##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549




---

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 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 Street
Rye, 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. YES x NOo

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

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 x NOo

Number of shares outstanding at November 5, 2003: 19,660,505 shares of Common
Stock, par value $.01 per share.


TABLE OF CONTENTS

|                             |                                                                                               |                                                                |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------- |  |  |  |  |  | 
|PART I:FINANCIAL INFORMATION
|                             | Item 1: Financial Statements                                                                 
|                             |                                                                                               | Condensed Consolidated Balance Sheets                         
|                             |                                                                                               | Condensed Consolidated Statements of Operations               
|                             |                                                                                               | Condensed Consolidated Statement of Shareholders (Deficiency)
|                             |                                                                                               | Consolidated Statements of Cash Flows                         
|                             | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                             | Item 3. Quantitative and Qualitative Disclosures About Market Risk.                          
|                             | Item 4. Controls and Procedures.                                                             
|PART II: OTHER INFORMATION  
|                             | Item 1. Legal Proceedings.                                                                   
|                             | Item 2. Changes in Securities and Use of Proceeds.                                           
|                             | Item 3. Defaults Upon Senior Securities.                                                     
|                             | Item 4. Submission of Matters to a Vote of Security Holders.                                 
|                             | Item 5. Other Information.                                                                   
|                             | Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                  
|CERTIFICATION OF CEO        
|CERTIFICATION OF CFO        
|CERTIFICATION OF CEO        
|CERTIFICATION OF CFO        



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##### Table of Contents



NTL EUROPE, INC.

INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2003.

PART I: FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of September 30, 2003 (Unaudited)
and December 31, 2002 (Audited)
    
    
    2Condensed Consolidated Statements of Operations for the three
months and nine months ended September 30, 2003 and 2002 (Unaudited)
    
    
    4Condensed Consolidated Statement of Shareholders (Deficiency) for
the nine months ended September 30, 2003 and 2002 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2003 and 2002 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    35Item 3.
    
    Quantitative and Qualitative Disclosures
About Market Risk
    
    
    45Item 4.
    
    Controls and Procedures
    
    
    46RISK FACTORS
    
    
    47PART II: OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    52Item 2.
    
    Changes in Securities and Use of Proceeds
    
    
    52Item 3.
    
    Defaults Upon Senior Securities
    
    
    52Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    52Item 5.
    
    Other Information
    
    
    52Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    53SIGNATURES
    
    
    54


1



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##### Table of Contents












PART I: FINANCIAL INFORMATION

Item 1: Financial Statements

NTL Europe, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(amounts in millions)

December
31, 2002September 30, 2003
    
    
    Predecessor CompanyReorganized Company
    
    
    (see note)(unaudited)
    
    
    (audited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    126.7
    
    
    
    $
    277.5Marketable securities
    
    
    
    
    
    
    
    17.3Accounts receivable  trade, less allowance for doubtful accounts of $11.1 (2003) and
$9.4 (2002)
    
    
    50.1
    
    
    
    
    243.4Other
    
    
    78.4
    
    
    
    
    50.3Discontinued operations
    
    
    
    
    
    
    
    12,968.1Total current assets
    
    
    255.2
    
    
    
    
    13,556.6Fixed assets, net
    
    
    1,164.3
    
    
    
    
    1,682.1Goodwill
    
    
    
    
    
    
    
    218.7Reorganization value in excess of amounts allocable to identifiable assets
    
    
    226.5
    
    
    
    
    Customer lists, net of accumulated amortization of $8.2 (2003) and $171.4 (2002)
    
    
    211.3
    
    
    
    
    62.8Investments in and loans to affiliates, net
    
    
    21.2
    
    
    
    
    13.0Deferred tax asset
    
    
    91.5
    
    
    
    
    195.3Other assets, net of accumulated amortization of $62.4 (2002)
    
    
    15.0
    
    
    
    
    120.9Total assets
    
    $
    1,985.0
    
    
    
    $
    15,849.4


2



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##### Table of Contents



NTL Europe, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets  continued
(amounts in millions)

December 31, 2002September 30, 2003
    
    
    Predecessor CompanyReorganized Company
    
    
    (see note)(unaudited)
    
    
    (audited)Liabilities and shareholders (deficiency)Liabilities not subject to compromiseCurrent liabilities:Accounts payable
    
    $
    49.1
    
    
    
    $
    49.3Accrued expenses and other
    
    
    58.6
    
    
    
    
    92.5Interest payable
    
    
    12.1
    
    
    
    
    43.5Dividends payable
    
    
    17.2
    
    
    
    
    Deferred revenue
    
    
    88.4
    
    
    
    
    235.6Current portion of long-term debt
    
    
    2,875.5
    
    
    
    
    2,719.3Discontinued operations (including liabilities subject to
compromise of $10,157.8)
    
    
    
    
    
    
    
    17,956.2Total current liabilities
    
    
    3,100.9
    
    
    
    
    21,096.4Mandatorily redeemable preferred stock  authorized 20.0 shares;
issued and outstanding 6.9 shares, liquidation preference $351.8
    
    
    102.1
    
    
    
    
    Other
    
    
    145.0
    
    
    
    
    132.7Deferred income taxes
    
    
    135.7
    
    
    
    
    226.0Liabilities subject to compromise, including redeemable preferred stock
    
    
    
    
    
    
    
    4,294.1Commitments and contingent liabilitiesShareholders (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
    
    
    
    
    2.8Additional paid-in capital
    
    
    
    
    
    
    
    13,574.9Accumulated other comprehensive (loss)
    
    
    (45.4
    )
    
    
    
    (830.2
    )(Deficit)
    
    
    (1,453.5
    )
    
    
    
    (22,647.3
    )(1,498.7
    )
    
    
    
    (9,899.8
    )Total liabilities and shareholders (deficiency)
    
    $
    1,985.0
    
    
    
    $
    15,849.4


See accompanying notes.

3



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##### Table of Contents






NTL Europe, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
(amounts in millions, except per share amounts)

Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2003
    
    
    2002
    
    2003
    
    
    2002Reorganized
    
    
    Predecessor Company
    
    Reorganized
    
    
    Predecessor CompanyCompany
    
    
    (see note)
    
    Company
    
    
    (see note)Revenues
    
    $
    123.7
    
    
    
    $
    109.7
    
    
    $
    366.0
    
    
    
    $
    298.5Costs and expensesOperating expenses (exclusive of depreciation shown separately below)
    
    
    46.5
    
    
    
    
    50.6
    
    
    
    137.4
    
    
    
    
    132.8Selling, general and administrative expenses
    
    
    27.3
    
    
    
    
    28.4
    
    
    
    97.1
    
    
    
    
    100.2Asset impairments
    
    
    
    
    
    
    
    4.7
    
    
    
    
    
    
    
    
    17.6Other charges
    
    
    2.8
    
    
    
    
    0.1
    
    
    
    6.4
    
    
    
    
    3.5Corporate expenses
    
    
    4.1
    
    
    
    
    3.2
    
    
    
    13.3
    
    
    
    
    14.4Depreciation
    
    
    45.6
    
    
    
    
    53.4
    
    
    
    138.0
    
    
    
    
    148.3Amortization
    
    
    2.6
    
    
    
    
    33.4
    
    
    
    8.1
    
    
    
    
    70.1128.9
    
    
    
    
    173.8
    
    
    
    400.3
    
    
    
    
    486.9Operating (loss)
    
    
    (5.2
    )
    
    
    
    (64.1
    )
    
    
    (34.3
    )
    
    
    
    (188.4
    )Other income (expense)Interest income and other, net
    
    
    1.5
    
    
    
    
    9.8
    
    
    
    3.4
    
    
    
    
    17.7Interest expense
    
    
    (13.6
    )
    
    
    
    (46.7
    )
    
    
    (1,412.0
    )
    
    
    
    (132.7
    )Share of (losses) from equity investments
    
    
    (0.1
    )
    
    
    
    (81.4
    )
    
    
    (1.8
    )
    
    
    
    (168.1
    )Foreign currency transaction gains
    
    
    0.5
    
    
    
    
    4.7
    
    
    
    1.2
    
    
    
    
    6.9(Loss) before recapitalization items, income taxes and discontinued operations
    
    
    (16.9
    )
    
    
    
    (177.7
    )
    
    
    (1,443.5
    )
    
    
    
    (464.6
    )Recapitalization items, net
    
    
    
    
    
    
    
    10.1
    
    
    
    
    
    
    
    
    (11.6
    )(Loss) before income taxes and discontinued operations
    
    
    (16.9
    )
    
    
    
    (167.6
    )
    
    
    (1,443.5
    )
    
    
    
    (476.2
    )Income tax benefit (expense)
    
    
    (0.1
    )
    
    
    
    14.7
    
    
    
    (1.4
    )
    
    
    
    40.2(Loss) from continuing operations
    
    
    (17.0
    )
    
    
    
    (152.9
    )
    
    
    (1,444.9
    )
    
    
    
    (436.0
    )Discontinued operations:(Loss) from discontinued operations, net of income tax benefits of $10.3 and $29.1
(2002)
    
    
    
    
    
    
    
    (295.9
    )
    
    
    
    
    
    
    
    (1,174.8
    )Net (loss)
    
    
    (17.0
    )
    
    
    
    (448.8
    )
    
    
    (1,444.9
    )
    
    
    
    (1,610.8
    )Preferred stock dividends and accretion
    
    
    
    
    
    
    
    (1.6
    )
    
    
    (8.6
    )
    
    
    
    (143.5
    )Net (loss) available to common shareholders
    
    $
    (17.0
    )
    
    
    $
    (450.4
    )
    
    $
    (1,453.5
    )
    
    
    $
    (1,754.3
    )Basic and diluted net (loss) per share:(Loss) from continuing operations
    
    $
    (0.86
    )
    
    
    $
    (0.56
    )
    
    $
    (73.94
    )
    
    
    $
    (2.10
    )(Loss) from discontinued operations
    
    
    
    
    
    
    
    (1.07
    )
    
    
    
    
    
    
    
    (4.25
    )Net (loss) per common share
    
    $
    (0.86
    )
    
    
    $
    (1.63
    )
    
    $
    (73.94
    )
    
    
    $
    (6.35
    )Weighted average shares
    
    
    19,657,660
    
    
    
    
    276,626,475
    
    
    
    19,657,524
    
    
    
    
    276,626,475


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


See accompanying notes.

