock, nor may any stock ranking on parity with the Preferred Stock  be redeemed, purchased or otherwise acquired for any consideration (or any  monies paid to or made available for a sinking fund for the redemption of any  parity securities) by the Company (except by conversion into or exchange for  the Companys stock ranking on parity with the Preferred Stock) unless, in each  case: (i) full cumulative dividends on all outstanding shares of the Preferred  Stock have been paid or set apart for payment for all dividend payment periods  terminating on or prior to the date of the declaration, payment, redemption,  purchase or other acquisition and (ii) the Company is not in default with  respect to any obligation to redeem the Preferred Stock.  Notwithstanding the foregoing, if the  Company is
not in default with respect to any redemption of shares of the  Preferred Stock, dividends may be declared and paid or set apart for payment on  shares of parity securities if, dividends declared upon shares of the Preferred  Stock and all dividends declared upon any parity securities are declared  ratably in proportion to the respective amounts of dividends accumulated and  unpaid on the Preferred Stock and accumulated and unpaid on such parity  securities.





|13. | Comprehensive    Loss
|--- | ---------------------




The Companys comprehensive loss was as follows:





|                                |  | Three    months ended    March 31, |         
|------------------------------- |  | ---------------------------------- | --------
|                                |  |                                    |         
|                                |  | 2003                               |         
|                                |  |                                    |         
|                                |  | (in millions    of dollars)        |         
|                                |  | Reorganized    Company             |         
|                                |  |                                    |         
|                                |  | (unaudited)                        |         
|Net loss for the period         |  | $                                  | (1,037.4
|Currency translation adjustment |  |                                    | (10.1   
|Unrealized gain on investments  |  |                                    |        
|Unrealized loss on derivatives  |  |                                    | (2.4    
|                                |  |                                    |         
|                                |  | $                                  | (1,049.9
|                                |  |                                    |         




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|14. | Related    Party Transactions
|--- | -----------------------------




On the Effective Date, the Company entered into a Transitional Services  Agreement with New NTL.  Under the  Transitional Services Agreement, New NTL has agreed to provide the Company with  certain administrative and technical support for a limited period of time where  its personnel had previously been providing support to the companies now  comprised within the Companys group of companies.  New NTL has agreed to provide the Company with support if and  when requested in the following areas: accounting, payroll and financial  reporting support, technical and purchasing assistance to the Companys Spanish  business, access to New NTLs internal legal and tax advisors with respect to  historic matters and continued support in the management and monitoring of  certain of the joint ventures in which the Company has investments.  This agreement provides that New NTLs  employees shall, as appropriate, prioritize work performed
for New NTL ahead of  work performed on behalf of the Company.





In addition, under the Transitional Services Agreement, New NTL  provides the services of five of its employees to the Company seconded on a  full-time basis for a period of up to two years (at the Companys option) and  permits the Company and its group of companies to continue to use the NTL  name for a period of up to one year, in the case of NTL Europe, and three  years, in the case of certain other of its subsidiaries.





The Company pays New NTL pre-determined charges set out in the  Transitional Services Agreement in respect of the services provided by New NTL  and its subsidiaries under the agreement based on the amount of time spent by  the relevant personnel in carrying out such work.





On September 28, 2001, NTL Communications Corp. loaned Old NTL $150.0  million in cash and received 15.0% Promissory Notes due September 30,  2004.  Interest was payable monthly in  cash at a rate of 15.0% per annum beginning on October 31, 2001.  Upon emergence from Chapter 11  reorganization and in accordance with the Plan, these notes were canceled.





On April 5, 2002, following receipt of the proceeds from the sale of  NTL Australia, Parc Holdings loaned £90.0 million to NTL (UK) Group, Inc.  Such loan was actually made (with the  approval of the lenders under the UK credit facilities) to NTL (UK) Group, Inc.  and then on-lent to certain subsidiaries of NTL (UK) Group, Inc.  Interest on the note was at 23% per annum,  compounded semiannually, and was payable, in cash, on the earlier of April 1,  2006 or the redemption date of the notes.   In connection with the DIP facility, the current interest rate on this  loan had been reduced from 23% per annum to 11% per annum.  Upon emergence from Chapter 11  reorganization and in accordance with the Plan, such debt was repaid.





Pursuant to the DIP facility, all funding needs of the debtors were  funded through the proceeds of the DIP facility, in accordance with a budget  and the terms of the DIP facility agreement. Communications Cable Funding Corp.  had entered into intercompany note agreements with Old NTL and Parc Holdings to  evidence such transactions.  The notes  earned interest on the unpaid principal amount for three months from July 15,  2002 at the rate of 11% per annum.  With  respect to each successive three month period following that date, the rate per  annum increased incrementally by 1% over the immediately preceding three month  period but will not exceed 18% per annum for any three month period.  Upon emergence from Chapter 11  reorganization and in accordance with the Plan, such debt in the amount of  $69.3 million was repaid.





Certain former officers and directors of Old NTL were also officers and  directors of ATX Communications, Inc. (ATX) (formerly known as CoreComm  Holdco, Inc.).  On April 12, 2001, Old  NTL purchased $15.0 million of an unsecured convertible note from ATX and  received warrants to purchase 770,000 shares of ATX common stock at an exercise  price of $0.01 per share that expire in April 2011.  In addition, concurrently with the note purchase and without  additional compensation, Old NTL entered into a network and software agreement  with ATX.  Under the agreement, ATX will  provide





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U.S. network for Internet traffic from Old NTLs UK customers for three  years, as well as a royalty free license to use certain billing and  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 ATX 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 ATX common stock for a specified period. Old NTL and  ATX agreed to certain modifications to the conversion feature in connection  with ATXs recapitalization in December 2001.





Premium TV has entered into a number of agreements with New NTL,  pursuant to which Premium TV receives certain operational services covering  premises, connectivity, hosting, technology and other corporate volume  purchasing benefits.  Premium TV has a  co-marketing agreement linked with New NTLs broadband product and an agreement  with New NTL where New NTL is able to exploit Premium TVs pay per view rights.





In 1999, NTL Broadcast established two subsidiaries, located in  Thailand and Malaysia.  Following  consummation of the Plan, the Company maintained ownership of the operations in  Malaysia and Thailand through two companies, NTL Broadcast Sdn and NTL  Broadcast (Thailand) Ltd. (together, NTL Asia).  The two subsidiaries are managed as one business.  Separately, New NTL maintains a branch office  in Singapore.  The Companys  subsidiaries rely on New NTLs Singapore office for administration and other  support services. The Company has entered into an agreement to jointly NTL Asia  with New NTL.





|15. | Commitments    and Contingent Liabilities
|--- | -----------------------------------------




The Company is involved in certain disputes and litigation arising in  the ordinary course of its business.   With the possible exception of the specific items discussed below, none  of the matters are expected to have a material adverse effect on the Companys  financial position, results of operations or cash flows.





Morgan  Stanley





In connection with the bar date for filing of securities laws claims  against the debtors pursuant to an order of the bankruptcy court, proofs of  claim were filed against Old NTL, Parc Holdings and NTL Communications by  Morgan Stanley Senior Funding Inc. for $11.4 million.  These claims were asserted by Morgan Stanley Senior Funding Inc.  in respect of alleged unpaid financing fees for commitments of capital made in  1999.  The Company believes it has  meritorious defenses to these claims and on May 8, 2003 filed an objection to  these claims.  At this time, the Company  cannot predict the outcome of these claims.





B2  (Bredband) AG





On April 15, 2002, a funding request for approximately $20 million was  received by Old NTL under the terms of the investment agreement relating to Old  NTLs investment in B2.  Old NTL  informed B2 and the other principal investors that it was not in a position to  comply with the request for funding.   The B2 investment agreement provides that if Old NTL fails to provide  such funding, it may be sued for non-payment and arguably could lose certain  rights under the B2 shareholders agreement including its interest in B2.





On October 4, 2002, Old NTL filed a motion with the bankruptcy court to  reject the B2 investment agreement and shareholders agreement under section  365 of the bankruptcy code, and the bankruptcy court subsequently authorized  Old NTLs rejection of the agreements.   On November 8, 2002, B2 and the other principal shareholders filed  proofs of claim with the bankruptcy court asserting their right to





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recover: (1) approximately $20 million from Old NTL in respect of the  unpaid funding request; (2) unspecified damages for Old NTLs failure to  perform under the relevant agreements; and (3) unspecified costs and expenses  incurred in the exercise of their remedies under the agreements, and reserved  their other rights to avail themselves of any remedies under the agreements.





