##### 









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K

(Mark One)



|  |                                                                                      
|- | -------------------------------------------------------------------------------------
|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,
2001

or



|  |                                                                                          
|- | -----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the transition period
from                               to

Commission file no. 0-30673



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NTL INCORPORATED

(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.)
|                                                               
|110 East 59th Street, New York, New
	York                       |  | 10022                               
|(Address of principal executive
	offices)                       |  | (Zip Code)                          

(212) 906-8440

(Registrants telephone number, including
area code)


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

Common Stock, par value $.01 per
share


(Title of class)


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

None


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.  Yes þ  No o

Indicate by check mark whether disclosure by
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this
Form 10-K.  No þ

The aggregate market value of the
Registrants voting stock held by non-affiliates at
March 26, 2002, the last day before suspension of trading
on the NYSE of the Registrants Common Stock, valued in all
cases in accordance with the New York Stock Exchange closing
sale price for the Registrants Common Stock on such date,
was approximately $44,114,400.

Number of shares of Common Stock outstanding as
at March 26, 2002: 276,626,476

DOCUMENTS INCORPORATED BY REFERENCE

|                                                                                                 |  |                   
|------------------------------------------------------------------------------------------------ |  | ------------------
|                                                                                                 |  | Part of 10-K in   
|Document                                                                                         |  | Which Incorporated
|                                                                                                 |  |                   
|Definitive proxy statement for the 2002 Annual
	Meeting of the Stockholders of NTL Incorporated: |  | Part III          



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##### 



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

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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain statements contained herein constitute
	forward-looking statements as that term is defined
	under the Private Securities Litigation Reform Act of 1995. When
	used in this Form 10-K, the words, believe,
	anticipate, should, intend,
	plan, will, expects,
	estimates, projects,
	positioned, strategy, and similar
	expressions identify such forward-looking statements. Such
	forward-looking statements involve known and unknown risks,
	uncertainties and other factors that may cause the actual
	results, performance or achievements of the Registrant, or
	industry results, to be materially different from those
	contemplated or projected, forecasted, estimated or budgeted,
	whether expressed or implied, by such forward-looking
	statements. Such factors include, among others, those set forth
	under the caption Risk Factors in this
	Form 10-K as well as: the ability of the Company to
	continue as a going concern; the ability of the Company to
	obtain trade credit and shipments and terms with vendors and
	service providers for current orders; the Companys ability
	to maintain contracts that are critical to its operations;
	potential adverse developments with respect to the
	Companys liquidity or results of operations; the ability
	to fund and execute its business plan; the ability to attract,
	retain and compensate key executives and associates; the ability
	of the Company to attract and retain customers; general economic
	and business conditions; technological developments; the
	Companys ability to continue to design networks; install
	facilities; obtain and maintain any required governmental
	licenses or approvals; and finance construction and development,
	all in a timely manner at reasonable costs and on satisfactory
	terms and conditions, as well as assumptions about customer
	acceptance, churn rates, overall market penetration and
	competition from providers of alternative services, the impact
	of restructuring and integration actions, the impact of new
	business opportunities requiring significant up-front investment
	and interest rate and currency exchange rate fluctuations.

In this Annual Report on Form 10-K,
NTL, the Company, we,
us, and our refer to NTL Incorporated
and its consolidated subsidiaries except where we expressly
state that we are only referring to NTL Incorporated or the
context otherwise requires that we are referring only to NTL
Incorporated.

In this Report on Form 10-K, references to
(pound sterling) pounds sterling,
(pound), pence or p are to
the lawful currency of the UK, references to (euro)
or Euro are to the lawful currency of the European
Monetary Union, references to IR(pounds) or
Irish punts are to the historically lawful currency
of the Republic of Ireland, references to FRF or
Francs are to the lawful currency of France,
references to A$ are to the lawful currency of
Australia, references to CHF are to the lawful
currency of Switzerland and references to
U.S. dollars, dollars,
$ or  (cent) are to the lawful
currency of the United States. Solely for the convenience of the
reader, this Form 10-K contains translations of some
foreign currency amounts into U.S. dollars and some
U.S. dollar amounts into foreign currencies. You should not
construe these transactions as representations that the foreign
currency amounts actually represent such U.S. dollar
amounts or vice versa or could have been or could be or will be
converted into U.S. dollars or foreign currencies, as the
case may be, at the rate indicated or at any other rate. Unless
otherwise indicated, the translations of foreign currencies into
U.S. dollars and U.S. dollars into foreign currencies
have been made at $1.4543 per UK (pound) 1.00, $.8901
per (euro) 1.00, $1.1337 per IR (punt) 1.00, $.1357
per FRF1.00, $.5117 per A$1.00 and $.5828 per CHF1.00, the noon
buying rates in the City of New York for cable transfers as
certified for customs purposes by the Federal Reserve Bank of
New York on December 31, 2001. On March 31, 2002, the
Noon Buying Rate was $1.4250 per (pound) 1.00,
$.8717 per (euro) 1.00, $1.2539 per IR (punt)
1.00, $.1329 per FRF 1.00, $.5333 per A$1.00 and
$.5945 per CHF1.00.

ii



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TABLE OF CONTENTS

|                                           |  |                                                                                        |     |      |    | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------- | --- | ---- | -- | 
|                                           |  |                                                                                        |     | Page
|                                           |  |                                                                                        |     |     
|PART I                                    
|NTL Corporate Structure                    |  |                                                                                        | 1   |     
|Item 1.                                    |  | Business                                                                               |     |      | 2  | 
|Item 2.                                    |  | Properties                                                                             |     |      | 26 | 
|Item 3.                                    |  | Legal Proceedings                                                                      |     |      | 26 | 
|Item 4.                                    |  | Submission of Matters to a Vote of Security
	Holders                                   |     |      | 26 | 
|PART II                                   
|Item 5.                                    |  | Market for the Registrants Common Equity
	and Related Stockholder Matters             |     |      | 27 | 
|Item 6.                                    |  | Selected Financial Data                                                                |     |      | 29 | 
|Item 7.                                    |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |     |      | 30 | 
|Item 7A.                                   |  | Quantitative and Qualitative Disclosures About
	Market Risk                            |     |      | 46 | 
|Risk Factors                               |  |                                                                                        | 50  |     
|Item 8.                                    |  | Financial Statements and Supplementary Data                                            |     |      | 56 | 
|Item 9.                                    |  | Changes in and Disagreements with Accountants on
	Accounting and Financial Disclosure  |     |      | 57 | 
|PART III                                  
|Items 10, 11, 12, and 13                   |  |                                                                                        | 57  |     
|PART IV                                   
|Item 14.                                   |  | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K                      |     |      | 57 | 
|Exhibit Index                              |  |                                                                                        | 58  |     
|Signatures                                 |  |                                                                                        | 66  |     
|Index to Consolidated Financial Statements |  |                                                                                        | F-1 |     

iii



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PART I

NTL CORPORATE STRUCTURE

NTL Incorporated, a Delaware corporation, was
incorporated in December 1999, to effect a reorganization into a
holding company structure under Section 251(g) of the
Delaware General Corporation Law. The holding company structure,
which was implemented in May 2000 in connection with the
acquisition of the residential assets of Cable & Wireless
Communications plc, was accomplished through a merger. The
stockholders of NTL (Delaware), Inc. (formerly NTL
Incorporated), at the effective time of the merger became
stockholders of the new holding company, and NTL (Delaware),
Inc. became a subsidiary of the new holding company. The new
holding company then took the name NTL Incorporated. NTLs
principal executive office is located at 110 East
59th Street, New York, New York 10022, and its
telephone number is (212) 906-8440.

On February 21, 2001, NTL Incorporated
contributed the residential broadband and business cable
operations of Cable & Wireless Communications to NTL
Communications Corp., a wholly-owned subsidiary. On
February 21, 2001, NTL (Delaware), Inc. contributed the
assets of NTL Business (formerly Workplace Technologies plc) to
NTL Communications Corp. The following chart shows on a
condensed basis the corporate structure of NTL through which our
operations are conducted and investments held, accounting for
both contributions. The chart does not show our operating or
other intermediate companies or ownership interests in those
entities. Please note that the following chart does not reflect
the sale of NTL Australia that was completed on April 2,
2002.




1



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Item
1.     Business.

RECENT DEVELOPMENTS

Recapitalization Process

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

The following business description does not
address the possible risks or negative impacts that could result
from the recapitalization process and our liquidity position.
Accordingly, this section must be read in conjunction with
Item 7 Managements Discussion and Analysis of
Financial Condition and Results of Operations and the Risk
Factors set forth in that section, and the Financial Statements
and related notes.

Sale of NTL Australia

On April 2, 2002, we announced that we had
completed the previously announced sale of our Australian
broadcast business to Macquarie Bank for A$850 million
(US$448 million) in an all cash transaction. NTL Australia
owned and operated the most extensive terrestrial broadcast
transmission network in Australia with over 98% population
coverage provided from 578 sites located across metropolitan,
regional and rural areas. For the year ended December 31,
2001, NTL Australias revenues were approximately
A$119 million (US$62 million) generating EBITDA of
approximately A$52 million (US$27 million). NTLs
Australian operations also included a 51% share in a joint
venture, NTLT, with two Australian regional broadcasters (WIN
Television and Southern Cross Broadcasting) operating a carrier
grade wholesale microwave telecommunications network along the
east coast of Australia.

2



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ABOUT NTL

NTL is the leading broadband communications and
broadband services company in the UK and the Republic of
Ireland. We also provide telecommunications services in
Switzerland and Australia and have made strategic investments in
broadband operations in France, Germany and Sweden. Unless
otherwise indicated, the following business description is as of
December 31, 2001 and includes a description of NTLs
businesses in Australia which were subsequently sold.

We offer services to residential, business and
wholesale customers on a national and international scale.

Our predominant lines of business are:



| |   |                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Consumer Services,including residential telephony,
	cable television, Internet access and interactive services;                                                                                     
|
| |  | Business Services,including business telephony,
	national and international carrier telecommunications, Internet
	services and radio communications services; and                                   
|
| |  | Broadcast Transmission and Tower Services,including digital and analog
	television and radio broadcasting, wireless network management,
	tower and site leasing and satellite distribution services.

We believe that our operational success to date
has been due largely to our focus on customer service and the
development of services that emphasize value rather than simply
low prices. Our product offerings incorporate our fundamental
proposition of providing our customers with a full range of
choices.

Our business is underpinned by the
$15.9 billion investment we, and companies we have
acquired, have made in our network infrastructure. We provide
our broad range of services over local, national and
international networks. This network infrastructure consists of:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Broadband Communications Networksin the UK that currently pass
	approximately 8.4 million homes and can be expanded to
	cover over 11 million homes in our regional UK franchise areas.
	These high-capacity two-way local broadband fiber networks serve
	entire communities throughout these regional franchise areas.
	Our fiber optic cables pass a significant number of businesses
	in these areas and are connected to distribution points, or
	nodes, which are typically within approximately 500 meters of
	each of the 500 homes typically served by each node. Each home
	is then connected by a cable allowing us to deliver telephone,
	cable television and Internet services over a single integrated
	network.

Additionally, we have broadband cable networks in
Switzerland and the Republic of Ireland that currently pass
approximately 2.3 million homes. These primarily analog
cable television networks are in the process of being upgraded
to allow for higher capacity signals and a suite of new products
including digital television, cable modem Internet access and
voice telephony.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A National/ International Synchronous
	Digital Hierarchy, known as SDH, Fiber Optic Telecommunications
	Networkin the UK which connects
	all of the major population centers in the UK to Ireland,
	continental Europe and the United States. SDH allows high speed
	data transmission and redirects transmissions in the event of a
	problem to prevent any disruption. This backbone network
	utilizes Asynchronous Transfer Mode, known as ATM, technology, a
	high speed, high bandwidth technology, and was built with
	sufficient duct capacity to accommodate over 2,300 fibers on the
	majority of the network. We designed this network to allow us to
	place the active components, such as routing devices, close to
	our customers, allowing us to offer a broad range of voice and
	data services.
|
| |  | National Broadcast Transmission and Tower
	Network Infrastructure in the UK and Australia,which provide national, regional
	and local broadcast and wireless communications coverage. We
	own, lease, manage, or have access to, over 2,900 multi-user
	sites, including over 2,300 sites in the UK and over 575 sites
	in Australia. Our fixed line and tower networks in the UK are
	interconnected at numerous sites.                                                                                                                                                                                                                                                                                                                                                                                       

3



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NTLs Businesses in the UK &
Australia

We spent 2001 integrating our UK operations
following several years of acquisition and growth. Between 1998
and 2000, we expanded our UK operations significantly,
predominantly through acquisitions. Between June 1998 and July
1999, we acquired the UK broadband operations of Comcast UK
Cable Partners, Diamond Cable and ComTel as well as the
Westminster and Milton Keynes cable franchises of British
Telecommunications, or BT. In May 2000, we further increased our
UK operations by completing our acquisition of the residential
broadband and business cable operations of Cable & Wireless
Communications, also known as Consumer Co.

In the UK, we provide a broad range of
communication services:



| |   |                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ntl: home,delivering broadband services to residential markets comprising
	residential telephone, analog and digital cable television,
	narrowband and broadband Internet access and interactive
	services;
|
| |  | ntl:
	business,comprising business
	telecommunications, national and international carrier
	telecommunications, Internet services and radio communication
	services;                                       
|
| |  | ntl:
	broadcast,delivering digital and
	analog television and radio broadcast transmission services,
	wireless network management, tower site rental and satellite and
	media services.                    

ntl:
home

We are the largest provider of broadband services
in the UK. As of December 31, 2001, we had approximately
2.8 million residential cable television and telephony
customers and over 4.97 million revenue generating units,
which we refer to as RGUs. At such date, our penetration rates
were approximately 35% telephone penetration, 29% cable
television penetration and 37% customer penetration.

Throughout 2001, we worked to streamline our
subscriber base, removing a backlog of approximately 45,000
non-paying and non-profitable customers in the second half of
the year. We are planning to remove an additional 14,000 in the
first quarter of 2002. We remove non-paying and non-profitable
customers if our standard collections procedures do not achieve
a satisfactory result. The action taken to remove non-paying
customers provides us with a stronger customer base. Our average
churn rate for the quarter ending December 31, 2001 was
21.3% on an annualized basis. Our average churn rate for the
same period excluding involuntary disconnects would have been
17.7% on an annualized basis.

We believe the most effective strategy to
maximize revenues and penetration for our residential offerings
is to bundle together telephone, cable television and Internet
services. Our product and pricing strategies emphasize choice,
value and quality and are designed to encourage subscription to
multiple services to maximize customer retention and average
revenue per customer.

Including capital expenditures made by the
companies and businesses acquired by NTL, we have spent
approximately $11.2 billion on our network infrastructure
in the UK.

Our core network consists of optical fiber
connected to distribution points, or nodes, each typically
serving up to 500 homes, from which we provide coaxial cable and
two copper pair telephone wires into each home. This cabling
enables the provision of two telephone lines, an analog or
digital television service and a high speed cable modem service
to each customers home.

Our fiber network has the capability to carry
telephone services as well as high speed data services. The
fiber network is capable of supporting digital subscriber lines,
or DSL, which consist of a bi-directional 2Mb/s connection
capable of supporting 30 voice channels and enable the provision
of higher capacity services to business customers. We are able
to support digital and interactive services as well as advanced
video services over our network through cable modems that enable
Internet access at almost 10 times the speed of conventional
dial up access.

Our cable modem service has been engineered to
provide high quality residential high speed Internet access
service. It is therefore able to support small businesses and
people who work from home, including enabling a link to a
companys local area network, or LAN. We have in place the
next generation of network

4



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technology using Internet protocol, or IP, over
optic fiber cable technology in our core backbone network. This
technology, in which data is broken up into discrete packets for
transmission, enables more efficient use of network capacity,
meeting growth at lower unit cost and positioning NTL to provide
high speed broadband access on a mass scale.


Internet
access

In March 2000, we announced a plan to offer our
residential customers throughout the UK free, unlimited Internet
access via their personal computers or, where available,
televisions. This Internet service is called
ntlworld and became available to some of our
customers beginning in April 2000. As of December 31, 2001,
we had approximately 695,000 ntlworld customers within our local
franchises and 29,000 customers who used our service via digital
TV access. We have decided to begin charging our customers for
this service; however, we believe that we remain highly
competitive in this segment of the market.

Since the launch of ntlworld, the trend in UK
Internet pricing has been towards offering unlimited Internet
access for a higher fixed charge, as Internet penetration has
grown and Internet usage has increased. In January 2002, we
announced our decision to begin charging our customers for
service and the launch of two new packages: Pay as you
go, a metered service at 1p per minute; and
Unlimited, an unmetered service at £10 per
month. All subscribers to the free ntlworld service will be
transferred to either Pay as you go or
Unlimited during the first half of 2002. Existing
ntlworld customers will benefit from a £5 per month price
for Unlimited for a period of time.

In 1999, we were the first communications
provider in the UK to launch a high-speed cable modem Internet
service, which links customers of our local cable franchise
networks to the Internet at up to ten times the speed possible
over standard telephone lines. As of December 31, 2001, we
had approximately 118,000 cable modem customers. Approximately
80% of our networks are currently able to provide this service
to our customers. Our high-speed Internet service currently
operates at a speed of up to 2.0 Mb/s and is offered at minimum
delivery speeds of 128 Kb/s, 512Kb/s or 1Mb/s. The service is an
always on service, removing logging-on delays and
the need to log off while using the telephone. It uses the
hybrid fiber coaxial cable portion of our broadband network,
which allows customers who also subscribe to a telephony service
to simultaneously make or receive telephone calls while
accessing the Internet. The 128 Kb/s and 512 Kb/s services are
currently offered at flat rates of £14.99 and £24.99
per month, respectively, including the rental of a cable modem.
This compares with the newly announced prices for Freeserve and
BTOpenworld 512Kb/s ADSL services of £29.99 per month plus
purchase of the modem. In the first quarter of 2002, we launched
a 1 Mb/s modem offer at a price of £49.99 per month. We are
currently the only provider offering 1 Mb/s service in the UK.

Franchise
customers

We first introduced a bundled cable service to
our franchise customers in 1996, when we implemented a
promotional pricing and packaging structure called
Choices. Since then, we have continued to refine and
enhance our offering. The packages we currently offer to our UK
residential franchise customers, excluding customers in Milton
Keynes and Westminster, where we plan to launch broadband in
2002, and in some former Cable & Wireless Communications
franchises which only offer cable television, comprise:



| |   |                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | telephone service, including a second telephone
	line for an additional charge unless the customer decides not to
	take television (99% of potential customers are now offered the
	3-2-1 simplified telephone rate plan);
|
| |  | narrowband Internet access service, if the
	customer takes a telephone service (97% of potential customers
	can subscribe for ntlworld flat rate narrowband Internet
	service);                                             
|
| |  | broadband Internet access service (two thirds of
	potential customers can subscribe for 128 Kb/s or 512 Kb/s
	broadband Internet service);                                                                                  
|
| |  | all of the current terrestrial television
	channels and access to multi-channel television, including pay
	per view; and                                                                                                    
|
| |  | interactive television services.                                                                                                                                                                                            

5



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Our packaging and pricing are designed to
encourage our customers to use multiple services such as dual
telephone and broadband, dual telephone and narrowband, dual
telephone and TV, or triple telephone, TV and Internet access.
Only telephone, with its low capital expenditure requirements
and high margins, is available widely as a stand-alone single
product. Of our competitors, only Telewest, which does not offer
its services in our franchise areas, is able to offer the full
range of services we provide (see table below).

|         |  |          |  |    |  |          
|-------- |  | -------- |  | -- |  | ---------
|         |  |         
|         |  |         
|         |  | Internet |  | TV |  | Telephone
|        
|        
|NTL      |  | ü        |  | ü  |  | ü        
|        
|BT       |  | ü        |  | X  |  | ü        
|        
|BskyB    |  | X        |  | ü  |  | ü        
|        
|Telewest |  | ü        |  | ü  |  | ü        
|        

Cable
television

The selection of analog cable channels that we
currently offer to our franchise customers varies based on the
particular franchise area. This variation is a result of the
different channel offerings we have inherited as a result of our
acquisitions of various cable franchises over the past several
years. Variation between franchise areas will increasingly be
removed as digital cable television is rolled out offering the
same channels, subject to regional programming variations. In
addition to offering many of the popular channels available on
BSkyBs satellite platform, we also offer to all of our
franchise customers, through our joint venture with Telewest, a
cable-only movie, sport and special events pay per view
television service called Front Row that we rolled
out to our customers beginning in March 1998. Our joint venture
with Telewest represented the first ever alternative in the UK
to BSkyB in the provision of films and sports events through pay
television. Front Row has signed content output contracts with
major Hollywood studios, including Warner Brothers, Sony
Pictures Entertainment (Columbia/ Tri-Star), the Walt Disney
Company (Walt Disney Studios, Miramax, Hollywood Pictures and
Touchstone), Dreamworks, MGM and Universal.

Interactive
services

We have moved rapidly to take advantage of the
convergence between the Internet and television and the advent
of digital cable television. We are currently aggregating a
broad range of interactive content into a service that can be
deployed as part of our interactive television offering to our
residential customers. Our interactive offering comprises a free
television e-mail service, a walled garden of
partner websites that have been specially redesigned for
television and an online customer service application that
allows select customers to see their NTL bill via the television.

We have established relationships with over 75
content providers to deliver a wide range of interactive
services, including education, shopping and banking, finance,
travel, entertainment, games, news, sports and local content.
Interactive content is organized into channels, including news,
sports, travel, lifestyle, money, entertainment and shopping.
Our partners include Sainsburys, Iceland, QVC, W.H. Smith
and Dominos Pizza. The travel channel includes content
partners such as Go Airlines, Thomas Cook Travel Select and
Teletext and the money channel features content partners such as
Abbey National, The Halifax and Bloomberg.

We also offer additional channels providing up to
date news and weather information, games and educational
content. Where appropriate, our contracts with content providers
require the payment of tenancy fees as well as commissions on
e-commerce transactions. We also derive revenues from the
advertising opportunities that exist across our interactive
service offering.

Telephony

In 1999, we launched the NTL 3-2-1
call plan for our residential franchise customers where national
and local calls cost only three pence per minute during the day,
evening calls cost two pence per minute and

6



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weekend calls cost one pence per minute. We are
able to offer this plan by using our national telecommunications
and local networks and bypassing a portion of the wholesale long
distance fees which would otherwise be charged by BT and other
carriers for carrying calls to and from our local franchise
networks. In 2002, we have begun the roll-out of our Talk
Unlimited service, whereby customers can make unlimited
calls on evenings and weekends to local and national fixed line
numbers for a flat fee of £8 per month in addition to
their standard line rental.


Indirect
access

On November 7, 2001, we announced our sale
of the right to offer services to approximately 230,000 indirect
access telephone customers to Innogy for approximately
£23 million ($33 million) including the
collection of certain future service revenues and existing
receivables.

We acquired these indirect access customers as
part of the acquisition of the residential businesses of Cable
& Wireless Communications in May 2000. However, as these
customers were not connected to our national backbone network,
they could not benefit from our simplified calling tariffs, cost
base or dial-up Internet service. Rather than risk the
substantial churn associated with the process of migrating the
customers to the NTL network and services, we determined that
the sale of the customer base would result in the highest
realizable value of the asset.

As of December 31, 2001, we had
approximately 118,000 off-net customers of which approximately
89,000 are also customers of our ntlworld Internet service. We
do not incur the unfavorable interconnect costs that were
related to servicing the Cable & Wireless indirect access
telephony base because these indirect access customers are
served by our national network.

Customer
management systems

For most of our franchise areas, we use advanced
billing and customer management systems which enable us to
control all aspects of a customers account for both
telecommunication and television products. We currently operate
a number of billing systems inherited from the different
operations we have acquired. We are in the process of merging
these different systems onto a single platform, which we expect
will reduce costs and improve customer satisfaction.

Premium
TV

Premium TV Limited, which is a wholly owned
subsidiary of NTL, has a joint venture with Eurosport, the
pan-European basic tier sports channel, to develop British
Eurosport, a version of Eurosport tailored to appeal to UK
viewers. This channel is now available to all of NTLs UK
pay television homes.

Premium TV has also entered into long-term joint
ventures with a number of UK football (soccer) teams
including Rangers, Leicester, Middlesbrough and Newcastle, as
well as the Football League, which represents 76 teams, and
has entered into a five-year operating agreement with Aston
Villa. These joint ventures are intended to develop the football
teams Internet and broadband rights which may include
audio-visual footage of matches on a delayed basis and live
audio coverage of matches.

Premium TV is developing a Classic Sports
television channel, and has a contractual arrangement with the
BBC permitting Premium TV to show historical football
(soccer) matches from the BBCs library.

ntl:
business

The primary objective of our business services
division in the UK ntl: business is to provide
a comprehensive range of voice, data and application based
communications services for our business customers.

Our existing customer base incorporates both
private and public sector organizations. Within the private
sector we focus on the areas of finance, utilities and travel.
Within the public sector we have a substantial share of the
market in emergency services, local government and education
telecommunications requirements.

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Our business strategy is to fully exploit our
superior network capability and place an increasing emphasis on
broadband products and services. Rather than simply offering our
customers a lower price for their existing service, we offer a
package of services designed to address all their communications
needs at a price which offers good value. For our smaller
business customers, we are providing a range of bundled packages
based on our standard services and standard terms and
conditions. For our larger customers, we offer services which
are tailored for their specific needs.

ntl: business has developed a diverse portfolio
of skills and services through both product development and a
number of significant acquisitions. Beginning in 2000, we
commenced a program to integrate the skills and abilities of
employees from Workplace Technologies, X-tant and
ConsumerCos small business team with those of the existing
business telecom operations, to create a single integrated
portfolio and customer support organization. Another example of
this strategy is our acquisition in the third quarter of 2001 of
the UK assets and contracts of Viatel UK. Viatel was a provider
of managed data and voice services to UK based corporate
companies and also provided voice services to resellers, voice
and Internet services to wholesalers and managed data services
to other European managed service providers. In addition, we
continue to focus specific sales and marketing efforts on
winning business customers in our franchise areas and increasing
revenue from our existing customers.

Since August 1, 2001, ntl: business has
been structured with three key business units within the overall
UK communications market. These business units are Retail,
Managed Network Services (incorporating Mobile, Enterprise,
Public Safety and VISP) and Carrier Services. The segmentation
enables us to develop a deeper understanding of our
customers businesses which enables us to craft specific
solutions and trading alliances appropriate for each specific
market. The discussions below reflect the old structure of
ntl: business.

Following our analysis of published OFTEL
statistics for telecommunications services, and Gartner Group
statistics for other communications services, we estimate the
size of the market in which we compete to be in excess of
£24.5 billion for the year 2002. Of the total
communications market, we estimate that approximately
£17.5 billion represents business telecommunications
and £7 billion represents carrier telecommunications
services.

Our network already passes within 200 meters
of more than 570,000 business premises in the UK. However, as a
result of the reach of our national network, we can serve a
substantial portion of the UKs approximately
1.2 million business premises through means such as
indirect access. These premises host approximately
1.5 million business customers. We believe that the
architecture and reach of our network infrastructure has
positioned ntl: business to play a leading role in the delivery
of broadband services to UK businesses going forward. We plan to
exploit demand for broadband services primarily through our
broadband cable modem product which was launched in the second
quarter of 2001, and our E-1 Direct Internet Access Service. We
will continue to market our standard products and services
ranging from telephony and Internet access to data and
e-commerce and managed services. These services will be
delivered via copper wire, coaxial cable, fiber and wireless.

Retail and
Enterprise

In our local direct markets (retail), our
approach is to think nationally but act locally. In
our business markets, our approach is to enable businesses to
become more efficient and effective. Our focus is on small to
medium sized businesses.

Our business model for dealing with small
businesses has changed over the last twelve months. In October
2000, we opened a new small business call center which uses
telephone account management techniques to sell and service a
range of simple business bundles for smaller businesses across
the UK. Under this new business model, we have developed
sophisticated marketing programs for our target customer base.
In the second quarter of 2001, we added broadband services to
the business bundle. In December 2001 we launched our new web
site allowing customers to self provision a range of products
and view their bills on-line.

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Across these market sectors, we plan to utilize
our national capabilities and the expertise of our market
focused account management and technical support teams to target
specific business sectors and increase penetration.

As of December 31, 2001, we had
approximately 76,000 business customers with an average of
5.1 lines per customer for a total of approximately 380,000
retail business telephony lines installed in the UK.

We offer the following business products and
services to our business customers:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Access Servicesthat
	connect our customers to us for inbound and outbound voice and
	data calls. These access services include additional analog
	business exchange lines, or BELs, and digital business exchange
	lines, or DELs. DEL services include basic rate access, also
	known as ISDN2, and primary rate access, also known as ISDN30.
	We believe these and other direct and indirect access services
	are priced competitively and are often in competition with
	similar services provided by a number of other direct and
	indirect suppliers. In the second quarter of 2001, we launched a
	business cable modem service that enables the delivery of
	broadband services to our business customers.
|
| |  | Managed Voice Services/Virtual Private
	Networksthat are best illustrated by
	our central exchange Centrex service. Through this
	service we provide our customers with business exchange lines
	configured as a virtual PABX, where we provide the
	services normally associated with a traditional PABX located at
	a customers premises. We provide these services on a
	rental basis which allows our customers to avoid the expense
	associated with an outright capital purchase and maintenance
	costs.                                                                                                                                                                                               
|
| |  | Managed Data Servicesthat include point to point private
	circuits at speeds of multiples of 64 Kb/s and individually
	tailored 100 Mb/s and 155 Mb/s services. Other services include
	the provision of inter-site data services with particular
	transmission protocols, such as Internet Protocol also known as
	TCP/IP, Frame Relay and ATM.                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Managed Local Area Networks (LANs),in order to support the developing
	needs of our business market, we have established significant
	capabilities that enable us to fully manage LANs or to design,
	project manage and integrate new LAN platforms for our customers.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | 08xx Servicesthat
	include free local and national call services together with a
	range of other routing features based on our network. These
	services enable our customers to manage inbound calls and
	establish varying tariffs for their customers to contact them.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Internet Services,in order to provide our customers with
	the tools they require to build their e-business services
	including dedicated, high-speed Internet access services, web
	hosting services, and specific individually tailored
	applications securing and protecting their e-businesses. The
	range of services we provide also includes the provision of
	simple, inexpensive software to enable our customers to begin
	doing business over the Internet.                                                                                                                                                                                                                                             

We have a variety of alternative methods to carry
our national telecommunications network over the last
mile to the premises of those customers which are located
outside of our franchise area:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Obtaining permits to construct telecommunications
	networks, and building out our network to reach our customers.
	Although this is often the most costly means of reaching a
	customer, the expense can be justified in the case of larger
	customers or where a significant level of traffic is obtained
	from a customer. For example, we have extended our fiber optic
	network within London to reach and support CNNs facilities.
|
| |  | Leasing circuits on the local networks of other
	service providers to connect to our customers premises.
	Although this may reduce the operating margin on a particular
	account, it requires significantly less capital expenditure than
	a direct connection, can often be put in place relatively
	quickly and can be replaced at a later date if traffic volumes
	justify it.                                                      
|
| |  | Connecting customers to our national
	telecommunications network by implementing microwave radio links
	which utilize our significant tower infrastructure to connect
	our network to our customers, using digital point to point
	microwave radio links. Alternatively, we believe our license to
	operate radio fixed                                                                                                                 

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | access services on a national basis throughout
	the UK at the 10 Ghz frequency, could enable us to use
	wireless local loop technology to connect our
	network to our customers, although we are not currently
	utilizing this approach. Either of these two methods requires
	the installation of a mini-tower site on the roof of the
	customers premises to receive and broadcast data.
	Wireless local loop connectivity would enable a
	radial transmission to a number of sites surrounding the
	mini-tower whereas point to point connectivity enables
	transmission between two points only.

Public
Safety

In addition to meeting the traditional voice and
data requirements of businesses throughout the UK, our Radcomms
business offers a full range of communications services,
including the design and operation of radio networks and the
provision of support, maintenance and facility management
services to customers who provide public safety services to the
community. Our customers include primary providers such as
police, fire and ambulance and secondary providers such as
H.M. Prison Service, the Coast Guard and the Royal National
Lifeboat Association. We have been servicing a substantial
portion of the radio installation and maintenance market for
public safety in the UK for many years and our public safety
customers provide us with a relatively steady source of revenue.

We intend to position ourselves to increase our
activities in the public safety sector from facilities and
maintenance activities into complete outsourcing arrangements.
We believe we are at the forefront of managed communication
services in the public safety sector, and we believe that the
majority of the British Public Safety Services will move from
their current service arrangements into outsourcing and the
provision of fully managed services. We believe we have already
established a strong position in outsourcing services and
facility management for these mission critical customers, and
plan to continue to build on our existing relationships with
current customers. An example is the Metropolitan Police
Authority (New Scotland Yard), for which we manage
communications services for over 25,000 police officers.

Wholesale
(Carrier Services, Mobile and VISP)

Our wholesale markets groups main focus is
the supply of UK infrastructure and bandwidth to national and
international telecommunications operators. Our national and
local networks are used to interconnect these carriers to cities
in the UK and Ireland. NTL wholesale has seen continued growth
over the last five years, and has successfully positioned itself
as a key supplier of wholesale services. We expect to continue
to serve the wholesale marketplace through our strategy of
providing high quality and competitively priced services which
can be customized where necessary.

Our customers include fixed wire line and mobile
telecommunications operators and Internet service providers, or
ISPs, such as AOL, COLT, Worldcom, other cable operators, and
various information technology and facilities management
companies. A dedicated team addresses the needs of the UK mobile
operators, and we are a major supplier to Vodafone and Orange.
We have developed a successful business supplying core
interswitch network capacity to UK mobile operators and have
commercial relationships with the four incumbent mobile
operators.

We have been instrumental in developing a new
commercial and technical model for the supply of networks to the
mobile operators. These developments culminated in our being
awarded, in April 2000, a five-year £150 million
contract by Orange. A key element of the contract, by which
Orange outsources the maintenance and provisioning of that
network, is the extension of our existing core network. All five
third generation mobile operators in the UK will need to
implement network and services to support 3G services, and we
will work to define and co-ordinate our strategy for supporting
3G services.

A growing area of our wholesale business is
selling voice termination services to a wider mix of operators,
and using these relationships to reduce the cost-base for our
telephony traffic by:



| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | creating a self sustaining revenue stream,                                                                                     
|
| |  | establishing commercial relationships with
	wholesale customers thus enabling us to cross-sell and up-sell
	other products, and

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| |   |                                                                             
| | - | ----------------------------------------------------------------------------
| |  | generating revenue and cost reduction
	opportunities for other parts of NTL.

The growth in the number of international
operators building and operating submarine cable systems in
recent years has been substantial, with many of the cables
crossing the UK. We have considerably increased physical
connectivity to UK international cable landing stations and
developed products to address the needs of the international
cable operators for carrier services between the cable landing
sites and the major UK international nodes such as Telehouse,
London, which services are also known as backhaul
services.

Utilizing our ATM national network, we have
developed Frame Relay and ATM wholesale products to meet demand
for high-speed data connectivity. Additionally, our core data
network, local loop infrastructure and connectivity to the main
international nodes, will allow us to address the needs of
international operators for the termination of UK-bound and
origination of UK-generated data traffic.

In addition to wholesale telecommunications and
data services, we also offer wholesale Internet access solutions
including network services, call center operations and customer
provisioning and billing to UK ISPs and other corporate
customers that would like to expand their Internet presence.
This service was launched in 1995.

ntl:
broadcast

On April 2, 2002 we announced that we had
completed the previously announced sale of our Australian
broadcast business to Macquarie Bank for A$850 million
(US$448 million) in an all cash transaction. At that time,
the business bank debt outstanding, which was subsequently
extinguished, totaled A$227 million (US$118 million).

NTL Australia owned and operated the most
extensive terrestrial broadcast transmission network in
Australia with over 98% population coverage provided from 578
sites located across metropolitan, regional and rural areas. For
the year ended December 31, 2001, NTL Australias
revenues were approximately A$119 million
(US$62 million) generating EBITDA of approximately
A$52 million (US$27 million). NTLs Australian
operations also include a 51% share in a joint venture, NTLT,
with two Australian regional broadcasters (WIN Television and
Southern Cross Broadcasting) operating a carrier grade wholesale
microwave telecommunications network along the east coast of
Australia.

We own and operate wireless communication and
broadcast transmission infrastructure in the UK and, until the
completion of the sale on April 2, 2002, in Australia. We
provide our customers with enhanced products and services
through our broadcast network, state of the art equipment, and
innovative facilities management expertise. Our customer base
includes over 1,000 companies, including all of the leading UK
mobile wireless operators and all major commercial television
and radio broadcasters.

We have a proven history of developing new
products and services to meet the needs of our customers and
drive the growth of our business. These developments include the
implementation of Teletext, a text based data service
transmitted with the analog television signal, the
implementation of NICAM in the 1980s enabling the transmission
of digital stereo and Dolby audio over analog television
transmissions, and most recently the design and implementation
of the worlds first digital terrestrial television and
digital audio broadcasting networks and services for our UK and
Australian broadcast customers.

We provide products and services to three
distinct market areas:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Site Leasing and Services.We operate the second largest
	independent portfolio of wireless towers and sites available for
	lease in the UK and one of the largest towers and sites
	portfolios in Australia. In total, we operate over 2,900
	multi-user sites (approximately 2,370 of which were in the UK as
	of December 31, 2001), up from approximately 600 sites
	in May 1996. As of December 31, 2001, we leased space on
	our towers to over 4,200 lessees including all of the major
	wireless operators in the UK and also offer unique services such
	as In-Building a wireless connectivity that can
	enhance their wireless coverage in high-traffic areas such as
	shopping malls, office buildings and conference centers.
|
| |  | Broadcast Transmission and
	Services.We own and operate one of
	two television broadcasting infrastructure networks in the UK as
	well as the only national broadcasting infrastructure network in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | Australia. Additionally, we have national,
	regional, and local radio broadcast infrastructure networks in
	both the UK and Australia. We developed the first commercial
	digital terrestrial television service in 1998 and the first
	commercial digital radio station in 1999. Because, unlike
	broadcasters in the United States, we own and operate not only
	the towers but also the broadcast transmission infrastructure,
	our broadcast customers rely on our network and package of
	integrated turn-key services to distribute and broadcast their
	content.
|
| |  | Satellite and Media Services.We provide satellite and media
	services in the UK and value-added services such as playout,
	fixed and mobile satellite up-linking, and a wide range of
	occasional & outside broadcast services to generate
	incremental revenue. Our ability to offer a full range of
	services from content gathering, distribution & transmission
	is unique in the UK market.                                                                                                                                                                       

Our broadcast and wireless customers generally
hold long term licenses and enter into service agreements with
us that typically last 10 to 15 years.

Site
Leasing and Services.

We operate a UK wireless infrastructure network
of approximately 2,370 multi-user sites as of December 31,
2001. We own, lease or manage approximately 1,570 UK sites and
have access to approximately 800 undeveloped sites. Our primary
business is the leasing of antenna space on our sites to a
diverse range of wireless service providers, including providers
of mobile telephony, paging, specialized mobile radio, or SMR,
and wireless local loop services. We have also developed a range
of complementary services that utilizes our tower expertise,
including infrastructure services, site selection and
acquisition, design and construction, antenna installation,
network planning and management, and tower maintenance.

Our network in the UK is national in scope and
includes most of the major population centers and highways. Our
wireless customers currently include all of the UK mobile
telephony operators, including Vodafone AirTouch,
mmO2 (formerly known as BT Cellnet UK), Orange,
One2One and Hutchison 3G, all the major paging companies, and
many of the UKs largest wireless telephony carriers,
including BT, Cable & Wireless, and Thus plc. We also serve
several utility companies and emergency service organizations
including British Gas, London Ambulance and Her Majestys
Customs and Excise.

Second generation wireless services have been the
major driver of our growth to date, but the advent of third
generation wireless services is expected to drive further
revenue growth. During 2000, the UK government awarded five
national Universal Mobile Telecommunications System, or 3G,
licenses each for a duration of 20 years, commencing
January 2002. These licenses have been awarded to four existing
operators, all of whom are existing wireless customers of ours,
and to one new entrant. Under the terms of these licenses, each
operator will provide services to at least 80% of the UK
population by December 2007. Construction of these networks has
commenced in 2001 and is expected to generate significant
further demand for suitable existing & new sites over the
next few years. The increased demand for suitable sites is
driven by the greater bandwidth and different range
characteristics of 3G technology, inherently requiring a greater
number of sites than 2G technology.

The dramatic growth of wireless communications
necessitates good cellular coverage in all commercial areas,
leading to a requirement for reliable wireless communications
infrastructure inside buildings. We believe this creates a new
type of radio site which, unlike towers, will exist within
commercial buildings, transport hubs, shopping malls and other
large buildings. Our analysis shows that there are approximately
2,000 of these types of commercial properties in the UK. As at
December 31, 2001, we had built shared coverage systems in
26 large buildings including Bluewater, Britains
largest shopping complex and Canada Square, part of
Londons Canary Wharf complex.

Building on the technology we developed for
In-Building services, we are exploring with UK mobile operators
ways of using our fiber network to solve the distance, coverage
and power problems associated with 3G rollout in urban areas.
Although in an early stage of development, we believe that a
solution utilizing small low-profile antennas, positioned on
buildings and other street level infrastructure and connected
via our fiber

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network to remote base stations, could improve
coverage and service quality compared to more traditional
rooftop sites for 3G technology.


Broadcast
Transmission and Services

We have been involved in broadcast television
since the 1950s when we designed and built the television
transmission system for the UKs first independent
commercial television network. Through our national
infrastructure of owned and shared transmission sites and our
owned network of transmitters in the UK and Australia, we
provide broadcast signals for the three commercial national
television channels in the UK (ITV1, Channel 4,
Channel 5), the two publicly-owned national broadcasters in
Australia (ABC, SBS), a number of more recently established
commercial channels through the UK Digital Broadcast
multiplexes, and many of the UKs independent local,
regional and national radio broadcasters.

An attractive feature of our broadcast contracts
is our ownership of both towers and transmission equipment
responsible for generating the broadcast signal. As a result,
the contracts increasingly have become end to end solutions
including all technical and service aspects of providing the
transmission for the broadcaster. In essence, TV and radio
station owners are programmers and we are the broadcaster. We
have used this as an opportunity to develop strong relationships
with our customers, which in turn has helped us to better
understand their needs and customize new services for them.

Television broadcasting.We provide digital and analog
broadcast transmission services for national and regional
television broadcasters. The analog network provides coverage to
99.8% of the UK population, with approximately 3,500 broadcast
transmitters. Our extensive television broadcast customer base
includes all of the UK commercial terrestrial television
broadcast companies consisting of the ITV national network of 15
affiliated stations, the national services of Channel 4 and
Channel 5, as well as the regional service S4C in the UK. In
addition, we provide transmission and site services to both of
Australias publicly-owned national broadcasters, ABC and
SBS.

We provide digital terrestrial broadcast
transmission for two of the three commercial national digital
television services in the UK. These services carry up to 12
separate channels, including the ITV network, Channel 4, Channel
5 and a range of new digital channels and services such as pay
per view. As of December 2001, we were operating 80 digital
terrestrial television transmitting stations reaching
approximately 88% of the UK population.

Digital broadcast systems require a more complex
engineering design than their analog predecessors. We have
exploited this by extending our range of services to include
tower leasing and transmission services (as with analog) plus
end-to-end system integration and service ranging
from studio playout centers to terrestrial transmission. This
has the twin benefits of enlarging the total market available
from broadcasting and further differentiating us as a unique
provider able to offer towers, transmission and system
integration services for digital television.

Radio broadcasting.We are one of two major companies
providing transmission sites and services to the radio industry
in the UK. We offer a range of services to radio broadcasters
including: target service area planning; site location;
installation and commissioning; and equipment selection,
procurement, operation, monitoring and maintenance. We believe
that we are a supplier of transmission services to a substantial
portion of the addressable market. Our radio broadcast customer
base includes two of the three national commercial stations:
Classic FM and Talk Radio, over 200 metropolitan, regional and
local stations and the first all digital radio station, Digital
One, of which we are a founding equity partner with a 37% equity
interest. We have a contract for the transmission of Digital One
with a lifetime value in excess of $75 million. The UK
government has embarked on a program of licensing a number of
new regional and local digital radio multiplexes. As of
December 31, 2001 we have secured contracts to build
transmission and supporting network for 24 of the 27 licenses
awarded so far.

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Satellite
and media services

We own and operate satellite up-linking
facilities consisting of over 30 fixed satellite up-link dishes
able to access over 50 satellites with global coverage, a
network of mobile and transportable up-links, management and
control systems and all associated operations and maintenance.
We provide our satellite customers with program and content
distribution services for over 160 full-time channels via
satellite and fiber. In addition, we have facilities for playout
services, remote satellite news gathering, and full outside
broadcast. Through an alliance with Williams Vyvx, a Williams
Co. company, our customers also have access to 48 cities in the
United States.