4



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##### Table of Contents






NTL Europe, Inc. and Subsidiaries
Condensed Consolidated Statement of Shareholders (Deficiency)
(unaudited)
(dollars in millions)

Accumulated OtherComprehensive(Loss)Series Preferred Stock
    
    Common Stock$.01 Par Value
    
    $.01 Par Value
    
    Additional
    
    
    
    
    
    Foreign
    
    Unrealized Net
    
    PensionPaid-in
    
    Comprehensive
    
    Currency
    
    Losses on
    
    LiabilityShares
    
    Par
    
    Shares
    
    Par
    
    Capital
    
    (Loss)
    
    Translation
    
    Derivatives
    
    Adjustments
    
    (Deficit)Predecessor CompanyBalance, December 31, 2002
    
    
    3,000,000
    
    
    $
    
    
    
    
    276,626,475
    
    
    $
    2.8
    
    
    $
    13,574.9
    
    
    
    
    
    
    $
    (770.1
    )
    
    $
    (30.1
    )
    
    $
    (30.0
    )
    
    $
    (22,647.3
    )Net Income January 1, 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    9,900.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,900.0Issuance of Common Stock
    
    
    
    
    
    
    
    
    
    
    19,657,433
    
    
    
    0.2Fresh-start adoptions  other
    
    
    (3,000,000
    )
    
    
    
    
    
    
    (276,626,475
    )
    
    
    (2.8
    )
    
    
    (13,574.9
    )
    
    
    
    
    
    
    770.1
    
    
    $
    (30.1
    )
    
    $
    (30.0
    )
    
    
    12,747.3Reorganized CompanyBalance, January 1, 2003
    
    
    
    
    
    
    
    
    
    
    19,657,433
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares issued upon conversion
of old securities
    
    
    
    
    
    
    
    
    
    
    336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accretion on mandatorily
redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.6
    )Comprehensive loss:Net loss for the nine months
ended September 30, 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,444.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,444.9
    )Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.0
    )
    
    
    (37.0
    )Unrealized losses on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.4
    )
    
    
    
    
    
    
    (8.4
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,490.3
    )Balance, September 30, 2003
    
    
    
    
    
    $
    
    
    
    
    19,657,769
    
    
    $
    0.2
    
    
    $
    
    
    
    
    
    
    
    $
    (37.0
    )
    
    $
    (8.4
    )
    
    $
    
    
    
    $
    (1,453.5
    )


See accompanying notes.

5



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##### Table of Contents






NTL Europe, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
(dollars in millions)

Nine months endedSeptember 30,

    
    January 1,2003

    
    
    2002

    
    2003PredecessorReorganized

    
    
    Company

    
    PredecessorCompany

    
    
    (see note)

    
    CompanyOperating activitiesNet (loss) income
    
    $
    (1,444.9
    )

    
    
    $
    (1,610.8
    )

    
    $
    9,900.0(Loss) from discontinued operations
    
    
    
    

    
    
    
    (1,174.8
    )

    
    
    Gain on disposal of discontinued operations
    
    
    
    

    
    
    
    
    

    
    
    5,041.3(Loss) income from continuing operations
    
    
    (1,444.9
    )

    
    
    
    (436.0
    )

    
    
    4,858.7Adjustments to reconcile net (loss) to net cash provided by
(used in) continuing operations:Depreciation and amortization
    
    
    146.1
    

    
    
    
    218.4
    

    
    
    Asset impairments
    
    
    
    

    
    
    
    69.2
    

    
    
    Write-off of other assets included in other income and expense
    
    
    0.8
    

    
    
    
    
    

    
    
    Equity in losses of unconsolidated subsidiaries
    
    
    1.7
    

    
    
    
    116.5
    

    
    
    Non-cash compensation
    
    
    
    

    
    
    
    
    

    
    
    Loss (gain) on sale of assets
    
    
    
    

    
    
    
    (2.6
    )

    
    
    Provision for losses on accounts receivable
    
    
    1.3
    

    
    
    
    4.0
    

    
    
    Deferred income taxes
    
    
    (2.3
    )

    
    
    
    (40.4
    )

    
    
    Non cash gain on debt discharge
    
    
    
    

    
    
    
    
    

    
    
    (4,133.3
    )Amortization of original issue discount
    
    
    
    

    
    
    
    11.4
    

    
    
    Fresh start adjustments
    
    
    
    

    
    
    
    
    

    
    
    (896.3
    )Accretion on debt
    
    
    1,338.0
    

    
    
    
    
    

    
    
    Accretion on madatorily redeemable preferred stock
    
    
    4.6
    

    
    
    
    
    

    
    
    Other
    
    
    4.0
    

    
    
    
    7.7
    

    
    
    Changes in operating assets and liabilities, net of
effect from business acquisitions and dispositions:Accounts receivable
    
    
    197.9
    

    
    
    
    157.2
    

    
    
    Other current assets
    
    
    (23.2
    )

    
    
    
    (7.9
    )

    
    
    Other assets
    
    
    15.6
    

    
    
    
    (61.4
    )

    
    
    Accounts payable
    
    
    (2.5
    )

    
    
    
    (1.0
    )

    
    
    Accrued expenses and other
    
    
    (43.2
    )

    
    
    
    (22.0
    )

    
    
    Deferred revenue
    
    
    (154.0
    )

    
    
    
    (122.4
    )

    
    
    Net cash provided by (used in) continuing operations
    
    
    39.9
    

    
    
    
    (109.3
    )

    
    
    (170.9
    )Net cash provided by (used in) discontinued operations
    
    
    
    

    
    
    
    85.9
    

    
    
    Net cash provided by (used in) operating activities
    
    
    39.9
    

    
    
    
    (23.4
    )

    
    
    (170.9
    )Investing activitiesAcquisitions, net of cash acquired
    
    
    
    

    
    
    
    
    

    
    
    Purchase of fixed assets
    
    
    (75.7
    )

    
    
    
    (74.0
    )

    
    
    Investments in and loans to affiliates
    
    
    (1.4
    )

    
    
    
    (15.3
    )

    
    
    Increase in other assets
    
    
    
    

    
    
    
    (8.9
    )

    
    
    Proceeds from sale of Australia
    
    
    
    

    
    
    
    428.8
    

    
    
    Proceeds from sales of assets
    
    
    1.1
    

    
    
    
    8.9
    

    
    
    Purchase of marketable securities
    
    
    
    

    
    
    
    (52.8
    )

    
    
    Proceeds from sales of marketable securities
    
    
    
    

    
    
    
    41.9
    

    
    
    Net cash (used in) continuing operations
    
    
    (76.0
    )

    
    
    
    328.6
    

    
    
    Net cash (used in) discontinued operations
    
    
    
    

    
    
    
    (847.1
    )

    
    
    Net cash (used in) investing activities
    
    
    (76.0
    )

    
    
    
    (518.5
    )

    
    
    


6



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##### Table of Contents



NTL Europe, Inc. and Subsidiaries
Consolidated Statements of Cash Flows  continued
(unaudited)
(dollars in millions)

Nine months endedSeptember 30,

    

    January 1,2003
    
    

    2002

    

    2003Reorganized Company
    
    

    Predecessor Company
    
    Predecessor CompanyFinancing activitiesProceeds from discontinued operations, upon emergence from bankruptcy
    
    
    
    

    
    

    
    
    

    

    
    53.2Proceeds from borrowings, net of financing costs
    
    
    
    

    
    

    
    102.5
    

    

    
    Principal payments
    
    
    (0.7
    )

    
    

    
    (1.4
    )

    

    
    Repayment of NTL Australia bank loan
    
    
    
    

    
    

    
    (121.7
    )

    

    
    Net cash (used in) provided by financing activities of continuing
operations
    
    
    (0.7
    )

    
    

    
    (20.6
    )

    

    
    53.2Net cash (used in) provided by financing activities of discontinued
activities
    
    
    
    

    
    

    
    809.2
    

    

    
    Net cash (used in) provided by financing activities
    
    
    (0.7
    )

    
    

    
    788.6
    

    

    
    53.2Effect of exchange rate changes on cash
    
    
    3.7
    

    
    

    
    41.8
    

    

    
    Increase (decrease) in cash and cash equivalents
    
    
    (33.1
    )

    
    

    
    288.5
    

    

    
    (117.7
    )Cash and cash equivalents at beginning of year  continuing operations
    
    
    159.8
    

    
    

    
    228.3
    

    

    
    277.5Cash and cash equivalents at beginning of year  discontinued operations
    
    
    
    

    
    

    
    276.3
    

    

    
    Cash and cash equivalents at end of period  discontinued operations
    
    
    
    

    
    

    
    (485.1
    )

    

    
    Cash and cash equivalents at end of period  continuing operations
    
    $
    126.7
    

    
    

    $
    308.0
    

    

    $
    159.8Supplemental disclosure of cash flow informationCash paid during the period for interestExclusive of amounts capitalized
    
    $
    81.5
    

    
    

    $
    485.3
    

    

    $
    Income taxes paid
    
    
    
    

    
    
    
    1.3
    

    

    
    


See accompanying notes

7



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##### Table of Contents



1. Organization and Business

Recent Developments

On November 12, 2003, Cablecom (as defined below) completed a
restructuring of its debt and equity. As a result, effective as of the
close of business on November 19, 2003, the Company (as defined below)
expects to have no further ownership interest in Cablecom. Also, in
connection with the restructuring, the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.)

The Companys board of directors and management have been exploring the
strategic and financial alternatives available to the Company. In that regard,
on September 30, 2003, the board approved a 1-for-50,000 reverse stock split of
the Common Stock (as defined below) and payment of $.01 per share, on a
pre-split basis, for fractional shares. If approved by a majority of the
Companys stockholders, the consummation of the reverse stock split is expected
to reduce the number of holders of Common Stock to below 300 thereby permitting
the Company to terminate its registration under the Securities Act of 1933, as
amended. The number of holders of Preferred Stock (as defined below) is
already below 300. Accordingly, after the effective date of the reverse stock
split, the Company intends to terminate the registration of the Common Stock
and Preferred Stock and cease being a public company. (See Note 18  Reverse
Stock Split.)

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
cancelled, 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)

8



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##### Table of Contents



(which itself has recently been restructured as described below), the
Companys assets are not material compared to those of New NTL.

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 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, NTL Lanbase, SL, NTL Broadcast (Thailand)
Ltd., NTL Broadcast Sdn, Ltd and, as of September 30, 2003, Cablecom. 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 was overindebted under Swiss law.
In order to address that issue, on November 12, 2003, Cablecom completed a
restructuring of its debt and equity. As a result of that restructuring,
effective as of the close of business on November 19, 2003, the Company expects
to have no further ownership interest in Cablecom. Also, in connection with
the restructuring, on November 19, 2003, the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.) Accordingly,
Cablecom will be treated as a discontinued operation beginning in the fourth
quarter of 2003.

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.