On April 30, 2003, Parc Holdings, together with its subsidiaries NTL  Sweden SPV Inc. and Nogenta Swedish Acquisition Holding B.V., entered into an  agreement with B2 and the other principal shareholders of B2 relating to, among  other things, the transfer of the Companys securities in B2.  Under the agreement, the NTL Europe parties  have agreed to transfer their interest in B2 to certain other shareholders of  B2 in exchange for approximately $375,000 in cash or certain securities of a B2  affiliate and mutual releases among the parties relating to a dispute stemming  from an April 15, 2002 funding request for approximately $20 million.  In connection with the mutual releases, the  agreement provides that B2 and the other principal shareholders will withdraw,  or otherwise assist Parc Holdings in obtaining bankruptcy court denial of, the  proofs of claim filed by B2 and the other principal shareholders in the  bankruptcy court.  The
closing of this  transaction took place in May 2003.





Cablecom





Cablecom is the principal borrower under an amended and restated credit  agreement dated as of April 30, 2002 and effective as of May 2, 2002.  Under the credit agreement, Cablecom and one  of its subsidiaries are indebted in an amount of approximately CHF 3,792  million (which includes recent accrued interest payments).  Although the credit facility was originally  scheduled to mature on April 30, 2003, upon the request of Cablecom, the  maturity date has been extended to September 10, 2003; provided that if certain  core documents to the proposed Cablecom restructuring are agreed to by the  coordinators of the bank loan and certain principal investors and posted to the  Cablecom banks intra-links for distribution by midnight on August 31, 2003,  then the due date shall be automatically extended from September 10, 2003 to  October 31, 2003.  In addition, Cablecom  has been notified by the lenders that it is in default under the credit
agreement.  Accordingly, the lenders  could seek to accelerate the maturity of the credit facility at any time.





Cablecom does not have the resources to repay the bank debt when it  comes due, whether on the extended maturity date or upon the acceleration  thereof.  Further, as security for its  guaranty of Cablecoms obligations under the credit agreement, NTL Cablecom  Holding GmbH, the parent entity of Cablecom, has pledged to the lenders all of  the shares of Cablecom.  Accordingly,  upon the maturity of the credit facility, whether upon acceleration or  otherwise, the lenders could seek to exercise their rights under the pledge.  In such an event, although the Company would  not be liable for any of Cablecoms obligations, it would be deprived of all of  its ownership interest in Cablecom.





In addition, Cablecom and certain of its subsidiaries are  overindebted under Swiss law.  If  Cablecom is unsuccessful in consummating a transaction with its lenders to  resolve that overindebtedness issue in the near future, the board of  directors of Cablecom may be required to file for insolvency proceedings under  Swiss law.  Further, on April 9, 2003,  in accordance with Swiss law, the board of directors of Cablecom received a  letter from its auditors, Ernst & Young AG, notifying the board of Cablecom  that Cablecom and some of its subsidiaries are overindebted and, if there is  no consensual settlement on the overall financial restructuring of Cablecom or  an extension of the maturity date or any other measures taken which would cure  the overindebtedness, the board would be required to notify a Swiss court and  deposit the balance sheets for Cablecom and its subsidiaries immediately,
thereby commencing insolvency proceedings.   If Cablecom files for insolvency proceedings, it is unlikely that the  Company will retain any interest in Cablecom.





In order to seek to address the foregoing issues, Cablecom is currently  in negotiations with its lenders regarding an overall financial restructuring  of Cablecom.  If consummated, such  restructuring is expected to include a reduction in the amount of debt  outstanding, an extension of maturity date of such debt and





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control of Cablecom being assumed by the lenders.  The proposed restructuring is subject to  various closing conditions, including the negotiation, completion and execution  of definitive documentation.  Cablecoms lenders have also agreed to a  moratorium on the payment of interest and commitment commission accruing  between May 30, 2003 and the date on which Cablecoms credit agreement is  restated as part of the financial restructuring (when a portion of the accrued  amounts will be added to the principal amount of the facility).  If Cablecom is subject to an insolvency  proceeding before its credit agreement is restated, Cablecoms lenders have  agreed to waive such interest and commitment commission.





In the event that the proposed restructuring is completed, the Company  expects that its remaining interest in Cablecom will be acquired for an amount  not in excess of $15 million.  If such proposed restructuring is unsuccessful,  the Company expects to be deprived of all its ownership interest in Cablecom.  Accordingly, the Company anticipates that,  in the near future, the results of Cablecom will no longer be reported as part  of the Companys consolidated results of operations.  In that regard, it should also be noted that, in accordance with  the terms of the existing Cablecom credit agreement, no dividends,  distributions or other payments have ever been or will be made by Cablecom to  the Company.  Further, the lenders under  Cablecoms credit facility have no legal recourse to any assets of the NTL  Europe group, other than to the shares of Cablecom, certain assets of the  Cablecom group and certain assets of the
Companys subsidiaries which hold,  directly or indirectly, the shares of the Cablecom group.





Owl  Creek





On May 1, 2003, Owl Creek Asset Management, L.P., one of Old NTLs  creditors, filed an amended complaint against CRT Capital Group LLC, New NTL  and the Company in U.S. Bankruptcy Court for the Southern District of New  York.  The amended complaint concerns  certain when-issued trades of New NTLs common stock made by Owl Creek with  CRT prior to a subsequent modification of Old NTLs plan of  reorganization.  Under the modified  plan, Old NTLs creditors were entitled to receive only one-fourth the number  of shares of New NTL common stock contemplated prior to the modification.  Therefore, certain holders of New NTL common  stock sold more stock on the when-issued market than they ultimately received  under the amended plan.  On January 16,  2003, the bankruptcy court entered an order providing that sellers of New NTLs  common stock on the when-issued market may settle such
trades by reducing the  number of shares traded in each such transaction by 25% and increasing the per  share purchase price for such shares by 400%.   The order provided that buyers in such trades were required to accept  such a settlement, but the order was dissolved on February 5, 2003.  In addition to its claims against CRT, Owl  Creek has asserted claims against New NTL and the Company for breach of fiduciary  duty, gross negligence, breach of contract, promissory estoppel, contribution  and indemnification, alleging that Old NTLs creditors should have been better  informed of the changes to New NTLs common stock under the plan.  Since the securities that are the subject of  the complaint are those of New NTL, the Company does not believe that it has  any material exposure with respect to this claim.





Newcastle  United





Premium TV is engaged in litigation relating to a  dispute with one of its joint venture partners, Newcastle United plc.  On March 14, 2003, Newcastle United served  notice to terminate its joint venture agreement with Premium TV on the grounds  of Premium TVs alleged insolvency.   Premium TV is vigorously defending its position.  On April 28, 2003, Premium TV itself issued  court proceedings applying for a declaration that it was solvent.  If Premium TV is unsuccessful in its  litigation, Newcastle United would have the right to purchase Premium TVs 50%  interest in the joint venture at 50% of the appraised market value of the joint  venture.





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German Channel Providers





On July 29, 2003, Cablecom received
    a letter of counsel acting for German channel providers SAT 1, ProSieben
    and
    Kabel
    1
    requesting payment of a total of CHF 13,324,827.  The channel providers
    have threatened to institute proceedings against Cablecom if Cablecom refused
    to pay the amount as requested, which equals the total amount that the respective
    channel providers have paid to Cablecom for the distribution of a Swiss advertising
    spilt over Cablecoms network since 1996.





The channel providers claim that the current contractual compensation,  in form of a percentage fee on the advertising revenues, would be abusively  high and therefore constitute a breach of Swiss competition law.  They refer to the recent decision by the  Swiss Competition Commission ordering preliminary measures in proceedings  between Teleclub and Cablecom and holding that Cablecom has a dominant position  on the market for the distribution of TV signals to Swiss customers.





Following external legal advice and in order to protect long term  interests of Cablecom, Cablecom has decided to refuse to repay any amounts  received.  It can therefore be expected  that German channel providers will shortly initiate legal proceedings.  Same or similar action has been announced by  a second group of German channel providers has been obtained yet.





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Item 2.





MANAGEMENTS  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





The following discussion of our  financial condition and results of operations should be read in conjunction  with our financial statements and the related notes in Item 1.  This discussion contains forward-looking  statements.  Please see Risk Factors  contained in this Form 10-Q.





Overview





We currently have the following  indirect wholly-owned operating subsidiaries:





| | NTL Premium TV Holdings Corp.,    our sports TV content and internet business                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                      
| | Cablecom GmbH, our cable    business in Switzerland, ownership of most of which we are unlikely to retain    (See Risk Factors  Risk Factors Relating to Cablecom)
|  |                                                                                                                                                                      
| | NTL Lanbase, SL, our LAN/WAN    installation business located in Madrid, Spain                                                                                       
|  |                                                                                                                                                                      
| | NTL Broadcast (Thailand) Ltd.    and NTL Broadcast Sdn Ltd., our Asian broadcast infrastructure, services and    consulting business                                 




We currently have minority  interests in the following operating entities:





| | Two Way TV Limited, an    interactive television service provider      
|- | -----------------------------------------------------------------------
|  |                                                                        
| | ITV News Channel Limited, a    24-hour news channel located in the U.K.