We have expanded our service offerings over time
to meet the growing needs of our customer base as new
technologies create new broadcast markets. As a way to add
incremental revenue, we have begun to integrate backwards with
our existing customers by offering value added services. Such
service developments include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | establishment of playout services, which enable
	us to take ownership of the customers transmission needs
	from the point that it delivers the program or content and needs
	a channel to be created. We then are responsible for all the
	operational issues related to the broadcast of that content. We
	have a state of the art playout facility outside of London
	designed to meet the rising demand from broadcasters across
	Europe.
|
| |  | offering a range of occasional use broadcast
	services that allow media content providers to outsource their
	off-site broadcasting needs, whether it be for breaking news,
	sports events or music concerts, and still deliver the desired
	content to their customers via our mobile equipment.                                                                                                                                            

Our Satellite and Media customers include
programmers who own and operate packages of content or channels,
news agencies, sports broadcasters and production companies. Our
customer list includes such market leaders as AOL/ Time Warner
(CNN, Turner, Cartoon Network), BBC, Discovery Channel, QVC,
Reuters, the Associated Press and British Sky Broadcasting.

NTLs Businesses and Investments In
Continental Europe & The Republic Of Ireland

European
Businesses and Investments

Prior to 2001, we made several strategic
investments in leading European markets. In July 1999, we
acquired Cablelink in the Republic of Ireland, which then had
over 400,000 franchise homes in Dublin, Galway and Waterford. In
two steps during August 1999 and December 1999, we acquired the
1G Networks in France, our first acquisition in
Continental Europe, acquiring approximately 266,000 franchise
homes in the Greater Paris area. In March 2000, we completed the
purchase of the cable assets of the Cablecom Group,
Switzerlands largest cable company. Also in March 2000, we
acquired a 25% interest in Svenska Bredbandsbolaget A.B., or
B2, a company based in Sweden, which is deploying
fiber directly to the home in Scandinavia. Finally, in August
2000, we acquired a 50% interest in eKabel InvestCo, which owns
65% of eKabel L.P., the cable network in the Hessen
province of Germany.

In May 2001, we completed the purchase of a 27%
minority investment in Noos S.A., the market leading French
broadband company. We subsequently merged 1G Networks into
Noos in November 2001. In September 2001, we increased our
minority interest in B2 to 34%.

Our European strategy has three key components:



| |   |                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | continue upgrade of network infrastructure in
	Switzerland and France and begin upgrade in Germany for delivery
	of advanced broadband solutions to consumers and businesses,
|
| |  | replicate our success with bundled services in
	the UK in order to drive penetration of new products and
	maximize profitability per subscriber, and                         
|
| |  | realize the benefits of economies of scale
	through continued integration while maintaining a regional focus
	on customer operations.                                        

14



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##### 



We have a premier footprint across Europe,
including:



| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | Europes three largest financial
	centers  London, Paris and Frankfurt;
|
| |  | Europes wealthiest population 
	Switzerland; and                      
|
| |  | Europes most advanced broadband
	market  Sweden;                      

As of December 31, 2001 we had access to
20.3 million franchise homes across the UK, Ireland and
Continental Europe, and served approximately 7.1 million
customers (assuming 100% ownership of our minority interests).

Across Europe we continue to focus on capital
efficient upgrades of these cable networks for the delivery of
bundled high-speed Internet, digital cable television and
telephony services to the consumer market and advanced broadband
services to the business community.

In 2001, we benefitted from the significant
demand for broadband services. Significant progress in focused
network upgrades and a commitment to market to the most
attractive demographic areas first have been the focus for
achieving meaningful penetration and return on investment.
Evidence of the success of this strategy has been our broadband
penetration. By December 31, 2001, we achieved 20%
penetration of marketable homes in Switzerland, and 34% in
Sweden. We reinforced our position as a broadband leader in
Western Europe, with more than 229,000 broadband customers in
continental Europe (assuming 100% ownership of our minority
interests).

Switzerland

Cablecom
GMBH

In March 2000, we acquired the business and
assets of Cablecom GMBH, Switzerlands largest cable
operator. Cablecom is Switzerlands largest cable operator
with approximately 53% of the Swiss cable television market as
of December 31, 2001. As of December 31, 2001,
Cablecom delivered products and services to 1.4 million
subscribers in 100% ownership service areas, reflecting a
penetration rate of approximately 91%. Cablecom also delivers
signals via its national fiber backbone to other cable operators
who serve another 490,000 subscribers, including third party
wholesale and partial ownership of signal. Over 90% of
television broadcasting in Switzerland is delivered over cable
networks. As of December 31, 2001, Cablecom also had over
67,000 broadband Internet and 48,000 digital television
customers.

Cablecom also owns SwissOnline, one of the
largest Internet service providers in Switzerland with
approximately 161,000 dial-up customers as of December 31,
2001. Cablecom already has a telecommunications license to
provide voice, data and other value added services in
Switzerland, and expects to commercially launch its Voice over
Internet Protocol, or VoIP, telephony product in 2002.

Cablecom is the largest alternative fiber link
telecommunications operator in the Swiss telecommunications
market.

Cablecoms business extends beyond basic
television services. Our objective is for Cablecom to become the
premier provider of communications services for
Switzerlands residential and business markets.

During the third and fourth quarter of 2001, our
European management team took an active role in managing the
business in Switzerland. We reorganized Cablecoms
management and organizational structure to a customer focused
organization  marketing the product for the consumer
and realizing Cablecoms unique business to business
opportunity. In 2001, we integrated several business units and
legal entities, reducing the number of departments from 13 to 7,
thereby reducing multiple interfaces to the customer.

As part of the reorganization, in October 2001,
Rudolf Fischer joined the European management team as the new
Chief Operating Officer of Cablecom. We have also hired
Cablecoms first Chief Marketing Officer, and through
internal candidates, Cablecoms Chief Financial Officer and
Head of Consumer Services. As part of the effort to streamline
Cablecom and reduce costs, we also implemented a redundancy plan
in 2001, reducing headcount by 260 out of 1,960 full-time
equivalent employees.

15



---



##### 



Core elements of our strategy for Cablecom
include:



| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | introducing value added services, including high
	speed Internet, digital television, pay-TV, video- and
	audio-on-demand, and telephony,                                 
|
| |  | installing superior customer care operations in
	order to support growth in the number of direct customer
	relationships and the rollout of new products and services, and
|
| |  | increasing capacity in major cities and suburban
	areas and increase bi-directionality beyond the current
	one million homes.                                             

Cablecom currently operates in the following five
business areas:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fully Owned Cable Networks.Residential cable television is
	Cablecoms largest business and comprises 28 different
	cable networks of which six are wholly-owned by Cablecom. This
	accounts for approximately 90% of total managed subscribers. As
	of December 31, 2001, Cablecom had 53% market share in
	Switzerland and a penetration rate of over 90% of homes passed,
	82% of homes passed have been converted to digital and 53% of
	homes passed had bi-directional capability. Approximately 48,000
	digital television customers and 67,000 broadband Internet
	subscribers were connected at year-end. Approximately 82% of
	Cablecoms subscribers are in the German speaking region of
	Switzerland, 10% in the French speaking region and the remainder
	in the Italian speaking region.      
|
| |  | SwissOnline.SwissOnline, a wholly owned Cablecom
	subsidiary, is one of Switzerlands largest Internet
	service providers and one of the leading portals in the country.
	As of December 31, 2001, SwissOnline had approximately
	161,000 subscribers. As part of the Cablecom reorganization in
	2001, SwissOnline was integrated with Cablecoms high speed
	Internet product management and customer operations.                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Cablecom Business.Cablecom Business, formerly know as
	Carriers Solutions or National Telecoms, was launched in January
	1999 to offer advanced data services to the Swiss business
	segment. With one of two national fiber backbones, Cablecom
	Business provides voice and data services to the small, medium
	and multi-site national segments. Current products include
	leased lines, virtual private networks, connectivity, and
	carriers carrier services. Cablecom intends to intensify
	the roll-out of its national telecommunication and data services
	in 2002. Cablecom believes that it is well positioned to connect
	business customers within its service areas as it estimates that
	most business customers are within 50 to 100 meters of
	Cablecoms existing network infrastructure.
|
| |  | Rediffusion.Rediffusion, Cablecoms consumer
	electronics retail chain, sells consumer electronics products
	and accessories. It also has rental, maintenance and service and
	repair operations. Historically, Rediffusion has been run
	independently of Cablecoms cable operations. As part of
	the companys reorganization, Cablecom is currently
	integrating Rediffusion to leverage the retailers
	extensive national network to distribute Cablecoms
	broadband multi-service offering, including digital cable
	television, high-speed Internet and telephony services and to
	bundle those with Rediffusions products and services,
	including installation and maintenance.                                                                                                                  
|
| |  | Engineering.Cablecom Engineering AG, a wholly
	owned subsidiary of Cablecom, provides cable television
	engineering services to Cablecom and third parties. Cablecom
	Engineering AG is the leader in Swiss cable television
	engineering with a market share of 75%. Services include
	third-party cable television systems and network infrastructure
	planning and design, project management, and network measurement
	and maintenance. As part of the companys reorganization,
	Cablecom Engineering was integrated into the Cablecom network
	division in 2001.                                                                                                                                                                                                                                       

Network Upgrade.Cablecom is currently upgrading
its nationwide network, which consists of three interconnected
segments:



| |   |                                      
| | - | -------------------------------------
| |  | Fiber optic backbone                 
|
| |  | Hybrid-fiber coaxial or HFC network

16



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##### 





| |   |                       
| | - | ----------------------
| |  | In-house installations

Through our network upgrade program, over 82% of
homes passed were upgraded at the end of 2001. Moreover, as HFC
networks in each area are upgraded, Cablecom upgrades in-house
installations at the request of subscribers wishing to subscribe
to new services, including digital cable television, high-speed
Internet and telephony services.

Cable Television Services.In November 1999, Cablecom
launched digital services under the SwissFun brand name in
German-speaking regions. Using a purchased or leased
set-top-box, Cablecom subscribers can access an additional 30
digital channels for free, as part of their basic television
subscription offering. The subscribers can then subscribe to
over 20 additional channels in pay packages. Cablecom continued
the roll-out of its SwissFun digital television offering during
2001, concurrent with the upgrade of its regional networks.

In addition to increasing the number of channels
that can be broadcast, the introduction of digital broadcasting
allows Cablecom to address each set-top-box individually,
providing Cablecom with the necessary flexibility to bundle
expanded basic and pay channels into more attractive pay
packages. This customization of content and the potential to
differentiate substantially from the basic television offering
is expected to make pay television much more attractive than its
current form. In 2002, Cablecom plans to offer additional pay
packages and pay-per-view services over its network.

Internet Services.Cablecom will continue to roll out
high-speed Internet access services throughout its service areas
as its networks are upgraded to bi-directionality through 2004.
To maximize the return on capital expenditure, Cablecom is first
upgrading subscriber areas where demand is the highest. As of
December 31, 2001, Cablecom provided cable modem services
to 67,000 subscribers.

In its franchise areas, Cablecom offers both
residential customers and businesses Internet access services
connecting users to SwissOnlines portal via
Cablecoms network, and thus retain all usage related
revenues for dial-up services and all access revenues for all
types of subscription-based Internet services such as pay
dial-up and high-speed Internet services.

Telecommunication Services.Apart from Swisscom, Cablecom is
the only company with a nationwide footprint and a local loop
infrastructure. Cablecom expects to be able to provide broadband
local loop infrastructure access to nearly 50% of Swiss
households. Cablecoms local loop networks cover all major
Swiss cities, except Lausanne and Geneva, where Cablecom has a
12.2% stake in 022 Télégenève, a company
which provides such coverage.

In December 2001, lab testing and field trials of
the Cablecom VoIP telephony product proved successful. Cablecom
plans the commercial launch of its telephony product in mid-2002.

Ireland

In July 1999, we acquired Cablelink Ltd. in the
Republic of Ireland, which then had over 400,000 franchise homes
in Dublin, Galway and Waterford.

This company provides cable television services
in Dublin, Galway and Waterford to over 370,000 subscribers. As
of December 31, 2001, the company had an 83.4% penetration
rate over its broadband cable network, which passes over 440,000
homes. The company holds licenses to provide analog and digital
television services in its franchises for the next 12 years
with exclusive rights for the next two years. It also has a full
service license allowing it to provide public telephony,
Internet and other value-added services throughout Ireland.

Among our 2001 highlights, Cablelink:



| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | developed and successfully rolled out our digital
	television service in Dublin, Galway and Waterford;
|
| |  | met all of our regulatory milestones for the
	provision of digital television;                        

17



---



##### 





| |   |                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | integrated our residential and business to
	business divisions in Ireland to create a single operating
	entity  thus deriving extra operational efficiencies
	and synergies;
|
| |  | migrated 95% of our customer base onto a new
	customer relationship management system; and                                                                                   
|
| |  | made all systems fully Euro compliant for the
	introduction of the Euro.                                                                                                     

France

1G
Networks and Noos S.A.

We acquired France Telecoms 1G Networks in
two steps in August 1999 and December 1999. Pursuant to our
purchase agreement, we held exclusive licenses to provide analog
and digital television services over 1G Networks.
1G Networks has launched a pilot version of its digital
platform, increasing the number of channels available to
customers as well as providing high-speed Internet access.

On August 7, 2000, we announced that we had
signed an agreement in partnership with Morgan Stanley Dean
Witter Private Equity to purchase France Telecoms 49.9%
stake in Noos S.A. We closed the transaction in May 2001 and
acquired 27% of Noos for approximately $594 million in
liquidation preference of our preferred stock, based on an
enterprise value of Noos of Euro 2.7 billion
($2.45 billion). In November 2001, to capitalize on network
synergies and customer proximity, we merged our 1G operations in
France with Noos.

The combined Noos/ 1G is the market leading
French broadband company, offering analog and digital cable
television, high-speed Internet and telephony services to a
total of 939,000 customers as of December 31, 2001. As of
December 31, 2001, its network passed 2,811,000 homes and
businesses. As of December 31, 2001 there were an estimated
3,447,000 homes and businesses in Nooss and 1Gs
combined franchise areas. Noos currently provides high-speed
Internet access to over 92,000 homes and businesses in France.

Noos operates a fully digital hybrid fiber
coaxial network comprising over 16,000 km of coaxial and
approximately 4,000 km of fiber cable. This network
provides Noos with a unique platform to implement a broadband
strategy in France. In addition, Noos has secured long term
access rights to underground ducts for future network upgrade.

Our investment in Noos provides us access to
metropolitan Paris and Strasbourg and other major cities in
France. Noos offers significant efficiencies with our core
business of bundled digital cable television, high speed
Internet and telephony services.

Germany



| |                                                
| | -----------------------------------------------
| | iesy Hessen GmbH (formerly eKabel Hessen
	GmbH)

In August 2000, we completed a 50% investment in
eKabel Investco, which owns 65% of iesy Holdings GmbH, the
Hessen cable network in Germany. iesy Hessen GmbH owns and
operates the largest cable television network in the German
province of Hessen, which includes Frankfurt, the second largest
financial center in Europe. iesy currently broadcasts up to 33
analog channels, 13 digital channels and 36 radio channels.

There are approximately 2.8 million homes in
Hessen, of which 66% or 1.8 million homes were passed by
iesys network as of December 31, 2001. Of the
1.8 million homes passed, 72%, or 1.3 million homes,
are connected to iesys network. For the year ended
December 31, 2001, iesy Hessen GmbH generated a total
revenue of Euro 115.8 million. iesy has a historical annual
churn rate of less than 6%, which compares favorably to other
European and U.S. cable providers. This loyalty of its customer
base provides a solid platform on which to offer iesy branded
products, such as iesynet and iesyphone.

In October 2001, iesy successfully completed
network upgrade technology trials. iesy is currently upgrading
its network and expects to upgrade 300,000 homes in 2002. The
network upgrade plan will focus first on areas which offer
attractive demographics for return on iesys investment.
This upgraded network will

18



---



##### 



allow iesy to offer a wider array of broadband
products and services, including the triple-play of
digital cable television, high-speed Internet and telephony
services.


iesys high speed Internet product, iesynet,
has seen high demand in a pilot program in Frankfurt. Commercial
launch of iesynet is targeted for mid-2002. Also in 2001, iesy
was granted a class 4 voice telephony telecommunications
license, and expects to offer VoIP telephony over its network in
2003.

Sweden

Bredbandsbolaget
(B2)

As a result of a series of transactions from
March 2000 through September 2001, we have acquired a 34%
interest in B2. B2 is a rapidly growing broadband communications
company providing 10 Mb/s network access and broadband
services to residential and small-to-medium business customers.
In 2001, B2 concentrated its efforts on rapidly growing the
business in Sweden by stopping its expansion efforts in Norway
and Denmark. During 2001, B2 reduced the number of its permanent
and temporary employees from approximately 600 to 210 people,
and grew its subscriber base from 18,700 to over 69,700
customers. In September 2001, B2 raised SEK 2.4 Billion
($224 million) in a private placement.

B2 provides always on, low-cost
access to a high-capacity broadband network that provides
transmission, both to and from the customer, at the same speed
and at the same time. B2s 10 Mb/s network access
speed is substantially faster than typical connections offered
by existing cable television and telecommunications operators
and is upgradeable to 100 Mb/s without significant expense.
In addition to broadband access, B2 intends to provide telephony
and video access to its customers through a personalized,
interactive interface. Similar to Cablecom and iesy, B2 has
already successfully tested its VoIP telephony product.

19



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##### 



The following table illustrates our holdings in
Western Europe, including that in the UK:

Western Europe Customer Statistics as of
December 31, 2001

|                                 |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |       |       |  |         |         |         |  |       |      |   |  |          |         |         |  |          |         |         | 
|-------------------------------- | ---------------------------- | -------------------------------- | -------- | --------- | ------- | -------- | ----- | -------- | ----- | --------- | ------- | -------- | ------- | ------ | ------- | ----- | ----- |  | ------- | ------- | ------- |  | ----- | ---- | - |  | -------- | ------- | ------- |  | -------- | ------- | ------- | 
|                                 |                              | NTL                              |          | NTL       |         | Cablecom |       | Noos     |       | eKabel    |         | B2       |         |        |         |      
|                                 |                              | (UK)                             |          | (Ireland) |         | (Swiss)  |       | (France) |       | (Germany) |         | (Sweden) |         | Equity |         | Gross
|                                 |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |      
|                                 |                              |                                 
|                                 |                              | (subscriber totals in thousands)
|RESIDENTIAL                      |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |       |       |  |         |         |         |  |       |      |   |  |          |         |         |  |          |        
|Ownership Interest               |                              |                                  | 100      | %         |         |          | 100   | %        |       |           | 100     | %(1)     |         |        | 27.0    | %     |       |  | 32.5    | %       |         |  | 34.0  | %    |   |  |          |         |         |  |          |        
|Homes in Franchise               |                              |                                  | 11,411.2 |           |         |          | 443.8 |          |       |           | 1,902.7 |          |         |        | 3,447.0 |       |       |  | 2,800.0 |         |         |  | 299.0 |      |   |  | 15,513.4 |         |         |  | 20,303.7 |        
|Homes passed                     |                              |                                  | 8,404.1  |           |         |          | 443.8 |          |       |           | 1,902.7 |          |         |        | 2,811.5 |       |       |  | 1,828.0 |         |         |  | 217.0 |      |   |  | 11,990.9 |         |         |  | 15,607.1 |        
|Homes marketed (Telco)           |                              |                                  | 7,506.4  |           |         |          | 20.0  |          |       |           |        |          |         |        | 10.0    |       |       |  |        |         |         |  |      |      |   |  | 7,529.1  |         |         |  | 7,536.4  |        
|Homes marketed (CATV)            |                              |                                  | 7,729.8  |           |         |          | 443.2 |          |       |           | 1,734.8 |          |         |        | 2,758.4 |       |       |  | 1,828.0 |         |         |  | 205.1 |      |   |  | 11,155.0 |         |         |  | 14,699.3 |        
|Customers                        |                              |                                  | 2,840.0  |           |         |          | 369.8 |          |       |           | 1,583.0 |          |         |        | 939.6   |       |       |  | 1,299.7 |         |         |  | 69.7  |      |   |  | 5,339.5  |         |         |  | 7,101.8  |        
|                                 | Dual/ Triple RGU             |                                  |          | 2,038.2   |         |          |       | 5.3      |       |           |         | 67.3     |         |        |         | 76.0  |       |  |         |        |         |  |       |     |   |  |          | 2,130.7 |         |  |          | 2,186.8 |        
|                                 | Single RGU                   |                                  |          | 801.8     |         |          |       | 364.5    |       |           |         | 1,515.7  |         |        |         | 863.6 |       |  |         | 1,299.7 |         |  |       | 69.7 |   |  |          | 3,208.8 |         |  |          | 4,915.0 |        
|Cable Television (CATV)          |                              |                                  | 2,261.9  |           |         |          | 369.8 |          |       |           | 1,583.0 |          |         |        | 920.7   |       |       |  | 1,299.7 |         |         |  |      |      |   |  | 4,732.7  |         |         |  | 6,435.1  |        
|                                 |                              | Digital                          |          |           | 1,253.5 |          |       |          | 7.7   |           |         |          | 48.4    |        |         |       | 323.9 |  |         |         |        |  |       |      |  |  |          |         | 1,394.6 |  |          |         | 1,633.5 | 
|                                 |                              | Analog                           |          |           | 1,008.4 |          |       |          | 340.6 |           |         |          | 1,534.6 |        |         |       | 238.5 |  |         |         | 1,299.7 |  |       |      |  |  |          |         | 3,219.9 |  |          |         | 4,421.8 | 
|                                 |                              | Antenna                          |          |           |        |          |       |          | 21.5  |           |         |          |        |        |         |       | 358.3 |  |         |         |        |  |       |      |  |  |          |         | 118.2   |  |          |         | 379.8   | 
|Telephone                        |                              |                                  | 2,589.3  |           |         |          | 5.3   |          |       |           |        |          |         |        | 2.2     |       |       |  |        |         |         |  |      |      |   |  | 2,595.2  |         |         |  | 2,596.8  |        
|Internet (INT)                   |                              |                                  | 845.0    |           |         |          | 1.5   |          |       |           | 228.3   |          |         |        | 92.5    |       |       |  |        |         |         |  | 69.7  |      |   |  | 1,122.9  |         |         |  | 1,237.0  |        
|                                 | Dial-Up (ntlworld and other) |                                  |          | 698.4     |         |          |       | 1.4      |       |           |         | 161.0    |         |        |         |      |       |  |         |        |         |  |       |     |   |  |          | 860.8   |         |  |          | 860.8   |        
|                                 | Digital TV Access            |                                  |          | 28.5      |         |          |       |         |       |           |         |         |         |        |         |      |       |  |         |        |         |  |       |     |   |  |          | 28.5    |         |  |          | 28.5    |        
|                                 | Broadband (BB)               |                                  |          | 118.1     |         |          |       | 0.1      |       |           |         | 67.3     |         |        |         | 92.5  |       |  |         |        |         |  |       | 69.7 |   |  |          | 233.6   |         |  |          | 347.7   |        
|RGUs (CATV, Telco, BB)           |                              |                                  | 4,969.3  |           |         |          | 375.2 |          |       |           | 1,650.3 |          |         |        | 1,015.4 |       |       |  | 1,299.7 |         |         |  | 69.7  |      |   |  | 7,561.5  |         |         |  | 9,379.6  |        
|Service Units (CATV, Telco, Int) |                              |                                  | 5,696.2  |           |         |          | 376.6 |          |       |           | 1,811.3 |          |         |        | 1,015.4 |       |       |  | 1,299.7 |         |         |  | 69.7  |      |   |  | 8,450.8  |         |         |  | 10,268.9 |        
|RGUs/ Customer                   |                              |                                  | 1.75     | x         |         |          | 1.01  | x        |       |           | 1.04    | x        |         |        | 1.08    | x     |       |  | 1.00    | x       |         |  | 1.00  | x    |   |  | 1.42     | x       |         |  | 1.32     | x      
|Service Units/ Customer          |                              |                                  | 2.01     | x         |         |          | 1.02  | x        |       |           | 1.14    | x        |         |        | 1.08    | x     |       |  | 1.00    | x       |         |  | 1.00  | x    |   |  | 1.58     | x       |         |  | 1.45     | x      
|Penetration:                     |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |       |       |  |         |         |         |  |       |      |   |  |          |         |         |  |          |        
|                                 | CATV                         |                                  |          | 29.3      | %       |          |       | 83.4     | %     |           |         | 91.2     | %       |        |         | 33.4  | %     |  |         | 71.1    | %       |  |       | 0.0  | % |  |          | 42.4    | %       |  |          | 43.8    | %      
|                                 | Telephone                    |                                  |          | 34.5      | %       |          |       | 26.5     | %     |           |         |         |         |        |         | 22.0  | %     |  |         |        |         |  |       |     |   |  |          | 34.5    | %       |  |          | 34.5    | %      
|                                 | Customer                     |                                  |          | 36.7      | %       |          |       | 83.4     | %     |           |         | 91.2     | %       |        |         | 34.1  | %     |  |         | 71.1    | %       |  |       | 34.0 | % |  |          | 47.9    | %       |  |          | 48.3    | %      
|                                 | RGU                          |                                  |          | 64.3      | %       |          |       | 84.7     | %     |           |         | 95.1     | %       |        |         | 36.8  | %     |  |         | 71.1    | %       |  |       | 34.0 | % |  |          | 67.8    | %       |  |          | 63.8    | %      
|                                 | Service Unit                 |                                  |          | 73.7      | %       |          |       | 85.0     | %     |           |         | 104.4    | %       |        |         | 36.8  | %     |  |         | 71.1    | %       |  |       | 34.0 | % |  |          | 75.8    | %       |  |          | 69.9    | %      
|                                 | Dual / Triple                |                                  |          | 71.8      | %       |          |       | 1.4      | %     |           |         | 4.3      | %       |        |         | 8.1   | %     |  |         | 0.0     | %       |  |       | 0.0  | % |  |          | 39.9    | %       |  |          | 30.8    | %      
|Quarterly Growth:                |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |       |       |  |         |         |         |  |       |      |   |  |          |         |         |  |          |        
|                                 | Customers                    |                                  |          | (41.8     | )       |          |       | (4.8     | )     |           |         | 2.9      |         |        |         | 44.6  |       |  |         | 5.7     |         |  |       | 19.2 |   |  |          | (24.5   | )       |  |          | 25.8    |        
|                                 | RGUs                         |                                  |          | (51.5     | )       |          |       | (5.8     | )     |           |         | 15.4     |         |        |         | 51.7  |       |  |         | 5.7     |         |  |       | 19.2 |   |  |          | (20.5   | )       |  |          | 34.7    |        
|Off-Net Telephony                |                              |                                  | 118.3    |           |         |          | 2.8   |          |       |           |        |          |         |        |        |       |       |  |        |         |         |  |      |      |   |  | 121.1    |         |         |  | 121.1    |        
|                                 | Telephone                    |                                  |          | 29.1      |         |          |       |         |       |           |         |         |         |        |         |      |       |  |         |        |         |  |       |     |   |  |          | 29.1    |         |  |          | 29.1    |        
|                                 | Telephone and Internet       |                                  |          | 89.2      |         |          |       | 2.8      |       |           |         |         |         |        |         |      |       |  |         |        |         |  |       |     |   |  |          | 92.0    |         |  |          | 92.0    |        
|BUSINESS DIVISION                |                              |                                  |          |           |         |          |       |          |       |           |         |          |         |        |         |       |       |  |         |         |         |  |       |      |   |  |          |         |         |  |          |        
|Business Customers               |                              |                                  | 76.2     |           |         |          | 0.2   |          |       |           | 4.3     |          |         |        | 35.6    |       |       |  |        |         |         |  |      |      |   |  | 90.3     |         |         |  | 116.3    |        
|Business Lines                   |                              |                                  | 389.7    |           |         |          | 1.9   |          |       |           |        |          |         |        |        |       |       |  |        |         |         |  |      |      |   |  | 391.6    |         |         |  | 391.6    |        
|Wholesale Internet Subscribers   |                              |                                  | 1,210.7  |           |         |          | 0.2   |          |       |           |        |          |         |        |        |       |       |  |        |         |         |  |      |      |   |  | 1,210.9  |         |         |  | 1,210.9  |        
|TOTAL CUSTOMERS                  |                              |                                  | 4,245.2  |           |         |          | 373.0 |          |       |           | 1,587.3 |          |         |        | 975.2   |       |       |  | 1,299.7 |         |         |  | 69.7  |      |   |  | 6,761.8  |         |         |  | 8,550.1  |        
|TOTAL SERVICE UNITS              |                              |                                  | 7,504.1  |           |         |          | 384.3 |          |       |           | 1,811.3 |          |         |        | 1,015.4 |       |       |  | 1,299.7 |         |         |  | 69.7  |      |   |  | 10,266.4 |         |         |  | 12,084.5 |        



---



|    |                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Cablecom has equity interests in 28 cable systems
	in Switzerland. The following statistics reflect the
	proportional operating data in which Cablecom does not maintain
	an equity interest: 186,700 homes passed, 161,400 homes
	marketed, 153,100 subscribers, 600 broadband Internet
	subscribers and 153,600 RGUs.

20



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##### 



Competition

We face significant competition from established
and new competitors in the areas of residential telephony,
business telecommunications services, Internet and cable
television.

Consumer
Services

We compete primarily with BT in providing
telephone services to residential customers in the UK. BT
occupies an established market position and manages fully built
networks and has resources substantially greater than ours.
According to the Office of Telecommunications, or OFTEL, in
September 2001, BT serviced 81.29% of UK residential telephone
exchange line customers. Our growth in telecommunications
services, therefore, depends upon our ability to convince
BTs customers to switch to our telecommunications
services. We believe that value for money is currently one of
the most important factors influencing the decision of UK
customers to switch from BT to a competing telecommunications
service. BT has, however, introduced price reductions in some
categories of calls and, due to regulatory price controls, BT
will be making further reductions in its telecommunications
prices. Accordingly, although we intend to remain competitive,
in the future we may be unable to offer residential telephone
services at rates lower than those offered by BT. In this case,
we may not achieve desired penetration rates and may experience
a decline in total revenues. There can be no assurance that any
such decline in revenues or penetration rates will not adversely
affect us. In addition to BT, other telecommunications
competitors could prevent us from increasing our share of the
residential telecommunications market. In particular, carrier
pre-selection for all calls (except for some special categories)
was launched in 2001 which may increase the appeal of indirect
access operators, whose discounted call charges may undercut us.

We also compete with mobile networks. This
technology may grow to become a competitive threat to our
networks, particularly if call charges are reduced further on
the mobile networks. Our tower services group may enable us to
benefit from the growth in this technology. There can be no
assurance, however, that we will be able to compete successfully
with such telecommunications operators.

We believe that we have a competitive advantage
in the residential market because we offer integrated telephone,
cable television, telecommunications services (including
Internet, interactive and on-line services) and multi-product
packages designed to encourage customers to subscribe to
multiple services. However, there can be no assurance that this
competitive advantage will continue. Indeed, BT and all other
operators have been permitted to provide and convey cable
television services throughout the UK from January 1, 2001,
and exclusive franchises will no longer be awarded.

British Sky Broadcasting Limited, or BSkyB,
currently markets telecommunications services on an indirect
access basis, which requires the customer to dial additional
digits before entering the primary telephone number, thus
diverting calls onto another operators network.

Our cable television systems compete with direct
reception over-the-air terrestrial broadcast television, DTH
satellite services (i.e., BSkyB) and satellite master antenna
systems. In addition, pay television and pay-per-view services
offered by us compete to varying degrees with other
communications and entertainment media, including home video,
cinema exhibition of feature films, live theater and newly
emerging multimedia services. We expect that, in the future, we
may face competition from programming provided by
video-on-demand services.

Business
Telecommunications

BT and Cable & Wireless are our
principal competitors in providing business telecommunications
services. In the future, we may compete with additional entrants
to the business telecommunications market. Competition is based
on price, range and quality of services, and we expect price
competition to intensify if existing and other new market
entrants compete aggressively. Most of these competitors have
substantial resources and there can be no assurance that these
or other competitors will not expand their businesses in our

21



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##### 



existing markets or that we will be able to
continue to compete successfully with such competitors in the
business telecommunications market.


Broadcast
Transmission and Tower Services

Crown Castle UK Ltd, a subsidiary of Crown Castle
International Corp., is NTLs primary competition in the
terrestrial broadcast transmission market in the UK. Crown
provides analog transmission services to the BBC and digital
transmission services to both the BBC and ITVDigital. Crown has
diversified from its core television broadcasting business using
its transmission infrastructure to enter into the radio
transmission and telecommunications sectors.

Although Crown is our direct competitor, we each
have reciprocal rights to use each others sites for
broadcast transmission usage in order to enable each of us to
achieve the necessary country-wide coverage. This relationship
is formalized by the site-sharing agreement entered into in 1991
when those towers were privatized.

Crown also offers site rental on a significant
number of its sites (some of which are managed on behalf of
third parties). Like us, Crown offers a full range of
site-related services to its customers, including installation
and maintenance. In November 2000, Crown entered into an
agreement with BT to deliver roof space and grounds at an
initial 4,000 BT exchange sites around the UK. We believe our
towers to be at least as well situated as Crowns and that
we will be able to continue expanding our own third-party
site-sharing penetration.

All four UK mobile operators own site
infrastructure and lease space to other users. Their openness to
sharing with direct competitors varies by operator. BT Cellnet
(now called mm02) and Vodafone have agreed to cut
site costs by jointly developing and acquiring sites in the
Scottish Highlands. BT and Cable & Wireless are both
major site-sharing customers but also compete by leasing their
own sites to third parties. BTs position in the market is
even larger when considered in combination with its interest in
mm02.

Several other companies compete in the market for
site rental. These include British Gas, Racal Network Systems,
Aerial Sites Plc, Relcom Aerial Services and the Royal
Automobile Club. Some companies own sites initially developed
for their own networks, while others are developing sites
specifically to exploit this market.

Regulation

Telecommunications service industries in the UK
are governed by legislation under the Telecommunications Act
1984, the Broadcasting Act 1990, and the Broadcasting Act 1996.
The operator of a full-service telecommunications system in the
UK requires the following two principal non-exclusive licenses:



| |   |                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a telecommunications license, granted under the
	Telecommunications Act by the Secretary of State and supervised
	by the Department of Trade and Industry, or DTI, and OFTEL,
	which authorizes the installation and operation of the
	telecommunications network used to provide cable television and
	cable telephone services; and
|
| |  | a cable television license granted under the
	Broadcasting Act and supervised by the Secretary of State and
	the Independent Television Commission, or ITC, which authorizes
	the provision of broadcasting services.                                                                                                                

Each type of license described above contains
various conditions, and in the event of the breach of such
conditions, the Director General of Telecommunications (the head
of OFTEL) or the ITC, as appropriate, could issue an enforcement
order and ultimately commence proceedings to require compliance
or to revoke such licenses.

Price
Regulation

BT is currently subject to controls over the
prices it may charge customers. In particular, BT may not
increase charges for certain services by more than the amount of
the percentage change in the retail price

22



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##### 



index. In Autumn 1999, OFTEL began the process of
examining what price controls, if any, should apply to BT after
2001. In February 2001, OFTEL announced that current retail
price controls would be extended until July 2002 with a roll
over provision for a further year. In January 2002, OFTEL issued
a new consultation setting out proposals for the progressive
removal of price controls along with certain new measures to
stimulate further retail competition.


NTL is not subject to the same scrutiny and
control by OFTEL of its retail telephone prices as BT, given its
non-dominant status in the market. However, NTL is subject to
prohibitions on undue preference and undue discrimination in its
cable television pricing. NTL is also required to publish its
standard prices, terms and conditions for cable television
services.

Number
Portability

The European Union agreed in 1998 to a revision
to the Interconnection Directive that made it a requirement for
Member States to mandate number portability. Implementing
regulations came into force on January 19, 2000 requiring
that number portability should be provided on request to all
customers switching between different operators and providers of
fixed telecommunications services. NTL has a process in place to
comply with its existing obligations and it is now in the
process of negotiating more service establishment arrangements
with other operators.

Local Loop
Unbundling

In November 1999, an OFTEL policy statement
mandated the unbundling of BTs local loop to rival
providers, enabling them to offer a range of higher bandwidth
services using Digital Subscriber Line (DSL) technology. On
August 8, 2000, conditions in BTs license were
brought into force setting out the requirements under which BT
must provide services necessary for local loop unbundling. OFTEL
published the wholesale prices for BTs unbundled local
loops on December 2000 and prices for shared access were
published in 2001 although discussions continue as to the
appropriate wholesale charges. In addition, BT is currently
rolling out ADSL over its own network. ADSL will allow consumers
access to high speed information services. In practice, few
companies have taken up the LLU option.

In February 2002, BT announced reductions in its
wholesale charges to ISPs (including its own tied ISP) for
wholesale ADSL services. These reductions will lead to
commensurate reductions in retail rates.

Interconnection

NTL Group Ltd. and National Transcommunications
Limited have Annex II status giving them rights of
interconnection at wholesale rates to other operators with
similar status.

Open Access
to Cable Infrastructure

In April 2000, OFTEL issued a public consultation
document on regulated access to cable infrastructure (open
access). The preliminary conclusion reached by OFTEL was
that no case existed for mandating open access to cable
infrastructure at that time.

BSkyB

In December 2000, the Office of Fair
Trading (OFT) announced that it was commencing an
investigation under the UK Competition Act into BSkyBs
activities, in particular the wholesale prices offered to rival
distributors of pay television services. This investigation is
ongoing. In December 2001, the OFT announced its preliminary
finding that BSkyB had been abusing its market power through its
pricing practices. The OFT also said that it was aiming to
complete the investigation into BSkyBs pricing by summer
2002.

In addition, in February 2002, the OFT announced
that it had decided not to give a decision on whether an
agreement entered into by us with BSkyB for the carriage of
programming at discounted rates, notice of which was given to
the OFT in October 2000, was anti-competitive. The OFTs
investigation into BSkyBs behavior continues.

23



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##### 



Competition
Act 1998

The Competition Act, which came into force in
March 2000, introduced a prohibition on the abuse of a dominant
position and on anti-competitive agreements and introduced third
party rights, stronger investigative powers, interim measures
and effective enforcement powers (including fines of up to 10%
of UK turnover). The Competition Act enables third parties to
bring enforcement actions directly against telecommunications
operators who are in breach of the prohibitions and seek
damages, rather than have to wait for the Director General of
Telecommunications to make an enforcement order.

In February 2000, OFTEL issued specific guidance
on the application of the Competition Act in the
telecommunications sector. This guidance states that OFTEL would
follow closely the general principles of competition law in its
application of the new prohibitions. In addition, the regulators
must not reach decisions which are inconsistent with EC law.

Mobile Phone
Termination Charges

On December 12, 2001, OFTEL announced that
it had referred to the Competition Commission its proposal to
impose a cap on the amount mobile phone operators can charge for
receiving calls on their networks. OFTELs conclusion was
that mobile termination rates were substantially in excess of
cost and that there was little incentive for operators to reduce
the charges. Accordingly, OFTEL has proposed a charge cap on
future termination rates of RPI (12)% over four years.

The Competition Commission has six months to
reach a decision, which can be extended for a further six months.

Broadcast
Services

A portion of our total revenue is attributable to
the provision of television and radio transmission and
distribution services. In the UK, the provision of such services
is governed by the Telecommunications Act 1984 and the Wireless
Telegraphy Act 1949.

Telecommunications
Act and Broadcasting Act Licenses

NTLs licenses contain conditions and
provisions which, among other things:



| |   |                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | require us to publish our charges and terms and
	conditions of business and not to show undue preference to or
	exercise undue discrimination against particular persons in the
	provision of certain telecommunications services;
|
| |  | impose on us an obligation to share our
	transmission sites with other transmission operators;                                                                                                                                    
|
| |  | restrict the prices which we are allowed to
	charge for the provision of some services;                                                                                                                                           
|
| |  | prohibit us from cross-subsidizing the
	unregulated side of our business; and                                                                                                                                                     
|
| |  | impose a requirement for separate accounts to be
	produced in relation to both the regulated and unregulated parts
	of our business. However, we are not obliged to do anything
	not reasonably practicable.                    

Price Cap
Review

Our regulated business may be divided into two
categories: Price Regulated Business and Applicable Rate
Business. Price Regulated Business comprises those
telecommunication services which we are obliged to provide
pursuant to our Transmission License and in respect of which
price controls are imposed. Our Applicable Rate Business
comprises those telecommunications services which we are obliged
to provide but which do not fall within the definition of Price
Regulated Business. Charges for Applicable Rate Business are
agreed between us and the relevant customer. If despite all
reasonable efforts an agreement cannot be reached between us and
a significant proportion of our customers in respect of any
particular telecommunications service, the charge will be
determined by the Director General.

24



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##### 



In respect of any services provided by us which
are not Price Regulated Business or Applicable Rate Business,
our prices are wholly unregulated, except for the overriding
duty not to engage in any pricing policy which constitutes undue
preference or undue discrimination against any person or class
of persons in respect of telecommunications services. Our
unregulated income would include, for example, charges for site
rentals to PCN operators.

Our Price Regulated Business consists of the
television transmission service provided to the ITV
(Channel 3) companies and Channel 4/S4C including the
operation and maintenance of transmission equipment and the
provision to third party transmission operators of the
accommodation, masts and antennae necessary for the operation of
broadcast transmission services.

On December 24, 1996, the Director General
of Telecommunications issued the formal modification to our
Telecommunications Act Licenses to effect the price controls
which are to apply to us for the period from January 1,
1997 to December 31, 2002. The Price Cap Review had two
purposes: (1) to establish a new P0 (allowable
revenues for the first year of the next control period, 1997, in
respect of our Maximum Price Regulated Business) and (2) to
establish a new X (the percentage by which such
revenues must, after allowing for consumer price inflation, be
reduced each year thereafter). The Director Generals
review concluded that, on assumptions at the time (1996), the
new P0 was (UK Pound) 53.4 million and the new X was 4.0%.



| |                           
| | --------------------------
| | European Union Legislation

Our business is further regulated by the EU under
various European Commission Directives. In February 2002, the
European Union Commission adopted a package of legislative
measures which set out a new framework for electronic
communication and ensures that the legislation is more
technology neutral. The proposed new framework consists of five
harmonization Directives, including a framework Directive and
four specific Directives on authorization, access and
interconnection, universal service and users rights, and
data protection in telecommunications services, a Regulation on
unbundling the local loop, a draft liberalization Directive and
a decision on Community radio spectrum policy.



| |                    
| | -------------------
| | Communications Bill

A White Paper issued in December 2000 
A New Future for Communications  proposed the
creation of a new body OFCOM to regulate the
communications industry. This will merge the functions of, among
others, OFTEL, the Radiocommunications Agency and ITC and it is
intended that it will provide a more flexible framework for
regulating a converging industry.

Our operations in Switzerland as well as the
operations of companies in which we hold a minority interest in
France, Germany and Sweden are also subject to regulation by the
governments of the countries in which they operate.

Research And Development

Our research and development activities involve
the analysis of technological developments affecting our cable
television, telephone and telecommunications business, the
evaluation of existing services and sales and marketing
techniques and the development of new services and techniques.

Patents, Copyrights And Licenses

We do not have any material patents or copyrights
nor do we believe that patents play a material role in our
business. We are substantially dependent on the licenses and
franchises granted by the legislative agencies which regulate
our respective businesses. The loss of any one or more of our
licenses or franchises could have a material adverse effect on
our business and financial condition.

25



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##### 



Customers

Except for our broadcast services business, no
material part of our business is dependent upon a single
customer or a few customers, the loss of any one or more of
which would have a materially adverse effect on us. The
broadcast services business is, however, substantially dependent
on the revenues it receives pursuant to its contracts with the
ITV companies, Channel 4/S4C, Channel 5 in the UK, ABC
and SBS in Australia, the loss of one or more of which may have
a material adverse effect on the broadcast services business.

Employees

At December 31, 2001, we had approximately
19,200 employees, approximately 16,900 of whom are permanent and
approximately 2,300 of whom are temporary or contract employees.
We believe that our relationship with our employees is good.



|        |            
|------- | -----------
|Item 2. | Properties.

UK and Ireland

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

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

Switzerland

In Switzerland, we own or lease 51 offices,
our corporate head-offices in Zurich, and 43 retail shops.
In addition, we own or lease approximately 450 network
sites together with warehouses and other non-operational
properties, as well as various cable television, telephone and
telecommunications equipment housed on public and private sites.

Other

We maintain offices under lease for our corporate
staff in New York City, as well as offices for our ntl:
broadcast staff based in the Far East. We believe that our
facilities are presently adequate for their current use.



|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

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



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

There were no matters that were submitted to a
vote of NTL stockholders during the quarter ended
December 31, 2001.