Until its restructuring on November 12, 2003, Cablecom had approximately CHF
3,792 million in bank debt (which included recently accrued interest payments)
that initially matured on April 30, 2003 and had been extended to November 18,
2003. Prior to the November 12, 2003 restructuring, Cablecom had insufficient
resources to satisfy such obligation. In addition, prior to the November 12,
2003 restructuring, Cablecom and certain of its subsidiaries were
overindebted under Swiss law and, accordingly, but for the recent
restructuring, could have been required to file for insolvency proceedings in
Switzerland. Accordingly, during the past year, Cablecom and its lenders were
involved in ongoing discussions regarding a complete financial restructuring of
Cablecom. 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 had agreed upon the principal terms and parameters for the
restructuring of that debt.

9



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##### Table of Contents



The principal terms for the financial restructuring were:



| |  |  | 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

A restructuring of Cablecoms debt and equity on those basic terms was
completed on November 12, 2003. As a result, effective November 19, 2003,
the Company will no longer have any remaining interest in Cablecom and the
Company expects to receive a payment of $15 million. Accordingly, from and
after November 12, 2003, the results of Cablecom will no longer be reported
as part of the Companys consolidated results of operations and Cablecom
will be treated as a discontinued operation beginning in the fourth quarter
of 2003.

The Company also has various equity and cost method investments detailed
in Note 9.

Following the closing of the Cablecom restructuring, the Company is continuing
to review all of its other 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. To the extent the Company receives net 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 approximately $351.8 million in
liquidation preference as of September 30, 2003, exclusive of dividends payable
of $17.2 million at September 30, 2003, which was paid on October 15, 2003)
have been redeemed. (See Note 13.) Subject to the board of directors
determination to retain an appropriate reserve, the net proceeds of the
Companys expected $15 million payment in connection with the Cablecom
restructuring is expected to be subject to this mandatory redemption provision.

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.

10



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##### Table of Contents



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 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 cancelled 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. As of
September 30, 2003, the Company had approximately $55.0 million in cash and its
subsidiaries (other than Cablecom) had an additional amount of approximately
$9.7 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 the next 12
months, the Company does not anticipate receiving any material cash proceeds
from its subsidiaries operating activities. Accordingly, the Company expects
to fund its operations primarily out of its $55.0 million in cash as of
September 30, 2003 ($17.2 million of which was paid as a dividend on the
Preferred Stock on October 15, 2003) and its subsidiaries (other than
Cablecom) cash of approximately $9.7 million. During the next 12 months, 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 the next 12 months, the Company does not anticipate any material capital
expenses.

A restructuring of Cablecoms debt and equity was completed on November 12,
2003. As a result, effective November 19, 2003, the Company will no longer
have any remaining interest in Cablecom and the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.)
Accordingly, from and after November 12, 2003, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations
and Cablecom will be treated as a discontinued operation beginning in the
fourth quarter of 2003.

11



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##### Table of Contents



On September 30, 2003, the Companys board of directors approved a 1-for-50,000
reverse stock split of the Common Stock and payment of $.01 per share, on a
pre-split basis, for fractional shares. If approved by a majority of the
Companys stockholders, the consummation of the reverse stock split is expected
to reduce the number of holders of Common Stock to below 300 thereby permitting
the Company to terminate its registration under the Securities Act of 1933, as
amended. The number of holders of Preferred Stock is already below 300.
Accordingly, after the effective date of the reverse stock split, the Company
intends to terminate the registration of the Common Stock and Preferred Stock
and will cease being a public company. (See Note 18  Reverse Stock Split.)

Through September 30, 2004, the Companys primary expenses are expected to
consist of operating expenses of approximately $11.0 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. In this regard, on October 15, 2003, the Companys board of directors
paid a semi-annual dividend of $2.50 per share on the Preferred Stock.
However, there is no requirement under our charter to pay any future dividends
on our Preferred Stock and there is no assurance that we will pay any such
future dividends. (See Note 17  Dividend on Preferred Stock.) At September
30, 2003, the liquidation preference of Preferred Stock aggregates
approximately $351.8 million, exclusive of dividends payable of $17.2 million
at September 30, 2003, which was paid on October 15, 2003. 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. Subject to the board of directors determination to retain an
appropriate reserve, the net proceeds of the Companys expected $15 million
payment in connection with the Cablecom restructuring is expected to be subject
to this mandatory redemption provision. 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 October 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 and nine months ended September
30, 2003 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2003. For further information, refer to 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

12



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##### Table of Contents



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 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 obtained a valuation
to assist in the determination of its reorganization value as defined in SOP
90-7. The Company determined the 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
    
    $
    1,615.0Current assets
    
    
    455.6Other assets
    
    
    128.0Reorganization value
    
    $
    2,198.6


13



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##### Table of Contents



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
    
    $
    4,294.1Post petition liabilities:Current liabilities (excluding discontinued operations)
    
    
    3,140.2Deferred income taxes
    
    
    226.0Other non current liabilities
    
    
    132.77,793.0Reorganization value
    
    
    2,198.6$
    5,594.4


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 compromisePre-petition long-term debt subject to compromise
    
    $
    1,300.0Redeemable preferred stock
    
    
    2,853.3Accounts payable and accrued expenses
    
    
    0.5Interest and dividends payable
    
    
    140.34,294.1Unamortized deferred financing costs
    
    
    (37.4
    )4,256.7Cash 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.

14



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##### Table of Contents



December 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    January 1,2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    2003EmergencePredecessor
    
    from Chapter
    
    Discontinued
    
    
    
    
    
    ReorganizedCompany
    
    11
    
    Operations
    
    Fresh-Start
    
    Company(dollars in millions)AssetsCurrent assets:Cash and cash equivalents
    
    $
    277.5
    
    
    $
    (170.9
    )
    
    $
    53.2
    
    
    $
    
    
    
    $
    159.8Marketable securities
    
    
    17.3
    
    
    
    (17.3
    )
    
    
    
    
    
    
    
    
    
    
    Accounts receivable-trade, less
Allowance for doubtful accounts of $9.4
    
    
    243.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    243.4Other
    
    
    50.3
    
    
    
    
    
    
    
    
    
    
    
    2.1
    
    
    
    52.4Discontinued operations
    
    
    12,968.1
    
    
    
    
    
    
    
    (12,968.1
    )
    
    
    
    
    
    
    Total current assets
    
    
    13,556.6
    
    
    
    (188.2
    )
    
    
    (12,914.9
    )
    
    
    2.1
    
    
    
    455.6Fixed assets, net
    
    
    1,682.1
    
    
    
    
    
    
    
    
    
    
    
    (507.2
    )
    
    
    1,174.9Goodwill
    
    
    218.7
    
    
    
    
    
    
    
    
    
    
    
    (218.7
    )
    
    
    Reorganization value in excess of amounts allocable
to identifiable assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217.2
    
    
    
    217.2Customer lists, net of accumulated amortization of
$171.4
    
    
    62.8
    
    
    
    
    
    
    
    
    
    
    
    146.8
    
    
    
    209.6Investments and loans to affiliates, net
    
    
    13.0
    
    
    
    
    
    
    
    
    
    
    
    7.2
    
    
    
    20.2Deferred financing
    
    
    37.4
    
    
    
    (37.4
    )
    
    
    
    
    
    
    
    
    
    
    Other assets, net of accumulated amortization of
$62.4
    
    
    83.5
    
    
    
    
    
    
    
    
    
    
    
    (54.0
    )
    
    
    29.5Deferred tax asset
    
    
    195.3
    
    
    
    
    
    
    
    
    
    
    
    (103.7
    )
    
    
    91.6Total assets
    
    $
    15,849.4
    
    
    $
    (225.6
    )
    
    $
    (12,914.9
    )
    
    $
    (510.3
    )
    
    $
    2,198.6Liabilities and shareholders (deficiency) equityLiabilities not subject to compromise
Current liabilities:Accounts payable
    
    $
    49.3
    
    
    $
    
    
    
    $
    
    
    
    $
    0.3
    
    
    $
    49.6Accrued expenses and other
    
    
    92.5
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    93.7Interest payable
    
    
    43.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43.5Deferred revenue
    
    
    235.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    235.6Current portion of long-term debt
    
    
    2,719.3
    
    
    
    
    
    
    
    
    
    
    
    (1,313.2
    )
    
    
    1,406.1Discontinued 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
    )
    
    
    1,828.5Other
    
    
    132.7
    
    
    
    
    
    
    
    
    
    
    
    (4.7
    )
    
    
    128.0Deferred income taxes
    
    
    226.0
    
    
    
    
    
    
    
    
    
    
    
    (90.2
    )
    
    
    135.8Liabilities subject to compromise, including
redeemable preferred stock
    
    
    4,294.1
    
    
    
    (4,294.1
    )
    
    
    
    
    
    
    
    
    
    
    Mandatorily redeemable preferred stock
    
    
    
    
    
    
    106.1
    
    
    
    
    
    
    
    
    
    
    
    106.1Common stock-old
    
    
    2.8
    
    
    
    
    
    
    
    
    
    
    
    (2.8
    )
    
    
    Common stock-new
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2Additional 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
    
    
    
    0.2Total liabilities and shareholders equity (deficiency)
    
    $
    15,849.4
    
    
    $
    (225.6
    )
    
    $
    (12,914.9
    )
    
    $
    (510.3
    )
    
    $
    2,198.6


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 and which are subject to limitations as
described below. Old NTL has net operating loss carryforwards for Swiss tax
purposes of approximately $2.6 billion that expire in varying amounts
commencing in 2008.

15



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##### Table of Contents



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.

3. Pro Forma Financial Information

The following pro forma consolidated balance sheet at September 30, 2003 and
the pro forma consolidated income statement for the nine months ended September
30, 2003 reflect the likelihood as of that date that the Company would not
retain a significant interest in Cablecom and that Cablecom would no longer be
reported as part of the Companys consolidated results of operations. As
described in more detail in Note 16 (Commitments and Contingent Liabilities 
Cablecom), until its restructuring on November 12, 2003, Cablecom had
approximately CHF 3,792 million in bank debt (which included recently accrued
interest payments) that initially matured on April 30, 2003 and had been
extended to November 18, 2003. Prior to its restructuring on November 12,
2003, Cablecom had insufficient resources to satisfy such obligation. In
addition, prior to its restructuring on November 12, 2003, Cablecom and certain
of its subsidiaries were overindebted under Swiss law and, accordingly, but
for the recent restructuring, could have been required to file for insolvency
proceedings in Switzerland.

A restructuring of Cablecoms debt and equity was completed on November 12,
2003. As a result, effective November 19, 2003, the Company will no longer
have any remaining interest in Cablecom and the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.)
Accordingly, from and after November 12, 2003, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations
and Cablecom will be treated as a discontinued operation beginning in the
fourth quarter of 2003.