Our most significant holdings  are currently being restructured and we will be reviewing all of our holdings  to determine the most appropriate course of action.  Our board of directors and management are exploring the strategic  and financial alternatives available to us.   Some alternatives may include, among others, our restructuring around  one or more of our existing business units, a sale of assets, a going-private  transaction or the ultimate liquidation and winding up of our operations and  the distribution of available proceeds to our stockholders.  We may not receive any proceeds from any of  these transactions after the payment of outstanding debt that some of these  companies may owe and any fees and expenses incurred in connection with these transactions.  See, in particular, Risk Factors  Risk  Factors Relating to Cablecom.  To the  extent we receive cash proceeds from any asset
sale we or our subsidiaries  complete, the 10% Fixed Coupon Redeemable Preferred Stock, Series A, par  value $0.01 per share (with a $50.00 liquidation preference per share) (the  Preferred Stock) will be entitled to  mandatory redemption in a like amount, subject to some limited exceptions set  forth in our charter, until all shares of the Preferred Stock (having an aggregate  of $343 million in liquidation preference) have been redeemed.  Given the liquidation preference on the  Preferred Stock and the anticipated value of our assets, it is unlikely that  any such liquidation will generate any proceeds or distributions to the holders  of our common stock.





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Separation from NTL Incorporated; Fresh  Start Accounting





On January 10, 2003, the company  then known as NTL Incorporated (Old NTL) emerged from bankruptcy protection  and consummated its reorganization plan.   Through this reorganization plan, Old NTL was separated into two independent companies, effective January 10,  2003.  One company, which assumed  the name NTL Incorporated, holds substantially all of Old NTLs assets in the  United Kingdom and Ireland (New NTL).   Our company, which assumed the name NTL Europe, Inc., is the other  entity that was created and we hold various assets in Europe and elsewhere.





With the separation of Old NTL into two entities, the  majority of the significant assets and holdings of Old NTL were retained by New  NTL.  Generally, other than Cablecom  (which itself is being restructured, See Risk  Factors  Risk Factors Relating to Cablecom), our assets are not  material compared to those of New NTL.  As discussed below, in the near future, we expect our interest in  Cablecom to be reduced to, at most, a small minority position.  Further, as discussed above, our board of  directors and management are exploring the strategic and financial alternatives  available to us.  Accordingly, the  historical financial statements of Old NTL for periods prior to January 1,  2003, are not particularly reflective of our current and anticipated future  business and should not be relied upon as indicative of our future performance.





Cablecom has approximately CHF 3,792 million in bank  debt (which includes recently accrued interest payments) that matured on April  30, 2003.  Cablecoms lenders have  extended such due date until September 10, 2003; provided that if certain core  documents to the proposed Cablecom restructuring are agreed to by the  coordinators of the bank loan and certain principal investors and posted to the  Cablecom banks intra-links for distribution by midnight on August 31, 2003,  then the due date shall be automatically extended from September 10, 2003 to  October 31, 2003.  However, Cablecom has  insufficient resources to satisfy such obligation.  In addition, Cablecom and certain of its subsidiaries are  overindebted under Swiss law and, accordingly, may be required to file for  insolvency proceedings in Switzerland.   Cablecom and its lenders have been in discussions regarding a complete
financial restructuring of Cablecom and, on June 19, 2003, Cablecoms board of  directors had been advised that 100% of its lenders and other holders of  economic interests in Cablecoms bank debt have agreed upon the principal terms  and parameters for the restructuring of that debt.





The principal terms  for the financial restructuring are:





| |  | The outstanding principal    amount of the debt would be reduced from approximately CHF 3.8 billion to approximately    CHF 1.7 billion.                                                       
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                
| |  | The facility would be split    into two tranches, one with a final maturity date of December 31, 2009 and    one with a final maturity date of June 30, 2010.                                  
| |   |                                                                                                                                                                                                
| |  | Cablecoms lenders would    acquire control of substantially all of Cablecoms share capital, with our    remaining interest being acquired by certain members of the new shareholder    group.
| |   |                                                                                                                                                                                                
| |  | At the time of the    consummation of the restructuring, the additional equity capital would be    raised through a rights offering to the new shareholder group.                              




The proposed  restructuring is subject to various closing conditions, including the  negotiation, completion and execution of definitive documentation.  Cablecoms  lenders have also agreed to a moratorium on the payment of interest and  commitment commission accruing between May 30, 2003 and the date on which  Cablecoms credit agreement is restated as part of the financial restructuring  (when a portion of the accrued amounts will be added to the principal amount of  the facility).  If Cablecom is subject  to an insolvency proceeding before its credit agreement is restated, Cablecoms  lenders have agreed to waive such interest and commitment commission.  In the event that the proposed  restructuring is completed, we expect that our remaining interest in Cablecom  will be acquired for an amount not in excess of $15 million.  If such  proposed restructuring is unsuccessful, we expect to be deprived of
all our





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ownership interest in Cablecom.   Accordingly, we anticipate that, in the near future, the results of  Cablecom will no longer be reported as part of our consolidated results of  operations.  In that regard, it should  also be noted that, in accordance with the terms of the existing Cablecom  credit agreement, no dividends, distributions or other payments have ever been  or will be made by Cablecom to us.   Further, the lenders under Cablecoms credit facility have no legal  recourse to any assets of the NTL Europe group, other than to the shares of  Cablecom, certain assets of the Cablecom group and certain assets of our  subsidiaries which hold, directly or indirectly, the shares of the Cablecom  group.  As a result, our financial statements  which include the assets and results of Cablecom may not necessarily reflect  our results of operations, financial position and cash flows in the future.





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





Pursuant to fresh-start reporting, a new entity was  deemed created for financial reporting purposes and the carrying value of our  assets and liabilities was adjusted.   The carrying value of our assets was adjusted to their reorganization  value that is equivalent to their estimated fair value.  The carrying value of our liabilities was  adjusted to their present value.


Application of Critical Accounting Policies  and Estimates





Our consolidated financial statements and related  financial information are based on the application of generally accepted  accounting principles in the United States.   GAAP requires the use of estimates, assumptions, judgments 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 our financial  statements, either because of the significance of the financial statement item  to which they relate, or because they require more judgment and estimation due  to the uncertainty involved in measuring, at a specific point in time,  transactions which are continuous in nature.





| | We maintain allowances for doubtful accounts and    notes receivable for estimated losses resulting from the potential inability    of our 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.                                                                                                                                                                                     
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Our determination of the treatment of contingent    liabilities in the financial statements is based on a view of the expected    outcome of the applicable contingency.     We consult legal counsel on matters related to litigation.  We also consult with experts both within    and outside our company with respect to other matters that arise in the    ordinary course of business.  Examples    of such matters that are based on assumptions, judgments 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.




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| | We review long-lived assets and goodwill for    impairment as described in the Notes to Consolidated Financial Statements,    included in the Companys Annual Report on Form 10-K for the year ended    December 31, 2002.  We obtained a    valuation from an independent financial advisor 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,    judgments 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 judgments and the use of estimates.  Changes in technology or changes in    intended use of these assets may cause the estimated useful life to change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The valuation of our 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 our pension    expense and funding requirements.                                                                                                                                                                                                                                                                                                                                                                                                                    




Results of Operations





The following results of operations include our  continuing operations.  Although we do  not expect Cablecom to be included in our consolidated results in the future  (See Risk Factors  Risk Factors Relating  to Cablecom), because Cablecom is currently one of our wholly-owned  subsidiaries, these results of operations include Cablecom.





First  Quarter Ended March 31, 2003 Compared to 2002.





Revenue, for the first quarter of the year, increased  35.0 percent to $119.6 million from $88.6 million in 2002.  The increase in revenue is primarily due to  the effect of the strength of the Swiss Franc against the U.S. dollar for the  quarter presented and increases in television subscribers, broadband revenues  and business systems customers, at our Cablecom unit, which more than offset  the effects of reduced revenues at Premium TV.   Revenue from our other businesses also reflected growth in the  comparable period but only account for approximately two percent of our  consolidated revenue for the current quarter.   Premium TVs revenues, in local currency, decreased approximately 50 percent  and reflected the loss of ITV Digitals programming revenue for British  Eurosport (when ITV Digital filed for bankruptcy), and reductions in the stream  of revenue due to a change in its agreement with the Football
League (which  altered various terms of the financial aspects of the joint venture with the  league).  During the first three months  of  2003 and 2002, Cablecom accounted  for 94 percent and 89 percent, respectively, of our consolidated revenue.