26



---



##### 



PART II



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

On March 28, 2002, the New York Stock
Exchange announced that it was suspending our common stock from
trading on the NYSE and that it intended to apply to the SEC to
delist our common stock following this suspension. This
determination was based upon, among other things, the selling
price for our common stock, which closed at $0.20 on
March 26, 2002. The continued listing standards of the NYSE
require maintenance of a minimum share price of $1 over a
30 trading day period and average global market
capitalization of $100 million over a 30 trading day
period. Our common stock fell below both of these continued
listing standards. We have a right to a review of the NYSE
staffs decision in a hearing before a Committee of the
Board of Directors of the NYSE. We are pursuing that right but
there can be no assurance that we will be successful. Our common
stock is currently quoted on the Over the Counter Bulletin Board
under the symbol NTLD and continues to trade on
NASDAQ EUROPE under the symbol NTLI.

On October 27, 2000, our common stock began
trading on the New York Stock Exchange under the symbol
NLI. Concurrently with the NYSE listing, we withdrew
our listing on the Nasdaq Stock Markets National Market
where our common stock had been trading under the symbol
NTLI. The following table sets forth, for the
periods indicated, the high and low last sale prices as reported
on the Nasdaq Stock Markets National Market until
October 26, 2000 and on the NYSE until March 26, 2002.
The information set forth below gives retroactive effect to the
5-for-4 stock split in February 2000.

|     |                                        |                 |   |        |  |  |   |       | 
|---- | -------------------------------------- | --------------- | - | ------ |  |  | - | ----- | 
|     |                                        |                
|     |                                        | Last Sale Price
|     |                                        |                
|     |                                        | High            |   | Low   
|     |                                        |                 |   |       
|2000 |                                        |                 |   |        |  |  |   |      
|     | First Quarter                          |                 | $ | 109.10 |  |  | $ | 82.00 | 
|     | Second Quarter                         |                 |   | 91.50  |  |  |   | 53.00 | 
|     | Third Quarter                          |                 |   | 59.88  |  |  |   | 39.19 | 
|     | Fourth Quarter                         |                 |   | 49.25  |  |  |   | 21.81 | 
|    
|2001 |                                        |                 |   |        |  |  |   |      
|     | First Quarter                          |                 |   | 39.20  |  |  |   | 22.75 | 
|     | Second Quarter                         |                 |   | 32.40  |  |  |   | 11.69 | 
|     | Third Quarter                          |                 |   | 13.79  |  |  |   | 2.00  | 
|     | Fourth Quarter                         |                 |   | 4.55   |  |  |   | 0.62  | 
|    
|2002 |                                        |                 |   |        |  |  |   |      
|     | First Quarter (through March 26, 2002) |                 |   | 0.98   |  |  |   | 0.17  | 



On March 26, 2002, the closing sale price
for our common stock, as reported on the NYSE was $0.20. As of
March 26, 2002, there were 5,693 record holders of our
common stock. This figure does not reflect beneficial ownership
of shares held in nominee name.

We have never paid cash dividends on our common
stock. Currently, we do not have available surplus under
Delaware law. Under Delaware law, a Delaware corporation cannot,
among other things, pay dividends on its capital stock unless it
has available surplus. See Managements Discussion
and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources. In
addition, the certificates of designation governing our
preferred stock limit our ability to pay dividends on our equity
securities and there are legal and contractual restrictions on
the ability of our subsidiaries to transfer funds to us in the
form of cash dividends, loans or advances, including those
contained in our subsidiaries indentures and credit
agreements. We do not currently anticipate paying cash dividends
in the foreseeable future on shares of our capital stock. We
anticipate that for the foreseeable future any cash flow
generated from our subsidiaries operations will be used
for debt service. Any future determination as to the payment of
dividends will be at the discretion of our Board of Directors
and will depend upon our operating results, financial condition
and capital requirements,

27



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##### 



indenture and other contractual restrictions,
general business conditions and such other factors as our Board
of Directors deems relevant. There can be no assurance that we
will pay dividends at any time in the future.


Sales of Unregistered Securities

In addition to the issuance on May 18, 2001 of
47,218 shares of our Variable Coupon Redeemable Preferred Stock,
Series A and 12,194 shares of 6.5% Fixed Coupon Redeemable
Preferred Stock to France Telecom in exchange for a 27% interest
in Noos, we issued the following unregistered securities:

In June 2001, in reliance on the exemption from
registration provided by Section 4(2) of the Securities
Act, the Company and NTL (Delaware), Inc., as co-issuers, issued
$100.0 million aggregate principal amount of 5 3/4%
Convertible Subordinated Notes due June 22, 2011 to GE
Capital and received proceeds of approximately $95.9 million.
Interest is payable quarterly in cash at a rate of 5 3/4%
per annum beginning on October 15, 2001. These notes are
convertible into shares of our common stock at the option of the
holder at an initial conversion price of $35.00 per share,
subject to adjustment. After December 22, 2007, the notes
are redeemable, in whole or from time to time in part, at NTL
(Delaware), Inc.s or our option. Proceeds raised from the
issuance were used to reduce commitments under the UK working
capital facility, finance construction, capital expenditure,
working capital requirements and for general corporate purposes.

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

On September 12, 2001, in reliance on the
exemption from registration provided by Section 3(a)(9) of
the Securities Act, we issued 1,850,000 shares of our Cumulative
Convertible Preferred Stock, Series A in exchange for the
1,850,000 issued and outstanding shares of our 5% Cumulative
Preferred Stock held by France Telecom and others. The
Convertible Preferred Stock has a stated value and liquidation
preference of $1,075.17 per share and is mandatorily redeemable
for cash by us on March 27, 2009. Dividends are payable
quarterly in additional shares of Convertible Preferred Stock,
at the following quarterly dividend rates: (i) from
September 12, 2001 through March 26, 2002, $13.44 per
share, (ii) from March 27, 2002 through March 26,
2003, $21.23 per share and (iii) from March 27, 2003
through March 26, 2004, $26.61 per share. Once the
Convertibility Date (as defined below) is set, the quarterly
dividend rate resets to $16.12 per share and the Convertible
Preferred Stock becomes eligible for conversion into shares of
our common stock beginning on a Convertibility Date,
at which time the conversion price is set at 125% of the
immediately preceding 25 trading day volume-weighted average
price of our common stock (the Convertibility Base
Price). The Convertibility Date is as follows:
March 27, 2002, unless we elect to delay convertibility
until March 27, 2003 or, alternatively, redeem, at our
option, all shares of the Convertible Preferred Stock on
March 27, 2002 in cash; if we have delayed, March 27,
2003, unless we elect again to delay convertibility until
March 27, 2004, which we may only do if the Convertibility
Base Price would be less than or equal to $65.00 per share (as
may be adjusted for certain dilutive events); we may also elect,
instead, to redeem all shares of the Convertible Preferred Stock
on March 27, 2003 in cash; if we have delayed,
March 27, 2004, unless we elect to redeem all shares of the
Convertible Preferred Stock on March 27, 2004 in cash. In
no event will the Convertibility Date be after March 27,
2004. We elected in March 2002 to delay convertibility until at
least March 27, 2003. Holders of Convertible Preferred
Stock other than any commercial bank or their affiliates may at
any time elect, subject to some conditions, to exchange their
Convertible Preferred Stock for up to 50% interest in an entity
holding our Swiss operations.

28



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##### 



Item
6.     Selected Financial
Data.

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

|                       |                                                                                                                     |                                      |   |           |   |         |   |          |   |      |   |         |   |  |   |        |   |  |   |        |  
|---------------------- | ------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | - | --------- | - | ------- | - | -------- | - | ---- | - | ------- | - |  | - | ------ | - |  | - | ------ | -
|                       |                                                                                                                     |                                     
|                       |                                                                                                                     | Year Ended December 31,             
|                       |                                                                                                                     |                                     
|                       |                                                                                                                     | 2001(1)                              |   | 2000(2)   |   | 1999(3) |   | 1998(4)  |   | 1997
|                       |                                                                                                                     |                                      |   |           |   |         |   |          |   |     
|                       |                                                                                                                     |                                     
|                       |                                                                                                                     | (In millions, except per share data)
|Income statement data: |                                                                                                                     |                                      |   |           |   |         |   |          |   |      |   |         |   |  |   |        |   |  |   |       
|                       | Operating revenues                                                                                                  |                                      | $ | 3,699.2   |   |         | $ | 2,840.8  |   |      | $ | 1,584.1 |   |  | $ | 747.0  |   |  | $ | 491.8  |  
|                       | (Loss) before extraordinary item                                                                                    |                                      |   | (14,241.3 | ) |         |   | (2,963.7 | ) |      |   | (732.7  | ) |  |   | (503.9 | ) |  |   | (328.6 | )
|                       | Net (loss)                                                                                                          |                                      |   | (14,241.3 | ) |         |   | (2,963.7 | ) |      |   | (735.7  | ) |  |   | (534.6 | ) |  |   | (333.1 | )
|                       | Basic and diluted net (loss) per common share:                                                                      |                                      |   |           |   |         |   |          |   |      |   |         |   |  |   |        |   |  |   |        |  
|                       | (Loss) per common share before extraordinary
	item(5)                                                               |                                      |   | (52.78    | ) |         |   | (14.54   | ) |      |   | (6.75   | ) |  |   | (8.12  | ) |  |   | (6.79  | )
|                       | Net (loss) per common share(5)                                                                                      |                                      |   | (52.78    | ) |         |   | (14.54   | ) |      |   | (6.78   | ) |  |   | (8.60  | ) |  |   | (6.88  | )
|                       | Weighted average number of common shares used in
	the computation of basic and diluted net loss per common share(5) |                                      |   | 276.0     |   |         |   | 217.1    |   |      |   | 119.4   |   |  |   | 64.4   |   |  |   | 50.2   |  

|                                  |  |                    |           |         |  |         |          |         |  |      |          |  |  |   |         |  |  |   |         |  
|--------------------------------- |  | ------------------ | --------- | ------- |  | ------- | -------- | ------- |  | ---- | -------- |  |  | - | ------- |  |  | - | ------- | -
|                                  |  |                   
|                                  |  | As of December 31,
|                                  |  |                   
|                                  |  | 2001(1)            |           | 2000(2) |  | 1999(3) |          | 1998(4) |  | 1997
|                                  |  |                    |           |         |  |         |          |         |  |     
|Working capital (deficiency)      |  | $                  | (18,510.6 | )       |  | $       | (849.1   | )       |  | $    | 2,261.4  |  |  | $ | 600.5   |  |  | $ | (52.3   | )
|Fixed assets, net                 |  |                    | 12,573.3  |         |  |         | 12,693.0 |         |  |      | 5,597.7  |  |  |   | 3,854.4 |  |  |   | 1,757.0 |  
|Total assets                      |  |                    | 16,834.2  |         |  |         | 28,383.7 |         |  |      | 12,211.6 |  |  |   | 6,194.1 |  |  |   | 2,421.6 |  
|Long-term debt                    |  |                    | 102.3     |         |  |         | 15,044.1 |         |  |      | 8,798.0  |  |  |   | 5,043.8 |  |  |   | 2,015.1 |  
|Redeemable preferred stock        |  |                    | 2,773.7   |         |  |         | 2,083.2  |         |  |      | 141.8    |  |  |   | 124.1   |  |  |   | 108.5   |  
|Shareholders equity (deficiency) |  |                    | (6,542.4  | )       |  |         | 8,367.4  |         |  |      | 2,136.9  |  |  |   | 355.2   |  |  |   | (61.7   | )



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of December 31, 2001, primarily all of
	the Companys debt has been classified as current due to
	the uncertainties about compliance with the terms and conditions
	of the Companys debt that would give the holders of the
	debt the right to accelerate payment. In the fourth quarter of
	2001, the Company recorded asset impairments totaling
	$9,511.3 million including goodwill of
	$8,840.5 million, license acquisition costs of
	$58.8 million, customer lists of $9.1 million, other
	intangibles of $14.9 million, investments in affiliates of
	$463.7 million and other assets of $124.3 million. In
	addition, in 2001, the Company recorded restructuring costs of
	$209.6 million, integration and consulting costs of
	$102.1 million and losses on the 1G transaction and the
	sale of the ConsumerCo off-net indirect access customers of
	$147.4 million.
|   
|(2) | In March 2000, the Company purchased Cablecom for
	an aggregate purchase price of $3,528.7 million, including
	intangibles of $2,355.3 million. In May 2000, the Company
	purchased ConsumerCo for an aggregate purchase price of
	$13,111.0 million, including intangibles of
	$8,879.0 million. The net assets and results of operations
	of Cablecom and ConsumerCo are included in the consolidated
	financial statements from their respective dates of acquisition.                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) | In March 1999, the Company purchased Diamond for
	an aggregate purchase price of $984.6 million, including
	intangibles aggregating $1,323.0 million. In April 1999, the
	Company purchased the Australian National Transmission Network
	for an aggregate purchase price of $425.8 million,
	including intangibles of $220.6 million. In July 1999, the
	Company acquired Cablelink for an aggregate purchase price of
	$700.5 million, including intangibles of
	$669.6 million. In August and December 1999, the Company
	acquired the 1G Networks of France Telecom for an aggregate
	purchase price of $61.9 million, including intangibles of
	$64.7 million. In September 1999, the Company acquired the
	shares of Workplace Technologies plc, for an aggregate purchase
	price of $175.0 million, including intangibles of
	$176.9 mil-                                   

29



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##### 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | lion. The net assets and results of operations of
	Diamond, the Australia National Transmission Network, Cablelink,
	the 1G Networks and Workplace Technologies are included in the
	consolidated financial statements from their respective dates of
	acquisition.                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | In June and September 1998, the Company purchased
	ComTel for an aggregate purchase price of $969 million,
	including intangibles aggregating $224 million. In October
	1998, the Company purchased Comcast UK for an aggregate
	purchase price of $600 million, including intangibles of
	$130 million. In December 1998, the Company purchased EGT
	for an aggregate purchase price of $151 million, including
	intangibles of $45 million. The net assets and results of
	operations of ComTel, Comcast UK and EGT are included in the
	consolidated financial statements from their respective dates of
	acquisition.
|   
|(5) | After giving retroactive effect to the
	five-for-four stock split by way of stock dividend paid in
	October 1999 and the five-for-four stock split by way of stock
	dividend paid in February 2000.                                                                                                                                                                                                                                                                                                                                                                                                                      

The Company did not declare or pay any cash
dividends during the years indicated.



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

Liquidity and Capital Resources

Recapitalization
Process and Ability to Continue Operations

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

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

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

On January 31, 2002 we announced that we had
appointed Credit Suisse First Boston, JP Morgan and Morgan
Stanley to advise on strategic and recapitalization alternatives
to strengthen our balance sheet and reduce debt and put an
appropriate capital structure in place for our business. Since
then, we have been

30



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##### 



evaluating various recapitalization alternatives
to effect a comprehensive consensual reorganization in a timely
manner to minimize negative effects on our business operations.


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

During the recapitalization process, it is
anticipated that NTLs operations will continue
uninterrupted, customer service will be unaffected, suppliers
will be paid in the ordinary course and NTLs management
will remain in place.

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

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

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

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

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

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

31



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##### 



Bank
Waivers

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

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

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



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

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



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

The amended waivers prevent us from making an
exchange offer with respect to our outstanding notes or from
entering into an agreement with bondholders without the consent
of the lenders under each of the credit facilities. The amended
waivers also prohibit us from commencing voluntary dissolution
proceedings, including proceedings under Chapter 11 of the
U.S. bankruptcy code, without the consent of these lenders.
Copies of the waivers are filed as exhibits to this
Form 10-K.

32



---



##### 



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

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

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

Interest
Payments on Public Notes

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

If the applicable issuer does not pay interest on
these notes after a 30 day grace period expires (on
April 30, 2002 in the case of the missed interest payments
due April 1, 2002), there is an event of default under the
indenture in respect of the notes on which the interest is due
and unpaid. An event of default entitles the trustee under the
indenture or the holders of 25% of the outstanding notes to
declare the principal amount of those notes to be immediately
due and payable. Even if the maturity of those notes is not
accelerated after April 30, 2002, such an event of default
would also result in an event of default in respect of other
debt (commonly called cross defaults) under all of our other
notes, except for those issued by NTL Triangle, Diamond Cable
Communications or Diamond Holdings. As a result, upon the
expiration of the grace period, on April 30, 2002, events
of default for failure to pay interest would occur under the
relevant indentures at NTL Communications and,
contemporaneously, cross defaults would occur under the
Companys other indentures at NTL Communications, NTL
Delaware, NTL Incorporated and under our Senior Credit Facility
and Working Capital Facility and could occur under the Cablecom
Facility. This would give holders of the outstanding series of
debt at these entities the right to accelerate repayment of
those debts by declaring the principal amount of the debts to be
immediately due and payable unless we obtain waivers or
forbearance agreements from sufficient percentages of our
creditors. If that right to accelerate was exercised, we would
not have sufficient cash resources to repay those debts, which
could ultimately lead to voluntary or involuntary

33



---



##### 



bankruptcy proceedings relating to the entities
so affected. In addition, the lenders under the Companys
UK credit facilities have security over the assets of the
Companys UK operating subsidiaries, except for the Diamond
and Triangle groups of companies. In the event that there was an
event of default under those facilities, the lenders could seek
to take control of those assets under applicable UK insolvency
law.


Inability to
Pay Dividends On or Redeem Preferred Stock

On February 4, 2002, the Company announced
that it would not declare or pay dividends on its 13% Senior
Redeemable Exchangeable Preferred Stock. The Company did not
make the dividend payments due on February 15, 2002 of
$6.0 million in respect of the 13% preferred stock. In
addition, the Company did not pay dividends on its 5% cumulative
participating convertible preferred stock held by France Telecom
on December 31, 2001 of $37.0 million and
March 31, 2002 of $37.5 million, or on its cumulative
convertible preferred stock held by France Telecom and a group
of commercial banks on December 31, 2001 of
$24.9 million and March 26, 2002 of
$24.1 million. Historically, payment of dividends has been
made in additional shares of preferred stock in the case of the
13% preferred stock, the 5% cumulative participating preferred
stock and the cumulative convertible preferred stock. The
Company did not pay these dividends due to a lack of available
surplus under Delaware law. Under Delaware law, the Company
cannot pay dividends on or redeem its capital stock, including
its preferred stock, unless it has available surplus.

Pursuant to the terms of the 13% preferred stock,
the unpaid dividends will continue to accrue without interest
until declared and paid. Pursuant to the terms of the 5%
cumulative convertible preferred stock and the cumulative
convertible preferred stock, the unpaid dividends will continue
to accrue without interest until declared and paid, together
with an additional cash dividend on the amount so unpaid at a
rate of 2% per quarter for as long as the dividends remain
unpaid. The failure to declare these dividends is not a default
under any of the Companys existing agreements. With
respect to the 13% preferred stock and 5% cumulative convertible
preferred stock, if dividends remain unpaid for six quarters,
the holders of each such series shall have the right to vote
separately as a class on all matters voted on by NTL
Incorporated shareholders and shall have the right, along with
other holders of preferred stock with similar default voting
rights, to elect two directors to the Companys board.

In addition, the lack of surplus means that the
Company does not expect to be able to redeem its Variable Coupon
Redeemable Preferred Stock, Series A, which is referred to
as the Noos One Year Preferred, which is held by France Telecom,
when it becomes mandatorily redeemable, to the extent funds are
available, on May 18, 2002. If we fail to redeem the Noos
preferred stock on May 18, 2002 as we expect, the holders
of such Noos preferred stock will have the right, along with
other holders of preferred stock with similar default voting
rights, to elect two directors to our board and shall have the
right to vote separately as a class, on all matters brought to
NTL Incorporated shareholders.

At the time of issuance of the Noos One Year
Preferred, the Company pledged its shares of Noos to France
Telecom to secure the mandatory redemption obligation under the
Noos One Year Preferred and the 6.5% Redeemable Preferred Stock.

Credit Rating
Downgrades

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

Sale of NTL
Australia

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

On April 7, 2002, NTL Delaware loaned
£90 million to NTL (UK) Group Limited, which loan
was funded by the proceeds of the sale of NTL Australia. This
loan is subordinated to the Companys UK credit

34



---



##### 



facilities. The remaining proceeds of the sale of
NTL Australia remain at NTL Delaware and it is currently
anticipated that such proceeds will form a portion of the
consideration to be offered to bondholders of NTL Delaware and
NTL Incorporated in satisfaction of their claims against NTL
Delaware as part of the proposed plan of reorganization.


Description
of Outstanding Notes, Credit Facilities and Redeemable Preferred
Stock

The following summarizes the terms of the
significant notes, credit facilities and redeemable preferred
stock issued by the Company and its subsidiaries as of
December 31, 2001, except for the NTL Australia bank credit
facility due to the sale of NTL Australia in April 2002.

NTL
Incorporated:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1)     Senior
	Redeemable Exchangeable Preferred Stock due February 15,
	2009, liquidation preference of $186.8 million, dividends
	accrue at 13% per annum payable quarterly in arrears, at the
	Companys option, until February 15, 2004, dividends
	may be paid in cash, by the issuance of additional shares or in
	any combination of the foregoing, redeemable at the
	Companys option on or after February 15, 2002, and,
	on any dividend payment date, the Company may exchange all of
	the outstanding shares for 13% debentures due 2009;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (2)     Convertible
	Preferred Stock due March 27, 2009, liquidation preference
	of $2,029.1 million, dividends are payable quarterly in
	arrears in additional shares, at the following quarterly
	dividend rates: (i) from September 12, 2001 through
	March 26, 2002, $13.44 per share, (ii) from
	March 27, 2002 through March 26, 2003, $21.23 per
	share, and (iii) from March 27, 2003 through
	March 26, 2004, $26.61 per share; once the
	Convertibility Date (which may be March 27,
	2003 or March 27, 2004) is set, the quarterly dividend rate
	resets to $16.12 per share and the Convertible Preferred Stock
	becomes eligible for conversion into shares of the
	Companys common stock beginning on such Convertibility
	Date, at which time the conversion price is set at 125% of the
	immediately preceding 25 trading day volume-weighted average
	price of the Companys common stock, subject to the
	Companys election to delay convertibility or redeem all
	issued and outstanding shares of Convertible Preferred Stock.
	Holders of Convertible Preferred Stock other than any commercial
	bank or their affiliates may at any time elect, subject to some
	conditions, to exchange their Convertible Preferred Stock for up
	to a 50% interest in an entity holding our Swiss operations;
|
| | (3)     Variable Coupon
	Redeemable Preferred Stock, liquidation preference of
	$491.7 million, dividends are payable quarterly at the
	Companys option in cash or additional shares of Variable
	Coupon Redeemable Preferred Stock, quarterly dividend rate based
	on the EURIBOR Rate plus 2.5%, quarterly dividend rate of 6.16%
	at December 31, 2001, mandatory redemption in cash on
	May 18, 2002. The Companys 27% interest in Noos is
	pledged to France Telecom to secure the mandatory redemption
	obligation under its Variable Coupon Redeemable Preferred Stock
	and its 6.5% Fixed Coupon Redeemable Preferred Stock;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (4)     6.5% Fixed
	Coupon Redeemable Preferred Stock, liquidation preference of
	$126.9 million, dividends are cumulative and are payable in
	cash upon redemption, mandatory redemption in cash on
	May 18, 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (5)     5 3/4%
	Convertible Subordinated Notes due June 22, 2011, principal
	amount at maturity of $100.0 million, interest of
	5 3/4% per annum is payable quarterly beginning on
	October 15, 2001, redeemable at the option of the Company
	on or after December 22, 2007, convertible into shares of
	the Companys common stock at a conversion price of $35.00
	per share, subject to adjustment based on the Companys
	stock price and adjustment to the conversion price of some
	series of our preferred stock;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

NTL
Delaware:



| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6)     5 3/4%
	Convertible Subordinated Notes due December 15, 2009,
	principal amount at maturity of $1,200.0 million, interest
	payable semiannually from June 15, 2000, redeemable at the
	Companys

35



---



##### 



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | option on or after December 18, 2002,
	convertible into shares of the Companys stock at a
	conversion price of $108.18 per share;

NTLCL:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (7)     Working Capital
	Facility, originally for £1,300.0 million
	($1,890.6 million); following the issuance of new debt
	beginning in October 2000, the commitment has been reduced by
	£882.5 million ($1,283.4 million), of which
	£100.0 million ($145.4 million) was outstanding
	as of December 31, 2001. Interest payable at least every
	six months at LIBOR plus a margin rate of 5.50% per annum, which
	is subject to adjustment; effective interest rate of 9.57% at
	December 31, 2001; the unused portion of the commitment is
	subject to a commitment fee of 0.75% payable quarterly;
	principal is due in full on March 31, 2006; in January and
	February 2002 the remaining amounts available under this
	agreement were borrowed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (8)     Senior Credit
	Facility, of which £2,784.8 million
	($4,050.0 million) was outstanding as of December 31,
	2001; originally for £2,500.0 million
	($3,635.8 million), dated 30 May 2000; interest payable at
	least every six months at LIBOR plus a margin rate of 2.00% per
	annum, which is subject to adjustment; effective interest rate
	of 6.73% at December 31, 2001; the unused portion of the
	commitment is subject to a commitment fee of 0.75% payable
	quarterly, which is reduced to 0.50% when over 50% of the
	commitment is utilized; principal is due in six quarterly
	installments beginning on June 30, 2004; as amended and
	restated pursuant to a Restatement Amendment Agreement dated 26
	September 2001 which, inter alia, amended such Senior Credit
	Facility to make available a £200.0 million
	($290.9 million) Term Facility (interest payable on such
	Term Facility at least every six months at LIBOR plus a margin
	rate of 3.50% per annum, effective interest rate of 8.06 % at
	December 31, 2001, principal is due in eight quarterly
	installments beginning on June 30, 2006) and increase the
	availability of funds under the Senior Credit Facility by
	£84.8 million ($123.3 million);

Cablecom:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (9)     Term Loan
	Facility, of which CHF 2,700.0 million
	($1,626.8 million) was outstanding as of December 31,
	2001, interest payable at least every six months at Swiss LIBOR
	plus a margin rate of 2.5% per annum, which is subject to
	adjustment, effective interest rate of 5.27% at
	December 31, 2001, principal is due over six years in
	quarterly installments beginning on March 31, 2004;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (10)     Revolving
	Facility of CHF 1,400.0 million ($843.5 million), of
	which CHF 875.0 million ($527.2 million) was
	outstanding as of December 31, 2001, interest payable at
	least every six months at Swiss LIBOR plus a margin rate of
	2.50% per annum, which is subject to adjustment, effective
	interest rate of 5.49% at December 31, 2001, the unused
	portion of the commitment is available until May 2003 and is
	subject to a commitment fee of 0.75% payable quarterly, which is
	reduced to 0.50% when over 50% of the commitment is utilized,
	principal is due over six years in quarterly installments
	beginning on March 31, 2004; our Swiss subsidiaries are
	unable to draw the remaining undrawn amounts under this facility
	because, as of December 31, 2001, Cablecoms
	liabilities exceeded its assets, which constituted an event of
	default under the facility;

NTL
Communications:



| |                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (11)     12 3/4%
	Senior Deferred Coupon Notes due April 15, 2005, principal
	amount at maturity of $277.8 million, interest payable
	semiannually from October 15, 2000, redeemable at the
	Companys option on or after April 15, 2000;    
|
| | (12)     11 1/2%
	Senior Deferred Coupon Notes due February 1, 2006,
	principal amount at maturity of $1,050.0 million, interest
	payable semiannually from August 1, 2001, redeemable at the
	Companys option on or after February 1, 2001;

36



---



##### 





| |                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (13)     10% Senior
	Notes due February 15, 2007, principal amount at maturity
	of $400.0 million, interest payable semiannually from
	August 15, 1997, redeemable at the Companys option on
	or after February 15, 2002;                                                                                                                  
|
| | (14)     9 1/2%
	Senior Sterling Notes due April 1, 2008, principal amount
	at maturity of £125.0 million ($181.8 million),
	interest payable semiannually from October 1, 1998,
	redeemable at the Companys option on or after
	April 1, 2003;                                                                                            
|
| | (15)     10 3/4%
	Senior Deferred Coupon Sterling Notes due April 1, 2008,
	principal amount at maturity of £300.0 million
	($436.3 million), interest payable semiannually beginning
	on October 1, 2003, redeemable at the Companys option
	on or after April 1, 2003;                                                                   
|
| | (16)     9 3/4%
	Senior Deferred Coupon Notes due April 1, 2008, principal
	amount at maturity of $1,300.0 million, interest payable
	semiannually beginning on October 1, 2003, redeemable at
	the Companys option on or after April 1, 2003;                                                                                             
|
| | (17)     9 3/4%
	Senior Deferred Coupon Sterling Notes due April 15, 2009,
	principal amount at maturity of £330.0 million
	($479.9 million), interest payable semiannually beginning
	on October 15, 2004, redeemable at the Companys
	option on or after April 15, 2004;                                                                 
|
| | (18)     11 1/2%
	Senior Notes due October 1, 2008, principal amount at
	maturity of $625.0 million, interest payable semiannually
	from April 1, 1999, redeemable at the Companys option
	on or after October 1, 2003;                                                                                                                    
|
| | (19)     12 3/8%
	Senior Deferred Coupon Notes due October 1, 2008, principal
	amount at maturity of $450.0 million, interest payable
	semiannually beginning on April 1, 2004, redeemable at the
	Companys option on or after October 1, 2003;                                                                                            
|
| | (20)     7% Convertible
	Subordinated Notes due December 15, 2008, principal amount
	at maturity of $489.8 million, interest payable
	semiannually from June 15, 1999, convertible into shares of
	the Companys common stock at a conversion price of $39.20
	per share, redeemable at the Companys option on or after
	December 15, 2001;
|
| | (21)     9 1/4%
	Senior Euro Notes due November 15, 2006, principal amount
	at maturity of
	250.0 million
	($222.5 million), interest payable semiannually from
	May 15, 2000;                                                                                                                                                             
|
| | (22)     9 7/8%
	Senior Euro Notes due November 15, 2009, principal amount
	at maturity of
	350.0 million
	($311.5 million), interest payable semiannually from
	May 15, 2000, redeemable at the Companys option on or
	after November 15, 2004;                                                                                          
|
| | (23)     11 1/2%
	Senior Deferred Coupon Euro Notes due November 15, 2009,
	principal amount at maturity of
	210.0 million
	($186.9 million), interest payable semiannually beginning
	on May 15, 2005, redeemable at the Companys option on
	or after November 15, 2004;                                                                 
|
| | (24)     11 7/8%
	Senior Notes due October 1, 2010, principal amount at
	maturity of $500.0 million, interest payable semiannually
	from April 1, 2001, redeemable at the Companys option
	on or after October 1, 2005;                                                                                                                    
|
| | (25)     12 3/8%
	Senior Euro Notes due February 1, 2008; principal amount at
	maturity of
	300.0 million
	($267.0 million), interest payable semiannually from
	August 1, 2001;                                                                                                                                                           
|
| | (26)     6 3/4%
	Convertible Senior Notes due May 15, 2008, principal amount
	at maturity of $1,150.0 million, interest payable
	semiannually from November 15, 2001, convertible into
	shares of the Companys common stock at a conversion price
	of $32.728 per share, redeemable at the Companys option on
	or after May 21, 2004;     

37



---



##### 



NTL
Triangle:



| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (27)     11.2% Senior
	Discount Debentures due November 15, 2007, principal amount
	at maturity of $517.3 million, interest payable
	semiannually from May 15, 2001, redeemable at NTL
	Triangles option after November 15, 2000;

Diamond:



| |                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (28)     13 1/4%
	Senior Discount Notes due September 30, 2004, principal
	amount at maturity of $285.1 million, interest payable
	semiannually from March 31, 2000, redeemable at
	Diamonds option after September 30, 1999;                                                                                           
|
| | (29)     11 3/4%
	Senior Discount Notes due December 15, 2005, principal
	amount at maturity of $531.0 million, interest payable
	semiannually from June 15, 2001, redeemable at
	Diamonds option on or after December 15, 2000;                                                                                        
|
| | (30)     10 3/4%
	Senior Discount Notes due February 15, 2007, principal
	amount at maturity of $420.5 million, interest payable
	semiannually beginning on August 15, 2002, redeemable at
	Diamonds option on or after December 15, 2002;                                                                              
|
| | (31)     10% Senior
	Sterling Notes due February 1, 2008, issued by Diamond
	Holdings plc, a wholly-owned subsidiary of Diamond, principal
	amount at maturity of £135.0 million
	($196.3 million), interest payable semiannually from
	August 1, 1998, redeemable at Diamonds option on or
	after February 1, 2003; and
|
| | (32)     9 1/8%
	Senior Notes due February 1, 2008, issued by Diamond
	Holdings plc, principal amount at maturity of
	$110.0 million, interest payable semiannually from
	August 1, 1998, redeemable at Diamonds option on or
	after February 1, 2003.                                                                  

Contractual
Obligations and Commercial Commitments

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

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

Payments Due by Period

|                                   |  |               |          |           |  |       |       |       |  |         |       |  |  |   |         |  |  |   |          | 
|---------------------------------- |  | ------------- | -------- | --------- |  | ----- | ----- | ----- |  | ------- | ----- |  |  | - | ------- |  |  | - | -------- | 
|Contractual                        |  |               |          | Less than |  | 1-3   |       | 4-5   |  | After  
|Obligations                        |  | Total         |          | 1 Year    |  | Years |       | Years |  | 5 Years
|                                   |  |               |          |           |  |       |       |       |  |        
|                                   |  |              
|                                   |  | (in millions)
|Long-Term Debt                     |  | $             | 18,213.3 |           |  | $     | 5.7   |       |  | $       | 515.0 |  |  | $ | 6,457.0 |  |  | $ | 11,235.6 | 
|Capital Lease Obligations          |  |               | 192.8    |           |  |       | 9.3   |       |  |         | 15.6  |  |  |   | 12.7    |  |  |   | 155.2    | 
|Operating Leases                   |  |               | 563.3    |           |  |       | 96.7  |       |  |         | 129.4 |  |  |   | 86.3    |  |  |   | 250.9    | 
|Unconditional Purchase Obligations |  |               | 1,672.0  |           |  |       | 434.0 |       |  |         | 325.0 |  |  |   | 237.0   |  |  |   | 676.0    | 
|Other Long-Term Obligations        |  |               | none     |           |  |       |       |       |  |         |       |  |  |   |         |  |  |   |          | 
|Total Contractual Cash Obligations |  | $             | 20,641.4 |           |  | $     | 545.7 |       |  | $       | 985.0 |  |  | $ | 6,793.0 |  |  | $ | 12,317.7 | 

38



---



##### 



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

Amount of Commitment Expiration Per
Period

|                               |  |               |       |           |  |       |      |       |  |         |      |  |  |   |      |  |  |   |      | 
|------------------------------ |  | ------------- | ----- | --------- |  | ----- | ---- | ----- |  | ------- | ---- |  |  | - | ---- |  |  | - | ---- | 
|Other Commercial               |  | Total Amounts |       | Less than |  | 1-3   |      | 4-5   |  | Over   
|Commitments                    |  | Committed     |       | 1 year    |  | years |      | years |  | 5 Years
|                               |  |               |       |           |  |       |      |       |  |        
|                               |  |              
|                               |  | (in millions)
|Guarantees                     |  | $             | 31.0  |           |  | $     | 3.2  |       |  | $       | 1.4  |  |  | $ | 11.9 |  |  | $ | 14.5 | 
|Lines of Credit                |  |               | none  |           |  |       |      |       |  |         |      |  |  |   |      |  |  |   |      | 
|Standby Letters of Credit      |  |               | none  |           |  |       |      |       |  |         |      |  |  |   |      |  |  |   |      | 
|Standby Repurchase Obligations |  |               | none  |           |  |       |      |       |  |         |      |  |  |   |      |  |  |   |      | 
|Other Commercial Commitments   |  |               | 73.9  |           |  |       | 28.8 |       |  |         | 26.2 |  |  |   | 18.9 |  |  |   |     | 
|Total Commercial Commitments   |  | $             | 104.9 |           |  | $     | 32.0 |       |  | $       | 27.6 |  |  | $ | 30.8 |  |  | $ | 14.5 | 

Consolidated
Statements of Cash Flows

Cash used in operating activities was
$597.8 million and $290.2 million in the years ended
December 31, 2001 and 2000, respectively. Cash paid for
interest exclusive of amounts capitalized in the years ended
December 31, 2001 and 2000 was $947.9 million and
$495.0 million, respectively. In addition, the change in
cash used in operating activities is also due to changes in
working capital as a result of the timing of receipts and
disbursements.

Purchases of fixed assets were
$1,946.1 million in 2001 and $2,257.0 million in 2000
as a result of the continuing fixed asset purchases and
construction, including purchases and construction by acquired
companies. The Company expects to further reduce purchases of
fixed assets in 2002 in an effort to conserve cash.

Proceeds from borrowings, net of financing costs,
of $3,110.7 million in 2001 include $838.5 million
borrowed under the NTLCL senior credit facility,
$431.8 million borrowed under the NTLCL working capital
facility, $1,150.0 million from the issuance of NTL
Communications 6 3/4% Convertible Senior Notes,
$277.9 million from the issuance of NTL Communications
12 3/8% Senior Euro Notes, $269.7 million borrowed
under the Cablecom revolving facility, $103.4 million
borrowed under the NTL Australia credit agreement, and
$100.0 million from the issuance of NTL Incorporated
5 3/4% Convertible Subordinated Notes, net of aggregate
financing costs of $60.6 million.

Principal payments of $489.8 million in 2001
include optional repayments of $455.1 million under the
NTLCL credit agreements and Cablecom revolving facility and
repayments of an aggregate of $34.7 million of other debt.

Critical Accounting Policies

The consolidated financial statements of the
Company and related financial information are based on the
application of accounting principles generally accepted in the
United States, (referred to as GAAP). GAAP requires
the use of estimates, assumptions, 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 the
Companys 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.



| |   |                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Company maintains allowances for doubtful
	accounts and notes receivable for estimated losses resulting
	from the potential inability of its customers or the other
	parties to make payments. These allowance are estimated based on
	the current aging of receivables, prior collection experience and

39



---



##### 



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

Results of Operations

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

The plan to reduce churn and to increase average
revenue per unit (referred to as ARPU) includes an increase in
broadband services to our existing customers. The Company
believes that its triple play offering of telephony, broadband
access to the Internet and digital television will prove
attractive to its existing customer base, which will result in
higher ARPU as revenues per existing customer increase. However,
there is significant competition in our markets, through digital
satellite and digital terrestrial television and through
alternative Internet access media, such as DSL offered by BT. If
the Company is unable to charge the prices

40



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for these services that are anticipated in its
business plan in response to competition or if the
Companys competition is able to attract the Companys
customers, the Companys ARPU and results of operations
will be adversely affected.


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

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

Years Ended
December 31, 2001 and 2000

As a result of the completion of the acquisitions
of the cable assets of Cablecom on March 28, 2000 and the
consumer cable telephone, Internet and television operations of
Cable & Wireless Communications plc (ConsumerCo)
on May 30, 2000, the Company consolidated the results of
operations of these businesses from the dates of acquisition.

Consumer telecommunications and television
revenues increased to $2,514.6 million from
$1,819.8 million as a result of the Cablecom and ConsumerCo
acquisitions, price increases, upselling new services to
customers and from growth in the Companys customer base.
The 2001 and 2000 revenue includes $1,350.1 million and
$809.5 million, respectively, from acquired companies.
Upselling to existing customers, new digital and cable modem
customers and the price increases implemented in the first and
second quarters of 2001 resulted in ARPU increases that
contributed to the revenue increase. Increase in ARPU in the
future is also expected to be achieved by continuing to provide
new services such as digital television, cable modem and mobile
telephone services to consumer customers.

Business telecommunications revenues increased to
$840.6 million from $702.2 million as a result of
acquisitions and from the growth in the Companys customer
base. The acquisition of the assets and contracts of Viatel UK
in the third quarter of 2001 accounted for $65.3 million of
the revenue in 2001. The 2001 and 2000 revenue includes
$97.4 million and $62.1 million, respectively, from
ConsumerCo. In addition, the Company continues to focus specific
sales and marketing effort on winning business customers in its
franchise areas and increasing revenue from its existing
customers.

Broadcast transmission and other revenues
increased to $344.0 million from $318.8 million. The
increase reflects increases in the number of broadcast
television and FM radio customers and accounts, which exceeded
price cap reductions in the Companys regulated services,
and increases in satellite and media services used by broadcast
and media customers. The Company expects growth in broadcast
services to be driven primarily by contracts related to the
increased demand for tower infrastructure by wireless services
operators expanding and upgrading their networks for wireless
broadband, the digitalization of analog television and radio
signals and the further development of programming for the
European markets requiring satellite and terrestrial
distribution services.

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

41



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Operating expenses (including network expenses)
increased to $1,809.3 million from $1,387.6 million as
a result of increases in interconnection and programming costs
due to revenue growth. The 2001 and 2000 expense includes
$657.8 million and $388.0 million, respectively, from
Cablecom and ConsumerCo.

Selling, general and administrative expenses
increased to $1,181.6 million from $1,109.1 million.
The 2001 and 2000 expense includes $407.5 million and
$292.2 million, respectively, from Cablecom and ConsumerCo.
Selling, general and administrative expenses as a percentage of
revenues decreased to 31.9% in 2001 from 39.0% in 2000. The
percentage decrease reflects various cost savings efforts.

Asset impairments in 2001 of
$9,511.3 million are related to intangible assets and
investments in affiliates. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and
record valuations in the telecommunications industry. In 2001,
the Company performed a review of the recoverability of its
long-lived assets and associated goodwill. This review was
initiated because of the decline in the Companys stock
price and significantly lower valuations for companies within
its industry. Additionally, at the time of the Companys
review, the book value of the Companys net assets
significantly exceeded its market capitalization. Accordingly,
the fair value of the Companys assets was determined by
discounting the Companys estimates of the expected future
cash flows related to these assets when the non-discounted cash
flows indicated that the long-lived assets would not be
recoverable. The Company recorded a write-down of $9,511.3
million in the fourth quarter of 2001 as a result of this
analysis and review. The total charge included goodwill of
$8,840.5 million, license acquisition costs of
$58.8 million, customer lists of $9.1 million, other
intangibles of $14.9 million, investments in affiliates of
$463.7 million and other assets of $124.3 million. The
aggregate asset impairment charge of $9,511.3 million
related to the Companys business segments as follows:
$7,388.8 million Consumer, $2,113.0 million Business
and $9.5 million Broadcast.

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

Other charges of $311.7 million in 2001
include restructuring charges of $209.6 million and costs of
$102.1 million incurred primarily to integrate the acquired
companies, mostly related to information technology integration,
as well as costs incurred for business rationalization
consulting. Other charges of $92.7 million in 2000 include
restructuring charges of $65.9 million and costs of
$26.8 million incurred primarily to integrate the acquired
companies, mostly related to information technology integration,
as well as costs incurred for business rationalization
consulting. The increase in the information technology
integration and consulting costs was the result of an
acceleration of a number of these projects, and the associated
fees to the consultants and advisors, in order to achieve the
cost savings earlier than projected.

Restructuring charges of $209.6 million and
$65.9 million for the years ended December 31, 2001
and 2000, respectively, relate to the Companys
announcements in the fourth quarter of 2001 and in November 2000
that it was taking additional actions to reorganize, re-size and
reduce operating costs and create greater efficiency in various
areas of the Company. An aggregate of $57.9 million of the 2001
reorganization costs are for the write-off of equipment and
other assets that are not in use and will not require any future
cash outlays. The employee severance and related costs in 2000
were for approximately 2,300 employees to be terminated,
approximately 550 of whom are still employed by the Company as
of December 31, 2001. These costs in 2001 are for
approximately 5,400 employees to be terminated, of which
approximately 3,000 employees are still

42



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employed by the Company as of December 31,
2001. The following table summarizes the restructuring charges
incurred and utilized in 2000 and 2001:


|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|-------------------------- |  | ------------- | ----- | ----- |  | ------------- | ---- | ------ |  | ----- | ---- |  |  | - | ----- | - |  | - | ----- | -
|                           |  | Employee      |       |       |  |               |      |        |  |      
|                           |  | Severance     |       | Lease |  |               |      |        |  |      
|                           |  | And Related   |       | Exit  |  | Agreement     |      | Fixed  |  |      
|                           |  | Costs         |       | Costs |  | Modifications |      | Assets |  | Total
|                           |  |               |       |       |  |               |      |        |  |      
|                           |  |              
|                           |  | (in millions)
|Charged to expense         |  | $             | 47.9  |       |  | $             | 18.0 |        |  | $     |     |  |  | $ |      |   |  | $ | 65.9  |  
|Utilized                   |  |               |      |       |  |               |     |        |  |       |     |  |  |   |      |   |  |   |      |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2000 |  |               | 47.9  |       |  |               | 18.0 |        |  |       |     |  |  |   |      |   |  |   | 65.9  |  
|2000 provision utilized    |  |               | (41.3 | )     |  |               | (9.6 | )      |  |       |     |  |  |   |      |   |  |   | (50.9 | )
|2000 provision released    |  |               | (6.6  | )     |  |               | (7.3 | )      |  |       |     |  |  |   |      |   |  |   | (13.9 | )
|Charged to expense         |  |               | 96.5  |       |  |               | 41.4 |        |  |       | 27.7 |  |  |   | 57.9  |   |  |   | 223.5 |  
|2001 provision utilized    |  |               | (26.2 | )     |  |               |     |        |  |       |     |  |  |   | (57.9 | ) |  |   | (84.1 | )
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2001 |  | $             | 70.3  |       |  | $             | 42.5 |        |  | $     | 27.7 |  |  | $ |      |   |  | $ | 140.5 |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  

Corporate expenses increased to
$66.8 million from $47.5 million primarily due to the
write-off of deferred charges and an allowance for a note
receivable of $9.9 million and costs incurred in 2001
related to efforts to recapitalize our balance sheet and reduce
debt.