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##### Table of Contents



|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|-------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | - | --------------------- | -------- | ------------ | - | ------------------ | -------- | - | - | ------- | ------- | -
|                                                                                                                     |                                        |   | September 30,         |          | Discontinued |   | Pro Forma         
|                                                                                                                     |                                        |   | 2003                  |          | Operations   |   | as of             
|                                                                                                                     |                                        |   | (Consolidated)        |          | (Cablecom)   |   | September 30, 2003
|                                                                                                                     |                                        |   |                       |          |              |   |                   
|                                                                                                                     |                                        |   | (unaudited)          
|                                                                                                                     |                                        |   | (amounts in millions)
|Assets                                                                                                               |                                        |   |                       |          |              |   |                    |          |   |   |         |        
|Current assets:                                                                                                      |                                        |   |                       |          |              |   |                    |          |   |   |         |        
|                                                                                                                     | Cash and cash equivalents              |   | $                     | 126.7    |              |   | $                  | (62.0    | ) |   | $       | 64.7    |  
|                                                                                                                     | Accounts receivable-trade, net         |   |                       | 50.1     |              |   |                    | (41.8    | ) |   |         | 8.3     |  
|                                                                                                                     | Other                                  |   |                       | 78.4     |              |   |                    | (67.7    | ) |   |         | 10.7    |  
|                                                                                                                     | Discontinued operations                |   |                       |         |              |   |                    | 1,908.9  |   |   |         | 1,908.9 |  
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|Total current assets                                                                                                 |                                        |   | 255.2                 |          |              |   | 1,737.4            |          |   |   | 1,992.6 |        
|Fixed assets, net                                                                                                    |                                        |   | 1,164.3               |          |              |   | (1,162.6           | )        |   |   | 1.7     |        
|Goodwill                                                                                                             |                                        |   |                      |          |              |   |                   |          |   |   |        |        
|Reorganization value in excess of amounts
allocable to identifiable assets                                           |                                        |   | 226.5                 |          |              |   | (225.3             | )        |   |   | 1.2     |        
|Customer lists, net of accumulated
amortization of $8.2                                                              |                                        |   | 211.3                 |          |              |   | (211.3             | )        |   |   |        |        
|Investments in and loans to affiliates, net                                                                          |                                        |   | 21.2                  |          |              |   | (8.1               | )        |   |   | 13.1    |        
|Deferred tax asset                                                                                                   |                                        |   | 91.5                  |          |              |   | (131.8             | )        |   |   | (40.3   | )      
|Other assets                                                                                                         |                                        |   | 15.0                  |          |              |   | 1.7                |          |   |   | 16.7    |        
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|Total assets                                                                                                         |                                        | $ | 1,985.0               |          |              | $ |                   |          |   | $ | 1,985.0 |        
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|Liabilities and shareholders (deficiency)                                                                           |                                        |   |                       |          |              |   |                    |          |   |   |         |        
|Liabilities not subject to compromise
Current liabilities:                                                           |                                        |   |                       |          |              |   |                    |          |   |   |         |        
|                                                                                                                     | Accounts payable                       |   | $                     | 49.1     |              |   | $                  | (38.6    | ) |   | $       | 10.5    |  
|                                                                                                                     | Accrued expenses and other             |   |                       | 58.6     |              |   |                    | (44.0    | ) |   |         | 14.6    |  
|                                                                                                                     | Interest payable                       |   |                       | 12.1     |              |   |                    | (12.1    | ) |   |         |        |  
|                                                                                                                     | Dividends payable                      |   |                       | 17.2     |              |   |                    |         |   |   |         | 17.2    |  
|                                                                                                                     | Deferred revenue                       |   |                       | 88.4     |              |   |                    | (86.2    | ) |   |         | 2.2     |  
|                                                                                                                     | Current portion of long-term debt      |   |                       | 2,875.5  |              |   |                    | (2,875.4 | ) |   |         | 0.1     |  
|                                                                                                                     | Discontinued operations                |   |                       |         |              |   |                    | 1,908.9  |   |   |         | 1,908.9 |  
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|Total current liabilities                                                                                            |                                        |   | 3,100.9               |          |              |   | (1,147.4           | )        |   |   | 1,953.5 |        
|Long-term debt                                                                                                       |                                        |   |                      |          |              |   |                   |          |   |   |        |        
|Mandatorily redeemable preferred stock                                                                               |                                        |   | 102.1                 |          |              |   |                   |          |   |   | 102.l   |        
|Other                                                                                                                |                                        |   | 145.0                 |          |              |   | (145.0             | )        |   |   |        |        
|Deferred income taxes                                                                                                |                                        |   | 135.7                 |          |              |   | (175.9             | )        |   |   | (40.2   | )      
|Commitments and contingent liabilities                                                                               |                                        |   |                      
|Shareholders (deficiency)
Common stock  $.01 par value;
authorized 20.0 shares; issued and
outstanding 19.7 shares |                                        |   | 0.2                   |          |              |   |                   |          |   |   | 0.2     |        
|                                                                                                                     | Additional paid-in capital             |   |                       |         |              |   |                    |         |   |   |         |        |  
|                                                                                                                     | Accumulated other comprehensive (loss) |   |                       | (45.4    | )            |   |                    | 45.7     |   |   |         | 0.3     |  
|                                                                                                                     | (Deficit)                              |   |                       | (1,453.5 | )            |   |                    | 1,422.6  |   |   |         | (30.9   | )
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|                                                                                                                     |                                        |   | (1,498.7              | )        |              |   | 1,468.3            |          |   |   | (30.4   | )      
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  
|Total liabilities and shareholders equity
(deficiency)                                                              |                                        | $ | 1,985.0               |          |              | $ |                   |          |   | $ | 1,985.0 |        
|                                                                                                                     |                                        |   |                       |          |              |   |                    |          |   |   |         |         |  

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

Pro Formafor the nineNine months ended
    
    Discontinued
    
    months endedSeptember 30, 2003
    
    Operations
    
    September 30,(Consolidated)
    
    (Cablecom)
    
    2003(unaudited)(dollars in millions, except per share amounts)Revenues
    
    $
    366.0
    
    
    $
    (347.8
    )
    
    $
    18.2Costs and expensesOperating expenses (exclusive of depreciation
shown separately below)
    
    
    137.4
    
    
    
    (127.4
    )
    
    
    10.0Selling, general and administrative expenses
    
    
    97.1
    
    
    
    (88.3
    )
    
    
    8.8Other Charges
    
    
    6.4
    
    
    
    (6.4
    )
    
    
    Corporate expenses
    
    
    13.3
    
    
    
    
    
    
    
    13.3Depreciation
    
    
    138.0
    
    
    
    (133.4
    )
    
    
    4.6Amortization
    
    
    8.1
    
    
    
    (8.1
    )
    
    
    400.3
    
    
    
    (363.6
    )
    
    
    36.7Operating (loss)
    
    
    (34.3
    )
    
    
    15.8
    
    
    
    (18.5
    )Other income (expense)Interest income and other, net
    
    
    3.4
    
    
    
    (1.7
    )
    
    
    1.7Interest expense
    
    
    (1,412.0
    )
    
    
    1,407.4
    
    
    
    (4.6
    )Share of (losses) from equity investments
    
    
    (1.8
    )
    
    
    
    
    
    
    (1.8
    )Foreign currency transaction gains (losses)
    
    
    1.2
    
    
    
    
    
    
    
    1.2(Loss) before recapitalization items, income
taxes and discontinued operations
    
    
    (1,443.5
    )
    
    
    1,421.5
    
    
    
    (22.0
    )Recapitalization items, net
    
    
    
    
    
    
    
    
    
    
    (Loss) before income taxes and discontinued
operations
    
    
    (1443.5
    )
    
    
    1,421.5
    
    
    
    (22.0
    )Income tax benefit (expense)
    
    
    (1.4
    )
    
    
    1.1
    
    
    
    (0.3
    )(Loss) from continuing operations
    
    
    (1,444.9
    )
    
    
    1,422.6
    
    
    
    (22.3
    )Discontinued operations:(Loss)
from discontinued operations, including
income tax expense of $1.1
    
    
    
    
    
    
    (1,422.6
    )
    
    
    (1,422.6
    )Net (loss)
    
    
    (1,444.9
    )
    
    
    
    
    
    
    (1,444.9
    )Preferred stock dividends and accretion
    
    
    (8.6
    )
    
    
    
    
    
    
    (8.6
    )Net (loss) available to common shareholders
    
    $
    (1,453.5
    )
    
    $
    
    
    
    $
    (1,453.5
    )Basic and diluted net (loss) per share:(Loss) from continuing operations
    
    $
    (73.94
    )
    
    $
    72.37
    
    
    $
    (1.57
    )(Loss) from discontinued operations
    
    
    
    
    
    
    (72.37
    )
    
    
    (72.37
    )Net (loss) per common share
    
    $
    (73.94
    )
    
    $
    
    
    
    $
    (73.94
    )Weighted average shares
    
    
    19,657,524
    
    
    
    19,657,524
    
    
    
    19,657,524


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

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##### Table of Contents



Company has recorded the mandatorily redeemable preferred stock as debt, and is
accreting 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
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 fourth quarter of
2003. The Company is presently evaluating whether it will be required to
consolidate, beginning October 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 did not 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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##### Table of Contents



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 and
nine months ended September 30, 2003 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 September 30,
    
    Nine Months Ended September 30,2003
    
    
    2002
    
    2003
    
    
    2002Reorganized
    
    
    Predecessor
    
    Reorganized
    
    
    PredecessorCompany
    
    
    Company
    
    Company
    
    
    Company(in millions, except per share data)Net loss for common shares, as reported
    
    $
    (17.0
    )
    
    
    $
    (450.4
    )
    
    $
    (1,453.5
    )
    
    
    $
    (1,754.3
    )Non cash compensation expense
    
    
    
    
    
    
    
    (66.1
    )
    
    
    
    
    
    
    
    (198.2
    )Net
loss for common shares, pro forma
    
    
    (17.0
    )
    
    
    
    (516.5
    )
    
    
    (1,453.5
    )
    
    
    
    (1,952.5
    )Basic and diluted net (loss) per
common share
    
    $
    (0.86
    )
    
    
    $
    (1.87
    )
    
    $
    (73.94
    )
    
    
    $
    (7.06
    )Weighted average shares
    
    
    19,657,660
    
    
    
    
    276,626,475
    
    
    
    19,657,524
    
    
    
    
    276,626,475


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6. Fixed Assets

Fixed assets consist of:

September 30,
    
    
    December 31,2003
    
    
    2002Reorganized
    
    
    PredecessorCompany
    
    
    Company(unaudited)(in millions)Operating equipment
    
    $
    1,182.7
    
    
    
    $
    2,109.25Other equipment
    
    
    78.6
    
    
    
    
    109.5Construction-in-progress
    
    
    43.8
    
    
    
    
    25.11,305.1
    
    
    
    
    2,243.8Accumulated depreciation
    
    
    (140.8
    )
    
    
    
    (561.7
    )$
    1,164.3
    
    
    
    $
    1,682.1


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. Substantially all fixed assets relate to Cablecom and, as
discussed in more detail in Note 3, Cablecom will not be owned by the Company,
nor included in the Companys balance sheet.