Operating expenses (excluding depreciation, which is  discussed below) totaled $44.2 million and equaled the amount reported for the  first three months of 2002.  In local  currency, Cablecom reported a 5.6 percent reduction in its operating expense,  due to continued cost cutting containment programs.  Cablecoms operating expenses as a percentage of its revenue, in  local currency, decreased to 34.8 percent for the first quarter of 2003 from  42.6 percent for last years first quarter.   Premium TVs operating expenses decreased (in both local currency and U.S.  dollars) as a result of staffing cutbacks and the reduction in media rights  charges as rights contracts expired.   During the three months ended March 31, 2003 and 2002, Cablecom  accounted for 88 percent and 76 percent, respectively, of our consolidated  operating expenses.





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Selling, general and administrative expenses increased  by $9.3 million during the first quarter of 2003 over the amount reported for  the first quarter of 2002.   Approximately one-half of the increase is attributed to the strength of  the Swiss Franc against the U.S. Dollar for the quarters presented.  The remaining increase relates primarily to  the increased costs at Cablecom to support its business growth.  In local currency, Cablecoms ratio of  selling, general and administrative expenses as a percent of sales increased to  26.1 percent in the first quarter of 2003 from 22.7 percent for the prior  years comparable quarter.  This  represents an increase of 14.9 percent on a sales increase of more than 15  percent for the periods presented.   Premium TV reported a decrease in selling, general and administrative  expenses reflecting Premium TVs cost reduction program during 2002 and the
impact of the carrying value of its internet platform.  Premium TV amortizes its internet and  development costs over a three year period and incurred large provisions in  2001 for the internet platform which was developed and launched during late  1999 and early 2000.  The charges  incurred in respect of these development costs decreased in 2002 from a peak in  2001.





Other charges increased by approximately $2.6 million  in the first quarter of 2003 compared to the first quarter of 2002.  The increase relates to the information  technology integration program at Cablecom, which is close to completion.





Corporate expenses decreased by 32 percent to $4.7  million for the first three months of 2003 from $6.9 million during last years  first quarter.  The decrease in  corporate expenses reflects the significant decrease in general corporate  spending including a reduction of staff and a reduction of legal, accounting  and other professional fees.





Depreciation expense for the first quarter of the year  totaled $45.7 million, which approximates last years amount of $45.9  million.  However, in local currency,  Cablecoms depreciation for the first quarter of the year reflected a reduction  of approximately seven percent due to the adoption of Fresh Start Accounting  and the related reduction in the carrying value of Cablecoms depreciable fixed  assets.





Amortization expense during the first quarter of 2003  decreased by 86 percent to $2.5 million from $17.8 million for the first  quarter of the prior year.  The decrease  in due almost entirely to the change in the amount of and amortizable life of  the value of the customer lists at Cablecom due to the adoption of Fresh Start  Accounting at our Cablecom unit.





Interest income and other income and expense, net was  $0.1 million of net expense for the first three months of 2003, down from $11.3  million of income for last years first quarter.  The change is due to a reduction in interest income, losses  recorded on our investments carried on the cost basis of accounting and an  increase in expenses for a miscellaneous nature.





Interest expense for the first quarter of the year is  comprised of two elements.  One relates  to the normal interest expense incurred during the first three months of the  year on the Companys face value of its outstanding debt, and amounted to $28.5  million.  The second element of the  first quarters interest expense figure relates to the accretion, during the  current quarter, on the Cablecom debt.   Under the provisions of Fresh Start Accounting, the Company recorded the  Cablecom debt at its estimated fair value, resulting in a gain on the  write-down of Cablecoms outstanding debt on January 1, 2003 of $1,341.8  million.  Substantially all of  Cablecoms debt was due on April 30, 2003 (although subsequent extensions  granted to Cablecom by its lenders have delayed the maturity date to September  10, 2003; provided that if certain core documents to the proposed Cablecom  restructuring are
agreed to by the coordinators of the bank loan and certain  principal investors and posted to the Cablecom banks intra-links for  distribution by midnight on August 31, 2003, then the due date shall be  automatically extended from September 10, 2003 to October 31, 2003).  During the first quarter of 2003, the  Company was required to accrete Cablecoms outstanding debt back to its full  face value at its original maturity date (April 30, 2003).  Therefore, during the first quarter of 2003,  the Company charged Interest Expense for approximately $1,006.6 million to  reflect the accreted value of the Cablecom debt at March 31, 2003.





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The remaining accretion will be recorded during the second quarter of  the year.  Interest expense for the  first three months of 2002 totaled $46.9 million.  This relates to the current years normal interest expense of  $28.5 million.  This reduction primarily  reflects the interest expense recorded during the first quarter of 2002 on the  Predecessor Companys outstanding publicly traded notes which were subsequently  cancelled (along with the outstanding interest payment obligations) upon the  effective date of the bankruptcy plan.   The decrease also reflected lower interest rates on the Cablecom credit  facility during the periods presented.





Share of losses from equity investments totaled $0.4  million during the first three months of 2003, as compared to $49.2 million in  the comparable 2002 quarter.  The  decrease in share of losses from equity investments resulted primarily due to  the effects of a reduction in net losses of various investees and a non-cash  write-down of our investment in iesy Hessen GmbH of $40.6 million in 2002.  We reduced our investment in iesy based on  our assessment that the carrying value was not recoverable.





Foreign currency transaction gains (losses) was a gain  of $0.5 million for the first three months of 2003 compared to a break even  position in 2002.  The change is  primarily due to the effect of changes in exchange rates on receivables  denominated in non-U.S. dollar currencies held by subsidiaries whose functional  currency is the U.S. dollar.





There were no charges for recapitalization items, net  in the first quarter of the year versus a charge of $13.7 million for the first  three months of 2002.





We reported an income tax charge of $0.7 million for  the first quarter of 2003 as compared to an income tax benefit of $10.8 million  in last years first quarter.  This  change is the combined result of fresh start accounting and a reduction of the  tax deductibility of operating losses in 2003 versus the prior year.





Loss from discontinued operations totaled $470.5  million (net of income tax benefits of $12.5 million) in the first quarter of  2002.  Losses from discontinued  operations included NTL Communications Corp. and subsidiaries, NTL Australia  and Rediffusion (a subsidiary of Cablecom). Their combined operations generated  the net losses for the first quarter of 2002.





Liquidity  and Capital Resources





We emerged from bankruptcy on January 10, 2003, at  which time, as part of the reorganization plan, all of our secured debt, common  stock and preferred stock was cancelled and new common stock and Preferred Stock  was issued.  Further, upon the  consummation of the reorganization plan (after taking into account the  redemption for cash of $25 million of our Preferred stock), we had  approximately $63 million in cash and our subsidiaries (other than Cablecom)  had an additional amount of approximately $11 million in cash.





We are primarily a holding company for the stock of  our subsidiaries, with no material independent source of cash proceeds.  During 2003, we do not anticipate receiving  any material cash proceeds from our subsidiaries.  Accordingly, we expect to fund our operations primarily out of  our cash of approximately $63 million and our subsidiaries (other than  Cablecom) cash of approximately $11 million remaining after the consummation of  the reorganization plan.  During 2003,  we do not anticipate borrowing any material amount of funds and we do not  expect to issue any of our securities for cash.  Further, during 2003, we do not anticipate any material capital  expenditures.





We expect to either complete a restructuring of the  debt and equity of Cablecom, in the near future, which would result in the  acquisition of our interest in Cablecom or a dilution of our ownership interest  to less then five percent or, if this restructuring is not successful, to file  for the insolvency of Cablecom in Switzerland, which would result in our having  no remaining ownership in Cablecom.  In  either of these events, the lenders under  Cablecoms credit facility would have no legal recourse to any assets of the  NTL Europe group, other than to the shares of Cablecom, certain assets of the  Cablecom





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group and certain assets of our subsidiaries  which hold, directly or indirectly, the shares of the Cablecom group.





In the event that the proposed restructuring is  completed, the Company expects that its remaining interest in Cablecom will be  acquired for an amount not in excess of $15 million.  If such proposed  restructuring is unsuccessful, the Company expects to be deprived of all its  ownership interest in Cablecom.   Accordingly, the Company anticipates that, in the near future, the  results of Cablecom will no longer be reported as part of the Companys  consolidated results of operations.  In  that regard, it should also be noted that, in accordance with the terms of the  existing Cablecom credit agreement, no dividends, distributions or other  payments have ever been or will be made by Cablecom to the Company.  Further, the lenders under Cablecoms credit  facility have no legal recourse to any assets of the NTL Europe group, other  than to the shares of Cablecom, certain assets of the Cablecom group and
certain assets of the Companys subsidiaries which hold, directly or  indirectly, the shares of the Cablecom group.