Depreciation and amortization expense increased
to $3,170.5 million from $2,122.8 million due to an
increase in amortization on acquisition related intangibles and
an increase in depreciation of telecommunications and cable
television equipment. The 2001 and 2000 expense includes
$2,012.2 million and $1,177.4 million, respectively,
from Cablecom and ConsumerCo, including amortization of the
acquisition related intangibles.

Interest income and other, net decreased to
$51.1 million from $72.5 million as a result of the
decline in cash available for investment.

Interest expense increased to
$1,440.9 million from $1,036.8 million due to the
issuance of additional debt. The 2001 and 2000 expense includes
$393.8 million and $216.0 million, respectively
related to Cablecom and ConsumerCo. Interest of
$1,015.6 million and $590.0 million was paid in cash
in the years ended December 31, 2001 and 2000, respectively.

Share of losses from equity investments increased
to $244.6 million from $70.9 million primarily due to the
acquisition of the interest in Noos in 2001, and a full year of
ownership of the interests in B2 and eKabel in 2001.

Other losses of $147.4 million in 2001 is
comprised of $58.9 million loss on the 1G transaction in
France and $88.5 million loss on the sale of the ConsumerCo
off-net indirect access customers.

Foreign currency transaction losses were
$13.7 million in 2001 and $120.6 million in 2000 primarily
due to the effect of changes in exchange rates. The Company and
certain of its subsidiaries have cash, cash equivalents and debt
denominated in non-U.S. dollar currencies that are affected by
changes in exchange rates. In addition, foreign subsidiaries of
the Company whose functional currency is not the U.S. dollar
hold cash, cash equivalents and debt denominated in U.S. dollars
which are affected by changes in exchange rates.

Income tax expense in 2001 of $63.2 million
is primarily the result of an increase in the deferred tax
liability attributable to separate company profits of a foreign
subsidiary offset to some extent by a decrease in net deferred
tax liabilities attributable to operating losses of other
foreign subsidiaries. The increase in deferred tax liabilities
includes an adjustment related to 1997 through 2000 of
approximately $116.3 million that is primarily attributable
to additional tax depreciation being claimed during 2001 on
original and amended income tax returns.

Premium TV is developing a Classic Sports
television channel, and has a contractual arrangement with the
BBC permitting Premium TV to show football (soccer) matches from
the BBCs library. Classic Sport

43



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incurred a loss of $35.2 million for the
year ended December 31, 2001; this was principally due to
start up costs associated with the new classic sports channel,
which has not yet been launched. In the fourth quarter of 2001,
the Company decided to consolidate the 2001 results of the
Classic Sport joint venture. As a result of the consolidation,
the Company recorded the entirety of Classic Sports loss
for the year in its fourth quarter results. The fourth quarter
portion of the full year loss for Classic Sport amounted to
approximately $7.0 million.


On April 2, 2002, the Company announced that
it completed the sale of its Australian broadcast business to
Macquarie Bank for A$850.0 million (US$434.9 million) in an
all cash transaction. The net proceeds from the sale after the
repayment of the outstanding bank credit facility and
transaction related costs were approximately
A$574.0 million (US$293.7 million). In 2001, revenue
from the Companys broadcast business in Australia was
$61.8 million and revenue from the Companys 1G
subsidiary in France was $11.2 million. The combined
operating loss of these entities in 2001 including depreciation
and amortization was $26.9 million.

Years Ended
December 31, 2000 and 1999

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

Consumer telecommunications and television
revenues increased to $1,819.8 million from $834.3 million
as a result of acquisitions and from customer growth that
increased the Companys current revenue stream. The 2000
and 1999 revenue includes $1,063.4 million and
$167.1 million, respectively, from acquired companies.

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

Broadcast transmission and other revenues
increased to $318.8 million from $297.3 million.
Included in these amounts are revenues of $55.0 million and
$40.0 million from NTL Australia in 2000 and 1999,
respectively. The UK increase reflects increases in broadcast
television and FM radio customers and accounts, which exceeded
price cap reductions in the Companys regulated services,
and increases in satellite and media services used by broadcast
and media customers.

Operating expenses (including network expenses)
increased to $1,387.6 million from $798.6 million as a
result of increases in interconnection and programming costs due
to customer growth. Operating expenses as a percentage of
revenues declined to 48.8% from 50.4%. The 2000 and 1999 expense
includes $649.6 million and $171.9 million, respectively,
from acquired companies.

Selling, general and administrative expenses
increased to $1,109.1 million from $574.6 million as a
result of increases in telecommunications and cable television
sales and marketing costs and increases in additional personnel
and overhead to service the increasing customer base. The 2000
and 1999 expense includes $483.4 million and
$58.7 million, respectively, from acquired companies.

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

44



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

Corporate expenses increased to
$47.5 million from $29.4 million due to an increase in
various overhead costs.

Depreciation and amortization expense increased
to $2,122.8 million from $791.3 million due to an increase
in depreciation of telecommunications and cable television
equipment. The 2000 and 1999 expense includes
$1,481.1 million and $215.9 million, respectively,
from acquired companies, including amortization of acquisition
related intangibles.

Interest expense increased to
$1,036.8 million from $680.7 million due to the
issuance of additional debt, and the increase in the accretion
of original issue discount on the deferred coupon notes. The
2000 and 1999 expense includes $380.4 million and
$134.5 million, respectively, related to acquisitions.
Interest of $590.0 million and $222.1 million was paid
in the years ended December 31, 2000 and 1999, respectively.

Share of losses from equity investments increased
to $70.9 million from $18.4 million primarily due to
increases in the net losses of affiliates accounted for by the
equity method.

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

Foreign currency transaction (losses) gains
decreased to losses of $120.6 million from gains of
$12.7 million primarily due to the effect of unfavorable
changes in exchange rates. The Companys results of
operations are impacted by changes in foreign currency exchange
rates as follows. The Company and certain of its subsidiaries
have cash, cash equivalents and debt denominated in non-U.S.
dollar currencies that are affected by changes in exchange
rates. In addition, foreign subsidiaries of the Company whose
functional currency is not the U.S. dollar hold cash, cash
equivalents and debt denominated in U.S. dollars which are
affected by changes in exchange rates.

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

Recent Accounting Pronouncements

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

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

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the
initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination that is
completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets.
Instead, these assets must be reviewed annually (or more
frequently under certain conditions) for impairment in
accordance with this statement. This impairment test uses a fair
value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-

45



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Lived Assets to Be Disposed Of. The Company
adopted SFAS No. 142 on January 1, 2002. In light of
the significant impairment charge that the Company recorded in
2001, the Company does not expect that the adoption of this new
standard will have a significant effect on the results of
operations, financial condition or cash flows of the Company.
Amortization expense in 2001 related to goodwill and other
indefinite lived intangible assets was $1,430.2 million. The
Company expects that amortization expense in 2002 will not be
significant.




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

Market Risk

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

Foreign Exchange Contracts

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

At December 31, 2001, the Company had cross
currency swaps to hedge exposure to movements in the Euro to
British pound exchange rate and a British pound forward foreign
exchange agreement to reduce its exposure to movement in the
British pound/ U.S. dollar exchange rate.

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

Interest Rates

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

The Company has entered into zero cost collars to
hedge exposure to the floating interest rate indebtedness
incurred under the Cablecom term loan facility and revolving
loan facility. The notional amount of the zero cost collars was
CHF 1,200.0 million at December 31, 2001.

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

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

46



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NTL INCORPORATED AND SUBSIDIARIES

|                                          |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |            | 
|----------------------------------------- | ----------------------------- | ----------- |  | ----------- |  | ----------- |  | ----------- |  | ----------- | -------------------------- | --------------- | -------------------------- | ----- | -------------------------- | --------------- | --------------------- |  |  | --------------- |  |  |  | --------------- |  |  |  | ---------- |  |  |  | ---------- | 
|                                          |                               | Year Ending |  | Year Ending |  | Year Ending |  | Year Ending |  | Year Ending |                            | (3)             |                            |       |                            | Fair Value     
|                                          |                               | 12/31/02    |  | 12/31/03    |  | 12/31/04    |  | 12/31/05    |  | 12/31/06    |                            | (4) Thereafter  |                            | Total |                            | 12/31/01       
|                                          |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                
|Long-term Debt Including Current
	Portion |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|U.S. Dollar                               |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Fixed Rate                    |             |  |            |  |             |  |            |  |             |                            | $285.1          |                            |       |                            | $808.8          |                       |  |  | $1,050.0        |  |  |  | $7,262.6        |  |  |  | $9,406.5   |  |  |  | $2,671.7   | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             |                            | 13.25%          |                            |       |                            | 12.09%          |                       |  |  | 11.50%          |  |  |  | 9.00%           |  |  |  |            |  |  |  |            | 
|UK Pound                                  |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Fixed Rate                    |             |  |            |  |             |  |            |  |             |                            |                |                            |       |                            |                |                       |  |  |                |  |  |  | £890.0          |  |  |  | £890.0     |  |  |  | £311.2     | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  | 10.09%          |  |  |  |            |  |  |  |            | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  | 1.4372          |  |  |  |            |  |  |  |            | 
|Euro                                      |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Fixed Rate                    |             |  |            |  |             |  |            |  |             |                            |                |                            |       |                            |                |                       |  |  | 250.0          |  |  |  | 860.0          |  |  |  | 1,110.0   |  |  |  | 353.5     | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  | 9.25%           |  |  |  | 11.14%          |  |  |  |            |  |  |  |            | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  | .8948           |  |  |  | .9090           |  |  |  |            |  |  |  |            | 
|UK Pound                                  |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Variable Rate                 |             |  |            |  |             |  |            |  |             |                            | £90.0           |                            |       |                            | £2,494.8        |                       |  |  | £100.0          |  |  |  |                |  |  |  | £2,684.8   |  |  |  | £2,684.5   | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             |                            | LIBOR plus 2.0% |                            |       |                            | LIBOR plus 2.0% |                       |  |  | LIBOR plus 5.5% |  |  |  |                 |  |  |  |            |  |  |  |            | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            | 1.4131          |                            |       |                            | 1.4150          |                       |  |  | 1.4185          |  |  |  |                 |  |  |  |            |  |  |  |            | 
|UK Pound                                  |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Variable Rate                 |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  | £20.0           |  |  |  | £180.0          |  |  |  | £200.0     |  |  |  | £200.0     | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  | LIBOR plus 3.5% |  |  |  | LIBOR plus 3.5% |  |  |  |            |  |  |  |            | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  | 1.4185          |  |  |  | 1.4301          |  |  |  |            |  |  |  |            | 
|CHF                                       |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Variable Rate                 |             |  |            |  |             |  |            |  |             |                            | CHF143.0        |                            |       |                            | CHF250.3        |                       |  |  | CHF536.3        |  |  |  | CHF2,645.4      |  |  |  | CHF3,575.0 |  |  |  | CHF3,575.0 | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             | Swiss LIBOR plus 2.5%      |                 | Swiss LIBOR plus 2.5%      |       | Swiss LIBOR plus 2.5%      |                 | Swiss LIBOR plus 2.5% |  |  |                 |  |  |  |                 | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            | .6101           |                            |       |                            | .6174           |                       |  |  | .6249           |  |  |  | .6567           |  |  |  |            |  |  |  |            | 
|Australian Dollar                         |                               |             |  |             |  |             |  |             |  |             |                            |                 |                            |       |                            |                 |                       |  |  |                 |  |  |  |                 |  |  |  |            |  |  |  |           
|                                          | Variable Rate                 |             |  |            |  |             |  |            |  |             |                            | A$15.0          |                            |       |                            | A$25.0          |                       |  |  | A$160.0         |  |  |  |                |  |  |  | A$200.0    |  |  |  | A$200.0    | 
|                                          | Average Interest Rate         |             |  |             |  |             |  |             |  |             | A$ Bank Bid Rateplus 1.85% |                 | A$ Bank Bid Rateplus 1.85% |       | A$ Bank Bid Rateplus 1.85% |                 |                       |  |  |                 |  |  |  |                 |  |  | 
|                                          | Average Forward Exchange Rate |             |  |             |  |             |  |             |  |             |                            | .5234           |                            |       |                            | .5235           |                       |  |  | .5236           |  |  |  |                 |  |  |  |            |  |  |  |            | 

47



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##### 



NTL INCORPORATED AND SUBSIDIARIES

|                                                                          |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |           | 
|------------------------------------------------------------------------- | ------------------------- | ----------- |  | ----------- |  | ----------- |  | ----------- |  | ----------- |  | -------------- |  | ----- |  | ---------- |  |  |  | - |  |  |  | - |  |  |  | ---------- |  |  |  | --------- | 
|                                                                          |                           | Year Ending |  | Year Ending |  | Year Ending |  | Year Ending |  | Year Ending |  | (5)            |  |       |  | Fair Value
|                                                                          |                           | 12/31/02    |  | 12/31/03    |  | 12/31/04    |  | 12/31/05    |  | 12/31/06    |  | (6) Thereafter |  | Total |  | 12/31/01  
|                                                                          |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |           
|Interest Rate Derivative Financial Instruments
	Related to Long-Term Debt |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |          
|Interest Rate Swaps                                                       |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |          
|                                                                          | Notional CHF Amount       |             |  | CHF1,200.0  |  |             |  | CHF1,200.0  |  |             |  | CHF1,200.0     |  |       |  |           |  |  |  |  |  |  |  |  |  |  |  | CHF1,200.0 |  |  |  | CHF(25.2) | 
|                                                                          | Average Floor Strike Rate |             |  | 3.27%       |  |             |  | 3.27%       |  |             |  | 3.27%          |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |           | 
|                                                                          | Average Cap Strike Rate   |             |  | 5.15%       |  |             |  | 5.15%       |  |             |  | 5.15%          |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |           | 
|Interest Rate Swaps                                                       |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |          
|                                                                          | Notional UK Pound Amount  |             |  | £100.0      |  |             |  | £100.0      |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  | £100.0     |  |  |  | £0.2      | 
|                                                                          | Fixed Strike Price        |             |  | 4.33%       |  |             |  | 4.33%       |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |           | 
|Receipt of UK Pounds                                                      |                           |             |  |             |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |          
|                                                                          | Notional Euro Amount      |             |  | 76.3       |  |             |  |            |  |             |  |               |  |       |  |           |  |  |  |  |  |  |  |  |  |  |  | 76.3      |  |  |  | (4.0)    | 
|                                                                          | Average Contract Rate     |             |  | 6457        |  |             |  |             |  |             |  |                |  |       |  |            |  |  |  |   |  |  |  |   |  |  |  |            |  |  |  |           | 

48



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Related Forward Contracts to Sell Foreign
Currencies for US $



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

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



---



|  |                                        
|- | ---------------------------------------
|* | The last contract ends on May 30, 2002.

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Risk Factors

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

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

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

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

We cannot be certain that our bank lenders
will consent to the proposed recapitalization plan or grant us
any new waivers we may need.

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

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

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

As of December 31, 2001, the liabilities of
Cablecom and some of its subsidiaries exceeded their respective
assets. As a consequence, those entities were deemed to be
overindebted under Swiss law. This

50



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constitutes an event of default under the
Cablecom credit facility which entitles the lenders to
accelerate repayment. We are currently in discussions with the
lenders under the Cablecom facility regarding proposals to
resolve the overindebtedness issues as well as requesting that
they waive various other covenant breaches under the credit
facility. If we are unable to resolve the issue by
April 30, 2002, Cablecom and those subsidiaries would be
required to commence an insolvency proceeding in Switzerland.
Those proceedings would likely either be a court supervised
moratorium in which an independent administrator, or
commissioner, would be appointed to supervise the running of
each company during a restructuring or, if there is no viable
restructuring plan, a bankruptcy. This could also result in a
cross-acceleration of NTL Incorporateds and NTL
Delawares 5.75% convertible subordinated notes due 2009
and 5.75% convertible subordinated notes due 2011.


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

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

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

We have no current availability to borrow
under our existing credit facilities.

We have no current ability to borrow under our
existing UK credit facilities, as we have borrowed the full
amounts available, or to borrow under the Cablecom credit
facility, as the lenders have imposed a drawstop, which means we
currently cannot access the underdrawn amount.

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

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

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

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

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

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

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

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

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

Our growth has been curtailed by funding
constraints.

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

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

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

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

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

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

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

We have granted substantial governance and
economic rights in connection with the France Telecom investment
and have entered into transactions with France Telecom that may
impact us and a stockholders investment in
us.

We have granted rights to France Telecom,
including the right to appoint directors, preemptive rights and
the right to veto some significant corporate transactions.
Exercise by France Telecom of some or all of such rights may
impact us, including our ability to effect a consensual
recapitalization, or the value of our stock held by persons
other than France Telecom. France Telecom is a holder of our
cumulative convertible preferred stock, Series A, which
allows the holders other than commercial banks and their
affiliates to exchange such stock for stock of an entity holding
up to 50% of Cablecom.

The companies in which we hold minority
investments in continental Europe may require additional
financing to complete their network rollouts  their
ability to obtain such financing will depend on their ability to
access the capital markets and the value of our investment could
be reduced or diluted.

We have minority investments in broadband cable
operations in Germany, France and Sweden. Each of those
companies may require substantial amounts of additional capital
to complete their network rollouts and upgrades and their
ability to obtain that financing will depend, in part, on their
ability to access the capital markets. The ability of those
companies to access the capital markets will be subject not only
to the performance of their business and prospects, but to
conditions in the capital markets generally. If those companies
cannot complete their planned expansions and upgrades for any
reason, the value of our investments could be reduced. If those
companies issue equity securities, it is likely that we will not
be able to participate which could lead to substantial dilution
of the value of these investments to us.

We are dependent upon a small number of key
personnel.

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

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

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

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

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

The telecommunications industry is subject to
rapid and significant changes in technology and the effect of
technological changes on our businesses cannot be predicted. Our
core offerings may become outdated due to technological
breakthroughs rendering our products out of date. In addition,
our business plan contemplates the introduction of services
using new technologies. Cablecom and the operations in which we
have an interest in France, Germany and Sweden intend to
introduce voice over Internet protocol, or VoIP, voice telephony
services across their networks. Customer demand for this service
is uncertain as customers may not readily switch from their
current telephony service, especially if the quality of the
service is not or is perceived not to be comparable to other
telephony services. Similarly, our investments in other new
services such as those related to the 3G mobile network may
prove premature and we may not realize anticipated returns on
these new products. The cost of implementation for emerging and
future technologies could be significant, and our ability to
fund such implementation may depend on our ability to obtain
additional financing. We cannot be certain that we would be
successful in obtaining any additional financing required.

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

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

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

We encounter currency exchange rate risks because
we generate revenues and incur construction and operating
expenses in other currencies, primarily in pounds sterling while
we pay interest and principal obligations with respect to most
of our existing indebtedness in U.S. dollars and Euro. We cannot
assure you that the hedging transactions we have entered into or
any other hedging transactions we might enter into will be
successful or that shifts in the currency exchange rates will
not have a material adverse effect on us. For example, to the
extent that the pound sterling declines in value against the
U.S. dollar and, to a lesser extent, the Euro, and we have
not fully hedged against such declines, the effective cost of
servicing our U.S. dollar and Euro debt will be higher and we
will incur currency losses.

We currently do not have surplus available
under Delaware law to pay dividends on or to redeem our capital
stock.

Under Delaware law, unless a corporation has
available surplus it cannot pay dividends on or redeem its
capital stock, including its preferred stock. As of and for the
year ended December 31, 2001, we have written down the
carrying value of some of our assets, particularly goodwill.
This write down has left us without available surplus under
Delaware law and means that we will be unable to pay dividends
on or redeem any of our capital stock, including our preferred
stock, until such time as we again have available surplus. If
dividends remain unpaid for six quarters on certain series of
our preferred stock, then the holders of each such series shall
have the right to vote separately as a class on all matters
voted on by NTL Incorporated shareholders and shall have the
right, along with other holders of preferred stock with similar
default voting rights, to elect two directors to our board.
Similarly, if we fail to redeem the Noos preferred stock on
May 18, 2002 as we expect, the holders of such Noos
preferred stock will have the right, along with other holders of
preferred stock with similar default voting rights, to elect two
directors to our board and shall have the right to vote
separately as a class, on all matters brought to NTL
Incorporated shareholders.

54



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##### 



We have never paid cash dividends on our common
stock. In addition, the payment of any dividends by us in the
future will be at the discretion of our board of directors and
will depend upon, among other things, future earnings,
operations, capital requirements, our general financial
condition and the general financial condition of our
subsidiaries.

Furthermore, the indentures governing NTL
Communications Corp.s non-convertible senior notes and the
indentures governing the outstanding notes issued by Diamond and
NTL Triangle impose limitations on the payment of dividends to
us and consequently limit amounts available for us to pay
dividends on our common stock. Further, the terms of our
subsidiaries senior credit facilities and working capital
facilities restrict, and the terms of other future indebtedness
of our subsidiaries may generally restrict the ability of some
of our subsidiaries to distribute earnings to NTL Incorporated
or make other payments to NTL Incorporated. The terms of
Cablecoms credit facilities also restrict the ability of
Cablecom to distribute earnings and make other payments to NTL
Incorporated.

Some provisions of the agreements governing
our indebtedness and the indebtedness of our subsidiaries and
certain provisions of NTL Incorporateds certificate of
incorporation could delay or prevent transactions involving a
change of control of NTL.

Provisions of the agreements governing our
outstanding indebtedness and the indebtedness of our
subsidiaries, which either require such indebtedness to be
repaid or give the holder the option to require repayment, could
have the effect of delaying or preventing transactions involving
a change of control of NTL and its subsidiaries, including
transactions in which stockholders might otherwise receive a
substantial premium for their shares over then current market
prices, and may limit the ability of stockholders of NTL
Incorporated to approve transactions that they may deem to be in
their best interest.

Our certificate of incorporation contains
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 NTL.

Our stockholder rights plan has a significant
anti-takeover effect. As a result, no change of control of NTL
Incorporated requiring stockholder approval is possible without
the consent of the owners of that preferred stock.

NTL Incorporated, NTL Delaware, NTL
Communications Corp., Diamond and NTL Triangle are holding
companies that are dependent upon receipt of sufficient funds
from their subsidiaries or parent companies to meet their
obligations  their ability to access that cash flow may be
limited in some circumstances.

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

Our common stock has been suspended from
the New York Stock Exchange due to the failure to meet the $1
average closing price requirement and the minimum market
capitalization requirements; there may not be a liquid market
for our common stock and our common stock could be a penny
stock as that term is defined in the Exchange
Act

On March 28, 2002, our common stock was
suspended from trading on the NYSE pending delisting due to the
low trading price and low market capitalization relative to the
NYSE requirements. The stock last traded on the NYSE on
March 26, 2002 at a price of $0.20. Our common stock began
trading on the over-the-counter bulletin board effective
April 1, 2002 under the symbol NTLD. However,
there can be no assurance that a liquid market will develop for
our common stock on the OTC bulletin board.

55



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##### 



Furthermore, as a result of our suspension from
the New York Stock Exchange, our common stock could be 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 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, which
could have an adverse effect on the liquidity of the security
and make buying or selling it more difficult.

Item 8.     Financial
Statements and Supplementary Data.

The consolidated financial statements of the
Company are filed under this Item commencing on page F-1 of
this Report.

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

|                                              |  |                                      |          |         |  |              |          |             |  |   |          |   |  |   |           |  
|--------------------------------------------- |  | ------------------------------------ | -------- | ------- |  | ------------ | -------- | ----------- |  | - | -------- | - |  | - | --------- | -
|                                              |  |                                     
|                                              |  | 2001(1)                             
|                                              |  |                                     
|                                              |  |                                     
|                                              |  | Three Months Ended                  
|                                              |  |                                     
|                                              |  | March 31                             |          | June 30 |  | September 30 |          | December 31
|                                              |  |                                      |          |         |  |              |          |            
|                                              |  |                                     
|                                              |  | (In millions, except per share data)
|Revenues                                      |  | $                                    | 894.8    |         |  | $            | 899.2    |             |  | $ | 928.0    |   |  | $ | 977.2     |  
|Operating (loss)                              |  |                                      | (658.3   | )       |  |              | (682.8   | )           |  |   | (635.8   | ) |  |   | (10,405.7 | )
|Net (loss)                                    |  |                                      | (1,042.9 | )       |  |              | (1,029.2 | )           |  |   | (1,031.5 | ) |  |   | (11,137.7 | )
|Basic and diluted net (loss) per common share |  |                                      | (4.04    | )       |  |              | (4.00    | )           |  |   | (4.05    | ) |  |   | (40.61    | )

|                                              |  |                                      |        |         |  |              |        |             |  |   |        |   |  |   |          |  
|--------------------------------------------- |  | ------------------------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------ | - |  | - | -------- | -
|                                              |  |                                     
|                                              |  | 2000(2)                             
|                                              |  |                                     
|                                              |  |                                     
|                                              |  | Three Months Ended                  
|                                              |  |                                     
|                                              |  | March 31                             |        | June 30 |  | September 30 |        | December 31
|                                              |  |                                      |        |         |  |              |        |            
|                                              |  |                                     
|                                              |  | (In millions, except per share data)
|Revenues                                      |  | $                                    | 490.9  |         |  | $            | 666.3  |             |  | $ | 830.7  |   |  | $ | 852.9    |  
|Operating (loss)                              |  |                                      | (191.1 | )       |  |              | (330.4 | )           |  |   | (525.8 | ) |  |   | (871.6   | )
|Net (loss)                                    |  |                                      | (397.7 | )       |  |              | (616.5 | )           |  |   | (770.3 | ) |  |   | (1,179.2 | )
|Basic and diluted net (loss) per common share |  |                                      | (3.02  | )       |  |              | (3.57  | )           |  |   | (3.08  | ) |  |   | (4.57    | )



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In the fourth quarter of 2001, the Company
	recorded asset impairments totaling $9,511.3 million
	including goodwill of $8,840.5 million, license acquisition
	costs of $58.8 million, customer lists of
	$9.1 million, other intangibles of $14.9 million,
	investments in affiliates of $463.7 million and other
	assets of $124.3 million. In addition, in 2001 the Company
	recorded restructuring costs of $209.6 million, integration
	and consulting costs of $102.1 million and losses on the 1G
	transaction and the sale of the ConsumerCo off-net indirect
	access customers of $147.4 million.
|   
|(2) | In March 2000, the Company purchased Cablecom for
	an aggregate purchase price of $3,528.7 million, including
	intangibles of $2,355.3 million. In May 2000, the Company
	purchased ConsumerCo for an aggregate purchase price of
	$13,111.0 million, including intangibles of
	$8,879.0 million. The net assets and results of operations
	of Cablecom and ConsumerCo are included in the consolidated
	financial statements from their respective dates of acquisition.                                                                                                                                 

56



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##### 





|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With
	Accountants on Accounting and Financial
	Disclosure.

Not applicable.

PART III

Items 10, 11, 12, and 13.

The information required by PART III
(Items 10, 11, 12 and 13) is incorporated by reference from
the Companys definitive proxy statement involving the
election of directors which the Company expects to file,
pursuant to Regulation 14A, within 120 days following
the end of its fiscal year.

PART IV



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



| |     |                                                                          
| | --- | -------------------------------------------------------------------------
| | (a) | (1) Financial Statements  See
	list of Financial Statements on page F-1.

(2) Financial Statement
Schedules  see list of Financial Statement Schedules
on page F-1.

(3) Exhibits  See
Exhibit Index on page 57.

(b) During the fourth quarter of 2001, the
Company filed the following Current Reports on Form 8-K:



| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) Report dated October 3, 2001 (filed
	October 4, 2001) reporting under Item 5, Other Events,
	that NTL Incorporated issued a press release announcing the
	successful completion of $250 million vendor financing and
	$294 million GE Capital facilities.            
|
| | (ii) Report dated October 29, 2001
	(filed October 29, 2001) reporting under Item 5, Other
	Events, that NTL Incorporated issued a press release inviting
	the general public to its 3rd Quarter 2001 financial
	results conference call.                                
|
| | (iii) Report dated November 7, 2001
	(filed November 7, 2001) reporting under Item 5, Other
	Events, that NTL Incorporated announced financial results for
	three and nine months ended September 30, 2001.                                                              
|
| | (iv) Report dated November 26, 2001
	(filed November 26, 2001) reporting under Item 5,
	Other Events, that NTL Incorporated issued a press release
	announcing the merger of its 1G operations in France with
	Noos, the leading French broadband communications company.
|
| | (v) Report dated December 10, 2001
	(filed December 10, 2001) reporting under Item 5,
	Other Events, that NTL Incorporated issued a press release
	announcing a series of cost cutting initiatives.                                                                      
|
| | (vi) Report dated December 18, 2001
	(filed December 18, 2001) reporting under Item 5,
	Other Events, that NTL Incorporated issued a press release
	announcing the continuation of strategic discussions regarding
	its broadcast and Continental Europe operations.     

(c) Exhibits  The response to
this portion of Item 14 is submitted as a separate section
of this report.

(d) Financial Statement
Schedules  See list of Financial Statement Schedules
on page F-1.

57



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##### 



EXHIBIT INDEX

|        |        |  |  |                                                                                                                                                                                                                                                                                                                                                          
|------- | ------ |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        | 
|No.     |        | 
|        |        | 
|        | 2.1    |  |  | Agreement and Plan of Merger, dated as of
	February 9, 2000, by and among NTL Incorporated, NTL
	Communications Corp. and Holdings Merger Sub Inc. (Incorporated
	by reference to Exhibit 2.1 to Amendment No. 1 to the
	Registration Statement on Form S-3/A, filed by NTL
	(Delaware), Inc. and NTL Incorporated on July 14, 2000,
	File No. 333-36434)
|        | 2.2    |  |  | Agreement and Plan of Merger, dated as of
	March 26, 1999, by and among the Company, NTL
	Communications and NTL Merger Inc.(Incorporated by reference to
	Exhibit 2.1 to Amendment No. 2 to the Registration
	Statement on Form S-3/A, filed by NTL Incorporated and NTL
	Communications Corp. on June 3, 1999, File
	No. 333-72335)                    
|        | 2.3    |  |  | Agreement and Plan of Amalgamation, dated as of
	February 4, 1998, as amended, by and among the Company, NTL
	(Bermuda) Limited, and Comcast UK Cable Partners Limited
	(Incorporated by reference to the Registration Statement on
	Form S-4, filed by NTL Incorporated on September 30,
	1998, File No. 333-64727)                                     
|        | 2.4    |  |  | Amendment No. 1 to Agreement and Plan of
	Amalgamation, dated as of May 28, 1998, by and among the
	Company, NTL (Bermuda) Limited and Comcast UK Cable
	Partners Limited (Incorporated by reference to Annex B to
	the Registration Statement on Form S-4, filed by NTL
	Incorporated on September 30, 1998, File No. 333-64727)                        
|        | 2.5    |  |  | Share Exchange Agreement, dated as of
	June 16, 1998, as amended, by and among the Company and the
	shareholders of Diamond Cable Communications plc (Incorporated
	by reference to Annex A to the Proxy Statement, filed by
	NTL Incorporated on January 29, 1999, File
	No. 000-22616)                                                                 
|        | 2.6    |  |  | Amendment No. 1 to Share Exchange Agreement,
	dated as of December 21, 1998, by and among the Company and
	the shareholders of Diamond Cable Communications plc
	(Incorporated by reference to Exhibit 99.1 to
	Form 8-K, filed by NTL Incorporated on December 23,
	1998, File No. 000-22616)                                                           
|        | 2.7    |  |  | Transaction Agreement, dated as of July 26,
	1999, by and among, Bell Atlantic Corporation, Cable and
	Wireless PLC, Cable, Wireless Communications PLC and NTL
	Incorporated (Incorporated by reference to Annex J to the
	Proxy Statement, filed by NTL Incorporated on February 11,
	2000, File No. 000-25691)                                        
|        | 2.8    |  |  | Investment Agreement, dated as of July 26,
	1999, by and between, NTL Incorporated and France Telecom S.A.
	(Incorporated by reference to Annex A the Proxy Statement,
	filed by NTL Incorporated on February 11, 2000, File
	No. 000-25691)                                                                                                             
|        | 2.8(a) |  |  | Amendment No. 1 to the Investment Agreement,
	dated as of August 6, 1999 by and among NTL Incorporated
	and France Telecom S.A.(Incorporated by reference Annex B
	to the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                          
|        | 2.8(b) |  |  | Amendment No. 2 to the Investment Agreement,
	dated as of October 8, 1999 by and among NTL Incorporated
	and France Telecom S.A.(Incorporated by reference to Annex C to
	the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                      
|        | 2.9    |  |  | Purchase Agreement, dated as of February 17,
	2000, by and between France Telecom, S.A. and NTL Incorporated
	(Incorporated by reference to Exhibit 99.3 to the
	Form 8-K, filed by NTL Incorporated on February 22,
	2000, File No. 000-25691)                                                                                                          
|        | 2.10   |  |  | Transaction Agreement dated as of
	December 12, 1999 by and among Cablecom Holding AG and NTL
	Incorporated and certain other parties thereto (Incorporated by
	reference to Exhibit 2.9 to the 1999 Annual Report on
	Form 10-K, filed by NTL Incorporated on March 17,
	2000, File No. 000-25691)                                                      
|        | 3.1    |  |  | Restated Certificate of Incorporation of NTL
	Incorporated (Incorporated by reference to Exhibit 3.1 to
	the 2000 Form 10-K, filed by NTL Incorporated on
	March 30, 2001, File No. 000-30673)                                                                                                                                                           

58



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##### 



|        |        |  |  |                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ------ |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        | 
|No.     |        | 
|        |        | 
|        | 3.1(a) |  |  | Certificate of Designation, filed on May 17,
	2001, in respect of NTL Incorporateds 6.5% Fixed Coupon
	Redeemable Preferred Stock, Series A (Incorporated by
	reference to Exhibit 3.1 to the Quarterly Report on
	Form 10-Q, NTL Incorporated on August 14, 2001, File
	No. 001-16183)                                                                                                       
|        | 3.1(b) |  |  | Certificate of Designation, filed on May 17,
	2001, in respect of NTL Incorporateds Variable Coupon
	Redeemable Preferred Stock, Series A (Incorporated by
	reference to Exhibit 3.1 the Quarterly Report
	Form 10-Q, NTL Incorporated on August 14, 2001, File
	No. 001-16183)                                                                                                               
|        | 3.1(c) |  |  | Certificate of Designation, filed on
	September 12, 2001, in respect of NTL Incorporateds
	Cumulative Convertible Preferred Stock, Series A
	(Incorporated by reference to Exhibit 3.1 to the Quarterly
	Report on Form 10-Q, filed by NTL Incorporated on
	November 14, 2001, File No. 001-16183)                                                                                            
|        | 3.1(d) |  |  | Certificate of Correction, filed on
	September 28, 2001, in respect of NTL Incorporateds
	Cumulative Convertible Preferred Stock, Series A
	(Incorporated by reference to Exhibit 3.2 to the Quarterly
	Report on Form 10-Q, filed by NTL Incorporated on
	November 14, 2001, File No. 001-16183)                                                                                             
|        | 3.1(e) |  |  | Certificate of Elimination, filed
	November 20, 2001, in respect of NTL Incorporateds
	9.9% Mandatorily Redeemable Preferred Stock, Series B*                                                                                                                                                                                                                                                 
|        | 3.1(f) |  |  | Certificate of Elimination, filed on
	November 20, 2001, in respect of NTL Incorporateds 5%
	Cumulative Preferred Stock, Series A*                                                                                                                                                                                                                                                            
|        | 3.1(g) |  |  | Certificate of Designation, filed on
	January 2, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series H*                                                                                                                                                                                                                                   
|        | 3.1(h) |  |  | Certificate of Designation, filed on
	January 2, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series B-3*                                                                                                                                                                                                                                 
|        | 3.1(i) |  |  | Certificate of Designation, filed on
	April 2, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series I*                                                                                                                                                                                                                                     
|        | 3.1(j) |  |  | Certificate of Designation, filed on
	April 2, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series B-4*                                                                                                                                                                                                                                   
|        | 3.1(k) |  |  | Certificate of Correction, filed on June 18,
	2001, in respect of NTL Incorporateds Variable Coupon
	Redeemable Preferred Stock, Series A*                                                                                                                                                                                                                                                    
|        | 3.1(l) |  |  | Certificate of Designation, filed on July 2,
	2001, in respect of NTL Incorporateds 5% Cumulative
	Participating Convertible Preferred Stock, Series J*                                                                                                                                                                                                                                       
|        | 3.1(m) |  |  | Certificate of Designation, filed on July 2,
	2001, in respect of NTL Incorporateds 5% Cumulative
	Participating Convertible Preferred Stock, Series B-5*                                                                                                                                                                                                                                     
|        | 3.1(n) |  |  | Certificate of Designation, filed on
	October 1, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series K*                                                                                                                                                                                                                                   
|        | 3.1(o) |  |  | Certificate of Designation, filed on
	October 1, 2001, in respect of NTL Incorporateds 5%
	Cumulative Participating Convertible Preferred Stock,
	Series B-6*                                                                                                                                                                                                                                 
|        | 3.2    |  |  | By-Laws of NTL Incorporated (Incorporated by
	reference to Exhibit 3.4 to Amendment No. 1 to the
	Registration Statement on Form S-3/ A, filed by NTL
	Communications Corp. on June 3, 1999, File
	No. 333-72335)                                                                                                                                                                              
|        | 4.1    |  |  | Specimen of Common Stock Certificate
	(Incorporated by reference to Exhibit 4.2 to Amendment
	No. 2 to the Registration Statement on Form S-1/A,
	filed by International Cabletel Inc. on September 9, 1993,
	File No. 33-63692)                                                                                                                                                               
|        | 4.2    |  |  | Form of Indenture, dated as of September 28,
	1994, by and between Diamond Cable Communications plc, and The
	Bank of New York as Trustee, with respect to the 13 1/4%
	Senior Discount Notes due September 30, 2004 (Incorporated
	by reference to Exhibit 4.1 to the Registration Statement
	on Form S-1, filed by Diamond Cable Communications plc on
	September 6, 1994, File No. 33-83740)

59



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##### 



|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ---- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|No.     |      | 
|        |      | 
|        | 4.3  |  |  | First Supplemental Indenture, dated as of
	May 31, 1996, by and between Diamond Cable Communications
	plc and The Bank of New York as Trustee (Incorporated by
	reference to Exhibit 4.3 to Post-Effective Amendment
	No. 4 to the Registration Statement on Form S-1, filed
	by Diamond Cable Communications plc on September 12, 1996,
	File No. 33-83740)                                                                          
|        | 4.4  |  |  | Indenture, dated as of April 20, 1995, by
	and between NTL Communications Corp. and Chemical Bank as
	Trustee, with respect to the 12 3/4% Senior Notes
	(Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by International
	CableTel Incorporated on May 26, 1995, File
	No. 33-92794)                                                                                                     
|        | 4.5  |  |  | First Supplemental Indenture, dated as of
	January 22, 1996, by and between NTL Communications Corp.
	and Chemical Bank, as Trustee, with respect to the 12 3/4%
	Senior Notes (Incorporated by reference to Exhibit 4.5 to
	the Registration Statement on Form S-4, filed by
	International CabelTel Incorporated on February 5, 1996,
	File No. 333-1010)                                                                           
|        | 4.6  |  |  | Indenture, dated as of November 11, 1995, by
	and between Comcast UK Cable Partners Limited and Bank of
	Montreal Trust Company as Trustee with respect to the 11.20%
	Senior Discount Debentures due 2007 (Incorporated by reference
	to Exhibit 4.1 to Amendment No. 2 to the Registration
	Statement on Form S-1/A filed by Comcast UK Cable Partners
	Limited on November 5, 1995, File No. 33-96932)                             
|        | 4.7  |  |  | First Supplemental Indenture, dated
	October 29, 1998, by and between NTL (Bermuda) Limited (now
	NTL Triangle) LLC) and Bank of Montreal Trust Company as
	Trustee, with respect to the 11.20% Senior Discount Debentures
	due 2007 (Incorporated by reference to Exhibit 4.1 to
	Form 8-K, filed by NTL (Triangle) LLC on November 4,
	1998, File No. 000-24792)                                                                    
|        | 4.8  |  |  | Indenture, dated as of December 15, 1995, by
	and between Diamond Cable Communications plc, and The Bank of
	New York as Trustee, with respect to the 11 3/4% Senior
	Discount Notes due December 15, 2005 (Incorporated by
	reference to Exhibit 4.1 to Amendment No. 2 to the
	Registration Statement on Form S-1/A, filed by Diamond
	Cable Communications plc on December 6, 1995, File
	No. 33-98374)                            
|        | 4.9  |  |  | Indenture, dated as of January 30, 1996, by
	and between NTL Communications and Chemical Bank as Trustee,
	with respect to the 11 1/2% Senior Notes due 2006
	(Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by International
	CabelTel Incorporated on February 5, 1996, File
	No. 333-1010)                                                                                            
|        | 4.10 |  |  | Indenture, date as of February 12, 1997, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 10% Senior Notes
	(Incorporated by reference to Exhibit 4.9 to the 1996
	Annual Report on Form 10-K, filed by NTL Incorporated on
	March 28, 1997, File No. 000-22616)                                                                                                               
|        | 4.11 |  |  | Indenture, dated as of February 27, 1997, by
	and between Diamond Cable Communications plc and The Bank of New
	York as Trustee, with respect to the 10 3/4% Senior
	Discount Notes due February 15, 2007 (Incorporated by
	reference to Exhibit 4.1 to the Registration Statement on
	Form S-4, filed by Diamond Cable Communications plc on
	April 15, 1997, File No. 333-25193)                                                    
|        | 4.12 |  |  | Indenture, dated as of February 6, 1998, by
	and among Diamond Holdings plc, Diamond Cable Communications
	plc, and The Bank of New York as Trustee, with respect to the
	10% Senior Notes due February 1, 2008 and 9 1/8%
	Senior Notes due February 1, 2008 (Incorporated by
	reference to Exhibit 4.1 to the Registration Statement on
	Form S-4, filed by Diamond Cable Communications plc on
	March 20, 1998, File No. 333-48413)
|        | 4.13 |  |  | Indenture, dated as of March 13, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 9 1/2% Senior Notes
	(Incorporated by reference to Exhibit 4.10 to the 1997
	Annual Report on Form 10-K filed by NTL Communications
	(File No. 0-22616) on March 30, 1998)                                                                                                             