7. Reorganization value in excess of amounts allocable to identifiable assets

The reorganization value in excess of amounts allocable to identifiable assets,
is comprised of the following:

ReorganizedCompanyBalance at January 1, 2003
    
    $
    217.2Effects of foreign currency
    
    
    9.3Balance at September 30, 2003
    
    $
    226.5


The reorganization value in excess of amounts allocable to identifiable assets
relate substantially to Cablecom and, as discussed in more detail in Note 3,
Cablecom will not be owned by the Company, nor included in the Companys
balance sheet.

8. Customer Lists

The valuation of the Companys customer lists were:

September 30,
    
    
    December 31,2003
    
    
    2002Reorganized
    
    
    PredecessorCompany
    
    
    Company(unaudited)(in millions)Customer lists
    
    $
    219.5
    
    
    
    $
    234.2Accumulated depreciation
    
    
    (8.2
    )
    
    
    
    (171.4
    )$
    211.3
    
    
    
    $
    62.8


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 customer lists relate solely to

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Cablecom and, as discussed in more detail in Note 3, Cablecom will not be owned
by the Company, nor included in the Companys balance sheet.

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

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

September 30, 2003(in millions)Total equity investments
    
    $
    13.1Total cost investments
    
    
    8.1Total
    
    $
    $21.2


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 £14.6 million ($24.3 million), at September 30,
2003, to fund various of its joint venture and other contractual interests. Of
this amount, approximately £3.3 million has been guaranteed by Parc Holdings.
In addition, Parc Holdings has also guaranteed approximately £13.4 million
($22.3 million) of other Premium TV commitments. 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. Premium TV is currently
in discussions with certain of these joint venture partners 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.

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

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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. In September 2002, 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 September 30, 2003 was £3.81 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 ($7.0 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 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 wound up.

On July 10, 2003, Premium TV altered its arrangements with Eurosport SA
(Eurosport) relating to the British Eurosport television channel. The 1998
agreement between the parties was terminated by mutual consent along with the
related Parc Holdings parent company guarantee. This reduced Parc Holdings
total guarantee commitments to subsidiaries by £8 million. Each of the parties
waived any entitlement it might have had to further payment under the 1998
agreement. In its place, Premium TV and Eurosport entered into a new agreement
under which Premium TV provides consultancy services to Eurosport in relation
to the distribution of British Eurosport and strategic development in areas
such as the Internet and mobile telephony.

On October 15, 2003, Premium TV revised its arrangements with Aston Villa plc.
The Convertible Loan Agreement between the parties, dated January 24, 2000,
which entitled Premium TV to repayment on or after February 21, 2005, by
conversion into ordinary shares representing 9.999% of the enlarged share
capital of Aston Villa, was terminated with the payment from Aston Villa of
£2.3m to Premium TV. The terms of the Rights Agreement, dated January 24,
2000, were amended such that the grant by Aston Villa of Internet and certain
mobile and delayed broadcast rights to Premium TV was extended to June 30,
2007. The appointment of Premium TV (Ventures) (a wholly owned subsidiary of
Premium TV) as exclusive agent for certain other rights was terminated by
mutual consent. The parties also settled various outstanding payments between
them, resulting in a further cash net receipt by Premium TV.

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

Two Way TV Limited 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.

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Prior to October 22, 2003, the Company owned approximately 36.3% of Two Way TV.
On October 22, 2003, in order to address various issues Two Way TV had with
certain of its creditors, Two Way TV filed for administration under UK law. At
an auction held by the administrator on November 14, 2003, Two Way Media
Limited, a newly-formed company, approximately 44.6% of which is owned by the
Company, acquired substantially all of the assets of Two Way TV.

10. 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 9), 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 AB (publ) (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.

B2 Bredband AB (publ)

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

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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, 2002Ownership
    
    Balance(in millions)Noos
    
    
    27.00
    %
    
    $
    B2
    
    
    34.01
    %
    
    
    Iesy
    
    
    32.50
    %
    
    
    Others
    
    
    
    
    
    
    4.7Total equity investments
    
    
    
    
    
    
    4.7Total cost investments
    
    
    
    
    
    
    8.3Total
    
    
    
    
    
    $
    13.0


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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11. Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

September 30, 2003
    
    
    December 31, 2002Reorganized Company
    
    
    Predecessor Company(unaudited)(in millions)Account payable
    
    $
    
    
    
    
    $
    0.3Interest payable
    
    
    
    
    
    
    
    30.4Dividends payable
    
    
    
    
    
    
    
    109.9Accrued expenses
    
    
    
    
    
    
    
    0.2Redeemable preferred stock:Cumulative Convertible Preferred Stock
    
    
    
    
    
    
    
    2,077.3Variable Coupon Redeemable Preferred Stock
    
    
    
    
    
    
    
    484.26.5% Redeemable Preferred Stock
    
    
    
    
    
    
    
    98.413% Senior Redeemable Exchangeable
Preferred Stock
    
    
    
    
    
    
    
    193.4Long term debt:NTL Europe, Inc.:53/4% Convertible Subordinated Notes
    
    
    
    
    
    
    
    100.0NTL Delaware, Inc.:53/4% Convertible Subordinated Notes
    
    
    
    
    
    
    
    1,200.0Total
    
    $
    
    
    
    
    $
    4,294.1


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 cancelled.

12. Long-Term Debt

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

September 30, 2003
    
    
    December 31, 2002Reorganized
    
    
    PredecessorCompany
    
    
    Company(in millions)Cablecom:Term Loan Facility
    
    $
    2,063.8
    
    
    
    $
    1,951.8Revolving Facility
    
    
    806.5
    
    
    
    
    762.7Other
    
    
    5.1
    
    
    
    
    4.82,875.4
    
    
    
    
    2,719.3Less: Fair value adjustment
    
    
    (1,341.8
    )
    
    
    
    Plus: Debt Accretion to September 30, 2003
    
    
    1,341.8
    
    
    
    
    2,875.4
    
    
    
    
    Less current portion
    
    
    (2,875.4
    )
    
    
    
    (2,719.3
    )$
    
    
    
    
    $
    


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
initially due on April 30, 2003 and had been extended to November 18, 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 nine months of 2003, the Reorganized
Company charged Interest Expense for approximately $1,341.8 million to reflect
the accreted value of the Cablecom debt at September 30, 2003.

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 was payable at least every six
months at Swiss LIBOR plus a margin rate of 2.5% per annum, which is subject to

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adjustment. The effective interest rate was 3.51% at December 31, 2002. The
term loan facility was originally scheduled to mature on April 30, 2003 and had
been extended to November 18, 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 was payable
at least every six months at Swiss LIBOR plus a margin rate of 2.5% per annum,
which was subject to adjustment. The effective rate of interest was 3.71% at
December 31, 2002. The unused portion of the commitment was subject to a
commitment fee of 0.75% payable quarterly, which was reduced to 0.50% when over
50% of the commitment was utilized. The revolving facility was originally
scheduled to mature on April 30, 2003 and had been extended to November 18,
2003.

As described in more detail in Note 16, prior to the November 12, 2003
restructuring, Cablecom did not have sufficient resources to satisfy these bank
obligations. In addition, prior to the November 12, 2003 restructuring,
Cablecom and certain of its subsidiaries were overindebted under Swiss law
and, accordingly, but for the recent restructuring, could have been required to
file for insolvency proceedings in Switzerland. Accordingly, during the past
year, Cablecom and its lenders had been involved in ongoing discussions
regarding a complete financial restructuring of Cablecom which would have,
among other things, reduced the amount of bank debt outstanding, extended the
maturity date thereof and resolved the Swiss overindebtedness issue.

A restructuring of Cablecoms debt and equity was completed on November 12,
2003. As a result, effective November 19, 2003, the Company will no longer
have any remaining interest in Cablecom and the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.)
Accordingly, from and after November 12, 2003, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations
and Cablecom will be treated as a discontinued operation beginning in the
fourth quarter of 2003.

13. 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 remained outstanding. At September 30, 2003,
the liquidation preference was $351.8 million for the 6,864,000 shares of
Preferred Stock (exclusive of the $17.2 million of dividends payable, which was
paid on October 15, 2003). The redemption date of such mandatorily redeemable
preferred stock is January 10, 2023. In accordance with Financial Accounting
Standards No. 150 Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity, which became effective on July
1, 2003, the Companys mandatorily redeemable preferred stock has been treated
as debt in the Companys financial statements since that date. Therefore, from
July 1, 2003 forward, dividends and accretion have been (and will continue to
be) included in interest expense.

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

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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.

14. Comprehensive Loss

The Companys comprehensive loss was as follows:

Three Months Ended September 30,
    
    Nine Months Ended September 30,2003
    
    
    2002
    
    2003
    
    
    2002Reorganized
    
    
    Predecessor
    
    Reorganized
    
    
    PredecessorCompany
    
    
    Company
    
    Company
    
    
    Company(in millions of dollars)Net loss for the period
    
    $
    (17.0
    )
    
    
    $
    (448.8
    )
    
    $
    (1,444.9
    )
    
    
    $
    (1,610.8
    )Currency translation adjustments
    
    
    (40.5
    )
    
    
    
    102.0
    
    
    
    (37.0
    )
    
    
    
    (652.6
    )Unrealized gain (loss) on investments
    
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    (17.9
    )Unrealized gain (loss) on derivatives
    
    
    (8.6
    )
    
    
    
    (7.6
    )
    
    
    (8.4
    )
    
    
    
    (31.0
    )$
    (66.1
    )
    
    
    $
    (355.2
    )
    
    $
    (1,490.3
    )
    
    
    $
    (2,312.3
    )


15. Related Party Transactions

On June 23, 2003, the Companys board held a meeting in which they discussed
the exploration of a going private transaction and the formation of a special
committee to consider alternatives in a going private transaction. By action
taken by unanimous written consent on June 23, 2003, the board established a
special committee with Michael Cochran, a member of the board, as its sole,
independent member. The board charged the special committee with reviewing,
considering, investigating, evaluating, negotiating and recommending action to
the entire board with respect to one or more possible going private
transactions. By July 1, 2003, the special committee had retained its own
legal counsel, McKenna Long & Aldridge LLP, and financial advisor, Morgan
Joseph & Co. Inc., to advise it in connection with its duties. Since March
2003, Sean Mathis, a director of the Company, has been affiliated with Morgan
Joseph & Co. Inc. Mr. Cochran has advised the Company that, effective
September 15, 2003, he became Of Counsel to McKenna Long & Aldridge LLP.