Our management and board are exploring strategic and  financial alternatives available to us, including our possible liquidation, a  going-private transaction and the sale of our remaining assets.  During 2003, our primary expenses are  expected to consist of operating expenses, including salaries, professional  fees, insurance and severance costs, as well as certain funding obligations to  certain of our subsidiaries of approximately $13.5 million (but not including  certain guarantees to our subsidiaries in the aggregate amount of approximately  £4.2 million).  (See Note 15 -  Commitments and Contingencies).   Further, after reserving for certain contingent liabilities, to the  extent we have remaining funds legally available, we intend to pay dividends on  or redeem shares of our Preferred Stock.  The liquidation preference of Preferred Stock aggregates $343  million.  In addition, our
Preferred  Stock is also entitled to mandatory redemption out of the net proceeds of any  asset sale for cash that we or our subsidiaries complete, subject to some limited  exceptions set forth in our charter.   Accordingly, it is highly unlikely that common shareholders will ever  receive any distribution related to their shares.





We believe that our existing cash and cash equivalents  will be sufficient to support our expected operations and fund our capital  commitments through at least April 1, 2004, which, as previously noted, will  exclude Cablecom.





Contractual Obligations and Commercial Commitments





The following table includes aggregate information  about our contractual obligations as of March 31, 2003, as adjusted to give  effect to our emergence from Chapter 11 reorganization, and the periods in  which payments are due.  The following  table includes Cablecom which, as discussed elsewhere in the Form 10-Q, is not  expected to be included in our consolidated results in the near future.  Cablecoms total long-term debt, operating  lease commitments and unconditional purchase obligations, included in the table  below, were $2,778.7 million, $30.8 million and $59.3 million, respectively.





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|Contractual Obligations            |  | Total                 |         | Less than     1 Year |   | 1-3    Years |  | 4-5    Years |      | After    5 Years |  
|---------------------------------- |  | --------------------- | ------- | -------------------- | - | ------------ |  | ------------ | ---- | ---------------- | -
|                                   |  |                       |         |                      |   |              |  |              |      |                  |  
|                                   |  | (dollars in millions) |        
|Long-Term Debt                     |  | $                     | 2,778.7 |                      | $ | 2,778.7      |  | $            |     |                  | $
|Capital Lease Obligations          |  |                       |        |                      |   |             |  |              |     |                  |  
|Operating Leases                   |  |                       | 32.7    |                      |   | 4.8          |  |              | 10.2 |                  |  
|Unconditional Purchase Obligations |  |                       | 111.2   |                      |   | 62.5         |  |              | 18.4 |                  |  
|Other Long-Term Obligations        |  |                       |        |                      |   |             |  |              |     |                  |  
|                                   |  |                       |         |                      |   |              |  |              |      |                  |  
|Total Contractual Cash Obligations |  | $                     | 2,922.6 |                      | $ | 2,846.0      |  | $            | 28.6 |                  | $
|                                   |  |                       |         |                      |   |              |  |              |      |                  |  




The following table includes aggregate information about our commercial  commitments as of March 31, 2003.   Commercial commitments are items that we could be obligated to pay in  the future.  They are not required to be  included in the consolidated balance sheet.   Cablecom had no other commercial commitments outstanding at March 31,  2003.





|Other Commercial Commitments   |  | Total    Amounts    Committed |      | Less than    1 Year |   | 1-3    Years |  | 4-5    Years |      | Over    5 Years |  
|------------------------------ |  | ----------------------------- | ---- | ------------------- | - | ------------ |  | ------------ | ---- | --------------- | -
|                               |  |                               |      |                     |   |              |  |              |      |                 |  
|                               |  | (dollars in millions)         |     
|Guarantees                     |  | $                             |     |                     | $ |             |  | $            |     |                 | $
|Lines of Credit                |  |                               |     |                     |   |             |  |              |     |                 |  
|Standby Letters of Credit      |  |                               |     |                     |   |             |  |              |     |                 |  
|Standby Repurchase Obligations |  |                               |     |                     |   |             |  |              |     |                 |  
|Other Commercial Commitments   |  |                               | 27.3 |                     |   | 6.4          |  |              | 16.1 |                 |  
|                               |  |                               |      |                     |   |              |  |              |      |                 |  
|Total Commercial Commitments   |  | $                             | 27.3 |                     | $ | 6.4          |  | $            | 16.1 |                 | $
|                               |  |                               |      |                     |   |              |  |              |      |                 |  




Recent
Accounting Pronouncements





In May 2003, the Financial Accounting Standards Board  (FASB) issued SFAS No. 150, Accounting for Certain Financial Instruments  with Characteristics of both Liabilities and Equity.  SFAS No. 150 establishes standards for classifying and measuring  as liabilities certain financial instruments that embody obligations of the  issuer and have characteristics of both liabilities and equity.  SFAS No. 150 represents a significant change  in practice in the accounting for a number of financial instruments, including  mandatorily redeemable equity instruments.   The Company has evaluated its 10% mandatorily redeemable preferred stock  and determined that it meets the definition of a liability as set forth in SFAS  No. 150 because it is mandatorily redeemable on a fixed date.  Accordingly, as of July 1, 2003, the Company  will record the mandatorily redeemable preferred stock at its then fair value
as debt, and accrete as interest expense the difference between such amount and  the amount that will be payable on the redemption date, January 10, 2023.





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





In January 2003, the FASB issued FASB Interpretation  No. 46, Consolidation of Variable Interest Entities (FIN 46), which  requires variable interest entities to be consolidated by the primary  beneficiary of the entity if certain criteria are met.  FIN 46 is effective immediately for all new  variable





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interest entities created or acquired
    after January 31, 2003.  For variable interest entities created or
    acquired prior to February 1, 2003, the provisions of FIN 46 will become
    effective for the Company during the third quarter of 2003.  The Company
    is presently evaluating whether it will be required to consolidate from July
    1, 2003 any
    of its unconsolidated affiliates presently accounted for using the equity
    method as a result of the effectiveness of FIN 46.





In November 2002, the Emerging Issues Task Force  reached a consensus on EITF No. 00-21, Revenue Arrangements with Multiple  Deliverables (EITF 00-21).  EITF  00-21 provides guidance on how to account for arrangements that involve the  delivery or performance of multiple products, services and/or rights to use  assets.  The provisions of EITF 00-21  will apply to revenue arrangements entered into in fiscal periods beginning  after June 15, 2003.  The adoption of  EITF 00-21 is not expected to have a significant effect on the results of operations,  financial condition or cash flows of the Company.





In July, 2002, the Financial Accounting Standards  Board issued Statement of Financial Accounting Standards (SFAS) No. 146,  Accounting for Costs Associated with Exit or Disposal Activities.  SFAS No. 146 replaces Emerging Issues Task  Force Issue No. 94-3 Liability Recognition for Certain Employee Termination  Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred  in a Restructuring).  SFAS No. 146  requires that a liability for costs associated with an exit or disposal  activity is recognized when the liability is incurred.  Under Issue No. 94-3, a liability for an  exit cost as defined is recognized at the date of a commitment to an exit or  disposal plan. SFAS No. 146 is effective for exit or disposal activities that  are initiated after December 31, 2002.   The adoption of this standard is not expected to have a significant  effect on our results of
operations, financial condition or cash flows.





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





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|Item 3. | Quantitative and Qualitative    Disclosures About Market Risk.
|------- | --------------------------------------------------------------




Market Risk





We are 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.  We do not  enter into derivative financial instruments for trading or speculative  purposes.  In the past, Old NTL entered  into derivative financial instruments to hedge interest rates related to  certain of its floating interest rate debt.   The counterparties were major financial institutions.





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.





At March 31, 2003, Cablecom had zero cost collars,  with a notional amount of CHF 1,200.0 million, to hedge exposure to the  floating interest rate indebtedness incurred under the Cablecom term loan  facility and revolving loan facility.