60



---



##### 



|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ---- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|No.     |      | 
|        |      | 
|        | 4.14 |  |  | Indenture, date as of March 13, 1998, by and
	between NTL Communications Corp. and The Chase Manhattan Bank,
	as Trustee, with respect to the 9 3/4% Senior Deferred
	Coupon Notes (Incorporated by reference to Exhibit 4.11 to
	the 1997 Annual Report on Form 10-K, filed by NTL
	Incorporated on March 30, 1998, File No. 000-22616)                                                                                                                                                       
|        | 4.15 |  |  | Indenture, date as of March 13, 1998, by and
	between NTL Communications Corp. and The Chase Manhattan Bank,
	as Trustee, with respect to the 10 3/4% Senior Deferred
	Coupon Notes (Incorporated by reference to Exhibit 4.12 to
	the 1997 Annual Report on Form 10-K, filed by NTL
	Incorporated on March 30, 1998, File No. 000-22616)                                                                                                                                                      
|        | 4.16 |  |  | Indenture, date as of November 2, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 11 1/2% Senior Notes
	due 2008 (Incorporated by reference to Exhibit 4.13 to the
	1998 Annual Report on Form 10-K, filed by NTL Incorporated
	on March 30, 1999, File No. 000-22616)                                                                                                                                                           
|        | 4.17 |  |  | Indenture, date as of November 6, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 12 3/8% Senior
	Deferred Coupon Notes due 2008 (Incorporated by reference to
	Exhibit 4.15 to the 1998 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 1999, File
	No. 000-22616)                                                                                                                                          
|        | 4.18 |  |  | Indenture, date as of December 16, 1998, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank, as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.17 to the 1998 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 1999, File
	No. 000-22616)                                                                                                                                            
|        | 4.19 |  |  | First Supplemental Indenture, date as of
	March 31, 1999, by and among NTL Incorporated, NTL
	Communications Corp. and The Chase Manhattan Bank, as Trustee,
	with respect to the 7% Convertible Subordinated Notes due 2008
	(Incorporated by reference to Exhibit 4.4 to Amendment
	No. 2 to the Registration Statement on Form S-3/A,
	filed by NTL Incorporated and NTL Communications Corp. on
	June 3, 1999, File No. 333-72335)                                                         
|        | 4.20 |  |  | Second Supplemental Indenture, dated as of
	March 16, 2000, by and among NTL Incorporated, NTL
	Communications Corp. (formerly NTL Incorporated) and The Chase
	Manhattan Bank as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.3 to Amendment No. 1 to the Registration
	Statement on Form S-3/ A , filed by NTL Incorporated, NTL
	(Delaware), Inc. and NTL Communications Corp. on August 30,
	2000, File No. 333-42792)
|        | 4.21 |  |  | Third Supplemental Indenture, dated as of
	May 17, 2000, by and among NTL Incorporated, NTL
	Communications Corp. (formerly NTL Incorporated) and The Chase
	Manhattan Bank as Trustee, with respect to the 7% Convertible
	Subordinated Notes due 2008 (Incorporated by reference to
	Exhibit 4.4 to Amendment No. 1 to the Registration
	Statement on Form S-3/ A, filed by NTL Incorporated, NTL
	(Delaware), Inc. and NTL Communications Corp. on August 30,
	2000, File No. 333-42792)    
|        | 4.22 |  |  | Indenture, dated as of April 14, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 9 3/4% Senior Deferred
	Coupon Notes due 2009 (Incorporated by reference to
	Exhibit 4.1 to the Registration Statement on Form S-4,
	filed by NTL Communications Corp. on May 13, 1999, File
	No. 333-78405)                                                                                                                                     
|        | 4.23 |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 9 1/4% Senior Notes
	due 2006 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on January 24, 2000, File
	No. 333-95267)                                                                                                                                              
|        | 4.24 |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communication Corp. and The Chase Manhattan Bank
	as Trustee, with respect to the 9 7/8% Senior Notes Due
	2009 (Incorporated by reference to Exhibit 4.2 to the
	Registration Statement on Form S-4, filed by NTL
	Communication Corp. on January 24, 2000, File
	No. 333-95267)                                                                                                                                                

61



---



##### 



|        |         |  |  |                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ------- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         | 
|No.     |         | 
|        |         | 
|        | 4.25    |  |  | Indenture, dated as of November 24, 1999, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 11 1/2% Senior
	Deferred Coupon Notes due 2009 (Incorporated by reference to
	Exhibit 4.3 to the Registration Statement on Form S-4,
	filed by NTL Communications Corp. on January 24, 2000, File
	No. 333-95267)                                           
|        | 4.26    |  |  | Indenture, dated as of December 22, 1999, by
	and between NTL Incorporated and The Chase Manhattan Bank as
	Trustee, with respect to the 5 3/4% Convertible
	Subordinated Notes Due 2009 (Incorporated by reference to
	Exhibit 4.28 to the 1999 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 17, 2000, File
	No. 000-25691)                                                              
|        | 4.27    |  |  | First Supplemental Indenture, dated as of
	May 17, 2000, by and between NTL Incorporated and The Chase
	Manhattan Bank as Trustee, with respect to the 5 3/4%
	Convertible Subordinated Notes due 2009 (Incorporated by
	reference to Exhibit 4.2 to Amendment No. 1 to the
	Registration Statement on Form S-3/A, filed by NTL
	(Delaware), Inc. and NTL Incorporated on July 14, 2000,
	File No. 333-36434)
|        | 4.28    |  |  | Indenture, dated as of October 2, 2000, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 11 7/8% Senior Notes
	due 2010 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on October 26, 2000, File
	No. 333-48648)                                                             
|        | 4.29    |  |  | Indenture, dated as of January 24, 2001, by
	and between NTL Communications Corp. and The Chase Manhattan
	Bank as Trustee, with respect to the 12 3/8% Senior Notes
	due 2008 (Incorporated by reference to Exhibit 4.1 to the
	Registration Statement on Form S-4, filed by NTL
	Communications Corp. on February 9, 2001, File
	No. 333-55288)                                                            
|        | 4.30    |  |  | Indenture, dated as of May 15, 2001, by and
	between NTL Communications Corp., NTL Incorporated and The Chase
	Manhattan Bank, as Trustee, with respect to the 6 3/4%
	Convertible Senior Notes due 2008 (Incorporated by reference to
	Exhibit 4.7 to Amendment No. 1 to the Registration
	Statement on Form S-4/A, filed by NTL Communications Corp.
	on June 8, 2001, File No. 333-55288)                 
|        | 4.31    |  |  | Indenture, dated as of June 22, 2001 by and
	between NTL Incorporated, NTL (Delaware), Inc. and The Chase
	Manhattan Bank, as Trustee, with respect to the 5 3/4%
	convertible subordinated notes due 2011**                                                                                                                                                                                                 
|        | 4.32    |  |  | First Supplemental Indenture, dated as of
	July 27, 2001 by and among NTL Incorporated, NTL
	(Delaware), Inc. and The Chase Manhattan Bank, as Trustee, with
	respect to the 5 3/4% convertible subordinated notes due
	2011**                                                                                                                                                                               
|        | 4.33    |  |  | Registration Rights Agreement, dated as of
	February 2, 2000, by and between NTL Incorporated and Bell
	Atlantic Corporation (Incorporated by reference to Annex H
	to the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                                                                             
|        | 4.33(a) |  |  | Amendment No. 1 to the Registration Rights
	Agreement, dated as of November 30, 2000 by and between NTL
	Incorporated and Verizon Communications Inc. (formerly known as
	Bell Atlantic Corporation) (Incorporated by reference to
	Exhibit 4.30A to the Registration Statement on
	Form S-3, filed by NTL Incorporated and NTL Communications
	Corp. on July 24, 2001, File No. 333-65742)                  
|        | 4.33(b) |  |  | Amendment No. 2 to the Registration Rights
	Agreement, dated as of March 31, 2001 by and between NTL
	Incorporated and Verizon Communications Inc. (formerly known as
	Bell Atlantic Corporation) (Incorporated by reference to
	Exhibit 4.30B to the Registration Statement on
	Form S-3, filed by NTL Incorporated and NTL Communications
	Corp. on July 24, 2001, File No. 333-65742)                     
|        | 4.33(c) |  |  | Amendment No. 3 to the Registration Rights
	Agreement, dated as of June 30, 2001 by and between NTL
	Incorporated and Verizon Communications Inc. (formerly known as
	Bell Atlantic Corporation) (Incorporated by reference to
	Exhibit 4.30C to the Registration Statement on
	Form S-3, filed by NTL Incorporated and NTL Communications
	Corp. on July 24, 2001, File No. 333-65742)                      

62



---



##### 



|        |         |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         | 
|No.     |         | 
|        |         | 
|        | 4.34    |  |  | Registration Rights Agreement, dated as of
	February 2, 2000, by and between NTL Incorporated and Cable
	& Wireless plc (Incorporated by reference to Annex G to
	the Proxy Statement, filed by NTL Incorporated on
	February 11, 2000, File No. 000-25691)                                                                                                                                                                                                                                               
|        | 4.35    |  |  | Registration Rights Agreement, dated as of
	May 30, 2000, by and between NTL Incorporated and France
	Telecom, with respect to the 5% Cumulative Participating
	Convertible Preferred Stock Series A (Incorporated by
	reference to Exhibit 4.33 to the 2000 Annual Report on
	Form 10-K, filed by NTL Incorporated on March 30,
	2001, File No. 001-16183)                                                                                                                                               
|        | 4.36    |  |  | Registration Rights Agreement dated as of
	May 15, 2001 by and among NTL Communications Corp., NTL
	Incorporated, Morgan Stanley & Co. Incorporated, J.P.
	Morgan Securities Inc., Credit Suisse First Boston Corporation
	and Salomon Smith Barney Inc. with respect to the 6 3/4%
	Convertible Senior Notes due 2008 (Incorporated by reference to
	Exhibit 4.8 to Amendment No. 1 to the Registration
	Statement on Form S-4/A, filed by NTL Communications Corp.
	on June 8, 2001, File No. 333-55288)
|        | 4.37    |  |  | Registration Rights Agreement dated as of
	June 22, 2001 by and among NTL Incorporated, NTL
	(Delaware), Inc. and SFG VI Inc. with respect to shares of
	common stock issuable upon conversion of the 5 3/4 %
	Convertible Notes due 2011 (Incorporated by reference to
	Exhibit 4.40 to the Registration Statement on
	Form S-3, filed by NTL Incorporated on July 24, 2001,
	File No. 333-65744)                                                                                                        
|        | 4.38    |  |  | Form of Preferred Stock (Incorporated by
	reference to Exhibit 4.13 to the 1996 Annual Report on
	Form 10-K, filed by NTL Incorporated on March 28,
	1997, File No. 000-22616)                                                                                                                                                                                                                                                                                                                            
|        | 4.39    |  |  | Rights Agreement, dated as of September, 1993, by
	and between NTL Incorporated and Continental Stock Transfer
	& Trust Company (Incorporated by reference to
	Exhibit 4.2 to Amendment No. 1 to the Registration
	Statement of Form S-1, filed by International CableTel,
	Inc. on August 11, 1993, File No. 33-63570)                                                                                                                                                                                   
|        | 4.39(a) |  |  | Amendment No. 1 to the Rights Agreement,
	dated as of March 31, 1999, by and between NTL Incorporated
	and Continental Stock Transfer & Trust Company, as
	Rights Agent (Incorporated by reference to Exhibit 4.4 to
	the Registration Statement on Form S-8, filed by NTL
	Incorporated on April 20, 1999, File No. 333-76601)                                                                                                                                                                           
|        | 4.39(b) |  |  | Amendment No. 2 to the Rights Agreement,
	dated as of October 23, 1999, by and between NTL
	Incorporated and Continental Stock Transfer & Trust Company,
	as Rights Agent (Incorporated by reference to Exhibit 4.48B
	to the 1999 Annual Report on Form 10-K, Incorporated, filed
	by NTL Incorporated on March 17, 2000, File
	No. 000-25691)                                                                                                                                                           
|        | 4.39(c) |  |  | Amendment No. 3 to the Rights Agreement,
	dated as of March 28, 2000, by and between NTL Incorporated
	and Continental Stock Transfer & Trust Company, as
	Rights Agent (Incorporated by reference to Exhibit 4.34.C
	to the 2000 Annual Report on Form 10-K, filed by NTL
	Incorporated on March 30, 2001, File No. 001-16183)                                                                                                                                                                           
|        | 4.39(d) |  |  | Amendment No. 4 to the Rights Agreement,
	dated as of May 17, 2000, by and between NTL Incorporated
	and Continental Stock Transfer & Trust Company, as
	Rights Agent (Incorporated by reference to Exhibit 4.34.D
	to the 2000 Annual Report on Form 10-K filed by NTL
	Incorporated on March 30, 2001, File No. 001-16183)                                                                                                                                                                              
|        | 4.39(e) |  |  | Amendment No. 5 to the Rights Agreement,
	dated as of May 25, 2000, by and between Incorporated and
	Continental Stock Transfer & Trust Company, as Rights Agent
	(Incorporated by reference to Exhibit 4.34.E to the 2000
	Annual Report on Form 10-K, filed by NTL Incorporated on
	March 30, 2001, File No. 001-16183)                                                                                                                                                                                 
|        | 4.39(f) |  |  | Amendment to Amendment No. 3 to the Rights
	Agreement, dated as of September 12, 2001, by and between
	NTL Incorporated and Continental Stock Transfer & Trust
	Company, as Rights Agent (Incorporated by reference
	Exhibit 4.1 to the Quarterly Report on Form 10-Q,
	filed by NTL Incorporated on November 14, 2001, File
	No. 000-30673)                                                                                                                                                              
|        | 4.40    |  |  | Exchange Agreement, dated as of
	September 12, 2001, by and among the Company and France
	Telecom S.A. and the other parties thereto (Incorporated by
	reference to Exhibit 4.2 to the Quarterly Report on
	Form 10-Q, filed by NTL Incorporated on November 14,
	2001, File No. 001-16183)                                                                                                                                                                                                               

63



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##### 



|        |         |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | ------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         | 
|No.     |         | 
|        |         | 
|        | 4.41    |  |  | Deposit Agreement, dated as of June 22,
	2001, by and among NTL Incorporation, NTL (Delaware), Inc. and
	United States Trust Company of New York, as depositary
	(Incorporated by reference to Exhibit 4.29 to Amendment 1
	to the Registration Statement on Form S-3/ A, filed by NTL
	Incorporated on August 16, 2001, File No. 333-65744)                                                                                                                                                                                                                                                                                            
|        | 10.1    |  |  | Compensation Plan and Agreements, as amended and
	restated effective June 3, 1997 (Incorporated by reference
	to Exhibit 10.1 to the 1997 Annual Report on
	Form 10-K, filed by NTL Communications on March 30,
	1998, File No. 0-22616)                                                                                                                                                                                                                                                                                                                                                                                                
|        | 10.2    |  |  | Rules of the NTL Sharesave Plan, adopted by NTL
	Incorporated on October 28, 1997 (Incorporated by reference
	to Exhibit 10.2 to the 1998 Annual Report on
	Form 10-K, filed by NTL Communications, on March 30,
	1999, File No. 0-22616)                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.3    |  |  | Form of Director and Officer Indemnity Agreement
	(together with a schedule of executed Indemnity Agreements)
	(Incorporated by reference to Exhibit 10.3 to the 1999
	Annual Report on Form 10-K, filed by NTL Incorporated on
	March 17, 2000, File No. 000-25691)                                                                                                                                                                                                                                                                                                                                                                    
|        | 10.4    |  |  | 1998 Non-Qualified Stock Option Plan, as Amended
	and Restated October 1998 (Incorporated by reference to
	Exhibit 10.4 to the 1998 Annual Report on Form 10-K,
	filed by NTL Communications on March 30, 1999, File
	No. 0-22616)                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 10.5    |  |  | Credit Agreement relating to the acquisition of
	Cable & Wireless Communications (Holdings) PLC, dated as of
	May 30, 2000, by and among NTL Communications Limited, NTL
	Business Limited, NTL Communications Corp., Chase Manhattan PLC
	and Morgan Stanley Dean Witter Limited, Chase Manhattan
	International Limited (Incorporated by reference to
	Exhibit 10.8 to the 2000 Annual Report on Form 10-K,
	filed by NTL Incorporated on March 30, 2001, File
	No. 001-16183)                                                                                                                                                        
|        | 10.6    |  |  | Restatement Amendment Agreement dated as of
	September 26, 2001 by and among NTL Communications Limited,
	NTL Investment Holdings Limited, NTL Communications Corp., J.P.
	Morgan plc and Morgan Stanley Dean Witter Bank Limited, Chase
	Manhattan International Limited and others, agreeing to amend
	the Credit Agreement, dated as of May 30, 2000, between NTL
	Communications Corp., NTL (UK) Group, Inc., NTL
	Communications Limited, Morgan Stanley Dean Witter Bank Limited
	and Chase Manhattan PLC*                                                                                                                        
|        | 10.6(a) |  |  | Amended and Restated Credit Agreement dated as of
	September 26, 2001, restating the Credit Agreement dated as
	of 30 May 2000, as amended or waived pursuant to a letter
	dated as of 6 June 2000, amendment agreements dated as of
	8 June 2000, 30 June 2000 and 4 September 2000, a
	novation agreement dated as of 21 February 2001 and letters
	of consent dated as of 22 December 2000 and 29 January
	2001 by and among NTL Communications Limited, NTL Investment
	Holdings Limited, NTL Communications Corp., J.P. Morgan plc
	and Morgan Stanley Dean Witter Bank Limited, Chase Manhattan
	International Limited and others*
|        | 10.7    |  |  | Credit Agreement dated 28 March 2000, by and
	among NTL Incorporated, NTL Cablecom Holding GmbH, Cablecom
	(Ostschweiz) AG and Chase Manhattan plc and Morgan Stanley
	Senior Funding, Inc., as Arrangers and Joint Book Managers,
	Chase Manhattan International Limited as Agent and Others Term,
	comprising a Loan Facility and a Revolving Credit Facility
	(Incorporated by reference to Exhibit 10.4 to the
	Registration Statement on Form S-3, filed by NTL
	Incorporated and NTL Communications Corp. on July 24, 2001,
	File No. 333-65742)                                                                                  
|        | 10.8    |  |  | Investment Agreement, dated July 26, 1999,
	as amended, by and between the Company and France telecom S.A
	(Incorporated by reference to Annex A to the proxy
	statement filed by NTL Incorporated on February 11, 2000,
	File No. 000-25691)                                                                                                                                                                                                                                                                                                                                                                                           
|        | 10.8(a) |  |  | Amendment, dated as of September 12, 2001,
	to the Investment Agreement, dated July 26, 1999, as
	amended, by and between the Company and France Telecom S.A.
	(Incorporated by reference to Exhibit 10.1 to the Quarterly
	Report on Form 10-Q, filed by NTL Incorporated on
	November 14, 2001, File No. 001-16183)                                                                                                                                                                                                                                                                                                                   
|        | 10.9    |  |  | Framework Agreement For The Provision Of IT
	Outsourcing Services, dated as of May 23, 2001, by and
	between NTL Group Limited and IBM United Kingdom Limited*                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

64



---



##### 



|        |       |  |  |                                                                                                                                                                                                                                                                                
|------- | ----- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       | 
|No.     |       | 
|        |       | 
|        | 10.10 |  |  | Amendment, dated as of April 5, 2001 to the
	Framework Agreement For The Provision of IT Outsourcing
	Services, dated as of May 23, 2001, by and between NTL
	Group Limited and IBM United Kingdom Limited*                                                                    
|        | 10.11 |  |  | Consent Letter, dated as of March 8, 2002,
	in respect of the Senior Credit Facility by and among NTL
	Communications Limited, NTL Investment Holdings Limited, NTL
	Communications Corp. and J.P. Morgan Europe Limited, on behalf
	of the lenders thereto*                   
|        | 10.12 |  |  | Consent Letter, dated as of March 8, 2002,
	in respect of the Working Capital Facility by and among NTL
	Communications Corp., NTL Communications Limited, NTL
	(UK) Group Inc. and J.P. Morgan Europe Limited, on behalf
	of the lenders thereto*                             
|        | 10.13 |  |  | Consent Letter, dated as of March 8, 2002,
	in respect of the Cablecom Credit Facility by and among NTL
	(Delaware), Inc., NTL Cablecom GmbH and subsidiaries and J.P.
	Morgan Europe Limited, on behalf of the lenders thereto*                                               
|        | 10.14 |  |  | Consent Letter, dated as of March 28, 2002,
	in respect of the Senior Credit Facility by and among NTL
	Communications Limited, NTL Investment Holdings, NTL
	Communications Corporation and J.P. Morgan Europe Limited, on
	behalf of the lenders thereto*                    
|        | 10.15 |  |  | Consent Letter, dated March 28, 2002, in
	respect of the Working Capital Facility by and among NTL
	Communications Corp., NTL Communications Limited, NTL
	(UK) Group Inc.*                                                                                                    
|        | 10.16 |  |  | Consent Letter, dated March 28, 2002, in
	respect of the Cablecom Credit Facility by and among NTL
	(Delaware), Inc., Cablecom GmbH and subsidiaries and J.P. Morgan
	Europe Limited, on behalf of the lenders thereto*                                                        
|        | 10.17 |  |  | Share Sale Agreement, dated February 22,
	2002, in respect of the sale of shares NTL Belgium Sprl Limited,
	by and among National Transcommunications Spain S.L., NTL
	Australia SPV, Inc., Macquarie Communications Infrastructure
	Holdings Pty Limited and NTL Incorporated*
|        | 11    |  |  | Statement Regarding Per Share Earnings of NTL
	Incorporated*                                                                                                                                                                                                                   
|        | 21    |  |  | Subsidiaries of the Registrant*                                                                                                                                                                                                                                                
|        | 23    |  |  | Consent of Ernst & Young LLP*                                                                                                                                                                                                                                                  



---



|   |                                                                              
|-- | -----------------------------------------------------------------------------
|*  | Filed herewith                                                               
|  
|** | We agree to furnish a copy of such agreement to
	the Commission upon request.

65



---



##### 



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

Dated: April 16, 2002



| |                 
| | ----------------
| | NTL INCORPORATED



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

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

66



---



##### 



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

|                                                 |  |                                                                      |  |               
|------------------------------------------------ |  | -------------------------------------------------------------------- |  | --------------
|Signature                                        |  | Title                                                                |  | Date          
|                                                 |  |                                                                      |  |               
|                                                
|/s/ BARCLAY KNAPPBarclay Knapp                   |  | President and Chief Executive Officer (Principal
	Executive Officer) |  | April 16, 2002
|                                                
|/s/ GEORGE S. BLUMENTHALGeorge S. Blumenthal     |  | Chairman of the Board and Treasurer                                  |  | April 16, 2002
|                                                
|/s/ JOHN F. GREGGJohn F. Gregg                   |  | Chief Financial Officer
	(Chief Financial Officer)                   |  | April 16, 2002
|                                                
|/s/ GREGG N. GORELICKGregg N. Gorelick           |  | Vice President-Controller
	(Principal Accounting Officer)            |  | April 16, 2002
|                                                
|/s/ SIDNEY R. KNAFELSidney R. Knafel             |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ TED H. MCCOURTNEYTed H. McCourtney           |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ ALAN J. PATRICOFAlan J. Patricof             |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ WARREN POTASHWarren Potash                   |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ MICHAEL S. WILLNERMichael S. Willner         |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ ROBERT T. GOADRobert T. Goad                 |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ JEAN-LOUIS VINCIGUERRAJean-Louis Vinciguerra |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ ERIC BOUVIEREric Bouvier                     |  | Director                                                             |  | April 16, 2002
|                                                
|/s/ BERNARD IZERABLEBernard Izerable             |  | Director                                                             |  | April 16, 2002

67



---



##### 



Form 10-KItem 14(a)(1) and
(2)

NTL Incorporated and Subsidiaries

Index to Consolidated Financial
Statements

and Financial Statement Schedule


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

|                                                             |                                              |  |     |     | 
|------------------------------------------------------------ | -------------------------------------------- |  | --- | --- | 
|Report of Independent Auditors                               |                                              |  | F-2 |    
|Consolidated Balance Sheets 
	December 31, 2001 and 2000    |                                              |  | F-3 |    
|Consolidated Statements of Operations                       |                                              |  |     |    
|                                                             | Years ended December 31, 2001, 2000 and 1999 |  |     | F-4 | 
|Consolidated Statement of Shareholders
	Equity (Deficiency) |                                              |  |     |    
|                                                             | Years ended December 31, 2001, 2000 and 1999 |  |     | F-5 | 
|Consolidated Statements of Cash Flows                       |                                              |  |     |    
|                                                             | Years ended December 31, 2001, 2000 and 1999 |  |     | F-7 | 
|Notes to Consolidated Financial Statements                   |                                              |  | F-9 |    

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

|                                                            |  |  |      | 
|----------------------------------------------------------- |  |  | ---- | 
|Schedule I  Condensed Financial
	Information of Registrant |  |  | F-45 | 
|Schedule II  Valuation and
	Qualifying Accounts            |  |  | F-50 | 

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

F-1



---



##### 



Report of Independent Auditors

The Board of Directors and Shareholders

NTL Incorporated


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

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

In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of NTL
Incorporated and Subsidiaries at December 31, 2001 and
2000, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion,
the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set
forth therein.

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



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

New York, New York

April 16, 2002


F-2



---



##### 



NTL Incorporated and Subsidiaries

Consolidated Balance Sheets

|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |          |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -------- | --------- | - | - | -------- | -------- | -
|                                                                                                                                                                                                                             |                                                                                                                                                             |              
|                                                                                                                                                                                                                             |                                                                                                                                                             | December 31, 
|                                                                                                                                                                                                                             |                                                                                                                                                             |              
|                                                                                                                                                                                                                             |                                                                                                                                                             | 2001          |          | 2000     
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |          
|                                                                                                                                                                                                                             |                                                                                                                                                             |              
|                                                                                                                                                                                                                             |                                                                                                                                                             | (in millions)
|Assets                                                                                                                                                                                                                      
|Current assets:                                                                                                                                                                                                              |                                                                                                                                                             |               |          |           |   |   |          |         
|                                                                                                                                                                                                                             | Cash and cash equivalents                                                                                                                                   |               | $        | 504.6     |   |   | $        | 579.4    |  
|                                                                                                                                                                                                                             | Marketable securities                                                                                                                                       |               |          |          |   |   |          | 60.0     |  
|                                                                                                                                                                                                                             | Accounts receivable  trade, less
	allowance for doubtful accounts of $133.8 (2001) and $141.4
	(2000)                                                      |               |          | 683.3     |   |   |          | 729.1    |  
|                                                                                                                                                                                                                             | Other                                                                                                                                                       |               |          | 365.2     |   |   |          | 422.9    |  
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|Total current assets                                                                                                                                                                                                         |                                                                                                                                                             |               | 1,553.1  |           |   |   | 1,791.4  |         
|Fixed assets, net                                                                                                                                                                                                            |                                                                                                                                                             |               | 12,573.3 |           |   |   | 12,693.0 |         
|Intangible assets, net                                                                                                                                                                                                       |                                                                                                                                                             |               | 1,985.6  |           |   |   | 13,061.0 |         
|Investments in and loans to affiliates, net                                                                                                                                                                                  |                                                                                                                                                             |               | 272.4    |           |   |   | 333.1    |         
|Other assets, net of accumulated amortization of
	$150.3 (2001) and $92.3 (2000)                                                                                                                                             |                                                                                                                                                             |               | 449.8    |           |   |   | 505.2    |         
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|Total assets                                                                                                                                                                                                                 |                                                                                                                                                             | $             | 16,834.2 |           |   | $ | 28,383.7 |         
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|Liabilities and shareholders
	(deficiency) equity                                                                                                                                                                          
|Current liabilities:                                                                                                                                                                                                         |                                                                                                                                                             |               |          |           |   |   |          |         
|                                                                                                                                                                                                                             | Accounts payable                                                                                                                                            |               | $        | 430.0     |   |   | $        | 506.3    |  
|                                                                                                                                                                                                                             | Accrued expenses and other                                                                                                                                  |               |          | 1,013.1   |   |   |          | 1,280.6  |  
|                                                                                                                                                                                                                             | Accrued construction costs                                                                                                                                  |               |          | 144.8     |   |   |          | 196.9    |  
|                                                                                                                                                                                                                             | Interest payable                                                                                                                                            |               |          | 303.9     |   |   |          | 151.3    |  
|                                                                                                                                                                                                                             | Deferred revenue                                                                                                                                            |               |          | 505.8     |   |   |          | 492.8    |  
|                                                                                                                                                                                                                             | Current portion of long-term debt                                                                                                                           |               |          | 17,666.1  |   |   |          | 12.6     |  
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|Total current liabilities                                                                                                                                                                                                    |                                                                                                                                                             |               | 20,063.7 |           |   |   | 2,640.5  |         
|Long-term debt                                                                                                                                                                                                               |                                                                                                                                                             |               | 102.3    |           |   |   | 15,044.1 |         
|Other                                                                                                                                                                                                                        |                                                                                                                                                             |               | 176.0    |           |   |   | 43.1     |         
|Commitments and contingent liabilities                                                                                                                                                                                       |                                                                                                                                                             |               |          |           |   |   |          |         
|Deferred income taxes                                                                                                                                                                                                        |                                                                                                                                                             |               | 260.9    |           |   |   | 205.4    |         
|Redeemable preferred stock  $.01 par
	value, plus accreted dividends; liquidation preference $2,834.5;
	less unamortized discount of $53.4 (2001) and $2.5 (2000);
	issued and outstanding 2.1 (2001) and 2.0 (2000) shares |                                                                                                                                                             |               | 2,773.7  |           |   |   | 2,083.2  |         
|Shareholders (deficiency) equity:                                                                                                                                                                                           |                                                                                                                                                             |               |          |           |   |   |          |         
|                                                                                                                                                                                                                             | Series preferred stock  $.01 par
	value; authorized 10.0 shares; liquidation preference $3,000.0;
	issued and outstanding 3.0 (2001) and 2.9 (2000) shares |               |          |          |   |   |          |         |  
|                                                                                                                                                                                                                             | Common stock  $.01 par value;
	authorized 800.0 shares; issued and outstanding 276.6 (2001) and
	272.1 (2000) shares                                       |               |          | 2.8       |   |   |          | 2.7      |  
|                                                                                                                                                                                                                             | Additional paid-in capital                                                                                                                                  |               |          | 13,720.0  |   |   |          | 13,764.7 |  
|                                                                                                                                                                                                                             | Accumulated other comprehensive (loss)                                                                                                                      |               |          | (1,072.8  | ) |   |          | (448.9   | )
|                                                                                                                                                                                                                             | (Deficit)                                                                                                                                                   |               |          | (19,192.4 | ) |   |          | (4,951.1 | )
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|                                                                                                                                                                                                                             |                                                                                                                                                             |               | (6,542.4 | )         |   |   | 8,367.4  |         
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         
|Total liabilities and shareholders
	(deficiency) equity                                                                                                                                                                     |                                                                                                                                                             | $             | 16,834.2 |           |   | $ | 28,383.7 |         
|                                                                                                                                                                                                                             |                                                                                                                                                             |               |          |           |   |   |          |         

See accompanying notes.

F-3



---



##### 



NTL Incorporated and Subsidiaries

Consolidated Statements of
Operations

|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |       |  
|------------------------------------------------- | -------------------------------- | ------------------------------------ | --------- | ------ | - | ---- | -------- | ------ | - | - | ------- | ----- | -
|                                                  |                                  |                                     
|                                                  |                                  | Year Ended December 31,             
|                                                  |                                  |                                     
|                                                  |                                  | 2001                                 |           | 2000   |   | 1999
|                                                  |                                  |                                      |           |        |   |     
|                                                  |                                  |                                     
|                                                  |                                  | (in millions, except per share data)
|Revenues                                          |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Consumer telecommunications and television        |                                  | $                                    | 2,514.6   |        |   | $    | 1,819.8  |        |   | $ | 834.3   |      
|Business telecommunications                       |                                  |                                      | 840.6     |        |   |      | 702.2    |        |   |   | 452.5   |      
|Broadcast transmission and other                  |                                  |                                      | 344.0     |        |   |      | 318.8    |        |   |   | 297.3   |      
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|                                                  |                                  |                                      | 3,699.2   |        |   |      | 2,840.8  |        |   |   | 1,584.1 |      
|Costs and expenses                                |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Operating expenses                                |                                  |                                      | 1,809.3   |        |   |      | 1,387.6  |        |   |   | 798.6   |      
|Selling, general and administrative expenses      |                                  |                                      | 1,181.6   |        |   |      | 1,109.1  |        |   |   | 574.6   |      
|Asset impairments                                 |                                  |                                      | 9,511.3   |        |   |      |         |        |   |   |        |      
|Franchise fees                                    |                                  |                                      |          |        |   |      |         |        |   |   | 16.5    |      
|Non-cash compensation                             |                                  |                                      | 30.6      |        |   |      |         |        |   |   |        |      
|Other charges                                     |                                  |                                      | 311.7     |        |   |      | 92.7     |        |   |   | 16.2    |      
|Corporate expenses                                |                                  |                                      | 66.8      |        |   |      | 47.5     |        |   |   | 29.4    |      
|Depreciation and amortization                     |                                  |                                      | 3,170.5   |        |   |      | 2,122.8  |        |   |   | 791.3   |      
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|                                                  |                                  |                                      | 16,081.8  |        |   |      | 4,759.7  |        |   |   | 2,226.6 |      
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Operating (loss)                                  |                                  |                                      | (12,382.6 | )      |   |      | (1,918.9 | )      |   |   | (642.5  | )    
|                                                 
|Other income (expense)                            |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Interest income and other, net                    |                                  |                                      | 51.1      |        |   |      | 72.5     |        |   |   | 67.8    |      
|Interest expense                                  |                                  |                                      | (1,440.9  | )      |   |      | (1,036.8 | )      |   |   | (680.7  | )    
|Share of (losses) from equity investments         |                                  |                                      | (244.6    | )      |   |      | (70.9    | )      |   |   | (18.4   | )    
|Other (losses) gains                              |                                  |                                      | (147.4    | )      |   |      |         |        |   |   | 493.1   |      
|Foreign currency transaction (losses) gains       |                                  |                                      | (13.7     | )      |   |      | (120.6   | )      |   |   | 12.7    |      
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|(Loss) before income taxes and extraordinary item |                                  |                                      | (14,178.1 | )      |   |      | (3,074.7 | )      |   |   | (768.0  | )    
|Income tax (expense) benefit                      |                                  |                                      | (63.2     | )      |   |      | 111.0    |        |   |   | 35.3    |      
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|(Loss) before extraordinary item                  |                                  |                                      | (14,241.3 | )      |   |      | (2,963.7 | )      |   |   | (732.7  | )    
|Loss from early extinguishment of debt            |                                  |                                      |          |        |   |      |         |        |   |   | (3.0    | )    
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Net (loss)                                        |                                  |                                      | (14,241.3 | )      |   |      | (2,963.7 | )      |   |   | (735.7  | )    
|Preferred stock dividends                         |                                  |                                      | (325.7    | )      |   |      | (194.0   | )      |   |   | (73.7   | )    
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Net (loss) available to common shareholders       |                                  | $                                    | (14,567.0 | )      |   | $    | (3,157.7 | )      |   | $ | (809.4  | )    
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|Basic and diluted net (loss) per common
	share:   |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|                                                  | (Loss) before extraordinary item |                                      | $         | (52.78 | ) |      | $        | (14.54 | ) |   | $       | (6.75 | )
|                                                  | Extraordinary item               |                                      |           |       |   |      |          |       |   |   |         | (0.03 | )
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|                                                  | Net (loss) per common share      |                                      | $         | (52.78 | ) |      | $        | (14.54 | ) |   | $       | (6.78 | )
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      
|                                                  | Weighted average shares          |                                      |           | 276.0  |   |      |          | 217.1  |   |   |         | 119.4 |  
|                                                  |                                  |                                      |           |        |   |      |          |        |   |   |         |      

See accompanying notes.

F-4



---



##### 



NTL Incorporated and Subsidiaries

Consolidated Statement of Shareholders
Equity (Deficiency)

|                                                        |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     |  | 
|------------------------------------------------------- | ----- | ---------------- | ---- | -------------- |  | ------ | - | --- |  |  | ----- | - |  | - | --- |  | 
|                                                        |       |                  |      |                |  |       
|                                                        |       | Series Preferred |      |               
|                                                        |       | Stock $.01 Par   |      | Common Stock  
|                                                        |       | Value            |      | $.01 Par Value
|                                                        |       |                  |      |               
|                                                        |       | Shares           |      | Par            |  | Shares |   | Par
|                                                        |       |                  |      |                |  |        |   |    
|                                                        |       |                 
|                                                        |       | (in millions)   
|Balance, December 31, 1998                              |       |                  | 0.2  |                |  | $      |  |     |  |  | 60.2  |   |  | $ | 0.6 | 
|Exercise of stock options                               |       |                  |      |                |  |        |   |     |  |  | 1.8   |   |  |   |    | 
|Exercise of warrants                                    |       |                  |      |                |  |        |   |     |  |  | 0.1   |   |  |   |    | 
|Common stock issued for cash                            |       |                  |      |                |  |        |   |     |  |  | 2.7   |   |  |   |    | 
|Preferred stock issued for cash                         |       |                  | 1.2  |                |  |        |  |     |  |  |       |   |  |   |     | 
|Warrants issued for cash                                |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Accreted dividends on preferred stock                   |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Accretion of discount on preferred stock                |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Redemption of series preferred stock                    |       |                  | (0.1 | )              |  |        |  |     |  |  |       |   |  |   |     | 
|Conversion of 7% Convertible Notes                      |       |                  |      |                |  |        |   |     |  |  | 7.3   |   |  |   | 0.1 | 
|Common stock issued for an acquisition                  |       |                  |      |                |  |        |   |     |  |  | 12.7  |   |  |   | 0.1 | 
|Stock options issued in connection with an
	acquisition |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Issuance of warrants                                    |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Stock splits                                            |       |                  |      |                |  |        |   |     |  |  | 47.6  |   |  |   | 0.5 | 
|Comprehensive loss:                                     |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Net loss for the year ended December 31, 1999           |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Currency translation adjustment                         |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|                                                        | Total |                  |      |                |  |        |   |     |  |  |       |   |  |   |     |  | 
|                                                        |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Balance, December 31, 1999                              |       |                  | 1.3  |                |  |        |  |     |  |  | 132.4 |   |  |   | 1.3 | 
|Exercise of stock options                               |       |                  |      |                |  |        |   |     |  |  | 2.3   |   |  |   |    | 
|Rescission of stock option exercises                    |       |                  |      |                |  |        |   |     |  |  | (0.2  | ) |  |   |     | 
|Exercise of warrants                                    |       |                  |      |                |  |        |   |     |  |  | 1.3   |   |  |   |    | 
|Common stock issued for cash                            |       |                  |      |                |  |        |   |     |  |  | 42.2  |   |  |   | 0.4 | 
|Preferred stock issued for cash                         |       |                  | 2.0  |                |  |        |   |     |  |  |       |   |  |   |     | 
|Common stock issued for an acquisition                  |       |                  |      |                |  |        |   |     |  |  | 84.9  |   |  |   | 0.9 | 
|Conversion of series preferred stock                    |       |                  | (0.5 | )              |  |        |  |     |  |  | 9.2   |   |  |   | 0.1 | 
|Preferred stock issued for dividends                    |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Accreted dividends on preferred stock                   |       |                  | 0.1  |                |  |        |  |     |  |  |       |   |  |   |     | 
|Accretion of discount on preferred stock                |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Comprehensive loss:                                     |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Net loss for the year ended December 31, 2000           |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Currency translation adjustment                         |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Unrealized net losses on investments                    |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|                                                        | Total |                  |      |                |  |        |   |     |  |  |       |   |  |   |     |  | 
|                                                        |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Balance, December 31, 2000                              |       |                  | 2.9  |                |  |        |  |     |  |  | 272.1 |   |  |   | 2.7 | 
|Exercise of stock options                               |       |                  |      |                |  |        |   |     |  |  | 1.1   |   |  |   |     | 
|Non-cash compensation                                   |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Accreted dividends on preferred stock                   |       |                  | 0.1  |                |  |        |   |     |  |  |       |   |  |   |     | 
|Accretion of discount on preferred stock                |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Conversion of 7% Convertible Notes                      |       |                  |      |                |  |        |   |     |  |  | 3.3   |   |  |   | 0.1 | 
|Common stock issued for an acquisition                  |       |                  |      |                |  |        |   |     |  |  | 0.1   |   |  |   |     | 
|Comprehensive loss:                                     |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Net loss for the year ended December 31, 2001           |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Currency translation adjustment                         |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Unrealized net losses on investments                    |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Unrealized net losses on derivatives                    |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|                                                        | Total |                  |      |                |  |        |   |     |  |  |       |   |  |   |     |  | 
|                                                        |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 
|Balance, December 31, 2001                              |       |                  | 3.0  |                |  | $      |  |     |  |  | 276.6 |   |  | $ | 2.8 | 
|                                                        |       |                  |      |                |  |        |   |     |  |  |       |   |  |   |     | 

F-5



---



##### 



NTL Incorporated and Subsidiaries


Consolidated Statement of Shareholders
Equity (Deficiency)  (Continued)

|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |   | 
|------------------------------------------------------- | ----- | ------------- | -------- | ------------- |  | ------------------ | --------- | ----------- | - | ----------- | -------- | --------- |  | - | ----- | - |  | - | ----- | - |  | - | --------- | - | 
|                                                        |       |               |          |               |  |                    |           |            
|                                                        |       |               |          |               |  | Accumulated Other  |           |            
|                                                        |       |               |          |               |  | Comprehensive Loss |           |            
|                                                        |       |               |          |               |  |                    |           |            
|                                                        |       |               |          |               |  |                    |           | Unrealized  |   | Unrealized  |          |          
|                                                        |       | Additional    |          |               |  | Foreign            |           | Net         |   | Net         |          |          
|                                                        |       | Paid-In       |          | Comprehensive |  | Currency           |           | Losses on   |   | Losses on   |          |          
|                                                        |       | Capital       |          | Loss          |  | Translation        |           | Investments |   | Derivatives |          | (Deficit)
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |          
|                                                        |       |              
|                                                        |       | (in millions)
|Balance, December 31, 1998                              |       | $             | 1,501.6  |               |  |                    |           |             |   | $           | 104.7    |           |  |   |       |   |  |   |       |   |  | $ | (1,251.7  | )
|Exercise of stock options                               |       |               | 41.3     |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Exercise of warrants                                    |       |               | 0.8      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Common stock issued for cash                            |       |               | 250.0    |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Preferred stock issued for cash                         |       |               | 1,233.8  |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Warrants issued for cash                                |       |               | 16.2     |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accreted dividends on preferred stock                   |       |               | (44.1    | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accretion of discount on preferred stock                |       |               | (0.3     | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Redemption of series preferred stock                    |       |               | (125.3   | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Conversion of 7% Convertible Notes                      |       |               | 269.2    |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Common stock issued for an acquisition                  |       |               | 971.3    |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Stock options issued in connection with an
	acquisition |       |               | 6.6      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Issuance of warrants                                    |       |               | 4.5      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Stock splits                                            |       |               | (0.5     | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Comprehensive loss:                                     |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 1999           |       |               |          |               |  | $                  | (735.7    | )           |   |             |          |           |  |   |       |   |  |   |       |   |  |   | (735.7    | )
|Currency translation adjustment                         |       |               |          |               |  |                    | (106.8    | )           |   |             | (106.8   | )         |  |   |       |   |  |   |       |   |  |   |           |  
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|                                                        | Total |               |          |               |  |                    | $         | (842.5      | ) |             |          |           |  |   |       |   |  |   |       |   |  |   |           |   | 
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 1999                              |       |               | 4,125.1  |               |  |                    |           |             |   |             | (2.1     | )         |  |   |       |   |  |   |       |   |  |   | (1,987.4  | )
|Exercise of stock options                               |       |               | 36.3     |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Rescission of stock option exercises                    |       |               | (1.1     | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Exercise of warrants                                    |       |               | 9.0      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Common stock issued for cash                            |       |               | 2,327.2  |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Preferred stock issued for cash                         |       |               | 1,862.0  |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Common stock issued for an acquisition                  |       |               | 5,487.4  |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Conversion of series preferred stock                    |       |               | 7.5      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Preferred stock issued for dividends                    |       |               | 9.4      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accreted dividends on preferred stock                   |       |               | (97.8    | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accretion of discount on preferred stock                |       |               | (0.3     | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Comprehensive loss:                                     |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 2000           |       |               |          |               |  | $                  | (2,963.7  | )           |   |             |          |           |  |   |       |   |  |   |       |   |  |   | (2,963.7  | )
|Currency translation adjustment                         |       |               |          |               |  |                    | (432.6    | )           |   |             | (432.6   | )         |  |   |       |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments                    |       |               |          |               |  |                    | (14.2     | )           |   |             |          |           |  | $ | (14.2 | ) |  |   |       |   |  |   |           |  
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|                                                        | Total |               |          |               |  |                    | $         | (3,410.5    | ) |             |          |           |  |   |       |   |  |   |       |   |  |   |           |   | 
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 2000                              |       |               | 13,764.7 |               |  |                    |           |             |   |             | (434.7   | )         |  |   | (14.2 | ) |  |   |       |   |  |   | (4,951.1  | )
|Exercise of stock options                               |       |               | 13.0     |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Non-cash compensation                                   |       |               | 30.6     |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accreted dividends on preferred stock                   |       |               | (195.5   | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Accretion of discount on preferred stock                |       |               | (25.3    | )             |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Conversion of 7% Convertible Notes                      |       |               | 128.2    |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Common stock issued for an acquisition                  |       |               | 4.3      |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Comprehensive loss:                                     |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 2001           |       |               |          |               |  | $                  | (14,241.3 | )           |   |             |          |           |  |   |       |   |  |   |       |   |  |   | (14,241.3 | )
|Currency translation adjustment                         |       |               |          |               |  |                    | (607.8    | )           |   |             | (607.8   | )         |  |   |       |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments                    |       |               |          |               |  |                    | (1.1      | )           |   |             |          |           |  |   | (1.1  | ) |  |   |       |   |  |   |           |  
|Unrealized net losses on derivatives                    |       |               |          |               |  |                    | (15.0     | )           |   |             |          |           |  |   |       |   |  | $ | (15.0 | ) |  |   |           |  
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|                                                        | Total |               |          |               |  |                    | $         | (14,865.2   | ) |             |          |           |  |   |       |   |  |   |       |   |  |   |           |   | 
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 2001                              |       | $             | 13,720.0 |               |  |                    |           |             |   | $           | (1,042.5 | )         |  | $ | (15.3 | ) |  | $ | (15.0 | ) |  | $ | (19,192.4 | )
|                                                        |       |               |          |               |  |                    |           |             |   |             |          |           |  |   |       |   |  |   |       |   |  |   |           |  

See accompanying notes.