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

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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 provided the
services of five of its employees (two of which provided services as of June
30, 2003) 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 cancelled.

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 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

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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.

16. 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. Pursuant to a letter agreement, dated
October 27, 2003, Morgan Stanley Senior Funding Inc. agreed not to take any
further action or make any further claims with respect to all proofs of claim
filed by Morgan Stanley Senior Funding Inc. and its affiliates in the Companys
Chapter 11 proceeding or the subject matter thereof.

B2 Bredband AB (publ)

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

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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 was 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, prior to the November 12, 2003 restructuring, Cablecom
and one of its subsidiaries were indebted in an amount of approximately CHF
3,792 million (which included recent accrued interest payments). The credit
facility was originally scheduled to mature on April 30, 2003 and had been
extended to November 18, 2003. In addition, prior to the November 12, 2003
restructuring, Cablecom had been notified by the lenders that it was in default
under the credit agreement. Accordingly, but for the recent restructuring, the
lenders could have sought to accelerate the maturity of the credit facility at
any time.

Prior to the November 12, 2003 restructuring, Cablecom did not have the
resources to repay the bank debt when it would have become 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, had 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 have
sought 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
have been deprived of all of its ownership interest in Cablecom.

In addition, prior to the consummation of the November 12, 2003 restructuring,
Cablecom and certain of its subsidiaries were overindebted under Swiss law.
If Cablecom had been unsuccessful in consummating a transaction with its
lenders to resolve that overindebtedness issue, the board of directors of
Cablecom could have been 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 were
overindebted and, if there had been 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
have been required to notify a Swiss court and deposit the balance sheets for
Cablecom and its subsidiaries immediately, thereby commencing insolvency
proceedings.

In order to seek to address the foregoing issues, during the past year,
Cablecom and its lenders had been involved in ongoing discussions regarding a
complete financial restructuring of Cablecom which would have, among other
things, reduced the amount of bank debt outstanding, extended the maturity date
thereof and resolved the Swiss overindebtedness issue.

A restructuring of Cablecoms debt and equity was completed on November 12,
2003. As a result, effective November 19, 2003, the Company will no longer
have any remaining interest in Cablecom and

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the Company expects to receive a
payment of $15 million. (See Note 19  Cablecom Restructuring.)
Accordingly, from and after November 12, 2003, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations
and Cablecom will be treated as a discontinued operation beginning in the
fourth quarter of 2003.

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. Owl Creek
has subsequently voluntarily dismissed its complaint against the Company
without prejudice to recommencement in state court where related litigation
against other parties is pending and the Company entered into a tolling
agreement with the plaintiffs to toll the statute of limitations for
recommencement of the action.

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.

On October 21, 2003, Premium TV signed a settlement agreement with Newcastle
United plc and their joint venture company, nufc.co.uk Limited. Under the
terms of the settlement agreement, Newcastle United withdrew the notice it had
served on Premium TV on March 14, 2003 requiring Premium TV to transfer its
shares in the joint venture to Newcastle United on grounds that Premium TV was
insolvent and Newcastle United accepted that Premium TV was solvent as at the
date on which the notice was served. For its part, Premium TV agreed to
discontinue its application for a court declaration that it was solvent. As a
result, the joint venture remains in place.

In addition, the parties agreed to settle various other commercial and legal
matters that had been under dispute between them in relation to the joint
venture, and Premium TV received a net cash payment by way (inter alia) of
settlement for past management services provided to the joint venture. The
parties also agreed to vary the terms of their joint venture arrangements such
that (inter alia) Newcastle Uniteds existing option to purchase Premium TVs
shares in the joint venture was amended.

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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.

17. Dividend on Preferred Stock

On October 15, 2003, the Company paid a semi-annual dividend of $2.50 per share
on the Preferred Stock. The Company has approximately 6,864,000 shares of
preferred stock outstanding, so the aggregate dividend was approximately
$17,160,000. Although the Company intends to pay additional dividends on the
Preferred Stock, there is no requirement under our charter to pay any future
dividends on our Preferred Stock and there is no assurance that we will pay any
such future dividends.

18. Reverse Stock Split

On September 30, 2003, the Companys board of directors approved a 1-for-50,000
reverse stock split of the Common Stock that would have the effect of
terminating the Companys obligations to file annual and periodic reports and
make other filings with the SEC. In connection with the reverse stock split,
stockholders of record holding less than one share of new common stock after
the reverse stock split would receive a cash payment equal to $0.01 for each
share of Common Stock they currently hold. The completion of the transaction
is subject to stockholder approval. The Company filed a proxy statement with
the SEC on October 8, 2003. The Company incurs substantial costs associated
with being a public company, such as accounting and legal fees and D&O
insurance premiums, which would decrease significantly after the Company
terminates the registration of the Common Stock and Preferred Stock.

19. Cablecom Restructuring

On November 12, 2003, Cablecom completed a restructuring of its debt and equity
which, among other things, reduced the amount of bank debt outstanding,
extended the maturity date thereof and resolved the Swiss overindebtedness
issue. As a result of that restructuring, effective as of the close of
business on November 19, 2003, the Company expects to have no further ownership
interest in Cablecom. Also, in connection with the restructuring, on November
19, 2003, the Company expects to receive a payment of $15 million.

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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
|- |  | --------------------------------------------------------------------------



| |  | 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. In that regard, on November 12, 2003, Cablecom GmbH, our former cable
business in Switzerland, completed a restructuring of its debt and equity. As
a result of that restructuring, effective as of the close of business on
November 19, 2003, we expect to have no further ownership interest in Cablecom.
Also, in connection with the restructuring, on November 19, 2003, we expect to
receive a payment of $15 million.

Our board of directors and management have been exploring the strategic
and financial alternatives available to us. In that regard, our board approved
a 1-for-50,000 reverse stock split of our common stock and payment of $.01 per
share, on a pre-split stock basis, for fractional shares. If approved by a
majority of our stockholders, the consummation of the reverse stock split is
expected to reduce the number of holders of our common stock to below 300
thereby permitting us to terminate our registration under the Securities Act.
The number of holders of Preferred Stock is already below 300. Accordingly,
after the effective date of the reverse stock split, we intend to terminate the
registration of our common stock and Preferred Stock (as defined below).

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 net 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 approximately $351.8 million in
liquidation preference, exclusive of dividends payable of $17.2 million at
September 30, 2003, which was paid on October 15, 2003) have been redeemed.

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Subject to our boards determination to retain an appropriate reserve, the
net proceeds of our expected $15 million payment in connection with the
Cablecom restructuring is expected to be subject to this mandatory redemption
provision. 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.

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 has been restructured), our assets
are not material compared to those of New NTL. As discussed below, we expect
to have no further interest in Cablecom as of November 19, 2003. Further, as
discussed above, our board of directors and management have been 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.

Until its restructuring on November 12, 2003, Cablecom had approximately
CHF 3,792 million in bank debt (which included recently accrued interest
payments) that initially matured on April 30, 2003 and had been extended to
November 18, 2003. Prior to the November 12, 2003 restructuring, Cablecom had
insufficient resources to satisfy such obligation. In addition, prior to the
November 12, 2003 restructuring, Cablecom and certain of its subsidiaries were
overindebted under Swiss law and, accordingly, but for the recent
restructuring, could have been required to file for insolvency proceedings in
Switzerland. Accordingly, during the past year, Cablecom and its lenders have
been in discussions regarding a complete financial restructuring of Cablecom.
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 were:



| |  |  | 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

A restructuring of Cablecoms debt and equity on those terms was completed
on November 12, 2003. As a result, effective November 19, 2003, the Company
will no longer have any remaining interest in Cablecom and the Company expects
to receive a payment of $15 million. Accordingly, from and after November 12,
2003, the results of Cablecom will no longer be reported as part of the
Companys consolidated results of operations and Cablecom will be treated as a
discontinued operation beginning in the fourth quarter of 2003. As a result,
our financial statements which include the assets and results of

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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 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.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | 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.

For the Three Months Ended September 30, 2003, as Compared to the Comparable Third Quarter of 2002.

Revenue, for the three months ended September 30, 2003, increased 12.8
percent to $123.7 million from $109.7 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 quarters presented, as well as 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 reflected reductions in the comparable period
as a result of our effort to exit unprofitable business units. However, these
operations only account for approximately three percent of our consolidated
revenue for the current quarter. Premium TVs revenues, in local currency,
decreased by approximately 20 percent during the period, reflecting the
reduction in programming revenue for British Eurosport. During the quarters
ended September 30, 2003 and 2002, Cablecom accounted for 97 percent and 90
percent, respectively, of our consolidated revenue.

Operating expenses (excluding depreciation, which is discussed below)
totaled $46.5 million for the third quarter of 2003, and reflected a decrease
of $4.1 million (or 8.0 percent) over the amount reported for the three months
ended September 30, 2002. In local currency, Cablecom reported a modest
decrease in its operating expenses for the comparable quarters, reflecting
their efforts to control expenses. Cablecoms operating expenses as a
percentage of its revenue, in local currency, decreased to 38.4 percent for the
third quarter of 2003 from 40.3 percent for last years third quarter. Premium
TVs operating expenses decreased (in both local currency and U.S. dollars) as
a result of the reduction in programming activity for British Eurosport, staff
cutbacks and the reduction in media rights charges as rights contracts expired.
During the three months ended September 30, 2003 and 2002, Cablecom accounted
for 98 percent and 78 percent, respectively, of our consolidated operating
expenses.

Selling, general and administrative expenses decreased by $1.1 million
during the third quarter of 2003 from the amount reported for the three months
ended September 30, 2002. In local currency, Cablecoms selling, general and
administrative expenses as a percent of sales were 20.3 percent in the third
quarter of 2003 which approximated the 19.8 percent for the prior years
comparable quarter. Premium TV reported a significant decrease in selling,
general and administrative expenses reflecting Premium TVs cost reduction
programs which were required to bring their expenses in line with their reduced
revenue levels.

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Premium TV recorded an asset impairment charge of approximately $2.2
million during the third quarter of 2002 and Cablecom recorded a similar charge
for $2.5 million, reflecting the write down of various long-term assets. There
was no such charge for the three months ended September 30, 2003.

Other charges totaled $2.8 million in the third quarter of 2003 and $0.1
million in the second quarter of 2002. The charges in the current quarter
relate primarily to legal and accounting fees at Cablecom which were incurred
as the company continues to renegotiate the terms of its outstanding debt
obligations. Last years third quarter charge related to the information
technology integration program at Cablecom, which was substantially completed
during the first quarter of 2003.