The following table provides information about our  floating interest rate debt and derivative financial instruments that are  sensitive to changes in interest rates as of March 31, 2003, and as adjusted to  give effect to our emergence from Chapter 11 reorganization.








|                                                                       |  | Nine    Months    Ending    12/31/03 |             | Year    Ending    12/31/04 |  | Year    Ending    12/31/05 |   | Year    Ending    12/31/06 |  
|---------------------------------------------------------------------- |  | ------------------------------------ | ----------- | -------------------------- |  | -------------------------- | - | -------------------------- | -
|                                                                       |  |                                      |             |                            |  |                            |   |                            |  
|Long-term    Debt Including Current Portion                            |  |                                      |             |                            |  |                            |   |                            |  
|CHF                                                                    |  |                                      |             |                            |  |                            |   |                            |  
|Variable Rate                                                          |  |                                      | CHF3,755. 0 |                            |  |                            |   |                            |  
|                                                                       |  |                                      | Swiss LIBOR |                            |  |                            |   |                            |  
|Average Interest Rate                                                  |  |                                      | plus 2.5    | %                          |  |                            |   |                            |  
|Average Forward    Exchange Rate                                       |  |                                      | .6227       |                            |  |                            |   |                            |  
|Interest    Rate Derivative Instruments Related to 
    Long-Term Debt |  |                                      |             |                            |  |                            |   |                            |  
|Interest Rate Swaps                                                    |  |                                      |             |                            |  |                            |   |                            |  
|Notional CHF Amount                                                    |  |                                      | CHF1,200.0  |                            |  | CHF1,200.0                 |   |                            | 
|Average Floor Strike    Rate                                           |  |                                      | 3.27        | %                          |  | 3.27                       | % |                            |  
|Average Cap Strike Rate                                                |  |                                      | 5.15        | %                          |  | 5.15                       | % |                            |  




|                                                                                  |  | Year    Ending    12/31/07 |   | Thereafter |  | Total |  | Fair Value    3/31/03 |           
|--------------------------------------------------------------------------------- |  | -------------------------- | - | ---------- |  | ----- |  | --------------------- | ----------
|                                                                                  |  |                            |   |            |  |       |  |                       |           
|Long-term    Debt Including Current Portion                                       |  |                            |   |            |  |       |  |                       |           
|CHF                                                                               |  |                            |   |            |  |       |  |                       |           
|Variable Rate                                                                     |  |                            |   |            |  |       |  |                       | CHF3,755.0
|Average Interest Rate                                                             |  |                            |   |            |  |       |  |                       |           
|Average Forward    Exchange Rate                                                  |  |                            |   |            |  |       |  |                       |           
|Interest    Rate Derivative Instruments
        Related to
        Long-Term Debt |  |                            |   |            |  |       |  |                       |           
|Interest Rate Swaps                                                               |  |                            |   |            |  |       |  |                       |           
|Notional CHF Amount                                                               |  |                            |  |            |  |      |  |                       | CHF1,200.0
|Average Floor Strike    Rate                                                      |  |                            |   |            |  |       |  |                       |           
|Average Cap Strike Rate                                                           |  |                            |   |            |  |       |  |                       |           
|                                                                                  |  |                            |   |            |  |       |  |                       |           




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|Item 4. | Controls and Procedures.
|------- | ------------------------




| | a) | Evaluation of Disclosure Controls and Procedures
| | -- | ------------------------------------------------




Based on their evaluation of our disclosure controls  and procedures as of the end of the period covered by this Quarterly Report on  Form 10-Q, our Chief Executive Officer and Chief Financial Officer have  concluded that our disclosure controls and procedures are effective to ensure  that information required to be disclosed by us in reports that we file or  submit under the Exchange Act is recorded, processed, summarized and reported  within the time periods specified in Securities and Exchange Commission rules  and forms, and include controls and procedures designed to ensure that  information required to be disclosed by us in such reports is accumulated and  communicated to our management, including our Chief Executive Officer and Chief  Financial Officer, as appropriate, to allow timely decisions regarding required  disclosure.





| | b) | Changes in Internal Controls
| | -- | ----------------------------




There were no changes that occurred during the fiscal quarter covered  by this Quarterly Report on Form 10-Q that have materially affected, or are  reasonably likely to materially affect, our internal controls over financial  reporting.





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Risk  Factors





You should strongly consider these risk factors in  evaluating an investment in us, our common stock and our Preferred Stock.  An investment in our securities involves an  extremely high degree of risk.





Risk  Factors relating to our Company and our Securities





Our common stock has little if any equity value, which makes  an investment in our common stock highly speculative.





Any investment in our common stock is highly  speculative.  There has been a  significant deterioration in valuations of assets similar to those we own and  those of our subsidiaries and affiliated joint ventures own.  In addition, our Preferred Stock has  significant rights and preferences over our common stock and it is likely that  we will never declare and pay dividends on our common stock.  As a result, there may be little if any  remaining equity value attributable to our common stock, which could be  worthless.





Holders of shares of our common stock and Preferred Stock may  have substantial difficulty in selling those shares.





Our common stock and  our Preferred Stock are not quoted on any national market or listed on any  national securities exchange.  Prices  for our common stock and our Preferred Stock are quoted on the Pink Sheets.  Securities whose prices are quoted on the  Pink Sheets do not enjoy the same liquidity as securities that trade on a  national market or securities exchange.





In addition, each  of the common stock and the Preferred Stock is a penny stock as that  term is defined in the Securities Exchange Act of 1934.  Brokers effecting transactions in a penny  stock are subject to additional customer disclosure and record keeping  obligations, including disclosure of the risks associated with low price  stocks, stock quote information and broker compensation.  In addition, brokers effecting transactions  in a penny stock are also subject to additional sales practice requirements  under Rule 15g-9 of the Securities Exchange Act including making inquiries into  the suitability of penny stock investments for each customer or obtaining a prior  written agreement for the specific penny stock purchase.  Because of these additional obligations,  some brokers will not effect transactions in penny stocks.





There may also be statutory restrictions on  transferability for some holders who received common stock or Preferred Stock  under the reorganization plan.





As a result, holders of common stock and Preferred  Stock may have substantial difficulty in selling or otherwise disposing of  those shares.





Our Preferred Stock has a significant preference over our  common stock which may result in our common stockholders having little value in  their investment.





Our Preferred Stock has significant rights and  preferences over our common stock.  Our  charter which governs the common stock and the Preferred Stock requires us to  pay semi-annual dividends to holders of the Preferred Stock on a cumulative  basis, and imposes limitations on the payment of dividends on the common  stock.  Furthermore, on the effective  date and pursuant to the reorganization plan, we redeemed $25 million in  aggregate liquidation preference of the Preferred Stock.  Immediately following such redemption,  approximately $343 million of aggregate liquidation preference of Preferred  Stock remains outstanding.  If we  liquidate, holders of Preferred Stock would be entitled to payment of the  liquidation preference in full before any distribution could be made to holders  of common stock.  If we





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liquidate, the holders of Preferred Stock may not receive the full  amount of their liquidation preference, and it is likely that there would be no  assets available for distribution to holders of common stock who would receive  no recovery.  Our Preferred Stock is  also entitled to mandatory redemption out of the net proceeds of any asset sale  for cash that we or our subsidiaries complete, subject to some limited  exceptions set forth in the charter.





The market price of our common stock has dropped  precipitously and may not recover.





Our common stock reached a high closing sales price of  $0.65 on January 14, 2003.  As of July  31, 2003, the closing sales price of our common stock was $0.05.  Due to a number of factors including that  our common stock is a penny stock, our common stock trades on the Pink  Sheets, most of our holdings may be restructured and the liquidation preference  of our Preferred Stock, the value of our common stock may not increase in any  significant amount.





We may not be able and are unlikely, to pay dividends on our  common stock.





Under Delaware law, unless a corporation has available  surplus it cannot pay dividends on or redeem its capital stock.  We may not have available surplus as  determined under Delaware law and may be unable to pay dividends on or redeem  any of our capital stock, unless and until such time as we have available  surplus.  The payment of dividends to  holders of common stock will be at the discretion of our board of directors and  will depend upon the availability of surplus under Delaware law, and among  other things, future earnings, operations, capital requirements, our general  financial condition and the general financial condition of our subsidiaries and  affiliated joint ventures.  It is likely  that we will never declare and pay dividends on the common stock.





Our potential liability for unpaid financing fees could  significantly reduce our cash position.





In connection with the bar date for filing of  securities laws claims against the debtors pursuant to an order of the  bankruptcy court, proofs of claim were filed against Old NTL, NTL (Delaware),  Inc., a wholly-owned subsidiary of Old NTL now known as Parc Holdings, Inc.,  and NTL Communications Corp., now known as NTL Incorporated, by Morgan Stanley  Senior Funding Inc. for $11.4 million.  These  claims were asserted by Morgan Stanley Senior Funding Inc. in respect of  alleged unpaid financing fees for commitments of capital made in 1999.  While we intend to vigorously defend against  these claims, an adverse determination of these claims could reduce our cash  for operations or distribution to our stakeholders.





Forced sales of our assets or restructurings of those assets  may subject us to stringent United States securities regulations.





A sale or restructuring of certain of our assets may  subject us to United States regulatory issues under the Investment Company Act  of 1940, as amended, associated with holding minority interests in operating  companies (instead of controlling the operations of the minority  interests).  Since the regulations governing  investment companies under the Investment Company Act are complex and  restrictive, our board of directors and senior management would most likely  examine the strategic alternatives available to us, including, among others,  seeking a merger with, or an investment in, an operating company and/or a  liquidation of our remaining assets.





Our guaranty obligations could reduce our cash position.