F-6



---



##### 



NTL Incorporated and Subsidiaries


Consolidated Statement of Shareholders
Equity (Deficiency)  (Continued)

NTL Incorporated and Subsidiaries

Consolidated Statements of Cash
Flows

|                                                                                          |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |        |        |  
|----------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | ------- | ----- | ---- | --------- | ------- | ------ | - | -------- | ------ | ------ | -
|                                                                                          |                                                                                                          |                           
|                                                                                          |                                                                                                          | Year Ended December 31,   
|                                                                                          |                                                                                                          |                           
|                                                                                          |                                                                                                          | 2001                       |           | 2000    |       | 1999
|                                                                                          |                                                                                                          |                            |           |         |       |     
|                                                                                          |                                                                                                          |                           
|                                                                                          |                                                                                                          | (in millions)             
|Operating activities                                                                      |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |       
|Net loss                                                                                  |                                                                                                          | $                          | (14,241.3 | )       |       | $    | (2,963.7  | )       |        | $ | (735.7   | )     
|Adjustment to reconcile net loss to net cash
	(used in) provided by operating activities: |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |       
|                                                                                          | Depreciation and amortization                                                                            |                            |           | 3,170.5 |       |      |           | 2,122.8 |        |   |          | 791.3  |       
|                                                                                          | Non-cash compensation                                                                                    |                            |           | 30.6    |       |      |           |        |        |   |          |       |       
|                                                                                          | Non-cash restructuring charge                                                                            |                            |           | 57.9    |       |      |           |        |        |   |          |       |       
|                                                                                          | Asset impairments                                                                                        |                            |           | 9,511.3 |       |      |           |        |        |   |          |       |       
|                                                                                          | Equity in net losses of unconsolidated
	subsidiaries                                                     |                            |           | 244.6   |       |      |           | 70.9    |        |   |          | 18.4   |       
|                                                                                          | Loss from early extinguishment of debt                                                                   |                            |           |        |       |      |           |        |        |   |          | 3.0    |       
|                                                                                          | (Gain) loss on sale of assets                                                                            |                            |           | 147.4   |       |      |           |        |        |   |          | (493.1 | )     
|                                                                                          | Provision for losses on receivables                                                                      |                            |           | 97.9    |       |      |           | 98.9    |        |   |          | 46.2   |       
|                                                                                          | Deferred income taxes                                                                                    |                            |           | 61.1    |       |      |           | (112.1  | )      |   |          | (37.3  | )     
|                                                                                          | Amortization of original issue discount                                                                  |                            |           | 284.9   |       |      |           | 473.4   |        |   |          | 451.4  |       
|                                                                                          | Other                                                                                                    |                            |           | 46.9    |       |      |           | (69.5   | )      |   |          | (29.0  | )     
|                                                                                          | Changes in operating assets and liabilities, net
	of effect from business acquisitions and dispositions: |                            |           |         |       |      |           |         |        |   |          |        |       
|                                                                                          |                                                                                                          | Accounts receivable        |           |         | (45.9 | )    |           |         | (366.6 | ) |          |        | (139.4 | )
|                                                                                          |                                                                                                          | Other current assets       |           |         | 56.4  |      |           |         | (69.5  | ) |          |        | (38.9  | )
|                                                                                          |                                                                                                          | Other assets               |           |         | 59.6  |      |           |         | 43.2   |   |          |        | (4.9   | )
|                                                                                          |                                                                                                          | Accounts payable           |           |         | (34.5 | )    |           |         | (83.7  | ) |          |        | 43.8   |  
|                                                                                          |                                                                                                          | Accrued expenses and other |           |         | (73.2 | )    |           |         | 379.3  |   |          |        | 126.2  |  
|                                                                                          |                                                                                                          | Deferred revenue           |           |         | 28.0  |      |           |         | 186.4  |   |          |        | 71.9   |  
|                                                                                          |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |       
|Net cash (used in) provided by operating
	activities                                      |                                                                                                          |                            | (597.8    | )       |       |      | (290.2    | )       |        |   | 73.9     |       
|Investing activities                                                                      |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |       
|Acquisitions, net of cash acquired                                                        |                                                                                                          |                            | (26.2     | )       |       |      | (10,940.0 | )       |        |   | (1,128.3 | )     
|Payment of deferred purchase price                                                        |                                                                                                          |                            |          |         |       |      | (2.9      | )       |        |   |         |       
|Purchase of fixed assets                                                                  |                                                                                                          |                            | (1,946.1  | )       |       |      | (2,257.0  | )       |        |   | (1,211.3 | )     
|Investment in and loans to affiliates                                                     |                                                                                                          |                            | (137.8    | )       |       |      | (393.4    | )       |        |   | (20.8    | )     
|Increase in other assets                                                                  |                                                                                                          |                            | (80.6     | )       |       |      | (129.1    | )       |        |   | (58.8    | )     
|Proceeds from sales of assets                                                             |                                                                                                          |                            | 45.5      |         |       |      |          |         |        |   | 692.5    |       
|Due from CoreComm Limited                                                                 |                                                                                                          |                            | (15.0     | )       |       |      |          |         |        |   |         |       
|Purchase of marketable securities                                                         |                                                                                                          |                            | (9.9      | )       |       |      | (158.4    | )       |        |   | (747.4   | )     
|Proceeds from sales of marketable securities                                              |                                                                                                          |                            | 70.3      |         |       |      | 452.6     |         |        |   | 676.6    |       
|                                                                                          |                                                                                                          |                            |           |         |       |      |           |         |        |   |          |       
|Net cash (used in) investing activities                                                   |                                                                                                          |                            | (2,099.8  | )       |       |      | (13,428.2 | )       |        |   | (1,797.5 | )     

F-7



---



##### 



NTL Incorporated and Subsidiaries


Consolidated Statements of Cash
Flows  (Continued)

|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|----------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | -------- | - |  | - | ------- | -
|                                                                              |  |                        
|                                                                              |  | Year Ended December 31,
|                                                                              |  |                        
|                                                                              |  | 2001                    |         | 2000 |  | 1999
|                                                                              |  |                         |         |      |  |     
|                                                                              |  |                        
|                                                                              |  | (in millions)          
|Financing activities                                                          |  |                         |         |      |  |      |          |   |  |   |         |  
|Proceeds from borrowings, net of financing costs                              |  |                         | 3,110.7 |      |  |      | 6,870.1  |   |  |   | 3,019.4 |  
|Proceeds from issuance of preferred stock and
	warrants                       |  |                         |        |      |  |      | 1,862.0  |   |  |   | 1,250.0 |  
|Proceeds from issuance of common stock                                        |  |                         |        |      |  |      | 2,327.6  |   |  |   | 250.0   |  
|Proceeds from issuance of redeemable preferred
	stock                         |  |                         |        |      |  |      | 1,850.0  |   |  |   |        |  
|Redemption of preferred stock                                                 |  |                         |        |      |  |      |         |   |  |   | (125.3  | )
|Principal payments                                                            |  |                         | (489.8  | )    |  |      | (1,303.0 | ) |  |   | (758.2  | )
|Cash released from (placed in) escrow for debt
	repayment                     |  |                         |        |      |  |      | 77.5     |   |  |   | (87.0   | )
|Proceeds from exercise of stock options and
	warrants                         |  |                         | 13.0    |      |  |      | 44.2     |   |  |   | 42.1    |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Net cash provided by financing activities                                     |  |                         | 2,633.9 |      |  |      | 11,728.4 |   |  |   | 3,591.0 |  
|Effect of exchange rate changes on cash                                       |  |                         | (11.1   | )    |  |      | (27.8    | ) |  |   | (6.5    | )
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|(Decrease) increase in cash and cash equivalents                              |  |                         | (74.8   | )    |  |      | (2,017.8 | ) |  |   | 1,860.9 |  
|Cash and cash equivalents at beginning of year                                |  |                         | 579.4   |      |  |      | 2,597.2  |   |  |   | 736.3   |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Cash and cash equivalents at end of year                                      |  | $                       | 504.6   |      |  | $    | 579.4    |   |  | $ | 2,597.2 |  
|                                                                              |  |                         |         |      |  |      |          |   |  |   |         |  
|Supplemental disclosure of cash flow
	information                             |  |                         |         |      |  |      |          |   |  |   |         |  
|Cash paid during the year for interest exclusive
	of amounts capitalized      |  | $                       | 947.9   |      |  | $    | 495.0    |   |  | $ | 180.3   |  
|Income taxes paid                                                             |  |                         | 13.5    |      |  |      | 6.7      |   |  |   | 2.4     |  
|Supplemental schedule of non-cash financing
	activities                       |  |                         |         |      |  |      |          |   |  |   |         |  
|Accretion of dividends and discount on preferred
	stock                       |  | $                       | 220.8   |      |  | $    | 98.1     |   |  | $ | 44.4    |  
|Conversion of Convertible Notes, net of
	unamortized deferred financing costs |  |                         | 128.3   |      |  |      |         |   |  |   | 269.3   |  
|Common stock and stock options issued for
	acquisitions                       |  |                         | 4.3     |      |  |      | 5,488.3  |   |  |   | 978.0   |  
|Redeemable preferred stock issued for investment
	in affiliates               |  |                         | 518.0   |      |  |      |         |   |  |   |        |  
|Conversion of series preferred stock                                          |  |                         |        |      |  |      | 7.6      |   |  |   |        |  

See accompanying notes.

F-8



---



##### 



NTL Incorporated and Subsidiaries

Notes to Consolidated Financial
Statements

1.     Corporate
Restructuring and Business

Corporate
Restructuring

On May 18, 2000, NTL Incorporated completed
a corporate restructuring to create a holding company structure.
The formation of the holding company was part of NTL
Incorporateds acquisition of certain assets of
Cable & Wireless Communications plc (CWC).
The holding company restructuring was accomplished through a
merger so that all the stockholders of NTL Incorporated at the
effective time of the merger became stockholders of the new
holding company, and NTL Incorporated became a subsidiary of the
new holding company. The new holding company has taken the name
NTL Incorporated (and together with its subsidiaries, the
Company) and the holding companys subsidiary
simultaneously changed its name to NTL (Delaware), Inc. (and
together with its subsidiaries, NTL Delaware).

Business

The Company, through its subsidiaries, owns and
operates broadband communications networks for telephone, cable
television and Internet services in the UK, Ireland, and
Switzerland, and transmission networks for television and radio
broadcasting in the UK. The Companys wholly-owned
subsidiary that operates in France was merged into an equity
investee in November 2001. The Companys television and
radio broadcasting business in Australia was sold in April 2002.
Based on revenues and identifiable assets, the Companys
predominant lines of business are consumer services, business
services and broadcast transmission and related services in the
UK. Consumer services include telephony, cable television,
Internet access and interactive services. Business services
include telephony, national and international wholesale carrier
telecommunications, and radio communications services for the
emergency services community. Broadcast transmission and related
services include digital and analog television and radio
broadcasting, rental of antenna space on the Companys
owned and leased towers and sites and associated services, and
satellite and media services.

Recapitalization
Process and Ability to Continue Operations

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

In addition, the Companys UK credit
facilities are fully drawn and the Companys Swiss
subsidiaries are currently unable to draw the remaining undrawn
amounts under the Cablecom credit facility. NTL Communications
Corp., a wholly-owned indirect subsidiary of the Company, did
not pay cash interest on certain series of its notes that was
due on April 1, 2002 and April 15, 2002. NTL
Incorporated and NTL (Delaware), Inc. also did not pay cash
interest and related fees on a series of their notes that was
due on April 15, 2002. As of December 31, 2001, the
Company had approximately $505 million in cash and cash
equivalents on hand and, on April 4, 2002, received
approximately $303 million net cash proceeds from the

F-9



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

sale of its Australian business. The Company will
require cash for working capital and capital expenditures in
2002. If the Company and its subsidiaries make scheduled and
overdue interest payments on their notes, then the Company will
not have sufficient cash resources to meet its liquidity needs
through the third quarter of 2002.

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

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

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

During the recapitalization process, NTLs
operations will continue uninterrupted, customer service will be
unaffected, suppliers will be paid in the ordinary course and
NTLs management will remain in place.

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

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

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

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

F-10



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

Current preferred stockholders other than France
Telecom, would receive approximately 3.2% and current common
stockholders, other than France Telecom, would receive
approximately 10.3% of the primary equity of NTL Euroco. It is
contemplated that, subject to the consummation of the
recapitalization, France Telecom would also receive our 27%
interest in Noos, pursuant to a pledge of such interests to
France Telecom given at the time of its acquisition. During the
recapitalization process, the Company has attempted to maintain
normal and regular trade terms with its suppliers and customers.
There can be no assurance that the Companys suppliers will
continue to provide normal trade credit or credit on acceptable
terms, if at all, or that customers will continue to do business
or enter into new business with the Company. See also Risk
Factors for a summary of risks related to the
Companys business in general and the recapitalization
process in particular.

Bank
Waivers

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

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

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



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

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

F-11



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

to the UK credit facilities. In connection with
the amendments to the waivers, the Company affirmed the
provisions of the initial waivers and in addition, the Company
agreed, among other things, to:



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

The amended waivers prevent the Company from
making an exchange offer with respect to its outstanding notes
or from entering into an agreement with bondholders without the
consent of the lenders under each of the credit facilities. The
amended waivers also prohibit the Company from commencing
voluntary dissolution proceedings, including proceedings under
Chapter 11 of the U.S. bankruptcy code, without the consent
of these lenders. Copies of the waivers are filed as exhibits to
this Form 10-K.

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

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

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

Interest
Payments on Public Notes

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

F-12



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

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

Inability to
Pay Dividends On or Redeem Preferred Stock

On February 4, 2002, the Company announced
that it would not declare or pay dividends on its 13% Senior
Redeemable Exchangeable Preferred Stock. The Company did not
make the dividend payments due on February 15, 2002 of
$6.0 million in respect of the 13% preferred stock. In
addition, the Company did not pay dividends on its 5% cumulative
participating convertible preferred stock held by France Telecom
on December 31, 2001 of $37.0 million and
March 31, 2002 of $37.5 million, or on its cumulative
convertible preferred stock held by France Telecom and a group
of commercial banks on December 31, 2001 of
$24.9 million and March 26, 2002 of
$24.1 million. Historically, payment of dividends has been
made in additional shares of preferred stock in the case of the
13% preferred stock, the 5% cumulative participating preferred
stock and the cumulative convertible preferred stock. The
Company did not pay these dividends due to a lack of available
surplus under Delaware law. Under Delaware law, the Company
cannot pay dividends on or redeem its capital stock, including
its preferred stock, unless it has available surplus.

Pursuant to the terms of the 13% preferred stock,
the unpaid dividends will continue to accrue without interest
until declared and paid. Pursuant to the terms of the 5%
cumulative convertible preferred stock and the cumulative
convertible preferred stock, the unpaid dividends will continue
to accrue without interest until declared and paid, together
with an additional cash dividend on the amount so unpaid at a
rate of 2% per quarter for as long as the dividends remain
unpaid. The failure to declare these dividends is not a default
under any of the Companys existing agreements. With
respect to the 13% preferred stock and 5% cumulative convertible
preferred stock, if dividends remain unpaid for six quarters,
the holders of each such series shall have the right to vote
separately as a class on all matters voted on by NTL
Incorporated shareholders and shall

F-13



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

have the right, along with other holders of
preferred stock with similar default voting rights, to elect two
directors to the Companys board.

In addition, the lack of surplus means that the
Company does not expect to be able to redeem its Variable Coupon
Redeemable Preferred Stock, Series A, which is held by
France Telecom, when it becomes mandatorily redeemable, to the
extent funds are available, on May 18, 2002. If the Company
fails to redeem this preferred stock on May 18, 2002 as we
expect, the holders of such preferred stock will have the right,
along with other holders of preferred stock with similar default
voting rights, to elect two directors to our board and shall
have the right to vote separately as a class, on all matters
brought to NTL Incorporated shareholders.

At the time of issuance of the Variable Coupon
Redeemable Preferred Stock, the Company pledged its shares of
Noos to France Telecom to secure the mandatory redemption
obligation.

Credit Rating
Downgrades

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

Sale of NTL
Australia

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

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

Uncertainty
Related to Suppliers

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

Basis of
presentation

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

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

F-14



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

2.     Significant
Accounting Policies

Use of
Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Such estimates and
assumptions impact, among others, the following: the amount of
uncollectible accounts and notes receivable, the amount to be
paid to terminate certain agreements included in restructuring
costs, the amount to be paid for other liabilities, the
Companys pension expense and pension funding requirements
and estimates related to the value of investments, long-lived
assets and goodwill. Actual results could differ from those
estimates.

Principles of
Consolidation

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

Reclassification

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

Net (Loss)
Per Share

The Company reports its basic and diluted net
(loss) per share in accordance with Financial Accounting
Standards Board (FASB) Statement of Financial
Accounting Standards (SFAS) No. 128,
Earnings Per Share, as adjusted for stock splits.
Stock options, warrants and convertible securities are excluded
from the calculation of net loss per common share as their
effect would be antidilutive.

Foreign
Currency Translation

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

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

Cash
Equivalents

Cash equivalents are short-term highly liquid
investments purchased with a maturity of three months or less.
Cash equivalents were $343.7 million and
$256.2 million at December 31, 2001 and 2000,
respectively, which consisted primarily of U.S. Treasury bills
(2000 only), bank time deposits and corporate commercial paper.
At December 31, 2001 and 2000, $190.2 million and
$68.5 million, respectively, of the cash equivalents were
denominated in foreign currencies.

Marketable
Securities

Marketable securities are classified as
available-for-sale, which are carried at fair value. Unrealized
holding gains and losses on securities, net of tax, are carried
as a component of accumulated other

F-15



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

comprehensive (loss). The amortized cost of debt
securities is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization is
included in interest income. Realized gains and losses and
declines in value judged to be other than temporary will be
included in interest income. The cost of securities sold or
matured is based on the specific identification method. Interest
on securities is included in interest income.

Marketable securities at December 31, 2000
consisted of corporate commercial paper. During the years ended
December 31, 2001, 2000 and 1999, there were no realized
gains or losses on sales of securities. All of the marketable
securities as of December 31, 2000 had a contractual
maturity of less than one year.

Fixed
Assets

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

Intangible
Assets

Intangible assets include goodwill, license
acquisition costs, customer lists and other intangibles.
Goodwill is the excess of the purchase price over the fair value
of net assets acquired in business combinations accounted for as
purchases. Goodwill is amortized on a straight-line basis over
the periods benefited of 3, 10, 15 or 30 years. License
acquisition costs represent the portion of purchase price
allocated to the cable television and telecommunications
licenses acquired in business combinations. License acquisition
costs are amortized on a straight-line basis over the remaining
lives of the licenses at acquisition, which vary from
approximately two years to 23 years. Customer lists
represent the portion of the purchase price allocated to the
value of the customer base. Customer lists are amortized on a
straight-line basis over 3 or 5 years. Other intangibles
include the portion of the purchase price allocated to the value
of transmission and services contracts and the value of
workforce in place. Transmission and service contracts are
amortized on a straight-line basis over the period benefited of
8 years or 12 years. Workforce in place is amortized
over the period benefited of four years. The Company continually
reviews the recoverability of the carrying value of these assets
using the same methodology that it uses for the evaluation of
its other long-lived assets.

Valuation of
Long-Lived Assets

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

Equity Method
Investments

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

F-16



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

Deferred
Financing Costs

Deferred financing costs are incurred in
connection with the issuance of debt and are amortized over the
term of the related debt.

Capitalized
Interest

Interest is capitalized as a component of the
cost of fixed assets constructed. In 2001, 2000 and 1999, total
interest incurred was $1,508.6 million,
$1,131.9 million and $722.5 million, respectively, of
which interest of $67.7 million, $95.1 million and
$41.8 million, respectively, was capitalized.

Revenue
Recognition

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

Cable
Television System Costs, Expenses and Revenues

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

Advertising
Expense

The Company charges the cost of advertising to
expense as incurred. Advertising costs were $91.0 million,
$113.0 million and $35.9 million in 2001, 2000 and
1999, respectively.

Stock-Based
Compensation

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

Derivative
Financial Instruments

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

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

3.     Recent
Accounting Pronouncements

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, effective for the Company on
January 1, 2002. This Statement supercedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of and

F-17



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

other related accounting guidance. The adoption
of this new standard had no significant effect on the results of
operations, financial condition or cash flows of the Company,
except that it will require the Company to treat NTL Australia
as a discontinued operation beginning in the first quarter of
2002.

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

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the
initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination that is
completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets.
Instead, these assets must be reviewed annually (or more
frequently under certain conditions) for impairment in
accordance with this statement. This impairment test uses a fair
value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. The Company adopted SFAS No. 142 on
January 1, 2002. In light of the significant impairment
charge that the Company recorded in 2001, the Company does not
expect that the adoption of this new standard will have a
significant effect on the results of operations, financial
condition or cash flows of the Company. Amortization expense in
2001 related to goodwill and other indefinite lived intangible
assets was $1,430.2 million. The Company expects that
amortization expense in 2002 will not be significant.

4.     Asset
Impairments

As of December 31, 2001, the Company
performed an analysis of the carrying values of its long-lived
assets including goodwill. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and
record valuations in the telecommunications industry. This
analysis was initiated because of the decline in the
Companys stock price and significantly lower valuations
for companies within its industry. Additionally, at the time of
the Companys analysis, the book value of the
Companys net assets significantly exceeded its market
capitalization. Accordingly, the Company performed an analysis
of the recoverability of its long-lived assets and associated
goodwill. The fair value of the Companys assets was
determined by discounting the Companys estimates of the
expected future cash flows related to these assets when the
non-discounted cash flows indicated that the long-lived assets
would not be recoverable. The Company recorded a write-down of
$9,511.3 million in the fourth quarter of 2001 as a result of
this analysis and review. The total charge included goodwill of
$8,840.5 million, license acquisition costs of
$58.8 million, customer lists of $9.1 million, other
intangibles of $14.9 million, investments in affiliates of
$463.7 million and other assets of $124.3 million. The
aggregate asset impairment charge of $9,511.3 million
related to the Companys business segments as follows:
$7,388.8 million Consumer, $2,113.0 million Business
and $9.5 million Broadcast.

5.     Acquisitions

On March 28, 2000, the Company acquired the
cable assets of the Cablecom Group (Cablecom) in
Switzerland. On May 30, 2000, the Company acquired the
consumer cable telephone, Internet and television operations of
CWC in the UK (ConsumerCo). The acquisitions were
accounted for as purchases, and accordingly, the net assets and
results of operations of the acquired businesses have been
included in the consolidated financial statements from the dates
of acquisition.

In March 1999, the Company purchased Diamond
Communications Plc (Diamond) for an aggregate
purchase price of $984.6 million, including intangibles
aggregating $1,323.0 million. In April 1999, a

F-18



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

subsidiary of the Company purchased the
Australian National Transmission Network for an aggregate
purchase price of $425.8 million, including intangibles of
$220.6 million. In July 1999, the Company acquired
Cablelink Limited (Cablelink) for an aggregate
purchase price of $700.5 million, including intangibles of
$669.6 million. In August and December 1999, the Company
acquired the 1G Networks of France Telecom for an aggregate
purchase price of $61.9 million, including intangibles of
$64.7 million. In September 1999, the Company acquired the
shares of Workplace Technologies plc, for an aggregate purchase
price of $175.0 million, including intangibles of
$176.9 million. The net assets and results of operations of
Diamond, the Australian National Transmission Network,
Cablelink, the 1G Networks and Workplace Technologies plc
are included in the consolidated financial statements from their
respective dates of acquisition.

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

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

|                                             |  |                         |          |      |  |   |          |  
|-------------------------------------------- |  | ----------------------- | -------- | ---- |  | - | -------- | -
|                                             |  |                        
|                                             |  | Year ended December 31,
|                                             |  |                        
|                                             |  | 2000                    |          | 1999
|                                             |  |                         |          |     
|Total revenue                                |  | $                       | 3,403.3  |      |  | $ | 3,295.8  |  
|(Loss) before extraordinary item             |  |                         | (3,653.1 | )    |  |   | (2,803.1 | )
|Net (loss)                                   |  |                         | (3,653.1 | )    |  |   | (2,806.1 | )
|Basic and diluted net loss per common share: |  |                         |          |      |  |   |          |  
|(Loss) before extraordinary item             |  |                         | (14.53   | )    |  |   | (12.46   | )
|Net (loss)                                   |  |                         | (14.53   | )    |  |   | (12.47   | )

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

6.     Fixed
Assets

Fixed assets consist of:

|                         |  |               |          |      |  |   |          |  
|------------------------ |  | ------------- | -------- | ---- |  | - | -------- | -
|                         |  |              
|                         |  | December 31, 
|                         |  |              
|                         |  | 2001          |          | 2000
|                         |  |               |          |     
|                         |  |              
|                         |  | (in millions)
|Operating equipment      |  | $             | 13,626.2 |      |  | $ | 11,753.2 |  
|Other equipment          |  |               | 911.4    |      |  |   | 1,145.2  |  
|Construction-in-progress |  |               | 1,326.2  |      |  |   | 1,611.1  |  
|                         |  |               |          |      |  |   |          |  
|                         |  |               | 15,863.8 |      |  |   | 14,509.5 |  
|Accumulated depreciation |  |               | (3,290.5 | )    |  |   | (1,816.5 | )
|                         |  |               |          |      |  |   |          |  
|                         |  | $             | 12,573.3 |      |  | $ | 12,693.0 |  
|                         |  |               |          |      |  |   |          |  

F-19



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

Depreciation expense (including amortization of
assets held under capital leases) for the years ended
December 31, 2001, 2000 and 1999 was $1,549.7 million,
$996.6 million and $490.3 million, respectively.

7.     Intangible
Assets

Intangible assets consist of:

|                                                                                               |  |               |         |      |  |   |          | 
|---------------------------------------------------------------------------------------------- |  | ------------- | ------- | ---- |  | - | -------- | 
|                                                                                               |  |              
|                                                                                               |  | December 31, 
|                                                                                               |  |              
|                                                                                               |  | 2001          |         | 2000
|                                                                                               |  |               |         |     
|                                                                                               |  |              
|                                                                                               |  | (in millions)
|Goodwill, net of accumulated amortization of
	$81.7 (2001) and $1,103.6 (2000)                 |  | $             | 1,715.5 |      |  | $ | 12,523.0 | 
|License acquisition costs, net of accumulated
	Amortization of $125.2 (2001) and $215.8 (2000) |  |               | 54.7    |      |  |   | 139.2    | 
|Customer lists, net of accumulated amortization
	of $169.3 (2001) and $110.7 (2000)            |  |               | 168.8   |      |  |   | 318.2    | 
|Other intangibles, net of accumulated
	amortization of $17.3 (2001) and $13.8 (2000)           |  |               | 46.6    |      |  |   | 80.6     | 
|                                                                                               |  |               |         |      |  |   |          | 
|                                                                                               |  | $             | 1,985.6 |      |  | $ | 13,061.0 | 
|                                                                                               |  |               |         |      |  |   |          | 

Amortization of intangible and other assets
charged to expense for the years ended December 31, 2001,
2000 and 1999 was $1,620.8 million, $1,126.2 million
and $301.0 million, respectively.

8.     Investments in
and Loans to Affiliates

On May 18, 2001, in partnership with Morgan
Stanley Dean Witter Private Equity, the Company completed its
acquisition of France Telecoms 49.9% stake in
Suez-Lyonnaise Telecom, the operator of the Noos broadband
network in France. Pursuant to the acquisition agreement, the
Company acquired 27% of Noos in exchange for shares of preferred
stock. The preferred stock was valued at $518.0 million,
the fair value at the date of acquisition. An additional
17.7 million
($15.8 million) purchase consideration is due to France
Telecom on transfer to Noos of specified networks following
receipt of regulatory approvals, which would be payable in May
2002. The Companys 27% interest in Noos is pledged to
France Telecom to secure the mandatory redemption obligation
under its Variable Coupon Redeemable Preferred Stock,
Series A.

On November 23, 2001, the Companys
indirect wholly-owned subsidiary that owned the Companys
cable business in France was merged into Noos. The Company
received
72.6 million
($63.7 million) including a note for
37.5 million
($32.9 million) which is due on November 23, 2006. The
Company recorded a loss on this transaction of
$58.9 million, which is included in other losses.

The Company has investments in various companies
and joint ventures which are accounted for under either the
equity method or the cost method. The Companys significant
equity investments include its 27% interest in Noos S.A., the
market leading French broadband company, which offers analog and
digital cable television, high speed Internet and telephone
services, its 34.01% interest in Svenska Bredbandsbolaget
(B2), a company based in Sweden, which provides
always on, low cost access to a high-capacity
broadband network that provides transmission, both to and from
the customer, at the same speed and at the same time, and its
50% interest in eKabel InvestCo, which owns 65% of eKabel L.P.,
the largest cable television network in the German province of
Hessen. The Company recorded a write-down of $463.7 million

F-20



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

related to its investments in and loans to
affiliates in the fourth quarter of 2001. The Companys
investments in and loans to affiliates are as follows:

|                         |  |                       |       |         |  |           |       |         |  |  |       |   |  |   |       | 
|------------------------ |  | --------------------- | ----- | ------- |  | --------- | ----- | ------- |  |  | ----- | - |  | - | ----- | 
|                         |  |                      
|                         |  | December 31,         
|                         |  |                      
|                         |  |                       |       |        
|                         |  | 2001                  |       | 2000   
|                         |  |                       |       |        
|                         |  | Ownership             |       | Balance |  | Ownership |       | Balance
|                         |  |                       |       |         |  |           |       |        
|                         |  |                      
|                         |  | (dollars in millions)
|Noos                     |  |                       | 27.00 | %       |  | $         | 47.0  |         |  |  |       |   |  | $ |      | 
|B2                       |  |                       | 34.01 | %       |  |           | 92.5  |         |  |  | 25.15 | % |  |   | 134.7 | 
|eKabel                   |  |                       | 32.50 | %       |  |           | 73.0  |         |  |  | 32.50 | % |  |   | 140.2 | 
|Others                   |  |                       |       |         |  |           | 52.8  |         |  |  |       |   |  |   | 34.3  | 
|                         |  |                       |       |         |  |           |       |         |  |  |       |   |  |   |       | 
|Total equity investments |  |                       |       |         |  |           | 265.3 |         |  |  |       |   |  |   | 309.2 | 
|Total cost investments   |  |                       |       |         |  |           | 7.1   |         |  |  |       |   |  |   | 23.9  | 
|                         |  |                       |       |         |  |           |       |         |  |  |       |   |  |   |       | 
|Total                    |  |                       |       |         |  | $         | 272.4 |         |  |  |       |   |  | $ | 333.1 | 
|                         |  |                       |       |         |  |           |       |         |  |  |       |   |  |   |       | 

A summary of combined financial information as
reported by the Companys equity investees is set forth
below:

|                                           |  |               |         |      |  |   |         | 
|------------------------------------------ |  | ------------- | ------- | ---- |  | - | ------- | 
|                                           |  |              
|                                           |  | December 31, 
|                                           |  |              
|                                           |  | 2001          |         | 2000
|                                           |  |               |         |     
|                                           |  |              
|                                           |  | (in millions)
|Current assets                             |  | $             | 495.5   |      |  | $ | 267.1   | 
|Fixed assets, net                          |  |               | 910.9   |      |  |   | 353.8   | 
|Other assets                               |  |               | 2,690.0 |      |  |   | 842.1   | 
|                                           |  |               |         |      |  |   |         | 
|Total assets                               |  | $             | 4,096.4 |      |  | $ | 1,463.0 | 
|                                           |  |               |         |      |  |   |         | 
|Current liabilities                        |  | $             | 366.3   |      |  | $ | 229.6   | 
|Non current liabilities                    |  |               | 1,445.4 |      |  |   | 705.0   | 
|Total shareholders equity                 |  |               | 2,284.7 |      |  |   | 528.4   | 
|                                           |  |               |         |      |  |   |         | 
|Total liabilities and shareholders equity |  | $             | 4,096.4 |      |  | $ | 1,463.0 | 
|                                           |  |               |         |      |  |   |         | 

|                 |  |                         |        |      |  |      |        |   |  |   |       |  
|---------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | -
|                 |  |                        
|                 |  | Year Ended December 31,
|                 |  |                        
|                 |  | 2001                    |        | 2000 |  | 1999
|                 |  |                         |        |      |  |     
|                 |  |                        
|                 |  | (in millions)          
|Revenues         |  | $                       | 437.4  |      |  | $    | 195.3  |   |  | $ | 57.5  |  
|Operating (loss) |  |                         | (445.3 | )    |  |      | (257.6 | ) |  |   | (43.5 | )
|Net (loss)       |  |                         | (606.8 | )    |  |      | (348.1 | ) |  |   | (50.7 | )

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

F-21



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

9.     Long-Term
Debt

Long-term debt consists of:

|                            |                                                          |  |      |               |          |         |  |  |          |         | 
|--------------------------- | -------------------------------------------------------- |  | ---- | ------------- | -------- | ------- |  |  | -------- | ------- | 
|                            |                                                          |  |      |              
|                            |                                                          |  |      | December 31, 
|                            |                                                          |  |      |              
|                            |                                                          |  |      | 2001          |          | 2000   
|                            |                                                          |  |      |               |          |        
|                            |                                                          |  |      |              
|                            |                                                          |  |      | (in millions)
|NTL Incorporated:           |                                                          |  |      |               |          |         |  |  |          |        
|                            | 5 3/4% Convertible Subordinated Notes                    |  | (a)  |               | $        | 100.0   |  |  | $        |        | 
|NTL Delaware:               |                                                          |  |      |               |          |         |  |  |          |        
|                            | 5 3/4% Convertible Subordinated Notes                    |  | (b)  |               |          | 1,200.0 |  |  |          | 1,200.0 | 
|ConsumerCo:                 |                                                          |  |      |               |          |         |  |  |          |        
|                            | Term Loan Facility and other                             |  |      |               |          |        |  |  |          | 21.7    | 
|NTL Business:               |                                                          |  |      |               |          |         |  |  |          |        
|                            | Credit Agreement                                         |  | (y)  |               |          |        |  |  |          | 3,030.3 | 
|Cablecom:                   |                                                          |  |      |               |          |         |  |  |          |        
|                            | Term Loan Facility                                       |  | (z)  |               |          | 1,626.8 |  |  |          | 1,666.4 | 
|                            | Revolving Facility                                       |  | (z)  |               |          | 527.2   |  |  |          | 320.9   | 
|                            | Other                                                    |  |      |               |          | 6.2     |  |  |          | 15.3    | 
|NTL Australia:              |                                                          |  |      |               |          |         |  |  |          |        
|                            | Credit Agreement                                         |  | (aa) |               |          | 102.3   |  |  |          |        | 
|NTL Communications:         |                                                          |  |      |               |          |         |  |  |          |        
|                            | 12 3/4% Senior Deferred Coupon Notes                     |  | (c)  |               |          | 277.8   |  |  |          | 277.8   | 
|                            | 11 1/2% Senior Deferred Coupon Notes                     |  | (d)  |               |          | 1,050.0 |  |  |          | 1,040.5 | 
|                            | 10% Senior Notes                                         |  | (e)  |               |          | 400.0   |  |  |          | 400.0   | 
|                            | 9 1/2% Senior Sterling Notes, less
	unamortized discount |  | (f)  |               |          | 181.4   |  |  |          | 186.5   | 
|                            | 10 3/4% Senior Deferred Coupon Sterling Notes            |  | (g)  |               |          | 382.3   |  |  |          | 353.6   | 
|                            | 9 3/4% Senior Deferred Coupon Notes                      |  | (h)  |               |          | 1,153.8 |  |  |          | 1,048.5 | 
|                            | 9 3/4% Senior Deferred Coupon Sterling Notes             |  | (i)  |               |          | 385.9   |  |  |          | 360.8   | 
|                            | 11 1/2% Senior Notes                                     |  | (j)  |               |          | 625.0   |  |  |          | 625.0   | 
|                            | 12 3/8% Senior Deferred Coupon Notes                     |  | (k)  |               |          | 364.9   |  |  |          | 323.6   | 
|                            | 7% Convertible Subordinated Notes                        |  | (l)  |               |          | 489.8   |  |  |          | 599.3   | 
|                            | 9 1/4% Senior Euro Notes                                 |  | (m)  |               |          | 222.5   |  |  |          | 234.7   | 
|                            | 9 7/8% Senior Euro Notes                                 |  | (n)  |               |          | 311.5   |  |  |          | 328.6   | 
|                            | 11 1/2% Senior Deferred Coupon Euro Notes                |  | (o)  |               |          | 135.6   |  |  |          | 127.9   | 
|                            | 11 7/8% Senior Notes, less unamortized
	discount         |  | (p)  |               |          | 490.7   |  |  |          | 489.6   | 
|                            | 12 3/8% Senior Euro Notes, plus unamortized
	premium     |  | (q)  |               |          | 267.8   |  |  |          |        | 
|                            | 6 3/4% Convertible Senior Notes                          |  | (r)  |               |          | 1,150.0 |  |  |          |        | 
|NTL Communications Limited: |                                                          |  |      |               |          |         |  |  |          |        
|                            | Credit Agreement                                         |  | (y)  |               |          | 3,759.1 |  |  |          | 375.3   | 
|                            | Working Capital Agreement                                |  | (y)  |               |          | 145.4   |  |  |          |        | 
|                            | Senior Secured Financing                                 |  | (y)  |               |          | 290.9   |  |  |          |        | 
|                            | Other                                                    |  |      |               |          | 58.6    |  |  |          |        | 
|NTL Triangle:               |                                                          |  |      |               |          |         |  |  |          |        
|                            | 11.2% Senior Discount Debentures                         |  | (s)  |               |          | 517.3   |  |  |          | 517.3   | 
|                            | Other                                                    |  |      |               |          | 4.5     |  |  |          | 5.2     | 
|Diamond:                    |                                                          |  |      |               |          |         |  |  |          |        
|                            | 13 1/4% Senior Discount Notes                            |  | (t)  |               |          | 285.1   |  |  |          | 285.1   | 
|                            | 11 3/4% Senior Discount Notes                            |  | (u)  |               |          | 531.0   |  |  |          | 531.0   | 
|                            | 10 3/4% Senior Discount Notes                            |  | (v)  |               |          | 415.1   |  |  |          | 373.9   | 
|                            | 10% Senior Sterling Notes                                |  | (w)  |               |          | 196.3   |  |  |          | 201.9   | 
|                            | 9 1/8% Senior Notes                                      |  | (x)  |               |          | 110.0   |  |  |          | 110.0   | 
|                            | Other                                                    |  |      |               |          | 3.6     |  |  |          | 6.0     | 
|                            |                                                          |  |      |               |          |         |  |  |          |        
|                            |                                                          |  |      |               | 17,768.4 |         |  |  | 15,056.7 |        

F-22



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

|                     |  |  |  |               |          |      |  |   |          | 
|-------------------- |  |  |  | ------------- | -------- | ---- |  | - | -------- | 
|                     |  |  |  |              
|                     |  |  |  | December 31, 
|                     |  |  |  |              
|                     |  |  |  | 2001          |          | 2000
|                     |  |  |  |               |          |     
|                     |  |  |  |              
|                     |  |  |  | (in millions)
|Less current portion |  |  |  |               | 17,666.1 |      |  |   | 12.6     | 
|                     |  |  |  |               |          |      |  |   |          | 
|                     |  |  |  | $             | 102.3    |      |  | $ | 15,044.1 | 
|                     |  |  |  |               |          |      |  |   |          | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | 5 3/4% Convertible Subordinated Notes due
	June 22, 2011, issued in June 2001, principal amount at
	maturity of $100.0 million, interest payable quarterly from
	October 15, 2001, redeemable at the Companys option
	on or after December 22, 2007, convertible into shares of
	the Companys common stock at a conversion price of $35.00
	per share (there are approximately 2.9 million shares of
	the Companys common stock reserved for issuance upon
	conversion);
|   
|(b) |  | 5 3/4% Convertible Notes due
	December 15, 2009, principal amount at maturity of
	$1,200.0 million, interest payable semiannually from
	June 15, 2000, redeemable at the Companys option on
	or after December 18, 2002, convertible into shares of the
	Companys common stock at a conversion price of $108.18 per
	share (there are approximately 11.1 million shares of the
	Companys common stock reserved for issuance upon
	conversion);                          
|   
|(c) |  | 12 3/4% Notes due April 15, 2005,
	principal amount at maturity of $277.8 million, interest payable
	semiannually from October 15, 2000, redeemable at the
	Companys option on or after April 15, 2000;                                                                                                                                                                                                                                                                   
|   
|(d) |  | 11 1/2% Notes due February 1, 2006,
	principal amount at maturity of $1,050.0 million, interest
	payable semiannually from August 1, 2001, redeemable at the
	Companys option on or after February 1, 2001;                                                                                                                                                                                                                                                               
|   
|(e) |  | 10% Notes due February 15, 2007, principal
	amount at maturity of $400.0 million, interest payable
	semiannually from August 15, 1997, redeemable at the
	Companys option on or after February 15, 2002;                                                                                                                                                                                                                                                                  
|   
|(f) |  | 9 1/2% Sterling Notes due April 1,
	2008, principal amount at maturity of £125.0 million
	($181.8 million), interest payable semiannually from
	October 1, 1998, redeemable at the Companys option on
	or after April 1, 2003;                                                                                                                                                                                                                                            
|   
|(g) |  | 10 3/4% Sterling Notes due April 1,
	2008, principal amount at maturity of £300.0 million
	($436.3 million), interest payable semiannually beginning
	on October 1, 2003, redeemable at the Companys option
	on or after April 1, 2003;                                                                                                                                                                                                                                   
|   
|(h) |  | 9 3/4% Notes due April 1, 2008,
	principal amount at maturity of $1,300.0 million, interest
	payable semiannually beginning on October 1, 2003,
	redeemable at the Companys option on or after
	April 1, 2003;                                                                                                                                                                                                                                                            
|   
|(i) |  | 9 3/4% Sterling Notes due April 15,
	2009, principal amount at maturity of £330.0 million
	($479.9 million), interest payable semiannually beginning
	on October 15, 2004, redeemable at the Companys
	option on or after April 15, 2004;                                                                                                                                                                                                                                 
|   
|(j) |  | 11 1/2% Notes due October 1, 2008,
	principal amount at maturity of $625.0 million, interest
	payable semiannually from April 1, 1999, redeemable at the
	Companys option on or after October 1, 2003;                                                                                                                                                                                                                                                                    
|   
|(k) |  | 12 3/8% Notes due October 1, 2008,
	principal amount at maturity of $450.0 million, interest
	payable semiannually beginning on April 1, 2004, redeemable
	at the Companys option on or after October 1, 2003;                                                                                                                                                                                                                                                            
|   
|(l) |  | 7% Convertible Notes due December 15, 2008,
	principal amount at maturity of $489.8 million, interest
	payable semiannually from June 15, 1999, redeemable at the
	Companys option on or after December 15, 2001,
	convertible into shares of the Companys common stock at a
	conversion price of $39.20 per share (there are approximately
	12.5 million shares of the Companys common stock
	reserved for issuance upon conversion);                                  
|   
|(m) |  | 9 1/4% Euro Notes due November 15,
	2006, principal amount at maturity of
	250.0 million
	($222.5 million), interest payable semiannually from
	May 15, 2000;                                                                                                                                                                                                                                                                                                             
|   
|(n) |  | 9 7/8% Euro Notes due November 15,
	2009, principal amount at maturity of
	350.0 million
	($311.5 million), interest payable semiannually from
	May 15, 2000, redeemable at the Companys option on or
	after November 15, 2004;                                                                                                                                                                                                                                          

F-23



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(o) |  | 11 1/2% Deferred Euro Notes due
	November 15, 2009, principal amount at maturity of
	210.0 million
	($186.9 million), interest payable semiannually beginning
	on May 15, 2005, redeemable at the Companys option on
	or after November 15, 2004;                                                                                                                                                                                                                   
|   
|(p) |  | 11 7/8% Notes due October 1, 2010,
	principal amount at maturity of $500.0 million, interest
	payable semiannually from April 1, 2001, redeemable at the
	Companys option on or after October 1, 2005;                                                                                                                                                                                                                                                               
|(q) |  | 12 3/8% Senior Euro Notes due
	February 1, 2008, issued in January and February 2001,
	principal amount at maturity of
	300.0 million
	($267.0 million), interest payable semiannually from
	August 1, 2001;                                                                                                                                                                                                                                                         
|(r) |  | 6 3/4% Convertible Senior Notes due
	May 15, 2008, issued in May 2001, principal amount at
	maturity of $1,150.0 million, interest payable semiannually
	from November 15, 2001, redeemable at the Companys
	option on or after May 21, 2004, convertible into shares of
	the Companys common stock at a conversion price of $32.728
	per share (there are approximately 35.1 million shares of
	the Companys common stock reserved for issuance upon
	conversion);
|(s) |  | 11.2% Debentures due November 15, 2007,
	principal amount at maturity of $517.3 million, interest
	payable semiannually from May 15, 2001, redeemable at NTL
	Triangles option after November 15, 2000;                                                                                                                                                                                                                                                              
|(t) |  | 13 1/4% Notes due September 30, 2004,
	principal amount at maturity of $285.1 million, interest
	payable semiannually from March 31, 2000, redeemable at
	Diamonds option after September 30, 1999;                                                                                                                                                                                                                                                                  
|(u) |  | 11 3/4% Notes due December 15, 2005,
	principal amount at maturity of $531.0 million, interest
	payable semiannually from June 15, 2001, redeemable at
	Diamonds option on or after December 15, 2000;                                                                                                                                                                                                                                                               
|(v) |  | 10 3/4% Notes due February 15, 2007,
	principal amount at maturity of $420.5 million, interest
	payable semiannually beginning on August 15, 2002,
	redeemable at Diamonds option on or after
	December 15, 2002;                                                                                                                                                                                                                                                    
|(w) |  | 10% Sterling Notes due February 1, 2008,
	issued by Diamond Holdings plc, principal amount at maturity of
	£135.0 million ($196.3 million), interest payable
	semiannually from August 1, 1998, redeemable at
	Diamonds option on or after February 1, 2003; and                                                                                                                                                                                                     
|(x) |  | 9 1/8% Notes due February 1, 2008,
	issued by Diamond Holdings plc, principal amount of
	$110.0 million, interest payable semiannually from
	August 1, 1998, redeemable at Diamonds option on or
	after February 1, 2003.                                                                                                                                                                                                                                            

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

The indentures governing the notes contain
restrictions relating to, among other things:
(i) incurrence of additional indebtedness and issuance of
preferred stock, (ii) dividend and other payment
restrictions and (iii) mergers, consolidations and sales of
assets. The Company, NTL Delaware and NTL Communications did not
make interest payments and payments of related fees when due on
April 1 and April 15, 2002.