Corporate expenses totaled $4.1 million for the three months ended
September 30, 2003, which reflects an increase of $0.9 million over the $3.2
million reported in the comparable 2002 quarter. This increase reflects higher
professional fees incurred by the company as it continues to restructure its
subsidiaries and review its strategic objectives.

Depreciation expense for the third quarter of the year totaled $45.6
million, which is approximately $7.8 million lower than last years third
quarter amount of $53.4 million. In local currency, Cablecoms depreciation
for the third quarter of the year reflected a modest reduction 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 third quarter of 2003 decreased by 92
percent to $2.6 million from $33.4 million for the third quarter of the prior
year. The decrease is primarily due 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 $1.5 million of net
income for the three months ended September 30, 2003, reflecting a change of
$8.3 million from the $9.8 million of net income reported for last years third
quarter. The change is due to the combination of a reduction in interest
income coupled with a reduction in losses recorded on our investments carried
on the cost basis of accounting.

Interest expense for the third quarter of the year totaled $13.6 million
which reflects a $33.1 million reduction from the $46.7 million reported for
the three months ended September 30, 2002. The third quarter change is the net
result of (i) the third quarter effect of the Companys adoption to Financial
Accounting Standards No. 150 (discussed elsewhere in this report) which
accounts for an increase in the quarterly interest expense of $4.6 million over
the prior years third quarter and (ii) a reduction in Cablecoms third quarter
interest expense of approximately $17.7 million, due to the terms and
conditions of its debt restructuring program during the current quarter. In
local currency, Cablecoms interest expense reflected a 52 percent reduction
during the comparable quarters.

Share of losses from equity investments totaled $0.1 million during the
third quarter of 2003, as compared to $81.4 million in the comparable 2002
quarter. The losses during the third quarter of 2002 primarily related to the
Predecessor Companys investments in iesy, B2 and Noos, which were
substantially written off by December 31, 2002.

Foreign currency transaction gains were $0.5 million for the three months
ended September 30, 2003 as compared to $4.7 million 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.

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There were no charges for recapitalization items, net in the third quarter
of the year versus a benefit of $10.1 million for the comparable quarter in the
prior year, when the Predecessor Company adjusted its reporting structure to
reflect the conditions and terms of its Bankruptcy Plan.

We reported an income tax expense of $0.1 million for the third quarter of
2003, versus a tax benefit of $14.7 million in last years third quarter.
This change is primarily attributable to a reduction in the amount of tax
benefit recognized for the current year losses, to the extent such losses would
not reduce existing deferred tax liabilities.

Loss from discontinued operations totaled $295.9 million (net of income
tax benefits of $10.3 million) in the third quarter of 2002. Losses from
discontinued operations included NTL Communications Corp. and subsidiaries, NTL
Australia and Rediffusion (a subsidiary of Cablecom).

For the Nine Months Ended September 30, 2003, as Compared to the Comparable Period of 2002.

Revenue, for the first nine months of 2003, increased 22.6 percent to
$366.0 million from $298.5 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 period presented, as well as, 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 by 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 nine
months of 2003 and 2002, Cablecom accounted for 95 percent and 91 percent,
respectively, of our consolidated revenue.

Operating expenses (excluding depreciation, which is discussed below)
totaled $137.4 million for the first three quarters of 2003, and reflected an
increase of $4.6 million (or 3.5 percent) over the amount reported for the
first nine months of 2002. In local currency, Cablecoms operating expenses
for the first nine months of the year, approximated the amount reported for the
first three quarters of 2002. This is the result of cost reduction programs
offsetting the increased costs required to support its increased revenue.
Cablecoms operating expenses as a percentage of its revenue, in local
currency, decreased to 36.6 percent for the first three quarters of 2003 from
40.1 percent for the first nine months of 2002. Premium TVs operating
expenses decreased significantly during these periods (in both local currency
and U.S. dollars) reflecting the reduction in programming costs for British
Eurosport, staff cutbacks and the reduction in media rights charges as rights
contracts expired. During the nine months ended September 30, 2003 and 2002,
Cablecom accounted for 93 percent and 82 percent, respectively, of our
consolidated operating expenses.

Selling, general and administrative expenses decreased by $3.1 million
during the first three quarters of 2003 from the amount reported for the nine
months ended September 30, 2002. In local currency, Cablecoms selling,
general and administrative expenses as a percent of sales increased to 25.4
percent in 2003 from 21.5 percent for the prior years nine months ended
September 30, 2002. This increase was required to support its addition sales
volume. Premium TV reported a significant decrease in selling, general and
administrative expenses reflecting Premium TVs cost reduction programs which
were required to bring their 2003 expenses in line with their reduced revenue
levels.

Premium TV recorded an asset impairment charge of approximately $15.1
million during the first three quarters of 2002 and Cablecom recorded a similar
charge of $2.5 million, reflecting the write down of various long-term assets.
There was no such charge for the nine months ended September 30, 2003.

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Other charges totaled $6.4 million for the first nine months of 2003 and
$3.5 million for last years comparable period. The charges in the current year
relate primarily to legal and accounting fees at Cablecom which were incurred
as the company continues to renegotiate the terms of its outstanding debt
obligations. Last years charges related to the information technology
integration program at Cablecom, which was substantially completed during the
first quarter of 2003.

Corporate expenses totaled $13.3 million for the nine months ended
September 30, 2003, as compared to $14.4 million for the first nine months of
the prior year. The decrease in corporate expenses for the period reflects a
general decrease in corporate spending due to a reduction of staff and overall
spending for legal, accounting and professional fees, during the comparable
periods.

Depreciation expense for the first nine months of the year totaled $138.0
million, which is approximately $10.3 million lower than last years nine month
total of $148.3 million. In local currency, Cablecoms depreciation for the
period reflected a reduction of approximately 15 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 for the nine months ended September 30, 2003
decreased by 88.4 percent to $8.1 million from $70.1 million for the comparable
2002 period. The decrease is due 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.

Interest income and other income and expense, net was $3.4 million of net
income for the nine months ended September 30, 2003, reflecting a reduction of
$14.3 million from the amount reported for the first nine months of 2002. The
change is due to a reduction in interest income and losses recorded on our
investments carried on the cost basis of accounting and a reduction in expenses
of a miscellaneous nature.

Interest expense for the first nine months of the year is comprised of
three elements. One relates to the normal interest expense incurred during the
period on the Companys outstanding debt (and calculated in accordance with the
terms and conditions of Cablecoms debt restructuring program), and amounted to
$65.6 million. The second element of interest expense relates to the Companys
adoption of Financial Accounting Standards No. 150 (discussed elsewhere in this
report) which accounts for an increase in interest expense in 2003 of $4.6
million over the prior years comparable period. The third element of the
interest expense figure, for the nine months ended September 30, 2003, relates
to the accretion 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
initially due on April 30, 2003 and had been extended to November 18, 2003.
During the first four months 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 2003, the Company charged
interest expense for approximately $1,341.8 million to reflect the accreted
value of the Cablecom debt at April 30, 2003. Interest expense for the nine
months ended September 30, 2002 totaled $132.7 million. This compares to the
current years interest expense of $65.6 million (prior to the accretion of the
Cablecom debt to its face value, as discussed above and the effects of FASB No.
150). This reduction primarily reflects the interest expense recorded during
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 and the reduction
in 2003 in Cablecoms interest expense due to the terms and conditions of its
restructuring plan.

Share of losses from equity investments totaled $1.8 million for the first
nine months of 2003, as compared to $168.1 million for the comparable 2002
period. The losses during 2002 primarily related to

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the Predecessor Companys investments in iesy, B2 and Noos, which were
substantially written off by December 31, 2002.

Foreign currency transaction gains were $1.2 million for the nine months
ended September 30, 2003 as compared to $6.9 million 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 during the first
nine months of the current year, versus charges of $11.6 million for the
comparable period in the prior year.

We reported an income tax provision of $1.4 million for the first nine
months of 2003, versus a tax benefit of $40.2 million for the nine months
ended September 30, 2002. This change is primarily attributable to a reduction
in the amount of tax benefit recognized for the current year losses, to the
extent such losses would not reduce existing deferred tax liabilities.

Loss from discontinued operations totaled $1,174.8 million (net of income tax
benefits of $29.1 million) for the first nine months of 2002. Losses from
discontinued operations included NTL Communications Corp. and subsidiaries, NTL
Australia and Rediffusion (a subsidiary of Cablecom).

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. As of September
30, 2003, we had approximately $55.0 million in cash and our subsidiaries
(other than Cablecom) had an additional amount of approximately $9.7 million in
cash.

We are primarily a holding company for the stock of our subsidiaries, with
no material independent source of cash proceeds. During the next 12 months, we
do not anticipate receiving any material cash proceeds from our subsidiaries
operating activities. Accordingly, we expect to fund our operations primarily
out of our cash of approximately $55.0 million as of September 30, 2003 ($17.2
million of which was paid as a dividend on our Preferred Stock on October 15,
2003) and our subsidiaries (other than Cablecom) cash of approximately $9.7
million. During the next 12 months, 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 the next 12 months, we do not anticipate any
material capital expenditures.

A restructuring of Cablecoms debt and equity was completed on November
12, 2003. As a result, effective November 19, 2003, we will no longer have any
remaining interest in Cablecom and we expect to receive a payment of $15
million. Accordingly, from and after November 12, 2003, the results of
Cablecom will no longer be reported as part of our consolidated results of
operations and Cablecom will be treated as a discontinued operation beginning
in the fourth quarter of 2003.

On September 30, 2003, our board approved a 1-for-50,000 reverse stock
split of our common stock and payment of $.01 per share, on a pre-split basis,
for fractional shares. If approved by a majority of our stockholders, the
consummation of the reverse stock split is expected to reduce the number of
holders of our common stock to below 300 thereby permitting us to terminate our
registration under the Securities Act. The number of holders of Preferred
Stock is already below 300. After the effective date of the reverse stock
split, we intend to terminate the registration of our common stock and
Preferred Stock and cease being a public company.

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Through September 30, 2004, 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 $11.0 million (but not including certain
guarantees to our subsidiaries in the aggregate amount of approximately £4.2
million). (See Note 16  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. In this regard, on October 15, 2003, our board paid a
semi-annual dividend of $2.50 per share on the Preferred Stock. However, there
is no requirement under our charter to pay any future dividends on our
Preferred Stock and there is no assurance that we will pay any such future
dividends. (See Note 17  Dividend on Preferred Stock.) The liquidation
preference of Preferred Stock aggregates $343 million plus an additional
approximate $8.8 million of accrued and unpaid dividends as of September 30,
2003, exclusive of dividends payable of $17.2 million at September 30, 2003,
which was paid on October 15, 2003. 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. Subject to our boards determination to retain an
appropriate reserve, the net proceeds of our expected $15 million payment in
connection with the Cablecom restructuring is expected to be subject to this
mandatory redemption provision. 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 October 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 September 30, 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
$2,875.4 million, $45.6 million and $62.1 million, respectively.