We have guaranteed the obligations of one of our  subsidiaries, the exposure of which is currently in the aggregate amount of up  to approximately £4.2 million.  In  addition, one of our wholly-owned subsidiaries, Parc Holdings, has guaranteed  the obligations of certain of its subsidiaries and affiliated joint ventures,  the exposure of which is currently in the aggregate amount of up to  approximately £10.5





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million.  These guarantees arise  under the performance of certain contracts by certain of our subsidiaries.  As long as these subsidiaries continue to  perform the services under these contracts, our financial obligations regarding  these guarantees would be reduced.   However, any call on these guarantees could substantially reduce our  cash position and the cash position of our subsidiaries.





Our interest in content joint ventures is dependent on the  services of a third party.





We continue to own an interest in joint ventures whose  continuance is dependent on the provision of content or services to New NTLs  cable business in the United Kingdom or the provision of certain services on  specified terms by New NTL and its subsidiaries to such joint ventures.  If New NTL breaches its carriage or service  agreements with such joint ventures or fails to renew them, we may not be able  to retain the indirect interests that Parc Holdings currently has in such joint  ventures.  Subsidiaries of New NTL are  major customers of such joint ventures and termination or non-renewal of the  carriage or service agreements may adversely affect the performance of such  joint ventures.





We have potential liabilities with respect to funding obligations  of New NTL liabilities.





In addition to the guaranty obligations of certain of  our subsidiaries and affiliated joint ventures, as a result of existing  contractual commitments, we guarantee the obligations of certain companies in  the New NTL group relating to ordinary course contracts.  If New NTL fails to meet its obligations, we  and Parc Holdings may be liable to pay sums to cover the liability of those  companies in the New NTL group with respect to such contracts and leases.





Provisions of our corporate governance documents may prevent  transactions involving a change of control of us.





Our charter and bylaws contain provisions which may  have the effect, alone or in combination with each other or with the existence  of authorized but unissued common stock and preferred stock, of preventing or  making more difficult transactions involving a change of control of our  company.  In addition, our rights  agreement may have a significant anti-takeover effect.  The rights agreement has the potential to  significantly dilute the ownership interests of an acquiror of shares of our  common stock, and therefore may have the effect of delaying, deterring, or  preventing a change in control of us.





Risk  Factors Relating to Cablecom





We are likely to lose most, if not all, of our ownership  interest in Cablecom.





Cablecom is the principal  borrower under an amended and restated credit agreement dated as of April 30,  2002 and effective as of May 2, 2002.   Under the credit agreement, Cablecom and one of its subsidiaries are indebted  in an amount of approximately CHF 3,792 million (which includes recently  accrued interest payments).  Although  the credit facility was originally scheduled to mature on April 30, 2003, upon  the request of Cablecom, the maturity date has been extended to September  10, 2003; provided that if certain core documents to the proposed Cablecom  restructuring are agreed to by the coordinators of the bank loan and certain  principal investors and posted to the Cablecom banks intra-links for  distribution by midnight on August 31, 2003, then the due date shall be  automatically extended from September 10, 2003 to October 31, 2003.   Cablecoms lenders have also agreed to a moratorium on the
payment of  interest and commitment commission accruing between May 30, 2003 and the date  on which Cablecoms credit agreement is restated as part of the financial  restructuring (when a portion of the accrued amounts will be added to the  principal amount of the facility).  If  Cablecom is subject to an insolvency proceeding before its credit agreement is  restated, Cablecoms lenders have agreed to waive such interest and commitment  commission.  In addition, Cablecom may  currently be in default under the credit agreement.  Accordingly, the lenders could seek to accelerate the maturity of  the credit facility at any time.





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Cablecom does not have the  resources to repay the bank debt when it comes due, whether on the maturity  date or upon the acceleration thereof.   Further, as security for its guaranty of Cablecoms obligations under  the credit agreement, the direct parent entity of Cablecom, has pledged to the  lenders all of the shares of Cablecom.   Accordingly, upon the maturity of the credit facility, whether upon  acceleration or otherwise, the lenders could seek to exercise their rights  under the pledge.  In such an event,  although we would not be liable for any of Cablecoms obligations, we would be  deprived of all of our ownership interest in Cablecom.





In addition, Cablecom and  certain of its subsidiaries are overindebted under Swiss law.  If Cablecom is unsuccessful in consummating  a transaction with its lenders to resolve that overindebtedness issue in the  near future (and, in any event, no later than the maturity date of the credit  agreement), the board of directors of Cablecom may be required to file for  insolvency proceedings under Swiss law.   Further, on April 9, 2003, in accordance with Swiss law, the board of  directors of Cablecom received a letter from its auditors, Ernst & Young  AG, notifying the board of Cablecom that Cablecom and some of its subsidiaries  are overindebted and, if there is no consensual settlement on the overall  financial restructuring of Cablecom, an extension of the maturity date or other  steps taken to cure the overindebtedness, the board would be required to  notify the Swiss courts
and deposit the balance sheets for Cablecom and its  subsidiaries immediately, thereby commencing insolvency proceedings.  If Cablecom files for insolvency  proceedings, it is unlikely that we will retain any interest in Cablecom.





In order to seek to address the  foregoing issues, Cablecom is currently in active negotiations with its lenders  regarding an overall financial restructuring of Cablecom and, on June 19, 2003,  Cablecoms board of directors had been advised that 100% of its lenders  and other holders of economic interests in Cablecoms bank debt have agreed  upon the principal terms and parameters for the restructuring of that debt.





The principal terms  for the financial restructuring are:





| |  | The outstanding principal    amount of the debt would be reduced from approximately CHF 3.8 billion to approximately    CHF 1.7 billion.                                                       
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                
| |  | The facility would be split    into two tranches, one with a final maturity date of December 31, 2009 and    one with a final maturity date of June 30, 2010.                                  
| |   |                                                                                                                                                                                                
| |  | Cablecoms lenders would    acquire control of substantially all of Cablecoms share capital, with our    remaining interest being acquired by certain members of the new shareholder    group.
| |   |                                                                                                                                                                                                
| |  | At the time of the    consummation of the restructuring, the additional equity capital would be    raised through a rights offering to the new shareholder group.                              




The proposed  restructuring is subject to various closing conditions, including the negotiation,  completion and execution of definitive documentation.  As part of such proposed restructuring, we are seeking to sell or  retain a small minority interest in Cablecom in consideration for our  cooperation in permitting Cablecom to reach a consensual restructuring plan  with its lenders.  There is, however, no  assurance that such proposed restructuring will be completed.  Further, whether or not the proposed  restructuring is completed, in light of, among other things, the lenders  ability to exercise their rights under the pledge, as well as the possibility  of insolvency proceedings, we expect to be deprived of our controlling interest  in Cablecom in the near future.  After  such occurrence, the results of Cablecom will not be reported as part of our  consolidated results of operations.





We anticipate that, commencing in the near future, Cablecoms  results will no longer be reported as part of our consolidated results of  operations and, therefore, the financial statements contained in this Form 10-Q  are not indicative of our future results of operations or financial condition.





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Cablecom and its lenders have been in discussions  regarding a complete financial restructuring of Cablecom which will, among  other things, reduce the amount of bank debt outstanding, extend the maturity  date thereof and resolve Cablecoms Swiss overindebtedness issue.  Whether such negotiations are successful or  not, we expect to be deprived of all  of our ownership interest in Cablecom.   Therefore, we anticipate that, in the near future, the results of  Cablecom will no longer be reported as part of our consolidated results of  operations.  Accordingly, the historical  financial statements contained in this Form 10-Q which include Cablecoms  business and results of operations are not particularly reflective of our  current and anticipated future business and should not be relied upon as  indicative of our future performance.





Even if we retain a small minority interest in Cablecom, such  interest may have little value.





Even if we retain a small minority interest in  Cablecom, the value of this small minority ownership interest will primarily  depend on the amount for which Cablecom is eventually sold.  As a result, it is unclear at this point  whether this small minority ownership interest will have any significant value  to us.





One or more of our officers may face liability as a result of  Cablecoms overindebtedness which may reduce our cash available for  distribution to our stockholders.





A number of our officers are also members of the board  of directors of Cablecom.  Under Swiss  law, a companys board is required to file for insolvency proceedings or a debt  moratorium if the company is overindebted.   If a companys board fails to timely file an overindebted company for  insolvency proceedings or a debt moratorium, then, under Swiss law, the  directors of that company may face certain liabilities.  If any of our officers are the subject of  any causes of action resulting from an untimely filing of Cablecom for  insolvency proceedings or a debt moratorium, then we may be obligated to fund  any expenses or losses incurred by these officers to the extent our insurance  would not cover them.  Any amount paid  by us to these officers could reduce the cash available for distribution to our  stockholders.