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

F-24



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

During 2001, 2000 and 1999, the Company
recognized $284.9 million, $473.4 million and
$451.4 million, respectively, of original issue discount as
interest expense.

In addition to the notes described above,
subsidiaries of the Company have the following bank credit
agreements outstanding:



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (y) | In May 2000, NTL Business Limited (NTL
	Business) and NTL Communications Limited
	(NTLCL), wholly-owned indirect subsidiaries of the
	Company, entered into a £2,500.0 million
	($3,635.8 million) credit agreement in connection with the
	ConsumerCo acquisition. On February 21, 2001, as required
	by the NTL Business and NTLCL credit agreement, NTL
	Communications Corp. (NTL Communications), a
	wholly-owned indirect subsidiary of the Company, completed a
	transaction whereby it acquired the entire issued share capital
	of NTL (CWC Holdings) Limited (the entity that owns ConsumerCo)
	from the Company and the entire issued share capital of NTL
	Business from NTL Delaware in exchange for shares of its common
	stock. As a result of this transaction, ConsumerCo and NTL
	Business became subsidiaries of NTL Communications, and NTL
	Business rights and obligations under the
	£2,500.0 million credit agreement were assigned to a
	subsidiary of NTLCL. In October 2001, NTLCL completed
	£169.6 million ($246.6 million) of vendor
	financing as an addition to NTLCLs
	£2,500.0 million credit agreement with the same terms
	and conditions. The Company borrowed £84.8 million
	($123.3 million) of the vendor financing in October 2001.
	The commitment for the remaining £84.8 million has
	expired. Interest is payable at least every six months at LIBOR
	plus a margin rate of 2.00% per annum, which is subject to
	adjustment based on the ratio of EBITDA to finance charges of
	the UK Group.
|
| |     | For purposes of this credit agreement, Diamond
	Cable Communications Limited and subsidiaries, NTL (Triangle)
	LLC and subsidiaries and certain other entities are excluded
	from the UK Group. The unused portion of the commitment is
	subject to a commitment fee of 0.75% payable quarterly, which is
	reduced to 0.50% when over 50% of the commitment is utilized.
	Principal is due in six quarterly installments beginning on
	June 30, 2004. The credit agreement contains various
	financial and other covenants with respect to the UK Group, and
	restrictions on dividends and distributions by the UK Group. As
	of December 31, 2001, there was £2,584.8 million
	($3,759.1 million) outstanding under this credit agreement.
	The effective interest rate was 6.73% and 8.283% as of
	December 31, 2001 and 2000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |     | In October 2001, NTLCL completed
	£200.0 million ($290.9 million) of
	GE Capital senior secured financing. Interest on the GE
	Capital senior secured financing is payable at least every six
	months at LIBOR plus a margin rate of 3.50% per annum. The
	senior secured financing is repayable in eight quarterly
	installments beginning on June 30, 2006. The effective
	interest rate at December 31, 2001 was 8.06%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |     | NTLCL has a £1,300.0 million
	($1,890.6 million) credit agreement with a group of banks,
	which is available to finance working capital requirements of
	the UK Group (as defined above). Pursuant to the credit
	agreement, in connection with the issuance of new debt beginning
	in October 2000, the commitment has been reduced by
	£882.5 million ($1,283.4 million). Interest is
	payable at least every six months at LIBOR plus a margin rate of
	5.50% per annum. The margin rate shall increase by 0.50% on the
	three month anniversary of the initial advance and by an
	additional 0.50% on each subsequent three month anniversary, up
	to a maximum total interest rate of 16.00% per annum. The unused
	portion of the commitment is subject to a commitment fee of
	0.75% payable quarterly. Principal is due in full on
	March 31, 2006. The credit agreement contains various
	financial and other covenants with respect to the UK Group, and
	restrictions on dividends and distributions by the UK Group. As
	of December 31, 2001, £100.0 million
	($145.4 million) was outstanding under                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-25



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)



| |  |                                                                                                                                                                           
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | this credit agreement with an effective interest
	rate of 9.57%. In January and February 2002, the Company
	borrowed the remaining amounts available under this agreement.



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (z)  | In March 2000, a subsidiary of the Company
	borrowed CHF 2,700.0 million ($1,626.8 million) under
	its term loan facility in connection with the acquisition of
	Cablecom. Interest is payable at least every six months at Swiss
	LIBOR plus a margin rate of 2.50% per annum, which is subject to
	adjustment after March 2001 based on Cablecoms ratio of
	senior debt to EBITDA. The effective rate of interest at
	December 31, 2001 and 2000 was 5.27% and 6.03%,
	respectively. Principal is due over six years in quarterly
	installments beginning on March 31, 2004. Cablecom had the
	option to draw on a revolving loan facility up to an additional
	CHF 1,400.0 million ($843.5 million). The revolving
	facility is intended to finance operating expenses, working
	capital and other capital expenditures of Cablecom and
	subsidiaries and for their general corporate financing
	requirements. As of December 31, 2001, Cablecom had
	borrowed CHF 875.0 million ($527.2 million) under the
	revolving loan facility. The effective rate of interest as of
	December 31, 2001 and 2000 was 5.49% and 6.02%,
	respectively. The revolving facility is available until May
	2003, although Cablecom is currently unable to draw the
	remaining undrawn amounts under this facility because, as of
	December 31, 2001, its liabilities exceeded its assets,
	which constituted an event of default under the facility. The
	interest rate, interest payment requirements and principal
	payments for the revolving facility are the same as for the term
	loan facility. The revolving facility includes a commitment fee
	of 0.75% payable quarterly on the unused portion of the
	revolving facility commitment, which is reduced to 0.50% when
	over 50% of the commitment is utilized. The term loan facility
	and the revolving facility contain various financial and other
	covenants with respect to Cablecom and subsidiaries, and
	restrictions on dividends and distributions by Cablecom
	subsidiaries.
|
| | (aa) | In March 2001, NTL Australia Pty Limited
	(NTL Australia), a wholly-owned indirect subsidiary
	of the Company, entered into a A$350.0 million
	($179.1 million) credit agreement with a group of banks. As
	of December 31, 2001, NTL Australia had borrowed
	A$200.0 million ($102.3 million) under this credit
	agreement. NTL Australia may use the proceeds under this credit
	agreement to repay NTL Delaware for part of its original
	investment as well as funding general capital expenditures,
	working capital and corporate purposes. As of December 31,
	2001, NTL Australia repaid A$200.0 million
	($102.3 million) to NTL Delaware. Interest is payable at
	least every six months at the A$ Bank Bill Bid Rate plus a
	margin of 1.85% per annum, which is subject to adjustment based
	on the ratio of senior debt to EBITDA of NTL Australia. The
	effective interest rate at December 31, 2001 was 6.98%. The
	unused portion of the commitment is subject to a commitment fee
	of 0.60%, which is subject to adjustment based on the ratio of
	senior debt to EBITDA of NTL Australia. Principal is due in four
	semiannual installments beginning on June 30, 2004 of a
	maximum of A$7.5 million, A$7.5 million,
	A$12.5 million and A$12.5 million. The balance is due
	in full on March 30, 2006. The credit agreement contains
	various financial and other covenants with respect to NTL
	Australia and restrictions on dividends and distributions by NTL
	Australia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

In connection with the Cablelink acquisition, the
Company issued $704.6 million principal amount Senior
Increasing Rate Notes due 2000. In November 1999, the Company
received net proceeds of

F-26



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

$720.7 million from the issuance of the
9 1/4% Euro Notes, the 9 7/8% Euro Notes and the
11 1/2% Deferred Euro Notes, of which $716.5 million
was used to repay the Senior Increasing Rate Notes plus accrued
interest. The Company recorded an extraordinary loss from the
early extinguishment of the notes of $3.0 million in 1999.

Primarily all of the notes issued by NTL
Communications, as well as the bank credit facilities, restrict
the payment of cash dividends and loans to the Company.

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

|                         |            |   |           |          | 
|------------------------ | ---------- | - | --------- | -------- | 
|Year ending December 31: |            |  
|                         |            |  
|                         | 2002       |   | $         | 5.7      | 
|                         | 2003       |   |           | 2.8      | 
|                         | 2004       |   |           | 512.2    | 
|                         | 2005       |   |           | 4,602.9  | 
|                         | 2006       |   |           | 1,854.1  | 
|                         | Thereafter |   |           | 11,235.6 | 
|                         |            |   |           |         
|Total debt repayments    |            |   | 18,213.3  |         
|Less: current portion    |            |   | (18,111.0 | )       
|                         |            |   |           |         
|                         |            | $ | 102.3     |         
|                         |            |   |           |         

10.     Redeemable
Preferred Stock

On September 12, 2001, the Company issued
1,850,000 shares of its Cumulative Convertible Preferred Stock,
Series A (Convertible Preferred Stock) in
exchange for the 1,850,000 issued and outstanding shares of its
5% Cumulative Preferred Stock held by France Telecom and others.
The Convertible Preferred Stock has a stated value and
liquidation preference of $1,075.17 per share and is mandatorily
redeemable for cash by the Company on March 27, 2009.
Dividends are payable quarterly in additional shares of
Convertible Preferred Stock, at the following quarterly dividend
rates: (i) from September 12, 2001 through
March 26, 2002, $13.44 per share, (ii) from
March 27, 2002 through March 26, 2003, $21.23 per
share and (iii) from March 27, 2003 through
March 26, 2004, $26.61 per share. Once the Convertibility
Date (as defined below) is set, the quarterly dividend rate
resets to $16.12 per share and the Convertible Preferred Stock
becomes eligible for conversion into shares of the
Companys common stock beginning on a Convertibility
Date, at which time the conversion price is set at 125% of
the immediately preceding 25 trading day volume-weighted
average price of the Companys common stock (the
Convertibility Base Price). The Convertibility Date
is as follows: March 27, 2002, unless the Company elects to
delay convertibility until March 27, 2003 or,
alternatively, redeems, at its option, all shares of the
Convertible Preferred Stock on March 27, 2002 in cash; if
the Company has delayed, March 27, 2003, unless the Company
elects again to delay convertibility until March 27, 2004,
which it may only do if the Convertibility Base Price would be
less than or equal to $65.00 per share (as may be adjusted for
certain antidilutive events); the Company may also elect,
instead, to redeem all shares of the Convertible Preferred Stock
on March 27, 2003 in cash; if the Company has delayed,
March 27, 2004, unless the Company elects to redeem all
shares of the Convertible Preferred Stock on March 27, 2004
in cash. In no event will the Convertibility Date be after
March 27, 2004. In March 2002, the Company elected to delay
the Convertibility Date until at least March 27, 2003.
Holders of Convertible Preferred Stock other than any commercial
bank or their affiliates may at any time elect, subject to some
conditions, to exchange their Convertible Preferred Stock for up
to a 50% interest in an entity holding the Companys Swiss
operations.

F-27



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

On May 18, 2001, the Company issued 47,000
shares of its Variable Coupon Redeemable Preferred Stock,
Series A (Variable Coupon Redeemable Preferred
Stock) and 12,000 shares of its 6.5% Fixed Coupon
Redeemable Preferred Stock, Series A (6.5% Redeemable
Preferred Stock) to France Telecom in exchange for a 27%
interest in Noos. The Variable Coupon Redeemable Preferred Stock
has a stated value and liquidation preference of $10,000 per
share and is mandatorily redeemable for cash by the Company on
May 18, 2002. Dividends are payable quarterly at the
Companys option in cash or additional shares of Variable
Coupon Redeemable Preferred Stock, at a quarterly rate based on
a quotient of (x) the sum of (1) the EURIBOR Rate in
effect on the first day of every dividend period plus
(2) 2.5% over (y) four, per share. The Companys
27% interest in Noos is pledged to France Telecom to secure the
mandatory redemption obligation under its Variable Coupon
Redeemable Preferred Stock and the 6.5% Redeemable Preferred
Stock. The 6.5% Redeemable Preferred Stock has a stated value
and liquidation preference of $10,000 per share and is
mandatorily redeemable for cash by the Company on May 18,
2007. Dividends at a rate of 6.5% per annum are cumulative and
are payable in cash upon redemption.

In March 2000, the Company received
$1,850.0 million in cash from France Telecom and a group of
commercial banks in exchange for 1,850,000 shares of its
redeemable 5% Cumulative Preferred Stock. As described above, in
May 2001, the Company issued 1,850,000 shares of its Convertible
Preferred Stock in exchange for the 1,850,000 issued and
outstanding shares of its 5% Cumulative Preferred Stock.

In February 1997, the Company issued 100,000
shares of its 13% Senior Redeemable Exchangeable Preferred Stock
(the Redeemable Preferred Stock). The Company
received net proceeds of $96.6 million after discounts and
commissions from the issuance of the Redeemable Preferred Stock.
Discounts, commissions and other fees incurred of
$3.7 million were recorded as unamortized discount at
issuance. Dividends accrue at 13% per annum ($130 per
share) and are payable quarterly in arrears. Dividends accruing
on or prior to February 15, 2004 may, at the option of the
Company, be paid in cash, by the issuance of additional
Redeemable Preferred Stock or in any combination of the
foregoing. As of December 31, 2001, the Company has accrued
$86.8 million for dividends and has issued approximately
84,000 shares for $83.8 million of such accrued dividends.
The Redeemable Preferred Stock may be redeemed, at the
Companys option, in whole or in part, at any time on or
after February 15, 2002 at a redemption price of 106.5% of
the liquidation preference of $1,000 per share that declines
annually to 100% in 2005, in each case together with accrued and
unpaid dividends to the redemption date. The Redeemable
Preferred Stock is subject to mandatory redemption on
February 15, 2009. On any scheduled dividend payment date,
the Company may, at its option, exchange all of the shares of
Redeemable Preferred Stock then outstanding for the
Companys 13% Subordinated Exchange Debentures due 2009
(the Subordinated Debentures).

The Subordinated Debentures, if issued, will bear
interest at a rate of 13% per annum, payable semiannually in
arrears on February 15 and August 15 of each year
commencing with the first such date to occur after the date of
exchange. Interest accruing on or prior to February 15,
2004 may, at the option of the Company, be paid in cash, by the
issuance of additional Subordinated Debentures or in any
combination of the foregoing. The Subordinated Debentures will
be redeemable, at the Companys option, in whole or in
part, on or after February 15, 2002 at a redemption price
of 106.5% that declines annually to 100% in 2005, in each case
together with accrued and unpaid interest to the redemption date.

F-28



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|---------------------------------------------------------- |  | --- | ------- | -- |  | -------- | ---------- | ---- |  | ----------- | ------ |  |  | - | ------ |  |  | - | --------- | 
|                                                           |  | 13% |         | 5% |  | Variable |            | 6.5% |  | Convertible
|                                                           |  |     |         |    |  |          |            |      |  |            
|Shares at December 31, 1998                                |  |     | 125,000 |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for dividends                                       |  |     | 17,000  |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 1999                                |  |     | 142,000 |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for cash                                            |  |     |        |    |  |          | 1,850,000  |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for dividends                                       |  |     | 20,000  |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 2000                                |  |     | 162,000 |    |  |          | 1,850,000  |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for investment in Noos                              |  |     |        |    |  |          |           |      |  |             | 47,000 |  |  |   | 12,000 |  |  |   |          | 
|Issued for dividends                                       |  |     | 22,000  |    |  |          |           |      |  |             | 1,000  |  |  |   |       |  |  |   |          | 
|Exchange                                                   |  |     |        |    |  |          | (1,850,000 | )    |  |             |       |  |  |   |       |  |  |   | 1,850,000 | 
|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 2001                                |  |     | 184,000 |    |  |          |           |      |  |             | 48,000 |  |  |   | 12,000 |  |  |   | 1,850,000 | 
|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Liquidation preference at December 31, 2001
	(in millions) |  | $   | 186.8   |    |  | $        |           |      |  | $           | 491.7  |  |  | $ | 126.9  |  |  | $ | 2,029.1   | 
|                                                           |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 

11.     Derivative
Financial Instruments

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

On January 1, 2001, the Company recorded all
of its outstanding derivative instruments at their fair value.
The outstanding derivative instruments were comprised of cross
currency swaps to hedge exposure to movements in the British
pound/U.S. dollar exchange rate, and a number of zero cost
collars to hedge exposure to floating interest rates on certain
of its debt. The aggregate fair value on January 1, 2001
was a liability of $9.0 million, of which $6.8 million
was recorded as an expense and $2.2 million was recorded as
other comprehensive loss. In 2001, the Company entered into
cross currency swaps to hedge exposure to movements in the Euro/
British pound exchange rate. In the year ended December 31,
2001, the Company recorded income of $3.4 million and other
comprehensive loss of $12.8 million as a result of changes
in the fair values. The aggregate fair value at
December 31, 2001 was a net liability of $18.4 million.

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

12.     Non-Cash
Compensation

In July 2001, the Compensation and Option
Committee of the Board of Directors (the Compensation
Committee) approved modifications to certain stock
options. The latest possible expiration date of options to
purchase an aggregate of approximately 4.7 million shares
of the Companys common stock with exercise

F-29



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

prices from $.17 to $14.76 per share was extended
from July 30, 2001 to October 2004, as applicable, to
January 30, 2006. The Company recognized non-cash
compensation expense of $30.6 million based on the excess
of the quoted market price of the Companys common stock on
the date of the modification of $12.05 per share over the
exercise price per share.

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

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

13.     Other Charges
including Restructuring Charges

Other charges of $311.6 million in 2001
include restructuring charges of $209.6 million and costs
of $102.1 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. Other charges of $92.7 million
in 2000 include restructuring charges of $65.9 million and
costs of $26.8 million incurred primarily to integrate the
acquired companies, mostly related to information technology
integration, as well as costs incurred for business
rationalization consulting. Other charges of $16.2 million
in 1999 were incurred for the cancellation of certain contracts.

Restructuring charges of $209.6 million and
$65.9 million for the years ended December 31, 2001
and 2000, respectively, relate to the Companys
announcements in the fourth quarter of 2001 and in
November 2000 that it was taking additional actions to
reorganize, re-size and reduce operating costs and create
greater efficiency in various areas of the Company. An aggregate
of $57.9 million of the 2001 restructuring charges are for
the write-off of equipment and other assets that are not in use
and will not require any future cash outlays. The employee
severance and related costs in 2000 were for approximately 2,300
employees to be terminated, approximately 550 of whom are still
employed by the Company as of December 31, 2001. These
charges in 2001 are for approximately 5,400 employees to be
terminated, of which approximately 3,000 employees are still
employed by the Company as of December 31, 2001.

F-30



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|-------------------------- |  | ------------- | ----- | ----- |  | ------------- | ---- | ------ |  | ----- | ---- |  |  | - | ----- | - |  | - | ----- | -
|                           |  | Employee      |       |       |  |               |      |        |  |      
|                           |  | Severance     |       | Lease |  |               |      |        |  |      
|                           |  | And Related   |       | Exit  |  | Agreement     |      | Fixed  |  |      
|                           |  | Costs         |       | Costs |  | Modifications |      | Assets |  | Total
|                           |  |               |       |       |  |               |      |        |  |      
|                           |  |              
|                           |  | (in millions)
|Charged to expense         |  | $             | 47.9  |       |  | $             | 18.0 |        |  | $     |     |  |  | $ |      |   |  | $ | 65.9  |  
|Utilized                   |  |               |      |       |  |               |     |        |  |       |     |  |  |   |      |   |  |   |      |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2000 |  |               | 47.9  |       |  |               | 18.0 |        |  |       |     |  |  |   |      |   |  |   | 65.9  |  
|2000 provision utilized    |  |               | (41.3 | )     |  |               | (9.6 | )      |  |       |     |  |  |   |      |   |  |   | (50.9 | )
|2000 provision released    |  |               | (6.6  | )     |  |               | (7.3 | )      |  |       |     |  |  |   |      |   |  |   | (13.9 | )
|Charged to expense         |  |               | 96.5  |       |  |               | 41.4 |        |  |       | 27.7 |  |  |   | 57.9  |   |  |   | 223.5 |  
|2001 provision utilized    |  |               | (26.2 | )     |  |               |     |        |  |       |     |  |  |   | (57.9 | ) |  |   | (84.1 | )
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  
|Balance, December 31, 2001 |  | $             | 70.3  |       |  | $             | 42.5 |        |  | $     | 27.7 |  |  | $ |      |   |  | $ | 140.5 |  
|                           |  |               |       |       |  |               |      |        |  |       |      |  |  |   |       |   |  |   |       |  

14.     Income
Taxes

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

|               |                 |                         |      |      |  |      |        |        |   |   |       |       |  
|-------------- | --------------- | ----------------------- | ---- | ---- |  | ---- | ------ | ------ | - | - | ----- | ----- | -
|               |                 |                        
|               |                 | Year Ended December 31,
|               |                 |                        
|               |                 | 2001                    |      | 2000 |  | 1999
|               |                 |                         |      |      |  |     
|               |                 |                        
|               |                 | (in millions)          
|Current:       |                 |                         |      |      |  |      |        |        |   |   |       |      
|               | Federal         |                         | $    |     |  |      | $      |       |   |   | $     | 1.0   |  
|               | State and local |                         |      | 1.2  |  |      |        | 0.2    |   |   |       | 1.0   |  
|               | Foreign         |                         |      | 0.9  |  |      |        | 0.9    |   |   |       |      |  
|               |                 |                         |      |      |  |      |        |        |   |   |       |      
|Total current  |                 |                         | 2.1  |      |  |      | 1.1    |        |   |   | 2.0   |      
|               |                 |                         |      |      |  |      |        |        |   |   |       |      
|Deferred:      |                 |                         |      |      |  |      |        |        |   |   |       |      
|               | Foreign         |                         | $    | 61.1 |  |      | $      | (112.1 | ) |   | $     | (37.3 | )
|               |                 |                         |      |      |  |      |        |        |   |   |       |      
|Total deferred |                 |                         | 61.1 |      |  |      | (112.1 | )      |   |   | (37.3 | )    
|               |                 |                         |      |      |  |      |        |        |   |   |       |      
|               |                 | $                       | 63.2 |      |  | $    | (111.0 | )      |   | $ | (35.3 | )    
|               |                 |                         |      |      |  |      |        |        |   |   |       |      

The Companys tax provision relates
primarily to an increase in the deferred tax liability
attributable to separate company profits of a foreign subsidiary
offset to some extent by a decrease in net deferred tax
liabilities attributable to operating losses of other foreign
subsidiaries. The increase in deferred tax liabilities includes
an adjustment related to 1997 through 2000 of approximately
$116.3 million that is primarily attributable to additional
tax depreciation being claimed during 2001 on original and
amended income tax returns.

F-31



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

|                                            |                                 |               |          |         |  |   |          |         | 
|------------------------------------------- | ------------------------------- | ------------- | -------- | ------- |  | - | -------- | ------- | 
|                                            |                                 |              
|                                            |                                 | December 31, 
|                                            |                                 |              
|                                            |                                 | 2001          |          | 2000   
|                                            |                                 |               |          |        
|                                            |                                 |              
|                                            |                                 | (in millions)
|Deferred tax liabilities:                   |                                 |               |          |         |  |   |          |        
|                                            | Intangibles                     |               | $        | 68.9    |  |   | $        | 113.3   | 
|                                            | Depreciation and amortization   |               |          | 467.5   |  |   |          | 667.0   | 
|                                            |                                 |               |          |         |  |   |          |        
|Total deferred tax liabilities              |                                 |               | 536.4    |         |  |   | 780.3    |        
|Deferred tax assets:                        |                                 |               |          |         |  |   |          |        
|                                            | Net operating losses            |               |          | 2,154.6 |  |   |          | 1,582.4 | 
|                                            | Net deferred interest expense   |               |          | 239.9   |  |   |          | 198.5   | 
|                                            | Fixed assets                    |               |          | 370.2   |  |   |          | 277.9   | 
|                                            | Equity investments              |               |          | 52.5    |  |   |          |        | 
|                                            | Inventory                       |               |          | 13.7    |  |   |          | 16.4    | 
|                                            | Purchase accounting liabilities |               |          | 16.5    |  |   |          | 158.5   | 
|                                            | Other                           |               |          | 59.8    |  |   |          | 34.0    | 
|                                            |                                 |               |          |         |  |   |          |        
|Total deferred tax assets                   |                                 |               | 2,907.2  |         |  |   | 2,267.7  |        
|                                            |                                 |               |          |         |  |   |          |        
|Valuation allowance for deferred tax assets |                                 |               | (2,631.7 | )       |  |   | (1,692.8 | )      
|                                            |                                 |               |          |         |  |   |          |        
|Net deferred tax assets                     |                                 |               | 275.5    |         |  |   | 574.9    |        
|                                            |                                 |               |          |         |  |   |          |        
|Net deferred tax liabilities                |                                 | $             | 260.9    |         |  | $ | 205.4    |        
|                                            |                                 |               |          |         |  |   |          |        

At December 31, 2001, the Company had a
valuation allowance against its deferred tax assets to the
extent it was not more likely than not that such assets would be
realized in the future. At December 31, 2001, the valuation
allowance includes approximately $535.0 million, which, if
realized, would be accounted for as a reduction to goodwill or
an increase in additional paid-in capital.

At December 31, 2001, the Company had net
operating loss carryforwards of approximately
$1,300.0 million for U.S. federal income tax purposes that
expire in varying amounts commencing in 2009. This excludes net
operating loss carryforwards of companies that are resident in
both the U.S. and the UK. The Company also has UK net operating
loss carryforwards of approximately $5,250.0 million that
have no expiration date. Pursuant to UK law, these net operating
losses are only available to offset income of the separate
entity that generated the loss. A portion of the UK net
operating loss carryforward relates to dual resident companies,
of which the U.S. net operating loss carryforward amount is
approximately $1,100.0 million.

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

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

F-32



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

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

|                                          |                                                    |                         |          |         |  |      |          |       |  |   |        |       | 
|----------------------------------------- | -------------------------------------------------- | ----------------------- | -------- | ------- |  | ---- | -------- | ----- |  | - | ------ | ----- | 
|                                          |                                                    |                        
|                                          |                                                    | Year Ended December 31,
|                                          |                                                    |                        
|                                          |                                                    | 2001                    |          | 2000    |  | 1999
|                                          |                                                    |                         |          |         |  |     
|                                          |                                                    |                        
|                                          |                                                    | (in millions)          
|(Benefit) at federal statutory rate (35%) |                                                    | $                       | (4,962.3 | )       |  | $    | (1,076.1 | )     |  | $ | (269.9 | )    
|Add:                                      |                                                    |                         |          |         |  |      |          |       |  |   |        |      
|                                          | Non-deductible asset impairments                   |                         |          | 3,329.0 |  |      |          |      |  |   |        |      | 
|                                          | Foreign losses with no benefit                     |                         |          | 1,135.8 |  |      |          | 815.7 |  |   |        | 110.2 | 
|                                          | U.S. losses with no benefit                        |                         |          | 443.6   |  |      |          | 149.3 |  |   |        | 123.7 | 
|                                          | Prior year accelerated depreciation                |                         |          | 116.3   |  |      |          |      |  |   |        |      | 
|                                          | State and local income tax, net of federal benefit |                         |          | 0.8     |  |      |          | 0.1   |  |   |        | 0.7   | 
|                                          |                                                    |                         |          |         |  |      |          |       |  |   |        |      
|                                          |                                                    | $                       | 63.2     |         |  | $    | (111.0   | )     |  | $ | (35.3  | )    
|                                          |                                                    |                         |          |         |  |      |          |       |  |   |        |      

15.     Fair Values
of Financial Instruments

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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and cash equivalents:The carrying amounts reported in the
	consolidated balance sheets approximate fair value.                                                                                                                                                                                                                                                                                                                                                                 
|
| | Long-term debt:The
	carrying amounts of the bank credit facilities and the senior
	secured financing approximate their fair values. The fair values
	of the Companys other debt in the following table are
	based on the quoted market prices.                                                                                                                                                                                                                                     
|
| | Redeemable Preferred Stock:The fair value of the 13% redeemable
	preferred stock is based on the quoted market price. As of
	December 31, 2001, the remaining redeemable preferred stock
	is estimated by reference to the fair value of the 13%
	redeemable preferred stock. As of December 31, 2000, the
	fair value of the 5% preferred stock is estimated using
	discounted cash flow analyses based on the Companys
	current borrowing rate for similar types of arrangements.

F-33



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

The carrying amounts and fair values of the
Companys financial instruments are as follows:

|                            |                                    |                   |       |                   |  |          |       |            |  |   |       |         |  |   |       |         | 
|--------------------------- | ---------------------------------- | ----------------- | ----- | ----------------- |  | -------- | ----- | ---------- |  | - | ----- | ------- |  | - | ----- | ------- | 
|                            |                                    |                   |       |                  
|                            |                                    | December 31, 2001 |       | December 31, 2000
|                            |                                    |                   |       |                  
|                            |                                    | Carrying          |       |                   |  | Carrying |       |           
|                            |                                    | Amount            |       | Fair Value        |  | Amount   |       | Fair Value
|                            |                                    |                   |       |                   |  |          |       |           
|                            |                                    |                  
|                            |                                    | (in millions)    
|Cash and cash equivalents   |                                    | $                 | 504.6 |                   |  | $        | 504.6 |            |  | $ | 579.4 |         |  | $ | 579.4 |        
|Long-term debt:             |                                    |                   |       |                   |  |          |       |            |  |   |       |         |  |   |       |        
|                            | 5 3/4% Convertible Notes           |                   |       | 1,200.0           |  |          |       | 132.0      |  |   |       | 1,200.0 |  |   |       | 582.0   | 
|                            | 5 3/4% Convertible Notes           |                   |       | 100.0             |  |          |       | 29.0       |  |   |       |        |  |   |       |        | 
|                            | Credit Agreements                  |                   |       | 3,861.4           |  |          |       | 3,861.4    |  |   |       | 3,405.6 |  |   |       | 3,405.6 | 
|                            | Term Loan and Revolving Facilities |                   |       | 2,154.0           |  |          |       | 2,154.0    |  |   |       | 1,987.3 |  |   |       | 1,987.3 | 
|                            | 12 3/4% Notes                      |                   |       | 277.8             |  |          |       | 91.7       |  |   |       | 277.8   |  |   |       | 255.6   | 
|                            | 11 1/2% Notes                      |                   |       | 1,050.0           |  |          |       | 336.0      |  |   |       | 1,040.5 |  |   |       | 913.5   | 
|                            | 10% Notes                          |                   |       | 400.0             |  |          |       | 120.0      |  |   |       | 400.0   |  |   |       | 348.0   | 
|                            | 9 1/2% Sterling Senior Notes       |                   |       | 181.4             |  |          |       | 60.1       |  |   |       | 186.5   |  |   |       | 154.2   | 
|                            | 10 3/4% Sterling Notes             |                   |       | 382.3             |  |          |       | 124.3      |  |   |       | 353.6   |  |   |       | 242.3   | 
|                            | 9 3/4% Notes                       |                   |       | 1,153.8           |  |          |       | 338.0      |  |   |       | 1,048.5 |  |   |       | 715.0   | 
|                            | 9 3/4% Sterling Notes              |                   |       | 385.9             |  |          |       | 124.8      |  |   |       | 360.8   |  |   |       | 214.7   | 
|                            | 11 1/2% Notes                      |                   |       | 625.0             |  |          |       | 200.0      |  |   |       | 625.0   |  |   |       | 556.3   | 
|                            | 12 3/8% Notes                      |                   |       | 364.9             |  |          |       | 108.0      |  |   |       | 323.6   |  |   |       | 252.0   | 
|                            | 7% Convertible Notes               |                   |       | 489.8             |  |          |       | 53.9       |  |   |       | 599.3   |  |   |       | 470.5   | 
|                            | 9 1/4% Euro Notes                  |                   |       | 222.5             |  |          |       | 74.6       |  |   |       | 234.7   |  |   |       | 207.7   | 
|                            | 9 7/8% Euro Notes                  |                   |       | 311.5             |  |          |       | 104.4      |  |   |       | 328.6   |  |   |       | 269.4   | 
|                            | 11 1/2% Euro Deferred Notes        |                   |       | 135.6             |  |          |       | 44.9       |  |   |       | 127.9   |  |   |       | 99.6    | 
|                            | 11 7/8% Senior Notes               |                   |       | 490.7             |  |          |       | 160.0      |  |   |       | 489.6   |  |   |       | 445.0   | 
|                            | 12 3/8% Euro Notes                 |                   |       | 267.8             |  |          |       | 90.8       |  |   |       |        |  |   |       |        | 
|                            | 6 3/4% Convertible Notes           |                   |       | 1,150.0           |  |          |       | 353.6      |  |   |       |        |  |   |       |        | 
|                            | Working Capital Agreement          |                   |       | 145.4             |  |          |       | 145.4      |  |   |       |        |  |   |       |        | 
|                            | Senior Secured Financing           |                   |       | 290.9             |  |          |       | 290.9      |  |   |       |        |  |   |       |        | 
|                            | 11.2% Debentures                   |                   |       | 517.3             |  |          |       | 367.3      |  |   |       | 517.3   |  |   |       | 439.7   | 
|                            | 13 1/4% Notes                      |                   |       | 285.1             |  |          |       | 77.0       |  |   |       | 285.1   |  |   |       | 270.8   | 
|                            | 11 3/4% Notes                      |                   |       | 531.0             |  |          |       | 132.8      |  |   |       | 531.0   |  |   |       | 467.3   | 
|                            | 10 3/4% Notes                      |                   |       | 415.1             |  |          |       | 100.9      |  |   |       | 373.9   |  |   |       | 281.7   | 
|                            | 10% Sterling Notes                 |                   |       | 196.3             |  |          |       | 143.4      |  |   |       | 201.9   |  |   |       | 161.5   | 
|                            | 9 1/8% Notes                       |                   |       | 110.0             |  |          |       | 71.5       |  |   |       | 110.0   |  |   |       | 89.7    | 
|Redeemable Preferred Stock: |                                    |                   |       |                   |  |          |       |            |  |   |       |         |  |   |       |        
|                            | 13% Redeemable Preferred Stock     |                   |       | 184.6             |  |          |       | 3.7        |  |   |       | 161.9   |  |   |       | 121.3   | 
|                            | 5% Preferred Stock                 |                   |       |                  |  |          |       |           |  |   |       | 1,921.3 |  |   |       | 1,781.8 | 
|                            | Variable Coupon Preferred Stock    |                   |       | 477.9             |  |          |       | 7.2        |  |   |       |        |  |   |       |        | 
|                            | 6.5% Preferred Stock               |                   |       | 89.5              |  |          |       | 1.3        |  |   |       |        |  |   |       |        | 
|                            | 5% Convertible Preferred Stock     |                   |       | 2,029.1           |  |          |       | 30.5       |  |   |       |        |  |   |       |        | 

F-34



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

16.     Related Party
Transactions

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

In the fourth quarter of 1999, CoreComm Limited
(CoreComm) (which was formed in 1998 and has certain
common officers and directors with the Company) began charging
the Company a percentage of its office rent and supplies expense
in respect of certain facilities which were shared with the
Company. In 1999, the Company charged CCPR, CCII and CoreComm
$0.7 million, $0.4 million and $2.3 million,
respectively, for direct costs where identifiable and a fixed
percentage of its corporate overhead, net of CoreComms
charges to the Company. Charges to CCPR and to CCII ceased in
1999 due to each of them being acquired and the resulting
termination of services. In 2001 and 2000, the Company charged
CoreComm $0.3 million and $0.9 million, respectively,
for direct costs where identifiable and a fixed percentage of
its corporate overhead, net of CoreComms charges to the
Company. These charges reduced corporate expenses in 2001, 2000
and 1999. It is not practicable to determine the amounts of
these expenses that would have been incurred had the Company
operated as an unaffiliated entity. In the opinion of management
of the Company, the allocation methods are reasonable.

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

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

On April 12, 2001, the Company purchased
$15.0 million of an unsecured convertible note from
CoreComm and received warrants to purchase 770,000 shares of
CoreComm common stock at an exercise price of $.01 per share
that expire in April 2011. In addition, concurrently with the
note purchase and without additional compensation, the Company
entered into a network and software agreement with CoreComm.
Under the agreement, CoreComm will provide U.S. network
access for Internet traffic from the Companys UK customers
for three years, as well as a royalty free license to use
certain billing and provisioning software and know-how. Interest
on the notes is at 10.75% per annum, payable semiannually
beginning on October 15, 2001. The interest is payable in
kind by the issuance of additional notes in such principal
amount equal to the interest payment that is then due. The notes
are convertible into CoreComm common stock prior to maturity at
a conversion price of $1.00 per share, subject to adjustment.
Additional notes issued for interest will have an initial
conversion price equal to 120% of the weighted average closing
price of CoreComm common stock for a specified period. The
Company and CoreComm have agreed to certain modifications to the
conversion feature in connection with CoreComms
recapitalization in December 2001.

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

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

F-35



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##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

17.     Shareholders
Equity

Stock
Splits

In September 1999, the Company declared a 5-for-4
stock split by way of a stock dividend with respect to its
common stock. The record date for this dividend was
October 4, 1999 and the payment date was October 7,
1999. In January 2000, the Company declared a 5-for-4 stock
split by way of a stock dividend with respect to its common
stock. The record date for this dividend was January 31,
2000 and the payment date was February 3, 2000. Common
stock amounts in the notes to consolidated financial statements
and all per share data have been adjusted to reflect the stock
splits.

Sales of
Preferred Stock, Common Stock and Warrants

In May 2000, in connection with the ConsumerCo
acquisition, France Telecom paid £1,555.6 million
($2,327.6 million) for 42.2 million shares of the
Companys common stock and £1,244.4 million
($1,862.0 million) for 2.0 million shares of the
Companys 5% Cumulative Participating Convertible Preferred
Stock (the 5% Preferred Stock).

In August 1999, the Company received
$1,000.0 million in cash from France Telecom in exchange
for 750,000 shares of the Companys 5% Preferred Stock and
4.2 million shares of the Companys common stock.

In January 1999, the Company received
$500.0 million in cash from Microsoft Corp.
(Microsoft) in exchange for 500,000 shares of the
Companys 5.25% Convertible Preferred Stock (the
5.25% Preferred Stock) and warrants to purchase
1.9 million shares of the Companys common stock at an
exercise price of $53.76 per share. Dividends were payable
quarterly at the Companys option in cash, common stock or
additional shares of preferred stock. The Company issued
approximately 25,000 shares of 5.25% Preferred Stock for
dividend payments of $24.6 million through
December 31, 1999. In February 2000, all of the 5.25%
Preferred Stock was converted into 8.3 million shares of
the Companys common stock.

Series Preferred
Stock

In September 1998, the Company issued 125,000
shares of 9.9% Non-voting Mandatorily Redeemable Preferred
Stock, Series A (the Series A Preferred
Stock) in connection with an acquisition. Each share of
Series A Preferred Stock had a stated value of $1,000.
Cumulative dividends accrued at 9.9% of the stated value per
share. Dividends were payable when and if declared by the Board
of Directors. In December 1999, all of the outstanding shares of
the Series A Preferred Stock were redeemed for cash of
$140.8 million, which included $15.5 million for
accrued dividends.

In December 1998, the Company issued 52,000
shares of 9.9% Non-voting Mandatorily Redeemable Preferred
Stock, Series B (the Series B Preferred
Stock) in connection with an acquisition. Each share of
Series B Preferred Stock had a stated value of $1,000.
Cumulative dividends accrued at 9.9% of the stated value per
share. Dividends were payable when and if declared by the Board
of Directors. In June 2000, all of the outstanding shares of the
Series B Preferred Stock were converted into 903,000 shares of
the Companys common stock.

The 5% Preferred Stock has a stated value of
$1,000 per share, is convertible into common stock at a
conversion price of $80 per share and is redeemable ten years
from the issue date, at the Companys option, for cash,
shares of common stock or a combination of both. The 5%
Preferred Stock may be redeemed by the Company on the earlier of
seven years from the issue date or the date that is both four
years from the issue date and after the Companys common
stock has traded above $96 per share for 25 consecutive trading
days. Dividends are payable quarterly at the Companys
option in cash, common stock or additional shares of 5%
Preferred Stock. As of December 31, 2001, the Company has
accrued $250.0 million for dividends and has issued
approximately 213,000 shares for $213.0 million of such
accrued dividends.

F-36



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

At December 31, 2001, the 5% Preferred Stock
would have been convertible into an aggregate of
37.0 million shares of the Companys common stock.

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

|                             |  |          |          |          |  |       |         |    |  |  |          |   |  |  |           | 
|---------------------------- |  | -------- | -------- | -------- |  | ----- | ------- | -- |  |  | -------- | - |  |  | --------- | 
|                             |  | 9.9%     |          | 9.9%     |  |       |         |   
|                             |  | Series A |          | Series B |  | 5.25% |         | 5%
|                             |  |          |          |          |  |       |         |   
|Balance, December 31, 1998   |  |          | 125,000  |          |  |       | 52,000  |    |  |  |         |   |  |  |          | 
|Issued for cash              |  |          |         |          |  |       |        |    |  |  | 500,000  |   |  |  | 750,000   | 
|Issued for dividends         |  |          |         |          |  |       |        |    |  |  | 25,000   |   |  |  | 5,000     | 
|Redemption                   |  |          | (125,000 | )        |  |       |        |    |  |  |         |   |  |  |          | 
|                             |  |          |          |          |  |       |         |    |  |  |          |   |  |  |           | 
|Balance, December 31, 1999   |  |          |         |          |  |       | 52,000  |    |  |  | 525,000  |   |  |  | 755,000   | 
|Issued for cash              |  |          |         |          |  |       |        |    |  |  |         |   |  |  | 2,000,000 | 
|Issued for dividends         |  |          |         |          |  |       |        |    |  |  | 3,000    |   |  |  | 103,000   | 
|Conversion into common stock |  |          |         |          |  |       | (52,000 | )  |  |  | (528,000 | ) |  |  |          | 
|                             |  |          |          |          |  |       |         |    |  |  |          |   |  |  |           | 
|Balance, December 31, 2000   |  |          |         |          |  |       |        |    |  |  |         |   |  |  | 2,858,000 | 
|Issued for dividends         |  |          |         |          |  |       |        |    |  |  |         |   |  |  | 105,000   | 
|                             |  |          |          |          |  |       |         |    |  |  |          |   |  |  |           | 
|Balance, December 31, 2001   |  |          |         |          |  |       |        |    |  |  |         |   |  |  | 2,963,000 | 
|                             |  |          |          |          |  |       |         |    |  |  |          |   |  |  |           | 

Warrants

The Company had the following warrants
outstanding as of December 31, 2001: (a) warrants to
purchase an aggregate of 243,000 shares of common stock at
$15.22 per share issued in 1996 that expire in 2006 (256,000
were originally issued), (b) warrants to purchase an
aggregate of 997,000 shares of common stock at $27.77 per share
issued in 1998 that expire in 2008 (1,197,000 were originally
issued) and (c) warrants to purchase an aggregate of
1,875,000 shares of common stock at $53.76 per share issued in
1999 that expire in 2004 (1,875,000 were originally issued).