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Less than
    
    1-3
    
    4-5
    
    AfterContractual Obligations
    
    Total
    
    1 Year
    
    Years
    
    Years
    
    5 Years(dollars in millions)Long-Term Debt
    
    $
    2,875.5
    
    
    $
    2,875.5
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Leases
    
    
    47.6
    
    
    
    6.9
    
    
    
    24.4
    
    
    
    8.1
    
    
    
    8.2Unconditional Purchase Obligations
    
    
    91.8
    
    
    
    45.9
    
    
    
    14.1
    
    
    
    3.0
    
    
    
    28.8Other Long-Term Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    $
    3,014.9
    
    
    $
    2,928.3
    
    
    $
    38.5
    
    
    $
    11.1
    
    
    $
    37.0


The following table includes aggregate information about our commercial
commitments as of September 30, 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 September 30, 2003.

TotalAmounts
    
    Less than
    
    1-3
    
    4-5
    
    OverOther Commercial Commitments
    
    Committed
    
    1 Year
    
    Years
    
    Years
    
    5 Years(dollars in millions)Guarantees
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Lines of Credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Standby Letters of Credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Standby Repurchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Commercial Commitments
    
    
    24.3
    
    
    
    2.7
    
    
    
    16.6
    
    
    
    5.0
    
    
    
    Total Commercial Commitments
    
    $
    24.3
    
    
    $
    2.7
    
    
    $
    16.6
    
    
    $
    5.0
    
    
    $
    


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 has recorded the
mandatorily redeemable preferred stock as debt, and is accreting 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

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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 fourth quarter of 2003. The Company is
presently evaluating whether it will be required to consolidate from October 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 did not 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 September 30, 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 September 30, 2003, and as adjusted to give effect to our
emergence from Chapter 11 reorganization.

ThreeMonthsEnding
    
    Year Ending
    
    Year Ending
    
    Year Ending12/31/03
    
    12/31/04
    
    12/31/05
    
    12/31/06Long-term Debt Including Current PortionCHFVariable Rate
    
    CHF3,755.0Swiss LIBORAverage Interest Rate
    
    Plus 2.5%Average Forward Exchange Rate
    
    
    .6227Interest Rate Derivative InstrumentsRelated to Long-Term DebtInterest Rate SwapsNotional 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
    
    
    
    
    
    
    
    
    
    Fair Value12/31/07
    
    Thereafter
    
    Total
    
    9/30/03Long-term Debt Including Current PortionCHFVariable Rate
    
    
    
    
    
    
    
    
    
    CHF3,755.0
    
    CHF3,755.0Average Interest RateAverage Forward Exchange RateInterest Rate Derivative Instruments


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Year Ending
    
    
    
    
    
    
    
    
    
    Fair Value12/31/07
    
    Thereafter
    
    Total
    
    9/30/03Related to Long-Term DebtInterest Rate SwapsNotional CHF Amount
    
    
    
    
    
    
    
    
    
    CHF1,200.0
    
    CHF (41.6)Average Floor Strike RateAverage Cap Strike Rate





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

Many shares of our common stock will likely be cashed out for $.01 per
share, which effectively eliminates any potential profit to be made by an
investment in our common stock.

On September 30, 2003, our board approved a 1-for-50,000 reverse stock
split of our common stock and the payment of $.01 per fractional share of new
common stock, on a pre-split basis. Therefore, if approved by our
stockholders, upon the effective date of the reverse stock split, most common
stockholders will only be entitled to receive $.01 per share of common stock.
Although it is possible that the reverse stock will not be effected, we believe
that common stockholders will not receive more than $.01 per share.

We intend to terminate the registration of our shares of common stock and
Preferred Stock, which will limit the amount of information we send to
stockholders.

As disclosed in our proxy statement filed with the SEC on October 8, 2003,
upon stockholder approval, after the reverse stock split, we intend to
terminate the registration of our shares of common stock and Preferred Stock
and cease being a public company. Since we will no longer be a public company,
we will not be required to provide stockholders with the same information
previously required and we will not be subject to certain other regulations
including the report of short-swing profit recapture provisions of Section 16
of the Exchange Act, as well as many of the provisions of the Sarbanes-Oxley
Act of 2002.

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.

We may not pay any future material dividends on our Preferred Stock which
could negatively impact the market price of the Preferred Stock.

On October 15, 2003, we paid a semi-annual dividend of $2.50 per share on
our Preferred Stock. We have approximately 6,864,000 shares of Preferred Stock
outstanding so the aggregate dividend was approximately $17,160,000. Although
we currently anticipate paying additional dividends on our Preferred Stock,
there is no requirement under our charter to pay any future dividends on our
Preferred Stock and there is no assurance that we will pay any such future
dividends. If we do not pay future dividends on our Preferred Stock, then the
market price of our Preferred Stock will likely decrease.

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

If we effect the reverse stock split and terminate the registration of our
common stock and Preferred Stock, then there will be virtually no trading
market for our securities. Currently, our common

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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 Exchange Act. 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 remained outstanding (plus an additional approximate $8.8 million of
accrued and unpaid dividends as of September 30, 2003, exclusive of dividends
payable of $17.2 million at September 30, 2003, which was paid on October 15,
2003). If we liquidate, holders of Preferred Stock would be entitled to
payment of the liquidation preference and accrued and unpaid dividends in full
before any distribution could be made to holders of common stock. If we
liquidate, the holders of Preferred Stock may not receive the full amount of
their liquidation preference and accrued and unpaid dividends, 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 November 17, 2003, the closing sales price of our common stock
was $0.01. 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. Pursuant
to the reverse stock split, the shares of common stock owned by most
stockholders will be cashed out at $.01 per share.

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

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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.

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 £16.7 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.

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.

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Risk Factors Relating to Cablecom

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

Cablecom completed a restructuring of its debt and equity which, among
other things, reduced the amount of bank debt outstanding, extended the
maturity date thereof and resolved Cablecoms Swiss overindebtedness issue.
Therefore, we anticipate that the results of Cablecom will no longer be
reported as part of our consolidated results of operations and Cablecom will be
treated as a discontinued operation beginning in the fourth quarter of 2003.
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.

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

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.

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.

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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 onForm 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.

Pursuant to a letter agreement, dated October 27, 2003, Morgan Stanley
Senior Funding Inc. agreed not to take any further action or make any further
obligations with respect to all proofs of claim (In the aggregate amount of
$11.4 million) filed by Morgan Stanley and its affiliates in our Chapter 11
proceeding or the subject matter thereof.

In connection with the fact that the Owl Creek litigation (see Note 16 to
our financial statement) has been subsequently voluntarily dismissed without
prejudice to recommencement in state court where related litigation against
other parties is pending. We have entered into a tolling agreement with the
plaintiffs which will toll the statute of limitations for recommencement of the
litigation.

On October 21, 2003, Premium TV signed a settlement agreement with
Newcastle United plc and their joint venture company, nufc.co.uk Limited.
Under the terms of the settlement agreement, Newcastle United withdrew the
notice it had served on Premium TV on March 14, 2003 requiring Premium TV to
transfer its shares in the joint venture to Newcastle United on grounds that
Premium TV was insolvent and Newcastle United accepted that Premium TV was
solvent as at the date on which the notice was served. For its part, Premium
TV agreed to discontinue its application for a court declaration that it was
solvent. As a result, the joint venture remains in place.

In addition, the parties agreed to settle various other commercial and
legal matters that had been under dispute between them in relation to the joint
venture, and Premium TV received a net cash payment by way (inter alia) of
settlement for past management services provided to the joint venture. The
parties also agreed to vary the terms of their joint venture arrangements such
that (inter alia) Newcastle Uniteds existing option to purchase Premium TVs
shares in the joint venture was amended.




Item 2. Changes in Securities and Use of Proceeds.

None.




Item 3. Defaults Upon Senior Securities.

See Risk Factors Related to Cablecom and Note 16 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 third quarter ended September
30, 2003.




Item 5. Other Information.

On November 12, 2003, Cablecom completed its previously-announced
restructuring of its debt and equity. In connection with this restructuring,
we expect to receive $15 million on our about November 19, 2003.

On October 15, 2003, we paid a semi-annual dividend of $2.50 per share on
our Preferred Stock. We have approximately 6,864,000 shares of Preferred Stock
outstanding so the aggregate dividend was approximately $17,160,000. Although
we currently anticipate paying additional dividends on our Preferred Stock,
there is no requirement under our charter to pay any future dividends on our
Preferred Stock and there is no assurance that we will pay any such future
dividends.

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On September 30, 2003, our board approved a 1-for-50,000 reverse stock
split of our common stock that would have the effect of terminating our
obligations to file annual and periodic reports and make other filings with the
SEC. In connection with the reverse stock split, stockholders of record
holding less than one share after the revere split would receive a cash payment
equal to $0.01 for each share of common stock they currently hold. The
completion of the transaction is subject to stockholder approval. We filed a
proxy statement with the SEC on October 8, 2003. We incur substantial costs
associated with being a public company, such as accounting and legal fees and
D&O insurance premiums, which would decrease significantly after we terminate
the registration of our common stock and Preferred Stock.




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



|(a) |  | Exhibits.
|--- |  | ---------



| | 31.1 |  | Certification of Chief Executive Officer pursuant to
Securities Exchange Act Rules 13-a14 and 15d-14.
| | ---- |  | -----------------------------------------------------------------------------------------------------



| | 31.2 |  | Certification of Chief Financial Officer pursuant to
Securities Exchange Act Rules 13a-14 and 15d-14.
| | ---- |  | -----------------------------------------------------------------------------------------------------



| | 32.1 |  | Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.2 |  | Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | * |  | In accordance with SEC Release 33-8238, Exhibits 32.1
and 32.2 are being furnished and not filed.
| | - |  | -------------------------------------------------------------------------------------------------



|(b) |  | Reports on Form 8-K.
|--- |  | --------------------



| | (1) |  | Current Report on Form 8-K, filed September 15, 2003,
announcing the issuance of a press release regarding the approval
of a dividend on the Preferred Stock.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

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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: November 18, 2003 |  | By:              |  | /s/ Jeffrey A. Brodsky                              
|                        |  |                  |  |                                                     
|                        |  |                  |  | Jeffrey A. Brodsky, President and                   
|                        |  |                  |  | Chief Executive Officer                             
|                        |  |                  |  |                                                     
|Date: November 18, 2003 |  | By:              |  | /s/ Richard A. Spohn                                
|                        |  |                  |  |                                                     
|                        |  |                  |  | Richard A. Spohn, Vice President,                   
|                        |  |                  |  | Chief Financial Officer and Chief
Accounting Officer