Risk  Factors Relating to Our Investment in Premium TV





If one or more of Premium TVs contracts is terminated, then  Premium TVs burden of its costs would increase and Premium TVs ability to  continue operations could be impaired.





Premium TV has a number of interrelated management  agreements and joint venture agreements.   Premium TV has been notified by one of its joint venture partners that  it wishes to terminate a contract.   Premium TV has taken action to defend its rights under this  contract.  It strongly believes that it  has fulfilled its material obligations under the agreement and that there is no  basis on which it might lawfully be terminated.  However, if the contract were terminated, it could have a material  adverse effect on Premium TVs business.





Premium TVs major revenue sources depend on the penetration  of broadband technology.





Premium TVs main assets are the internet rights it  has with over 75 UK football clubs to make available to users certain data and  video content of these football clubs through premium subscriptions.  As a result, these premium subscriptions are  some of Premium TVs main revenue sources.   Because this content is downloaded fastest and best viewed over the  internet via broadband technology, Premium TVs ability to achieve its targeted  revenue will depend on the rate of penetration of broadband technology in the  United Kingdom.





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The lack of solvency of UK professional football clubs may  have a negative effect on Premium TVs business.





A number of the football clubs with which Premium TV  has entered into internet/media rights joint ventures and other arrangements  are currently experiencing financial difficulties.  As a result of these financial difficulties, the football clubs  could seek, among other things, to make organizational changes, including staff  reductions or other changes, to reduce marketing or other support of Premium TV  initiatives, to reduce capital expenditures, to renegotiate contractual terms  or to cease operations entirely.  Any of  these developments may have a material adverse effect on Premium TVs business.





Risk  Factors Relating to NTL Asia





If the  demand for NTL Asias operations does not increase, NTL Asia may not be able to  continue its operations.





The market for broadcast services in Asia has been slow to evolve and, as  a result, demand for NTL Asias services has been lower than expected.  If this demand does not increase, then NTL  Asias revenue without additional financing may not be sufficient to cover its  expenses.  In order to improve the cost  base and performance of the business it has been necessary to reduce the costs  of the operation.  The success of the  business may be affected by its reduced capacity and the loss of some of the  staff.





Forward Looking Statements





Actual results may turn out to be materially different from  any forward-looking statements included or incorporated by reference in this  annual report on Form 10-Q.





Certain statements contained in this Form 10-Q may  constitute forward-looking statements.   When used in this Form 10-Q, the words, believe, anticipate,  should, intend, plan, will, may, could, 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  our company and our subsidiaries and affiliated joint ventures, 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 in  this section under the caption Risk Factors as well as:  our ability and the ability of our  subsidiaries and affiliated joint ventures to continue as going concerns; the  ability to obtain trade credit and shipments and terms with vendors and service  providers for current orders; our ability to maintain contracts that are  critical to their respective operations; potential adverse developments with  respect our liquidity, operations or results of operations; the ability to fund  and execute our business plans; the ability to attract, retain and compensate  our key executives and associates; our ability to attract and retain customers;  general economic and business conditions; technological developments; our  ability to continue to design networks, install facilities, obtain and maintain  any required governmental licenses or approvals and finance construction
and  development, all in a timely manner at reasonable costs and on satisfactory  terms and conditions; 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.  We assume no obligation to update the  forward-looking statements contained or incorporated by reference herein to  reflect actual results, changes in assumptions or changes in factors affecting  such statements.





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|PART II: | OTHER INFORMATION
|-------- | -----------------




|Item    1. | Legal    Proceedings.
|---------- | ---------------------




On April 30, 2003, one of our subsidiaries, Parc  Holdings, Inc. (formerly NTL (Delaware), Inc.), together with its subsidiaries  NTL Sweden SPV, Inc. and Nogenta Swedish Acquisition Holding B.V., entered into  an agreement with B2 (Bredband) AG, a  Swedish broadband communications company, and the other principal  shareholders of B2 relating to, among other things, the transfer of our  securities in B2.  Under the agreement,  the NTL Europe parties have agreed to transfer their interest in B2 to certain  other shareholders of B2 in exchange for approximately $375,000 in cash or  certain securities of a B2 affiliate and mutual releases among the parties  relating to a dispute stemming from an April 15, 2002 funding request for  approximately $20 million.  In  connection with the mutual releases, the agreement provides that B2 and the  other principal shareholders will withdraw, or otherwise assist Parc Holdings  in obtaining
bankruptcy court denial of, the proofs of claim filed by B2 and  the other principal shareholders in the bankruptcy court.  The closing of this transaction took place  on May 30, 2003.





Premium TV is engaged in  litigation relating to a dispute with one of its joint venture partners,  Newcastle United plc.  On March 14,  2003, Newcastle United served notice to terminate its joint venture agreement  with Premium TV on the grounds of Premium TVs alleged insolvency.  Premium TV is vigorously defending its  position.  On April 28, 2003, Premium TV  itself issued court proceedings applying for a declaration that it was  solvent.  If Premium TV is unsuccessful  in its litigation, Newcastle United would have the right to purchase Premium  TVs 50% interest in the joint venture at 50% of the appraised market value of  the joint venture.





On July 29,
    2003, Cablecom received a letter of counsel acting for German channel
    providers SAT
    1, ProSieben
    and Kabel 1 requesting payment of a total of CHF 13,324,827.  The channel
    providers have threatened to institute proceedings against Cablecom if Cablecom
    refused to pay the amount as requested, which equals the total amount that
    the respective channel providers have paid to Cablecom for the distribution
    of a Swiss advertising spilt over Cablecoms network since 1996.





The channel providers claim that the current  contractual compensation, in form of a percentage fee on the advertising  revenues, would be abusively high and therefore constitute a breach of Swiss  competition law.  They refer to the  recent decision by the Swiss Competition Commission ordering preliminary  measures in proceedings between Teleclub and Cablecom and holding that Cablecom  has a dominant position on the market for the distribution of TV signals to  Swiss customers.





Following external legal advice and in order to  protect long term interests of Cablecom, Cablecom has decided to refuse to  repay any amounts received.  It can  therefore be expected that German channel providers will shortly initiate legal  proceedings.  Same or similar action has  been announced by a second group of German channel providers has been obtained  yet.





|Item    2. | Changes    in Securities and Use of Proceeds.
|---------- | ---------------------------------------------




On January 10, 2003, the effective date of the  reorganization plan, we authorized the issuance of 19,668,777 shares of our  common stock (19,657,718 of which were outstanding as of July 23, 2003) and  6,864,000 of our Preferred Stock (6,862,193 of which were outstanding as of  July 23, 2003) to certain former creditors and stockholders of Old NTL, and its  subsidiaries in reliance on the exemption from registration afforded by section  1145 of the U.S. Bankruptcy Code.  These  shares of common stock and Preferred Stock represent all of our shares of  capital stock.  We received no proceeds  from the issuance of such shares.  All  securities of Old NTL were cancelled in the reorganization plan as of January  10, 2003.





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|Item    3. | Defaults    Upon Senior Securities.
|---------- | -----------------------------------




See Risk Factors Related to Cablecom and Note 15 to  our financial statements.





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




No matters were submitted to a vote of our security  holders through the solicitation of proxies or otherwise during the first  quarter ended March 31, 2003.





|Item    5. | Other    Information.
|---------- | ---------------------




On July 10, 2003, the Board of Directors of NTL  Europe, Inc. promoted Robert A. Schmitz, its Vice President and Secretary, to  include the position of Chief Operating Officer, and promoted Richard A. Spohn,  its Vice President and Chief Accounting Officer, to include the positions of  Chief Financial Officer and Treasurer.   Bruno Claude, who previously held the position of Chief Operating  Officer pursuant to an employment agreement which expired on July 10, 2003, and  John F. Gregg, who previously held the positions of Chief Financial Officer and  Treasurer pursuant to an employment agreement which expired on July 10, 2003,  will continue to hold their positions of Chief Executive Officer and Chief  Financial Officer, respectively, at Cablecom GmbH, an indirect, wholly-owned  subsidiary of NTL Europe, Inc.





|Item    6. | Exhibits    and Reports on Form 8-K.
|---------- | ------------------------------------




|(a) | Exhibits.           
|--- | --------------------
|    |                     
|    | 31.1                
|    |                     
|    | 31.2                
|    |                     
|    | 32.1                
|    |                     
|    | 32.2                
|    |                     
|    | *                   
|    |                     
|(b) | Reports on Form 8-K.
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|    | (3)                 




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SIGNATURES





Pursuant to the requirements 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.





|                      | NTL EUROPE, INC.
|--------------------- | ----------------
|                      |                 
|Date: August 28, 2003 | By:             
|                      |                 
|                      |                 
|Date: August 28, 2003 | By:             
|                      |                 




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