Shareholder
Rights Plan

The Rights Agreement provides that .48 of a Right
will be issued with each share of common stock issued on or
after October 13, 1993. The Rights are exercisable upon the
occurrence of certain potential takeover events and will expire
in October 2003 unless previously redeemed by the Company. When
exercisable, each Right entitles the owner to purchase from the
Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock (Rights Preferred
Stock) at a purchase price of $100.

The Rights Preferred Stock will be entitled to a
minimum preferential quarterly dividend payment of $.01 per
share and will be entitled to an aggregate dividend of 208.33
times the dividend, if any, declared per share of common stock.
In the event of liquidation, the holders of Rights Preferred
Stock will be entitled to a minimum preferential liquidation
payment of $1 per share and will be entitled to an aggregate
payment of 208.33 times the payment made per share of common
stock. Each share of Rights Preferred Stock will have
208.33 votes and will vote together with the common stock.
In the event of any merger, consolidation or other transaction
in which shares of common stock are changed or exchanged, each
share of Rights Preferred Stock will be entitled to receive
208.33 times the amount received per share of common stock. The
Rights are protected by customary antidilution provisions.

F-37



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

Stock
Options

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

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

There are 83,438,000 shares of common stock
reserved for issuance under the 1998 Non-Qualified Stock Option
Plan, and there are 19,684,000 shares available for issuance at
December 31, 2001. The exercise price of a NQSO shall be
determined by the Compensation and Option Committee. Options are
generally exercisable ratably over five to ten years while the
optionee remains an employee of the Company. Options will expire
ten years after the date of the grant.

In December 2000, the Board of Directors approved
the rescission of the exercise of ISOs for 156,000 shares of the
Companys common stock, and the Company returned cash of
$1.1 million. The rescission was accounted for as a
modification of the original options that resulted in a new
measurement date. On the new measurement date the Company
recognized no compensation expense.

Pro forma information regarding net loss and net
loss per share is required by SFAS No. 123, and has been
determined as if the Company had accounted for its employee
stock options under the fair value method of that Statement. The
fair value for these options was estimated at the date of grant
using the Black-Scholes option pricing model with the following
weighted-average assumptions for 2001, 2000 and 1999: risk-free
interest rates of 4.47%, 5.30% and 6.81%, respectively, dividend
yield of 0%, volatility factor of the expected market price of
the Companys common stock of .702, .385 and .336,
respectively, and a weighted-average expected life of the option
of 10 years.

The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded options
which have no vesting restrictions and are fully transferable.
In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price
volatility. Because the Companys 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 and net loss per
share for the years ended December 31, 2001, 2000 and 1999
are not likely to be representative of the

F-38



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

pro forma effects on net loss and net loss per
share in future years. Following is the Companys pro forma
information:

|                                                  |  |                                      |           |      |  |      |          |   |  |   |        |  
|------------------------------------------------- |  | ------------------------------------ | --------- | ---- |  | ---- | -------- | - |  | - | ------ | -
|                                                  |  |                                     
|                                                  |  | Year Ended December 31,             
|                                                  |  |                                     
|                                                  |  | 2001                                 |           | 2000 |  | 1999
|                                                  |  |                                      |           |      |  |     
|                                                  |  |                                     
|                                                  |  | (in millions, except per share data)
|Pro forma net (loss)                              |  | $                                    | (14,509.6 | )    |  | $    | (3,220.3 | ) |  | $ | (822.7 | )
|Basic and diluted pro forma net (loss) per
	share |  |                                      | (53.75    | )    |  |      | (15.73   | ) |  |   | (7.51  | )

A summary of the Companys stock option
activity and related information for the years ended
December 31 follows:

|                                |  |               |      |           |  |               |       |           |  |               |      |           |  |   |       |  |  |  |      |   |  |   |       | 
|------------------------------- |  | ------------- | ---- | --------- |  | ------------- | ----- | --------- |  | ------------- | ---- | --------- |  | - | ----- |  |  |  | ---- | - |  | - | ----- | 
|                                |  |               |      |           |  |              
|                                |  | 2001          |      | 2000      |  | 1999         
|                                |  |               |      |           |  |              
|                                |  |               |      | Weighted- |  |               |       | Weighted- |  |               |      | Weighted-
|                                |  |               |      | Average   |  |               |       | Average   |  |               |      | Average  
|                                |  | Number of     |      | Exercise  |  | Number of     |       | Exercise  |  | Number of     |      | Exercise 
|                                |  | Options       |      | Price     |  | Options       |       | Price     |  | Options       |      | Price    
|                                |  |               |      |           |  |               |       |           |  |               |      |          
|                                |  | (in millions) |      |           |  | (in millions) |       |           |  | (in millions) |      |          
|Outstanding  beginning of year |  |               | 61.4 |           |  | $             | 41.52 |           |  |               | 29.2 |           |  | $ | 24.60 |  |  |  | 25.7 |   |  | $ | 17.29 | 
|Granted                         |  |               | 14.3 |           |  |               | 12.55 |           |  |               | 34.8 |           |  |   | 54.90 |  |  |  | 6.4  |   |  |   | 50.35 | 
|Exercised                       |  |               | (1.1 | )         |  |               | 11.93 |           |  |               | (2.1 | )         |  |   | 17.13 |  |  |  | (2.6 | ) |  |   | 15.95 | 
|Forfeited                       |  |               | (2.7 | )         |  |               | 42.46 |           |  |               | (0.5 | )         |  |   | 83.31 |  |  |  | (0.3 | ) |  |   | 24.22 | 
|                                |  |               |      |           |  |               |       |           |  |               |      |           |  |   |       |  |  |  |      |   |  |   |       | 
|Outstanding  end of year       |  |               | 71.9 |           |  | $             | 36.13 |           |  |               | 61.4 |           |  | $ | 41.52 |  |  |  | 29.2 |   |  | $ | 24.60 | 
|                                |  |               |      |           |  |               |       |           |  |               |      |           |  |   |       |  |  |  |      |   |  |   |       | 
|Exercisable at end of year      |  |               | 24.7 |           |  | $             | 27.50 |           |  |               | 16.3 |           |  | $ | 21.82 |  |  |  | 12.2 |   |  | $ | 14.97 | 
|                                |  |               |      |           |  |               |       |           |  |               |      |           |  |   |       |  |  |  |      |   |  |   |       | 

Weighted-average fair value of options,
calculated using the Black-Scholes option pricing model, granted
during 2001, 2000 and 1999 is $5.69, $32.19 and $30.97
respectively.

The following table summarizes the status of the
stock options outstanding and exercisable at December 31,
2001:

|                 |  |                           |      |                           |  |           |           |               |  |           |        |  |  |  |      |  |  |   |        | 
|---------------- |  | ------------------------- | ---- | ------------------------- |  | --------- | --------- | ------------- |  | --------- | ------ |  |  |  | ---- |  |  | - | ------ | 
|                 |  |                           |      |                          
|                 |  | Stock Options Outstanding |      | Stock Options Exercisable
|                 |  |                           |      |                          
|                 |  |                           |      | Weighted-                 |  | Weighted- |           |               |  | Weighted-
|                 |  |                           |      | Remaining                 |  | Average   |           |               |  | Average  
|Range of         |  | Number of                 |      | Contractual               |  | Exercise  |           | Number of     |  | Exercise 
|Exercise Prices  |  | Options                   |      | Life                      |  | Price     |           | Options       |  | Price    
|                 |  |                           |      |                           |  |           |           |               |  |          
|                 |  | (in millions)             |      |                           |  |           |           | (in millions) |  |          
|$0.35 to $9.36   |  |                           | 4.4  |                           |  |           | 4.1 Years |               |  | $         | 5.434  |  |  |  | 4.4  |  |  | $ | 5.434  | 
|$10.00 to $18.40 |  |                           | 15.4 |                           |  |           | 5.2 Years |               |  | $         | 11.153 |  |  |  | 5.9  |  |  | $ | 12.972 | 
|$19.86 to $27.84 |  |                           | 13.5 |                           |  |           | 7.6 Years |               |  | $         | 23.384 |  |  |  | 5.7  |  |  | $ | 23.226 | 
|$28.06 to $35.64 |  |                           | 0.7  |                           |  |           | 7.3 Years |               |  | $         | 30.711 |  |  |  | 0.4  |  |  | $ | 30.811 | 
|$36.12 to $40.19 |  |                           | 0.9  |                           |  |           | 8.2 Years |               |  | $         | 38.601 |  |  |  | 0.3  |  |  | $ | 38.650 | 
|$42.44 to $47.44 |  |                           | 14.5 |                           |  |           | 8.4 Years |               |  | $         | 44.444 |  |  |  | 3.1  |  |  | $ | 44.401 | 
|$48.38 to $53.76 |  |                           | 4.9  |                           |  |           | 7.6 Years |               |  | $         | 50.373 |  |  |  | 2.5  |  |  | $ | 50.390 | 
|$57.60 to $63.63 |  |                           | 17.1 |                           |  |           | 7.8 Years |               |  | $         | 63.416 |  |  |  | 2.2  |  |  | $ | 62.587 | 
|$68.20 to $75.56 |  |                           | 0.1  |                           |  |           | 8.1 Years |               |  | $         | 75.413 |  |  |  | 0.1  |  |  | $ | 75.397 | 
|$91.13 to $97.50 |  |                           | 0.4  |                           |  |           | 8.1 Years |               |  | $         | 93.713 |  |  |  | 0.1  |  |  | $ | 93.713 | 
|                 |  |                           |      |                           |  |           |           |               |  |           |        |  |  |  |      |  |  |   |        | 
|Total            |  |                           | 71.9 |                           |  |           |           |               |  |           |        |  |  |  | 24.7 |  |  |   |        | 
|                 |  |                           |      |                           |  |           |           |               |  |           |        |  |  |  |      |  |  |   |        | 

F-39



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

As of December 31, 2001, the Company had
173.6 million shares of its common stock reserved for
issuance upon the exercise of warrants and stock options and the
conversion of debt and preferred stock.

18.     Employee
Benefit Plans

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

At December 31, 2001, the projected benefit
obligations of Cablecoms and NTL Business defined
benefit pension plans exceeded the fair value of its respective
plan assets by $3.4 million and $3.0 million,
respectively.

|                                               |                                                  |                         |        |               |  |   |       |      |          
|---------------------------------------------- | ------------------------------------------------ | ----------------------- | ------ | ------------- |  | - | ----- | ---- | ---------
|                                               |                                                  |                        
|                                               |                                                  | Year Ended December 31,
|                                               |                                                  |                        
|                                               |                                                  | 2001                    |        | 2000         
|                                               |                                                  |                         |        |              
|                                               |                                                  |                        
|                                               |                                                  | (in millions)          
|Change in benefit obligation                   |                                                  |                         |        |               |  |   |       |     
|Benefit obligation at beginning of year        |                                                  |                         | $324.1 |               |  | $ | 197.1 |     
|Acquisition                                    |                                                  |                         |       |               |  |   | 116.9 |     
|Service cost                                   |                                                  |                         | 17.3   |               |  |   | 16.7  |     
|Interest cost                                  |                                                  |                         | 16.8   |               |  |   | 16.8  |     
|Actuarial losses (gains)                       |                                                  |                         | 5.4    |               |  |   | (3.4  | )   
|Benefits paid                                  |                                                  |                         | (9.3   | )             |  |   | (8.3  | )   
|Foreign currency exchange rate changes         |                                                  |                         | (8.2   | )             |  |   | (11.7 | )   
|                                               |                                                  |                         |        |               |  |   |       |     
|Benefit obligation at end of year              |                                                  |                         | $346.1 |               |  | $ | 324.1 |     
|                                               |                                                  |                         |        |               |  |   |       |     
|Change in plan assets                          |                                                  |                         |        |               |  |   |       |     
|Fair value of plan assets at beginning of year |                                                  |                         | $420.2 |               |  | $ | 278.4 |     
|Acquisition                                    |                                                  |                         |       |               |  |   | 133.2 |     
|Actual return on plan assets                   |                                                  |                         | (46.0  | )             |  |   | 15.8  |     
|Company contributions                          |                                                  |                         | 12.4   |               |  |   | 12.5  |     
|Plan participants contributions               |                                                  |                         | 6.5    |               |  |   | 6.2   |     
|Benefits paid                                  |                                                  |                         | (9.4   | )             |  |   | (8.3  | )   
|Foreign currency exchange rate changes         |                                                  |                         | (12.1  | )             |  |   | (17.6 | )   
|                                               |                                                  |                         |        |               |  |   |       |     
|Fair value of plan assets at end of year       |                                                  |                         | $371.6 |               |  | $ | 420.2 |     
|                                               |                                                  |                         |        |               |  |   |       |     
|Funded status of the plan                      |                                                  |                         | $ 25.5 |               |  | $ | 96.1  |     
|Unrecognized net actuarial losses (gains)      |                                                  |                         | 5.4    |               |  |   | (79.2 | )   
|Unrecognized transition obligation             |                                                  |                         | 5.8    |               |  |   | 6.2   |     
|                                               |                                                  |                         |        |               |  |   |       |     
|Prepaid benefit cost                           |                                                  |                         | $ 36.7 |               |  | $ | 23.1  |     
|                                               |                                                  |                         |        |               |  |   |       |     
|Actuarial assumptions:                         |                                                  |                         |        |               |  |   |       |     
|                                               | Weighted average discount rate                   |                         |        | 4.50%  6.00% |  |   |       | 4.50 | %  6.00%
|                                               | Weighted average rate of compensation increase   |                         |        | 2.00%  4.00% |  |   |       | 2.00 | %  4.25%
|                                               | Expected long-term rate of return on plan assets |                         |        | 5.50%  7.50% |  |   |       | 5.50 | %  7.75%

F-40



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

The components of net pension costs are as
follows:

|                              |  |                         |       |      |  |      |       |   |  |   |       |  
|----------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                              |  |                        
|                              |  | Year Ended December 31,
|                              |  |                        
|                              |  | 2001                    |       | 2000 |  | 1999
|                              |  |                         |       |      |  |     
|                              |  |                        
|                              |  | (in millions)          
|Service cost                  |  | $                       | 17.3  |      |  | $    | 16.7  |   |  | $ | 12.0  |  
|Interest cost                 |  |                         | 16.8  |      |  |      | 16.8  |   |  |   | 12.0  |  
|Actual return on plan assets  |  |                         | 46.0  |      |  |      | (15.7 | ) |  |   | (43.1 | )
|Net amortization and deferral |  |                         | (79.5 | )    |  |      | (19.4 | ) |  |   | 26.8  |  
|                              |  |                         |       |      |  |      |       |   |  |   |       |  
|                              |  | $                       | 0.6   |      |  | $    | (1.6  | ) |  | $ | 7.7   |  
|                              |  |                         |       |      |  |      |       |   |  |   |       |  

19.     Leases

Certain of the Companys facilities and
equipment are leased under operating or capital leases.

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

|                               |  |              |       |      |  |   |       |  
|------------------------------ |  | ------------ | ----- | ---- |  | - | ----- | -
|                               |  |             
|                               |  | December 31,
|                               |  |             
|                               |  | 2001         |       | 2000
|                               |  |              |       |     
|Land, buildings and equipment  |  | $            | 100.3 |      |  | $ | 95.8  |  
|Less: accumulated depreciation |  |              | (28.5 | )    |  |   | (22.2 | )
|                               |  |              |       |      |  |   |       |  
|                               |  | $            | 71.8  |      |  | $ | 73.6  |  
|                               |  |              |       |      |  |   |       |  

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

|                                         |            |         |        |           |  |   |       |       | 
|---------------------------------------- | ---------- | ------- | ------ | --------- |  | - | ----- | ----- | 
|                                         |            | Capital |        | Operating
|                                         |            | Leases  |        | leases   
|                                         |            |         |        |          
|Year ending December 31:                 |            |         |        |           |  |   |       |      
|                                         | 2002       |         | $      | 9.3       |  |   | $     | 96.7  | 
|                                         | 2003       |         |        | 8.2       |  |   |       | 73.9  | 
|                                         | 2004       |         |        | 7.4       |  |   |       | 55.5  | 
|                                         | 2005       |         |        | 6.5       |  |   |       | 44.0  | 
|                                         | 2006       |         |        | 6.2       |  |   |       | 42.3  | 
|                                         | Thereafter |         |        | 155.2     |  |   |       | 250.9 | 
|                                         |            |         |        |           |  |   |       |      
|Total minimum lease payments             |            |         | 192.8  |           |  | $ | 563.3 |      
|                                         |            |         |        |           |  |   |       |      
|Less: amount representing interest       |            |         | (129.8 | )         |  |   |       |      
|                                         |            |         |        |           |  |   |       |      
|Present value of net minimum obligations |            |         | 63.0   |           |  |   |       |      
|Less: current portion                    |            |         | (63.0  | )         |  |   |       |      
|                                         |            |         |        |           |  |   |       |      
|                                         |            | $       |       |           |  |   |       |      
|                                         |            |         |        |           |  |   |       |      

Leases for buildings, office space and equipment
extend through 2031. Total rental expense for the years ended
December 31, 2001, 2000 and 1999 under operating leases was
$90.9 million, $56.2 million and $36.7 million,
respectively.

F-41



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

20.     Commitments
and Contingent Liabilities

At December 31, 2001, the Company was
committed to pay approximately $1,672.0 million for
equipment and services and for investments in and loans to
affiliates. This amount includes approximately
$1,238.0 million for operations and maintenance and other
commitments through 2013.

The Company has agreed to provide funds to its
unconsolidated affiliates generally if and when requested to do
so and only upon the satisfaction of certain conditions. The
estimated aggregate amount as of December 31, 2001 was
$73.9 million. These unconsolidated affiliates include the
media partnerships with the Football League and with various UK
football clubs for Internet marketing and sponsorships. The
Companys wholly-owned indirect subsidiary, Premium TV
Limited, has entered into these football related partnerships.

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

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

21.     Industry
Segments

The Company has four reportable segments:
Broadcast Services, Consumer Services, Business Services and
Shared Services. The Broadcast Services segment operates in the
UK and Australia and includes digital and analog television and
radio broadcasting, rental of antenna space on the
Companys owned and leased towers and sites and associated
services, and satellite and media services. Consumer Services
include telephony, cable television, Internet access and
interactive services in regional franchise areas in the UK,
Ireland, France and Switzerland. The Business Services segment
operates primarily in the UK and includes telephony, national
and international wholesale carrier telecommunications, and
radio communications services to the emergency services
community. Shared Services principally include network and
information technology management, finance, human resources and
facilities management. Shared Services also includes assets and
related depreciation and amortization that are not allocated to
another segment.

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

F-42



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

|                                   |  |               |         |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|---------------------------------- |  | ------------- | ------- | -------- |  | -------- | -------- | ------ |  | ----- | ------- |  |  | - | ------- | - |  | - | -------- | 
|                                   |  | Broadcast     |         | Consumer |  | Business |          | Shared |  | Total
|                                   |  |               |         |          |  |          |          |        |  |      
|                                   |  |              
|                                   |  | (in millions)
|Year ended December 31, 2001       |  |               |         |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 344.0   |          |  | $        | 2,514.6  |        |  | $     | 840.6   |  |  | $ |        |   |  | $ | 3,699.2  | 
|Depreciation and amortization      |  |               | 109.3   |          |  |          | 2,431.8  |        |  |       | 587.9   |  |  |   | 41.5    |   |  |   | 3,170.5  | 
|EBITDA(1)                          |  |               | 170.6   |          |  |          | 774.2    |        |  |       | 335.2   |  |  |   | (571.7  | ) |  |   | 708.3    | 
|Expenditures for long-lived assets |  |               | 145.2   |          |  |          | 1,373.2  |        |  |       | 172.1   |  |  |   | 599.5   |   |  |   | 2,290.0  | 
|Total assets(2)                    |  |               | 1,206.8 |          |  |          | 11,395.9 |        |  |       | 3,289.7 |  |  |   | 941.8   |   |  |   | 16,834.2 | 
|Year ended December 31, 2000       |  |               |         |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 318.8   |          |  | $        | 1,819.8  |        |  | $     | 702.2   |  |  | $ |        |   |  | $ | 2,840.8  | 
|Depreciation and amortization      |  |               | 88.3    |          |  |          | 1,825.6  |        |  |       | 184.2   |  |  |   | 24.7    |   |  |   | 2,122.8  | 
|EBITDA(1)                          |  |               | 151.9   |          |  |          | 447.6    |        |  |       | 226.2   |  |  |   | (481.6  | ) |  |   | 344.1    | 
|Expenditures for long-lived assets |  |               | 102.6   |          |  |          | 1,822.3  |        |  |       | 724.6   |  |  |   | 281.5   |   |  |   | 2,931.0  | 
|Total assets(3)                    |  |               | 1,219.4 |          |  |          | 22,672.6 |        |  |       | 3,746.0 |  |  |   | 745.7   |   |  |   | 28,383.7 | 
|Year ended December 31, 1999       |  |               |         |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 297.3   |          |  | $        | 834.3    |        |  | $     | 452.5   |  |  | $ |        |   |  | $ | 1,584.1  | 
|Depreciation and amortization      |  |               | 76.8    |          |  |          | 581.3    |        |  |       | 104.1   |  |  |   | 29.1    |   |  |   | 791.3    | 
|EBITDA(1)                          |  |               | 150.1   |          |  |          | 233.5    |        |  |       | 106.6   |  |  |   | (279.3  | ) |  |   | 210.9    | 
|Expenditures for long-lived assets |  |               | 74.5    |          |  |          | 591.3    |        |  |       | 356.7   |  |  |   | 131.8   |   |  |   | 1,154.3  | 
|Total assets(4)                    |  |               | 1,167.7 |          |  |          | 6,783.2  |        |  |       | 1,319.1 |  |  |   | 2,941.6 |   |  |   | 12,211.6 | 



---



|    |                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents earnings before interest, taxes,
	depreciation and amortization, franchise fees, non-cash
	compensation, other charges, corporate expenses, asset
	impairments, share of (losses) from equity investments, other
	(losses) gains, foreign currency transaction (losses) gains and
	extraordinary items.
|   
|(2) | At December 31, 2001, shared assets included
	$318.0 million of cash and cash equivalents,
	$0.1 million of goodwill and $623.7 million of other
	assets.                                                                                                                                                         
|   
|(3) | At December 31, 2000, shared assets included
	$487.1 million of cash, cash equivalents and marketable
	securities, $0.3 million of goodwill and
	$258.3 million of other assets.                                                                                                                                  
|   
|(4) | At December 31, 1999, shared assets included
	$2,669.4 million of cash, cash equivalents and marketable
	securities and $272.2 million in other assets.                                                                                                                                                           

F-43



---



##### 



NTL Incorporated and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)

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

|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |        |  
|----------------------------------------------- | ------------------------------------------- | ----------------------- | --------- | ------- | - | ---- | -------- | ------- | - | - | ------ | ------ | -
|                                                |                                             |                        
|                                                |                                             | Year Ended December 31,
|                                                |                                             |                        
|                                                |                                             | 2001                    |           | 2000    |   | 1999
|                                                |                                             |                         |           |         |   |     
|                                                |                                             |                        
|                                                |                                             | (in millions)          
|Segment Combined EBITDA                         |                                             | $                       | 708.3     |         |   | $    | 344.1    |         |   | $ | 210.9  |       
|(Add) Deduct:                                   |                                             |                         |           |         |   |      |          |         |   |   |        |       
|                                                | Franchise fees                              |                         |           |        |   |      |          |        |   |   |        | 16.5   |  
|                                                | Non-cash compensation                       |                         |           | 30.6    |   |      |          |        |   |   |        |       |  
|                                                | Other charges                               |                         |           | 311.7   |   |      |          | 92.7    |   |   |        | 16.2   |  
|                                                | Corporate expenses                          |                         |           | 66.8    |   |      |          | 47.5    |   |   |        | 29.4   |  
|                                                | Asset impairments                           |                         |           | 9,511.3 |   |      |          |        |   |   |        |       |  
|                                                | Depreciation and amortization               |                         |           | 3,170.5 |   |      |          | 2,122.8 |   |   |        | 791.3  |  
|                                                | Interest income and other, net              |                         |           | (51.1   | ) |      |          | (72.5   | ) |   |        | (67.8  | )
|                                                | Interest expense                            |                         |           | 1,440.9 |   |      |          | 1,036.8 |   |   |        | 680.7  |  
|                                                | Share of losses from equity investments     |                         |           | 244.6   |   |      |          | 70.9    |   |   |        | 18.4   |  
|                                                | Other losses (gains)                        |                         |           | 147.4   |   |      |          |        |   |   |        | (493.1 | )
|                                                | Foreign currency transaction losses (gains) |                         |           | 13.7    |   |      |          | 120.6   |   |   |        | (12.7  | )
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       
|                                                |                                             |                         | 14,886.4  |         |   |      | 3,418.8  |         |   |   | 978.9  |       
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       
|Loss before income taxes and extraordinary item |                                             | $                       | (14,178.1 | )       |   | $    | (3,074.7 | )       |   | $ | (768.0 | )     
|                                                |                                             |                         |           |         |   |      |          |         |   |   |        |       

22.     Geographic
Information

|                  |  |               |      |    |  |             |          |       |  |       |         |  |  |   |       |  |  |   |          | 
|----------------- |  | ------------- | ---- | -- |  | ----------- | -------- | ----- |  | ----- | ------- |  |  | - | ----- |  |  | - | -------- | 
|                  |  | United        |      |    |  |             |          |       |  |      
|                  |  | States        |      | UK |  | Switzerland |          | Other |  | Total
|                  |  |               |      |    |  |             |          |       |  |      
|                  |  |              
|                  |  | (in millions)
|2001              |  |               |      |    |  |             |          |       |  |       |         |  |  |   |       |  |  |   |          | 
|Revenues          |  | $             |     |    |  | $           | 3,170.3  |       |  | $     | 393.5   |  |  | $ | 135.4 |  |  | $ | 3,699.2  | 
|Long-lived assets |  |               | 17.3 |    |  |             | 11,844.8 |       |  |       | 2,630.9 |  |  |   | 788.1 |  |  |   | 15,281.1 | 
|2000              |  |               |      |    |  |             |          |       |  |       |         |  |  |   |       |  |  |   |          | 
|Revenues          |  | $             |     |    |  | $           | 2,434.8  |       |  | $     | 277.3   |  |  | $ | 128.7 |  |  | $ | 2,840.8  | 
|Long-lived assets |  |               | 26.7 |    |  |             | 21,751.7 |       |  |       | 3,839.8 |  |  |   | 974.1 |  |  |   | 26,592.3 | 
|1999              |  |               |      |    |  |             |          |       |  |       |         |  |  |   |       |  |  |   |          | 
|Revenues          |  | $             |     |    |  | $           | 1,508.2  |       |  | $     |        |  |  | $ | 75.9  |  |  | $ | 1,584.1  | 
|Long-lived assets |  |               | 1.6  |    |  |             | 8,227.6  |       |  |       |        |  |  |   | 663.8 |  |  |   | 8,893.0  | 

23.     Subsequent
Event

On April 2, 2002, the Company announced that
it completed the sale of its Australian broadcast business to
Macquarie Bank for A$850.0 million ($434.9 million) in
an all cash transaction. The net proceeds from the sale after
the repayment of the outstanding bank credit facility and
transaction related costs were approximately
A$574.0 million ($293.7 million).

F-44



---



##### 



NTL Incorporated

Schedule I  Condensed
Financial Information of Registrant

Condensed Balance Sheets


|                                                                                          |                                        |               |          |           |   |   |          |          |  
|----------------------------------------------------------------------------------------- | -------------------------------------- | ------------- | -------- | --------- | - | - | -------- | -------- | -
|                                                                                          |                                        |              
|                                                                                          |                                        | December 31, 
|                                                                                          |                                        |              
|                                                                                          |                                        | 2001          |          | 2000     
|                                                                                          |                                        |               |          |          
|                                                                                          |                                        |              
|                                                                                          |                                        | (in millions)
|Assets                                                                                    |                                        |               |          |           |   |   |          |         
|Current assets:                                                                           |                                        |               |          |           |   |   |          |         
|                                                                                          | Cash and cash equivalents              |               | $        | 124.3     |   |   | $        | 69.2     |  
|                                                                                          | Marketable securities                  |               |          |          |   |   |          | 60.0     |  
|                                                                                          | Other                                  |               |          | 1.0       |   |   |          | 0.9      |  
|                                                                                          |                                        |               |          |           |   |   |          |         
|Total current assets                                                                      |                                        |               | 125.3    |           |   |   | 130.1    |         
|Investments in and loans to affiliates, net                                               |                                        |               |         |           |   |   | 10,326.9 |         
|Deferred financing costs, net of accumulated
	amortization of $0.2 (2001) and none (2000) |                                        |               | 3.9      |           |   |   |         |         
|Note receivable from CoreComm Limited, net of
	allowance of $7.0                          |                                        |               | 9.2      |           |   |   |         |         
|                                                                                          |                                        |               |          |           |   |   |          |         
|Total assets                                                                              |                                        | $             | 138.4    |           |   | $ | 10,457.0 |         
|                                                                                          |                                        |               |          |           |   |   |          |         
|Liabilities and shareholders
	(deficiency) equity                                        |                                        |               |          |           |   |   |          |         
|Current liabilities                                                                       |                                        | $             | 142.3    |           |   | $ | 6.4      |         
|Investments in and loans to affiliates, net                                               |                                        |               | 3,764.8  |           |   |   |         |         
|Redeemable preferred stock                                                                |                                        |               | 2,773.7  |           |   |   | 2,083.2  |         
|Shareholders (deficiency) equity:                                                        |                                        |               |          |           |   |   |          |         
|                                                                                          | Series preferred stock                 |               |          |          |   |   |          |         |  
|                                                                                          | Common stock                           |               |          | 2.8       |   |   |          | 2.7      |  
|                                                                                          | Additional paid-in capital             |               |          | 13,720.0  |   |   |          | 13,764.7 |  
|                                                                                          | Accumulated other comprehensive (loss) |               |          | (1,072.8  | ) |   |          | (448.9   | )
|                                                                                          | (Deficit)                              |               |          | (19,192.4 | ) |   |          | (4,951.1 | )
|                                                                                          |                                        |               |          |           |   |   |          |         
|                                                                                          |                                        |               | (6,542.4 | )         |   |   | 8,367.4  |         
|                                                                                          |                                        |               |          |           |   |   |          |         
|Total liabilities and shareholders
	(deficiency) equity                                  |                                        | $             | 138.4    |           |   | $ | 10,457.0 |         
|                                                                                          |                                        |               |          |           |   |   |          |         

See accompanying notes.

F-45



---



##### 



NTL INCORPORATED

Schedule I  Condensed
Financial Information of Registrant 
(Continued)

Condensed Statements of Operations


|                                                                          |  |                   |           |                     |  |   |          |  
|------------------------------------------------------------------------- |  | ----------------- | --------- | ------------------- |  | - | -------- | -
|                                                                          |  |                   |           | For the Period from
|                                                                          |  | Year Ended        |           | May 18, 2000 to    
|                                                                          |  | December 31, 2001 |           | December 31, 2000  
|                                                                          |  |                   |           |                    
|                                                                          |  |                  
|                                                                          |  | (in millions)    
|Costs and expenses                                                        |  |                   |           |                     |  |   |          |  
|Asset impairments                                                         |  | $                 | 426.3     |                     |  | $ |         |  
|Corporate expenses                                                        |  |                   | 29.4      |                     |  |   | 9.4      |  
|Amortization                                                              |  |                   | 0.2       |                     |  |   |         |  
|                                                                          |  |                   |           |                     |  |   |          |  
|Operating (loss)                                                          |  |                   | (455.9    | )                   |  |   | (9.4     | )
|Other income (expense)                                                    |  |                   |           |                     |  |   |          |  
|Interest income and other, net                                            |  |                   | 4.7       |                     |  |   | 10.9     |  
|Interest expense                                                          |  |                   | (5.3      | )                   |  |   |         |  
|Foreign currency transaction (losses) gains                               |  |                   | (0.4      | )                   |  |   | 1.9      |  
|                                                                          |  |                   |           |                     |  |   |          |  
|(Loss) income before income taxes and equity in
	net (loss) of affiliates |  |                   | (456.9    | )                   |  |   | 3.4      |  
|Income tax expense                                                        |  |                   |          |                     |  |   | (0.2     | )
|                                                                          |  |                   |           |                     |  |   |          |  
|(Loss) income before equity in net (loss) of
	affiliates                  |  |                   | (456.9    | )                   |  |   | 3.2      |  
|Equity in net (loss) of subsidiaries                                      |  |                   | (13,784.4 | )                   |  |   | (2,966.9 | )
|                                                                          |  |                   |           |                     |  |   |          |  
|Net (loss)                                                                |  |                   | (14,241.3 | )                   |  |   | (2,963.7 | )
|Preferred stock dividend                                                  |  |                   | (325.7    | )                   |  |   | (194.0   | )
|                                                                          |  |                   |           |                     |  |   |          |  
|Net (loss) available to common shareholders                               |  | $                 | (14,567.0 | )                   |  | $ | (3,157.7 | )
|                                                                          |  |                   |           |                     |  |   |          |  

See accompanying notes.

F-46



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##### 



NTL Incorporated

Schedule ICondensed Financial
Information of Registrant (continued)

Condensed Statements of Cash Flows


(in millions)


|                                                                              |  |                   |       |                                  |  |   |          |  
|----------------------------------------------------------------------------- |  | ----------------- | ----- | -------------------------------- |  | - | -------- | -
|                                                                              |  | Year Ended        |       | For the Period from May 18, 2000
|                                                                              |  | December 31, 2001 |       | to December 31, 2000            
|                                                                              |  |                   |       |                                 
|Net cash (used in) provided by operating
	activities                          |  | $                 | (6.2  | )                                |  | $ | 0.7      |  
|Investing activities                                                          |  |                   |       |                                  |  |   |          |  
|Purchase of marketable securities                                             |  |                   |      |                                  |  |   | (96.9    | )
|Proceeds from sales of marketable securities                                  |  |                   | 60.3  |                                  |  |   | 202.6    |  
|Contribution to subsidiary                                                    |  |                   |      |                                  |  |   | (4.3     | )
|Due from CoreComm Limited                                                     |  |                   | (15.0 | )                                |  |   |         |  
|Decrease in investments in and loans to affiliates                            |  |                   | (92.9 | )                                |  |   | (4,229.3 | )
|                                                                              |  |                   |       |                                  |  |   |          |  
|Net cash (used in) investing activities                                       |  |                   | (47.6 | )                                |  |   | (4,127.9 | )
|Financing activities                                                          |  |                   |       |                                  |  |   |          |  
|Proceeds from borrowings, net of financing costs                              |  |                   | 95.9  |                                  |  |   |         |  
|Proceeds from exercise of stock options and
	warrants                         |  |                   |      |                                  |  |   | 6.8      |  
|Proceeds from issuance of preferred stock                                     |  |                   |      |                                  |  |   | 1,862.0  |  
|Proceeds from issuance of common stock                                        |  |                   | 13.0  |                                  |  |   | 2,327.6  |  
|                                                                              |  |                   |       |                                  |  |   |          |  
|Net cash provided by financing activities                                     |  |                   | 108.9 |                                  |  |   | 4,196.4  |  
|                                                                              |  |                   |       |                                  |  |   |          |  
|Increase in cash and cash equivalents                                         |  |                   | 55.1  |                                  |  |   | 69.2     |  
|Cash and cash equivalents at beginning of period                              |  |                   | 69.2  |                                  |  |   |         |  
|                                                                              |  |                   |       |                                  |  |   |          |  
|Cash and cash equivalents at end of period                                    |  | $                 | 124.3 |                                  |  | $ | 69.2     |  
|                                                                              |  |                   |       |                                  |  |   |          |  
|Supplemental disclosure of cash flow
	information                             |  |                   |       |                                  |  |   |          |  
|Cash paid during the period for interest                                      |  | $                 | 3.1   |                                  |  | $ |         |  
|Supplemental schedule of non-cash financing
	activities                       |  |                   |       |                                  |  |   |          |  
|Accretion of dividends and discount on preferred
	stock                       |  | $                 | 220.8 |                                  |  | $ | 78.1     |  
|Conversion of Convertible Notes, net of
	unamortized deferred financing costs |  |                   | 128.3 |                                  |  |   |         |  
|Common stock and stock options issued for
	acquisition                        |  |                   | 4.3   |                                  |  |   |         |  
|Redeemable preferred stock issued for investment
	in affiliates               |  |                   | 518.0 |                                  |  |   |         |  

See accompanying notes.

F-47



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##### 



NTL Incorporated

Schedule I  Condensed
Financial Information of the Registrant

Notes to Condensed Financial
Statements


1. Corporate Restructuring

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

2. Basis of Presentation

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

3. Redeemable Preferred Stock

Dividends on the Variable Coupon Redeemable
Preferred Stock, Series A (Variable Coupon Redeemable
Preferred Stock) are payable quarterly at the
Companys option in cash or additional shares of Variable
Coupon Redeemable Preferred Stock at a quarterly rate based on a
quotient of (x) the sum of (1) the EURIBOR Rate in
effect on the first day of every dividend period plus
(2) 2.5% over (y) four, per share. The Variable Coupon
Redeemable Preferred Stock has a stated value and liquidation
preference of $10,000 per share and is mandatorily redeemable
for cash by the Company on May 18, 2002. The Companys
27% interest in Noos is pledged to France Telecom to secure the
mandatory redemption obligation under its Variable Coupon
Redeemable Preferred Stock.

Dividends on the 6.5% Fixed Coupon Redeemable
Preferred Stock, Series A (6.5% Redeemable Preferred
Stock) are cumulative and are payable in cash upon
redemption. The 6.5% Redeemable Preferred Stock has a stated
value and liquidation preference of $10,000 per share and is
mandatorily redeemable for cash by the Company on May 18,
2007.

Dividends on the Cumulative Convertible Preferred
Stock, Series A (Convertible Preferred Stock)
are payable quarterly in additional shares of Convertible
Preferred Stock, at the following quarterly dividend rates:
(i) from September 12, 2001 through March 26,
2002, $13.44 per share, (ii) from March 27, 2002
through March 26, 2003, $21.23 per share and
(iii) from March 27, 2003 through March 26, 2004,
$26.61 per share. Once the Convertibility Date (as defined
below) is set, the quarterly dividend rate resets to $16.12 per
share and the Convertible Preferred Stock becomes eligible for
conversion into shares of the Companys common stock
beginning on a Convertibility Date, at which time
the conversion price is set at 125% of the immediately preceding
25 trading day volume-weighted average price of the
Companys common stock (the Convertibility Base
Price). The Convertibility Date is as follows:
March 27, 2002, unless the Company elects to delay
convertibility until March 27, 2003 or, alternatively,
redeems, at its option, all shares of the Convertible Preferred
Stock on March 27, 2002 in cash; if the Company has
delayed, March 27, 2003, unless the Company elects again to
delay convertibility until March 27, 2004, which it may
only do if the Convertibility Base Price would be less than or
equal to $65.00 per share (as may be adjusted for certain
antidilutive events); the Company may also elect, instead, to
redeem all shares of the Convertible Preferred Stock on
March 27, 2003 in cash; if the Company has delayed,
March 27, 2004, unless the Company elects to redeem all
shares of the Convertible Preferred Stock on March 27, 2004
in cash. In no event will the Convertibility Date be after
March 27, 2004. In March 2002, the company elected to delay
the Convertibility Date until at least March 27, 2003. The
Convertible Preferred Stock has a stated value and liquidation
preference of $1,075.17 per share and is mandatorily redeemable
for cash by the Company on March 27, 2009.

F-48



---



##### 



NTL Incorporated


Schedule I  Condensed
Financial Information of the
Registrant  (Continued)

Notes to Condensed Financial
Statements


Holders of Convertible Preferred Stock other than
any commercial bank or their affiliates may at any time elect,
subject to some conditions, to exchange their Convertible
Preferred Stock for up to a 50% interest in an entity holding
the Companys Swiss operations.

Dividends on the 13% Senior Redeemable
Exchangeable Preferred Stock (the Redeemable Preferred
Stock) accrue at 13% per annum ($130 per share) and are
payable quarterly in arrears. Dividends accruing on or prior to
February 15, 2004 may, at the option of the Company, be
paid in cash, by the issuance of additional Redeemable Preferred
Stock or in any combination of the foregoing. The Redeemable
Preferred Stock may be redeemed, at the Companys option,
in whole or in part, at any time after February 15, 2002 at
a redemption price of 106.5% of the liquidation preference of
$1,000 per share that declines annually to 100% in 2005, in each
case together with accrued and unpaid dividends to the
redemption date. The Redeemable Preferred Stock is subject to
mandatory redemption on February 15, 2009. On any scheduled
dividend payment date, the Company may, at its option, exchange
all of the shares of Redeemable Preferred Stock then outstanding
for the Companys 13% Subordinated Exchange Debentures due
2009.

4. Note Payable to NTL Communications
Corp.

On September 28, 2001, NTL Communications
Corp., a wholly-owned indirect subsidiary of the Company, loaned
the Company $150.0 million in cash and received 15.0% Promissory
Notes due September 30, 2004. Interest is payable monthly
in cash at a rate of 15.0% per annum beginning on
October 31, 2001. The loan is included in investments in
and loans to affiliates.

5. Other

No cash dividends were paid to the registrant by
subsidiaries for the year ended December 31, 2001 and for
the period from May 18, 2000 to December 31, 2000.

The Company is a joint obligor for the NTL
(Delaware), Inc. 5 3/4% Convertible Subordinated Notes due
December 15, 2009 and for the NTL Communications Corp. 7%
Convertible Subordinated Notes due December 15, 2008. The
Company is a co-obligor on a subordinated basis for the NTL
Communications Corp. 6 3/4% Convertible Senior Notes due
May 15, 2008.

F-49



---



##### 



NTL Incorporated and Subsidiaries

Schedule II  Valuation
and Qualifying Accounts

|                             |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |       | 
|---------------------------- | ------------------------------- | ------------- | - | ---------- |  | ---------- | - | ------------- |  | --------- | - | - |  |  | - | ----- | ---- |  | - | ----- | 
|                             |                                 |               |   |            |  |            |   |              
|Col. A                       |                                 | Col. B        |   | Col. C     |  | Col. D     |   | Col. E       
|                             |                                 |               |   |            |  |            |   |              
|                             |                                 |               |   |            |  |            |   |              
|                             |                                 |               |   | Additions  |  |            |   |              
|                             |                                 |               |   |            |  |            |   |              
|                             |                                 |               |   |            |  | (2)        |   |               |  |          
|                             |                                 |               |   | (1)        |  | Charged to |   |               |  |          
|                             |                                 | Balance at    |   | Charged to |  | Other      |   | (Deductions)/ |  | Balance  
|                             |                                 | Beginning of  |   | Costs And  |  | Accounts  |   | Additions     |  | at End   
|Description                  |                                 | Period        |   | Expenses   |  | Describe   |   | Describe      |  | of Period
|                             |                                 |               |   |            |  |            |   |               |  |          
|                             |                                 |              
|                             |                                 | (in millions)
|Year ended December 31, 2001 |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |               | $ | 141.4      |  |            | $ | 60.7          |  |           | $ |  |  |  | $ | (68.3 | )(a) |  | $ | 133.8 | 
|                             |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for loans receivable  |               | $ |           |  |            | $ | 37.2          |  |           | $ |  |  |  | $ |      |      |  | $ | 37.2  | 
|                             |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|Year ended December 31, 2000 |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |               | $ | 85.6       |  |            | $ | 98.9          |  |           | $ |  |  |  | $ | (43.1 | )(b) |  | $ | 141.4 | 
|                             |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|Year ended December 31, 1999 |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      
|                             | Allowance for doubtful accounts |               | $ | 38.5       |  |            | $ | 46.2          |  |           | $ |  |  |  | $ | 0.9   | (c)  |  | $ | 85.6  | 
|                             |                                 |               |   |            |  |            |   |               |  |           |   |   |  |  |   |       |      |  |   |      



---



|    |                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Uncollectible accounts written-off, net of
	recoveries of $64.3 million and $4.0 million foreign
	currency translation adjustments.                                                                                                                      
|   
|(b) | Uncollectible accounts written-off, net of
	recoveries of $90.4 million and $5.5 million foreign
	exchange currency translation adjustments, offset by
	$52.8 million allowance for doubtful accounts as of
	acquisition dates of purchased subsidiaries.
|   
|(c) | Uncollectible accounts written-off, net of
	recoveries of $15.6 million and $1.2 million foreign
	exchange currency translation adjustments, offset by
	$17.7 million allowance for doubtful accounts as of
	acquisition dates of purchased subsidiaries.

F-50